# Modifications to Fuel Regulations To Provide Flexibility for E15; Modifications to RFS RIN Market Regulations

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URL: https://www.frixlaw.com/law-library/documents/fr%3A2019-11653

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** June 10, 2019
- **Citation:** 84 FR 26980

## Text

ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 80
[EPA-HQ-OAR-2018-0775; FRL-9994-87-OAR]
RIN 2060-AU34
Modifications to Fuel Regulations To Provide Flexibility for E15; Modifications to RFS RIN Market Regulations

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Final rule.

SUMMARY:

The Environmental Protection Agency (EPA) is adopting a new statutory interpretation and making corresponding regulatory changes to allow gasoline blended with up to 15 percent ethanol to take advantage of the 1-pound per square inch (psi) Reid Vapor Pressure (RVP) waiver afforded under the Clean Air Act (CAA). In doing so, EPA is finalizing an interpretive rulemaking which defines gasoline blended with up to 15 percent ethanol as “substantially similar” to the fuel used to certify Tier 3 motor vehicles. Finally, EPA is making regulatory changes to modify certain elements of the Renewable Fuel Standard (RFS) compliance system, in order to improve functioning of the renewable identification number (RIN) market and prevent market manipulation.

DATES:

Amendatory instructions 4-10 are effective July 10, 2019. Amendatory instructions 1-3 and 11-12 are effective June 5, 2019.

Operational dates:
For operational purposes under the Clean Air Act, the amendments to 40 CFR part 80, subpart M and corresponding portions of the preamble are effective as of July 10, 2019, and the amendments to 40 CFR part 80, subparts B and N; corresponding portions of the preamble; and the interpretation of “substantially similar” in the appendix to this
Federal Register
document are effective as of May 30, 2019.

ADDRESSES:

EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2018-0775. All documents in the docket are listed on the
https://www.regulations.gov
website. Although listed in the index, some information is not publicly available,
e.g.,
CBI or other information whose disclosure is restricted by statute. Certain other material is not available on the internet and will be publicly available only in hard copy form. Publicly available docket materials are available electronically through
http://www.regulations.gov.

FOR FURTHER INFORMATION CONTACT:

Julia MacAllister, Office of Transportation and Air Quality, Assessment and Standards Division, Environmental Protection Agency, 2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: 734-214-4131; email address:
macallister.julia@epa.gov.

SUPPLEMENTARY INFORMATION:

Effective date.
Section 553(d)(1) of the Administrative Procedure Act, 5 U.S.C. 553(d)(1), provides that final rules shall not become effective until 30 days after publication in the
Federal Register
“except . . . a substantive rule which grants or recognizes an exemption or relieves a restriction.” The purpose of this provision is to “give affected parties a reasonable time to adjust their behavior before the final rule takes effect.”
Omnipoint Corp.
v.
Fed. Commc'n Comm'n,
78 F.3d 620, 630 (D.C. Cir. 1996);
see also United States
v.
Gavrilovic,
551 F.2d 1099, 1104 (8th Cir. 1977) (quoting legislative history). However, when the agency grants or recognizes an exemption or relieves a restriction, affected parties do not need a reasonable time to adjust because the effect is not adverse. EPA is issuing this final rule under CAA sec. 307(d), which states “The provisions of section 553 through 557 . . . of Title 5 shall not, except as expressly provided in this section, apply to actions to which this subsection applies.” CAA sec. 307(d)(1). Thus, APA sec. 553(d) does not apply to this rule. EPA is nevertheless acting consistently with the policies underlying APA sec. 553(d) in making a portion of this rule effective immediately. The regulatory amendments to 40 CFR part 80, subparts B and N, relieve a restriction on the sale of E15 during the period of May 1 through September 15, which the 40 CFR part 80 regulations define as the “regulatory control period.” This action will enable E15 to take advantage of the 1-pound per square inch Reid Vapor Pressure waiver that currently applies to E10 during the summer months. Accordingly, it is in keeping with the policy underlying the APA for the regulatory amendments to 40 CFR part 80, subparts B and N, to take effect immediately. In addition, APA sec. 553(d) contains an exception for interpretive rules; thus, it is consistent with the APA to make the interpretation of “substantially similar” in the appendix to this
Federal Register
notice effective immediately. Finally, this CAA sec. 307(d) rule is promulgated upon signature. For operational purposes under the CAA, EPA is making the amendments to 40 CFR part 80, subparts B and N; corresponding portions of the preamble; and the interpretation of “substantially similar” in the appendix to this
Federal Register
notice effective as of May 30, 2019, which is the date of signature.

Potentially affected entities.
Entities potentially affected by this final rule include those involved with the production, importation, distribution, marketing, and retailing of transportation fuels, including gasoline and diesel fuel or renewable fuels such as ethanol, biodiesel, and renewable diesel. Potentially affected categories include:

Category

NAICS
1
codes

SIC
2
codes

Examples of potentially affected entities

Industry
324110
2911
Petroleum refineries.

Industry
325193
2869
Ethyl alcohol manufacturing.

Industry
325199
2869
Other basic organic chemical manufacturing.

Industry
424690
5169
Chemical and allied products merchant wholesalers.

Industry
424710
5171
Petroleum bulk stations and terminals.

Industry
424720
5172
Petroleum and petroleum products merchant wholesalers.

Industry
454319
5989
Gasoline service stations.

Industry
447190
5541
Marine service stations.

1
North American Industry Classification System (NAICS).

2
Standard Industrial Classification (SIC).

This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be affected by this action. This table lists the types of entities that EPA is now aware could potentially be affected by

this action. Other types of entities not listed in the table could also be affected. To determine whether your entity will be affected by this action, you should carefully examine the applicability criteria in 40 CFR part 80. If you have any questions regarding the applicability of this proposed action to a particular entity, consult the person listed in the
FOR FURTHER INFORMATION CONTACT
section.

Outline of This Preamble

I. Executive Summary

A. Purpose of This Action

B. Summary of the Major Provisions of This Action

1. E15 Reid Vapor Pressure

2. RIN Market Reform

C. Severability

II. Application of the 1-psi Waiver to E15

A. Background

1. Summary of Statutory Framework

2. Background on Ethanol Use Over Time

3. Background on CAA Sec. 211(h)

4. Background of E10 and E15 CAA Sec. 211(f)(4) Waivers

B. Interpretation of CAA Sec. 211(h)(4)

C. Interpretation of “Substantially Similar” for Gasoline

1. Certification Fuels

2. History of “Substantially Similar” Interpretations

3. Interpretation of CAA Sec. 211(f)(1)

4. Criteria for Determining Whether a Fuel Is “Substantially Similar”

5. Impact of Volatility on “Substantially Similar”

6. Technical Rationale and Discussion for Tier 3 Vehicles (MY2020 and Newer)

7. Technical Rationale for MY2001-2019 Light-Duty Motor Vehicles

8. Technical Rationale for Other Vehicles, Engines, and Equipment

9. Limitations of “Substantially Similar” Interpretative Rulemaking

10. Implications of “Substantially Similar” Interpretation

D. Regulatory Amendments

1. Modification of Regulations

2. Status of Misfueling Mitigation Rule Regulations

3. Waiver Applicability

E. Expected Impact of This Rule on E15 Use

F. E15 Criteria Pollutant and Air Toxics Emission Impacts

G. E15 Economic Impacts

1. Potential Benefits of This Action

2. Costs of This Action

III. RIN Market Reforms

A. Background

B. Market Manipulation

C. Reform 1: Public Disclosure if RIN Holdings Exceed Certain Threshold

D. Reform 5: Enhancing EPA's Market Monitoring Capabilities

E. Other Reforms Proposed But Not Finalized at This Time

F. RIN Market Reform Economic Impacts

1. Benefits of RIN Market Reform

2. Costs of RIN Market Reform

IV. Statutory and Executive Order Reviews

A. Executive Order 12866: Regulatory Planning and Review and Executive Order 13563: Improving Regulation and Regulatory Review

B. Executive Order 13771: Reducing Regulations and Controlling Regulatory Costs

C. Paperwork Reduction Act (PRA)

D. Regulatory Flexibility Act (RFA)

E. Unfunded Mandates Reform Act (UMRA)

F. Executive Order 13132: Federalism

G. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments

H. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks

I. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use

J. National Technology Transfer and Advancement Act (NTTAA)

K. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations

L. Congressional Review Act (CRA)

V. Statutory Authority

I. Executive Summary

On October 11, 2018, the President directed
1

EPA to initiate a Clean Air Act (CAA or the Act) rulemaking to extend to gasoline blends containing 15 percent ethanol by volume, commonly referred to as E15, the 1-psi (pound per square inch) Reid Vapor Pressure (RVP) waiver that currently applies to E10 (gasoline containing up to 10 percent ethanol by volume) during the summer ozone control season. The President also directed EPA to consider four reforms to the Renewable Fuel Standard (RFS) compliance system: (1) Prohibiting entities other than obligated parties from purchasing separated Renewable Identification Numbers (RINs); (2) requiring public disclosure when RIN holdings held by an individual actor exceed specified limits; (3) limiting the length of time a non-obligated party can hold RINs; and (4) requiring the retirement of RINs for the purpose of compliance be made in real time.

1
See President Donald J. Trump Is Expanding Waivers for E15 and Increasing Transparency in the RIN Market:
https://www.whitehouse.gov/briefings-statements/president-donald-j-trump-expanding-waivers-e15-increasing-transparency-rin-market.

A. Purpose of This Action

The objectives of this action are twofold. First, this rulemaking will take steps intended to create parity in the way the RVP of both E10 and E15 fuels is treated under EPA regulations. Second, this action finalizes reforms to RIN regulations intended to increase transparency and deter potential manipulative and anti-competitive behaviors in the RIN market.

Further, in promulgating this rule, EPA is seeking to take justified actions to remove barriers which unnecessarily limit the potential growth in biofuel consumption, much as it did in 1987 for the original 1-psi waiver as markets were evolving. As is also clear from the text of the Energy Independence and Security Act of 2007, and the associated 36 billion gallon mandate by 2022, that Congress intended to promote and accommodate expanded biofuel use and outlined greenhouse gas savings. While this rule alone is not expected to increase the availability of E15, it removes one barrier to such an outcome.

B. Summary of the Major Provisions of This Action

1. E15 Reid Vapor Pressure

We are modifying the volatility requirements for E15 during the summer season or the period of May 1 through September 15.
2 3

The changed volatility provisions for these blends will allow E15 to receive the benefit of the

provision at CAA sec. 211(h)(4), commonly referred to as “the 1-psi waiver.” The 1-psi waiver allows gasoline-ethanol blends to have a higher RVP
4

than would be allowed under CAA sec. 211(h)(1) and the corresponding volatility provisions, which prohibit the RVP of gasoline from exceeding 9.0 psi during the summer.
5

Under EPA's previous interpretation of CAA sec. 211(h)(4), and corresponding regulations, only blends of ethanol and gasoline containing at least 9 percent and no more than 10 percent ethanol by volume (E10) were granted the 1-psi waiver.

2
For purposes of this preamble, E15 refers to gasoline-ethanol blended fuels that contain greater than 10 volume percent and no more than 15 volume percent ethanol content. Under EPA regulations at 40 CFR part 80, we broadly define gasoline as “any fuel sold in any State for use in motor vehicles and motor vehicle engines, and commonly or commercially known or sold as gasoline.” We have also clearly stated that any fuel that is predominantly gasoline is considered gasoline for purposes complying with EPA's fuels regulations at 40 CFR parts 79 and 80 and relevant provisions under the CAA (see 79 FR 23557 (April 28, 2014) and 81 FR 80841-80843 (November 16, 2016)). Gasoline-ethanol blended fuels (referred to as “gasoline-ethanol blends” in this action) are fuels under the CAA and gasoline-ethanol blended fuels containing no more than 50 volume percent ethanol are defined as gasoline under EPA's regulations. This preamble sometimes refers to gasoline or to gasoline-ethanol blended fuels in terms of the ethanol content of the fuel (
e.g.,
“E10” or “E15”). At other times, this preamble uses the term gasoline to be inclusive of all fuels that are predominantly composed of gasoline, which would include, but is not limited to, all gasoline-ethanol blended fuels containing no more than 50 volume percent ethanol.

3
CAA sec. 211(h)(1) requires EPA to establish volatility requirements—that is, a restriction on Reid Vapor Pressure (RVP)—during the high ozone season. To implement these requirements, EPA defines “high ozone season” at 40 CFR 80.27 as the period from June 1 to September 15. The regulations at 40 CFR 80.27 also specify that all parties except for retailers must make and distribute gasoline meeting the RVP standards at 40 CFR 80.27 from May 1 through September 15 and calls this period the “regulatory control period.” The E15 partial waivers impose the 9.0 psi RVP limit on E15 from May 1 through September 15. See 75 FR 68094 (November 4, 2010) and 76 FR 4662 (January 26, 2011). In general practice by industry and for purposes of this preamble, the high ozone season and regulatory control period is referred to as the “summer” or “summer season” and gasoline produced to be used during the regulatory control period and high ozone season is called “summer gasoline.” EPA's regulations do not impose any volatility requirements on any type of blend of gasoline outside of the summer season.

4
RVP is a measure of the volatility of gasoline. Gasoline must have volatility in the proper range to prevent driveability, performance, and emissions problems. If the volatility is too low, the gasoline will not ignite properly; if the volatility is too high, the vehicle may experience vapor lock. Importantly for this rule, excessively high volatility also leads to increased evaporative emissions from the vehicle. Vehicle evaporative emission control systems are designed and certified on gasoline with a volatility of 9.0 psi RVP. Higher volatility gasoline may overwhelm the vehicle's evaporative control system, leading to a condition described as “breakthrough” of the cannister and mostly uncontrolled evaporative emissions. The regulations at 40 CFR part 86 defines evaporative emissions as “hydrocarbons emitted into the atmosphere from a motor vehicle, other than exhaust and crankcase emissions.” For purposes of this preamble, evaporative emissions are generally referring to volatile organic compounds (VOCs) present in gasoline that evaporate within the fuel system. This differs from tailpipe or exhaust emissions which are defined under the regulations at 40 CFR part 86 as “substances emitted to the atmosphere from any opening downstream from the exhaust port of a motor vehicle engine.” For purposes of this preamble, when we refer to exhaust emissions, we are generally referring to exhaust emissions that are controlled in motor vehicles under Title II of the Clean Air Act.

5
In a few areas, specified at 40 CFR 80.27, the RVP standard is 7.8 psi. In these areas, after application of the 1-psi waiver, gasoline-ethanol blended fuels covered by the 1-psi waiver could have an RVP of up to 8.8 psi.

EPA is finalizing three steps to accomplish this change. First, we are adopting a new interpretation of CAA sec. 211(h)(4). Second, we are finalizing two approaches to address CAA sec. 211(f). In the first of these approaches, we find that E15 is “substantially similar” (sub sim) to Tier 3 E10 certification fuel for use in MY2001 and newer light-duty vehicles.
6

In the second of these approaches, we maintain our interpretation of CAA sec. 211(f), making it clear that the conditions on the CAA sec. 211(f)(4) waivers granted to E15 in 2010 and 2011 do not restrict the application of the 1-psi waiver to downstream oxygenate blenders in most circumstances. Third and finally, we are modifying our regulations to effect two changes: (1) Remove limitations in our regulations on the volatility of E15 promulgated in the E15 Misfueling Mitigation Rule (“MMR”) that were put in place in keeping with the prior interpretation of CAA sec. 211(h)(4);
7

and (2) modify the associated product transfer document (PTD) requirements also promulgated in the MMR.

6
EPA last issued an interpretative rulemaking for what it considers sub sim for gasoline in 2008. See 73 FR 22281 (April 25, 2008).

7
See 76 FR 44406 (July 25, 2011).

As a result of this action, parties will be able to make, distribute, and sell E15 made with the same conventional blendstock for oxygenate blending (CBOB)
8

that is used to make E10 by oxygenate blenders during the summer.
9

E15 will be held to the same gasoline volatility standards that currently apply to E10, maintaining substantially the same level of emissions performance as E10 since E15 made from the same CBOB as is used to make E10 during the summer would have slightly lower RVP than E10 and would be expected to have similar emissions performance as discussed in Sections II.C and II.E.

8
CBOB is the base gasoline typically made for blending with 10 percent ethanol in conventional gasoline areas of the country.

9
As previously noted, EPA's regulations do not impose any volatility requirements on any type of blend of gasoline outside of the summer season. EPA does not have volatility limitations on gasoline outside of the summer season. Therefore, E15 can already be made from the same CBOB used to produce E10 outside of the summer season. The rest of the year (outside of the summer season) is commonly referred to as the “winter season” or “winter.”

2. RIN Market Reform

EPA takes claims of RIN market manipulation seriously. Though, as stated in the proposal and reaffirmed in this action, we have yet to see data-based evidence of such behavior, the potential for manipulation is a concern. Accordingly, we are finalizing two reforms to increase our market monitoring capabilities, bring more transparency to the RIN market, and discourage RIN holdings in excess of normal business practices. Specifically, we are finalizing the following RIN market reforms:

• Requiring public disclosure when RIN holdings held by an individual actor exceed specified limits.

• Requiring the reporting of additional price and affiliate data to EPA.

First, we are finalizing two RIN holding thresholds that will work in tandem to discourage potential accumulation of market power. These thresholds will apply to holdings of separated D6 RINs only.
10

If a non-obligated party's end-of-day separated D6 RIN holdings exceed three percent of the total implied conventional biofuel volume requirement, it has triggered the primary threshold. If an obligated party's end-of-day separated D6 RIN holdings exceed three percent of the total implied conventional biofuel volume requirement and exceed 130 percent of its individual implied conventional renewable volume obligation (RVO), it has triggered the secondary threshold. We are requiring that parties make calculations of daily RIN holdings and report new information in a quarterly report, including a yes/no certification statement about exceeding the threshold and a list of all RIN-holding corporate affiliates and all contractual affiliates. We will publish on our website the names of any parties that report exceeding the thresholds.

10
RINs specify a “D-code” corresponding to the renewable fuel category applicable to the fuel, as determined by the feedstock used, fuel type produced and GHG emissions of the fuel, among other characteristics. There are five different D-Codes for RINs in the RFS program. D3 RINs are cellulosic biofuel RINs. D4 RINs are biomass-based diesel (including both biodiesel and renewable diesel) RINs. D5 RINs are advanced biofuel RINs. D6 RINs are conventional biofuel RINs (primarily corn ethanol). D7 RINs are cellulosic diesel RINs which meet the requirements for both cellulosic biofuel and biomass-based diesel.

Second, we are finalizing additional reporting requirements that will enhance EPA's oversight capabilities of RIN market behavior. We are finalizing requirements for parties to follow certain conventions when reporting RIN prices to EPA and to report whether the RIN transaction was on the spot market or as a result of a term contract.

Third, we are confirming our intention to take non-regulatory steps after promulgation of this action to update business rules in EMTS to require that both parties in a RIN transaction enter the same RIN price and to employ a third-party market monitor to conduct analysis of the RIN market, including screening for potential anti-competitive behavior. We intend to incorporate new information reported to EPA as a result of this rulemaking into such RIN market analysis.

Finally, we are not taking final action on three of the reforms that were proposed. These reforms are related to RIN retirement frequency, limitations on the parties that can purchase a D6 RIN, and the duration parties can hold D6 RINs. We have decided to defer the decision on whether or not to finalize these three proposed reforms as we conduct more thorough analyses of the RIN market and of the manipulation concerns presented by some stakeholders, with help from a third party. If, after reviewing that data and

conducting additional market analysis, we determine that it would be prudent to finalize one or more of these proposed reforms in the future, we will share the analysis that has led us to believe it could be appropriate and will allow time for parties to comment before we proceed with a final rule.

C. Severability

The actions we are taking with regard to Section II are made pursuant to our authority under CAA secs. 211(c), 211(f), and 211(h). The actions we are taking with regard to Section III are made pursuant to our authority under Clean Air Act sec. 211(o). We consider Section II and the regulatory provisions we are finalizing under 40 CFR part 80, subparts B and N, to be severable from Section III and the regulatory provisions we are finalizing under 40 CFR part 80, subpart M, as these are two separate actions, each of which operates independently from the other.

II. Application of the 1-psi Waiver to E15

In this action, we are finalizing changes to the volatility provisions for E15 during the summer season based on revised interpretations of CAA sec. 211(h)(4) and CAA sec. 211(f). The changed volatility provisions for E15 will apply the 1-psi waiver to E15 pursuant to CAA sec. 211(h)(4). This provision allows certain gasoline-ethanol blends to have a higher RVP than would otherwise be allowed under CAA sec. 211(h)(1) and the corresponding volatility regulations that prohibit the RVP of gasoline from exceeding 9.0 psi during the summer. Prior to this rulemaking, EPA's interpretation of the statute and the corresponding regulations only applied the 1-psi waiver to gasoline-ethanol blends containing at least 9 percent and no more than 10 volume percent ethanol. The interpretation in this action represents a change in EPA's prior interpretation and, as explained in more detail below, is appropriate in light of the increased presence of E15 in the gasoline marketplace. This interpretation is further supported by the fact that the conditions that led us to provide the original 1-psi waiver for E10 in 1990 are equally applicable to E15 today.

The volatility of E15 is also limited by CAA sec. 211(f). CAA sec. 211(f) prohibits the introduction into commerce of fuels and fuel additives unless they either: (1) Are substantially similar to fuels or fuel additives utilized in the certification of motor vehicles, or (2) receive a waiver from the sub sim requirement in accordance with CAA sec. 211(f)(4). EPA granted E15 CAA sec. 211(f)(4) waivers in 2010 and 2011, subject to certain conditions. Under the waiver conditions, the RVP limit for E15 is 9.0 psi from May 1 through September 15. In order to effectuate the 1-psi waiver under CAA sec. 211(h)(4) and permit the introduction of E15 at the higher RVP level into commerce, we are addressing the statutory provisions under both CAA sec. 211(f) and (h).

As discussed in Section I, we are taking this action in response to the Presidential Directive to provide E15 the 1-psi waiver. All actions we are taking under both CAA sec. 211(h) and CAA sec. 211(f)(1) are in furtherance of that goal. EPA is taking several steps to provide E15 the 1-psi waiver. First, we are finalizing our proposed interpretation of CAA sec. 211(h)(4). Under this new interpretation, gasoline-ethanol blends containing at least 10 percent ethanol that are either substantially similar under CAA sec. 211(f)(1) or that have been granted a waiver under CAA sec. 211(f)(4) would receive the 1-psi waiver, including E15.
11

11
While any gasoline-ethanol blend containing at least 10 percent ethanol would receive the 1-psi waiver, that does not mean that gasoline-ethanol blends higher than E15 can be introduced into commerce at 10.0 psi. As discussed further below, in order for these fuels to be introduced into commerce, they must be substantially similar to certification fuel or obtain a waiver from the substantially similar requirement. Therefore, once this action is finalized, only E10 and E15 may be introduced into commerce at 10.0 psi.

Second, we are finalizing an interpretative rulemaking that defines E15 with an RVP of 9.0 psi RVP in the summer as sub sim to the fuel utilized to certify Tier 3 vehicles when used in model year (MY) 2001 and newer light-duty motor vehicles, subject to certain criteria. After application of the CAA sec. 211(h)(4) 1-psi waiver, this new definition of sub sim will allow E15 to be introduced into commerce with an RVP of 10.0 psi during the summer. Additionally, we maintain our interpretation of CAA sec. 211(f), making it clear that the conditions on the CAA sec. 211(f)(4) waivers granted to E15 in 2010 and 2011 do not restrict the application of the 1-psi waiver to downstream oxygenate blenders in most circumstances.

Third, to effectuate our new interpretations under CAA sec. 211(h) and 211(f)(1), we are finalizing the following changes to EPA's fuels regulations: (1) Removing limitations on the volatility of E15 in our regulations, that were put in place to implement the prior interpretation of CAA sec. 211(h)(4); and (2) modifying the associated Product Transfer Document (“PTD”) requirements.
12

12
We also find that our existing understanding of the statute that CAA sec. 211(f), generally, and any waiver conditions imposed under CAA sec. 211(f)(4) more specifically, only apply to fuel and fuel additive manufacturers and thus provide an additional basis for the regulatory changes we are making in this action.

The actions we are taking, including those pursuant to our authorities under CAA secs. 211(f) 211(h), are all taken to establish a single, unified program that allows the introduction into commerce of E15 at 10.0 psi RVP during the summer driving season. For example, the actions we are taking under CAA sec. 211(f) are directly related to our new interpretation of CAA sec. 211(h)(4), and in the absence of this new CAA sec. 211(h)(4) interpretation, we would not be taking these actions. Additionally, the restrictions adopted as part of the E15 sub sim determination under CAA sec. 211(f)(1) are necessary to prevent the use of E15 in vehicles, engines, and equipment other than MY2001 and newer light-duty vehicles, and absent those restrictions and the limited nature of the sub sim determination, we would not consider E15 to be sub sim to Tier 3 certification fuel. Finally, our amendments to 40 CFR part 80 subparts B and N are pursuant to our actions under CAA secs. 211(f) and (h)(4). In sum, all actions we are taking today constitute a single, cohesive effort, and as such we do not intend for any of these individual actions to be severable. In the event it is determined we lack authority to adopt any element of this program, EPA believes the other elements of the program cannot be justified in isolation.

The following subsections provide further details on these changes, as well as discussions on the potential effects of this action on emissions and the economy. First, we provide background on both the relevant statutory provisions and the history of gasoline-ethanol blends in the fuel marketplace. We then discuss our new interpretation of CAA sec. 211(h), under which the 1-psi waiver applies to blends up to E15. Third, we provide a discussion of our new definition of “substantially similar” under CAA sec. 211(f)(1) and its application to E15. Finally, we provide discussion of the potential economic and environmental impacts of this action.

A. Background

The discussion below provides general background explaining the CAA provisions that are relevant to this action, as well as a description of prior EPA actions taken under those

provisions. It also provides background on the presence of ethanol in the fuels marketplace.

1. Summary of Statutory Framework

The Air Quality Act of 1967 and the CAA of 1970 established the basic framework for EPA's fuels regulations. CAA sec. 211(a) allows EPA to designate fuels and fuel additives for registration. CAA sec. 211(b) sets forth registration requirements for fuels and fuel additives and authorizes EPA to require health and environmental effects testing for the registration of fuels and fuel additives. CAA sec. 211(c) authorizes EPA to regulate or prohibit fuels or additives for use in motor (or nonroad) vehicles or engines if: (A) “any fuel or fuel additive or any emission product of such fuel or fuel additive causes, or contributes, to air pollution . . . that may reasonably be anticipated to endanger the public health or welfare,” or (B) “if emission products of such fuel or fuel additive will impair to a significant degree the performance of any emission control device or system.” CAA sec. 211(c) also provides that in order to place a control or prohibition on a fuel or fuel additive under clause (A), EPA must consider “all relevant medical and scientific evidence available . . . including consideration of other technologically or economically feasible means of achieving emission standards.” In order to place a control or prohibition on a fuel or fuel additive under clause (B), EPA must consider “available scientific and economic data, including a cost benefit analysis comparing emission control devices or systems which are or will be in general use and require the proposed control” and those that do not require the proposed control.

In the CAA Amendments of 1977, Congress established CAA sec. 211(f)(1), which prohibits manufacturers from first introducing into commerce any fuel or fuel additive for general use in light-duty vehicles that is not “substantially similar to any fuel or fuel additive utilized in the certification of any model year 1975, or subsequent model year, vehicle.” In a report accompanying the enactment of this provision in addition to 211(c), Congress explained that “the intention of this [section] is to prevent the use of any new or recently introduced additive in those unleaded grades of gasoline . . . which may impair emission performance of vehicles.”
13

The Senate Report also states that the sub sim provision was enacted in recognition that “due to the delay associated with statutory procedural safeguards of [CAA sec. 211(c)]” parties could introduce fuel with negative impacts on emission controls before a CAA sec. 211(c) action could be completed.
14

13
See S. Rep. 95-127 (95th Congress, 1st Session) at 90-91. See also
Motor Vehicle Manufacturers Association of the U.S., Inc.
v.
EPA,
768 F.2d 385, 390 n.7 (D.C. Cir. 1985).

14
Id.

If a fuel or fuel additive is not sub sim, a fuel or fuel additive manufacturer may obtain a waiver under CAA sec. 211(f)(4)
15

if the manufacturer can demonstrate that the new fuel or fuel additive “will not cause or contribute to a failure of any emission control device or system (over the useful life of the motor vehicle, motor vehicle engine, nonroad engine, or nonroad vehicle in which such device or system is used) to achieve compliance by the vehicle or engine with the emission standards with respect to which it has been certified.” Together, CAA sec. 211(f)(1) and (f)(4) prevent fuels and fuel additives from being introduced into commerce that would degrade the emission performance of the existing fleet and protect vehicle manufacturers from their vehicles consequently failing emission standards in use.

15
Quoted above is the current formulation of CAA sec. 211(f)(4). When enacted in 1977, the waiver provision stated a waiver could be granted “if [the administrator] determines that the applicant has established that such fuel or fuel additive or a specified concentration thereof, and the emission products of such fuel or fuel additive or specified concentration thereof, will not cause or contribute to a failure of any emission control device or system (over the useful life of any vehicle in which such device or system is used) to achieve compliance by the vehicle with the emission standards with respect to which it has been certified pursuant to section 206.” See CAA Amendments of 1977.

In the CAA Amendments of 1990, Congress added CAA sec. 211(f)(1)(B), which extends the prohibition from first introduction into commerce to “any fuel or fuel additive for use by any person in motor vehicles manufactured after model year 1974 which is not substantially similar to any fuel or fuel additive utilized in the certification of any model year 1975, or subsequent model year vehicle, or engine.”
16

16
See 75 FR 68094, 68145 (Nov. 4, 2010).

Also, in the CAA Amendments of 1990, Congress added CAA sec. 211(h) to address the volatility of gasoline, which largely codified EPA's then-new RVP regulations.
17

Accordingly, entirely separate from CAA sec. 211(f), CAA sec. 211(h)(1) prohibits the sale of gasoline with an RVP in excess of 9.0 psi during the high ozone season (while allowing EPA to promulgate more stringent RVP requirements for nonattainment areas),
18

and CAA sec. 211(h)(4) provides a 1.0 psi RVP allowance for “fuel blends containing gasoline and 10 percent” ethanol.

17
See 54 FR 11868 (March 22, 1989) (Phase I) and 55 FR 23658 (June 11, 1990) (Phase II).

18
A “nonattainment area” is an area designated as not meeting a National Ambient Air Quality Standard, or as contributing to another, nearby area's failure to meet such standard. See generally CAA sec. 107.

Relevant to our discussion of CAA sec. 211(f)(1) are CAA sec. 206 and 213. These provisions provide EPA with authority to establish vehicle and engine certification procedures; CAA sec. 213 also provides EPA with authority to establish emissions standards. CAA sec. 206, “Motor vehicle and motor vehicle engine compliance testing and certification,” authorizes EPA to established methods and procedures for testing whether a motor vehicle or motor vehicle engine conforms with our motor vehicle emissions standards promulgated under CAA sec. 202. CAA sec. 213, enacted in the CAA Amendments of 1990, authorizes EPA to promulgate regulations containing emissions standards for nonroad engines and nonroad vehicles.

In the Energy Policy Act of 2005 (“EPAct”) Congress added sec. 211(o) to the CAA creating the Renewable Fuel Standard (RFS), and then in the Energy Independence and Security Act of 2007 (“EISA”) modified and greatly expanded the program. The RFS program places obligations on refiners and importers to expand the use of renewable fuels such as ethanol in the nation's fuel supply.

2. Background on Ethanol Use Over Time

Prompted by concerns about reliance on foreign sources of oil and a desire to support domestic agriculture, several corn-based ethanol plants were constructed in the 1970s. In 1978, after a CAA sec. 211(f)(4) waiver application was submitted for E10, E10 was granted a CAA sec. 211(f)(4) waiver by operation of law.
19

The CAA sec. 211(f)(4) waiver along with an excise tax exemption for gasoline containing ethanol resulted in the growth in the production of ethanol through the mid-1980s at the rate of about 100 million gallons per year. In the years following, ethanol use in gasoline continued to grow as a result of a combination of state and federal programs and policies, as well as

favorable market conditions, until essentially all gasoline contained 10% ethanol by around 2013.

19
See 44 FR 20777 (April 6, 1979). Under the CAA as it existed in 1978, unless EPA acted to deny a waiver application within 270 days, the waiver was deemed granted by operation of law. See 42 U.S.C. 7545(f)(4) (1978). In EISA, Congress revised this provision; under the statute as it now exists, EPA shall take final action to grant or deny an application after public notice and comment within 270 days of receipt, but does not automatically grant applications upon agency inaction.

ER10JN19.004

In the 1980s, to make E10, or “gasohol” as it was known at the time, ethanol was “splash blended” into previously certified gasoline. “Splash blending” occurred when tanker trucks were filled up to 90 volume percent with gasoline at a gasoline terminal and then driven to an ethanol tank (at the gasoline terminal or at another location) to be filled with 10 volume percent ethanol. Mixing was assumed to take place as the truck drove to the retail station.
20

In 1987, when EPA first proposed the 1-psi RVP waiver for E10, just over 800 million gallons of ethanol was blended into gasoline. Assuming it was all blended at 10 percent, E10 represented just over 7 percent of the gasoline consumed in the U.S. This limited the impact of the 1-psi RVP waiver to a small portion of the fuel pool. Growth in ethanol use slowed between 1988 and 1990 as the volume of methyl tertiary butyl ether (MTBE) as a gasoline additive rose to provide octane and oxygen content to gasoline in lieu of ethanol.

20
52 FR 31292 (August 19, 1987).

In 1989, the first phase of the federal volatility standards went into effect.
21

Gasoline containing about 10% ethanol was simultaneously granted a 1-psi RVP waiver, such that continued use of E10 did not require the production and distribution of a special low-RVP gasoline blendstock for subsequent blending with ethanol. This allowed the practice of splash blending of ethanol to continue. At the time, gasohol also had a tax credit through which Congress intended to encourage the use of ethanol as a means of reducing dependence on foreign oil and making use of excess agricultural production.
22

Neither the Phase I (1989) nor the Phase II (1990 and thereafter) volatility standards appeared to have any direct impact on the magnitude of ethanol use. In 1991, we promulgated regulations in response to the CAA Amendments of 1990 that implemented the statutory 1-psi waiver. We again did not see significant impacts on ethanol use.

21
See 54 FR 11868 (March 22, 1989).

22
Id.

In 1992, the winter oxygenated fuels (“oxyfuels”) program for carbon monoxide (CO) nonattainment areas began as mandated by the CAA Amendments of 1990.
23

This program required the use of at least 2.7 percent by weight oxygen in gasoline, equivalent to about 15 volume percent MTBE or 7.8 volume percent ethanol in those areas.
24

The use of both ethanol and MTBE as gasoline additives grew over the next several years under the influence of the oxyfuels program, with ethanol reaching 1.3 billion gallons and E10 representing approximately 11 percent of all gasoline in 1994 (assuming all the ethanol was blended to make E10).

23
CAA sec. 211(m).

24
Where allowed, ethanol was typically blended at 10 percent to take advantage of the 1-psi waiver, in both nonattainment and attainment areas.

The reformulated gasoline (RFG) program, also enacted under the CAA Amendments of 1990, began in 1995 and applied to severe and extreme ozone nonattainment areas.
25

It required the use of at least 2.1 weight percent oxygen on average, equivalent to 11.6 volume percent MTBE or 6.0 volume percent ethanol.
26

Due to the summer volatile organic compounds (VOC) emissions standards for RFG, the 1-psi waiver for ethanol blends was effectively not applicable. This is because the gasoline-ethanol blends would not meet the summer VOC emission standards at the higher RVP. Thus ethanol blending into RFG required the production and distribution of a special low-RVP gasoline blendstock, referred to as reformulated blendstock for oxygenate blending (RBOB), into which ethanol could be blended at the terminal.
27

Perhaps due to this, and the relative ease of blending MTBE, ethanol's use in RFG was limited, and growth in the use of ethanol as a gasoline additive was more limited in the years after 1995 than it would have been if MTBE had not been available as an alternative to

ethanol. By the year 2000, ethanol use had grown to 1.7 billion gallons, with E10 representing about 13% of all gasoline (assuming all ethanol was blended to make E10). The practice of blending ethanol had also evolved from simple splash blending, to ethanol being metered into transport trucks at the 10% rate along with gasoline at the gasoline terminal; into RBOB in RFG areas; and into conventional gasoline (“CG”) in other areas.

25
See, generally, CAA sec. 211(k).

26
Again, ethanol was typically blended at 10 percent where allowed to take advantage of the 1-psi waiver.

27
Because ethanol was high in octane, RBOB was also made to a lower octane specification in order to reduce costs.

Beginning in the early 2000s, concerns about leaking underground storage tanks and groundwater contamination led several states to ban the use of MTBE as a gasoline additive. The use of MTBE as a gasoline additive began falling in 2002, with its volume being replaced essentially 1:1 with ethanol in RFG areas. EPAct in 2005 removed the oxygenate mandate for RFG and replaced it with the Renewable Fuel Standard (RFS). By this time, refiners had already removed essentially all MTBE from RFG and replaced it with ethanol. This initially involved shifting much of the existing discretionary blending of ethanol in CG areas to RFG, until ethanol production and distribution capacity could increase to supply both the CG and RFG markets. By 2007, MTBE was rarely used, and coupled with the ongoing excise tax credit for ethanol, and the certainty of the Renewable Fuel Standard (RFS) mandate, ethanol's use rose significantly to 6.9 billion gallons by 2007, with E10 representing nearly half of all gasoline (assuming that all of the ethanol was blended to make E10).

In the following years, a combination of factors continued to create ongoing incentives for the rapid growth of E10, including rising crude oil prices, the expansion of the RFS program with the passage of EISA, and California's Low Carbon Fuel Standard (LCFS). With E10 comprising the majority of gasoline produced and distributed nationwide, refiners began producing not only low RVP/low octane RBOB for blending with ethanol in RFG areas at downstream terminals, but also a low octane conventional blendstock for oxygenate blending (CBOB) for blending CG with ethanol. By 2013, the pipeline distribution systems had switched over to transporting only CBOB for the production of conventional gasoline, forcing all refiners to harmonize around their production, and necessitating that 10 percent ethanol be added at downstream terminals in order for conventional gasoline to meet its octane and other specifications at retail. Essentially all gasoline, both reformulated and conventional, was E10 by this time, and total ethanol consumption was 13.2 billion gallons.

Similar to E10 in the 1970's, E15 has begun to slowly enter the marketplace. In October 2010, EPA partially approved a waiver request from Growth Energy allowing the introduction of E15 into commerce for use in model year 2007 and newer light-duty motor vehicles, subject to several conditions.
28

In January 2011, EPA extended this partial waiver to include model year 2001-2006 light-duty vehicles, allowing the use of E15 in model year 2001 and newer light-duty motor vehicles.
29

Since these partial waivers required E15 to meet a 9.0 psi RVP standard, in contrast to the 10.0 psi RVP standard E10 had to meet in the summer, introduction into commerce of E15 into CG areas required that CBOB for use to make E15 have a lower RVP than typically available.
30

This is similar to the situation faced by E10 in 1987. In the years since the E15 waivers were granted, the number of retail stations offering E15 has grown slowly, reaching 1,293 registered stations
31

(less than 1 percent of all retail stations) in May 2019.
32

Figure II.A-2 shows the growth of E15 stations since 2012.
33

28
75 FR 68094 (November 4, 2010).

29
76 FR 4662 (January 26, 2011).

30
Since RBOB was already sub-RVP, E15 could use the same RBOB already produced and distributed for E10 in RFG areas.

31
The regulations at 40 CFR 80.1502 require that parties that produce E15 and ethanol for use in the production of E15 to participate in a survey of retail stations to ensure compliance with E15 misfueling mitigation requirements. As part of this process, these parties register with the RFG survey association, the independent surveyor that currently conducts the E15 survey. This registration with RFGSA includes information related to the number of E15 stations at which E15 is going to be sold. More information on RFGSA is available at:
http://rfgsa.org.
Growth Energy in comment also estimates this number at nearly 1,800 stations in 31 states. See Comments from Growth Energy, pg. 1. See also “New Mexico Becomes 31st State to Add E15 Choice at the Pump,” available at:
https://growthenergy.org/2019/05/01/growth-energy-new-mexico-becomes-31st-state-to-add-e15-choice-at-the-pump.

32
Much of this growth has been driven by USDA's Biofuel Infrastructure Program (BIP). In October 2015, USDA announced that the BIP was investing a total of $210 million, including money from USDA and matching commitments from states and private entities, to increase the number of retail stations offering E15 and other higher level gasoline-ethanol blends. These grants were intended to result in an additional 1,486 stations selling E15. In addition to BIP, Prime the Pump, a nonprofit organization supporting the expanded availability of E15, has provided funds to retail stations to add the necessary infrastructure to offer E15. This data demonstrates that a very high proportion of the stations currently offering E15 have received funding from federal, state, and/or industry sources. It also suggests that increasing the rate of growth of E15 stations in the future may require the availability of funds from such sources.

33
See “Data for Growth in E15 Retail Stations over Time from Growth Energy” in the docket. EPA-HQ-OAR-2018-0775.

ER10JN19.005

While there are no reliable statistics on the volume of E15 produced and distributed from these stations, it has remained small, with little overall impact on ethanol use. In coming years, if gasoline demand falls as projected by the U.S. Energy Information Administration (EIA),
34

growth in E15 would help offset a portion of the drop in ethanol use from declining E10 gasoline sales. The extension of the 1-psi RVP waiver to E15 in this action may help this, although there remain considerable other barriers as discussed in Section II.E, such that we do not project this action alone will meaningfully impact E15 sales in the coming years.

34
See “Updated market impacts of biofuels in 2019,” Docket Item No. EPA-HQ-OAR-2018-0167-1330.

For reasons expanded upon in Section II.E (
e.g.,
consumer acceptance of E15 and demand for E10 in vehicles and engines not permitted to use E15), we believe marketers and retailers of gasoline will not be able to exclusively market E15 and will continue to offer E10 as the predominant fuel for the foreseeable future.

3. Background on CAA Sec. 211(h)

To properly understand this action, it is important to review the history of EPA's volatility controls both leading up to and after the enactment of CAA sec. 211(h). As mentioned above, Congress enacted CAA sec. 211(h) as part of the CAA Amendments of 1990 to address the volatility of gasoline. Congress did so in the context of EPA's prior regulatory actions, under CAA sec. 211(c), which aimed to control the RVP of gasoline. EPA has historically viewed Congress's enactment of 211(h), therefore, as a codification of EPA's regulatory actions regarding RVP up to that point.
35

Accordingly, CAA sec. 211(h)(1) prohibits the sale of gasoline with an RVP in excess of 9.0 psi
36

during the high ozone season while CAA sec. 211(h)(2) allows EPA to promulgate more stringent RVP requirements for nonattainment areas. CAA sec. 211(h)(4) provides a 1.0 psi RVP allowance for “fuel blends containing gasoline and 10 percent” ethanol and recognizes the existence of the 1979 CAA sec. 211(f)(4) waiver for E10—the only ethanol blend which had received such a waiver at that time—in the “deemed to comply” provisions contained in CAA sec. 211(h)(4)(A)-(C), which are discussed in more detail below.

35
See 76 FR 44433 (July 25, 2011).

36
9.0 psi RVP was and continues to be the level of RVP for gasoline certification fuel used to certify motor vehicles.

a. Pre-Enactment Volatility Regulations

In 1987, prior to the CAA Amendments of 1990, EPA for the first time proposed limitations on the volatility of gasoline under CAA sec. 211(c), which provides EPA with general authority to regulate fuels and fuel additives. These limitations on gasoline volatility were proposed to address evaporative emissions from gasoline-fueled vehicles due to their contribution to ozone formation. The volatility of gasoline had begun rising significantly above the 9.0 psi RVP vehicle certification fuel level in the years preceding EPA's action, due to a strong economic incentive to add butane
37

to fuel due to favorable blending economics.
38

This led to very high evaporative VOC emissions from the in-use fleet of gasoline vehicles. EPA believed that matching the volatility of in-use gasoline to that of certification fuel would reduce evaporative emissions and would help ensure that the vehicles continued to have the same evaporative emissions levels in-use to the levels on which the vehicles were certified. In particular, limiting the volatility of gasoline to 9.0 psi RVP in the summer, which is the level in the indolene, a gasoline containing no ethanol, on which vehicles were certified under CAA sec. 206 at that time, would reduce emissions from all gasoline-related sources, enabling additional VOC emission reductions.
39

37
Butane, in this context, refers to a high-volatility, relatively inexpensive gasoline blendstock that gasoline refiners typically add to or remove from gasoline to control RVP.

38
52 FR 31279 (August 19, 1987).

39
See 52 FR 31274 at 31278-31287 (August 19, 1987).

At the time of the 1987 proposal, parties were primarily making E10 through “splash blending,” as described above. Adding 10 percent ethanol to gasoline, however, causes roughly a 1.0 psi RVP increase in the blend's volatility.
40

At the time, due to the limited amount of ethanol blended into gasoline, almost no low-RVP gasoline was available into which 10 percent ethanol could be splash-blended without the blended fuel exceeding the proposed RVP limit. Thus, even though the CAA sec. 211(f)(4) waiver allowed E10 to be lawfully introduced into

commerce, the lowered RVP standards had the potential to shut down the nascent ethanol blending industry.

40
Id.

To address this potential hurdle to continued ethanol blending, in the 1987 proposal, EPA included interim regulations for gasohol that allowed it to be 1.0 psi RVP higher than otherwise required for gasoline.
41

In describing our regulatory action to provide this flexibility, we refer to it as the 1-psi RVP allowance.
42

As a result, downstream blenders could add 10 percent ethanol into the gasoline that refineries had already produced without violating the proposed RVP regulations. The Agency, therefore, designed the 1-psi RVP allowance as a means to ensure that the effect of the CAA sec. 211(f)(4) waiver that was then applicable to E10 would not be nullified, as well as to address other public policy concerns, such as reducing dependence on foreign oil and making use of excess agricultural production, as referenced above. The Agency proposed that the 1-psi RVP allowance be conditioned on sampling and testing the final blend of gasoline and ethanol for RVP by all regulated parties, including downstream blenders, that elected to use the waiver.
43

41
See 52 FR 31274, 31316 (August 19, 1987).

42
See 52 FR 31316 (August 19, 1987).

43
See 52 FR 31274, proposed 40 CFR 80.27(d)(1) (August 19, 1987). See also 54 FR 11872-73 (March 22, 1989), where we declined to finalize this approach.

In 1989, EPA finalized regulations that imposed limits on the volatility of gasoline and ethanol blends as “Phase I” of a two-phase regulation under CAA sec. 211(c). EPA's regulation established a maximum RVP standard of 10.5 psi for gasoline during the high ozone season.
44

In that action, EPA also provided an RVP allowance “for gasoline-ethanol blends commonly known as gasohol” that was 1.0 psi higher than for gasoline.
45

This was finalized as an interim measure with the intent to revisit the issue in “Phase II” of the volatility regulations.
46

44
See 54 FR 11879 (March 22, 1989).

45
Id.

46
Id.

EPA's final regulations in “Phase I” provided that in order to receive the 1-psi RVP allowance, “gasoline must contain at least 9% ethanol (by volume),” and that “the ethanol content of gasoline shall be determined by use of one of the testing methodologies specified in Appendix F to this part.” The regulations also provided that “the maximum ethanol content of gasoline shall not exceed any applicable waiver conditions under section 211(f)(4) of the Clean Air Act.”
47

47
54 FR 11872-73 (March 22, 1989) (codified at 40 CFR 80.27(d)).

In “Phase I,” EPA did not place limits on the upper bound of the ethanol content, other than by providing, as quoted above, that the ethanol content shall not exceed any applicable waiver conditions under CAA sec. 211(f)(4) (and thereby implicitly incorporating any upper-bound limit imposed as a condition on any future applicable waiver). At the time, the highest permissible ethanol content under a CAA sec. 211(f)(4) waiver was 10 percent ethanol, and thus, this provision could only apply to blends containing 9-10 percent ethanol. In other words, EPA designed the 1-psi RVP allowance to allow for the continued lawful introduction into commerce of E10 and the Phase I RVP regulatory language would have automatically accommodated future increases in allowable ethanol concentration in gasoline under a CAA sec. 211(f)(4) waiver.

In June 1990, in “Phase II” of the volatility regulations, EPA established a maximum RVP standard of 9.0 psi for gasoline during the high ozone season. The regulations also established an RVP standard of 7.8 psi for gasoline during the high ozone season in both ozone attainment and nonattainment areas in the southern states of the country. EPA further maintained the 1-psi RVP allowance for blends of 10 percent ethanol and gasoline and did not modify the regulations at 40 CFR 80.27(d).
48

Thus, both the language stating that the gasoline must contain at least 9 percent ethanol, and the language stating that the maximum ethanol content of gasoline shall not exceed any applicable waiver conditions under CAA sec. 211(f)(4), remained in the regulations, effectively allowing for automatic accommodation of the 1-psi RVP allowance for increases in allowable ethanol concentration in gasoline under future CAA sec. 211(f)(4) waivers.
49

In doing so, the Agency reiterated that these regulatory provisions are intended to accommodate the importance of ethanol to the nation's energy security as well as the agricultural economy sector. The Agency also addressed air quality impacts of allowing the 1-psi RVP allowance given that a higher RVP limit for blends of 10 percent ethanol and gasoline would result in increased evaporative VOC emissions in the small part of the gasoline market attributable at that time to blended. EPA explained that the 1 psi RVP allowance “reflects the moderation in EPA's concern about negative air quality impact as well as a reluctance to threaten the motor fuel ethanol production and blending industries with collapse.”
50

48
See 55 FR 23658, 23660 (June 11, 1990).

49
Id.

50
“While some believe the industry should not exist . . . [o]ther agencies and Congress will continue to address related agricultural, trade and energy issues which have led to federal support for the existence of the gasohol industry.” 55 FR 23666 (June 11, 1990).

b. Enactment of CAA Sec. 211(h)

In November 1990, Congress enacted the CAA Amendments of 1990, including CAA sec. 211(h), the first statutory provision specifically addressing the volatility of gasoline. CAA sec. 211(h)(1) required EPA “to promulgate regulations making it unlawful . . . during the high ozone season to sell . . . or introduce into commerce gasoline with a Reid Vapor Pressure in excess of 9.0 pounds per square inch.” Further in CAA sec. 211(h)(4), Congress, following EPA's lead in the 1989 and 1990 volatility regulations, also allowed fuel blends containing gasoline and 10 percent ethanol to have 1 psi higher RVP than the RVP standard otherwise established in CAA sec. 211(h)(1). This statutory provision is referred to as the 1-psi RVP waiver.
51

CAA sec. 211(h)(4) provides the following ethanol waiver: “for fuel blends containing gasoline and 10 percent denatured anhydrous ethanol, the Reid vapor pressure limitation under this subsection shall be one pound per square inch (psi) greater than the applicable Reid vapor pressure limitations established under [CAA sec. 211(h)(1)].”

51
We also refer to the regulations at 40 CFR 80.27 as the “1-psi RVP waiver” as well.

According to legislative history, “[t]his provision was included in recognition that gasoline and ethanol are mixed after the refining process has been completed. It was recognized that to require ethanol to meet a nine pound RVP would require the creation of a production and distribution network for sub-nine pound RVP gasoline. The cost of producing and distributing this type of fuel would be prohibitive to the petroleum industry and would likely result in the termination of the availability of ethanol in the marketplace.”
52

EPA has interpreted CAA sec. 211(h) as largely a codification of our prior RVP regulations and the 1-psi RVP allowance.
53

52
S. Rep. No. 101-228, at 110 (1989) (Conf. Rep.); reprinted at 5 Leg. Hist. at 8450 (1993).

53
See 76 FR 44433 (July 25, 2011).

Further, Congress enacted a conditional defense against liability for violations of the RVP level allowed

under the 1-psi waiver by providing that full compliance “shall be deemed” with a demonstration that (A) “the gasoline portion of the blend complies with the Reid vapor pressure limitations promulgated pursuant to this subsection;” (B) “the ethanol portion of the blend does not exceed its waiver condition under subsection (f)(4) of this section;” and (C) “no additional alcohol or other additive has been added to increase the Reid Vapor Pressure of the ethanol portion of this blend.” (CAA sec. 211(h)(4)). This is referred to as the “deemed to comply” provision, or the alternative compliance mechanism for the 1-psi waiver. It is considered a statutorily mandated defense that allows regulated parties, such as downstream oxygenate blenders,
54

to demonstrate compliance with the RVP standard while taking advantage of the 1-psi waiver by meeting the specified conditions in CAA sec. 211(h)(4) in lieu of complying with the testing provisions in 40 CFR 80.27(d)(2) (1987). It also reflects Congressional response to EPA's proposed compliance testing provisions for the 1-psi RVP allowance in the 1987 proposed rulemaking, which Congress viewed as complicated and burdensome given the industry practices at the time used to produce gasohol: “the enforcement strategy recently proposed by the Agency . . . would be totally unworkable for those motor vehicle fuels which are a blend of gasoline and ethanol and which are allowed a higher RVP limit under the reported bill.”
55

54
“Oxygenate blenders” are defined in our regulations as “any person who owns, leases, operates, controls, or supervises an oxygenate blending facility, or who owns or controls the blendstock or gasoline used or the gasoline produced at an oxygenate blending facility.” An oxygenate blending facility is defined as “any facility (including a truck) at which oxygenate is added to gasoline or blendstock, and at which the quality or quantity of gasoline is not altered in any other manner except for the addition of deposit control additives.” See 40 CFR 80.2(mm) and (ll).

55
S. Rep. No. 100-231, 100th Cong. 1st Sess. at 149 (1987).

c. Implementation of CAA Sec. 211(h)(4)

Subsequent to Congress's enactment of CAA sec. 211(h)(4), EPA modified our volatility regulations to more explicitly align with the new statutory provisions, but “did not propos[e] any change to the current requirement that the blend contain between 9 and 10 percent ethanol (by volume) to obtain the one psi allowance.”
56

However, EPA did modify its regulations at 40 CFR 80.27 to clarify that “gasoline must contain denatured, anhydrous ethanol,” and that “[t]he concentration of the ethanol, excluding the required denaturing agent, must be at least 9% and no more than 10% (by volume) of the gasoline” (where, as quoted above, the previous version of the regulations provided that gasoline “must contain at least 9% ethanol” to qualify for the 1-psi RVP allowance and thus did not set an upper limit on ethanol content). At that time, we read both the statutory 1-psi waiver provision and the “deemed to comply” provision in CAA sec. 211(h)(4) together to limit the volume concentration of ethanol subject to the CAA sec. 211(h)(4) waiver to between 9 and 10 percent, as only blends of gasoline and up to 10 percent ethanol had a waiver under CAA sec. 211(f)(4) at the time EPA promulgated the RVP requirements.
57

We further stated that “this is consistent with Congressional intent [because] the nature of the blending process . . . further complicates a requirement that the ethanol portion of the blend be exactly 10 percent ethanol.”
58

For these reasons, the 1-psi waiver reflected Congressional recognition of the existing CAA sec. 211(f)(4) waiver for E10; Congress intended that the 1-psi waiver from the 9.0 psi RVP requirement in CAA sec. 211(h)(1) would allow for E10's continued lawful introduction into commerce.
59

56
See 56 FR 64708 (December 12, 1991).

57
Id.

58
Id.

59
Id.

In issuing implementing regulations at 40 CFR 80.28(g)(8) related to the “deemed to comply” provision in CAA sec. 211(h)(4), EPA allowed parties to demonstrate a defense against liability by making the showings provided in CAA sec. 211(h)(4), stating that “EPA believes this defense is limited to ethanol blends which meet the minimum 9 percent requirement in the regulations and the maximum 10 percent requirement in the waivers under section 211(f)(4).”
60

60
Id. and 40 CFR 80.28(g).

4. Background of E10 and E15 CAA Sec. 211(f)(4) Waivers

CAA sec. 211(f)(1) makes it unlawful for “any manufacturer of any fuel or fuel additive” to first introduce into commerce, or to increase the concentration in use of, any fuel or fuel additive for use by any person in motor vehicles manufactured after MY1974, which is not substantially similar (commonly referred to as “sub sim”) to any fuel or fuel additive used in the certification of any MY1975, or subsequent model year, vehicle or engine under CAA sec. 206. Fuels or fuel additives that are not sub sim to a fuel or fuel additive used in certification cannot be introduced into commerce unless EPA has granted a waiver under CAA sec. 211(f)(4). CAA sec. 211(f)(4) provides that upon application of any fuel or fuel additive manufacturer, the Administrator may waive the prohibitions of CAA sec. 211(f)(1) if the Administrator determines that the applicant has established that such fuel or fuel additive, or a specified concentration thereof, will not cause or contribute to a failure of any emission control device or system (over the useful life of the motor vehicle, motor vehicle engine, nonroad engine, or nonroad vehicle in which such device or system is used) to achieve compliance by the vehicle or engine with the emission standards to which it has been certified pursuant to CAA sec. 206 and 213(a).

In 1978, a waiver application was submitted for gasoline containing ethanol at 10 percent by volume. EPA did not act to grant or deny the application for a waiver for E10, and consequently, under the statutory scheme as it existed at that time, the waiver was deemed granted by operation of law.
61

Thus, E10 was granted a waiver under CAA sec. 211(f)(4) without any conditions, in contrast to other CAA sec. 211(f)(4) waivers, which included, for example, conditions on fuel characteristics such as RVP.
62

61
See 44 FR 20777 (April 6, 1979).

62
See,
e.g.,
“Fuels and Fuel Additives; Waiver Application,” Octamix Waiver, 53 FR 3636 (February 8, 1988).

For E15, EPA granted partial waivers under CAA sec. 211(f)(4) in 2010 and 2011.
63

In March 2009, Growth Energy and 54 ethanol manufacturers submitted an application to EPA to grant a waiver under CAA sec. 211(f)(4) to allow E15 for use in all vehicles, engines, and equipment (“the E15 waiver request”). On October 13, 2010, EPA partially approved the E15 waiver request to allow the introduction of E15 into commerce for use in MY2007 and newer light-duty motor vehicles subject to certain waiver conditions.
64

Subsequently, on January 21, 2011, EPA extended this partial waiver to include MY2001-2006 light-duty motor vehicles after receiving and analyzing additional U.S. Department of Energy (“DOE”) test data and finding that E15 will not cause or contribute to a failure to achieve compliance with the emissions standards to which these vehicles were certified over their useful lives.
65

EPA also denied the waiver request for MY2000 and older light-duty motor

vehicles, as well as all model year heavy-duty gasoline engines and vehicles, highway and off-highway motorcycles, and nonroad engines, vehicles, and equipment. This denial was based on EPA's engineering analysis that E15 could adversely affect the emissions and emissions controls of vehicles, engines, and equipment not covered by the partial waivers and that the applicants had not provided sufficient data or other information to demonstrate that E15 would not cause or contribute to a failure to achieve compliance with the emissions standards to which these vehicles, engines, and equipment were certified over their full useful lives, as required by CAA sec. 211(f)(4).

63
See 75 FR 68094 (November 4, 2010) and 76 FR 4662 (January 26, 2011), respectively.

64
See 75 FR 68094 (November 4, 2010).

65
See 76 FR 4662 (January 26, 2011).

In the October 2010 waiver, for MY2007 and newer motor vehicles, EPA also concluded that the data and information show that E15 will not lead to violations of evaporative emissions standards, so long as the fuel does not exceed an RVP of 9.0 psi in the summer.
66

EPA imposed a condition that allows fuel manufacturers to introduce E15 into commerce so long as the E15 does not have an RVP “in excess of 9.0 psi during the time period from May 1 to September 15.”
67

Subsequently, in the January 2011 waiver, EPA imposed identical waiver conditions for MY2001-2006 motor vehicles, including the requirement that the fuel not exceed an RVP of 9.0 psi in the summer, based on the same conclusion.
68

66
See 75 FR 68149-68150 (November 4, 2010).

67
See 75 FR 68149 (November 4, 2010).

68
See 76 FR 4682-4683 (January 26, 2011).

Taken together, these partial waivers allow E15 to be used in MY2001 and newer light-duty motor vehicles subject to particular waiver conditions, including fuel quality conditions and conditions on the sale and use of E15. These waiver conditions include the prohibition on the use of E15 in pre-MY2001 motor vehicles, in addition to all model year heavy-duty gasoline engines or vehicles, or motorcycles, as well as any nonroad engines or nonroad vehicles. The waiver conditions also place limitations on the ethanol that can be added (both the concentration and quality),
69

as well as a condition that the RVP of the final fuel not exceed 9.0 psi.
70

The waiver conditions also require fuel and fuel additive manufacturers to submit to EPA a misfueling mitigation plan describing all reasonable precautions for ensuring E15 is only used in MY2001 and newer motor vehicles, as described in the waiver conditions.
71

To help facilitate the implementation of the waiver conditions and place requirements on parties other than fuel and fuel additive manufacturers, EPA promulgated the Misfueling Mitigation Rule in 2011, under CAA sec. 211(c), subsequent to the E15 partial waiver decisions.
72

The MMR imposed fuel dispenser labeling, PTD, and compliance survey requirements on parties that make and distribute E15. EPA promulgated the MMR “to mitigate misfueling with E15 that lawfully has been introduced into commerce under the terms of the waiver[s]. The waiver conditions, and implementation of the waiver conditions, address a closely related but different issue—when, how and by whom E15 can be introduced into commerce under the partial waiver decisions. This rule only addresses the issue of mitigating misfueling in the event E15 is lawfully introduced into commerce under the partial waivers, and is issued under EPA's authority under section 211(c).”
73

The MMR also applied EPA's prior interpretation of the 1-psi waiver in CAA sec. 211(h)(4) as not applying to E15 and adopted certain regulations designed to effectuate that interpretation.
74

In this action, EPA is interpreting CAA sec. 211(h)(4) and also amending the regulations to implement that interpretation.

69
For example, the ethanol used to make E15 must meet ASTM D4806-10 specifications for ethanol quality. See ASTM D4806-10, “Standard Specification for Denatured Fuel Ethanol for Blending with Gasolines for Use as Automotive Spark-Ignition Engine Fuel,” ASTM International, West Conshohocken, PA, 2010.

70
See 75 FR 68094 (November 4, 2010) and 76 FR 4662 (January 26, 2011). This RVP limit is identical to the limitation under CAA sec. 211(h)(1) of 9.0 psi RVP during the high ozone season. The high ozone season was defined by the Administrator via regulation to mean the period from June 1 to September 15 of any calendar year.

71
See 76 FR 4662, 4582 (January 26, 2011).

72
See 76 FR 44406 (July 25, 2011).

73
See 76 FR 44406, 44440 (July 25, 2011).

74
As discussed further in Section II.B, in promulgating regulations following the enactment of CAA sec. 211(h)(4), EPA interpreted 211(h)(4) to apply to gasoline-ethanol blends containing between 9 and 10 percent ethanol. See 56 FR 64708 (December 12, 1991).

B. Interpretation of CAA Sec. 211(h)(4)

In this action, we are finalizing our proposed change in interpretation of CAA sec. 211(h)(4). We find that the statutory language at CAA sec. 211(h)(4) is ambiguous. We last interpreted this section in 2011, and in this action we are changing our interpretation. Our new interpretation is consistent with the text of the provision, its context within CAA sec. 211(h), and Congressional intent. It is also reasonable in light of the changed circumstances since we last interpreted this provision in 2011, and in light of EPA's determination that it is appropriate to provide E15 the 1-psi waiver.

As discussed in Section II.A.2, gasoline-ethanol blends in the marketplace have increased such that the in-use gasoline supply is now almost entirely E10. E15 is now present in the marketplace, but the current limitation of the applicability of the 1-psi waiver to only E10 in most CG areas is one of several hurdles to the continued entry of E15 into the marketplace (discussed in more detail in Section II.E).
75

The same market limitation that prompted EPA to provide the 1-psi waiver for E10 nationwide in 1989 currently exists for E15 in most CG areas. Namely, in order for E15 to be distributed in most CG areas, it requires the production and distribution of a higher cost low-RVP CBOB into which 15 percent ethanol could be blended while still meeting the 9.0 psi RVP standard for gasoline during the high ozone season.
76

This is because E10 currently receives the benefit of the 1-psi waiver, but E15 does not. As a result, some parties for which other constraints (
e.g.,
compatible service station equipment) are not of concern might still not be able to produce and distribute E15, given the difficulty and cost associated with obtaining CBOB that when blended to produce E15 would meet the 9.0 psi RVP during the summer. With the 1-psi waiver, 15 percent ethanol could be blended using the same CBOBs currently being distributed for use with 10 percent ethanol, year-round.
77

This action, therefore, is a response to changed circumstances since the Agency's promulgation of RVP regulations in 1990, which pre-dates EPAct in 2005 and EISA in 2007, and since we last interpreted CAA sec. 211(h)(4) in 2011. Further, because blending 15 volume percent ethanol into gasoline would result in an approximate 1.0 psi RVP increase, similar to E10, the resultant RVP for any blended fuel would be no higher than the RVP standard plus the 1-psi waiver, which is currently 10.0 psi for a gasoline-ethanol blended fuel

containing 10 percent ethanol.
78

This interpretation is consistent with the plain language of CAA sec. 211(h) and with Congress' intent to promote ethanol blending into gasoline, and is not expected to cause significant increases in emissions as compared to the current market situation with E10 as discussed in Section II.F.

75
See,
e.g.,
Prime the Pump: Driving Ethanol Gallons, available at:
https://growthenergy.org/wp-content/uploads/2019/01/MDEV-19022-PTP-Overview-2019-01-25.pdf.

76
Some parties have access to low RVP blendstocks created for low-RVP areas and RFG areas. However, these blendstocks are not widely distributed in all areas. For a list of state low-RVP areas, see EPA's “State Fuels” website available at:
https://www.epa.gov/gasoline-standards/state-fuels.

77
In reformulated gasoline areas (approximately one-third of gasoline nationwide) and certain other areas that do not provide a 1-psi waiver for E10, E15 can already be blended using the same blendstocks used for E10.

78
This is true for E15 made from blends of certified gasoline or BOB and ethanol. This volatility relationship is not maintained when other products (
e.g.,
natural gas liquids) are blended to make E15.

In the MMR, we interpreted CAA sec. 211(h)(4) (which affords a 1-psi waiver to “fuel blends containing gasoline and 10 percent denatured anhydrous ethanol”) as providing a 1-psi waiver for fuel blends of gasoline and at least 9 volume percent ethanol and not more than 10 volume percent ethanol despite having given E15 a partial CAA sec. 211(f)(4) waiver from sub sim. As previously explained, this interpretation was premised on a reading of regulations and statutory provisions that reflected the existence of a CAA sec. 211(f)(4) waiver for E10, which was the highest available ethanol content in the gasoline marketplace at the time of the 1990 Amendments to the CAA, and we did not alter this interpretation based on the existence of the E15 CAA sec. 211(f)(4) partial waivers. In that action, we read CAA secs. 211(h)(4), including the “deemed to comply” provision, and 211(h)(5) together to only apply the 1-psi waiver for E10. In this action, we are adopting a new interpretation of CAA sec. 211(h)(4), under which the provision specifies the minimum ethanol content that fuel blends containing ethanol and gasoline must contain in order to qualify for the 1-psi waiver. We are finalizing a new interpretation of this statutory provision that would allow the 1-psi waiver for gasoline containing at least 10 percent ethanol. This reading, which harmonizes all relevant provisions, removes the current, anomalous result whereby a sole ethanol blend (E10) receives the 1-psi waiver, when market conditions have changed over time such that E15 is an increased presence in the marketplace. Specifically, it would mean that the 1-psi waiver is equally applicable to gasoline-ethanol blends the agency finds are sub sim under CAA sec. 211(f)(1) and those gasoline-ethanol blends that receive or have received a CAA sec. 211(f)(4) waiver. At present, these are blends up to 15 percent ethanol, based on: (1) EPA's prior issuance of partial waivers in 2010 and 2011 under CAA sec. 211(f)(4) for E15; and (2) the finding in this rulemaking that E15 is sub sim to Tier 3 E10 certification fuel.
79

79
See discussion at Section II.D.1, infra, for further discussion of the regulatory changes associated with this changed interpretation.

Moreover, it is well settled that EPA has inherent authority to reconsider, revise, or repeal past decisions to the extent permitted by law so long as we provide a reasoned explanation. Many commenters pointed to EPA's previous interpretation of CAA sec. 211(h)(4) in the volatility regulations promulgated after the CAA Amendments of 1990, and the MMR as reasons why EPA's new interpretation is flawed. We do not find these arguments persuasive because of EPA's inherent authority to reconsider, revise, or repeal past decisions to the extent permitted by law. This authority exists in part because EPA's interpretations of the statutes we administer “are not carved in stone.”
80

An agency “must consider varying interpretations and the wisdom of its policy on a continuing basis.”
81

This is true when, as is the case here, review is undertaken “in response to changed factual circumstances or a change in administration.”
82

EPA must also be cognizant where we are changing a prior position that the revised position is permissible under the statute and must articulate a reasoned basis for the change.
83

In this case, EPA's interpretation of the text of CAA sec. 211(h)(4) is a reasonable one, and takes into account changed circumstances that have arisen since we issued the partial waivers for E15 in 2010 and 2011.

80

Chevron U.S.A. Inc.
v.
NRDC, Inc.,
467 U.S. 837, 863 (1984).

81
Id. at 863-64.

82

Nat'l Cable & Telecomms. Ass'n
v.
Brand X internet Servs.,
545 U.S. 967, 981 (2005). See also
Nat'l Ass'n of Home Builders
v.
EPA,
682 F.3d 1032, 1043 (DC Cir., 2012) (change in administration is a “perfectly reasonable basis” for an agency's reappraisal of its regulations and programs).

83

FCC
v.
Fox Television Stations, Inc.,
556 U.S. 502, 515.

The Clean Air Act does not define the term “containing” in the phrase “containing gasoline and 10 percent denatured anhydrous ethanol,” and at proposal, therefore, EPA relied on the dictionary meaning that is reasonable, sensible and provides meaning to the reading of CAA sec. 211(h)(4). As explained in more detail below and in the response to comments (RTC) document accompanying this action, we are interpreting this term to establish a lower limit on the minimum ethanol content required for the 1-psi waiver in CAA sec. 211(h)(4). This interpretation applies to 211(h)(4) in its entirety, and 211(h)(5). Most of the commenters that argued for limiting the 1-psi waiver only selected their preferred meaning of “containing” without addressing whether that definition fit within the statutory scheme of CAA sec. 211(h)(4) or makes sense in this context and we have addressed these comments in Section 1.2.2.1 of the RTC document. Even when other potential meanings of the term are considered, EPA's interpretation and definition are eminently reasonable, make the most sense and provide meaning to the reading of CAA sec. 211(h)(4) in light of the current circumstances with respect to E15.
84

84
See
General Dynamics Land Systems
v.
Cline,
540 U.S. 581, 596 (2004) (finding that “age” has several commonly understood meanings which should be interpreted in the context used).

As explained at proposal, Congress enacted CAA sec. 211(h)(4) when 10 percent ethanol was the highest permissible ethanol content in gasoline under the 1978 CAA sec. 211(f)(4) waiver that allowed for its introduction into commerce. At that time, there were no other CAA sec. 211(f)(4) waivers for gasoline-ethanol blends. As also explained at proposal, Congress promulgated the “deemed to comply” provision as an enforcement mechanism for the 1-psi waiver. Of relevance is the criterion that “the ethanol portion of the blend does not exceed its waiver condition under subsection (f)(4).”
85

In 2011, when EPA declined to extend the 1-psi waiver to E15, the agency's interpretation was premised largely on this additional criterion for the 1-psi waiver.
86

Nothing in these prior agency interpretations, however, sheds light on how to read “containing,” at the current time.

85
CAA sec. 211(h)(4)(B).

86
See 76 FR 44406, 44433-35 (July 25, 2011).

At proposal, we also explained that lack of modifiers in the phrase “fuel blends containing gasoline and ten percent ethanol,” supports our reading that Congress established a lower limit on the minimum ethanol content for the 1-psi waiver rather than an upper limit on the ethanol content. We then explained that Congress could legislate and would have likely employed terms connoting a maximum ethanol content limit in CAA sec. 211(h)(4) similar to, for example, CAA secs. 211(k) and (m) had Congress intended for the ethanol content to be an upper bound. CAA secs. 211(k) and (m) are mandatory gasoline content provisions that also employ specific units of measurement as an indication of measurement precision. CAA sec. 211(m)(2) provides that “gasoline is to be blended to contain not less than 2.7 percent oxygen by weight.” Section 211(k)(3)(A)(1)

provides that “[t]he benzene content of reformulated gasoline shall not exceed 1.0 per cent by volume;” section 211(k)(3)(A)(ii) provides that “[t]he aromatics hydrocarbon content of the reformulated gasoline shall not exceed 25 percent by volume.” We further noted that CAA sec. 211(h)(1) employs the modifier “in excess” as compared to CAA sec. 211(h)(4). But Congress notably did not use any modifier in CAA sec. 211(h)(4), which sets out a relaxation of a mandatory provision. It, therefore, appears that Congress made a deliberate choice—where Congress sought to impose mandatory fuel content requirements, such as in CAA secs. 211(k) and (m), it utilized modifiers as compared to where it set out an allowance or relaxation of a mandatory requirement such as CAA sec. 211(h)(4) for RVP, where it did not utilize modifiers. In other words, where Congress intended to impose a “no greater than” requirement addressing fuel properties, it explicitly did so. In contrast, in CAA sec. 211(h)(4), Congress included no such language.

Additionally, Congress employed modifiers where fuel content or properties were of a nature subject to precise determination, but as also shown elsewhere in this preamble, Congress promulgated the deemed to comply provision in response to measurement imprecision resulting from splash blending ethanol into gasoline. These provisions thus reflect a deliberate and intentional scheme and confirm our view that Congress legislates and the omission of modifiers in CAA sec. 211(h)(4) was also deliberate and intentional.

Given that this provision lacks modifiers for the term “containing,” in contrast to the other statutory provisions referenced above, there is support for our reading that this term as employed in the phrase “fuel blends containing gasoline and ten percent ethanol” is ambiguous and provides room for EPA to make interpretive and policy choices.

It is therefore permissible, and supported by the text of the statute, where Congress has used only the ambiguous term “containing” in CAA sec. 211(h)(4), for EPA to interpret “containing” to mean “containing at least.” Given this ambiguity, EPA's construct only needs to be a reasonable one and neither the best nor only reading of “containing.” (“Even if the statute does not compel EPA's reading, and indeed even if EPA's reading is not the better reading, the statute at a minimum is sufficiently ambiguous on this point to permit EPA's reading.”)
87

Where, as in this instance, EPA is confronted with a reading of a provision that was enacted at the time the highest permissible ethanol content under EPA's then-current regulations was E10, this connotation of “containing” as specifying a minimum limit or floor on the ethanol content for fuel blends to qualify for the 1-psi waiver in CAA sec. 211(h)(4) is a permissible reading that gives meaning to the phrase “fuel blends containing gasoline and 10 percent denatured anhydrous ethanol.” It is neither strained nor contrived but rather allows EPA as the agency tasked with administering the Clean Air Act to give effect and meaning to the terms of a relevant provision. (“The power of an administrative agency to administer a congressionally created . . . program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress.”)
88

87

NRDC
v.
EPA,
749 F.3d 1055 (D.C. Cir. 2014)

88

Chevron U.S.A. Inc.
v.
NRDC, Inc.,
467 U.S. 837, 843 (1984).

We are interpreting this language as establishing a lower limit, or floor, on the minimum ethanol content for a 1-psi waiver from the volatility requirements expressed in CAA sec. 211(h)(1), rather than an upper limit on the ethanol content. As explained at proposal, we can look to the use of the term “containing” in its ordinary sense, given the purpose and context of CAA sec. 211(h)(4) described above. “Containing” is defined as “to have within: hold.”
89

Under this interpretation, the statute sets the minimum ethanol content, such that all fuels which contain at least 10 percent ethanol may receive the 1-psi waiver, including blends that contain more than 10 percent ethanol.
90

Therefore, E15, which has within it 10 percent denatured anhydrous ethanol, meets this definition, and should receive the 1-psi waiver specified in CAA sec. 211(h)(4).
91

89
Webster's Third New International Dictionary 491 (unabridged ed. 1981). See also American Heritage Dictionary online 2019, defining “containing” as “to have within; hold.”

90
We are not changing our interpretation of the term 10 volume percent, which includes as little as 9 volume percent, to continue to provide the necessary blending flexibility for E10. Comments requesting that EPA revise its interpretation to exclude ethanol blends containing between 9 and 10 volume percent ethanol are outside the scope of this action, since EPA proposed only to interpret CAA sec. 211(h)(4) to apply to blends higher than 10 volume percent ethanol, and did not propose to revise its interpretation that blends containing 9 volume percent ethanol also receive the 1-psi waiver. Moreover, the text of CAA sec. 211(h)(4) encompasses E10, and, as explained in regulations implementing CAA sec. 211(h)(4), we stated that requiring exactly 10 volume percent ethanol “would place a next to impossible burden on ethanol blenders,” and that “[t]he nature of the blending process itself . . . further complicates a requirement that the ethanol portion of the blend be exactly 10 percent ethanol.” See 56 FR 24245 (May 29, 1991).

91
CAA sec. 211(h)(5) also contains the language “fuel blends containing gasoline and ten percent denatured anhydrous ethanol.” Our changed interpretation of CAA sec. 211(h)(4) also has implications for CAA sec. 211(h)(5), which allows states to opt out of the 1-psi wavier provided by CAA sec. 211(h)(4) for particular areas upon a showing that the 1-psi waiver will increase emissions that contribute to air pollution. Because the language in CAA sec. 211(h)(5) pertaining to the 1-psi waiver is identical to the language in CAA sec. 211(h)(4), and both refer to the 1-psi waiver, we believe that both sections should be read together to apply the 1-psi waiver to E10 and E15. Accordingly, we interpret CAA sec. 211(h)(5) to allow states to opt out of the 1-psi waiver provided by CAA sec. 211(h)(4) for fuel blends containing gasoline and 9-15 percent denatured anhydrous ethanol.

When EPA issued implementing regulations under both CAA sec. 211(c) prior to the enactment of CAA sec. 211(h), and under CAA sec. 211(h), once that provision was enacted, those regulations reflected the highest permissible ethanol content at the time they were issued, which was 10 percent ethanol under a CAA sec. 211(f)(4) waiver. In describing the volatility regulations promulgated under CAA sec. 211(c), we stated that the 1-psi waiver is “for blends of gasoline with about 10 percent ethanol, or gasohol.”
92

In regulations, we codified the CAA sec. 211(f)(4) waiver, providing that “[t]he maximum ethanol content . . . in gasoline shall not exceed any applicable waiver conditions under CAA sec. 211(f)(4) waiver.”
93

Thus, EPA's actions merely reflected the situation at the time the regulations were promulgated. Additionally, prior EPA statements on the imprecise nature of gasoline-ethanol blending also support the view that neither Congress nor EPA intended to limit ethanol content for the 1-psi waiver. “The nature of the blending process . . . complicates a requirement that the ethanol portion of the blend be exactly 10 percent ethanol.”
94

92
55 FR 23660 (June 11, 1990).

93
55 FR 23660 (June 11, 1990) and 40 CFR 80.27(d)(2) (1987).

94
56 FR 24245 (May 29, 1991).

The phrase “fuel blends containing gasoline and ten percent ethanol” is ambiguous, but as previously discussed, EPA as the agency tasked with implementing CAA sec. 211(h)(4) is interpreting this provision in a reasonable manner, which is consistent with the reading articulated in the House bill,
i.e.,
gasoline that contains at least 10 percent ethanol receives the 1-psi waiver.
95

EPA is not aware of any conference or committee reports, or

other legislative history, explaining why Congress ultimately enacted the language in the CAA Amendments in lieu of the language in the House Bill and commenters have not provided any such explanation. There is no discussion, for example, of whether Congress felt that “containing” was sufficiently specific, or whether, as discussed above, the nature of the blending process was likely to make a requirement of “at least” ten percent difficult to meet in practice. Therefore, we do not find the failure to adopt the “containing at least 10 percent” language in the final bill persuasive as to whether Congress intended that meaning to be precluded under the statute.

95
See
Edison Electric Inst.
v.
EPA,
2 F.3d 438, 451 (D.C. Cir. 1993) (holding that “the deletion of a word or phrase in the throes of the legislative process does not ordinarily constitute, without more, evidence of a specific legislative intent.”).

Our interpretation is also supported by the purpose of the 1-psi waiver provision. The Senate Report published along with the enactment of the 1990 CAA Amendments and CAA sec. 211(h)(4) also describes both the purpose of including CAA sec. 211(h)(4), and general language about ethanol use in the fuel supply. The report states that the 1-psi waiver was:

included in recognition that gasoline and ethanol are mixed after the refining process has been completed. It was recognized that to require ethanol to meet a 9 pound RVP would require the creation of a production and distribution network for sub-nine pound RVP gasoline. The cost of producing and distributing this type of fuel would be prohibitive to the petroleum industry and would likely result in the termination of the availability of ethanol in the marketplace. Under this provision, the RVP limitations promulgated pursuant to this subsection for such ethanol/gasoline blends shall be one pound per square inch greater than the applicable Reid vapor pressure which apply to gasoline. Senate Report 101-228, at 3495.

Finally, the Senate report states that the 1-psi waiver would “allow ethanol blending to continue to be a viable alternative fuel, with its beneficial environmental, economic, agricultural, energy security and foreign policy implications.”
96

Like E10 at the time of enactment, E15 currently requires the production and distribution of low-RVP blendstock and the cost of producing and distributing this type of blendstock has limited the availability of E15. While this legislative history does not speak to the meaning of the word “containing,” it does articulate congressional intent in enacting the provision, recognizing the role for ethanol in the marketplace. This report and other relevant legislative history do not explicitly address whether CAA sec. 211(h)(4) should apply to gasoline-ethanol blends that contain at least 10 percent ethanol and are sub sim under CAA sec. 211(f)(1) or have a waiver under CAA sec. 211(f)(4), but, as explained at proposal, the reasons it gives for extending the 1-psi waiver to gasoline-ethanol blends up to 10 percent ethanol would today similarly weigh in favor of interpreting the 1-psi waiver to apply to E15, given that Congressional action in CAA sec. 211(h) was largely a ratification of agency regulations for RVP (including the 1-psi waiver) that were initiated in 1987, under CAA sec. 211(c).

96
See S. Rep. No. 101-228 at 110 (December 20, 1989).

Our primary consideration has been to balance the goals of limiting gasoline volatility and ensure that the addition of ethanol does not cause the exceedance of the maximum RVP standard, while also promoting the use of ethanol consistent with the purpose of CAA sec. 211(h)(4). As previously explained, blending gasoline with at least 10 percent ethanol results in an approximate 1.0 psi RVP increase. It does not result in “different volatility levels than already recognized by EPA as adding less than 1.0 psi RVP to gasoline.”
97

Similarly, we also expect that E15 produced from the same BOB as E10 would have a similar (if not slightly lower) RVP than E10 and thus, would not exceed the current 10.0 psi RVP limit.
98

Therefore, we are confident that relative evaporative emissions effects for E15 would largely be similar or slightly less than those for E10, as discussed in Section II.F.

97
Clean Air Act Amendments: Hearings on H.R. 2521, H.R. 3054 and H.R. 3196 Before the Subcommittee on Health and the House Committee on Environment and Committee On Energy and Commerce, 100th Cong. 1st Sess. (1987) (statement of Eric Vaughn, President and CEO of renewable Fuels Association).

98
“Determination of the Potential Property Ranges of Mid-Level Ethanol Blends.” American Petroleum Institute, Washington, DC. April 2010.

In sum, the primary consideration underlying the 1-psi waiver is to limit gasoline volatility while promoting the use of ethanol due to its importance to energy security and the agricultural sector. The interpretation in this action will continue to further these policy concerns given that agency action will now afford similar treatment to all gasoline-ethanol blends.

C. Interpretation of “Substantially Similar” for Gasoline

In this action, we are finalizing an interpretative rule which determines that E15 with an RVP of 9.0 psi is substantially similar to fuel used to certify Tier 3 light-duty vehicles (
i.e.,
E10 at 9.0 psi RVP) under CAA sec. 211(f)(1).
99

This new interpretation of sub sim would allow fuel manufacturers to introduce into commerce under CAA sec. 211(f)(1) E15 for use in MY2001 and newer light-duty motor vehicles because we find that E15 would have similar effects on the emissions (exhaust and evaporative), materials compatibility, and driveability when compared to Tier 3 E10 certification fuel when used in MY2001 and newer light-duty motor vehicles.
100

We are making this determination for E15 solely in order to provide E15 produced by fuel and fuel additive manufacturers the CAA sec. 211(h)(4) 1-psi waiver.

99
EPA does not have volatility standards on gasoline outside of the regulatory control period (May 1 through September 15), which includes the high ozone season (June 1 through September 15). For both the 2008 definition and the new definition, gasoline introduced into commerce outside of the regulatory control period is considered sub sim if it meets any gasoline volatility class in ASTM D4814. Tier 3 vehicles must be certified on fuels described at 40 CFR 1065.710(b). For purposes of this preamble, we refer to certification test fuel used in certification testing for Tier 3 motor vehicles that contains 10 volume percent ethanol as “Tier 3 E10 certification fuel.” Tier 3 E10 certification fuel has an RVP of approximately 9.0 psi.

100
Auto manufacturers certified some light-duty motor vehicles using Tier 3 E10 certification fuel as early as MY2017 and almost all auto manufacturers must certify their light-duty motor vehicles using Tier 3 E10 certification fuel by MY2020.

Additionally, we are not making this determination for E15 for use in MY2000 and older motor vehicles, heavy-duty gasoline engines and vehicles, on and off-highway motorcycles, and nonroad engines, vehicles, and equipment as we have determined that E15 is not “substantially similar” to Tier 3 E10 certification fuel when used in these vehicles, engines, and equipment.
101

Our technical justification for doing so is provided in Sections II.C.6-8.

101
For purposes of this preamble, nonroad engines, vehicles, and equipment (including motorcycles and marine engines) are referred to as “nonroad products.”

This determination would make it lawful for any fuel or fuel additive manufacturer to make and introduce into commerce E15 at 10.0 psi RVP during the summer without the use of the E15 waivers under CAA sec. 211(f)(4). In conjunction with our interpretation of CAA sec. 211(h)(4) described in Section II.B, this would allow all parties the ability to lawfully introduce into commerce E15 at 10.0 psi RVP from May 1 through September 15 for use in MY2001 and newer light-duty vehicles, and is needed to effectuate the 1-psi waiver provided for E15 under our revised interpretation of CAA sec. 211(h)(4).
102

102
Without the sub sim determination, only parties who are not fuel or fuel additive

manufacturers as defined in 40 CFR 79.2, as discussed in the NPRM and in Section II.D.3, could introduce E15 into commerce at 10.0 psi in the summer.

Prohibitions on the use of E15 in all other on-road and non-road products that currently apply through regulations established under CAA sec. 211(c) remain in place, and parties that make and distribute E15, and ethanol for use in producing E15, would still need to satisfy the MMR requirements under 40 CFR part 80, subpart N. However, we are also including parameters within our definition of sub sim that fuel and fuel additive manufacturers take reasonable precautions to ensure that E15 is only used in vehicles, engines, and equipment for which E15 is sub sim to Tier 3 E10 certification fuel. This includes submission to EPA for approval of a misfueling mitigation plan as previously required under the partial waivers and discussed further in Section II.C.9.
103

This section outlines the background and rationale for our proposed interpretative rulemaking.

103
Companies that already have an approved misfueling mitigation plan under the E15 CAA sec. 211(f)(4) waivers will not need to submit for approval a separate plan under the sub sim interpretative rule in this action.

1. Certification Fuels

Historically, two fuels are utilized in EPA's emissions standards certification of gasoline-powered vehicles and engines: (1) Standardized gasoline with controlled parameters to ensure consistency across vehicle and engine certification used in emissions testing, and (2) commercially available mileage accumulation fuels used to ensure in-use durability of exhaust and evaporative emissions controls.
104

Historically, the fuel used in emissions testing (“certification test fuel”) contained no oxygenates (
e.g.,
ethanol) and was often referred to by its brand name, “indolene.”

104
See 46 FR 38582 (July 28, 1981).

In the 2014 Tier 3 rulemaking, we updated the certification test fuel for Tier 3 certified motor vehicles and changed the certification test fuel from E0 to E10 to reflect the widespread use of E10 in the marketplace.
105

The requirement to use Tier 3 E10 certification fuel may have applied as early as MY2015 if a manufacturer elected to comply early with the Tier 3 vehicle emissions standards, but the requirement to use E10 in at least some vehicles began with MY2017. Almost all MY2020 and newer vehicles must be certified for emissions testing with Tier 3 E10 certification fuel, with some exceptions for small volume vehicle manufacturers, which must use Tier 3 E10 certification fuel by MY2022.

105
See 79 FR 23414 (April 28, 2014).

Service accumulation fuel for durability must be representative of commercially-available gasoline
106

and evaporative emissions durability must “employ gasoline fuel for the entire mileage accumulation period that contains ethanol in, at least, the highest concentration permissible in gasoline under federal law and that is commercially available in any state in the United States.”
107

Since MY2004, service accumulation fuel used for evaporative system aging must contain the highest concentration of ethanol available in the market. After EPA partially granted the waivers for E15 in 2010 and 2011, we notified manufacturers in early 2012 that new evaporative emission families must be aged on E15 under 40 CFR 86.1824-08(f)(1).
108

We believe that auto manufacturers began evaporative system aging on E15 as early as MY2014.

106
See 40 CFR 86.113-15(a)(5).

107
See 40 CFR 86.1824-08(f)(1).

108
As described in 40 CFR 86.1803-01, an evaporative/refueling emissions family is “the basic classification unit of a manufacturers' product line used for the purpose of evaporative and refueling emissions test fleet selection and determined in accordance with § 86.1821-01.” This allows manufacturers of motor vehicles to group models that have similar evaporative emission control systems into a single family for purposes of certifying all models within the family to applicable evaporative emissions standards.

2. History of “Substantially Similar” Interpretations

EPA has issued four interpretative rules that defined “substantially similar” for gasoline used in all gasoline-fueled vehicles. These interpretative rules describe the types of unleaded gasoline that are considered substantially similar to the unleaded gasoline utilized in our vehicle and engine certification programs, and place limits on a gasoline's chemical composition and physical properties, including the types and amount of alcohols and ethers (oxygenates) that may be added to gasoline. Fuels that are found to be substantially similar to certification fuels may be introduced into commerce. Each of our past interpretative rules provided an allowance for oxygenates within the gasoline. We last issued an interpretative rule on the phrase “substantially similar” for gasoline in 2008.
109

In that rulemaking, we allowed for the introduction into commerce of gasoline with modified testing procedures for introduction into commerce in Alaska. The current substantially similar interpretative rule for unleaded gasoline allows oxygen content up to 2.7 percent by weight for certain ethers and alcohols. Despite having changed certification test fuel to include 10 volume percent ethanol, prior to this proposed action, we have not addressed what should be considered substantially similar to Tier 3 E10 certification fuel utilized in Tier 3 light-duty vehicle certification.

109
See 73 FR 22281 (April 25, 2008).

In defining what fuels are sub sim to certification fuels, we have listed general physical and chemical characteristics, such as oxygen content, after determining that fuels and fuel additives meeting these general “sub sim” characteristics will not adversely affect emissions. In our past interpretations defining what physical and chemical characteristics are necessary to make a fuel or fuel additive “sub sim” to certification test fuel, we have taken three primary factors into account: (1) Emissions, (2) materials compatibility, and (3) driveability.
110 111

110
See 56 FR 5352 (February 11, 1991).

111
For example, we have interpreted that only fuels and fuel additives with a chemical composition of carbon, hydrogen, oxygen, nitrogen, and sulfur (CHONS) are sub sim under 211(f)(1). Non-CHONS chemical compositions of fuels and fuel additives can impair emission controls resulting in increased emissions or ultimately failure of the emission controls, especially over time. We have also historically been concerned with higher levels of oxygen content as increased oxygen content in gasoline can result in enleanment of the air-fuel ratio leading to higher emissions as well as higher exhaust temperatures that can degrade emission controls over time, especially in vehicles and engines that lack adaptive fuel controls that adjust to oxygenate levels in fuels (
e.g.,
MY2000 and older light-duty motor vehicles).

We initially specified that fuel with oxygen content up to 2.0 weight percent is sub sim to certification test fuel.
112

We later revised the definition to allow oxygen content up to 2.7 weight percent for gasoline containing aliphatic ethers and/or alcohols (excluding methanol), finding, based on data and our experience with CAA sec. 211(f)(4) waiver applications, that such levels would not result in emissions, materials compatibility, or drivability problems compared with certification test fuel.
113

Thus, we have a history of establishing maximum oxygen content as a criterion, in addition to other criteria, for determining whether a fuel or fuel additive is substantially similar to a fuel utilized in certification.

112
See 45 FR 6743 (October 10, 1980). 2.0 weight percent oxygen equates to approximately 5.7 volume percent ethanol.

113
See 56 FR 5352 (February 11, 1991). 2.7 weight percent oxygen equates to approximately 7.7 volume percent ethanol.

With respect to fuel volatility, our sub sim interpretations have specified that in order to qualify as sub sim to certification test fuel, which has

historically had an RVP of 9.0 psi in light of the vehicle test conditions being reflective of summer conditions, fuels need only “meet ASTM standards in general, that is, not necessarily for every geographic location and time of year.”
114

To qualify as sub sim, gasoline (whether or not containing ethanol) “must possess, at time of manufacture, all the physical and chemical characteristics of an unleaded gasoline as specified in ASTM D4814-88 for at least one of the Seasonal and Geographical Volatility Classes specified in the standard.”
115

114
See 46 FR 38585 (July 28, 1981).

115
See 73 FR 22281 (April 25, 2008).

3. Interpretation of CAA Sec. 211(f)(1)

In this action, we are putting forth a new interpretation of CAA sec. 211(f)(1). Recognizing the changed gasoline marketplace, and the multiple certification fuels used today, as compared to 1981, 1991, and even 2008, when the previous definitions of “substantially similar” were articulated, we are interpreting CAA sec. 211(f)(1) to find that E15 is substantially similar to Tier 3 E10 certification fuel for use in MY2001 and newer motor vehicles. This finding is consistent with the statutory text and purpose of CAA sec. 211(f)(1) and appropriate given the changed circumstances since our previous interpretations of what is “substantially similar.”
116

116
In this action, we are putting forth a new definition of what is “substantially similar” to Tier 3 E10 certification fuel. We are also operating under a new interpretation of CAA sec. 211(f)(1) that requires the examination of the entire scope of vehicles and engines that could use E15, given that Tier 3 E10 certification fuel is only utilized in the certification of a subset of the vehicle and engine fleet. Our discussion of our changed interpretation of CAA sec. 211(f)(1) in this section applies both to our general interpretation of the meaning of CAA sec. 211(f)(1) and the scope of analysis and to our justification for a new substantially similar definition.

Significant changes have occurred in the time period since CAA sec. 211(f)(1) was enacted and since we have had cause to interpret 211(f)(1) and to determine what fuels qualify as sub sim to our certification fuels. First, we partially granted a CAA sec. 211(f)(4) waiver that created a subset of gasoline fuel, E15 that can only be used in MY2001 and newer light-duty motor vehicles. We have information that the use of E15 in certain light-duty motor vehicles, as well as heavy-duty vehicles and nonroad vehicles, engines, and equipment, could cause or contribute to emission system failures.
117

Second, we have modified the certification fuel on which light-duty vehicles are certified from indolene (gasoline containing no ethanol) to Tier 3 E10 certification fuel for light-duty vehicles. We have not modified the certification fuel for other gasoline-powered vehicles, engines, and equipment. This action resulted in a split in the national vehicle and engine fleet by the certification fuel used to certify gasoline-powered vehicles, engines, and equipment: Tier 3 certified vehicles certified on Tier 3 E10 certification fuel and all other vehicles and engines certified on indolene. The use of Tier 3 E10 certification fuel also provides a new comparison point to determine which fuels would be considered substantially similar in all gasoline-powered vehicles, engines, and equipment. Additionally, E10, as discussed in Section II.A.2, has become the predominant fuel used in gasoline powered motor vehicles.

117
See 76 FR 4662 (January 26, 2011).

These two actions have resulted in a gasoline pool that is no longer interchangeable in all vehicles and engines. Unleaded gasoline, a fuel which we have interpreted CAA sec. 211(f)(1)(B) to apply, can be used in light-duty vehicles, as well as heavy-duty vehicles, and nonroad engines and equipment, including motorcycles and marine engines. However, as a result of the 211(f)(4) waivers for E15, we know that fueling a subset of those vehicles and engines with unleaded gasoline that is E15 will result in emissions exceedances. Since E15 has increased in availability in the gasoline marketplace as discussed in Section II.A.2 and may increase in the future, as discussed in Section II.E, it is important that E15 be introduced into commerce only for those vehicles for which it can be used without concerns over emissions, materials compatibility, or driveability.

We find that it would be inappropriate to allow the introduction into commerce of E15 for use in all gasoline-powered vehicles and engines in light of the demonstrated adverse impacts on emission systems due to the use of E15 MY2000 and older motor vehicles, heavy-duty gasoline engines and vehicles, on and off-highway motorcycles, and nonroad engines, vehicles, and equipment. However, we do find that E15 is substantially similar to E10 when used in MY2001 and newer motor vehicles. Therefore, in this action, we are finalizing an interpretation of CAA sec. 211(f)(1) that accounts for the changed circumstances in both the fuel pool, the certification fuels, and vehicle fleet since we last interpreted this section.

As discussed in Section II.B, EPA has the ability to modify its interpretation of statutory provisions. We are doing so for our interpretation of CAA sec. 211(f)(1). Our past “substantially similar” interpretative rules have not attempted to limit the scope of the vehicles and engines for which fuels would be considered sub sim to our certification fuels. Rather, they put forth an interpretation regarding how EPA would determine whether a new fuel or fuel additive is “substantially similar” for general use in all gasoline powered engines, vehicles and equipment. When EPA took those previous actions, we had no information before us that indicated that use of those new fuels or fuel additives in certain subsets of vehicles or engines may be inappropriate. Therefore, there was no need for EPA to consider limitations or other criteria to modify the sub sim interpretation to a particular subset of vehicles or engines.

In previous determinations of CAA sec. 211(f), we looked broadly at the use of the new fuel or fuel additive in all gasoline-powered engines, vehicles, and equipment. This was appropriate at that time because all gasoline-powered engines, vehicles and equipment were certified using essentially the same fuel and were compatible with any gasoline. Now, in light of the CAA sec. 211(f)(4) waivers, and the changed certification fuel, E15 can be used in MY2001 and newer motor vehicles but its use in other gasoline powered products has demonstrated adverse effects on emissions and materials compatibility. The legislative history of the 1977 CAA Amendments makes clear that the purpose of CAA sec. 211(f) is to ensure that the introduction of new fuels and fuel additives into commerce does not adversely impact vehicle emissions.
118

118
See S. Rep. 95-127, (95th Cong., 1st Sess.), at 90 (“The Administrator may waive the prohibition if the applicant establishes that the additive will not impair the emission performance of vehicles produced in model year 1975 and subsequent years.”).

We retain certain aspects of previous interpretations. The first E15 sec. 211(f)(4) waiver decision, in 2010, was the last occasion on which we articulated our interpretation of CAA sec. 211(f), including the relationship between the CAA sec. 211(f)(1) provision and the CAA sec. 211(f)(4) waiver provision.
119

We stated that the CAA sec. 211(f)(1) “prohibition has evolved over time,” but “the concept of applying this prohibition based on the relevant subset of vehicles continues.”
120

For example, we explained that “diesel fuel does not need to be substantially similar to the fuel used in the certification of gasoline vehicles, and E85 does not need to be substantially similar to fuel used in the

certification of diesel vehicles.”
121

We also recognized that, in approving a fuel as substantially similar, EPA could consider narrow as well as broad subsets of motor vehicles when evaluating a fuel or fuel additive for introduction into commerce under CAA sec. 211(f)(1).

119
75 FR 68145 (November 4, 2010).

120
Id.

121
Id.

In assessing whether a fuel is substantially similar to a certification fuel, we must look only to its use in the engines and vehicles within which it can be used, and not its use in vehicles and engines which are fueled by other types of fuel. Consistent with our past interpretation, we again find that the use of the term “any” in the prohibition (“any . . . vehicle or engine”) does not mean all motor vehicles or 100 percent of the motor vehicle fleet.
122

This is supported by the plain meaning of the term “any,” which can mean “one, some, or all indiscriminately of whatever quantity.”
123

122
Id.

123
Webster's Third New International Dictionary (1976); see
Green
v.
Biddle,
21 U.S. 1, 38 (1823) (“where the words of a law, treaty, or contract, have a plain and obvious meaning, all construction, in hostility with such meaning, is excluded”).

As discussed further in Section 1.3.2.2 of the RTC, the use of the phrase “any fuel utilized in the certification of any model year 1975, or subsequent model year, vehicle or engine” clearly encompasses fuels utilized in subsequent model years, such as Tier 3 E10 certification fuel. In particular the reference to a certification fuel for a “subsequent model year” permits our comparison of E15 to Tier 3 E10 certification fuel, a fuel utilized in the certification of MY2020 and later light-duty motor vehicles.

For this CAA sec. 211(f)(1) sub sim interpretation we are faced for the first time, however, with a situation where there are different gasolines used in the certification of different gasoline vehicles and equipment, and a different in-use gasoline (E15) that can only be used in a subset of in-use vehicles and engines. Because of this, the appropriate scope of review is all of the various vehicles and engines within which gasoline can be used, and our assessment under sub sim evaluates the appropriateness of fueling those vehicles and engines with various gasoline-ethanol blends. In this unique circumstance, we have the benefit of the CAA sec. 211(f)(4) waiver analyses that supported partial grants of CAA sec. 211(f)(4) waivers for E15 in 2010 and 2011. These data provide technical information useful to informing our sub sim analysis for E15. The use of data collected or analyzed in the context of a CAA sec. 211(f)(4) to inform a sub sim determination under CAA sec. 211(f)(1) is consistent with our prior practice. For example, in making the sub sim determination in our 1991 sub sim interpretive rule, we considered evidence that supported the CAA sec. 211(f)(4) waivers granted to methanol.
124

Based on the data in those waiver analyses, as well as additional data gathered in the eight years since that waiver, we have assessed whether E15 is sub sim to the Tier 3 E10 certification fuel for use in all of the vehicles and engines that could be exposed to fueling on E15 in-use.

124
56 FR 5352, 5353 (February 11, 1991). We explained that “although methanol is not included in the group of aliphatic alcohols and ethers covered by today's [sub sim interpretive rule] revision, the evidence in these fuel waiver dockets involving methanol supports the conclusion that unleaded gasolines containing aliphatic ethers and/or alcohols (excluding methanol), at up to 2.7 percent oxygen by weight, are substantially similar to unleaded gasoline used in light-duty vehicle emissions certification.” Id.

In this action, we are also extending our assessment beyond those vehicles and engines certified under CAA sec. 206. We are again in a unique circumstance where due to our analysis under the CAA sec. 211(f)(4) waiver (whic

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2019-11653. Public record. Not legal advice.