(a) Any of the following entities may generate credits under this subpart O:

(1) U.S. refiners, including small refiners under §80.1620, and refiners owning small volume refineries under §80.1621.

(2) Importers.

(3) Credits may not be generated by transmix processors, producers or blenders of ethanol and other oxygenates, butane blenders using the flexibilities in §80.82, or pentane blenders using the flexibilities in §80.85.

(b) Beginning with the 2014 annual averaging period, the number of credits generated for use in complying with the annual average standards of either subpart H of this part or §80.1603(a) shall be calculated annually for each applicable averaging period according to the following equation (pursuant to §80.310):

CRa = Va × (SCredit − Sa)

(c) Except as provided in paragraph (d) of this section, beginning with the 2017 annual averaging period, the number of credits generated for use in complying with the annual average standards of §80.1603(c)(1) shall be calculated annually for each applicable averaging period according to the following equation:

CRa = Va × (10 − Sa)

(d) For approved small refiners and small volume refineries only, the number of credits generated from January 1, 2017 through December 31, 2019 shall be calculated annually for each applicable averaging period as follows:

(1) From January 1, 2017 through December 31, 2019, if a small refiner or small volume refinery has an annual average sulfur level (Sa) less than 30.00 ppm but greater than 10.00 ppm, the refiner may generate credits using the equation specified in paragraph (b) of this section for use in complying with the annual average standards of subpart H of this part.

(2) From January 1, 2017 through December 31, 2019, if a small refiner or small volume refinery has an annual average sulfur level (Sa) less than 10.00 ppm, the refiner may generate credits using the equation specified in paragraph (c) of this section for use in complying with the annual average standards of §80.1603(c)(1) and the following equation for complying with the annual average standards of subpart H of this part:

CRT2 = Va × (20.00)

(For example: A small refiner with an annual average sulfur level of 8 ppm in 2018 may generate CRa = 2 ppm-volume credits (10-8) for compliance with the annual average standards of §80.1603(c)(1) plus CRT2 = 20 ppm-volume credits (30-10) for compliance with the annual average sulfur standards of subpart H of this part.)

(3) Beginning January 1, 2020, small refiners and small volume refineries must follow paragraph (c) of this section for calculating credits under this subpart O.

(e) No credits shall be generated—

(1) Under paragraphs (b), (c) and (d) of this section unless the value of CRa is positive.

(2) Under paragraph (d)(2) of this section unless the value of CRT2 is positive.

(f) The values of CRa and CRT2 shall be rounded to the nearest ppm-gallon in accordance with the rounding procedure specified in §80.9.

(g) A refiner or importer that includes downstream added oxygenates in its RFG or conventional gasoline volume under the provisions of §§80.69 and 80.101(d)(4), respectively and §§80.340 and 80.1603(d), shall include the downstream added oxygenate for the purpose of generating credits under paragraphs (b) through (d) of this section.

[79 FR 23655, Apr. 28, 2014, as amended at 80 FR 9099, Feb. 19, 2015]