EPA420-F-95-026
September 19, 1995
RFG/Anti-Dumping
Questions and Answers
September 19,1995
Fuels and Energy Division
Office of Mobile Sources
U.S. Environmental Protection Agency
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RFG/ANTI-DUMPING QUESTIONS AND ANSWER, SEPTEMBER 19,1995
The following are responses to most of the questions received by the Environmental
Protection Agency (EPA) through August 15, 1995, concerning the manner in which the EPA
intends to implement and assure compliance with the reformulated gasoline and anti-dumping
regulations at 40 CFR Part 80. This document was prepared by EPA's Office of Air and
Radiation, Office of Mobile Sources, and Office of Enforcement and Compliance Assurance,
Office of Regulatory Enforcement, Air Enforcement Division.
Regulated parties may use this document to aid in achieving compliance with the
reformulated gasoline (RFG) and anti-dumping regulations. However, this document does not in
any way alter the requirements of these regulations. While the answers provided in this
document represent the Agency's interpretation and general plans for implementation of the
regulations at this time, some of the responses may change as additional information becomes
available or as the Agency further considers certain issues.
This guidance document does not establish or change legal rights or obligations. It does
not establish binding rules or requirements and is not fully determinative of the issues addressed.
Agency decisions in any particular case will be made applying the law and regulations on the
basis of specific facts and actual action.
While we have attempted to include answers to all questions received by August 15,
1995, the necessity for policy decisions and/or resource constraints may have prevented the
inclusion of certain questions. Questions not answered in this document will be answered in a
subsequent document. Questions that merely require a justification of the regulations, or that
have previously been answered or discussed either in a previous Question and Answer document
or the Preamble to the regulations have been omitted.
Topics Covered
Baselines
September 19, 1995
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BASELINES
1. Question: The July 1, 1994 Q&A document indicates that purchased finished gasoline
should not be included in a refiner's individual 1990 baseline in cases where the purchaser adds
blendstocks or finished gasoline to the purchased gasoline, or does nothing to the purchased
gasoline (see questions F.4 and J.3). However, in EPA's baseline review and approval process,
some refiners have been told that purchased finished gasoline should be included if it has been
changed in any way. Please clarify.
Answer: Section 80.91(c)(l)(iii) of the regulations indicates that purchased finished
gasoline should not be accounted for in a refiner's baseline if it leaves the refinery "unchanged"
from its arrival state. This provision is designed to ensure that a refiner's baseline reflects, to as
great an extent as possible, its activities in producing gasoline in 1990. This provision also
avoids double-counting (defined in more detail below), and is designed to ensure that a refiner's
baseline does not reflect actions attributable to other refiners. A similar approach is taken in the
compliance provisions (see 40 CFR 80.101(e)) where a refiner is required to exclude gasoline
from its compliance calculations which was not produced at its own refinery.
The guidance issued by the Agency on July 1, 1994 for baseline development is consistent
with the approach taken for compliance calculations. It notes that where a refiner purchased
finished gasoline that has been included in the seller's baseline and then added components
produced at its own refinery, only those added components are to be included in the refiner's
baseline calculations; the purchased finished gasoline is not included. The one exception to this
guidance is stated in Section 80.91(c)(l)(iii): if a refiner "changed" the purchased finished
gasoline, it must be included in that refiner's baseline.
Purchased finished gasoline is considered unchanged (per §80.91(c)(l)(iii)) if it was simply
blended with finished gasoline produced at the purchaser's refinery. When purchased finished
gasoline is manipulated in this way, the resulting blend is no different than if fungible mixing
had occurred downstream of the refinery. The finished gasoline produced at the purchaser's own
refinery is a distinct product that can be clearly attributed to that refiner, and its properties are an
accurate reflection of the product made by that refiner in producing gasoline in 1990. The
addition of finished gasoline to the purchased finished gasoline can be treated as a separate event
from the production of either of the precursory batches. Including the properties of the blend
into the purchaser's baseline would result in the properties of the seller's finished gasoline being
accounted for in both the seller's baseline and the purchaser's baseline (double-counting).
Likewise if the purchased finished gasoline was blended with blendstocks such as butane or
alkylate, the purchased gasoline would be considered unchanged. The blendstocks are a distinct
product, clearly attributable to the refiner, and the properties of the blendstock are an accurate
reflection of the product made by that refiner in producing gasoline in 1990. The addition or
mixing of the blendstock and the purchased finished gasoline can be treated as a separate event
from the production of either the blendstocks or the purchased gasoline, and including the
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properties of the final blend in the purchaser's baseline would tend to double-count the properties
of the seller's finished gasoline.
In both forms of blending, the purchased finished gasoline is introduced into commerce in
the same form as it arrived at the buyer's refinery, except with some additional, readily
identifiable components; the fuel components involved all eventually end up being combusted in
a vehicle engine. Since very few interactive effects between fuel parameters are recognized in
the RFG compliance models, the final emission effects of a batch of gasoline are largely
independent of whether the components are in a single batch or two different batches. Thus
mixtures of gasolines or gasoline blendstocks are reasonably considered unchanged for the
purposes of baseline determination.
If blending was regarded as an event that changes purchased finished gasoline, some refinery
baselines could be severely and detrimentally affected. The volumes of purchased finished
gasoline are very small for many refiners, but can be quite substantial for some. For such
refiners, significant differences between the properties of the purchased gasoline and that
produced at their own refinery can result in a baseline which profoundly misrepresents the
impact of that refinery's production on vehicle emissions. In addition, many refiners have data
on the finished gasoline they purchased in 1990, and so can accurately exclude such gasoline
from their baseline.
Unlike blending, reprocessing of purchased finished gasoline would necessarily result in
changes to the components that make up the gasoline batch. These changes would significantly
alter the emission characteristics of the final finished gasoline. Although blending of purchased
finished gasoline with components from the purchaser's own refinery also alters the emission
characteristics of the final blend, there is a critical difference between blending and reprocessing
in terms of the emission effects. For blending, the combustion emissions produced from the final
blend will be nominally equal to the sum of the emissions from the purchased gasoline and those
from the added components, had the blending not occurred. In other words, the same emissions
(amount and type) can be expected regardless of whether blending occurs, because all the
gasoline components in question (i.e. both the purchased finished gasoline and the added
components) will end up being combusted in vehicles anyway; blending simply means that the
components are combusted all at once instead of separately. As a result it may be said that the
emission effects of purchased gasoline can be expected to manifest downstream of the buyer's
refinery regardless of whether or not blending occurs.
However, when a batch of purchased finished gasoline is reprocessed in some way, all of the
original gasoline components will not be combusted in a vehicle. Reprocessing would include
any fuel manipulation that involves a blendstock producing unit, and which results in either a
separation of fuel components or a chemical change to the molecules. Examples would include
using the purchased finished gasoline as a supplemental feedstock to a unit, removing butane
from the purchased gasoline, or redistilling it into separate components. Thus some components
may be removed and sold in a non-fuels market, while other components may be chemically
changed. As a result, the emissions attributable to the original purchased finished gasoline can
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never be expected to manifest downstream of the purchaser's refinery. Thus EPA makes a
distinction between blending and reprocessing of purchased finished gasoline for the purposes of
baseline determination.
Therefore, per §80.91(c)(l)(iii), any purchased finished gasoline which has been reprocessed
in any way (not simply blended) must be included in the purchaser's baseline determination. All
other purchased finished gasoline shall be excluded from a refiner's baseline determination if the
purchased finished gasoline has been included in another refiner's baseline.
EPA is aware that in a limited number of cases it has not implemented Section 80.91
(c)(l)(iii) consistent with the above guidance. For example, certain baselines have been
approved that included purchased finished gasoline that had been blended with either finished
gasoline or blendstocks. In such cases a baseline will need to be resubmitted to the EPA,
regardless of whether a baseline has been approved or is pending approval by EPA. However,
EPA will consider a petition by a refiner to not make such a resubmission if one or more of the
following conditions are met:
1) The refiner is unable to accurately determine or estimate the volumes and properties
of any components added to gasoline purchased in 1990, and so cannot accurately
exclude the purchased finished gasoline from the baseline calculations.
2) Any change in refinery baseline properties or volume resulting from the resubmission
will be de minimis.
3) Any change in refinery baseline properties or volume resulting from the resubmission
would constitute a more lenient baseline.
In addition, if a refiner's baseline has already been approved by EPA and is revised to be more
stringent for any parameter or volume due to the exclusion of purchased finished gasoline, then
the revised baseline will not apply to any gasoline produced prior to January 1, 1996.
September 19, 1995
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