Title 40

SECTION 80.535

80.535 How are NRLM diesel fuel credits generated

§ 80.535 How are NRLM diesel fuel credits generated?

(a) Generation of high sulfur NRLM credits from June 1, 2006 through May 31, 2007. (1) During the period June 1, 2006 through May 31, 2007, a refiner or importer may generate credits pursuant to the provisions of this section if all of the following conditions are met:

(i) The refiner or importer notifies EPA of its intention to generate credits and the period during which it will generate credits. This notification must be received by EPA at least 30 calendar days prior to the date it begins generating credits under this section.

(ii) Each batch or partial batch of NRLM diesel fuel for which credits are claimed shall be subject to all of the provisions of this subpart for NRLM diesel fuel as if it had been produced after June 1, 2007 and before June 1, 2010.

(iii) The number of high-sulfur NRLM credits (HSC) that are generated shall be a positive number.

(2) The refiner or importer shall choose one of the following methods for calculating credits for each calculation period.

(i) For fuel that is dyed under the provisions of § 80.520, HSC equals the volume of fuel in gallons produced or imported during the period identified in paragraph (a)(1) of this section that is designated as NRLM diesel fuel and that is subject to and complies with the provisions of § 80.510(a); or

(ii) For dyed or undyed fuel that complies with the provisions of § 80.598 for a calculation period of June 1, 2006 through May 31, 2007, determine HSC as follows:

HSC = V510 + V520 − BMV Where: V510 = The total volume of NRLM diesel fuel produced or imported during the annual calculation period that complies with the standards of § 80.510(a) or (b). V520 = The total volume of motor vehicle diesel fuel produced or imported during the annual calculation period that complies with the standards of § 80.520(a) or (c). BMV = As calculated in § 80.533(d)(1).

(3) High-sulfur NRLM credits shall be generated and designated as follows:

(i) Credits shall be generated separately for each refiner or importer.

(ii) Credits may not be generated by both a foreign refiner and by an importer for the same motor vehicle diesel fuel.

(iii) Credits shall not be generated under both § 80.531 and this section for the same diesel fuel.

(iv) Any credits generated by a foreign refiner shall be generated as provided in § 80.620(c) and this section.

(4) No credits may be generated under this paragraph (a) after May 31, 2007.

(5) Any fuel for which a refiner or importer wishes to generate credits must be designated as 500 ppm sulfur NRLM diesel fuel when delivered to the next entity. The refiner may not designate the fuel as 500 ppm sulfur with the intent that it be mixed by the next entity with a batch of distillate with a higher sulfur level to create a fuel with a classification other than 500 ppm sulfur or the classification of the fuel it is mixed with (e.g., it cannot mix fuel designated as 500 ppm sulfur with fuel classified as high sulfur to produce a fuel classified as 2000 ppm sulfur to meet state or local sulfur limits).

(6) The refiner or importer must submit a report to the Administrator no later than July 31, 2007. The report must demonstrate that all the NRLM diesel fuel produced or imported which generated credits met the applicable requirements of paragraphs (a)(1) through (a)(5) of this section. If the Administrator finds that such credits did not in fact meet the requirements of paragraphs (a)(1) through (a)(5) of this section, as applicable, or if the Administrator determines that there is insufficient information to determine the validity of such credits, the Administrator may deny the credits submitted in whole or in part.

(b) Generation of high-sulfur NRLM credits by small refiners from June 1, 2006 through May 31, 2010. (1) Notwithstanding the dates specified in paragraph (a) of this section, during the period from June 1, 2006 through May 31, 2010, a refiner that is approved by the EPA as a small refiner under § 80.551 may generate credits under paragraph (a) of this section during any compliance period as specified under § 80.599(a)(2) for diesel fuel produced or imported that is designated as NRLM diesel fuel and complies with the provisions of § 80.510(a).

(2) The small refiner must submit a report to the Administrator no later than August 31 after the end of each calculation period during which credits were generated. The report must demonstrate that all the NRLM diesel fuel produced or imported which generated credits met the applicable requirements of paragraphs (a)(1) through (a)(5) of this section. If the Administrator finds that such credits did not in fact meet the requirements of paragraphs (a)(1) through (a)(5) of this section, as applicable, or if the Administrator determines that there is insufficient information to determine the validity of such credits, the Administrator may deny the credits submitted in whole or in part.

(3) In addition, a foreign refiner that is approved by the Administrator to generate credits under § 80.554 shall comply with the requirements of § 80.620.

(c) Generation of 500 ppm sulfur NRLM credits from June 1, 2009 through May 31, 2010. (1) During the period of June 1, 2009 through May 31, 2010, a refiner or importer may generate credits pursuant to the provisions of this section if all of the following conditions are met:

(iii) The number of 500 ppm sulfur NRLM credits in gallons that are generated, C500, shall be a positive number calculated as follows:

C500 = V15−BMV Where: V15 = The total volume in gallons of 15 ppm diesel fuel produced or imported during the period stated under paragraph (c)(1)(i) of this section that is designated as either motor vehicle diesel fuel or NRLM diesel fuel. BMV = As determined in § 80.533(d)(2).

(2) 500 ppm sulfur NRLM credits shall be generated and designated as follows:

(i) Credits shall be generated separately for each refiner or importer.

(ii) Credits may not be generated by both a foreign refiner and by an importer for the same diesel fuel.

(iii) Credits shall not be generated under both § 80.531 and this section for the same diesel fuel.

(iv) Any credits generated by a foreign refiner shall be generated as provided in § 80.620(c) and this section.

(3) No credits may be generated under this paragraph (c) after May 31, 2010.

(4) The refiner or importer must submit a report to the Administrator no later than August 31, 2010. The report must demonstrate that all the 15 ppm sulfur NRLM diesel fuel produced or imported which generated credits met the applicable requirements of paragraphs (c)(1) through (c)(3) of this section. If the Administrator finds that such credits did not in fact meet the requirements of paragraphs (c)(1) through (c)(3) of this section, as applicable, or if the Administrator determines that there is insufficient information to determine the validity of such credits, the Administrator may deny the credits submitted in whole or in part.

(d) Generation of 500 ppm sulfur NRLM credits by small refiners from June 1, 2009 through December 31, 2013. (1) Notwithstanding the dates specified in paragraph (c) of this section, during the period from June 1, 2009 through December 31, 2013, a refiner that is approved by the EPA as a small refiner under § 80.551 may generate credits under paragraph (c) of this section during any compliance period as specified under § 80.599(a)(2) for diesel fuel produced or imported that is designated as NR or NRLM diesel fuel and complies with the provisions of § 80.510(b) or (c).

(2) The small refiner must submit a report to the Administrator no later than August 31 after the end of each calculation period during which credits were generated. The report must demonstrate that all the 15 ppm sulfur NR or NRLM diesel fuel produced or imported for which credits were generated met the applicable requirements of paragraphs (c)(1) through (c)(3) of this section. If the Administrator finds that such credits did not in fact meet the requirements of paragraphs (c)(1) through (c)(3) of this section, as applicable, or if the Administrator determines that there is insufficient information to determine the validity of such credits, the Administrator may deny the credits submitted in whole or in part.

(3) In addition, a foreign refiner that is approved by the Administrator to generate credits under § 80.554 shall comply with the requirements of § 80.620.

[69 FR 39175, June 29, 2004, as amended at 71 FR 25718, May 1, 2006]