(a) Gasoline, diesel fuel, or IMO marine fuel subject to an exemption under this subpart is exempt from the standards and provisions of this part as specified in this subpart.

(b) Fuel that does not meet all the requirements and conditions specified in this subpart for an exemption is subject to all applicable standards and requirements of this part.

(a) Fuel, fuel additive, or regulated blendstock that is produced, imported, sold, offered for sale, supplied, offered for supply, stored, dispensed, or transported for use in the following tactical military vehicles, engines, or equipment, including locomotive or marine engines, is exempt from the standards specified in this part:

(1) Tactical military vehicles, engines, or equipment, including locomotive or marine engines, that have an EPA national security exemption from the emission standards in this chapter. See 40 CFR part 85, subpart R, and 40 CFR 1068.225.

(2) Tactical military vehicles, engines, or equipment, including locomotive or marine engines, that are not subject to a national security exemption from vehicle or engine emissions standards specified in paragraph (a)(1) of this section but, for national security purposes (e.g., for purposes of readiness, including training, for deployment overseas), need to be fueled on the same fuel as the vehicles, engines, or equipment that EPA has granted such a national security exemption.

(b) The exempt fuel, fuel additive, or regulated blendstock must meet all the following requirements:

(1) The fuel, fuel additive, or regulated blendstock must be accompanied by PTDs that meet the requirements of subpart L of this part.

(2) The fuel, fuel additive, or regulated blendstock must be segregated from non-exempt fuel, fuel additive, or regulated blendstock at all points in the distribution system.

(3) The fuel, fuel additive, or regulated blendstock must be dispensed from a fuel dispenser stand, fueling truck, or tank that is labeled with the appropriate designation of the exempt fuel, fuel additive, or regulated blendstock.

(4) The fuel, fuel additive, or regulated blendstock must not be used in any vehicles, engines, or equipment, including locomotive or marine engines, other than those specified in paragraph (a) of this section.

(a) Requests for an exemption. (1) Any person may receive an exemption from the standards specified in this part for fuel, fuel additive, or regulated blendstock used for research, development, or testing (“R&D”) purposes under paragraph (b) of this section by submitting the information specified in paragraph (c) of this section as specified in § 1090.10 and meeting the requirements of paragraph (d) of this section.

(2) Any person who performs emissions certification testing for a motor vehicle or motor vehicle engine under 42 U.S.C. 7525 or nonroad engine or nonroad vehicle under 42 U.S.C. 7546 is exempt from the standards specified in this part for the fuel, fuel additive, or regulated blendstock they use for emissions certification testing if they have an exemption under 40 CFR parts 85 and 86 to perform such testing.

(3) Any person who performs research, development, or testing of a fuel additive is exempt from the standards specified in this part for such fuel additive if the fuel additive is exempt under 40 CFR 79.4(b)(2).

(b) Criteria for an R&D exemption. For an R&D exemption to be granted, the person requesting an exemption must do all the following:

(1) Demonstrate that the exemption is for an appropriate R&D purpose.

(2) Demonstrate that an exemption is necessary.

(3) Design an R&D program that is reasonable in scope.

(4) Have a degree of control consistent with the purpose of the R&D program and EPA's monitoring requirements.

(5) Meet the requirements specified in paragraphs (c) and (d) of this section.

(c) Information required to be submitted. To aid in demonstrating each of the elements in paragraph (b) of this section, the person requesting an exemption must include, at a minimum, all the following information:

(1) A concise statement of the purpose of the R&D program demonstrating that the R&D program has an appropriate R&D purpose.

(2) An explanation of why the stated purpose of the R&D program is unable to be achieved in a practicable manner without meeting the requirements of this part.

(3) A demonstration of the reasonableness of the scope of the R&D program, including all the following:

(i) An estimate of the R&D program's duration in time (including beginning and ending dates).

(ii) An estimate of the maximum number of vehicles, engines, and equipment involved in the program, and the number of miles and engine hours that will be accumulated on each.

(iii) The manner in which the information on the vehicles, engines, or equipment used in the R&D program will be recorded and made available to EPA upon request.

(iv) An estimate of the volume of fuel, fuel additive, or regulated blendstock expected to be used in the R&D program that does not comply with the requirements of this part, as applicable.

(v) A list of how all applicable standards of this part would or would not apply to the fuel, fuel additive, or regulated blendstock expected to be used in the R&D program.

(4) With regard to control, a demonstration that the R&D program affords EPA a monitoring capability, including all the following:

(i) A description of the technical and operational aspects of the R&D program.

(ii) The site of the R&D program (including facility name, street address, city, county, state, and ZIP code).

(iii) The manner in which information on the vehicles, engines, or equipment used in the R&D program will be recorded and made available to EPA upon request.

(iv) The manner in which information on the fuel, fuel additive, or regulated blendstock used in the R&D program (including quantity, properties, name, address, telephone number, and contact person of the supplier, and the date received from the supplier) will be recorded and made available to EPA upon request.

(v) The manner in which the person will ensure that fuel, fuel additive, or regulated blendstock used in the R&D program will be segregated from non-exempt fuel, fuel additive, or regulated blendstock and how fuel dispensers will be labeled to ensure that fuel, fuel additive, or regulated blendstock used in the R&D program is not dispensed for use in motor vehicles or nonroad engines, vehicles, or equipment, including locomotive or marine engines, that are not part of the R&D program.

(vi) The name, business address, telephone number, and title of the person in the organization requesting an exemption from whom further information on the application may be obtained.

(vii) The name, business address, telephone number, and title of the person in the organization requesting an exemption who is responsible for recording and making available the information specified in this paragraph (c), and the location where such information will be maintained.

(viii) Any other information requested by EPA to determine whether the R&D program satisfies the criteria in paragraph (b) of this section.

(d) Additional requirements. (1) Fuel, fuel additive, or regulated blendstock used in the R&D program must meet all the following requirements:

(i) The fuel, fuel additive, or regulated blendstock must be accompanied by PTDs that meet the requirements of subpart L of this part.

(ii) The fuel, fuel additive, or regulated blendstock must be designated as exempt fuel, fuel additive, or regulated blendstock by the fuel, fuel additive, or regulated blendstock manufacturer or supplier, as applicable.

(iii) The fuel, fuel additive, or regulated blendstock must be segregated from non-exempt fuel, fuel additive, or regulated blendstock at all points in the distribution system.

(iv) The fuel, fuel additive, or regulated blendstock must not be sold, distributed, offered for sale or distribution, dispensed, supplied, offered for supply, transported to or from, or stored by a retail outlet or WPC facility, unless the WPC facility is associated with the R&D program that uses the fuel, fuel additive, or regulated blendstock.

(2) At the completion of the R&D program, any emission control systems or elements of design that are damaged or rendered inoperative must be replaced on vehicles, engines, or equipment remaining in service or the responsible person will be liable for a violation of 42 U.S.C. 7522(a)(3), unless sufficient evidence is supplied that the emission controls or elements of design were not damaged.

(e) Approval of exemption. EPA may grant an R&D exemption upon a demonstration that the requirements of this section have been met. The R&D exemption approval may include such terms and conditions as EPA determines necessary to monitor the exemption and to carry out the purposes of this part, including restoration of emission control systems.

(1) The volume of fuel, fuel additive, or regulated blendstock used in the R&D program must not exceed the amount estimated in paragraph (c)(3)(iv) of this section, unless EPA grants an approval for a greater amount.

(2) Any R&D exemption granted under this section will expire at the completion of the R&D program or 1 year from the date of approval, whichever occurs first, and may only be extended upon re-application consistent with the requirements of this section.

(3) If any information required in paragraph (c) of this section changes after approval of the R&D exemption, the responsible person must notify EPA in writing immediately.

(f) Notification of completion. Any person with an approved R&D exemption under this section must notify EPA in writing within 30 days after completion of the R&D program.

Fuel, fuel additive, or regulated blendstock that is used in aircraft, or is used in racing vehicles or racing boats in sanctioned racing events, is exempt from the standards in subparts C and D of this part if all the following requirements are met:

(a) The fuel, fuel additive, or regulated blendstock must be identified on PTDs and on any fuel dispenser from which the fuel, fuel additive, or regulated blendstock is dispensed as restricted for use either in aircraft or in racing motor vehicles or racing boats that are used only in sanctioned racing events.

(b) The fuel, fuel additive, or regulated blendstock must be segregated from non-exempt fuel, fuel additive, or regulated blendstock at all points in the distribution system.

(c) The fuel, fuel additive, or regulated blendstock must not made available for use as gasoline or diesel fuel subject to the standards in subpart C or D of this part, respectively, or dispensed for use in motor vehicles or nonroad engines, vehicles, or equipment, including locomotive or marine engines, except for those used only in aircraft or in sanctioned racing events.

Fuel that is produced, imported, sold, offered for sale, supplied, offered for supply, stored, dispensed, or transported for use in the territories of Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands, is exempt from the standards in subparts C and D of this part if all the following requirements are met:

(a) The fuel must be designated by the fuel manufacturer as gasoline, diesel fuel, or ECA marine fuel for use only in Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands.

(b) The fuel must be used only in Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands.

(c) The fuel must be accompanied by PTDs that meet the requirements of subpart L of this part.

(d) The fuel must be segregated from non-exempt fuel at all points from the point the fuel is designated as exempt fuel for use only in Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands, while the exempt fuel is in the United States (including an ECA or an ECA associated area under 40 CFR 1043.20) but outside these territories.

(a) California gasoline and diesel fuel exemption. California gasoline or diesel fuel that complies with all the requirements of this section is exempt from all other provisions of this part.

(b) California gasoline and diesel fuel requirements. (1) Each batch of California gasoline or diesel fuel must be designated as such by its fuel manufacturer.

(2) Designated California gasoline or diesel fuel must be segregated from fuel that is not California gasoline or diesel fuel at all points in the distribution system.

(3) Except for as specified in paragraph (d) or (e) of this section, designated California gasoline or diesel fuel must ultimately be used only in the state of California.

(4) Transferors and transferees of California gasoline or diesel fuel produced outside the state of California must meet the PTD requirements of subpart L of this part.

(5) Each transferor and transferee of California gasoline or diesel fuel produced outside the state of California must maintain copies of PTDs as specified in subpart M of this part.

(6) California gasoline or diesel fuel must not be used in any part of the United States outside of the state of California unless the manufacturer or distributor recertifies or redesignates the batch of California gasoline or diesel fuel as specified in paragraph (d) or (e) of this section.

(c) Use of California test methods and offsite sampling procedures. For any gasoline or diesel fuel that is not California gasoline or diesel fuel and that is either produced at a facility located in the state of California or is imported from outside the United States into the state of California, the manufacturer must do one of the following:

(1) Comply with the sampling and testing provisions specified in subpart N of this part, as applicable.

(2) Sample and test using methods approved in Title 13 of the California Code of Regulations.

(3) Sample and test per a current and valid protocol agreement between the fuel manufacturer and the California Air Resources Board or by Executive Order from the California Air Resources Board. Such protocols or Executive Orders must be provided to EPA upon request.

(d) California gasoline used outside of California. California gasoline may be used in any part of the United States outside of the state of California if the manufacturer or distributor of the California gasoline does one of the following:

(1) Recertifies the California gasoline as gasoline under this part and includes the recertified gasoline in their average standard compliance calculations.

(2) Redesignates the California gasoline as gasoline under this part without recertification and does all the following:

(i) Demonstrates that the gasoline meets all applicable requirements for California reformulated gasoline under Title 13 of the California Code of Regulations.

(ii) Properly redesignates the gasoline under § 1090.1010(b)(2)(vi).

(iii) Generates PTDs under subpart L of this part.

(iv) Keeps records under subpart M of this part.

(v) Does not include the redesignated California gasoline in their average standard compliance calculations.

(e) California diesel fuel used outside of California. California diesel fuel may be used in any part of the United States outside of the state of California without recertification if the manufacturer or distributor of the California diesel fuel redesignates the California diesel fuel as diesel fuel under this part and does all the following:

(1) Demonstrates that the diesel fuel meets all applicable requirements for California diesel fuel under Title 13 of the California Code of Regulations.

(2) Properly redesignates the diesel fuel under § 1090.1015(b)(3)(iii).

(3) Generates PTDs under subpart L of this part.

(4) Keeps records under subpart M of this part.

Summer gasoline that is produced, imported, sold, offered for sale, supplied, offered for supply, stored, dispensed, or transported for use in Alaska, Hawaii, Puerto Rico, or the U.S. Virgin Islands is exempt from the RVP standards in § 1090.215 if all the following requirements are met:

(a) The summer gasoline must be designated by the fuel manufacturer as summer gasoline for use only in Alaska, Hawaii, Puerto Rico, or the U.S. Virgin Islands.

(b) The summer gasoline must be used only in Alaska, Hawaii, Puerto Rico, or the U.S. Virgin Islands.

(c) The summer gasoline must be accompanied by PTDs that meet the requirements of subpart L of this part.

(d) The summer gasoline must be segregated from non-exempt gasoline at all points from the point the summer gasoline is designated as exempt fuel for use only in Alaska, Hawaii, Puerto Rico, or the U.S. Virgin Islands, while the exempt summer gasoline is in the United States but outside these states or territories.

(a) In appropriate extreme, unusual, and unforeseen circumstances (e.g., circumstances like a natural disaster or refinery fire; not financial or supplier difficulties) that are clearly outside the control of the refiner and that could not have been avoided by the exercise of prudence, diligence, and due care, EPA may permit a refiner, for a brief period, to distribute fuel that is exempt from the standards in subparts C and D of this part if all the following requirements are met:

(1) It is in the public interest to do so (e.g., distribution of the nonconforming fuel will not damage vehicles or engines and is necessary to meet projected temporary shortfalls in the supply of the fuel in a state or region of the United States for which the shortfall is unable to otherwise be compensated for).

(2) The refiner exercised prudent planning and was not able to avoid the violation and has taken all reasonable steps to minimize the extent of the nonconformity.

(3) The refiner shows how compliance will be achieved as expeditiously as possible.

(4) The refiner agrees to make up any air quality detriment associated with the nonconforming fuel, where practicable.

(5) The refiner pays to the U.S. Treasury an amount equal to the economic benefit of the nonconformity minus the amount expended under paragraph (a)(4) of this section, in making up the air quality detriment.

(b) Hardship applications under this section must be submitted to EPA as specified in § 1090.10 and must contain a letter signed by the RCO, or their delegate, stating that the information contained in the application is true and accurate to the best of their knowledge.

(a) Gasoline that is used to produce E85 is exempt from the gasoline deposit control requirements in § 1090.260.

(b) Any person who uses the exemption in paragraph (a) of this section must keep records to demonstrate that such exempt gasoline was used to produce E85 and was not distributed from a terminal for use as gasoline.

(a) Fuel, fuel additive, or regulated blendstock that is exported for sale outside of the United States is exempt from the standards in subparts C and D of this part if all the following requirements are met:

(1) The fuel, fuel additive, or regulated blendstock must be designated for export by the fuel manufacturer, fuel additive manufacturer, or regulated blendstock producer.

(2) The fuel, fuel additive, or regulated blendstock designated for export must be accompanied by PTDs that meet the requirements of subpart L of this part.

(3) The fuel manufacturer, fuel additive manufacturer, or regulated blendstock producer must keep records that demonstrate that the fuel, fuel additive, or regulated blendstock was ultimately exported from the United States.

(4) The fuel, fuel additive, or regulated blendstock must be segregated from non-exempt fuel, fuel additive, or regulated blendstock at all points from the point the fuel, fuel additive, or regulated blendstock is designated for export to the point where it is ultimately exported from the United States.

(b) Fuel, fuel additive, or regulated blendstock certified and designated for export may be certified for use in the United States if all the applicable requirements of this part are met.

(c) Any fuel dispensed from a retail outlet within the geographic boundaries of the United States is not exempt under this section.

(a) Distillate global marine fuel that is produced, imported, sold, offered for sale, supplied, offered for supply, stored, dispensed, or transported for use in steamships or Category 3 marine vessels is exempt from the standards in subpart D of this part when operating outside of ECA boundaries if all the following requirements are met:

(1) The fuel must not exceed 0.50 weight percent sulfur (5,000 ppm).

(2) The fuel must be accompanied by PTDs that meet the requirements of subpart L of this part.

(3) The fuel must be designated as distillate global marine fuel.

(4) The fuel must be segregated from non-exempt fuel at all points in the distribution system.

(5) The fuel must not be used in vehicles, engines, or equipment other than in steamships or Category 3 marine vessels.

(b)(1) Fuel that does not meet the requirements specified in paragraph (a) of this section is subject to the standards, requirements, and prohibitions that apply for ULSD under this part.

(2) Any person who produces, imports, sells, offers for sale, supplies, offers for supply, stores, dispenses, or transports distillate global marine fuel without meeting the applicable recordkeeping requirements of subpart M of this part must not claim the fuel is exempt from the standards, requirements, and prohibitions that apply for ULSD under this part.