TITLES 13 and 17. CALIFORNIA AIR RESOURCES BOARD
NOTICE OF PUBLIC HEARING TO CONSIDER AMENDMENTS TO THE CALIFORNIA DIESEL FUEL REGULATIONS
The Air Resources Board (ARB or Board) will conduct a public hearing at the time and place noted below to consider amendments to the regulations pertaining to the composition of commercial motor vehicle diesel fuel, and the composition of diesel fuel used to certify light-, medium-, and heavy-duty vehicles and engines, and to consider adoption of an airborne toxic control measure (ATCM) for non-vehicular diesel fuel standards. Proposed amendments would reduce the maximum permissible sulfur content in vehicular diesel fuel from 500 parts per million weight (ppmw) to 15 ppmw, revise the requirements for certification of alternative diesel fuel formulations, adopt new equivalent limits for diesel fuel properties, establish standards for diesel fuel lubricity, and make other changes, including improvements to the sulfur test method and a revision of the definition of "diesel fuel." Proposed amendments to the requirements for diesel engine certification fuel would revise the sulfur specification to make it consistent with the proposed sulfur standard for commercial motor vehicle diesel fuel. The proposed ATCM would adopt requirements for non-vehicular diesel fuel identical to the regulations for vehicular diesel fuel.
|DATE:||July 24, 2003|
|PLACE:||California Environmental Protection Agency
Air Resources Board
1001 I Street
Auditorium, Second Floor
Sacramento, CA 95814
This item will be considered at a two-day meeting of the Board, which will commence at 9:00 a.m. on July 24,
2003, and may continue at 8:30 a.m. on July 25, 2003. This item may not be considered until July 25, 2003. Please
consult the agenda for the meeting, which will be available at least 10 days before July 24, 2003, to determine
the day on which this item will be considered.
If you have special accommodation or language needs, please contact ARB's Clerk of the Board at (916) 322-4011 or firstname.lastname@example.org as soon as possible. TTY/TDD/Speech-to-Speech users may dial 7-1-1 for the California Relay Service.
INFORMATIVE DIGEST OF PROPOSED ACTION AND POLICY STATEMENT OVERVIEW
Sections Affected: Proposed amendments to sections 2281, 2282 and 2701(a), and adoption of sections 2284 and 2285, title 13, California Code of Regulations (CCR); amendments to section 1956.8(b) and the incorporated "California Exhaust Emission Standards and Test Procedures for 2004 and Subsequent Model Heavy-Duty Diesel Engines" as last amended December 12, 2002, and sections 1961(d) and 1962 and the incorporated "California Exhaust Emission Standards and Test Procedures for 2001 and Subsequent Model Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles" as last amended July 30, 2002, title 13, CCR. Adoption of the ATCM for nonvehicular diesel fuel, section 93114, title 17, CCR.
The ARB administers regulations that since 1993 have limited statewide the allowable sulfur content of motor vehicle diesel fuel to 500 ppm and the aromatic hydrocarbon content to 10 percent with a 20 percent limit for small refiners. The regulation limiting aromatic hydrocarbon content allows refiners to comply by selling a certified alternative formulation that has an aromatic hydrocarbon content greater than the basic limits. Most refiners have taken advantage of the regulation's flexibility to produce alternative diesel formulations that provide the required air quality benefits at a lower cost.
In order to be certified, an alternative formulation must be shown to result in the same emission benefits as the 10 percent aromatic standard (or in the case of small refiners, the 20 percent standard). The regulation requires the determination of the values of five properties - sulfur, aromatic hydrocarbon, polycyclic aromatic hydrocarbon, and nitrogen contents, and cetane number - of the candidate fuel submitted by a refiner for certification. The values for the candidate then become the required specifications for the alternative formulation. Candidate fuel formulations are tested in a laboratory engine for emission equivalency against a defined reference fuel. They must be shown to be equivalent or better than the reference fuel. In comparing emissions, a statistical margin of safety is required but an allowable tolerance is provided so that a truly emission-equivalent candidate fuel will always qualify.
ARB regulations also establish test procedures for evaluating whether new motor vehicles and engines may be certified as meeting the California motor vehicle emission standards. These test procedures identify the specifications of the "certification fuel" to be used in exhaust emission testing. The ARB's current specifications for diesel certification fuel specify an allowable range of sulfur content from 100 ppmw to 500 ppmw and specifies limits or allowable ranges for other fuel properties, including an aromatic hydrocarbon content of 8-12 volume percent (vol.%). Manufacturers may also certify California diesel engines using certification fuel meeting the federal certification fuel specifications established by the U.S. Environmental Protection Agency (U.S. EPA) and incorporated into the ARB's test procedures.
There is currently no government or industry standard controlling diesel fuel lubricity in the United States. Refiners in California have maintained a voluntary minimum lubricity level consistent with the recommendation of a 1994 Governor's Task Force that was created during the statewide introduction of 500-ppm sulfur California reformulated diesel. This voluntary level is a Ball-on-Cylinder Lubricity Evaluator (BOCLE) scuffing load (SL) of 3,000 grams or higher. The American Society for Testing and Materials (ASTM) has been working since 1993 to develop a lubricity specification for its D-975 specifications for diesel fuel but to date has not been successful.
The California diesel fuel regulations are a necessary part of the state's strategy to reduce air pollution through the use of clean fuels and lower emitting motor vehicles and off-road equipment. The most recent proposed and adopted regulations to reduce diesel exhaust emissions, exposure, and risk will require the use of low sulfur diesel fuel to be effective.
In October 2001, the ARB adopted the new stringent exhaust emissions standards that were adopted in January 2001 by the U.S. EPA for 2007 and subsequent model year heavy-duty highway diesel engines and vehicles. The new emission standards represent a 90% reduction of emissions of oxides of nitrogen (NOx), a 72% reduction of emissions of non-methane hydrocarbon (NMHC), and a 90% reduction of emissions of particulate matter (PM) compared to the emission standards that apply starting in the 2004 model year. The new emissions standards will require the use of catalyzed diesel particulate filters, NOx after-treatment and other advanced after-treatment based technologies that could not achieve the required efficiency with diesel fuel sulfur levels higher than 15 ppm.
In August 1998, the ARB identified particulate matter emitted from diesel engines (diesel PM) as a Toxic Air Contaminant (TAC) and in September 2001, approved the Diesel Risk Reduction Plan to reduce public exposure to diesel PM. The plan identified air toxic control measures and regulations that will set more stringent emissions standards for new diesel-fueled engines and vehicles, establish retrofit requirements for existing engines and vehicles where determined to be technically feasible and cost-effective. The sulfur content of diesel fuel must not exceed 15 ppm because at higher concentrations, the effectiveness of the emissions control systems is so reduced that the desired emissions reductions for NOx and PM cannot be achieved.
Although the ARB's vehicular diesel fuel regulations do not apply to diesel fuel used in stationary engines, complying "CARB diesel" is used in the great majority of stationary engines because of California's single fuel distribution network. Also, several districts have established best available control technology requirements for diesel-fueled stationary engines that specify the use of CARB diesel. Portable engines registered under ARB's Statewide Portable Equipment Registration program are required to use CARB diesel. In practice, transportation refrigeration unit (TRU) diesel engines, fueled in California, are normally fueled with California vehicular diesel fuel, but this is not required by existing law. Locomotive and most marine diesel engines are examples of other applications that are not required to use California vehicular diesel fuel. Locomotive diesel engines fueled in California primarily burn diesel fuel complying with the U.S. EPA sulfur content regulation (£ 500 ppmw) for diesel fuel used in on-road engines. Passenger-fleet, marine diesel engines are required by statute to use California vehicular diesel fuel. It is believed that high-sulfur (£ 5000 ppmw) diesel fuel is burned in most of the rest of the marine diesel engines fueled in California.
Comparable Federal Regulations
Since 1993, a U.S. EPA regulation - 40 CFR ? 80.29 - has imposed a maximum sulfur content limit of 500 ppmw on diesel fuel sold or supplied for use in on-road motor vehicles. In addition, the regulation requires on-road motor-vehicle diesel fuel to have a cetane index of at least 40 or have an aromatic hydrocarbon content of no greater than 35 percent by volume (vol. %). Diesel fuel not intended for on-road motor-vehicle use must contain dye solvent red 164.
On January 18, 2001, the U.S. EPA published a final rule requiring refiners, beginning June 1, 2006, to produce highway diesel fuel that meets a maximum sulfur standard of 15 ppmw. (66 F.R. 5002; 40 C.F.R. §§ 80.500 et seq.). All 2007 and later model year diesel-fueled vehicles must be fueled with this new low sulfur diesel. The federal regulations contain temporary compliance options and flexibility provisions not offered in the ARB's proposed amendments. The temporary federal compliance option, which includes an averaging, banking and trading component, begins in June 2006 and lasts through 2009, with credit given for early compliance before June 2006. Under this temporary compliance option, up to 20 percent of highway diesel fuel may continue to be produced at the existing 500 ppmw sulfur maximum standard. Highway diesel fuel marketed as complying with the 500 ppmw sulfur standard must be segregated from 15 ppmw fuel in the distribution system, and may only be used in pre-2007 model year heavy-duty vehicles. The federal regulation also provides additional hardship provisions that the U.S. EPA believes will minimize the economic burden of the small refiners in complying with the 15-ppm sulfur standard.
The Proposed ARB Amendments
15-ppmw sulfur limit for vehicular diesel fuel starting in 2006. Staff proposes an amendment that would reduce the maximum allowable sulfur content of vehicular diesel fuel from 500 ppmw to 15 ppmw. This fuel sulfur requirement would apply to diesel fuel sold for use in both on-road and-off-road motor vehicles. The 15-ppmw sulfur limit would apply to all diesel supplied from production and import facilities starting no later than June 1, 2006. The limit would apply 45 days later - starting July 15, 2006 - to all downstream facilities except bulk plants, retail outlets, and bulk purchaser-consumer facilities. After another 45 days - starting September 1, 2006 - the 15-ppm sulfur limit would apply throughout the distribution system. These phase-in dates are substantially identical to those in the U.S. EPA regulation.
The 15-ppm sulfur content limit is proposed for two primary reasons: to enable the effective use of the emissions control technology that will be required by heavy-duty diesel vehicles and engines that must meet the new PM and NOx emission standards adopted by the U.S EPA and ARB; and to enable the use of the exhaust gas treatment technologies that will be required by new and retrofitted diesel engines to meet the diesel PM reduction targets proposed in the diesel risk reduction plan. Current sulfur levels in diesel fuel will prevent effective operation of both the NOx and PM emissions control technologies.
Revising the procedures for certifying alternative diesel formulations. Staff is proposing the following amendments to the procedures for new certifications of alternative formulations to the 10-percent aromatic hydrocarbon standard: (1) requiring that the reference and candidate fuels meet the proposed 15-ppm sulfur standard, starting August 2004; (2) requiring that the candidate fuel properties meet the same property ranges and limitations as those required for the reference fuels and be within half the range of each reference fuel property; (3) reducing the allowable tolerance values for each pollutant by half its current value; and (4) eliminating a provision which reduces candidate fuel particulate matter emissions by the lesser of a calculated indirect sulfate difference or the actual measured sulfate content of the emissions.
Various studies have shown that the emissions characteristics of diesel fuel blends may be affected by diesel fuel properties, such as density, that are not among the five specified for alternative fuel formulations. This means that an applicant has been is permitted to blend a candidate fuel that has a property such as density that is significantly different from that of the reference fuel. The difference between the two fuels could contribute to an improved emissions performance by the candidate fuel even though there is no assurance that the value of that property in diesel fuels produced commercially under the alternative formulation would be comparable to that of the candidate fuel. The proposed revisions of the alternative diesel formulation provisions are needed to ensure that certified alternative formulations results in equivalent emissions to the candidate fuel formulations tested in the laboratory.
Add a new "equivalent limits" compliance mechanism in the regulation limiting the aromatic hydrocarbon content of vehicular diesel fuel. Staff is proposing an amendment that would add a new alternative compliance mechanism as an option to meeting the 10 vol.% aromatic hydrocarbon limit. A refiner using this mechanism for a batch of diesel fuel would have to meet the following specifications:
|Aromatic Content (% by wt.)||< 21.0|
|PAH Content (% by wt.)||< 3.5|
|API Gravity||> 36.9|
|Cetane Number||> 53|
|Nitrogen Content (ppmw)||< 500|
|Sulfur (ppmw)||< 160 before 6/1/06
< 15 starting 6/1/06
This new compliance mechanism would provide additional flexibility for refiners or importers and potentially
allow more diesel fuel to be imported into the California market. The proposed new equivalent limits are based
on the average properties of certified formulations and should therefore preserve the actual emission benefits
of California diesel fuel.
Revising the sulfur specification for diesel engine certification fuel. Staff is proposing a sulfur content range of 7 to 15 ppmw by weight for California diesel certification fuel for all classes of on-road diesel motor vehicles, starting in the 2007 model year. This would be identical to the sulfur content of federal certification fuel. The specifications for the other fuel properties would not change. Manufacturers would retain the options to certify diesel engines using certification fuel meeting the federally established certification fuel specifications or an alternative certification test fuel provided they can demonstrate that this test fuel will be the predominant in-use fuel. The new sulfur content range will be representative of the in-use commercial fuel, and as noted above the stringent new standards for 2007 and subsequent model vehicles are predicated on the ability to operate on fuel with the reduced sulfur content.
Adoption of a diesel fuel lubricity standard. Staff is proposing that the Board adopt a fuel lubricity standard that would be phased in for all California motor vehicle diesel fuel starting August 1, 2004. The proposed standard is a High Frequency Reciprocating Rig (HFRR) maximum wear scar diameter (WSD) of 520 microns which will become effective August 1, 2004. Staff recommends that the Board direct that a technology review be conducted by staff to determine whether a more stringent standard - HFRR maximum WSD of 460 microns - should be implemented on the same schedule as the proposed 15-ppm sulfur limit for diesel fuel.
Staff believes that a diesel fuel lubricity standard is necessary to ensure that California diesel fuel provides adequate lubrication for fuel systems of existing and future diesel engines. Fuel lubricity levels are expected to be reduced by the more severe hydrotreating that will be needed to lower the sulfur content of diesel fuel to meet the proposed 15-ppm sulfur limit. Fuels of low lubricity do not provide adequate lubrication and will contribute to excessive wear resulting in reduced equipment life and performance. A more stringent second-phase standard may be needed to protect the advanced high-pressure fuel injections systems that will become more prevalent within the next few years.
ATCM for nonvehicular diesel fuel. Staff is proposing adoption of a new ATCM which would ultimately require that California nonvehicular diesel fuel meet the same ARB standards as California vehicular fuel, once air districts have had the opportunity to adopt their own ATCM on the subject. There would be an exception for diesel fuel used in locomotives and marine vessels. The ARB's new ATCM would complement and enable the use of high-efficiency, PM emission-control devices for non-vehicular diesel engines.
Other Amendments: The staff is proposing additional amendments to clarify the requirements of the diesel fuel regulations and to ensure that the regulations work effectively. One amendment would replace the current x-ray fluorescence test method for determining sulfur (ASTM D2622-94) with an ultraviolet fluorescence method (ASTM D5453-93) that will provide a more suitable detection limit and better precision. An exemption from the diesel fuel requirements would be established for diesel fuel used in qualifying military vehicles, closely paralleling provisions in the U.S. EPA regulations. Another amendment would revise the definition of "diesel fuel" to include any mixture of predominately liquid hydrocarbons that is sold or represented as suitable for use in internal combustion, compression ignition (diesel cycle) engines. This will clarify the applicability of the diesel fuel regulations and make the definition functionally consistent with the definition for fuel for internal combustion, spark ignition (gasoline) engines. A conforming amendment would also be made to the definition of diesel fuel in the verification procedure and in-use compliance requirements for in-use strategies to control emissions from diesel engines. This amendment would assure that the current effect of the requirements for the verification procedure regulation will not be changed by the expansion of the definition of diesel fuel.
AVAILABILITY OF DOCUMENTS AND AGENCY CONTACT PERSONS
The ARB staff has prepared a Staff Report: Initial Statement of Reasons (ISOR) for the proposed regulatory action, which includes a summary of the environmental and economic impacts of the proposal and supporting technical documentation. The report is entitled "Proposed Amendments to the California Diesel Fuel Regulations."
Copies of the ISOR and the full text of the proposed regulatory language, in underline and strikeout format to allow for comparison with the existing regulations, may be accessed on the ARB's web site listed below, or may be obtained from the Public Information Office, Air Resources Board, 1001 I Street, Visitors Environmental Services Center, First Floor, Sacramento, CA 95814, (916) 322-2990 at least 45 days prior to the scheduled hearing (July 24, 2003).
Upon its completion, the Final Statement of Reasons (FSOR) will also be available and copies may be requested from the agency contact persons in this notice, or may be accessed on the ARB's web site listed below.
Inquiries concerning the substance of the proposed regulations may be directed to the designated agency contact persons: Mr. Steven Brisby, Manager, Fuels Section, (916) 322-6019, or Mr. Dean C. Simeroth, Chief, Criteria Pollutants Branch, Stationary Source Division, at (916) 322-6020.
Further, the agency representative and designated back-up contact persons to whom nonsubstantive inquiries concerning the proposed administrative action may be directed are Artavia Edwards, Manager, Board Administration & Regulatory Coordination Unit, (916) 322-6070, or Amy Whiting, Regulations Coordinator, (916) 322-6533. The Board staff has compiled a record for this rulemaking action, which includes all the information upon which the proposal is based. This material is available for inspection upon request to the contact persons.
If you are a person with a disability and desire to obtain this document in an alternative format, please contact the Air Resources Board ADA Coordinator at (916) 323-4916, or TDD (916) 324-9531, or (800) 700-8326 for TDD calls outside the Sacramento area.
This notice, the ISOR and all subsequent regulatory documents, including the FSOR, when completed, are available on the ARB Internet site for this rulemaking at http://www.arb.ca.gov/regact/ulsd2003/ulsd2003.htm.
COSTS TO PUBLIC AGENCIES AND TO BUSINESSES AND PERSONS AFFECTED
The determinations of the Board's Executive Officer concerning the costs or savings necessarily incurred by public agencies, private persons and businesses in reasonable compliance with the proposed regulations are presented below.
Pursuant to Government Code sections 11346.5(a)(5) and 11346.5(a)(6), the Executive Officer has determined that the proposed regulatory action will not create costs or savings to any state agency or in federal funding to the state, costs or mandate to any local agency or school district whether or not reimbursable by the state pursuant to Part 7 (commencing with section 17500), Division 4, Title 2 of the Government Code, or other nondiscretionary savings to state or local agencies.
In developing this regulatory proposal, the ARB staff evaluated the potential economic impacts on representative private persons or businesses. The ARB is not aware of any cost impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action.
The Executive Officer has made an initial determination that the proposed regulatory action will not have a significant statewide adverse economic impact directly affecting businesses, including the ability of California businesses to compete with businesses in other states, or on representative private persons.
With the exception of the proposed amendments that establish a 15-ppmw diesel fuel sulfur limit, establish a diesel fuel lubricity standard, and set "equivalent limits" in the regulation limiting the aromatic hydrocarbon content of vehicular diesel fuel, the proposed amendments are not expected to have any economic impact.
It is not expected that the proposed amendments will modify existing diesel production and consumption patterns in California. Implementation of the proposed amendments and the federal and SCAQMD regulations for diesel fuel are estimated to increase the costs of producing diesel fuel in California by about 3 cents per gallon. It is estimated that the proposed lubricity standard represents about 0.6 cents per gallon of this cost. However, these costs may be reduced by some unquantifiable amount by the additional flexibility provided to refiners and importers using the "equivalent limits" provision in the aromatic hydrocarbon content regulation. Nationally, the federal low sulfur requirement is expected to increase the cost of diesel fuel by about 4 to 5 cents per gallon. The difference between the California costs and the federal costs is due to California refineries being more complex than national refineries, and therefore in less need of modifications to produce low sulfur diesel fuel. While the California diesel fuel standards will also apply to off-road and some stationary engine applications, fuel costs for these users have historically been comparable to surrounding states even though diesel fuel in those states has not had to meet the same standards as California diesel fuel.
The economy-wide impacts of the production of low sulfur diesel fuel were estimated using a computable general equilibrium (CGE) model of the California economy. Based on staff's analysis, the cumulative impact of these regulations could be expected to increase fuel costs to diesel end users in California by up to about $110 million per year in 2007. This is not expected to have a significant impact on the overall California economy.
The specific economic impacts to the petroleum, transportation, and agricultural sectors of the California economy were also evaluated. For the refinery sector, the production of low sulfur diesel fuel will likely require capital investments of from $170 to $250 million dollars for equipment. For the agricultural sector, the use of low sulfur diesel fuel could increase operating costs by 0.05 percent. For the transportation sector, the use of low sulfur diesel fuel could increase typical truck operating costs by 0.6 percent. These are not expected to be significant adverse economic impacts.
In accordance with Government Code section 11346.3, the Executive Officer has determined that the proposed regulatory action will not affect the creation or elimination of jobs within the State of California, the creation of new businesses or elimination of existing businesses within the State of California, or the expansion of businesses currently doing business within the State of California. A detailed assessment of the economic impacts of the proposed regulatory action can be found in the Staff Report (ISOR).
The Executive Officer has also determined, pursuant to title 1, CCR, section 4, that the proposed regulatory action will affect small businesses. The proposed amendments lowering the sulfur limit of commercial diesel fuel are expected to result in an increase in the cost of producing diesel fuel. However, most of this cost would have been incurred even without action by the ARB because of the federal requirements for on-road diesel fuel. No negative economic impacts on small businesses are expected.
In accordance with Government Code sections 11346.3(c) and 11346.5(a)(11), the ARB's Executive Officer has found that the reporting requirements of the proposed regulatory actions which apply to businesses are necessary for the health, safety, and welfare of the people of the State of California.
Before taking final action on the proposed regulatory action, the Board must determine that no alternative considered by the agency or that has otherwise been identified and brought to the attention of the agency would be more effective in carrying out the purpose for which the action is proposed or would be as effective and less burdensome to affected private persons than the proposed action.
SUBMITTAL OF COMMENTS
The public may present comments relating to this matter orally or in writing at the hearing, and in writing or by e-mail before the hearing. To be considered by the Board, written submissions not physically submitted at the hearing must be received no later than 12:00 noon, July 23, 2003, and addressed to the following:
Postal mail is to be sent to:
Clerk of the Board
Air Resources Board
1001 I Street, 23rd Floor
Sacramento, California 95814
Electronic mail is to be sent to: email@example.com and received at the ARB no later than 12:00 noon, July 23, 2003.
Facsimile transmissions are to be transmitted to the Clerk of the Board at (916) 322-3928 and receiv