New Year, New Regs: An Ethanol Producer’s Guide to Tier 3 Sulfur Reporting.
Ethanol producers looking to draft their new year’s resolutions need not look much further than the Code of Federal Regulations.
That’s because they have already had their new year’s resolution written for them, courtesy of the Environmental Protection Agency’s new Tier 3 Sulfur Rule.
Specifically: Spend more time worrying about the sulfur content of the ethanol you produce.
At first glance, that may seem like a small request (since ethanol contains very little sulfur other than that which is contained in the denaturant added to the fuel).
However, reality has never been one to interfere with a larger regulatory agenda.
So beginning on January 1, 2017 ethanol producers assume a number of new burdens related to compliance with the EPA’s new “Tier 3” Sulfur program.
Unlike traditional resolutions, like losing weight or visiting the gym, 30 days of effort (unfortunately) won’t transform this new endeavor into a faded memory.
And while the actual product standards that must be met by “producers and importers of denatured fuel ethanol and other oxygenates designated for use in transportation fuel” are fairly insignificant, that doesn’t mean the back office burden required to prove your compliance can be quickly dismissed.
As Kelly Davis, Renewable Fuels Association director of regulatory affairs explains: “We typically do not see sulfur above 10 ppm in our ethanol, but as part of the fuel supply chain, we have to prove that we comply, so it’s more of bureaucratic issue—paperwork.”
The information below is a general reminder of the changes taking effect. It is a limited guide to help you identify the information you need to be tracking now; that way when it comes time to file your first annual report on 03/31/2018 (for 01/01/2017-12/31/2017), you won’t be stuck searching for data you don’t have. This information is general with respect to the regulation. For information on how to apply it to the specifics of your situation, please contact us.
Issue 1 – Meet New Product Standards (80.1610(a)):
- The sulfur content of your fuel ethanol cannot exceed 10 ppm.
- The DFE (“denatured fuel ethanol”) must be composed solely of carbon, hydrogen, nitrogen, oxygen and sulfur.
- The denaturants added to fuel are limited to certified gasoline, gasoline blendstocks or natural gasoline. Most plants use natural gasoline.
- The concentration of all denaturants limited to 3.0 % by volume maximum. Most plants denature at 1.96 – 2.49 % by volume.
For the purposes of ASTM, the RFS, or California’s 2003 sulfur standard you are probably meeting or exceeding these four requirements anyway. As such, you likely don’t have many, or any, modifications that you must make to your fuel production process in order to comply.
Notwithstanding, the Tier 3 compliance obligates you to measure, track, and report the sulfur content of every batch of denatured fuel ethanol produced.
Issue 2 – Update your PTDs:
Each batch of fuel sold must have a Product Transfer Document that contains the phrase “Denatured fuel ethanol, maximum 10 ppm sulfur” (80.1610(c)).
Complete PTD requirements are available at 80.1651(e).
Issue 3 – Number your Batches:
Per 80.1610(d), each batch of fuel ethanol produced has to be assigned a unique 17 digit batch number (EPA1-EPA02-YY-NNNNNN). These are used by the EPA and you internally for tracking, recordkeeping, and in your annual EPA report.
- EPA1 is the 4 digit EPA assigned oxygenate producer registration number
- EPA02 is the 5 digit EPA facility registration number
- YY is the last 2 digits of the year in which the batch was produced
- NNNNNN is the batch number beginning with 1 for the first batch produced in a calendar year
Section 5.4 and 5.5 notes that “DFE producers may define a batch differently in Tier 3 compared to RFS”, stating that “any volume of DFE (truckload, railcar load, tank) may be considered a batch of DFE, provided the volume is homogeneous with regard to those properties specified for DFE.”
Issue 4 – Test those Batches and Keep the Results:
Each batch of oxygenate produced should be tested to determine its sulfur content to the nearest ppm.
The sulfur content of batches of DFE produced using “certified” denaturant (meeting the requirements of § 80.1611) can opt to determine the sulfur content with a mathematical calculation in lieu of the analytical testing of each batch of DFE. However, if your denaturant provider hasn’t updated their PTD’s to indicate the sulfur content of the ethanol denaturant and to state the product is “Certified Ethanol Denaturant suitable for use in the manufacture of denatured fuel ethanol meeting EPA standards”, then you must use analytical testing as your method.
Analytical Testing results (80.1653(d)(6))
If the sulfur content of the batches was determined by analytical testing, these are some of the records need to be kept:
- The location, date, time, and storage tank or truck identification for each sample collected
- The name and title of the person who collected the sample and the person who performed the test
- The results of the test as originally printed by the testing apparatus, or where no printed result is produced, the results as originally recorded by the person who performed the test
Alternative Mathematical Calculation results (80.1653(d)(7))
If the sulfur content of the batches was determined by mathematical calculation, these are some of the records need to be kept:
- The name and title of the person who calculated the sulfur content of the batch.
- The date the calculation was performed.
- The calculated sulfur content.
- The sulfur content of the neat (un-denatured) ethanol.
- The date each batch of neat ethanol was produced.
- The neat ethanol batch number.
- The neat ethanol batch volume.
- As applicable, the neat ethanol production quality control records, or the test results on the neat ethanol including—
- The location, date, time, and storage tank or truck identification for each sample collected.
- The name and title of the person who collected the sample and the person who performed the test.
- The results of the test as originally printed by the testing apparatus, or where no printed result is produced, the results as originally recorded by the person who performed the test.
- Any record that contains a test result for the sample that is not identical to the result recorded under paragraph (d)(7)(v) of this section.
- The test methodology used.
- The sulfur content of the denaturant(s) used, and the volume percent at which the denaturant(s) were added to neat (un-denatured) ethanol to produce denatured fuel ethanol.
- The product transfer documents for the denaturants used.
You may assume the sulfur content of the neat (un-denatured) ethanol used in the DFE sulfur calculation is either negligible or some specific value, provided you can demonstrate the validity of that assumption through production quality control. The EPA’s stated expectation for a quality control program is simply that it must “demonstrate that the undenatured ethanol contains a negligible or assumed amount of sulfur.” The EPA notes in section 3.8 that requirements to have anything verified by a third party is specifically limited to “Gasoline refiners/importers” who “are expected to have their sulfur compliance calculations and credit activity independently verified in their attest engagements.”
Retention of Batch Samples (80.1643)
Whether the sulfur content was obtained through product testing or by calculation, the ethanol producer must retain a representative sample (minimum of 330 mL) of each batch of fuel ethanol produced.
Samples must be retained for the most recent 20 batches, or each batch produced during the most recent 21 day period (whichever is greater, not to exceed 90 days for any given sample).
Issue 5 – File your Annual Report (80.1652(c))
Your first “Oxygenate refiner and Importer Annual Report” will be due on 03/31/18 and will include the total volume of oxygenate produced or imported; reported to the nearest whole number.
Furthermore, for each batch produced the report will include:
- the batch number assigned under §80.1610(d),
- the date the batch was produced,
- the volume of the batch reported to the nearest whole number,
- the sulfur content of the batch (reported to two decimal places)
- either the identification of the test method used to determine the sulfur content of the batch (pursuant to §80.1642), or the information used to calculate the sulfur content pursuant to the requirements of §80.1642(c).
We have not obtained a template for this annual report yet, but it most likely should be in the unified report form used for RFS reporting and therefore would be submitted as an excel document with this information.
UPDATE: The GSF0402 report will be used to provide this Tier 3 Sulfur information to the EPA. You can access this report using the existing Unified Report Form Template that you currently use for RFS RIN reporting. GSF0402 instructions are also available.
Issue 6 – CDX Updates
In order to comply with annual reporting requirements with the EPA’s new Tier III rules, there are two minor updates that must be made within CDX.
Caution: Because many producers’ Triennial Engineering Review is still pending within CDX, they cannot update their roles and registrations for Tier 3 Sulfur without the risk of technical glitches related to acceptance of their engineering review. If your engineering review or any other registration updates are still pending, you should wait until they have cleared before attempting to update CDX to prepare for Tier 3 sulfur program.
Update 1: You must update your “roles” to include “Subpart O” (which covers the Tier 3 sulfur program).
You need to have your CDX roles updated prior to submission of your first Tier 3 report in March of 2018. To update this role, confirm that you do not have any other updates currently pending, then follow these instructions prior to March of 2018:
- Log Into CDX
- Go to OTAQ Registration Home Page
- Select “Update Existing Company Associations”
- Click on the “Roles” link for your company
- Check the box for “DC Fuels Submitter, Title 40 CFR Part 80 Subpart O” and press “Select” to Continue
- Click through the following prompts:
- the “Review” Button
- the “Continue” Button
- the “OK” button on the Further Action Required Pop-Up
- the “Submit” Button
- Save a copy of your registration form using “Click here to save a copy of your registration forms.”
- If your RCO cannot e-sign the form, you need to print, sign, and mail the form into the EPA at the address below.
Update 2: You must amend your “business activities” listed in your OTAQ registration with the EPA to include “Oxygenate Producer.”
You can follow the steps below to update your company registration to include “Oxygenate Producer and Importer”:
- To edit a company’s details, navigate to your OTAQ Registration Home Page and click the Company Name link for a company with which you have an active Company Editor role
- The top of the next page will state, “You are currently in VIEW mode.” Click the “Edit” button located on the top right side of the page.
- Once you are in Edit mode, you must first update your Company Registration to include “Oxygenate Producer and Importer.” If the Program Type “Gasoline” is not already selected, first select “Gasoline” and then select the “Oxygenate Producer and Importer” business activity.
- After choosing this Company Activity, please click on the Facility Details Tab. ***Please note, you do not need to click “Review” before moving to the Facility Details Tab***
- Select the facility you wish to update
- Choose “Next”
- Check the “Oxygenate Producer” and/or “Oxygenate Importer” Facility Activity
- Choose “Next”
- Repeat this process for any facility that needs to be updated
- After updating all facilities, click “review” on the bottom of the page
- Print out the Company Update Request paperwork. It must then be signed by the RCO.
- All pages of this Company Update Request must be sent to the EPA at one of the addresses below in order for the update to be made
U.S. Environmental Protection Agency
Mail Code 6405A
1200 Pennsylvania Avenue, NW
Washington, DC 20460
Using Commercial Delivery:
U.S. Environmental Protection Agency
William Jefferson Clinton Building – North
Mail Code 6405A, Room 6520V; (202) 343-9038
1200 Pennsylvania Ave NW
Washington, DC 20004
This information was paraphrased or translated for clarity. Links to the Code of Federal regulations were provided as reference to access the complete and original statutory requirements.
Additional EPA resources may be able to assist you, including:
- Questions and Answers Regarding EPA’s Tier 3 Gasoline Sulfur Regulations
- Small Entity Compliance Guide for “Control of Air Pollution From Motor Vehicles: Tier 3 Motor Vehicle Emission and Fuel Standards”
- Overview of EPA’s Tier 3 Gasoline Sulfur Regulations
Happy New Year!