Office of Transportation                                EPA420-F-06-033
United               and Air Quality                                       April 2006
Environmental               	      	
Agency

                   of                                         for
                                           to  the
                  The U.S. Environmental Protection Agency (EPA) is amending the
                  Highway      and Nonroad            to        a temporary
                          in the sulfur        to/era/ice and allow the use of         to
                         compliance with the       fuel regulations.
                  Background
                  In January 2001 and in June 2004, EPA finalized the Highway Diesel and
                  Nonroad Diesel Rules, respectively, which will implement more stringent
                  standards for new diesel engines and fuels. The rules mandate the use of
                  lower sulfur fuels in diesel engines beginning in 2006 for highway diesel
                  fuel, and 2007 for nonroad diesel fuel. These fuels will enable the use
                  of aftertreatment technologies for new diesel engines, which can reduce
                  harmful emissions by 90 percent or more. Aftertreatment technologies
                  will start phasing into the diesel sector beginning in 2007 for highway
                  and 2011 for nonroad. These programs  will yield significant, long-term
                  benefits for public  health and the  environment.

                  In addition to two subsequent amendments containing clarifications to the
                  rules, we are publishing this Direct Final Rule to make minor changes to
                  assist entities in complying with our diesel fuel rules. Ongoing discus-

-------
sions with stakeholders during the program implementation phase identi-
fied the need for additional changes such as providing a temporary increase
in the sulfur testing tolerance, amending the designate-and-track provi-
sions to account for non-petroleum diesel fuels (i.e., biodiesel) and fuel
that meets California's diesel fuel standards, and amending the alternative
defense provisions to account for conductivity additives and red dye. This
rule will make all of these modifications and help ensure compliance with
EPA's diesel fuel regulations.
Amendments
EPA intends to finalize the following items:
  •  A temporary increase in the sulfur testing tolerance.
  •  Modification of the designate-and-track provisions text to account
     for biodiesel and other non-petroleum diesel fuels and fuel that
     meets California's  standards
  •  Amendments to the alternative defense provisions to account for
     red dye and conductivity additives.
  •  Corrections and other minor changes to ensure that the regulations
     are consistent, which will help to clarify portions of the regulations
     to better facilitate compliance— including the allowance for some
     cross-CTA credit trading for early diesel credits.
Benefits of the Technical Amendments
The temporary increase in the sulfur testing tolerance and the amendments
to the alternative defense provisions will provide for an additional compli-
ance assurance margin for regulated entities.
  •  The modification of the designate-and-track provisions will decrease
     the burden on some regulated entities and also will allow for the use
     of biodiesel (and other non-petroleum diesel fuels).
  •  The correction of errors and omissions will help to clarify portions of
     the regulations to better facilitate compliance with the Highway and
     Nonroad Diesel rules.
Costs
EPA anticipates that costs associated with these technical amendments will
be negligible, if there are any costs at all. (The reduction in the reporting
burden for some entities may actually reduce costs for these entities.)

-------
Public Participation Opportunities
We do not anticipate adverse comments on this rule nor do we currently plan
to hold a hearing, as the technical amendments are generally minor clarifica-
tions and corrections. These technical amendments will assist parties through-
out the fuel refining and distribution system in complying with the diesel
regulations. Further, we have worked with regulated entities and interested
parties regarding these amendments. None of the technical amendments in
this rule will adversely affect regulated entities or the environment; they will
merely clarify, and help to facilitate compliance with, the regulations. How-
ever, we have published a parallel Notice of Proposed Rulemaking along with
the Direct Final Rulemaking in the event that we receive adverse comments.
(If we receive adverse comment on one or more distinct amendments, para-
graphs, or sections of the technical amendments being finalized in this rule-
making, or receive a request for hearing, we will publish a timely withdrawal
in the Federal Register indicating which provisions will become effective and
which provisions are being withdrawn due to adverse comment.)
For More Information
You can access this Direct Final Rule and related documents on EPA's Office
of Transportation and Air Quality Web site at:

    www.epa.gov/otaq/regs/fuels/diesel/diesel.htm

Additional information on the Highway Diesel and Nonroad Diesel Rules is
available at the following Web sites:

  • Highway Diesel Rule:
    Web site:
    Preamble: http://www.epa.gov/otaq/regs/hd2007/frm/frdslpre.pdf
    Regulations: http://www.epa.gov/otaq/regs/hd2007/friTi/frdslreg.pdf

    Nonroad Diesel Rule:
    Web site: www.epa.gov/nonroad-diesel/2004fr.htm
    Preamble and Regulations
  • July 2005 Technical Amendment to the Highway and Nonroad
    Diesel Rules (published July 15, 2005):
    Web site: wwmyyia^jiov/otai^^
    Preamble & Regulations:
    http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.
    access.gpo.gov/2005/pdf/05-l 3781 .pdf

-------
• November 2005 Technical Amendment to the Highway and
  Nonroad Diesel Rules (publishedNovember 22, 2005):
  Web site: www.epa.gov/otaq/regs/fuels/diesel/diesel.htmtfdfr-concurrent
  Preamble & Regulations:
  http://a257.g.akamaitech.net/7/257/2422/01jan20051800/edocket.
  access.gpo.gov/2005/pdf/05-22807.pdf

• Additional compliance help on diesel regulations:
  www.epa.gov/cleandiesel/comphelp.htm

-------