C. Docket Copying Costs. You may be charged a reasonable fee for photocopying docket materials, as provided by 40 CFR Part 2. Outline of This Preamble
I. Overview
II. Background

A. Statutory Authority

B. E15 Waiver Request

C. Reasons for the Proposed Actions in This Rulemaking

D. Federalism Implications
III. Misfueling Mitigation Measures

A. Labeling Requirements

1. E15 Labels

a. Information Component

b. Legal Approval Component

c. Technical Warning Component

d. Legal Warning Component

e. E15 Label Proposal

2. Additional Fuel Pump Labeling Requirements

3. Stakeholder Labeling Suggestions

4. FTC Labeling Proposal

5. Labeling Requirements and Liability for Misfueling

B. Product Transfer Document Requirements

1. PTD Requirements Downstream of the Point of Ethanol Addition

2. PTD Requirements Up to and Including the Point of Ethanol Addition

3. General PTD Requirements

C. Retail Fuel Dispenser Label and Fuel Ethanol Content Survey

D. Program Outreach

E. What Other Means of Mitigating Misfueling Were Considered?

F. Cost of Compliance

1. Labeling Costs

2. PTD Costs

3. Survey Costs

4. Avoided Motor Vehicle and Nonroad Product Repair Costs

G. Compliance and Enforcement

1. What are the Prohibited Acts?

2. What are the Proposed Liability and Penalty Provisions for Noncompliance?

a. Presumptive Liability

b. Affirmative Defenses for Liable Parties

c. Penalties for Violations
IV. Other Measures to Ensure Compliance

A. The 1.0 psi RVP Waiver for E10 Blends

1. National RVP Survey

2. RVP and E15 Underground Storage Tank Transition

B. Credit for RFG Downstream Oxygenate Blending
V. Modification of the Complex Model

A. Background of RFG Requirements

B. The Complex Model
VI. Why are we proposing misfueling mitigation measures?

A. History of Ethanol Use in the U.S.

B. Chemical and Physical Differences between Ethanol and Gasoline

1. Impact on the A/F RatioCombustion Enleanment

2. Polarity and affinity for water

3. Material Compatibility

4. Corrosion

5. Solvency

6. Volatility

C. Model Year 2000 and Older LightDuty Motor Vehicles

1. Enleanment

2. Material Compatibility

3. Motor Vehicle Population and Anticipated Emissions Impact

D. Heavyduty Gasoline Engines and Vehicles

E. Motorcycles

F. Nonroad Engines, Vehicles, and Equipment (Nonroad Products)

1. Introduction

2. Enleanment

3. Material Compatibility and Corrosion

4. Phase Separation and Solvency/Detergency

G. Model Year 2007 and Newer Lightduty Motor Vehicles

H. Model Year 20012006 Motor Vehicles

I. Emissions Impact Summary and Conclusions
VII. What is our legal authority for proposing these misfueling mitigation measures?

A. Health and Welfare Concerns of Air Pollution Caused by E15

B. Impact of E15 Emission Products on Emission Control Systems

C. Effect of Misfueling Mitigation Measures on the Use of Other Fuels or Fuel Additives
VIII. Public Participation

A. How Do I Submit Comments?

B. How Should I Submit CBI to the Agency?

C. Will There Be a Public Hearing?

D. Comment Period

E. What Should I Consider as I Prepare My Comments for EPA? IX. Administrative Requirements

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A. Executive Order 12866: Regulatory Planning and Review

B. Paperwork Reduction Act

C. Regulatory Flexibility Act

D. Unfunded Mandates Reform Act

E. Executive Order 13132 (Federalism)

F. Executive Order 13175

G. Executive Order 13045: Protection of Children from Environmental Health Risks and Safety Risks

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

I. National Technology Transfer and Advancement Act

J. Executive Order 12898: Federal Actions to Address Environmental Justice in Minority Populations and LowIncome Populations

I. Overview

In today's action, the U.S. Environmental Protection Agency (EPA or the Agency) is proposing regulations to mitigate the potential for misfueling of vehicles and engines with gasoline containing up to 15 vol% ethanol (E15).\1\ These regulations are being proposed in conjunction with today's action by EPA granting of a partial waiver for ethanol blends up to 15 vol% ethanol under section 211(f)(4) of the Clean Air Act (CAA or the Act). This partial waiver will allow the introduction into commerce of E15 for use in 2007 model year (MY) and newer lightduty motor vehicles. In partially granting the E15 waiver, EPA imposed a number of conditions on the refiners and renewable fuel producers subject to the waiver. These conditions are designed to help ensure that E15 is introduced into commerce for use in MY2007 and newer lightduty motor vehicles and flexiblefueled vehicles, and not for use in any other vehicles or engines. Some of the regulatory provisions proposed today parallel those conditions and are expected to be a more efficient way to help ensure that the conditions of the E15 partial waiver decision are met and to minimize inuse emissions increases that might result from misfueling vehicles and engines with E15. The proposed safeguards would also promote the successful introduction of E15 into commerce.
\1\ For purposes of this preamble, E15 refers to gasoline ethanol blended fuels that contain greater than 10 vol% and no more than 15 vol% ethanol content.

We are proposing four requirements as part of our misfueling mitigation regulations. The first requirement, consistent with the partial waiver being granted today, is a prohibition against using E15 in MY2000 and older motor vehicles, heavyduty gasoline engines and vehicles, on and offhighway motorcycles,\2\ and nonroad engines, vehicles, and equipment.\3\ This prohibition is similar in nature to the prohibition on producers of fuels and fuel additives under section 211(f)(1); however, the prohibition in section 211(f)(1) only applies to these upstream parties. The prohibitions proposed today would apply at the retail level as well as upstream. The conditions on the partial waiver and the regulations proposed today are similar in nature and have a common goalensuring that E15 is used in appropriate motor vehicles covered by the partial waiver, and is not used in other motor vehicles and engines. Since the Agency is deferring a decision for MY20012006 lightduty motor vehicles, we are not proposing a prohibition with respect to the fuel used in these motor vehicles at this time. DOE testing of MY20012006 lightduty motor vehicles is ongoing and EPA expects to make a waiver determination for these vehicles shortly after the results of the DOE testing are available. If EPA does not grant an E15 waiver for MY20012006 lightduty motor vehicles, then we would expect to include the same prohibitions for these MY motor vehicles in the final rulemaking.
\2\ For purposes of this preamble on and offhighway motorcycles are referred to collectively as ``motorcycles.''
\3\ For purposes of this preamble, nonroad engines, vehicles, and equipment are referred to as ``nonroad products.''

Second, we are proposing labeling requirements for fuel pumps that dispense E15 to effectively inform consumers regarding the appropriate fuel to be used in vehicles and engines. Third, EPA proposes that product transfer documents (PTDs) from refiners, gasoline terminals, and oxygenate blenders specify the ethanol content or approved level of ethanol addition, of the fuel being sold to retail stations or wholesale purchaserconsumer to ensure that retail stations and wholesale purchaserconsumers know the level of ethanol content they are buying so that, in turn, the retail pumps can be properly labeled. Fourth, EPA proposes a national survey requirement on ethanol producers and the blenders of E15 (e.g., refiners, gasoline terminals, oxygenate blenders) to ensure that retail station pumps are in fact being labeled properly. EPA is seeking comment on including an RVP component to this national E15 labeling survey to help ensure that summertime RVP requirements are being met throughout the gasoline distribution chain. To avoid confusion for consumers when pumps are not labeled, the Agency is also seeking comment on requiring the labeling of nonE15 pumps. The Agency has used such misfueling mitigation strategies to implement several fuel programs over the past thirty years, including the unleaded gasoline program, the RFG program, and the diesel sulfur program. The Agency believes that the misfueling mitigation measures proposed in this rulemaking, coupled with the E15 waiver and a substantial consumer education and outreach effort by industry, can be an effective strategy to help reduce misfueling and the associated emissions impacts while enabling the use of E15 in appropriate vehicles.

The misfueling mitigation program proposed today generally mirrors the misfueling conditions in today's partial waiver decision. While the waiver provides an opportunity for a fuel or fuel additive manufacturer to meet the conditions, the Agency believes that the proposed safeguards would provide the most practical method of addressing the purposes and satisfying the conditions of today's partial waiver decision.

These misfueling mitigation regulations are proposed under CAA section 211(c), based on the projected emission increases that would be avoided by deterring the use of E15 in older motor vehicles, heavyduty gasoline engines and vehicles, motorcycles and nonroad products. Engineering judgment supported by test data, where available, forms the basis for our technical review and conclusions. Our engineering assessment described in Section VI identifies a number of emissions related concerns with the longterm use of E15 in MY2000 and older lightduty motor vehicles, heavyduty gasoline engines and vehicles, motorcycles, and nonroad products. For motor vehicles these concerns include the potential for catalyst deterioration or catalyst failure as well as material compatibility issues that could lead to extremely elevated exhaust and evaporative emissions. For nonroad products and for motorcycles the misfueling concerns include not only the potential for elevated exhaust and evaporative emissions but also the potential for engine failure from overheating. While it is not possible to quantify precisely the frequency at which motor vehicles and nonroad products might experience these problems with the use of E15, we believe that emissions related problems could potentially occur with enough frequency that the resulting emission benefits from avoiding misfueling would outweigh the relatively low cost imposed by the proposed regulations. This would justify the proposed rule, [[Page 68047]]
even if a very low percentage of vehicle and engines experiences problems.

As described below in Section VI and in the E15 partial waiver decision document,\4\ our assessment indicates that manufacturers have designed at least MY2007 and newer lightduty motor vehicles to be durable for use on gasoline blends up to E15. This conclusion is primarily based on the recently completed catalyst durability test program conducted by the Department of Energy (DOE) wherein they tested 19 vehicle models representative of the Tier 2 motor vehicle fleet out to their full useful life. The study found that Tier 2 motor vehicles continued to meet their emissions standards after operating on E15 for full useful life mileage accumulation. Additionally, according to our analysis of the DOE test data, for Tier 2 motor vehicles we found no statistically significant increases in the emissions of regulated pollutants for motor vehicles operating on E15, and no apparent material compatibility issues, when compared to vehicles that were operated on E0.\5\ These results confirm our engineering assessment that MY2007 and newer motor vehicle's emissions should be less sensitive to the increased ethanol content in E15. This engineering assessment is based on the advances in motor vehicle materials and technology in response to inuse experience with E10 and the requirement that motor vehicles comply with a series of important new EPA emission requirements over the years, e.g., enhanced evaporative emission standards and E10 durability testing, supplemental FTP emission standards, CAP2000 inuse durability requirements, and the Tier 2 motor vehicle standards themselves.
\4\ See Partial Grant and Partial Denial of Clean Air Act Waiver Application Submitted by Growth Energy to Increase the Allowable Ethanol Content of Gasoline to 15 Percent; Decision of the Administrator elsewhere in this issue of the Federal Register. \5\ See Partial Grant and Partial Denial of Clean Air Act Waiver Application Submitted by Growth Energy to Increase the Allowable Ethanol Content of Gasoline to 15 Percent; Decision of the Administrator elsewhere in this issue of the Federal Register.

For MY20012006 lightduty motor vehicles, it is currently less clear whether they could experience significant emission increases when fueled on E15 like MY2000 and older motor vehicles, or continue to function properly like the newer 2007 and newer motor vehicles. On the one hand we believe that many of the same elements for ethanol compatibility of MY2007 and newer lightduty motor vehicles also apply to MY20012006 lightduty motor vehicles (e.g., enhanced evaporative emission standards, SFTP, CAP2000). On the other hand, they were not all required to demonstrate evaporative emission system durability on E10 or to upgrade their catalyst and emission control systems to the extent needed to comply with the Tier 2 standards. Furthermore, currently available test data on these model year vehicles is much more limited. DOE is in the process of developing relevant data for these model year vehicles. Specifically, DOE is conducting catalyst durability testing on six motor vehicle models certified to NLEV standards and two motor vehicles certified to Tier 1 standards scheduled to be completed in November, 2010. Additionally, a study of inuse motor vehicles by Rochester Institute of Technology on E20 \6\ suggests such motor vehicles may operate acceptably on E20and by interpolation E15. However, the mileage accumulation of RIT test vehicles is limited and the study is still ongoing until November 2010. This additional information, as well as information gathered through comment on this proposal and any final decision on a section 211(f) waiver for MY20012006 lightduty motor vehicles, will be considered in the decisions made for the final rule.
\6\ The effect of E20 ethanol fuel on vehicle emissions, B Hilton and B Duddy, Center for Integrated Manufacturing Studies, Rochester Institute of Technology, June 26, 2009. See Docket ID No. EPAHQOAR20100448.

In addition to misfueling mitigation measures, today's action also proposes slight modifications to the Reformulated Gasoline and Antidumping fuels programs to open the way for refiners and importers to produce and certify gasoline containing up to 15 vol% ethanol. To measure compliance with the RFG and antidumping standards, the emissions performance of gasoline is calculated using a model, called the Complex Model, which predicts the emissions of each regulated pollutant based on the measured values of certain gasoline properties. For gasoline to be sold in the U.S., it must comply with the RFG and Antidumping standards and refiners are required to certify that their fuel meets the standards by using the Complex Model. Currently, the equations in the model are limited to an oxygen content of no more than 4.0% by weight in gasoline, which is the maximum possible amount of oxygen in E10. EPA is proposing to modify the Complex Model to allow fuel manufacturers to certify batches of E15 fuel.

Finally, EPA proposes to require that Reid Vapor Pressure (RVP) be identified on PTDs from fuel refineries to oxygenate blenders for conventional gasoline to ensure that EPA summertime RVP requirements are met. This is necessary because the waiver announced today is for blends that meet the summertime gasoline volatility standards for conventional gasoline.\7\ In order to introduce a fuel that meets both the Federal summertime RVP standards and contains between 10 and 15 vol% ethanol, fuel refiners would have to create a fuel or blendstock that has approximately 1.0 psi lower RVP than a fuel or blendstock intended for E10 due to the interaction between gasoline volatility and ethanol when blended. Oxygenate blenders would need to know the RVP of a blendstock or have the intended ethanol content of a blendstock be specified on the PTD to ensure that they know the correct amount of ethanol that should be blended into a fuel. The Agency is not proposing to change RFG PTD requirements found at 40 CFR 80.77 since RVP is carefully controlled throughout the distribution chain in order to comply with summertime RFG VOC emissions performance standards. \7\ See section IV.A. for more information on the 1.0 psi RVP waiver.
II. Background

A. Statutory Authority

CAA section 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 in motor vehicles manufactured after model year 1974 unless it is substantially similar to any fuel or fuel additive utilized in the certification of any model year 1975, or subsequent model year, vehicle or engine under section 206 of the Act.

Section 211(f)(4) of the Act provides that upon application by any fuel or fuel additive manufacturer, the Administrator may waive the prohibition of section 211(f)(1). A waiver may be granted if the Administrator determines that the applicant has established that the fuel or fuel additive, and the emission products of such 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 with the emission standards to which the vehicle or engine has been certified. In other words, the Administrator may grant a waiver for an
[[Page 68048]]
otherwise prohibited fuel or fuel additive if the applicant can demonstrate that the fuel or fuel additive will not cause or contribute to engines, vehicles or equipment failing to meet their emissions standards over their useful life.

EPA previously issued a ``substantially similar'' interpretive rule for unleaded gasoline which allows oxygen content up to 2.7% by weight for certain ethers and alcohols.\8\ E10 contains approximately 3.5% oxygen by weight, which means E10 is not ``substantially similar'' to certification fuel under the current interpretation. As explained at 44 FR 20777 (April 6, 1979), E10 received a waiver of the substantially similar prohibition by operation of law since EPA did not grant or deny a waiver request for a fuel containing 90% unleaded gasoline and 10% ethyl alcohol within 180 days of receiving that request. This waiver by operation of law was based on the then current terms of CAA section 211(f)(4), which has subsequently been amended.

\8\ See 56 FR 5352 (February 11, 1991).

Section 211(c)(1) of the Act allows the Administrator, by regulation, to ``control or prohibit the manufacture, introduction into commerce, offering for sale, or sale of any fuel or fuel additive for use in a motor vehicle, motor vehicle engine, or nonroad engine or nonroad vehicle (A) if, in the judgment of the Administrator, any fuel or fuel additive or any emission product of such fuel or fuel additive causes, or contributes, to air pollution or water pollution (including any degradation in the quality of groundwater) 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 which is in general use, or which the Administrator finds has been developed to a point where in a reasonable time it would be in general use were such regulation to be promulgated.'' Today's proposed misfueling regulations are based on this authority in section 211(c)(1), as well as our recordkeeping and information collection authority under sections 208 and 114.

B. E15 Waiver Request

On March 6, 2009, Growth Energy and 54 ethanol manufacturers submitted an application to EPA for a waiver under section 211(f)(4) of the CAA. This application sought a waiver for ethanolgasoline blends of up to 15 vol% ethanol.\9\ On April 21, 2009, EPA published notice of the receipt of the application, and, as required by CAA section 211(f)(4) of the Act, EPA requested public comment on all aspects of the waiver application, to assist the Administrator in determining whether the statutory basis for granting the waiver request for ethanolgasoline blends containing up to 15 vol% ethanol had been met. (See 74 FR 18228).
\9\ Since E15 has greater than 2.7 wt% oxygen content, E15 needs a waiver under CAA section 211(f)(4).

In a separate action today, EPA waived the prohibition in CAA section 211(f)(1) to allow introduction into commerce of E15 for use in MY2007 and newer lightduty motor vehicles, including passenger cars, lightduty trucks and medium duty passenger vehicles (hereafter light duty motor vehicles). EPA is deferring a decision concerning MY2001 2006 lightduty motor vehicles, and has denied the waiver for all other motor vehicles.\10\ EPA's partial waiver decision is based on a determination that E15 will not cause or contribute to a failure of MY2007 and newer lightduty motor vehicles to achieve compliance with the emissions standards to which they were certified under section 206 of the CAA over their useful lives. EPA is still evaluating the effect of E15 on MY20012006 lightduty motor vehicles to determine whether a waiver of CAA section 211(f)(1) is appropriate for use of E15 in those motor vehicles. EPA also decided that it could not make such a determination and therefore was denying the waiver for all other motor vehicles, including MY2000 and older lightduty motor vehicles. EPA requests comment and additional information regarding the use of E15 in MY 2000 and older motor vehicles.
\10\ See Partial Grant and Partial Denial of Clean Air Act Waiver Application Submitted by Growth Energy to Increase the Allowable Ethanol Content of Gasoline to 15 Percent; Decision of the Administrator elsewhere in this issue of the Federal Register.

EPA issued the partial waiver with several conditions, some of which would be fulfilled by the safeguards being proposed today. The conditions apply to the upstream parties subject to the waiver (refiners, producers of ethanol and oxygenate blenders that introduce E15 into commerce), and are designed to ensure that when E15 is introduced into commerce, it will only be used in the appropriate lightduty motor vehicles. Some of the conditions call for the ethanol blenders, fuel manufacturers, and fuel additive manufacturers (ethanol producers) to take various actions to control the distribution and use of their product so that E15 is only used in approved motor vehicles. The partial waiver imposes different conditions on the different parties. Ethanol blenders, fuel manufacturers, and ethanol producers that introduce E15 into commerce are all responsible for making sure that appropriate labeling occurs on fuel pumps to mitigate potential misfueling. However, this condition, in particular, may be difficult for these parties to satisfy given their limited control over actions taken at retail, which, as discussed below, prompted today's proposal for fuel pump labels. All three parties are also responsible for conducting fuel pump labeling surveys to ensure that pumps are properly labeled and that the correct ethanol blends are loaded into the appropriate tanks at retail stations. Ethanol blenders and fuel manufacturers must also use PTDs to properly document information regarding the ethanol blends to help ensure proper blending and distribution.

In June 2010 EPA received a request from ADM to consider, within the context of the E15 waiver application, a waiver for E12 for all motor vehicles.\11\ As discussed in the E15 waiver decision document, EPA concluded that there was insufficient basis to support such a waiver for motor vehicles or nonroad products beyond the MY2007 and newer model year lightduty motor vehicles for which the E15 waiver was being granted.
\11\ Woertz, P.A. Letter to Lisa P. Jackson. 7 June 2010. See Docket ID EPAHQOAR20090211.

C. Reasons for the Proposed Actions in This Rulemaking

The proposed rules would directly prohibit or control the distribution and use of E15. The rules would apply to parties such as retail stations that are not directly subject to the conditions on the waiver. Collectively, these provisions would mitigate misfueling and maximize the likelihood that E15 is only used in approved motor vehicles. This would also promote the successful introduction of E15 into commerce. The specific provisions are discussed in detail in Sections IIIV.

In this action, the Agency is proposing to use its authority to help minimize the potential for emissions increases associated with misfueling with E15. Importantly, the proposed safeguards would also assist the ethanol producers and blenders in carrying out the conditions of the waiver. EPA realizes that ethanol blenders, fuel manufacturers, and ethanol producers
[[Page 68049]]
may have difficulty satisfying the conditions outlined in the E15 partial waiver decision, particularly the fuel pump labeling requirements. Most retail stations are independently owned and operated, which may make it difficult for the ethanol blenders, fuel manufacturers, and ethanol producers to ensure that labels are properly placed on fuel pumps dispensing E15. Under CAA section 211(f)(4), EPA is limited in what kind of conditions it can place on a waiver decision and on whom those conditions may be placed. For example, EPA placed the partial waiver conditions on the ethanol blenders, fuel manufacturers, and ethanol producers, the parties subject to the prohibition in section 211(f)(1), and not on the retail stations. This makes it difficult to ensure effective or complete pump labeling and misfueling mitigation. Without Agency action that requires the provisions proposed in today's rulemaking (i.e. fuel pump labeling, PTDs, and a national survey), the conditions contained in the E15 partial waiver decision would likely make the distribution of E15 impracticable. However, under CAA section 211(c), EPA has the authority to adopt appropriate controls or prohibitions on the distribution and sale of fuels and fuel additives to avoid emissions increases. EPA's proposed use of this authority would also assist the ethanol blenders, fuel manufacturers, and ethanol producers in carrying out the conditions of the partial waiver so the conditions on the E15 partial waiver are properly implemented. Today's rulemaking also provides EPA with additional tools for regulatory oversight of the ethanol blenders, fuel manufacturers, and ethanol producers introducing E15 into commerce.

D. Federalism Implications

As mentioned in Section II.A, the proposed prohibition regarding use of E15 in MY2000 and older vehicles, heavyduty gasoline engines and vehicles, motorcycles, and nonroad engines, vehicles, and equipment is based on the authority in section 211(c)(1) of the Act, as well as our recordkeeping and information collection authority under sections 208 and 114. Section 211(c)(4)(A) of the CAA provides that no State or political subdivision thereof may prescribe or attempt to enforce ``for purposes of motor vehicle emission control'' any control or prohibition ``respecting any characteristic or component of a fuel or fuel additive'' in a motor vehicle or motor vehicle engine if EPA has prescribed a control or prohibition applicable to such characteristic or component of the fuel or fuel additive under section 211(c)(1). This prohibition applies to all States except California, as provided in section 211(c)(4)(B). Also, section 211(c)(4)(A) applies only to controls or prohibitions respecting any characteristics or components of fuels or fuel additives for motor vehicles or motor vehicle engines, that is, highway vehicles. Therefore, a State control or prohibition would be preempted under section 211(c)(4)(A), only if it is ``for the purposes of motor vehicle emission control.'' Further, even if a State rule is established for purposes of motor vehicle emission control, it will not be preempted under section 211(c)(4)(A) unless it is for the same ``characteristic or component of a fuel or fuel additive in a motor vehicle or motor vehicle engine'' for which EPA has prescribed a control or prohibition under section 211(c)(1)(A). Today's action proposes a rule that would limit the ethanol content in fuel used in certain vehicles and engines as well as proposes misfueling mitigation measures to effectuate that limitation.

The Agency is not aware of any State rules or laws that would be preempted by today's proposed rule if adopted. States have not controlled ethanol volumes in gasoline for purposes of motor vehicle emission control. Also, our rule would not require States to change their existing labels. The rule as proposed would impose no substantial direct costs, nor would it have any substantial direct effects on State or local governments. EPA requests comments on the issue of preemption of State fuel programs.

Further, EPA consulted with State and local officials early in the process of developing the proposed action to permit them to have meaningful and timely input into its development. EPA met with members of the National Association of Clean Air Agencies (NACAA) to discuss the nature of today's proposed rule. Additionally, we provided State and local governments an opportunity to provide comment on the implementation of misfueling mitigation measures for a partial E15 waiver in both the RFS2 NPRM (see 74 FR 25016) and the E15 waiver request notice (see 74 FR 18228). We received comments from only one State on this issue in the RFS2 NPRM, and it supported efforts for properly labeling fuel pumps containing gasolineethanol blends. III. Misfueling Mitigation Measures

As explained above, CAA section 211(c) grants the Agency authority to control or prohibit the distribution of a fuel or fuel additive when it will significantly impair emission controls or the emission products from that fuel will cause or contribute to air pollution that we reasonably anticipate may endanger public health or welfare. As more fully discussed in Section VI, we are proposing to prohibit use of E15 in MY2000 and older lightduty motor vehicles, and in all heavyduty gasoline engines and vehicles, motorcycles and nonroad products based on the projected increased emissions that would occur from using E15 in those motor vehicles and nonroad products. We are also proposing to prohibit gasoline retail stations and wholesale purchaserconsumer facilities from selling E15 for use in these products if pumps at those locations are not properly labeled. Since the Agency is deferring a decision for MY20012006 lightduty motor vehicles, we are not proposing a prohibition for fuel used in these motor vehicles at this time. DOE testing of MY20012006 lightduty motor vehicles is ongoing and EPA expects to make a waiver determination for these vehicles shortly after the results of the DOE testing are available. If EPA does not grant an E15 waiver for MY20012006 lightduty motor vehicles, then we would expect to include the same prohibitions for these MY motor vehicles in the final rulemaking .\12\
\12\ Even though we are not proposing an actual prohibition for motor vehicles MY20012006, it is still unlawful to use E15 in these motor vehicles until an E15 waiver is granted for these motor vehicles.

EPA is proposing a misfueling mitigation strategy to effectuate those proposed prohibitions and to more generally limit the use of E15 to MY2007 and newer lightduty motor vehicles as approved today in the E15 partial waiver decision. We believe that there are four important components to an effective misfueling mitigation strategy for reducing the potential for misfueling with E15. First, effective labeling is a key factor. Labeling is needed to inform consumers of the potential impacts of using E15 in vehicles and engines not approved for its use, to mitigate the potential for intentional and unintentional misfueling of these vehicles and engines. Labeling is also done at the point of sale where the consumer most likely will be choosing which fuel to use. Second, retail stations and wholesale purchaserconsumers need assurance regarding the ethanol content of the fuel that they purchase so they can direct the fuel to the appropriate storage tank and properly label their fuel pumps. The use of proper
[[Page 68050]]
documentation in the form of PTDs has proven to be an effective means of both ensuring that retail stations know what fuel they are purchasing and as a possible defense for retail stations in cases of liability in the event of a violation of EPA standards. Third, national labeling and fuel sampling surveys are necessary to ensure that retail stations are complying with labeling requirements, ethanol blenders are not blending more than the stated amount of ethanol on PTDs, and assuring downstream compliance for fuel refiners. The Agency has used this general strategy to implement several fuel programs over the past thirty years, including the unleaded gasoline program, the RFG program, and the diesel sulfur program. EPA solicits comments on all of these provisions as more fully described below.

The fourth component of an effective misfueling mitigation strategy is effective public outreach and consumer education. Outreach to consumers and stakeholders is critical to mitigate misfueling incidents that can result in increased emissions and vehicle or engine damage. Consumers will need to be engaged through a variety of media to ensure that accurate information is conveyed to the owners and operators of vehicles and engines.

The misfueling mitigation program proposed today generally mirrors the misfueling conditions in today's partial waiver decision. While the waiver provides an opportunity for a fuel or fuel additive manufacturer to meet the conditions, the Agency believes that the proposed the measures would provide the most practical method of meeting the purposes of and satisfying the conditions of today's partial waiver decision.

A. Labeling Requirements

Today's rule proposes to require that retailers and wholesale purchaserconsumers who choose to sell or dispense E15 must label any dispensers of this gasolineethanol blend. We are also seeking comment on requiring that dispensers of other gasolineethanol blends that contain 10 vol% ethanol or less to be labeled at such time as a retail station chooses to dispense E15 to help alleviate any confusion to consumers. Additionally, we seek comment on requiring labels for E85 pumps and blender pumps.

1. E15 Labels

We are proposing requirements that gasoline pumps dispensing E15 be labeled. The label would have to indicate that the fuel contains up to 15 vol% ethanolthat is, the fuel is a gasolineethanol blend that contains greater than 10 vol% ethanol but not more than 15 vol% ethanol. Retailers and wholesale purchaserconsumers who choose to sell E15 would be required to label pumps dispensing E15, clearly indicating that the fuel should not be used in MY2000 and older motor vehicles, motorcycles, heavyduty gasoline engines and vehicles, or any nonroad products. However, EPA also proposes that the label would be modified if the E15 waiver is extended to earlier model year vehicles and/or nonroad products.

Based on the Agency's experience with fuel pump labeling for Ultra Low Sulfur Diesel (ULSD) and Low Sulfur Diesel (LSD) (see 40 CFR 80.570), there are four important elements to an effective label for misfueling. The Agency proposes that the language of the E15 label would have four components: (1) An information component; (2) a legal approval component; (3) a technical warning component; and (4) a legal warning component. Together, these four components highlight the critical information necessary to inform consumers about the impacts of using E15.

a. Information Component

The first component informs consumers of the maximum ethanol content the fuel may contain. For E15, the Agency proposes that the information component of the label should contain two aspects, both an acronym for the fuel (in this case E15) and a description of what the acronym means (in this case informing consumers that the fuel may consist of a range of ethanol up to a maximum of 15 vol% ethanol by volume). We propose that this component of the label read:

This fuel contains 15% ethanol maximum
We propose that this label be applied to any fuel dispenser with greater than 10% ethanol but not more than 15 vol% ethanol. Thus, in the case of any midgrade fuel that might be blended from E10 and E15, it would also be required to have the E15 label.

b. Legal Approval Component

The second component of the label language would include information that informs consumers of what vehicles and engines are approved to use E15, mirroring EPA's decisions taken in the waiver context. Since EPA granted a partial waiver of E15 limiting its legal use to MY2007 and later lightduty motor vehicles, its use is only permitted in these motor vehicles. Based on the partial waiver, the Agency proposes that this portion of the label read as follows: Use only in:

2007 and newer gasoline cars

2007 and newer lightduty trucks

Flexfuel vehicles.
As discussed elsewhere in today's proposal, if EPA decides to include more model years in a subsequent waiver decision based on the findings of the testing program, then the model year distinction on the label would also need to be adjusted accordingly. We anticipate this will occur before this rulemaking is finalized, and we will make that adjustment in the final rule. Therefore, the proposed language could read as follows:
Use only in:

2001 and newer gasoline cars

2001 and newer lightduty trucks

Flexfuel vehicles.

c. Technical Warning Component

The third component of the label language would alert consumers that use of E15 in other engines, vehicles, and equipment might cause damage to these products. Our experience with past labeling provisions supports the need for both the legal and technical warning so that consumers are informed of the reason for the prohibition. As discussed more fully in Section VI, it appears that use of E15 in these particular products may not only lead to increased emissions but also has the potential, even if limited in nature, to lead to damage of motor vehicle and nonroad product components. Without this component to the label, consumers may more likely be tempted to misfuel
particularly if the price in the marketplace for E15 is lower than E10. Therefore, EPA proposes the following language: ``This fuel might damage other vehicles or engines.''

d. Legal Warning Component

The fourth component of the label would inform consumers that using E15 in a vehicle or engine not approved for E15 use violates Federal law. This is similar to the approach used to mitigate the use of LSD in 2007 and newer onhighway diesel engines. Based on that experience, EPA believes that explicitly notifying consumers that E15 is prohibited by Federal law for use in MY2000 and older motor vehicles, heavyduty gasoline engines and vehicles, on and offhighway motorcycles, and all nonroad products will result in consumers being less likely to misfuel.

Based on the language currently used on the LSD label (see 40 CFR 80.570), the Agency proposes that the label read
[[Page 68051]]
as follows: ``Federal law prohibits its use in other vehicles and engines.''

The Agency has traditionally had ``WARNING'' language appear before the legal warning component to better draw consumers' attention to the prohibition of using a fuel in certain vehicles and engines (e.g. LSD in 2007 and newer highway diesel vehicles). After consultation with stakeholders, it was suggested that the Agency should both change ``WARNING'' to ``CAUTION!'' and place this language at the top of the label. This would draw consumer attention to the label and help mitigate both intentional and unintentional misfueling. Therefore, we propose to have the word ``CAUTION!'' appear at the top of the label before the information component. The Agency also considered the use of the word ``ATTENTION'' instead of ``WARNING'' or ``CAUTION.'' We specifically seek comment on using the term ``CAUTION!'' versus ``WARNING'' or ``ATTENTION''. In addition, the Agency is also interested in whether using ``STOP'', with or without including a depiction of a stop sign, would be an appropriate way to draw consumers' attention to the label. We seek comment on whether there are other words that would better convey the message to consumers. e. E15 Label Proposal

Taken together, the Agency proposes the following E15 label: [GRAPHIC] [TIFF OMITTED] TP04NO10.000

EPA seeks comment on all aspects of the label language. For example, we seek comment on whether any additional label language should be required or whether any language should be removed. In particular, we seek comment on ways to portray the information in ways that are the most concise and meaningful to consumers. EPA proposes that the pump labels for E15 be required to be placed on pumps that will dispense E15 prior to any commercial sale of E15.

One issue that arose from the labeling provisions of the diesel sulfur program was that the diesel sulfur labeling provisions were written in a way that allowed flexibility in color and design, causing retailers difficulty with coming up with a suitable design that satisfied EPA labeling requirements at the least possible cost. To help address this issue, stakeholders met with EPA to discuss standardized label designs that would both satisfy EPA diesel sulfur requirements and make it easier for retail stations to procure labels. Labeling templates were designed and made available to retail stations to use. Based on this experience, we are proposing more explicit specifications for the E15 label, covering not only the content, but also the appearance of the E15 pump label.

In today's rulemaking, we are proposing similar appearance and placement requirements for the E15 labels that were required for the diesel sulfur program labels. We propose that the titles of the labels (e.g., E15) must be 24point, white, bold Arial font, the ``CAUTION!'' text should also be red, uppercase 16point bold type, the text in the labels which describes the ethanol content of the fuel must be 20point type and that all other required language in the labels must be 14 point black, Arial font. We propose that the word ``prohibits'' be in 14 point, black, bold, italic, Arial font. All text should be centered with the arrangement and spacing of the text consistent with the illustration. We further propose that the label be 3.625'' width by 3.125'' height and that the background for the area which includes ``CAUTION!'', the title (i.e. ``E15''), and the ethanol content (i.e., ``15% Ethanol Maximum) shall be 1inch wide and neonorange in color, except that a rectangular white background large enough to encompass ``CAUTION!'' shall be superimposed on this neonorange background. While we believe it is important to propose these specific label appearance requirements to aid in consumer recognition and avoid unnecessary burden on retailers in developing their own designs, we also recognize that there is a great deal of variation in the design of fuel pumps and dispensers throughout the nation. Consequently, we not only seek comment on all visual aspects of our proposed label, but also suggest that if changes are deemed necessary, regulated and other interested parties work together to provide us with a consensus recommendation in their comments, if possible.

In addition to content and appearance, the placement of the label on the pump is also of concern given the limited space available on the fuel pump itself. In the diesel sulfur program
[[Page 68052]]
we required that labels must be placed on the vertical surface of each pump housing and on each side that has gallon and price meters and that labels be on the upper twothirds of the pump in a location where they are clearly visible (see 40 CFR 80.570(d)). We propose the same placement requirements for the E15 labels. However, since most States require labels for gasoline blended with ethanol and the Federal Trade Commission (FTC) requires labels specifying minimum octane levels across grades of gasoline, the addition of the proposed E15 label may impact placement of other labels required by State or Federal law. Furthermore, FTC has proposed a midlevel ethanol gasolineblend label (described below) in addition to its octane label which may further confuse consumers and make E15 label placement difficult. The Agency seeks comment on the proposed placement of the E15 label in order to most effectively mitigate misfueling, while at the same time avoid interference with other labels on the pumps.

2. Additional Fuel Pump Labeling Requirements

In addition to the E15 label proposed above, the Agency is seeking comment on three additional fuel pump labels that would provide consistent labeling across all gasoline fuel pumps. First, the Agency seeks comment on requiring a label on gasoline dispensing fuel pumps that are dispensing fuels which contain ethanol in concentrations up to 10 vol% (``E10 label'').\13\ We further seek comment on whether E10 labels should be required at a retail station only if and when E15 is made available for sale at a particular retail station. Such an E10 label would have similar appearance and location requirements to the E15 label and the required label language would follow a similar form to that of the E15 label so as to standardize labels for consumers. \13\ If the fuel contains no ethanol, it could be labeled as such.

The purpose of such a label would be to enhance the effectiveness of the E15 label to protect against consumer misfueling and the associated emissions impacts. Without such labels, consumers may be confused regarding whether an unlabeled pump was appropriate for their vehicle or engine, undercutting the effectiveness and confidence in the E15 label. This approach is consistent with the labeling requirements we used in the diesel sulfur program where we required the use of labels specifying which type of diesel fuel (lowsulfur diesel, ultra low sulfur diesel, etc.) was being dispensed from each pump dispensing diesel fuel.

However, since increasing the number of labels will increase the total cost to retail stations by requiring that all gasoline dispensing fuel pumps at a station be labeled, we seek comment on the appropriateness of such a requirement. The Agency seeks comment on the following E10 label language:

E10
(Contains up to 10% Ethanol)

For use in all gasoline vehicles and engines.

The Agency also seeks comment on requiring a label on pumps distributing E85 fuel. E85 is fuel that contains up to 85 vol% ethanol and at least 15 vol% gasoline, used by flex fuel vehicles (FFVs).\14\ As we noted in the RFS2 NPRM, fuel retailers expressed concern that if E85 were priced low enough to encourage FFV owners to fuel on it more frequently, then owners of nonFFVs would also be enticed to misfuel on it (see 74 FR 24977). This could cause the vehicles and equipment to operate very poorly, increasing emissions, as well as cause potential longterm damage and longterm emissions increases. We believe that in most cases fuel pump labels warning that the use of E85 in nonflex fuel vehicles is illegal, can damage the vehicle, and can void vehicle manufacturer warranties may be a sufficient disincentive to mitigate intentional misfueling. NonFFVs and nonroad products were not designed for operation on E85 and may experience serious emissions increases, operability, and driveability issues, particularly with prolonged use (e.g. accelerated catalyst deterioration, fuel system component failures, etc.).
\14\ FFVs are vehicles or engines that are designed to run on gasoline or gasolineethanol blends up to E85.

Such an E85 label would have similar appearance and location requirements to the E15 label (discussed above) and the required label language would follow a similar form to that of the E15 label. The Agency seeks comment on the following E85 label language:
E85
(Contains up to 85% Ethanol)

For use in flexfuel vehicles only.

WARNING

Federal law prohibits use in all other vehicles and engines.

May damage these vehicles and engines.
We request comment on whether the proposed labeling requirements would provide sufficient warning to consumers not to refuel nonflexfuel vehicles with E85. Additionally the Agency seeks comment on the label language for the E85 label.

The Agency also seeks comment on requiring labels for socalled blender pumps. Blender pumps allow station owners to blend E85 and gasoline in their storage tanks to create intermediate gasolineethanol blends. This allows either station owners or potentially FFV drivers to choose which gasolineethanol blend they prefer, based on operating characteristics and price. During both the RFS2 and E15 waiver request comment periods, the Agency received several comments asking us to require labeling provisions for blender pumps to address misfueling. Similar to E85, consumers may misfuel their nonFFVs and engines on ethanol blends greater than 10% (greater than 15% for 2007 and newer lightduty motor vehicles) due to possible price differences between intermediate ethanol blends and gasoline. NonFFVs and nonroad products were not designed for operation on such high levels of ethanol and may experience serious emission, operability, and driveability issues, particularly with prolonged use (e.g. accelerated catalyst deterioration, fuel system component failures, etc.).

Such a blender pump label would have similar appearance and location requirements to the E15 label (discussed above) and the required label language would follow a similar form to that of the E15 label. The Agency seeks comment on the following two blender pump label language options. The first option's language addresses a situation where a vehicle operator can ``dial'' their own gasolineethanol blend level.
E15E85
(Contains between 15% and 85% ethanol)

For use in flexfuel vehicles.

WARNING

Federal law prohibits use in all other vehicles and engines.

May damage these vehicles.

The second option's language is to provide for a specific blend of higher than 15 vol% ethanol content within this range, in which case the station owner would replace the option 1's language with the specific value. The language for option 2 would be as follows: EXX
(Contains up to XX% Ethanol)

For use in flexfuel vehicles.

WARNING

Federal law prohibits use in all other vehicles and engines

May damage these vehicles and engines.
On this label, ``XX'' is the exact maximum ethanol content a fuel dispensed from a particular blender
[[Page 68053]]
pump setting is expected to dispense that is greater than 15 vol% ethanol.

The blender pump labels would not need to specify blends containing between 10 and 15% ethanol because any such fuel pumps would be required to display the E15 label. However, since a blender pump may dispense several intermediate ethanol blends (e.g. E20, E30, E40, etc.), the label should specify a range of ethanol content from E15 through E85. Therefore, under this second option the blender pump would have multiple labels for each of the blends that the pump dispenses. 3. Stakeholder Labeling Suggestions

In anticipation of this proposal, EPA met with several stakeholders to discuss the potential label language used for the E15 label language. To date, the Agency has received label language suggestions from Growth Energy.\15\ AllSAFE and the American Petroleum Institute provided EPA with their public comments to the FTC labeling proposal.\16\ Copies of these labeling recommendations may be viewed in the docket.\17\ We have considered the suggestions in these comments for our proposal, but nevertheless seek comment on whether and if so how to modify our label proposals based on these and other suggestions. \15\ Buis, T. Letter to Karl Simon. 4 April 2010. See Docket ID No. EPAHQOAR20100448.
\16\ See Docket ID No. EPAHQOAR20100448.
\17\ Federal Trade Commission, `` 335; FTC File No. R811005; 16 CFR Part 306: The Federal Trade Commission Rule For Automotive Fuel Ratings, Certification and Posting: Notice of Proposed Rulemaking and Request for Comments.'' September 2010. Available at http://www.ftc.gov/os/comments/fuelratingnprm/ index.shtm.

4. FTC Labeling Proposal

On February 26, 2010, the Federal Trade Commission (FTC) issued a proposed rulemaking that proposes explicit requirements for gasoline ethanol blends that contain more than 10 vol% ethanol and less than 70 vol% ethanol (``MidLevel Ethanol blends'') (see 75 FR 12470). Since the FTC labeling proposal did not contemplate the granting of a waiver for E15, it would have to be modified to be consistent with our recent E15 partial waiver decision. In addition, as discussed above, we believe it is important that the label contain certain components and language necessary to both inform and warn the consumer that are not fully captured in the FTC labels.

Therefore, EPA is working with FTC to develop coordinated labeling requirements and seeks comment on how best to achieve this outcome. Preferably, one label would be developed that meets EPA and FTC labeling requirements, since imposing separate labeling requirements may confuse consumers and would ultimately limit the effectiveness of labeling to mitigate misfueling. Requiring two separate labels would also create issues concerning the placement of the E15 label and may impose an unnecessary burden on retail stations. Finally, we also believe that to ensure the effectiveness of all gasoline pump labels, it is important that they be of similar type and format (i.e. those for E10, E15, E85, and blender pumps).

5. Labeling Requirements and Liability for Misfueling

It is important to note that compliance with the labeling requirements specified in this rule does not protect responsible parties from liability for misfueling. Today's regulations not only impose labeling requirements but also a prohibition of the sale or offer for sale of E15 for use in unapproved engines, vehicles, and equipment (see section III.G below). Compliance with the labeling requirement does not ensure that the responsible parties have not made prohibited sales. In addition, our regulations do not address issues of common law or contract liability between private parties.

B. Product Transfer Document Requirements

Product transfer documents (PTDs) are customarily generated and used in the course of business and are familiar to parties who transfer or receive blendstocks, base gasoline for oxygenate blending and oxygenated gasoline. In addition, EPA has historically put in place certain requirements for PTDs for reformulated gasoline blends and blendstocks to help ensure downstream compliance with our fuel standards. The introduction of E15 into the marketplace results in the need for additional information on the PTDs that accompany the transfer of gasoline and the base gasoline/gasoline blendstocks used for oxygenate blending, both for reformulated gasoline and conventional gasoline. The type of additional information needed is different upstream versus downstream of the point of ethanol addition. We believe that the additions discussed below to existing PTDs are necessary to minimize misfueling, to help ensure downstream compliance with our fuel standards, and thereby to support the introduction of E15.
1. PTD Requirements Downstream of the Point of Ethanol Addition

Downstream of the point where ethanol blending takes place, information on the maximum ethanol concentration in the ethanol blend is needed to help ensure that fuel shipments are delivered into the appropriate storage tanks at retail and fleet fueling facilities.\18\ Information on the maximum Reid Vapor Pressure (RVP) of E0, E10 and E15 blends is needed on PTDs to help ensure that the fuel is compliant with the applicable summertime RVP requirements. The RVP reported on the PTD for E10 and E15 blends could be based on the intended RVP that the manufacturer of the blendstock for oxygenate blending designed for as identified on the PTD for the blendstock.\19\ Therefore, RVP testing after the addition of ethanol would not be necessary to provide the information on RVP that would be required on the PTD.
\18\ Currently, ethanol blending typically takes place at the terminal. Evaluations are underway which may facilitate the shipment of ethanolgasoline blends by pipeline to terminals. Hence, although the proposed PTD requirements regarding maximum ethanol content currently would typically apply to parties downstream of the terminal, parties upstream of the terminal may need to include information on maximum ethanol concentration on product PTDs in the future.
\19\ This is dependent on the proper amount of ethanol being added to the blendstock, and on the product being segregated from all products with a different RVP.

We are proposing that the following statements would be included on the PTDs for the various fuel blends:

For E0: ``E0: Contains no ethanol.

The RVP does not exceed [Fill in appropriate value]'' For E10: ``E10: Contains between 9 and 10 volume percent ethanol

The RVP does not exceed [Fill in appropriate value]'' For E15: ``E15: Contains up to 15 volume percent ethanol

The RVP does not exceed [Fill in appropriate value]'' For EXX: ``EXXContains up to XX% ethanol.
``EXX'' refers to fuels blends above E15 up to and including E85 and fuel blends below 9 volume percent ethanol. The maximum potential ethanol content of the fuel would be required to be specified on the PTD in the place of ``XX''.

We request comment on whether additional language on E10 PTDs is needed to inform parties that a blend containing between 9 and 10 volume percent ethanol which benefits from the 1 psi RVP waiver may not be commingled with an E0 or E15 blend.\20\ We request comment on whether any other additional information should be
[[Page 68054]]
provided on the PTDs for ethanol fuel blends.
\20\ Such as, ``Designed for the special RVP provisions for ethanol blends. Do not blend with gasoline containing less than 9 vol% ethanol or E15.''
2. PTD Requirements Up to and Including the Point of Ethanol Addition

Upstream of the point where E10 and E15 blends are manufactured, information is needed on the PTDs for base gasoline or gasoline blendstock used for oxygenate blending (BOB) \21\ to facilitate ethanol blender compliance with the applicable EPA summertime RVP
requirements.\22\ This information would need to include the maximum potential RVP of the BOB and the maximum ethanol concentration that may be added to the BOB.
\21\ For purposes of this discussion, the blendstock or base gasoline (BOB) is typically referring to the fungible base gasoline produced at a refinery for the specific intention of adding ethanol. The fungible gasoline produced for this purpose is subject to all of the 40 CFR parts 79 and 80 regulations applicable to gasoline. However, under 40 CFR 80.101(d)(4), a refiner with direct control of the ethanol addition to the actual gasoline prod

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: 7342144131; Fax number: 7342144816; Email address: macallister.julia@epa.gov, or Assessment and Standards Division Hotline; telephone number (734) 2144636; Email address asdinfo@epa.gov.