California Code of Regulations
Title 13 - Motor Vehicles
Division 3 - Air Resources Board
Chapter 5 - Standards for Motor Vehicle Fuels
Article 1 - Standards for Gasoline
Subarticle 2 - Standards for Gasoline Sold Beginning March 1, 1996
Section 2265.5 - Alternative Emission Reduction Plan (AERP)

Universal Citation: 13 CA Code of Regs 2265.5

Current through Register 2024 Notice Reg. No. 38, September 20, 2024

(a) Applicability. This section shall apply to a producer or importer that produces gasoline that elects to use an AERP or to a third party that elects to use a third party AERP when all of the following conditions are satisfied:

(1) In the case of a third party AERP, the third party has a contract or agreement to offset, in whole or in part, the elevated emissions associated with permeation from the producer's or importer's gasoline.

(2) With regard to a batch of gasoline that does not meet the criteria for approval in the applicable Predictive Model Procedures, immediately prior to producing or importing that batch, the producer or importer has reported its gasoline as a PM alternative gasoline formulation pursuant to section 2265(a),

(3) But for the elevated emissions associated with permeation, the PM alternative specifications would have met the criteria for approval in the applicable Predictive Model Procedures,

(4) All measures to correct the emissions associated with permeation would result in an economic hardship to the producer or importer and the benefit in allowing the producer or importer to use an alternative emission reduction plan is not outweighed by the public interest in enforcing the applicable Predictive Model Procedures,

(5) The producer or importer is not subject to any outstanding requirements to provide offsets at the same production facility or import facility pursuant to section 2264(c), and

(6) All AERPs and third party AERPs sunset on December 31, 2011, unless the producer or importer, or the third party in the case of a third party AERP, requests in writing, and the Executive Officer approves in advance, an extension of the AERP or third party AERP for up to one additional year.

(b) Requirements.

(1) Where the producer or importer that produces gasoline has reported its final blend of gasoline as a flat limit formulation pursuant to section 2264.2(b), averaging limit formulation pursuant to section 2264.2(a), PM alternative gasoline formulation pursuant to section 2265(a), or test-certified alternative gasoline formulation pursuant to section 2266(c), compliance with a valid AERP or third party AERP shall constitute compliance with the requirements of section 2262.3(b), 2262.3(c), 2265, or 2266, respectively.

(2) An AERP or third party AERP application demonstrating compliance with this subsection shall contain at a minimum all of the following information:
(A) The company name, address, phone number, and contact information,

(B) The producer's or importer's name, batch name, number or other identification, grade of California gasoline, and other information that uniquely identify the California gasoline subject to the AERP or third party AERP,

(C) An explanation describing why the producer or importer cannot eliminate the emissions associated with permeation by reformulation or reprocessing its gasoline,

(D) The total emissions of oxides of nitrogen (NOx), total ozone forming potential, and potency-weighted toxics that would be associated with the use of California gasoline were the producer or importer to eliminate the emissions associated with permeation from its gasoline,

(E) Documentation, calculations, emissions test data, or other information that establishes the amount of NOx, total ozone forming potential, and potency-weighted toxics associated with the producer's or importer's gasoline,

(F) The emission reduction strategy(ies) for the AERP or third party AERP and the date(s) that the offsets will accrue and expire for each strategy,

(G) The producer's or importer's market share for the fuel produced under the AERP or third party AERP,

(H) Demonstration that the emission reduction strategy(ies) in the AERP or third party AERP will result in equivalent or better emission benefits for NOx, total ozone forming potential, and potency-weighted toxics than would be achieved through elimination of emissions associated with permeation from the gasoline for the same affected region and for the period the AERP or third party AERP will be in effect, during and outside the RVP regulatory control periods in section 2262.4(b)(2),

(I) Demonstration that the emission reductions are achieved in the general region where the fuel is sold,

(J) The proposed recordkeeping, reporting, monitoring, and testing procedures that the producer or importer plans to use to demonstrate continued compliance with the AERP or third party AERP and achievement of each increment of progress toward compliance,

(K) Adequate enforcement provisions,

(L) The projected volume of each final blend of California gasoline subject to the AERP or third party AERP during the period the AERP or third party AERP will be in effect,

(M) The period that the AERP or third party AERP will be in effect,

(N) A compliance plan that includes increments of progress (specific events and dates) that describe periodic, measurable steps toward compliance during the proposed period of the AERP or third party AERP,

(O) The date by which the producer or importer plans to discontinue using the AERP or third party AERP,

(P) A statement, signed by a legal representative for the producer or importer that all information submitted with the AERP or third party AERP application is true and correct,

(Q) The producer's or importer's agreement to be bound by the terms of the AERP or third party AERP, and

(R) In the case of a third party AERP, all of the above including all of the following:
1. The third party's name, address, phone number, and contact information,

2. Documentation of the contract or agreement between the third party and the producer or importer,

3. Documentation of the amount of NOx, total ozone forming potential, and potency-weighted toxics (reported as tons/day and percentage of the total tons/day) from the producer's or importer's gasoline that will be offset by the third party AERP,

4. A list of all AERPs and third party AERPs that currently apply to the producer or importer,

5. A statement, signed by a legal representative for the third party that all information submitted with the third party AERP application is true and correct, and

6. The third party's agreement to be bound by the terms of the third party AERP.

(3) Emission reduction calculations demonstrating equivalence between the AERP or third party AERP and elimination of the emissions associated with permeation from the gasoline shall only include NOx, total ozone forming potential, and potency-weighted toxics emissions from California gasoline sold or supplied in California.

(4) A producer or importer wishing to participate in an AERP may include one or more production facilities or import facilities, but the producer or importer shall only include such facilities that the producer or importer owns or operates under their direct control. A third party wishing to participate in a third party AERP may include one or more production facilities or import facilities, but the third party shall only include such facilities with which the third party has a contract or agreement to offset emissions associated with permeation.

(5) The emission reduction associated with the AERP or third party AERP must be from combustion related sources or gasoline related sources.

(6) AERPs and third party AERPs may include, but are not limited to:
(A) Vehicle scrappage,

(B) Offsetting emissions with lower emitting diesel fuel batches,

(C) Incentive grants for cleaner-than-required engines, equipment and other sources of pollution providing early or extra emission reductions.

(7) Emission reductions included in an AERP or third party AERP shall not include reductions that are otherwise required by any local, State, or federal rule, regulation, or statute, or that are achieved or estimated from equipment not located within the region associated with the AERP or third party AERP, or that are claimed under section 2265.1, or that are claimed under another program, such as the Voluntary Accelerated Vehicle Retirement or Carl Moyer program, or the result of standard business practices that the producer or importer would have done without the AERP or third party AERP.

(8) The producer or importer subject to an approved AERP or third party AERP shall maintain all records required to verify compliance with the provisions of the AERP or third party AERP in a manner and form specified by the Executive Officer in the approved AERP or third party AERP. Required records may include, but are not limited to, volume of California gasoline sold, offered, or supplied to which the AERP or third party AERP applies, and/or emissions test results. Such records shall be retained for a period of not less than five (5) years and shall be submitted to the Executive Officer within 20 days in the manner specified in the approved AERP or third party AERP and upon request by the Executive Officer.

(9) Prior to selling, offering, or supplying a batch of California gasoline with emissions associated with permeation, the producer or importer shall first have established sufficient offsets for the applicable emissions associated with permeation. With the exception of offsets from vehicle scrappage and incentive grants for cleaner-than-required engines, equipment and other sources of pollution, offsets shall expire at midnight on the day they accrued.

(c) Application Process.

(1) Applications for an AERP or third party AERP shall be submitted in writing to the Executive Officer for evaluation.

(2) The application shall be accompanied by a fee of $6,700.00 to cover the costs of processing the AERP or third party AERP application. If the applicant withdraws the application before the 30-day first comment period, $4,100.00 of the fee shall be refunded.

(3) The Executive Officer shall make available for public review all documents pertaining to an AERP or third party AERP application.

(4) The Executive Officer will send a notice to subscribers of the Fuels listserv that a person has requested the Executive Officer consider a request for an AERP or third party AERP. The Executive Officer shall also provide a copy of all such documents to each person who has requested copies of the documents. Collectively, those persons on the Fuels listserv and those persons who have requested copies of the documents shall be treated as interested parties.

(5) After an AERP or third party AERP application has been received and deemed complete, the Executive Officer shall provide a 30-day public comment period to receive comments on any element of the AERP or third party AERP application. Any public comment addressing whether the Executive Officer should approve or disapprove the AERP or third party AERP application shall be based on the contents and merits of the application. No comment received by the Executive Officer after the 30-day period will be considered. The Executive Officer shall send to subscribers of the Fuels listserv, and mail to those interested parties who have requested copies by mail, of the following:
(A) The identity of the applicant producer(s) or importer(s);

(B) The start and end dates for the 30-day comment period;

(C) The address of the AERP internet site where the application is posted; and.

(D) Where and how to submit comments.

The Executive Officer shall post on the AERP internet site, send to subscribers of the Fuels listserv, and mail to those interested parties who have requested copies by mail, notification of public comments received during the 30-day comment period.

(6) The Executive Officer may hold a public hearing to accept public comments or decide the merits of the application.

(7) Final Action.

After the public comment period ends, the Executive Officer may take final action to either approve or deny the AERP or third party AERP application. The Executive Officer shall notify the applicant, post on the ARB internet site, send to subscribers of the Fuels listserv, and mail to those interested parties who have requested copies by mail, of the final action.

(8) Notification to the Executive Officer of Changes to information in the AERP or third party AERP application. The applicant shall notify the Executive Officer in writing within 30 days upon learning of any information that would alter any information provided in the AERP or third party AERP application.

(d) Revocation or Modification of an Approved AERP or third party AERP.

(1) With 30-days written notice to the producer or importer, or in the case of a third party AERP, the third party, the Executive Officer may revoke or modify, as needed, an approved AERP or third party AERP in any of the following situations:
(A) There has been more than one violation of the approved AERP or third party AERP,

(B) The Executive Officer has reason to believe that an approved AERP or third party AERP has been granted that no longer meets the criteria or requirements for an AERP or third party AERP,

(C) The producer or importer, or in the case of a third party AERP the third party, demonstrates that it can no longer comply with the requirements of the approved AERP or third party AERP in its current form,

(D) The producer or importer, or in the case of a third party AERP the third party, demonstrates to the satisfaction of the Executive Officer that 1. the continuation of the AERP or third party AERP will result in economic hardship to the producer or importer, or in the case of a third party AERP, the third party, 2. the producer or importer, or in the case of a third party AERP the third party, submits a substitute plan in accordance with section 2265.5(c) to offset any emissions not otherwise offset by the AERP or third party AERP, and 3. the Executive Officer approves the substitute plan, or

(E) The producer's or importer's facility modifications and/or other means of eliminating emissions associated with permeation from its gasoline have been completed.

(2) The Executive Officer shall notify the applicant, post on the AERP internet site, send to subscribers of the Fuels listserv, and mail to those interested parties who have requested copies by mail, of a revocation or modification of an approved AERP or third party AERP.

(3) Any violations incurred pursuant to subsection (e) shall not be cancelled or in any way affected by the subsequent cancellation or modification of an AERP or third party AERP.

(e) Additional prohibitions.

(1) No person may sell, offer, or supply California gasoline that creates emissions associated with permeation unless the producer or importer, or in the case of a third party AERP, the third party has first been notified in writing by the Executive Officer that the AERP or third party AERP application has been approved.

(2) Failure to meet any requirement of this section or any condition of an approved AERP or third party AERP shall constitute a single, separate violation of this article for each day until such requirement or condition is satisfied.

(3) False reporting of any information contained in an AERP or third party AERP application, or any supporting documentation or amendments thereto, shall constitute a single, separate violation of the requirements of this article for each day that the approved AERP or third party AERP is in effect.

(4) Any net exceedance at any given time, taking into consideration the amount of offsets and the gasoline produced under the AERP or third party AERP, of NOx, total ozone forming potential, or potency-weighted toxics during the period the AERP or third party AERP is in effect shall constitute a single, separate violation of the requirements of this article for each day the California gasoline subject to the AERP or third party AERP is sold, supplied, or offered in California.

(5) Any of the following actions shall each constitute a single, separate violation of the requirements of this article for each day after the applicable deadline until the requirement or condition is satisfied:
(A) Failure to report data or failure to report data accurately in writing to the Executive Officer when required by this section or the approved AERP or third party AERP;

(B) False reporting of any information submitted to the Executive Officer for determining compliance with the AERP or third party AERP;

(C) Failure to completely offset emissions, pursuant to any offset reconciliation requirements in the AERP or third party AERP, during the period the AERP or third party AERP is in effect;

(D) Sale, supply, or offer of volumes of California gasoline which purportedly complies with the AERP or third party AERP in excess of the approved AERP or third party AERP.

(6) Offsets shall not include offsets or other reductions that are otherwise required by any local, State, or federal rule, regulation, or statute, or that are achieved or estimated from California gasoline not produced in the same air basin as the gasoline associated with the AERP or third party AERP, or that are claimed under section 2265.1.

(f) A cause of action against the producer, importer, or third party under this section shall be deemed to accrue on the date(s) when the records establishing a violation of the AERP or third party AERP are received by the Executive Officer.

(g) Transferability. Rights to use, or protection under, the AERP or third party AERP are nontransferable, unless such transfer is approved in writing by the Executive Officer.

(h) Notification of final blends associated with an AERP or third party AERP

(1) Except as otherwise provided, for each final blend, the producer or importer shall notify the Executive Officer in writing, for receipt by the Executive Officer before the start of physical transfer of the gasoline from the production facility or import facility, and in no case less than 12 hours before the producer or importer either completes physical transfer or commingles the final blend, with the following information:
(A) The company name, address, phone number, and contact information,

(B) The production facility or import facility name, batch name, number, or other identification, the blend identity, grade of California gasoline, the location (with sufficient specificity to allow ARB inspectors to locate and sample the gasoline; this shall include, but is not limited to, the name of the facility, address, and identification of the tank), and other information that uniquely identifies the California gasoline subject to the AERP or third party AERP,

(C) The estimated volume (in barrels),

(D) The identity of the AERP or third party AERP, which was approved by the Executive Officer and the NOx, total ozone forming potential, and potency-weighted toxics emission limits stated in that plan,

(E) The PM alternative specifications for RVP, sulfur content, benzene content, aromatics content, olefins content, T50, T90, and oxygen content,

(F) Documentation, calculations, emissions test data, and other information that establishes the amount of NOx, total ozone forming potential, and potency-weighted toxics associated with the final blend of California gasoline to which the AERP or third party AERP applies,

(G) A statement, signed by a legal representative for the producer or importer that all information submitted with the notification is true and correct, and

(H) Within 24 hours after the start of the physical transfer, the date and time of the start of physical transfer from the production facility or import facility.

(2) A producer or importer may report an actual volume that is less than the estimated volume, as long as notification of the actual volume is received by the Executive Officer no later than 48 hours after completion of the physical transfer of the final blend from the production facility or import facility. If notification of the actual volume is not timely received by the Executive Officer, the reported estimated volume shall be deemed the reported actual volume. If the actual volume is larger than initially estimated, the producer or importer shall revise the reported estimated volume by notifying the Executive Officer no later than 24 hours after completion of the physical transfer of the final blend from the production facility or import facility.

(i) Notification of permeation offsets

(1) Vehicle scrappage. The producer or importer shall notify the Executive Officer in writing as provided in the AERP or third party AERP with all documentation, calculations, emissions test data, and other information that establishes the amount of NOx, total ozone forming potential, and potency-weighted toxics associated with the vehicle scrappage and the date(s) the offsets accrued.

(2) Fuels. Except as otherwise provided, the producer or importer shall notify the Executive Officer in writing as provided in the AERP or third party AERP, for receipt by the Executive Officer before the start of physical transfer of the gasoline from the production facility or import facility, and in no case less than 12 hours before the producer or importer either completes physical transfer or commingles the final blend, with the information in subsection (h)(1) as they relate to other batches of California gasoline or diesel fuel used to offset the emissions associated with permeation.

(3) Incentive grants. The producer or importer shall notify the Executive Officer in writing as provided in the AERP or third party AERP with all documentation, calculations, emissions test data, and other information that establishes the amount of NOx, total ozone forming potential, and potency-weighted toxics associated with the incentive grants for cleaner-than-required engines, equipment and other sources of pollution providing early or extra emission reductions and the date(s) the offsets accrued.

(4) Other reduction strategies. The producer or importer shall notify the Executive Officer in writing as provided in the AERP or third party AERP with all documentation, calculations, emissions test data, and other information that establishes the amount of NOx, total ozone forming potential, and potency-weighted toxics associated with the reduction strategy and the date(s) the offsets accrued.

1. New section filed 8-29-2008; operative 8-29-2008 pursuant to Government Code section 11343.4 (Register 2008, No. 35).

Note: Authority cited: Sections 39600, 39601, 43013, 43013.1, 43018 and 43101, Health and Safety Code; and Western Oil and Gas Ass'n. v. Orange County Air Pollution Control District, 14 Cal.3d 411, 121 Cal.Rptr. 249 (1975). Reference: Sections 39000, 39001, 39002, 39003, 39010, 39500, 39515, 39516, 41511, 43000, 43013, 43013.1, 43016, 43018 and 43101, Health and Safety Code; and Western Oil and Gas Ass'n. v. Orange County Air Pollution Control District, 14 Cal.3d 411, 121 Cal.Rptr. 249 (1975).

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