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DIESEL FUEL DYEING
A confusing situation for both refiners and purchasers of diesel fuel has arisen because both the IRS and the EPA require the addition of red dye to certain classes of diesel fuel. However, each agency requires that the dye be added to a different class of fuel, at a different concentration, and for a different reason.
The EPA wants to identify diesel fuel with a high sulfur content in order to ensure that it is not used in on-road vehicles.
The IRS wants to ensure that tax-exempt low sulfur and high sulfur diesel fuel are not used for taxable purposes.
The EPA Requirements Originally, the EPA's low sulfur diesel regulations required the addition of blue dye to noncomplying high sulfur (>0.05% mass) fuels. But after the Federal Aviation Administration (FAA) expressed concerns that blue-dyed diesel fuel might be confused with the most common aviation gasoline, which already was being dyed blue, the EPA changed the dye from blue to red.
The EPA regulations require "visible evidence of the presence of red dye" to identify high sulfur fuels intended for off-road use. In practice, this requires refiners to add a level of red dye that is equivalent to no more than 0.75 pounds/1000 bbl (ptb) of a solid Solvent Red 26 dye standard. Solvent Red 26 was chosen as the standard because it is a unique chemical available in pure form. Diesel fuels are actually dyed with liquid concentrates of Solvent Red 164 because this dye is more fuel soluble and less costly than the standard. Solvent Red 164 is a mixture of isomers that are very similar to Solvent Red 26, except the former incorporates hydrocarbon (alkyl) chains to increase its solubility in petroleum products.
Any red dye observed in the fuel of a vehicle in on-road use triggers a measurement of the fuel's sulfur content. Penalties are assessed based on the actual sulfur content of the fuel, rather than simply on the presence of dye.
The IRS Requirements The IRS regulations require that tax-exempt diesel fuels, both high sulfur and low sulfur, have a minimum level of a Solvent Red 164 dye that is spectrally equivalent to 3.9 ptb of Solvent Red 26 dye standard. This level of dye is more than five times the amount required by the EPA regulations. The IRS contends that the high dye level is necessary to allow detection of tax evasion even after five-fold dilution of dyed fuel with undyed fuel.