WASHINGTON, D.C. – The U.S. Environmental Protection Agency said it would give fuel refin-ers incentives to increase production of ultra-low-sulfur diesel (ULSD) ahead of schedule so that pipeline companies and fuel retailers can test their distribution systems, reported Transport Topics. Some pipelines have said they did not have enough ULSD in their systems to determine whether ULSD meets EPA's standard of 15 parts per million when it is delivered to customers, EPA said. An earlier Energy Information Agency report on the transition to ULSD suggested that "some re-finers may decide to shut down altogether because of this regulation, others might just abandon the highway diesel market." While most refineries cannot operate without producing gasoline – gasoline is a high-margin, high-volume product that provides significant revenue to refiners – it may be possible for some refineries to operate without producing ULSD, while continuing to sell higher sulfur distillate products into the non-road, rail, ship, or heating oil markets, or export their distillate products. "The purpose of this change was to help facilitate the transition to ULSD by providing greater in-centive for early production," EPA Spokesman Justin Cohen told Transport Topics.

Originally posted on Fleet Financials