Energy Marketers of America Celebrates Major Regulatory Victory with PHMSA Final Rule on Placarding for Petroleum Distillate Fuels

Energy Marketers of America Celebrates Major Regulatory Victory with PHMSA Final Rule on Placarding for Petroleum Distillate Fuels

Yesterday the Energy Marketers of America (EMA) hailed a significant win for the energy marketing industry following the U.S. Department of Transportation's Pipeline and Hazardous Materials Safety Administration (PHMSA) issuance of a final rule that reinstates a key placarding exception for cargo tank vehicles transporting petroleum distillate fuels. This rule, effective upon publication in the Federal Register, allows energy marketers to display the identification number of the fuel with the lowest flash point transported during the current or previous business day, streamlining operations and reducing unnecessary compliance burdens. The placarding exception also applies to compartmented cargo tanks containing more than one petroleum distillate fuel. The rule will take effect upon publication in the Federal Register through a voluntary compliance mechanism. Although it has not yet been published, we estimate the agency will do so within the next 7–10 days. EMA will provide a timely update.

The final rule addresses long-standing EMA advocacy efforts to restore flexibility in hazardous materials regulations (HMR) under 49 CFR 172.336. Previously, a 2015 PHMSA interpretation limited placarding options, forcing marketers to install costly flip or interchangeable systems or adjust load sequencing, which increased inefficiencies, costs, and safety risks for drivers. By reinstating the lowest flash point exception for split loads and alternating straight loads—including gasoline, diesel, heating oil, and ethanol blends up to E10—the rule acknowledges market realities and aligns with emergency response best practices, as all these fuels require similar emergency response in case of incidents.

"This victory is a testament to EMA's persistent advocacy on behalf of our members, who are the backbone of America's energy supply chain," said Rob Underwood, President of EMA. "By allowing placarding based on the lowest flash point over a business day, PHMSA has eliminated outdated barriers that hindered efficient fuel delivery without compromising safety. This change will save our industry millions in compliance costs and enable small businesses to better serve communities across the nation."

The rule is part of PHMSA's broader initiative to eliminate unnecessary regulatory burdens, projecting $145.3 million in annualized cost savings across the transportation sector. Another cost-savings change made by PHMSA under 49 CFR 180.407(a)(7) is to allow the use of video cameras or video optics equipment for cargo tank inspections and tests in lieu of a human going inside the cargo tank.

EMA played a pivotal role throughout this reform by advocating before Congress for a legislative fix, submitting a petition urging the agency to initiate rulemaking, and actively engaging during the regulatory process. EMA provided critical information highlighting the operational realities faced by fuel marketers and underscored the importance of this reform to support efficient and reliable transportation of essential energy resources.

Please note that while PHMSA considered EMA’s request to expand the placarding exception to include E15, the agency ultimately did not include ethanol blends higher than 10% in the scope of the lowest flash point exemption.