8428 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

ENVIRONMENTAL PROTECTION 

AGENCY 

40 CFR Parts 59, 80, 85, and 86 

[EPA–HQ–OAR–2005–0036; FRL–8278–4] 

RIN 2060–AK70 

Control of Hazardous Air Pollutants 

From Mobile Sources 

AGENCY: Environmental Protection 

Agency (EPA). 

ACTION: Final rule. 

SUMMARY: EPA is adopting controls on 

gasoline, passenger vehicles, and 

portable fuel containers (primarily gas 

cans) that will significantly reduce 

emissions of benzene and other 

hazardous air pollutants (‘‘mobile 

source air toxics’’). Benzene is a known 

human carcinogen, and mobile sources 

are responsible for the majority of 

benzene emissions. The other mobile 

source air toxics are known or suspected 

to cause cancer or other serious health 

effects. We are limiting the benzene 

content of gasoline to an annual refinery 

average of 0.62% by volume, beginning 

in 2011. In addition, for gasoline, we are 

establishing a maximum average 

standard for refineries of 1.3% by 

volume beginning on July 1, 2012, 

which acts as an upper limit on gasoline 

benzene content when credits are used 

to meet the 0.62 volume % standard. We 

are also limiting exhaust emissions of 

hydrocarbons from passenger vehicles 

when they are operated at cold 

temperatures. This standard will be 

phased in from 2010 to 2015. For 

passenger vehicles, we are also adopting 

evaporative emissions standards that are 

equivalent to those currently in effect in 

California. Finally, we are adopting a 

hydrocarbon emissions standard for 

portable fuel containers beginning in 

2009, which will reduce evaporation 

and spillage of gasoline from these 

containers. These controls will 

significantly reduce emissions of 

benzene and other mobile source air 

toxics such as 1,3-butadiene, 

formaldehyde, acetaldehyde, acrolein, 

and naphthalene. There will be 

additional substantial benefits to public 

health and welfare because of 

significant reductions in emissions of 

particulate matter from passenger 

vehicles. 

DATES: This rule is effective on April 27, 

2007. 

ADDRESSES: EPA has established a 

docket for this action under Docket ID 

No. EPA–HQ–2005–0036. All 

documents in the docket are listed on 

the 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 Docket, EPA/DC, 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 Docket is (202) 566– 

1742. 

FOR FURTHER INFORMATION CONTACT: Mr. 

Chris Lieske, U.S. EPA, Office of 

Transportation and Air Quality, 

Assessment and Standards Division 

(ASD), Environmental Protection 

Agency, 2000 Traverwood Drive, Ann 

Arbor, MI 48105; telephone number: 

(734) 214–4584; fax number: (734) 214– 

4816; e-mail address: 

lieske.christopher@epa.gov, or 

Assessment and Standards Division 

Hotline; telephone number: (734) 214– 

4636; e-mail address: asdinfo@epa.gov. 

SUPPLEMENTARY INFORMATION: 

Does This Action Apply to Me? 

Entities potentially affected by this 

action are those that produce new motor 

vehicles, alter individual imported 

motor vehicles to address U.S. 

regulation, or convert motor vehicles to 

use alternative fuels. It will also affect 

you if you produce gasoline motor fuel 

or manufacture portable gasoline 

containers. Regulated categories 

include: 

Category NAICS 

codes a SIC codes b Examples of potentially affected entities 

Industry ..................................................................................................... 336111 3711 Motor vehicle manufacturers. 

Industry ..................................................................................................... 335312 3621 Alternative fuel vehicle converters. 

424720 5172 

811198 7539 

.................... 7549 

Industry ..................................................................................................... 811111 7538 Independent commercial importers. 

811112 7533 

811198 7549 

Industry ..................................................................................................... 324110 2911 Gasoline fuel refiners. 

Industry ..................................................................................................... 326199 

332431 

3089 

3411 

Portable fuel container manufacturers. 

a North American Industry Classification System (NAICS). 

bStandard 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 potentially be regulated by 

this action. Other types of entities not 

listed in the table could also be 

regulated. To determine whether your 

activities are regulated by this action, 

you should carefully examine the 

applicability criteria in 40 CFR parts 59, 

80, 85, and 86. If you have any 

questions regarding the applicability of 

this action to a particular entity, consult 

the person listed in the preceding FOR

FURTHER INFORMATION CONTACT section. 

Outline of This Preamble 

I. Summary 

II. Overview of Final Rule 

A. Light-Duty Vehicle Emission Standards 

B. Gasoline Fuel Standards 

C. Portable Fuel Container (PFC) Controls 

III. Why Is EPA Taking This Action? 

A. Statutory Requirements 

1. Clean Air Act Section 202(l) 

2. Clean Air Act Section 183(e) 

3. Energy Policy Act 

B. Public Health Impacts of Mobile Source 

Air Toxics (MSATs) 

1. What Are MSATs? 

2. Health Risk Associated With MSATs 

a. National Cancer Risk 

b. National Risk of Noncancer Health 

Effects 

c. Exposure Near Roads 

d. Exposure From Attached Garages 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8429 

3. What Are the Health Effects of Air 

Toxics? 

a. Overview of Potential Cancer and 

Noncancer Health Effects 

b. Health Effects of Key MSATs 

i. Benzene 

ii. 1,3-Butadiene 

iii. Formaldehyde 

iv. Acetaldehyde 

v. Acrolein 

vi. Polycyclic Organic Matter (POM) 

vii. Naphthalene 

viii. Diesel Exhaust 

c. Gasoline PM 

d. Near-Roadway Health Effects 

C. Ozone 

1. Background 

2. Health Effects of Ozone 

3. Plant and Ecosystem Effects of Ozone 

4. Current and Projected 8-hour Ozone 

Levels 

D. Particulate Matter 

1. Background 

2. Health Effects of PM 

3. Welfare Effects of PM 

a. Visibility 

i. Background 

ii Current Visibility Impairment 

iii. Future Visibility Impairment 

b. Atmospheric Deposition 

c. Materials Damage and Soiling 

4. Current and Projected PM2.5 Levels 

5. Current PM10 Levels 

IV. What Are the Emissions, Air Quality, and 

Public Health Impacts of This Rule? 

A. Emissions Impacts of All Rule 

Provisions Combined 

1. How Will MSAT Emissions Be Reduced? 

2. How Will VOC Emissions Be Reduced? 

3. How Will PM Emissions Be Reduced? 

B. Emission Impacts by Provision 

1. Vehicle Controls 

a. Volatile Organic Compounds (VOC) 

b. Toxics 

c. PM2.5

2. Fuel Benzene Standard 

3. PFC Standards 

a. VOC 

b. Toxics 

C. What Are the Air Quality, Exposure, and 

Public Health Impacts of This Rule? 

1. Mobile Source Air Toxics 

2. Ozone 

3. PM 

D. What Other Mobile Source Emissions 

Control Programs Reduce MSATs? 

1. Fuels Programs 

a. Gasoline Sulfur 

b. Gasoline Volatility 

c. Diesel Fuel 

d. Phase-Out of Lead in Gasoline 

2. Highway Vehicle and Engine Programs 

3. Nonroad Engine Programs 

4. Voluntary Programs 

5. Additional Programs Under 

Development That Will Reduce MSATs 

a. On-Board Diagnostics for Heavy-Duty 

Vehicles Over 14,000 Pounds 

b. Standards for Small Nonroad SparkIgnition Engines 

c. Standards for Locomotive and Marine 

Diesel Engines 

E. How Do These Mobile Source Programs 

Satisfy the Requirements of Clean Air 

Act Section 202(l)? 

V. New Light-duty Vehicle Standards 

A. Introduction 

B. What Cold Temperature Requirements 

Are We Adopting? 

1. Why Are We Adopting a New Cold 

Temperature NMHC Standard? 

2. What Are the New NMHC Exhaust 

Emissions Standards? 

3. Feasibility of the Cold Temperature 

NMHC Standards 

a. Currently Available Emission Control 

Technologies 

b. Feasibility Considering Current 

Certification Levels, Deterioration and 

Compliance Margin 

c. Feasibility and Test Programs 

4. Standards Timing and Phase-In 

a. Phase-In Schedule 

b. Alternative Phase-In Schedules 

5. Certification Levels 

6. Credit Program 

a. How Credits Are Calculated 

b. Credits Earned Prior to Primary PhaseIn Schedule 

c. How Credits Can Be Used 

d. Discounting and Unlimited Life 

e. Deficits Can Be Carried Forward 

f. Voluntary Heavy-Duty Vehicle Credit 

Program 

7. Additional Vehicle Cold Temperature 

Standard Provisions 

a. Applicability 

b. Useful Life 

c. High Altitude 

d. In-Use Standards for Vehicles Produced 

During Phase-In 

8. Monitoring and Enforcement 

C. What Evaporative Emissions Standards 

Are We Finalizing? 

1. Current Controls and Feasibility of the 

New Standards 

2. Evaporative Standards Timing 

3. Timing for Flex Fuel Vehicles 

4. In-Use Evaporative Emission Standards 

5. Existing Differences Between California 

and Federal Evaporative Emission Test 

Procedures 

D. Additional Exhaust Control Under 

Normal Conditions 

E. Vehicle Provisions for Small Volume 

Manufacturers 

1. Lead Time Transition Provisions 

2. Hardship Provisions 

3. Special Provisions for Independent 

Commercial Importers (ICIs) 

VI. Gasoline Benzene Control Program 

A. Description of and Rationale for the 

Gasoline Benzene Control Program 

1. Gasoline Benzene Content Standard 

a. Description of the Average Benzene 

Content Standard 

b. Why Are We Finalizing a Benzene 

Content Standard? 

i. Standards That Would Include Toxics 

Other Than Benzene 

ii. Control of Gasoline Sulfur and/or 

Volatility for MSAT Reduction 

iii. Diesel Fuel Changes 

c. Why Are We Finalizing a Level of 0.62 

vol% for the Average Benzene Standard? 

i. General Technological Feasibility of 

Benzene Control 

ii. Appropriateness of the 0.62 vol% 

Average Benzene Content Standard 

iii. Timing of the Average Standard 

d. Upper Limit Benzene Standard 

2. Description of the Averaging, Banking, 

and Trading (ABT) Program 

a. Overview 

b. Credit Generation 

i. Eligibility 

ii. Early Credit Generation 

iii. Standard Credit Generation 

c. Credit Use 

i. Early Credit Life 

ii. Standard Credit Life 

iii. Consideration of Unlimited Credit Life 

iv. Credit Trading Provisions 

3. Provisions for Small Refiners and 

Refiners Facing Hardship Situations 

a. Provisions for Small Refiners 

i. Definition of Small Refiner for Purposes 

of the MSAT2 Small Refiner Provisions 

ii. Small Refiner Status Application 

Requirements 

iii. Small Refiner Provisions 

iv. The Effect of Financial and Other 

Transactions on Small Refiner Status and 

Small Refiner Relief Provisions 

b. Provisions for Refiners Facing Hardship 

Situations 

i. Temporary Waivers Based on Extreme 

Hardship Circumstances 

ii. Temporary Waivers Based on 

Unforeseen Circumstances 

c. Option for Early Compliance in Certain 

Circumstances 

B. How Will the Gasoline Benzene 

Standard Be Implemented? 

1. General Provisions 

2. Small Refiner Status Application 

Requirements 

3. Administrative and Enforcement 

Provisions 

a. Sampling/Testing 

b. Recordkeeping/Reporting 

C. How Will the Program Relate to Other 

Fuel-Related Toxics Programs? 

D. How Does This Program Satisfy the 

Statutory Requirements of Clean Air Act 

Section 202(l)(2)? 

VII. Portable Fuel Containers 

A. What Are the New HC Emissions 

Standards for PFCs? 

1. Description of Emissions Standard 

2. Determination of Best Available Control 

3. Diesel, Kerosene and Utility Containers 

4. Automatic Shut-Off 

B. Timing of Standard 

C. What Test Procedures Would Be Used? 

1. Diurnal Test 

2. Preconditioning To Ensure Durable InUse Control 

a. Durability Cycles 

b. Preconditioning Fuel Soak 

c. Spout Actuation 

D. What Certification and In-Use 

Compliance Provisions Is EPA Adopting? 

1. Certification 

2. Emissions Warranty and In-Use 

Compliance 

3. Labeling 

E. How Would State Programs Be Affected 

by EPA Standards? 

F. Provisions for Small PFC Manufacturers 

1. First Type of Hardship Provision 

2. Second Type of Hardship Provision 

VIII. What Are the Estimated Impacts of the 

Rule? 

A. Refinery Costs of Gasoline Benzene 

Reduction 

1. Methodology 

a. Overview of the Benzene Program Cost 

Methodology 


pwalker on PROD1PC71 with RULES_2
8430 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

b. Changes to the Cost Estimation 

Methodology Used in the Proposed Rule 

c. Linear Programming Cost Model 

d. Refinery-by-Refinery Cost Model 

e. Price of Chemical Grade Benzene 

2. Summary of Costs 

a. Nationwide Costs of the Final Benzene 

Control Program 

b. Regional Costs 

c. Refining Industry Cost Study 

B. What Are the Vehicle Cost Impacts? 

C. What Are the PFC Cost Impacts? 

D. Cost per Ton of Emissions Reduced 

E. Benefits 

1. Unquantified Health and Environmental 

Benefits 

2. Quantified Human Health and 

Environmental Effects of the Final Cold 

Temperature Vehicle Standard 

3. Monetized Benefits 

4. What Are the Significant Limitations of 

the Benefit Analysis? 

5. How Do the Benefits Compare to the 

Costs of the Final Standards? 

F. Economic Impact Analysis 

1. What Is an Economic Impact Analysis? 

2. What Is the Economic Impact Model? 

3. What Economic Sectors Are Included in 

This Economic Impact Analysis? 

4. What Are the Key Features of the 

Economic Impact Model? 

5. What Are the Key Model Inputs? 

6. What Are the Results of the Economic 

Impact Modeling? 

IX. Public Participation 

X. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review 

B. Paperwork Reduction Act 

C. Regulatory Flexibility Act (RFA), as 

Amended by the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (SBREFA), 5 U.S.C. 601 et seq. 

1. Overview 

2. The Need for and Objectives of This 

Rule 

3. Summary of the Significant Issues 

Raised by the Public Comments 

4. Summary of Regulated Small Entities 

a. Highway Light-Duty Vehicles 

b. Gasoline Refiners 

c. Portable Fuel Container Manufacturers 

5. Description of the Reporting, 

Recordkeeping, and Other Compliance 

Requirements of the Rule 

6. Relevant Federal Rules 

7. Steps Taken To Minimize the Significant 

Economic Impact on Small Entities 

a. Significant Panel Findings 

b. Outreach With Small Entities (and the 

Panel Process) 

c. Small Business Flexibilities 

i. Highway Light-Duty Vehicles 

ii. Gasoline Refiners 

iii. Portable Fuel Containers 

D. Unfunded Mandates Reform Act 

E. Executive Order 13132: Federalism 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

and Safety Risks 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution, or Use 

I. National Technology Transfer 

Advancement Act 

J. Executive Order 12898: Federal Actions 

To Address Environmental Justice in 

Minority Populations and Low-Income 

Populations 

K. Congressional Review Act 

XI. Statutory Provisions and Legal Authority 

I. Summary 

Mobile sources emit air toxics (also 

known as ‘‘hazardous air pollutants’’) 

that can cause cancer and other serious 

health effects. Mobile sources contribute 

significantly to the nationwide risk from 

breathing outdoor sources of air toxics. 

Mobile sources were responsible for 

about 44% of outdoor toxic emissions, 

almost 50% of the cancer risk, and 74% 

of the noncancer risk according to EPA’s 

National-Scale Air Toxics Assessment 

(NATA) for 1999. In addition, people 

who live or work near major roads or 

live in homes with attached garages are 

likely to have higher exposures and risk, 

which are not reflected in NATA. 

According to NATA for 1999, there 

are a few mobile source air toxics that 

pose the greatest risk based on current 

information about ambient levels and 

exposure. These include benzene, 1,3- 

butadiene, formaldehyde, acrolein, 

naphthalene, and polycyclic organic 

matter (POM). All of these compounds 

are gas-phase hydrocarbons except 

POM, which appears in the gas and 

particle phases. Benzene is the most 

significant contributor to cancer risk 

from all outdoor air toxics, according to 

NATA for 1999. NATA does not include 

a quantitative estimate of cancer risk for 

diesel exhaust, but it concludes that 

diesel exhaust is a mixture of pollutants 

that collectively poses one of the 

greatest relative cancer risks when 

compared with the other individual 

pollutants assessed. Although we expect 

significant reductions in mobile source 

air toxics in the future, cancer and 

noncancer health risks will remain a 

public health concern, and exposure to 

benzene will remain the largest 

contributor to this risk. 

In this rule, we are finalizing 

standards for passenger vehicles, 

gasoline, and portable fuel containers 

(typically gas cans). Specifically, we are 

finalizing standards for: 

• exhaust hydrocarbon emissions 

from passenger vehicles during cold 

temperature operation; 

• evaporative hydrocarbon emissions 

from passenger vehicles; 

• the benzene content of gasoline; 

and 

• hydrocarbon emissions from 

portable fuel containers that would 

reduce evaporation, permeation, and 

spillage from these containers. 

These standards will significantly 

reduce emissions of the many air toxics 

that are hydrocarbons, including 

benzene, 1,3-butadiene, formaldehyde, 

acetaldehyde, acrolein, and 

naphthalene. The fuel benzene 

standards and hydrocarbon standards 

for vehicles and portable fuel containers 

will together reduce total emissions of 

air toxics by 330,000 tons in 2030, 

including 61,000 tons of benzene. As a 

result of this final rule, in 2030 

passenger vehicles will emit 45% less 

benzene, gas cans will emit almost 80% 

less benzene, and gasoline will have 

38% less benzene overall. Mobile 

sources were responsible for over 70% 

of benzene emissions in 1999. 

The reductions in mobile source air 

toxics emissions will reduce exposure 

and predicted risk of cancer and 

noncancer health effects, including in 

environments where exposure and risk 

may be highest, such as near roads, in 

vehicles, and in homes with attached 

garages. Nationwide, the cancer risk 

attributable to total MSATs emitted by 

all mobile sources will be reduced by 

30%, and the risk from mobile source 

benzene will be reduced by 37%. At 

2030 exposure levels, the highway 

vehicle contribution to MSAT cancer 

risk will be reduced on average 36% 

across the U.S., and the highway vehicle 

contribution to benzene cancer risk will 

be reduced on average by 43% across 

the U.S. Nationwide, the mobile source 

contribution to the respiratory hazard 

index will be reduced by 23%. In 

addition, the hydrocarbon reductions 

from the vehicle and gas can standards 

will reduce VOC emissions (which are 

precursors to ozone and PM2.5) by over 

1.1 million tons in 2030. The vehicle 

standards will reduce direct PM2.5

emissions by over 19,000 tons in 2030 

and will also reduce secondary 

formation of PM2.5. Although ozone and 

PM2.5 are considered criteria pollutants 

rather than ‘‘air toxics,’’ reductions in 

ozone and PM2.5 are nevertheless 

important co-benefits of this proposal. 

Section I.B.2 of this preamble 

provides more discussion of the public 

health and environmental impacts of 

mobile source air toxics, ozone, and PM. 

Details on health effects, emissions, 

exposure, and cancer risks are also 

located in Chapters 1–3 of the 

Regulatory Impact Analysis (RIA) for 

this rule. 

We estimate that the benefits of this 

rule will be about $6 billion in 2030, 

based on the direct PM2.5 reductions 

from the vehicle standards, plus 

unquantified benefits from reductions in 

mobile source air toxics and VOC. We 

estimate that the annual net social costs 

of this rule will be about $400 million 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8431 

in 2030 (expressed in 2003 dollars). 

These net social costs include the value 

of fuel savings from the proposed gas 

can standards, which will be worth 

about $92 million in 2030. 

The rule will have an average cost of 

0.27 cents per gallon of gasoline, less 

than $1 per vehicle, and less than $2 per 

gas can. The reduced evaporation from 

gas cans will result in fuel savings that 

will more than offset the increased cost 

for the gas can. In 2030, the long-term 

cost per ton of the standards (in 

combination, and including fuel 

savings) will be $1,100 per ton of total 

mobile source air toxics reduced; $5,900 

per ton of benzene reduced; and no cost 

for the hydrocarbon and PM reductions 

(because we expect the vehicle 

standards will have no cost in 2020 and 

beyond). Section VIII of the preamble 

and Chapters 8–13 of the RIA provide 

more details on the costs, benefits, and 

economic impacts of the standards. The 

impacts on small entities and the 

flexibilities we are finalizing are 

discussed in section X of this preamble 

and Chapter 14 of the RIA. 

II. Overview of Final Rule 

A. Light-Duty Vehicle Emission 

Standards 

As described in more detail in section 

V, we are adopting new standards for 

both exhaust and evaporative emissions 

from passenger vehicles. The new 

exhaust emissions standards will 

significantly reduce non-methane 

hydrocarbon (NMHC) emissions from 

passenger vehicles at cold temperatures. 

These hydrocarbons include many 

mobile source air toxics (including 

benzene), as well as VOC. 

As we discussed in the proposal, 

current vehicle emission standards are 

based on testing of NMHC that is 

generally performed at 75 °F. Recent 

research and analysis indicates that 

these standards are not resulting in 

robust control of NMHC at lower 

temperatures. We believe that cold 

temperature NMHC control can be 

substantially improved using the same 

technological approaches that are 

generally already being used in the Tier 

2 vehicle fleet to meet the stringent 

standards at 75 °F. These coldtemperature NMHC controls will also 

result in lower direct PM emissions at 

cold temperatures. 

Accordingly, consistent with the 

proposal, we are adopting a new NMHC 

exhaust emissions standard at 20 °F for 

light-duty vehicles, light-duty trucks, 

and medium-duty passenger vehicles. 

Vehicles at or below 6,000 pounds gross 

vehicle weight rating (GVWR) will be 

subject to a sales-weighted fleet average 

NMHC level of 0.3 grams/mile. Vehicles 

between 6,000 and 8,500 pounds GVWR 

and medium-duty passenger vehicles 

will be subject to a sales-weighted fleet 

average NMHC level of 0.5 grams/mile. 

For lighter vehicles, the standard will 

phase in between 2010 and 2013. For 

heavier vehicles, the new standards will 

phase in between 2012 and 2015. The 

standards include a credit program and 

other provisions designed to provide 

flexibility to manufacturers, especially 

during the phase-in periods. These 

provisions are designed to allow the 

earliest possible phase-in of standards 

and help minimize costs and ease the 

transition to new standards. These 

standards in combination are expected 

to lead to emissions control over a wide 

range of in-use temperatures, and not 

just at 20 °F and 75 °F. 

We are also establishing, as proposed, 

a set of nominally more stringent 

evaporative emission standards for all 

light-duty vehicles, light-duty trucks, 

and medium-duty passenger vehicles. 

The standards are equivalent to 

California’s Low Emission Vehicle II 

(LEV II) standards, and they reflect the 

evaporative emissions levels that are 

already being achieved nationwide. The 

standards codify the approach that most 

manufacturers are already taking for 50- 

state evaporative systems, and thus 

prevent backsliding in the future. The 

evaporative emission standards will 

take effect in 2009 for lighter vehicles 

and in 2010 for the heavier vehicles. 

Section V of this preamble provides 

details on the exhaust and evaporative 

vehicle standards. 

B. Gasoline Fuel Standards 

As we proposed, we are limiting the 

benzene content of all gasoline, both 

reformulated and conventional. 

Beginning January 1, 2011, refiners must 

meet a refinery average gasoline 

benzene content standard of 0.62% by 

volume on all their gasoline. The 

program is described in more detail in 

section VI of this preamble. The 

standard does not apply to gasoline 

produced and/or sold for use in 

California because such gasoline is 

already covered under California’s 

Phase 3 Reformulated Gasoline 

(Ca3RFG) program. 

The benzene content standard, in 

combination with the existing gasoline 

sulfur standard, will result in air toxics 

emissions reductions that are greater 

than required under all existing gasoline 

toxics programs. As a result, upon full 

implementation in 2011, the regulatory 

provisions for the benzene control 

program will become the regulatory 

mechanism used to implement the 

reformulated gasoline (RFG) and Antidumping annual average toxics 

performance and benzene content 

requirements. The current RFG and 

Anti-dumping annual average 

provisions thus will be replaced by this 

benzene control program. This benzene 

control program will also replace the 

requirements of the 2001 MSAT rule 

(‘‘MSAT1’’). In addition, the program 

will satisfy certain fuel MSAT 

conditions of the Energy Policy Act of 

2005 and obviate the need to revise 

toxics baselines for reformulated 

gasoline otherwise required by that Act. 

In all of these ways, the existing 

national fuel-related MSAT regulatory 

program will be significantly 

consolidated and simplified. 

We are finalizing a nationwide ABT 

program that allows refiners and 

importers to choose the most 

economical compliance strategy 

(investment in technology, credits, or 

both) for meeting the 0.62 vol% annual 

average standard. From 2007–2010, 

refiners can generate ‘‘early credits’’ by 

making qualifying benzene reductions 

earlier than required. Beginning in 2011 

and continuing indefinitely, refiners 

and importers can generate ‘‘standard 

credits’’ by producing/importing 

gasoline with benzene levels below 0.62 

volume percent (vol%) on an annual 

average basis. Credits may be used 

interchangeably towards company 

compliance with the 0.62 vol% 

standard, ‘‘banked’’ for future use, and/ 

or transferred nationwide to other 

refiners/importers subject to the 

standard. In addition to the 0.62 vol% 

standard, refiners and importers must 

also meet a 1.3 vol% maximum average 

benzene standard beginning July 1, 

2012. To comply with the maximum 

average standard, gasoline produced by 

a refinery or imported by an importer 

may not exceed 1.3 vol% benzene on an 

annual average basis. 

The ABT program allows us to set a 

numerically more stringent benzene 

standard than would otherwise be 

achievable (within the meaning of Clean 

Air Act section 202(l)(2)). The ABT 

program also allows implementation to 

occur earlier. Under this benzene 

content standard and ABT program, 

gasoline in all areas of the country will 

have lower benzene levels than they 

have today. Overall benzene levels will 

be 38% lower. This will reduce benzene 

emissions and exposure nationwide. 

The program includes special 

provisions for refiners facing hardship. 

Refiners approved as ‘‘small refiners’’

are eligible for certain temporary relief 

provisions. In addition, any refiner 

facing extreme unforeseen 

circumstances or extreme hardship 


pwalker on PROD1PC71 with RULES_2
8432 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

1Based on quantitative estimates of risk, which 

do not include risks associated with diesel 

particulate matter and diesel exhaust organic gases. 

2 ‘‘Motor vehicles’’ is a term of art, defined in 

Clean Air Act section 216(2) as ‘‘any self-propelled 

vehicle designed for transporting persons or 

property on a street or highway.’’

3 71 FR 28320, May 16, 2006, ‘‘Consumer and 

Commercial Products: Schedule for Regulation’’. 

circumstances can apply for similar 

temporary relief. 

C. Portable Fuel Container (PFC) 

Controls 

Portable fuel containers, such as gas 

cans and diesel and kerosene 

containers, are consumer products used 

to refuel a wide variety of equipment, 

including lawn and garden equipment, 

recreational equipment, and passenger 

vehicles that have run out of gas. As 

described in section VII, we are 

adopting standards for these containers 

that would reduce hydrocarbon 

emissions from evaporation, 

permeation, and spillage. The program 

we are finalizing is consistent with the 

proposal, except that instead of 

applying only to gasoline containers, it 

will also apply to diesel and kerosene 

containers. These standards will 

significantly reduce emissions of 

benzene and other gaseous toxics, as 

well as VOC. VOC is an ozone 

precursor, and certain aromatic species 

are believed to contribute to secondary 

organic PM 2.5. 

We are finalizing a performance-based 

standard of 0.3 grams per gallon per day 

of hydrocarbons, determined based on 

the emissions from the can over a 

diurnal test cycle specified in the rule. 

The standard applies to containers 

manufactured on or after January 1, 

2009. We are also establishing test 

procedures and a certification and 

compliance program, in order to ensure 

that containers meet the emission 

standard over a range of in-use 

conditions. The standards are based on 

the performance of best available 

control technologies, such as durable 

permeation barriers, automatically 

closing spouts, and cans that are wellsealed, and the standards will result in 

the use of these control technologies. 

California implemented an emissions 

control program for gas cans in 2001, 

and since then, several other states have 

adopted the program. Last year, 

California adopted a revised program, 

which will take effect July 1, 2007. The 

revised California program is very 

similar to the program we are finalizing. 

Although a few aspects of the programs 

are different, we believe manufacturers 

will be able to meet both EPA and 

California requirements with the same 

container designs, resulting in 

equivalent emission reductions. 

III. Why Is EPA Taking This Action? 

People experience elevated risk of 

cancer and other noncancer health 

effects from exposure to air toxics. 

Mobile sources are responsible for a 

significant portion of this risk. For 

example, benzene is the most significant 

contributor to cancer risk from all 

outdoor air toxics 1, and most of the 

nation’s benzene emissions come from 

mobile sources. These risks vary 

depending on where people live and 

work and the kinds of activities in 

which they engage. People who live or 

work near major roads, people that 

spend a large amount of time in vehicles 

or work with motorized equipment, and 

people living in homes with attached 

garages are likely to have higher 

exposures and higher risks. Although 

we expect significant reductions in 

mobile source air toxics in the future, 

predicted cancer and noncancer health 

risks are likely to remain a public health 

concern. Benzene will likely remain the 

largest contributor to this risk. In 

addition, some mobile source air toxics 

contribute to the formation of ozone and 

PM 2.5, which contribute to serious 

public health problems. Section III.B of 

this preamble discusses the risks posed 

by outdoor toxics now and in the future. 

Sections III.C and III.D discuss the 

health and welfare effects of ozone and 

PM, respectively. The controls in this 

rule will significantly reduce exposure 

to emissions of mobile source air toxics 

(and reduce exposure to ozone and 

PM 2.5 as well), thus reducing these 

public health concerns. 

A. Statutory Requirements 

1. Clean Air Act Section 202(l) 

Section 202(l)(2) of the Clean Air Act 

requires EPA to set standards to control 

hazardous air pollutants (‘‘air toxics’’) 

from motor vehicles 2, motor vehicle 

fuels, or both. These standards must 

reflect the greatest degree of emission 

reduction achievable through the 

application of technology which will be 

available, taking into consideration the 

motor vehicle standards established 

under section 202(a) of the Act, the 

availability and cost of the technology, 

and noise, energy and safety factors, and 

lead time. The standards are to be set 

under Clean Air Act sections 202(a)(1) 

or 211(c)(1), and they are to apply, at a 

minimum, to benzene and 

formaldehyde emissions. 

Section 202(a)(1) of the Clean Air Act 

directs EPA to set standards for new 

motor vehicles or new motor vehicle 

engines which EPA judges to cause or 

contribute to air pollution which may 

reasonably be anticipated to endanger 

public health or welfare. We are issuing 

the vehicle emissions standards under 

this authority in conjunction with 

section 202(l)(2). 

Section 211(c)(1)(A) of the Clean Air 

Act authorizes EPA (among other 

things) to control the manufacture of 

fuel if any emission product of such fuel 

causes or contributes to air pollution 

which may reasonably be anticipated to 

endanger public health or welfare. We 

are issuing the benzene standard for 

gasoline under this authority in 

conjunction with section 202(l)(2). 

Clean Air Act section 202(l)(2) also 

requires EPA to revise its regulations 

controlling hazardous air pollutants 

from motor vehicles and fuels, ‘‘from 

time to time.’’ EPA’s first rule under 

Clean Air Act section 202(l) was 

published on March 29, 2001, entitled, 

‘‘Control of Emissions of Hazardous Air 

Pollutants from Mobile Sources’’ (66 FR 

17230). That rule committed to 

additional rulemaking that would 

evaluate the need for and feasibility of 

additional controls. Today’s final rule 

fulfills that commitment. 

2. Clean Air Act Section 183(e) 

Clean Air Act section 183(e)(3) 

requires EPA to list categories of 

consumer or commercial products that 

the Administrator determines, based on 

an EPA study of VOC emissions from 

such products, contribute at least 80 

percent of the VOC emissions from such 

products in areas violating the national 

ambient air quality standard for ozone. 

EPA promulgated this list at 60 FR 

15264 (March 23, 1995), but it did not 

consider or list portable fuel containers. 

After analyzing these containers’

emissions inventory impacts, we 

recently published a Federal Register 

notice that added portable fuel 

containers to the list of consumer 

products to be regulated.3 EPA is 

required to develop rules reflecting 

‘‘best available controls’’ to reduce VOC 

emissions from the listed products. 

‘‘Best available controls’’ are defined in 

section 183(e)(1)(A) as follows: 

The term ‘‘best available controls’’ means 

the degree of emissions reduction that the 

Administrator determines, on the basis of 

technological and economic feasibility, 

health, environmental, and energy impacts, is 

achievable through the application of the 

most effective equipment, measures, 

processes, methods, systems, or techniques, 

including chemical reformulation, product or 

feedstock substitution, repackaging, and 

directions for use, consumption, storage, or 

disposal. 

Section 183(e)(4) also allows these 

standards to be implemented by means 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8433 

4http://www.epa.gov/ttn/atw/nata1999/. 

5http://www.epa.gov/ttn/atw/nata1999/. 

6NATA does not include a quantitative estimate 

of cancer risk for diesel particulate matter and 

diesel exhaust organic gases. EPA has concluded 

that while diesel exhaust is likely to be a human 

carcinogen, available data are not sufficient to 

develop a confident estimate of cancer unit risk. 

of ‘‘any system or systems of regulation 

as the Administrator may deem 

appropriate, including requirements for 

registration and labeling, selfmonitoring and reporting * * * 

concerning the manufacture, processing, 

distribution, use, consumption, or 

disposal of the product.’’ We are issuing 

a hydrocarbon standard for portable fuel 

containers under the authority of 

section 183(e). 

3. Energy Policy Act 

Section 1504(b) of the Energy Policy 

Act of 2005 requires EPA to adjust the 

toxics emissions baselines for 

individual refineries for reformulated 

gasoline to reflect 2001–2002 fuel 

qualities. However, the Act provides 

that this action becomes unnecessary if 

EPA takes action which results in 

greater overall reductions of toxics 

emissions from vehicles in areas with 

reformulated gasoline. As described in 

section VI of this preamble, we believe 

the benzene content standard we are 

finalizing today will in fact result in 

greater overall reductions than would be 

achieved by adjusting the individual 

baselines under the Energy Policy Act. 

Accordingly, under the provisions of the 

Energy Policy Act, this rule obviates the 

need for readjusting emissions baselines 

for reformulated gasoline. 

B. Public Health Impacts of Mobile 

Source Air Toxics (MSATs) 

1. What Are MSATs? 

Section 202(l) refers to ‘‘hazardous air 

pollutants from motor vehicles and 

motor vehicle fuels.’’ We use the term 

‘‘mobile source air toxics (MSATs)’’ to 

refer to compounds that are emitted by 

mobile sources and have the potential 

for serious adverse health effects. Some 

MSATs are known or suspected to cause 

cancer. Some of these pollutants are also 

known to have adverse health effects on 

people’s respiratory, cardiovascular, 

neurological, immune, reproductive, or 

other organ systems, and they may also 

have developmental effects. Some may 

pose particular hazards to more 

susceptible and sensitive populations, 

such as pregnant women, children, the 

elderly, or people with pre-existing 

illnesses. 

Some MSATs of particular concern 

include benzene, 1,3-butadiene, 

formaldehyde, acrolein, naphthalene, 

polycyclic organic matter, and diesel 

particulate matter and diesel exhaust 

organic gases. These are compounds 

that EPA’s National-Scale Air Toxics 

Assessment (NATA) for 1999 4 identifies 

as the most significant contributors to 

cancer and noncancer health risk from 

breathing outdoor air toxics, and that 

have a significant contribution from 

mobile sources. Our understanding of 

what compounds pose the greatest risk 

will evolve over time, based on our 

understanding of the ambient levels and 

health effects associated with the 

compounds. 

EPA has compiled a Master List of 

Compounds Emitted by Mobile Sources, 

based on an extensive review of the 

literature on exhaust and evaporative 

emissions from onroad and nonroad 

equipment. The list currently includes 

approximately 1,000 compounds, and it 

is available in the public docket for this 

rule and on the Web (http:// 

www.epa.gov/otaq/toxics.htm). Chapter 

1 of the RIA provides a detailed 

discussion of information sources for 

identifying those compounds that have 

the potential for serious adverse health 

effects (i.e., could be considered 

‘‘MSATs’’). This discussion includes a 

list of those compounds that are emitted 

by mobile sources and listed in EPA’s 

Integrated Risk Information System 

(IRIS). 

MSATs are emitted by motor vehicles, 

nonroad engines (such as lawn and 

garden equipment, farming and 

construction equipment, locomotives, 

and ships), aircraft, and their fuels. 

MSATs are emitted as a result of various 

processes. Some MSATs are present in 

fuel or fuel additives and are emitted to 

the air when the fuel evaporates or 

passes through the engine. Some 

MSATs are formed through engine 

combustion processes. Some 

compounds, like formaldehyde and 

acetaldehyde, are also formed through a 

secondary process when other mobile 

source pollutants undergo chemical 

reactions in the atmosphere. Finally, 

some air toxics, such as metals, result 

from engine wear or from impurities in 

oil or fuel. 

There are other sources of air toxics, 

including stationary sources, such as 

power plants, factories, oil refineries, 

dry cleaners, gas stations, and small 

manufacturers. They can also be 

produced by combustion of wood and 

other organic materials. There are also 

indoor sources of air toxics, such as 

solvent evaporation and outgassing from 

furniture and building materials. 

2. Health Risk Associated With MSATs 

EPA’s National-Scale Air Toxics 

Assessment (NATA) for 1999 provides 

some perspective on the average risk of 

cancer and noncancer health effects 

associated with breathing air toxics from 

outdoor sources, and the contribution of 

mobile sources to these risks.5, 6 NATA 

assessed 177 pollutants. It is worth 

noting that NATA does not include 

indoor sources of air toxics. Also, it 

assumes uniform outdoor 

concentrations within a census tract, 

and therefore does not reflect elevated 

concentrations and exposures near 

roadways or other sources within a 

census tract. Additional limitations and 

uncertainties associated with NATA are 

discussed in Section 3.2.1.3 of the RIA. 

Nevertheless, its findings are useful in 

providing a perspective on the 

magnitude of risks posed by outdoor 

sources of air toxics generally, and in 

identifying what pollutants and sources 

are important contributors to these 

health risks. Some of NATA’s findings 

are discussed in the paragraphs below. 

For this rule, EPA also performed a 

national-scale assessment for 1999 and 

future years using the same modeling 

tools and approach as the 1999 NATA, 

but with updated emissions inventories 

and an updated exposure model. The 

exposure model accounts for higher 

toxics concentrations near roads. This 

updated national-scale analysis 

examined only those toxics that are 

emitted by mobile sources (i.e., a subset 

of the 177 pollutants included in 

NATA). However, the analysis includes 

all sources of those pollutants, 

including mobile, stationary, and area 

sources. The analysis is discussed in 

detail in Chapter 3 of the RIA, and some 

highlights of the findings are discussed 

immediately below. 

In addition to national-scale analysis, 

we have also evaluated more refined 

local-scale modeling, measured ambient 

concentrations, personal exposure 

measurements, and other data. This 

information is discussed in detail in 

Chapter 3 of the RIA. These data 

collectively show that while levels of air 

toxics are decreasing, potential public 

health risks remain a concern, and 

ambient levels and personal exposure 

vary significantly. These data indicate 

that concentrations of benzene and 

other air toxics can be higher near hightraffic roads, inside vehicles, and in 

homes with attached garages. 

a. National Cancer Risk 

According to NATA, the average 

national cancer risk in 1999 from all 

outdoor sources of air toxics was 

estimated to be 42 in a million. That is, 

42 out of one million people would be 


pwalker on PROD1PC71 with RULES_2
8434 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

7This includes emissions from mobile and 

stationary sources of these pollutants. 

8That is, the respiratory hazard index exceeded 

1. See section III.B.3.a for more information. 

9Acrolein was assigned an overall confidence 

level of ‘‘lower’’ based on consideration of the 

combined uncertainties from the modeling 

estimates. In contrast, formaldehyde was assigned 

an overall confidence level of ‘‘medium.’’

10U.S. Environmental Protection Agency (2004) 

Air Quality Criteria for Particulate Matter. Research 

Triangle Park, NC: National Center for 

Environmental Assessment—RTP Office; Report No. 

EPA/600/P–99/002aF, p. 8–318. 

11U.S. EPA. 2007. The HAPEM6 User’s Guide. 

Prepared for Ted Palma, Office of Air Quality 

Planning and Standards, Research Triangle Park, 

NC, by Arlene Rosenbaum and Michael Huang, ICF 

International, January 2007. This document is 

available in Docket EPA–HQ–OAR–2005–0036. 

http://www.epa.gov/ttn/fera/human_hapem.html. 

12Major roads are defined as those roads defined 

by the U.S. Census as one of the following: ‘‘limited 

access highway,’’ ‘‘highway,’’ ‘‘major road (primary, 

secondary and connecting roads ),’’ or ‘‘ramp.’’

13United States Census Bureau. (2004) American 

Housing Survey web page. [Online at http:// 

www.census.gov/hhes/www/housing/ahs/ahs03/ 

ahs03.html ] Table IA–6. 

14 Green, R.S.; Smorodinsky, S.; Kim, J.J.; 

McLaughlin, R.; Ostro, B. (2004) Proximity of 

California public schools to busy roads. Environ. 

Health Perspect. 112: 61–66. 

15 Garshick, E.; Laden, F.; Hart, J.E.; Caron, A. 

(2003) Residence near a major road and respiratory 

symptoms in U.S. veterans. Epidemiol. 14: 728–736. 

expected to contract cancer from a 

lifetime of breathing air toxics at 1999 

levels. Mobile sources were responsible 

for 44% of outdoor toxic emissions and 

almost 50% of the cancer risk. Benzene 

is the largest contributor to cancer risk 

of all 133 pollutants quantitatively 

assessed in the 1999 NATA, and mobile 

sources are the single largest source of 

ambient benzene. 

According to the national-scale 

analysis performed for this rule, the 

national average cancer risk in 1999 

from breathing outdoor sources of 

MSATs was about 25 in a million.7 Over 

224 million people in 1999 were 

exposed to a risk level above 10 in a 

million due to chronic inhalation 

exposure to MSATs. About 130 million 

people in 1999 were exposed to a risk 

level above 10 in a million due to 

chronic inhalation exposure to benzene 

alone. Mobile sources were responsible 

for over 70% of benzene emissions in 

1999. 

Although air toxics emissions are 

projected to decline in the future as a 

result of standards EPA has previously 

adopted, cancer risk will continue to be 

a public health concern. Without 

additional controls, the predicted 

national average cancer risk from 

MSATs in 2030 is predicted to be above 

20 in a million. In fact, in 2030 there 

will be more people exposed to levels of 

MSATs that result in the highest levels 

of risk. For instance, the number of 

Americans above the 10 in a million 

cancer risk level from exposure to 

MSATs is projected to increase from 223 

million in 1999 to 272 million in 2030. 

Mobile sources will continue to be a 

significant contributor to risk in the 

future, accounting for 43% of total air 

toxic emissions in 2020, and 55% of 

benzene emissions. 

b. National Risk of Noncancer Health 

Effects 

According to national-scale modeling 

for 1999 done for this rule, nearly the 

entire U.S. population was exposed to 

an average level of air toxics that has the 

potential for adverse respiratory health 

effects (noncancer).8 We estimated this 

will continue to be the case in 2030, 

even though toxics levels will be lower. 

Mobile sources were responsible for 

74% of the noncancer (respiratory) risk 

from outdoor air toxics in the 1999 

NATA. The majority of this risk was 

from acrolein, and formaldehyde also 

contributed to the risk of respiratory 

health effects.9

Although not included in NATA’s 

estimates of noncancer risk, PM from 

gasoline and diesel mobile sources 

contributes significantly to the health 

effects associated with ambient PM, for 

which EPA has established National 

Ambient Air Quality Standards. There 

are extensive human data showing a 

wide spectrum of adverse health effects 

associated with exposure to ambient 

PM.10

c. Exposure Near Roads 

A substantial number of modeling 

assessment and air quality monitoring 

studies show elevated concentrations of 

multiple MSATs in close proximity to 

major roads. Exposure studies also 

indicate that populations spending time 

near major roadways likely experience 

elevated personal exposures to motor 

vehicle-related pollutants. In addition, 

these populations may experience 

exposures to differing physical and 

chemical compositions of certain air 

toxic pollutants depending on the 

amount of time spent in close proximity 

to motor vehicle emissions. Chapter 3.1 

of the RIA provides a detailed 

discussion of air quality monitoring, 

personal exposure monitoring, and 

modeling assessments near major 

roadways. 

As part of the analyses underlying the 

final rule, we employed a new version 

of the Hazardous Air Pollutant Exposure 

Model (HAPEM), the exposure model 

used in NATA. HAPEM6 explicitly 

accounts for the gradient in outdoor 

concentrations that occurs near major 

roads, and the fraction of the population 

living near major roads.11 The HAPEM6 

analysis highlights the fact that 

residence near a major road is a 

substantial contributor to overall 

differences in exposure to directlyemitted MSATs. As an example, while 

the average of within-tract median 

annual census tract exposure 

concentrations nationally is 1.4 μg/m3, 

the average 90th percentile of withintract exposure concentration nationally 

is over 2 μg/m3. 

The potential population exposed to 

elevated concentrations near major 

roadways is large. A study of the 

populations nationally indicated that 

more than half of the population lives 

within 200 meters of a major road.12 It 

should be noted that this analysis relied 

on the Census Bureau definition of a 

major road, which is not based on traffic 

volume. Thus, some of the roads 

designated as ‘‘major’’ may carry a low 

volume of traffic. This estimate is 

consistent with other studies that have 

examined the proximity of population 

to major roads. These studies are 

discussed in Section 3.5 of the RIA. In 

addition, analysis of data from the 

Census Bureau’s American Housing 

Survey suggests that approximately 37 

million people live within 300 feet 

(∼100 meters) of a 4-or-more lane 

highway, railroad, or airport.13

American Housing Survey statistics, as 

well as epidemiology studies, indicate 

that those houses located near major 

transportation sources are more likely to 

be lower in income or have minority 

residents than houses not located near 

major transportation sources. These data 

are also discussed in detail in Section 

3.5 of the RIA. 

Other population studies also indicate 

that a significant fraction of the 

population resides in locations near 

major roads. At present, the available 

studies use different indicators of 

‘‘major road’’ and of ‘‘proximity,’’ but 

the estimates range from 12.4% of 

student enrollment in California 

attending schools within 150 meters of 

roads with 25,000 vehicles per day or 

more, to 13% of Massachusetts veterans 

living within 50 meters of a road with 

at least 10,000 vehicles per day.14, 15

Using a more general definition of a 

‘‘major road,’’ between 22% and 51% of 

different study populations live near 

such roads. 

d. Exposure From Attached Garages 

People living in homes with attached 

garages are potentially exposed to 

substantially higher overall 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8435 

16U.S. EPA (2000). Integrated Risk Information 

System File for Benzene. This material is available 

electronically at http://www.epa.gov/iris/subst/ 

0276.htm. 

17U.S. EPA (2002). Toxicological Review of 

Benzene (Noncancer Effects). National Center for 

Environmental Assessment, Washington, DC. 

Report No. EPA/635/R–02/001F. http:// 

www.epa.gov/iris/toxreviews/0276-tr.pdf. 

18U.S. EPA (1998) Carcinogenic Effects of 

Benzene: An Update, National Center for 

Environmental Assessment, Washington, DC. 

EPA600-P–97–001F. Enter report number at the 

following search page, http://yosemite.epa.gov/ 

ncepihom/nsCatalog.nsf//SearchPubs?Openform. 

19Leukemia is a blood disease in which the white 

blood cells are abnormal in type or number. 

Leukemia may be divided into nonlymphocytic 

(granulocytic) leukemias and lymphocytic 

leukemias. Nonlymphocytic leukemia generally 

involves the types of white blood cells (leukocytes) 

that are involved in engulfing, killing, and digesting 

bacteria and other parasites (phagocytosis) as well 

as releasing chemicals involved in allergic and 

immune responses. This type of leukemia may also 

involve erythroblastic cell types (immature red 

blood cells). Lymphocytic leukemia involves the 

lymphocyte type of white blood cell that is 

responsible for antibody and cell-mediated immune 

responses. Both nonlymphocytic and lymphocytic 

leukemia may, in turn, be separated into acute 

(rapid and fatal) and chronic (lingering, lasting) 

forms. For example in acute myeloid leukemia there 

is diminished production of normal red blood cells 

(erythrocytes), granulocytes, and platelets (control 

clotting), which leads to death by anemia, infection, 

or hemorrhage. These events can be rapid. In 

chronic myeloid leukemia (CML) the leukemic cells 

retain the ability to differentiate (i.e., be responsive 

to stimulatory factors) and perform function; later 

there is a loss of the ability to respond. 

20U.S. EPA (1985) Environmental Protection 

Agency, Interim quantitative cancer unit risk 

estimates due to inhalation of benzene, prepared by 

the Office of Health and Environmental 

Assessment, Carcinogen Assessment Group, 

Washington, DC for the Office of Air Quality 

Planning and Standards, Washington, DC, 1985. 

21U.S. EPA (1993) Motor Vehicle-Related Air 

Toxics Study. Office of Mobile Sources, Ann Arbor, 

MI. http://www.epa.gov/otaq/regs/toxics/ 

tox_archive.htm. 

concentrations of benzene, toluene, and 

other VOCs from mobile source-related 

emissions. EPA has conducted a 

modeling analysis to examine the 

influence of attached garages on 

personal exposure to benzene (see 

Appendix 3A of RIA). Compared to 

national average exposure 

concentrations modeled in 1999 NATA, 

which does not account for emissions 

originating in attached garages, average 

exposure concentrations for people with 

attached garages could more than 

double. Other recent studies also 

emphasize the substantial role of 

attached garages in exposure to MSATs. 

Chapter 3 of the RIA discusses 

measurements of concentrations and 

exposure associated with attached 

garages and EPA’s modeling analysis. 

3. What Are the Health Effects of Air 

Toxics? 

a. Overview of Potential Cancer and 

Noncancer Health Effects 

Air toxics can cause of variety of 

cancer and noncancer health effects. 

Inhalation cancer risks are usually 

estimated by EPA as ‘‘unit risks,’’ which 

represent the excess lifetime cancer risk 

estimated to result from continuous 

exposure to an agent at a concentration 

of 1 mu g/m3 in air. Some air toxics are 

known to be carcinogenic in animals but 

lack data in humans. Many of these 

have been assumed to be human 

carcinogens. Also, in the absence of 

evidence of a nonlinear dose-response 

curve, EPA assumes these relationships 

between exposure and probability of 

cancer are linear. These unit risks are 

typically upper bound estimates. Upper 

bound estimates are more likely to 

overestimate than underestimate risk. 

Where there are strong epidemiological 

data, a maximum likelihood estimate 

(MLE) may be developed. An MLE is a 

best scientific estimate of risk. The 

benzene unit risk is an MLE. A 

discussion of the confidence in a 

quantitative cancer risk estimate is 

provided in the IRIS file for each 

compound. The discussion of the 

confidence in the cancer risk estimate 

includes an assessment of the source of 

the data (human or animal), 

uncertainties in dose estimates, choice 

of the model used to fit the exposure 

and response data and how 

uncertainties and potential confounders 

are handled. 

Potential noncancer chronic 

inhalation health risks are quantified 

using reference concentrations (RfCs) 

and noncancer chronic ingestion and 

dermal health risks are quantified using 

reference doses (RfDs). The RfC is an 

estimate (with uncertainty spanning 

perhaps an order of magnitude) of a 

daily exposure to the human population 

(including sensitive subgroups) that is 

likely to be without appreciable risk of 

deleterious effects during a lifetime. 

Sources of uncertainty in the 

development of the RfCs and RfDs 

include interspecies extrapolation 

(animal to human) and intraspecies 

extrapolation (average human to 

sensitive human). Additional sources of 

uncertainty can include the use of a 

lowest observed adverse effect level in 

place of a no observed adverse effect 

level, and other data deficiencies. A 

statement regarding the confidence in 

the RfC and/or RfD is developed to 

reflect the confidence in the principal 

study or studies on which the RfC or 

RfD are based and the confidence in the 

underlying database. Factors that affect 

the confidence in the principal study 

include how well the study was 

designed, conducted and reported. 

Factors that affect the confidence in the 

database include an assessment of the 

availability of information regarding 

identification of the critical effect, 

potentially susceptible populations and 

exposure scenarios relevant to 

assessment of risk. 

The RfC may be used to estimate a 

hazard quotient, which is the 

environmental exposure to a substance 

divided by its RfC. A hazard quotient 

greater than one indicates adverse 

health effects are possible. The hazard 

quotient cannot be translated to a 

probability that adverse health effects 

will occur, and is unlikely to be 

proportional to risk. It is especially 

important to note that a hazard quotient 

exceeding one does not necessarily 

mean that adverse health effects will 

occur. In NATA, hazard quotients for 

different respiratory irritants were also 

combined into a hazard index (HI). A 

hazard index is the sum of hazard 

quotients for substances that affect the 

same target organ or organ system. 

Because different pollutants may cause 

similar adverse health effects, it is often 

appropriate to combine hazard quotients 

associated with different substances. 

However, the HI is only an 

approximation of a combined effect 

because substances may affect a target 

organ in different ways. 

b. Health Effects of Key MSATs 

i. Benzene 

The EPA’s IRIS database lists 

benzene, an aromatic hydrocarbon, as a 

known human carcinogen (causing 

leukemia) by all routes of exposure.16 A 

number of adverse noncancer health 

effects including blood disorders and 

immunotoxicity have also been 

associated with long-term occupational 

exposure to benzene.17

Inhalation is the major source of 

human exposure to benzene in 

occupational and non-occupational 

settings. Long-term occupational 

inhalation exposure to benzene has been 

shown to cause cancers of the 

hematopoetic (blood cell) system in 

adults.18 Among these are acute 

nonlymphocytic leukemia 19 and 

chronic lymphocytic leukemia.20, 21

Leukemias, lymphomas, and other 

tumor types have been observed in 

experimental animals exposed to 

benzene by inhalation or oral 

administration. Exposure to benzene 

and/or its metabolites has also been 

linked with chromosomal changes in 


pwalker on PROD1PC71 with RULES_2
8436 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

22 International Agency for Research on Cancer 

(IARC) (1982) IARC monographs on the evaluation 

of carcinogenic risk of chemicals to humans, 

Volume 29, Some industrial chemicals and 

dyestuffs, International Agency for Research on 

Cancer, World Health Organization, Lyon, France, 

p. 345–389. 

23U.S. EPA (1998) Carcinogenic Effects of 

Benzene: An Update, National Center for 

Environmental Assessment, Washington, DC. 

EPA600-P–97–001F. Enter report number at the 

following search page, http://yosemite.epa.gov/ 

ncepihom/nsCatalog.nsf//SearchPubs?Openform. 

24 Irons, R.D., W.S. Stillman, D.B. Colagiovanni, 

and V.A. Henry (1992) Synergistic action of the 

benzene metabolite hydroquinone on myelopoietic 

stimulating activity of granulocyte/macrophage 

colony-stimulating factor in vitro, Proc. Natl. Acad. 

Sci. 89:3691–3695. 

25U.S. EPA (1998) Carcinogenic Effects of 

Benzene: An Update, National Center for 

Environmental Assessment, Washington, DC. 

EPA600-P–97–001F. Enter report number at the 

following search page, http://yosemite.epa.gov/ 

ncepihom/nsCatalog.nsf//SearchPubs?Openform. 

26U.S. EPA (1998) Carcinogenic Effects of 

Benzene: An Update, National Center for 

Environmental Assessment, Washington, DC. 

EPA600-P–97–001F. Enter report number at the 

following search page, http://yosemite.epa.gov/ 

ncepihom/nsCatalog.nsf//SearchPubs?Openform. 

27U.S. EPA (2005) Guidelines for Carcinogen Risk 

Assessment. Report No. EPA/630/P–03/001F. 

http://cfpub.epa.gov/ncea/raf/ 

recordisplay.cfm?deid=116283. 

28U.S. EPA (1998) Carcinogenic Effects of 

27U.S. EPA (2005) Guidelines for Carcinogen Risk 

Assessment. Report No. EPA/630/P–03/001F. 

http://cfpub.epa.gov/ncea/raf/ 

recordisplay.cfm?deid=116283. 28U.S. EPA (1998) Carcinogenic Effects of 

Benzene: An Update. EPA/600/P–97/001F. 29Rothman, N; Li, GL; Dosemeci, M; et al. (1996) 

Hematotoxicity among Chinese workers heavily 

exposed to benzene. Am. J. Indust. Med. 29:236–

246. 30Rappaport, S.M.; Waidyanatha, S.; Qu, Q.; 

Shore, R.; Jin, X.; Cohen, B.; Chen, L.; Melikian, A.; 

Li, G.; Yin, S.; Yan, H.; Xu, B.; Mu, R.; Li, Y.; Zhang, 

X.; and Li, K. (2002) Albumin adducts of benzene 

oxide and 1,4-benzoquinone as measures of human 

benzene metabolism. Cancer Research 62:1330–

1337. 

31Rappaport, S.M.; Waidyanatha, S.; Qu, Q.; 

Yeowell-O’Connell, K.; Rothman, N.; Smith M.T.; 

Zhang, L.; Qu, Q.; Shore, R.; Li, G.; Yin, S. (2005) 

Protein adducts as biomarkers of human enzene 

metabolism. Chem Biol Interact. 153–154:103–109. 

32Lin, Y–S., Vermeulen, R., Tsai, C.H., Suramya, 

W., Lan, Q., Rothman, N., Smith, M.T., Zhang, L., 

Shen, M., Songnian, Y., Kim, S., Rappaport, S.M. 

(2006) Albumin adducts of electrophilic benzene 

metabolites in benzene-exposed and control 

workers. Environ Health Perspec. 

33Hayes, R.B.; Yin, S.; Dosemeci, M.; Li, G.; 

Wacholder, S.; Travis, L.B.; Li, C.; Rothman, N.; 

Hoover, R.N.; and Linet, M.S. (1997) Benzene and 

the dose-related incidence of hematologic 

neoplasms in China. J. Nat. Cancer Inst. 89:1065–

1071. 34Hayes, R.B.; Songnian, Y.; Dosemeci, M.; and 

Linet, M. (2001) Benzene and lymphohematopoietic 

malignancies in humans. Am. J. Indust. Med. 

40:117–126. 35Lan, Q.; Zhang, L., Li, G., Vermeulen, R., et al. 

(2004). Hematotoxicity in Workers Exposed to Low 

Levels of Benzene. Science 306: 1774–1776. 36Shu, X.O.; Gao, Y.T.; Brinton, L.A.; et al. (1988) 

A population-based case-control study of childhood 

leukemia in Shanghai. Cancer 62:635–644. 37McKinney P.A.; Alexander, F.E.; Cartwright, 

R.A.; et al. (1991) Parental occupations of children 

with leukemia in west Cumbria, north Humberside, 

and Gateshead, Br. Med. J. 302:681–686. 38 Keller, KA; Snyder, CA. (1986) Mice exposed 

in utero to low concentrations of benzene exhibit 

enduring changes in their colony forming 

hematopoietic cells. Toxicology 42:171–181. 39 Keller, KA; Snyder, CA. (1988) Mice exposed 

in utero to 20 ppm benzene exhibit altered numbers 

of recognizable hematopoietic cells up to seven 

weeks after exposure. Fundam. Appl. Toxicol. 

10:224–232. 

40Corti, M; Snyder, CA. (1996) Influences of 

gender, development, pregnancy and ethanol 

consumption on the hematotoxicity of inhaled 10 

ppm benzene. Arch. Toxicol. 70:209–217. 

humans and animals22, 23 and increased 

proliferation of mouse bone marrow 

cells.24, 25

The latest assessment by EPA 

estimates the excess risk of developing 

leukemia from inhalation exposure to 

benzene at 2.2 × 10¥6 to 7.8 × 10¥6 per 

μg/m3. In other words, there is an 

estimated risk of about two to eight 

excess leukemia cases in one million 

people exposed to 1 μg/m3 of benzene 

over a lifetime.26 This range of unit risks 

reflects the MLEs calculated from 

different exposure assumptions and 

dose-response models that are linear at 

low doses. At present, the true cancer 

risk from exposure to benzene cannot be 

ascertained, even though dose-response 

data are used in the quantitative cancer 

risk analysis, because of uncertainties in 

the low-dose exposure scenarios and 

lack of clear understanding of the mode 

of action. A range of estimates of risk is 

recommended, each having equal 

scientific plausibility. There are 

confidence intervals associated with the 

MLE range that reflect variation of the 

observed data used to develop doseresponse values. For the upper end of 

the MLE range, the 5th and 95th 

percentile values are about a factor of 5 

lower and higher than the best fit value. 

The upper end of the MLE range was 

used in NATA. 

It should be noted that not enough 

information is known to determine the 

slope of the dose-response curve at 

environmental levels of exposure and to 

provide a sound scientific basis to 

choose any particular extrapolation/ 

exposure model to estimate human 

cancer risk at low doses. EPA risk 

assessment guidelines suggest using an 

assumption of linearity of dose response 

when (1) there is an absence of 

sufficient information on modes of 

action or (2) the mode of action 

information indicates that the doseresponse curve at low dose is or is 

expected to be linear.27 Since the mode 

of action for benzene carcinogenicity is 

unknown, the current cancer unit risk 

estimate assumes linearity of the lowdose response. Data that were 

considered by EPA in its carcinogenic 

update suggested that the dose-response 

relationship at doses below those 

examined in the studies reviewed in 

EPA’s most recent benzene assessment 

may be supralinear. Such a relationship 

could support the inference that cancer 

risks are as high or are higher than the 

estimates provided in the existing EPA 

assessment.28 Data discussed in the EPA 

IRIS assessment suggest that genetic 

abnormalities occur at low exposure in 

humans, and the formation of toxic 

metabolites plateaus above 25 ppm 

(80,000 μ/m3).29 More recent data on 

benzene adducts in humans, published 

after the most recent IRIS assessment, 

suggest that the enzymes involved in 

benzene metabolism start to saturate at 

exposure levels as low as 1 ppm.30, 31, 32

These data highlight the importance of 

ambient exposure levels and their 

contribution to benzene-related adducts. 

Because there is a transition from linear 

to saturable metabolism below 1 ppm, 

the assumption of low-dose linearity 

extrapolated from much higher 

exposures could lead to substantial 

underestimation of leukemia risks. This 

is consistent with recent 

epidemiological data which also suggest 

a supralinear exposure-response 

relationship and which ‘‘[extend] 

evidence for hematopoietic cancer risks 

to levels substantially lower than had 

previously been established.’’ 33, 34, 35

These data are from the largest cohort 

studies done to date with individual 

worker exposure estimates. However, 

these data have not yet been formally 

evaluated by EPA as part of the IRIS 

review process, and it is not clear how 

they might influence low-dose risk 

estimates. A better understanding of the 

biological mechanism of benzeneinduced leukemia is needed. 

Children may represent a 

subpopulation at increased risk from 

benzene exposure, due to factors that 

could increase their susceptibility. 

Children may have a higher unit body 

weight exposure because of their 

heightened activity patterns which can 

increase their exposures, as well as 

different ventilation tidal volumes and 

frequencies, factors that influence 

uptake. This could entail a greater 

lifetime risk of leukemia and other toxic 

effects from exposures occurring during 

childhood, if children are exposed to 

benzene at similar levels as adults. 

There is limited information from two 

studies regarding an increased risk to 

children whose parents have been 

occupationally exposed to benzene.36, 37

Data from animal studies have shown 

benzene exposures result in damage to 

the hematopoietic (blood cell formation) 

system during development.38, 39, 40


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8437 

41U.S. EPA. (2002). Toxicological Review of 

Benzene (Noncancer Effects). National Center for 

Environmental Assessment, Washington, DC. 

Report No. EPA/635/R–02/001F. http:// 

www.epa.gov/iris/toxreviews/0276-tr.pdf. 

42Ford, AM; Pombo-de-Oliveira, MS; McCarthy, 

KP; MacLean, JM; Carrico, KC; Vincent, RF; 

Greaves, M. (1997) Monoclonal origin of concordant 

T-cell malignancy in identical twins. Blood 89:281–

285. 

43Aksoy, M. (1989) Hematotoxicity and 

carcinogenicity of benzene. Environ. Health 

Perspect. 82:193–197. 

44 Goldstein, B.D. (1988) Benzene toxicity. 

Occupational medicine. State of the Art Reviews 3: 

541–554. 

45Pancytopenia is the reduction in the number of 

all three major types of blood cells (erythrocytes, or 

red blood cells, thrombocytes, or platelets, and 

leukocytes, or white blood cells). In adults, all three 

major types of blood cells are produced in the bone 

marrow of the skeletal system. The bone marrow 

contains immature cells, known as multipotent 

myeloid stem cells, that later differentiate into the 

various mature blood cells. Pancytopenia results 

from a reduction in the ability of the red bone 

marrow to produce adequate numbers of these 

mature blood cells. 

46Aksoy, M. (1991) Hematotoxicity, 

leukemogenicity and carcinogenicity of chronic 

exposure to benzene. In: Arinc, E.; Schenkman, J.B.; 

Hodgson, E., Eds. Molecular Aspects of 

Monooxygenases and Bioactivation of Toxic 

Compounds. New York: Plenum Press, pp. 415–434. 47 Goldstein, B.D. (1988) Benzene toxicity. 

Occupational medicine. State of the Art Reviews 3: 

541–554. 48Aksoy, M., S. Erdem, and G. Dincol. (1974) 

Leukemia in shoe-workers exposed chronically to 

benzene. Blood 44:837. 49Aksoy, M. and K. Erdem. (1978) A follow-up 

study on the mortality and the development of 

leukemia in 44 pancytopenic patients associated 

with long-term exposure to benzene. Blood 52: 285–

292. 

50Rothman, N., G.L. Li, M. Dosemeci, W.E. 

Bechtold, G.E. Marti, Y.Z. Wang, M. Linet, L.Q. Xi, 

W. Lu, M.T. Smith, N. Titenko-Holland, L.P. Zhang, 

W. Blot, S.N. Yin, and R.B. Hayes (1996) 

Hematotoxicity among Chinese workers heavily 

exposed to benzene. Am. J. Ind. Med. 29: 236–246. 

51EPA 2005 ‘‘Full IRIS Summary for Benzene 

(CASRN 71–43–2)’’ Environmental Protection 

Agency, Integrated Risk Information System (IRIS), 

Office of Health and Environmental Assessment, 

Environmental Criteria and Assessment Office, 

Cincinnati, OH, http://www.epa.gov/iris/subst/ 

0276.htm. 

52Qu, Q., R. Shore, G. Li, X. Jin, L.C. Chen, B. 

Cohen, et al. (2002). Hematological changes among 

Chinese workers with a broad range of benzene 

exposures. Am. J. Industr. Med. 42: 275–285. 

53Lan, Q.; Zhang, L., Li, G., Vermeulen, R., et al. 

(2004). Hematotoxicity in Workers Exposed to Low 

Levels of Benzene. Science 306: 1774–1776. 

54Turtletaub, K.W. and Mani, C. (2003). Benzene 

metabolism in rodents at doses relevant to human 

exposure from Urban Air. Res Rep Health Effect Inst 

113. 55U.S. EPA. (2002). Health Assessment of 1,3- 

Butadiene. Office of Research and Development, 

National Center for Environmental Assessment, 

Washington Office, Washington, DC. Report No. 

EPA600–P–98–001F. http://cfpub.epa.gov/ncea/ 

cfm/recordisplay.cfm?deid=54499. 

56EPA 2005 ‘‘Full IRIS Summary for 1,3- 

butadiene (CASRN 106–99–0)’’ Environmental 

Protection Agency, Integrated Risk Information 

System (IRIS), Office of Health and Environmental 

Assessment, Environmental Criteria and 

Assessment Office, Cincinnati, OH, http:// 

www.epa.gov/iris/subst/0139.htm. 

57 Delzell, E, N. Sathiakumar, M. Macaluso, et al. 

(1995). A follow-up study of synthetic rubber 

workers. Submitted to the International Institute of 

Synthetic Rubber Producers. University of Alabama 

at Birmingham. October 2, 1995. 

58EPA 2005 ‘‘Full IRIS Summary for 1,3- 

butadiene (CASRN 106–99–0)’’ Environmental 

Protection Agency, Integrated Risk Information 

System (IRIS), Office of Health and Environmental 

Assessment, Environmental Criteria and 

Assessment Office, Cincinnati, OH, http:// 

www.epa.gov/iris/subst/0139.htm. 

Also, key changes related to the 

development of childhood leukemia 

occur in the developing fetus.41 Several 

studies have reported that genetic 

changes related to eventual leukemia 

development occur before birth. For 

example, there is one study of genetic 

changes in twins who developed T cell 

leukemia at 9 years of age.42 An 

association between traffic volume, 

residential proximity to busy roads and 

occurrence of childhood leukemia has 

also been identified in some studies, 

although some studies show no 

association. 

A number of adverse noncancer 

health effects, including blood disorders 

such as preleukemia and aplastic 

anemia, have also been associated with 

long-term exposure to benzene.43, 44

People with long-term occupational 

exposure to benzene have experienced 

harmful effects on the blood-forming 

tissues, especially in the bone marrow. 

These effects can disrupt normal blood 

production and suppress the production 

of important blood components, such as 

red and white blood cells and blood 

platelets, leading to anemia (a reduction 

in the number of red blood cells), 

leukopenia (a reduction in the number 

of white blood cells), or 

thrombocytopenia (a reduction in the 

number of blood platelets, thus reducing 

the ability of blood to clot). Chronic 

inhalation exposure to benzene in 

humans and animals results in 

pancytopenia,45 a condition 

characterized by decreased numbers of 

circulating erythrocytes (red blood 

cells), leukocytes (white blood cells), 

and thrombocytes (blood platelets).46, 47

Individuals that develop pancytopenia 

and have continued exposure to 

benzene may develop aplastic anemia, 

whereas others exhibit both 

pancytopenia and bone marrow 

hyperplasia (excessive cell formation), a 

condition that may indicate a 

preleukemic state.48, 49 The most 

sensitive noncancer effect observed in 

humans, based on current data, is the 

depression of the absolute lymphocyte 

count in blood.50, 51

EPA’s inhalation reference 

concentration (RfC) for benzene is 30 

μg/m3, based on suppressed absolute 

lymphocyte counts as seen in humans 

under occupational exposure 

conditions. The overall confidence in 

this RfC is medium. Since development 

of this RfC, human reports of benzene’s 

hematotoxic effects have been published 

in the literature that provides data 

suggesting a wide range of 

hematological endpoints that are 

affected at occupational exposures of 

less than 5 ppm (about 16 mg/m3)52 and 

at air levels of 1 ppm (about 3 mg/m3) 

or less among genetically susceptible 

populations.53 One recent study found 

benzene metabolites in mouse liver and 

bone marrow at environmental doses, 

indicating that even concentrations in 

urban air can elicit a biochemical 

response in rodents that indicates 

toxicity.54 EPA has not formally 

evaluated these recent studies as part of 

the IRIS review process to determine 

whether or not they will lead to a 

change in the current RfC. EPA does not 

currently have an acute reference 

concentration for benzene. The Agency 

for Toxic Substances and Disease 

Registry Minimal Risk Level for acute 

exposure to benzene is 160 μg/m3 for 1–

14 days exposure. 

ii. 1,3-Butadiene 

EPA has characterized 1,3-butadiene, 

a hydrocarbon, as a leukemogen, 

carcinogenic to humans by 

inhalation.55 56 The specific mechanisms 

of 1,3-butadiene-induced carcinogenesis 

are unknown; however, it is virtually 

certain that the carcinogenic effects are 

mediated by genotoxic metabolites of 

1,3-butadiene. Animal data suggest that 

females may be more sensitive than 

males for cancer effects; nevertheless, 

there are insufficient data in humans 

from which to draw any conclusions on 

potentially sensitive subpopulations. 

The upper bound cancer unit risk 

estimate is 0.08 per ppm or 3 × 10 ¥5 per 

μg/m3 (based primarily on linear 

modeling and extrapolation of human 

data). In other words, it is estimated that 

approximately 30 persons in one 

million exposed to 1 μg/m3 of 1,3- 

butadiene continuously for their 

lifetime would develop cancer as a 

result of this exposure. The human 

incremental lifetime unit cancer risk 

estimate is based on extrapolation from 

leukemias observed in an occupational 

epidemiologic study.57 58 This estimate 

includes a two-fold adjustment to the 

epidemiologic-based unit cancer risk 

applied to reflect evidence from the 

rodent bioassays suggesting that the 

epidemiologic-based estimate (from 

males) may underestimate total cancer 


pwalker on PROD1PC71 with RULES_2
8438 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

59 Delzell, E., Sathiakumar, N., Graff, J., Macaluso, 

M., Maldonado, G., Matthews, R. (2006) An updated 

study of mortality among North American synthetic 

rubber industry workers. Health Effects Institute 

Report Number 132. 60Bevan, C.; Stadler, J.C.; Elliot, G.S.; et al. (1996) 

Subchronic toxicity of 4-vinylcyclohexene in rats 

and mice by inhalation. Fundam. Appl. Toxicol. 

32:1–10. 61U.S. EPA (1987). Assessment of Health Risks to 

Garment Workers and Certain Home Residents 

From Exposure to Formaldehyde, Office of 

Pesticides and Toxic Substances, April 1987. 62U.S. EPA (1989). Integrated Risk Information 

System File for Formaldehyde. This material is 

available electronically at http://www.epa.gov/iris/ 

subst/0419.htm. 63Hauptmann, M.; Lubin, J. H.; Stewart, P. A.; 

Hayes, R. B.; Blair, A. 2003. Mortality from 

lymphohematopoietic malignancies among workers 

in formaldehyde industries. Journal of the National 

Cancer Institute 95: 1615–1623. 64Hauptmann, M..; Lubin, J. H.; Stewart, P. A.; 

Hayes, R. B.; Blair, A. 2004. Mortality from solid 

cancers among workers in formaldehyde industries. 

American Journal of Epidemiology 159: 1117–1130. 

65Pinkerton, L. E. 2004. Mortality among a cohort 

of garment workers exposed to formaldehyde: an 

update. Occup. Environ. Med. 61: 193–200. 

66Coggon, D, EC Harris, J Poole, KT Palmer. 2003. 

Extended follow-up of a cohort of British chemical 

workers exposed to formaldehyde. J National 

Cancer Inst. 95:1608–1615. 

67Bundesinstitut fu ̈r Risikobewertung (BfR) 

Toxicological Assessment of Formaldehyde. 

Opinion of BfR No. 023/2006 of 30 March 2006. 

www.bfr.bund.de/cm/290/ 

toxicological_assessment_of_formaldehyde.pdf. 

68Conolly, RB, JS Kimbell, D Janszen, PM 

Schlosser, D Kalisak, J Preston, and FJ Miller. 2003. 

Biologically motivated computational modeling of 

formaldehyde carcinogenicity in the F344 rat. Tox. 

Sci. 75: 432–447. 

69Conolly, RB, JS Kimbell, D Janszen, PM 

Schlosser, D Kalisak, J Preston, and FJ Miller. 2004. 

Human respiratory tract cancer risks of inhaled 

formaldehyde: Dose-response predictions derived 

from biologically-motivated computational 

modeling of a combined rodent and human dataset. 

Tox. Sci. 82: 279–296. 

70Chemical Industry Institute of Toxicology 

(CIIT). 1999. Formaldehyde: Hazard 

characterization and dose-response assessment for 

carcinogenicity by the route of inhalation. CIIT, 

September 28, 1999. Research Triangle Park, NC. 

71Health Canada. 2001. Priority Substances List 

Assessment Report. Formaldehyde. Environment 

Canada, Health Canada, February 2001. 72U.S. EPA. 2004. National Emission Standards 

for Hazardous Air Pollutants for Plywood and 

Composite Wood Products Manufacture: Final Rule. 

(69 FR 45943, 7/30/04). 73U.S. EPA. 1988. Integrated Risk Information 

System File of Acetaldehyde. This material is 

available electronically at http://www.epa.gov/iris/ 

subst/0290.htm. 74Appleman, L. M., R. A. Woutersen, V. J. Feron, 

R. N. Hooftman, and W. R. F. Notten. (1986). Effects 

of the variable versus fixed exposure levels on the 

toxicity of acetaldehyde in rats. J. Appl. Toxicol. 6: 

331–336. 

risk from 1,3-butadiene exposure in the 

general population, particularly for 

breast cancer in females. A recent study 

extended the investigation of 1,3- 

butadiene exposure and leukemia 

among synthetic rubber industry 

workers.59 The results of this study 

strengthen the evidence for the 

relationship between 1,3-butadiene 

exposure and lymphohematopoietic 

cancer. This relationship was found to 

persist after controlling for exposure to 

other toxics in this work environment. 

1,3-Butadiene also causes a variety of 

reproductive and developmental effects 

in mice; no human data on these effects 

are available. The most sensitive effect 

was ovarian atrophy observed in a 

lifetime bioassay of female mice.60

Based on this critical effect and the 

benchmark concentration methodology, 

an RfC was calculated. This RfC for 

chronic health effects is 0.9 ppb, or 

about 2 μg/m3. Confidence in the 

inhalation RfC is medium. 

iii. Formaldehyde 

Since 1987, EPA has classified 

formaldehyde, a hydrocarbon, as a 

probable human carcinogen based on 

evidence in humans and in rats, mice, 

hamsters, and monkeys.61 EPA’s current 

IRIS summary provides an upper bound 

cancer unit risk estimate of 1.3 × 10¥5

per μg/m3.62 In other words, there is an 

estimated risk of about thirteen excess 

leukemia cases in one million people 

exposed to 1 μg/m3 of formaldehyde 

over a lifetime. 

EPA is currently reviewing recently 

published epidemiological data. For 

instance, research conducted by the 

National Cancer Institute (NCI) found an 

increased risk of nasopharyngeal cancer 

and lymphohematopoietic malignancies 

such as leukemia among workers 

exposed to formaldehyde.63 64 NCI is 

currently performing an update of these 

studies. A recent National Institute of 

Occupational Safety and Health 

(NIOSH) study of garment workers also 

found increased risk of death due to 

leukemia among workers exposed to 

formaldehyde.65 Extended follow-up of 

a cohort of British chemical workers did 

not find evidence of an increase in 

nasopharyngeal or 

lymphohematopoeitic cancers, but a 

continuing statistically significant 

excess in lung cancers was reported.66

Based on the developments of the last 

decade, in 2004, the working group of 

the International Agency for Research 

on Cancer concluded that formaldehyde 

is carcinogenic to humans (Group 1 

classification) on the basis of sufficient 

evidence in humans and sufficient 

evidence in experimental animals—a 

higher classification than previous IARC 

evaluations. In addition, the National 

Institute of Environmental Health 

Sciences recently nominated 

formaldehyde for reconsideration as a 

known human carcinogen under the 

National Toxicology Program. Since 

1981 it has been listed as a ‘‘reasonably 

anticipated human carcinogen.’’

Recently the German Federal Institute 

for Risk Assessment determined that 

formaldehyde is a known human 

carcinogen.67

In the past 15 years there has been 

substantial research on the inhalation 

dosimetry for formaldehyde in rodents 

and primates by the CIIT Centers for 

Health Research, with a focus on use of 

rodent data for refinement of the 

quantitative cancer dose-response 

assessment.68 69 70 CIIT’s risk assessment 

of formaldehyde incorporated 

mechanistic and dosimetric information 

on formaldehyde. The risk assessment 

analyzed carcinogenic risk from inhaled 

formaldehyde using approaches that 

were consistent with EPA’s draft 

guidelines for carcinogenic risk 

assessment. In 2001, Environment 

Canada relied on this cancer doseresponse assessment in their assessment 

of formaldehyde.71 In 2004, EPA also 

relied on this cancer unit risk estimate 

during the development of the plywood 

and composite wood products national 

emissions standards for hazardous air 

pollutants (NESHAPs).72 In these rules, 

EPA concluded that the CIIT work 

represented the best available 

application of the available mechanistic 

and dosimetric science on the doseresponse for portal of entry cancers due 

to formaldehyde exposures. EPA is 

reviewing the recent work cited above 

from the NCI and NIOSH, as well as the 

analysis by the CIIT Centers for Health 

Research and other studies, as part of a 

reassessment of the human hazard and 

dose-response associated with 

formaldehyde. 

Noncancer effects of formaldehyde 

have been observed in humans and 

several animal species and include 

irritation to eye, nose and throat tissues 

in conjunction with increased mucous 

secretions. 

iv. Acetaldehyde 

Acetaldehyde, a hydrocarbon, is 

classified in EPA’s IRIS database as a 

probable human carcinogen and is 

considered toxic by inhalation.73 Based 

on nasal tumors in rodents, the upper 

confidence limit estimate of a lifetime 

extra cancer risk from continuous 

acetaldehyde exposure is about 2.2 × 

10¥6 per μg/m3. In other words, it is 

estimated that about 2 persons in one 

million exposed to 1 μg/m3

acetaldehyde continuously for their 

lifetime (70 years) would develop 

cancer as a result of their exposure, 

although the risk could be as low as 

zero. In short-term (4 week) rat studies, 

compound-related histopathological 

changes were observed only in the 

respiratory system at various 

concentration levels of exposure.74 75


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8439 

75Appleman, L.M., R.A. Woutersen, and V.J. 

Feron. (1982). Inhalation toxicity of acetaldehyde in 

rats. I. Acute and subacute studies. Toxicology. 23: 

293–297. 

76U.S. EPA (1988). Integrated Risk Information 

System File of Acetaldehyde. This material is 

available electronically at http://www.epa.gov/iris/ 

subst/0290.htm. 

77Myou, S.; Fujimura, M.; Nishi K.; Ohka, T.; and 

Matsuda, T. (1993) Aerosolized acetaldehyde 

induces histamine-mediated bronchoconstriction in 

asthmatics. Am. Rev. Respir. Dis.148(4 Pt 1): 940–

3. 

78U.S. Environmental Protection Agency (2003) 

Integrated Risk Information System (IRIS) on 

Acrolein. National Center for Environmental 

Assessment, Office of Research and Development, 

Washington, D.C. 2003. This material is available 

electronically at http://www.epa.gov/iris/subst/ 

0364.htm. 

79Perera, F.P.; Rauh, V.; Tsai, W-Y.; et al. (2002) 

Effect of transplacental exposure to environmental 

pollutants on birth outcomes in a multiethnic 

population. Environ Health Perspect. 111: 201–205. 

80Perera, F.P.; Rauh, V.; Whyatt, R.M.; Tsai, W.Y.; 

Tang, D.; Diaz, D.; Hoepner, L.; Barr, D.; Tu, Y.H.; 

Camann, D.; Kinney, P. (2006) Effect of prenatal 

exposure to airborne polycyclic aromatic 

hydrocarbons on neurodevelopment in the first 3 

years of life among inner-city children. Environ 

Health Perspect 114: 1287–1292. 

81U.S. EPA (1998) Integrated Risk Information 

System (IRIS) summary on Naphthalene. National 

Center for Environmental Assessment, Office of 

Research and Development, Washington, D.C. 2003. 

This material is available electronically at http:// 

www.epa.gov/iris/subst/0436.htm. 

82Oak Ridge Institute for Science and Education. 

(2004) External Peer Review for the IRIS 

Reassessment of the Inhalation Carcinogenicity of 

Naphthalene. August 2004. http://cfpub2.epa.gov/ 

ncea/cfm/recordisplay.cfm?deid=86019. 

83California EPA. (2004) Long Term Health 

Effects of Exposure to Naphthalene. Office of 

Environmental Health Hazard Assessment. http:// 

www.oehha.ca.gov/air/toxic_contaminants/ 

draftnaphth.html. 

84 International Agency for Research on Cancer 

(IARC). (2002) Monographs on the Evaluation of the 

Carcinogenic Risk of Chemicals for Humans. Vol. 

82. Lyon, France. 

85EPA 2005 ‘‘Full IRIS Summary for Naphthalene 

(CASRN 91–20–3)’’ Environmental Protection 

Agency, Integrated Risk Information System (IRIS), 

Office of Health and Environmental Assessment, 

Environmental Criteria and Assessment Office, 

Cincinnati, OH http://www.epa.gov/iris/subst/ 

0436.htm. 

86U.S. EPA (2002) Health Assessment Document 

for Diesel Engine Exhaust. EPA/600/8–90/057F 

Office of Research and Development, Washington, 

DC. This document is available electronically at 

http://cfpub.epa.gov/ncea/cfm/ 

recordisplay.cfm?deid=29060. 

Data from these studies showing 

degeneration of the olfactory epithelium 

were found to be sufficient for EPA to 

develop an RfC for acetaldehyde of 9 μg/ 

m3. Confidence in the principal study is 

medium and confidence in the database 

is low, due to the lack of chronic data 

establishing a no observed adverse effect 

level and due to the lack of reproductive 

and developmental toxicity data. 

Therefore, there is low confidence in the 

RfC. The agency is currently conducting 

a reassessment of risk from inhalation 

exposure to acetaldehyde. 

The primary acute effect of exposure 

to acetaldehyde vapors is irritation of 

the eyes, skin, and respiratory tract.76

Some asthmatics have been shown to be 

a sensitive subpopulation to decrements 

in functional expiratory volume (FEV1 

test) and bronchoconstriction upon 

acetaldehyde inhalation.77

v. Acrolein 

Acrolein, a hydrocarbon, is intensely 

irritating to humans when inhaled, with 

acute exposure resulting in upper 

respiratory tract irritation and 

congestion. The Agency has developed 

an RfC for acrolein of 0.02 μg/m3.78 The 

overall confidence in the RfC 

assessment is judged to be medium. The 

Agency is also currently in the process 

of conducting an assessment of acute 

health effects for acrolein. EPA 

determined in 2003 using the 1999 draft 

cancer guidelines that the human 

carcinogenic potential of acrolein could 

not be determined because the available 

data were inadequate. No information 

was available on the carcinogenic effects 

of acrolein in humans and the animal 

data provided inadequate evidence of 

carcinogenicity. 

vi. Polycyclic Organic Matter (POM) 

POM is generally defined as a large 

class of organic compounds which have 

multiple benzene rings and a boiling 

point greater than 100 degrees Celsius. 

Many of the compounds included in the 

class of compounds known as POM are 

classified by EPA as probable human 

carcinogens based on animal data. One 

of these compounds, naphthalene, is 

discussed separately below. 

Polycyclic aromatic hydrocarbons 

(PAHs) are a chemical subset of POM. 

In particular, EPA frequently obtains 

data on 16 of these POM compounds. 

Recent studies have found that maternal 

exposures to PAHs in a population of 

pregnant women were associated with 

several adverse birth outcomes, 

including low birth weight and reduced 

length at birth, as well as impaired 

cognitive development at age three.79, 80

These studies are discussed in the 

Regulatory Impact Analysis. 

vii. Naphthalene 

Naphthalene is a PAH compound 

consisting of two benzene rings fused 

together with two adjacent carbon atoms 

common to both rings. In 2004, EPA 

released an external review draft of a 

reassessment of the inhalation 

carcinogenicity of naphthalene.81 The 

draft reassessment, External Review 

Draft, IRIS Reassessment of the 

Inhalation Carcinogenicity of 

Naphthalene, U.S. EPA, completed 

external peer review in 2004 by Oak 

Ridge Institute for Science and 

Education.82 Based on external 

comments, additional analyses are being 

considered. California EPA has released 

a new risk assessment for naphthalene 

with a cancer unit risk estimate of 

3×10 ¥5 per μg/m3.83 The California EPA 

value was used in the 1999 NATA and 

in the analyses done for this rule. In 

addition, IARC has reevaluated 

naphthalene and re-classified it as 

Group 2B: possibly carcinogenic to 

humans.84 Current risk estimates for 

naphthalene are based on extrapolations 

from rodent studies conducted at higher 

doses. At present, human data are 

inadequate for developing estimates. 

The current EPA IRIS assessment 

includes noncancer data on hyperplasia 

and metaplasia in nasal tissue that form 

the basis of an inhalation RfC of 3 μg/ 

m3.85 The principal study was given 

medium confidence because adequate 

numbers of animals were used, and the 

severity of nasal effects increased at the 

higher exposure concentration. 

However, the study produced high 

mortality and hematological evaluation 

was not conducted beyond 14 days. The 

database was given a low-to-medium 

confidence rating because there are no 

chronic or subchronic inhalation studies 

in other animal species, and there are no 

reproductive or developmental studies 

for inhalation exposure. In the absence 

of human or primate toxicity data, the 

assumption is made that nasal responses 

in mice to inhaled naphthalene are 

relevant to humans; however, it cannot 

be said with certainty that this RfC for 

naphthalene based on nasal effects will 

be protective for hemolytic anemia and 

cataracts, the more well-known human 

effects from naphthalene exposure. As a 

result, we have medium confidence in 

the RfC. 

viii. Diesel Exhaust 

In EPA’s Diesel Health Assessment 

Document (HAD),86 diesel exhaust was 

classified as likely to be carcinogenic to 

humans by inhalation at environmental 

exposures, in accordance with the 

revised draft 1996/1999 EPA cancer 

guidelines. A number of other agencies 

(National Institute for Occupational 

Safety and Health, the International 

Agency for Research on Cancer, the 

World Health Organization, California 

EPA, and the U.S. Department of Health 

and Human Services) have made similar 

classifications. EPA concluded in the 

Diesel HAD that it is not possible 

currently to calculate a cancer unit risk 

for diesel exhaust due to a variety of 

factors that limit the current studies, 


pwalker on PROD1PC71 with RULES_2
8440 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

87 Ishinishi, N; Kuwabara, N; Takaki, Y; et al. 

(1988) Long-term inhalation experiments on diesel 

exhaust. In: Diesel exhaust and health risks. Results 

of the HERP studies. Ibaraki, Japan: Research 

Committee for HERP Studies; pp. 11–84. 

88Heinrich, U; Fuhst, R; Rittinghausen, S; et al. 

(1995) Chronic inhalation exposure of Wistar rats 

and two different strains of mice to diesel engine 

exhaust, carbon black, and titanium dioxide. Inhal. 

Toxicol. 7:553–556. 

89Mauderly, JL; Jones, RK; Griffith, WC; et al. 

(1987) Diesel exhaust is a pulmonary carcinogen in 

rats exposed chronically by inhalation. Fundam. 

Appl. Toxicol. 9:208–221. 

90Nikula, KJ; Snipes, MB; Barr, EB; et al. (1995) 

Comparative pulmonary toxicities and 

carcinogenicities of chronically inhaled diesel 

exhaust and carbon black in F344 rats. Fundam. 

Appl. Toxicol. 25:80–94. 

91U.S. EPA (2004) Air Quality Criteria for 

Particulate Matter: Volume 1. Research Triangle 

Park, NC: National Center for Environmental 

Assessment—RTP Office; Report No. EPA/600/P–

99/002aF. Enter report number at the following 

search page, http://yosemite.epa.gov/ncepihom/ 

nsCatalog.nsf//SearchPubs?Openform. 

92U.S. EPA (2004) Air Quality Criteria for 

Particulate Matter: Volume 1. Research Triangle 

Park, NC: National Center for Environmental 

Assessment—RTP Office; Report No. EPA/600/P–

99/002aF, p. 8–318. Enter report number at the 

following search page, http://yosemite.epa.gov/ 

ncepihom/nsCatalog.nsf//SearchPubs?Openform. 

93Seagrave, J.; McDonald, J.D.; Gigliotti, A.P.; 

Nikula, K.J.; Seilkop, S.K.; Gurevich, M. and 

Mauderly, J.L. (2002) Mutagenicity and in Vivo 

Toxicity of Combined Particulate and Semivolatile 

Organic Fractions of Gasoline and Diesel Engine 

Emissions. Toxicological Sciences 70:212–226. 

94Fujita, E.; Watson, M.J.; Chow, M.C.; et al. 

(1998) Northern Front Range Air Quality Study, 

Volume C: Source apportionment and simulation 

methods and evaluation. Prepared for Colorado 

State University, Cooperative Institute for Research 

in the Atmosphere, by Desert Research Institute, 

Reno, NV. 

95Schauer, J.J.; Rogge, W.F.; Hildemann, L.M.; et 

al. (1996) Source apportionment of airborne 

particulate matter using organic compounds as 

tracers. Atmos. Environ. 30(22):3837–3855. 

such as limited quantitative exposure 

histories in occupational groups 

investigated for lung cancer. 

However, in the absence of a cancer 

unit risk, the EPA Diesel HAD sought to 

provide additional insight into the 

significance of the cancer hazard by 

estimating possible ranges of risk that 

might be present in the population. An 

exploratory analysis was used to 

characterize a possible risk range by 

comparing a typical environmental 

exposure level for highway diesel 

sources to a selected range of 

occupational exposure levels. The 

occupationally observed risks were then 

proportionally scaled according to the 

exposure ratios to obtain an estimate of 

the possible environmental risk. A 

number of calculations are needed to 

accomplish this, and these can be seen 

in the EPA Diesel HAD. The outcome 

was that environmental risks from 

diesel exhaust exposure could range 

from a low of 10¥4 to 10¥5 to as high 

as 10¥3, reflecting the range of 

occupational exposures that could be 

associated with the relative and absolute 

risk levels observed in the occupational 

studies. Because of uncertainties, the 

analysis acknowledged that the risks 

could be lower than 10¥4 or 10¥5, and 

a zero risk from diesel exhaust exposure 

was not ruled out. 

Noncancer health effects of acute and 

chronic exposure to diesel exhaust 

emissions are also of concern to the 

Agency. EPA derived an RfC from 

consideration of four well-conducted 

chronic rat inhalation studies showing 

adverse pulmonary effects.87 88 89 90 The 

RfC is 5 μg/m3 for diesel exhaust as 

measured by diesel PM. This RfC does 

not consider allergenic effects such as 

those associated with asthma or 

immunologic effects. There is growing 

evidence, discussed in the Diesel HAD, 

that diesel exhaust can exacerbate these 

effects, but the exposure-response data 

are presently lacking to derive an RfC. 

The EPA Diesel HAD states, ‘‘With DPM 

[diesel particulate matter] being a 

ubiquitous component of ambient PM, 

there is an uncertainty about the 

adequacy of the existing DE [diesel 

exhaust] noncancer database to identify 

all of the pertinent DE-caused 

noncancer health hazards’’ (p. 9–19). 

The Diesel HAD also briefly 

summarizes health effects associated 

with ambient PM and discusses the 

EPA’s annual National Ambient Air 

Quality Standard (NAAQS) of 15 μg/m3. 

There is a much more extensive body of 

human data showing a wide spectrum of 

adverse health effects associated with 

exposure to ambient PM, of which 

diesel exhaust is an important 

component. The PM2.5 NAAQS is 

designed to provide protection from the 

noncancer and premature mortality 

effects of PM2.5 as a whole, of which 

diesel PM is a constituent. 

c. Gasoline PM 

Beyond the specific areas of 

quantifiable risk discussed above in 

section III.C, EPA is also currently 

investigating gasoline PM. Gasoline 

exhaust is a complex mixture that has 

not been evaluated in EPA’s IRIS. 

Gasoline exhaust is a ubiquitous source 

of particulate matter, contributing to the 

health effects observed for ambient PM 

which is discussed extensively in the 

EPA Particulate Matter Criteria 

Document.91 The PM Criteria Document 

notes that the PM components of 

gasoline and diesel engine exhaust are 

hypothesized, important contributors to 

the observed increases in lung cancer 

incidence and mortality associated with 

ambient PM2.5.92 Gasoline PM is also a 

component of near-roadway emissions 

that may be contributing to the health 

effects observed in people who live near 

roadways (see section III.F). There is 

also emerging evidence for the 

mutagenicity and cytotoxicity of 

gasoline exhaust and gasoline PM. 

Seagrave et al. investigated the 

combined particulate and semivolatile 

organic fractions of gasoline engine 

emissions in various animal and 

bioassay tests.93 The authors suggest 

that emissions from gasoline engines are 

mutagenic and can induce inflammation 

and have cytotoxic effects. 

EPA is working to improve the 

understanding of PM emissions from 

gasoline engines, including the potential 

range of emissions and factors that 

influence emissions. EPA led a 

cooperative test program that recently 

completed testing approximately 500 

randomly procured vehicles in the 

Kansas City metropolitan area. The 

purpose of this study was to determine 

the distribution of gasoline PM 

emissions from the in-use light-duty 

fleet. Results from this study are 

expected to be available shortly. 

Preliminary results from this work show 

the influence of high emitters on overall 

gasoline PM emissions and, also, that 

gasoline PM emissions increase at lower 

ambient temperatures in the in-use fleet. 

Some source apportionment studies 

show gasoline and diesel PM can result 

in larger contributions to ambient PM 

than predicted by EPA emission 

inventories.94 95 These source 

apportionment studies were one 

impetus behind conducting the Kansas 

City study. 

Another issue related to gasoline PM 

is the effect of gasoline vehicles and 

engines on ambient PM, especially 

secondary PM. Ambient PM is 

composed of primary PM emitted 

directly into the atmosphere and 

secondary PM that is formed from 

chemical reactions in the atmosphere. 

The issue of secondary organic aerosol 

formation from aromatic precursors 

such as toluene is an important one to 

which EPA and others are paying 

significant attention. This is discussed 

in more detail in section 1.4.1 of the 

RIA. 

d. Near-Roadway Health Effects 

Another approach to investigating the 

collective health effects of mobile 

source contaminants is to examine 

associations between living near major 

roads and different adverse health 

endpoints. These studies generally 

examine people living near heavilytrafficked roadways, typically within 

several hundred meters, where fresh 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8441 

96U.S. EPA, Air Quality Criteria for Ozone and 

Related Photochemical Oxidants (Final). U.S. 

Environmental Protection Agency, Washington, DC, 

EPA/600/R–05/004aF-cF, 2006. This document is 

available in Docket EPA–HQ–OAR–2005–0036. 

97EPA’s review of the ozone NAAQS is underway 

and a proposal is scheduled for June 2007 with a 

final rule scheduled for March 2008. 

98U.S. EPA, Air Quality Criteria for Ozone and 

Related Photochemical Oxidants (Final). U.S. 

Environmental Protection Agency, Washington, DC, 

EPA/600/R–05/004aF-cF, 2006. This document is 

available in Docket EPA–HQ–OAR–2005–0036. 

99U.S. EPA (2007) Review of National Ambient 

Air Quality Standards for Ozone, Assessment of 

Scientific and Technical Information, OAQPS Staff 

Paper, EPA–452/R–07–003. This document is 

available in Docket EPA–HQ–OAR–2005–0036. 

emissions from motor vehicles are not 

yet fully diluted with background air. 

Several studies have measured 

elevated concentrations of pollutants 

emitted directly by motor vehicles near 

roadways as compared to overall urban 

background levels. These elevated 

concentrations generally occur within 

approximately 200 meters of the road, 

although the distance may vary 

depending on traffic and environmental 

conditions. Pollutants measured with 

elevated concentrations include 

benzene, polycyclic aromatic 

hydrocarbons, carbon monoxide, 

nitrogen dioxide, black carbon, and 

coarse, fine, and ultrafine particulate 

matter. In addition, concentrations of 

road dust, and wear particles from tire 

and brake use also show concentration 

increases in proximity of major 

roadways. 

The near-roadway health studies 

provide stronger evidence for some 

health endpoints than others. Evidence 

of adverse responses to traffic-related 

pollution is strongest for non-allergic 

respiratory symptoms, cardiovascular 

effects, premature adult mortality, and 

adverse birth outcomes, including low 

birth weight and size. Some evidence 

for new onset asthma is available, but 

not all studies have significant 

correlations. Lastly, among studies of 

childhood cancer, in particular 

childhood leukemia, evidence is 

inconsistent. Several small studies 

report positive associations, though 

such effects have not been observed in 

two larger studies. As described above, 

benzene and 1,3-butadiene are both 

known human leukemogens in adults. 

As previously mentioned, there is 

evidence of increased risk of leukemia 

among children whose parents have 

been occupationally exposed to 

benzene. Though the near-roadway 

studies are equivocal, taken together 

with the laboratory studies and other 

exposure environments, the data suggest 

a potentially serious children’s health 

concern could exist. Additional research 

is needed to determine the significance 

of this potential concern. 

Significant scientific uncertainties 

remain in our understanding of the 

relationship between adverse health 

effects and near-road exposure, 

including the exposures of greatest 

concern, the importance of chronic 

versus acute exposures, the role of fuel 

type (e.g. diesel or gasoline) and 

composition (e.g., % aromatics), 

relevant traffic patterns, the role of costressors including noise and 

socioeconomic status, and the role of 

differential susceptibility within the 

‘‘exposed’’ populations. For a more 

detailed discussion, see Chapter 3 of the 

Regulatory Impact Analysis. 

These studies provide qualitative 

evidence that reducing emissions from 

on-road mobile sources will provide 

public health benefits beyond those that 

can be quantified using currently 

available information. 

C. Ozone 

Many MSATs are part of a larger 

category of mobile source emissions 

known as volatile organic compounds 

(VOCs), which contribute to the 

formation of ozone. Mobile sources 

contribute significantly to national 

emissions of VOCs. In addition, PFCs 

are a source of VOCs. The vehicle and 

PFC standards in this final rule will 

help reduce emissions of VOCs. 

1. Background 

Ground-level ozone pollution is 

formed by the reaction of VOCs and 

nitrogen oxides (NOX) in the lower 

atmosphere in the presence of heat and 

sunlight. These pollutants, often 

referred to as ozone precursors, are 

emitted by many types of pollution 

sources, such as highway and nonroad 

motor vehicles and engines, power 

plants, chemical plants, refineries, 

makers of consumer and commercial 

products, industrial facilities, and 

smaller area sources. The PFC controls 

being finalized in this action will help 

reduce VOC emissions by reducing 

evaporation, permeation and spillage 

from PFCs. The vehicle controls being 

finalized will also reduce VOC 

emissions; however, because these 

reductions will occur at cold 

temperatures the ozone benefits will be 

limited. 

The science of ozone formation, 

transport, and accumulation is 

complex.96 Ground-level ozone is 

produced and destroyed in a cyclical set 

of chemical reactions, many of which 

are sensitive to temperature and 

sunlight. When ambient temperatures 

and sunlight levels remain high for 

several days and the air is relatively 

stagnant, ozone and its precursors can 

build up and result in more ozone than 

typically would occur on a single hightemperature day. Ozone also can be 

transported into an area from pollution 

sources found hundreds of miles 

upwind, resulting in elevated ozone 

levels even in areas with low VOC or 

NOX emissions. 

The current ozone National Ambient 

Air Quality Standards (NAAQS) 

established by EPA in 1997 has an 8- 

hour averaging time.97 The 8-hour 

ozone NAAQS is based on welldocumented science demonstrating that 

more people were experiencing adverse 

health effects at lower levels of exertion, 

over longer periods, and at lower ozone 

concentrations than addressed by the 

previous one-hour ozone NAAQS. The 

current ozone NAAQS addresses ozone 

exposures of concern for the general 

population and populations most at 

risk, including children active outdoors, 

outdoor workers, and individuals with 

pre-existing respiratory disease, such as 

asthma. The 8-hour ozone NAAQS is 

met at an ambient air quality monitoring 

site when the average of the annual 

fourth-highest daily maximum 8-hour 

average ozone concentration over three 

years is less than or equal to 0.084 ppm. 

2. Health Effects of Ozone 

The health and welfare effects of 

ozone are well documented and are 

assessed in the EPA’s 2006 ozone Air 

Quality Criteria Document (ozone 

AQCD) and EPA staff papers.98 99 Ozone 

can irritate the respiratory system, 

causing coughing, throat irritation, and/ 

or uncomfortable sensation in the chest. 

Ozone can reduce lung function and 

make it more difficult to breathe deeply, 

and breathing may become more rapid 

and shallow than normal, thereby 

limiting a person’s activity. Ozone can 

also aggravate asthma, leading to more 

asthma attacks that require a doctor’s 

attention and/or the use of additional 

medication. Animal toxicologic 

evidence indicates that with repeated 

exposure, ozone can inflame and 

damage the lining of the lungs, which 

may lead to permanent changes in lung 

tissue and irreversible reductions in 

lung function. People who are more 

susceptible to effects associated with 

exposure to ozone include children, the 

elderly, and individuals with 

respiratory disease such as asthma. 

There is also suggestive evidence that 

certain people may have greater genetic 

susceptibility. Those with greater 

exposures to ozone, for instance due to 

time spent outdoors (e.g., outdoor 

workers), are also of concern. 


pwalker on PROD1PC71 with RULES_2
8442 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

100A map of the 8-hour ozone nonattainment 

areas is included in the RIA for this rule. 

101Technical Support Document for the Final 

Clean Air Interstate Rule Air Quality Modeling. 

This document is available in Docket EPA–HQ–

OAR–2005–0036. 

102The Los Angeles South Coast Air Basin 8-hour 

ozone nonattainment area will have to attain before 

June 15, 2021. 

The recent ozone AQCD also 

examined relevant new scientific 

information which has emerged in the 

past decade, including the impact of 

ozone exposure on such health effects as 

changes in lung structure and 

biochemistry, inflammation of the 

lungs, exacerbation and causation of 

asthma, respiratory illness-related 

school absence, hospital admissions and 

premature mortality. Animal toxicologic 

studies have suggested potential 

interactions between ozone and PM 

with increased responses observed to 

mixtures of the two pollutants 

compared to either ozone or PM alone. 

The respiratory morbidity observed in 

animal studies along with the evidence 

from epidemiologic studies supports a 

causal relationship between acute 

ambient ozone exposures and increased 

respiratory-related emergency room 

visits and hospitalizations in the warm 

season. In addition, there is suggestive 

evidence of a contribution of ozone to 

cardiovascular-related morbidity and 

non-accidental and cardiopulmonary 

mortality. 

3. Plant and Ecosystem Effects of Ozone 

Ozone contributes to many 

environmental effects, with impacts to 

plants and ecosystems being of most 

concern. Ozone can produce both acute 

and chronic injury in sensitive species 

depending on the concentration level 

and the duration of the exposure. Ozone 

effects also tend to accumulate over the 

growing season of the plant, so that even 

lower concentrations experienced for a 

longer duration have the potential to 

create chronic stress on vegetation. 

Ozone damage to plants includes visible 

injury to leaves and a reduction in food 

production through impaired 

photosynthesis, both of which can lead 

to reduced crop yields, forestry 

production, and use of sensitive 

ornamentals in landscaping. In addition, 

the reduced food production in plants 

and subsequent reduced root growth 

and storage below ground, can result in 

other, more subtle plant and ecosystems 

impacts. These include increased 

susceptibility of plants to insect attack, 

disease, harsh weather, interspecies 

competition and overall decreased plant 

vigor. The adverse effects of ozone on 

forest and other natural vegetation can 

potentially lead to species shifts and 

loss from the affected ecosystems, 

resulting in a loss or reduction in 

associated ecosystem goods and 

services. Lastly, visible ozone injury to 

leaves can result in a loss of aesthetic 

value in areas of special scenic 

significance like national parks and 

wilderness areas. The final 2006 ozone 

AQCD presents more detailed 

information on ozone effects on 

vegetation and ecosystems. 

4. Current and Projected 8-hour Ozone 

Levels 

Currently, ozone concentrations 

exceeding the level of the 8-hour ozone 

NAAQS occur over wide geographic 

areas, including most of the nation’s 

major population centers.100 As of 

October 2006 approximately 157 million 

people live in the 116 areas that are 

currently designated as not in 

attainment with the 8-hour ozone 

NAAQS. There are 461 full or partial 

counties that make up the 116 8-hour 

ozone nonattainment areas. 

EPA has already adopted many 

emission control programs that are 

expected to reduce ambient ozone 

levels. These control programs include 

the Clean Air Interstate Rule (70 FR 

25162, May 12, 2005), as well as many 

mobile source rules (many of which are 

described in section V.D). As a result of 

these programs, the number of areas that 

fail to meet the 8-hour ozone NAAQS is 

expected to decrease. 

Based on the recent ozone modeling 

performed for the CAIR analysis,101

barring additional local ozone precursor 

controls, we estimate 37 Eastern 

counties (where 24 million people are 

projected to live) will exceed the 8-hour 

ozone NAAQS in 2010. An additional 

148 Eastern counties (where 61 million 

people are projected to live) are 

expected to be within 10 percent of 

violating the 8-hour ozone NAAQS in 

2010. 

States with 8-hour ozone 

nonattainment areas will be required to 

take action to bring these areas into 

compliance in the future. Based on the 

final rule designating and classifying 8- 

hour ozone nonattainment areas (69 FR 

23951, April 30, 2004), most 8-hour 

ozone nonattainment areas will be 

required to attain the 8-hour ozone 

NAAQS in the 2007 to 2013 time frame 

and then be required to maintain the 8- 

hour ozone NAAQS thereafter.102 The 

expected ozone inventory reductions 

from the standards being finalized in 

this action may be useful to states in 

attaining or maintaining the 8-hour 

ozone NAAQS. 

EPA’s review of the ozone NAAQS is 

currently underway and a proposed 

decision in this review is scheduled for 

June 2007 with a final rule scheduled 

for March 2008. If the ozone NAAQS is 

revised, then new nonattainment areas 

could be designated. While EPA is not 

relying on it for purposes of justifying 

this rule, the emission reductions from 

this rulemaking would also be helpful to 

states if there is an ozone NAAQS 

revision. 

D. Particulate Matter 

The cold temperature vehicle controls 

being finalized here will result in 

reductions of primary PM being emitted 

by vehicles. In addition, both the 

vehicle controls and the PFC controls 

will reduce VOCs that react in the 

atmosphere to form secondary PM2.5, 

namely organic carbonaceous PM2.5. 

1. Background 

Particulate matter (PM) represents a 

broad class of chemically and physically 

diverse substances. It can be principally 

characterized as discrete particles that 

exist in the condensed (liquid or solid) 

phase spanning several orders of 

magnitude in size. PM is further 

described by breaking it down into size 

fractions. PM10 refers to particles 

generally less than or equal to 10 

micrometers (μm) in diameter. PM2.5

refers to fine particles, those particles 

generally less than or equal to 2.5 μm in 

diameter. Inhalable (or ‘‘thoracic’’) 

coarse particles refer to those particles 

generally greater than 2.5 μm but less 

than or equal to 10 μm in diameter. 

Ultrafine PM refers to particles with 

diameters generally less than 100 

nanometers (0.1 μm). Larger particles 

(>10 μm) tend to be removed by the 

respiratory clearance mechanisms, 

whereas smaller particles are deposited 

deeper in the lungs. 

Fine particles are produced primarily 

by combustion processes and by 

transformations of gaseous emissions 

(e.g., SOx, NOX and VOCs) in the 

atmosphere. The chemical and physical 

properties of PM2.5 may vary greatly 

with time, region, meteorology and 

source category. Thus, PM2.5 may 

include a complex mixture of different 

pollutants including sulfates, nitrates, 

organic compounds, elemental carbon 

and metal compounds. These particles 

can remain in the atmosphere for days 

to weeks and travel through the 

atmosphere hundreds to thousands of 

kilometers. 

EPA has recently amended the PM 

NAAQS (71 FR 61144, October 17, 

2006). The final rule, signed on 

September 21, 2006 and published on 

October 17, 2006, addressed revisions to 

the primary and secondary NAAQS for 

PM to provide increased protection of 

public health and welfare, respectively. 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8443 

103U.S. EPA (2004) Air Quality Criteria for 

Particulate Matter (Oct 2004), Volume I Document 

No. EPA600/P–99/002aF and Volume II Document 

No. EPA600/P–99/002bF. This document is 

available in Docket EPA–HQ–OAR–2005–0036. 

104U.S. EPA (2005) Review of the National 

Ambient Air Quality Standard for Particulate 

Matter: Policy Assessment of Scientific and 

Technical Information, OAQPS Staff Paper. EPA–

452/R–05–005. This document is available in 

Docket EPA–HQ–OAR–2005–0036. 

105Laden, F.; Neas, L.M.; Dockery, D.W.; 

Schwartz, J. (2000) Association of Fine Particulate 

Matter from Different Sources with Daily Mortality 

in Six U.S. Cities. Environmental Health 

Perspectives 108: 941–947. 

106 Janssen, N.A.H.; Schwartz, J.; Zanobetti, A.; 

Suh, H.H. (2002) Air Conditioning and SourceSpecific Particles as Modifiers of the Effect of PM10

on Hospital Admissions for Heart and Lung Disease. 

Environmental Health Perspectives 110: 43–49. 

107Riediker, M.; Cascio, W.E.; Griggs, T.R.; 

Herbst, M.C.; Bromberg, P.A.; Neas, L.; Williams, 

R.W.; Devlin, R.B. (2003) Particulate Matter 

Exposures in Cars is Associated with 

Cardiovascular Effects in Healthy Young Men. Am. 

J. Respir. Crit. Care Med. 169: 934–940. 

108National Research Council, 1993. Protecting 

Visibility in National Parks and Wilderness Areas. 

National Academy of Sciences Committee on Haze 

in National Parks and Wilderness Areas. National 

Academy Press, Washington, DC. This document is 

available in Docket EPA–HQ–OAR–2005–0036. 

This book can be viewed on the National Academy 

Press Web site at http://www.nap.edu/books/ 

0309048443/html/. 

109See discussion in U.S. EPA, National Ambient 

Air Quality Standards for Particulate Matter; 

Proposed Rule; January 17, 2006, Vol 71, p. 2676. 

This information is available electronically at 

http://epa.gov/fedrgstr/EPA-AIR/2006/January/Day17/a177.pdf. 

110U.S. EPA (2004) Air Quality Criteria for 

Particulate Matter (Oct 2004), Volume I Document 

No. EPA600/P–99/002aF and Volume II Document 

No. EPA600/P–99/002bF. This document is 

available in Docket EPA–HQ–OAR–2005–0036. 

111U.S. EPA (2005) Review of the National 

Ambient Air Quality Standard for Particulate 

Matter: Policy Assessment of Scientific and 

Technical Information, OAQPS Staff Paper. EPA–

452/R–05–005. This document is available in 

Docket EPA–HQ–OAR–2005–0036. 

The primary PM2.5 NAAQS include a 

short-term (24-hour) and a long-term 

(annual) standard. The level of the 24- 

hour PM2.5 NAAQS has been revised 

from 65 μg/m3 to 35 μg/m3 to provide 

increased protection against health 

effects associated with short-term 

exposures to fine particles. The current 

form of the 24-hour PM2.5 standard was 

retained (e.g., based on the 98th 

percentile concentration averaged over 

three years). The level of the annual 

PM2.5 NAAQS was retained at 15 μg/m3

continuing protection against health 

effects associated with long-term 

exposures. The current form of the 

annual PM2.5 standard was retained as 

an annual arithmetic mean averaged 

over three years, however, the following 

two aspects of the spatial averaging 

criteria were narrowed: (1) The annual 

mean concentration at each site shall be 

within 10 percent of the spatially 

averaged annual mean, and (2) the daily 

values for each monitoring site pair 

shall yield a correlation coefficient of at 

least 0.9 for each calendar quarter. With 

regard to the primary PM10 standards, 

the 24-hour PM10 NAAQS was retained 

at a level of 150 μg/m3 not to be 

exceeded more than once per year on 

average over a three-year period. Given 

that the available evidence does not 

suggest an association between longterm exposure to coarse particles at 

current ambient levels and health 

effects, EPA has revoked the annual 

PM10 standard. 

With regard to the secondary PM 

standards, EPA has revised these 

standards to be identical in all respects 

to the revised primary standards. 

Specifically, EPA has revised the 

current 24-hour PM2.5 secondary 

standard by making it identical to the 

revised 24-hour PM2.5 primary standard, 

retained the annual PM2.5 and 24-hour 

PM10 secondary standards, and revoked 

the annual PM10 secondary standards. 

This suite of secondary PM standards is 

intended to provide protection against 

PM-related public welfare effects, 

including visibility impairment, effects 

on vegetation and ecosystems, and 

material damage and soiling. 

2. Health Effects of PM 

Scientific studies show ambient PM is 

associated with a series of adverse 

health effects. These health effects are 

discussed in detail in the 2004 

Particulate Matter Air Quality Criteria 

Document (PM AQCD) as well as the 

2005 PM Staff Paper.103, 104 Further 

discussion of health effects associated 

with PM can also be found in the RIA 

for this final rule. 

Health effects associated with shortterm exposures (e.g. hours to days) in 

ambient PM2.5 include premature 

mortality, increased hospital 

admissions, heart and lung diseases, 

increased cough, adverse lowerrespiratory symptoms, decrements in 

lung function and changes in heart rate 

rhythm and other cardiac effects. 

Studies examining populations exposed 

to different levels of air pollution over 

a number of years, including the 

Harvard Six Cities Study and the 

American Cancer Society Study, show 

associations between long-term 

exposure to ambient PM2.5 and both 

total and cardiorespiratory mortality. In 

addition, the reanalysis of the American 

Cancer Society cohort shows an 

association between fine particle and 

sulfate concentrations and lung cancer 

mortality. 

Recently, several studies have 

highlighted the adverse effects of PM 

specifically from mobile sources.105, 106

Studies have also focused on health 

effects due to PM exposures on or near 

roadways.107 Although these studies 

include all air pollution sources, 

including both spark-ignition (gasoline) 

and diesel powered vehicles, they 

indicate that exposure to PM emissions 

near roadways, thus dominated by 

mobile sources, are associated with 

health effects. Additional information 

on near-roadway health effects can be 

found in section III.B.2.d of this 

preamble. 

3. Welfare Effects of PM 

a. Visibility 

i. Background 

Visibility can be defined as the degree 

to which the atmosphere is transparent 

to visible light.108 Visibility impairment 

manifests in two principal ways: as 

local visibility impairment and as 

regional haze.109 Local visibility 

impairment may take the form of a 

localized plume, a band or layer of 

discoloration appearing well above the 

terrain as a result from complex local 

meteorological conditions. 

Alternatively, local visibility 

impairment may manifest as an urban 

haze, sometimes referred to as a ‘‘brown 

cloud.’’ This urban haze is largely 

caused by emissions from multiple 

sources in the urban areas and is not 

typically attributable to only one nearby 

source or to long-range transport. The 

second type of visibility impairment, 

regional haze, usually results from 

multiple pollution sources spread over 

a large geographic region. Regional haze 

can impair visibility over large regions 

and across states. 

Visibility is important because it has 

direct significance to people’s 

enjoyment of daily activities in all parts 

of the country. Individuals value good 

visibility for the well-being it provides 

them directly, where they live and 

work, and in places where they enjoy 

recreational opportunities. Visibility is 

also highly valued in significant natural 

areas such as national parks and 

wilderness areas, and special emphasis 

is given to protecting visibility in these 

areas. For more information on visibility 

see the 2004 PM AQCD as well as the 

2005 PM Staff Paper.110 111

Fine particles are the major cause of 

reduced visibility in parts of the United 


pwalker on PROD1PC71 with RULES_2
8444 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

112These areas are defined in section 162 of the 

Act as those national parks exceeding 6,000 acres, 

wilderness areas and memorial parks exceeding 

5,000 acres, and all international parks which were 

in existence on August 7, 1977. 

113U.S. EPA, Regulatory Impact Analysis for the 

Final Clean Air Interstate Rule. This document is 

available in Docket EPA–HQ–OAR–2005–0036. 

114U.S. EPA, Air Quality Designations and 

Classifications for the Fine Particles (PM2.5) 

National Ambient Air Quality Standards, December 

17, 2004. (70 FR 943, January 5, 2005) This 

document is also available on the web at: http:// 

www.epa.gov/pmdesignations/. 

115U.S. EPA, Regional Haze Regulations, July 1, 

1999. (64 FR 35714, July 1, 1999) 

116The deciview metric describes perceived 

visual changes in a linear fashion over its entire 

range, analogous to the decibel scale for sound. A 

deciview of 0 represents pristine conditions. The 

higher the deciview value, the worse the visibility, 

and an improvement in visibility is a decrease in 

deciview value. 

117 Deposition of Air Pollutants to the Great 

Waters—Third Report to Congress, Office of Air 

Quality Planning and Standards, June 2000, 

EPA453–R–00–005. This document is available in 

Docket EPA–HQ–OAR–2005–0036. 

118Simcik, M.F.; Eisenrich, S.J.; Golden, K.A.; 

Liu, S.; Lipiatou, E.; Swackhamer, D.L.; and Long, 

D.T. (1996) Atmospheric Loading of Polycyclic 

Aromatic Hydrocarbons to Lake Michigan as 

Recorded in the Sediments. Environ. Sci. Technol. 

30:3039–3046. 

119Simcik, M.F.; Eisenrich, S.J.; and Lioy, P.J. 

(1999) Source Apportionment and Source/Sink 

Relationships of PAHs in the Coastal Atmosphere 

of Chicago and Lake Michigan. Atmospheric 

Environment 33: 5071–5079. 

120 Dickhut, R.M.; Canuel, E.A.; Gustafson, K.E.; 

Liu, K.; Arzayus, K.M.; Walker, S.E.; Edgecombe, G.; 

Gaylor, M.O.; and McDonald, E.H. (2000) 

Automotive Sources of Carcinogenic Polycyclic 

Aromatic Hydrocarbons Associated with Particulate 

Matter in the Chesapeake Bay Region. Environ. Sci. 

Technol. 34: 4635–4640. 

121 Golomb, D.; Barry, E.; Fisher, G.; 

Varanusupakul, P.; Koleda, M.; and Rooney, T. 

(2001) Atmospheric Deposition of Polycyclic 

Aromatic Hydrocarbons near New England Coastal 

Waters. Atmospheric Environment 35: 6245–6258. 

122U.S EPA (2005) Review of the National 

Ambient Air Quality Standards for Particulate 

Matter: Policy Assessment of Scientific and 

Technical Information, OAQPS Staff Paper. This 

document is available in Docket EPA–HQ–OAR–

2005–0036. 

States. To address the welfare effects of 

PM on visibility, EPA set secondary 

PM2.5 standards which would act in 

conjunction with the establishment of a 

regional haze program. In setting this 

secondary standard, EPA concluded that 

PM2.5 causes adverse effects on visibility 

in various locations, depending on PM 

concentrations and factors such as 

chemical composition and average 

relative humidity. The secondary 

(welfare-based) PM2.5 NAAQS was 

established as equal to the suite of 

primary (health-based) NAAQS. 

Furthermore, section 169 of the Act 

provides additional authorities to 

remedy existing visibility impairment 

and prevent future visibility impairment 

in the 156 national parks, forests and 

wilderness areas categorized as 

mandatory class I federal areas (62 FR 

38680–81, July 18, 1997).112 In July 

1999 the regional haze rule (64 FR 

35714) was put in place to protect the 

visibility in mandatory class I federal 

areas. Visibility can be said to be 

impaired in both PM2.5 nonattainment 

areas and mandatory class I federal 

areas. 

ii. Current Visibility Impairment 

Recently designated PM2.5

nonattainment areas indicate that, as of 

October 2006, almost 90 million people 

live in nonattainment areas for the 1997 

PM2.5 NAAQS. Thus, at least these 

populations would likely be 

experiencing visibility impairment, as 

well as many thousands of individuals 

who travel to these areas. In addition, 

while visibility trends have improved in 

mandatory class I federal areas, the most 

recent data show that these areas 

continue to suffer from visibility 

impairment.113 In summary, visibility 

impairment is experienced throughout 

the U.S., in multi-state regions, urban 

areas, and remote mandatory class I 

federal areas.114 115 The mandatory class 

I federal areas are listed in Chapter 3 of 

the RIA for this action. The areas that 

have design values above the 1997 PM2.5

NAAQS are also listed in Chapter 3 of 

the RIA for this action. 

iii. Future Visibility Impairment 

Recent modeling for the Clean Air 

Interstate Rule (CAIR) was used to 

project visibility conditions in 

mandatory class I federal areas across 

the country in 2015. The results for the 

mandatory class I federal areas suggest 

that these areas are predicted to 

continue to have annual average 

deciview levels above background in the 

future.116 Modeling done for the PM 

NAAQS also projected PM2.5 levels in 

2015. These projections include all 

sources of PM2.5, including the engines 

covered in this rule, and suggest that 

PM2.5 levels above the NAAQS will 

persist into the future. 

The vehicles that will be subject to 

the standards contribute to visibility 

concerns in these areas through both 

their primary PM emissions and their 

VOC emissions, which contribute to the 

formation of secondary PM2.5. The PFCs 

that will be subject to the standards also 

contribute to visibility concerns through 

their VOC emissions. Reductions in 

these direct PM and VOC emissions will 

help to improve visibility across the 

nation, including mandatory class I 

federal areas. 

b. Atmospheric Deposition 

Wet and dry deposition of ambient 

particulate matter delivers a complex 

mixture of metals (e.g., mercury, zinc, 

lead, nickel, aluminum, cadmium), 

organic compounds (e.g., POM, dioxins, 

furans) and inorganic compounds (e.g., 

nitrate, sulfate) to terrestrial and aquatic 

ecosystems. EPA’s Great Waters 

Program has identified 15 pollutants 

whose deposition to water bodies has 

contributed to the overall contamination 

loadings to these Great Waters. These 15 

compounds include several heavy 

metals and a group known as polycyclic 

organic matter (POM). Within POM are 

the polycyclic aromatic hydrocarbons 

(PAHs). PAHs in the environment may 

be present in the gas or particle phase, 

although the bulk will be adsorbed onto 

airborne particulate matter. In most 

cases, human-made sources of PAHs 

account for the majority of PAHs 

released to the environment. The PAHs 

are usually the POMs of concern as 

many PAHs are probable human 

carcinogens.117 For some watersheds, 

atmospheric deposition represents a 

significant input to the total surface 

water PAH burden.118 119 Emissions 

from mobile sources have been found to 

account for a percentage of the 

atmospheric deposition of PAHs. For 

instance, recent studies have reported 

gasoline and diesel vehicles as major 

contributors in the atmospheric 

deposition of PAHs to Chesapeake Bay, 

Massachusetts Bay and Casco Bay.120 121

The vehicle controls being finalized 

may help to reduce deposition of heavy 

metals and POM. 

c. Materials Damage and Soiling 

The deposition of airborne particles 

can also reduce the aesthetic appeal of 

buildings and culturally important 

articles through soiling, and can 

contribute directly (or in conjunction 

with other pollutants) to structural 

damage by means of corrosion or 

erosion.122 Particles affect materials 

principally by promoting and 

accelerating the corrosion of metals, by 

degrading paints, and by deteriorating 

building materials such as concrete and 

limestone. Particles contribute to these 

effects because of their electrolytic, 

hygroscopic, and acidic properties, and 

their ability to sorb corrosive gases 

(principally sulfur dioxide). The rate of 

metal corrosion depends on a number of 

factors, including the deposition rate 

and nature of the pollutant; the 

influence of the metal protective 

corrosion film; the amount of moisture 

present; variability in the 

electrochemical reactions; the presence 

and concentration of other surface 

electrolytes; and the orientation of the 

metal surface. 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8445 

123The full details involved in calculating a PM2.5

design value are given in Appendix N of 40 CFR 

Part 50. 

124Note that this analysis identifies only counties 

projected to have a violating monitor; when 

designated in the future, some areas may include 

additional contributing counties. Thus, the total 

number of counties designated in the future and the 

associated population would likely exceed these 

estimates. 

125Regulatory Impact Analysis for the final PM 

NAAQS rule. This document is available in Docket 

EPA–HQ–OAR–2005–0036. 

4. Current and Projected PM2.5 Levels 

In 2005 EPA designated 39 

nonattainment areas for the 1997 PM2.5

NAAQS based on air quality design 

values (using 2001–2003 or 2002–2004 

measurements) and a number of other 

factors.123 (See 70 FR 943, January 5, 

2005; 70 FR 19844, April 14, 2005.) 

These areas are comprised of 208 full or 

partial counties with a total population 

exceeding 88 million. As mentioned in 

section III.D.1, the 1997 PM2.5 NAAQS 

was recently revised and the 2006 PM2.5

NAAQS became effective on December 

18, 2006. Table III.D–1 presents the 

number of counties in areas currently 

designated as nonattainment for the 

1997 PM2.5 NAAQS as well as the 

number of additional counties which 

have monitored data that is violating the 

2006 PM2.5 NAAQS. Nonattainment 

areas will be designated with respect to 

the new 2006 PM2.5 NAAQS in early 

2010. 

TABLE III.D–1.—PM2.5 STANDARDS: CURRENT NONATTAINMENT AREAS AND OTHER VIOLATING COUNTIES

Number of 

counties Population1

1997 PM2.5 Standards: 39 areas currently designated ............................................................................................. 208 88,394,000 

2006 PM2.5 Standards: Counties with violating monitors 2 ........................................................................................ 49 18,198,676 

Total .................................................................................................................................................................... 257 106,592,676 

1Population numbers are from 2000 census data. 

2This table provides an estimate of the counties violating the 2006 PM2.5 NAAQS based on 2003–05 air quality data. The areas designated as 

nonattainment for the 2006 PM2.5 NAAQS will be based on 3 years of air quality data from later years. Also, the county numbers in the summary 

table include only the counties with monitors violating the 2006 PM2.5 NAAQS. The monitored county violations may be an underestimate of the 

number of counties and populations that will eventually be included in areas with multiple counties designated nonattainment. 

Based on modeling performed for the 

PM NAAQS analysis, we estimate that 

52 counties (where 53 million people 

are projected to live) will exceed the 

2006 PM2.5 standard in 2015.124 125 In 

addition, 54 counties (where 27 million 

people are projected to live) are 

expected to be within 10 percent of 

violating the 2006 PM2.5 NAAQS in 

2015. 

Areas designated as not attaining the 

1997 PM2.5 NAAQS will need to attain 

these standards in the 2010 to 2015 time 

frame, and then be required to maintain 

the NAAQS thereafter. The attainment 

dates associated with the potential 

nonattainment areas based on the 2006 

PM2.5 NAAQS would likely be in the 

2015 to 2020 timeframe. The emissions 

standards being finalized in this action 

would become effective between 2009 

and 2015, making the expected PM and 

VOC inventory reductions useful to 

states in attaining or maintaining the 

PM2.5 NAAQS. 

5. Current PM10 Levels 

Air quality monitoring data indicates 

that as of October 2006 approximately 

28.5 million people live in 46 

designated PM10 nonattainment areas, 

which include all or part of 46 counties. 

The RIA for this rule lists the PM10

nonattainment areas and their 

populations, as of October 2006. The 

expected PM and VOC inventory 

reductions from the standards being 

finalized in this action could be useful 

to states in maintaining the PM10

NAAQS. 

IV. What Are the Emissions, Air 

Quality, and Public Health Impacts of 

This Rule? 

A. Emissions Impacts of All Rule 

Provisions Combined 

The emissions analysis presented in 

section IV.A of this preamble is 

described in more detail in Chapter 

2.2.2. of the RIA. The emissions analysis 

has been updated since the proposal, 

largely to include the effects of the 

recently proposed Renewable Fuels 

Standard, which was required by the 

Energy Policy Act. The emissions 

analysis examines the 0.62 vol% 

standard but does not include the 1.3% 

maximum average, because of the lead 

time necessary to conduct inventory 

modeling. Thus, the emission 

reductions from highway vehicles and 

other sources attributable to the fuel 

benzene standard are underestimated in 

many areas of the country, particularly 

in areas where fuel benzene levels were 

highest without control, such as the 

Northwest. This issue is discussed in 

more detail in the RIA. 

1. How Will MSAT Emissions Be 

Reduced? 

Figure IV.A–1 depicts the estimated 

reduction in total air toxic emissions 

emitted by mobile sources between 1990 

and 2030, with and without the 

standards being finalized in this rule. 

These estimates do not include diesel 

PM. Trends in diesel PM emissions are 

discussed in the regulatory impact 

analysis for this rule. Without standards 

being finalized in this rule, emissions of 

air toxics from mobile sources will be 

reduced by about 70% percent between 

1990 and 2030, from about 3.3 million 

tons to 1.3 million tons. This will occur 

despite a projected increase in vehicle 

miles traveled of over 100 percent, and 

a projected 150% increase in nonroad 

activity, based on units of work called 

horsepower hours. Without additional 

controls, air toxic emissions from 

mobile sources would begin to increase 

after 2015. Similar trends are observed 

for benzene (see Figure IV.A–2), with a 

reduction in emissions from about 

380,000 tons in 1990 to less than 

170,000 tons in 2030, but emissions 

from mobile sources begin to increase 

again after 2015. 


pwalker on PROD1PC71 with RULES_2
8446 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 


pwalker on PROD1PC71 with RULES_2ER26FE07.000</GPH>
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8447 

126Reduction in fuel benzene will reduce 

emissions through the whole distribution chain. 

Total emissions of MSATs from 

mobile and stationary sources in 2030 

will be 330,000 tons less than they 

would have been without this rule 

(Figure IV.A–3). Of these 330,000 tons 

of reductions, 310,000 will be from 

mobile sources, with the rest from 

portable fuel containers (PFCs) and 

gasoline distribution.126 Table IV.A–1 

summarizes MSAT reductions by source 

sector in 2015, 2020, and 2030. In 

addition, total benzene emissions from 

mobile and stationary sources will be 

61,000 tons less than they would have 

been without this rule (Figure IV.A–4). 

Table IV.A–2 depicts reductions in 

benzene by source sector from this rule. 

In 2030, annual benzene emissions 

from gasoline on-road mobile sources 

will be 45% lower as a result of this rule 

(Figure IV.A–5), and over 60% lower 

than they were in 1999. In addition, 

benzene emissions from gasoline 

nonroad equipment will be 14% lower 

in 2030, and over 45% lower than they 

were in 1999. Benzene emissions from 

PFCs will be reduced by almost 80% in 

2030 (Figure IV.A–6), and benzene 

emissions from gasoline distribution by 

over 30% in 2030. For total MSAT 

emissions from on-road mobile sources, 

there will be a 38% reduction in MSAT 

emissions in 2030 (Figure IV.A–7), and 

a 65% reduction from 1999 levels. 

Table IV.A–3 provides estimated 

reductions in emissions from individual 

MSATs in 2015, 2020 and 2030, from 

gasoline vehicles, gasoline nonroad 

engines, and PFCs as a result of the 

controls being finalized in this rule. 


pwalker on PROD1PC71 with RULES_2ER26FE07.001</GPH>
8448 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 


pwalker on PROD1PC71 with RULES_2ER26FE07.002</GPH>
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8449 

TABLE IV.A–1.—ESTIMATED REDUCTIONS IN MSAT EMISSIONS FROM ALL CONTROL MEASURES BY SECTOR, 2015 TO

2030 

MSAT 1999 

2015 2020 2030 

Without 

rule 

(tons) 

With 

rule 

(tons) 

Reduction 

(tons) 

Without 

rule 

(tons) 

With rule 

(tons) 

Reduction 

(tons) 

Without 

rule 

(tons) 

With rule 

(tons) 

Reduction 

(tons) 

Gasoline Onroad Mobile 

Sources ........................ 1,452,739 675,781 558,666 117,115 693,189 507,782 185,408 808,141 505,074 303,067 

Gasoline Nonroad Mobile 

Sources ........................ 806,725 449,422 443,973 5,449 406,196 400,816 5,380 412,617 406,856 5,761 

PFCs ............................... 37,166 27,355 9,893 17,462 29,338 10,672 18,666 33,430 12,264 21,166 

Gasoline Distribution ....... 57,765 62,870 62,059 811 64,942 64,092 850 64,942 64,092 850 

Total ......................... 2,354,395 1,215,428 1,074,591 140,837 1,193,665 983,362 210,303 1,319,130 988,286 330,844 

TABLE IV.A–2.—ESTIMATED REDUCTIONS IN BENZENE EMISSIONS FROM ALL CONTROL MEASURES BY SECTOR, 2015 TO

2030 

Benzene 1999 

2015 2020 2030 

Without 

rule 

(tons) 

With 

rule 

(tons) 

Reduction 

(tons) 

Without 

rule 

(tons) 

With rule 

(tons) 

Reduction 

(tons) 

Without 

rule 

(tons) 

With rule 

(tons) 

Reduction 

(tons) 

Gasoline Onroad Mobile 

Sources ........................ 183,660 97,789 71,688 26,101 101,514 65,878 35,636 119,016 65,601 53,415 

Gasoline Nonroad Mobile 

Sources ........................ 68,589 41,343 35,825 5,518 40,161 34,717 5,444 42,994 37,167 5,827 

PFCs ............................... 853 992 215 777 1,063 232 831 1,210 267 944 

Gasoline Distribution ....... 1,984 2,445 1,635 810 2,621 1,772 849 2,621 1,772 849 

Total ......................... 255,086 142,569 109,363 33,206 145,359 102,599 42,760 165,841 104,807 61,035 


pwalker on PROD1PC71 with RULES_2ER26FE07.003</GPH>
8450 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 


pwalker on PROD1PC71 with RULES_2ER26FE07.004</GPH>
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8451 


pwalker on PROD1PC71 with RULES_2ER26FE07.005</GPH>
8452 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

127Napthalene reductions from controls in this 

rule are not quantified, due to limitations in 

modeling tools. 

TABLE IV.A–3.—ESTIMATED REDUCTIONS IN EMISSIONS FROM INDIVIDUAL MSATS IN 2015, 2020 AND 2030, FROM GASOLINE VEHICLES, GASOLINE NONROAD ENGINES, AND PORTABLE FUEL CONTAINERS, RESULTING FROM THE CUMULATIVE IMPACTS OF THE CONTROLS IN THIS RULE 127

MSAT 1999 

(tons) 

2015 2020 2030 

Without 

rule (tons) 

With rule 

(tons) 

Reductions (tons) Without 

rule (tons) 

With rule 

(tons) 

Reductions (tons) Without 

rule (tons) 

With rule 

(tons) 

Reductions (tons) 

1,3-Butadiene .................. 31,234 14,771 13,259 1,512 15,037 12,535 2,501 17,054 12,834 4,220 

2,2,4-Trimethylpentane ... 296,310 166,270 149,178 17,091 159,892 133,578 26,314 174,824 132,763 42,061 

Acetaldehyde ................... 27,800 21,223 18,154 3,069 22,156 17,011 5,145 25,754 17,213 8,541 

Acrolein ........................... 3,835 1,650 1,457 193 1,665 1,347 317 1,889 1,360 529 

Benzene .......................... 250,227 140,124 107,728 32,396 142,737 100,827 41,911 163,221 103,035 60,186 

Ethyl Benzene ................. 120,150 61,300 54,805 6,495 59,963 49,968 9,995 66,823 50,830 15,992 

Formaldehyde ................. 74,053 32,341 28,096 4,245 33,350 26,371 6,979 38,472 26,946 11,526 

Hexane ............................ 106,464 57,852 52,042 5,810 54,673 46,926 7,747 59,152 48,029 11,124 

MTBE .............................. 143,350 0 0 0 0 0 0 0 0 0 

Propionaldehyde ............. 4,142 2,195 1,965 231 2,249 1,869 380 2,565 1,932 633 

Styrene ............................ 16,352 8,212 6,985 1,227 8,423 6,405 2,018 9,731 6,365 3,366 

Toluene ........................... 729,908 390,688 347,363 43,325 380,420 312,542 67,878 420,534 310,654 109,880 

Xylenes ............................ 487,768 252,993 228,561 24,432 245,180 206,913 38,267 270,775 208,839 61,936 

Total MSATs ............ 2,291,593 1,149,618 1,009,592 140,026 1,125,744 916,291 209,453 1,250,794 920,800 329,994 

2. How Will VOC Emissions Be 

Reduced? 

VOC emissions will be reduced by the 

hydrocarbon emission standards for 

both light-duty vehicles and PFCs. As 

seen in the table and accompanying 

figure below Table IV.A–4 and Figure 

IV.A–8, annual VOC emission 

reductions from both of these sources 

will be 34% lower in 2030 because of 

this rule, and 59% lower than in 1999. 


pwalker on PROD1PC71 with RULES_2ER26FE07.006</GPH>
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8453 

128U.S. EPA. 2005. Cold-temperature exhaust 

particulate matter emissions. Memorandum from 

Chad Bailey to docket EPA–HQ–OAR–2005–0036. 

TABLE IV.A–4. ESTIMATED REDUCTIONS IN VOC EMISSIONS FROM LIGHT-DUTY GASOLINE VEHICLES AND PFCS, 1999 TO

2030 

1999 2015 2020 2030 

VOC Without Rule (tons) ................................................................................................. 5,224,921 2,944,491 2,892,134 3,281,752 

VOC With Vehicle and PFC Standards (tons) ................................................................ .................... 2,420,860 2,146,476 2,153,735 

VOC Reduction (tons) ..................................................................................................... .................... 523,631 745,658 1,128,017 

3. How Will PM Emissions Be Reduced? 

EPA expects that the cold-temperature 

vehicle standards will reduce exhaust 

emissions of direct PM2.5 by over 19,000 

tons in 2030 nationwide (see Table 

IV.A–5 below). Our analysis of the data 

from vehicles meeting Tier 2 emission 

standards indicate that PM emissions 

follow a monotonic relationship with 

temperature, with lower temperatures 

corresponding to higher vehicle 

emissions. Additionally, the analysis 

shows the ratio of PM to total nonmethane hydrocarbons (NMHC) to be 

independent of temperature.128 Our 

testing indicates that strategies which 

reduce NMHC start emissions at cold 

temperatures also reduce direct PM 

emissions. Based on these findings, 

direct PM emissions at cold 

temperatures were estimated using a 

constant PM to NMHC ratio. PM 

emission reductions were estimated by 

assuming that NMHC reductions will 

result in proportional reductions in PM. 

This assumption is supported by test 

data. For more detail, see Chapter 2.1 of 

the RIA. 

TABLE IV.A–5. ESTIMATED NATIONAL REDUCTIONS IN DIRECT PM2.5 EXHAUST EMISSIONS FROM LIGHT-DUTY GASOLINE

VEHICLES AND TRUCKS, 2015 TO 2030 

2015 2020 2030 

PM2.5 Reductions from Vehicle Standards (tons) ................................................................................................ 7,068 11,646 19,421 


pwalker on PROD1PC71 with RULES_2ER26FE07.007</GPH>
8454 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

B. Emission Impacts by Provision 

1. Vehicle Controls 

We are finalizing a hydrocarbon 

standard for gasoline passenger vehicles 

at cold temperatures. This standard will 

reduce VOC at temperatures below 75 

°F, including air toxics such as benzene, 

1,3-butadiene, formaldehyde, 

acetaldehyde, and acrolein, and will 

also reduce emissions of direct and 

secondary PM. We are also finalizing 

new evaporative emissions standards for 

Tier 2 vehicles starting in 2009. These 

new evaporative standards reflect the 

emissions levels already being achieved 

by manufacturers. 

a. Volatile Organic Compounds (VOC) 

Table IV.B–1 shows the VOC exhaust 

emission reductions from light-duty 

gasoline vehicles and trucks that will 

result from the cold temperature 

hydrocarbon standard alone. The 

standards will reduce VOC emissions 

from these vehicles in 2030 by 31%. 

Overall VOC emissions from these 

vehicles will be reduced by 82% 

between 1999 and 2030 (including the 

effects of these standards as well as 

other standards in place, such as Tier 2). 

TABLE IV.B.–1. ESTIMATED NATIONAL REDUCTIONS IN EXHAUST VOC EMISSIONS FROM LIGHT-DUTY GASOLINE VEHICLES

AND TRUCKS, 1999 TO 2030. 

1999 2010 2015 2020 2030 

VOC Without Rule (tons) ............................................................... 4,899,891 2,990,760 2,614,987 2,538,664 2,878,836 

VOC With Proposed Vehicle Standards (tons) ............................. ...................... 2,839,012 2,293,703 2,009,301 1,996,074 

VOC Reductions from Vehicle Standards (tons) ........................... ...................... 151,748 321,284 529,363 882,762 

Percentage Reduction ................................................................... ...................... 5 12 21 31 

b. Toxics 

In 2030, we estimate that the vehicle 

standards will result in a 38% reduction 

in total emissions of the MSATs and a 

39% reduction in benzene emissions 

from light-duty vehicles and trucks (see 

Tables IV.B–1 and IV.B–2). Between 

1999 and 2030, total MSATs from lightduty gasoline vehicles and trucks will 

be reduced by 64%, and benzene by 

59%. 

TABLE IV.B.–1. ESTIMATED NATIONAL REDUCTIONS IN EXHAUST MSAT EMISSIONS FROM LIGHT-DUTY GASOLINE

VEHICLES AND TRUCKS, 1999 TO 2030 

1999 2010 2015 2020 2030 

MSATs Without Rule (tons) ........................................................... 1,376,002 695,408 650,012 669,707 783,648 

MSATs With Vehicle Standards (tons) .......................................... ...................... 644,312 542,281 492,700 488,824 

MSAT Reductions from Vehicle Standards (tons) ......................... ...................... 51,987 107,731 177,007 294,824 

Percentage Reduction ................................................................... ...................... 7 17 26 38 

TABLE IV.B–2.—ESTIMATED NATIONAL REDUCTIONS IN BENZENE EXHAUST EMISSIONS FROM LIGHT-DUTY GASOLINE

VEHICLES AND TRUCKS, 1999 TO 2030. 

1999 2010 2015 2020 2030 

Benzene Without Rule (tons) ............................................................................. 173,474 99,559 95,234 99,225 116,742 

Benzene With Vehicle Standards (tons) ............................................................ .................. 91,621 78,664 72,128 71,704 

Benzene Reductions from Vehicle Standards (tons) ........................................ .................. 7,939 16,570 27,097 45,037 

Percentage Reduction ....................................................................................... .................. 8 17 27 39 

c. PM2.5

As discussed in Section IV.A.3, EPA 

expects that the cold-temperature 

vehicle standards will reduce exhaust 

emissions of direct PM2.5 by over 19,000 

tons in 2030 nationwide (see Table 

IV.A–5). 

2. Fuel Benzene Standard 

The fuel benzene standard will reduce 

benzene exhaust and evaporative 

emissions from both on-road and 

nonroad mobile sources that are fueled 

by gasoline. In addition, the fuel 

benzene standard will reduce 

evaporative emissions from gasoline 

distribution and PFCs. Impacts on 1,3- 

butadiene, formaldehyde, and 

acetaldehyde emissions are not 

significant, but are presented in Chapter 

2 of the RIA. We do not expect the fuel 

benzene standard to have quantifiable 

impacts on any other air toxics, total 

VOCs, or direct PM. 

Table IV.B–3 shows national 

estimates of total benzene emissions 

from these source sectors with and 

without the fuel benzene standard in 

2015. These estimates do not include 

effects of the vehicle or PFC standards 

(see section IV.A.1 for the combined 

effects of the controls). They also 

assume that the fuel program is fully 

phased in, which is a simplification of 

the actual phase-in. The fuel benzene 

standard will reduce total benzene 

emissions from on-road and nonroad 

gasoline mobile sources, PFCs, and 

gasoline distribution by 12% in 2015. 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8455 

TABLE IV.B–3.—ESTIMATED REDUCTIONS IN BENZENE EMISSIONS FROM GASOLINE STANDARD BY SECTOR IN 2015 

Gasoline 

on-road 

mobile 

sources 

Gasoline 

nonroad 

mobile 

sources 

PFCs Gasoline distribution Total 

Benzene Without Rule (tons) ........................................................................... 97,789 41,343 992 2,445 142,569 

Benzene With Gasoline Standard (tons) ......................................................... 86,875 35,825 619 1,635 124,954 

Benzene Reductions from Gasoline Standard (tons) ...................................... 10,914 5,518 373 810 17,615 

Percentage Reduction ..................................................................................... 11 13 38 33 12 

3. PFC Standards 

a. VOC 

Table IV.B–4 shows the reductions in 

VOC emissions that we expect from the 

PFC standard. In 2015, VOC emissions 

From PFCs will be reduced by 61% 

because of reduced permeation, spillage, 

and evaporative losses. 

TABLE IV.B–4.—ESTIMATED NATIONAL REDUCTIONS IN VOC EMISSIONS FROM PFCS, 1999 TO 2030 

1999 2010 2015 2020 2030 

VOC Without Rule (tons) ................................................................................... 325,030 316,756 329,504 353,470 402,916 

VOC With PFC Standard (tons) ........................................................................ .................. 256,175 127,157 137,175 216,294 

VOC Reductions from PFC Standard (tons) ..................................................... .................. 60,580 202,347 216,294 245,255 

Percentage Reduction ....................................................................................... .................. 19 61 61 61 

b. Toxics 

The PFC standard will reduce 

emissions of benzene, toluene, xylenes, 

ethylbenzene, n-hexane, 2,2,4- 

trimethylpentane, and MTBE. We 

estimate that benzene emissions from 

PFCs will be reduced by 68% (see Table 

IV.B–5) and, more broadly, air toxic 

emissions by 63% (see Table IV.B–6) in 

year 2015. These reductions do not 

include effects of the fuel benzene 

standard (see section IV.A–1 for the 

combined effects of the controls). 

Chapter 2 of the RIA provides details on 

the emission reductions of the other 

toxics. 

TABLE IV.B–5.—ESTIMATED NATIONAL REDUCTIONS IN BENZENE EMISSIONS FROM PFCS, 1999 TO 2030 

1999 2010 2015 2020 2030 

Benzene Without Rule (tons) ........................................................................................................... 853 943 992 1063 1210 

Benzene With PFC Standard (tons) ................................................................................................ ............ 743 320 345 396 

Benzene Reductions from PFC Standard (tons) ............................................................................. ............ 200 672 718 814 

Percentage Reduction ..................................................................................................................... ............ 21 68 68 67 

TABLE IV.B–6.—ESTIMATED NATIONAL REDUCTIONS IN TOTAL MSAT EMISSIONS FROM PFCS, 1999 TO 2030 

1999 2010 2015 2020 2030 

MSATs Without Rule (tons) ............................................................................................................. 37,167 26,189 27,355 29,338 33,430 

MSATs With PFC Standard (tons) .................................................................................................. ............ 21,010 9,998 10,785 12,394 

MSAT Reductions from PFC Standard (tons) ................................................................................. ............ 5,179 17,357 18,553 21,036 

Percentage Reduction ..................................................................................................................... ............ 20 63 63 63 

C. What Are the Air Quality, Exposure, 

and Public Health Impacts of This Rule? 

1. Mobile Source Air Toxics 

The controls being finalized in this 

rule will reduce both evaporative and 

exhaust emissions from motor vehicles 

and nonroad equipment. They will also 

reduce emissions from PFCs and 

stationary source emissions associated 

with gasoline distribution. Therefore, 

they will reduce exposure to mobile 

source air toxics for the general 

population, and also for people near 

roadways, in vehicles, in homes with 

attached garages, operating nonroad 

equipment, and living or working near 

sources of gasoline distribution 

emissions (such as bulk terminals, bulk 

plants, tankers, marine vessels, and 

service stations). Section III.B of this 

preamble and Chapter 3 of the RIA 

provide more details on these types of 

exposures. 

We performed national-scale air 

quality, exposure, and risk modeling in 

order to quantitatively assess the 

impacts of the standards being finalized. 

The exposure modeling for the final rule 

accounted for the spatial variability of 

outdoor concentrations of air toxics due 

to higher concentrations near roadways. 

This is a significant improvement over 

exposure modeling done for the 

proposal, and is discussed in more 

detail in Chapter 3 of the RIA. However, 

in addition to the limitations of the 

national-scale modeling tools (discussed 

in Chapter 3 of the RIA), this modeling 

did not account for the impacts of the 

recently proposed renewable fuel 

standard, as this standard was proposed 

subsequent to the development of 

inventories for air quality modeling. In 

addition, while the model includes the 


pwalker on PROD1PC71 with RULES_2
8456 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

129 ‘‘Background represents the contribution to 

ambient levels of air toxics from sources further 

away than 50 kilometers, as well as the contribution 

from uninventoried sources. 

0.62 vol% fuel benzene standard, it does 

not include the 1.3% maximum average. 

The standards being finalized in this 

rule will reduce both the number of 

people above the 1 in 100,000 cancer 

risk level, and the average population 

cancer risk, by reducing exposures to 

mobile source air toxics. The number of 

people above the 1 in 100,000 cancer 

risk level due to exposure to all mobile 

source air toxics from all sources will 

decrease by over 11 million in 2020 and 

by almost 17 million in 2030. The 

number of people above the 1 in 

100,000 cancer risk level from exposure 

to benzene from all sources will 

decrease by about 30 million in 2020 

and 46 million in 2030. It should be 

noted that if it were possible to estimate 

impacts of the standard on 

‘‘background’’ concentrations 129, the 

estimated overall risk reductions would 

be even larger. The standards will also 

reduce the number of people with a 

respiratory hazard index (HI) greater 

than one by about 10 million in 2020, 

and 17 million in 2030. As previously 

discussed, a value of the HI greater than 

1.0 can be best described as indicating 

that a potential may exist for adverse 

health effects. 

Figure IV.C–1 depicts the impact on 

the mobile source contribution to 

nationwide average population cancer 

risk from total MSATs and benzene in 

2030. Nationwide, the cancer risk 

attributable to total MSATs will be 

reduced by 30%, and the risk from 

mobile source benzene will be reduced 

by 37%. In 2030, the highway vehicle 

contribution to MSAT cancer risk will 

be reduced on average 36% across the 

U.S., and the highway vehicle 

contribution to benzene cancer risk will 

be reduced on average by 43% across 

the U.S. The methods and assumptions 

used to model the impact of the controls 

are described in more detail in Chapter 

3 of the RIA. 

Figure IV.C–2 depicts the impact on 

the mobile source contribution to 

nationwide average respiratory hazard 

index (HI) in 2030. Nationwide, the 

mobile source contribution to the 

respiratory hazard index will be 

reduced by 23%. 


pwalker on PROD1PC71 with RULES_2ER26FE07.008</GPH>
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8457 

Table IV.C–1 summarizes the change 

in median and 95th percentile 

inhalation cancer risks from benzene 

and all MSATs attributable to all 

outdoor sources in 2015, 2020, and 

2030, with the controls being finalized 

in this rule. The reductions in risk 

would be larger if the modeling fully 

accounted for a number of factors, 

including exposure to benzene 

emissions from vehicles, equipment, 

and PFCs in attached garages and the 

impacts of the control program on 

‘‘background’’ levels attributable to 

transport. Reductions are significantly 

larger for individuals in the 95th 

percentile than in the 50th percentile. 

Thus, this rule is providing bigger 

benefits to individuals experiencing the 

highest levels of risk. 

TABLE IV.C—1. CHANGE IN MEDIAN AND 95TH PERCENTILE INHALATION CANCER RISK FROM BENZENE AND ALL MSATS

ATTRIBUTABLE TO OUTDOOR SOURCES IN 2015, 2020, AND 2030 WITH THE CONTROLS BEING FINALIZED IN THIS RULE

2015 2020 2030 

Median 95th Median 95th Median 95th 

All MSATs: 

Without Controls ................... 1.50×10¥5 4.75×10¥5 1.53×10¥5 4.93×10¥5 1.61×10¥5 5.28×10¥5

With Controls ........................ 1.41×10¥5 4.37×10¥5 1.40×10¥5 4.40×10¥5 1.42×10¥5 4.49×10¥5

Percent Change .................... 6 8 8 11 12 15 

Benzene: 

Without Controls ................... 6.86×10¥6 1.82×10¥5 6.93×10¥6 1.86×10¥5 7.37×10¥6 2.06×10¥5

With Controls ........................ 6.17×10¥6 1.53×10¥5 6.02×10¥6 1.47×10¥5 6.06×10¥6 1.49×10¥5

Percent Change .................... 10 16 13 21 18 28 

2. Ozone 

The vehicle and PFC standards will 

also reduce VOC emissions, which are 

a precursor to ozone. We have modeled 

the ozone impacts of the PFC standards. 

As described in more detail in Chapter 

3.3 of the RIA, a metamodeling tool 

developed at EPA, the ozone response 

surface metamodel, was used to 

estimate the effects of the emission 

reductions. The ozone response surface 

metamodel was created using multiple 

runs of the Comprehensive Air Quality 

Model with Extensions (CAMx). Base 

and control CAMx metamodeling was 

completed for two future years (2020, 

2030) over a modeling domain that 

includes all or part of 37 Eastern U.S. 

states. For more information on the 

response surface metamodel, please see 

the RIA for this final rule or the Air 

Quality Modeling Technical Support 

Document (TSD). 

We have made estimates using the 

ozone response surface metamodel to 

illustrate the types of change in future 

ozone levels that we would expect to 

result from this rule, as described in 

Chapter 3 of the RIA. The PFC controls 

are projected to result in a very small 


pwalker on PROD1PC71 with RULES_2ER26FE07.009</GPH>
8458 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

130 65 FR 6822 (February 10, 2000). 

131 66 FR 5002, January 18, 2001. See http:// 

www.epa.gov/otaq/highway-diesel/index.htm. 

132 69 FR 38958, June 29, 2004. 

133 65 FR 6697, February 10, 2000. 

134 66 FR 5001, January 18, 2001. 

net improvement in future ozone, after 

weighting for population. Although the 

net future ozone improvement is small, 

some VOC-limited areas in the Eastern 

U.S. are projected to have non-negligible 

improvements in projected 8-hour 

ozone design values due to the PFC 

controls. We view these improvements 

as useful in meeting the 8-hour ozone 

NAAQS. These net ozone improvements 

are in addition to reductions in levels of 

benzene, a toxic ozone precursor, due to 

the PFC controls. 

3. PM 

As described in section IV.A, the 

vehicle standards will reduce emissions 

of direct PM. The PM health benefits 

that would be associated with these 

reductions in PM emissions and 

exposure are discussed in section VIII.E 

of this preamble. The vehicle and PFC 

standards will also reduce VOC 

emissions, which contribute to the 

secondary formation of PM. In this rule 

we have not quantified the impact of the 

VOC emission reductions on ambient 

PM or associated health effects. 

D. What Other Mobile Source Emissions 

Control Programs Reduce MSATs? 

As described in section IV.A, existing 

mobile source control programs in 

combination with this rule will reduce 

MSAT emissions (not including diesel 

PM) by 45% between 1999 and 2030. 

The existing mobile source programs 

include controls on fuels, highway 

vehicles, and nonroad engines and 

equipment. These programs are also 

reducing hydrocarbons and PM more 

generally, as well as oxides of nitrogen. 

The sections immediately below 

provide general descriptions of these 

programs that will be providing MSAT 

emission reductions, as well as 

voluntary programs such as the National 

Clean Diesel Campaign and Best 

Workplaces for Commuters. We also 

discuss some programs that are 

currently being developed. A more 

detailed description of mobile source 

programs is provided in Chapter 2 of the 

RIA. 

1. Fuels Programs 

As described in section VI of this 

preamble, this rule would supersede the 

2001 MSAT rule and certain provisions 

of the reformulated gasoline program 

and anti-dumping programs. These 

programs are described in Chapter 2 of 

the RIA. 

a. Gasoline Sulfur 

EPA’s gasoline sulfur program 130

requires, beginning in 2006, that sulfur 

levels in gasoline could be no higher 

than 80 ppm as a per-gallon cap, and 

must average 30 ppm annually. When 

fully effective, gasoline will have 90 

percent less sulfur than before the 

program. Reduced sulfur levels are 

necessary to ensure that vehicle 

emission control systems are not 

impaired. These systems effectively 

reduce non-methane organic gas 

(NMOG) emissions, of which some are 

air toxics, as well as emissions of NOX. 

With lower sulfur levels, emission 

control technologies can work longer 

and more efficiently. Both new and 

older vehicles benefit from reduced 

gasoline sulfur levels. 

b. Gasoline Volatility 

A fuel’s volatility defines its 

evaporation characteristics. A gasoline’s 

volatility is commonly referred to as its 

Reid vapor pressure, or RVP. Gasoline 

summertime RVP ranges from about 6–

9 psi, and wintertime RVP ranges from 

about 9–14 psi, when additional 

volatility is required for starting in cold 

temperatures. Gasoline vapors contain a 

subset of the liquid gasoline 

components, and thus can contain 

toxics compounds such as benzene. 

Since 1989, EPA has controlled 

summertime gasoline RVP primarily as 

a VOC and ozone precursor control, 

resulting in additional toxics pollutant 

reductions. 

c. Diesel Fuel 

In early 2001, EPA issued rules 

requiring that diesel fuel for use in 

highway vehicles contain no more than 

15 ppm sulfur beginning June 1, 

2006.131 This program contains 

averaging, banking and trading 

provisions during the transition to the 

15 ppm level, as well as other 

compliance flexibilities. In June 2004, 

EPA issued rules governing the sulfur 

content of diesel fuel used in nonroad 

diesel engines.132 In the nonroad rule, 

sulfur levels are limited to a maximum 

of 500 ppm sulfur beginning in 2007 

(current levels are approximately 3000 

ppm). In 2010, nonroad diesel sulfur 

levels must not exceed 15 ppm. 

EPA’s diesel fuel requirements are 

part of a comprehensive program to 

combine engine and fuel controls to 

achieve the greatest emission 

reductions. The diesel fuel provisions 

enable the use of advanced emissioncontrol technologies on diesel vehicles 

and engines. The diesel fuel 

requirements will also provide 

immediate public health benefits by 

reducing PM emissions from current 

diesel vehicles and engines. 

d. Phase-Out of Lead in Gasoline 

One of the first programs to control 

toxic emissions from motor vehicles was 

the removal of lead from gasoline. 

Beginning in the mid-1970s, unleaded 

gasoline was phased in to replace 

leaded gasoline. The phase-out of 

leaded gasoline was completed January 

1, 1996, when lead was banned from 

motor vehicle gasoline. The removal of 

lead from gasoline has essentially 

eliminated on-highway mobile source 

emissions of this highly toxic substance. 

2. Highway Vehicle and Engine 

Programs 

The 1990 Clean Air Act Amendments 

set specific emission standards for 

hydrocarbons and for PM. Air toxics are 

present in both of these pollutant 

categories. As vehicle manufacturers 

develop technologies to comply with 

the hydrocarbon (HC) and particulate 

standards (e.g., more efficient catalytic 

converters), air toxics are reduced as 

well. Since 1990, we have developed a 

number of programs to address exhaust 

and evaporative hydrocarbon emissions 

and PM emissions. 

Two of our recent initiatives to 

control emissions from motor vehicles 

and their fuels are the Tier 2 control 

program for light-duty vehicles and the 

2007 heavy-duty engine rule. Together 

these two initiatives define a set of 

comprehensive standards for light-duty 

and heavy-duty motor vehicles and their 

fuels. In both of these initiatives, we 

treat vehicles and fuels as a system. The 

Tier 2 control program establishes 

stringent tailpipe and evaporative 

emission standards for light-duty 

vehicles and a reduction in sulfur levels 

in gasoline fuel beginning in 2004.133

The 2007 heavy-duty engine rule 

establishes stringent exhaust emission 

standards for new heavy-duty engines 

and vehicles for the 2007 model year as 

well as reductions in diesel fuel sulfur 

levels starting in 2006.134 Both of these 

programs will provide substantial 

emissions reductions through the 

application of advanced technologies. 

We expect 90% reductions in PM from 

new diesel engines compared to engines 

under current standards. 

Some of the key earlier programs 

controlling highway vehicle and engine 

emissions are the Tier 1 and NLEV 

standards for light-duty vehicles and 

trucks; enhanced evaporative emissions 

standards; the supplemental federal test 

procedures (SFTP); urban bus standards; 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8459 

135http://epa.gov/obd/regtech/heavy.htm. 

and heavy-duty diesel and gasoline 

standards for the 2004/2005 time frame. 

3. Nonroad Engine Programs 

There are various categories of 

nonroad engines, including land-based 

diesel engines (e.g., farm and 

construction equipment), small landbased spark-ignition (SI) engines (e.g., 

lawn and garden equipment, string 

trimmers), large land-based SI engines 

(e.g., forklifts, airport ground service 

equipment), marine engines (including 

diesel and SI, propulsion and auxiliary, 

commercial and recreational), 

locomotives, aircraft, and recreational 

vehicles (off-road motorcycles, ‘‘all 

terrain’’ vehicles and snowmobiles). 

Chapter 2 of the RIA provides more 

information about these programs. 

As with highway vehicles, the VOC 

standards we have established for 

nonroad engines will also significantly 

reduce VOC-based toxics from nonroad 

engines. In addition, the standards for 

diesel engines (in combination with the 

stringent sulfur controls on nonroad 

diesel fuel) will significantly reduce 

diesel PM and exhaust organic gases, 

which are mobile source air toxics. 

In addition to the engine-based 

emission control programs described 

below, fuel controls will also reduce 

emissions of air toxics from nonroad 

engines. For example, restrictions on 

gasoline formulation (the removal of 

lead, limits on gasoline volatility and 

RFG) are projected to reduce nonroad 

MSAT emissions because most gasolinefueled nonroad vehicles are fueled with 

the same gasoline used in on-highway 

vehicles. An exception to this is lead in 

aviation gasoline. Aviation gasoline, 

used in general (as opposed to 

commercial) aviation, is a high octane 

fuel used in a relatively small number 

of aircraft (those with piston engines). 

Such aircraft are generally used for 

personal transportation, sightseeing, 

crop dusting, and similar activities. 

4. Voluntary Programs 

In addition to the fuel and engine 

control programs described above, we 

are actively promoting several voluntary 

programs to reduce emissions from 

mobile sources, such as the National 

Clean Diesel Campaign, anti-idling 

measures, and Best Workplaces for 

Commuters SM. While the stringent 

emissions standards described above 

apply to new highway and nonroad 

diesel engines, it is also important to 

reduce emissions from the existing fleet 

of about 11 million diesel engines. EPA 

has launched a comprehensive initiative 

called the National Clean Diesel 

Campaign, one component of which is 

to promote the reduction of emissions in 

the existing fleet of engines through a 

variety of cost-effective and innovative 

strategies. The goal of the Campaign is 

to reduce emissions from the 11 million 

existing engines by 2014. Emission 

reduction strategies include switching 

to cleaner fuels, retrofitting engines 

through the addition of emission control 

devices and engine replacement. For 

example, installing a diesel particulate 

filter achieves diesel particulate matter 

reductions of approximately 90 percent 

(when combined with the use of ultra 

low sulfur diesel fuel). The Energy 

Policy Act of 2005 includes grant 

authorizations and other incentives to 

help facilitate voluntary clean diesel 

actions nationwide. 

The National Clean Diesel Campaign 

is focused on leveraging local, state, and 

federal resources to retrofit or replace 

diesel engines, adopt best practices and 

track and report results. The Campaign 

targets five key sectors: school buses, 

ports, construction, freight and 

agriculture. Almost 300 clean diesel 

projects have been initiated through the 

Campaign. These projects will reduce 

more than 20,000 PM lifetime tons. PM 

and NOX reductions from these 

programs will provide nearly $5 billion 

in health benefits. 

Reducing vehicle idling provides 

important environmental benefits. As a 

part of their daily routine, truck drivers 

often keep their vehicles running at idle 

during stops to provide power, heat and 

air conditioning. EPA’s SmartWay SM

Transport Partnership is helping the 

freight industry to adopt innovative idle 

reduction technologies and to take 

advantage of proven systems that 

provide drivers with basic necessities 

without idling the main engine. To date, 

there are 80 mobile and stationary idlereduction projects throughout the 

country. Emission reductions, on an 

annual basis, from these programs are in 

excess of 157,000 tons of CO2, 2,000 

tons of NOX and 60 tons of PM; over 14 

million gallons of fuel are being saved 

annually. The SmartWay Transport 

Partnership also works with the freight 

industry by promoting a wide range of 

new technologies such as advanced 

aerodynamics, single-wide tires, weight 

reduction, speed control and intermodal 

shipping. 

Daily commuting represents another 

significant source of emissions from 

motor vehicles. EPA’s Best Workplaces 

for Commuters SM program is working 

with employers across the country to 

reverse the trend of longer, singleoccupancy vehicle commuting. OTAQ 

recognizes employers that have met the 

National Standard of Excellence for 

Commuter Benefits by adding them to 

the List of Best Workplaces for 

Commuters. These companies offer 

superior commuter benefits such as 

transit subsidies for rail, bus, and 

vanpools and promote flexi-place and 

telework. Emergency Ride Home 

programs provide a safety net for 

participants. More than 1,600 employers 

representing 3.5 million U.S. workers 

have been designated Best Workplaces 

for Commuters. 

Much of the growth in the Best 

Workplaces for Commuters program has 

been through metro area-wide 

campaigns. Since 2002, EPA has worked 

with coalitions in over 14 major 

metropolitan areas to increase the 

penetration of commuter benefits in the 

marketplace and the visibility of the 

companies that have received this 

distinguished designation. Another 

significant path by which the program 

has grown is through Commuter 

Districts including corporate and 

industrial business parks, shopping 

malls, business improvement districts 

and downtown commercial areas. To 

date EPA has granted the Best 

Workplaces for Commuters ‘‘District’’

designation to over twenty locations 

across the country including sites in 

downtown Denver, Houston, 

Minneapolis, Tampa and Boulder. 

5. Additional Programs Under 

Development That Will Reduce MSATs 

a. On-Board Diagnostics for Heavy-Duty 

Vehicles Over 14,000 Pounds 

The Agency has proposed on-board 

diagnostics (OBD) requirements for 

heavy-duty vehicles over 14,000 

pounds.135 In general, OBD systems 

monitor the operation of key emissions 

controls to detect any failure that would 

lead to emissions above the standards 

during the life of the vehicle. Given the 

nature of the heavy-duty trucking 

industry, 50-state harmonization of 

emissions requirement is an important 

consideration. Initially, the Agency 

signed a Memorandum of Agreement in 

2004 with the California Air Resources 

Board which expressed both agencies’

interest in working towards a single, 

nationwide program for heavy-duty 

OBD. Since that time, California has 

established their heavy-duty OBD 

program, which will begin 

implementation in 2010. EPA’s program 

will also begin in 2010. These 

requirements will help ensure that the 

emission reductions we projected in the 

2007 rulemaking for heavy-duty engines 

occur in-use. 


pwalker on PROD1PC71 with RULES_2
8460 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

136 69 FR 39276, June 29, 2004. 

137 65 FR 6697, February 10, 2000. 

138 66 FR 5001, January 18, 2001. 

139 69 FR 38958, June 29, 2004 (standards for nonroad diesel engines and fuels). Although non-road 

vehicles are not ‘‘motor vehicles,’’ and so are not 

subject to section 202(1)(2), EPA nevertheless has 

adopted standards resulting in the greatest feasible 

reductions of mobile source air toxics from these 

engines. 

b. Standards for Small Nonroad SparkIgnition Engines 

We are developing a proposal for 

small nonroad spark-ignition engines, 

those typically used in lawn and garden 

equipment and in spark-ignition marine 

engines. This proposal is being 

developed in response to Section 428 of 

the Omnibus Appropriations Bill for 

2004, which requires EPA to propose 

regulations under Clean Air Act section 

213 for new nonroad spark-ignition 

engines under 50 horsepower. We plan 

to propose standards that would further 

reduce engine and equipment emissions 

for these nonroad categories. We 

anticipate that any new standards 

would provide significant additional 

reductions in exhaust and evaporative 

HC (and VOC-based toxics) emissions. 

c. Standards for Locomotive and Marine 

Diesel Engines 

We are planning to propose more 

stringent standards for large diesel 

engines used in locomotive and marine 

applications, as discussed in a recent 

Advance Notice of Proposed 

Rulemaking.136 New standards for 

marine diesel engines would apply to 

engines less than 30 liters per cylinder 

in displacement (all engines except for 

Category 3). We are considering 

standards modeled after our Tier 4 

nonroad diesel engine program, which 

achieve substantial reductions in PM, 

HC, and NOX emissions. These 

standards would be based on the use of 

high efficiency catalyst aftertreatment 

and would also require fuel sulfur 

control. 

E. How Do These Mobile Source 

Programs Satisfy the Requirements of 

Clean Air Act Section 202(l)? 

The benzene and hydrocarbon 

standards in this action will reduce 

benzene, 1,3-butadiene, formaldehyde, 

acrolein, polycyclic organic matter, and 

naphthalene, as well as many other 

hydrocarbon compounds that are 

emitted by motor vehicles, including 

those that are discussed in more detail 

in Chapter 1 of the RIA. The emission 

reductions expected from today’s 

controls are set out in section IV.A and 

B of this preamble and Chapter 2 of the 

RIA. 

EPA believes that the emission 

reductions from the standards finalized 

today for motor vehicles and their fuels, 

combined with the standards currently 

in place, represent the maximum 

achievable reductions of emissions from 

motor vehicles through the application 

of technology that will be available, 

considering costs and the other factors 

listed in section 202(l)(2). This 

conclusion applies whether one 

considers just the compounds listed in 

Table 1.1–1 of the RIA, or consider all 

of the compounds on the Master List of 

emissions, given the breadth of EPA’s 

current control programs and the broad 

groups of emissions that many of the 

control technologies reduce. For 

example, EPA has already taken 

significant steps to reduce diesel 

emissions from motor vehicles (as well 

as other mobile sources). As explained 

above, we have adopted stringent 

standards for on-highway diesel trucks 

and buses and these standards control 

the air toxics emitted by these motor 

vehicles to the extent feasible. 

Emissions from motor vehicles can be 

chemically categorized as hydrocarbons, 

trace elements (including metals) and a 

few additional compounds containing 

carbon, nitrogen and/or halogens (e.g., 

chlorine). For the hydrocarbons, which 

are the vast majority of these 

compounds, we believe that with the 

controls finalized today, we will control 

the emissions of these compounds from 

motor vehicles to the maximum amount 

currently feasible or currently 

identifiable with available information. 

Section V of this preamble provides 

more details about why the standards 

represent maximum achievable 

reduction of hydrocarbons from motor 

vehicles. Motor vehicle controls do not 

reduce individual hydrocarbons 

selectively; instead, the maximum 

emission reductions are achieved by 

controls on hydrocarbons as a group. 

There are fuel controls that could 

selectively reduce individual air toxics 

(e.g., formaldehyde, acetaldehyde, 1,3- 

butadiene), as well as controls that 

reduce hydrocarbons more generally. 

Section VI of this preamble describes 

why the standards we are finalizing 

today represent the maximum emission 

reductions achievable through fuel 

controls, after considering the factors 

enumerated in section 202(l)(2) of the 

Clean Air Act. 

Motor vehicle emissions also contain 

trace elements, including metals, which 

originate primarily from engine wear 

and impurities in engine oil and 

gasoline or diesel fuel. EPA does not 

have authority to regulate engine oil, 

and there are no feasible motor vehicle 

controls to directly prevent engine wear. 

Nevertheless, oil consumption and 

engine wear have decreased over the 

years, decreasing emission of metals 

from these sources. Metals associated 

with particulate matter will be captured 

in emission control systems employing 

a particulate matter trap, such as will be 

used in heavy-duty vehicles meeting the 

2007 standards. We believe that 

currently, particulate matter traps, in 

combination with engine-out control, 

represent the maximum feasible 

reduction of both motor vehicle 

particulate matter and toxic metals 

present as a component of the 

particulate matter. 

The mobile source contribution to the 

national inventory for metal compounds 

is generally small. In fact, the emission 

rate for most metals from motor vehicles 

is small enough that quantitative 

measurement requires state-of-the art 

analytical techniques that are only 

recently being applied to this source 

category. We have efforts underway to 

gather information regarding trace metal 

emissions, including mercury 

emissions, from motor vehicles (see 

Chapter 1 of the RIA for more details). 

A few metals and other elements are 

used as fuel additives. These additives 

are designed to reduce the emission of 

regulated pollutants either in 

combination with or without an 

emission control device (e.g., a passive 

particulate matter trap). Clean Air Act 

section 211 (a) and (b) provide EPA with 

various authorities to require the 

registration of fuel additives by their 

manufacturers before their introduction 

into commerce. Registration involves 

certain data requirements that enable 

EPA to identify products whose 

emissions may pose an unreasonable 

risk to public health. In addition, this 

section provides EPA with authority to 

require health effects testing to fill any 

gaps in the data that would prevent a 

determination regarding the potential 

for risk to the public. It is under the 

section 211 registration program that 

EPA is currently generating the 

information needed to update an 

assessment of the potential human 

health risks related to having manganese 

in the national fuel supply. Clean Air 

Act section 211(c) provides the primary 

mechanism by which EPA would take 

actions necessary to minimize exposure 

to emissions of metals or other additives 

to diesel and gasoline. 

Existing regulations limit sulfur in 

gasoline and diesel fuel to the maximum 

amount feasible and will reduce 

emissions of all sulfur-containing 

compounds (e.g., hydrogen sulfide, 

carbon disulfide) to the greatest degree 

achievable.137 138 139 For the remaining 

compounds (e.g., chlorinated 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8461 

140Most certification 20 °F hydrocarbon levels are 

reported as total hydrocarbon (THC), but NMHC 

accounts for approximately 95% of THC as seen in 

results with both THC and NMHC levels reported. 

This relationship also is confirmed in EPA test 

programs supporting this rulemaking. 

141 ‘‘VOC/PM Cold Temperature Characterization 

and Interior Climate Control Emissions/Fuel 

Economy Impact,’’ Volume I and II, October 2005. 

compounds), we currently have very 

little information regarding emission 

rates and conditions that impact 

emissions. This information would be 

necessary in order to evaluate potential 

controls under section 202(l). Emissions 

of hydrocarbons containing chlorine 

(e.g., dioxins/furans) would likely be 

reduced with control measures that 

reduce total hydrocarbons, just as these 

emissions were reduced with the use of 

catalytic controls that lowered exhaust 

hydrocarbons. 

V. New Light-Duty Vehicle Standards 

A. Introduction 

The program we are establishing for 

vehicles will achieve the same 

significant toxics reductions that we 

projected for the proposed rule (see 

generally 71 FR 15845–15848). The 

program is very similar to that proposed 

except for a few minor changes made in 

response to comments we received. 

These changes will improve the 

implementation of the program without 

significantly changing the program’s 

overall emission reductions and 

environmental benefits. As described in 

this section, we are adopting stringent 

new nonmethane hydrocarbon 

standards for vehicles to reduce 

hydrocarbon (HC) emissions during 

vehicle cold temperature operation. As 

discussed in the proposal, the current 

HC emissions standards are measured 

within a range of specified warm 

temperatures, and the test procedure 

does not include cold temperatures. 

Data indicate that cold HC emissions 

currently are very high for many 

vehicles compared to emissions at 

normal test temperatures. The new cold 

temperature standards and program 

requirements will be phased in starting 

in 2010. When fully phased in, the new 

standards will further reduce overall 

vehicle HC emissions by about 31%, or 

by about 883,000 tons in 2030. 

By reducing overall HC emissions 

from vehicles, we will be significantly 

reducing several gaseous toxics 

including benzene, formaldehyde, 1,3- 

butadiene, and acetaldehyde. We also 

project that the cold temperature 

standard will provide concurrent 

reductions in direct PM emissions from 

vehicles, since the strategies 

manufacturers are expected to employ 

to reduce cold HC will reduce PM as 

well. Although Clean Air Act section 

202(l) deals with control of air toxics, 

and not criteria pollutants like PM, this 

co-benefit of cold temperature control is 

significant. 

We are finalizing the new cold 

temperature standards and 

implementation schedule essentially as 

proposed. We are also adopting several 

other related provisions and 

requirements largely as proposed. Many 

of these provisions will help the 

manufacturers smoothly transition to 

the new standards in the shortest lead 

time possible. They include corporate 

average emissions standards, emissions 

credits, options for alternative phase-in 

schedules, and special provisions for 

small businesses. The program also 

includes certification and compliance 

provisions. 

We are also adopting new evaporative 

emissions standards, beginning in 

model year 2009. The new standards are 

essentially the same as those contained 

in the California LEVII program. 

Manufacturers have been selling 50- 

state evaporative systems that meet both 

the Tier 2 and LEVII requirements. 

Today’s final rule will ensure that 

industry continues this practice. 

Sections V.B. and V.C. provide the 

details of the new cold temperature and 

evaporative emissions standards, 

respectively, and briefly discuss some of 

the comments we received on the 

proposed vehicles program. We have 

seriously considered all of the input 

from stakeholders in developing the 

final vehicles program and believe that 

the final rule appropriately addresses 

the concerns of all stakeholders. We 

provide a full discussion of the 

comments we received on vehicles in 

Chapter 3 of the Summary and Analysis 

of Comments for this rule. 

B. What Cold Temperature 

Requirements Are We Adopting? 

1. Why Are We Adopting a New Cold 

Temperature NMHC Standard? 

As emissions standards have become 

more stringent, manufacturers have 

concentrated primarily on controlling 

emissions performance just after the 

start of the engine in order to further 

reduce emissions. To comply with 

stringent hydrocarbon emission 

standards at 75 °F, manufacturers 

developed new emission control 

strategies and practices that resulted in 

significant emissions reductions at that 

start temperature. We expected that 

proportional reductions in hydrocarbon 

emissions would occur at other colder 

start temperatures as a result of the more 

stringent standards. We believe that 

there is no engineering reason why 

proportional control should not be 

occurring on a widespread basis. 

In some cases, certification data for 

recent model year light-duty vehicles 

indicate that individual vehicles did 

demonstrate proportional improvements 

in hydrocarbon emission results at 20 °F 

relative to their 75 °F results, confirming 

our belief that proportional control is 

feasible and indeed is practiced at least 

occasionally. One manufacturer’s 

certification results reflected 

proportional improvements across 

almost its entire vehicle lines, further 

supporting that proportional control is 

feasible. However, for most vehicles, 

certification reports show a sharp rise in 

hydrocarbon 140 emissions at 20 ° F 

when compared to the reported 75 ° F 

hydrocarbon emission levels. Any rise 

in hydrocarbon emissions, specifically 

nonmethane hydrocarbons (NMHC), 

will result in proportional rise in VOCbased air toxics.141 While some increase 

in NMHC emissions can be expected 

simply due to combustion limitations of 

gasoline engines at colder temperatures, 

the reported levels of hydrocarbon 

emissions seem to indicate a 

significantly diminished use of 

hydrocarbon emissions controls 

occurring at colder temperatures. Thus, 

although all vehicle manufacturers have 

been highly successful at reducing 

emissions at the test start temperature 

range, in general, they do not appear to 

be capitalizing on NMHC emission 

control strategies and technologies at 

lower temperatures. This is likely 

because compliance with hydrocarbon 

standards is not required at 20 degree F 

temperatures. (see 71 FR at 15845.) 

Today’s rule remedies this by requiring 

such compliance. 

2. What Are the New NMHC Exhaust 

Emissions Standards? 

We are finalizing a set of standards 

that will achieve proportional NMHC 

control from the 75 °F Tier 2 standards 

to the 20 °F test point. We expect that 

by fully utilizing available Tier 2 

hardware and software control 

strategies, manufacturers will be able to 

achieve this standard without major 

changes to Tier 2 vehicle designs or the 

use of additional technology. Table V.B–

1 contains the final standards. 


pwalker on PROD1PC71 with RULES_2
8462 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

142Tier 2 created the medium-duty passenger 

vehicle (MDPV) category to include larger complete 

passenger vehicles, such as SUVs and vans, with a 

GVWR of 8,501–10,000 pounds GVWR. Large pickups above 8,500 pounds are not included in the 

MDPV category but are included in the heavy-duty 

vehicle category. 143 40 CFR Subpart C, § 86.244–94 requires the 

measurement of all pollutants measured over the 

FTP except NOX. 144The existing cold FTP test procedures are 

specified in 40 CFR Subpart C. In the final rule for 

fuel economy labeling, (71 FR 77872, December 27, 

2006), EPA revised the cold FTP test protocol to 

require manufacturers to run the heater and/or 

defroster while conducting the cold FTP test. This 

had previously been an optional provision. We do 

not believe this requirement will have a significant 

impact on emissions. 

TABLE V.B–1.—20 °F FTP EXHAUST EMISSION STANDARDS

Vehicle GVWR and category 

NMHC sales-weighted fleet 

average standard 

(grams/mile) 

≤6000 lbs: Light-duty vehicles (LDV) & Light light-duty trucks (LLDT) ......................................................................... 0.3 

>6000 lbs: Heavy light-duty trucks (HLDT) up to 8,500 lbs & Medium-duty passenger vehicles (MDPV) up to 

10,000 lbs ................................................................................................................................................................... 0.5 

As shown in the table, we are 

finalizing, as proposed, two separate 

sales-weighted fleet average NMHC 

standards: 0.3 grams/mile for vehicles at 

or below 6,000 pounds (lbs) GVWR and 

0.5 grams/mile for vehicles over 6,000 

lbs, including MDPVs.142 NMHC 

emissions will be measured during the 

Cold Federal Test Procedure (FTP) test, 

which already requires hydrocarbon 

measurement.143 The new standard does 

not require additional certification 

testing beyond what is required today 

with ‘‘worst case’’ model selection of a 

durability test group.144

The separate fleet average standards 

we are finalizing account for challenges 

related to vehicle weight. We examined 

certification data from Tier 2 and 

interim non-Tier 2 vehicles (i.e., 

vehicles not yet phased into the final 

Tier 2 program, but meeting interim 

standards established by Tier 2), and 

saw a general trend of increased 

hydrocarbon levels with heavier GVWR 

vehicles. Some comments suggested that 

the standard for HLDT/MDPVs should 

be the same standard as applies to LDVs 

or contain a second future phase that 

reduces emissions to those levels. At 

this time, we continue to believe that 

heavier vehicles have applicationspecific design limitations. Heavier 

vehicles generally produce higher 

emissions for several reasons. First, 

added weight requires additional work 

to accelerate the vehicle mass, generally 

resulting in higher emissions, 

particularly soon after engine start-up. 

Second, the design of these emission 

control systems may incorporate designs 

for specific duty cycles (i.e., trailer 

towing) that can negatively affect 

emissions, particularly during 20° F 

cold starts. For example, since the 

catalyst may be located further away 

from the engine for protection from high 

exhaust temperatures during designspecific duty cycles, warm-up of the 

catalyst is typically delayed, especially 

at colder temperatures. Therefore, we 

believe the 0.3 g/mile fleet average 

standard for vehicles below 6,000 lbs 

GVWR is not technically feasible at this 

time for heavier vehicles. We are thus 

finalizing a 0.5 g/mile standard for 

vehicles over 6000 lbs GVWR, including 

both HLDTs (6000 lbs to 8500 lbs) and 

MDPVs. 

We are finalizing the sales-weighted 

fleet average approach as proposed, as 

the way to achieve the greatest degree of 

emission control for Tier 2 vehicles. At 

the same time, this approach allows 

manufacturers sufficient lead time and 

flexibility to certify different vehicle 

groups to different levels, thus lowering 

the costs of the program. A fleet average 

provides manufacturers with flexibility 

to balance challenging vehicle families 

with ones that more easily achieve the 

standards. We believe this approach is 

appropriate because the base Tier 2 

program is also based on emissions 

averaging, and will result in a mix of 

emissions control strategies across the 

fleet that have varying cold temperature 

capabilities. While the Tier 2 program 

continues to phase in, manufacturers are 

concurrently developing emissions 

control packages. The capabilities of 

each Tier 2 package will not be fully 

understood until manufacturers are able 

to evaluate the potential of the 

individual designs to control cold 

temperature emissions. 

We received several comments from 

state and environmental groups 

supporting the new cold temperature 

standards. Manufacturers indicated 

their support of the Agency’s initiative 

to seek reductions in MSATs, and one 

manufacturer commented that cold 

temperature hydrocarbon control is both 

effective and logical. Manufacturers 

commented that the new standards 

would be very challenging, but that the 

flexibilities incorporated into the final 

rule will significantly help 

manufacturers achieve the new 

standards. One manufacturer with a 

product line limited to vehicles below 

6,000 lbs GVWR suggested that the 0.3 

g/mile standard was too stringent and 

unreasonable based on an assessment of 

their current vehicle emission levels. 

The manufacturer’s comments did not 

provide data or further technical 

analysis to substantiate this claim. We 

know of no engineering basis for the 

standards not being technically 

achievable. Moreover, there are about 

nine other manufacturers with similar 

product lines exclusively below 6,000 

lbs GVWR, and they did not provide 

similar comments. We continue to 

believe that with careful examination of 

existing emission control opportunities 

at colder temperatures on Tier 2 

compliant vehicles, especially given the 

lead time provided, manufacturers will 

identify strategies to comply with the 

new standards across their product 

lines. 

We are establishing a Family 

Emissions Limit (FEL) structure in 

which manufacturers will determine 

individual FELs for each group of 

vehicles certified. These FELs are the 

standard for each individual group, and 

are averaged on a sales-weighted basis 

to demonstrate overall compliance with 

the fleet average standards. We are using 

the FEL-based approach for the new 

cold temperature NMHC standards 

because we believe it results in the same 

level of environmental benefit but adds 

flexibility and leads to cost-effective 

compliance strategies. The FEL 

approach is discussed further in section 

V.B.4 below. 

We are applying the new cold 

temperature NMHC standards to lightduty gasoline-fueled vehicles. However, 

diesel vehicles, alternative-fueled 

vehicles, and heavy-duty vehicles will 

not be subject to these standards, since 

we lack data on which to base 

standards. Section V.B.6.a provides a 

detailed discussion of applicability and 

comments received. 

3. Feasibility of the Cold Temperature 

NMHC Standards 

We believe the new standards will be 

challenging but are attainable and 

provide the greatest emission reductions 

using technology that will be available. 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8463 

145European Union (EU) Type VI Test (¥7°C) 

required for new vehicle models certified as of 1/ 

1/2002. 

146NLEV voluntary program introduced 

California low emission cars and light-duty trucks 

(0–6000 lbs. GVW) into other states beginning in 

1999. 

147Meyer, Robert and John B. Heywood, ‘‘Liquid 

Fuel Transport Mechanisms into the Cylinder of a 

Firing Port-Injected SI Engine During Start-up,’’

SAE 970865, 1997. 

The feasibility assessment described 

below is based on our analysis of the 

standard’s stringency given current 

emission levels at certification 

(considering deterioration, compliance 

margin, and vehicle weight), available 

emission control techniques, and our 

own feasibility testing. In addition, 

sections V.B.3–6 describe the lead time 

and flexibility within the program 

structure, which also contribute to the 

achievability of the standards. There are 

a number of technologies discussed 

below that can be utilized to achieve 

these standards. We expect that 

manufacturers will employ these 

technologies in various combinations, 

which will likely vary from vehicle to 

vehicle depending on a vehicle’s base 

emission control package developed for 

Tier 2 compliance. Moreover, as 

discussed in section V.D, due to current 

Tier 2 phase-in schedules, we are not 

yet in a position to evaluate fully the 

achievability of standards based on new 

technologies that may result when Tier 

2 is fully phased in in model year 2009. 

Thus, we are not considering more 

stringent cold temperature NMHC 

standards that would require the 

application of new technology to Tier 2 

vehicles. 

Chapter 8 of the RIA contains vehicle 

and nationwide cost estimates, 

including capital and development 

costs. We believe the estimated costs are 

reasonable and the rule is cost-effective, 

as shown in section XIII, below. Given 

the emission control strategies currently 

available, we expect manufacturers to 

implement these technologies 

successfully without a significant 

impact on vehicle noise, energy 

consumption, or safety factors. 

Although new emissions control 

strategies are necessary at cold 

temperatures, we do not expect 

fundamental Tier 2 vehicle hardware to 

change. 

Manufacturers commented that the 

standards will be extremely challenging 

because the standards are based on full 

useful life performance and 

manufacturers must account for fuel 

quality in the field to ensure adequate 

performance. Manufacturers also noted 

that they must account for a host of 

requirements in addition to the new 

cold temperature standards, including 

Tier 2 and SFTP standards. In response, 

we understand the challenges involved 

in complying with the new cold 

temperature standards and we are 

providing the essential lead time for 

manufacturers to identify and resolve 

any related issues as part of overall 

vehicle development. We are also 

including several other provisions 

discussed below, including an averaging 

program, phase-in, emissions credits, 

deficit carry-forward, and in-use 

standards that provide manufacturers 

with flexibility in transitioning to the 

new standards. 

a. Currently Available Emission Control 

Technologies 

We believe that the cold temperature 

NMHC standards for gasoline-fueled 

vehicles being finalized today are 

challenging but attainable with Tier 2 

(i.e., existing) level emission control 

technologies. Our determination of 

feasibility is based on the emission 

control hardware and calibration 

strategies used today on Tier 2 vehicles. 

These emission control technologies are 

utilized to meet the stringent Tier 2 

standards for HC at the FTP temperature 

range of 68 °F to 86 °F, but are not 

generally used or activated at colder 

temperatures. As discussed in section 

V.D, the standards we are finalizing 

today will not force changes to Tier 2 

compliance strategies. Many current 

engine families already achieve 

emissions levels at or below the 

emission standards being adopted (see 

RIA Chapter 5) and accomplish this 

through software and calibration control 

technologies. However, a significant 

number of engine families emit more 

than twice the level of the new 

standards most likely because they fail 

to use the Tier 2 control technologies at 

colder temperatures. We believe the 

new standards can be met by the 

application of calibration and software 

approaches similar to those currently 

used at 75 °F. Although manufacturers 

could use additional hardware to 

facilitate compliance with the new 

standard, we are not projecting that they 

would choose to do so because the 

standards can be achieved through 

lower-cost calibration and software 

strategies. As described in section 

V.B.2.c, our own feasibility testing of a 

vehicle over 6000 lbs GVWR achieved 

NMHC reductions consistent with the 

standard through calibration approaches 

alone. 

In 2002, the European Union (EU) 

finalized a ¥7 °C (20 °F) cold HC 

requirement.145 While the European 

standard is based on a different drive 

cycle, manufacturers have developed 

individual strategies to comply with this 

standard. When the EU implemented 

the new cold HC standard in 

conjunction with a new 75 °F standard 

(Euro4), many manufacturers responded 

by employing National Low Emission 

Vehicle (NLEV) 146 level hardware and 

supplementing it with advanced cold 

start emission control strategies. The EU 

similarly determined that heavier 

weight vehicles may have duty-cycle 

based design limitations and also 

adopted a separate unique emission 

standard for these vehicles. Many 

manufacturers offer common vehicle 

models in both European and U.S. 

markets. Such manufacturers can 

leverage European models to transfer 

emission control technologies 

successfully used for 20 °F hydrocarbon 

control in Europe to their U.S. model 

counterparts. 

There are several strategies used in 

the vehicles that are achieving 

proportional improvements in NMHC 

emissions at 20 °F FTP. Calibration and 

software strategies that can be used 

include lean limit fuel strategies, fuel 

injection timing,147 elevated idle 

speeds, retarded spark timing, 

redundant spark timing, and accelerated 

closed loop times. These strategies are 

consistently and successfully used at 75 

°F to meet stringent Tier 2 standards. 

We expect that software and/or 

calibration changes will perform as well 

or better than added hardware. This is 

because some hardware such as the 

improved catalyst system may not be 

usable immediately following the cold 

start because it must warm-up to operate 

efficiently. Calibration and software 

strategies that minimize emissions 

produced by the engine during this 

period while simultaneously 

accelerating usage of the catalyst will be 

more effective than most new hardware 

options. See RIA Chapter 5 for further 

discussion. 

In addition to calibration strategies, 

some manufacturers may comply with 

the new standards by extending the use 

of existing Tier 2 hardware to 20 °F. An 

example of this is secondary air 

systems. Several European models sold 

in the U.S. market demonstrate 

excellent cold HC performance and 

utilize secondary air systems from 75 °F 

to 20 °F start temperatures. The 

secondary air systems reduce emissions 

by injecting ambient air into the 

exhaust, thus supplying oxygen for 

more complete combustion. This also 

supplies supplemental heat to the 

catalyst. These systems have been used 

extensively to reduce hydrocarbon 

emissions at 75 °F starts. Currently, auto 


pwalker on PROD1PC71 with RULES_2
8464 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

148Memo to docket ‘‘Discussions Regarding 

Secondary Air System Usage at 20°F with European 

Automotive Manufacturers and Suppliers of 

Secondary Air Systems,’’ December 2005. 

makers are equipping a portion of the 

Tier 2 fleet with secondary air systems 

for compliance with Tier 2 standards. 

Some manufacturers with vehicles 

containing secondary air systems 

claimed that they are not utilizing them 

at temperatures below freezing simply 

because of past engineering issues. 

Those successfully using secondary air 

at 20 °F (mainly European companies) 

indicated that these challenges have 

been addressed through design changes. 

The robustness of these systems below 

freezing has also been confirmed with 

the manufacturers and with the 

suppliers of the secondary air 

components.148 While alternative 

technologies are available and produce 

comparable results, vehicles equipped 

with secondary air technology should 

meet the new 20 °F standard by utilizing 

it at colder temperatures. 

b. Feasibility Considering Current 

Certification Levels, Deterioration and 

Compliance Margin 

The standards we are finalizing will 

have a full useful life of 120,000 miles, 

consistent with Tier 2 standards. We 

believe the 0.3 g/mile FEL standard 

leaves adequate flexibility for 

compliance margins and any emissions 

deterioration concerns. Of the vehicles 

certified to Tier 2 with available cold 

temperature certification data, 

approximately 20% of vehicles below 

6,000 lbs GVWR had HC levels in the 

range of 0.18 to 0.27 g/mile, which is 

two to three times the 75 °F Tier 2 bin 

5 full useful life standard. These 

reported HC levels are from Cold CO 

test results for certification test vehicles 

with typically only 4,000 mile aged 

systems, without full useful life 

deterioration applied. Rapid advances 

in emission control hardware 

technology have lowered deterioration 

factors used by manufacturers to 

demonstrate full useful life compliance, 

usually indicating little or no 

deterioration over a vehicle’s lifetime. 

These deterioration factors are common 

across all required test cycles including 

cold temperature testing. Additionally, 

manufacturers typically incorporate a 

20% to 30% compliance margin to 

account for in-use issues that may cause 

emissions variability. See RIA Chapter 5 

for further discussion and details 

regarding current certification levels. 

c. Feasibility and Test Programs 

While a few of the heavier vehicles 

achieved emission levels below the 0.5 

g/mile level, there are only limited 20 °F 

certification results for Tier 2 compliant 

vehicles over 6000 lbs GVWR because 

the Tier 2 standards are still phasing in 

for these vehicles. Prior to proposal, we 

conducted a feasibility study in 20 °F 

conditions for Tier 2 vehicles over 6000 

lbs GVWR. The test program further 

investigated the feasibility of 

compliance for heavier vehicles and 

assessed their capabilities with typical 

Tier 2 hardware. For one vehicle with 

models above and below 6,000 lbs 

GVWR, we reduced HC emissions by 

60–70%, depending on the control 

strategy. This vehicle had a baseline 

level of about 1.0 g/mile. The results are 

well within the 0.5 g/mile standard 

including compliance margin, and 

within a 0.3 g/mile level on some tests. 

We achieved these reductions through 

recalibration without the use of new 

hardware. 

Comments from the auto industry 

suggested that the original single vehicle 

feasibility test program and the 

approach used to reduce emission levels 

on the feasibility vehicle were too 

simplistic and did not fully account for 

competing requirements. The 

commenter stated that that Tier 2 FTP 

and SFTP requirements have affected 

hardware decisions, such as catalyst 

location, and make it more difficult to 

simultaneously obtain optimal 

performance at colder temperatures. For 

the final rule, we completed a second 

feasibility program to help address the 

comments regarding the first feasibility 

program. For the second feasibility test 

program, we tested a vehicle with some 

of the specific challenges listed by the 

auto industry which represented a worst 

case vehicle from the perspective of 

cold temperature emissions control 

including catalyst location and a large 

displacement engine. The second 

feasibility program utilized emission 

control methods already practiced in the 

production European version of the 

vehicle tested, helping to demonstrate 

that significant emission controls 

through calibration are available to 

manufacturers today. Simply utilizing 

the European emission controls resulted 

in a 32% reduction in NMHC emissions. 

The findings from both studies are 

provided in detail in the RIA. 

While the auto industry did not 

question the feasibility of the standards, 

they expressed concerns that EPA was 

not conveying the complexity of effort 

required for full product line 

manufacturers to meet the new 

standards. We believe that the feasibility 

program demonstrated that Tier 2 

vehicles, including higher weight 

vehicles, currently have existing 

emission control capabilities to achieve 

the new standards. The extensive 

emission data from certification tests 

detailed in RIA Chapter 5 provides 

substantial support to the assessment 

that Tier 2 vehicles generally possess 

the necessary technology to achieve the 

new standards. In most cases, the 

technologies need to be activated and 

optimized at colder temperatures 

through calibration strategies. However, 

we recognize that manufacturers, 

particularly full line manufacturers, will 

have to do significant development 

work to bring their expansive Tier 2 

product line into compliance with the 

new standards over the vehicles’ full 

useful life. This is why we have 

included a phase-in of the standards 

over 6 model years. 

4. Standards Timing and Phase-In 

a. Phase-In Schedule 

As proposed, we will begin 

implementing the standard in the 2010 

model year (MY) for LDV/LLDTs and 

2012 MY for HLDT/MDPVs. The 

implementation schedule, in Table V.B–

2, begins three model years after the 

Tier 2 phase-in is complete for each 

vehicle class. Manufacturers will 

demonstrate compliance with phase-in 

requirements through sales projections, 

similar to Tier 2, as discussed below in 

Section V.B.7. 

TABLE V.B–2.—PHASE-IN SCHEDULE FOR 20 °F NMHC STANDARD BY MODEL YEAR

Vehicle GVWR (category) 2010 2011 2012 2013 2014 2015 

≤6000 lbs (LDV/LLDT) ..................................................................................................... 25% 50% 75% 100% ............ ............

>6000 lbs HLDT and MDPV ............................................................................................ ............ ............ 25% 50% 75% 100% 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8465 

We requested comments on the 

proposed start date and duration of the 

phase-in schedule. Generally, 

manufacturers supported the phase-in 

schedule. Commenters indicated that 

the stringency of the standards will 

increase the development workload and 

facility demands, but that the proposed 

rule recognized these cost issues and 

provided sufficient mechanisms for 

phase-in flexibility to help 

manufacturers transition to the new 

program. One manufacturer with only 

LDV and LLDT vehicles in their product 

line commented that the required phasein percentage affects a larger portion of 

their products compared with other 

manufacturers with heavier vehicles, 

and therefore the phase-in should be 

extended to accommodate construction 

of new facilities. Conversely, a nonprofit organization commented that EPA 

should begin the program earlier than 

we proposed. The organization cited our 

assessment that manufacturers could 

utilize primarily calibration and 

software changes, and not hardware 

changes, to achieve compliance. 

However, as discussed below, we 

believe that the finalized start date and 

phase-in schedule will achieve the 

greatest amount of emissions reductions 

in the shortest feasible amount of time. 

EPA must consider lead time in 

determining the greatest degree of 

emission reduction achievable under 

section 202(l) of the Clean Air Act. Also, 

for vehicles above 6,000 GVWR, section 

202(a) of the Act requires that four years 

of lead time be provided to 

manufacturers. We believe that lead 

time and phase-in schedule is needed to 

allow manufacturers to develop 

compliant vehicles without significant 

disruptions in their product 

development cycles. The three-year 

period between completion of the Tier 

2 phase-in and the start of the new cold 

NMHC standard should provide vehicle 

manufacturers sufficient lead time to 

design their compliance strategies and 

to determine the product development 

plans necessary to meet the new 

standards. 

We recognize that the new cold 

temperature standards we are finalizing 

could represent a significant new 

challenge for many manufacturers and 

development time will be needed. The 

issue of NMHC control at cold 

temperatures was not anticipated by 

many entities, and research and 

development to address the issue is 

consequently at a rudimentary stage for 

some manufacturers. Lead time is 

therefore necessary before compliance 

can be demonstrated. While certification 

will only require one vehicle model of 

a durability group to be tested, 

manufacturers must do development on 

all vehicle combinations to ensure full 

compliance within the durability test 

group. A phase-in is needed because 

manufacturers must develop control 

strategies for several vehicle lines. Since 

manufacturers cannot be expected to 

implement the standard over their entire 

product line in 2010, we believe a 

phase-in allows the program to begin 

sooner than would otherwise be 

feasible. 

As noted at proposal, the lead time 

and phase-in are also needed to address 

test facility availability issues (see 71 FR 

15849). Prior to proposal, manufacturers 

raised concerns that a rapid phase-in 

schedule would lead to a significant 

increase in the demand for their cold 

testing facilities, which could 

necessitate substantial capital 

investment in new cold test facilities to 

meet development needs. This is 

because manufacturers would need to 

use their cold testing facilities not only 

for certification but also for vehicle 

development. Durability test groups 

may be large and diverse and therefore 

require significant development effort 

and cold test facility usage for each 

model. If vehicle development is 

compressed into too narrow a time 

window, significant numbers of new 

facilities would be needed. 

Manufacturers were also concerned that 

investment in new test facilities would 

be stranded at the completion of the 

initial development and phase-in 

period. 

We took these concerns into 

consideration when drafting our 

proposed rule and are finalizing the 

start date and phase-in as proposed 

because we continue to believe they 

address these issues adequately. Our 

finalized phase-in period accommodates 

test facilities and work load concerns by 

distributing these fleet phase-in 

percentage requirements over a fouryear period for each vehicle weight 

category (six years total). The staggered 

start dates for the phase-in schedule 

between the two weight categories 

should further alleviate manufacturers’

burden regarding construction of new 

test facilities. We recognize that some 

manufacturers may still determine that 

upgrades to their current cold facility 

are needed to handle increased 

workload, or that additional shifts must 

be added to their facility work 

schedules that are not in place today. 

The lead time provided and the fouryear phase-in period provides needed 

time for vehicle manufacturers to 

develop a compliance schedule that 

does not significantly interfere with 

their future product plans. 

Manufacturers commented in support of 

the lead time and phase in provided, 

commenting that these program 

elements are needed to avoid high test 

facility costs. 

b. Alternative Phase-In Schedules 

We are finalizing provisions, as 

proposed, that allow manufacturers to 

introduce vehicles earlier than required 

in exchange for flexibility to make 

offsetting adjustments, on a one-for-one 

basis, to the phase-in percentages in 

later years. Alternative phase-in 

schedules essentially credit the 

manufacturer for its early or accelerated 

efforts and allow the manufacturer 

greater flexibility in subsequent years 

during the phase-in. Under these 

alternative schedules, manufacturers 

would have to introduce vehicles that 

meet or surpass the NHMC average 

standards before they are required to do 

so, or else introduce vehicles that meet 

or surpass the standard in greater 

quantities than required. 

As proposed, we are finalizing 

provisions allowing manufacturers to 

apply for an alternative phase-in 

schedule that would still result in 100% 

phase-in by 2013 and 2015, 

respectively, for the lighter and heavier 

weight categories. As with the primary 

phase-in, manufacturers would base an 

alternative phase-in on their projected 

sales estimates. An alternate phase-in 

schedule submitted by a manufacturer 

would be subject to EPA approval and 

would need to provide the same 

emissions reductions as the primary 

phase-in schedule. The alternative 

phase-in cannot be used to delay full 

implementation past the last year of the 

primary phase-in schedule (2013 for 

LDVs/LDTs and 2015 for HLDTs/ 

MDPVs). 

As proposed, this alternative phase-in 

schedule will be acceptable if it passes 

a specific mathematical test (see 71 FR 

15849). We have designed the test to 

provide manufacturers a benefit from 

certifying to the standards early, while 

ensuring that significant numbers of 

vehicles are introduced during each 

year of the alternative phase-in 

schedule. Manufacturers will multiply 

their percent phase-in by the number of 

years the vehicles are phased in prior to 

the second full phase-in year. The sum 

of the calculation will need to be greater 

than or equal to 500, which is the sum 

from the primary phase-in schedule (4 

× 25 + 3 × 50 + 2 × 75 + 1 × 100 = 500). 

For example, the equation for LDVs/ 

LLDTs will be as follows: 

(6 × API2008) + (5 × API2009) + (4 × 

API2010) + (3 ×API2011) + (2 × 

API2012) + (1 × API2013) ≥ 500%, 

where ‘‘API’’ is the anticipated 


pwalker on PROD1PC71 with RULES_2
8466 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

149 40 CFR 86.1803–01. 

phase-in percentage for the 

referenced model year 

As described above, the final sum of 

percentages for LDVs/LDTs must equal 

or exceed 500 ¥ the sum that results 

from a 25/50/75/100 percent phase-in. 

For example, a 10/25/50/55/100 percent 

phase-in for LDVs/LDTs that begins in 

2009 will have a sum of 510 percent and 

is acceptable. A 10/20/40/70/100 

percent phase-in that begins the same 

year has a sum of 490 percent and is not 

acceptable. 

To ensure that significant numbers of 

compliant LDVs/LDTs are introduced in 

the 2010 time frame (2012 for HLDT/ 

MDPVs), manufacturers would not be 

allowed to use alternative phase-in 

schedules that delay the 

implementation of the requirements, 

even if the sum of the phase-in 

percentages ultimately meets or exceeds 

500. Such a situation could occur if a 

manufacturer delayed implementation 

of its compliant production until 2011 

and began an 80/85/100 percent phasein that year for LDVs/LDTs. To protect 

against this possibility, we are 

finalizing, as proposed, that for any 

alternative phase-in schedule, the 

manufacturer’s API × year factors for 

LDV/LLDTs from the 2010 and earlier 

model years (2012 and earlier for HLDT/ 

MDPVs) sum to at least 100. The early 

phase-in also encourages the early 

introduction of vehicles meeting the 

new standard or the introduction of 

such vehicles in greater quantity than 

required, achieving early emissions 

reductions. 

One commenter recommended that 

EPA carefully consider the added 

complexity of allowing alternative 

phase-in schedules before including 

these provisions in the final rule. In 

response, we allowed manufacturers the 

option of using similar alternative 

phase-ins for Tier 2 and these 

provisions have not proven to be 

detrimental in the implementation of 

the Tier 2 program. We believe the 

added flexibility provided to 

manufacturers helps them to meet the 

new requirements as soon as possible 

while also helping to minimize 

disruptions to their product plans. 

These benefits offset the complexity 

added by the alternative phase-in 

option. 

Manufacturers commented that EPA 

should remove the requirement for 2010 

to have a sum of 100 because it limits 

flexibility and could cause 

manufacturers to run a deficit early in 

the program. We are retaining this 

requirement as proposed, except for the 

option discussed in the next paragraph. 

In general, this requirement ensures that 

manufacturers introduce complying 

vehicles early in the phase-in. The 

alternative phase-in is not intended to 

postpone introduction of compliant 

vehicles; instead, it is to allow an 

accelerated introduction of vehicles and 

to allow manufacturers the flexibility of 

aligning compliance with production 

schedules. The commenter’s suggestion 

of removing the sum of 100 provision 

for MY 2010 and earlier vehicles would 

essentially amount to delaying the 

program by one year. Since all 

manufacturers make LDV/LDTs, the 

sum of 100 provision ensures that 

environmental benefits are achieved as 

soon as possible, while the alternative 

phase-in provision as a whole provides 

additional flexibility to manufacturers. 

As described above, we proposed an 

early-year requirement for alternative 

phase-in schedules for HLDTs/MDPVs 

(see 71 FR 15850). Similar to the LDV/ 

LDT requirement, we proposed that the 

API × year factors from the 2012 and 

earlier model years sum to at least 100. 

We are finalizing the option of electing 

an HLDT/MDPV alternative phase-in 

that meets the 500% criteria, including 

the 100% criteria for model years 2012 

and earlier, as proposed. However, 

based upon comments received, we are 

revising this provision to allow 

additional flexibilities. The comments 

pointed out that such a requirement 

would pose significant hardship for 

limited-line manufacturers who produce 

only a narrow range of HLDTs/MDPVs. 

For example, a manufacturer who only 

sells one configuration in the HLDT/ 

MDPV category would not have the 

option of certifying only 25% of these 

vehicles in 2012. To meet our proposed 

criteria, that manufacturer would have 

to ensure that the model is fully 

compliant in 2012 (i.e., 100% of their 

HLDTs/MDPVs), eliminating any 

flexibility for these manufacturers. To 

address this concern, we are allowing 

HLDT/MDPV manufacturers the 

additional option of employing a phasein not meeting the early year 

requirement (sum of 100 in 2012) as 

long as their full phase-in is accelerated. 

Under this option, we are requiring only 

that the full alternative phase-in 

equation may meet or exceed 600% for 

HLDTs/MDPVs. We believe this will 

still yield environmental benefits as 

quickly as possible, while not putting an 

unreasonable burden on limited-line 

manufacturers of HLDTs/MDPVs. 

Manufacturers with limited HLDT/ 

MDPV product offerings will still 

achieve 100 percent phase-in of the 

HLDTs/MDPVs before the end of the 

phase-in schedule in 2015. For example, 

a manufacturer that only has one HLDT/ 

MDPV family and achieves 100% phasein in 2013 would have a sum of 600% 

in the equation: 

(6 × 0) + (5 × 0) + (4 × 0) + (3 × 100%) 

+ (2 × 100%) + (1 × 100%) = 600% 

As noted above, phase-in schedules, 

in general, add little flexibility for 

manufacturers with limited product 

offerings because a manufacturer with 

only one or two test groups cannot take 

full advantage of a 25/50/75/100 percent 

or similar phase-in. Therefore, 

consistent with our proposal which 

reflected the recommendations of the 

Small Advocacy Review Panel (SBAR 

Panel), which we discuss in more detail 

later in section V.E, manufacturers 

meeting EPA’s definition of ‘‘small 

volume manufacturer’’ will be exempt 

from the phase-in schedules and will be 

required simply to comply with the 

final 100% compliance requirement. 

This provision will only apply to small 

volume manufacturers and not to small 

test groups of larger manufacturers. 

5. Certification Levels 

Manufacturers typically certify 

groupings of vehicles called durability 

groups and test groups, and they have 

some discretion on what vehicle models 

are placed in each group. A durability 

group is the basic classification used by 

manufacturers to group vehicles to 

demonstrate durability and to predict 

deterioration. A test group is a basic 

classification within a durability group 

used to demonstrate compliance with 

FTP 75 °F standards.149 For Cold CO, 

manufacturers certify on a durability 

group basis, whereas for 75 °F FTP 

testing, manufacturers certify on a test 

group basis. In keeping with the current 

cold CO standards, we are requiring 

testing on a durability group basis for 

the cold temperature NMHC standard, 

as proposed (see 71 FR 15850). 

Manufacturers will have the option of 

certifying on the smaller test group 

basis, as is allowed under current cold 

CO standards. Testing on a test group 

basis will require more tests to be run 

by manufacturers but may provide them 

with more flexibility within the 

averaging program. In either case, the 

worst-case vehicle within the group 

from an NMHC emissions standpoint 

must be tested for certification. 

For the new standard (and consistent 

with certification for most section 202 

standards), manufacturers will declare a 

family emission limit (FEL) for each 

group either at, above, or below the fleet 

averaging standard. The FEL must be 

based on the certification NMHC level, 

including deterioration factor, plus the 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8467 

compliance margin manufacturers feel 

is needed to ensure in-use compliance. 

The FEL becomes the standard for each 

group, and each group could have a 

different FEL so long as the projected 

sales-weighted average level met the 

fleet average standard at time of 

certification. Like the standard, the FEL 

will be set at one significant digit to the 

right of the decimal point. 

Manufacturers will compute a salesweighted average for the NMHC 

emissions at the end of the model year 

and then determine credits generated or 

needed based on how much the average 

is above or below the standard. 

One commenter questioned if the FEL 

approach would interfere with the Tier 

2 program, which uses bins rather than 

FELs. We do not believe that the two 

approaches create a conflict because 

compliance with Tier 2 and the cold 

temperature standards operate 

independent of one another. Tier 2 

standards and bins are not a factor when 

manufacturers demonstrate compliance 

with the cold temperature standards. 

6. Credit Program 

As described above, we are finalizing 

proposed provisions allowing 

manufacturers to average the FELs for 

NMHC emissions by sales of their 

vehicles and comply with a corporate 

average NMHC standard (see 71 FR 

15850). In addition, we are finalizing, as 

proposed, banking and trading 

provisions: when a manufacturer’s 

average NMHC emissions from vehicles 

certified and sold falls below the 

corporate average standard, the 

manufacturer may generate credits that 

it could save for later use (banking) or 

transfer to another manufacturer 

(trading). Manufacturers must consume 

any credits if their corporate average 

NMHC emissions were above the 

applicable standard for the weight class. 

As proposed, credits may be 

generated prior to, during, and after the 

phase-in period. Manufacturers could 

certify LDVs/LLDTs to standards as 

early as the 2008 model year (2010 for 

HLDTs/MDPVs) and receive early 

NMHC credits for their efforts. They 

could use credits generated under these 

‘‘early banking’’ provisions after the 

phase-in begins in 2010 (2012 for 

HLDTs/MDPVs). 

One organization opposed the use of 

credits from one weight class to offset 

debits in another weight class. However, 

EPA views the averaging, banking, and 

trading (ABT) provisions as an 

important element in setting emission 

standards reflecting the greatest degree 

of emission reduction achievable, 

considering factors including cost and 

lead time. If there are vehicles that will 

be particularly costly or have a 

particularly hard time coming into 

compliance with the standard, the ABT 

program allows a manufacturer to adjust 

the compliance schedule accordingly, 

without special delays or exceptions 

having to be written into the rule. This 

is an important flexibility especially 

given the current uncertainty regarding 

optimal technology strategies for any 

given vehicle line. In these 

circumstances, ABT allows us to 

consider a more stringent emission 

standard than might otherwise be 

achievable under the Clean Air Act, 

since ABT reduces the cost and 

improves the technological feasibility of 

achieving the standard. By enhancing 

the technological feasibility and costeffectiveness of the new standard, ABT 

allows the standard to be attainable 

earlier than might otherwise be possible. 

Also see, e.g., 69 FR 38996–97, (June 19, 

2004), which discusses an ABT program 

for nonroad diesel engines, which 

allows for use of credits across engine 

families. This type of credit use can be 

important in enhancing standards’

overall technical feasibility, costeffectiveness, and pace of 

implementation. 

a. How Credits Are Calculated 

As proposed, the corporate average for 

each weight class will be calculated by 

computing a sales-weighted average of 

the FEL NMHC levels to which each 

group was certified. As discussed above, 

manufacturers will group vehicles into 

durability groups or test groups and 

establish an FEL for each group. This 

FEL becomes the standard for that 

group. Consistent with FEL practices in 

other vehicle standards, manufacturers 

may opt to select an FEL above the test 

level. The FEL will be used in 

calculating credits. The number of 

credits or debits will then be 

determined using the following 

equation: 

Credits or Debits = (Standard ¥ Salesweighted average of FELs to nearest 

tenth) × Actual Sales 

If a manufacturer’s average was below 

the 0.3 g/mi corporate average standard 

for LDVs/LDTs (below 0.5 g/mi for 

HLDTs/MDPVs), credits would be 

generated. These credits could then be 

used in a future model year when its 

average NMHC might exceed the 0.3 or 

the 0.5 standard. Conversely, if the 

manufacturer’s fleet average was above 

the corporate average standard, banked 

credits could offset the difference, or 

credits could be purchased from another 

manufacturer. 

b. Credits Earned Prior to Primary 

Phase-In Schedule 

As proposed, we are finalizing 

provisions allowing manufacturers to 

earn early emissions credits if they 

introduce vehicles that comply with the 

new standards early and the corporate 

average of those vehicles is below the 

applicable standard. Early credits could 

be earned starting in model year 2008 

for vehicles meeting the 0.3 g/mile 

standard and in 2010 for vehicles 

meeting the 0.5 g/mile standard. These 

emissions credits generated before the 

start of the phase-in could be used both 

during and after the phase-in period and 

have all the same properties as credits 

generated by vehicles subject to the 

primary phase-in schedule. As 

mentioned in section V.B.4.b above, we 

are also finalizing a provision that 

allows manufacturers to apply for an 

alternative phase-in schedule for 

vehicles that are introduced early. The 

alternative phase-in and early credits 

provisions would operate independent 

of one another. 

c. How Credits Can Be Used 

A manufacturer can use credits in any 

future year when its corporate average is 

above the standard, or it can trade 

(transfer) the credits to other 

manufacturers. Because of separate sets 

of standards for the different weight 

categories, we are finalizing as proposed 

that manufacturers compute their 

corporate NMHC averages separately for 

LDV/LLDTs and HLDTs/MDPVs. Credit 

exchanges between LDVs/LLDTs and 

HLDTs/MDPVs will be allowed. This 

will provide added flexibility for fullerline manufacturers who may have the 

greatest challenge in meeting the new 

standards due to their wide disparity of 

vehicle types/weights and emissions 

levels. 

d. Discounting and Unlimited Life 

Credits will allow manufacturers a 

way to address unexpected shifts in 

their sales mix. The NMHC emission 

standards in this program are quite 

stringent and do not present easy 

opportunities to generate credits. 

Therefore, we will not discount unused 

credits. Further, the degree to which 

manufacturers invest the resources to 

achieve extra NMHC reductions 

provides true value to the manufacturer 

and to the environment. We do not want 

to take measures to reduce the incentive 

for manufacturers to bank credits, nor 

do we want to take measures to 

encourage unnecessary credit use. 

Consequently, NMHC credits will not 

have a credit life limit. However, credits 

may only be used to offset deficits 


pwalker on PROD1PC71 with RULES_2
8468 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

150 In this preamble, we use the term flex fuel 

vehicle (FFV) to mean a vehicle capable of 

operating on two or more different fuel types, either 

separately or simultaneously. Most FFVs available 

today run on gasoline and ethanol mixtures. EPA 

regulations use the term ‘‘multi-fuel vehicle’’ when 

referring to these vehicles. 

151E85 is a fuel mixture consisting of 85% 

ethanol and 15% gasoline. 

152 ‘‘Fuel Economy Labeling of Motor Vehicles; 

Revisions to Improve Calculations of Fuel Economy 

Estimates,’’ Final Rule, 71 FR 77872, December 27, 

2006. 

153E85 is a fuel mixture consisting of 85% 

ethanol and 15% gasoline typical of a summer 

blend of an ethanol based alternative fuel. 

accrued with respect to the new 0.3/0.5 

g/mile cold temperature standards, and 

cannot be used in Tier 2 or other 

programs. 

e. Deficits Can Be Carried Forward 

When a manufacturer has an NMHC 

deficit at the end of a model year—that 

is, its corporate average NMHC level is 

above the required corporate average 

NMHC standard—the manufacturer will 

be allowed to carry that deficit forward 

into the next model year. To prevent 

deficits from being carried forward 

indefinitely, we are finalizing, as 

proposed, that manufacturers will not 

be permitted to run a deficit for two 

years in a row. A deficit carry-forward 

may only occur after the manufacturer 

used any banked credits. If the deficit 

still exists and the manufacturer 

chooses not to, or is unable to, purchase 

credits, the deficit will be carried over. 

At the end of that next model year, the 

deficit must be covered with an 

appropriate number of credits that the 

manufacturer generated or purchased. 

Any remaining deficit means that the 

manufacturer is not in compliance and 

can be subject to an enforcement action. 

We believe that it is reasonable to 

provide this flexibility to carry a deficit 

for one year given the uncertainties that 

manufacturers face with changing 

market forces and consumer 

preferences, especially during the 

introduction of new technologies. These 

uncertainties can make it hard for 

manufacturers to accurately predict 

sales trends of different vehicle models. 

f. Voluntary Heavy-Duty Vehicle Credit 

Program 

In addition to MDPV requirements in 

Tier 2, we also currently have chassisbased emissions standards for other 

complete heavy-duty vehicles (e.g., large 

pick-ups and cargo vans) above 8,500 

pound GVWR. However, these 

standards do not include cold 

temperature CO standards. As noted 

below in section V.B.6.a, we did not 

propose to apply cold temperature 

NMHC standards to heavy-duty gasoline 

vehicles due to a current lack of 

emissions data on which to base such 

standards. Accordingly, the final rule 

does not contain any provisions for 

heavy-duty vehicle standards or credit 

program. 

Our proposal discussed a few ideas 

for voluntary approaches where 

manufacturers could earn credits by 

including heavy-duty gasoline vehicles 

in the program. We only received one 

comment regarding a voluntary credit 

program for heavy-duty gasoline 

vehicles. The organization that 

submitted the comment opposed the 

creation of NMHC credits applicable to 

other vehicle categories generated by 

reductions from heavy-duty vehicles. In 

light of this lack of support, as well as 

insufficient data, we are not including a 

heavy-duty standard or credit program 

at this time. We plan to revisit the need 

for and feasibility of standards as data 

become available. 

7. Additional Vehicle Cold Temperature 

Standard Provisions 

a. Applicability 

As proposed, the new cold 

temperature NMHC standards apply to 

all gasoline-fueled light-duty vehicles 

and MDPVs sold nationwide. The cold 

NMHC standards do not apply to diesel 

vehicles, alternative-fueled vehicles, or 

to the non-gasoline portion of flex fuel 

vehicles (FFVs).150 We are finalizing as 

proposed that FFVs will still require 

certification to the applicable cold 

NMHC standard, though only when 

operated on gasoline. FFVs operating on 

ethanol are not subject to the cold 

standard. When manufacturers submit 

their application for certification for 

FFVs (such as FFVs that can run on 

gasoline or E85 151), the FFVs must have 

been tested using gasoline. The 

application must also include a 

statement that either confirms the same 

control strategies used with gasoline 

will be used when operating on ethanol, 

or that identifies any differences as an 

Auxiliary Emission Control Device 

(AECD). Again, dedicated alternativefueled vehicles are not covered. 

We requested comment on standards 

for vehicles operating on fuels other 

than gasoline. Vehicle manufacturers 

agreed that the cold NMHC standards 

should not apply to diesels and 

alternative fuel vehicles, stating that the 

standard would capture all but a very 

small percentage of air toxics emissions 

from the light-duty onroad fleet. We also 

received comments in support of a 

standard for diesel vehicles. One 

organization argued that the EPA must 

exercise its authority to gather the 

necessary data and establish a cold 

temperature NMHC standard for diesel, 

alternative fuel, and FFVs, or explain 

why such standards are not needed. 

A comprehensive assessment of 

appropriate standards for diesel vehicles 

will require a significant amount of 

investigation and analysis of issues such 

as feasibility and costs. While we have 

significant amounts of data on which to 

base our final standards for light-duty 

gasoline vehicles, we have very little 

data for light-duty diesels. Currently, 

diesel vehicles are not subject to the 

cold CO standard, so, unlike the 

situation for gasoline motor vehicles 

where some certification data under 

cold temperature conditions are 

available, there is very limited data 

available on diesel cold temperature 

emissions. Also, many manufacturers 

are currently in the process of 

developing their diesel product 

offerings and the cold temperature 

performance of these vehicles cannot 

yet be evaluated. 

Therefore, at this time, the cold 

NMHC standards will not apply to lightduty diesel vehicles. We will continue 

to evaluate data for these vehicles as 

they enter the fleet and will reconsider 

the need for standards. We have 

adopted cold temperature FTP testing 

for diesels as part of the Fuel Economy 

Labeling rulemaking, including NMHC 

measurement.152 These testing data 

would allow us to assess diesel NMHC 

certification levels over time. There are 

sound engineering reasons, however, to 

expect cold NMHC emissions for diesel 

vehicles to be as low as or even lower 

than those required for gasoline vehicles 

in the finalized standards. This is 

because diesel engines operate with 

leaner air-fuel mixtures compared to 

gasoline engines. Therefore diesels have 

fewer engine-out NMHC emissions due 

to the abundance of oxygen and more 

complete combustion. A very limited 

amount of confidential manufacturerfurnished information is consistent with 

this engineering hypothesis. 

With respect to FFVs, although FFVs 

are currently required to certify to the 

cold CO standards at 20 °F while 

operating on gasoline, there is no cold 

testing requirement for these vehicles 

while operating on the alternative fuel 

at 20 °F. There are little data upon 

which to evaluate NMHC emissions 

when operating on alternative fuels at 

cold temperatures. For FFVs operating 

on E85,153 it is difficult to develop a 

reasonable standard due to a lack of fuel 

specifications, testing protocols, and test 

data for the 20 °F cold CO cycle. 

Standards reflecting use of other fuels 

such as methanol and natural gas pose 

similar uncertainty. As in the case of 

diesels, it will take time to gain an 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8469 

154 ‘‘Flex Fuel Vehicles (FFVs) VOC/PM Cold 

Temperature Characterization When Operating on 

Ethanol (E10, E70, E85)’’ February, 2007. 

155E70 is a fuel mixture consisting of 70% 

ethanol and 30% gasoline typical of a winter blend 

of an ethanol based alternative fuel. 156 40 CFR 86.1803–01. 157 40 CFR 86.1805–04. 

understanding of these other 

technologies in sufficient detail to 

support a rulemaking. Therefore, as 

proposed, we are not adopting a cold 

NMHC testing requirement for FFVs 

while operating on the non-gasoline fuel 

or for alternative fuel vehicles under 

this final rulemaking. However, for 

FFVs, we are requiring confirmation 

that emission controls used when 

operating on gasoline are also used 

when operating on the non-gasoline fuel 

unless a reasonable exception why they 

cannot be used is declared. We will 

continue to investigate these other 

technologies. 

Between the proposed rule and 

today’s final rule, we conducted an 

initial emissions testing program on a 

limited number of FFVs operated on 

several blends of gasoline and ethanol at 

normal test temperatures and 20 °F. 154

These vehicles were tested on summer 

gasoline and E85 under normal test 

temperatures and on winter gasoline 

and E70 155 at 20 °F. At 20 °F, HC 

emissions were significantly higher with 

E70 fuel than with gasoline, with the HC 

emissions largely consisting of 

unburned ethanol generated during the 

cold start. The reason for the elevated 

HC emission levels is that during cold 

starts, ethanol, which is an MSAT, does 

not readily burn in the combustion 

chamber due to its higher boiling point 

(approximately 180 °F). FFVs must start 

on the gasoline portion of the alternative 

fuel, which can compose as little as 

15% of the alternative fuel. Ethanol 

emissions are further increased at colder 

temperatures because the lower engine 

start temperature will require an 

increasing amount of the fuel mixture to 

start the vehicle and subsequently more 

unburned ethanol can escape the 

combustion process. However, the 

testing also indicates significantly lower 

benzene emission levels for FFVs when 

operating on the high ethanol blends. 

Benzene was 30% to 90% lower on E85 

and approximately 30% lower on E70 

compared to the levels when run on 

gasoline. Acetaldehyde emissions are 

significantly higher with E85 relative to 

emissions from gasoline-fueled vehicles, 

since it is a byproduct of partial (i.e., 

incomplete) ethanol combustion. In 

addition, some other VOC-based toxics 

emissions were generally lower with the 

vehicles running on E85 and E70 

compared with gasoline. 

There are many issues that must be 

resolved before we are able to establish 

a cold temperature standard for FFVs 

when run on E85 (and E70 at cold 

temperatures). These include feasibility 

(i.e., levels that are technically 

achievable), cost, test procedures, test 

fuel specifications and the appropriate 

form of the standard. For example, 

because much of the VOC emissions 

from FFVs operating on the high ethanol 

blends at cold temperatures is unburned 

ethanol, we may need to consider 

whether higher NMHC level would be 

justified or whether an NMHC minus 

ethanol standard would have merit. We 

plan to address these issues as part of 

a broader assessment of E85 emissions 

regulatory issues in the future. 

One organization commented that 

EPA must establish cold temperature 

standards for heavy-duty vehicles. Since 

there is no 20 °F cold standard for 

heavy-duty vehicles, we have no data 

for heavy-duty gasoline-fueled vehicles, 

but we would expect a range of 

emissions performance similar to that of 

lighter gasoline-fueled trucks. Due to the 

lack of test data on which to base 

feasibility and cost analyses, we did not 

propose cold temperature NMHC 

standards for these vehicles. As 

mentioned previously, we plan to revisit 

this issue when sufficient data become 

available. 

b. Useful Life 

We are adopting the proposed 

requirement that the new cold 

temperature standards must be met over 

the full useful life of the vehicle, 

consistent with other emissions 

standards for Tier 2 vehicles. The 

‘‘useful life’’ of a vehicle means the 

period of use or time during which an 

emission standard applies to light-duty 

vehicles and light-duty trucks.156 Given 

that we expect that manufacturers will 

make calibration or software changes to 

existing Tier 2 technologies, it is 

reasonable for the new cold temperature 

standards to have the same useful life as 

the Tier 2 standards. For LDV/LLDT, the 

full useful life values will be 120,000 

miles or 10 years, whichever comes 

first, and for HLDT/MDPV, full useful 

life is 120,000 miles or 11 years, 

whichever comes first.157 We did not 

receive any comments regarding these 

useful life provisions. 

c. High Altitude 

We do not expect emissions to be 

significantly different at high altitude 

due to the use of common emissions 

control calibrations. Limited data 

submitted by a manufacturer suggest 

that FTP emissions performance at high 

altitude generally follows sea level 

performance. Furthermore, there are 

very limited cold temperature testing 

facilities at high altitudes. Therefore, 

under normal circumstances, 

manufacturers will not be required to 

submit vehicle test data for high 

altitude. Instead, manufacturers will be 

required to submit an engineering 

evaluation indicating that common 

calibration approaches will be utilized 

at high altitude. Any deviation from sea 

level in emissions control practices 

must be included in the auxiliary 

emission control device (AECD) 

descriptions submitted by 

manufacturers at certification. In 

addition, any AECD specific to high 

altitude must include engineering 

emission data for EPA evaluation to 

quantify any emission impact and 

validity of the AECD. We did not 

receive any comments regarding these 

provisions relating to altitude. 

d. In-Use Standards for Vehicles 

Produced During Phase-In 

As proposed, we are finalizing 

provisions for an in-use standard that is 

0.1 g/mile higher than the certification 

FEL for any given test group for a 

limited number of model years. For 

example, a test group with a 0.2 g/mile 

FEL would have an in-use standard of 

0.3 g/mile. This would not change the 

FEL or averaging approaches and would 

only apply in cases where EPA tests 

vehicles in-use to ensure emissions 

compliance. Tables V.B–3 and V.B–4 

provide the finalized schedule for the 

availability of the in-use standards. 


pwalker on PROD1PC71 with RULES_2
8470 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

158 ‘‘Control of Air Pollution from New Motor 

Vehicles: Tier 2 Motor Vehicle Emissions Standards 

and Gasoline Sulfur Control Requirements,’’ Final 

Rule, 65 FR 6796, February 10, 2000. 

159 ‘‘Control of Air Pollution from New Motor 

Vehicles: Tier 2 Motor Vehicle Emissions Standards 

and Gasoline Sulfur Control Requirements,’’ Final 

Rule, 65 FR 6797, February 10, 2000. 

TABLE V.B–3.—SCHEDULE FOR IN-USE STANDARDS FOR LDVS/LLDTS

Model year of introduction 2008 2009 2010 2011 2012 2013 

Models years that the in-use standard is available for carry-over test groups ............... 2008 

2009 

2010 

2011 

2009 

2010 

2011 

2012 

2010 

2011 

2012 

2013 

2011 

2012 

2013 

2012 

2013 

2014 

2013 

2014 

TABLE V.B–4.—SCHEDULE FOR IN-USE STANDARDS FOR HLDVS/MDPVS

Model year of introduction 2010 2011 2012 2013 2014 2015 

Models years that the in-use standard is available for carry-over test groups ............... 2010 

2011 

2012 

2013 

2011 

2012 

2013 

2014 

2012 

2013 

2014 

2015 

2013 

2014 

2015 

2014 

2015 

2016 

2015 

2016 

This approach is similar to the one 

adopted in the Tier 2 rulemaking.158 As 

we have indicated, the standards we are 

finalizing will be more challenging for 

some vehicles than for others. With any 

new technology, or even with new 

calibrations of existing technology, there 

are risks of in-use compliance problems 

that may not appear in the certification 

process. In-use compliance concerns 

may discourage manufacturers from 

applying new calibrations or 

technologies. Thus, we believe it is 

appropriate, for the first few years, for 

those vehicles most likely to require the 

greatest applications of effort to provide 

assurance to the manufacturers that they 

will not face recall if they exceed 

standards in use by a specified amount. 

The in-use standards will be available 

for the first few model years of sales 

after a test group meeting the new 

standards is introduced, according to a 

schedule that provides more years for 

test groups introduced earlier in the 

phase-in. This schedule provides 

manufacturers with time to determine 

the in-use performance of vehicles and 

learn from the earliest years of the 

program to help ensure that vehicles 

introduced after the phase-in period 

meet the final standards in-use. The inuse compliance margin only applies to 

carry-over models. That is, once a test 

group is certified to the new standards, 

it will be carried over to future model 

years. 

We received one comment on the 

provisions for an interim in-use 

standard. A manufacturer commented 

that the EPA should consider allowing 

an interim in-use increment greater than 

0.1 g/mi to account for known 

variability in in-use conditions and 

vehicle technologies. However, we did 

not receive any data that supported the 

manufacturer’s assertion, nor any 

indication of an acceptable increase 

beyond the 0.1 g/mi increment. 

Furthermore, no other manufacturers 

commented on this provision. We 

believe the 0.1 g/mi increment is 

sufficient and that anything greater may 

result in a reduction of emission 

control. Therefore, the interim in-use 

standard is finalized as proposed. 

8. Monitoring and Enforcement 

As proposed, manufacturers must 

either report that they met the relevant 

corporate average standard in their 

annual reports to the Agency, or show 

via the use of credits that they have 

offset any exceedance of the corporate 

average standard. Manufacturers must 

also report their credit balances or 

deficits. EPA will monitor the program. 

As in Tier 2, the averaging, banking 

and trading program will be enforced 

through the certificate of conformity 

that manufacturers must obtain in order 

to introduce any regulated vehicles into 

commerce.159 The certificate for each 

test group will require all vehicles to 

meet the emissions level to which the 

vehicles were certified, and will be 

conditioned upon the manufacturer 

meeting the corporate average standard 

within the required time frame. If a 

manufacturer fails to meet this 

condition, the vehicles causing the 

corporate average exceedance will be 

considered to be not covered by the 

certificate of conformity for that engine 

family. A manufacturer will be subject 

to penalties on an individual vehicle 

basis for sale of vehicles not covered by 

a certificate. 

EPA will review the manufacturer’s 

sales to designate the vehicles that 

caused the exceedance of the corporate 

average standard. We will designate as 

nonconforming those vehicles in those 

test groups with the highest certification 

emission values first, continuing until 

we reach a number of vehicles equal to 

the calculated number of noncomplying 

vehicles, as determined above. In a test 

group where only a portion of vehicles 

are deemed nonconforming, we will 

determine the actual nonconforming 

vehicles by counting backwards from 

the last vehicle produced in that test 

group number. Manufacturers will be 

liable for penalties for each vehicle sold 

that is not covered by a certificate. 

As proposed, we will condition 

certificates to enforce the requirements 

that manufacturers not sell credits that 

they have not generated. A 

manufacturer that transfers credits it 

does not have will create an equivalent 

negative credit balance or deficit that 

the manufacturer must make up by the 

reporting deadline for the same model 

year. A credit deficit in such cases at the 

reporting deadline will be a violation of 

the conditions under which EPA issued 

the certificate of conformity. EPA will 

identify the nonconforming vehicles in 

the same manner described above and 

nonconforming vehicles will not be 

covered by the certificate. 

In the case of a trade that resulted in 

a negative credit balance that a 

manufacturer could not cover by the 

reporting deadline for the model year in 

which the trade occurred, both the 

buyer and the seller will be liable, 

except in cases involving fraud. We 

believe that holding both parties liable 

will induce the buyer to exercise 

diligence in assuring that the seller has 

or will be able to generate appropriate 

credits and will help to ensure that 

inappropriate trades do not occur. 

We did not propose any new 

compliance monitoring activities or 

programs for vehicles. These vehicles 

will be subject to the certification 

testing provisions of the CAP2000 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8471 

160 71 FR 2810, January 17, 2006. 161 Diurnal emissions (or diurnal breathing losses) 

means evaporative emissions as a result of daily 

temperature cycles or fluctuations for successive 

days of parking in hot weather. Hot soak emissions 

(or hot soak losses) are the evaporative emissions 

from a parked vehicle immediately after turning off 

the hot engine. For the evaporative emissions test 

procedure, diurnal and hot soak emissions are 

measured in an enclosure commonly called the 

SHED (Sealed Housing for Evaporative 

Determination). 

162Larger vehicles may have greater non-fuel 

evaporative emissions, probably due to an increased 

amount of interior trim, vehicle body surface area, 

and larger tires. 

163U.S. EPA, Office of Air and Radiation, Update 

to the Accounting for the Tier 2 and Heavy-Duty 

2005/2007 Requirements in MOBILE6, EPA420–R–

03–012, September 2003. 

rule.160 We are not requiring 

manufacturer in-use testing to verify 

compliance. There is no cold CO 

manufacturer in-use testing requirement 

today (similarly, we do not require 

manufacturer in-use testing for SCO3 

standards under the Supplemental 

Federal Test Procedures (SFTP) program 

largely due to the limited availability of 

the test facilities). As noted earlier, 

manufacturers have limited cold 

temperature testing capabilities and we 

believe these facilities will be needed 

for product development and 

certification testing. However, we have 

the authority to conduct our own in-use 

testing program for exhaust emissions to 

ensure that vehicles meet standards over 

their full useful life. We will pursue 

remedial actions when substantial 

numbers of properly maintained and 

used vehicles fail any standard in-use. 

We also retain the right to conduct 

Selective Enforcement Auditing of new 

vehicles at manufacturers’ facilities. 

The use of credits will not be 

permitted to address Selective 

Enforcement Auditing or in-use testing 

failures. The enforcement of the 

averaging standard will occur through 

the vehicle’s certificate of conformity. A 

manufacturer’s certificate of conformity 

will be conditioned upon compliance 

with the averaging provisions. If a 

manufacturer failed to meet the 

corporate average standard and did not 

obtain appropriate credits to cover its 

shortfalls in that model year or in the 

subsequent model year (see deficit carry 

forward provision in section V.B.5.e.), 

then the certificate for the affected test 

groups will be void for all past, present, 

and future sales related to that 

certificate. Manufacturers will need to 

track their certification levels and sales 

unless they produced only vehicles 

certified to NMHC levels below the 

standard and did not plan to bank 

credits. We did not receive any 

comments on the provisions regarding 

Selective Enforcement Auditing or 

conditions of certification. 

C. What Evaporative Emissions 

Standards Are We Finalizing? 

We are finalizing as proposed a set of 

numerically more stringent evaporative 

emission standards for all light-duty 

vehicles, light-duty trucks, and 

medium-duty passenger vehicles. The 

standards we are finalizing are 

equivalent to California’s LEV II 

standards, and these standards are 

shown in Table V.C–1. The new 

standards represent about a 20 to 50 

percent reduction (depending on 

vehicle weight class and type of test) in 

the diurnal plus hot soak standards 

currently in place for Tier 2 vehicles.161

As with the current Tier 2 evaporative 

emission standards, the standards we 

are finalizing vary by vehicle weight 

class. The increasingly higher standards 

for heavier weight class vehicles 

account for larger vehicle sizes and fuel 

tanks (non-fuel and fuel emissions).162

TABLE V.C–1.—FINAL EVAPORATIVE EMISSION STANDARDS

[Grams of hydrocarbons per test] 

Vehicle class 3-Day diurnal 

plus hot soak 

Supplemental 

2-day diurnal 

plus hot soak 

LDVs ................................................................................................................................................................ 0.50 0.65 

LLDTs .............................................................................................................................................................. 0.65 0.85 

HLDTs .............................................................................................................................................................. 0.90 1.15 

MDPVs ............................................................................................................................................................. 1.00 1.25 

1. Current Controls and Feasibility of 

the New Standards 

As described earlier, we are reducing 

the numerical level of the evaporative 

emission standards applicable to 

diurnal and hot soak emissions from 

light-duty vehicles and trucks by about 

20 to 50 percent. These new standards 

are meant to be effectively the same as 

the evaporative emission standards in 

the California LEV II program. Although 

the new standards are numerically more 

stringent, as we explained at proposal, 

we believe they are essentially 

equivalent to the current Tier 2 

standards because of differences in 

testing requirements (see 71 FR 15854; 

also see section V.C.5 below for further 

discussion of such test differences, e.g., 

test temperatures and fuel volatilies). As 

discussed in the proposal, this view is 

supported by manufacturers and by 

current industry practices. Based on this 

understanding, we do not project 

additional VOC or air toxics reductions 

from the evaporative standards we are 

finalizing today.163 Also, we do not 

expect additional costs since we expect 

that manufacturers will continue to 

produce 50-state evaporative systems. 

Therefore, harmonizing the federal and 

California LEV–II evaporative emission 

standards will codify (i.e., lock in) the 

approach manufacturers have already 

indicated they are taking for 50-state 

evaporative systems. 

We believe this action is an important 

step to ensure that the federal standards 

reflect the lowest possible evaporative 

emissions, and it also will provide states 

with certainty that the emissions 

reductions we project to occur due to 

50-state compliance strategies will in 

fact occur. In addition, the new 

standards will assure that manufacturers 

continue to use available fuel system 

materials to minimize evaporative 

emissions. 

In the proposal, we considered but 

did not propose more stringent 

evaporative requirements contained in 

the partial zero-emission vehicle (PZEV) 

portion of California’s LEV II program. 

The LEV II program includes PZEV 

credits for vehicles that achieve near 

zero emissions (e.g., LDV evaporative 

emission standards for both the 2-day 

and 3-day diurnal plus hot soak tests are 

0.35 grams/test, which are more 

stringent than the standards finalized 

today). State and local air quality 

organizations commented that EPA 

should adopt the PZEV evaporative 

standards. In addition, they indicated 

that California Air Resources Board 

estimates the additional per vehicle cost 


pwalker on PROD1PC71 with RULES_2
8472 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

for a PZEV evaporative emission system 

to be about $10.20. They commented 

that EPA should consider the 

introduction of a similar standard for 

some vehicles. Moreover, they urged us 

to commit in the final rule to pursue 

actions to achieve further evaporative 

emission reductions in the future. 

However, auto manufacturers 

supported the proposed evaporative 

emission standards. They indicated that, 

as EPA tentatively concluded in the 

proposed rule, it would be 

inappropriate for EPA to propose more 

stringent standards. Manufacturers 

noted that PZEVs have been limited to 

a small fraction of the light-duty fleet, 

mainly small 4-cylinder passenger cars, 

and that the PZEV standard has not 

proven feasible across the light-duty 

fleet. Furthermore, it is significantly 

more costly to comply with the PZEV 

evaporative emission standard because 

of significant modifications needed to 

the evaporative emission control system 

and fuel system. Also, the auto 

manufacturers suggested that emission 

benefits, if any, of the PZEV standard 

would be minimal. 

We have decided not to set more 

stringent PZEV-equivalent evaporative 

standards at this time. The limited 

PZEV vehicles available today require 

additional evaporative emissions 

technology or hardware (e.g., 

modifications to fuel tank and 

secondary canister) beyond what will be 

needed for vehicles meeting the new 

standards that we are adopting today. 

As we described in the proposed rule, 

at this time, we need to better 

understand the evaporative system 

modifications (i.e., technology, costs, 

lead time, etc.) potentially needed 

across the vehicle fleet to meet PZEVlevel standards before we can fully 

evaluate whether it is feasible to 

consider more stringent standards. For 

example, at this point we cannot 

determine whether the PZEV 

technologies could be used fleetwide or 

on only a limited set of vehicles. Thus, 

in the near term, we lack any of the 

information necessary to determine if 

further reductions are feasible, and if 

they could be achievable considering 

cost, energy and safety issues. Moreover, 

sufficient new information or data was 

not provided from commenters on the 

proposed rule to close these gaps in our 

understanding. However, we intend to 

consider more stringent evaporative 

emission standards in the future. 

2. Evaporative Standards Timing 

As proposed, we will implement 

today’s evaporative emission standards 

in model year 2009 for LDVs/LLDTs and 

model year 2010 for HLDTs/MDPVs. 

Many manufacturers already have begun 

or completed model year 2008 

certification. Thus, model year 2009 is 

the earliest practical start date of new 

standards for LDVs/LLDTs. For HLDTs/ 

MDPVs, the phase-in of the existing Tier 

2 evaporative emission standards ends 

in model year 2009. Thus, the model 

year 2010 is the earliest start date 

possible for HLDTs/MDPVs. As 

discussed earlier, since we believe that 

manufacturers already meet these 

standards, there is no need for 

additional lead time beyond the 

implementation dates we are finalizing. 

3. Timing for Flex Fuel Vehicles 

For FFVs, the phase-in schedule we 

are finalizing for the new evaporative 

standards is somewhat different than 

the phase-in schedule we proposed for 

these vehicles. In the proposal, we 

recognized that manufacturers will need 

a few additional years of lead time to 

adjust their evaporative systems to 

comply with the new evaporative 

emission standards for FFVs operating 

on the non-gasoline fuel, typically E85 

(see 71 FR 15855). The existing 

regulations require that FFVs or E85 

vehicles (vehicles designed to operate 

on fuel that is 85 percent ethanol and 15 

percent gasoline) certify on both 

gasoline and E10 (E10 is a fuel 

containing 10 percent ethanol and 90 

percent gasoline) for the evaporative 

emissions test procedure. E10 is 

considered the ‘‘worst case’’ test fuel for 

evaporative emissions, because it is the 

ethanol blend that results in greater 

evaporative emissions. Thus, E10 is the 

evaporative certification test fuel for E85 

vehicles. Thus far, only a few FFV 

systems have been certified to California 

LEV–II standards on E10 fuel. Vehicles 

not certified with E10 in California are 

sold as gasoline-fueled only vehicles 

rather than FFVs. Some manufacturers 

are still developing FFVs for future 

introduction and the evaporative control 

systems in some cases have not been 

fully field tested and certified on the 

E10 fuel. Therefore, certifying FFVs to 

the new standards on the E10 fuel 

(which is required by Tier 2) represents 

a new requirement for manufacturers. 

We proposed that FFVs would need to 

meet the new evaporative emission 

certification standards on the nongasoline fuel beginning in the fourth 

year of the program—2012 for LDVs/ 

LLDTs and 2013 for HLDTs/MDPVs. We 

proposed that the evaporative emission 

standards would be implemented in 

2009 for LDVs/LLDTs and 2010 for 

HLDTs/MDPVs for the FFVs when run 

on gasoline (along with gasoline 

vehicles that are not flex fuel). At the 

time of proposal, we believed this 

additional three years of lead time 

would provide sufficient time for 

manufacturers to make adjustments to 

their new evaporative systems for FFVs, 

which are limited product lines. 

Auto manufacturers commented that 

additional lead time and flexibility 

beyond that proposed is needed for the 

non-gasoline portion of FFVs. 

Manufacturers requested the following 

revisions to the proposed timing of the 

new evaporative emission standards for 

the non-gasoline portion of FFVs: 

—combine the LDV/LLDT and HLDT/ 

MDPV fleets, 

—implement the phase-in of this 

combined fleet starting in 2013, and 

—permit a three-year phase-in of 30 

percent/60 percent/100 percent for 

this combined fleet. 

The auto industry indicated that for 

many manufacturers of FFVs, the new 

standards are considered new emission 

requirements for their FFVs. This is 

unlike the situation for gasoline 

vehicles, where EPA intends to codify 

what is already being done in practice 

rather than imposing any new 

requirements on gasoline vehicles. For 

most manufacturers of FFVs, there is no 

demonstrated capability at this time to 

meet the new evaporative emission 

standards from which to begin planning 

compliance to the new standards. Also, 

manufacturers expressed that there are 

important enough differences between 

fuels in the gasoline and FFVs (or the 

non-gasoline portion of FFVs) that 

independent evaluations of FFVs on 

gasoline and the non-gasoline fuel are 

warranted. 

In addition, auto manufacturers stated 

that as interest in alternative fuels has 

increased due to energy supply 

concerns, they are suddenly considering 

widespread introduction of FFV models, 

across entire product lines. What was at 

first a limited offering of a few models 

may become more offerings across a 

manufacturer’s full line of products in 

the timeframe of this rulemaking. The 

auto industry argues that these new 

developments justify lead time 

provisions commensurate with those 

when a new emission requirement 

applies across a manufacturer’s lightduty product line. 

They also indicated that model 

renewals provide the most cost-effective 

timing for the introduction of new 

emissions capability to meet the new 

standards. At this time, some 

manufacturers plan model renewals for 

multiple vehicle lines from model years 

2013 to 2015. Allowing a three-year 

phase-in for the non-gasoline portion of 

FFVs provides more opportunities for 

scheduled model renewals to coincide 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8473 

164California Air Resources Board, ‘‘LEV II’’ and 

‘‘CAP 2000’’ Amendments to the California Exhaust 

and Evaporative Emission Standards and Test 

Procedures for Passenger Cars, Light-Duty Trucks 

and Medium-Duty Vehicles, and to the Evaporative 

Emission Requirements for Heavy-Duty Vehicles, 

Final Statement of Reasons, September 1999. 

165 1.75 times the 3-day diurnal plus hot soak and 

2-day diurnal plus hot soak standards. 

166For example, evaporative families first 

certified to LEV II standards in the 2005 model year 

shall meet in-use standards of 1.75 times the 

evaporative certification standards for 2005, 2006, 

and 2007 model year vehicles. 

167For example, evaporative families first 

certified to the new LDV/LLDT evaporative 

emission standards in the 2011 model year will be 

required to meet the Tier 2 LDV/LLDT evaporative 

emission standards in-use for 2011, 2012, and 2013 

model year vehicles (applying Tier 2 standards inuse will be limited to the first three years after 

introduction of a vehicle), and 2014 and later model 

year vehicles of such evaporative families will be 

required to meet the new LDV/LLDT evaporative 

emission standards in-use. 

with implementation dates for the new 

standards. Planning, engineering, and 

development activities needed to meet 

these new standards can be 

incorporated into the model redesign 

activities. 

We believe that many of the concerns 

presented by manufacturers supporting 

additional lead time are valid. Most 

manufacturers have less experience 

meeting the new standards on the nongasoline portion of FFVs compared to 

gasoline vehicles. The new standards 

will apply beginning in model year 2012 

with a three-year phase-in, 30/60/100 

percent, for LDVs/LLDTs and HLDTs/ 

MDPVs grouped together (see Table 

V.C–2). Although auto manufacturers 

requested a start date of 2013 for a 

combined fleet, we believe the 

additional flexibilities we are providing 

(three-year phase-in and grouping 

LDVs/LLDTs and HLDTs/MDPVs 

together) is sufficient flexibility for the 

production of FFVs. There is enough 

time between now and the 

implementation dates or phase-in 

schedule (2012 through 2014) for 

manufacturers to coordinate model 

renewals with the introduction of 

broader product offerings of FFVs. See 

the Summary and Analysis of 

Comments of this rulemaking for further 

discussion of comments and our 

responses to comments. 

TABLE V.C–2.—PHASE-IN SCHEDULE FOR NON-GASOLINE PORTION OF FFVS: EVAPORATIVE EMISSION STANDARDS* 

Vehicle GVWR (Category) 2012 2013 2014 

≤6000 lbs (LDVs/LLDTs) and > 6000 lbs (HLDTs and MDPVs) ................................................ 30% 60% 100% 

*Phase-in schedules are grouped together for LDVs/LLDTs and HLDTs/MDPVs. 

Provisions for in-use evaporative 

emission standards similar to those 

described below in section V.C.4 do not 

apply to the non-gasoline portion of 

FFVs. We believe that three to five 

additional years to prepare vehicles (or 

evaporative families) to meet the 

certification standards, and to 

simultaneously make vehicle 

adjustments from the federal in-use 

experience of other vehicles (including 

those that are not FFVs) is sufficient to 

resolve any issues for FFVs. Also, we 

did not receive comments requesting 

additional flexibility beyond the phasein schedule for certification vehicles 

discussed earlier. Therefore, we are 

finalizing our proposal not to provide 

additional in-use compliance margin to 

FFVs. According to the phase-in 

schedule for a combined fleet in Table 

V.C–2, the evaporative emission 

standards will apply both for 

certification and in-use beginning in 

2012 for LDVs/LLDTs and HLDTs/ 

MDPVs. 

4. In-Use Evaporative Emission 

Standards 

As described earlier in this section, 

we are adopting evaporative emission 

standards that are equivalent to 

California’s LEV II standards. Currently, 

the Tier 2 evaporative emission 

standards are the same for certification 

and in-use vehicles. However, the 

California LEV II program permits 

manufacturers to meet less stringent 

standards in-use for a short time in 

order to account for potential variability 

in-use during the initial years of the 

program when technical issues are most 

likely to arise.164 The LEV II program 

specifies that in-use evaporative 

emission standards of 1.75 times the 

certification standards will apply for the 

first three model years after an 

evaporative family is first certified to 

the LEV II standards (only for vehicles 

introduced prior to model year 2007, the 

year after 100 percent phase-in).165 166

An interim three-year period was 

considered sufficient to accommodate 

any technical issues that may arise. 

Federal in-use conditions may raise 

unique issues (e.g., salt/ice exposure) for 

evaporative systems certified to the new 

standards (which are equivalent to the 

LEV II standards), and thus, we will 

adopt a similar, interim in-use 

compliance provision for vehicles 

subject to these new federal standards. 

As with the LEV II program, this 

provision will enable manufacturers to 

make adjustments for unforeseen 

problems that may occur in-use during 

the first three years of a new evaporative 

family. We believe that a three-year 

period is enough time to resolve these 

problems, because it allows 

manufacturers to gain real world 

experience and to make adjustments to 

a vehicle within a typical product cycle. 

Depending on the vehicle weight class 

and type of test, the Tier 2 certification 

standards are 1.3 to 1.9 times the LEV 

II certification standards. On average the 

Tier 2 standards are 1.51 times the LEV 

II certification standards. Thus, to 

maintain the same level of stringency 

for the in-use evaporative emission 

standards provided by the Tier 2 

program, we will apply the Tier 2 

standards in-use for only the first three 

model years after an evaporative family 

is first certified under today’s new 

standards, instead of using the LEV II 

1.75 multiplier approach described 

above. Since the new evaporative 

emission certification standards 

(equivalent to LEV II standards) will be 

implemented in model year 2009 for 

LDVs/LLDTs and model year 2010 for 

HLDTs/MDPVs, these same certification 

standards will apply in-use beginning in 

model year 2012 for LDVs/LLDTs and 

model year 2013 for HLDTs/MDPVs.167

The schedule for in-use evaporative 

emissions standards are shown in 

Tables V.C.–3 and V.C.–4 below. 

TABLE V.C–3.—SCHEDULE FOR IN-USE EVAPORATIVE EMISSION STANDARDS FOR LDVS/LLDTS

Model year of introduction 2009 2010 2011 

Models Years That Tier 2 2009 2010 2011 


pwalker on PROD1PC71 with RULES_2
8474 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

168Manufacturers are required to develop 

deterioration factors using a fuel that contains the 

highest legal quantity of ethanol available in the 

U.S. 

169Running loss emissions means evaporative 

emissions as a result of sustained vehicle operation 

(average trip in an urban area) on a hot day. The 

running loss test requirement is part of the 3-day 

diurnal plus hot soak test sequence. 

170Currently, EPA may require comparative data 

from both federal and California tests. 

171See Sierra Club v. EPA, 325 F. 3d at 480 (EPA 

can reasonably determine that no further reductions 

in MSATs are presently achievable due to 

uncertainties created by other recently promulgated 

regulatory provisions applicable to the same 

vehicles). 

TABLE V.C–3.—SCHEDULE FOR IN-USE EVAPORATIVE EMISSION STANDARDS FOR LDVS/LLDTS—Continued 

Model year of introduction 2009 2010 2011 

Standards Apply to In-use Vehicles ............................................................................................ 2010 2011 2012 

2011 2012 2013 

TABLE V.C–4.—SCHEDULE FOR IN-USE EVAPORATIVE EMISSION STANDARDS FOR HLDTS/MDPVS

Model year of introduction 2010 2011 2012 

Models Years That Tier 2 Standards Apply to In-use Vehicles .................................................. 2010 2011 2012 

2011 2012 2013 

2012 2013 2014 

5. Existing Differences Between 

California and Federal Evaporative 

Emission Test Procedures 

As described above, the levels of the 

California LEV II evaporative emission 

standards are seemingly more stringent 

than EPA’s Tier 2 standards, but due to 

differences in California and EPA 

evaporative test requirements, EPA and 

most manufacturers view the programs 

as similar in stringency. The Tier 2 

evaporative program requires 

manufacturers to certify the durability 

of their evaporative emission systems 

using a fuel containing the maximum 

allowable concentration of alcohols 

(highest alcohol level allowed by EPA in 

the fuel on which the vehicle is 

intended to operate, i.e., a ‘‘worst case’’

test fuel). Under current requirements, 

this fuel would be about 10 percent 

ethanol by volume.168 We are retaining 

these Tier 2 durability requirements for 

the new evaporative emissions program. 

California does not require this 

provision. To compensate for the 

increased vulnerability of system 

components to alcohol fuel, 

manufacturers have indicated that they 

will produce a more durable evaporative 

emission system than the Tier 2 

numerical standards would imply, using 

the same low permeability hoses and 

low loss connections and seals planned 

for California LEV II vehicles. 

As shown in Table V.C–3, in addition 

to the maximum alcohol fuel content for 

durability testing, the other key 

differences between the federal and 

California test requirements are fuel 

volatilities, diurnal temperature cycles, 

and running loss test temperatures.169

The EPA fuel volatility requirement is 2 

psi greater than that of California. The 

high end of EPA’s diurnal temperature 

range is 9° F lower than that of 

California. Also, EPA’s running loss 

temperature is 10° F lower than 

California’s. 

TABLE V.C–3.—DIFFERENCES IN TIER

2 AND LEV II EVAPORATIVE EMISSION TEST REQUIREMENTS

Test Requirement EPA 

Tier 2 

California 

LEV II 

Fuel volatility (Reid 

Vapor Pressure in 

psi): ....................... 9 7 

Diurnal temperature 

cycle (degrees F): 72–96 65–105 

Running loss test 

temperature (degrees F): ................ 95 105 

Currently, California accepts 

evaporative emission results generated 

on the federal test procedure (using 

federal test fuel), because available data 

indicates the federal procedure to be a 

‘‘worst case’’ procedure. In addition, 

manufacturers can currently obtain 

federal evaporative certification based 

upon California results (meeting LEV II 

standards under California fuels and test 

conditions), if they obtain advance 

approval from EPA.170

Auto manufacturers commented that 

meeting the new standards can be 

achieved more effectively if they are 

provided greater flexibility in the 

certification process. They 

recommended that EPA allow federal 

evaporative certification to the new 

standards, which are equivalent to 

California’s LEV II standards, through 

California evaporative testing results 

without obtaining advance approval. 

Since we are harmonizing federal 

evaporative standards with the LEV II 

evaporative emission standards in 

today’s rule, we believe that for the new 

standards it is unnecessary to continue 

to require this advance approval for 

California results. Thus, we are 

finalizing provisions that would allow 

certification to the new evaporative 

emission standards in accordance with 

California test conditions and test 

procedures without pre-approval from 

EPA. 

D. Additional Exhaust Control Under 

Normal Conditions 

We received comments 

recommending that EPA harmonize 

exhaust emissions standards with the 

California LEV II program. We also 

received comments from manufacturers 

stating that more stringent tailpipe 

standards beyond Tier 2 were not 

warranted and that the difference 

between Tier 2 and LEV II would not be 

meaningful. As discussed in the 

proposal (71 FR 15856), we did not 

propose to further align the federal 

light-duty exhaust emissions control 

program with that of California. We 

continue to believe, for reasons 

discussed below, that it would not be 

appropriate to adopt more stringent 

tailpipe standards under normal test 

conditions beyond those contained in 

Tier 2. It is possible that a future 

evaluation could result in EPA 

reconsidering the option of harmonizing 

the Tier 2 program with California’s 

LEV-II program or otherwise seeking 

emission reductions beyond those of the 

Tier 2 program and those being finalized 

today.171 A full analysis of the 

comments is available in the Summary 

and Analysis of Comments document 

for this final rule. 

As explained earlier, section 202(l)(2) 

requires EPA to adopt regulations that 

contain standards which reflect the 

greatest degree of emissions reductions 

achievable through the application of 

technology that will be available, taking 

into consideration existing motor 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8475 

172NMOG includes emissions of nonmethane 

hydrocarbons plus all other nonmethane organic air 

pollutants (for example, aldehydes), which are 

ozone precursors. For gasoline and diesel vehicles, 

NMHC and NMOG emissions levels are very 

similar. 

173 ICIs are companies that hold a Certificate (or 

certificates) of Conformity permitting them to 

import nonconforming vehicles and to modify these 

vehicles to meet U.S. emission standards. 

174Alternative fuel vehicle converters are 

businesses that convert gasoline or diesel vehicles 

to operate on alternative fuel (e.g., compressed 

natural gas), and converters must seek a certificate 

for all of their vehicle models. 

vehicle standards, the availability and 

costs of the technology, and noise, 

energy and safety factors. The cold 

temperature NMHC program finalized 

today is appropriate under section 

202(l)(2) as a near-term control: that is, 

a control that can be implemented 

relatively soon and without disruption 

to the existing vehicle emissions control 

program. We did not propose additional 

long-term controls (i.e., controls that 

require longer lead time to implement) 

because we lack the information 

necessary to assess their 

appropriateness. We believe it will be 

important to address the 

appropriateness of further MSAT 

controls in the context of compliance 

with other significant vehicle emissions 

regulations (discussed below). 

In the late 1990’s both the EPA and 

the California Air Resources Board 

finalized new and technologically 

challenging light-duty vehicle/truck 

emission control programs. The EPA 

Tier 2 program focuses on reducing NOX

emissions from the light-duty fleet. In 

contrast, the California LEV–II program 

focuses primarily on reducing 

hydrocarbons by tightening the lightduty nonmethane organic gas (NMOG) 

standards.172 Both programs will require 

the use of hardware and emission 

control strategies not used in the fleet 

under previously existing programs. 

Both programs will achieve significant 

reductions in emissions. Taken as a 

whole, the Tier 2 program presents the 

manufacturers with significant 

engineering challenges in the coming 

years. Manufacturers must bring 

essentially all passenger vehicles under 

the same emission control program 

regardless of their size, weight, and 

application. The Tier 2 program 

represents a comprehensive, integrated 

package of exhaust, evaporative, and 

fuel quality standards which will 

achieve significant reductions in 

NMHC, NOX, and PM emissions from all 

light-duty vehicles in the program. 

These reductions will include 

significant reductions in MSATs. 

Emission control in the Tier 2 program 

will be based on the widespread 

implementation of advanced catalyst 

and related control system technology. 

The standards are very stringent and 

will require manufacturers to make full 

use of nearly all available emission 

control technologies. 

Today, the Tier 2 program remains in 

its phase-in. Cars and lighter trucks will 

be fully phased into the program with 

the 2007 model year, and the heavier 

trucks won’t be fully entered into the 

program until the 2009 model year. 

Even though the lighter vehicles will be 

fully phased in by 2007, we expect the 

characteristics of this segment of the 

fleet to remain in a state of transition at 

least through 2009, because 

manufacturers will be making 

adjustments to their fleets as the larger 

trucks phase in. The Tier 2 program is 

designed to enable vehicles certified to 

the LEV–II program to cross over to the 

federal Tier 2 program. At this point in 

time, however, it is difficult to predict 

the degree to which this will occur. The 

fleetwide NMOG levels of the Tier 2 

program will ultimately be affected by 

the manner in which LEV–II vehicles 

are certified within the Tier 2 bin 

structure, and vice versa. We intend to 

carefully assess these two programs as 

they evolve and periodically evaluate 

the relative emission reductions and the 

integration of the two programs. 

Today’s final rule addresses toxics 

emissions from vehicles operating at 

cold temperatures. The technology to 

achieve this is already available and we 

project that compliance will not be 

costly. However, we do not believe that 

we could reasonably propose further 

controls at this time. There is enough 

uncertainty regarding the interaction of 

the Tier 2 and LEV–II programs to make 

it difficult to evaluate today what might 

be achievable in the future. Depending 

on the assumptions one makes, the 

LEV–II and Tier 2 programs may or may 

not achieve very similar NMOG 

emission levels. Therefore, the eventual 

Tier 2 baseline technologies and 

emissions upon which new standards 

would necessarily be based are not 

known today. Additionally, we believe 

it is important for manufacturers to 

focus in the near term on developing 

and implementing robust technological 

responses to the Tier 2 program without 

the distraction or disruption that could 

result from changing the program in the 

midst of its phase-in. We believe that it 

may be feasible in the longer term to 

seek additional emission reductions 

from the base Tier 2 program, and the 

next several years will allow an 

evaluation based on facts rather than 

assumptions. For these reasons, we are 

deferring a decision on seeking 

additional NMOG reductions from the 

base Tier 2 program. 

E. Vehicle Provisions for Small Volume 

Manufacturers 

Before issuing a proposal for this 

rulemaking, we analyzed the potential 

impacts of these regulations on small 

entities. As a part of this analysis, we 

convened a Small Business Advocacy 

Review Panel (SBAR Panel, or ‘‘the 

Panel’’). During the Panel process, we 

gathered information and 

recommendations from Small Entity 

Representatives (SERs) on how to 

reduce the impact of the rule on small 

entities, and those comments are 

detailed in the Final Panel Report which 

is located in the public record for this 

rulemaking (Docket EPA–HQ–OAR–

2005–0036). Based on these comments, 

we proposed lead time transition and 

hardship provisions that will be 

applicable to small volume 

manufacturers as described below in 

section V.E.1 and V.E.2. For further 

discussion of the Panel process, see 

section XII.C of this rule and/or the 

Final Panel Report. We received no 

comments on this section in response to 

the proposed rulemaking. 

As discussed in more detail in section 

XII.C, in addition to the major vehicle 

manufacturers, three distinct categories 

of businesses relating to highway lightduty vehicles would be covered by the 

new vehicle standards: small volume 

manufacturers (SVMs), independent 

commercial importers (ICIs),173 and 

alternative fuel vehicle converters.174

We define small volume manufacturers 

as those with total U.S. sales less than 

15,000 vehicles per year, and this status 

allows vehicle models to be certified 

under a slightly simpler certification 

process. For certification purposes, 

SVMs include ICIs and alternative fuel 

vehicle converters since they sell less 

than 15,000 vehicles per year. 

About 34 out of 50 entities that certify 

vehicles are SVMs, and the Panel 

identified 21 of these 34 SVMs that are 

small businesses as defined by the 

Small Business Administration criteria 

(5 manufacturers, 10 ICIs, and 6 

converters). Since a majority of the 

SVMs are small businesses and all 

SVMs have similar characteristics as 

described below in section V.E.1, the 

Panel recommended that we apply the 

lead time transition and hardship 

provisions to all SVMs. These 

manufacturers represent just a fraction 

of one percent of the light-duty vehicle 

and light-duty truck sales. Our final rule 

today is consistent with the Panel’s 

recommendation. 


pwalker on PROD1PC71 with RULES_2
8476 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

175For example, as described later in section 

V.E.3, ICIs may not be able to predict their sales 

because they are dependent upon vehicles brought 

to them by individuals attempting to import 

uncertified vehicles. 

176SMVs (those with sales less than 15,000 

vehicles per year) include ICIs, alternative fuel 

vehicle converters, companies that produce 

specialty vehicles by modifying vehicles produced 

by others, and companies that produce small 

quantities of their own vehicles, but rely on major 

manufacturers for engines and other vital emission 

related components. 

1. Lead Time Transition Provisions 

In these types of vehicle businesses, 

predicting sales is difficult and it is 

often necessary to rely on other entities 

for technology (see earlier discussions 

in section V on technology needed to 

meet the new standards).175 176

Moreover, percentage phase-in 

requirements pose a dilemma for an 

entity such as an SVM that has a limited 

product line. For example, it is 

challenging for an SVM to address 

percentage phase-in requirements if the 

manufacturer makes vehicles in only 

one or two test groups. Because of its 

very limited product lines, a SVM could 

be required to certify all their vehicles 

to the new standards in the first year of 

the phase-in period, whereas a full-line 

manufacturer (or major manufacturer) 

could utilize all four years of the phasein. Thus, similar to the flexibility 

provisions implemented in the Tier 2 

rule, the Panel recommended that we 

allow SVMs (includes all vehicle small 

entities that would be affected by this 

rule, which are the majority of SVMs) 

the following options for meeting cold 

temperature NMHC standards and 

evaporative emission standards as an 

element of determining appropriate lead 

time for these entities to comply with 

the standards. 

For cold NMHC standards, the Panel 

recommended that SVMs simply 

comply with the standards with 100 

percent of their vehicles during the last 

year of the four-year phase-in period. 

Since these entities could need 

additional lead time and the new 

standards for LDVs and LLDTs would 

begin in model year 2010 and would 

end in model year 2013 (25%, 50%, 

75%, 100% phase-in over four years), 

we are finalizing, as proposed, a 

provision requiring only that SVMs 

certify 100 percent of their LDVs and 

LLDTs in model year 2013. Also, since 

the new standard for HLDTs and 

MDPVs would start in 2012 (25%, 50%, 

75%, 100% phase-in over four years), 

we are finalizing, again as proposed, a 

provision requiring that the SVMs 

certify 100 percent of their HLDTs and 

MDPVs in model year 2015. 

In regard to evaporative emission 

standards, the Panel recommended that 

since the new evaporative emissions 

standards would not have phase-in 

years, we allow SVMs to simply comply 

with standards during the third year of 

the program. We have implemented 

similar provisions in past rulemakings. 

Given the additional challenges that 

SVMs face, as noted above, we believe 

that this recommendation is reasonable. 

Therefore, for a 2009 model year start 

date for LDVs and LLDTs, we are 

finalizing, as proposed, a provision 

requiring that SVMs meet the 

evaporative emission standards in 

model year 2011. For a model year 2010 

implementation date for HLDTs and 

MDPVs, we are finalizing the proposed 

provision requiring that SVMs comply 

in model year 2012. 

2. Hardship Provisions 

In addition, the Panel recommended 

that case-by-case hardship provisions be 

extended to SVMs for the cold 

temperature NMHC and evaporative 

emission standards as an aspect of 

determining the greatest emission 

reductions feasible. These entities 

could, on a case-by-case basis, face 

hardship more than major 

manufacturers (manufacturers with 

sales of 15,000 vehicles or more per 

year), and we are finalizing as proposed 

this provision to provide what could 

prove to be a needed safety valve for 

these entities. SVMs will be allowed to 

apply for up to an additional 2 years to 

meet the 100 percent phase-in 

requirements for cold NMHC and the 

delayed requirement for evaporative 

emissions. As with hardship provisions 

for the Tier 2 rule, we are finalizing, as 

proposed, a provision providing that 

applications for such hardship relief 

must be made in writing, must be 

submitted before the earliest date of 

noncompliance, must include evidence 

that the noncompliance will occur 

despite the manufacturer’s best efforts to 

comply, and must include evidence that 

severe economic hardship will be faced 

by the company if the relief is not 

granted. 

We will work with the applicant to 

ensure that all other remedies available 

under this rule are exhausted before 

granting additional relief. To avoid any 

perception that the existence of the 

hardship provision could prompt SVMs 

to delay development, acquisition and 

application of new technology, we want 

to make clear that we expect this 

provision to be rarely invoked, and that 

relief would rarely be granted. Today’s 

rule contains numerous flexibilities for 

all manufacturers and it delays 

implementation dates for SVMs. We 

would expect SVMs to prepare for the 

applicable implementation dates in 

today’s rule. 

3. Special Provisions for Independent 

Commercial Importers (ICIs) 

Although the SBAR panel did not 

specifically recommend it, we are 

finalizing as proposed provisions 

allowing ICIs to participate in the 

averaging, banking, and trading program 

for cold temperature NMHC fleet 

average standards (as described in Table 

IV.B.–1), but with appropriate 

constraints to ensure that fleet averages 

will be met. The existing regulations for 

ICIs specifically prohibit ICIs from 

participating in emission-related 

averaging, banking, and trading 

programs unless specific exceptions are 

provided (see 40 CFR 85.1515(d)). The 

concern is that they may not be able to 

predict their sales and control their fleet 

average emissions because they are 

dependent upon vehicles brought to 

them by individuals attempting to 

import uncertified vehicles. However, 

an exception for ICIs to participate in an 

averaging, banking, and trading program 

was made for the Tier 2 NOX fleet 

average standards (65 FR 6794, February 

10, 2000), and today we are finalizing, 

as proposed, a similar exception for the 

cold temperature NMHC fleet average 

standards. 

If an ICI is able to purchase credits or 

to certify a test group to a family 

emission level (FEL) below the 

applicable cold temperature NMHC fleet 

average standard, the rule allows the ICI 

to bank credits for future use. Where an 

ICI desires to certify a test group to a 

FEL above the applicable fleet average 

standard, the rule allows them to do so 

if they have adequate and appropriate 

credits. Where an ICI desires to certify 

to an FEL above the fleet average 

standard and does not have adequate or 

appropriate credits to offset the 

vehicles, we will permit the 

manufacturer to obtain a certificate for 

vehicles using such a FEL, but will 

condition the certificate such that the 

manufacturer can only produce vehicles 

if it first obtains credits from other 

manufacturers or from other vehicles 

certified to a FEL lower than the fleet 

average standard during that model 

year. 

Our experience over the years through 

certification indicates that the nature of 

the ICI business is such that these 

companies cannot predict or estimate 

their sales of various vehicles well. 

Therefore, we do not have confidence in 

their ability to certify compliance under 

a program that will allow them leeway 

to produce some vehicles to a higher 

FEL now but sell vehicles with lower 

FELs later, such that they were able to 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8477 

177The per-gallon benzene cap (1.3 vol%) in the 

RFG program will continue to apply separately. 

178Although this program will supersede several 

compliance requirements from other programs, we 

are retaining certain recordkeeping and reporting 

requirements from these programs. For example, 

refiners will need to continue to provide gasoline 

fuel property data for more than just benzene. This 

is discussed in more detail in VI.B below. 

comply with the fleet average standard. 

We also cannot reasonably assume that 

an ICI that certifies and produces 

vehicles one year, will certify or even be 

in business the next. Consequently, we 

are finalizing the proposed provision 

barring ICIs from utilizing the deficit 

carry forward provisions of the ABT 

program. 

VI. Gasoline Benzene Control Program 

A. Description of and Rationale for the 

Gasoline Benzene Control Program 

We received comments on a wide 

range of issues regarding our proposal of 

a gasoline benzene control program. We 

have considered these comments 

carefully. This notice finalizes a 

gasoline benzene control program that is 

very similar to the proposed program, 

with the inclusion of an upper limit 

benzene standard on which we sought 

comment. 

The gasoline benzene control program 

has three main components, each of 

which is discussed in this section: 

—A gasoline benzene content standard. 

In general, refiners and importers will 

be subject to an annual average 

gasoline benzene standard of 0.62 

volume percent (vol%), beginning 

January 1, 2011. This single standard 

will apply to all gasoline, both 

reformulated gasoline (RFG) and 

conventional gasoline (CG) 

nationwide (except for gasoline sold 

in California, which is already 

covered by a similar state program). 

—An upper limit benzene standard. In 

general, this ‘‘maximum average 

standard’’ will require that the annual 

average of actual benzene levels that 

each refinery produces be less than or 

equal to 1.3 vol% without the use of 

credits, beginning July 1, 2012.177

—An averaging, banking, and trading 

(ABT) program. The ABT program 

allows refiners and importers to 

choose the most economical 

compliance strategy (investment in 

technology, credits, or both) for 

meeting the 0.62 vol% annual average 

benzene standard. The program 

allows refiners to generate ‘‘early 

credits’’ for making qualifying 

benzene reductions earlier than 

required and allows refiners and 

importers to generate ‘‘standard 

credits’’ for overcomplying with the 

0.62 vol% benzene standard in 2011 

and beyond. Credits may be used 

interchangeably towards compliance 

with the 0.62 vol% standard, 

‘‘banked’’ for future use, and/or 

transferred nationwide to other 

refiners/importers subject to the 

standard. While credits may not be 

used to demonstrate compliance with 

the 1.3 vol% maximum average 

standard, the ABT program in its 

entirety provides the refining industry 

with significant compliance 

flexibility. To achieve compliance 

with the 0.62 vol% average standard 

in 2011 and beyond, refiners and 

importers may use credits generated 

and/or obtained under the ABT 

program, reduce their gasoline 

benzene levels, or any combination of 

these. 

—Provisions for refiners facing 

economic hardship. Refiners 

approved as ‘‘small refiners’’ will 

have access to special temporary relief 

provisions. In addition, any refiner 

facing extreme unforeseen 

circumstances or extreme hardship 

circumstances can apply for 

temporary relief. 

1. Gasoline Benzene Content Standard 

a. Description of the Average Benzene 

Content Standard 

The program finalized in this rule 

requires significant reductions in the 

average levels of benzene in gasoline 

sold in the U.S. Beginning in 2011, the 

average benzene level of all batches of 

gasoline produced during a calendar 

year at each refinery will need to be at 

or below a standard of 0.62 vol% 

benzene. Approved small refiners must 

comply with this requirement by 2015. 

Each gasoline importer will need to 

meet the 0.62 vol% standard on average 

for its imported gasoline during each 

year. The 0.62 vol% average standard 

may be met through actual production/ 

importation of fuel with a benzene 

content of 0.62 vol% or less, on average, 

and/or by using benzene credits. A 

deficit is created when compliance is 

not achieved in a given year. This 

deficit may be carried forward without 

regulatory approval but must be made 

up the next year. (See VI.B 

(Implementation), below.) While this 

subsection focuses on the 0.62 vol% 

average standard, refiners and importers 

will also be subject to a ‘‘maximum 

average benzene standard’’ of 1.3 vol%, 

which is discussed below in section 

VI.A.1.d. 

The 0.62 vol% average benzene 

standard applies to all gasoline, both 

RFG and CG. Gasoline sold nationwide 

is covered by the standard, with the 

exception of gasoline sold in California. 

California gasoline is covered by 

existing State of California benzene 

requirements that result in benzene 

reductions similar to the federal 

program finalized here. 

The 0.62 vol% average benzene 

standard and the 1.3 vol% maximum 

average standard result in air toxics 

emissions reductions that are greater 

than required under all existing 

gasoline-related MSAT programs. As a 

result, upon implementation in 2011, 

the regulatory provisions for this 

gasoline benzene control program will 

become the regulatory mechanism used 

to implement the RFG and CG (AntiDumping) annual average toxics 

performance requirements and the 

annual average benzene content 

requirement for RFG. The current RFG 

and Anti-Dumping annual average 

toxics provisions thus will be replaced 

by this benzene control program. This 

final benzene control program will also 

replace the requirements of the 2001 

MSAT rule (‘‘MSAT1’’). In addition, the 

program will satisfy certain conditions 

of the Energy Policy Act of 2005 (EPAct) 

and thus remove the need to revise 

individual MSAT1 toxics baselines for 

RFG otherwise required by the EPAct. In 

all of these ways, this program will 

significantly consolidate and simplify 

the existing national fuel-related MSAT 

regulatory program while achieving 

greater overall emission reductions.178

See Section VI.C below for additional 

discussion of this issue. 

b. Why Are We Finalizing a Benzene 

Content Standard? 

As discussed in the proposal, we 

believe a benzene content standard is 

the most cost-effective and most certain 

way to reduce gasoline benzene 

emissions from vehicles. Fuel benzene 

reductions directly and demonstrably 

result in benzene emissions reductions 

which also results in overall MSAT 

emission reductions. Focusing MSAT 

control on benzene alone means that the 

effectiveness of the control will not be 

affected by changes in fuel composition 

or vehicle technology. Because benzene 

is a small component of gasoline 

(around 1 vol%), gasoline octane is not 

significantly affected by a reduction in 

benzene content. Other fuel changes 

that could be undertaken to reduce 

MSATs would significantly impact 

octane, and replacing that octane would 

be costly and could increase emissions 

of MSATs other than benzene. 

Nonetheless, in addition to proposing to 

control fuel-related MSAT emissions by 

means of a gasoline benzene content 

standard, we sought comment on a 


pwalker on PROD1PC71 with RULES_2
8478 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

179 71 FR 55552, September 22, 2006. 

number of alternative approaches, 

including control of toxics in addition 

to benzene and more stringent limits on 

gasoline sulfur and volatility. A number 

of commenters expressed support for 

some of these alternatives and others 

opposed them. In reaching our decision 

to finalize a benzene content standard, 

we evaluated the comments on each of 

the alternative approaches, and we 

discuss these next. 

i. Standards That Would Include Toxics 

Other Than Benzene 

We considered separate standards for 

each of the key fuel-related toxics (we 

discuss control of aromatic compounds 

separately) as well as a total toxics 

performance standard. 

A Standard for Total Toxics 

Performance 

Several commenters advocated a 

standard in the form of a toxics 

emissions performance standard, 

analogous to the current MSAT1 and 

RFG standards. Some commenters 

requested an air toxics standard in 

addition to the fuel benzene content 

standard we are finalizing. In general, 

these commenters expressed concern 

that if toxics other than benzene are not 

also controlled simultaneously, refiners 

may allow the emissions of these other 

compounds to increase, even while 

benzene is being reduced. Other 

commenters requested a toxics standard 

instead of fuel benzene control (or as an 

alternative compliance option). These 

commenters felt that a toxics 

performance standard offered more 

compliance flexibility. Other 

commenters supported our proposed 

benzene-only standard, stating that a 

total toxics standard would add 

complexity without additional benefit. 

For several reasons, we continue to 

believe that a benzene-only standard is 

superior to a toxics emissions 

performance standard. First, because 

controlling benzene is much more costeffective than controlling emissions of 

other MSATs, refiners historically have 

preferentially reduced benzene under 

the MSAT1 and other air toxics control 

programs. This is despite the theoretical 

flexibility that refiners have under a 

toxics performance standard to change 

other fuel parameters instead of 

benzene. Thus, even if we were to 

express the proposed standard as an air 

toxics performance standard, we would 

expect the outcome to be the same—

refiners would reduce benzene content 

and leave unchanged the levels of other 

MSATs. 

Even with, or as a result of, this fuel 

benzene control, we do not expect 

refiners to actively modify their refinery 

operations such that increases will 

occur in emissions of the other MSATs 

currently controlled under the toxics 

performance standards. These other 

MSATs are acetaldehyde, formaldehyde, 

POM, and 1,3-butadiene, and they are 

all affected to varying degrees by VOC 

emissions control. VOC emissions are 

generally decreasing due to the gasoline 

sulfur controls recently phased in along 

with tighter vehicle controls under the 

Tier 2 program, as well as the vehicle 

controls being finalized under this 

program (see section V above). In 

combination, these changes are 

expected to decrease VOC-based MSAT 

emissions substantially. 

In addition to reductions because of 

declining VOC emissions, formaldehyde 

emissions are currently, and for the 

foreseeable future, declining as MTBE 

use ends. See 71 FR 15860. 

According to the Complex Model, the 

Agency’s current gasoline emissions 

compliance model, POM emissions 

correlate directly with VOC emissions 

(see 40 CFR 80.45(e)(8). Therefore, we 

expect significant POM emission 

reductions as VOC emissions decline. 

For 1,3-butadiene, the fuel parameter 

of interest is olefins. Increasing olefins 

increases 1,3-butadiene emissions. 

However, olefins are expected to 

decrease as a result of the 

implementation of the gasoline sulfur 

program because they are reduced along 

with sulfur during the desulfurization 

process. Olefins are also often used for 

their octane value, but because of 

increased ethanol use, this need should 

be reduced. As a result, we do not 

expect refiners to take actions to 

increase olefins, and thus 1,3-butadiene 

emissions should not increase. Also, 

1,3-butadiene, like other MSATs, is 

reduced when VOC is reduced due to 

fuel and vehicles standards being 

implemented (see 71 FR 15860). 

The one MSAT likely to increase in 

the future is acetaldehyde. Current 

market forces, along with state and 

federal policies and requirements such 

as the proposed Renewable Fuels 

Standard (RFS) Program,179 ensure that 

ethanol use will increase, and thus 

acetaldehyde as well, since that MSAT 

is directly and substantially affected by 

ethanol use. Acetaldehyde emissions are 

currently about one-seventh the 

magnitude of benzene emissions from 

motor vehicles, but are increasing 

(while formaldehyde emissions are 

decreasing) due to the substitution of 

ethanol for MTBE in RFG as a result of 

state MTBE bans. Any action that 

refiners could take to offset the total 

toxics increase as a result of 

acetaldehyde increasing would be 

through benzene control, which we are 

already requiring to be controlled to the 

maximum extent possible. The EPAct, 

which charged EPA with developing the 

RFS program, also requires an 

evaluation of that Act’s impacts on air 

quality. Any future control of 

acetaldehyde emissions will be based 

primarily on the results of that study. 

EPA thus believes it premature to act 

until we determine a course of future 

action reflecting the EPAct study, a draft 

of which is due to Congress in 2009. 

As described above, with the 

exception of acetaldehyde, the benzene 

control program will ensure the 

certainty of additional MSAT 

reductions. Other MSAT emissions are 

thus unlikely to increase under this 

program. Because an air toxics standard 

would not provide any additional 

emission reductions, we believe that the 

regulatory controls, and the associated 

paperwork and the other administrative 

costs that would result if standards 

explicitly including these other MSATs 

were adopted, are not necessary. The 

benzene control program will thus 

ensure the certainty of additional MSAT 

reductions. A toxics emissions 

performance standard that would 

effectively achieve the same level of 

MSAT reduction would be more costly 

and complex. For all of these reasons, 

we believe a standard in the form of a 

benzene content standard will produce 

more certain environmental results with 

less complexity than a toxics emissions 

performance standard, and we are 

therefore finalizing only a benzene 

content standard. 

A Standard for Aromatic Compounds in 

Addition to Benzene 

In the proposal, we considered MSAT 

control through the reduction of the 

content of aromatics in addition to 

benzene in gasoline. For a number of 

reasons, we did not propose such 

control (see 71 FR 15860 and 15864). 

During the comment period, we 

received comments urging EPA to 

impose controls on non-benzene 

gasoline aromatic compounds, in 

addition to controlling benzene. These 

commenters believe aromatics control 

would provide more toxics emissions 

reductions than a benzene-only control 

program, and they also believe it would 

improve air quality by significantly 

reducing fine particulate matter. 

Expanded use of E85 and flexible-fuel 

vehicles and ETBE were suggested as 

ways to replace the octane value which 

would be lost if aromatics were reduced. 

They also cited other benefits such as 

energy independence and reduction of 

trade deficits, and stated that costs to 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8479 

180 If the aromatics content of a gallon of gasoline 

is 30 vol%, adding 10% ethanol dilutes the 

aromatic content to about 27 vol%. 

181Section 2.2 ‘‘Effects of Ethanol and MTBE on 

Gasoline Fuel Properties’’ in the Renewable Fuel 

Standard Program: Draft Regulatory Impact 

Analysis, September, 2006. 

182Total toxics emissions are as calculated by the 

Complex Model. This model is the tool used to 

determine compliance with the toxics emissions 

controls in the RFG, Anti-dumping, and MSAT1 

programs. Cost estimates for aromatics control and 

analysis of relative benzene emissions with control 

of aromatics and benzene are found in Regulation 

of Fuels and Fuel Additives; Standards for 

Reformulated and Conventional Gasoline; Final 

rule, Table VI–A6 of the Regulatory Impact 

Analysis, February 16, 1994. 

183See Chapter 1 in the RIA for more on current 

studies on this subject. 

184See Chapter 1 in the RIA for more on current 

studies on this subject. 

the refining industry would not be 

significant. A significant rebuttal to this 

request for aromatics control was 

presented by the refining industry. 

We note first that regardless of 

specific regulatory action to control 

aromatics, the increased use of ethanol 

in response to current market forces and 

state and federal policies (including the 

RFS program) will contribute to lower 

aromatics levels. This will occur for two 

reasons. First, ethanol has historically 

been blended downstream of refineries, 

either as a ‘‘splash blend’’ or as a 

‘‘match blend.’’ In a splash blend, the 

ethanol is mixed with finished gasoline. 

In a match blend, refiners prepare a 

special subgrade of gasoline that, when 

blended with ethanol, becomes finished 

gasoline. In recent years, match 

blending has increased as refiners have 

been producing RFG with ethanol, and 

it is expected to increase even more as 

ethanol use expands. A splash blend 

will reduce aromatics by about 3 vol% 

by simple dilution.180 A match blend 

will reduce aromatics by about 5 

vol%.181 With ethanol use expected to 

more than double, we expect a 

significant reduction in aromatics 

levels. Second, with all of this ethanol 

there will be excess octane in the 

gasoline pool. Thus, not only will 

increased ethanol use decrease 

aromatics concentrations through 

dilution, but refiners will make the 

economic decision to use ethanol to 

reduce or avoid producing aromatics for 

the purpose of increasing octane. 

Because of differences in how refiners 

will respond to the rapid increase in 

ethanol use, it would be difficult to 

determine an appropriate level for an 

aromatics standard at this time. The 

gasoline market is going through an 

historic transition now due to the 

removal of MTBE, conversion of some 

portion of the MTBE production volume 

to other high octane blendstock 

production, growth of ethanol use, and 

the rise in crude oil prices. 

Consequently, it is difficult to reliably 

project a baseline level of aromatics for 

the gasoline pool with any confidence. 

This is compounded by a great deal of 

uncertainty in knowing how much of 

the market ethanol will capture. 

Projections by EIA are significantly 

higher now than just a few months ago, 

and Presidential and Congressional 

proposals could easily result in 100% of 

gasoline being blended with ethanol. 

Second, aromatics levels vary 

dramatically across refineries based on 

a number of factors, including refinery 

configuration and complexity, access to 

other high octane feedstocks, access to 

the chemicals market, crude sources, 

and premium grade versus regular grade 

production volumes. Third, without 

knowing with some certainty the range 

of aromatics contents of refineries’

gasoline, we cannot determine the 

greatest degree of emission reduction 

achievable, and also cannot make 

reasonable estimates regarding cost, lead 

time, safety, energy impacts, etc. As a 

result, at this time we would not be able 

to determine an appropriate or 

meaningful aromatics standard. 

For the purpose of reducing total 

toxics emissions, fuel benzene control is 

far more cost-effective than control of 

total aromatics, for a number of reasons. 

As we explained in the proposal, 

reducing the content of other aromatics 

in gasoline is much less effective at 

reducing benzene emissions than 

reducing fuel benzene content. Based on 

the Complex Model,182 roughly 20 times 

greater reduction in total aromatics 

content is needed to achieve the same 

benzene emission reduction as is 

achieved by fuel benzene reductions. At 

the same time, to broaden the program 

to control other aromatics would result 

in a significant octane loss. While we 

have not yet conducted a thorough 

refinery modeling evaluation, based on 

existing refinery and market information 

the alternative sources of octane (other 

than ethanol) appear to be of limited 

supply and would be of limited 

effectiveness in replacing the octane lost 

from any fuel aromatics reductions. 

Furthermore, as noted above, the 

uncertainty in the extent to which 

ethanol will penetrate the market makes 

it difficult to project the potential 

replacement of aromatics with ethanol. 

Any significant reduction in aromatics 

would also affect the gasoline and diesel 

sulfur reduction programs because 

hydrogen, which is used in the 

desulfurization process, is produced 

when aromatics are produced. If refiners 

were required to reduce their aromatics 

levels, costs would increase further 

because some would have to expand or 

build new hydrogen production 

facilities. 

Reducing aromatics would also raise 

other environmental concerns that 

would need to be addressed in any 

regulation. Actions available to 

refineries for replacing octane, 

including adding ethanol, can increase 

other MSATs, as mentioned above. In 

addition, some commenters encouraged 

the use of the ether derived from 

ethanol, ETBE, to make up octane. Any 

regulatory action that required or was 

based on the use of ETBE would likely 

raise issues of potential groundwater 

contamination given the groundwater 

contamination caused by the use of the 

chemically similar MTBE. 

There may be compelling reasons to 

consider aromatics control in the future, 

especially regarding reduction in 

secondary PM2.5 emissions, to the extent 

that evidence supports a role for 

aromatics in secondary PM2.5

formation.183 Unfortunately, there are 

limitations in both primary and 

secondary PM science and modeling 

tools that limit our present ability to 

quantitatively predict what would 

happen for a given fuel control. Thus, at 

this point, we do not feel that the 

existing body of information and 

analytical tools provide a sufficient 

basis to determine if further fuel 

aromatics control is warranted. 

However, we do feel that additional 

research is very important. Test 

programs and analyses are planned to 

address primary PM issues, including 

those examining the role of aromatics. 

Also, more work is underway on how 

fuel aromatics, including toluene, affect 

secondary PM formation, and how 

aromatics control should be 

incorporated into air quality predictive 

models.184

In summary, we believe that 

aromatics levels will be falling even 

without an aromatics standard, and 

aromatics control will need to be 

evaluated in the context of what might 

be possible beyond what will occur 

through the expanded use of ethanol. 

Furthermore, any additional control 

would be costly and raise a number of 

other issues which need further 

investigation before EPA could 

responsibly initiate such a control effort. 

Thus, we have concluded that 

additional aromatics control for MSAT 

purposes is not warranted at this time. 


pwalker on PROD1PC71 with RULES_2
8480 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

185For further discussion of the impact of these 

fuel properties on emissions, see RIA Chapter 7. 

186Control of Emissions of Air Pollution from 

Nonroad Diesel Engines and Fuel—Final Rule, 

Section 5.9.4 of the Regulatory Impact Analysis, 

June 29, 2004. 

187Health Effects Institute’s Advanced 

Collaborative Emissions Study. 

188EPA does not believe that there are any noise 

issues associated with these standards, and no 

comments suggested any such issues exist. 

ii. Control of Gasoline Sulfur and/or 

Volatility for MSAT Reduction 

In the proposal, we outlined a number 

of issues related to further control of 

gasoline sulfur content and volatility 

(usually described as Reid vapor 

pressure, or RVP) as a means of MSAT 

emissions reduction.185 (See 71 FR 

15861–62.) In both cases, there was 

insufficient data on newest technology 

vehicles at that time to evaluate their 

effectiveness as MSAT controls. 

Therefore, we did not propose changes 

to existing standards. 

We received several comments related 

to sulfur and RVP control, but there was 

general agreement in the comments 

from auto manufacturers and refiners 

that sufficient data does not yet exist for 

EPA to take action as a part of this rule. 

Consequently, we are not taking action 

to adopt additional control of gasoline 

sulfur or RVP. However, since the 

proposal, we have completed a small 

fuel effects test program in cooperation 

with several automakers to help 

evaluate the impact of fuel property 

changes on emissions from Tier 2 

vehicles. These data suggest that 

reducing gasoline sulfur below 30 ppm 

could bring significant reductions in 

VOC and NOX, but the data relating to 

air toxics reductions were not 

statistically significant. Unlike past 

programs on older technology vehicles, 

these data suggest that reducing gasoline 

volatility from 9 to 7 psi RVP under 

normal testing conditions (75° F) may 

actually increase exhaust toxics 

emissions. The program did not 

examine the impacts of fuel volatility on 

evaporative emissions. These data 

indicate that there may be benefits to 

future fuel control but that more testing 

is warranted. More details on the test 

program and its results are available in 

Chapter 6 of the RIA. 

iii. Diesel Fuel Changes 

In the proposal, EPA did not propose 

additional controls on diesel fuel for 

MSAT control. We continue to believe 

that the recent highway and nonroad 

diesel programs (see section IV. D. 1. c 

above) will achieve the greatest 

currently achievable reductions in 

diesel-related MSAT control (i.e., 

reductions in emissions of diesel 

particulate matter and exhaust organic 

gases). These emission reductions will 

result from the deep cuts in diesel fuel 

sulfur that will be implemented in the 

same time frame as this gasoline 

benzene rule, along with the associated 

diesel engine emission control 

requirements of the diesel programs. We 

said that we were unaware of other 

changes to diesel fuel that could have a 

significant effect on MSAT emissions, 

and requested comment about limiting 

this action to gasoline benzene. 

One group of commenters stated in 

joint comments that they believe that 

EPA needs to do more to protect human 

health and the environment from the 

effects of diesel exhaust emissions. 

While they specifically mention actions 

to accelerate the introduction of cleaner 

diesel engines, they do not suggest any 

additional changes to diesel fuel. 

Another commenter, a refiner, believes 

that further diesel fuel controls are not 

warranted. 

Some commenters support control of 

the polyaromatic hydrocarbon (PAH) 

content of diesel fuel. The actions 

refiners are taking to produce ultra-low 

sulfur diesel fuel (15 ppm sulfur) are 

expected to reduce the PAH content in 

diesel fuel.186 In addition, available data 

indicate that the advent of exhaust 

emission controls on diesel engines 

under the recent diesel programs will 

reduce exhaust PAH, regardless of any 

changes to diesel fuel. 

We continue to believe that existing 

regulations will achieve the greatest 

currently achievable reductions in 

MSAT emissions from diesel engines. 

EPA will continue to monitor MSAT 

issues related to diesel fuel. For 

example, there are active programs 

underway to measure PAH exhaust 

emissions from diesel engines meeting 

the 2007 PM engine standards.187

However, at this time, we are not aware 

of diesel fuel controls that could 

significantly affect MSAT emissions and 

commenters did not offer specific 

information to the contrary. 

Consequently, we have focused our fuelrelated MSAT action on gasoline 

benzene, as proposed. 

c. Why Are We Finalizing a Level of 

0.62 vol% for the Average Benzene 

Standard? 

We considered a range of average 

benzene standards, taking into account 

technological feasibility as well as cost 

and the other enumerated statutory 

factors. We received comments from a 

variety of parties supporting standards 

more stringent than the proposed level 

of 0.62 vol%. In general, the refining 

industry did not express strong 

opposition to a standard of 0.62 vol%. 

However, several small refiners opposed 

a benzene standard and argued for relief 

for small refiners if EPA went forward 

with such a program. One commenter, 

an importer, proposed a standard of 1.0 

vol%. None of the commenters 

opposing the 0.62 vol% standard 

provided analytical support for a less 

stringent standard, or addressed how a 

less stringent standard might reflect the 

greatest emission reductions achievable 

based on the statutory factors. We have 

considered all of these comments and 

reassessed the level of the standard in 

light of the key factors we are required 

to consider, and have concluded that, as 

proposed, 0.62 vol% is the appropriate 

level for the average standard, because 

it achieves the greatest achievable 

emission reductions through the 

application of technology that will be 

available, considering cost, energy, 

safety, and lead time.188 As discussed in 

section VI.A.1.d below, we have drawn 

this conclusion in the context of the 1.3 

vol% maximum average benzene 

standard. We summarize our assessment 

of technological and economic factors 

next. 

i. General Technological Feasibility of 

Benzene Control 

Benzene Control Technologies 

We have identified several 

technologies that can cost-effectively 

reduce gasoline benzene levels and we 

assessed their feasibility. These benzene 

control technologies function primarily 

by controlling the benzene in the 

feedstock to and the product stream 

from the reformer. They primarily focus 

on the reformer because refiners rely on 

the reformer to produce aromatic 

compounds for their octane content, and 

benzene is one of the aromatic 

compounds produced. For refiners who 

are not actively reducing the benzene in 

their gasoline today, we estimate that 

the reformer is responsible for about one 

half to three quarters of the benzene in 

gasoline. 

Since the proposal, we learned of a 

change in how a particular gasoline 

blending stream is being routed in the 

refinery which affects its treatability for 

reducing benzene. After speaking to 

several refiners, we learned that natural 

gasoline is being blended differently 

into gasoline today because of the need 

to address the sulfur in this stream for 

compliance with Tier 2. Specifically, 

natural gasoline is being blended with 

the crude oil before the crude oil is 

refined in the refinery. Therefore the 

benzene in natural gasoline would be 

treated along with the naturally 

occurring benzene in crude oil using the 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8481 

benzene control technologies described 

below. We reflected this change in our 

refinery modeling. 

One approach to reducing gasoline 

benzene levels is to reroute around the 

reformer the intermediate refiner 

streams that have the greatest tendency 

to form benzene in the reformer. This 

technology is usually termed light 

naphtha splitting. Assuming that a 

refinery applying this technology is not 

applying any sort of benzene control 

today, we estimate that this method 

reduces the benzene levels of reformate 

(the stream leaving the reformer) by 60 

percent. This approach requires little or 

no capital investments in refineries to 

realize the results, but its effectiveness 

is limited because it does not address 

any of the naturally-occurring benzene 

found in crude oil and from natural 

gasoline and the other benzene which is 

formed in the reformer. Although this 

benzene control technology normally 

will not achieve the most substantial 

benzene control, refiners choosing it 

will achieve some measure of benzene 

control and then would likely need to 

purchase credits to comply with the 

0.62 benzene standard. 

To achieve deeper benzene control, 

refiners with an isomerization unit can 

send the rerouted intermediate refinery 

stream to their isomerization unit. The 

isomerization unit would saturate the 

naturally-occurring benzene from crude 

oil and natural gasoline in the rerouted 

refinery intermediate stream mentioned 

above, thus achieving additional 

benzene reduction. Using these two 

technologies together, refiners will be 

able to reduce reformer benzene levels 

by an estimated 80 percent. However, 

the benzene formed in the reformer 

would still not be treated using these 

two technologies together. 

For even deeper benzene reductions 

than benzene precursor rerouting by 

itself or in combination with 

isomerization, refiners could choose 

between benzene saturation and 

benzene extraction. Each of these 

technologies work by reducing the 

benzene levels in the reformate, 

achieving an estimated 96 percent 

reduction in benzene, assuming that the 

refinery is not already taking steps to 

control its benzene levels. Benzene 

saturation involves using hydrogen to 

saturate the benzene into cyclohexane, 

which is a compound usually found in 

gasoline. Benzene extraction units 

chemically extract the benzene from the 

rest of the hydrocarbon compounds in 

reformate and concentrate it to a high 

purity using distillation such that it is 

suitable for sale into the chemicals 

market. Either of these technologies is 

capable of achieving the deepest levels 

of gasoline benzene reductions, 

allowing virtually all refiners to meet or 

exceed the 0.62 vol% gasoline benzene 

standard. 

The actual impact of these benzene 

control technologies on an individual 

refinery’s finished gasoline benzene 

content, however, will be a function of 

many different refinery-specific factors. 

These factors include the types of 

refining units in each refinery and the 

benzene levels produced by them, and 

the extent to which they are already 

utilizing one or more of these benzene 

control technologies. 

Each of the benzene control 

technologies associated with the 

reformer has been commercially 

demonstrated by at least half a dozen 

units in U.S. refineries today operating 

for at least two years. Also, we did not 

receive any comments questioning the 

viability of these technologies for 

achieving the benzene reduction 

attributed to these technologies in the 

proposed rule. We therefore conclude 

that these technologies can feasibly 

achieve the benzene reductions that we 

attribute to them. We discuss the 

economics for each of these approaches 

to benzene reduction in more detail in 

section VIII.A. of this preamble, and we 

discuss their feasibility and cost in 

detail in Chapters 6 and 9 of the RIA. 

We evaluated the benzene control 

level achievable without the use of 

credits by each refinery using either 

benzene saturation or extraction, since 

this would represent the maximum 

technologically feasible level of benzene 

control by each refinery. Our refinery 

cost model shows that based on the 

application of one or the other of these 

two benzene technologies, eight 

refineries would still not be able to 

achieve the final 0.62 vol% benzene 

average standard. We believe that these 

refineries would, however, be able to 

achieve the 1.3 vol% maximum average 

standard (which, as explained in section 

VI.A.1.d below, must be achieved 

without the use of credits) through the 

use of one of these technologies. 

These eight refineries would be able 

to further reduce their gasoline benzene 

levels by treating the benzene contained 

in other gasoline blendstocks, 

particularly light straight run, light 

coker naphtha and light hydrocrackate. 

We believe that refiners could merge 

these streams with their reformate 

gasoline stream, so that these other 

sources of benzene would be treated 

along with the benzene in the reformate 

using either benzene saturation or 

benzene extraction. The results of this 

additional analysis summarized in the 

RIA show that these eight refineries 

would be able to meet the 0.62 vol% 

average standard if they were to apply 

one or more of these additional benzene 

control steps, though in some cases it 

may be at a considerably higher cost 

than through the purchase of credits. 

The cost and ultimate feasibility for 

controlling the benzene in light straight 

run, light coker naphtha and light 

hydrocrackate is very difficult to 

determine without detailed and 

comprehensive knowledge about how 

refineries are configured and operated 

today. It might be possible for a refinery 

to adjust existing distillation units, 

either operationally or with minor 

capital investments, to change the 

cutpoints for these streams. They might 

then route the benzene in these streams 

to the reformer, where a benzene control 

technology would be applied. On the 

other hand, changing the cutpoints to 

reroute the benzene might require the 

addition of a whole new distillation 

column, similar in function to a 

reformate splitter. Adding such 

grassroots distillation columns to make 

these splits would be much more costly. 

Finally we have not found any 

commercially demonstrated benzene 

control technologies that can reduce the 

benzene of FCC naphtha, the second 

largest contributor of benzene to the 

gasoline pool. 

Impacts on Octane and Strategies for 

Recovering Octane Loss 

All these benzene reduction 

technologies tend to cause a small 

reduction in the octane value of the 

final gasoline, since benzene is high in 

octane (about 101 octane number 

((R+M)/2). Understanding how lost 

octane will be recovered is critical to 

determining the feasibility and cost of 

benzene control. Regular grade gasoline 

must comply with a minimum 87 octane 

number (or a sub-octane rating of 86 for 

driving in altitude), while premium 

grade gasoline must comply with an 

octane rating which ranges from 91 to 

93 octane numbers. Gasoline must meet 

these octane ratings to be sold at retail. 

Routing the benzene precursors around 

the reformer reduces the octane of the 

six-carbon compound stream (by 

foregoing the formation of benzene) 

which normally exits the reformer with 

the rest of the reformate. Without these 

compounds in the reformate, our 

refinery model shows that a loss of 

octane in the gasoline pool of about 0.14 

octane numbers will typically occur. If 

this rerouted stream can be sent to an 

isomerization unit additional octane 

loss will occur due to the saturation of 


pwalker on PROD1PC71 with RULES_2
8482 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

189The chemical process of benzene saturation in 

the isomerization unit is the same as the process 

that occurs in a benzene saturation unit, as 

described above. 

benzene 189; however, as described 

below, the isomerization unit offsets a 

part of the octane loss caused by this 

combination of saturation and rerouting. 

Benzene saturation and benzene 

extraction both affect the octane of 

reformate and therefore of the gasoline 

pool. Our refinery model estimates that 

benzene saturation typically reduces the 

octane of gasoline by 0.24 octane 

numbers, and benzene extraction 

typically reduces the octane of gasoline 

by 0.14 octane numbers. 

Refiners have several choices 

available to them for recovering the lost 

octane. One is to blend in ethanol. 

Ethanol has a very high octane number 

rating of 115. Thus, only a small amount 

of ethanol (one percent of the gasoline 

pool or less) would be necessary to 

offset the octane loss associated with 

benzene reductions. Moreover, ethanol 

blending will occur for reasons 

independent of the benzene control 

requirements (and attendant octane loss) 

of the present rule. As explained in the 

discussion of potential aromatics 

controls above, current market forces 

and state and federal policies (including 

the RFS program) will increase the 

volume of renewable fuels, including 

ethanol, which is to be blended into 

gasoline. The volume of renewable fuels 

must increase from around 4 billion 

gallons in 2004 to 7.5 billion gallons in 

2012 when the renewable fuels 

provisions of the RFS are fully 

implemented. However, as part of the 

Annual Energy Outlook for 2006, the 

Energy Information Administration 

projects that the economics driven by 

higher crude oil prices will result in 

more like 9.6 billion gallons of ethanol 

use by 2012. 

Octane may also be increased by 

increasing the severity of the reformer 

(which determines the final octane of 

the reformate). However, if the refiner is 

reducing benzene through precursor 

rerouting or saturation, this strategy can 

be somewhat counterproductive. This is 

because increased severity increases the 

amount of benzene in the reformate and 

thus increases the cost of saturation and 

offsets some of the benzene reduction of 

precursor rerouting. Increasing reformer 

severity also decreases the operating 

cycle life of the reformer, requiring more 

frequent regeneration. However, where 

benzene extraction is used, increased 

reformer severity can improve the 

economics of extraction because not 

only is lost octane replaced by other 

aromatic compounds, but more benzene 

is extracted and sold. 

Refiners can also recover lost octane 

by increased use of isomerization and 

alkylate units. As discussed above, 

saturating benzene in the isomerization 

unit results in an octane loss, but the 

octane loss is partially offset by the 

simultaneous formation of branch-chain 

compounds in the isomerization unit. 

The isomerization unit would only 

offset a portion of the octane loss caused 

by saturating the benzene if the unit has 

sufficient capacity to treat both the fivecarbon hydrocarbons normally sent to 

the unit as well as the newly rerouted 

six-carbon hydrocarbons. Also, many 

refineries produce a high-octane 

blendstock called alkylate. Refiners can 

alter their refineries to produce more 

alkylate or they may be able to purchase 

alkylate on the open market. Not only is 

alkylate moderately high in octane (93 

or 94 octane numbers), but it converts 

four-carbon (i.e., butane) compounds 

that are too volatile to be blended in 

large amounts into the gasoline pool 

into heavier compounds that can be 

readily blended into gasoline, thus 

increasing gasoline volume. 

All these means available to refiners 

for recovering the octane loss associated 

with gasoline benzene reductions are 

commercially demonstrated, and we did 

not receive any comments questioning 

our reliance on them at proposal for 

maintaining the octane of the gasoline 

pool in the proposal. Therefore, we 

conclude that it is feasible for refiners 

to recover the octane loss associated 

with benzene control. 

ii. Appropriateness of the 0.62 vol% 

Average Benzene Content Standard 

As discussed above, we received 

many comments about the proposed 

level of the benzene standard. Many 

commenters advocated a more stringent 

standard, generally pointing to 

refineries currently producing gasoline 

with benzene levels below the proposed 

0.62 vol% standard and stating that the 

average standard should be sufficiently 

stringent that all refineries, especially 

those with higher benzene levels, would 

be required to use similar technologies 

and achieve similarly low levels. We 

also received broad support for the 0.62 

vol% standard in the comments from 

the refining industry, although several 

small refiners opposed imposing a 

benzene standard and argued for relief 

for small refiners if EPA implemented 

the proposed standard. One importer 

was concerned that the standard of 0.62 

vol% could make it more difficult for 

importers to find compliant gasoline 

shipments and proposed a standard of 

1.0 vol%. None of the commenters 

opposing the 0.62 vol% standard 

provided analytical support for a less 

stringent standard or addressed how a 

less stringent standard might reflect the 

greatest emission reductions achievable 

based on the statutory factors. 

In the proposal, EPA described in 

detail what we believe would be the 

consequences of average standards of 

different stringencies to the overall goals 

of the program (see 71 FR 15866–67). 

These anticipated consequences relate 

in large part to how we believe refiners 

would respond to the benzene averaging 

and benzene credit trading provisions 

that were integral to the proposed 

program. For the final rule, we have 

reassessed how we believe refiners 

would respond to different average 

standards. We continue to believe that 

increasing the stringency of the average 

benzene standard would have the effect 

of reducing the number of benzene 

credits generated, since fewer refineries 

are likely or able to take actions to 

significantly reduce benzene further 

than required by the standard. This 

would reduce the liquidity of the credit 

trading market. As discussed in section 

VI.A.2, a well functioning averaging, 

banking, and trading program is integral 

to the achievability of the benzene 

standard. With fewer credits available 

that are affordable as an alternative to 

immediate capital investment, 

investment in relatively expensive 

benzene saturation equipment would be 

necessary for a greater number of 

refiners. We specifically considered a 

level of 0.50 vol% for the average 

standard, which we expected would 

require all refineries to install the most 

expensive benzene control technologies. 

We concluded that this level would 

clearly not be achievable, considering 

cost. In a related analysis, we also 

showed that if, contrary to our 

expectations, credits were not easily 

available as a compliance option, there 

are several refineries for which it may 

be technologically feasible to reach 

benzene levels below 0.62 vol%, but 

only at costs far greater than for most 

other refiners. 

Decreasing the stringency of the 

standard would fail to meet our 

obligation under 202(l)(2) to set the 

most stringent standard achievable 

considering costs and other statutory 

factors. First, over the last several years 

RFG benzene levels have already been 

averaging around 0.62 vol%, and we 

have no information to suggest that this 

level is not technologically feasible for 

the rest of the gasoline pool as well. In 

fact, our analysis shows that this level 

is feasible for the pool of gasoline as a 

whole. Commenters did not provide any 

analysis that a standard of 0.62 vol% 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8483 

was not the greatest achievable after 

considering cost and the other statutory 

factors. Second, a standard less stringent 

than 0.62 vol% would not achieve a 

number of important programmatic 

objectives. As shown in Table VI.C–1 

below, a 0.62 vol% standard is 

necessary to satisfy the conditions on 

overall RFG toxics performance 

established by EPAct and thus to avoid 

the requirement for updated individual 

refinery baselines. We believe that any 

level for the standard above 0.62 vol% 

would require EPA to promulgate 

regulations requiring RFG refiners to 

continue to maintain individual 

refinery-specific baselines, adjusted to 

2001–2 as required by EPAct. The 

refining industry believes that this 

would continue to penalize the cleanest 

refineries, constrain their flexibility, and 

cause market inefficiencies that increase 

costs. They have been strongly 

supportive of a program that eliminates 

the need for individual refinery 

baselines. EPA agrees with these 

concerns, and believes that the 

nationwide ABT program allowed under 

this program will remove these impacts. 

Another of EPA’s policy objectives that 

has been strongly supported by the 

refining industry was establishing the 

same standard nationwide for the 

combined pool of RFG and CG. The 

level of 0.62 vol% allows us to establish 

a single combined program for RFG and 

CG. In addition, the level of 0.62 vol% 

for the standard allows us to streamline 

with confidence our toxics regulations 

for RFG and CG, so that this benzene 

program (along with the gasoline sulfur 

program) will become the regulatory 

mechanism used to implement the RFG 

and CG annual average toxics 

performance requirements and the 

annual average benzene content 

requirement for RFG. Further, we 

believe that with such a stringent 

benzene standard, refiners should have 

the certainty they need for their 

investment and planning decisions. 

Many comments that supported a 

more stringent standard pointed to 

average costs projected in the proposal 

that are higher than for the proposed 

standard, but are not large on a pergallon basis compared to other EPA fuel 

programs. However, these commenters 

did not address the wide range of 

compliance costs for individual 

refineries that we discuss in the 

proposal (see Chapter 9 of the proposed 

and final RIA documents). It is critical 

to recognize that as more stringent 

average standards are considered, the 

costs for many refineries begin to rise 

significantly, especially for some 

individual technologically-challenged 

refineries. This potential for high costs 

at more stringent average standards 

exists if, as we expect, the ABT program 

functions as it is designed to. If the ABT 

program operates less efficiently than 

projected, the costs for some individual 

refineries could be higher still. (We 

discuss issues related to the 1.3 vol% 

maximum average standard, which 

cannot be met through the use of 

credits, in section VI.A.1.d, ‘‘Upper 

Limit Benzene Standard,’’ below.) 

Based on our analysis of the projected 

response of the refining industry to an 

average benzene standard, we are 

finalizing the 0.62 vol% standard as 

proposed. We believe that this average 

benzene standard of 0.62, in the context 

of the associated ABT program and the 

1.3 vol% maximum average standard, 

results in the greatest reductions 

achievable, taking into account cost and 

the other statutory factors in CAA 

202(l)(2). 

iii. Timing of the Average Standard 

Section 202(l)(2) requires that we 

consider lead time in adopting any fuel 

control for MSATs. We proposed that 

refiners and importers meet the 0.62 

vol% average benzene standard 

beginning January 1, 2011 (January 1, 

2015 for small refiners). This date was 

based on the industry experience that 

most of the technological approaches 

that we believe refiners will apply—

rerouting of benzene precursors around 

the reformer and use of an existing 

isomerization unit—will take less than 

two years. The more capital intensive 

approaches—saturation and 

extraction—generally take two to three 

years to complete. The January 1, 2011 

date provides nearly four years of lead 

time. We believe this is an appropriate 

amount of lead time, even taking into 

account that other fuel control programs 

(notably the Nonroad Diesel program) 

will be implemented in the same time 

frame. 

Some commenters supported earlier 

start dates, referring in some cases to the 

experience of Canada in regulating 

gasoline benzene. However, these 

comments failed to acknowledge the 

less stringent Canadian standard (0.95 

vol%) which naturally takes less lead 

time to implement. No commenter 

provided information that challenged 

our assessments of the technical lead 

time for the range of benzene control 

approaches that will be implemented. 

Other commenters, mostly from the 

refining industry, supported a start date 

that would be at least four years after 

the date of the final rule. For the reasons 

described above, we do not believe this 

additional time is necessary for this 

program. We are finalizing a start date 

of January 1, 2011, as proposed. 

We discuss the lead time for the 1.3 

vol% maximum average standard, 

which takes effect July 1, 2012 for nonsmall refiners and importers, and July 1, 

2016 for small refiners, in the next 

section. 

d. Upper Limit Benzene Standard 

In the proposal, we discussed the 

potential concern that without an upper 

limit, some refiners may choose to allow 

their benzene levels to increase, or to 

remain unchanged indefinitely. 

However, we also said that once an 

average standard is in place, any 

increase in benzene levels will 

necessarily come at the cost of 

purchasing additional credits. We 

tentatively concluded that this 

downward pressure on benzene levels 

meant there would likely be no 

increases in benzene from any refinery, 

whether or not there was an upper limit. 

In fact, we concluded that this pressure 

would result in actual reductions at 

almost all refineries, especially into the 

future as refiners try to limit their 

reliance on credits as much as and 

whenever it is economical to do so (see 

71 FR 15867–68). 

We nonetheless considered the 

implications of an upper limit on the 

actual level of benzene in the gasoline 

that refiners produce (as opposed to the 

level achieved using credits). (See 71 FR 

15678–79.) We considered an upper 

limit both in the form of a per-gallon 

benzene cap and a limit on the average 

of actual benzene in gasoline produced 

by a refinery (‘‘maximum average 

standard’’). Of these two approaches, we 

recognized that a per-gallon cap would 

be the more rigid. If every batch needed 

to meet the cap, there would be no 

opportunity to offset benzene spikes 

with lower-benzene production at other 

times. Even during times of normal 

operation, our review of refinery batch 

data indicated that unavoidable wide 

swings commonly occur in the benzene 

content of gasoline batches, even for 

refineries that have relatively low 

benzene levels on average. A per-gallon 

cap could result in refiners halting 

gasoline production during short-term 

shut-downs of benzene control 

equipment or in other temporary 

excursions in benzene levels. Unless a 

per-gallon limit were generous enough 

or included case-by-case exceptions 

(eroding the possible benefit of the cap), 

many refiners would likely need to 

implement much deeper and more 

costly reductions in benzene than 

would otherwise be necessary, simply to 

protect against such fluctuations. For 

some refiners, we concluded, a cap 


pwalker on PROD1PC71 with RULES_2
8484 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

could make complying with the 

program prohibitively expensive. 

The other option on which we 

solicited comment, a maximum average 

standard, would be more flexible. A 

maximum average standard would limit 

the average benzene content of the 

actual production at each refinery over 

the course of the year, regardless of the 

extent to which credits may have been 

used to comply with the 0.62 vol% 

average standard. Thus, a maximum 

average standard would allow for shortterm benzene fluctuations as long as the 

annual average benzene level of actual 

production was less than that upper 

limit. 

Several commenters stated that an 

upper limit would add costs without 

resulting in additional benefits, and 

supported a program without upper 

limits. Other commenters, however, 

expressed serious concerns about the 

potential consequences of a program 

without upper limits. Several 

commenters were concerned that under 

the program as proposed, it would be 

possible for refiners to maintain 

benzene levels well above the standard 

indefinitely while complying through 

the use of credits, thus potentially 

reducing the benefits of the program 

where this gasoline is used. Some 

commenters noted that under the 

proposed program, gasoline in some 

areas could still have significantly 

higher benzene levels than in other 

parts of the country. These commenters 

believe that these projected disparities 

raise issues of fairness. While our 

modeling of the proposed average 

standard suggested that all refineries 

were likely to reduce their benzene 

levels to some extent and that there 

would be significant reductions in 

gasoline benzene levels in each PADD, 

the commenters noted that an upper 

limit would provide a guarantee of 

reduction to at least the level of the 

upper limit. 

After evaluating the results of our 

updated refinery analysis and 

considering all of the comments, we 

have reconsidered the appropriateness 

of an upper limit standard. For the 

reasons discussed above, we continue to 

believe that a per-gallon cap for CG 

would be inappropriate for a benzene 

control program due to actions 

refineries would need to take to protect 

against common fluctuations in benzene 

content, and the related adverse cost 

and energy implications if refineries 

invest in deeper benzene reductions or 

need to temporarily shut down. In 

contrast, the per-gallon cap for RFG of 

1.3 vol%, which is currently in place, 

functions differently than would a pergallon cap that applied to both the RFG 

and CG pools. The per-gallon cap for 

RFG alone is appropriate because the 

CG pool provides an outlet for batches 

of higher benzene RFG. However, if 

such a cap were applied to CG as well, 

refiners would be left without an outlet. 

As we said in the proposal, any 

meaningful level for a per-gallon cap 

applying to CG would thus overly 

restrict the normal fluctuations in 

gasoline benzene (see 71 FR 15869). 

On the other hand, we now believe 

that the program should include a 

maximum average benzene standard, set 

at an appropriate level. The maximum 

average standard has the strong 

advantage of ensuring that the benzene 

content of gasoline produced by each 

refinery (or imported by each importer) 

will average no higher than this 

standard, regardless of the use of 

credits, providing greater assurance that 

actual in-use benzene reductions more 

clearly reflect our modeled projections 

which form the basis for this rule. At the 

same time, the maximum average 

standard avoids the serious drawbacks 

of a per-gallon cap. 

Our refinery modeling is state of the 

art, but it cannot predict with high 

confidence each refinery’s actions and 

how benzene trading will occur in each 

instance. We have done a refinery-byrefinery assessment of the most 

economical decisions we believe the 

industry will make to comply with the 

standard. However, in developing the 

model, we did not have access to 

specific information on many refineries, 

much of which is confidential business 

information. To fill these gaps, we used 

broader industry average information for 

a number of key model input parameters 

(including benzene levels in crude oil 

and in gasoline blendstocks, individual 

refinery unit throughput and operating 

conditions, distillation ‘‘cut points,’’

and future refinery expansions). Since 

there is wide variation in these 

important parameters among different 

refineries that impacts their baseline 

benzene levels and their opportunities 

for control, our model’s assumptions 

inherently vary from actual refinery 

circumstances. Furthermore, by 

necessity, our model assumes that all 

refineries will, in effect, work 

collectively to make the most 

economical investment decisions on a 

nationwide basis, as though each knew 

in advance the investment decisions of 

the others. In reality, each individual 

refinery will be making its decisions 

independently of each other, based on 

very limited information about other 

refineries’ actions. In addition, our 

model assumes that refiners will limit 

their actions to only treat the principal 

benzene-containing stream (reformate). 

There are individual circumstances 

where it may be economical to also treat 

other refinery streams. If the benzene in 

these other streams is indeed treated by 

some refineries, it is possible that 

sufficient credits might be generated to 

allow more refineries to avoid benzene 

reductions altogether by simply 

purchasing credits. Consequently, 

although our refinery-by-refinery 

modeling predicts significant benzene 

reductions in all areas nationwide, 

individual refineries might continue to 

have gasoline with higher benzene 

levels than the model predicts. This 

may also result in higher regional 

variation in gasoline benzene levels 

than the model predicts. Thus, we 

cannot dismiss this possibility with a 

high degree of confidence. 

For these reasons, we believe that the 

addition of a maximum average 

standard to the 0.62 average standard 

provides far greater assurance that 

refineries will control benzene in the 

future as projected—and certainly will 

not increase benzene levels to be greater 

than the level of the maximum average 

standard. Furthermore, through 

selection of an appropriate level for the 

maximum average standard, we believe 

that we are achieving this goal with a 

minimal impact on the overall costs of 

the program. 

We did not originally propose a 

maximum average standard, largely 

because of our interpretation of our 

modeling done for the proposal. That 

modeling indicated that adding a 

maximum average standard would 

result in significantly more benzene 

reduction in some areas, but that these 

increases would cause other areas to 

experience slightly smaller benzene 

reductions (see 71 FR 15903). Our 

updated modeling results are similar. In 

the proposal, we considered this 

potential for smaller benzene reductions 

in some areas to be a reason not to 

propose a maximum average standard. 

However, upon further evaluation of 

these modeling results, given the level 

of uncertainty in the model to predict 

individual refinery and regional 

benzene levels (as discussed above), we 

do not have confidence in the size of 

any offsetting increases in benzene 

levels in other areas, or even whether 

they would occur. In addition, we 

recognize that some of the refiners that 

the model predicts would reduce 

benzene slightly less (creating the 

apparent offsetting regional effects) may 

in fact decide to overcomply with the 

standard in order to maintain a 

compliance ‘‘safety margin,’’ regardless 

of the presence of a maximum average 

standard, and regardless of the strength 

of the market for the generated credits. 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8485 

In light of this, we do not think it 

warrants giving up the benefits resulting 

from the inclusion of the maximum 

average standard. 

Absent concern about any measurable 

offsetting effects from a maximum 

average standard, we believe that the 

major benefit of such a standard can and 

should be pursued. That is, the program 

can achieve increased certainty that the 

significant gasoline benzene reductions 

across all parts of the nation that our 

modeling projects will indeed occur, 

and thus that regional variations in 

gasoline benzene levels will indeed be 

minimized as we project. 

We believe that setting the maximum 

average standard at a level of 1.3 vol% 

accomplishes the goal of reasonably 

assuring lower benzene levels for all 

refineries while balancing the negative 

aspects of more- and less-stringent 

benzene standards. Virtually all the 

commenters who supported a maximum 

average standard agreed that 1.3 vol% 

would be a reasonable level for such a 

standard. EPA agrees. Implementing a 

maximum average standard lower than 

1.3 vol% would begin to significantly 

increase the number of refineries that 

would need to install the more 

expensive benzene reduction 

equipment. This would quickly 

diminish the value of the flexibility 

provided by the ABT program and thus 

force an increasing number of refineries 

to make expenditures in benzene 

control that could otherwise be smaller 

or avoided entirely, significantly 

increasing the overall cost of the 

program. Conversely, a maximum 

average standard greater than 1.3 vol% 

would require progressively fewer 

refineries to take action to reduce their 

benzene levels. This would in turn 

provide less assurance that actual 

benzene levels would be broadly 

achieved. As shown in detail in Chapter 

9 of the RIA, the addition of the 1.3 

vol% standard has minimal impact on 

the overall costs of the program. It is for 

this reason that we find that the 0.62 

vol% annual average standard, in 

tandem with the 1.3 vol% maximum 

average standard, represents the greatest 

benzene reductions achievable 

considering cost, energy supply, and 

other enumerated statutory factors. 

We believe that it is very important to 

monitor levels of benzene as refiners 

and importers begin to respond to the 

average and maximum average 

standards. EPA currently collects 

information on benzene and several 

other gasoline parameters for every 

batch of gasoline produced in or 

imported into the U.S., and publishes it 

in aggregate form on the EPA Web site. 

By January 1, 2011, we plan to begin 

publishing a more detailed annual 

report on gasoline quality. We will 

present this data on a PADD-by-PADD 

basis (to the extent that protection of 

confidential business information 

allows). We expect that these reports 

will be a valuable tool to stakeholders 

and members of the public who are 

interested in following the real-world 

progress of this rule’s gasoline benzene 

reductions. 

Among other changes discussed in 

section VIII below, our updated 

refinery-by-refinery model uses yearround 2004 gasoline production data as 

a starting point (replacing 2003 summer 

production data used in the proposal) 

and incorporates updated crude oil and 

benzene prices. The model thus 

generates updated predictions of the 

responses of refineries to the benzene 

standards. Our updated analysis shows 

that with the 0.62 vol% average 

standard and the maximum average 

benzene standard of 1.3 vol%, benzene 

levels will be reduced very significantly 

in all parts of the country. However, a 

degree of variation will continue to 

exist, due to the wide variety of refinery 

configurations, crude oil supplies, and 

approaches to benzene control, among 

other factors. This remaining variation 

is clearly legally permissible, 

notwithstanding the reasonable 

objective of assuring that reductions 

occur both regionally and nationally, 

because we do not read CAA section 

202(l)(2) as requiring uniform gasoline 

benzene levels in each area of the 

country, since the standard is to be 

technology-based considering costs and 

other factors which vary considerably 

by region and by refinery. On the other 

hand, the maximum average standard 

will have the appropriate effect of 

directionally providing a greater degree 

of geographic uniformity of gasoline 

benzene levels and these levels remain 

achievable considering cost and the 

other enumerated factors. Reducing 

gasoline benzene levels on both a 

national and regional basis is within the 

discretion of the Administrator, since 

section 202(l)(2) does not specify 

whether the maximum degree of 

emission reductions are to be achieved 

nationally, regionally, or both. 

The 1.3 vol% maximum average 

standard will become effective 18 

months after the 0.62 vol% average 

standard, on July 1, 2012, and on July 

1, 2016 for small refiners. While there 

is ample lead time for non-small refiners 

to meet the 0.62 vol% standard by 

January 1, 2011, we believe that 

staggering the implementation dates 

will ensure that the implementation of 

the programs by the refining industry is 

as smooth and efficient as possible. An 

important aspect of the design of this 

program as proposed is the recognition 

that not all of the benzene reduction 

would occur at once. As discussed in 

detail in section VI.A.2.b below, we 

expect that individual refiners will use 

the ABT program to schedule their 

benzene control expenditures in the 

most efficient way, using the early 

credit and standard credit provisions. 

This will essentially create a gradual 

phasing-in of the reductions in gasoline 

benzene content, beginning well before 

the initial compliance date of January 1, 

2011 and spreading out industry-wide 

compliance activities over several years. 

Since the 1.3 vol% standard may not be 

met using credits, we have set the 

implementation dates for this standard 

such that the credit program can 

continue to be fully utilized for an 

additional 18 months after the effective 

date of the 0.62 vol% average standard 

to allow the intended phasing-in of the 

program to occur (i.e., there will be 18 

additional months during which the 

0.62 vol% average standard may be 

achieved exclusively by using credits). 

We acknowledge that by 

incorporating the 1.3 vol% maximum 

average standard into the program, we 

are creating additional compliance 

challenges for a small number of 

refineries that might have relied on 

credits but will now need to install 

capital equipment to meet the 1.3 vol% 

maximum average standard. Most 

refiners will need to take these steps by 

July 1, 2012. Small refiners will need to 

take these steps four years later, by July 

1, 2016. Although we believe that most 

(possibly all) refiners will be able to 

install appropriate benzene control 

equipment by these future dates, there 

may be a small number of refiners that 

continue to face significant financial 

hurdles as these dates approach. We 

have considered this concern, and we 

believe that the leadtime provided, 

including the longer leadtime for small 

refiners, and the hardship relief 

provisions discussed below, are 

sufficient to address any circumstances 

of severe economic impacts on 

individual refineries. We are making 

clear that serious economic difficulties 

in meeting the 1.3 vol% maximum 

average standard may be a basis for 

granting relief under the ‘‘extreme 

hardship’’ provision discussed in 

sectionVI.A.3. below. 

2. Description of the Averaging, 

Banking, and Trading (ABT) Program 

a. Overview 

We are finalizing a nationwide 

averaging, banking, and trading (ABT) 

program that allows us to set a more 


pwalker on PROD1PC71 with RULES_2
8486 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

190Refiners approved as small refiners under 

§ 80.1340. 

stringent annual average gasoline 

benzene standard than would otherwise 

be justifiable. The ABT program allows 

refiners and importers to choose the 

most economical compliance strategy 

(investment in technology, credits, or 

both) for meeting the 0.62 vol% annual 

average benzene standard. The 

flexibility afforded by the program is 

especially significant and needed given 

the considerable variation in existing 

gasoline benzene levels, which reflects 

important differences in crude oil 

composition and individual refinery 

design. 

From 2007–2010, refiners can 

generate ‘‘early credits’’ by making 

qualifying benzene reductions earlier 

than required. In 2011 and beyond, 

refiners and importers can generate 

‘‘standard credits’’ by producing/ 

importing gasoline with benzene levels 

below 0.62 volume percent (vol%) on an 

annual average basis. Credits may be 

used interchangeably towards 

compliance with the 0.62 vol% 

standard, ‘‘banked’’ for future use, and/ 

or transferred nationwide to other 

refiners/importers subject to the 

standard. In addition to the 0.62 vol% 

standard, refiners and importers must 

also meet a 1.3 vol% maximum average 

benzene standard beginning July 1, 

2012. To comply with the maximum 

average standard, gasoline produced by 

a refinery or imported by an importer 

may not exceed 1.3 vol% on an annual 

average basis. While the 1.3 vol% 

maximum average standard places a 

limitation on credit use, we believe that 

the ABT program still provides the 

refining industry with significant 

compliance flexibility as described 

below. 

b. Credit Generation 

i. Eligibility 

Under the ABT program, U.S. refiners 

(including ‘‘small refiners’’190) who 

produce gasoline by processing crude 

oil and/or intermediate feedstocks 

through refinery processing units (see 

§ 80.1270) are eligible to generate both 

early and standard benzene credits. 

Foreign refiners with individual refinery 

baselines established under § 80.910(d) 

who imported gasoline into the U.S. in 

2004–2005 are also eligible to generate 

early credits. Importers, on the other 

hand, are only eligible to generate 

standard credits under the ABT 

program. As explained in the proposal, 

importers are precluded from generating 

early credits because, unlike refineries, 

they do not need additional lead time to 

comply with the standard since they are 

not investing in benzene control 

technology. Additionally, due to their 

variable operations, importers could 

potentially redistribute the importation 

of foreign gasoline to generate 

‘‘windfall’’ early credits with no 

associated benzene emission reduction 

value (see 71 FR 15874). 

Benzene credits may only be 

generated on gasoline which is subject 

to the benzene requirements as 

described at § 80.1235. This excludes 

California gasoline (gasoline produced 

or imported for use in California) but 

includes gasoline produced by 

California refineries for use outside of 

California. Despite the fact that 

California gasoline is not covered by 

this program, EPA sought comment on 

whether and how credits could be 

generated based on California gasoline 

benzene reductions and applied towards 

non-California gasoline compliance (see 

71 FR 15873). We did not receive any 

substantive comments on this matter but 

nonetheless considered the feasibility of 

such a program (described in more 

detail in the Summary and Analysis of 

Comments). We concluded that such a 

program could be very problematic to 

implement and, based on the apparent 

lack of interest by California gasoline 

refineries, it is likely that there would 

be very few participants. As a result, we 

have decided to maintain the proposed 

ABT provision which excludes 

California gasoline from generating 

credits. 

ii. Early Credit Generation 

To encourage early innovation in 

gasoline benzene control technology, 

refiners are eligible to generate early 

credits for making qualifying benzene 

reductions prior to the start of the 

program. Refiners must first establish 

individual benzene baselines for each 

refinery planning on generating early 

credits (discussed further in section 

VI.B.1). Benzene baselines are defined 

as the annualized volume-weighted 

benzene content of gasoline produced at 

a refinery from January 1, 2004 through 

December 31, 2005. To qualify to 

generate early credits, refineries must 

make operational changes and/or 

improvements in benzene control 

technology to reduce gasoline benzene 

levels in accordance with § 80.1275. 

Additionally, a refinery must produce 

gasoline with at least ten percent less 

benzene (on a volume-weighted annual 

average basis) than its 2004–2005 

baseline. The first early credit 

generation period is from June 1, 2007 

through December 31, 2007, and 

subsequent early credit generation 

periods are the 2008, 2009, and 2010 

calendar years (2008 through 2014 

calendar years for small refiners). 

We are setting a ten percent reduction 

trigger point for early credits to ensure 

that changes in gasoline benzene levels 

result from real refinery process 

improvements. Without a substantial 

trigger point, refiners could earn credits 

for the normal year-to-year fluctuations 

in benzene level at a given refinery 

allowed under MSAT1. These windfall 

credits could negatively impact the ABT 

program because—as reflections of 

normal variability—they would have no 

associated benzene emission reduction 

value. As described in the proposal, we 

believe that a percent reduction trigger 

point, as opposed to an absolute level or 

fixed reduction trigger point, is the most 

appropriate early credit validation tool 

considering the wide range in starting 

benzene levels. In addition, we believe 

that ten percent is an appropriate value 

for the trigger point because it prevents 

most windfall credit generation, yet is 

not so restrictive as to discourage 

refineries from making early benzene 

reductions (see 71 FR 15875). 

Once the ten percent reduction trigger 

point is met, refineries can generate 

credits based on the entire gasoline 

benzene reduction. For example, if in 

2008 a refinery reduced its annual 

average benzene level from a baseline of 

2.00 vol% to 1.50 vol% (below the 

trigger point of 0.90 × 2.00 = 1.80 vol%), 

its early benzene credits would be 

determined based on the difference in 

annual benzene content (2.00 ¥ 1.50 = 

0.50 vol%) divided by 100 and 

multiplied by the gallons of gasoline 

produced in 2008 (expressed in gallons 

of benzene). 

We proposed that refiners be 

prohibited from moving gasoline or 

gasoline blendstock streams from one 

refinery to another in order to generate 

early credits (see 71 FR 15875). We 

received comments indicating that 

many refiners trade blending 

components between refineries to 

maximize gasoline production while 

minimizing cost, and that such 

companies should not be prohibited 

from generating early credits. In fact, we 

are not prohibiting these types of 

normal refinery activities, nor are we 

prohibiting such refineries from 

participating in the early credit 

program. We are simply requiring that 

all refineries make real operational 

changes and/or improvements in 

benzene control technology to reduce 

gasoline benzene levels in order to be 

eligible to generate early credits. In most 

cases, moving gasoline blendstocks from 

one refinery to another does not result 

in a net benzene reduction (one refinery 

gets cleaner at the expense of another 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8487 

191Standard credit generation begins in 2011, or 

2015 for small refiners, regardless of whether a 

refinery pursues early compliance with the 0.62 

vol% standard under § 80.1334. 

getting dirtier). Accordingly, refineries 

that lower their benzene levels 

exclusively through blendstock trading 

(no additional qualifying reductions) are 

not eligible to generate early credits 

under the ABT program. An exception 

exists for refineries that transfer 

benzene-rich reformate streams for 

processing at other refineries with 

qualifying post-treatment capabilities, 

e.g., extraction or benzene saturation 

units. Under this scenario, the 

transferring refinery would be eligible to 

generate early credits because a real 

operational change to reduce gasoline 

benzene levels has been made. The 

regulations at § 80.1275 have been 

modified to more clearly reflect our 

intended early credit eligibility 

provisions, and specifically address 

blendstock trading. 

iii. Standard Credit Generation 

Refiners and importers may generate 

standard credits for overcomplying with 

the 0.62 vol% gasoline benzene 

standard on a volume-weighted annual 

average basis in 2011 and beyond (2015 

and beyond for small refiners).191 For 

example, if in 2011 a refinery’s annual 

average benzene level is 0.52, its 

standard benzene credits would be 

determined based on the margin of 

overcompliance with the standard 

(0.62¥0.52 = 0.10 vol%) divided by 100 

and multiplied by the gallons of 

gasoline produced during the 2011 

calendar year (expressed in gallons of 

benzene). Likewise, if in 2012 the same 

refinery were to produce the same 

amount of gasoline with the same 

average benzene content, they would 

earn the same number of credits. The 

standard credit generation opportunities 

for overcomplying with the standard 

continue indefinitely (see 71 FR 15872). 

c. Credit Use 

As proposed, we are finalizing a 

program where refiners and importers 

can use benzene credits generated or 

obtained under the ABT program to 

meet the 0.62 vol% annual average 

standard in 2011 and beyond (2015 and 

beyond for small refiners). We are also 

finalizing a 1.3 vol% maximum average 

standard which takes effect in July 2012 

(July 2016 for small refiners). The 

maximum average standard must be met 

based on actual refinery benzene levels, 

essentially placing a cap on total credit 

use. As discussed above in section 

VI.A.1.d, we believe this is an 

appropriate strategy for addressing the 

current disparity in gasoline benzene 

levels throughout the country. 

Overall, the ABT program will allow 

for a more gradual phase-in of the 0.62 

vol% benzene standard and a more costeffective program. The early credit 

program gives refiners an incentive to 

make initial gasoline benzene 

reductions sooner than required. The 

early credits generated can be used to 

provide refiners with additional lead 

time to make their final (more 

expensive) investments in benzene 

control technology. As a result, some 

benzene reductions will occur prior to 

the start of the program while others 

will lag (within the realms of the credit 

life provisions described below). We 

anticipate that there will be enough 

early credits generated to allow refiners 

to postpone their final investments by 

up to three years, which coincides with 

the maximum time afforded by the early 

credit life provisions. In addition, we 

predict that standard credits generated 

during the early credit lag period will 

allow for an additional 16 months of 

lead time. The result is a gradual phasein of the 0.62 vol% benzene standard 

beginning in June 2007 and ending in 

July 2016, as shown below in Figure 

VI.A–1. Without early credits, refineries 

would be immediately constrained by 

the 0.62 vol% standard and likely 

forced to make their final investments 

sooner (including those necessary to 

meet the 1.3 vol% maximum average 

standard). 


pwalker on PROD1PC71 with RULES_2
8488 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

192ABT program cost calculations consider future 

gasoline growth and the time value of money. The 

gasoline growth rate from 2004–2012 was estimated 

by the refinery cost model and future growth rates 

were obtained from EIA’s AEO 2006. The costs and 

resulting cost savings estimated for the phase-in 

period were calculated based on compliance costs 

presented in RIA Section 9.6.2 and adjusted back 

to 2007 to account for the time-value of money 

based on a 7% average rate of return. 

In addition to earlier benzene 

reductions and a more gradual phase-in 

of the 0.62/1.3 vol% standards (as 

shown above), the ABT program results 

in a more cost-effective program for the 

refining industry. Our modeling shows 

that allowing refiners to average 

benzene levels nationwide to meet the 

0.62 vol% standard reduces ongoing 

compliance costs by about 50% from 

0.51 to 0.27 cents per gallon (refer to 

RIA Section 9.6.2). Our modeling 

further shows that the early credit 

program we are finalizing results in the 

lowest possible compliance costs during 

the phase-in period. Without an early 

credit program, the total amortized 

capital and operating costs incurred by 

the refining industry during the phasein period is estimated to be $905 million 

(2003 dollars).192 With an early credit 

program, the total cost incurred during 

the same phase-in period is reduced to 

$608 million, providing about $300 

million in savings. In the absence of an 

ABT program altogether, the total cost 

incurred during the phase-in period 

would be $1.7 billion. As a result, the 

ABT program in its entirety could save 

the refining industry up to $1.1 billion 

in compliance costs from 2007–2015. 

For a more detailed discussion on 

compliance costs, refer to section VIII.A. 

For more information on how the cost 

savings associated with the ABT 

program were derived, refer to RIA 

Section 6.5.5.12. 

Under the ABT program, early and 

standard benzene credits can be used 

interchangeably towards compliance 

with the 0.62 vol% standard (within the 

realms of the credit life provisions 

described below). Each credit 

(expressed in gallons of benzene) can be 

used on a one-for-one basis to offset the 

same volume of benzene produced/ 

imported in gasoline above the 

standard. For example, if in 2011 a 

refinery’s annual average benzene level 

was 0.72, the number of benzene credits 

needed to comply would be determined 

based on the margin of 

undercompliance with the standard 

(0.72¥0.62 = 0.10 vol%) divided by 100 

and multiplied by the gallons of 

gasoline produced during the 2011 

calendar year. The credits needed 

would be expressed in gallons of 

benzene. 

To enable enforcement of the 

program, the ABT program we are 

finalizing includes a limit on credit life 

(for both early and standard credits), a 

limit on the number of times credits 

may be traded, and a prohibition on 

outside parties taking ownership of 

credits. We believe that these provisions 

are necessary to ensure that the full 

benzene reduction potential of the 

program is realized and that the credit 

trading program is equitably 

administered among all participants. In 

the proposal, we acknowledged 

concerns that credit use limitations 

might in some circumstances 

unnecessarily hamper the credit market. 

Specifically, we requested comment on 

ways that some of the provisions might 

be reduced or eliminated while still 

maintaining an enforceable program (see 

71 FR 15872). Although we received 

many comments on the proposed ABT 

program, we did not receive any 

substantive comments indicating that 

the proposed credit provisions would be 

a significant burden on refiners or 

importers. Likewise, we did not receive 


pwalker on PROD1PC71 with RULES_2ER26FE07.010</GPH>
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8489 

any substantive comments suggesting 

that the removal of such restrictions 

would greatly improve the efficiency of 

the ABT program. For these reasons, we 

are finalizing such provisions for credit 

use (described in more detail below). 

i. Early Credit Life 

Early credits must be used towards 

compliance within three years of the 

start of the program; otherwise they will 

expire and become invalid. In other 

words, early credits generated or 

obtained under the ABT program must 

be applied to the 2011, 2012, or 2013 

compliance years. Similarly, early 

credits generated/obtained and 

ultimately used by small refiners must 

be applied to the 2015, 2016, or 2017 

compliance years. The result is that no 

early credits may be used toward 

compliance with the 2014 year. This 

break in the early credit application 

period may help funnel surplus early 

credits facing expiration to small 

refiners in need. 

ii. Standard Credit Life 

Standard credits must be used within 

five years from the year they were 

generated (regardless of when/if they are 

traded). For example, standard credits 

generated in 2011 would have to be 

applied towards the 2012 through 2016 

compliance year(s); otherwise they 

would expire and become invalid. To 

encourage trading to small refiners, 

there is a credit life extension for 

standard credits traded to and 

ultimately used by small refiners. These 

credits may be used towards compliance 

for an additional two years, giving 

standard credits a maximum seven-year 

life. For example, the same abovementioned standard credits generated in 

2011, if traded and used by a small 

refiner, would have until 2018 to be 

applied towards compliance before they 

would expire. 

iii. Consideration of Unlimited Credit 

Life 

Since compliance with the gasoline 

benzene standards is determined at the 

refinery or importer level, there are no 

enforceable downstream standards 

associated with this rulemaking. Thus, 

it is critical that EPA be able to conduct 

enforcement at the refinery or importer 

level. Additionally, since EPA 

enforcement activities are limited by the 

five-year statute of limitations in the 

Clean Air Act, allowing credit life 

beyond five years poses serious 

enforcement issues. As a result, we are 

finalizing three-year early credit life and 

five-year standard credit life provisions 

(as just described above). We believe 

that these credit life provisions are 

limited enough to satisfy enforcement 

and trading concerns yet sufficiently 

long to provide necessary program 

flexibility. However, we recognize that 

extending credit life might result in 

increased program flexibility. 

Accordingly, in the proposal, EPA 

sought comment on different ways to 

structure the program that would allow 

for unlimited credit life. Specifically, 

we asked for comment on how 

unlimited credit life could be beneficial 

to the program and/or how the 

associated increase in recordkeeping 

and enforcement issues could be 

mitigated (see 71 FR 15872). Comments 

received provided no support for why 

unlimited credit life would improve 

program flexibility or how enforcement 

issues could be addressed. Furthermore, 

we did not receive any comments 

suggesting that the proposed credit life 

provisions would significantly hamper 

trading. As such, we are finalizing the 

credit life provisions as proposed. 

iv. Credit Trading Provisions 

It is possible that benzene credits 

could be generated by one party, 

subsequently transferred or used in 

good faith by another, and later found 

to have been calculated or created 

improperly or otherwise determined to 

be invalid. If this occurs, as in past 

programs, both the seller and purchaser 

will have to adjust their benzene 

calculations to reflect the proper credits 

and either party (or both) could be 

determined to be in violation of the 

standards and other requirements if the 

adjusted calculations demonstrate 

noncompliance with the 0.62 vol% 

standard. 

Credits must be transferred directly 

from the refiner or importer generating 

them to the party using them for 

compliance purposes. This ensures that 

the parties purchasing them are better 

able to assess the likelihood that the 

credits are valid. An exception exists 

where a credit generator transfers 

credits to a refiner or importer who 

inadvertently cannot use all the credits. 

In this case, the credits can be 

transferred a second time to another 

refiner or importer. After the second 

trade, the credits must be used or 

terminated. In the proposal, we 

requested comment on whether more 

than two trades should be allowed—

specifically, whether three or four trades 

were more appropriate and/or more 

beneficial to the program (see 71 FR 

15876). We did not receive any 

comments providing analytical support 

for an additional number of trades. We 

are finalizing a maximum of two trades, 

consistent with other recent 

rulemakings, in order to provide 

flexibility while still maintaining 

enforceability as discussed in the 

proposal. 

There are no prohibitions against 

brokers facilitating the transfer of credits 

from one party to another. Any person 

can act as a credit broker, regardless of 

whether such person is a refiner or 

importer, as long as the title to the 

credits is transferred directly from the 

generator to the user. This prohibition 

on outside parties taking ownership of 

credits was promulgated in response to 

problems encountered during the 

unleaded gasoline program and has 

since appeared in subsequent fuels 

rulemakings. To reevaluate potential 

stakeholder interest in removing this 

prohibition, EPA sought comment on 

this provision in the proposal—

specifically, whether there were 

potential benefits to allowing other 

parties to take ownership of credits and 

how such a program would be enforced 

(see 71 FR 15876). We did not receive 

any comments on this issue and 

continue to believe that our proposal is 

appropriate. Therefore, to maintain 

maximum program enforceability and 

consistency with all of our other ABT 

programs for mobile sources and their 

fuels, we are maintaining our existing 

prohibition on outside parties taking 

ownership of credits. 

We are not imposing any geographic 

restrictions on credit trading. Credits 

may be traded nationwide between 

refiners or importers as well as within 

companies to meet the 0.62 vol% 

national average benzene standard. We 

believe that restricting credit trading 

could reduce refiners’ incentive to 

generate credits and hinder trading 

essential to this program. In addition, 

since there are no fuel-availability 

issues associated with this rule (as 

opposed to the case of the ultra-low 

sulfur diesel program), there is no need 

to impose a geographic restriction. 

3. Provisions for Small Refiners and 

Refiners Facing Hardship Situations 

In developing the MSAT2 program, 

we evaluated the need for and the 

ability of refiners to meet the proposed 

benzene standards as expeditiously as 

possible. We continue to believe that it 

is feasible and necessary for the vast 

majority of the program to be 

implemented in the time frame stated 

above to achieve the air quality benefits 

as soon as possible. Further, we believe 

that refineries owned by small 

businesses generally face unique 

hardship circumstances as compared to 

larger refiners. We are also finalizing 

provisions for other refiners to allow 

them to seek limited relief from 

hardship situations on a case-by-case 


pwalker on PROD1PC71 with RULES_2
8490 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

basis. These provisions are discussed in 

detail below. 

a. Provisions for Small Refiners 

We proposed several special 

provisions for refiners that are approved 

as small refiners (see VI.A.3.a.ii below). 

This is due to the fact that small refiners 

generally have greater difficulty than 

larger companies (including those large 

companies that own small-capacity 

refineries) in raising capital for 

investing in benzene control equipment. 

Small refiners are also likely to have 

more difficulty in competing for 

engineering resources and in completing 

construction of the needed benzene 

control (and any necessary octane 

recovery) equipment in time to meet the 

required standards (see also the more 

detailed discussion at 71 FR 15877). 

As explained in the discussion of our 

compliance with the Regulatory 

Flexibility Act below in section XII.C 

and in the Final Regulatory Flexibility 

Analysis in Chapter 14 of the RIA, we 

carefully considered the impacts of the 

regulations on small businesses. Most of 

our analysis of small business impacts 

was performed as a part of the work of 

the Small Business Advocacy Review 

Panel (‘‘SBAR Panel’’, or ‘‘the Panel’’) 

convened prior to the proposed rule, 

pursuant to the Regulatory Flexibility 

Act as amended by the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (SBREFA). (The final report of the 

Panel is available in the docket.) 

For the SBREFA process, EPA 

conducted outreach, fact-finding, and 

analysis of the potential impacts of our 

regulations on small businesses. Based 

on these factors and analyses by all 

Panel members, the Panel concluded 

that small refiners in general would 

likely experience a significant and 

disproportionate financial hardship in 

reaching the objectives of the MSAT2 

program. We proposed many of the 

provisions recommended by the Panel 

and we are finalizing these provisions in 

this action. 

i. Definition of Small Refiner for 

Purposes of the MSAT2 Small Refiner 

Provisions 

The criteria to qualify for small refiner 

status for this program are in most ways 

the same as those required in the 

Gasoline Sulfur and the Highway and 

Nonroad Diesel rules. However, there 

are some differences; as stated in our 

more recent fuels programs, we believe 

that it is necessary to limit relief to 

those small entities most likely to 

experience adverse economic impacts 

from fuel regulations. We are finalizing 

the following provisions for determining 

small refiner status. 

To qualify as a small refiner, a refiner 

must demonstrate that it meets all of the 

following criteria: (1) Produced gasoline 

from crude during calendar year 2005; 

(2) had no more than 1,500 employees, 

based on the average number of 

employees for all pay periods from 

January 1, 2005 to January 1, 2006; and, 

(3) had an average crude oil capacity 

less than or equal to 155,000 barrels per 

calendar day (bpcd) for 2005. We are 

likewise finalizing the provision 

requiring refiners to apply for, and for 

EPA to approve, a refiner’s status as a 

‘‘small refiner’’. 

Small refiner provisions are limited to 

refiners of gasoline from crude because 

they are the entities that bear the 

investment burden and the consequent 

economic hardship. Therefore, blenders, 

importers, and additive component 

producers are not eligible. For these 

same reasons, small refiner status is 

limited to those refiners that owned and 

operated the refinery during the period 

from January 1, 2005 through December 

31, 2005. This is consistent with the 

approach taken in the Nonroad Diesel 

rule, but we are revising the text to be 

more clear on this issue. 

In determining its crude oil capacity 

and total number of employees, a refiner 

must include the crude oil capacity and 

number of employees of any subsidiary 

companies, any parent companies, any 

subsidiaries of the parent companies, 

and any joint venture partners. As stated 

in the proposal, there was confusion in 

past rules regarding ownership. Thus, 

we proposed defining a parent company 

as any company (or companies) with 

controlling ownership interest, and a 

subsidiary of a company as any 

company in which the refiner or its 

parent(s) has a controlling ownership 

interest (see 71 FR 15878). We requested 

comment on these clarifications in the 

proposal, but did not receive any 

comments on these aspects of the small 

refiner definition. Therefore, we are 

finalizing the definition of parent 

company and related clarifying 

provisions such that the employees and 

crude capacity of all parent companies, 

and all subsidiaries of all parent 

companies, must be taken into 

consideration when evaluating 

compliance with these criteria. 

We received comments regarding the 

small refiner employee count and crude 

capacity criteria. These commenters 

stated that they believed that EPA’s 

criteria fail to provide relief to a small 

number of refiners whom they believe 

are similar in many respects to those 

refiners that will qualify as small under 

our criteria. The commenters pointed to 

recent Congressionally enacted 

programs, specifically the Energy Policy 

Act of 2005 (EPAct) and the American 

Jobs Creation Act of 2004 (Jobs Act), 

which use definitions that are different 

from the SBA definition, and from the 

criteria EPA is adopting in this rule. The 

EPAct focuses on refinery size rather 

than company size, and the Jobs Act 

focuses on refinery-only employees 

rather than employees company-wide. 

EPA has established the criteria for 

qualifying for small refiner relief based 

on the Small Business Administration’s 

(SBA) small business definition (per 13 

CFR 121.201). 

We do not believe that it would be 

appropriate to change the proposed 

small refiner employee count or crude 

capacity limit criteria to fit the 

definitions used in either of the two 

recent statutes. While Congress is able 

to establish special provisions for 

subsets of the industry in programs like 

those mentioned above, EPA 

appropriately focuses, under SBREFA 

and in this rulemaking, on 

consideration of relief on those refining 

companies that we believe are likely to 

face serious economic hardship as a 

result of compliance with the rule. 

Under programs subject to the EPAct 

and Jobs Act definitions, relief would be 

granted to refineries that are owned by 

larger companies, or companies that 

have additional sources of revenue 

(indicated by more employees and/or 

refining capacity), and also refineries 

owned by foreign governments. These 

definitions do not focus as directly on 

refiners which, due to their size, could 

incur serious adverse economic impact 

from fuel regulations; and EPA 

consequently is not adopting either of 

them in this rule. Further, SBA 

established its small business definition 

to set apart those companies which are 

most likely to be at an inherent 

economic disadvantage relative to larger 

businesses. We agree with the 

assessment that refiners of this size may 

be afforded special consideration under 

regulatory programs that have a 

significant economic impact on them 

(insofar as is consistent with Clean Air 

Act requirements). We continue to 

believe that it is most appropriate to 

remain consistent with our previous 

fuels programs and retain the criteria to 

qualify for small refiner status that have 

been used in the past (with some minor 

clarifications to avoid confusion), since 

these criteria best identify the class of 

small refiner which may incur 

disproportionate regulatory impact 

under the rule. We are therefore 

finalizing the small refiner qualification 

criteria that were proposed. 

As previously stated, our intent has 

been, and continues to be, limiting the 

small refiner relief provisions to the 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8491 

small subset of refiners that are likely to 

be seriously economically challenged as 

a result of the new regulations. We 

assume that new owners that purchase 

a refinery after December 31, 2005 do so 

with full knowledge of the proposed 

regulation. Given that they have the 

resources available to purchase the 

refinery assets, they are not in an 

economic hardship situation. Therefore, 

they should include compliance 

planning as part of their purchase 

decision. Similar to earlier fuel rules, 

we are finalizing a provision that a 

refiner that restarts a refinery in the 

future is eligible for small refiner status. 

In such cases, we will judge eligibility 

under the employment and crude oil 

capacity criteria based on the most 

recent 12 consecutive months before the 

application, unless we conclude from 

data provided by the refiner that another 

period of time is more appropriate. 

However, unlike past fuel rules, this 

will be limited to a company that owned 

the refinery at the time that it was shut 

down. New purchasers will not be 

eligible for small refiner status for the 

reasons described above. Companies 

with refineries built after January 1, 

2005 will also not be eligible for the 

small refiner hardship provisions, again 

for the reasons given above. 

Similar to previous fuel sulfur 

programs, we also proposed that refiners 

owned and controlled by an Alaska 

Regional or Village Corporation 

organized under the Alaska Native 

Claims Settlement Act are also eligible 

for small refiner status, based only on 

the refiner’s employee count and crude 

oil capacity (see 71 FR 15878). We did 

not receive any comments on this 

provision, and we are finalizing it in 

this action. 

ii. Small Refiner Status Application 

Requirements 

A refiner applying for status as a 

small refiner under this program is 

required to apply and provide EPA with 

several types of information by 

December 31, 2007. (The application 

requirements are summarized in section 

VI.B.2, below.) A refiner seeking small 

refiner status under this program must 

apply for small refiner status, regardless 

of whether the refiner had been 

approved or rejected for small refiner 

status under another fuel program. As 

with applications for relief under other 

rules, applications for small refiner 

status under this rule that are later 

found to contain false or inaccurate 

information will be void ab initio. 

iii. Small Refiner Provisions 

Delay in the Effective Date of the 

Standards 

We proposed that small refiners be 

allowed to postpone compliance with 

the 0.62 vol% benzene standard until 

January 1, 2015, four years after the 

general program would begin (see 71 FR 

15878). At such time, approved small 

refiners would be required to meet the 

0.62 vol% benzene standard. As stated 

in the proposal, this additional lead 

time is justified because small refiners 

face disproportionate challenges, which 

the additional lead time will help to 

mitigate. We requested comment on this 

proposed provision, and we received 

many comments supporting it and none 

opposing it. 

Normally a period of two to three 

years of lead time is required for a 

refiner to secure necessary financing 

and to carry out capital improvements 

for benzene control (see VI.A.1.c.i. 

above). Commenters specifically noted 

that additional lead time would allow 

small refiners to more efficiently obtain 

financing and contracts to carry out 

necessary capital projects (or to obtain 

credits) with less direct competition 

with non-small refiners for financing 

and for contractors to carry out capital 

improvements. Some commenters noted 

that they generally supported the 

proposed program of a 0.62 vol% 

benzene standard with no upper limit 

and the proposed small refiner relief. 

While we did not propose an upper 

limit, as discussed above in section 

VI.A.1, we have chosen to finalize a 1.3 

vol% refinery maximum average. 

The additional lead time also allows 

EPA to make programmatic adjustments, 

if necessary, before small refiners are 

required to comply with the benzene 

standards. As discussed below, we are 

finalizing a requirement that EPA 

review the program in 2012, leaving a 

number of years to adjust the program 

before small refiners are required to 

meet the benzene standards. The 

additional lead time for small refiners 

will also provide these refiners with 

three years of lead time following the 

review to take the review results into 

account in completing capital projects if 

necessary or desirable to meet the 

benzene standards. Based on these 

assessments, we are therefore finalizing 

a four-year period of additional lead 

time for small refiners for compliance 

with the 0.62 vol% benzene standard, 

until January 1, 2015 (and small refiners 

would continue to meet the 

requirements of MSAT1 until January 1, 

2015). Further, we are finalizing an 

additional 4 years of lead time for small 

refiners to comply with the 1.3 vol% 

maximum average benzene standard, 

until July 1, 2016. 

Early ABT Credit Generation 

Opportunities 

During the development of the 

proposal, we anticipated that many 

small refiners would likely find it more 

economical to purchase credits for 

compliance than to comply by making 

capital investments to reduce gasoline 

benzene. However, some small refiners 

indicated that they would make 

reductions to their gasoline benzene 

levels to fully or partially meet the 

proposed 0.62 vol% benzene standard. 

Therefore, we proposed that small 

refiners that take steps to meet the 

benzene requirement before January 1, 

2015 would be eligible to generate early 

credits (see 71 FR 15879). Current and 

previous fuels programs allow for credit 

generation opportunities to encourage 

early compliance, and extending this 

opportunity to small refiners, based on 

the small refiner effective date, is 

consistent with this objective. Small 

refiners generally supported this 

provision and we did not receive any 

adverse comments on it. 

Early credit generation opportunities 

will provide more credits for the 

MSAT2 ABT program and will help to 

achieve the air quality goals of the 

MSAT2 program earlier than otherwise 

required. We are therefore finalizing an 

early credit generation provision for 

small refiners. This is similar to the 

general early credit generation provision 

that is provided to all refiners, except 

that small refiners may generate early 

credits until January 1, 2015. As 

discussed in section VI.A.2.b.ii above, 

refineries must reduce their 2004–2005 

benzene levels by at least ten percent to 

generate early credits. This ten percent 

threshold is being set to ensure that 

changes in gasoline benzene levels 

result from real refinery process 

improvements, not just normal 

fluctuations in benzene levels at a given 

refinery (allowed under MSAT1). The 

small refiner early credit generation 

period will be from June 1, 2007 to 

December 31, 2014, after which 

standard credits may be generated 

indefinitely for those that overcomply 

with the 0.62 vol% annual average 

standard. 

Extended Credit Life 

During the SBREFA process, many 

small refiners expressed interest in 

relying upon credits as an ongoing 

compliance strategy for meeting the 0.62 

vol% gasoline benzene standard. 

However, several small refiners voiced 

concerns surrounding the idea of relying 

on the credit market to avoid large 


pwalker on PROD1PC71 with RULES_2
8492 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

capital costs for benzene control. One of 

their primary concerns was that credits 

might not be available and/or traded to 

small refiners in need. To increase the 

certainty that credits would be 

available, we proposed a two-year credit 

life extension for credits generated by or 

traded to small refiners (see 71 FR 

15879). Not only does this provision 

encourage trading to small refiners, it 

creates a viable outlet for credits facing 

expiration. Most small refiners 

supported the proposed credit life 

provision. However, one refiner 

suggested that we finalize unlimited 

credit life for credits traded to small 

refiners. Although unlimited credit life 

could have some perceived benefits, 

overall it poses serious enforcement 

problems. Therefore, for the reasons 

described above in VI.A.2.c.iii, we are 

not finalizing unlimited credit life for 

credits traded to small refiners. Further, 

we are finalizing a slightly modified 

version of the proposed small refiner 

extended credit life provision to better 

reflect its intended purpose. First, the 

two-year credit life extension pertains 

only to standard credits. The extension 

does not apply to early credits because 

refiners already have an incentive to 

trade early credits to small refiners. 

Based on the nature of the early credit 

life program (three-year life based on the 

start of the program) and small refiners’

delayed program start date (2015 as 

opposed to 2011), early credits traded to 

small refiners are already valid for an 

additional four years. Second, the twoyear credit life extension applies only to 

standard credits traded to small refiners. 

There is no need to extend credit life for 

credits generated by small refiners, 

because in this event, the small refiner 

would already have the utmost certainty 

that the credits would be available for 

use. 

ABT Program Review 

We proposed that we would perform 

a review of the ABT program (and thus, 

the small refiner flexibility options) by 

2012, one year after the general program 

begins (see 71 FR 15879). Coupled with 

the small refiner four-year additional 

lead time provision, the ABT program 

review after the first year of the overall 

program will provide small refiners 

with roughly three years, after learning 

the results of the review, to obtain 

financing and perform engineering and 

construction. We are committing to this 

provision today. The review will take 

into account the number of early credits 

generated industry-wide each year prior 

to the start of the MSAT2 program, as 

well as the number of credits generated 

and transferred during the first year of 

the overall benzene control program. In 

part to support this review, we are 

requiring that refiners submit precompliance reports, similar to those 

required under the highway and 

nonroad diesel programs. In addition, 

the first compliance report that refiners 

submit (for the 2011 compliance period) 

will provide important information on 

how many credits are actually being 

generated or utilized during the first 

year of the program. 

The ABT pre-compliance reports will 

be due annually on June 1 from 2008 

through 2011. The reports must include 

projections of how many credits will be 

generated and how many credits will 

need to be used at each refinery. The 

reports must also contain information 

on a refiner’s plans (for each refinery) 

for compliance with the benzene 

standard, including whether or not the 

refiner will utilize credits alone to 

comply with the standard. Refiners 

must also report any early credits that 

may have been transferred to another 

entity prior to January 1, 2011 and the 

sale price of those credits. 

In addition, ABT compliance reports 

will be due annually beginning 

February 28, 2012. For any refiner 

expecting to participate in the credit 

trading program (under § 80.1275 and/or 

§ 80.1290, the report must include 

information on actual credit generation 

and usage. Refiners must also provide 

any updated information regarding 

plans for compliance. EPA will publish 

the results of these refinery compliance 

reports and the results of our review as 

soon as possible to provide small 

refiners with information on the ABT 

program roughly three years prior to the 

small refiner compliance date. EPA will 

maintain the confidentiality of 

information from individual refiners 

submitted in the reports. We will 

present generalized summaries of the 

reports annually. 

If, following the review, EPA finds 

that the credit market is not adequate to 

support the small refiner provisions, we 

will revisit the provisions to determine 

whether or not they should be altered or 

whether EPA can assist the credit 

market (and small refiners’ access to 

credits). For example, the Panel 

suggested that EPA could consider 

actions such as: (1) The ‘‘creation’’ of 

credits by EPA that would be 

introduced into the credit market to 

ensure that there are additional credits 

available for small refiners; (2) a 

requirement that a percentage of all 

credits to be sold be set aside and only 

made available for small refiners; and 

(3) a requirement that credits sold, or a 

certain percentage of credits sold, be 

made available to small refiners before 

they are allowed to be sold to any other 

refiners. 

Further, we are finalizing an 

additional hardship provision to assist 

small refiners. This hardship provision 

would be for the case of a small refiner 

for which compliance with the 0.62 

vol% benzene standard would be 

feasible only through the purchase of 

credits, but for whom purchase of 

credits is not economically feasible. 

This hardship provision will only be 

available following the ABT program 

review, since EPA wishes to use the 

most accurate information to assess 

credit availability and the working of 

the credit market. The provision will 

only be afforded to a small refiner on a 

case-by-case basis, and must be based 

on a showing by the refiner of the 

practical or economic difficulty in 

acquiring credits for compliance with 

the 0.62 vol% benzene standard (or 

some other type of similar situation that 

would render its compliance with the 

standard not economically feasible). The 

relief offered under this hardship 

provision is a further delay, on an 

individual refinery basis, for up to two 

years. Applications for relief under this 

provision must meet the requirements 

set out in § 80.1343. Following the two 

years, a small refiner will be allowed to 

request one or more extensions of the 

hardship until the refinery’s material 

situation has changed. Finally, if a small 

refiner is unable to comply with the 1.3 

vol% refinery maximum average, it may 

apply for relief from this standard under 

the general hardship provisions 

discussed below in section VI.A.3.b. 

Applications for relief from the 1.3 

vol% refinery maximum average must 

be received by January 1, 2013 and must 

meet the requirements set out in 

§ 80.1335. 

iv. The Effect of Financial and Other 

Transactions on Small Refiner Status 

and Small Refiner Relief Provisions 

We believe that the effects of financial 

(and other) transactions are also relevant 

to this action. We proposed these 

provisions (see 71 FR 15880) and did 

not receive any comments on them. We 

continue to believe that these provisions 

are appropriate and are finalizing the 

provisions discussed below. 

Large Refiner Purchasing a Small 

Refiner’s Refinery 

One situation involves a ‘‘non-small’’

refiner that wishes to purchase a 

refinery owned by an approved small 

refiner. The small refiner may not have 

completed or even begun any necessary 

planning to meet the MSAT2 standards, 

since it would likely have planned to 

make use of the special small refiner 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8493 

relief provisions. We assume that the 

refiner would have incorporated 

financial planning for compliance into 

its purchase decision. However, we 

recognize that a limited amount of time 

would be required for the physical 

completion of the refinery upgrades for 

compliance. (This situation would be 

similar to that addressed in the Nonroad 

Diesel program (96 FR 39051).) 

We therefore believe that an 

appropriate period of lead time for 

compliance with the MSAT2 

requirements is warranted where a 

refiner purchases any refinery owned by 

a small refiner, whether by purchase of 

a refinery or purchase of the small 

refiner entity. A refiner that acquires a 

refinery from an approved small refiner 

will be provided with 30 additional 

months from the date of the completion 

of the purchase transaction (or until the 

end of the applicable small refiner relief 

interim period if it is within 30 months). 

During this 30-month period, 

production at the newly-acquired 

refinery may remain at the benzene 

levels that applied to that refinery for 

the previous small refiner owner, and 

all existing small refiner provisions and 

restrictions will also remain in place for 

that refinery. At the end of this period, 

the refiner must comply with the ‘‘nonsmall refiner’’ standards. There will not 

be an adverse environmental impact of 

this provision, since the small refiner 

would already have been provided relief 

prior to the purchase and this provision 

would be no more generous. 

We expect that in most (if not all) 

cases, the 30 months of additional lead 

time will be sufficient for the new 

refiner-owner to accomplish the 

necessary planning and any needed 

refinery upgrades. If a refiner 

nonetheless believes that the technical 

characteristics of its plans would 

require additional lead time, the refiner 

may apply for additional time and EPA 

will consider such requests on a caseby-case basis. Based on information 

provided in such an application and 

other relevant information, EPA will 

decide whether additional time is 

technically necessary and, if so, how 

much additional time would be 

appropriate. As discussed above, in no 

case will compliance dates be extended 

beyond the time frame of the applicable 

small refiner relief. 

Small Refiner Losing Its Small Refiner 

Status Due To Merger or Acquisition 

Another type of potential transaction 

involves a refiner with approved small 

refiner status that later loses its small 

refiner status because it no longer meets 

the small refiner criteria. An approved 

small refiner that exceeds the small 

refiner employee or crude capacity limit 

due to merger or acquisition will lose its 

small refiner status. This includes 

exceedances of the employee or crude 

capacity criteria caused by acquisitions 

of assets such as plants and equipment, 

as well as acquisitions of business 

entities. 

Our intent has been, and continues to 

be, to limit the small refiner relief 

provisions to a small subset of refiners 

that are most likely to be significantly 

economically challenged, as discussed 

above. At the same time, it is also our 

intent to avoid stifling normal business 

growth. Therefore, under this program, 

a refiner will be disqualified from small 

refiner status if it exceeds the small 

refiner criteria through its involvement 

in transactions such as being acquired 

by or merging with another entity, 

through the small refiner itself 

purchasing another entity or assets from 

another entity, or when it ceases to 

process crude oil. However, if a small 

refiner grows through normal business 

practices, and exceeds the employee or 

crude capacity criteria without merger 

or acquisition, it will retain its small 

refiner status for this program. 

In the sole case of a merger between 

two approved MSAT2 small refiners, 

both small refiners will be allowed to 

retain their small refiner status under 

this program. As in past fuel 

rulemakings, we believe the justification 

for continued small refiner relief for 

each of the merged entities remains 

valid. Small refiner status for the two 

entities of the merger will not be 

affected, and hence the original 

compliance plans of the two refiners 

should not be impacted. Moreover, no 

environmental detriment will result 

from the two small refiners maintaining 

their small refiner status within the 

merged entity as they would have likely 

maintained their small refiner status 

had the merger not occurred. We did not 

receive any comments on this provision. 

We recognize that a small refiner that 

loses its small refiner status because of 

a merger with, or acquisition of, a nonsmall refiner would face the same type 

of technical lead time concerns 

discussed above for a non-small refiner 

acquiring a small refiner’s refinery. 

Therefore, we are also providing the 30 

months of additional lead time 

described above for non-small refiners 

purchasing a small refiner’s refinery. 

b. Provisions for Refiners Facing 

Hardship Situations 

The MSAT2 program includes a 

nationwide credit trading program of 

indefinite duration for the 0.62 vol% 

annual average benzene standard, and 

we expect that credits will be available 

at a reasonable cost industry-wide. 

However, as explained in the proposal 

(71 FR 15880–15881), there could be 

circumstances when refiners would 

need hardship relief. We reiterate this 

conclusion here, especially given the 1.3 

vol% refinery maximum average 

benzene standard in the final rule. 

These hardship provisions are available 

to all refiners, small and non-small, 

with relief being available on a case-bycase basis following a showing of 

certain requirements (as described in 

the regulations at sections 80.1335 and 

80.1336). We believe that the inclusion 

of hardship provisions for refiners is a 

necessary part of adopting the benzene 

requirements as the maximum reduction 

achievable considering costs. Without a 

mechanism to consider economic 

hardship to particular refineries, the 

overall level of the standards would 

need to be higher to reflect the potential 

increased costs. Note, however, that we 

do not intend for these hardship waiver 

provisions to encourage refiners to delay 

planning and investments they would 

otherwise make. 

We are finalizing two forms of 

hardship relief: the first applies to 

situations of extreme and unusual 

hardship, and the second applies to 

situations where unforeseen 

circumstances prevent the refiner from 

meeting the benzene standards. These 

provisions are similar to the hardship 

provisions that were proposed, but with 

some modification because this final 

rule includes a 1.3 vol% refinery 

maximum average benzene standard, 

which cannot be satisfied through the 

use of credits. While we sought 

comment in the proposal on such a 

standard, we did not propose it, and 

therefore also did not propose any 

hardship relief specific to it. 

As discussed further below, the 

application requirements and potential 

relief available differ somewhat 

depending upon whether a refiner 

applies for hardship relief for the 0.62 

vol% benzene standard, the 1.3 vol% 

refinery maximum average, or both (a 

refiner may apply for relief from both 

standards, but EPA will address them 

independently). This is partly due to the 

fact that a refiner may use credits to 

meet the 0.62 vol% benzene standard, 

but credits cannot be used for 

compliance with the 1.3 vol% refinery 

maximum average standard. EPA can 

impose appropriate conditions on any 

hardship relief. Note also that any 

hardship relief granted under this rule 

will be separate and apart from EPA’s 

authority under the Energy Policy Act to 

issue temporary waivers for extreme and 

unusual supply circumstances, under 

amended section 211(c)(4). In general, 


pwalker on PROD1PC71 with RULES_2
8494 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

193The 1.3 vol% maximum average standard was 

not discussed in the proposal vis-a-vis this early 

compliance option. However, any refinery approved 

for this option should easily meet the 1.3 vol% 

standard. 

commenters stated that they supported 

the inclusion of hardship provisions, 

but they did not provide any specific 

comments regarding these provisions. 

i. Temporary Waivers Based on Extreme 

Hardship Circumstances 

We are finalizing the proposed 

hardship relief provisions based on a 

showing of extreme hardship 

circumstances, with some slight 

modifications from the proposed 

extreme hardship relief provision (see 

71 FR 15881). We did not receive 

comment on the proposed hardship 

provision. 

Extreme hardship circumstances 

could exist based on severe economic or 

physical lead time limitations of the 

refinery to comply with the benzene 

standards required by the program. 

Such extreme hardship may be due to 

an inability to physically comply in the 

time available, an inability to secure 

sufficient financing to comply in the 

time available, or an inability to comply 

in the time available in a manner that 

would not place the refiner at an 

extreme competitive disadvantage 

sufficient to cause extreme economic 

hardship. A refiner seeking such 

hardship relief under this provision will 

have to demonstrate that these criteria 

were met. In addition to showing that 

unusual circumstances exist that impose 

extreme hardship in meeting the 

benzene standards, the refiner must 

show: (1) Circumstances exist that 

impose extreme hardship and 

significantly affect the ability to comply 

with the gasoline benzene standards by 

the applicable date(s); and (2) that it has 

made best efforts to comply with the 

requirements. Refiners seeking 

additional time must apply for hardship 

relief, and the hardship applications 

must contain the information required 

under § 80.1335. 

For relief from the 0.62 vol% benzene 

standard in extreme hardship 

circumstances, an aspect of the 

demonstration of best efforts to comply 

is that severe economic or physical lead 

time limitations exist and that the 

refinery has attempted, but was unable, 

to procure sufficient credits. EPA will 

determine an appropriate extended 

deficit carry-forward time period based 

on the nature and degree of the 

hardship, as presented by the refiner in 

its hardship application, and on our 

assessment of the credit market at that 

time. Moreover, because we expect the 

credit program to be operating and 

robust, we believe that circumstances 

under which we would grant relief from 

the 0.62 vol% benzene standard will be 

rare, and should we grant relief, it 

would likely be for less than three years. 

Further, we may impose additional 

conditions to ensure that the refiner was 

making best efforts to comply with the 

benzene standards while offsetting any 

loss of emission control from the 

program (due to extended deficit carryforward). 

For relief from the 1.3 vol% refinery 

maximum average benzene standard in 

extreme hardship circumstances, a 

refiner must show that it could not meet 

the 1.3 vol% standard, despite its best 

efforts, in the timeframe required due to 

extreme economic or technical 

problems. Extreme hardship relief from 

the 1.3 vol% refinery maximum average 

standard is available for both non-small 

and small refiners. This provision is 

intended to address unusual 

circumstances that should be apparent 

now, or well before the standard takes 

effect. Thus, refiners must apply for 

such relief by January 1, 2008, or 

January 1, 2013 for small refiners. If 

granted, such hardship relief would 

consist of additional time to comply 

with the 1.3 vol% refinery maximum 

average. The length of such relief and 

any conditions on that relief will be 

granted on a case-by-case basis, 

following an assessment of the refiner’s 

hardship application, but could be for a 

longer period than for relief from the 

0.62 vol% standard since credits cannot 

be used for compliance with the 1.3 

vol% refinery maximum average. 

ii. Temporary Waivers Based on 

Unforeseen Circumstances 

We are also finalizing the proposed 

temporary hardship provision based on 

unforeseen circumstances, which, at our 

discretion, will permit any refiner or 

importer to seek temporary relief from 

the benzene standards under certain 

rare circumstances (see 71 FR 15880). 

This waiver provision is similar to 

provisions in prior fuel regulations. It is 

intended to provide refiners and 

importers relief in unanticipated 

circumstances—such as a refinery fire or 

a natural disaster—that cannot be 

reasonably foreseen now or in the near 

future. We did not receive comments on 

this proposed hardship provision. 

To receive hardship relief based on 

unforeseen circumstances, a refiner or 

importer will be required to show that: 

(1) The waiver is in the public interest; 

(2) the refiner/importer was not able to 

avoid the noncompliance; (3) the 

refiner/importer will meet the benzene 

standard as expeditiously as possible; 

(4) the refiner/importer will make up 

the air quality detriment associated with 

the nonconforming gasoline, where 

practicable; and (5) the refiner/importer 

will pay to the U.S. Treasury an amount 

equal to the economic benefit of the 

noncompliance less the amount 

expended to make up the air quality 

detriment. These conditions are similar 

to those in the RFG, Tier 2 gasoline 

sulfur, and the highway and nonroad 

diesel regulations, and are necessary 

and appropriate to ensure that any 

waivers that are granted will be limited 

in scope. Such a request must be based 

on the refiner or importer’s inability to 

produce compliant gasoline at the 

affected facility due to extreme and 

unusual circumstances outside the 

refiner or importer’s control that could 

not have been avoided through the 

exercise of due diligence. 

For relief from the 0.62 vol% benzene 

standard based on unforeseen 

circumstances, the hardship request 

must also show that other avenues for 

mitigating the problem, such as the 

purchase of credits toward compliance 

under the credit provisions, had been 

pursued and yet were insufficient or 

unavailable. Hardship relief from that 

standard will allow a deficit to be 

carried forward for an extended, but 

limited, time period (more than the one 

year allowed by the rule). The refiner or 

importer must demonstrate that the 

magnitude of the impact was so severe 

as to require such an extension. EPA 

will determine an appropriate extended 

deficit carry-forward time period based 

on the nature and degree of the 

hardship, as presented by the refiner or 

importer in its hardship application, 

and on our assessment of the credit 

market at that time. 

For relief from the 1.3 vol% refinery 

maximum average benzene standard 

based on unforeseen circumstances, the 

hardship request must show that, 

despite its best efforts, the refiner or 

importer cannot meet the standard in 

the timeframe required. Relief will be 

granted on a case-by-case basis, 

following an assessment of the refiner’s 

hardship application. 

c. Option for Early Compliance in 

Certain Circumstances 

We are finalizing an option that 

would allow a refinery to begin 

compliance with the MSAT2 benzene 

standards earlier than 2011 instead of 

maintaining compliance with its 

MSAT1 baseline. See 71 FR 15881 for 

the proposal’s discussion of this 

option.193 We are providing this option 

because refineries that meet the criteria 

discussed below are already providing 

the market with very clean gasoline 

from a mobile source air toxics 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8495 

194While refineries are subject to MSAT1 and 

anti-dumping or RFG toxics performance 

requirements depending on the gasoline type (CG 

and/or RFG) they produce, in almost all cases, the 

MSAT1 standard is more stringent than the 

corresponding anti-dumping or RFG toxics 

standard. 

195 71 FR 26691, May 8, 2006. 

perspective. In the proposal, we took 

comment on such an option, stating that 

eligibility for this option would be 

limited to those that have historically 

better than average toxics performance, 

lower than average benzene and sulfur 

levels, and a significant volume of 

gasoline impacted by the phase-out of 

MTBE use. However, in order to qualify 

for this option, a refinery must produce 

gasoline by processing crude and other 

intermediate feedstocks and not merely 

be a blender or importer of gasoline, as 

discussed later. 

A refinery that is approved for this 

option would comply with the 0.62 

vol% annual average and 1.3 vol% 

maximum average benzene standards 

and would not be required to continue 

to comply with its applicable toxics 

performance requirements, i.e., its 

MSAT1 baseline and its anti-dumping 

or RFG toxics performance standards. 

We believe this option is appropriate 

because if qualifying refineries had to 

continue to comply with MSAT1 194

until 2011, they would likely be forced 

to reduce gasoline output in order to 

comply, while other refineries or 

importers, most likely with less clean 

MSAT1 baselines, would provide the 

replacement gasoline. The result would 

be less supply of these refineries’

cleaner gasoline and more supply of fuel 

with higher toxics emissions, leading to 

a net detrimental effect on overall 

MSAT emissions in the surrounding 

region. 

We chose 2003 as the period for 

determining eligibility for this option 

because State MTBE bans began taking 

effect in 2004. Refiners who had used 

MTBE generally now use ethanol as the 

replacement source for oxygen. 

Although RFG no longer has an oxygen 

requirement 195, MSAT1 baselines were 

established when that requirement was 

still in place. Even some CG producers 

used significant amounts of MTBE as 

reflected in their MSAT1 baselines. 

Ethanol provides less toxics reduction 

benefits than MTBE, and so the refinery 

must take other actions in order to 

continue to meet its MSAT1 standard. 

Consequently, while MSAT1 baseline 

adjustments in the past were limited to 

RFG, it may be possible for a refinery to 

also qualify to adopt MSAT2 early for 

its CG pool. Both qualification and the 

ability to adopt MSAT2 are allowed 

separately for RFG and CG. For 

example, a refinery that qualifies to 

adopt MSAT2 early for RFG will be 

permitted to do so for RFG alone while 

maintaining its MSAT1 baseline for its 

CG, or vice versa. 

As mentioned in the proposal, the 

criteria for eligibility for early 

compliance are similar in concept to 

those EPA has used in granting refineryspecific adjustments to MSAT1 

baselines, that is, significantly cleaner 

than the national average for toxics, 

benzene, and sulfur, and relatively high 

MTBE use. We re-evaluated those 

criteria to determine the numerical 

criteria that a refinery would have to 

meet in order to qualify for this option. 

Specifically, a refinery must at 

minimum meet the following criteria: 

—2003 annual average benzene level 

less than or equal to 0.62 vol% 

—2003 annual average MTBE use 

greater than 6.0 vol% 

—2003 annual average sulfur level less 

than 140 ppm 

—MSAT1 RFG baseline greater than 

30.0% reduction or CG less than 80 

mg/mile 

Many refineries can reduce benzene 

and sulfur levels to reduce toxics 

emissions. However, those that used a 

significant amount of MTBE and already 

have low benzene and sulfur levels also 

have fairly stringent toxics emissions 

performance standards. As a result, they 

may have little ability to further reduce 

sulfur or benzene or make other refinery 

changes to offset the impact of 

switching from MTBE to ethanol. 

Refineries that are not in this situation 

are not so constrained. We believe that 

the criteria above are an appropriate 

screening to delineate between these 

two groups. 

To qualify for this provision we 

believe it is appropriate for a refinery to 

have used at least 6.0 vol% MTBE in 

their gasoline in their 2003 baseline; 

when the oxygen provided by this 

amount of MTBE is provided instead by 

ethanol, a substantial loss in toxics 

performance results. A benzene average 

of less than or equal to the 0.62 vol% 

standard is appropriate because if a 

refinery’s average benzene is higher, 

they would have to further reduce 

benzene to comply with the MSAT2 

standard early. However, to qualify for 

this provision to switch to MSAT2 

early, a refinery should have no viable 

options for reducing benzene further to 

continue to meet their MSAT1 baseline. 

We chose the 140 ppm sulfur level 

because we found that even for 

refineries with significant MTBE use (in 

the 6–13 vol% range), the sulfur 

reductions brought about by the Tier 2 

gasoline sulfur standard provided 

sufficient benefit to offset much of the 

increase in toxics emissions that results 

from eliminating MTBE and replacing it 

with ethanol. Finally, refineries should 

have had MSAT1 baseline toxics 

performance significantly cleaner than 

the average in order to qualify. The 

MSAT1 baseline toxics performance 

thresholds listed above were set based 

on past experience with baseline 

adjustments where we found that only 

those with significantly clean baselines 

(in addition to low benzene, low sulfur, 

and high MTBE use) would have to 

reduce production in order to comply 

with their MSAT1 standard in the face 

of MTBE bans. Thus, we are limiting 

this provision to those with relatively 

clean baselines as our goal is preventing 

the perverse outcome that refineries 

with cleaner gasoline may be forced to 

reduce their production volume only to 

have it be made up by refineries with 

dirtier baselines. The threshold helps 

ensure that only those refineries in 

situations where such an outcome could 

realistically have otherwise occurred are 

permitted to exercise this option. 

Refineries that do not fulfill all of the 

threshold requirements may have to 

take further refinery processing-related 

actions to meet their MSAT1 baseline, 

but are unlikely to have to reduce 

production and/or have that production 

replaced by someone with a less clean 

standard. 

In addition to meeting the screening 

criteria mentioned, a refinery would 

still have to apply to EPA to use this 

compliance option and would need to 

demonstrate that it cannot further 

reduce its benzene or sulfur levels, nor 

make other refinery processing changes 

in order to maintain compliance with its 

MSAT1 baseline due to the impact of 

switching from MTBE to ethanol. 

Details of the application requirements 

and approval process are provided in 

section 80.1334 of the regulations. We 

estimate that less than 10 refineries may 

meet the screening criteria and thus 

potentially qualify for this option based 

on our analysis of their 2003 data and 

MSAT1 baselines. Note that this early 

compliance option will apply only to 

the type of gasoline that qualifies—RFG 

or CG—not to the refinery’s total pool. 

In 2011, the MSAT2 benzene standards 

will apply to the refinery’s total 

applicable gasoline pool. 

We are limiting this compliance 

option to refineries that produce 

gasoline by processing crude and 

intermediate feedstocks through refinery 

processing equipment. Thus, this option 

is not available to gasoline blenders and 

importers. While gasoline blenders and 

importers may have gasoline with 

significantly cleaner than average toxics 


pwalker on PROD1PC71 with RULES_2
8496 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

196Aggregation of facilities for compliance is not 

allowed under this benzene control program. 

However, as pointed out in the proposal, the ABT 

program’s credit generation and transfer provisions 

provide compliance flexibility similar to that 

provided by aggregation. 197 66 FR 17253, March 29, 2001. 

performance, benzene and sulfur levels, 

and may have used large amounts of 

MTBE, they have more options in the 

marketplace for obtaining qualifying 

gasoline and gasoline blending 

components. Refineries have 

comparatively less ability to adjust their 

refining operations, without 

significantly reducing volume, in order 

to accommodate the change from MTBE 

to ethanol. 

Few comments were received 

regarding this provision. All 

commenters supported the provision. 

Many of those suggested that it be 

available to any refinery. We continue to 

believe that this provision should apply 

only to those entities that meet the 

criteria above. Those that do not meet 

the criteria have the ability to further 

adjust their benzene and sulfur content 

values to be able to comply with their 

MSAT1 baselines. If this provision was 

available to all refineries, it could result 

in an overall nationwide backsliding on 

MSAT1. The intent of this provision is 

to provide appropriate relief to a limited 

number of entities that have unique 

challenges, while at the same time 

ensuring that the net result is cleaner 

gasoline in the marketplace than would 

otherwise be there. 

EPA also took comment on when 

entities that are approved for this option 

should be allowed to begin compliance 

with the MSAT2 benzene standards. We 

received comment supporting allowing 

such compliance for the entire calendar 

year 2007, even though the rule will not 

be final until partway into that year. 

Other suggested options include the 

next calendar year, and partial year 

compliance for 2007. This latter option 

would likely be unworkable under 

MSAT1 due to differences between 

summer and winter MSAT performance. 

Thus, we decided that refineries that are 

approved for this option will be allowed 

to comply with the MSAT2 benzene 

standard for the entire 2007 period. We 

have also decided against requiring 

approved refineries to wait until the 

2008 compliance period because we 

want to ensure that gasoline production 

from these refineries is maximized, and 

waiting until 2008 would not achieve 

that goal. Because this is an optional 

program for those that qualify, approved 

refiners may choose to comply with 

MSAT2 beginning in 2007, or beginning 

in 2008. 

As a final note on this subject, we also 

proposed that refineries that meet the 

criteria and are approved for early 

compliance with the MSAT2 benzene 

standards would not be allowed to 

generate early benzene credits (see 71 

FR 15881). A few commenters thought 

that such refineries should be allowed 

to generate early credits. However, the 

criteria for generating early credits 

require that the refinery reduce benzene 

by 10% below its 2004–2005 baseline 

benzene level. The early compliance 

provision is predicated on the fact that 

an approved refinery has almost no 

ability to reduce benzene in order to 

maintain compliance with its MSAT1 

baseline. If such a refinery were able to 

further reduce benzene, it would negate 

its need for early compliance with the 

MSAT2 benzene standard. Therefore, 

we are finalizing this early compliance 

option with this limitation as proposed. 

B. How Will the Gasoline Benzene 

Standard Be Implemented? 

This section summarizes the main 

implementation provisions in the 

regulations and provides additional 

clarification in a few cases. 

1. General Provisions 

Compliance with the 0.62 vol% 

annual average and 1.3 vol% maximum 

average benzene standards is 

determined over a refiner’s or importer’s 

total gasoline pool, RFG and 

conventional gasoline (CG) combined. 

For the 0.62 vol% standard, the first 

annual compliance period for non-small 

refiners and for importers is 2011. For 

the 1.3 vol% standard, the first 

compliance period for these entities is 

July 1, 2012 through December 31, 2013. 

Thereafter, compliance is determined 

annually. Small refiners will comply 

with the 0.62 vol% on an annual basis 

beginning in 2015. Compliance with the 

1.3 vol% maximum average standard 

commences for small refiners on July 1, 

2016. For small refiners, the first 

compliance period for the 1.3 vol% 

standard is July 1, 2016 through 

December 31, 2017. Thereafter, 

compliance is determined annually. 

Compliance with the benzene 

standards is achieved separately for 

each refinery of a refiner.196 For an 

importer, compliance is achieved over 

its total volume of imports, regardless of 

point of entry. As discussed in the 

proposal, gasoline produced by a foreign 

refiner is included in the compliance 

calculation of the importer of that 

gasoline, with certain exceptions for 

early credit generation and small foreign 

refiners. 

Finished gasoline and gasoline 

blendstock that becomes finished 

gasoline solely upon the addition of 

oxygenate are included in the 

compliance determination. Gasoline 

produced for use in California is not 

included. Gasoline produced for use in 

the American territories—Guam, 

Northern Mariana Islands, American 

Samoa—is not subject to the benzene 

standard. Gasoline produced for use in 

these areas is currently exempt from the 

MSAT1 standards, and for the same 

reasons we discussed in the MSAT1 

final rule 197, including distance from 

gasoline producers, low gasoline use, 

and distinct environmental conditions, 

we are exempting gasoline produced for 

these areas from this rule. 

Oxygenate and butane blenders are 

not subject to the benzene standard 

unless they add other gasoline blending 

components beyond oxygenates and 

butane. Similarly, transmix processors 

are not subject to the benzene standard. 

We proposed that transmix processors 

would be subject to the benzene 

standard if they add gasoline blending 

components to the gasoline produced 

from transmix (see 71 FR 15891). One 

commenter suggested that only the 

blending component added to the 

gasoline produced from transmix should 

be subject to the standard because the 

transmix processor has no control over 

the benzene level in the gasoline 

produced from transmix, and the 

benzene in the gasoline produced from 

transmix would have already been 

accounted for by another entity. We 

agree with this comment, and have 

modified the final rule accordingly. 

As discussed earlier, this benzene 

program has both an early credit 

generation period and a standard credit 

generation period that begins when the 

program takes effect. Early credits may 

be generated from January 1, 2007 

through December 31, 2010 by refineries 

with approved benzene baselines. For 

small refiners, early credit generation 

extends through December 31, 2014 for 

their refineries with approved benzene 

baselines. Benzene baselines are based 

on a refinery’s 2004–2005 average 

benzene content, and refiners can begin 

applying for benzene baselines as early 

as March 1, 2007. Although there is no 

single cut-off date for applying for a 

baseline, refiners planning to generate 

early credits must submit individual 

refinery baseline applications at least 60 

days prior to beginning credit 

generation at that refinery. 

As explained earlier, in order to 

generate early credits, a refinery’s 

annual average benzene level must be at 

least 10 percent lower than its baseline 

benzene level, and the refinery must 

show that its low benzene levels result, 

in part, from operational changes and/ 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8497 

198An extension of the period of deficit carryover 

may be allowed in certain hardship situations, as 

discussed in section A.3. 

or improvements in benzene control 

technology since the baseline period. 

Foreign refiners who sent gasoline to the 

U.S. during 2004–2005 under their 

foreign refiner baseline may generate 

early credits if they are able to establish 

a benzene baseline and agree to comply 

with other requirements that help to 

ensure enforcement of the regulation at 

the foreign refinery. Early credits 

generated or obtained under the ABT 

program must be used towards 

compliance within three years of the 

start of the program; otherwise they will 

expire and become invalid. In other 

words, early credits must be applied to 

the 2011, 2012, or 2013 compliance 

years. In the case of small refiners, early 

credits must be applied to the 2015, 

2016, or 2017 compliance years. 

Standard credits may be generated by 

refiners and importers beginning with 

the 2011 compliance period. Standard 

credits may be generated by small 

refiners beginning with the 2015 

compliance period. For refiners, credits 

are generated on a refinery-by-refinery 

basis for each facility. For importers, 

credits are generated over the total 

volume imported, regardless of point of 

entry. Foreign refiners are not allowed 

to generate standard credits because 

compliance for their gasoline is the 

responsibility of the importer. In order 

to generate standard credits, a refinery’s 

or importer’s annual average benzene 

level must be less than 0.62 vol%. 

Standard credits are valid for five years 

from the year they were generated. A 

credit life extension exists for standard 

credits traded to and ultimately used by 

small refiners. These credits may be 

used towards compliance for an 

additional two years, giving standard 

credits a maximum seven-year life. 

Compliance with the 0.62 vol% 

standard is based on the annual average 

benzene content of the refinery’s or 

importer’s gasoline production or 

importation, any credits used, and any 

compliance deficit carried forward from 

the previous year. Credits may be used 

in any quantity and combination (i.e., 

early or standard credits) to achieve 

compliance with the 0.62 vol% benzene 

standard beginning with the first 

compliance period in 2011, or 2015 for 

approved small refiners. For the 2011 

and 2012 compliance periods, credits 

may be used in any amount, and from 

any starting average benzene level. For 

example, if the refinery’s annual average 

benzene level at the end of 2011 is 1.89 

vol%, it may use credits to meet the 

0.62 vol% standard for that compliance 

period. If its average benzene level at 

the end of 2012 is 1.45 vol%, it may 

likewise use credits to meet the 0.62 

vol% standard for that period. 

The first averaging period for the 1.3 

vol% standard for non-small refiners 

and importers begins July 1, 2012 and 

ends December 31, 2013, an 18-month 

period. Similarly, the first averaging 

period for the 1.3 vol% standard for 

small refiners begins July 1, 2016 and 

ends December 31, 2017. Credits may 

not be used to achieve compliance with 

the 1.3 vol% standard at any time. A 

refinery must make capital 

improvements and/or operational or 

blending practice changes such that it 

achieves an actual average benzene level 

of no greater than 1.3 vol% for the 

initial (18-month) compliance period, 

and each annual compliance period 

thereafter. (An importer must bring in 

gasoline with benzene levels that will 

average to 1.3 vol% or less during these 

same compliance periods.) Continuing 

from our previous example, if at the end 

of 2012, the refinery’s average benzene 

level is 1.45 vol%, no further action is 

yet needed to meet the 1.3 vol% 

standard. However, the refinery must 

make capital improvements and/or 

operational or blending practice changes 

such that it achieves an actual average 

benzene level of no greater than 1.3 

vol% for the 18-month period July 1, 

2012-December 31, 2013. We will 

assume for this example that the 

refinery has a 1.0 vol% average benzene 

level at the end of 2013. The refinery 

can then use credits to meet the 0.62 

vol% standard. 

Lack of compliance with the 0.62 

vol% standard creates a deficit that may 

be carried over to the next year’s 

compliance determination. Lack of 

compliance with the 0.62 vol% standard 

could occur for a number of reasons, for 

example, a refinery or importer may 

choose not to use (buy) sufficient 

offsetting credits. However, in the next 

year, the refinery or importer must make 

up the deficit (through credit use and/ 

or refining or import improvements) and 

be in compliance with the 0.62 vol% 

standard.198 There is no deficit carryforward provision associated with the 

1.3 vol% standard. If a refinery or 

importer is out of compliance with the 

1.3 vol% standard, it is subject to 

enforcement action immediately. 

2. Small Refiner Status Application 

Requirements 

A refiner applying for status as a 

small refiner under this program is 

required to apply to and to provide EPA 

with several types of information by 

December 31, 2007. The application 

requirements are summarized below. A 

refiner seeking small refiner status 

under this program would need to apply 

to EPA for that status, regardless of 

whether or not the refiner had been 

approved for small refiner status under 

another fuel program. As with 

applications for relief under other rules, 

applications for small refiner status 

under this rule that are later found to 

contain false or inaccurate information 

would be void ab initio. Requirements 

for small refiner status applications 

include: 

—The total crude oil capacity as 

reported to the Energy Information 

Administration (EIA) of the U.S. 

Department of Energy (DOE) for the 

most recent 12 months of operation. 

This would include the capacity of all 

refineries controlled by a refiner and 

by all subsidiaries and parent 

companies and their subsidiaries. We 

will presume that the information 

submitted to EIA is correct. In cases 

where a company disagreed with this 

information, the company could 

petition EPA with appropriate data to 

correct the record when the company 

submitted its application for small 

refiner status. EPA could accept such 

alternate data at its discretion. 

—The name and address of each 

location where employees worked 

from January 1, 2005 through 

December 31, 2005; and the average 

number of employees at each location 

during this time period. This must 

include the employees of the refiner 

and all subsidiaries and parent 

companies and their subsidiaries. 

—In the case of a refiner who 

reactivated a refinery that was 

shutdown or non-operational between 

January 1, 2005, and January 1, 2006, 

the name and address of each location 

where employees worked since the 

refiner reactivated the refinery and 

the average number of employees at 

each location for each calendar year 

since the refiner reactivated the 

refinery. 

—The type of business activities carried 

out at each location. 

—The small refiner option(s) the refiner 

intends to use for each refinery. 

—Contact information for a corporate 

contact person, including: name, 

mailing address, phone and fax 

numbers, e-mail address. 

—A letter signed by the president, chief 

operating officer, or chief executive 

officer of the company (or a designee) 

stating that the information contained 

in the application was true to the best 

of his/her knowledge and that the 

company owned the refinery as of 

January 1, 2007. 


pwalker on PROD1PC71 with RULES_2
8498 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

199Section 80.101(i). 200The 1.3 vol% per gallon cap on RFG benzene 

remains. 

3. Administrative and Enforcement 

Provisions 

Most of the administrative and 

enforcement provisions are similar to 

those in effect for other gasoline 

programs, as discussed in the proposal. 

The discussion below highlights those 

areas that we wish to clarify and those 

that received significant comment. 

a. Sampling/Testing 

Because compliance with this 

program and with the gasoline sulfur 

program will become the compliance 

mechanism for certain RFG and antidumping requirements, some reporting 

simplifications will occur, as described 

below. However, sampling, testing, and 

reporting of all of the current fuel 

parameters will continue to be required. 

It is important to continue to monitor 

how refiners continue to achieve the 

toxics control required of RFG and CG 

through fuel composition changes, and 

how other toxics emissions may be 

affected by this MSAT2 benzene rule. 

Continued collection of all of the fuel 

parameters will facilitate future toxics 

evaluation activities. 

We proposed to require every-batch 

sampling for CG under this program, but 

indicated that results would not have to 

be available before the batch leaves the 

refinery (see 71 FR 15893). RFG already 

is every-batch tested, and the results 

must be available before the batch 

leaves the refinery because of RFG’s 1.3 

vol% per gallon cap. Several 

commenters stated that every-batch 

testing for CG was unnecessary because 

the benzene standard is an average 

standard, and that it would be costly, 

especially for small refiners. These 

commenters requested that continued 

composite sampling be allowed for 

conventional gasoline.199 Nevertheless, 

we are concerned about potential 

downstream benzene addition. 

Requiring every-batch testing for CG 

will allow for closer monitoring of the 

movement of high benzene streams. In 

this program, we are relying on there 

being no significant incentive to dump 

benzene-rich streams into gasoline 

downstream of the refinery where the 

benzene levels are originally measured. 

With every-batch benzene testing of all 

gasoline, we will be able to better 

discern if high benzene batches 

originated at the refinery, or 

downstream. With composite testing, it 

would be significantly more difficult to 

determine the source of the high 

benzene streams. Thus, we are finalizing 

every-batch benzene testing for all 

gasoline. 

b. Recordkeeping/Reporting 

This program will require some new 

records to be kept, such as the benzene 

baseline, credits generated, and credit 

transactions, and new reports to be filed 

(e.g., benzene pre-compliance reports). 

However, because the current 

regulations for RFG and anti-dumping 

toxics controls and MSAT1 controls are 

being removed, certain recordkeeping 

and reporting requirements will be 

reduced or eliminated, as detailed in the 

regulations. Because the program will 

not be fully implemented until small 

refiners are also subject to both the 0.62 

vol% and the 1.3 vol% benzene 

standards, the process of streamlining 

the reporting forms will not be complete 

until that time. 

As mentioned above, in order to 

provide an early indication of the credit 

market for refiners and importers 

planning on relying upon benzene 

credits as a compliance strategy in 2011 

and beyond, we are requiring refiners to 

submit pre-compliance reports to us in 

the years leading up to start of the 

program. Pre-compliance reporting has 

proven to be an indispensable 

mechanism in implementing the 

gasoline and diesel sulfur programs, and 

we expect this to be the case in this 

program as well. Refiners are required to 

submit annual pre-compliance reports 

on June 1st of every year beginning in 

2008 and continuing through 2011 

(2015 for small refiners). The precompliance reports must contain 

engineering and construction plans as 

well as actual/projected gasoline 

production levels, actual/projected 

gasoline benzene levels, and actual/ 

projected credit generation and use. 

Several commenters suggested that 

the RFG NOX retail survey be 

discontinued after 2006, and that the 

RFG toxics retail survey be discontinued 

after 2010. The surveys use fuel 

parameters of RFG sampled from retail 

stations to estimate VOC, NOX, and 

toxics emissions. There are also fuel 

benzene and oxygen content surveys. If 

a survey is ‘‘failed’’, gasoline sent to the 

area must meet a more stringent 

standard. Because we are finalizing, as 

proposed, provisions that make the 

gasoline sulfur program the sole 

regulatory mechanism used to 

implement gasoline NOX requirements, 

and the benzene control program the 

sole regulatory mechanism used to 

implement the toxics requirements of 

RFG 200 and anti-dumping, we agree that 

the NOX and toxics surveys are no 

longer needed. A discussion of the 

origin of the survey program, and how 

the toxics and NOX requirements for CG 

and RFG will be met under the MSAT2 

program is provided in Chapter 6.13 of 

the RIA for this rulemaking. 

C. How Will the Program Relate to Other 

Fuel-Related Toxics Programs? 

In the proposal we presented an 

analysis that examined quantitatively 

how the fuel performance under the 

new gasoline content standard and 

vehicle emissions standard as proposed 

would compare to current toxics 

performance requirements and to 

performance as modified by the Energy 

Policy Act of 2005. This analysis 

suggested that the fuel standard alone 

would exceed previous performance for 

RFG, and significantly exceed it for CG. 

We have updated the results of this 

analysis, using better estimates of future 

ethanol use developed for the RFS final 

rulemaking, as well as the updated 

benzene projections from the refineryby-refinery analysis done for this final 

rulemaking. As shown in Table VI.C–1, 

these updated analyses continue to 

support the conclusion that the MSAT2 

fuel program will provide greater toxics 

reductions for both CG and RFG. 

TABLE VI.C–1.—ESTIMATED ANNUAL AVERAGE TOTAL TOXICS PERFORMANCE OF LIGHT DUTY VEHICLES IN MG/MI UNDER

CURRENT AND PROJECTED SCENARIOS.a

Regulatory scenario Fleet 

year 

RFG by PADD CG by PADD 

I II III I II III IV V 

MSAT1 Baseline b (1998–2000) ....................................... 2002 112 129 97 114 145 107 145 156 

EPAct Baseline b (RFG: 2001–2002) ............................... 2002 104 121 87 114 145 107 145 156 

EPAct Baseline, 2011 c .................................................... 2011 67 78 52 62 83 54 82 88 

MSAT2 program, 2011 c (Fuel standard only) ................. 2011 66 76 52 60 77 52 74 81 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8499 

201 60 FR 15264 ‘‘Consumer and Commercial 

Products: Schedule for Regulation,’’ March 23, 

1995. 

TABLE VI.C–1.—ESTIMATED ANNUAL AVERAGE TOTAL TOXICS PERFORMANCE OF LIGHT DUTY VEHICLES IN MG/MI UNDER

CURRENT AND PROJECTED SCENARIOS.a—Continued 

Regulatory scenario Fleet 

year 

RFG by PADD CG by PADD 

I II III I II III IV V 

MSAT2 program, 2011 c (Fuel + vehicle standards) ....... 2011 64 72 48 56 74 47 70 78 

MSAT2 program, 2025 c (Fuel + vehicle standards) ....... 2025 39 45 31 36 45 31 44 48 

aTotal toxics performance for this analysis includes overall emissions of 1,3-butadiene, acetaldehyde, acrolein, benzene and formaldehyde as 

calculated by MOBILE6.2. Although POM appears in the Complex Model, it is not included here. However, it contributes a small and relatively 

constant mass to the total toxics figure (∼4%), and therefore doesn’t make a significant difference in the comparisons. Toxics performance figures here are for representative cities in each PADD, and therefore some geographical variation is not captured here. bBaseline figures generated in this analysis were calculated differently from the regulatory baselines determined as part of the MSAT1 program, and are only intended to be a point of comparison for future year cases. cFuture year scenarios include (in addition to the MSAT2 standards, where stated) effects of the Tier 2 vehicle and gasoline sulfur standards, 

and vehicle fleet turnover with time, as well as estimated effects of the renewable fuels standard and the phase-out of ether blending as developed in the RFS rulemaking. 

D. How Does This Program Satisfy the 

Statutory Requirements of Clean Air Act 

Section 202(l)(2)? 

As discussed earlier in this section, 

we have concluded that the most 

effective and appropriate program for 

MSAT emission reduction from gasoline 

is a benzene control program. We are 

finalizing, as proposed, an average 

benzene content standard of 0.62 vol% 

along with a specially-designed ABT 

program, as well as a maximum average 

annual standard of 1.3 vol%. In sections 

VI.A.1.c and d above, we summarize our 

evaluation of the feasibility of the 

program, and in section VIII.A we 

summarize our evaluation of the costs of 

the program. The analyses supporting 

our conclusions in these sections are 

discussed in detail in Chapters 6 and 9 

of the RIA. 

Taking all of this information into 

account, we believe that a more 

stringent program would not be 

achievable, taking costs into 

consideration. As we have discussed, 

making the 0.62 vol% standard more 

stringent would require more refiners to 

install the more expensive benzene 

control equipment, with very little 

incremental decrease in benzene 

emissions. Also, we have shown that 

refinery costs increase very rapidly as 

the level of the average standard is made 

more stringent, especially for certain 

individual technologically-challenged 

refineries. We discuss the costs of this 

program in detail in section VIII.A of 

this preamble and in Chapter 9 of the 

RIA. Moreover, the 0.62 vol% standard 

achieves significant reductions in 

benzene levels nationwide, and 

achieves significant reductions in each 

PADD. The 1.3 vol% annual average 

standard makes it more certain that the 

predicted emission reductions will in 

fact occur. 

Conversely, we believe that a less 

stringent national average standard than 

0.62 vol% would not satisfy our 

statutory obligation to promulgate the 

most stringent standard achievable 

considering cost and other factors along 

with technological feasibility. 

Furthermore, as discussed in section 

VI.A, less stringent standards would not 

accomplish several important 

programmatic objectives, such as 

avoiding the triggering of the provisions 

in the 2005 EPAct to adjust the MSAT1 

baseline for RFG. We have also 

considered energy implications of the 

proposed program, as well as noise and 

safety, and we believe that the MSAT2 

program will have very little impact on 

any of these factors (although, as 

explained in section VI.A above, some 

of the alternative toxic control strategies 

urged by commenters could have 

adverse energy supply implications). 

Analyses supporting these conclusions 

are also found in Chapter 9 of the RIA. 

We carefully considered lead time in 

establishing the stringency and timing 

of the proposed program (see section 

VI.A above). 

We have carefully reviewed the 

technological feasibility (see section 

VI.A.1.c.i above and chapter 6 of the 

RIA) and costs of this program. Based on 

the considerations outlined in this 

section VI, we conclude that this 

program meets the requirements of 

section 202(l)(2) of the Clean Air Act, 

reflecting ‘‘the greatest degree of 

emission reduction achievable through 

the application of technology which is 

available, taking into consideration 

* * * the availability and costs of the 

technology, and noise, energy, and 

safety factors, and lead time.’’

VII. Portable Fuel Containers 

As described in this section, we are 

adopting new HC emissions standards 

for portable gasoline containers (gas 

cans) essentially as proposed. We are 

also finalizing the same requirements 

for portable diesel and kerosene 

containers, containers which could 

easily be used for gasoline. 

Manufacturers must begin meeting the 

new requirements on January 1, 2009. 

These new emissions control 

requirements will reduce HC emissions 

from uncontrolled gasoline containers 

by about 75%, including reducing 

spillage losses. The final rule also 

includes new certification and 

compliance requirements that will help 

ensure that the containers achieve 

emissions control in use over the life of 

the container. The standards and 

program requirements we are finalizing 

are very similar to those adopted by 

California in 2005, so that 

manufacturers will be able to sell 50- 

state products. Overall, commenters 

were very supportive of the proposed 

new emissions control program for 

portable fuel containers. 

We are establishing the portable fuel 

container (PFC) standards and 

emissions control requirements under 

section 183(e) of the Clean Air Act, 

which directs EPA to study, list, and 

regulate consumer and commercial 

products that are significant sources of 

VOC emissions. In 1995, after 

conducting a study and submitting a 

Report to Congress on VOC emissions 

from consumer and commercial 

products, EPA published an initial list 

of product categories to be regulated 

under section 183(e). Based on criteria 

that we established pursuant to section 

183(e)(2)(B), we listed for regulation 

those consumer and commercial 

products that we considered at the time 

to be significant contributors to the 

ozone nonattainment problem, but we 

did not include PFC emissions.201 After 

analyzing the emissions inventory 

impacts of these containers, we 

published a Federal Register notice that 

added PFCs to the list of consumer 


pwalker on PROD1PC71 with RULES_2
8500 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

202 71 FR 28320 ‘‘Consumer and Commercial 

Products: Schedule for Regulation,’’ May 16, 2006. 

203See not only the notice cited in the previous 

note, but also 71 FR 15894 (‘‘EPA will afford 

interested persons the opportunity to comment on 

the data underlying the listing before taking final 

action on today’s proposal’’). 

204See section 183(e)(1); see also section 183(e)(4) 

providing broad authority to include ‘‘systems of 

regulation’’ in controlling VOC emissions from 

consumer products. 

205 ‘‘Quantification of Permeation and 

Evaporative Emissions From Portable Fuel 

Container’’, California Air Resources Board, June 

2004. 

products to be regulated.202 We 

requested comment on the data 

underlying the listing but did not 

receive any comments.203 We continue 

to believe that the standards we 

proposed and are finalizing for fuel 

containers represent ‘‘best available 

controls’’ as required by section 

183(e)(3)(A). Determination of the ‘‘best 

available controls’’ requires EPA to 

determine the degree of reduction 

achievable through use of the most 

effective control measures (which 

includes chemical reformulation, and 

other measures) after considering 

technological and economic feasibility, 

as well as health, energy, and 

environmental impacts.204

A. What Are the New HC Emissions 

Standards for PFCs? 

1. Description of Emissions Standard 

We are finalizing as proposed a 

performance-based standard of 0.3 

grams per gallon per day (g/gal/day) of 

HC to control evaporative and 

permeation losses. The standard will be 

measured based on the emissions from 

the container over a diurnal test cycle. 

The cans will be tested as a system with 

their spouts attached. Manufacturers 

will test the containers by placing them 

in an environmental chamber which 

simulates summertime ambient 

temperature conditions and cycling the 

containers through the 24-hour 

temperature profile (72–96 °F), as 

discussed below. The test procedures, 

which are described in more detail 

below, ensure that containers meet the 

emissions standard over a range of inuse conditions such as different 

temperatures, different fuels, and taking 

into consideration factors affecting 

durability. EPA received only 

supportive comments on the proposed 

emissions standards. 

2. Determination of Best Available 

Control 

We continue to believe that the 0.3 g/ 

gal/day emissions standard and 

associated test procedures reflect the 

performance of the best available 

control technologies including durable 

permeation barriers, auto-closing 

spouts, and a can that is well-sealed to 

reduce evaporative losses. The standard 

is both economically and 

technologically feasible. To comply 

with California’s program, gas can 

manufacturers have developed gas cans 

with low VOC emissions at a reasonable 

cost (see section XIII. for costs). Testing 

of cans designed to meet CARB 

standards has shown the new standards 

to be technologically feasible. When 

tested over cycles very similar to those 

we are adopting, emissions from these 

cans have been in the range of 0.2–0.3 

g/gal/day.205 These cans have been 

produced with permeation barriers 

representing a high level of control (over 

90 percent reductions) and with autoclosing spouts, which are technologies 

that represent best available controls for 

gas cans. Establishing the standard at 

0.3 g/gal/day will require the use of best 

available technologies. As discussed in 

the proposal, we are finalizing a level at 

the upper end of the tested performance 

range to account for product 

performance variability (see 71 FR 

15896). In addition, we believe that 

current best designs can achieve these 

levels, so we do not believe that the 

standard forecloses use of any of the 

existing performing product designs. 

Our detailed feasibility analysis is 

provided in the Regulatory Impact 

Analysis. We did not receive any 

comments on our feasibility analysis. 

In addition to considering 

technological and economic feasibility, 

section 183(e)(1)(A) requires us to 

consider ‘‘health, environmental, and 

energy impacts’’ in assessing best 

available controls. Environmental and 

health impacts are discussed in section 

III. Moreover, control of spillage from 

containers may reduce fire hazards as 

well because cans would stay tightly 

closed if tipped over. We expect the 

energy impacts of gas can control to be 

positive, because the standards will 

reduce evaporative fuel losses. 

3. Diesel, Kerosene and Utility 

Containers 

Diesel and kerosene containers are 

manufactured by the same 

manufacturers as are gasoline containers 

and are identical to gasoline containers 

except for color (diesel containers are 

yellow and kerosene containers are 

blue). In the proposal, we requested 

comment on applying the emissions 

control requirements being proposed for 

gasoline containers to diesel and 

kerosene containers (see 71 FR 15897). 

California included diesel and kerosene 

cans in their regulations largely due to 

the concern that they would be 

purchased as substitutes for gasoline 

containers. We received only supportive 

comments for including these 

containers in the program. Several states 

and state organizations urged EPA to 

include these containers in the EPA 

program, viewing their omission as a 

significant difference between the 

California program and EPA’s proposed 

program. 

We recognize that using uncontrolled 

diesel and kerosene containers as a 

substitute for gasoline containers would 

result in a loss of emissions reductions. 

California collected limited survey data 

which indicated that about 60 percent of 

kerosene containers were being used for 

gasoline. In addition, keeping gasoline 

in containers marked for other fuels 

could lead to misfueling of equipment 

and possible safety issues. Finally, not 

including these containers would likely 

be viewed as a gap in EPA’s program, 

resulting in states adopting or retaining 

their own emissions control program for 

PFCs. This would hamper the ability of 

manufacturers to have a 50-state 

product line. For these reasons, we are 

including diesel and kerosene 

containers in the program. 

We are also clarifying that utility jugs 

are considered portable gasoline 

containers and therefore are subject to 

the program. They are designed and 

marketed for use with gasoline, often to 

fuel recreational equipment such as allterrain vehicles and personal watercraft. 

This interpretation is consistent with 

the scope of the California program. 

California recently issued a clarification 

that these containers are covered by 

their program, after some utility jug 

manufacturers failed to meet the 

existing California requirements. 

4. Automatic Shut-Off 

We received a few comments 

encouraging EPA to consider or evaluate 

spillage control requirements. 

California’s original program which 

began in 2001 required automatic shutoff as a way to reduce spillage. 

However, for reasons discussed in the 

proposal, we did not propose and are 

not finalizing automatic shut-off 

requirements (see 71 FR 15896). 

Automatic shut-off is supposed to stop 

the flow of fuel when the fuel reaches 

the top of the receiving tank in order to 

prevent over-filling. However, due to a 

wide variety of receiving fuel tank 

designs, the auto shut-off spouts do not 

work well with a variety of equipment 

types. In California, this problem led to 

spillage and consumer dissatisfaction, 

and California has removed automatic 

shut-off requirements from their 

program. 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8501 

We continue to believe that including 

an automatic shut-off requirement 

would be counterproductive at this 

time. We believe that the automatic 

closing cans, even without automatic 

shut-off requirements, will lead to 

reduced spillage. Consumers will be 

able to watch the fuel rise in the 

receiving tank and stop fuel flow using 

the automatic close features prior to 

overfill. As discussed in the proposal, 

automatic closure keeps the cans closed 

when they are not in use and provides 

more control to the consumer during 

use. We believe consumers will 

appreciate this feature and see it as an 

improvement over existing cans, 

whereas an automatic shut-off that 

worked with only some equipment 

types would not be acceptable. 

B. Timing of Standard 

We are finalizing as proposed a start 

date for the new PFC standards of 

January 1, 2009. We received comments 

from state organizations recommending 

that the program start on January 1, 

2008. In the proposal we recognized that 

adequate lead time is a key aspect of the 

standard’s technological feasibility. 

Manufacturers have developed the 

primary technologies to reduce 

emissions from gas cans but will need 

a few years of lead time to certify 

products and ramp up production to a 

national scale. The certification process 

will take at least six months due to the 

required durability demonstrations 

described below, and manufacturers 

will need time to procure and install the 

tooling needed to produce gas cans with 

permeation barriers for nationwide 

sales. Commenters did not provide any 

new information to counter these points 

and we continue to believe for these 

reasons that the January 1, 2009 start 

date is appropriate. 

The standards apply to containers 

manufactured on or after the start date 

of the program and do not affect cans 

produced before the start date. As 

proposed, as of July 1, 2009, 

manufacturers and importers must not 

enter into U.S. commerce any products 

not meeting the emissions standards. 

This provides manufacturers with a 6- 

month period to clear any stocks of 

containers manufactured prior to the 

January 1, 2009 start of the program, 

allowing the normal sell-through of 

these cans to the retail level. Retailers 

may sell their stocks of containers 

through the course of normal business 

without restriction. Containers are 

required by this rule to be stamped with 

their production date (consistent with 

current industry practices), which will 

allow EPA to determine which cans are 

required to meet the new standards. We 

did not receive any comments on these 

aspects of the proposal or comments 

suggesting that the proposed lead times 

would not be adequate. 

C. What Test Procedures Would Be 

Used? 

As proposed, we are finalizing a 

system of regulations for containers that 

includes test conditions designed to 

assure that the intended emission 

reductions occur over a range of in-use 

conditions such as operating at different 

temperatures, with different fuels, and 

considering factors affecting durability. 

These test procedures are authorized 

under section 183(e)(4) as part of a 

system of regulations to achieve the 

appropriate level of emissions 

reductions. Emission testing on all 

containers that manufacturers produce 

is not feasible due to the high annual 

production volumes and the cost and 

time involved with emissions testing. 

Instead, before the containers are 

introduced into commerce, the 

manufacturer will need to receive a 

certificate of conformity from EPA that 

the containers conform to the emissions 

standards, based on manufacturers’

applications for certification. 

Manufacturers must submit test data on 

a sample of containers that are 

prototypes of the products the 

manufacturer intends to produce. The 

certificate issued by EPA will cover the 

range of production containers 

represented by the prototype container. 

As part of the application for 

certification, manufacturers also need to 

declare that their production cans will 

not deviate in materials or design from 

the prototype cans that are tested. If the 

production containers do deviate, then 

they will not be coved by the certificate 

and it will be a violation of the 

regulations to introduce such 

uncertified containers into commerce. 

Manufacturers must obtain their 

certification from EPA prior to 

introducing their products into 

commerce. The test procedures and 

certification requirements are described 

in detail below. Unless otherwise noted 

below, we did not receive comments on 

these test procedures. 

We are requiring that manufacturers 

test cans in their most likely storage 

configuration. The key to reducing 

evaporative losses from gasoline 

containers is to ensure that there are no 

openings on the cans that could be left 

open by the consumer. Traditional cans 

have vent caps and spout caps that are 

easily lost or left off cans, which leads 

to very high evaporative emissions. We 

expect manufacturers to meet the 

evaporative standards by using 

automatic closing spouts and by 

removing other openings that 

consumers could leave open. However, 

if manufacturers choose to design cans 

with an opening that does not close 

automatically, we are requiring that 

containers be tested in their open 

condition. If the containers have any 

openings that consumers could leave 

open (for example, vents with caps), 

these openings thus would need to be 

left open during testing. This applies to 

any opening other than where the spout 

attaches to the can. We believe it is 

important to take this approach because 

these openings could be a significant 

source of in-use emissions and there is 

a realistic possibility that these 

openings would be inadvertently left 

open in use. 

Except for pressure cycling, discussed 

below, spouts would be in place during 

testing because this would be the most 

likely storage configuration for the 

emissions compliant cans. Spouts 

would still be removable so that 

consumers would be able to refill the 

cans, but we would expect the 

containers to be resealed by consumers 

after being refilled in order to prevent 

spillage during transport. We do not 

believe that consumers would routinely 

leave spouts off cans because spouts are 

integral to the cans’ use and it is 

obvious that they need to be sealed. 

1. Diurnal Test 

We are finalizing as proposed a test 

procedure for diurnal emissions testing 

where the containers are placed in an 

environmental chamber or a Sealed 

Housing for Evaporative Determination 

(SHED), the temperature is varied over 

a prescribed temperature and time 

profile, and the hydrocarbons escaping 

from the can are measured. Containers 

are to be tested over the same 72–96 °F 

(22.2–35.6 °C) temperature profile used 

for automotive applications. This 

temperature profile represents a hot 

summer day when ground level ozone 

emissions would be highest. Three 

containers must be tested, each over a 

three-day test. Testing three cans for 

certification will help address 

variability in products or test 

measurements. All three cans must 

individually meet the standard. As 

noted above, cans must be tested in 

their most likely storage configuration. 

The final results are to be reported in 

grams per gallon, where the grams are 

the mass of hydrocarbons escaping from 

the container over 24 hours and the 

gallons are the nominal can capacity. 

The daily emissions will then be 

averaged for each can to demonstrate 

compliance with the standard. This test 

captures hydrocarbons lost through 

permeation and any other evaporative 


pwalker on PROD1PC71 with RULES_2
8502 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

206 Draft SAE Information Report J1769, ‘‘Test 

Protocol for Evaluation of Long Term Permeation 

Barrier Durability on Non-Metallic Fuel Tanks,’’

(Docket A–2000–01, document IV–A–24). 

207Final Rule, ‘‘Control of Emissions from 

Nonroad Large Spark-ignition engines, and 

Recreational Engines (Marine and Land-based)’’, 67 

FR 68287, November 8, 2002. 

losses from the container as a whole. 

The grams of hydrocarbons lost may be 

determined by either weighing the gas 

can before and after the diurnal test 

cycle or measuring emissions directly 

using the SHED instrumentation. 

Consistent with the automotive test 

procedures, we are requiring that the 

testing take place using 9 pounds per 

square inch (psi) Reid Vapor Pressure 

(RVP) certification gasoline, which is 

the same fuel required by EPA to be 

used in its other evaporative test 

programs. We are requiring testing be 

done using E10 fuel (10% ethanol 

blended with the gasoline described 

above) to help ensure in-use emission 

reductions on ethanol-gasoline blends, 

which tend to have increased 

evaporative emissions with certain 

permeation barrier materials. We 

continue to believe that including 

ethanol in the test fuel will lead to the 

selection of materials by manufacturers 

that are consistent with ‘‘best available 

control’’ requirements for all likely 

contained gasolines, and is clearly 

appropriate given the expected increase 

over time of the use of ethanol blends 

of gasoline under the renewable fuel 

provisions of the Energy Policy Act of 

2005. 

Diurnal emissions are not only a 

function of temperature and fuel 

volatility, but of the size of the vapor 

space in the container as well. We are 

finalizing as proposed that the fill level 

at the start of the test be 50% of the 

nominal capacity of the can. This would 

likely be the average fuel level of the gas 

can in-use. Nominal capacity of the cans 

is defined as the volume of fuel, 

specified by the manufacturer, to which 

the can could be filled when sitting on 

level ground. The vapor space that 

normally occurs in a container, even 

when ‘‘full,’’ would not be considered 

in the nominal capacity of the can. All 

of these test requirements are meant to 

represent typical in-use storage 

conditions for containers, on which EPA 

can base its emissions standards. The 

above provisions for diurnal testing are 

included as a way to implement the 

standards effectively, which, in 

conjunction with the new emissions 

standard, will lead to the use of best 

available technology at a reasonable 

cost. We did not receive comment on 

these test procedures. 

Before testing for certification, the 

container must be run through the 

durability tests described below. Within 

8 hours of the end of the soak period 

contained in the durability cycle, the 

cans are to be drained and refilled to 50 

percent nominal capacity with fresh 

fuel, and then the spouts re-attached. 

When the can is drained, it must be 

immediately refilled to prevent it from 

drying out. The timing of these steps is 

needed to ensure that the stabilized 

permeation emissions levels are 

retained. The can will then be weighed 

and placed in the environmental 

chamber for the diurnal test. After each 

diurnal, the can must be re-weighed. In 

lieu of weighing the container, 

manufacturers may opt to measure 

emissions from the SHED directly. For 

any in-use testing of containers, the 

durability procedures will not be run 

prior to testing. 

California’s test procedures are very 

similar to those described above. 

However, the California procedure 

contains a more severe temperature 

profile of 65–105 °F. As proposed, we 

will allow manufacturers to use this 

temperature profile to test cans as long 

as other parts of the EPA test procedures 

are followed, including the durability 

provisions below. 

2. Preconditioning to Ensure Durable InUse Control 

a. Durability Cycles 

As proposed, we are specifying three 

durability aging cycles to help ensure 

durable permeation barriers: slosh, 

pressure-vacuum cycling, and 

ultraviolet (UV) exposure. They 

represent conditions that are likely to 

occur in-use for gas cans, especially for 

those cans used for commercial 

purposes and carried on truck beds or 

trailers. The purpose of these 

deterioration cycles is to help ensure 

that the technology chosen by 

manufacturers is durable in-use, 

representing best available control, and 

the measured emissions are 

representative of in-use permeation 

rates. Fuel slosh, pressure cycling, and 

ultraviolet (UV) exposure each impact 

the durability of certain permeation 

barriers, and we believe these cycles are 

needed to ensure long-term emissions 

control. Without these durability cycles, 

manufacturers could choose to use 

materials that meet the standard when 

they are new but have degraded 

performance in-use, leading to higher 

emissions. We do not expect these 

procedures to adversely impact the 

feasibility of the standards, because 

there are permeation barriers available 

at a reasonable cost that do not 

deteriorate significantly under these 

conditions (these permeation barriers 

are examples of best available controls). 

For slosh and pressure cycling, we are 

finalizing durability tests that are based 

on draft recommended SAE practice for 

evaluating permeation barriers.206 For 

slosh testing, the container is to be filled 

to 40 percent capacity with E10 fuel and 

rocked for 1 million cycles. The 

pressure-vacuum testing contains 

10,000 cycles from ¥0.5 to 2.0 psi. This 

pressure may be applied through the 

opening where the spout attaches, in 

order to avoid the need to drill a hole 

in the container. The third durability 

test is intended to assess potential 

impacts of ultraviolet (UV) sunlight (0.2 

μm–0.4 μm) on the durability of a 

surface treatment. In this test, the 

container must be exposed to a UV light 

of at least 0.40 Watt-hour/meter 2

/minute on the container surface for 15 

hours per day for 30 days. Alternatively, 

containers may be exposed to direct 

natural sunlight for an equivalent period 

of time. We have also established these 

same durability requirements as part of 

our program to control permeation 

emissions from recreational vehicle fuel 

tanks.207 While there are obvious 

differences in the use of gas cans 

compared to the use of recreational 

vehicle fuel tanks, we believe the test 

procedures offer assurance that 

permeation controls used by 

manufacturers will be robust and will 

continue to perform as intended when 

in use. 

Manufacturers may also do an 

engineering evaluation, based on data 

from testing on their permeation barrier, 

to demonstrate that one or more of these 

factors (slosh, UV exposure, and 

pressure cycle) do not impact the 

permeation rates of their fuel containers 

and therefore that the durability cycles 

are not needed. Manufacturers may use 

data collected previously on gas cans or 

other similar containers made with the 

same materials and processes to 

demonstrate that the emissions 

performance of the materials does not 

degrade when exposed to slosh, UV, 

and/or pressure cycling. The test data 

must be collected under equivalent or 

more severe conditions as those noted 

above. EPA must approve an alternative 

demonstration method prior to its use 

for certification. 

b. Preconditioning Fuel Soak 

It takes time for fuel to permeate 

through the walls of containers. 

Permeation emissions will increase over 

time as fuel slowly permeates through 

the container wall, until the permeation 

finally stabilizes when the saturation 

point is reached. We want to evaluate 

emissions performance once permeation 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8503 

208Final Rule, ‘‘Control of Emissions from 

Nonroad Large Spark-ignition engines, and 

Recreational Engines (Marine and Land-based)’’, 67 

FR 68287, November 8, 2002. 

emissions have stabilized, to ensure that 

the emissions standard is met in-use. 

Therefore, as proposed, prior to testing 

the containers, the cans need to be 

preconditioned by allowing the cans to 

sit with fuel in them until the 

hydrocarbon permeation rate has 

stabilized. Under this step, the container 

is filled with a 10-percent ethanol blend 

in gasoline (E10), sealed, and soaked for 

20 weeks at a temperature of 28 ± 5 °C. 

As an alternative, the fuel soak may be 

performed, for example, for 10 weeks at 

43 ± 5 °C to shorten the test time, if the 

certifier can demonstrate that the 

hydrocarbon permeation rate has 

stabilized. During this fuel soak, the 

container must be sealed with the spout 

attached. This is representative of how 

the gas cans would be stored in-use. We 

have established these soak 

temperatures and durations based on 

protocols EPA has established to 

measure permeation from fuel tanks 

made of HDPE.208 These soak times 

should be sufficient to achieve 

stabilized permeation emission rates. 

However, if a longer time period is 

necessary to achieve a stabilized rate for 

a given container, the manufacturer 

must use a longer soak period (and/or 

higher temperature) consistent with 

good engineering judgment. 

Durability testing that is performed 

with fuel in the container may be 

considered part of the fuel soak 

provided that the container 

continuously has fuel in it. This 

approach would shorten the total test 

time. For example, the length of the UV 

and slosh tests may be considered as 

part of the fuel soak provided that the 

container is not drained between these 

tests and the beginning of the fuel soak. 

In such cases, manufacturers must use 

the 40 percent fill level for the soak 

period. The reduced fill level will not 

affect the permeation rate of the 

container because the vapor space in the 

container will be saturated with fuel 

vapor. 

c. Spout Actuation 

In its recently revised program for 

PFCs, California included a durability 

demonstration for spouts. We are 

finalizing as proposed a durability 

demonstration consistent with 

California’s procedures. Automatically 

closing spouts are a key part of the 

emissions controls expected to be used 

to meet the new standards. If these 

spouts stick or deteriorate, in-use 

emissions could remain very high, at 

essentially uncontrolled levels. 

California requires manufacturers to 

actuate the spouts 200 times prior to the 

soak period and 200 times near the 

conclusion of the soak period to 

simulate spout use. The spouts’ internal 

components would be required to be 

exposed to fuel by tipping the can 

between each cycle. Spouts that stick 

open or leak during these cycles would 

be considered failed. The total of 400 

spout actuations represents about 1.5 

actuations per week on average over the 

average container life of 5 years. In the 

absence of data, we believe this number 

of actuations appears to reasonably 

replicate the number that can occur inuse for high-end usage and will help 

ensure quality spout designs that do not 

fail in-use. We also believe that 

finalizing requirements consistent with 

California will help manufacturers to 

avoid duplicate testing. 

One commenter stated that 400 

actuations over a short period of time is 

not representative of real life and that 

many containers will last 15–25 years. 

In response, we understand that 5 years 

is an estimate of the average life and 

that some containers will be used longer 

than 5 years. However, we continue to 

believe that the approach we are 

finalizing is reasonable. This provision 

is meant to help ensure that spouts are 

made of quality materials so that the 

emissions performance will not 

deteriorate readily during normal use. 

The provision also helps to ensure that 

spouts will not break easily or stick 

open during normal use, and helps to 

identify issues during the certification 

process prior to sale. In addition, this 

approach balances the need to ensure 

quality designs with the manufacturers’

need to be able to conduct certification 

testing in a reasonable amount of time. 

This type of ‘‘accelerated aging’’ of 

components is a necessary part of many 

of EPA’s mobile source emissions 

control programs. 

D. What Certification and In-Use 

Compliance Provisions Is EPA 

Adopting? 

1. Certification 

Section 183(e)(4) authorizes EPA to 

adopt appropriate systems of regulations 

to implement the program, including 

requirements ranging from registration 

and self-monitoring of products, to 

prohibitions, limitations, economic 

incentives and restrictions on product 

use. We are finalizing as proposed a 

certification mechanism pursuant to 

these authorities. Manufacturers are 

required to apply for and receive an 

EPA certificate of conformity, using the 

certification process specified in the 

regulations, before entering their 

containers into U.S. commerce. To have 

their products certified, manufacturers 

must first define their emission families. 

This is generally based on selecting 

groups of products that have similar 

emissions. For example, co-extruded 

containers of various geometries could 

be grouped together. The manufacturer 

must select a worst-case configuration 

for testing, such as the thinnest-walled 

container. Manufacturers may group 

gasoline, diesel, and kerosene 

containers together as long as the 

containers do not differ materially in a 

way that could be anticipated to cause 

differences in emissions performance. 

These determinations must be made 

using good engineering judgment and 

are subject to EPA review. Testing with 

those products, as specified above, must 

show compliance with emission 

standards. The manufacturers must then 

send us an application for certification. 

As proposed, we define the 

manufacturer as the entity that is in dayto-day control of the manufacturing 

process (either directly or through 

contracts with component suppliers) 

and responsible for ensuring that 

components meet emissions-related 

specifications. Importers are not 

considered a manufacturer under this 

program, and thus would not receive 

certificates. The manufacturers of the 

PFCs they import would have to certify 

the cans. Importers will only be able to 

import PFCs that are certified. 

After reviewing the information in the 

application, if all the required 

information is provided and it 

demonstrates compliance with the 

standards, then we will issue a 

certificate of conformity allowing 

manufacturers to introduce into 

commerce the containers from the 

certified emission family. We expect 

EPA review to typically take about 90 

days or less, but could be longer if we 

have questions regarding the 

application. The certificate of 

conformity will be for a production 

period of up to 5 years. Manufacturers 

are allowed to carry over certification 

test data if no changes are made to their 

products that would affect emissions 

performance. We may revoke or void a 

certificate if we find that data and 

information on which it is based is false 

or inaccurate. We will notify the 

manufacturer in writing and the 

manufacturer may request a hearing. 

Changes to the certified products that 

affect emissions require reapplication 

for certification. Manufacturers wanting 

to make changes without doing testing 

are required to present an engineering 


pwalker on PROD1PC71 with RULES_2
8504 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

209 Delaware, Maine, Maryland, Pennsylvania, 

New York, Connecticut, Massachusetts, New Jersey, 

Rhode Island, Vermont, Virginia, Washington DC, 

Texas, Ohio, and New Hampshire. 

evaluation demonstrating that emissions 

are not affected by the change. 

The manufacturer is responsible for 

meeting applicable emission standards. 

Importers are also responsible for the 

product meeting the standards. While 

we are not including requirements for 

manufacturers to conduct productionline testing, we may pursue EPA in-use 

testing of certified products to evaluate 

compliance with emission standards. If 

we find that containers do not meet 

emissions standards in use, we would 

consider the new information during 

future product certification. Also, we 

may require certification prior to the 

end of the 5-year production period 

otherwise allowed between 

certifications. The details of the 

certification process are provided in the 

regulatory text. We did not receive any 

comments on the certification 

procedures described above. 

EPA is authorized under the 

Independent Offices Appropriation Act 

of 1952 to establish fees for Government 

services and things of value that it 

provides. This provision encourages 

Federal regulatory agencies to recover, 

to the fullest extent possible, costs 

provided to identifiable recipients. The 

agency currently collects fees for 

compliance programs administered by 

EPA including those for certification of 

motor vehicles and motor vehicle 

engines. At this time, we are not 

finalizing a fee program for PFC 

certification. However, we may establish 

a certification fee for PFCs in a future 

rulemaking. 

2. Emissions Warranty and In-Use 

Compliance 

We are finalizing as proposed an 

emissions warranty period of one year 

to be provided by the manufacturer of 

the PFC to the consumer. The warranty 

covers emissions-related materials 

defects and breakage under normal use. 

For example, the warranty covers 

failures related to the proper operation 

of the auto-closing spout or defects with 

the permeation barriers. We are also 

requiring that manufacturers submit a 

warranty and defect report documenting 

successful warranty claims and the 

reason for the claim to EPA annually so 

that EPA may monitor the program. 

Unsuccessful claims will not need to be 

submitted. We believe that this warranty 

will encourage designs that work well 

for consumers and are durable. 

Although it does not fully cover the 

average life of the product, it is not 

typical for very long consumer 

warranties to be offered with such 

products and therefore we believe a oneyear warranty is reasonable. Also, the 

warranty period is more similar to the 

expected life of gas cans when used in 

commercial operations, which would 

need to be considered by the 

manufacturers in their designs. We did 

not receive any comments on these 

warranty provisions. 

EPA views this aspect of the final rule 

as another part of the ‘‘system of 

regulation’’ it is finalizing to control 

VOC emissions from PFCs. A warranty 

will promote the objective of the rule by 

providing consumers with an 

opportunity to replace containers that 

have failed in use. The warranty 

provides an obvious remedy to 

consumers if issues arise. The provision 

also helps to ensure that manufacturers 

will ‘‘stand behind’’ their product if 

they fail in use, thus improving product 

design and performance. Similarly, the 

defect reporting requirement will 

promote product integrity by allowing 

EPA to readily monitor in-use 

performance by tracking successful 

warranty claims. 

Gas cans have a typical life of about 

5 years on average before they are 

scrapped. We are including durability 

provisions as part of certification testing 

to help ensure containers perform well 

in use. Under this final rule, we could 

test containers within their five-year 

useful life period to monitor in-use 

performance and take steps to correct 

in-use failures, including denying 

certification, for container designs that 

are consistently failing to meet 

emissions standards. (This provision 

thus would work in tandem with the 

warranty claim reporting provision 

contained in the preceding paragraph.) 

3. Labeling 

Since the requirements will be 

effective based on the date of 

manufacture of the container, we are 

requiring as proposed that the date of 

manufacture must be indelibly marked 

on the can. This is consistent with 

current industry practices. This is 

needed so that we and others can 

recognize whether a unit is regulated or 

not. In addition, we are requiring a label 

providing the manufacturer name and 

contact information, a statement that the 

can is EPA certified, citation of EPA 

regulations, and a statement that it is 

warranted for one year from the date of 

purchase. The manufacturer name and 

contact information is necessary to 

verify certification. Indicating that a 

one-year warranty applies will ensure 

that consumers have knowledge of the 

warranty and a way to contact the 

manufacturer. Enforcement of the 

warranty is critical to the defect 

reporting system. In finalizing this 

labeling requirement, we further 

believe, pursuant to CAA section 

183(e)(8), that these labeling 

requirements will be useful in meeting 

the NAAQS for ozone. They provide 

necessary means of implementing the 

various measures described above 

which help ensure that VOC emission 

reductions from the proposed standard 

will in fact occur in use. We did not 

receive any comments on these labeling 

requirements. 

E. How Would State Programs Be 

Affected By EPA Standards? 

Several states have adopted emissions 

control programs for PFCs. California 

implemented an emissions control 

program for PFCs in 2001. Fifteen other 

states, mostly in the northeast, have 

adopted or are considering adopting the 

California program.209 In 2005, 

California adopted a revised program, 

which will go into effect on July 1, 2007. 

The revised California program is very 

similar to the program we are finalizing. 

We believe that although a few aspects 

of the program we are finalizing are 

different, manufacturers will be able to 

meet both EPA and CARB requirements 

with the same container designs and 

therefore sell a single product in all 50 

states. In most cases, we believe 

manufacturers will take this approach. 

By closely aligning with California 

where possible, we will allow 

manufacturers to minimize research and 

development (R&D) and emissions 

testing, while potentially achieving 

better economies of scale. It may also 

reduce administrative burdens and 

market logistics from having to track the 

sale of multiple can designs. We 

consider these to be important factors 

under CAA section 183(e) which 

requires us to consider economic 

feasibility of controls. 

States that have adopted the original 

California program will likely choose to 

either adopt the new California program 

or eliminate their state program in favor 

of the federal program. Because the 

programs are similar, we expect that 

most states will eventually choose to 

rely on implementation of the EPA 

program rather than continue their own 

program. Including diesel and kerosene 

containers in our final program further 

aligns the two programs and several 

states commented in support of this 

approach. We expect very little 

difference in the emissions reductions 

provided by the EPA and California 

programs in the long term. 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8505 

F. Provisions for Small PFC 

Manufacturers 

As discussed in previous sections, 

prior to issuing our proposal for this 

rulemaking, we analyzed the potential 

impacts of these regulations on small 

entities. As a part of this analysis, we 

convened a Small Business Advocacy 

Review Panel (SBAR Panel, or ‘‘the 

Panel’’). During the Panel process, we 

gathered information and 

recommendations from Small Entity 

Representatives (SERs) on how to 

reduce the impact of the rule on small 

entities, and those comments are 

detailed in the Final Panel Report which 

is located in the public record for this 

rulemaking (Docket EPA–HQ–OAR–

2005–0036). Based upon these 

comments, we proposed to include 

flexibility and hardship provisions for 

container manufacturers. Since nearly 

all manufacturers are small entities and 

they account for about 60 percent of 

sales, the Panel recommended that we 

extend the flexibility options and 

hardship provisions to all 

manufacturers. Our proposal was 

consistent with that recommendation. 

We did not receive any comments on 

our proposed flexibilities and are 

finalizing them as proposed. The 

flexibility provisions are incorporated 

into the program requirements 

described earlier in sections VII.B 

through VII.D. The hardship provisions 

are described below. For further 

discussion of the Panel process, see 

section X.C of this rule and/or the Final 

Panel Report. 

The Panel recommended and we are 

finalizing two types of hardship 

provisions for container manufacturers. 

These entities could, on a case-by-case 

basis, face hardship, and we are 

finalizing these provisions to provide 

what could prove to be needed safety 

valves for these entities. Thus, the 

hardship provisions are as follows: 

1. First Type of Hardship Provision 

Container manufacturers may petition 

EPA for limited additional lead-time to 

comply with the standards. A 

manufacturer would have to 

demonstrate that it has taken all 

possible business, technical, and 

economic steps to comply but the 

burden of compliance costs prevents it 

from meeting the requirements of this 

subpart by the required compliance date 

and not having an extension would 

jeopardize the company’s solvency. 

Hardship relief may include 

requirements for interim emission 

reductions. 

2. Second Type of Hardship Provision 

Container manufacturers are 

permitted to apply for hardship relief if 

circumstances outside their control 

cause the failure to comply (i.e., an ‘‘Act 

of God,’’ a fire at the manufacturing 

plant, or the unforeseen shut down of a 

supplier with no alternative available), 

and if failure to sell the subject 

containers would jeopardize the 

company’s solvency. The terms and 

timeframe of the relief will depend on 

the specific circumstances of the 

company and the situation involved. 

For both types of hardship provisions, 

the length of the hardship relief will be 

established, during the initial review, 

for not more than one year and will be 

reviewed annually thereafter as needed. 

As part of its application, a company is 

required to provide a compliance plan 

detailing when and how it will achieve 

compliance with the standards. 

VIII. What Are the Estimated Impacts 

of the Rule? 

A. Refinery Costs of Gasoline Benzene 

Reduction 

The benzene control program we are 

finalizing today is expected to result in 

many refiners investing in benzene 

control hardware and changing the 

operations in their refineries to reduce 

their gasoline benzene levels. The 

finalized benzene control program 

requires refiners and importers to 

reduce their gasoline benzene levels on 

average down to 0.62 vol% benzene. 

The averaging, banking and trading 

(ABT) provisions being finalized along 

with the 0.62 vol% average benzene 

control standard allows refineries that 

reduce their gasoline benzene levels 

below 0.62 vol% to earn credits and 

transfer those credits to other refineries 

which would find it more expensive to 

reduce their benzene levels down to the 

average standard. The ABT program will 

allow refiners to optimize their 

investments, which we believe will 

result in achieving the average benzene 

control standard nationwide at much 

lower costs. The final benzene control 

program also puts into place a 1.3 vol% 

benzene maximum average standard 

which requires each refinery to reduce 

its gasoline benzene levels to or below 

this standard and will increase the 

benzene control costs only slightly 

compared to a benzene control program 

which does not contain a maximum 

average standard. We estimate that the 

national average refinery costs incurred 

to comply with the fully phased-in 

benzene control program will be 0.27 

cents per gallon, averaged over all 

gasoline. This estimate includes the 

capital costs, which are amortized over 

the volume of gasoline produced. 

In this section we summarize the 

methodology used to estimate the costs 

of benzene control (including changes 

we have made since the proposal) and 

our estimated costs for the program. In 

addition we evaluate the cost estimate 

provided by the American Petroleum 

Institute. A detailed discussion of all of 

these analyses is found in Chapter 9 of 

the RIA. 

1. Methodology 

a. Overview of the Benzene Program 

Cost Methodology 

The basic methodology we used to 

estimate the cost of benzene control for 

the final rule is the same as that used 

for the proposed rule. Using a refineryby-refinery cost model that we 

developed for this rulemaking, we 

projected which refineries implement 

what benzene control technology, and 

the cost of each refinery’s benzene 

control step, to estimate compliance 

with the final benzene control program. 

We aggregated the individual refinery 

costs to develop a national average cost 

estimate for the final benzene control 

program. Based on the flexibilities 

offered by the ABT program, refiners are 

expected to come very close to 

achieving the 0.62 vol% average 

benzene standard on average with little 

overcompliance. For this reason, we 

modeled refiners achieving the average 

standard without any overcompliance. 

To the extent that any overcompliance 

does occur the costs and benefits of the 

benzene program will increase. 

b. Changes to the Cost Estimation 

Methodology Used in the Proposed Rule 

In deriving the cost estimate for the 

final rule, we identified and made a 

number of changes to the refinery 

modeling methodology used for the 

proposed rule. One of the primary 

changes was to base the future year fuel 

prices on the Annual Energy Outlook 

(AEO) 2006 instead of AEO 2005, which 

increased the crude oil price used in the 

analysis from $27 per barrel to $47 per 

barrel. Other changes included: (1) 

Updating the refinery modeling base 

year to 2004 (used for calibrating each 

refinery’s gasoline benzene levels); (2) 

modeling the baseline benzene levels 

and reductions on an annual basis 

instead of on a summer-only basis; (3) 

increasing the tax-hurdle rate of return 

to 15 percent from the 10 percent hurdle 

used in the proposed rule, and (4) 

including the treatment of the benzene 

in natural gasoline, which was assumed 

to be left untreated in the proposed rule 

analysis. 


pwalker on PROD1PC71 with RULES_2
8506 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

210An important reason for the discrepancy 

between our capital cost estimate and that by API 

(which was about three times higher) was that we 

only estimated the capital costs related to the 

benzene control technologies, not those related to 

octane recovery and increased hydrogen production 

needed for saturation or to replace the octane lost 

due to reduced benzene production by the reformer. 

For the final rule, we estimated these additional 

capital costs and included them in our capital cost 

estimates. 

211 Despite our commitment to accurately model 

the baseline operations of each refinery, we 

recognize that without detailed refinery-specific 

operations information at our disposal, that our 

modeling may not be accurate in some specific 

cases. Particular refineries may choose a different 

benzene control path than that estimated by our 

analysis for a number of reasons, including 

differences in the baseline and our lack of 

knowledge for investment and ABT program use 

preferences for each refiner. We believe, though, 

that overall our refinery cost model captures the 

strategies and costs for complying with the benzene 

control program. 

In addition, we also made some 

adjustments that were based on 

comments we received on the cost 

analysis that we conducted for the 

proposal, as well as the peer review 

process that we undertook for the 

proposal’s refinery cost model. One of 

the peer reviewers for the refinery-byrefinery cost model, and API in its 

comments on the proposed rule, 

provided capital cost estimates for the 

benzene control technologies.210 We 

reviewed these capital cost estimates 

and made some adjustments to 

somewhat increase the capital cost 

figures used in the final rule analysis. 

These changes were partially 

responsible for the higher costs reported 

here compared to those reported in the 

proposed rule. More complete 

descriptions of these and other changes 

made to the refinery cost model are 

contained in Chapter 9 the RIA. 

c. Linear Programming Cost Model 

We considered performing our cost 

assessments using a linear programming 

(LP) cost model. LP cost models are 

based on a set of complex mathematical 

representations of refineries which, for 

national analyses, are usually conducted 

on a regional basis. This type of refining 

cost model has been used by the 

government and the refining industry 

for many years for estimating the cost 

and other implications of changes to 

fuel quality. 

The design of LP models lends itself 

to modeling situations where every 

refinery in a region is expected to use 

the same control strategy and/or has the 

same process capabilities. As we began 

to develop a gasoline benzene control 

program with an ABT program, it 

became clear that LP modeling was not 

well suited for evaluating such a 

program. Because refiners will be 

choosing a variety of technologies for 

controlling benzene, and because the 

program will be national and will 

include an ABT program, we initiated 

development of a more appropriate cost 

model, as described below. However, 

the LP model remained important for 

providing many of the inputs into the 

cost model developed for this 

rulemaking. 

d. Refinery-by-Refinery Cost Model 

In contrast to LP models, refinery-byrefinery cost models are useful when 

individual refineries are expected to 

respond to program requirements in 

different ways and/or have significantly 

different process capabilities. Thus, in 

the case of modeling gasoline benzene 

control programs, we needed a model 

that could accurately simulate the 

variety of decisions refiners will make at 

different refineries, especially in the 

context of a nationwide ABT program. 

For this and other related reasons, we 

developed a refinery-by-refinery cost 

model specifically to evaluate the 

benzene control program. 

Our refinery-by-refinery benzene cost 

model incorporates the capacities of all 

the major units in each refinery in the 

country, as reported by the Energy 

Information Administration and in the 

Oil and Gas Journal. Regarding 

operational information, we know less 

about how specific refineries use the 

various units to produce gasoline and 

about such factors as octane and 

hydrogen costs for individual refineries. 

We used the LP model to estimate these 

factors on a regional basis, and we 

applied the average regional result to 

each refinery in that region (PADD). We 

calibrated the model for each individual 

refinery based on 2004 gasoline volumes 

and benzene levels (from the RFG data 

base), which was the most recent year 

for which data was available. After 

calibration, each refinery’s gasoline 

volume and benzene level closely 

matched their actual gasoline volumes 

and benzene levels. We also compared 

cost estimates of similar benzene control 

cases from both the refinery-by-refinery 

model and the LP model, and the results 

were in close agreement.211

Refinery-by-refinery cost models have 

been used in the past by both EPA and 

the oil industry for such programs as the 

highway and nonroad diesel fuel sulfur 

standards, and they are a proven means 

for estimating the cost of compliance for 

fuel control programs. For this refineryby-refinery benzene cost model, we 

conducted a peer review process, and 

have received some comments on the 

design of our model. We summarize 

some of these comments here, and they 

are summarized and addressed in detail 

in the RIA. (See Chapter 9 of the RIA for 

our responses to these peer-review 

comments.) The oil industry has also 

conducted similar analyses using a 

refinery-by-refinery modeling 

technique, including the oil industry’s 

cost analysis carried out for this 

rulemaking. 

Based on our understanding of the 

primary benzene control technologies 

(see section VI.A.1.c.i. above), the cost 

model assumes that four technologies 

will be used, as appropriate, for 

reducing benzene levels. All of these 

technologies focus on addressing 

benzene in the reformate stream. They 

are (1) routing the benzene precursors 

around the reformer (also called light 

naphtha splitting and reformer feed 

fractionation); (2) routing benzene 

precursors to an existing isomerization 

unit, if available; (3) benzene extraction 

(extractive distillation); and (4) benzene 

saturation. For the proposed rulemaking 

we assumed that only the usual feed or 

the product stream of the reformer will 

be processed by these benzene control 

technologies. However, since the 

proposal, we learned that another 

refinery stream—natural gasoline—

contains some benzene and will likely 

be treated by the saturation and 

extraction processes in refineries if they 

have or install these units. For the 

proposal, we assumed that natural 

gasoline would be blended directly into 

gasoline and not be treated by refiners 

if faced with a benzene control 

standard. However, most refiners have 

been combining natural gasoline with 

their crude oil to enable treating the 

sulfur in natural gasoline to help 

comply with the Tier 2 gasoline sulfur 

standard. Because the natural gasoline 

will be refined along with crude oil, the 

benzene in natural gasoline can and will 

be treated along with the benzene in 

crude oil. 

The nationwide ABT program is 

intended to optimize benzene reduction 

by allowing each refinery to 

individually choose the most costeffective means of complying with the 

program. To model this phenomenon, 

we first established an estimated cost for 

the array of technologies that could be 

employed by each refinery to reduce its 

gasoline benzene levels. We then 

deployed these technologies to 

refineries with baseline benzene levels 

above the 1.3 vol% benzene maximum 

average standard to bring them into 

compliance with this standard. Next we 

ranked the refineries in order from 

lowest to highest benzene control cost 

per gallon of gasoline and estimated the 

impact of their projected benzene 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8507 

212The ABT analysis assumed that small refiners 

would comply with the 1.3 vol% maximum average 

standard in January 2015 at the same time as the 

0.62 vol% annual average standard. We are 

finalizing a later maximum average standard 

implementation date (July 2016), which will have 

very little effect on the overall program and 

therefore has not been incorporated into this 

analysis. 

control strategies on refinery benzene 

levels. The model then follows this 

ranking, starting with the lowest-cost 

refineries, and adds refineries and their 

associated control technologies one-byone until the projected national average 

benzene level reaches 0.62 vol% 

benzene. This modeling strategy 

projects the benzene control technology 

that will be used by each refinery, as 

well as identifies those refineries that 

are expected to generate credits and 

those that are expected to use credits in 

lieu of investing in benzene control. The 

sum of the costs of the refineries 

expected to invest in benzene control 

provides the projected overall cost of 

the program. 

Finally, we projected how the ABT 

program will affect the program cost and 

benzene levels starting in 2007, when 

early credits can be generated. We 

assumed that refiners will use 

operational changes (benzene precursor 

rerouting, with isomerization if 

available) to the maximum extent 

possible in mid-2007, when they are 

able to start to generate credits. We also 

assumed that refiners will choose to 

accumulate additional early credits by 

making their initial lowest-cost capital 

investments for reducing their gasoline 

benzene levels, and that these changes 

will take effect in 2010. We modeled 

compliance by nonsmall and small 

refiners with the maximum average 

standard taking effect in mid-2012 and 

the beginning of 2015, respectively, as 

well as the final benzene control step to 

meet the 0.62 vol% standard—the 

phase-in of which depends on the 

aggregate amount of credits 

generated.212

e. Price of Chemical Grade Benzene 

The price of chemical grade benzene 

is critical to the benzene control 

program because it defines the 

opportunity cost for benzene removed 

using benzene extraction and sold into 

the chemicals market. According to 

2004 World Benzene Analysis authored 

by Chemical Market Associates 

Incorporated (CMAI), during the 

consecutive five-year period ending 

with 2004, the price of benzene 

averaged 24 dollars per barrel higher 

than regular grade gasoline. During the 

three consecutive year period ending 

with 2004, the price of benzene 

averaged 28 dollars per barrel higher 

than regular grade gasoline. However, 

during the first part of 2004, the price 

of benzene relative to gasoline rose 

steeply, primarily because of high 

energy prices adding to the cost of 

extracting benzene. The 2004 benzene 

price averaged 78 dollars per barrel 

higher than regular grade gasoline. 

Since early 2006, CMAI has been 

projecting that the future price of 

benzene relative to gasoline will return 

to more historic levels, in the range of 

30 dollars per barrel higher than regular 

grade gasoline (in 2005, CMAI was 

projecting that the benzene price would 

be 20 dollars per barrel higher than 

gasoline). We have based our modeling 

for the final rule on the 30 dollar per 

barrel value. 

2. Summary of Costs 

a. Nationwide Costs of the Final 

Benzene Control Program 

We have used the refinery-by-refinery 

cost model to estimate the costs of the 

benzene control program being finalized 

today. In general, the cost model 

indicates that among the four primary 

reformate-based technologies, benzene 

precursor rerouting will be the most 

cost-effective. The next most costeffective technologies are isomerization 

of the rerouted light straight run 

material, revamped extraction units and 

new installations of large extraction 

units. The model indicates that benzene 

saturation and small installations of 

new extraction units will be the least 

cost-effective. 

Based on the results of our analysis 

using the refinery-by-refinery model, we 

estimate that when the benzene control 

program is fully phased in, 78 refineries 

of the total 104 gasoline-producing 

refineries in the U.S. (outside of 

California) will have to put in new 

capital equipment or change their 

refining operations to reduce the 

benzene levels in their gasoline. Of 

these refineries, we estimate that 17 will 

use benzene precursor removal, 28 

refineries will use benzene precursor 

removal coupled with isomerization, 16 

will use extraction, and 17 will use 

benzene saturation. We project that 52 

refineries will continue to produce 

gasoline with benzene levels greater 

than the average standard and will need 

to purchase credits to comply. Including 

the refineries with benzene levels 

currently below 0.62, we project that 

there will be a total of 50 refineries that 

will produce gasoline with benzene 

levels at 0.62 or lower and will generate 

credits for sale to other refineries. 

Finally, the model projects that 26 

refineries will take no steps to reduce 

their gasoline benzene levels, which 

includes those which remain above the 

average benzene standard as well as 

those already below the average 

standard. 

Based on the results of our cost 

analysis, we estimate that the final 

benzene control program will cost 0.27 

cents per gallon when it is fully phased 

in, assuming that capital investments 

are amortized at a 7 percent return on 

investment before taxes and expressed 

in 2003 dollars. Our cost analysis 

projects that the ABT program will 

result in a phase-in of the benzene 

control standard from mid-2007 to early 

in 2015. Starting in mid-2007 we believe 

that refiners will take the opportunity to 

achieve modest benzene reductions to 

generate early credits using simple 

operational changes. We project that 

these actions taken in mid-2007 will 

result in a reduction of the average U.S. 

gasoline benzene level from 0.99 to 0.81 

vol% at an average cost of 0.04 cents per 

gallon. 

To take full advantage of the 

flexibility provided to refiners by the 

ABT program to delay more expensive 

capital investments, refiners are 

expected to make additional early 

benzene reductions to generate more 

early credits, requiring modest 

investments in capital. Because of the 

time it takes to assess, design and install 

the capital equipment, we project that 

these additional early benzene 

reductions will not occur until the 

beginning of 2010, although in reality 

these investments and associated 

benzene reductions would likely occur 

before and after the beginning of 2010. 

These benzene reductions are expected 

to further reduce the average benzene 

level of U.S. gasoline to 0.74 vol% and 

cost 0.05 cents per gallon averaged over 

all U.S. gasoline. Refiners are expected 

to make $324 million of capital 

investments to achieve this benzene 

reduction. In 2011 when the 0.62 vol% 

benzene control standard takes effect, 

we do not anticipate any further 

reduction in benzene because we project 

that the refining industry will be able to 

comply using early credits. 

In mid-2012, when refineries with 

high benzene levels need to comply 

with the 1.3 vol% maximum average 

standard, we anticipate that U.S. 

gasoline benzene levels will decline 

further, to 0.73 vol% benzene, and cost 

an additional 0.04 cents per gallon 

averaged over all U.S. gasoline. Refiners 

are expected to make another $153 

million in capital investments. 

Although the early credit use period 

terminates at the end of 2013, refiners 

will again have flexibility in scheduling 

their most expensive capital 


pwalker on PROD1PC71 with RULES_2
8508 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

213The ABT analysis assumed that small refiners 

would comply with the 1.3 vol% maximum average 

standard in January 2015 at the same time as the 

0.62 vol% annual average standard. We are 

finalizing a later maximum average standard 

implementation date (July 2016), which will have 

very little effect on the overall program and 

therefore has not been incorporated into this 

analysis. 

investments by using standard credits 

(which will have been accruing since 

the start of 2011). Because we expect 

that refiners will first use their early 

credits, the standard credits will be 

banked and will start to be used in 2014 

to show compliance with the 0.62 vol% 

benzene standard. Our analysis suggests 

that the U.S. refining industry will be 

able to delay their highest capital 

investments until May 2015, when the 

standard credits accumulated since the 

beginning of 2011 run out. Small 

refiners must meet the 1.3 vol% 

maximum average standard which was 

assumed to occur at the beginning of 

2015 so they also will be reducing their 

gasoline benzene levels to that standard 

or below.213 Taken together, these 

reductions in 2015 will bring the U.S. 

gasoline pool down to the 0.62 vol% 

benzene standard at an average cost of 

0.14 cents per gallon averaged over all 

U.S. gasoline, based on the addition of 

$634 million in capital investments. 

To comply with the fully phased-in 

final benzene control program, refiners 

are expected to have made a total of 

$1110 million in capital investments. 

This will amount to an average of $14 

million in capital investment in each 

refinery that adds such equipment. 

We also estimated annual aggregate 

costs, including the amortized capital 

costs, associated with the new fuel 

standard. As shown in Table VIII.A–1, 

these costs are projected to begin at $28 

million in 2007 and increase to $363 

million in 2015 when the benzene 

program is fully phased in. These 

aggregated costs continue to increase 

over time as fuel demand increases. 

TABLE VIII.A–1.—PER-GALLON AND

ANNUAL AGGREGATE FUEL COSTS

FOR THE FINAL BENZENE CONTROL

PROGRAM

(7% ROI before taxes and 2003 dollars) 

Year 

Per-gallon 

cost 

(c/gal) 

Aggregate 

cost 

($million) 

2007 .................. 0.02 28 

2008 .................. 0.04 49 

2009 .................. 0.04 50 

2010 .................. 0.09 101 

2011 .................. 0.09 104 

2012 .................. 0.11 133 

2013 .................. 0.13 164 

2014 .................. 0.13 166 

2015 .................. 0.27 363 

2020 .................. 0.27 388 

2025 .................. 0.27 412 

2030 .................. 0.27 437 

2035 .................. 0.27 464 

Several observations can be made 

from these results of our nationwide 

cost analysis. First, significantly 

reducing gasoline benzene levels to low 

levels, coupled with the flexibility of an 

ABT program, will incur fairly modest 

aggregate program costs. This is 

primarily because we expect that 

refiners will optimize their benzene 

control strategies, resulting in large 

benzene reductions at a relatively low 

overall program cost. With higher 

benzene prices relative to those of 

gasoline projected to continue (even if 

they drop from the recent very high 

levels), extraction is expected to be a 

very low-cost technology—the primary 

reason why the cost of the overall 

program is very low. Also, precursor 

rerouting, either with or without 

isomerization in an existing unit, is a 

low-cost technology requiring little or 

no capital to realize. The model 

concludes that even the higher-cost 

benzene saturation technology will be 

fairly cost-effective overall because 

larger refineries that install this 

technology will take advantage of their 

economies of scale. 

b. Regional Costs 

The benzene reductions estimated by 

the cost model and associated costs vary 

significantly by region. Table VIII.A–2 

summarizes the estimated per-gallon 

costs for complying with the benzene 

control standard by PADD region. 

TABLE VIII.A–2.—PROJECTED BENZENE CONTROL COSTS BY PADD FOR THE FINAL BENZENE CONTROL PROGRAM

(2003 dollars, 7% ROI before taxes) 

PADD 

U.S. 

1 2 3 4 5 (w/o 

CA) 

Cost (c/gal) ....................................................................................................................... 0.14 0.35 0.15 0.55 1.21 0.268 

Table VIII.A–2 shows that the PADDaverage costs are highest in PADD 5 

followed next by PADD 4. In PADDs 1, 

2 and 3, where reformulated gasoline 

programs have already forced gasoline 

benzene levels lower, the benzene 

control costs are lower. Extraction is the 

technology most used in PADDs 1 and 

3, resulting in lower benzene control 

cost in these regions. Individual 

refineries show a wider range of control 

costs than the PADD-average costs. 

There are 20 refineries for which we 

estimate benzene control costs lower 

than 0.20 cents per gallon. Also, there 

are 11 refineries, all of which are very 

small refineries, with costs in the range 

of 3 to 7 cents per gallon range. 

c. Refining Industry Cost Study 

The American Petroleum Institute 

(API) conducted its own refinery 

modeling study to evaluate the cost of 

benzene control. The API study 

analyzed the cost of three different 

benzene control programs. Two of the 

benzene control programs analyzed by 

API were very different than our final 

benzene control program and we will 

not discuss them here (see Chapter 9 of 

the RIA). The third program analyzed by 

API was nearly identical to the final 

benzene control standard, and we have 

carefully compared API’s cost analysis 

to ours. 

API analyzed a benzene control 

program with a nationwide 0.60 vol% 

benzene standard and with an ABT 

program and with no upper benzene 

limit. API also assumed that credits will 

not be traded freely, but instead that 

refining companies would hold onto 10 

percent of their credits in case they have 

a future problem with their benzene 

control unit. Including the compliance 

margin and the 10 percent credit 

margin, the API study estimated that 

under its modeled benzene control 

program and associated assumptions 

that U.S. gasoline would average 0.56 

vol% benzene. The API study estimates 

the cost of complying with its modeled 

benzene control program to be 1.00 cent 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8509 

214This cost estimate includes an adjustment we 

made to convert the API capital cost amortization 

from the after-tax 10 percent rate of return that was 

the basis for the estimated costs in their report to 

a before-tax 7 percent rate of return, which is how 

our rules are estimated. 

per gallon.214 This estimated benzene 

control cost is substantially higher than 

our estimated 0.27 cents per gallon cost 

for our nearly identical program. After 

comparing their methodology to ours we 

identified three primary differences 

which explain the large difference in 

costs. 

The first difference is that API 

modeled a somewhat lower benzene 

control standard and assumed a credit 

generation margin which resulted in 

refiners achieving a much lower 

benzene level than the 0.62 vol% 

benzene control standard. A primary 

reason why the refining industry study 

modeled overcompliance with the 

benzene standard is due to an 

assumption that refiners will want to 

hold onto a substantial quantity of 

credits, yet the API cost study did not 

provide a justification for the 

accumulation of credits. EPA does not 

believe that refiners will significantly 

overcomply with the average benzene 

standard. This is because the 0.62 vol% 

benzene standard is an averaging 

standard which is met across the entire 

industry, not a cap standard, and can be 

met by the accumulation of gasoline 

batches with benzene levels higher or 

lower than the standard. Thus, if a 

refinery produced gasoline with lower 

or higher gasoline benzene levels over 

the first part of the year, the operations 

could be adjusted to balance out the 

gasoline benzene levels for the rest of 

the year. Also, our program includes 

several provisions which give refiners 

significant flexibility for compliance. 

For example, refiners could overcomply 

slightly with the standard early on in 

the program’s implementation and hold 

onto the credits for up to five years 

before they expire. If a refinery’s 

benzene control unit goes down, the 

refiner would be able to use those 

accumulated credits, the refiner could 

purchase credits from other refineries, 

or the refiner could create a benzene 

reduction deficit at that refinery and 

make it up the following year. With this 

degree of flexibility, any significant 

overcompliance with the 0.62 vol% 

average benzene standard is 

unnecessary. 

The second reason why the API costs 

are much higher than ours is because 

API used a more restrictive assumption 

with respect to benzene extraction—a 

more cost-effective benzene control 

technology than benzene saturation, as 

discussed above. API assumed that no 

new grassroots benzene extraction 

capacity will be installed in the future, 

but that existing extraction units could 

be expanded. We agree that existing 

units will likely be expanded. However, 

we also believe that several refineries 

will install new grassroots extraction 

units. Our premise is supported by 

CMAI projections of a robust benzene 

market in the future with benzene 

priced higher than its historical margin 

above gasoline. Higher benzene price 

margins will provide an incentive to 

refiners to add grassroots benzene 

extraction units, even in areas where 

benzene markets are smaller. For 

example, one refiner has indicated to us 

that if the proposed gasoline benzene 

standard was to be finalized, it would 

install a grassroots benzene extraction 

unit at one of its refineries in the 

Midwest, where the benzene market is 

small with less room for increased 

supply (although this benzene could be 

shipped down to the Gulf Coast). This 

is a strong indicator that new grassroots 

benzene extraction units will also be 

installed on the Gulf and East Coasts, 

where benzene markets are much larger 

with much more room to absorb 

increased supply. 

The third reason why the API benzene 

control costs are much higher than ours 

is their very high octane control costs. 

For both studies, the octane loss that 

occurs due to the modeled application 

of the various benzene control 

technologies is accounted for by 

assigning a dollar per octane-barrel cost 

to the octane loss. However, API’s costs 

for restoring octane are higher than the 

future octane recovery costs that we are 

projecting. The octane costs used by API 

are higher because API used the rack 

price differential between premium and 

regular grade gasolines as summarized 

by the Energy Information 

Administration. However, the rack price 

differential between premium and 

regular grade gasolines reflects a 

significant amount of profit. For 

example, the cost difference to produce 

premium gasoline is usually only a few 

cents per gallon more than for 

producing regular grade gasoline, yet 

refiners and marketers usually charge 20 

to 30 cents more per gallon for premium 

gasoline at retail. Some of this inflated 

price appears at the rack price 

differential between regular and 

premium grades of gasoline. In addition, 

future octane control costs, when the 

benzene control standard takes effect, 

are expected to be much lower due to 

the very large volume of ethanol that is 

expected to enter the gasoline market by 

then. 

Overall, we have carefully evaluated 

the differences between our cost 

analysis and that provided by API. 

Except for the differences described 

above, the assumptions used and the 

conclusions reached were very similar. 

We believe our revised analysis 

provides a more accurate assessment of 

the costs of the benzene control 

program. 

B. What Are the Vehicle Cost Impacts? 

In assessing the economic impact of 

setting cold temperature emission 

standards, we have made a best estimate 

of the necessary vehicle modifications 

and their associated costs. In making 

our estimates we have relied on our own 

technology assessment, which includes 

information supplied by individual 

manufacturers and our own in-house 

testing. Estimated costs typically 

include variable costs (for hardware and 

assembly time) and fixed costs (for 

research and development, retooling, 

and certification). All costs are 

presented in 2003 dollars. Full details of 

our cost analysis can be found in 

Chapter 8 of the RIA. 

As described in section V, we are not 

expecting hardware changes to Tier 2 

vehicles in response to new cold 

temperature standards. Tier 2 vehicles 

are already being equipped with very 

sophisticated emissions control systems. 

We expect manufacturers to use these 

systems to minimize emissions at cold 

temperatures. We were able to 

demonstrate significant emissions 

reductions from a Tier 2 vehicle through 

recalibration alone. In addition, the 

standard we are finalizing is based on 

averaging which allows some vehicles 

to be above the numeric standard as 

long as those excess emissions are offset 

by vehicles below the standard. 

Averaging will help manufacturers in 

cases where they are not able to achieve 

the numeric standard for a particular 

vehicle group, thus helping 

manufacturers avoid costly hardware 

changes. The phase-in of standards and 

emissions credits provisions also help 

manufacturers avoid situations where 

expensive vehicle modifications will be 

needed to meet the new cold 

temperature NMHC standard. Therefore, 

we are not projecting hardware costs or 

additional assembly costs associated 

with meeting new cold temperature 

NMHC emissions standards. 

Manufacturers will incur research and 

development (R&D) costs associated 

with a new cold temperature standard, 

and some likely will need to upgrade 

testing facilities to handle an increased 

number of cold tests during vehicle 

development. We have estimated the 

fixed costs associated with R&D and test 

facilities. We project that manufacturers 

will recover R&D costs over a five-year 


pwalker on PROD1PC71 with RULES_2
8510 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

215These costs numbers may not necessarily 

reflect actual price increases as manufacturer 

production costs, perceived product enhancements, 

and other market impacts will affect actual prices 

to consumers. 

period and their facilities costs over a 

ten-year period. Long-term impacts on 

engine costs are expected to decrease as 

manufacturers fully amortize their fixed 

costs. Because manufacturers recoup 

fixed costs over a large volume of 

vehicles, average per vehicle costs due 

to the new cold temperature NMHC 

standards are expected to be low. We 

project that the average incremental 

costs associated with the new cold 

temperature standards will be less than 

$1 per vehicle. 

We did not receive comments on the 

methodology we used to derive average 

cost estimates. However, we did receive 

comments from one manufacturer with 

a limited product line who believes new 

hardware will be needed on its vehicles 

to meet the new cold temperature 

standards. Other manufacturers did not 

comment that hardware changes would 

be needed, and they generally supported 

our lead-time, phase-in, and other 

transitional provisions as providing the 

flexibility needed to meet the standards. 

We continue to believe that 

manufacturers will be able to meet the 

standards through vehicle development 

without additional hardware. However, 

we conducted a sensitivity analysis in 

response to this comment, assuming the 

commenter would use new hardware to 

meet the cold temperature standard. If 

one percent of new vehicles required 

additional hardware costing $100–$200 

per vehicle, the average cost would 

increase from less than $1 to the range 

of $1.60–$2.60 per vehicle. The 

commenter did not provide cost 

information in their comments and we 

believe that the costs used in our 

sensitivity analysis are conservatively 

high, given the lead time provided for 

vehicle development and market 

pressures to keep costs in line with 

those of competitors. In any event, we 

believe the costs associated with the 

program are reasonable. Additional 

discussion of the comments received on 

the vehicle cold temperature standard is 

provided in Chapter 3 of the Summary 

and Analysis of Comments for this rule. 

We are not anticipating additional 

costs for the new evaporative emissions 

standard. As discussed in section V, we 

expect that manufacturers will continue 

to produce 50-state evaporative systems 

that meet LEV II standards. Therefore, 

harmonizing with California’s LEV–II 

evaporative emission standards will 

streamline certification and be an ‘‘antibacksliding’’ measure. It also codifies 

the approach manufacturers have 

already indicated they are taking for 50- 

state evaporative systems. 

We also estimated annual aggregate 

costs associated with the new cold 

temperature emissions standards. These 

costs are projected to increase with the 

phase-in of standards and peak in 2014 

at about $13.4 million per year, then 

decrease as the fixed costs are fully 

amortized. The projected aggregate costs 

are summarized below, with annual 

estimates provided in Chapter 8 of the 

RIA. 

TABLE VIII.B–1.—ANNUAL AGGREGATE COSTS

2010 2012 2014 2016 2018 2020 

$11,119,000 ......................................................................... $12,535,000 $13,406,000 $12,207,000 $10,682,000 $0 

C. What Are the PFC Cost Impacts? 

For PFCs, we have made a best 

estimate of the necessary technologies 

and their associated costs. Estimated 

costs include variable costs (for 

hardware and assembly time) and fixed 

costs (for research and development, 

retooling, and certification). The 

analysis also considers fuels savings 

associated with low emission PFCs. Cost 

estimates based on the projected 

technologies represent an expected 

change in the cost of PFCs as they begin 

to comply with new emission standards. 

All costs are presented in 2003 dollars. 

We did not receive comments on 

estimated costs for PFCs controls. Full 

details of our cost analysis, including 

fuel savings, can be found in Chapter 10 

of the RIA. 

Table VIII.C–1 summarizes the 

projected near-term and long-term per 

unit average costs to meet the new 

emission standards. Long-term impacts 

on PFCs are expected to decrease as 

manufacturers fully amortize their fixed 

costs. We project that manufacturers 

will generally recover their fixed costs 

over a five-year period, so these costs 

disappear from the analysis after the 

fifth year of production. These estimates 

are based on the manufacturing cost 

rather than predicted price increases.215

The table also shows our projections of 

average fuel savings over the life of the 

PFC when used with gasoline. Fuel 

savings can be estimated based on the 

VOC emissions reductions due to 

controls. 

TABLE VIII.C–1.—ESTIMATED AVERAGE PER UNIT PFC COSTS AND

LIFETIME FUEL SAVINGS

Cost 

Near-Term Costs .......................... $2.69 

Long-Term Costs .......................... 1.52 

Fuel Savings (NPV) ...................... 4.24 

With current and projected estimates 

of PFC sales, we translate these costs 

into projected direct costs to the nation 

for the new emission standards in any 

year. A summary of the annual aggregate 

costs to manufacturers is presented in 

Table VIII.C–2. The annual cost savings 

due to fuel savings start slowly, then 

increase as greater numbers of 

compliant PFCs enter the market. Table 

VIII.C–2 also presents a summary of the 

estimated annual fuel savings. Aggregate 

costs are projected to peak in 2013 at 

about $61 million and then drop to 

about $34 million once fixed costs are 

recovered. The change in numbers 

beyond 2015 occurs due to projected 

growth in sales and population. 

TABLE VIII.C–2.—TOTAL ANNUALIZED COSTS AND FUEL SAVINGS

2009 2013 2015 2020 

Costs ................................................................................................................ $58,070,000 $60,559,000 $34,004,000 $37,543,000 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8511 

216The proposed standards do not apply to 

nonroad engines, since section 202(l) authorizes 

controls only for ‘‘motor vehicles,’’ which term does 

not include nonroad vehicles (CAA section 216(2)). 

However, we are reducing benzene in all gasoline, 

including that used in nonroad equipment. 

Therefore, we are including both the costs and the 

benzene emissions reductions associated with the 

fuel used in nonroad equipment. 

217Again, although gasoline PM is not a mobile 

source air toxic, the rule will result in emission 

reductions of gasoline PM, which reductions are 

accounted for in our analysis. 

218We note that in determining whether the new 

vehicle controls represent the greatest emissions 

reductions achievable considering costs, we have 

considered the new cold-start standards separately 

from any other new control program. Similarly, in 

considering whether the new controls for PFCs 

represent the best available control considering 

economic feasibility, we considered the PFC 

standards separately from any other new control 

program. 

TABLE VIII.C–2.—TOTAL ANNUALIZED COSTS AND FUEL SAVINGS—Continued 

2009 2013 2015 2020 

Fuel Savings .................................................................................................... 15,347,000 83,506,000 102,523,000 109,589,000 

D. Cost per Ton of Emissions Reduced 

We have calculated the cost per ton of 

HC, benzene, total MSATs, and PM 

emissions reductions associated with 

the fuel, vehicle, and PFC programs 

using the costs described above and the 

emissions reductions described in 

section IV. More detail on the costs, 

emissions reductions, and cost per ton 

estimates can be found in the RIA. We 

have calculated the costs per ton using 

the net present value of the annualized 

costs of the program, including PFC 

gasoline fuel savings, from 2009 through 

2030 and the net present value of the 

annual emission reductions through 

2030. We have also calculated the cost 

per ton of emissions reduced in the year 

2030 using the annual costs and 

emissions reductions in that year alone. 

This number represents the long-term 

cost per ton of emissions reduced. For 

fuels, the cost per ton estimates include 

costs and emission reductions that will 

occur from all motor vehicles and 

nonroad engines fueled with 

gasoline.216

For vehicles and PFCs, we are 

establishing NMHC and HC standards, 

respectively, which will also reduce 

benzene and other VOC-based toxics. 

For vehicles, we are also expecting 

direct PM reductions due to the NMHC 

standard.217 Section IV above provides 

an overview of how we are estimating 

benzene and PM reductions resulting 

from the NMHC standards for vehicles 

and benzene reductions resulting from 

the HC standard for PFCs. We have not 

attempted to apportion costs across 

these various pollutants for purposes of 

the cost per ton calculations since there 

is no distinction in the technologies, or 

associated costs, used to control the 

pollutants. Instead, we have calculated 

costs per ton by assigning all costs to 

each individual pollutant. If we 

apportioned costs among the pollutants, 

the costs per ton presented here would 

be proportionally lowered depending on 

what portion of costs were assigned to 

the various pollutants. 

The results for HC for vehicles and 

PFCs are provided in Table VIII.D–1 

using both a three percent and a seven 

percent social discount rate. Again, this 

analysis assumes that all costs are 

assigned to HC control. The discounted 

cost per ton of HC reduced for the final 

rule as a whole would be $0 because the 

gasoline fuel savings from PFCs offsets 

the costs of PFC and vehicle controls. 

The table presents these as $0 per ton, 

rather than calculating a negative value 

that has no clear meaning. For vehicles 

in 2030, the cost per ton is $0 because 

by 2030 all fixed costs have been 

recovered and there are no variable 

costs estimated for the new vehicle 

program.218

The cost per ton estimates for each 

individual program are presented 

separately in the tables below, and are 

part of the justification for each of the 

programs. For informational purposes, 

we also present the cost per ton for the 

three programs combined. 

TABLE VIII.D–1.—HC AGGREGATE COST PER TON AND LONG-TERM ANNUAL COST PER TON

[$2003] 

Discounted 

lifetime cost 

per ton at 3% 

Discounted 

lifetime cost 

per ton at 7% 

Long-Term 

cost per ton in 

2030 

Vehicles ....................................................................................................................................... $14 $18 $0 

PFCs (without fuel savings) ......................................................................................................... 240 270 190 

PFCs (with fuel savings) .............................................................................................................. 0 0 0 

Combined (with fuel savings) ...................................................................................................... 0 0 0 

The cost per ton of benzene 

reductions for fuels, vehicles, and PFCs 

are shown in Table VIII.D–2 using the 

same methodology as noted above for 

HC. The results are calculated by 

assigning all costs to benzene control. 

TABLE VIII.D–2.—BENZENE AGGREGATE COST PER TON AND LONG-TERM ANNUAL COST PER TON

[$2003] 

Discounted 

lifetime cost 

per ton at 3% 

Discounted 

lifetime cost 

per ton at 7% 

Long-term cost 

per ton in 

2030 

Fuels ............................................................................................................................................ $22,400 $23,100 $22,500 

Vehicles ....................................................................................................................................... 270 360 0 

PFCs (without fuels savings) ....................................................................................................... 74,500 82,900 56,200 

PFCs (with fuel savings) .............................................................................................................. 0 0 0 


pwalker on PROD1PC71 with RULES_2
8512 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

219 Due to time and resource constraints, EPA 

scaled the final CAND benefits estimates from the 

benefits estimated for the CAND proposal. The 

scaling approach used in that analysis, and applied 

here, is described in the RIA for the final CAND 

rule. 

TABLE VIII.D–2.—BENZENE AGGREGATE COST PER TON AND LONG-TERM ANNUAL COST PER TON—Continued 

[$2003] 

Discounted 

lifetime cost 

per ton at 3% 

Discounted 

lifetime cost 

per ton at 7% 

Long-term cost 

per ton in 

2030 

Combined (with fuel savings) ...................................................................................................... 8,200 8,600 5,900 

The cost per ton of reductions of all 

MSAT reductions for fuels, vehicles, 

and PFCs are shown in Table VIII.D–3 

using the same methodology as noted 

above for HC and benzene. The results 

are calculated by assigning all costs to 

MSAT control. 

TABLE VIII.D–3.—MSAT AGGREGATE COST PER TON AND LONG-TERM ANNUAL COST PER TON

[$2003] 

Discounted 

lifetime cost 

per ton at 3% 

Discounted 

lifetime cost 

per ton at 7% 

Long-term cost 

per ton in 

2030 

Fuels ............................................................................................................................................ $22,400 $23,100 $22,500 

Vehicles ....................................................................................................................................... 42 54 0 

PFCs (without fuel savings) ......................................................................................................... 2,800 3,100 2,200 

PFCs (with fuel savings) .............................................................................................................. 0 0 0 

Combined (with fuel savings) ...................................................................................................... 1,700 1,800 1,100 

We have also calculated a cost per ton 

for direct PM reductions for vehicles. 

Again, this analysis assigns all related 

costs to direct PM reductions. 

TABLE VIII.D–4.—DIRECT PM AGGREGATE COST PER TON AND LONG-TERM ANNUAL COST PER TON

[$2003] 

Discounted 

lifetime cost 

per ton at 3% 

Discounted 

lifetime cost 

per ton at 7% 

Long-term cost 

per ton in 

2030 

Vehicles ....................................................................................................................................... $650 $870 $0 

E. Benefits 

This section presents our analysis of 

the health and environmental benefits 

that will occur as a result of the final 

standards throughout the period from 

initial implementation through 2030. In 

terms of emission benefits, we expect to 

see significant reductions in mobile 

source air toxics (MSATs) from the 

vehicle, fuel and PFC standards; 

reductions in VOCs (an ozone and PM2.5

precursor) from the cold temperature 

vehicle and PFC standards; and 

reductions in direct PM2.5 from the cold 

temperature vehicle standards. When 

translating emission benefits to health 

effects and monetized values, however, 

we quantify only the PM-related 

benefits associated with the cold 

temperature vehicle standards. 

The reductions in PM2.5 from the cold 

temperature vehicle standards will 

result in significant reductions in 

premature deaths and other serious 

human health effects, as well as other 

important public health and welfare 

effects. We estimate that in 2030, the 

benefits we are able to monetize will be 

approximately $6.3 billion using a 3 

percent discount rate and $5.7 billion 

using a 7 percent discount rate. Total 

social costs of the entire rule for the 

same year (2030) are $400 million. 

Details on the costs of the final 

standards are in section VIII.F. These 

estimates, and all monetized benefits 

presented in this section, are in year 

2003 dollars. 

The PM2.5 benefits are scaled based on 

relative changes in direct PM2.5

emissions between this rule and the 

proposed Clean Air Nonroad Diesel 

(CAND) rule.219 As explained in Section 

12.2.1 of the RIA for this rule, the PM2.5

benefits scaling approach is limited to 

those studies, health impacts, and 

assumptions that were used in the 

proposed CAND analysis. As a result, 

PM-related premature mortality is based 

on the updated analysis of the American 

Cancer Society cohort (ACS; Pope et al., 

2002). However, it is important to note 

that since the CAND rule, EPA’s Office 

of Air and Radiation (OAR) has adopted 

a different format for its benefits 

analyses in which characterization of 

the uncertainty in the concentrationresponse function is integrated into the 

main benefits analysis. This new 

approach follows the recommendation 

of NRC’s 2002 report ‘‘Estimating the 

Public Health Benefits of Proposed Air 

Pollution Regulations’’ to begin moving 

the assessment of uncertainties from its 

ancillary analyses into its main benefits 

presentation through the conduct of 

probabilistic analyses. Within this 

context, additional data sources are 

available, including a recent expert 

elicitation and updated analysis of the 

Six-Cities Study cohort (Laden et al., 

2006). Please see the PM NAAQS RIA 

for an indication of the sensitivity of our 

results to use of alternative 

concentration-response functions. 

We also demonstrate that the final 

standards will reduce cancer and 

noncancer risk from reduced exposure 

to MSATs (as described in Section IV of 

this preamble). However, we do not 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8513 

220Science Advisory Board. 2001. NATA—

Evaluating the National-Scale Air Toxics 

Assessment for 1996—an SAB Advisory. http:// 

www.epa.gov/ttn/atw/sab/sabrev.html. 

221The analytic blueprint for the Section 812 

benzene case study can be found at http:// 

www.epa.gov/air/sect812/appendixi51203.pdf. 

translate this risk reduction into 

benefits. We also do not quantify the 

benefits related to ambient reductions in 

ozone and PM2.5 due to the VOC 

emission reductions associated with the 

final standards. The following section 

describes in more detail why these 

benefits are not quantified. 

1. Unquantified Health and 

Environmental Benefits 

This benefit analysis estimates 

improvements in health and human 

welfare that are expected as a result of 

the final standards, and monetizes those 

benefits. The benefits will come from 

reductions in emissions of air toxics 

(including benzene, 1,3-butadiene, 

formaldehyde, acetaldehyde, acrolein, 

naphthalene, and other air toxic 

pollutants discussed in section III), 

ambient ozone (as a result of VOC 

controls), and direct PM2.5 emissions. 

While there will be benefits 

associated with air toxic pollutant 

reductions, notably with regard to 

reductions in exposure and risk (see 

section IV), we do not attempt to 

monetize those benefits. This is 

primarily because available tools and 

methods to assess air toxics risk from 

mobile sources at the national scale are 

not adequate for extrapolation to 

incidence estimations or benefits 

assessment. The best suite of tools and 

methods currently available for 

assessment at the national scale are 

those used in the National-Scale Air 

Toxics Assessment (NATA; these tools 

are discussed in Chapter 3 of the RIA). 

The EPA Science Advisory Board 

specifically commented in their review 

of the 1996 NATA that these tools were 

not yet ready for use in a national-scale 

benefits analysis, because they did not 

consider the full distribution of 

exposure and risk, or address subchronic health effects.220 While EPA has 

since improved the tools, there remain 

critical limitations for estimating 

incidence and assessing benefits of 

reducing mobile source air toxics. We 

continue to work to address these 

limitations, and we are exploring the 

feasibility of a quantitative benefits 

assessment for air toxics through a 

benzene case study as part of the revised 

study of ‘‘The Benefits and Costs of the 

Clean Air Act’’ (also known as the 

‘‘Section 812’’ report).221 In this case 

study, we are attempting to monetize 

the benefits of reduced cancer 

incidence, specifically leukemia, and 

are not addressing other cancer or 

noncancer endpoints. 

We also do not estimate the 

monetized benefits of VOC controls in 

this benefits analysis. Though VOCs 

will be demonstrably reduced as a result 

of the cold temperature vehicle 

standards, we assume that these 

emissions will not have a measurable 

impact on ozone formation since the 

standards will reduce VOC emissions at 

cold ambient temperatures and ozone 

formation is primarily a warm ambient 

temperature issue. The PFC controls 

will likely result in ozone benefits, 

though we do not attempt to monetize 

those benefits. This is primarily due to 

the magnitude of, and uncertainty 

associated with, the estimated changes 

in ambient ozone associated with the 

final standards. In Section IV.C., we 

discuss that the ozone modeling 

conducted for the final PFC standards 

results in a net reduction in ambient 

ozone concentrations within the 

modeled domain (37 Eastern states and 

the District of Columbia). The net 

improvement is very small, however, 

and will likely lead to negligible 

monetized benefits. Instead, we 

acknowledge that this analysis may 

underestimate the benefits associated 

with reductions in ozone precursor 

emissions achieved by the various 

standards. We discuss these benefits 

qualitatively within the RIA. 

The VOC reductions resulting from 

the cold temperature vehicle standards 

and PFC standards will also likely 

reduce secondary PM2.5 formation. 

However, we did not quantify the 

impacts of these reductions on ambient 

PM2.5 or estimate any resulting benefits. 

As described further below, we 

estimated PM benefits by scaling from a 

previous analysis, and this analysis did 

not examine the relationship between 

VOC reductions and ambient PM. As a 

result, we did not quantify PM benefits 

associated with this rule’s VOC 

reductions, and we acknowledge that 

this analysis may therefore 

underestimate benefits. 

Table VIII.E–1 lists each of the MSAT 

and ozone health and welfare effects 

that remain unquantified because of 

current limitations in the methods or 

available data. This table also includes 

the PM-related health and welfare 

effects that also remain unquantified 

due to current method and data 

limitations. Chapter 12 of the RIA for 

the final standards provides a 

qualitative description of the health and 

welfare effects not quantified in this 

analysis. 

TABLE VIII.E–1.—UNQUANTIFIED AND

NON-MONETIZED EFFECTS

Pollutant/effects Effects not included in primary estimates—changes in: 

Ozone Health a Premature mortality: shortterm exposures b. 

Hospital admissions: respiratory. 

Emergency room visits for 

asthma. 

Minor restricted-activity days. 

School loss days. 

Asthma attacks. 

Cardiovascular emergency 

room visits. 

Acute respiratory symptoms. 

Chronic respiratory damage. 

Premature aging of the 

lungs. 

Non-asthma respiratory 

emergency room visits. 

Exposure to UVb (+/-) e. 

Ozone Welfare Decreased outdoor worker 

productivity. 

Agricultural yields for 

—commercial forests. 

—some fruits and vegetables. 

—non-commercial crops. 

Damage to urban ornamental plants. 

Impacts on recreational demand from damaged forest aesthetics. 

Ecosystem functions. 

Exposure to UVb (+/-) e. 

PM Health c .... Premature mortality—shortterm exposures d. 

Low birth weight. 

Pulmonary function. 

Chronic respiratory diseases 

other than chronic bronchitis. 

Non-asthma respiratory 

emergency room visits. 

Exposure to UVb (+/-) e. 

PM Welfare .... Visibility in many Class I 

areas. 

Residential and recreational 

visibility in non-Class I 

areas. 

Soiling and materials damage. 

Damage to ecosystem functions. 

Exposure to UVb (+/-) e. 

MSAT Health f Cancer (benzene, 1,3-butadiene, formaldehyde, acetaldehyde, naphthalene). 

Anemia (benzene). 

Disruption of production of 

blood components (benzene). 

Reduction in the number of 

blood platelets (benzene). 

Excessive bone marrow formation (benzene). 

Depression of lymphocyte 

counts (benzene). 

Reproductive and developmental effects (1,3-butadiene). 


pwalker on PROD1PC71 with RULES_2
8514 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

222See 68 FR 28327, May 23, 2003. 

223Note that while the final regulations also 

control VOCs, which contribute to PM formation, 

the benefits transfer scaling approach only scales 

benefits based on NOX, SO2, and direct PM 

emission reductions. PM benefits will likely be 

underestimated as a result, though we are unable 

to estimate the magnitude of the underestimation. 

224See: Clean Air Nonroad Diesel final rule (69 

FR 38958, June 29, 2004); Nonroad Large SparkIgnition Engines and Recreational Engines 

standards (67 FR 68241, November 8, 2002); Final 

Industrial Boilers and Process Heaters NESHAP (69 

FR 55217, September 13, 2004); Final Reciprocating 

Internal Combustion Engines NESHAP (69 FR 

33473, June 15, 2004); Final Clean Air Visibility 

Rule (EPA–452/R–05–004, June 15, 2005); Ozone 

Implementation Rule (documentation forthcoming). 

225Pope, C.A., III, R.T. Burnett, M.J. Thun, E.E. 

Calle, D. Krewski, K. Ito, and G.D. Thurston. 2002. 

‘‘Lung Cancer, Cardiopulmonary Mortality, and 

Long-term Exposure to Fine Particulate Air 

Pollution.’’ Journal of American Medical 

Association 287:1132–1141. 

226Woodruff, T.J., J. Grillo, and K.C. Schoendorf. 

1997. ‘‘The Relationship Between Selected Causes 

of Postneonatal Infant Mortality and Particulate 

Infant Mortality and Particulate Air Pollution in the 

United States.’’ Environmental Health Perspectives 

105(6):608–612. 

TABLE VIII.E–1.—UNQUANTIFIED AND

NON-MONETIZED EFFECTS—Continued 

Pollutant/effects Effects not included in primary estimates—changes in: 

Irritation of eyes and mucus 

membranes (formaldehyde). 

Respiratory irritation (formaldehyde). 

Asthma attacks in 

asthmatics (formaldehyde). 

Asthma-like symptoms in 

non-asthmatics (formaldehyde). 

Irritation of the eyes, skin, 

and respiratory tract (acetaldehyde). 

Upper respiratory tract irritation and congestion (acrolein). 

Neurotoxicity (n-hexane, toluene, xylenes). 

MSAT Welfare f

.

Direct toxic effects to animals. 

Bioaccumulation in the food 

chain. 

Damage to ecosystem function. 

Odor. 

a In addition to primary economic endpoints, 

there are a number of biological responses 

that have been associated with ozone health 

effects including increased airway responsiveness to stimuli, inflammation in the lung, acute 

inflammation and respiratory cell damage, and 

increased susceptibility to respiratory infection. b Recent analyses provide evidence that 

short-term ozone exposure is associated with 

increased premature mortality. As a result, 

EPA is considering how to incorporate ozone 

mortality benefits into its benefits analyses as 

a separate estimate of the number of premature deaths that would be avoided due to 

reductions in ozone levels. 

c In addition to primary economic endpoints, 

there are a number of biological responses 

that have been associated with PM health effects including morphological changes and altered host defense mechanisms. The public 

health impact of these biological responses 

may be partly represented by our quantified 

endpoints. dWhile some of the effects of short-term exposures are likely to be captured in the estimates, there may be premature mortality due 

to short-term exposure to PM not captured in 

the cohort study upon which the primary analysis is based. However, the PM mortality results derived from the expert elicitation do take 

into account premature mortality effects of 

short-term exposures. e May result in benefits or disbenefits. 

fThe categorization of unquantified toxic 

health and welfare effects is not exhaustive. 

2. Quantified Human Health and 

Environmental Effects of the Final Cold 

Temperature Vehicle Standard 

In this section we discuss the benefits 

of the final cold temperature vehicle 

standard related to reductions in 

directly emitted PM2.5. To estimate 

PM2.5 benefits, we rely on a benefits 

transfer technique. The benefits transfer 

approach uses as its foundation the 

relationship between emission 

reductions and ambient PM2.5

concentrations modeled across the 

contiguous 48 states (and DC) for the 

Clean Air Nonroad Diesel (CAND) 

proposal.222 For a given future year, we 

first calculate the ratio between CAND 

direct PM2.5 emission reductions and 

direct PM2.5 emission reductions 

associated with the final cold 

temperature vehicle control standard 

(cold temperature vehicle emission 

reductions/CAND emission reductions). 

We multiply this ratio by the percent 

that direct PM2.5 contributes towards 

population-weighted reductions in total 

PM2.5 due to the CAND standards. This 

calculation results in a ‘‘benefits 

apportionment factor’’ for the 

relationship between direct PM 

emissions and primary PM2.5, which is 

then applied to the BenMAP-based 

incidence and monetized benefits from 

the CAND proposal. In this way, we 

apportion the results of the proposed 

CAND analysis to its underlying direct 

PM emission reductions and scale the 

apportioned benefits to reflect 

differences in emission reductions 

between the two rules.223 This benefits 

transfer method is consistent with the 

approach used in other recent mobile 

and stationary source rules.224

Table VIII.E–2 presents the estimates 

of reduced incidence of PM2.5-related 

health effects for the years 2020 and 

2030 for the final cold temperature 

vehicle control strategies. In 2030, we 

estimate that PM2.5-related annual 

benefits will result in approximately 

880 fewer premature fatalities, 600 

fewer cases of chronic bronchitis, 1,600 

fewer non-fatal heart attacks, and 900 

fewer hospitalizations (for respiratory 

and cardiovascular disease combined). 

In addition, we estimate that the 

emission controls will reduce days of 

restricted activity due to respiratory 

illness by about 600,000 days and 

reduce work-loss days by about 100,000 

days. We also estimate substantial 

health improvements for children from 

reduced upper and lower respiratory 

illness, acute bronchitis, and asthma 

attacks. 

It is important to note that since the 

CAND rule, EPA’s Office of Air and 

Radiation (OAR) has adopted a different 

format for its benefits analysis in which 

characterization of the uncertainty in 

the concentration-response function is 

integrated into the main benefits 

analysis. Within this context, additional 

data sources are available, including a 

recent PM-related premature mortality 

expert elicitation and updated analysis 

of the Six-Cities Study cohort (Laden et 

al., 2006). Please see the PM NAAQS 

RIA for an indication of the sensitivity 

of our results to use of alternative 

concentration-response functions. 

TABLE VIII.E–2.—ESTIMATED ANNUAL REDUCTIONS IN INCIDENCE OF HEALTH EFFECTS RELATED TO THE FINAL COLD

TEMPERATURE VEHICLE STANDARD A

Health effect 

2020 Annual incidence reduction 2030 Annual incidence reduction 

PM-Related Endpoints: 

Premature Mortality b Adult, age 30+ and Infant, age <1 year ................................................................................ 480 880 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8515 

TABLE VIII.E–2.—ESTIMATED ANNUAL REDUCTIONS IN INCIDENCE OF HEALTH EFFECTS RELATED TO THE FINAL COLD

TEMPERATURE VEHICLE STANDARD A—Continued 

Health effect 

2020 Annual incidence reduction 2030 Annual incidence reduction 

Chronic bronchitis (adult, age 26 and over) ............................................................................................................. 330 570 

Non-fatal myocardial infarction (adult, age 18 and over) ......................................................................................... 810 1,600 

Hospital admissions—respiratory (all ages) c ........................................................................................................... 260 530 

Hospital admissions—cardiovascular (adults, age >18) d ........................................................................................ 210 390 

Emergency room visits for asthma (age 18 years and younger) ............................................................................ 350 610 

Acute bronchitis, (children, age 8–12) ..................................................................................................................... 780 1,400 

Lower respiratory symptoms (children, age 7–14) ................................................................................................... 9,300 16,000 

Upper respiratory symptoms (asthmatic children, age 9–18) .................................................................................. 7,000 12,000 

Asthma exacerbation (asthmatic children, age 6–18) .............................................................................................. 12,000 20,000 

Work loss days ......................................................................................................................................................... 62,000 100,000 

Minor restricted activity days (adults age 18–65) .................................................................................................... 370,000 600,000 

a Incidence is rounded to two significant digits. Estimates represent benefits from the final rule nationwide, excluding Alaska and Hawaii. bPM-related adult mortality based upon the ACS cohort study (Pope et al., 2002).225 PM-related infant mortality based upon studies by Woodruff, Grillo, and Schoendorf, 1997.226 Due to analytical constraints associated with the PM benefits scaling approach, we are unable to present 

the premature mortality impacts associated with the recent Six-Cities study (Laden et al., 2006) or the impacts associated with the recent PM-related premature mortality expert elicitation (IEc, 2006). Chapter 12.6 of the RIA discusses the implications these new studies have on the benefits estimated for the final rule. c Respiratory hospital admissions for PM include admissions for chronic obstructive pulmonary disease (COPD), pneumonia and asthma. d Cardiovascular hospital admissions for PM include total cardiovascular and subcategories for ischemic heart disease, dysrhythmias, and 

heart failure. 

PM2.5 also has numerous documented 

effects on environmental quality that 

affect human welfare. These welfare 

effects include direct damages to 

property, either through impacts on 

material structures or by soiling of 

surfaces, and indirect economic 

damages through the loss in value of 

recreational visibility or the existence 

value of important resources. Additional 

information about these welfare effects 

can be found in Chapter 12 of the 

Regulatory Impact Analysis. 

3. Monetized Benefits 

Table VIII.E–3 presents the estimated 

monetary value of reductions in the 

incidence of those health effects we are 

able to monetize for the final cold 

temperature vehicle standard. Total 

annual PM-related health benefits are 

estimated to be approximately $6.3 or 

$5.7 billion in 2030 (3 percent and 7 

percent discount rate, respectively). 

These estimates account for growth in 

real gross domestic product (GDP) per 

capita between the present and 2030. 

Table VIII.E–3 indicates with a ‘‘B’’

those additional health and 

environmental benefits of the rule that 

we are unable to quantify or monetize. 

These effects are additive to the estimate 

of total benefits, and are related to the 

following sources: 

• There are many human health and 

welfare effects associated with PM, 

ozone, and toxic air pollutant 

reductions that remain unquantified 

because of current limitations in the 

methods or available data. A listing of 

the benefit categories that could not be 

quantified or monetized in our benefit 

estimates are provided in Table VIII.E–

1. 

• The PM2.5 benefits scaled transfer 

approach, derived from the Clean Air 

Nonroad Diesel rule, does not account 

for VOCs as precursors to ambient PM2.5

formation. To the extent that VOC 

emission reductions associated with the 

final regulations contribute to 

reductions in ambient PM2.5, this 

analysis does not capture the related 

health and environmental benefits of 

those changes. 

• The PM air quality model only 

captures the benefits of air quality 

improvements in the 48 states and DC; 

PM benefits for Alaska and Hawaii are 

not reflected in the estimate of benefits. 

TABLE VIII.E–3.—ESTIMATED ANNUAL MONETARY VALUE OF REDUCTIONS IN INCIDENCE OF HEALTH AND WELFARE

EFFECTS RELATED TO THE FINAL COLD TEMPERATURE VEHICLE STANDARD

(Millions of 2003$) a,b

Health effect Pollutant 

2020 estimated value of 

reductions 

2030 estimated value of 

reductions 

PM-Related Premature mortality c,d Adult, 30+ years and Infant, <1 year: 

3 percent discount rate ....................................................................... PM2.5 ................................................ $3,100 $5,800 

7 percent discount rate ....................................................................... .......................................................... 2,800 5,200 

Chronic bronchitis (adults, 26 and over) ................................................... PM2.5 ................................................ 150 260 

Non-fatal acute myocardial infarctions: 

3 percent discount rate ....................................................................... .......................................................... 79 150 

7 percent discount rate ....................................................................... PM2.5 ................................................ 76 140 

Hospital admissions for respiratory causes ............................................... PM2.5 ................................................ 4.7 10 

Hospital admissions for cardiovascular causes ........................................ PM2.5 ................................................ 5.0 9.1 

Emergency room visits for asthma ............................................................ PM2.5 ................................................ 0.11 0.20 

Acute bronchitis (children, age 8–12) ........................................................ PM2.5 ................................................ 0.32 0.56 

Lower respiratory symptoms (children, age 7–14) .................................... PM2.5 ................................................ 0.16 0.29 

Upper respiratory symptoms (asthma, age 9–11) ..................................... PM2.5 ................................................ 0.20 0.35 

Asthma exacerbations ............................................................................... PM2.5 ................................................ 0.56 1.0 


pwalker on PROD1PC71 with RULES_2
8516 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

227U.S. Environmental Protection Agency, 2000, 

Guidelines for Preparing Economic Analyses. 

http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/ 

Guidelines.html. 

228Office of Management and Budget, The 

Executive Office of the President, 2003. Circular A–

4. http://www.whitehouse.gov/omb/circlars. 

229The scaling approach relies on the incidence 

and valuation estimates derived from the studies 

available at the time of the CAND analysis. 

Incidence estimates and monetized benefits derived 

from new information, including mortality derived 

from the full expert elicitation, are not available for 

scaling. Please refer to section 2 of this preamble 

and Chapter 12 of the RIA for more information 

about the benefits scaling approach. 

TABLE VIII.E–3.—ESTIMATED ANNUAL MONETARY VALUE OF REDUCTIONS IN INCIDENCE OF HEALTH AND WELFARE

EFFECTS RELATED TO THE FINAL COLD TEMPERATURE VEHICLE STANDARD—Continued 

(Millions of 2003$) a,b

Health effect Pollutant 

2020 estimated value of 

reductions 

2030 estimated value of 

reductions 

Work loss days .......................................................................................... PM2.5 ................................................ 9.1 14 

Minor restricted activity days (MRADs) ..................................................... PM2.5 ................................................ 21 35 

Monetized Totale

Base estimate: 

3 percent discount rate ....................................................................... PM2.5 ................................................ 3,300+ B 6,300+ B 

7 percent discount rate ....................................................................... .......................................................... 3,000+ B 5,700+ B 

a Dollars are rounded to two significant digits. The PM estimates represent benefits from the final rule across the contiguous United States. b Monetary benefits adjusted to account for growth in real GDP per capita between 1990 and the analysis year (2020 or 2030). 

cValuation of premature mortality based on long-term PM exposure assumes discounting over the SAB recommended 20-year segmented lag 

structure described in the Regulatory Impact Analysis for the Final Clean Air Interstate Rule (March 2005). Results show 3 percent and 7 percent 

discount rates consistent with EPA and OMB guidelines for preparing economic analyses (US EPA, 2000 and OMB, 2003).227,228

dAdult mortality based upon the ACS cohort study (Pope et al., 2002). Infant mortality based upon studies by Woodruff, Grillo, and 

Schoendorf, 1997. Due to analytical constraints associated with the PM benefits scaling approach, we are unable to present the premature mortality impacts associated with the recent Six-Cities study (Laden et al., 2006) study or the impacts associated with the recent PM-related premature mortality expert elicitation (IEc, 2006). Chapter 12.6 of the RIA discusses the implications these new studies have on the benefits estimated for the final rule. eB represents the monetary value of health and welfare benefits not monetized. A detailed listing is provided in Table VIII.E–1. 

4. What Are the Significant Limitations 

of the Benefit Analysis? 

The most significant limitation of this 

analysis is our inability to quantify a 

number of potentially significant benefit 

categories associated with 

improvements in air quality that would 

result from the final standards. Most 

notably, we are unable to estimate the 

benefits from reduced air toxics 

exposures because the available tools 

and methods to assess mobile source air 

toxics risk at the national scale are not 

adequate for extrapolation to incidence 

estimations or benefits assessment. We 

also do not quantify ozone benefits 

associated with the final PFC standards, 

despite the fact that there are net 

benefits, when population-weighted, in 

the ozone design value metric across the 

modeled domain (see section IV.C). We 

do not quantify these benefits because of 

their magnitude and the uncertainty 

associated with them. 

More generally, every benefit-cost 

analysis examining the potential effects 

of a change in environmental protection 

requirements is limited to some extent 

by data gaps, limitations in model 

capabilities (such as geographic 

coverage), and uncertainties in the 

underlying scientific and economic 

studies used to configure the benefit and 

cost models. Deficiencies in the 

scientific literature often result in the 

inability to estimate quantitative 

changes in health and environmental 

effects. Deficiencies in the economics 

literature often result in the inability to 

assign economic values even to those 

health and environmental outcomes 

which can be quantified. These general 

uncertainties in the underlying 

scientific and economics literature, 

which can cause the valuations to be 

higher or lower, are discussed in detail 

in the RIA and its supporting references. 

Key uncertainties that have a bearing on 

the results of the benefit-cost analysis of 

the final standards include the 

following: 

• The exclusion of potentially 

significant and unquantified benefit 

categories (such as health, odor, and 

ecological benefits of reduction in air 

toxics, ozone, and PM); 

• Errors in measurement and 

projection for variables such as 

population growth; 

• Uncertainties in the estimation of 

future year emissions inventories and 

air quality; 

• Uncertainties associated with the 

scaling of the PM results of the modeled 

benefits analysis to the final standards, 

especially regarding the assumption of 

similarity in geographic distribution 

between emissions and human 

populations and years of analysis; 

• Uncertainty in the estimated 

relationships of health and welfare 

effects to changes in pollutant 

concentrations including the shape of 

the C–R function, the size of the effect 

estimates, and the relative toxicity of the 

many components of the PM mixture; 

• Uncertainties in exposure 

estimation; and 

• Uncertainties associated with the 

effect of potential future actions to limit 

emissions. 

As Table VIII.E–3 indicates, total 

benefits are driven primarily by the 

reduction in premature fatalities each 

year. Elaborating on the list of 

uncertainties above, some key 

assumptions underlying the primary 

estimate for the premature mortality 

category include the following: 

1. Inhalation of fine particles is 

causally associated with premature 

death at concentrations near those 

experienced by most Americans on a 

daily basis. Although biological 

mechanisms for this effect have not yet 

been completely established, the weight 

of the available epidemiological, 

toxicological, and experimental 

evidence supports an assumption of 

causality. The impacts of including a 

probabilistic representation of causality 

were explored in the expert elicitationbased results of the recently published 

PM NAAQS RIA. Because the analysis 

of the final cold temperature vehicle 

standard is constrained to the studies 

included in the CAND PM benefits 

scaling approach, we are unable to 

conduct the same analysis of expert 

elicitation-based mortality incidence for 

the final standards.229 However, we 

qualitatively describe the expert 

elicitation-based mortality results 

associated with the final PM NAAQS to 

provide an indication of the sensitivity 

of our PM-related premature mortality 

results to use of alternative 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8517 

230Laden, F., J. Schwartz, F.E. Speizer, and D.W. 

Dockery. 2006. Reduction in Fine Particulate Air 

Pollution and Mortality. American Journal of 

Respiratory and Critical Care Medicine. 173: 667–

672. 

231 Dockery, D.W., C.A. Pope, X.P. Xu, J.D. 

Spengler, J.H. Ware, M.E. Fay, B.G. Ferris, and F.E. 

Speizer. 1993. ‘‘An Association between Air 

Pollution and Mortality in Six U.S. Cities.’’ New 

England Journal of Medicine 329(24):1753–1759. 

232See Chapter 4 of the Final Clean Air Interstate 

Rule RIA (http://www.epa.gov/cair) for a discussion 

of EPA’s ongoing efforts to address the NAS 

recommendations in its regulatory analyses. 

233EPA, 2005. Air Quality Criteria for Ozone and 

Related Photochemical Oxidants (First External 

Review Draft). January. http://cfpub.epa.gov/ncea/ 

cfm/recordisplay.cfm?deid=114523. 

234EPA, 2005. Air Quality Criteria for Ozone and 

Related Photochemical Oxidants (Second External 

Review Draft). August. http://cfpub.epa.gov/ncea/ 

cfm/recordisplay.cfm?deid=137307. 

235Social costs represent the welfare costs of the 

rule to society. These social costs do not consider 

transfer payments (such as taxes) that are simply 

redistributions of wealth. 

concentration-response functions. We 

present this discussion in the RIA. 

2. Since the publication of CAIR and 

CAND, a follow up to the Harvard SixCities study on premature mortality was 

published (Laden et al., 2006 based on 

Dockery et al., 1993),230, 231 which both 

confirmed the effect size from the first 

study and provided additional evidence 

that reductions in PM2.5 directly result 

in reductions in the risk of premature 

death. The impacts of including this 

study in the primary analysis were 

explored in the results of the recently 

published PM NAAQS RIA. Because the 

analysis of the final cold temperature 

vehicle standard is constrained to the 

studies included in the CAND PM 

benefits scaling approach, we are unable 

to characterize PM-related mortality 

based on Laden et al. However, we 

discuss the implications of these results 

in the RIA for the final standards. 

3. All fine particles, regardless of their 

chemical composition, are equally 

potent in causing premature mortality. 

This is an important assumption, 

because PM produced via transported 

precursors emitted from vehicles at cold 

temperatures may differ significantly 

from PM precursors released from 

electric generating units and other 

industrial sources. However, no clear 

scientific grounds exist for supporting 

differential effects estimates by particle 

type. 

4. The concentration-response 

function for fine particles is 

approximately linear within the range of 

ambient concentrations under 

consideration. Thus, the estimates 

include health benefits from reducing 

fine particles in areas with varied 

concentrations of PM, including both 

regions that may be in attainment with 

PM2.5 standards and those that are at 

risk of not meeting the standards. 

Taking into account these 

uncertainties, we believe this benefitcost analysis provides a conservative 

estimate of the expected economic 

benefits of the final standards for cold 

temperature vehicle control in future 

years because of the exclusion of 

potentially significant benefit categories. 

Acknowledging benefits omissions and 

uncertainties, we present a best estimate 

of the total benefits based on our 

interpretation of the best available 

scientific literature and methods. 

Furthermore, our analysis reflects many 

methodological improvements that were 

incorporated into the analysis of the 

final Clean Air Interstate Rule (CAIR), 

including a revised value of a statistical 

life, a revised baseline rate of future 

mortality, and a revised mortality lag 

assumption. Details of these 

improvements can be found in the RIA 

for this rule and in the final CAIR rule 

RIA.232 Once again, however, it should 

be noted that since the CAIR rule, EPA’s 

Office of Air and Radiation (OAR) has 

adopted a different format for its 

benefits analysis in which 

characterization of uncertainty is 

integrated into the main benefits 

analysis. Please see the PM NAAQS RIA 

for an indication of the uncertainty 

present in the base estimate of benefits 

and the sensitivity of our results to the 

use of alternative concentrationresponse functions. 

In contrast to the additional benefits 

of the final standards discussed above, 

it is also possible that this rule will 

result in disbenefits in some areas of the 

United States. The effects of ozone and 

PM on radiative transfer in the 

atmosphere can lead to effects of 

uncertain magnitude and direction on 

the penetration of ultraviolet light and 

climate. Ground level ozone makes up 

a small percentage of total atmospheric 

ozone (including the stratospheric layer) 

that attenuates penetration of 

ultraviolet—b (UVb) radiation to the 

ground. EPA’s past evaluation of the 

information indicates that potential 

disbenefits would be small, variable, 

and with too many uncertainties to 

attempt quantification of relatively 

small changes in average ozone levels 

over the course of a year.233 EPA’s most 

recent provisional assessment of the 

currently available information 

indicates that potential but 

unquantifiable benefits may also arise 

from ozone-related attenuation of UVb 

radiation.234 In addition, EPA believes 

that we are unable to quantify any net 

climate-related disbenefit or benefit 

associated with the combined ozone and 

PM reductions in this rule. 

5. How Do the Benefits Compare to the 

Costs of The Final Standards? 

The final rule provides three separate 

provisions that reduce air toxics 

emissions from mobile sources: cold 

temperature vehicle controls, a PFC 

emissions control program, and a 

control program limiting benzene in 

gasoline. A full appreciation of the 

overall economic consequences of these 

provisions requires consideration of the 

benefits and costs expected to result 

from each standard, not just those that 

could be expressed here in dollar terms. 

As noted above, due to limitations in 

data availability and analytical methods, 

our benefits analysis only monetizes the 

PM2.5 benefits from direct PM emission 

reductions associated with the cold 

temperature standards. There are a 

number of health and environmental 

effects associated with the final 

standards that we were unable to 

quantify or monetize (see Table VIII.E–

1). 

Table VIII.E–4 contains the estimates 

of monetized benefits of the final cold 

temperature vehicle standards only and 

estimated social welfare costs for all of 

the final control programs.235 The 

annual social welfare costs of all 

provisions of the final rule are described 

more fully in Section VIII.F. It should be 

noted that the estimated social welfare 

costs for the vehicle program contained 

in this table are for 2019. The 2019 

vehicle program costs are included for 

comparison purposes only and are 

therefore not included in the total 2020 

social costs. There are no compliance 

costs associated with the vehicle 

program after 2019; as explained 

elsewhere in this preamble, the vehicle 

compliance costs are primarily R&D and 

facilities costs that are expected to be 

recovered by manufacturers over the 

first ten years of the program. 

The results in Table VIII.E–4 suggest 

that the 2020 monetized benefits of the 

cold temperature vehicle standards are 

greater than the expected social welfare 

costs of that program in 2019. 

Specifically, the annual benefits of the 

program will be approximately $3,300 + 

B million or $3,000 + B million 

annually in 2020 (using a 3 percent and 

7 percent discount rate in the benefits 

analysis, respectively), compared to 

estimated social welfare costs of 

approximately $10.6 million in the last 

year of the program (2019). These 

benefits are expected to increase to 

$6,300 + B million or $5,700 + B million 

annually in 2030 (using a 3 percent and 


pwalker on PROD1PC71 with RULES_2
8518 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

236U.S. Environmental Protection Agency, 2000. 

Guidelines for Preparing Economic Analyses. 

http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/ 

Guidelines.html. 

237Office of Management and Budget, The 

Executive Office of the President, 2003. Circular A–

4. http://www.whitehouse.gov/omb/circulars. 

7 percent discount rate in the benefits 

analysis, respectively), even as the 

social welfare costs of that program fall 

to zero. Table VIII.E–4 also presents the 

costs of the other rule provisions: a PFC 

emissions control program and a control 

program limiting benzene in gasoline. 

Though we are unable to present the 

benefits associated with these two 

programs, the benefits associated with 

the final cold temperature vehicle 

standards alone outweigh the costs of all 

three rule provisions combined. 

TABLE VIII.E–4.—SUMMARY OF ANNUAL BENEFITS OF THE FINAL COLD TEMPERATURE VEHICLE STANDARDS AND COSTS

OF ALL PROVISIONS OF THE FINAL STANDARDS a

[Millions of 2003 dollars] 

Description 2020 (Millions of 2003 dollars) 2030 (Millions of 2003 dollars) 

Estimated Social Welfare Costs b

Cold Temperature Vehicle Standards .............................................. $10.6 c ............................................ $0 

PFC Standards ................................................................................. $37.5 .............................................. $45.7 

Fuel Standards d ............................................................................... $402.6 ............................................ $445.8 

Total ................................................................................................. $440.1 ............................................ $491.5 

Fuel Savings .................................................................................... ¥$80.7 .......................................... ¥$91.5 

Net Social Welfare Costs $359.4 ............................................ $400.0 

Total PM2.5-Related Health Benefits of the 

Cold Temperature Vehicle Standards e

3 percent discount rate .................................................................... $3,300 + Bf ................................... $6,300 + Bf

7 percent discount rate .................................................................... $3,000 + Bf ................................... $5,700 + Bf

aAll estimates are rounded to two significant digits and represent annualized benefits and costs anticipated for the years 2020 and 2030, except where noted. Totals may not sum due to rounding. b Note that costs are the annual costs of reducing all pollutants associated with each provision of the final MSAT control package in 2020 and 

2030 (unless otherwise noted). To estimate fixed costs associated with the vehicle standards, we use a 7 percent average before-tax rate of return over 5 years to amortize the capital fixed costs. For the fuel standards, we use a 7 percent before-tax rate of return over 15 years to amortize the capital costs. Note that by 2020, PFC container standard costs are only variable and do not use a rate of return assumption. See Chapters 8 and 9 for discussion of the vehicle and fuel standard costs, respectively. In Chapter 13, however, we do use both a 3 percent and 7 percent social discount rate to calculate the net present value of total social costs consistent with EPA and OMB guidelines for preparing economic 

analyses (US EPA, 2000 and OMB, 2003).236, 237

cThese costs are for 2019; the vehicle program compliance costs terminate after 2019 and are included for illustrative purposes. They are not 

included in the total social welfare cost sum for 2020. dOur modeling for the total costs of the proposed gasoline benzene program included participation by California refineries (achieving benzene 

reductions below the 0.62 proposed benzene standard—thus generating credits), since it was completed before we decided that California gasoline would not be covered by the program. For the final rule, we exclude California refineries from the analysis. By excluding California refineries, 

other higher cost refineries will have to comply in their place, slightly increasing the costs for the program. eAnnual benefits reflect only direct PM reductions associated with the cold temperature vehicle standards. Annual benefits analysis results reflect the use of a 3 percent and 7 percent discount rate in the valuation of premature mortality and nonfatal myocardial infarctions, consistent 

with EPA and OMB guidelines for preparing economic analyses (US EPA, 2000 and OMB, 2003). Valuation of premature mortality based on 

long-term PM exposure assumes discounting over the SAB recommended 20-year segmented lag structure described in the Regulatory Impact 

Analysis for the Final Clean Air Interstate Rule (March 2005). Valuation of nonfatal myocardial infarctions (MI) assumes discounting over a 5-year 

period, reflecting lost earnings and direct medical costs following a nonfatal MI. Note that we do not calculate a net present value of benefits associated with the cold temperature vehicle standards. f Not all possible benefits or disbenefits are quantified and monetized in this analysis. B is the sum of all unquantified benefits and disbenefits. 

Potential benefit categories that have not been quantified and monetized are listed in Table VIII.E–1. 

F. Economic Impact Analysis 

We prepared an Economic Impact 

Analysis (EIA) to estimate the economic 

impacts of this rule on the portable fuel 

container (PFC), gasoline fuel, and lightduty vehicle markets. In this section we 

briefly describe the Economic Impact 

Model (EIM) we developed to estimate 

both the market-level changes in price 

and outputs for affected markets and the 

social costs of the program and their 

distribution across affected 

stakeholders. We also present the results 

of our analysis. 

We estimate the net social costs of the 

program to be about $359.4 million in 

2020. This estimate reflects the 

estimated costs associated with 

compliance with the gasoline, PFC, and 

vehicle controls and the expected 

gasoline fuel savings from better 

evaporative controls on PFCs. The 

results of the economic impact 

modeling performed for the gasoline 

fuel and PFC control programs suggest 

that the social costs of those two 

programs are expected to be about 

$440.1 million in 2020, with consumers 

of these products expected to bear about 

58.4 percent of these costs. We estimate 

gasoline fuel savings of about $80.7 

million in 2020, which will accrue to 

consumers. There are no social costs 

associated with the vehicle program in 

2020 (these accrue only in the 10-year 

period from 2010 through 2019). These 

estimates, and all costs presented in this 

section, are in year 2003 dollars. 

With regard to market-level impacts 

in 2020, the maximum price increase for 

gasoline fuel is expected to be about 0.3 

percent (0.5 cents per gallon), for PADD 

5. The price of PFCs is expected to 

increase by about 1.9 percent ($0.20 per 

can) in areas that already have PFC 

requirements and 32.5 percent ($1.52 

per can) in areas that do not. 

Detailed descriptions of the EIM, the 

model inputs, modeling results, and 

several sensitivity analyses can be found 

in Chapter 13 of the Regulatory Impact 

Analysis prepared for this rule. 

1. What Is an Economic Impact 

Analysis? 

An Economic Impact Analysis (EIA) is 

prepared to inform decision makers 

about the potential economic 

consequences of a regulatory action. The 

analysis consists of estimating the social 

costs of a regulatory program and the 

distribution of these costs across 

stakeholders. These estimated social 

costs can then be compared with 

estimated social benefits (as presented 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8519 

238EPA Guidelines for Preparing Economic 

Analyses, EPA 240–R–00–003, September 2000, p 

113. A copy of this document can be found at 

http://yosemite.epa.gov/ee/epa/eed.nsf/webpages/ 

Guidelines.html#download. 

239The U.S Department of Energy estimates that 

about 92 percent of gasoline used in the United 

States for transportation is used in light-duty 

vehicles. About 6 percent is used for commercial or 

industrial transportation, and the remaining 2 

percent is used in recreational marine vessels. See 

U.S Department of Energy, Energy Information 

Administration, 2004. ‘‘Annual Energy Outlook 

2004 with projections to 2025.’’ Last updated June 

2, 2004. Table A–2 and Supplemental Table 34. 

http://www.eia.doe.gov/oiaf/aeoref_tab.html. 

240A recent study by CARB (1999) found that 94 

percent of portable fuel containers in California 

were used by residential households California 

Environmental Protection Agency, Air Resources 

Board (CARB) 1999. See ‘‘Hearing Notice and Staff 

Report, Initial Statement of Reasons for Proposed 

Rule Making Public Hearing to Consider the 

Adoption of Portable Fuel Container Spillage 

Control Regulation.’’ Sacrament, CA: California 

Environmental Protection Agency, Air Resources 

Board (CARB). A copy of this document is available 

at http://www.arb.ca.gov/regact/spillcon/isor.pdf. 

241U.S. Environmental Protection Agency, Office 

of Air Quality Planning and Standards, Innovative 

Strategies and Economics Group, OAQPS Economic 

Analysis Resource Document, April 1999. A copy 

of this document can be found at http:// 

www.epa.gov/ttn/ecas/econdata/Rmanual2/. 

in Section VIII.E). As defined in EPA’s 

Guidelines for Preparing Economic 

Analyses, social costs are the value of 

the goods and services lost by society 

resulting from a) the use of resources to 

comply with and implement a 

regulation and b) reductions in 

output.238 In this analysis, social costs 

are explored in two steps. In the market 

analysis, we estimate how prices and 

quantities of goods affected by the 

emission control program can be 

expected to change once the program 

goes into effect. In the economic welfare 

analysis, we look at the total social costs 

associated with the program and their 

distribution across stakeholders. 

2. What Is the Economic Impact Model? 

The Economic Impact Model (EIM) is 

a behavioral model developed to 

estimate price and quantity changes and 

total social costs associated with the 

emission controls set out in this rule. 

The EIM simulates how producers and 

consumers of affected products can be 

expected to respond to an increase in 

production costs associated with 

compliance with the emission control 

program. In this EIM, compliance costs 

are directly borne by producers of 

affected goods. Depending on the 

producers’ and consumers’ sensitivity to 

price changes, producers may be able to 

pass some or all of these compliance 

costs on to the consumers of these goods 

in the form of higher prices. Consumers 

adjust their consumption of affected 

goods in response to these price 

changes. This information is passed 

back to the producers in the form of 

purchasing decisions. The EIM takes 

these behavioral responses into account 

to estimate new market equilibrium 

quantities and prices for all modeled 

sectors and the resulting distribution of 

social costs across these stakeholders 

(producers and consumers). 

3. What Economic Sectors Are Included 

in this Economic Impact Analysis? 

There are three economic sectors 

affected by the control programs 

described in this rule: PFCs, gasoline 

fuel, and light-duty vehicles. In this 

Economic Impact Analysis we model 

only the impacts on the PFC and 

gasoline fuel markets. We did not model 

the impacts on the light-duty vehicle 

market. This is because the compliance 

costs for the vehicle program are 

expected to be very small, less than $1 

per vehicle and, even if passed on 

entirely, are unlikely to affect producer 

or consumer behavior. Therefore, we do 

not expect these controls to affect the 

quantity of vehicles produced or their 

prices. At the same time, however, the 

light-duty vehicle compliance costs are 

a cost to society and should be included 

in the economic welfare analysis. We do 

this by adding the vehicle program 

engineering compliance cost estimates 

to the estimated social costs of the 

gasoline and PFC programs. 

With regard to the gasoline fuel and 

PFC markets, we model the impacts on 

residential users of these products. This 

means that we focus the analysis on the 

use of these products for personal 

transportation (gasoline fuel) or 

residential lawns and garden care or 

recreational uses (PFCs) and do not 

separately model how the costs of 

complying with the standards may 

affect the production of goods and 

services that use gasoline fuel or PFCs 

as production inputs. We believe this 

approach is reasonable because the 

commercial share of the end-user 

markets for both gasoline fuel and PFCs 

is relatively small.239, 240 In addition, for 

most commercial users the share of the 

cost of these products to total 

production costs is also small (e.g., the 

cost of a PFC is only a very small part 

of the total production costs for an 

agricultural or construction firm). 

Therefore, a price increase of the 

magnitude anticipated for this control 

program is not expected to have a 

noticeable impact on prices or 

quantities of goods produced using 

these inputs (e.g., agricultural product 

or buildings). 

With regard to the gasoline fuel 

analysis, it should be noted that this EIA 

does not include California fuels in the 

market analysis. California currently has 

state-level controls that address air 

toxics from gasoline. Also, consistent 

with the cost analysis, the economic 

impact analysis does not distinguish 

between reformulated and conventional 

gasoline fuels. 

The EIM models the economic 

impacts on two PFC markets (states that 

currently have requirements for PFCs 

and those that do not), and four gasoline 

fuel markets (PADDs 1+3, PADD 2, 

PADD 4, PADD 5). The markets 

included in this EIA are described in 

more detail in Chapter 13 of the RIA for 

this rule. 

In the EIM, the gasoline fuel and PFC 

markets are not linked (there is no 

feedback mechanism between the PFC 

and gasoline fuel model segments). This 

is because these two sectors represent 

different aspects of fuel consumption 

(fuel storage and fuel production) and 

production and consumption of PFCs is 

not expected to have an impact on the 

production and supply of gasoline, and 

vice versa. Production and consumption 

of each of these products are the result 

of other factors that have little crossover impacts (the need for fuel storage; 

the need for personal transportation). 

4. What Are the Key Features of the 

Economic Impact Model? 

A detailed description of the features 

of the EIM and the data used in the 

analysis is provided in Chapter 13 of the 

RIA prepared for this rule. The model 

methodology is firmly rooted in applied 

microeconomic theory and was 

developed following the methodology 

set out in the OAQPS’s Economic 

Analysis Resource Document.241

The EIM is a computer model 

comprised of a series of spreadsheet 

modules that simulate the supply and 

demand characteristics of the affected 

markets. The initial market equilibrium 

conditions are shocked by applying the 

compliance costs for the control 

program to the supply side of the 

markets (this is done by shifting the 

relevant supply curves by the amount of 

the compliance costs). The model 

equations can be analytically solved for 

equilibrium prices and quantities for the 

markets with the regulatory program 

and these new prices and quantities are 

used to estimate the social costs of the 

model and how those costs are shared 

among affected markets. 

The EIM is a partial equilibrium, 

intermediate-run model that assumes 

perfect competition in the relevant 

markets. As explained in EPA’s 

Guidelines for Preparing Economic 

Analyses, ‘‘partial equilibrium’’ means 

that the model considers markets in 


pwalker on PROD1PC71 with RULES_2
8520 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

242EPA Guidelines for Preparing Economic 

Analyses, EPA 240–R–00–003, September 2000, p. 

125–6. 

243See, for example, EPA Guidelines for 

Preparing Economic Analyses, EPA 240–R–00–003, 

September 2000, p 126. 

244Section 3 Industry Organization, 

‘‘Characterizing Gasoline Markets: a Profile,’’ Final 

Report, prepared for EPA by RTI, August 2005. 

245A monopoly or firms in oligopoly may not 

behave as neoclassical economic theories of the 

firm predict because they may be concerned about 

new entrants to the market. If super-normal profits 

are earned, potential competitors may enter the 

market. To respond to this threat, existing firm(s) 

in the market will keep prices and output at a level 

where only normal profits are made, setting price 

and output levels at or close to the competitive 

price and output. See Chapter 13 of the RIA for 

more information, Section 13.2.3. 

isolation and that conditions in other 

markets are assumed either to be 

unaffected by a policy or unimportant 

for social cost estimation.242 The use of 

the intermediate run means that some 

factors of production are fixed and some 

are variable. In very short analyses, all 

factors of production would be assumed 

to be fixed, leaving the producers with 

no means to respond to the increased 

production costs associated with the 

regulation (e.g., they cannot adjust labor 

or capital inputs). Under this time 

horizon, the costs of the regulation fall 

entirely on the producer. In the long 

run, all factors of production are 

variable and producers can adjust 

production in response to cost changes 

imposed by the regulation (e.g., using a 

different labor/capital mix). In the 

intermediate run there is some resource 

immobility which may cause producers 

to suffer producer surplus losses, but 

they can also pass some of the 

compliance costs to consumers. 

The perfect competition assumption 

is widely accepted economic practice 

for this type of analysis, and only in rare 

cases are other approaches used.243 It 

should be noted that the perfect 

competition assumption is not primarily 

about the number of firms in a market. 

It is about how the market operates: the 

nature of the competition among firms. 

Indicators that allow us to assume 

perfect competition include absence of 

barriers to entry, absence of strategic 

behavior among firms in the market, and 

product differentiation. 

With regard to the fuel market, the 

Federal Trade Commission (FTC) has 

developed an approach to ensure 

competitiveness in gasoline fuel 

markets. It reviews oil company mergers 

and frequently requires divestiture of 

refineries, terminals, and gas stations to 

maintain a minimum level of 

competition. This is discussed in more 

detail in the industry profile prepared 

for this rule.244

With regard to the PFC market, the 

small number of firms in the market is 

offset by several features of this market. 

Because PFCs are compact and 

lightweight, they are easy to transport 

far from their place of manufacture. This 

means that production is not limited to 

local producers. Although they vary by 

size and material, consumers are likely 

to view all PFCs designed for storing a 

particular fuel (gasoline, diesel fuel, 

kerosene) as good substitutes for the 

storage of that particular fuel. Because 

the products are similar enough to be 

considered homogeneous (e.g., perfectly 

substitutable), consumers can shift their 

purchases from one manufacturer to 

another. There are only minimal 

technical barriers to entry that would 

prevent new firms from freely entering 

the market, since manufacturing is 

based on well-known plastic processing 

methods. In addition, there is significant 

excess capacity, enabling competitors to 

respond quickly to changes in price. 

Excess production capacity in the 

general container manufacturing market 

also means that manufacturers could 

potentially switch their product lines to 

compete in this segment of the market, 

often without a significant investment. 

In addition, there is no evidence of high 

levels of strategic behavior in the price 

and quantity decisions of the firms. 

Finally, it should be noted that 

contestable market theory asserts that 

oligopolies and even monopolies will 

behave very much like firms in a 

competitive market if manufacturers 

have extra production capacity and this 

capacity could allow them to enter the 

market costlessly (i.e., there are no sunk 

costs associated with this kind of market 

entry or exit).245 As a result of all of 

these conditions, producers and 

consumers in the PFC market are 

expected to take the market price as 

given when making their production 

and consumption choices and the 

market can be modeled as a competitive 

market even though the number of 

producers is small. 

5. What Are the Key Model Inputs? 

Key model inputs for the EIM are the 

behavioral parameters, compliance costs 

estimates, and market equilibrium 

quantities and prices. 

The EIM is a behavioral model. The 

estimated social costs of this emission 

control program are a function of the 

ways in which producers and 

consumers of the PFC and gasoline fuel 

affected by the standards change their 

behavior in response to the costs 

incurred in complying with the 

standards. These behavioral responses 

are incorporated in the EIM through the 

price elasticity of supply and demand 

(reflected in the slope of the supply and 

demand curves), which measure the 

price sensitivity of consumers and 

producers. The price elasticities used in 

this analysis are described in Chapter 13 

of the RIA. The gasoline elasticities 

were obtained from the literature and 

are ¥0.2 for demand and 0.2 for supply. 

This means that both the quantity 

supplied and demanded are expected to 

be fairly insensitive to price changes 

and that increases in prices are not 

expected to cause sales to fall or 

production to increase by very much. 

Because we were unable to find 

published supply and demand 

elasticities for the PFC market, we 

estimated these parameters using the 

procedures described in Chapter 13 of 

the RIA. This approach yielded a 

demand elasticity of ¥0.01 and a 

supply elasticity of 1.5. The estimated 

demand elasticity is nearly perfectly 

inelastic (equal to zero), which means 

that changes in price are expected to 

have very little effect on the quantity of 

PFCs demanded. However, supply is 

fairly elastic, meaning producers are 

expected to respond to a change in 

price. Therefore, consumers are 

expected to bear more of the burden of 

PFC regulatory control costs than 

producers. 

Initial market equilibrium conditions 

are simulated using the same current 

year sales quantities and growth rates 

used in the engineering cost analysis. 

The initial equilibrium prices for PFCs 

and gasoline fuel were obtained from 

industry sources and published 

government data. The initial 

equilibrium market conditions are 

shocked by applying the engineering 

compliance cost estimates described 

earlier in this section. Although both the 

PFC and gasoline fuel markets are 

competitive markets, the model is 

shocked by applying the sum of variable 

and fixed costs. Two sets of compliance 

costs are used in the PFC market 

analysis, reflecting states with existing 

controls and states without existing 

controls. The compliance costs used to 

shock the gasoline fuel market are based 

on an average total cost (variable + 

fixed) analysis. An explanation for this 

approach can be found in Section 

13.2.4.1 of the RIA prepared for this 

rule. These gasoline fuel compliance 

costs differ across PADDs but are the 

same across years. Because California 

already has existing gasoline fuel 

controls, fuel volumes for that state are 

not included in the market analysis. 

Additional costs that need to be 

considered in the EIM are the gasoline 

fuel savings associated with the PFC 

controls and the costs of the light-duty 

vehicle controls. The PFC controls are 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8521 

246Actual fuel program compliance costs are 

expected to be spread more evenly across years. 

expected to reduce gasoline evaporative 

emissions from fuel storage, leading to 

gasoline fuel savings for users of these 

containers. These gasoline fuel savings 

are not included in the market analysis 

for this economic impact analysis 

because these savings are not expected 

to affect consumer decisions with 

respect to the purchase of new 

containers. Gasoline fuel savings are 

included in the social cost analysis, 

however, because they are a savings that 

accrues to society. The estimated 

gasoline fuel savings are added to the 

estimated social costs as a separate line 

item. As noted above, the economic 

impacts of the light-duty vehicle 

controls are not modeled in the EIM. 

Instead, the estimated engineering 

compliance costs are used as a proxy, 

and are also added into the estimated 

social costs as a separate line item. 

The EIM relies on the estimated 

compliance costs for the PFC and 

gasoline fuel programs described 

elsewhere in this preamble. Thus, the 

EIM reflects cost savings associated with 

ABT or other flexibility programs to the 

extent they are included in the 

estimated compliance costs. 

6. What Are the Results of the Economic 

Impact Modeling? 

Using the model and data described 

above, we estimated the economic 

impacts of the rule. The results of our 

modeling for selected years are 

summarized in this section. The year 

2009 is presented because that is the 

first year in which both the PFC and the 

gasoline programs are in effect (the PFC 

program begins in 2009; the gasoline 

fuel program goes into effect January 1, 

2011 but the compliance cost analysis 

includes a phase-in starting in 2007 that 

ends May 2015). The year 2012 is 

presented because it is a high cost year 

due to the way the fuel program 

compliance costs were estimated.246

The year 2015 is presented because 

beginning with that year compliance 

costs are stabilized for future years for 

both the gasoline and PFC programs (the 

vehicle program compliance costs 

continue for five more years). Detailed 

results for all years are included in the 

appendices to Chapter 13 of the RIA. 

Also included as an appendix to that 

chapter are sensitivity analyses for 

several key inputs. 

Market Impact Analysis. In the market 

analysis, we estimate how prices and 

quantities of goods affected by the 

emission control program can be 

expected to change once the program 

goes into effect. As explained above, we 

estimated market impacts for only the 

gasoline fuel and PFC markets. The 

analysis relies on the baseline 

equilibrium prices and quantities for 

each market and the price elasticity of 

supply and demand. It predicts market 

reactions to the increase in production 

costs due to the new compliance costs. 

It should be noted that this analysis 

does not allow any other factors to vary. 

In other words, it does not consider that 

manufacturers may adjust their 

production processes or marketing 

strategies in response to the control 

program. 

The market analysis results for 2009, 

2012, 2015, and 2020 are presented in 

Table VIII.F–1. With regard to the 

gasoline fuel program, the market 

impacts are expected to be small, on 

average. The price of gasoline fuel is 

expected to increase by less than 0.5 

percent, depending on PADD, with 

smaller increases during the program 

phase-in. The expected reduction in 

quantity of fuel produced is expected to 

be less than 0.1 percent. 

The market impacts for the PFC 

program are expected to be more 

significant. In 2009, the first year of the 

PFC program, the model predicts a price 

increase of about seven percent for PFCs 

in states that currently have regulations 

for PFCs and about 57 percent for those 

that do not. Even with these large price 

increases, however, the quantity 

produced is not expected to decrease by 

very much: less than 0.6 percent. These 

percent price increases and quantity 

decreases are much smaller after the 

first five years. In 2015, the estimated 

PFC price increase is expected to be less 

than two percent for states that 

currently regulate PFCs and about 32.5 

percent for states without such 

regulations. The quantity produced is 

expected to decrease by less than 0.4 

percent. The results for 2020 are 

substantially the same as 2015, with a 

larger decrease in the number of PFCs 

produced. 

TABLE VIII.F–1.—SUMMARY OF MARKET IMPACTS (2009, 2012, 2015, AND 2020; 2003$) 

Market Engineering cost 

per unit 

Change in price Change in quantity 

Absolute Percent Absolute Percent 

2009 

¢/gallon ¢/gallon Million gallons 

Gasoline Fuel: 

PADD 1 & 3 .................................... 0.016 0.009 0.006 ¥0.9 ¥0.001 

PADD 2 ........................................... 0.091 0.050 0.033 ¥2.7 ¥0.007 

PADD 4 ........................................... 0.033 0.018 0.011 ¥0.1 ¥0.002 

PADD 5 (w/out CA) ........................ 0.007 0.004 0.002 ¥0.0 0.000 

$/can Thousand cans 

Portable Fuel Containers: 

States with existing programs ........ 0.77 0.76 6.9 ¥8.0 ¥0.07 

States without existing programs ... 2.70 2.68 57.5 ¥104.7 ¥0.57 

2012 

¢/gallon Million gallons 

Gasoline Fuel: 

PADD 1 & 3 .................................... 0.058 0.032 0.021 ¥3.3 ¥0.004 

PADD 2 ........................................... 0.308 0.168 0.111 ¥9.7 ¥0.022 


pwalker on PROD1PC71 with RULES_2
8522 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

TABLE VIII.F–1.—SUMMARY OF MARKET IMPACTS (2009, 2012, 2015, AND 2020; 2003$)—Continued 

Market Engineering cost 

per unit 

Change in price Change in quantity 

Absolute Percent Absolute Percent 

PADD 4 ........................................... 0.213 0.116 0.074 ¥0.8 ¥0.015 

PADD 5 (w/out CA) ........................ 0.140 0.768 0.046 ¥0.8 ¥0.009 

$/can Thousand cans 

Portable Fuel Containers: 

States with existing programs ........ 0.77 0.76 6.9 ¥8.5 ¥0.07 

States without existing programs ... 2.70 2.68 57.5 ¥111.1 ¥0.57 

2015 

¢/gallon Million gallons 

Gasoline Fuel: 

PADD 1 & 3 .................................... 0.149 0.081 0.055 ¥8.9 ¥0.011 

PADD 2 ........................................... 0.307 0.167 0.111 ¥10.4 ¥0.022 

PADD 4 ........................................... 0.501 0.273 0.174 ¥1.8 ¥0.035 

PADD 5 (w/out CA) ........................ 0.997 0.544 0.327 ¥6.1 ¥0.065 

$/can Thousand cans 

Portable Fuel Containers: 

States with existing programs ........ 0.21 0.20 1.9 ¥2.4 ¥0.02 

States without existing programs ... 1.53 1.52 32.5 ¥66.7 ¥0.32 

2020 

¢/gallon Million gallons 

Gasoline Fuel: 

PADD 1 & 3 .................................... 0.149 0.081 0.055 ¥9.5 ¥0.011 

PADD 2 ........................................... 0.307 0.167 0.111 ¥10.7 ¥0.022 

PADD 4 ........................................... 0.501 0.273 0.174 ¥2.0 ¥0.035 

PADD 5 (w/out CA) ........................ 0.997 0.544 0.327 ¥6.4 ¥0.065 

$/can Thousand cans 

Portable Fuel Containers: 

States with existing programs ........ 0.21 0.20 1.9 ¥2.7 ¥0.02 

States without existing programs ... 1.53 1.52 32.5 ¥73.6 ¥0.32 

Economic Welfare Analysis. In the 

economic welfare analysis, we look at 

the costs to society of the emission 

control program in terms of losses to key 

stakeholder groups that are the 

producers and consumers in the 

gasoline and PFC markets. These 

surplus losses are combined with 

estimated vehicle compliance costs, 

gasoline fuel savings, and government 

revenue losses to estimate the net 

economic welfare impacts of the 

program. Detailed economic welfare 

results for the rule are presented in 

Appendix C and are summarized below. 

The estimated annual net social costs 

(total social costs less gasoline fuel 

savings) for all years are presented in 

Table VIII.F–2. These social costs follow 

the trend of the fuel program 

compliance costs. Initially, the 

estimated social costs of the program are 

relatively small as the gasoline program 

begins to phase in. The net social costs 

increase to 2012, fall somewhat for 2013 

and 2014 due to changes in the fuel 

program compliance costs, and then 

increase again in 2015, after which time 

the per-gallon costs are expected to be 

stable. Some of the decrease in social 

costs in 2014 is also due to a decrease 

in costs associated with the PFC 

program, since fixed costs are fully 

amortized by 2014. The slight decrease 

in 2020 is due to the end of the vehicle 

compliance costs, which are incurred in 

the 10-year period from 2010 through 

2019. 

TABLE VIII.F–2.—ESTIMATED ENGINEERING COMPLIANCE AND SOCIAL

COSTS THROUGH 2035 

[Including fuel savings; $million; 2003$] 

Year 

Engineering 

compliance 

costs 

Social costs 

2007 .......... $29.5 $29.5 

2008 .......... 51.3 51.3 

TABLE VIII.F–2.—ESTIMATED ENGINEERING COMPLIANCE AND SOCIAL

COSTS THROUGH 2035—Continued 

[Including fuel savings; $million; 2003$] 

Year 

Engineering 

compliance 

costs 

Social costs 

2009 .......... 99.0 98.9 

2010 .......... 161.9 161.7 

2011 .......... 152.6 152.4 

2012 .......... 228.7 228.5 

2013 .......... 190.9 190.8 

2014 .......... 150.8 150.7 

2015 .......... 350.8 350.7 

2016 .......... 354.5 354.4 

2017 .......... 358.0 357.9 

2018 .......... 361.9 361.8 

2019 .......... 366.1 366.0 

2020 .......... 359.5 359.4 

2021 .......... 363.5 363.4 

2022 .......... 367.1 367.0 

2023 .......... 370.7 370.6 

2024 .......... 374.7 374.6 

2025 .......... 378.7 378.6 

2026 .......... 383.1 383.0 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8523 

TABLE VIII.F–2.—ESTIMATED ENGINEERING COMPLIANCE AND SOCIAL

COSTS THROUGH 2035—Continued 

[Including fuel savings; $million; 2003$] 

Year 

Engineering 

compliance 

costs 

Social costs 

2027 .......... 387.5 387.4 

2028 .......... 391.6 391.4 

2029 .......... 396.0 395.9 

2030 .......... 400.1 400.0 

2031 .......... 404.6 404.5 

2032 .......... 409.2 409.1 

2033 .......... 413.9 413.7 

2034 .......... 418.6 418.4 

2035 .......... 423.4 423.2 

3% NPV 

(2006–

2035) ..... 5,356.8 5,354.6 

TABLE VIII.F–2.—ESTIMATED ENGINEERING COMPLIANCE AND SOCIAL

COSTS THROUGH 2035—Continued 

[Including fuel savings; $million; 2003$] 

Year 

Engineering 

compliance 

costs 

Social costs 

7% NPV 

(2006–

2035) ..... 2,901.0 2,899.7 

Table VIII.F–3 shows how the social 

costs are expected to be shared across 

stakeholders, for selected years. 

Information for all years can be found in 

Appendix C. According to these results, 

consumers are expected to bear 

approximately 99 percent of the cost of 

the PFC program. This reflects the 

inelastic price elasticity on the demand 

side of the market and the elastic price 

elasticity on the supply side. The 

burden of the gasoline fuel program is 

expected to be shared more evenly, with 

about 54.5 percent expected to be borne 

by consumers and about 45.5 percent 

expected to be borne by producers. In 

all years, the estimated loss to consumer 

welfare will be offset somewhat by the 

gasoline fuel savings associated with 

PFCs. Beginning at about $11 million 

per year, these savings increase to about 

$76 million by 2015 as compliant PFCs 

are phased in. These savings continue 

for the life of the PFCs; total annual 

savings increase as the number of cans 

increases. 

TABLE VIII.F–3.—SUMMARY OF ESTIMATED SOCIAL COSTS, 2009, 2012, 2015, AND 2020 

[$million; 2003$] 

Market 

Change in 

consumer 

surplus 

Change in 

producer 

surplus 

Total 

2009 

Gasoline U.S. ............................................................................................................................... ¥$28.5 ¥$23.8 ¥$52.3 

(54.6%) (45.4%) ........................

PADD 1 & 3 .......................................................................................................................... ¥$6.7 ¥$5.6 ¥$12.2 

PADD 2 ................................................................................................................................. ¥$20.6 ¥$17.2 ¥$37.8 

PADD 4 ................................................................................................................................. ¥$0.9 ¥$0.7 ¥$1.6 

PADD 5 (w/out CA) .............................................................................................................. ¥$0.3 ¥$0.3 ¥$0.6 

Portable Fuel Containers U.S. ..................................................................................................... ¥$57.5 ¥$0.4 ¥$57.9 

(99.3%) (0.7%) ........................

States with existing programs .............................................................................................. ¥$8.9 ¥$0.1 ¥$8.9 

States without existing programs ......................................................................................... ¥$48.7 ¥$0.3 ¥$49.0 

Subtotal ......................................................................................................................... ¥$86.1 ¥$24.1 ¥$110.2 

(78.1%) (22%) ........................

Fuel Savings ................................................................................................................................ ........................ ........................ $11.3 

Vehicle Program .......................................................................................................................... ........................ ........................ $0 

Total ............................................................................................................................... ........................ ........................ ¥$98.9 

2012 

Gasoline U.S. ............................................................................................................................... ¥$110.7 ¥$92.3 ¥$203.0 

(54.5%) (45.5%) ........................

PADD 1 & 3 .......................................................................................................................... ¥$24.8 ¥$20.7 ¥$45.5 

PADD 2 ................................................................................................................................. ¥$73.2 ¥$61.0 ¥$134.2 

PADD 4 ................................................................................................................................. ¥$5.9 ¥$4.9 ¥$10.9 

PADD 5 (w/out CA) .............................................................................................................. ¥$6.8 ¥$4.7 ¥$12.4 

Portable Fuel Containers U.S. ..................................................................................................... ¥$61.1 ¥$0.4 ¥$61.5 

(99.3%) (0.7%) ........................

States with existing programs .............................................................................................. ¥$9.4 ¥$0.1 ¥$9.5 

States without existing programs ......................................................................................... ¥$51.7 ¥$0.4 ¥$52.1 

Subtotal ......................................................................................................................... ¥$171.8 ¥$92.7 ¥$264.5 

(65.0%) (35.0%) ........................

Fuel Savings ................................................................................................................................ ........................ ........................ $48.5 

Vehicle Program .......................................................................................................................... ........................ ........................ ¥$12.5 

Total ............................................................................................................................... ........................ ........................ ¥$228.5 

2015 

Gasoline U.S. ............................................................................................................................... ¥$207.0 ¥$172.5 ¥$379.4 

(54.5%) (45.5%) ........................

PADD 1 & 3 .......................................................................................................................... ¥$66.3 ¥$55.3 ¥$121.6 

PADD 2 ................................................................................................................................. ¥$75.9 ¥$63.2 ¥$139.1 


pwalker on PROD1PC71 with RULES_2
8524 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

247EPA presents the present value of cost and 

benefits estimates using both a three percent and a 

seven percent social discount rate. According to 

OMB Circular A–4, ‘‘the 3 percent discount rate 

represents the ‘social rate of time preference’ * * * 

[which] means the rate at which ‘society’ discounts 

future consumption flows to their present value’’; 

‘‘the seven percent rate is an estimate of the average 

before-tax rate of return to private capital in the 

U.S. economy * * * [that] approximates the 

opportunity cost of capital.’’

TABLE VIII.F–3.—SUMMARY OF ESTIMATED SOCIAL COSTS, 2009, 2012, 2015, AND 2020—Continued 

[$million; 2003$] 

Market 

Change in 

consumer 

surplus 

Change in 

producer 

surplus 

Total 

PADD 4 ................................................................................................................................. ¥$14.5 ¥$12.1 ¥$26.6 

PADD 5 (w/out CA) .............................................................................................................. ¥$50.3 ¥$41.9 ¥$92.2 

Portable Fuel Containers U.S. ..................................................................................................... ¥$33.7 ¥$0.2 ¥$34.0 

(99.3%) (0.7%) ........................

States with existing programs .............................................................................................. ¥$2.7 $0.0 ¥$2.7 

States without existing programs ......................................................................................... ¥$31.0 ¥$0.2 ¥$31.3 

Subtotal ......................................................................................................................... ¥$240.7 ¥$172.7 ¥$413.4 

(58.2%) (41.8%) ........................

Fuel Savings ................................................................................................................................ ........................ ........................ $75.5 

Vehicle Program .......................................................................................................................... ........................ ........................ ¥$12.9 

Total ............................................................................................................................... ........................ ........................ ¥$350.7 

2020 

Gasoline U.S. ............................................................................................................................... ¥$219.6 ¥$183.0 ¥$402.6 

(54.5%) (45.5%) ........................

PADD 1 & 3 .......................................................................................................................... ¥$70.4 ¥$58.6 ¥$129.0 

PADD 2 ................................................................................................................................. ¥$80.5 ¥$67.1 ¥$147.6 

PADD 4 ................................................................................................................................. ¥$15.4 ¥$12.8 ¥$28.2 

PADD 5 (w/out CA) .............................................................................................................. ¥$53.4 ¥$44.5 ¥$97.8 

Portable Fuel Containers U.S. ..................................................................................................... ¥$37.2 ¥$0.2 ¥$37.5 

(99.3%) (0.7%) ........................

States with existing programs .............................................................................................. ¥$3.0 $0.0 ¥$3.0 

States without existing programs ......................................................................................... ¥$34.3 ¥$0.2 ¥$34.5 

Subtotal ......................................................................................................................... ¥$256.8 ¥$183.3 ¥$440.1 

(58.4%) (41.6%) ........................

Fuel Savings ................................................................................................................................ ........................ ........................ $80.7 

Vehicle Program .......................................................................................................................... ........................ ........................ ¥$0 

Total ............................................................................................................................... ........................ ........................ ¥$359.4 

The present value of net social costs 

(discounted back to 2006) of the 

standards through 2035, contained in 

Table VIII.F–2, is estimated to be about 

$5.4 billion (2003$). This present value 

is calculated using a social discount rate 

of three percent and the stream of 

economic welfare costs through 2035. 

We also performed an analysis using a 

seven percent social discount rate.247

Using that discount rate, the present 

value of the net social costs through 

2035 is estimated to be about $2.9 

billion (2003$). 

TABLE VIII.F–4.—NET PRESENT OF ESTIMATED SOCIAL COSTS 2007 THROUGH 2035, DISCOUNTED TO 2006 

[$million; 2003$] 

Market 

Change in 

consumer surplus 

Change in producer surplus Total 

Gasoline, U.S. .............................................................................................................................. ¥$3,115.4 

(54.5%) 

¥$2,596.2 

(45.5%) 

¥$5,711.6 

PADD 1 & 3 .......................................................................................................................... ¥$959.7 ¥$799.8 ¥$1,759.5 

PADD 2 ................................................................................................................................. ¥$1,260.4 ¥$1,050.4 ¥$2,310.8 

PADD 4 ................................................................................................................................. ¥$210.8 ¥$175.6 ¥$386.4 

PADD 5 (w/out CA) .............................................................................................................. ¥$229.5 ¥$570.4 ¥$1,254.8 

¥$684.5 ........................ ........................

Portable Fuel Containers US ....................................................................................................... ¥$754.9 

(99.3%) 

¥$5.0 

(0.7%) 

¥$759.9 

States with existing programs .............................................................................................. ¥$78.7 ¥$0.5 ¥$79.3 

States without existing programs ......................................................................................... ¥$676.2 ¥$4.5 ¥$680.7 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8525 

TABLE VIII.F–4.—NET PRESENT OF ESTIMATED SOCIAL COSTS 2007 THROUGH 2035, DISCOUNTED TO 2006—Continued 

[$million; 2003$] 

Market 

Change in 

consumer surplus 

Change in producer surplus Total 

Subtotal ......................................................................................................................... ¥$3870.3 

59.8% 

¥$2,601.2 

40.2% 

¥$6,471.6 

Fuel Savings ................................................................................................................................ $1,208.0 ........................ $1,208.0 

Vehicle Program .......................................................................................................................... ........................ ¥$91.1 ¥$91.1 

Total ...................................................................................................................................... ¥$2,662.3 ¥$2,692.3 ¥$5,354.6 

Table VIII.F–4 shows the distribution 

of total surplus losses for the cumulative 

net social costs of the rule. This analysis 

includes the estimated social costs from 

2007 through 2035, discounted to 2006 

at a 3 percent discount rate. These 

results suggest that consumers will bear 

about 60 percent of the total social costs 

associated with the PFC and gasoline 

fuel programs for that period. The 

consumer share of the NPV social costs 

is about $3,870 million, or about 60 

percent of the total. Of that loss of 

consumer surplus, about $3,115 million 

(about 80 percent) is from the gasoline 

fuel program. When the total costs of the 

program are taken into account, 

including the fuel savings and the 

vehicle program costs, the loss of 

consumer surplus decreases to about 

$2,662.3 million (about 50 percent of 

the social costs of the program). 

IX. Public Participation 

Many interested parties participated 

in the rulemaking process that 

culminates with this final rule. This 

process provided opportunity for 

submitting written public comments 

following the proposal that we 

published on March 29, 2006 (71 FR 

15804). We considered these comments 

in developing the final rule. In addition, 

we held a public hearing on the 

proposed rulemaking on April 12, 2006, 

and we have considered comments 

presented at the hearing. 

Throughout the rulemaking process, 

EPA met with stakeholders including 

representatives from the fuel refining 

and distribution industry, automobile 

industry, emission control 

manufacturing industry, gas can 

industry, environmental organizations, 

states, interests, and others. 

We have prepared a detailed 

Summary and Analysis of Comments 

document, which describes comments 

we received on the proposal and our 

response to each of these comments. 

The Summary and Analysis of 

Comments is available in the docket for 

this rule at the internet address listed 

under ADDRESSES, as well as on the 

Office of Transportation and Air Quality 

Web site (http://www.epa.gov/otaq/ 

toxics.htm#mobile). In addition, 

comments and responses for key issues 

are included throughout this preamble. 

X. Statutory and Executive Order 

Reviews 

A. Executive Order 12866: Regulatory 

Planning and Review 

Under section 3(f)(1) of Executive 

Order (EO) 12866 (58 FR 51735, October 

4, 1993), this action is an ‘‘economically 

significant regulatory action’’ because it 

is likely to ‘‘have an annual effect on the 

economy of $100 million or more’’ and 

‘‘raise novel legal and policy issues.’’

Accordingly, EPA submitted this action 

to the Office of Management and Budget 

(OMB) for review under EO 12866, and 

any changes made in response to OMB 

recommendations have been 

documented in the docket for this 

action. 

A final Regulatory Impact Analysis 

has been prepared and is available in 

the docket for this rulemaking and at the 

docket internet address listed under 

ADDRESSES. 

B. Paperwork Reduction Act 

The information collection 

requirements in this rule have been 

submitted for approval to the Office of 

Management and Budget (OMB) under 

the Paperwork Reduction Act, 44 U.S.C. 

3501 et seq. The information collection 

requirements are not enforceable until 

OMB approves them. 

The Agency will collect information 

to ensure compliance with the 

provisions in this rule. This includes a 

variety of requirements, both for vehicle 

manufacturers, fuel producers, and 

portable fuel container manufacturers. 

Information-collection requirements 

related to vehicle manufacturers are in 

EPA ICR #0783.52 (OMB Control 

Number 2060–0104); requirements 

related to fuel producers are in EPA ICR 

#1591.22 (OMB Control Number 2060–

0277); requirements related to portable 

fuel container manufacturers are in EPA 

ICR #2213.02. For vehicle and fuel 

standards, section 208(a) of the Clean 

Air Act requires that manufacturers 

provide information the Administrator 

may reasonably require to determine 

compliance with the regulations; 

submission of the information is 

therefore mandatory. We will consider 

confidential all information meeting the 

requirements of section 208(c) of the 

Clean Air Act. For portable fuel 

container standards, recordkeeping and 

reporting requirements for 

manufacturers would be pursuant to the 

authority of sections 183(e) and 111 of 

the Clean Air Act. 

As shown in Table X.B–1, the total 

annual burden associated with this rule 

is about 28,000 hours and $1,993,723, 

based on a projection of 521 

respondents. The estimated burden for 

vehicle manufacturers and fuel 

producers is a total estimate for both 

new and existing reporting 

requirements. The portable fuel 

container requirements represent our 

first regulation of these containers, so 

those burden estimates reflect only new 

reporting requirements. Burden means 

the total time, effort, or financial 

resources expended by persons to 

generate, maintain, retain, or disclose or 

provide information to or for a Federal 

agency. This includes the time needed 

to review instructions; develop, acquire, 

install, and utilize technology and 

systems for the purposes of collecting, 

validating, and verifying information, 

processing and maintaining 

information, and disclosing and 

providing information; adjust the 

existing ways to comply with any 

previously applicable instructions and 

requirements; train personnel to be able 

to respond to a collection of 

information; search data sources; 

complete and review the collection of 

information; and transmit or otherwise 

disclose the information. 


pwalker on PROD1PC71 with RULES_2
8526 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

TABLE X.B–1.—ESTIMATED BURDEN FOR REPORTING AND RECORDKEEPING REQUIREMENTS

Industry sector Number of 

respondents 

Annual burden 

hours Annual costs 

Vehicles ....................................................................................................................................... 35 770 $80,900 

Fuels ............................................................................................................................................ 476 26,592 *1,888,032 

Portable fuel containers ............................................................................................................... 10 638 24,791 

Total ...................................................................................................................................... 521 28,000 1,993,723 

*Does not include non-postage purchased services of approximately $1,988,000. 

An agency may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid OMB 

control number. The OMB control 

numbers for EPA’s regulations are listed 

in 40 CFR part 9 and 48 CFR chapter 15. 

When this ICR is approved by OMB, 

the Agency will publish a technical 

amendment to 40 CFR part 9 and 48 

CFR chapter 15 in the Federal Register 

to display the OMB control number for 

the approved information collection 

requirements contained in this final 

rule. EPA received various comments on 

the rulemaking provisions covered by 

the ICRs, but no comments on the 

paperwork burden or other information 

in the ICRs. All comments that were 

submitted to EPA are considered in the 

relevant Summary and Analysis of 

Comments, which can be found in the 

docket. 

C. Regulatory Flexibility Act (RFA), as 

Amended by the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (SBREFA), 5 U.S.C. 601 et seq. 

1. Overview 

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 (see table below); (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-forprofit enterprise which is independently 

owned and operated and is not 

dominant in its field. The following 

table provides an overview of the 

primary SBA small business categories 

potentially affected by this regulation: 

Industry Defined as small entity by SBA if less 

than or equal to: 

NAICS 

Codes a

Light-duty vehicles: 

—vehicle manufacturers (including small volume manufacturers) ....................... 1,000 employees ...................................... 336111 

—independent commercial importers ................................................................... $6 million annual sales ............................. 811111 

811112 

811198 

—alternative fuel vehicle converters ..................................................................... 100 employees ......................................... 424720 

1,000 employees ...................................... 335312 

$6 million annual sales ............................. 811198 

Gasoline fuel refiners ................................................................................................... 1500 employees b ..................................... 324110 

Portable fuel container manufacturers: 

—plastic container manufacturers ........................................................................ 500 employees ......................................... 326199 

—metal gas can manufacturers ............................................................................ 1,000 employees ...................................... 332431 

Notes: 

a North American Industrial Classification System 

bEPA has included in past fuels rulemakings a provision that, in order to qualify for EPA’s small refiner flexibilities, a refiner must also produce 

no greater than 155,000 bpcd crude capacity. 

Pursuant to section 603 of the RFA, 

EPA prepared an initial regulatory 

flexibility analysis (IRFA) for the 

proposed rule and convened a Small 

Business Advocacy Review Panel 

(SBAR Panel, or the ‘Panel’) to obtain 

advice and recommendations of 

representatives of the regulated small 

entities. A detailed discussion of the 

Panel’s advice and recommendations is 

found in the Panel Report (see Docket 

EPA–HQ–OAR–2005–0036). A summary 

of the Panel’s recommendations is 

presented at 71 FR 15922 (March 29, 

2006). 

As required by section 604 of the 

RFA, we also prepared a final regulatory 

flexibility analysis (FRFA) for today’s 

final rule. The FRFA addresses the 

issues raised by public comments on the 

IRFA, which was part of the proposal of 

this rule. The FRFA is available for 

review in Chapter 14 of the RIA and is 

summarized below. 

Key elements of our FRFA include: 

• A description of the reasons the 

Agency is considering this action, and 

the need for, and objectives of, the rule; 

• A summary of the significant issues 

raised by the public comments on the 

IRFA, a summary of the Agency’s 

assessment of those issues, and any 

changes made to the proposed rule as a 

result of those comments; 

• A description of the types and 

number of small entities to which the 

rule will apply; 

• A description of the reporting, 

recordkeeping, and other compliance 

requirements of the rule; 

• An identification, to the extent 

practicable, of all relevant Federal rules 

that may duplicate, overlap, or conflict 

with the rule; and 

• A description of the steps taken to 

minimize the significant economic 

impact on small entities consistent with 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8527 

the stated objectives of the applicable 

statutes. 

2. The Need for and Objectives of This 

Rule 

Mobile sources emit air toxics that 

can cause cancer and other serious 

health effects (Section III of this 

preamble and Chapter 1 of the 

Regulatory Impact Analysis for this rule 

describe these compounds and their 

health effects). Mobile sources 

contribute significantly to the 

nationwide risk from breathing outdoor 

sources of air toxics. In this action we 

are finalizing: Standards to limit the 

exhaust hydrocarbons from passenger 

vehicles during cold temperature 

operation; evaporative hydrocarbon 

emissions standards for passenger 

vehicles; limiting the average annual 

benzene content of gasoline; and 

hydrocarbon emissions standards for gas 

cans that would reduce evaporation, 

permeation, and spillage from these 

containers. (Detailed discussions of each 

of these programs are in sections V, VI, 

and VII of the preamble and Chapters 5, 

6, and 7 of the RIA). Standards for 

vehicles and gasoline benzene control 

are being pursued under section 

202(l)(2) of the Clean Air Act (CAA), 

which directs EPA to establish 

requirements to control emissions of 

mobile source air toxics from new motor 

vehicles and fuels. Controls for gas cans 

are being pursued under CAA section 

183(e), the provisions applying to 

consumer and commercial products. 

3. Summary of the Significant Issues 

Raised by the Public Comments 

We did not receive comments on the 

proposed flexibilities and hardships for 

small volume vehicle manufacturers or 

gas can manufacturers. We received 

comments from small refiners 

supporting the inclusion of flexibility 

provisions and hardships for small 

gasoline refiners. These comments 

generally supported additional leadtime, credit generation provisions (early 

credit generation and extra credit life for 

credits generated by or transferred to 

small refiners), and a review of the 

credit program. 

Small refiners also indicated that they 

could incur significant economic impact 

in complying with the 1.3 vol% refinery 

maximum average benzene standard. 

Our economic analysis indicates that 

most small refiners will be able to 

comply with this standard without 

incurring significant adverse economic 

impact. We also believe that allowing 

additional lead time (until July 1, 2016) 

to meet this standard ameliorates 

potential economic impact. In addition, 

we believe that any other refiners that 

still demonstrate instances of severe 

economic impact can be accommodated 

through the hardship relief provision set 

out in the regulations at § 80.1335. This 

issue is discussed in more detail in 

section VI.A.3, in chapter 14 of the final 

RIA, and in individual comment 

responses. 

We also received comments regarding 

the fact that two recent statutes use 

definitions that are not the same as the 

small refiner criteria that we proposed. 

The commenters generally stated that 

EPA should use one of the definitions 

from those statutes. However, we do not 

believe that it would be appropriate to 

change the small refiner employee count 

or crude capacity limit criteria to fit 

either of those programs’ definitions; 

rather, we believe that it is prudent to 

continue using criteria similar to our 

current and previous fuel programs. 

(Please see section VI.A.3.a.i above for 

a more detailed discussion of this 

comment and our response.) 

4. Summary of Regulated Small Entities 

The following section discusses the 

small entities directly regulated by this 

action. 

a. Highway Light-Duty Vehicles 

In addition to the major vehicle 

manufacturers, three distinct categories 

of businesses relating to highway lightduty vehicles will be covered by the 

new vehicle standards: small volume 

manufacturers (SVMs), independent 

commercial importers (ICIs), and 

alternative fuel vehicle converters. 

SVMs are companies that sell less than 

15,000 vehicles per year, as defined in 

past EPA regulations, and this status 

allows vehicle models to be certified 

under a slightly simpler certification 

process. Independent commercial 

importers are companies that hold a 

Certificate (or certificates) of Conformity 

permitting them to alter imported 

vehicles to meet U.S. emission 

standards. Alternative fuel vehicle 

converters are businesses that convert 

gasoline or diesel vehicles to operate on 

alternative fuel, and converters must 

seek a certificate for all of their vehicle 

models. From an assessment performed 

for our SBREFA Panel process, we 

continue to believe that there are about 

14 SVMs, 10 alternative fuel vehicle 

converters, and 10 ICIs. Of these, EPA 

believes 5 SVMs, 6 converters, and all 

10 ICIs would meet the small-entity 

criteria as defined by SBA (no major 

vehicle manufacturers meet the smallentity criteria). It is believed that these 

small entities comprise about 0.02 

percent of the total light-duty vehicle 

sales in the U.S. for the year 2004. 

b. Gasoline Refiners 

EPA’s current assessment is that 14 

refiners (owning 16 refineries) meet 

SBA’s criterion of having 1,500 

employees or less and our criterion of 

having a crude capacity of less than or 

equal to 155,000 bpcd. It should be 

noted that because of the dynamics in 

the refining industry (i.e., mergers and 

acquisitions) and decisions by some 

refiners to enter or leave the gasoline 

market, the actual number of refiners 

that ultimately qualify for small refiner 

status under an MSAT program could be 

different than these estimates. Current 

data further indicates that these refiners 

produce about 2.5 percent of the total 

gasoline pool. 

c. Portable Fuel Container 

Manufacturers 

EPA conducted an industry profile to 

identify the manufacturers of portable 

fuel containers—98 percent are plastic 

containers and 2 percent are metal gas 

cans. Using this industry profile, EPA 

identified 9 domestic manufacturers and 

1 foreign manufacturer. Of these 9 U.S. 

manufacturers, 8 meet the SBA 

definition of a small entity. One small 

business accounted for over 50 percent 

of the U.S. sales in 2002, and the other 

small entities comprised about 10 

percent of U.S. sales. 

5. Description of the Reporting, 

Recordkeeping, and Other Compliance 

Requirements of the Rule 

For highway light-duty vehicles, the 

reporting, recordkeeping, and 

compliance requirements prescribed for 

this category in 40 CFR 86 will be 

continued. Key among these 

requirements are certification 

requirements and provisions related to 

reporting of production, emissions 

information, flexibility use, etc. 

For any fuel control program, EPA 

must have assurance that fuel produced 

by refiners meets the applicable 

standard, and that the fuel continues to 

meet the standard as it passes 

downstream through the distribution 

system to the ultimate end user. As 

stated in section VI above, the 

recordkeeping, reporting and 

compliance provisions of the MSAT 

program will be consistent with those 

currently in place for existing fuel 

programs. These provisions include: 

The submission of refinery precompliance reports (similar to those 

required under the highway and 

nonroad diesel fuel programs), the 

submission of refinery batch reports, 

small refiner status and small refiner 

baseline applications, and retention of 


pwalker on PROD1PC71 with RULES_2
8528 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

all records for this program for five 

years. 

For portable fuel containers, 

requirements similar to those in the 

California program (such as submitting 

emissions testing information, reporting 

of certification families, and use of 

transition provisions) were proposed 

and are being finalized today. 

6. Relevant Federal Rules 

We are aware of a few other current 

or proposed Federal rules that are 

related to this rule. The primary related 

federal rules are the first MSAT rule (66 

FR 17230, March 29, 2001), the Tier 2 

Vehicle/Gasoline Sulfur rulemaking (65 

FR 6698, February 10, 2000), the fuel 

sulfur rules for highway diesel (66 FR 

5002, January 18, 2001) and nonroad 

diesel (69 FR 38958, June 29, 2004), the 

Reformulated Gasoline and Antidumping rule (59 FR 7813 and 59 FR 

7860, February 16, 1994), and the Cold 

Temperature Carbon Monoxide 

Rulemaking (57 FR 31888, July 17, 

1992). 

In addition, the Evaporative 

Emissions Streamlining Direct Final 

Rulemaking was issued on December 8, 

2005 (70 FR 72917). For portable fuel 

containers, the Occupational Safety and 

Health Administration (OSHA) has 

safety regulations for containers used in 

workplace settings. Containers that meet 

OSHA’s requirements, commonly called 

safety cans, are exempt from the 

California program, and we are thus 

exempting them from the EPA program. 

Section 1501 of the Energy Policy Act 

of 2005 requires the Agency to 

implement a Renewable Fuels Standard 

(RFS) program. Beginning in 2006, this 

program will require increasing volumes 

of renewable fuel to be used in gasoline, 

until a total of 7.5 billion gallons is 

required in 2012. The most prevalent 

renewable fuel is expected to be 

ethanol. There are a wide variety of 

potential impacts of ethanol blending on 

MSAT emissions that will be evaluated 

as part of the RFS rulemaking process. 

In general, as ethanol use increases, 

other sources of octane in gasoline can 

decrease. Depending on these changes, 

the impact on benzene emissions will 

vary. The specific effects of ethanol on 

benzene are addressed in the Regulatory 

Impact Analysis (RIA) to this rule and 

in other fuels rulemakings, such as the 

RFS rule (71 FR 55552, September 22, 

2006). 

7. Steps Taken To Minimize the 

Significant Economic Impact on Small 

Entities 

a. Significant Panel Findings 

The SBAR Panel considered many 

regulatory options and flexibilities that 

would help mitigate potential adverse 

effects on small businesses as a result of 

this rule. During the SBREFA Panel 

process, the Panel sought out and 

received comments on the regulatory 

options and flexibilities that were 

presented to Small Entity 

Representatives (SERs) and Panel 

members. The major flexibilities and 

hardship relief provisions that were 

recommended by the Panel were 

proposed and are generally being 

finalized today (for more information 

regarding the Panel process, see Section 

9 of the SBREFA Final Panel Report, 

which is available in the public docket 

for this rule). 

b. Outreach With Small Entities (and the 

Panel Process) 

As required by section 609(b) of the 

RFA as amended by SBREFA, EPA 

conducted outreach to small entities 

and convened a SBAR Panel prior to 

proposing the MSAT rule to obtain 

advice and recommendations of 

representatives of the small entities that 

potentially would be subject to the 

rule’s requirements. 

As part of the SBAR Panel process, we 

conducted outreach with 

representatives from the various small 

entities that would be affected by the 

rule. We met with these SERs to discuss 

the potential rulemaking approaches 

and potential options to decrease the 

impact of the rulemaking on their 

industries. The Panel received written 

comments from the SERs, specifically 

on regulatory alternatives that could 

help to minimize the rule’s impact on 

small businesses. 

In general, SERs representing the 

portable fuel container industry raised 

concerns on how the MSAT rule’s 

requirements would be coordinated 

with the California program and other 

requirements, and that there should be 

adequate opportunity for sell through at 

the start of the program. The small 

volume manufacturer, ICI, and vehicle 

converter SERs that participated had 

questions about the form of the new 

standards for light-duty vehicles, 

specifically testing and certification 

requirements. The gasoline refiner SERs 

generally stated that they believed that 

small refiners would face challenges in 

meeting a new standard. More 

specifically, they raised the concern that 

the rule could be very costly and 

dependence on credits may not be a 

comfortable situation; they were also 

concerned about the timing of the 

standards for this rule, given other 

upcoming fuel standards. 

The Panel agreed that EPA should 

consider the issues raised by the SERs 

(and discussions had by the Panel itself) 

and that EPA should consider 

comments on flexibility alternatives that 

would help to mitigate any negative 

impacts on small businesses. 

Alternatives discussed throughout the 

Panel process included those offered in 

previous or current EPA rulemakings, as 

well as alternatives suggested by SERs 

and Panel members, and the Panel 

recommended that all be considered in 

the development of the rule. 

A summary of the Panel’s 

recommendations, what the Agency 

proposed, and what is being finalized 

today is discussed below. A detailed 

discussion of the regulatory alternatives 

and hardship provisions discussed and 

recommended by the Panel can be 

found in the SBREFA Final Panel 

Report. A complete discussion of the 

transition and hardship provisions that 

are being finalized today can be found 

in Sections V, VI, and VII (vehicle, fuels, 

and portable fuel container sections) of 

this preamble. 

c. Small Business Flexibilities 

i. Highway Light-Duty Vehicles 

(a) Highway Light-Duty Vehicle 

Flexibilities 

For certification purposes (and for the 

sake of simplicity for Panel discussions 

regarding flexibility options), SVMs 

include ICIs and alternative fuel vehicle 

converters since they sell less than 

15,000 vehicles per year. Similar to the 

flexibility provisions implemented in 

the Tier 2 rule, the Panel recommended 

that we allow SVMs (includes all 

vehicle small entities that would be 

affected by this rule, which are the 

majority of SVMs) the following 

flexibility options for meeting cold 

temperature NMHC standards and 

evaporative emission standards: 

Cold NMHC Standards—The Panel 

recommended that SVMs simply 

comply with the standards with 100 

percent of their vehicles during the last 

year of the four-year phase-in period. 

For example, if the standard for lightduty vehicles and light light-duty trucks 

(0 to 6,000 pounds GVWR) were to 

begin in 2010 and end in 2013 (25%, 

50%, 75%, 100% phase-in over four 

years), the SVM provision would be 100 

percent in 2013. If the standard for 

heavy light-duty trucks and mediumduty passenger vehicles (greater than 

6,000 pounds GVWR) were to start in 

2012 (25%, 50%, 75%, 100% phase-in 

over four years), the SVM provision 

would be 100 percent in 2015. 

Evaporative Emission Standards—

The Panel recommended that since the 

evaporative emissions standards will 

not have phase-in years, we allow SVMs 

to simply comply with standards during 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8529 

the third year of the program (we have 

implemented similar provisions in past 

rulemakings). For a 2009 start date for 

light-duty vehicles and light light-duty 

trucks, SVMs would need to meet the 

evaporative emission standards in 2011. 

For a 2010 implementation date for 

heavy light-duty trucks and mediumduty passenger vehicles, SVMs would 

need to comply in 2012. 

We proposed the recommendations 

given by the Panel for these small 

business entities. We agree that SVMs 

may need additional lead time 

flexibility and the new cold NMHC 

standards for LDVs and LLDTs will 

begin in model year 2010 and end in 

model year 2013, therefore we are 

finalizing (as proposed) that the SVM 

provision would be 100 percent in 

model year 2013. Also, since the new 

cold NMHC standard for HLDTs and 

MDPVs will begin in 2012, we are 

finalizing as proposed that the SVM 

provision will be 100 percent in model 

year 2015. We believe that the Panel’s 

recommendation for flexibilities with 

regard to the evaporative emission 

standards is reasonable. Therefore, for a 

2009 model year start date for LDVs and 

LLDTs we proposed, and are finalizing, 

that SVMs meet the evaporative 

emission standards in model year 2011. 

For a model year 2010 implementation 

date for HLDTs and MDPVs, we 

proposed and are finalizing that SVMs 

comply in model year 2012. (Please see 

section V.E.1 for a greater discussion on 

flexibility provisions for small volume 

manufacturers.) 

(b) Highway Light-Duty Vehicle 

Hardships 

In addition, the Panel recommended 

that hardship flexibility provisions be 

extended to SVMs for the cold 

temperature VOC and evaporative 

emission standards. The provisions that 

the Panel recommended are: 

SVMs would be allowed to apply 

(EPA would need to review and approve 

application) for up to an additional 2 

years to meet the 100 percent phase-in 

requirements for cold VOC and the 

delayed requirement for evaporative 

emissions. Appeals for such hardship 

relief must be made in writing, must be 

submitted before the earliest date of 

noncompliance, must include evidence 

that the noncompliance will occur 

despite the manufacturer’s best efforts to 

comply, and must include evidence that 

severe economic hardship will be faced 

by the company if the relief is not 

granted. 

We proposed the Panel-recommended 

flexibility and hardship provisions 

described above, and we are finalizing 

these provisions in this action. (Please 

see section V.E.2 for a greater discussion 

on the hardship provisions for small 

volume manufacturers.) 

(c) Special Provisions for Independent 

Commercial Importers (ICIs) 

Although the SBAR panel did not 

specifically recommend it, we proposed, 

and are finalizing, that ICIs may 

participate in the averaging, banking, 

and trading (ABT) program for cold 

temperature NMHC fleet average 

standards, but with appropriate 

constraints to ensure that fleet averages 

will be met. The existing regulations for 

ICIs specifically prohibit ICIs from 

participating in emission-related 

averaging, banking, and trading 

programs unless specific exceptions are 

provided. However, an exception for 

ICIs to participate in an averaging, 

banking, and trading program was made 

for the Tier 2 NOX fleet average 

standards, and today we are finalizing 

as proposed to apply a similar exception 

for the cold temperature NMHC fleet 

average standards. We also proposed, 

and are finalizing, that ICIs not be 

allowed to utilize the deficit carryforward provisions of the ABT program. 

(Please see section V.E.3 for a greater 

discussion on the hardship provisions 

for small volume manufacturers.) 

ii. Gasoline Refiners 

(a) Gasoline Refiner Flexibilities 

The Panel recommended that EPA 

propose certain provisions to encourage 

early compliance with lower benzene 

standards. The Panel recommended that 

EPA propose that small refiners be 

afforded the following flexibility 

options to help mitigate the impacts on 

small refiners: 

Delay in Standards—The Panel 

recommended that a four-year delay 

period be proposed for small refiners (in 

order to allow for a review of the ABT 

program, as discussed below, to occur 

one year after implementation but still 

roughly three years prior to the small 

refiner compliance deadline). It was 

noted by the small refiners that three 

years are generally needed for small 

refiners to obtain financing and perform 

engineering and construction. The Panel 

was also in support of allowing for 

refinery expansion within the delay 

option, and recommended that refinery 

expansion be provided for in the rule. 

Early ABT Credits—The Panel 

recommended that small refiners be 

eligible to generate early credits if they 

take some steps to meet the 0.62 vol% 

benzene requirement prior to the 

effective date of the standard. 

Depending on the start date of the 

program, and coupled with the four-year 

delay option for small refiners, a small 

refiner could have a total credit 

generation period of five to seven years. 

The Panel was also in support of 

allowing refiners (small, as well as nonsmall, refiners) to generate credits for 

reductions to their benzene emissions 

levels, rather than credits only for 

meeting the 0.62 vol% benzene standard 

that is set by the rule. 

ABT Program Review—The Panel 

recommended a review of the credit 

trading program and small refiner 

flexibility options one year after the 

general program starts. The Panel 

further recommended that the review 

could take into account the number of 

early credits generated, as well as the 

number of credits generated and sold 

during the first year of the program. The 

Panel recommended that if the review 

were to conclude that changes to either 

the program or the small refiner 

provisions were necessary, EPA should 

also consider some of the suggestions 

provided by the small refiners (their 

comments are located in Appendix E of 

the Final Panel Report), such as: 

• The general MSAT program should 

require pre-compliance reporting 

(similar to EPA’s highway and nonroad 

diesel rules); 

• Following the review, EPA should 

revisit the small refiner provisions if it 

is found that the credit trading market 

does not exist, or if credits are only 

available at a cost that would not allow 

small refiners to purchase credits for 

compliance; 

• The review should offer ways either 

to help the credit market, or help small 

refiners gain access to credits (e.g., EPA 

could ‘create’ credits to introduce to the 

market, EPA could impose additional 

requirements to encourage trading with 

small refiners, etc.). 

• In addition, the Panel 

recommended that EPA consider in this 

rulemaking establishing an additional 

hardship provision to assist those small 

refiners that cannot comply with the 

MSAT with a viable credit market. (This 

suggested hardship provision was also 

suggested by the small refiners in their 

comments, located in Appendix E of the 

Final Panel Report). This hardship 

provision would address concerns that, 

for some small refineries, compliance 

may be technically feasible only through 

the purchase of credits and it may not 

be economically feasible to purchase 

those credits. This flexibility would be 

provided to a small refiner on a case-bycase basis following the review and 

based on a summary, by the refiner, of 

technical or financial infeasibility (or 

some other type of similar situation that 

would render its compliance with the 

standard difficult). This hardship 


pwalker on PROD1PC71 with RULES_2
8530 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

provision might include further delays 

and/or a slightly relaxed standard on an 

individual refinery basis for a duration 

of two years; in addition, this provision 

might allow the refinery to request, and 

EPA grant, multiple extensions of the 

flexibility until the refinery’s material 

situation changes. The Panel also stated 

that it understood that EPA may need to 

modify or rescind this provision, should 

it be implemented, based on the results 

of the program review. 

We proposed and are finalizing the 

recommended four-year period of 

additional lead time (until January 1, 

2015, four years after the general 

program start date) for compliance with 

the 0.62 vol% benzene standard. With 

respect to the 0.62 vol% standard, we 

agreed that a four-year period of 

additional lead time for small refiners 

would provide these refiners with 

roughly three years of lead time 

following the review of the credit 

program to complete capital projects if 

necessary or desirable to meet the 0.62 

vol% benzene standard rather than to 

rely on credits. Further, we are 

finalizing an additional 18 months of 

lead time for small refiners to comply 

with the 1.3 vol% maximum average 

benzene standard (similar to 18-month 

lead-time afforded under the general 

program), until July 1, 2016. We 

likewise believe that this additional 

lead-time will provide small refiners 

with appropriate additional opportunity 

to raise capital and complete projects 

necessary to comply with the maximum 

average benzene standard. 

With regard to credits, we proposed 

the Panel’s recommendation that small 

refiners that take steps to meet the 0.62 

vol% benzene requirement prior to 

January 1, 2015 would be eligible to 

generate early credits, and that credits 

remain available for small refiners for an 

additional amount of time. Early credit 

generation opportunities will provide 

more credits for the MSAT ABT 

program and will help to achieve the air 

quality goals of the MSAT program 

earlier than otherwise required. 

Therefore, we are finalizing an early 

credit generation provision for small 

refiners. Further, we believe that some 

incentive to trade credits with small 

refiners is warranted to help ensure that 

sufficient credits are available. 

Therefore, as stated above in section 

VI.A.3, we are finalizing the proposed 

provision that standard credits that are 

traded to, and ultimately used by, small 

refiners have an additional credit life of 

two years beyond the limit that is 

otherwise allowed. 

We proposed that we would perform 

a review of the ABT program (and thus, 

the small refiner flexibility options) by 

2012, one year after the general program 

begins. We are finalizing this provision 

today. In part to support this review, we 

are also requiring that refiners submit 

pre-compliance reports. If, following the 

review, EPA finds that the credit market 

is not adequate to support the small 

refiner provisions, we will revisit the 

provisions to determine whether or not 

they should be altered or whether EPA 

can assist the credit market (and small 

refiners’ access to credits) to enable a 

successful ABT program. We are 

finalizing an additional hardship 

provision to assist small refiners if it is 

found that some small refiners still 

cannot comply with the 0.62 vol% 

benzene standard even with a viable 

credit market. The provision will only 

be available following the ABT program 

review and will only be afforded to 

small refiners on a case-by-case basis, 

and is in addition to the general refiner 

hardship provisions that are available to 

all refiners. Please see section 

VI.A.3.a.iii of this preamble for a more 

detailed discussion of this hardship 

provision. 

(b) Gasoline Refiner Hardships 

During the Panel process, we stated 

that we intended to propose the extreme 

unforeseen circumstances hardship and 

extreme hardship provisions (for all 

gasoline refiners and importers), similar 

to those in prior fuels programs. A 

hardship based on extreme unforeseen 

circumstances is intended to provide 

short-term relief due to unanticipated 

circumstances beyond the control of the 

refiner, such as a natural disaster or a 

refinery fire; an extreme hardship is 

intended to provide short-term relief 

based on extreme circumstances (e.g., 

extreme financial problems, extreme 

operational or technical problems, etc.) 

that impose extreme hardship and thus 

significantly affect a refiner’s ability to 

comply with the program requirements 

by the applicable dates. The Panel 

agreed with the proposal of such 

provisions and recommended that we 

include them in the MSAT rulemaking; 

thus, we proposed these provisions. 

We are finalizing the extreme 

hardship provision and the extreme 

unforeseen circumstances hardship 

provision with some modifications, as 

this final rule includes a 1.3 vol% 

refinery maximum average benzene 

standard. As discussed in more detail in 

section VI.A.3.b, relief will be granted 

on a case-by-case basis; however, it may 

differ somewhat depending upon 

whether a refiner applies for hardship 

relief for the 0.62 vol% benzene 

standard or for the 1.3 vol% refinery 

maximum average standard (while a 

refiner may apply for relief from both 

standards, hardship relief will be 

addressed independently for each 

standard). This is partly due to the fact 

that a refiner may use credits to meet 

the 0.62 vol% benzene standard, but 

credits cannot be used for compliance 

with the 1.3 vol% refinery maximum 

average. 

Extreme hardship circumstances 

could exist based on severe economic or 

physical lead time limitations of the 

refinery to comply with the required 

benzene standards at the start of the 

program. For relief from the 0.62 vol% 

benzene standard in extreme hardship 

circumstances, relief will likely be in 

the form of an extension of the one-year 

deficit carry-forward allowed by the 

rule. Relief from the 1.3 vol% refinery 

maximum average benzene standard in 

extreme hardship circumstances would 

consist of additional time to comply 

with the 1.3 vol% refinery maximum 

average. Refiners must apply by 

January 1, 2008 (or, January 1, 2013 for 

approved small refiners) for extreme 

hardship relief from the 1.3 vol% 

refinery maximum average standard, as 

this provision is intended to address 

unusual circumstances that should be 

apparent now, or well before the 

standard takes effect. 

The extreme unforeseen 

circumstances hardship is available to 

both refiners and importers, and is 

intended to provide relief in extreme 

and unusual circumstances outside a 

refiner or importer’s control that could 

not have been avoided through the 

exercise of due diligence. Hardship 

relief for the 0.62 vol% benzene 

standard will allow a deficit to be 

carried forward for an extended, but 

limited, time period (more than the one 

year allowed by the rule). Relief from 

the 1.3 vol% refinery maximum average 

benzene standard based on unforeseen 

circumstances will be granted on a caseby-case basis, following an assessment 

of the hardship application, and would 

generally be in the form of an extension 

of time to comply with the standard. 

iii. Portable Fuel Containers 

(a) Portable Fuel Container Flexibilities 

Since nearly all portable fuel 

container manufacturers are small 

entities and they account for about 60 

percent of sales, the Panel planned to 

extend the flexibility options to all 

portable fuel container manufacturers. 

Moreover, implementation of the 

program would be much simpler by 

doing so. The recommended flexibilities 

are the following: 

Design Certification—The Panel 

recommended that we propose to permit 

portable fuel container manufacturers to 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8531 

use design certification in lieu of 

running any or all of the durability 

aging cycles. Manufacturers could 

demonstrate the durability of their gas 

cans based in part on emissions test data 

from designs using the same permeation 

barriers and materials. Under a designbased certification program, a 

manufacturer would provide evidence 

in the application for certification that 

their container would meet the 

applicable standards based on its design 

(e.g., use of a particular permeation 

barrier). The manufacturer would 

submit adequate engineering and other 

information about its individual design 

such that EPA could determine that the 

emissions performance of their 

individual design would not be 

negatively impacted by slosh, UV 

exposure, and/or pressure cycling 

(whichever tests the manufacturer is 

proposing to not run prior to emissions 

testing). 

Broaden Certification Families—This 

approach would relax the criteria used 

to determine what constitutes a 

certification family. It would allow 

small businesses to limit their 

certification families (and therefore their 

certification testing burden), rather than 

testing all of the various size containers 

in a manufacturer’s product line. Some 

small entities may be able to put all of 

their various size containers into a 

single certification family. 

Manufacturers would then certify their 

containers using the ‘‘worst case’’

configuration within the family. To be 

grouped together, containers would 

need to be manufactured using the same 

materials and processes even though 

they are of different sizes. 

Additional Lead-time—Since it may 

take additional time for the portable fuel 

container SERs to gather information to 

fully evaluate whether or not additional 

lead-time is needed beyond the 2009 

start date, the Panel recommended that 

we discuss lead-time in the proposal 

and request comments on the need for 

additional lead-time to allow 

manufacturers to ramp up to a 

nationwide program. 

Product Sell-through—As with past 

rulemakings for other source sectors, the 

Panel recommended that EPA propose 

to allow normal sell through of portable 

fuel containers as long as manufacturers 

do not create stockpiles of 

noncomplying portable fuel containers 

prior to the start of the program. 

We proposed these Panelrecommended flexibilities for all 

portable fuel container manufacturers. 

As stated above, we did not receive any 

comments on the proposed flexibilities, 

and are therefore finalizing them as 

proposed (the flexibility provisions are 

incorporated into the program 

requirements described earlier in 

sections VII.B through VII.D). 

(b) Portable Fuel Container Hardships 

The Panel recommended that EPA 

propose two types of hardship programs 

for small portable fuel container 

manufacturers. 

The first would allow small 

manufacturers to petition EPA for 

limited additional lead-time to comply 

with the standards. A manufacturer 

would have to demonstrate that it has 

taken all possible business, technical, 

and economic steps to comply, but the 

burden of compliance costs would have 

a significant adverse effect on the 

company’s solvency. Hardship relief 

may include requirements for interim 

emission reductions. 

The second hardship provision would 

permit small manufacturers to apply for 

hardship relief if circumstances outside 

their control cause the failure to comply 

(i.e., supply contract broken by parts 

supplier) and if failure to sell the subject 

containers would have a major impact 

on the company’s solvency. The terms 

and timeframe of the relief would 

depend on the specific circumstances of 

the company and the situation involved. 

We proposed, and are finalizing, the 

above hardship provisions for portable 

fuel container manufacturers. These 

entities could, on a case-by-case basis, 

face hardship, and we are finalizing 

these provisions to provide what could 

prove to be needed safety valves for 

these entities. For both types of 

hardship provisions, the length of the 

hardship relief will be established, 

during the initial review, for not more 

than one year and will be reviewed 

annually thereafter as needed. (Please 

see section VII.F for a more detailed 

discussion of these hardship 

provisions.) 

As required by section 212 of 

SBREFA, EPA also is preparing a Small 

Entity Compliance Guide to help small 

entities comply with this rule. The 

compliance guide will be available on 

the Web at: http://www.epa.gov/otaq/ 

toxics.htm. 

D. Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA), Public 

Law 104–4, establishes requirements for 

Federal agencies to assess the effects of 

their regulatory actions on State, local, 

and tribal governments and the private 

sector. Under section 202 of the UMRA, 

EPA generally must prepare a written 

statement, including a cost-benefit 

analysis, for proposed and final rules 

with ‘‘Federal mandates’’ that may 

result in expenditures to State, local, 

and tribal governments, in the aggregate, 

or to the private sector, of $100 million 

or more in any one year. Before 

promulgating an EPA rule for which a 

written statement is needed, section 205 

of the UMRA generally requires EPA to 

identify and consider a reasonable 

number of regulatory alternatives and 

adopt the least costly, most costeffective, or least burdensome 

alternative that achieves the objectives 

of the rule. The provisions of section 

205 do not apply when they are 

inconsistent with applicable law. 

Moreover, section 205 allows EPA to 

adopt an alternative other than the least 

costly, most cost-effective, or least 

burdensome alternative if the 

Administrator publishes with the final 

rule an explanation of why that 

alternative was not adopted. 

Before EPA establishes any regulatory 

requirements that may significantly or 

uniquely affect small governments, 

including tribal governments, it must 

have developed under section 203 of the 

UMRA a small government agency plan. 

The plan must provide for notifying 

potentially affected small governments, 

enabling officials of affected small 

governments to have meaningful and 

timely input in the development of EPA 

regulatory proposals with significant 

federal intergovernmental mandates, 

and informing, educating, and advising 

small governments on compliance with 

the regulatory requirements. 

This rule contains no federal 

mandates for state, local, or tribal 

governments as defined by the 

provisions of Title II of the UMRA. The 

rule imposes no enforceable duties on 

any of these governmental entities. 

Nothing in the rule would significantly 

or uniquely affect small governments. 

EPA has determined that this rule 

contains federal mandates that may 

result in expenditures of more than 

$100 million to the private sector in any 

single year. EPA believes that the final 

rule represents the least costly, most 

cost-effective approach to achieve the 

statutory requirements of the rule. The 

costs and benefits associated with the 

final rule are discussed above and in the 

Regulatory Impact Analysis, as required 

by the UMRA. 

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 


pwalker on PROD1PC71 with RULES_2
8532 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

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. 

Although section 6 of Executive Order 

13132 does not apply to this rule, EPA 

did consult with representatives of 

various State and local governments in 

developing this rule. EPA has also 

consulted representatives from 

STAPPA/ALAPCO, which represents 

state and local air pollution officials. 

In the spirit of Executive Order 13132, 

and consistent with EPA policy to 

promote communications between EPA 

and State and local governments, EPA 

specifically solicited comment on the 

proposed rule from State and local 

officials. 

F. Executive Order 13175: Consultation 

and Coordination With Indian Tribal 

Governments 

Executive Order 13175, entitled 

‘‘Consultation and Coordination with 

Indian Tribal Governments’’ (65 FR 

67249, November 9, 2000), requires EPA 

to develop an accountable process to 

ensure ‘‘meaningful and timely input by 

tribal officials in the development of 

regulatory policies that have tribal 

implications.’’

This final rule does not have tribal 

implications as specified in Executive 

Order 13175. This rule will be 

implemented at the Federal level and 

impose compliance costs only on 

vehicle manufacturers (includes 

alternative fuel vehicle converters and 

ICIs), fuel producers, and portable 

gasoline container manufacturers. Tribal 

governments will be affected only to the 

extent they purchase and use regulated 

vehicles, fuels, and portable gasoline 

containers. Thus, Executive Order 

13175 does not apply to this rule. 

G. Executive Order 13045: Protection of 

Children From Environmental Health 

and Safety Risks 

Executive Order 13045, ‘‘Protection of 

Children from Environmental Health 

Risks and Safety Risks’’ (62 FR 19885, 

April 23, 1997) applies to any rule that 

(1) is determined to be ‘‘economically 

significant’’ as defined under Executive 

Order 12866, and (2) concerns an 

environmental health or safety risk that 

EPA has reason to believe may have a 

disproportionate effect on children. If 

the regulatory action meets both criteria, 

section 5–501 of the Order directs the 

Agency to evaluate the environmental 

health or safety effects of the planned 

rule on children, and explain why the 

planned regulation is preferable to other 

potentially effective and reasonably 

feasible alternatives considered by the 

Agency. 

This final rule is subject to the 

Executive Order because it is an 

economically significant regulatory 

action as defined by Executive Order 

12866, and we believe that by 

addressing the environmental health or 

safety risk this action may have a 

disproportionate beneficial effect on 

children. Accordingly, we have 

evaluated the potential environmental 

health or safety effects of VOC and 

toxics emissions from gasoline-fueled 

mobile sources and gas cans on 

children. The results of this evaluation 

are described below and contained in 

sections III and IV. 

Exposure to a number of the 

compounds addressed in this rule may 

have a disproportionate effect on 

children. First, exposure to carcinogens 

that cause cancer through a mutagenic 

mode of action during childhood 

development may have an 

incrementally disproportionate impact. 

Because of their small size, increased 

activity, and increased ventilation rates 

compared to adults, children may have 

greater exposure to these compounds in 

the ambient air, on a unit body weight 

basis. Moreover, for PM, because 

children’s breathing rates are higher, 

their exposures may be higher and 

because their respiratory systems are 

still developing, children may be more 

susceptible to problems from exposure 

to respiratory irritants. 

H. Executive Order 13211: Actions That 

Significantly Affect Energy Supply, 

Distribution, or Use 

This rule is not a ‘‘significant energy 

action’’ as defined in Executive Order 

13211, ‘‘Actions Concerning Regulations 

That Significantly Affect Energy Supply, 

Distribution, or Use’’ (66 FR 28355 (May 

22, 2001)) because it is not likely to 

have a significant adverse effect on the 

supply, distribution, or use of energy. 

The gasoline benzene provisions of the 

final rule will shift about 12,500 barrels 

per day of benzene from the gasoline 

market to the petrochemical market. 

This volume represents about 0.1 

percent of nationwide gasoline 

production. The actual impact of the 

rule on the gasoline market, however, is 

likely to be less due to offsetting 

changes in the production of 

petrochemicals, as well as expected 

growth in the petrochemical market 

absent this rule. The major sources of 

benzene for the petrochemical market 

other than reformate from gasoline 

production are also derived from 

gasoline components or gasoline 

feedstocks. Consequently, the expected 

shift toward more benzene production 

from reformate due to this final rule will 

be offset by less benzene produced from 

other gasoline feedstocks. 

The rule will require refiners to use a 

small additional amount of energy in 

processing gasoline to reduce benzene 

levels, primarily due to the increased 

energy used for benzene extraction. Our 

modeling of increased energy use 

indicates that the process energy used 

by refiners to produce gasoline would 

increase by about 0.6 percent (or, sixtenths of a percent). Overall, we believe 

that the final rule will result in no 

significant adverse energy impacts. 

The gasoline benzene provisions will 

not affect the current gasoline 

distribution practices. 

We discuss our analysis of the energy 

and supply effects of the gasoline 

benzene standard further in section VIII 

of this preamble and in Chapter 9 of the 

Regulatory Impact Analysis. 

The fuel supply and energy effects 

described above will be offset 

substantially by the positive effects on 

gasoline supply and energy use of the 

gas can standards also promulgated in 

today’s action. These provisions will 

greatly reduce the gasoline lost to 

evaporation from gas cans. This will in 

turn reduce the demand for gasoline, 

increasing the gasoline supply and 

reducing the energy used in producing 

gasoline. 

I. National Technology Transfer 

Advancement Act 

As noted in the proposed rule, 

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. The NTTAA directs EPA to 

provide Congress, through OMB, 

explanations when the Agency decides 

not to use available and applicable 

voluntary consensus standards. 

This rulemaking involves technical 

standards. Therefore, the Agency 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8533 

conducted a search to identify 

potentially applicable voluntary 

consensus standards. However, we 

identified no such standards. Therefore, 

for the cold temperature NMHC 

standards, EPA will use the existing 

EPA cold temperature CO test 

procedures (manufacturers currently 

measure hydrocarbon emissions with 

current cold CO test procedures), which 

were adopted in a previous EPA 

rulemaking (1992). The fuel standards 

referenced in today’s rule involve the 

measurement of gasoline fuel 

parameters. The measurement standards 

for gasoline fuel parameters referenced 

in today’s rulemaking are governmentunique standards that were developed 

by the Agency through previous 

rulemakings. Both the cold temperature 

CO test procedures and the 

measurement standards for gasoline fuel 

parameters have served the Agency’s 

emissions control goals well since their 

implementation and have been well 

accepted by industry. For gas cans, EPA 

is promulgating new procedures for 

measuring hydrocarbon emissions. 

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. 

The final rule will reduce VOC and 

toxic emissions from gasoline-fueled 

mobile sources (particularly highway 

light-duty vehicles) and gas cans, and 

thus, it will decrease the amount of air 

pollution to which the entire population 

is exposed. The rule will also reduce 

PM emissions from highway light-duty 

vehicles. EPA evaluated the population 

residing close to high traffic density 

(near roadways), and we found that this 

population has demographic differences 

from the general population, including 

a greater fraction of lower income and 

minority residents. The rule will reduce 

emissions from roadways. Since those 

living near roadways are more likely to 

be lower income and minority residents, 

this population will have a 

disproportionate benefit from the rule. 

Thus, this rule does not have a 

disproportionately high adverse human 

health or environmental effect on 

minority populations. 

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 before the rule is published in the 

Federal Register. This rule is a ‘‘major 

rule’’ as defined by 5 U.S.C. 804(2). 

XI. Statutory Provisions and Legal 

Authority 

Statutory authority for the fuels 

controls in this final rule can be found 

in sections 202 and 211(c) of the Clean 

Air Act (CAA), as amended, 42 U.S.C. 

7521 and 7545(c). Additional support 

for the procedural and enforcementrelated aspects of the fuel controls in 

this final rule, including the 

recordkeeping requirements, come from 

sections 114(a) and 301(a) of the CAA, 

42 U.S.C. 7414(a) and 7601(a). 

Statutory authority for the vehicle 

controls in this final rule can be found 

in sections 202, 206, 207, 208, and 301 

of the CAA, 42 U.S.C. 7521, 7525, 7541, 

7542 and 7601. 

Statutory authority for the portable 

fuel container controls in this final rule 

can be found in sections 183(e) and 111 

of the CAA, 42 U.S.C. sections 7511b(e) 

and 7411. 

List of Subjects 

40 CFR Part 59 

Environmental protection, 

Administrative practice and procedure, 

Confidential business information, 

Incorporation by reference, Labeling, 

Consumer or Commercial Products 

pollution, Penalties, Reporting and 

recordkeeping requirements. 

40 CFR Part 80 

Environmental protection, Air 

pollution control, Fuel additives, 

Gasoline, Imports, Incorporation by 

reference, Labeling, Motor vehicle 

pollution, Penalties, Reporting and 

recordkeeping requirements. 

40 CFR Part 85 

Environmental protection, 

Administrative practice and procedure, 

Confidential business information, 

Imports, Labeling, Motor vehicle 

pollution, Penalties, Reporting and 

recordkeeping requirements, Research, 

Warranties. 

40 CFR Part 86 

Environmental protection, 

Administrative practice and procedure, 

Confidential business information, 

Incorporation by reference, Labeling, 

Motor vehicle pollution, Penalties, 

Reporting and recordkeeping 

requirements. 

Dated: February 9, 2007. 

Stephen L. Johnson, 

Administrator. 

■ For the reasons set forth in the 

preamble, parts 59, 80, 85 and 86 of title 

40 of the Code of Federal Regulations 

are amended as follows: 

PART 59—NATIONAL VOLATILE 

ORGANIC COMPOUND EMISSION 

STANDARDS FOR CONSUMER AND 

COMMERCIAL PRODUCTS 

■ 1. The authority citation for part 59 is 

revised to read as follows: 

Authority: 42 U.S.C. 7414 and 7511b(e). 

Subpart E—[Added and Reserved] 

■ 2a. Add and reserve Subpart E. 

■ 2b. A new Subpart F is added to part 

59 to read as follows: 

Subpart F—Control of Evaporative 

Emissions From New and In-Use Portable 

Fuel Containers 

Overview and Applicability 

Sec. 

59.600 Does this subpart apply for my 

products? 

59.601 Do the requirements of this subpart 

apply to me? 

59.602 What are the general prohibitions 

and requirements of this subpart? 

59.603 How must manufacturers apply 

good engineering judgment? 

59.605 What portable fuel containers are 

excluded from this subpart’s 

requirements? 

59.607 Submission of information. 

Emission Standards and Related 

Requirements 

59.611 What evaporative emission 

requirements apply under this subpart? 

59.612 What emission-related warranty 

requirements apply to me? 

59.613 What operation and maintenance 

instructions must I give to buyers? 

59.615 How must I label and identify the 

portable fuel containers I produce? 


pwalker on PROD1PC71 with RULES_2
8534 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

Certifying Emission Families 

59.621 Who may apply for a certificate of 

conformity? 

59.622 What are the general requirements 

for obtaining a certificate of conformity 

and producing portable fuel containers 

under it? 

59.623 What must I include in my 

application? 

59.624 How do I amend my application for 

certification? 

59.625 How do I select emission families? 

59.626 What emission testing must I 

perform for my application for a 

certificate of conformity? 

59.627 How do I demonstrate that my 

emission family complies with 

evaporative emission standards? 

59.628 What records must I keep and what 

reports must I send to EPA? 

59.629 What decisions may EPA make 

regarding my certificate of conformity? 

59.630 EPA testing. 

59.650 General testing provisions. 

59.652 Other procedures. 

59.653 How do I test portable fuel 

containers? 

Special Compliance Provisions 

59.660 Exemption from the standards. 

59.662 What temporary provisions address 

hardship due to unusual circumstances? 

59.663 What are the provisions for 

extending compliance deadlines for 

manufacturers under hardship? 

59.664 What are the requirements for 

importing portable fuel containers into 

the United States? 

Definitions and Other Reference Information 

59.680 What definitions apply to this 

subpart? 

59.685 What symbols, acronyms, and 

abbreviations does this subpart use? 

59.695 What provisions apply to 

confidential information? 

59.697 State actions. 

59.698 May EPA enter my facilities for 

inspections? 

59.699 How do I request a hearing? 

Subpart F—Control of Evaporative 

Emissions From New and In-Use 

Portable Fuel Containers 

Overview and Applicability 

§ 59.600 Does this subpart apply for my 

products? 

(a) Except as provided in § 59.605 and 

paragraph (b) of this section, the 

regulations in this subpart F apply for 

all portable fuel containers (defined in 

§ 59.680) that are manufactured on or 

after January 1, 2009. 

(b) See § 59.602 (a) and (b) to 

determine how to apply the provisions 

of this subpart for containers that were 

manufactured before January 1, 2009. 

§ 59.601 Do the requirements of this 

subpart apply to me? 

(a) Unless specified otherwise in this 

subpart, the requirements and 

prohibitions of this subpart apply to all 

manufacturers and importers of portable 

fuel containers. Certain prohibitions in 

§ 59.602 apply to all other persons. 

(b) New portable fuel containers that 

are subject to the emissions standards of 

this part must be covered by a certificate 

of conformity that is issued to the 

manufacturer of the container. If more 

than one person meets the definition of 

manufacturer for a portable fuel 

container, see § 59.621 to determine if 

you are the manufacturer who may 

apply for and receive a certificate of 

conformity. 

(c) Unless specifically noted 

otherwise, the term ‘‘you’’ means 

manufacturers, as defined in § 59.680. 

§ 59.602 What are the general prohibitions 

and requirements of this subpart? 

(a) General prohibition for 

manufacturers and importers. No 

manufacturer or importer may sell, offer 

for sale, introduce or deliver for 

introduction into commerce in the 

United States, or import any new 

portable fuel container that is subject to 

the emissions standards of this subpart 

and is manufactured after December 31, 

2008 unless it is covered by a valid 

certificate of conformity, it is labeled as 

required, and it complies with all of the 

applicable requirements of this subpart, 

including compliance with the 

emissions standards for its useful life. 

After June 30, 2009, no manufacturer or 

importer may sell, offer for sale, 

introduce or deliver into commerce in 

the United States, or import any new 

portable fuel container that was 

manufactured prior to January 1, 2009 

unless it meets the requirements of this 

subpart. 

(b) General prohibition for wholesale 

distributors. No wholesale distributor 

may sell, offer for sale, or distribute any 

portable fuel container in the United 

States that is subject to the emissions 

standards of this subpart and is 

manufactured after December 31, 2008 

unless it is covered by a valid certificate 

of conformity and is labeled as required. 

After December 31, 2009, no wholesale 

distributor may sell, offer for sale, or 

distribute in the United States any 

portable fuel container that was 

manufactured prior to January 1, 2009 

unless it meets the requirements of this 

subpart. After December 31, 2009, all 

new portable fuel containers shall be 

deemed to be manufactured after 

December 31, 2008 unless they are in 

retail inventory. 

(c) Reporting and recordkeeping. (1) 

You must keep the records and submit 

the reports specified in § 59.628. 

Records must be retained for at least 5 

years from the date of manufacture or 

importation and must be supplied to 

EPA upon request. 

(2) No person may alter, destroy, or 

falsify any record or report required by 

this subpart. 

(d) Testing and access to facilities. 

You may not keep us from entering your 

facility to observe tests or inspect 

facilities if we are authorized to do so. 

Also, you must perform the tests we 

require (or have the tests done for you). 

Failure to perform this testing is 

prohibited. 

(e) Warranty. You may not fail to 

offer, provide notice of, or honor the 

emissions warranty required under this 

subpart. 

(f) Replacement components. No 

person may sell, offer for sale, introduce 

or deliver for introduction into 

commerce in the United States, import, 

or install any replacement component 

for portable fuel containers subject to 

the standards of this subpart where the 

component has the effect of disabling, 

bypassing, or rendering inoperative the 

emissions controls of the containers. 

(g) Violations. If a person violates any 

prohibition or requirement of this 

subpart or the Act concerning portable 

fuel containers, it shall be considered a 

separate violation for each portable fuel 

container. 

(h) Assessment of penalties and 

injunctions. We may assess 

administrative penalties, bring a civil 

action to assess and recover civil 

penalties, bring a civil action to enjoin 

and restrain violations, or bring criminal 

action as provided by the Clean Air Act. 

§ 59.603 How must manufacturers apply 

good engineering judgment? 

(a) In addition to other requirements 

and prohibitions set forth in this 

subpart, you must use good engineering 

judgment for decisions related to any 

requirements under this subpart. This 

includes your applications for 

certification, any testing you do to show 

that your portable fuel containers 

comply with requirements that apply to 

them, and how you select, categorize, 

determine, and apply these 

requirements. 

(b) Upon request, you must provide 

EPA a written description of the 

engineering judgment in question. Such 

information must be provided within 15 

working days unless EPA specifies a 

different period of time to respond. 

(c) We may reject your decision if it 

is not based on good engineering 

judgment or is otherwise inconsistent 

with the requirements that apply, and 

we may—

(1) Suspend, revoke, or void a 

certificate of conformity if we determine 

you used incorrect or incomplete 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8535 

information or failed to consider 

relevant information, or that your 

decision was not based on good 

engineering judgment; or 

(2) Notify you that we believe any 

aspect of your application or other 

information submission may be 

incorrect or invalid due to lack of good 

engineering judgment or other cause. 

Unless a different period is specified, 

you will have 30 days to respond to our 

notice and specifically address our 

concerns. After considering your 

information, we will notify you 

regarding our finding, which may 

include the actions provided in 

paragraph (c)(1) of this section. 

(d) If you disagree with our 

conclusions under paragraph (c) of this 

section, you may file a request for a 

hearing with the Designated Compliance 

Officer as described in § 59.699. In your 

request, you must specifically state your 

objections, and include relevant data or 

supporting analysis. The request must 

be signed by your authorized 

representative. If we agree that your 

request raises a substantial factual issue, 

we will hold the hearing according to 

§ 59.699. 

§ 59.605 What portable fuel containers are 

excluded from this subpart’s requirements? 

This section describes exclusions that 

apply to certain portable fuel containers. 

The prohibitions and requirements of 

this subpart do not apply for containers 

excluded under this section. Exclusions 

under this section are based on inherent 

characteristics of the containers. See 

§ 59.660 for exemptions that apply 

based on special circumstances. 

(a) Containers approved as safety cans 

consistent with the requirements of 29 

CFR 1926.150 through 1926.152 are 

excluded. Such cans generally have a 

flash-arresting screens, spring-closing 

lids and spout covers and have been 

approved by a nationally recognized 

testing laboratory such as Factory 

Mutual Engineering Corp. or 

Underwriters Laboratories, Inc., or 

Federal agencies such as Bureau of 

Mines, or U.S. Coast Guard. 

(b) Containers with a nominal 

capacity of less than 0.25 gallons or 

more than 10.0 gallons are excluded. 

(c) Containers designed and marketed 

solely to deliver fuel directly to nonroad 

engines during engine operation, such 

as containers with a connection for a 

fuel line and a reserve fuel area, are 

considered to be nonroad fuel tanks, 

and are thus excluded. 

§ 59.607 Submission of information. 

(a) You are responsible for all 

statements you make to us related to 

this subpart F, including information 

not required during certification. You 

are required to provide truthful and 

complete information. This subpart 

describes the consequences of failing to 

meet this obligation. The consequences 

also may include prosecution under 18 

U.S.C. 1001 and 42 U.S.C. 7431(c)(2). 

(b) We may require an officer or 

authorized representative of your 

company with knowledge of the 

information contained in the submittal 

to approve and sign any submission of 

information to us, and to certify that all 

the information submitted is accurate 

and complete. 

Emission Standards and Related 

Requirements 

§ 59.611 What evaporative emission 

requirements apply under this subpart? 

(a) Hydrocarbon emissions from 

portable fuel containers may not exceed 

0.3 grams per gallon per day when 

measured with the test procedures in 

§§ 59.650 through 59.653. This 

procedure measures diurnal venting 

emissions and permeation emissions. 

(b) For the purpose of this section, 

portable fuel containers include spouts, 

caps, gaskets, and other parts provided 

with the container. 

(c) The following general 

requirements also apply for all portable 

fuel containers subject to the standards 

of this subpart: 

(1) Prohibited controls. The following 

controls are prohibited: 

(i) For anyone to design, manufacture, 

or install emission control systems so 

they cause or contribute to an 

unreasonable risk to public health, 

welfare, or safety while operating. 

(ii) For anyone to design, 

manufacture, or install emission control 

systems with features that disable, 

deactivate, reduce effectiveness, or 

bypass the emission controls, either 

actively or passively. For example, you 

may not include a manual vent that the 

operator can open to bypass emission 

controls. You may ask us to allow such 

features if needed for safety reasons or 

if the features operate during emission 

tests described in subpart F of this part. 

(2) Leaks. You must design and 

manufacture your containers to be free 

of leaks. This requirement applies when 

your container is upright, partially 

inverted, or completely inverted. 

(3) Refueling. You are required to 

design your portable fuel containers to 

minimize spillage during refueling to 

the extent practical. This requires that 

you use good engineering judgment to 

avoid designs that will make it difficult 

to refuel typical vehicle and equipment 

designs without spillage. 

(d) Portable fuel containers must meet 

the standards and requirements 

specified in this subpart throughout the 

useful life of the container. The useful 

life of the container is five years 

beginning on the date of sale to the 

ultimate purchaser. 

§ 59.612 What emission-related warranty 

requirements apply to me? 

(a) General requirements. You must 

warrant to the ultimate purchaser that 

the new portable fuel container, 

including all parts of its evaporative 

emission-control system, is: 

(1) Designed, built, and equipped so 

it conforms at the time of sale to the 

ultimate purchaser with the 

requirements of this subpart. 

(2) Is free from defects in materials 

and workmanship that may keep it from 

meeting these requirements. 

(b) Warranty notice and period. Your 

emission-related warranty must be valid 

for a minimum of one year from the date 

of sale to the ultimate purchaser. 

(c) Notice. You must provide a 

warranty notice with each container. 

§ 59.613 What operation and maintenance 

instructions must I give to buyers? 

You must provide the ultimate 

purchaser of the new portable fuel 

container written instructions for 

properly maintaining and using the 

emission-control system. 

§ 59.615 How must I label and identify the 

portable fuel containers I produce? 

This section describes how you must 

label your portable fuel containers. 

(a) At the time of manufacture, 

indelibly mark the month and year of 

manufacture on each container. 

(b) Mold into or affix a legible label 

identifying each portable fuel container. 

The label must be: 

(1) Attached so it is not easily 

removable. 

(2) Secured to a part of the container 

that can be easily viewed when the can 

is in use, not on the bottom of the 

container. 

(3) Written in English. 

(c) The label must include: 

(1) The heading ‘‘EMISSION 

CONTROL INFORMATION’’. 

(2) Your full corporate name, 

trademark and warranty contact 

information. 

(3) A standardized identifier such as 

EPA’s standardized designation for the 

emission families, the model number, or 

the part number. 

(4) This statement: ‘‘THIS 

CONTAINER COMPLIES WITH U.S. 

EPA EMISSION REGULATIONS FOR 

PORTABLE FUEL CONTAINERS (40 

CFR Part 59).’’. 

(5) This statement: ‘‘THE EMISSIONS 

WARRANTY IS VALID FOR A 

MINIMUM OF ONE YEAR FROM DATE 

OF PURCHASE.’’. 


pwalker on PROD1PC71 with RULES_2
8536 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

(d) You may add information to the 

emission control information label to 

identify other emission standards that 

the container meets or does not meet 

(such as California standards). You may 

also add other information to ensure 

that the portable fuel container will be 

properly maintained and used. 

(e) You may request that we approve 

modified labeling requirements in this 

subpart F if you show that it is 

necessary or appropriate. We will 

approve your request if your alternate 

label is consistent with the requirements 

of this subpart. 

(f) You may identify the name and 

trademark of another company instead 

of their own on your emission control 

information label, subject to the 

following provisions: 

(1) You must have a contractual 

agreement with the other company that 

obligates that company to take the 

following steps: 

(i) Meet the emission warranty 

requirements that apply under § 59.612. 

This may involve a separate agreement 

involving reimbursement of warrantyrelated expenses. 

(ii) Report all warranty-related 

information to the certificate holder. 

(2) In your application for 

certification, identify the company 

whose trademark you will use and 

describe the arrangements you have 

made to meet your requirements under 

this section. 

(3) You remain responsible for 

meeting all the requirements of this 

subpart. 

Certifying Emission Families 

§ 59.621 Who may apply for a certificate of 

conformity? 

A certificate of conformity may be 

issued only to the manufacturer that 

completes the construction of the 

portable fuel container. In unusual 

circumstances, upon a petition by a 

manufacturer, we may allow another 

manufacturer of the container to hold 

the certificate of conformity. However, 

in order to hold the certificate, the 

manufacturer must demonstrate day-today ability to ensure that containers 

produced under the certificate will 

comply with the requirements of this 

subpart. 

§ 59.622 What are the general 

requirements for obtaining a certificate of 

conformity and producing portable fuel 

containers under it? 

(a) You must send us a separate 

application for a certificate of 

conformity for each emission family. A 

certificate of conformity for containers 

is valid from the indicated effective date 

until the end of the production period 

for which it is issued. We may require 

new certification prior to the end of the 

production period if we finds that 

containers are not meeting the standards 

in use during their useful life. 

(b) The application must be written in 

English and contain all the information 

required by this subpart and must not 

include false or incomplete statements 

or information (see §§ 59.607 and 

59.629). 

(c) We may ask you to include less 

information than we specify in this 

subpart, as long as you maintain all the 

information required by § 59.628. 

(d) You must use good engineering 

judgment for all decisions related to 

your application (see § 59.603). 

(e) An authorized representative of 

your company must approve and sign 

the application. 

(f) See § 59.629 for provisions 

describing how we will process your 

application. 

(g) If we approve your application, we 

will issue a certificate that will allow 

you to produce the containers that you 

described in your application for a 

specified production period. Certificates 

do not allow you to produce containers 

that were not described in your 

application, unless we approve the 

additional containers under § 59.624. 

§ 59.623 What must I include in my 

application? 

This section specifies the information 

that must be in your application, unless 

we ask you to include less information 

under § 59.622(c). We may require you 

to provide additional information to 

evaluate your application. 

(a) Describe the emission family’s 

specifications and other basic 

parameters of the emission controls. List 

each distinguishable configuration in 

the emission family. Include 

descriptions and part numbers for all 

detachable components such as spouts 

and caps. 

(b) Describe and explain the method 

of emission control. 

(c) Describe the products you selected 

for testing and the reasons for selecting 

them. 

(d) Describe the test equipment and 

procedures that you used, including any 

special or alternate test procedures you 

used (see § 59.650). 

(e) List the specifications of the test 

fuel to show that it falls within the 

required ranges specified in § 59.650. 

(f) Include the maintenance and use 

instructions and warranty information 

you will give to the ultimate purchaser 

of each new portable fuel container (see 

§ 59.613). 

(g) Describe your emission control 

information label (see § 59.615). 

(h) State that your product was tested 

as described in the application 

(including the test procedures, test 

parameters, and test fuels) to show you 

meet the requirements of this subpart. 

(i) Present emission data to show your 

products meet the applicable emission 

standards. Where applicable, §§ 59.626 

and 59.627 may allow you to submit an 

application in certain cases without new 

emission data. 

(j) Report all test results, including 

those from invalid tests or from any 

other tests, whether or not they were 

conducted according to the test 

procedures of §§ 59.650 through 59.653. 

We may ask you to send other 

information to confirm that your tests 

were valid under the requirements of 

this subpart. 

(k) Unconditionally certify that all the 

products in the emission family comply 

with the requirements of this subpart, 

other referenced parts of the CFR, and 

the Clean Air Act. 

(l) Include estimates of U.S.-directed 

production volumes. 

(m) Include the information required 

by other sections of this subpart. 

(n) Include other relevant 

information, including any additional 

information requested by EPA. 

(o) Name an agent for service located 

in the United States. Service on this 

agent constitutes service on you or any 

of your officers or employees for any 

action by EPA or otherwise by the 

United States related to the 

requirements of this subpart. 

§ 59.624 How do I amend my application 

for certification? 

Before we issue you a certificate of 

conformity, you may amend your 

application to include new or modified 

configurations, subject to the provisions 

of this section. After we have issued 

your certificate of conformity, you may 

send us an amended application 

requesting that we include new or 

modified configurations within the 

scope of the certificate, subject to the 

provisions of this section. You must 

amend your application if any changes 

occur with respect to any information 

included in your application. 

(a) You must amend your application 

before you take either of the following 

actions: 

(1) Add a configuration to an emission 

family. In this case, the configuration 

added must be consistent with other 

configurations in the emission family 

with respect to the criteria listed in 

§ 59.625. 

(2) Change a configuration already 

included in an emission family in a way 

that may affect emissions, or change any 

of the components you described in 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8537 

your application for certification. This 

includes production and design changes 

that may affect emissions any time 

during the portable fuel containers’

lifetime. 

(b) To amend your application for 

certification, send the Designated 

Compliance Officer the following 

information: 

(1) Describe in detail the addition or 

change in the configuration you intend 

to make. 

(2) Include engineering evaluations or 

data showing that the amended 

emission family complies with all 

applicable requirements. You may do 

this by showing that the original 

emission data are still appropriate with 

respect to showing compliance of the 

amended family with all applicable 

requirements. 

(3) If the original emission data for the 

emission family are not appropriate to 

show compliance for the new or 

modified configuration, include new 

test data showing that the new or 

modified configuration meets the 

requirements of this subpart. 

(c) We may ask for more test data or 

engineering evaluations. You must give 

us these within 30 days after we request 

them. 

(d) For emission families already 

covered by a certificate of conformity, 

we will determine whether the existing 

certificate of conformity covers your 

new or modified configuration. You 

may ask for a hearing if we deny your 

request (see § 59.699). 

(e) For emission families already 

covered by a certificate of conformity 

and you send us a request to amend 

your application, you may sell and 

distribute the new or modified 

configuration before we make a decision 

under paragraph (d) of this section, 

subject to the provisions of this 

paragraph. If we determine that the 

affected configurations do not meet 

applicable requirements, we will notify 

you to cease production of the 

configurations and any containers from 

the new or modified configuration will 

not be considered covered by the 

certificate. In addition, we may require 

you to recall any affected containers that 

you have already distributed, including 

those sold to the ultimate purchasers. 

Choosing to produce containers under 

this paragraph (e) is deemed to be 

consent to recall all containers that we 

determine do not meet applicable 

emission standards or other 

requirements and to remedy the 

nonconformity at no expense to the 

owner. If you do not provide 

information required under paragraph 

(c) of this section within 30 days, you 

must stop producing the new or 

modified containers. 

§ 59.625 How do I select emission 

families? 

(a) Divide your product line into 

families of portable fuel containers that 

are expected to have similar emission 

characteristics throughout the useful 

life. 

(b) Group containers in the same 

emission family if they are the same in 

all the following aspects: 

(1) Type of material (including 

pigments, plasticizers, UV inhibitors, or 

other additives that may affect control of 

emissions). 

(2) Production method. 

(3) Spout and cap design. 

(4) Gasket material and design. 

(5) Emission control strategy. 

(c) You may subdivide a group of 

containers that is identical under 

paragraph (b) of this section into 

different emission families if you show 

the expected emission characteristics 

are different. 

(d) You may group containers that are 

not identical with respect to the things 

listed in paragraph (b) of this section in 

the same emission family if you show 

that their emission characteristics will 

be similar throughout their useful life. 

§ 59.626 What emission testing must I 

perform for my application for a certificate 

of conformity? 

This section describes the emission 

testing you must perform to show 

compliance with the emission standards 

in § 59.611. 

(a) Test your products using the 

procedures and equipment specified in 

§§ 59.650 through 59.653. 

(b) Select an emission-data unit from 

each emission family for testing. You 

must test a production sample or a 

preproduction product that will 

represent actual production. Select the 

configuration that is most likely to 

exceed (or have emissions nearest to) 

the applicable emission standard. For 

example, for a family of multilayer 

portable fuel containers, test the 

container with the thinnest barrier layer. 

Test three identical containers. 

(c) We may measure emissions from 

any of your products from the emission 

family. You must supply your products 

to us if we choose to perform 

confirmatory testing. 

(d) You may ask to use emission data 

from a previous production period 

(carryover) instead of doing new tests, 

but only if the emission-data from the 

previous production period remains the 

appropriate emission-data unit under 

paragraph (b) of this section. For 

example, you may not carryover 

emission data for your family of 

containers if you have added a thinnerwalled container than was tested 

previously. 

(e) We may require you to test a 

second unit of the same or different 

configuration in addition to the unit 

tested under paragraph (b) of this 

section. 

(f) If you use an alternate test 

procedure under § 59.652 and later 

testing shows that such testing does not 

produce results that are equivalent to 

the procedures specified in this subpart, 

we may reject data you generated using 

the alternate procedure and base our 

compliance determination on the later 

testing. 

§ 59.627 How do I demonstrate that my 

emission family complies with evaporative 

emission standards? 

(a) For purposes of certification, your 

emission family is considered in 

compliance with an evaporative 

emission standard in § 59.611(a) if the 

test results from all portable fuel 

containers in the family that have been 

tested show measured emissions levels 

that are at or below the applicable 

standard. 

(b) Your emissions family is deemed 

not to comply if any container 

representing that family has test results 

showing an official emission level above 

the standard. 

(c) Round the measured emission 

level to the same number of decimal 

places as the emission standard. 

Compare the rounded emission levels to 

the emission standard. 

§ 59.628 What records must I keep and 

what reports must I send to EPA? 

(a) Organize and maintain the 

following records: 

(1) A copy of all applications and any 

other information you send us. 

(2) Any of the information we specify 

in § 59.623 that you were not required 

to include in your application. 

(3) A detailed history of each 

emission-data unit. For each emissiondata unit, include all of the following: 

(i) The emission-data unit’s 

construction, including its origin and 

buildup, steps you took to ensure that 

it represents production containers, any 

components you built specially for it, 

and all the components you include in 

your application for certification. 

(ii) All your emission tests, including 

documentation on routine and standard 

tests, as specified in §§ 59.650 through 

59.653, and the date and purpose of 

each test. 

(iii) All tests to diagnose emissioncontrol performance, giving the date and 

time of each and the reasons for the test. 


pwalker on PROD1PC71 with RULES_2
8538 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

(iv) Any other relevant events or 

information. 

(4) Production figures for each 

emission family divided by assembly 

plant. 

(5) If you identify your portable fuel 

containers by lot number or other 

identification numbers, keep a record of 

these numbers for all the containers you 

produce under each certificate of 

conformity. 

(b) Keep data from routine emission 

tests (such as test cell temperatures and 

relative humidity readings) for one year 

after we issue the associated certificate 

of conformity. Keep all other 

information specified in paragraph (a) of 

this section for five years after we issue 

your certificate. 

(c) Store these records in any format 

and on any media, as long as you can 

promptly send us organized, written 

records in English if we ask for them. 

You must keep these records readily 

available. We may review them at any 

time. 

(d) Send us copies of any 

maintenance instructions or 

explanations if we ask for them. 

(e) Send us an annual warranty report 

summarizing successful warranty claims 

by emission family under § 59.612, 

including the reason for the claim. You 

must submit the report by July 1 for the 

preceding calendar year. 

§ 59.629 What decisions may EPA make 

regarding my certificate of conformity? 

(a) If we determine your application is 

complete and shows that the emission 

family meets all the requirements of this 

subpart and the Act, we will issue a 

certificate of conformity for your 

emission family for the specified 

production period. We may make the 

approval subject to additional 

conditions. 

(b) We may deny your application for 

certification if we determine that your 

emission family fails to comply with 

emission standards or other 

requirements of this subpart or the Act. 

Our decision may be based on a review 

of all information available to us. If we 

deny your application, we will explain 

why in writing. 

(c) In addition, we may deny your 

application or suspend, revoke, or void 

your certificate if you do any of the 

following: 

(1) Refuse to comply with any testing 

or reporting requirements. 

(2) Submit false or incomplete 

information. 

(3) Render inaccurate any test data. 

(4) Deny us from completing 

authorized activities (see § 59.698). This 

includes a failure to provide reasonable 

assistance. 

(5) Produce portable fuel containers 

for importation into the United States at 

a location where local law prohibits us 

from carrying out authorized activities. 

(6) Fail to supply requested 

information or amend your application 

to include all portable fuel containers 

being produced. 

(7) Take any action that otherwise 

circumvents the intent of the Act or this 

subpart. 

(d) If we deny your application or 

suspend, revoke, or void your 

certificate, you may ask for a hearing 

(see § 59.699). 

§ 59.630 EPA testing. 

We may test any portable fuel 

container subject to the standards of this 

subpart. 

(a) Certification and production 

sample testing. Upon our request, a 

manufacturer must supply a prototype 

container or a reasonable number of 

production samples to us for 

verification testing. These samples will 

generally be tested using the full test 

procedure of § 59.653. 

(b) In-use testing. We may test in-use 

containers using the test procedure of 

§ 59.653 without preconditioning. 

§ 59.650 General testing provisions. 

(a) The test procedures of this subpart 

are addressed to you as a manufacturer, 

but they apply equally to anyone who 

does testing for you. 

(b) Unless we specify otherwise, the 

terms ‘‘procedures’’ and ‘‘test 

procedures’’ in this subpart include all 

aspects of testing, including the 

equipment specifications, calibrations, 

calculations, and other protocols and 

procedural specifications needed to 

measure emissions. 

(c) The specification for gasoline to be 

used for testing is given in 40 CFR 

1065.710. Use the grade of gasoline 

specified for general testing. Blend this 

grade of gasoline with reagent grade 

ethanol in a volumetric ratio of 90.0 

percent gasoline to 10.0 percent ethanol. 

You may use ethanol that is less pure if 

you can demonstrate that it will not 

affect your ability to demonstrate 

compliance with the applicable 

emission standards. 

(d) Accuracy and precision of all 

temperature measurements must be 

±2.2° C or better. 

(e) Accuracy and precision of mass 

balances must be sufficient to ensure 

accuracy and precision of two percent 

or better for emission measurements for 

products at the maximum level allowed 

by the standard. The readability of the 

display may not be coarser than half of 

the required accuracy and precision. 

§ 59.652 Other procedures. 

(a) Your testing. The procedures in 

this subpart apply for all testing you do 

to show compliance with emission 

standards, with certain exceptions listed 

in this section. 

(b) Our testing. These procedures 

generally apply for testing that we do to 

determine if your portable fuel 

containers complies with applicable 

emission standards. We may perform 

other testing as allowed by the Act. 

(c) Exceptions. We may allow or 

require you to use procedures other than 

those specified in this subpart as 

follows: 

(1) You may request to use special 

procedures if your portable fuel 

containers cannot be tested using the 

specified procedures. We will approve 

your request if we determine that it 

would produce emission measurements 

that represent in-use operation and we 

determine that it can be used to show 

compliance with the requirements of 

§ 59.611. 

(2) You may ask to use emission data 

collected using other procedures, such 

as those of the California Air Resources 

Board. We will approve this only if you 

show us that using these other 

procedures do not affect your ability to 

show compliance with the applicable 

emission standards. This generally 

requires emission levels to be far 

enough below the applicable emission 

standards so that any test differences do 

not affect your ability to state 

unconditionally that your containers 

will meet all applicable emission 

standards when tested using the 

specified test procedures. 

(3) You may request to use alternate 

procedures that are equivalent to 

allowed procedures, or more accurate or 

more precise than allowed procedures. 

(4) You may not use other procedures 

under this paragraph (c) until we 

approve your request. 

§ 59.653 How do I test portable fuel 

containers? 

You must test the portable fuel 

container as described in your 

application, with the applicable spout 

attached except as otherwise noted. 

Tighten fittings in a manner 

representative of how they would be 

tightened by a typical user. 

(a) Preconditioning for durability. 

Complete the following steps before an 

emissions test, in any order, unless we 

determine that omission of one or more 

of these durability steps will not affect 

the emissions from your container. 

(1) Pressure cycling. Perform a 

pressure test by sealing the container 

and cycling it between +13.8 and ¥1.7 

kPa (+2.0 and ¥0.5 psig) for 10,000 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8539 

cycles at a rate of 60 seconds per cycle. 

For this test, the spout may be removed 

and the pressure applied through the 

opening where the spout attaches. The 

purpose of this test is to represent 

environmental wall stresses caused by 

pressure changes and other factors (such 

as vibration or thermal expansion). If 

your container cannot be tested using 

the pressure cycles specified by this 

paragraph (a)(1), you may ask to use 

special test procedures under 

§ 59.652(c). 

(2) UV exposure. Perform a sunlightexposure test by exposing the container 

to an ultraviolet light of at least 24 W/ 

m2 (0.40 W-hr/m2/min) on the container 

surface for at least 450 hours. 

Alternatively, the container may be 

exposed to direct natural sunlight for an 

equivalent period of time, as long as you 

ensure that the container is exposed to 

at least 450 daylight hours. 

(3) Slosh testing. Perform a slosh test 

by filling the portable fuel container to 

40 percent of its capacity with the fuel 

specified in paragraph (e) of this section 

and rocking it at a rate of 15 cycles per 

minute until you reach one million total 

cycles. Use an angle deviation of +15° 

to ¥15° from level. 

(4) Spout actuation. Perform the 

following spout actuation and inversion 

steps at the end on the slosh testing, and 

at the end of the preconditioning soak. 

(i) Perform one complete actuation/ 

inversion cycle per day for ten days. 

(ii) One actuation/inversion cycle 

consists of the following steps: 

(A) Remove and replace the spout to 

simulate filling the container. 

(B) Slowly invert the container and 

keep it inverted for at least 5 seconds to 

ensure that the spout and mechanisms 

become saturated with fuel. Any fuel 

leaking from any part of the container 

will denote a leak and must be reported 

as part of certification. Once completed, 

place the container on a flat surface in 

the upright position. 

(C) Actuate the spout by fully opening 

and closing without dispensing fuel. 

The spout must return to the closed 

position without the aid of the operator 

(e.g., pushing or pulling the spout 

closed). Repeat for a total of 10 

actuations. If at any point the spout fails 

to return to the closed position, the 

container fails the test. 

(D) Repeat the step contained in 

paragraph (a)(4)(ii)(B) of this section 

(i.e., the inversion step). 

(E) Repeat the steps contained in 

paragraph (a)(4)(ii)(C) of this section 

(i.e., ten actuations). 

(b) Preconditioning fuel soak. 

Complete the following steps before a 

diurnal emission test: 

(1) Fill the portable fuel container 

with the specified fuel to its nominal 

capacity, seal it using the spout, and 

allow it to soak at 28 ±5° C for 20 weeks. 

Alternatively, the container may be 

soaked for 10 weeks at 43 ±5° C. You 

may count the time of the 

preconditioning steps in paragraph (a) 

of this section as part of the 

preconditioning fuel soak, as long as the 

ambient temperature remains within the 

specified temperature range and the fuel 

tank is at least 40 percent full; you may 

add or replace fuel as needed to conduct 

the specified durability procedures. 

(2) Pour the fuel out of the container 

and immediately refill to 50 percent of 

nominal capacity. Be careful to not spill 

any fuel on the container. Wipe the 

outside of the container as needed to 

remove any liquid fuel that may have 

spilled on it. 

(3) Install the spout assembly that will 

be used in the production containers. 

The spout and other openings (such as 

vents) on the container must be tested 

in their open condition unless they 

close automatically and are unlikely to 

be left open by the user during typical 

storage. All manual closures such as 

caps must be left off the container and 

spout during testing. 

(c) Reference container. A reference 

container is required to correct for 

buoyancy effects that may occur during 

testing. Prepare the reference tank as 

follows: 

(1) Obtain a second container of the 

same model as the test tank. You may 

not use a container that has previously 

contained fuel or any other contents that 

might affect the stability of its mass. 

(2) Fill the reference container with 

enough dry sand (or other inert 

material) so that the mass of the 

reference container is approximately the 

same as the test container when filled 

with fuel. Use good engineering 

judgment to determine how similar the 

mass of the reference container needs to 

be to the mass of the test container 

considering the performance 

characteristics of your balance. 

(3) Ensure that the sand (or other inert 

material) is dry. This may require 

heating the container or applying a 

vacuum to it. 

(4) Seal the container. 

(d) Diurnal test run. To run the test, 

take the following steps for a portable 

fuel container that was preconditioned 

as specified in paragraph (a) of this 

section. 

(1) Stabilize the fuel temperature 

within the portable fuel container at 

22.2 °C. Vent the container at this point 

to relieve any positive or negative 

pressure that may have developed 

during stabilization. 

(2) Weigh the sealed reference 

container and record the weight. Place 

the reference on the balance and tare it 

so that it reads zero. Place the sealed 

test container on the balance and record 

the difference between the test container 

and the reference container. This value 

is Minitial Take this measurement within 

8 hours of filling the test container with 

fuel as specified in paragraph (b)(2) of 

this section. 

(3) Immediately place the portable 

fuel container within a well ventilated, 

temperature-controlled room or 

enclosure. Do not spill or add any fuel. 

(4) Close the room or enclosure. 

(5) Follow the temperature profile in 

the following table for all portable fuel 

containers. Use good engineering 

judgment to follow this profile as 

closely as possible. You may use 

linearly interpolated temperatures or a 

spline fit for temperatures between the 

hourly setpoints. 

TABLE 1 OF § 59.653—DIURNAL TEMPERATURE PROFILE FOR PORTABLE

FUEL CONTAINERS

Time 

(hours) 

Ambient 

Temperature 

(°C) 

Profile 

0 ................................................ 22.2 

1 ................................................ 22.5 

2 ................................................ 24.2 

3 ................................................ 26.8 

4 ................................................ 29.6 

5 ................................................ 31.9 

6 ................................................ 33.9 

7 ................................................ 35.1 

8 ................................................ 35.4 

9 ................................................ 35.6 

10 .............................................. 35.3 

11 .............................................. 34.5 

12 .............................................. 33.2 

13 .............................................. 31.4 

14 .............................................. 29.7 

15 .............................................. 28.2 

16 .............................................. 27.2 

17 .............................................. 26.1 

18 .............................................. 25.1 

19 .............................................. 24.3 

20 .............................................. 23.7 

21 .............................................. 23.3 

22 .............................................. 22.9 

23 .............................................. 22.6 

24 .............................................. 22.2 

(6) At the end of the diurnal period, 

retare the balance using the reference 

container and weigh the portable fuel 

container. Record the difference in mass 

between the reference container and the 

test. This value is Mfinal. 

(7) Subtract Mfinal from Minitial and 

divide the difference by the nominal 

capacity of the container (using at least 

three significant figures) to calculate the 

g/gallon/day emission rate as follows: 


pwalker on PROD1PC71 with RULES_2
8540 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

Emission rate = (Minitial—Mfinal)/ 

(nominal capacity)/(one day) 

(8) Round your result to the same 

number of decimal places as the 

emission standard. 

(9) Instead of determining emissions 

by weighing the container before and 

after the diurnal temperature cycle, you 

may place the container in a SHED 

meeting the specifications of 40 CFR 

86.107–96(a)(1) and measure emissions 

directly. Immediately following the 

stabilization in paragraph (d)(1) of this 

section, purge the SHED and follow the 

temperature profile from paragraph 

(d)(4) of this section. Start measuring 

emissions when you start the 

temperature profile and stop measuring 

emissions when the temperature profile 

concludes. 

(e) For metal containers, you may 

demonstrate for certification that your 

portable fuel containers comply with 

the evaporative emission standards 

without performing the pre-soak or 

container durability cycles (i.e., the 

pressure cycling, UV exposure, and 

slosh testing) specified in this section. 

For other containers, you may 

demonstrate compliance without 

performing the durability cycles 

specified in this section only if we 

approve it after you have presented data 

clearly demonstrating that the cycle or 

cycles do not negatively impact the 

permeation rate of the materials used in 

the containers. 

Special Compliance Provisions 

§ 59.660 Exemption from the standards. 

In certain circumstances, we may 

exempt portable fuel containers from 

the evaporative emission standards and 

requirements of § 59.611 and the 

prohibitions and requirements of 

§ 59.602. You do not need an exemption 

for any containers that you own but do 

not sell, offer for sale, introduce or 

deliver for introduction into U.S. 

commerce, or import into the United 

States. Submit your request for an 

exemption to the Designated 

Compliance Officer. 

(a) Portable fuel containers that are 

intended for export only and are in fact 

exported are exempt provided they are 

clearly labeled as being for export only. 

Keep records for five years of all 

portable fuel containers that you 

manufacture for export. Any 

introduction into U.S. commerce of 

such portable fuel containers for any 

purpose other than export is considered 

to be a violation of § 59.602 by the 

manufacturer. You do not need to 

request this exemption. 

(b) You may ask us to exempt portable 

fuel containers that you will purchase, 

sell, or distribute for the sole purpose of 

testing them. 

(c) You may ask us to exempt portable 

fuel containers for the purpose of 

national security, as long as your 

request is endorsed by an agency of the 

federal government responsible for 

national defense. In your request, 

explain why you need the exemption. 

(d) You may ask us to exempt 

containers that are designed and 

marketed solely for rapidly refueling 

racing applications which are designed 

to create a leak proof seal with the target 

tank or are designed to connect with a 

receiver installed on the target tank. 

This exemption is generally intended 

for containers used to rapidly refuel a 

race car during a pit stop and similar 

containers. In your request, explain how 

why these containers are unlikely to be 

used for nonracing applications. We 

may limit these exemptions to those 

applications that are allowed to use 

gasoline exempted under 40 CFR 

80.200(a). 

(e) EPA may impose reasonable 

conditions on any exemption, including 

a limit on the number of containers that 

are covered by an exemption. 

§ 59.662 What temporary provisions 

address hardship due to unusual 

circumstances? 

(a) After considering the 

circumstances, we may exempt you 

from the evaporative emission standards 

and requirements of § 59.611 of this 

subpart and the prohibitions and 

requirements of § 59.602 for specified 

portable fuel containers that do not 

comply with emission standards if all 

the following conditions apply: 

(1) Unusual circumstances that are 

clearly outside your control and that 

could not have been avoided with 

reasonable discretion prevent you from 

meeting requirements from this subpart. 

(2) You exercised prudent planning 

and were not able to avoid the violation; 

you have taken all reasonable steps to 

minimize the extent of the 

nonconformity. 

(3) Not having the exemption will 

jeopardize the solvency of your 

company. 

(4) No other allowances are available 

under the regulations in this chapter to 

avoid the impending violation, 

including the provisions of § 59.663. 

(b) To apply for an exemption, you 

must send the Designated Compliance 

Officer a written request as soon as 

possible before you are in violation. In 

your request, show that you meet all the 

conditions and requirements in 

paragraph (a) of this section. 

(c) Include in your request a plan 

showing how you will meet all the 

applicable requirements as quickly as 

possible. 

(d) You must give us other relevant 

information if we ask for it. 

(e) We may include reasonable 

additional conditions on an approval 

granted under this section, including 

provisions to recover or otherwise 

address the lost environmental benefit 

or paying fees to offset any economic 

gain resulting from the exemption. 

(f) We may approve renewable 

extensions of up to one year. We may 

review and revise an extension as 

reasonable under the circumstances. 

(g) Add a legible label, written in 

English, to a readily visible part of each 

container exempted under this section. 

This label must prominently include at 

least the following items: 

(1) Your corporate name and 

trademark. 

(2) The statement ‘‘EXEMPT UNDER 

40 CFR 59.662.’’. 

§ 59.663 What are the provisions for 

extending compliance deadlines for 

manufacturers under hardship? 

(a) After considering the 

circumstances, we may extend the 

compliance deadline for you to meet 

new emission standards, as long as you 

meet all the conditions and 

requirements in this section. 

(b) To apply for an extension, you 

must send the Designated Compliance 

Officer a written request. In your 

request, show that all the following 

conditions and requirements apply: 

(1) You have taken all possible 

business, technical, and economic steps 

to comply. 

(2) Show that the burden of 

compliance costs prevents you from 

meeting the requirements of this subpart 

by the required compliance date. 

(3) Not having the exemption will 

jeopardize the solvency of your 

company. 

(4) No other allowances are available 

under the regulations in this subpart to 

avoid the impending violation. 

(c) In describing the steps you have 

taken to comply under paragraph (b)(1) 

of this section, include at least the 

following information: 

(1) Describe your business plan, 

showing the range of projects active or 

under consideration. 

(2) Describe your current and 

projected financial standing, with and 

without the burden of complying in full 

with the applicable regulations in this 

subpart by the required compliance 

date. 

(3) Describe your efforts to raise 

capital to comply with regulations in 

this subpart. 

(4) Identify the engineering and 

technical steps you have taken or plan 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8541 

to take to comply with regulations in 

this subpart. 

(5) Identify the level of compliance 

you can achieve. For example, you may 

be able to produce containers that meet 

a somewhat less stringent emission 

standard than the regulations in this 

subpart require. 

(d) Include in your request a plan 

showing how you will meet all the 

applicable requirements as quickly as 

possible. 

(e) You must give us other relevant 

information if we ask for it. 

(f) An authorized representative of 

your company must sign the request and 

include the statement: ‘‘All the 

information in this request is true and 

accurate, to the best of my knowledge.’’. 

(g) Send your request for this 

extension at least nine months before 

the relevant deadline. 

(h) We may include reasonable 

requirements on an approval granted 

under this section, including provisions 

to recover or otherwise address the lost 

environmental benefit. For example, we 

may require that you meet a less 

stringent emission standard. 

(i) We may approve renewable 

extensions of up to one year. We may 

review and revise an extension as 

reasonable under the circumstances. 

(j) Add a permanent, legible label, 

written in English, to a readily visible 

part of each container exempted under 

this section. This label must 

prominently include at least the 

following items: 

(1) Your corporate name and 

trademark. 

(2) The statement ‘‘EXEMPT UNDER 

40 CFR 59.663.’’. 

§ 59.664 What are the requirements for 

importing portable fuel containers into the 

United States? 

As specified in this section, we may 

require you to post a bond if you import 

into the United States containers that 

are subject to the standards of this 

subpart. See paragraph (f) of this section 

for the requirements related to 

importing containers that have been 

certified by someone else. 

(a) Prior to importing containers into 

the U.S., we may require you to post a 

bond to cover any potential compliance 

or enforcement actions under the Clean 

Air Act if you cannot demonstrate to us 

that you have assets of an appropriate 

liquidity readily available in the United 

States with a value equal to the retail 

value of the containers that you will 

import during the calendar year. 

(b) We may set the value of the bond 

up to five dollars per container. 

(c) You may meet the bond 

requirements of this section by 

obtaining a bond from a third-party 

surety that is cited in the U.S. 

Department of Treasury Circular 570, 

‘‘Companies Holding Certificates of 

Authority as Acceptable Sureties on 

Federal Bonds and as Acceptable 

Reinsuring Companies’’ (http:// 

www.fms.treas.gov/c570/ 

c570.html#certified). 

(d) If you forfeit some or all of your 

bond in an enforcement action, you 

must post any appropriate bond for 

continuing importation within 90 days 

after you forfeit the bond amount. 

(e) You will forfeit the proceeds of the 

bond posted under this section if you 

need to satisfy any United States 

administrative final order or judicial 

judgment against you arising from your 

conduct in violation of this subpart. 

(f) This paragraph (f) applies if you 

import for resale containers that have 

been certified by someone else. You and 

the certificate holder are each 

responsible for compliance with the 

requirements of this subpart and the 

Clean Air Act. No bond is required 

under this section if either you or the 

certificate holder meet the conditions in 

paragraph (a) of this section. Otherwise, 

the importer must comply with the 

bond requirements of this section. 

Definitions and Other Reference 

Information 

§ 59.680 What definitions apply to this 

subpart? 

The following definitions apply to 

this subpart. The definitions apply to all 

subparts unless we note otherwise. All 

undefined terms have the meaning the 

Act gives to them. The definitions 

follow: 

Act means the Clean Air Act, as 

amended, 42 U.S.C. 7401–7671q. 

Adjustable parameter means any 

device, system, or element of design that 

someone can adjust and that, if 

adjusted, may affect emissions. You may 

ask us to exclude a parameter if you 

show us that it will not be adjusted in 

use in a way that affects emissions. 

Certification means relating to the 

process of obtaining a certificate of 

conformity for an emission family that 

complies with the emission standards 

and requirements in this subpart. 

Configuration means a unique 

combination of hardware (material, 

geometry, and size) and calibration 

within an emission family. Units within 

a single configuration differ only with 

respect to normal production variability. 

Container means portable fuel 

container. 

Designated Compliance Officer means 

the Manager, Engine Programs Group 

(6403–J), U.S. Environmental Protection 

Agency, 1200 Pennsylvania Ave., NW., 

Washington, DC 20460. 

Designated Enforcement Officer 

means the Director, Air Enforcement 

Division (2242A), U.S. Environmental 

Protection Agency, 1200 Pennsylvania 

Ave., NW.,Washington, DC 20460. 

Emission-control system means any 

device, system, or element of design that 

controls or reduces the regulated 

evaporative emissions from. 

Emission-data unit means a portable 

fuel container that is tested for 

certification. This includes components 

tested by EPA. 

Emission-related maintenance means 

maintenance that substantially affects 

emissions or is likely to substantially 

affect emission deterioration. 

Emission family has the meaning 

given in § 59.625. 

Evaporative means relating to fuel 

emissions that result from permeation of 

fuel through the portable fuel container 

materials and from ventilation of the 

container. 

Good engineering judgment means 

judgments made consistent with 

generally accepted scientific and 

engineering principles and all available 

relevant information. See § 59.603 for 

the administrative process we use to 

evaluate good engineering judgment. 

Hydrocarbon (HC) means total 

hydrocarbon (THC). 

Manufacture means the physical and 

engineering process of designing and/or 

constructing a portable fuel container. 

Manufacturer means any person who 

manufactures a portable fuel container 

for sale in the United States. 

Nominal capacity means the expected 

volumetric working capacity of a 

container. 

Official emission result means the 

measured emission rate for an emissiondata unit. 

Portable fuel container means any 

reusable container designed and 

marketed (or otherwise intended) for 

use by consumers for receiving, 

transporting, storing, and dispensing 

gasoline, diesel fuel, or kerosene. For 

the purpose of this subpart, all utility 

jugs that are red, yellow or blue in color 

are deemed to be portable fuel 

containers, regardless of how they are 

labeled or marketed. 

Production period means the period 

in which a portable fuel container will 

be produced under a certificate of 

conformity. The maximum production 

period is five years. 

Revoke means to terminate the 

certificate or an exemption for an 

emission family. If we revoke a 

certificate or exemption, you must apply 

for a new certificate or exemption before 

continuing to introduce the affected 


pwalker on PROD1PC71 with RULES_2
8542 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

containers into commerce. This does not 

apply to containers you no longer 

possess. 

Round has the meaning given in 40 

CFR 1065.1001. 

Suspend means to temporarily 

discontinue the certificate or an 

exemption for an emission family. If we 

suspend a certificate, you may not 

introduce into commerce portable fuel 

containers from that emission family 

unless we reinstate the certificate or 

approve a new one. If we suspend an 

exemption, you may not introduce into 

commerce containers that were 

previously covered by the exemption 

unless we reinstate the exemption. 

Total hydrocarbon means the 

combined mass of organic compounds 

measured by the specified procedure for 

measuring total hydrocarbon, expressed 

as a hydrocarbon with a hydrogen-tocarbon mass ratio of 1.85:1. 

Ultimate purchaser means, with 

respect to any portable fuel container, 

the first person who in good faith 

purchases such a container for purposes 

other than resale. 

Ultraviolet light means 

electromagnetic radiation with a 

wavelength between 300 and 400 

nanometers. 

United States means the States, the 

District of Columbia, the 

Commonwealth of Puerto Rico, the 

Commonwealth of the Northern Mariana 

Islands, Guam, American Samoa, and 

the U.S. Virgin Islands. 

U.S.-directed production volume 

means the amount of portable fuel 

containers, subject to the requirements 

of this subpart, produced by a 

manufacturer for which the 

manufacturer has a reasonable 

assurance that sale was or will be made 

to ultimate purchasers in the United 

States. 

Useful life means the period during 

which a portable fuel container is 

required to comply with all applicable 

emission standards. See § 59.611. 

Void means to invalidate a certificate 

or an exemption ab initio (i.e. 

retroactively). Portable fuel containers 

introduced into U.S. commerce under 

the voided certificate or exemption is a 

violation of this subpart, whether or not 

they were introduced before the 

certificate or exemption was voided. 

We (us, our) means the Administrator 

of the Environmental Protection Agency 

and any authorized representatives. 

§ 59.685 What symbols, acronyms, and 

abbreviations does this subpart use? 

The following symbols, acronyms, 

and abbreviations apply to this subpart: 

CFR Code of Federal Regulations 

EPA Environmental Protection Agency 

HC hydrocarbon 

NIST National Institute of Standards 

and Technology 

THC total hydrocarbon 

U.S.C. United States Code 

§ 59.695 What provisions apply to 

confidential information? 

(a) Clearly show what you consider 

confidential by marking, circling, 

bracketing, stamping, or some other 

method. 

(b) We will store your confidential 

information as described in 40 CFR part 

2. Also, we will disclose it only as 

specified in 40 CFR part 2. This applies 

both to any information you send us and 

to any information we collect from 

inspections, audits, or other site visits. 

(c) If you send us a second copy 

without the confidential information, 

we will assume it contains nothing 

confidential whenever we need to 

release information from it. 

(d) If you send us information without 

claiming it is confidential, we may make 

it available to the public without further 

notice to you, as described in 40 CFR 

2.204. 

§ 59.697 State actions. 

The provisions in this subpart do not 

preclude any State or any political 

subdivision of a State from: 

(a) Adopting and enforcing any 

emission standard or limitation 

applicable to anyone subject to the 

provisions of this part; or 

(b) Requiring the regulated entity to 

obtain permits, licenses, or approvals 

prior to initiating construction, 

modification, or operation of a facility 

for manufacturing a consumer product. 

§ 59.698 May EPA enter my facilities for 

inspections? 

(a) We may inspect your portable fuel 

containers, testing, manufacturing 

processes, storage facilities (including 

port facilities for imported containers or 

other relevant facilities), or records, as 

authorized by the Act, to enforce the 

provisions of this subpart. Inspectors 

will have authorizing credentials and 

will limit inspections to reasonable 

times—usually, normal operating hours. 

(b) If we come to inspect, we may or 

may not have a warrant or court order. 

(1) If we do not have a warrant or 

court order, you may deny us entry. 

(2) If we have a warrant or court 

order, you must allow us to enter the 

facility and carry out the activities it 

describes. 

(c) We may seek a warrant or court 

order authorizing an inspection 

described in this section, whether or not 

we first tried to get your permission to 

inspect. 

(d) We may select any facility to do 

any of the following: 

(1) Inspect and monitor any aspect of 

portable fuel container manufacturing, 

assembly, storage, or other procedures, 

and any facilities where you do them. 

(2) Inspect and monitor any aspect of 

test procedures or test-related activities, 

including test container selection, 

preparation, durability cycles, and 

maintenance and verification of your 

test equipment’s calibration. 

(3) Inspect and copy records or 

documents related to assembling, 

storing, selecting, and testing a 

container. 

(4) Inspect and photograph any part or 

aspect of containers or components use 

for assembly. 

(e) You must give us reasonable help 

without charge during an inspection 

authorized by the Act. For example, you 

may need to help us arrange an 

inspection with the facility’s managers, 

including clerical support, copying, and 

translation. You may also need to show 

us how the facility operates and answer 

other questions. If we ask in writing to 

see a particular employee at the 

inspection, you must ensure that he or 

she is present (legal counsel may 

accompany the employee). 

(f) If you have facilities in other 

countries, we expect you to locate them 

in places where local law does not keep 

us from inspecting as described in this 

section. We will not try to inspect if we 

learn that local law prohibits it, but we 

may suspend your certificate if we are 

not allowed to inspect. 

§ 59.699 How do I request a hearing? 

(a) You may request a hearing under 

certain circumstances, as described 

elsewhere in this subpart. To do this, 

you must file a written request with the 

Designated Compliance Officer, 

including a description of your 

objection and any supporting data, 

within 30 days after we make a 

decision. 

(b) For a hearing you request under 

the provisions of this subpart, we will 

approve your request if we find that 

your request raises a substantial factual 

issue. 

(c) If we agree to hold a hearing, we 

will use the procedures specified in 40 

CFR part 1068, subpart G. 

PART 80—REGULATION OF FUELS 

AND FUEL ADDITIVES 

■ 3. The authority citation for part 80 is 

revised to read as follows: 

Authority: 42 U.S.C. 7414, 7521(1), 7545 

and 7601(a). 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8543 

Subpart D—[Amended] 

■ 4. Section 80.41 is amended as 

follows: 

■ a. By redesignating paragraph (e) as 

paragraph (e)(1). 

■ b. By adding paragraphs (e)(2) and 

(e)(3). 

■ c. By redesignating paragraph (f) as 

paragraph (f)(1). 

■ d. By adding paragraphs (f)(2) and 

(f)(3). 

§ 80.41 Standards and requirements for 

compliance. 

* * * * * 

(e) * * * 

(2)(i) The NOX emissions performance 

reduction specified in paragraph (e)(1) 

of this section shall no longer apply 

beginning January 1, 2007, except as 

provided in paragraph (e)(2)(ii) of this 

section. 

(ii) For a refiner subject to the small 

refiner gasoline sulfur standards at 

§ 80.240, the NOX emissions 

performance reduction specified in 

paragraph (e)(1) of this section shall no 

longer apply beginning January 1, 2008. 

For a refiner subject to the gasoline 

sulfur standards at § 80.240 that has 

received an extension of its small refiner 

gasoline sulfur standards under 

§ 80.553, the NOX emissions 

performance reduction specified in 

paragraph (e)(1) of this section shall no 

longer apply beginning January 1, 2011. 

(3)(i) Beginning January 1, 2011, or 

January 1, 2015 for small refiners 

approved under § 80.1340, the toxic air 

pollutants emissions performance 

reduction and benzene content specified 

in paragraph (e)(1) of this section shall 

apply to reformulated gasoline that is 

not subject to the benzene standard of 

§ 80.1230, pursuant to the provisions of 

§ 80.1235. 

(ii) The toxic air pollutants emissions 

performance reduction and benzene 

content specified in paragraph (e)(1) of 

this section shall not apply to 

reformulated gasoline produced by a 

refinery approved under § 80.1334, 

pursuant to § 80.1334(c). 

(f) * * * 

(2)(i) The NOX emissions performance 

reduction specified in paragraph (f)(1) of 

this section shall no longer apply 

beginning January 1, 2007, except as 

provided in paragraph (f)(2)(ii) of this 

section. 

(ii) For a refiner subject to the small 

refiner gasoline sulfur standards at 

§ 80.240, the NOX emissions 

performance reduction specified in 

paragraph (f)(1) of this section shall no 

longer apply beginning January 1, 2008. 

For a refiner subject to the gasoline 

sulfur standards at § 80.240 that has 

received an extension of its small refiner 

gasoline sulfur standards under 

§ 80.553, the NOX emissions 

performance reduction specified in 

paragraph (f)(1) of this section shall no 

longer apply beginning January 1, 2011. 

(3)(i) Beginning January 1, 2011, or 

January 1, 2015 for small refiners 

approved under § 80.1340, the toxic air 

pollutants emissions performance 

reduction and benzene content specified 

in paragraph (f)(1) of this section shall 

apply only to reformulated gasoline that 

is not subject to the benzene standard of 

§ 80.1230, pursuant to the provisions of 

§ 80.1235. 

(ii) The toxic air pollutants emissions 

performance reduction and benzene 

content specified in paragraph (f)(1) of 

this section shall not apply to 

reformulated gasoline produced by a 

refinery approved under § 80.1334, 

pursuant to § 80.1334(c). 

* * * * * 

■ 5. Section 80.68 is amended as 

follows: 

■ a. By redesignating paragraphs (a) 

through (c) as paragraphs (b) through 

(d), respectively. 

■ b. By adding new paragraph (a). 

■ c. In newly designated paragraph 

(b)(2) revise the reference ‘‘(c)’’ to read 

‘‘(d)’’. 

■ d. In newly designated paragraph (c) 

introductory text revise the reference 

‘‘(a)’’ to read ‘‘(b)’’. 

■ e. In newly designated paragraph 

(c)(2)(i) revise the reference ‘‘(b)(1)’’ to 

read ‘‘(c)(1)’’. 

■ f. In newly designated paragraph 

(c)(2)(ii) revise the reference ‘‘(c)’’ to 

read ‘‘(d)’’, revise all references ‘‘(b)(1)’’

to read ‘‘(c)(1)’’, and revise all references 

‘‘(b)(2)(i)’’ to read ‘‘(c)(2)(i)’’. 

■ g. In newly designated paragraph 

(c)(3) revise the reference ‘‘(c)’’ to read 

‘‘(d)’’. 

■ h. In newly designated paragraph 

(c)(4)(i) revise the reference ‘‘(a)’’ to read 

‘‘(b)’’. 

■ i. In newly designated paragraph 

(d)(1)(ii)(A) revise the reference ‘‘(c)(6)’’

to read ‘‘(d)(6)’’. 

■ j. In newly designated paragraph 

(d)(1)(ii)(B) revise the reference ‘‘(c)(6)’’

to read ‘‘(d)(6)’’. 

■ k. In newly designated paragraph 

(d)(2)(i) revise the reference ‘‘(c)(6)’’ to 

read ‘‘(d)(6)’’. 

■ l. In newly designated paragraph 

(d)(8)(i)(C) revise the reference 

‘‘(c)(8)(i)(B)’’ to read ‘‘(d)(8)(i)(B)’’. 

■ m. In newly designated paragraph 

(d)(9)(ii)(B) revise the reference 

‘‘(c)(9)(i)(B)’’ to read ‘‘(d)(9)(i)(B)’’. 

■ n. In newly designated paragraph 

(d)(10)(v) revise the reference 

‘‘(c)(10)(iv)’’ to read ‘‘(d)(10)(iv)’’. 

■ o. In newly designated paragraph 

(d)(11)(ii) revise the reference 

‘‘(c)(11)(i)’’ to read ‘‘(d)(11)(i)’’. 

■ p. In newly designated paragraph 

(d)(13)(v)(G) revise the reference 

‘‘(c)(8)(i)’’ to read ‘‘(d)(8)(i)’’. 

§ 80.68 Compliance surveys. 

(a)(1) Beginning January 1, 2007, the 

compliance surveys for NOX emissions 

performance under this section shall 

cease to be required. 

(2) Beginning January 1, 2011, the 

compliance surveys for toxics emissions 

performance under this section shall 

cease to be required. 

* * * * * 

Subpart E—[Amended] 

■ 6. Section 80.101 is amended by 

adding paragraphs (c)(3) and (c)(4) to 

read as follows: 

§ 80.101 Standards applicable to refiners 

and importers. 

* * * * * 

(c) * * * 

(3)(i) The NOX emissions standard 

specified in paragraph (b)(3)(i) of this 

section shall no longer apply beginning 

January 1, 2007, except as provided in 

paragraph (c)(3)(ii) of this section. 

(ii) For a refiner subject to the small 

refiner gasoline sulfur standards at 

§ 80.240, the NOX emissions standard 

specified in paragraph (b)(3)(i) of this 

section shall no longer apply beginning 

January 1, 2008. For a refiner subject to 

the gasoline sulfur standards at § 80.240 

that has received an extension of its 

small refiner gasoline sulfur standards 

under § 80.553, the NOX emissions 

standard specified in paragraph (b)(3)(i) 

of this section shall no longer apply 

beginning January 1, 2011. 

(4)(i) Beginning January 1, 2011, or 

January 1, 2015 for small refiners 

approved under § 80.1340, the exhaust 

toxics emissions standard specified in 

paragraph (b)(3)(i) of this section shall 

apply only to conventional gasoline that 

is not subject to the benzene standard of 

§ 80.1230, pursuant to the provisions of 

§ 80.1235. 

(ii) The exhaust toxic emissions 

standard specified in paragraph (b)(3)(i) 

of this section shall not apply to 

conventional gasoline produced by a 

refinery approved under § 80.1334, 

pursuant to § 80.1334(c). 

* * * * * 

Subpart F—[Amended] 

■ 7. Section 80.128 is amended by 

revising paragraph (a) to read as follows: 


pwalker on PROD1PC71 with RULES_2
8544 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

§ 80.128 Alternative agreed upon 

procedures for refiners and importers. 

* * * * * 

(a) Read the refiner’s or importer’s 

reports filed with EPA for the previous 

year as required by §§ 80.75, 80.83(g), 

80.105, 80.990 and 80.1354. 

* * * * * 

Subpart J—[Amended] 

■ 8. Section 80.815 is amended by 

redesignating paragraph (d)(1) as 

paragraph (d)(1)(i) and adding 

paragraph (d)(1)(ii) to read as follows: 

§ 80.815 What are the gasoline toxics 

performance requirements for refiners and 

importers? 

* * * * * 

(d) * * * 

(1) * * * 

(ii)(A) Beginning January 1, 2011, or 

January 1, 2015 for small refiners 

approved under § 80.1340, the gasoline 

toxics performance requirements of this 

subpart shall apply only to gasoline that 

is not subject to the benzene standard of 

§ 80.1230, pursuant to the provisions of 

§ 80.1235. 

(B) The gasoline toxics performance 

requirements of this subpart shall not 

apply to gasoline produced by a refinery 

approved under § 80.1334, pursuant to 

§ 80.1334(c). 

* * * * * 

■ 9. Section 80.1035 is amended by 

adding paragraph (h) to read as follows: 

§ 80.1035 What are the attest engagement 

requirements for gasoline toxics 

compliance applicable to refiners and 

importers? 

* * * * * 

(h) Beginning January 1, 2011, or 

January 1, 2015 for small refiners 

approved per § 80.1340, the 

requirements of this section shall apply 

only to gasoline that is not subject to the 

benzene standard of § 80.1230, pursuant 

to the provisions of § 80.1235. 

■ 10. Subpart L is added to read as 

follows: 

Subpart L—Gasoline Benzene 

Sec. 

80.1200–80.1219 [Reserved] 

General Information 

80.1220 What are the implementation dates 

for the gasoline benzene program? 

80.1225 Who must register with EPA under 

the gasoline benzene program? 

Gasoline Benzene Requirements 

80.1230 What are the gasoline benzene 

requirements for refiners and importers? 

80.1235 What gasoline is subject to the 

benzene requirements of this subpart? 

80.1236 What requirements apply to 

California gasoline? 

80.1238 How is a refinery’s or importer’s 

average benzene concentration 

determined? 

80.1240 How is a refinery’s or importer’s 

compliance with the gasoline benzene 

requirements of this subpart determined? 

Averaging, Banking and Trading (ABT) 

Program 

80.1270 Who may generate benzene credits 

under the ABT program? 

80.1275 How are early benzene credits 

generated? 

80.1280 How are refinery benzene baselines 

calculated? 

80.1285 How does a refiner apply for a 

benzene baseline? 

80.1290 How are standard benzene credits 

generated? 

80.1295 How are gasoline benzene credits 

used? 

Hardship Provisions 

80.1334 What are the requirements for early 

compliance with the gasoline benzene 

program? 

80.1335 Can a refiner seek relief from the 

requirements of this subpart? 

80.1336 What if a refiner or importer cannot 

produce gasoline conforming to the 

requirements of this subpart? 

Small Refiner Provisions 

80.1338 What criteria must be met to 

qualify as a small refiner for the gasoline 

benzene requirements of this subpart? 

80.1339 Who is not eligible for the 

provisions for small refiners? 

80.1340 How does a refiner obtain approval 

as a small refiner? 

80.1342 What compliance options are 

available to small refiners under this 

subpart? 

80.1343 What hardship relief provisions are 

available only to small refiners? 

80.1344 What provisions are available to a 

non-small refiner that acquires one or 

more of a small refiner’s refineries? 

Sampling, Testing and Retention 

Requirements 

80.1347 What are the sampling and testing 

requirements for refiners and importers? 

80.1348 What gasoline sample retention 

requirements apply to refiners and 

importers? 

Recordkeeping and Reporting Requirements 

80.1350 What records must be kept? 

80.1352 What are the pre-compliance 

reporting requirements for the gasoline 

benzene program? 

80.1354 What are the reporting 

requirements for the gasoline benzene 

program? 

Attest Engagements 

80.1356 What are the attest engagement 

requirements for gasoline benzene 

compliance? 

Violations and Penalties 

80.1358 What acts are prohibited under the 

gasoline benzene program? 

80.1359 What evidence may be used to 

determine compliance with the 

prohibitions and requirements of this 

subpart and liability for violations of this 

subpart? 

80.1360 Who is liable for violations under 

the gasoline benzene program? 

80.1361 What penalties apply under the 

gasoline benzene program? 

Foreign Refiners 

80.1363 What are the additional 

requirements under this subpart for 

gasoline produced at foreign refineries? 

Subpart L—Gasoline Benzene 

§§ 80.1200–80.1219 [Reserved] 

General Information 

§ 80.1220 What are the implementation 

dates for the gasoline benzene program? 

(a) Benzene standard. (1) For the 

annual averaging period beginning 

January 1, 2011, and for each annual 

averaging period thereafter, gasoline 

produced at each refinery of a refiner or 

imported by an importer, must meet the 

benzene standard specified in 

§ 80.1230(a), except as otherwise 

specifically provided for in this subpart. 

(2) For the period July 1, 2012 through 

December 31, 2013, and for each annual 

averaging period thereafter, gasoline 

produced at each refinery of a refiner or 

imported by an importer, must meet the 

maximum average benzene standard 

specified in § 80.1230(b), except as 

otherwise specifically provided for in 

this subpart. 

(3) Small refiners approved under 

§ 80.1340 may defer meeting the 

benzene standard specified in 

§ 80.1230(a) until the annual averaging 

period beginning January 1, 2015 and 

may defer meeting the benzene standard 

specified in § 80.1230(b) until the 

averaging period beginning July 1, 2016, 

as described in § 80.1342. 

(b) Early credit generation. (1) 

Effective with the averaging period 

beginning June 1, 2007, a refiner for 

each of its refineries that has an 

approved benzene baseline per 

§ 80.1285 may generate early benzene 

credits in accordance with the 

provisions of § 80.1275. 

(2) Early benzene credits may be 

generated through the end of the 

averaging period ending December 31, 

2010, or through the end of the 

averaging period ending December 31, 

2014 for small refiners approved under 

§ 80.1340. 

(c) Standard credit generation. (1) 

Effective with the annual averaging 

period beginning January 1, 2011, a 

refiner for any of its refineries or an 

importer for its imported gasoline, may 

generate standard benzene credits in 

accordance with the provisions of 

§ 80.1290. 

(2) Effective with the annual 

averaging period beginning January 1, 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8545 

2015, a small refiner approved under 

§ 80.1340, for any of its refineries, may 

generate standard benzene credits in 

accordance with the provisions of 

§ 80.1290. 

§ 80.1225 Who must register with EPA 

under the gasoline benzene program? 

(a) Refiners and importers that are 

registered by EPA under § 80.76, 

§ 80.103, § 80.190, or § 80.810 are 

deemed to be registered for purposes of 

this subpart. 

(b) Refiners and importers subject to 

the requirements in § 80.1230 that are 

not registered by EPA under §§ 80.76, 

80.103, 80.190 or 80.810 shall provide 

to EPA the information required in 

§ 80.76 by September 30, 2010, or not 

later than three months in advance of 

the first date that such person produces 

or imports gasoline, whichever is later. 

(c) Refiners that plan to generate early 

credits under § 80.1275 and that are not 

registered by EPA under §§ 80.76, 

80.103, 80.190, or 80.810 must provide 

to EPA the information required in 

§ 80.76 not later than 60 days prior to 

the end of the first year of credit 

generation. 

Gasoline Benzene Requirements 

§ 80.1230 What are the gasoline benzene 

requirements for refiners and importers? 

(a) Annual average benzene standard. 

(1) Except as specified in paragraph (c) 

of this section, a refinery’s or importer’s 

average gasoline benzene concentration 

in any annual averaging period shall not 

exceed 0.62 volume percent. 

(2) Compliance with the standard 

specified in paragraph (a)(1) of this 

section, or creation of a deficit in 

accordance with paragraph (c) of this 

section, is determined in accordance 

with § 80.1240(a). 

(3) The annual averaging period for 

achieving compliance with the 

requirement of paragraph (a)(1) of this 

section is January 1 through December 

31 of each calendar year beginning 

January 1, 2011, or beginning January 1, 

2015 for small refiners approved under 

§ 80.1340. 

(4) Refinery grouping per § 80.101(h) 

does not apply to compliance with the 

gasoline benzene requirement specified 

in this paragraph (a). 

(5) Gasoline produced at foreign 

refineries that is subject to the gasoline 

benzene requirements per § 80.1235 

shall be included in the importer’s 

compliance determination beginning 

January 1, 2011, or beginning January 1, 

2015 for small foreign refiners approved 

under § 80.1340. 

(b) Maximum average benzene 

standard. (1) A refinery’s or importer’s 

maximum average gasoline benzene 

concentration in any averaging period 

shall not exceed 1.30 volume percent. 

(2) Compliance with the standard 

specified in paragraph (b)(1) of this 

section is determined in accordance 

with § 80.1240(b). 

(3) The averaging period for achieving 

compliance with the requirement of 

paragraph (b)(1) of this section is July 1, 

2012 through December 31, 2013 and 

each calendar year thereafter, or July 1, 

2016 through December 31, 2017, and 

each calendar year thereafter for small 

refiners approved under § 80.1340. 

(c) Deficit carry-forward. (1) A 

refinery or importer creates a benzene 

deficit for a given averaging period 

when its compliance benzene value, per 

§ 80.1240(a), is greater than the benzene 

standard specified in paragraph (a) of 

this section. 

(2) A refinery or importer may carry 

the benzene deficit forward to the 

calendar year following the year the 

benzene deficit is created but only if no 

deficit had been previously carried 

forward to the year the deficit is created. 

If a refinery or importer carries forward 

a deficit, the following provisions apply 

in the second year: 

(i) The refinery or importer must 

achieve compliance with the benzene 

standard specified in paragraph (a) of 

this section. 

(ii) The refinery or importer must 

achieve further reductions in its 

gasoline benzene concentrations 

sufficient to offset the benzene deficit of 

the previous year. 

(iii) Benzene credits may be used, per 

§ 80.1295, to meet the requirements of 

paragraphs (c)(2)(i) and (ii) of this 

section. 

(iv) A refinery that has banked credits 

per § 80.1295(a)(3) must use all of its 

banked credits to achieve compliance 

with the benzene standard specified in 

paragraph (a) of this section before 

creating a deficit. 

(3) EPA may allow an extended 

period of deficit carry-forward if it 

grants hardship relief under §§ 80.1335 

or 80.1336 from the annual average 

standard specified in paragraph (a) of 

this section. 

§ 80.1235 What gasoline is subject to the 

benzene requirements of this subpart? 

(a) For the purposes of determining 

compliance with the requirements of 

§ 80.1230, all of the following products 

that are produced or imported for use in 

the United States during a refinery’s or 

importer’s applicable compliance period 

are collectively ‘‘gasoline’’ and are to be 

included in a refinery’s or importer’s 

compliance determination under 

§ 80.1240, except as provided in 

paragraph (b) of this section: 

(1) Reformulated gasoline. 

(2) Conventional gasoline. 

(3) Reformulated gasoline blendstock 

for oxygenate blending (‘‘RBOB’’). 

(4) Conventional gasoline blendstock 

that becomes finished conventional 

gasoline upon the addition of oxygenate 

(‘‘CBOB’’). 

(5) Blendstock that has been 

combined with finished gasoline, other 

blendstock, transmix, or gasoline 

produced from transmix to produce 

gasoline. 

(6) Blendstock that has been 

combined with previously certified 

gasoline (‘‘PCG’’) to produce gasoline. 

Such blendstock must be sampled in 

accordance with the provisions at 

§ 80.1347(a)(5). 

(b) The following products are not to 

be included in a refinery’s or importer’s 

compliance determination under 

§ 80.1240: 

(1) Blendstock that has not been 

combined with other blendstock or 

finished gasoline to produce gasoline. 

(2) Oxygenate added to finished 

gasoline, RBOB, or CBOB downstream 

of the refinery that produced the 

gasoline or import facility where the 

gasoline was imported. 

(3) Butane added to finished gasoline, 

RBOB, CBOB downstream of the 

refinery that produced the gasoline or 

import facility where the gasoline was 

imported. 

(4) Gasoline produced by separating 

gasoline from transmix. 

(5) PCG. 

(6) Gasoline produced or imported for 

use in Guam, American Samoa, and the 

Commonwealth of the Northern Mariana 

Islands. 

(7) Gasoline exported for use outside 

the United States. 

(8) Gasoline produced by a small 

refiner approved under § 80.1340 prior 

to January 1, 2015, or prior to the small 

refiner’s first compliance period 

pursuant to § 80.1342(a), whichever is 

earlier. 

(9) Gasoline that is used to fuel 

aircraft, racing vehicles or racing boats 

that are used only in sanctioned racing 

events, provided that —

(i) 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 events; 

(ii) The gasoline is completely 

segregated from all other gasoline 

throughout production, distribution and 

sale to the ultimate consumer; and 

(iii) The gasoline is not made 

available for use as motor vehicle 


pwalker on PROD1PC71 with RULES_2
8546 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

gasoline, or dispensed for use in motor 

vehicles, except for motor vehicles used 

only in sanctioned racing events. 

(10) California gasoline, as defined in 

§ 80.1236. 

§ 80.1236 What requirements apply to 

California gasoline? 

(a) Definition. For purposes of this 

subpart, ‘‘California gasoline’’ means 

any gasoline designated by the refiner or 

importer as for use only in California 

and that is actually used in California. 

(b) California gasoline exemption. 

California gasoline that complies with 

all the requirements of this section is 

exempt from the requirements in 

§ 80.1230. 

(c) Requirements for California 

gasoline. The following requirements 

apply to California gasoline: 

(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 in the 

United States. 

(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). 

(5) Gasoline that is ultimately used in 

any part of the United States outside of 

the State of California must comply with 

the requirements specified in § 80.1230, 

regardless of any designation as 

California gasoline. 

§ 80.1238 How is a refinery’s or importer’s 

average benzene concentration 

determined? 

(a) The average benzene concentration 

of gasoline produced at a refinery or 

imported by an importer for an 

applicable averaging period is 

calculated according to the following 

equation: 

B

V B

V

avg

i i

i

n

i

i

n =

( ) × =

=

∑

∑

1

1

Where: 

Bavg = Average benzene concentration for the 

applicable averaging period (volume 

percent benzene). 

i = Individual batch of gasoline produced at 

the refinery or imported during the 

applicable averaging period. 

n = Total number of batches of gasoline 

produced at the refinery or imported 

during the applicable annual averaging 

period. 

Vi = Volume of gasoline in batch i (gallons). 

Bi = Benzene concentration of batch i 

(volume percent benzene), per § 80.46(e). 

(b) A refiner or importer may include 

the volume of oxygenate added 

downstream from the refinery or import 

facility in the calculation specified in 

paragraph (a) of this section, 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) and 

the calculation methodologies of 

§ 80.101(g)(3). 

(2) For oxygenate added to RBOB, the 

refiner or importer must comply with 

the requirements of § 80.69(a). 

(c) Refiners and importers must 

exclude from the calculation specified 

in paragraph (a) of this section all of the 

following: 

(1) Gasoline that was not produced at 

the refinery or imported by the 

importer. 

(2) Except as provided in paragraph 

(b) of this section, any blendstocks or 

unfinished gasoline transferred to 

others. 

(3) Gasoline that has been included in 

the compliance calculations for another 

refinery or importer. 

(4) Gasoline exempted from the 

standards under § 80.1235(b). 

§ 80.1240 How is a refinery’s or importer’s 

compliance with the gasoline benzene 

requirements of this subpart determined? 

(a) A refinery’s or importer’s 

compliance with the annual average 

benzene standard at § 80.1230(a) is 

determined as follows: 

(1)(i) The compliance benzene value 

for a refinery or importer is: 

CBV V

B

y y D BC OC avg y = × y





 



 + −− −

,

100 1

Where: 

CBVy = Compliance benzene value (gallons 

benzene) for year y. 

Vy = Gasoline volume produced or imported 

in year y (gallons). 

Bavg,y = Average benzene concentration in 

year y (volume percent benzene), 

calculated in accordance with § 80.1238. 

Dy-1 = Benzene deficit from the previous 

reporting period, per § 80.1230(c) 

(gallons benzene). 

BC = Banked benzene credits used to show 

compliance (gallons benzene). 

OC = Benzene credits obtained by the 

refinery or importer used to show 

compliance (gallons benzene). 

(ii) Benzene credits used in the 

calculation specified in paragraph 

(a)(1)(i) of this section must be used in 

accordance with the requirements at 

§ 80.1295. 

(2)(i) If CBVy ≤ Vy × (0.62)/100, then 

compliance with the benzene 

requirement at § 80.1230(a) is achieved 

for calendar year y. 

(ii) If CBVy > Vy × (0.62)/100, then 

compliance with the benzene 

requirement at § 80.1230(a) is not 

achieved for calendar year y, and a 

deficit is created per § 80.1230(c). The 

deficit value to be included in the 

following year’s compliance calculation 

per paragraph (a) of this section is 

calculated as follows: 

D CBV V y yy = −×



 



 0 62

100

.

Where: 

Dy = Benzene deficit created in compliance 

period y (gallons benzene). 

(b) Compliance with the maximum 

average benzene standard at 

§ 80.1230(b) is achieved by a refinery or 

importer if the value of Bavg calculated 

in accordance with § 80.1238(a) is no 

greater 1.30 volume percent for an 

applicable averaging period per 

§ 80.1230(b)(3). 

Averaging, Banking and Trading (ABT) 

Program 

§ 80.1270 Who may generate benzene 

credits under the ABT program? 

(a) Early benzene credits. Early 

benzene credits are credits generated 

prior to 2011, or prior to 2015 if 

generated by a small refiner approved 

under § 80.1340. 

(1)(i) Early credits may be generated 

under § 80.1275 by a refiner for any 

refinery it owns that has an approved 

benzene baseline under § 80.1285, 

including a refinery of a foreign refiner 

that is subject to the provisions of 

§ 80.1363. 

(ii) The refinery specified in 

paragraph (a)(1)(i) of this section must 

process crude oil and/or intermediate 

feedstocks through refinery processing 

units. 

(iii) Early benzene credits shall be 

calculated separately for each refinery of 

a refiner. 

(iv) A refinery that is approved for 

early compliance under § 80.1334 may 

not generate early credits for the 

gasoline subject to the early compliance 

provisions. 

(2)(i) A refinery that was shut down 

during the entire 2004–2005 benzene 

baseline period is not eligible to 

generate early credits under § 80.1275. 

(ii) A refinery not in full production, 

excluding normal refinery downtime, or 

not showing consistent or regular 

gasoline production activity during 

2004–2005 may be eligible to generate 

early benzene credits under § 80.1275 

upon petition to and approval by EPA, 

pursuant to § 80.1285(d). 


pwalker on PROD1PC71 with RULES_2ER26FE07.012</MATH> ER26FE07.013</MATH> ER26FE07.014</MATH>
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8547 

(3) Importers may not generate early 

credits. 

(b) Standard benzene credits. 

Standard benzene credits are credits 

generated after 2010, or after 2014 if 

generated by a small refiner approved 

under § 80.1340. 

(1) Unless otherwise provided for 

elsewhere in this subpart, standard 

credits may be generated under 

§ 80.1290 as follows: 

(i) A refiner may generate standard 

credits separately for each of its 

refineries. 

(ii) An importer may generate 

standard credits for all of its imported 

gasoline. 

(2) Oxygenate blenders, butane 

blenders, and transmix producers may 

not generate standard credits. 

(3) Foreign refiners may not generate 

standard credits. 

§ 80.1275 How are early benzene credits 

generated? 

(a) For each averaging period per 

paragraph (b) of this section in which a 

refinery plans to generate early credits, 

its average gasoline benzene 

concentration calculated according to 

§ 80.1238(a) must be at least 10% lower 

than its benzene baseline concentration 

approved under § 80.1280. 

(b) The early credit averaging periods 

are as follows: 

(1) For 2007, the seven-month period 

from June 1, 2007 through December 31, 

2007. 

(2) For 2008, 2009 and 2010, the 12- 

month calendar year. 

(3) For small refiners approved under 

§ 80.1340, the 12-month calendar years 

2011, 2012, 2013, and 2014 in addition 

to the periods specified in paragraphs 

(b)(1) and (b)(2) of this section. 

(c) The number of early benzene 

credits generated shall be calculated for 

each applicable averaging period as 

follows: 

EC

B B

y V Base avg y = e y

 −



 



 × ,

, 100

Where: 

ECy = Early credits generated in averaging 

period y (gallons benzene). 

BBase = Baseline benzene concentration of the 

refinery (volume percent benzene), per 

§ 80.1280(a). 

Bavg,y = Average benzene concentration of 

gasoline produced at the refinery during 

averaging period y (volume percent 

benzene), per § 80.1238. 

Ve,y = Total volume of gasoline produced at 

the refinery during averaging period y 

(gallons). 

(d) A refinery that plans to generate 

early credits must also show that it has 

met all of the following requirements 

prior to or during the first early credit 

averaging period, per paragraph (b) of 

this section, in which it generates early 

credits: 

(1) Since 2005, has made operational 

changes and/or improvements in 

benzene control technology to reduce 

gasoline benzene levels, including at 

least one of the following: 

(i) Treating the heavy straight run 

naphtha entering the reformer using 

light naphtha splitting and/or 

isomerization. 

(ii) Treating the reformate stream 

exiting the reformer using benzene 

extraction or benzene saturation. 

(iii) Directing additional refinery 

streams to the reformer for treatment 

described paragraphs (d)(1)(i) and (ii) of 

this section. 

(iv) Directing reformate streams to 

other refineries with treatment 

capabilities described in paragraph 

(d)(1)(ii) of this section. 

(2) Has not included gasoline 

blendstock streams transferred to, from, 

or between refineries, except as noted in 

paragraph (d)(1)(iv) of this section. 

(e) Early benzene credits calculated in 

accordance with paragraph (c) of this 

section shall be expressed to the nearest 

gallon. Fractional values shall be 

rounded down if less than 0.50, and 

rounded up if greater than or equal to 

0.50. 

§ 80.1280 How are refinery benzene 

baselines calculated? 

(a) A refinery’s benzene baseline is 

based on the refinery’s 2004–2005 

average gasoline benzene concentration, 

calculated according to the following 

equation: 

B

V B

V

Base

i i

i

n

i

i

n =

( ) × =

=

∑

∑

1

1

Where: 

BBase = Benzene baseline concentration 

(volume percent benzene). 

i = Individual batch of gasoline produced at 

the refinery from January 1, 2004 

through December 31, 2005. 

n = Total number of batches of gasoline 

produced at the refinery from January 1, 

2004 through December 31, 2005 (or the 

total number of batches of gasoline 

pursuant to § 80.1285(d)). 

Vi = Volume of gasoline in batch i (gallons). 

Bi = Benzene content of batch i (volume 

percent benzene). 

(b) A refiner for a refinery that 

included oxygenate blended 

downstream of the refinery in 

compliance calculations for RFG or 

conventional gasoline for calendar years 

2004 or 2005 under § 80.69 or 

§ 80.101(d)(4) must include the volume 

and benzene concentration of this 

oxygenate in the benzene baseline 

calculation for that refinery under 

paragraph (a) of this section. 

§ 80.1285 How does a refiner apply for a 

benzene baseline? 

(a) A benzene baseline application 

must be submitted for each refinery that 

plans to generate early credits under 

§ 80.1275. The application must include 

the information specified in paragraph 

(c) of this section and must be submitted 

to EPA at least 60 days before the first 

averaging period in which the refinery 

plans to generate early credits. 

(b) For U.S. Postal delivery, the 

benzene baseline application shall be 

sent to: Attn: MSAT2 Benzene, Mail 

Stop 6406J, U.S. Environmental 

Protection Agency, 1200 Pennsylvania 

Ave., NW., Washington, DC 20460. For 

commercial delivery: MSAT2 Benzene, 

202–343–9038, U.S. Environmental 

Protection Agency, 1310 L Street, NW., 

Washington, DC 20005. 

(c) The benzene baseline application 

must include the following information: 

(1) A listing of the names and 

addresses of all refineries owned by the 

company. 

(2) The benzene baseline for gasoline 

produced in 2004–2005 at the refinery, 

calculated in accordance with § 80.1280. 

(3) Copies of the annual reports 

required under § 80.75 for RFG and 

§ 80.105 for conventional gasoline. 

(4) A letter signed by the president, 

chief operating officer, or chief 

executive officer, of the company, or 

his/her designee, stating that the 

information contained in the benzene 

baseline determination is true to the 

best of his/her knowledge. 

(5) Name, address, phone number, 

facsimile number and e-mail address of 

a corporate contact person. 

(d) For a refinery that may be eligible 

to generate early credits under 

§ 80.1270(a)(2)(ii), a refiner may submit 

to EPA a benzene baseline application 

per the requirements of this section. The 

refiner must also submit information 

regarding the nature and cause of the 

refinery’s production activity that 

resulted in irregular or less than full 

production, how it affected the baseline 

benzene concentration, and whether 

and how an alternative calculation to 

the calculation specified in § 80.1280 

produces a more representative benzene 

baseline value. Upon consideration of 

the submitted information, EPA may 

approve a benzene baseline for such a 

refinery. 

(e) EPA will notify the refiner of 

approval of the refinery’s benzene 

baseline or any deficiencies in the 


pwalker on PROD1PC71 with RULES_2ER26FE07.015</MATH> ER26FE07.016</MATH>
8548 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

application. However, except for 

applications submitted in accordance 

with paragraph (d) of this section, the 

refinery’s benzene baseline application 

may be considered approved 60 days 

after EPA’s receipt of the baseline 

application, subject to paragraph (f) of 

this section. 

(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. 

§ 80.1290 How are standard benzene 

credits generated? 

(a) The standard credit averaging 

periods are the calendar years beginning 

January 1, 2011, or beginning January 1, 

2015 for small refiners approved under 

§ 80.1340. 

(b) [Reserved] 

(c)(1) The number of standard 

benzene credits generated shall be 

calculated annually for each applicable 

averaging period according to the 

following equation: 

SC

B

y V avg y = y

 −



 



 ×

0 62

100

. ,

Where: 

SCy = Standard credits generated in year y 

(gallons benzene). 

Bavg,y = Annual average benzene 

concentration for year y (volume percent 

benzene), per § 80.1238. 

Vy = Total volume of gasoline produced or 

imported in year y (gallons). 

(2) No credits shall be generated 

unless the value SCy is positive. 

(d) Standard benzene credits 

calculated in accordance with paragraph 

(c) of this section shall be expressed to 

the nearest gallon. Fractional values 

shall be rounded down if less than 0.50, 

and rounded up if greater than or equal 

to 0.50. 

§ 80.1295 How are gasoline benzene 

credits used? 

(a) Credit use. (1) Gasoline benzene 

credits may be used to comply with the 

gasoline benzene standard of 

§ 80.1230(a) provided that—

(i) The gasoline benzene credits were 

generated according to §§ 80.1275 or 

80.1290. 

(ii) The recordkeeping requirements 

for gasoline benzene credits under 

§ 80.1350 are met. 

(iii) The gasoline benzene credits are 

correctly reported according to 

§§ 80.1352 and 80.1354. 

(iv) The conditions of this section are 

met. 

(2) Gasoline benzene credits generated 

under §§ 80.1275 and 80.1290 may be 

used interchangeably in all credit use 

scenarios, subject to the credit life 

provisions specified in paragraph (c) of 

this section. 

(3) Gasoline benzene credits may be 

used by a refiner or importer to comply 

with the gasoline benzene content 

standard of § 80.1230(a), may be banked 

by a refiner or importer for future use 

or transfer, may be transferred to 

another refinery or importer within a 

company (intracompany trading), or 

may be transferred to another refiner or 

importer outside of the company. 

(b) Credit transfers. (1) Gasoline 

benzene credits obtained from another 

refinery or importer may be used to 

comply with the gasoline benzene 

content requirement of § 80.1230(a) 

provided the following conditions are 

met: 

(i) The credits are generated and 

reported according to the requirements 

of this subpart, and the transferred 

credits have not expired, per paragraph 

(c) of this section. 

(ii) Any credit transfer takes place no 

later than the last day of February 

following the calendar year averaging 

period when the credits are used. 

(iii) The credit has not been 

transferred more than twice. The first 

transfer by the refinery or importer that 

generated the credit may only be made 

to a refiner or importer that 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 that intends to use or to 

terminate the credit. In no case may a 

credit be transferred more than twice 

before being used or terminated. 

(iv) The credit transferor has applied 

any gasoline benzene credits necessary 

to meet its own annual compliance 

requirements (including any deficit 

carried forward, pursuant to 

§ 80.1230(c), if applicable) before 

transferring any gasoline benzene 

credits to any other refiner or importer. 

(v) The credit transferor does not 

create a deficit as a result of a credit 

transfer. 

(vi) The transferor supplies records to 

the transferee indicating the year the 

gasoline benzene credits were 

generated, the identity of the refiner 

(and refinery) or importer that generated 

the gasoline benzene credits, and the 

identity of the transferring entity if it is 

not the same entity that generated the 

gasoline benzene credits. 

(2) In the case of gasoline benzene 

credits that have been calculated or 

created improperly, or that EPA has 

otherwise determined to be invalid, the 

following provisions apply: 

(i) Invalid gasoline benzene credits 

cannot be used to achieve compliance 

with the gasoline benzene content 

requirement of § 80.1230(a), regardless 

of the transferee’s good-faith belief that 

the gasoline benzene credits were valid. 

(ii) The refiner or importer that used 

the gasoline benzene credits and any 

transferor of the gasoline benzene 

credits must adjust their credit records, 

reports, and compliance calculations as 

necessary to reflect the proper gasoline 

benzene credits. 

(iii) Any properly created gasoline 

benzene credits existing in the 

transferor’s credit balance following the 

corrections and adjustments specified in 

paragraph (b)(2)(ii) of this section must 

first be applied to correct the invalid 

transfers to the transferee, before the 

transferor uses, trades or banks the 

gasoline benzene credits. 

(c) Credit life. (1)(i) Early credits, per 

§ 80.1275, may be used for compliance 

purposes under § 80.1240(a) for any of 

the following annual averaging periods: 

2011, 2102, 2013. 

(ii) Early credits, per § 80.1275, may 

be used for compliance purposes under 

§ 80.1240(a) by small refiners approved 

under § 80.1340 for any of the following 

averaging periods: 2015, 2016, 2017. 

(2)(i) Standard credits, per § 80.1290, 

may be used for compliance purposes 

under § 80.1240(a) within five years 

from the year they were generated, 

except as noted under paragraph 

(c)(2)(ii) of this section. Example: 

Standard credits generated during 2011 

may be used to achieve compliance 

under § 80.1240(a) for any calendar year 

averaging period prior to the 2017 

averaging period. 

(ii) Standard credits, per § 80.1290, 

may be used for compliance purposes 

under § 80.1240(a) within seven years 

from the year they were generated if 

traded to and ultimately used by a small 

refiner approved under § 80.1340. 

Example: Standard credits generated in 

2011 may be used to achieve 

compliance under § 80.1240(a) for any 

calendar year averaging period prior to 

the 2019 averaging period if traded to 

and ultimately used by a small refiner 

approved under § 80.1340. 

(d) Deficit provision limitation. A 

refiner or importer possessing gasoline 

benzene credits must use all gasoline 

benzene credits in its possession before 

applying the benzene deficit provisions 

of § 80.1230(c). 

Hardship Provisions 

§ 80.1334 What are the requirements for 

early compliance with the gasoline benzene 

program? 

(a)(1) A refinery may comply with the 

benzene requirements at § 80.1230 for 

its RFG and/or conventional gasoline 

(CG) prior to the 2011 compliance 


pwalker on PROD1PC71 with RULES_2ER26FE07.017</MATH>
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8549 

period if it applies for this early 

compliance option as specified in 

paragraph (b) of this section, and is 

approved by EPA. 

(2) Only refineries that produce 

gasoline by processing crude and/or 

intermediate feedstocks through refinery 

processing units may apply for this 

early compliance option. 

(b) Refiners must submit an 

application in order to be considered for 

early compliance as described in this 

section. 

(1) Applications for early compliance 

as described in this section must be 

submitted to EPA by December 31, 

2007. 

(2) Applications must be sent to: U.S. 

EPA, NVFEL–ASD, Attn: MSAT2 Early 

Compliance, 2000 Traverwood Dr., Ann 

Arbor, MI 48105. 

(3) Application must be made 

separately for a refinery’s RFG and CG 

pools. 

(4) The early compliance application 

must show that all the following criteria 

are met: 

(i) For an RFG early compliance 

application—

(A) The refinery’s RFG baseline value 

under § 80.915 is greater than or equal 

to 30 percent reduction. 

(B) The refinery’s 2003 RFG annual 

average benzene concentration was less 

than or equal to 0.62 vol%. 

(C) The refinery’s 2003 RFG annual 

average sulfur concentration was less 

than or equal to 140 ppm. 

(D) The refinery’s 2003 RFG annual 

average MTBE concentration was greater 

than or equal to 6 vol%. 

(ii) For a CG early compliance 

application—

(A) The refinery’s CG baseline under 

§ 80.915 is less than or equal to 80 mg/ 

mile. 

(B) The refinery’s 2003 CG annual 

average benzene concentration was less 

than or equal to 0.62 vol%. 

(C) The refinery’s 2003 CG annual 

average sulfur concentration was less 

than or equal to 140 ppm. 

(D) The refinery’s 2003 CG annual 

average MTBE concentration was greater 

than or equal to 6 vol%. 

(5) In addition, the application must 

demonstrate that the refinery has 

extremely limited ability to adjust its 

operations in order to comply with its 

applicable RFG or CG toxics 

performance requirements under 

§ 80.815. 

(6) The refiner must provide 

additional information as requested by 

EPA. 

(c)(1) If approved for early compliance 

with the provisions of this subpart, the 

refinery may comply with the 

provisions of § 80.1230 as follows: 

(i) For the compliance period 

beginning January 1, 2007, and each 

annual compliance period through 

2010; or 

(ii) For the compliance period 

beginning January 1, 2008, and each 

annual compliance period through 

2010. 

(2) The refinery must notify EPA 

under which compliance period 

specified in paragraph (c)(1) of this 

section it will begin compliance. 

(3) Beginning with the compliance 

period chosen pursuant to paragraph 

(c)(2) of this section—

(i) For early compliance approved for 

a refinery’s RFG pool, the toxics air 

pollutants emissions performance 

requirements specified in §§ 80.41(e)(1) 

and (f)(1) and 80.815 shall not apply to 

the reformulated gasoline produced by 

the refinery. 

(ii) For early compliance approved for 

a refinery’s CG pool, the annual average 

exhaust toxics emissions requirements 

specified in §§ 80.101(c)(2) and 80.815 

shall not apply to conventional gasoline 

produced by the refinery. 

(4) Refineries approved for early 

compliance under this section may not 

generate early credits under § 80.1275. 

(d) If EPA finds that a refiner 

provided false or inaccurate information 

in its application for early compliance, 

the early compliance approval will be 

void ab initio. 

§ 80.1335 Can a refiner seek relief from the 

requirements of this subpart? 

(a) A refiner may apply for relief from 

the requirements specified in 

§ 80.1230(a) or (b) for a refinery, if it can 

show that—

(1) Unusual circumstances exist that 

impose extreme hardship and 

significantly affect the ability to comply 

with the gasoline benzene standards at 

§ 80.1230(a) or (b) by the applicable 

date(s); and 

(2) It has made best efforts to comply 

with the requirements of this subpart. 

(b) A refiner must apply for and be 

approved for relief under this section. 

(1) An application must include the 

following information: 

(i) A plan demonstrating how the 

refiner will comply with the 

requirements of § 80.1230(a) or (b), as 

applicable, as expeditiously as possible. 

The plan shall include a showing that 

contracts are or will be in place for 

engineering and construction of benzene 

reduction technology, 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 § 80.1230(a) or (b), as 

applicable, will be met. 

(ii) A detailed description of the 

refinery configuration and operations 

including, at minimum, the following 

information: 

(A) The refinery’s total reformer unit 

throughput capacity; 

(B) The refinery’s total crude capacity; 

(C) Total crude capacity of any other 

refineries owned by the same entity; 

(D) Total volume of gasoline 

production at the refinery; 

(E) Total volume of other refinery 

products; 

(F) Geographic location(s) where the 

refinery’s gasoline will be sold; 

(G) Detailed descriptions of efforts to 

obtain capital for refinery investments; 

(H) Bond rating of entity that owns 

the refinery; and 

(I) Estimated capital investment 

needed to comply with the requirements 

of this subpart. 

(iii) For a hardship related to 

complying with the requirement at 

§ 80.1230(a), detailed descriptions of 

efforts to obtain credits, including the 

prices of credits available, but deemed 

uneconomical by the refiner. 

(2) Applicants must also provide any 

other relevant information requested by 

EPA. 

(3) An application for relief from the 

requirements specified in § 80.1230(b) 

must be submitted to EPA by January 1, 

2008, or by January 1, 2013 for small 

refiners approved under § 80.1340. 

(c)(1) Approval of a hardship 

application under this section for relief 

from the annual average benzene 

standard at § 80.1230(a) shall be in the 

form of an extended period of deficit 

carry-forward, per § 80.1230(c), for such 

period of time as EPA determines is 

appropriate. 

(2) Approval of a hardship application 

under this section for relief from the 

maximum average benzene standard at 

§ 80.1230(b) shall be in the form of a 

waiver of the standard for such period 

of time as EPA determines is 

appropriate. 

(3) EPA may deny any application for 

appropriate reasons, including 

unacceptable environmental impact. 

(d) EPA may impose any other 

reasonable conditions on relief provided 

under this section, including rescinding, 

or reducing the length of, the extended 

deficit carry-forward period if 

conditions or situations change between 

approval of the hardship application 

and the end of the approved relief 

period. 

§ 80.1336 What if a refiner or importer 

cannot produce gasoline conforming to the 

requirements of this subpart? 

In extreme, unusual, and unforeseen 

circumstances (for example, a natural 


pwalker on PROD1PC71 with RULES_2
8550 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

disaster or a refinery fire) that are 

clearly outside the control of the refiner 

or importer and that could not have 

been avoided by the exercise of 

prudence, diligence, and due care, EPA 

may permit a refinery or importer to 

exceed the allowable average benzene 

levels specified in § 80.1230(a) or (b), as 

applicable, if—

(a) It is in the public interest to do so; 

(b) The refiner or importer exercised 

prudent planning and was not able to 

avoid the violation and has taken all 

reasonable steps to minimize the extent 

of the nonconformity; 

(c) The refiner or importer can show 

how the requirements at § 80.1230(a) or 

(b), as applicable, will be achieved as 

expeditiously as possible; 

(d) The refiner or importer agrees to 

make up any air quality detriment 

associated with the nonconformity, 

where practicable; and 

(e) The refiner or importer pays to the 

U.S. Treasury an amount equal to the 

economic benefit of the nonconformity 

minus the amount expended making up 

the air quality detriment pursuant to 

paragraph (d) of this section. 

Small Refiner Provisions 

§ 80.1338 What criteria must be met to 

qualify as a small refiner for the gasoline 

benzene requirements of this subpart? 

(a) A small refiner is any person that 

demonstrates that it—

(1) Produced gasoline at a refinery by 

processing crude oil through refinery 

processing units from January 1, 2005 

through December 31, 2005. 

(2) Employed an average of no more 

than 1,500 people, based on the average 

number of employees for all pay periods 

from January 1, 2005 through December 

31, 2005. 

(3) Had a corporate average crude oil 

capacity less than or equal to 155,000 

barrels per calendar day (bpcd) for 2005. 

(4) Following the submission of a 

small refiner application, pursuant to 

§ 80.1340, has been approved as a small 

refiner for this subpart. 

(b) For the purpose of determining the 

number of employees and the crude oil 

capacity under paragraph (a) of this 

section, the following determinations 

shall be observed: 

(1) The refiner shall include the 

employees and crude oil capacity of any 

subsidiary companies, any parent 

company, subsidiaries of the parent 

company in which the parent has a 

controlling interest, and any joint 

venture partners. 

(2) For any refiner owned by a 

governmental entity, the number of 

employees and total crude oil capacity 

as specified in paragraph (a) of this 

section shall include all employees and 

crude oil production of the government 

to which the governmental entity is a 

part. 

(3) Any refiner owned and controlled 

by an Alaska Regional or Village 

Corporation organized pursuant to the 

Alaska Native Claims Settlement Act (43 

U.S.C. 1601) is not considered an 

affiliate of such entity, or with other 

concerns owned by such entity, solely 

because of their common ownership. 

(c) Notwithstanding the provisions of 

paragraph (a) of this section, a refiner 

that reactivates a refinery that it had 

previously operated, and that was shut 

down or non-operational for the entire 

period between January 1, 2005 and 

December 31, 2005, may apply for small 

refiner status in accordance with the 

provisions of § 80.1340. 

§ 80.1339 Who is not eligible for the 

provisions for small refiners? 

The following are not eligible for the 

hardship provisions for small refiners: 

(a) A refiner with one or more 

refineries built after December 31, 2005. 

(b) A refiner that exceeds the 

employee or crude oil capacity criteria 

under § 80.1338 but that meets these 

criteria after December 31, 2005, 

regardless of whether the reduction in 

employees or crude capacity is due to 

operational changes at the refinery or a 

company sale or reorganization. 

(c) Importers. 

(d) A refiner that produce gasoline 

other than by processing crude oil 

through refinery processing units. 

(e)(1) A small refiner approved under 

§ 80.1340 that subsequently ceases 

production of gasoline from processing 

crude oil through refinery processing 

units, employs more than 1,500 people, 

or exceeds the 155,000 bpcd crude oil 

capacity limit after December 31, 2005 

as a result of merger with or acquisition 

of or by another entity, is disqualified as 

a small refiner, except that 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. 

(2) Except as provided under 

paragraph (e)(3) of this section, any 

refiner whose status changes as 

specified in paragraph (e)(1) under this 

paragraph (b) shall meet the applicable 

standards of § 80.1230 within 30 months 

of the disqualifying event for all its 

refineries. However, such period shall 

not extend beyond December 31, 2014. 

(3) A refiner may apply to EPA for an 

additional six months to comply with 

the standards of § 80.1230 if it believes 

that 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, 2014. 

(4) During the period provided under 

paragraph (e)(2) of this section, and any 

extension provided under paragraph 

(e)(3) of this section, the refiner may not 

generate gasoline benzene credits under 

§ 80.1275 or § 80.1290. 

(f) A small refiner approved under 

§ 80.1340 which notifies EPA that it 

wishes to withdraw its small refiner 

status pursuant to § 80.1340(g). 

§ 80.1340 How does a refiner obtain 

approval as a small refiner? 

(a) Applications for small refiner 

status must be submitted to EPA by 

December 31, 2007. 

(b) For U.S. Postal delivery, 

applications for small refiner status 

must be sent to: Attn: MSAT2 Benzene, 

Mail Stop 6406J, U.S. Environmental 

Protection Agency, 1200 Pennsylvania 

Ave., NW., Washington, DC 20460. For 

commercial delivery: MSAT2 Benzene, 

202–343–9038, U.S. Environmental 

Protection Agency, 1310 L Street, NW., 

Washington, DC 20005. 

(c) The small refiner status 

application must contain the following 

information for the company seeking 

small refiner status, and for all 

subsidiary companies, all parent 

companies, all subsidiaries of the parent 

companies, and all joint venture 

partners: 

(1) Employees. For joint ventures, the 

total number of employees includes the 

combined employee count of all 

corporate entities in the venture. For 

government-owned refiners, the total 

employee count includes all 

government employees. 

(i) Pursuant to paragraph (c) of this 

section, a listing of each company 

facility and each facility’s address 

where any employee, as specified in 

paragraph (a)(1) of this section, worked 

during the 12 months preceding January 

1, 2006. 

(ii) The average number of employees 

at each facility based upon the number 

of employees for each pay period for the 

12 months preceding January 1, 2006. 

(iii) The type of business activities 

carried out at each location. 

(iv) In the case of a refiner that 

reactivates a refinery that it previously 

owned and operated and that was shut 

down or non-operational between 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8551 

January 1, 2005 and January 1, 2006, 

include the following: 

(A) Pursuant to paragraph (c) of this 

section, a listing of each company 

refinery each refinery’s address where 

any employee, as specified in paragraph 

(a)(1) of this section, worked since the 

refiner acquired or reactivated the 

refinery. 

(B) The average number of employees 

at any such reactivated refinery during 

each calendar year since the refiner 

reactivated the refinery. 

(C) The type of business activities 

carried out at each location. 

(2) Crude oil capacity. 

(i) 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), for the period January 1, 2005 

through December 31, 2005. 

(ii) The information submitted to EIA 

is presumed to be correct. In cases 

where a company disagrees with this 

information, the company may petition 

EPA with appropriate data to correct the 

record when the company submits its 

application for small refiner status. 

(3) The type of business activity 

carried out at each location. 

(4) For each refinery, an indication of 

the small refiner option(s), pursuant to 

§ 80.1342, intended to be utilized at the 

refinery. 

(5) A letter signed by the president, 

chief operating officer 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, and that 

the company owned the refinery as of 

January 1, 2006. 

(6) Name, address, phone number, 

facsimile number, and e-mail address of 

a corporate contact person. 

(d) Approval of a small refiner status 

application will be based on the 

information submitted under paragraph 

(c) of this section and any other relevant 

information. 

(e) EPA will notify a refiner of 

approval or disapproval of small refiner 

status by letter. 

(1) If approved, all refineries of the 

refiner may defer meeting the standard 

specified in § 80.1230(a) until the 

annual averaging period beginning 

January 1, 2015, and the standard 

specified in § 80.1230(b) until the 

averaging period beginning July 1, 2016. 

(2) If disapproved, all refineries of the 

refiner must meet the standard specified 

in § 80.1230(a) beginning with the 

annual averaging period beginning 

January 1, 2011, and must meet the 

standard specified in § 80.1230(b) 

beginning with the averaging period 

beginning July 1, 2012. 

(f) If EPA finds that a refiner provided 

false or inaccurate information on its 

application for small refiner status, the 

refiner’s small refiner status will be void 

ab initio. 

(g) Prior to January 1, 2014, and upon 

notification to EPA, a small refiner 

approved per this section 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 

§ 80.1230. 

§ 80.1342 What compliance options are 

available to small refiners under this 

subpart? 

(a) A refiner that has been approved 

as a small refiner under § 80.1340 may—

(1)(i) Defer meeting the standard 

specified in § 80.1230(a) until the 

annual averaging period beginning 

January 1, 2015; or 

(ii) Meet the standard specified in 

§ 80.1230(a) in any annual averaging 

period from 2011 through 2014, 

inclusive, provided it notifies EPA in 

writing no later than November 15 prior 

to the year in which it will produce 

compliant gasoline. 

(2)(i) Defer meeting the standard 

specified in § 80.1230(b) until the 

averaging period beginning July 1, 2016; 

or 

(ii) Meet the standard specified in 

§ 80.1230(b) in any averaging period 

specified in § 80.1230(b)(3) prior to the 

averaging period beginning July 1, 2016 

provided it notifies EPA in writing no 

later than November 15 prior to the year 

in which it will produce compliant 

gasoline. 

(b) Any refiner that makes an election 

under paragraphs (a)(1) or (a)(2) of this 

section must comply with the 

applicable benzene standards at 

§ 80.1230 beginning with the first 

averaging period subsequent to the 

status change. 

(c) The provisions of paragraph (a) of 

this section shall apply separately for 

each of an approved small refiner’s 

refineries. 

§ 80.1343 What hardship relief provisions 

are available only to small refiners? 

(a)(1) In the case of a small refiner 

approved under § 80.1340 for which 

compliance with the requirement at 

§ 80.1230(a) would be feasible only 

through the purchase of credits, but for 

whom purchase of credits is not 

practically or economically feasible, 

EPA may approve a delay of the 

requirements applicable to the first 

compliance period for that refiner for up 

to two years. 

(2) No delay in accordance with 

paragraph (a) of this section will be 

granted to any small refiner prior to the 

EPA issuing a review of the credit 

program. 

(3) A small refiner may request one or 

more extensions of an approved delay if 

it can continue to demonstrate extreme 

difficulty in achieving compliance, 

through the use of credits, with the 

annual average benzene standard at 

§ 80.1230(a). 

(b) In the case of a small refiner 

approved under § 80.1340 for which 

compliance with the maximum average 

benzene requirement at § 80.1230(b) is 

not feasible, the refiner may apply for 

hardship relief under § 80.1335. 

§ 80.1344 What provisions are available to 

a non-small refiner that acquires one or 

more of a small refiner’s refineries? 

(a) In the case of a refiner that is not 

an approved small refiner under 

§ 80.1340 and that acquires a refinery 

from a small refiner approved under 

§ 80.1340, the small refiner provisions 

of the gasoline benzene program of this 

subpart continue to apply to the 

acquired refinery for a period of up to 

30 months from the date of acquisition 

of the refinery. In no case shall this 

period extend beyond December 31, 

2014. 

(b) A refiner may apply to EPA for up 

to an additional six months to comply 

with the standards of § 80.1230 for the 

acquired refinery if it believes that more 

than 30 months would 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 a decision to approve 

additional time on information provided 

by the refiner and on other relevant 

information. In no case shall this period 

extend beyond December 31, 2014. 

(c) A refiner that acquires a refinery 

from a small refiner approved per 

§ 80.1340 shall notify EPA in writing no 

later than 20 days following the 

acquisition. 

Sampling, Testing and Retention 

Requirements 

§ 80.1347 What are the sampling and 

testing requirements for refiners and 

importers? 

(a) Sample and test each batch of 

gasoline. (1) The sampling and testing 

requirements specified in subpart D for 

reformulated gasoline shall continue to 

apply to reformulated gasoline and shall 

be extended to conventional gasoline 

(CG) for the purpose of complying with 

the benzene requirements of this 

subpart, except as modified by 

paragraphs (a)(2), (a)(3) and (a)(4) of this 

section. 


pwalker on PROD1PC71 with RULES_2
8552 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

(2) Refiners and importers shall 

collect a representative sample from 

each batch of gasoline produced or 

imported, according to the earliest 

applicable date in the following 

schedule: 

(i) Beginning January 1, 2011; 

(ii) Beginning January 1, 2015 for 

small refiners approved under 

§ 80.1340; 

(iii) Beginning January 1 of the year 

prior to 2015 in which a small refiner 

approved under § 80.1340 has opted, 

per § 80.1342(a), to begin meeting the 

standards at § 80.1230; 

(iv) Beginning June 1, 2007, for any 

refinery planning to generate early 

credits for the averaging period 

specified at § 80.1275(b)(1); 

(v) Beginning January 1 of each 

averaging period specified at 

§ 80.1275(b)(2) or (b)(3) for which the 

refinery plans to generate early credits; 

(vi) Beginning January 1 of the year, 

per § 80.1334(c)(1), in which a refinery 

approved for early compliance under 

§ 80.1334 opts to begin early 

compliance. The provisions shall only 

apply to the type of gasoline, RFG or 

CG, for which early compliance was 

approved. 

(3)(i) Each sample shall be tested in 

accordance with the methodology 

specified at § 80.46(e) to determine its 

benzene concentration for compliance 

with the requirements of this subpart. 

(ii) Independent sample analysis, 

under § 80.65(f), is not required for 

conventional gasoline. 

(4) Any refiner or importer may 

release CG prior to obtaining the test 

results for benzene required under 

paragraph (a)(1) of this section. 

(5) Exclusion of previously certified 

gasoline. 

(i) Any refiner who uses previously 

certified reformulated or conventional 

gasoline or RBOB to produce 

conventional gasoline at a refinery, must 

exclude the previously certified gasoline 

(‘‘PCG’’) for purposes of demonstrating 

compliance with the benzene standards 

at § 80.1230. 

(ii) To accomplish the exclusion 

required in paragraph (a)(5)(i) of this 

section, the refiner must determine the 

volume and benzene content of the 

previously certified gasoline used at the 

refinery and the volume and benzene 

content of gasoline produced at the 

refinery, and use the compliance 

calculation procedures in paragraphs 

(a)(5)(iii) and (a)(5)(iv) of this section. 

(iii) For each batch of previously 

certified gasoline that is used to produce 

conventional gasoline the refiner must 

include the volume and benzene 

content of the previously certified 

gasoline as a negative volume and a 

negative benzene content in the refiner’s 

compliance calculations in accordance 

with the requirements at § 80.1238. 

(iv) For each batch of conventional 

gasoline produced at the refinery using 

previously certified gasoline, the refiner 

must determine the volume and 

benzene content and include each batch 

in the refinery’s compliance 

calculations at § 80.1240 without regard 

to the presence of previously certified 

gasoline in the batch. 

(v) The refiner must use any 

previously certified gasoline that it 

includes as a negative batch in its 

compliance calculations pursuant to 

§ 80.1240 as a component in gasoline 

production during the annual averaging 

period in which the previously certified 

gasoline was included as a negative 

batch in the refiner’s compliance 

calculations. 

(b) Batch numbering. The batch 

numbering convention of § 80.365(b) 

shall apply to batches of conventional 

gasoline beginning with earliest 

applicable date specified in paragraph 

(a)(2) of this section. 

§ 80.1348 What gasoline sample retention 

requirements apply to refiners and 

importers? 

Beginning with earliest applicable 

date specified in § 80.1347(a)(2), the 

gasoline sample retention requirements 

specified in subpart H of this part for 

the gasoline sulfur provisions apply for 

the purpose of complying with the 

requirements of this subpart, except that 

in addition to including the sulfur test 

result as provided by § 80.335(a)(4)(ii), 

the refiner, importer, or independent 

laboratory shall also include with the 

retained sample the test result for 

benzene as conducted pursuant to 

§ 80.46(e). 

Recordkeeping and Reporting 

Requirements 

§ 80.1350 What records must be kept? 

(a) General requirements. The 

recordkeeping requirements specified in 

§§ 80.74 and 80.104, as applicable, 

apply for the purpose of complying with 

the requirements of this subpart; 

however, duplicate records are not 

required. 

(b) Additional records that refiners 

and importers shall keep. (1) Beginning 

with earliest applicable date specified in 

§ 80.1347(a)(2), any refiner for each of 

its refineries, and any importer for the 

gasoline it imports, shall keep records 

that include the following information, 

as applicable: 

(i) Its compliance benzene value per 

§ 80.1240, and the calculations used to 

obtain that value. 

(ii) Its benzene baseline value, per 

§ 80.1280, if the refinery or importer 

submitted a benzene baseline 

application to EPA per § 80.1285. 

(iii) The number of early benzene 

credits generated under § 80.1275, 

separately by year of generation. 

(iv) The number of early benzene 

credits obtained, separately by 

generating refinery and year of 

generation. 

(v) The number of valid credits in 

possession of the refinery or importer at 

the beginning of each averaging period, 

separately by generating facility and 

year of generation. 

(vi) The number of standard credits 

generated by the refinery or importer 

under § 80.1290, separately by transferor 

(if applicable), by facility and by year of 

generation. 

(vii) The number of credits used, 

separately by generating facility and 

year of generation. 

(viii) If any credits were obtained 

from, or transferred to, other parties, for 

each other party, its name, its EPA 

refinery or importer registration 

number, and the number of credits 

obtained from, or transferred to, the 

other party, and the price per credit. 

(ix) The number of credits that 

expired at the end of each averaging 

period, separately by generating facility 

and year of generation. 

(x) The number of credits that will be 

carried over into a subsequent averaging 

period, separately by generating facility 

and year of generation. 

(xi) Contracts or other commercial 

documents that establish each transfer 

of credits from the transferor to the 

transferee. 

(xii) A copy of all reports submitted 

to EPA under §§ 80.1352 and 80.1354; 

however, duplicate records are not 

required. 

(2)(i) Beginning July 1, 2012, any 

refiner for each of its refineries, and any 

importer for the gasoline it imports, 

shall include, in the records required by 

paragraph (b)(1) of this section, its 

maximum average benzene value for the 

period July 1, 2012 through December 

31, 2013, and for each annual 

compliance period thereafter. 

(ii) Notwithstanding the requirements 

specified in paragraph (b)(2)(i) of this 

section, beginning July 1, 2016, a small 

refiner approved under § 80.1340, for 

each of its refineries, shall include, in 

the records required by paragraph (b)(1) 

of this section, its maximum average 

benzene value for the period July 1, 

2016 through December 31, 2017, and 

for each annual compliance period 

thereafter. 

(3) Records of all supporting 

calculations pursuant to paragraphs 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8553 

(b)(1) or (b)(2) of this section shall also 

be kept. 

(c) Length of time records shall be 

kept. Records required in this section 

shall be kept for five years from the date 

they were created, except that records 

relating to credit transfers shall be kept 

by the transferor for five years from the 

date the credits were transferred, and 

shall be kept by the transferee for five 

years from the date the credits were 

transferred, used or terminated, 

whichever is later. 

(d) Make records available to EPA. On 

request by EPA, the records specified in 

this section shall be provided to the 

Administrator. For records that are 

electronically generated or maintained, 

the equipment and software necessary 

to read the records shall be made 

available, or upon approval by EPA, 

electronic records shall be converted to 

paper documents which shall be 

provided to the Administrator. 

§ 80.1352 What are the pre-compliance 

reporting requirements for the gasoline 

benzene program? 

(a) Except as provided in paragraph 

(c) of this section, a refiner for each of 

its refineries shall submit the following 

information, as applicable, to EPA by 

June 1, 2008 and annually thereafter 

through June 1, 2011, or through June 1, 

2015 for small refiners approved under 

§ 80.1340: 

(1) Changes to the information 

submitted in the company’s registration; 

(2) Changes to the information 

submitted for any refinery or import 

facility registration; 

(3) Gasoline production. 

(i) An estimate of the average daily 

volume (in gallons) of gasoline 

produced at each refinery. This estimate 

shall include RFG, RBOB, conventional 

gasoline and conventional gasoline 

blendstock that becomes finished 

gasoline solely upon the addition of 

oxygenate but shall exclude gasoline 

exempted pursuant to § 80.1235. 

(ii) The volume estimates specified in 

paragraph (a)(3)(i) of this section must 

be provided for the periods of June 1, 

2007 through December 31, 2007, and 

calendar years 2008 through 2015. 

(4) Benzene concentration. An 

estimate of the average gasoline benzene 

concentration corresponding to the time 

periods specified in paragraph (a)(3)(ii) 

of this section. 

(5) ABT participation. For each year 

through 2015, the following information 

related to crdits shall be provided to 

EPA, if applicable: 

(i) If the refinery is expecting to 

generate benzene credits per § 80.1275 

and/or § 80.1290, the actual or 

estimated, as applicable, numbers of 

early credits and standard credits 

expected to be generated. 

(ii) If the refinery is expecting to use 

benzene credits per § 80.1295, the actual 

or estimated, as applicable, numbers of 

early credits and standard credits 

expected to be banked, transferred or 

used to achieve compliance in 

accordance with § 80.1240. 

(6) Information on any project 

schedule by quarter of known or 

projected completion date, by the stage 

of the project. See, for example, the five 

project phases described in EPA’s June 

2002 Highway Diesel Progress Review 

report (EPA420–R–02–016, http:// 

www.epa.gov/otaq/regs/hd2007/ 

420r02016.pdf): Strategic planning, 

Planning and front-end engineering, 

Detailed engineering and permitting, 

Procurement and Construction, and 

Commissioning and startup. 

(7) Basic information regarding the 

selected technology pathway for 

compliance (e.g., precursor re-routing or 

other technologies, revamp vs. 

grassroots, etc.). 

(8) Whether capital commitments 

have been made or are projected to be 

made. 

(b) The pre-compliance reports due in 

2008 and succeeding years must provide 

an update of the progress in each of 

these areas and include actual values 

where available. 

(c) The pre-compliance reporting 

requirements of this section do not 

apply to refineries that only produce 

products exempt from the requirements 

of this subpart per § 80.1235(b). 

§ 80.1354 What are the reporting 

requirements for the gasoline benzene 

program? 

(a) Beginning with earliest applicable 

date specified in § 80.1347(a)(2), any 

refiner for each of its refineries, and any 

importer for the gasoline it imports, 

shall submit to EPA an Annual Gasoline 

Benzene Report that contains the 

information required in this section, and 

such other information as EPA may 

require for each applicable averaging 

period. 

(b) The Annual Gasoline Benzene 

Report shall contain the following 

information: 

(1) Benzene volume percent and 

volume of any RFG, RBOB, and 

conventional gasoline, separately by 

batch, produced by the refinery or 

imported, and the sum of the volumes 

and the volume-weighted benzene 

concentration, in volume percent. 

(2)(i) The annual average benzene 

concentration, per § 80.1238. 

(ii) The maximum average benzene 

concentration per § 80.1240(b). 

(3) Any benzene deficit from the 

previous reporting period, per 

§ 80.1230(b). 

(4) The number of banked benzene 

credits from the previous reporting 

period. 

(5) The number of benzene credits 

generated under § 80.1275, if applicable. 

(6) The number of benzene credits 

generated under § 80.1290, if applicable. 

(7) The number of benzene credits 

transferred to the refinery or importer, 

per § 80.1295(c), and the cost of the 

credits, if applicable. 

(8) The number of benzene credits 

transferred from the refinery or 

importer, per § 80.1295(c), and the price 

of the credits, if applicable. 

(9) The number of benzene credits 

terminated or expired. 

(10) The compliance benzene value 

per § 80.1240. 

(11) The number of banked benzene 

credits. 

(12) Projected credit generation 

through compliance year 2015. 

(13) Projected credit use through 

compliance year 2015. 

(c) EPA may require submission of 

additional information to verify 

compliance with the requirements of 

this subpart. 

(d) The report required by paragraph 

(a) of this section shall be—

(1) Submitted on forms and following 

procedures specified by the 

Administrator. 

(2) Submitted to EPA by the last day 

of February each year for the prior 

calendar year averaging period. 

(3) Signed and certified as correct by 

the owner or a responsible corporate 

officer of the refiner or importer. 

Attest Engagements 

§ 80.1356 What are the attest engagement 

requirements for gasoline benzene 

compliance? 

In addition to the requirements for 

attest engagements that apply to refiners 

and importers under §§ 80.125 through 

80.130, 80.410, and 80.1030, the attest 

engagements for refiners and importers 

must include the following: 

(a) EPA Early Credit Generation 

Baseline Years’ Reports. (1) Obtain and 

read a copy of the refinery’s or 

importer’s annual reports and batch 

reports filed with EPA for 2004 and 

2005 that contain gasoline benzene and 

gasoline volume information. 

(2) Agree the yearly volumes of 

gasoline and benzene concentration, in 

volume percent and benzene gallons, 

reported to EPA in the reports specified 

in paragraph (a)(1) of this section with 

the inventory reconciliation analysis 

under § 80.128. 

(3) Verify that the information in the 

refinery’s or importer’s batch reports 


pwalker on PROD1PC71 with RULES_2
8554 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

filed with EPA under §§ 80.75 and 

80.105, and any laboratory test results, 

agree with the information contained in 

the reports specified in paragraph (a)(1) 

of this section. 

(4) Calculate the average benzene 

concentration for all of the refinery’s or 

importer’s gasoline volume over 2004 

and 2005 and verify that those values 

agree with the values reported to EPA 

per § 80.1285. 

(b) Baseline for Early Credit 

Generation. Take the following steps for 

the first attest reporting period 

following approval of a benzene 

baseline: 

(1) Obtain the EPA benzene baseline 

approval letter for the refinery to 

determine the refinery’s applicable 

benzene baseline under § 80.1285. 

(2) Obtain a written statement from 

the company representative identifying 

the benzene value used as the refinery’s 

baseline and agree that number to 

paragraph (b)(1) of this section and to 

the reports to EPA. 

(c) Early Credit Generation. The 

following procedures shall be 

completed for a refinery or importer that 

generates early benzene credits per 

§ 80.1275: 

(1) Obtain the baseline benzene 

concentration and gasoline volume from 

paragraph (a)(4) of this section. 

(2) Obtain the annual benzene report 

per § 80.1354. 

(3) If the benzene value under 

paragraph (c)(2) of this section is at least 

10 percent less than the value in 

paragraph (c)(1) of this section, compute 

and report as a finding the difference 

according to § 80.1275. 

(4) Compute and report as a finding 

the total number of benzene credits 

generated by multiplying the value 

calculated in paragraph (c)(3) of this 

section by the volume of gasoline listed 

in the report specified in paragraph 

(c)(2) of this section, and agree this 

number with the number reported to 

EPA. 

(d) Standard Credit Generation. The 

following procedures shall be 

completed for a refinery or importer that 

generates benzene credits per § 80.1290: 

(1) Obtain the annual average benzene 

value from the annual benzene report 

per § 80.1285. 

(2) If the annual average benzene 

value under paragraph (d)(1) of this 

section is less than 0.62 percent by 

volume, compute and report as a finding 

the difference according to § 80.1290. 

(3) Compute and report as a finding 

the total number of benzene credits 

generated by multiplying the value 

calculated in paragraph (d)(2) of this 

section by the volume of gasoline listed 

in the report specified in paragraph 

(d)(1) of this section, and agree this 

number with the number reported to 

EPA. 

(e) Credits Required. The following 

attest procedures shall be completed for 

refineries and importers: 

(1) Obtain the annual average benzene 

concentration and volume from the 

annual benzene report per § 80.1285. 

(2) If the value in paragraph (e)(1) of 

this section is greater than 0.62 percent 

by volume, compute and report as a 

finding the difference between 0.62 

percent by volume and the value in 

paragraph (e)(1) of this section. 

(3) Compute and report as a finding 

the total benzene credits required by 

multiplying the value in paragraph 

(e)(2) of this section times the volume of 

gasoline in paragraph (e)(1) of this 

section, and agree this number with the 

report to EPA. 

(4) Obtain a statement from the refiner 

or importer as to the portion of the 

deficit under paragraph (e)(3) of this 

section that was resolved with credits, 

or that was carried forward as a deficit 

under § 80.1230(b), and agree these 

figures with the report to EPA. 

(f) 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; 

and agree these figures 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. 

(g) 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 credits as follows: 

(i) Credits remaining from the 

previous year; plus 

(ii) Credits generated under 

paragraphs (c) and (d) of this section; 

plus 

(iii) Credits purchased under 

paragraph (f) of this section; minus 

(iv) Credits sold under paragraph (f) of 

this section; minus 

(v) Credits used under paragraphs (e) 

of this section; minus 

(vi) Credits expired; minus 

(vii) 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. 

Violations and Penalties 

§ 80.1358 What acts are prohibited under 

the gasoline benzene program? 

No person shall—

(a)(1) Produce or import gasoline 

subject to this subpart that does not 

comply with the applicable benzene 

standards under § 80.1230. 

(2) Fail to meet any other 

requirements of this subpart. 

(b) Cause another person to commit 

an act in violation of paragraph (a) of 

this section. 

§ 80.1359 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 benzene 

standards of this subpart shall be 

determined based on the benzene 

concentration of the gasoline, measured 

using the methodologies specified in 

§ 80.46(e), and other allowable 

adjustments. Any evidence or 

information, including the exclusive use 

of such evidence or information, may be 

used to establish the benzene 

concentration of the gasoline if the 

evidence or information is relevant to 

whether the benzene concentration of 

the gasoline would have been in 

compliance with the standard if the 

appropriate sampling and testing 

methodologies 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 § 80.46(e), business 

records, and commercial documents. 

(b) Determinations of compliance 

with the requirements of this subpart 

other than the benzene standards, and 

determinations of liability for any 

violation of this subpart, may be based 

on information from any source or 

location. Such information may include, 

but is not limited to, business records 

and commercial documents. 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8555 

§ 80.1360 Who is liable for violations 

under the gasoline benzene program? 

(a) The following persons are liable 

for violations of prohibited acts: 

(1) Any refiner or importer that 

violates § 80.1358(a) is liable for the 

violation. 

(2) Any person that causes another 

party to violate § 80.1358(a) is liable for 

a violation of § 80.1358(b). 

(3) Any parent corporation is liable 

for any violations of this subpart that are 

committed by any of its wholly-owned 

subsidiaries. 

(4) 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 a facility that is owned by the joint 

owners, or a facility that is committed 

by the joint venture operation or any of 

the joint owners of the facility. 

(b) Any person who violates § 80.1358 

is liable for the violation. 

§ 80.1361 What penalties apply under the 

gasoline benzene program? 

(a) Any person liable for a violation 

under § 80.1360 is subject to civil 

penalties as specified in sections 205 

and 211(d) 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 

§ 80.1358(a) and (b) for a violation of the 

applicable benzene standards or causing 

another person to violate the 

requirements 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 § 80.1360(b) for a failure to fulfill 

any requirement of credit generation, 

transfer, use, banking, or deficit carryforward correction is subject to a 

separate violation for each and every 

day in the averaging period in which 

invalid credits are generated, banked, 

transferred or used. 

(c) Any person liable under 

§ 80.1360(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. 

Foreign Refiners 

§ 80.1363 What are the additional 

requirements under this subpart for 

gasoline produced at foreign refineries? 

(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 that 

meets the definition of refiner under 

§ 80.2(i) for a foreign refinery. 

(3) Benzene-FRGAS means gasoline 

produced at a foreign refinery that has 

been assigned an individual refinery 

benzene baseline under § 80.1285, has 

been approved as a small refiner under 

§ 80.1340, or has been granted 

temporary relief under § 80.1335, and 

that is imported into the United States. 

(4) Non-Benzene-FRGAS means 

(i) Gasoline meeting any of the 

conditions specified in paragraph (a)(3) 

of this section that is not imported into 

the United States. 

(ii) Gasoline meeting any of the 

conditions specified in paragraph (a)(3) 

of this section during a year when the 

foreign refiner has opted to not 

participate in the Benzene-FRGAS 

program under paragraph (c)(3) of this 

section. 

(iii) Gasoline produced at a foreign 

refinery that has not been assigned an 

individual refinery benzene baseline 

under § 80.1285, or that has not been 

approved as a small refiner under 

§ 80.1340, or that has not been granted 

temporary relief under § 80.1335. 

(5) Certified Benzene-FRGAS means 

Benzene-FRGAS the foreign refiner 

intends to include in the foreign 

refinery’s benzene compliance 

calculations under § 80.1240 or credit 

calculations under § 80.1275 and does 

include in these calculations when 

reported to EPA. 

(6) Non-Certified Benzene-FRGAS 

means Benzene-FRGAS that is not 

Certified Benzene-FRGAS. 

(b) Baseline for Early Credits. For any 

foreign refiner to obtain approval under 

the benzene foreign refiner program of 

this subpart for any refinery in order to 

generate early credits under § 80.1275, it 

must apply for approval under the 

applicable provisions of this subpart. 

(1) The refiner shall follow the 

procedures specified in §§ 80.1280 and 

80.1285 to establish a baseline of the 

volume of gasoline that was produced at 

the refinery and imported into the 

United States during the applicable 

years. 

(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 correct 

this deficiency after a request for more 

information, EPA will not assign an 

individual refinery baseline. 

(c) General requirements for BenzeneFRGAS foreign refiners. A foreign 

refiner of a refinery that is approved 

under the benzene foreign refiner 

program of this subpart must designate 

each batch of gasoline produced at the 

foreign refinery that is exported to the 

United States as either Certified 

Benzene-FRGAS or as Non-Certified 

Benzene-FRGAS, except as provided in 

paragraph (c)(3) of this section. 

(1) In the case of Certified BenzeneFRGAS, the foreign refiner must meet 

all requirements that apply to refiners 

under this subpart. 

(2) In the case of Non-Certified 

Benzene-FRGAS, the foreign refiner 

shall meet all the following 

requirements: 

(i) The designation requirements in 

this section; 

(ii) The recordkeeping requirements 

in this section and in § 80.1350; 

(iii) The reporting requirements in 

this section and in §§ 80.1352 and 

80.1354; 

(iv) The product transfer document 

requirements in this section; 

(v) The prohibitions in this section 

and in § 80.1358; and 

(vi) The independent audit 

requirements in this section and in 

§ 80.1356. 

(3)(i) Any foreign refiner that 

generates early benzene credits under 

§ 80.1275 shall designate all BenzeneFRGAS as Certified Benzene-FRGAS for 

any year that such credits are generated. 

(ii) Any foreign refiner that has been 

approved to produce gasoline subject to 

the benzene foreign refiner program for 

a foreign refinery under this subpart 

may elect to classify no gasoline 

imported into the United States as 

Benzene-FRGAS provided the foreign 

refiner notifies EPA of the election no 

later than November 1 preceding the 

beginning of the next compliance 

period. 

(iii) An election under paragraph 

(c)(3)(ii) of this section shall be for a 12 

month compliance period and apply to 

all gasoline that is produced by the 

foreign refinery that is imported into the 

United States, and shall remain in effect 

for each succeeding year unless and 

until the foreign refiner notifies EPA of 

the termination of the election. The 

change in election shall take effect at the 

beginning of the next annual 

compliance period. 

(d) Designation, product transfer 

documents, and foreign refiner 

certification. (1) Any foreign refiner of a 

foreign refinery that has been approved 

by EPA to produce gasoline subject to 

the benzene foreign refiner program 


pwalker on PROD1PC71 with RULES_2
8556 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

must designate each batch of BenzeneFRGAS as such at the time the gasoline 

is produced, unless the refiner has 

elected to classify no gasoline exported 

to the United States as Benzene-FRGAS 

under paragraph (c)(3) of this section. 

(2) On each occasion when any 

person transfers custody or title to any 

Benzene-FRGAS prior to its being 

imported into the United States, it must 

include the following information as 

part of the product transfer document 

information: 

(i) Designation of the gasoline as 

Certified Benzene-FRGAS or as NonCertified Benzene-FRGAS; and 

(ii) The name and EPA refinery 

registration number of the refinery 

where the Benzene-FRGAS was 

produced. 

(3) On each occasion when BenzeneFRGAS 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 Benzene-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 Benzene-FRGAS; 

(B) The identification of the gasoline 

as Certified Benzene-FRGAS or NonCertified Benzene-FRGAS; 

(C) The volume of Benzene-FRGAS 

being transported, in gallons; 

(D) In the case of Certified BenzeneFRGAS: 

(1) The benzene content as 

determined under paragraph (f) of this 

section, and the applicable designations 

stated in paragraph (d)(2)(i) of this 

section; and 

(2) A declaration that the BenzeneFRGAS is being included in the 

applicable compliance calculations 

required by EPA under this subpart. 

(ii) The certification shall be made 

part of the product transfer documents 

for the Benzene-FRGAS. 

(e) Transfers of Benzene-FRGAS to 

non-United States markets. The foreign 

refiner is responsible to ensure that all 

gasoline classified as Benzene-FRGAS is 

imported into the United States. A 

foreign refiner may remove the BenzeneFRGAS classification, and the gasoline 

need not be imported into the United 

States, but only if: 

(1) The foreign refiner excludes: 

(i) The volume of gasoline from the 

refinery’s compliance report under 

§ 80.1354; and 

(ii) In the case of Certified BenzeneFRGAS, the volume of the gasoline from 

the compliance report under § 80.1354. 

(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 that BenzeneFRGAS 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 BenzeneFRGAS loaded onto the vessel 

(exclusive of any tank bottoms before 

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 Benzene-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 that Certified 

Benzene-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 Benzene-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) Determine the benzene content 

value for each compartment using the 

methodology as specified in § 80.46(e) 

by one of the following: 

(A) The third party analyzing each 

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 Benzene-FRGAS from the 

refinery to the load port, and from this 

review determine: 

(A) The refinery at which the 

Benzene-FRGAS was produced; and 

(B) That the Benzene-FRGAS 

remained segregated from: 

(1) Non-Benzene-FRGAS and NonCertified Benzene-FRGAS; and 

(2) Other Certified Benzene-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 (f)(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 (f)(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) Any foreign refiner 

and any United States importer of 

Certified Benzene-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 benzene 

content value; except as specified in 

paragraph (g)(1)(ii) of this section. 

(ii) Where a vessel transporting 

Certified Benzene-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 benzene content value 

determined at the port of entry is higher 

than the benzene content 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) for the test method 

specified at § 80.46(e). 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8557 

(ii) The United States importer and 

the foreign refiner shall treat the 

gasoline as Non-Certified BenzeneFRGAS, and the foreign refiner shall 

exclude the gasoline volume from its 

gasoline volumes calculations and 

benzene standard designations under 

this subpart. 

(h) Attest requirements. Refiners, for 

each annual compliance period, must 

arrange to have an attest engagement 

performed of the underlying 

documentation that forms the basis of 

any report required under this subpart. 

The attest engagement must comply 

with the procedures and requirements 

that apply to refiners under §§ 80.125 

through 80.130, § 80.1356, and other 

applicable attest engagement provisions, 

and must be submitted to the 

Administrator of EPA for the prior 

annual compliance period within the 

time period required under § 80.130. 

The following additional procedures 

shall be carried out for any foreign 

refiner of Benzene-FRGAS. 

(1) The inventory reconciliation 

analysis under § 80.128(b) and the 

tender analysis under § 80.128(c) shall 

include Non-Benzene-FRGAS. 

(2) Obtain separate listings of all 

tenders of Certified Benzene-FRGAS 

and of Non-Certified Benzene-FRGAS, 

and obtain separate listings of Certified 

Benzene-FRGAS based on whether it is 

small refiner gasoline, gasoline 

produced through the use of credits, or 

other applicable designation under this 

subpart. 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 Benzene-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 

Benzene-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 

benzene content test results. 

(B) Identify, and report as a finding, 

each occasion the load port and port of 

entry benzene content 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 Benzene-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 Benzene-FRGAS is 

stored, and pipeline activity records for 

any pipeline used to transport the 

Certified Benzene-FRGAS, prior to being 

loaded onto the vessel. Use these 

records to determine whether the 

Certified Benzene-FRGAS was produced 

at the refinery that is the subject of the 

attest engagement, and whether the 

Certified Benzene-FRGAS was mixed 

with any Non-Certified BenzeneFRGAS, Non-Benzene-FRGAS, or any 

Certified Benzene-FRGAS produced at a 

different refinery. 

(5) Select a sample from the list of 

vessels identified in paragraph (h)(3) of 

this section used to transport Certified 

and Non-Certified Benzene-FRGAS, in 

accordance with the guidelines in 

§ 80.127, and for each vessel selected 

perform the following: 

(i) 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. 

(ii) 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-Benzene-FRGAS, and 

perform the following: 

(i) Agree the total volume and 

benzene content of tenders from the 

listings to the gasoline inventory 

reconciliation analysis in § 80.128(b). 

(ii) Obtain a separate listing of the 

tenders under this paragraph (h)(6) 

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 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 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 approved as a foreign refiner 

under this subpart. 

(1) Any United States Environmental 

Protection Agency inspector or auditor 

must 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) Benzene-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 must 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, if 

applicable, including the volume and 

benzene content of gasoline; transfers of 

title or custody of any gasoline or 

blendstocks whether Benzene-FRGAS or 

Non-Benzene-FRGAS, produced at the 

foreign refinery during the period 

January 1, 2004 through December 31, 

2005, and any work papers related to 

refinery baseline establishment; 

(B) The volume and benzene content 

of Benzene-FRGAS; 

(C) The proper classification of 

gasoline as being Benzene-FRGAS or as 


pwalker on PROD1PC71 with RULES_2
8558 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

not being Benzene-FRGAS, or as 

Certified Benzene-FRGAS or as NonCertified Benzene-FRGAS, and all other 

relevant designations under this 

subpart; 

(D) Transfers of title or custody to 

Benzene-FRGAS; 

(E) Sampling and testing of BenzeneFRGAS; 

(F) Work performed and reports 

prepared by independent third parties 

and by independent auditors under the 

requirements of this section, 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, 

gasoline additives or blendstock, and 

interviewing employees. 

(vii) Any employee of the foreign 

refiner must 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 must be provided to an 

EPA inspector or auditor, on request, 

within 10 working days. 

(ix) English language interpreters 

must be provided to accompany EPA 

inspectors and auditors, on request. 

(2) An agent for service of process 

located in the District of Columbia shall 

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. 

(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 

participation in the benzene foreign 

refiner program or producing and 

exporting gasoline under any such 

program, and all other actions to comply 

with the requirements of this subpart 

relating to participation in any benzene 

foreign refiner program, or to establish 

an individual refinery gasoline benzene 

baseline under this subpart constitute 

actions or activities covered by and 

within the meaning of the provisions of 

28 U.S.C. 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, 

including conduct that violates the 

False Statements Accountability Act of 

1996 (18 U.S.C. 1001) and section 

113(c)(2) of the Clean Air Act (42 U.S.C. 

7413). 

(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 Benzene-FRGAS 

produced at a foreign refinery is stored 

or transported by another company 

between the refinery and the vessel that 

transports the Benzene-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 petition to 

participate in any benzene foreign 

refiner program. 

(j) Sovereign immunity. By submitting 

a petition for participation in any 

benzene foreign refiner program under 

this subpart (and baseline, if applicable) 

under this section, or by producing and 

exporting gasoline to the United States 

under any such program, the foreign 

refiner, and 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, 

including conduct that violates the 

False Statements Accountability Act of 

1996 (18 U.S.C. 1001) and section 

113(c)(2) of the Clean Air Act (42 U.S.C. 

7413). 

(k) Bond posting. Any foreign refiner 

shall meet the requirements of this 

paragraph (k) as a condition to approval 

as benzene foreign refiner under this 

subpart. 

(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 refinery’s 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) 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, including where such conduct 

violates the False Statements 

Accountability Act of 1996 (18 U.S.C. 

1001) and section 113(c)(2) of the Clean 

Air Act (42 U.S.C. 7413); 

(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 

(iii) Include a commitment that the 

bond will remain in effect for at least 

five years following the end of latest 

annual reporting period that the foreign 

refiner produces gasoline pursuant to 

the requirements of this subpart. 

(4) 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. 

(5) If the bond amount for a foreign 

refiner 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. 

(l) [Reserved] 

(m) English language reports. Any 

report or other document submitted to 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8559 

EPA by a foreign refiner shall be in 

English language, or shall include an 

English language translation. 

(n) Prohibitions. (1) No person may 

combine Certified Benzene-FRGAS with 

any Non-Certified Benzene-FRGAS or 

Non-Benzene-FRGAS, and no person 

may combine Certified Benzene-FRGAS 

with any Certified Benzene-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 Benzene-FRGAS or as NonBenzene-FRGAS, and each batch 

classified as Benzene-FRGAS shall be 

further classified as Certified BenzeneFRGAS or as Non-Certified BenzeneFRGAS. 

(2) Gasoline shall be classified as 

Certified Benzene-FRGAS or as NonCertified Benzene-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 BenzeneFRGAS under paragraph (g) of this 

section. Additionally, the importer shall 

comply with all requirements of this 

subpart applicable to importers. 

(3) For each gasoline batch classified 

as Benzene-FRGAS, any United States 

importer shall perform the following 

procedures. 

(i) In the case of both Certified and 

Non-Certified Benzene-FRGAS, have an 

independent third party: 

(A) Determine the volume of gasoline 

in the vessel; 

(B) Use the foreign refiner’s BenzeneFRGAS certification to determine the 

name and EPA-assigned registration 

number of the foreign refinery that 

produced the Benzene-FRGAS; 

(C) Determine the name and country 

of registration of the vessel used to 

transport the Benzene-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 BenzeneFRGAS, 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) Obtain the compartment samples; 

and 

(C) Determine the benzene content 

value of each compartment sample 

using the methodology specified at 

§ 80.46(e) by the third party analyzing 

the sample or by the third party 

observing the importer analyze the 

sample. 

(4) Any importer shall submit reports 

within 30 days following the date any 

vessel transporting Benzene-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, and 

including identification of the port at 

which the product was offloaded. 

(5) Any United States importer shall 

meet all other requirements of this 

subpart for any imported gasoline that is 

not classified as Certified BenzeneFRGAS under paragraph (o)(2) of this 

section. 

(p) Truck imports of Certified 

Benzene-FRGAS produced at a foreign 

refinery. 

(1) Any refiner whose Certified 

Benzene-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 Benzene-FRGAS 

remains segregated from Non-Certified 

Benzene-FRGAS and from NonBenzene-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 Benzene-FRGAS from that 

refinery from all other gasoline; 

(ii) Contracts with any terminals and/ 

or pipelines that receive and/or 

transport Certified Benzene-FRGAS, that 

prohibit the commingling of Certified 

Benzene-FRGAS with any of the 

following: 

(A) Other Certified Benzene-FRGAS 

from other refineries. 

(B) All Non-Certified BenzeneFRGAS. 

(C) All Non-Benzene-FRGAS; 

(iii) Procedures for obtaining and 

reviewing truck loading records and 

United States import documents for 

Certified Benzene-FRGAS to ensure that 

such gasoline is only loaded into trucks 

making deliveries to the United States; 

(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 BenzeneFRGAS 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 temporary 

refiner relief individual refinery 

benzene standard under this subpart. 

(q) Withdrawal or suspension of 

foreign refiner status. EPA may 

withdraw or suspend a foreign refiner’s 

benzene baseline or standard approval 

for 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; 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 refiner 

benzene baseline. 

(1) A foreign refiner may begin using 

an individual refinery benzene baseline 

under this subpart 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 that will meet the 

independent third party and 

independent attest requirements for the 

foreign refinery have made the 

commitments required in paragraphs 

(f)(3)(iii) and (h)(7)(iii) of this section; 

and 

(v) The foreign refiner has met the 

bond requirements of paragraph (k) of 

this section. 

(2) In any case where a foreign refiner 

uses an individual refinery baseline 


pwalker on PROD1PC71 with RULES_2
8560 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

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 the EPA, and the foreign 

refiner shall be liable for any resulting 

violation of the requirements of this 

subpart. 

(s) Additional requirements for 

petitions, reports and certificates. Any 

petition for approval to produce 

gasoline subject to the benzene foreign 

refiner program, any alternative 

procedures under paragraph (p) of this 

section, any report or other submission 

required by paragraph (c), (f)(2), or (i) 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. 

(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 L, 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 L, including 40 CFR 80.1363 apply 

to [insert name of foreign refiner]. Pursuant 

to Clean Air Act section 113(c) and 18 U.S.C. 

1001, the penalty for furnishing false, 

incomplete or misleading information in this 

certification or submission is a fine of up to 

$10,000 U.S., and/or imprisonment for up to 

five years. 

PART 85—CONTROL OF AIR 

POLLUTION FROM MOBILE SOURCES 

■ 11a. The authority citation for part 85 

continues to read as follows: 

Authority: 42 U.S.C. 7401–7671q. 

Subpart P—[Amended] 

■ 11b. Section 85.1515 is amended by 

adding paragraphs (c)(2)(vii), (c)(2)(viii), 

and (c)(8) to read as follows. 

§ 85.1515 Emission standards and test 

procedures applicable to imported 

nonconforming motor vehicles and motor 

vehicle engines. 

* * * * * 

(c) * * * 

(2) * * * 

(vii) Nonconforming LDV/LLDTs 

originally manufactured in OP years 

2009 and later must meet the 

evaporative emission standards in Table 

S09–1 in 40 CFR 86.1811–09(e). 

However, LDV/LLDTs originally 

manufactured in OP years 2009 and 

2010 and imported by ICIs who qualify 

as small volume manufacturers as 

defined in 40 CFR 86.1838–01 are 

exempt from the LDV/LLDT evaporative 

emission standards in Table S09–1 in 40 

CFR 86.1811–09(e), but must comply 

with the Tier 2 evaporative emission 

standards in Table S04–3 in 40 CFR 

86.1811–04(e). 

(viii) Nonconforming HLDTs and 

MDPVs originally manufactured in OP 

years 2010 and later must meet the 

evaporative emission standards in Table 

S09–1 in 40 CFR 86.1811–09(e). 

However, HLDTs and MDPVs originally 

manufactured in OP years 2010 and 

2011 and imported by ICIs, who qualify 

as small volume manufacturers as 

defined in 40 CFR 86.1838–01, are 

exempt from the HLDTs and MDPVs 

evaporative emission standards in Table 

S09–1 in 40 CFR 86.1811–09(e), but 

must comply with the Tier 2 

evaporative emission standards in Table 

S04–3 in 40 CFR 86.1811–04(e). 

* * * * * 

(8)(i) Nonconforming LDV/LLDTs 

originally manufactured in OP years 

2010 and later must meet the cold 

temperature NHMC emission standards 

in Table S10–1 in 40 CFR 86.1811–

10(g). 

(ii) Nonconforming HLDTs and 

MDPVs originally manufactured in OP 

years 2012 and later must meet the cold 

temperature NHMC emission standards 

in Table S10–1 in 40 CFR 86.1811–

10(g). 

(iii) ICIs, which qualify as small 

volume manufacturers, are exempt from 

the cold temperature NMHC phase-in 

intermediate percentage requirements 

described in 40 CFR 86.1811–10(g)(3). 

See 40 CFR 86.1811–04(k)(5)(vi) and 

(vii). 

(iv) As an alternative to the 

requirements of paragraphs (c)(8)(i) and 

(ii) of this section, ICIs may elect to 

meet a cold temperature NMHC family 

emission level below the cold 

temperature NMHC fleet average 

standards specified in Table S10–1 of 40 

CFR 86.1811–10 and bank or sell credits 

as permitted in 40 CFR 86.1864–10. An 

ICI may not meet a higher cold 

temperature NMHC family emission 

level than the fleet average standards in 

Table S10–1 of 40 CFR 86.1811–10 as 

specified in paragraphs (c)(8)(i) and (ii) 

of this section, unless it demonstrates to 

the Administrator at the time of 

certification that it has obtained 

appropriate and sufficient NMHC 

credits from another manufacturer, or 

has generated them in a previous model 

year or in the current model year and 

not traded them to another 

manufacturer or used them to address 

other vehicles as permitted in 40 CFR 

86.1864–10. 

(v) Where an ICI desires to obtain a 

certificate of conformity using a higher 

cold temperature NMHC family 

emission level than specified in 

paragraphs (c)(8)(i) and (ii) of this 

section, but does not have sufficient 

credits to cover vehicles imported under 

such certificate, the Administrator may 

issue such certificate if the ICI has also 

obtained a certificate of conformity for 

vehicles certified using a cold 

temperature NMHC family emission 

level lower than that required under 

paragraphs (c)(8)(i) and (ii) of this 

section. The ICI may then import 

vehicles to the higher cold temperature 

NMHC family emission level only to the 

extent that it has generated sufficient 

credits from vehicles certified to a 

family emission level lower than the 

cold temperature NMHC fleet average 

standard during the same model year. 

(vi) ICIs using cold temperature 

NMHC family emission levels higher 

than the cold temperature NMHC fleet 

average standards specified in 

paragraphs (c)(8)(i) and (ii) of this 

section must monitor their imports so 

that they do not import more vehicles 

certified to such family emission levels 

than their available credits can cover. 

ICIs must not have a credit deficit at the 

end of a model year and are not 

permitted to use the deficit carryforward 

provisions provided in 40 CFR 86.1864–

10. 

(vii) The Administrator may condition 

the certificates of conformity issued to 

ICIs as necessary to ensure that vehicles 

subject to this paragraph (c)(8) comply 

with the applicable cold temperature 

NMHC fleet average standard for each 

model year. 

* * * * * 

PART 86—CONTROL OF EMISSIONS 

FROM NEW AND IN-USE HIGHWAY 

VEHICLES AND ENGINES 

■ 12. The authority citation for part 86 

continues to read as follows: 

Authority: 42 U.S.C. 7401–7671q. 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8561 

Subpart H—[Amended] 

■ 13. Section 86.701–94 is amended by 

revising paragraph (a) to read as follows: 

§ 86.701–94 General applicability. 

(a) The provisions of this subpart 

apply to: 1994 through 2003 model year 

Otto-cycle and diesel light-duty 

vehicles; 1994 through 2003 model year 

Otto-cycle and diesel light-duty trucks; 

and 1994 and later model year Ottocycle and diesel heavy-duty engines; 

and 2001 and later model year Ottocycle heavy-duty vehicles and engines 

certified under the provisions of subpart 

S of this part. The provisions of subpart 

B of this part apply to this subpart. The 

provisions of § 86.1811–04(a)(5) and (p) 

apply to 2004 and later model year 

light-duty vehicles, light-duty trucks, 

and medium duty passenger vehicles. 

* * * * * 

Subpart S—[Amended] 

■ 14. Section 86.1803–01 is amended by 

revising the definition of ‘‘Banking’’ and 

adding the definition for ‘‘Fleet average 

cold temperature NMHC standard’’ in 

alphabetical order to read as follows: 

§ 86.1803–01 Definitions. 

* * * * * 

Banking means one of the following: 

(1) The retention of NOX emission 

credits for complete heavy-duty vehicles 

by the manufacturer generating the 

emission credits, for use in future model 

year certification programs as permitted 

by regulation. 

(2) The retention of cold temperature 

non-methane hydrocarbon (NMHC) 

emission credits for light-duty vehicles, 

light-duty trucks, and medium-duty 

passenger vehicles by the manufacturer 

generating the emission credits, for use 

in future model year certification 

programs as permitted by regulation. 

* * * * * 

Fleet average cold temperature NMHC 

standard means, for light-duty vehicles, 

light-duty trucks and medium-duty 

passenger vehicles, an NMHC cold 

temperature standard imposed over an 

individual manufacturer’s total 50-State 

U.S. sales (or a fraction of total U.S. 

sales during phase-in years), as ‘‘U.S. 

sales’’ is defined to include all national 

sales, including points-of-first sale in 

California, of a given model year. 

Manufacturers determine their 

compliance with such a standard by 

averaging, on a sales-weighted basis, the 

individual NMHC ‘‘Family Emission 

Limits’’ (FEL—as defined in this 

subpart) to which light-duty vehicles, 

light-duty trucks and medium-duty 

passenger vehicles were certified and 

sold for that model year. 

* * * * * 

■ 15. Section 86.1805–04 is amended by 

adding paragraph (g) to read as follows: 

§ 86.1805–04 Useful life. 

* * * * * 

(g) Where cold temperature NMHC 

standards are applicable, the useful life 

requirement for compliance with the 

cold temperature NMHC standard only 

is as follows: 

(1) For LDV/LLDTs, 10 years or 

120,000 miles, whichever occurs first. 

(2) For HLDT/MDPVs, 11 years or 

120,000 miles, whichever occurs first. 

■ 16. A new § 86.1809–10 is added to 

Subpart S to read as follows: 

§ 86.1809–10 Prohibition of defeat devices. 

(a) No new light-duty vehicle, lightduty truck, medium-duty passenger 

vehicle, or complete heavy-duty vehicle 

shall be equipped with a defeat device. 

(b) The Administrator may test or 

require testing on any vehicle at a 

designated location, using driving 

cycles and conditions that may 

reasonably be expected to be 

encountered in normal operation and 

use, for the purposes of investigating a 

potential defeat device. 

(c) For cold temperature CO and cold 

temperature NMHC emission control, 

the Administrator will use a guideline 

to determine the appropriateness of the 

CO and NMHC emission control at 

ambient temperatures between 25 °F 

(the upper bound of the temperatue test 

range) and 68 °F (the lower bound of the 

FTP range). The guideline for CO 

emission congruity across the 

intermediate temperature range is the 

linear interpolation between the CO 

standard applicable at 25 °F and the CO 

standard applicable at 68 °F. The 

guideline for NMHC emission congruity 

across the intermediate temperature 

range is the linear interpolation between 

the NMHC FEL pass limit (e.g. 0.3499 

g/mi for a 0.3 g/mi FEL) applicable at 

20 °F and the Tier 2 NMOG standard to 

which the vehicle was certified at 68 °F, 

where the intermediate temperature 

NMHC level is rounded to the nearest 

hundredth for comparison to the 

interpolated line. For vehicles that 

exceed this CO emissions guideline or 

this NMHC emissions guideline upon 

intermediate temperature cold testing: 

(1) If the CO emission level is greater 

than the 20 °F emission standard, the 

vehicle will automatically be considered 

to be equipped with a defeat device 

without further investigation. If the 

intermediate temperature NMHC 

emission level, rounded to the nearest 

hundredth, is greater than the 20 °F FEL 

pass limit, the vehicle will be presumed 

to have a defeat device unless the 

manufacturer provides evidence to 

EPA’s satisfaction that the cause of the 

test result in question is not due to a 

defeat device. 

(2) If the CO emission level does not 

exceed the 20 °F emission standard, the 

Administrator may investigate the 

vehicle design for the presence of a 

defeat device under paragraph (d) of this 

section. If the intermediate temperature 

NMHC emission level, rounded to the 

nearest hundredth, does not exceed the 

20 °F FEL pass limit the Administrator 

may investigate the vehicle design for 

the presence of a defeat device under 

paragraph (d) of this section. 

(d) The following provisions apply for 

vehicle designs designated by the 

Administrator to be investigated for 

possible defeat devices: 

(1) The manufacturer must show to 

the satisfaction of the Administrator that 

the vehicle design does not incorporate 

strategies that unnecessarily reduce 

emission control effectiveness exhibited 

during the Federal Test Procedure or 

Supplemental Federal Test Procedure 

(FTP or SFTP) when the vehicle is 

operated under conditions that may 

reasonably be expected to be 

encountered in normal operation and 

use. 

(2) The following information 

requirements apply: 

(i) Upon request by the Administrator, 

the manufacturer must provide an 

explanation containing detailed 

information regarding test programs, 

engineering evaluations, design 

specifications, calibrations, on-board 

computer algorithms, and design 

strategies incorporated for operation 

both during and outside of the Federal 

emission test procedure. 

(ii) For purposes of investigations of 

possible cold temperature CO or cold 

temperature NMHC defeat devices 

under this paragraph (d), the 

manufacturer must provide an 

explanation to show, to the satisfaction 

of the Administrator, that CO emissions 

and NMHC emissions are reasonably 

controlled in reference to the linear 

guideline across the intermediate 

temperature range. 

(e) For each test group of Tier 2 LDV/ 

LLDTs and HLDT/MDPVs and interim 

non-Tier 2 LDV/LLDTs and HLDT/ 

MDPVs the manufacturer must submit, 

with the Part II certification application, 

an engineering evaluation 

demonstrating to the satisfaction of the 

Administrator that a discontinuity in 

emissions of non-methane organic gases, 

carbon monoxide, oxides of nitrogen 

and formaldehyde measured on the 


pwalker on PROD1PC71 with RULES_2
8562 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

Federal Test Procedure (subpart B of 

this part) does not occur in the 

temperature range of 20 to 86 °F. For 

diesel vehicles, the engineering 

evaluation must also include particulate 

emissions. 

■ 17. A new § 86.1810–09 is added to 

Subpart S to read as follows: 

§ 86.1810–09 General standards; increase 

in emissions; unsafe condition; waivers. 

Section 86.1810–09 includes text that 

specifies requirements that differ from 

§ 86.1810–01. Where a paragraph in 

§ 86.1810–01 is identical and applicable 

to § 86.1810–09, this may be indicated 

by specifying the corresponding 

paragraph and the statement 

‘‘[Reserved]. For guidance see 

§ 86.1810–01.’’ Where a corresponding 

paragraph of § 86.1810–01 is not 

applicable, this is indicated by the 

statement ‘‘[Reserved].’’ This section 

applies to model year 2009 and later 

light-duty vehicles and light-duty trucks 

fueled by gasoline, diesel, methanol, 

ethanol, natural gas and liquefied 

petroleum gas fuels. This section also 

applies to MDPVs and complete heavyduty vehicles certified according to the 

provisions of this subpart. Multi-fueled 

vehicles (including dual-fueled and 

flexible-fueled vehicles) must comply 

with all requirements established for 

each consumed fuel (or blend of fuels in 

the case of flexible fueled vehicles). The 

standards of this subpart apply to both 

certification and in-use vehicles unless 

otherwise indicated. This section also 

applies to hybrid electric vehicles and 

zero emission vehicles. Unless 

otherwise specified, requirements and 

provisions of this subpart applicable to 

methanol fueled vehicles are also 

applicable to Tier 2 and interim nonTier 2 ethanol fueled vehicles. 

(a) through (e) [Reserved]. For 

guidance see § 86.1810–01. 

(f) Altitude requirements. (1) All 

emission standards apply at low altitude 

conditions and at high altitude 

conditions, except for supplemental 

exhaust emission standards, cold 

temperature NMHC emission standards, 

and the evaporative emission standards 

as described in § 86.1811–09(e). 

Supplemental exhaust emission 

standards, as described in § 86.1811–

04(f), apply only at low altitude 

conditions. Cold temperature NMHC 

emission standards, as described in 

§ 86.1811–10(g), apply only at low 

altitude conditions. Tier 2 evaporative 

emission standards apply at high 

altitude conditions as specified in 

§ 86.1810–01(f) and (j), and § 86.1811–

04(e). 

(2) For vehicles that comply with the 

cold temperature NMHC standards, 

manufacturers must submit an 

engineering evaluation indicating that 

common calibration approaches are 

utilized at high altitudes. Any deviation 

from low altitude emission control 

practices must be included in the 

auxiliary emission control device 

(AECD) descriptions submitted at 

certification. Any AECD specific to high 

altitude must require engineering 

emission data for EPA evaluation to 

quantify any emission impact and 

validity of the AECD. 

(g) through (p) [Reserved]. For 

guidance see § 86.1810–01. 

■ 18. Section 86.1811–04 is amended by 

adding paragraphs (k)(5)(iv) through 

(vii) and (q)(1)(vi) through (ix) to read as 

follows: 

§ 86.1811–04 Emission standards for lightduty vehicles, light-duty trucks and 

medium-duty passenger vehicles. 

* * * * * 

(k) * * * 

(5) * * * 

(iv) Vehicles produced by small 

volume manufacturers, as defined in 

§ 86.1838–01, are exempt from the LDV/ 

LLDT evaporative emissions standards 

in Table S09–1 of § 86.1811–09(e) for 

model years 2009 and 2010, but must 

comply with the Tier 2 evaporative 

emission standards in Table S04–3 in 

paragraph (e)(1) of this section for 

model years 2009 and 2010. 

(v) Vehicles produced by small 

volume manufacturers, as defined in 

§ 86.1838–01, are exempt from the 

HLDT/MDPV evaporative emissions 

standards in Table S09–1 of § 86.1811–

09(e) for model years 2010 and 2011, 

but must comply with the Tier 2 

evaporative emission standards in Table 

S04–3 in paragraph (e)(1) of this section 

for model years 2010 and 2011. 

(vi) Small volume manufacturers, as 

defined in § 86.1838–01, are exempt 

from the LDV/LLDT cold temperature 

NMHC phase-in requirements in Table 

S10–1 of § 86.1811–10(g) for model 

years 2010, 2011, and 2012, but must 

comply with the 100% requirement for 

2013 and later model years for cold 

temperature NMHC standards. 

(vii) Small volume manufacturers, as 

defined in § 86.1838–01, are exempt 

from the HLDT/MDPV cold temperature 

NMHC phase-in requirements in Table 

S10–1 of § 86.1811–10(g) for model 

years 2012, 2013, and 2014, but must 

comply with the 100% requirement for 

2015 and later model years for cold 

temperature NMHC standards. 

* * * * * 

(q) * * * 

(1) * * * 

(vi) Defer compliance with the LDV/ 

LLDT evaporative emissions standards 

in Table S09–1 of § 86.1811–09(e) until 

2013, and defer 100% compliance with 

the LDV/LLDT evaporative emissions 

standards in Table S09–2 of § 86.1811–

09(e) until 2016. (The hardship relief 

may be extended one additional model 

year—two model years total.) 

(vii) Defer compliance with the 

HLDT/MDPV evaporative emissions 

standards in Table S09–1 of § 86.1811–

09(e) until 2014, and defer 100% 

compliance with the HLDT/MDPV 

evaporative emissions standards in 

Table S09–2 of § 86.1811–09(e) until 

2016. (The hardship relief may be 

extended one additional model year—

two model years total.) 

(viii) Defer 100% compliance with the 

LDV/LLDT cold temperature NMHC 

standards in Table S10–X of § 86.1811–

10(g) until 2015. (The hardship relief 

may be extended one additional model 

year—two model years total.) 

(ix) Defer 100% compliance with the 

HLDT/MDPV cold temperature NMHC 

standards in Table S10–X of § 86.1811–

10(g) until 2017. (The hardship relief 

may be extended one additional model 

year—two model years total.) 

* * * * * 

■ 19. A new § 86.1811–09 is added to 

Subpart S to read as follows: 

§ 86.1811–09 Emission standards for lightduty vehicles, light-duty trucks and 

medium-duty passenger vehicles. 

Section 86.1811–09 includes text that 

specifies requirements that differ from 

§ 86.1811–04. Where a paragraph in 

§ 86.1811–04 is identical and applicable 

to § 86.1811–09, this may be indicated 

by specifying the corresponding 

paragraph and the statement 

‘‘[Reserved]. For guidance see 

§ 86.1811–04.’’ Where a corresponding 

paragraph of § 86.1811–04 is not 

applicable, this is indicated by the 

statement ‘‘[Reserved].’’

(a) Applicability. (1) This section 

contains regulations implementing 

emission standards for all LDVs, LDTs 

and MDPVs. This section applies to 

2009 and later model year LDVs, LDTs 

and MDPVs fueled by gasoline, diesel, 

methanol, ethanol, natural gas and 

liquefied petroleum gas fuels, except as 

noted. Additionally, this section applies 

to hybrid electric vehicles (HEVs) and 

zero emission vehicles (ZEVs). Unless 

otherwise specified, multi-fueled 

vehicles must comply with all 

requirements established for each 

consumed fuel. 

(2) through (4) [Reserved]. For 

guidance see § 86.1811–04. 

(5) The exhaust emission standards 

and evaporative emission standards of 

this section apply equally to 

certification and in-use LDVs, LDTs and 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8563 

MDPVs, unless otherwise specified. See 

paragraph (t) of this section for interim 

evaporative emission in-use standards 

that are different than the certification 

evaporative emission standards 

specified in paragraph (e) of this 

section. 

(b) through (d) [Reserved]. For 

guidance see § 86.1811–04. 

(e) Evaporative emission standards. 

Evaporative emissions from gasolinefueled, natural gas-fueled, liquefied 

petroleum gas-fueled, ethanol-fueled 

and methanol-fueled vehicles must not 

exceed the standards in this paragraph 

(e). The standards apply equally to 

certification and in-use vehicles. 

(1) Diurnal-plus-hot soak evaporative 

hydrocarbon standards. (i) 

Hydrocarbons for LDV/LLDTs, HLDTs 

and MDPVs that are gasoline-fueled, 

dedicated natural gas-fueled, dedicated 

liquefied petroleum gas-fueled, 

dedicated ethanol-fueled, dedicated 

methanol-fueled and multi-fueled 

vehicles when operating on gasoline 

must not exceed the diurnal plus hot 

soak standards shown in Table S09–1 

for the full three diurnal test sequence 

and for the supplemental two diurnal 

test sequence. The standards apply 

equally to certification and in-use 

vehicles, except as otherwise specified 

in paragraph (t) of this section. Table 

S09–1 follows: 

TABLE S09–1.—LIGHT-DUTY DIURNAL PLUS HOT SOAK EVAPORATIVE EMISSION STANDARDS

[grams per test] 

Vehicle category Model year 

3 day 

diurnal+hot 

soak 

Supplemental 

2 day 

diurnal+hot 

soak 

LDVs ............................................................................................................................................ 2009 0.50 0.65 

LLDTs .......................................................................................................................................... 2009 0.65 0.85 

HLDTs .......................................................................................................................................... 2010 0.90 1.15 

MDPVs ......................................................................................................................................... 2010 1.00 1.25 

(ii) Hydrocarbons for LDV/LLDTs, 

HLDTs and MDPVs that are multi-fueled 

vehicles operating on non-gasoline fuel 

must not exceed the diurnal plus hot 

soak standards shown in Table S09–2 

for the full three diurnal test sequence 

and for the supplemental two diurnal 

test sequence. The standards apply 

equally to certification and in-use 

vehicles except as otherwise specified 

in paragraph (t) of this section. Table 

S09–2 follows: 

TABLE S09–2.—LIGHT-DUTY DIURNAL PLUS HOT SOAK EVAPORATIVE EMISSION STANDARDS: NON-GASOLINE PORTION

OF MULTI-FUELED VEHICLES

[grams per test] 

Vehicle category 

3 day 

diurnal+hot 

soak 

Supplemental 

2 day 

diurnal+hot 

soak 

LDVs ........................................................................................................................................................................ 0.50 0.65 

LLDTs ...................................................................................................................................................................... 0.65 0.85 

HLDTs ...................................................................................................................................................................... 0.90 1.15 

MDPVs ..................................................................................................................................................................... 1.00 1.25 

(iii) For multi-fueled vehicles 

operating on non-gasoline fuel, 

manufacturers must comply with the 

phase-in requirements in Table S09–3 of 

this paragraph for the evaporative 

emission requirements specified in 

Table S09–2 of this section. Phase-in 

schedules are grouped together for LDV/ 

LLDTs and HLDT/MDPVs. These 

requirements specify the minimum 

percentage of the manufacturer’s LDV/ 

LLDT/HLDT/MDPV 50-State sales, by 

model year, that must meet the 

requirements for their full useful lives. 

Table S09–3 follows: 

TABLE S09–3.—PHASE-IN PERCENTAGES FOR LIGHT-DUTY DIURNAL

PLUS HOT SOAK EVAPORATIVE

EMISSION STANDARDS: NON-GASOLINE PORTION OF MULTI-FUELED VEHICLES

Model year 

Percentage of 

vehicles that 

must meet evaporative emission 

requirements 

2012 .................................. 30 

2013 .................................. 60 

2014 and subsequent ....... 100 

(2) through (6) [Reserved]. For 

guidance see § 86.1811–04. 

(7) In cases where vehicles are 

certified to evaporative emission 

standards in Tables S09–1 and S09–2 of 

this section, the Administrator may 

accept evaporative emissions data for 

low altitude testing in accordance with 

California test conditions and test 

procedures (in lieu of the evaporative 

emission test condition and test 

procedure requirements of subpart B of 

this part). 

(f) through (s) [Reserved]. For 

guidance see § 86.1811–04. 

(t) Evaporative emission in-use 

standards. (1) For LDVs and LLDTs 

certified prior to the 2012 model year, 

the Tier 2 LDV/LLDT evaporative 

emissions standards in Table S04–3 of 

§ 86.1811–04(e) shall apply to in-use 

vehicles for only the first three model 

years after an evaporative family is first 

certified to the LDV/LLDT evaporative 

emission standards in Table S09–1 of 

paragraph (e) of this section, as shown 

in Table S09–4. For example, 

evaporative families first certified to the 

LDV/LLDT standards in Table S09–1 in 

the 2011 model year must meet the Tier 


pwalker on PROD1PC71 with RULES_2
8564 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

2 LDV/LLDT evaporative emission 

standards (Table S04–3) in-use for 2011, 

2012, and 2013 model year vehicles 

(applying Tier 2 standards in-use is 

limited to the first three years after 

introduction of a vehicle). 

(2) For HLDTs and MDPVs certified 

prior to the 2013 model year, the Tier 

2 HLDT/MDPV evaporative emissions 

standards in Table S04–3 of § 86.1811–

04(e) shall apply to in-use vehicles for 

only the first three model years after an 

evaporative family is first certified to 

the HLDT/MDPV evaporative emission 

standards in Table S09–1 of paragraph 

(e) of this section, as shown in Table 

S09–5. For example, evaporative 

families first certified to the HLDT/ 

MDPV standards in Table S09–1 in the 

2012 model year must meet the Tier 2 

HLDT/MDPV evaporative emission 

standards (Table S04–3) in-use for 2012, 

2013, and 2014 model year vehicles 

(applying Tier 2 standards in-use is 

limited to the first three years after 

introduction of a vehicle). 

TABLE S09–4.—SCHEDULE FOR INUSE LDV/LLDT DIURNAL PLUS HOT

SOAK EVAPORATIVE EMISSION

STANDARDS

Model Year of Introduction 2009 2010 2011 

Models Years That 

Tier 2 Standards 

Apply to In-use 

Vehicles ............... 2009 2010 2011 

2010 2011 2012 

2011 2012 2013 

TABLE S09–5—SCHEDULE FOR INUSE HLDT/MDPV DIURNAL PLUS

HOT SOAK EVAPORATIVE EMISSION

STANDARDS

Model Year of Introduction 2010 2010 2011 2012 

Models Years That 

Tier 2 Standards 

Apply to In-use 

Vehicles ............... 2010 2011 2012 

2011 2012 2013 

2012 2013 2014 

■ 20. A new § 86.1811–10 is added to 

Subpart S to read as follows: 

§ 86.1811–10 Emission standards for lightduty vehicles, light-duty trucks and 

medium-duty passenger vehicles. 

Section 86.1811–10 includes text that 

specifies requirements that differ from 

§ 86.1811–04 and § 86.1811–09. Where a 

paragraph in § 86.1811–04 or § 86.1811–

09 is identical and applicable to 

§ 86.1811–10, this may be indicated by 

specifying the corresponding paragraph 

and the statement ‘‘[Reserved]. For 

guidance see § 86.1811–04’’ or 

‘‘[Reserved]. For guidance see 

§ 86.1811–09.’’ Where a corresponding 

paragraph of § 86.1811–04 or § 86.1811–

09 is not applicable, this is indicated by 

the statement ‘‘[Reserved].’’

(a) [Reserved]. For guidance see 

§ 86.1811–09. 

(b) through (d) [Reserved]. For 

guidance see § 86.1811–04. 

(e) [Reserved]. For guidance see 

§ 86.1811–09. 

(f) [Reserved]. For guidance see 

§ 86.1811–04. 

(g) Cold temperature exhaust 

emission standards. (1) Cold 

temperature CO standards. These cold 

temperature CO standards are 

applicable only to gasoline fueled LDV/ 

Ts and MDPVs. Cold temperature CO 

exhaust emission standards apply over 

a useful life of 50,000 miles or 5 years 

(whichever occurs first) as follows: 

(i) For LDVs and LDT1s, the standard 

is 10.0 grams per mile CO. 

(ii) For LDT2s, LDT3s and LDT4s, and 

MDPVs, the standard is 12.5 grams per 

mile CO. 

(iii) These standards do not apply to 

interim non-Tier 2 MDPVs. 

(2) Cold temperature NMHC 

standards. Full useful life fleet average 

cold temperature NMHC standards are 

applicable only to gasoline fueled LDV/ 

LLDTs and HLDT/MDPVs, and apply 

equally to certification and in-use 

except as otherwise specified in 

paragraph (u) of this section for in-use 

standards for applicable phase-in 

models. Testing with other fuels such as 

E85, or testing on diesel vehicles, is not 

required. Multi-fuel, bi-fuel or dual-fuel 

vehicles must comply with 

requirements using gasoline only. For 

LDV/LLDTs, the useful life is 120,000 

miles or 10 years, whichever comes 

first. For HLDT/MDPVs, the useful life 

is 120,000 miles or 11 years, whichever 

comes first. There is not an intermediate 

useful life standard for cold temperature 

NMHC standards. 

(i) The standards are shown in the 

following table: 

TABLE S10–1—FLEET AVERAGE COLD TEMPERATURE NMHC FULL USEFUL LIFE EXHAUST EMISSION STANDARDS

Vehicle weight category 

Cold temperature 

NMHC salesweighted fleet 

average standard 

(grams/mile) 

LDVs & LLDTs (≤6,000 lbs GVWR) ................................................................................................................................................ 0.3 

HLDTs (>6,000–8,500 lbs GVWR) & MDPVs (>8,500–10,000 lbs GVWR) ................................................................................... 0.5 

(ii) The manufacturer must calculate 

its fleet average cold temperature NMHC 

emission level(s) as described in 

§ 86.1864–10(m). 

(iii) During a phase-in year, the 

manufacturer must comply with the 

fleet average standards for the required 

phase-in percentage for that year as 

specified in paragraph (g)(3) of this 

section, or for the alternate phase-in 

percentage as permitted under 

paragraph (g)(4) of this section. 

(iv) For model years prior to 2010 

(LDV/LLDTs) and 2012 (HLDT/MDPVs), 

where the manufacturer desires to bank 

early NMHC credits as permitted under 

§ 86.1864–10(o)(5), the manufacturer 

must achieve a fleet average standard 

below the applicable standard. 

Manufacturers must determine 

compliance with the cold temperature 

NMHC fleet average standard according 

to § 86.1864–10(o). 

(3) Phase-in of the cold temperature 

NMHC standards. Except as permitted 

in § 86.1811–04(k)(5)(vi) and (vii) 

regarding small volume manufacturers, 

manufacturers must comply with the 

phase-in requirements in Tables S10–2 

and S10–3. Separate phase-in schedules 

are provided for LDV/LLDTs and for 

HLDT/MDPVs. These requirements 

specify the minimum percentage of the 

manufacturer’s LDV/LLDT and HLDT/ 

MDPV 50-State sales, by model year, 

that must meet the fleet average cold 

temperature NMHC standard for their 

full useful lives. LDVs and LLDTs must 

be grouped together to determine 

compliance with these phase-in 

requirements, and HLDTs and MDPVs 

must also be grouped together to 

determine compliance with these phasein requirements. Tables S10–2 and S10–

3 follow: 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8565 

TABLE S10–2—PHASE-IN PERCENTAGES FOR LDV/LLDT COLD TEMPERATURE NMHC REQUIREMENTS

Model year 

Percentage of 

LDV/LLDTs 

that must meet 

requirement 

2010 ...................................... 25 

2011 ...................................... 50 

2012 ...................................... 75 

2013 and subsequent ........... 100 

TABLE S10–3—PHASE-IN PERCENTAGES FOR HLDT/MDPV COLD TEMPERATURE NMHC REQUIREMENTS

Model year 

Percentage of 

HLDT/MDPVs 

that must meet 

requirement 

2012 ...................................... 25 

2013 ...................................... 50 

2014 ...................................... 75 

2015 and subsequent ........... 100 

(4) Alternate phase-in schedules for 

cold temperature NMHC standards. (i) 

Manufacturers may apply for alternate 

phase-in schedules that would still 

result in 100% phase-in by 2013 and 

2015, respectively, for LDV/LLDTs and 

HLDT/MDPVs. An alternate phase-in 

schedule submitted by a manufacturer is 

subject to EPA approval. The alternate 

phase-in will not be used to delay full 

implementation past the last year of the 

primary phase-in schedule (2013 for 

LDV/LLDTs, 2015 for HLDT/MDPVs). 

An alternate phase-in schedule will be 

acceptable if it satisfies the following 

conditions (where API = Anticipated 

Phase-In percentage for the referenced 

model year): 

LDV/LLDTs: 

(6×API2008) + (5×API2009) + (4×API2010) + 

(3×API2011) + (2×API2012) + 

(1×API2013) ≥ 500%, and (6×API2008) 

+ (5×API2009) + (4×API2010) ≥ 100% 

HLDT/MDPVs: 

(6×API2010) + (5×API2011) + (4×API2012) + 

(3×API2013) + (2×API2014) + 

(1×API2015) ≥ 500%, and (6×API2010) 

+ (5×API2011) + (4×API2012) ≥ 100%, 

or 

(6×API2010) + (5×API2011) + (4×API2012) + 

(3×API2013) + (2×API2014) + 

(1×API2015) ≥ 600% 

(ii)(A) For LDV/LLDTs, if the sum of 

products in paragraph (g)(4)(i) of this 

section is greater than or equal to 500%, 

which is the sum of products from the 

primary phase-in schedule (4×25% + 

3×50% + 2×75% + 1×100% = 500%), 

then the alternate phase-in schedule is 

acceptable, except as prohibited in 

paragraphs (g)(4)(i) and (iii) of this 

section. In addition, manufacturers 

electing to use an alternate phase-in 

schedule for compliance with the cold 

temperature NMHC exhaust emission 

standards must ensure that the sum of 

products is at least 100% for model 

years 2010 and earlier for LDV/LLDTs. 

For example, a phase-in schedule for 

LDV/LLDTs of 5/10/10/45/80/100 that 

begins in 2008 would calculate as 

(6×5%) + (5×10%) + (4×10%) = 120% 

and would be acceptable for 2008–2010. 

The full phase-in would calculate as 

(6×5%) + (5×10%) + (4×10%) + (3×45%) 

+ (2×80%) + (1×100%) = 515% and 

would be acceptable for 2008–2013. 

(B) For HLDT/MDPVs, if the sum of 

products in paragraph (g)(4)(i) of this 

section is greater than or equal to 500%, 

which is the sum of products from the 

primary phase-in schedule (4×25% + 

3×50% + 2×75% + 1×100% = 500%), 

then the alternate phase-in schedule is 

acceptable, except as prohibited in 

paragraphs (g)(4)(i) and (iii) of this 

section. In addition, manufacturers 

electing to use an alternate phase-in 

schedule for compliance with the cold 

temperature NMHC exhaust emission 

standards must ensure that the sum of 

products is at least 100% for model 

years 2012 and earlier for HLDT/ 

MDPVs. Alternately, if the sum of 

products is greater than or equal to 

600%, then the alternate phase-in 

schedule is acceptable, except as 

prohibited in paragraphs (g)(4)(i) and 

(iii) of this section. If the sum of 

products is greater than or equal to 

600%, then there are no requirements 

on the sum of products for model years 

2012 and earlier. 

(iii) Under an alternate phase-in 

schedule, the projected phase-in 

percentage is not binding for a given 

model year, provided the sums of the 

actual phase-in percentages that occur 

meet the appropriate total sums as 

required in the equations of paragraph 

(g)(4)(i) of this section, and provided 

that 100% actual compliance is reached 

for the appropriate model year, either 

2013 for LDV/LLDTs or 2015 for HLDT/ 

MDPVs. 

(5) Manufacturers must determine 

compliance with required phase-in 

schedules as follows: 

(i) Manufacturers must submit 

information showing compliance with 

all phase-in requirements of this section 

with their Part I applications as required 

by § 86.1844(d)(13). 

(ii) A manufacturer electing to use any 

alternate phase-in schedule permitted 

under this section must provide in its 

Application for Certification for the first 

year in which it intends to use such a 

schedule, and in each succeeding year 

during the phase-in, the intended phasein percentages for that model year and 

the remaining phase-in years along with 

the intended final sum of those 

percentages as described in paragraph 

(g)(4)(i) of this section. This information 

may be included with the information 

required under § 86.1844–01(d)(13). In 

its year end annual reports, as required 

under § 86.1844–01(e)(4), the 

manufacturer must include sufficient 

information so that the Administrator 

can verify compliance with the alternate 

phase-in schedule established under 

paragraph (g)(4)(i) of this section. 

(6)(i) Sales percentages for the 

purpose of determining compliance 

with the phase-in of the cold 

temperature NMHC requirements must 

be based upon projected 50-State sales 

of LDV/LLDTs and HLDT/MDPVs of the 

applicable model year by the 

manufacturer to the point of first sale. 

Such sales percentages must be rounded 

to the nearest 0.1 percent. 

(ii) Alternatively, the manufacturer 

may petition the Administrator to allow 

actual volume produced for U.S. sales to 

be used in lieu of projected U.S. sales 

for purposes of determining compliance 

with the phase-in percentage 

requirements under this section. The 

manufacturer must submit its petition 

within 30 days of the end of the model 

year. For EPA to approve the use of 

actual volume produced for U.S. sales, 

the manufacturer must establish to the 

satisfaction of the Administrator, that 

actual production volume is 

functionally equivalent to actual sales 

volume of LDV/LLDTs and HLDT/ 

MDPVs sold in all 50 U.S. States. 

(h) through (s) [Reserved]. For 

guidance see § 86.1811–04. 

(t) [Reserved]. For guidance see 

§ 86.1811–09. 

(u) Cold temperature NMHC exhaust 

emission in-use standards for applicable 

phase-in models. An interim full useful 

life in-use compliance standard is 

calculated by adding 0.1 g/mi to the FEL 

to which each test group is newly 

certified, and applies to that test group 

only for the model years shown in 

Tables S10–4 and S10–5. Otherwise, the 

in-use standard is the certification 

standard from paragraph (g)(2) of this 

section. The standards apply for 

purposes of in-use testing only and does 

not apply to certification or Selective 

Enforcement Auditing. Tables S10–4 

and S10–5 follow: 


pwalker on PROD1PC71 with RULES_2
8566 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

TABLE S10–4.—IN-USE STANDARDS FOR APPLICABLE PHASE-IN LDV/LLDTS

Model Year of Introduction 2008 2009 2010 2011 2012 2013 

Models years that the interim in-use standard is available ......................................................... 2008 2009 2010 2011 2012 2013 

2009 2010 2011 2012 2013 2014 

2010 2011 2012 2013 2014 

2011 2012 2013 

TABLE S10–5.—IN-USE STANDARDS FOR APPLICABLE PHASE-IN HLDT/MDPVS

Model Year of Introduction 2010 2011 2012 2013 2014 2015 

Models years that the interim in-use standard is available ......................................................... 2010 2011 2012 2013 2014 2015 

2011 2012 2013 2014 2015 2016 

2012 2013 2014 2015 2016 

2013 2014 2015 

■ 21. Section 86.1823–01 is amended by 

revising paragraph (a)(3)(i)(C) to read as 

follows: 

§ 86.1823–01 Durability demonstration 

procedures for exhaust emissions. 

* * * * * 

(a) * * * 

(3) * * * 

(i) * * * 

(C) The DF calculated by these 

procedures will be used for determining 

compliance with FTP exhaust emission 

standards, SFTP exhaust emission 

standards, cold temperature NMHC 

emission standards, and cold 

temperature CO emission standards. At 

the manufacturer’s option and using 

procedures approved by the 

Administrator, a separate DF may be 

calculated exclusively using cold 

temperature CO test data to determine 

compliance with cold temperature CO 

emission standards. Similarly, at the 

manufacturer’s option and using 

procedures approved by the 

Administrator, a separate DF may be 

calculated exclusively using cold 

temperature NMHC test data to 

determine compliance with cold 

temperature NMHC emission standards. 

For determining compliance with full 

useful life cold temperature NMHC 

emission standards, the 68–86 °F 

120,000 mile full useful life NMOG DF 

may be used. Also at the manufacturer’s 

option and using procedures approved 

by the Administrator, a separate DF may 

be calculated exclusively using US06 

and/or air conditioning (SC03) test data 

to determine compliance with the SFTP 

emission standards. 

* * * * * 

■ 22. Section 86.1827–01 is amended by 

revising paragraph (a)(5) to read as 

follows: 

§ 86.1827–01 Test group determination. 

* * * * * 

(a) * * * 

(5) Subject to the same emission 

standards (or FEL in the case of cold 

temperature NMHC standards), except 

that a manufacturer may request to 

group vehicles into the same test group 

as vehicles subject to more stringent 

standards, so long as all the vehicles 

within the test group are certified to the 

most stringent standards applicable to 

any vehicle within that test group. 

Light-duty trucks subject to the same 

emission standards as light-duty 

vehicles, with the exception of the lightduty truck idle CO standard and/or total 

HC standard, may be included in the 

same test group. 

* * * * * 

■ 23. A new § 86.1828–10 is added to 

Subpart S to read as follows: 

§ 86.1828–10 Emission data vehicle 

selection. 

Section 86.1828–10 includes text that 

specifies requirements that differ from 

§ 86.1828–01. Where a paragraph in 

§ 86.1828–01 is identical and applicable 

to § 86.1828–10, this may be indicated 

by specifying the corresponding 

paragraph and the statement 

‘‘[Reserved]. For guidance see 

§ 86.1828–01.’’ Where a corresponding 

paragraph of § 86.1828–01 is not 

applicable, this is indicated by the 

statement ‘‘[Reserved].’’

(a) through (f) [Reserved]. For 

guidance see § 86.1828–01. 

(g) Cold temperature NMHC testing. 

For cold temperature NMHC exhaust 

emission compliance for each durability 

group, the manufacturer must select the 

vehicle expected to emit the highest 

NMHC emissions at 20 °F on candidate 

in-use vehicles from the test vehicles 

specified in § 86.1828–01(a). When the 

expected worst-case cold temperature 

NMHC vehicle is also the expected 

worst-case cold temperature CO vehicle 

as selected in paragraph (c) of this 

section, then cold testing is required 

only for that vehicle; otherwise, testing 

is required for both the worst-case cold 

temperature CO vehicle and the worstcase cold temperature NMHC vehicle. 

■ 24. Section 86.1829–01 is amended by 

revising paragraph (b)(3) to read as 

follows: 

§ 86.1829–01 Durability and emission 

testing requirements; waivers. 

* * * * * 

(b) * * * 

(3) Cold temperature CO and cold 

temperature NMHC Testing. The 

manufacturer must test one EDV in each 

durability group for cold temperature 

CO and cold temperature NMHC 

exhaust emission compliance in 

accordance with the test procedures in 

subpart C of this part or with alternative 

procedures approved in advance by the 

Administrator. The selection of which 

EDV and test group within the 

durability group will be tested for cold 

temperature CO and cold temperature 

NMHC compliance will be determined 

under the provisions of § 86.1828–10(c) 

and (g). 

* * * * * 

■ 25. Section 86.1844–01 is amended by 

revising paragraph (d)(11) to read as 

follows: 

§ 86.1844–01 Information requirements: 

application for certification and submittal of 

information upon request. 

* * * * * 

(d) * * * 

(11) A list of all auxiliary emission 

control devices (AECD) installed on any 

applicable vehicles, including a 

justification for each AECD, the 

parameters they sense and control, a 

detailed justification of each AECD 

which results in a reduction in 

effectiveness of the emission control 

system, and rationale for why the AECD 

is not a defeat device as defined under 

§§ 86.1809–01 and 86.1809–10. For any 

AECD uniquely used at high altitudes, 

EPA may request engineering emission 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8567 

data to quantify any emission impact 

and validity of the AECD. For any AECD 

uniquely used on multi-fuel vehicles 

when operated on fuels other than 

gasoline, EPA may request engineering 

emission data to quantify any emission 

impact and validity of the AECD. 

* * * * * 

■ 26. A new § 86.1848–10 is added to 

Subpart S to read as follows: 

§ 86.1848–10 Certification. 

Section 86.1848–10 includes text that 

specifies requirements that differ from 

§ 86.1848–01. Where a paragraph in 

§ 86.1848–01 is identical and applicable 

to § 86.1848–10, this may be indicated 

by specifying the corresponding 

paragraph and the statement 

‘‘[Reserved]. For guidance see 

§ 86.1848–01.’’ Where a corresponding 

paragraph of § 86.1848–01 is not 

applicable, this is indicated by the 

statement ‘‘[Reserved].’’

(a) through (b) [Reserved]. For 

guidance see § 86.1848–01. 

(c) The following conditions apply to 

all certificates: 

(1) The manufacturer must supply all 

required information according to the 

provisions of §§ 86.1843–01 and 

86.1844–01. 

(2) The manufacturer must comply 

with all certification and in-use 

emission standards contained in 

subparts S and H of this part both 

during and after model year production. 

(3) The manufacturer must comply 

with all implementation schedules sales 

percentages as required in § 86.1810 or 

elsewhere in this part. Failure to meet 

a required implementation schedule 

sales percentage will be considered to 

be a failure to satisfy a condition upon 

which the certificate was issued and any 

vehicles or trucks sold in violation of 

the implementation schedule are not to 

be covered by the certificate. 

(4) For incomplete light-duty trucks 

and incomplete heavy-duty vehicles, a 

certificate covers only those new motor 

vehicles that, when completed by 

having the primary load-carrying device 

or container attached, conform to the 

maximum curb weight and frontal area 

limitations described in the application 

for certification as required in 

§ 86.1844–01. 

(5) The manufacturer must meet the 

in-use testing and reporting 

requirements contained in §§ 86.1845–

01, 86.1846–01, and 86.1847–01, as 

applicable. Failure to meet the in-use 

testing or reporting requirements shall 

be considered a failure to satisfy a 

condition upon which the certificate 

was issued. A vehicle or truck is 

considered to be covered by the 

certificate only if the manufacturer 

fulfills this condition upon which the 

certificate was issued. 

(6) Vehicles are covered by a 

certificate of conformity only if they are 

in all material respects as described in 

the manufacturer’s application for 

certification (Part I and Part II). 

(7) For Tier 2 and interim non-Tier 2 

vehicles, all certificates of conformity 

issued are conditional upon compliance 

with all provisions of §§ 86.1811–04, 

86.1860–04, 86.1861–04 and 86.1862–04 

both during and after model year 

production. The manufacturer must bear 

the burden of establishing to the 

satisfaction of the Administrator that the 

terms and conditions upon which the 

certificate(s) was (were) issued were 

satisfied. For recall and warranty 

purposes, vehicles not covered by a 

certificate of conformity will continue to 

be held to the standards stated or 

referenced in the certificate that 

otherwise would have applied to the 

vehicles. 

(i) Failure to meet the fleet average 

NOX requirements of 0.07g/mi, 0.3 g/mi 

or 0.2 g/mi, as applicable, will be 

considered to be a failure to satisfy the 

terms and conditions upon which the 

certificate(s) was (were) issued and the 

vehicles sold in violation of the fleet 

average NOX standard will not be 

covered by the certificate(s). 

(ii) Failure to comply fully with the 

prohibition against selling credits that it 

has not generated or that are not 

available, as specified in § 86.1861–04, 

will be considered to be a failure to 

satisfy the terms and conditions upon 

which the certificate(s) was (were) 

issued and the vehicles sold in violation 

of this prohibition will not be covered 

by the certificate(s). 

(iii) Failure to comply fully with the 

phase-in requirements of § 86.1811–04, 

will be considered to be a failure to 

satisfy the terms and conditions upon 

which the certificate(s) was (were) 

issued and the vehicles sold which do 

not comply with Tier 2 or interim nonTier 2 requirements, up to the number 

needed to comply, will not be covered 

by the certificate(s). 

(8) For LDV/LLDTs and HLDT/ 

MDPVs, all certificates of conformity 

issued are conditional upon compliance 

with all provisions of §§ 86.1811–10 and 

86.1864–10 both during and after model 

year production. The manufacturer 

bears the burden of establishing to the 

satisfaction of the Administrator that the 

terms and conditions upon which the 

certificate(s) was (were) issued were 

satisfied. For recall and warranty 

purposes, vehicles not covered by a 

certificate of conformity will continue to 

be held to the standards stated or 

referenced in the certificate that 

otherwise would have applied to the 

vehicles. 

(i) Failure to meet the fleet average 

cold temperature NMHC requirements 

will be considered a failure to satisfy the 

terms and conditions upon which the 

certificate(s) was (were) issued and the 

vehicles sold in violation of the fleet 

average NMHC standard will not be 

covered by the certificate(s). 

(ii) Failure to comply fully with the 

prohibition against selling credits that 

are not generated or that are not 

available, as specified in § 86.1864–10, 

will be considered a failure to satisfy the 

terms and conditions upon which the 

certificate(s) was (were) issued and the 

vehicles sold in violation of this 

prohibition will not be covered by the 

certificate(s). 

(iii) Failure to comply fully with the 

phase-in requirements of § 86.1811–10 

will be considered a failure to satisfy the 

terms and conditions upon which the 

certificate(s) was (were) issued and the 

vehicles sold that do not comply with 

cold temperature NMHC requirements, 

up to the number needed to comply, 

will not be covered by the certificate(s). 

(d) through (i) [Reserved]. For 

guidance see § 86.1848–01. 

■ 27. A new § 86.1864–10 is added to 

Subpart S to read as follows: 

§ 86.1864–10 How to comply with the fleet 

average cold temperature NMHC standards. 

(a) Applicability. Cold temperature 

NMHC exhaust emission standards 

apply to the following vehicles, subject 

to the phase-in requirements in 

§ 86.1811–10(g)(3) and (4): 

(1) 2010 and later model year LDV/ 

LLDTs. 

(2) 2012 and later model year HLDT/ 

MDPVs. 

(3) Aftermarket conversion systems as 

defined in 40 CFR 85.502, including 

conversion of MDPVs. 

(4) Vehicles imported by ICIs as 

defined in 40 CFR 85.1502. 

(b) Useful life requirements. Full 

useful life requirements for cold 

temperature NMHC standards are 

defined in § 86.1805–04(g). There is not 

an intermediate useful life standard for 

cold temperature NMHC standards. 

(c) Altitude. Altitude requirements for 

cold temperature NMHC standards are 

provided in § 86.1810–09(f). 

(d) Small volume manufacturer 

certification procedures. Certification 

procedures for small volume 

manufacturers are provided in 

§ 86.1838–01. 

(e) Cold temperature NMHC 

standards. Fleet average cold 

temperature NMHC standards are 

provided in § 86.1811–10(g)(2). 


pwalker on PROD1PC71 with RULES_2
8568 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

(f) Phase-in. Phase-in of the cold 

temperature NMHC standards are 

provided in § 86.1811–10(g)(3) and (4). 

(g) Phase-in flexibilities for small 

volume manufacturers. Phase-in 

flexibilities for small volume 

manufacturer compliance with the cold 

temperature NMHC standards are 

provided in § 86.1811–04(k)(5). 

(h) Hardship provisions for small 

volume manufacturers. Hardship 

provisions for small volume 

manufacturers related to the cold 

temperature NMHC standards are 

provided in § 86.1811–04(q)(1). 

(i) In-use standards for applicable 

phase-in models. In-use cold 

temperature NMHC standards for 

applicable phase-in models are 

provided in § 86.1811–10(u). 

(j) Durability procedures and method 

of determining deterioration factors 

(DFs). The durability data vehicle 

selection procedures of § 86.1822–01 

and the durability demonstration 

procedures of § 86.1823–06 apply for 

cold temperature NMHC standards. For 

determining compliance with full useful 

life cold temperature NMHC emission 

standards, the 68–86 °F, 120,000 mile 

full useful life NMOG DF may be used. 

(k) Vehicle test procedure. (1) The test 

procedure for demonstrating 

compliance with cold temperature 

NMHC standards is contained in 

subpart C of this part. With prior EPA 

approval, alternative testing procedures 

may be used, as specified in § 86.106–

96(a), provided cold temperature NMHC 

emissions test results are equivalent or 

superior. 

(2) Testing of all LDVs, LDTs and 

MDPVs to determine compliance with 

cold temperature NMHC exhaust 

emission standards set forth in this 

section must be on a loaded vehicle 

weight (LVW) basis, as defined in 

§ 86.1803–01. 

(3) Testing for the purpose of 

providing certification data is required 

only at low altitude conditions and only 

for vehicles that can operate on 

gasoline, except as requested in 

§§ 86.1810–09(f) and 86.1844–01(d)(11). 

If hardware and software emission 

control strategies used during low 

altitude condition testing are not used 

similarly across all altitudes for in-use 

operation, the manufacturer must 

include a statement in the application 

for certification, in accordance with 

§§ 86.1844–01(d)(11) and 86.1810–09(f), 

stating what the different strategies are 

and why they are used. If hardware and 

software emission control strategies 

used during testing with gasoline are 

not used similarly with all fuels that can 

be used in multi-fuel vehicles, the 

manufacturer will include a statement 

in the application for certification, in 

accordance with §§ 86.1844–01(d)(11) 

and 86.1810–09(f), stating what the 

different strategies are and why they are 

used. For example, unless a 

manufacturer states otherwise, air 

pumps used to control emissions on 

dedicated gasoline vehicles or multifuel vehicles during low altitude 

conditions must also be used to control 

emissions at high altitude conditions, 

and software used to control emissions 

or closed loop operation must also 

operate similarly at low and high 

altitude conditions and similarly when 

multi-fueled vehicles are operated on 

gasoline and alternate fuels. These 

examples are for illustrative purposes 

only; similar strategies would apply to 

other currently used emission control 

technologies and/or emerging or future 

technologies. 

(l) Emission data vehicle (EDV) 

selection. Provisions for selecting the 

appropriate EDV for the cold 

temperature NMHC standards are 

provided in §§ 86.1828–10(g) and 

86.1829–01(b)(3). 

(m) Calculating the fleet average cold 

temperature NMHC standard. 

Manufacturers must compute separate 

sales-weighted fleet average cold 

temperature NMHC emissions at the end 

of the model year for LDV/LLDTs and 

HLDT/MDPVs, using actual sales, and 

certifying test groups to FELs, as defined 

in § 86.1803–01. The FEL becomes the 

standard for each test group, and every 

test group can have a different FEL. The 

certification resolution for the FEL will 

be 0.1 grams/mile. LDVs and LLDTs 

must be grouped together when 

calculating the fleet average, and HLDTs 

and MDPVs must also be grouped 

together to determine the fleet average. 

Manufacturers must compute the salesweighted cold temperature NMHC fleet 

averages using the following equation, 

rounded to the nearest 0.1 grams/mile: 

Fleet average cold temperature NMHC 

exhaust emissions (grams/mile) = 

S(N × FEL) ÷ Total number of 

vehicles sold of the applicable 

weight category (i.e., either LDV + 

LLDTs, or HLDT + MDPVs) 

Where: 

N = The number of LDVs and LLDTs, or 

HLDTs and MDPVs, sold within the 

applicable FEL, based on vehicles 

counted to the point of first sale. 

FEL = Family Emission Limit (grams/mile). 

(n) Certification compliance and 

enforcement requirements for cold 

temperature NMHC standards. (1) 

Compliance and enforcement 

requirements are provided in § 86.1864–

10 and § 86.1848–10(c)(8). 

(2) The certificate issued for each test 

group requires all vehicles within that 

test group to meet the emission standard 

or FEL to which the vehicles were 

certified. 

(3) Each manufacturer must comply 

with the applicable cold temperature 

NMHC fleet average standard on a salesweighted average basis, at the end of 

each model year, using the procedure 

described in paragraph (m) of this 

section. 

(4) During a phase-in year, the 

manufacturer must comply with the 

applicable cold temperature NMHC fleet 

average standard for the required phasein percentage for that year as specified 

in § 86.1811–10(g)(3) or (4). 

(5) Manufacturers must compute 

separate cold temperature NMHC fleet 

averages for LDV/LLDTs and HLDT/ 

MDPVs. The sales-weighted cold 

temperature NMHC fleet averages must 

be compared with the applicable fleet 

average standard. 

(6) Each manufacturer must comply 

on an annual basis with the fleet average 

standards as follows: 

(i) Manufacturers must report in their 

annual reports to the Agency that they 

met the relevant corporate average 

standard by showing that their salesweighted average cold temperature 

NMHC emissions of LDV/LLDTs and 

HLDT/MDPVs, as applicable, are at or 

below the applicable fleet average 

standard; 

(ii) If the sales-weighted average is 

above the applicable fleet average 

standard, manufacturers must obtain 

and apply sufficient NMHC credits as 

permitted under paragraph (o)(8) of this 

section. A manufacturer must show via 

the use of credits that they have offset 

any exceedence of the corporate average 

standard. Manufacturers must also 

include their credit balances or deficits. 

(iii) If a manufacturer fails to meet the 

corporate average cold temperature 

NMHC standard for two consecutive 

years, the vehicles causing the corporate 

average exceedence will be considered 

not covered by the certificate of 

conformity (see paragraph (o)(8) of this 

section). A manufacturer will be subject 

to penalties on an individual-vehicle 

basis for sale of vehicles not covered by 

a certificate. 

(iv) EPA will review each 

manufacturer’s sales to designate the 

vehicles that caused the exceedence of 

the corporate average standard. EPA 

will designate as nonconforming those 

vehicles in test groups with the highest 

certification emission values first, 

continuing until reaching a number of 

vehicles equal to the calculated number 

of noncomplying vehicles as determined 

above. In a group where only a portion 

of vehicles would be deemed 

nonconforming, EPA will determine the 


pwalker on PROD1PC71 with RULES_2
Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 8569 

actual nonconforming vehicles by 

counting backwards from the last 

vehicle produced in that test group. 

Manufacturers will be liable for 

penalties for each vehicle sold that is 

not covered by a certificate. 

(o) Requirements for the cold 

temperature NMHC averaging, banking 

and trading (ABT) program. (1) 

Manufacturers must average the cold 

temperature NMHC emissions of their 

vehicles and comply with the cold 

temperature NMHC fleet average 

corporate standard. Manufacturers may 

generate credits during and after the 

phase-in period. Manufacturers may 

generate credits prior to the phase-in 

periods as described in paragraph (o)(5) 

of this section. A manufacturer whose 

cold temperature NMHC fleet average 

emissions exceed the applicable 

standard must complete the calculation 

in paragraph (o)(4) of this section to 

determine the size of its NMHC credit 

deficit. A manufacturer whose cold 

temperature NMHC fleet average 

emissions are less than the applicable 

standard must complete the calculation 

in paragraph (o)(4) of this section to 

generate NMHC credits. 

(2) There are no property rights 

associated with NMHC credits generated 

under this subpart. Credits are a limited 

authorization to emit the designated 

amount of emissions. Nothing in this 

part or any other provision of law 

should be construed to limit EPA’s 

authority to terminate or limit this 

authorization through a rulemaking. 

(3) Each manufacturer must comply 

with the reporting and recordkeeping 

requirements of paragraph (p) of this 

section for NMHC credits, including 

early credits. The averaging, banking 

and trading program is enforceable 

through the certificate of conformity 

that allows the manufacturer to 

introduce any regulated vehicles into 

commerce. 

(4) Credits are earned on the last day 

of the model year. Manufacturers must 

calculate, for a given model year, the 

number of credits or debits it has 

generated according to the following 

equation, rounded to the nearest 0.1 

grams/mile: 

NMHC Credits or Debits = (Cold 

Temperature NMHC Standard—

Manufacturer’s Sales-Weighted 

Fleet Average Cold Temperature 

NMHC Emissions) × (Total Number 

of Vehicles Sold) 

Where: 

Cold Temperature NMHC Standard = 0.3 

grams/mile for LDV/LLDTs or 0.5 grams/ 

mile for HLDT/MDPV, per § 86.1811–

10(g)(2). 

Manufacturer’s Sales-Weighted Fleet Average 

Cold Temperature NMHC Emissions = 

average calculated according to 

paragraph (m) of this section. 

Total Number of Vehicles Sold = Total 50- 

State sales based on the point of first 

sale. 

(5) The following provisions apply for 

early banking: 

(i) Manufacturers may certify LDV/ 

LLDTs to the cold temperature NMHC 

exhaust standards in § 86.1811–10(g)(2) 

for model years 2008–2009 to bank 

credits for use in the 2010 and later 

model years. Manufacturers may certify 

HLDT/MDPVs to the cold temperature 

NMHC exhaust standards in § 86.1811–

10(g)(2) for model years 2010–2011 to 

bank credits for use in the 2012 and 

later model years. 

(ii) This process is referred to as 

‘‘early banking’’ and the resultant 

credits are referred to as ‘‘early credits.’’

To bank early credits, a manufacturer 

must comply with all exhaust emission 

standards and requirements applicable 

to LDV/LLDTs and/or HLDT/MDPVs. To 

generate early credits, a manufacturer 

must separately compute the salesweighted cold temperature NMHC 

average of the LDV/LLDTs and HLDT/ 

MDPVs it certifies to the exhaust 

requirements and separately compute 

credits using the calculations in 

paragraph (o)(4) of this section. Early 

HLDT/MDPV credits may not be applied 

to LDV/LLDTs before the 2010 model 

year. Early LDV/LLDT credits may not 

be applied to HLDT/ MDPV before the 

2012 model year. 

(6) NMHC credits are not subject to 

any discount or expiration date except 

as required under the deficit 

carryforward provisions of paragraph 

(o)(8) of this section. There is no 

discounting of unused credits. NMHC 

credits have unlimited lives, subject to 

the limitations of paragraph (o)(2) of this 

section. 

(7) Credits may be used as follows: 

(i) Credits generated and calculated 

according to the method in paragraph 

(o)(4) of this section may be used only 

to offset deficits accrued with respect to 

the standard in § 86.1811–10(g)(2). 

Credits may be banked and used in a 

future model year in which a 

manufacturer’s average cold 

temperature NMHC level exceeds the 

applicable standard. Credits may be 

exchanged between the LDT/LLDT and 

HLDT/MDPV fleets of a given 

manufacturer. Credits may also be 

traded to another manufacturer 

according to the provisions in paragraph 

(o)(9) of this section. Before trading or 

carrying over credits to the next model 

year, a manufacturer must apply 

available credits to offset any credit 

deficit, where the deadline to offset that 

credit deficit has not yet passed. 

(ii) The use of credits shall not be 

permitted to address Selective 

Enforcement Auditing or in-use testing 

failures. The enforcement of the 

averaging standard occurs through the 

vehicle’s certificate of conformity. A 

manufacturer’s certificate of conformity 

is conditioned upon compliance with 

the averaging provisions. The certificate 

will be void ab initio if a manufacturer 

fails to meet the corporate average 

standard and does not obtain 

appropriate credits to cover its shortfalls 

in that model year or in the subsequent 

model year (see deficit carryforward 

provision in paragraph (o)(8) of this 

section). Manufacturers must track their 

certification levels and sales unless they 

produce only vehicles certified to cold 

temperature NMHC levels below the 

standard and do not plan to bank 

credits. 

(8) The following provisions apply if 

debits are accrued: 

(i) If a manufacturer calculates that it 

has negative credits (also called 

‘‘debits’’ or a ‘‘credit deficit’’) for a given 

model year, it may carry that deficit 

forward into the next model year. Such 

a carry-forward may only occur after the 

manufacturer exhausts any supply of 

banked credits. At the end of that next 

model year, the deficit must be covered 

with an appropriate number of credits 

that the manufacturer generates or 

purchases. Any remaining deficit is 

subject to an enforcement action, as 

described in this paragraph (o)(8). 

Manufacturers are not permitted to have 

a credit deficit for two consecutive 

years. 

(ii) If debits are not offset within the 

specified time period, the number of 

vehicles not meeting the fleet average 

cold temperature NMHC standards (and 

therefore not covered by the certificate) 

must be calculated by dividing the total 

amount of debits for the model year by 

the fleet average cold temperature 

NMHC standard applicable for the 

model year in which the debits were 

first incurred. 

(iii) EPA will determine the number 

of vehicles for which the condition on 

the certificate was not satisfied by 

designating vehicles in those test groups 

with the highest certification cold 

temperature NMHC emission values 

first and continuing until reaching a 

number of vehicles equal to the 

calculated number of noncomplying 

vehicles as determined above. If this 

calculation determines that only a 

portion of vehicles in a test group 

contribute to the debit situation, then 

EPA will designate actual vehicles in 

that test group as not covered by the 

certificate, starting with the last vehicle 

produced and counting backwards. 


pwalker on PROD1PC71 with RULES_2
8570 Federal Register / Vol. 72, No. 37 / Monday, February 26, 2007 / Rules and Regulations 

(iv)(A) If a manufacturer ceases 

production of LDV/LLDTs and HLDT/ 

MDPVs, the manufacturer continues to 

be responsible for offsetting any debits 

outstanding within the required time 

period. Any failure to offset the debits 

will be considered a violation of 

paragraph (o)(8)(i) of this section and 

may subject the manufacturer to an 

enforcement action for sale of vehicles 

not covered by a certificate, pursuant to 

paragraphs (o)(8)(ii) and (iii) of this 

section. 

(B) If a manufacturer is purchased by, 

merges with, or otherwise combines 

with another manufacturer, the 

controlling entity is responsible for 

offsetting any debits outstanding within 

the required time period. Any failure to 

offset the debits will be considered a 

violation of paragraph (o)(8)(i) of this 

section and may subject the 

manufacturer to an enforcement action 

for sale of vehicles not covered by a 

certificate, pursuant to paragraphs 

(o)(8)(ii) and (iii) of this section. 

(v) For purposes of calculating the 

statute of limitations, a violation of the 

requirements of paragraph (o)(8)(i) of 

this section, a failure to satisfy the 

conditions upon which a certificate(s) 

was issued and hence a sale of vehicles 

not covered by the certificate, all occur 

upon the expiration of the deadline for 

offsetting debits specified in paragraph 

(o)(8)(i) of this section. 

(9) The following provisions apply to 

NMHC credit trading: 

(i) EPA may reject NMHC credit 

trades if the involved manufacturers fail 

to submit the credit trade notification in 

the annual report. A manufacturer may 

not sell credits that are not available for 

sale pursuant to the provisions in 

paragraphs (o)(7)(i) of this section. 

(ii) In the event of a negative credit 

balance resulting from a transaction that 

a manufacturer could not cover by the 

reporting deadline for the model year in 

which the trade occurred, both the 

buyer and seller are liable, except in 

cases involving fraud. EPA may void ab 

initio the certificates of conformity of all 

engine families participating in such a 

trade. 

(iii) A manufacturer may only trade 

credits that it has generated pursuant to 

paragraph (o)(4) of this section or 

acquired from another party. 

(p) Maintenance of records and 

submittal of information relevant to 

compliance with fleet average cold 

temperature NMHC standards. (1) 

Maintenance of records. (i) 

Manufacturers producing any light-duty 

vehicles, light-duty trucks, or mediumduty passenger vehicles subject to the 

provisions in this subpart must 

establish, maintain, and retain all the 

following information in adequately 

organized records for each model year: 

(A) Model year. 

(B) Applicable fleet average cold 

temperature NMHC standards. 

(C) Fleet average cold temperature 

NMHC value. 

(D) All values used in calculating the 

fleet average cold temperature NMHC 

value. 

(ii) Manufacturers producing any 

light-duty vehicles, light-duty trucks, or 

medium-duty passenger vehicles subject 

to the provisions in this subpart must 

establish, maintain, and retain all the 

following information in adequately 

organized records for each LDV/T or 

MDPV subject to this subpart: 

(A) Model year. 

(B) Applicable fleet average cold 

temperature NMHC standard. 

(C) EPA test group. 

(D) Assembly plant. 

(E) Vehicle identification number. 

(F) Cold temperature NMHC FEL to 

which the LDV, LDT, or MDPV is 

certified. 

(G) Information on the point of first 

sale, including the purchaser, city, and 

state. 

(iii) Manufacturers must retain all 

required records for a period of eight 

years from the due date for the annual 

report. Records may be stored in any 

format and on any media, as long as 

manufacturers can promptly send EPA 

organized, written records in English if 

we ask for them. Manufacturers must 

keep records readily available as EPA 

may review them at any time. 

(iv) The Administrator may require 

the manufacturer to retain additional 

records or submit information not 

specifically required by this section. 

(v) Pursuant to a request made by the 

Administrator, the manufacturer must 

submit to the Administrator the 

information that the manufacturer is 

required to retain. 

(vi) EPA may void ab initio a 

certificate of conformity for vehicles 

certified to emission standards as set 

forth or otherwise referenced in this 

subpart for which the manufacturer fails 

to retain the records required in this 

section or to provide such information 

to the Administrator upon request. 

(2) Reporting. (i) Each covered 

manufacturer must submit an annual 

report. The annual report must contain 

for each applicable cold temperature 

NMHC standard, the calculated fleet 

average cold temperature NMHC value, 

all values required to calculate the cold 

temperature NMHC emissions value, the 

number of credits generated or debits 

incurred, all the values required to 

calculate the credits or debits, the 

resulting balance of credits or debits, 

and sufficient information to show 

compliance with all phase-in or 

alternate phase-in requirements. 

(ii) For each applicable fleet average 

cold temperature NMHC standard, the 

annual report must also include 

documentation on all credit transactions 

the manufacturer has engaged in since 

those included in the last report. 

Information for each transaction must 

include all of the following: 

(A) Name of credit provider. 

(B) Name of credit recipient. 

(C) Date the trade occurred. 

(D) Quantity of credits traded. 

(E) Model year in which the credits 

were earned. 

(iii) Unless a manufacturer reports the 

data required by this section in the 

annual production report required 

under § 86.1844–01(e), a manufacturer 

must submit an annual report for each 

model year after production ends for all 

affected vehicles produced by the 

manufacturer subject to the provisions 

of this subpart and no later than May 1 

of the calendar year following the given 

model year. Annual reports must be 

submitted to: Director, Compliance and 

Innovative Strategies Division, U.S. 

Environmental Protection Agency, 2000 

Traverwood, Ann Arbor, Michigan 

48105. 

(iv) Failure by a manufacturer to 

submit the annual report in the 

specified time period for all vehicles 

subject to the provisions in this section 

is a violation of section 203(a)(1) of the 

Clean Air Act (42 U.S.C. 7522 (a)(1)) for 

each applicable vehicle produced by 

that manufacturer. 

(v) If EPA or the manufacturer 

determines that a reporting error 

occurred on an annual report previously 

submitted to EPA, the manufacturer’s 

credit or debit calculations will be 

recalculated. EPA may void erroneous 

credits, unless traded, and will adjust 

erroneous debits. In the case of traded 

erroneous credits, EPA must adjust the 

selling manufacturer’s credit balance to 

reflect the sale of such credits and any 

resulting credit deficit. 

(3) Notice of opportunity for hearing. 

Any revoking of the certificate under 

paragraph (p)(1)(vi) of this section will 

be made only after EPA has offered the 

affected manufacturer an opportunity 

for a hearing conducted in accordance 

with § 86.614–84 for light-duty vehicles 

or § 86.1014–84 for light-duty trucks 

and, if a manufacturer requests such a 

hearing, will be made only after an 

initial decision by the Presiding Officer. 

[FR Doc. E7–2667 Filed 2–23–07; 8:45 am] 

BILLING CODE 6560–50–P 


pwalker on PROD1PC71 with RULES_2