The Environmental Protection Agency issued an emergency waiver of emission standards for both diesel and gasoline on Thursday, Sept. 1.
The move allowed retailers in all 50 states to sell diesel that exceeds 500 ppm sulfur content. However, the move also raised the question of whether or not drivers would be penalized if they were caught using that fuel.
The answer, according to the Internal Revenue Service, is no, so long as the company that sold it to them paid the normal diesel fuel tax of 24.4 cents per gallon.
On Friday, Sept. 2, the IRS lifted penalties on red diesel fuel. This means that diesel fuel normally used for off-road vehicles such as farm equipment can now be used by commercial trucks without fear of being penalized as long as normal diesel taxes have been paid on that fuel.
Ordinarily dyed diesel fuel is not taxed, but if a commercial vehicle is caught using it on the highway, the penalties can be pretty stiff. The IRS has suspended those penalties through Sept. 15.
Treasury Secretary John Snow called the move "simple and straightforward" and said that it "will immediately increase the available supply of diesel fuel nationwide."
The EPA issued the initial emission standards waiver on Wednesday, Aug. 31, but at that time it only included Louisiana, Mississippi, Alabama and Florida. EPA administrator Stephen Johnson said the national fuel situation was dire enough to expand the waiver to all states.
"It has become clear that the consequences of the hurricane have become more widespread," he said. "So I am sending letters to the governors of the remaining 46 states and territories providing temporary relief from volatility and sulfur standards. This action will result in a needed increase in fuel supply."
The one exception to the rule may be California, which has higher diesel emission standards and is exempt from the national standards under the Clean Air Act.
Dimitri Stanich, a spokesman for the California Air Resources Board, told Land Line that the board is currently reviewing the EPA's waiver and working to decide the best course of action at this time.