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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 80

[EPA-HQ-OAR-2012-0223; FRL – ]

Regulation of Fuels and Fuel Additives: Modifications to Renewable Fuel Standard

and Diesel Sulfur Programs

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed Rule.

SUMMARY: EPA is proposing to amend the definition of heating oil in 40 CFR § 

80.1401 in the Renewable Fuel Standard (RFS) program under section 211(o) of the 

Clean Air Act. This amendment would expand the scope of renewable fuels that can 

generate Renewable Identification Numbers (RINs) as heating oil to include fuel oil 

produced from qualifying renewable biomass that would be used to generate heat to 

warm buildings or other facilities where people live, work, recreate, or conduct other 

activities. Fuel oils used to generate process heat, power, or other functions would not be 

included in the amended definition. Producers or importers of fuel oil that meets the

amended definition of heating oil would be allowed to generate RINs, provided that the 

fuel oil meets the other requirements specified in the RFS regulations. This proposed 

amendment would not modify or limit fuel included in the current definition of heating 

oil at 40 CFR § 80.2(ccc). We are also proposing amendments to the diesel sulfur 

program to provide additional flexibility for transmix processors that produce locomotive 

and marine diesel fuel. Specifically, we are proposing to reinstate an allowance for 
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transmix processors to produce 500 ppm sulfur diesel fuel for use in older technology

locomotive and marine diesel outside of the Northeast Mid-Atlantic Area. We are also 

requesting comment on extending this allowance to outside of the Northeast Mid-Atlantic 

Area. These proposed amendments to the diesel transmix provisions are expected to 

result in reduced compliance costs for transmix processors and users of locomotive and 

marine diesel fuel while having a neutral or positive environmental impact. 

DATES: Written comments must be received on or before [insert date 30 days from 

date of publication in the Federal Register], or 30 days from the date of the public 

hearing, if a public hearing is requested. A request for a public hearing must be received 

by [insert date 15 days from date of publication in the Federal Register]. If a public 

hearing is requested, we will publish a notice in the Federal Register announcing the 

date and location of the hearing at least 14 days prior to the hearing.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-OAR2012-0223, by of the following methods:

• www.regulations.gov: Follow the on-line instructions for submitting comments. 

• Email: a-and-r-docket@epa.gov, Attention Air and Radiation Docket ID EPAHQ-OAR-2012-0223.

• Fax: 731-214-4051.Mail: Air and Radiation Docket, Docket No. EPA-HQ-OAR2012-0223, Environmental Protection Agency, Mailcode: 6406J, 1200 

Pennsylvania Ave., NW, Washington, DC 20460. 

• Hand Delivery: EPA Docket Center, EPA/DC, EPA West, Room 3334, 1301

Constitution Ave., NW, Washington, DC, 20460, Attention Air and Radiation 

Docket, ID No. EPA-HQ-OAR-2012-0223. Such deliveries are only accepted 
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during the Docket’s normal hours of operation, and special arrangements should 

be made for deliveries of boxed information. 

Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-2012-0223. EPA’s

policy is that all comments received will be included in the public docket without change 

and may be made available online at www.regulations.gov, including any personal 

information provided, unless the comment includes information claimed to be 

Confidential Business Information (CBI) or other information whose disclosure is 

restricted by statute. Do not submit information that you consider to be CBI or otherwise 

protected through www.regulations.gov or e-mail. The www.regulations.gov website is 

an “anonymous access” system, which means EPA will not know your identity or contact 

information unless you provide it in the body of your comment. If you send an e-mail 

comment directly to EPA without going through www.regulations.gov your e-mail 

address will be automatically captured and included as part of the comment that is placed 

in the public docket and made available on the Internet. If you submit an electronic 

comment, EPA recommends that you include your name and other contact information in 

the body of your comment and with any disk or CD-ROM you submit. If EPA cannot 

read your comment due to technical difficulties and cannot contact you for clarification, 

EPA may not be able to consider your comment. Electronic files should avoid the use of 

special characters, any form of encryption, and be free of any defects or viruses. For 

additional information about EPA’s public docket visit the EPA Docket Center homepage 

at http://www.epa.gov/epahome/dockets.htm.

Docket: All documents in the docket are listed in the www.regulations.gov index. 

Although listed in the index, some information is not publicly available, (e.g., CBI or 
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other information whose disclosure is restricted by statute). Certain other material, such 

as copyrighted material, will be publicly available only in hard copy. Publicly available 

docket materials are available either electronically in www.regulations.gov or in hard 

copy at the Air and Radiation Docket and Information Center, EPA, 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) 343-2800).

FOR FURTHER INFORMATION CONTACT: Kristien Knapp, Office of 

Transportation and Air Quality, Mail Code: 6405J, U.S. Environmental Protection 

Agency, 1200 Pennsylvania Avenue, NW, 20460; telephone number: (202) 343-9949;

fax number: (202) 343-2800; email address: knapp.kristien@epa.gov.

SUPPLEMENTARY INFORMATION:

I. Why is EPA Issuing a Proposed Rule?

This document proposes to amend the definition of heating oil in 40 CFR §

80.1401 in the renewable fuel standard (RFS) program that was promulgated under 

section 211(o) of the Clean Air Act. This amendment would expand the scope of fuels 

that can generate RINs as home heating oil to include fuel oil that would be used to 

generate heat to warm buildings or other facilities where people live, work, recreate, or 

conduct other activities. This document also proposes amendments to the diesel sulfur 

program to provide additional flexibility to transmix processors to produce locomotive 

and marine (LM) diesel fuel. Specifically, we are proposing to reinstate an allowance for 

transmix processors to produce 500 ppm sulfur diesel fuel for use in older technology
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locomotive and marine diesel outside of the Northeast Mid-Atlantic Area (“NEMA”). 

We are also requesting comment on extending this allowance to the NEMA. These 

proposed amendments to the diesel transmix provisions are expected to result in reduced 

compliance costs for transmix processors and users of LM diesel fuel while having a 

neutral or positive environmental impact. 

We are publishing a separate document that will serve as a direct final rule in the 

“Rules and Regulations” section of this Federal Register. The direct final rule amends 

the definition of heating oil and allows transmix processors to produce locomotive and 

marine diesel fuel. The direct final rule does not attempt to extend the transmix 

allowance to the NEMA; we request comments on that issue only in this document. If we 

receive no adverse comment on the direct final rule, or any portion of the direct final rule, 

by the date provided in the DATES section above, the amendments to the definition of 

heating oil and the amendments to the diesel transmix provisions that apply outside the 

NEMA will become final. If EPA receives relevant adverse comment on the direct final 

rule, any portion of the direct final rule, or a hearing request, we will publish a timely

withdrawal of the direct final rule or the portion receiving adverse comments in the 

Federal Register.

We will address all public comments in any subsequent final rule based on this 

proposed rule. We will not institute a second comment period on this action. Any parties 

interested in commenting must do so at this time. For further information about 

commenting on this rule, see the ADDRESSES section of this document.

II. Does This Action Apply to Me?
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Entities potentially affected by this action include those involved with the 

production, distribution and sale of transportation fuels, including gasoline and diesel 

fuel, or renewable fuels such as ethanol and biodiesel, as well as those involved with the 

production, distribution and sale of other fuel oils that are not transportation fuel. 

Regulated categories and entities affected by this action include:

Category NAICS CodesaSIC Codesb Examples of Potentially 

Regulated Parties

Industry

Industry

Industry

Industry

Industry

Industry

Industry

Industry

324110

325193

325199

Various

424690

424710

424720

454319

2911

2869

2869

Various

5169

5171

5172

5989

Petroleum refiners, importers.

Ethyl alcohol manufacturers.

Other basic organic chemical 

manufacturers.

Transmix Processors

Chemical and allied products 

merchant wholesalers.

Petroleum bulk stations and 

terminals.

Petroleum and petroleum 

products merchant wholesalers.

Other fuel dealers.

aNorth American Industry Classification System (NAICS).

b

Standard 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 be potentially regulated by this action. Other types of 

entities not listed in the table could also be regulated. To determine whether your entity

is regulated by this action, you should carefully examine the applicability criteria of Part 

80, subparts D, E and F of title 40 of the Code of Federal Regulations. If you have any 

question regarding applicability of this action to a particular entity, consult the person in 

the preceding “FOR FURTHER INFORMATION CONTACT” section above.
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III. What Should I Consider as I Prepare My Comments for EPA?

A. Submitting information claimed as CBI. Do not submit this information to 

EPA through www.regulations.gov or e-mail. Clearly mark the part or all of the 

information that you claim to be CBI. For CBI information in a disk or CD ROM that 

you mail to EPA, mark the outside of the disk or CD ROM as CBI and then identify

electronically within the disk or CD ROM the specific information that is claimed as 

CBI. In addition to one complete version of the comment that includes information 

claimed as CBI, a copy of the comment that does not contain the information claimed as 

CBI must be submitted for inclusion in the public docket. Information so marked will not 

be disclosed except in accordance with procedures set forth in 40 CFR Part 2. 

B. Tips for Preparing Your Comments. When submitting comments, remember 

to:

• Identify the rulemaking by docket number and other identifying 

information (subject heading, Federal Register date and page number).

• Follow directions - The agency may ask you to respond to specific 

questions or organize comments by referencing a Code of Federal 

Regulations (CFR) part or section number.

• Explain why you agree or disagree; suggest alternatives and substitute 

language for your requested changes.

• Describe any assumptions and provide any technical information and/or 

data that you used.

• If you estimate potential costs or burdens, explain how you arrived at your 

estimate in sufficient detail to allow for it to be reproduced.
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• Provide specific examples to illustrate your concerns, and suggest 

alternatives.

• Explain your views as clearly as possible, avoiding the use of profanity or 

personal threats.

• Make sure to submit your comments by the comment period deadline 

identified.

C. Docket Copying Costs. You may be charged a reasonable fee for 

photocopying docket materials, as provided in 40 CFR Part 2.

IV. Amended Definition of Heating Oil under the Renewable Fuel Standard 

Program

EPA is issuing this proposed rule to amend the definition of heating oil in 40 CFR 

§ 80.1401 in the renewable fuel standard (“RFS” or “RFS2”) program promulgated under 

section 211(o) of the Clean Air Act (CAA). This amendment would expand the scope of 

renewable fuels that can generate Renewable Identification Numbers (RINs) as “home 

heating oil” to include fuel oil that would be used to generate heat to warm buildings or 

other facilities where people live, work, recreate, or conduct other activities. This 

proposed rule would allow producers or importers of fuel oil that meets the amended 

definition of heating oil to generate RINs, provided that other requirements specified in 

the regulations are met. Fuel oils used to generate process heat, power, or other functions

will not be approved for RIN generation under the amended definition of heating oil. The 

proposed amendment would not modify or limit fuel included in the current definition of 

heating oil at 40 CFR § 80.2(ccc). 

The RFS2 program requires the production and use of renewable fuel to replace 

or reduce the quantity of fossil fuel present in transportation fuel. Under EPA’s RFS 
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program this is accomplished by providing for the generation of RINs by producers or 

importers of qualified renewable fuel. RINs are transferred to the producers or importers 

of gasoline and diesel transportation fuel who then use the RINs to demonstrate 

compliance with their renewable fuel volume obligations. RINs also serve the function 

of credits under the RFS program. 

Congress provided that EPA could also establish provisions for the generation of 

credits by producers of certain renewable fuel that was not used in transportation fuel, 

called “additional renewable fuel.”1 Additional renewable fuel is defined as fuel that is 

produced from renewable biomass and that is used to replace or reduce the quantity of 

fossil fuel present in home heating oil or jet fuel.

2

In essence, additional renewable fuel 

has to meet all of the requirements applicable to qualify it as renewable fuel under the 

regulations, with the only difference being that it is blended into or is home heating oil or 

jet fuel. This does not change the volume requirements of the statute itself, however this 

can provide an important additional avenue for parties to generate RINs for use by

obligated parties, thus promoting the overall cost-effective production and use of 

renewable fuels. 

EPA addressed the provision for additional renewable fuels in the RFS2 

rulemaking, specifically addressing the category of “home heating oil.” EPA determined 

that this term was ambiguous, and defined it by incorporating the existing definition of 

heating oil at 40 CFR § 80.2(ccc). EPA stated that:

 

1

“EISA changed the definition of ‘renewable fuel’ to require that it be made from feedstocks that qualify as 

‘renewable biomass.’ EISA’s definition of the term ‘renewable biomass’ limits the types of biomass as well 

as the types of land from which the biomass may be harvested.” Regulation of Fuels and Fuel Additives: 

Changes to Renewable Fuel Standard Program, 75 FR 14670, 14681 (March 26, 2010).

2

See CAA sections 211(o)(1)(A) and (o)(5)(E).
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EISA uses the term “home heating oil” in the definition of “additional 

renewable fuel.” The statute does not clarify whether the term should be 

interpreted to refer only to heating oil actually used in homes, or to all fuel 

of a type that can be used in homes. We note that the term ‘home heating 

oil’ is typically used in industry in the latter manner, to refer to a type of 

fuel, rather than a particular use of it, and the term is typically used 

interchangeably in industry with heating oil, heating fuel, home heating 

fuel, and other terms depending on the region and market. We believe this 

broad interpretation based on typical industry usage best serves the goals 

and purposes of the statute. If EPA interpreted the term to apply only to 

heating oil actually used in homes, we would necessarily require tracking 

of individual gallons from production through ultimate [use] in homes in 

order to determine eligibility of the fuel for RINs. Given the fungible 

nature of the oil delivery market, this would likely be sufficiently difficult 

and potentially expensive so as to discourage the generation of RINs for 

renewable fuels used as home heating oil. This problem would be similar 

to that which arose under RFS1 for certain renewable fuels (in particular 

biodiesel) that were produced for the highway diesel market but were also 

suitable for other markets such as heating oil and non-road applications 

where it was unclear at the time of fuel production (when RINs are 

typically generated under the RFS program) whether the fuel would 

ultimately be eligible to generate RINs. Congress eliminated the 

complexity with regards to non-road applications in RFS2 by making all 

fuels used in both motor vehicle and nonroad applications subject to the 

renewable fuel standard program. We believe it best to interpret the Act so 

as to also avoid this type of complexity in the heating oil context. Thus, 

under today’s regulations, RINs may be generated for renewable fuel used 

as ‘heating oil,’ as defined in existing EPA regulations at §80.2(ccc). In 

addition to simplifying implementation and administration of the Act, this 

interpretation will best realize the intent of EISA to reduce or replace the 

use of fossil fuels.3 

The existing definition of heating oil at 40 CFR § 80.2(ccc) means “any #1, #2, or 

non-petroleum diesel blend that is sold for use in furnaces, boilers, stationary diesel 

engines, and similar applications and which is commonly or commercially known or sold 

as heating oil, fuel oil, or similar trade names, and that is not jet fuel, kerosene, or 

MVNRLM diesel fuel.” The existing definition of non-petroleum diesel at 40 CFR §

80.2(sss) means a diesel that contains at least 80 percent mono-alkyl esters of long chain 

fatty acids derived from vegetable oils or animal fats. Thus, in order to generate RINs for 

 

3

75 FR 14670, 14687 (March 26, 2010).
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home heating oil that is a non-petroleum diesel blend, the fuel must contain at least 80 

percent mono-alkyl esters of long chain fatty acids derived from vegetable oils or animal 

fats, as well as meeting all other requirements of the RFS2 regulations. Since the 

promulgation of the RFS2 final rule, we have received a number of requests to consider 

expanding the scope of the home heating oil provision to include additional fuel oils that 

are produced from qualifying renewable biomass but do not meet the regulatory

definition of heating oil because they are not #1 or #2 diesel and do not contain at least 80 

percent mono-alkyl esters. Parties raising this issue have suggested that limiting “home 

heating oil” to the fuel types defined in 40 CFR § 80.2(ccc) disqualifies certain types of 

renewable fuel oils that could be used for home heating and that this limitation does not 

align with our reasoning in the preamble to take a broad interpretation of the term “home 

heating oil” in CAA section 211(o). 

EPA has considered this issue further and is proposing to revise the definition of 

heating oil in the RFS program to expand the scope of fuels that can generate RINs as 

heating oil. EPA is proposing to revise the definition such that RINs also may be 

generated by renewable fuel that is fuel oil and is used to heat interior spaces of homes or 

buildings to control ambient climate for human comfort. This would not include fuel oils 

used to generate process heat, power, or other functions. The fuel oil would be used to 

generate heat to warm buildings or other facilities where people live, work, recreate, or 

conduct other activities. We are proposing to amend the existing definition of heating oil 

in 40 CFR § 80.1401 to include fuel oils that are used in this way. This is in addition to 

the fuel oils currently included in the definition of heating oil at 40 CFR § 80.2(ccc), and 

would not modify or limit the fuel included in the current definition.
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EPA believes this expansion of the scope of the home heating oil provision is 

appropriate and authorized under CAA section 211(o). As EPA described in the RFS2 

final rule, Congress did not define the term “home heating oil,” and it does not have a 

fixed or definite commercial meaning. In the RFS2 final rulemaking, EPA focused on 

whether the provision was limited to heating oil actually used in homes. EPA noted that 

the term home heating oil is usually used in the industry to refer to a type of fuel, and not 

to one specific use for the fuel. Given this more general usage of the term, and the 

practical barriers that would arise if the term was defined as fuel actually used to heat 

homes, EPA defined the scope of home heating oil in a more general fashion by

identifying those types of fuel oils that are typically used to heat homes. EPA determined 

this was a reasonable interpretation of an ambiguous statutory provision that simplified 

implementation and administration of the Act and promoted achievement of the goals of 

the RFS program. 

In the RFS2 rulemaking, EPA focused on the kinds of fuel oils that can be used to 

heat homes. The expansion of the definition proposed in this rulemaking would address 

two types of fuel oils not included in the current definition of heating oil. First, the 

proposed definition would include additional fuel oils that are actually used to heat 

homes, even if they do not meet the current definition of heating oil. This is clearly 

within the scope of the statutory provision for home heating oil.

Second, the proposed definition would include fuel oils that are used to heat 

facilities other than homes to control ambient climate for human comfort. Under the 

current definition of heating oil, a fuel oil meets the definition based on its physical 

properties and its use in furnaces, boilers, stationary diesel engines, and similar 
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applications, not whether it is actually used to heat a home. The basic decision made in 

the RFS2 final rulemaking was to allow RIN generation for the group of fuel oils that are 

typically used for home heating purposes. Under the current definition the relationship of 

the fuel oil to heating homes is that the fuel oil is of the type that is typically used for and 

can be used for that purpose.4

In the proposed amended definition, qualifying fuel oils would be used for 

heating places where people live, work, or recreate, and not just their homes. It focuses

more on what is getting heated – people – and not where the people are located. EPA 

believes this is a reasonable interpretation of the phrase “home heating oil,” while 

recognizing that it is not an obvious interpretation. This interpretation recognizes the 

ambiguity of the phrase used by Congress, which is not defined and does not have a clear 

and definite commercial meaning. It gives reasonable meaning to the term home heating

oil, by limiting the additional fuel oils to fuel oils when used for heating of facilities that 

people will occupy, and excluding fuel oils when used for other purposes such as 

generation of energy used in the manufacture of products. It also focuses on the aspect of 

home that is important here – the heating of people – recognizing that EPA has already 

determined that fuel oil can be included in the scope of home heating oil even if it is not 

actually used to heat a home. This interpretation will also promote the purposes of the 

RFS program by facilitating the generation of RINs for renewable fuels that reduce 

emissions of greenhouse gases compared to fossil fuels. For example, EPA has received 

information that such an expanded definition of heating oil would result in nearly 

immediate production of 3.5 million gallons from existing facilities, with an additional 

 

4 This is different from other renewable fuels in the RFS program, which are defined in terms of their use as 

transportation fuel or jet fuel. See 40 CFR § 80.1401, definitions of “renewable fuel” and “transportation 

fuel.” 
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projected production of up to 45 million gallons per year within 24 months following 

regulatory action. Although EPA believes the expanded definition in the regulations of 

“heating oil” would be a reasonable interpretation of the intent of Congress to allow 

additional renewable fuel to count towards the volume mandates if it is produced from 

renewable biomass and is used to replace or reduce the quantity of fossil fuel present in 

home heating oil, EPA invites comment on this interpretation.

For the text of the proposed regulatory changes please see the direct final rule, 

located in the “Rules and Regulations” section of this Federal Register.

V. Lifecycle Greenhouse Gas Assessment of the Amended Definition of Heating Oil

EPA has also evaluated whether any revisions would need to be made to Table 1 

to 40 CFR § 80.1426 that lists the applicable D codes for each fuel pathway for use in 

generating RINs in the RFS2 regulations in light of the additional fuel oils included in the 

expanded definition of heating oil. As discussed below, EPA has determined that the 

applicable D code entries for heating oil in Table 1 to 40 CFR § 80.1426 would continue 

to be appropriate and would not need to be revised in light of the expanded definition of 

heating oil.

Under the RFS program, EPA must assess lifecycle greenhouse gas (GHG) 

emissions to determine which fuel pathways meet the GHG reduction thresholds for the 

four required renewable fuel categories. The RFS program requires a 20% reduction in 

lifecycle GHG emissions for conventional renewable fuel (except for grandfathered 

facilities and volumes), a 50% reduction for biomass-based diesel or advanced biofuel, 

and a 60% reduction for cellulosic biofuel. For the final RFS2 rule, EPA assessed the 

lifecycle greenhouse gas emissions of multiple renewable fuel pathways and classified 
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pathways based on these GHG thresholds.5In addition, EPA has added several pathways 

since the final rule was published. 

The fuel pathways consist of fuel type, feedstock, and production process 

requirements. GHG emissions are assessed at all points throughout the lifecycle 

pathway. For instance, emissions associated with sowing and harvesting of feedstocks 

and in the production, distribution and use of the renewable fuel are examples of what are 

accounted for in the GHG assessment. A full accounting of emissions is then compared 

with the petroleum baseline emissions for the transportation fuel being replaced. The 

lifecycle GHG emissions determination is one factor used to determine compliance with 

the regulations.

There are currently several fuel pathways that list heating oil as a fuel type with 

various types of feedstock and production process used, qualifying the heating oil 

pathways as either biomass-based diesel, advanced, or cellulosic. The determinations for 

these different pathways were based on the current definition of heating oil. The 

pathways also include several types of distillate product including diesel fuel, jet fuel and 

heating oil. 

The lifecycle calculations and threshold determinations are based on the GHG 

emissions associated with production of the fuel and processing of the feedstock. 

Converting biomass feedstocks into heating oil products requires starting with 

triglycerides (if oils are used as feedstock) or hemi-cellulose, cellulose, lignin, starches, 

etc. (if solid biomass feedstock is used) and through either a biochemical or 

thermochemical process converting those molecules into a fuel product. The existing 

heating oil pathways were based on the current definition of the fuel, and were based on a 

 

5

See Table 1 to 40 CFR § 80.1426. 
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certain level of processing to produce #1, #2, or non-petroleum diesel blend and the 

related energy use and GHG emissions that were part of the lifecycle determination for 

those fuel pathways.

The main difference between the current definition of heating oil, which refers to 

#1, #2, or non-petroleum diesel blend, and the expanded definition that is proposed in this 

rulemaking is that the expanded definition would include heavier types of fuel oil with 

larger molecules. Based on the type of conversion process, producing these heavier fuel

oil products versus the #1, #2, or non-petroleum diesel blend would affect the amount of 

energy used and therefore the GHG emissions from the process. There are two main 

paths for producing a fuel oil product from biomass. In one the biomass is converted into 

a biocrude which is further refined into lighter products. In this case producing a heavier 

fuel oil product would require less processing energy and have lower GHG emissions 

than converting the feedstock into a #1, #2, or non-petroleum diesel blend. 

In the other type of process the compounds in the biomass are changed into a set 

of intermediary products, such as hydrogen (H) and carbon monoxide (CO).

6

 These 

compounds are then either catalytically or biochemically converted into the fuel product. 

In this case, the vast majority of the energy is associated with breaking down the 

feedstock into the set of intermediary compounds. The process used and the energy

needed for it does not vary based on the type of fuel that is then produced from these 

intermediary compounds. The type of fuel could affect the type of catalyst or biological 

process used to change the intermediary compounds into the fuel product, but this would 

 

6 This describes the Fischer-Tropsch process. Other processes rely on forming different sets of compounds 

from the biomass, and then producing the fuel product from the set of compounds.
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have no real impact on the energy used or the GHG emissions associated with converting 

the biomass into a different fuel product. 

Based on these considerations, EPA believes the GHG emissions associated with 

producing the fuel oil included in the expanded definition would be the same or lower 

than the GHG emissions associated with producing #1, #2, or non-petroleum diesel 

blend. Therefore, EPA believes the prior life cycle analysis for heating oil would support 

applying the existing pathways for fuel oil in the RFS2 regulations to the expanded 

definition of heating oil. EPA invites comments whether there are any other factors to 

consider in addition to the reasons discussed above for extending the lifecycle analysis 

already conducted for heating oil in the final rulemaking for fuel oils under the expanded 

definition of heating oil.

For the text of the proposed regulatory changes please see the direct final rule, 

located in the “Rules and Regulations” section of this Federal Register.

VI. Additional Registration, Reporting, Product Transfer Document and 

Recordkeeping Requirements 

A. Additional Requirements for the Amended Definition of Heating Oil

An important issue to address is how to implement such an expanded definition. 

As EPA recognized in the RFS2 rulemaking, fuel oils end up being used in a variety of 

different uses, where the fuel producer may have little knowledge at the time of 

production as to eventual use of the fuel. This is especially the case where the fuel oil is 

distributed in a fungible distribution system. EPA addressed this in the RSF2 rulemaking 

by defining home heating oil as a type of fuel with certain characteristics, irrespective of 

where it was used. This approach avoided the need to track the fuel to its actual use, and 
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including the characteristics of the fuel in its definition in 40 CFR § 80.1401 was 

adequate to retain a close tie to the concept underlying home heating oil. 

The proposed expansion of the definition raises this same issue but in a more 

significant way. While the proposed expansion of the definition includes some limited 

physical characteristics that fuel oils would need to meet in order to qualify for

generating RINs, it does not provide sufficient specificity to differentiate between those 

fuels oils used to heat buildings for climate control for human comfort and those used to 

generate process heat or other purposes. Therefore, for eligible fuel oils other than those 

qualifying under the existing definition in 40 CFR § 80.2(ccc), EPA is proposing that the 

renewable fuel producer or importer have adequate documentation to demonstrate that 

the fuel oil volume for which RINs were generated was used to heat buildings for climate 

control for human comfort and meets the expanded definition of heating oil prior to 

generating RINs. 

EPA recognizes that under the current definition of heating oil no tracking or 

other documentation of end use is required, and some heating oils that meet the current 

definition could end up being used for other purposes. However, in all cases the heating

oil under the current definition has to have the physical or other characteristics that tie it 

to the type of fuel oil used to heat homes. In addition, the value of these heating oils 

generally will lead to their use for heating of homes or other buildings, and not for 

generation of process heat. For the fuel oils included in the expanded definition, the tie to 

home heating oil would not be the physical characteristics of the fuel oil but instead its 

actual usage for heating for the purposes of climate control for human comfort. 
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In order to verify that the fuel oils are actually used to generate heat for climate 

control purposes, EPA is proposing the following registration, recordkeeping, product 

transfer document (PTD) and reporting requirements. These proposed requirements 

would not apply to fuels qualifying under existing 40 CFR § 80.2(ccc) of the regulations. 

We are also proposing that if RINs are generated for fuel oils under the expansion of the 

scope of home heating oil in today’s rule, and those fuel oils are not actually used to 

generate heat for climate control purposes, but for some other purpose, all parties 

involved in either the generation, assignment, transfer or use of that RIN, including the 

end user of that fuel oil, are subject to and liable for violations of the RFS2 regulations 

and the CAA.

For the text of the proposed regulatory changes please see the direct final rule, 

located in the “Rules and Regulations” section of this Federal Register.

1. Registration

For the purpose of registration, EPA is proposing to require producers of the 

expanded fuel oil types to submit to EPA all existing contracts with their prospective 

clients for specified quantities of fuel oil that the prospective client intends to purchase 

from the producer for the sole purpose of heating homes or buildings. The submission of 

the contracts would help EPA to verify the potential volumes the producer is requesting 

to register under the program for RIN generation. EPA recognizes that the producer may

not have all contracts set up prior to registration that would equate to the facility’s 

permitted capacity or actual peak capacity as defined in the 40 CFR § 80.1401 of the rule 

that is currently used by EPA to establish a facility’s baseline volume for registration 

purposes. EPA also recognizes that it would not be practical for program implementation 
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to require these producers to continually submit new and revised contracts for every

client to the EPA, and for EPA to continually update the producer’s registered baseline 

volume based on these contracts to reflect every gallon of fuel oil produced up to the 

facility’s permitted capacity or actual peak capacity. Therefore, EPA is proposing in this 

rulemaking to allow the producer of the expanded fuel oil types to establish their 

facility’s baseline volume in the same manner as all other producers under the RFS 

program, e.g., based on the facility’s permitted capacity or actual peak capacity. 

However, we are also proposing additional requirements for the submission of contracts 

executed prior to registration, as a means to verify the initial volumes that will be sold for 

heating purposes as defined in paragraph (2) of the amended definition of heating oil. 

EPA is also proposing to require submissions of new and revised contracts that are 

executed after registration on an annual basis as part of the producer’s update to their 

registration. Regardless of when the contract is executed, the producer of the expanded 

fuel oil types would need to have contracts in place for all specified quantities of fuel oil 

that their client(s) purchase in order to generate RINs. Additionally, we are proposing

recordkeeping, product transfer documents (PTD) and reporting requirements discussed 

below that will be used as a means for verification of the remaining gallons up to the 

facility’s registered capacity. The proposed registration requirements are detailed in the 

registration section in 40 CFR § 80.1450(b)(1)(ix) in the direct final rule located in the

“Rules and Regulations” section of this Federal Register.

2. Recordkeeping, Product Transfer Documents and Reporting

For the purpose of continued verification after registration, EPA is proposing to 

establish additional requirements for recordkeeping in 40 CFR §§ 80.1454(b)(6) and (7), 
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PTDs in 40 CFR § 80.1453(d), and reporting requirements in 40 CFR §

80.1451(b)(1)(ii)(T) for the expanded fuel oil types. As stated earlier, these new 

requirements would not pertain to heating oil qualifying under 40 CFR § 80.2(ccc). The 

proposed recordkeeping, PTD and reporting requirements are detailed in the direct final 

rule located in the “Rules and Regulations” section of this Federal Register.

The proposed recordkeeping, PTD and reporting requirements would ensure that 

the expanded fuel oil types that are used to generate RINs are actually used in a 

qualifying application. The proposed regulations would require contracts between the 

fuel oil producer and the final end user for the legal transfer of title of a specific volume 

of fuel oil that is designated for use, and is actually used, only for the purpose of heating

interior spaces of homes or buildings to control ambient climate for human comfort. For 

instance, the additional recordkeeping requirements would stipulate that the producer of 

fuel oils maintain documents associated with each gallon of fuel oil that is under contract 

for sale and is sold to all of its clients, and affidavits from the client stipulating that they

are using the fuel oil for purposes of heating interior spaces of buildings where people 

live, work, recreate, or conduct other activities to control ambient climate for human 

comfort. Affidavits will be a required element of the contract between renewable fuel 

producer and prospective client(s), but a second affidavit will also be required from the 

end user of the qualifying fuel oil, each time the qualifying fuel oil is transferred from the 

renewable fuel producer to the end user with RINs assigned to that qualifying fuel. 

Additionally, producers are required to maintain all documents and records submitted for 

registration and registration updates as part of the producer’s recordkeeping requirements

for the expanded fuel oil types they register for RIN generation. EPA believes the 
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producer’s maintenance of these records would help to substantiate continued tracking 

and verification that the end use of the fuel oil is in compliance with the stipulations of 

the expanded definition of heating oil. 

The additional PTD requirement stipulates that the PTD used to transfer 

ownership of the renewable fuel would contain the statement: “This volume of renewable 

fuel is designated and intended to be used to heat interior spaces of homes or buildings. 

Do NOT use for any other purpose.” EPA believes that this PTD requirement would help 

to ensure that each gallon of fuel oil that is transferred from the producer to the end user 

is used for qualifying purposes under the expanded definition of heating oil. If the fuel 

oil is sent to the end user, but the fuel oil is not actually used to generate heat for climate 

control purposes, but for some other non-qualifying purpose, then the RINs that were 

generated for that fuel oil must be immediately retired by the party who owns the RINs. 

If the fuel is used for some other non-qualifying purpose, and RINs are not retired, then 

both the producer and end user of that fuel are liable for violations of the RFS2 

regulations and the CAA.

The additional reporting requirements would stipulate that the producer of fuel 

oils report to EPA the total quantity of the fuel oils produced and sold to all its clients for 

qualifying purposes and the total volume produced or sold that did not qualify for RIN 

generation, including an explanation why these volumes of fuel oil did not qualify and to 

what entity were the volumes eventually sold. EPA believes the additional requirement 

to report the total gallons sold by the producers of fuel oils as well as the total gallons 

produced or sold that did not qualify for RIN generation would enable EPA to verify that 

the producers are producing and selling RIN-generating fuel oil that falls within their 
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allowable volume that is registered under the program and that it is be used in a qualified 

application. EPA invites comments for any other factors to consider regarding these 

additional requirements for registration, PTDs, reporting and recordkeeping.

B. Additional Requirement for RIN Generation

We are also amending the general requirements for how RINs are generated and 

assigned to batches of renewable fuel by renewable fuel producers and importers. We are 

explicitly clarifying a requirement that always existed: that producers and importer of 

renewable fuel who generate RINs must comply with the registration requirements of 40 

CFR § 80.1450, the reporting requirements of 40 CFR § 80.1451, the recordkeeping 

requirements of 40 CFR § 80.1454, and all other applicable regulations of this subpart M. 

This is a generally applicable requirement – not specific to fuel meeting the definition of 

home heating oil. See amended section 80.1426(a)(1)(iii).

VII. Amendments Related to Transmix

The final regulations for the nonroad diesel program were published in the 

Federal Register on June 24, 2004 (69 FR 38958). The provisions in the nonroad diesel 

rule related to transmix processors were modified by the Category 3 Marine diesel final 

rule that was published on April 30, 2010 (75 FR 22896). This action proposes 

additional amendments to the requirements for diesel fuel produced by transmix 

processors. Below is a table listing the provisions that we are proposing to amend. The 

following sections provide a discussion of these proposed amendments and of additional 

potential changes to the diesel transmix provisions that we are considering. 

Proposed Amendments 

to the Diesel Program 

Description
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Section

80.511(b)(4) Amended to allow for the production and sale of 500-ppm 

locomotive and marine (LM) diesel fuel produced from 

transmix past 2014.

80.513 (entire section) Amended to allow for the production and sale of 500-ppm 

LM diesel fuel produced from transmix past 2014.

80.572(d) Amended to extend 500ppm LM diesel fuel label past 2012.

80.597(d)(3)(ii) Amended to include 500-ppm LM diesel fuel in the list of 

fuels that an entity may deliver or receive custody of past 

June 1, 2014.

A. Consideration of Extending the Diesel Transmix Provisions Outside of 

the Northeast Mid-Atlantic Area and Alaska Beyond 2014

Batches of different fuel products commonly abut each other as they are shipped 

in sequence by pipeline. When the mixture between two adjacent products is not 

compatible with either product, it is removed from the pipeline and segregated as 

transmix. Transmix typically is gathered for reprocessing at the end of the fuel 

distribution system far from a refinery. In addition to the long transportation distances to 

return transmix to a refinery for reprocessing, incorporating transmix into a refinery’s 

feed also presents technical and logistical refining process challenges that typically make 

refinery reprocessing an unattractive option. Thus, transmix processers provide a 

valuable service in maintaining an efficient fuel distribution system. Transmix 

processing facilities handle very low volumes of fuel compared to a refinery and hence 
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are limited to the use of a simple distillation tower and additional blendstocks to 

manufacture finished fuels. There is currently no desulfurization equipment which has 

been demonstrated to be suitable for application at a transmix processor facility. Some 

products shipped by pipeline such as jet fuel and heating oil are subject to relatively high 

sulfur specifications (e.g., maximum 3,000 ppm for jet fuel). The presence of such high 

sulfur products in multi product pipelines and consequently in transmix constrains the 

ability of transmix processors to produce a low sulfur distillate product. 

The engine emissions standards finalized in the nonroad diesel rulemaking for 

new nonroad, locomotive, and Category 1 & 2 (C1 & C2) marine engines necessitates the 

use of sulfur-sensitive emissions control equipment which requires 15-ppm sulfur diesel 

fuel to function properly.

7

 Accordingly, the nonroad rule required that nonroad, 

locomotive and marine (NRLM) diesel fuel must meet a 15-ppm sulfur standard in 

parallel with the introduction of new sulfur-sensitive emissions control technology to the 

in-use fleet. Beginning June 1, 2014, the nonroad diesel rule required that all NRLM 

diesel fuel produced by refiners and importers must meet a 15-ppm sulfur standard. The 

nonroad diesel rule included special provisions to allow the continued use of 500-ppm 

sulfur locomotive and marine (LM) diesel fuel produced from transmix beyond 2014 in 

older technology engines as long as such engines remained in the in-use fleet. These 

provisions along with other now expired flexibilities in the diesel program were designed 

to minimize and postpone the impacts on transmix processors of transitioning to a 

condition where all highway, nonroad, locomotive, and marine diesel engines can only 

operate on 15-ppm diesel fuel. The 500-ppm LM diesel transmix provisions were limited 

 

7 Control of Emissions of Air Pollution from Nonroad Diesel Engines and Fuel, Final Rule, 69 FR 38958

(June 24, 2004). 
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to areas outside of the Northeast Mid-Atlantic Area (NEMA) and Alaska because it was 

judged that the heating oil market in these areas would provide a sufficient outlet for 

transmix distillate in these areas.8 Excluding the NEMA area and Alaska also allowed us 

to exempt the NEMA area and Alaska from the fuel marker provisions that are a part of

the compliance assurance regime. The continuation of the 500-ppm LM diesel transmix 

provisions beyond 2014 (finalized in the nonroad rule) was supported by ongoing 

recordkeeping, reporting, and fuel marker provisions that were established to facilitate 

enforcement during the phase in of the diesel sulfur program.9

In the development of the proposed requirements for Category 3 (C3) marine 

engines, EPA worked with industry to evaluate how the enforcement provisions for the 

new 1,000-ppm C3 marine diesel fuel to be introduced in June of 2014 could be 

incorporated into existing diesel program provisions.10 Our assessment based on input 

from industry at the time indicated that incorporating the new C3 marine fuel into the 

diesel program enforcement mechanisms while preserving the 500-ppm diesel transmix 

flexibility could not be accomplished without retaining significant existing burdens and 

introducing new burdens on a broad number of regulated parties. We also concluded that 

the new C3 marine diesel market would provide a sufficient outlet for transmix 

processors distillate product in place of the 500-ppm LM diesel market. Thus, we 

 

8 The NEMA area is defined in 40 CFR § 80.510(g)(1) as follows: (1) Northeast/Mid-Atlantic Area, which 

includes the following States and counties, through May 31, 2014: North Carolina, Virginia, Maryland, 

Delaware, New Jersey, Connecticut, Rhode Island, Massachusetts, Vermont, New Hampshire, Maine, 

Washington DC, New York (except for the counties of Chautauqua, Cattaraugus, and Allegany), 

Pennsylvania (except for the counties of Erie, Warren, McKean, Potter, Cameron, Elk, Jefferson, Clarion, 

Forest, Venango, Mercer, Crawford, Lawrence, Beaver, Washington, and Greene), and the eight easternmost counties of West Virginia (Jefferson, Berkeley, Morgan, Hampshire, Mineral, Hardy, Grant, and 

Pendleton).

9 This included the now-completed phase-in of 15 ppm highway diesel fuel and 15 ppm nonroad diesel fuel 

as well as the phase-out of the small refiner and credits provisions for LM diesel fuel that will be completed 

in 2014.

10 Control of Emissions From New Marine Compression-Ignition Engines at or Above 30 Liters per 

Cylinder; Proposed Rule, 74 FR 44442 (August 28, 2009).
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believed the 500-ppm LM diesel transmix flexibility would no longer be needed after 

2014. Hence, we requested comment on whether we should eliminate the 500-ppm LM 

transmix provisions in parallel with the implementation of the C3 marine diesel sulfur 

requirement. This approach allowed for a significant reduction in the regulatory burden 

on a large number of industry stakeholders through the retirement of the diesel program’s 

designate-and-track and fuel marker requirements. All of the comments that we received 

on the proposed rule were supportive of the approach. Consequently, we finalized the 

approach in the C3 marine final rule that was published on April 30, 2010.11

EPA received a petition from a group of transmix processors on June 29, 2010,

requesting that the Agency reconsider and reverse the 2014 sunset date for the 500-ppm 

LM transmix flexibility.

12

 A parallel petition for regulatory review was filed with the 

U.S. Court of Appeals, D.C. Circuit.13 The transmix processors stated that they were not 

aware of the changes to the 500-ppm LM transmix provisions until after they were 

finalized. The petitioners also stated that they believe that the C3 marine market would 

not be a viable outlet for their distillate product given the increased distribution costs 

compared to the 500-ppm LM market. Based on the additional input that we received 

from transmix processors and other stakeholders in the fuel distribution system during 

our consideration of the petition, EPA believes that it would be appropriate to extend the 

 

11 Control of Emissions From New Marine Compression-Ignition Engines at or Above 30 Liters per 

Cylinder; Final Rule, April 30, 2010, 75 FR 22896. 

12 Petition to Reconsider Final Rule: Control of Emissions from New Marine Compression Ignition Engines 

at or Above 30 Liters per Cylinder; Final Rule, 75 FR 22,896 (April 30, 2010), Letter to EPA 

Administrator Lisa Jackson dated June 29, 2010, from Chet Thompson of Crowell and Moring LLP, on 

behalf of Allied Energy Company, Gladieux Trading and Marketing, Insight Equity Acquisition Partners, 

LP, Liquid Titan, LLC, and Seaport Refining and Environmental, LLC. 

13

 Petition for Review, Allied Energy Company, Gladieux Trading and Marketing, Insight Equity 

Acquisition Partners, LP, LiquidTitan, LLC, and Seaport Refining and Environmental LLC, v. Respondent; 

U.S. Environmental Protection Agency, United States Court of Appeals for the District of Columbia 

Circuit, Case 10-1146, Document 1252640, Filed 06/29/2010.
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500-ppm diesel transmix flexibility beyond 2014. A proposed settlement agreement has 

been finalized between EPA and the petitioners under which EPA would propose 

regulatory changes to reintroduce the 500-ppm LM transmix diesel flexibility for legacy

LM equipment.14 The proposed amendments to the diesel transmix provisions contained 

in today’s action are in accord with the settlement agreement.

Our analysis indicates that extending the 500-ppm LM flexibility beyond 2014 

would have a neutral or net beneficial effect on overall emissions. The use of 500-ppm 

LM from transmix would be limited to older technology engines that do not possess 

sulfur-sensitive emission control technology. We believe that the proposed 500-ppm LM

segregation and other associated requirements would prevent misfueling of sulfursensitive engines.

To evaluate the environmental consequences of extending the diesel transmix 

provisions, we compared the potential increase in sulfate particulate matter (PM) from 

the use of 500 ppm LM from transmix in older engines to the additional transportation 

emissions associated with shipment to the Category 3 (C3) marine market which might 

be deferred by allowing continued access to the 500 ppm LM market. Markets for 

locomotive and marine diesel tend to be nearer to transmix processing facilities than 

markets for C3 marine diesel. Therefore, extending the diesel transmix provisions would 

result in a reduction in nitrogen oxides (NOX), volatile organic compounds (VOCs), 

carbon monoxide (CO), as well as PM emissions that would otherwise be associated with 

transporting transmix distillate product to the more distant C3 market.

 

14 Notice of Proposed Settlement Agreement, Request for Public Comment, 76 FR 56194 (September 12, 

2011).
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Although some batches of transmix distillate product may approach the 500 ppm 

sulfur limit, we estimate that the average sulfur content of transmix distillate product 

would be no more than 300 ppm.15 We estimate that approximately 500 million gallons 

of distillate fuel per year is produced from transmix.16 Assuming that all of the transmix 

distillate product would be used as 500 ppm LM in older engines, we estimate that an 

additional 70 tons of sulfate PM would be produced annually compared to the use of 15 

ppm diesel fuel.17 We believe that a substantial fraction of transmix distillate product

would be used as heating oil and C3 diesel fuel regardless of whether the diesel transmix 

provisions are extended. Also, as the older LM engines are retired from service, the size 

of the potential 500 ppm LM market will diminish until all LM engines must use 15 ppm 

diesel fuel. Therefore, assuming that all transmix distillate product would be used as 500 

ppm LM provides an upper bound estimate of the potential impact on PM emissions.

We estimate on average that transmix processors would need to ship their transmix 

distillate product an additional 150 miles by tank truck to reach the C3 Emission Control 

Area (ECA) marine market as compared to the 500 ppm LM market. This would result 

in an additional 80 tons of PM emissions annually. Thus, the PM emissions associated 

with transport to the C3 marine market are roughly equal to the increased sulfate PM 

emissions associated with the continued use of 500 ppm LM. We estimate that the 

increased transport distances could also result in an additional 2,200 tons of NOX, 220 

tons of VOC, and 650 tons of CO annually. Based on the above discussion, we believe 

 

15 This is based on our review of data on the sulfur levels of transmix distillate product from various 

transmix processors. 

16 Based on information provided by transmix processors, we estimate that approximately 750 million 

gallons per year of transmix is produced annually and that 2/3 of the transmix-derived product is distillate 

fuel and 1/3 is gasoline. 

17 Sulfate PM was converted to PM2.5 to allow a comparison with PM2.5 from increased fuel transport 

emissions.
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that the proposed extension of the 500 ppm LM provisions beyond 2014 outside the 

NEMA area would have a neutral or positive environmental impact. 

The extension of the 500-ppm LM transmix flexibility would defer additional 

transportation costs and provide a lower-cost fuel for use in older LM engines. 

Therefore, extending this flexibility would reduce the overall burden on industry of 

compliance with EPA’s diesel sulfur program. Providing additional time for transmix 

processors to evaluate how the C3 ECA marine market will develop after 2014 would 

also facilitate a smoother transition for transmix processors from the 500-ppm LM market 

as it gradually disappears due to fleet turnover. 

B. Proposed Diesel Transmix Provisions

Industry stakeholders suggested alternative enforcement mechanisms to support 

the extended flexibility which would not necessitate reinstating and expanding the 

designate-and-track and fuel marker provisions that were retired by the C3 marine final 

rule. Reinstatement and expansion of these provisions would likely place an 

unacceptable burden on a large number of stakeholders, most of whom would not handle 

500-ppm LM. The suggested alternative enforcement mechanism would impose minimal 

additional reporting and recordkeeping burdens only on the parties that produce, handle, 

and use 500-ppm LM. We believe that this alternative enforcement approach would meet 

the Agency’s goals of ensuring that the pool of 500-ppm LM is limited to transmix 

distillate and that 500-ppm LM is not used in sulfur-sensitive emissions control 

equipment. 

The compliance assurance provisions that we are proposing to support the 

extension of the diesel transmix flexibility are similar to those that were used to support 
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the small refiner flexibilities in Alaska during the phase-in of EPA’s diesel sulfur 

program.18 In addition to registering as a refiner and certifying that each batch of fuel 

complies with the fuel quality requirements for 500-ppm LM diesel fuel, producers of 

500-ppm transmix distillate product would be required to submit a compliance plan for 

approval by EPA. This compliance plan would provide details on how the 500-ppm LM 

would be segregated through to the ultimate consumer and its use limited to the legacy

LM fleet. The plan would be required to identify the entities that would handle the fuel 

and the means of segregation. We believe that it is appropriate to limit the number of 

entities that would be allowed to handle the fuel between the producer and the ultimate 

consumer in order to facilitate EPA’s compliance assurance activities.19 Based on 

conversations with transmix processors, we believe that specifying that no more than 4 

separate entities handle the fuel between the producer and the ultimate consumer would 

not hinder the ability to distribute the fuel.20 The plan would need to identify the ultimate 

consumers and include information on how the product would be prevented from being 

used in sulfur-sensitive equipment. 

We understand that some transmix processors currently rely on shipment by 

pipeline to reach the 500-ppm LM market. We are proposing that 500-ppm LM could be 

shipped by pipeline provided that it does not come into contact with distillate products 

that have a sulfur content greater than 15 ppm. The compliance plan would need to 

include information from the pipeline operator regarding how this segregation would be 

 

18 See 40 CFR § 80.554(a)(4). 

19 An entity is defined as any company that takes custody of 500-ppm LM diesel fuel. 

20 In most cases, fewer entities would take custody of the product. In many cases, only a single entity (a 

tank truck operator) would be in the distribution chain between the transmix processor and the ultimate 

consumer. However, we understand that as many as 4 separate entities may handle the product between the 

producer and ultimate consumer if it is shipped by pipeline: the tank truck operator to ship the product from 

the producer to the pipeline, the pipeline operator, the product terminal that receives the fuel from the 

pipeline, and another tank truck operator to ship the product to the ultimate consumer from the terminal. 
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maintained. Discussions with transmix processors indicate that this requirement would 

not limit their ability to ship 500-ppm LM by pipeline. If 500-ppm LM was shipped by

pipeline abutting 15-ppm diesel, the volume of 500-ppm LM delivered would likely be 

slightly greater than that which was introduced into the pipeline as a consequence of 

cutting the pipeline interface between the two fuel batches into the 500-ppm LM batch. 

This small increase in 500-ppm LM volume would be acceptable. 

Product transfer documents (PTDs) for 500-ppm LM diesel would be required to 

indicate that the fuel must be distributed in compliance with the approved compliance 

assurance plan. Entities in the distribution chain for 500-ppm LM diesel fuel would be 

required to keep records on the volumes of the 500-ppm that they receive from and 

deliver to each other entity. Such entities would also be required to keep records on how 

the fuel was transported and segregated. We would typically expect that the volumes of 

500-ppm LM delivered would be equal to or less than those received unless shipment by

pipeline occurred. Some minimal increase in 500-ppm LM volume would be acceptable 

due to differences in temperature between when the shipped and received volumes were 

measured and interface cuts during shipment by pipeline. Entities that handle 500-ppm 

LM would be required to calculate a balance of 500-ppm LM received versus 

delivered/used on an annual basis. If the volume of fuel delivered/dispensed is greater 

than that received, EPA would expect that the records would indicate the cause. EPA 

requests comment on whether it is appropriate to set an upper limit on the potential 

volume increase due to pipeline shipment and temperature swell, and if 2 percent would 

be an appropriate upper limit. If an entity’s evaluation of their receipts and deliveries of 

500-ppm LM fuel indicated noncompliance with the product segregation requirements, 
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the custodian would be required to notify EPA. All entities in the 500-ppm LM 

distribution chain would be required to maintain the specified records for 5 years and 

provide them to EPA upon request.

C. Consideration of Extending the Diesel Transmix Provisions to Include the 

Northeast Mid-Atlantic Area

The nonroad diesel rule specified that the small diesel refiner, credit, and transmix 

provisions would not apply in the Northeast Mid-Atlantic (NEMA) area. Hence, all LM 

diesel fuel shipped from refineries, transmix processors, and importers for use in the 

NEMA Area must meet a 15-ppm sulfur standard beginning June 1, 2012 when the 15-

ppm standard becomes effective for large refiners and importers.21 This approach 

allowed the NEMA area to be exempted from fuel marker provisions that are a 

component of the compliance assurance provisions associated with the small diesel 

refiner, credit, and transmix provisions. As discussed previously a significant factor in 

the decision made in the nonroad diesel rule to exclude the NEMA from the diesel 

transmix provisions was our assessment that the heating oil market would provide a 

sufficient outlet for transmix distillate product in this area. Since the publication of the 

nonroad diesel rule in 2004, a number of states in the NEMA area have moved towards 

implementing a 15-ppm sulfur standard for heating oil. A significant fraction of heating 

oil in the area will be subject to a 15-ppm sulfur standard beginning in 2012, and it is 

likely that other states will adopt a 15-ppm sulfur standard for heating oil in the following 

years. 

 

21 LM diesel fuel in terminals located in the NEMA area is subject to a 15-ppm sulfur standard beginning 

August 1, 2012. LM diesel fuel at retailers and wholesale purchaser consumers must meet a 15-ppm sulfur 

standard beginning October 1, 2012. 
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Transmix processors and other fuel distributors in the NEMA area stated that they

were concerned that the changing state heating oil specifications would impact their 

ability to market transmix distillate product beginning in 2012 and increasingly over 

time. They requested that EPA extend the 500-ppm LM flexibility to the NEMA area by

2012 to lessen the impact on the fuel distribution system of complying with more 

stringent federal and state distillate sulfur standards. They stated that the enforcement 

mechanisms proposed above for use outside of the NEMA area after 2014 could apply

equally well within the NEMA area beginning in 2012. They also stated that extending 

the proposed flexibility to inside the NEMA would not have an adverse environmental 

impact because of the potential to defer significant additional transportation emissions to 

the more distant C3 marine market.

The proposed provisions that would allow 500-ppm LM from transmix to be used 

outside of the NEMA area after 2014 would reinstate a flexibility that was withdrawn by

the C3 marine final rule. Allowing 500-ppm LM to be used inside the NEMA area would 

provide more flexibility than was previously included in EPA’s diesel program. We 

believe that extending the 500-ppm transmix flexibility to include the NEMA area will

reduce distribution costs for their distillate product from transmix processors. 

Consequently, we are requesting comment on applying the proposed 500-ppm LM 

transmix provisions discussed above to the NEMA area beginning June 2012. 22 Given 

the current transition in the NEMA area to the use of 15-ppm sulfur heating oil, it would 

be most useful to industry if the proposed flexibility could become effective as soon as 

possible. 

 

22 Prior to 2014, parties outside of the NEMA area who distribute 500-ppm LM would be covered by the 

existing compliance assurance requirements.
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Similar to our analysis for outside of the NEMA area, our analysis of the potential 

environmental consequences of extending the diesel transmix flexibility to include the 

NEMA area indicates the effect on emissions would be neutral or positive. We also agree 

that the compliance assurance requirements that we are proposing for outside of the 

NEMA area could be applied within the NEMA area. A substantial fraction of the 

transmix processing industry markets fuel within the NEMA area. Thus, the potential 

cost reduction to industry and additional time to prepare for a transition to other markets 

for transmix distillate product that would be afforded by an extension of the proposed 

provisions to the NEMA would be significant. 

The implementation of the 1,000-ppm sulfur C3 marine fuel requirements in 2014 

would provide another outlet for transmix distillate product in the NEMA area to replace 

the disappearing above-15-ppm sulfur heating oil market. We request comment on 

whether, if we were to extend the 500-ppm LM transmix flexibility to inside the NEMA 

area, such an extension should be limited to the time period until the C3 marine fuel 

requirements becomes effective.

VIII. Statutory and Executive Order Reviews 

A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: 

Improving Regulation and Regulatory Review

Under Executive Order 12866 (58 CFR 51735 (October 4, 1993), this action is a 

“significant regulatory action.” Accordingly, EPA submitted this action to the Office of 

Management and Budget (OMB) for review under Executive Orders 12866 and 13563 

(76 FR 3821 (January 21, 2011) and any changes made in response to OMB 

recommendations have been documented in the docket for this action.

B. Paperwork Reduction Act 
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The information collection requirements in this notice of proposed rulemaking 

and direct final 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 Request (ICR) document prepared by EPA related to the amended 

heating oil definition has been assigned EPA ICR number 2462.01 and the ICR document 

prepared by EPA for diesel fuel produced by transmix producers has been assigned EPA 

ICR number 2463.01. Supporting statements for these proposed ICRs have been placed 

in the docket. The proposed information collections are described in the following 

paragraphs. 

This action contains recordkeeping and reporting (registration and product 

transfer documentation) that may affect parties who produce or import renewable fuels 

subject to the revised definition of heating oil. EPA expects that very few parties will be 

subject to additional recordkeeping and reporting. We estimate that 11 parties (i.e., RIN 

generators, consisting of up to 10 producers and one importer) may be subject to the 

proposed information collection. We estimate an annual reporting burden of 21 hours per 

respondent and an annual recordkeeping burden of 24 hours, yielding a total per 

respondent burden of 45 hours. 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 the 

instructions; develop, acquire, install, and utilize technology and systems for the purpose 

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 
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be able to respond to a collection of information; search data sources; complete and 

review the collection of information; and transit or otherwise disclose the information. 

Burden is as defined at 5 CFR § 1320.3(b). 

This action also contains provisions related to diesel fuel that is produced by

transmix processors. We have proposed reporting requirements that would apply to 

transmix processors (all of whom are refiners) and other parties (such as carriers or 

distributors) in the distribution chain who handle diesel fuel produced by transmix 

producers. The collected data will permit EPA to: (1) Process compliance plans from 

transmix producers; and (2) Ensure that diesel fuel made from transmix meets the 

standards required under the regulations at 40 CFR Part 80, and that the associated 

benefits to human health and the environment are realized. We estimate that 25 transmix 

processors and 150 other parties may be subject to the proposed information collection. 

We estimate an annual reporting burden of 28 hours per transmix processor (respondent) 

and eight hours per other party (respondent); considering all respondents (transmix 

producers and other parties) who would be subject to the proposed information 

collection, the annual reporting burden, per respondent, would be 11 hours. 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 the instructions; develop, acquire, install, and utilize 

technology and systems for the purpose 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 
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information; search data sources; complete and review the collection of information; and 

transit or otherwise disclose the information. Burden is as defined at 5 CFR § 1320.3(b). 

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 in 40 CFR are listed in 40 CFR part 9. 

To comment on the Agency’s need for this information, the accuracy of the 

provided burden estimates, and any suggested methods for minimizing respondent 

burden, EPA has established a public docket for this rule, which includes the ICRs 

described above, under Docket ID number EPA-HQ-OAR-2012-0223. Submit any

comments related to the ICR to EPA and OMB. See the ADDRESSES section at the 

beginning of this notice for where to submit comments to EPA. Send comments to OMB 

at the Office of Information and Regulatory Affairs, Office of Management and Budget, 

725 17th Street, NW, Washington, DC 20503, Attention: Desk Office for EPA. Since 

OMB is required to make a decision concerning the ICR between 30 and 60 days after 

[Insert date of publication in the Federal Register.], a comment to OMB is best 

assured of having its full effect if OMB receives it by [Insert date 30 days after 

publication in the Federal Register.]. 

C. Regulatory Flexibility Act

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 
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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; (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.

After considering the economic impacts of this action on small entities, I certify

that this proposed rule will not have a significant economic impact on a substantial 

number of small entities. This proposed rule will not impose any new requirements on 

small entities. The relatively minor corrections and modifications this proposed rule 

makes to the final RFS2 regulations do not impact small entities. The proposed 

amendments to the diesel transmix provisions would lessen the regulatory burden on all 

affected transmix processors and provide a source of lower cost locomotive and marine 

diesel fuel to consumers. We continue to be interested in the potential impacts of the rule 

on small entities and welcome comments on issues related to such impacts.

D. Unfunded Mandates Reform Act 

This proposed rule does not contain a Federal mandate that may result in 

expenditures of $100 million or more for State, local, and tribal governments, in the 

aggregate, or the private sector in any one year. We have determined that this action will 
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not result in expenditures of $100 million or more for the above parties and thus, this rule 

is not subject to the requirements of sections 202 or 205 of UMRA.

This proposed rule is also not subject to the requirements of section 203 of 

UMRA because it contains no regulatory requirements that might significantly or 

uniquely affect small governments. It only applies to gasoline, diesel, and renewable fuel 

producers, importers, distributors and marketers and makes relatively minor corrections 

and modifications to the RFS2 and diesel sulfur regulations.

E. Executive Order 13132 (Federalism) 

This action 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. This action only applies to gasoline, 

diesel, and renewable fuel producers, importers, distributors and marketers and makes 

relatively minor corrections and modifications to the RFS2 and diesel sulfur regulations. 

Thus, Executive Order 13132 does not apply to this action.

In the spirit of Executive Order 13132, and consistent with EPA policy to promote 

communications between EPA and State and local governments, EPA specifically solicits 

comment on this proposed action from State and local officials.

F. Executive Order 13175 (Consultation and Coordination With Indian Tribal 

Governments)

This proposed rule does not have tribal implications, as specified in Executive 

Order 13175 (65 FR 67249 (November 9, 2000)). It applies to gasoline, diesel, and 

renewable fuel producers, importers, distributors and marketers. This action makes 
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relatively minor corrections and modifications to the RFS and diesel sulfur regulations, 

and does not impose any enforceable duties on communities of Indian tribal 

governments. Thus, Executive Order 13175 does not apply to this action. Nonetheless, 

EPA specifically solicits additional comment on this proposed action from tribal officials.

G. Executive Order 13045: Protection of Children from Environmental Health Risks and 

Safety Risks

EPA interprets EO 13045 (62 FR 19885 (April 23, 1997)) as applying only to 

those regulatory actions that concern health or safety risks, such that the analysis required 

under section 5–501 of the EO has the potential to influence the regulation. This action is 

not subject to EO 13045 because it does not establish an environmental standard intended 

to mitigate health or safety risks.

H. Executive Order 13211: Actions Concerning Regulations That Significantly 

Affect Energy Supply, Distribution, or Use 

This action is not a “significant energy action” as defined in Executive Order 

13211 (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. We have concluded that this 

rule is not likely to have adverse energy effects because we do not anticipate adverse 

energy effects related to the additional generation of RINs for home heating oil or the 

reduced regulatory burden for transmix processors.

I. National Technology Transfer and Advancement Act

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 
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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. NTTAA directs EPA to provide Congress, through OMB, explanations when the 

Agency decides not to use available and applicable voluntary consensus standards.

This action does not involve technical standards. Therefore, EPA did not consider 

the use of any voluntary consensus standards.

J. Executive Order 12898: Federal Actions To Address Environmental Justice in 

Minority Populations and Low-Income Populations 

Executive Order (EO) 12898 (59 FR 7629 (February 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 proposed 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. These amendments would not relax the control measures on sources 

regulated by the RFS regulations and therefore would not cause emissions increases from 

these sources. We have determined that proposed amendments to the diesel transmix 
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Regulation of Fuels and Fuel Additives: Modifications to Renewable Fuel Standard 

and Diesel Sulfur Programs -Proposal

provisions under the diesel sulfur program would have a neutral or positive 

impact on diesel vehicle emissions.23 

IX. Statutory Provisions and Legal Authority 

Statutory authority for the rule finalized today can be found in section 211 of the 

Clean Air Act, 42 U.S.C. 7545. Additional support for the procedural and compliance 

related aspects of today's rule, including the recordkeeping requirements, come from 

Sections 114, 208, and 301(a) of the Clean Air Act, 42 U.S.C. 7414, 7542, and 7601(a). 

List of Subjects in 40 CFR Part 80 

Environmental protection, Administrative practice and procedure, Agriculture, 

Air pollution control, Confidential business information, Diesel Fuel, Transmix, Energy, 

Forest and Forest Products, Fuel additives, Gasoline, Imports, Labeling, Motor vehicle 

pollution, Penalties, Petroleum, Reporting and recordkeeping requirements.

Dated: ____________________________ 

_____________________________________

Lisa P. Jackson, Administrator

 

23 See section VI.A. of today’s notice for details of this analysis.