[Federal Register Volume 66, Number 61 (Thursday, March 29, 2001)]
[Rules and Regulations]
[Pages 17230-17273]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-37]



[[Page 17229]]

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Part II





Environmental Protection Agency





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40 CFR Parts 80 and 86



Control of Emissions of Hazardous Air Pollutants From Mobile Sources; 
Final Rule

Federal Register / Vol. 66, No. 61 / Thursday, March 29, 2001 / Rules 
and Regulations

[[Page 17230]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 80, and 86

[AMS-FRL-6924-1]
RIN 2060-AI55


Control of Emissions of Hazardous Air Pollutants From Mobile 
Sources

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: Today's action addresses emissions of hazardous air pollutants 
(HAPs) from motor vehicles and their fuels. Hazardous air pollutants 
refer to a range of compounds that are known or suspected to have 
serious health or environmental impacts. Motor vehicles are significant 
contributors to national emissions of several hazardous air pollutants, 
notably benzene, formaldehyde, 1,3-butadiene, acetaldehyde, and diesel 
particulate matter and diesel exhaust organic gases.
    In today's action, we list 21 compounds emitted from motor vehicles 
that are known or suspected to cause cancer or other serious health 
effects. Our Mobile Source Air Toxics (MSAT) list includes various 
volatile organic compounds (VOCs) and metals, as well as diesel 
particulate matter and diesel exhaust organic gases (collectively DPM + 
DEOG). The selection methodology we used to develop this MSAT list, 
which may be used to add compounds to or remove compounds from the list 
in the future as new information becomes available, is also described. 
In today's action we also examine the mobile source contribution to 
national inventories of these emissions and the impacts of existing and 
newly promulgated mobile source control programs, including our 
reformulated gasoline (RFG) program, our national low emission vehicle 
(NLEV) standards, our Tier 2 motor vehicle emissions standards and 
gasoline sulfur control requirements, and our proposed heavy-duty 
engine and vehicle standards and on-highway diesel fuel sulfur control 
requirements. Between 1990 and 2020, we project these programs will 
reduce on-highway emissions of benzene, formaldehyde, 1,3-butadiene, 
and acetaldehyde by 67 to 76 percent, and will reduce on-highway diesel 
PM emissions by 90 percent.
    This action also finalizes new gasoline toxic emission baseline 
requirements which require refiners to maintain current levels of over-
compliance with toxic emissions performance standards that apply to 
federal reformulated gasoline (RFG) and anti-dumping standards that 
apply to conventional gasoline (CG). Because the new baseline 
requirements do not require refiners to install new equipment or use 
technologies beyond what they were using in the baseline period (1998-
2000), we project that this program will impose only negligible costs. 
The new baseline requirements are designed to prevent backsliding and 
to ensure that existing overcompliance with current standards 
continues. We are not setting additional vehicle-based air toxics 
controls at this time because the technology-forcing Tier 2 light-duty 
vehicle standards and those standards being developed in response to 
our recent proposal for heavy-duty engine and vehicle standards 
represent the greatest degree of toxics control achievable at this time 
considering existing standards, the availability and cost of the 
technology, and noise, energy, and safety factors, and lead time.
    Finally, because of our continuing concern about the potential 
health impacts of public exposure to air toxics, today's action also 
describes a Technical Analysis Plan through which we will continue to 
improve our understanding of the risk posed by air toxics to public 
health and welfare. It will also allow us to evaluate the need for and 
appropriateness of additional mobile source air toxics controls for on-
highway and nonroad sources, and their fuels. Based on the information 
developed through this technical analysis plan, we will conduct a 
future rulemaking, to be completed no later than July 1, 2004.

DATES: This rule is effective May 29, 2001. The incorporation by 
reference of certain publications listed in this rule is approved by 
the Director of the Federal Register as of May 29, 2001.

ADDRESSES: Comments: All comments and materials relevant to today's 
action have been placed in Public Docket No. A-2000-12 at the following 
address: U.S. Environmental Protection Agency (EPA), Air Docket (6102), 
Room M-1500, 401 M Street, SW, Washington, DC 20460. EPA's Air Docket 
makes materials related to this rulemaking available for review at the 
above address (on the ground floor in Waterside Mall) from 8:00 a.m. to 
5:30 p.m., Monday through Friday, except on government holidays. You 
can reach the Air Docket by telephone at (202) 260-7548, and by 
facsimile (202) 260-4400. We may charge a reasonable fee for copying 
docket materials, as provided in 40 CFR part 2.

FOR FURTHER INFORMATION CONTACT: Margaret Borushko, U.S. EPA, National 
Vehicle and Fuels Emission Laboratory, 2000 Traverwood, Ann Arbor, MI 
48105; Telephone (734) 214-4334; FAX: (734) 214-4816; E-mail: 
<a href="/cdn-cgi/l/email-protection#7715180502041f1c18591a160510160512033712071659101801"><span class="__cf_email__" data-cfemail="7b1914090e0813101455161a091c1a091e0f3b1e0b1a551c140d">[email protected]</span></a>

SUPPLEMENTARY INFORMATION:   

Regulated Entities

    This action will affect entities that produce new motor vehicles, 
alter individual imported motor vehicles to address U.S. regulation, or 
convert motor vehicles to use alternative fuels. It will also affect 
entities that produce, distribute, or sell gasoline or diesel motor 
fuel.
    The table below gives some examples of entities that may have to 
follow the regulations. Because these are only examples, you should 
carefully examine the regulations in 40 CFR parts 80 and 86. If you 
have questions, call the person listed in the FOR FURTHER INFORMATION 
CONTACT section above.

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                                                        Examples of
        Category            NAICS      SIC  codes  potentially regulated
                          codes (1)       (2)             entities
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Industry...............       336111         3711  Motor Vehicle
                                                    Manufacturers.
                              336112
                              336120
Industry...............       336112         3711  Engine and Truck
                                                    Manufacturers.
                              336120
Industry...............       336311         3592  Alternative Fuel
                                                    Vehicle Converters.
                              336312         3714
                              422720         5172
                              454312         5984
                              811198         7549
                              541514         8742
                              541690         8931

[[Page 17231]]

 
Industry...............       811112         7533  Commercial Importers
                                                    of Vehicles and
                                                    Vehicle Components.
                              811198         7549
                              541514         8742
Industry...............       324110         2911  Petroleum Refiners.
Industry...............       422710         5171  Gasoline or Diesel
                                                    Marketers and
                                                    Distributors.
                              422720         5172
Industry...............       484220         4212  Gasoline or Diesel
                                                    Carriers.
                              484230        4213
------------------------------------------------------------------------
(1) North American Industry Classification System (NAICS).
(2) Standard Industrial Classification (SIC) system code.

Access to Rulemaking Documents through the Internet

    Today's action is available electronically on the day of 
publication from the Office of the Federal Register Internet Web site 
listed below. Electronic copies of this preamble and regulatory 
language as well as the Response to Comments, the Technical Support 
Document (TSD) and other documents associated with today's action will 
be available from the EPA Office of Transportation and Air Quality Web 
site listed below shortly after the rule is signed by the 
Administrator. This service is free of charge, except any cost that you 
already incur for Internet connectivity.
    EPA Federal Register Web Site:

http://www.epa.gov/docs/fedrgstr/epa-air/

(Either select a desired date or use the Search feature.)
    Office of Transportation and Air Quality (OTAQ) Air Toxics Web 
Site:
http://www.epa.gov/otaq/toxics.htm

    Please note that due to differences between the software used to 
develop the document and the software into which the document may be 
downloaded, changes in format, page length, etc., may occur.

Outline of this Preamble

I. Introduction
    A. Background
    B. Basic Components of Today's Program
    1. Identification of Mobile Source Air Toxics
    2. Assessment of Emission Benefits From Current Standards
    3. Consideration of Additional On-Highway Controls
    4. Nonroad Air Toxics
    5. Technical Analysis Plan and Commitment for Further Rulemaking
    C. EPA's Statutory Authority for Today's Action
II. What Are the Mobile Source Air Toxics?
    A. Introduction
    B. The Methodology Used to Identify Our List of Mobile Source 
Air Toxics
    1. Identifying Pollutants Emitted From Mobile Sources
    2. Using IRIS to Identify Pollutants With Potential Serious 
Adverse Health Effects
    C. List of Mobile Source Air Toxics
III. How Are Motor Vehicle Emission Control Programs Reducing MSAT 
Emissions?
    A. Baseline Inventories
    B. Impacts of Motor Vehicle Emission Controls on Emissions 
Inventories
    1. Description of Emission Control Programs
    2. Emission Reductions From Control Programs
IV. Evaluation of Additional Motor Vehicle-based Controls
    A. MSATs and Motor Vehicle-based Controls
    B. Vehicle-based Standards to Reduce MSATs From Light-Duty 
Vehicles
    C. Vehicle-based Standards to Reduce MSATs From Heavy-Duty 
Engines
    D. Conclusions Regarding Vehicle-based Standards
V. Evaluation of Additional Fuel-Based Controls
    A. Form of the Rule
    1. What Is the Form of the Rule EPA Is Promulgating Today?
    2. Why Did EPA Change From the Proposed Benzene Fuel Content 
Form of the Rule to the TPR?
    3. What Are the Benefits of the TPR?
    4. What Are the Costs of the TPR?
    B. Issues and Areas of Comment on Non-implementation Related 
Aspects of the Program
    1. What Is the Relationship Between the RFG and Anti-dumping 
Requirements and the Toxics Anti-backsliding Requirements?
    2. How Are Incremental Production Volumes of RFG Affected by 
This Rule?
    3. Does This Rule Contain Any Small Refiner Provisions?
    4. Is This Rule Expected to Constraint the Potential for 
Expanded Use of Ethanol in Conventional Gasoline?
    5. Is Diesel Fuel Control a Part of Today's Regulation?
    C. What Are the Components of the Anti-backsliding Toxics 
Performance Program?
    1. Start Date
    2. Separate Compliance Determination for RFG and CG
    3. Baseline Development and Submittal
    4. Baseline Adjustment
    5. Compliance Margin
    6. Foreign Refiner Provisions
    7. Default Baseline and Applicability
    8. Compliance Period and Deficit and Credit Carryforward
    9. Hardship Provisions
    10. California Gasoline
    11. Territories
    12. Gasoline excluded
    D. Why Isn't EPA Adopting Other Fuel Controls to Control MSATs?
VI. Nonroad Sources of MSAT Emissions
    A. Nonroad MSAT Baseline Inventories
    B. Impacts of Current Nonroad Mobile Source Emission Control 
Strategies
    1. Description of the Emission Control Program
    2. Emission Reductions From Current Programs
    C. Gaps in Nonroad Mobile Source Data
VII. Technical Analysis Plan to Address Data Gaps and Commitment for 
Further Rulemaking
    A. Technical Analysis Plan to Address Data Gaps
    B. Commitment for Further Rulemaking
VIII. Public Participation
IX. Administrative Requirements
    A. Administrative Designation and Regulatory Analysis
    B. Regulatory Flexibility Analysis
    C. Paperwork Reduction Act
    D. Intergovernmental Relations
    1. Unfunded Mandates Reform Act
    2. Executive Order 13132: Federalism
    3. Executive Order 13084: Consultation and Coordination With 
Indian Tribal Governments
    E. National Technology Transfer and Advancement Act
    F. Executive Order 13045: Children's Health Protection
    G. Congressional Review Act
X. Statutory Provisions and Legal Authority

I. Introduction

A. Background

    Air toxics, which are also known as ``hazardous air pollutants'' or 
HAPs, are those pollutants known or suspected to cause cancer or other 
serious health or environmental effects. They include pollutants like 
benzene, perchloroethylene, methylene chloride, heavy metals like 
mercury and lead, polychlorinated biphenyls (PCBs), and dioxins. While 
the harmful effects of air toxics are of particular concern in areas 
closest to where they are emitted, they can also be transported and 
affect the health and welfare of populations in other geographic areas. 
Some can persist for considerable time in the environment and/or 
bioaccumulate in the food chain.

[[Page 17232]]

    To address concerns about the potentially serious impacts of 
hazardous air pollutants on public health and the environment, the 
Clean Air Act (the Act), as amended in 1990, includes a number of 
provisions that have led EPA to characterize, prioritize, and control 
these emissions as appropriate. Since 1990, the Agency has worked to 
comply with the Act through a combination of regulatory approaches, 
partnerships, ongoing research and assessments, risk initiatives, and 
education and outreach. We have put in place many programs to reduce 
air toxic emissions that have resulted, and will continue to result, in 
reductions in ambient concentrations of air toxics. On the stationary 
source side, we have developed 46 stationary source standards for 82 
different types of sources and have more under development. These 
standards are required under Sections 112 and 129 of the Act and 
provide for future evaluation of the need for additional stationary 
source regulations based on the remaining risk from air toxics after 
these standards are in effect. These actions have resulted, or are 
projected to result in, substantial reductions in HAP emissions.
    On the mobile source side, many of the emission control programs 
put in place pursuant to the 1990 Clean Air Act Amendments reduce air 
toxics emissions from a wide variety of mobile sources. These include 
our reformulated gasoline (RFG) program, which has substantially 
reduced mobile source air toxics, particularly in urban areas which 
often have high levels of ambient air toxics, our national low emission 
vehicle (NLEV) program, our Tier 2 motor vehicle emissions standards 
and gasoline sulfur control requirements, and standards for nonroad 
vehicles and equipment, such as locomotives, recreational marine 
engines, and aircraft. We have also proposed heavy-duty engine and 
vehicle standards and on-highway diesel fuel sulfur control 
requirements that would reduce toxics emissions from heavy-duty 
trucks.\1\ Finally, certain other mobile source control programs have 
been specifically aimed at reducing toxics emissions from mobile 
sources (e.g., our lead phase-out programs).
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    \1\ See final rules: NLEV, 62 FR 31191 (June 6, 1997); Tier 2, 
65 FR 6698 (February 10, 2000); land-based diesel nonroad, 63 FR 
56968 (October 23, 1998); locomotive, 63 FR 18978 (April 16, 1998); 
recreational marine, 61 FR 52088 (October 4, 1996); commercial 
diesel marine, 64 FR 73300 (December 29, 1999); aircraft, 62 FR 
25355 (May 8, 1997); RFG, 59 FR 7812 (February 16, 1994). See 
proposed rule HD2007, 65 FR 35430 (June 2, 2000).
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    While these mobile source standards were put in place primarily to 
reduce ambient concentrations of criteria pollutants through oxides of 
nitrogen (NO<INF>X</INF>), volatile organic compound (VOC), carbon 
monoxide (CO) and particulate matter (PM) controls, and thereby to help 
states and localities come into attainment with the National Ambient 
Air Quality Standards (NAAQS) for ozone, PM, and CO, they have reduced 
and will continue to reduce on-highway emissions of air toxics 
significantly.\2\ By 2020, we project these programs will reduce the 
levels of on-highway emissions of benzene by 73 percent, formaldehyde 
by 76 percent, 1,3-butadiene by 72 percent, and acetaldehyde by 67 
percent from 1990 levels. In addition, by 2020, on-highway diesel PM 
emission reductions of 94 percent from 1990 levels are projected in a 
recent NPRM for heavy-duty engines.\3\
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    \2\ For example, included among the numerous chemicals that make 
up total VOC emissions--that thus are reduced when VOCs are 
reduced--are several gaseous toxics (e.g., benzene, formaldehyde, 
1,3-butadiene, and acetaldehyde).
    \3\ 65 FR 35430, June 2, 2000.
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    Nevertheless, because of the potentially serious effects exposure 
to air toxics may have on human health, it is reasonable to assess 
whether it is appropriate to establish additional mobile source 
controls that are specifically designed to reduce further or minimize 
increases in national inventories of these pollutants. In today's 
action, pursuant to Section 202(l)(2) of the Act, the Agency has 
identified those compounds emitted from mobile sources that should be 
classified as mobile source air toxics, evaluated whether there are 
additional controls that can be established at this time, set new toxic 
emission performance standards, identified existing data gaps in our 
understanding of the risk posed to the public from mobile source air 
toxics, and committed to reevaluate the need for additional controls in 
2003-2004.
    Today's action provides the mobile source component of EPA's 
National Air Toxics Program: The Integrated Urban Strategy (IUATS), 
published July 19, 1999 (64 FR 38706). The overarching goal of the 
IUATS is to reduce cancer and noncancer risks associated with all 
sources of air toxics in urban areas. In urban areas, toxic air 
pollutants raise special concerns because sources of emissions and 
people are concentrated in the same geographic areas, leading to large 
numbers of people being exposed to the emissions of many HAPs from many 
sources. The IUATS identified 33 ``urban HAPs'' which pose the greatest 
threat to human health in the largest number of urban areas. These 33 
compounds are a subset of the 188 compounds listed in Section 112(b) of 
the Clean Air Act and are listed in Table I-1. Thirteen of these 
compounds are also included on our Mobile Source Air Toxics list (see 
Section II, below). The IUATS is described in greater detail in Chapter 
1 of the Technical Support Document for this rule. Additional 
information can also be obtained from the EPA's Unified Air Toxics 
website, http://www.epa.gov/ttn/uatw.

                   Table I-1.--List of Urban HAPs for the Integrated Urban Air Toxics Strategy
----------------------------------------------------------------------------------------------------------------
              Acetaldehyde <SUP>a</SUP>                          Coke oven emissions                Mercury compounds <SUP>a</SUP>
----------------------------------------------------------------------------------------------------------------
Acrolein <SUP>a</SUP>...............................  1,2-dibromomethane......................  Methylene chloride.
Acrylonitrile............................  1,2-dichloropropane (propylene            Nickel compounds. <SUP>a</SUP>
                                            dichloride).
Arsenic compounds <SUP>a</SUP>......................  1,3-dichloropropene.....................  Polychlorinated biphenyls.
Benzene <SUP>a</SUP>................................  Ethyl dichloride (1,2-..................  Polycyclic organic matter.
                                                                                      <SUP>a</SUP>
Beryllium compounds......................  Ethylene oxide..........................  Quinoline.
1,3-Butadiene <SUP>a</SUP>..........................  Formaldehyde <SUP>a</SUP>..........................  2,3,7,8-tetrachlorodibenzo-
                                                                                      p-dioxine (and cogeners
                                                                                      and TCDF cogeners). <SUP>a</SUP>
Cadmium compounds........................  Hexachlorobenzene.......................  1,1,2,2-tetrachloroethane.
Carbon tetrachloride.....................  Hydrazine...............................  Tetrachloroethylene.
Chloroform...............................  Lead compounds <SUP>a</SUP>........................  Trichloroethylene.
Chromium compounds <SUP>a</SUP>.....................  Manganese compounds <SUP>a</SUP>...................  Vinyl chloride.
----------------------------------------------------------------------------------------------------------------
<SUP>a</SUP> Included on our Mobile Source Air Toxics list.


[[Page 17233]]

    Today's rule is our first attempt at addressing mobile source air 
toxics in a systematic and integrated manner. Additional analysis, 
however, will be necessary to evaluate the sufficiency of those 
controls and to determine whether there is a need for additional 
controls. Today's rule also contains a Technical Analysis Plan (TAP) 
that identifies key information gaps about the risk posed by mobile 
source air toxics and the feasibility of additional controls. In order 
to address these data gaps, the Agency will continue to compile, 
analyze, and conduct additional research in coordination with other 
toxics research activities that are ongoing in the Agency, including 
the National-Scale Air Toxics Assessment (NATA) headed by EPA's Office 
of Air Quality Planning and Standards (OAQPS) and the Air Toxics 
Research Strategy (ATRS) headed by EPA's Office of Research and 
Development (ORD).
    The results of NATA will be used to identify areas of the country 
and pollutants where additional investigation is needed. NATA will 
begin with an analysis of the risks associated with the 33 ``urban 
HAPs'' identified in Table I-1. In the future, NATA will evaluate all 
188 HAPs currently listed under Section 112(b) of the Act as well as 
diesel PM. NATA is described in greater detail in Chapter 1 of the 
Technical Support Document for this rule. Additional information can 
also be obtained from the NATA website (http://www.epa.gov/ttn/uatw/nata).
    The Air Toxics Research Strategy (ATRS) is an Agency 10 year plan 
to guide and prioritize research in air toxics from various sources, 
including mobile sources. ATRS is also described in Chapter 1 of the 
Technical Support Document.
    With this background, we now turn to an overview of today's action.

B. Basic Components of Today's Program

    Today's action addresses mobile source air toxics emissions. In it, 
we identify our list of 21 mobile source air toxics (MSATs) and set new 
gasoline toxic emission performance baseline requirements for RFG and 
conventional gasoline. We also describe a Technical Analysis Plan to 
continue analysis and research that will aid us in evaluating and 
assessing the need for additional mobile source air toxics controls. 
The information acquired through our technical analysis will form the 
basis for a future mobile source air toxics rulemaking.
1. Identification of Mobile Source Air Toxics
    There are hundreds of different compounds and elements that are 
known to be emitted from passenger cars, on-highway trucks, and various 
types of nonroad equipment. Section II of today's action identifies a 
list of 21 toxic compounds emitted from motor vehicles and describes 
the methodology we used to generate this list. This methodology may be 
used to add compounds to, or remove compounds from, the MSAT list in 
the future as new information becomes available.
2. Assessment of Emission Benefits From Current Standards
    Today's action also describes how our current mobile source 
emission control programs are expected to reduce MSAT emissions. By 
2020, we expect existing programs like the reformulated gasoline (RFG) 
program, national low emission vehicle (NLEV) program, Tier 2 motor 
vehicle emissions standards and gasoline sulfur control requirements 
(Tier 2), and our proposed heavy-duty engine and vehicle standards and 
on-highway diesel fuel sulfur control requirements (HD2007 rule), to 
significantly reduce on-highway emissions of key air toxics. Section 
III contains our on-highway toxics emissions inventory analysis and 
estimates of these expected reductions.
3. Consideration of Additional On-Highway Controls
    Although we anticipate substantial reductions in emissions of key 
toxic pollutants by 2020, the serious potential health effects 
associated with many of these compounds lead us to evaluate whether 
additional controls are technologically feasible at this time. For the 
purpose of our analysis, we divide potential control measures into two 
broad categories: vehicle-based controls and fuel-based controls. 
Vehicle-based controls include programs that reduce evaporative and 
exhaust emissions from vehicles and engines. Fuel-based controls 
explore how changing fuel formulation can reduce air toxic emissions. 
In performing our analysis of additional controls in Sections IV and V, 
we followed the requirements specified in Section 202(l)(2) of the Act: 
these motor vehicle or motor fuel standards must ``reflect the greatest 
degree of emission reduction achievable through the application of 
technology which will be available, taking into consideration the 
standards established under [Section 202(a)], the availability and 
costs of the technology, and noise, energy, and safety factors, and 
lead time.''
    Based on our analysis and the comments we received from various 
stakeholders, we are finalizing gasoline toxic emission performance 
standards that will help maintain current levels of overcompliance with 
existing gasoline toxics emission standards. These requirements are 
refiner-specific, based on each refinery's average 1998-2000 gasoline 
toxic emission performance levels for RFG and conventional gasoline. 
Consistent with our proposal, we are not setting additional air toxics 
emissions standards for motor vehicles in today's action. However, it 
is important to note that we have proposed stringent new diesel 
particulate matter standards for heavy-duty vehicles (HDV) that would 
reduce HDV PM emissions by 90%. We expect to issue a final rule for 
this category soon. We believe that it is not technologically feasible 
at this time to set additional motor vehicle controls under Section 
202(l)(2) beyond the controls already adopted or proposed by the 
Agency. This decision is based on consideration of the technical 
feasibility, cost, and other factors relevant to a proposal of further 
controls at this time.
4. Nonroad Air Toxics
    Section 202(l)(2) of the Act specifies that we set standards to 
control hazardous air pollutants from motor vehicles and motor vehicle 
fuels which, by definition, do not include nonroad engines or vehicles 
or their fuels. However, nonroad engines are also important 
contributors to national inventories of mobile source air toxics 
emissions. Therefore, we believe it is also helpful to include a 
discussion of nonroad sources in today's action. In addition, as noted 
above, today's action is part of EPA's Integrated Urban Air Toxics 
Strategy. As part of our effort to establish a comprehensive plan that 
seeks to reduce urban air toxic emissions, we intend to address both 
on-highway and motor vehicles and evaluate emissions and potential 
strategies relating to hazardous air pollutants from nonroad engines 
and vehicles.
5. Technical Analysis Plan and Commitment for Further Rulemaking
    We believe our evaluation to date of the need for, and 
appropriateness of, additional mobile source toxics control measures 
provides adequate support for today's action. At this time, EPA is also 
engaged in other toxics-related activities as part of NATA, the IUATS, 
ATRS, and other rulemaking activities. This emerging information will 
help us to

[[Page 17234]]

further evaluate potential additional mobile source air toxics controls 
in the future.
    Building on these Agency toxics activities, and to increase our 
understanding of mobile source air toxics, we will implement the 
Technical Analysis Plan described in Section VII below. This Plan will 
be coordinated with the other research activities within the Agency in 
several key areas, including development of emission factors for 
nonroad sources, analysis of toxics exposures in microenvironments, and 
examination of additional fuel- and vehicle-based air toxics controls 
for both motor vehicles and nonroad engines and equipment. Our TAP will 
be fully coordinated and integrated with activities conducted as part 
of NATA, the IUATS, and the ATRS. This will allow us to take full 
advantage of what is collectively learned and provide a solid basis for 
future action, including a future rulemaking, to be completed no later 
than July 1, 2004.

C. EPA's Statutory Authority for Today's Action

    Today's action is established pursuant to Section 202(l) of the 
Clean Air Act. That Section consists of two parts. Section 202(l)(1) 
calls on EPA to study the need for and feasibility of controlling toxic 
air pollutants associated with motor vehicles and motor vehicle fuels. 
That study is to focus on those categories of emissions that pose the 
greatest risk to human health or about which significant uncertainties 
remain. The Act specifies that, at a minimum, the study focus on 
emissions of benzene, formaldehyde, and 1,3-butadiene.
    We completed the study required under Section 202(l)(1) in April 
1993. The report, entitled ``Motor Vehicle-Related Air Toxics Study,'' 
is available on our website (http://www.epa.gov/otaq/toxics.htm). 
Specific pollutants or pollutant categories discussed in the 1993 
report include benzene, formaldehyde, 1,3-butadiene, acetaldehyde, 
diesel particulate, gasoline particulate, gasoline vapors, and selected 
metals. The emissions and exposure aspects for several of the air 
toxics covered in this report were recently updated in November 1999. 
The 1999 report, entitled ``Analysis of the Impacts of Control Programs 
on Motor Vehicle Toxics Emissions and Exposure in Urban Areas and 
Nationwide,'' is also available on our website, and is described in 
more detail in Section I.E., below. We sought peer review comments on 
both the 1993 and 1999 reports. We considered the 1993 comments in 
developing the 1999 document and will consider the 1999 comments in 
developing our future activities (e.g., in the development of version 4 
of the Hazardous Air Pollutant Exposure Model, HAPEM4, described in 
Section VII, below).
    Section 202(l)(2) instructs us to set standards to control 
hazardous air pollutants from motor vehicles, motor vehicle fuels, or 
both. These standards, which may be revised from time to time, are to 
reflect the greatest degree of emission reduction achievable through 
the application of technology which will be available, taking into 
consideration the motor vehicle standards established under Section 
202(a) of the Act, the availability and cost of the technology, and 
noise, energy and safety factors, and lead time. The regulations are to 
apply, at a minimum, to benzene and formaldehyde emissions, and are to 
be set under Section 202(a) or 211(c) of the Act. Section 211(c) of the 
Act authorizes the Agency to control or prohibit the manufacturer, 
introduction into commerce, offering for sale, or sale, of any fuel or 
fuel additive if any emission product of such fuel or fuel additive 
causes or contributes to air pollution which may reasonably be 
anticipated to endanger public health or welfare.

II. What Are the Mobile Source Air Toxics?

A. Introduction

    There are hundreds of different compounds and elements that are 
known to be emitted from passenger cars, on-highway trucks, and various 
nonroad equipment. Several of these compounds may have adverse effects 
on human health and welfare.\4\ In recognition of this fact, Congress 
instructed EPA, in Section 202(l)(2) of the Act, to set standards for 
hazardous air pollutants from motor vehicles and their fuels. Except 
for benzene and formaldehyde (specifically mentioned in 202(l)(2)), the 
Act does not specify the compounds that should be considered in such a 
control program. Therefore, the first step in developing a mobile 
source air toxics control program is to identify the compounds that 
should be treated as hazardous air pollutants for purpose of Section 
202(l)(2). Since EPA data suggest that nonroad engines and on-highway 
vehicles emit the same pollutants, EPA has identified this list as a 
list of mobile source air toxics (MSATs).\5\ We are listing 21 MSATs 
using the methodology described below.
---------------------------------------------------------------------------

    \4\ Our authority under 202(a) and 211(c) allows us to address 
air pollution that impacts health or welfare. This initial MSAT list 
focuses on human health. Additional compounds may be added in the 
future due to their ecological impacts, material damage, or 
visibility impairment and it is noteworthy that some of the MSATs on 
the list have important ecological impacts.
    \5\ We have chosen to call our list of toxics a mobile sources 
list to acknowledge that nonroad sources may also contribute 
emissions of these pollutants. For purposes of Section 202(l)(2), 
each of the MSATs is considered a ``hazardous air pollutant from 
motor vehicles and motor vehicle fuels.''
---------------------------------------------------------------------------

B. The Methodology Used to Identify Our List of Mobile Source Air 
Toxics

    EPA developed the list of MSATs by first searching for lists of 
compounds in all available databases and recent studies (i.e., ten 
years old or less) which speciated emissions from motor vehicles and 
their fuels. Data for vehicles and engines more than ten years old are 
considered to be outdated and thus are judged not to be representative 
of current emissions. The lists did not include emissions from 
alternative-fueled vehicles, currently in a very small number of 
vehicles, such as flexible-fueled vehicles. We then compared the 
speciated lists of compounds in these studies to the list of compounds 
in EPA's Integrated Risk Information System (IRIS) database. IRIS is a 
database of compounds that identifies EPA's consensus scientific 
judgment on the characterization of the potential serious adverse 
health effects that may result from a lifetime exposure to a substance 
(discussed in more detail below).
    By comparing the lists of compounds provided in the emission 
speciation databases and studies to the list of compounds in IRIS, we 
generated a list of 21 compounds. An evaluation of the potential for 
serious adverse health effects as reflected in IRIS and in the ongoing 
agency scientific assessments of these compounds indicates that these 
compounds warrant inclusion as MSATs.
    It is important to note that inclusion on the list is not itself a 
determination by EPA that emissions of the compound in fact present a 
risk to public health or welfare, or that it is appropriate to adopt 
controls to limit the emissions of such a compound from motor vehicles 
or their fuels. The purpose of the list is to provide a screening tool 
that identifies those compounds emitted from motor vehicles or their 
fuels for which further evaluation of emissions controls is 
appropriate. In conducting any such further evaluation, pursuant to 
sections 202(a) or 211(c) of the Act, EPA would consider whether 
emissions of the compound cause or contribute to air pollution which 
may reasonably be anticipated to endanger public health or

[[Page 17235]]

welfare. Such an evaluation would also consider the appropriate level 
of any controls, based on the criteria established in section 
202(l)(2). Inclusion of a compound on the MSAT list does not decide 
these issues, but instead identifies those compounds for which such an 
evaluation would appear to be warranted.
    With regard to emissions from alternative-fueled vehicles, most of 
the compounds included in the exhaust are included on our list of MSATs 
(e.g., formaldehyde, acetaldehyde). It should be noted that, depending 
on the fuel used, these vehicles may also emit unburned ethanol and 
methanol.
    EPA compared the lists of compounds emitted from motor vehicles 
with lists or sources of information on toxic substances other than 
IRIS to determine the reasonableness of the MSAT list. Based on this 
comparison, we requested comments on the possible addition of 
propionaldehyde and 2,2,4-trimethylpentane to the MSAT list. We are not 
adding these compounds to the MSAT list at this time due to the absence 
of an Agency consensus view as expressed on IRIS regarding the adverse 
health effects of these compounds. The MSAT list will be re-evaluated 
in the future as new information is acquired about emissions and/or 
health effects for any mobile source pollutant. Compounds may be added 
to or removed from the list in future rulemaking notices.
1. Identifying Pollutants Emitted From Mobile Sources
    In identifying a list of MSAT, EPA first searched for lists of 
compounds from all available databases and recent (i.e., ten years old 
or less) studies that speciated the emissions from motor vehicles and 
their fuels. Many toxic air pollutants are hydrocarbons (HCs) by their 
chemical nature and thus will be identified only if the HCs are 
chemically separated (speciated). In addition, the compounds that 
comprise the particulate phase of mobile source emissions must also be 
chemically speciated. Many test programs that characterize vehicle 
emissions identify only total hydrocarbons and particulate matter 
without separating the individual species of hydrocarbons and other 
elements.
    The databases and recent studies reporting emissions from light-
duty gasoline vehicles (LDGV), heavy-duty diesel vehicles (HDDV), 
heavy-duty gasoline vehicles (HDGV), and gasoline-powered nonroad 
engines are identified in Appendix I located at the end of Chapter 2 of 
the TSD. Data for other vehicle and engine types (e.g., light-duty 
diesel engines and nonroad diesel engines) either do not exist or are 
outdated (more than 10 years old) and thus are judged not to be 
representative of current emissions. However, it is unlikely that the 
lack of recent data for these particular vehicle and engine types would 
lead us to overlook compounds that should be included on our list of 
MSATs, because the combustion processes for these missing vehicle and 
engine types are similar to those for the vehicle and engine types for 
which we do have data.
2. Using IRIS to Identify Pollutants With Potential Serious Adverse 
Health Effects
    The Integrated Risk Information System (IRIS) is an EPA database of 
scientific information that contains the Agency consensus scientific 
positions on the potential serious adverse health effects that may 
result from lifetime (chronic) exposure to substances found in the 
environment.\6\ IRIS currently provides health effects information on 
over 500 specific chemical compounds.
---------------------------------------------------------------------------

    \6\ EPA IRIS Database, http://www.epa.gov/iris/intro.htm
---------------------------------------------------------------------------

    IRIS contains chemical-specific summaries of qualitative and 
quantitative health information. IRIS information may include the 
reference concentration (RfC) for noncancer health effects resulting 
from chronic inhalation exposure, the reference dose (RfD) for 
noncancer health effects resulting from chronic oral exposure, and the 
carcinogen assessment for both oral and inhalation exposure. The RfC or 
RfD is an estimate (with uncertainty spanning perhaps an order of 
magnitude or more) of a daily exposure to the human population 
(including sensitive subgroups) that is likely to be without 
appreciable risk of deleterious noncancer effects during a lifetime. 
Because of the public health conservative methodology in deriving the 
RfC or RfD, it is possible that exposure above the RfC or RfD may not 
pose an appreciable risk; however the significance of exceedances must 
be evaluated on a case-by-case basis. Combined with information on 
specific exposure situations, the summary health hazard information in 
IRIS may be used in evaluating potential public health risks from 
environmental contaminants. IRIS also lists compounds for which the 
Agency has reviewed currently available information and concluded that 
(1) there are insufficient data to calculate an RfC or RfD for the 
noncancer hazard potentially posed by the compound(s), and/or (2) there 
is an absence of sufficient information to identify a cancer hazard.
    Before a substance is listed on the IRIS database, it goes through 
a thorough scientific evaluation. This consensus and review process, 
managed by EPA's Office of Research and Development (ORD), consists of 
(1) an annual Federal Register announcement of the IRIS agenda and a 
call for scientific information from the public on the selected 
chemical substances, (2) a search of the current literature, (3) 
development of health assessment and draft IRIS summaries, (4) internal 
EPA peer review, (5) external peer review, (6) Agency consensus review 
and management approval within EPA, (7) preparation of final IRIS 
summaries and supporting documents, and (8) entry of summaries and 
supporting documents into the IRIS database.
C. List of Mobile Source Air Toxics
    In our notice of proposed rulemaking we listed 21 MSATs. We 
received comments on six proposed MSATs as well as other compounds. We 
are finalizing this list of 21 compounds, but we have changed the 
listing for diesel exhaust to diesel particulate matter and diesel 
exhaust organic gases. A discussion of the comments received on the 
proposed MSAT list is provided below and the MSAT list is provided in 
Table II-1.

          Table II-1.--List of Mobile Source Air Toxics (MSATs)
------------------------------------------------------------------------
                               Diesel Particulate
                                 Matter + Diesel
        Acetaldehyde            Exhaust  Organic            MTBE
                               Gases (DPM + DEOG)
------------------------------------------------------------------------
Acrolein....................  Ethylbenzene........  Naphthalene.
Arsenic Compounds \1\.......  Formaldehyde........  Nickel Compounds.
                                                     \1\
Benzene.....................  n-Hexane............  POM.\3\
1,3-Butadiene...............  Lead Compounds \1\..  Styrene.

[[Page 17236]]

 
Chromium Compounds \1\......  Manganese Compounds   Toluene.
                               \1\.
Dioxin/Furans \2\...........  Mercury Compounds     Xylene.
                               \1\.
------------------------------------------------------------------------
\1\ Although the different metal compounds generally differ in their
  toxicity, the onroad mobile source inventory contains emissions
  estimates for total metal compounds (i.e., the sum of all forms).
\2\ This entry refers to two large groups of chlorinated compounds. In
  assessing their cancer risks, their quantitative potencies are usually
  derived from that of the most toxic, 2,3,7,8-tetrachlorodibenzodioxin.
 
\3\ Polycyclic Organic Matter includes organic compounds with more than
  one benzene ring, and which have a boiling point greater than or equal
  to 100 degrees centigrade. A group of seven polynuclear aromatic
  hydrocarbons, which have been identified by EPA as probable human
  carcinogens, (benz(a)anthracene, benzo(b)fluoranthene,
  benzo(k)fluoranthene, benzo(a)pyrene, chrysene, 7,12-
  dimethylbenz(a)anthracene, and indeno(1,2,3-cd)pyrene) are used here
  as surrogates for the larger group of POM compounds.

    By comparing the lists of compounds identified in the motor vehicle 
emission databases and studies with the toxic compounds listed in IRIS, 
we identified 21 compounds. Each of these pollutants are known, 
probable, or possible human carcinogens (Group A, B or C) and/or 
pollutants for which the Agency has calculated an RfC or RfD.\7\ We 
therefore consider each of these compounds to be MSATs.
---------------------------------------------------------------------------

    \7\ A further discussion of the potential cancer and noncancer 
risks, and other dose-response information for each MSAT can be 
found in Chapter 3 of the TSD.
---------------------------------------------------------------------------

    In response to public comments we are changing the way we list 
diesel exhaust as an MSAT. We believe a better approach is to list 
diesel particulate matter and diesel exhaust organic gases (DPM + DEOG) 
as the MSAT. This listing approach is more precise about the components 
of diesel exhaust expected to contribute to the observed cancer and 
noncancer health effects and provides a framework for developing 
regulatory control strategies.
    Currently available science, while suggesting an important role for 
the particulate phase component of diesel exhaust, does not attribute 
the serious cancer and noncancer health effects independently to diesel 
particulate matter separate from the organic gas phase components. 
Therefore, this listing approach does not constitute two separate MSAT 
listings but a single listing meant to capture the collection of 
emissions potentially responsible for the cancer and noncancer health 
effects related to diesel exhaust.
    While this listing departs slightly from the approach described 
above, we believe this is reasonable because (1) there are several 
nontoxic components of diesel exhaust (e.g., water vapor, nitrogen, 
oxygen) that we are excluding from the listing, (2) this listing 
includes the components of diesel exhaust that are likely to contribute 
to either the cancer or the noncancer hazard (with the exception of the 
gaseous phase criteria pollutants such as NO<INF>X</INF>, 
SO<INF>2</INF> and CO which are subject to National Ambient Air Quality 
Standards), (3) the more precise listing provides Federal and State 
government, industry, and public interest groups an ability to focus on 
the components of diesel exhaust that pose a potential concern for 
public health, and (4) this focus provides specific targets for 
emissions reductions should future analysis indicate that additional 
controls are necessary.
    Regarding the listing of metals, we have chosen to list the entire 
group of metal compounds if any compound of the metal has been detected 
in motor vehicle exhaust and any compound of the metal is listed in 
IRIS as potentially causing adverse human health effects. Literature 
values report only the total amount of the metal compound identified 
and not the specific form of the metal being emitted in motor vehicle 
exhaust. For example, chromium (Cr) can be emitted from combustion 
sources in different forms, the most toxic of which is Cr+6. In the 
literature, the form of Cr emissions from mobile sources are 
unidentified. In our list of MSAT, we therefore list chromium compounds 
generally, and do not attempt to list specific forms of these metals 
because we lack metal speciation information. When we assess the range 
of potential health impacts associated with exposure to chromium 
compounds, we consider the health effects associated with all forms of 
the compound for which we have health effects information. For 
chromium, the most toxic form in IRIS is Cr+6; hence the health impacts 
described for chromium compounds refer to these most serious effects 
even though it is highly unlikely that all motor vehicle emissions are 
Cr+6. EPA believes this listing approach is a reasonable, health-
protective way to handle the uncertainty surrounding motor vehicle 
emissions of metals. Moreover, it is consistent with Congress' list of 
HAP for stationary sources in Section 112(b) of the Act. At the same 
time we recognize that to accurately assess the actual health risks 
associated with exposure to metal emissions from mobile sources, 
identification of the specific forms of the metals emitted would be 
important.
    With regard to emissions from alternative-fueled vehicles, most of 
the compounds included in the exhaust are included on our list of MSATs 
(e.g., formaldehyde, acetaldehyde). It should be noted that, depending 
on the fuel used, these vehicles may also emit unburned ethanol and 
methanol. Low level ethanol mixtures (10% ethanol and 90% gasoline) are 
widely used in the United States. Higher level ethanol mixtures (e.g., 
85% ethanol) are used as alternative fuel sources in a small number of 
flexible fuel vehicles. There is a paucity of data on potential 
inhalation effects of ethanol, and the compound is not listed in IRIS. 
One commenter responded to our request for comment on the addition of 
ethanol to the list of MSATs based on the presence of ethanol in 
alternative fuels and stated that ethanol should not be listed as an 
MSAT. At this time EPA is not including ethanol in the list of MSATs 
because we do not have an Agency consensus view as expressed on IRIS 
regarding the potential adverse health effects associated with exposure 
to ethanol. The Agency is continuing toxicity testing and risk 
assessment of potential adverse health effects resulting from exposure 
to this compound. We will reassess available information regarding 
potential health effects of exposure to ethanol when we evaluate 
whether additional controls are appropriate in 2003.
    We did not include methanol on our proposed list of MSAT because it 
was not identified in our analysis of speciated emissions from motor 
vehicles. Instead, in the NPRM, we requested comment on whether 
methanol and ethanol, by virtue of their use in alternative fuel 
vehicles, should be included on the list.
    During the comment period, one commenter directed EPA to studies 
that identify methanol as an emissions

[[Page 17237]]

product of motor vehicles burning reformulated gasoline. This commenter 
suggested that further research needed to be conducted to determine 
whether methanol should be added to the list of MSAT. Recently 
submitted comments echoed the need to conduct further research and 
requested more time to consider the addition of methanol to the MSAT 
list.
    In order to provide a full opportunity for public comment and to 
respond to these comments in more detail, we will address the addition 
of methanol to the MSAT list in a separate rulemaking. We believe it is 
reasonable to defer making a decision on listing methanol until after 
today's rulemaking, because listing in today's rulemaking would not 
result in additional controls. The existing motor vehicle VOC controls 
will reduce emissions of methanol along with other gaseous toxics and 
fuel controls will need to be considered in subsequent rulemakings. As 
part of the future notice addressing addition of methanol to our list 
of MSAT, we will also evaluate possible controls in accordance with 
section 202(l)(2) as appropriate.
    In the notice of proposed rulemaking we compared lists of emitted 
compounds to four lists of toxic air pollutants to confirm that our 
MSAT list was reasonable. The four lists of toxic air pollutants we 
used were: the Clean Air Act (CAA) Section 112(b) list of hazardous air 
pollutants; California EPA (CalEPA) list of toxic air contaminants 
(TAC); U.S. Department of Health and Human Service Agency for Toxic 
Substances and Disease Registry (ATSDR) list of Minimal Risk Levels 
(MRLs); and International Agency for Research on Cancer (IARC) 
monographs on cancer. Comparing these four lists against the emissions 
speciation studies and databases, we identified two additional 
compounds not included on our list of MSATs--propionaldehyde and 2,2,4-
trimethylpentane. Comments we received on these compounds suggested 
either that (1) further study was needed to determine the potential for 
adverse health effects or that (2) both compounds should be added to 
the list of MSATs based on their presence in the CAA section 112(b) HAP 
list, or due to the presence of these compounds on the emissions lists.
    At this time EPA is not including propionaldehyde or 2,2,4-
trimethylpentane in the list of MSATs because we do not have an Agency 
consensus view as expressed on IRIS regarding the potential adverse 
health effects associated with exposure to these pollutants. EPA 
assessments of these compounds have been proposed and we will use all 
currently available information to reassess the possible inclusion of 
these compounds in the list of MSATs when we evaluate whether 
additional controls are appropriate in 2003.

III. How Are Motor Vehicle Emission Control Programs Reducing MSAT 
Emissions?

    In the previous section we identified the 21 MSATs. We now turn to 
an evaluation of how our various mobile source control programs will 
affect the inventories of these air toxics.
    The data and information available on emissions of these 21 MSATs 
vary considerably. While we have baseline inventory data for all of the 
MSATs except naphthalene, we do not have inventory projections for all 
of them. Therefore, we are examining the projected impacts of our 
current and proposed mobile source control programs by groupings of air 
toxics. We do have specific projections of future emissions for five 
gaseous toxics (benzene, formaldehyde, 1,3-butadiene, acetaldehyde, 
MTBE) and for diesel PM (as the surrogate for DPM + DEOG) and we 
present these in this section. We do not have emissions projections for 
the remaining gaseous toxics (acrolein, POM, styrene, toluene, xylene, 
ethylbenzene, naphthalene, and n-hexane) but, because these compounds 
are part of VOCs, we believe it is reasonable to utilize VOC emissions 
inventory projections to estimate the expected impact of our control 
programs on these other gaseous MSATs. Finally, we also do not have 
emissions inventory projections for the metals on the MSAT list 
(arsenic compounds, chromium compounds, mercury compounds, nickel 
compounds, manganese compounds, and lead compounds) or for dioxins/
furans. While metal emissions and dioxin/furans emissions are 
associated with particles and it is possible that some of these 
compounds track PM emissions to some extent, we do not have good data 
on these relationships. Therefore, we are not presenting emission 
projections for these compounds in this action. We believe this is 
reasonable because the mobile source contribution to metals inventories 
is small and comes primarily from engine wear and impurities in engine 
oil, or from fuel additives.
    As we describe in the following discussion, there have been and 
will continue to be significant reductions in MSAT emissions as a 
result of our mobile source regulations. By 2020, we project on-highway 
emission control programs (up to and including our Tier 2 control 
program and our proposed 2007 heavy-duty engine rule) will reduce 
benzene emissions by 73 percent, formaldehyde emissions by 76 percent, 
1,3-butadiene emissions by 72 percent, and acetaldehyde emissions by 67 
percent from 1990 levels. Under these same controls we project on-
highway diesel PM emissions will be reduced by 94 percent by 2020, as 
compared with 1990 levels. Nonroad engines and equipment also 
contribute substantially to levels of MSAT emissions and have only in 
recent years been subject to emission standards. Since nonroad engines 
are not subject to the same stringent controls as on-highway vehicles, 
the reductions from these sources are more moderate than those for on-
highway sources.
    The discussion in this section consists of two parts. First, we 
describe current inventories of MSAT emissions. Next, we describe how 
our on-highway emission control programs will reduce these inventories. 
Interested readers should refer to Chapter 4 of our TSD for more 
detailed information about the methodology we used to compile these 
inventories and the results of our analysis. We consider the impacts of 
our nonroad engine control programs on MSAT emissions in Section VI of 
this preamble.

A. Baseline Inventories

    We developed inventory estimates for several gaseous MSATs 
(acetaldehyde, benzene, 1,3-butadiene, formaldehyde, MTBE) and also for 
diesel PM as part of the 1999 study, ``Analysis of the Impacts of 
Control Programs on Motor Vehicle Toxic Emissions and Exposure in Urban 
Areas and Nationwide,'' (hereafter referred to as the 1999 EPA Motor 
Vehicle Air Toxics Study, or the 1999 Study).\8\ The pollutants 
examined in the 1999 Study were chosen because we had adequate data to 
perform a rigorous modeling analysis for those pollutants. The 1999 
Study examined the impact of a variety of parameters including fuel 
properties, emission control technologies, and type of in-use operation 
on the 1990 and 1996 emissions inventories for these six pollutants. 
The 1990 baseline represents estimated emissions before any of the 
programs added by the1990 Clean Air Act Amendments were implemented. 
The 1996 estimates reflect toxics emissions with some of the new Clean 
Air Act programs in place, such as Phase 1 of the RFG program. Note 
that

[[Page 17238]]

since completion of the 1999 Study, we have updated our estimates of 
diesel PM emissions and our estimates of toxics emissions from heavy-
engines (as part of improvements made with regard to heavy-duty engine 
modeling). Our updated baseline toxics inventory estimates are 
presented in Table III-1. It should also be noted that these estimates 
are only for on-highway vehicles.
---------------------------------------------------------------------------

    \8\ Analysis of the Impacts of Control Programs on Motor 
Vehicles Toxics Emissions and Exposure in Urban Areas and Nationwide 
(Volumes 1 and 2), November 1999. EPA420-R-99-029/030. This report 
can be accessed at http://www.epa.gov/otaq/toxics.htm.

Table III-1.--Annual Emissions From On-Highway Vehicles for Selected Air
                               Pollutants
                        [Short tons per year] \a\
------------------------------------------------------------------------
          Compound               1990 Emissions      1996 Emissions \b\
------------------------------------------------------------------------
1,3-Butadiene...............  36,000..............  24,000
Acetaldehyde................  41,000..............  31,000
Benzene.....................  257,000.............  171,000
Formaldehyde................  139,000.............  93,000
Diesel PM...................  235,000 \c\.........  182,000
MTBE........................  55,000..............  67,000
------------------------------------------------------------------------
\a\ In this notice we report emissions in terms of short tons as opposed
  to metric tons.
\b\ The 1996 estimates are based on updated inventories taking into
  consideration the proposed 2007 and later model year heavy-duty engine
  standards.
\c\ For 1990, we used diesel PM estimates from EPA's Trends Report.

    The 1996 National Toxics Inventory (NTI) prepared in connection 
with the Agency's NATA activities also contains emission estimates for 
1,3-butadiene, acetaldehyde, benzene, formaldehyde and MTBE. The 1996 
NTI emission estimates for these compounds differ slightly from those 
generated in the 1999 EPA Motor Vehicle Air Toxics Study, due to 
revisions made to the NTI based on updated vehicle miles traveled (VMT) 
information provided by a number of states, minor changes to the 
emissions model used (the MOBTOX model), and revised heavy-duty 
information. Since DPM + DEOG is not included on the list of 112(b) 
hazardous air pollutants, which is the focus of the 1996 NTI, DPM + 
DEOG estimates were not compiled in the 1996 NTI.
    The 1996 NTI also contains 1996 emissions estimates for several 
other MSATs, and includes data for nonroad \9\ as well as on-highway 
sources. We present these data in Table III-2. We also indicate the on-
highway and nonroad percentages of the national inventories for these 
MSATs (the total national inventories include emissions from on-highway 
and nonroad mobile sources, major and area stationary sources, and 
other sources such as forest fires). Between the 1999 EPA Motor Vehicle 
Air Toxics Study and the 1996 NTI, we have baseline inventory data for 
all of the 21 MSATs except naphthalene.\10\ (For DPM + DEOG, we do not 
have inventory data on the DEOG portion. For this analysis, we are 
using DPM as a surrogate for DPM + DEOG.) While good baseline data 
exist for many of the MSATs, they do not exist for all. As noted 
earlier, we plan to conduct additional research in coordination with 
other toxics research activities that are ongoing in the Agency to 
improve our characterization of toxics emission from mobile sources.
---------------------------------------------------------------------------

    \9\ The nonroad inventory in the 1996 NTI includes emissions 
data for aircraft, commercial marine vessel, locomotives, and other 
nonroad engines. Note that under the Clean Air Act definition, 
nonroad vehicles do not include aircraft. For convenience, in this 
action the term ``nonroad'' will include aircraft except where 
otherwise noted. It should be noted that the NONROAD model, on which 
the estimates for nonroad engines other than locomotive, commercial 
marine vessels, and aircraft are based, is still draft, and the 
emissions estimates based on this model are subject to change.
    \10\ Naphthalene emissions are not reported in the 1996 NTI 
separately from 16-PAH. See Chapter 3 of the TSD for the explanation 
of the linkage between diesel exhaust and diesel PM.

         Table III-2.--1996 On-Highway and Nonroad Emission Inventories of Some MSATs From the 1996 NTI
                                                  [Short tons]
----------------------------------------------------------------------------------------------------------------
                                         On-Highway                  Nonroad                 Mobile Sources
                                --------------------------------------------------------------------------------
            Compound                          Percent of                 Percent of                 Percent of
                                    Tons    Total National     Tons    Total National     Tons    Total National
                                              Emmissions                 Emmissions                 Emmissions
----------------------------------------------------------------------------------------------------------------
1,3-Butadiene \a\..............     23,500              42      9,900              18     33,400              60
Acetaldehyde \a\...............     28,700              29     40,800              41     69,500              70
Acrolein \a\...................      5,000              16      7,400              23     12,400              39
Arsenic Compounds \a\..........       0.25            0.06       2.01            0.51       2.26            0.57
Benzene \a\....................    168,200              48     98,700              28    266,900              76
Chromium Compounds \a\.........         14             1.2         35               3         49             4.2
Dioxins/Furans <SUP>a,</SUP> <SUP>b</SUP>............     0.0001             0.2       N.A.            N.A.     0.0001             0.2
Ethylbenzene...................     80,800              47     62,200              37    143,000              84
Formaldehyde \a\...............     83,000              24     86,400              25    169,400              49
Lead Compounds \a\.............         19             0.8        546            21.8        565            22.6
Manganese Compounds \a\........        5.8             0.2       35.5             1.3       41.3             1.5
Mercury Compounds \a\..........        0.2             0.1        6.6             4.1        6.8             4.2
MTBE...........................     65,100              47     53,900              39    119,000              86
n-Hexane.......................     63,300              26     43,600              18    106,600              44
Naphthalene....................       N.A.            N.A.       N.A.            N.A.       N.A.            N.A.
Nickel Compounds \a\...........       10.7             0.9       92.8             7.6      103.5             8.5
POM (as sum of 7 PAH) \a\......       42.0               4       19.3               2       61.3               6
Styrene........................     16,300              33      3,500               7     19,800              40
Toluene........................    549,900              51    252,200              23    802,100              74

[[Page 17239]]

 
Xylene.........................    311,000              43    258,400              36    569,400             79
----------------------------------------------------------------------------------------------------------------
\a\ These compounds are also on the list of urban HAPs for the Integrated Urban Air Toxics Strategy.
\b\ Mass given in tons of TEQ (toxic equivalency quotient). The EPA Office of Research and Development (ORD) has
  recently developed an inventory for dioxin and dioxin-like compounds using different methods than those used
  in the 1996 NTI. For 1995, the EPA-ORD estimate of on-highway emissions of dioxin compounds is 0.00005 tons
  TEQ, comprising 1.5 percent of the national inventory in that year. (The TEQ rates the toxicity of each dioxin
  and furan relative to that of 2,3,7,8-TCDD, which is assigned a TEQ of 1.0.)

    The above inventory data reflect certain interesting 
characteristics of mobile source air toxics emissions. First, mobile 
sources account for the majority of the national inventory of three of 
the gaseous MSATs that are included on the urban HAP list. These three 
are 1,3-butadiene (60 percent), acetaldehyde (70 percent), and benzene 
(76 percent). Mobile sources account for 39 percent of the national 
inventory of acrolein, and 49 percent of the national inventory of 
formaldehyde, two other gaseous urban HAPs. All of these MSATs are 
formed as part of the combustion process except for benzene, which is 
also released through evaporative emissions from gasoline.
    Second, with regard to the other MSATs that are included on the 
urban HAP list, the mobile source contribution generally is small 
(arsenic compounds, chromium compounds, manganese compounds, mercury 
compounds, nickel compounds, POM, and dioxins/furans). The sole 
exception is lead compounds. Mobile sources contribute 23 percent to 
national inventories of lead compound emissions, due primarily to 
nonroad sources and, more specifically, to the use of a lead-additive 
package used to boost the octane of aviation gasoline.\11\ The mobile 
source contribution to the other metals on the urban HAP list comes 
primarily from engine wear, some fuel additives, or impurities in 
engine oil.
---------------------------------------------------------------------------

    \11\ Aviation gasoline is used by a relatively small number of 
aircraft, those with piston engines, which are generally used for 
personal transportation, sightseeing, crop dusting, and similar 
activities.
---------------------------------------------------------------------------

    With regard to the gaseous MSATs that are not included on the urban 
HAP list (ethylbenzene, MTBE, n-hexane, toluene, and xylene), mobile 
source contributions are high because of the presence of these 
compounds in gasoline.
    In addition, mobile sources account for almost all diesel PM 
emissions. A limited number of stationary sources, such as large 
generators, do operate on diesel fuel. Because there are relatively few 
stationary sources that operate on diesel fuel, we believe that diesel 
PM from stationary sources is relatively small compared to diesel PM 
from mobile sources. (However, for this analysis we have not generated 
an estimate of diesel PM from stationary sources.) As shown in Table 
III-1, above, we estimate that 1996 on-highway diesel PM emissions are 
approximately 182,000 tons. We estimate that 1996 nonroad diesel PM 
emissions are approximately 346,000 tons, as discussed in Section VI of 
this notice.\12\
---------------------------------------------------------------------------

    \12\ It should be noted that the nonroad diesel PM emissions 
estimate is based on the draft NONROAD model and is subject to 
change.
---------------------------------------------------------------------------

B. Impacts of Motor Vehicle Emission Controls on Emission Inventories

1. Description of Emission Control Programs
    Many of the programs that we have put in place since the passage of 
the 1990 Clean Air Act Amendments to achieve attainment of the National 
Ambient Air Quality Standards (NAAQS) for ozone, PM and CO have also 
reduced MSAT emissions. For example, measures to control hydrocarbons 
from motor vehicles are also effective in controlling gaseous toxics. 
In addition, certain programs address air toxics directly, such as the 
RFG program and the gasoline lead phase-out. In this section we briefly 
describe several categories of mobile source emission control measures 
that have helped reduce inventories of these harmful compounds. These 
programs include:
    <bullet> More stringent vehicle standards and test procedures. The 
1990 Clean Air Act Amendments set specific emission standards for 
hydrocarbons and for PM. Air toxics are present in both of these 
pollutant categories. As vehicle manufacturers develop technologies to 
comply with the hydrocarbon and particulate standards (e.g., more 
efficient catalytic converters), we expect air toxics to be reduced as 
well. Since 1990, we have developed a number of programs to address 
exhaust and evaporative hydrocarbon emissions and PM emissions. Some of 
the key programs are the Tier 1 and NLEV standards for light-duty 
vehicles and trucks; enhanced evaporative emissions standards; the 
supplemental federal test procedures (SFTP); urban bus standards; and 
heavy-duty diesel and gasoline standards for the 2004/2005 time frame.
    <bullet> Recent motor vehicle/fuel control initiatives. Two of our 
recent initiatives to control emissions from motor vehicles and their 
fuels are the Tier 2 control program and our proposed 2007 heavy-duty 
engine rule. Together these two initiatives define a set of 
comprehensive standards for light-duty and heavy-duty motor vehicles 
and their fuels. In both of these initiatives, we treat vehicles and 
fuels as a system. The Tier 2 control program establishes stringent 
tailpipe and evaporative emission standards for light-duty vehicles and 
a reduction in sulfur levels in gasoline fuel beginning in 2004. The 
proposed 2007 heavy-duty engine rule would establish stringent exhaust 
emission standards for heavy-duty engines and vehicles for the 2007 
model year as well as reductions in diesel fuel sulfur levels starting 
in 2006.
    <bullet> Limits on gasoline volatility. Volatility is a measure of 
how easily a liquid evaporates. As described earlier, some toxics such 
as benzene are present in gasoline and get into the air when gasoline 
evaporates. We imposed limits on gasoline volatility in the early 1990s 
to control evaporative emissions of both hydrocarbon and toxic 
compounds (most air toxics are hydrocarbons, so programs designed to 
reduce hydrocarbon emissions also reduce air toxics).
    <bullet> Reformulated gasoline. The 1990 Clean Air Act Amendments 
required

[[Page 17240]]

reformulated gasoline to be introduced in the nation's most polluted 
cities beginning in 1995. From 1995 through 1999, these gasolines were 
required to provide a minimum 16.5 percent reduction in air toxics 
emissions over typical 1990 gasolines, increasing to a 21.5 percent 
minimum reduction beginning in the year 2000. The air toxics reductions 
have been achieved mainly by further reducing gasoline volatility and 
by reducing the benzene, aromatics, sulfur, and olefin content of the 
gasoline.
    <bullet> Phase-out of lead in gasoline. One of the first programs 
to control toxic emissions from motor vehicles was the removal of lead 
from gasoline. Beginning in the mid-1970s, unleaded gasoline was phased 
in to replace leaded gasoline. The phase-out of leaded gasoline was 
completed January 1, 1996 when lead was banned from motor vehicle 
gasoline. The removal of lead from gasoline has essentially eliminated 
on-highway mobile source emissions of this highly toxic substance.
    <bullet> Ensuring emissions are controlled throughout the vehicle's 
life. Many of our vehicle standards require certification of new 
engines and vehicles, but ensuring continued performance of emission 
controls can be difficult. The Clean Air Act establishes several 
programs to make sure vehicle emission controls are functioning 
properly in actual use. These programs include requirements for 
periodic emission inspections (I/M, or inspection and maintenance 
programs) and for computerized on-board diagnostic systems that alert 
drivers and mechanics to malfunctioning emission controls.
    We encourage the interested reader to refer to Chapter 1 of our TSD 
for more detailed information about these programs.
2. Emission Reductions From Control Programs
    We expect the mobile source emissions control programs described 
above to have beneficial impacts on national inventories of MSATs. The 
remainder of this section summarizes our MSAT inventory projections. 
First, we present an overview of the methodologies used to project 
future emissions inventories. Next, we present the results of our 
inventory projections. We encourage interested readers to refer to 
Chapter 4 of our TSD for a more detailed discussion of these 
projections and how we developed them. The inventory projections in 
this section are for on-highway vehicles only. Projections of nonroad 
MSAT emissions are included in Section VI of this preamble.
a. Overview of Inventory Sources
    We developed inventory projections that reflect our current and 
proposed control programs, described above, for five gaseous MSATs, for 
VOC, and for diesel PM for the years 2007 and 2020. The inventory 
projections for the five gaseous toxics are based on the 1999 EPA Motor 
Vehicle Air Toxics Study, updated to incorporate a variety of new 
information on on-highway vehicles.
    The 1999 Study estimated on-highway motor vehicle air toxics 
emissions for ten urban areas (Atlanta, Chicago, Denver, Houston, 
Minneapolis, New York City, Philadelphia, Phoenix, Spokane, and St. 
Louis) and 16 geographic regions. These areas were selected to reflect 
the range of potential fuels, temperatures, and I/M programs observed 
in the United States. Every county in the country was then ``mapped'' 
to one of these modeled areas or regions. Mapping was done based on a 
combination of geographic proximity, I/M program, and fuel control 
programs. The estimation methodology used in the 1999 Study was similar 
to that used in our original 1993 Motor Vehicle Related Air Toxics 
Study. In our approach, the MOBILE model is used to generate total 
organic gas (TOG) emissions from on-highway motor vehicles by vehicle 
class and model year. Toxics fractions, developed as a percentage of 
the toxic compound of interest contained in TOG emissions, are then 
applied to the MOBILE-based TOG emission rates (reported in grams per 
mile) to arrive at toxics emission rates (reported in grams per mile or 
milligrams per mile). For light-duty vehicles, information developed 
for the Complex Model was used to develop these relationships. These 
toxics fractions are developed as a function of vehicle class (e.g., 
light-duty, heavy-duty), fuel type (e.g., gasoline or diesel), fuel 
composition, and technology type (e.g., non-catalyst, catalyst).
    We do not have detailed emissions data for gaseous MSATs other than 
the five gaseous MSATs examined in the 1999 Study. However, we expect 
the trend for other gaseous MSATs, including acrolein, POM, styrene, 
xylene, toluene, ethylbenzene, naphthalene, and n-hexane, to follow 
that of VOC, since all of these compounds are VOCs. We recognize that 
some gaseous MSATs may not decrease at the same rate as VOCs overall. 
Without having more detailed emission data for each of the MSATs, 
however, we are unable to project how those rates may differ. Because 
we do not have emissions data for DEOG, we are using diesel PM as the 
surrogate for the MSAT listed as DPM and DEOG. Where we have data 
regarding specific constituents in the diesel exhaust organic gas phase 
we present that information.
    Our VOC and diesel PM emission estimates are derived from several 
sources. The 1996 and later values are based on updated modeling that 
factors in the impact of the proposed 2007 heavy duty engine standards. 
The 1990 VOC emission estimate is based on the 1999 EPA Motor Vehicle 
Air Toxics Study,\13\ and the 1990 diesel PM is from EPA's Trends 
Report.\14\
---------------------------------------------------------------------------

    \13\ The analysis methodology is described in a memorandum from 
Meredith Weatherby, Eastern Research Group, to Rich Cook, EPA, 
entitled ``Estimating of 1990 VOC and TOG Emissions'' in EPA Air 
Docket A-2000-12.
    \14\ EPA, 2000. National Air Pollution Emission Trends, 1900-
1998 (March 2000). Office of Air Quality Planning and Standards, 
Research Triangle Park, NC. Report No. 454/R-00-002.
---------------------------------------------------------------------------

    We are not reporting inventory trends for the metals on our list of 
MSATs (arsenic compounds, chromium compounds, mercury compounds, nickel 
compounds, manganese compounds, and lead compounds) or for dioxins/
furans because we do not have good data on these relationships at this 
time. Metals in mobile source exhaust can come from fuel, fuel 
additives, engine oil, engine oil additives, or engine wear. Formation 
of dioxin and furans requires a source of chlorine. Thus, while metal 
emissions and dioxin/furan emissions are associated with particles and 
it is possible that some of these compounds track PM emissions to some 
extent, there are a number of other factors that contribute to 
emissions, and we do not have good data on these relationships.
    We did receive one comment regarding inputs to the emission 
inventory modeling performed for the NPRM. The National Petrochemical 
and Refiners Association (NPRA) commented that the vehicle miles 
traveled (VMT) growth rates for heavy-duty vehicles, which were based 
on 1998 estimates from the Energy Information Agency (EIA), were too 
high. In support of their comments, NPRA submitted EIA's 1999 estimates 
which were lower than those from 1998 used by EPA. For the inventory 
projections contained in today's action, we have retained the same 
growth rates used in the NPRM analysis. Based on discussions with EIA, 
we believe the 2000 growth estimates will be higher than both the 1999 
estimates NPRA referenced and the 1998 estimates we used in the NPRM 
analysis.\15\ However,

[[Page 17241]]

because the final 2000 numbers are not yet available from EIA, we are 
retaining the use of the growth rates used in the NPRM as a more 
reasonable estimate than the 1999 growth estimates.
---------------------------------------------------------------------------

    \15\ ``Early Release of the Annual Energy Outlook 2001,'' 
available at www.eia.doe.gov/oaif/aeo/earlyrelease/index.html, 
Energy Information Administration, downloaded from EIA web site on 
December 12, 2000.
---------------------------------------------------------------------------

b. Emission Reductions
    Table III-3 presents the annual emission projections for on-highway 
vehicles for five gaseous toxics, VOC, and diesel PM with our current 
on-highway control programs and the proposed 2007 and later model year 
heavy-duty engine standards. The 1996 inventories presented in Table 
III-3 are slightly higher than the 1996 inventories presented in Table 
III-2 because the estimates of heavy-duty vehicle VMT have been updated 
and improved since the VMT estimates for the 1996 NTI were prepared.

                     Table III-3.--Annual Emmissions Inventories From On-Highway Vehicles <SUP>a</SUP>
                                         [Thousand short tons per year]
----------------------------------------------------------------------------------------------------------------
                        Compound                              1990          1996          2007          2020
----------------------------------------------------------------------------------------------------------------
1,3 Butadiene...........................................            36            24            12            10
Acetaldehyde............................................            41            31            17            13
Benzene.................................................           257           171            89            68
Formaldehyde............................................           139            93            43            34
Diesel PM...............................................           235           182            85            15
MTBE <SUP>b</SUP>..................................................            55            67            26            18
VOC.....................................................         7,585         4,933         3,028        2,153
----------------------------------------------------------------------------------------------------------------
\a\ Includes the impact of our current on-highway control programs and the proposed 2007 and later model year
  heavy-duty engine standards.
\b\ These estimates do not include consideration of EPA's examination of options to phase down or otherwise
  control the use of MTBE under the Toxic Substances Control Act, or legislative authority that EPA has asked
  Congress to provide the Agency to address MTBE use in gasoline.

    Table III-4 summarizes the percent reductions we expect in on-
highway emissions of gaseous MSATs, VOC, and diesel PM from 1990 and 
1996 levels in 2007 and 2020 as a result of our current on-highway 
control programs and the proposed 2007 and later model year heavy-duty 
engine standards.

                           Table III-4.--Reductions in On-Highway Vehicle Emissions <SUP>a</SUP>
----------------------------------------------------------------------------------------------------------------
                                                               Reduction in 2007           Reduction in 2020
                                                         -------------------------------------------------------
                        Compound                            From 1990     From 1996     From 1990     From 1996
                                                            (Percent)     (Percent)     (Percent)     (Percent)
----------------------------------------------------------------------------------------------------------------
1,3 Butadiene...........................................            67            50            72            57
Acetaldehyde............................................            58            46            67            57
Benzene.................................................            65            48            73            60
Formaldehyde............................................            69            54            76            64
Diesel PM...............................................            64            53            94            92
MTBE <SUP>b</SUP>..................................................            52            61            67            73
VOC.....................................................            60            39            72           56
----------------------------------------------------------------------------------------------------------------
\a\ Includes the impact of our current on-highway control programs and the proposed 2007 and later model year
  heavy-duty engine standards.
\b\ These estimates do not include consideration of EPA's examination of options to phase down or otherwise
  control the use of MTBE under the Toxic Substances Control Act, or legislative authority that EPA has asked
  Congress to provide the Agency to address MTBE use in gasoline.

    The results of this analysis show that on-highway emissions of the 
five gaseous MSATs examined are expected to decline by 67 to 76 percent 
by 2020 from 1990 levels with our existing and proposed control 
programs. For some gaseous MSATs, the reductions are even greater. 
Likewise, VOC inventories from on-highway vehicles are projected to 
decrease by 72 percent between 1990 and 2020 and we assume that other 
gaseous toxics would decrease by approximately 72 percent as well. 
Finally, diesel PM emissions are projected to decline by 94 percent by 
2020 from 1990 levels.

IV. Evaluation of Additional Motor Vehicle-Based Controls

    We are not establishing new standards for motor vehicles in this 
rulemaking to control MSAT emissions. Based on the information 
available to the Agency at this time, we have determined that our 
proposed and current control programs for VOC and diesel PM emissions 
from motor vehicles will achieve the greatest degree of MSAT control 
that is feasible when cost and other relevant factors are considered. 
This section summarizes our rationale for this determination, including 
the relationship between EPA's vehicle-based control programs and the 
control of MSATs (especially for those programs established after the 
1990 Clean Air Act Amendments), the impact of our most recent efforts 
to control VOCs, and the possibility of additional control. The 
Technical Support Document contains additional information.
    It is important to note that while we are not adopting new vehicle-
based controls in this rulemaking, we will continue to consider the 
need for, and feasibility of, vehicle-based controls in the future and 
as part of our Technical Analysis Plan. As we have in the past, we will 
also continue to look for opportunities to control MSAT emissions in 
conjunction with other pollutants (e.g., NO<INF>X</INF>, 
SO<INF>2</INF>, VOC). Most of the vehicle-based comments focused on 
these types of controls. These

[[Page 17242]]

comments are addressed in the Response To Comments document.

A. MSATs and Motor Vehicle-Based Controls

    The majority of gaseous MSATs are hydrocarbons that are primarily 
the result of incomplete combustion of petroleum fuels. Since a small 
amount of raw fuel passes through the engine unburned, MSATs present in 
the fuel are also emitted in the exhaust. In either case, the 
technologies used to reduce exhaust hydrocarbons also reduce the 
hydrocarbon species listed as MSATs. This is true whether control is 
achieved through engine or component modifications, add-on devices, or 
the use of aftertreatment devices such as oxidation or three-way 
catalysts. We are not aware of vehicle or engine technologies that 
selectively reduce MSATs without reducing other hydrocarbons to a 
similar degree.
    The other major source of hydrocarbon emissions from motor vehicles 
is fuel vapors. These emissions occur when components of the liquid 
fuel (gasoline or diesel) evaporate when on board the vehicle. The 
emissions are normally separated into refueling emissions and 
evaporative emissions (hot soak, diurnal, and running losses). The 
nature and amount of potential MSATs associated with fuel vapors depend 
primarily on the fuel composition and the temperatures involved. 
Gasoline is volatile and evaporates at normal ambient temperatures, 
while diesel fuel is relatively non-volatile. Thus evaporative 
emissions are only a significant issue for gasoline-fueled vehicles (or 
vehicles using volatile alternative fuels). Evaporative and refueling 
emissions are controlled by eliminating sources of potential liquid and 
vapor leaks within the vehicle fuel system and venting any vapors to an 
activated carbon canister or similar device. Activated carbon 
effectively adsorbs most hydrocarbon compounds, including the common 
evaporative-related MSATs.
    Particulate matter emissions from motor vehicles are primarily 
composed of partially burned carbon and hydrocarbons from the fuel and 
engine oil, and to a lesser degree, metals and other inorganic 
compounds from contaminants or additives in the fuel or engine oil, or 
products of engine wear in the oil. Since our PM exhaust emission 
standards apply without regard to the source of the PM, manufacturers 
must account for all of these emissions. Manufacturers have 
significantly reduced PM emissions associated with unburned fuel and 
engine oil through combustion system and engine modifications. In some 
cases, they have also achieved reductions using aftertreatment.
    To understand the relationship between the Agency's current 
emission control program for on-highway vehicles and the control of 
MSATs, it is important to first understand the structure and scope of 
our current emission control programs. EPA's emission control program 
for on-highway vehicles has historically been divided into two broad 
vehicle/engine categories that we regulate: ``light-duty'' (vehicles 
8,500 pounds gross vehicle weight rating (GVWR) or less) and ``heavy-
duty'' (vehicles above 8,500 pounds GVWR).\16\ Within these light-duty 
and heavy-duty categories, we further distinguish vehicles and 
sometimes establish different emission limits based on vehicle size or 
other factors.
---------------------------------------------------------------------------

    \16\ EPA recently created the new category of ``medium-duty 
passenger vehicles'' (MDPVs) that includes passenger vehicles 8,500-
10,000 pounds GVWR.
---------------------------------------------------------------------------

B. Vehicle-Based Standards To Reduce MSATs From Light-Duty Vehicles

    Before we began regulating automobile exhaust, vehicles typically 
emitted more than 9 grams per mile (gpm) HC in exhaust emissions. Our 
HC emission standards in the 1970s and 1980s cut these levels by more 
than an order of magnitude, to 0.41 gpm in 1980. In 1991, we finalized 
Tier 1 controls for light-duty vehicles and light-duty trucks to be 
phased in from 1994 to 1996 (56 FR 25724). In 1998, we developed an 
innovative, voluntary nationwide program to make new cars, called 
National Low Emission Vehicles (NLEV), significantly cleaner than Tier 
1 cars (63 FR 926). The NLEV program went into effect in the Northeast 
states in 1999 and will go into effect in the rest of the country in 
2001. Table IV-1 illustrates the declining HC exhaust standards through 
the NLEV program.\17\ Also shown in the table are the number of miles 
for which the standards apply, which has increased with time. Thus 
manufacturers need to make their emission control systems more durable 
and reliable over a longer period of time.
---------------------------------------------------------------------------

    \17\ Our programs achieve VOC reductions through standards that 
limit HC, NMHC, or NMOG.

                Table IV-1.--Hydrocarbon (HC) Exhaust Emission Standards for Light-Duty Vehicles
                                                      [GPM]
----------------------------------------------------------------------------------------------------------------
              Year                     1972            1975            1980            1994            2001
----------------------------------------------------------------------------------------------------------------
Standard........................             3.4             1.5            0.41          <SUP>a</SUP> 0.31          <SUP>b</SUP> 0.09
Applicability (Miles)...........          50,000          50,000          50,000         100,000        120,000
----------------------------------------------------------------------------------------------------------------
<SUP>a</SUP> The 1994 standard is a nonmethane hydrocarbon (NMHC) standard.
<SUP>b</SUP> The 2001 standard is a nonmethane organic gas (NMOG) standard. This standard will be replaced by the new multi-
  level Tier 2 NMOG standards, but the average standard level should remain at approximately 0.09 gpm.

    In December 1999, the Agency finalized the Tier 2/sulfur rule 
establishing light-duty requirements that will be phased-in beginning 
with the 2004 model year. These requirements phase-in a set of tailpipe 
emission standards that will, for the first time, apply the same 
standards to passenger cars, light-duty trucks (LDTs), and larger 
passenger vehicles. To enable the very clean Tier 2 vehicle emission 
control technology to be introduced and to maintain its effectiveness, 
nationwide gasoline sulfur requirements were also put into place. The 
Tier 2 program begins in 2004 for passenger cars and light LDTs (LDTs 
up to 6,000 pounds GVWR), while an interim program begins in 2004 for 
heavy LDTs (LDTs over 6,000 pounds GVWR). For heavy LDTs and MDPVs 
(medium-duty passenger vehicles), the Tier 2 standards will be phased 
in beginning in 2008, with full compliance in 2009. Thus, when fully 
implemented, all vehicles designed for passenger use will have to meet 
the stringent new emission standards.
    The Tier 2 program is designed to focus on reducing the ozone and 
particulate matter air quality impact of these vehicles. Ozone 
reductions will be achieved through control of nitrogen oxides and non-
methane hydrocarbons. As discussed above, it is the control of HC 
through the NMOG standards that

[[Page 17243]]

results in the control of the gaseous toxics. The Tier 2 rule also 
established stringent PM standards. Control of PM emissions will occur 
through reductions in gasoline sulfur and the use of aftertreatment for 
diesel vehicles. Because all Tier 2 standards are fuel neutral, the PM 
standards apply to both gasoline and diesel vehicles.
    The Tier 2 standards will reduce new vehicle NO<INF>X</INF> levels 
to an average of 0.07 grams per mile. The NMOG standards vary depending 
on which of the various ``bins'' (i.e., certification categories) the 
manufacturers choose to use in complying with the average 
NO<INF>X</INF> standard. However, we expect significant reductions in 
NMOG emissions from these vehicles as a result of the more stringent 
NMOG standards in the bins and the need to select bins to meet the 
NO<INF>X</INF> average. When fully phased-in, we expect fleet average 
NMOG levels at or below the 0.09 g/mi level. This will represent a 99 
percent reduction from uncontrolled pre-1970 levels. Since these 
controls should be at least as effective at reducing MSATs, these 
standards should also reduce MSATs to a similar extent from 
uncontrolled levels.
    The Tier 2 rule also finalized formaldehyde standards that 
harmonize federal standards with the California's LEV II program. 
Section 202(l)(2) of the Clean Air Act instructs the Agency to 
promulgate regulations that, at a minimum, apply to emissions of 
benzene and formaldehyde. We believe that the shift to a toxics 
emissions performance requirement will limit emissions of these two 
pollutants. In response to comments, we also considered setting more 
stringent vehicle-based formaldehyde standards in this FRM. However, 
since we are not aware of any technology that could specifically reduce 
formaldehyde emissions, we have no confidence that more stringent 
vehicle or engine formaldehyde standards would be feasible. 
Nevertheless, we remain confident that the combination of our Toxics 
Performance Standard, Tier 2 formaldehyde standards and Tier 2 NMOG 
standards described above will achieve significant reductions in 
formaldehyde emissions.
    In order to meet strict Tier 2 standards on a fleet-wide average, 
manufacturers will have to use a combination of sophisticated 
calibration changes and emission system hardware modifications to 
increase and maintain high control system efficiency. They will be 
challenged to maintain tight air-fuel control and improved catalyst 
performance, especially achieving better catalyst thermal management. 
Minimizing the time necessary for the catalyst to reach its operating 
temperature will be especially critical, since the vast majority of 
emissions occur in the minute or less which passes before the catalyst 
``lights off.'' Many manufacturers are going to have to depend more on 
the precious metal palladium for oxidation of NMOG and CO emissions, as 
well as the reduction of NO<INF>X</INF>. Palladium is more tolerant to 
high temperatures and will enable manufacturers to increase catalyst 
efficiency in a broad range of in-use conditions. These technologies 
will be highly effective at reducing MSATs, including benzene and 
formaldehyde.
    Our existing regulations also contain test procedures to measure 
evaporative hydrocarbon emissions during a simulated parking event 
(diurnal emissions) and immediately following a drive (hot soak 
emissions). In 1993, we finalized more stringent evaporative emission 
test procedures which apply to light-duty and heavy-duty gasoline 
vehicles. That rule also addressed fuel spitback and spillage during 
refueling. These procedures were fully phased in by 1999 (58 FR 16002). 
The Tier 2 rule included even more stringent requirements. The Tier 2 
evaporative standards represent, for most vehicles, more than a 50-
percent reduction in diurnal plus hot soak standards from those that 
will be in effect in the years immediately preceding Tier 2 
implementation. These standards should achieve similar reductions in 
gaseous MSATs. In fact, since the activated carbon used to capture 
evaporative emissions preferentially adsorbs larger organic molecules, 
these controls may achieve a greater degree of control of MSATs, which 
are generally larger and heavier than many other gasoline components. 
Under these requirements, it is likely that manufacturers will also 
need to upgrade materials and both increase the reliability of fuel/
vapor hose connections and fittings and reduce the number used in the 
system. We have also finalized on-board refueling vapor recovery (ORVR) 
requirements for light-duty gasoline vehicles (59 FR 16262, April 6, 
1994). ORVR is a nationwide program for capturing refueling emissions 
by collecting vapors from the vehicle gas tank and storing them in the 
vehicle during refueling. The fuel vapors are then purged into the 
engine air intake to be burned while the vehicle is being driven.
    Taken as a whole, the Tier 2 program presents the manufacturers 
with significant challenges in the coming years. It will require the 
use of hardware and emission control techniques and strategies not used 
in the fleet today. Bringing essentially all passenger vehicles under 
the same emission control program regardless of their size, weight, and 
application is a major engineering challenge. While there may be other 
prototype technologies on the horizon which could potentially reduce 
cold-start emissions and therefore air toxics, we have concluded that 
it would not be appropriate to set tighter standards in this FRM based 
on these prototype technologies. We are not convinced that these 
technologies would be feasible and cost effective on a fleet-wide basis 
in the near future. This is discussed in more detail in Chapter 6 of 
the TSD.

C. Vehicle-Based Standards To Reduce MSATs From Heavy-Duty Engines

    Table IV-2 summarizes the hydrocarbon and PM standards for heavy-
duty engines. Also shown in the table are estimates of emission rates 
from uncontrolled engines. In addition, the standards in our recently 
proposed 2007 heavy-duty rulemaking are also shown in the table.\18\
---------------------------------------------------------------------------

    \18\ 65 FR 35429, June 2, 2000.

                  Table IV-2.--HC and PM Exhaust Emissions and Standards for Heavy-Duty Engines
----------------------------------------------------------------------------------------------------------------
                                 Gasoline (Otto-Cycle)                            Diesel
                             -----------------------------------------------------------------------------------
                                      Exhaust HC                  Exhaust HC                  Exhaust PM
----------------------------------------------------------------------------------------------------------------
Uncontrolled Emissions......  10-13 g/bhp-hr............  4 g/bhp-hr................  0.7 g/bhp-hr.
Current Standards...........  1.1 g/bhp-hr <SUP>a</SUP>............  1.3 g/bhp-hr..............  0.10 g/bhp-hr.
2004/5 Standards............  0.25 g/bhp-hr <SUP>b</SUP>...........  0.4 g/bhp-hr <SUP>c</SUP>............  0.10 g/bhp-hr.

[[Page 17244]]

 
Proposed 2007 Standards.....  0.14 g/bhp-hr.............  0.14 g/bhp-hr.............  0.01 g/bhp-hr.
----------------------------------------------------------------------------------------------------------------
<SUP>a</SUP> Current standard is 1.9 g/bhp-hr for Otto-cycle vehicles over 14,000 GVWR.
<SUP>b</SUP> Standard was set as a 2005 NMHC+NO<INF>X</INF> standard; level shown is estimated equivalent NMHC standard.
<SUP>c</SUP> Standard is a 2004 NMHC+NO<INF>X</INF> standard; level shown is estimated equivalent NMHC standard.

    With regard to exhaust emission standards, the proposed 2007 heavy-
duty engine standards would reduce hydrocarbon emissions to levels 
approaching 0.1 g/bhp-hr for both gasoline and diesel. This would 
result in a significant reduction even when compared to the 2004 
standards. Similarly, the new exhaust PM standard for heavy-duty diesel 
engines is stringent. This standard (0.01 g/bhp-hr) is a 90-percent 
reduction from current standards which are currently being achieved 
with significant combustion chamber and engine modifications. Achieving 
a 0.01 g/bhp-hr standard will require the use of catalyzed PM traps. 
This technology will also result in HC emission reductions. It is 
further worth noting that the proposed 2007 standards include 
provisions for a closed crankcase for turbocharged diesel engines. 
Crankcase emissions from these engines are a significant source of 
MSATs (PM and hydrocarbons) that has previously remained uncontrolled.
    For chassis-certified gasoline-powered heavy-duty vehicles, EPA 
proposed that beginning in 2007 they meet exhaust hydrocarbon standards 
of similar stringency to those discussed above for Tier 2. These 
include hydrocarbon standards of 0.195 g/mi for vehicles of 8,500-
10,000 lbs GVWR and 0.23 g/mi for vehicles of 10,001-14,000 lbs GVWR.
    Fuel quality changes will enable gasoline and diesel-powered 
vehicles/engines to meet the more stringent standards over their full 
life. As part of the Tier 2 rule, EPA promulgated provisions limiting 
gasoline sulfur levels to 30 ppm average and 80 ppm cap. This program 
phases in beginning in 2004, and will enable a new generation of 
vehicle emission control for heavy-duty gasoline vehicles and also 
improve the emission performance of the current fleet. Sulfur is a fuel 
contaminant, and controlling sulfur will also reduce sulfate PM 
emissions. The 2007 heavy-duty proposal mentioned above also includes 
provisions that would greatly reduce the sulfur content of current on-
highway diesel fuel. Not only would this reduction enable the emission 
control technology now under development, but it would also reduce 
sulfate PM emissions .
    We have recently extended our onboard diagnostic (OBD) requirements 
to heavy-duty gasoline engines up to 14,000 pounds GVWR (65 FR 59896, 
October 6, 2000). These OBD provisions require that vehicle 
manufacturers install dashboard indicators that alert drivers to the 
need for emission-related maintenance, and electronic monitors that 
store codes in the vehicle's computer to assist mechanics in the 
diagnosis and repair of the malfunction. As some of the commenters 
noted, requiring that all highway vehicles incorporate these OBD 
systems will ensure good control of in-use emissions, including MSAT 
emissions. We are in the process of developing a proposal that would 
address OBD provisions for all other heavy-duty vehicles.
    We have also proposed in the 2007 rulemaking more stringent 
evaporative standards, which will force even further refinements in 
fuel/vapor systems. Beginning in 2005, onboard refueling vapor control 
will be required for all heavy-duty gasoline-powered vehicles (65 FR 
59896, October 6, 2000). This would reduce emissions by 95 percent from 
current uncontrolled levels. In addition, as part of the proposed 2007 
rulemaking, EPA proposed to reduce evaporative emission standards by 50 
percent over current standards. Both refueling controls and further 
evaporative controls will reduce evaporative emissions of air toxics 
from heavy-duty vehicles even further.
    The proposed rulemaking for 2007 heavy-duty engine and vehicle 
standards contains extensive analysis and discussion of the 
technological feasibility of potential HC and PM emission controls for 
heavy-duty engines. That draft analysis demonstrated EPA's belief at 
the time of the proposal that those heavy-duty standards would be the 
greatest degree of emission reduction achievable through the 
application of technology that will be available considering costs and 
other relevant factors. EPA believes that the proposed rule to 
establish 2007 model year standards for heavy-duty diesel engines 
satisfies the criteria in section 202(a) as well as 202(l)(2) and 
therefore defers to the technical decisions made in that rulemaking.

D. Conclusions Regarding Vehicle-Based Standards

    We are not establishing new standards for motor vehicles in this 
rulemaking to control MSAT emissions. We believe our decision in this 
regard is appropriate given the information currently available. We are 
also confident that our existing programs (and proposed programs, if 
finalized) will continue to achieve very significant reductions in MSAT 
emissions.
    The Tier 2 program represents a comprehensive, integrated package 
of exhaust, evaporative, and fuel quality standards. The Tier 2 program 
will achieve significant reductions in NMHC, NO<INF>X</INF>, and PM 
emissions from all light-duty vehicles in the program. These reductions 
will include reductions in MSATs. Emission control in the Tier 2 
program will be based on the widespread implementation of advanced 
catalyst and related control system technology. The standards are very 
stringent and will require manufacturers to make full use of nearly all 
available emission control technologies. To illustrate this point, it 
is worth noting that about 80 percent of all remaining emissions from a 
well-maintained Tier 2 vehicle will occur in the first 60 seconds of 
operation, before the catalyst ``lights-off.'' Manufacturers will have 
to optimize both their cold-start strategies and the efficiency of 
warmed systems to achieve the Tier 2 levels. Compliance with the Tier 2 
standards will require the application of emission technology not 
widely used in the light-duty fleet today and in some cases the use of 
technological approaches still under development. Based on the 
information available to the Agency at this time, we believe that the 
technologies that will be applied to meet the Tier 2 requirements 
provide the greatest achievable reductions in emissions of air toxics 
as well, considering costs and other relevant factors.
    The existing emission control program for heavy-duty engines and

[[Page 17245]]

vehicles has already achieved major reductions in MSAT emissions . New 
more stringent emission standards for heavy-duty engines will take 
effect in 2004 and 2005. We have also proposed a further initiative 
that would require additional control of heavy-duty vehicle/engine 
emissions (65 FR 35430, June 2, 2000). This would establish new heavy-
duty engine and vehicle emission standards beginning with model year 
2007. The 2007 rulemaking is being finalized separately in a broader 
rulemaking that addresses the complicated implementation issues 
associated with proposed emission standards. In developing a final rule 
that would establish these standards, the Agency intends to adopt 
standards that would result in the greatest achievable reductions in 
emissions of air toxics as well, considering costs and other relevant 
factors.
    We have also made significant progress in the area of in-use 
operation. To address the malmaintenance issue, we have established OBD 
requirements for manufacturers (both light-duty and heavy-duty). To 
address both the malmaintenance and tampering issues, we are working 
with states to develop and optimize inspection and maintenance (I/M) 
programs that monitor the emission performance of in-use vehicles. 
Historically, these programs have relied on tailpipe testing to 
identify high-emitting vehicles. However, these programs have begun to 
rely more on the OBD systems to identify the high-emitting vehicles, as 
well as the cause of the emission problem. We are also investigating 
ways in which we could encourage the use of new emission controls on 
older vehicles. As described in the Response to Comments, these are not 
being finalized in this FRM.

V. Evaluation of Additional Fuel-Based Controls

    The previous section evaluated motor vehicle controls in the 
context of mobile source air toxics (MSATs). The primary purpose of 
this section is to discuss the fuel program being promulgated today. We 
discuss the form of the rule, major areas of comment including our 
response and final decisions on those aspects, and the details of the 
fuels program. We also discuss why we are not at this time considering 
other fuel controls as a means of reducing MSATs. The details of our 
technical analyses of these fuel issues can be found in Chapter 7 of 
the Technical Support Document (TSD). The Response to Comments Document 
contains our responses to all of the relevant comments on the fuels 
aspects of this rulemaking.

A. Form of the Rule

1. What Is the Form of the Rule EPA Is Promulgating Today?
    We are finalizing new toxics emissions performance requirements 
(TPR) for gasoline. This anti-backsliding program will require, 
beginning with calendar year 2002, that a refinery's or importer's 
annual average total toxics emissions performance, as predicted by the 
Complex Model, for its baseline production volume of reformulated 
gasoline (RFG) not exceed its 1998-2000 baseline RFG total toxics 
emissions performance. Likewise for conventional gasoline (CG), this 
rule will require that the exhaust toxics emissions performance of a 
refinery's or importer's baseline production volume of CG not exceed 
its 1998-2000 baseline exhaust toxics emissions performance for CG.
    The 1998-2000 baseline RFG or CG toxics emissions performance value 
is the average performance of the gasoline produced at the refinery (or 
imported) over the three year period 1998 through 2000. Emission values 
are determined using the Complex Model,\19\ and compliance with the 
program is determined separately for RFG and CG. We have included in 
our program a number of compliance flexibilities, such as a deficit and 
credit carryforward, and a compliance margin, to offset unexpected or 
unusual variances in the gasoline quality of a refinery (or importer). 
We believe that these provisions will help to ensure that this program 
does not require new capital investments or changes in refinery 
operations, and thus will not pose an additional burden on refiners. 
Were this program to require new investments in the refining sector, we 
would be concerned that it would impose an economic burden on refiners 
that would be inconsistent with our finding that an anti-backsliding 
program at negligible cost is the most stringent program that we can 
justify in the near term.
---------------------------------------------------------------------------

    \19\ The Complex Model is a regulatory tool for estimating 
emissions for the reformulated gasoline and anti-dumping programs. 
The Complex Model inputs are eight specified fuel parameters: 
benzene, oxygen content (by oxygenate type), sulfur, Reid Vapor 
Pressure, aromatics, olefins and the percents evaporated at 
200 deg.F and 300 deg.F (E200 and E300). Complex Model outputs are 
the estimated emissions (VOC, toxics, NO<INF>X</INF>) resulting from 
the fuel parameters specified. The Complex Model also calculates 
percent reductions of the input slate of fuel parameters and 
resulting emissions compared to a base set of fuel parameters and 
resulting base emissions.
---------------------------------------------------------------------------

    The current rule is designed to avoid increases in toxic emissions 
from gasoline while imposing the least cost on the refining industry. 
Some have claimed that a refinery-specific performance requirement is 
inherently unfair because those refineries that have overcomplied to 
the greatest extent will receive the most stringent new baseline 
requirement. We recognize generally that setting standards based on 
current production may appear to penalize those who have voluntarily 
overcomplied. In fact, there is at least one refinery that has sought 
and received Agency recognition for its efforts to voluntarily 
overcomply with existing requirements.
    The Agency recognizes as a general matter the importance of 
providing appropriate incentives for the regulated community to take 
actions consistent with improving the environment. However, in this 
case, we believe that setting refinery-specific standards is the most 
appropriate and equitable approach to ensuring that emissions do not 
increase above current levels. As we explained in the NPRM, we believe 
that these refineries that have overcomplied have done so primarily 
because it was economically advantageous. In most cases, the financial 
incentive to overcomply is due to proximity to a market for chemical 
benzene. If the Agency were to establish a single, nationwide standard, 
commenters could legitimately characterize such an action as penalizing 
those refineries that are not located near petrochemical markets. Since 
each refinery is unique in terms of construction and location, any 
single standard will create varying degrees of challenges. Faced with a 
situation where a significant number of refineries have overcomplied 
with existing standards, the Agency has sought to craft a rule that 
represents the greatest degree of emission reductions achievable 
considering costs. The regulation that we finalize today achieves these 
goals.
2. Why Did EPA Change From the Proposed Benzene Fuel Content Form of 
the Rule to the TPR?
    In the Notice of Proposed Rulemaking, we proposed a benzene content 
requirement in order to capture the significant amount of 
overcompliance above and beyond the requirements of the federal 
reformulated gasoline and anti-dumping programs. Average benzene levels 
in 1998 and 1999 were 0.66 volume percent for RFG and 1.11 volume 
percent for conventional gasoline. These national average benzene 
levels are significantly below current requirement of 0.95 volume 
percent for RFG and average conventional gasoline baselines of 1.3 
volume. Benzene emissions account for

[[Page 17246]]

roughly 70% of motor vehicle air toxics (i.e., benzene, formaldehyde, 
acetaldehyde, 1,3-butadiene and POM).
    The Agency asked for comment on two other forms of the rule: 
benzene emissions performance and toxics emissions performance. The 
Agency did not propose a toxics performance form because of concerns 
that capping the total mass of toxics would allow benzene emissions to 
potentially increase if other air toxics declined. However, subsequent 
refinery modeling showed that benzene emissions would be unlikely to 
increase in the future following implementation of RFG Phase II and 
Tier 2 low sulfur gasoline standards, and the proposed low sulfur 
diesel standards. We viewed a benzene emissions requirement as 
tantamount to a benzene content requirement, but more difficult to 
quantify and enforce because there is not currently such a rule in 
effect.
    We received a significant number of comments on this proposal 
during the public hearing and in written comments submitted to the 
Agency. In general, commenters from the petroleum industry stated that 
there are significant costs associated with the benzene content form of 
the rule. These same commenters pointed out that there was little 
environmental benefit to the proposed requirements to justify their 
costs. Others commented that the Agency's concern about benzene 
emissions would be better served by a performance requirement since 
there is expected to be upward pressure on aromatics due to future 
environmental regulations and capping benzene fuel content will not 
prevent increases in fuel aromatics. Several commenters found that the 
rule did not go far enough to protect public health and welfare from 
the potential risk from mobile source air toxics.
    In response to these comments, and based on refinery modeling 
performed for this rulemaking, the Agency will finalize a toxics 
performance requirement instead of a benzene content requirement. The 
Agency's general rationale is twofold: a toxics performance requirement 
captures a larger amount of the overcompliance with the existing 
standards while imposing less costs on the refining industry than the 
proposed benzene content requirement. This action is consistent with 
comments received from the regulated industry and the Agency's updated 
refinery modeling.

Evaluation of a Benzene Content Standard

    The Agency evaluated the benzene content standard in terms of its 
expected environmental performance and its potential cost to industry. 
Section 112(k) of the Clean Air Act identifies five toxic air 
pollutants related to gasoline--benzene, 1,3-butadiene, acetaldehyde, 
formaldehyde and POM. Benzene emissions are about 70 percent of the 
total mass of these toxics, but all of these toxics are known or 
probable human carcinogens and pose a risk to public health and 
welfare. Benzene emissions are a function of benzene fuel content, but 
other components in the fuel also influence benzene emissions, such as 
total aromatics, sulfur, and Reid Vapor Pressure. Controlling the 
benzene content of RFG and CG would in effect control only a portion of 
the benzene emissions, which in turn are only a portion of total toxic 
emissions. The Agency is concerned ultimately with reducing ambient 
concentrations and exposure to air toxics.
    The costs related to a benzene content standard were calculated 
using a refinery model. The Agency found that a benzene content 
standard would impose aggregate annual costs (including amortized 
capital and all the operating costs) of $74 million for refineries in 
PADDs I, II, and III. On a per gallon basis, the annual cost of the 
proposed benzene content standard was predicted to be 0.0702 c/gal. 
Since gasoline production in PADDs I, II, and III represents about 91% 
of the national gasoline supply without California refiners, if we 
extrapolate this cost to the rest of the U.S., the aggregate cost would 
be approximately $81 million for the nation. California gasoline 
production is not included in this cost analysis because this 
regulation does not apply to California gasoline.
    It is important to note that there are some advantages related to 
fuel content standards. Compliance and enforcement are aided by the 
ability to test the fuel rather than relying on estimates derived from 
a model. A fuel content standard does not rely on an emissions model 
that may not fully estimate emissions from the vehicle fleet on the 
road today or in the future. Thus the decision to shift from a fuel 
content to an emissions based requirement in this rule should not be 
viewed by the reader as suggesting that the Agency in a general sense 
is no longer interested in controls on specific fuel components. It is 
simply in this particular case that we found an emissions performance 
requirement to be superior under a combined consideration of broader 
environmental benefits and lower costs.

Evaluation of a Toxics Performance Requirement

    There are several advantages for adopting a toxics performance 
requirement. It allows for a more comprehensive approach to capping air 
toxics emissions at current levels. By focusing on the five toxic 
compounds modeled by the Complex Model instead of only benzene, the 
mass emissions of air toxics placed under anti-backsliding constraints 
is substantially increased. Also, by focusing on emissions instead of 
fuel content, the new rule will establish an appropriate performance 
requirement while simultaneously providing some additional flexibility 
to regulated entities. Finally, it offers broader protection to public 
health because all five toxics included in the toxics performance 
requirement are known or probable human carcinogens.
    Section 202(l)(2) of the Clean Air Act instructs the Agency to 
promulgate regulations that, at a minimum, apply to emissions of 
benzene and formaldehyde. The shift to a toxics emissions performance 
requirement will limit emissions of these two pollutants along with 
emissions of 1,3-butadiene, POM and acetaldehyde. Thus, while refiners 
will have the ability to adjust fuel parameters in ways that will 
increase the emissions of one or more of these pollutants, any such 
increase must be offset by reductions in the emissions of the other 
pollutants.
    All of the pollutants covered by the toxics performance control are 
carcinogens. The nationwide inventories and ambient concentrations of 
all of these five pollutants are heavily influenced by motor vehicle 
emissions. Without today's anti-backsliding program, the current 
standards would leave room for toxics emissions from gasoline-fueled 
motor vehicles to increase by 70,000 tons per year (based on 1996 
inventory levels) as described in the Technical Support Document. This 
would amount to a 14% increase, on average, in RFG areas, and a 18% 
increase, on average, in CG areas. Capping the overall toxics emissions 
performance of gasoline to reflect current overcompliance is an 
appropriate means of addressing the potential adverse public health 
impacts that could occur if this backsliding from current levels were 
to occur. While we are not able to quantify the risk to public health 
that would result if backsliding were to occur, we believe a 
precautionary approach is appropriate. By adopting anti-backsliding 
controls, this precautionary approach will protect public health by 
reducing the potential risks to public health from backsliding.

[[Page 17247]]

    The Act also instructs the Agency to take costs into consideration. 
As stated previously, numerous petroleum refineries provided written 
testimony that a benzene content requirement would impose significant 
costs on the industry. The Agency conducted refinery modeling for this 
rule which accounted for the impact on refinery operations and fuel 
properties of Tier 2 low sulfur gasoline and low sulfur diesel fuel. 
This modeling analysis, discussed in more detail in the TSD, found that 
the costs associated with the benzene content requirement were 
significantly higher than the costs that a toxics performance 
requirement would impose on the industry.
3. What Are the Benefits of the TPR?
    The purpose of today's action is to prevent future increases above 
the current level of air toxic emissions derived from existing fuel 
properties. This anti-backsliding measure will ensure that mass 
emission rates (in milligrams per mile, mg/mi) of air toxics from motor 
vehicles do not increase while the Agency gathers additional 
information for a forthcoming rulemaking in 2003-2004.
    The Clean Air Act identified five air toxics in the federal 
reformulated gasoline program: benzene, 1,3-butadiene, formaldehyde, 
acetaldehyde, and POM. The RFG program established a toxics emissions 
performance standard for RFG, and an anti-backsliding toxics standard 
for conventional gasoline based on 1990 baseline toxics levels for each 
refinery. On average, refineries have overcomplied with the toxics 
emissions performance standards for both RFG and CG. Table V-1 compares 
the percent reductions required for RFG Phase I and the national 
average CG mass toxics emissions with actual national average 
performance in 1998, which was the most recent year for which complete 
and accurate data was available. On a national average, greater 
overcompliance was experienced for RFG than for CG.

                                       Table V-1.--Overcompliance With Toxics Performance Standards for RFG and CG
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              Percent  difference in
                                                  Phase I Standards                           1998 Average                     emissions  (Percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
RFG, Percent Reduction from statutory  16.5% reduction........................  28.1% reduction........................  15%
 baseline,.                            (45.3 mg/mi)...........................  (38.4 mg/mi)...........................
Total Toxics Performance (equivalent
 mg/mi).
--------------------------------------------------------------------------------------------------------------------------------------------------------
CG, Mass Emissions,..................  47.3 mg/mi \a\.........................  44.7 mg/mi.............................  6%
Exhaust Toxics Performance
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ Volume-weighted average of refinery-specific standards.

    The 1998 average values were based on volume-weighted toxics 
performance values for batch reports for all refineries in the U.S. 
which produced gasoline in 1998. The data available to us at this time 
does not allow us to account for the impact of imports on these 
nationwide average values. The values in Table V-1 differ slightly from 
those in the NPRM because we excluded noncomplying refineries from the 
analysis and volume-weighted only actual emissions in units of mg/mi 
instead of percent change values for each refinery.
    Overcompliance with RFG standards resulted in substantial toxics 
reductions beyond what was required by law. We have estimated 
reductions in the total toxics inventories due to overcompliance of 70 
thousand tons in 1996 and 40 thousand tons in 2007, using the 
inventories from the 1999 EPA Motor Vehicle Air Toxics Study (see TSD). 
While we do not believe that refiners are likely to increase their 
toxics content in the absence of this regulation, it is nonetheless 
important to ensure that these benefits are maintained in the event of 
unforeseen circumstances that may otherwise result in backsliding on 
toxics standards up to existing legal limits. Without this regulation, 
such backsliding could occur if refineries increase benzene or 
aromatics to increase octane levels, or if they change their refinery 
operations in reaction to unforeseen future circumstances.
4. What Are the Costs of the TPR?
    In conjunction with this rulemaking, we analyzed refinery modeling 
results for gasoline production regions in the Atlantic and Gulf 
Coasts, specifically PADDs \20\ I and III. This modeling analysis used 
the average regional gasoline fuel properties produced in 1999 to 
quantify the emissions performance of gasoline in these regions in 
1999. The refinery modeling also predicted the likely regional fuel 
properties after refineries modified their operations to comply with 
the future requirements for Phase II RFG, Tier 2 low sulfur gasoline, 
and proposed low sulfur diesel fuel (hereafter future fuel 
regulations). The Agency applied the Complex Model to evaluate the 
projected emissions performance of the predicted gasoline properties in 
these regions. The reader should refer to the TSD which accompanies 
this rule for more detailed discussion of the refinery modeling.
---------------------------------------------------------------------------

    \20\ Petroleum Administration for Defense Districts.
---------------------------------------------------------------------------

    The Agency is currently pursuing a separate rulemaking under the 
Toxic Substances Control Act (TSCA) to address the use of MTBE, and 
thus we have deferred consideration of MTBE controls to that 
rulemaking. Note that the EPA and the United States Department of 
Agriculture jointly announced, on March, 2000, the Administration's 
legislative principles for protecting drinking water supplies, 
preserving clean air benefit and promoting renewable fuels and urged 
Congress to take action consistent with these principles. These actions 
were based initially on recommendations of EPA's Blue Ribbon Panel on 
Oxygenates in Gasoline.
    The Agency recognizes that the use of MTBE does have an impact on 
emissions of toxic air pollutants from motor vehicles. The Blue Ribbon 
Panel found that present toxic emission performance of RFG can be 
attributed, to some degree, to the use of oxygenates. Further, the 
Panel recommended that any future change in the use of MTBE in gasoline 
should ``ensure that there is no loss of current air quality 
benefits.'' \21\ The anti-backsliding nature of this rulemaking is 
consistent with the Panel's recommendations. Should the Agency take 
action in the future to limit the amount of MTBE in fuel, its impact on 
emissions of air toxics--and the potential for additional costs due to 
today's action--would be carefully considered. As EPA develops any 
regulatory actions to address MTBE and water resource issues, the 
Agency will consider the overall impact on the

[[Page 17248]]

refining industry of any such action and, along with today's rule, and 
other relevant factors.
---------------------------------------------------------------------------

    \21\ Achieving Clean Air and Clean Water: The Report of the Blue 
Ribbon Panel on Oxygenates in Gasoline, EPA420-R-99-21, September, 
1999, at 6-7.
---------------------------------------------------------------------------

    Because the new baseline requirements do not require refiners to 
install new equipment or use new technologies beyond what they were 
using in the baseline period (1998-2000), this program imposes only 
negligible costs. This conclusion is based on our analyses of likely 
refiner behavior based on the expected requirements in the time frame 
applicable for this rulemaking. Unforeseen circumstances could change a 
refiner's actions needed to comply with this rule, which in turn could 
lead to additional costs depending on their chosen course of action.
    In contrast, the proposed benzene content standard was predicted to 
impose higher costs while capturing a smaller amount of the existing 
overcompliance with toxic standards. As stated previously, the Agency 
found that a benzene content standard would impose aggregate annual 
costs (including amortized capital and all the operating costs) of $74 
million for refineries in PADDs I, II, and III. On a per gallon basis, 
the annual cost of the proposed benzene content standard was predicted 
to be 0.0702 c/gal. Since gasoline production in PADDs I, II, and III 
represents about 91% of the national gasoline supply without California 
refiners, if we extrapolate this cost to the rest of the U.S., the 
aggregate cost would be approximately $81 million for the nation. 
California gasoline production is not included in this cost analysis 
because this regulation does not apply to California gasoline.
    There are limitations to the ability of a refinery model to predict 
the costs associated with each refinery. This inherent limitation of 
refinery modeling is of particular concern with the refinery-specific 
requirement that is adopted today. To help ensure that each refinery 
affected by this rule is faced with the type of costs estimated by the 
Agency's refinery modeling, we incorporated several flexibilities into 
the final rule. We have expanded the baseline period from two to three 
years, provided a one-year carryforward for credits and deficits, and 
adopted compliance margins for RFG and CG.

B. Issues and Areas of Comment on Non-implementation Related Aspects of 
the Program

1. What Is the Relationship Between the RFG and Anti-dumping 
Requirements and the Toxics Anti-backsliding Requirements?
    The reformulated gasoline program established a toxics performance 
standard for gasoline used in those metropolitan areas with the worst 
ozone levels. An anti-dumping toxics standard was established for 
gasoline used in those areas not required to have RFG and which did not 
opt to use RFG. The anti-dumping toxics standard was intended to 
prevent refineries from shifting certain less desirable fuel components 
into the conventional gasoline pool as a result of RFG production. The 
anti-dumping program was an anti-backsliding program for exhaust toxics 
and NO<INF>X</INF> relative to the baseline year of that program, 1990. 
Today's anti-backsliding requirements are in addition to the applicable 
RFG or anti-dumping requirements for gasoline. Today we are 
establishing refinery-specific toxics performance requirements (TPR) 
for reformulated and conventional gasoline. A refiner will now have to 
meet both today's toxics requirements and the applicable toxics 
performance for RFG or anti-dumping.
    In the NPRM, we asked for comment on repealing the anti-dumping 
program. We received comments from many refiners in support of this 
recommendation from the National Petrochemical & Refiners Association 
(NPRA). However, we find that we cannot repeal the anti-dumping 
program. The anti-dumping program is required by the Clean Air Act and 
we cannot ensure that today's requirements and the Tier 2 gasoline 
sulfur requirements will exactly duplicate the anti-dumping program. 
For example, the gasoline sulfur standards do not guarantee that all 
conventional gasoline will meet the individual NO<INF>X</INF> 
performance standards because some anti-dumping individual baselines 
have even lower average sulfur levels than the gasoline sulfur program 
will require. Additionally, the flexibilities provided in today's rule, 
such as deficit and credit carryforward, could cause the anti-
backsliding toxics emissions performance to exceed the anti-dumping 
toxics performance requirement in a given year. Nonetheless, we 
understand the refiners' concerns on this issue, and we will take steps 
to ensure that the compliance process, including any reporting 
requirements, is as streamlined as possible.
    Because we are promulgating toxics performance requirements that 
are identical in form to the toxic performance standards already in 
place, today's rule does not change the ability of States to regulate 
gasoline characteristics or components. As discussed in the NPRM, we 
believe a toxics performance requirement may not cause States to be 
prohibited by section 211(c)(4) of the Act from setting their own fuel 
benzene standard. Note that any such State fuel benzene standard could 
only be set for conventional gasoline because the reformulated gasoline 
regulations impose a federal benzene standard on RFG, thus preempting 
States from setting a more stringent RFG benzene standard.
    EPA recognizes the concerns expressed by the petroleum industry 
that a patchwork of different state fuel standards, sometimes referred 
to as ``boutique'' fuels, may increase the likelihood of disruptions in 
the fuel supply. In most situations, EPA believes that a uniform 
national program is the best way to protect public health and minimize 
disruption to the efficiency of the country's fuel distribution 
network. EPA's general expectation is that States will consider these 
issues in evaluating whether adoption of a state fuel program would be 
warranted.
2. How Are Incremental Production Volumes of RFG Affected by This Rule?
    In the NPRM, we proposed to apply the RFG requirements determined 
for this final rule to those volumes of RFG up to the baseline volume 
of RFG. We did not propose to extend the requirements to incremental 
RFG production volumes, but asked for comment on the appropriate 
requirements to apply to a refinery's incremental volume of RFG. 
Incremental volume of RFG means that amount of RFG produced in a 
calendar year above the RFG annual average baseline (1998-2000) volume 
of the refinery. Based on projections of vehicle miles traveled (VMT), 
RFG demand is expected to increase about 1.5% per year.
    We sought comment on two approaches for regulating the incremental 
RFG volume. The first would be to apply the individual refinery 
requirement to the incremental volume, in effect subjecting all of a 
refinery's annual RFG production to its individual baseline under 
today's program. The other would be to apply a non-individual 
requirement to the incremental volume. This could be a national control 
level based on the current national average toxics performance of RFG 
(or some less

[[Page 17249]]

stringent level), but would not be less stringent than the applicable 
standard under the RFG program.
    Many refiners did not want the incremental volume of RFG subject to 
any controls (i.e., the individual refinery baseline or the national 
average baseline) other than the current applicable RFG standards. Some 
refiners commented that we should exempt incremental volumes of CG from 
the final requirements as well. DOE pointed out that future growth in 
gasoline demand will likely be addressed through increased imports as 
well as greater use of existing FCC units and reformers, all of which 
would likely increase the toxic emission characteristics of all 
gasoline, be it RFG or CG.
    This rulemaking contains several unique factual circumstances that 
bear on this issue. The Agency has a strong interest in creating 
incentives, and not creating disincentives, for refiners to produce 
additional barrels of cleaner-burning RFG in the future. Placing new 
constraints on incremental RFG production may unnecessarily hamper the 
expanded use of RFG and its associated air quality benefits.
    Gasoline production in the United States is expected to increase by 
about 1.5 percent per year for the next several years. In the few years 
between promulgation of this rule and the reevaluation in 2003-2004, 
incremental volumes will only account for a small fraction of total US 
gasoline production and consumption. Such a small fraction is unlikely 
to have a material effect on the anti-backsliding goal of this rule.
    Moreover, to determine the potential effect of excluding 
incremental volumes from this regulation, we investigated the 
historical impact of volume increases on fuel benzene content for RFG 
and CG. Pool-average benzene levels in CG did not show a statistically 
significant increase. While pool-average RFG did show a statistically 
significant increase when production volume increased, the increase was 
small--on the order of an increase of 0.005 benzene volume percent per 
1 percent total volume. Thus the incremental volume exclusion is 
unlikely to have a material impact on air toxic emissions from 
gasoline. See the Technical Support Document for details.
    While our analysis focused only on fuel benzene content, there is 
some reason to believe that other changes in fuel properties associated 
with incremental volumes (e.g., increases in sulfur and olefins) may 
contribute to some toxics emissions. These incremental volumes could 
affect both the fuel properties and toxics emissions of both CG and 
RFG, because incremental volumes are primarily a function of growth in 
demand for gasoline, which affects both CG and RFG. However, requiring 
refiners to meet a more stringent toxics standard for these incremental 
volumes could require additional capital investment and thereby impose 
a constraint on incremental gasoline production. As a result, we have 
decided to exclude incremental volumes from our anti-backsliding 
program for both RFG and CG.
    After consideration of these comments on this issue and our 
analysis of incremental production volumes, we are finalizing a program 
in which the toxics performance requirements finalized today will not 
apply to incremental volumes of RFG or CG. Any volumes of gasoline that 
are above a refinery's baseline volume will thus be subject only to the 
existing toxics standards under either the RFG or anti-dumping 
programs. For RFG, incremental volumes will remain subject to the 
current 21.5 percent standard for total toxics given in 40 CFR 
Sec. 80.41(f). Incremental volumes of CG will remain subject to the 
current CG requirements for exhaust toxics emissions. For those 
refineries or importers that are unable to establish a volume baseline 
for 1998 to 2000 either because they were not operating during that 
period, or did not exist as a refining or importing facility, the 
applicable standard shall be the 1998-2000 national average toxics 
performance for RFG and CG. We believe this approach ensures that 
increasing gasoline demand can be addressed without requiring 
additional toxics reductions that might not be achievable under Section 
202(l)(2) in the near-term.
3. Does This Rule Contain Any Small Refiner Provisions?
    We did not have a SBREFA panel for this rule because we believe 
this rule will not have a significant impact on a substantial number of 
small refiners. At the same time, however, we are sensitive to small 
refiner concerns about their ability to meet these anti-backsliding 
requirements. Nevertheless, we believe that no small refiner provisions 
are needed in this rule for two reasons. First, because this is an 
anti-backsliding measure, refiners are not expected to have to install 
new equipment or change their operations to comply with the 
requirements. Second, we included a number of flexibilities in this 
program, such as deficit and credit carryforward, and a compliance 
margin. These flexibilities will help those small refiners that may 
experience temporary short-term difficulties due to supply or 
operational problems. We believe these flexibilities are sufficient to 
preclude significant negative impacts of this rule on both small and 
large refiners.
4. Is This rule Expected to Constrain the Potential for Expanded Use of 
Ethanol in Conventional Gasoline?
    While refinery modeling to answer this particular question has not 
been performed, the Agency does not believe that the toxics performance 
requirement will constrain the potential for expanded use of ethanol in 
conventional gasoline. If ethanol is used in conventional gasoline at 
ten percent by volume, gasoline components such as aromatics, benzene 
and olefins will be diluted by ten percent, thus lowering associated 
toxic emissions. Ethanol does have the effect of increasing exhaust 
emissions of acetaldehyde, but acetaldehyde contributes only about 6 
percent to the mass of five toxics air pollutants used in the Complex 
Model to model toxics performance (benzene, 1,3-butadiene, 
formaldehyde, acetaldehyde, and POM).\22\ Thus even a relatively large 
increase in acetaldehyde emissions should be offset by a ten percent 
decrease in more than 90 percent of the remainder of toxic emissions.
---------------------------------------------------------------------------

    \22\ The estimated acetaldehyde contribution of 6.4 percent was 
based on a Complex Model output from 1998 production of CG.
---------------------------------------------------------------------------

5. Is Diesel Fuel Control a Part of Today's Regulation?
    The fuel controls being set in today's action are only for 
gasoline. We are not setting air toxics requirements for diesel fuels 
because, unlike for gasoline, we do not have data that would allow us 
to correlate individual diesel fuel properties with toxics emissions. 
We do not have a model to explore the toxics impacts of different 
diesel fuel formulations and therefore, a diesel fuel reformulation 
program, similar to the reformulated gasoline program, is not a viable 
toxics control option. We intend to include research on diesel fuel-
related air toxics in our Technical Analysis Plan.

C. What Are the Components of the Anti-backsliding Toxics Performance 
Program?

1. Start Date
    We are finalizing the January 1, 2002, program start date as 
proposed. Because this is an anti-backsliding program, lead time is not 
needed to install hardware or make operational changes. Thus, beginning 
with the 2002 calendar year, a refinery's or importer's annual average

[[Page 17250]]

toxic emissions performance, determined separately for RFG and CG, 
cannot exceed its baseline toxics emissions performance, determined 
over the three years 1998-2000. The first report associated with 
today's rule will be due February 28, 2003, the same date as the 
reformulated gasoline and anti-dumping reports are due for calendar 
year 2002.
2. Separate Compliance Determination for RFG and CG
    As discussed in the NPRM, our proposal to keep compliance separate 
for RFG and CG under this program is consistent with the current 
treatment of these two fuel types in the RFG and anti-dumping programs. 
Separate compliance determinations for RFG and CG ensure that one pool 
is not made cleaner at the expense of the other. No supporting 
arguments for combining the pools were provided in the comments. Thus, 
we are finalizing this provision as proposed.
3. Baseline Development and Submittal
    We proposed a two-year baseline period, 1998-1999, and requested 
comment on this and other baseline period options. There were many 
comments on this issue. Many commenters expressed concern about 
refinery fluctuations during a given time period which could cause a 
baseline not to reflect typical operations. Many commenters suggested 
that we should provide flexibility in the baseline setting process. 
Several individual refiners and one industry commenter suggested 
lengthening the baseline period to encompass more refinery operational 
fluctuations, thus establishing a more accurate baseline that is true 
to normal operations.
    In the final rule, we are finalizing a three year baseline period, 
encompassing the years 1998, 1999 and 2000. This baseline period, which 
is one year longer than the baseline period we proposed, provides 
baseline values which are truer to a refinery's ``normal'' operating 
mode. Though two commenters opposed inclusion of 2000 because it was a 
transition year (from Phase 1 to Phase 2 RFG requirements) and, 
according to these commenters, not representative of refinery 
operations over time, we believe that including 2000, precisely because 
it is a Phase II RFG year, improves the baseline because it adds data 
to the baseline determination which is the most recent available. 
Including 2000 also helps to further offset (by virtue of a 3-year 
average versus a 2-year average) the effects of unit turnarounds at the 
refinery. At the same time, we do not expect significant differences, 
on average, between a baseline established using the 2-year averaging 
approach and one developed using the 3-year approach. However, we 
believe that for an individual refinery, the 3-year averaging approach 
provides that refinery with a more robust baseline. Finally, given that 
this rule does not require any capital improvements or operational 
changes by refiners to achieve its goals, and since refiners will have 
the 2000 data, we believe this data should be included in the baseline 
determination.
    We are requiring that refiners and importers submit to us 
information which establishes separate TPR baselines for their RFG and 
CG. For RFG, the applicable TPR baseline is total toxics emissions, 
calculated as a percent reduction from the statutory baseline. For CG, 
the applicable TPR baseline is exhaust toxics emissions, in mg/mile. 
Both baselines are determined using the Complex Model. These forms of 
the TPR are consistent in form with the existing toxic emission 
requirements of the reformulated gasoline and anti-dumping programs.
    The baseline submittal must contain the batch report number and 
volume of each batch (or composite) of gasoline produced or imported in 
1998, 1999 and 2000. Additionally, the refiner or importer must 
determine and report the applicable toxics emission performance level 
of each batch by evaluating the measured fuel parameters of each batch 
in the appropriate seasonal version of the Phase II Complex Model. 
Because this data is already required to demonstrate compliance with 
RFG and anti-dumping requirements, a refiner must simply submit the 
same information found in its original submittals of its RFG and anti-
dumping reports. Submissions of these baselines will be very similar to 
the streamlined electronic process which has been implemented for Tier 
2 gasoline sulfur baseline submissions. The Agency will handle the 
toxics baselines under today's program in a manner consistent with the 
submissions and associated guidance for Tier 2 sulfur baseline 
submissions.
    Finally, all of the toxics emissions performance of RFG and CG 
produced over the 3-year baseline time period must be volume-weighted 
to determine the baseline toxic emission performance levels for RFG and 
CG. The average annual volume over the 3-year baseline time period must 
also be reported. A refinery which exceeded (that is, was out of 
compliance) with the applicable toxics standard in any of the baseline 
years must use the applicable RFG or CG standard as its toxics emission 
performance value for gasoline produced that year in its baseline 
determination.
    Baselines must be submitted no later than June 30, 2001. Though we 
proposed to notify refiners of their toxics baselines within 120 days 
of submittal, after further consideration we are modifying this 
provision slightly from the proposal: we will notify refiners and 
importers of their baseline approvals by October 31, 2001, or within 4 
months of submittal, whichever is later.
4. Baseline Adjustment
    In response to the proposed benzene content requirement, one 
commenter suggested that a refiner that has a low baseline benzene 
level (because it produced benzene for the petrochemical market during 
the baseline period) should be able to increase its baseline benzene 
level to some minimum benzene level which would be set by EPA. Because 
we have switched to a TPR for this final rule, this regulation does not 
directly affect on fuel benzene content. Nonetheless, we can address 
the issue raised by the commenter since it is relevant, in a broad 
sense, to the baseline setting process.
    In general, we do not believe that EPA should allow baselines 
established under this rule to be adjusted because of refining or 
marketing decisions of the refiner. It is our belief that, in general 
(and absent refinery disasters or other similar, critical events), 
during the baseline period, every refinery was operating to maximize 
profits, considering its crude slate, operating units, product mix, 
marketing plan, etc. With regard to refineries that achieved low 
emissions levels due to benzene extraction, we do not believe there is 
any basis for expecting the benzene market to change in such a way that 
warrants setting a minimum toxics performance level. In fact, 
projections of the benzene market suggest continued growth (see TSD).
    In addition, because we are promulgating a TPR, which is a function 
of all of the fuel parameters evaluated by the Complex Model, and not a 
single fuel parameter requirement (like a fuel benzene content 
requirement), it is not clear how we would set such a minimum toxics 
emission level to account for changes in the petrochemical market. We 
would have to consider each of the eight Complex Model fuel parameters 
separately, and this would be complicated by the fact that the fuel 
parameters' effects on toxics emissions vary considerably.

[[Page 17251]]

    Nonetheless, we are allowing a refiner to petition EPA for a 
permanent adjustment of its TPR baseline. Refiners requesting such an 
adjustment must demonstrate how circumstances during 1998-2000 
materially affected the baseline toxics determination. Because we 
believe that the deficit and credit carryforward, compliance margin, 
and inclusion of a third baseline year sufficiently consider and 
minimize the potential compliance burden for those refiners that 
experience unusual refinery operational issues, we expect that the 
number of baseline adjustments will be small. Baseline adjustments will 
likely be limited to those refineries that experienced unexpected 
operational problems during the baseline period which could not have 
been avoided through due diligence and planning.
5. Compliance Margin
    A compliance margin refers to the cushion refiners typically 
included in their fuel production to ensure that their fuel will meet 
compliance requirements over a 12-month period. Without such a cushion, 
the refiner could fall into noncompliance due to minor operational 
problems. Compliance margins are most important to a refiner when 
trying to meet a per-gallon requirement, but can also be useful for 
meeting averaging requirements, for example, to account for test method 
variability, or other factors that might affect a refiner's ability to 
comply.
    Though we did not propose to include a compliance margin on the 
fuel benzene content requirement in our NPRM, additional information 
gleaned from refinery modeling and comments has led us to include a 
compliance margin on the TPR being finalized today. Though refinery 
modeling shows that post-2004 RFG total toxics and CG exhaust toxics 
emissions in PADDs I and III will, on average, be lower than during the 
baseline period, the difference is not large enough to ensure that 
refiners won't have to go beyond what our anti-backsliding requirements 
strictly call for. Also, at this time, we do not know whether the lower 
toxics emissions predicted by refinery modeling is true of gasoline in 
the other PADDs. Thus we believe that a compliance margin is needed to 
ensure that this rule is achievable in the near term.
    We are instituting separate compliance margins for RFG and CG 
because of the different format in which compliance with the applicable 
requirement is determined. EPA examined batch data from selected 
refineries in 1998. The toxic emission properties of each batch of RFG 
and CG were compared against their respective regulatory limits. A 
statistical analysis was performed to quantify the difference between 
the regulatory standard and the actual emissions characteristics of the 
fuel. This difference is commonly referred to as a ``compliance 
cushion.'' A more detailed discussion of the methodology used to 
determine the values of the compliance margins associated with today's 
rule is located in the TSD.
    The compliance margin we determined for RFG toxics performance is 
0.7%. Thus, for example, if refinery X has a volume-weighted RFG total 
toxics performance during 1998-2000 of -29.6% (percent change from the 
statutory baseline), without a compliance margin -29.6% is its anti-
backsliding requirement. With a compliance margin of 0.7%, refinery X's 
anti-backsliding requirement becomes -28.9%, that is, its requirement 
becomes slightly less stringent as a result of including the compliance 
margin. Thus, under this program, refinery X's RFG must have an annual 
average total toxics emissions reduction from the statutory baseline of 
at least 28.9%.
    EPA determined a compliance margin of 2.5 mg/mile for CG. Thus for 
refinery Y with a volume-weighted CG exhaust toxics performance during 
1998-2000 of 105.0 mg/mile, including the compliance margin increases 
its CG anti-backsliding toxics requirement to 107.5 mg/mile. Thus, for 
refinery Y's CG, its annual average exhaust toxics emissions must be no 
greater than 107.5 mg/mile.
6. Foreign Refiner Provisions
    Under the anti-dumping program, foreign refiners are allowed to 
develop an individual baseline representing the quality and quantity of 
gasoline they shipped to the U.S. in 1990. Those that develop an 
individual baseline can designate each batch of gasoline destined for 
the U.S. as subject to their individual requirement or, by default, as 
subject to the importer's anti-dumping requirement, which in most cases 
is the statutory baseline.
    A similar provision is included in this rule. Under this rule, a 
foreign refiner may develop a toxics anti-backsliding baseline for 
gasoline it sent to the U.S. during the baseline period (1998-2000) if 
it already has an individual anti-dumping baseline or is simultaneously 
developing such a baseline. For compliance purposes, it may then 
designate, on a batch-by-batch basis, whether that gasoline will be 
subject to its individual anti-backsliding requirement or will be 
included in the importer's compliance determination. A foreign refiner 
with both an individual anti-dumping baseline and an individual toxics 
anti-backsliding baseline must make a single designation for the batch. 
In other words, if the foreign refiner includes that batch in its own 
anti-dumping compliance determination, it is also included in its anti-
backsliding compliance determination. In this way, foreign refiners are 
treated in the same manner as domestic refiners, and the potential 
compliance confusion surrounding different designations on a single 
batch are avoided.
7. Default Baseline and Applicability
    The default toxics anti-backsliding baseline is the set of values 
used by a regulated party that has insufficient data from which to 
establish a unique individual anti-backsliding baseline. In the 
proposal, we discussed that a refiner or importer with less than 12 
consecutive months of applicable data during the baseline period would 
have the default anti-backsliding baseline as its individual baseline 
under this program. We are finalizing this provision as proposed. 
Additionally, a refiner or importer which did not produce or import one 
or more types of gasoline (either RFG or CG) during the baseline period 
but who produces or imports that type of gasoline after December 31, 
2000 will have the applicable default toxics anti-backsliding baseline; 
it will be subject to the default toxics baseline plus the compliance 
margin for that type of gasoline.
    The default baseline consists of a reformulated gasoline total 
toxics emissions performance value (measured as a percent reduction 
from statutory baseline) and a conventional gasoline exhaust toxics 
emissions performance value (measured in mg/mile). The final default 
baseline will be the average of all of the reported applicable (i.e., 
RFG or CG) toxics emissions performance values over the baseline period 
1998 through 2000. However, since the 2000 annual compliance reports 
are not due from refiners and others to EPA until February 2001, we 
will not be able to determine a default set of baseline values which 
corresponds to our baseline period (1998-2000) until later in 2001. At 
that time, we will issue the final default baseline.
    At this time, we have calculated draft default baseline values 
based on 1998-1999 RFG and CG reports; these interim default baseline 
values are 26.01% (reduction from statutory baseline) for RFG and 92.14 
mg/mile for CG, representing compliance under the

[[Page 17252]]

Phase II Complex Model. As discussed in the TSD, we do not expect the 
final default baseline to be significantly different from these values. 
Until the final default baseline is issued by EPA, the draft default 
baseline values plus the compliance margins discussed above (26.71% 
reduction from statutory baseline for RFG and 94.64 mg/mile for CG) are 
the requirements for those subject to the default baseline under this 
Subpart. Even though the default baseline represents only two of the 
three baseline years, we believe it is sufficient, in the absence of 
the 2000 information, for two reasons. First, the three year baseline 
period was designated to better capture normal operations at a 
refinery. In most cases, there are no normal operations to capture for 
an entity subject to the default baseline. Second, we do not expect a 
baseline determined using 1998 through 2000 data to be significantly 
different from a baseline determined using 1998 through 1999 data.
8. Compliance Period and Deficit and Credit Carryforward
    In the proposal, we discussed compliance periods of varying length 
different from the proposed single calendar year compliance period. 
Refiners who commented on this issue supported either a one-year 
compliance period with deficit carryforward or a two-year compliance 
period. As discussed in the NPRM, a one-year compliance period is 
consistent with the compliance periods of other gasoline programs (and 
thus represents minimal additional reporting burden for refiners and 
importers), and it is short enough that temporal variations in toxics 
emissions are minimized. For these reasons, we are finalizing a one-
year compliance period as proposed.
    We do realize, however, that even for an anti-backsliding program, 
unusual situations can happen which can significantly affect refinery 
operations, and which could cause the refinery to be out of compliance 
with its requirement. To this end, we proposed and are finalizing a one 
year deficit carryforward. This will allow a refinery to exceed its 
anti-backsliding toxics requirement for one year. In the next year, it 
must make up the deficit as well as be in compliance for that year. 
Additionally, though not proposed, we are also including a one year 
credit carryforward. Under this provision, a refinery producing 
gasoline that is cleaner than required by its toxics anti-backsliding 
requirement may use the overcompliance to cover any deficit in the 
following year. Because we are also providing a TPR compliance margin, 
overcompliance will be creditable for purposes of a credit carryforward 
only to the extent that it is overcompliance beyond the compliance 
margin. The overcompliance credits may not be traded to another 
company, and they expire at the end of the next calendar year.
    We have provided refiners with compliance flexibility in several 
forms--deficit and credit carryforward, a compliance margin, and 
extended baseline time period. In the NPRM, we discussed the 
possibility of including another flexibility in the form of a credit 
trading program. Comments about this option were mixed. Some refiners 
supported such a program, and offered other suggestions to enhance or 
clarify the program. At least one refiner did not support such a 
program, saying it would provide an unfair competitive advantage. Other 
industry commenters were unsure of the actual implementation and 
feasibility of the program, given the unequal baselines among refiners. 
Because of these implementation, feasibility and anti-competitive 
concerns, and because of the many other compliance flexibilities 
provided in today's program, we are not including a credit program as 
part of this rulemaking.
9. Hardship Provisions
    We are adopting a provision permitting a refiner to seek a 
temporary waiver from the toxics anti-backsliding requirements in 
certain circumstances. Such a waiver will be granted at EPA's 
discretion. Under this provision, a refiner may seek permission to 
exceed its toxics anti-backsliding requirements based on the refiner's 
inability to meet these requirements because of extreme and unusual 
circumstances outside of the refiner's control that could not have been 
avoided through the exercise of due diligence. This provision is 
similar to a provision in EPA's RFG and gasoline sulfur regulations. It 
is intended to provide refiners limited relief in unanticipated 
circumstances that cannot be reasonably foreseen at this time or in the 
near future. The conditions for obtaining such a waiver are similar to 
those in the RFG regulations. These conditions are necessary and 
appropriate to ensure that any waivers granted are limited in scope, 
and that a refiner does not gain an economic benefit from a waiver. 
Therefore, a refiner seeking a waiver must show that the waiver is in 
the public interest; that the refiner was not able to avoid the 
nonconformity; that it will make up, where practicable, the air quality 
detriment associated with the waiver, that it will pay back any 
economic benefit from the waiver; and that it will meet its toxics 
anti-backsliding requirements as expeditiously as possible. The refiner 
must also show that it will be unable to meet its toxics anti-
backsliding requirements even considering the deficit and credit 
carryforward flexibility provisions included in today's program.
10. California Gasoline
    We are not requiring gasoline intended for and actually used \23\ 
in California to be included in a refinery's or importer's compliance 
determination under today's rule. This action is consistent with other 
Agency actions on similar fuel issues. California gasoline is exempt 
from the recently promulgated federal gasoline sulfur requirements, and 
while subject to the RFG and anti-dumping provisions, California 
refineries have been exempted from several of the enforcement and 
compliance mechanisms of those programs.
---------------------------------------------------------------------------

    \23\ By limiting the exemption to California gasoline ``actually 
used'' in California, we generally mean to limit where the gasoline 
is dispensed. We do not intend to restrict the state in which the 
gasoline is actually combusted.
---------------------------------------------------------------------------

    Most of the gasoline used in California is produced by California 
refineries which are subject to the California Cleaner Burning Gasoline 
(CBG) requirements. The current (Phase 2) set of CBG requirements began 
in 1996 and runs through 2002; beginning in 2003, the California Phase 
3 gasoline requirements take effect. In 1998, under the 0.8 vol% Phase 
2 benzene standard, California refineries averaged 0.57 vol%. For 
almost every fuel parameter, including benzene and aromatics, the Phase 
3 standards are more stringent than the Phase 2 standards. Given the 
benzene overcompliance in 1998, and the upcoming more stringent Phase 3 
standards, it is likely that toxics emissions under Phase 3 will not be 
greater than toxics emissions under Phase 2. Thus, we do not expect 
California refineries, on average, to backslide relative to their 1998-
2000 average toxic emission level. Additionally, given the compliance 
margin we are including in today's rule, it is highly unlikely that any 
backsliding would exceed the combination of the actual 1998-2000 
baseline plus the compliance margin.
    Given this exemption for California gasoline, gasoline intended for 
use in California must be segregated from all other gasoline.

[[Page 17253]]

11. Territories
    Though in the NPRM we did not discuss the applicability of this 
rule to the American territories of Guam, American Samoa and the 
Northern Mariana Islands, we have recently exempted gasoline for these 
areas from several requirements, including compliance with the anti-
dumping program. These areas are a significant distance from any 
gasoline producers, and in the case of the anti-dumping requirements, 
could only be serviced with complying gasoline at a significant cost. 
Additionally, the air quality in these areas is pristine, and gasoline 
consumption is low, such that no human health or environmental 
detriment is expected from the exemption.
    Likewise for today's rule, requiring gasoline destined for these 
areas to be included in a refinery's or importer's compliance 
determination would be of little value for several reasons. First, the 
same conventional gasoline cost and supply issues discussed above would 
apply. In addition to transportation costs, it is very expensive for a 
refinery to produce small batches of complying gasoline. Also, most of 
the refineries that produce gasoline for these areas are foreign 
refineries which have not chosen to pursue individual baselines in 
other rules (e.g., the anti-dumping or gasoline sulfur rules), and are 
not likely to pursue an individual baseline for today's rule. Thus, 
because of the Agency's precedent for exempting gasoline to these areas 
from certain fuel regulations, and because of the lack of environmental 
harm from exempting such gasoline, we are exempting the gasoline sent 
to these areas from the requirements of this rule.
12. Gasoline Excluded
    In addition to California gasoline and gasoline that is used in the 
U.S. territories, we are also exempting certain other gasoline from the 
requirements of this rule. We proposed to exempt gasoline used in 
certain circumstances, including racing gasoline and gasoline used for 
research, development and testing. These categories are the same 
categories for which gasoline is exempt from the applicable regulations 
of other programs, including the RFG and anti-dumping programs and 
gasoline sulfur. We are finalizing these exempt gasoline categories as 
proposed.
D. Why Isn't EPA Adopting Other Fuel Controls To Control MSATs?
    Section 202(l)(2) requires EPA to adopt regulations that contain 
standards which reflect the greatest degree of emissions reductions 
achievable through the application of technology that will be 
available, taking into consideration existing motor vehicle standards, 
the availability and costs of the technology, and noise, energy and 
safety factors. Today's rule adopts an anti-backsliding requirement 
that EPA believes is appropriate under section 202(l)(2) as a near-term 
control, that is, a control that can be implemented and take effect 
within a year or two. We are not adopting long-term controls (i.e., 
controls that require longer lead time to implement) at this time 
because we lack the information necessary to assess appropriate long-
term controls. We believe it will be important to address the 
appropriateness of MSAT controls in the context of compliance with 
other significant environmental regulations (discussed below).
    Today's rule addresses toxics emissions from fuels in the near-
term. The rule will cap the toxics performance levels of gasoline 
beginning in 2002. Adopting an anti-backsliding program is a reasonable 
control on toxics emissions from fuels. The technology to maintain the 
current toxics performance of gasoline produced at each refinery is 
already available and continued compliance will not be costly even with 
implementation of our recently adopted sulfur controls (see discussion 
in Section V, and in Chapter 7 of the Technical Support Document).
    We do not believe, however, that we could reasonably adopt further 
controls to be implemented in this near-term time frame. First, the 
lead time is too short to allow for investments and upgrading of 
refinery equipment in any significant manner. Second, we have recently 
adopted, or proposed to adopt, two regulations that will achieve very 
significant emissions reductions by setting tight limits on the sulfur 
content of fuels used in on-highway vehicles. To comply with these new 
regulations, industry is already planning and investing in capital 
improvements and pursuing the necessary permitting to upgrade their 
refineries. While we lack the information to fully assess the costs and 
benefits of further controls in the 2002 time frame, we have serious 
concerns that further toxics controls in the 2002 time frame could 
interfere with refiners' planning and affect their ability to meet our 
recently promulgated, or proposed, sulfur standards.
    Even though today's rule focuses on near-term options for 
controlling toxic emissions from fuels, we plan to evaluate in our 
future rulemaking whether additional controls will be needed or 
appropriate in the longer term. We are not ready, however, to address 
these long-term controls in this rulemaking. We need to collect the 
information outlined in our Technical Analysis Plan (see Section V), so 
that we can assess the costs and benefits of potential fuel controls. 
This information will allow us to more accurately consider the impact 
of our recently promulgated, or proposed, fuel sulfur controls and 
assess how toxics controls can be incorporated. As part of the 
Technical Analysis Plan we will also collect information, which is 
currently lacking, on the availability and feasibility of further 
controls and the risk posed to public health and welfare by air toxic 
hot spots.
    Based on our conclusion that the anti-backsliding controls are 
reasonable controls for the near-term, the fact that we lack 
information suggesting further controls are appropriate in near-term, 
and the fact that we are not ready to address long-term controls in 
this rulemaking, we conclude that today's anti-backsliding requirement 
satisfies the criteria of section 202(l)(2).
    Section 202(l)(2) directs EPA to adopt toxics controls and from 
time to time review and revise those controls. Today's rule adopts 
near-term controls and puts EPA on a schedule to review, and if 
appropriate, revise those controls in accordance with the criteria in 
202(l)(2). We note that the Agency has not prejudged the outcome of our 
2003-2004 rulemaking, and will evaluate the sufficiency of the controls 
and whether there is a need for additional controls based on the 
information available at that time. We believe this two-step approach 
is the most reasonable means to address toxics in the near-term in the 
face of incomplete information and the significant changes underway at 
many refineries across the country.
    As discussed in the NPRM, a number of other MSATs such as acrolein, 
styrene, dioxin/furans, xylene, toluene, ethylbenzene, naphthalene, and 
hexane are not controlled by the RFG or anti-dumping programs. We do 
not currently have sufficient information on how changes in fuel 
properties affect emissions of these compounds, and thus we cannot 
estimate the costs associated with controlling these compounds in 
fuels.
    Motor vehicle emissions of metals are being addressed in other 
actions. Metals generally arise from contaminants in lube oils. The 
recent proposed rule on heavy-duty engines and vehicles beginning in 
model year 2007 also proposes controls on the use of used oil as a 
diesel fuel additive/extender.
    We are not controlling MTBE emissions in this rulemaking. The

[[Page 17254]]

primary mechanism for controlling MTBE emissions would be to limit the 
use of MTBE in gasoline. The Agency is currently pursuing a separate 
rulemaking under the Toxic Substances Control Act (TSCA) to consider 
phasing down or eliminating the use of MTBE, and thus we have deferred 
consideration of MTBE controls to that rulemaking. Note that the EPA 
and the United States Department of Agriculture jointly announced, on 
March, 2000, the Administration's legislative principles for protecting 
drinking water supplies, preserving clean air benefit and promoting 
renewable fuels and urged Congress to take action consistent with these 
principles.
    Finally, as discussed in Section V. B above, there is insufficient 
data at this time to allow us to quantify how changes in individual 
diesel fuel properties would affect emissions of compounds such as 
aldehydes, dioxins/furans, and POM. As a result, we cannot specify how 
refiners might change their operations or what capital equipment they 
might need to install in order to reformulate their diesel fuel, and 
thus we cannot estimate costs associated with this type of control.

VI. Nonroad Sources of MSAT Emissions

    In this section, we will look at MSAT emissions from nonroad mobile 
sources.\24\ First, we will briefly review the nonroad MSAT emission 
inventories that were presented in Section III. Next, we will discuss 
how the current nonroad emission control programs are expected to 
reduce these nonroad inventories, as well as briefly touch upon the 
expected benefits from our new actions targeting the control of 
emissions from currently unregulated nonroad categories.
---------------------------------------------------------------------------

    \24\ ``Nonroad'' is a term that covers a diverse collection of 
engines, vehicles and equipment, as described in detail later in 
this section. The terms ``off-road'' and ``off-highway'' are 
sometimes used interchangeably with nonroad. Section 202(l) 
instructs the Agency to address emissions from motor vehicles, which 
do not include nonroad vehicles or engines.
---------------------------------------------------------------------------

    We are looking at nonroad MSAT emissions separately from motor 
vehicle MSAT emissions primarily because our understanding of nonroad 
MSAT emissions is much more limited. This section ends with a 
discussion of the current gaps in our data that we will need to fill 
before we can comprehensively assess the need for, and appropriateness 
of, programs intended to further reduce nonroad MSAT emissions.
    We received two general types of comments in response to our 
discussion of nonroad sources in the proposal. First, several 
commenters stated that our emission projections for the nonroad 
category show that our current programs are effective at reducing 
toxics from nonroad sources. These commenters argued that we do not 
need to do anything further to reduce toxics emissions from nonroad 
mobile sources. A second group of commenters pointed out that the 
nonroad toxic inventories clearly argue for further controls on nonroad 
sources, and that we should include such controls in the final rule. We 
believe that we need to gather additional information on nonroad toxics 
emissions before we can make an informed decision regarding future 
actions, and are thus not including additional nonroad controls in 
today's action. Further, we are not required to set toxic emissions 
standards for nonroad sources under section 202(l)(2) of the Act.

A. Nonroad MSAT Baseline Inventories

    We previously presented the 1996 baseline inventories for several 
key nonroad MSAT emissions in Table III-2. This nonroad MSAT data was 
taken from the 1996 National Toxics Inventory (NTI). In general, the 
data show that nonroad vehicles tend to be significant contributors of 
those same MSAT emissions for which motor vehicles are also significant 
contributors, such as benzene, formaldehyde, and acetaldehyde. For some 
MSAT emissions, the nonroad inventories are comparable to, or even 
higher than, those for on-highway vehicles. Nonroad vehicles contribute 
as much as 39 percent of the national inventory of some MSAT emissions, 
such as acetaldehyde and MTBE, and contribute significantly to the 
national inventories of several others, including 1,3-butadiene, 
acrolein, benzene, formaldehyde, lead compounds, n-hexane, toluene and 
xylene.
    Comparing the 1996 estimates of on-highway vehicle VOC and diesel 
PM emissions in Table III-3 to the nonroad VOC and diesel PM numbers 
presented later in this section (Tables VI-3 and VI-4), we see that the 
nonroad VOC inventory in 1996 was almost 75 percent of the on-highway 
inventory and the nonroad diesel PM inventory for the same year was 
roughly twice that for on-highway diesel PM.

B. Impacts of Current Nonroad Mobile Source Emission Control Strategies

1. Description of the Emission Control Programs
    Section 213 of the Clean Air Act Amendments of 1990 directed us to 
study the contribution of nonroad engines to air pollution which may 
reasonably be anticipated to endanger public health or welfare, and to 
regulate them if warranted. The focus of the 1990 Amendments was on the 
criteria pollutants and their implications for meeting the national 
ambient air quality standards (NAAQS). Due to the variety of nonroad 
engine and equipment types and sizes, combustion processes, uses, and 
potential for emissions reductions, we placed nonroad engines into 
several categories. These categories include land-based diesel engines 
(e.g., farm and construction equipment), small land-based spark-
ignition (SI) engines (e.g., lawn and garden equipment, string 
trimmers), large land-based SI engines (e.g., forklifts, airport ground 
service equipment), marine engines (including diesel and SI, propulsion 
and auxiliary, commercial and recreational), locomotives, aircraft, and 
recreational vehicles (large land-based spark ignition engines used in 
off-road motorcycles, ``all terrain'' vehicles and snowmobiles). Brief 
summaries of our current and anticipated programs for these nonroad 
categories follow. More detailed descriptions are contained in Chapter 
Eight of the TSD for this rule.
    <bullet> Land-based diesel engines. Land-based nonroad diesel 
engines include engines used in agricultural and construction 
equipment, as well as many other applications (excluding locomotives, 
mining equipment, and marine engines). Under our Tier 1 standards 
phased in beginning in 1996, NO<INF>X</INF> reductions of over 30 
percent were required of new land-based nonroad diesel engines greater 
than 50 horsepower (hp).\25\ Standards applicable to engines under 50 
hp took effect for the first time in 1999. We have completed a second 
set of standards (Tier 2) which will be phased in from 2001 through 
2006 and will require further NO<INF>X</INF> reductions, as well as 
reductions in diesel PM emissions. Still more stringent NO<INF>X</INF> 
standards for engines over 50 hp (Tier 3) have been adopted and will be 
phased in from 2006 through 2008. When fully phased in, these Tier 2 
and Tier 3 regulations are projected to result in 50 percent reductions 
in VOC and 40 percent reductions in diesel PM beyond the Tier 1 
regulations.\26\ Finally, we intend to consider the control of sulfur 
in nonroad diesel fuel as part of our Tier 3 technology review. This 
would allow more effective diesel PM control technologies such as 
catalysts to be

[[Page 17255]]

applied to nonroad engines and vehicles.
---------------------------------------------------------------------------

    \25\ 59 FR 31306, June 17, 1994.
    \26\ 63 FR 56968, October 23, 1998.
---------------------------------------------------------------------------

    <bullet> Small land-based SI engines. Small land-based spark-
ignition engines at or below 25 hp are used primarily in lawn and 
garden equipment such as lawn mowers, string trimmers, chain saws, lawn 
and garden tractors, and other similar equipment. Our Phase 1 emission 
controls for these engines took effect beginning in 1997 and are 
projected to result in a roughly 32 percent reduction in VOC 
emissions.\27\ We recently completed Phase 2 regulations for these 
engines which, when fully phased in, are projected to result in 
additional reductions in combined HC and NO<INF>X</INF> beyond the 
Phase 1 levels of 60 percent for nonhandheld engines and 70 percent for 
handheld engines.\28\
---------------------------------------------------------------------------

    \27\ 60 FR 34582, July 3, 1995.
    \28\ 64 FR 15208, March 30, 1999 and 65 FR 24267, April 25, 
2000.
---------------------------------------------------------------------------

    <bullet> Large land-based SI engines. We do not currently have 
emission standards in place for SI engines above 25 hp used in 
commercial applications. Such engines are used in a variety of 
industrial equipment such as forklifts, airport ground service 
equipment, generators and compressors. We are currently developing an 
emission control program for these engines.\29\
---------------------------------------------------------------------------

    \29\ 65 FR 76797, December 7, 2000.
---------------------------------------------------------------------------

    <bullet> Marine engines. Due to the wide variety of marine engine 
types and applications we have split these engines into three general 
categories for regulatory purposes. The first category consists of 
gasoline outboard and personal watercraft engines. Our standards for 
these engines took effect in 1998 and become increasingly stringent 
over a nine year phase-in period, they are ultimately projected to 
result in a 75-percent reduction in VOC.\30\ The second category 
consists of commercial diesel marine engines. This includes diesel 
engines up to 30 liters per cylinder in size used in a variety of 
commercial marine applications. Our emission standards for these 
engines take effect in 2004 and are similar to our standards for land-
based nonroad diesel engines.\31\ These regulations are projected to 
ultimately result in VOC reductions of 13 percent and diesel PM 
reductions of 26 percent for engines subject to the standards. The last 
category consists of both gasoline and diesel recreational sterndrive 
and inboard engines. We do not currently have emission regulations in 
place for this category of marine engine, but have begun developing 
them.\32\
---------------------------------------------------------------------------

    \30\ 61 FR 52088, October 4, 1996.
    \31\ 64 FR 73300, December 29, 1999.
    \32\ 65 FR 76797, December 7, 2000.
---------------------------------------------------------------------------

    <bullet> Locomotives. Our regulations for locomotives and 
locomotive engines consist of three tiers of standards, applicable 
depending on the date a locomotive is originally manufactured.\33\ The 
first set of standards (Tier 0) applies to locomotives and locomotive 
engines originally manufactured from 1973 through 2001, any time they 
are manufactured or remanufactured.\34\ The second set of standards 
(Tier 1) applies to locomotives and locomotive engines manufactured 
from 2002 through 2004. The third set of standards (Tier 2) applies to 
locomotives manufactured in 2005 and later. While the Tier 0 and Tier 1 
regulations are primarily intended to reduce NO<INF>X</INF> emissions, 
the Tier 2 regulations are projected to result in 50 percent reductions 
in VOC and diesel PM from unregulated levels, as well as additional 
NO<INF>X</INF> reductions beyond the Tier 0 and Tier 1 regulations.
---------------------------------------------------------------------------

    \33\ 63 FR 18978, April 16, 1998.
    \34\ Locomotives are typically overhauled to ``as new'' 
condition every four to eight years in a process known as 
remanufacturing.
---------------------------------------------------------------------------

    <bullet> Aircraft. A variety of emission regulations have been 
applied to commercial gas turbine aircraft engines, beginning with 
limits on smoke and fuel venting in 1974. In 1984, limits were placed 
on the amount of unburned HC that gas turbine engines can emit per 
landing and takeoff cycle. Most recently (1997), we adopted the 
existing International Civil Aviation Organization (ICAO) 
NO<INF>X</INF> and CO emission regulations for gas turbine engines. 
None of these actions has resulted in significant emissions reductions, 
but rather have largely served to prevent increases in aircraft 
emissions. We continue to explore ways to reduce emissions from 
aircraft throughout the nation.
    <bullet> Recreational Vehicles. Large land-based spark ignition 
engines used in recreational vehicles include snowmobiles, off-road 
motorcycles and ``all terrain'' vehicles, and are presently 
unregulated. We are currently developing emission regulations for 
recreational vehicles.\35\
---------------------------------------------------------------------------

    \35\ 65 FR 76797, December 7, 2000.
---------------------------------------------------------------------------

    In addition to the above engine-based emission control programs, 
fuel controls will also reduce emissions of air toxics from nonroad 
engines. For example, restrictions on gasoline formulation (the removal 
of lead, limits on gasoline volatility and reformulated gasoline 
standards) are projected to reduce nonroad MSAT emissions because most 
gasoline-fueled nonroad vehicles are fueled with the same gasoline used 
in on-highway vehicles. An exception to this is lead in aviation 
gasoline. Aviation gasoline is a high octane fuel used in a relatively 
small number of aircraft (those with piston engines). Such aircraft are 
generally used for personal transportation, sightseeing, crop dusting, 
and similar activities.
    As just discussed, most of our fuel controls aimed at gasoline 
cover both on-highway and nonroad vehicle fuel. The same is not true 
for diesel fuel. We have regulations in place that will control the 
sulfur levels in on-highway diesel fuel and have proposed to reduce 
these levels further. These controls, however, do not apply to nonroad 
diesel fuel. Prior to the sulfur controls for on-highway diesel fuel, 
which took effect in October of 1993, there was no distinction between 
nonroad and on-highway diesel fuel.\36\ We are evaluating the need for 
controlling sulfur in nonroad diesel fuel, in order to allow more 
effective diesel PM control technologies such as catalysts to be 
applied to nonroad engines and vehicles.
2. Emission Reductions From Current Programs
    The nonroad mobile source control programs just summarized are 
expected to result in reductions of national inventories of MSAT 
emissions from nonroad engines. This section summarizes our estimates 
of nonroad MSAT inventories into the future, based on the nonroad 
emission control programs we currently have in place. Interested 
readers are encouraged to refer to our TSD for a more detailed 
discussion of these projections. The discussion in this section 
consists of three parts. First, we discuss the inventories of four 
gaseous MSAT emissions: benzene, formaldehyde, acetaldehyde and 1,3-
butadiene. Second, we discuss nonroad VOC emissions inventories as a 
surrogate for the other nonroad gaseous MSAT emissions. Finally, we 
discuss the trend in nonroad diesel PM emissions.
---------------------------------------------------------------------------

    \36\ 55 FR 34120, August 21, 1990.
---------------------------------------------------------------------------

    We are not reporting inventory trends for the metals on our list of 
MSATs (arsenic compounds, chromium compounds, mercury compounds, nickel 
compounds, manganese compounds, and lead compounds) or for dioxin/
furans. Metals in mobile source exhaust can come from fuel, fuel 
additives, engine oil, engine oil additives, or engine wear. Formation 
of dioxin and furans requires a source of

[[Page 17256]]

chlorine. Thus, while metal emissions and dioxins/furans emissions are 
associated with particles and it is possible that these compounds track 
PM emissions to some extent, there are a number of other factors that 
contribute to emission levels and we do not have good data on these 
relationships.
    a. Benzene, Acetaldehyde, Formaldehyde, and 1,3-Butadiene. Table 
VI-1 shows our estimates of the nonroad emissions of these four gaseous 
MSATs. These estimates were based on the 1996 inventories contained in 
the 1996 NTI study.\37\ The 1990 estimates were derived by applying a 
ratio of nationwide 1990 to 1996 VOC inventories from the draft NONROAD 
model to the 1996 NTI numbers.\38\ Toxic fractions represent the 
fraction of total VOC that a given MSAT makes up. The toxic fractions 
were derived from speciated emissions data on different engines and 
come from a variety of studies which are discussed in Chapter 2 of the 
TSD. By knowing the total VOC inventory and the toxic fraction for a 
given MSAT, we can estimate the inventory of that specific MSAT 
indirectly. The 2007 and 2020 MSAT estimates were derived from the 
draft NONROAD model, with the toxic fractions applied to the nationwide 
NONROAD VOC results. Toxic fractions were applied separately to the 
various sources of nonroad emissions (e.g., diesel, gasoline, two-
stroke, four-stroke, exhaust, evaporative) in the NONROAD model. We 
then summed the toxic emissions from the various sources of nonroad 
emissions.
---------------------------------------------------------------------------

    \37\ It should be noted that these estimates do not include 
locomotives, aircraft or commercial marine diesel engines. Thus, the 
1996 estimates shown here differ slightly from those shown in Table 
III-2.
    \38\ The draft NONROAD model is a model we are developing to 
project emissions inventories from nonroad mobile sources. Because 
this is a draft model and subject to future revisions, the 
inventories derived from the draft NONROAD model and presented here 
are subject to change.

 Table VI-1.--Annual Emissions for Benzene, Acetaldehyde, Formaldehyde, and 1,3-Butadiene From Nonroad Sources<SUP>a</SUP>
                                         [Thousand short tons per year]
----------------------------------------------------------------------------------------------------------------
                                                                 1990         1996         2007         2020
                          Compound                            Emissions    Emissions    Emissions     Emissions
----------------------------------------------------------------------------------------------------------------
Benzene....................................................        100.2         98.7         75.4          69
Acetaldehyde...............................................         37.7         40.8         26.3          20
Formaldehyde...............................................         79.2         86.4         53.8          40.7
1,3-Butadiene..............................................          9.4          9.9          8.8           7.8 
----------------------------------------------------------------------------------------------------------------
\a\ The draft NONROAD model is a model we are developing to project emissions inventories from nonroad mobile
  sources. Because this is a draft model and subject to future revisions, the inventories derived from the draft
  NONROAD model and presented here are subject to change.

    Table VI-2 summarizes the percent reductions from 1990 and 1996 
levels represented by the inventories in Table VI-1. This table shows 
that the reductions expected from our existing nonroad control programs 
are significant, although not as substantial as the reductions of these 
pollutants for on-highway vehicles presented in Section III.

Table VI-2.--Percent Emission Reductions for Benzene, Acetaldehyde, Formaldehyde, and 1,3-Butadiene From Nonroad
                                                     Sources
----------------------------------------------------------------------------------------------------------------
                                                                  Reduction in 2007         Reduction in 2020
-------------------------------------------------------------         (percent)                 (percent)
                                                             ---------------------------------------------------
                          Compound                             From 1990    From 1996    From 1990    From 1996
----------------------------------------------------------------------------------------------------------------
Benzene.....................................................           25           24           31           30
Acetaldehyde................................................           30           36           47           51
Formaldehyde................................................           32           38           49           53
1,3-Butadiene...............................................            7           11           18           21
----------------------------------------------------------------------------------------------------------------

    b. VOCs. With the exception of the four MSATs shown in Table VI-1, 
we cannot estimate emissions from nonroad mobile sources for the other 
gaseous MSAT emissions because we do not have toxic fraction 
information for the other gaseous MSAT emissions. Therefore, to 
estimate projected inventory impacts from our current nonroad mobile 
source emission control programs, we use VOC inventories. We believe 
this is appropriate because the gaseous MSAT emissions are constituents 
of total VOC emissions. By using VOC emissions as a surrogate, we are 
assuming that MSAT emissions track VOC reductions. In reality, however, 
as can be seen from Table VI-2, some gaseous MSAT emissions may not 
decrease at the same rate as VOCs overall. Without having more detailed 
emission data for each of the MSAT emissions, however, we are unable to 
offer any insights on how those rates may differ.
    Our VOC emission inventories were developed using the draft NONROAD 
model. Because the draft NONROAD model does not include locomotives, 
commercial marine diesel engines, or aircraft, we supplemented the 
draft NONROAD model inventories with the locomotive and diesel marine 
inventories developed in support of our regulations for those 
categories, and with aircraft emission inventories from the National 
Air Pollutant Emissions Trends, 1900-1996 report. The results of this 
analysis, presented in Table VI-3, show that VOC inventories are 
projected to decrease approximately 44 percent between 1996 and 2020 
due to existing nonroad mobile source emission control programs. 
Comparing the results of this analysis with Tables III-3 and III-4, we 
see that expected nonroad VOC reductions are not as dramatic as those 
projected for on-highway vehicles, with

[[Page 17257]]

nonroad and on-highway VOC inventories expected to be very similar by 
2020. This is not surprising because the technologies available to 
reduce nonroad emissions are not as sophisticated as those used to 
control on-highway emissions. This analysis, however, shows that our 
existing nonroad emission control programs will nonetheless result in 
significant gaseous MSAT reductions (assuming, as previously discussed, 
that gaseous MSAT emissions track VOC reductions).

                             Table VI-3.--Annual VOC Emissions From Nonroad Sources
----------------------------------------------------------------------------------------------------------------
                 Year                             1996                     2007                    2020
----------------------------------------------------------------------------------------------------------------
Million short tons per year...........  3.6                      2.2                      2.0
Cumulative Percent Reduction from 1996  * * *                    39%                      44%
----------------------------------------------------------------------------------------------------------------

    c. Diesel PM. We estimated the nonroad PM inventories using the 
draft NONROAD model. We are using diesel PM as a surrogate for diesel 
PM and diesel exhaust organic gases (DPM + DEOG). As explained earlier, 
because the draft NONROAD model does not include locomotives, 
commercial marine diesel engines, or aircraft we supplemented the draft 
NONROAD model inventories using other sources of information to cover 
these emissions. Table VI-4 shows our estimates of nonroad diesel PM 
emissions inventories. As can be seen, we expect nonroad diesel PM 
emissions to begin to drop with the implementation of some of our 
nonroad regulations. However, in the absence of additional controls, we 
expect that nonroad diesel PM emission inventories will begin to 
increase due to expected growth in the populations of nonroad vehicles 
and equipment. Comparing Table VI-4 to Table III-3 we see that, while 
the nonroad diesel PM inventory is roughly twice that for on-highway 
vehicles in 1996, nonroad emissions of diesel PM are expected to be 
about 20 times as great as on-highway diesel PM emissions by 2020 due 
to the dramatic reductions in on-highway PM from the application of the 
newest technologies and the use of low sulfur fuels. These estimates 
assume projected reductions from the proposed standards for heavy-duty 
vehicles in 2007 and future model years, which are not yet finalized.
    As was previously mentioned, we are considering Tier 3 diesel PM 
standards for land-based nonroad diesel engines. We believe that any 
specific new requirements for nonroad diesel PM we might propose would 
need to be carefully considered in the context of a proposal for 
nonroad diesel fuel standards. This is because of the close 
interrelationship between fuels and engines--the best emission control 
solutions may not come through either fuel changes or engine 
improvements alone, but perhaps through an appropriate balance between 
the two. Thus, we are working to formulate proposals covering both 
nonroad diesel fuel and engines.

                              Table VI-4.--Diesel PM Emissions From Nonroad Sources
----------------------------------------------------------------------------------------------------------------
                 Year                             1996                     2007                    2020
----------------------------------------------------------------------------------------------------------------
Thousand short tons per year..........  345.8                    282.8                    310.8
Cumulative Percent Reduction from 1996  * * *                    18%                      10%
----------------------------------------------------------------------------------------------------------------

C. Gaps in Nonroad Mobile Source Data

    There are significant gaps in our data on MSAT emissions from 
nonroad engines. As a result of these data gaps, our understanding of 
nonroad MSAT inventories is less developed than our understanding of 
on-highway vehicle MSAT emissions. The largest single data gap is in 
the area of emission factors. While we have basic emission factors for 
VOC and PM for most of the nonroad categories, we have very little VOC 
speciation data for most classes and categories of nonroad vehicles and 
engines which would allow us to use VOC as a surrogate to estimate 
emissions of specific MSAT emissions. Given the large variety of 
nonroad engine sizes, types and uses, as well as the likelihood that 
this variety are projected to result in some differences in VOC 
composition, it is important that we obtain or develop speciated VOC 
data specific to each nonroad category in order to more accurately 
project nonroad MSAT inventories. These gaps, too, must be filled in 
order to accurately assess the need for, and the most appropriate 
direction of, any future MSAT control program targeted specifically at 
nonroad mobile sources. We intend to use the technical analysis plan, 
described in Section VII, to fill these data gaps.

VII. Technical Analysis Plan to Address Data Gaps and Commitment 
for Further Rulemaking

A. Technical Analysis Plan to Address Data Gaps

    Because of the potential future health impacts of public exposure 
to air toxics from mobile sources we will continue our toxics-related 
research and activities. Therefore, in addition to today's controls, we 
will continue to evaluate and re-assess the need for, and level of 
controls for both on-highway and nonroad sources of air toxics. Among 
the 21 compounds that EPA has identified for inclusion on the list of 
MSATs, we believe that, considering single chemical inhalation health 
hazards and exposure to the MSAT emissions from on-highway sources, 
diesel particulate matter and diesel exhaust organic gases (DPM + 
DEOG), benzene, 1,3-butadiene, formaldehyde, acetaldehyde, and acrolein 
are likely to present the highest risks to public health and 
welfare.\39\ The need to focus short-term work on these six MSATs has 
been highlighted in an Agency screening analysis\40\ and the States 
have indicated these pollutants are major mobile source pollutants of 
concern. Information that is made available from the work that is now 
underway in the NATA National-Scale Analysis will also be used to 
determine priority toxics

[[Page 17258]]

from mobile sources.\41\ In addition, priorities identified from the 
NATA National-Scale Analysis will be considered and incorporated as 
appropriate in the Air Toxics Research Strategy (ATRS) currently being 
developed by EPA's Office of Research and Development (ORD) in a 
coordinated effort with the OAR.
---------------------------------------------------------------------------

    \39\ EPA may also focus on other MSATs in the next two years, if 
new information shows that is appropriate.
    \40\ Memo from Brodowicz, P. to Phil Lorang, Director Assessment 
and Modeling Division and Chet France, Director Engines Programs and 
Compliance Division. Screening/Ranking Analysis of the Air Toxic 
Emissions From Onroad Mobile Sources to Be Addressed Under Section 
202(l)(2). August 17, 1999.
    \41\ EPA's Office of Transportation and Air Quality (OTAQ), 
which is responsible for the MSATs program, will be working in 
coordination with the Office of Air Quality Planning and Standards 
(OAPQS), which manages NATA, and the Office of Radiation and Indoor 
Air, which is examining issues related to a wide range of indoor air 
pollutants. OTAQ will also rely on health effects, exposure, and 
risk assessment efforts and guidelines of EPA's Office of Research 
and Development in conducting its program.
---------------------------------------------------------------------------

    In conducting this Technical Analysis Plan, we will address four 
critical areas where there are data gaps. These areas are:
    <bullet> Developing better air toxics emission factors for nonroad 
sources;
    <bullet> Improving estimation of air toxics exposures in 
microenvironments;
    <bullet> Improving consideration of the range of total public 
exposures to air toxics; and
    <bullet> Increasing our understanding of the effectiveness and 
costs of vehicle, fuel, and nonroad controls for air toxics.
    The Agency recognizes the need to conduct additional work and to 
focus on relevant scientific data to address the needs we outline in 
this Technical Analysis Plan. The issues outlined are complex and while 
the work conducted as part of the Technical Analysis Plan will begin to 
address the significant data gaps, resolution of some aspects of these 
issues will require a long-term effort. This effort will be coordinated 
across the Agency to maximize available resources.
    Developing emission factors for nonroad sources. EPA's Office of 
Transportation and Air Quality (OTAQ) has initiated emissions testing 
of a comprehensive suite of hydrocarbons and inorganic compounds from 
nonroad diesel engines. These emissions will be characterized using 
steady-state as well as transient test cycles using typical nonroad 
fuel and low-sulfur nonroad fuel. OTAQ has also initiated an effort to 
characterize emissions (including speciated hydrocarbons) from in-use 
nonroad engines. EPA's Office of Research and Development (ORD) also 
has information available from testing programs which will be useful to 
characterize emissions of toxic compounds from certain classes of 
gasoline nonroad engines using various fuels (oxygenated gasoline, 
reformulated gasoline and conventional gasoline). The Agency will use 
these data, in addition to other sources of nonroad test data to 
develop better air toxics emissions factors for nonroad sources.
    Improving estimation of exposures in microenvironments. In the 
past, the Agency has used carbon monoxide (CO) measurements outdoors 
and indoors as a surrogate for estimating the on-highway mobile source 
contribution to air toxics levels from outdoor sources in different 
microenvironments (e.g., inside vehicles, homes, shopping malls, and 
office buildings). This approach has limitations. Estimates of the on-
highway contribution to air toxics levels in different 
microenvironments are then used in conjunction with activity data to 
estimate average exposures. A new approach was needed that addressed 
some of the limitations of the CO surrogate approach and one that could 
be used to estimate exposures from all outdoor sources. Thus, the 
Agency developed the Hazardous Air Pollutant Exposure Model--Version 4 
(HAPEM4), to estimate microenvironmental exposures in the National-
Scale Assessment of NATA. HAPEM4 utilizes peer reviewed, pollutant 
specific microenvironmental factors to predict exposure levels in 
microenvironments. The application of these microenvironmental factors 
in the NATA National-Scale Assessment is currently awaiting peer review 
by the Agency's Science Advisory Board. After that review, EPA's OAQPS 
will incorporate applicable comments into HAPEM4 microenvironmental 
factors that are needed to provide improved exposure estimates.
    In addition, EPA will use results of on-going studies at the Mickey 
Leland National Urban Air Toxics Research Center and in the EPA Office 
of Radiation and Indoor Air to evaluate indoor and outdoor 
concentrations of gaseous toxics as well as the penetration of toxics 
from outdoor sources into indoor spaces. EPA will also utilize data 
from new studies planned or underway (within and outside the Agency) 
that are designed to fill gaps in current data sets such as personal 
exposure in microenvironmental settings (e.g., houses with attached 
garages, residences and commercial buildings located near heavily-
trafficked roadways, bus depots, and delivery terminals).
    Another important aspect of considering microenvironmental 
exposures is the amount of time people spend in each microenvironment. 
To address this issue, HAPEM4 uses the EPA ORD Consolidated Human 
Activity Database (CHAD). CHAD contains information describing 
activities of various subgroups in the U.S. population in different 
microenvironmental settings. CHAD is a more expansive human activity 
diary data set than others EPA has used in past exposure assessment, 
but the Agency recognizes that additional field research may be needed 
to expand human activity information for under-represented demographic 
groups, particularly in urban areas. EPA will update CHAD to take 
advantage of new data that becomes available through peer-reviewed 
studies. As CHAD is updated in the future, EPA will incorporate new 
data into HAPEM4 to provide the best reflection of each subgroup's 
activities and thereby enable subgroup analysis from which EPA would be 
likely to gain additional insights about the potential exposures for 
particular subgroups, including children. The Agency will review the 
data to see where special analysis is warranted to characterize the 
subgroups facing greater risks.
    Improving consideration of the range of public exposures. EPA's 
analysis to date has primarily examined average levels of exposure (see 
Chapter 5 of the TSD and our 1999 Study \42\). As part of its National 
Air Toxics Assessment (NATA) activities, EPA has also conducted a 
national-scale air toxics analysis to estimate ambient concentrations 
of 33 air toxics identified in the IUATS, plus diesel PM. The NATA 
National-Scale Analysis apportioned the contribution of air toxics to 
ambient concentrations between major, area, nonroad mobile, and on-
highway sources. The NATA National Scale Analysis also reported 
distributions of concentrations across census tracts nationally and at 
the county level. While providing a significant and informative body of 
information, these studies do not address exposures to toxics in hot 
spot areas. As the Agency has stated in the Integrated Urban Air Toxics 
Strategy, we also want to consider the disproportionate impacts of air 
toxics in hot spot areas. Hot spots are generally thought of as areas 
with elevated pollutant levels that could be associated with elevated 
exposures and potentially serious health risks. At higher pollutant 
concentrations, the potential for risk increases, making it important 
to characterize the distribution of exposure in the population. For 
example, it would be important to know how many people are in the high-
end distribution

[[Page 17259]]

of exposure and whether they have additional susceptibilities (e.g., 
the elderly, young, or those exposed to other chemicals beyond MSATs) 
and what factors place them at high risk (e.g., proximity to sources). 
States and local air pollution control agencies have raised the hot 
spots issue as a major concern that needs to be addressed in a 
comprehensive air toxics risk characterization.\43\
---------------------------------------------------------------------------

    \42\ Analysis of the Impacts of Control Programs on Motor 
Vehicles Toxics Emissions and Exposure in Urban Areas and Nationwide 
(Volumes 1 and 2), November 1999. EPA420-R-99-029/030. This report 
can be accessed at http://www.epa.gov/otaq/toxics.htm.
    \43\ STAPPA/ALAPCO and NESCAUM raised this concern at an 
conference on mobile source air toxics that the Health Effects 
Institute managed for EPA in February 2000.
---------------------------------------------------------------------------

    To improve our ability to characterize MSAT exposures to highly 
exposed subpopulations requires better information regarding ambient 
concentrations of MSATs in hot spot areas and appropriate 
microenvironmental factor values for high-exposure microenvironments. 
EPA is developing local-scale emissions and dispersion models for 
mobile sources to better inform the Agency and the public about 
potential hot spots. In addition, EPA is conducting spatially refined 
urban area modeling (including mobile sources).
    Field sampling studies funded by the Mickey Leland National Urban 
Air Toxics Research Center and ambient monitoring being conducted by 
States and local entities will provide information that will be used to 
support real-world characterizations of a few typical hot spot areas. 
These field measurements will also provide information regarding the 
distributions of microenvironmental concentrations and therefore, 
exposures. EPA will also work with the State and local air pollution 
control agencies to ensure that the results of air toxics monitoring 
data analyses and urban monitoring pilot projects underway omission 
year are considered in EPA's development of mobile source air toxics 
exposure and risk analyses.\44\
---------------------------------------------------------------------------

    \44\ EPA will characterize the exposure risks of air toxics in 
future analysis in the manner prescribed in the Agency's Guidance 
for Risk Characterization, February 1995.
---------------------------------------------------------------------------

    Increasing our understanding of the effectiveness and costs of 
vehicle, fuel, and nonroad air toxics controls. The Agency intends to 
conduct additional analysis on additional controls for motor vehicles, 
fuels, and nonroad engines that could lower air toxics emissions cost-
effectively in a reliable and predictable manner. For DPM + DEOG, 
benzene, 1,3-butadiene, formaldehyde, acetaldehyde, and acrolein, the 
Agency will analyze a variety of control options, and re-evaluate 
previously considered control options, for both on-highway and nonroad 
sources. This additional analysis of control options will include the 
feasibility of requiring retrofit of both highway and nonroad heavy-
duty diesel engines with emissions controls for air toxics.
    In each of these four areas of investigation, EPA will work 
collaboratively with industry representatives, manufacturers of 
emissions control technology, State and local agencies, environmental 
groups, and other stakeholders. In keeping with this approach, the 
Agency plans to hold at least three technical workshops with all 
interested stakeholders to consider:
    <bullet> Improvements EPA should make to existing models and 
integration of emission, concentration and exposure models to enable 
the Agency to better assess the risks from air toxics from all sources;
    <bullet> Ways to address the significance of the hot spot issue; 
\45\ and
---------------------------------------------------------------------------

    \45\ This workshop will include ways to characterize the 
geographic variability and exposure/risk impacts of mobile source 
emissions, considering both the ubiquitous ambient impact as well as 
potential hot spots. Geographic variability includes the observed 
elevated urban area ambient concentrations of mobile source air 
toxics, peak ambient concentrations adjacent to roadways in urban 
and rural areas, and the elevated, mobile source-dependent emissions 
impacts (for example, waste transfer station operations and bus, 
marine, aircraft, and locomotive terminal operations). Exposure 
variability includes recognition of factors that lead to different 
levels of human exposure, such as commuting, or living in a 
residence with an attached garage. While this workshop will focus on 
methods to understand the range of exposures to mobile source 
emissions, methods to characterize additional sources of toxics 
exposure will also be examined.
---------------------------------------------------------------------------

    <bullet> Future vehicle, fuel, and nonroad control technologies for 
reducing air toxics.
    The results of the Technical Analysis Plan, workshops, and other 
efforts to improve our understanding of air toxics risks will provide 
the basis for any future rulemaking, as discussed below.

B. Commitment for Further Rulemaking

    EPA is including a regulatory provision in section 80.825 that 
establishes a schedule for a future rulemaking to promulgate any 
additional vehicle and fuel controls that EPA determines are 
appropriate under section 202(l)(2). This rulemaking will reassess the 
standards in place at the time using the information collected through 
the Technical Analysis Plan described above and other activities 
related to mobile sources and air toxics. The standards that are being 
promulgated by EPA in today's final rule will remain in effect unless 
modified by this or other future rulemaking. EPA commits to issue a 
proposed rule by July 1, 2003, and to take final action on the proposal 
by July 1, 2004. The regulation adopted today establishes a rulemaking 
schedule for exercise of EPA's discretionary authority under section 
202(l)(2), which directs EPA to ``from time to time revise'' 
regulations under that provision.
    We are also stating in section 80.825 that the Agency intends to 
evaluate emissions and potential strategies relating to HAPs from 
nonroad engines and vehicles. This is consistent with the commitment, 
expressed in the preamble of the NPRM, to address emissions from 
nonroad as well as on-highway vehicles. The preamble discussion in the 
NPRM explained that as part of the rulemaking envisioned under the 
proposed section 80.825, EPA would reexamine the controls available for 
reducing toxics emitted from on-highway and nonroad vehicles and 
equipment, and their fuels (see preamble, 65 FR at 48091). The review 
would consider whether controls that reduce emissions from nonroad 
sources were appropriate under the Act. EPA intends to review the 
regulations of various categories of nonroad engines and equipment, and 
to consider controls for those pollutants and categories of new nonroad 
engines that EPA determines are appropriate. Controls on all types of 
nonroad vehicles and equipment, or pollutants may not be warranted. In 
deciding what pollutants and categories of engines or equipment to 
include in any proposal, EPA intends to consider a variety of factors 
such as cost, risk to public health, available technology, as well as 
any other appropriate factors.
    Several commenters urged EPA not to include a commitment to a 
future rulemaking in the regulations. These commenters argued that it 
was premature to commit to a rulemaking before EPA had completed the 
Technical Analysis Plan and that a future rulemaking could be a waste 
of resources if EPA determines no further controls are appropriate. 
Several commenters also questioned EPA's authority to commit future 
administrations to such a rulemaking. EPA continues to believe the 
regulatory commitment in section 80.825 is reasonable and entirely 
within EPA's authority.
    Other commenters supported EPA's commitment to future rulemaking, 
but encouraged EPA to extend that commitment to include a periodic 
review of mobile source toxics controls. They believe that EPA should 
review the appropriateness of additional controls every three years. At 
this time, we do not believe it is necessary to make such a formal 
commitment. However, the Act allows us to review

[[Page 17260]]

and from time to time revise air toxics standards for mobile sources. 
Therefore, in addition to today's controls, we will continue to 
evaluate and re-assess the need for, and level of controls for both on-
highway and nonroad sources of air toxics as described above.

VIII. Public Participation

    A wide variety of interested parties participated in the rulemaking 
process that culminated with this final rule. The formal comment period 
and a public hearing associated with the NPRM provided additional 
opportunities for public input. EPA also met with a variety of 
stakeholders, including environmental and public health organizations, 
oil company representatives, auto company representatives, and states 
at various points in the process.
    We have prepared a detailed Response to Comments document that 
describes the comments received on the NPRM and presents our response 
to each of these comments. The Response to Comments document is 
available in the docket of this rule and on the Office of 
Transportation and Air Quality Internet toxics page (http://www.epa.gov/otaq/toxics.htm). Comments and our response are also 
included throughout this preamble for several key issues.

IX. Administrative Requirements

A. Administrative Designation and Regulatory Analysis

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to review by the Office of Management and Budget 
(OMB) and the requirements of this Executive Order. The Executive Order 
defines a ``significant regulatory action'' as any regulatory action 
that is likely to result in a rule that may:
    <bullet> Have an annual effect on the economy of $100 million or 
more or adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, Local, or Tribal governments or 
communities;
    <bullet> Create a serious inconsistency or otherwise interfere with 
an action taken or planned by another agency;
    <bullet> Materially alter the budgetary impact of entitlements, 
grants, user fees, or loan programs, or the rights and obligations of 
recipients thereof; or
    <bullet> Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order.
    Pursuant to the terms of Executive Order 12866, it has been 
determined that this rule is a ``significant regulatory action'' 
because it raises novel legal or policy issues. Accordingly, this rule 
was submitted to OMB for review. Any written comments from OMB on 
today's action and any responses from EPA to OMB comments are in the 
public docket for this rulemaking.

B. Regulatory Flexibility Analysis.

    EPA has determined that it is not necessary to prepare a regulatory 
flexibility analysis in connection with this final rule. EPA has also 
determined that this rule will not have a significant impact on a 
substantial number of small entities. Small entities include 
businesses, small not-for-profit enterprises, and small governmental 
jurisdictions. Of the approximately 146 petroleum refiners that 
currently produce gasoline in the U.S., about 15 meet the Small 
Business Administration (SBA) definition of a small business. According 
to SBA guidelines, a petroleum refining company must have fewer than 
1500 employees to qualify as an SBA small business.
    After considering the economic impacts of today's final rule on 
small entities, EPA has concluded that this action will not have a 
significant economic impact on a substantial number of small entities. 
As a result of the toxics performance standard being finalized today, 
all refiners will be required to maintain current levels of 
overcompliance with RFG and anti-dumping toxic emission performance 
requirements. Because the standards finalized in this action are not 
technology-forcing, we believe that all refiners, including small 
refiners will not be required to adjust their current refining 
practices in any unique way to meet the toxics performance standard. 
Chapter 7 of the TSD supports this conclusion and we believe that any 
future costs that may be incurred by any refiner to comply with this 
program will be negligible.
    Although this final rule will not have a significant economic 
impact on a substantial number of small entities, EPA nonetheless has 
tried to reduce the impact of this rule on small entities. We have 
included a number of flexibilities in this program such as deficit and 
credit carryforward that are available to all refineries to meet the 
requirements finalized in today's action. We believe these 
flexibilities are sufficient to address any unforseen burdens that any 
refiner, including a small refiner, may face, and therefore, no unique 
provisions or flexibilities need to be finalized for small refiners.

C. Paperwork Reduction Act

    The information collection requirements in this rule have been 
submitted for approval to the Office of Management and Budget (OMB) 
under the Paperwork Reduction Act, 44 U.S.C. 3501 et seq. An 
Information Collection Request (ICR) document has been prepared by EPA 
and a copy may be obtained from Sandy Farmer, Collection Strategies 
Division; U.S. Environmental Protection Agency (2822); 1200 
Pennsylvania Ave., NW, Washington, DC 20460 or by calling (202) 260-
2740. The information requirements are not enforceable until OMB 
approves them.
    Under this rulemaking, refiners and importers are required to 
determine and submit to EPA a toxics baseline based on the quality of 
the gasoline produced or imported between 1998 and 2000, inclusive. The 
toxics baseline is a one-time submission. Additionally, at the end of 
each calendar year beginning with 2002, refiners and importers are 
required to submit certain information to EPA under this rule. The 
types of information and other requirements associated with these 
submissions is presented below.
    The data that is used in determining the toxics baseline is 
gasoline batch information which the refiner or importer already has, 
and has submitted (or will submit in the case of 2000 data) to EPA per 
the reformulated gasoline and anti-dumping programs' requirements. 
Thus, there is no requirement under this rule to collect additional 
information; refiners and importers use the information they already 
have (gasoline batch quality and volumes) to determine the baseline for 
this rule, a straightforward and uncomplicated calculation.
    In addition to the one-time toxics baseline determination and 
submission, refiners and importers are required to calculate annually 
and submit to EPA the following, separately for reformulated and 
conventional gasoline:
    (1) The annual average toxics value. This value is the average 
quality of all of the batches of gasoline produced or imported during 
the year and is based on the volume and toxics quality of each batch 
(volume weighted combination of each batch's toxic value).
    (2) The annual volume. This is the sum of all of the batch volumes 
of gasoline produced or imported during the year.
    (3) The incremental volume. This is the difference between a 
refiner's or importer's 1998-2000 baseline volume and the annual volume 
(see above). Only positive incremental volumes (that is, when the 
annual volume exceeds the

[[Page 17261]]

1998-2000 volume) are used in the compliance baseline calculation (see 
below).
    (4) The compliance baseline. This annual calculation is the 
standard for this rule, and is the value to which the annual average 
toxics value (see above) is compared. Factors in this calculation are 
the baseline quality and volume (as determined in the one-time baseline 
submission, plus a compliance margin which has been set by EPA), and 
the incremental volume (see above).
    The annual average toxics value for each type of gasoline 
(reformulated, conventional) is essentially the same determination 
refiners and importers must make for the reformulated gasoline and 
anti-dumping programs. The annual average toxics value determination is 
made using the toxics values calculated for each reformulated gasoline 
and conventional gasoline batch in accordance with the reformulated 
gasoline and anti-dumping program requirements. No new data is required 
to be collected for this rule. The annual volume is also part of the 
reporting requirements of those two programs. Only the incremental 
volume determination and the compliance baseline determination are new 
requirements due to this rule. These latter two determinations require 
minimal calculation time. Additionally, all information required to be 
submitted annually under this anti-backsliding program will be 
submitted at the same time and on the same forms as the annually 
required information under the reformulated gasoline and anti-dumping 
programs.
    Refiners and importers are also required to annually submit attest 
engagements (independent comparison and calculation of reported values 
and related information submitted by refiners and importers in 
accordance with the reformulated gasoline and anti-dumping 
requirements). Attest engagements are also required for this anti-
backsliding rule. The information the independent auditor must consider 
includes the refiner's or importer's baseline toxics value, annual 
average toxics value, baseline volume, incremental volume and 
compliance baseline. This addition (on top of the attest engagement 
requirements for the reformulated gasoline and anti-dumping program 
attest engagement requirements) is expected to require minimal 
additional resources.
    In summary, we believe that the additional data required by this 
rulemaking will require minimum effort to prepare and submit, and can 
be submitted with the same data submission forms pursuant to the 
recordkeeping and reporting requirements for the RFG and anti-dumping 
rules. While we believe that the minimal amount of additional data 
required by this rulemaking does not pose significant additional 
information collection burden on refiners,\46\ we have submitted 
revisions to the RFG and anti-dumping Information Collection Requests 
(ICRs).
---------------------------------------------------------------------------

    \46\ Burden means the total time, effort, or financial resources 
expended by persons to generate, maintain, retain, or disclose or 
provide information to or for a Federal agency. This includes the 
time needed to review instructions; develop, acquire, install, and 
utilize technology and systems for the purposes of collecting, 
validating, and verifying information, processing and maintaining 
information, and disclosing and providing information; adjust the 
existing ways to comply with any previously applicable instructions 
and requirements; train personnel to be able to respond to a 
collection of information; search data sources; complete and review 
the collection of information; and transmit or otherwise disclose 
the information.
---------------------------------------------------------------------------

    An Agency may not conduct or sponsor, and a person is not required 
to respond to a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for EPA's 
regulations are listed in 40 CFR part 9 and 48 CFR Chapter 15. The OMB 
control number(s) for the information collection requirements in this 
rule will be listed in an amendment to 40 CFR part 9 in a subsequent 
Federal Register document after OMB approves the ICR.

D. Intergovernmental Relations

1. Unfunded Mandates Reform Act
    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory action on state, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with ``Federal mandates'' that 
may result in expenditures by state, local, and tribal governments, in 
the aggregate, or by the private sector, of $100 million or more in any 
one year. Before promulgating an EPA rule for which a written statement 
is needed, section 205 of the UMRA generally requires EPA to identify 
and consider a reasonable number of regulatory alternatives and adopt 
the least costly, most cost-effective or least burdensome alternative 
that achieves the objectives of the rule. The provisions of section 205 
do not apply when they are inconsistent with applicable law. Moreover, 
section 205 allows EPA to adopt an alternative other than the least 
costly, most cost-effective or least burdensome alternative if the 
Administrator publishes with the final rule an explanation why that 
alternative was not adopted.
    Before we establish any regulatory requirement that may 
significantly or uniquely affect small governments, including tribal 
governments, we must develop, under section 203 of the UMRA, a small 
government agency plan. The plan must provide for notifying potentially 
affected small governments, enabling officials of affected small 
governments to have meaningful and timely input in the development of 
our regulatory proposals with significant federal intergovernmental 
mandates. The plan must also provide for informing, educating, and 
advising small governments on compliance with the regulatory 
requirements.
    EPA has determined that this rule does not contain a federal 
mandate that may result in expenditures of $100 million or more for 
State, Local, or Tribal governments, in the aggregate, or for the 
private sector in any one year. The anti-backsliding standard that is 
being finalized in today's action, consisting of a ``cannot exceed'' 
toxics performance standard which is based in average annual production 
in 1998-2000, will not require refiners to install capital equipment or 
make substantial changes to their operations in order to comply. The 
rule imposes no enforceable duties on State, Local, or Tribal 
governmental entities and nothing in the rule would significantly or 
uniquely affect small governments. Thus, today's rule is not subject to 
the requirements of section 202 and 205 of UMRA.
2. Executive Order 13132 (Federalism)
    Executive Order 13132, entitled ``Federalism'' (64 FR 43255, August 
10, 1999), requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that have ``substantial direct 
effects on the States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government.''
    The proposed rule has no federalism implications, as specified in 
Executive Order 13132. The standards finalized in today's action do not 
change the existing form of the gasoline toxics standard and therefore 
do not change the states's rights with respect to gasoline air toxics 
controls. The

[[Page 17262]]

proposed standards will impose no direct compliance costs on states. 
Thus, Executive Order 13132 does not apply to this rule.
    EPA consulted with state and local officials in the process of 
developing the proposed regulation to permit them to have meaningful 
and timely input into its development. In the spirit of Executive Order 
13132, and consistent with EPA policy to promote communications between 
EPA and State and local governments, EPA specifically solicits comment 
on this proposed rule from State and local officials.
3. Executive Order 13084: Consultation and Coordination With Indian 
Tribal Governments
    Under Executive Order 13084, EPA may not issue a regulation that is 
not required by statute, that significantly or uniquely affects the 
communities of Indian tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the tribal governments, or EPA consults with those 
governments. If EPA complies by consulting, Executive Order 13084 
requires EPA to provide to the Office of Management and Budget, in a 
separately identified section of the preamble to the rule, a 
description of the extent of EPA's prior consultation with 
representatives of affected tribal governments, a summary of the nature 
of their concerns, and a statement supporting the need to issue the 
regulation. In addition, Executive Order 13084 requires EPA to develop 
an effective process permitting elected officials and other 
representatives of Indian tribal governments ``to provide meaningful 
and timely input in the development of regulatory policies on matters 
that significantly or uniquely affect their communities.''
    Today's rule does not create any mandates or impose any obligations 
on State, Local, or Tribal governments, and thus does not significantly 
or uniquely affect the communities of Indian tribal governments. 
Accordingly, the requirements of section 3(b) of Executive Order 13084 
do not apply to this rule.

E. National Technology Transfer and Advancement Act

    As noted in the proposed rule, section 12(d) of the National 
Technology Transfer and Advancement Act of 1995 (NTTAA), Public Law 
104-113, section 12(d) (15 U.S.C. 272 note), directs EPA to use 
voluntary consensus standards (VCS) in its regulatory activities unless 
to do so would be inconsistent with applicable law or otherwise 
impractical. Voluntary consensus standards are technical standards 
(e.g., materials specifications, test methods, sampling procedures, 
business practices) that are developed or adopted by voluntary 
consensus standards bodies. The NTTAA directs EPA to provide Congress, 
through OMB, explanations when the Agency decides not to use available 
and applicable voluntary consensus standards.
    This rule references technical standards adopted by the Agency 
through previous rulemakings. No new technical standards are 
established in today's rule. The standards referenced in today's rule 
involve the measurement of gasoline fuel parameters. The measurement 
standards for gasoline fuel parameters referenced in today's rule are 
government-unique standards that were developed by the Agency through 
previous rulemakings. These standards have served the Agency's 
emissions control goals well since their implementation and have been 
well accepted by industry.

F. Executive Order 13045: Children's Health Protection

    Executive Order 13045: ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997) applies 
to any rule that: (1) is determined to be economically significant as 
defined under Executive Order 12866, and (2) concerns an environmental 
health or safety risk that EPA has reason to believe may have a 
disproportionate effect on children. If the regulatory action meets 
both criteria, the Agency must evaluate the environmental health or 
safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency.
    This rule is not subject to the Executive Order because it is not 
an economically significant regulatory action as defined by Executive 
Order 12866. In addition, data that provide a direct insight into the 
question of greater susceptibility in children are lacking. 
Nevertheless, EPA believes that it is important to develop a better 
understanding of the effects on public health, including on children's 
health, of the MSATs identified in today's rule. Accordingly, EPA 
intends to address children's health issues as part of its Technical 
Analysis Plan.

G. Congressional Review Act

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. EPA will submit a report containing this rule and other 
required information to the U.S. Senate, the U.S. House of 
Representatives, and the Comptroller General of the United States prior 
to publication of this rule in the Federal Register. A major rule 
cannot take effect until 60 days after it is published in the Federal 
Register. This rule is not a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective on May 29, 2001.

X. Statutory Provisions and Legal Authority

    The statutory authority for the fuels controls in today's final 
rule can be found in sections 202 and 211(c) of the Clean Air Act 
(CAA), as amended. Additional support for the procedural and 
enforcement-related aspects of the fuel controls in today's rule, 
including the recordkeeping requirements, come from sections 114(a) and 
301(a) of the CAA.

List of Subjects

40 CFR Part 80

    Environmental protection, Fuel additives, Gasoline, Imports, 
Incorporation by reference, Labeling, Motor vehicle pollution, 
Penalties, Reporting and recordkeeping requirements.

40 CFR Part 86

    Environmental protection, Administrative practice and procedure, 
Confidential business information, Labeling, Motor vehicle pollution, 
Penalties, Reporting and recordkeeping requirements.

    Dated: December 20, 2000.
Carol M. Browner,
Administrator.


    For the reasons set forth in the preamble, parts 80 and 86 of title 
40 of the Code of Federal Regulations are amended as follows:

PART 80--REGULATION OF FUELS AND FUEL ADDITIVES

    1. The authority citation for part 80 is revised to read as 
follows:

    Authority: 42 U.S.C. 7414, 7521(l), 7545 and 7601(a).

    2. Section Sec. 80.2 is amended by revising paragraph (d) to read 
as follows:

[[Page 17263]]

Sec. 80.2  Definitions.

* * * * *
    (d) Previously certified gasoline, or PCG, means gasoline or RBOB 
that previously has been included in a batch for purposes of complying 
with the standards in Subparts D, E, H, and J of this part, as 
appropriate.
* * * * *

    3. Section Sec. 80.46 is amended by revising paragraphs (e) and (h) 
to read as follows:


Sec. 80.46  Measurement of reformulated gasoline fuel parameters.

* * * * *
    (e) Benzene. (1) Benzene content shall be determined using ASTM 
standard method D-3606-99, entitled ``Standard Test Method for 
Determination of Benzene and Toluene in Finished Motor and Aviation 
Gasoline by Gas Chromatography''; except that
    (2) Instrument parameters shall be adjusted to ensure complete 
resolution of the benzene, ethanol and methanol peaks because ethanol 
and methanol may cause interference with ASTM standard method D-3606-99 
when present.
* * * * *
    (h) Incorporations by reference. ASTM standard methods D 2622-98 
``Standard Test Method for Sulfur in Petroleum Products by Wavelength 
Dispersive X-ray Fluorescence Spectrometry,'' D 3246-96 ``Standard Test 
Method for Sulfur in Petroleum Gas by Oxidative Microcoulometry,'' D 
3606-99 ``Standard Test Method for Determination of Benzene and Toluene 
in Finished Motor and Aviation Gasoline by Gas Chromatography,'' D 
1319-99 ``Standard Test Method for Hydrocarbon Types in Liquid 
Petroleum Products by Fluorescent Indicator Adsorption,'' D 4815-99 
``Standard Test Method for Determination of MTBE, ETBE, TAME, DIPE, 
tertiary-Amyl Alcohol and C<INF>1</INF> to C<INF>4</INF> Alcohols in 
Gasoline by Gas Chromatography,'' and D 86-90 ``Standard Test Method 
for Distillation of Petroleum Products,'' with the exception of the 
degrees Fahrenheit figures in Table 9 of D 86-90, are incorporated by 
reference. These incorporations by reference were approved by the 
Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 
1 CFR part 51. Copies may be obtained from the American Society for 
Testing and Materials, 100 Barr Harbor Dr., West Conshohocken, PA 
19428. Copies may be inspected at the Air Docket Section (LE-131), room 
M-1500, U.S. Environmental Protection Agency, Docket No. A-97-03, 401 M 
Street, SW, Washington, DC 20460, or at the Office of the Federal 
Register, 800 North Capitol Street, NW, Suite 700, Washington, DC.

    4. Section 80.81 is amended by revising paragraph (a) to read as 
follows:


Sec. 80.81  Enforcement exemptions for California gasoline.

    (a) The requirements of subparts D, E, F and J of this part are 
modified in accordance with the provisions contained in this section in 
the case of California gasoline.
* * * * *

    5. Subpart J is added to part 80 to read as follows:
Subpart J--Gasoline Toxics

General Information

Sec.
80.800-80.805   [Reserved]
80.810   Who shall register with EPA under the gasoline toxics 
program?

Gasoline Toxics Performance Requirements

80.815  What are the gasoline toxics performance requirements for 
refiners and importers?
80.820   What gasoline is subject to the toxics performance 
requirements of this subpart?
80.825   How is the refinery or importer annual average toxics value 
determined?
80.830   What requirements apply to oxygenate blenders?
80.835   What requirements apply to butane blenders?
80.840   [Reserved]
80.845   What requirements apply to California gasoline?
80.850   How is the compliance baseline determined?
80.855   What is the compliance baseline for refineries or importers 
with insufficient data?
80.860-80.905   [Reserved]

Baseline Determination

80.910   How does a refiner or importer apply for a toxics baseline?
80.915   How are the baseline toxics value and the baseline toxics 
volume determined?
80.920-80.980   [Reserved]

Recordkeeping and Reporting Requirements

80.985  What records shall be kept?
80.990   What are the toxics reporting requirements?

Exemptions

80.995   What if a refiner or importer is unable to produce gasoline 
conforming to the requirements of this subpart?
80.1000   What are the requirements for obtaining an exemption for 
gasoline used for research, development or testing purposes?

Violation Provisions

80.1005  What acts are prohibited under the gasoline toxics program?
80.1010   [Reserved]
80.1015   Who is liable for violations under the gasoline toxics 
program?
80.1020   [Reserved]
80.1025   What penalties apply under this subpart?

Provisions for Foreign Refiners With Individual Toxics Baselines

80.1030   What are the requirements for gasoline produced at foreign 
refineries having individual refiner toxics baselines?

Attest Engagements

80.1035   What are the attest engagement requirements for gasoline 
toxics compliance applicable to refiners and importers?
80.1040   [Reserved]

Additional Rulemaking

80.1045   What additional rulemaking will EPA conduct?

Subpart J--Gasoline Toxics

General Information


Sec. 80.800-80.805  [Reserved]


Sec. 80.810  Who shall register with EPA under the gasoline toxics 
program?

    (a) Refiners and importers who are registered by EPA under 
Sec. 80.76 are deemed to be registered for purposes of this subpart.
    (b) Refiners and importers subject to the standards in Sec. 80.815 
who are not registered by EPA under Sec. 80.76 shall provide to EPA the 
information required by Sec. 80.76 by October 1, 2001, or not later 
than three months in advance of the first date that such person 
produces or imports gasoline, whichever is later.

Gasoline Toxics Performance Requirements


Sec. 80.815  What are the gasoline toxics performance requirements for 
refiners and importers?

    (a)(1) The gasoline toxics performance requirements of this subpart 
require that the annual average toxics value of a refinery or importer 
be compared to that refinery's or importer's compliance baseline, where 
compliance has been achieved if--
    (i) For conventional gasoline, the annual average toxics value is 
less than or equal to the compliance baseline;
    (ii) For reformulated gasoline and RBOB, combined, the annual 
average toxics value is greater than or equal to the compliance 
baseline.
    (A) Refineries that only produce RBOB and importers that only 
import RBOB shall treat RBOB as reformulated gasoline for the purposes 
of determining compliance with the requirements of this subpart.
    (B) Refineries that produce both RFG and RBOB and importers that 
import both RFG and RBOB must combine any RFG and RBOB qualities and 
volumes

[[Page 17264]]

for the purposes of determining compliance with the requirements of 
this subpart.
    (2) The requirements under this paragraph (a) shall be met by the 
importer for all imported gasoline, except gasoline imported as 
Certified Toxics-FRGAS under Sec. 80.1030.
    (b) The gasoline toxics requirements of this subpart apply 
separately for each of the following types of gasoline produced at a 
refinery or imported:
    (1) Reformulated gasoline and RBOB, combined;
    (2) Conventional gasoline.
    (c) Compliance baseline. (1) The compliance baseline of a refinery 
or importer is determined in accordance with Sec. 80.915 or 
Sec. 80.855, as applicable.
    (2) Refiners who have chosen, under subpart E of this part, to 
comply with the requirements of subpart E of this part on an aggregate 
basis, shall comply with the requirements of this subpart on the same 
aggregate basis.
    (d) Compliance determination. (1) The gasoline toxics performance 
requirements of this subpart apply to gasoline produced at a refinery 
or imported by an importer during each calendar year starting January 
1, 2002. The averaging period is January 1 through December 31 of each 
year.
    (2) The annual average toxics value is calculated in accordance 
with Sec. 80.825.
    (e) Deficit carryforward. (1) A refinery or importer creates a 
toxics deficit, separately for reformulated gasoline and conventional 
gasoline, for a given averaging period, when--
    (i) For conventional gasoline, its annual average toxics value is 
greater than the compliance baseline;
    (ii) For reformulated gasoline and RBOB, combined, the annual 
average toxics value is less than the compliance baseline.
    (2) In the calendar year following the year the toxics deficit is 
created, the refinery or importer shall:
    (i) Achieve compliance with the refinery or importer toxics 
performance requirement specified in paragraph (a) of this section; and
    (ii) Generate additional toxics credits sufficient to offset the 
toxics deficit of the previous year.
    (f) Credit carryforward. (1) A refinery or importer generates 
toxics credits, separately for reformulated gasoline and conventional 
gasoline, for a given averaging period, when--
    (i) For conventional gasoline, its annual average toxics value is 
less than the compliance baseline;
    (ii) For reformulated gasoline and RBOB, combined, the annual 
average toxics value is greater than the compliance baseline.
    (2) Toxics credits may be used to offset a toxics deficit in the 
calendar year following the year the credits are generated, provided 
the following criteria are met:
    (i) Reformulated gasoline toxics credits are only to be used to 
offset a reformulated gasoline toxics deficit; conventional gasoline 
credits are only to be used to offset a conventional gasoline toxics 
deficit.
    (ii) A refiner only offsets a toxics deficit at a refinery with 
toxics credits generated by that refinery.
    (iii) Credits generated on an aggregate basis may only be used to 
offset a deficit calculated on an aggregate basis.
    (iv) Credits used to offset a deficit from the previous year may 
not also be carried forward to the following year. Credits in excess of 
those used to offset a deficit from the previous year may be used to 
offset a deficit in the following year.
    (v) Only toxics credits generated under this subpart may be used to 
offset a toxics deficit created under this subpart.


Sec. 80.820  What gasoline is subject to the toxics performance 
requirements of this subpart?

    For the purpose of this subpart, all reformulated gasoline, 
conventional gasoline and RBOB, collectively called ``gasoline'' unless 
otherwise specified, is subject to the requirements under this subpart, 
as applicable, with the following exceptions:
    (a) Gasoline that is used to fuel aircraft, racing vehicles or 
racing boats that are used only in sanctioned racing events, provided 
that:
    (1) Product transfer documents associated with such gasoline, and 
any pump stand from which such gasoline is dispensed, identify the 
gasoline either as gasoline that is restricted for use in aircraft, or 
as gasoline that is restricted for use in racing motor vehicles or 
racing boats that are used only in sanctioned racing events;
    (2) The gasoline is completely segregated from all other gasoline 
throughout production, distribution and sale to the ultimate consumer; 
and
    (3) The gasoline is not made available for use as motor vehicle 
gasoline, or dispensed for use in motor vehicles, except for motor 
vehicles used only in sanctioned racing events.
    (b) Gasoline that is exported for sale outside the U.S.
    (c) Gasoline designated as California gasoline under Sec. 80.845, 
and used in California.
    (d) Gasoline used in American Samoa, Guam and the Commonwealth of 
the Northern Mariana Islands.
    (e) Gasoline exempt per Sec. 80.995.
    (f) Gasoline exempt per Sec. 80.1000.


Sec. 80.825  How is the refinery or importer annual average toxics 
value determined?

    (a) The refinery or importer annual average toxics value is 
calculated as follows:
[GRAPHIC] [TIFF OMITTED] TR29MR01.000

Where:

T<INF>a</INF> = The refinery or importer annual average toxics value, 
as applicable.
V<INF>i</INF> = The volume of applicable gasoline produced or imported 
in batch i.
T<INF>i</INF> = The toxics value of batch i.
n = The number of batches of gasoline produced or imported during the 
averaging period.
i = Individual batch of gasoline produced or imported during the 
averaging period.

    (b) The calculation specified in paragraph (a) of this section 
shall be made separately for each type of gasoline specified at 
Sec. 80.815(b).
    (c) The toxics value, T<INF>i</INF>, of each batch of gasoline is 
determined using the Phase II Complex Model specified at Sec. 80.45.
    (1) The toxics value, T<INF>i</INF>, of each batch of reformulated 
gasoline or RBOB, and the annual average toxics value, T<INF>a</INF>, 
for reformulated gasoline and RBOB, combined, under this subpart are in 
percent reduction from the statutory baseline described in 
Sec. 80.45(b) and volumes are in gallons.
    (2) The toxics value, T<INF>i</INF>, of each batch of conventional 
gasoline, and the annual average toxics value, T<INF>a</INF>, for 
conventional gasoline under this subpart are in milligrams per mile 
(mg/mile) and volumes are in gallons.
    (d) All refinery or importer annual average toxics value 
calculations shall be conducted to two decimal places.
    (e) A refiner or importer may include oxygenate added downstream 
from the refinery or import facility when calculating the toxics value, 
provided the following requirements are met:
    (1) For oxygenate added to conventional gasoline, the refiner or 
importer shall comply with the requirements of Sec. 80.101(d)(4)(ii).
    (2) For oxygenate added to RBOB, the refiner or importer shall 
comply with the requirements of Sec. 80.69(a).
    (f) Gasoline excluded. Refiners and importers shall exclude from 
compliance calculations all of the following:
    (1) Gasoline that was not produced at the refinery;

[[Page 17265]]

    (2) In the case of an importer, gasoline that was imported as 
Certified Toxics-FRGAS under Sec. 80.1030;
    (3) Blending stocks transferred to others;
    (4) Gasoline that has been included in the compliance calculations 
for another refinery or importer; and
    (5) Gasoline exempted from standards under Sec. 80.820.


Sec. 80.830  What requirements apply to oxygenate blenders?

    Oxygenate blenders who blend oxygenate into gasoline downstream of 
the refinery that produced the gasoline or the import facility where 
the gasoline was imported are not subject to the requirements of this 
subpart applicable to refiners for this gasoline.


Sec. 80.835  What requirements apply to butane blenders?

    Butane blenders who blend butane into gasoline downstream of the 
refinery that produced the gasoline or the import facility where the 
gasoline was imported are not subject to the requirements of this 
subpart applicable to refiners for this gasoline.


Sec. 80.840  [Reserved]


Sec. 80.845  What requirements apply to California gasoline?

    (a) Definition. For purposes of this subpart ``California 
gasoline'' means any gasoline designated by the refiner or importer as 
for use in California.
    (b) California gasoline exemption. California gasoline that 
complies with all the requirements of this section is exempt from all 
other provisions of this subpart.
    (c) Requirements for California gasoline. (1) Each batch of 
California gasoline shall be designated as such by its refiner or 
importer.
    (2) [Reserved]
    (3) Designated California gasoline must ultimately be used in the 
State of California and not used elsewhere.
    (4) In the case of California gasoline produced outside the State 
of California, the transferors and transferees shall meet the product 
transfer document requirements under Sec. 80.81(g).
    (5) Gasoline that is ultimately used in any part of the United 
States outside of the State of California shall comply with the 
standards and requirements of this subpart, regardless of any 
designation as California gasoline.


Sec. 80.850  How is the compliance baseline determined?

    (a) The compliance baseline to which annual average toxics values 
are compared according to Sec. 80.815(a) is calculated according to the 
following equation:
[GRAPHIC] [TIFF OMITTED] TR29MR01.001

Where:

T<INF>CBase</INF> = Compliance baseline toxics value.
T<INF>Base</INF> = Baseline toxics value for the refinery or importer, 
calculated according to Sec. 80.915(b)(1).
V<INF>Base</INF> = Baseline volume for the refinery or importer, 
calculated according to Sec. 80.915(b)(2).
T<INF>Exist</INF> = Existing toxics standard, per paragraph (b) of this 
section.
V<INF>inc</INF> = Volume of gasoline produced during the averaging 
period in excess of V<INF>Base</INF>.

    (b) The value of existing toxics standard, T<INF>Exist</INF>, is 
equal to:
    (1) 21.5 percent, for reformulated gasoline and RBOB, combined;
    (2) The refinery's or importer's anti-dumping compliance baseline 
value for exhaust toxics, in mg/mi, per Sec. 80.101(f), for 
conventional gasoline.
    (c) If the refinery or importer produced less gasoline during the 
compliance period than its baseline volume V<INF>Base</INF>, the value 
of V<INF>inc</INF> will be zero.


Sec. 80.855  What is the compliance baseline for refineries or 
importers with insufficient data?

    (a) A refinery or importer shall use the methodology specified in 
this section for determining a compliance baseline if it cannot 
determine an applicable toxics value for every batch of gasoline 
produced or imported for 12 or more consecutive months during January 
1, 1998 through December 31, 2000.
    (b)(1) A refinery or importer that cannot determine an applicable 
toxics value on every batch of gasoline produced or imported for 12 or 
more consecutive months during the period January 1, 1998 through 
December 31, 2000 or a refinery or importer that did not produce or 
import reformulated gasoline and/or RBOB (combined) or conventional 
gasoline or both during the period between January 1, 1998 and December 
31, 2000, inclusive, shall have the following as its compliance 
baseline for the purposes of this subpart:
    (i) For conventional gasoline, 94.64 mg/mile.
    (ii) For reformulated gasoline, 26.71 percent reduction from 
statutory baseline.
    (2) By October 31, 2001, EPA will revise by regulation the default 
baseline values specified in paragraph (b)(1) of this section to 
reflect the final 1998-2000 average toxics values.


Sec. 80.860-80.905  [Reserved]

Baseline Determination


Sec. 80.910  How does a refiner or importer apply for a toxics 
baseline?

    (a) A refiner or importer shall submit an application to EPA which 
includes the information required under paragraph (c) of this section 
no later than June 30, 2001 or 3 months prior to the first introduction 
of gasoline into commerce from the refinery or by the importer, 
whichever is later.
    (b) The toxics baseline request shall be sent to: U.S. EPA, Attn: 
Toxics Program (6406J), 401 M Street SW, Washington, DC 20460. For 
commercial (non-postal) delivery: U.S. EPA, Attn: Toxics Program, 501 
3rd Street NW, Washington, DC 20001.
    (c) The toxics baseline application shall include the following 
information:
    (1) A listing of the names and addresses of all refineries owned by 
the company for which the refiner is applying for a toxics baseline, or 
the name and address of the importer applying for a toxics baseline.
    (2) For each refinery and importer--
    (i) The baseline toxics value for each type of gasoline, per 
Sec. 80.815(b), calculated in accordance with Sec. 80.915;
    (ii) The baseline toxics volume for each type of gasoline, per 
Sec. 80.815(b), calculated in accordance with Sec. 80.915;
    (iii) For those with insufficient data pursuant to Sec. 80.855, a 
statement that the refinery's or importer's baseline toxics value is 
the default compliance baseline specified at Sec. 80.855(b), and that 
its baseline toxics volume is zero.
    (3) A letter signed by the president, chief operating or chief 
executive officer, of the company, or his/her delegate, stating that 
the information contained in the toxics baseline determination is true 
to the best of his/her knowledge.
    (4) Name, address, phone number, facsimile number and E-mail 
address of a company contact person.
    (5) The following information for each batch of gasoline produced 
or imported during the period 1998-2000, separately for each type of 
gasoline listed at Sec. 80.815(b):
    (i) Batch number assigned to the batch under Sec. 80.65(d) or 
Sec. 80.101(i);
    (ii) Volume; and
    (iii) Applicable toxics value determined as specified at 
Sec. 80.915(c).
    (d) Foreign refiners shall follow the procedures specified in 
Sec. 80.1030(b) to establish individual toxics baseline values for a 
foreign refinery.
    (e) By October 31, 2001, or 4 months after the submission date, 
whichever is later, EPA will notify the submitter of approval of its 
toxics baseline.

[[Page 17266]]

    (f) If at any time the baseline submitted in accordance with the 
requirements of this section is determined to be incorrect, the 
corrected baseline applies ab initio and the annual average toxics 
requirements are deemed to be those applicable under the corrected 
information.


Sec. 80.915  How are the baseline toxics value and baseline toxics 
volume determined?

    (a)(1) A refinery or importer shall use the methodology specified 
in this section for determining a baseline toxics value if it can 
determine an applicable toxics value for every batch of gasoline 
produced or imported for 12 or more consecutive months during January 
1, 1998 through December 31, 2000.
    (2) The determination in paragraph (a)(1) of this section is made 
separately for each type of gasoline listed at Sec. 80.815(b) produced 
or imported between January 1, 1998 and December 31, 2000, inclusive.
    (3) All consecutive and non-consecutive batch toxics measurements 
between January 1, 1998 and December 31, 2000, inclusive, are to be 
included in the baseline determination, unless the refinery or importer 
petitions EPA to exclude such data on the basis of data quality, per 
Sec. 80.91(d)(6), and receives permission from EPA to exclude such 
data.
    (b)(1) A refinery's or importer's baseline toxics value is 
calculated using the following equation:
[GRAPHIC] [TIFF OMITTED] TR29MR01.002

Where:

T<INF>Base</INF> = Baseline toxics value.
V<INF>i</INF> = Volume of gasoline batch i produced or imported between 
January 1, 1998 and December 31, 2000, inclusive.
T<INF>i</INF> = Toxics value of gasoline batch i produced or imported 
between January 1, 1998 and December 31, 2000, inclusive.
i = Individual batch of gasoline produced or imported between January 
1, 1998 and December 31, 2000, inclusive.
n = Total number of batches of gasoline produced or imported between 
January 1, 1998 and December 31, 2000, inclusive.
M = Compliance margin.

    (2) A refinery's or importer's baseline toxics volume is calculated 
using the following equation:

[GRAPHIC] [TIFF OMITTED] TR29MR01.003

Where:

V<INF>base</INF> = Baseline toxics volume.
V<INF>i</INF> = Volume of gasoline batch i produced or imported between 
January 1, 1998 and December 31, 2000, inclusive.
i = Individual batch of gasoline produced or imported between January 
1, 1998 and December 31, 2000, inclusive.
n = Total number of batches of gasoline produced or imported between 
January 1, 1998 and December 31, 2000, inclusive.
Y = Number of years between 1998 and 2000, inclusive, during some or 
all of which the refinery produced, or the importer imported, gasoline.

    (c) The calculation specified in paragraph (b) of this section 
shall be made separately for each type of gasoline listed at 
Sec. 80.815(b).
    (d) The toxics value, T<INF>i</INF>, of each batch of gasoline is 
determined using the Phase II Complex Model specified at Sec. 80.45.
    (1) The toxics value, T<INF>i</INF>, of each batch of reformulated 
gasoline or RBOB, and the baseline toxics value, T<INF>Base</INF>, for 
reformulated gasoline and RBOB, combined, under this subpart are in 
percent reduction from the statutory baseline defined in 40 CFR 
80.45(b) and volumes are in gallons.
    (2) The toxics value, T<INF>i</INF>, of each batch of conventional 
gasoline, and the baseline toxics value, T<INF>Base</INF>, for 
conventional gasoline under this subpart are in milligrams per mile 
(mg/mile) and volumes are in gallons.
    (e) All refinery or importer baseline toxics value calculations 
shall be conducted to two decimal places.
    (f) Any refinery for which oxygenate blended downstream was 
included in compliance calculations for 1998-2000, pursuant to 
Sec. 80.65 or Sec. 80.101(d)(4), shall include this oxygenate in the 
baseline calculations for toxics value under paragraph (a) of this 
section.
    (g) Baseline adjustment. (1) A toxics baseline determined 
differently than described in paragraphs (a) through (e) of this 
section may be allowed upon petition by the refiner or importer and 
approval by the Administrator or designee. The petition must be 
included with the baseline submittal under Sec. 80.910.
    (2) A toxics baseline adjustment petition shall, at minimum, be 
accompanied by:
    (i) Unadjusted and adjusted baseline fuel parameters, applicable 
toxics values, and volumes; and
    (ii) A narrative describing how the circumstances during 1998-2000 
materially affected the baseline toxics value calculated under 
paragraph (a) of this section. The narrative shall also describe and 
show the calculations, and the reasoning supporting the calculations, 
used to determine the adjusted values.
    (h) The compliance margin, M, that will be added to the toxics 
baseline calculated according to paragraph (a) of this section shall be 
equal to:
    (1) -0.7% for reformulated gasoline or RBOB;
    (2) 2.5 mg/mile for conventional gasoline.


Sec. 80.920-80.980  [Reserved]

Recordkeeping and Reporting Requirements


Sec. 80.985  What records shall be kept?

    (a) The recordkeeping requirements specified under Sec. 80.74 
applicable to refiners and importers of reformulated gasoline, RBOB 
and/or conventional gasoline apply under this subpart, however, 
duplicate records are not required.
    (b) Additional records that refiners and importers shall keep. 
Beginning January 1, 2002, any refiner for each of its refineries, and 
any importer for the gasoline it imports, shall keep records that 
include the following information:
    (1) The calculations used to determine the applicable compliance 
baseline under Sec. 80.915.
    (2) The calculations used to determine compliance with the 
applicable toxics requirements per Sec. 80.815.
    (3) A copy of all reports submitted to EPA under Sec. 80.990, 
however, duplicate records are not required.
    (c) Additional records importers shall keep. Any importer shall 
keep records that identify and verify the source of each batch of 
Certified Toxics-FRGAS and Non-Certified Toxics-FRGAS imported and 
demonstrate compliance with the requirements for importers under 
Sec. 80.1030(o).
    (d) Length of time records shall be kept. The records required in 
this section shall be kept for five years from the date they were 
created.
    (e) Make records available to EPA. On request by EPA the records 
required in paragraphs (a), (b) and (c) of this section shall be 
provided to the Administrator's authorized representative. For records 
that are electronically generated or maintained the equipment and 
software necessary to read the records shall be made available, or upon 
approval by EPA, electronic records shall be converted to paper 
documents which

[[Page 17267]]

shall be provided to the Administrator's authorized representative.


Sec. 80.990  What are the toxics reporting requirements?

    Beginning with the 2002 averaging period, and continuing for each 
averaging period thereafter, any refiner or importer shall submit to 
EPA the information required in this section, and such other 
information as EPA may require.
    (a) Refiner and importer annual reports. Any refiner, for each of 
its refineries and/or aggregate(s) of refineries, and any importer for 
the gasoline it imports, shall:
    (1) Include in its reformulated gasoline toxics emissions 
performance averaging report per Sec. 80.75(e) the compliance baseline 
and incremental volume, V<INF>inc</INF>, for its reformulated gasoline 
and RBOB, combined, per Sec. 80.850.
    (2) Include in its conventional gasoline report per Sec. 80.105 the 
compliance baseline and incremental volume, V<INF>inc</INF>, for its 
conventional gasoline per Sec. 80.850.
    (3) Exclude Certified Toxics-FRGAS under Sec. 80.1030, if an 
importer.
    (b) Additional reporting requirements for importers. Any importer 
shall report the following information for Toxics-FRGAS imported during 
the averaging period:
    (1) The EPA refiner and refinery registration numbers of each 
foreign refiner and refinery where the Certified Toxics-FRGAS was 
produced; and
    (2) The total gallons of Certified Toxics-FRGAS and Non-Certified 
Toxics-FRGAS imported from each foreign refiner and refinery.

Exemptions


Sec. 80.995  What if a refiner or importer is unable to produce 
gasoline conforming to the requirements of this subpart?

    In appropriate extreme and unusual circumstances (e.g., natural 
disaster or Act of God) which are clearly outside the control of the 
refiner or importer and which could not have been avoided by the 
exercise of prudence, diligence, and due care, EPA may permit a refiner 
or importer, for a brief period, to not meet the requirements of this 
subpart, separately for reformulated gasoline (and RBOB, combined) and 
conventional gasoline, provided the refiner or importer meets all the 
criteria, requirements and conditions contained in Sec. 80.73 (a) 
through (e).


Sec. 80.1000  What are the requirements for obtaining an exemption for 
gasoline used for research, development or testing purposes?

    Gasoline used for research, development or testing purposes is 
exempt from the requirements of this subpart if it is exempted for 
these purposes under the reformulated and conventional gasoline 
programs, as applicable.

Violation Provisions


Sec. 80.1005  What acts are prohibited under the gasoline toxics 
program?

    No person shall:
    (a) Averaging violation. Produce or import gasoline subject to this 
subpart that does not comply with the applicable toxics requirement 
under Sec. 80.815.
    (b) Causing an averaging use violation. Cause another person to 
commit an act in violation of paragraph (a) of this section.


Sec. 80.1010  [Reserved]


Sec. 80.1015  Who is liable for violations under the gasoline toxics 
program?

    (a) Persons liable for violations of prohibited acts--(1) Averaging 
violation. Any person who violates Sec. 80.1005(a) is liable for the 
violation.
    (2) Causing an averaging violation. Any person who causes another 
party to violate Sec. 80.1005(a), is liable for a violation of 
Sec. 80.1005(b).
    (3) Parent corporation liability. Any parent corporation is liable 
for any violations of this subpart that are committed by any of its 
wholly-owned subsidiaries.
    (b) Persons liable for failure to meet other provisions of this 
subpart. (1) Any person who fails to meet a provision of this subpart 
not addressed in paragraph (a) of this section is liable for a 
violation of that provision.
    (2) Any person who causes another party to fail to meet a 
requirement of this subpart not addressed in paragraph (a) of this 
section, is liable for causing a violation of that provision.


Sec. 80.1020  [Reserved]


Sec. 80.1025  What penalties apply under this subpart?

    (a) Any person liable for a violation under Sec. 80.1015 is subject 
to civil penalties as specified in sections 205 and 211(d) of the Clean 
Air Act for every day of each such violation and the amount of economic 
benefit or savings resulting from each violation.
    (b) Any person liable under Sec. 80.1015(a) for a violation of the 
applicable toxics requirements or causing another party to violate the 
requirements during any averaging period, is subject to a separate day 
of violation for each and every day in the averaging period.
    (c) Any person liable under Sec. 80.1015(b) for failure to meet, or 
causing a failure to meet, a provision of this subpart is liable for a 
separate day of violation for each and every day such provision remains 
unfulfilled.

Provisions for Foreign Refiners With Individual Toxics Baselines


Sec. 80.1030  What are the requirements for gasoline produced at 
foreign refineries having individual refiner toxics baselines?

    (a) Definitions. (1) A foreign refinery is a refinery that is 
located outside the United States, the Commonwealth of Puerto Rico, the 
Virgin Islands, Guam, American Samoa, and the Commonwealth of the 
Northern Mariana Islands (collectively referred to in this section as 
``the United States'').
    (2) A foreign refiner is a person who meets the definition of 
refiner under Sec. 80.2(i) for a foreign refinery.
    (3) Toxics-FRGAS means gasoline produced at a foreign refinery that 
has been assigned an individual refinery toxics baseline under 
Sec. 80.915 and that is imported into the U.S.
    (4) Non-Toxics-FRGAS means gasoline that is produced at a foreign 
refinery that has not been assigned an individual refinery toxics 
baseline, gasoline produced at a foreign refinery with an individual 
refinery toxics baseline that is not imported into the United States, 
and gasoline produced at a foreign refinery with an individual toxics 
baseline during a year when the foreign refiner has opted to not 
participate in the Toxics-FRGAS program under paragraph (c)(3) of this 
section.
    (5) Certified Toxics-FRGAS means Toxics-FRGAS the foreign refiner 
intends to include in the foreign refinery's toxics compliance 
calculations under Sec. 80.825, and does include in these compliance 
calculations when reported to EPA.
    (6) Non-Certified Toxics-FRGAS means Toxics-FRGAS that is not 
Certified Toxics-FRGAS.
    (b) Baseline establishment. Any foreign refiner may submit a 
petition to the Administrator for an individual refinery toxics 
baseline pursuant to Sec. 80.915 for all gasoline that was produced at 
the foreign refinery and imported into the United States between 
January 1, 1998 and December 31, 2000.
    (1) The refiner shall follow the procedures specified in 
Secs. 80.91 through 80.93 to establish an anti-dumping baseline, if it 
does not already have such a baseline.

[[Page 17268]]

    (2) In making determinations for foreign refinery baselines, EPA 
will consider all information supplied by a foreign refiner, and in 
addition may rely on any and all appropriate assumptions necessary to 
make such determinations.
    (3)(i) Where a foreign refiner submits a petition that is 
incomplete or inadequate to establish an accurate toxics baseline, and 
the refiner fails to cure this defect after a request for more 
information, EPA will not assign an individual refinery toxics 
baseline.
    (ii) If a foreign refiner does not already have an anti-dumping 
individual baseline per Sec. 80.94, and if pursuant to Sec. 80.94(b)(5) 
EPA does not assign an individual anti-dumping baseline, EPA will also 
not assign an individual refinery toxics baseline.
    (c) General requirements for foreign refiners with individual 
refinery toxics baselines. A foreign refiner of a refinery that has 
been assigned an individual toxics baseline according to Sec. 80.915 
shall designate all gasoline produced at the foreign refinery that is 
exported to the United States as either Certified Toxics-FRGAS or as 
Non-Certified Toxics-FRGAS, except as provided in paragraph (c)(3) of 
this section.
    (1) In the case of Certified Toxics-FRGAS, the foreign refiner 
shall meet all provisions that apply to refiners under this subpart J.
    (2) In the case of Non-Certified Toxics-FRGAS, the foreign refiner 
shall meet all the following provisions, except the foreign refiner 
shall use the name Non-Certified Toxics-FRGAS instead of the names 
``reformulated gasoline'' or ``RBOB'' wherever they appear in the 
following provisions:
    (i) The designation requirements in this section.
    (ii) The recordkeeping requirements under Sec. 80.985.
    (iii) The reporting requirements in Sec. 80.990 and this section.
    (iv) The product transfer document requirements in this section.
    (v) The prohibitions in this section and Sec. 80.1005.
    (vi) The independent audit requirements under Sec. 80.1035, 
paragraph (h) of this section, Secs. 80.125 through 80.127, 
Sec. 80.128(a), (b), (c), (g) through (i), and Sec. 80.130.
    (3)(i) Any foreign refiner that has been assigned an individual 
toxics baseline for a foreign refinery under Sec. 80.915 may elect to 
classify no gasoline imported into the United States as Toxics-FRGAS, 
provided the foreign refiner notifies EPA of the election no later than 
November 1 of the prior calendar year.
    (ii) An election under paragraph (c)(3)(i) of this section shall:
    (A) Apply to an entire calendar year averaging period, and apply to 
all gasoline produced during the calendar year at the foreign refinery 
that is used in the United States; and
    (B) Remain in effect for each succeeding calendar year averaging 
period, unless and until the foreign refiner notifies EPA of a 
termination of the election. The change in election shall take effect 
at the beginning of the next calendar year.
    (4) In the case of information required under this section which 
would duplicate information submitted in accordance with Sec. 80.94, 
the refiner may indicate that such information is also submitted in 
accordance with the requirements of this section. Duplicate submissions 
are not required.
    (d) Designation, product transfer documents, and foreign refiner 
certification. (1) Any foreign refiner of a foreign refinery that has 
been assigned an individual toxics baseline shall designate each batch 
of Toxics-FRGAS as such at the time the gasoline is produced, unless 
the refiner has elected to classify no gasoline exported to the United 
States as Toxics-FRGAS under paragraph (c)(3)(i) of this section.
    (2) On each occasion when any person transfers custody or title to 
any Toxics-FRGAS prior to its being imported into the United States, it 
shall include the following information as part of the product transfer 
document information in this section:
    (i) Identification of the gasoline as Certified Toxics-FRGAS or as 
Non-Certified Toxics-FRGAS; and
    (ii) The name and EPA refinery registration number of the refinery 
where the Toxics-FRGAS was produced.
    (3) On each occasion when Toxics-FRGAS is loaded onto a vessel or 
other transportation mode for transport to the United States, the 
foreign refiner shall prepare a written verification for each batch of 
the Toxics-FRGAS that meets the following requirements:
    (i) The verification shall include the report of the independent 
third party under paragraph (f) of this section, and the following 
additional information:
    (A) The name and EPA registration number of the refinery that 
produced the Toxics-FRGAS;
    (B) The identification of the gasoline as Certified Toxics-FRGAS or 
Non-Certified Toxics-FRGAS;
    (C) The volume of Toxics-FRGAS being transported, in gallons;
    (D) In the case of Certified Toxics-FRGAS:
    (1) The toxics value as determined under paragraph (f) of this 
section; and
    (2) A declaration that the Toxics-FRGAS is being included in the 
compliance calculations under Sec. 80.825 for the refinery that 
produced the Toxics-FRGAS.
    (ii) The verification shall be made part of the product transfer 
documents for the Toxics-FRGAS.
    (e) Transfers of Toxics-FRGAS to non-United States markets. The 
foreign refiner is responsible to ensure that all gasoline classified 
as Toxics-FRGAS is imported into the United States. A foreign refiner 
may remove the Toxics-FRGAS classification, and the gasoline need not 
be imported into the United States, but only if:
    (1)(i) The foreign refiner excludes:
    (A) The volume of gasoline from the refinery's compliance 
calculations under Sec. 80.825; and
    (B) In the case of Certified Toxics-FRGAS, the volume and toxics 
value of the gasoline from the compliance calculations under 
Sec. 80.825.
    (ii) The exclusions under paragraph (e)(1)(i) of this section shall 
be on the basis of the toxics value and volumes determined under 
paragraph (f) of this section; and
    (2) The foreign refiner obtains sufficient evidence in the form of 
documentation that the gasoline was not imported into the United 
States.
    (f) Load port independent sampling, testing and refinery 
identification. (1) On each occasion Toxics-FRGAS is loaded onto a 
vessel for transport to the United States a foreign refiner shall have 
an independent third party:
    (i) Inspect the vessel prior to loading and determine the volume of 
any tank bottoms;
    (ii) Determine the volume of Toxics-FRGAS loaded onto the vessel 
(exclusive of any tank bottoms present before vessel loading);
    (iii) Obtain the EPA-assigned registration number of the foreign 
refinery;
    (iv) Determine the name and country of registration of the vessel 
used to transport the Toxics-FRGAS to the United States; and
    (v) Determine the date and time the vessel departs the port serving 
the foreign refinery.
    (2) On each occasion Certified Toxics-FRGAS is loaded onto a vessel 
for transport to the United States a foreign refiner shall have an 
independent third party:
    (i) Collect a representative sample of the Certified Toxics-FRGAS 
from each vessel compartment subsequent to loading on the vessel and 
prior to departure of the vessel from the port serving the foreign 
refinery;
    (ii) Prepare a volume-weighted vessel composite sample from the 
compartment samples, and determine

[[Page 17269]]

the value for toxics using the methodology specified in Sec. 80.730 by:
    (A) The third party analyzing the sample; or
    (B) The third party observing the foreign refiner analyze the 
sample;
    (iii) Review original documents that reflect movement and storage 
of the Certified Toxics-FRGAS from the refinery to the load port, and 
from this review determine:
    (A) The refinery at which the Toxics-FRGAS was produced; and
    (B) That the Toxics-FRGAS remained segregated from:
    (1) Non-Toxics-FRGAS and Non-Certified Toxics-FRGAS; and
    (2) Other Certified Toxics-FRGAS produced at a different refinery.
    (3) The independent third party shall submit a report:
    (i) To the foreign refiner containing the information required 
under paragraphs (f)(1) and (2) of this section, to accompany the 
product transfer documents for the vessel; and
    (ii) To the Administrator containing the information required under 
paragraphs (f)(1) and (2) of this section, within thirty days following 
the date of the independent third party's inspection. This report shall 
include a description of the method used to determine the identity of 
the refinery at which the gasoline was produced, assurance that the 
gasoline remained segregated as specified in paragraph (n)(1) of this 
section, and a description of the gasoline's movement and storage 
between production at the source refinery and vessel loading.
    (4) The independent third party shall:
    (i) Be approved in advance by EPA, based on a demonstration of 
ability to perform the procedures required in this paragraph (f);
    (ii) Be independent under the criteria specified in 
Sec. 80.65(e)(2)(iii); and
    (iii) Sign a commitment that contains the provisions specified in 
paragraph (i) of this section with regard to activities, facilities and 
documents relevant to compliance with the requirements of this 
paragraph (f).
    (g) Comparison of load port and port of entry testing. (1)(i) 
Except as described in paragraph (g)(1)(ii) of this section, any 
foreign refiner and any United States importer of Certified Toxics-
FRGAS shall compare the results from the load port testing under 
paragraph (f) of this section, with the port of entry testing as 
reported under paragraph (o) of this section, for the volume of 
gasoline and the toxics value.
    (ii) Where a vessel transporting Certified Toxics-FRGAS off loads 
this gasoline at more than one United States port of entry, and the 
conditions of paragraph (g)(2)(i) of this section are met at the first 
United States port of entry, the requirements of paragraph (g)(2) of 
this section do not apply at subsequent ports of entry if the United 
States importer obtains a certification from the vessel owner, that 
meets the requirements of paragraph (s) of this section, that the 
vessel has not loaded any gasoline or blendstock between the first 
United States port of entry and the subsequent port of entry.
    (2)(i) The requirements of this paragraph (g)(2) apply if:
    (A) The temperature-corrected volumes determined at the port of 
entry and at the load port differ by more than one percent; or
    (B) The toxics value determined at the port of entry is higher than 
the toxics value determined at the load port, and the amount of this 
difference is greater than the reproducibility amount specified for the 
port of entry test result by the American Society of Testing and 
Materials (ASTM).
    (ii) The United States importer and the foreign refiner shall treat 
the gasoline as Non-Certified Toxics-FRGAS, and the foreign refiner 
shall exclude the gasoline volume and properties from its gasoline 
toxics compliance calculations under Sec. 80.825.
    (h) Attest requirements. The following additional procedures shall 
be carried out by any foreign refiner of Toxics-FRGAS as part of the 
applicable attest engagement for each foreign refinery under 
Sec. 80.1035:
    (1) The inventory reconciliation analysis under Sec. 80.128(b) and 
the tender analysis under Sec. 80.128(c) shall include Non-Toxics-FRGAS 
in addition to the gasoline types listed in Sec. 80.128(b) and (c).
    (2) Obtain separate listings of all tenders of Certified Toxics-
FRGAS, and of Non-Certified Toxics-FRGAS. Agree the total volume of 
tenders from the listings to the gasoline inventory reconciliation 
analysis in Sec. 80.128(b), and to the volumes determined by the third 
party under paragraph (f)(1) of this section.
    (3) For each tender under paragraph (h)(2) of this section where 
the gasoline is loaded onto a marine vessel, report as a finding the 
name and country of registration of each vessel, and the volumes of 
Toxics-FRGAS loaded onto each vessel.
    (4) Select a sample from the list of vessels identified in 
paragraph (h)(3) of this section used to transport Certified Toxics-
FRGAS, in accordance with the guidelines in Sec. 80.127, and for each 
vessel selected perform the following:
    (i) Obtain the report of the independent third party, under 
paragraph (f) of this section, and of the United States importer under 
paragraph (o) of this section.
    (A) Agree the information in these reports with regard to vessel 
identification, gasoline volumes and test results.
    (B) Identify, and report as a finding, each occasion the load port 
and port of entry parameter and volume results differ by more than the 
amounts allowed in paragraph (g) of this section, and determine whether 
the foreign refiner adjusted its refinery calculations as required in 
paragraph (g) of this section.
    (ii) Obtain the documents used by the independent third party to 
determine transportation and storage of the Certified Toxics-FRGAS from 
the refinery to the load port, under paragraph (f) of this section. 
Obtain tank activity records for any storage tank where the Certified 
Toxics-FRGAS is stored, and pipeline activity records for any pipeline 
used to transport the Certified Toxics-FRGAS, prior to being loaded 
onto the vessel. Use these records to determine whether the Certified 
Toxics-FRGAS was produced at the refinery that is the subject of the 
attest engagement, and whether the Certified Toxics-FRGAS was mixed 
with any Non-Certified Toxics-FRGAS, Non-Toxics-FRGAS, or any Certified 
Toxics-FRGAS produced at a different refinery.
    (5) Select a sample from the list of vessels identified in 
paragraph (h)(3) of this section used to transport Certified and Non-
Certified Toxics-FRGAS, in accordance with the guidelines in 
Sec. 80.127, and for each vessel selected perform the following:
    (i) Obtain a commercial document of general circulation that lists 
vessel arrivals and departures, and that includes the port and date of 
departure of the vessel, and the port of entry and date of arrival of 
the vessel.
    (ii) Agree the vessel's departure and arrival locations and dates 
from the independent third party and United States importer reports to 
the information contained in the commercial document.
    (6) Obtain separate listings of all tenders of Non-Toxics-FRGAS, 
and perform the following:
    (i) Agree the total volume of tenders from the listings to the 
gasoline inventory reconciliation analysis in Sec. 80.128(b).
    (ii) Obtain a separate listing of the tenders under this paragraph 
(h)(6) where the gasoline is loaded onto a marine vessel. Select a 
sample from this listing in accordance with the guidelines in 
Sec. 80.127, and obtain a commercial document of general

[[Page 17270]]

circulation that lists vessel arrivals and departures, and that 
includes the port and date of departure and the ports and dates where 
the gasoline was off loaded for the selected vessels. Determine and 
report as a finding the country where the gasoline was off loaded for 
each vessel selected.
    (7) In order to complete the requirements of this paragraph (h) an 
auditor shall:
    (i) Be independent of the foreign refiner;
    (ii) Be licensed as a Certified Public Accountant in the United 
States and a citizen of the United States, or be approved in advance by 
EPA based on a demonstration of ability to perform the procedures 
required in Secs. 80.125 through 80.130 and this paragraph (h); and
    (iii) Sign a commitment that contains the provisions specified in 
paragraph (i) of this section with regard to activities and documents 
relevant to compliance with the requirements of Secs. 80.125 through 
80.130, Sec. 80.1035 and this paragraph (h).
    (i) Foreign refiner commitments. Any foreign refiner shall commit 
to and comply with the provisions contained in this paragraph (i) as a 
condition to being assigned an individual refinery toxics baseline.
    (1) Any United States Environmental Protection Agency inspector or 
auditor will be given full, complete and immediate access to conduct 
inspections and audits of the foreign refinery.
    (i) Inspections and audits may be either announced in advance by 
EPA, or unannounced.
    (ii) Access will be provided to any location where:
    (A) Gasoline is produced;
    (B) Documents related to refinery operations are kept;
    (C) Gasoline or blendstock samples are tested or stored; and
    (D) Toxics-FRGAS is stored or transported between the foreign 
refinery and the United States, including storage tanks, vessels and 
pipelines.
    (iii) Inspections and audits may be by EPA employees or contractors 
to EPA.
    (iv) Any documents requested that are related to matters covered by 
inspections and audits will be provided to an EPA inspector or auditor 
on request.
    (v) Inspections and audits by EPA may include review and copying of 
any documents related to:
    (A) Refinery baseline establishment, including the volume and 
toxics value, and transfers of title or custody, of any gasoline or 
blendstocks, whether Toxics-FRGAS or Non-toxics-FRGAS, produced at the 
foreign refinery during the period January 1, 1998 through the date of 
the refinery baseline petition or through the date of the inspection or 
audit if a baseline petition has not been approved, and any work papers 
related to refinery baseline establishment;
    (B) The volume and toxics value of Toxics-FRGAS;
    (C) The proper classification of gasoline as being Toxics-FRGAS or 
as not being Toxics-FRGAS, or as Certified Toxics-FRGAS or as Non-
Certified Toxics-FRGAS;
    (D) Transfers of title or custody to Toxics-FRGAS;
    (E) Sampling and testing of Toxics-FRGAS;
    (F) Work performed and reports prepared by independent third 
parties and by independent auditors under the requirements of this 
section and Sec. 80.1035 including work papers; and
    (G) Reports prepared for submission to EPA, and any work papers 
related to such reports.
    (vi) Inspections and audits by EPA may include taking samples of 
gasoline or blendstock, and interviewing employees.
    (vii) Any employee of the foreign refiner will be made available 
for interview by the EPA inspector or auditor, on request, within a 
reasonable time period.
    (viii) English language translations of any documents will be 
provided to an EPA inspector or auditor, on request, within 10 working 
days.
    (ix) English language interpreters will be provided to accompany 
EPA inspectors and auditors, on request.
    (2) An agent for service of process located in the District of 
Columbia will be named, and service on this agent constitutes service 
on and personal and subject matter jurisdiction in the United States 
over the foreign refiner or any employee of the foreign refiner for any 
action by EPA or otherwise by the United States related to the 
requirements of this subpart J.
    (3) A foreign refiner shall be subject to civil liability for 
violations of this section, sections 114, 202(l), 211, and 301(a) of 
the Clean Air Act, as amended (42 U.S.C. 7414, 7521(l), 7545 and 
7601(a)), and all other applicable laws or regulations and shall be 
subject to the provisions thereof. The Administrator may assess a 
penalty against a foreign refiner for any violation of this section by 
a foreign refiner, in the manner set forth in sections 205(c) of the 
CAA, 42 U.S.C. 7524(c) or commence a civil action against a foreign 
refiner to assess and recover a civil penalty in the manner set forth 
in section 205(b) of the CAA, 42 U.S.C. 7524(b). A FR shall be subject 
to criminal liability for violations of this section, section 113(c)(2) 
of the CAA, 42 U.S.C. 7413(c)(2), 18 U.S.C. 1001 and all other 
applicable provisions and shall be subject to the provisions thereof.
    (4) United States substantive and procedural laws shall apply to 
any civil or criminal enforcement action against the foreign refiner or 
any employee of the foreign refiner related to the provisions of this 
section.
    (5) Submitting a petition for an individual refinery toxics 
baseline, producing and exporting gasoline under an individual refinery 
toxics baseline, and all other actions to comply with the requirements 
of this subpart J relating to the establishment and use of an 
individual refinery toxics baseline constitute actions or activities 
that satisfy the provisions of 28 U.S.C. 1605(a)(2), but solely with 
respect to actions instituted against the foreign refiner, its agents 
and employees in any court or other tribunal in the United States for 
conduct that violates the requirements applicable to the foreign 
refiner under this subpart J, including conduct that violates Title 18 
U.S.C. section 1001 and Clean Air Act section 113(c)(2).
    (6) The foreign refiner, or its agents or employees, will not seek 
to detain or to impose civil or criminal remedies against EPA 
inspectors or auditors, whether EPA employees or EPA contractors, for 
actions performed within the scope of EPA employment related to the 
provisions of this section.
    (7) The commitment required by this paragraph (i) shall be signed 
by the owner or president of the foreign refiner business.
    (8) In any case where Toxics-FRGAS produced at a foreign refinery 
is stored or transported by another company between the refinery and 
the vessel that transports the Toxics-FRGAS to the United States, the 
foreign refiner shall obtain from each such other company a commitment 
that meets the requirements specified in paragraphs (i)(1) through (7) 
of this section, and these commitments shall be included in the foreign 
refiner's baseline petition.
    (j) Sovereign immunity. By submitting a petition for an individual 
foreign refinery baseline under this section, or by producing and 
exporting gasoline to the United States under an individual refinery 
toxics baseline under this section, the foreign refiner, its agents and 
employees, without exception, become subject to the full operation of 
the administrative and judicial enforcement powers and provisions of 
the United States without limitation based on sovereign immunity, with

[[Page 17271]]

respect to actions instituted against the foreign refiner, its agents 
and employees in any court or other tribunal in the United States for 
conduct that violates the requirements applicable to the foreign 
refiner under this subpart J, including conduct that violates Title 18 
U.S.C. section 1001 and Clean Air Act section 113(c)(2).
    (k) Bond posting. Any foreign refiner shall meet the requirements 
of this paragraph (k) as a condition to being assigned an individual 
refinery toxics baseline.
    (1) The foreign refiner shall annually post a bond of the amount 
calculated using the following equation:

Bond = G  x  $ 0.01 - Bond<INF>CG</INF>

Where:

Bond = amount of the bond in U. S. dollars.
G = the largest volume of gasoline produced at the foreign refinery and 
exported to the United States, in gallons, during a single calendar 
year among the five preceding calendar years.
Bond<INF>CG</INF> = amount of bond currently posted by the refinery 
pursuant to Sec. 80.94.

    (2) Bonds shall be posted by:
    (i) Paying the amount of the bond to the Treasurer of the United 
States;
    (ii) Obtaining a bond in the proper amount from a third party 
surety agent that is payable to satisfy United States administrative or 
judicial judgments against the foreign refiner, provided EPA agrees in 
advance as to the third party and the nature of the surety agreement; 
or
    (iii) An alternative commitment that results in assets of an 
appropriate liquidity and value being readily available to the United 
States, provided EPA agrees in advance as to the alternative 
commitment.
    (3) If the bond amount for a foreign refinery increases, the 
foreign refiner shall increase the bond to cover the shortfall within 
90 days of the date the bond amount changes. If the bond amount 
decreases, the foreign refiner may reduce the amount of the bond 
beginning 90 days after the date the bond amount changes.
    (4) Bonds posted under this paragraph (k) shall:
    (i) Be used to satisfy any judicial or administrative judgment, 
order, assessment or payment under a judicial or administrative 
settlement agreement that results from an administrative or judicial 
enforcement action for conduct in violation of this subpart J, 
including where such conduct violates Title 18 U.S.C. section 1001 and 
Clean Air Act section 113(c)(2);
    (ii) Be provided by a corporate surety that is listed in the United 
States Department of Treasury Circular 570 ``Companies Holding 
Certificates of Authority as Acceptable Sureties on Federal Bonds'; and
    (iii) Include a commitment that the bond will remain in effect for 
at least five (5) years following the end of latest averaging period 
that the foreign refiner produces gasoline pursuant to the requirements 
of this subpart J.
    (5) On any occasion a foreign refiner bond is used to satisfy any 
judgment or other obligation, the foreign refiner shall increase the 
bond to cover the amount used within 90 days of the date the bond is 
used.
    (6) The bond is used for payment of, not in lieu of, any obligation 
arising under any judgment, order, assessment or settlement agreement. 
Nothing herein is intended to waive any portion of any obligation 
except what portion is actually paid by use of funds from the bond.
    (l) [Reserved]
    (m) English language reports. Any report or other document 
submitted to EPA by a foreign refiner shall be in English language, or 
shall include an English language translation.
    (n) Prohibitions. (1) No person may combine Certified Toxics-FRGAS 
with any Non-Certified Toxics-FRGAS or Non-Toxics-FRGAS, and no person 
may combine Certified Toxics-FRGAS with any Certified Toxics-FRGAS 
produced at a different refinery, until the importer has met all the 
requirements of paragraph (o) of this section, except as provided in 
paragraph (e) of this section.
    (2) No foreign refiner or other person may cause another person to 
commit an action prohibited in paragraph (n)(1) of this section, or 
that otherwise violates the requirements of this section.
    (o) United States importer requirements. Any United States importer 
shall meet the following requirements:
    (1) Each batch of imported gasoline shall be classified by the 
importer as being Toxics-FRGAS or as Non-Toxics-FRGAS, and each batch 
classified as Toxics-FRGAS shall be further classified as Certified 
Toxics-FRGAS or as Non-Certified Toxics-FRGAS.
    (2) Gasoline shall be classified as Certified Toxics-FRGAS or as 
Non-Certified Toxics-FRGAS according to the designation by the foreign 
refiner if this designation is supported by product transfer documents 
prepared by the foreign refiner as required in paragraph (d) of this 
section, unless the gasoline is classified as Non-Certified Toxics-
FRGAS under paragraph (g) of this section.
    (3) For each gasoline batch classified as Toxics-FRGAS, any United 
States importer shall perform the following procedures:
    (i) In the case of both Certified and Non-Certified Toxics-FRGAS, 
have an independent third party:
    (A) Determine the volume of gasoline in the vessel;
    (B) Use the foreign refiner's Toxics-FRGAS certification to 
determine the name and EPA-assigned registration number of the foreign 
refinery that produced the Toxics-FRGAS;
    (C) Determine the name and country of registration of the vessel 
used to transport the Toxics-FRGAS to the United States; and
    (D) Determine the date and time the vessel arrives at the United 
States port of entry.
    (ii) In the case of Certified Toxics-FRGAS, have an independent 
third party:
    (A) Collect a representative sample from each vessel compartment 
subsequent to the vessel's arrival at the United States port of entry 
and prior to off loading any gasoline from the vessel;
    (B) Prepare a volume-weighted vessel composite sample from the 
compartment samples; and
    (C) Determine the toxics value using the methodologies specified in 
Sec. 80.730, by:
    (1) The third party analyzing the sample; or
    (2) The third party observing the importer analyze the sample.
    (4) Any importer shall submit reports within thirty days following 
the date any vessel transporting Toxics-FRGAS arrives at the United 
States port of entry:
    (i) To the Administrator containing the information determined 
under paragraph (o)(3) of this section; and
    (ii) To the foreign refiner containing the information determined 
under paragraph (o)(3)(ii) of this section.
    (5) Any United States importer shall meet the requirements 
specified in Sec. 80.815 for any imported gasoline that is not 
classified as Certified Toxics-FRGAS under paragraph (o)(2) of this 
section.
    (p) Truck Imports of Certified Toxics-FRGAS produced at a Refinery 
(1) Any refiner whose Certified Toxics-FRGAS is transported into the 
United States by truck may petition EPA to use alternative procedures 
to meet the following requirements:
    (i) Certification under paragraph (d)(5) of this section;
    (ii) Load port and port of entry sampling and testing under 
paragraphs (f) and (g) of this section;

[[Page 17272]]

    (iii) Attest under paragraph (h) of this section; and
    (iv) Importer testing under paragraph (o)(3) of this section.
    (2) These alternative procedures shall ensure Certified Toxics-
FRGAS remains segregated from Non-Certified Toxics-FRGAS and from Non-
Toxics-FRGAS until it is imported into the United States. The petition 
will be evaluated based on whether it adequately addresses the 
following:
    (i) Provisions for monitoring pipeline shipments, if applicable, 
from the refinery, that ensure segregation of Certified Toxics-FRGAS 
from that refinery from all other gasoline;
    (ii) Contracts with any terminals and/or pipelines that receive 
and/or transport Certified Toxics-FRGAS, that prohibit the commingling 
of Certified Toxics-FRGAS with any of the following:
    (A) Other Certified Toxics-FRGAS from other refineries.
    (B) All Non-Certified Toxics-FRGAS.
    (C) All Non-Toxics-FRGAS;
    (iii) Procedures for obtaining and reviewing truck loading records 
and United States import documents for Certified Toxics-FRGAS to ensure 
that such gasoline is only loaded into trucks making deliveries to the 
United States;
    (iv) Attest procedures to be conducted annually by an independent 
third party that review loading records and import documents based on 
volume reconciliation, or other criteria, to confirm that all Certified 
Toxics-FRGAS remains segregated throughout the distribution system and 
is only loaded into trucks for import into the United States.
    (3) The petition required by this section shall be submitted to EPA 
along with the application for small refiner status and individual 
refinery toxics baseline and standards under Sec. 80.240 and this 
section.
    (q) Withdrawal or suspension of a foreign refinery's baseline. EPA 
may withdraw or suspend a baseline that has been assigned to a foreign 
refinery where:
    (1) A foreign refiner fails to meet any requirement of this 
section;
    (2) A foreign government fails to allow EPA inspections as provided 
in paragraph (i)(1) of this section;
    (3) A foreign refiner asserts a claim of, or a right to claim, 
sovereign immunity in an action to enforce the requirements in this 
subpart J; or
    (4) A foreign refiner fails to pay a civil or criminal penalty that 
is not satisfied using the foreign refiner bond specified in paragraph 
(k) of this section.
    (r) Early use of a foreign refinery baseline. (1) A foreign refiner 
may begin using an individual refinery baseline before EPA has approved 
the baseline, provided that:
    (i) A baseline petition has been submitted as required in paragraph 
(b) of this section;
    (ii) EPA has made a provisional finding that the baseline petition 
is complete;
    (iii) The foreign refiner has made the commitments required in 
paragraph (i) of this section;
    (iv) The persons who will meet the independent third party and 
independent attest requirements for the foreign refinery have made the 
commitments required in paragraphs (f)(3)(iii) and (h)(7)(iii) of this 
section; and
    (v) The foreign refiner has met the bond requirements of paragraph 
(k) of this section.
    (2) In any case where a foreign refiner uses an individual refinery 
baseline before final approval under paragraph (r)(1) of this section, 
and the foreign refinery baseline values that ultimately are approved 
by EPA are more stringent than the early baseline values used by the 
foreign refiner, the foreign refiner shall recalculate its compliance, 
ab initio, using the baseline values approved by EPA, and the foreign 
refiner shall be liable for any resulting violation of the gasoline 
toxics requirements.
    (s) Additional requirements for petitions, reports and 
certificates. Any petition for a refinery baseline under Sec. 80.915, 
any alternative procedures under paragraph (r) of this section, any 
report or other submission required by paragraph (c), (f)(2), or (i) of 
this section, and any certification under paragraph (d)(3) of this 
section shall be:
    (1) Submitted in accordance with procedures specified by the 
Administrator, including use of any forms that may be specified by the 
Administrator.
    (2) Be signed by the president or owner of the foreign refiner 
company, or by that person's immediate designee, and shall contain the 
following declaration:

    I hereby certify: (1) That I have actual authority to sign on 
behalf of and to bind [insert name of foreign refiner] with regard 
to all statements contained herein; (2) that I am aware that the 
information contained herein is being certified, or submitted to the 
United States Environmental Protection Agency, under the 
requirements of 40 CFR Part 80, subpart J, and that the information 
is material for determining compliance under these regulations; and 
(3) that I have read and understand the information being certified 
or submitted, and this information is true, complete and correct to 
the best of my knowledge and belief after I have taken reasonable 
and appropriate steps to verify the accuracy thereof.
    I affirm that I have read and understand the provisions of 40 
CFR Part 80, subpart J, including 40 CFR 80.1030 [insert name of 
foreign refiner]. Pursuant to Clean Air Act section 113(c) and Title 
18, United States Code, section 1001, the penalty for furnishing 
false, incomplete or misleading information in this certification or 
submission is a fine of up to $10,000, and/or imprisonment for up to 
five years.

Attest Engagements


Sec. 80.1035  What are the attest engagement requirements for gasoline 
toxics compliance applicable to refiners and importers?

    In addition to the requirements for attest engagements that apply 
to refiners and importers under Secs. 80.125 through 80.130, and 
Sec. 80.1030, the attest engagements for refiners and importers 
applicable to this subpart J shall include the following procedures and 
requirements each year, which should be applied separately to 
reformulated gasoline (and RBOB, combined) and conventional gasoline:
    (a) Obtain the EPA toxics baseline approval letter for the refinery 
to determine the refinery's applicable baseline toxics value and 
baseline toxics volume under Sec. 80.915.
    (b) Obtain a written representation from the company representative 
stating the toxics value(s) that the company used as its baseline(s) 
and agree that number to paragraph (a) of this section.
    (c) Obtain and read a copy of the refinery's or importer's annual 
toxics reports per Secs. 1A80.75(e) and 80.105 filed with EPA for the 
year to determine the compliance baseline and incremental volume.
    (d) Agree the yearly volume of gasoline reported to EPA in the 
toxics reports with the inventory reconciliation analysis under 
Sec. 80.128.
    (e) Calculate the annual average toxics value level for each type 
of gasoline specified at Sec. 80.815(b) and agree the applicable values 
with the values reported to EPA.
    (f) Calculate the difference between the yearly volume of gasoline 
reported to EPA and the baseline volume, if applicable, to determine 
the yearly incremental volume and agree that value with the value 
reported to EPA.
    (g) Calculate the compliance baseline per Sec. 80.850, and agree 
that value with the value reported to EPA.


Sec. 80.1040  [Reserved]

Additional Rulemaking


Sec. 80.1045  What additional rulemaking will EPA conduct?

    No later than July 1, 2003, the Administrator shall propose any

[[Page 17273]]

requirements to control hazardous air pollutants from motor vehicles 
and motor vehicle fuels that the Administrator determines are 
appropriate pursuant to section 202(l)(2) of the Act. The Administrator 
will take final action on such proposal no later than July 1, 2004. 
During this rulemaking, EPA also intends to evaluate emissions and 
potential strategies relating to hazardous air pollutants from nonroad 
engines and vehicles.

PART 86--CONTROL OF EMISSIONS FROM NEW AND IN-USE HIGHWAY VEHICLES 
AND ENGINES

    1. The authority citation for part 86 is revised to read as 
follows:

    Authority: 42 U.S.C. 7401-7521(l) and 7521(m)-7671q.

[FR Doc. 01-37 Filed 3-28-01; 8:45 am]
BILLING CODE 6560-50-P


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