UNITED STATES

ENVIRONMENTAL

PROTECTION

AGENCY RESEARCH TRIANGLE

PARK, NC 27711

NOV 2 8 2007 OFFICE OFAIR QUALITY PLANNINGAND STANDARDS

MEMORANDUM
SUBJECT:
FROM:

TO: Removal

of StageII Vapor Re•ry•

r•_ •e•ling

of Corporate

Fleets Stephen D. Page, Directol•••,--• Office of Air Quality Plarfning

arid Standarff.s• MargoTsirigotisOge, Director

'•('P•;}'•-i

'•" • Office of Transportation

and Air Qual•'•j Regional Air Division

Directors

The purpose

of this memorandum

is to provide guidance

to States concerning

the removal of Stage II gasoline

vapor recovery

systems.at

gasoline

refueling

facilities exclusively dedicated

to refueling

"corporate"

or "commercial"

fleets, where States demonstrate to the Environmental

Protection

Agency

(EPA) that widespread

use of onboard refueling vapor recovery

(ORVR)

has occurred

in such fleets. Corporate

or commercial fleets include vehicles

owned by corporations,

governments,

universities

or other organizations .which use the vehicles

for business

purposes

and typically

fuel the vehicles

at fueling pumps owned and operated

by the fleet owner and exclusively

dedicated

to fueling the fleet.
On December

12, 2006, EPA issued a memorandum,

"Removal

of Stage II Vapor Recovery in Situations

Where Widespread

Use of Onboard

Refueling

Vapor Recovery

is Demonstrated," (attached)

which discussed

how States may explore amendments

to their State Implementation

Plans (SIPs) to allow Stage II gasoline

vapor recovery

to be removed from specific

fleet situations,

namely:
1. initial fueling of new vehicles

at automobile

assembly

plants; 2. refueling

of rental cars at rental car facilities;

and 3. refueling

of flexible fuel vehicles

at E85 dispensing

pumps.
The December

12, 2006, memo states that widespread

use of ORVR will likely have been demonstrated

if 95 percent of the vehicles

in a fleet have ORVR.

In today's memorandum, EPA is indicating

that it believes

that if a State demonstrates

that 95 percent of the vehicles

in a corporate

or commercial

vehicle fleet are equipped

with ORVR and that

Recycled/Recyclable Pflnted with Vegetable OII Based Jnks on 100% Recycled Paper (40% Postconsumer)this level of ORVR use would not decrease,

then widespread

use of ORVR could be found for the'corporate

or commercial

motor vehicle fleet, such that Stage II controls

could be considered for removal

from a refueling

facility that is exclusively

dedicated

to refueling

that fleet.
States desiring

to remove the Stage II requirement

for these facilities

would need to submit a SIP revision

that EPA would evaluate

through

notice and comment

rulemaking. The SIP would need to demonstrate

that the widespread

use benchmark

has been achieved and provide

assurance

that any facility wishing

to remove Stage II equipment

maintains

its eligibility for its motor vehicle fleet. Any EPA SIP approval

would also be subject to the Clean Air Act (CAA) section 110(1) requirement

that the revision

not interfere

with any applicable requirement

concerning

attainment

and reasonable

further progress,

or any other requirement of the CAA. In addition,

State and local agencies

should consider

if there are any transportation

conformity

impacts related to removing

Stage II, if emissions

reductions from Stage II are included

in a SIP's on-road motor vehicle emissions

budget(s).

As mentioned

in the December

12, 2006 memorandum,

this guidance

for widespread

use determinations

for corporate

fleets would not necessarily

apply to widespread

use determinations for the general motor vehicle fleet. Within the overall motor vehicle fleet, the rate of penetration

of ORVR-equipped

vehicles

has not advanced

at the same rapid rates as in some corporate

and rental fleets. EPA is still considering

the possible

criteria for determining widespread

use for the general fleet.

In addition,

the December

12, 2006, memorandum

explained

that widespread

use determinations would not affect separate

requirements

applicable

to States in the ozone transport region. This exclusion

would also apply in the case of corporate

or commercial fleets with.widespread

use of ORVR.
If you have questions

about this recommendation,,

you may contact William

L. Johnson in EPA's Office of Air Quality Planning

and Standards

by telephone

at (919) 541-5245

or by e-mail at johnson.williamL@epa.gov.
AttachmentUNITED STATES ENVIRONMENTAL

PROTECTION

AGENCY RESEARCH TRIANGLE PARK, NC 27711DEC 12 2006

MEMORANDUM
SUBY•CT:

FROM:

TO: Removal ofStagu II Vapor Recovery in Situations Where Widespread Use of Onboard Refueling Vapor Recovery is Demonstrated Stephen D. Page, Director Cg•;•--•J.,¢• Office of Air Quality Plan•'a•i

•t•nd•-ds

0 ice of Transportation

and Air Qua• Regional Air Division Director•

The purpose oftlds memorandum

is to provide guidance to States cOncerning the removal of Stagu II gasoline vapor recovery systems.where

Slates demonstrate

to EPA that widespread use ofonboard refueling vapor recovery (ORVR) has occurred in specific portions of the motor vehicle fleeL The specific fleets addressed here include:
1. initial fueling of new vehicles at automobile assembly plants 2. refueling of rental cars at rental car facilities 3. refueling of flexible fuel vehicles at E85 dispensing pumps Back2roundStage II vapor recovery systems are required to be used at gasoline dispensing facilities located in serious, severe, and extreme non-attainment

areas for ozone under section 182(0)(3) of the Clean Air Act (CAA). States have included these control measures in their federally-approved state implementation

plans (SIPs) in the form of generally applicable regulatory requirements

guveming all gasoline dispensing facilities that exceed the relevant gasoline dispensing throughput criteria. However, section 202(a)(6) of the CAA allows EPA to revise or waive the section 182(0)(3) Stage II requirement for these ozone non-attainment
areas after the Agency determines that ORVR is in widespread use throughout the motor vehicle fleet.
CAA section 202(a)(6) does not specify which motor vehicle fleet must be the subject era widespread use determination

before EPA may revise or waive the section 182(o)(3) Stage II.requirement.

Nor does the CAA identify what level of ORVR use in the motor vehicle fleet most be reached before it is '•videsprcad."

EPA expects the possibility of

Intoner Addm.• (URL) http'./A, Avw•,l•gov R•eyoled•R•cyallzble .Pxblted wllh Vegeleble Oil Salad I•k• Recycled Paper' (Mlrumum 25% Post•onsumer)different rates of the implementation

of ORVR across different geographic

regions and among different types of motor vehicle fleets within any region. Given this, EPA does not believe that CAA section 202(a)(6) must be read narrowly to allow a widespread

use determination and waiver of the Stage II requirement

for a given area or area's fleet only if ORVR use has become widespread

throughout

the entire United States, or only if ORVR use has reached a definite level in each area. Rather, EPA believes that section 202(a)(6) allows the Agency to apply the widespread

use criterion to either the entire motor vehicle fleet in a State or non-attainment

area, or to special segments of the overall fleet for which ORVR use is shown to be sufficiently

high, and to base widespread

use determinations

on differing levels of ORVR use, as appropriate.

Moreover, a single national rulemaking

is not needed to grant such a waiver for a specific area. Instead, EPA believes that the Act allows the Agency to use an area-specific

rulemaking

.approving a SIP revision to issue the section 202(a)(6) waiver for a relevant fleet in a non-attainment

area, where a State meets the recommended criteria discussed below.Various metrics have been studied for demonstrating

widespread

use of ORV-R in motor vehicle fleets. One metric focuses on the percentage

of vehicles in service that are ORVR-equipped. Based on our preliminary

analysis, this metric seems to track fairly closely with the percentage

of Vehicle miles traveled (VMT) from ORVR-equipped

vehicles, and with the pereerttage

of gasoline sold which is dispensed to ORVR-equipped

vehicles. In fact, since newer vehicles tend to be driven more miles than older models, VMT traveled by ORVR--equipped vehicles and gasoline dispensed to ORVR-equipped

vehicles may exceed 95 percent in a 95 percent ORVR-equipped

fleet. Another metric that EPA considered

is when VOC emissions resulting fi'om the application of ORVR controls alone equal the VOC emissions when both Stage II vapor recovery systems and ORVR controls are used, after accounting

for incompatibility

excess emissions. The incompatibility

excess emissions factor relates to losses in control efficiency when certain types of Stage II and ORVR are used together. Studies conducted in three northeastern states indicate that when the percentages

of motor vehicles in service with ORVR, vehicle miles traveled by ORVR-equipped

vehicles, or gasoline dispensed toORVRequipped vehicles are above 95 percent, then the widespread

use metric based on comparable VOC emissions will likely have been reached. For this reason, EPA believes that if95 percent of the vehicles in a fleet have ORVIL then widespread

use will likely have been demonstrated.
1. Initial Fueling at Automobile

Assembly Plants Based on our preliminary

analysis, EPA expects that ira State's submission

era SIP revision shows that 95 percent of the new vehicles fueled at an automobile

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

use of ORVR has been achieved for the fleet of motor vehicles that are fueled at that facility.
Since model year 2000, all passenger ears have been required to have ORVR. Also since 2006, all light duty trucks, SU-Vs and medium duty vehicles are required to be equippedwith ORVR. There may bca few situations, such as the chassis for motorized mobile homes, which still do not have ORVR. However, the number of these would be small. It is apparent that at most automobile

assembly plants greater than 95 percent of the vehicles manufactured would havc ORVR. Many assembly plants manufacture

100 percent ORVR equipped vehicles. Only such new vehicles arc expected to be fueled at the automobile

assembly plants.

States desiring to remove the Stage II requirement

for these facilities would need to submit a SIP revision that EPA would evaluate through notice and comment rulemaldng. The SIP would need to demonstrate

that the widespread

use benchmark

has been achieved and provide assurance that any facility wishing to remove Stage II equipment maintains its eligibility for its motor vehicle fleet. Any EPA SIP approval would also be subject to the CAA section 110(1) requirement

that the revision not interfere with any applicable requirement concerning

attainment and reasonable

further progress, or any other mquircment of the CAA.
2. Refueling of Rental Cars at Rental Car Facilities Similarly, EPA expects that if a SIP revision submission

demonstrates

that 95 percent of the vehicles in an automobile

rental fleet refueling at a rental car facility are equipped with ORVR and that this level of ORVR use would not decrease, then widespread

use of ORVR could be found for the motor vehicle fleet refueling at that facility. Most large rental car companies rent current model vehicles that would all have ORVR. There may be truck rental companies which have older vehicles which do not have ORVR and that would not be able to demonstrate widespread

use of ORVR for their fleets. As discussed above, any SIP revision would be subject to CAA section 1100) and other applicable requirements,

and State and local agencies should consider any potential transportation

conformity

impacts if Stage II is currently included in a SIP's on-road motor vehicle emissions budget.
3. Refueling Flexible Fuel Vehicles at E85 Dispensing

Pumps
E85 is a motor vehicle fuel that is a blend of as little as 15 percent gasoline and up to 85 percent ethanol. (In wintertime

applications,

the ratio may be 30 percent gasoline and 70 percent ethanol.) Ethanol is ethyl alcohol, a type of alcohol which can be produced from renewable resources such as com. Based on the agency's survey of existing SIPs, EPA believes that most States have defined "gasoline" (for purposes of controlling

emissions of VOC from refueling activities) to include gasoline/alcohol

blends that have the same volatility as E85. EPA's guidance for States in developing

their Stage II SIPs in the early 1990s suggested that States use the same definition of"gasoline"

as the one found in EPA's Standards of Performance

for Bulk Gasoline Terminals at 40 C.F.R. 60.501, which incindes "any petroleum distillate or petroleum distillate/alcohol

blend having a Rcid vapor pressure of 27.6 kilopascals

(kPa) or greater WhiCh is used as a fuel for internal combustion

engines." EPA recommended

using this definition to most broadly reach situations in which refueling of motor vehicles results in evaporative

VOC emissions that contribute to ozonenonattainment concentrations,

and to avoid a narrow interpretation

of what is "gasoline" thatwould allow significant VOC emissions fi'om motor vehicle refueling activities innonattainment areas to go uncontrolled.
E85 can only be used in specially designed flexible fuel vehicles (FFVs), which have mostly been manufactured

since 1998. Since these arc newer vehicles, most of them are equipped with ORVR, and cvcry FFV built today has ORVR. Thus, most vehicles refueling at E85 dispensing pumps are already having their evaporative

emissions captured, as in the cases of late model rental cars refueling at rental car facilities and newly manufactured

cars being fueled for the first time at automobile

assembly plants. EPA estimates that 59 percent of FFVs in current use are equipped with ORVR. The percentage,

of FFVs with ORVR will continue to climb as older vehicles are taken out of service and new models join the fleet. Across different ozone non-attainment

areas and between States, these percentages

may vary.
EPA believes that encouraging

the use orE85 as a motor vehicle fuel reduces emissions of other air pollutants such as CO and benzene, a known human carcinogen,

and reduces emissions of greenhouse

gases. In addition, based on available information,

the Agency is concerned that there is currently a lack of certified Stage II equipment for E85 (which may require different materials of construction

than conventional

Stage equipment), and that the timing for when certified E85-c'ompatible

equipment will become widely available is uncertain. This may unnecessarily

hinder E85 distribution

in areas that now require Stage
Unlike in the cases of automobile

assembly plants and rental ear facilities, EPA is not recommending a specific percentage

of the FFV fleet that should have ORVR before widespread use could be determined.

This is because most E85 compatible

vehicles are already equipped with ORVR and this percentage

is increasing over time, whereas for automobile assembly plants and ear rental facilities very high percentages

of ORVR use have in most eases already been reached and are not expected to further increase significantly. The general use of ORVR in FFVs, instead, is expected to significantly

increase, as are the miles driven by and amount of fuel dispensed to recent ORVR-equipped

FFVs compared to those manufactured

before 2000 without ORVR.Moreover, we believe that,in determining

whether widespread

use of ORVR has been demonstrated, it is reasonable under section 202(a)(6) to consider the VOC emissions impacts of removing Stage II, and that those impacts may inform the percentage

ofORVRequipped vehicles that would need to be achieved for a specific motor vehicle fleet or in a specific non-attainment

area. EPA expects that the air quality impact of allowing E85 refueling facilities to operate without Stage II controls would likely be minimal in mostnonattainment areas. FFVs cttrrently comprise about 2 percent of the total US fleet. Non-ORVR FFVs are less percent of the total U.S. vehicle fleet. EPA estimates that non-ORVR

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

because of the relatively small number of stations that offer E85 (around 1,000 out of 170,000 total refueling stations) EPA believes that very few of these non-ORVR

refueling events actually
occur at E85 pumps.Considering the factors discussed above, if an area can demonstrate

that any incrcase in emissions caused by operating E85 fueling facilities without Stage H controls is so small
as to clearly not interfere with attainment of the ozone standard or reasonable

further progress or any other applicable CAA requirement,

then EPA expects it could find that ORVR is in widespread

use for FFVs when refueling at E85 facilities in this arcs. These areas could then allow E85 facilities to operate without Stage II controls, after modifying their SIPs such that E85 is not included within the definition of"gasoline"

for purposes of Stage II vapor recovery controls (or aRer taking other necessary SIP revision action). As discussed above, States would need to submit SIP revisions affecting this change to their current Stage II SIPs, which EPA would evaluate through notice and comment rulemaking, .subject to the provisions of CAA section 1100). In addition, State and local agencies should consider if there arc any transportation

conformity

impacts related to removin.g Stage II, if emissions reductions from Stage II arc included in a SIP's on-road motor vehicle emissions budget. Duc to the expected rapid growth of E85 installations,

EPA will explore the development of ways to expedite the SIP revision process for States which are dealing with the E85 issue.
General Exclusions

from Widespread

Use Determination•
States in the ozone transport region (OTR) are still required to apply Stage IL or a comparable measure, in all areas under 184(b)(2) of the CAA. This requirement

is not affected by any widespread

use determination

or waiver of the section 1820a)(3) requirement granted under section 202(a)(6). For the independent

section 184(b)(2) "comparable measure" requirement

to not prevent an appropriate

removaJ of Stage II controls, OTR States may want to revisit their previously

approved comparable

measure SIPs to consider substituting available non-Stage II measures for the Stage II controls they currently require. Also, some States have chosen to add Stage II vapor recovery system requirements

in thci• SIPs for ozone nonattainment

areas that are classified in a category lower than "serious." While it is not necessary for States to demonstrate

ORVR is in widespread

use in moderate or cleaner ozone non-atta'mment

areas, a revision of previously

adopted SiP requirements to specifically

waive Stage II requirements

in such areas would need to comply with the provisions of CAA section 110(1) and, as described above, consider any transportation conformity

impacts as applicable.
This guidance for widespread

use determinations

for special sectors would not necessarily apply to widespread

use determinations

for the general motor vehicle fleet. Within the overall motor vehicle fleet, the rate of penetration

of ORVR-equipped

vehicles has not advanced at the same rapid rates as for the fleets discussed in this memorandum. EPA is still considering

the pos.sible criteria for determining

widespread

use for the general fleet.