80.536—How are NRLM diesel fuel credits used and transferred?
(a) Credit use stipulations.
Credits generated under § 80.535(a) and (b) may be used to meet the NRLM diesel fuel sulfur standard of § 80.510(a), and credits generated under 80.535(c) and (d) may be used to meet the NR and NRLM diesel fuel sulfur standard of 80.510(b) and (c), respectively, provided that:
(b) Using credits generated under
Credits generated under § 80.535 may be used by a refiner or an importer to comply with the diesel fuel standards of § 80.510 (a), (b), and (c) by applying one credit for every gallon of diesel fuel that does not comply with the applicable standard.
(c) Credit banking.
Credits generated may be banked for use at a later time or may be transferred to any other refiner or importer nationwide for use as provided in paragraph (d) of this section.
(d) Credit transfers.
(1)
Credits generated under § 80.535 that are obtained from another refiner or importer may be used to comply with the diesel fuel sulfur standards of § 80.510(a), (b), and (c) if all the following conditions are met:
(i)
The credits are used in compliance with the time period limitations for credit use in this subpart;
(ii)
Any credit transfer is completed no later than August 31 following the compliance period when the credits are used to comply with a standard under paragraph (a) of this section;
(A)
The first transfer by the refiner or importer who generated the credit may only be made to a refiner or importer that intends to use the credit; if the transferee cannot use the credit, it may make a second and final transfer only to a refiner or importer who intends to use the credit; and
(iv)
The credit transferor applies any credits necessary to meet the transferor's annual compliance requirements before transferring credits to any other refinery or importer;
(v)
No credits are transferred that would result in the transferor having a negative credit balance; and
(vi)
Each transferor supplies to the transferee records indicating the year the credits were generated, the identity of the refiner (and refinery) or importer that generated the credits, and the identity of the transferor, if it is not the same party that generated the credits.
(2)
In the case of credits that have been calculated or created improperly, or are otherwise determined to be invalid, the following provisions apply:
(i)
Invalid credits cannot be used to achieve compliance with the transferee's volume requirements regardless of the transferee's good faith belief that the credits were valid.
(ii)
The refiner or importer that used the credits, and any transferor of the credits, must adjust its credit records, reports and compliance calculations as necessary to reflect the proper credits.
(iii)
Any properly created credits existing in the transferor's credit balance after correcting the credit balance, and after the transferor applies credits as needed to meet the compliance requirements at the end of the calendar year, must first be applied to correct the invalid transfers before the transferor trades or banks the credits.
(e) General limitation on credit use.
Credits may not be used to achieve compliance with any requirements of this subpart other than the standards of § 80.510(a), (b), and (c), unless specifically approved by the Administrator pursuant to a hardship relief petition under § 80.560 or § 80.561.
(f) Use of high sulfur NRLM credits.
(1)
High sulfur NRLM credits generated under § 80.535(a) or (b) may be used on a one-for-one basis to meet the NRLM diesel fuel sulfur standard of § 80.510(a) from June 1, 2007 through May 31, 2010. For example, one credit generated by the production or importation of one gallon of NRLM diesel fuel subject to the NRLM diesel fuel sulfur standard of § 80.510 (a) may be used to produce or import one gallon of NRLM diesel fuel that is exempt from the sulfur standard of § 80.510(a) during the period from June 1, 2007 through May 31, 2010.
(ii)
Be associated with a product transfer document that bears a unique product code as specified in § 80.590; and
(3)
No high sulfur NRLM credits may be used subsequent to the compliance period ending May 31, 2010.
(4)
Any high sulfur NRLM credits not used under the provisions of paragraph (f)(1) of this section may be converted into 500 ppm sulfur NRLM credits on a one-for-one basis for use under paragraph (g) of this section.
(g) Use of 500 ppm sulfur NRLM credits.
(1)
500 ppm sulfur NRLM credits generated under § 80.535(c) or (d) or converted from high sulfur NRLM credits under paragraph (f)(3) of this section may be used on a one-for-one basis to meet the NR or NRLM diesel fuel sulfur standards of § 80.510(b) or (c) from June 1, 2010 through May 31, 2014. For example, one credit generated by the production or importation of one gallon of NRLM diesel fuel subject to the NRLM diesel fuel sulfur standard of § 80.510 (c) may be used to produce or import one gallon of NR diesel fuel that is subject to the sulfur standard of § 80.510(a) during the period from June 1, 2010 through May 31, 2014.
(2)
Any 500 ppm sulfur NR or NRLM diesel fuel produced or imported after June 1, 2010 through the use of these credits must—