Reminder: New Ethanol Producer Requirements Under Tier 3

This is a reminder that denatured fuel ethanol (DFE) producers and importers are subject to new requirements under the Tier 3 sulfur regulations, effective January 1, 2017.  The below is a quick recap of the requirements:

• Registration (§80.1650) 

   

  • Register by November 1, 2016
  • Company registration required
  • Facility registration required
• Standards (§80.1610) 
  • Sulfur content shall not exceed 10 ppm
  • Concentration of all denaturants is limited to 3.0 volume percent 
• Sampling and Testing Requirements (§80.1642)
  • Must collect a representative sample from each batch, using the sampling methods specified in §§80.8 or 80.47
  • Must test each batch for sulfur content, using a test method under §§80.46 and 80.47 (method qualification and statistical quality control is critical) 
  • Alternative to testing each batch for sulfur content:
    • Producers or importers of “certified denaturant” must register with the EPA
    • Certified denaturant can only be composed of carbon, hydrogen, nitrogen, oxygen and sulfur
    • Denaturant must be gasoline, gasoline blendstocks or natural gas liquids 
    • Sulfur content of the certified denaturant shall not exceed 330 ppm
    • The DFE producers or importers must receive product transfer documents (PTDs) indicating that the denaturant is certified denaturant—see §80.1611 for full PTD requirements
    • If these requirements are met, then the DFE producers or importers may calculate the sulfur content on a volume-weighted basis, using the sulfur content of the certified denaturant (as noted on the PTDs received) and the neat (un-denatured) ethanol.   The sulfur content of the neat ethanol used in the calculation may be assumed, if in concert with a quality assurance/quality control program.   
• PTDs (§80.1651)
  • On each occasion when DFE is transferred to another party (custody or title), it must be accompanied by a PTD
  • The PTD information must include, among other things, “Denatured fuel ethanol, maximum 10 ppm sulfur.”    
• Reporting (§80.1652)
  • Must submit batch reports to EPA, including the DFE volume, sulfur content and test method 
• Recordkeeping (§80.1653)
  • Must maintain testing records and create batch numbers for each batch produced
  • Must maintain all relevant records (test records, PTDs, etc.) for five (5) years
• Attest Engagements
  • No DFE attest engagement currently required beyond that noted under the Renewable Fuels Standard  

Be advised that these same general requirements are applicable to producers and importers of other oxygenates, as well.  

We suggest that our clients pass this alert on to their ethanol suppliers, to ensure compliance.

Should you have any questions surrounding the Tier 3 requirements, please contact Vance Kopp or Erv Pickell.