White House reviewing EPA nonroad low-sulfur diesel plan

Maureen Lorenzetti
Washington Editor

WASHINGTON, DC, Mar. 12 -- The US Environmental Protection Agency Tuesday sent to the White House for its review an industry-supported nonroad low-sulfur diesel plan.
The rule requires fuel suppliers to sell a 500 ppm product in mid-2007, followed by a 15 ppm standard by 2010, government and industry sources said Wednesday.

Last summer EPA favored a proposal that would have required all nonroad diesel to meet a 15 ppm sulfur limit by mid-2008. But the agency later reversed that position following meetings between refiners and the White House's Office of Management and Budget.
An EPA spokesman was not immediately available for comment. Agency officials last month said they plan to issue a proposed rule in April with a final rule slated for April 2004.

In an Oct. 30, 2002, notice to small-business owners, the agency acknowledged it was mulling the industry option that includes a credit-trading program. Industry officials say the timing and implementation of the nonroad rule will impact significantly how industry can meet challenges associated with low-sulfur highway diesel.

No trading program
The agency plan, however, does not include a proposal unveiled by OMB last June that would have considered an emissions-trading program between nonroad and highway engines (OGJ Online, May 31, 2002).
Environmentalists then loudly opposed the White House proposal, saying it would dilute the effectiveness of the new lower-sulfur highway diesel rules due to begin before 2007.

Fuel sulfur history
EPA promulgated the gasoline sulfur regulations with some protest from industry, but that opposition was relatively subdued compared with other clean-fuel battles the agency has waged over the years; refiners are by and large preparing for the rule, which limits gasoline sulfur levels to 30 ppm in 2004.

But efforts to update low-sulfur diesel have been more contentious.
Industry vigorously contested the low-sulfur "highway" diesel fuel rule at EPA and later through the courts but lost. The rule requires 80% of highway diesel to meet new standards by mid-2006.

This latest effort to place tighter controls on nonroad diesel may be more conciliatory, however.
Industry officials familiar with the nonroad rule said they thought the proposal is "fair."
The proposed rule also reportedly calls for 500 ppm sulfur levels for locomotives and commercial marine fuel.

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