Texas Can Sell 500 PPM Diesel Through Oct 24, But Not to Car Haulers

EPA granted Texas an emergency fuel waiver on October 5 that allows diesel with up to 500 ppm sulfur to be sold across the state through October 24. The waiver lifts both the federal 15 ppm ultra-low sulfur limit and the Texas Low Emission Diesel requirement in the state implementation plan. Governor Greg Abbott asked for it on September 28, the same day he declared a statewide disaster over diesel supply and price. EPA rested the decision on two figures in its letter: refinery utilization at 94 percent for the week ending September 18, which leaves almost no headroom to raise output, and national distillate inventories 12 percent below the five-year average, with recovery not expected until early 2027.

The waiver runs 20 days, the maximum a single Clean Air Act fuel waiver allows, and EPA said it intends to issue renewals until the supply circumstances end.

Read the eligibility language and the relief narrows fast. The 500 ppm fuel may only go into highway vehicles built before the 2007 engine model year, and nonroad equipment below Tier 4. EPA bars it outright from any vehicle or engine fitted with a diesel particulate filter or catalytic emission control, requires it to be segregated from anything sold as ULSD, and requires dispensers to post a warning that using it in an equipped vehicle may cause serious damage to the engine and its emissions control components, with the user assuming all responsibility for that damage.

The transport angle

That eligibility line is the whole story for anyone shipping a car out of Texas this month. Enclosed transport runs on newer equipment. A rig carrying four to six cars in a 53-foot enclosed trailer is a 2007-or-later truck with a particulate filter, usually with selective catalytic reduction on top of it. None of those trucks can burn the waiver fuel. Cummins told Equipment World it still specifies 15 ppm diesel for Tier 4 and 2007-and-newer engines and that failures traced to the wrong fuel will be denied warranty coverage. International Motors said the same against the ASTM D975 ULSD spec.

So the cheaper grade arriving at Texas pumps does not reach the trucks that move collector cars. The fleets hauling enclosed loads pay the posted ULSD price, and that has barely moved. EIA put the US average on-highway diesel at $6.179 a gallon for the week of October 12, down two cents on the week and up $2.514 from a year earlier. The Gulf Coast average was $5.809, up $2.510 year over year. Fuel surcharges on Houston to Los Angeles and Dallas to Scottsdale loads are holding rather than easing.

The new operational risk is misfueling. Texas truck stops are now running two segregated grades behind warning placards, which is unfamiliar ground for drivers who have fueled on reflex since highway ULSD became the only option two decades ago. One wrong nozzle is a poisoned catalyst or a fouled filter, a warranty argument, and a truck parked with somebody's cars inside it.

Abbott's order also opened dyed diesel to on-highway use, and that part is harmless. Dyed fuel is chemically the same ULSD with a marker in it, meets the same ASTM specification, and raises no warranty or maintenance question. The state fuel tax was not waived, so dyed diesel helps availability rather than price.

What to ask before a Texas pickup

If a car is moving out of Texas before the end of the month, put one question to the broker: is the assigned carrier fueling ULSD only, and does it have a written instruction to drivers for the waiver window. A carrier that has thought about it answers in a sentence. Carriers in our broker network running small enclosed fleets generally have, because the aftertreatment bill lands on them.

Do not expect a fuel-surcharge concession on a Texas-origin lane while the waiver is live. Transit math is unchanged, so the enclosed transit windows still apply, and the ranges on our cost page already assume diesel near current levels.

If the timing is flexible, the week after October 24 is worth watching. The renewal decision and the next EIA print both land in it, and that is the first point where a Texas-origin quote could move for a reason other than capacity.