Summary and Analysis of the
2011-2016 Gasoline Sulfur
Compliance Reports
United States
Environmental Protection
tl Agency
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Summary and Analysis of the
2011-2016 Gasoline Sulfur
Compliance Reports
Compliance Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
NOTICE
This technical report does not necessarily represent final EPA decisions or
positions. It is intended to present technical analysis of issues using data
that are currently available. The purpose in the release of such reports is to
facilitate the exchange of technical information and to inform the public of
technical developments.
£% United States
Environmental Protection
^1 Agency
EPA-420-R-18-005
March 2018
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Table of Contents
I. Executive Summary 2
II. Background on Gasoline Sulfur Programs 4
A. Tier 2 Gasoline Sulfur Program 4
1. Overview 4
2. Averaging, Banking and Trading (ABT) Program for Gasoline Sulfur Credits 4
3. California Gasoline 5
4. Oxygenate Blending and Accounting 5
B. Tier 3 Gasoline Sulfur Program 6
III. Gasoline Sulfur Compliance Analysis from 2011 through 2016 7
A. Summary 7
B. Analysis 9
1. Compliance with 30 ppm Annual Average Sulfur Standard 9
2. Credit Generation and Use 13
3. Combined Annual Data from GSF030X and GSF0100 Reports 16
4. Compliance with 80 ppm Per-Gallon Standard 18
IV. Conclusion 20
V. Appendix 21
List of Acronyms
ABT
Averaging, Banking, and Trading
ASTM
American Society for Testing and Materials
CBOB
Conventional Blendstock for Oxygenate Blending
CFR
Code of Federal Regulations
CG
Conventional Gasoline
EMTS
EPA Moderated Transaction System
EPA
United States Environmental Protection Agency
PADD
Petroleum Administration for Defense District
ppm
Parts per Million
RBOB
Reformulated Blendstock for Oxygenate Blending
RIG
Reformulated Gasoline
GSF0100
Gasoline sulfur credit averaging, banking and trading (ABT) report
GSF0200
Gasoline sulfur credit transfer report
GSF030X
Gasoline sulfur facility summary report
RFG030X
Batch report for RFG and CG
GSF0401
Gasoline sulfur supplementary batch report
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I. Executive Summary
Beginning in 2004, the United States Environmental Protection Agency ("EPA" or "the
Agency") set standards limiting the amount of sulfur in gasoline to help reduce vehicle
emissions, and protect emission controls in vehicles and engines.1 The Tier 2 gasoline sulfur
program established standards beginning January 1, 2004, which phased down gasoline sulfur
over a seven-year period. Under this program, all gasoline produced in or imported into the
United States was required to meet an annual average sulfur standard of 30 parts per million
("ppm") beginning January 1, 2011, and also meet a maximum per-gallon standard of 80 ppm
sulfur. The program allowed refiners and importers to generate gasoline sulfur credits by
producing or importing gasoline containing less than 30 ppm sulfur on an annual average basis.
These credits could be used by refiners and importers which produced or imported gasoline
containing more than 30 ppm sulfur on an annual average basis. Credits could be "banked" for
use in future years, and expired if not used within five years after the year of generation.
The Tier 3 gasoline sulfur program further reduced gasoline sulfur so that all gasoline
produced or imported in the United States will meet an annual average sulfur standard of 10
ppm. The Tier 3 standards began on January 1, 2017 and will be fully phased in beginning
January 1, 2020. Similar to Tier 2, the Tier 3 program also provides refiners and importers the
flexibility to generate and use credits in complying with the 10 ppm average standard.
The purpose of this report is to provide an explanation of how refiners and importers
complied with the 30 ppm annual average sulfur standard from 2011 through 2016. This period
of time covers the first six years during which the 30 ppm Tier 2 sulfur standard was fully phased
in, and also covers a five-year period (January 1, 2012 through December 31, 2016) during
which refiners and importers had an opportunity to generate "early" Tier 3 credits for compliance
with the 10 ppm average sulfur standard.
The data in this report were aggregated from compliance data reported to the EPA by
gasoline refiners and importers. Key findings include:
• The reported national average gasoline sulfur content of gasoline decreased from 31
ppm in 2011 to 24 ppm in 2016. This downward trend is expected to continue as the
Tier 3 sulfur standards began to phase in starting January 1, 2017.
• The percentage of gasoline produced or imported at facilities averaging 30 ppm sulfur
or less on an annual basis increased from 47 percent in 2011 to 81 percent in 2016.
• In 2011 and 2012, refiners and importers used more credits than they generated, due
to use of some credits that were generated before 2011. From 2013 to 2016 refiners
and importers generated more credits than they used.
1 In order to protect emission controls, a 1977 amendment to the Clean Air Act required unleaded gasoline in
commerce to be "substantially similar" to the unleaded gasoline used in certifying vehicles to emission standards. In
an interpretive rule, the Agency defined "substantially similar," including compliance with the ASTM standard
which limited sulfur in unleaded gasoline to 1000 ppm. The rule also limited an additive's sulfur contribution to
unleaded gasoline to 15 ppm.
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• Refiners have used progressively fewer credits to achieve compliance with the 30
ppm annual average sulfur standard from 2011 through 2016.
• Refiners appear to have generated a large number of "early" Tier 3 sulfur credits
between 2013 and 2016 in anticipation of complying with the 10 ppm annual average
sulfur standard beginning in 2017.
• From 2011 through 2016, compliance by refiners and importers with the 80 ppm per
gallon standard was very close to 100 percent.
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II. Background on Gasoline Sulfur Programs
A. Tier 2 Gasoline Sulfur Program
1. Overview
Beginning in 2004, refiners and importers were subject to gasoline sulfur standards
established in the "Tier 2 Motor Vehicle Emissions Standards and Gasoline Sulfur Control
Requirements" ("Tier 2 rule"). The EPA finalized the Tier 2 rule on February 10, 2000,
including gasoline sulfur requirements promulgated in 40 CFR Part 80, Subpart H. 2-3 The
purpose of these gasoline sulfur requirements was to reduce the sulfur concentration of all
gasoline sold in the United States from approximately 300 ppm to an average of 30 ppm, in order
to enable emissions control equipment on new vehicles to significantly reduce emissions of
pollutants, such as nitrogen oxides and volatile organic compounds, as well as to provide public
health and welfare benefits. The Tier 2 gasoline sulfur regulations achieved this reduction by
establishing a series of annual sulfur standards that gradually decreased allowable sulfur
concentrations so that by 2011, all refiners and importers had to meet an annual average sulfur
standard of 30 ppm, and a per-gallon sulfur standard of 80 ppm.4
Gasoline refiners and importers could meet the annual average sulfur standard by either
of two ways:
1) Producing or importing gasoline with an annual average sulfur content less than or
equal to the 30 ppm average standard; or,
2) Producing or importing gasoline with an annual average sulfur content greater than
the 30 ppm average standard, and using credits to meet the standard (more discussion
below on credits).
The 80 ppm per-gallon sulfur standard had to be met directly; credits could not be used to
meet the 80 ppm per-gallon standard.
2. Averaging, Banking and Trading (ABI) Program for Gasoline Sulfur Credits
Refiners and importers could generate gasoline sulfur credits (in ppm-gallons) on a
refinery-specific or Petroleum Administration for Defense District (PADD) basis, respectively.
Beginning in 2004, most refiners and all importers could generate credits for each year by
producing gasoline with an annual average sulfur content less than 30 ppm, according to the
formula "(30 - annual average sulfur) X total annual gasoline volume".5 Beginning in 2011, all
refiners and importers could generate credits using this formula. Credits could be used for
2 See 65 FR 6697, February 10, 2000.
3 More information on the Tier 2 and Tier 3 gasoline sulfur programs can be found at the EPA's website at
https://www.epa.gov/ga.soliiie-sta.iida.rds/gasoliiie-siilfiir.
4 All gasoline downstream of refineries and import facilities had to meet a per-gallon standard of 95 ppm sulfur.
5 From 2004 through 2010, some refineries had annual average standards that were greater than 30 ppm, and could
generate credits by producing gasoline with an annual average sulfur content less than their specific standard, see 40
CFR 80.310.
4
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compliance up to five years after the year that they were generated, and could be transferred no
more than twice between refiners and/or importers. Credits expired if unused after five years.
3. California Gasoline
Gasoline produced or imported for use in California ("California gasoline") was exempt
from all of the requirements in 40 CFR Part 80, Subpart H, provided it met certain requirements
specified in 40 CFR 80.375. As a result, no California gasoline was reported to the EPA under
the Tier 2 rule, and all volume and property data shown in this report does not include California
gasoline.6
4. Oxygenate Blending and Accounting
Similar to Subparts D (Reformulated Gasoline) and E (antidumping) of 40 CFR Part 80,
Subpart H also allowed refiners and importers to include downstream-blended oxygenate
(typically ethanol) in their gasoline sulfur compliance calculations if they complied with the
requirements in 40 CFR 80.69(a) or 80.101(d)(4).7 Refiners and importers generally met the
oversight program requirement in 40 CFR 80.69(a)(l 1) for downstream blending of oxygenate in
reformulated blendstock for oxygenate blending ("RBOB"), by participating in the RFG Survey
Association, and used the sulfur test result from their hand blend of RBOB and oxygenate per 40
CFR 80.69(a)(2) in their gasoline sulfur compliance calculations.8 For downstream blending of
oxygenate in CG or conventional blendstock for oxygenate blending ("CBOB"), refiners and
importers met the oversight program requirement in 40 CFR 80.101 (d)(4)(ii) on an individual
basis. Refiners and importers that met the oversight program requirement in 40 CFR
80.101(d)(4)(ii) could assume that oxygenate blended into their conventional gasoline or CBOB
contained no sulfur.9 Oxygenate blenders (i.e., downstream parties that simply blended
oxygenate into RBOB, CBOB, or CG) were only required to ensure that any ethanol they
blended into RBOB, CBOB or CG contained less than 30 ppm sulfur. Tables 1 through 3
provide data on total volumes of ethanol in gasoline (not including California gasoline) from
2011 through 2016, based on reports submitted by refiners and importers to EPA.10
6 California gasoline is also excluded from reports submitted by refiners and importers under 40 CFR Part 80,
Subparts D (RFG) and E (antidumping), per 40 CFR 80.81.
7 Refiners and importers benefit from including ethanol in their gasoline sulfur compliance calculations because of
ethanol's low sulfur content. The provisions in 40 CFR 80.69(a) and 80.101(d)(4) required refiners and importers to
verify their included volumes of downstream-blended oxygenate through a combination of product transfer
documents, contractual arrangements with oxygenate blenders, and periodic sampling and testing of oxygenate-
blended gasoline.
8 RBOB is a gasoline blendstock that becomes RFG upon blending with a specified type of oxygenate, typically
ethanol. In order to comply with the RFG standards in Subpart D, refiners and importers of RBOB prepare a "hand
blend" sample of RFG by blending a batch sample of RBOB with a refiner-specified percentage of ethanol, and test
the RBOB/ethanol blend for several properties, including sulfur, per 40 CFR 80.69(a)(2). The refiner-specified
percentage of ethanol is transmitted on the product transfer document for the RBOB to a downstream oxygenate
blender, who blends the RBOB batch with the specified percentage of ethanol.
9 CBOB is a blendstock that becomes conventional gasoline upon blending with a specific type of oxygenate.
10 Gasoline volumes and ethanol concentrations were taken from the RFG030X reports. Volumes of ethanol in RFG,
CG, and (RFG+CG) were calculated by multiplying the corresponding gasoline volumes and ethanol concentrations.
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Table 1: Annual RFG Volumes, Ethanol Concentrations, and Ethanol Volume in RFG
Year
Total RFG,
million gallons
Ethanol in RFG,
volume percent
Ethanol in RFG,
million gallons
2011
30,974.0
9.63
2,982.4
2012
30,495.1
9.59
2,925.3
2013
30,758.4
9.61
2,956.1
2014
31,315.9
9.63
3,014.8
2015
32,194.2
9.64
3,104.6
2016
33,321.5
9.66
3,218.5
Table 2: Annual CG Volumes, Ethanol Concentrations, and Ethanol Volume in CG
Year
Total CG,
million gallons
Ethanol in CG,
volume percent
Ethanol in CG,
million gallons
2011
84,305.6
2.08
1,751.8
2012
84,512.6
2.08
1,757.9
2013
84,354.7
2.06
1,738.3
2014
85,140.2
2.30
1,956.4
2015
87,169.6
2.40
2,096.3
2016
89,283.4
2.39
2,130.6
Table 3: Annual (RFG+CG) Volumes, Ethanol Concentrations, and Ethanol Volume in
(RFG+CG)
Year
Total (RFG+CG),
million gallons
Ethanol in (RFG+CG),
volume percent
Ethanol in (RFG+CG),
million gallons
2011
115,279.6
4.11
4,734.2
2012
115,007.7
4.07
4,683.2
2013
115,113.1
4.08
4,694.3
2014
116,456.1
4.27
4,971.2
2015
119,363.8
4.36
5,200.9
2016
122,604.9
4.36
5,349.1
B Tier 3 Gasoline Sulfur Program
The EPA finalized the "Tier 3 Motor Vehicle Emission and Fuel Standards" rulemaking
("Tier 3 rule") on April 28, 2014, including gasoline sulfur requirements promulgated in 40 CFR
Part 80, Subpart 0.11 The purpose of the Tier 3 rule was to further reduce the sulfur
concentration of all gasoline sold in the United States from an average of 30 ppm to an average
of 10 ppm. This enabled emissions control equipment on new vehicles to further reduce
11 Additional information on the Tier 3 rule can be found on the EPA website at https://www.epa.gov/regixlatioiis-
emissioiis-vehicles-aiid-eiigiiies/fiml-nile-coiitrol-air-DoHntioii-motor-vehicles-tier-3.
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emissions of pollutants, such as nitrogen oxides and volatile organic compounds, providing
significant benefits to public health and welfare. The Tier 3 gasoline sulfur regulations required
most refiners and all importers to meet an annual average standard of 10 ppm sulfur beginning
January 1, 2017.12 Consequently, Tier 3 data was not yet available for analysis during the
development of this report. However, this report does include data that captures actions by
refiners and importers leading up to the start of the Tier 3 program, in particular the ABT
provisions discussed below.
The Tier 3 rule has many similarities to the Tier 2 rule. The 10 ppm average standard in
the Tier 3 rule applies to each refinery's annual gasoline production, and each importer's annual
gasoline importation on a PADD basis.13 Refiners and importers continue to be subject to a per-
gallon sulfur standard of 80 ppm, and all gasoline continues to be subject to a downstream per-
gallon standard of 95 ppm. The Tier 3 gasoline sulfur regulations also include an ABT program
for gasoline sulfur credits that allows refiners and importers to generate credits (in ppm-gallons)
and use them to comply with the 10 ppm average standard. Beginning January 1, 2017, sulfur
credits are generated by producing or importing gasoline containing an annual average sulfur of
less than 10 ppm. These credits have a life of five years after the year of generation (i.e., 2017
credits expire if not used after the 2022 compliance period), and may be banked by the refiner
that generated them, or sold to another refiner for use in complying with the 10 ppm standard.
Additionally, the Tier 3 rule allows refiners and importers to use Tier 2 gasoline sulfur
credits generated from 2012 through 2016 for compliance with the 10 ppm average sulfur
standard from 2017 through 2019.14 From 2012 through 2016, refiners and importers could
generate gasoline sulfur credits for use in meeting either the 30 ppm average sulfur standard
through 2016, or for use in meeting the 10 ppm average sulfur standard from 2017 through 2019.
Individual credits could be used to meet either the 30 ppm or 10 ppm average standard, but the
same credits could not be used to meet both standards (see example in the Appendix of credit
generation and use under the Tier 2 and Tier 3 programs). These credits have a maximum life of
five years after the year of generation (i.e., 2012 credits expire if not used after the 2017
compliance period), and all expire if not used by the 2019 compliance period.
111. Gasoline Sulfur Compliance Analysis from 2011 through 2016
A. Summary
This report presents analyses of data, primarily from the gasoline sulfur reports, from
2011 through 2016. The data is reported to the EPA on various reporting forms by refiners and
importers on an annual basis for all gasoline they produce for use in the U.S. outside of
California. Thus, the report provides a comprehensive summary of gasoline sulfur
12 Small refiners and small volume refineries could continue complying with the 30 ppm sulfur standard through
December 31, 2019, see 40 CFR 80.1603(a)(l)(iii)(B).
13 Additional information on PADDs can be found on EIA's website at
https://www.eia. gov/todavinenergv/detaiLphp?id=4890.
15 The GSF0200 form has been superseded by EPA's Moderated Transaction System (EMTS), which allows refiners
and importers to report credit transactions online.
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concentrations, and gasoline sulfur credit generation and use for all gasoline reported to EPA
from 2011 through 2016.
Under the pre-existing RFG and antidumping programs, refiners and importers were
required to report several properties, including sulfur, for each batch of gasoline on the EPA
batch report form RFG0300. In addition to the RFG and antidumping gasoline batch report form,
the EPA created four new reporting forms for refiners and importers to report data for the Tier 2
program. These five forms are listed below, along with a description of each form's purpose
under Tier 2.
1) Gasoline Sulfur Credit Banking and Allotment Generation Report (GSF0100)
• Refiners and importers report total annual gasoline sulfur credit generation, use,
transfers, and expiration by facility (credit units are ppm-gallons)
All information is reported separately by credit creation year
2) Gasoline Sulfur Credit Transfer/Conversion Report (GSF0200) 15
• Refiners and importers report each transfer of credits to or from another party
• Reported information includes credit quantity, transfer date, company and facility
IDs for the buyer and seller, credit type, and credit creation year
3) Gasoline Sulfur Facility Summary Report (GSF0300)16
• Refiners and importers report their total annual gasoline production, average
sulfur before using credits, and average sulfur after using credits (if applicable) by
facility
• Demonstrates compliance with the 30 ppm annual average sulfur standard
4) Reformulated Gasoline and Anti-Dumping Batch Report (RFG0300) 17
• Refiners and importers report all complex model properties (including sulfur) for
each batch of gasoline
• Demonstrates compliance with the 80 ppm per-gallon sulfur standard, except for
CG batches that are composited
5) Gasoline Sulfur and Benzene Batch Report (GSF0401)
Supplementary report used by refineries or importers which report properties for
composited batches of CBOB and/or CG on the RFG0300 report18
• Refiners and importers must report the volume and sulfur content of each sub-
batch of CBOB and/or CG used to form the composite batch, in order to
demonstrate compliance with the 80 ppm per-gallon standard for each sub-batch
The analysis contained in this report begins with 2011, the first year that the EPA has
complete sets of the primary reports (GSF030X reports and GSF0100 reports) fully uploaded to
15 The GSF0200 form has been superseded by EPA's Moderated Transaction System (EMTS), which allows refiners
and importers to report credit transactions online.
16 The GSF0300 reporting form was revised and was subsequently re-issued as the GSF0301 reporting form. In this
report, both forms will be collectively referred to as the GSF030X reports.
17 The RFG0300 reporting form was subsequently revised and re-issued 3 times as the RFG0301, RFG0302 and
RFG0303 reporting forms, respectively. In this report, these 4 reporting forms will be collectively referred to as the
RFG030X reports.
18 40 CFR Part 80, Subpart E (antidumping) allows refiners and importers to test a single composite sample prepared
from all of the gasoline they produce or import for a period of up to one month, per 40 CFR 80.10 l(i)(2).
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its electronic database in a format suitable for analysis.19 This was also the first year in which all
refiners and importers had to comply with the 30 ppm annual average sulfur standard, since all
provisions for delayed Tier 2 compliance by small refiners and hardship refiners ended
December 31, 2010. The industry compliance trends reported here reflect, to a large extent, the
ABT provisions which are a part of both the Tier 2 and Tier 3 gasoline sulfur regulations.
Data in this report does not include any volume or property data for California gasoline,
and includes only a portion of the total amount of ethanol that is actually blended into CG and
CBOB at locations downstream of refineries and import facilities. Gasoline produced or
imported for use in California is not reported to the EPA, under certain reporting exemptions in
the EPA regulations. Also, refiners and importers calculate their total gasoline volume and
average sulfur using only a portion of the total ethanol that is actually blended at downstream
locations into their CG and CBOB, due to certain compliance requirements in the EPA
regulations.20 Lastly, butane and pentane that were blended into gasoline under the EPA's
simplified compliance requirements are included in the GSF030X report data, but not in the
GSF0100 report data, since butane blenders and pentane blenders may not generate gasoline
sulfur credits.
In this report, the term "facilities" is generally used to describe all facilities that produce
or import gasoline. These include refineries that produce gasoline by refining crude oil, and other
facilities ("blender-refineries") that produce gasoline simply by combining gasoline blendstocks
obtained from other refineries. 21 In the analysis section below, the number of crude oil refineries
in the facility counts varies from 107 to 112.22 The number of blender-refineries in the EPA's
facility count varies from 204 to 308.23 Lastly, the number of import facilities varies from 26 to
42, where all of an importer's import locations in one PADD are typically reported as a single
facility (e.g., an importer that imported gasoline into five different locations in PADD 1 would
report the total volume of imported gasoline under a single "PADD 1" import facility).
B. Analysis
1. Compliance with 30 ppm Annual Average Sulfur Standard
Gasoline sulfur concentrations trended down from 2011 through 2016, as shown in
Figure 1. Annual average sulfur exceeded 30 ppm in 2011 and 2012, as refiners and importers
19 The EPA has many GSF030X and GSF0100 reports that were submitted prior to 2011 in a variety of formats,
including paper, diskettes and compact disks, which must be manually loaded into its database. The EPA is in the
process of loading these reports from 2010 and earlier into its database, for use in additional analysis.
20 See Tables 1 through 3.
21 The EPA defines a refinery as "any facility, including but not limited to, a plant, tanker truck, or vessel where
gasoline or diesel fuel is produced, including any facility at which blendstocks are combined to produce gasoline or
diesel fuel, or at which blendstock is added to gasoline or diesel fuel". See 40 CFR 80.2(h).
22 The number of crude oil refineries was determined by comparing the list of reporting facilities with the annual
lists of refineries with crude distillation units, prepared by the U.S. Energy Information Administration as part of its
annual refinery capacity reports.
23 The number of blender-refineries was calculated by subtracting the number of crude oil refineries and import
facilities from the total number of reporting facilities. Blender-refineries include a small number (between 5 and 8)
of transmix processing facilities which distill transmix (i.e., pipeline interfaces of gasoline and distillate fuel) into
gasoline and distillate, and sometimes add other blendstocks to the gasoline distilled from the transmix.
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used credits generated in previous years to comply with the 30 ppm standard.24 Annual average
sulfur dropped below 30 ppm in 2012, and continued to decrease through 2016, possibly due to
refiners and importers generating and banking credits for use in complying with Tier 3's 10 ppm
annual average sulfur standard beginning in 2017.
Figure 1: Total Gasoline Volume and Average Sulfur from GSF030X Reports
35.00 125.0
30.00
25.00
20.00
15.00
2011
2012
2013
2014
2015
2016
^HGSF030X Volume
114.8
115.0
114.9
116.1
119.5
122.2
GSF030X Sulfur
31.43
30.75
28.79
26.61
24.51
23.85
120.0
115.0
110.0
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Figure 2: Facilities Producing Gasoline with Annual Average Sulfur Above/Below 30 ppm (pre-
credits)
450
2011 2012 2013 2014 2015 2016
¦ Facilities above 30 ppm
85
95
90
84
71
51
¦ Facilities at or below 30 ppm
257
297
331
327
337
371
Figure 3 shows the volume of gasoline produced by facilities that averaged over 30 ppm
sulfur on an annual basis, and the volume of gasoline produced by facilities that averaged 30
ppm sulfur or less on an annual average basis, from 2011 through 2016. From 2011 through
2016, the volume of gasoline produced at facilities that averaged 30 ppm sulfur or less increased
by approximately 45.1 billion gallons, and the volume of gasoline produced at facilities that
averaged over 30 ppm sulfur decreased by approximately 37.6 billion gallons.
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Figure 3: Volume of Gasoline Produced at Facilities with Annual Average Sulfur Above/Below
30 ppm (pre-credits)
140.0
2011 2012 2013 2014 2015 2016
¦ Volume above 30 ppm
61.1
57.1
47.3
47.8
37.5
23.5
¦ Volume at or below 30 ppm
53.5
57.8
67.6
68.3
82.0
98.6
Figure 4 shows the average sulfur before and after use of gasoline sulfur credits from
2011 through 2016. The blue bars (pre-credits) include all facilities averaging 30 ppm or less
(credit generators), and all facilities averaging over 30 ppm (credit users). The gray bars (post-
credits) include all facilities under 30 ppm (credit generators), and all facilities equal to 30 ppm
(credit users, post-credits). The difference between the blue and gray bars decreased from
approximately 5.5 ppm in 2011 to approximately 2.0 ppm in 2016, indicating a decrease in the
number of credits used for compliance with the 30 ppm average sulfur standard.25
25 The differences in sulfur before and after using credits also include the effect of refiners and importers using
credits that they had generated and banked prior to 2011.
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Figure 4: Average Annual Sulfur Content Before and After Using Credits
1 Hit nil n ii
2011
2012
2013
2014
2015
2016
¦ Sulfur (pre-credits)
31.43
30.75
28.79
26.61
24.51
23.85
¦ Sulfur (post-credits)
25.93
25.40
24.92
23.25
21.52
21.91
2. Credit Generation and Use
Figure 5 shows total annual credit generation, use, and expiration from 2011 through
2016. Credit generation increased by approximately 512 billion credits from 2011 through 2016,
and credit use decreased by approximately 395 billion credits from 2011 through 2016, as more
facilities produced gasoline containing 30 ppm sulfur or less. The increases in credit generation
in 2014, 2015, and 2016 are likely due to refiners and importers choosing to generate "early"
Tier 3 credits for use in 2017 through 2019, following publication of the final Tier 3 rule on
April 28, 2014. The number of expired credits decreased from 131.6 billion in 2011 to 3.0 billion
in 2015, indicating improving overall efficiency in management of credit inventories by refiners
and importers.26 Expired credits increased to 69.6 billion in 2016, as more refiners and importers
further reduced gasoline sulfur in preparation for Tier 3 compliance, and thus needed to use
fewer credits for compliance with Tier 2's 30 ppm average sulfur standard. All credits that
expired in 2016 were generated in 2011, and expired at the end of their five-year life.
26 Credits may be used up to five years following the year in which they were generated, and expire if unused after
five years. There are some cases where refiners and importers have let credits expire, resulting in over-compliance
with the 30 ppm average sulfur standard.
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Figure 5: Credit Generation, Use and Expiration
£
O
T3
CD
1000.0
900.0
800.0
700.0
600.0
500.0
400.0
300.0
200.0
100.0
u.u
2011
2012
2013
2014
2015
2016
¦ Credits generated
464.8
521.8
582.0
773.4
999.9
976.6
¦ Credits used
632.0
614.8
445.2
389.9
358.2
236.7
¦ Credits expired
131.6
51.7
112.4
31.1
3.0
69.6
Figure 6 and Table 4 show credit use by year of credit generation. Figure 6 and Table 4
indicate how refiners and importers manage their credit inventories.27 They show that refiners
and importers typically try to use credits as late as possible by banking them until the last year in
which they can be used, and using them in that last year. For example, most credits used in 2016
were generated in 2011, and most credits used in 2015 were generated in 2010. Almost all
credits used in 2011 were generated prior to 2011.
27 The EPA periodically posts updated data on current inventories of gasoline sulfur credits at
https://www.epa.gov/fuels-registration-reporting-and-compliance-help/fuels-averaging-banking-and-trading-abt-
credit-data. As of February 7, 2018, refiners and importers held a total of 3,717 billion gasoline sulfur credits.
14
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Figure 6: Credit Use (colors show year of credit generation)
700.0
600.0
500.0
400.0
¦a
(D
tn
^ 300.0
¦a
QJ
200.0
100.0
0.0
£
O
2011
2012
2013 2014
Compliance Year
2015
2016
credit
vintage
¦ 2016
¦ 2015
¦ 2014
¦ 2013
¦ 2012
¦ 2011
¦ 2010
I 2009
¦ 2008
¦ 2007
¦ 2006
C
o
!-h
(L)
c
(L)
O
T3
(L)
!-h
u
<+H
o
!-h
S3
(L)
Table 4: Credit Use (in billions), by Year of Credit Generation
Year of Credit Use
2011
2012
2013
2014
2015
2016
2006
160.8
0.0
0.0
0.0
0.0
0.0
2007
155.6
260.1
0.0
0.0
0.0
0.0
2008
104.2
163.9
241.1
0.0
0.0
0.0
2009
141.5
52.1
29.5
293.9
0.0
0.0
2010
55.0
84.8
73.3
66.8
294.3
0.0
2011
14.9
43.4
50.4
13.4
46.0
224.1
2012
0.0
10.5
40.4
3.1
8.2
9.9
2013
0.0
0.0
10.6
10.5
4.4
1.0
2014
0.0
0.0
0.0
2.2
2.6
0.6
2015
0.0
0.0
0.0
0.0
2.6
0.9
2016
0.0
0.0
0.0
0.0
0.0
0.3
Total
632.0
614.8
445.2
389.9
358.2
236.7
Credits can be traded only twice before they are used, to enable reasonable enforcement
oversight of the program. Figure 7 and Table 5 present credit use data according to the number
of times credits were transferred between refiners and/or importers. CCO credits are credits that
were never transferred by the refiner or importer that generated them, CC1 credits are credits that
were transferred once, and CC2 credits are credits that were transferred twice. Figure 7 and
15
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Table 5 indicate that a significant percentage of credits used by refiners and importers each year
for compliance are obtained from other refiners and/or importers. 28
Figure 7: Credit Use (colors show numbers of times credits were transferred)
700.0
¦ ¦
lllii
2011 2012 2013 2014 2015
Compliance Year
Table 5: Credit Use (in billions), by Number of Times Credits Transferred
Year of Credit
Use
Type of Credit Used
Total Use
CCO
CC1
CC2
2011
161.8
460.8
9.5
632.0
2012
177.4
378.2
59.2
614.8
2013
197.8
201.8
45.5
445.2
2014
85.2
255.6
49.2
389.9
2015
88.1
196.4
73.7
358.2
2016
104.2
116.6
16.0
236.7
3. Combined Annual Data from GSF030X and GSF0100 Reports
Tables 6 through 11 show the combined data from the GSF030X reports and the
GSF0100 reports for each year from 2011 through 2016, summarizing the data for credit
generators, credit users, and total combined credit generators and users. Each table quantifies the
relationship between the number of reporting facilities, gasoline volume/sulfur, and quantity of
credits generated/used for each year.
28 The limit on credit transfers only applied to transfers between companies (intercompany transfers). Companies
that owned more than one refinery and/or more than one import facility could transfer credits between their
refineries and import facilities (intracompany transfers) without limit. The EPA is aware of a few instances where
refiners accidentally assigned a credit transfer code of CC1 (instead of CCO) to intracompany credit transfers, so the
number of intercompany-transferred credits is expected to be slightly less than indicated in Figure 7 and Table 5.
I
2016
credit
transfer
code
¦ CC2
¦ CC1
¦ CCO
16
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For credit generators, each table shows the number of facilities that generated credits (or
had an average sulfur of 30 ppm), total gasoline production, average sulfur, and total credits
generated. For credit users, each table shows the number of facilities that used credits, total
gasoline production, average sulfur before use of credits, total credits used, and average sulfur
after credit use. For some years, average sulfur after credit use is slightly lower than 30 ppm due
to over-compliance by some facilities which used more credits than necessary to meet the 30
ppm average sulfur standard.
Table 6: 2011 Combined Data from GSF0301 and GSF0100 Reports
Report
GSF0301
GSF0301
GSF0301
GSF0100
GSF0100
GSF0301
Number of
facilities
Gasoline
produced,
gallons
Average
sulfur,
ppm
Total credits
generated,
ppm-gallons
Total credits used,
ppm-gallons
Average sulfur
after credit use,
ppm
Sulfur credit generators
257
53,474,891,296
21.27
464,872,004,037
21.27
Sulfur credit users
85
61,143,086,933
40.32
631,997,949,988
29.99
Total
342
114,617,978,229
31.43
464,872,004,037
631,997,949,988
25.93
Table 7: 2012 Combined Data from GSF0301 and GSF0100 Reports
Report
GSF0301
GSF0301
GSF0301
GSF0100
GSF0100
GSF0301
Number of
facilities
Gasoline
produced,
gallons
Average
sulfur,
ppm
Total credits
generated,
ppm-gallons
Total credits used,
pm-gallons
Average sulfur
after credit use,
ppm
Sulfur credit generators
297
57,840,914,920
20.85
521,752,433,180
20.85
Sulfur credit users
95
57,139,164,526
40.76
614,752,724,705
30.00
Total
392
114,980,079,446
30.75
521,752,433,180
614,752,724,705
25.40
Table 8: 2013 Combined Data from GSF0301 and GSF0100 Reports
Report
GSF0301
GSF0301
GSF0301
GSF0100
GSF0100
GSF0301
Number of
facilities
Gasoline
produced,
gallons
Average
sulfur,
ppm
Total credits
generated,
ppm-gallons
Total credits used,
ppm-gallons
Average sulfur
after credit use,
ppm
Sulfur credit generators
331
67,617,998,125
21.36
581,985,499,587
21.36
Sulfur credit users
90
47,297,601,663
39.41
445,166,177,796
29.99
Total
421
114,915,599,788
28.79
581,985,499,587
445,166,177,796
24.92
17
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Table 9: 2014 Combined Data from GSF0301 and GSF0100 Reports
Report
GSF0301
GSF0301
GSF0301
GSF0100
GSFO100
GSF0301
Number of
facilities
Gasoline
produced,
gallons
Average
sulfur,
ppm
Total credits
generated,
ppm-gallons
Total credits used,
ppm-gallons
Average sulfur
after credit use,
ppm
Sulfur credit generators
327
68,296,832,085
18.54
773,369,798,536
18.53
Sulfur credit users
84
47,841,073,575
38.13
389,948,545,636
29.99
Total
411
116,137,905,660
26.61
773,369,798,536
389,948,545,636
23.25
Table 10: 2015 Combined Data from GSF0301 and GSF0100 Reports
Report
GSF0301
GSF0301
GSF0301
GSF0100
GSFO100
GSF0301
Number of
facilities
Gasoline
produced,
gallons
Average
sulfur,
ppm
Total credits
generated,
ppm-gallons
Total credits used,
ppm-gallons
Average sulfur
after credit use,
ppm
Sulfur credit generators
337
81,954,525,179
17.66
999,863,511,293
17.66
Sulfur credit users
71
37,524,437,331
39.48
358,167,066,402
29.95
Total
408
119,478,962,510
24.51
999,863,511,293
358,167,066,402
21.52
Table 11: 2016 Combined Data from GSF0301 and GSFO100 Reports
Report
GSF0301
GSF0301
GSF0301
GSF0100
GSFO100
GSF0301
Number of
facilities
Gasoline
produced,
gallons
Average
sulfur,
ppm
Total credits
generated,
ppm-gallons
Total credits used,
ppm-gallons
Average sulfur
after credit use,
ppm
Sulfur credit generators
371
98,634,876,413
19.99
976,572,320,993
19.99
Sulfur credit users
51
23,546,921,946
39.99
236,741,413,865
29.97
Total
422
122,181,798,359
23.85
976,572,320,993
236,741,413,865
21.91
4. Compliance with 80 pprn Per-Gallon Standard
Figure 8 illustrates how sulfur in individual batches of gasoline has changed from 2011 to
2016. Based on batch data submitted in the RFG030X reports, Figure 8 shows the percentage of
total gasoline for 2011 (orange line) and 2016 (blue line), as a function of sulfur content (in 1
ppm increments). As expected, the 2016 distribution curve is shifted to the left compared to the
2011 curve, due to sulfur reductions by refiners and importers from 2011 to 2016.
Figure 8 also illustrates compliance by refiners and importers with the 80 ppm per-gallon
sulfur standard. The right side of the curve indicates that a small percentage (0.014 percent) of
total gasoline exceeded the 80 ppm per-gallon standard in 2011, and an even smaller percentage
(0.004 percent) exceeded 80 ppm in 2016. From 2011 through 2016, a total of only 81 batches
out of over 300,000 batches were reported containing more than 80 ppm sulfur. Thirty-four of
these batches were reported with a sulfur concentration of 970 ppm, which is the default sulfur
concentration specified in 40 CFR 80.80 that is used when a refiner or importer doesn't have a
18
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sulfur test result for a batch of gasoline. Another 34 of these batches contained less than 95 ppm
sulfur, which is the per-gallon sulfur standard downstream of refineries and import facilities. The
remaining 13 batches contained between 95 and 175 ppm sulfur.
The total volume of these 81 batches was 27 million gallons, which represented
approximately 0.004 percent of the total reported volume of 703 billion gallons from 2011
through 2016. Because the volume of these 81 batches was so small relative to the total volume
of gasoline consumed, and individual batches of gasoline are combined and blended in pipelines,
terminals and retail stations, gasoline use in vehicles is likely to still have been below the 95 ppm
downstream per-gallon standard.
Figure 8: Annual Distribution of Gasoline Sulfur Content in 2011 and 2016 (from RFG030X
Reports)
Annual Distributions of Gasoline Sulfur Content 2011-2016 (RFG030X)
3.00%
2.50%
1.00%
0.50%
2011
2016
— — — 80ppm
0.00%
0
40 50 60
Sulfur Content (ppm)
19
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IV. Conclusion
The gasoline sulfur analysis presented in this report shows a high level of compliance
with refinery and importer annual average and per-gallon sulfur standards under the Tier 2
gasoline sulfur program from 2011 through 2016, and a gradual decline of average sulfur levels
in anticipation of compliance with the 10 ppm annual average standard beginning in 2017. The
gasoline sulfur credit program analysis further illustrates the beneficial flexibility it has provided
the industry in lowering gasoline sulfur levels over time.
Compliance data reported to the EPA by refiners confirms several key findings:
• Refiners and importers have taken full advantage of the flexibilities of the ABT
program to reduce sulfur levels at a rate and time that is most conducive to their
business plans.
• The national average reported sulfur content of gasoline, before credits, decreased 24
percent from 31.43 ppm in 2011 to 23.85 ppm in 2016. This downward trend should
continue as the Tier 3 sulfur standards phase in beginning in 2017.
• The percentage of gasoline produced or imported at facilities averaging 30 ppm sulfur
or less on an annual basis increased from 46.7 percent in 2011 to 80.7 percent in
2016.
• Refiners optimized sulfur credit use to avoid the expiration of unused credits in 2015
and have needed progressively fewer credits to achieve compliance with the 30 ppm
annual average sulfur standard from 2011 through 2016.
• Refiners appear to have generated a large number of "early" Tier 3 sulfur credits
between 2013 and 2016 in anticipation of complying with the 10 ppm annual average
sulfur standard beginning in 2017.
This report, along with other fuels trends analyses and sulfur compliance credit data
posted on the agency's website, provide comprehensive information about the EPA's national
gasoline sulfur control programs and their effects in reducing gasoline sulfur levels in the U.S.29
The EPA will continue to make gasoline sulfur data available to maximize the transparent
implementation of its regulatory programs.
29 See https://www.eDa.gov/fuels-regsteitioii-reTOrtiiig-airicompHaflce-hBlp/public-data-gasoliiie-programs.
20
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V. Appendix
Life of a Sulfur ABT Credit
Life of a Sulfur Credit
o
r\i
-
C
o
"C
o
100,000 gallons of
gasoline produced at
refinery or imported in
calendar year 2014.
Each 2014 batch of gasoline is tested for sulfur content per 80.1630
The 2014 batch results are used to calculate the annual average sulfur
content per 80.1603(c). In this example, the result is 3.41 ppm for 2014
2014 Credit Generation Calculation (to be reported by March 31, 2015)
(10 ppm less 3.41 ppm) * 100,000 gallons = 659,000 credits (ppm-gal)
659,000 Sulfur Credits Generated in CY 2014
Credits available for 2015 - 2019 compliance years (5 years)
Credits may be traded twice in their 5-year lifetime
Producer/Importer
GENERATES 659,000
Sulfur Credits
-S-
Trade 1
o
r\i
Credit Generator
RETIRES 250,000
Credits to meet
2015 compliance
obligation
J-
Credit Generator
TRADES 300,000
Credits to
Importer A
QadeP^
o
r\i
Credit Generator
TRADES 100,000
Credits to
Refiner X
OadeO
o
CM
X
Importer A TRADES
200,000 Credits to
Refiner Y
(these credits cannot
be traded again)
Importer A
RETIRES 100,000
Credits to meet
2017 compliance
obligation
o
r\i
Refiner Y RETIRES
200,000 Credits
to meet 2018
compliance
obligation
o
r\i
Refiner X RETIRES
100,000 Credits
to meet 2019
compliance
obligation
Credit Generator did
not use or trade 9,000
credits; these will
EXPIRE no later than
March 31, 2020
21
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