UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

NATIONAL VEHICLE AND FUEL EMISSIONS LABORATORY

2565 PLYMOUTH ROAD ANN ARBOR, MI 48105

- 2498

OFFICE OF
AIR AND RADIATION

Memorandum

Date: June 17 , 2013

From: Jeff Herzog, Assessment and Standards Divisions,

Office of Transportation and Air Quality

To: Docket # EPA

- HQ

- OAR

- 2011

- 0135

Subject: Meeting with the California Air Resources Board on June 4, 2013

On J une 4, 2013, staff f

rom the Office of Transportation and Air Quality (OTAQ) met with staff from the California Air Resources Board (CARB) to discuss a range of f uel related issues including the Renewable Fuels Standard (RFS) . The agenda for the meeting an d the presentation sl ides on the RFS are attached

.

The following people participated in person at CARB’s facility in Sacramento : CARB: Jim Aguila, Michael Benjamin, Adrian Cayabyen, Susie Chung,

Aubrey Gonzalez, Jim Guthrie, Jack Kitanski, Alexander Mit chel, Jim Peterson, Jose Saldana, Katrina Sideco, Manisha Singh, Floyd Vergara, and Mike Waugh

EPA : Paul Argyropoulos, and Paul Machiele

The following people participated by phone:
CARB: Oliver Chang, Judson Cohan, and Paul Rieger

EPA: Aron Butler, Jeff Herzog, Zoltan Jung, Joe Sopata, Tia Sutton, and

Lester Wyborny

Attachments: Meeting agenda, EPA presentation materials

### ARB/US EPA Fuels Meeting

T uesday June 4 , 2013 8:30 am

– 5:00 pm Pacific Time Conference Room 4 50, 1001 I St, Sacramento



### A GENDA

I. Introductions

II. Meeting overview

A. ARB

– Jim Peterson, Jim Aguila

B. Overview of issues re future fuels

– EPA: Paul Machiele

III. Overview of ARB and EPA fuels organization structure s

A. ARB

– Jim Peterson, Jim Aguila

B. EPA

– Paul Machiele

IV. RFS/LCFS

A. EPA RFS update

– Paul Machiele, Dave Korotney

1. Annual volumes rule

2. Blendwall

V. Gasoline

A. EPA Tier 3 gasoline sulfur rulemaking

– EPA: Paul Machiele

1. California experience moving industry to 10 ppm

– ARB : Adrian Cayabyab

B. EPA future fuel quality evaluations

– EPA: Paul Machiele

1. Aromatics

2. ARB evaluation of PM Index and fuel aromatics content

– ARB: Oliver Chang

VI. Fuel and Emission Measurement

A. ARB MLD board hearing update January 25, 2013

– ARB: Michael Benjamin, Paul Rieger, Jud Cohan

1. Gasoline

– Test method updates

2. Diesel

– Test method updates

3. Rulemaking documents located at http://www.arb.ca.gov/regact/2013/diesel2013/diesel2013.htm

B. EPA performance based fuel parameter test method approach

– EPA: Joe Sopata

C. Summary of March 4 ARB

- US EPA Fuels Team meeting

– ARB: Oliver Chang

1. Initiate routine ARB

– US EPA dialogue on emissions measurements

VII. Certification FuelA. ARB Certification fuels updated in LEV III March 22, 2012

– ARB: Adrian

Cayabyab , Manisha Singh , Paul Hughes

1. LEV III cert fuel

a. Ethanol substituted for MTBE

b. Other minor tweaks to octane, T50, T90, sulfur, RVP, arom atics, benzene,
and multi

- substituted alkyl aromatics

2. Flexible fuel vehicle evaporative emission cert fuel is now LEV III cert fuel, no longer a blend of E85 (per 13 CCR 2292.4) and LEV II cert fuel such that the final blend is 10 vol% ( ± 1.0 vol%) ethanol

– Jim P eterson , Jim A guila

B. EPA certification test fuel

– EPA: Paul Machiele, Jeff Herzog

1. E85 test fuel specifications

a. No longer 10 psi E10 for Evap

b. 6 RVP

– or higher?

2. N on

- R oad certification test fuel

3. Premium fuel and E30

4. Potential future GHG and FE correc tions

VIII. Diesel

A. ARB Diesel regulatory amendments scheduled for board hearing on September 26, 2013 (concurrent with biodiesel)

– ARB: Jim Guthrie, Manisha Singh

1. Sulfur content

– delete all references to obsolete 500 ppm sulfur standard

2. Aromatics content

– amend to accommodate and mitigate biodiesel blends up
to 20 vol%

3. Variances

– add new section on variances similar to section on variances in gasoline regulations

4. Restrictions on blending diesel fuel with other materials

IX. ARB Multimedia Assessment

A. Overview o f the MME process

– ARB: Aubrey Gonzalez, Jim Aguila

B. Multimedia Guidance document

C. Current and on

- going evaluations

1. Butamax

2. Renewable diesel/biodiesel

3. E85

4. DME

D. Future evaluations

1. CNG

X. Alternative FuelsA. EPA CNG and LPG fuel specifications

– EPA: Paul Machiele , Jeff Herzog

B. ARB Alternative diesel fuel rule regulation scheduled for September 26, 2013

– ARB: Lex Mitchell, Jim Aguila

1. Overview

– White Paper

2. Renewable diesel

3. Biodiesel

XI. E85 and Mid

- Level Blends

A. E85 and mid

- level ethanol:

1. ARB E85 r ulemaking scheduled for December 12, 2013

– ARB: Jim
P eterson , Jim A guila

a. Revise specifications inc. ethanol content, DVPE, sulfur

b. Permit natural gasoline hydrocarbon blendstock in addition to CaRFG3 or
CARBOB?

c. All specifications

– Test method updates

d. Upd ate to flexible fuel vehicle exhaust emission cert fuel which currently requires E85 (per 13 CCR 2292.4) in which the hydrocarbon blendstock is
LEV II cert fuel , and the DVPE is adjusted to 8.0

- 8.5 psi

2. Upcoming EPA actions re E85 and mid

- level ethanol

– EP A: Paul Machiele, Jeff Herzog

a. Specification for denatured fuel ethanol (DFE)

b. Potential E85 in

- use specifications

i. Sulfur, benzene, RVP, sub

- sim

ii. Natural gasoline (NGL or refiner blendstock) and butane as E85
blendstocks?

iii. Emissions testing?

c. Potential E16

- 50 in

- use specifications

i. Treat E16

- 50 as gasoline

ii. Treat E16

- E50 as E85

d. Downstream blending and compliance provisions

e. Fuel and fuel additives health effects testing

XII. Regulatory StreamliningA. Near Term

– EPA: Paul Machiele, Tia Sutton, Chris Brunner, & Jeff Herzog

1. Reduction in testing for complex model fuel

2. Downstream pentane blending

3. Alternative gasoline deposit control testing

4. Synchronize reporting deadlines

B. Longer term comprehensive overhaul of fuel regulations

– EPA: Paul Machiele, Tia Sutton, Chri s Brunner, Jeff Herzog

1. Revise fuel program to look like the program we would create from scratch today

2. Harmonize and unify fuel programs

3. Fit program to slate of slate of fuels in marketplace now and in the future

4. Improve data collection

5. Eliminate redundancies, contradictions, ambiguity, and obsolete provisions

6. Reduce burden on regulated parties and EPA

XIII. California Fuel Quality

A. US EPA access to California f uel quality data

– EPA: Paul Machiele , ARB: Adrian Cayabyab

XIV. FTC L abeling P rovisions for B iomass

- B ased D iesel

A. 60 CFR Part 306.5

– ARB: Lex Mitchell, Jim Aguila, Mike Waugh

# Renewable Fuels Standard

EPA briefing for the California Air Resources Board, June 4, 2013

# "Nested" Standards in the RFS

Program

Four items in red are the actual volume standards

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# RFS Annual Rulemakings

• The RFS2 program was finalized in 2010

• However, we are required to calculate and announce the applicable percentage standards by November 30 of each year for application to the following year

– Based on projections of gasoline and diesel consumption from EIA

– % standard = renewable fuel volume / (gasoline + diesel volume)



# • We did not meet the November 30 deadline for the 2013 standards

– Actually proposed on February 7, 2013



# – Currently drafting the final rule at the same time we are developing the proposal for the 2014 standards



# • While the renewable fuel volumes are provided in the statute, there are a number of conditions under which EPA can modify those volumes

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# Modifying Volumes in Annual

Rulemakings

• Biomass

- based diesel

– The statute only specifies volumes through 2012

– EPA must consider a number of specified factors in determining the volumes for 2013+, but it can be no lower than 1.0 bill gal

– In September 2012 we finalized a volume of 1.28 bill gal for 2013

– We have not yet proposed a volume for 2014



# • Cellulosic biofuel

– We must project available volume and base the % standard on this volume

– For 2013 we have projected 14 mill gal, compared to CAA volume of 1.0 bill gal

– If we reduce cellulosic biofuel, we have the discretion to also reduce advanced biofuel and 

## total renewable fuel by up to the same amount

• To date we have not used this discretionary authority



# • General waiver authority

– Applies to any of the four standards

– Can be initiated by any regulated party, a State, or EPA



## – Requires a demonstration of severe harm to the economy or environment, or inadequate domestic supply

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# E10 Blendwall

• We will reach the E10 blendwall this year

• To meet the statutory volume requirements with physical volumes of ethanol without any reductions in the requirements, a significant volume
of E15

- E85 would need to be consumed

• However, there are also a significant number of carryover RINs from 2012 that can be used in lieu of physical volume

• On February 7, 2013 we proposed no reduction in the advanced biofuel or total renewable fuel volumes based on both sufficient availability and carryover RINs

– However, we took comment on a small (~200 mill gal) reduction in the advanced biofuel standard of 2.75 bill gal to address potential uncertainty in availability of i9mported sugarcane ethanol



# • We are in the process of developing the final rule for 2013



# • We are also discussing a framework for addressing the blendwall for

2014+

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