United States Air and Radiation EPA420-F-99-029
Environmental Protection June 1999
Agency
Office of Mobile Sources
&EPA Regulatory
Announcement
Extension of Alaska's Temporary
Exemption from Diesel Fuel
Low-Sulfur Requirements
The U.S. Environmental Protection Agency (EPA) is extending until
January 1, 2004, a temporary exemption from the low-sulfur highway
dieselfuel requirements to areas in Alaska accessible to the Federal Aid
Highway System. This extension will continue to provide needed
flexibility for the regulated industry and prevent cost increases while
EPA coordinates a decision on Alaska's request for a permanent
exemption with the nationwide rule on dieselfuel quality.
Background
The Clean Air Act Amendments of 1990 established standards for high-
way diesel fuel that, in part, made it illegal as of October 1, 1993, to
manufacture, sell, supply or offer for sale diesel fuel for highway use that
has a sulfur content greater than 0.05 percent by weight. Similarly, it is
illegal for any person to use fuel that has a sulfur content greater than
0.05 percent by weight in any highway vehicle. EPA also requires diesel
fuel not intended for use in highway vehicles be dyed in order to segre-
gate it from highway fuel.
The Clean Air Act allows Alaska and Hawaii to petition EPA for an
exemption from the diesel fuel requirements. EPA may grant a petition if
EPA determines that it would be unreasonable to require persons in these
states to comply with the diesel fuel requirements due to unique geo-
graphical, meteorological and economic factors, or other significant local
factors.
I Printed on Recycled Paper
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In response to requests from Alaska, EPA
has granted temporary exemptions through
July 1, 1999, to areas of Alaska served by
the Federal Aid Highway System. Alaska
has petitioned EPA for a permanent exemp
tion for those areas. EPA published a
proposal to grant a permanent exemption,
but in response, substan-
tive new information
was submitted. Specifi-
cally, the Engine Manu-
facturers Association
(EMA) asserted that the
use of high-sulfur diesel
fuel in advanced tech-
nology engines designed
to meet the 2004 emis-
sion standards will
result in excessive
engine wear, poor
durability, substantially
increased maintenance
costs, substandard
performance, and in
some cases, engine
failure. This advanced
engine technology will
be marketed in 2002 by
some engine manufac-
turers.
In a related matter, EPA recently issued an
Advanced Notice of Proposed Rulemaking
inviting comment on whether EPA should
set new nationwide requirements for diesel
fuel in the context of considering more
stringent emissions standards for diesel
engines and trucks. EPA expects this
rulemaking to address the appropriate level
of diesel sulfur in Alaska.
Failure to coordinate Alaska's petition for
permanent exemption with the nationwide
rule for diesel fuel quality could potentially
cause significantly increased costs for
regulated parties in Alaska. EPA plans to
make a final decision on Alaska's petition
for a permanent exemption in that nation-
wide rule, which is not expected to be
finalized until sometime in 2000.
The Internal Revenue
Service (IRS) statute
has a diesel fuel dye
requirement for tax
purposes that is similar
to the EPA diesel fuel
dye requirement for
emission purposes. The
IRS statute provides for
an automatic exemption
to areas of Alaska that
have been granted an
EPA exemption from
the diesel fuel sulfur
requirement. Much of
the impact to Alaska of
letting its temporary
exemption expire on
July 1, 1999 (that is,
without adequate lead
time) is related to the
dye requirement.
Temporary Exemption
Extended
The Agency is extending the existing
temporary exemption from EPA's sulfur
and dye requirements for highway diesel
fuel until January 1, 2004. This extension
will continue to provide needed flexibility
for the regulated industry and prevent cost
increases while EPA makes a decision on
Alaska's request for a permanent exemp-
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tion. It will also allow Alaska adequate
lead-time if EPA ultimately decides to deny
Alaska an additional exemption.
EPA is not making a final decision at this
time on Alaska's request for a permanent
exemption. The Agency needs additional
time to consider the request in order to
coordinate the decision with an upcoming
nationwide rule on diesel fuel quality, lead-
time considerations, and fuel dyeing
requirements of another federal agency.
EPA does not expect this decision to have a
significant impact on Alaska's ability to
attain the National Ambient Air Quality
Standards for carbon monoxide or particu-
late matter, due to the limited contribution
of emissions from diesel highway vehicles
in those areas and the sulfur level currently
found in highway vehicle diesel fuel used
in Alaska.
For further information, please contact
Richard Babst at:
U.S. Environmental Protection
Agency
Office of Mobile Sources (6405 J)
401 M Street SW
Washington, DC 20460
202-564-9473
babst.richard@epa.gov
Effect on Industry
During the extension, any person in Alaska
will continue to be allowed to produce,
distribute, sell and use diesel fuel in Alaska
for highway vehicles that does not meet the
low-sulfur standard. Also, diesel fuel not
intended for use in highway vehicles will
not need to be dyed.
For More Information
Additional documents on this final rule are
available electronically from the EPA
Internet server at:
http ://www. epa.gov/oms
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