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Page **1** of **47 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**  **Program s** 
**AGENCY** : Environmental Protection Agency (EPA). **ACTION** : Direct Final Rule. **EXECUTIVE SUMMARY:**  EPA is issuing this direct final rule to amend the definition of heating oil in 40 CFR § 80.1401 in the Renewable Fuel S tandard ( “ RFS ” or “RFS2” ) program under section 211(o) of the Clean Air Act . This amendment will expand the scope of renewable fuels that can generate Renewable Identification Numbers ( RI Ns ) as heating oil to include fuel oil produced from qualifying renewable biomass that will 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 h eat, power, or other functions will not be included in the amended definition. Producers or impo rters of fuel oil that meets the amended definition of heating oil will be allowed to generate RI Ns , provid ed that the fuel oil meets the other requirements sp ecified in the RFS regulation s . This amendment will not modify or limit fuel included in the current definition of heating oil at 40 CFR § 80.2(ccc)
. EPA is also amend ing the requirements under EPA’s diesel sul f ur program related to the sul f ur content of locomotive and marine diesel fuel produced b y transmix processors
. These amendments will allow locomotive and marine***E.O. 12866 Review

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Page **2** of **47** diesel fuel produced b y transmix processors to meet a maximum 500ppm sulfur standard provided that; the fuel is used in older technology l ocomotive and marine engines that do not require 15ppm sulfur diesel fuel, the fuel is used outside of the Northeast Mid
Atlantic Area, and the fuel is kept segregated from other fuel. These amendments will provide significant regulatory relief for transm ix processors while having a neutral or net positive environmental impact. **DATES:** This rule is effective on [ **insert date 60**  **days after the**  **date of publication in the Federal Register**  ] without further notice, unless EPA receives adverse comment or a public hearing request by [ **insert date 30**  **days after the**  **date of publication in the Federal Register**  ]
. If EPA receives a timely adverse comment or a hearing request on the rule or an y specific portion of this rule , we will publish a withdrawal of the ru le or a specific portion of the rule in the Federal Register informing the public that the rule or portions of the rule with adverse comment will not take effect. 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 day s prior to the hearing. **ADDRESSES:** Submit your comments, identified by Docket ID No. EPA
- HQ
- OAR
2012
- 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 EPA
HQ
- OAR
- 2012
- 0223
.

• Fax: 731
- 214
- 4051
. Mail: Air and Radiation Docket, Docket No. EPA
- HQ
- OAR
2012
- 0223 , Environmental Protection Agency , Mailcode: 6406J, 1200 Pennsylvania Ave nue , NW, Washington, DC 20460.***E.O. 12866 Review

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Page **3** of **47** • 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 onl y accepted 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 an y personal information provided, unless the comment includes information claimed to be Confidential Business Information (CBI) or other information whose disclosure is restricted b y 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 “ano ny

mous access” sy stem, 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 directl y to EPA without going through www.regulations.gov your e - mail address will b e 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 o f 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, an y form of encry ption, and be free of any

defects or viruses. For***E.O. 12866 Review

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Page **4** of **47** 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 other information whose disclosure is restricted b y statute )
. Certain other material, such as cop yri ghted 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 Informat ion 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 holiday s. 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: 6406J, U.S. Environmental Protection Agency , 1200 Penns yl vania Avenue, NW, 20460; te lephone number: ( 202 ) 343
- 9 949 ; fax number: ( 202 ) 343
- 2800 ; email address: knapp.kristien @epa.gov
. **SUPPLEMENTARY INFORMATION** : **I. Why is EPA**  **Issuing a Direct Final**  **Rule ?**  EPA is publishing this rule without a prior proposed rule because this may be viewed as a noncontroversial action that would no t receive adverse comment
. However, in the “ Proposed Rules ” section of today ’s Federal Register , we are publishing a separate document that will serve as the proposal to adopt the provisions in this direct final rule if***E.O. 12866 Review

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Page **5** of **47** adverse comments or a hearing request are filed on the rule or an y portion of the rule
. 1 We will not institute a second comment period on this action. Any parties interested in commenting must do so at th is time. For further information about commenting on this rule, see the ADDRESSES section of this document
. **II .**  **Does This Action Apply to Me?** 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 b y this action include: **Category NAICS Codes**  **a SIC Codes**  **b 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. a North American Industry Classification S ys tem (NAI CS). b Standard Industrial Classification (SI C) s ys tem code.

1 The proposed rule contains all aspects of this direct final rule and seeks comments. Additionally, this document also requests comments on one issue that is not included in the direct final rule: whether the am endments to the requirements for locomotive and marine diesel fuel produced by transmix processors should be extended to fuel used inside the Northeast Mid
- Atlantic Area.***E.O. 12866 Review

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Page **6** of **47** This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely

to be regulated b y this action. This table lists the types of entities that EPA is now aware could be potentially regulated by

this action. Other ty

pes of entities not listed in the table coul d also be regulated. To determine whether your entity is regulated b y 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 yo u have an y question regarding applicability of this action to a particular entity , consult the person in the preceding “FOR FURTHER I NFORMATION CONTACT” section above. **III .**  **What Should I Consider as I Prepare My Comments for EPA?** A. Submitting information claimed as CBI

. Do not submi t 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 yo u 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 cop y 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:

• Id entify

the rulemaking by

docket number and other identifying information (subject heading, Federal Register date and page number).***E.O. 12866 Review

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Page **7** of **47** • 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 an y assumptions and provide an y technical information and/or data that you used.

• If you estimate potential costs or burdens, explain how yo u arrived at your estimate in sufficient detail to allow for it to be reproduced.

• Provide specific examples to illustrate your concerns, and suggest alternatives.

• Explain your views as clearl y 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. **I V.**  **Am end**  **ed Definition of Heating Oil under the Re**  **newable Fuel Standard Program**  EPA is issuing a direct final 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 will expand the scope of renewable fuels that can generate Renewable Identification Numbers ( “ RINs ” ) as home heating oil to include fuel oil that will be used to generate heat to warm buildings or other***E.O. 12866 Review

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Page **8** of **47** facilities where people live, work, recreate, or conduct other activities. This rule will allow producers or importers of fuel oil that meets the amended definition of heating oil to generate RINs, provid ed that other requirements specified in the regulation s are met . F uel oil s used to generate process heat, power, or other functions will not be approved for RI N generation under the amended definition of heating oil , as fuel oils used for these purposes fall outside the boundaries of the RFS2 program as defined b y Congress i n the Energy Independence and Security Act of 2007
. The amendment will not modify or limit fuel included in the current definition of heating oil at 40 CFR § 80.2(ccc)
. The RFS 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 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 b y producers of certain renewable fuel that was not used in transportation fuel, called “additional renewable fuel.” 2 Additional renewable fuel is defi ned 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. 3 In essence, additional renewable fuel has to meet all of the requirements applicable to qualify it as renewable fuel under the

2 “EISA changed the definition of ‘renewable fuel’ to require that it be made from feedstock s 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 St andard Program, 75 FR 14670, 14681 (March 26, 2010). 3 See CAA sections 211(o)(1)(A) and (o)(5)(E).***E.O. 12866 Review

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Page **9** of **47** regulations, with the only difference being that it is blended into or is home heating o il or jet fuel
. This does not change the volume requirements of the statute itself, however this can provide an important additional av enue 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 th e category

of “home heating oil.” EPA determined that this term was ambiguous, and defined it b y incorporating the existing definition of heating oil at 40 CFR § 80.2(ccc). EPA stated that: EI SA uses the term “ home heating oil ” in the definition of “ addit ional 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 ty pe that can be used in homes. We note that the term ‘home heating oil’ is ty picall y used i n industry

in the latter manner, to refer to a t ype of fuel, rather than a particular use of it, and the term is ty picall y used interchangeabl y in industry with heating oil, heating fuel, home heating fuel, and other terms depending on the region and marke t. We believe this broad interpretation based on ty pical industry

usage best serves the goals and purposes of the statute. If EPA interpreted the term to apply onl y 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 sufficientl y difficult and potentially

expensive so as to discourage the generation of RINs for renewable fuels use d 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 ty picall y generated under the RFS program) whether the fuel would ultimately

be eligible to generate RINs. Congress eliminated the complexity

with regards to non
- road appl ications 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 ty

pe of complexity

in the heating oil context. Thus, under today ’s regulations, RI Ns may be generated for renewable fuel used as “ heating oil, ” as defined in existing EPA regulations at § 80.2(ccc). In***E.O. 12866 Review

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Page **10** of **47** addition to simplifying implementation and administration of the Act, this interpretation will best realize the intent of EI SA to reduce or replace the use of fossil fuels. 4 The existing definition of heating oil at 40 CFR § 80.2(ccc) means “ an y #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 j et fuel, kerosene, or MVNRLM diesel fuel. ” The existing definition of non
- petroleum diesel at 40 CFR § 80.2 (sss) means a diesel fuel that contains at least 80 percent mono
- alkyl esters of long chain fatt y acids derived from vegetable oils or animal fat s. Thus, in order to generate RI Ns for 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 req uirements 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 qualifyingr enewable 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 ty pes defined in 40 CFR § 80.2(ccc) disqualifies certain ty pes 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 revising the definition of heating oil in the RFS2 program to expand the scope of fuels that can generate RINs as heating oil.

4 75 FR 14670, 14687 (March 26, 2010).***E.O. 12866 Review

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Page **11** of **47** EPA is revising the definition such that RI Ns also may

be generated by

renewable fuel that is fuel oil and is used to heat interior spaces of homes or buildings to contr ol ambient climate for human comfort. This will not include fuel oils used to generate process heat, power, or other functions. The fuel oil must be used to generate heat to warm buildings or other facilities where people live, work, recreate, or cond uct other activities. We are amending 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 currentl y included in the definition of heating oil at 40 CFR § 80.2(ccc ), and will not modify or limit the fuel included in the current definition. 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 ter m home heating oil is usually used in the industry

to refer to one ty

pe of fuel, and not to a specific use for the fuel. Given this more general usage of the term, and the practical barriers that would have arisen 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 t ypes of fuel oils that are t ypically used to heat homes. EPA determined this was a reasonable interpretation of an ambiguous statutory provisi on that simplified implementation and administration of the Act and promoted achievement of the goals of the RFS program.***E.O. 12866 Review

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Page **12** of **47** In the RFS2 rulemaking , EPA focused on the kinds of fuel oils that can be used to heat homes. The expansion of the definition adopted in this rulemaking will address two ty pes of fuel oils not included in the current definition of heating oil. First, the amended definition will include additional fuel oils that are actuall y used to heat homes, even if they do not meet the curre nt definition of heating oil. This is clearly within the scope of the statutory

provision for home heating oil. Second, the amended definition will include fuel oils that are used to heat facilities other than homes to control ambient climate for human c omfort . Under the current definition of heating oil, a fuel oil meets the definition based on its phy sical properties and its use in furnaces, boilers, stationary diesel engines, and similar applications, not whether it is actually used to heat a home. T he basic decision made in the RFS2 final rulemaking was to allow RIN generation for the group of fuel oils that are ty picall y 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 ty pe that is ty

pically used for and can be used for that purpose. 5 Inthe amended definition, qualifying fuel oils will be used for heating places where people live, work, or recreate, and not just their homes. It focuses more on what is getting heated

– p eople

– and not where the people are located. EPA believes this is a reasonable interpretation of the phrase “home heat ing 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. Itgives reasonable meaning to the term home heating oil , by limiting th e

5 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.”***E.O. 12866 Review

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Page **1 3**  of **47** additional fuel oils to fuel oils when used for heatin g of facilities that people will occup y, and excluding fuel oil s when used for other purposes such as generation of energy used in the manufacture of products. It also focus es on the aspect of home that is important here

– th e heating of people

– r ecognizing 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 b y facilitating the generation of RINs for renewable fuels that reduce emissions of greenhouse gases compared to fossil fuels. For example, EPA has received information from [ ] that such an expanded definition of heating oil would result in nearl y immediate production of 3.5 millio n gallons from existing facilities, with an additional projected production of up to 45 million gallons per ye ar within 24 months following regulatory action. **V. Lifecycle Greenhouse Gas Assessment of the Amended Definition of Heating Oil** EPA has also e valuated whether an y revisions will need to be made to Table 1 to 40 CFR § 80. 1426 that list s the applicable D c odes for each fuel pathway for use in g enerating 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 will co ntinue to be appropriate and will 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 pathway s meet the GHG reduction thr esholds 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***E.O. 12866 Review

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Page **14** of **47** facilities and volumes), a 50% reduction for biomass
- based diesel or advanced b iofuel, and a 60% reduction for cellulosic biofuel. For the final RFS2 rule, EPA assessed the lifecycle greenhouse gas emissions of multiple renewable fuel pathway s and classified pathway s based on these GHG thresholds. 6 Inaddition, EPA has added severa l pathway s since the final rule was published. The fuel pathway s consist of fuel ty pe, feedstock, and production process requirements
. GHG emissions are assessed at all points throughout the lifecycle pathway . For instance, emissions associated with s owing 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 th e transportation fuel being replaced. The lifecycle GHG emissions determination is one factor used to determine compliance with the regulations. There are currently

several fuel pathway s that list heating oil as a fuel t ype with various ty pes of feedstock and production process es used, qualifying the heating oil pathway s as either biomass
- based diesel, advanced, or cellulosic. The determinations for these different pathway s were based on the current definition of heating oil. The pathway s also include se veral t ypes 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. Convert ing biomass feedstocks into heating oil products requires starting with trigl ycerides (if oils are used as feedstock) or hemi
- cellulose, cellulose, lignin, starches,

6 See Table 1 to 40 CFR § 80. 1426.***E.O. 12866 Review

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Page **15** of **47** etc . (if solid biomass feedstock is used) and through either a biochemical or thermochemic al process converting those molecules into a fuel product. The existing heating oil pathway s were based on the current definition of the fuel, and were based on a 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 pathway s. The main difference between the current definition of heating oil, which refers to #1, #2, or non
- petroleum diesel blend , and the expanded definition adopted in this rulemaking is that the expanded definition will include heavier t ypes of fuel oil with larger molecules. Based on the ty pe of conversion process, producing these heavier fuel oil products versus the #1, #2, or non
- petroleum diesel blend will 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 product s. In this case producing a heavier fuel oil product will 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 t ype of process the compounds in the biomass are changed into a set of intermediary products , such as hydrogen ( H ) and carbon monoxide ( CO )
. 7 These compounds are then either cataly tically 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 t ype of fuel that is then produced from these

7 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.***E.O. 12866 Review

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Page **16** of **47** intermediary

compounds. The ty

pe of fuel could affect the t yp e of catal ys t or biological process used to change the intermediary compounds into the fuel product , but based on EPA calculations and assessments developed as part of [ ], this will 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 b elieves the GHG emissions associated with producing the fuel oil included in the expanded definition will 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 c ycl e analy sis for heating oil will support applying the existing pathway s for fuel oil in the RFS2 regulations to the expanded definition of heating oil
. **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 variet y 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 sy stem. EPA addressed this in the RSF2 rulemaking by defining home heating oil as a t ype 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 including the characteristics of the fuel in its d efinition in 40 CFR § 80.1401 was adequate to retain a close tie to the concept underlying home heating oil.***E.O. 12866 Review

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Page **17** of **47** The expansion of the definition raises this same issue but in a more significant way . While the expansion of the definition includes some limited phy sical characteristics that fuels oils will 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 co ntrol 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 requiring that the renewable fuel producer or impo rter 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 recogni zes 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 ty pe of fuel oil used to heat homes. In addition, the value of these heating oils generall y 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 will not be the ph ys ical characteristics of the fuel oil but instead its actual usage for heating for the purposes of climate control for human comfort
. In order to verify that the fuel oils are actuall y used to generate heat for climate control purposes, EPA is adopting the following registration, recordkeeping , product transfer document (PTD) and reporting requirements
. T hese re quirements will not apply to fuels qualifying under the existing 40 CFR § 80.2(ccc) of the regulations
. If RINs are***E.O. 12866 Review

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Page **18** of **47** generated for fuel oils under the expansion of the scope of home heating oil in today ’s rule, and those fuel oils are not actuall y 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. **1 .**  **Registration** For the purpose of registration, EPA is requiring producers of the expanded fuel oil ty pes 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 will 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 will equate to the facility’s permitted capacity or actual peak capacit y as defined in 40 CFR § 80. 1401 of the rule that is currentl y used b y EPA to establish a facilit y’s baseline volume for registration purposes. EPA also recognizes that it will not be prac tical for program implementation 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 g allon of fuel oil produced up to the facility ’s permitted capacity

or actual peak capacity . Therefore, EPA is allowing the producer of the expanded fuel oil ty

pes to establish their facility ’s baseline volume in the same manner as all other producers unde r the RFS program, e.g. , based on the facility ’s permitted capacity

or actual peak capacity . However, we are also adopting additional***E.O. 12866 Review

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Page **19** of **47** 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 requiring submis sions 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 ty pes must have contra cts in place for all specified quantities of fuel oil that their client (s) purchase in order to generate RINs. A dditional ly , we are adopting new recordkeeping , product transfer documents ( PTD ) and reporting requirements discussed below that will be used a s a means for verification of the remaining gallons up to the facilit y’s registered capacity . The registration requirements
are detailed in the registration section in 40 CFR § 80.1450(b)(1)(ix). **2 .**  **Recordkeeping , Product Transfer Document**  **s and Reporting**  For the purpose of continued verification after registration, EPA is adopting additional requirements for recordkeeping in 40 CFR § § 80.1454(b)(6) and (7) , PTD s in § 80.1453(d) , and reporting requirements in § 80.1451(b)(1)(ii)(T) for the expanded fuel
o il ty pes . The recordkeeping , PTD and reporting requirements will ensure that the expanded fuel oil ty pes that are used to generate RINs are actually used in a qualifying application. The regulations will 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 heat ing interior spaces of homes or buildings to control ambient climate for human comfort . For instance, the additional recordkeeping requirements will stipulate that the producer of fuel oils maintain documents associated***E.O. 12866 Review

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Page **20** of **47** 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 heat ing 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 transferr ed from the renewable fuel producer to the end user with RI Ns 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 ty pes they register for RIN generation. EPA believes the producer’s maintenance of these records will 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 must contain the statement: “This volume of renewable fuel is designated and intend ed to be used to heat interior spaces of homes or buildings. Do NOT use for an y 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 w ere generated for that fuel oil must be immediately retired by

the party who owns the RI

Ns. If the fuel is used for some other non
- qualifying purpose, and RINs are not retired, then***E.O. 12866 Review

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Page **21** of **47** both the producer and end user of that fuel are liable for violations of the RFS2 regulations and the CAA
. The additional reporting requirements will 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 of 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 gallon s sold by the producers of fuel oils as well as the total gallons produced or sold that did not qualify for RIN generation will enable EPA to verify that the producers are producing and selling RI N
- generating fuel oil that falls within their allowable volume that is registered under the program and that it is used in a qualified application
. **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 b y renewable fuel producers and importers. We are explicitly clarifying a requirement that alway s 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 generall y applicable requirement

– not specific to fuel meeting the definition of home heating oil. See amended section 80.1426(a)(1)(iii). **VI I**  **. Am**  **endments Related to Transmix** ***E.O. 12866 Review

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Page **22** of **47** The final regulations for the nonroad diesel program were published in the Federal Register on June 24, 2004
. 8 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
. 9 This action amends the requirements for diesel fu el produced b y transmix processors. Below is a table listing the provisions that we are amend ing . The following sections provide a discussion of these amendments
. **Proposed Amendments to the Diesel Program**  Section **Description**

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 entit y ma y deliver or receive custody of past June 1, 2014.

**A. Exten**  **sion of**  **the Diesel Transmix Provisions Outside of the Northeast**  **Mid -**  **Atlantic Area and Alaska Beyond 2014**

8 69 FR 38958 (June 24, 2004). 9 75 FR 22896 (April 30, 2010).***E.O. 12866 Review

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Page **23** of **47** Batches of different fuel products commonly abut each other as they

are shipped in sequence b y 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 ty

pically is gathered for reprocessing at the end of the fuel distribution sy stem 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 ty pically make refinery reprocessing an unattractive option. Thus, transmix processers provide a valuable service in maintaining an efficient fuel distribution sy stem. Transmix processing facilities handle very low volumes of fuel compared to a refinery and hence are limited to the use of a simple distillation tower and additional blendstocks to manufacture finished fuels. There is currentl y no desulfurization equipment which has been demonstrated to be suitable for application at a transmix processor facility . Some products shipped b y 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 product s in multi
- product pipelines and consequently in transmix constrains the ability of transmix processors to produce a low sulfur distillate product. The engine emission 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
. 10 Accordingl y, the nonroad rule required that nonroad, locomotive and marine (NRLM) diesel fuel must me et a 15
- ppm sulfur standard in

10 Control of Emissions of Air Pollution from Nonroad Diesel Engines and Fuel, Final Rule, 69 FR 38958 ( June 24, 2004 )
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Page **24** of **47** parallel with the introduction of new sulfur
- sensitive emission control technology to the in
- use fleet . Beginning June 1, 2014, the nonroad diesel rule required that all NRLM diesel fuel produced b y 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 eng ines 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, loco motive, and marine diesel engines can onl y operate on 15
- ppm diesel fuel. The 500
- ppm LM diesel transmix provisions were limited 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. 11 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 o f the diesel sulfur program. 12

11 The NEMA area is defined in 40 CFR § 80.510(g)(1) as follow s: (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 Chautau qua, 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 eastern
mo st counties of W est Virginia (Jefferson, Berkeley, Morgan, Hampshire, Mineral, Hardy, Grant, and Pendleton). 12 This included the now
- com pleted 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 p rovisions for LM diesel fuel that will be completed in 2014.***E.O. 12866 Review

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Page **25** of **47** 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 20 14 could be incorporated into existing diesel program provisions. 13 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 dies el 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 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 die sel 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. Consequentl y, we finalized the approach in the C3 marine final rule that was published on April 30, 2010. 14 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

13 Control of Emissions From New Marine Compression
- Ignition Engines at or Above 30 Liters per Cylinder; Proposed Rule, 74 FR 44442 ( August 28, 2009 )
. 14 Control of Emissions From New Marine Compre ssion
- Ignition Engines at or Above 30 Liters per Cylinder; Final Rule, 75 FR 22896 ( April 30, 2010 )
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Page **26** of **47** LM transmix flexibility
. 15 A parallel petition for judicial review was filed with the U.S. Court of Appeals, D.C. Circuit. 16 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 f rom transmix processors and other stakeholders in the fuel distribution sy stem during our consideration of the petition, EPA believes that it would be appropriate to extend the 500
- ppm diesel transmix flexibility beyond 2014. A settlement agreement has be en finalized between EPA and the petitioners under which EPA would propose regulatory changes to reintroduce the 500
- ppm LM transmix diesel flexibility for legacy

L M equipment. 17 The amendments to the diesel transmix provisions contained in today ’s action are in accord with the settlement agreement. Our anal ys is indicates that extending the 500
- ppm LM flexibility beyond 2014 would have a neutral or net beneficial effect on overall vehicle emissions. The use of 500
- ppm LM from transmix would be limited to o lder technology engines that do not possess sulfur
- sensitive emissions control technology . We believe that the 500
- ppm LM

15 “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 Ad ministrator 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. 16 Petition for Review, United States Court of Appeals for the District of Columbia Circuit, Petitioners , 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, Case 10
- 1146, Document 1252640, Filed 06/29/2010. 17 Notice of Proposed Settlement Agreement; Request for Public Comment, 76 FR 56194 (Sep tem ber 12, 2011)
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Page **27** of **47** segregation and other associated requirements would prevent misfueling of sulfur
sensitive engines. To evaluate the environmental co nsequences 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 C ategory 3 (C3) marine market which might be deferred b y 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, ext ending the diesel transmix provisions would result in a reduction in nitrogen oxides (NO X ), volatile organic compounds ( VOC s) , carbon monoxide ( CO ) , as well as PM emissions that would otherwise be associated with transporting transmix distillate product to the more distant C3 market. 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. 18 We estimate that approximately 500 million gallons of distillate fuel per ye ar is produced from transmix. 19 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 annuall y compared to the use of 15 ppm diesel fuel. 20 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

18 This is based on our review of data on the sulfur levels of transmix distillate product from various transmix processors. 19 Based on information provided by transmix processors, we estimate that approximately 750 million gallons per ye ar of transmix is produced annually and that 2/3 of the transmix
- derived product is distillate fuel and 1/3 is gasoline. 20 Sulfate PM was converted to PM 2.5 to allow a com parison with PM 2.5 from increased fuel transport emissions.***E.O. 12866 Review

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Page **28** of **47** provisions are extended. Also, as the olde r 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 NO X , 220 tons of VOC, and 650 tons of CO annuall y. Based on the above discussion, we believe that the extension of the 500 ppm LM p rovisions beyond 2014 outside the NEMA area would have a neutral or net 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 graduall y disappears due to fleet turnover. **B. Revised**  **Diesel Transmix Provisions*****E.O. 12866 Review

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Page **29** of **47** Industry stakeholders suggested alternative enforcement mechanisms t o support the extended flexibility

which would not necessitate reinstating and expanding the designate
- and
- track and fuel marker provisions that were retired b y 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 equip ment. The compliance assurance provisions that we are u sing to support the extension of the diesel transmix flexibility are similar to those that were used to support the small refiner flexibilities in Alaska during the phase
- in of EPA’s diesel sulfur pr ogram. 21 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 f or 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 th e 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

21 See 40 CFR § 80.554(a) (4).***E.O. 12866 Review

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Page **30** of **47** order to facilitate EPA’s compliance assurance activities. 22 Based on conv ers ations 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. 23 The plan would need to i dentify 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
. As a result, the regulations allow 500
- ppm LM to be shipped b y 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 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 b y pipeline abutting 15
- ppm diesel, the volume of 500
- ppm LM delivered would likel y 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 are 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 are required

22 An entity is defined as any company that takes custody of 500
- ppm LM diesel fuel. 23 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 be tween the transmix processor and the ultimate consumer. However, we understand that as many as 4 separate entities may handle the product betw een the producer and ultimate consumer if it is shipped by pipeline: the tank truck operator to ship the product f r o m the producer to the pipeline, the pipeline operator, the product terminal that receives th e fuel from the pipeline, and another tank truck operator to ship the product to the ultimate consumer from the terminal.***E.O. 12866 Review

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Page **31** of **47** to keep records on the volumes of the 500
- ppm that they receive from and deliver to each other entity . Such entities are also required to keep records on how the fuel was transported and segregated. We would ty pical ly 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 shippe d and received volumes were measured and interface cuts during shipment by pipeline. Entities that handle 500
- ppm LM are 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. If an entity ’s evaluatio n of their receipts and deliveries of 500
- ppm LM fuel indicated noncompliance with the product segregation requirements, the custodian would be required to notify EPA. All entities in the 500
- ppm LM distribution chain are required to maintain the specifie d records for 5 y ears and provide them to EPA upon request. **VI I**  **I . 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.” Accordingl y, 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 an y changes made in response to OMB recommendations have been documented in the docket for this action. B. Paperwork Reduction Act***E.O. 12866 Review

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Page **32** of **47** 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 In formation Co llection Request (ICR) document prepared b y EPA related to the amended heating oil definition has been assigned EPA ICR number 2462.01 and the ICR document prepared b y EPA for diesel fuel produced b y 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 docum entation) 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 b y persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency . This includes the time needed to review the i nstructions; develop, acquire, install, and utilize technology and s ys tems for the purpose of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing way s to
c omply with an y previously

applicable instructions and requirements; train personnel to***E.O. 12866 Review

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Page **33** of **47** 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 informat ion. 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 refin ers) and other parties (such as carriers or distributors) in the distribution chain who handle diesel fuel produced b y transmix producers. The collected data will permit EPA to: ( 1) Process compliance plans from transmix producers; and ( 2) Ensure that d iesel 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 sub ject 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 inform ation to or for a Federal agency . This includes the time needed to review the instructions; develop, acquire, install, and utilize technology

and sy stems for the purpose of collecting, validating, and verifying information, processing and maintaining info rmation, and disclosing and providing information; adjust the existing way s to compl y with any previously

applicable instructions and requirements; train personnel to be able to respond to a collection of***E.O. 12866 Review

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Page **34** of **47** information; search data sources; complete and revi ew 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 dis play s 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 an y suggested meth ods for minimizing respondent burden, EPA has established a public docket for this rule, which includes the I CRs 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** sectio n 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. S ince OMB is required to make a decision concerning the I CR between 30 and 60 day s 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) generall y requires an agency to prepare a regulatory

flexibility

analy sis of any

rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or an y other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial***E.O. 12866 Review

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Page **35** of **47** number of small entities. Small entities include small businesses, small organizations, and small g overnmental 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 cit y, count y, town, school district or special district with a population of less than 50,000; and (3) a small organization that is any not
- for
profit enterprise which is independentl y 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 action will not have a significant economic impact on a substantial number of small entities. This final rule will not impose any new requirements on small entities. The amendments to the diesel transmix provisions would lessen the regulatory burden on all affected tran s mix processors and provide a source of lower cost locomotive and marine diesel fuel to consumers. The relatively minor corrections and modifications this rule do not impact small entities. D. Unfunded Mandates Reform Act This 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 an y one year. We have determined that this action will 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.***E.O. 12866 Review

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Page **36** of **47** This rule is also not subject to the requirements of section 203 of UMRA because it contains no regulatory

requirements that might significantl y 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. Itwill 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 131 32. This action only applies to gasoline, diesel, and renewable fuel producers, importers, distributors and marketers and makes relativel y minor corrections and modifications to the RFS2 and diesel sulfur regulations. Thus, Executive Order 13132 does not apply to this action. F. Executive Order 13175 (Consultation and Coordination W ith Indian Tribal Governments) This rule does not have tribal implications, as specified in Executive Order 13175 (65 FR 67249 (November 9, 2000 ) ). It applies to gasoline, dies el, and renewable fuel producers, importers, distributors and marketers. This action makes relatively minor corrections and modifications to the RFS 2 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. G. Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Risks***E.O. 12866 Review

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Page **37** of **47** EPA interprets EO 13045 (62 FR 19885 ( April 23, 1997 ) ) as appl yi ng only to those regulatory

actions that concern health or safety risks, such that the analy sis 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 est ablish 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 define d 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 Technolo gy 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 will be inconsistent with applicable law or otherwise impractical. Voluntary consensus standards are technical standards ( e.g. , materials specifications, test methods, sampling procedures, and business practices) that are developed or adopted by voluntary

con sensus standards bodies. NTTAA directs EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable voluntary consensus standards.***E.O. 12866 Review

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Page **38** of **47** This action does not involve technical standards. Therefore, EPA did not consider the use of an y 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 (Feb. 16, 1994)) establishes Federa l executive policy

on environmental justice. It s main provision directs Federal agencies, to the greatest extent practicable and permitted b y 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 rule will not have disproportionatel y high an d 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 will not relax the control measures on sources regulated by the RFS regulations and therefore will not cause emissions increases from these
sources. We have determined that proposed amendments to the diesel transmix provisions under the diesel sulfur program would have a neutral or positive impact on diesel veh icle emissions. 24 K. Congressional Review Act The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the Small Business Regulatory

Enforcement Fairness Act of 1996, generall y provides that before a rule may take effect, the agency

promulgating the rule must submit a rule report, which includes a cop y of the rule, to each House of the Congress and to the Comptroller

24 See section VI.A. of today’s notice for details of this analysis.***E.O. 12866 Review

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Page **39** of **47 Regulation of Fuels and Fuel Additives: Modifications to Renewable Fuel Standard** 

**and Diesel Sulfur Program**  **s –**  **Direct Final**

Gener al of the United States. EPA will submit a report containing this rule and other required information to the U.S. Senate, the U.S. House of Representatives, and the Comptroller General of the United States prior to publication of the rule in the Federal R egister
. A major rule cannot take effect until 60 day s after it is published in the Federal Register
. This action is not a ‘‘major rule’’ as defined by 5 U.S.C. 804(2). **I X**  **. Statutory Provisions and Legal Authority** Statutory authorit y 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 Sec tions 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***E.O. 12866 Review

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Page **40** of **47*****E.O. 12866 Review

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Page **41** of **47** For the reasons set forth in the preamble, 40 CFR part 80 is amended as follows: **PART 80**

**— REGULATION OF FUELS AND FUEL ADDITIVES**  1. The authorit y citation for part 80 continues to read as follows: Authority : 42 U.S.C. 7414, 7542, 7545, and 7601(a). **Subpart I**

**— [Amended]**  2
. Section 80.511 is amended by revising paragraphs (b)(4) and (b)(10) to read as follows: **§ 80.511 What are the per**  **- gallon and marker requirements that apply to** 

**NRLM diesel fuel, ECA marine fuel, and heating oil downstream of**  **the refiner or importer?**
* * * * * (b) * * * (4) Except as provided in paragraphs (b)(5) through (8) of this section, the per - gallon sulfur standard of §80.510(c) shall apply to all NRLM diesel fuel beginning August 1, 2014 for all downstream locations other than retail outlets or wholesale purchaser
- consumer facilities, shall apply to all NRLM diesel fuel beginning October 1, 2014 for retail outlets and wholesale purchaser
- consumer facilities, and shall apply to all NRL M diesel fuel beginning December 1, 2014 for all locations. This paragraph (b)(4) does not appl y to LM diesel fuel produced from transmix or interface fuel that is sold or intended for sale in areas other than those listed in §80.510(g)(1) or (g)(2), as p rovided b y §80.513(f). * * * * * (10) For the purposes of this subpart, on an y occasion where a distributor directly dispenses fuel into vehicles or equipment from a mobile facility such as a tanker truck, the distributor shall be treated as a retailer, an d the mobile facility

shall be treated as a retail outlet.
3
. Section 80.513 is amended as follows: a. By

revising the section heading. b. By

revising the introductory text. c. By

revising paragraph (e). d. By

adding a new paragraph (f). **§ 80.513 What provisions apply to facilities that process transmix?**  For purposes of this section, transmix means a mixture of finished fuels, such as pipeline interface, that no longer meets the specifications for a fuel that can be used or sold***E.O. 12866 Review

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Page **42** of **47** without further pr ocessing. This section applies to refineries (or other facilities) that produce diesel fuel from transmix by distillation or other refining processes but do not produce diesel fuel b y processing crude oil. This section only applies to the volume of diese l fuel produced b y s uch a processor using these processes, and does not apply to an y diesel fuel produced b y the blending of blendstocks. For the purposes of this section, pipeline interface means the mixture between different fuels that abut each other d uring shipment by

pipeline. * * * * * (e) From June 1, 2012 through June 1, 2014, NRLM diesel fuel produced by a facility that processes transmix is subject to the standards of §80.510(c), except that LM diesel fuel produced from transmix is subject to the sulfur standard of §80.510(a). This paragraph (e) does not apply to NRLM or LM diesel fuel that is sold or intended for sale in the areas listed in §80.510(g)(1) or (g)(2). (f) Beginning June 1, 2014, LM diesel fuel produced from transmix is subject to the sulfur standard of §80.510(a), provided that the conditions in this paragraph are satisfied. Diesel fuel produced from transmix that does not meet the conditions in this paragraph is subject to the sulfur standard in §80.510(c). (1) The fuel must be produced from transmix. (2) The fuel must not be sold or intended for sale in the areas listed in §80.510(g)(1) or (g)(2). (3) A facility

producing 500 ppm LM diesel fuel must obtain approval from the Administrator for a compliance plan. The compliance pl an must detail how the facilit y will segregate an y 500 ppm LM diesel fuel produced subject to the standards under §80.510(a) from the producer through to the ultimate consumer from fuel having other designations. The compliance plan must identify

the enti ties that handle the 500 ppm LM thr ough to the ultimate consumer. No more than 4 separate entities shall handle the 500 ppm LM between the producer and the ultimate consumer. The compliance plan must also identify all ultimate consumers to whom the refin er supplies the 500 ppm LM diesel fuel. The compliance plan must detail how misfueling of 500 ppm LM into vehicles or equipment that require the use of 15 ppm diesel fuel will be prevented. (i) Producers of 500 ppm LM diesel fuel must be registered with E PA under §80.597 prior to the distribution of any 500 ppm LM diesel fuel after June 1, 2014. (ii) Producers of 500 ppm LM must initiate a PTD that meets the requirements in paragraph (f)( 2 )(iii) of this section. (iii) All transfers of 500 ppm LM diesel fuel must be accompanied b y a PTD that clearl y and accuratel y states the fuel designation; the PTD must also meet all other requirements of §80.590. (iv) Batches of 500 ppm LM may be shipped by

pipeline provided that such batches do not come into phy sical contact in the pipeline with batches of other distillate fuel products that have a sulfur content greater than 15 ppm.***E.O. 12866 Review

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Page **43** of **47** (v) The volume of 500 ppm LM shipped via pipeline under paragraph (f)(3)(iv) of this section may swell by no more than 2 % upon deliv ery to the next party. Such a volume increase may onl y be due to volume swell due to temperature differences when the volume was measured or due to normal pipeline interface cutting practices notwithstanding the requirement under paragraph (f)(3)(iv) of this section. (vi) Entities that handle 500 ppm LM must calculate the balance of 500 ppm LM received versus the volume delivered and used on an annual basis. (vii) The records required in this section must be maintained for five ye ars, by each entity

that h andles 500 ppm LM and be made available to EPA upon request. (4) All parties that take custody of 500 ppm LM must segregate the product from other fuels and observe the other requirements in the compliance plan approved b y EPA pursuant to paragraph (f)(3) of this section.
4
. Section 80.572 is amended by revising the section heading and paragraphs (a) and (d) to read as follows: **§ 80.572 What labeling requirements apply to retailers and wholesale** 

**purchaser -**  **consumers of Motor Vehicle, NR, LM and NRLM diesel**  **fuel and heating oil beginning June 1, 2010?** * * * * * (d) From June 1, 2010 and beyond, for pumps dispensing LM diesel fuel subject to the 500 ppm sulfur standard of §80.510(a): LOW SULFUR LOCOMOTIVE AND MARINE DIESELFUEL (500 ppm Sulfur Maximum ) WARNI NG Federal law prohibits use in nonroad engines or in highway vehicles or engines. * * * * * 5
. Section 80.597 is amended by revising paragraph (d)(3)(ii) to read as follows: **§ 80.597 What are the registration requirements?**  * * * * * (d) * * * (3) * * * (ii) Fuel designated as 500 ppm LM diesel fuel. 6
. Section 80.1401 is amended by revising the definition of “Heating Oil” to read as follows:***E.O. 12866 Review

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Page **44** of **47 §**  **80.1401 Definitions.**  * * * * * Heating oil means either of the following: (1) A #1, #2, or non - petroleum diesel meeting the definition set forth in §80.2(ccc) ; or (2) A fuel oil that , pursuant to §§ 80.1450(b)(1)(ix) and (d)(4), 80.1451(b)(1)(ii)(T) , 80.1453(d) and 80.1454(b)(7), is demonstrated to be used to heat interior spaces of homes or bu ildings to control ambient climate for human comfort , and which is capable of flowing at 60 degrees Fahrenheit and 1 atmosphere of pressure. * * * * * 7
. Section 80.14 26 is amended by revising paragraph (a)(1) to read as follows: **§ 80.14**  **26 How are**  **RINs generated and assigned to batches of renewable fuel by renewable fuel producers or importers?**  (a) * * * (1) * * * (i) * * * (ii) Is demonstrated to be produced from renewable biomass pursuant to the reporting requirements of §80.1451 and the recordkeeping requirements of §80.1454 ; and (A) * * * (B) [Reserved] (iii) Was produced in compliance with the registration requirements of §80.1450, the reporting requirements of §80.1451, the recordkeeping requirements of §80.1454, and all other applicable regulations of this subpart M. * * * * * 8
. Section 80.1431 is amended by adding new paragraph (a)(1)(x) to read as follows: **§ 80.14**  **31 Treatment of invalid RINs.**  * * * * * (a)(1)(x) A RIN generated for renewable fuel that was not used as a transportation fuel, heating oil, or jet fuel. 9
. Section 80.1450 is amended by adding new paragraph s (b)(1)(ix) and (d)(4) to read as follows: **§ 80.1450**  **What are the registration requirements under the RFS program?** * * * * * (b) * * * (1) * * * (ix) For a producer of fuel oil meeting paragraph (2) of the definition of heating oil in §80.1401: (A) Copies of all existing written contracts for the legal transfer of title of a specific quantity of the qualifying fuel oil directl y from the producer o f the fuel oil to the final end user that will use the fuel oil to heat interior spaces of homes or***E.O. 12866 Review

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Page **45** of **47** buildings to control ambient climate for human comfort, including all of the following information for each contract: ( 1 ) All terms of the contract, includi ng start and expiration date, if an y, names of the entity and the responsible corporate officer of all entities involved in the sale from the producer to the end user, and their respective signatures. ( 2 ) The total quantity of fuel oil under contract, in units of U.S. gallon s , and the respective heating content of the fuel oil, in units of BTU per U.S. gallon. ( 3 ) The total number buildings, the ph ys ical address of each building, and the entity that owns the building, if different than the entity that enter ed into the contract to receive title to the fuel oil and use it to heat interior spaces of homes or buildings to control ambient climate for human comfort. ( 4 ) The total number and t yp e of heating equipment units in each building, and the design capacity of each piece of equipment, in units of BTU per hour that use the qualifying fuel oil as fuel. ( 5 ) Any

other relevant information that will help to verify compliance with the definition and registration requirements not already listed in this paragra

ph. ( B ) For each existing contract, an affidavit from the producer of the fuel oil stating that the fuel oil addressed in the contract is for the purposes of heating interior spaces of homes or buildings to control ambient climate for human comfort, and no other purpose
. ( C ) For each existing contract, an affidavit from the final end users of the fuel oil stating that the fuel oil addressed in the contract will be used for purposes of heating interior spaces of homes or buildings to control ambient climate for human comfort, and no other purpose
. ( D ) A list of prospective clients and the projected volumes of qualifying fuel oil that may be under contract with such clients. ( E ) A certificate of anal ys is or specification sheet for the fuel oil that contain s all of the following information and the various test methods used to determine all of the following : (1) Gross heat of combustion
. (2) W ater content . (3 ) S olids content
. (4) Kinematic viscosity
. (5) D ensity
. (6) S ulfur content
. (7) A sh content
. (8) F lash point
. (9) P our point
. (F) Any

additional information the Administrator may require. * * * * * ( d) * * * (4) Any

producer of fuel oil meeting paragraph (2) of the definition of heating oil in §80.1401 , shall update their registration b y submitting copies of all written contracts for the legal transfer of title of a specific quantity of the qualifying fuel oil from the producer of the fue l oil to the final end user that will use the fuel oil***E.O. 12866 Review

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Page **46** of **47** to heat interior spaces of homes or buildings to control ambient climate for human comfort
. (i) Only

new or revised contracts shall be submitted. (ii) Such updates shall occur at least annuall y, unl ess the producer of fuel oil has not established an y new contracts and has not revised any existing contracts. (5) Any

producer of fuel oil meeting paragraph (2) of the definition of heating oil in §80.1401 , shall update their registration b y submitting a list of prospective clients and the projected volumes of qualifying fuel oil that may be under contract with such clients. * * * * * 10
. Section 80.1451 is amended by adding a new paragraph (b)(1)(ii)(T) to read as follows: **§ 80.1451 What are the repor**  **ting requirements under the RFS program?** * * * * * (b) * * * (1) * * * (ii) * * * (T) Producers of fuel oil that meets the paragraph (2) of the definition of heating oil in §80.1401, shall report all the following for each volume of fuel oil: ( 1 ) Total volume of fuel oil produced for RIN generation, in units of U.S. gallon, and the respective heating content of the fuel oil, in units of BTU per U.S. gallon
. ( 2 ) Total volume of fuel oil for which RINs were generated , in units of U.S. gallon, and th e respective name s and location s of the building s in which the fuel oil was used to heat interior spaces of those buildings to control ambient climate for human comfort , and the RI N numbers assigned to each batch of fuel oil
. ( 3 ) Total volume of fuel oil that was produced or sold that did not qualify for RIN generation, and an explanation why these volumes of fuel oil did not qualify , what purpose or end use were applied for these volumes, and to what entity were the volumes eventually

sold. * * * * * 11
. Section 80.1453 is amended by adding a new paragraph (d) to read as follows: **§ 80.1453**  **What are the product transfer document (PTD) requirements for the RFS program?**  * * * * * (d) For fuel oil meeting paragraph (2) of the definition of heating oil in §80.1401, the PTD which is used to transfer ownership of the renewable fuel shall state : “This volume of renewable fuel is designated and intended to be used to heat interior spaces of homes or buildings . Do NOT use for an y other purpose , pursuant to 40 C FR § 80.1460(g) .” 12
. Section 80.1454 is amended by revising paragraph (b)(6) and adding new paragraph s (b)(7) and (b)(8) to read as follows:***E.O. 12866 Review

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Page **47** of **47 §**  **80.1454 What are the recordkeeping requirements under the RFS program?**  * * * * * (b) * * * (6) Copies of registration documents required under §80.1450, including information on transportation fuel, jet fuel, or heating oil and products, feedstocks, facility production processes, process changes, and capacity , energy sources, contracts and a cop y of the independent third part y engineering review submitted to EPA per §80.1450(b)(2). (7) Copies of all contracts, list of prospective clients , certificate of anal ys is, and affidavits that contain all the information required under §80.1450(b)(1)(ix) and (d)(4) that was set up prior to registration and revised or executed after registration for qualifying fuel oil that meets paragraph (2) of the definition of heating oil in §80.1401. (8) For each batch of transferred fuel oil that the renewable fuel producer cla ims to meet paragraph (2) of the definition of heating oil in §80.1401, affidavits from the end user of the fuel that includes, but not limited to, the following information: (i) Quantity

of fuel oil used for heating oil. (ii) Date the fuel oil was recei ved from producer. (iii) Date s the fuel oil was used. (iv) Blend level of the fuel oil in petroleum based fuel oil when received
. (v) Blend level of the fuel oil in petroleum based fuel oil when used. (vi) Quantity

of assigned RINs received with the renew able fuel , if applicable. (vii) Quantity

of assigned RINs that the end user separated f rom the renewable fuel, if applicable. (viii) Description of the fuel oil use.
* * * * * 12
. Section 80.1460 is amended by adding a new paragraph (g). **§ 80.1460**  **What acts are prohibited under the RFS program?**  * * * * * (g) Failing to use a renewable fuel for its intended use. No person shall use qualifying fuel oil that meets paragraph (2) of the definition of heating oil in §80.1401 in an application other than to heat interior spaces of homes or buildings to control ambient climate for human comfort. * * * * *