Background: The U.S. Navy is seeking to blend biofuels with fossil-based fuels, such as F-76 fuel, which are often used in Navy marine vessels. The Navy asked EPA for guidance on whether such biofuels would be treated as renewable fuel under the RFS program. Specifically, the Navy asked for guidance regarding the scope of the exclusion of fuel for use in ocean-going vessels from the definition of transportation fuel in the RFS regulations.
The RFS regulations at 40 CFR 80.1401 define transportation fuel as fuel for use in motor vehicles, motor vehicle engines, nonroad vehicles, or nonroad engines, (except fuel for use in ocean-going vessels). Fuel for use in an ocean going vessel is defined at §80.1401, for purposes of the RFS program, as:
(1) Any marine residual fuel (whether burned in ocean waters, Great Lakes, or other internal waters);
(2) Emission Control Area (ECA) marine fuel, pursuant to §§ 80.2(ttt) and 80.510(k) (whether burned in ocean waters, Great Lakes, or other internal waters); and
(3) Any other fuel intended for use only in ocean-going vessels.
Based on the RFS regulations, marine fuel that meets the definition of fuel for use in ocean going vessels is not transportation fuel. Biofuel blended into such a fuel would not be used to replace or reduce the amount of fossil fuel in transportation fuel, and the biofuel would not meet the definition of renewable fuel under the RFS program. However, the scope of fuels defined for use in ocean-going vessels is limited in several ways that are relevant in answering the Navy’s question:
(1) If F-76 is not marine residual fuel it does not meet the first element of the definition of fuel for use in ocean-going vessels.
(2) If F-76 is not ECA marine fuel, as defined at §80.2(ttt), it does not meet the second element of the definition of fuel for use in an ocean-going vessel. Note that various fuels are excluded from the definition of ECA marine fuel, including all fuel that is designated as and meets the requirements of Nonroad Locomotive and Marine diesel fuel under 40 CFR Part 80. In addition, it does not include fuel used in vessels other than Category 3 marine vessels.
(3) If F-76 is not intended for use only in ocean-going vessels, then it does not meet the third element of the definition of fuel for use in ocean-going vessels. Therefore, RINs can be generated for this qualifying fuel if, for example, F76 is intended for use in a variety of diesel engines, such as for use in vessels that are not ocean-going or for use in land based engines.
The above discussion concerns whether a biofuel is blended into fuel that is fuel for use in ocean-going vessels, and therefore blended into fuel that is not transportation fuel. The RFS program has a variety of other requirements that apply to renewable fuel. Suppliers or importers of biofuel are subject to the applicable requirements of the RFS regulations at 40 CFR Subpart M regarding the production of renewable fuel and generation of RINs.