[Federal Register Volume 84, Number 243 (Wednesday, December 18, 2019)]
[Rules and Regulations]
[Pages 69335-69341]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-27158]
-----------------------------------------------------------------------
ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80
[EPA-HQ-OAR-2018-0638; FRL-10003-29-OAR]
RIN 2060-AU74
Amendments Related to Global Marine Fuel
AGENCY: Environmental Protection Agency (EPA).
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Environmental Protection Agency (EPA) is amending its
diesel fuel regulations to allow fuel suppliers to distribute
distillate diesel fuel that complies with the sulfur standard that
applies internationally for ships instead of the fuel standards that
otherwise apply to distillate diesel fuel in the United States. The
affected fuel may not be used in the United States' Emission Control
Areas.
DATES: This final rule is effective on December 18, 2019.
ADDRESSES: The EPA has established a docket for this action under
Docket ID No. EPA-HQ-OAR-2018-0638. All documents in the docket are
listed on the www.regulations.gov website. Although listed in the
index, some information is not publicly available, e.g., CBI or other
information whose disclosure is restricted by statute. Certain other
material, such as copyrighted material, is not placed on the internet
and will be publicly available only in hard copy form. Publicly
available docket materials are available either electronically in
www.regulations.gov or in hard copy at Air and Radiation Docket and
Information Center, EPA Docket Center, EPA/DC, EPA WJC West Building,
1301 Constitution Ave. NW, Room 3334, Washington, DC. The Public
Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through
Friday, excluding legal holidays. The telephone number for the Public
Reading Room is (202) 566-1744, and the telephone number for the Air
Docket is (202) 566-1742.
FOR FURTHER INFORMATION CONTACT: Robert Anderson, Office of
Transportation and Air Quality, Environmental Protection Agency, (734)
214-4280; [email protected].
SUPPLEMENTARY INFORMATION:
A. Does this action apply to me?
This action relates to companies that produce and distribute
distillate diesel fuel. Categories and entities that might be affected
include the following:
--------------------------------------------------------------------------------------------------------------------------------------------------------
Category NAICS code \a\ Examples of potentially affected entities
--------------------------------------------------------------------------------------------------------------------------------------------------------
Industry....................................................................... 324110 Petroleum refineries (including importers).
424710 Petroleum bulk stations and terminals.
493190 Other warehousing and storage-bulk petroleum storage.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\a\ North American Industry Classification System (NAICS).
This table is not intended to be exhaustive, but rather provides a
guide for readers regarding entities likely covered by these rules.
This table lists the types of entities that we are aware may be
regulated by this action. Other types of entities not listed in the
table could also be regulated. To determine whether your activities are
regulated by this action, you should carefully examine the
applicability criteria in the referenced regulations. You may direct
questions regarding the applicability of this action to the persons
listed in the preceding FOR FURTHER INFORMATION CONTACT section.
B. What is the Agency's authority for taking this action?
EPA adopted sulfur standards for marine diesel fuel under Clean Air
Act authority (42 U.S.C. 7401-7671q). The amendments in this rule are
covered by that same authority.
C. What is the effective date of this action?
Section 553(d)(1) of the Administrative Procedure Act, 5 U.S.C.
553(d)(1), provides that final rules shall not become effective until
30 days after publication in the Federal Register ``except . . . a
substantive rule which grants or recognizes an exemption or relieves a
restriction.'' The purpose of this provision is to ``give affected
parties a reasonable time to adjust their behavior before the final
rule takes effect.'' Omnipoint Corp. v. Fed. Commc'n Comm'n, 78 F.3d
620, 630 (D.C. Cir. 1996); see also United States v. Gavrilovic, 551
F.2d 1099, 1104 (8th Cir. 1977) (quoting legislative history). However,
when the agency grants or recognizes an exemption or relieves a
restriction, affected parties do not need a reasonable time to adjust
because the effect is not adverse. EPA is issuing this final rule under
Clean Air Act section 307(d), which states ``The provisions of section
553 through 557. . . of Title 5 shall not, except as expressly provided
in this section, apply to actions to which this subsection applies.''
42 U.S.C. 7607(d)(1). Thus, section 553(d) of the Administrative
Procedures Act does not apply to this rule. EPA is nevertheless acting
consistently with the policies underlying APA section 553(d) in making
the regulations contained in this final rule effective upon publication
in the Federal Register. The regulatory amendments to 40 CFR part 80,
subpart I, conditionally exempt distillate marine diesel fuel from the
prohibition against distributing
[[Page 69336]]
distillate diesel fuel that exceeds the sulfur content limits for ultra
low-sulfur diesel (ULSD) fuel and Emission Control Area (ECA) marine
fuel. This action will allow for distribution of distillate diesel fuel
used as global marine fuel that complies with the 5,000 ppm \1\ global
fuel sulfur content limit contained in MARPOL Annex VI, which goes into
effect on January 1, 2020; this fuel may not be used in the U.S. ECAs.
Accordingly, it is in keeping with the policy underlying the
Administrative Procedures Act for the regulatory amendments to 40 CFR
part 80, subpart I, to take effect upon publication in the Federal
Register.
---------------------------------------------------------------------------
\1\ The MARPOL Annex VI global fuel sulfur limit is set at 0.50%
m/m; for ease of discussion and consistency with our 40 CFR part 80
program, this rule refers to the global sulfur limit as 5,000 ppm.
---------------------------------------------------------------------------
I. Background
The United States ratified Annex VI to the International Convention
for the Prevention of Pollution from Ships (MARPOL Annex VI) and became
a Party to this Protocol effective January 2009. To address ship sulfur
oxides (SOX) and particulate matter (PM) emissions, the
Annex contains limits on the sulfur content of fuel used in global
shipping. The sulfur content limit is currently 35,000 ppm, decreasing
to 5,000 ppm beginning January 1, 2020. This sulfur limit is not as
stringent as the limit that applies in designated Emission Control
Areas (ECAs), currently set at 1,000 ppm, but is more stringent than
the current global limit and is expected to lead to significant health
and welfare benefits globally.\2\
---------------------------------------------------------------------------
\2\ Designated ECAs for the United States include the North
American ECA and the U.S. Caribbean Sea ECA. More specific
descriptions may be found in EPA fact sheets: ``Designation of North
American Emission Control Area to Reduce Emissions from Ships,''
EPA-420-F-10-015, March 2010, https://www.epa.gov/regulations-emissions-vehicles-and-engines/designation-north-american-emission-control-area-marine; and ``Designation of Emission Control Area to
Reduce Emissions from Ships in the U.S. Caribbean,'' EPA-420-F-11-
024, July 2011, https://www.epa.gov/regulations-emissions-vehicles-and-engines/designation-us-caribbean-emission-control-area-marine.
---------------------------------------------------------------------------
The U.S. refining industry has indicated to EPA that they are well
positioned to supply fuel meeting this new 2020 global marine fuel
standard, for use outside of ECA boundaries.\3\ They will do this by
providing compliant distillate- or residual-type fuel; blended fuel may
be residual or distillate. However, as explained below, they also
expressed a concern that existing provisions in our Clean Air Act (CAA)
diesel fuel regulations may prevent them from distributing compliant
fuel in the United States. We therefore need to amend the CAA fuel
regulations at 40 CFR part 80 to allow distribution in the United
States of distillate fuel meeting the 2020 global marine fuel standard,
for use outside of ECA boundaries. These amendments will help
facilitate smooth implementation of the 2020 global marine fuel
standard.
---------------------------------------------------------------------------
\3\ See, for example, the website for the Coalition for American
Energy Security at https://americanenergysecurity.com.
---------------------------------------------------------------------------
II. Technical Discussion
There are two broad categories of marine fuel: Distillate fuel and
residual fuel. The International Organization for Standardization (ISO)
distinguishes these fuel types based on their kinematic viscosity (see
ISO 8217:2017(E)): Residual fuel ranges from 10 to 700 mm\2\/s at 50
[deg]C while distillate fuel ranges from 1,400 to 11,000 mm\2\/s at 40
[deg]C, meaning that residual fuel is much less viscous than distillate
fuel. Residual fuel also has a higher sulfur content, as it is the
residue of the refining process. The ISO fuel specifications note that
while sulfur content is defined by the purchaser, it is generally
subject to a maximum value of 15,000 ppm for distillate fuel. There is
no maximum sulfur limit that applies when selling residual fuel, and
the sulfur content can be 35,000 ppm or more. MARPOL Annex VI requires
any fuel used onboard a ship to not exceed 35,000 ppm when the ship is
operating outside of designated ECAs, and this global marine fuel has
consistently been residual fuel, not distillate fuel. Beginning in
2020, however, the lower sulfur content of global marine fuel means
that compliant fuel can be distillate, residual, or blends of both. ISO
does not currently have specifications for blended fuel, however they
have issued ISO/PAS 23263 (2019-09), ``Considerations for fuel
suppliers and users regarding marine fuel quality in view of the
implementation of maximum 0.50% sulfur in 2020.'' \4\ This document
``defines general requirements that apply to all 0.50 mass % sulfur (S)
fuels and confirms the applicability of ISO 8217 for those fuels.''
---------------------------------------------------------------------------
\4\ In the introduction to this document, ISO notes that it was
not possible to review the international fuel specifications
contained in ISO 8217:2017, and that ISO/PAS 23263 (2019-09) was
developed to assist in the transition to the 2020 global fuel sulfur
standard.
---------------------------------------------------------------------------
Our CAA fuel program, contained in 40 CFR part 80, defines
distillate fuel based on the T90 value of the fuel; this is the
temperature at which 90 percent volume of the fuel evaporates.
According to our regulations, distillate fuel has a T90 value below 700
[deg]F. Marine distillate fuel sold or distributed in the United States
under the CAA program has been subject to an EPA-established 15 ppm
sulfur limit since 2012; see 40 CFR 80.510(c). In contrast, ECA marine
fuel, both distillate and residual, sold or distributed in the United
States has been subject to a 1,000 ppm sulfur limit since June 2014.
See 40 CFR 80.510(k). This date was meant to facilitate availability of
ECA fuel prior to the January 1, 2015, effective date of the 1,000 ppm
fuel sulfur limit that would apply in our ECAs. Our CAA program does
not contain requirements for residual fuel that is not ECA fuel.
When the United States ratified MARPOL Annex VI in 2008, we did not
revise our CAA fuel program to address the global fuel standards, for
two reasons. First, the international global marine standards were set
at 45,000 ppm until 2012, when it would decrease to 35,000 ppm. Ship
owners were expected to use lower-cost residual fuel to comply with
those limits, which was not covered by our CAA program, and there were
no regulatory requirements for distributing it. Second, the 2020 global
marine fuel sulfur limit was subject to an IMO availability review to
be completed by 2018, making it premature to adopt the 5,000 ppm limit
in 2010, when we modified our CAA fuel program to incorporate the ECA
program. The availability review was completed early, in 2016, and the
IMO's Marine Environment Protection Committee (MEPC) confirmed the 2020
effective date.\5\
---------------------------------------------------------------------------
\5\ Annex VI included a provision in Regulation 14.8-10
requiring an availability review, and that provision contemplated
the possibility as a result of the study that parties may delay the
effective date of the 2020 global marine fuel standard to 2025. The
review was carried out early, in 2016, and the Parties affirmed the
feasibility of meeting the 2020 marine fuel standard and decided not
to delay the standard. MEPC 70/18, 11 November 2016, Report of the
Marine Environment Protection Committee on its Seventieth Session,
para 5.55.3: [the Committee] ``agreed to the date of 1 January 2020
as the effective date of implementation for ships to comply with the
0.50% m/m Sulphur content of fuel oil requirement, as set out in
regulation 14.1.3 of MARPOL Annex VI . . .''
---------------------------------------------------------------------------
Distillate fuel is expected to play a significant role in meeting
the 2020 global marine fuel standard, either as pure distillate fuel or
as a component of blended fuel. This is due to the relatively high cost
of removing sulfur from low-value residual fuel. U.S. fuel suppliers
have informed EPA that they expect to meet the international
requirement by providing either distillate fuel or distillate/residual
blends; the blended fuel might have a T90 value below 700 [deg]F. But,
absent amendment, EPA's existing regulations preclude the distribution
in the United States of distillate fuel above the ECA
[[Page 69337]]
fuel sulfur limit. This limitation would hinder the ability of U.S.
refiners to supply compliant 2020 global marine fuel to ships engaged
in international transportation, because they would be limited to
providing only fuel with a T90 at or above 700 [deg]F. This means that
a ship wishing to purchase fuel in the United States would be able to
buy only 5,000 ppm residual fuel--if it is available; otherwise, the
ship would be limited to purchasing higher-price ECA fuel or delaying
its fuel purchase to the next port of call to avoid that additional
cost. In addition, U.S. fuel providers wishing to participate in the
global fuel market would be faced with exporting 2020 distillate global
marine fuel with the higher T90 value for distribution elsewhere, which
would lead to inefficiencies and increased costs, as well as loss of
some portion of the U.S. share of the global fuel market.
In sum, removing the restriction on the distribution of distillate
fuel between 1,000 ppm and 5,000 ppm in the United States, for use
outside of ECA boundaries, will provide greater flexibility for U.S.
fuel suppliers participating in the global marine fuel market, which
could reduce fuel costs in that the ship operator would not be faced
with either purchasing more expensive ECA fuel or going to another
country to purchase fuel. This change, requested by U.S. refiners, will
also provide a level playing field for all potential U.S. suppliers--
those that supply distillate or blends as well as residual fuel. Such
clarity will aid them in finalizing their fuel supply and distribution
plans.
III. Final Action
This action amends the regulations at 40 CFR part 80, subpart I, to
allow for distribution of distillate diesel fuel that complies with the
5,000 ppm global sulfur standard contained in Annex VI to the
International Convention for the Prevention of Pollution from Ships
(MARPOL Annex VI).
This action includes several regulatory changes to accommodate the
supply and distribution of distillate diesel fuel as global marine
fuel. Primarily we are conditionally exempting distillate diesel fuel
from the prohibition against distributing distillate diesel fuel that
exceeds the ULSD and ECA marine fuel sulfur standards. This exemption
includes several conditions. (1) The fuel must not exceed 0.50 weight
percent (0.50% m/m, which is 5,000 ppm) sulfur; (2) fuel manufacturers
must designate the fuel as global marine fuel; (3) product transfer
documents accompanying the fuel must identify it as global marine fuel;
(4) global marine fuel must be segregated from other fuel that is
subject to the diesel fuel standards in 40 CFR part 80, subpart I; (5)
the fuel may not be used in any vehicles, engines, or equipment
operating in the United States (including vessels operating in an ECA
or ECA-associated area); and (6) manufacturers and distributors must
meet conventional recordkeeping requirements. These changes largely
mirror what we currently require for the manufacturers and distributors
of home heating oil, which is another class of distillate fuel not
subject to diesel fuel standards under 40 CFR part 80. The conditions
imposed on home heating oil and the conditions we are including in this
final rule are designed to prevent higher sulfur distillate fuel from
being diverted into markets that are subject to 15 ppm ULSD standard or
the 1,000 ppm ECA marine standard. The conditions that apply for
distribution of global marine fuel include basic designation, PTD,
segregation and recordkeeping requirements. These conditions are
similar to those previously adopted for distribution of heating oil.
The conditions for distribution of global marine fuel also require the
fuel to meet a 5,000 ppm sulfur limit. This condition is designed to
ensure that the exempted fuel will be used consistent with its
designation as global marine fuel. This reduces the potential for
higher sulfur global marine fuel to be improperly diverted to the ULSD
and ECA marine fuel markets.
As noted above, the narrow set of amendments in this rule are
intended to remove a regulatory obstacle to the distribution and sale
in the United States of marine fuel that meets MARPOL Annex VI global
sulfur standard of 5,000 ppm sulfur. In the future, after we have a
better understanding of the nature of the fuel made available to comply
with the 2020 global marine fuel standard (i.e., whether it is mostly
distillate fuel, blended fuel, or residual fuel), we may consider a
supplemental rule to address any additional implementation questions
with respect to residual fuel.
IV. Economic and Environmental Impacts
The purpose of the amendments is to ensure that U.S. refiners can
permissibly distribute distillate marine fuel up to the 5,000 ppm
sulfur limit, which will facilitate smooth implementation of the 2020
global marine fuel standard. This is likely to reduce the costs of
compliant fuel for ships, although the savings impacts are impossible
to estimate without knowledge of the grades of fuel that will be made
available for this emerging market beginning in January 2020 and their
prices. While there are minor recordkeeping costs for fuel suppliers
associated with the exemption described in Section III, there are no
requirements to reduce the sulfur content of global marine fuel beyond
what is already required by Annex VI.
With respect to environmental and health impacts, the amendments to
the CAA fuel regulations are not expected to alter the benefits of
EPA's coordinated strategy to reduce emissions from large marine diesel
engines and their fuel. This is because the coordinated strategy
relies, in part, on the stringent international fuel sulfur limits that
apply in United States ECAs, which include the coasts of the
continental United States, the main Hawaiian Islands, southeastern
portions of Alaska (U.S. portions of the North American ECA), and the
Commonwealth of Puerto Rico and the U.S. Virgin Islands (U.S. Caribbean
Sea ECA). The ECA fuel sulfur requirements for the North American and
U.S. Caribbean Sea ECAs went into force in August 2012 and January
2014, respectively, one year after they were designated by amendment to
MARPOL Annex VI.\6\ The global fuel sulfur program may provide
additional air quality benefits, for example, in those areas of the
United States where the ECA is narrow, such as southern Florida, or in
areas that are not covered by the ECA, such as Guam and western and
northern Alaska. Note however that those benefits would be a
consequence of the MARPOL Annex VI global sulfur requirements and would
therefore accrue with or without the amendments in this final rule.
---------------------------------------------------------------------------
\6\ See MEPC.190(60) for the amendments to Annex VI designating
the North American Emission Control Area, entry into force 1 August
2011; and MEPC.202(62), designating the U.S. Caribbean Sea Emission
Control Area, entry into force on 1 January 2013. Note that the ECA
sulfur limits became enforceable one year after entry into force of
the relevant amendments.
---------------------------------------------------------------------------
V. Response to Comments
We received several comments on the proposed provisions for global
marine fuel.\7\ Commenters generally supported our proposal and agreed
with our rationale to avoid unintended limitations on the supply and
distribution of distillate global marine fuel.\8\ These commenters
noted that EPA
[[Page 69338]]
did not intend to limit options for compliance with the 2020 global
marine fuel standards when it codified the ULSD and ECA marine fuel
standards in 40 CFR part 80. We appreciate comments in support of our
proposed provisions for global marine fuel and are finalizing in this
action provisions to allow under our CAA regulations for the supply and
distribution of distillate marine fuel meeting the 2020 global marine
fuel standards.
---------------------------------------------------------------------------
\7\ See 84 FR 46909 (September 6, 2019).
\8\ See public comments from American Fuel & Petrochemical
Manufacturers (EPA-HQ-OAR-2018-0638-0020), American Petroleum
Institute (EPA-HQ-OAR-2018-0026), Coalition for American Energy
Security (EPA-HQ-OAR-2018-0638-0029), National Association of Clean
Air Agencies (EPA-HQ-OAR-2018-0638-0025), State of Maine Department
of Environmental Protection (EPA-HQ-OAR-2018-0638-0034), and the
Truck and Engine Manufacturers Association (EPA-HQ-OAR-2018-0638-
0033).
---------------------------------------------------------------------------
One commenter argued that the proposed rule was not in accordance
with the requirements of Annex VI.\9\ They contend that Annex VI does
not create caps or standards for fuel--instead equivalent measures such
as scrubbers are allowed to be used to achieve the same sulfur
reductions and that EPA's proposal would effectively set a cap on
distillate marine fuel.
---------------------------------------------------------------------------
\9\ See public comments from Eversheds Sutherland (EPA-HQ-OAR-
2018-0638-0031).
---------------------------------------------------------------------------
As noted in the proposal, we are not setting a 0.50 weight percent
sulfur standard on global marine fuel under the CAA, Annex VI, or the
Act to Prevent Pollution from Ships (APPS), which is the authority for
implementing and enforcing MARPOL Annex VI requirements in the United
States. We already have sulfur limits established under the CAA that
apply to all distillate marine fuel. This action provides an exemption
to the sulfur limits established under the CAA so parties can supply
and distribute distillate marine fuel for meeting the 2020 global
marine fuel standard. Without this action, parties could not
permissibly supply and distribute such fuel within the United States,
which as other commenters noted, could have adverse effects on global
marine fuel supply.
We do not believe this rulemaking would unnecessarily limit the
opportunities for parties to offer fuel that exceeds the 2020 global
marine fuel standard, such as for vessels with installed scrubbers. As
stated in the proposal,\10\ we believe the Annex VI global marine fuel
standard of 3.50 weight percent that has been in place for some time
was met almost exclusively with residual fuel. We believe it is
unlikely that parties would refine a distillate fuel with greater than
0.50 weight percent (5,000 ppm) sulfur content to use in vessels with
scrubbers when substantially cheaper residual fuel with higher sulfur
levels are available for use. This rule does not preclude the
availability of such fuel for vessels with scrubbers installed.
Blenders at any point in the distribution system would be able to mix
distillate fuel and residual fuel such that the blended fuel has more
than 5,000 ppm sulfur, as long as the blended fuel has a T90
distillation point above 700 [deg]F, since the mixture would be
residual fuel according to the definitions in 40 CFR part 80.
---------------------------------------------------------------------------
\10\ See 84 FR 46910 (September 6, 2019).
---------------------------------------------------------------------------
One commenter noted that EPA staff claimed the proposed rule was
needed so EPA can enforce the 2020 global marine fuel standard.\11\ The
commenter argued that the proposed rule is not needed to enforce the
2020 global marine fuel standard and that EPA, the U.S. Coast Guard,
and Department of Justice can enforce the 2020 standard under APPS.
---------------------------------------------------------------------------
\11\ See public comments from Eversheds Sutherland (EPA-HQ-OAR-
2018-0638-0031).
---------------------------------------------------------------------------
We agree with the commenter that this rule is not necessary to
enforce distillate marine fuel requirements under the CAA or take
enforcement actions related to the Annex VI standards under APPS. The
purpose of this action is to allow parties to supply and distribute
distillate global marine fuel under the CAA and is unrelated to our
authority to enforce global marine fuel standards under APPS. We
consider such comments related to enforcement of MARPOL Annex VI under
APPS outside the scope of this final rule. However, we note that in
addition to allowing distribution of distillate marine fuel to meet the
2020 global marine fuel standards, the amendments will help to avoid
contamination of the distillate marine fuel subject to a sulfur
standard by exempting distillate marine fuel used to meet the 2020
global marine fuel standards.
One commenter argued that the proposed rule is outside the scope of
EPA's authority to impose regulatory requirements and standards under
the CAA and APPS.\12\ The commenter noted that nothing in the CAA or
APPS provides EPA with the authority to regulate the sulfur content of
fuel used entirely outside the United States. The commenter also
suggested that EPA staff suggested EPA's proposal was intending to
establish requirements under APPS. Finally, the commenter suggested
that EPA's proposal exceeds any authority granted to it under MARPOL.
---------------------------------------------------------------------------
\12\ See public comments from Eversheds Sutherland (EPA-HQ-OAR-
2018-0638-0031).
---------------------------------------------------------------------------
We disagree with the commenter's suggestion that EPA lacks
authority to propose an exemption to existing regulatory requirements
under the CAA. We have imposed standards and requirements for all
distillate marine fuel introduced into commerce in the United States
under CAA section 211 at 40 CFR part 80, subpart I.\13\ This action
does not impose new standards under the CAA as the commenter suggests.
As noted in the proposal \14\ and in public comments from other
stakeholders,\15\ this rule is necessary to allow parties to supply and
distribute distillate 2020 global marine fuel that, prior to this
amendment, was prohibited under previous rulemakings limiting
distribution of distillate marine fuel with sulfur content exceeding
standards under 40 CFR part 80. We are not taking this action under
APPS or IMO Annex VI, so comments related to our authority under APPS
or IMO Annex VI are outside the scope of this action.
---------------------------------------------------------------------------
\13\ See 66 FR 5134 (January 18, 2001) and 69 FR 39164 (June 29,
2004).
\14\ See 84 FR 46919 (September 6, 2019).
\15\ See public comments from American Fuel & Petrochemical
Manufacturers (EPA-HQ-OAR-2018-0638-0020), American Petroleum
Institute (EPA-HQ-OAR-2018-0026), Coalition for American Energy
Security (EPA-HQ-OAR-2018-0638-0029), National Association of Clean
Air Agencies (EPA-HQ-OAR-2018-0638-0025), State of Maine Department
of Environmental Protection (EPA-HQ-OAR-2018-0638-0034), and the
Truck and Engine Manufacturers Association (EPA-HQ-OAR-2018-0638-
0033).
---------------------------------------------------------------------------
One commenter contended that the proposed rule was overly complex
because it imposed designation and documentation requirements (through
PTDs) for distillate global marine fuel instead of simply excluding all
fuel used as bunker fuel outside of U.S. waters from the 40 CFR part 80
diesel fuel standards.\16\ The commenter pointed to EPA's treatment of
stationary distillate fuel and exported distillate fuel as examples of
cases where EPA has excluded fuel from the diesel fuel standards of 40
CFR part 80. We disagree that the rule is overly complex. The exemption
for 2020 distillate global marine fuel functions in the same way that
other exemptions to the diesel fuel standards function under the
regulations at 40 CFR part 80, subpart I. This includes identifying the
fuel as exempt (using designations on PTDs), ensuring that the fuel is
segregated from fuel that is subject to the diesel sulfur standards,
and keeping records to demonstrate that the fuel was appropriately
designated and distributed as allowed under the regulations. Other
exemptions to the diesel fuel standards of 40 CFR part 80, subpart I,
also require that such fuel is used for the purpose that the fuel is
exempt (or prohibit the use of such fuel for a different purpose).\17\
In the case of
[[Page 69339]]
exports specifically, parties must designate the distillate fuel for
export (see 40 CFR 80.598(a)(2)) on PTDs (see 40 CFR 80.590(a)(6) or
(b)(2)) and keep records of such designations and PTDs (see 40 CFR
80.592(a)(1) and 80.602(a)(1)). We imposed these provisions on exports
in prior rulemakings to help ensure that exported distillate fuel did
not contaminate distillate fuel that is subject to diesel fuel
standards. We have the same concerns with distillate global marine fuel
since parties could distribute such fuel with distillate fuel subject
to the diesel fuel standards. Therefore, we are imposing necessary and
reasonable conditions for parties claiming an exemption for distillate
global marine fuel consistent with how we currently treat exempted fuel
under 40 CFR part 80, subpart I.
---------------------------------------------------------------------------
\16\ See public comments from Eversheds Sutherland (EPA-HQ-OAR-
2018-0638-0031).
\17\ For example, 40 CFR 80.501(b) excludes a fuel only if the
fuel is exported. If the fuel is not exported and instead used as
diesel fuel in the United States, such fuel would be subject to
applicable diesel fuel requirements under EPA's regulations.
---------------------------------------------------------------------------
One commenter suggested that EPA's proposal misinterpreted its 40
CFR part 80 regulations by noting that distribution of distillate
marine fuel containing more than 1,000 ppm sulfur content could not be
supplied and distributed as global marine fuel.\18\ The commenter
pointed to substitute PTD language requirements for high-sulfur fuel
used in marine vessels under MARPOL Annex VI, Regulations 3 and 4 as an
example of how EPA misinterpreted its regulations to limit the sulfur
content of distillate marine fuel. The commenter also suggested that
the classification of a distillate fuel determines whether the fuel is
subject to EPA's diesel fuel requirements. The commenter states that
since EPA staff recognized that distillate fuel is sometimes not
subject to EPA's requirements (e.g., distillate fuel used for power
generation), that EPA's regulations at 40 CFR part 80 do not cover
high-sulfur distillate fuel used in marine engines.
---------------------------------------------------------------------------
\18\ See public comments from Eversheds Sutherland (EPA-HQ-OAR-
2018-0638-0031).
---------------------------------------------------------------------------
We also disagree with the suggestion that because stationary
distillate fuel does not have to meet the diesel fuel standards of 40
CFR part 80, a category of distillate marine fuel is not subject to the
diesel fuel requirements under 40 CFR part 80 and that a fuel is only
subject to the regulation if a party classifies the fuel as a fuel that
is subject to the regulatory requirements. While the regulatory
provisions in 40 CFR part 80 may not cover all distillate products, the
regulations clearly apply to distillate fuel intended for use, made
available for use, and used in marine engines. The regulations at 40
CFR 80.2(aaa) and (ppp) broadly define both distillate fuel and
locomotive or marine (LM) diesel fuel. Furthermore, the regulation at
40 CFR 80.501 clearly specifies that marine diesel fuel and other types
of distillate fuel are subject to the provisions of 40 CFR part 80,
subpart I.\19\ These definitions and the regulations that cover which
types of fuel are subject to our regulations are not based solely on
how the fuel is classified, as suggested by the commenter, but also on
how the fuel is intended for use, made available for use, and
ultimately used. For example, the definitions of ``marine diesel fuel''
and ``ECA marine fuel'' make clear that the definition covers the
specified fuel ``used, intended for use, or made available for use''
(40 CFR 80.2(ppp) and (ttt)). Thus, claiming that a distillate fuel was
intended for use in stationary internal combustion engines and then
making that fuel available for use or using that fuel in a marine
engine would still subject that fuel to the marine diesel fuel
requirements. The regulations at 40 CFR part 80 require that such fuel
must either meet the appropriate diesel sulfur standard or be exempted
from the applicable standards, subject to certain conditions.
---------------------------------------------------------------------------
\19\ See 40 CFR 80.501(a)(2) and (6).
---------------------------------------------------------------------------
We also disagree that the allowance of substitute language for
high-sulfur fuel used in marine vessels under MARPOL Annex VI,
Regulations 3 and 4 implies that distillate marine fuel containing more
than 1,000 ppm is exempt from the regulations at 40 CFR part 80,
subpart I. First, for a party to use the substitute PTD language for
marine fuel at 40 CFR 80.590(b)(5)-(7), the party and the fuel would
need to be subject to the provisions under 40 CFR part 80, subpart I.
Second, the commenter misunderstands that these language provisions are
in place for residual fuel (which is covered under the regulations at
40 CFR part 80 when used as ECA marine fuel) to demonstrate that they
are not subject to diesel fuel and ECA marine standards and can only be
used in vessels that can lawfully use that fuel. That does not mean
that the fuel and parties that supply and distribute such fuel are not
subject to the requirements or exempt from diesel fuel standards.
Two commenters asked EPA to clarify whether residual fuel would be
affected by the proposed provisions.\20\ These commenters suggested
minor revisions to the definition of global marine fuel and the
proposed regulations to clarify EPA's intent to apply the exemption
provisions only to distillate fuel already subject to 40 CFR part 80
requirements. As noted in the proposal \21\ and in Section II of this
preamble, 40 CFR part 80, subpart I, does not impose new standards on
residual fuel, which makes an exemption unnecessary. We do not intend
to introduce residual fuel regulations as part of this action. We agree
with commenters' suggestions to clarify the scope of the proposed
changes to 40 CFR part 80, subpart I, and have made corresponding
changes to the regulations in response to these comments.
---------------------------------------------------------------------------
\20\ See public comments from American Petroleum Institute (EPA-
HQ-OAR-2018-0638-0026) and Eversheds Sutherland (EPA-HQ-OAR-2018-
0031).
\21\ See 84 FR 46910 (September 6, 2019).
---------------------------------------------------------------------------
One commenter asked for clarification on when designation and
segregation would apply to distillate global marine fuel.\22\ In this
action we are finalizing the proposed condition that, for distillate
global marine fuel to be exempt from the diesel sulfur requirements,
the distillate global marine fuel would need to be designated as global
marine fuel and segregated from fuel subject to the regulatory
requirement from the point of production to the point where the fuel is
supplied to marine vessels that would use the fuel. The same commenter
asked for clarification that 2020-compliant fuel is allowed and that
distillate fuel with sulfur content above 5,000 ppm could be sold as
bunker fuel.\23\ As discussed above, this rule would not preclude the
sale or distribution of residual fuel used to meet the 2020 standard,
and we do not expect production of distillate marine fuel with sulfur
content above 5,000 ppm, as it would be too costly.
---------------------------------------------------------------------------
\22\ See public comments from Eversheds Sutherland (EPA-HQ-OAR-
2018-0638-0031).
\23\ Id.
---------------------------------------------------------------------------
Commenters also requested that EPA complete this action in a timely
manner to avoid disruption in the supply and distribution of distillate
global marine fuel ahead of the January 1, 2020 implementation date for
the global marine fuel sulfur standard.\24\ Commenters noted that
failure to modify the regulations to allow for the supply and
distribution of distillate global marine fuel would have significant
cost impacts and send signals of uncertainty to parties wishing to
supply and distribute product to meet the demand for distillate global
marine fuel in the United States. We appreciate the need to provide
regulatory certainty and believe it is in the public interest to
[[Page 69340]]
allow parties to supply and distribute distillate global marine fuel
ahead of the January 1, 2020, implementation deadline. We are therefore
making the regulatory changes for distillate global marine fuel
effective on the date this action is published in the Federal Register.
---------------------------------------------------------------------------
\24\ See public comments from American Petroleum Institute (EPA-
HQ-OAR-2018-0638-0026) and American Fuel and Petrochemical
Manufacturers (EPA-HQ-OAR-2018-0638-0020).
---------------------------------------------------------------------------
VI. Statutory and Executive Order Reviews
A. Executive Order 12866: Regulatory Planning and Review and Executive
Order 13563: Improving Regulation and Regulatory Review
This action is not a significant regulatory action and was
therefore not submitted to the Office of Management and Budget (OMB)
for review.
B. Executive Order 13771: Reducing Regulations and Controlling
Regulatory Costs
This action is not an Executive Order 13771 regulatory action
because this action is not significant under Executive Order 12866.
C. Paperwork Reduction Act (PRA)
This action does not impose any new information collection burden
under the PRA. OMB has previously approved the information collection
activities contained in the existing regulations and has assigned OMB
control number 2060-0308. We believe this action does not impose any
new information collection burden as this action will provide clarity
and additional flexibility to U.S. fuel suppliers providing distillate
global marine fuel.
D. Regulatory Flexibility Act (RFA)
I certify that this action will not have a significant economic
impact on a substantial number of small entities under the RFA. In
making this determination, the impact of concern is any significant
adverse economic impact on small entities. An agency may certify that a
rule will not have a significant economic impact on a substantial
number of small entities if the rule relieves regulatory burden, has no
net burden, or otherwise has a positive economic effect on the small
entities subject to the rule. This action will provide clarity and
additional flexibility to U.S. fuel suppliers providing distillate
global marine fuel. We have therefore concluded that this action will
have no adverse regulatory impact for any directly regulated small
entities.
E. Unfunded Mandates Reform Act (UMRA)
This action does not contain any unfunded mandate as described in
UMRA, 2 U.S.C. 1531-1538, and does not significantly or uniquely affect
small governments. The action imposes no enforceable duty on any state,
local, or tribal governments or the private sector.
F. Executive Order 13132: Federalism
This action does not have federalism implications. It will not have
substantial direct effects on the states, on the relationship between
the National Government and the states, or on the distribution of power
and responsibilities among the various levels of government.
G. Executive Order 13175: Consultation and Coordination With Indian
Tribal Governments
This action does not have tribal implications as specified in
Executive Order 13175. This rule will be implemented at the Federal
level and affects suppliers of global marine fuel. Thus, Executive
Order 13175 does not apply to this action.
H. Executive Order 13045: Protection of Children From Environmental
Health Risks and Safety Risks
This action is not subject to Executive Order 13045 because it is
not economically significant as defined in Executive Order 12866. This
action's assessment of the environmental impact of the rule contained
in Section IV shows that the rule will have no adverse impact. This
action will therefore not affect children's health.
I. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
This action is not subject to Executive Order 13211, because it is
not a significant regulatory action under Executive Order 12866.
J. National Technology Transfer and Advancement Act (NTTAA)
This rulemaking does not involve technical standards.
K. Executive Order 12898: Federal Actions To Address Environmental
Justice in Minority Populations, and Low-Income Populations
EPA believes that this action does not have disproportionately high
and adverse human health or environmental effects on minority
populations, low income populations, and/or indigenous peoples, as
specified in Executive Order 12898 (59 FR 7629, February 16, 1994). As
discussed in Section IV, we do not expect this action to alter the
benefits of EPA's coordinated strategy to reduce emissions from large
marine diesel engines and their fuels.
L. Congressional Review Act (CRA)
This action is subject to the CRA, and the EPA will submit a rule
report to each House of the Congress and to the Comptroller General of
the United States. This action is not a ``major rule'' as defined by 5
U.S.C. 804(2).
List of Subjects in 40 CFR Part 80
Environmental protection, Fuel additives, Gasoline, Greenhouse
gases, Imports, Labeling, Motor vehicle pollution, Penalties, Reporting
and recordkeeping requirements.
Dated: December 10, 2019.
Andrew R. Wheeler,
Administrator.
For the reasons set forth above, EPA is amending 40 CFR part 80 as
follows:
PART 80--REGULATION OF FUELS AND FUEL ADDITIVES
0
1. The authority citation for part 80 continues to read as follows:
Authority: 42 U.S.C. 7414, 7521, 7542, 7545, and 7601(a).
0
2. Section 80.2 is amended by adding paragraph (aa) to read as follows:
Sec. 80.2 Definitions.
* * * * *
(aa) Global marine fuel means diesel fuel, distillate fuel, or
residual fuel used, intended for use, or made available for use in
steamships or Category 3 marine vessels while the vessels are operating
outside the boundaries of an Emission Control Area (ECA). Global marine
fuel is subject to the provisions of the International Convention for
the Prevention of Pollution from Ships (MARPOL) Annex VI. Note that
this part regulates global marine fuel only if it qualifies as a
distillate fuel.
* * * * *
0
3. Section 80.501 is amended by redesignating paragraphs (a)(6) and (7)
as paragraphs (a)(7) and (8), adding a new paragraph (a)(6), and
revising paragraph (b) to read as follows:
Sec. 80.501 What fuel is subject to the provisions of this subpart?
(a) * * *
(6) Distillate global marine fuel.
* * * * *
(b) Excluded fuel. The provisions of this subpart do not apply to--
(1) Distillate fuel that is designated for export outside the
United States in accordance with Sec. 80.598, identified for export by
a transfer document as
[[Page 69341]]
required under Sec. 80.590, and that is exported.
(2) Residual global marine fuel.
0
4. Section 80.590 is amended by revising the section heading and
paragraph (a) introductory text and adding paragraph (a)(7)(viii) to
read as follows:
Sec. 80.590 What are the product transfer document requirements for
motor vehicle diesel fuel, NRLM diesel fuel, heating oil, distillate
global marine fuel, ECA marine fuel, and other distillates?
(a) This paragraph (a) applies on each occasion that any person
transfers custody or title to MVNRLM diesel fuel, heating oil,
distillate global marine fuel, or ECA marine fuel (including
distillates used or intended to be used as MVNRLM diesel fuel, heating
oil, global marine fuel, or ECA marine fuel) except when such fuel is
dispensed into motor vehicles or nonroad equipment, locomotives, marine
diesel engines or steamships or Category 3 vessels. Note that 40 CFR
part 1043 specifies requirements for documenting fuel transfers to
certain marine vessels. For all fuel transfers subject to this
paragraph (a), the transferor must provide to the transferee documents
which include the following information:
* * * * *
(7) * * *
(viii) Distillate global marine fuel. ``For use only in steamships
or Category 3 marine vessels operating outside the boundaries of an
Emission Control Area (ECA), consistent with MARPOL Annex VI.''
* * * * *
0
5. Section 80.598 is amended by revising paragraphs (a)(2)(i)(G) and
(b)(8)(iii) to read as follows:
Sec. 80.598 What are the designation requirements for refiners,
importers, and distributors?
(a) * * *
(2) * * *
(i) * * *
(G) Exempt distillate fuels such as distillate global marine fuels
under Sec. 80.605, fuels that are covered by a national security
exemption under Sec. 80.606, fuels that are used for purposes of
research and development pursuant to Sec. 80.607, and fuels used in
the U.S. Territories pursuant to Sec. 80.608 (including additional
identifying information).
* * * * *
(b) * * *
(8) * * *
(iii) Exempt distillate fuels such as distillate global marine
fuels under Sec. 80.605, fuels that are covered by a national security
exemption under Sec. 80.606, fuels that are used for purposes of
research and development pursuant to Sec. 80.607, and fuels used in
the U.S. Territories pursuant to Sec. 80.608 (including additional
identifying information).
* * * * *
0
6. Amend Sec. 80.602 by revising the section heading and paragraphs
(a) and (b)(4)(i) to read as follows:
Sec. 80.602 What records must be kept by entities in the NRLM diesel
fuel, ECA marine fuel, distillate global marine fuel, and diesel fuel
additive production, importation, and distribution systems?
(a) Records that must be kept by parties in the NRLM diesel fuel,
ECA marine fuel, distillate global marine fuel and diesel fuel additive
production, importation, and distribution systems. Beginning June 1,
2007, or June 1, 2006, if that is the first period credits are
generated under Sec. 80.535, any person who produces, imports, sells,
offers for sale, dispenses, distributes, supplies, offers for supply,
stores, or transports nonroad, locomotive or marine diesel fuel, or ECA
marine fuel (beginning June 1, 2014) subject to the provisions of this
subpart, must keep all the records specified in this paragraph (a). The
recordkeeping requirements for distillate global marine fuel in this
paragraph (a) start January 1, 2020.
(1) The applicable product transfer documents required under
Sec. Sec. 80.590 and 80.591.
(2) For any sampling and testing for sulfur content for a batch of
NRLM diesel fuel produced or imported and subject to the 15 ppm sulfur
standard or any sampling and testing for sulfur content of any fuel
subject to the provisions of this subpart as part of a quality
assurance testing program, and any sampling and testing for cetane
index, aromatics content, marker solvent yellow 124 content or dye
solvent red 164 content of NRLM diesel fuel, ECA marine fuel, NRLM
diesel fuel additives or heating oil:
(i) The location, date, time and storage tank or truck
identification for each sample collected;
(ii) The name and title of the person who collected the sample and
the person who performed the testing; and
(iii) The results of the tests for sulfur content (including, where
applicable, the test results with and without application of the
adjustment factor under Sec. 80.580(d)), for cetane index or aromatics
content, dye solvent red 164, marker solvent yellow 124 (as
applicable), and the volume of product in the storage tank or container
from which the sample was taken.
(3) The actions the party has taken, if any, to stop the sale or
distribution of any NRLM diesel fuel, distillate global marine fuel, or
ECA marine fuel found not to be in compliance with the sulfur standards
specified in this subpart, and the actions the party has taken, if any,
to identify the cause of any noncompliance and prevent future instances
of noncompliance.
(b) * * *
(4) * * *
(i) NRLM diesel fuel, NR diesel fuel, LM diesel fuel, distillate
global marine fuel, ECA marine fuel, or heating oil, as applicable.
* * * * *
0
7. Section 80.605 is added to read as follows:
Sec. 80.605 Global marine fuel exemption.
(a) The standards of this subpart do not apply to distillate global
marine fuel that is produced, imported, sold, offered for sale,
supplied, offered for supply, stored, dispensed, or transported for use
in steamships or Category 3 marine vessels when operating outside of
ECA boundaries.
(b) The exempt fuel must meet all the following conditions:
(1) It must not exceed 0.50 weight percent sulfur (5.0[middot]10\3\
ppm).
(2) It must be accompanied by product transfer documents as
required under Sec. 80.590.
(3) It must be designated as specified under Sec. 80.598.
(4) It must be segregated from non-exempt fuel at all points in the
distribution system.
(5) It may not be used in any vehicles, engines, or equipment other
than those referred to in paragraph (a) of this section.
(c) Fuel not meeting the conditions specified in paragraph (b) of
this section is subject to the standards, requirements, and
prohibitions that apply for MVNRLM diesel fuel. Similarly, any person
who produces, imports, sells, offers for sale, supplies, offers for
supply, stores, dispenses, or transports distillate global marine fuel
without meeting the recordkeeping requirements under Sec. 80.602 may
not claim the fuel is exempt from the standards, requirements, and
prohibitions that apply for MVNRLM diesel fuel.
[FR Doc. 2019-27158 Filed 12-17-19; 8:45 am]
BILLING CODE 6560-50-P