(a) Compliance with the sulfur average standard. For each of their facilities, a gasoline manufacturer must demonstrate compliance with the sulfur average standard in § 1090.205(a) by using the equations in paragraphs (a)(1) and (2) of this section.

(1) Compliance sulfur value calculation. (i) The compliance sulfur value is determined as follows:

CSVy = Stot,y + Ds,(y−1) + DS_Oxy_Total − CS Where: CSVy = Compliance sulfur value for compliance period y, in ppm-gallons. Stot,y = The total amount of sulfur produced in compliance period y, per paragraph (a)(1)(ii) of this section, in ppm-gallons. Ds,(y−1) = Sulfur deficit from the previous compliance period, per § 1090.715(a)(1), in ppm-gallons. DS_Oxy_Total = The total sulfur deficit from BOB recertification, per § 1090.740(b)(2), in ppm-gallons. CS = Sulfur credits used by the gasoline manufacturer, per § 1090.720, in ppm-gallons.

(ii) The total amount of sulfur produced is determined as follows:

Where: Vi = The volume of gasoline produced or imported in batch i, in gallons. Si = The sulfur content of batch i, in ppm. n = The number of batches of gasoline produced or imported during the compliance period. i = Individual batch of gasoline produced or imported during the compliance period.

If the calculation of Stot,y results in a negative number, replace it with zero.

(2) Sulfur compliance calculation. (i) Compliance with the sulfur average standard in § 1090.205(a) is achieved if the following equation is true:

(ii) Compliance with the sulfur average standard in § 1090.205(a) is not achieved if a deficit is incurred two or more consecutive years. A gasoline manufacturer incurs a deficit under § 1090.715 if the following equation is true:

(b) Compliance with the benzene average standards. For each of their facilities, a gasoline manufacturer must demonstrate compliance with the benzene average standard in § 1090.210(a) by using the equations in paragraphs (b)(1) and (2) of this section and with the maximum benzene average standard in § 1090.210(b) by using the equations in paragraphs (b)(3) and (4) of this section.

(1) Compliance benzene value calculation. (i) The compliance benzene value is determined as follows:

CBVy = Btot,y + DBz,(y−1) + DBz_Oxy_Total − CBz Where:

CBVy = Compliance benzene value for compliance period y, in benzene gallons.

Btot,y = The total amount of benzene produced in compliance period y, per paragraph (b)(1)(ii) of this section, in benzene gallons.

DBz,(y−1) = Benzene deficit from the previous compliance period, per § 1090.715(a)(2), in benzene gallons.

DBz_Oxy_Total = The total benzene deficit from BOB recertification, per § 1090.740(b)(4), in benzene gallons.

CBz = Benzene credits used by the gasoline manufacturer, per § 1090.720, in benzene gallons.

(ii) The total amount of benzene produced is determined as follows:

Vi = The volume of gasoline produced or imported in batch i, in gallons. Bi = The benzene content of batch i, in volume percent. n = The number of batches of gasoline produced or imported during the compliance period. i = Individual batch of gasoline produced or imported during the compliance period.

If the calculation of Btot,y results in a negative number, replace it with zero.

(2) Benzene average compliance calculation. (i) Compliance with the benzene average standard in § 1090.210(a) is achieved if the following equation is true:

(ii) Compliance with the benzene average standard in § 1090.210(a) is not achieved if a deficit is incurred two or more consecutive years. A gasoline manufacturer incurs a deficit under § 1090.715 if the following equation is true:

(3) Average benzene concentration calculation. The average benzene concentration is determined as follows:

Where: Ba,y = Average benzene concentration for compliance period y, in volume percent benzene.

(4) Maximum benzene average compliance calculation. Compliance with the maximum benzene average standard in § 1090.210(b) is achieved for compliance period y if the following equation is true:

Ba,y ≤ 1.30 vol%

(5) Rounding and reporting benzene values. (i) The total amount of benzene produced, as calculated in paragraph (b)(1)(ii) of this section, must be rounded to the nearest whole benzene gallon in accordance with § 1090.50.

(ii) The average benzene concentration, as calculated in paragraph (b)(3) of this section, must be rounded and reported to two decimal places in accordance with § 1090.50.

(c) Accounting for oxygenate added at a downstream location. A gasoline manufacturer that complies with the requirements in § 1090.710 may include the volume of oxygenate added at a downstream location and the effects of such blending on sulfur content and benzene content in compliance calculations under this subpart.

(d) Inclusions. A gasoline manufacturer must include the following products that they produced or imported during the compliance period in their compliance calculations:

(1) CG.

(2) RFG.

(3) BOB.

(4) Added gasoline volume resulting from the production of gasoline from PCG as follows:

(i) For PCG by subtraction under § 1090.1320(a)(1), include the PCG batch as a batch with a negative volume, positive sulfur content, and positive benzene content and include the new batch of gasoline as a batch with a positive volume, positive sulfur content, and positive benzene content in compliance calculations under this section. Any negative compliance sulfur value or compliance benzene value must be reported as zero and not as a negative result.

(ii) For PCG by addition under § 1090.1320(a)(2), include only the blendstock added to make the new batch of gasoline as a batch with a positive volume, positive sulfur content, and positive benzene content in compliance calculations under this section. Do not include any test results or volumes for the PCG or new batch of gasoline in these calculations.

(5)(i) Inclusion of a particular batch of gasoline for compliance calculations for a compliance period is based on the date the batch is produced, not shipped. For example, a batch produced on December 30, 2021, but shipped on January 2, 2022, would be included in the compliance calculations for the 2021 compliance period. The volume included in the 2021 compliance period for that batch would be the entire batch volume, even though the shipment of all or some of the batch did not occur until 2022.

(ii) For PCG by subtraction under § 1090.1320(a)(1), include PCG in the compliance period in which it was blended with blendstock. This may necessitate reporting a portion of the volume of PCG received in one compliance period as a separate PCG batch in the following compliance period.

(e) Exclusions. A gasoline manufacturer must exclude the following products from their compliance calculations:

(1) Gasoline that was not produced by the gasoline manufacturer.

(2) Blendstock, unless the blendstock is added to PCG or TGP under § 1090.1320 or § 1090.1325, respectively.

(3) PCG, except as specified in paragraph (d)(4)(i) of this section.

(4) Certified butane and certified pentane blended under § 1090.1320(b).

(5) TGP.

(6) GTAB that meets the requirements in § 1090.1615(a).

(7) Gasoline imported by truck or rail using the provisions of § 1090.1610 to meet the alternative per-gallon standards of §§ 1090.205(d) and 1090.210(c).

(8) Gasoline exempt under subpart G of this part from the average standards of subpart C of this part (e.g., California gasoline, racing fuel, etc.).

(a) Except as specified in paragraph (b) of this section, a gasoline manufacturer must comply with average standards at the individual facility level.

(b) A gasoline importer must comply with average standards at the company level, except that aggregation of all import facilities within a PADD as a single facility is required for compliance with the maximum benzene average standard in § 1090.210(b).

The requirements of this section apply to BOB for which a gasoline manufacturer accounts for the effects of the oxygenate blending that occurs downstream of the fuel manufacturing facility in the gasoline manufacturer's average standard compliance calculations under this subpart. This section also includes requirements for oxygenate blenders to ensure that oxygenate is added in accordance with the blending instructions specified by the gasoline manufacturer in order to ensure fuel quality standards are met.

(a) Provisions for gasoline manufacturers. In order to account for the effects of oxygenate blending downstream, a gasoline manufacturer must meet all the following requirements:

(1) Produce or import BOB such that the gasoline continues to meet the applicable gasoline standards in subpart C of this part after the addition of the specified type and amount of oxygenate.

(2) For each batch of BOB produced or imported, create a hand blend in accordance with § 1090.1340 and determine the properties of the hand blend using the methods specified in subpart N of this part.

(3) Participate in the NSTOP specified in § 1090.1450 or have an approved in-line blending waiver under § 1090.1315.

(4) Transfer ownership of the BOB only to an oxygenate blender that is registered with EPA under subpart I of this part or to an intermediate owner with the restriction that it only be transferred to a registered oxygenate blender.

(5) Specify on the PTD for the BOB each oxygenate type and amount (or range of amounts) for which the hand blend was certified for compliance under § 1090.1340.

(6) Participate in the NFSP under subpart O of this part.

(b) Requirements for oxygenate blenders. An oxygenate blender must add oxygenate of each type and amount (or within the range of amounts) as specified on the PTD for all BOB received, except as specified in paragraph (c)(2) of this section.

(c) Limitations. (1) Only the gasoline manufacturer that first certifies the BOB may account for the downstream addition of oxygenate under this section. On any occasion where any person downstream of the fuel manufacturing facility gate of the gasoline manufacturer that produced or imported gasoline or BOB adds oxygenate to such product, the person must not include the volume, sulfur content, and benzene content of the oxygenate in any compliance calculations for demonstrating compliance with the average standards specified in subpart C of this part or for credit generation under this subpart. All applicable per-gallon standards specified in subpart C of this part continue to apply.

(2) A person downstream of the fuel manufacturing facility gate may recertify BOB for use as gasoline without the addition of the specified type and amount of oxygenate if the provisions of § 1090.740 are met. A person who recertifies BOB for use as gasoline without the addition of the specified type and amount of oxygenate is a gasoline manufacturer and must meet all applicable requirements for a gasoline manufacturer specified in this part.

(a) A gasoline manufacturer incurs a compliance deficit if they exceed the average standard specified in subpart C of this part for a given compliance period. The deficit incurred must be determined as specified in paragraph (a)(1) of this section for sulfur and paragraph (a)(2) of this section for benzene.

(1) The sulfur deficit incurred is determined as follows:

Where: DS,y = Sulfur deficit incurred for compliance period y, in ppm-gallons. CSVy = Compliance sulfur value for compliance period y, per § 1090.700(a)(1), in ppm-gallons. Vi = The volume of gasoline produced or imported in batch i, in gallons. n = The number of batches of gasoline produced or imported during the compliance period. i = Individual batch of gasoline produced or imported during the compliance period.

(2) The benzene deficit incurred is determined as follows:

Where: DBz,y = Benzene deficit incurred for compliance period y, in benzene gallons. CBVy = Compliance benzene value for compliance period y, per § 1090.700(b)(1)(i), in ppm-gallons. Vi = The volume of gasoline produced or imported in batch i, in gallons. n = The number of batches of gasoline produced or imported during the compliance period. i = Individual batch of gasoline produced or imported during the compliance period.

(b) A gasoline manufacturer must use all sulfur or benzene credits previously generated or obtained at any of their facilities to achieve compliance with an average standard specified in subpart C of this part before carrying forward a sulfur or benzene deficit at any of their facilities.

(c) A gasoline manufacturer that incurs a deficit under this section must satisfy that deficit and demonstrate compliance with the annual average standards during the next compliance period regardless of whether the gasoline manufacturer produces gasoline during next compliance period.

(a) General credit use provisions. Only a gasoline manufacturer may generate, use, transfer, or own credits generated under this subpart, as specified in § 1090.725(a)(1). Credits may be used by a gasoline manufacturer to comply with the average standards specified in subpart C of this part. A gasoline manufacturer may also bank credits for future use, transfer credits to another facility within the company (i.e., intracompany trading), or transfer credits to another gasoline manufacturer, if all applicable requirements of this subpart are met.

(b) Credit life. Credits are valid for use for 5 years after the compliance period for which they are generated.

(c) Limitations on credit use. (1) Credits that have expired must not be used for demonstrating compliance with the average standards specified in subpart C of this part or be used to replace invalid credits under § 1090.735.

(2) A gasoline manufacturer possessing credits must use all credits prior to incurring a compliance deficit under § 1090.715.

(3) Credits must not be used to meet per-gallon standards.

(4) Credits must not be used to meet the maximum benzene average standard in § 1090.210(b).

(5) Credits may only be used if the gasoline manufacturer owns them at the time of use.

(d) Credit reporting. A gasoline manufacturer that generates, transacts, or uses credits under this subpart must report to EPA as specified in § 1090.905 using forms and procedures specified by EPA.

(e) Part 80 credit use. Valid credits generated under 40 CFR 80.1615 and 80.1290 may be used by a gasoline manufacturer to comply with the average standards in subpart C of this part, subject to the provisions of this subpart.

(a) Parties that may generate credits. (1) No person other than a gasoline manufacturer may generate credits for use towards an average standard specified in subpart C of this part.

(2) No credits may be generated for gasoline produced by any of the following activities:

(i) Transmix processing.

(ii) Transmix blending.

(iii) Oxygenate blending.

(iv) Certified butane blending.

(v) Certified pentane blending.

(vi) Importation of gasoline by rail and truck using the alternative sampling and testing requirements in § 1090.1610.

(3) No sulfur credits may be generated at a facility if that facility used sulfur credits in that same compliance period.

(4) No benzene credits may be generated at a facility if that facility used benzene credits in that same compliance period.

(b) Credit year. Credits generated under this section must be identified by the compliance period of generation. For example, credits generated on gasoline produced in 2021 must be identified as 2021 credits.

(c) Sulfur credit generation. (1) The number of sulfur credits generated is determined as follows:

Where: CS,y = Sulfur credits generated for compliance period y, in ppm-gallons. Vi = The volume of gasoline produced or imported in batch i, in gallons. n = The number of batches of gasoline produced or imported during the compliance period. i = Individual batch of gasoline produced or imported during the compliance period. CSVy = Compliance sulfur value for compliance period y, per § 1090.700(a)(1), in ppm-gallons.

(2) The value of CS,y must be positive to generate credits.

(3) Sulfur credits calculated under paragraph (c)(1) of this section must be expressed to the nearest ppm-gallon. Fractional values must be rounded in accordance with § 1090.50.

(d) Benzene credit generation. (1) The number of benzene credits generated is determined as follows:

Where: CBz,y = Benzene credits generated for compliance period y, in benzene gallons. Vi = The volume of gasoline produced or imported in batch i, in gallons. n = The number of batches of gasoline produced or imported during the compliance period. i = Individual batch of gasoline produced or imported during the compliance period. CBVy = Compliance benzene value for compliance period y, per § 1090.700(b)(1)(i), in benzene gallons.

(2) The value of CBz,y must be positive to generate credits.

(3) Benzene credits calculated under paragraph (d)(1) of this section must be expressed to the nearest benzene gallon. Fractional values must be rounded in accordance with § 1090.50.

(e) Credit generation limitation. A gasoline manufacturer may only generate credits after they have finished producing or importing gasoline for the compliance period.

(f) Credit generation reporting. A gasoline manufacturer that generates credits under this section must report to EPA all credit generation information as specified in § 1090.905 using forms and procedures specified by EPA.

A gasoline manufacturer may only transfer or obtain credits from another gasoline manufacturer to meet an average standard specified in subpart C of this part if all applicable requirements of this section are met.

(a) The credits are generated as specified in § 1090.725 and reported as specified in § 1090.905.

(b) The credits are used for compliance in accordance with the limitations on credit use specified in § 1090.720(c).

(c) Any credit transfer must take place no later than the deadline specified in § 1090.900(c) following the compliance period in which the credits are obtained.

(d) The credit has not been transferred between EPA registered companies more than twice. The first transfer by the gasoline manufacturer that generated the credit (“transferor”) must only be made to a gasoline manufacturer that intends to use the credit (“transferee”). If the transferee is unable to use the credit, it may make the second, and final, transfer only to a gasoline manufacturer that intends to use the credit. Intracompany credit transfers are unlimited.

(e) The transferor must apply any credits necessary to meet the transferor's applicable average standard before transferring credits to any other gasoline manufacturer.

(f) No person may transfer credits if the transfer would cause them to incur a deficit.

(g) Unless the transferor and transferee are the same party (i.e., intracompany transfers), the transferor must supply to the transferee records as specified in § 1090.1210(g) indicating the year(s) the credits were generated, the identity of the gasoline manufacturer that generated the credits, and the identity of the transferring party.

(h) The transferor and the transferee must report to EPA all information regarding the transaction as specified in § 1090.905 using forms and procedures specified by EPA.

For credits that have been calculated or generated improperly, or are otherwise determined to be invalid, all the following provisions apply:

(a) Invalid credits must not be used to achieve compliance with an average standard under this part, regardless of the good faith belief that the credits were validly generated.

(b) Any validly generated credits existing in the transferring gasoline manufacturer's credit balance after correcting the credit balance, and after the transferor applies credits as needed to meet the average standard at the end of the compliance period, must first be applied to correct the invalid transfers before the transferring gasoline manufacturer trades or banks the credits.

(c) The gasoline manufacturer that used the credits, and any transferor of the credits, must adjust their credit records, reports, and average standard compliance calculations as necessary to reflect the use of valid credits only. Updates to any reports must be done in accordance with subpart J of this part using forms and procedures specified by EPA.

(a)(1) A gasoline manufacturer may recertify a BOB that another gasoline manufacturer has specified blending instructions for oxygenate(s) under § 1090.710(a)(5) for a different type or amount of oxygenate, including gasoline recertification to contain no oxygenate, if the recertifying gasoline manufacturer meets all the requirements of this section.

(2) A gasoline manufacturer must comply with applicable requirements of this part and incur deficits to be included in their compliance calculations in § 1090.700 for each facility at which the gasoline manufacturer recertifies BOB.

(3) Unless otherwise required under this part, a gasoline manufacturer that recertifies 1,000,000 or less gallons of BOB under this section at a facility does not need to obtain credits to satisfy deficits incurred under this section or arrange for an auditor to conduct audits under subpart S of this part for that facility. The gasoline manufacturer must still comply with all other applicable provisions of this part (e.g., register and submit reports under subparts I and J of this part, respectively).

(4) A party that only recertifies BOB that contains a greater amount of a specified oxygenate (e.g., a party adds 15 volume percent DFE instead of 10 volume percent to an E10 BOB) or a different oxygenate at an equal or greater amount (e.g., a party adds 16 volume percent isobutanol instead of 10 volume percent to an E10 BOB) does not incur deficits under this section, does not need to submit reports under subpart J of this part, and does not need to arrange for an auditor to conduct an audit under subpart S of this part. The party must still comply with all other applicable provisions of this part (e.g., register and keep records under subparts I and M of this part, respectively).

(b) A gasoline manufacturer that recertifies a BOB under this section must calculate sulfur and benzene deficits for each batch and the total deficits for sulfur and benzene as follows:

(1) Sulfur deficits from downstream BOB recertification. Calculate the sulfur deficit from BOB recertification for each individual batch of BOB recertified as follows:

Where: DS_Oxy_Batch = Sulfur deficit resulting from recertifying the batch of BOB, in ppm-gallons. VBase = The volume of BOB in the batch being recertified, in gallons. PTDOxy = The volume fraction of oxygenate that would have been added to the BOB as specified on PTDs. ACTUALOxy = The volume fraction of oxygenate that was actually added to the BOB. If no oxygenate was added to the BOB, then ACTUALOxy = 0.

(2) Total sulfur deficit from downstream BOB recertification. Calculate the total sulfur deficit from downstream BOB recertification for each facility as follows:

Where: DS_Oxy_Total,y = The total sulfur deficit from downstream BOB recertification for compliance period y, in ppm-gallons. DS_Oxy_Batch_i = The sulfur deficit for batch i of recertified BOB, per paragraph (b)(1) of this section, in ppm-gallons. n = The number of batches of BOB recertified during compliance period y. i = Individual batch of BOB recertified during compliance period y.

(3) Benzene deficits from downstream BOB recertification. Calculate the benzene deficit from BOB recertification for each individual batch of BOB recertified as follows:

Where: DBz_Oxy_Batch = Benzene deficit resulting from recertifying the batch of BOB, in benzene gallons. VBase = The volume of BOB in the batch being recertified, in gallons. PTDOxy = The volume fraction of oxygenate that would have been added to the BOB as specified on PTDs. ACTUALOxy = The volume fraction of oxygenate that was actually added to the BOB. If no oxygenate was added to the BOB, then ACTUALOxy = 0.

(4) Total benzene deficit from downstream BOB recertification. Calculate the total benzene deficit from downstream BOB recertification for each facility as follows:

Where: DBz_Oxy_Total,y = The total benzene deficit from downstream BOB recertification for compliance period y, in benzene gallons. DBz_Oxy_Batch_i = The benzene deficit for batch i of recertified BOB, per paragraph (b)(3) of this section, in benzene gallons. n = The number of batches of BOB recertified during compliance period y. i = Individual batch of BOB recertified during compliance period y.

(5) Deficit rounding. The deficits calculated in paragraphs (b)(1) through (4) of this section must be rounded and reported to the nearest sulfur ppm-gallon or benzene gallon in accordance with § 1090.50, as applicable.

(c) A gasoline manufacturer does not incur a deficit, nor may they generate credits, for negative values from the equations in paragraph (b) of this section.

(d) Deficits incurred under this section must be fulfilled in the compliance period in which they occur and must not be carried forward under § 1090.715.

(a) A gasoline manufacturer must calculate and report annual average sulfur and benzene concentrations for each of their facilities as specified in this section. The values calculated and reported under this section are not used to demonstrate compliance with average standards under this part.

(b) A gasoline manufacturer must calculate and report their unadjusted average sulfur concentration as follows:

Where: Sa,y = The facility unadjusted average sulfur concentration for compliance period y, in ppm. Round and report Sa,y to two decimal places. Vi = The volume of gasoline produced or imported in batch i, in gallons. Si = The sulfur content of batch i, in ppm. n = The number of batches of gasoline produced or imported during the compliance period. i = Individual batch of gasoline produced or imported during the compliance period.

(c) A gasoline manufacturer must calculate and report their net average sulfur concentration as follows:

Where: SNET,y = The facility net average sulfur concentration for compliance period y, in ppm. Round and report SNET,y to two decimal places. CSVy = Compliance sulfur value for compliance period y, per § 1090.700(a)(1), in ppm-gallons.

(d) A gasoline manufacturer must calculate and report their net average benzene concentration as follows:

Where: BNET,y = The facility net average benzene concentration for compliance period y, in volume percent benzene. Round and report BNET,y to two decimal places. CBVy = Compliance benzene value for compliance period y, per § 1090.700(b)(1)(i), in benzene gallons.