Guidance for the Transition of Sulfur
            and Benzene Credit Programs to an
            Electronic System
v>EPA
United States
Environmental
Agency

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     Guidance for the Transition of Sulfur
      and Benzene Credit Programs to an
                 Electronic System
                      Compliance Division
                 Office of Transportation and Air Quality
                 U.S. Environmental Protection Agency
United States
Environ marital Prelection
Agency
EPA-420-B-15-069
April 2015

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                                                                              April 2015
        Guidance for the Transition of Sulfur and Benzene Credit Programs to an
                                   Electronic System

Background Information

EPA announced in July 2014 that it was transit!oning the sulfur and benzene Averaging,
Banking, and Trading (ABT) programs into the EPA Moderated Transaction System (EMTS).
This transition includes all credit generation and credit trading described in 40 CFR Part 80
under "Gasoline Sulfur" (Subpart O) and "Gasoline Benzene" (Subpart L). These regulations
apply to gasoline refiners and importers, and credits can only be transacted by "a refiner or
importer who intends to use the credit."

This guidance has been developed to assist companies that participate in Fuels ABT programs to
transition to using EMTS over the next year. To learn more about EMTS, visit the EPA's EMTS
web page, which contains tutorials, user documents, and templates. See the Additional Resources
section at the end of this document for a list of links to this and other helpful information.
What is EMTS?

EMTS is an EPA reporting tool utilized for transacting and managing credits under EPA's
Mobile Source Fuels programs, specifically, the Renewable Fuel Standard and Fuels ABT.
EMTS screens the generation and moderates the transfer of credits.  EMTS ensures that credits
are generated by appropriately registered entities, and provides a structured environment in
which to conduct credit transactions.  The system also provides built-in functions that ensure
compliance with regulatory provisions. For example, the Fuels ABT programs have regulatory
provisions specifying the number of times an individual credit can be traded (twice) and who it
can be traded to (gasoline refiners and importers). EMTS data quality checks will prevent entities
from violating these provisions.

The credit transactions that can be conducted in EMTS include credit generation, trades, and
retirement to show compliance. EMTS includes a web interface and the option to submit credit
transactions through an XML node submission.

EMTS generates a set of summary reports to support regulated entities' compliance activity and
end of year reporting. EPA plans to add additional reports to the system with new software
releases.
How do the Fuels ABT and RFS credit trading programs differ in EMTS?

In EMTS, the major differences between the Fuels ABT and RFS programs are as follows:

      The RFS program regulations created Renewable Identification Numbers (RINs) to track
       renewable fuel credits.  However, Fuels ABT credits are tracked in groups with matching
       generating organizations, generating facilities, and creation years. There are no unique

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                                                                              April 2015

       IDs for Fuels ABT credits and they do not have "assignment" codes denoting whether
       they have been "separated" from the fuel, as is the case with RINs.

      Unlike RINs, which can be traded any number of times, Fuels ABT credits can only be
       traded between organizations twice.

      Annual compliance for RFS can be determined either at the facility level or at the
       organization level (i.e., by aggregating facilities). However, Fuels ABT compliance is
       determined only at the facility level for refiners and only at the organization level for
       importers.
How do I enter my Fuels ABT credits into EMTS?

The first step that regulated industry must take in the transition to the electronic system is to
upload all existing, unused credits from the years 2010 through 2014 into EMTS by April 30,
2015.

The process is as follows:

   1.  Download the "EMTS Unused Credits Submission Template," which is an Excel
       spreadsheet designed by EPA for the purpose of entering existing credits into EMTS.
       (See Additional Resources section below for the link to the template.)

   2.  In the template, credits should be aggregated so that each row contains only one credit
       year and one "number of times traded" (e.g., 0, 1, or 2). Use one spreadsheet per
       organization. The following five required fields must be populated:

          o  Organization Identifier: The four-digit EPA Company ID of the organization that
             owns the credits.
          o  Credit Type:  Sulfur or Benzene
          o  Credit Year: Year that the credit was created
          o  Quantity:  Number of credits
          o  Times Traded: Number of times traded (0, 1, or 2)

       For example, a template could include the following data:
Organization
Identifier
9999
9999
9999
9999
9999
Credit Type
Sulfur
Sulfur
Sulfur
Sulfur
Sulfur
Credit Year
2010
2011
2011
2012
2012
Quantity
1000
2000
3000
4000
5000
Times Traded
0
1
2
0
1

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                                                                               April 2015

   3.  After completing the template, login to EMTS web interface and submit the Excel file on
       the "Submit 2010-2014 Unused Fuels ABT Credits" page.
When do I begin using EMTS to transact Fuels ABT credits?

Generally, all Fuels ABT credit transactions should be entered into EMTS beginning May 1,
2015.

There is only one scenario that would require organizations to enter a credit trade in EMTS
before May 1, 2015. If an organization enters their unused credit totals in EMTS and
subsequently, a pending trade is completed with another organization, both organizations must
enter the trade in EMTS to ensure that their credit totals are updated prior to May 1, 2015.

For example, if Organization A uploads their unused credit totals on March 10, 2015 and then on
March 11, 2015 completes a credit trade with Organization B, then both Organizations A and B
will need to enter the credit trade before May 1, 2015 in EMTS to ensure that Organization A's
unused credits totals are updated to reflect the trade.

Therefore, EPA recommends that organizations that intend to transact credits for 2014
compliance through the annual compliance deadline of March 31, 2015 do not enter their unused
credits into EMTS prior to April 1, 2015 to avoid inconsistencies and being required to resubmit
2014 annual compliance reports.
How are Fuels ABT credits managed in EMTS?

Before EMTS, credits were created, traded and used for compliance at the facility (or refinery)
level. For example, organizations that had 15 individual refineries managed 15 individual
accounts. EMTS will streamline credit management by moving all credits to one organization
level account. All credits created for each refinery are automatically assigned to the organization.
So, if 15 individual refineries created credits, those credits would be merged into the
organization account creating one overall balance. Organizations that trade credits will only need
to identify the other organization's four-digit EPA Company ID and not the five-digit Facility
ID.

For annual compliance, refiner organizations can use the organization-level credit balance to
meet their refinery-specific obligations. Importers will only have to meet one annual average
sulfur standard/benzene standard whether they have one import site or many.  Compliance is
reported in EMTS through "retire" transactions. Refinery organizations will enter each refinery's
five-digit Facility ID and the number of credits needed to meet the refinery's  obligation. Unused
credits are carried forward into the next compliance year.

If an organization needs to adjust its credit balance due to either an over-generation or under-
generation of credits, it can be done through a remedial action process.

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                                                                            April 2015
How do I prepare my company to use EMTS for Fuels ABT?
EPA manages registration for all Fuels Programs through the OTAQ Registration system
(OTAQReg), which is accessed through the Central Data Exchange (CDX). Regulations restrict
ownership and use of Fuels ABT credits to gasoline refiners and importers who intend to use the
credits for compliance.

Only organizations that are registered with one or more of the following business activities will
have access to Fuels ABT functionality in EMTS:

     Gasoline Refiner
     Non-Renewable Fuels Importer
     PADD Importer
     Small Refiner - Benzene/Sulfur

All users of both OTAQReg and EMTS must have individual CDX user accounts. To access the
Fuels ABT functionality in EMTS, each user must also have the appropriate "role" assigned by
the Responsible Corporate Officer of the company. Two new roles were created for Fuels ABT:
"Fuels ABT EMTS Submitter" and "Fuels ABT  EMTS Viewer." These new roles allow
companies to restrict EMTS access by program.

Existing users in the OTAQReg system can submit a Company Association request to update
their roles using the "Update Existing Company  Associations" link in the sidebar of OTAQReg.
If an organization wishes to register new users, accounts can be created by following the
instructions available on EPA's website at http://www.epa.gov/otaq/fuels/reporting/newuser.htm.
To learn more about EMTS, visit the EPA's EMTS web page, which contains tutorials, user
documents, and templates. See  the Resources section at the end of this document for a list of
links to this and other helpful information.
How do I submit 2014 Annual Compliance reports?

During the transition of Fuels ABT to EMTS, some reports will either be modified or will no
longer be required after April 30, 2015. The table below lists these reports.
Report Name
Gasoline Sulfur Credit Banking
and Allotment Generation Report
(GSF0100)
Facility Gasoline Sulfur Credit
Transfer/Conversion Report
(GSF0200)
Program
Sulfur
Sulfur
Submit by March 31,
2015 for 2014
Compliance
Yes*
Yes*
Applicability after
April 30, 2015
Yes, the report will be
modified into GSFO 101
and will be required at
the end of the 20 15
compliance year.
No longer required.
(Facility-level reports are
no longer required after
the transition)

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                                                                              April 2015
Report Name
RFG & Anti -Dumping Annual
Benzene Report (MSAT-2)
(RFG2000)
MSAT-2 Credit Transfer Report
(RFG2200)
MSAT-2 Precompliance Report
(MSAT-2) (RFG2500)
Program
Benzene
Benzene
Benzene
Submit by March 31,
2015 for 2014
Compliance
No
Yes*
Small refiners only* (as
approved under 80.1340)
Applicability after
April 30, 2015
Yes, the report will be
modified into RFG2001
and will be required at
the end of the 20 15
compliance year.
No longer required.
Yes, small refiners only
should submit at the end
of the 2015 compliance
year
  If unused credits are submitted into EMTS prior to April 1, 2015 and subsequently, credits are traded, these
  reports must be resubmitted.
Additional Resources

      EMTS User Documentation:
       http://www.epa.gov/otaq/fuels/renewablefuels/emtshtml/emtsdocuments.htm

      Fuels Programs Reporting Guidance:
       http://www.epa.gov/otaq/fuels/reporting/index.htm

      OTAQ Registration User Documentation:
       http://www.epa.gov/otaq/fuels/reporting/programsregistration.htm
Please submit questions to EPA's Fuels Programs support to support@epamts-support.com

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