Us Epa RFS2

Friday,
March 26, 2010
Book 2 of 2 Books
Pages 1466915320
Part II
Environmental
Protection Agency
40 CFR Part 80
Regulation of Fuels and Fuel Additives:
Changes to Renewable Fuel Standard
Program; Final Rule
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14670 Federal Register / Vol. 75, No. 58 / Friday, March 26, 2010 / Rules and Regulations
ENVIRONMENTAL PROTECTION assessments consider the full lifecycle documents in the docket are listed in
AGENCY emission impacts of fuel production the http://www.regulations.gov Web
from both direct and indirect emissions, site. Although listed in the index, some
40 CFR Part 80 including significant emissions from information is not publicly available,
[EPAHQOAR20050161; FRL91123] land use changes. In carrying out our e.g., confidential business information
lifecycle analysis we have taken steps to (CBI) or other information whose
RIN 2060A081 ensure that the lifecycle estimates are disclosure is restricted by statute.
based on the latest and most up-to-date Certain other material, such as
Regulation of Fuels and Fuel
science. The lifecycle greenhouse gas copyrighted material, is not placed on
Additives: Changes to Renewable Fuel
assessments reflected in this rulemaking the Internet and will be publicly
Standard Program
represent significant improvements in available only in hard copy form.
AGENCY: Environmental Protection analysis based on information and data Publicly available docket materials are
Agency (EPA). received since the proposal. However, available either electronically through
ACTION: Final rule. we also recognize that lifecycle GHG http://www.regulations.gov or in hard
assessment of biofuels is an evolving copy at the Air and Radiation Docket
SUMMARY: Under the Clean Air Act discipline and will continue to revisit and Information Center, EPA/DC, EPA
Section 211(o), as amended by the our lifecycle analyses in the future as West, Room 3334, 1301 Constitution
Energy Independence and Security Act new information becomes available. Ave., NW., Washington, DC. The Public
of 2007 (EISA), the Environmental EPA plans to ask the National Academy Reading Room is open from 8:30 a.m. to
Protection Agency is required to of Sciences for assistance as we move 4:30 p.m., Monday through Friday,
promulgate regulations implementing forward. Based on current analyses we excluding legal holidays. The telephone
changes to the Renewable Fuel Standard have determined that ethanol from corn number for the Public Reading Room is
program. The revised statutory starch will be able to comply with the (202) 5661744, and the telephone
requirements specify the volumes of required greenhouse gas (GHG) number for the Air Docket is (202) 566
cellulosic biofuel, biomass-based diesel, threshold for renewable fuel. Similarly, 1742.
advanced biofuel, and total renewable biodiesel can be produced to comply
fuel that must be used in transportation FOR FURTHER INFORMATION CONTACT: Julia
with the 50% threshold for biomass- MacAllister, Office of Transportation
fuel. This action finalizes the based diesel, sugarcane with the 50%
regulations that implement the and Air Quality, Assessment and
threshold for advanced biofuel and Standards Division, Environmental
requirements of EISA, including the multiple cellulosic-based fuels with
cellulosic, biomass-based diesel, Protection Agency, 2000 Traverwood
their 60% threshold. Additional fuel Drive, Ann Arbor, MI 48105; Telephone
advanced biofuel, and renewable fuel pathways have also been determined to
standards that will apply to all gasoline number: 7342144131; Fax number:
comply with their thresholds. The 7342144816; E-mail address:
and diesel produced or imported in assessment for this rulemaking also
2010. The final regulations make a macallister.julia@epa.gov, or
indicates the increased use of renewable Assessment and Standards Division
number of changes to the current fuels will have important
Renewable Fuel Standard program Hotline; telephone number (734) 214
environmental, energy and economic 4636; E-mail address asdinfo@epa.gov.
while retaining many elements of the impacts for our Nation.
compliance and trading system already SUPPLEMENTARY INFORMATION:
in place. This final rule also implements DATES: This final rule is effective on July
the revised statutory definitions and 1, 2010, and the percentage standards General Information
criteria, most notably the new apply to all gasoline and diesel
produced or imported in 2010. The I. Does This Final Rule Apply to Me?
greenhouse gas emission thresholds for
renewable fuels and new limits on incorporation by reference of certain Entities potentially affected by this
renewable biomass feedstocks. This publications listed in the rule is final rule are those involved with the
rulemaking marks the first time that approved by the Director of the Federal production, distribution, and sale of
greenhouse gas emission performance is Register as of July 1, 2010. transportation fuels, including gasoline
being applied in a regulatory context for ADDRESSES: EPA has established a and diesel fuel or renewable fuels such
a nationwide program. As mandated by docket for this action under Docket ID as ethanol and biodiesel. Regulated
the statute, our greenhouse gas emission No. EPAHQOAR20050161. All categories include:
Category NAICS 1 codes SIC 2 codes Examples of potentially regulated entities
Industry .................................................................. 324110 2911 Petroleum Refineries.

Industry .................................................................. 325193 2869 Ethyl alcohol manufacturing.
Industry .................................................................. 325199 2869 Other basic organic chemical manufacturing.
Industry .................................................................. 424690 5169 Chemical and allied products merchant wholesalers.
Industry .................................................................. 424710 5171 Petroleum bulk stations and terminals.
Industry .................................................................. 424720 5172 Petroleum and petroleum products merchant wholesalers.
Industry .................................................................. 454319 5989 Other fuel dealers
1 North American Industry Classification System (NAICS)
2 Standard Industrial Classification (SIC) system code.
This table is not intended to be now aware could potentially be regulated by this final action, you
exhaustive, but rather provides a guide regulated by this final action. Other should carefully examine the
for readers regarding entities likely to be types of entities not listed in the table applicability criteria in 40 CFR part 80.
regulated by this final action. This table could also be regulated. To determine If you have any questions regarding the
lists the types of entities that EPA is whether your activities would be applicability of this final action to a
Federal Register / Vol. 75, No. 58 / Friday, March 26, 2010 / Rules and Regulations 14671
particular entity, consult the person i. Recordkeeping and Reporting for 2. EPA Cellulosic Biofuel Waiver Credits
listed in the preceding section. Feedstocks for Cellulosic Biofuel
ii. Approaches for Foreign Producers of 3. Application of Cellulosic Biofuel Waiver
Outline of This Preamble Renewable Fuel Credits
(1) RIN-Generating importers J. Changes to Recordkeeping and Reporting
I. Executive Summary
(2) RIN-Generating foreign producers Requirements
A. Summary of New Provisions of the RFS
iii. Aggregate Compliance Approach for 1. Recordkeeping
Program
Planted Crops and Crop Residue From 2. Reporting
1. Required Volumes of Renewable Fuel
Agricultural Land 3. Additional Requirements for Producers
2. Standards for 2010 and Effective Date for
(1) Analysis of Total Agricultural Land in of Renewable Natural Gas, Electricity,
New Requirements
2007 and Propane
a. 2010 Standards
(2) Aggregate Agricultural Land Trends 4. Attest Engagements
b. Effective Date
Over Time K. Production Outlook Reports
3. Analysis of Lifecycle Greenhouse Gas
(3) Aggregate Compliance Determination L. What Acts Are Prohibited and Who Is
Emissions and Thresholds for Renewable
d. Treatment of Municipal Solid Waste Liable for Violations?
Fuels
(MSW) III. Other Program Changes
a. Background and Conclusions
C. Expanded Registration Process for A. The EPA Moderated Transaction System
b. Fuel Pathways Considered and Key
Producers and Importers (EMTS)
Model Updates Since the Proposal
1. Domestic Renewable Fuel Producers 1. Need for the EPA Moderated Transaction
c. Consideration of Fuel Pathways Not Yet
2. Foreign Renewable Fuel Producers System
Modeled
3. Renewable Fuel Importers 2. Implementation of the EPA Moderated
4. Compliance with Renewable Biomass
4. Process and Timing Transaction System
Provision
D. Generation of RINs 3. How EMTS Will Work
5. EPA-Moderated Transaction System
1. Equivalence Values 4. A Sample EMTS Transaction
6. Other Changes to the RFS Program
2. Fuel Pathways and Assignment of D B. Upward Delegation of RIN-Separating
B. Impacts of Increasing Volume
Codes Responsibilities
Requirements in the RFS2 Program
II. Description of the Regulatory Provisions a. Producers C. Small Producer Exemption
A. Renewable Identification Numbers b. Importers D. 20% Rollover Cap
(RINs) c. Additional Provisions for Foreign E. Small Refinery and Small Refiner
B. New Eligibility Requirements for Producers Flexibilities
Renewable Fuels 3. Facilities With Multiple Applicable 1. BackgroundRFS1
1. Changes in Renewable Fuel Definitions Pathways a. Small Refinery Exemption
a. Renewable Fuel 4. Facilities That Co-Process Renewable b. Small Refiner Exemption
b. Advanced Biofuel Biomass and Fossil Fuels 2. Statutory Options for Extending Relief
c. Cellulosic Biofuel 5. Facilities That Process Municipal Solid 3. The DOE Study/DOE Study Results
d. Biomass-Based Diesel Waste 4. Ability To Grant Relief Beyond 211(o)(9)
e. Additional Renewable Fuel 6. RINless Biofuel 5. Congress-Requested Revised DOE Study
f. Cellulosic Diesel E. Applicable Standards 6. What Were Finalizing
2. Lifecycle GHG Thresholds 1. Calculation of Standards a. Small Refinery and Small Refiner
3. Renewable Fuel Exempt From 20 a. How Are the Standards Calculated? Temporary Exemptions
Percent GHG Threshold b. Standards for 2010 b. Case-by-Case Hardship for Small
a. General Background of the Exemption 2. Treatment of Biomass-Based Diesel in Refineries and Small Refiners
Requirement 2009 and 2010 c. Program Review
b. Definition of Commenced Construction a. Shift in 2009 Biomass-Based Diesel 7. Other Flexibilities Considered for Small
c. Definition of Facility Boundary Compliance Demonstration to 2010 Refiners
d. Proposed Approaches and Consideration b. Treatment of Deficit Carryovers, RIN a. Extensions of the RFS1 Temporary
of Comments Rollover, and RIN Valid Life For Exemption for Small Refiners
i. Comments on the Proposed Basic Adjusted 2010 Biomass-Based Diesel b. Phase-in
Approach Requirement c. RIN-Related Flexibilities
ii. Comments on the Expiration of 3. Future Standards F. Retail Dispenser Labeling for Gasoline
Grandfathered Status F. Fuels That Are Subject to the Standards With Greater Than 10 Percent Ethanol
e. Final Grandfathering Provisions 1. Gasoline G. Biodiesel Temperature Standardization
i. Increases in Volume of Renewable Fuel 2. Diesel IV. Renewable Fuel Production and Use
Produced at Grandfathered Facilities Due 3. Other Transportation Fuels A. Overview of Renewable Fuel Volumes
to Expansion G. Renewable Volume Obligations (RVOs) 1. Reference Cases
ii. Replacements of Equipment 1. Designation of Obligated Parties 2. Primary Control Case
iii. Registration, Recordkeeping and 2. Determination of RVOs Corresponding to a. Cellulosic Biofuel
Reporting the Four Standards b. Biomass-Based Diesel
4. New Renewable Biomass Definition and 3. RINs Eligible To Meet Each RVO c. Other Advanced Biofuel
Land Restrictions 4. Treatment of RFS1 RINs Under RFS2 d. Other Renewable Fuel
a. Definitions of Terms a. Use of RFS1 RINs To Meet Standards 3. Additional Control Cases Considered
i. Planted Crops and Crop Residue Under RFS2 B. Renewable Fuel Production
ii. Planted Trees and Tree Residue b. Deficit Carryovers From the RFS1 1. Corn/Starch Ethanol
iii. Slash and Pre-Commercial Thinnings Program to RFS2 a. Historic/Current Production
iv. Biomass Obtained From Certain Areas H. Separation of RINs b. Forecasted Production Under RFS2
at Risk From Wildfire 1. Nonroad 2. Imported Ethanol
v. Algae 2. Heating Oil and Jet Fuel 3. Cellulosic Biofuel
b. Implementation of Renewable Biomass 3. Exporters a. Current State of the Industry
Requirements 4. Requirement to Transfer RINs With b. Setting the 2010 Cellulosic Biofuel
i. Ensuring That RINs Are Generated Only Volume Standard
For Fuels Made From Renewable 5. Neat Renewable Fuel and Renewable c. Current Production Outlook for 2011 and
Biomass Fuel Blends Designated as Beyond
ii. Whether RINs Must Be Generated For Transportation Fuel, Heating Oil, or Jet d. Feedstock Availability
All Qualifying Renewable Fuel Fuel i. Urban Waste
c. Implementation Approaches for I. Treatment of Cellulosic Biofuel ii. Agricultural and Forestry Residues
Domestic Renewable Fuel 1. Cellulosic Biofuel Standard iii. Dedicated Energy Crops
iv. Summary of Cellulosic Feedstocks for 2. Ozone 7. International Impacts

2022 a. Current Levels B. Energy Security Impacts
4. Biodiesel & Renewable Diesel b. Projected Levels Without RFS2 Volumes 1. Implications of Reduced Petroleum Use
a. Historic and Projected Production c. Projected Levels With RFS2 Volumes on U.S. Imports
i. Biodiesel 3. Air Toxics 2. Energy Security Implications
ii. Renewable Diesel a. Current Levels a. Effect of Oil Use on Long-Run Oil Price,
b. Feedstock Availability b. Projected Levels U.S. Import Costs, and Economic Output
C. Biofuel Distribution i. Acetaldehyde b. Short-Run Disruption Premium From
1. Biofuel Shipment to Petroleum ii. Formaldehyde Expected Costs of Sudden Supply
Terminals iii. Ethanol Disruptions
2. Petroleum Terminal Accommodations iv. Benzene c. Costs of Existing U.S. Energy Security
3. Potential Need for Special Blendstocks v. 1,3-Butadiene Policies
at Petroleum Terminals for E85 vi. Acrolein 3. Combining Energy Security and Other
4. Need for Additional E85 Retail Facilities vii. Population Metrics Benefits
D. Ethanol Consumption 4. Nitrogen and Sulfur Deposition 4. Total Energy Security Benefits
1. Historic/Current Ethanol Consumption a. Current Levels C. Benefits of Reducing GHG Emissions
2. Increased Ethanol Use Under RFS2 b. Projected Levels 1. Introduction
a. Projected Gasoline Energy Demand E. Health Effects of Criteria and Air Toxics 2. Derivation of Interim Social Cost of
b. Projected Growth in Flexible Fuel Pollutants Carbon Values
Vehicles 1. Particulate Matter 3. Application of Interim SCC Estimates to
c. Projected Growth in E85 Access a. Background
GHG Emissions Reductions
d. Required Increase in E85 Refueling Rates b. Health Effects of PM
D. Criteria Pollutant Health and
e. Market Pricing of E85 Versus Gasoline 2. Ozone
Environmental Impacts
3. Consideration of >10% Ethanol Blends a. Background
1. Overview
V. Lifecycle Analysis of Greenhouse Gas b. Health Effects of Ozone
2. Quantified Human Health Impacts
Emissions 3. NOX and SOX
3. Monetized Impacts
A. Introduction a. Background
4. What Are the Limitations of the Health
1. Open and Science-Based Approach to b. Health Effects of NOX
Impacts Analysis?
EPAs Analysis c. Health Effects of SOX
E. Summary of Costs and Benefits
2. Addressing Uncertainty 4. Carbon Monoxide
IX. Impacts on Water
B. Methodology 5. Air Toxics
A. Background
1. Scope of Analysis a. Acetaldehyde
a. Inclusion of Indirect Land Use Change 1. Agriculture and Water Quality
b. Acrolein
b. Models Used c. Benzene 2. Ecological Impacts
c. Scenarios Modeled d. 1,3-Butadiene 3. Impacts to the Gulf of Mexico
2. Biofuel Modeling Framework & e. Ethanol B. Upper Mississippi River Basin Analysis
Methodology for Lifecycle Analysis f. Formaldehyde 1. SWAT Model
Components g. Peroxyacetyl Nitrate (PAN) 2. AEO 2007 Reference Case
a. Feedstock Production h. Naphthalene 3. Reference Cases and RFS2 Control Case
i. Domestic Agricultural Sector Impacts i. Other Air Toxics 4. Case Study
ii. International Agricultural Sector F. Environmental Effects of Criteria and Air 5. Sensitivity Analysis
Impacts Toxic Pollutants C. Additional Water Issues
b. Land Use Change 1. Visibility 1. Chesapeake Bay Watershed
i. Amount of Land Area Converted and 2. Atmospheric Deposition 2. Ethanol Production and Distribution
Where 3. Plant and Ecosystem Effects of Ozone a. Production
ii. Type of Land Converted 4. Environmental Effects of Air Toxics b. Distillers Grain With Solubles
iii. GHG Emissions Associated With VII. Impacts on Cost of Renewable Fuels, c. Ethanol Leaks and Spills From Fueling
Conversion Gasoline, and Diesel Stations
(1) Domestic Emissions A. Renewable Fuel Production Costs 3. Biodiesel Plants
(2) International Emissions 1. Ethanol Production Costs 4. Water Quantity
iv. Timeframe of Emission Analysis a. Corn Ethanol 5. Drinking Water
v. GTAP and Other Models b. Cellulosic Ethanol X. Public Participation
c. Feedstock Transport i. Feedstock Costs XI. Statutory and Executive Order Reviews
d. Biofuel Processing ii. Production Costs for Cellulosic Biofuels A. Executive Order 12866: Regulatory
e. Fuel Transportation c. Imported Sugarcane Ethanol Planning and Review
f. Vehicle Tailpipe Emissions 2. Biodiesel and Renewable Diesel B. Paperwork Reduction Act
3. Petroleum Baseline Production Costs C. Regulatory Flexibility Act
C. Threshold Determination and a. Biodiesel 1. Overview
Assignment of Pathways b. Renewable Diesel 2. Background
D. Total GHG Reductions B. Biofuel Distribution Costs 3. Summary of Potentially Affected Small
E. Effects of GHG Emission Reductions and 1. Ethanol Distribution Costs Entities
Changes in Global Temperature and Sea 2. Cellulosic Distillate and Renewable 4. Reporting, Recordkeeping, and
Level Diesel Distribution Costs Compliance
VI. How Would the Proposal Impact Criteria 3. Biodiesel Distribution Costs 5. Related Federal Rules
and Toxic Pollutant Emissions and Their C. Reduced U.S. Refining Demand 6. Steps Taken To Minimize the Significant
Associated Effects? D. Total Estimated Cost Impacts Economic Impact on Small Entities
A. Overview of Impacts 1. Refinery Modeling Methodology a. Significant Panel Findings
B. Fuel Production & Distribution Impacts 2. Overall Impact on Fuel Cost b. Outreach With Small Entities (and the
of the Proposed Program VIII. Economic Impacts and Benefits Panel Process)
C. Vehicle and Equipment Emission A. Agricultural and Forestry Impacts c. Panel Recommendations, Proposed
Impacts of Fuel Program 1. Biofuel Volumes Modeled Provisions, and Provisions Being
D. Air Quality Impacts 2. Commodity Price Changes Finalized
1. Particulate Matter 3. Impacts on U.S. Farm Income i. Delay in Standards
a. Current Levels 4. Commodity Use Changes ii. Phase-in
b. Projected Levels Without RFS2 Volumes 5. U.S. Land Use Changes iii. RIN-Related Flexibilities
c. Projected Levels With RFS2 Volumes 6. Impact on U.S. Food Prices iv. Program Review
v. Extensions of the Temporary Exemption biofuel mandate to 16 billion gallons by A. Summary of New Provisions of the
Based on a Study of Small Refinery 2022, representing the bulk of the RFS Program
Impacts increase in the renewable fuels
vi. Extensions of the Temporary Exemption Todays notice establishes new
mandate.
Based on Disproportionate Economic regulatory requirements for the RFS
Hardship EPAs proposed rule sought comment program that will be implemented
7. Conclusions on a multitude of issues, ranging from through a new subpart M to 40 CFR part
D. Unfunded Mandates Reform Act how to interpret the new definitions for 80. EPA is maintaining several elements
E. Executive Order 13132: Federalism renewable biomass to the Agencys
F. Executive Order 13175: Consultation of the RFS1 program such as regulations
proposed methodology for conducting governing the generation, transfer, and
and Coordination With Indian Tribal
Governments
the greenhouse gas lifecycle assessments use of Renewable Identification
G. Executive Order 13045: Protection of required by EISA. The decisions Numbers (RINs). At the same time, we
Children From Environmental Health presented in this final rule are heavily are making a number of updates to
Risks and Safety Risks informed by the many public comments reflect the changes brought about by
H. Executive Order 13211: Actions we received on the proposed rule. In EISA
Concerning Regulations That addition, and as with the proposal, we
Significantly Affect Energy Supply, sought input from a wide variety of 1. Required Volumes of Renewable Fuel
Distribution, or Use stakeholders. The Agency has had
I. National Technology Transfer The RFS program is intended to
Advancement Act
multiple meetings and discussions with require a minimum volume of
J. Executive Order 12898: Federal Actions renewable fuel producers, technology renewable fuel to be used each year in
to Address Environmental Justice in companies, petroleum refiners and the transportation sector. In response to
Minority Populations and Low-Income importers, agricultural associations, EPAct 2005, under RFS1 the required
Populations lifecycle experts, environmental groups, volume was 4.0 billion gallons in 2006,
K. Congressional Review Act vehicle manufacturers, states, gasoline
XII. Statutory Provisions and Legal Authority
ramping up to 7.5 billion gallons by
and petroleum marketers, pipeline 2012. Starting in 2013, the program also
I. Executive Summary owners and fuel terminal operators. We required that the total volume of
also have worked closely with other renewable fuel contain at least 250
Through this final rule, the U.S. Federal agencies and in particular with
Environmental Protection Agency is million gallons of fuel derived from
the Departments of Energy and cellulosic biomass.
revising the National Renewable Fuel Agriculture.
Standard program to implement the In response to EISA, todays action
requirements of the Energy This section provides an executive makes four primary changes to the
Independence and Security Act of 2007 summary of the final RFS2 program volume requirements of the RFS
(EISA). EISA made significant changes requirements that EPA is implementing program. First, it substantially increases
to both the structure and the magnitude as a result of EISA. The RFS2 program the required volumes and extends the
of the renewable fuel program created will replace the RFS1 program timeframe over which the volumes ramp
by the Energy Policy Act of 2005 promulgated on May 1, 2007 (72 FR up through at least 2022. Second, it
(EPAct). The EISA fuel program, 23900).1 Details of the final divides the total renewable fuel
hereafter referred to as RFS2, mandates requirements can be found in Sections requirement into four separate
the use of 36 billion gallons of II and III, with certain lifecycle aspects categories, each with its own volume
renewable fuel by 2022a nearly five- detailed in Section V. requirement. Third, it requires, with
fold increase over the highest volume This section also provides a summary certain exceptions applicable to existing
specified by EPAct. EISA also of EPAs assessment of the facilities, that each of these mandated
established four separate categories of environmental and economic impacts of volumes of renewable fuels achieve
renewable fuels, each with a separate the use of higher renewable fuel certain minimum thresholds of GHG
volume mandate and each with a volumes. Details of these analyses can emission performance. Fourth, it
specific lifecycle greenhouse gas be found in Sections IV through IX and requires that all renewable fuel be made
emission threshold. The categories are in the Regulatory Impact Analysis (RIA). from feedstocks that meet the new
renewable fuel, advanced biofuel, definition of renewable biomass
biomass-based diesel, and cellulosic 1 To meet the requirements of EPAct, EPA had including certain land use restrictions.
previously adopted a limited program that applied The volume requirements in EISA are
biofuel. There is a notable increase in only to calendar year 2006. The RFS1 program
the mandate for cellulosic biofuels in refers to the general program adopted in the May
shown in Table I.A.11.
particular. EISA increased the cellulosic 2007 rulemaking. BILLING CODE 656050P
BILLING CODE 656050C

ER26MR10.414</GPH>
As shown in the table, the volume and are moving forward. As discussed standards represent the fraction of a
requirements are not exclusive, and in Section IV.B.3, the timing for many refiners or importers gasoline and
generally result in nested requirements. of the projects indicates that while few diesel volume which must be renewable
Any renewable fuel that meets the will be able to provide commercial fuel. Additional discussion of the 2010
requirement for cellulosic biofuel or volumes for 2010, an increasing number standards can be found in Section
biomass-based diesel is also valid for will come on line in 2011, 2012, and II.E.1.b.
meeting the advanced biofuel 2013. The success of these projects is
requirement. Likewise, any renewable then expected to accelerate growth of TABLE I.A.21STANDARDS FOR
fuel that meets the requirement for the cellulosic biofuel industry out into 2010
advanced biofuel is also valid for the future. EIA provided us with a
meeting the total renewable fuel projection on October 29, 2009 of 5.04 Cellulosic biofuel ....................... 0.004%
requirement. See Section V.C for further million gallons (6.5 million ethanol- Biomass-based diesel .............. 1.10%
discussion of which specific types of equivalent gallons) of cellulosic biofuel Advanced biofuel ...................... 0.61%
fuel may qualify for the four categories production for 2010. While our Renewable fuel ......................... 8.25%
shown in Table I.A.11. company-by-company assessment varies
from EIAs, as described in Section b. Effective Date
2. Standards for 2010 and Effective Date
IV.B.3., and actual cellulosic production Under CAA section 211(o) as
for New Requirements
volume during 2010 will be a function modified by EISA, EPA is required to
While EISA established the renewable of developments over the course of
fuel volumes shown in Table I.A.11, it revise the RFS1 regulations within one
2010, we nevertheless believe that 5 year of enactment, or December 19,
also requires that the Administrator set million gallons (6.5 million ethanol
the standards based on these volumes 2008. Promulgation by this date would
equivalent) represents a reasonable, yet have been consistent with the revised
each November for the following year achievable level for the cellulosic
based in part on information provided volume requirements shown in Table
standard for 2010. While this is lower I.A.11 that begin in 2009 for certain
from the Energy Information Agency than the level specified in EISA, no
(EIA). In the case of the cellulosic categories of renewable fuel. As
change to the advanced biofuel and total
biofuel standard, section 211(o)(7)(D) of described in the NPRM, we were not
renewable fuel standards is warranted.
EISA specifically requires that the able to promulgate final RFS2 program
With the inclusion of an energy-based
standard be set based on the volume requirements by December 19, 2008.
Equivalence Value for biodiesel and
projected to be available during the Under todays rule, the transition
renewable diesel, 2010 compliance with
following year. If the volume is lower from using the RFS1 regulatory
the biomass-based diesel standard will
than the level shown in Table I.A.11, provisions regarding registration, RIN
be more than enough to ensure
then EISA allows the Administrator to generation, reporting, and
compliance with the advanced biofuel
also lower the advanced biofuel and recordkeeping to using comparable
standard for 2010.
total renewable fuel standards each year Todays rule also includes special provisions in this RFS2 rule will occur
accordingly. Given the implications of provisions to account for the 2009 on July 1, 2010. This is the start of the
these standards and the necessary biomass-based diesel volume 1st quarter following completion of the
judgment that cant be reduced to a requirements in EISA. As described in statutorily required 60-day
formula akin to the RFS1 regulations, the NPRM, in November 2008 we used Congressional Review period for such a
we believe it is appropriate to set the the new total renewable fuel volume of rulemaking as this. This will provide
standards through a notice-and- 11.1 billion gallons from EISA as the adequate lead time for all parties to
comment rulemaking process. Thus, for basis for the 2009 total renewable fuel transition to the new regulatory
future standards, we intend to issue an standard that we issued under the RFS1 requirements, including additional time
NPRM by summer and a final rule by regulations.2 While this approach to prepare for RFS2 implementation for
November 30 of each year in order to ensured that the total mandated those entities who may find it helpful,
determine the appropriate standards renewable fuel volume required by EISA especially those covered by the RFS
applicable in the following year. for 2009 was used, the RFS1 regulatory program for the first time. In addition,
However, in the case of the 2010 structure did not provide a mechanism making the transition at the end of the
standards, we are finalizing them as part for implementing the 0.5 billion gallon quarter will help simplify the
of todays action. requirement for biomass-based diesel recordkeeping and reporting transition
nor the 0.6 billion gallon requirement to RFS2. To facilitate the volume
a. 2010 Standards obligations being based on the full
for advanced biofuel. As we proposed,
While we proposed that the cellulosic and as is described in more detail in years gasoline and diesel production,
biofuel standard would be set at the Section II.E.2, we are addressing this and to enable the smooth transition
EISA-specified level of 100 million issue in todays rule by combining the from the RFS1 to RFS2 regulatory
gallons for 2010, based on analysis of 2010 biomass-based diesel requirement provisions, Renewable Identification
information available at this time, we no of 0.65 billion gallons with the 2009 Numbers (RINswhich are used in the
longer believe the full volume can be biomass based diesel requirement of 0.5 program for both credit trading and for
met. Since the proposal, we have had billion gallons to require that obligated compliance demonstration) that were
detailed discussions with over 30 parties meet a combined 2009/2010 generated under the RFS1 regulations
companies that are in the business of requirement of 1.15 billion gallons by will continue to be valid for compliance
developing cellulosic biofuels and the end of the 2010 compliance year. No with the RFS2 obligations. Further
cellulosic biofuel technology. Based on similar provisions are required in order discussion of transition issues can be
these discussions, we have found that to fulfill the 2009 advanced biofuel found in Sections II.A and II.G.4,
many of the projects that served as the volume mandate. respectively.
basis for the proposal have been put on The resulting 2010 standards are According to EISA, the renewable fuel
hold, delayed, or scaled back. At the shown in Table I.A.21. These obligations applicable under RFS2
same time, there have been a number of apply on a calendar basis. That is,
additional projects that have developed 2 73 FR 70643, November 21, 2008 obligated parties must determine their
renewable volume obligations (RVOs) at volumes for three of the volume obligation. The proposed rule called for
the end of a calendar year based on the mandates are met for 2010. In effect EPA obligated parties to meet the full volume
volume of gasoline or diesel fuel they would be requiring that obligated mandates for all four volume mandates,
produce during the year, and they must parties use enough cellulosic biofuel, and to base their volume obligation on
demonstrate compliance with their biomass-based diesel, and advanced the volume of gasoline and diesel
RVOs in an annual report that is due biofuel to meet approximately 75% of produced starting January 1, 2010.
two months after the end of the calendar the total volumes required for these While the RFS2 regulations are not
year. fuels under EISA. While the total effective until after January 1, 2010, the
For 2010, todays rule will follow this volume mandate under EISA for same full year approach is being taken
same general approach. The four RFS2 renewable fuel would likely be met, the for the 2010 volumes of gasoline and
RVOs for each obligated party will be other three volumes mandates would diesel. Obligated parties have been on
calculated on the basis of all gasoline only be met in part. The final option notice based on EPAs proposal,
and diesel produced or imported on and would involve delaying the RFS2 discussions with many stakeholders
after January 1, 2010, through December requirements until January 1, 2011, during the rulemaking, the issuance of
31, 2010. Obligated parties will be which would avoid the complexity of the final rule itself, and publication of
required to demonstrate by February 28 the second approach, but would be even this rule in the Federal Register. As
of 2011 that they obtained sufficient less consistent with EISAs discussed above, there is adequate time
RINs to satisfy their 2010 RVOs. We requirements. for obligated parties to meet their 2010
believe this is an appropriate approach The approach adopted in this rule is volume obligations by the spring of
as it is more consistent with Congress clearly the most consistent with EISAs 2011.
provisions in EISA for 2010, and there requirement of four different volume This approach does not impose any
is adequate lead time for the obligated mandates for all of calendar year 2010. retroactive requirements. The obligation
parties to achieve compliance. In addition, EPA is confident that that is imposed under the RFS2
The issue for EPA to resolve is how obligated parties have adequate lead- regulations is forward lookingby the
to apply the four volume mandates time to comply with the four volume spring of 2011, when compliance is
under EISA for calendar year 2010. requirements under the approach determined, obligated parties must
These volume mandates are translated adopted in this rule. The volume satisfy certain volume obligations.
into applicable percentages that requirements are achieved by obtaining These future requirements are
obligated parties then use to determine the appropriate number of RINs from calculated in part based on volumes of
their renewable fuel volume obligations producers of the renewable fuel. The gasoline and diesel produced prior to
based on the gasoline and diesel they obligated parties do not need lead time the effective date of the RFS2
produce or import in 2010. There are for construction or investment purposes, regulations, but this does not make the
three basic approaches that EPA has as they are not changing the way they RFS2 requirement retroactive in nature.
considered, based on comments on the produce gasoline or diesel, do not need The RFS2 regulations do not change in
proposal. The first is the approach to design to install new equipment, or any way the legal obligations or
adopted in this rulethe four RFS2 take other actions that require longer requirements that apply prior to the
applicable percentages are determined lead time. Obtaining the appropriate effective date of the RFS2 regulations.
based on the four volume mandates amount of RINs involves contractual or Instead, the RFS2 requirements impose
covered by this rule, and the renewable other arrangements with renewable fuel new requirements that must be met in
volume obligation for a refiner or producers or other holders of RINs. the future. There is adequate lead time
importer will be determined by Obligated parties now have experience to comply with these RFS2
applying these percentages to the implementing RFS1, and the actions requirements, and they achieve a result
volume of gasoline and diesel fuel they needed to comply under the RFS2 that is more consistent with Congress
produce during calendar year 2010. regulations are a continuation of these goals in establishing 4 volume mandates
Under this approach, there is no kinds of RFS1 activities. In addition, an for calendar year 2010, and for these
separate applicable percentage under adequate supply of RINs is expected to reasons EPA is adopting this approach
RFS1 for 2010, however RINs generated be available for compliance by obligated for calendar year 2010.
in 2009 and 2010 under RFS1 can be parties. RFS1 RINs have been produced Parties that intend to generate RINs,
used to meet the four volume throughout 2009 and continue to be own and/or transfer them, or use them
obligations for 2010 under the RFS2 produced since the beginning of 2010. for compliance purposes after July 1,
regulations. Another option, which was There has been and will be no gap or lag 2010 will need to register or re-register
considered and rejected by EPA, is in the production of RINS, as the RFS1 under the RFS2 provisions and modify
much more complicated(1) determine regulations continue in effect and their information technology (IT)
an RFS1 applicable percentage based on require that renewable fuel producers systems to accommodate the changes we
just the total renewable fuel volume generate RINs for the renewable fuel are finalizing today. As described more
mandate, using the same total volume they produce. These 2009 and 2010 fully in Section II, these changes
for renewable fuel as used in the first RFS1 RINs will be available and can be include redefining the D code within
approach, and require obligated parties used towards the volume requirements the RIN that identifies which standard
to apply that percentage to the gasoline of obligated parties for 2010. These a fuel qualifies for, adding a process for
produced from January 1, 2010 until the RFS1 RINS combined with the RFS2 verifying that feedstocks meet the
effective date of the RFS2 regulations, RINs that will be generated by renewable biomass definition, and
and (2) determine the four RFS2 renewable fuel producers are expected calculating compliance with four
applicable percentages as discussed to provide an adequate supply of RINs standards instead of one. EPAs
above, but require obligated parties to to ensure compliance for all of the registration system is available now for
apply them to only the gasoline and renewable volume mandates. For further parties to complete the registration
diesel in 2010 after the effective date of discussion of the expected supply of process. Further details on this process
the RFS2 regulations. Of greater concern renewable fuel, see section IV. can be found elsewhere in todays
than its complexity, the second In addition, obligated parties have preamble as well as at http://
approach fails to ensure that the total received adequate notice of this www.epa.gov/otaq/regs/fuels/
fuelsregistration.htm. Parties that corn starch at a new facility (or recommendations for subsequent
produce motor vehicle, nonroad, expanded capacity from an existing) lifecycle GHG assessments on this
locomotive, and marine (MVNRLM) using natural gas, biomass or biogas for subject. At this time we are estimating
diesel fuel but not gasoline will be process energy and using advanced this review by the National Academy of
newly obligated parties and may be efficient technologies that we expect Sciences may take up to two years. As
establishing IT systems for the RFS will be most typical of new production specified by EISA, if EPA revises the
program for the first time. facilities will meet the 20% GHG analytical methodology for determining
emission reduction threshold compared lifecycle greenhouse gas emissions, any
3. Analysis of Lifecycle Greenhouse Gas
to the 2005 baseline gasoline. We are such revision will apply to renewable
Emissions and Thresholds for
also determining that biobutanol from fuel from new facilities that commence
Renewable Fuels
corn starch meets the 20% threshold. construction after the effective date of
a. Background and Conclusions Similarly, EPA is making the the revision.
A significant aspect of the RFS2 determination that biodiesel and
renewable diesel from soy oil or waste b. Fuel Pathways Considered and Key
program is the requirement that the Model Updates Since the Proposal
lifecycle GHG emissions of a qualifying oils, fats and greases will exceed the
renewable fuel must be less than the 50% GHG threshold for biomass-based EPA is making the GHG threshold
lifecycle GHG emissions of the 2005 diesel compared to the 2005 petroleum determination based on a methodology
baseline average gasoline or diesel fuel diesel baseline. In addition, we have that includes an analysis of the full
that it replaces; four different levels of now modeled biodiesel and renewable lifecycle, including significant
reductions are required for the four diesel produced from algal oils as emissions related to international land-
different renewable fuel standards. complying with the 50% threshold for use change. As described in more detail
These lifecycle performance biomass-based diesel. EPA is also below and in Section V of this
improvement thresholds are listed in determining that ethanol from sugarcane preamble, EPA has used the best
Table I.A.31. Compliance with each complies with the applicable 50% GHG available models for this purpose, and
threshold requires a comprehensive reduction threshold for advanced has incorporated many modifications to
evaluation of renewable fuels, as well as biofuels. The modeled pathways its proposed approach based on
the baseline for gasoline and diesel, on (feedstock and production technology) comments from the public and peer
the basis of their lifecycle emissions. As for cellulosic ethanol and cellulosic reviewers and developing science. EPA
mandated by EISA, the greenhouse gas diesel would also comply with the 60% has also quantified the uncertainty
emissions assessments must evaluate GHG reduction threshold applicable to associated with significant components
the aggregate quantity of greenhouse gas cellulosic biofuels. As discussed later in of its analyses, including important
emissions (including direct emissions section V, there are also other fuels and factors affecting GHG emissions
and significant indirect emissions such fuel pathways that we are determining associated with international land use
as significant emissions form land use will comply with the GHG thresholds. change. As discussed below, EPA has
Under EISA, EPA is allowed to adjust updated and refined its modeling
changes) related to the full lifecycle,
the GHG reduction thresholds approach since proposal in several
including all stages of fuel and
downward by up to 10% if necessary important ways, and EPA is confident
feedstock production, distribution and
based on lifecycle GHG assessment of that its modeling of GHG emissions
use by the ultimate consumer.
biofuels likely to be available. Based on associated with international land use is
the results summarized above, we are
TABLE I.A.31LIFECYCLE GHG comprehensive and provides a
not finalizing any adjustments to the
THRESHOLDS SPECIFIED IN EISA reasonable and scientifically robust
lifecycle GHG thresholds for the four
[Percent Reduction from Baseline] basis for making the threshold
renewable fuel standard categories.
EPA recognizes that as the state of determinations described above. As
Renewable fuel a ....................... 20 scientific knowledge continues to discussed below, EPA plans to continue
Advanced biofuel ...................... 50 evolve in this area, the lifecycle GHG to improve upon its analyses, and will
Biomass-based diesel .............. 50 assessments for a variety of fuel update it in the future as appropriate.
Cellulosic biofuel ....................... 60 Through technical outreach, the peer
pathways are likely to be updated.
a The 20% criterion generally applies to re- Therefore, while EPA is using its review process, and the public comment
newable fuel from new facilities that com- current lifecycle assessments to inform period, EPA received and reviewed a
menced construction after December 19, the regulatory determinations for fuel significant amount of data, studies, and
2007. information on our proposed lifecycle
pathways in this final rule, as required
It is important to recognize that fuel by the statute, the Agency is also analysis approach. We incorporated a
from the existing capacity of current committing to further reassess these number of new, updated, and peer-
facilities and the capacity of all new determinations and lifecycle estimates. reviewed data sources in our final
facilities that commenced construction As part of this ongoing effort, we will rulemaking analysis including better
prior to December 19, 2007 (and in some ask for the expert advice of the National satellite data for tracking land use
cases prior to December 31, 2009) are Academy of Sciences, as well as other changes and improved assessments of
exempt, or grandfathered, from the 20% experts, and incorporate their advice N2O impacts from agriculture. The new
lifecycle requirement for the Renewable and any updated information we receive and updated data sources are discussed
Fuel category. Therefore, EPA has in the into a new assessment of the lifecycle further in this section, and in more
discussion below emphasized its GHG emissions performance of the detail in Section V.
analysis on those plants and fuels that biofuels being evaluated in this final We also performed dozens of new
are likely to be used for compliance rule. EPA will request that the National modeling runs, uncertainty analyses,
with the rule and would be subject to Academy of Sciences evaluate the and sensitivity analyses which are
the lifecycle thresholds. Based on the approach taken in this rule, the leading to greater confidence in our
analyses and approach described in underlying science of lifecycle results. We have updated our analyses
Section V of this preamble, EPA is assessment, and in particular indirect in conjunction with, and based on,
determining that ethanol produced from land use change, and make advice from experts from government,
academia, industry, and not for profit concluded that this was an impacts associate with their use in
institutions. improvement over the previous GREET biofuel production are largely the result
The new studies, data, and analysis release that was used in the proposal of energy required to produce the
performed for the final rulemaking analysis (Version 1.8B). Therefore, EPA feedstock (in the case of algal oil) and
impacted the lifecycle GHG results for updated the GHG emission factors for the energy required to turn that
biofuels in a number of different ways. fertilizer production used in our feedstock into a biofuel.
In some cases, updates caused the analysis to the values from the new Sugarcane Ethanol: Sugarcane
modeled analysis of lifecycle GHG GREET version. This had the result of ethanol was analyzed considering a
emissions from biofuels to increase, slightly increasing the GHG emissions range of technologies and assuming
while other updates caused the modeled associated with fertilizer production alternative pathways for dehydrating the
emissions to be reduced. Overall, the and thus slightly increasing the GHG ethanol prior to its use as a biofuel in
revisions since our proposed rule have emission impacts of domestic the U.S. For the final rule, our analysis
led to a reduction in modeled lifecycle agriculture. also shows less overall indirect land use
GHG emissions as compared to the For the final rule, EPA has analyzed change (less land needed) associated
values in the proposal. The following a variety of corn ethanol pathways with sugarcane ethanol production. For
highlights the most significant revisions. including ethanol made from corn the proposal, we assumed sugarcane
Section V details all of the changes starch using natural gas, coal, and expansion in Brazil would result in
made and their relative impacts on the biomass as process energy sources in cropland expansion into grassland and
results. production facilities utilizing both dry lost pasture being replaced through
Corn Ethanol: The final rule analysis mill and wet mill processes. For corn deforestation. Based on newly available
found less overall indirect land use starch ethanol, we also considered the regional specific data from Brazil,
change (less land needed), thereby technology enhancements likely to historic trends, and higher resolution
improving the lifecycle GHG occur in the future such as the addition satellite data, in the final rule, sugarcane
performance of corn ethanol. The main of corn oil fractionation or extraction expansion onto grassland is coupled
reasons for this decrease are: technology, membrane separation with greater pasture intensification,
Based on new studies that show the technology, combined heat and power such that there is less projected impact
rate of improvement in crop yields as a and raw starch hydrolysis. on forests. Furthermore, new data
function of price, crop yields are now Biobutanol from corn starch: In provided by commenters showed
modeled to increase in response to addition to ethanol from corn starch, for reduced sugarcane ethanol process
higher crop prices. When higher crop this final rule, we have also analyzed energy, which also reduced the
yields are used in the models, less land bio-butanol from corn starch. Since the estimated lifecycle GHG impact of
is needed domestically and globally for feedstock impacts are the same as for sugarcane ethanol production.
crops as biofuels expand. ethanol from corn starch, the assessment Cellulosic Ethanol: We analyzed
New research available since the for biobutanol reflects the differing cellulosic ethanol production using both
proposal indicates that the corn ethanol impacts due to the production process biochemical (enzymatic) and thermo-
production co-product, distillers grains and energy content of biobutanol chemical processes with corn stover,
and solubles (DGS), is more efficient as compared to that of ethanol. switchgrass, and forestry thinnings and
an animal feed (meaning less corn is Soybean Biodiesel: The new waste as feedstocks. For cellulosic
needed for animal feed) than we had information described above for corn diesel, we analyzed production using
assumed in the proposal. Therefore, in ethanol also leads to lower modeled the Fischer-Tropsch process. For the
our analyses for the final rule, domestic GHG impacts associated with soybean final rule, we updated the cellulosic
corn exports are not impacted as much biodiesel. The revised assessment ethanol conversion rates based on new
by increased biofuel production as they predicts less overall indirect land use data provided by the National
were in the proposal analysis. change (less land needed) and less Renewable Energy Laboratory (NREL.)
Improved satellite data allowed us impact from the land use changed that As a result of this update, the gallons
to more finely assess the types of land does occur (due to updates in types of per ton yields for switchgrass and
converted when international land use converted land assumed). In addition, several other feedstock sources
changes occur, and this more precise the latest IPCC guidance indicates increased in our analysis for the final
assessment led to a lowering of modeled reduced domestic soybean N2O rule, while the predicted yields from
GHG impacts. Based on previous emissions, and updated USDA and corn residue and several other feedstock
satellite data, the proposal assumed industry data show reductions in sources decreased slightly from the
cropland expansion onto grassland biodiesel processing energy use and a NPRM values. In addition, we also
would require an amount of pasture to higher co-product credit, all of which updated our feedstock production yields
be replaced through deforestation. For further reduced the modeled soybean based on new work conducted by the
the final rulemaking analysis we biodiesel lifecycle GHG emissions. This Pacific Northwest National Laboratory
incorporated improved economic has resulted in a significant (PNNL). This analysis increased the tons
modeling of demand for pasture area improvement in our assessment of the per acre yields for several dedicated
and satellite data which indicates that lifecycle performance of soybean energy crops. These updates increased
pasture is also likely to expand onto biodiesel as compared to the estimate in the amount of cellulosic ethanol
existing grasslands. This reduced the the proposal. projected to come from energy crops.
GHG emissions associated with an Biodiesel and Renewable Diesel from While the increase in crop yields and
amount of land use change. Algal Oil and Waste Fats and Greases: conversion efficiency reduced the GHG
However, we note that not all In addition to biodiesel from soy oil, emissions associated with cellulosic
modeling updates necessarily reduced biodiesel and renewable diesel from ethanol, there remains an increased
predicted GHG emissions from land use algal oil (should it reach commercial demand for land to grow dedicated
change. As one example, since the production) and biodiesel from waste energy crops; this land use impact
proposal a new version of the GREET oils, fats and greases have been resulted in increased GHG emissions
model (Version 1.8C) has been released. modeled. These feedstock sources have with the net result varying by the type
EPA reviewed the new version and little or no land use impact so the GHG of cellulosic feedstock source.
We note that several of the renewable (petroleum baseline). While EPA has results but exclude that part of the
fuel pathways modeled are still in early made several updates to the petroleum results associated with international
stages of development or analysis in response to comments (see land use change.
commercialization and are likely to Section V for further discussion), we are For the reasons discussed above and
continue to develop as the industry finalizing the approach based on our in more detail in Section V, EPA rejects
moves toward commercial production. interpretation of the definition in the the view that the modeling relied upon
Therefore, it will be necessary to Act as requiring that the petroleum in the final rule, which includes
reanalyze several pathways using baseline represent an average of the emissions associated with international
updated data and information as the gasoline and diesel fuel (whichever is indirect land use change, is too
technologies develop. For example, being replaced by the renewable fuel) uncertain to provide a credible and
biofuel derived from algae is undergoing sold as transportation fuel in 2005. reasonable scientific basis for
wide ranging development. Therefore As discussed in more detail later, the determining whether the aggregate
for now, our algae analyses presume modeling results developed for lifecycle emissions exceed the
particular processes and energy purposes of the final rule provide a rich thresholds. In addition, as discussed
requirements which will need to be and comprehensive base of information elsewhere, the definition of lifecycle
reviewed and updated as this fuel for making the threshold emissions includes significant indirect
source moves toward commercial determinations. There are numerous emissions associated with land use
production. modeling runs, reflecting updated change. In deciding whether a bio-fuel
For this final rule we have inputs to the model, sensitivity pathway meets the threshold, EPA has
incorporated a statistical analysis of analyses, and uncertainty analyses. The to consider what it knows about all
uncertainty about critical variables in results for different scenarios include a aspects of the lifecycle emissions, and
our pathway analysis. This uncertainty range and a best estimate or mid-point. decide whether there is a valid basis to
analysis is explained in detail in Section Given the potentially conservative find that the aggregate lifecycle
V and is consistent with the specific nature of the base crop yield emissions of the fuel, taking into
recommendations received through our assumption, EPA believes the actual account significant indirect emissions
peer review and public comments on crop yield in 2022 may be above the from land use change meets the
the proposal. The uncertainty analysis base yield; however we are not in a threshold. Based on the analyses
focused on two aspects of indirect land position to characterize how much conducted for this rule, EPA has
use changethe types of land converted above it might be. To the extent actual determined international indirect land
and the GHG emission associated with yields are higher, the base yield use impacts are significant and therefore
different types of land converted. In modeling results would underestimate must be included in threshold
particular, our uncertainty analysis to some degree the actual GHG compliance assessment.
focused on such specific sources of emissions reductions compared to the If the international land use impacts
information as the satellite imaging used baseline. were so uncertain that their impact on
to inform our assessment of land use In making the threshold lifecycle GHG emissions could not be
trends and the specific changes in determinations for this rule, EPA adequately determined, as claimed by
carbon storage expected from a change weighed all of the evidence available to commenters, this does not mean EPA
in land use in each geographic area of it, while placing the greatest weight on could assume the international land use
the world modeled. We have also the best estimate value for the base yield change emissions are zero, as
performed additional sensitivity scenario. In those cases where the best commenters suggest. High uncertainty
analyses including analysis of two yield estimate for the base yield scenario would not mean that emissions are
scenarios for corn and soy beans to exceeds the reduction threshold, EPA small and can be ignored; rather it could
assess the impact of changes in yield judges that there is a good basis to be mean that we could not tell whether
assumptions. confident that the threshold will be they are large or small. If high
This uncertainty analysis provides achieved and is determining that the uncertainty meant that EPA were not
information on both the range of bio-fuel pathway complies with the able to determine that indirect
possible outcomes for the parameters applicable threshold. To the extent the emissions from international land use
analyzed, an estimate of the degree of midpoint of the scenarios analyzed lies change are small enough that the total
confidence that the actual result will be further above a threshold for a particular lifecycle emissions meet the threshold,
within a particular range (in our case, biofuel pathway, we have increasingly then that fuel could not be determined
we estimated a 95% confidence greater confidence that the biofuel to meet the GHG thresholds of EISA and
interval) and an estimate of the central exceeds the threshold. the fuel would necessarily have to be
tendency or midpoint of the GHG EPA recognizes that certain excluded from the program.
performance estimate. commenters suggest that there is a very In any case, that is not the situation
In the proposal, we considered several high degree of uncertainty associated in here as EPA rejects commenters
options for the timeframe over which to particular with determining suggestion and does not agree that the
measure lifecycle GHG impacts and the international indirect land use changes uncertainty over the indirect emissions
possibility of discounting those impacts. and their emissions impacts, and from land use change is too high to
Based on peer review recommendations because of this EPA should exclude any make a reasoned threshold
and other comments received, EPA is calculation of international indirect determination. Therefore biofuels with a
finalizing its assessments based on an land use changes in its lifecycle significant international land use impact
analysis assuming 30 years of continued analysis. Commenters say EPA should are included within this program.
emission impacts after the program is make the threshold determinations

fully phased in by 2022 and without based solely on modeling of other c. Consideration of Fuel Pathways Not
discounting those impacts. sources of lifecycle emissions. In effect, Yet Modeled
EPA also notes that it received commenters argue that the uncertainty Not all biofuel pathways have been
significant comment on our proposed of the modeling associated with directly modeled for this rule. For
baseline lifecycle greenhouse gas international indirect land use change example, while we have modeled
assessment of gasoline and diesel means we should use our modeling cellulosic biofuel produced from corn
stover, we have not modeled the regardless of country of origin. These these pathways. We have received
specific GHG impact of cellulosic pathways also include fuels that might comments on several additional
biofuel produced from other crop be produced from similar feedstock feedstock/fuel pathways, including
residues such as wheat straw or rice sources to those already modeled and rapeseed/canola, camelina, sweet
straw. Today, in addition to finalizing a which are expected to have less or no sorghum, wheat, and mustard seed, and
threshold compliance determination for indirect land use change. In such cases, we welcome parties to utilize the
those pathways we specifically we believe that in order to compete petition process described in Section
modeled, in some cases, our technical economically in the renewable fuel V.C to request EPA to examine
judgment indicates other pathways are marketplace such pathways are likely to additional pathways.
likely to be similar enough to modeled be at least as energy efficient as those We anticipate there could be
pathways that we are also assured these modeled and thus have comparable additional cases where we currently do
similar pathways qualify. These lifecycle GHG performance. Based on not have information on which to base
pathways include fuels produced from these considerations, we are extending a lifecycle GHG assessment perhaps
the same feedstock and using the same the lifecycle results for the fuel because we are not yet aware of
production process but produced in pathways already modeled to 5 broader potential unique plant configurations or
countries other than those modeled. The categories of feedstocks. This extension operations that could result in greater
agricultural sector modeling used for of lifecycle modeling results is efficiencies than assumed in our
our lifecycle analysis does not predict discussed further in Section V.C. analysis. In many cases, such alternative
any soybean biodiesel or corn ethanol We have established five categories of pathways could have been explicitly
biofuel feedstock sources under which modeled as a reasonably straightforward
will be imported into the U.S., or any
modeled feedstock sources and extension of pathways we have modeled
imported sugarcane ethanol from
feedstock sources similar to those if the necessary information had been
production in countries other than
modeled are grouped and qualify on the available. For example, while we have
Brazil. However, these rules do not
basis of our existing modeling. These modeled specific enhancements to corn
prohibit the use in the U.S. of these
are: starch ethanol production such as
fuels produced in countries not
1. Crop residues such as corn stover, membrane separation or corn oil
modeled if they are also expected to
wheat straw, rice straw, citrus residue. extraction, there are likely other
comply with the eligibility requirements 2. Forest material including eligible additional energy saving or co-product
including meeting the thresholds for forest thinnings and solid residue pathways available or under
GHG performance. Although the GHG remaining from forest product development by the industry. It is
emissions of producing these fuels from production. reasonable to also consider these
feedstock grown or biofuel produced in 3. Annual cover crops planted on alternative energy saving or co-product
other countries has not been specifically existing crop land such as winter cover pathways based upon their technical
modeled, we do not anticipate their use crops. merits. Other current or emerging
would impact our conclusions regarding 4. Separated food and yard waste pathways may require new analysis and
these feedstock pathways. The including biogenic waste from food modeling for EPA to fully evaluate
emissions of producing these fuels in processing. compliance. For example, fuel pathways
other countries could be slightly higher 5. Perennial grasses including with feedstocks or fuel types not yet
or lower than what was modeled switchgrass and miscanthus. modeled by EPA may require additional
depending on a number of factors. Our The full set of pathways for which we modeling and, it follows, public
analyses indicate that crop yields for the have been able to make a compliance comment before a determination of
crops in other countries where these decision are described in Section V. compliance can be made.
fuels are also most likely to be produced Threshold determinations for certain Therefore, for those fuel pathways
are similar or lower than U.S. values other pathways were not possible at this that are different than those pathways
indicating the same or slightly higher time because sufficient modeling or data EPA has listed in todays regulations,
GHG impacts. Agricultural sector inputs is not yet available. In some of these EPA is establishing a petition process
for the crops in these other countries are cases, we recognize that a renewable whereby a party can petition the Agency
roughly the same or lower than the U.S. fuel is already being produced from an to consider new pathways for GHG
pointing toward the same or slightly alternative feedstock. Although we have reduction threshold compliance. As
lower GHG impacts. If crop production the data needed for analysis, we did not described in Section V.C, the petition
were to expand due to biofuels in the have sufficient time to complete the process is meant for parties with serious
countries where the models predict necessary lifecycle GHG impact intention to move forward with
these biofuels might additionally be assessment for this final rule. We will production via the petitioned fuel
produced would tend to lower our model and evaluate additional pathways pathway and who have moved
assessment of international indirect after this final rule on the basis of sufficiently forward in the business
impacts but could increase our current or likely commercial production process to show feasibility of the fuel
assessment of the domestic (i.e., the in the near-term and the status of pathways implementation. In addition,
country of origin) land use impacts. EPA current analysis at EPA. EPA anticipates if the petition addresses a fuel pathway
believes, because of these offsetting modeling grain sorghum ethanol, woody that already has been determined to
factors along with the small amounts of pulp ethanol, and palm oil biodiesel qualify as one or more types of
fuel potentially coming from other after this final rule and including the renewable fuel under RFS (e.g.,
countries, that incorporating fuels determinations in a rulemaking within 6 renewable fuel, or advanced biofuel),
produced in other countries will not months. Our analyses project that they the pathway must have the potential to
impact our threshold analysis. will be used in meeting the RFS2 result in qualifying for a renewable fuel
Therefore, fuels of the same fuel type, volume standard in the near-term. type for which it was not previously
produced from the same feedstock using During the course of the NPRM qualified. Thus, for example, the
the same fuel production technology as comment period, EPA received detailed Agency will not undertake any
modeled fuel pathways will be assessed information on these pathways and is additional review for a party wishing to
the same GHG performance decisions currently in the process of analyzing get a modified LCA value for a
previously approved fuel pathway if the We note again that the continued implement this requirement, we are
desired new value would not change the work of EPA and others is expected to finalizing three potential mechanisms
overall pathway classification. result in improved models and data for domestic and foreign renewable fuel
The petition must contain all the sources, and that re-analysis based on producers to verify that their feedstocks
necessary information on the fuel such updated information could revise comply with this requirement. The first
pathway to allow EPA to effectively these determinations. Any such involves renewable biomass
assess the lifecycle performance of the reassessment that would impact recordkeeping and reporting
new fuel pathway. See Section V.C for compliance would necessarily go requirements by renewable fuel
a full description. EPA will use the data through rulemaking and would only be producers for their individual facilities.
supplied via the petition and other applicable to production from future As an alternative to these individual
pertinent data available to the Agency to facilities after the revised rule was recordkeeping and reporting
evaluate whether the information for finalized, as required by EISA. requirements, the second allows
that fuel pathway, combined with renewable fuel producers to form a
4. Compliance With Renewable Biomass
information developed in this consortium to fund an independent
Provision
rulemaking for other fuel pathways that third-party to conduct an annual
have been determined to exceed the EISA changed the definition of renewable biomass quality-assurance
threshold, is sufficient to allow EPA to renewable fuel to require that it be survey, based on a plan approved by
evaluate the pathway for a made from feedstocks that qualify as EPA. The third is an aggregate
determination of compliance. We expect renewable biomass. EISAs definition compliance approach applicable only to
such a determination would be pathway of the term renewable biomass limits crops and crop residue from the U.S. It
specific. For some fuel pathways with the types of biomass as well as the types utilizes USDAs publicly available
unique modifications or enhancements of land from which the biomass may be agricultural land data as the basis for an
to production technologies in pathways harvested. The definition includes: EPA determination of compliance with
otherwise modeled for the regulations Planted crops and crop residue the renewable biomass requirements for
listed today, EPA may be able to from agricultural land cleared prior to these particular feedstocks. This
evaluate the pathway as a reasonably December 19, 2007 and actively determination will be reviewed
straight-forward extension of our managed or fallow on that date. annually, and if EPA finds it is no
Planted trees and tree residue from longer warranted, then renewable fuel
current assessments. In such cases, we
tree plantations cleared prior to producers using domestically grown
would expect to make a decision for that
December 19, 2007 and actively crops and crop residue will be required
specific pathway without conducting a
managed on that date. to conduct individual or consortium-
full rulemaking process. We would Animal waste material and
expect to evaluate whether the pathway based verification processes to ensure
byproducts. that their feedstocks qualify as
is consistent with the definitions of Slash and pre-commercial thinnings
renewable fuel types in the regulations, renewable biomass. These final
from non-federal forestlands that are provisions are described below, with a
generally without going through neither old-growth nor listed as
rulemaking, and issue an approval or more in-depth discussion in Section
critically imperiled or rare by a State II.B.4.
disapproval that applies to the Natural Heritage program.
petitioner. We anticipate that we will Biomass cleared from the vicinity of For renewable fuel producers using
subsequently propose to add the buildings and other areas at risk of feedstocks other than planted crops or
pathway to the regulations. Other wildfire. crop residue from agricultural land that
current or emerging fuel pathways may Algae. do not choose to participate in the third-
require significant new analysis and/or Separated yard waste and food party survey funded by an industry
modeling for EPA to conduct an waste. consortium, the final renewable biomass
adequate evaluation for a compliance In todays rule, EPA is finalizing recordkeeping and reporting provisions
determination (e.g., feedstocks or fuel definitions for the many terms included require that individual producers obtain
types not yet included in EPAs within the definition of renewable documentation about their feedstocks
assessments for this regulation). For biomass. Where possible, EPA has from their feedstock supplier(s) and take
these pathways, EPA would give notice adhered to existing statutory, regulatory the measures necessary to ensure that
and seek public comment on a or industry definitions for these terms, they know the source of their feedstocks
compliance determination under the although in some cases we have altered and can demonstrate to EPA that they
annual rulemaking process established definitions to conform to EISAs have complied with the EISA definition
in todays regulations. If we make a statutory language, to further the goals of renewable biomass. Specifically,
technical determination of compliance, of EISA, or for ease of program EPAs renewable biomass reporting
then we anticipate the fuel producer implementation. For example, EPA is requirements for producers who
will be able to generate RINs for fuel defining agricultural land from which generate RINs include a certification on
produced under the additional pathway crops and crop residue can be harvested renewable fuel production reports that
following the next available quarterly for RIN-generating renewable fuel the feedstock used for each renewable
update of the EPA Moderated production as including cropland, fuel batch meets the definition of
Transaction System (EMTS). EPA will pastureland, and land enrolled in the renewable biomass. Additionally,
process those petitions as expeditiously Conservation Reserve Program. An in- producers will be required to include
as possible for those pathways which depth discussion of the renewable with their quarterly reports a summary
are closer to the commercial production biomass definitions can be found in of the types and volumes of feedstocks
stage than others. In all events, parties Section II.B.4. used throughout the quarter, as well as
are expected to begin this process with In keeping with EISA, under todays maps of the land from which the
ample lead time as compared to their final rule, renewable fuel producers may feedstocks used in the quarter were
commercial start dates. Further only generate RINs for fuels made from harvested. EPAs final renewable
discussion of this petition process can feedstocks meeting the definition of biomass recordkeeping provisions
be found in Section V.C. renewable biomass. In order to require renewable fuel producers to
maintain sufficient records to support 5. EPA-Moderated Transaction System or food waste. We are finalizing
their claims that their feedstocks meet We introduced the EPA Moderated provisions that would allow certain
the definition of renewable biomass, Transaction System (EMTS) in the portions of MSW to be included as
including maps or electronic data NPRM as a new method for managing renewable biomass, provided that
identifying the boundaries of the land the generation of RINs and transactions reasonable separation has first occurred.
where the feedstocks were produced, Equivalence Values: We are
involving RINs. EMTS is designed to
documents tracing the feedstocks from generally maintaining the provisions
resolve the RIN management issues of
the land to the renewable fuel from RFS1 that the Equivalence Value
RFS1 that lead to widespread RIN
production facility, other written for each renewable fuel will be based on
errors, many times resulting in invalid
records from their feedstock suppliers its energy content in comparison to
RINs and often tedious remedial
that serve as evidence that the feedstock ethanol, adjusted for renewable content.
procedures to resolve those errors. It is The cellulosic biofuel, advanced
qualifies as renewable biomass, and for also designed to address the added RIN
producers using planted trees or tree biofuel, and renewable fuel standards
categories, more complex RIN can be met with ethanol-equivalent
residue from tree plantations, written generation requirements, and additional volumes of renewable fuel. However,
records that serve as evidence that the volume of RINs associated with RFS2. since the biomass-based diesel standard
land from which the feedstocks were Commenters broadly support EMTS and is a diesel standard, its volume must
obtained was cleared prior to December most stated that its use should coincide be met on a biodiesel-equivalent energy
19, 2007 and actively managed on that with the start of RFS2; however, many basis.
date. commenters expressed concerns over Cellulosic biofuel waiver credits: If
Based on USDAs publicly available having sufficient time to implement the EPA reduces the required volume of
agricultural land data, EPA is able to new system. In todays action, we are cellulosic biofuel according to the
establish a baseline of the aggregate requiring the use of EMTS for all RFS2 waiver provisions in EISA, EPA will
amount of U.S. agricultural land RIN generations and transactions offer a number of credits to obligated
(meaning cropland, pastureland and beginning July 1, 2010. EPA has utilized parties no greater than the reduced
CRP land in the United States) that is an open process for the development of cellulosic biofuel standard. These
available for the production of crops EMTS since it was first introduced in waiver credits are not allowed to be
and crop residues for use in renewable the NPRM, conducting workshops and traded or banked for future use, and are
webinars, and soliciting stakeholder only allowed to be used to meet the
fuel production consistent with the
participation in its evaluation and cellulosic biofuel standard for the year
definition of renewable biomass. EPA
testing. EPA pledges to work with the that they are offered. In response to
has determined that, in the aggregate
regulated community, as a group and concerns expressed in comments on the
this amount of agricultural land (land
individually, to ensure EMTS is proposal, we are implementing certain
cleared or cultivated prior to EISAs
successfully implemented. EPA restrictions on the use of these waiver
enactment (December 19, 2007) and
anticipates that with this level of credits. For example, unlike Cellulosic
actively managed or fallow, and
assistance, regulated parties will not Biofuel RINs, waiver credits may not be
nonforested on that date) is expected to,
experience significant difficulties in used to meet either the advanced biofuel
at least in the near term, be sufficient to
transitioning to the new system, and standard or the total renewable fuel
support EISA renewable fuel obligations
EPA believes that the many benefits of standard. For the 2010 compliance
and other foreseeable demands for crop the new system warrant its immediate period, since the cellulosic standard is
products, without clearing and use. lower than the level otherwise required
cultivating additional land. EPA also
6. Other Changes to the RFS Program by EISA, we are making cellulosic
believes that economic factors will lead
waiver credits available to obligated
farmers to use the agricultural land Todays final rule also makes a parties for end-of-year compliance
available for crop production under number of other changes to the RFS should they need them at a price of
EISA rather than bring new land into program that are described in more $1.56 per gallon-RIN.
crop production. As a result, EPA is detail in Sections II and III below, Obligated fuels: EISA expanded the
deeming renewable fuel producers using including: program to cover transportation fuel,
domestically-grown crops and crop Grandfathering provisions: not just gasoline. Therefore, under
residue as feedstock to be in compliance Renewable fuel from existing facilities is RFS2, obligated fuel volumes will
with the renewable biomass exempt from the lifecycle GHG emission include all gasoline and all MVNRLM
requirements, and those producers need reduction threshold of 20% up to a diesel fuel. Other fuels such as jet fuel
not comply with the recordkeeping and baseline volume for that facility that and fuel intended for use in ocean-going
quarterly reporting requirements as will be established at the time of vessels are not obligated fuels under
established for the non-crop-based registration. As discussed in Section RFS2. However, renewable fuels used in
biomass sector. However, EPA will II.B.3, the exemption from the 20% GHG jet fuel or heating oil are valid for
annually review USDA data on lands in threshold applies only to renewable fuel meeting the renewable fuel volume
agricultural production to determine if that is produced from facilities which mandates. Similarly, while we are not
these conclusions remain valid. If EPA commenced construction on or before including natural gas, propane, or
determines that the 2007 baseline December 19, 2007, or in the case of electricity used in transportation as
amount of eligible agricultural land has ethanol plants that use natural gas or obligated fuels at this time, we will
been exceeded, EPA will publish a biodiesel for process heat, on or before allow renewable forms of these fuels to
notice of that finding in the Federal December 31, 2009. qualify under the program for generating
Register. At that point, renewable fuel Renewable fuels produced from RINs.
producers using planted crops or crop municipal solid waste (MSW): The new
residue from agricultural lands would renewable biomass definition in EISA B. Impacts of Increasing Volume
be subject to the same recordkeeping modified the ability for MSW-derived Requirements in the RFS2 Program
and reporting requirements as other fuels to qualify under the RFS program The displacement of gasoline and
renewable fuel producers. by restricting it to separated yard waste diesel with renewable fuels has a wide
range of environmental and economic increases in population-weighted projected to have a number of other
impacts. As we describe in Sections IV annual average ambient PM and ozone energy and economic impacts. The
IX, we have assessed many of these concentrations, which in turn are increased renewable fuel use is
impacts for the final rule. It is difficult anticipated to lead to up to 245 cases of estimated to reduce dependence on
to ascertain how much of these impacts adult premature mortality. The air foreign sources of crude oil, increase
might be due to the natural growth in quality impacts, however, are highly domestic sources of energy, and
renewable fuel use due to market forces variable from region to region. Ambient diversify our energy portfolio to help in
as crude oil prices rise versus what PM2.5 is likely to increase in areas moving beyond a petroleum-based
might be forced by the RFS2 standards. associated with biofuel production and economy. The increased use of
Regardless, these assessments provide transport and decrease in other areas; renewable fuels is also expected to have
important information on the wider for ozone, many areas of the country the added benefit of providing an
public policy considerations related to will experience increases and a few expanded market for agricultural
renewable fuel production and use, areas will see decreases. Ethanol products such as corn and soybeans and
climate change, and national energy concentrations will increase open new markets for the development
security. Where possible, we have tried substantially; for the other modeled air of cellulosic feedstock industries and
to provide two perspectives on the toxics there are some localized impacts, conversion technologies. Overall,
impacts of the renewable fuel volumes but relatively little impact on national however, we estimate that the
mandated in EISAboth relative to the average concentrations. We note that the renewable fuel standards will result in
RFS1 mandated volumes, and relative to air quality modeling results presented in significant net benefits, ranging between
a projection from EIA (AEO 2007) of this final rule do not constitute the $16 and $29 billion in 2022.
renewable fuel volumes that would have anti-backsliding analysis required by
been expected without EISA. Clean Air Act section 211(v). EPA will Table I.B1 summarizes the results of
Based on the results of our analyses, be analyzing air quality impacts of our impacts analyses of the volumes of
when fully phased in by 2022, the increased renewable fuel use through renewable fuels required by the RFS2
increased volume of renewable fuel that study and will promulgate standards in 2022 relative to the
required by this final rule in comparison appropriate mitigation measures under AEO2007 reference case and identifies
to the AEO 2007 forecast would result section 211(v), separate from this final the section where you can find further
in 138 million metric tons fewer CO2- action. explanation of it. As we work to
equivalent GHG emissions (annual In addition to air quality, there are implement the requirements of EISA,
average over 30 years), the equivalent of also expected to be adverse impacts on we will continue to assess these
removing 27 million vehicles from the both water quality and quantity as the impacts. These are the annual impacts
road today. production of biofuels and their projected in 2022 when the program is
At the same time, increases in feedstocks increase. fully phased in. Impacts in earlier years
emissions of hydrocarbons, nitrogen In addition to environmental impacts, would differ but in most cases were not
oxides, particulate matter, and other the increased volumes of renewable able to be modeled or assessed for this
pollutants are projected to lead to fuels required by this final rule are also final rule.
TABLE I.B1IMPACT SUMMARY OF THE RFS2 STANDARDS IN 2022 RELATIVE TO THE AEO2007 REFERENCE CASE
(2007 DOLLARS)
Section
Category Impact in 2022 discussed
Emissions and Air Quality
GHG Emissions ......................................................... 138 million metric tons .................................................................................... V.D.

Non-GHG Emissions (criteria and toxic pollutants) ... 1% to +10% depending on the pollutant ........................................................ VI.A.
Nationwide Ozone ..................................................... +0.12 ppb population-weighted seasonal max 8 hr average ............................. VIII.D.
Nationwide PM2.5 ....................................................... +0.002 g/m3 population-weighted annual average PM2.5 ................................ VIII.D.
Nationwide Ethanol .................................................... +0.409 g/m3 population-weighted annual average .......................................... VI.D.
Other Nationwide Air Toxics ...................................... 0.0001 to 0.023 g/m3 population-weighted annual average depending VI.D.
on the pollutant.
PM2.5-related Premature Mortality ............................. 33 to 85 additional cases of adult mortality (estimates vary by study) .............. VIII.D.
Ozone-related Premature Mortality ........................... 36 to 160 additional cases of adult mortality (estimates vary by study) ............ VIII.D.
Other Environmental Impacts
Loadings to the Mississippi River from the Upper Nitrogen: +1,430 million lbs. (1.2%) ................................................................... IX.
Mississippi River Basin. Phosphorus: +132 million lbs. (0.7%) ................................................................
Fuel Costs
Gasoline Costs .......................................................... 2.4/gal ............................................................................................................ VII.D.

Diesel Costs .............................................................. 12.1 /gal ........................................................................................................ VII.D.

Overall Fuel Cost ....................................................... $11.8 Billion ..................................................................................................... VII.D.
Gasoline and Diesel Consumption ............................ 13.6 Bgal ......................................................................................................... VII.C.
Food Costs
Corn ........................................................................... +8.2% .................................................................................................................. VIII.A.

Soybeans ................................................................... +10.3% ................................................................................................................ VIII.A.
TABLE I.B1IMPACT SUMMARY OF THE RFS2 STANDARDS IN 2022 RELATIVE TO THE AEO2007 REFERENCE CASE
(2007 DOLLARS)Continued
Section
Category Impact in 2022 discussed
Food ........................................................................... +$10 per capita ................................................................................................... VIII.A.
Economic Impacts
Energy Security ......................................................... +$2.6 Billion ........................................................................................................ VIII.B.

Monetized Health Impacts ......................................... $0.63 to $2.2 Billion ..................................................................................... VIII.D.
GHG Impacts (SCC) a ................................................ +$0.6 to $12.2 Billion (estimates vary by SCC assumption) ............................. VIII.C.
Oil Imports ................................................................. $41.5 Billion ..................................................................................................... VIII.B
Farm Gate Food ........................................................ +$3.6 Billion ........................................................................................................ VIII.A.
Farm Income ............................................................. +$13 Billion (+36%) ............................................................................................ VIII.A.
Corn Exports .............................................................. $57 Million (8%) ........................................................................................... VIII.A.
Soybean Exports ....................................................... $453 Million (14%) ....................................................................................... VIII.A.
Total Net Benefits b .................................................... +$13 to $26 Billion (estimates vary by SCC assumption) ................................. VIII.F.
a The models used to estimate SCC values have not been exercised in a systematic manner that would allow researchers to assess the prob-
ability of different values. Therefore, the interim SCC values should not be considered to form a range or distribution of possible or likely values.
See Section VIII.D for a complete summary of the interim SCC values.
b Sum of Overall Fuel Costs, Energy Security, Monetized Health Impacts, and GHG Impacts (SCC).
II. Description of the Regulatory can be made, including certain land use A. Renewable Identification Numbers
Provisions restrictions. (RINs)
While EISA made a number of (6) Expansion of the types of fuels that Under RFS2, each RIN will continue
changes to CAA section 211(o) that must are subject to the standards to include to represent one gallon of renewable
be reflected in the RFS program diesel. fuel in the context of demonstrating
regulations, it left many of the basic (7) Inclusion of specific types of compliance with Renewable Volume
program elements intact, including the waivers for different categories of Obligations (RVO), consistent with our
mechanism for translating national renewable fuels and, in certain approach under RFS1, and the RIN will
renewable fuel volume requirements circumstances, EPA-generated credits continue to have unique information
into applicable standards for individual for cellulosic biofuel. similar to the 38 digits in RFS1.
obligated parties, requirements for a However in the EPA Moderated
EISA does not change the basic Transaction System (EMTS), RIN detail
credit trading program, geographic
requirement under CAA 211(o) that the information will be available but
applicability, treatment of small
RFS program include a credit trading generally hidden during transactions. In
refineries, and general waiver
program. In the May 1, 2007 final general the codes within the RIN will
provisions. As a result, many of the
rulemaking implementing the RFS1 have the same meaning under RFS2 as
regulatory requirements of the RFS1
program, we described how we they do under RFS1, with the exception
program will remain largely or, in some
reviewed a variety of approaches to of the D code which will be expanded
cases, entirely unchanged. These
program design in collaboration with to cover the four categories of renewable
provisions include the distribution of
various stakeholders. We finally settled fuel defined in EISA.
RINs, separation of RINs, use of RINs to
on a RIN-based system for compliance As described in Section I.A.2, the
demonstrate compliance, provisions for
and credit purposes as the one which RFS2 regulatory program will go into
exporters, recordkeeping and reporting,
met our goals of being straightforward, effect on July 1, 2010, but the 2010
deficit carryovers, and the valid life of
maximizing flexibility, ensuring that percentage standards issued as part of
RINs.
volumes are verifiable, and maintaining todays rule will apply to all gasoline
The primary elements of the RFS the existing system of fuel distribution
program that we are changing to and diesel produced or imported on or
and blending. RINs represent the basic after January 1, 2010. As a result, some
implement the requirements in EISA fall framework for ensuring that the
primarily into the following seven areas: 2010 RINs will be generated under the
statutorily required volumes of RFS1 requirements and others will be
(1) Expansion of the applicable renewable fuel are used as
volumes of renewable fuel. generated under the RFS2 requirements,
transportation fuel in the U.S. Since the but all RINs generated in 2010 will be
(2) Separation of the volume RIN-based system generally has been valid for meeting the 2010 annual
requirements into four separate successful in meeting the statutory standards. Since RFS1 RINs and RFS2
categories of renewable fuel, with goals, we are maintaining much of its RINs will differ in the meaning of the D
corresponding changes to the RIN and to structure under RFS2. codes, we are implementing a
the applicable standards. This section describes the regulatory mechanism for distinguishing between
(3) New definitions of renewable fuel, changes we are finalizing to implement these two categories of RINs in order to
advanced biofuel, biomass-based diesel, the new EISA provisions. Section III appropriately apply them to the
and cellulosic biofuel. describes other changes to the RFS standards. In short, we are requiring the
(4) New requirement that renewable program that we considered or are use of D codes under RFS2 that do not
fuels meet certain lifecycle emission finalizing, including an EPA-moderated overlap the values for the D codes under
reduction thresholds. RIN trading system that provides a RFS1. Table II.A1 describes the D code
(5) New definition of renewable context within which all RIN transfers definitions we are finalizing in todays
biomass from which renewable fuels will occur. action.
TABLE II.A1FINAL D CODE DEFINITIONS

D value Meaning under RFS1 Meaning under RFS2
1 ............................................................ Cellulosic biomass ethanol ................................................................................. Not applicable.

2 ............................................................ Any renewable fuel that is not cellulosic biomass ethanol ................................ Not applicable.
3 ............................................................ Not applicable ..................................................................................................... Cellulosic biofuel.
4 ............................................................ Not applicable ..................................................................................................... Biomass-based diesel.
5 ............................................................ Not applicable ..................................................................................................... Advanced biofuel.
6 ............................................................ Not applicable ..................................................................................................... Renewable fuel.
7 ............................................................ Not applicable ..................................................................................................... Cellulosic diesel.
Under this approach, D code values of represent cellulosic diesel RINs, we fuel production, the processes that are
1 and 2 are only relevant for RINs believe its value in the marketplace will used to convert those feedstocks into
generated under RFS1, and D code be maximized as it will be priced fuel, and the lifecycle greenhouse gas
values of 3, 4, 5, 6, and 7 are only according to the relative demand for (GHG) emissions that are emitted in
relevant for RINs generated under RFS2. cellulosic biofuel and biomass-based comparison to the gasoline or diesel that
As described in Section I.A.2, the RFS1 diesel RINs. For instance, if demand for the renewable fuel displaces. This
regulations will apply in January cellulosic biofuel RINs is higher than section describes these eligibility
through June of 2010, while the RFS2 demand for biomass-based diesel RINs, criteria and how we are implementing
regulations will become effective on then cellulosic diesel RINs will be them for the RFS2 program.
July 1, 2010. RINs generated under RFS1 priced as if they are cellulosic biofuel
RINs. Not only does this approach 1. Changes in Renewable Fuel
regulations in the first three months of
benefit producers, but it allows Definitions
2010 can be used for meeting the four
2010 standards applicable under RFS2. obligated parties the flexibility to apply Under the previous Renewable Fuel
To accomplish this, these RFS1 RINs a RIN with a D code of 7 to either their Standards (RFS1), renewable fuel was
will be subject to the RFS1/RFS2 cellulosic biofuel RVO or their biomass- defined generally as any motor vehicle
transition provisions wherein they will based diesel RVO, depending on the fuel that is used to replace or reduce the
be deemed equivalent to one of the four number of RINs they have acquired to quantity of fossil fuel present in a fuel
RFS2 RIN categories using their RR and/ meet these two obligations. It also helps mixture used to fuel a motor vehicle.
or D codes. See Section II.G.4 for further the functionality of the RIN program by The RFS1 definition included motor
description of how RFS1 RINs will be helping protect against the potential for vehicle fuels produced from biomass
used to meet standards under RFS2. The artificial RIN shortages in the material such as grain, starch, fats,
determination of which D code will be marketplace for one standard or the greases, oils, and biogas. The definition
assigned to a given batch of renewable other even though sufficient qualifying specifically included cellulosic biomass
fuel is described in more detail in fuel was produced. ethanol, waste derived ethanol, and
Section II.D.2 below. Under RFS2, each batch-RIN biodiesel, all of which were defined
Table II.A1 includes one D code generated will continue to uniquely separately. (See 72 FR 23915).
corresponding to each of the four identify not only a specific batch of The definitions of renewable fuels
renewable fuel categories defined in renewable fuel, but also every gallon- under todays rule (RFS2) are based on
EISA, and an additional D code of 7 RIN assigned to that batch. Thus the RIN the new statutory definition in EISA.
corresponding to the unique, additional will continue to be defined as follows: Like the previous rules, the definitions
type of renewable fuel called cellulosic RIN: KYYYYCCCCFFFFFBBBBBRRDSS in RFS2 include a general definition of
diesel. As described in the NPRM, a SSSSSSEEEEEEEE renewable fuel, but unlike RFS1, we are
diesel fuel product produced from Where: including a separate definition of
cellulosic feedstocks that meets the 60% K = Code distinguishing assigned RINs from
Renewable Biomass which identifies
GHG threshold could qualify as either separated RINs the feedstocks from which renewable
cellulosic biofuel or biomass-based YYYY = Calendar year of production or fuels may be made.
diesel. The NPRM described two import Another difference in the definitions
possible approaches to this unique CCCC = Company ID of renewable fuel is that RFS2 contains
category of renewable fuel: FFFFF = Facility ID three subcategories of renewable fuels:
1. Have the producer of the cellulosic BBBBB = Batch number (1) Advanced Biofuel, (2) Cellulosic
RR = Code identifying the Equivalence Value
diesel designate their fuel up front as Biofuel and (3) Biomass-Based Diesel.
D = Code identifying the renewable fuel
either cellulosic biofuel with a D code category Each must meet threshold levels of
of 3, or biomass-based diesel with a D SSSSSSSS = Start of RIN block reduction of greenhouse gas emissions
code of 4, limiting the subsequent EEEEEEEE = End of RIN block as discussed in Section II.B.2. The
potential in the marketplace for the RIN specific definitions and how they differ
to be used for just one standard or the B. New Eligibility Requirements for from RFS1 follow below.
other. Renewable Fuels
Aside from the higher volume a. Renewable Fuel
2. Have the producer of the cellulosic
diesel designate their fuel with a new requirements, most of the substantive Renewable Fuel is defined as fuel
cellulosic D code of 7, allowing the changes that EISA makes to the RFS produced from renewable biomass and
subsequent use of the RIN in the program affect the eligibility of that is used to replace or reduce the
marketplace interchangeably for either renewable fuels in meeting one of the quantity of fossil fuel present in a
the cellulosic biofuel standard or the four volume requirements. Eligibility is transportation fuel. The definition of
biomass-based diesel standard. determined based on the types of Renewable Fuel now refers to
We are finalizing the second option. feedstocks that are used, the land that is transportation fuel rather than
By creating an additional D code of 7 to used to grow feedstocks for renewable referring to motor vehicle fuel.
Transportation fuel is also defined, It must also achieve a lifecycle GHG We selected the first option to be used
and means fuel used in motor vehicles, emission reduction of at least 60%, in the final rule. Under this approach,
motor vehicle engines, nonroad vehicles compared to the gasoline or diesel fuel a batch of fuel qualifying for the D code
or nonroad engines (except for ocean it displaces. Cellulosic biofuel is of 4 that is produced in a processing
going vessels). Also renewable fuel now assigned a D code of 3 as shown in unit in which only renewable biomass
includes heating fuel and jet fuel. Table II.A1. Cellulosic biofuel in is the feedstock for such batch, will
Given that the primary use of general also qualifies as both advanced meet the definition of Biomass-Based
electricity, natural gas, and propane is biofuel and renewable fuel. Diesel. Thus, serial batch processing in
not for fueling vehicles and engines, and The definition of cellulosic biofuel for which 100% vegetable oil is processed
the producer generally does not know RFS2 is broader in some respects than one day/week/month and 100%
how it will be used, we cannot require the RFS1 definition of cellulosic petroleum the next day/week/month
that producers or importers of these biomass ethanol. That definition could occur without the activity being
fuels generate RINs for all the volumes included only ethanol, whereas the considered co-processing. The
they produce as we do with other RFS2 definition of cellulosic biofuels resulting products could be blended
renewable fuels. However, we are includes any biomass-to-liquid fuel together, but only the volume produced
allowing fuel producers, importers and such as cellulosic gasoline or diesel in from vegetable oil will count as
end users to include electricity, natural addition to ethanol. The definition of biomass-based diesel. We believe this is
gas, and propane made from renewable cellulosic biofuel in RFS2 differs from the most straightforward approach and
biomass as a RIN-generating renewable RFS1 in another significant way. The an appropriate one, given that it would
fuel in RFS only if they can identify the RFS1 definition provided that ethanol allow RINs to be generated for volumes
specific quantities of their product made at any facilityregardless of of fuel meeting the 50% GHG reduction
which are actually used as a whether cellulosic feedstock is used or threshold that is derived from
transportation fuel,. This may be notmay be defined as cellulosic if at renewable biomass, while not providing
possible for some portion of renewable such facility animal wastes or other any credit for fuel derived from
electricity and biogas since many of the waste materials are digested or petroleum sources. In addition, this
affected vehicles and equipment are in otherwise used to displace 90% or more approach avoids the need for potentially
centrally-fueled fleets supplied under of the fossil fuel normally used in the complex provisions addressing how fuel
contract by a particular producer or production of ethanol. This provision should be treated when existing or even
importer of natural gas or propane. A was not included in EISA, and therefore mothballed petroleum hydrotreating
producer or importer of renewable does not appear in the definitions equipment is retrofitted and placed into
electricity or biogas who documents the pertaining to cellulosic biofuel in the new service for renewable fuel
use of his product in a vehicle or engine final rule. production or vice versa.
through a contractual pathway would be d. Biomass-Based Diesel Under todays rule, any fuel that does
allowed to generate RINs to represent not satisfy the definition of biomass-
that product, if it met the definition of Biomass-based diesel includes both
biodiesel (mono-alkyl esters) and non- based diesel only because it is co-
renewable fuel. (This is also discussed processed with petroleum will still meet
in Section II.D.2.a) ester renewable diesel (including
cellulosic diesel). The definition of the definition of Advanced Biofuel
b. Advanced Biofuel biodiesel is the same very broad provided it meets the 50% GHG
definition of biodiesel that was in threshold and other criteria for the D
Advanced Biofuel is a renewable
EPAct and in RFS1, and thus, it code of 5. Similarly it will meet the
fuel other than ethanol derived from
includes any diesel fuel made from definition of renewable fuel if it meets
corn starch and for which lifecycle GHG
biomass feedstocks. However, EISA a GHG emission reduction threshold of
emissions are at least 50% less than the
added three restrictions. First, EISA 20%. In neither case, however, will it
gasoline or diesel fuel it displaces.
requires that such fuel be made from meet the definition of biomass-based
Advanced biofuel would be assigned a
renewable biomass. Second, its lifecycle diesel.
D code of 5 as shown in Table II.A1.
While Advanced Biofuel GHG emissions must be at least 50% This restriction is only really an issue
specifically excludes ethanol derived less than the diesel fuel it displaces. for renewable diesel and biodiesel
from corn starch, it includes other types Third, the statutory definition of produced via the fatty acid methyl ester
of ethanol derived from renewable Biomass-based diesel excludes (FAME) process. For other forms of
biomass, including ethanol made from renewable fuel derived from co- biodiesel, it is never made through any
cellulose, hemicellulose, lignin, sugar or processing biomass with a petroleum sort of co-processing with petroleum.3
any starch other than corn starch, as feedstock. In our proposed rule, we Producers of renewable diesel must
long as it meets the 50% GHG emission sought comment on two options for how therefore specify whether or not they
reduction threshold. Thus, even if corn co-processing could be treated. The first use co-processing to produce the fuel
starch-derived ethanol were made so option considered co-processing to in order to determine the correct D code
that it met the 50% GHG reduction occur only if both petroleum and for the RIN.
threshold, it will still be excluded from biomass feedstock are processed in the e. Additional Renewable Fuel
being defined as an advanced biofuel. same unit simultaneously. The second
option considered co-processing to The statutory definition of additional
Such ethanol while not an advanced
occur if renewable biomass and renewable fuel specifies fuel produced
biofuel will still qualify as a renewable
fuel for purposes of meeting the petroleum feedstock are processed in
3 The production of biodiesel (mono alkyl esters)

standards. the same unit at any time; i.e., either does require the addition of methanol which is
simultaneously or sequentially. Under usually derived from natural gas, but which
c. Cellulosic Biofuel the second option, if petroleum contributes a very small amount to the resulting
Cellulosic biofuel is renewable fuel feedstock was processed in the unit, product. We do not believe that this was intended
by the statutes reference to co-processing which
derived from any cellulose, then no fuel produced from such unit, we believe was intended to address only renewable
hemicellulose, or lignin each of which even from a biomass feedstock, would fats or oils co-processed with petroleum in a
must originate from renewable biomass. be deemed to be biomass-based diesel. hydrotreater to produce renewable diesel.
from renewable biomass that is used to oil. This problem would be similar to TABLE II.B.21LIFECYCLE GHG
replace or reduce fossil fuels used in that which arose under RFS1 for certain THRESHOLDS IN EISAContinued
heating oil or jet fuel. EISA indicates renewable fuels (in particular biodiesel) [Percent reduction from a 2005 gasoline or
that EPA may allow for the generation that were produced for the highway diesel baseline]
of credits for such additional renewable diesel market but were also suitable for
fuel that will be valid for compliance other markets such as heating oil and Advanced biofuel .............................. 50%
purposes. Under the RFS program, RINs non-road applications where it was Biomass-based diesel ...................... 50%
operate in the role of credits, and RINs unclear at the time of fuel production Cellulosic biofuel ............................... 60%
are generated when renewable fuel is (when RINs are typically generated
produced rather than when it is under the RFS program) whether the There are also special provisions for
blended. In most cases, however, fuel would ultimately be eligible to each of these thresholds:
renewable fuel producers do not know generate RINs. Congress eliminated the
Renewable fuel: The 20% threshold
at the time of fuel production (and RIN complexity with regards to non-road
only applies to renewable fuel from new
generation) how their fuel will applications in RFS2 by making all fuels
ultimately be used. used in both motor vehicle and nonroad facilities that commenced construction
Under RFS1, only RINs assigned to applications subject to the renewable after December 19, 2007, with an
renewable fuel that was blended into fuel standard program. We believe it additional exemption from the 20%
motor vehicle fuel (i.e., highway fuel) best to interpret the Act so as to also threshold for ethanol plants that
are valid for compliance purposes. We avoid this type of complexity in the commenced construction in 2008 or
therefore created special provisions heating oil context. Thus, under todays 2009 and are fired with natural gas,
requiring that RINs be retired if they regulations, RINs may be generated for biomass, or any combination thereof.
were assigned to renewable fuel that renewable fuel used as heating oil, as Facilities not subject to the 20%
was ultimately blended into nonroad defined in existing EPA regulations at threshold are grandfathered. See
fuel. The new EISA provisions regarding 80.2(ccc). In addition to simplifying Section II.B.3 below for a complete
additional renewable fuel make the implementation and administration of discussion of grandfathering. Also, EPA
RFS1 requirement for retiring RINs the Act, this interpretation will best can adjust the 20% threshold to as low
unnecessary if renewable fuel is realize the intent of EISA to reduce or as 10%, but the adjustment must be the
blended into heating oil or jet fuel. As replace the use of fossil fuels, minimum possible, and the resulting
a result, we have modified the threshold must be established at the
regulatory requirements to allow RINs f. Cellulosic Diesel
maximum achievable level based on
assigned to renewable fuel blended into In the proposed rule, we sought natural gas fired corn-based ethanol
heating oil or jet fuel in addition to comment on how diesel made from plants.
highway and nonroad transportation cellulosic feedstocks should be
considered. Specifically, a diesel fuel Advanced biofuel and biomass-based
fuels to continue to be valid for
product produced from cellulosic diesel: The 50% threshold can be
compliance purposes. From a regulatory
feedstocks that meets the 60% GHG adjusted to as low as 40%, but the
standpoint, there is no difference
between renewable fuels used for threshold could qualify as either adjustment must be the minimum
transportation purposes, versus heating cellulosic biofuel or biomass-based possible and result in the maximum
oil and jet fuels. diesel. Based on comments received, achievable threshold taking cost into
EISA uses the term home heating oil and as discussed previously in Section consideration. Also, such adjustments
in the definition of additional II.A, todays rule requires the cellulosic can be made only if it is determined that
renewable fuel. The statute does not diesel producer to categorize their the 50% threshold is not commercially
clarify whether the term should be product as cellulosic diesel with a D feasible for fuels made using a variety of
interpreted to refer only to heating oil code of 7. It can then be traded in the feedstocks, technologies, and processes.
actually used in homes, or to all fuel of marketplace and used for compliance Cellulosic biofuel: Similarly to
a type that can be used in homes. We with either the biomass-based diesel advanced biofuel and biomass-based
note that the term home heating oil is standard or the cellulosic biofuel diesel, the 60% threshold applicable to
typically used in industry in the latter standard. cellulosic biofuel can be adjusted to as
manner, to refer to a type of fuel, rather low as 50%, but the adjustment must be
2. Lifecycle GHG Thresholds
than a particular use of it, and the term the minimum possible and result in the
is typically used interchangeably in As part of the new definitions that
maximum achievable threshold taking
industry with heating oil, heating fuel, EISA creates for cellulosic biofuel,
cost into consideration. Also, such
home heating fuel, and other terms biomass-based diesel, advanced biofuel,
and renewable fuel, EISA also sets adjustments can be made only if it is
depending on the region and market. determined that the 60% threshold is
We believe this broad interpretation minimum performance measures or
thresholds for lifecycle GHG not commercially feasible for fuels made
based on typical industry usage best using a variety of feedstocks,
serves the goals and purposes of the emissions. These thresholds represent
the percent reduction in lifecycle GHGs technologies, and processes.
statute. If EPA interpreted the term to
apply only to heating oil actually used that is estimated to occur when a Our analyses of lifecycle GHG
in homes, we would necessarily require renewable fuel displaces gasoline or emissions, discussed in detail in Section
tracking of individual gallons from diesel fuel. Table II.B.21 lists the V, identified a range of fuel pathways
production through ultimate use in use thresholds established by EISA. that are capable of complying with the
in homes in order to determine GHG performance thresholds for each of

eligibility of the fuel for RINs. Given the TABLE II.B.21LIFECYCLE GHG these separate fuel standards. Thus, we
fungible nature of the oil delivery THRESHOLDS IN EISA have determined that the GHG
market, this would likely be sufficiently [Percent reduction from a 2005 gasoline or thresholds in Table II.B.21 should not
difficult and potentially expensive so as diesel baseline] be adjusted. Further discussion of this
to discourage the generation of RINs for determination can be found in Section
renewable fuels used as home heating Renewable fuel ................................. 20% V.C.
3. Renewable Fuel Exempt From 20 same time period as facilities that commencement. Specifically, the
Percent GHG Threshold commence construction prior to regulations require that the owner or
After considering comments received, December 19, 2007, provided that such operator did not discontinue
the Agency has decided to implement plants commence construction on or construction for a period of 18 months
the proposed option for interpreting the before December 31, 2009, complete or more and completed construction
grandfathering provisions that provide such construction in a reasonable within a reasonable time. (40 CFR
an indefinite exemption from the 20 amount of time, and continue to burn 52.21(i)(4)(ii)(c)). While reasonable
percent GHG threshold for renewable only natural gas, biomass, or a time may vary depending on the type
fuel facilities which have commenced combination thereof. Most commenters of project, we proposed that for RFS2 a
generally agreed with our proposal, reasonable time to complete
construction prior to December 19,
while other commenters argued that the construction of renewable fuel facilities
2007. For these facilities, only the
exemption was only meant to last for a be no greater than 3 years from initial
baseline volume of renewable fuel is
two-year period. As we noted in the commencement of construction. We
exempted. For ethanol facilities which
NPRM, we believe that it would be a sought comment on this time frame.
commenced construction after that date Commenters generally agreed with
harsh result for investors in these new
and which use natural gas, biofuels or our proposed definition of commenced
facilities, and would be generally
a combination thereof, we proposed that construction. Some commenters felt that
inconsistent with the energy
such facilities would be deemed the 3 year time frame was not a
independence goals of EISA, to interpret
compliant with the 20 percent GHG reasonable time to complete
the Act such that these facilities would
threshold. The exemption for such only be guaranteed two years of construction in light of the economic
facilities is conditioned on construction participation in the RFS2 program. In difficulties that businesses have been
being commenced on or before light of these considerations, we and will likely continue to be facing. We
December 31, 2009, and is specific only continue to believe that it is an recognize that there have been extreme
to facilities which produce ethanol only, appropriate interpretation of the Act to economic problems in the past year.
per language in EISA. The exemption allow the deemed compliant exemption Based on historical data which show
would continue indefinitely, provided to continue indefinitely with the construction of ethanol plants typically
the facility continues to use natural gas limitations we proposed. Therefore we take about one year, we believe that the
and/or biofuel. This section provides are making final this interpretation in 3-year time frame allows such
the background and summary of the todays rule. conditions to be taken into account and
original proposal, and the reasons for that it is an appropriate and fair amount
the selection of this option. b. Definition of Commenced of time to allow for completion.
Construction Therefore, we are not extending the
a. General Background of the Exemption
Requirement In defining commence and amount of time that constitutes
construction, we proposed to use the reasonable to five years as was
EISA amends section 211(o) of the definitions of commence and begin suggested.
Clean Air Act to provide that renewable actual construction from the Prevention
fuel produced from new facilities which of Significant Deterioration (PSD) c. Definition of Facility Boundary
commenced construction after regulations, which draws upon We proposed that the grandfathering
December 19, 2007 must achieve at least definitions in the Clean Air Act. (40 and deemed compliant exemptions
a 20% reduction in lifecycle greenhouse CFR 52.21(b)(9) and (11)). Specifically, apply to facilities. Our proposed
gas emissions compared to baseline under the PSD regulations, commence definition of this term is similar in some
lifecycle greenhouse gas emissions.7 means that the owner or operator has all respects to the definition of building,
Facilities that commenced construction necessary preconstruction approvals or structure, facility, or installation
before December 19, 2007 are permits and either has begun a contained in the PSD regulations in 40
grandfathered and thereby exempt continuous program of actual on-site CFR 52.21. We proposed to modify the
from the 20% GHG reduction construction to be completed in a definition, however, to focus on the
requirement. reasonable time, or entered into binding typical renewable fuel plant. We
For facilities that produce ethanol and agreements which cannot be cancelled proposed to describe the exempt
for which construction commenced after or modified without substantial loss. facilities as including all of the
December 19, 2007, section 210 of EISA Such activities include, but are not activities and equipment associated
states that for calendar years 2008 and limited to, installation of building with the manufacture of renewable fuel
2009, any ethanol plant that is fired supports and foundations, laying which are located on one property and
with natural gas, biomass, or any underground pipe work and under the control of the same person or
combination thereof is deemed to be in construction of permanent storage persons. Commenters agreed with our
compliance with the 20% threshold. structures. We proposed adding proposed definition of facility and we
Since all renewable fuel production language to the definition that is are making that definition final today.
facilities that commenced construction currently not in the PSD definition with
prior to the date of EISA enactment are respect to multi-phased projects. We d. Proposed Approaches and
covered by the more general proposed that for multi-phased projects, Consideration of Comments
grandfathering provision, this commencement of construction of one We proposed one basic approach to
exemption can only apply to those phase does not constitute the exemption provisions and sought
facilities that commenced construction commencement of construction of any comment on five additional options.
after enactment of EISA, and before the later phase, unless each phase is The basic approach would provide an
end of 2009. We proposed that the mutually dependent on the other on a indefinite extension of grandfathering
statute be interpreted to mean that fuel physical and chemical basis, rather than and deemed compliant status but with
from such qualifying facilities, economic. a limitation of the exemption from the
regardless of date of startup of The PSD regulations provide 20% GHG threshold to a baseline
operations, would be exempt from the additional conditions beyond volume of renewable fuel. The five
20% GHG threshold requirement for the addressing what constitutes additional options for which we sought
comment were: (1) Expiration of cannot be adequately captured in a table permits. With respect to the last reason,
exemption for grandfathered and of fuel and feedstock pathways as we facilities that have been operating below
deemed compliant status when proposed (see 74 FR 24927). the capacity allowed in their state
facilities undergo sufficient changes to Implementing such a provision would permits would be able to claim a
be considered reconstructed; (2) create questions of accounting and baseline volume based on the maximum
Expiration of exemption 15 years after tracking that would need to be capacity. As such, these facilities may
EISA enactment, industry-wide; (3) evaluated on a time-consuming case-by- indeed be able to increase their volume
Expiration of exemption 15 years after case basis. For example, if a switch to by 10 to 20 percent by virtue of how
EISA enactment with limitation of a different feedstock or production their baseline volume is defined. We
exemption to baseline volume; (4) process resulted in less efficiency, believe this is appropriate, however,
Significant production components facilities may argue that they are since their permits should reflect their
are treated as facilities and increasing energy efficiency elsewhere design, and the fuel resulting from their
grandfathered or deemed compliant (e.g. purchasing waste heat instead of original pre-EISA (or pre-2010, for
status ends when they are replaced; and burning fuel onsite to generate steam). deemed compliant facilities) design
(5) Indefinite exemption and no We would then need to assess such should be exempt from the 20% GHG
limitations placed on baseline volumes. changes to track the net energy change reduction requirement. Nevertheless, we
a plant undergoes. Given the added recognize and agree with commenters
i. Comments on the Proposed Basic
complexity and difficulty in carrying that some allowances should be made
Approach
out such an option, we have decided for minor changes brought about by
Generally, commenters supported the generally not to implement it. There is normal maintenance which are
basic approach in which the volume of an exception, however, for deemed consistent with the proper operation of
renewable fuel from grandfathered compliant facilities. These facilities a facility. EPA is not aware of a
facilities exempt from the 20% GHG achieve their status in part by being particular study or analysis that could
reduction threshold would be limited to fired only by natural gas or biomass, or be used as a basis for picking a tolerance
baseline volume. One commenter a combination thereof. Todays rule level reflecting this concept, We believe,
objected to the basic approach and provides, as proposed, that these however, that the value should be
argued that the statutes use of the word facilities will lose their exemption if relatively small, so as not to encourage
new and the phrase after December they switch to a fuel other than natural plant expansions that are unrelated to
19, 2007 provided evidence that gas, biomass, or a combination thereof, debottlenecking. We believe that a 5%
facilities which commenced tolerance level is consistent with these
since these were conditions that
construction prior to that date would considerations, and have incorporated
Congress deemed critical to granting
not ever be subject to the threshold that value in todays rule.
them the exemption from the 20% GHG
regardless of the volume produced from
reduction requirement. ii. Comments on the Expiration of
such facilities. In response, we note first
that the statute does not provide a We also solicited comment on Grandfathered Status
definition of the term new facilities for whether we should allow a 10% Commenters who supported an
which the 20% GHG threshold applies. tolerance on the baseline volume for expiration of the exemption did so
We believe that it would be reasonable which RINs can be generated without because of concerns that the proposed
to include within our interpretation of complying with the 20% GHG reduction approach of providing an indefinite
this term a volume limitation, such that threshold to allow for increases in exemption would not provide any
a production plant is considered a new volume due to debottlenecking. Some incentives to bring these plants into
facility to the extent that it produces favored this concept, while others compliance with current standards.
renewable fuel above baseline capacity. argued that the tolerance should be set They also objected to plants being
This approach also provides certainty in at 20 percent. After considering the allowed an indefinite period beyond the
the marketplace in terms of the volumes comments received, we have decided time period when it could be expected
of exempt fuel, and a relatively that a 10% (and 20%) level is not that they would have paid off their
straightforward implementation and appropriate for this regulation for the investors. The commenters argued that
enforcement mechanism as compared to following reasons: (1) We have decided the cost of operation for such plants
some of the other alternatives to interpret the exemption of the would be less than competing plants
considered. Furthermore, EPA believes baseline volume of renewable fuel from that do have to comply with current
that the Act should not be interpreted as the 20 percent requirement as extending standards; as such, commenters
allowing unlimited expansion of exempt indefinitely. Any tolerance provided opposed to the basic approach felt an
facilities for an indefinite time period, could, therefore, be present in the indefinite exemption would be a
with all volumes exempt, as suggested marketplace for a considerable time subsidy to plants that will never comply
by the commenter. Such an approach period; (2) increases in volume of 10% with the 20 percent threshold level. The
would likely lead to a substantial or greater could be the result of renewable fuels industry, on the other
increase in production of fuel that is not modifications other than hand, viewed the options that would set
subject to any GHG limitations, which debottlenecking. Consistent with the an expiration date (either via
EPA does not believe would be basic approach we are taking today cumulative reconstruction, or a 15-year
consistent with the objectives of the Act. towards interpreting the grandfathering period from date of enactment) as harsh,
We solicited comment on whether and deemed compliant provisions, we particularly if the lifecycle analysis
changes at a facility that resulted in an believe that the fuel produced as a result results make it costly for existing
increase in GHG emissions, such as a of such modifications comes from new facilities to meet the 20% threshold.
change in fuel or feedstock, should facilities within the meaning of the Some also argued that no such temporal
terminate the facilitys exemption from statute, and should be subject to the limitation appears in the statute.
the 20 percent GHG threshold. 20% GHG reduction requirement; (3) we We considered such comments, but in
Generally, commenters did not support are allowing baseline volume to be light of recent lifecycle analyses we
such a provision, pointing out that there based on the maximum capacity that is conducted in support of this rule we
are many variations within a plant that allowed under state and federal air have concluded that many of the current
technology corn ethanol plants may find output of renewable fuel allowed under compliant. Based on comments received
it difficult if not impossible to retrofit operating conditions specified in all and additional consideration to this
existing plants to comply with the 20 applicable preconstruction, construction matter, we decided that because the Act
percent GHG reduction threshold. In and operating permits issued by does not authorize EPA to allow fuels
addition, the renewable fuels industry regulatory authorities (including local, other than ethanol, the deemed
viewed the alternative proposals that regional, state or a foreign equivalent of compliant provisions will apply only to
would set an expiration date (either via a state, and federal permits). If the facilities producing that fuel.
cumulative reconstruction, or a 15-year capacity of a facility is not stipulated in Volume limitations contained in air
period from date of enactment) as harsh, such air permits, then the grandfathered permits may be defined in terms of peak
particularly if the lifecycle analysis volume is 105% of the maximum hourly production rates or a maximum
results make it costly for existing annual volume produced for any of the annual capacity. If they are defined only
facilities to meet the 20% threshold. last five calendar years prior to 2008. as maximum hourly production rates,
Given the difficulty of meeting such Volumes greater than this amount they will need to be converted to an
threshold, owners of such facilities which may typically be due to annual rate. Because assumption of a
could decide to shut down the plant. expansions of the facility which occur 24-hour per day production over 365
Given such implications of meeting the after December 19, 2007, will be subject days per year (8,760 production hours)
20 percent threshold level for existing to the 20% GHG reduction requirement may overstate the maximum annual
facilities we have chosen not to finalize if the facility wishes to generate RINs for capacity we are requiring a conversion
any expiration date. the incremental expanded volume. The rate of 95% of the total hours in a year
increased volume will be considered as (8,322 production hours) based on
e. Final Grandfathering Provisions typical operating uptime of ethanol
if produced from a new facility which
For the reasons discussed above, the commenced construction after facilities.
Agency has decided to proceed with the December 19, 2007. Changes that might The facility registration process (see
proposed baseline volume approach, occur to the mix of renewable fuels Section II.C) will be used to define the
rather than the expiration options. We produced within the facility are baseline volume for individual facilities.
hold open the possibility, therefore, of irrelevantthey remain grandfathered Owners and operators must submit
revisiting and reproposing the as long as the overall volume falls information substantiating the permitted
exemption provision in a future within the baseline volume. Thus, for capacity of the plant, or the maximum
rulemaking to take such advances into example, if an ethanol facility changed annual peak capacity if the maximum
account. Ending the grandfathering capacity is not stipulated in a federal,
its operation to produce butanol, but the
exemption after its usefulness is over state or local air permit, or EPA Title V
baseline volume remained the same, the
would help to streamline the ongoing operating permit. Copies of applicable
fuel so produced would be exempt from
implementation of the program. air permits which stipulate the
the 20% GHG reduction requirement.
The final approach adopted today is maximum annual capacity of the plant,
summarized as follows: The baseline volume will be defined must be provided as part of the
as above for deemed compliant facilities registration process. Subsequent
i. Increases in volume of renewable fuel (those ethanol facilities fired by natural
produced at grandfathered facilities due expansions at a grandfathered facility
gas or biomass or a combination thereof that results in an increase in volume
to expansion that commenced construction after above the baseline volume will subject
For facilities that commenced December 19, 2007 but before January 1, the increase in volume to the 20% GHG
construction prior to December 19, 2010) with the exception that if the emission reduction threshold (but not
2007, we are defining the baseline maximum capacity is not stipulated in the original baseline volume). Thus, any
volume of renewable fuel exempt from air permits, then the exempt volume is new expansions will need to be
the 20% GHG threshold requirement to the maximum annual peak production designed to achieve the 20% GHG
be the maximum volumetric capacity of during the plants first three years of reduction threshold if the facility wants
the facility that is allowed in any operation. In addition, any production to generate RINs for that volume. Such
applicable state air permit or Federal volume increase that is attributable to determinations will be made on the
Title V operating permit.4 We had construction which commenced prior to basis of EPA-defined fuel pathway
proposed in the NPRM that nameplate December 31, 2009 would be exempt categories that are deemed to represent
capacity be defined as permitted from the 20% GHG threshold, provided such 20% reduction.
capacity, but that if the capacity was not that the facility continued to use natural EPA enforcement personnel
stipulated in any federal, state or local gas, biomass or a combination thereof commented that claims for an
air permit, then the actual peak output for process energy. Because deemed exemption from the 20% GHG reduction
should be used. We have decided that compliant facilities owe their status to requirement should be made promptly,
since permitted capacity is the limiting the fact that they use natural gas, so that they can be verified with recent
condition, by virtue of it being an biomass or a combination thereof for supporting information. They were
enforceable limit contained in air process heat, their status will be lost, concerned, in particular, that claims for
permits, that the term nameplate and they will be subject to the 20% exempt status could be made many
capacity is not needed. In addition, we GHG threshold requirement, at any time years into the future for facilities that
are allowing a 5% tolerance as that they change to a process energy may or may not have concluded
discussed earlier. Therefore, todays rule source other than natural gas and/or construction within the required time
defines permitted capacity as 105% of biomass. Finally, because EISA limits period, but delayed actual production of
the maximum permissible volume deemed compliant facilities to ethanol renewable fuel due to market conditions
facilities, if there are any changes in the or other reasons. EPA believes that this
4 Volumes also include expansions to existing mix of renewable fuels produced by the comment has merit, and has included a
facilities, provided that the construction for such facility, only the ethanol volume requirement in Section 80.1450(f) of the
expansion commences prior to December 19, 2007.
In such instances, the total volume from the original
remains grandfathered. We had solicited final rule for registration of facilities
facility plus the additional volume due to comment on whether fuels other than claiming an exemption from the 20%
expansion is grandfathered. ethanol could also be deemed GHG reduction requirement by May 1,
2013. This provision does not require Since the definition of commencement seed or nursery stock, or through
actual fuel production, but simply the of construction includes having all intentional natural seeding by mature
filing of registration materials that assert necessary air permits, we will require plants left undisturbed for that purpose.
a claim for exempt status. It will benefit that facilities outside the United States We received numerous comments on
both fuel producers, who will likely be certify that such facilities have obtained our proposed definition of planted
able to more readily collect the required all necessary permits for construction crops, largely in support of our
information if it is done promptly, and and operation required by the proposed definition. However, some
EPA enforcement personnel seeking to appropriate national and local commenters noted that microcrops,
verify the information. However, given environmental agencies. such as duckweed, a flowering plant
the potentially significant implications typically grown in ponds or tanks, are
4. New Renewable Biomass Definition
of this requirement for facilities that also being investigated for used as
and Land Restrictions
may qualify for the exemption but miss renewable fuel feedstocks. These
the registration deadline, the rule also As explained in Section I, EISA lists microcrops are typically grown in a
provides that EPA may waive the seven types of feedstock that qualify as similar manner to algae, but cannot be
requirement if it determines that the renewable biomass. EISA limits not categorized as algae since they are
submission is verifiable to the same only the types of feedstocks that can be relatively more complex organisms.
extent as a timely-submitted used to make renewable fuel, but also EPAs proposed definition would have
registration. the land that these renewable fuel unintentionally excluded microcrops
feedstocks may come from. Specifically, such as duckweed through the
ii. Replacements of Equipment EISAs definition of renewable biomass requirement that planted crops be
If production equipment such as incorporates land restrictions for applied to the ground. After
boilers, conveyors, hoppers, storage planted crops and crop residue, planted considering comments received, EPA
tanks and other equipment are replaced, trees and tree residue, slash and pre- does not believe that there is any basis
it would not be considered construction commercial thinnings, and biomass under EISA for excluding from the
of a new facility under this option of from wildfire areas. EISA prohibits the definition of renewable biomass crops
todays final rulethe baseline volume generation of RINs for renewable fuel such as duckweed that are applied to a
of fuel would continue to be exempt made from feedstock that does not meet tank or pond for growth rather than to
from the 20% GHG threshold. We the definition of renewable biomass, the soil. As with other planted crops,
sought comment on an approach that which includes not meeting the these ponds or tanks must be located on
would require that if coal-fired units are associated land restrictions. The existing agricultural land, as described
replaced, that the replacement units following sections describe EPAs below, to qualify as renewable biomass
must be fired with natural gas or biofuel interpretation of several key terms under EISA. Therefore, including such
for the product to be eligible for RINs related to the definition of renewable microcrops within the definition of
that do not satisfy the 20% GHG biomass, and the approach in todays renewable biomass will not result in the
threshold. Some commenters supported rule to implementing the renewable direct loss of forestland or other
such an approach. We agreed, however, biomass requirements. ecologically sensitive land that Congress
with other commenters who point out
a. Definitions of Terms sought to protect through the land
that the language in EISA provides for
EISAs renewable biomass definition restrictions in the definition of
an indefinite exemption for
includes a number of terms that require renewable biomass. Doing so will
grandfathered facilities. While we
interpret the statute to limit the definition. The following sections further the objectives of the statute of
exemption to the baseline volume of a discuss EPAs definitions for these promoting the development of emerging
grandfathered facility, we do not terms, which were developed with ease technologies to produce clean
interpret the language to allow EPA to of implementation and enforcement in alternatives to petroleum-based fuels,
require that replacements of coal fired mind. We have made every attempt to and to further U.S. energy
units be natural gas or biofuel. Thus define these terms as consistently with independence.
replacements of coal fired equipment other federal statutory and regulatory For these reasons, we are finalizing
will not affect the facilitys definitions as well as industry standards our proposed definition of planted
grandfathered status. as possible, while keeping them crops, with the inclusion of provisions
workable for purposes of program allowing for the growth of microcrops
iii. Registration, Recordkeeping and in ponds or tanks that are located on
implementation.
Reporting agricultural land. Our final definition
Facility owner/operators will be i. Planted Crops and Crop Residue also includes a reference to vegetative
required to provide evidence and The first type of renewable biomass propagation, in which a new plant is
certification of commencement of described in EISA is planted crops and produced from an existing vegetative
construction. Such certification will crop residue harvested from agricultural structure, as one means by which
require copies of all applicable air land cleared or cultivated at any time planted crops may reproduce, since this
permits that apply to the construction prior to December 19, 2007, that is is an important method of reproduction
and operation of the facility. Owner/ either actively managed or fallow, and for microcrops such as duckweed. The
operators must provide annual records nonforested. We proposed to interpret final definition of planted crops
of process fuels used on a BTU basis, the term planted crops to include all includes all annual or perennial
feedstocks used and product volumes. annual or perennial agricultural crops agricultural crops from existing
For facilities that are located outside the that may be used as feedstock for agricultural land that may be used as
United States (including outside the renewable fuel, such as grains, oilseeds, feedstock for renewable fuel, such as
Commonwealth of Puerto Rico, the U.S. and sugarcane, as well as energy crops, grains, oilseeds, and sugarcane, as well
Virgin Islands, Guam, American Samoa, such as switchgrass, prairie grass, and as energy crops, such as switchgrass,
and the Commonwealth of the Northern other species, providing that they were prairie grass, duckweed and other
Mariana Islands) owners will be intentionally applied to the ground by species (but not including algae species
required to provide certification as well. humans either by direct application as or planted trees), providing that they
were intentionally applied by humans land used for the production of crops for under this provision, EPA must decide
to the ground, a growth medium, or a harvest, including cultivated cropland if rangeland qualifies as actively
pond or tank, either by direct for row crops or close-grown crops and managed or fallow. EPA believes that
application as seed or plant, or through non-cultivated cropland for the term actively managed is best
intentional natural seeding or vegetative horticultural crops. We proposed to interpreted by reference to the type of
propagation by mature plants define pastureland as land managed material and practices that this
introduced or left undisturbed for that primarily for the production of provision addressesnamely crops and
purpose. We note that because EISA indigenous or introduced forage plants residue associated with growing crops.
contains specific provisions for planted for livestock grazing or hay production, We think it is appropriate to inquire
trees and tree residue from tree and to prevent succession to other plant whether the type of management
plantations, our final definition of types. We also proposed that CRP land, involved in a land type is consistent
planted crops in EISA excludes planted which is administered by USDAs Farm with that which would occur on land
trees, even if they may be considered Service Agency, qualify as agricultural where crops are harvested. Thus, while
planted crops under some land under RFS2. we acknowledge that some types of
circumstances. EPA received numerous comments on rangeland are managed to a certain
We proposed that crop residue be our proposed definition of existing degree, the level of active management
limited to the residue, such as corn agricultural land. Generally, that is typically associated with land
stover and sugarcane bagasse, left over commenters were in support of our dedicated to growing agricultural crops
from the harvesting of planted crops. definition of cropland and its is far more intensive than the types of
We sought comment on including inclusion in the definition of existing management associated with rangeland.
biomass from agricultural land removed agricultural land. Additionally, For example, rangeland is rarely tilled,
for purposes of invasive species control commenters generally did not object to fertilized or irrigated as croplands and,
or fire management. We received many CRP lands or pastureland being to a lesser degree, pasturelands, are.
comments supporting the inclusion of included in the definition of agricultural Furthermore, since rangeland
biomass removed from agricultural land land. Based on our consideration of encompasses a wide variety of
for purposes of invasive species control comments received on the proposed ecosystems, including native grasslands
and/or fire management. We believe that rule, EPA is including cropland, or shrublands, savannas, wetlands,
such biomass is typically removed from pastureland and CRP land in the deserts and tundra, including it in the
agricultural land for the purpose of definition of existing agricultural land, definition of agricultural land would
preserving or enhancing its value in as proposed. increase the risk that these sensitive
agricultural crop production. It may be We sought comment in the proposal ecosystems would become available
removed at the time crops are harvested, on whether rangeland should be under EISA for conversion into
post harvest, periodically (e.g., for included as agricultural land under
intensively managed mono-culture
pastureland) or during extended fallow RFS2. Rangeland is land on which the
cropland. Finally, the conversion of
periods. We agree with the commenters indigenous or introduced vegetation is
relatively undisturbed rangeland to the
that this material is a form of biomass predominantly grasses, grass-like plants,
production of annual crops could in
residue related to crop production, forbs or shrubs and whichunlike
some cases lead to large releases of
whether or not derived from a crop cropland or pasturelandis
GHGs stored in the soil, as well as a loss
itself, and, therefore, are modifying the predominantly managed as a natural
of biodiversity, both of which would be
proposed definition of crop residue to ecosystem. EPA received a number of
contrary to EISAs stated goals. For
include it. We also received comments comments concerning whether
these reasons, EPA is not including
encouraging us to expand the definition rangeland should be included in the
definition of existing agricultural land rangeland in the definition of existing
of crop residue to include materials left
under RFS2. Some commenters urged agricultural land in todays final rule.
over after the processing of the crop into
a useable resource, such as husks, seeds, EPA to expand the definition of existing We proposed to include in our
bagasse and roots. EPA agrees with agricultural land to include rangeland, definition of existing agricultural land
these comments and has altered the arguing that rangelands could serve as the requirement that the land was
final definition to cover such materials. important sources of renewable fuel cleared or cultivated prior to December
Based on comments received, our final feedstocks. Many of these commenters 19, 2007, and that, since December 19,
definition of crop residue is the argued that, although it is generally less 2007, it has been continuously actively
biomass left over from the harvesting or intensively managed than cropland, managed (as agricultural land) or fallow,
processing of planted crops from rangeland is nonetheless actively and nonforested. We proposed to
existing agricultural land and any managed through control of brush or interpret the phrase that is actively
biomass removed from existing weed species, among other practices. In managed or fallow, and nonforested as
agricultural land that facilitates crop contrast, other commenters argued meaning that land must have been
management (including biomass against the inclusion of rangeland, actively managed or fallow, and
removed from such lands in relation to contending that the potential conversion nonforested, on December 19, 2007, and
invasive species control or fire of rangeland into cropland for growing continuously thereafter in order to
management), whether or not the renewable biomass would lead to losses qualify for renewable biomass
biomass includes any portion of a crop of carbon, soil, water quality, and production. We received extensive
or crop plant. biodiversity. comments on this interpretation. Many
Our proposed regulations restricted Under EISA, renewable biomass commenters suggested an interpretation
planted crops and crop residue to that includes crops and crop residue from of the requirement that agricultural land
harvested from existing agricultural agricultural land cleared or cultivated at be actively managed to mean that the
land, which, under our proposed any time prior to the enactment of EISA land had to be actively managed at the
definition, includes three land that is either actively managed of time EISA was passed on December 17,
categoriescropland, pastureland, and fallow and nonforested. In determining 2007, such that the amount of land
Conservation Reserve Program (CRP) whether rangeland should be available for biofuel feedstock
land. We proposed to define cropland as considered existing agricultural land production was established at that point
and would not diminish over time. including a definitive checklist of well-accepted as a subset of forestland.
Other commenters supported our required evidential records would be Others advocated that EPA should make
proposed interpretation, which would helpful to have explicitly identified in every effort to distinguish between tree
mean that the amount of land available the regulations, we are not doing so in plantations and forestland so as not to
for biofuel feedstock production could order to maintain flexibility, as run the risk of allowing native forests to
diminish over time if parcels of land feedstock producers may vary in the be converted into less diverse tree
cease to be actively managed at any types of evidence they can readily plantations from which trees could be
point, thus taking them out of obtain to show that their agricultural harvested for renewable fuel
contention for biofuel feedstock land was actively managed. We are production. For todays final rule, EPA
cultivation. Some commenters argued adding, however, a clarification that the is including tree plantations as a subset
that this interpretation is contrary to records must be traceable to the land in of forestland since it is commonly
Congress intent and the basic premise question. For example, it will not be understood as such throughout the
of the RFS program since, over time, it sufficient to have a receipt for seed forestry industry. Under EISA,
could lead to a reduction in the amount purchase if there is not additional renewable biomass may include slash
of renewable biomass available for use evidence indicating that the seed was and pre-commercial thinnings from
as renewable fuel feedstocks, while the applied to the land which is claimed as non-federal forestlands, and planted
statutorily required volumes of existing agricultural land. trees and tree residue from actively
renewable fuel increase over time. The term fallow is generally used to managed tree plantations on non-federal
These commenters further argue that the describe cultivated land taken out of land. One effect under EISA of the
active management provision should be production for a finite period of time. modification from the proposed rule to
interpreted as a snapshot of We proposed and sought comment on include tree plantations as a subset of
agricultural land existing and actively defining fallow to mean agricultural forestland is to allow pre-commercial
managed on December 19, 2007. Under land that is intentionally left idle to thinnings and slash, in addition to
this interpretation, the land that was regenerate for future agricultural planted trees and tree residue, harvested
cleared or cultivated prior to December purposes, with no seeding or planting, from tree plantations to serve as
19, 2007 and was actively managed on harvesting, mowing, or treatment during qualifying feedstocks for renewable fuel
that date, would be eligible for the fallow period. We also proposed and production. EPA believes it is
renewable biomass production sought comment on requiring appropriate to include pre-commercial
indefinitely. documentation of such intent. We thinnings and slash from actively
We agree that the goal of the EISA and received many comments that managed tree plantations as renewable
RFS program, to increase the presence supported our proposed definition of biomass, consistent with the EISA
of renewable fuels in transportation fallow. We also received comments provision allowing harvested trees and
fuel, will be better served by indicating that EPA should set a time tree residue from tree plantations to
interpreting the actively managed or limit for land to qualify as fallow (as qualify as renewable biomass. Another
fallow requirement in the renewable opposed to abandoned for agricultural effect of including the tree plantations
biomass definition as applying to land purposes). We have decided not to as a kind of forestland is that, since
actively managed or fallow on December include a time limit for land to qualify crops and crop residue must come from
19, 2007, rather than interpreting this as fallow because we understand that land that was non-forested as of the
requirement as applying beginning on agricultural land may be left fallow for date of EISA enactment, a tract of land
December 19, 2007 and continuously many different purposes and for varying
managed as a tree plantation on the date
thereafter. In addition, by simplifying amounts of time. Any particular
of EISA enactment could not be
the requirement in this fashion, there timeframe that EPA might choose for
converted to cropland for the
will be significantly less burden on this purpose would be somewhat
production of feedstock for RIN-
regulated parties in ensuring that their arbitrary. Further, EISA does not
generating renewable fuel. EPA believes
feedstocks come from qualifying lands. indicate a time limit on the period of
that this result in keeping with
For these reasons, we are modifying the time that qualifying land could be
Congressional desire to avoid the
definition of existing agricultural land fallow, so EPA does not believe that it
conversion of new lands to crop
so that the active management would be appropriate to do so in its
production for renewable fuel
requirement is satisfied for those that regulations. Therefore, EPA is finalizing
were cleared or cultivated and actively its proposed definition of fallow. production.
managed or fallow, and non-forested on Finally, in order to define the term Additionally, EPA received comments
December 19, 2007. nonforested as used in the definition indicating that, in order to be consistent
Further, we proposed and are of existing agricultural land, we with existing statutory and/or regulatory
finalizing that actively managed proposed first to define the term definitions of forestland, EPA should
means managed for a predetermined forestland as generally undeveloped exclude tree covered areas in intensive
outcome as evidenced by any of the land covering a minimum area of one agricultural crop production settings,
following: Sales records for planted acre upon which the predominant such as fruit orchards, or tree-covered
crops, crop residue, or livestock; vegetative cover is trees, including land areas in urban settings such as city
purchasing records for land treatments that formerly had such tree cover and parks from the definition of forestland.
such as fertilizer, weed control, or that will be regenerated. We also EPA agrees that these types of land
reseeding; a written management plan proposed that forestland would not cannot be characterized as forestland,
for agricultural purposes; include tree plantations. Nonforested and is thus excluding them from the
documentation of participation in an land under our proposal would be land definition. EPAs final definition of
agricultural program sponsored by a that is not forestland. forestland is generally undeveloped
Federal, state or local government We received many comments on our land covering a minimum of 1 acre
agency; or documentation of land proposed definition of forestland. Some upon which the primary vegetative
management in accordance with an commenters urged EPA to broaden the species is trees, including land that
agricultural certification program. While definition of forestland to include tree formerly had such tree cover and that
we received comments indicating that plantations, arguing that plantations are will be regenerated and tree plantations.
Tree covered areas in intensive mature trees left undisturbed for such a We proposed to apply similar
agricultural crop production settings, purpose, will qualify as renewable management restrictions to tree
such as fruit orchards, or tree-covered biomass. plantations as would apply to existing
areas in urban settings such as city We also received a number of agricultural land and also to interpret
parks, are not considered forestland. comments suggesting that EPA broaden the EISA language as requiring that to
the definition of planted trees to include qualify as renewable biomass for
ii. Planted Trees and Tree Residue other methods of tree regeneration, such renewable fuel production under RFS2,
The definition of renewable biomass as coppice (the production of new stems a tree plantation must have been cleared
in EISA includes planted trees and tree from stumps or roots), that are at any time prior to December 19, 2007,
residue from actively managed tree frequently used in the forestry industry and continuously actively managed
plantations on non-federal land cleared to regenerate tree plantations. EPA since December 19, 2007. Consistent
at any time prior to December 19, 2007, believes that planted implies direct with our final position regarding
including land belonging to an Indian human intervention, and that allowing actively managed existing agricultural
tribe or an Indian individual, that is stump-growth from the stump or roots land, we are defining the term actively
held in trust by the United States or of a tree that was hand- or machine- managed in the context of tree
subject to a restriction against alienation planted is consistent with this concept. plantations as managed for a
imposed by the United States. Therefore, todays final rule broadens predetermined outcome as evidenced by
We proposed to define the term the concept of planted trees from a any of the following that must be
planted trees to include not only trees tree plantation to include a tree traceable to the land in question: Sales
that were established by human established by hand- or machine- records for planted trees or slash;
intervention such as planting saplings planting of a seed or sapling, or by purchasing records for seeds, seedlings,
and artificial seeding, but also trees coppice growth from the stump or root or other nursery stock together with
established from natural seeding by of a tree that was hand- or machine- other written documentation connecting
mature trees left undisturbed for such a planted. This new language will appear the land in question to these purchases;
purpose. Some commenters disagreed in the definition of tree plantation. a written management plan for
with our inclusion of naturally seeded In the NPRM, we proposed to define silvicultural purposes; documentation
trees in our definition of planted trees. a tree plantation as a stand of no fewer of participation in a silvicultural
They argue that an area which is than 100 planted trees of similar age and program sponsored by a Federal, state or
managed for natural regeneration of comprising one or two tree species, or local government agency;
trees is more akin to a natural forest an area managed for growth of such documentation of land management in
than a tree plantation, and that the trees covering a minimum of one acre. accordance with an agricultural or
difference between the two types of land We received numerous comments on
should be clear in order to distinguish silvicultural product certification
our definition of tree plantation. Several
between the two and to avoid the program; an agreement for land
commenters urged EPA to define tree
effective conversion of natural forests to management consultation with a
plantation more broadly by using the
tree plantations under EISA. EPA agrees professional forester that identifies the
definition from the Dictionary of
that the inclusion of natural reseeding land in question; or evidence of the
Forestrya stand composed primarily
in the definition of planted trees existence and ongoing maintenance of a
of trees established by planting or
would make distinguishing between tree road system or other physical
artificial seeding, However, this
plantations and forests difficult or infrastructure designed and maintained
definition does not provide sufficiently
impossible, thus negating the separate for logging use, together with one of the
clear guidelines for determining
restrictions that Congress placed on the above-mentioned documents.
whether a given parcel of land would be
two types of land. On the other hand, considered a tree plantation rather than Silvicultural programs such as those of
EPA believes that trees that are naturally a natural forest. Since trees are the Forest Stewardship Council, the
seeded and grown together with hand- considered renewable biomass under Sustainable Forestry Initiative, the
or machine-planted trees in a tree RFS2 only if they are harvested from American Tree Farm System, or USDA
plantation should not categorically be tree plantations, we believe that our are examples of the types of programs
excluded from qualifying as renewable proposed definition was clearer and that could indicate actively managed
biomass. Such natural reseeding may more easily applied in the field. tree plantations. As with the definition
occur after planting the majority of trees Accordingly, EPA has not adopted the of actively managed as it applies to
in a tree plantation, and may be definition of this term from the crops from existing agricultural lands,
consistent with the management plan Dictionary of Forestry. Other we received extensive comments on this
for a tree plantation. EPA has decided, commenters argued that there is no interpretation. As with our final
therefore, to modify its proposed technical justification for limiting the position for crops from existing
definition of planted tree to be trees number of species or number of trees in agricultural lands, we are interpreting
harvested from a tree plantation. The a plantation, and that many tree the active management requirement
term tree plantation is defined as a plantations include a variety of species. for tree plantations to apply on the date
stand of no less than 1 acre composed EPA believes that there is merit in these of EISAs enactment, December 19,
primarily of trees established by hand- comments. Accordingly, EPA is 2007. Those tree plantations that were
or machine-planting of a seed or finalizing a broadened definition of tree cleared or cultivated and actively
sapling, or by coppice growth from the plantation, by removing the limitations managed on December 19, 2007 are
stump or root of a tree that was hand- on the number and species of trees. EPA eligible for the production of planted
or machine-planted. The net effect is is defining tree plantation as a stand of trees, tree residue, slash and pre-
that as long as a tree plantation consists no less than 1 acre composed primarily commercial thinnings for renewable fuel
primarily of trees that were hand- or of trees established by hand- or production.
machine planted (or derived therefrom, machine-planting of a seed or sapling, In lieu of the term tree residue, we
as described below), then all trees from or by coppice growth from the stump or proposed to use the term slash in our
the tree plantation, including those root of a tree that was hand- or machine- regulations as a more descriptive, but
established from natural seeding by planted. otherwise synonymous, term. According
to the Dictionary of Forestry (1998, p. United States. However, EISA excludes removed to promote and improve tree
168), a source of commonly understood slash and pre-commercial thinnings growth. EPA is attempting to utilize
industry definitions, slash is the from forests or forestlands that are standard industry definitions to the
residue, e.g., treetops and branches, left ecological communities with a global or extent practicable, and believes that the
on the ground after logging or State ranking of critically imperiled, proposed definition of pre-commercial
accumulating as a result of a storm, fire, imperiled, or rare pursuant to a State thinnings, based largely on the
girdling, or delimbing. We also Natural Heritage Program, old growth Dictionary of Forestry definition with
proposed to clarify that slash can forest, or late successional forest. the addition of other vegetative material
include tree bark and can be the result As described in Sec. II.B.4.a.i of this removed to promote tree growth, is
of any natural disaster, including preamble, our definition of forestland appropriate. Therefore, we are finalizing
flooding. We received comments in is generally undeveloped land covering the proposed definition of pre-
support of this additional inclusion and a minimum of 1 acre upon which the commercial thinnings, with the
are expanding the definition of slash primary vegetative species is trees, addition of the phrase or other
to include tree bark and residue including land that formerly had such vegetative material that is removed to
resulting from natural disaster, tree cover and that will be regenerated promote tree growth.
including flooding. We received general and tree plantations. Tree-covered areas We proposed that the State Natural
support for our proposal to substitute in intensive agricultural crop Heritage Programs referred to in EISA
our definition of slash for tree production settings, such as fruit are those comprising a network
residue, however, several commenters orchards or tree-covered areas in urban associated with NatureServe, a non-
argued that our definition of slash is too setting such as city parks, are not profit conservation and research
narrow to be substituted for tree considered forestland. Also as noted in organization. Individual Natural
residue, which should include woody Sec. III.B.4.a.ii of this preamble, we are Heritage Programs collect, analyze, and
residues from saw mills and paper mills adopting the definition of slash listed in distribute scientific information about
that process planted trees from tree the Dictionary of Forestry, with the the biological diversity found within
plantations. EPA agrees that the term addition of tree bark and residue their jurisdictions. As part of their
residue should include this material. resulting from natural disaster, activities, these programs survey and
Therefore, EPA is expanding the including flooding. apply NatureServes rankings, such as
definition of tree residue to include As for pre-commercial thinnings, critically imperiled (S1), imperiled (S2),
residues from processing planted trees the Dictionary of Forestry defines the and rare (S3) to species and ecological
at lumber and paper mills, but is act of such thinning as the removal of communities within their respective
limiting it to the biogenically derived trees not for immediate financial return borders. NatureServe meanwhile uses
portion of the residues that can be but to reduce stocking to concentrate data gathered by these Natural Heritage
traced back to feedstocks meeting the growth on the more desirable trees. Programs to apply its global rankings,
definition of renewable biomass (i.e. Because what may now be considered such as critically imperiled (G1),
planted trees and tree residue from pre-commercial may eventually be imperiled (G2), or vulnerable (the
actively managed tree plantations on saleable as renewable fuel feedstock, we equivalent of the term rare, or G3), to
non-federal land cleared at any time proposed not to include any reference to species and ecological communities
prior to December 19, 2007). RINs may financial return in our definition, but found in multiple States or territories.
only be generated for the fraction of fuel rather to define pre-commercial We proposed and sought comment on
produced that represents the biogenic thinnings as those trees removed from a prohibiting slash and pre-commercial
portion of the tree residue, using the stand of trees in order to reduce thinnings from all forest ecological
procedures described in ASTM test stocking to concentrate growth on more communities with global or State
method D6866. Thus, if the tree desirable trees. Additionally, we rankings of critically imperiled,
residues are mixed with chemicals or proposed to include diseased trees in imperiled, or vulnerable (rare in the
other materials during processing at the the definition of pre-commercial case of State rankings) from being used
lumber or paper mills, producers may thinnings due to the fact that they can for renewable fuel for which RINs may
only generate RINs for the portion of the threaten the integrity of an otherwise be generated under RFS2.
mixture that is actually derived from healthy stand of trees, and their removal We proposed to use data compiled by
planted trees. EPAs final definition of can be viewed as reducing stocking to NatureServe and published in special
tree residue is slash and any woody promote the growth of more desirable reports to identify ecologically
residue generated during the processing trees. We sought comment on whether sensitive forestland. The reports listed
of planted trees from actively managed our definition of pre-commercial all forest ecological communities in the
tree plantations for use in lumber, thinnings should include a maximum U.S. with a global ranking of G1, G2, or
paper, furniture or other applications, diameter and, if so, what the G3, or with a State ranking of S1, S2, or
providing that such woody residue is appropriate maximum diameter should S3, and included descriptions of the key
not mixed with similar residue from be. We received comments on our geographic and biologic attributes of the
trees that do not originate in actively proposed definition of pre-commercial referenced ecological community. We
managed tree plantations. thinnings that were generally supportive proposed that the document be
of our proposed definition. Many incorporated by reference into the
iii. Slash and Pre-Commercial commenters argued that EPA should not definition of renewable biomass in the
Thinnings use a maximum tree diameter as a basis final RFS2 regulations (and updated as
The EISA definition of renewable for defining pre-commercial thinning as appropriate through notice and
biomass includes slash and pre- tree diameter varies greatly by forest comment rulemaking). The document
commercial thinnings from non-federal type and location, making any diameter would identify specific ecological
forestlands, including forestlands limitation EPA might set arbitrary. EPA communities from which slash and pre-
belonging to an Indian tribe or an Indian agrees with this assessment. commercial thinnings could not be used
individual, that are held in trust by the Commenters also argued that pre- as feedstock for the production of
United States or subject to a restriction commercial thinnings may include renewable fuel that would qualify for
against alienation imposed by the other non-tree vegetative material that is RINs under RFS2. Draft versions of the
document containing the global and people, or of public infrastructure, at recommended that EPA include both
State rankings were placed in the docket risk from wildfire. We proposed to lands covered by a CWPP as well as
for the proposed rule. clarify in the regulations that biomass lands meeting the Healthy Forests
EPA received several comments on is organic matter that is available on a Restoration Act definition of WUI in
our proposed interpretation of EISAs renewable or recurring basis, and that it order to maximize the amount of land
State Natural Heritage Program must be obtained from within 200 feet available for biomass feedstock and to
requirement and the reports listing G1 of buildings, campgrounds, and other encourage the removal of hazardous fuel
G3 and S1S3 ecological communities. areas regularly occupied by people, or of for wildfires. EPA understands that very
Several commenters argued that while public infrastructure, such as utility few communities that might be eligible
EISA authorizes EPA to exclude slash corridors, bridges, and roadways, in for a CWPP actually have one in place,
and pre-commercial thinnings from S1 areas at risk of wildfire. due to the numerous administrative
3 and G1 and G2 communities, it does Furthermore, we proposed to define
steps that must be taken in order to have
not authorize the exclusion of biomass areas at risk of wildfire as areas
from G3 communities, which are located withinor within one mile of a CWPP approved, so the option of
designated as vulnerable, not forestland, tree plantations, or any other defining areas at risk of wildfire
critically imperiled, imperiled or rare, generally undeveloped tract of land that exclusively by reference to a list of
as EISA requires. The commenters is at least one acre in size with communities with an approved CWPP
further argue that there is little or no substantial vegetative cover. We sought would be underinclusive of all lands
environmental benefit to adding G3 comment on two possible that a professional forester would
communities to the list of lands implementation alternatives for consider to be at risk of wildfire.
unavailable for renewable fuel feedstock identifying areas at risk of wildfire. The Furthermore, EPA believes that the
production, and that their inclusion first proposed alternative would statutory definition of WUI from the
limits the availability of forest-derived incorporate into our definition of areas Healthy Forests Restoration Act (Pub. L.
biomass. EPA agrees with these at risk of wildfire any communities 108148) is too vague using directly in
comments, and has drafted todays final identified as communities at risk and implementing the RFS2 program. If EPA
rule so as not to specifically exclude covered by a community wildfire used this WUI definition, individual
from the definition of renewable protection plan (CWPP). Communities plots of land would have to be assessed
biomass slash and pre-commercial at risk are defined through a process by a professional forester on a case-by-
thinnings from G3-ranked vulnerable within the document, Field Guidance case basis in order to determine if they
ecological communities to qualify as Identifying and Prioritizing meet the WUI definition, creating an
renewable biomass for purposes of Communities at Risk (National expensive burden for landowners
RFS2. We are interpreting EISAs Association of State Foresters, June seeking to sell biomass from their lands
language to exclude from the definition 2003). CWPPs are developed in as renewable fuel feedstocks.
of renewable biomass any biomass taken accordance with Preparing a
In light of the comments received and
from ecological communities in the U.S. Community Wildfire Protection PlanA
the need for a simple way for
with Natural Heritage Programs global Handbook for Wildland-Urban Interface
ranking of G1 or G2, or with a State Communities (Society of American landowners and renewable fuel
ranking of S1, S2, or S3. We are Foresters, March 2004) and certified by producers to track the status of
including in todays rulemaking docket a State Forester or equivalent. We particular plots of land, for the final rule
(EPAHQOAR20050161) the list of sought comment on incorporating by we are identifying areas at risk of
ecological communities fitting this reference into the final RFS2 regulations wildfire as those areas identified as
description. a list of communities at risk with an wildland urban interface. Those areas
To complete the definition of approved CWPP. We also sought are depicted and mapped at http://
ecologically sensitive forestland, we comment on a second implementation silvis.forest.wisc.edu/Library/
proposed to include old growth and late approach, which would incorporate into WUILibrary.asp. The electronic WUI
successional forestland which is our definition of areas at risk of map is a readily accessible reference
characterized by trees at least 200 years wildfire any areas identified as tool that was prepared by experts in the
old. We received comments on this wildland urban interface (WUI) land, or field of identifying areas at risk of
proposed definition recommending that land in which houses meet wildland wildfire, and is thus an ideal reference
EPA not use a single tree age in the vegetation or are mixed with vegetation. for purposes of implementing RFS2.
define old growth and late-successional We noted that SILVIS Lab, in the EPA has included in the rulemaking
forests, as this criterion does not apply Department of Forest Ecology and docket instructions on using the WUI
to all types of forests. While EPA Management and the University of map to find the status of a plot of land.
understands that there are a number of Wisconsin, Madison, has, with funding
criteria for determining whether a forest provided by the U.S. Forest Service, v. Algae
is old growth and that the criteria differ mapped WUI lands based on the 2000 EISA specifies that algae qualify as
depending on the type of forest, for Census and the U.S. Geological Survey renewable biomass. EPA did not
purposes of the RFS2 rule, EPA seeks to National Land Cover Data (NLCD), and propose a definition for this term. A
use definitive criteria that can be we sought comment on how best to use
number of commenters have requested
applied by non-professionals. EPA is this map.
We received comments on the clarification, specifically asking whether
finalizing the definition of old growth cyanobacteria (also known as blue-green
as proposed. proposal and on the two proposed
alternative options for identifying areas algae), diatoms, and angiosperms are
iv. Biomass Obtained From Certain at risk of wildfire. A number of within the definition. Technically, the
Areas at Risk From Wildfire commenters argued that EPA should term algae has recently been defined
The EISA definition of renewable define areas at risk of wildfire using an as thallophytes (plants lacking roots,
biomass includes biomass obtained from existing definition of WUI from the stems and leaves) that have chlorophyll
the immediate vicinity of buildings and Healthy Forests Restoration Act (Pub. L. a as their primary photosynthetic
other areas regularly occupied by 108148). Many commenters pigment and lack a sterile covering of
cells around the reproductive cells. 5 i. Ensuring That RINs Are Generated ii. Whether RINs Must Be Generated for
Algae are relatively simple organisms Only for Fuels Made From Renewable All Qualifying Renewable Fuel
that are virtually ubiquitous, occurring Biomass Under RFS1, virtually all renewable
in freshwater, brackish water, saltwater, fuel is required to be assigned a RIN by
and terrestrial habitats. When present in The effect of adding EISAs definition
the producer or importer. This
water, they may be suspended, or grow of renewable biomass to the RFS requirement was developed and
attached to various substrates. They program is to ensure that renewable finalized in the RFS1 rulemaking in
range in size from unicellular to among fuels are only eligible for the program if order to address stakeholder concerns,
the longest living organisms (e.g. sea made from certain feedstocks, and if particularly from obligated parties, that
kelp). There is some disagreement some of those feedstocks come from the number of available RINs should
among scientists as to whether certain types of land. In the context of reflect the total volume of renewable
cyanobacteria should be considered our regulatory program, this means that fuel used in the transportation sector in
bacteria or algae. Some consider them to RINs could only be generated if it can the U.S. and facilitate program
be bacteria because of their cellular be established that the feedstock from compliance. EISA has dramatically
organization and biochemistry. which the fuel was made meets EISAs increased the mandated volumes of
However, others find it more significant definitions of renewable biomass renewable fuel that obligated parties
that they contain chlorophyll a, which include land restrictions. Otherwise, no must ensure are produced and used in
differs from the chlorophyll of bacteria the U.S. At the same time, EISA makes
RINs could be generated to represent the
which are photosynthetic, and also it more difficult for renewable fuel
renewable fuel produced or imported.
because free oxygen is liberated in blue- producers to demonstrate that they have
green algal photosynthesis but not in The EISA language does not distinguish
between domestic renewable fuel fuel that qualifies for RIN generation by
that of the bacteria.6 EPA believes that
feedstocks and renewable fuel restricting qualifying renewable fuel to
it furthers the purposes of EISA to
feedstocks that come from abroad, so that made from renewable biomass.
interpret the term algae in EISA
our final rule requires similar feedstock The inclusion of such restrictions under
broadly to include cyanobacteria, since
affirmation and recordkeeping RFS2 may mean that, in some
doing so will make available another
requirements for both RIN-generating situations, a renewable fuel producer
possible feedstock for renewable fuel
domestic renewable fuel producers and would prefer to forgo the benefits of RIN
production that will further the energy
generation to avoid the cost of ensuring
independence and greenhouse gas RIN-generating foreign producers or
that its feedstocks qualify for RIN
reduction objectives of the Act. Further, importers.
EPA expects that cyanobacteria used in generation. If a sufficient number of
We acknowledge that incidental renewable fuel producers acted in this
biofuel production would be cultivated, contaminants can be introduced into
as opposed to harvested, and therefore way, it could lead to a situation in
feedstocks during cultivation, transport which not all qualifying fuel is assigned
that there would be no significant
or processing. It is not EPAs intent that RINs, thus resulting in a shortage of
impact from use of cyanobacteria for
biofuel production on naturally the presence of such contaminants RINs in the market that could force
occurring algal populations. Diatoms are should disqualify the feedstock as obligated parties into non-compliance
generally considered by the scientific renewable biomass. The final even though biofuels are being
community to be algae,7 and, consistent regulations therefore stipulate that the produced and used. Another possible
with this general scientific consensus, term renewable biomass includes outcome would be that the demand for
EPA interprets the EISA definition of incidental contaminants related to and price of RINs would increase
algae to include them. Microcrop customary feedstock production and significantly, making compliance by
angiosperms, however, do not meet the transport that are present in feedstock obligated parties more costly and
definition of algae, even if they live in that otherwise meets the definition if difficult than necessary and raising
an aquatic habitat, since they are such incidental contaminants are prices for consumers.
relatively more complex organisms than impractical to remove and occur in de With these concerns in mind, EPA
the algae. A discussion of microcrop minimus levels. By related to proposed to preserve in RFS2 the RFS1
angiosperms is included above in the customary feedstock production and requirement that RINs be generated for
discussion of planted crops and crop transport, we refer to contaminants all qualifying renewable fuel. We also
residue. proposed that renewable fuel producers
related to crop production, such as soil
maintain records showing that they
b. Implementation of Renewable or residues related to fertilizer, pesticide
utilized feedstocks made from
Biomass Requirements and herbicide applications to crops, as
renewable biomass if they are generating
well as contaminants related to RINs, or, if they are not generating RINs,
Our proposed approach to the
feedstock transport, such as nylon rope that they did not use feedstocks that
treatment of renewable biomass under
used to bind feedstock materials. It qualify as renewable biomass. However,
RFS2 was intended to define the
conditions under which RINs can be would also include agricultural we considered this matter further, and
generated as well as the conditions contaminants introduced to the we realize that the implication of these
under which renewable fuel can be feedstock during sorting or shipping, proposed requirements is that
produced or imported without RINs. such as miscellaneous sorghum grains renewable fuel producers would be
Our proposed and final approaches to present in a load of corn kernels. caught in the untenable position of
both of these areas are described in However, contamination is not related being forced to participate in the RFS2
more detail below. to customary feedstock production and program (register, keep records, etc.)
transport, so such feedstocks would not even if they are unable to generate RINS
5 Phycology, Robert Edward Lee, Cambridge qualify, and in particular, any because their feedstocks do not meet the
University Press, 2008, page 3. hazardous waste or toxic chemical definition of renewable biomass. We
6 See, generally, Introduction to the Algae.
Structure and Reproduction, by Harold C. Bold and

contaminant in feedstock would received many comments on the
Michael J. Wynne, Prentice-Hall Inc. 1978, page 31. disqualify the feedstock as renewable proposed requirement to generate RINs
7 See id. biomass. for all qualifying renewable fuel. Most
commenters argued that the requirement c. Implementation Approaches for that the proposed approach would pose
to keep records for non-qualifying Domestic Renewable Fuel an unnecessary recordkeeping burden
renewable fuels was excessively Consistent with RFS1, renewable fuel on both feedstock and renewable fuel
onerous and served little purpose for the producers will be responsible for producers when, in practice, new lands
program. generating Renewable Identification will not be cleared, at least in the near
Numbers (RINs) under RFS2. In order to future, for purposes of growing
After considering the comments
determine whether or not their fuel is renewable fuel feedstocks. Commenters
received, EPA has determined that this
eligible for generating RINs, renewable argued that individual recordkeeping
requirement would be overly
fuel producers will generally need to was onerous, when compliance with the
burdensome and unreasonable for renewable biomass requirements could
producers. The burden stems from the have at least basic information about the
origin of their feedstocks, to ensure they be determined through the use of
requirement that producers prove that existing data and third-party programs.
their feedstocks do not qualify if they meet the definition of renewable
biomass. In the proposal, EPA described Commenters contend that the
are not generating RINs. If the data did recordkeeping and feedstock tracking
not exist or could not be obtained, and sought comment on several
approaches for implementing the land requirements are particularly arduous
producers could not produce the fuel, for corn, soybeans and other agricultural
even if no RINs would be generated. restrictions on renewable biomass
contained in EISA. crops that are used as renewable fuel
Thus, for the final rule, EPA is requiring feedstocks due to both the maturity and
The proposed approach for ensuring
only that producers that do generate that producers generate RINs properly the highly fungible nature of those
RINs have the requisite records (as was that EPA would require that feedstock systems. In contrast, other
discussed in section II.B.4.c.i. of this renewable fuel producers obtain commenters argued that recordkeeping
preamble) documenting that their fuel is documentation about their feedstocks and reporting requirements are
produced from feedstocks meeting the from their feedstock supplier(s) and take necessary to ensure that feedstocks are
definition of renewable biomass. Non- the measures necessary to ensure that properly verified as renewable biomass
RIN generating producers need not they know the source of their feedstocks to prevent undesirable impacts on
maintain any paperwork related to their and can demonstrate to EPA that they natural ecosystems and wildlife habitat
feedstocks and their origins. fall within the EISA definition of globally.
Although EPA is not requiring that renewable biomass. EPA would require We also sought comment on the
RINs be generated for all qualifying renewable fuel producers who generate possible use under EISA of non-
renewable fuel, EPA is seeking to avoid RINs to affirm on their renewable fuel governmental, third-party verification
situations where biofuels are produced, production reports that the feedstock programs used for certifying and
but RINs are not made available to the used for each renewable fuel batch tracking agricultural and forest products
market for compliance. EPA received meets the definition of renewable from point of origin to point of use both
comments requesting that we consider a biomass. EPA would also require within the U.S. and outside the U.S. We
provision in which any volume of renewable fuel producers to maintain examined third-party organizations that
renewable fuel for which RINs were not sufficient records to support these certify specific types of biomass from
generated would be an obligated volume claims. Specifically, we proposed that croplands and organizations that certify
for that producer, to serve as a renewable fuel producers who use forest lands, including the Roundtable
planted crops or crop residue from on Sustainable Palm Oil, the Basel
disincentive for those producers who
existing agricultural land, or who use Criteria for Responsible Soy Production,
might not generate RINs in order to
planted trees or slash from actively the Roundtable on Sustainable Biofuels
avoid the RFS program requirements.
managed tree plantations, would be (RSB) and the Better Sugarcane
While EPA is not finalizing this
required to have copies of their Initiative (BSI). Additionally, we
provision in todays rule, we may
feedstock producers written records examined the work of the international
consider a future rulemaking to Soy Working Group, the Brazilian
that serve as evidence of land being
promulgate a provision such as this if Association of Vegetable Oil Industries
actively managed (or fallow, in the case
we find that EISA volumes are not being (ABIOVE) and Brazils National
of agricultural land) since December
met due to producers declining to 2007, such as sales records for planted Association of Grain Exporters (ANEC),
generate RINs for their qualifying crops or trees, livestock, crop residue, or Greenpeace, Verified Sustainable
renewable fuel. We also note that it is slash; a written management plan for Ethanol initiative, the Sustainable
ultimately the availability of qualifying agricultural or silvicultural purposes; or, Agriculture Network (SAN), the Forest
renewable fuel, as determined in part by documentation of participation in an Stewardship Council (FSC), American
the number of RINs in the marketplace, agricultural or silvicultural program Tree Farm program and Sustainable
that will determine the extent to which sponsored by a Federal, state or local Forestry Initiative (SFI). We proposed
EPA should issue a waiver of RFS government agency. In the case of all not to solely rely on any existing third-
requirements on the basis of inadequate other biomass, we proposed to require party verification program to implement
domestic supply. It is in the interest of renewable fuel producers to have, at a the land restrictions on renewable
renewable fuel producers to avoid a minimum, written records from their biomass under RFS2 for several reasons.
situation where a waiver of the EISA feedstock supplier that serve as These programs are limited in the scope
volume requirements appears necessary. evidence that the feedstock qualifies as of products they certify, the acreage of
EPA encourages renewable fuel renewable biomass. land certified through third parties in
producers to generate RINs for all fuel We sought comment on this approach the U.S. covers only a small portion of
that is made from feedstocks meeting generally as well as other methods of the total available land estimated to
the definition of renewable biomass and verifying renewable fuel producers qualify for renewable biomass
that meets the GHG emissions reduction claims that feedstocks qualify as production under the EISA definition,
thresholds set out in EISA. Please see renewable biomass. EPA received and none of the existing third-party
section II.D.6 for additional discussion extensive comments on the proposed systems had definitions or criteria that
of this issue. approach. Many affected parties argued perfectly match the land use definitions
and restrictions contained in the EISA i. Recordkeeping and Reporting for written management plan for
definition of renewable biomass. Feedstocks silvicultural purposes; documentation
We received several comments After considering the comments we of participation in a silvicultural
indicating that producers would like to received on the proposed approach, program sponsored by a Federal, state or
use evidence of their participation in EPA is finalizing reporting and local government agency; or
these types of programs to prove that recordkeeping requirements comparable documentation of land management in
their feedstocks meet the definition of accordance with a silvicultural product
to those in the approach we discussed
renewable biomass. Others argued that certification program; an agreement for
in the proposed rule for all categories of
while, at this time, the requirements of land management consultation with a
renewable biomass, with the exception
third-party programs may not professional forester that identifies the
of planted crops and crop residue from
encompass all of the restrictions and land in question; or evidence of the
agricultural land in the United States,
requirements of EISAs renewable existence and ongoing maintenance of a
which will be covered by the aggregate
biomass definition, the programs may road system or other physical
compliance approach discussed below
alter their criteria in the future to infrastructure designed and maintained
in Section II.B.4.c.iii. EPA believes that
parallel EISAs requirements. EPA for logging use. There are many existing
these requirements on the fuel producer
agrees that this is a possibility and, in programs, such as those administered by
the future, will consider the use of these utilizing feedstocks other than crops
USDA and independent third-party
programs in order to simplify and crop residue are necessary to ensure
certifiers, that could be used as
compliance with the renewable biomass that the definition of renewable biomass
documentation that verifies that
requirements. We encourage fuel is being met, and to allow feedstocks to
feedstock from certain land qualifies as
producers to work to identify changes to be traced from their original producer to
renewable biomass. For example, many
such programs that could allow them to the renewable fuel production facility.
tree plantation owners already
be used as a viable compliance option. Furthermore, we believe that, in most participate in a third-party certification
In the proposal, EPA also cases, feedstock producers will already program such as FSC or SFI. Written
acknowledged that land restrictions have or will be able to easily generate proof of participation by a tract of land
contained within the definition of the specified documentation for in a program of this type on December
renewable biomass may not, in practice, renewable fuel producers necessary to 19, 2007 would be sufficient to show
result in a significant change in provide them with adequate assurance that a tree plantation was cleared prior
agricultural practices, since biomass that the feedstock in question meets the to that date and that it was actively
from nonqualifying lands may still be definition of renewable biomass. managed on that date. The tree
used for non-fuel (e.g., food) purposes. Under todays rule, all renewable fuel plantation owner would need to send
Therefore, we sought comment on a producers must maintain written copies of this documentation to the
stakeholder suggestion to establish a records from their feedstock suppliers renewable fuel producer when
baseline level of production of biomass for each feedstock purchase that identify supplying them with biomass that will
feedstocks such that reporting and the type and amount of feedstocks and be used as a renewable fuel feedstock.
recordkeeping requirements would be where the feedstock was produced and We anticipate that the recordkeeping
triggered only when the baseline that are sufficient to verify that the requirements will result in renewable
production levels of feedstocks used for feedstock qualifies as renewable fuel producers amending their contracts
biofuels were exceeded. Additionally, biomass. Specifically, renewable fuel and modifying their supply chain
EPA offered as an alternative the use of producers must maintain maps and/or interactions to satisfy the requirement
existing satellite and aerial imagery and electronic data identifying the that producers have documented
mapping software and tools to boundaries of the land where the assurance and proof about their
implement the renewable biomass feedstock was produced, product feedstocks origins. Enforcement will
provisions of EISA. We received transfer documents (PTDs) or bills of rely in part on EPAs review of
numerous comments in support of these lading tracing the feedstock from that renewable fuel production reports and
options. Commenters argued that USDA land to the renewable fuel production attest engagements of renewable fuel
collects and maintains ample data on facility, and other written records that producers records. EPA will also
land use that EPA could use to serve as evidence that the feedstock consult other data sources, including
demonstrate that, due to increasing crop qualifies as renewable biomass. We any data made available by USDA, and
yields and other considerations, believe the maps or electronic data can may conduct site visits or inspections of
agricultural land acreage will not be easily generated using existing Web- feedstock producers and suppliers
expand, at least in the near term, to based information. facilities.
accommodate the increased renewable Producers using planted trees and tree The reporting requirements for
fuel obligations of RFS2. residue from tree plantations must renewable biomass in todays final rule
EPA also sought comment on an maintain additional documentation that include, as proposed, include an
additional alternative in which EPA serves as evidence that the tree affirmation by the renewable fuel
would require renewable fuel producers plantation was cleared prior to producer for each batch of renewable
to set up and administer a company- December 19, 2007, and actively fuel for which they generate RINs that
wide quality assurance program that managed as a tree plantation on the feedstocks used to produce the batch
would create an additional level of rigor December 19, 2007. This documentation meet the definition of renewable
in the implementation scheme for the must consist of the following types of biomass. Additionally, the final
EISA land restrictions on renewable records which must be traceable to the reporting requirements include a
biomass. EPA is not finalizing this land in question: Sales records for quarterly report to be sent to EPA by
company-wide quality assurance planted trees or slash; purchasing each renewable fuel producer that
program approach, but rather, is records for fertilizer, weed control, or includes a summary of the types and
encouraging the option for an industry- reseeding, including seeds, seedlings, or volumes of feedstocks used throughout
wide quality assurance program, as other nursery stock together with other the quarter, as well as electronic data or
described in the following section, to be written documentation connecting the maps identifying the land from which
administered. land in question to these purchases; a those feedstocks were harvested.
Producers need not provide duplicate auditor funded by renewable fuel included it as a compliance option in
maps if purchasing feedstocks multiple producers and feedstock suppliers. The todays final rule.
times from one plot of land; producers program must consist of a verification
ii. Approaches for Foreign Producers of
may cross-reference the previously program for participating renewable fuel
Renewable Fuel
submitted map. Producers will also be producers and renewable feedstock
required to keep records tracing the producers and handlers designed to The EISA renewable biomass
feedstocks from the land to the provide independent oversight of the language does not distinguish between
renewable fuel production facility, other feedstock handling processes that are domestic renewable fuel and fuel
written records from their feedstock required to determine if a feedstock feedstocks and renewable fuel and fuel
suppliers that serve as evidence that the meets the definition of renewable and feedstocks that come from abroad.
feedstock qualifies as renewable biomass. Under this option, a EPA proposed that foreign producers of
biomass, and for producers using participating renewable fuel producer renewable fuel that is exported to the
planted trees or tree residue from tree and its renewable feedstock suppliers U.S. be required to meet the same
plantations, written records that serve as and handlers would have to participate compliance obligations as domestic
evidence that the land from which the in the funding of an organization which renewable fuel producers, as well as
feedstocks were obtained was cleared arranges to have an independent auditor some additional measure, discussed in
prior to December 19, 2007 and actively conduct a program of compliance Section II.C., designed to facilitate EPA
managed on that date. These surveys. The compliance audit must be enforcement in other countries. These
requirements will apply to renewable carried out by an independent auditor proposed obligations include facility
fuel producers using feedstocks from pursuant to a detailed survey plan registration and submittal of
foreign sources (unless special submitted to EPA for approval by independent engineering reviews
approvals are granted in the future, as November 1 of the year preceding the (described in Section II.C below), and
described below), or from domestic year in which the alternative reporting, recordkeeping, and attest
sources, except for planted crops or crop compliance program would be engagement requirements. The proposal
residue (discussed below). implemented. The compliance survey also would have included for foreign
This approach will be integrated into program plan must include a producers the same obligations that
the existing registration, recordkeeping, statistically supportable methodology domestic producers have for verifying
reporting, and attest engagement for the survey, the locations of the that their feedstock meets the definition
procedures for renewable fuel of renewable biomass, such as certifying
surveys, the frequency of audits to be
producers. It places the burden of on each renewable fuel production
included in the survey, and any other
implementation and enforcement on report that their renewable fuel
elements that EPA determines are
renewable fuel producers rather than feedstock meets the definition of
necessary to achieve the same level of
bringing feedstock producers and renewable biomass and working with
quality assurance as the individual
suppliers directly under EPA regulation, their feedstock suppliers to ensure that
recordkeeping and reporting
minimizing the number of regulated they receive and maintain accurate and
requirements included in the RFS2
parties under RFS2. sufficient documentation in their
regulations.
EPA also sought comment on, and is records to support their claims.
finalizing as an option, an alternative Under this alternative compliance
program, the independent auditor (1) RIN-Generating Importers
approach in which EPA allows
renewable fuel producers and renewable would be required to visit participating EPA proposed to allow importers to
fuel feedstock producers and suppliers renewable feedstock producers and generate RINs for renewable fuel they
to develop a quality assurance program suppliers to determine if the biomass are importing into the U.S. only if the
for the renewable fuel production they supply to renewable fuel producers foreign producer of that renewable fuel
supply chain, similar to the model of meets the definition of renewable had not already done so. Under the
the successful Reformulated Gasoline biomass. This program would be proposal, in order to generate RINs,
Survey Association. While individual designed to ensure representative importers would need to obtain
renewable fuel producers may still coverage of participating renewable information from the registered foreign
choose to comply with the individual feedstock producers and suppliers. The producers concerning the point of origin
renewable biomass recordkeeping and auditor would generate and report the of their fuels feedstock and whether it
reporting requirements rather than results of the surveys to EPA each meets the definition of renewable
participate in a quality assurance calendar quarter. In addition, where the biomass. Therefore, we proposed that in
program, we believe that this preferred survey finds improper designations or the event that a batch of foreign-
alternative could be less costly than an handling, the renewable fuel producers produced renewable fuel does not have
individual compliance demonstration, would be responsible for identifying RINs accompanying it when it arrives at
and it would add a quality assurance and addressing the root cause of the a U.S. port, an importer must obtain
element to RFS2. Those participating problem. The renewable fuel producers documentation that proves that the
renewable fuel producers would be would have to take corrective action to fuels feedstock meets the definition of
presumed to be in compliance with the retire the appropriate number of invalid renewable biomass (as described in
renewable biomass requirements unless RINs depending on the violation. EPA Section II.B.4.a. of this preamble) from
and until the quality assurance program received comments from a number of the fuels producer, who must have
finds evidence to the contrary. Under parties who were supportive of this registered with the RFS program and
todays rule, renewable fuel producers option as an alternative and less- conducted a third-party engineering
must choose either to comply with the burdensome way of ensuring that review. With such documentation, the
individual renewable biomass renewable fuel feedstocks meet the importer could generate RINs prior to
recordkeeping and reporting described definition of renewable biomass. EPA introducing the fuel into commerce in
above, or they must participate in the believes this option to be an efficient the U.S.
quality assurance program. and effective means of implementing We sought comment on this proposed
The quality assurance program must and enforcing the renewable biomass approach and whether and to what
be carried out by an independent requirements of EISA, and has therefore extent the approaches for ensuring
compliance with the EISAs land crop residues may rely on the aggregate biomass provisions related to crops and
restrictions by foreign renewable fuel compliance approach described below crop residue are satisfied, while also
producers should differ from the to ensure that their feedstocks are easing the burden for certain renewable
proposed approach for domestic renewable biomass, this approach is not fuel producers and their feedstock
renewable fuel producers. We received available at this time to foreign suppliers vis-a-vis verification that their
comments on the proposed renewable fuel producers, as described feedstock qualifies as renewable
implementation option for importers of below. biomass.
foreign renewable fuel. Some argue that EPA believes that the renewable As discussed in more detail below,
the proposed recordkeeping biomass recordkeeping provisions are there are five main factors supporting
requirements for imported fuel were necessary in order for EPA to ensure the aggregate compliance approach we
overly burdensome. On the other hand, that RINs are being generated for fuel are taking for planted crops and crop
others argued that importers, similarly that meets EISAs definition of residue. First, EPA is using data sets
to domestic producers, should be renewable fuel. Just as for domestic that allow us to obtain an appropriately
required to obtain information that can producers, foreign producers must representative estimate of the
serve as evidence that the feedstocks maintain evidence that the fuel meets agricultural lands available under EISA
meet the definition of renewable the GHG reduction requirements and is for the production of crops and crop
biomass, in order to avoid fraud. Some made from renewable biomass. residue as feedstock for renewable fuel
commenters also argued that importers production. Second, USDA data
iii. Aggregate Compliance Approach for
should be able to generate RINs for fuel indicate an overall trend of agricultural
Planted Crops and Crop Residue From
imported from foreign producers that land contraction. These data, together
Agricultural Land
are not registered with EPA under the with EPA economic modeling, suggest
RFS2 program. In light of the comments received on that 2007 aggregate baseline acreage
For the final rule, EPA is requiring the proposed renewable biomass should be sufficient to support EISA
that importers may only generate RINs recordkeeping requirements and renewable fuel obligations and other
for renewable fuel if the foreign implementation options, EPA sought foreseeable demands for crop products,
producer has not already done so. The assistance from USDA in determining at least in the near term, without
foreign producers must be registered whether existing data and data sources clearing and cultivating additional land.
with EPA under the RFS2 program, and might suggest an alternative method for Third, EPA believes that existing
must have conducted an independent verifying compliance with renewable economic factors for feedstock
engineering review. Furthermore, we are biomass requirements associated with producers favor more efficient
requiring that importers obtain from the the use of crops and crop residue for utilization practices of existing
foreign producer and maintain in their renewable fuel production. Taking into agricultural land rather than converting
records written documentation that consideration publicly available data on non-agricultural lands to crop
serves as evidence that the renewable agricultural land available from USDA production. Fourth, if, at any point, EPA
fuel for which they are generating RINs and USGS as well as expected economic finds that the total amount of land in
was made from feedstocks meeting the incentives for feedstock producers, EPA use for the production of crops
definition of renewable biomass. The has determined that an aggregate including crops for grazing and forage is
foreign producer that originally compliance approach is appropriate for equal or greater than 397 million acres
generated the fuel must ensure that certain types of renewable biomass, (i.e. within 5 million acres of EPAs
these feedstock records are transferred namely planted crops and crop residue established 402 million acre baseline),
with each batch of fuel and ultimately from the United States. EPA will conduct further investigations
reach the RIN-generating importer. A Under the aggregate compliance to evaluate whether the presumption
requirement that importers maintain approach, EPA is determining for this built into the aggregate compliance
these renewable biomass records is rule the total amount of existing approach remains valid. Lastly, EPA has
consistent with the renewable biomass agricultural land in the U.S. (as defined set up a trigger mechanism that in the
recordkeeping requirements imposed on above in Section II.B.4.a.) at the event there are more than the baseline
domestic producers of renewable fuel. enactment date of EISA, which is 402 amount of acres of cropland,
million acres. EPA will monitor total pastureland and CRP land in
(2) RIN-Generating Foreign Producers agricultural land annually to determine production, renewable fuel producers
Foreign producers that intend to if national agricultural land acreage will be required to meet the same
generate RINs would be required to increases above this 2007 national individual or consortium-based
designate renewable fuel intended for aggregate baseline. Feedstocks derived recordkeeping and reporting
export to the U.S. as such, segregate the from planted crops and crop residues requirements applicable to RIN-
volume until it reaches the U.S., and will be considered to be consistent with generating renewable fuel producers
post a bond to ensure that penalties can the definition of renewable biomass and using other feedstocks. Taken together,
be assessed in the event of a violation, renewable fuel producers using these these factors give EPA high confidence
as discussed in Section II.D.2.b. feedstocks will not be required to that the aggregate compliance approach
Similarly to domestic producers of maintain specific renewable biomass for domestically grown crops and crop
renewable fuel, foreign producers must records as described below unless and residues meets the statutory obligation
obtain and maintain written until EPA determines that the 2007 to ensure feedstock volumes used to
documentation from their feedstock national aggregate baseline is exceeded. meet the renewable fuel requirements
providers that can serve as evidence that If EPA finds that the national aggregate also comply with the definition of
their feedstocks meet the definition of baseline is exceeded, individual renewable biomass.
renewable biomass. Foreign producers recordkeeping and reporting
may also develop a quality assurance requirements as described below will be (1) Analysis of Total Agricultural Land
program for their renewable fuel triggered for renewable fuel producers in 2007
production supply chain, as described using crops and crop residue. We As described in Section II.B.4.a.
above. However, while domestic believe that the aggregate approach will above, EPA is defining existing
renewable fuel producers using crops or fully ensure that the EISA renewable agricultural land for purposes of the
EISA land use restrictions on crops and actively managed or fallow and Farm Service Agency Crop History
crop residue to include cropland, nonforested on that date. These Data. The FSA maintains annual
pastureland and CRP land that was categories of lands include those from records of field-level land use data for
cleared and actively managed or fallow which traditional crops, such as corn, all farms enrolled in FSA programs.
and nonforested on the date of EISA soy, wheat and sorghum, would likely Almost all national cropland and
enactment. To determine the aggregate be grown. Therefore quantification of pastureland is reported through FSA
total acreage of existing agricultural cropland, pastureland, and CRP land and recorded in this data set. We used
land for the aggregate compliance from these data sources represents a the Cropland category to determine
approach on the date of EISA reasonable assessment of the acreage in total agricultural land. Pastureland is
enactment, EPA obtained from USDA the United States that is available under reported by farms under the category
data representing total cropland the Act for the production of crops and
Cropland as cropland used for grazing
(including fallow cropland), crop residues that could satisfy the
definition of renewable biomass in and forage under the crop type mixed
pastureland, and CRP land in 2007 from forage. Timber land and any grazed
three independently gathered national EISA.
Conservation Reserve Program Data. native grass was removed from the
land use data sources (discussed in FSA reports CRP enrollment acreage Cropland category, because these land
further detail below): The Farm Service each year in the publication types represent either forestland or
Agency (FSA) Crop History Data, the Conservation Reserve Program: rangeland, which are not within the
USDA Census of Agriculture (2007), and Summary and Enrollment Statistics. definition of existing agricultural land.
the satellite-based USDA Crop Data The CRP program includes the general CRP lands and other conservation
Layer (CDL). In addition, CRP acreage is CRP, the Conservation Reserve program lands are also reported as
provided by FSAs annually published Enhancement Program (CREP), and the cropland. Because GRP and WRP lands
Conservation Reserve Program: Farmable Wetlands Program (FWP). The are not within the definition of existing
Summary and Enrollment Statistics. By Wetlands Reserve Program (WRP) and agricultural land as defined in todays
definition, the cropland, pastureland, Grasslands Reserve Program (GRP) are regulations, they were also subtracted
and CRP land included in these data not under CRP and are not included in from the Cropland category total. FSA
sources for 2007 were cleared or the total agricultural land figure in this Crop History Data show that there was
cultivated on the date of EISA rulemaking. The 2007 CRP acreage was 402 million acres of agricultural land, as
enactment (December 19, 2007) and, 36.7 million acres. This is an exact defined here, in the U.S. in 2007 (See
consistent with the principles set forth count of acreage within the CRP
Table II.B.41).
in Section II.4.a.i, would be considered program in 2007.
TABLE II.B.41TOTAL U.S. AGRICULTURAL LAND IN 2007 FROM USDA DATA SOURCES
FSA crop Agricultural
Land category history data census data
Cropland and Pastureland ....................................................................................................................................... 365 367

CRP Land ................................................................................................................................................................ 37 37
Total Land ......................................................................................................................................................... 402 404
USDA Census of Agriculture. USDA (95% confidence range 401406 million grasslands are not included in the final
conducts a full census of the U.S. acres) of existing agricultural land as sum, all areas of the Grassland
agricultural sector once every five years. defined in todays rule, in the U.S. in herbaceous category from the U.S.
The data are available for the U.S., each 2007 (See Table II.B.41). Geological National Land Cover Data
of the 50 States, and for each county. Crop Data Layer. The USDA National layer (NLCD) that overlap the CDL
The most recent census available is the Agricultural Statistics Service (NASS) layers are removed from the total
2007 Census of Agriculture. For the Crop Data Layer (CDL) is a raster, geo- agricultural land number. Producer and
purpose of this rulemaking, USDA referenced, crop-specific land cover data user accuracies 8 are available for the
provided EPA total acreage and 95% layer suitable for use in geographic CDL crop categories.
confidence intervals for the Census information systems (GIS) analysis. Primary Data Source Selection for
category Total Cropland, which Based on satellite data, the CDL has a Aggregate Compliance Approach. EPA
includes the sub-categories Harvested ground resolution of 56 meters and was has determined that the FSA Crop
cropland, Cropland used only for verified using FSA surveys. The CDL History Data will be used as the data set
pasture and grazing, and Other covers 21 major agricultural states for on which the total existing agricultural
cropland. WRP and GRP acreage are 2007 and therefore cannot be used to land baseline will be based for the
included in Other cropland, so, for determine a 2007 national aggregate aggregate compliance approach. The
purposes of this rulemaking, they were agricultural land baseline. There will be FSA Crop History Data is the only
subtracted from the sub-category full coverage of the 48 contiguous states complete data set for 2007 that is
number (see above). The analysis for 2009, and the CDL can be used for collected annually, enabling EPA to
excluded the Permanent rangeland and analysis validation purposes during monitor agricultural land expansion or
pasture category, as the pasture data monitoring. From 2010 onward, it
cannot be separated from rangeland in coverage of the 48 contiguous states will 8 Producer Accuracy indicates the probability
this category. Total CRP acreage in 2007 be dependent on available funding. GIS that a groundtruth pixel will be correctly mapped
and measures errors of omission; User Accuracy
was added to Total cropland. With analyses of the CDL will include all indicates the probability that a pixel from the
these adjustments, the Census of cropland and pastureland data for each classification actually matches the groundtruth data
Agriculture showed 404 million acres state. To ensure that non-pasture and measures errors of omission.
contraction from year to year using a TABLE II.B.42TOTAL AGRICULTURAL EPAs findings will be published by
consistent data set. The total existing LAND (AS DEFINED IN SECTION November 30, at the latest. If in
agricultural land value derived from II.B.4.a) COUNTED IN THE CENSUS November the 402 million acres
FSA Crop History Data rests within the OF AGRICULTURE FROM 19972007
baseline is found to be exceeded, then
95% confidence interval of the 2007 on July 1 of the following year,
Census of Agriculture and is only 2 Total agricultural land renewable fuel producers using
Census year feedstocks qualifying for this aggregate
million acres less than the Census of (millions of acres)
Agriculture point estimate. The Census compliance approach, namely planted
2007 ...................... 404 crops and crop residue from the United
of Agriculture provides slightly fuller 2002 * .................... 431 States, will be required to comply with
coverage than the FSA Crop History 1997 * .................... 445 the recordkeeping and reporting
Data due to the nature of the data
* 2002 data do not include farms with land in requirements applicable to producers
collection; however, given that both using other types of renewable biomass,
FWP or CREP.
data collection systems have consistent as described in the previous sections.
and long-standing methodologies, the TABLE II.B.43TOTAL AGRICULTURAL This includes the option that fuel
disparity between the two should LAND (AS DEFINED IN SECTION producers could utilize a third-party
remain approximately constant. consortium to demonstrate compliance.
II.B.4.a) RECORDED IN FSA CROP
Therefore, the FSA Crop History Data EPA acknowledges that it is possible
will provide a consistent data set for
HISTORY DATA FROM 20052007
that under this approach some of the
analyzing any expansion or contraction Total agricultural land land available under EISA for crop
of total national agricultural land in the Year production on the date of EISA
(millions of acres)
U.S. enactment could be retired and other
During its annual monitoring, EPA
2007 ...................... 402 land brought into production, without
2006 ...................... 393 altering the assessment of the aggregate
will use the FSA Crop History Data and 2005 ...................... 392 amount of cropland, pastureland and
the CDL analyses as a secondary source
CRP land. Under EISA, crops or crop
to validate our annual assessment. In (3) Aggregate Compliance Determination residues from the new lands would not
years when the Census of Agriculture is qualify as renewable biomass. However,
updated, this data will also be used to The foundation of the aggregate
EPA expects such shifts in acreage to be
validate our annual assessment. Other compliance approach is establishment
de minimus, as long as the total
data sources, such as the annual NASS of a baseline amount of eligible
aggregate amount of agricultural land
Farms, Land in Farms and Livestock agricultural land that was cleared or
does not exceed the 2007 national
Operations may also be useful as cultivated and actively managed or
aggregate baseline. EPA expects that
secondary data checks. Lastly, EPA fallow and non-forested on December
new lands are unlikely to be cleared for
19, 2007. Based on USDAFSA Crop
intends to consider, as appropriate, agricultural purposes for two reasons.
History Data, EPA is establishing a
other data sources for the annual First, it can be assumed that most
baseline of 402 million acres of U.S. undeveloped land that was not used as
monitoring analysis of total agricultural
agricultural land, as defined in Section agricultural land in 2007 is generally
land as new technologies and data II.B.4.a and based upon the methods
sources come online that would not suitable for agricultural purposes
described in Section II.B.4.c.iii.(1), that and would serve only marginally well
improve the accuracy and robustness of is eligible for production of planted
annual monitoring. for production of renewable fuel
crops and crop residue meeting the feedstocks. Due to the high costs and
(2) Aggregate Agricultural Land Trends EISA definition of renewable biomass. significant inputs that would be
Over Time EPA will monitor total U.S. agricultural required to make the non-agricultural
land annually, using FSA Crop History land suitable for agricultural purposes,
The Census of Agriculture (conducted Data as a primary determinant, but it is highly unlikely that farmers will
every five years) shows that U.S. using other data sources for support undertake the effort to shift land that
agricultural land has decreased by 44 (See Section II.4.c.iii.(1)). If, at any is currently non-agricultural into
million acres from 1997 to 2007, point, EPA finds that the total land in agricultural use. Second, crop yields are
indicating an overall decade trend of use for the production of crops, projected to increase, reducing the need
contraction of agricultural land including crops for grazing and forage, for farmers to clear new land for
utilization despite some year-to-year is greater than 397 million acres (i.e. agricultural purposes. We believe that
variations that can be seen by reference within 5 million acres of EPAs this effect is reflected in the overall
to the annual FSA Crop History records established 402 million acre baseline), trend, discussed earlier, of an overall
(See Table II.B.42 and Table II.B.43). EPA will conduct further investigations contraction in agricultural land acreage
EPAs FASOM modeling results, which to evaluate whether the presumption over time.
built into the aggregate compliance If EPA determines that the baseline is
model full EISA volumes in 2022,
approach remains valid. Additionally, if exceeded, and that individual
support this contraction trend,
EPA determines that the data indicates compliance with the renewable biomass
indicating that total cropland, that this 2007 baseline level of eligible reporting and recordkeeping
pastureland, and CRP land in the U.S. agricultural land has been exceeded, requirements is triggered, renewable
in 2022, under a scenario of full EPA will publish in the Federal fuel producers using crops and crop
renewable fuel volume as required by Register a finding to that effect, and residue as a feedstock for renewable fuel
EISA, would be less than the 2007 additional requirements will be would become responsible, beginning
national acreage reported in the FSA triggered for renewable fuel producers July 1 of the following year, for meeting
Crop History Data (See preamble to verify that they are using planted individual recordkeeping and reporting
Section VII and RIA Chapter 5). crops and crop residue from existing requirements related to renewable
agricultural land as defined in todays biomass verification. These
rule as their renewable fuel feedstock. requirements are identical to those that
apply to producers using other types of independent third party quality- components of MSW (such as waste
renewable biomass feedstocks, such as assurance survey of all participating paper and wood waste) suggests that
planted trees from tree plantations, as renewable fuel producers and their only yard and food wastes physically
described in the previous sections. feedstock suppliers, completed in separated from other waste materials
Renewable fuel producers generating accordance with an industry-developed, satisfy the definition of renewable
RINs under the RFS2 program would EPA-approved plan, to ensure that they biomass. On the other hand, we noted
continue to be required to affirm are utilizing feedstocks that meet the that EISA does not define the term
(through EMTSEPA Moderated definition of renewable biomass. An in- separated, and so does not specify the
Transaction System) for each batch of depth discussion of this industry survey degree of separation required. We also
renewable fuel that their feedstocks option is included in the previous noted that there was some evidence in
meet the definition of renewable section. the Act that Congress did not intend to
biomass. Additionally, producers would While the aggregate compliance exclude MSW entirely from the
send a quarterly report to EPA that approach is appropriate for planted definition of renewable biomass. The
includes a summary of the types and crops and crop residues from definition of advanced biofuel
volumes of feedstocks used throughout agricultural land in the United States, includes a list of fuels that are eligible
the quarter, as well as electronic data or due in part to certain additional or for consideration as advanced biofuel,
maps identifying the land from which different constraints imposed by EISA, including ethanol derived from waste
those feedstocks were harvested. the aggregate approach cannot be material and biogas including landfill
Furthermore, those RIN-generating applied, at this time, to the other types gas.
renewable fuel producers will be of renewable biomass. Renewable fuel As an initial matter, we note that
required to obtain and maintain in their producers utilizing these types of some materials clearly fall within the
files written records from their renewable biomass, including planted definition of separated yard or food
feedstock suppliers for each feedstock trees and tree residues from tree waste. The statute itself identifies
purchase that identify where the plantations, slash and pre-commercial recycled cooking and trap grease as
feedstocks were produced and that are thinnings from non-federal forestland, one example of separated food waste.
sufficient to verify that the feedstocks animal waste, separated yard and food An example of separated yard waste is
qualify as renewable biomass. This waste, etc., will be subject to the the leaf waste that many municipalities
includes maps and/or electronic data individual reporting and recordkeeping pick up at curbside and keep separate
identifying the boundaries of the land requirements discussed in the previous from other components of MSW for
where the feedstock was produced, section. mulching or other uses. However, a
PTDs or bills of lading tracing the Additionally, EPA is not finalizing the large quantity of food and yard waste is
feedstock from that land to the aggregate compliance approach for disposed of together with other
renewable fuel production facility, and foreign producers of renewable fuel. household waste as part of MSW. EPA
other written records that serve as EPA does not, at this time, have estimates that about 120 million tons of
evidence that the feedstock qualifies as sufficient data to make a finding that MSW are disposed of annually much of
renewable biomass. Finally, producers non-domestically grown crops and crop it inextricably mixed with yard and
using planted crops and crop residue residues used in renewable fuel especially food waste. This material
must maintain additional production satisfy the definition of offers a potentially reliable, abundant
documentation that serves as evidence renewable biomass. Nevertheless, if, in and inexpensive source of feedstock for
that the agricultural land used to the future, adequate land use data renewable fuel production which, if
produce the crop or crop residue was becomes available to make a finding used, could reduce the volume of
cleared or cultivated and actively that, in the aggregate, crops and crop discarded materials sent to landfills and
managed or fallow, and nonforested on residues used in renewable fuel could help achieve both the GHG
December 19, 2007. This documentation production in a particular country emissions reductions and energy
must consist of the following types of satisfy the definition of renewable independence goals of EISA. Thus, EPA
records which must be traced to the biomass, EPA is willing to consider an believes we should consider under what
land in question: sales records for aggregate compliance approach for conditions yard and food waste that is
planted crops, crop residue, or renewable biomass on a country by present in MSW can be deemed
livestock, purchasing records for land country basis, in lieu of the individual sufficiently separated from other
treatments such as fertilizer, weed recordkeeping and reporting materials to qualify as renewable
control, or reseeding or a written requirements. biomass.
agricultural management plan or One commenter stated that it is clear
d. Treatment of Municipal Solid Waste that MSW does not qualify as renewable
documentation of participation in an
agricultural program sponsored by a (MSW) biomass under EISA, since the 2005
Federal, State or local government The statutory definition of renewable Energy Policy Act explicitly allowed for
agency. biomass does not include a reference to qualifying renewable fuel to be made
Alternatively, if the baseline is municipal solid waste (MSW) as did the from MSW, and EISA has no mention of
exceeded and the requirements are definition of cellulosic biomass it. Commenters from the renewable fuel
triggered for individual producer ethanol in the Energy Policy Act of industry generally favored maximum
verification that their feedstocks are 2005 (EPAct), but instead includes flexibility for the use of MSW in
renewable biomass renewable fuel separated yard waste and food waste. producing qualifying fuels under EISA,
producers may choose to work with We solicited comment on whether offering a variety of arguments based on
other renewable fuel producers as well EPA can and should interpret EISA as the statutory text and reasons why it
as feedstock producers and suppliers to including MSW that contains yard and/ would benefit the environment and the
develop a quality assurance program for or food waste within the definition of nations energy policy to do so. They
the renewable fuel production supply renewable biomass. On the one hand, favored either (1) a determination that
chain. This quality assurance program the reference in the statutory definition unsorted MSW can be used as a
would take the place of individual to separated yard waste and food feedstock for advanced biofuel even if it
accounting and would consist of an waste, and the lack of reference to other does not meet the definition of
renewable biomass, (2) that the Act be listing in the definition of renewable that is impractical to remove and
interpreted to include MSW as biomass of biomass obtained from the therefore appropriate to include in the
renewable biomass, or (3) that MSW immediate vicinity of buildings and category of separated food and yard
from which varying amounts of other areas regularly occupied by waste. In sum, EPA believes that the
recyclable materials have been removed people, or of public infrastructure, at biogenic portion of the residue
could qualify as renewable biomass. A risk from wildfire should be interpreted remaining after paper, cardboard,
consortium of ten environmental groups to include MSW. It is clear that the term plastic, textiles metal and glass have
said that for EISA volume mandates to at risk of wildfire modifies the entire been removed for recycling should
be met, it is important to take advantage sentence, and the purpose of the listing qualify as renewable biomass. This
of biomass resources from urban wastes is to make the biomass that is removed interpretation is consistent with the text
that would otherwise be landfilled. in wildfire minimization efforts, such as of the statute, and will promote the
They urged that post-recycling residues brush and dead woody material, productive use of materials that would
(i.e., those wastes that are left over at available for renewable fuel production. otherwise be landfilled. It will also
material recovery facilities after Such material does not typically include further the goals of EISA in promoting
separation and recycling) would fit MSW. Had Congress intended to energy independence and the reduction
within the letter and spirit of the include MSW in the definition of of GHG emissions from transportation
definition of renewable biomass. renewable biomass, EPA believes it fuels.
EPA does not believe that the statute would have clearly done so, in a manner EPA notes there are a variety of
can be reasonably interpreted to allow similar to the approach taken in EPAct. recycling methods that can be used,
advanced biofuel to be made from EPA also does not believe that it including curbside recycling programs,
material that does not meet the would be reasonable to interpret the as well as separation and sorting at a
definition of renewable biomass as reference to separated yard or food material recovery facility (MRF). For the
suggested in the first approach. The waste to include unsorted MSW. latter, the sorting could be done by hand
definition of advanced biofuel specifies Although MSW contains yard and food or by automated equipment, or by a
that it is a form of renewable fuel, and waste, such an approach would not give combination of the two. Sorting by hand
renewable fuel is defined in the statute meaning to the word separated. is very labor intensive and much slower
as fuel that is made from renewable We do believe, however, that yard and than using an automated system. In
biomass. While the definition of food wastes that are part of MSW, and most cases the by-hand system
advanced biofuel includes a list of are separated from it, should qualify as produces a slightly cleaner stream, but
materials that may be eligible for renewable biomass. MSW is the logical the high cost of labor usually makes the
consideration as advanced biofuel, and source from which yard waste and food automated system more cost-effective.
that list includes ethanol derived from waste can be separated. As to the degree Separation via MRFs is generally very
waste materials and biogas including of separation required, some efficient and can provide comparable if
landfill gas, the fact that the specified commenters suggested a simple post not better removal of recyclables to that
items are eligible for consideration recycling test be appropriate. They achieved by curbside recycling.
indicates that they do not necessarily would leave to municipalities and waste Based on this analysis, todays rule
qualify but must meet the definitional handlers a determination of how much provides that those MSW-derived
requirementsbeing renewable fuel waste should be recycled before the residues that remain after reasonably
made from renewable biomass and residue was used as a feedstock for practicable separation of recyclable
having life cycle greenhouse gas renewable fuel production. EPA materials other than food and yard
emissions that are at least 50% less than believes that such an approach would waste is renewable biomass. What
baseline fuel. There is nothing in the not guarantee sufficient separation remains to be addressed is what
statute to suggest that Congress used the from MSW of materials that are not yard regulatory mechanisms should be used
term renewable fuel in the definition waste or food waste to give meaning to to ensure the appropriate generation of
of advanced biofuel to have a different the statutory text. Instead, EPA believes RINs when separated yard and food
meaning than the definition provided in it would be reasonable in the MSW waste is used as a feedstock. We are
the statute. The result of the context to interpret the word finalizing two methods.
commenters first approach would be separated in the term separated yard The first method would apply
that general renewable fuel and or food waste to refer to the degree of primarily to a small subset of producers
cellulosic biofuel would be required to separation to the extent that is who are able to obtain yard and/or food
be made from renewable biomass reasonably practicable. A large amount wastes that have been kept separate
because the definitions of those terms of material can be, and is, removed from since waste generation from the MSW
specifically refer to renewable biomass, MSW and sold to companies that will waste stream. Examples of such wastes
whereas advanced biofuel and biomass- recycle the material. EPA believes that are lawn and leaf waste that have never
based diesel would not, because their the residues remaining after reasonably entered the general MSW waste stream.
definitions refer to renewable fuel practicable efforts to remove recyclable Typically, such wastes contain
rather than renewable biomass. EPA materials other than food and yard incidental amounts of materials such as
can discern no basis for such a waste (including paper, cardboard, the plastic twine used to bind twigs
distinction. EPA believes that the Act as plastic, textiles, metal and glass) from together, food wrappers, and other
a whole is best interpreted as requiring MSW should qualify as separated yard extraneous materials. As with our
all types of qualifying renewable fuels and food waste. This MSW-derived general approach to the presence of
under EISA to be made from renewable residue would likely include some incidental, de minimus contaminants in
biomass. In this manner the land and amount of residual non-recyclable feedstocks that are unintentionally
feedstock restrictions that Congress plastic and rubber of fossil fuel origin, present and impractical to remove, the
deemed important in the context of much of it being wrapping and presence of such material in separated
biofuel production apply to all types of packaging material for food. Since this yard or food waste will not disqualify
renewable fuels. material cannot be practicably separated such wastes as renewable biomass, and
EPA also does not agree with the from the remaining food and yard waste, the contaminants may be disregarded by
commenter who suggested that the EPA believes it is incidental material producers and importers generating
RINs. (See definition of renewable technology and practices, and (3) the the comments we received provided us
biomass and 80.1426(f)(1).) Waste technology or practices selected by the information on the method itself. Also,
streams kept separate since generation fuel producer, including an explanation commenters were supportive of its use.
from MSW that consist of yard waste are for such selection and reasons why Fuel producers must either run the
expected to be composed almost other technologies or practices were not ASTM D6866 method for each batch of
entirely of woody material or leaves, selected. EPA asks that any CBI fuel produced, or run it on composite
and therefore will be deemed to be accompanying a plan or a partys samples of the food and yard waste-
composed of cellulosic materials. Waste justification for a plan be segregated derived fuel derived from post-recycling
streams consisting of food wastes, from the non-CBI portions of the MSW residues. Producers will be
however, may contain both cellulosic submissions, so as to facilitate required at a minimum to take samples
and non-cellulosic materials. For disclosure of the non-CBI portion of of every batch of fuel produced over the
example, a food processing plant may plan submittals, and approved plans, to course of one month and combine them
generate both wastes that are primarily interested members of the public. into a single composite sample. The
starches and sugars (such as carrot and Producers using this second option, D6866 test would then be applied to
potato peelings, as well as fruits and will need to determine what RINs to the composite sample, and the resulting
vegetables that are discarded) as well as assign to a fuel that is derived from a non-fossil derived fraction will be
corn cobs and other materials that are variety of materials, including yard deemed cellulosic biofuel, and applied
cellulosic. We will deem waste streams waste (largely cellulosic) and food waste to all batches of fuel produced in the
consisting of food waste to be composed (largely starches and sugar), as well as next month to determine the
entirely of non-cellulosic materials, and incidental materials remaining after appropriate number of RINs that must
qualifying as advanced biofuels, unless reasonably practical separation efforts be generated. The producer would be
the producer demonstrates that some such as plastic and rubber of fossil required to recalculate this fraction at
portion of the food waste is cellulosic. origin. EPA has not yet evaluated the least monthly. For the first month, the
The cellulosic portion would then lifecycle greenhouse gas performance of producer can estimate the non-fossil
qualify as cellulosic biofuel. The fuel made from such mixed sources of fraction, and then make a correction as
method for quantifying the cellulosic waste, so is unable at this time to assign needed in the second month. (The
and non-cellulosic portions of the food a D code for such fuel. However, if a procedure using the ASTM D6866
waste stream is to be described in a producer uses ASTM test method method applies not only to the waste-
written plan which must be submitted D6866 on the fuel made from MSW- derived fuel discussed here but also to
to EPA under the registration derived feedstock, it can determine all partially renewable transportation
procedures in 80.1450(b)(vii) for what portion of the rule is of fossil and fuels, and is discussed in further detail
approval and which indicates the non-fossil origin. The non-fossil portion in Section II.D.4. See also the
location of the facility from which of the fuel will likely be largely derived regulations at 80.1426(f)(4)).
wastes are obtained, how identification from cellulosic materials (yard waste, The procedures for assigning D codes
and quantification of waste material is textiles, paper, and construction to the fuel produced from such wastes
to be accomplished, and evidence that materials), and to a much smaller extent are discussed in further detail in Section
the wastes qualify as fully separated starch-based materials (food wastes). II.D.5.
Unfortunately, EPA is not aware of a test One commenter suggested that biogas
yard or food wastes. The producer must
method that is able to distinguish from landfills should be treated in the
also maintain records regarding the
between cellulosic- and starch-derived same manner as renewable fuel
source of the feedstock and the amounts
renewable fuel. Under these produced from MSW. EPA agrees with
obtained. the commenter to a certain extent. The
circumstances, EPA believes that it is
The second method would involve appropriate for producers to base RIN definition of advanced biofuels in
use as feedstock by a renewable fuel assignment on the predominant EISA identifies Biogas (including
producer of the portion of MSW component and, therefore, to assume landfill gas and sewage waste treatment
remaining after reasonably practical that the biogenic portion of their fuel is gas) produced through the conversion of
separation activities to remove entirely of cellulosic origin. The non- organic matter from renewable biomass
recyclable materials, resulting in a biogenic portion of the fuel, however, as eligible for consideration as an
separated MSW-derived residue that would not qualify for RINs at this time. advanced biofuel. However, as with
qualifies as separated yard and food Thus, in sum, we are providing via the MSW, the statute requires that advanced
waste. Todays rule requires that parties ASTM testing method an opportunity biofuel be a renewable fuel and that
that intend to use MSW-derived residue for producers using an MSW-derived such fuel be made from renewable
as a feedstock for RIN-generating feedstock to generate RINs only for the biomass. The closest reference within
renewable fuel production ensure that biogenic portion of their renewable fuel. the definition of renewable biomass to
reasonably practical efforts are made to There is no D code for the remaining landfill material is separated yard or
separate recyclable paper, cardboard, fossil-derived fraction of the fuel in food waste. However, in applying the
textiles, plastics, metal and glass from todays rule nor for the entire volume of interpretation of separated yard and
the MSW, according to a plan that is renewable fuel produced when using food waste described above for MSW to
submitted by the renewable fuel MSW-derived residue as a feedstock. landfill material, we come to a different
producer and approved by EPA under The petition process for assigning such result. Landfill material has by design
the registration procedures in codes in todays rule can be used for been put out of practical human reach.
80.1450(b)(viii). In determining whether such purpose. It has been disposed of in locations, and
the plan submittals provide for Procedures for the use of ASTM in a manner, that is designed to be
reasonably practicable separation of Method D6866 are detailed in 40 CFR permanent. For example, modern
recyclables EPA will consider: (1) The 80.1426(f)(9) of todays rule. We landfills are placed over impermeable
extent and nature of recycling that may solicited comment on this method, and liners and sealed with a permanent cap.
have occurred prior to receipt of the while the context of the discussion of In addition, the food and yard waste
MSW material by the renewable fuel method D6866 was with respect to present in a landfill has over time
producer, (2) available recycling using it for gasoline (see 74 FR 24951), become intermingled with other
materials to an extraordinary extent. each facility owned by the producer or feedstocks, facilities, and products, in
This occurs in the process of waste importer. More detailed information on order to implement and enforce the
collection, shipment, and disposal, and the renewable fuel production facility, program and have confidence that
subsequently through waste decay, such as production capacity and producers and importers are properly
leaching and movement within the process, feedstocks, and products was categorizing their fuel and generating
landfill. Additionally, we note that the not required for most producers or RINs. The registration procedures will
process of biogas formation in a landfill importers to generate RINs under RFS1 be integrated with the new EPA
provides some element of separation, in (producers of cellulosic biomass ethanol Moderated Transaction System,
that it is formed only from the biogenic and waste-derived ethanol are the discussed in detail in Section III.A of
components of landfill material, exception to this). this preamble.
including but not strictly limited to food Additionally, EPA recommends
companies register their renewable fuels 1. Domestic Renewable Fuel Producers
and yard waste. Thus, plastics, metal
and glass are effectively separated out or fuel additives under title 40 CFR part Information on products, feedstocks,
through the process of biogas formation. 79 as a motor vehicle fuel. In fact, and facilities contained in a producers
As a result of the intermixing of wastes, renewable fuels intended for use in registration will be used to verify the
the fact that biogas is formed only from motor vehicles will be required to be validity of RINs generated and their
the biogenic portion of landfill material, registered under title 40 CFR part 79 proper categorization as either cellulosic
and the fact that landfill material is as prior to any introduction into biofuel, biomass-based diesel, advanced
a practical matter inaccessible for commerce. Manufacturers and biofuel, or other renewable fuel. In
further separation, EPA believes that no subsequent parties of fuels and fuel addition, producers of renewable fuel
further practical separation is possible additives not registered under part 79 from facilities that qualify for the
for landfill material and biogas should will be liable for separate penalties exemption from the 20% GHG reduction
be considered as produced from under 40 CFR parts 79 and 80 in the threshold (as discussed in Section
separated yard and food waste for event their unregistered product is II.B.3) must provide information that
purposes of EISA. Therefore, all biogas introduced into commerce for use in a demonstrates when the facility
from landfills is eligible for RIN motor vehicle. Further if a registered commenced construction, and that
generation. fuel or fuel additive is used in manner establishes the baseline volume of the
We have considered whether to that is not consistent with their fuel. For those facilities that would
require biogas producers to use ASTM products registration under part 79 the qualify as grandfathered but are not in
Method D6866 to identify the biogenic manufacturer and subsequent parties operation we are allowing until May 1,
versus non-biogenic fractions of the will be liable for penalties under parts 2013 to submit and receive approval for
fuel. However, as noted above, biogas is 79 and 80. If EPA determines based on a complete facility registration. This
not formed from non-biogenic the companys registration that they are provision does not require actual fuel
compounds in landfills. (Kaplan, et al., not producing renewable fuel, the production, but simply the filing of
2009) 9 Thus, no purpose would be company will not be able to generate registration materials that assert a claim
solved in using the ASTM method in RINs and the RINs generated for fuel for exempt status. It will benefit both
the biogas context. produced from nonrenewable sources fuel producers, who will likely be able
will be invalidated. to more readily collect the required
C. Expanded Registration Process for Due to the revised definitions of information if it is done promptly, and
Producers and Importers renewable fuel under EISA, we EPA enforcement personnel seeking to
In order to implement and enforce the proposed to expand the registration verify the information. However, given
new restrictions on qualifying process for renewable fuel producers the potentially significant implications
renewable fuel under RFS2, we are and importers in order to implement the of this requirement for facilities that
revising the registration process for new program effectively. We received a may qualify for the exemption but miss
renewable fuel producers and importers. number of comments that opposed the the registration deadline, the rule also
Under the RFS1 program, all producers expanded registration as commenters provides that EPA may waive the
and importers of renewable fuel who deemed it overly burdensome, costly requirement if it determines that the
produce or import more than 10,000 and unnecessary. However, EPA is submission is verifiable to the same
gallons of fuel annually must register finalizing the proposed expanded extent as a timely-submitted
with EPAs fuels program prior to registration requirements for the registration.
generating RINs. Renewable fuel following reasons. The information to be With respect to products, we are
producer and importer registration collected through the expanded requiring that producers provide
under the RFS1 program consists of registration process is essential to information on the types of renewable
filling out two forms: 352020A (Fuels generating and assigning a certain fuel and co-products that a facility is
Programs Company/Entity Registration), category of RIN to a volume of fuel. capable of producing. With respect to
which requires basic contact Additionally, the information collected feedstocks, we are requiring producers
information for the company and basic is essential to determining whether the to provide to EPA a list of all the
business activity information and 3520 feedstock used to produce the fuel different feedstocks that a renewable
20B (Gasoline Programs Facility meets the definition of renewable fuel producers facility is likely to use
Registration) or 352020B1 (Diesel biomass, whether the lifecycle to convert into renewable fuel. With
Programs Facility Registration), which greenhouse gas emissions of the fuel respect to the producers facilities, two
require basic contact information for meets a certain GHG reduction types of information must be reported to
threshold and, in some cases, whether the Agency. First, producers must
9 Kaplan, et al. (2009). Is it Better to Burn or Bury the renewable fuel production facility is describe each facilitys fuel production
Waste for Clean Electricity Generation? considered to be grandfathered into the processes (e.g., wet mill, dry mill,
Environmental Science & Technology 2009 43(6), program. Therefore, we are requiring thermochemical, etc.), and thermal/
17111717 (Found in Table S1 of supplemental
material to the article, at http://pubs.acs.org/doi/
producers, including foreign producers, process energy source(s). Second, in
suppl/10.1021/es802395e/suppl_file/ and importers that generate RINs to order to determine what production
es802395e_si_001.pdf). provide us with information on their volumes would be grandfathered and
thus deemed to be in compliance with 2. Foreign Renewable Fuel Producers Section II.D.2.b describes the RIN
the 20% GHG threshold, we are Under RFS1, foreign renewable fuel generating restrictions and requirements
requiring evidence and certification of producers of cellulosic biomass ethanol for importers under RFS2.
the facilitys qualification under the and waste-derived ethanol may apply to 4. Process and Timing
definition of commence construction EPA to generate RINs for their own fuel.
as well as information necessary to We are making forms for expanded
For RFS2, we proposed that foreign registration for renewable fuel
establish its renewable fuel baseline producers of renewable fuel meet the
volume per the requirement outlined in producers and importers, as well as
same requirements as domestic forms for registration of other regulated
Section II.B.3 of this preamble. producers, including registering
EPA proposed to require that parties, available electronically with the
information about their feedstocks, publication of this final rule. Paper
renewable fuel producers have a third-
facilities, and products, as well as registration forms will only be accepted
party engineering review of their
submitting an on-site independent in exceptional cases. Registration forms
facilities prior to generating RINs under
RFS2, and every 3 years thereafter. EPA engineering review of their facilities at must be submitted and accepted by the
received comments that the on-site the time of registration for the program EPA by July 1, 2010, or 60 days prior to
engineering review was overly and every three years thereafter. These a producer producing or importer
burdensome, unnecessary and costly. A requirements apply to all foreign importing any renewable fuel,
number of commenters noted that the renewable fuel producers who plan to whichever dates come later. If a
time allotted for conducting the reviews, export their products to the U.S. as part producer changes its fuel pathway
between the rules publication and prior of the RFS2 program, whether the (feedstock, production process, or fuel
to RIN generation, is not adequate for foreign producer generates RINs for type) to not listed in his registration
producers to hire an engineer and their fuel or an importer does. information on file with EPA but the
conduct the review for all of their Foreign producers, like domestic change will not incur a change of RIN
facilities. Several commenters requested producers, must also undergo an category for the fuel (i.e., a change in the
that on-site licensed engineers be independent engineering review of their appropriate D code), the producer must
allowed to conduct any necessary facilities, conducted by an independent update his registration information
facility reviews. third party who is a licensed within seven (7) days of the change.
EPA is finalizing the proposed professional engineer (P.E.), or foreign However, if the fuel producer changes
requirement for an on-site engineering equivalent who works in the chemical its fuel pathway in a manner that would
review of facilities producing renewable engineering field. The independent result in a change in its RIN category
fuel due to the variability of production third party must provide to EPA (and thus a new D code), such an update
facilities, the increase in the number of documentation of his or her would need to be submitted at least 60
categories of renewable fuels, and the qualifications as part of the engineering days prior to the change, followed by
importance of ensuring that RINs are review, including proof of appropriate submittal of a complete on-site
generated in the correct category. P.E. license or foreign equivalent. The independent engineering review of the
Without these engineering reviews, we third-party engineering review must be producers facility also within 60 days
do not believe it would be possible to conducted by both foreign producers of the change. If EPA finds that these
implement the RFS2 program in a who plan to generate RINs and those deadlines and requirements have not
manner that ensured the requirements that dont generate RINs but anticipate been met, or that a facilitys registered
of EISA were being fulfilled. their fuel will be exported to the United profile, dictated by the various
Additionally, the engineering review States by an importer who will generate parameters for product, process and
provides a check against fraudulent RIN the RINs. feedstock, does not reflect actual
generation. In order to establish the 3. Renewable Fuel Importers products produced, processes
proper basis for RIN generation, we are employed, or feedstocks used, then EPA
requiring that every renewable fuel We are requiring importers who reserves the right to void, ab initio, any
producer have the on-site engineering generate RINs for imported fuel that affected RINs generated and may impose
review of their facility performed in they receive without RINs may only do significant penalties. For example a
conjunction with his or her initial so under certain circumstances. If an newly registered (i.e. not grandfathered)
registration for the new RFS program. importer receives fuel without RINs, the ethanol production facility claims in
The engineering reviews must be importer may only generate RINs for their registration that they qualify to
conducted by independent third parties that fuel if they can verify the fuel generate RINs based upon the use of two
who can maintain impartiality and pathway and that feedstocks use meet advanced engineering practices (1) corn
objectivity in evaluating the facilities the definition of renewable biomass. An oil fractionation and (2) production of
and their processes. Additionally, the importer must rely on his supplier, a wet DGS co-product that is, at a
on-site engineering review must be foreign renewable fuel producer, to minimum, 35% of its total DGS
conducted every three years thereafter provide documentation to support any produced annually. However, during an
to verify that the fuel pathways claims for their decision to generate audit of the producers records, it is
established in the initial registration are RINs. An importer may have an found that of all their DGS produced,
still applicable. These requirements agreement with a foreign renewable fuel less than 15% was wet. In this example,
apply unless the renewable fuel producer for the importer to generate the producer has committed a violation
producer updates its facility registration RINs if the foreign producer has not that results in the disqualification of
information to qualify for a new RIN done so already. However, the foreign their eligibility to generate RINs; that is,
category (i.e., D code), in which case the renewable fuel producer must be they no longer have an eligible pathway
review needs to be performed within 60 registered with EPA and must have had that demonstrates qualification with the
days of the registration update. Finally, a third-party engineering review 20% GHG threshold requirement for
producers are required to submit a copy conducted, as noted above, in order for corn ethanol producers. As such any
of their independent engineering review EPA to be able to verify that the and all RINs produced may be deemed
to EPA, for verification and enforcement renewable biomass and GHG reduction invalid and the producer may be subject
purposes. requirements of EISA are being fulfilled. to Clean Air Act penalties.
The required independent ethanol was consistent with the sections aforementioned changes brought about
engineering review as discussed above of EPAct that provided extra credit for by EISA as support for a straight volume
for domestic and foreign renewable fuel cellulosic and waste-derived renewable approach to Equivalence Values, and
producers is an integral part of the fuels, and the direction that EPA argued that it had always been the
registration process. The agency establish appropriate credit for intent of Congress that the statutory
recognizes, through comments received, biodiesel and renewable fuel volumes in volume mandates be treated as straight
that there are significant concerns excess of the mandated volumes. We volumes. Stakeholders taking this
involving timing necessary and ability also noted that the use of Equivalence position were generally producers of
to produce a completed engineering Values based on energy content was an corn ethanol. However, a broad group of
review to satisfy registration appropriate measure of the extent to other stakeholders including refiners,
requirements. Since the publication of which a renewable fuel would replace biodiesel producers, a broad group of
the RFS2 NPRM, we have delivered or reduce the quantity of petroleum or advanced biofuel producers, fuel
consistently a message stating that other fossil fuel present in a fuel distributor and States indicated that the
advanced planning and preparation was mixture. EPA stated that these first option for an energy-based
necessary from all parties, EPA and the provisions indicated that Congress did approach to Equivalence Values was
regulated community inclusive, for not intend to restrict EPA discretion in both supported by the statute and
successful implementation of this implementing the program to utilizing a necessary to provide for equitable
program. In an effort to reduce demand straight volume measurement of gallons. treatment of advanced biofuels. They
on engineering resources, we are See 72 FR 2391823920, and 71 FR noted that EISA did not change certain
allowing grandfathered facilities an 5557055571. The result was an of the statutory provisions EPA looked
additional six months to submit their Equivalence Value for ethanol of 1.0, for to for support under RFS1 in
engineering review. This will direct the butanol of 1.3, for biodiesel (mono alkyl establishing Equivalence Values based
focus of engineering review resources ester) of 1.5, and for non-ester on relative volumetric energy content in
on producers of advanced, cellulosic renewable diesel of 1.7. comparison to ethanol. For instance,
and biomass based diesel. EPA fully In the NPRM we noted that EISA CAA 211(o) continues to direct EPA to
expects these producers of advanced made a number of changes to CAA determine an appropriate credit for
renewable fuels to meet the engineering section 211(o) that impacted our biodiesel, and also directs EPA to
review requirement; however, if they are consideration of Equivalence Values in determine the appropriate amount of
having difficulties producing engineers the context of the RFS2 program. For credit for renewable fuel use in excess
reports prior to April 1, we ask that they instance, EISA eliminated the 2.5-to-1 of the required volumes. Had Congress
contact us. credit for cellulosic biomass ethanol and intended to change these provisions
waste-derived ethanol and replaced this they could have easily done so.
D. Generation of RINs provision with large mandated volumes Moreover, some stakeholders argued
Under RFS2, each RIN will continue of cellulosic biofuel and advanced that the existence of four standards is
to be generated by the producer or biofuels. EISA also expanded the not a sufficient reason to eliminate the
importer of the renewable fuel, as in the program to include four separate use of energy-based Equivalence Values
RFS1 program. In order to determine the categories of renewable fuel (cellulosic for RFS2. The four categories are
number of RINs that must be generated biofuel, biomass-based diesel, advanced defined in such a way that a variety of
and assigned to a batch of renewable biofuel, and total renewable fuel) and
fuel, the actual volume of the batch of different types of renewable fuel could
included GHG thresholds in the
renewable fuel must be multiplied by qualify for each category, such that no
definitions of each category. Each of
the appropriate Equivalence Value. The single specific type of renewable fuel
these categories of renewable fuel has its
producer or importer must also will have a guaranteed market. For
own volume requirement, and thus
determine the appropriate D code to example, the cellulosic biofuel
there will exist a guaranteed market for
assign to the RIN to identify which of requirement could be met with both
each. As a result of these new
the four standards the RIN can be used cellulosic ethanol or cellulosic diesel.
requirements, we indicated that there
to meet. This section describes these As a result, the existence of four
may no longer be a need for additional
two aspects of the generation of RINs. standards under RFS2 does not obviate
incentives for certain fuels in the form
Other aspects of the generation of RINs, the value of standardizing for energy
of Equivalence Values greater than 1.0.
such as the definition of a batch, as well In the NPRM we co-proposed and content, which provides a level playing
as the assignment of RINs to batches, took comment on two options for field under RFS1 for various types of
will remain unchanged from the RFS1 Equivalence Values: renewable fuels based on energy
requirements. We received several 1. Equivalence Values would be based content.
comments regarding the method for on the energy content and renewable Some stakeholders who supported an
calculating temperature standardization content of each renewable fuel in energy-based approach to Equivalence
of biodiesel and address this issue in comparison to denatured ethanol, Values also argued that a straight
Section III.G. consistent with the approach under volume approach would be likely to
RFS1, with the addition that biomass- create a disincentive for the
1. Equivalence Values development of new renewable fuels
based diesel standard would be based
For RFS1, we interpreted CAA section on energy content in comparison to that have a higher energy content than
211(o) as allowing us to develop biodiesel. ethanol. For a given mass of feedstock,
Equivalence Values representing the 2. All liquid renewable fuels would be the volume of renewable fuel that can be
number of gallons that can be claimed counted strictly on the basis of their produced is roughly inversely
for compliance purposes for every measured volumes, and the Equivalence proportional to its energy content. For
physical gallon of renewable fuel. We Values for all renewable fuels would be instance, one ton of biomass could be
described how the use of Equivalence 1.0 (essentially, Equivalence Values gasified and converted to syngas, which
Values adjusted for renewable content would no longer apply). could then be catalytically reformed
and based on energy content in In response to the NPRM, some into either 80 gallons of ethanol (and
comparison to the energy content of stakeholders pointed to the another 14 gal of other alcohols) or 50
gallons of diesel fuel (and naphtha).10 If impact on the physical volume will provisions in the Food, Conservation,
RINs were assigned on a straight volume depend on actual volumes of various and Energy Act of 2008, we have since
basis, the producer could maximize the advanced biofuels produced in the determined that the denaturant content
number of RINs he is able to generate future. The main scenario modeled for of ethanol should be assumed to be 2%
and sell by producing ethanol instead of this final rule includes a forecast for rather than the 5% used in the RFS1
diesel. Thus, even if the market would considerable volumes of relatively high program. This additional change results
otherwise lean towards demanding energy diesel fuel made from renewable in a denatured ethanol energy content of
greater volumes of diesel, the greater biomass, and still results in a physical 77,000 Btu/gal and a renewable content
RIN value for producing ethanol may volume mandate of 30.5 billion gallons. of denatured ethanol of 97.2%.11 The
favor their production instead. The energy-based approach results in value of 77,000 Btu/gal will be used to
However, if the energy-based the advanced biofuel standard being convert biogas and renewable electricity
Equivalence Values were maintained, automatically met during the first few into volumes of renewable fuel under
the producer could assign 1.7 RINs to years of the program. For instance, the RFS2. This change also affects the
each gallon of diesel made from biomass biomass-based diesel mandated volume formula for calculating Equivalence
in comparison to 1.0 RIN to each gallon for 2010 is 0.65 billion gallons, which Values assigned to renewable fuels. The
of ethanol from biomass, and the total will be treated as 0.975 billion gallons new formula is shown below:
number of RINs generated would be (1.5 0.65) in the context of meeting the EV = (R/0.972) * (EC/77,000)
essentially the same for the diesel as it advanced biofuel standard. Since the Where:
would be for the ethanol. The use of mandated volume for advanced biofuel EV = Equivalence Value for the renewable
energy-based Equivalence Values could in 2010 is 0.95 billion gallons, this fuel, rounded to the nearest tenth.
thus provide a level playing field in requirement is automatically met by R = Renewable content of the renewable fuel.
terms of the RFS programs incentives to compliance with the biomass-based This is a measure of the portion of a
produce different types of renewable diesel standard. renewable fuel that came from a
fuel from the available feedstocks. The Although we are finalizing an energy- renewable source, expressed as a
market would then be free to choose the based approach to Equivalence Values, percent, on an energy basis.
we believe that Congress intended the EC = Energy content of the renewable fuel,
most appropriate renewable fuels
biomass-based diesel volume mandate in Btu per gallon (lower heating value).
without any bias imposed by the RFS
regulations, and the costs imposed on to be treated as diesel volumes rather Under this new formula, Equivalence
different types of renewable fuel than as ethanol-equivalent volumes. Values assigned to specific types of
through the assignment of RINs would Since all RINs are generated based on renewable fuel under RFS1 will
be more evenly aligned with the ability energy equivalency to ethanol, to continue unchanged under RFS2.
of those fuels to power vehicles and accomplish this, we have modified the However, non-ester renewable diesel
engines, and displace fossil fuel-based formula for calculating the standard for will be required to have a lower energy
gasoline or diesel. Since the biomass-based diesel to compensate content of at least 123,500 Btu/gal in
technologies for producing more energy- such that one physical gallon of order to qualify for an Equivalence
dense fuels such as cellulosic diesel are biomass-based diesel will count as one Value of 1.7. A non-ester renewable
still in the early stages of development, gallon for purposes of meeting the diesel with a lower energy content
they may benefit from not having to biomass-based diesel standard, but will would be required to apply for a
overcome the disincentive in the form of be counted based on their Equivalence different Equivalent Value according to
the same Equivalence Value based on Value for purposes of meeting the the provisions in 80.1415.
straight volume. advanced biofuel and total renewable
fuel standards. Since it is likely that the 2. Fuel Pathways and Assignment of D
Based on our interpretation of EISA as
statutory volume mandates were based Codes
allowing the use of energy-based
Equivalence Values, and because we on projections for biodiesel, we have As described in Section II.A, RINs
believe it provides a level playing field chosen to use the Equivalence Value for under RFS2 would in general continue
for the development of different fuels biodiesel, 1.5, in this calculation. See to have the same number of digits and
that can displace the use of fossil fuels, Section II.E.1.a for further discussion. code definitions as under RFS1. The one
and that this approach therefore furthers Other diesel fuel made from renewable change will be that, while the D code
the energy independence goals of EISA, biomass can also qualify as biomass- will continue to identify the standard to
we are finalizing the energy-based based diesel (e.g., renewable diesel, which the RIN can be applied, it will be
approach to Equivalence Values in cellulosic diesel). But since the modified to have four values
todays action. We also note that a large variation in energy content between corresponding to the four different
number of companies have already them is relatively small, variation in the renewable fuel categories defined in
total physical volume of biomass-based EISA. These four D code values and the
made investments based on the
diesel will likewise be small. corresponding categories are shown in
decisions made for RFS1, and using
In the NPRM we also proposed that Table II.A1.
energy-based Equivalence Values will the energy content of denatured ethanol
maintain consistency with RFS1 and In order to generate RINs for
be changed from the 77,550 Btu/gal renewable fuel that meets the various
ease the transition into RFS2. Insofar as value used in the RFS1 program to
renewable fuels with volumetric energy eligibility requirements (see Section
77,930 Btu/gal (lower heating value). II.B), a producer or importer must know
contents higher than ethanol are used, The revised value was intended to
the actual volumes of renewable fuel which D code to assign to those RINs.
provide a more accurate estimate of the
that are necessary to meet the EISA Following the approach we described in
energy content of pure ethanol, 76,400
volume mandates will be smaller than the NPRM, a producer or importer will
Btu/gal, rather than the rounded value
those shown in Table I.A.11. The determine the appropriate D code using
of 76,000 Btu/gal that was used under
a lookup table in the regulations. The
10 Another example would be a fermentation
RFS1. Except for the Renewable Fuels
process in which one ton of cellulose could be used
Association who supported this change, 11 Value is lower than 98% because it is based on
to produce either 70 gallons of ethanol or 55 gallons most stakeholders did not comment on energy content of denaturant versus ethanol, not
of butanol. this proposal. However, based on new relative volume.
lookup table lists various combinations contaminants. These contaminants may For producers for whom none of the
of fuel type, production process, and have been intentionally added to defined fuel pathways in the lookup
feedstock, and the producer or importer promote cultivation (e.g., pesticides, table apply, a producer can still generate
chooses the appropriate combination herbicides, fertilizer) or transport (e.g., RINs if he meets the criteria for
representing the fuel he is producing nylon baling rope). In addition, there grandfathered or deemed compliant
and for which he is generating RINs. may be some incidental contamination status as described in Section II.B.3 and
Parties generating RINs are required to of a particular load of feedstocks with his fuel meets the definition of
use the D code specified in the lookup co-product during feedstock production, renewable fuel as described in Section
table and are not permitted to use a D or with other agricultural materials II.B.1. In this case he would use a D
code representing a broader renewable during shipping. For example, there code of 6 for those RINs generated under
fuel category. For example, a party may be incidental corn kernels the grandfathering or deemed compliant
whose fuel qualified as biomass-based remaining on some corn cobs used to provisions.
diesel could not choose to categorize produce cellulosic biofuel, or some A diesel fuel product produced from
that fuel as advanced biofuel or general sorghum kernels left in a shipping cellulosic feedstocks that meets the 60%
renewable fuel for purposes of RIN container that are introduced into a load GHG threshold can qualify as either
generation.12 of corn kernels being shipped to a cellulosic biofuel or biomass-based
This section describes our approach biofuel production facility. The final diesel. In the NPRM, we proposed that
to the assignment of D codes to RINs for regulations clarify that in assigning D the producer of such cellulosic diesel
domestic producers, foreign producers, codes for renewable fuel, producers and be required to choose whether to
and importers of renewable fuel. importers should disregard the presence categorize his product as either
Subsequent sections address the of incidental contaminants in their cellulosic biofuel or biomass-based
generation of RINs in special feedstocks if the incidental diesel. However, we requested comment
circumstances, such as when a contaminants are related to customary on an alternative approach in which an
production facility has multiple feedstock production and transport, and additional D code would be defined to
applicable combinations of feedstock, are impractical to remove and occur in represent cellulosic diesel allowing the
fuel type, and production process de minimus levels. cellulosic diesel RIN to be sold into
within a calendar year, production Through our assessment of the either market. As described more fully
facilities that co-process renewable lifecycle GHG impacts of different in Section II.A above, we are finalizing
biomass and fossil fuels, and production pathways and the application of the this alternative approach in todays final
facilities for which the lookup table
EISA definitions for each of the four rule. Producers or importers of a fuel
does not provide an applicable D code.
categories of renewable fuel, including that qualifies as both biomass-based
a. Producers the GHG thresholds, we have diesel and cellulosic biofuel must use a
For both domestic and foreign determined that all four categories will D code of 7 in the RINs they generate,
producers of renewable fuel, the lookup have pathways that could be used to and will thus have the flexibility of
table identifies individual fuel meet the Acts volume requirements. marketing such RINs to parties seeking
pathways comprised of unique For example, ethanol made from corn either cellulosic biofuel or biomass-
combinations of the type of renewable stover or switchgrass in an enzymatic based diesel RINs, depending on market
fuel being produced, the feedstock used hydrolysis process will count as demand. Obligated parties can apply
to produce the renewable fuel, and a cellulosic biofuel. Biodiesel made from RINs with a D code of 7 to either their
description of the production process. waste grease or soybean oil can count as cellulosic biofuel or biomass-based
Each pathway is assigned to one of the biomass-based diesel. Ethanol made diesel RVOs, but not both.
D codes on the basis of the revised from sugarcane sugar will count as In addition to the above comments,
renewable fuel definitions provided in advanced biofuel. Finally, a variety of we received comments requesting that
EISA and our assessment of the GHG pathways will count as renewable fuel the use of biogas as process heat in the
lifecycle performance for that pathway. under the RFS2 program. The complete production of ethanol, should not be
A description of the lifecycle list of pathways that are valid under our limited to use at the site of renewable
assessment of each fuel pathway and the final RFS2 program is discussed in fuel production. Specifically,
process we used for determining the Section V.C and are provided in the commenters point out that the
associated D code can be found in regulations at 80.1426(f). introduction of gas produced from
Section V. Producers must choose the landfills or animal wastes to fungible
Note that the generation of RINs also appropriate D code from the lookup pipelines is the only practical manner
requires as a prerequisite that the table in the regulations based on the fuel for most renewable fuel facilities to
feedstocks used to make the renewable pathway that describes their facility. acquire and use landfill gas, since very
fuel meet the definition of renewable The fuel pathway must be specified by few are located adjacent to landfills, or
biomass as described in Section II.B.4, the producer in the registration process have dedicated pipelines from landfill
including applicable land use as described in Section II.C. If there are gas operations to their facilities.13 The
restrictions. If a producer is not able to changes to a producers facility or commenters suggested that ethanol
demonstrate that his feedstocks meet the feedstock such that their fuel would plants causing landfill gas to be
definition of renewable biomass, RINs require a D code that was different from introduced into a fungible gas pipeline
cannot be generated. However, as noted any D code(s) which their existing be allowed to claim those volumes. The
in Section II.B.4.b.1, feedstocks registration information already alternative would be to allow landfill
typically include incidental allowed, the producer is required to

revise its registration information with 13 This suggestion was also made by several
12 However, a biomass-based diesel RIN can be EPA 30 days prior to changing the companies with respect to the RFS1 definition of
used to satisfy Renewable Volume Obligations applicable D code it uses to generate cellulosic biomass ethanol, which allowed corn-
(RVO) for biomass-based diesel, advanced biofuel, based ethanol to be deemed cellulosic if 90% of the
and total renewable fuel. See Section II.G.3 for
RINs. Situations in which multiple fuel fossil fuel used at the ethanol facility to make
further discussion of the use of RINs for compliance pathways could apply to a single facility ethanol was displaced by fuel derived from animal
purposes. are addressed in Section II.D.3 below. or other waste materials, including landfill gas.
gas that is only used onsite to be electricity generated by the qualifying the importer can import biofuel but
counted in establishing the pathway. biogas, for the purpose of computing cannot generate RINs to represent that
We believe that the suggested RINs. biofuel.
approach has merit. We agree that it We are also providing for those 1. The imported renewable fuel is not
does not make any difference in terms situations in which biogas or renewable accompanied by RINs generated by the
of the beneficial environmental electricity is provided directly to the registered foreign producer
attributes associated with the use of transportation facility, rather than using 2. The importer obtains from the
landfill gas whether the displacement of a commercial distribution system such foreign producer:
fossil fuel occurs in a fungible natural as pipelines or transmission lines. For Documentation demonstrating that
gas pipeline, or in a specific facility that both casesdedicated use and the renewable biomass definition has
draws gas volume from that pipeline. In commercial distributionproducers been met for the volume of renewable
fact, a similar approach is widely used must provide contractual evidence of fuel being imported.
with respect to electricity generated by the production and sale of such fuel, Documentation about the feedstock
renewable biomass that is placed into a and there are also reporting and and production process used to
commercial electricity grid. A party recordkeeping requirements to be produce the renewable fuel to allow
buying the renewable power is credited followed as well. the importer to determine the
with doing so in state renewable Presently, there is no D code for appropriate D-code designation in the
portfolio programs even though the electricity that is produced from RINs generated.
power from these sources is placed in renewable biomass. The petition process We are also finalizing additional
the fungible grid and the electrons for assigning such codes in todays rule requirements for foreign producers who
produced by a renewable source may can be used for such purpose. either generate RINs or provide
never actually be used by the party documentation to an importer sufficient
b. Importers
purchasing it. In essence these programs to allow the importer to generate RINs.
assume that the renewable power For imported renewable fuel under As described more fully in the next
purchased and introduced into the grid RFS2, we are anticipating the importer section, these additional requirements
is in fact used by the purchaser, even to be the primary party responsible for include restrictions on mixing of
though all parties acknowledge that use generating RINs. However, the foreign biofuels in the distribution system as it
of the actual renewable-derived producer of renewable fuel can instead travels from the foreign producer to the
electrons can never be verified once elect to generate RINs themselves under importer.
placed in the fungible grid. We believe certain conditions as described more Finally, EPA is assessing whether
that this approach will ultimately fully in Section II.D.2.c below. This additional requirements on foreign-
further the GHG reduction and energy approach is consistent with the generated fuel may be necessary for
security goals of RFS2. approach under RFS1. situations in which importers are
Producers may therefore take into Under RFS1, importers who import generating RINs for the fuel. Additional
account such displacement provided more than 10,000 gallons in a calendar requirements may be necessary to
that they demonstrate that a verifiable year were required to generate RINs for ensure that the importers have sufficient
contractual pathway exists and that all imported renewable fuel based on its information to properly generate the
such pathway ensures that (1) a specific type, except for cases in which the RINs and that EPA has sufficient
volume of landfill gas was placed into foreign producer generated RINs for information to determine whether those
a commercial pipeline that ultimately cellulosic biomass ethanol or waste- RINs have been legitimately generated.
serves the transportation fueling facility derived ethanol. Due to the new EPA will pursue an amendment to the
and (2) that the drawn into this facility definitions of renewable fuel and final RFS2 regulations if we find that
from that pipeline matches the volume renewable biomass in EISA, importers additional requirements are appropriate
of landfill gas placed into the pipeline can no longer generate RINs under RFS2 and necessary.
system. Thus facilities using such a fuel on the basis of fuel type alone. Instead,
they must be able to demonstrate that c. Additional Provisions for Foreign
pathway may then use an appropriate D Producers
code for generation of RINs. the renewable biomass definition has
This approach also applies to biogas been met for the renewable fuel they In general, we are requiring foreign
and electricity made from renewable intend to import and for which they will producers of renewable fuel to meet the
fuels and which are used for generate RINs. They must also have same requirements as domestic
transportation. Producers of such fuel sufficient information about the producers with respect to registration,
will be able to generate RINs, provided feedstock and process used to make the recordkeeping and reporting, attest
that a contractual pathway exists that renewable fuel to allow them to identify engagements, and the transfer of RINs
provides evidence that specific the appropriate D code from the lookup they generate with the batches of
quantities of the renewable fuel (either table for the RINs they generate. renewable fuel that those RINs
biogas or electricity) was purchased and Therefore, in order to generate RINs, the represent. However, we are also placing
contracted to be delivered to a specific importer will be required to obtain this additional requirements on foreign
transportation fueling facility.14 We information from a foreign producer. producers to ensure that RINs entering
specify that the pipeline (or RINs can only be generated if a the U.S. are valid and that the
transmission line) system must demonstration is made that the regulations can be enforced at foreign
ultimately serve the subject facility. For feedstocks used to produce the facilities. These additional requirements
renewable fuel meet the definition of are designed to accommodate the more
electricity that is produced by the co-

firing of fossil fuels with renewable renewable biomass. limited access that EPA enforcement
biomass derived fuels, we are requiring In summary, under todays final rule, personnel have to foreign entities that
that the resulting electricity is pro-rated importers can import any renewable are regulated parties under RFS2, and
to represent only that amount of fuel, but can only generate RINs to also the fact that foreign-produced
represent the imported renewable fuel biofuel intended for export to the U.S.
14 Note that biogas used for transportation fuel under the two conditions described is often mixed with biofuel that will not
includes propane made from renewable biomass. below. If these conditions do not apply, be exported to the U.S.
Under RFS1, foreign producers had required to strictly segregate a batch of recordkeeping, reporting, or attest
the option of generating RINs for the renewable fuel and its associated RINs engagement requirements.
renewable fuel that they export to the from all other volumes of renewable fuel
3. Facilities With Multiple Applicable
U.S. if they wanted to designate their as it travels from the foreign producer to
Pathways
fuel as cellulosic biomass ethanol or the importer. The strict segregation
waste-derived ethanol, and thereby take ensures that RINs entering the U.S. If a given facilitys operations can be
advantage of the additional 1.5 credit appropriately represent the renewable fully represented by a single pathway,
value afforded by the 2.5 Equivalence fuel imported into the U.S. both in then a single D code taken from the
Value for such products. In order to terms of renewable fuel type and lookup table will be applicable to all
ensure that EPA had the ability to volume. RINs generated for fuel produced at that
enforce the regulations relating to the facility. However, we recognize that this
Several commenters requested that in
generation of RINs from such foreign will not always be the case. Some
general the importer be the RIN
ethanol producers, the RFS1 regulations facilities use multiple feedstocks at the
generator for imported renewable fuel.
specified additional requirements for same time, or switch between different
Since most imported ethanol is
them, including posting a bond, feedstocks over the course of a year. A
currently made in Brazil and is not
admitting EPA enforcement personnel, facility may be modified to produce the
denatured by the foreign producer, any same fuel but with a different process,
and submitting to third-party
RINs generated must be generated by the or may be modified to produce a
engineering reviews of their production
importer. However, to accomplish this, different type of fuel. Any of these
process. For RFS2, we are maintaining
the importer must obtain the situations could result in multiple
these additional requirements for
appropriate information from a foreign pathways being applicable to a facility,
foreign producers because EPA
producer regarding compliance with the and thus there may be more than one
enforcement personnel have the same
renewable biomass definition and a applicable D code for various RINs
limitations under RFS2 with regard to
description of the associated pathway generated at the facility.
access to foreign entities that are
for the renewable fuel. Under these If more than one pathway applies to
regulated parties as they did under
circumstances, the foreign producer a facility within a compliance period,
RFS1.
EISA also creates other unique must ensure that the information is no special steps will need to be taken
challenges in the implementation and transferred along with the renewable if the D code is the same for all the
enforcement of the renewable fuel fuel through the distribution system applicable pathways. In this case, all
standards for foreign-produced until it reaches the importer. The RINs generated at the facility will have
renewable fuel imported into the U.S. foreign producers volume of renewable the same D code regardless. Such a
Unlike our other fuels programs, EPA fuel need not be strictly segregated from producer with multiple applicable
cannot determine whether a particular other volumes in this case, so long as a pathways must still describe its
shipment of renewable fuel is eligible to volume of chemically indistinguishable feedstock(s), fuel type(s), and
generate RINs under the new program renewable fuel is tracked through the production process(es) in its initial
by testing the fuel itself. Instead, distribution system from the foreign registration and annual report to the
information regarding the feedstock that producer to the importer, and the Agency so that we can verify that the D
was used to produce renewable fuel and information needed by the importer to code used was appropriate.
the process by which it was produced generate RINs follows this same path However, if more than one pathway
is vital to determining the proper through the distribution system. Strict applies to a facility within a compliance
renewable fuel category and RIN type segregation of the volume is not period and these pathways have been
for the imported fuel under the RFS2 necessary in this case, and the importer assigned different D codes, then the
program. Thus, whether foreign will determine appropriate number of producer must determine which D
producers or importers generate RINs, RINs for the specific volume and type of codes to use when generating RINs.
this information must be collected and renewable fuel that he imports. There are a number of different ways
maintained by the RIN generator. Finally, if a foreign producer chooses that this could occur. For instance, a
If a foreign producer generates RINs not to participate in the RFS2 program producer could change feedstocks,
for renewable fuel that it produces and and thus neither generates RINs nor production processes, or the type of fuel
exports to the U.S., we are requiring that provides information to the importer so he produces in the middle of a
ethanol must be dewatered and that the importer can generate RINs, the compliance period. Or, he could use
denatured by the foreign producer prior foreign producer can still export biofuel more than one feedstock or produce
to leaving the production facility and to the U.S. However, under these more than one fuel type simultaneously.
prior to the generation of RINs. This is circumstances the biofuel would not be The approach we are finalizing for
consistent with our definition of renewable fuel under RFS2, no RINs designating D codes for RINs in these
renewable fuel in which ethanol that is could be generated by any party, and cases follows the approach described in
valid under RFS2 must be denatured. thus the foreign producer would not be the NPRM and is summarized in Table
Moreover, the foreign producer is subject to any of the registration, II.D.31.
TABLE II.D.31APPROACH TO ASSIGNING MULTIPLE D CODES FOR MULTIPLE APPLICABLE PATHWAYS

Case/Description Proposed approach
1. The pathway applicable to a facility changes on a specific date, such The applicable D code used in generating RINs must change on the
that one single pathway applies before the date and another single date that the fuel produced changes pathways.
pathway applies on and after the date.
2. One facility produces two or more different types of renewable fuel The volumes of the different types of renewable fuel should be meas-
at the same time. ured separately, with different D codes applied to the separate vol-
umes.
TABLE II.D.31APPROACH TO ASSIGNING MULTIPLE D CODES FOR MULTIPLE APPLICABLE PATHWAYSContinued

Case/Description Proposed approach
3. One facility uses two or more different feedstocks at the same time For any given batch of renewable fuel, the producer should assign the
to produce a single type of renewable fuel. applicable D codes using a ratio (explained below) defined by the
amount of each type of feedstock used.
Commenters were generally 1. Only that fraction of a feedstock generated in such cases, but must be
supportive of this approach to multiple which is expected to be converted into done in such a way that the number of
applicable pathways, and as a result we renewable fuel by the facility can be gallon-RINs corresponds only to the
are finalizing it with few modifications counted in the calculation, taking into renewable portion of the fuel.
from the proposal. Further discussion of account facility conversion efficiency. Under RFS1, we created a provision
the comments we received can be found 2. The producer of the renewable fuel to address the co-processing of
in Section 3.5.4 of the S&A document. is required to designate this fraction renewable crudes along with
Following our proposal, cases listed once each year for the feedstocks petroleum feedstocks to produce a
in Table II.D.31 will be treated as processed by his facility during that gasoline or diesel fuel that is partially
hierarchical, with Case 2 only being year, and to include this information as renewable. See 40 CFR 80.1126(d)(6).
used to address a facilitys part of his reporting requirements. However, this provision would not
circumstances if Case 1 is not 3. Each producer is required to apply in cases where either the
applicable, and Case 3 only being used designate the energy content (in Btu/lb) renewable feedstock or the fossil fuel
to address a facilitys circumstances if once each year of the portion of each of feedstock is a gas (e.g., biogas, natural
Case 2 is not applicable. This approach his feedstocks which is converted into gas) or a solid (e.g., biomass, coal).
covers all likely cases in which multiple fuel. The producer may determine these Therefore, we are eliminating the RFS1
applicable pathways may apply to a values for his own feedstocks, or may provision applicable only to liquid
renewable fuel producer. Some use default values provided in the feedstocks and replacing it with a more
examples of how Case 2 or 3 would regulations at 80.1426(f)(7). comprehensive approach that will apply
4. Each producer is required to to liquid, solid, or gaseous feedstocks
apply are provided in the NPRM.
determine the total mass of each type of and any type of conversion process. In
A facility where two or more different feedstock used by the facility on at least this final approach, producers are
types of feedstock are used to produce a daily basis. required to use the relative energy
a single fuel (such as Case 3 in Table Based on the paucity of comments we content of their renewable and non-
II.D.31) will be required to generate received on this issue, we are finalizing renewable feedstocks to determine the
two or more separate batch-RINs 15 for a the provisions regarding the calculation renewable fraction of the fuel that they
single volume of renewable fuel, and of useable energy content of the produce. This fraction in turn is used to
these separate batch-RINs will have feedstocks as it was proposed in the determine the number of gallon-RINs
different D codes. The D codes will be NPRM. As described in Section II.J, that should be generated for each batch.
chosen on the basis of the different producers of renewable fuel will be Commenters said little about our
pathways as defined in the lookup table required to submit information in their proposed methodology to use the
in 80.1426(f). The number of gallon- reports on the feedstocks they used, relative energy content of the
RINs that will be included in each of the their production processes, and the type feedstocks, and we are therefore
batch-RINs will depend on the relative of fuel(s) they produced during the finalizing it largely as proposed.
amount of the different types of compliance period. This will apply to We also requested comment on
feedstocks used by the facility. In the both domestic producers and foreign allowing renewable fuel producers to
NPRM, we proposed to use the relative producers who export any renewable use an accepted test method to directly
energy content of the feedstocks to fuel to the U.S. We will use this measure the fraction of the fuel that is
determine how many gallon-RINs information to verify that the D codes derived from biomass rather than a
should be assigned to each D code. used in generating RINs were fossil fuel feedstock. For instance,
Commenters generally did not address appropriate. ASTM D6866 is a radiocarbon dating
this aspect of our proposal, and we are test method that can be used to
finalizing it in todays action. Thus, the 4. Facilities That Co-Process Renewable determine the renewable content of
useable energy content of each feedstock Biomass and Fossil Fuels transportation fuel. The use of such a
must be used to divide the total number We expect situations to arise in which test method can be used in lieu of the
of gallon-RINs generated for a batch of a producer uses a renewable feedstock calculation of the renewable portion of
renewable fuel into two or more groups, simultaneously with a fossil fuel the fuel based on the relative energy
each corresponding to a different D feedstock, producing a single fuel that is content of the renewable biomass and
code. Several separate batch-RINs can only partially renewable. For instance, fossil feedstocks. Commenters generally
then be generated and assigned to the biomass might be co-fired with coal in supported the option of using a
single volume of renewable fuel. The a coal-to-liquids (CTL) process that uses radiocarbon dating approach. As a
applicable calculations are given in the Fischer-Tropsch chemistry to make result, we believe it would be
regulations at 80.1426(f)(3). diesel fuel, biomass and waste plastics appropriate and are finalizing a
We proposed several elements of the might be fed simultaneously into a provision to allow parties that co-
calculation of the useable energy catalytic or gasification process to make process renewable biomass and fossil
content of the feedstocks, including the diesel fuel, or vegetable oils could be fuels to choose between using the
following: fed to a hydrotreater along with relative energy in the feedstocks or
petroleum to produce a diesel fuel. In ASTM D6866 to determine the number
15 Batch-RINs and gallon-RINs are defined in the these cases, the diesel fuel will be only of gallon-RINs that should be generated.
regulations at 40 CFR 80.1401. partially renewable. RINs can be Regardless of the approach chosen, the
producer will still need to separately 5. Facilities That Process Municipal renewable biomass provision. Under
verify that the renewable feedstocks Solid Waste this aggregate compliance approach,
meet the definition of renewable As described in Section II.B.4.d, only these producers will be generating RINs
biomass. the separated yard and food waste of for all their renewable fuel. However,
If a producer chose to use the energy municipal solid waste (MSW) are producers who use foreign-grown crops
content of the feedstocks, the considered to be renewable biomass and or crop residue or other feedstocks such
calculation would be similar to the may be used to produce renewable fuels as planted trees or forestry residues will
under the RFS2 program. While not be able to take advantage of this
treatment of renewable fuels with
renewable fuel producers may produce aggregate compliance approach. Instead,
multiple D codes as described in
they will be required to demonstrate
Section II.D.3 above. As shown in the fuel from all organic components of
that their feedstocks meet the renewable
regulations at 80.1426(f)(3), the MSW, they may generate RINs for only
biomass definition, including the
producer would determine the that portion of MSW that qualifies as
associated land use restrictions, before
renewable fuel volume that would be renewable biomass. We are providing
they will be permitted to generate RINs.
assigned RINs based on the amount of two methods for determining the
Absent such a demonstration, these
energy in the renewable feedstock appropriate number of RINs to generate
producers can still produce biofuel but
relative to the amount of energy in the for each batch of fuel, depending on
will not generate RINs. In addition, fuel
fossil feedstock. Only one batch-RIN whether the feedstock is pure food and
producers whose fuel does not qualify
would be generated for a single volume yard waste, or separated municipal solid
as renewable fuel under this program
of fuel produced from both a renewable waste, as described in Section II.B.4.d. because it does not meet the 20% GHG
feedstock and a fossil feedstock, and While not all biogenic material in the threshold (and is not grandfathered) can
this one batch-RIN must be based on the separated MSW is cellulosic, the vast still produce biofuel but will not be
contribution that the renewable majority of it is likely to be in most allowed to generate RINs.
feedstock makes to the total volume of situations. Specifically, separated Transportation fuel consumed in the
fuel. The calculation of the relative municipal solid waste may contain U.S. will therefore be comprised of three
energy contents includes factors that some non-biogenic materials such as groups: fuel subject to the standards
take into account the conversion plastics that were unable to be recycled (gasoline and diesel), fuel for which
efficiency of the plant, and as a result due to market conditions. We are RINs are generated and will be used to
potentially different reaction rates and requiring producers of renewable fuel meet those standards, and RINless
byproduct formation for the various made from separated municipal solid biofuel. RINless biofuel will not be
feedstocks will be accounted for. The waste to use the radiocarbon dating covered under any aspect of the RFS2
relative energy content of the feedstocks method D6866 to calculate the program, despite the fact that in many
is used to adjust the basic calculation of biogenic fraction, presumed to be cases it will meet the EISA definition of
the number of gallon-RINs downward composed of cellulosic materials. transportation fuel upon blending with
from that calculated on the basis of Therefore, unless a renewable fuel gasoline or diesel.
batch fuel volume and the applicable producer is using MSW streams that are In their comments in response to the
Equivalence Value. The D code that clearly not cellulosic, we anticipate that NPRM, several refiners suggested that
must be assigned to the RINs is drawn a D code of either 3 or 7 will be RINless biofuel should be treated as an
from the lookup table in the regulations appropriate for such RINs. See the obligated volume similar to gasoline and
as if the feedstock was entirely regulations at 80.1426(f). diesel, and thus be subject to the
renewable biomass. Thus, for instance, 6. RINless Biofuel standards. Doing so would ensure that
a coal-to-liquids plant that co-processes all transportation fuels are covered
Under the RFS1 program, all under the RFS2 program, consistent
some cellulosic biomass to make diesel
renewable fuel made from renewable with RFS1. Such an approach would
fuel would be treated as a plant that
feedstocks and used as motor vehicle also provide renewable fuel producers
produces only cellulosic diesel for
fuel in the U.S. was assigned RINs. with an incentive to demonstrate that
purposes of identifying the appropriate
Therefore, aside from the very small their feedstocks meet the renewable
D code for the fraction of biofuel that
amounts of biofuel used in nonroad biomass definition and thus generate
qualifies as renewable fuel under EISA.
applications or as heating oil, all RINs for all the biofuel that they
If a producer chose to use D6866, he renewable fuel produced or imported produce. There could be less potential
would be required to either apply this counted towards the mandated volume for market manipulation on the part of
test to every batch, or alternatively to goals of the RFS program. Although biofuel producers who might be
take samples of every batch of fuel he conventional diesel fuel was not subject considering producing RINless biofuel
produced over the course of one month to the standards under RFS1, all other as a means for increasing demand for
and combine them into a single motor vehicle fuel fell into two groups: renewable fuel and RINs.
composite sample. The D6866 test fuel subject to the standards, and fuel Nevertheless, we do not believe that
would then be applied to the composite for which RINs were generated and was it would be appropriate at this time to
sample, and the resulting renewable used to meet those standards. finalize a requirement that RINless
fraction would be applied to all batches Under RFS2, our approach to biofuel be considered an obligated fuel
of fuel produced in the next month to compliance with the renewable biomass subject to the standards. We did not
determine the appropriate number of provision will allow the possibility for propose such an approach in the NPRM,
RINs that must be generated. For the some biofuel to be produced without and as a result many renewable fuel
first month, the producer can estimate RINs. As described in Section II.B.4 producers who could be affected did not
the non-fossil fraction, and then make a above, we are modifying our approach have an opportunity to consider and
correction as needed in the second to compliance with the renewable comment on it. Moreover, the volume of
month. The producer would be required biomass provision so that renewable RINless biofuel is likely to be small
to recalculate the renewable fraction fuel producers using feedstocks from compared to the volume of renewable
every subsequent month. See the domestic planted crops and crop fuel with RINs since RINs have value
regulations at 80.1426(f)(9). residue will be presumed to meet the and producers currently have an
incentive to generate them. However, if and that years standard is adjusted proposal, we believe that such an
in the future RIN values should fallfor accordingly, as discussed below. approach would unnecessarily
instance, if crude oil prices rise high As discussed in the proposal, four complicate the program.
enough and the market drives up separate standards are required under While the required amount of total
demand for biofuelsthe incentive to the RFS2 program, corresponding to the renewable fuel for a given year is
demonstrate compliance with the four separate volume requirements provided by EISA, the Act requires EPA
renewable biomass definition may shown in Table I.A.11. The specific to base the standards on an EIA estimate
decrease and there may be an increase formulas we use to calculate the of the amount of gasoline and diesel that
in the volume of RINless biofuel. Under renewable fuel standards are described will be sold or introduced into
such circumstances it may be below in Section II.E.1. commerce for that year. As discussed in
appropriate to reconsider whether In order for an obligated party to the proposal, EIAs STEO will continue
RINless biofuel should be designated as demonstrate compliance, the percentage to be the source for projected gasoline,
an obligated volume subject to the standards are converted into the volume and now diesel, consumption estimates.
standards. of renewable fuel each obligated party is In order to achieve the volumes of
required to satisfy. This volume of renewable fuels specified in EISA, the
E. Applicable Standards renewable fuel is the volume for which gasoline and diesel volumes used to
The renewable fuel standards are the obligated party is responsible under determine the standard must be the non-
expressed as a volume percentage, and the RFS program, and continues to be renewable portion of the gasoline and
are used by each refiner, blender or referred to as its Renewable Volume diesel pools. Because the STEO volumes
importer to determine their renewable Obligation (RVO). Since there are four include renewable fuel use, we must
fuel volume obligations. The applicable separate standards under the RFS2 subtract the total renewable fuel volume
program, there are likewise four from the total gasoline and diesel
percentages are set so that if each
separate RVOs applicable to each volume to get total non-renewable
regulated party meets the percentages,
obligated party. Each standard applies gasoline and diesel volumes. The Act
then the amount of renewable fuel,
to the sum of all gasoline and diesel also requires EPA to use EIA estimates
cellulosic biofuel, biomass-based diesel,
produced or imported. Determination of of renewable fuel volumes; the best
and advanced biofuel used will meet the
RVOs is discussed in Section II.G.2. estimation of the coming years
volumes specified in Table I.A.11.16
The formulas finalized today for use 1. Calculation of Standards renewable fuel consumption is found in
in deriving annual renewable fuel Table 8 (U.S. Renewable Energy Supply
a. How Are the Standards Calculated?
standards are based in part on an and Consumption) of the STEO.
The four separate renewable fuel Additional information on projected
estimate of combined gasoline and
standards are based primarily on (1) the renewable fuel use will be included as
diesel volumes, for both highway and
49-state 17 gasoline and diesel it becomes available.
nonroad uses, for the year in which the
consumption volumes projected by EIA, As discussed in Section II.D.1, we are
standards will apply. The standards will and (2) the total volume of renewable finalizing the energy content approach
apply to refiners, blenders, and fuels required by EISA for the coming to Equivalence Values for the cellulosic
importers of these fuels. As described year. Table I.A.21 shows the required biofuel, advanced biofuel, and total
more fully in Section II.F.3, other overall volumes of four types of renewable fuel standards. However, the
producers of transportation fuel, such as renewable fuel specified in EISA. Each biomass-based diesel standard is based
producers of natural gas, propane, and renewable fuel standard is expressed as on the volume of biodiesel. In order to
electricity from fossil fuels, are not a volume percentage of combined align both of these approaches
subject to the standards. Since the gasoline and diesel sold or introduced simultaneously, biodiesel will continue
standards apply to refiners, blenders into commerce in the U.S., and is used to generate 1.5 RINs per gallon as in
and importers of gasoline and diesel, by each obligated party to determine its RFS1, and the biomass-based diesel
these are also the transportation fuels renewable volume obligation. volume mandate from EISA is then
that are used to determine the annual Today we are finalizing an approach adjusted upward by the same 1.5 factor.
volume obligations of an individual to setting standards that is based in part The net result is a biomass-based diesel
refiner, blender, or importer. on the sum of all gasoline and diesel gallon being worth 1.0 gallons toward
The projected volumes of gasoline produced or imported in the 48 the biomass-based diesel standard, but
and diesel used to calculate the contiguous states and Hawaii. An 1.5 gallons toward the other standards.
standards will continue to be provided approach we are not adopting but which CAA section 211(o) exempts small
by EIAs Short-Term Energy Outlook we discussed in the proposal would refineries 18 from the RFS requirements
(STEO). The standards applicable to a have split the standards between those until the 2011 compliance period. In
given calendar year will be published by that would be specific to gasoline and RFS1, we extended this exemption to
November 30 of the previous year. those that would be specific to diesel. the few remaining small refiners not
Gasoline and diesel volumes will Though this approach to setting already exempted.19 Small refineries
continue to be adjusted to account for standards would more readily align the and small refiners will continue to be
the required renewable fuel volumes. In RFS obligations with the relative exempt from the program until 2011
addition, gasoline and diesel volumes amounts of gasoline and diesel under the new RFS2 regulations. Thus
produced by small refineries and small produced or imported by each obligated we have excluded their gasoline and
refiners will be exempt through 2010, party, we are not adopting this approach diesel volumes from the overall non-
because it relies on projections of the renewable gasoline and diesel volumes

16 Actual volumes can vary from the amounts relative amounts of gasoline-displacing used to determine the applicable
required in the statute. For instance, lower volumes and diesel-displacing renewable fuels. percentages until 2011. As discussed in
may result if the statutorily required volumes are These projections would need to be
adjusted downward according to the waiver
provisions in CAA 211(o)(7)(D). Also, higher or updated every year, and as stated in the 18 Under section 211(o) of the Clean Air Act,
lower volumes may result depending on the actual small refineries are those with 75,000 bbl/day or
consumption of gasoline and diesel in comparison 17 Hawaii opted-in to the original RFS program; less average aggregate daily crude oil throughput.
to the projected volumes used to set the standards. that opt-in is carried forward to this program. 19 See Section III.E.
the proposal, total small refinery and that was used by exempt small states or to Hawaii, including their
small refiner gasoline production refineries and small refiners but not renewable fuel volumes in the
volume is expected to be fairly constant used as part of the RFS program, is calculation of the standard would not
compared to total U.S. transportation expected to be very small. In fact, these serve the purpose intended by section
fuel production. Thus we estimated volumes would not significantly change 211(o) of the Clean Air Act of ensuring
small refinery and small refiner gasoline the resulting percentage standards. that the statutorily required renewable
and diesel volumes using a constant Whatever renewable fuels small fuel volumes are consumed in the 48
percentage of national consumption, as refineries and small refiners blend will contiguous states and any state or
we did in RFS1. Using information from be reflected as RINs available in the territory that opts-in. Therefore,
gasoline batch reports submitted to EPA market; thus there is no need for a renewable fuels used in Alaska or U.S.
for 2006, EIA data, and input from the separate accounting of their renewable territories are not included in the
California Air Resources Board fuel use in the equations used to renewable fuel volumes that are
regarding California small refiners, we determine the standards. We proposed subtracted from the total gasoline and
estimate that small refinery volumes and are finalizing this value as zero. diesel volume estimates.
constitute 11.9% of the gasoline pool, The levels of the percentage standards In summary, the total projected non-
and 15.2% of the diesel pool. would be reduced if Alaska or a U.S. renewable gasoline and diesel volumes
CAA section 211(o) requires that the territory chooses to participate in the from which the annual standards are
small refinery adjustment also account RFS2 program, as gasoline and diesel calculated are based on EIA projections
for renewable fuels used during the produced in or imported into that state of gasoline and diesel consumption in
prior year by small refineries that are or territory would then be subject to the the contiguous 48 states and Hawaii,
exempt and do not participate in the standard. Section 211(o) of the Clean adjusted by constant percentages of
RFS2 program. Accounting for this Air Act requires that the renewable fuel 11.9% and 15.2% in 2010 to account for
volume of renewable fuel would reduce be consumed in the contiguous 48 small refinery/refiner gasoline and
the total volume of renewable fuel use states, and any other state or territory diesel volumes, respectively, and with
required of others, and thus that opts-in to the program (Hawaii has built-in correction factors to be used
directionally would reduce the subsequently opted in). However, when and if Alaska or a territory opt-in
percentage standards. However, as we because renewable fuel produced in to the program.
discussed in RFS1, the amount of Alaska or a U.S. territory is unlikely to The following formulas are used to
renewable fuel that would qualify, i.e., be transported to the contiguous 48 calculate the percentage standards:
RFVCB,i
StdCB,i = 100%
( Gi RGi ) + ( GSi RGSi ) GEi + ( Di RDi ) + ( DSi RDSi ) DEi
RFVBBD,i 1.5
StdBBD,i = 100%
RFVAB,i
StdAB,i = 100%
RFVRF,i
StdRF,i = 100%
Where RFVAB,i = Annual volume of advanced in the 48 contiguous states and Hawaii,
StdCB,i = The cellulosic biofuel standard for biofuel required by section 211(o)(2)(B) in year i, in gallons ER26MR10.418</MATH>
year i, in percent of the Clean Air Act for year i, in gallons GSi = Amount of gasoline projected to be
StdBBD,i = The biomass-based diesel standard RFVRF,i = Annual volume of renewable fuel used in Alaska or a U.S. territory in year
required by section 211(o)(2)(B) of the i if the state or territory opts-in, in
(ethanol-equivalent basis) for year i, in
Clean Air Act for year i, in gallons gallons*
percent
ER26MR10.417</MATH>
Gi = Amount of gasoline projected to be used RGSi = Amount of renewable fuel blended

StdAB,i = The advanced biofuel standard for in the 48 contiguous states and Hawaii,
year i, in percent into gasoline that is projected to be
in year i, in gallons*
StdRF,i = The renewable fuel standard for year consumed in Alaska or a U.S. territory in
Di = Amount of diesel projected to be used
i, in percent in the 48 contiguous states and Hawaii, year i if the state or territory opts-in, in
RFVCB,i = Annual volume of cellulosic in year i, in gallons gallons
ER26MR10.416</MATH>
biofuel required by section 211(o)(2)(B) RGi = Amount of renewable fuel blended into DSi = Amount of diesel projected to be used
of the Clean Air Act for year i, in gallons gasoline that is projected to be consumed in Alaska or a U.S. territory in year i if
RFVBBD,i = Annual volume of biomass-based in the 48 contiguous states and Hawaii, the state or territory opts-in, in gallons *
diesel required by section 211(o)(2)(B) of in year i, in gallons RDSi = Amount of renewable fuel blended
the Clean Air Act for year i, in gallons RDi = Amount of renewable fuel blended into into diesel that is projected to be
ER26MR10.415</MATH>
diesel that is projected to be consumed consumed in Alaska or a U.S. territory in
year i if the state or territory opts-in, in TABLE II.E.1.b1STANDARDS FOR time for obligated parties. It avoids a
gallons 2010 transition that fails to have any
GEi = The amount of gasoline projected to be requirements related to the 2009
produced by exempt small refineries and Percent biomass-based diesel volume, and
small refiners in year i, in gallons, in any instead requires the use of the 2009
year they are exempt per 80.1441 and Cellulosic biofuel ..................... 0.004 volume but achieves this by extending
80.1442, respectively. Equivalent to Biomass-based diesel ............ 1.10 the compliance period by one year. We
0.119*(GiRGi). Advanced biofuel .................... 0.61 believe this is a reasonable exercise of
DEi = The amount of diesel projected to be Renewable fuel ....................... 8.25
our authority under section 211(o)(2) to
produced by exempt small refineries and
issue regulations that ensure that the
small refiners in year i, in gallons, in any 2. Treatment of Biomass-Based Diesel in volumes for 2009 are ultimately used,
year they are exempt per 80.1441 and 2009 and 2010 even though we were unable to issue
80.1442, respectively. Equivalent to
As described in Section I.A.2, the four final regulations prior to the 2009
0.152*(DiRDi).
separate 2010 standards issued in compliance year. We announced our
* Note that these terms for projected todays rule will apply to all gasoline intentions to implement the 2009 and
volumes of gasoline and diesel use include and diesel produced in 2010. However, 2010 biomass-based diesel requirements
gasoline and diesel that has been blended EISA included volume mandates for in this manner in the November 2008
with renewable fuel.
biomass-based diesel, advanced biofuel, Federal Register notice cited
b. Standards for 2010 and total renewable fuel that applied in previously. We reiterated these
2009. Since the RFS2 program was not intentions in our NPRM. Thus, obligated
We are finalizing the standards for effective in 2009 and thus the volume parties will have had sufficient lead
2010 in todays action. As explained in mandates for biomass-based diesel and time to acquire a sufficient number of
Section I.A.2, while the rulemaking is advanced biofuel were not implemented biomass-based diesel RINs by the end of
not effective until July 1, 2010, the 2010 in 2009, our NPRM proposed a 2010 to comply with the standard based
standards we are setting are annual mechanism to ensure that the 2009 on 1.15 bill gal.
standards with compliance biomass-based diesel volume mandate Data available at the time of this
demonstrations are due by February 28, would eventually be met. In todays writing suggests that approximately 450
2011. final rule we are finalizing the proposed million gallons of biodiesel was
Under CAA section 211(o)(7)(D)(i), approach. produced in 2009, thus requiring 700
EPA is required to make a determination million gallons to be produced in 2010
a. Shift in 2009 Biomass-Based Diesel
each year regarding whether the to satisfy the combined 2009 and 2010
Compliance Demonstration to 2010
required volumes of cellulosic biofuel volume mandates. Information from
Under the RFS1 regulations that commenters and other contacts in the
for the following year can be produced.
applied in 2009, we set the applicable biodiesel industry indicate that
For any calendar year for which the
standard for total renewable fuel in feedstocks and production facilities will
projected volume of cellulosic biofuel
November 2008 20 using the required be available in 2010 to produce this
production is less than the minimum
volume of 11.1 billion gallons specified volume.
required volume, the projected volume
in the Clean Air Act (as amended by Refiners generally commented that
becomes the basis for the cellulosic
EISA), gasoline volume projections from the proposed approach to 2009 and
biofuel standard. In such a case, the
EIA, and the formula provided in the 2010 biomass-based diesel volumes was
statute also indicates that EPA may also regulations at 80.1105(d). The existing
lower the required volumes for not appropriate and should not be
RFS1 regulations did not provide a implemented. They also recommended
advanced biofuel and total renewable mechanism for requiring the use of 0.5
fuel. that the RFS2 program should be made
billion gallons of biomass-based diesel effective on January 1, 2011 with no
As discussed in Section IV.B., we are or the 0.6 billion gallons of advanced carryover of any previous-year
utilizing the EIA projection of 5.04 biofuel mandated by EISA for 2009. obligations for biomass-based diesel or
million gallons (6.5 million ethanol In the NPRM we proposed that the any other volume mandate. In contrast,
equivalent gallons) of cellulosic biofuel compliance demonstration for the 2009 the National Biodiesel Board and
as the basis for setting the percentage biomass-based diesel requirement of 0.5 several individual biodiesel producers
standard for cellulosic biofuel for 2010. bill gal be extended to 2010. This supported the proposed approach, but
This is lower than the 100 million approach would combine the 0.5 bill gal believed it was insufficient to compel
gallon standard set by EISA that we requirement for 2009 and the 0.65 bill obligated parties to purchase biodiesel
proposed upholding, but reflects the gal requirement for 2010 into a single in 2009, something they considered
current state of the industry, as requirement of 1.15 bill gal for which critical to the survival of the biodiesel
discussed in section V.B. We expect compliance demonstrations would be industry. Many of these commenters
continued growth in the industry in made by February 28, 2011. As requested that we conduct an interim
2011 and beyond. Since the advanced described in the NPRM, we believe that rulemaking that would apply to 2009 to
biofuel standard is met by just the the deficit carryover provision provides implement the EISA mandated volume
biomass-based diesel volume required a conceptual mechanism for this of 0.5 billion gallons of biomass-based
in 2010, and additional volumes of approach, since it would have allowed diesel. If the RFS2 program could not be
other advanced biofuels (e.g., sugarcane obligated parties to defer compliance implemented until 2011, they likewise
ethanol) are available as well, no change with any or all of the 2009 standards requested that interim measures be
to the advanced biofuel standard is until 2010. We are finalizing this taken for 2010 to ensure that the full
necessary for 2010. Moreover, given the approach in todays action. We believe 1.15 bill gal requirement would be
nested nature of the volume mandates, it will ensure that these two years implemented. However, putting in place
since no change in the advanced biofuel worth of biomass-based diesel will be this new volume requirement without
standard is necessary, the total used, while providing reasonable lead also putting in place EISAs new
renewable fuel standard need not be definition for biomass-based diesel,
changed either. 20 See 73 FR 70643 (November 21, 2008). renewable fuel, and renewable biomass
would have raised significant legal and diesel RINs to be used for compliance regarding valid life of RINs, 2008
policy issues that would necessarily purposes for both the 2009 total biodiesel and renewable diesel RINs
have required a new proposal with its renewable fuel standard as well as the could not be used for compliance in
own public notice and comment 2010 adjusted biomass-based diesel 2010 with the adjusted biomass-based
process. Because of the significant time standard (but not for the 2010 advanced diesel standard, despite the fact that the
required for notice and comment biofuel or total renewable fuel 2010 standard includes the 2009
rulemaking, the need to provide standards). To accomplish this, we requirement for which 2008 RINs
industry with adequate lead time for proposed in the NPRM that an obligated should be valid. The National Biodiesel
new requirements, and the fact that we party would add up the 2009 biodiesel Board opposed this approach on the
were already well into calendar year and renewable diesel RINs that he used basis that the use of 2008 RINs for 2010
2009 at the time the request for an for 2009 compliance with the RFS1 compliance demonstrations violated the
interim rule was received, it was standard for total renewable fuel, and 2-year valid life limit for RINs.
unlikely that any interim rule could reduce his 2010 biomass-based diesel However, since the 2010 compliance
have impacted biodiesel demand in obligation by this amount. Thus, 2009 demonstration will include the
2009. Moreover, Agency resources biodiesel and renewable diesel RINs are obligation that would have applied in
applied to the interim rulemaking essentially used twice. Any remaining 2009, and 2008 RINs would be valid for
would have been unavailable for 2010 biomass-based diesel obligation 2009 compliance, we are allowing
development of the final RFS2 would need to be covered either with excess 2008 biodiesel and renewable
rulemaking. Developing an interim rule 2009 biodiesel and renewable diesel diesel RINs that were not used for
could have undermined EPAs ability to RINs that were not used for compliance compliance purposes in 2008 to be used
complete the full RFS2 program in 2009 or with 2010 biomass-based for compliance purposes in 2009 or
regulations in time for 2010 diesel RINs. We are finalizing this 2010.
implementation. As a result, we did not approach in todays notice. As described in Section III.D, we are
pursue an interim rulemaking. requiring the 20% RIN rollover cap to
With regard to advanced biofuel, it is b. Treatment of Deficit Carryovers, RIN
Rollover, and RIN Valid Life for apply in all years, and separately for all
not necessary to implement a separate four standards. However, consistent
requirement for the 0.6 billion gallon Adjusted 2010 Biomass-Based Diesel
Requirement with our approach to deficit carryovers,
mandate for 2009. Due to the nested we believe that an additional constraint
nature of the volume requirements and Our transition approach for biomass-
based diesel is conceptually similar, but is warranted in the application of the
the fact that Equivalence Values will be
not identical, to the statutory deficit rollover cap to the biomass-based diesel
based on the energy content relative to
carryover provision. In a typical deficit obligation in the 2010 compliance year
ethanol, the 0.5 billion gallon
carryover situation, an obligated party to more closely represent what would
requirement for biomass-based diesel
can carry forward any amount of a have occurred if we had been able to
will count as 0.75 billion gallons of
current-year deficit to the following implement the 0.5 bill gal requirement
advanced biofuel, exceeding the
year. In the absence of any in 2009. Specifically, we are limiting the
requirement of 0.6 billion gallons. Thus
modifications to the deficit carryover use of excess 2008 RINs to 20% of the
compliance with the biomass-based
provisions for our biomass-based diesel statutory 2009 requirement of 0.5 bill
diesel requirement in 2009
transition provisions, then, an obligated gal. This is equivalent to 0.1 bill gal
automatically results in compliance
with the advanced biofuel standard. party that did not fully comply with the (20% of 0.5 bill gal), or 8.7% of the
All 2009 biodiesel and renewable 2010 biomass-based diesel requirement combined 2009/2010 obligation of 1.15
diesel RINs, identifiable through an RR of 1.15 billion gallons could carry a bill gal (0.1/1.15). Thus, obligated
code of 15 or 17 respectively under the deficit of any amount into 2011. As parties will be allowed to use excess
RFS1 regulations, will be valid for described in the NPRM, we believe that 2008 and 2009 biodiesel and renewable
showing compliance with the adjusted the deficit carryover provisions should diesel RINs for compliance with the
2010 biomass-based diesel standard of be modified in the context of the 2010 combined standard of 1.15 bill gal,
1.15 billion gallons. This use of transition biomass-based diesel so long as the sum of all previous-year
previous year RINs for current year approach to more closely represent what RINs (2008 plus 2009 RINs) does not
compliance is consistent with our would have occurred if we had been exceed 20% of their 2010 obligation,
approach to any other standard for any able to implement the 0.5 bill gal and the 2008 RINs do not exceed 8.7%
other year and consistent with the requirement in 2009. Specifically, we of their 2010 obligation.
flexibility available to any obligated are prohibiting obligated parties from Under RFS1, RINs are generated when
party that carries a deficit from one year carrying over a biomass-based diesel renewable fuel is produced, but if the
to the next. Moreover, it allows an deficit into 2011 larger than that based fuel is ultimately used for purposes
obligated party to acquire sufficient on the 0.65 bill gal volume requirement other than as motor vehicle fuel the
biodiesel and renewable diesel RINs for 2010. This is the amount that would RINs must generally be retired. Under
during 2009 to comply with the 0.5 have been permitted had we been able EISA, however, RINs generated for
billion gallons requirement, even to implement the biomass-based diesel renewable fuel that is ultimately used
though their compliance demonstration requirements in 2009. In practice, this for nonroad purposes, heating oil, or jet
would not occur until the 2010 means that deficit carryovers from 2010 fuel are valid for compliance purposes.
compliance period. into 2011 for biomass-based diesel To more closely align our transition
We did not reduce the 2009 volume cannot not exceed 57% (0.65/1.15) of an approach for biomass-based diesel to
requirement for total renewable fuel by obligated partys 2010 RVO. This what could have occurred if we had
0.5 billion gallons to account for the fact approach also helps to ensure a issued the RFS2 standards prior to 2009,
that we intended to move the minimum volume mandate for we are allowing 2009 RINs that are
compliance demonstration for this companies producing biomass-based retired because they are ultimately used
volume has been moved to the 2010 diesel each year. for nonroad, heating oil or jet fuel
compliance period. Instead, we are Similarly, in the absence of any purposes to be valid for compliance
allowing 2009 biodiesel and renewable modifications to the provisions with the 2010 standards. Such RINs can
be reinstated by the retiring party in 1. Gasoline and other renewable fuels that are
2010. As with the RFS1 rule, the volume of blended into the gasoline in
gasoline used in calculating the RVO determining the overall projected
3. Future Standards
under RFS2 will continue to include all volume of gasoline. When an obligated
The statutorily-prescribed phase-in party determines their RVO by applying
finished gasoline (reformulated gasoline
period ends in 2012 for biomass-based the applicable percentage to the amount
(RFG) and conventional gasoline (CG))
diesel and in 2022 for cellulosic biofuel, of gasoline they produce or import, it is
produced or imported for use in the
advanced biofuel, and total renewable consistent to also exclude ethanol and
contiguous United States or Hawaii, as
fuel. Beyond these years, EISA requires other renewable fuel blends from the
well as all unfinished gasoline that
EPA to determine the applicable calculation of the volume of gasoline
becomes finished gasoline upon the
volumes based on a review of the produced.
implementation of the program up to addition of oxygenate blended
As with the RFS1 rule, Gasoline
that time, and an analysis of a wide downstream from the refinery or
Treated as Blendstock (GTAB) will
variety of factors such as the impact of importer. This includes both unfinished
continue to be treated as a blendstock
the production of renewable fuels on the reformulated gasoline, called
under the RFS2 program, and thus will
environment, energy security, reformulated gasoline blendstock for
not count towards a partys renewable
infrastructure, costs, and other factors. oxygenate blending, or RBOB, and
fuel obligation. Where the GTAB is
For these future standards, EPA must unfinished conventional gasoline
blended with other blendstock (other
promulgate rules establishing the designed for downstream oxygenate
than renewable fuel) to produce
applicable volumes no later than 14 blending (e.g., sub-octane conventional
gasoline, the total volume of the
months before the first year for which gasoline), called CBOB. The volume of gasoline blend, including the GTAB,
such applicable volumes would apply. any other unfinished gasoline or will be included in the volume of
For biomass-based diesel, this would blendstock, (such as butane or naphtha gasoline used to determine the
mean that final rules would need to be produced in a refinery) or exported renewable fuel obligation. Where GTAB
issued by October 31, 2011 for gasoline, will not be included in the is blended with renewable fuel to
application starting on January 1, 2013. obligated volume, except where the produce gasoline, only the GTAB
In todays rulemaking, we are not blendstock is combined with other volume will be included in the volume
suggesting any specific volume blendstock or gasoline to produce of gasoline used to determine the
requirements for biomass-based diesel finished gasoline, RBOB, or CBOB. renewable fuel obligation. Where the
for 2013 and beyond that would be Where a blendstock is blended with GTAB is blended with finished gasoline,
appropriate under the statutory criteria other blendstock to produce finished only the GTAB volume will be included
that we must consider. Likewise, we are gasoline, RBOB, or CBOB, the total in the volume of gasoline used to
not suggesting any specific volume volume of the gasoline blend will be determine the renewable fuel obligation.
requirements for the other three included in the volume used to
renewable fuel categories for 2023 and determine the blenders renewable fuels 2. Diesel
beyond. However, the statute requires obligation. Where a blendstock is added EISA expanded the RFS program to
that the biomass-based diesel volume in to finished gasoline, only the volume of include transportation fuels other than
2013 and beyond must be no less than the blendstock will be included, since gasoline, thus both highway and
1.0 billion gallons, and that advanced the finished gasoline would have been nonroad diesel must be used in
biofuels in 2023 and beyond must included in the compliance calculating a partys RVO. Any party
represent at a minimum the same determinations of the refiner or importer that produces or imports petroleum-
percentage of total renewable fuel as it of the gasoline. For purposes of this based diesel fuel that is designated as
does in 2022. These provisions will be preamble, the various gasoline products motor vehicle, nonroad, locomotive, and
implemented as part of an annual described above that we are including in marine diesel fuel (MVNRLM) (or any
standard-setting process. a partys obligated volume are subcategory of MVNRLM) will be
collectively called gasoline. required to include the volume of that
F. Fuels That Are Subject to the Also consistent with the RFS1 diesel fuel in the determination of its
Standards program, we are continuing the RVO under the RFS2 rule. Diesel fuel
Under RFS1, producers and importers exclusion of any volume of renewable includes any distillate fuel that meets
of gasoline are obligated parties subject fuel contained in gasoline from the the definition of MVNRLM diesel fuel as
to the standardsany party that volume of gasoline used to determine it has already been defined in the
produces or imports only diesel fuel is the renewable fuels obligations. This regulations at 80.2(qqq), including any
not subject to the standards. EISA exclusion applies to any renewable fuels subcategories such as MV (motor
changes this provision by expanding the that are blended into gasoline at a vehicle diesel fuel produced for use in
RFS program in general to include all refinery, contained in imported highway diesel engines and vehicles),
transportation fuel. As discussed above, gasoline, or added at a downstream NRLM (diesel fuel produced for use in
however, section 211(o)(3) continues to location. Thus, for example, any ethanol nonroad, locomotive, and marine diesel
require EPA to determine which added to RBOB or CBOB at a refinerys engines and equipment/vessels), NR
refiners, blenders, and importers are rack or terminal downstream from the (diesel fuel produced for use in nonroad
treated as subject to the standard. As refinery or importer will be excluded engines and equipment), and LM (diesel
described further in Section II.G below, from the volume of gasoline used by the fuel produced for use in locomotives
under this rule, the sum of all highway refiner or importer to determine the and marine diesel engines and
and nonroad gasoline and diesel fuel obligation. This is consistent with how vessels).21 Transportation fuels meeting
produced or imported within a calendar the standard itself is calculatedEPA
year will be the basis on which the determines the applicable percentage by 21 EPAs diesel fuel regulations use the term
RVOs are calculated. This section comparing the overall projected volume nonroad to designate one large category of land
based off-highway engines and vehicles,
provides our final definition of gasoline of gasoline used to the overall recognizing that locomotive and marine engines
and diesel for the purposes of the RFS2 renewable fuel volume that is specified and vessels are also nonroad engines and vehicles
program. in the statute, and EPA excludes ethanol under EPActs definition of nonroad. Except where
the definition of MVNRLM will be used sectors (in fact, the producer may have conditions it can carry a deficit into the
to calculate the RVOs, and refiners, no knowledge of its ultimate use). We next year.
blenders, or importers of MVNRLM will will reconsider this approach if and This section describes our approach
be treated as obligated parties. As such, when these volumes grow. At the same to the calculation of RVOs under RFS2
diesel fuel that is designated as heating time, it is clear that these fuels can be and the RINs that are valid for
oil, jet fuel, or any designation other used as transportation fuel, and under demonstrating compliance with those
than MVNRLM or a subcategory of certain circumstances, producers of RVOs. This includes a description of the
MVNRLM, will not be subject to the such other transportation fuels may special treatment that must be applied
applicable percentage standard and will generate RINs as a producer or importer to RFS1 RINs used for compliance
not be used to calculate the RVOs.22 We of a renewable fuel. See Section II.D.2.a purposes under RFS2, since RINs
requested comment on the idea that any for further discussion of other RIN- generated under RFS1 regulations are
diesel fuel not meeting these generating fuels. not exactly the same as those generated
requirements, such as distillate or in under RFS2.
G. Renewable Volume Obligations
residual fuel intended solely for use in
(RVOs) 1. Designation of Obligated Parties
ocean-going vessels, would not be used
to calculate the RVOs. Under RFS1, each obligated party was In the NPRM, we proposed to
One commenter expressed support for required to determine its RVO based on continue to designate obligated parties
including heating oil and jet fuel into the applicable percentage standard and under the RFS2 program as they were
the RIN program, but not to subject its annual gasoline volume. The RVO designated under RFS1, with the
these fuels to the RVO mandate. The represented the volume of renewable addition of diesel fuel producers and
commenter stated that fluctuating fuel that the obligated party was importers. Regarding gasoline producers
weather conditions make it hard to required to ensure was used in the U.S. and importers, we proposed that
predict with any reliability the volumes in a given calendar year. Obligated obligated parties who are subject to the
of heating oil that will be used in a parties were required to meet their RVO standard would be those that produce or
given year. Another commenter stated through the accumulation of RINs import finished gasoline (RFG and
that it supports the extension of the RFS which represent the amount of conventional) or unfinished gasoline
program to transportation fuels, renewable fuel used as motor vehicle that becomes finished gasoline upon the
including diesel and nonroad fuels. fuel that was sold or introduced into addition of an oxygenate blended
With respect to fuels for use in ocean- commerce within the U.S. Each gallon- downstream from the refinery or
going vessels, EISA specifies that RIN counted as one gallon of renewable importer. Unfinished gasoline would
transportation fuels do not include fuel for compliance purposes. include reformulated gasoline
such fuels. We are interpreting that We are maintaining this approach to
blendstock for oxygenate blending
fuels for use in ocean-going vessels compliance under the RFS2 program.
(RBOB), and conventional gasoline
means residual or distillate fuels other However, one primary difference
blendstock designed for downstream
than MVNRLM intended to be used to between RFS1 and the new RFS2
oxygenate blending (CBOB) which is
power large ocean-going vessels (e.g., program in terms of demonstrating
generally sub-octane conventional
those vessels that are powered by compliance is that each obligated party
gasoline. The volume of any other
Category 3 (C3), and some Category 2 now has four RVOs instead of one
(through 2012) or two (starting in 2013) unfinished gasoline or blendstock, such
(C2), marine engines and that operate
under the RFS1 program. Also, as as butane, would not be included in the
internationally). Thus, fuel for use in
discussed above, RVOs are now volume used to determine the RVO,
ocean-going vessels, or that an obligated
calculated based on production or except where the blendstock was
party can verify as having been used in
importation of both gasoline and diesel combined with other blendstock or
an ocean-going vessel, will be excluded
fuels, rather than gasoline alone. finished gasoline to produce finished
from the renewable fuel standards. Also,
By acquiring RINs and applying them gasoline, RBOB, or CBOB. Thus, parties
in the context of the recently finalized
to their RVOs, obligated parties are downstream of a refinery or importer
fuel standards for C3 marine vessels,
deemed to have satisfied their obligation would only be obligated parties to the
this would mean that fuel meeting the
to cause the renewable fuel represented degree that they use non-renewable
1,000 ppm fuel sulfur standard would
not be considered obligated volume, by the RINs to be consumed as blendstocks to make finished gasoline,
while all MVNRLM diesel fuel would. transportation fuel in highway or RBOB, CBOB, or diesel fuel.
nonroad vehicles or engines. Obligated We also took comment on two
3. Other Transportation Fuels parties are not required to physically alternative approaches to the
Transportation fuels other than blend the renewable fuel into gasoline designation of obligated parties:
gasoline or MVNRLM diesel fuel or diesel fuel themselves. The Elimination of RBOB and CBOB from
(natural gas, propane, and electricity) accumulation of RINs will continue to the list of fuels that are subject to the
will not be used to calculate the RVOs be the means through which each standard, such that a partys RVO
of any obligated party. We believe this obligated party shows compliance with would be based only on the non-
is a reasonable way to implement the its RVOs and thus with the renewable renewable volume of finished
obligations of 211(o)(3) because the fuel standards. gasoline or diesel that he produces or
volumes are small and the producers If an obligated party acquires more imports, thereby moving a portion of
cannot readily differentiate the small RINs than it needs to meet its RVOs, the obligation to downstream blenders
portion used in the transportation sector then in general it can retain the excess of renewable fuels into RBOB and
from the large portion used in other RINs for use in complying with its RVOs CBOB.
in the following year (subject to the 20% Moving the obligations for all gasoline
noted, the discussion of nonroad in reference to rollover cap discussed in Section III.D) and diesel downstream of refineries
transportation fuel includes the entire category or transfer the excess RINs to another and importers to parties who supply
covered by EPActs definition of nonroad.
22 See 40 CFR 80.598(a) for the kinds of fuel types party. If, alternatively, an obligated finished transportation fuels to retail
used by refiners or importers in designating their party has not acquired sufficient RINs to outlets or to wholesale purchaser-
diesel fuel. meet its RVOs, then under certain consumer facilities.
These alternative approaches have the minimize the number of regulated CBOB so that the blender would know
potential to more evenly align a partys parties and keep the program simple. the identity of the original producer. It
access to RINs with that partys However, with the expanded RFS2 would also be difficult to ensure that
obligations under the RFS2 program. As mandates, essentially all downstream RINs representing the specific category
described more fully in the NPRM, we blenders and terminals are now of renewable fuel blended were
considered these alternatives because of regulated parties under RFS2 since transferred to the producer of the RBOB
market conditions that had changed essentially all gasoline will be blended or CBOB, given the fungible nature of
since the RFS1 program began. For with ethanol. Thus the rationale in RINs assigned to batches of renewable
instance, obligated parties who have RFS1 for placing the obligation on just fuel. For these reasons, we have not
excess RINs have been observed to the upstream refiners and importers is finalized this alternative approach.
retain rather than sell them to ensure no longer valid. Nevertheless, based on Another alternative approach on
they have a sufficient number for the the comments we received, we do not which we took comment would have
next years compliance. This was most believe that the concerns expressed allowed use of RINs that expire without
likely to occur with major integrated warrant a change in the designation of being used for compliance by an
refiners who operate gasoline marketing obligated parties for the RFS2 program obligated party to be used to reduce the
operations and thus have direct access at this time. We continue to believe that nationwide volume of renewable fuel
to RINs for ethanol blended into their the market will provide opportunities required in the following year. This
gasoline. Refiners whose operations are for parties who are in need of RINs to alternative approach could have helped
focused primarily on producing refined acquire them from parties who have to prevent the hoarding of RINs from
products with less marketing do not excess. Refiners who market driving up demand for renewable fuel.
have such direct access to RINs and considerably less gasoline or diesel than However, it would also effectively alter
could potentially find it difficult to they produce can establish contracts the valid life limit for RINs. Comments
acquire a sufficient number for with splash blenders to purchase RINs. from stakeholders did not change our
compliance despite the fact that the Such refiners can also purchase ethanol position that such an approach is not
total nationwide volume of renewable from producers directly, separate the warranted at this time, and thus we
fuel meets or exceeds the standard. The RINs, and then sell the ethanol without have not finalized it.
result might be a higher price for RINs RINs to blenders. Since the RFS
(and fuel) in the marketplace than program is based upon ownership of 2. Determination of RVOs
would be expected under a more liquid RINs rather than custody of volume, Corresponding to the Four Standards
RIN market. For similar reasons, we also refiners need never take custody of the In order for an obligated party to
took comment on possible changes to ethanol in order to separate RINs from demonstrate compliance, the percentage
the requirement that RINs be transferred volumes that they own. Moreover, a standards described in Section II.E.1
with volume through the distribution change in the designation of obligated which are applicable to all obligated
system as discussed more fully in parties would result in a significant parties must be converted into the
Section II.H.4. change in the number of obligated volumes of renewable fuel each
In response to the NPRM, parties and the movement of RINs, obligated party is required to satisfy.
stakeholders differed significantly on changes that could disrupt the operation These volumes of renewable fuel are the
whether EPA should implement one of of the RFS program during the transition volumes for which the obligated party is
these alternative approaches. For from RFS1 to RFS2. responsible under the RFS program, and
instance, while some refiners expressed We will continue to evaluate the are referred to here as its RVO. Under
support for moving the obligations to functionality of the RIN market. Should RFS2, each obligated party will need to
downstream parties such as blenders, we determine that the RIN market is not acquire sufficient RINs each year to
terminals, and/or wholesale purchaser- operating as intended, driving up prices meet each of the four RVOs
consumers, other refiners preferred to for obligated parties and fuel prices for corresponding to the four renewable
maintain the current approach. Blenders consumers, we will consider revisiting fuel standards.
and other downstream parties generally this provision in future regulatory The calculation of the RVOs under
expressed opposition to a change in the efforts. RFS2 follows the same format as the
designation of obligated parties, citing In the NPRM we also took comment formulas in the RFS1 regulations at
the additional burden of demonstrating on several other possible ways to help 80.1107(a), with one modification. The
compliance with the standard especially ensure that obligated parties can standards for a particular compliance
for small businesses. They also pointed demonstrate compliance. For instance, year must be multiplied by the sum of
to the need to implement new systems one alternative approach would have the gasoline and diesel volume
for determining and reporting left our proposed definitions for produced or imported by an obligated
compliance, the short leadtime for doing obligated parties in place, but would party in that year rather than only the
so, and the fewer resources that smaller have added a regulatory requirement gasoline volume as under the RFS1
downstream companies have to manage that any party who blends ethanol into program.23 To the degree that an
such work in comparison to the much RBOB or CBOB must transfer the RINs obligated party did not demonstrate full
larger refiners. Finally, they pointed to associated with the ethanol to the compliance with its RVOs for the
the additional complexity that would be original producer of the RBOB or CBOB. previous year, the shortfall will be
added to the RFS program beyond that Stakeholders generally opposed this included as a deficit carryover in the
which is necessary to carry out the change, agreeing with our assessment calculation. CAA section 211(o)(5) only
renewable fuels mandate under CAA that it would be extremely difficult to
permits a deficit carryover from one

section 211(o). implement given that RBOB and CBOB year to the next if the obligated party
When the RFS1 regulations were are often transferred between multiple achieves full compliance with each of
drafted, the obligations were placed on parties prior to ethanol blending. As a its RVOs including the deficit carryover
the relatively small number of refiners result, a regulatory requirement for RIN
and importers rather than on the transfers back to the original producer 23 As discussed above, the diesel fuel that is used
relatively large number of downstream would have necessitated an additional to calculate the RVO is any diesel designated as
blenders and terminals in order to tracking requirement for RBOB and MVNRLM or a subcategory of MVNRLM.
in the second year. Thus deficit 3. RINs Eligible To Meet Each RVO fuel that meets either the cellulosic
carryovers cannot occur two years in biofuel or the biomass-based diesel
succession for any of the four individual Under RFS1, all RINs had the same requirements also satisfies the advanced
standards. They can, however, occur as compliance value and thus it did not
biofuel requirement. As a result, the
frequently as every other year for a matter what the RR or D code was for
RINs that can be used to meet the four
given obligated party for each standard. a given RIN when using that RIN to
meet the total renewable fuel standard. standards are likewise nested. Using the
Note that a party that produces only D codes defined in Table II.A1, the
diesel fuel will have an obligation for all In contrast, under RFS2 only RINs with
specified D codes can be used to meet RFS2 RINs that can be used to meet
four standards even though he will not
each of the four standards. each of the four standards are shown in
have the opportunity to blend ethanol
Table II.G.31. RFS1 RINs generated in
into his own gasoline. Likewise, a party As described in Section I.A.1, the
2010 and identified by a D code of 1 or
that produces only gasoline will have an volume requirements in EISA are
obligation for all four standards even generally nested within one another, so 2 can also be applied to these standards
though he will not have an opportunity that any fuel that satisfies the advanced using the protocol described in Section
to blend biomass-based diesel into his biofuel requirement also satisfies the II.G.4 below.
own diesel fuel. total renewable fuel requirement, and
TABLE II.G.31RINS THAT CAN BE USED TO MEET EACH STANDARD

Allowable D
Standard Obligation codes
Cellulosic biofuel ....................................................................... RVOCB ...................................................................................... 3 and 7.

Biomass-based diesel ............................................................... RVOBBD .................................................................................... 4 and 7.
Advanced biofuel ....................................................................... RVOAB ...................................................................................... 3, 4, 5, and 7.
Renewable fuel .......................................................................... RVORF ....................................................................................... 3, 4, 5, 6, and 7.
The nested nature of the four purposes in 2010. Also, since RINs renewable fuels produced in 2009 or the
standards also means that in some cases generated in January through June of first three months of 2010 will have
we must allow the same RIN to be used 2010 will be generated under RFS1 been made from feedstocks that do not
to meet more than one standard in the regulations, we must provide a means meet the new renewable biomass
same year. Thus, for instance, a RIN for them to be used to meet the annual definition. It is very unlikely that new
with a D code of 3 can be used to meet 2010 RFS2 standards. Finally, we must land would have been cleared or
three of the four standards, while a RIN address deficit carryovers from 2009 to cultivated since December 19, 2007 for
with a D code of 5 can be used to meet 2010, since the total renewable fuel use in growing crops for renewable fuel
both the advanced biofuel and total standards in these two years will be production, and thus the land use
renewable fuel standards. However, a D defined differently. restrictions associated with the
code of 6 can only be used to meet the renewable biomass definition will very
a. Use of RFS1 RINs To Meet Standards
renewable fuel standard. Consistent likely be met. Finally, the text of section
Under RFS2
with our proposal, we are continuing to 211(o)(5) states that a credit generated
prohibit the use of a single RIN for In 2009 and the first three months of under this paragraph shall be valid to
compliance purposes in more than one 2010, the RFS1 regulations will show compliance for the 12 months as
year or by more than one party.24 continue to apply and thus producers of the date of generation, and EISA did
will not be required to demonstrate that not change this provision and did not
4. Treatment of RFS1 RINs Under RFS2
their renewable fuel is made from specify any particular transition
As described in the introduction to renewable biomass as defined by EISA, protocol to follow. A straightforward
this section, we are implementing a nor that their combination of fuel type, interpretation of this provision is to
number of changes to the RFS program feedstock, and process meets the GHG allow RFS1 RINs generated in 2009 and
as a result of the requirements in EISA. thresholds specified in EISA. Moreover, early 2010 to be valid to show
These changes will go into effect on July there is no practical way to determine compliance for the annual 2010
1, 2010 and, among other things, will after the fact if RINs generated under obligations.
affect the conditions under which RINs RFS1 regulations meet any of these The separate definitions for cellulosic
are generated and their applicability to criteria. However, we believe that the biofuel and biomass-based diesel
each of the four standards. As a result, vast majority of RFS1 RINs generated in require GHG thresholds of 60% and
RINs generated in 2010 under these 2009 and the first two months of 2010 50%, respectively. While we do not
RFS2 regulations will not be exactly the will in fact meet the RFS2 requirements. have a mechanism in place to determine
same as RINs generated under RFS1 First, while ethanol made from corn if these thresholds have been met for
regulations. Given the valid RIN life that must meet a 20% GHG threshold under RFS1 RINs generated in 2009 or early
allows a RIN to be used in the year RFS2 if produced by a facility that 2010, any shortfall in GHG performance
generated or the year after, we must commenced construction after for this one transition period is unlikely
address circumstances in which excess December 19, 2007, facilities that were to have a significant impact on long-
2009 RINs are used for compliance already built or had commenced term GHG benefits of the program. Few
construction as of December 19, 2007 stakeholders commented on our
24 Note that we are finalizing an exception to this are exempt from this requirement. proposed treatment of RFS1 RINs under
general prohibition for the specific and limited case Essentially all ethanol produced in 2009 RFS2. Of those that did, most supported
of 2008 and 2009 biodiesel and renewable diesel
RINs used to demonstrate compliance with both the
and the first three months of 2010 will our proposed approach to the use of
2009 total renewable fuel standard and the 2010 meet the prerequisites for this RFS1 RINs to meet RFS2 obligations.
biomass-based diesel standard. See Section II.E.2.a. exemption. Second, it is unlikely that Based on our belief that it is critical to
the smooth operation of the program Consistent with our proposal, we have these fuels may be valid for meeting the
that excess 2009 RINs be allowed to be used information contained in the RR biomass-based diesel standard under
used for compliance purposes in 2010, and D codes of RFS1 RINs to determine RFS2. Likewise, RINs generated for
we are allowing RFS1 RINs that were how those RINs should be treated under cellulosic biomass ethanol under RFS1
generated in 2009 or 2010 representing RFS2. The RR code is used to identify regulations must be identified with a D
cellulosic biomass ethanol to be valid the Equivalence Value of each code of 1, and these fuels will be valid
for use in satisfying the 2010 cellulosic renewable fuel, and under RFS1 these for meeting the cellulosic biofuel
biofuel standard. Likewise, we are Equivalence Values are unique to standard under RFS2. Our final
allowing RFS1 RINs that were generated specific types of renewable fuel. For treatment of RFS1 RINs for compliance
in 2009 or 2010 representing biodiesel instance, biodiesel (mono alkyl ester)
under RFS2 is shown in Table II.G.4.a
and renewable diesel to be valid for use has an Equivalence Value of 1.5, and
1.
in satisfying the 2010 biomass-based non-ester renewable diesel has an
diesel standard. Equivalence Value of 1.7, and both of
TABLE II.G.4.a1TREATMENT OF RFS1 RINS FOR RFS2 COMPLIANCE PURPOSES

RINs generated under RFS1 a Treatment under RFS2 b
Any RIN with D code of 2 and RR code of 15 or 17 ...................................................................... Equivalent to RFS2 RINs with D code of 4.
All other RINs with D code of 2 ...................................................................................................... Equivalent to RFS2 RINs with D code of 6.
Any RIN with D code of 1 ............................................................................................................... Equivalent to RFS2 RINs with D code of 3.
a See RFS1 RIN code definitions at 80.1125.
b See RFS2 RIN code definitions at 80.1425.
b. Deficit Carryovers From the RFS1 H. Separation of RINs renewable fuel associated with it was
Program to RFS2 As we proposed in the NPRM, we are used in nonroad vehicles or engines
The calculation of RVOs in 2010 requiring the RFS1 provisions regarding could be reinstated in 2010 for use in
under the RFS2 regulations will be the separation of RINs from volumes of compliance with the 2010 standards.
somewhat different than the calculation renewable fuel to be retained for RFS2. Stakeholders supported this approach,
of RVOs in 2009 under RFS1. In However, the modifications in EISA and we are finalizing it in todays
particular, 2009 RVOs were based on required changes to the treatment of action.
gasoline production only, while 2010 RINs associated with nonroad 2. Heating Oil and Jet Fuel
RVOs will be based on volumes of renewable fuel and renewable fuels EISA defines additional renewable
gasoline and diesel. As a result, 2010 used in heating oil and jet fuel. Our fuel as fuel that is produced from
compliance demonstrations that include approach to the separation of RINs by renewable biomass and that is used to
a deficit carried over from 2009 will exporters must also be modified to replace or reduce the quantity of fossil
combine obligations calculated on two account for the fact that there would be fuel present in home heating oil or jet
different bases. four categories of renewable fuel under fuel. 26 While we are not requiring
We do not believe that deficits carried RFS2. fossil-based heating oil and jet fuel to be
over from 2009 to 2010 will undermine
1. Nonroad included in the fuel used by a refiner or
the goals of the program in requiring
importer to calculate their RVOs, we are
specific volumes of renewable fuel to be Under RFS1, RINs associated with
allowing renewable fuels used as or in
used each year. Although RVOs in 2009 renewable fuels used in nonroad
heating oil and jet fuel to generate RINs.
and 2010 will be calculated differently, vehicles and engines downstream of the
Similarly, RINs associated with a
obligated parties must acquire sufficient renewable fuel producer were required
renewable fuel, such as biodiesel, that is
RINs in 2010 to cover any deficit carried to be retired by the party who owned
blended into heating oil will continue to
over from 2009 in addition to that the renewable fuel at the time of
be valid for compliance purposes. See
portion of their 2010 obligation which is blending. This provision derived from
also discussion in Section II.B.1.e.
based on their 2010 gasoline and diesel the EPAct definition of renewable fuel
production. As a result, the 2009 which was limited to fuel used to 3. Exporters
nationwide volume requirement of 11.1 replace fossil fuel used in a motor Under RFS1, exporters were assigned
billion gallons of renewable fuel will be vehicle. However, EISA expands the an RVO representing the volume of
consumed over the two year period definition of renewable fuel, and ties it renewable fuel that was exported, and
concluding at the end of 2010. Thus, we to the definition of transportation fuel they were required to separate all RINs
are not implementing any special which is defined as any fuel for use in that were assigned to fuel that was
treatment for deficits carried over from motor vehicles, motor vehicle engines, exported. Since there was only one
2009 to 2010. nonroad vehicles, or nonroad engines standard, there was only one possible
A deficit carried over from 2009 to (except for ocean-going vessels). To RVO applicable to exporters.
2010 will only affect a partys total implement these changes, the RFS2 Under RFS2, there are four possible
renewable fuel obligation in 2010, as the program eliminates the RFS1 RIN RVOs corresponding to the four
2009 obligation is for total renewable retirement requirement for renewable
categories of renewable fuel (cellulosic

fuel use, not a subcategory. The RVOs fuels used in nonroad applications, with biofuel, biomass-based diesel, advanced
for biomass-based diesel or advanced the exception of RINs associated with biofuel, and total renewable fuel).
biofuel will not be affected, as they do renewable fuels used in ocean-going However, given the fungible nature of
not have parallel obligations in 2009 vessels. the RIN system and the fact that an
under RFS1.25 Since RINs have a valid life of two
years, the NPRM proposed that a 2009 26 EISA, Title II, Subtitle ARenewable Fuel
25 There is no cellulosic biofuel standard for 2010. RFS1 RIN that is retired because the Standard, Section 201.
assigned RIN transferred with a volume fuel using the same proportions below, we have determined that it
of renewable fuel may not be the same represented by the national volume would not be appropriate to implement
RIN that was originally generated to requirements for that year. However, as these alternative approaches at this
represent that volume, RINs from described in the NPRM, we believe that time.
different fuel types can accompany this alternative approach would have In the first alternative approach, we
volumes. Thus, there may be no way for added considerable complexity to the would have removed the restriction
an exporter to determine from an compliance determinations for exporters established under the RFS1 rule
assigned RIN which of the four without necessarily adding more requiring that RINs be assigned to
categories applies to an exported precision. Given the expected small batches of renewable fuel and
volume. In order to determine its RVOs, volumes of exported renewable fuel, we transferred with those batches. Instead,
the only information available to the continue to believe that this added renewable fuel producers could have
exporter may be the type of renewable complexity is not warranted at this time. sold RINs (with a K code of 2 rather
fuel that he is exporting. As described above, exporters must than 1) separately from volumes of
However, if an exporter knows, or has separate any RINs assigned to renewable renewable fuel to any party.
reason to know, that the renewable fuel fuel that they export. However, since In the second alternative approach,
that it is exporting is either cellulosic RINs are fungible and the owner of a producers and importers of renewable
biofuel or advanced biofuel, we are batch of renewable fuel has the fuels would be required to separate and
requiring the exporter to determine an flexibility to assign between zero and transfer the RIN, but only to an
RVO for the exported fuel based upon 2.5 gallon-RINs to each gallon, we have obligated party. This direct transfer
these fuel types. For instance, if an made this flexibility explicit for approach would require renewable fuel
exporter purchases cellulosic biofuel or exporters. Thus, an exporter can producers to transfer RINs with
advanced biofuel directly from a separate up to 2.5 gallon-RINs for each renewable fuel for all transactions with
producer or if the fuel has been gallon of renewable fuel that he exports. obligated parties, and sell all other RINs
segregated from other fuels, we would While the exporter is not required to directly to obligated parties on a
expect the exporter to know or have retain these separated RINs for use in quarterly basis for any renewable fuel
reason to know the type of fuel that it complying with his RVOs calculated on volumes that were not sold directly to
is exporting. Another example of when the basis of the exported volumes, this obligated parties. Any RINs not sold in
we would expect an exporter to know or would be the most straightforward this way would be required to be offered
have reason to know that the fuel that approach and would ensure that the for sale to any obligated party through
it is exporting is cellulosic or advanced exporter has sufficient RINs to comply.
a public auction. Only renewable fuel
biofuel would be if the commercial However, we are aware of some
producers, importers, and obligated
documents that accompany the exporters who sell RINs that they
parties would be allowed to own RINs.
purchase or sale of the renewable fuel separate as a source of revenue, with the
Many renewable fuel producers
identify the product as cellulosic or intention to purchase replacement RINs
advanced biofuel. on the open RIN market later in the year supported the concept of allowing them
EPA recognizes that in many to comply with their RVOs. At this time to separate the RINs from renewable fuel
situations, exporters will not know or we are not aware of such activities that they produce. They generally
have reason to know which of the four resulting in noncompliance, and thus argued in favor of a free market
categories of renewable fuel apply to the the RFS2 regulations promulgated today approach to RINs in which there would
exported fuel. If this is the case, we are will continue to allow this. However, be no restrictions on whom they could
requiring exporters to follow the we may revisit this issue in the future sell RINs to, or in what timeframe. The
approach proposed in the NPRM. if there is evidence that exporters are direct transfer approach was
Exported volumes of biodiesel (mono failing to comply because they are unnecessary, they argued, since the
alkyl esters) and renewable diesel must selling RINs that they separate from market would compel them to sell all
be used to determine the exporters RVO exported volumes. RINs they generated, and all RINs would
for biomass-based diesel. For all other eventually end up in the hands of the
types of renewable fuel, the most likely 4. Requirement To Transfer RINs With obligated parties that need them.
category is general renewable fuel. Volume However, other renewable fuel
Thus, we are requiring that all In the NPRM, we proposed that the producers opposed any change to the
renewable fuels be used to determine approach to RIN transfers established requirement that RINs be assigned to
the exporters RVO for total renewable under RFS1that RINs generated by volumes of renewable and transferred
fuel. Our final approach is provided at renewable fuel producers and importers with those volumes through the
80.1430. must be assigned to batches of distribution system. They argued that
In the NPRM we took comment on an renewable fuel and transferred along the system established under RFS1 has
alternative approach in which the total with those batchesbe continued under proven to work and it would create an
nationwide volumes required in each RFS2. However, given the higher unwarranted burden to require
year (see Table I.A.11) would be used volumes required under RFS2 and the producers to modify their IT systems for
to apportion specific types of renewable resulting expansion in the number of RFS2.
fuel into each of the four categories. For regulated parties, we also took comment Marketers and distributors were
example, exported ethanol may have on two alternative approaches to RIN generally opposed to our proposed
originally been produced from cellulose transfers. Along with the alternative alternative approaches to RIN transfers.
to meet the cellulosic biofuel approaches for designation of obligated Moreover, SIGMA and NACS, as in the
requirement, from corn to meet the total parties as described in Section II.G.1 RFS1 rulemaking process,
renewable fuel requirement, or may above, a change to the requirement to recommended that RINs not be
have been imported as advanced transfer RINs with batches had the generated by producers at all, but rather
biofuel. If ethanol were exported, we potential to more evenly align a partys by the party that blends renewable fuel
could divide the exported volume into access to RINs with that partys into gasoline or diesel, or uses
three RVOs for cellulosic biofuel, obligations under the RFS2 program. renewable fuel in its neat form as a
advanced biofuel, and total renewable Nevertheless, for the reasons described transportation fuel.
Obligated parties generally opposed an obligated party, EPA proposed, and cellulosic biofuels is not sufficient to
any change to the RFS1 requirement is finalizing a change to the meet the levels in EISA we will consider
that RINs be assigned to volumes of applicability of the RIN separation the availability of other advanced
renewable fuel by the producer or provisions for RFS2. Section biofuels in deciding whether to lower
importer, and transferred with volumes 80.1429(b)(4) will allow for separation the advanced biofuel standard as well.
through the distribution system. They of RINs for neat renewable fuel or
In determining whether the advanced
reiterated their concern, first raised in blends of renewable fuel and diesel fuel
the RFS1 rulemaking, that a free market biofuel and/or total renewable fuel
that the party designates as
approach would place them at greater transportation fuel, heating oil, or jet volume requirements should also be
risk of market manipulation by fuel, provided the neat renewable fuel adjusted downward in the event that
renewable fuel producers. Moreover, or blend is used in the designated form, projected volumes of cellulosic biofuel
while generally expressing support for without further blending, as fall short of the statutorily required
the concept of a direct transfer transportation fuel, heating oil, or jet volumes, we believe it may be
approach, they also expressed doubt fuel. Those parties that blend renewable appropriate to allow excess advanced
that the auctions could be regulated in fuel with gasoline or diesel fuel (in a biofuels to make up some or all of the
such a way as to ensure that RIN blend containing 80 percent or less shortfall in cellulosic biofuel. For
generators could not withhold RINs biodiesel) must separate RINs pursuant instance, if we determined that
from the market by such means as to 80.1429(b)(2). sufficient biomass-based diesel was
failing to adequately advertise the time Thus, for example, if a party intends available, we could decide that the
and location of an auction, by setting to separate RINs from a volume of B85, required volume of advanced biofuel
the selling price too high, by specifying the party must designate the blend for need not be lowered, or that it should
a minimum number of bids before use as transportation fuel, heating oil, or be lowered to a smaller degree than the
selling, by conducting auctions jet fuel and the blend must be used in required cellulosic biofuel volume.
infrequently, by having unduly short its designated form without further Thus, the Act requires EPA to examine
bidding windows, etc. These concerns blending. The party is also required to the total and advanced renewable fuel
were exacerbated by the nested maintain records of this designation standards and volumes in the event of
standards required by EISA, under pursuant to 80.1454(b)(5). Finally, the a cellulosic volume waiver. EPA will
which many obligated parties have party is required to comply with the
expressed concern about being able to look at projections for each year on an
proposed PTD requirements in individual yearly basis to determine if
acquire sufficient RINs for compliance. 80.1453(a)(11)(iv), which serve to
Given the significant challenges the standards should be adjusted. EPA
notify downstream parties that the
associated with a change to the believes that since the standards are
volume of fuel has been designated for
requirement that RINs be transferred use as transportation fuel, heating oil, or nested and the total and advanced
with volume and the opposing views jet fuel, and must be used in that renewable fuel volume mandates are
among stakeholders, we are not making designated form without further met in part by the cellulosic volume
any change in todays final rule. blending. Parties may separate RINs at mandate, Congress gave EPA the
5. Neat Renewable Fuel and Renewable the time they comply with the flexibility to lower the required total
Fuel Blends Designated as designation and PTD requirements, and and advanced volumes, but Congress
Transportation Fuel, Heating Oil, or Jet do not need to physically track ultimate also wanted to encourage the
Fuel fuel use. development of advanced renewable
fuels as well and allow in appropriate
Under RFS1, RINs must, with limited I. Treatment of Cellulosic Biofuel
circumstances for the use of those fuels
exceptions, be separated by an obligated
1. Cellulosic Biofuel Standard in the event they can meet that years
party taking ownership of the renewable
fuel, or by a party that blends renewable EISA requires that the Administrator required volumes that would have been
fuel with gasoline or diesel. In addition, set the cellulosic biofuel standard each met by the cellulosic mandate.
a party that designates neat renewable November for the next year based on the 2. EPA Cellulosic Biofuel Waiver
fuel as motor vehicle fuel may separate lesser of the volume specified in the Act Credits for Cellulosic Biofuel
RINs associated with that fuel if the fuel or the projected volume of cellulosic
is in fact used in that manner without biofuel production based on EIA Whenever EPA sets the cellulosic
further blending. One exception to these estimates for that year. In the event that biofuel standard at a level lower than
provisions is that biodiesel blends in the projected volume is less than the that required in EISA, but greater than
which diesel constitutes less than 20 amount required in the Act, EPA may zero, EPA is required to provide a
volume percent are ineligible for RIN also reduce the applicable volume of the number of cellulosic credits for sale that
separation by a blender. While EPA total renewable fuel and advanced is no more than the volume used to set
understands that in the vast majority of biofuels requirement by the same or a the standard. Congress also specified the
cases, biodiesel is blended with diesel lesser volume. We will examine EIAs price for such credits: Adjusted for
in concentrations of 80 volume percent projected volumes and other available inflation, they must be offered at the
or less, there may be instances in which data including the required production
price of the higher of 25 cents per gallon
biodiesel is blended with diesel in outlook reports discussed in Section II.K
or the amount by which $3.00 per gallon
concentrations of more than 80 percent to decide the appropriate standard for
the following year. The outlook reports exceeds the average wholesale price of
biodiesel, but the blender is prohibited
from all renewable fuel producers will a gallon of gasoline in the United States.
from separating RINs under the RFS1
regulations. assist EPA in determining what the The inflation adjustment will be for
Thus, in order to account for cellulosic biofuel standard should be years after 2008. The inflation
situations in which biodiesel blends of and if the total renewable fuel and/or adjustment will be based on the
81 percent or greater may be used as advanced biofuel standards should be standard US inflation measure
transportation fuel, heating oil, or jet adjusted. For years where EPA Consumer Price Index for All Urban
fuel without ever having been owned by determines that the projected volume of Consumers (CPIU) for All Items
expenditure category as provided by the In the event the total volume of waiver credits price for the following
Bureau of Labor Statistics.27 conventional gasoline and diesel fuel year each November when and if we set
Congress afforded the Agency produced or imported in the country a cellulosic biofuel standard for the
considerable flexibility in implementing exceeds the projections used to set the following year that is based on
the system of cellulosic biofuel credits. standard, companies will still be able to achieving a lower volume of cellulosic
EISA states EPA; shall include such purchase waiver credits up to their biofuel use than is specified in EISA.
provisions, including limiting the cellulosic volume obligation. When For the 2010 compliance period, since
credits uses and useful life, as the setting a reduced cellulosic biofuel the cellulosic standard is lower than the
Administrator deems appropriate to standard EPA makes a determination level otherwise required by EISA, we
assist market liquidity and that the cellulosic volume specified in are also making cellulosic waiver credits
transparency, to provide appropriate EISA will not be met and that available to obligated parties for end-of-
certainty for regulated entities and determination is not based on how year compliance should they need them
renewable fuel producers, and to limit much nonrenewable motor fuel will be at a price of $1.56 per gallon-RIN. The
any potential misuse of cellulosic produced. EPA sets the standard based price for the 2011 compliance period, if
biofuel credits to reduce the use of other on the volumes in the Act and a necessary will be set when we announce
renewable fuels, and for such other projection of gasoline production to the 2011 cellulosic biofuel standard.
purposes as the Administrator ensure the obligation is broken up most 3. Application of Cellulosic Biofuel
determines will help achieve the goals equitably. EPA believes that Congress Waiver Credits
of this subsection. wanted all obligated parties to have
equal access to the waiver credits in the While the credit provisions of section
We have fashioned a number of 202(e) of EISA ensure that there is a
event of the waiver and did not want
limitations on the use of cellulosic that obligated parties to incur a deficit due predictable upper limit to the price that
reflect these considerations. to the timing of when they purchased cellulosic biofuel producers can charge
Specifically, the credits will be called waiver credits. for a gallon of cellulosic biofuel and its
Cellulosic Biofuel Waiver Credits (or Cellulosic Biofuel Waiver Credits, in assigned RIN, there may be
waiver credits) so that there is no the event of a waiver, will be offered in circumstances in which this provision
confusion with RINs or allowances used a generic format rather than a serialized has other unintended consequences.
in the acid rain program. Such waiver format, like RINs. Waiver credits can be This could occur in situations where the
credits will only be available for the purchased using procedures defined by cost of total renewable fuel RINs
current compliance year for which we the EPA, and at the time that an exceeds the cost of the cellulosic waiver
have waived some portion of the obligated party submits its annual credits. To prevent this, we sought
cellulosic biofuel standard, they will compliance demonstration to the EPA comment on and are finalizing an
only be available to obligated parties, and establishes that it owns insufficient additional restriction: An obligated
and they will be nontransferable and cellulosic biofuel RINs to meet its party may only purchase waiver credits
nonrefundable. Further, obligated cellulosic biofuel RVO. EPA will define from the EPA to the degree that it
parties may only purchase waiver these procedures with the U.S. Treasury establishes it owns insufficient
credits up to the level of their cellulosic before the end of the first annual cellulosic biofuel RINs to meet its
biofuel RVO less the number of compliance period. EPA will publish cellulosic biofuel RVO. This approach
cellulosic biofuel RINs that they own. A these procedures with the obligated forces obligated parties to apply all their
company owning cellulosic biofuel RINs party annual compliance report cellulosic biofuel RINs to their
and cellulosic waiver credits may use template. EPA will provide the forms cellulosic biofuel RVO before applying
both types of credits if desired to meet necessary to purchase the credits. EPA any waiver credits to their cellulosic
their RVOs, but unlike RINs obligated intends to provide options for obligated biofuel RVO.
parties will not be able to carry waiver parties to use Pay.Gov or if desired to Even with this restriction the
credits over to the next calendar year. mail payment to the U.S. Treasury. approach in the NPRM might not have
Obligated parties may not use waiver The wholesale price of gasoline used operated as intended. For instance, if
credits to meet a prior year deficit by EPA in setting the price of the waiver the combination of cellulosic biofuel
obligation. These restrictions help credits will be based on the average volume price and RIN price were to
ensure that waiver credits are not monthly bulk (refinery gate) price of become low compared to that for
overutilized at the expense of actual gasoline using data from the most recent general renewable fuel, a small number
renewable volume. twelve months of data from EIA of obligated parties could have
In the NPRM, EPA proposed that the available to EPA at the time it develops purchased more cellulosic biofuel than
credits could be usable for the advanced the cellulosic biofuel standard.28 EPA they need to meet their cellulosic
and total renewable standards similarly will use refinery gate price, U.S. Total biofuel RVOs and could have used the
to cellulosic biofuel RINs. Several Gasoline Bulk Sales (Price) by Refiners additional cellulosic biofuel RINs to
commenters stated this provision could from EIA in calculating the average, meet their advanced biofuel and total
displace advanced and total renewable since it is the price most reflective of renewable fuel RVOs. Other obligated
fuel that was actually produced which what most obligated parties are selling parties would then have had no access
would be against the intent of the Act, their fuel. EPA will use the most recent to cellulosic biofuel volume nor
and that unlike RINs a company should twelve months of data provided by EIA cellulosic biofuel RINs, and would have
only be permitted to use waiver credits to develop an average price on actual been forced to purchase waiver credits
volumes produced in the year prior to from the EPA. This situation would
to meet its cellulosic biofuel obligation.

We agree, and are limiting the use of the compliance year. In order to provide have had the net effect of waiver credits
waiver credits for compliance with only regulatory certainty, we will set the replacing advanced biofuels and/or
a companys cellulosic biofuel RVO. general renewable fuel rather than
28 More information on wholesale gasoline prices
cellulosic biofuel. Based on comments
can be found on the Department of Energys (DOE), received on the NPRM, EPA is placing
27 See U.S. Department of Labor, Bureau of Labor Energy Information Administrations (EIA) Web site
Statistics (BLS), Consumer Price Index Web site at: at: http://tonto.eia.doe.gov/dnav/pet/hist/ the additional restriction of only
http://www.bls.gov/cpi/. LeafHandler.ashx?n=PET&s=A103B00002&f=M. allowing the waiver credits to count
towards the cellulosic biofuel standard II.I.2. However, this approach would time generation of RINs and
and not the advanced or renewable fuel have been a more significant deviation transactions involving RINs starting July
standards. from the RIN generation and transfer 1, 2010. Real time means recordation
Moreover, under certain conditions it program structure that was developed within five (5) business days of
may be possible for the market price of cooperatively with stakeholders during generation or any transaction involving
general renewable fuel RINs to be RFS1. It would have provided cellulosic a RIN.
significantly higher than the market biofuel producers with significantly Quarterly reports are to be submitted
price of cellulosic biofuel RINs, as the more control over the sale and price of on the following schedule. Quarterly
latter is limited in the market by the cellulosic biofuel RINs, which was one reports include RIN Activity Reports
price of EPA-generated waiver credits of the primary concerns of obligated and, with EMTS, simplified reporting
according to the statutory formula parties during the development of RFS1. and certification of the RIN Generation
described in Section II.I.2 above. Under Therefore, EPA is treating the transfer of and RIN Transaction Reports.
some conditions, this could result in a cellulosic RINs in the same manner as
competitive disadvantage for cellulosic the other required volumes. TABLE II.J1QUARTERLY REPORTING
biofuel in comparison to corn ethanol, SCHEDULE
for example. For instance, if gasoline J. Changes to Recordkeeping and
prices at the pump are significantly Reporting Requirements Due date for
Quarter covered by report
higher than ethanol production costs, report
1. Recordkeeping
while at the same time corn-ethanol
Recordkeeping, including product JanuaryMarch ...................... May 31.
production costs are lower than AprilJune ............................. August 31.
cellulosic ethanol production costs, transfer documents (PTDs), will support
the enforcement of the use of RINs for JulySeptember .................... November 30.
profit margins for corn-ethanol OctoberDecember ............... February 28.
producers will be larger than for compliance purposes. Parties are
cellulosic ethanol producers. Under afforded significant freedom with regard Annual reports (covering January
these conditions, while obligated parties to the form that PTDs take. Product through December) would continue to
may still purchase cellulosic ethanol codes may be used as long as they are be due on February 28. The only annual
volume and its associated RINs rather understood by all parties, but they may report is the Obligated Party Annual
than waiver credits, cellulosic ethanol not be used for transfers to truck carriers Compliance Report.31
producers will realize lower profits than or to retailers or wholesale purchaser- Simplified, secure reporting is
corn-ethanol producers due to the upper consumers. Parties must keep copies of currently available through our Central
limit placed on the price of cellulosic all PTDs they generate and receive, as Data Exchange (CDX). CDX permits us
biofuel RINs through the pricing well as copies of all reports submitted to accept reports that are electronically
formula for waiver credits. For a newly to EPA and all records related to the signed and certified by the submitter in
forming and growing cellulosic biofuel sale, purchase, brokering or transfer or a secure and robustly encrypted fashion.
industry, this competitive disadvantage RINs, for five (5) years. Parties must Using CDX eliminates the need for wet
could make it more difficult for keep copies of records that relate to ink signatures and reduces the reporting
investors to secure funding for new program flexibilities, such as small burden on regulated parties. EMTS will
projects, threatening the ability of the business-oriented provisions. Upon also make use of the CDX environment.
industry to reach the statutorily request, parties are responsible for Due to the criteria that renewable fuel
mandated volumes. providing their records to the producers and importers must meet in
Finally, in the NPRM we sought Administrator or the Administrators order to generate RINs under RFS2, and
comment on a dual RIN approach to authorized representative. We reserve due to the fact that renewable fuel
cellulosic biofuel. In this approach, both the right to request to receive producers and importers must have
cellulosic biofuel RINs (with a D code documents in a format that we can read documentation about whether their
of 3) and waiver credits would have and use. feedstock(s) meets the definition of
only been applied to an obligated In Section III.A. of this preamble, we renewable biomass, we proposed
partys cellulosic biofuel RVO, but describe an EPAModerated several changes to the RIN Generation
producers of cellulosic biofuel would Transaction System (EMTS) for RINs. Report.32 We proposed to make the
also generate an additional RIN The new system allows for real-time report a more general report on
representing advanced biofuel (with a D recording of transactions involving renewable fuel production in order to
code of 5). The producer would have RINs. capture information on all batches of
only been required to transfer the renewable fuel, whether or not RINs are
2. Reporting
advanced biofuel RIN with a batch of generated for them. This final rule
cellulosic biofuel, and could retain the Producers and importers who adopts the proposed approach. All
cellulosic biofuel RIN for separate sale generate or take ownership of RINs shall renewable fuel producers and importers
to any party.29 The cellulosic biofuel submit RIN Transaction Reports 30 and/ above 10,000 gallons per year must
and its attached advanced biofuel RIN or RIN Generation Reports quarterly. report to EPA on each batch of their fuel
would then have competed directly Renewable fuel exporters and obligated and indicate whether or not RINs are
with other advanced biofuel and its parties shall submit their RIN generated for the batch. If RINs are
attached advanced biofuel RIN, while Transaction Reports quarterly, and RIN generated, the producer or importer is
the separate cellulosic biofuel RIN owners shall submit their RIN required to certify that his feedstock
Transaction Reports quarterly. EMTS meets the definition of renewable
would have an independent market

value that would have been effectively will be used by all parties to record real biomass. If RINs are not generated, the
limited by the pricing formula for producer or importer must state the
waiver credits as described in Section
30 For ease of reference, the current RFS (i.e.
reason for not generating RINs, such as
RFS1) form may be viewed at the EPA Fuels they have documentation that states that
Reporting Web site at the following URL: http://
29 The cellulosic biofuel RIN would be a www.epa.gov/otaq/regs/fuels/rfsforms.htm
31 For RFS1, this form is numbered RFS0300.
separated RIN with a K code of 2 immediately upon (accessed November 16, 2009). These forms will be
generation. updated for RFS2. 32 For RFS1, this form is numbered RFS0400.
their feedstock did not meet the producers of RIN-generating renewable equivalency of the credential must
definition of renewable biomass, or fuels, we are requiring that additional accompany the attest engagement.
the fuel pathway used to produce the reporting for these producers support Producers of renewable fuels,
fuel was such that the fuel did not the actual use of their products in the obligated parties, exporters, and any
qualify to generate RINs as a renewable transportation sector. We believe that party who owns RINs must arrange for
fuel. For each batch of renewable fuel one simple way to achieve this may be an annual attest engagement. The attest
produced, we require information about to add a requirement that producers of engagement report for any given year
the types and volumes of feedstock used renewable natural gas, electricity, and must be submitted to EPA by no later
and the types and volumes of co- propane add the name of the purchaser than May 31 of the following year.
products produced, as well as (e.g., the name of the wholesale Section 80.1464 of the regulations
information about the process or purchaser-consumer (WPC) or fleet) to specifies the attest engagement
processes used. This information is their RIN generation reports and then procedures to be followed.
necessary to confirm that the producer maintain appropriate records that K. Production Outlook Reports
or importer assigned the appropriate D further identify the purchaser and the
code to their fuel and that the D code details of the transaction. We are not Under this program we are requiring
was consistent with their registration requiring that a purchaser who is either the submission, starting in 2010, of
information. In this final rule, we adopt a WPC or an end user would have to annual production outlook reports from
the approach set forth in the notice of register under this scenario, unless that all domestic renewable fuel producers,
proposed rulemaking. party engages in other activities foreign renewable fuel producers who
In addition, we proposed two changes requiring registration under this register to generate RINs, and importers
for the RIN Transaction Report.33 First, program. of renewable fuels. These production
for reports of RINs assigned to a volume outlook reports will be similar in nature
of renewable fuel, the volume of 4. Attest Engagements to the pre-compliance reports required
renewable fuel must be reported. The purpose of an attest engagement under the Highway and Nonroad Diesel
Second, RIN price information must be is to receive third party verification of programs. These reports will contain
submitted for transactions involving information reported to EPA. An attest information about existing and planned
both separated RINs and RINs assigned engagement, which is similar to a production capacity, long-range plans,
to a renewable volume. This financial audit, is conducted by a and feedstocks and production
information was not collected under Certified Public Accountant (CPA) or processes to be used at each production
RFS1, but because we believe this Certified Independent Auditor (CIA) facility. For expanded production
information has great programmatic following agreed-upon procedures. We capacity that is planned or underway at
value to EPA, we proposed to collect it have found the information in attest each existing facility, or new production
for RFS2. As we explained in the facilities that are planned or underway,
engagements submitted under RFS1 to
proposed rule, price information may the progress reports will require
be extremely valuable as a compliance
help us to anticipate and appropriately information on: (1) Strategic planning;
monitoring tool. The approach adopted
react to market disruptions and other (2) Planning and front-end engineering;
in this final rule is identical to the
compliance challenges, will be (3) Detailed engineering and permitting;
approach adopted under the RFS1
beneficial when setting future (4) Procurement and construction; (5)
program,34 although the universe of
renewable standards, and will provide Commissioning and startup; (6)
obligated parties and renewable fuels
additional insight into the market when Projected volumes; (7) Contracts
producers is broader under this final
assessing potential waivers. Our currently in place (feedstocks, sales,
rule for RFS2. delivery, etc.); and (8) Whether or not
incomplete knowledge regarding RIN As with the RFS1 program, an attest
pricing for RFS1 adversely affected our feedstocks have been purchased. The
engagement must be conducted by an first five project phases are described in
ability to assess the general health and individual who is a Certified Public
direction of the market and overall EPAs June 2002 Highway Diesel
Accountant (CPA) or Certified Internal Progress Review report (EPA document
liquidity of RINs. Because we believe Auditor (CIA), who is independent of
the inclusion of price information in number EPA420R02016, located at:
the party whose records are being www.epa.gov/otaq/regs/hd2007/
reports will be beneficial to both EPA reviewed, and who will follow agreed-
and to regulated parties, this final rule 420r02016.pdf). In the proposed rule,
upon procedures to determine whether we asked for comment on the first five
includes that information element in underlying records, reported items, and
reports, as well as incorporating it as project phases, and whether or not they
transactions agree. The CPA or CIA will were appropriate for renewable fuels
part of the real time transactional generate a report as to their findings.
information collected via EMTS. production. We also proposed
We have received numerous questions additional phases in order to provide
3. Additional Requirements for and comments related to how attest better specificity for ascertaining
Producers of Renewable Natural Gas, engagements apply to foreign companies industry status. EPA plans to use this
Electricity, and Propane and whether or not a foreign accountant information in order to provide annual
In addition to the general reporting may perform the required agreed-upon summary reports regarding such
requirement listed above, we are procedures. EPA will accept an attest planned capacity.
requiring an additional item of reporting engagement performed by a foreign The full list of requirements for the
for producers of renewable natural gas, accountant who holds an equivalent production outlook reports is provided
electricity, and propane who choose to credential to an American CPA or CIA. in the regulations at 80.1449. The
generate and assign RINs. While A written explanation as to the foreign information submitted in the reports
producers of renewable natural gas, accountants qualifications and the will be used to evaluate the progress
electricity, and propane who generate that the industry is making towards the
34 See Regulation of Fuel and Fuel Additives:
and assign RINs are responsible for renewable fuels volume goals mandated
Renewable Fuel Standard Program, 72 FR 23900,
filing the same reports as other 2394923950 (May 1, 2007) for a detailed
by EISA. They will help EPA set the
discussion of attest engagement requirements under annual cellulosic biofuel standard and
33 For RFS1, this form is numbered RFS0200. RFS1. consider whether waivers would be
appropriate with respect to the We received comments that both should not rely too heavily upon the
advanced biofuel, biomass-based diesel, support and oppose the Production data (particularly for new biofuel
and total renewable fuel standards (see Outlook Reports, or some element of technologies). Some commenters noted
Section II.I of this preamble for more them. One commenter stated that EPA that they believe that requiring
discussion on this). Production outlook provided no reasonable explanation to Production Outlook Reports is
reports will be due annually by March require the information being requested duplicative in nature and/or a burden to
31 (except that for the year 2010, the for the reports; the commenter further the industry. These commenters also
report will be due September 1) and stated that such information is not believe that EPA already receives such
each annual report must provide needed to assist parties to come into information through the reporting that
projected information, including any compliance. Another commenter stated currently exists, and that EPA could
updated information from the previous that the renewable fuels industry cannot also obtain this information from DOEs
years report. confidently project what will happen in Energy Information Administration
As mentioned in the preamble to the 2010, or even 2020, because there are (EIA) and the National Biodiesel Board
proposed rule, EPA currently receives too many unknowns, no previous (NBB). Other commenters expressed
data on projected flexible-fuel vehicle history of renewable fuels mandates, concern over reporting such
(FFV) sales and conversions from and no sense of continued tax rebate. confidential and strategic information
vehicle manufacturers. These are The commenter suggested that until the (even as confidential business
helpful in providing EPA with industry operates for a few years under information (CBI)), and that information
information regarding the potential the RFS2 carve-outs and the issues on out to 2022 seems excessive and useless;
market for renewable fuels. We the tax rebates for renewables are and that the reports should be limited
requested comment on whether we resolved, the industry cannot develop a to just domestic and foreign producers
should require the annual submission of meaningful outlook forecast. The of renewable fuels but not importers (as
data to facilitate our evaluation of the commenter further suggested that EPA they tend to import renewable fuels
ability of the distribution system to instead hire a consultant who can look based on variable economic conditions
deliver the projected volumes of at the big picture and provide a more and will not likely have the ability to
biofuels to petroleum terminals that are meaningful evaluation than could the reliably predict their future import
needed to meet the RFS2 standards, the individual members of the biofuels volumes). The information that
extent to which such information is industry. However, as discussed above, currently exists from other sources is
already publicly available or can be while these reports will have their current and historical information. For
purchased from a proprietary source, limitations, we believe they will provide the purposes of setting future standards,
and the extent to which such publicly the best and most up to date information we need to have information on future
available or purchasable data would be available for us to use in setting the plans and projections. We understand
sufficient for EPA to make its standards and considering any waiver that reality will always be different from
determination. We further requested requests. We will of course also look to the projections, but they will still give
comment on the parties that should be other publicly available information, us the best possible source of
required to report to EPA, and data and may consider using contractors to information. Furthermore, by having
requirements. We believe that publicly help out in this regard, but it cannot projections five years out into the
available information on E15, E85, and replace the need for the production future, and then obtaining new reports
other refueling facilities is sufficient for outlook report data. every year, we will be able to assess the
us to make a determination about the A commenter noted that this
trends in the data and reports to better
adequacy of such facilities to support provision is similar to reports required
utilize them over time.
the projected volumes that would be under the diesel program. The
used to satisfy the RFS2 standards. commenter further stated that if the Some commenters have expressed
Therefore, we are not finalizing such a required information can be captured by concern that the information required
requirement. EMTS, the commenter fully supports for Production Outlook Reports is not
While we understand that the types of this requirement. However, the needed, wont provide useful
projections we request in the Outlook commenter stated that it is opposed to information because it is speculative, or
Reports could be somewhat speculative some of the required elements of the asks for information that could be
in nature, we believe that the reports for planned expanded or new sensitive/confidential. However, we
projections will provide us with the production (strategic planning, planning continue to believe that such
most reliable information possible to and front-end engineering, detailed information is essential to our annual
inform the annual RFS standards and engineering and permitting, cellulosic biofuel standard setting, and
waiver considerations. Further, we procurement and construction, and consideration of whether waivers
believe this information will be more commissioning and start-up); these are should be provided for other standards.
useful to us than other public an aspect of financial planning that the All information submitted to EPA will
information that is released in other commenter believes EPA has no be treated as confidential business
contexts (e.g., announcements for jurisdiction over and cannot derive information (CBI), and if used by EPA
marketing purposes). As mentioned basis from EISA in any form regardless in a regulatory context will only be
above in Section II.I, we believe that we of interpretation. As explained above, reported out in very general terms. As
can use this information to supplement this information will be used by EPA to with our Diesel Pre-compliance Reports,
other available information (such as inform us for setting the standards on an we fully expect that the information will
volume projections from EIA) to help set annual basis and in responding to any be somewhat speculative in the early
the standard for the following year. waiver petitions. It will not be used to reports, and we will weight it
Specifically, it will provide more assess compliance with the program. accordingly. As the program progresses,
accurate information for setting the The other provisions for registration, however, information submitted for the
cellulosic biofuel and biomass-based recordkeeping and reporting serve that reports will continue to improve. We
diesel standards, and any adjustments to purpose. believe that any information, whether
the advanced biofuel and total Another commenter stated that the speculative or concrete, will be helpful
renewable fuel standards. reports should be required, but that EPA for the purposes described above. Thus
we are finalizing Production Outlook As discussed above, the regulations A. The EPA Moderated Transaction
Reports, and the required elements at prohibit any party from creating or System (EMTS)
80.1449. transferring invalid RINs. These invalid The EPA Moderated Transaction
RIN provisions apply regardless of the System (EMTS) emerged as a result of
L. What Acts Are Prohibited and Who Is
good faith belief of a party that the RINs our experiences with and lessons
Liable for Violations? are valid. These enforcement provisions learned from implementing RFS1.
The prohibition and liability are necessary to ensure the RFS2 Recognizing that the addition of
provisions under this rule are similar to program goals are not compromised by significant volumes of renewable fuels
those of the RFS1 program and other illegal conduct in the creation and and expansion of renewable fuel
fuels programs in 40 CFR part 80. The transfer of RINs. categories were adding complexity to an
rule identifies certain prohibited acts, As in other motor vehicle fuel credit already stressed system, EMTS was
such as a failure to acquire sufficient programs, the regulations address the
introduced as a new approach for
RINs to meet a partys RVOs, producing consequences if an obligated party is
managing RINs in our NPRM. We
or importing a renewable fuel that is not found to have used invalid RINs to
received broad acceptance of the EMTS
assigned a proper RIN category (or D demonstrate compliance with its RVO.
concept in the public comments as well
Code), improperly assigning RINs to In this situation, the obligated party that
as support for its expeditious
renewable fuel that was not produced used the invalid RINs will be required
implementation. This section describes
with renewable biomass, failing to to deduct any invalid RINs from its
the need for EMTS, implementation of
assign RINs to qualifying fuel, or compliance calculations. An obligated
EMTS, and an explanation of how
creating or transferring invalid RINs. party is liable for violating the standard
EMTS will work. By implementing
Any person subject to a prohibition is if the remaining number of valid RINs
was insufficient to meet its RVO, and EMTS, we believe that we will be able
liable for violating that prohibition. to greatly reduce RIN-related errors
Thus, for example, an obligated party is the obligated party might be subject to
monetary penalties if it used invalid while efficiently and accurately
liable if the party failed to acquire managing the universe of RINs. EMTS
sufficient RINs to meet its RVO. A party RINs in its compliance demonstration.
In determining what penalty is will save considerable time and
who produces or imports renewable resources for both industry and EPA.
fuels is liable for a failure to assign appropriate, if any, we would consider
a number of factors, including whether This is most evident considering that
proper RINs to qualifying batches of the system virtually eliminates multiple
renewable fuel produced or imported. the obligated party did in fact procure
sufficient valid RINs to cover the deficit sources of administrative errors,
Any party, including an obligated party, resulting in a reduction of costs and
is liable for transferring a RIN that was created by the invalid RINs, and
whether the purchaser was indeed a effort expended to correct and
not properly identified. regenerate product transfer documents,
good faith purchaser based on an
In addition, any person who is subject documentation and recordkeeping, and
investigation of the RIN transfer. A
to an affirmative requirement under this resubmitting reports to EPA. Use of
penalty might include both the
program is liable for a failure to comply EMTS will result in fewer report
economic benefit of using invalid RINs
with the requirement. For example, an resubmissions and easier reporting for
and/or a gravity component.
obligated party is liable for a failure to Although an obligated party is liable industry, while leaving fewer reports to
comply with the annual compliance under our proposed program for a be processed by EPA. Industry will
reporting requirements. A renewable violation if it used invalid RINs for spend less time and effort validating the
fuel producer or importer is liable for a compliance purposes, we would RINs they procure with greater
failure to comply with the applicable normally look first to the generator or assurance and confidence in the RIN
batch reporting requirements. Any party seller of the invalid RINs both for market. EPA will spend less time
subject to recordkeeping or product payment of penalty and to procure tracking down invalid RINs and
transfer document (PTD) requirements sufficient valid RINs to offset the invalid working with regulated parties on
is liable for a failure to comply with RINs. However, if, for example, that complex remedial actions. This is
these requirements. Like other EPA party was out of business, then attention possible because EMTS removes
fuels programs, this rule provides that a would turn to the obligated party who management of the 38-digit RIN from
party who causes another party to would have to obtain sufficient valid the hands of the reporting community.
violate a prohibition or fail to comply RINs to offset the invalid RINs. At the same time, EPA and the reporting
with a requirement may also be found community will be working with a
liable for the violation. III. Other Program Changes standardized system, reducing stresses
EPAct amended the penalty and In addition to the regulatory changes and development costs on IT systems.
injunction provisions in section 211(d) we are finalizing today in response to We received comments suggesting
of the Clean Air Act to apply to comments received on the proposed that EPA remove the attest engagement
violations of the renewable fuels rule and EISA (which are designed to requirements and certain recordkeeping
requirements in section 211(o). implement the provisions of RFS2), requirements due to the use of EMTS.
Accordingly, any person who violates there are a number of other changes to While we believe that EMTS will
any prohibition or requirement of this the RFS program that we are making. simplify and reduce burdens on the
rule is subject to civil penalties of up to We believe that these changes will regulated community, it is important to
$37,500 per day and per each individual increase flexibility, simplify point out that EMTS is strictly a RIN
violation, plus the amount of any compliance, or address RIN transfer tracking and managing tool designed to
economic benefit or savings resulting issues that have arisen since the start of facilitate reporting under the Renewable
from each violation. Under this rule, a the RFS1 program. Throughout the Fuel Standard program. Product transfer
failure to acquire sufficient RINs to meet rulemaking process, we also documents are the commercial
a partys renewable fuels obligation investigated impacts on small documents used to memorialize
constitutes a separate day of violation businesses and we are finalizing transactions of RINs between a buyer
for each day the violation occurred provisions to address the impacts of the and a seller in the market. The EMTS
during the annual averaging period. program on them. will rely on references to these
documents, which can take many forms, with a single standard. With RFS2, there With EMTS, RIN transactions are
but it is not capable of replacing those are four standards. RINs must be required to be verified and certified on
documents. Attest engagements are used generated to identify one of the fuel a quarterly basis. EMTS will provide
to verify that the records required to be categories: cellulosic biofuel, cellulosic summaries for parties to verify, report,
kept by regulated parties, including diesel, biomass-based diesel, advanced and certify transactions to EPA through
information retained by a regulated biofuel, and renewable fuels (e.g., corn the fuels reporting system, DCFuels.
party as well as information reported to ethanol). (For a more detailed Additional information may be required
EPA such as laboratory test results, discussion of RINs, see Section II.A of to be added to the EMTS provided
contracts between renewable fuel/RIN this preamble.) The different types of report. This additional certification step
buyers and sellers, feedstock RINs will be managed in the EMTS. allows parties to verify that the
documentation, etc. is correctly information sent to EMTS is accurate.
maintained or reported. The information 2. Implementation of the EPA However, parties may choose to review
reported via EMTS is but a subset of the Moderated Transaction System their data by checking their EMTS
information required to be maintained We proposed that EMTS would be an account at any time.
in a regulated partys records, and both opt-in for the calendar year 2010 and 3. How EMTS Will Work
PTDs and attest engagements are mandatory for calendar year 2011. We
necessary to ensure that the information received many comments strongly EMTS will be a closed, EPA-
collected and tracked in EMTS concurs supporting EMTS implementation with moderated system that provides a
with actual events. the start of the RFS2 program to ensure mechanism for screening RINs and a
confidence and simplicity in an structured environment for conducting
1. Need for the EPA Moderated RIN transactions. Screening of RINs
Transaction System increasingly complex program. We also
received comments that EMTS means that parties can have greater
In implementing RFS1, we found that implementation with RFS2 is necessary confidence that the RINs they handle
the 38-digit standardized RINs proved to are genuine. Although screening cannot
so industry would not have to create a
be confusing to many parties in the remove all human error, we believe it
new system to handle RFS2 RINs for
distribution chain. Parties made various can remove most of it.
2010 and then move to EMTS for 2011 We received comments opposing the
errors in generating and using RINs. For
while still handling RFS1 RINs. 3 day time window for reporting
example, parties transposed digits
Potentially, three RIN transaction transactions to the EMTS. One
within the RIN and incorrectly
systems would exist during transition commenter requested 7 days from the
referenced volume numbering. Also,
from RFS1 to RFS2 if EMTS could not event for sellers to report a transaction
parties created alphanumeric RINs,
be implemented with the start of the and 7 days after that for the buyer to
despite the fact that RINs were
RFS2 program. EPA agrees that this accept the transaction. In order for this
supposed to consist of all numbers.
Once an error is made within a RIN, three system issue would be an undue to be a real time system, we must
the error propagates throughout the burden to industry as it would require require that the information comes in a
distribution system. Correcting an error industry to create two systems within a timely manner. One commenter
can require significant time and 12 month period. EMTS development requested 10 days from the event to
resources and usually involves many started with the introduction of the send information to EMTS. EPA has
steps. Not only must reports to EPA be NPRM, and has been in beta testing concluded that five days, or a business
corrected, underlying records and since early November with a select week, is an appropriate amount of time
reports reflecting RIN transactions must group of different industry stakeholders. for both parties to receive or provide
also be located and corrected to reflect Industry feedback has been necessary documentation in order to
discovery of an error. Because reporting overwhelmingly strong for the interact with EMTS accurately and
related to RIN transactions under RFS1 implementation of EMTS with the start timely. Real time will be defined as
was only on a quarterly basis, a RIN of RFS2. With this final rule, EPA within five (5) business days of a
error could exist for several months decided that EMTS will start on the reportable event (e.g., generation and
before being discovered. same date when RFS2 RINs are required assignment of RINs, transfer of RINs).
Incorrect RINs are invalid RINs. If to be generated. In addition, to ensure Parties who use EMTS must first
parties in the distribution system cannot that parties will have enough time to register with EPA in accordance with
track down and correct errors in a incorporate RFS2 and EMTS the RFS2 registration program described
timely manner, then all downstream requirements into private RIN tracking in Section II.C of this preamble. Parties
parties that traded the invalid RIN are systems, the generation of RFS2 RINs will also have to create an account (i.e.,
in violation. Because RINs are the basic will begin on July 1, 2010. Therefore, all register) via EPAs Central Data
unit of compliance for the RFS program, RFS regulated parties are required to use Exchange (CDX), as users will access
it is important that parties have EMTS starting July 1, 2010. EMTS via CDX. CDX is a secure and
confidence when generating and using RIN transactions are required to be central electronic portal through which
them. verified and certified on a quarterly parties may submit compliance reports.
All parties in the RFS1 and the RFS2 basis. EMTS will provide summaries for Parties must establish an account with
regulated community are required to use parties to verify, report, and certify EMTS by July 1, 2010 or 60 days prior
RINs. Under RFS2, we foresee that transactions to EPA through the fuels to engaging in any transaction involving
regulated party community will reporting system, DCFuels. Additional RINs, whichever is later. Once
substantially expand. Newer regulated information may be required to be registration occurs, individual accounts
parties of an already complex system added to the EMTS provided summary. will be established within EMTS and
necessitate EMTS. These parties include This additional certification step allows the system will enable a party to submit
renewable fuel producers and importers, parties to verification that the transactions based on their registration
obligated parties, exporters, and other information sent to EMTS is accurate. information.
RIN owners; (typically marketers of However, parties may choose to review In EMTS, the screening and
renewable fuels and blenders). Under their data by checking their EMTS assignment of RINs will be made at the
RFS1, all RINs were used to comply account at anytime. logical point, i.e., the point when RINs
are generated through production or price information must be accurate and pending status from a sellers account.
importation of renewable fuel. A rounded to the nearest cent (U.S. Dollar) Instead, the buy transactions will be
renewable producer will electronically at the time of sending the transactional queued and checked periodically to see
submit, in real time, a volume of information to EMTS. if a sell transaction was posted by the
renewable fuel produced or imported, as We received one comment requesting seller. If a buy is posted without a
well as a number of the RINs generated publication of security precautions matching sell transaction, then the seller
and assigned. EMTS will automatically taken by EPA to protect EMTS from will be notified that a buy transaction is
screen each batch and either reject the attacks. EPA cannot provide security pending. Both buy and sell transactions
information or allow RINs created in the information to the public because must be matched within a set number of
RIN generators account as one of the providing such information may create days from the submission date or they
five types of RINs. security vulnerabilities. However, EMTS will expire. Transactions will expire 7
We received comments supporting the will be compliant with the appropriate days after the submission of the file.
RFS1 approach that allows producers security requirements for all federal Since both parties are required to
and importers to generate RINs at the agency information technology systems. submit information within 5 days, we
renewable fuel point of sale. EPA Also as with RFS1, there is no good allow the full 5 days to expire plus 2
realizes that this is an industry practice faith provision to RIN ownership. An days in the case of late submissions.
and this flexibility will still be allowed underlying principle of RIN ownership In summary, the advantage to
for RIN generators, but only if applied is still one of buyer beware and RINs implementing EMTS is that parties may
consistently. may be prohibited from use at any time engage in RIN transactions with a high
After RINs have entered the system, if they are found to be invalid. Because degree of confidence, errors will be
parties may then trade them based on of the buyer beware aspect, we will virtually eliminated, and everyone
agreements outside of EMTS. One major offer the option for a buyer to accept or engaging in RIN transactions will have
advantage of EMTS, over the RFS1 reject RINs from specific RIN generators a simplified environment in which to
system, is that the system will simplify or from classes of RIN generators. work, which should minimize the level
trading by allowing RINs to be traded of resources needed for implementation.
generically. Only some specifying 4. A Sample EMTS Transaction
information will be needed to trade This sample illustrates how two B. Upward Delegation of RIN-Separating
RINs, such as RIN quantity, fuel type, parties may trade RINs in EMTS: Responsibilities
RIN assignment, RIN year, RIN price or (1) Seller logs into EMTS and posts a Since the start of the RFS program on
price per gallon. The unique sale of 10,000 RINs to Buyer at X price. September 1, 2007, there have been a
identification of the RIN will exist For this example, assume the RINs were number of instances in which a party
within EMTS, but parties engaging in generated in 2010 and were assigned to who receives RINs with a volume of
RIN transactions will no longer have to 10,000 gallons of Renewable fuel renewable fuel is required to either
worry about incorrectly recording or (D=6). Sellers RIN account for separate or retire those RINs, but views
using 38-digit RIN numbers. The actual Renewable fuel (D=6) is put into a the recordkeeping and reporting
items of transactional information pending status of 10,000 with the requirements under the RFS program as
covered under RFS2 are very similar to posting of the sale to Buyer. Buyer an unnecessary burden. Such
those reported under RFS1. The RIN receives automatic notification of the circumstances typically might involve a
price is one of the new pieces of pending transaction. renewable fuel blender, a party that uses
transactional information required to be (2) Buyer logs into EMTS. Buyer sees renewable fuel in its neat form, or a
submitted under RFS2. the sale transaction pending. Assuming party that uses renewable fuel in a non-
We received several adverse it is correct, Buyer accepts it. Upon highway application and is therefore
comments strongly opposing the acceptance, Buyers RIN account for required to retire the RINs (under RFS1)
collection of price information due to Renewable fuel (D=6) RINs is associated with the volume. In some of
Confidential Business Information (CBI) automatically increased by 10,000 2010 these cases, the affected party may
concerns, other services being able to assigned RINs sold at X price. purchase and/or use only small volumes
provide this information, marketplace (3) After Seller has posted the sale of renewable fuel and, absent the RFS
delays and undue stress on the EMTS and Buyer has accepted it, EMTS program, would be subject to few (if any
from disagreements in RIN price. We automatically notifies both Buyer and other) EPA regulations governing fuels.
received one comment strongly Seller that the transaction has been fully This situation will become more
supporting EPA collecting this completed. prevalent with the RFS2 rule, as EISA
information. EPA decided that the price Under EMTS, the seller will always added diesel fuel to the RFS program.
information has great programmatic have to initiate any transaction. The With the RFS1 rule, small blenders
value because it will help us anticipate specific amount of RINs are put into a (generally farmers and other parties that
and appropriately react to market pending status when the seller posts the use nonroad diesel fuel) blending small
disruptions and other compliance sale. The buyer must confirm the sale in amounts of biodiesel were not covered
challenges, assess and develop order to have the RINs transferred to the under the rule as EPAct mandated
responses to potential waivers, and buyers account. Transactions will renewable fuel blending for highway
assist in setting future renewable fuel always be limited to available RINs. gasoline only. EISA mandates certain
standards. In addition, EPA decided that Notification will automatically be sent amounts of renewable fuels to be
highly summarized price information to both the buyer and the seller upon blended into all transportation fuels
(e.g., the average price of RINs traded completion of the transaction. EPA which includes highway and nonroad
nationwide) may be valuable to considers any sale or transfer as diesel fuel. Thus, parties that were not
regulated parties, as well, and may help complete upon acknowledgement by the regulated under the RFS1 rule who only
them to anticipate and avoid market buyer. We will also allow buyers to blend a small amount of renewable fuel
disruptions. Also, EPA will not require submit their acknowledgement prior to (and, as mentioned above, are generally
the matching of the exact RIN price to a seller initiating the transaction. not subject to EPA fuels regulations)
alleviate the burden of resubmission However, these buy transactions will will now be regulated by the RFS
due to price mistakes. However, the not initiate any RINs being put into a program.
Consequently, we believe it is reporting partys reports) authorizing requirements as long as they do not own
appropriate, and thus we are finalizing the upward delegation. Copies of these RINs or voluntarily generate and assign
as proposed, to permit blenders who statements must be retained as records RINs. This provision is intended to
only blend a small amount of renewable by both parties. The supplier would allow pilot and demonstration plants of
fuel to allow the party directly upstream then be allowed to retain ownership of new renewable fuel technologies to
to separate RINs on their behalf. Such a RINs assigned to a volume of renewable focus on developing the technology and
provision is consistent with the fact that fuel when that volume is transferred, obtaining financing during these early
the RFS program already allows under the condition that the RINs be stages of their development without
marketers of renewable fuels to assign separated or retired concurrently with having to comply with the RFS2
more RINs to some of their sold product the transfer of the volume. This regulations.
and no RINs to the rest of their sold statement would apply to all volumes of
product. We believe that this provision renewable fuel transferred between the D. 20% Rollover Cap
will eliminate undue burden on small two parties. Thus, the two parties would EISA does not change the language in
parties who would otherwise not be enter into a contract stating that the CAA section 211(o)(5) stating that
regulated by this program. This supplier has RIN-separation renewable fuel credits must be valid for
provision is solely for the case of responsibilities for all transferred showing compliance for 12 months as of
blenders who blend and trade less than volumes between the two parties, and the date of generation. As discussed in
125,000 total gallons of renewable fuel no additional permissions from the the RFS1 final rulemaking, we
per year (i.e., a company that blends small blender would be needed for any interpreted the statute such that credits
100,000 gallons and trades another volumes transferred. A blender may would represent renewable fuel
100,000 gallons would not be able to use enter into such an agreement with as volumes in excess of what an obligated
this provision) and is available to any many parties as they wish. party needs to meet their annual
blender who must separate RINs from a compliance obligation. Given that the
C. Small Producer Exemption
volume of renewable fuel under renewable fuel standard is an annual
80.1429(b)(2). Under the RFS1 rule, parties who
standard, obligated parties determine
We requested comment in the NPRM produce or import less than 10,000
compliance shortly after the end of the
on this concept, the 125,000 gallon gallons of renewable fuel in a year are
year, and credits would be identified at
threshold, and appropriate not required to generate RINs for that
that time. In the context of our RIN-
documentation to authorize this upward volume, and are not required to register
based program, we have accomplished
delegation. In general, those that with the EPA if they do not take
the statutes objective by allowing RINs
commented on this provision support ownership of RINs generated by other
to be used to show compliance for the
the idea of upward delegation for small parties. These producers and importers
year in which the renewable fuel was
blenders, though one commenter stated are also exempt from registration,
produced and its associated RIN first
that EPA should not allow small entities reporting, recordkeeping, and attest
engagement requirements. In the generated, or for the following year.
to delegate their RIN-related
preamble to the proposed rule, we RINs not used for compliance purposes
responsibilities upward. Those
requested comment on whether or not in the year in which they were
commenters that support the upward
this 10,000 gallon threshold was generated will by definition be in excess
delegation provision stated that it
appropriate. One commenter suggested of the RINs needed by obligated parties
should be limited to small blenders only
that we retain the 10,000 gallon in that year, making excess RINs
and should only be for delegating to the
threshold as-is. Another commenter equivalent to the credits referred to in
party directly upstream. A few
supported the concept of less section 211(o)(5). Excess RINs are valid
commenters stated that they believe the
burdensome requirements for small for compliance purposes in the year
125,000 gallon threshold is appropriate;
producers, but suggested that these following the one in which they initially
while others commented that it should
be higher. We believe that the 125,000 entities should, at a minimum, be came into existence. RINs not used
gallon limit strikes the correct balance required to generate RINs for all within their valid life will thereafter
between providing relief to small qualifying renewables. We are cease to be valid for compliance
blenders, while still ensuring that non- maintaining this exemption under the purposes.
obligated parties cannot unduly RFS2 rule for parties who produce or In the RFS1 final rulemaking, we also
influence the RIN market. import less than 10,000 gallons of discussed the potential rollover of
We did not receive any comments on renewable fuel per year. excess RINs over multiple years. This
appropriate documentation, however a In addition to the permanent can occur in situations wherein the total
couple commenters suggested that we exemption for those producers and number of RINs generated each year for
retain the proposed annual importers who produce or import less a number of years in a row exceeds the
authorization between the blender and than 10,000 gallons of renewable fuel number of RINs required under the RFS
the party directly upstream, as well as per year, we are also finalizing a program for those years. The excess
allowing a small blender to enter into temporary exemption for renewable fuel RINs generated in one year could be
arrangements with multiple suppliers producers who produce less than used to show compliance in the next
on a transaction-by-transaction basis. 125,000 gallons of renewable fuel each year, leading to the generation of new
Please see Chapter 5 of the Summary year from new production facilities. excess RINs in the next year, causing the
and Analysis of Comments Document These producers are not required to total number of excess RINs in the
for more discussion on the comments generate and assign RINs to batches of market to accumulate over multiple
received and our responses to those renewable fuel for a period of up to years despite the limit on RIN life.
comments. three years, beginning with the calendar When renewable fuel volumes are being
We are also finalizing, as stated in the year in which the production facility produced that exceed the RFS2
preamble to the proposed rule, that for produces its first gallon of renewable standards, the rollover issue could
upstream delegation, both parties must fuel. Such producers are also exempt undermine the ability of a limit on
sign a quarterly written statement from registration, reporting, credit life to guarantee an ongoing
(which must be included with the recordkeeping, and attest engagement market for renewable fuels.
To implement EISAs restriction on In the extreme, removal of the cap 1. BackgroundRFS1

the life of credits and address the entirely would allow obligated parties to a. Small Refinery Exemption
rollover issue, the RFS1 final roll over up to one years worth of their
rulemaking implemented a 20% cap on obligations indefinitely. CAA section 211(o)(9), enacted as part
the amount of an obligated partys RVO of EPAct, provides a temporary
In general, commenters on the NPRM exemption to small refineries (those
that can be met using previous-year
reiterated the positions that they raised refineries with a crude throughput of no
RINs. Thus each obligated party is
required to use current-year RINs to during development of the RFS1 more than 75,000 barrels of crude per
meet at least 80% of its RVO, with a program. While one renewable fuel day, as defined in section 211(o)(1)(K))
maximum of 20% being derived from producer requested that the rollover cap through December 31, 2010.35
previous-year RINs. Any previous-year be left at 20%, most producers Accordingly, the RFS1 program
RINs that an obligated party may have requested that the rollover cap be regulations exempt gasoline produced
that are in excess of the 20% cap can be reduced to 0%, such that compliance by small refineries from the renewable
traded to other obligated parties that with the standards applicable in a given fuels standard (unless the exemption
need them. If the previous-year RINs in year could only be demonstrated using was waived), see 40 CFR 80.1141. EISA
excess of the 20% cap are not used by RINs generated in that year. In contrast, did not alter the small refinery
any obligated party for compliance, they refiners requested that the rollover cap exemption in any way.
will thereafter cease to be valid for be either eliminated, such that any b. Small Refiner Exemption
compliance purposes. number of previous year RINs could be
As described in the NPRM, EISA does used for current year compliance, or at As mentioned above, EPAct granted a
not modify the statutory provisions least raised to 40 or 50 percent. Small temporary exemption from the RFS
regarding credit life, and the volume refiners requested that the cap be raised program to small refineries through
changes by EISA also do not change at December 31, 2010. In the RFS1 final
for small refiners only to accommodate
least the possibility of large rollovers of rule, we exercised our discretion under
the competitive disadvantage with
RINs for individual obligated parties. As section 211(o)(3)(B) and extended this
respect to the RIN market that they temporary exemption to the few
a result we proposed to maintain the
regulatory requirement for a 20% believe they experience in comparison remaining small refiners that met the
rollover cap under the new RFS2 to larger refiners. Small Business Administrations (SBA)
program, and to apply this cap Based on the comments received, we definition of a small business (1,500
separately to all four RVOs under RFS2. believe that the 20% level continues to employees or less company-wide) but
However, we took comment on provide the appropriate balance did not meet the EPAct small refinery
changing the level of the cap to some between, on the one hand, allowing definition as noted above.
alternative value lower or higher than legitimate RIN carryovers and protecting 2. Statutory Options for Extending
20%. against potential supply shortfalls that
A lower cap could provide a greater Relief
could limit the availability of RINs, and
incentive for parties with excess RINs to on the other hand ensuring an annual There are two provisions in section
sell them rather than hold onto them, demand for renewable fuels as 211(o)(9) that allow for an extension of
increasing the availability of RINs for the temporary exemption for small
envisioned by EISA. Therefore, we are
parties that need them for compliance refineries beyond December 31, 2010.
continuing the 20% rollover cap for
purposes. But a lower cap would also One provision involves a study by the
reduce flexibility for obligated parties obligated parties for the RFS program. Department of Energy (DOE) concerning
attempting to minimize the costs of E. Small Refinery and Small Refiner whether compliance with the renewable
compliance with increasing annual Flexibilities fuel requirements would impose
volume requirements, particularly if disproportionate economic hardship on
there are concerns that the RIN market This section discusses flexibilities for small refineries, and would grant an
may be tighter in the future than it is small refineries and small refiners for automatic extension of at least two years
currently. the RFS2 rule. As explained in the for small refineries that DOE determines
Conversely, the increasing annual discussion of our compliance with the would be subject to such
volume requirements in EISA make it Regulatory Flexibility Act below in disproportionate hardship (per section
less likely that renewable fuel producers Section XI.C and in the Final Regulatory 211(o)(9)(A)(ii)). If the DOE study
will overcomply, and as a result it is Flexibility Analysis in Chapter 7 of the determines that such hardship exists,
less likely that there will be an excess RIA, we considered the impacts of the then section 211(o)(9)(A)(ii) (which was
of RINs in the market. Under these RFS2 regulations on small businesses retained in EISA) provides that EPA
circumstances, there is little shall extend the exemption for a period
(small refiners). Most of our analysis of
opportunity for RINs to build up in the of at least two years.
small business impacts was performed
market, and the rollover cap would have The second provision, at section
less of an impact on the market as a as a part of the work of the Small
Business Advocacy Review Panel 211(o)(9)(B), authorizes EPA to grant an
whole. Thus a higher cap might be extension for a small refinery based
warranted. However, while a higher cap (SBAR Panel, or the Panel) convened
upon disproportionate economic
would create greater flexibility for some by EPA for this rule, pursuant to the
hardship, on a case-by-case basis. A
obligated parties, it could also create Regulatory Flexibility Act as amended
small refinery may, at any time, petition
disruptions in the RIN market as parties by the Small Business Regulatory
EPA for an extension of the small
with excess RINs would have a greater Enforcement Fairness Act of 1996 refinery exemption on the basis of
opportunity to hold onto them rather (SBREFA). The Final Report of the Panel disproportionate economic hardship.
than sell them. Parties without direct is available in the rulemaking docket. EPA is to consult with DOE and
access to RINs through the purchase and For the SBREFA process, we conducted consider the findings of the DOE small
blending of renewable fuels would be outreach, fact-finding, and analysis of
placed at a competitive disadvantage in the potential impacts of our regulations 35 Small refineries are also allowed to waive this
comparison to parties with excess RINs. on small business refiners. exemption.
refinery study in evaluating such issue of an extension of time for RFS2. Therefore, absent further
petitions. These petitions may be filed compliance for small refineries, information that may be provided
at any time, and EPA has discretion to temporarily exempting them from through the petition process, there does
determine the length of any exemption renewable fuel obligations through not currently appear to be a basis under
that may be granted in response. December 31, 2010. As discussed above, the statute for granting further
the statute also includes two specific compliance extensions to small
3. The DOE Study/DOE Study Results
provisions describing the basis and refineries. If DOE revises its study and
As discussed above, EPAct required manner in which further extensions of comes to a different conclusion, EPA
that DOE perform a study by December this exemption can be provided. In the
31, 2008 on the impact of the renewable can revisit this issue.
RFS1 rulemaking, EPA considered
fuel requirements on small refineries whether it should provide additional 5. Congress-Requested Revised DOE
(section 211(o)(9)(A)(ii)(I)), and whether relief to the limited number of small Study
or not the requirements would impose refiners who were not covered by the
a disproportionate economic hardship small refinery provision, by providing In their written comments, as well as
on these refineries. In the small refinery them a temporary exemption consistent in discussions we had with them on the
study, EPACT 2005 Section 1501 Small with that provided by Congress for proposed rule, small refiners indicated
Refineries Exemption Study, DOEs small refineries. EPA exercised its that they did not believe that EPA
finding was that there is no reason to discretion under section 211(o)(3) and should rely on the results of the DOE
believe that any small refinery would be provided such relief. Thus, in RFS1, small refinery study to inform any
disproportionately harmed by inclusion EPA did not modify the relief provided decisions on small refiner provisions.
in the proposed RFS2 program. This by Congress for small refineries, but did Small refiners generally commented that
finding was based on the fact that there exercise its discretion to provide the they believe that the study was flawed
appeared to be no shortage of RINs same relief specified by statute to a few and that the conclusions of the study
available under RFS1, and EISA has additional parties. were reached without adequate analysis
provided flexibility through waiver In RFS2 we are faced with a different of, or outreach with, small refineries (as
authority (per section 211(o)(7)). issuethe extent to which EPA should
Further, in the case of the cellulosic the majority of the small refiners own
provide additional relief to small
biofuel standard, cellulosic biofuel refineries that meet the Congressional
refineries beyond the relief specified by
allowances can be provided from EPA at statute, and whether it should provide small refinery definition). One
prices established in EISA (see such further relief to small refiners as commenter stated that such a limited
regulation section 80.1456). DOE thus well. There is considerable overlap investigation into the impact on small
determined that small refineries would between entities that are small refineries refineries could not have resulted in any
not be subject to disproportionate and those that are small refiners. in-depth analysis on the economic
economic hardship under the proposed Providing additional relief just to small impacts of the program on these entities.
RFS2 program, and that the exemption refiners would, therefore, also extend Another commenter stated that it
should not, on the basis of the study, be additional relief to at least a number of believes that DOE should be directed to
extended for small refineries (including small refineries. Congress spoke directly reopen and reassess the small refinery
those small refiners who own refineries to the relief that EPA may provide for study be June 30, 2010, as suggested by
meeting the small refinery definition) small refineries, including those small the Senate Appropriations Committee.
beyond December 31, 2010. DOE noted refineries operated by small refiners, We are aware that there have been
in the study that, if circumstances were and limited that relief to a blanket
expressions of concern from Congress
to change and/or the RIN market were exemption through December 31, 2010,
to become non-competitive or illiquid, regarding the DOE Study. Specifically,
with additional extensions if the criteria
individual small refineries have the specified by Congress are met. EPA in Senate Report 11145, the Senate
ability to petition EPA for an extension believes that an additional or different Appropriations Committee directed
of their small refinery exemption extension, relying on a more general [DOE] to reopen and reassess the Small
(pursuant to Section 211(o)(9)(B)). provision in section 211(o)(3) would be Refineries Exemption Study by June 30,
inconsistent with Congressional intent. 2010, noting a number of factors that
4. Ability To Grant Relief Beyond the Committee intended that DOE
Further, we do not believe that the
211(o)(9) consider in the revised study. The Final
statute allows us the discretion to give
The SBREFA panel made a number of relief to small refiners onlyas this Conference Report 111278 to the
recommendations for regulatory relief would result in a subset of small Energy & Water Development
and additional flexibility for small refineries (those that also qualify as Appropriations Act (H.R. 3183),
refineries and small refiners. These are small refiners) receiving relief that is referenced the language in the Senate
described in the Final Panel Report greater than the relief already given to Report, noting that the conferees
(located in the rulemaking docket), and all small refineries under EISA. support the study requested by the
summarized below. During the EPA also notes that the criteria Senate on RFS and expect the
development of this final rule, we again specified by statute for providing a Department to undertake the requested
evaluated the various options further compliance extension to small economic review. At the present time,
recommended by the Panel and also refineries is a demonstration of
however, the DOE study has not been
comments on the proposed rule. We disproportionate economic hardship.
revised. If DOE prepares a revised study
also consulted the small refinery study The statute provides that such hardship
can be identified through the DOE and the revised study finds that there is
prepared by DOE.
As described in the Final Panel study, or in individual petitions a disproportionate economic impact, we
Report, EPA early-on identified submitted to the Agency. However, the will revisit the exemption extension at
limitations on its authority to issue DOE study has concluded that no that point in accordance with section
additional flexibility and exemptions to disproportionate economic hardship 211(o)(9)(A)(ii).
small refineries. In section 211(o)(9) exists, at least under current conditions
Congress specifically addressed the and for the foreseeable future under
6. What Were Finalizing progress updates, as recommended by competing for engineering resources to
a. Small Refinery and Small Refiner the SBAR Panel, as well as information make capital improvements.
provided by the petitioner and through The Panel recommended that EPA
Temporary Exemptions
consultation with DOE. consider the issues raised by the small
As mentioned above, the RFS1 refiner SERs and discussions had by the
program regulations exempt gasoline c. Program Review Panel itself, and that EPA should
produced by small refineries from the During the SBREFA process, the small consider comments on flexibility
renewable fuels standard through refiner Small Entity Representatives alternatives that would help to mitigate
December 31, 2010 (at 40 CFR 80.1141), (SERs) also requested that EPA perform negative impacts on small businesses to
per EPAct. As EISA did not alter the an annual program review, to begin one the extent allowable by the Clean Air
small refinery exemption in any way, year before small refiners are required to Act. A summary of further
we are retaining this small refinery comply with the program, to provide recommendations of the Panel are
temporary exemption in the RFS2 information on RIN system progress. As discussed in Section XI.C of this
program without change (except for the mentioned in the preamble to the preamble, and a full discussion of the
fact that all transportation fuel produced proposed rule, we were concerned that regulatory alternatives discussed and
by small refineries will be exempt, as such a review could lead to some recommended by the Panel can be
EISA also covers diesel and nonroad redundancy with the notice of the found in the SBREFA Final Panel
fuels). applicable RFS standards that EPA will Report. Also, a complete discussion of
Likewise, as we extended under RFS1 publish in the Federal Register comments received on the proposed
the small refinery temporary exemption annually, and this annual process will rule regarding small refinery and small
to the few remaining small refiners that inevitably include an evaluation of the refiner flexibilities can be found in
met the Small Business projected availability of renewable fuels. Chapter 5 of the Summary and Analysis
Administrations (SBA) definition of a Nevertheless, some Panel members of Comments document.
small business (1,500 employees or less commented that they believe a program
company-wide), we are also finalizing a review could be beneficial to small a. Extensions of the RFS1 Temporary
continuation of the small refiner entities in providing them some insight Exemption for Small Refiners
temporary exemption through December to the RFS programs progress and As previously stated, the RFS1
31, 2010. alleviate some uncertainty regarding the program regulations provide small
b. Case-by-Case Hardship for Small RIN system. As we will be publishing a refiners who operate small refineries, as
Refineries and Small Refiners Federal Register notice annually, the well as those small refiners who do not
Panel recommended, and we proposed, operate small refineries, with a
As discussed in Section III.E.2, EPAct that an update of RIN system progress temporary exemption from the
also authorizes EPA to grant an (e.g., RIN trading, publicly-available standards through December 31, 2010.
extension for a small refinery based information on RIN availability, etc.) be This provided an exemption for small
upon disproportionate economic included in this annual notice. refineries (and small refiners) for the
hardship, on a case-by-case basis. We Based on comments received on the first five years of the RFS program.
believe that these avenues of relief can proposed rule, we believe that such Small refiner SERs suggested that an
and should be fully explored by small information could be helpful to additional temporary exemption for the
refiners who are covered by the small industry, especially to small businesses RFS2 program would be beneficial to
refinery provision. In addition, we to help aid the proper functioning of the them in meeting the RFS standards as
believe that it is appropriate to allow RIN market, especially in the first years increased by Congress in EISA. The
petitions to EPA for an extension of the of the program. However, during the Panel recommended that EPA propose a
temporary exemption based on development of the final rule, it became delay in the effective date of the
disproportionate economic hardship for evident that there could be instances standards until 2014 (for a total of eight
those small refiners who are not covered where we would want to report out RIN years) for small entities, to the extent
by the small refinery provision (again, system information on a more frequent allowed by the statute.
per our discretion under section basis than just once a year. Thus we are During the development of both the
211(o)(3)(B)); this would ensure that all finalizing that we will periodically Final Panel Report and the proposed
small refiners have the same relief report out elements of RIN system rule, we evaluated various options for
available to them as small refineries do. progress; but such information will be small refiners, including an additional
Thus, we are finalizing a hardship reported via other means (e.g., the RFS temporary exemption for small refiners
provision for small refineries in the Web site (http://www.epa.gov/otaq/ from the required RFS2 standards. As
RFS2 program, that any small refinery renewablefuels/index.htm), EMTS discussed above, we concluded that we
may apply for a case-by-case hardship at homepage, etc.). do not have the statutory authority to
any time on the basis of provide such extensions through means
disproportionate economic hardship per 7. Other Flexibilities Considered for other than those specified in the statute.
CAA section 211(o)(9)(B). We are also Small Refiners Thus, further extensions will be as a
finalizing a case-by-case hardship During the SBREFA process, and in result of any revised DOE study, or in
provision for those small refiners that their comments on the proposed rule, response to a petition, pursuant to the
do not operate small refineries using our small refiners informed us that they authorities specified in section
discretion under CAA section would need to rely heavily on RINs and/ 211(o)(9).
211(o)(3)(B). This provision will allow or make capital improvements to We proposed to continue the
those small refiners that do not operate comply with the RFS2 requirements. temporary exemption finalized in
small refineries to apply for the same These refiners raised concerns about the RFS1through December 31, 2010.
kind of hardship extension as a small RIN program itself, uncertainty (with Commenters that oppose an extension of
refinery. In evaluating applications for the required renewable fuel volumes, the temporary exemption generally
this hardship provision EPA will take RIN availability, and costs), the desire stated that an extension is not
into consideration information gathered for an annual RIN system review, and warranted, and some commenters
from annual reports and RIN system the difficulty in raising capital and expressed concerns about allowing
provisions for small refiners. One small refinery study, which did not find standards for small refiners in todays
commenter also stated that it believes that there was a disproportionate rule.
that the small refinery exemption economic hardship. Further, we do not
c. RIN-Related Flexibilities
should not be extended and that the believe that the statute allows us the
small refiner exemption should be discretion to give relief to a subset of The small refiner SERs requested that
eliminated completely. Two small refineries (those that also qualify the RFS2 rule contain provisions for
commenters supported the continuation as small refiners) that is greater than the small refiners related to the RIN system,
of the exemption through December 31, relief already given to all small such as flexibilities in the RIN rollover
2010 only, and one stated that it does refineries under EPAct. However, it is cap percentage and allowing small
not support an extension as it believes important to recognize that the 211(o)(9) refiners only to use RINs
that all parties have been well aware of small refinery provision does allow for interchangeably. In the RFS1 rule, up to
the passage of EISA and small refineries extensions beyond December 31, 2010, 20% of a previous years RINs may be
and small refiners should have been as discussed above in Section III.E.2. rolled over and used for compliance in
striving to achieve compliance by the Thus, refiners may apply for individual the following year. In the preamble to
end of 2010. Two commenters also hardship relief. the proposed rule, we discussed the
expressed views that the exemption concept of allowing for flexibilities in
should not have been offered to small b. Phase-in the rollover cap, such as a higher RIN
refiners in RFS1 as this was not The small refiner SERs suggested that rollover cap for small refiners for some
provided by EPAct, and that an a phase-in of the obligations applicable period of time or for at least some of the
extension of the exemption should not to small refiners would be beneficial for four standards. As the rollover cap is the
be finalized for small refineries at all. compliance, such that small refiners means through which we are
The commenters further commented would comply by gradually meeting the implementing the limited credit lifetime
that an economic hardship provision standards on an incremental basis over provisions in section 211(o) of the CAA,
was included in EPAct, and any a period of time, after which point they and therefore cannot simply be
exemption extension should be limited would comply fully with the RFS2 eliminated, we requested comment on
to such cases, and only to the specific standards. However we stated in the the concept of increasing the RIN
small refinery (not small refiner) that NPRM that we had serious concerns rollover cap percentage for small
has petitioned for such an extension. about our legal authority to provide refiners and an appropriate level of that
Commenters supporting an extension percentage. In response to the Panels
such a phase-in. CAA section
of the exemption commented that they recommendation, we also sought
211(o)(3)(B) states that the renewable
believe that the statutes (EPAct and comment on allowing small refiners to
fuel obligation shall consist of a single
EISA) do not prohibit EPA from use the four types of RINs
applicable percentage that applies to all
providing relief to regulated small interchangeably.
categories of persons specified as In their comments on the proposed
entities on which the rule will have a obligated parties. A phase-in approach
significant economic impact, and that rule, one small refiner commented that,
would essentially result in different in regards to small refiners concerns
such a delay could lessen the burden on applicable percentages being applied to
these entities. One commenter stated about RIN pricing and availability, there
different obligated parties. Further, such is no mechanism in the rule to address
that it believes EPA denied or ignored a phase-in approach would provide
much of the relief recommended by the the possibility that the RIN market will
more relief to small refineries operated not be viable. The commenter further
Panel in the proposal. Another
by small refiners than that provided suggested that more durable RINs are
commenter stated that it believes EPAs
under the statutory small refinery needed for small refiners that can be
concerns regarding the legal authority
provisions. carried over from year to year, to
are unsustainable considering EPAs
past exercises of discretion under the Some commenters stated that they alleviate some of the potentially market
RFS1 program, and with the discretion believe that EPA has the ability to volatility for renewable fuels. Another
afforded to EPA under section 211(o) of consider a phase-in of the standards for commenter suggested that RINs should
the CAA. Some commenters requested a small refiners. One commenter be interchangeable for small refiners, or
delay until 2014 for small refiners. One suggested that a temporary phase-in alternatively, some mechanism should
additional commenter expressed could help lessen the burden of be implemented to ensure that RIN
support for an extension of the small regulation on small entities and promote prices are affordable for small refiners.
refinery exemption only, and that these compliance. Another commenter stated Further, with regard to interchangeable
small refineries should be granted a that it believes EPAs legal concerns RINs, one commenter stated that small
permanent exemption. regarding a phase-in are unsustainable refiners do not have the staff or systems
During the development of this final considering EPAs past exercises of to manage and account for four different
rule, we again evaluated the various discretion under the RFS1 program and categories of RINs and rural small
options recommended by the Panel, the with the discretion afforded to EPA refiners will suffer economic hardship
legality of offering an extension of the under section 211(o) of the CAA. and disadvantage because of the
exemption to small refiners only, and After considering the comments on unavailability of biofuels. The
also comments on the proposed rule. this issue, EPA continues to believe that commenter also requested an increase in
Specifically in the case of an extension allowing a phase-in of regulatory the rollover cap to 50% for small
of the exemption for small refiners, we requirements for small refineries and/or refiners.
also consulted the small refinery study small refiners would be inconsistent We are not finalizing additional RIN-
prepared by DOE, as the statute directs with the statute, for the reasons related flexibilities for small refiners in
us to use this as a basis for providing an mentioned above. Any individual todays action. As highlighted in the
additional two year exemption. As entities that are experiencing hardship NPRM, we continue to believe that the
discussed above in Sections III.E.4 and that could justify a phase-in of the concept of interchangeable RINs for
5, we do not believe that we can provide standards have the ability to petition small refiners only fails to require the
an extension of the exemption EPA for individualized relief. Therefore four different standards mandated by
considering the outcome of the DOE we are not including a phase-in of Congress (e.g., conventional biofuel
could not be used instead of cellulosic our analysis of what measures might be Biodiesel Board (NBB) to revise the
biofuel or biomass-based diesel), and is appropriate to prevent misfueling with biodiesel temperature standardization
not consistent with section 211(o) of the >E10 blends before this may become a equation.
Clean Air Act. Essentially, it would concern in the context of the RFS2 Both ADM and NBB agreed on the
circumvent the explicit direction of program. necessity for biodiesel temperature
Congress in EISA to require that the four standardization at 60 F. ADM and NBB
G. Biodiesel Temperature
RFS2 standards be met separately. commented on several empirical
Further, given the findings from the Standardization
calculations which have been developed
DOE study that small refineries (and The volume of a batch of renewable specific to biodiesel temperature
thus, most small refiners) do not fuel can change under extreme changes standardization since the 2007 RFS1
currently face disproportionate in temperature. The volume of a batch final rule. These include a 2004 data set
economic hardship, and are not of renewable fuel can experience developed by the Minnesota Department
expected to do so as RFS2 is expansion as the temperature increases, of Commerce and the Renewable Energy
implemented, we do not believe that a or can experience contraction as Group and updated in 2008; information
basis exists to justify providing small temperature decreases. The Agency embedded in the European Biodiesel
refiners with a larger rollover cap than requires temperature standardization of Specification EN 14214; and
other regulated entities. Thus, small renewable fuels at 60 Fahrenheit (F) so information from the Alberta Research
refiners will be held to the same RIN renewable fuel volumes are accounted Council. The table below provides
rollover cap as other obligated parties. for on a uniform and consistent basis values from NBB for 1000 gallons of
over the entire fuels industry. In the biodiesel standardized to a temperature
F. Retail Dispenser Labeling for Gasoline
With Greater Than 10 Percent Ethanol
May 1, 2007 Renewable Fuels Standard at 60 F for these empirical calculations,
(RFS) final rule the Agency required along with the current EPA equation,
We proposed labeling requirements biodiesel temperature standardization to and the American Petroleum Institute
for fuel dispensers that handle greater be completed as follows: (API) Refined Products Table 6.
than 10 volume percent ethanol blends
Vs,b = Va,b (0.0008008 T + 1.0480)
which included the following text: For TABLE III.G1NBB COMPARISON OF
use only in flexible-fuel vehicles, May Where
damage non-flexible-fuel vehicles, Vs,b = Standard Volume of biodiesel at 60
BIODIESEL TEMPERATURE STAND-
Federal law prohibits use in non- degrees F, in gallons; ARDIZATION CALCULATIONS TO 60 F
flexible-fuel vehicles. This proposal was Va,b = Actual volume of biodiesel, in gallons; FOR 1000 GALLONS OF BIODIESEL
primarily meant to help address T = Actual temperature of batch, in degrees AT 90 F
F.
concerns about the potential misfueling
of non-flex-fuel vehicles with E85, in This equation was based on data from Gallons
light of the anticipated increase in E85 a published research paper by Tate et
2007 EPA Biodiesel Formula ..... 975.28
sales volumes in response to the RFS2 al.36 Members of the petroleum industry
2008 Minnesota (Hedman) data 986.270
program. All ethanol blends above 10 have indicated that the current biodiesel API Refined Products Table 6
volume percent were included due to temperature standardization equation in (biodiesel density @ 7.359) .... 986.625
the increasing industry focus on ethanol the regulations provides different results Alberta Research Council ........... 986.238
blender pumps that are designed to than that commonly used by both the EN 14214 data ........................... 986.401
dispense a variety of ethanol blends petroleum and biodiesel industry for 2004 Minnesota Renewable En-
(e.g., E30, and E40) for use in flex-fuel commercial trading of biodiesel. These ergy Group data ...................... 986.830
vehicles. commercial values are either based on
Commenters stated that EPA should American Petroleum Institute (API) As illustrated by the results from the
undertake additional analysis of the tables for petroleum products or on above table, the values for the various
potential impacts from misfueling and empirical values from industry biodiesel temperature standardization
what preventative measures might be measurements at common temperatures empirical calculations are within 1
appropriate before finalizing labeling and pressures observed in bulk fuel gallon of agreement of each other for a
requirements for >E10 blends. They also facilities. The difference between RIN 1000 gallon biodiesel batch, except for
stated that EPA should coordinate any calculated volumes and commercial the current biodiesel temperature
such labeling provisions with those sales volumes has created confusion standardization equation in the
already in place by the Federal Trade within the record keeping system of regulations.
Commission. EPA is also currently both the petroleum and biodiesel To ensure consistency in RIN
evaluating a petition to allow the use of industry. generation, ADM commented EPA
up to 15 volume percent ethanol in non- In the RFS2 proposed rule, the should adopt only one biodiesel
flex fuel vehicles. One potential result Agency proposed the temperature temperature standardization calculation.
of this evaluation might be for EPA to standardization of biodiesel remain ADM commented that all biodiesel
grant a partial waiver that is applicable unchanged from the RFS1 temperature standardization
only for a subset of the current vehicle requirements.37 The Agency received calculations developed, including the
population. Under such an approach, a comments from Archer Daniels Midland API Refined Products Table 6, are in
label for E15 fuel dispensers would be Company (ADM), World Energy very close agreement with each other
needed that identifies what vehicles are Alternatives, Marathon Petroleum and the differences between them all are
approved to use E15. Company (Marathon) and the National insignificant. They further commented
Based on the public comments and the API Refined Products Table 6 has
the fact that EPA has not completed its 36 Equation was derived from R.E. Tate et al. The provided a uniform measurement of
evaluation of the E15 waiver petition, Densities of Three Biodiesel Fuels at Temperatures volume for years for the entire liquid
we believe that it is appropriate to defer up to 300 C., Department of Biological fuels industry. Thus, ADM believes the
Engineering, Dalhousie University, April 2005.
finalizing labeling requirements for Fuel 85 (2006) 10041009, Table 1 for soy methyl API Refined Products Table 6 should be
>E10 blends at this time. This will ester. adopted for biodiesel to be consistent
afford us the opportunity to complete 37 74 FR 24943, May 26, 2009. with the calculation of sales volumes.
Finally ADM comments adoption of the temperature standardization: (1) The EISA), we have established reference
API Refined Products Table 6 would American Petroleum Institute Refined and control cases from which
allow for easier verification within the Products Table 6B, as referenced in subsequent analyses are based. The
marketplace, eliminate the need for ASTM D125008, entitled, Standard reference cases are projections of
calculating one volume for sales and Guide for Use of the Petroleum renewable fuel volumes without the
trades and another for RINs, and Measurement Tables, and (2) a enactment of EISA and are described in
prevents the entire distribution network biodiesel temperature standardization Section IV.A.1. The control cases are
from facing the financial burden of equation that utilizes the 2008 data projections of the volumes and types of
reprogramming existing meters that generated by the Minnesota Department renewable fuel that might be used in the
already are based on the API Refined of Commerce and the Renewable Energy future to comply with the EISA volume
Products Table 6. Group. These two methods for biodiesel mandates. For the NPRM we had
NBB commented that earlier surveys temperature standardization are within focused on one primary control case
from its members indicate a fifty-fifty one gallon of agreement of each other (see Section IV.A.2) whereas for the
split between members using the API for a 1000 gallon biodiesel batch and final rule we have expanded the
Refined Products Table 6 or some thus in very close agreement. Both ADM analysis to include two additional
variation of the current EPA biodiesel and NBB acknowledged that the sensitivity cases (see Section IV.A.3).
formula for biodiesel temperature differences between these two methods Based on the public comments received
standardization. Some NBB members are insignificant and the resulting as well as new information, we have
indicated that the API Refined Products corrected volumes from these two updated the primary control case
Table 6 was more commonly used by methods of calculation are within volumes from the NPRM to reflect what
the petroleum industry and embedded accuracy tolerances of any metered we believe could be a more likely set of
into the meters, pumps and accounting measurement. Thus, the Agency volumes to analyze. We assume in each
systems of the petroleum industry. believes the allowance of both of these of the cases the same ethanol-
Companies already using the API methods for biodiesel temperature equivalence basis as was used in the
Refined Products Table 6 would have a standardization will increase flexibility RFS1 rulemaking to meet the standard.
reduction in required paperwork with while still providing for a consistent Volumes are listed in tables for this
RIN generation and tracking because generation and accounting of biodiesel section in both straight-gallons and
already existing commercial documents RINs over the entire fuel delivery ethanol-equivalent gallons (i.e., times
could serve that purpose and they thus system. 1.5 for biodiesel or 1.7 for cellulosic
could eliminate or reduce their current diesel and renewable diesel). The
dual tracking system. Other NBB IV. Renewable Fuel Production and Use
volumes included in this section are for
members have already embedded the An assessment of the impacts of 2022. For intermediate years, refer to
current EPA biodiesel equation within increased volumes of renewable fuel Section 1.2 of the RIA.
their accounting and sales systems and must begin with an analysis of the kind
would like to continue using that type of renewable fuels that could be used, 1. Reference Cases
of biodiesel temperature standardization the types and locations of their
Our primary reference case renewable
approach rather than the API Refined feedstocks, the fuel volumes that could
fuel volumes are based on the Energy
Products Table 6. The NBB be produced by a given feedstock, and
Information Administrations (EIA)
recommended EPA revise its current any challenges associated with their
Annual Energy Outlook (AEO) 2007
equation in the regulations to the 2008 use. This section provides an
reference case projections.38 While AEO
Hedman biodiesel temperature assessment of the potential feedstocks
2007 is not as up-to-date as AEO 2008
standardization equation. Thus, NBB and renewable fuels that could be used
or AEO 2009, we chose to use AEO 2007
commented EPA should provide to meet the Energy Independence and
because later versions of AEO already
flexibility to their members by allowing Security Act (EISA) and the rationale
include the impact of increased
the use of either the API Refined behind our projections of various fuel
renewable fuel volumes under EISA as
Products Table 6 or the use of a types to represent the control cases for
well as fuel economy improvements
biodiesel temperature standardization analysis purposes. As new technologies,
under CAFE as required in EISA,
equation. feedstocks, and fuels continue to
Marathon commented the regulations whereas AEO 2007 did not.
develop on a daily basis, markets may
allow for the standardization of volume appear differently from our projections. For the final rule we have also
for other renewable fuels to be Although actual volumes and feedstocks assessed a number of the impacts
determined by an appropriate formula may differ, we believe the projections relative to a reference case assuming the
commonly accepted by the industry made for our control cases are within mandated renewable fuel volumes
which may be reviewed by the EPA for the range of possible predictions for under RFS1 from the Energy Policy Act
appropriateness. They recommended which the standards are met and allow of 2005 (EPAct). This allows for a more
that EPA extend this courtesy to for an assessment of the potential complete assessment of the impacts of
biodiesel. impacts of the increases in renewable the EISA volume mandates, especially
The Agency acknowledges that the fuel volumes that meet the requirements when combined with the impacts
current biodiesel temperature of EISA. assessment conducted for the RFS1
standardization equation is likely not rulemaking (though many factors have
correct for biodiesel temperature A. Overview of Renewable Fuel Volumes changed since then). Table IV.A.11
standardization at ambient temperatures EISA mandates the use of increasing summarizes the 2022 renewable fuel
observed in the fuel distribution system. volumes of renewable fuel. To assess the volumes for the AEO 2007 and the RFS1
Based on the comments received, the impacts of this increase in renewable reference cases (listed in both straight
Agency is amending the regulations to fuel volume from business-as-usual volumes and ethanol-equivalent
allow for two ways for biodiesel (what is likely to have occurred without volumes).
38 AEO 2007 was only used to derive renewable case. AEO 2009 was used for future crude oil cost estimates and for estimating total transportation
fuel volume projections for the primary reference fuel energy use.
TABLE IV.A.11REFERENCE CASE RENEWABLE FUEL VOLUMES IN 2022

[Billion gallons]
Advanced biofuel Non-advanced

biofuel
Cellulosic biofuel Biomass-based Other advanced Total renewable
Source/volume type diesel a biofuel fuel
Cellulosic eth- Corn ethanol
anol c FAME biodiesel b Imported ethanol
AEO 2007 Straight Volume ............................. 0.25 0.38 0.64 12.29 13.56
AEO 2007 Ethanol-Equivalent ......................... 0.25 0.58 0.64 12.29 13.76
RFS 1 Straight Volume .................................... 0.00 0.30 0.00 7.05 7.35
RFS 1 Ethanol-Equivalent ............................... 0.00 0.45 0.00 7.05 7.50
a Biomass-Based Diesel could include FAME biodiesel, cellulosic diesel, and non-co-processed renewable diesel.
b Only fatty acid methyl ester (FAME) biodiesel volumes were considered.
c Under the RFS1 reference case, we assumed the 250-million gallon cellulosic standard set by EPAct would be met primarily by corn ethanol
plants utilizing 90% biomass for energy, thus actual production of cellulosic biofuel is zero. AEO 2007 reference case assumes actual production
of cellulosic biofuel and therefore assumed to be 0.25 billion gallons.
2. Primary Control Case biofuel, and total renewable fuel. As the projections made for our control
these categories could be met with a cases are within the range of possible
Our assessment of the renewable fuel wide variety of fuel choices, in order to predictions for which the standards are
volumes required to meet EISA assess the impacts of increased volumes met and allow for an assessment of the
necessitates establishing a primary set of of renewable fuel, we projected a set of potential impacts of increased volumes
fuel types and volumes on which to reasonable renewable fuel volumes of renewable fuel. Table IV.A.21
base our assessment of the impacts of based on our projection of fuels that summarizes the fuel types used for the
the new standards. EISA contains four could come to market. primary control case and their
broad categories: cellulosic biofuel, Although actual volumes and corresponding volumes for the year
biomass-based diesel, total advanced feedstocks will be different, we believe 2022.
TABLE IV.A.21PRIMARY CONTROL CASE PROJECTED RENEWABLE FUEL VOLUMES IN 2022
[Billion gallons]
Advanced biofuel Non-ad-

vanced
Cellulosic biofuel Biomass-based diesel a Other advanced biofuel biofuel Total renew-
Volume type able fuel
Cellulosic Cellulosic FAME c bio- Other bio- Imported Corn eth-
NCRD d
ethanol diesel b diesel diesel e ethanol anol
Straight Volume ............... 4.92 6.52 0.85 0.15 0.82 2.24 15.00 30.50
Ethanol-Equivalent ........... 4.92 11.08 1.28 0.26 1.23 2.24 15.00 36.00
b CellulosicDiesel includes at least 1.96 billion gallons (3.33 billion ethanol-equivalent gallons) from Fischer-Tropsch Biomass-to-Liquids (BTL)
processes based on EIAs forecast and an additional 4.56 billion gallons (7.75 billion ethanol-equivalent gallons) from this or other types of cellu-
losic diesel processes.
c Fatty acid methyl ester (FAME) biodiesel.
d Non-Co-processed Renewable Diesel (NCRD).
e Other Biodiesel is biodiesel that could be produced in addition to the amount needed to meet the biomass-based diesel standard.
The following subsections detail our come mainly from imported sugarcane well as butanol, and marketplace
rationale for projecting the amount and ethanol with a smaller amount from challenges for consuming high volumes
type of fuels needed to meet EISA as additional biodiesel sources. The total of ethanol, we have included
shown in Table IV.A.21. For cellulosic renewable fuel volume not required to projections of more non-ethanol
biofuel we have assumed that by 2022 be comprised of advanced biofuels is renewables in our primary control case
on a straight-volume basis about half assumed to be met with corn ethanol for the final rule.39 In the future, this
would come from cellulosic ethanol and with small amounts of other grain could include various forms of green
the other half from cellulosic diesel. On starches and waste sugars. hydrocarbons (i.e., cellulosic gasoline,
an ethanol-equivalent volume basis, diesel and jet) and higher alcohols, but
The main difference between the
cellulosic diesel would make up almost volumes used for the NPRM and the 39 Comments received from Advanced Biofuels
70% of the 16 billion gallons cellulosic volumes used for the FRM is the Association, Testimony on June 9, 2009 suggesting
biofuel standard. Biomass-based diesel inclusion of cellulosic diesel for the a number of advanced biofuel technologies will be
is assumed to be comprised of a FRM. The NPRM made the simplifying able to produce renewable diesel, jet fuels, gasoline,
and gasoline component fuels (e.g. butanol, iso-
majority of fatty-acid methyl ester assumption that the cellulosic biofuel octane). Similar comments were received from the
(FAME) biodiesel and a smaller portion standard would be met entirely with New York State Department of Environmental
of non-co-processed renewable diesel. cellulosic ethanol. However, due to Conservation (Docket EPAHQOAR20050161
The portion of the advanced biofuel 2143), OPEI and AllSAFE (Docket EPAHQOAR
growing interest and recent 200501612241), and the Low Carbon Synthetic
category not met by cellulosic biofuel developments in hydrocarbon-based or Fuels Association (Docket EPAHQOAR2005
and biomass-based diesel is assumed to so-called drop-in renewable fuels as 01612310).
for analysis purposes, we have modeled biofuel category discussed previously in few. These feedstocks are currently
it as cellulosic diesel fuel. We describe Section IV.A.2.a. being researched due to their potential
these fuels in greater detail in Section FAME and RD processes can both for lower agricultural inputs and higher
IV.BD. We have also included some utilize vegetable oils, rendered fats, and oil yields than traditional vegetable oil
algae-derived biofuels in our FRM greases, and thus will generally compete feedstocks as well as their use in
analyses given the large interest and for the same feedstock pool. We have additional crop rotations (i.e., winter
potential for such fuels. We have based RD volumes on our forecast of cover crops) on a given area of land. We
continued to assume zero volume for industry plans, and expect these plants acknowledge that as we learn more
renewable fuels or blendstocks such as to use rendered fats as feedstock. Most about the challenges and benefits to the
biogas, jatropha, palm, imported biodiesel plants now have the capability use of newer feedstocks, these could be
cellulosic biofuel, and other alcohols or to use vegetable or animal fats as used in the future towards meeting the
ethers in our control cases. Although we feedstock, and thus our analysis biomass-based diesel standard under the
have not included these renewable fuels assumes biodiesel will be made from a RFS2 program provided they meet the
and blendstocks in our impact analyses, mix of inputs, depending on local lifecycle thresholds and definitions for
it is important to note that they can still availability, economics, and season. renewable biomass. For the purpose of
be counted under our program if they Refer to Section 1.1 of the RIA for more our impacts analysis, however, we have
meet the lifecycle thresholds and detail on FAME and RD feedstocks chosen not to include these feedstocks
definitions for renewable biomass, and Renewable diesel production can be in our analyses at this time.
recent information suggests that some of further classified as co-processed or
non-co-processed, depending on c. Other Advanced Biofuel
them may be likely.
whether the renewable material is As defined in EISA, advanced biofuel
a. Cellulosic Biofuel mixed with petroleum during the includes the cellulosic biofuel and
As discussed in our NPRM, whether hydrotreating operations. EISA biomass-based diesel categories that
cellulosic biofuel is ethanol will depend specifically forbids co-processed RD were mentioned in Sections IV.A.2.a
on a number of factors, including from being counted as biomass-based and IV.A.2.b above. However, EISA
production costs, the form of tax diesel, but it can still count toward the requires greater volumes of advanced
subsidies, credit programs, and factors total advanced biofuel requirement. At biofuel than just the volumes required
influencing the blending of biofuel into this time, based on current industry of these fuels. It is entirely possible that
the fuel pool. It will also depend on the plans, we expect most, if not all, RD will greater volumes of cellulosic biofuel and
relative demand for gasoline and diesel be non-co-processed (that is, non- biomass-based diesel than required by
fuel. As a result of our analyses on refinery operations). EISA could be produced in the future.
ethanol consumption (see Section IV.D) Perhaps the feedstock with the Our control case assumes that the
and continual tracking of the industrys greatest potential for providing large cellulosic biofuel volumes will not
interest in hydrocarbon-based volumes of oil for the production of exceed those required under EISA. We
renewables (see Section IV.B), we have biomass-based diesel is algae. However, do assume, however, that additional
decided to analyze a cellulosic biofuel several technical hurdles do still exist. biodiesel than that needed to meet the
standard made up of both cellulosic Specifically, more efficient harvesting, biomass-based diesel volume will be
ethanol and cellulosic diesel fuels. dewatering, and lipid extraction used to meet the total advanced biofuel
For assessing the impacts of the RFS2 methods are needed to lower costs to a volume. Despite additional volumes
standards, we used AEO 2009 (April level competitive with other feedstocks. assumed from biodiesel, to fully meet
release) cellulosic ethanol volumes (4.92 For all three control cases, we have the total advanced biofuel volume
billion gallons), as well as the cellulosic chosen to include 100 million gallons of required under EISA, other types of
biomass-to-liquids (BTL) diesel volumes algae-based biodiesel by 2022. We advanced biofuel are necessary through
(1.96 billion gallons) using Fischer- believe this is reasonable given several 2022.
Tropsch (FT) processes. We consider announcements from the algae industry We have assumed for our control case
BTL diesel from FT processes as a about their production plans.40 that the most likely sources of advanced
subset of cellulosic diesel. In order to Although algae to biofuel companies fuel other than cellulosic biofuel and
reach a total of 16 billion ethanol- can focus on producing algae oil for biomass-based diesel would be from
equivalent gallons, we assumed that an traditional biodiesel production, several imported sugarcane ethanol and
additional 4.56 billion gallons of companies are alternatively using algae perhaps limited amounts of co-
cellulosic diesel could be produced for producing ethanol or crude oil for processed renewable diesel. Our
from other cellulosic diesel processes. gasoline or diesel which could also help assessment of international fuel ethanol
Refer to Section 1.2 of the RIA for more contribute to the advanced biofuel production and demand indicate that
discussion. mandate. For more detail on algae as a anywhere from 3.84.2 Bgal of
feedstock, refer to Section 1.1 of the sugarcane ethanol from Brazil could be
b. Biomass-Based Diesel RIA. available for export by 2020/2022. If this
Biomass-based diesel can include During the comment period, we volume were to be made available to the
fatty acid methyl ester (FAME) received information from stakeholders U.S., then there would be sufficient
biodiesel, renewable diesel (RD) that has on alternative biodiesel feedstocks such volume to meet the advanced biofuel
not been co-processed with a petroleum as camelina and pennycress, to name a standard. To calculate the amount of
feedstock, as well as cellulosic diesel. imported ethanol needed to meet the
Although cellulosic diesel could 40 Sapphire Energy plans for 135 MMgal by 2018
EISA advanced biofuel standards, we
potentially contribute to the biomass- and 1 Bgal by 2025; Petrosun plans for 30 MMgal/ assumed it would make up the
yr facility; Solazyme plans for 100 MMgal by 2012/
based diesel category, we have assumed 13; U.S. Biofuels plans for 4 MMgal by 2010 and difference not met by cellulosic biofuel,
for our analyses that the fuel produced 50 MMgal by full scale. Only several companies biomass-based diesel and additional
through Fischer-Tropsch (FT) or other have thus far revealed production plans, and more biodiesel categories (see Table IV.A.2
are announced each day. It is important to realize
processes and its corresponding that future projections are highly uncertain, and we
1). The amount of imported ethanol
feedstocks (cellulosic biomass) are have taken into account the best information we required by 2022 is approximately 2.2
already accounted for in the cellulosic could acquire at the time. Bgal.
As discussed in the NPRM, other is no specific corn-ethanol mandated non-advanced biofuel RINs, e.g. corn
potential advanced biofuels could volume, and that any advanced biofuel ethanol RINs.
include for example, U.S. domestically produced above and beyond what is
produced sugarcane ethanol, 3. Additional Control Cases Considered
required for the advanced biofuel
biobutanol, and biogas. While we have requirements could reduce the amount Since there is significant uncertainty
not chosen to reflect these fuels in our of corn ethanol needed to meet the total surrounding what fuels will be
control case, they can still be counted renewable fuel standard. This occurs in produced to meet the 16 billion gallon
under our program assuming they meet our projections during the earlier years cellulosic biofuel standard, we have
the lifecycle thresholds and other (20102015) in which we project that decided to investigate two other
definitions under the program. some fuels could compete favorably sensitivity cases for our cost and
d. Other Renewable Fuel with corn ethanol (e.g., biodiesel and emission impact analyses conducted for
The remaining portion of total imported ethanol). Refer to Section 1.2 the rule. The first case, we refer to as the
renewable fuel not met with advanced of the RIA for more details on interim low-ethanol control case and assume
biofuel was assumed to come from corn- years. Beginning around 2016, fuels only 250 million gallons of cellulosic
based ethanol (including small amounts qualifying as advanced biofuels likely ethanol (from AEO 2007 reference case).
from other grains and waste sugars). will be devoted to meeting the The rest of the 16 billion gallon
EISA effectively sets a limit for increasingly stringent volume mandates cellulosic biofuel standard is made up
participation in the RFS program of 15 for advanced biofuel. It is also important of cellulosic diesel as shown in Table
Bgal of corn ethanol, and we are to note that more than 15 Bgal of corn IV.A.31. The second case, we refer to
assuming for our analysis that sufficient ethanol could be produced and RINs as the high-ethanol control case and
corn ethanol will be produced to meet generated for that volume under the assume the entire 16 billion gallon
the 15Bgal limit that either meets the RFS2 regulations. However, obligated cellulosic biofuel standard is met with
20% GHG threshold or is grandfathered. parties would not be required to cellulosic ethanol, also shown in Table
It should be noted, however, that there purchase more than 15 Bgal worth of IV.A.31.
TABLE IV.A.31CONTROL CASE PROJECTED RENEWABLE FUEL VOLUMES IN 2022

[Billion gallons]
Advanced biofuel Non-ad-

vanced
Cellulosic biofuel Biomass-based diesel a Other advanced biofuel biofuel Total renew-
Case/volume type able fuel
Cellulosic Cellulosic FAME c bio- Other bio- Imported Corn eth-
NCRD d
ethanol diesel b diesel diesel e ethanol anol
Low-Ethanol Straight Vol-

ume ............................... 0.25 9.26 0.85 0.15 0.82 2.24 15.00 28.57
Low-Ethanol Ethanol-
Equivalent ..................... 0.25 15.75 1.28 0.26 1.23 2.24 15.00 36.00
High-Ethanol Straight Vol-
ume ............................... 16.00 0.00 0.85 0.15 0.82 2.24 15.00 35.06
High-Ethanol Ethanol-
Equivalent ..................... 16.00 0.00 1.28 0.26 1.23 2.24 15.00 36.00
b Cellulosic Diesel includes 1.96 billion gallons (3.33 ethanol-equivalent billion gallons) from Fischer-Tropsch Biomass-to-Liquids (BTL) proc-
esses and 7.30 billion gallons (12.42 ethanol-equivalent billion gallons) from other types of cellulosic diesel processes for the Low-Ethanol case
and zero cellulosic diesel in the High-Ethanol Case.
c Fatty acid methyl ester (FAME) biodiesel.
d Non-Co-processed Renewable Diesel (NCRD).
e Other Biodiesel is biodiesel that could be produced in addition to the amount needed to meet the biomass-based diesel standard.
In comparison, our primary control processing corn and other similarly came from locally grown corn.41 The
case described in Section IV.A.2, could processed grains in the Midwest. nation is currently on track for
be considered a mid-ethanol control However, there are a handful of plants producing over 10 billion gallons by the
case, as the cellulosic ethanol and diesel located outside the Corn Belt and a few end of 2009.42 Although the U.S.
volumes analyzed are in between the plants processing simple sugars from ethanol industry has been in existence
low-ethanol and high-ethanol cases food or beverage waste. In this section, since the 1970s, it has rapidly expanded
described in this section. We believe the we summarize the present state of the in recent years due to the phase-out of
addition of these sensitivity cases is corn/starch ethanol industry and methyl tertiary butyl ether (MTBE),
useful in understanding the potential discuss how we expect things to change elevated crude oil prices, state mandates
impacts of the renewable fuels in the future under the RFS2 program. and tax incentives, the introduction of
standards. Refer to Section 1.2 of the the Federal Volume Ethanol Excise Tax
RIA for more detail on three control a. Historic/Current Production

cases analyzed as part of this rule. 41 Based on total transportation ethanol reported
The United States is currently the in EIAs September 2009 Monthly Energy Review
B. Renewable Fuel Production largest ethanol producer in the world. In (Table 10.2) less imports (http://tonto.eia.doe.gov/
dnav/pet/hist/mfeimus1a.htm).
1. Corn/Starch Ethanol 2008, the U.S. produced nine billion 42 Based on ethanol projected in EIAs October
gallons of fuel ethanol for domestic 2009 Short Term Energy Outlook less projected
The majority of domestic biofuel consumption, the majority of which imports. Actual year-end data for 2009 was
production currently comes from plants unavailable at the time of this FRM assessment.
Credit (VEETC),43 the implementation new volume requirements established 1, U.S. ethanol production has grown
of the existing RFS1 program,44 and the under EISA. As shown in Figure IV.B.1 exponentially over the past decade.
As of November 2009 there were 180 162 utilize dry-milling technologies and facilities are designed to extract in
corn/starch ethanol plants operating in the remaining 11 plants rely on wet- excess of 7.3 million gallons of corn oil
the U.S. with a combined production milling processes. Dry mill ethanol per year. Primafuel Solutions is another
capacity of approximately 12 billion plants grind the entire kernel and company offering corn oil extraction
gallons per year.46 This does not include generally produce only one primary co- technologies to make existing ethanol
idled ethanol plants, discussed later in product: distillers grains with solubles plants more sustainable. For more
this subsection. The majority of todays (DGS). The co-product is sold wet information on corn oil extraction and
ethanol production (91.5% by volume) (WDGS) or dried (DDGS) to the other advanced technologies being
comes from 155 plants relying agricultural market as animal feed. pursued by todays corn ethanol
exclusively on corn. Another 8.3% However, there are a growing number of industry, refer to Section 1.4.1 of the
comes from 18 plants processing a blend plants using front-end fractionation to RIA.
of corn and/or similarly processed produce food-grade corn oil or back-end In contrast to dry mill plants, wet mill
grains (milo, wheat, or barley). The extraction to produce fuel-grade corn oil facilities separate the kernel prior to
remainder comes from seven small for the biodiesel industry. A company processing into its component parts
plants processing waste beverages or called GreenShift has corn oil extraction (germ, fiber, protein, and starch) and in
other waste sugars and starches. facilities located at five ethanol plants turn produce other co-products (usually
Of the 173 plants processing corn in Michigan, Indiana, New York and gluten feed, gluten meal, and food-grade
and/or other similarly processed grains, Wisconsin.47 Collectively, these corn oil) in addition to DGS. Wet mill
43 On October 22, 2004, President Bush signed fuel be blended into gasoline/diesel by 2006, correspondence with producers. The baseline does
into law H.R. 4520, the American Jobs Creation Act growing to 7.5 billion gallons by 2012. not include ethanol plants whose primary business
of 2004 (JOBS Bill), which created the Volumetric 45 Based on total transportation ethanol reported is industrial or food-grade ethanol production nor
Ethanol Excise Tax Credit (VEETC). The $0.51/gal in EIAs September 2009 Monthly Energy Review does it include plants that might be located in the
ethanol blender credit replaced the former fuel
(Table 10.2) less imports (http://tonto.eia.doe.gov/ Virgin Islands or U.S. territories. Where applicable,
excise tax exemption, blenders credit, and pure
dnav/pet/hist/mfeimus1a.htm). current/historic production levels have been used
ethanol fuel credit. However, the 2008 Farm Bill
46 Our November 2009 corn/starch ethanol in lieu of nameplate capacities to estimate
modified the alcohol credit so that corn ethanol gets
a reduced credit of $0.45/gal and cellulosic biofuel industry characterization was based on a variety of production capacity.
sources including plant lists published online by 47 Two plants in Michigan and one in each of the
gets a credit of $1.01/gal.
44 On May 1, 2007, EPA published a final rule (72 the Renewable Fuels Association and Ethanol other three states. All company information based
FR 23900) implementing the Renewable Fuel Producer Magazine (updated October 22, 2009), on GreenShifts Q2 2009 SEC filing available at
Standard required by EPAct (also known as RFS1). information from ethanol producer Web sites http://www.greenshift.com/pdf/
ER26MR10.419</GPH>
RFS1 requires that 4.0 billion gallons of renewable including press releases, and follow-up GERS_Form10Q_Q209_FINAL.pdf.
plants are generally more costly to build burns a combination of natural gas, dioxide (CO2) gas are released. In some
but are larger in size on average.48 As landfill biogas and wood, and two burn plants the CO2 is vented into the
such, 11.4% of the current grain ethanol natural gas and syrup from the process. atmosphere, but where local markets
production comes from the 11 We are aware of 17 plants that burn coal exist, it is captured, purified, and sold
previously mentioned wet mill as their primary fuel and one that burns to the food processing industry for use
facilities. a combination of coal and biomass.51 in carbonated beverages and flash-
The remaining seven ethanol plants Our research suggests that three corn freezing applications. We are currently
process waste beverages or waste ethanol plants rely on a combination of aware of 40 fuel ethanol plants that
sugars/starches and operate differently waste heat and natural gas and one recover CO2 or have facilities in place to
than their grain-based counterparts. plant does not have a boiler and relies do so. According to Airgas, a leading gas
These small production facilities do not solely on waste heat from a nearby distributor, the U.S. ethanol industry
require milling and operate simpler power plant. Overall, our research currently recovers 2 to 2.5 million tons
enzymatic fermentation processes. suggests that 27 plants currently utilize of CO2 per year which translates to
Ethanol production is a relatively cogeneration or combined heat and about 57% of all the CO2 produced by
resource-intensive process that requires power (CHP) technology, although
the use of water, electricity, and steam. the industry.54
others may exist.52 CHP is a mechanism
Steam needed to heat the process is for improving overall plant efficiency. Since the majority of ethanol is made
generally produced on-site or by other Whether owned by the ethanol facility, from corn, it is no surprise that most of
dedicated boilers.49 The ethanol their local utility, or a third party, CHP the plants are located in the Midwest
industry relies primarily on natural gas. facilities produce their own electricity near the Corn Belt. Of todays 180
Of todays 180 ethanol production and use the waste heat from power ethanol production facilities, 163 are
facilities, an estimated 151 burn natural production for process steam, reducing located in the 15 states comprising
gas 50 (exclusively), three burn a the energy intensity of ethanol PADD 2. For a map of the governments
combination of natural gas and biomass, production.53 Petroleum Administration for Defense
one burns natural gas and coal (although During the ethanol fermentation Districts or PADDs, refer to Figure
natural gas is the primary fuel), one process, large amounts of carbon IV.B.12.
As a region, PADD 2 accounts for over The U.S. ethanol industry is currently todays online ethanol production
94% (or 11.3 billion gallons) of todays comprised of a mixture of company- capacity.55 Furthermore, nearly 30% of
estimated ethanol production capacity, owned plants and locally-owned farmer the total domestic product comes from
followed by PADD 3 (2.4%), PADDs 4 cooperatives (co-ops). The majority of 40 plants owned by just three different
and 1 (each with 1.3%) and PADD 5 todays ethanol production facilities are companiesPOET Biorefining, Archer
(0.8%). For more information on todays company-owned, and on average these Daniels Midland (ADM), and Valero
ethanol plant locations, refer to Section plants are larger in size than farmer- Renewables. Valero entered the ethanol
1.5.1 of the RIA. owned co-ops. Accordingly, these industry in March of 2009 when it
facilities account for about 80% of acquired seven ethanol plants from
48 According to our November 2009 corn ethanol 50 Facilities were assumed to burn natural gas if 53 For more on CHP technology, refer to Section
plant assessment, the average wet mill plant the plant boiler fuel was unspecified or unavailable 1.4.1.3 of the RIA.
capacity is 125 million gallons per yearalmost on the public domain. 54 Based on information provided by Bruce
51 Includes corrections from NPRM based on new Woerner at Airgas on August 14, 2009.
twice that of the average dry mill plant capacity (65
million gallons per year). For more on average plant information obtained on Cargill plants and Blue 55 Company-owned plants were assumed to be all
sizes, refer to Section 1.5 of the RIA. Flint ethanol plant. those companies not denoted as locally-owned
52 CHP assessment based on information provided based on Renewable Fuels Association (RFA),
49 Some plants pull steam directly from a nearby
by EPAs Combined Heat and Power Partnership, Ethanol Biorefinery Locations (updated October 22,
utility.
literature searches and correspondence with 2009). For more on average plant sizes, refer to
ER26MR10.420</GPH>
ethanol producers. Section 1.5.1 of the RIA.
former ethanol giant, Verasun. The oil a means to protect themselves from added to the mix.63 Of these new and
company currently has agreements in creditors as they restructure their returning idled plants, were aware of
place to purchase three more ethanol finances with the goal of becoming five facilities currently planning to use
plants that would bring the companys sustainable. CHP technology, bringing the U.S. total
ethanol production capacity to 1.1 Crude oil prices are expected to to 32.
billion gallons per year.56 However, increase in the future making corn The above predictions are based on
ethanol plants are much smaller than ethanol more economically viable. the industrys current near-term
petroleum refineries. Valeros smallest According to EIAs AEO 2009, crude oil production plans. However, we
petroleum refinery in Ardmore, OK has prices are projected to increase from anticipate additional growth in
about twice the throughput of all its about $80/barrel (todays price) to $116/ advanced ethanol production
ethanol plants combined.57 Still, as barrel by 2022.59 As oil and gas prices technologies under the RFS2 program.
obligated parties under RFS1 and RFS2, rebound, we expect that the biofuels Forecasted fuel prices are projected to
the refining industry continues to show industry will as well. Since our April drive corn ethanol producers to
increased interest in biofuels. Suncor 2009 industry assessment used for the transition from conventional boiler fuels
and Murphy Oil recently joined Valero NPRM, at least nine corn ethanol plants to biomass feedstocks. In addition, fossil
as the second and third oil companies have come back online. fuel/electricity prices will likely drive a
to purchase idled U.S. ethanol plants. number of ethanol producers to pursue
Many refiners are also supporting the For analysis purposes, we assumed CHP technology. For more on our
development of cellulosic biofuels and that all 27 idled corn/starch ethanol projected 2022 utilization of these
algae-based biodiesel. plants would resume operations by 2022 technologies under the RFS2 program,
under the RFS2 program. We also refer to Section 1.5.1.3 of the RIA.
b. Forecasted Production Under RFS2 assumed that a total of 11 new ethanol
As highlighted earlier, domestic plants and two expansion projects 2. Imported Ethanol
ethanol production is projected to grow currently under construction or in As discussed in the proposal, ethanol
to over 10 billion gallons in 2009. And advanced stages of planning would imports have traditionally played a
with over 12 billion gallons of capacity come online.60 This includes two large relatively small role in the U.S.
online as of November 2009, ethanol dry mill expansion projects currently transportation fuel market due to
production should continue to grow in underway at existing ADM wet mill historically low crude prices and the
2010, provided plants continue to plants and two planned combination tariff on imported ethanol. Between
produce at or above todays production corn/cellulosic ethanol plants that years 2000 and 2008, the volume of
levels. In addition, despite current received funding from DOE. While ethanol imported into the U.S. has
market conditions (i.e., poor ethanol several of these projects are delayed or ranged from 46720 million gallons per
margins), the ethanol industry is on hold at the moment, we expect that year. So far this year, from January
expected to grow in the future under the these facilities (or comparable through November 2009, imported
RFS2 program. Although there is not a replacement projects) would eventually ethanol has only reached 197 million
set corn ethanol requirement, EISA come online to get the nation to gallons.64 As the data show, the volume
allows for 15 billion gallons of the 36- approximately 15 billion gallons of corn of imported ethanol can fluctuate
billion gallon renewable fuel standard to ethanol production capacity. greatly.
be met by conventional biofuels. We Almost 100% of conventional ethanol In the past, the majority of volume has
expect that corn ethanol will fulfill this plant growth is expected to come from originated from countries that are part of
requirement, provided it is more cost facilities processing corn or other the Caribbean Basin Initiative. Direct
competitive than imported ethanol or similarly processed grains. And not Brazilian imports have also made up a
cellulosic biofuel in the marketplace. surprisingly, the majority of growth sizeable portion of total ethanol
In addition to the 180 aforementioned (approximately 70% by volume) is imported into the U.S. However,
corn/starch ethanol plants currently expected to originate from PADD 2. recently there have been relatively small
online, 27 plants are presently idled.58 However, growth is expected to occur in amounts of direct imports of ethanol
Some of these are smaller ethanol plants all PADDs. With the exception of one from Brazil.65 This indicates that
that have been idled for quite some facility,61 all new corn/grain ethanol current market conditions have made
time, whereas others are in a more plants are expected to utilize dry importing Brazilian ethanol directly to
temporary hot idle mode, ready to be milling technologies and the majority of the U.S. uneconomical. Part of the
restarted. In response to the economic new production is expected to come reason for this decline in imports is the
downturn, a number of ethanol from plants burning natural gas. cessation of the duty drawback that
producers have idled production, halted However, we anticipate that two manure became effective on October 1, 2008, but
construction projects, sold off plants biogas plants,62 one biomass-fired plant, also changes in world sugar prices.66
and even filed for Chapter 11 and two coal-fired ethanol plants will be
bankruptcy protection. Some corn 63 The two coal fired plants are the
ethanol companies have exited the aforementioned dry mill expansion projects
59 EIA, Annual Energy Outlook 2009ARRA currently underway at existing ADM sites. These
industry all together (e.g., Verasun) Update (Table 12). projects commenced construction on or before
whereas others are using bankruptcy as 60 Sources include Renewable Fuels Association, December 19, 2007 and would therefore should
Ethanol Biorefinery Locations (updated October 22, likely be grandfathered under the RFS2 rule. For
56 Valero recently announced that it has purchase 2009) and Ethanol Producer Magazine, Producing, more on our grandfathering assessment, refer to
agreements in place to acquire the last two Verasun Not Producing, Under Construction, and Section 1.5.1.4 of the RIA.
plants in Linden, IN and Bloomington, OH and the Expansions lists (last modified on October 22, 2009) 64 Official Statistics of the U.S. Department of
former Renew Energy plant in Jefferson Junction, in addition to information gathered from producer Commerce, U.S. ITC.
WI. Web sites and follow-up correspondence. 65 Approximately 19,000 gallons directly from
57 Based on refinery information provided at 61 Tate and Lyle is currently in the process of Brazil in the month of June 2009 and 4 million
http://www.valero.com/OurBusiness/OurLocations/. building a 115 MGY wet mill corn ethanol plant in gallons from Brazil in the month of November 2009,
58 Based on our November 2009 corn/starch Fort Dodge, IA. zero gallons reported from November 2008May
ethanol industry characterization. We are aware of 62 One manure biogas plant that is currently idled 2009 and July 2009October 2009.
at least one plant that has come back online since and another that was under construction but is now 66 Lundell, Drake, Brazilian Ethanol Export
then. on hold. Surge to End; U.S. Customs Loophole Closed Oct.
It is difficult to project the potential export is available to countries around sugarcane, etc. Non-edible cellulosic
volume of future ethanol imports to the the world, only a portion of this will be feedstocks have the potential to greatly
U.S. based purely on historical data. available exclusively to the United expand biofuel production, both
Rather, it is necessary to assess future States. If the balance of the EISA volumetrically and geographically.
import potential by analyzing the major advanced biofuel requirement not met Research and development on cellulosic
players for foreign ethanol production with cellulosic biofuel and biomass- biofuel technologies has exploded over
and consumption. In 2008, the top three based diesel were to be met with the last few years, and plants to
fuel ethanol producers were the U.S., imported sugarcane ethanol alone, it commercialize a number of these
Brazil, and the European Union (EU), would require about 2.2 billion gallons technologies are already beginning to
producing 9.0, 6.5, and 0.7 billion (see Table IV.A.21), or approximately materialize. The $1.01/gallon tax credit
gallons, respectively.67 Consumption of 55% of total Brazilian ethanol export for cellulosic biofuel that was
fuel ethanol is also dominated by the estimates. This is aggressive, yet within introduced in the 2008 Farm Bill and
United States and Brazil with the bounds of reason, therefore, we have recently became effective, is also
approximately 9.6 and 4.9 billion made this simplifying assumption for offering much incentive to this
gallons consumed in each country, the purposes of further analysis. developing industry. In addition to
respectively.68 69 The EU consumed Generally speaking, Brazilian ethanol todays RFS2 program which sets
approximately 0.9 billion gallons of fuel exporters will seek routes to countries aggressive goals for cellulosic biofuel
ethanol in 2008.70 with the lowest costs for transportation, production, the Department of Energy
In our assessment of foreign ethanol taxes, and tariffs. With respect to the (DOE), Department of Agriculture
production and consumption, we U.S., the most likely route is through the (USDA), Department of Defense (DOD)
analyzed the following countries or Caribbean Basin Initiative (CBI).74 and state agencies are helping to spur
group of countries: Brazil, the EU, Brazilian ethanol entering the U.S. industry growth.
Japan, India, and China. Our analyses through CBI countries is not currently
indicate that Brazil would likely be the subject to the 54 cent/gal imported a. Current State of the Industry
only nation able to supply any ethanol tariff and yet receives the 45 There are a growing number of biofuel
meaningful amount of ethanol to the cent/gal ethanol blender credit. In producers, biotechnology companies,
U.S. in the future. Depending on addition to the U.S., other countries also universities and research institutes,
whether the mandates and goals of the have similar tariffs on imported ethanol. start-up companies as well as refiners
EU, Japan, India, and China are enacted Refer to Section 1.5.2 of the RIA for investigating cellulosic biofuel
or met in the future, it is likely that this more details. Due to the economic production. The industry is currently
group of countries would consume any incentive of transporting ethanol pursuing a wide range of feedstocks,
growth in their own production and be through the CBI, we expect the majority conversion technologies and fuels.
net importers of ethanol, thus of the tariff rate quota (TRQ) to be met There is much optimism surrounding
competing with the U.S. for Brazilian or exceeded, perhaps 90% or more. The the long-term viability of cellulosic
ethanol exports. TRQ is set each year as 7% of the total ethanol and other alcohols for gasoline
Due to uncertainties in the future domestic ethanol consumed in the prior blending. There is also great promise
demand for ethanol domestically and year. If we assume that 90% of the TRQ and growing interest in synthetic
internationally, uncertainties in the is met and that total domestic ethanol hydrocarbons like gasoline, diesel and
actual investments made in the (corn and cellulosic ethanol) consumed jet fuel as drop in petroleum
Brazilian ethanol industry, as well as in 2021 was 19.2 Bgal (under the replacements. Some companies intend
uncertainties in future sugar prices, primary control case), then to start by processing corn or sugarcane
there appears to be a wide range of approximately 1.21 Bgal of ethanol and then transition to cellulosic
Brazilian production and domestic could enter the U.S. through CBI feedstocks while others are focusing
consumption estimates. The most countries in 2022. The rest of the entirely on cellulosic materials.
current and complete estimates indicate Brazilian ethanol exports not entering Regardless, cellulosic biofuel
that total Brazilian ethanol exports will the CBI will compete on the open production is beginning to materialize.
likely reach 3.84.2 billion gallons by market with the rest of the world We are currently aware of over 35
2022.71 72 73 As this volume of ethanol demanding some portion of direct small pilot- and demonstration-level
Brazilian ethanol. To meet our advanced plants operating in North America.
1, Ethanol and Biodiesel News, Issue 45, November biofuel standard, we assumed 1.03 Bgal However, the main focus at these
4, 2008. facilities is research and development,
67 Renewable Fuels Association (RFA), 2008 of sugarcane ethanol would be imported
directly to the U.S. in 2022. not commercial production. Most of the
World Fuel Ethanol Production, http://
www.ethanolrfa.org/industry/statistics/#E, March plants are rated at less than 250,000
31, 2009. 3. Cellulosic Biofuel gallons per year and thats if they were
68 Ibid.
The majority of the biofuel currently operated at capacity. Most only operate
69 UNICA, Sugarcane Industry in Brazil: Ethanol
produced in the United States comes intermittently for the purpose of
Sugar, Bioelectricity Brochure, 2008. demonstrating that the technologies can
70 EurObservER, Biofuels Barometer July 2009, from plants processing first-generation
http://www.eurobserv-er.org/pdf/baro192.pdf. feedstocks like corn, plant oils, be used to produce transportation fuels.
71 EPE, Plano Nacional de Energia 2030, The industry as a whole is still working
Presentation from Mauricio Tolmasquim, 2007. 74 Other preferential trade agreements include the to increase efficiency, improve yields,
72 UNICA, Sugarcane Industry in Brazil: Ethanol, North American Free Trade Agreement (NAFTA) reduce costs and prove to the public, as
Sugar, Bioelectricity, 2008. which permits tariff-free ethanol imports from well as investors, that cellulosic biofuel
73 USEPA International Visitors Program Meeting Canada and Mexico and the Andean Trade
October 30, 2007, correspondence with Mr. Promotion and Drug Eradication Act (ATPDEA) is both technologically and
Rodrigues Technical Director from UNICA Sao which allows the countries of Columbia, Ecuador, economically feasible.
Paulo Sugarcane Agro-industry Union, stated Bolivia, and Peru to import ethanol duty-free. As mentioned above, a variety of
approximately 3.7 billion gallons probable by 2017/ Currently, these countries export or produce feedstocks are being investigated for
2020; Consistent with brochure Sugarcane Industry relatively small amounts of ethanol, and thus we
in Brazil: Ethanol Sugar, Bioelectricity from have not assumed that the U.S. will receive any
cellulosic biofuel production. There is a
UNICA (3.25 Bgal export in 2015 and 4.15 Bgal substantial amounts from these countries in the great deal of interest in urban waste
export in 2020). future for our analyses. (MSW and C&D debris) because it is
virtually free and abundant in many cellulosic biofuel production is less and that the facility would be operating
parts of the country, including large than the minimum applicable volume, at full capacity by the end of 2009 and
metropolitan areas where the bulk of EPA can reduce the standard based on that three more 50 MGY cellulosic
fuel is consumed. There is also a lot of the volume expected to be available that diesel plants planned for the Southeast
interest in agricultural residues (corn year. EPA is required to set the annual could be brought online by the end of
stover, rice and other cereal straws) and cellulosic standard by November 30th 2010.
wood (forest thinnings, wood chips, each year and should consider the At the time of our assessment, we
pulp and paper mill waste and yard annual estimate made by EIA by were also anticipating cellulosic biofuel
waste). However, researchers are still October 31st of each year. We are setting production from Range Fuels first
working to find viable harvesting and the 2010 standard as part of this final commercial-scale plant in Soperton, GA.
storage solutions. Others are rule. The company received a $76 million
investigating the possibility of growing Setting the cellulosic biofuel standard grant from DOE to help build a 40 MGY
dedicated energy crops for cellulosic for 2010 represents a unique challenge. wood-based ethanol plant and they
biofuel production, e.g., switchgrass, As discussed above, the industry is broke ground in November 2007. In
energy cane, sorghum, poplar, currently characterized by a wide range January 2009, Range was awarded an
miscanthus and other fast-growing trees. of companies mostly focused on $80 million loan guarantee from
While these crops have tremendous research, development, demonstration, USDA.75 With the addition of this latest
potential, many are starting with the and financing their developing capital, the company seemed well on its
feedstocks that are available today with technologies. In addition, while we are way to completing construction of its
the mentality that once the industry has finalizing a requirement that producers first 10 MGY phase by the end of 2009
proven itself, it will be easier to secure and importers of renewable fuel provide and beginning production in 2010.
growing contracts and start producing us with production outlook reports Since our April 2009 industry
energy crops. For more information on detailing future supply estimates (refer assessment there have been a number of
cellulosic feedstock availability, refer to to 80.1449), we do not have the benefit changes and delays in production plans
preamble Section IV.B.3.d and Section of this valuable cellulosic supply due to technological, contractual,
1.1.2 of the RIA. information for setting the 2010 financial and other reasons. Cello
The industry is also pursuing a standard. Finally, since todays Energy and Range Fuels have delayed or
number of different cellulosic cellulosic biofuel production potential reduced their production plans for 2010.
conversion technologies and biofuels. is relatively small, and the number of Some of the small plants expected to
Most of the technologies fall into one of potential producers few (as described in come online in 2010 have pushed back
two categories: biochemical or more detail below), the overall volume production to the 20112012 timeframe,
thermochemical. Biochemical for 2010 can be heavily influenced by e.g., Clearfuels Technology, Fulcrum
conversion involves the use of acids new developments, either positive or River Biofuels, and ZeaChem. Alltech/
and/or enzymes to hydrolyze cellulosic negative associated with even a single Ecofin and RSE Pulp & Chemical, two
materials into fermentable sugars and company, which can be very difficult to companies that were awarded DOE
lignin. Thermochemical conversion predict. This is evidenced by the funding back in 2008 to build small-
involves the use of heat to convert magnitude of changes in cellulosic scale biorefineries appear to be
biomass into synthesis gas or pyrolysis biofuel projections and the potential permanently on hold or off the table. In
oil for upgrading. A third technology suppliers of these fuels since the addition, Bell Bio-Energy, a company
pathway is emerging that involves the proposal. that received DOD funding has since
use of catalysts to depolymerize or In the proposal, we did a preliminary abandoned plans to produce cellulosic
reform the feedstocks into fuel. The assessment of the cellulosic biofuel diesel from MSW at U.S. military
technologies currently being considered industry to arrive at the conclusion that bases.76
are capable of producing cellulosic it was possible to uphold the 100 At the same time, there has also been
alcohols or hydrocarbons for the million gallon standard in 2010 based an explosion of new companies, new
transportation fuel market. Many on anticipated production. At the time business relationships, and new
companies are also researching the of our April 2009 NPRM assessment, we advances in the cellulosic biofuel
potential of co-firing biomass to produce were aware of a handful of small pilot industry. Keeping track of all of them is
plant energy in addition to biofuels. For and demonstration plants that could a challenge in and of it self as the
a more in-depth discussion on cellulosic help meet the 2010 standard, but the situation can change on a daily basis.
technologies, refer to Section 1.4.3 of largest volume contributions were EIA recently provided EPA with their
the RIA. expected to come from Cello Energy and first cellulosic biofuel supply estimate
Range Fuels. required under CAA section
b. Setting the 2010 Cellulosic Biofuel Cello Energy had just started up a 20 211(o)(7)(D)(i). In a letter to the
Standard million gallon per year (MGY) cellulosic Administrator dated October 29, 2009,
The Energy Independence and diesel plant in Bay Minette, AL. EPA they arrived at a 5.04 million gallon
Security Act (EISA) set aggressive staff visited the facility twice in 2009 to estimate for 2010 based on publicly
cellulosic biofuel targets beginning with confirm that the first-of-its-kind available information and assumptions
100 million gallons in 2010. However, commercial plant was mechanically made with respect production capacity
EISA also supplied EPA with cellulosic complete and poised to produce utilization.77 A summary of the plants
biofuel waiver authority. For any cellulosic biofuel. It was assumed that they considered is shown below in
calendar year in which the projected start-up operations would go as planned Table IV.B.31.
75 For more information on federal support for 76 Bell Bio-Energy is currently investigating other 77 Letter from Richard Newell, EIA Administrator
biofuels, refer to Section 1.5.3.3 of the RIA. locations for turning MSW into diesel fuel to Lisa Jackson, EPA Administrator dated October
according to an October 14, 2009 conversation with 29, 2009 (Table 2).
JC Bell.
TABLE IV.B.31EIAS PROJECTED CELLULOSIC BIOFUEL PLANT PRODUCTION CAPACITIES FOR 2010
Capacity Production
Expected
Online Company Location Product (million (million
utilization (%)
gallons) gallons) 3
2007 ......................... KL Process Design .. Upton, WY ................ Ethanol ..................... 1.5 10 0.15
2008 ......................... Verenium .................. Jennings, LA ............ Ethanol ..................... 1.4 10 0.14
2008 ......................... Terrabon ................... Bryan, TX ................. Bio-Crude ................. 0.93 10 0.09
2010 ......................... Zeachem .................. Boardman, OR ......... Ethanol ..................... 1.5 10 0.15
2010 ......................... Cello Energy ............ Bay Minette, AL ....... Diesel ....................... 20.0 10 1 2.00
2010 ......................... Range Fuels ............. Soperton, GA ........... Ethanol ..................... 5.0 2 50 2.5
Total .................. .................................. .................................. .................................. 30.35 ........................ 5.04

Notes: 1. Cello Energy is assigned a 10-percent utilization factor as they have not been able to run on a continuous basis long enough to
apply for a Synthetic Minor Operating Permit or produce significant amounts of fuel during 2009. 2. It is estimated that only half the 2010 pro-
jected capacity (10 million gallons per year) will be a qualified fuel. 3. The production from these facilities in 2009 is not surveyed by EIA or EPA.
In addition to receiving EIAs considered for the NPRM with a 1.5 to generate RINs under the RFS2
information and coordinating with them MGY cellulosic ethanol plant in Upton, program.78
and other offices in DOE, we have WY. This plant was considered by EIA Iogen is responsible for opening the
initiated meetings and conversations and is included in Table IV.B.31. The first commercial demonstration
with over 30 up-and-coming advanced second is Iogens cellulosic ethanol cellulosic ethanol plant in North
biofuel companies to verify publicly plant in Ottawa, Canada with a 0.5 MGY America. Iogens plant located in
available information, obtain capacity. Iogens commercial Ottawa, Canada has been producing
confidential business information, and demonstration plant was referenced by cellulosic ethanol from wheat straw
better assess the near-term cellulosic EIA as a potential foreign source for since 2004. Like KL Energy, Iogen has
biofuel production potential for use in cellulosic biofuel but was not included slowly been ramping up production at
setting the 2010 standard. What we have in their final table. In addition to these its 0.5 MGY plant. According to the
found is that the cellulosic biofuel online demonstration plants, there are companys Web site, they produced
landscape has continued to evolve. three additional companies not on EIAs approximately 24,000 gallons in 2004
Based on information obtained, not only list that are currently building and 34,000 gallons in 2005. Production
do we project significantly different demonstration-level cellulosic biofuel dropped dramatically in 2006 and 2007
production volumes on a company-by- plants in North America that are but came back strong with 55,000
company basis, but the list of potential scheduled to come online in 2010. This gallons in 2008. Iogen recently
producers of cellulosic biofuel in 2010 includes DuPont Danisco Cellulosic produced over 150,000 gallons of
is also significantly different than that Ethanol and Fiberight, companies ethanol from the demonstration plant in
identified by EIA. building demonstration plants in the 2009. Iogen also recently became the
Overall, our industry assessment U.S. and Enerkem, a company building first cellulosic ethanol producer to sell
suggests that it is difficult to rely on a demonstration plant in Canada. Cello its advanced biofuel at a retail service
commercial production from small pilot Energys plant in Bay Minette, AL station in Canada. Their cellulosic
or demonstration-level plants. The continues to offer additional potential ethanol was blended to make E10
primary purpose of these facilities is to for cellulosic biofuel in 2010. And available for sale to consumers at an
prove that a technology works and finally, Dynamotive, a company that Ottawa Shell station. Iogen also recently
demonstrate to investors that the currently has two biomass-based announced plans to build its first
process is capable of being scaled up to pyrolysis oil production plants in commercial scale plant in Prince Albert,
support a larger commercial plant. Canada is another potential source of Saskatchewan in the 2011/2012
Small plants are cheaper to build to cellulosic biofuel in 2010. All seven timeframe. Based on the companys
demonstrate technology than larger aforementioned companies are location and operating status, Iogen
plants, but the operating costs ($/gal) are discussed in greater detail below along certainly has the potential to participate
higher due to their small scale. As a with Range Fuels. in the RFS2 program. However, at this
result, its not economical for most of KL Energy Corporation (KL Energy), time, we are not expecting them to
these facilities to operate continuously. through its majority-owned Western import any cellulosic ethanol into the
Most of these plants are regularly shut Biomass Energy, LLC (WBE) located in U.S. in 2010.79
down and restarted as needed as part of Upton, WY, is designed to convert wood DuPont Danisco Cellulosic Ethanol,
the research and development process. products and wood waste products into LLC (DDCE), a joint venture between
Due to their intermittent nature, most of ethanol. Since the end of construction DuPont and Danisco, is another
these plants operate at a fraction of their in September 2007, equipment potential source for cellulosic biofuel in
rated capacity, some less than the 10% commissioning and process revisions 2010. DDCE received funding from the
utilization rate assumed by EIA. In continued until the October 2009 State of Tennessee and the University of
addition, few companies plan on startup. The plant was built as a 1.5 Tennessee to build a small 0.25 MGY
making their biofuel available for MGY demonstration plant and was demonstration plant in Vonore, TN to
commercial sale. designed to both facilitate research and

However, there are at least two operate commercially. It is KL Energys 78 Based on information provided by Lori Litzen,
cellulosic biofuel companies currently intent that WBEs future use will Environmental Permit Engineer at KL Energy on
operating demonstration plants in the involve the production and sale of small December 10, 2009.
79 Based on Web site information, comments
U.S. and Canada that could produce fuel but commercial-quality volumes of submitted in response to our proposal, and a
commercially in 2010. The first is KL ethanol and lignin co-product. The follow-up phone call with Iogen Executive VP, Jeff
Energy Corporation, a company we companys current 2010 goal is for WBE Passmore on December 17, 2009.
pursue switchgrass-to-ethanol or March, 2010. If the plant starts up count towards meeting the cellulosic
production. According to DDCE, according to plan, the company intends biofuel standard in 2010.
construction commenced in October on making cellulosic ethanol As for the Range Fuels plant,
2008 and the plant is now mechanically commercially available in 2010 and construction of phase one in Soperton,
complete and undergoing start-up generating RINS under the RFS2 GA is about 85% complete, with start-
operations. The facility is scheduled to program. Fiberights long-term goal is to up planned for mid-2010. However,
come online by the end of January and expand the Blairstown plant to a 58 there have been some changes to the
the company hopes to operate at or MGY capacity and build other small scope of the project that will limit the
around 50% of production capacity in commercial plants around the country amount of cellulosic biofuel that can be
2010. According to the DDCE, the that could convert MSW into fuel.83 produced in 2010. The initial capacity
objective in Vonore is to validate has been reduced from 10 to 4 million
processes and data for commercial Cello Energy, a company considered
gallons per year. In addition, since they
scale-up, not to make profits. However, in the proposal, continues to be another
plan to start up the plant using a
the company does plan to sell the viable source for cellulosic biofuel in
methanol catalyst they are not expected
cellulosic ethanol it produces.80 2010. Despite recent legal issues which to produce qualifying renewable fuel in
Enerkem is another company have constrained the companys capital, 2010. During phase two of their project,
pursuing cellulosic ethanol production. Cello Energy is still pursuing cellulosic currently slated for mid-2012, Range
The Canadian-based company was diesel production. According to the plans to expand production at the
recently announced as a recipient of a company, they are currently working to Soperton plant and transition from a
joint $50 million grant from DOE and resolve materials handling and methanol to a mixed alcohol catalyst.
USDA to build a 10 MGY woody processing issues that surfaced when This will allow for a greater alcohol
biomass-to-ethanol plant in Pontotoc, they attempted to scale up production to production potential as well as a greater
MS.81 The U.S. plant is not scheduled 20 MGY from a previously operated cellulosic biofuel production
to come online until 2012, but Enerkem demonstration plant. As of November potential.86
is currently building a 1.3 MGY 2009, they were waiting for new Overall, our most recent industry
demonstration plant in Westbury, equipment to be ordered and installed assessment suggests that there could
Quebec. According to the company, which they hoped would allow for potentially be over 30 MGY of cellulosic
plant construction in Westbury started operations to be restarted as early as biofuel production capacity online by
in October 2007 and the facility is February or March, 2010. Cellos other the end of 2010.87 However, since most
currently scheduled to come online planned commercial facilities are of the plants are still under construction
around the middle of 2010. While its currently on hold until the Bay Minette today, the amount of cellulosic biofuel
unclear at this time whether the plant is operational.84 produced in 2010 will be contingent
cellulosic ethanol produced will be upon when and if these plants come
exported to the United States, Enerkem Another potential supplier of
cellulosic biofuel is Dynamotive Energy online and whether the projects get
has expressed interest in selling its fuel delayed due to funding or other reasons.
commercially.82 Systems (Dynamotive) headquartered in
Vancouver, Canada. Dynamotive In addition, based on our discussions
Additional cellulosic biofuel could
currently has two plants in West Lorne with the developing industry, it is clear
come from Fiberight, LLC (Fiberight) in
and Guelph, Ontario that produce that we cannot count on demonstration
2010. We recently became aware of this
biomass-based pyrolysis oil (also known plants to produce at or near capacity in
start-up company and contacted them to
as BioOil) for industrial applications. 2010, or in their first few years of
learn more about their process and
The BioOil production capacity between operation for that matter. The amount of
cellulosic biofuel production plans.
the two plants is estimated at around 9 cellulosic biofuel actually realized will
According to Fiberight, they have been
MGY, but both plants are currently depend on whether the process works,
operating a pilot-scale facility in
operating at a fraction of their rated the efficiency of the process, and how
Lawrenceville, VA for three years. They
capacity.85 However, according to a regularly the plant is run. As mentioned
have developed a proprietary process
earlier, most small plants, including
that not only fractionates MSW but recent press release, Dynamotive has
commercial demonstration plants, are
biologically converts the non-recyclable contracts in place to supply a U.S.-based
not operated continuously. As such, we
portion into cellulosic ethanol and client with at least nine shipments of
cannot base the standard on these plants
biochemicals. Fiberight recently BioOil in 2010. If Dynamotives BioOil
running at capacityat least until the
purchased a shut down corn ethanol is used as heating oil or upgraded to
industry develops further and proves
plant in Blairstown, IA and plans to transportation fuel, it could potentially
that such rates are achievable. We
convert it to become MSW-to-ethanol
currently estimate that production from
capable. According to the company, 83 Based on a December 15, 2009 telephone
first-of-its kind plants could be
construction is currently underway and conversation with Fiberight CEO, Craig Stuart-Paul
and follow-up e-mail correspondence. somewhere in the 2550% range in
the goal is to bring the 2 MGY
84 Based on a November 9, 2009 telephone 2010. Together, the implementation
demonstration plant online by February conversation with Cello Energy CEO, Jack Boykin. timelines and anticipated production
85 According to Dynamotives Web site, the
80 Based on a December 16, 2009 telephone levels of the plants described above
Guelph plant has a capacity to convert 200 tonnes
conversation with DDCE Director of Corporate of biomass into BioOil per day. If all modules are
brings the cellulosic biofuel supply
Communications, Jennifer Hutchins and follow-up fully operational, the plant has the ability to process estimate to somewhere in the 613
e-mail correspondence. 66,000 dry tons of biomass per year with an energy million gallon range for 2010.
81 Refer to December 4, 2009 DOE press release

output equivalent to 130,000 barrels of oil. The In addition, it is unclear how much
entitled, Recovery Act Announcement: Secretaries West Lorne plant has a capacity to convert 130
Chu and Vilsack Announce More Than $600 tonnes of biomass into BioOil per day which, if
we can rely on Canadian plants for
Million Investment in Advanced Biorefinery proportional to the Guelph plant, translates to an
Projects. energy-equivalent of 84,500 barrels of oil. 86 Based on a November 5, 2009 telephone
82 Based on an October 14, 2009 meeting with According to a November 3, 2009 press release, conversation with Range Fuels VP of Government
Enerkem and follow-up telephone conversation Dynamotive has contracts in place to supply a U.S.- Affairs, Bill Schafer.
with VP of Government Affairs, Marie-Helene based client with at least nine shipments of BioOil 87 For more information, refer to Section 1.5.3.2
Labrie on December 14, 2009. in 2010. of the RIA.
cellulosic biofuel in 2010. Although we such a short time, and there is a POET Biorefining in addition to Range
currently receive some conventional tremendous growth opportunity for Fuels. DOE and USDA are also issuing
biofuel imports from Canada and many cellulosic biofuels over the next several loan guarantees to help support the up-
of the aforementioned Canadian years. and-coming cellulosic biofuels industry
companies have U.S. markets in mind, Most of the cellulosic biofuel and funding research and development.
the country also has its own renewable companies weve talked to are in Many states are also providing
fuel initiatives that could keep much of different stages of proving their assistance. For more information on
the cellulosic biofuel produced from technologies. Regardless of where they government support for biofuels, refer to
coming to the United States, e.g., Iogen. are at, many have fallen behind their
Section 1.5.3.3 of the RIA.
Finally, its unclear whether all fuel original commercialization schedules.
produced by these facilities will qualify As with any new technology, there have The refining industry is also helping
as cellulosic biofuel under the RFS2 been delays associated with scaling up to fund cellulosic biofuel R&D efforts
program. Several of the companies are capacity, i.e., bugs to work out going and some of the first commercial plants.
producing fuels or using feedstocks from pilot to demonstration to Many of the major oil companies have
which may not in fact qualify as commercialization. However, most are invested in advanced second-generation
cellulosic biofuel once we receive their saying its not the technologies that are biofuels over the past 1218 months. A
detailed registration information. delaying commercialization, it is lack of few refiners (e.g., BP and Shell) have
Factoring in these considerations, the available funding. Obtaining capital has even entered into joint ventures to
cellulosic biofuel potential from the six been very challenging given the current become cellulosic biofuel producers.
more likely companies described above recession and the banking sectors General Motors and other vehicle/
could result in several different financial difficulties. This is especially engine manufacturers are also providing
production scenarios in the true for start-up companies that do not financial support to help with research
neighborhood of the recent EIA have access to capital through existing and development.
estimate. We believe this estimate of 5 investors, plant profits, etc. From what
we understand, banks are looking for A summary of some of the cellulosic
million gallons or 6.5 ethanol-
cellulosic companies to be able to show biofuel companies with near-term
equivalent million gallons represents a
that their plants are easily scalable or commercialization plans in North
reasonable yet achievable level for the
cellulosic biofuel standard in 2010 expandable to commercial size. Many America is provided in Table IV.B.32.
considering the degree of uncertainty are only considering companies that The capacities presented represent
involved with setting the standard for have built plants to one-tenth of maximum annual average throughput
the first year. As mentioned earlier, we commercial scale and have logged many based on each companys current
believe standard setting will be easier in hours of continuous operation. production plans. However, as noted,
The government is currently trying to capacity does not necessarily translate
future years once the industry matures,
help in this area. To date, the to production. Actual production of
we start receiving production outlook
Department of Energy (DOE) and the cellulosic biofuel will likely be well
reports and there is less uncertainty
Department of Agriculture (USDA) have below capacity, especially in the early
regarding feasibility of cellulosic biofuel
allocated over $720 million in federal years of production. We will continue to
production.
funding to help build pilot and track these companies and the cellulosic
c. Current Production Outlook for 2011 demonstration-scale biorefineries biofuel industry as a whole throughout
and Beyond employing advanced technologies in the the duration of the RFS2 program. In
United States. The largest installment
Since the proposal, we have also addition, we will continue to
from Recovery Act funding was recently
learned about a number of other collaborate with EIA in annual standard
announced on December 4, 2009 and
cellulosic biofuel projects in addition to includes funding for a series of larger setting. A more detailed discussion of
those described above. This includes commercial demonstration plants the plants corresponding to these
commercial U.S. production plans by including cellulosic ethanol projects by company estimates is provided in
Coskata, Enerkem and Vercipia. Enerkem and INEOS New Planet Section 1.5.3 of the RIA.
However, production isnt slated to BioEnergy, LLC. DOE has also issued BILLING CODE 656050P
begin until 2011 or later and the same grants to help fund some of the first
is true for most of the other larger plants commercial cellulosic biofuel plants. has received two installments of federal funding
were aware of that are currently under Current recipients include Abengoa towards its first planned commercial-scale plant.
development. Nonetheless, while The 19 MGY plant planned for Fulton, MS
Bioenergy, BlueFire Ethanol 88 and (originally planned for Southern California) was
cellulosic biofuel production in 2010 awarded $40 million from DOE on February 28,
may be limited, it is remarkable how 88 Although BlueFire is still working on obtaining 2008 and another $81.1 million from DOE and
much progress the industry has made in financing to build its first demonstration plant, it USDA on December 4, 2009.
BILLING CODE 656050C To determine the likely cellulosic municipal solid waste and construction
feedstocks for production of 16 billion and demolition waste.89
d. Feedstock Availability The following subsections describe
gallons cellulosic biofuel by 2022, we
A wide variety of feedstocks can be analyzed the data and results from the availability of various cellulosic
used for cellulosic biofuel production, various sources. Sources include feedstocks and the estimated amounts
including: Agricultural residues, agricultural modeling from the Forestry from each feedstock needed to meet the
Agriculture Sector Optimization Model EISA requirement of 16 Bgal of
forestry biomass, certain renewable
portions of municipal solid waste and (FASOM) to determine the most 89 It is important to note that our original plant
construction and demolition waste (i.e., economical volume of agriculture siting analysis for cellulosic ethanol facilities used
separated food, yard and incidental, and residues, energy crops, and forestry the most current version of outputs from FASOM
post-recycled paper and wood waste as resources (see Section VIII for more at the time, which was from April 2008. The siting
analysis was used to inform the air quality

discussed in Section II.B.4) and energy details on the FASOM) used to meet the modeling, which requires long leadtimes. Since
crops. These feedstocks are currently standard. We supplemented these then, FASOM has been updated to reflect better
much more difficult to convert into estimates with feedstock assessment assumptions. Therefore, the version used for the
biofuel than traditional corn/starch FRM in Section VIII on economic impacts is
estimates for the biomass portions of different from the one used for the plant siting
crops or at least require new and analysis in the NPRM. We do not believe that the
different processes because of the more differences between the two versions are enough to
ER26MR10.421</GPH>
complex structure of cellulosic material. have a major impact on the plant siting analysis.
cellulosic biofuel by 2022. Refer to newer reports. It should be noted, field after the harvest of agricultural
Section IV.B.2.c.iv for the summarized however, that our estimates of urban crops. The most common residues are
results of the types and volumes of waste availability have not changed corn stover (the stalks, leaves, and/or
cellulosic feedstocks chosen based on significantly between the proposal and cobs) and straw from wheat, rice, barley,
our analyses. the final rule. We assumed that and oats. These U.S. crops and others
approximately 26 million dry tons (of produce more than 500 million tons of
i. Urban Waste
the total 44.5 million dry tons) could be residues each year, although only a
Cellulosic feedstocks available at the used to produce biofuels. However, fraction can be used for fuel and/or
lowest cost to the ethanol producer will many areas of the U.S. (e.g., much of the
likely be chosen first. This suggests that energy production due to sustainability
Rocky Mountains) have such sparse
urban waste which is already being and conservation constraints.95 Crop
resources that an MSW and C&D
gathered today and incurs a fee for its residues can be found all over the
cellulosic facility would not likely be
disposal may be among the first to be justifiable. We did assume that in areas United States, but are primarily
used. Urban wastes are used in a variety with other cellulosic feedstocks (forest concentrated in the Midwest since corn
of ways. Most commonly, wastes are and agricultural residue), that the MSW stover accounts for half of all available
ground into mulch, dumped into land- would be used even if the MSW could agricultural residues.
fills, or incinerated. We describe two not justify the installation of a plant on Agricultural residues play an
components of urban waste, municipal its own. Therefore, we have estimated important role in maintaining and
solid waste (MSW) and construction that urban waste could help contribute improving soil quality, protecting the
and demolition (C&D) debris, below. to the production of approximately 2.3 soil surface from water and wind
MSW consists of paper, glass, metals, ethanol-equivalent billion gallons of erosion, helping to maintain nutrient
plastics, wood, yard trimmings, food fuel.93 Note that some processes are levels, and protecting water quality.
scraps, rubber, leather, textiles, etc. The likely to also process other portions of
portion of MSW that can qualify as Thus, collection and removal of
MSW (e.g., plastics, rubbers) into fuel, agricultural residues raise concerns
renewable biomass under the program is but we have only accounted for the
discussed in Section II.B.4.d. The bulk about the potential for increased
portion expected to qualify as renewable
of the biogenic portion of MSW that can erosion, reduced crop productivity,
fuel and produce RINs.
be converted into biofuel is cellulosic In addition to MSW and C&D waste depletion of soil carbon and nutrients,
material such as wood, yard trimmings, generated from normal day-to-day and water pollution. Sustainable
paper, and much of food wastes. Paper activities, there is also potential for removal rates for agricultural residues
made up approximately 31% of the total renewable biomass to be generated from have been estimated in various studies,
MSW generated in 2008.90 Although natural disasters. This includes diseased many showing tremendous variability
recycling/recovery rates are increasing trees, other woody debris, and C&D due to local differences in soil and
over time, there appears to still be a debris. For instance, Hurricane Katrina erosion conditions, soil type, landscape
large fraction of biogenic material that was estimated to have damaged (slope), tillage practices, crop rotation
ends up unused and in land-fills. C&D approximately 320 million large trees.94 managements, and the use of cover
debris is typically not available in wood Katrina also generated over 100 million crops. One of the most recent studies by
waste assessments, although some have tons of residential debris, not including top experts in the field shows that under
estimated this feedstock based on the commercial sector. Much of this current rotation and tillage practices,
population. Utilization of such waste would likely be disposed of and about 30% of corn stover (about 59
feedstocks could help generate energy or therefore go unused. Collection of this million metric tons) produced in the
biofuels for transportation. However, material for the generation of biofuel U.S. could be collected, taking into
despite various assessments on urban could be a better alternative use for this consideration erosion, soil moisture
waste resources, there is still a general waste. While we acknowledge this concerns, and nutrient replacement
lack of reliable data on delivered prices, material could provide a large source in
costs.96 The same study shows that if
issues of quality (potential for the short-term, natural disasters are
farmers convert to no-till corn
contamination), and lack of highly variable, making it hard to
predict amounts of material available in management and total stover production
understanding of potential competition
with other alternative uses (e.g., the future. Thus, for our analyses we does not change, then approximately
recycling, burning for electricity). have not included natural disaster 50% of stover (100 million metric tons)
We estimated that a total of 44.5 renewable biomass in our estimates. could be collected without causing
million dry tons of MSW (wood, yard erosion to exceed the tolerable soil loss.
ii. Agricultural and Forestry Residues This study, however, did not consider
trimmings, paper, and food waste) and
C&D wood waste could be available for The next category of feedstocks possible soil carbon loss which other
producing biofuels after factoring in chosen will likely be those that are studies indicate may be a greater
several assumptions, e.g., percent readily produced but have not yet been constraint to environmentally
contamination, percent recovered or commercially collected. This includes sustainable feedstock harvest than that
combusted for other uses, and percent both agricultural and forestry residues. needed to control water and wind
moisture.91 92 Between the proposal and Agricultural residues are expected to
this final rule, we have updated the play an important role early on in the 95 Elbehri, Aziz. USDA, ERS. An Evaluation of
assumptions noted above based on development of the cellulosic ethanol the Economics of Biomass Feedstocks: A Synthesis
industry due to the fact that they are of the Literature. Prepared for the Biomass Research
90 EPA. Municipal Solid Waste Generation, already being grown. Agricultural crop and Development Board, 2007; Since 2007, a final
Recycling, and Disposal in the United States: Facts residues are biomass that remains in the report has been released. Biomass Research and
and figures for 2008. Development Board., The Economics of Biomass
91 Wiltsee, G., Urban Wood Waste Resource 93 Assuming 90 gal/dry ton ethanol conversion Feedstocks in the United States: A Review of the
Assessment, NREL/SR57025918, National yield for urban waste in 2022. Literature, October 2008.
Renewable Energy Laboratory, November 1998. 94 Chambers, J., Hurricane Katrinas Carbon 96 Graham, R.L., Current and Potential U.S. Corn
92 Biocycle, The State of Garbage in America, Footprint on U.S. Gulf Coast Forests Science Vol. Stover Supplies, American Society of Agronomy
Vol. 49, No. 12, December 2008, p. 22. 318, 2007. 99:111, 2007.
erosion.97 Experts agree that additional provide feedstock for the production of challenges with using dedicated energy
studies are needed to further evaluate cellulosic biofuel. One of the major crops.
how soil carbon and other factors affect sources of woody biomass could come In addition to estimating the extent
sustainable removal rates. Despite from logging residues. The U.S. timber that agricultural residues might
unclear guidelines for sustainable industry harvests over 235 million dry contribute to cellulosic ethanol
removal rates due to the uncertainties tons annually and produces large production, FASOM also estimated the
explained above, our agricultural volumes of non-merchantable wood and contribution that energy crops might
modeling analysis assumes that no residues during the process.100 Logging provide (7.9 ethanol-equivalent Bgal).102
stover is removable on conventional residues are produced in conventional FASOM covers all cropland and
tilled lands, 35% of stover is removable harvest operations, forest management pastureland in production in the 48
on conservation tilled lands, and 50% is activities, and clearing operations. In contiguous United States. For the
removable on no-till lands. In general, 2004, these operations generated NPRM, FASOM did not contain all
these removal guidelines are approximately 67 million dry tons of categories of grassland and rangeland
appropriate only for the Midwest, where forest residues that were left uncollected captured in USDAs Major Land Use
the majority of corn is currently grown. at harvest sites.101 Other feedstocks data sets. For the final rule, FASOM
As already noted, removal rates will include those from other removal accounts for all major land categories,
vary by region due to local differences. residues, thinnings from timberland, including forestland and rangeland. All
Given the current understanding of and primary mill residues. crop production, including dedicated
sustainable removal rates, we believe For the NPRM, FASOM was not able energy crops, takes place on cropland.
that such assumptions are reasonably to model forestry biomass as a potential Land categories that can be converted to
justified. Based on our research, we also feedstock. As a result, we relied on cropland production include cropland
note that calculating residue USDA-Forest Service (FS) for pasture, forest pasture, and forestland.
maintenance requirements for the information on the forestry sector at the More detail can be found in Chapter VIII
amount of biomass that must remain on time. For the final rule, we were able to of this preamble. Furthermore, we
the land to ensure soil quality is another incorporate the forestry sector model in constrained FASOM to be consistent
approach for modeling sustainable FASOM. EISA does not allow forestry with the 2008 Farm Bill and assumed 32
residue collection quantities. This material from national forests and virgin million acres would stay in
approach would likely be more accurate forests that could be used to produce Conservation Reserve Program (CRP).103
for all landscapes as site-specific biofuels to count towards the renewable Other models, such as USDAs Regional
conditions such as soil type, fuels requirement under EISA. Environment and Agriculture
topography, etc. could be taken into Therefore, our modeling of forestry Programming (REAP) model and
account. This would prevent site- biomass excluded such material. The University of Tennessees POLYSYS
specific soil erosion and soil quality FASOM model estimated that model, have shown that the use of
concerns that would inevitably exist approximately 0.1 ethanol-equivalent energy crops to meet EISA could be
when using average values for residue billion gallons would be produced from significant, similar to our FASOM
removal rates across all soils and forestry biomass to meet EISA. modeling results for the final rule.104
landscapes. At the time of our analyses,
however, we had limited data on which iii. Dedicated Energy Crops iv. Summary of Cellulosic Feedstocks
to accurately apply this approach and While urban waste, agricultural for 2022
therefore assumed the removal residues and forest residues will likely
guidelines based on tillage practices. be the first feedstocks used in the Table IV.B.33 summarizes our
Our agricultural modeling (FASOM) production of cellulosic biofuel, there internal estimate of the types of
suggests that corn stover will make up may be limitations to their use due to cellulosic feedstocks projected to be
the majority of agricultural residues land availability and sustainable used and their corresponding volume
used by 2022 to meet the EISA removal rates. Energy crops which are contribution to 16 billion gallons
cellulosic biofuel standard (4.9 ethanol- not yet grown commercially but have cellulosic biofuel by 2022 for the
equivalent Bgal).98 Smaller the potential for high yields and a series purposes of our impacts assessment.
contributions are expected to come from of environmental benefits could help The majority of feedstock is projected to
other crop residues including sugarcane provide additional feedstocks in the come from dedicated energy crops.
bagasse (0.6 ethanol-equivalent Bgal), future. Dedicated energy crops are plant Other feedstocks include agricultural
wheat residues (0.1 ethanol-equivalent species grown specifically for energy residues, forestry biomass, and urban
Bgal), and sweet sorghum pulp (0.1 purposes. Various perennial plants have waste.
ethanol-equivalent Bgal).99 been researched as potential dedicated
102 Assuming 16 Bgal cellulosic biofuel total, 2.3
The U.S. also has vast amounts of feedstocks, including switchgrass,
Bgal from Urban Waste; 13.7 Bgal of cellulosic
forest resources that could potentially mixed prairie grasses, hybrid poplar, biofuel for ag residues, forestry biomass, and/or
miscanthus, energy cane, energy energy crops would be needed.
97 Wilhelm, W.W. et al., Corn Stover to Sustain
sorghum, and willow trees. Refer to 103 Beside the economic incentive of a farmer
Soil Organic Carbon Further Constrains Biomass
Supply, Agron. J. 99:16651667, 2007.
Section 1.1.2.2 of the RIA for more payment to keep land in CRP, local environmental
98 Assuming 92.3 gal/dry ton ethanol conversion information on the benefits and interests may also fight to maintain CRP land for
yield for corn stover in 2022. wildlife preservation. Also, we did not know what
99 Bagasse is a byproduct of sugarcane crushing 100 Smith, W. Brad et al., Forest Resources of the portion of the CRP is wetlands which likely could
and not technically an agricultural residue. Sweet United States, 2002 General Technical Report NC not support harvesting equipment.
sorghum pulp is also a byproduct of sweet sorghum 241, St. Paul, MN: U.S. Dept. of Agriculture, Forest 104 Biomass Research and Development Initiative
processing. We have included it under this heading Service, North Central Research Station, 2004. (BR&DI), Increasing Feedstock Production for
for simplification due to sugarcane and sorghum 101 USDA-Forest Service. Timber Products
Biofuels: Economic Drivers, Environmental
being an agricultural feedstock. Output Mapmaker Version 1.0. 2004. Implications, and the Role of Research, http://
www.brdisolutions.com, December 2008.
TABLE IV.B.33CELLULOSIC FEED- conversion processes is to change the in the U.S. was estimated at 2.8 billion
STOCKS ASSUMED TO MEET EISA IN properties of a variety of feedstocks to gallons per year across approximately
2022 105 more closely match those of petroleum 191 facilities.108 (However, at the time
diesel (such as its density, viscosity, and of this writing it is anticipated that
Volume storage stability) for which the engines capacity utilization will be
Feedstock (ethanol- have been designed. The definition of approximately 17% for calendar year
equivalent biodiesel given in applicable regulations
Bgal) 2009.) Biodiesel plants exist in nearly
is sufficiently broad to be inclusive of all states, with the largest density of
Agricultural Residues ................ 5.7
both fuels.106 However, the EISA plants in the Midwest and Southeast
Corn Stover ....................... 4.9 stipulates that renewable diesel that is
where agricultural feedstocks are most
Sugarcane Bagasse .......... 0.6 co-processed with petroleum diesel
plentiful.
Wheat Residue .................. 0.1 cannot be counted as biomass-based
Sweet Sorghum Pulp ........ 0.1 diesel for purposes of complying with Table IV.B.41 gives data on U.S.
Forestry Biomass ...................... 0.1 the RFS2 volume requirements.107 biodiesel production and use for recent
Urban Waste ............................. 2.3 In general, plant and animal oils are years, including net domestic use after
Dedicated Energy Crops valuable commodities with many uses accounting for imports and exports. The
(Switchgrass) ........................ 7.9 other than transportation fuel. Therefore figures suggest that the industry has
we expect the primary limiting factor in grown out of proportion with actual
Total ...................................... 16.0
the supply of both biodiesel and biodiesel demand. Reasons for this
renewable diesel to be feedstock include various state incentives to build
4. Biodiesel & Renewable Diesel availability and price. Expansion of plants, along with state and federal
Biodiesel and renewable diesel are their market volumes is dependent on incentives to blend biodiesel, which
replacements for petroleum diesel that being able to compete on price with the have given rise to an optimistic industry
are made from plant or animal fats. petroleum diesel they are displacing,
outlook over the past several years.
Biodiesel consists of fatty acid methyl which will depend largely on
Since the cost of capital is relatively low
esters (FAME) and can be used in low- continuation of current subsidies and
other incentives. for the biodiesel production process
concentration blends in most types of
diesel engines and other combustion Other biomass-based diesel fuel (typically four to six percent of the total
equipment with no modifications. The processes are at various stages of per-gallon cost), this industry developed
term renewable diesel covers fuels made development, but due to uncertainty on along a path of more small, privately-
by hydrotreating plant or animal fats in production timelines, we didnt include owned plants in comparison to the
processes similar to those used in these fuels in the biomass-based diesel ethanol industry, with median size less
refining petroleum. Renewable diesel is impact assessments. than 10 million gallons/yr.109 These
chemically analogous to blendstocks small plants, with relatively low costs
a. Historic and Projected Production
already used in petroleum diesel, thus other than feedstock, have generally
its use can be transparent and its blend i. Biodiesel been able to survive producing well
level essentially unlimited. The goal of As of November 2009, the aggregate below their nameplate capacities.
both biodiesel and renewable diesel production capacity of biodiesel plants
TABLE IV.B.41SUMMARY OF U.S. BIODIESEL PRODUCTION AND USE

[Million gallons] 110
Net
Apparent
Domestic domestic
capacity
Year production Domestic total production Net domestic biodiesel use use as
utilization
capacity percent of
(percent)
production
2004 ........................................... 245 28 .............................................. 11 27 .............................................. 96

2005 ........................................... 395 91 .............................................. 23 91 .............................................. 100
2006 ........................................... 792 250 ............................................ 32 261 ............................................ 104
2007 ........................................... 1,809 490 ............................................ 27 358 ............................................ 73
2008 ........................................... 2,610 776 ............................................ 30 413 ............................................ 53
2009 ........................................... 2,806 475 (est.) .................................. 17 296 (est.) .................................. 62
Some of this industry capacity may surfactants, lubricants, and soaps. These increasing sales was quickly surpassed
not be dedicated specifically to fuel products do not show up in renewable by construction and start-up of new
production, instead being used to make fuel sales figures. plants Since then, periods of high
oleochemical feedstocks for further During 20042006, demand for commodity prices followed by reduced
conversion into products such as biodiesel grew rapidly, but the trend of demand for transportation fuel during
105 Volumes are represented here as ethanol- 107 For more detailed discussion of the definition costs can be found in Bioresource Technology
equivalent volumes, a mix of diesel and ethanol of coprocessing and its implications for compliance 97(2006) 6718.
volumes as described in Section IV.A, above. with EISA, see Section II.B.1 of this preamble. 110 Capacity data taken from National Biodiesel
106 See Section 1515 of the Energy Policy Act of
108 Capacity data taken from National Biodiesel Board as of November 2009. Production, import,
2005. More discussion of the definitions of
Board as of November 2009. and export figures taken from EIA Monthly Energy
biodiesel and renewable diesel are given in the
preamble of the Renewable Fuel Standard
109 Assessment of plant capital cost based on Review, Table 10.4 as of December 2009.
rulemaking, Section II.B.2, as published in the USDA production cost models. A publication
Federal Register Vol. 72, No. 83, p. 23917. describing USDA modeling of biodiesel production
the economic downturn have caused account for any biodiesel exports in our producers will compete for feedstocks
additional strain on the industry beyond projections. and markets may consolidate. During
the overcapacity situation. Biodiesel To perform our impacts analyses for this period the number of operating
producers were able to find additional this rule, it was necessary to forecast the plants is expected to shrink, with
markets overseas, and a significant state of the biodiesel industry in the surviving plants utilizing feedstock
portion of the 2007 and 2008 production timeframe of the fully-phased-in RFS. In segregation and pre-treatment
was exported to Europe where fuel general, this consisted of reducing the capabilities, giving them flexibility to
prices and additional tax subsidies industry capacity to be much closer to process any mix of feedstocks available
helped offset high feedstock costs. 1.67 billion gallons per year by 2022 in their area. By the end of this period
However, the EU enacted a tariff to (based on the volume requirements to we project a mix of large regional plants
protect domestic producers early in meet the standard; see Section IV.A.2).
and some smaller plants taking
2009, after which exports dropped to a This was accomplished by considering
advantage of local market niches, with
small fraction of production.111 We as screening factors the current
understand there may be some production and sales incentives in each an overall average capacity utilization
additional export markets developing state as well as each plants primary around 85%. Table IV.B.42
within North America, but given the feedstock type and whether it was BQ summarizes this forecast. See Section
uncertainty at this time, we do not 9000 certified.112 Going forward 1.5.4 of the RIA for more details.
TABLE IV.B.42SUMMARY OF PROJECTED BIODIESEL INDUSTRY CHARACTERIZATION USED IN OUR ANALYSES 113
2008 2022
Total production capacity on-line (million gal/yr) ............................................................................................................................. 2,610 1,968

Number of operating plants ............................................................................................................................................................. 176 121
Median plant size (million gal/yr) ..................................................................................................................................................... 5 5
Total biodiesel production (million gal) ............................................................................................................................................ 776 1,670
Average plant utilization .................................................................................................................................................................. 0.30 0.85
ii. Renewable Diesel petroleum pipelines used for that the three largest sources of
transporting fuels, thus avoiding a feedstock for biodiesel will be rendered
Renewable diesel is a fuel (or
significant issue with distribution of animal fats, soy oil, and corn oil
blendstock) produced from animal fats,
biodiesel. For more on fuel distribution, extracted from dry mill ethanol
vegetable oils, and waste greases using
refer to Section IV.C. facilities. Renewable diesel plants are
chemical processes similar to those Considering that this industry is still
employed in petroleum hydrotreating. expected to use solely animal fats due
in development and that there are no to the fact that these feedstocks are
These processes remove oxygen and long-term projections of production
saturate olefins, converting the cheaper than vegetable oils and the
volume, we base our volume estimate of process can handle them without issue.
triglycerides and fatty acids into 150 MMgal/yr primarily on recent
paraffins. Renewable diesel typically Comments we have received from a
industry project announcements
has higher cetane, lower nitrogen, and large rendering company suggest there
involving proven technology. Due to the
lower aromatics than petroleum diesel will be adequate fats and greases
current status of tax incentives, we
fuel, while also meeting stringent sulfur project all of this fuel will be produced feedstocks to supply biofuels as well as
standards. at stand-alone facilities. other historical uses. Table IV.B.43
As a result of the oxygen and olefins summarizes the feedstock types, process
in the feedstock being removed, b. Feedstock Availability types, and volumes projected to be used
renewable diesel has storage, stability, Publically available industry in 2022 for biodiesel and renewable
and shipping properties equivalent to information along with agricultural diesel. More details on feedstock
petroleum diesel. This allows renewable commodity modeling we have done for sources and volumes are presented in
diesel fuel to be shipped in existing this rule (see Section VIII.A) suggests Section 1.1.3 of the RIA.
TABLE IV.B.43SUMMARY OF PROJECTED BIODIESEL AND RENEWABLE DIESEL FEEDSTOCK USE IN 2022
[MMgal]
Base Acid- Renewable

Feedstock type catalyzed pretreatment diesel
biodiesel biodiesel
Virgin vegetable oil ...................................................................................................................... 660 ........................ ........................

Corn oil from ethanol production ................................................................................................. ........................ 680 ........................
Rendered animal fats and greases ............................................................................................. ........................ 230 150
Algae oil or other advanced source ............................................................................................ 100 ........................ ........................
111 Ibid. biodiesel_laws.html. Information on feedstock and 113 2008 capacity data taken from National
112 Information on state incentives was taken from BQ9000 status was taken from Biodiesel Board fact Biodiesel Board; production figures taken from EIA
U.S. Department of Energy Web site, accessed July sheet, accessed July 30, 2008. Monthly Energy Review, Table 10.4 as of October
30, 2008, at http://www.eere.energy.gov/afdc/fuels/ 2009.
C. Biofuel Distribution coast. We expect that cellulosic distribution can be further optimized
The current motor fuel distribution distillate fuels will not have materials primarily through the expanded use of
infrastructure has been optimized to compatibility issues with the existing unit trains.116 We anticipate that the
facilitate the movement of petroleum- petroleum fuel distribution vast majority of ethanol and cellulosic
based fuels. Consequently, there are infrastructure. Thus, there may be more distillate facilities will be sized to
very efficient pipeline-terminal opportunity for cellulosic distillate fuel facilitate unit train service.117 We do not
networks that move large volumes of to be shipped by pipeline. However, the expect that biodiesel facilities will be of
petroleum-based fuels from production/ location of both ethanol and cellulosic sufficient size to justify shipment by
import centers on the Gulf Coast and the distillate production facilities relative to unit train. In the NPRM, we projected
Northeast into the heartland of the the origination points for existing that unit train receipt facilities would be
country. In contrast, most biofuel is petroleum pipelines will be a limiting located at petroleum terminals and
produced in the heartland of the factor regarding the extent to which existing rail terminals. Based on
country and needs to be shipped to the pipelines can be used. industry input regarding the logistical
coasts, flowing roughly in the opposite Our analysis of the shipment of hurdles in locating unit train receipt
direction of petroleum-based fuels. In ethanol and cellulosic distillate fuels to facilities at petroleum/existing rail
addition, while some renewable fuels petroleum terminals is based on the terminals, we expect that such facilities
such as hydrocarbons may be projections of the location of biofuel will be constructed on dedicated
transparent to the distribution system, production facilities and end use areas property with rail access that is as close
the physical/chemical nature of other contained in the NPRM. We assume that to petroleum terminals as practicable.118
renewable fuels may limit the extent to the majority of ethanol and cellulosic Shipment of biofuels by manifest rail
which they can be shipped/stored distillate fuel would be produced in the to existing rail terminals will continue
fungibly with petroleum-based fuels. Midwest, and that both fuels would be to be an important means of supplying
The vast majority of biofuels are shipped to petroleum terminals in a biofuels to distant markets where the
currently shipped by rail, barge and similar fashion (by rail, barge, and tank volume of the production facility and/
tank truck to petroleum terminals. All truck). To the extent which new biofuel or the local demand is not sufficient to
biofuels are currently blended with production facilities are more dispersed justify shipment by unit train.119
petroleum-based fuels prior to use.114 than projected in the NPRM, there may Shipments by barge will also play an
Most biofuel blends can be used in be more opportunity for both fuels to be important role in those instances where
conventional vehicles. However, E85 used closer to their point of production and demand centers have
can only be used in flex-fuel vehicles, manufacture. This potential benefit water access and in some cases as the
requires specially constructed retail would primarily apply to cellulosic final link from a unit train receipt
dispensing/storage equipment, and may ethanol and distillate production facility to a petroleum terminal. Direct
require special blendstocks at terminals. facilities given that such facilities have shipment by tank truck from production
These factors limit the ability of biofuels yet to be constructed, whereas most facilities to petroleum terminals will
to utilize the existing petroleum fuel corn-ethanol production facilities have also continue for shipment over
distribution infrastructure. Hence, the already been constructed in the distances shorter than 200 miles.
distribution of renewable fuels raises Midwest. We project that most biofuel volumes
Biodiesel is currently not typically
unique concerns and in many instances shipped by rail will be delivered to
shipped by pipeline due to concerns
requires the addition of new petroleum terminals by tank truck.120
that it may contaminate jet fuel that is
transportation, storage, blending, and We expect that this will always be the
shipped on the same pipeline and
retail equipment. case for manifest rail shipments. In the
potential incompatibility with pipeline
1. Biofuel Shipment to Petroleum gaskets and seals. Kinder Morgans NPRM, we projected that trans-loading
Terminals Plantation pipeline is currently of biofuels from rail cars to tank trucks
shipping B5 blends on segments of its would be an interim measure until
Ethanol currently is not commonly biofuel storage tanks were
shipped by pipeline because it can system that do not handle jet fuel. The
shipment of biodiesel by pipeline may constructed.121 Based on industry input,
cause stress corrosion cracking in we now expect trans-loading will be a
pipeline walls and its affinity for water become more widespread and might be
expanded to systems that handle jet long-term means of transferring manifest
and solvency can result in product rail car shipments of biofuels received at
contamination concerns. A short fuel. However, the relatively small
gasoline pipeline in Florida is currently production volumes from individual 116 Unit trains are composed of 70 to 100 rail cars
shipping batches of ethanol, and other biodiesel plants and the widespread that are dedicated to shuttle back and forth from
more extensive pipeline systems have location of such production facilities production facilities downstream receipt facilities
feasibility studies underway.115 Thus, will tend to limit the extent to which near petroleum terminals.
existing petroleum pipelines in some biodiesel may be shipped by pipeline. 117 A facility exists in Iowa to consolidate rail cars
Due to the uncertainties regarding the of ethanol from some ethanol plants that are not
areas of the country may play an large enough to support unit train service by
increasing role in the shipment of extent to which pipelines might themselves.
ethanol. Evaluations are also currently participate in the transportation of 118 Existing unit train receipt facilities have
underway regarding the feasibility of biofuels in the future, we assumed that primarily followed this model.
constructing a new dedicated ethanol biofuels will continue to be transported 119 Manifest rail shipment refers to the shipment
by rail, barge, and truck to petroleum of rail cars of biofuels in trains that also carry other
pipeline from the Midwest to the East products.
terminals as the vast majority of biofuel
120 At least one current ethanol unit train receipt

114 The prescribed blending ratio for a given volumes are today. To the extent that facility has a pipeline link to a nearby terminal. To
biofuel is based on vehicle compatibility and pipelines do play an increasing role in the extent that additional unit train receipt facilities
emissions considerations. Some biofuels may be the distribution of ethanol, this may could accomplish the final link to petroleum
found to be suitable for use without the need for improve reliability in supply and reduce terminals by pipeline, this would significantly
blending with petroleum-based fuel. reduce the need for shipment by tank truck.
115 Shipment of ethanol in pipelines that carry distribution costs. Apart from increased 121 Trans-loading refers to the direct transfer of
distillate fuels as well as gasoline presents shipment by pipeline, biofuel the contents of a rail car to a tank truck without the
additional challenges. distribution, and in particular ethanol intervening delivery into a storage tank.
existing rail terminals to tank trucks for ability of some terminals to install the blendstock such as butane would need
delivery to petroleum terminals. We needed storage capacity due to space to be supplied to most petroleum
also anticipate that trans-loading will be constraints and difficulties in securing terminals to produce E85 that meets
used at some unit train receipt facilities, permits.125 Overall demand for fuel minimum volatility specifications. In
although we expect that most of these used in motor vehicles is expected to such a case, butane would need to be
facilities will install biofuel storage remain relatively constant through 2022. transported by tank truck from
tanks from which tank trucks will be Thus, much of the increased demand for petroleum refineries to terminals and
filled for delivery to petroleum biofuel storage could be accommodated storage and blending equipment would
terminals. Imported biofuels will by modifying storage tanks previously be needed at petroleum terminals.127
typically be received and be further used for the gasoline and petroleum- Instead of lowering the minimum
distributed by tank truck from based diesel fuels that would displaced ethanol concentration of E85, some
petroleum terminals that already have by biofuels. The areas served by existing stakeholders are discussing establishing
receipt facilities for waterborne fuel terminals also often overlap. In such a new high-ethanol blend for use in flex-
shipments. cases, one terminal might be space fuel vehicles. Such a fuel would have a
We anticipate that the deployment of constrained while another serving the minimum ethanol concentration that
the necessary distribution infrastructure same area may be able to install the would be sufficient to allow minimum
to accommodate the shipment of additional capacity to meet the increase volatility specifications to be satisfied
biofuels to petroleum terminals is in demand. In cases where it is while using finished gasoline that is
achievable.122 We believe that impossible for existing terminals to already available at petroleum
construction of the requisite rail cars, expand their storage capacity due to a terminals.128 E85 would continue to be
barges, tank trucks, tank truck and rail/ lack of adjacent available land or marketed in addition to this new fuel for
barge/truck receipt facilities is within difficulties in securing the necessary use in flex-fuel vehicles when E85
the reach of corresponding construction permits, new satellite storage or new minimum volatility considerations
firms.123 Although shipment of biofuels separate terminal facilities may be could be satisfied.
by rail represents a major fraction of all needed for additional storage of We believe that industry will resolve
biofuel ton-miles, it is projected to biofuels. However, we believe that there the concerns over the ability to meet the
account for approximately 0.4% of all would be few such situations. minimum volatility needed for high-
rail freight by 2022. Many In the NPRM, we stated the current ethanol blends used in flex-fuel vehicles
improvements to the freight rail system EPA policy that the RFG and anti- in a manner that will not necessitate the
will be required in the next 15 years to dumping regulations currently require use of high-vapor pressure blendstocks
keep pace with the large increase in the certified gasoline to be blended with in their manufacture. Nevertheless,
overall freight demand. Given the broad denatured ethanol to produce E85. We petroleum terminals may find it
importance to the U.S. economy of also stated that if terminal operators add advantageous to blend butane into E85
meeting the anticipated increase in blendstocks to finished gasoline for use because of the low cost of butane
freight rail demand, and the substantial in manufacturing E85, the terminal relative to gasoline provided that the
resources that seem likely to be focused operator would need to register as a cost benefit outweighs the associated
on this cause, we believe that overall refiner with EPA and meet all butane distribution costs.129
freight rail capacity would not be a applicable standards for refiners.
limiting factor to the successful Commenters questioned these 4. Need for Additional E85 Retail
implementation of the biofuel statements. As we are not taking any Facilities
requirements under EISA. action in this final rule with respect to The number of additional E85 retail
policies surrounding E85, we will facilities needed to consume the volume
2. Petroleum Terminal Accommodations consider these comments outside the of ethanol used under EISA varies
Terminals will need to install context of this rule. substantially depending on the control
additional storage capacity to 3. Potential Need for Special case. Under our primary mid-ethanol
accommodate the volume of biofuels Blendstocks at Petroleum Terminals for scenario, we estimate that by 2022 an
that we anticipate will be used in E85 additional 19,765 E85 retail facilities
response to the RFS2 standards. would be needed relative to the AEO
Petroleum terminals will also need to ASTM International is considering a
reference case to enable the
install truck receipt facilities for proposal to lower the minimum ethanol
consumption of the ethanol that we
biofuels and equipment to blend concentration in E85 to facilitate
project would be used in E85.130 Under
biofuels into petroleum-based fuels. meeting ASTM minimum volatility
Upgrades to barge receipt facilities to specifications in cold climates and 127 See Section 1.6 of the RIA for a discussion of
handle deliveries of biofuels may also when only low vapor pressure gasoline the potential distribution of butane to petroleum
be needed at petroleum terminals with is available at terminals.126 Commenters terminals for blending with E85 and Section 4.2 for
water access. Biodiesel storage and have stated that the current proposal to the potential costs.
128 Such a new fuel might have a lower ethanol
blending facilities will need to be lower the minimum ethanol
concentration of 60% and a maximum ethanol
concentration to 68 volume percent may
insulated/heated in cold climates to concentration of 85%.
not be sufficient for this purpose. ASTM 129 EPA may consider reevaluating its policies
prevent biodiesel from gelling.124
International may consider an regarding the blendstocks used in the manufacture
Questions have been raised about the
additional proposal to further decrease of E85 to facilitate this practice.
130 See Section 1.6 of the RIA for a discussion of
the minimum ethanol concentration.
122 See Section 1.6 of the RIA for additional

Absent such an adjustment, a high- the projected number of E85 refueling facilities that
discussion of the challenges in distributing biofuels would be needed. There would need to be a total
from the production/import facility to the end user. vapor pressure petroleum-based of 24,265 E85 retail facilities under the primary
123 Vessels that transport biodiesel will need to be
scenario, 4,500 of which are projected to have been
heated/insulated in cold climates to prevent gelling. 125 The Independent Fuel Terminal Operators placed in service absent the RFS2 standards under
124 Some terminals are avoiding the need for Association represents terminals in the Northeast. the AEO reference case. Our analysis assumes the
heated/insulated biodiesel facilities by storing high 126 Minimum volatility specifications were installation of new dispensers and underground
biodiesel blends (e.g. B50) for blending with established by ASTM to address safety and vehicle storage tank (UST) systems for E85. EPAs Office of
petroleum-based diesel fuel. driveability considerations. Underground Storage Tanks requires that UST
the high-ethanol scenario, we estimate facilities if they can be assured of 2009, EIA projects that gasoline demand
that an additional 23,809 E85 facilities sufficient E85 throughput to recover will peak around 2013 and then start to
would be needed and that 4,500 E85 their capital costs. The current taper off due to vehicle fuel economy
facilities that would otherwise be in projections regarding the future cost of improvements. Based on the primary
place would need to be upgraded to gasoline relative to ethanol indicate that ethanol growth scenario were
include more E85 dispensers by 2022. it may be possible to price E85 in a forecasting under todays RFS2 program,
Whereas under the low-ethanol volume competitive fashion to E10. Thus, the nation is expected to hit the 1415
scenario, we project that 11,677 demand for E85 may be sufficient to billion gallon blend wall by around
additional E85 facilities would be encourage retailers to install the needed 2014 (refer ahead to Figure IV.D.21),
needed by 2022. E85 refueling facilities. although it could be sooner if gasoline
On average, approximately 1,520 demand is lower than expected. It could
additional E85 facilities will be needed D. Ethanol Consumption
also be lower if projected volumes of
each year from 2010 through 2022 under 1. Historic/Current Ethanol non-ethanol renewables do not
our primary scenario. Under the high Consumption materialize and ethanol usage is higher
and low ethanol scenarios, an additional Ethanol and ethanol-gasoline blends than expected.
1,820 and 900 E85 retail facilities per have a long history as automotive fuels. Over the years there have been several
year respectively would be needed. In fact, the well-known Model-T was policy attempts to increase FFV sales
Under the high ethanol case and to a capable of running on both ethanol and including Corporate Average Fuel
lesser extent under the primary case, gasoline.132 However, inexpensive Economy (CAFE) credits and
this represents an aggressive timeline crude oil prices kept ethanol from government fleet alternative-fuel vehicle
for the addition of new E85 facilities making a significant presence in the requirements. As a result, there are an
given that there are approximately 2,000 transportation sector until the end of the estimated 8 million FFVs on the road
E85 retail facilities in service today. 20th century. Over the past decade, today, up from just over 7 million in
Nevertheless, we believe the addition of ethanol use has grown rapidly due to 2008. While this is not insignificant in
these new E85 facilities may be possible oxygenated fuel requirements, MTBE terms of growth, FFVs continue to make
for the industries that manufacture and bans, tax incentives, state mandates, the up less than 4 percent of the total
install E85 retail equipment. first federal renewable fuels standard gasoline vehicle fleet. In addition, E85
Underwriters Laboratories requires that (RFS1), and rising crude oil prices. is only currently offered at about 1
E85 refueling dispenser systems must be Although the cost of crude has come percent of gas stations nationwide.
certified as complete units.131 To date, down since reaching record levels in Ethanol consumption is currently
no complete E85 dispenser systems 2008, uncertainty surrounding pricing limited by the number of FFVs on the
have been certified by UL. We and the environmental implications of road and the number of E85 outlets or,
understand that all the fuel dispenser fossil fuels continue to drive ethanol more specifically, the number of FFVs
components with the exception of the use. with access to E85. Still many FFV
hoses that connect to the refueling A record 9.5 billion gallons of ethanol owners with access to E85 are not
nozzle have successfully passed the were blended into U.S. gasoline in 2008 choosing it because it is currently priced
necessary testing. There does not appear and EIA is forecasting additional growth almost 40 cents per gallon higher than
to be a technical difficulty in finding in the years to come.133 According to conventional gasoline on an energy
hoses that can pass the required testing. their recently released Short-Term equivalent basis.136 According to EIA,
Therefore, we anticipate this situation Energy Outlook (STEO), EIA is only 12 million gallons of E85 were
will be resolved once the demand for forecasting 0.7 million barrels of daily consumed in 2008.137
new E85 facilities is demonstrated. ethanol use in 2009, which equates to To meet todays RFS2 requirements
Hence, we believe that the current lack 10.7 billion gallons. The October 2009 we are going to need to see growth in
of a UL certification for complete E85 STEO projects that total ethanol usage FFV and E85 infrastructure as well as
dispenser systems will not impede the (domestic production plus imports) will changes in retail pricing and consumer
installation of the additional E85 reach 12.1 billion gallons by 2010.134 behavior. However, the amount of
facilities that we projected will be The National Petrochemical and change needed is proportional to the
needed. Refiners Association (NPRA) estimates
Petroleum retailers expressed amount of ethanol observed under the
that ethanol is currently blended into RFS2 program. As explained in Section
concerns about their ability to bear the about 75 percent of all gasoline sold in
cost installing the needed E85 refueling IV.A, EPA expects total ethanol demand
the United States.135 The vast majority could be anywhere from 17.5 to 33.2
equipment given that most retailers are is blended as E10 or 10 volume percent
small businesses and have limited billion gallons in 2022, depending on
ethanol, although a small amount is the amount of non-ethanol cellulosic
capital resources. They also expressed blended as E85 for use in flexible fuel
concern regarding their ability to biofuels that are realized. The low-
vehicles (FFVs). ethanol case would require only
discount the price of E85 relative to E10 Complete saturation of the gasoline
sufficiently to persuade flexible fuel moderate changes in FFV/E85
market with E10 is referred to as the infrastructure and refueling whereas the
vehicle owners to choose E85 given the ethanol blend wall. The height of the
lower energy density of ethanol. Todays high-ethanol case would require very
blend wall in any given year is directly dramatic changes and likely a mandate.
rule does not contain a requirement for related to gasoline demand. In AEO
retailers to carry E85. We understand For the final rule, we have chosen to
that retailers will only install E85 focus our impact analyses on the
132 The Model T was also capable of running on
kerosene. primary mid-ethanol case of 22.2 billion

systems must be compatible with the fuel stored. 133 EIA, Monthly Energy Review, September 2009 gallons. A discussion of how this
Authorities who Have Jurisdiction (such as local (Table 10.2b).
fire marshals) typically require that fuel dispensers 134 Letter from Richard Newell, EIA 136 Based on average E85 and regular unleaded
be listed by an organization such as Underwriters Administrator to Lisa Jackson, EPA Administrator gasoline prices reported at http://
Laboratories. dated October 29, 2009 (Table 1). www.fuelgaugereport.com/on November 23, 2009.
131 See http://ulstandardsinfonet.ul.com/ 135 Based on comments provided by NPRA (EPA 137 EIA, Annual Energy Outlook 2009ARRA
outscope/0087A.html. HQOAR200501612124.1). Update (Table 2).
volume of ethanol could be consumed with respect to commercialization of be about three times higher than RFS1
in 2022 with expanded FFV/E85 BTL and non-ethanol cellulosic levels, more than twice as much as
infrastructure is presented below. As biofuels. For more on cellulosic diesel todays levels, and 9 billion gallons
expected, the infrastructure changes technologies, distribution impacts, and higher than the ethanol predicted to
required under this FRM scenario are production costs, refer to Sections 1.4, occur in 2022 absent RFS2 (according to
less extreme than those highlighted in 1.6 and 4.1 of the RIA. AEO 2007). To get to 22.2 billion gallons
the proposal based on a predominant of ethanol use according to the potential
2. Increased Ethanol Use Under RFS2
ethanol world (34.2 billion gallons of ramp-up described in Section 1.2 of the
ethanol). However, there are additional Under the primary ethanol growth RIA, the nation is predicted to hit the
technological, logistical and financial scenario considered as part of todays blend wall in 2014 as shown below in
barriers that will need to be overcome rule, ethanol consumption will need to Figure IV.D.21.
As shown above, we are anticipating assumed that no ethanol consumption purposes, we relied on the gasoline
almost 14 billion gallons of non-ethanol would come from the mid-level ethanol energy projections provided by EIA in
advanced biofuels under todays RFS2 blends (e.g., E15) under our primary the AEO 2009 final release.138 AEO
program. But overall, ethanol is control case since they are not currently 2009 takes the fuel economy
expected to continue to be the nations approved for use in non-FFVs. However, improvements set by EISA into
primary biofuel with over 22 billion as a sensitivity analysis, we have consideration and also assumes a slight
gallons in 2022. To get beyond the blend examined the impacts that E15 would dieselization of the light-duty vehicle
wall and consume more than 1415 have on ethanol consumption (refer to fleet.139 It also takes the recessions
billion gallons of ethanol, we are going Section IV.D.3). impacts on driving patterns into
to need to see increases in the number consideration. The result is a 25%
FFVs on the road, the number of E85 a. Projected Gasoline Energy Demand
reduction in the projected 2022 gasoline
retailers, and the FFV E85 refueling The maximum amount of ethanol our
frequency. country is capable of consuming in any 138 EIA, Annual Energy Outlook 2009ARRA
It is possible that conventional given year is a function of the total Update (Table 2).
139 The gasoline energy demand forecast provided

gasoline (E0) could continue to co-exist gasoline energy demanded by the in AEO 2009ARRA Update is reasonably
with E10 and E85 for quite some time. transportation sector. Our nations consistent with the recently Proposed Rulemaking
However, for analysis purposes, we gasoline energy demand is dependent To Establish Light-Duty Vehicle Greenhouse Gas
have assumed that E10 would replace on the number of gasoline-powered Emission Standards and Corporate Average Fuel
Economy Standards (referred to hereafter as the
E0 as expeditiously as possible and that vehicles on the road, their average fuel Light-Duty Vehicle GHG Rule. For more
all subsequent ethanol growth would economy, vehicle miles traveled (VMT), information on the Light-Duty Vehicle GHG Rule,
ER26MR10.422</GPH>
come from E85. Furthermore, we and driving patterns. For analysis refer to 74 FR 49454 (September 28, 2009).
energy demand from AEO 2007 (a pre- their voluntary FFV commitment.144 nationwide carrying the fuel.148 As a
EISA world) to AEO 2009.140 EIA Under our primary control case, we result, most FFV owners clearly do not
essentially has total gasoline energy assumed that non-domestic FFVs sales have reasonable access to E85. For our
demand (petroleum-based gasoline plus would track around 2%, consistent with FFV/E85 analysis, we have defined
ethanol) flattening out, and even slightly todays production/plans.145 Finally, for reasonable access as one-in-four
decreasing, as we move into the future. our high-ethanol control case, we pumps offering E85 in a given area.149
b. Projected Growth in Flexible Fuel assumed a theoretical 80% FFV Accordingly, just over 5% of the nation
Vehicles mandate based on the Open Fuel currently has reasonable access to E85,
Standard Act of 2009 that was up from 4% in 2008 (based on a mid-
Over one million FFVs were sold in reintroduced in Congress on March 12, year NEVC pump estimate).150
both 2008 and 2009 according to EPA 2009.146 Given todays reduced vehicle
certification data. Despite the recession There are a number of states
sales and gasoline demand, we believe promoting E85 usage by offering FFV/
and current state of the auto industry, a mandate would be the only viable
automakers are incorporating more and E85 awareness programs and/or retail
means for consuming 32.2 billion pump incentives. A growing number of
more FFVs into their light-duty gallons of ethanol in 2022.
production plans. While the FFV system states are also offering infrastructure
(i.e., fuel tank, sensor, delivery system, Under our primary mid-ethanol grants to help expand E85 availability.
etc.) used to be an option on some control case, total FFV sales are Currently, 10 Midwest states have
vehicles, most automakers are moving estimated at just over 4 million vehicles adopted a progressive Energy Security
in the direction of converting entire per year in 2017 and beyond. This is and Climate Stewardship Platform.151
product lines over to E85-capable less aggressive than the assumptions The platform includes a Regional
systems. Still, the number of FFVs that made in the NPRM. At that time, we Biofuels Promotion Plan with a goal of
will be manufactured and purchased in were expecting more cellulosic ethanol making E85 available at one third of all
future years is uncertain. which could justify higher FFV stations by 2025. In addition, the
To measure the impacts of increased production assumptions. We assumed American Recovery and Reinvestment
volumes of renewable fuel, we that not only would the Detroit 3 fulfill Act of 2009 (ARRA or Recovery Act)
considered three different FFV their 50% by 2012 FFV production recently increased the existing federal
production scenarios that might commitment, non-domestic automakers income tax credit from $30,000 or 30%
correspond to the three biofuel control might follow suit and produce 25% FFV of the total cost of improvements to
cases analyzed for the final rule. For all in 2017 and beyond. We also assumed $100,000 or 50% of the total cost of
three cases, we assumed that total light- that annual light-duty vehicle sales needed alternative fuel equipment and
duty vehicle sales would follow AEO would continue around the historical 16 dispensing improvements.152
2009 trends. The latest EIA report million vehicle mark resulting in 6 Given the growing number of
suggests lower than average sales in million FFVs in 2017 and beyond. subsidies, it is clear that E85
20082013 (less than 16 million Based on our revised vehicle/FFV infrastructure will continue to expand
vehicles per year) before rebounding production assumptions coupled with in the future. However, like FFVs, we
and growing to over 17 million vehicles vehicle survival rates, VMT, and fuel expect that E85 station growth will be
by 2019.141 These vehicle projections economy estimates applied in the somewhat proportional to the amount of
are consistent with EPAs recently recently proposed Light-Duty Vehicle ethanol realized under the RFS2
proposed Light-Duty Vehicle GHG GHG Rule, the maximum percentage of program. As such, we analyzed three
Rule.142 fuel (gasoline/ethanol mix) that could different E85 growth scenarios for the
Although we assumed total vehicle feasibly be consumed by FFVs in 2022 final rule that could correspond to the
and car/truck sales would be the same would be about 20% (down from 30% three different RFS2 control cases. As an
in all three cases, we assumed varying in the NPRM). For more information on upper bound for our high-ethanol
levels of FFV production. For our low- our FFV production assumptions and control case, we maintained the 70%
ethanol control case, we assumed steady fuel fraction calculations, refer to access assumption we applied for the
business-as-usual FFV growth according Section 1.7.2 of the RIA. NPRM. This is roughly equivalent to all
to AEO 2009 predictions.143 For our urban areas in the United States offering
primary mid-ethanol control case, we c. Projected Growth in E85 Access reasonable (one-in-four-station) access
assumed increased FFV sales under the According to the National Ethanol
presumption that GM, Ford and Vehicle Coalition (NEVC), there are 148 Based on National Petroleum News gasoline
Chrysler (referred to hereafter as the currently 2,100 gas stations offering E85 station estimate of 161,768 in 2008.
Detroit 3) would follow through with in 44 states plus the District of
149 For a more detailed discussion on how we
their commitment to produce 50% FFVs derived our one-in-four reasonable access
Columbia.147 While this represents assumption, refer to Section 1.6 of the RIA. For the
by 2012. Despite the current state of the
significant industry growth, it still only distribution cost implications as well as the cost
economy and the hardships facing the impacts of assuming reasonable access is greater
translates to 1.3% of U.S. retail stations
auto industry (GM and Chrysler filed for than one-in-four pumps, refer to Section 4.2 of the
bankruptcy earlier this year), the Detroit RIA.
144 Ethanol Producer Magazine, Automakers 150 Computed as percent of stations with E85
3 appear to still be moving forward with Maintain FFV Targets in Bailout Plans. February (2,101/161,768 as of November 2009 or 1,733/
2009. This is consistent with information provided 161,768 as of August 2008) divided by 25% (one-
140 EIA, Annual Energy Outlooks 2007 & 2009 in GM and Chryslers restructuring plans submitted in-four stations).
ARRA Update (Table 2). to the U.S. Department of Treasury on February 17, 151 The following states have adopted the plan:
141 EIA, Annual Energy Outlook 2009ARRA 2009. Illinois, Indiana, Iowa, Kansas, Michigan,
Update (Table 47). 145 Based on 2008 FFV certification data and 2009
Minnesota, Missouri, Ohio, South Dakota and
142 Rulemaking to Establish Light-Duty Vehicle projections based on the National Ethanol Vehicle Wisconsin. For more information, visit: http://
GHG Emission Standards and Corporate Average Coalition, 2009 FFV Purchasing Guide. www.midwesterngovernors.org/resolutions/
Fuel Economy Standards, 74 FR 49454 (September 146 A copy of H.R. 1476 can be found at: Platform.pdf.
28, 2009). http://www.opencongress.org/bill/111-h1476/text. 152 http://frwebgate.access.gpo.gov/cgi-bin/
143 EIA, Annual Energy Outlook 2009ARRA 147 NEVC Web site, accessed on November 23, getdoc.cgi?dbname=111_cong_bills&docid=f:
Update (Table 47). 2009. h1enr.pdf.
to E85.153 For our other control cases we may never think to refuel on E85. In availability. Overall, we estimate that
assumed access to E85 would be lower addition, FFV owners with reasonable E85 would need to be priced about 25%
with the logic that retail stations (the access to E85 and knowledge of their lower than E10 at retail in 2022 in order
majority of which are independently vehicles E85 capabilities may still not for it to make sense to consumers.
owned and operated and net around choose to refuel on E85. They may feel However, ultimately it comes down to
$30,000 per year) would not invest in inconvenienced by the increased what refiners are willing to pay for
more E85 infrastructure than what was refueling requirements. Based on its ethanol blended as E85. The more
necessary to meet the RFS2 lower energy density, FFV owners will ethanol you try to blend as E85, the
requirements. For our primary mid- need to stop to refuel 21% more often more devalued ethanol becomes as a
ethanol control case we assumed when filling up on E85 over E10 (and gasoline blendstock. Changes to state
reasonable access would grow from 4% likewise, 24% more often when and Federal excise tax structures could
in 2008 to 60% in 2022 and for our low- refueling on E85 over conventional help promote ethanol blending as E85.
ethanol control case we assumed that gasoline).157 In addition, some FFV Similarly, high crude prices make E85
access would only grow to 40% by owners may be deterred from refueling look more attractive. According to EIAs
2022. As discussed in Section IV.C, we on E85 out of fear of reduced vehicle AEO 2009, crude oil prices are expected
believe these E85 growth scenarios are performance or just plain unfamiliarity to increase from about $80 per barrel
possible based on our assessment of with the new motor vehicle fuel. (todays price) to $116/barrel by
distribution infrastructure capabilities. However, as we move into the future, 2022.159 Based on our retail cost
we believe the biggest determinant will calculations, ethanol would have to be
d. Required Increase in E85 Refueling
be pricewhether E85 is priced priced around $2/gallon or less in order
Rates
competitively with gasoline based on its to be attractive to refiners for E85
As mentioned earlier, there were just reduced energy density (discussed in blending in 2022. According to the DTN
over 7 million FFVs on the road in 2008. more detail in the subsection that Ethanol Center, the current rack price
If all FFVs refueled on E85 100% of the follows). for ethanol is around $2.20/gallon.160
time, this would translate to about 8.3 To comply with the RFS2 program However, as explained in Section 4.4 of
billion gallons of E85 use.154 However, and consume 22.2 billion gallons of the RIA, we project that the average
E85 usage was only around 12 million ethanol by 2022 (under our primary ethanol delivered price will come down
gallons in 2008.155 This means that, on ethanol control case), not only would in the future under the RFS2 program.
average, FFV owners were only tapping we need more FFVs and more E85 Therefore, while gasoline refiners and
into about 0.15% of their vehicles E85/ retailers, we would need to see a markets will always have a greater profit
ethanol usage potential last year. significant increase in the current FFV margin selling ethanol in low-level
Assuming that only 4% of the nation E85 refueling frequency. Based on the blends to consumers based on volume,
had reasonable one-in-four access to E85 FFV and retail assumptions described
they should be able to maintain a profit
in 2008 (as discussed above), this above in subsections (b) and (c), our
selling it as E85 based on energy content
equates to an estimated 4% E85 analysis suggests that FFV owners with
in the future.
refueling frequency for those FFVs that reasonable access to E85 would need to
fill up on it as often as 58% of the time, Once the nation gets past the blend
had reasonable access to the fuel.
There are several reasons behind a significant increase from todays wall, more ethanol will need to be
todays low E85 refueling frequency. For estimated 4% refueling frequency. In blended as E85 and less as E10. FFV
starters, many FFV owners may not order for this to be possible, there will owners who were formerly refueling on
know they are driving a vehicle that is need to be an improvement in the gasoline will need to start filling up on
capable of handling E85. As mentioned current E85/gasoline price relationship. E85. Under our primary control case, we
earlier, more and more automakers are expect that 12.9 billion gallons of
e. Market Pricing of E85 Versus Gasoline ethanol would be blended as E10 and
starting to produce FFVs by engine/
product line, e.g., all 2008 Chevy According to an online fuel price 9.3 billion gallons would be blended as
Impalas are FFVs.156 Consequently, survey, E85 is currently priced almost E85 to reach the 22.2 billion gallons in
consumers (especially brand loyal 40 cents per gallon or about 15% lower 2022. For more on our ethanol
consumers) may inadvertently buy a than regular grade conventional consumption feasibility and retail cost
flexible fuel vehicle without making a gasoline.158 But this is still about 30 calculations, including discussion of the
conscious decision to do so. And cents per gallon higher than other two control cases, refer to Section
without effective consumer awareness conventional gasoline on an energy- 1.7 of the RIA.
programs in place, these FFV owners equivalent basis. To increase our 3. Consideration of >10% Ethanol
nations E85 refueling frequency to the Blends
153 For this analysis, weve defined urban as the levels described above, E85 needs to be
top 150 metropolitan statistical areas according to priced competitively with (if not lower On March 6, 2009, Growth Energy and
the U.S. census and/or counties with the highest than) conventional gasoline based on its 54 ethanol manufacturers submitted an
VMT projections according the EPA MOVES model, application for a waiver of the
all RFG areas, winter oxy-fuel areas, low-RVP areas, reduced energy content, increased time
and other relatively populated cities in the spent at the pump, and limited prohibition of the introduction into
Midwest. commerce of certain fuels and fuel
154 Based on average vehicle miles traveled (VMT) 157 Based on our assumption that denatured additives set forth in section 211(f) of
and in-use fuel economy (MPG) for FFVs in the fleet ethanol has an average lower heating value of the Act. This application seeks a waiver
in 2008. For more information on FFV E85 fuel 77,012 BTU/gal and conventional gasoline (E0) has for ethanol-gasoline blends of up to 15
consumption calculations, refer to Section 1.7.4 of average lower heating value of 115,000 BTU/gal.
the RIA. For analysis purposes, E10 was assumed to contain
percent ethanol by volume.161 On April
155 EIA, Annual Energy Outlook 2009ARRA 10 vol% ethanol and 90 vol% gasoline. Based on
159 EIA, Annual Energy Outlook 2009ARRA
Update (Table 17). EIAs AEO 2009 assumption, E85 was assumed to
156 NEVC, 2008 Purchasing Guide for Flexible contain 74 vol% ethanol and 26 vol% gasoline on Update (Table 12).
Fuel Vehicles. Refers to all mass produced 3.5 and average. 160 http://www.dtnethanolcenter.com/
3.9L Impalas. However, it is our understanding that 158 Based on average E85 and regular unleaded index.cfm?show=10&mid=32.
consumers may still place special orders for non- gasoline prices reported at http:// 161 http://www.growthenergy.org/2009/e15/
FFVs. www.fuelgaugereport.com/ on November 23, 2009. Waiver%20Cover%20Letter.pdf. Additional
21, 2009, EPA issued a Federal Register application is still under review, EPA purposes, we assumed E10 would be
notice announcing receipt of the Growth believes it is appropriate to address marketed as premium-grade gasoline
Energy waiver application and soliciting aspects of the mid-level blend waiver in (the universal fuel), E15 would be
comment on all aspects of it.162 On May its decision announcement on the marketed as regular-grade gasoline (to
20, 2009, EPA issued an additional waiver application as opposed to maximize ethanol throughput) and, like
Federal Register notice extending the dealing with the comments and today, midgrade would be blended from
public comment period by an additional evaluation of the potential waiver in the the two fuels to make a 12.5 vol% blend
60 days.163 The comment period ended preamble of todays final rule. (E12.5). In addition, we assumed that
on July 20, 2009, and EPA is now Although EPA has yet to make a
some E15-capable vehicles would
evaluating the waiver application and waiver decision, since its approval
continue to choose E10 or E12.5 based
considering the comments which were could have a significant impact on our
analyses that are based on the use of on our knowledge of todays premium
submitted.
In a letter dated November 30, 2009, E85, as a sensitivity analysis, we have and midgrade sales.165
EPA notified the applicant that, because evaluated the impacts that E15 could In the event of a partial waiver, it is
crucial vehicle durability information have on ethanol consumption unclear how long it would take for E15
being developed by the Department of feasibility. More specifically, we have to be fully deployed or whether it would
Energy would not be available until assessed the impacts of a partial waiver ever be available nationwide. For
mid-2010, EPA would be delaying its for newer technology vehicles analysis purposes, we assumed that E15
decision on the application until a consistent with the direction of EPAs would be fully phased in and available
sufficient amount of this information November 30, 2009 letter. We assumed at all retail stations nationwide by the
could be included in its analysis so that that E10 would need to continue to co- time the nation hit the blend wall, or
the most scientifically supportable exist for legacy and non-road equipment around 2014 for our primary control
decision could be made.164 As the based on consumer demand regardless case shown in Figure IV.D.31.
current Growth Energy waiver of any waiver decision. For analysis
As modeled, a partial waiver for E15 IV.D.31), E15 could postpone the blend relief while the county ramps up non-
could increase the ethanol consumption wall by up to five years, or to 2019. ethanol cellulosic biofuel production
potential from conventional vehicles to Although E15 would fall short of and expands E85/FFV infrastructure.
about 19 billion gallons. Under our meeting the RFS2 requirements under Under our high-ethanol control case, a
primary control case (shown in Figure this scenario, it could provide interim partial waiver for E15 could eliminate
supporting documents are available on the Growth 163 Refer to 74 FR 23704 (May 20, 2009). 165 According to EIAs 2008 Petroleum Annual
Energy Web site. 164 http://www.epa.gov/OMS/regs/fuels/additive/ Outlook (Table 45), midgrade and premium
ER26MR10.423</GPH>
162 Refer to 74 FR 18228 (April 21, 2009). lettertogrowthenergy11-30-09.pdf. comprise 13.5% of total gasoline sales.
the need for FFV or E85 infrastructure industry, and non-profit organizations, analysis. The reviews were conducted
mandates. Under our low-ethanol to gather expert technical input. Our following the Office of Management and
control case, E15 could eliminate the work was also informed heavily by Budgets peer review guidance that
need for additional FFV/E85 consultation with other federal agencies. ensures consistent, independent
infrastructure all together. For more For example, we have relied on the government-wide implementation of
information, refer to Section 1.7.6 of the expert advice of USDA and DOE, as well peer review, and according to EPAs
RIA. as incorporating the most recent inputs longstanding and rigorous peer review
and models provided by these Agencies. policies. In accordance with these
V. Lifecycle Analysis of Greenhouse Dialogue with the State of California guidelines, EPA used independent,
Gas Emissions and the European Union on their third-party contractors to select highly
A. Introduction parallel, on-going efforts in GHG qualified peer reviewers. The reviewers
lifecycle analysis also helped inform selected are leading experts in their
As recognized earlier in this
EPAs methodology. As described respective fields, including lifecycle
preamble, a significant aspect of the
below, formal technical exchanges and assessment, economic modeling, remote
RFS2 program is the requirement that a
an independent, formal peer review of sensing imagery, biofuel technologies,
fuel meet a specific lifecycle greenhouse
the methodology were also significant soil science, agricultural economics, and
gas (GHG) emissions threshold for
components of the Agencys outreach. A climate science. They were asked to
compliance for each of four types of
key result of our outreach effort has evaluate four key components of EPAs
renewable fuels. This section describes
been awareness of new studies and data methodology: (1) Land use modeling,
the methodology used by EPA to that have been incorporated into our specifically the use of satellite data and
determine the lifecycle GHG emissions final rule analysis. EPAs proposed land conversion GHG
of biofuels, and the petroleum-based Technology Exchanges: Immediately emission factors; (2) methods to account
transportation fuels that they replace. following publication of the proposed for the variable timing of GHG
EPA recognizes that this aspect of the rule, EPA held a two-day public emissions; (3) GHG emissions from
RFS2 regulatory program has received workshop focused specifically on foreign crop production (both the
particular attention and comment lifecycle analysis to assure full modeling and data used); and (4) how
throughout the public comment period. understanding of the analyses the models EPA relied upon are used
Therefore, this section also will describe conducted, the issues addressed, and together to provide overall lifecycle
the enhancements made to our approach the options discussed. The workshop estimates.
in conducting the lifecycle analysis for featured EPA presentations on each The advice and information received
the final rule. This section will highlight component of the methodology as well through this peer review are reflected
areas where we have incorporated new as presentations and discussions by throughout this section. EPAs use of
scientific data that has become available stakeholders from the renewable fuel higher resolution satellite data is one
since the proposal as well as the community, federal agencies, example of a direct outcome of the peer
approach the Agency has taken to universities, and environmental groups. review, as is the Agencys decision to
recognize and quantify, where The Agency also took advantage of retain its reliance upon this data. The
appropriate, the uncertainty inherent in opportunities to meet in the field with reviewers also provided
this analysis. key, affected stakeholders. For example, recommendations that have helped to
1. Open and Science-Based Approach to the Agency was able to twice participate inform the larger methodological
EPAs Analysis in meetings and tours in Iowa hosted by decisions presented in this final rule.
the local renewable fuel and agricultural For example, the reviewers in general
Throughout the development of EPAs community. As described in this supported the importance of assessing
lifecycle analysis, the Agency has section, one of the many outcomes of indirect land use change and
employed a collaborative, transparent, these meetings was an improved determined that EPA used the best
and science-based approach. EPAs understanding of agricultural and available tools and approaches for this
lifecycle methodology, as developed for biofuel production practices. work. However, the review also
the RFS2 proposal, required breaking As indicated in the proposal, our recognized that no existing model
new scientific ground and using lifecycle results were particularly comprehensively simulates the direct
analytical tools in new ways. The work impacted by assumptions about land and indirect effects of biofuel
was generally recognized as state of the use patterns and emissions in Brazil. production both domestically and
art and an advance on lifecycle During the public comment process we internationally, and therefore model
thinking, specifically regarding the were able to update and refine these development is still evolving. The
indirect impacts of biofuels. assumptions, including the uncertainty associated with estimating
However, the complexity and incorporation of new, improved sources indirect impacts and the difficulty in
uncertainty inherent in this work made of data based on Brazil-specific data and developing precise results also were
it extremely important that we seek the programs. In addition, the Agency reflected in the comments. In the long
advice and input of a broad group of received more recent trends on Brazilian term, this peer review will help focus
stakeholders. In order to maximize crop productivity, areas of crop EPAs ongoing lifecycle analysis work as
stakeholder outreach opportunities, the expansion, and regional differences in well as our future interactions with the
comment period for the proposed rule costs of crop production and land National Academy of Science and other
was extended to 120 days. In addition availability. Lastly, we received new experts.
to this formal comment period, EPA information on efforts to curb Altogether, the many and extensive
made multiple efforts to solicit public deforestation allowing the Agency to public comments we received to the
and expert feedback on our approach. better predict this impact through 2022. rule docket, the numerous meetings,
Beginning early in the NPRM process Peer Review: To ensure the Agency workshops and technical exchanges,
and continuing throughout the made its decisions for this final rule on and the scientific peer review have all
development of this final rule, EPA held the best science available, EPA been instrumental to EPAs ability to
hundreds of meetings with stakeholders, conducted a formal, independent peer advance our analysis between proposal
including government, academia, review of key components of the and final and to develop the
methodological and regulatory approach is converted internationally and the This section discusses the Agencys
described in this section. emissions associated with this land approach both for assessing the lifecycle
conversion are critical issues that have GHG emissions from biofuels as well as
2. Addressing Uncertainty
a large impact on the GHG emissions for the petroleum-based fuels replaced
The peer review, the public comments estimates. by the biofuels.
we have received, and the analysis Therefore, we focused our efforts on As described in detail below, EPA has
conducted for the proposal and updated the international indirect land use received a number of comments on the
here for the final rule, indicate that it is change emissions and worked to different pieces of this analysis and has
important to take into account indirect manage the uncertainty around those thoroughly considered those comments
emissions when looking at lifecycle impacts in three ways: (1) Getting the as well as feedback from our peer
emissions from biofuels. It is clear that, best information possible and updating review process. In each section below
especially when considering commodity our analysis to narrow the uncertainty, we will discuss comments received and
feedstocks, including the market (2) performing sensitivity analysis how they impacted our analysis.
interactions of biofuel demand on around key factors to test the impact on
feedstock and agricultural markets is a 1. Scope of Analysis
the results, and (3) establishing
more accurate representation of the reasonable ranges of uncertainty and As stated in the proposal, the
impacts of an increase in biofuels using probability distributions within definition of lifecycle GHG emissions
production on GHG emissions than if these ranges in threshold assessment. established by Congress in EISA is
these market interactions are not The following sections outline how we critical to establishing the scope of our
considered. have incorporated these three analysis. Congress specified that:
However, it is also clear that there are approaches into our analysis. The term lifecycle greenhouse gas
significant uncertainties associated with EPA recognizes that as the state of emissions means the aggregate quantity of
these estimates, particularly with regard scientific knowledge continues to greenhouse gas emissions (including direct
to indirect land use change and the use evolve in this area, the lifecycle GHG emissions and significant indirect emissions
of economic models to project future assessments for a variety of fuel such as significant emissions from land use
market interactions. Reviewers pathways will continue to change. changes), as determined by the
highlighted the uncertainty associated Administrator, related to the full fuel
Therefore, while EPA is using its
lifecycle, including all stages of fuel and
with our lifecycle GHG analysis and current lifecycle assessments to inform feedstock production and distribution, from
pointed to the inherent uncertainty of the regulatory determinations for fuel feedstock generation or extraction through
the economic modeling. pathways in this final rule, as required the distribution and delivery and use of the
In the proposal, we asked for by the statute, the Agency is also finished fuel to the ultimate consumer, where
comment on whether and how to committing to further reassess these the mass values for all greenhouse gases are
conduct an uncertainty analysis to help determinations and lifecycle estimates. adjusted to account for their relative global
quantify the magnitude of this As part of this ongoing effort, we will warming potential.166
uncertainty and its relative impact on ask for the expert advice of the National This definition forms the basis of
the resulting lifecycle emissions Academy of Sciences, as well as other defining the goal and scope of our
estimates. The results of the peer experts, and incorporate their advice lifecycle GHG analysis and in
review, and the feedback we have and any updated information we receive determining to what extent changes
received from the comment process, into a new assessment of the lifecycle should be made to the analytical
supported the value of conducting such GHG emissions performance of the approach outlined in our proposed
an analysis. Therefore, working closely biofuels being evaluated in this final rulemaking.
with other government agencies as well rule. EPA will request that the National
as incorporating feedback from experts Academy of Sciences over the next two a. Inclusion of Indirect Land Use
who commented on the rule, we have years evaluate the approach taken in Change
quantified the uncertainty associated this rule, the underlying science of EPA notes that it received significant
specifically with the international lifecycle assessment, and in particular comment on including international
indirect land use change emissions indirect land use change, and make indirect emissions in its lifecycle
associated with increased biofuel recommendations for subsequent calculations. Most of the comments
production. rulemakings on this subject. This new suggested that the science of
Although there is uncertainty in all assessment could result in new international indirect land use change
portions of the lifecycle modeling, we determinations of threshold compliance was too new, or that the uncertainty
focused our uncertainty analysis on the compared to those included in this rule involved was too great, to be included
factors that are the most uncertain and that would apply to future production in a regulatory analysis. EPA continues
have the biggest impact on the results. (from plants that are constructed after to believe that compliance with the
For example, the energy and GHG each subsequent rule). EISA mandatedetermining the
emissions used by a natural gas-fired aggregate GHG emissions related to the
ethanol plant to produce one gallon of B. Methodology
full fuel lifecycle, including both direct
ethanol can be calculated through direct The regulatory purpose of this emissions and significant indirect
observations, though this will vary analysis is to determine which biofuels emissions such as land use changes
somewhat between individual facilities. (both domestic and imported) qualify makes it necessary to assess those direct
The indirect domestic emissions are for the four different GHG reduction and significant indirect impacts that
also fairly well understood, however thresholds and renewable fuel occur not just within the United States,
these results are sensitive to a number categories established in EISA (see but also those that occur in other
of key assumptions (e.g., current and Section I.A). This threshold assessment countries.
future corn yields). The indirect, compares the lifecycle emissions of a Some commenters strongly supported
international emissions are the particular biofuel against the lifecycle EPAs proposal to include significant
component of our analysis with the emissions of the petroleum-based fuel it GHG emissions that occur overseas and
highest level of uncertainty. For is replacing (e.g., ethanol replacing
example, identifying what type of land gasoline or biodiesel replacing diesel). 166 Clean Air Act Section 211(o)(1).
are related to the lifecycle of renewable A number of commenters pointed to imported crude oil, and for imported
fuels or baseline fuels used in the the text and structure of the definition gasoline and diesel products, emissions
United States. These commenters agreed of lifecycle greenhouse gas emissions associated with refining and
that the text of the statute supports to argue that EPA either is not distribution of the finished product to
EPAs proposed approach, and that the authorized to consider GHG emissions the U.S. For imported renewable fuel,
alternative of ignoring such emissions related to international land use change, all of the emissions associated with
would result in grossly inaccurate or that it is not required to do so. One feedstock production and distribution,
assessments, and would be inconsistent commenter suggested that the reference fuel processing, and delivery of the
with the international nature of GHG in the definition of lifecycle finished renewable fuel to the U.S.
pollution and the fact that overseas greenhouse gas emissions to all stages occur overseas. The definition of
emissions have domestic impacts. of the lifecycle from feedstock lifecycle GHG emissions makes it clear
Other commenters argued that the generation through use of the fuel by that EPA is to determine the aggregate
presumption against extraterritorial the ultimate consumer does not include emissions related to the full fuel
application of domestic laws carries indirect emissions that result from lifecycle, including all stages of fuel
with it the presumption that Congress is decisions to place more land in acreage and feedstock production and
concerned with domestic effects and overseas for such non-fuel purposes as distribution. Thus, EPA could not, as a
domestic impacts only. They assert cattle feed. Another commenter stated legal matter, ignore those parts of a fuel
further that Congress intended to benefit that EPAs approach does not give any lifecycle that occur overseas.
domestic agriculture through EISA meaning to the terms significant and Drawing a distinction between GHG
enactment, and that the statutes fuel lifecycle in the definition, but emissions that occur inside the U.S. as
ambiguous terms should not be instead focuses on the words such as compared to emissions that occur
interpreted in a manner that could harm full to arrive at an expansive meaning. outside the U.S. would result in a
domestic agriculture in general or, for This commenter also noted the lack of lifecycle analysis that bears no apparent
one commenter, the biodiesel industry any specific reference to international relationship to the purpose of this
in particular. Although considering considerations in Section 211(o), as provision. The purpose of the
international emissions in its analyses opposed to other provisions in the CAA, thresholds in EISA is to require the use
could result in different implications such as Section 115. of renewable fuels that achieve
under the statute for various fuels and EPA believes that a complete analysis reductions in GHG emissions compared
of the aggregate GHG emissions related to the baseline. Ignoring international
fuel pathways as compared to ignoring
to the full lifecycle of renewable fuels emissions, a large part of the GHG
these emissions, EPA believes that this
includes the significant indirect emission associated with the different
is precisely the outcome that Congress
emissions from international land use fuels, would result in a GHG analysis
intended. Implementation of EISA will
change that are predicted to result from that bears no relationship to the real
undoubtedly benefit the domestic
increased domestic use of agricultural world emissions impact of
agricultural sector as a whole, with
feedstocks to produce renewable fuel. transportation fuels. The baseline would
some components benefiting more than
The statute specifically directs EPA to be significantly understated, given the
others depending in part on the lifecycle
include in its analyses significant large amount of imported crude and
GHG emissions associated with the
indirect emissions such as significant imported finished gasoline and diesel
products to be made from individual emissions from land use changes. EPA used in 2005. Likewise, the emissions
feedstocks. If Congress had sought to has not ignored either the terms estimates for imported renewable fuel
promote all biofuel production without significant or life cycle. It is clear would be grossly reduced in comparison
regard to GHG emissions related to the from EPAs assessments that the to the aggregate emissions estimates for
full lifecycle of those fuels, it would not modeled indirect emissions from land fuels made domestically with
have specified GHG reduction use changes are significant in terms of domestically-grown feedstocks, simply
thresholds for each category of their relationship to total GHG because the impacts of domestically
renewable fuel for which volume targets emissions for given fuel pathways. produced fuels occurred within the U.S.
are specified in the Act. Therefore, they are appropriately EPA does not believe that Congress
It is also important to note that considered in the total GHG emissions intended such a result.
including international indirect profile for the fuels in question. EPA has Excluding international impacts
emissions in EPAs lifecycle analysis not ignored the term life cycle. The means large percentages of GHG
does not exercise regulatory authority entire approach used by EPA is directed emissions would be ignored. This
over activities that occur solely outside to fully analyzing emissions related to would take place in a context where the
the U.S., nor does it raise questions of the complete lifecycle of renewable and global warming impact of emissions is
extra-territorial jurisdiction. EPAs baseline fuels. irrespective of where the emissions
regulatory action involves an Although the definition of lifecycle occur. If the purpose of thresholds is to
assessment of products either produced greenhouse gas emissions in Section achieve some reduction in GHG
in the U.S. or imported into the U.S. 211(o) does not specifically mention emissions in order to help address
EPA is simply assessing whether the use international emissions, it would be climate change, then ignoring emissions
of these products in the U.S. satisfies inconsistent with the intent of this outside our borders interferes with the
requirements under EISA for the use of section of the amended Act to exclude ability to achieve this objective. Such an
designated volumes of renewable fuel, them. A large variety of activities approach would essentially undermine
cellulosic biofuel, biomass-based diesel, outside the U.S. play a major part in the the purpose of the provision, and would
and advanced biofuel. Considering full fuel lifecycle of both baseline be an arbitrary interpretation of the
international emissions in determining (gasoline and diesel fuel used as broadly phrased text used by Congress.
the lifecycle GHG emissions of the transportation fuel in 2005) and One commenter stated that matters
domestically-produced or imported fuel renewable fuels. For example, several that could appropriately be considered
does not change the fact that the actual stages of the lifecycle process for part of a food lifecycle (new land
regulation of the product involves its gasoline and diesel can occur overseas, clearing for overseas grain production as
use solely inside the U.S. including extraction and delivery of a result of decreased U.S. grain exports)
should not be considered part of a GHG emissions from those activities in emissions, including those from both
renewable fuel lifecycle. However, the its analyses. domestic and international land use
suggested approach would mean that Some commenters noted that a changes, as related to the full fuel
EPA would fail to account for the finding of causation is built into the lifecycle, based on the results of our
significant indirect emissions that relate definitions of indirect effects in the modeling. These results form a
to renewable fuel production. EPA Endangered Species Act and the reasonable technical basis for the
believes this would be counter to National Environmental Policy Act, and linkage between the full fuel lifecycle of
Congressional intent. Although a life that EPA should interpret the reference transportation fuels and indirect
cycle analysis of foreign food to indirect emissions in EISA as emissions, as well as for the
production may also take into account requiring similar findings of causation. determination that these emissions are
a given land use change, that does not Specifically, they argue that for EPA to significant. EPA believes that while
mean that the same land use change count GHG emissions from international uncertainty in the resulting aggregate
should not be considered in evaluating land use change in its assessments, EPA GHG estimates should be taken into
its ultimate cause, which may be must find that renewable fuel consideration, it would be inappropriate
renewable fuel production in the United production caused the land use to exclude indirect emissions estimates
States. change. In response, without addressing from this analysis. The use of reasonable
Some comments asserted that the commenters claims regarding the estimates of these kinds of indirect
significant GHG gas emissions from requirements of NEPA or the ESA, EPA emissions allows EPA to conduct a
international land use change should notes that Congress has specified in reasoned evaluation of total GHG
not be considered if the only available Section 211(o) the required causal link impacts, which is needed to promote
models for doing so are not generally between a fuel and indirect emissions. the objectives of this provision, as
accepted or valid considering The indirect emissions must be related compared to ignoring or not accounting
economics or science, or where the to the full fuel lifecycle. EPA believes for these indirect emissions.
approach is new and untested, or where that it has demonstrated this link EPA understands that including
the data are faulty and EPA models through its modeling efforts. international indirect land use change is
unrealistic scenarios. As described in Specifically, the models predict that a key decision and that there is
this rulemaking, EPA has used the best increased demand for feedstocks to significant uncertainty associated with
available models and substantially produce renewable fuel that satisfies it. That is why we have taken an
EISA mandates will likely result in approach that quantifies that
modified key inputs to those models to
international land use change. Such uncertainty and presents the weight of
reflect comments by peer reviewers, the
change is, then, related to the full fuel currently available evidence in making
public, and emerging science. EPA has
lifecycle of these fuels. EPA does not our threshold determinations.
also modeled additional scenarios from
believe that the statute requires EPA to
those described in the NPRM. EPA b. Models Used
wait until these effects occur to
recognizes that uncertainty exists with As described in the proposal, to
establish the required linkage, but
respect to the results, and has attempted estimate lifecycle indirect impacts of
instead believes that it is authorized to
to quantify the range of uncertainty. biofuel production requires the use of
use predictive models to demonstrate
While EPA agrees that application of the economic modeling to determine the
likely results.
models it has used in the context of The term related to is generally market impacts of using agricultural
assessing GHG emissions represents interpreted broadly as meaning to have commodity feedstocks for biofuels. The
changes from previous biofuel lifecycle a connection to or refer to a matter. To use of economic models and the
modeling, EPA disagrees that it has used determine whether an indirect emission uncertainty of those models to
faulty data, modeled unrealistic has the appropriate connection to the accurately predict future agricultural
scenarios, or that its approach is full fuel lifecycle, we must look at both sector scenarios was one of the main
otherwise scientifically indefensible. the objectives of this provision as well comments we received on our analysis.
Although the results of modeling GHG as the nature of the relationship. EPA While the comments and specifically
emissions associated with international has used a suite of global models to the peer review supported our need to
land use change are uncertain, EPA has project a variety of agricultural impacts use economic models to incorporate and
attempted to quantify that uncertainty of the RFS program, including changes measure indirect impacts of biofuel
and is now in a better position to in the types of crops and number of production, they also highlighted the
consider the uncertainty inherent in its acres planted world-wide. These shifts uncertainty with that modeling
approach. in the agricultural market are a direct approach, especially in projecting out to
One commenter asserted that by consequence of the increased demand the future.
considering international land use for biofuels in the U.S. This increased However, it is important to note that
changes, EPA is seeking to penalize demand diverts biofuel feedstocks from while there are many factors that impact
domestic renewable fuel producers for other competing uses, and also increases the uncertainty in predicting total land
impacts over which they have no the price of the feedstock, thus spurring used for crop production, making
control. In response, EPA disagrees that additional international production. Our accurate predictions of many of these
it is seeking to penalize anyone at all. analysis uses country-specific factors are not relevant to our analysis.
EPA is simply attempting to account for information to determine the amount, For example different assumptions
all GHG emissions related to the full location, and type of land use change about economic growth rates, weather,
fuel lifecycle. Domestic renewable fuel that would occur to meet these changes and exchange rates will all impact
producers may have no direct control in production patterns. The linkages of future agricultural projections including
over land use changes that occur these changes to increased U.S. biofuel amount of land use for crops. However,
overseas as a result of renewable fuel demand in our analysis are generally we are interested only in the difference
production and use here, but their close, and are not extended or overly between two biofuel scenarios holding
choice of feedstock can and does complex. all other changes constant. So the
influence oversees activities, and EPA Overall, EPA is confident that it is absolute values and projections for
believes it is appropriate to consider the appropriate to consider indirect crops and other variables in the model
projections are not as important as the affirming that they are the strong and we rely entirely on the FAPRICARD
difference the model is projecting due to appropriate tools for the task of model for the analysis. However, we
an increase in biofuels production. This estimating land use changes stemming continue to believe there are benefits to
limits the uncertainty of using the from agricultural economic impacts due the use of FASOM. Specifically, the fact
economic models for our analysis. to changes in biofuel policy. that FASOM has domestic land use
Furthermore, one of the key In addition, in an effort to garner as change interactions between crop,
uncertainties associated with our useful comments as possible and to be pasture, and forest integrated into the
agricultural sector economic modeling as transparent as possible about the modeling is an advantage over using the
that has the biggest impact on land use modeling process, EPA supplied in the domestic FAPRICARD model that only
change results is the assumptions docket technical documents for the tracks cropland.
around crop yields. As discussed in FASOM and FAPRICARD models, the
Section V.A.2, we are conducting output received by EPA from each c. Scenarios Modeled
sensitivity analysis around different model, and the models themselves such As was done for the proposal, to
yield assumptions in our analysis. that the public and commenters could quantify the lifecycle GHG emissions
Therefore, because of the fact that we learn and examine how each model associated with the increase in
are only using the economic models to operates. renewable fuel mandated by EISA, we
determine the difference between two Building upon the support for the use compared the differences in total GHG
projected scenarios and the fact that we of the FASOM and FAPRICARD emissions between two future volume
are conducting sensitivity analysis models, a number of important scenarios in our economic models. For
around the yield assumptions we feel it enhancements were made to both each individual biofuel, we analyzed
is appropriate and acceptable to use models in response to comments the incremental GHG emission impacts
economic models in our analysis of received through the public comment of increasing the volume of that fuel to
determining GHG thresholds in our final system and through the peer review, the total mix of biofuels needed to meet
rule analysis. and in consultation with various experts the EISA requirements. Rather than
As was the case in the proposed on domestic and international focus on the impacts associated with a
analysis, to estimate the changes in the agronomics. These enhancements specific gallon of fuel and tracking
domestic agricultural sector (e.g., include updated substitution rates of inputs and outputs across different
changes in crop acres resulting from corn and soybean meal for distillers lifecycle stages, we determined the
increased demand for biofuel feedstock grains (DG) based on recent scientific overall aggregate impacts across sectors
or changes in the number of livestock research by Argonne National of the economy in response to a given
due to higher corn prices) and their Laboratory, the addition of a corn oil volume change in the amount of biofuel
associated emissions, EPA uses the from the dry mill ethanol extraction produced.
Forestry and Agricultural Sector process as a source of biodiesel, the full Volume Scenarios: The two future
Optimization Model (FASOM), incorporation of FASOMs forestry scenarios considered included a
developed by Texas A&M University model that dynamically interacts with business as usual volume of a
and others. To estimate the impacts of the agriculture sector model in the U.S., particular renewable fuel based on what
biofuels feedstock production on as well as the addition of a Brazil would likely be in the fuel pool in 2022
international agricultural and livestock regional model to the FAPRICARD without EISA, as predicted by the
production, we used the integrated Food modeling system. All of these Energy Information Agencys Annual
and Agricultural Policy and Research enhancements are discussed in more Energy Outlook (AEO) for 2007 (which
Institute international models, as detail below and in the RIA (Chapter 2 took into account the economic and
maintained by the Center for and 5). In addition to the model policy factors in existence in 2007
Agricultural and Rural Development enhancements we also conducted a before EISA). The second scenario
(FAPRICARD) at Iowa State University. sensitivity analysis on yields as part of assumed a higher volume of renewable
One of the main comments we our final rule analysis. These updates to fuels as mandated by EISA for 2022.
received on our choice of models was our modeling and the sensitivity We project our analysis and economic
the issue of transparency. Several analysis was done in response to public modeling through the life of the
comments were concerned that the comments specifically asking for this to program. We then consider the impacts
results of EPAs modeling efforts can not add transparency to the modeling and of an increase of biofuels on the
be duplicated outside the experts who modeling results. agricultural sector in 2022 as the basis
developed the models and conducted We also received comments on the for our threshold analysis. This was an
the analysis used by EPA in the combined use of FASOM and FAPRI area that we received numerous
proposal. Upon the release of the CARD. Several comments and peer comments on highlighting that this
proposal, EPA requested comment on reviewers questioned the benefit of approach adds uncertainty to our results
the use of these various models. EPA using two agricultural sector models. because we are projecting uncertain
conducted a number of measures to Specifically reviewers pointed to some technology and other changes out into
gather comments, including the public of the inconsistencies in the FASOM the future. One of the recommendations
comment period upon release of the and FAPRICARD domestic results. For was to base the lifecycle GHG
NPRM analysis, holding a public the final rule analysis we worked to assessments on a near term time frame
workshop on the lifecycle methodology, reconcile the two model results. We and update the analysis every few years
and conducting a peer review of the apply the same set of scenarios and key to capture actual technology changes.
lifecycle methodology. Specifically, one input assumptions in both models. For We continue to focus our final rule
of the major tasks of the peer review of example, both models were updated to analyses on 2022 results for two main
EPAs lifecycle GHG methodology was apply consistent treatment of DGs in reasons. First, it would require an
to review and comment on the use of domestic livestock feed replacement extremely complex assessment and
the various models and their linkages. and consistent assumptions regarding administratively difficult
The response we received through the DG export. implementation program to track how
peer review is supportive of our use of Some reviewers questioned the biofuel production might continuously
the FASOM and FAPRICARD models, benefits of using FASOM and suggested change from month to month or year to
year. Instead, it seems appropriate that coordination with USDA experts, EPA change could be a reduction in
each biofuel be assessed a level of GHG has developed for this final rule a high agricultural output of different impacted
performance that is constant over the yield case scenario of 230 bushels/acre regions around the world, including the
implementation of this rule, allowing for corn and 60 bushels/acre for U.S. This could also serve to reduce
fuel providers to anticipate how these soybeans. These figures represent the yield growth. As with many aspects of
GHG performance assessments should 99% upper bound confidence limit of this lifecycle modeling, as the science
affect their production plans. Second, it variability in historical U.S. yields. This and data evolves on crop yields, the
is appropriate to focus on 2022, the final high yield case represents a feasible Agency will update its factors
year of ramp up in the required volumes high yield scenario for the purpose of a accordingly.
of renewable fuel as this year. sensitivity test of the impact on the
2. Biofuel Modeling Framework &
Assessment in this year allows the results of higher yields.
Feedback we received indicated that Methodology for Lifecycle Analysis
complete fuel volumes specified in
corn and soybean yields respond in Components
EISA to be incorporated. This also
allows for the complete implementation tandem and that a high yield corn case As discussed above, to account for the
of technology changes and updates that would also imply a higher yield for direct and indirect emissions of biofuel
were made to improve or modeling soybeans as well. The high yield case is production required the use of
efforts. For example, the inclusion of therefore based on higher yield corn and agricultural sector economic models.
price induced yield increases and the soybeans in the U.S. as well as in the The results of these models were
efficiency gains of DGs replacement are major corn and soybean producing combined with other data sources to
phased in over time. Furthermore, these countries around the world. For generate lifecycle GHG emissions for the
changes are in part driven by the international yields, it is reasonable to different fuels. The basic modeling
changes in earlier years of increased assume the same percent increases from framework involved the following steps
biofuel use. the baseline yield assumptions could and modeling tools.
Crop Yield Scenarios: EPA received occur as we are estimating for the U.S. To estimate the changes in the
numerous comments to the effect that Thus in the case of corn, 230 bushels domestic agricultural sector we used
we should consider a case in our per acre is approximately 25% higher FASOM, developed by Texas A&M
economic models with higher yields than the U.S. baseline yield of 183 University and others. FASOM is a
that what were projected for the bushels per acre in 2022. This same partial equilibrium economic model of
proposed rule analysis. There are many 25% increase in yield can be expected the U.S. forest and agricultural sectors
factors that go into the economic for the top corn producers in the rest of that tracks over 2,000 production
modeling but the yield assumptions for the world by 2022, as justified possibilities for field crops, livestock,
different crops has one of the biggest improvements in seed varieties and, and biofuels for private lands in the
impacts on land use and land use perhaps even more so than in the case contiguous United States. Because
change. Therefore, for this analysis we of the U.S., improvements in farming FASOM captures the impacts of all crop
ran a base yield case and a high yield practices which can take more full production, not just biofuel feedstock,
case. This will provide two distinct advantage of the seed varieties we are able to use it to determine
model results for key parameters like potential. For example, seeds can be secondary agricultural sector impacts,
total amount of land converted by crop more readily developed to perform well such as crop shifting and reduced
by country. in the particular regions of these demand due to higher prices.
EPAs base yield projections are countries and can be coupled with The output of the FASOM analysis
derived from extrapolating through 2022 much improved farming practices as includes changes in total domestic
long-term historical U.S. corn yields farmers move away from historical agricultural sector fertilizer and energy
from 1985 to 2009. This estimate, 183 practices such as saving seeds from their use. These are calculated based on the
bushels/acre for corn and 48 bushels/ crop for use the next year and better inputs required for all the different
acre for soybeans, is consistent with understand the economic advantages of crops modeled and changes in the
USDAs method of projecting future modern farming practices. So the high amounts of the different crops produced
crop yields. During the public comment yield scenarios would not have the same due to increased biofuel production.
process we learned that numerous absolute yield values in other countries FASOM output also includes changes in
technical advancements including as the U.S. but would have the same the number and type of livestock
better farm practices, seed hybridization percent increase. produced. These changes are due to the
and genetic modificationhave led to While we modeled a high yield changes in animal feed prices and make-
more rapid gains in yields since 1995. scenario for this analysis we continue to up due to the increase in biofuel
In addition, commenters, including rely primarily on the base yield production. The FASOM output
many leading seed companies, provided estimates in our assessments of different changes in fertilizer, energy use, and
data supporting more rapid biofuel lifecycle GHG emissions livestock are combined with GHG
improvements in future yields. For recognizing that the base yields could be emission factors from those sources to
example, commenters pointed to recent conservative. The reasons outlined generate biofuel lifecycle impacts. The
advancements in seed development above could lead to higher rates of yield GHG emission factors for fuel and
(including genetic modification) and the growth in the future, however, there are fertilizer production come from the
general accumulation of knowledge of mitigating factors that could limit this Greenhouse gases, Regulated Emissions,
how to develop and bring to market yield growth or potentially cause and Energy use in Transportation
seed varietiesfactors that would allow reductions in yield growth rates. For (GREET) spreadsheet analysis tool
for a greater rate of development of seed example, the water requirements for developed by Argonne National
varieties requiring fewer inputs such as both increased corn farming and ethanol Laboratories, and livestock GHG
fertilizer and pest management production could lead to future water emission factors are from IPCC
applications. This new information constraints that may in some regions guidance.
would suggest that the base yield may limit yield growth potential. To estimate the domestic impacts of
be a conservative estimate of future Furthermore, one of the long term N2O emissions from fertilizer
yields in the U.S. Therefore, in impacts of potential global climate application, we used the DAYCENT
model developed by Colorado State processing facility and the finished confirmed that input data was being
University. The DAYCENT model biofuel from the facility to end use. used correctly, however, the hay N2O
simulates plant-soil systems and is These distances and modes are used to emissions in the proposal may have
capable of simulating detailed daily soil develop amount and type of energy used been overestimated based on the
water and temperature dynamics and for transport which is combined with approach used in the proposal to
trace gas fluxes (CH4, N2O, and NOX). GREET factors to generate GHG generate N2O emissions from nitrogen
DAYCENT model results for N2O emissions. We also calculate energy use fixing crops. This has been updated for
emissions from different crop and land needed in the biofuel processing facility the final rule analysis as discussed in
use changes were combined with from industry sources, reports, and the next section which resulted in lower
FASOM output to generate overall process modeling. This energy use is emissions from nitrogen fixing crops.
domestic N2O emissions. combined with emissions factors from Other comments indicated that we
FASOM output also provides changes GREET to develop GHG impacts of the should be using the most up to date data
in total land use required for agriculture biofuel production process for our calculations of GHG emissions.
and land use shifting between crops, The following sections outline how Since the proposal there has been a new
and interactions with pasture, and the modeling tools and methodology release of the GREET model (Version
forestry. This output is combined with discussed above were used in 1.8C). EPA reviewed the new version
emission factors from land use change conducting the analysis for the different and concluded that this was an
to generate domestic land use change lifecycle stages of biofuel production, improvement over the previous GREET
GHG emissions from increased biofuel including changes made since the release that was used in the proposal
production. proposal. Lifecycle stages discussed analysis (Version 1.8B). Therefore, EPA
To estimate the impacts of biofuels include feedstock production, land use updated the GHG emission factors for
feedstock production on international change, feedstock and fuel transport, fertilizer production used in our
agricultural and livestock production, biofuel production, and vehicle end use. analysis to the values from the new
we used the integrated FAPRICARD The modeling of the petroleum fuels GREET version. This had the result of
international models, developed by baseline is discussed in Section V.B.3. slightly increasing the GHG emissions
Iowa State University. These worldwide associated with fertilizer production
agricultural sector economic models a. Feedstock Production
and thus slightly increasing the GHG
capture the biological, technical, and Our analysis addresses the lifecycle emission impacts of domestic
economic relationships among key GHG emissions from feedstock agriculture.
variables within a particular commodity production by capturing both the direct As was the case in the proposal, we
and across commodities. and indirect impacts of growing corn, held the rates of domestic fertilizer
The output of the FAPRICARD soybeans, and other renewable fuel application constant over time. This is
model included changes in crop acres feedstocks. For both domestic and true for both of our yield scenarios
and livestock production by type by international agricultural feedstock considered as well as for price induced
country globally. Unlike FASOM, the production, we analyzed four main yield increases. This constant rate of
FAPRICARD output did not include sources of GHG emissions: agricultural application is justified based on USDA
changes in fertilizer or energy use or inputs (e.g., fertilizer and energy use), data indicating that crops are becoming
have land type interactions built in. fertilizer N2O, livestock, and rice more efficient in their uptake of
These were developed outside the methane. (Emissions related to land use fertilizer such that higher yields can be
FAPRICARD model and combined change are discussed in the next achieved based on the same per acre
with the FAPRICARD output to section). fertilizer application rates.
generate GHG emission impacts. N2O Emissions: The proposal analysis
Crop input data by crop and country i. Domestic Agricultural Sector Impacts calculated N2O emissions from domestic
was developed and combined with the Agricultural Sector Inputs: The fertilizer application and nitrogen fixing
FAPRICARD output crop acreage proposal analysis calculated GHG crops based on the amount of fertilizer
change data to generate overall changes emissions from domestic agriculture used and different regional factors to
in fertilizer and energy use. These fertilizer and energy use and production represent the percent of nitrogen (N)
fertilizer and energy changes along with change by applying rates of energy and fertilizer applied that result in N2O
the FAPRICARD output livestock fertilizer use by crop by region to the emissions. The proposal analysis N2O
changes were then converted to GHG FASOM acreage data and then factors were based on existing
emissions based on the same basic multiplying by default factors for GHG DAYCENT modeling that was
approach used for domestic sources, emissions from GREET. Fuel use developed using the 1996 IPCC
which involves combining with emissions from GREET include both the guidance for calculating N2O emissions
emission factors from GREET and IPCC. upstream emissions associated with from fertilizer applications and nitrogen
International land use change production of the fuel and downstream fixing crops. We identified in the
emissions were determined based on combustion emissions. proposal that this was an area we would
combining FAPRICARD output of crop In general commenters supported this be updating for the final rule based on
acreage change with satellite data to approach as it captures all indirect new analysis from Colorado State
determine types of land impacted by the impacts of agricultural sector emissions University using the DAYCENT model.
projected crop changes and then and not just those associated with the This update was not available at time of
applying emission factors of different specific biofuel crop in question. proposal.
land use conversions to generate GHG However, we did receive comments as We received a number of comments
impacts. part of our Model Linkages Peer Review on our proposal results indicating that
Additional modeling and data sources that the input data for some crops may the N2O emissions were overestimated
used to determine the GHG emissions of be overestimating GHG emissions. from soybean and other legume
other stages in the biofuel lifecycle Specifically, the commenter highlighted production (e.g., nitrogen fixing hay) in
include studies and data on the distance that N2O emissions from domestic hay our analysis. The main issue is that
and modes of transport needed to ship production seemed to be over estimated. because the N2O emission factors used
feedstock from the field to the biofuel As part of the final rule analysis EPA in the proposal were based on the 1996
IPCC guidance for N2O accounting they herd values as calculated by FASOM to As part of our public comment and
were overestimating N2O emissions get GHG emissions. Comments we peer review process we had this
from nitrogen fixing crops. As an update received on this approach were that the component of our analysis specifically
in 2006, IPCC guidance was changed default IPCC factors do not account for peer reviewed. The main comment we
such that biological nitrogen fixation the beneficial use of distiller grains received was to update our input data
was removed as a direct source of N2O (DGs) as animal feed. Use of DGs has with newer data sources. Therefore, for
because of the lack of evidence of been shown to decrease methane the final rule analysis we updated
significant emissions arising from the produced from enteric fermentation if fertilizer and pesticide consumption
fixation process itself. IPCC concluded replacing corn as animal feed. This is projections from the incorporation of
that the N2O emissions induced by the due to the fact that the DGs are a more updates made by the FAO to its Fertistat
growth of legume crops/forages may be efficient feed source. Consistent with and FAOStat datasets, as well as the
estimated solely as a function of the our assumptions regarding the incorporation of more up-to-date
above-ground and below-ground efficiency of DGs as an animal feed in fertilizer consumption statistics
nitrogen inputs from crop/forage our agricultural sector modeling, we provided by a recent International
residue. This change effectively reduces have also included the enteric Fertilizer Institute (IFA) report. This
the N2O emissions from nitrogen fixing fermentation methane reductions of DGs update had varying impacts on the
crops like soybeans and nitrogen fixing use in our final rule analysis. The amount of fertilizer used on different
hay from the 1996 to 2006 IPCC reduction amount was based on default crops in different countries but in
guidance. factors in GREET that calculated this general increased the amount of
Therefore, as part of the update to reduction based on the same Argonne fertilizer assumed and thus
new N2O emission factors from report used to determine DGs feed international agriculture lifecycle GHG
DAYCENT used for our final rule replacement efficiency discussed in emissions from fertilizer use for all
analysis we have updated to the 2006 Section V.B.2.b.i. This resulted in a biofuels.
IPCC guidance which reduces the N2O reduction in the lifecycle GHG Another comment from the peer
emissions from soybean production. emissions for corn ethanol compared to review was that we should include lime
This has the effect of reducing lifecycle the proposal assumptions. More detail use for some of the key crops modeled
GHG emissions for soybean biodiesel on the enteric fermentation methane in our analysis. Lime use was not
production. When we model corn reductions of DGs use can be found in included in the proposal because of lack
expansion as would result from Chapter 2 of the RIA. of international data on lime use by
increased production of corn-based The proposal analysis also included crop. Excluding lime used is an
ethanol, one of the impacts is that the the methane and N2O emissions of underestimate of international
increase in corn acres displaces some livestock manure management based on agriculture GHG emissions. For our final
acres otherwise planted to soy beans. IPCC default factors for emissions from rule analysis we included lime use for
Since the GHG emissions impact of this the different types of livestock and sugarcane production in Brazil based on
change in land use considers the N2O management methods combined with information received from Brazilian
emissions benefit from the displaced FASOM results for livestock changes. agricultural experts provided as part of
soy, the result of this lower soy bean We received comments that this was a the comment process. This led to an
N2O assessment means that the benefits good approach as it quantifies the increase in GHG emissions from
for soy displacement are less, indirect impacts of emissions associated sugarcane farming. We did not include
directionally increasing the net GHG with biofuel production. The same lime use for other crops in the final rule
emissions for corn expansion. approach was used for the final rule analysis because of lack of other data
We also received comments on our analysis. sources for other crops.
approach that we should use IPCC Methane from Rice: For the proposal, Other comments we received on our
factors directly as opposed to relying on methane emissions from rice production approach were that we were potentially
DAYCENT modeling. The difference is were calculated by taking the FASOM underestimating GHG emissions from
that IPCC provides default factors by output predicted changes in rice acres, international agriculture energy use.
crop by country, while DAYCENT resulting from the increase in biofuel Our proposal based international
models N2O emissions by crop but also production, and multiplying by default agriculture energy use on factors from
by region within the US, accounting for methane emission factors from IPCC to the International Energy Agency (IEA)
different soil types and weather factors. generate GHG impacts. We received that included all energy use for
For the final rule we still rely on the comments that this was a good approach agriculture that we divided by all
DAYCENT modeling results as we as it quantifies the indirect impacts of agricultural sector land by country to get
believe them to be more accurate. For emissions associated with biofuel a GHG emission per acre for each
example, the National Greenhouse Gas production. The same approach was country considered. The comment
Inventory as reported annually by the used for the final rule analysis. raised the issue that by using all
US to the Framework Convention on agricultural land this includes pasture
Climate Change uses the DAYCENT ii. International Agricultural Sector land that would not have the same
model to determine N2O emissions from Impacts energy input as crop production.
domestic fertilizer use as opposed to Agricultural Sector Inputs: For the Effectively, higher energy use from crop
using default IPCC factors as the proposal we determined international production was getting averaged with
DAYCENT modeling is recognized to be fertilizer and energy use emissions lower energy use for pasture and then
a more accurate approach. based on applying input data collected this lower number was applied only to
Livestock Emissions: GHG emissions by the Food and Agriculture crop production. We specifically asked
from livestock have two main sources: Organization (FAO) of the United as part of our peer review for guidance
enteric fermentation and manure Nations and the International Energy and comment on our international
management. For the proposal, enteric Agency (IEA) to the FAPRICARD crop agriculture energy use calculation. We
fermentation methane emissions were output data and then applied GREET did not receive significant comments or
determined by applying IPCC default defaults for converting those inputs to data to suggest that we change our
factors for different livestock types to GHG emissions. approach and reviewers generally
agreed we were using the best data Application, Direct Emissions from questions addressed both domestically
available. Furthermore, the energy use Crop Residues, and Indirect Emissions and internationally:
values represent all agriculture from Crop Residues. The proposal did Amount of Land Converted and
including forestry and fishing which not include N2O emissions from the Where.
could in some countries be Direct and Indirect Emissions from Crop Type of Land Converted.
overestimating energy use for crop Residues for cotton, palm oil, rapeseed, GHG Emissions Associated with
production. So for our final rule sugar beet, sugarcane, or sunflower. Conversion.
analysis we used the same approach as These were not included for these crops Timeframe of Emission Analysis.
for the proposal to calculate because default crop-specific IPCC Each of those methodology
international agriculture energy use factors used in the calculation were not components are discussed as are the
GHG emissions. available. comments we received as part of the
We also received comments on the Comments from our peer review comment and peer review process. We
applicability of applying GREET process suggested that we include proxy also outline in addition to our main
defaults for fuel and fertilizer emissions from these crops based on FASOM and FAPRICARD approach a
production to international fuel and similar crop types that do have default general equilibrium modeling
fertilizer use to generate GHG emissions. factors. Therefore, for our final rule approaches and its results.
The comments noted that GREET factors analysis we have included crop residue
are developed for domestic US N2O emissions from sugarcane i. Amount of Land Area Converted and
conditions and would not necessarily production based on perennial grass as Where
apply internationally. Specifically on a proxy. Perennial grass is chosen as a Based on a number of modeling
the issue of nitrogen fertilizer proxy based on input from N2O changes made to the FASOM and
production, the comments indicated modeling experts. This change results in FAPRICARD models since the NPRM,
that nitrogen fertilizer production an increase in N2O emissions from the amount of land use change resulting
internationally could rely on coal as a sugarcane and therefore sugarcane from an increase in biofuel demand in
fuel source as opposed to natural gas ethanol production compared to the the U.S. is significantly lower in this
used in the US, which would cause proposal. FRM analysis for most renewable fuels.
international GHG emissions associated Livestock Emissions: Similar to Many of the changes made were a direct
with fertilizer production and hence domestic livestock impacts, enteric result of comments received through the
biofuel production to be underestimated fermentation and manure management notice-and-comment period, comments
in our analysis. This was also an area GHG emissions were included in our received from the peer-reviewers, or as
we asked peer reviewers for comment proposal analysis. The proposal a result of incorporating new science
and guidance. The peer review response calculated international livestock GHG that has become available since the
generally supported our approach and impacts based on activity data provided analysis was conducted in the proposal.
did not offer suggestions for other data by the FAPRICARD model (e.g., Some of the key changes that had the
sources. So for our final rule analysis we number and type of livestock by largest impact on the land use change
used the same approach as for the country) multiplied by IPCC default estimates are included in this section.
proposal and applied GREET defaults to factors for GHG emissions. For additional information, see Chapter
calculate international fertilizer Based on the peer review of the 2 of the RIA.
production GHG emissions. methodology used for the proposal it As discussed in the NPRM, one of the
As was the case in the proposal and was determined that the calculations for key factors in determining the amount
for domestic agriculture, we held the manure management did not include of new land needed to meet an increase
rates of international fertilizer emissions from soil application. These in biofuel demand is the treatment of
application constant over time. This is emissions were included for our final co-products of ethanol and biodiesel
true for both of our yield scenarios rule analysis but do not cause a production. We received many
considered as well as for price induced significant change in the livestock GHG comments on this topic, particularly on
yield increases. This was an area that emission results. the amount of corn and soybean meal a
was specifically addressed in our peer Rice Emissions: To estimate rice
pound of DGS, the byproduct of dry mill
review of International Agricultural emission impacts internationally, the
grain ethanol production, can replace in
Greenhouse Gas Emissions and Factors. proposal used the FAPRICARD model
animal feed. For the final rule, we
The reviewers supported the approach to predict changes in international rice
predict that distiller grains will be
we have taken, for example indicating production as a result of the increase in
absorbed by livestock more efficiently
that generally crop production as a unit biofuels demand in the U.S. We then
of fertilizer application has increased over time. We updated the displacement
applied IPCC default factors by country
over time, therefore, crop yields have rate assumptions in the FASOM and
to these predicted changes in rice acres
increased with the same or lower FAPRICARD models based on
to generate GHG emissions. We received
fertilizer applications. comments we received and on the
comments that this was a good approach
N2O Emissions: For the proposal we recent research conducted by Argonne
as it quantifies the indirect impacts of
included N2O emissions from fertilizer National Laboratory and others.167
emissions associated with biofuel
application by applying IPCC default According to this research, one pound
production. The same approach was
factors for different crops in different of DGS replaces more than a pound of
used for the final rule analysis.
countries. We use IPCC default factors corn and/or soybean meal in beef and
because we do not have the same level b. Land Use Change dairy rations, in part because cattle fed
of regional factors like we do in the US The following sections discuss our DGS show faster weight gain and
from the DAYCENT model. The IPCC final rulemaking assessment of GHG increased milk production compared to
guidance has emission factors for four emissions associated with land use those fed a traditional diet. While this
sources of N2O emissions from crops, changes that occur domestically and 167 Salil, A., M. Wu, and M. Wang. 2008. Update
Direct N2O Emissions from Synthetic internationally as a result of the increase of Distillers Grains Replacement Ratios for Corn
Fertilizer Application, Indirect N2O in renewable fuels demand in the U.S. Ethanol Life-Cycle Analysis. Available at http://
Emissions from Synthetic Fertilizer There are four main methodology www.transportation.anl.gov/pdfs/AF/527.pdf.
study represents a significant increase recent field work. In addition, for out demand. In response to comments
over current DGS replacement rates, we NPRM analysis, we did not have data received, our new methodology
believe it is reasonable to assume that for switchgrass yields in certain regions accounts for changes in pasture area
improvements will be made in the use of the US. Therefore, the PNNL data resulting from livestock fluctuations and
and efficiency of DGS over time as the helped to fill a pre-existing data gap. As therefore captures the link between
DGS market matures, the quality and a result of these updates, less land is livestock and land used for grazing.
consistency of DGS improves, and as needed per gallon of switchgrass Based on regional pasture stocking rates
livestock producers learn to optimize ethanol produced. Additional details on (livestock per acre), we now calculate
DGS feed rations. As a result of this switchgrass yields and other agricultural the amount of land used for livestock
modification, less land is needed to sector modeling assumptions are grazing. The regional stocking rates
replace the amount of corn diverted to included in RIA Chapter 5. were determined with data on livestock
ethanol production. Additional details One of the major changes made to the populations from the UN Food and
on the DGS assumptions are included in FAPRICARD model between the NPRM Agricultural Organization (FAO) and
Chapters 2 and 5 of the RIA. and FRM includes the more detailed data on pasture area measured with
A second factor that can have a representation of Brazil through a new agricultural inventory and satellite-
significant impact on the amount of integrated module. The Brazil module derived land cover data. As a result of
land that may be converted as a result was developed by Iowa State with input this change, in countries where
of increasing biofuel demand are from Brazilian agricultural sector livestock numbers decrease, less land is
changes in crop yields over time. As experts and we believe it is an needed for pasture. Therefore, unneeded
discussed in the NPRM, our proposal improvement over the approach used in pasture acres are available for crop land
based domestic yields on USDA the proposal. In the NPRM, we or allowed to revert to their natural
projections for both the reference case requested additional data for countries state. In countries where livestock
and the control case. As discussed in outside the U.S. We received comments numbers increase, more land is needed
Section V.B.1.c, for this FRM we have encouraging us to use regional and for pasture, which can be added on
also included scenarios that use higher country specific data where it was abandoned cropland or unused
yield projections in both the reference available. We also received comments grassland, or it can result in
case and the control case. However, in encouraging us to take into account the deforestation. We believe this new
the NPRM we also requested comment available supply of abandoned methodology provides a more realistic
on whether the higher prices caused by pastureland in Brazil as a potential assessment of land use changes,
an increased in demand for biofuels source of new crop land. The new Brazil especially in regions where livestock
would increase future yield projections module addresses these comments. populations are changing significantly.
in the policy case beyond the yield Since the Brazil module contains data For additional information on the
trends in the reference case (sometimes specific to six regions, this additional pasture replacement methodology, see
referred to as price induced yields), or level of details allows FAPRICARD to RIA Chapter 2.
whether these price induced yields more accurately capture real-world Although the total amount of land use
would be offset by the reduction in responses to higher agricultural prices. conversion is lower in the FRM analysis
yields associated with expanding For example, double cropping (the compared to the NPRM analysis, the
production onto new marginal acres practice of planting a winter crop of regional distribution of this land use
(sometimes referred to as corn or wheat on existing crop acres) is change has shifted. Due to the many
extensification). Based on the comments a common practice in Brazil. Increased changes made in response to comments
we received, along with additional double cropping is feasible in response associated with agriculture and
historical trend analysis conducted by to higher agricultural prices, which livestock markets, Brazil is now much
FAPRICARD, the international increases total production without more responsive to changes in world
agricultural modeling framework now increasing land use conversion. The biofuel and agricultural product
incorporates a price induced yield new Brazil module also explicitly demand. As a result, a larger portion of
component.168 The new yield accounts for changes in pasture acres, the projected land use change occurs in
adjustments are partially offset by the therefore accounting for the competition Brazil compared to the NPRM analysis.
extensification factor, however, the between crop and pasture acres. Additional details on the geographical
combined impact is that fewer new Furthermore, the Brazil module location of land use change are included
acres are needed for agricultural explicitly models livestock in Chapter 2 of the RIA.
production to meet world agricultural intensification, the practice of
ii. Type of Land Converted
demands. increasing the number of heads of cattle
One additional change we made to the per acre of land in response to higher Based on a number of improvements
yield assumptions was to update the commodity prices or increased demand in our analysis, the types of land
FASOM model with new analysis by for land. affected by biofuel-induced tend to be
Pacific Northwest National Laboratories In addition to modifying how pasture less carbon intensive compared to the
(PNNL) on switchgrass yields.169 We acres are treated in Brazil, we also NPRM. Therefore, the net effect of our
included this new data for two reasons. improved the methodology for revisions to this part of our analysis
First, we received several comments calculating pasture acreage changes in significantly reduced land use change
that our assumptions on switchgrass other countries. We received several GHG emissions. The updated FAPRI
yields were too low, based on more comments through the public comment CARD Brazil model, discussed in the
period and peer reviewers supporting a previous section, showed more pasture
168 Technical Report: An Analysis of EPA better analysis of the interaction expansion in the Amazon which
Renewable Fuel Scenarios with the FAPRICARD between crops, pasture, and livestock. increased land use change emissions.
International Models, CARD Staff, January, 2010. In the NPRM, although we accounted However, the most important revisions
169 Thomson, A.M., R.C. Izarrualde, T.O. West,
for GHG emissions from livestock to this part of our international analysis,
D.J. Parrish, D.D. Tyler, and J.R. Williams. 2009.
Simulating Potential Switchgrass Production in the
production (e.g., manure management), in terms of their net effect on GHG
United States. PNNL19072. College Park, MD: we did not explicitly account for GHG emissions, were improvements that we
Pacific Northwest National Laboratory. emissions from changes in pasture made in our modeling of the
interactions between livestock, pasture, regarding EPAs approach. In general, of land types in order to capture the
crops and unused, or underutilized, the commenters that objected to our interaction between livestock, pasture,
grasslands globally. In the NPRM we analytical approach raised similar and cropland. Therefore, the FASOM
made the broad assumption that concerns as the peer reviewers, such as model now includes rangeland, pasture
international crop expansion would the need for more data validation and and forest land that can be used for
necessarily displace pasture, which uncertainty assessment. As discussed grazing. Since we also received
would require an equivalent amount of below, we made significant comments that we should take into
pasture to expand into forests and improvements to our analysis based on account the potential for idle land to be
shrublands. In the FRM analysis as the recommendations and comments we used for other purposes such as the
discussed in the previous section, we received. Based on the peer reviewers production of cellulosic ethanol,
have linked international changes in agreement that our general approach is FASOM now accounts for the amount of
livestock production with changes in scientifically justifiable, and in light of land within each category that is either
pasture area to allow for pasture the significant improvements made, we idle or used for production.
abandonment in regions where livestock think that our approach represents the These two major modifications to the
production decreases as a result of best available analysis of the types of FASOM model now allow us to
biofuel production. We also land affected by biofuel-induced land explicitly track land transfers between
incorporated the ability of pasture to use changes. We did consider a range of various land categories in the U.S. As a
expand onto unused, or underutilized, other analytical options, but based on result, we can more accurately capture
grasslands and savannas which on a all of the information considered and the GHG impacts of different types of
global basis reduced the amount of the requirements for this analysis, we land use changes domestically. More
forest conversion compared to the did not find any alternative approaches detail and results of the FASOM model
proposal. These revisions, as well as a that are superior at this time. As part of can be found in Section V.B.1.b of the
quantitative uncertainty assessment, are periodic updates to the lifecycle preamble.
discussed in this section. analysis, we will continue to consider International: The proposed rule
In the same way that the amount and ways to improve this part of our included a detailed description of the
location of land use change is analysis, as well as the merits of FAPRICARD/Winrock approach used
important, the type of land converted is alternate approaches. to determine the type of land affected
also a critical determinant of the Domestic: In response to comments internationally. This approach uses
magnitude of the GHG emissions received, we made two major satellite data depicting recent land
impacts associated with biofuel improvements to the FASOM model for conversion trends in conjunction with
production. For example, the the final rulemaking. As discussed in economic projections from the FAPRI
conversion of rainforest to agriculture the NPRM and supported by comments, CARD model (an economic model of
results in a much larger GHG release we were able to include the forestry global agricultural markets) to
than conversion of grassland. In the sector into the FASOM analysis. Only determine the type of land converted
proposed rule analysis we used two the agricultural sector of FASOM was internationally. In the proposed rule we
approaches, based on the best available analyzed for the NPRM, due to the fact described areas of uncertainty in this
information to us at the time, to evaluate that the forestry sector component was approach, illustrated the uncertainty
the types of land that would be affected undergoing model modifications. For with sensitivity analyses, and discussed
domestically and internationally. this FRM analysis, we were able to use other potential approaches for this
Domestically, we used the FASOM the fully integrated forestry and analysis. To encourage expert and
model, which simulates rental rates for agricultural sector model, thereby stakeholder feedback, EPA specifically
different types of land (e.g., forest, capturing the interaction between invited comment on this issue, held
pasture, crop) and chooses the land uses agricultural land and forests in the U.S. public hearings and workshops, and
that would produce the highest net In addition, the inclusion of the forestry sponsored an independent peer-review,
returns. Internationally, we used the model allows us to explicitly model the all of which specifically highlighted this
FAPRICARD/Winrock analysis land use change impacts of the part of our analysis for feedback. While
whereby historical land conversion competing demand for cellulosic there were a wide range of views
trends, as evaluated with satellite ethanol from agricultural sources with expressed in these forums, the feedback
imagery, are used to determine what cellulosic ethanol from logging and mill received by the Agency generally
types of land are affected by agricultural residues. As a result of this supported the FAPRICARD/Winrock
land use changes in each country or modification, the FRM analysis includes approach as appropriate for this
sub-region. some land use conversion from forests analysis. For example, all five experts
In the proposed rule we also into agriculture in the U.S. as a result of that peer reviewed EPAs use of satellite
explained several other options to the increased demand for renewable imagery agreed that it is scientifically
determine what types of land will be fuels. justifiable to use historic remote sensing
affected by biofuel-induced land use The second major modification we data in conjunction with agricultural
changes, such as the use of general made in response to comments was the sector models to evaluate and project
equilibrium models. EPA specifically disaggregation of different types of land land use change emissions associated
sought expert peer review input and included in FASOM. In the proposed with biofuel production. Additionally,
public comment on our approach and rulemaking, the FASOM model the peer reviewers and public
all of the analytical options for this part included three major categories of land: commenters highlighted problematic
of the lifecycle assessment. The expert cropland, pasture, and acres enrolled in areas and suggested revisions to
peer reviewers agreed that EPAs the Conservation Reserve Program improve our analysis. Below, we
approach was scientifically justifiable, (CRP). Although this categorization describe the key revisions that were
but they highlighted problematic areas allowed for a detailed regional analysis implemented which have significantly
and suggested important revisions to of land used to grow crops, acres used improved our analysis based on the
improve our analysis. The public for livestock production were not fully feedback received.
comments received on this issue captured. We received comments FAPRICARD/Satellite Data
expressed a wide range of views requesting a more detailed breakdown Approach: As described above in
Section V.B.1.b, the FAPRICARD the significant improvements made, we resolution, and robust data validation,
model was used to determine the think that our approach represents the which are discussed below.
amount of land use change in each best available analysis of the types of There was strong agreement among
country/region in response to increased land affected internationally. the peer reviewers that higher resolution
biofuel production. Because the FAPRI One of the fundamental satellite imagery would be an important
CARD model does not provide improvements in this analysis since the improvement over the 1-km resolution
information about what type of land is proposed rule is that it now provides data used in the proposed rule analysis.
converted to crop production or pasture, global coverage. The analysis for the Higher spatial resolution is especially
we worked with Winrock International proposed rule included satellite imagery useful in categorizing highly fragmented
to evaluate the types of land that would for 6 land categories in 314 regions landscapes. One of the reviewers
be affected internationally. Winrock is a across 35 of the most important hypothesized that land use change
global nonprofit organization with years countries, with a weighted average driven by biofuel production would
of experience in the development and applied to the rest of the world. We likely involve large parcels of land, and
application of the IPCC agricultural have since completed a global satellite thus 1-km resolution may be sufficient.
forestry and other land use (AFOLU) data analysis including 9 land categories However, all of the reviewers agreed
guidance. For the proposed rule, we in over 750 distinct regions across 160 that higher resolution data would be
used satellite data from 20012004 to countries. This was an analytical preferable. A number of the peer
provide a breakdown of the types of improvement that we committed to do reviewers specifically said that the
land converted to crop production. A in the proposed rule. As described version 5 MODIS data set, with 500
key strength of this approach is that below, the other major analytical meter resolution, would be adequate.
satellite information is based on enhancements were conducted in With four-times higher spatial
empirical observations which can be response to the many technical resolution than version 4, the peer
verified and statistically tested for recommendations that we received as reviewers anticipated that the 500m
accuracy. Furthermore, it is reasonable part of the peer review and public imagery would classify less area of
to assume that recent land use change comment process. mixed class land, thus providing a
decisions have been driven largely by more detailed representation of the land
All of the expert peer reviewers
economics, and, as such, recent patterns in that category. Consistent with the
agreed that the version 4 MODIS data
will continue in the future, absent major peer reviewers recommendations and
set used in the proposed rule, which with our goal to use the best available
economic or land use regime shifts covers 20012004 with one square-
caused, for example, by changes in information, our analysis was updated
kilometer (1km) spatial resolution, was with the higher resolution version 5
government policies. appropriate for our analysis given the MODIS data.
As discussed above, all five of the goals of the study at the time. However, Related to the issue of spatial
expert peer reviewers that reviewed our almost all of the reviewers strongly resolution, the peer review experts were
use of satellite imagery for this analysis recommended using a data set covering asked whether they would recommend
agreed that our general approach was a longer time period. The reviewers augmenting our global analysis with
scientifically justifiable. However, all of argued that the 3-year time period from even higher resolution data for specific
the peer reviewers qualified that 20012004 was too short to capture the regions where there is a high degree of
statement by describing relevant often gradual, or sequential, cropland agricultural land use change. All of the
uncertainties and highlighting revisions expansion that has been observed in the peer reviews agreed that this type of
that would improve our analysis. Some tropics. The short time period may also analysis would be worthwhile. In
of the public commenters supported show unusual or temporary trends in response to this recommendation, we
EPAs use of satellite imagery, while land use caused by short-term policy analyzed select geographic regions (e.g.,
other expressed concern. In general, changes or market influences. The Brazil, India) with the higher resolution
both sets of public commentersthose reviewers suggested that remote sensing 30m Landsat data set covering 2000
in favor and opposedoutlined the observations covering 510 years would 2005. The Landsat data set does not
same criticisms and suggestions as the be adequate to address these problems. currently provide global coverage, thus
expert peer reviewers. Among the many The reviewers also recommended that it was not an option for use in the full
valuable suggestions for satellite data remote sensing observations should be analysis; instead, it was used as a way
analysis provided in the expert peer as recent as possible in order to capture to check/validate the appropriateness of
reviews and public comments, several current land use change drivers and the version 5 MODIS imagery. In
major recommendations emerged: EPA patterns (e.g., political systems, general, the higher resolution data
should use the most recent satellite data infrastructure, and protected areas). To showed similar land use change
set that covers a period of at least 5 use the best available data and respond patterns as the MODIS data. The results
years; EPA should use higher resolution to the peer reviewers recommendations, of this analysis are discussed further in
satellite imagery; EPAs analysis should the analysis was updated to include the Chapter 2 of the RIA.
consider a wider range of land most recent MODIS data set, version 5, Another issue that we invited
categories; EPA should improve its which covers the time period 2001 comments on was the re-classification of
analysis of the interaction between 2007. MODIS land cover products are the MODIS data from 17 land cover
cropland, pasture and unused or not available for years prior to 2001, so categories into 6 aggregated categories
underutilized land; and EPAs analysis it is not currently possible to analyze a (e.g., open and closed shrubland were
should include thorough data validation time period longer than six years (i.e., both re-classified as shrubland). The
and a full assessment of uncertainty. 20012007) with a single, or consistent, category aggregation was intended to
Below, we describe these and other data set. Thus, consistent with the peer remove unnecessary complexity from
recommendations and how we review recommendations, we are now the analysis. All five expert reviewers
addressed each of them to improve our using the most recent global data set agreed that the methodology used to re-
analysis. Based on the peer reviewers which covers at least 5 years. There are classify land cover categories using
agreement that our general approach is other advantages to using the version 5 International Geosphere-Biosphere
scientifically justifiable, and in light of MODIS data, such as improved spatial Programme (IGBP) land definitions was
sound; however, the reviewers analysis of pasture and abandoned uncertainty and included multiple
recommended inclusion of more than 6 agricultural land are provided in RIA sensitivity analyses. For example, we
aggregated land categories. The Chapter 2. presented a range of lifecycle results
reviewers specifically recommended the A sub-set of the expert peer reviewers assuming at the high-end that all land
addition cropland/natural vegetation recommended combining the historic conversion caused deforestation and at
mosaic, permanent wetlands, and barren satellite imagery with other information the low-end that biofuels would cause
or sparsely vegetated land, all of which on land use change drivers (e.g., no deforestation. Further, EPA sought
are now included in our analysis. transportation infrastructure, poverty input on this issue in public hearings
Consistent with these recommendations, rates, opportunity costs) as an and workshops, and expert feedback
there are 9 aggregate land categories in additional means to estimate the types through the independent peer review.
our revised analysis: barren, cropland, of land affected. Consideration of these The feedback we received, both from
excluded (e.g., urban, ice, water bodies), types of information could potentially experts and the public, overwhelmingly
forest, grassland, mixed (i.e., cropland/ address two conceptual issues with the supported a more systematic analysis of
natural vegetation mosaic), savanna, use of satellite imagery in this analysis: the uncertainty in using satellite data to
shrubland and wetland. These land First, biofuel-induced land use change project biofuel-induced land use change
cover categories capture all significant could affect different types of land than patterns. Additionally, commenters
types of land affected by agricultural the generic agricultural expansion recommended more data validation,
land use changes. As described below in captured by the historic data; and especially regarding the satellite
Section V.B.2.b.iii, we also estimated second, future land use change patterns imagery. To respond to these comments,
carbon sequestrations for all of these may differ from historic patterns. Our we incorporated satellite imagery
land categories. The impact of adding concerns with the first issue are allayed validation and conducted a Monte Carlo
these land categories to our analysis is to some degree by one of the peer analysis of the MODIS satellite data
discussed further in RIA Chapter 2. reviewers who observed, While it is using assessments provided by NASA to
Another important addition to our theoretically possible that the changes quantitatively evaluate the uncertainty
analysis was consideration of the types in land use resulting from biofuel in our application of satellite imagery.
production occur in ecosystems or One benefit of using the MODIS data
of land affected by changes in pasture
regions that would not be the ones set is that it is routinely and extensively
area, and the interaction of pasture land
affected by other drivers, this doesnt validated by NASAs MODIS land
with cropland. In the proposed rule, we validation team. NASA uses several
made a broad assumption that the total appear very likely. 170 Furthermore, the
economic drivers of land use change are validation techniques for quality
land area used for pasture would stay assurance and to develop uncertainty
the same in each country or region. to a large degree captured by the
economic models that are used in our information for its products. NASAs
Thus, in the proposed rule, we assumed primary validation technique includes
that any crop expansion onto pasture analysis. For example, the FAPRICARD
model considers economic drivers in its comparing the satellite classifications to
would necessarily require an equal data collected through field and aircraft
amount of pasture to be replaced on projections of where and how much
crop production will change as a result surveys, and other satellite data sensors.
forest or shrubland. We received a large The accuracy of the version 5 MODIS
number of comments questioning these of specifically biofuel-induced changes.
The second issue is also addressed to land cover product was assessed over a
assumptions, and the expert peer significant set of international locations,
reviewers encouraged us to develop a some degree by the FAPRICARD model
which includes baseline forecasts of including roughly 1,900 sample site
better representation of the interactions clusters covering close to 150 million
between cropland and pasture land. As future international agricultural,
economic and demographic conditions. square kilometers. The results of these
described above in Section V.B.2.6.i, the validation efforts are summarized in a
results from the FAPRICARD model Furthermore, as discussed above, we
used the most recently available satellite confusion matrix which compares the
are now used to determine pasture area satellites land classifications with the
changes in each country or region. In data sets in order to capture the most
current land use change drivers. Thus, actual land types observed on the
regions where we project that pasture ground. We used this information to
and crop area both increase, the land while we think that these issues are
assess the accuracy and systematic
types affected by pasture expansion are currently addressed to a scientifically
biases in the published MODIS data. In
determined using the same analysis justifiable degree for the purposes of
general, the validation process found
used for crop expansion. This new this analysis, we recognize that these are
that MODIS version 5 was quite
approach accounts for the ability of areas for future investigation, and we
accurate at distinguishing forest from
pasture to expand on to previously have tried to capture the uncertainty
cropland or grassland. However, the
unused, or underutilized, grasslands from these factors in uncertainty and
satellite was more likely; for example, to
and savanna. In regions where we sensitivity analyses as described below.
confuse savanna and shrubland because
project that crop and pasture area will While EPA has made significant
these land types can look quite similar
change in opposite directions (e.g., crop improvements to the methodology in
from space.
area increases and pasture decreases) we response to peer review comments, the Using the data validation information
assume that crops will expand onto use of satellite data for forecasting land from NASA about which types of land
abandoned pasture, and vice versa. Our use changes is a key area of uncertainty MODIS tends to confuse which each
analysis also now accounts for carbon in the analysis. To facilitate substantive other, our Monte Carlo analysis was able
sequestration resulting from crop or comments on the impact of uncertainty to account for systematic
pasture abandonment. We used our in international land use changes, and misclassifications in the MODIS data
satellite analysis, which shows the how to address the uncertainty, the set. Therefore, part of the Monte Carlo
dominant ecosystems and land cover proposed rule highlighted areas of analysis can be viewed as a way to
types in each region, to determine 170 Peer Review Report, Emissions from Land Use
correct and reduce the inaccuracies in
which types of ecosystems would grow Change due to Increased Biofuel Production:
the MODIS data. After this correction is
back on abandoned agricultural lands in Satellite Imagery and Emissions Factor Analysis, performed, the uncertainty in the
each region. More information about our July 31, 2009, p. 2. satellite data is no longer solely a
function of the accuracy of the satellite. detection is that it is better suited to For agricultural soils, FASOM models
Instead, the sizes of the standard errors capture the sequential nature of land GHG emissions associated with changes
for each classification are also a use changes, e.g., a forest could be in crop production acreage and with
function of the sample sizes in the data converted to savanna, then grassland changes in crop type produced. FASOM
validation exercise. For example, if and then cropland. The differencing generates soil carbon factors for
NASA validated every pixel on Earth, method that we employed lends itself cropland and pasture according to IPCC
the corrected data set would be 100% more readily to comprehensive global Agriculture, Forestry, and Other Land
accurate, even if the original satellite analysis, data validation, and Use (AFOLU) Guidelines. In the
data were only 50% accurate. Similarly, uncertainty assessment. Given the proposed rule, we committed to
although NASA reports that the overall timeframe and priorities for our updating FASOM soil carbon
accuracy of the MODIS version 5 land analysis, we think that the differencing accounting for agriculture. Per our
cover data set is approximately 75%, the method provides the best approach commitment, we have updated FASOM
standard errors after the Monte Carlo available at this time. However, we will soil carbon accounting for cropland and
procedure are less than 5% for each continue to consider alternative pasture using the latest DAYCENT
aggregate land category. These standard analytical techniques, such as change modeling from Colorado State
errors were used to quantify the detection, for use as part of periodic University.
uncertainty added by the satellite data updates to this analysis.
used in our analysis. This procedure In the proposed rule, EPA committed
Some of the peer reviewers to incorporate the forestry sector and the
and the results are described in more
recommended additional alternative GHG emission impacts due to the land
detail in Chapter 2 of the RIA.
It should be noted that our assessment technical approaches for satellite data use interactions between the domestic
of satellite data uncertainty did not try and land use change analysis. For agricultural and forestry sectors into the
to fully quantify the uncertainty of using example, some of the reviewers FASOM analysis. We received comment
historical data to make future recommended the use of satellite supporting the incorporation of the
projections about the types of land that imagery to identify specific crop-types forestry sector. By including the forestry
would be affected internationally. As and rotations, and one reviewer sector in the FASOM domestic model
noted above, we think it is reasonable to suggested that EPA develop a new (see Section V.B.4.b.ii), we have
assume that in general, recent land use interactive spatial model. The Summary incorporated GHG emission impacts
change patterns will continue in the and Analysis of Comments document associated with change in forest above-
future absent major economic or land includes discussion of these and other ground and below-ground biomass,
use regime shifts caused, for example, technical comments and forest soil carbon stocks, forest
by changes in government policies. recommendations that are not covered management practices (e.g. timber
Thus, our uncertainty assessment here. harvest cycles), and forest products and
provides a reasonable estimate of the iii. GHG Emissions Associated With product emission streams over time.
variability in land use change patterns Conversion Forest carbon accounting in FASOM is
absent any fundamental shifts in the based on the FORCARB developed by
factors that affect land use patterns. (1) Domestic Emissions the U.S. Forest Service and on data
However, our uncertainty assessment GHG emissions impacts due to derived largely from the U.S. Forest
does not attempt to fully quantify the domestic land use change are based on Service RPA modeling system.
probability of major shifts in land use GHG emissions the FASOM model With the changes to FASOM
regimes, such as the implementation of generates in association with land type discussed above, we also updated the
effective international policies to curb conversions projected in the model. In final calculation method of domestic
deforestation. the proposed rule analysis, estimates of
Some of the peer reviewers land use change GHG emissions to
land use change emissions were limited account for FASOMs cumulative
recommended a satellite imagery
to conversion between different types of assessment of GHG emissions and the
analysis approach known as change
agricultural land (e.g., cropland, fallow continuous (rather than discrete) nature
detection, instead of the differencing
cropland, pasture). The analysis did not of soil carbon and forest product
approach used in the Winrock analysis.
allow for the addition of new domestic emissions. For each category of
However, there was disagreement
agricultural land. agricultural and forestry land use
among the peer reviewers on this point,
with one peer reviewer saying that In response to feedback EPA received emissions, we calculated the mean
thematic differencing between land during the public comment period and cumulative emissions from the initial
cover maps generated for two specific based on commitments EPA made in the year of FASOM modeling (2000) to
dates, as conducted in this study, NPRM, several changes and additions 2022. Changes in agricultural and forest
provides the best approach for detecting have augmented the analysis of soil carbon and forest products have a
and analyzing land use pattern changes domestic land use change GHG stream of GHG emissions associated
globally. In general terms, the emissions since the proposed rule with them in addition to the initial
differencing method employed by analysis. The addition of the forest land pulse associate with a discrete instance
Winrock compared global land cover types and the interaction between or year of land use change. For each of
maps from 2001 and 2007 to evaluate cropland, pastureland, forestland, and these categories FASOM calculates the
the pattern of land use change during developed land to the FASOM model emissions over time associated with the
this period. Thus, the differencing provides a more complete emissions mean land use change over a year. We
method shows all of the land that profile due to domestic land use change included in total domestic land use
changed categories, as well as all of the (see Section V.B.4.b.ii). We have change emissions the annualized
land that stayed the same over this updated soil carbon accounting based emission streams associated with all
period. For change detection, instead of on new available data. Lastly, the agricultural soil, forest soil, and forest
using comprehensive land cover maps, methodology now captures GHG product changes included in the mean
the data set only shows land categories emission streams over time associated cumulative emissions (20002022) for
that changed. One advantage of change with discrete land use changes. 30 years after 2022.
(2) International Emissions The proposed rule analysis included In addition to estimating forest carbon
land conversion emissions factors for 5 stocks for each region, EPAs analysis
Based on input from the expert peer land categories in 314 regions across 35 also includes estimates of annual forest
review and public comments, we of the most important countries, with a carbon uptake. When a forest is cleared
incorporated new data sources and weighted average applied to the rest of the future carbon uptake from the forest
made other methodological the world. We augmented this analysis is lost; this is known as foregone forest
improvements in our estimates of GHG to provide global coverage, including sequestration. In the proposed rule, to
emissions from international land emissions factors for 10 land categories estimate annual forgone forest
conversions. Some of these in over 750 regions across 160 countries. sequestration, we used IPCC default
modifications increased land use change Other significant improvements data for the growth rates of forests
GHG emissions compared to the NPRM, included incorporation of new data greater than 20 years old. The expert
such as the consideration of carbon sources, emissions factors for peat soil peer reviewers noted that these
releases from drained peat soils. Other drainage, sequestration factors for estimates could be refined with more
modifications, such as more abandoned agricultural land, and a full detailed information from the scientific
conservative foregone sequestration uncertainty assessment considering literature. Many of the public
estimates, tended to decrease land use every data input. commenters were also concerned that
change GHG emissions. For example, Another significant improvement in EPAs approach overestimated foregone
our estimates of emissions per acre of our analysis was incorporation of higher sequestration because it did not
deforestation in Brazil tended to resolution soil carbon data. One of the adequately account for natural
increase because of improved data on expert peer reviewers commented that disturbances, such as fires and disease.
forest biomass carbon stocks in that the weakest part of EPAs international To address these comments, our
region. However, for example, our emissions factor analysis for the analysis has been updated with peer
deforestation estimates in China proposed rule was the global soil carbon reviewed studies of long-term growth
decreased, in part because of new data map that was used because of its coarse rates for both tropical and temperate
on foregone forest sequestration. The net resolution. To address this comment, we forests. These estimates are based on
effect of the revisions varied depending incorporated the new Harmonized long-term records (i.e., monitoring
on the location and types of land use World Soil Database, released in March stations in old-growth forests for the
changes in each biofuel scenario. The 2009. This dataset provides one square tropics and multi-decadal inventory
major changes to this part of our kilometer spatial resolution, which is a comparisons for the temperate regions)
analysis, including a quantitative major improvement compared to the and reflect all losses/gains over time.
uncertainty assessment, are discussed in proposed rule analysis. This dataset also These studies show that the old-growth
this section. includes an updated soil map of China forests in the tropics that many once
To determine the GHG emissions that the peer reviewers recommended. assumed to be in steady state (i.e.,
impacts of international land use Using this updated soil carbon data, the carbon gains equal losses) are in fact
changes, we followed the 2006 IPCC change in soil carbon following still gaining carbon. In summary, our
Agriculture, Forestry, and Other Land conversion of natural land to annual analysis now includes more
Use (AFOLU) Guidelines.171 We worked crop production was estimated conservative foregone forest
with Winrock, which has years of following the 2006 IPCC guidelines. sequestration estimates that account for
experience developing and When land is plowed in preparation for natural gains and losses over time. More
implementing the IPCC guidelines, to crop production the soil loses carbon
information about these estimates is
estimate land conversion emissions over time until a new equilibrium is
provided in RIA Chapter 2.
factors, including changes in biomass established. To calculate soil carbon
emissions the IPCC approach considers Another consideration when
carbon stocks, soil carbon stocks, non-
both tillage practices and agricultural estimating GHG emissions resulting
CO2 emissions from clearing with fire
inputs. Some of the peer reviewers from deforestation is that some of the
and foregone forest sequestration (i.e.,
expressed concern with our annual soil wood from the cleared forest can be
lost future growth in vegetation and soil
carbon change estimates, which harvested and used in wooden products,
carbon). In addition to seeking comment
assumed a constant rate of change over such as a table, that retain biogenic
on our analysis in the proposed rule,
20 years. However, for analytical carbon for a long period of time. Some
EPA organized public hearings and
timeframes greater than 20 years, such commenters argued that consideration
workshops, and an expert peer review
as used in our lifecycle analysis, the of the use of harvested wood in
specifically eliciting feedback on this
peer reviewers agreed that the our products would decrease land use
part of the lifecycle analysis. All of the
approach was scientifically justifiable. change emissions and reduce the
expert peer reviewers generally felt that
More information about soil carbon impacts of biofuel production. As part
our analysis followed IPCC guidelines
stock estimates is available in Chapter 2 of analysis for the proposed rule, we
and was scientifically justifiable;
of the RIA. investigated the share of cleared forest
however, they did make several
The expert peer reviewers generally biomass that is typically used in
suggestions of new data sources and
agreed that EPAs estimate of forest harvested wood products (HWP).
recommended areas that could benefit
carbon stocks followed IPCC guidelines However, we did not account for this
from additional clarification. Based on
and used the best available data. They factor in the proposed rule after it was
the detailed comments we received, we
did, however, recommend that the determined that HWP would have a
worked with Winrock to make a number
analysis could be updated with very small impact on the magnitude of
of important revisions, which have

improved forest biomass maps as they land use change emissions. A number of
significantly improved this part of our
become available. Consistent with these commenters expressed concern that we
analysis.
suggestions, we incorporated improved did not account for HWP, and they
171 2006 IPCC Guidelines for National Greenhouse
forest biomass maps for regions where argued that HWP would be more
Gas Inventories, Volume 4, Agriculture, Forestry
they were available. More information significant than we had determined.
and Other Land Use (AFOLU). See http://www.ipcc- about the specific data sources used is However, in response to specific
nggip.iges.or.jp/public/2006gl/vol4.html. available in RIA Chapter 2. questions on this topic, all of the expert
peer reviewers agreed that EPA had outcomes is captured in the uncertainty guidance.172 This analysis considers the
properly accounted for HWP and other analysis described below. uncertainty in the every parameter used
factors (e.g., land filling) that could Other issues that were covered in the in our emissions factor estimates.
prevent or delay emissions from land expert peer review and public Standard deviations for each parameter
clearing. One of the peer reviewers comments included EPAs carbon stock were estimated based on the quality and
noted that forests converted to estimates for grasslands, savanna, quantity of the underlying data. For
croplands are generally driven by shrublands and wetlands, and our example, in our analysis the standard
interests unrelated to timber, and thus assumptions about which regions use errors (as a percent of the mean) tend to
the trees are simply burned and fire to clear land prior to agricultural be smallest for forest carbon stocks in
exceptions are probably of minor expansion. There is less data available Brazil, because a large amount of high
importance. To study this issue further, for these parameters relative to some of quality/resolution data was considered
we looked at FAO timber volume the other issues discussed above, e.g., to estimate that parameter. Standard
estimates for 111 developing countries, forest carbon stocks. Therefore, we errors are largest for parameters that
and published literature on the share of worked to use expert judgment to derive were estimated by scaling other data, or
harvested timber used in wood products global estimates for these parameters. In applying IPCC defaults, e.g., savanna
and the oxidation period for wood general, the peer reviewers thought that carbon stocks in Yemen. More detail
products, such as wood-based panels EPAs approach to these issues was about our estimate of parameter
and other industrial roundwood. reasonable and scientifically justifiable. uncertainty is available in RIA Chapter
Consistent with the peer reviewers Some of the peer reviewers 2.
statements, our analysis concluded that recommended more resource-intensive Following IPCC guidance, the
even in countries with high rates of techniques to refine some of our uncertainties in the individual
harvested timber utilization, such as estimates. For example, regarding the parameters of an emission factor can be
Indonesia, a very small share of issue of clearing with fire, one of the combined using either error propagation
harvested forest biomass would be peer reviewers suggested that we could methods (IPCC Tier 1) or Monte Carlo
sequestered in HWP for longer than 30 review fire events in the historical simulation (IPCC Tier 2). We used the
years. The details of our HWP analysis satellite data to estimate where fire is Tier 2 Monte Carlo simulation method
are discussed further in RIA Chapter 2. most commonly used. We carefully for this analysis. Monte Carlo is a
This is an area for further work, but considered these suggestions, but did method for analyzing uncertainty
based on our analysis, and the feedback not make significant revisions to our propagation by randomly sampling from
from expert commenters, we do not analysis of these issues. Our review the probability distributions of model
expect that consideration of HWP would concluded that given the timeframe and parameters, calculating the results of the
have a significant impact on the goals of our analysis, the approach used model from each sample, and
magnitude of GHG emissions from in the proposed rule was most characterizing the probability of the
international deforestation in our appropriate. We recognize that these are outcomes. An important consideration
analysis. Furthermore, the range of areas for future work, and we will for Monte Carlo analysis is the treatment
outcomes from consideration of HWP is consider new data as part of periodic of correlation, or dependencies, among
indirectly captured in our assessment of updates. Furthermore, our uncertainty parameter errors. Strong positive
forest carbon stock uncertainty, which is analysis, described below, considered correlation among parameter errors will
described below. the fact that these are areas where less result in greater overall uncertainty. As
data is available. a simplified example, if the errors in our
The land conversion emissions
estimates used in our analysis consider Other improvements in our analysis forest carbon stock estimates are
the carbon stored in crop biomass. In included the addition of emissions from positively correlated, then if we are
the proposed rule, we used the IPCC peat soil drainage in Indonesia and overestimating forest carbon in one
default biomass sequestration factor of 5 Malaysia, and sequestration factors for region we are likely overestimating
metric tons of carbon per hectare for abandoned agricultural land. Consistent forest carbon in every region. We
annual crops, and applied this value to with the expert peer reviewers worked with Winrock to estimate the
all crops globally. The final rule recommendations, we considered a degree of correlation among variables
analysis now distinguishes between number of recent studies to estimate both the correlation of one variable
annual and perennial crops, with average carbon emissions when peat across space as well as the correlation
separate sequestration estimates for soils are drained in Indonesia and of one variable to any others used in the
sugarcane and oil palm determined from Malaysia (the countries where peat soil analysis. This was done by considering
the scientific literature. The peer is sometimes drained in preparation for dependencies in the underlying data
reviewers suggested approaches to new agricultural production). To used to estimate each parameter. For
refine our biomass carbon estimates for estimate annual sequestration on example, our forest carbon stock
different types of annual crops, e.g., for abandoned agricultural land we used estimates are correlated across Russia
corn versus soybeans. However, we our foregone sequestration estimates because they were derived from one
determined that adding crop-specific and other data from IPCC. More biomass map covering Russia. However,
biomass sequestration estimates would information about these estimates is forest carbon stocks in Russia are not
have a very small impact on our results, available in RIA Chapter 2. correlated with China, because they
because in general annual cropland As discussed in Section V.A.2, the were derived from separate biomass
carbon stocks range only from 3 to 7 uncertainty of land use change maps. This partial correlation approach
tons per hectare and the average would emissions is an important consideration tended to reduce the overall uncertainty
likely be very close to the IPCC default in EPAs threshold determinations as
factor currently applied. This is an area part of this rulemaking. We conducted 172 2006 IPCC Guidelines for National Greenhouse
a full assessment of the uncertainty in Gas Inventories, Volume 1: General Guidance and
for future work, but we are confident Reporting, Chapter 3: Uncertainties, available at
that it would have very small impact. international land use change emissions http://www.ipcc-nggip.iges.or.jp/public/2006gl/
Furthermore, the range of potential factors consistent with 2006 IPCC vol1.html.
associated with GHG emissions factor consideration in our lifecycle analysis. time periods give more weight to the
data. The Agency discussed the relative known, more immediate, effects of
The information about the uncertainty advantages of these, and other, time biofuel production and that use of
in each parameter and the degree of periods. In addition, the Agency sought longer time periods gives more weight
correlation across parameters was comment on whether it is appropriate to to activities that are much more
utilized in Monte Carlo analysis to split the time period for GHG emissions uncertain, and that the 100 year
determine the overall uncertainty in our assessment based upon how long the timeframe is inappropriate because it is
emissions factor estimates. We used the biofuel would be produced (i.e., the much longer than the life of individual
Monte Carlo simulation to combine the project period) and the time period for biofuel plants.
emissions factor and satellite data which there would likely be GHG On the issue of whether to split the
uncertainty for every biofuel scenario emissions changes (i.e., the impact time period for GHG emissions analysis
analyzed. Uncertainty ranges varied period). To encourage expert and public into the project and impact periods,
across scenarios depending on the types comments on these issues, EPA held there was little support for the use of a
and locations of land use changes. For public hearings and workshops and split time frame for evaluating lifecycle
example, based on the sources of sponsored an expert peer review GHG emissions by the peer reviewers or
uncertainty analyzed, the 95% specifically focused on this topic. The in the public comments. The peer
confidence range for land use change expert input and comments that we reviewers thought that it would be
emissions (as a percent of the mean) was received included many valuable points difficult to find a scientific basis for
27% to +32% for base yield corn which guided our decisions about determining the length of the two
ethanol in 2022, and 56% to +76% for which time frame should be the focus of different time horizons. Also, splitting
base yield soy biodiesel in 2022.173 our analysis. Below we summarize some the time horizon would necessitate
More details about this uncertainty of the key arguments made by the peer consideration of the land use changes
analysis are provided in RIA Chapter 2. reviewers and commenters, and how following the end of the project time
these arguments factored into our choice horizon such as land reversion.
iv. Timeframe of Emission Analysis of analytical approach. However, the majority of expert peer
Based on input from the expert peer The expert peer reviewers discussed a reviewers did not think it was
review and public comments, EPA has number of justifiable time periods appropriate to attribute potential land
chosen to analyze lifecycle GHG ranging from 13 to 100 years for reversions, following the project time
emissions using a 30 year time period, assessing lifecycle GHG emissions. A frame, to a biofuels lifecycle.
over which emissions are not subset of the reviewers said that EPAs Based upon the comments discussed
discounted, i.e., a zero discount rate is analysis should be restricted to 2010 above, EPA has decided to use a 30 year
applied to future emissions. The input 2022 based on the years specified in frame for assessing the lifecycle GHG
we received and the reasons for our use EISA, because these reviewers argued emissions. There are several reasons
of this approach are described in this that EPA should not assume that biofuel why the 30 year time frame was chosen.
section. production will continue beyond 2022 The full life of a typical biofuel plant
As required by EISA, EPA must at the RFS2 levels. The reviewers said seems reasonable as a basis for the
determine whether biofuels reduce GHG that longer time frames, such as 100 timeframe for assessing the GHG
emissions by the required percentage years, were only appropriate if the emissions impacts of a biofuel, because
relative to the 2005 petroleum baseline. Agency used positive discount rates to it provides a guideline for how long we
In the proposal the Agency discussed a value future emissions. Almost all of the can expect biofuels to be produced from
number of accounting methods for peer reviewers said that a time frame of a particular entity using a specific
capturing the full stream of GHG 20 to 30 years would be a reasonable processing technology. Also, the 30 year
emissions and benefits over time. When timeframe for assessing lifecycle GHG time frame focuses on GHG emissions
accounting for the time profile of emissions. They gave several reasons for impacts that are more near term and,
lifecycle GHG emissions, two important why a short time period is appropriate: hence, more certain. We also
assumptions to consider are: (1) The This time frame is the average life of a determined that longer time periods
time period considered and (2) the typical biofuel production facility; were less appropriate because the peer
discount rate (which could be zero) future emissions are less certain and reviewers recommended that they
applied to future emissions streams. At more difficult to value, so the analysis should only be used in conjunction with
the time of proposal, EPA requested should be confined insofar as possible positive discount rates; but, for the
public comment on the choice of time to the foreseeable future; and a near- reasons discussed below, we are using
frames and discounting approaches for term time horizon is consistent with the a zero discount rate in our analysis. In
purposes of estimating lifecycle GHG latest climate science that indicates that addition, the 30 year time frame is
emissions. Also, as part of the peer relatively deep reductions of heat- consistent with responses of the peer
review process, EPA requested comment trapping gasses are needed to avoid reviewers that EPA should not split the
from expert peer reviewers on the catastrophic changes due to a warming time periods for analysis, or include
choice of the appropriate time frames climate. The peer reviewers suggested potential land reversions following the
and discount rates for the RFS2 that while there is no unassailable basis project time period in the biofuel
analysis. Below is a summary of the for choosing a precise timeframe the lifecycle.
expected average lifetime of a biofuel Discounting: In the RFS2 Proposal,
comments we received on these issues
production facility is the most sensible EPA highlighted two principal options
and how we address them in our
anchor for the choice of a timeframe. for discounting the lifecycle GHG
analytical approach.
There was support in the public emission streams from biofuels over
Time Period for Analysis: In the
comments for both the 30 year and 100 time. The first involved the use of a 2%
proposed rule, EPA highlighted two
year time frames. A number of public discount rate using the 100 year time
time periods, 30 years and 100 years, for
commenters supported the use of a 30 horizon for assessing lifecycle GHG
173 The 95% confidence range indicates there is year time period, or less, and made emissions streams. The second option
no more than a 5% chance the actual value is likely arguments similar to those of the expert involved using a 30 year time horizon
to be outside this range. peer reviewers. They argued that shorter for examining lifecycle GHG emissions
impacts. In the 30 year case, each GHG FAPRICARD as the primary tools for were within the range of values
emission is treated equally through evaluating whether individual biofuels projected by GTAP when normalized on
time, which implicitly assumes a zero meet the GHG thresholds, as part of the a per BTU basis, although there were
discount rate to GHG lifecycle emissions peer review process, we explicitly differences in the regional distribution
streams. The issue of whether to requested input on whether general of these changes. The land use changes
discount lifecycle GHG emissions was equilibrium (GE) models should be projected by GTAP were smaller than
raised as a topic that EPA sought used. None of the comments land use changes predicted by FAPRI
comment on in both the peer review recommended using a GE model as the CARD, which is primarily due to several
process and in public comments. sole tool for estimating GHG emissions, important differences in the modeling
EPA received numerous comments on given the limited details on the frameworks. First, the GTAP model
the issue of whether the Agency should agricultural sector contained in most GE incorporates a more optimistic view of
be discounting lifecycle GHG emissions models. The peer reviewers generally intensification options by which higher
through time. While many of peer supported the use of the FASOM and prices induced by renewable fuels
reviewers thought that current GHG FAPRICARD models for our GHG results in higher yields, not just for
emissions reductions should be more analysis given the need for additional corn, but also for other displaced crops.
strongly weighted than future detail offered in the PE models, however Second, the demands for other uses of
reductions, the peer reviewers were in several comments suggested
general agreement that a discount rate land are explicitly captured in GTAP.
incorporating GE models into the
should only be applied to a monetary Therefore, when land is withdrawn
analysis.
unit, rather than a physical unit, such as Given these recommendations, we from these uses, the prices of these
GHG emissions. Public commenters opted to use the GTAP model to inform products rise and provide a certain
suggested that discounting is an the range of potential GHG emissions amount of push-back on the
essential part of long term cost benefit associated with land use change conversion of land to crops from pasture
analysis but it is not necessary in the resulting from an increase in renewable or forest. Third, none of the peer-
context of the physical aggregation of fuels. As discussed in the NPRM, there reviewed versions of GTAP currently
lifecycle GHG emissions called for in are several advantages to using GTAP. contain unmanaged cropland, thereby
the EISA. Further, public commenters As a general equilibrium model, GTAP omitting additional sources of land.
expressed concerns that any discount captures the interaction between Finally, the GTAP model also predicted
rate chosen by the Agency would be different markets (e.g., agriculture and larger increases in forest conversion
based upon relatively arbitrary criteria. energy) in different regions. It is than the FAPRICARD/Winrock
After considering the comments on distinctive in estimating the complex analysis, in part because the GTAP
discounting from the peer review and international land use change through model includes only three types of land
the public, EPA has decided not to trade linkages. In addition, GTAP (i.e., crops, pasture, forest). As
discount (i.e., use a 0% discount rate) explicitly models land-use conversion discussed in the FAPRICARD/Winrock
GHG emissions due to the many issues decisions, as well as land management section, there are many other categories
associated with applying an economic intensification. Most importantly, in of land which may be converted to
concept to a physical parameter. First, it contrast to other models, GTAP is pasture and crop land.
is unclear whether EISA intended designed with the framework of As with all economic models, GTAP
lifecycle GHG emissions to be converted predicting the amount and types of land results are sensitive to certain key
into a metric whose underpinnings rest needed in a region to meet demands for parameter values. One advantage of this
on principals of economic valuation. A both food and fuel production. The framework is that it offers a readily
more literal interpretation of EISA is GTAP framework also allows usable approach to Systematic
that EPA should consider only physical predictions to be made about the types Sensitivity Analysis (SSA) using
GHG emissions. Second, even if the of land available in the region to meet efficient sampling techniques. We have
principle of tying GHG emissions to the needed demands, since it explicitly
exploited this tool in order to develop
economic valuation approaches were to represents different types of land cover
be accepted, there would still be the a set of 95% confidence intervals
within each Agro-Ecological Zone.
problem that there is a lack of consensus Like the peer reviewers, we felt that around the projected land use changes.
in the scientific community about the some of the drawbacks of the GTAP Several key parameters were identified
best way to translate GHG emissions model prevent us from using GTAP as that have a significant impact on the
into a proxy for economic damages. the sole model for estimating GHG land use change projections, including
Also, there is a lack of consensus as to emissions from biofuels. As discussed the yield elasticity (i.e., the change in
the appropriate discount rate to apply to in the NPRM, GTAP does not utilize yield that results from a change in that
GHG lifecycle emissions streams unmanaged cropland, nor is it able to commoditys price), the elasticity of
through time. Finally, since EPA has capture the long-run baseline issues transformation of land supply (i.e., the
decided to base threshold assessments (e.g., the state of the economy in 2022). measure of how easily land can be
of lifecycle GHG emissions on a 30 year For our analysis, the GTAP model was converted between forest, pasture, and
time frame, the issue of whether to most valuable for providing another crop land), and the elasticity of
discount GHG emissions is not as estimate of the quantity and type of land transformation of crop land (i.e., the
significant as if the EPA had chosen the conversion resulting from an increase in measure of how easily land can be
100 year time frame to assess GHG corn ethanol and biodiesel given the converted between crops). Although the
emissions impacts. More discussion of competition for land and other inputs confidence intervals are relatively large,
discount rates and their impact on the from other sectors of the economy. in most cases the ranges do not bracket
lifecycle results can be found in Chapter These results were therefore considered zero. Therefore, we conclude that the
2 of the RIA. as part of the weight of evidence when impacts of the corn ethanol and soybean
determining whether corn ethanol or biodiesel mandates on land use change
v. GTAP and Other Models biodiesel met the GHG thresholds. are statistically significant. These
Although we have used the partial The quantity of total acres converted confidence intervals also bracket the
equilibrium (PE) models FASOM and to crop land projected by FAPRICARD FAPRICARD results. Additional
information on the GTAP results is this issue and consider incorporating rule analysis which resulted in reduced
discussed in RIA Chapter 2. them in the future. GHG impacts from the biodiesel
production process.
c. Feedstock Transport d. Biofuel Processing In addition, for the final rule we have
To estimate the GHG impacts of For the proposal the GHG emissions included an analysis of algae oil
transporting corn from the field to an from renewable fuel production were production for biodiesel based on
ethanol production facility and calculated by multiplying the Btus of ASPEN process modeling from NREL.174
transporting the co-product DDGS from the different types of energy inputs at The analysis is for two major cultivation
the ethanol facility to the point of use, biofuel process plants by emissions pathways (open pond and
we used the method described in the factors for combustion of those fuel photobioreactors) for a facility that can
proposed rule. We also did not change sources. The Btu of energy input was be feasibly commercialized in the
our estimates for the transport of determined based on analysis of the future, represented by a 2022 target
cellulosic biofuel feedstock and industry and specific work done as part production. We coupled the algae oil
biomass-based diesel feedstock. of the NPRM. The emission factors for production process (which includes
For sugarcane transport, we received the different fuel types are from GREET cultivation, harvesting, and extraction)
the comment that the GREET defaults and were based on assumed carbon with the biodiesel production energy
used to estimate the energy contents of the different process fuels. use from virgin oils energy use model
consumption and associated GHG The emissions from producing under the assumption that algae oil is
emissions do not all reflect current electricity in the U.S. were also taken similar enough to that of virgin oil.
industry practices. To address this from GREET and represent average U.S. For the cellulosic biofuel pathways,
concern, we reviewed the current grid electricity production emissions. we updated our final rule energy
literature on sugarcane transport and We received comments on our consumption assumptions on process
updated our assumptions on the approach and updated the analysis of modeling also completed by NREL. For
distance sugarcane travels by truck from GHG emissions from biofuel process for the NPRM, NREL estimated energy use
the field to ethanol production facilities the final rule specifically regarding for the biochemical enzymatic process
as well as the payload and fuel economy process energy use and the treatment of to ethanol route in the near future
of those trucks. We incorporated these co-products. (2010) and future (2015 and
revised inputs into an updated version Process Energy Use: For the final rule 2022).175 176 177 As there are multiple
of the GREET model (Version 1.8c) in we updated each of our biofuel processing pathways for cellulosic
order to estimate the GHG impacts of pathways to include the latest data biofuel, we have expanded the analysis
sugarcane transport. More details on available on process energy use. For the for the FRM to also include
these updates can be found in Chapter proposal, one of the key sources of
thermochemical processes (Mixed-
2 of the RIA. information on energy use for corn
Alcohols route and Fischer-Tropsch to
In the proposal, we discussed ethanol production was a study from the
diesel route) for plants which assume
updating our analysis to incorporate the University of Illinois at Chicago Energy
woody biomass as its feedstock.
results of a recent study detailing Resource Center. Between proposal and Under the imported sugarcane ethanol
biofuel production locations and modes final rule, the study was updated, cases we updated process energy use
of transport. This study, conducted by therefore, we incorporated the results of assumptions to reflect anticipated
Oak Ridge National Laboratory, the updated study in our corn ethanol increases in electricity production for
modeled the transportation of ethanol pathways process energy use for the
2022 based on recent literature and
from production or import facilities to final rule. We also updated corn ethanol
comments to the proposal. One major
petroleum blending terminals. Since the production energy use for different
change was assuming the potential use
study did not explicitly address the technologies in the final rule based on
of trash (tops and leaves of sugarcane)
transport of biofuel feedstocks, we did feedback from industry technology
collection in future facilities to generate
not implement the results for this part providers as part of the public comment
additional electricity. The NPRM had
of the analysis. However, we did period. The main difference between
only assumed the use of bagasse for
incorporate the results into our proposal and final corn ethanol energy
electricity generation. Based on
assessment of the GHG impacts of fuel use values was a slight increase in
comments received, we are also
transportation. We will continue to energy use for the corn ethanol
assuming marginal electricity
examine whether our feedstock fractionation process, based on feedback
production (i.e., natural gas) instead of
transport estimates could be from industry technology providers.
For the proposal we based biodiesel average electricity mix in Brazil which
significantly improved by implementing
processing energy on a process model is mainly hydroelectricity. This
more detailed information on the
developed by USDAARS to simulate approach assumes surplus electricity
location of biofuel production facilities.
biodiesel production from the Fatty will likely displace electricity which is
We also discussed updating the
Acid Methyl Ester (FAME) normally dispatched last, in this case
transportation modes and distances
assumed for corn and DDGS to account transesterification process. We received 174 Davis, Ryan. November 2009. Techno-
for the secondary or indirect a number of comments from economic analysis of microalgae-derived biofuel
transportation impacts. For example, stakeholders that the energy balance for production. National Renewable Energy Laboratory
decreases in exports will reduce overall biodiesel production was overestimating (NREL)
175 Tao, Ling and Aden, Andy. November 2008.
domestic agricultural commodity energy use and should be updated.
Techno-economic Modeling to Support the EPA
transport and emissions but will During the comment period USDA
Notice of Proposed Rulemaking (NOPR). National

increase transportation of commodities updated their energy balance for Renewable Energy Laboratory (NREL).
internationally. We did not implement biodiesel production to incorporate a 176 Aden, Andy. September 2009. Mixed Alcohols
these secondary transportation impacts different biodiesel dehydration process from Woody Biomass2010, 2015, 2022. National
in this final rule. While we do not based on a system which has resulted in Renewable Energy Laboratory (NREL).
177 Davis, Ryan. August 2009. Techno-economic
anticipate that such impacts would a decrease in energy requirements. This analysis of current technology for Fischer-Tropsch
significantly change the lifecycle change was reflected in the energy use fuels. National Renewable Energy Laboratory
analysis, we plan to continue to look at values for biodiesel assumed in our final (NREL).
typically natural gas based electricity. glycerin market would still be saturated Initiative. We received several
The result of this change is a greater in 2022 and that glycerin produced from comments on the back-haul emissions
credit for displacing marginal grid biodiesel would not displace any associated with ocean transport. For the
electricity and thus a lower GHG additional petroleum glycerin final rule, we assumed that these
emissions profile for imported production. However, the biodiesel emissions were negligible.
sugarcane ethanol than that assumed in glycerin would not be a waste and a low f. Vehicle Tailpipe Emissions
the NPRM. We also received public value use would be to use the glycerin
comment that there are differences in as a fuel source. The fuel source We updated the CO2 emissions factors
the types of process fuel e.g. used in the assumed to be replaced by the glycerin for ethanol and biodiesel to be
dehydration process for ethanol. While is residual oil. This inclusion of a co- consistent with those used in the
using heavier fuels such as diesel or product credit for glycerin reduces the October 30, 2009 final rulemaking for
bunker fuel tends to increase the overall GHG impact of biodiesel the Mandatory GHG Reporting Rule.
imported sugarcane ethanol emissions compared to the proposal analysis. These changes caused the tailpipe GHG
profile, the overall impact was small emission factors to increase by 0.8% for
enough that lifecycle results did not e. Fuel Transportation ethanol and to decrease by 1.5% for
change dramatically. For the proposed rule, we estimated biodiesel. Specific tailpipe combustion
Co-Products: In response to comments the GHG impacts associated with the values used in this final rule can be
received, we included corn oil transportation and distribution of found in Chapter 2 of the RIA. Estimates
fractionation and extraction as a domestic and imported ethanol and for CH4 and N2O were made using
potential source of renewable fuels for biomass-based diesel using GREET outputs from EPAs MOVES model.
this final rulemaking. Based on research defaults. We have upgraded to the most 3. Petroleum Baseline
of various corn ethanol plant recent version of GREET (Version 1.8c)
technologies, corn oil as a co-product For the proposed rule, we conducted
for our transportation analysis in the
from dry mill corn ethanol plants can be an analysis to determine the lifecycle
final rule.178 We made several other
used as an additional biodiesel greenhouse gas emissions for the
updates to the method we utilized in the
feedstock source (see Section VII.A.2 for petroleum baseline against which
proposed rule. These updates are
additional information). Dry mill corn renewable fuels were to be compared.
described here and in more detail in
ethanol plants have two different We utilized the GREET model (Version
Chapter 2 of the RIA.
technological methods to withdraw corn 1.8b), which uses an energy efficiency
In the proposal, we noted our
oil during the ethanol production metric to calculate GHG emissions
intention to incorporate the results of a
process. The fractionation process associated with the production of
recent study by Oak Ridge National
withdraws corn oil before the petroleum-based fuels. We received
Laboratory (ORNL) into our
production of the DGS co-product. The numerous comments regarding this
transportation analysis for the final rule.
resulting product is food-grade corn oil. approach.
The ORNL study models the Petroleum baseline calculation from
The extraction process withdraws corn transportation of ethanol from refineries
oil after the production of the DGS co- proposed rule: The GREET model relies
or import facilities to the petroleum on using average values as inputs to
product, resulting in corn oil that is blending terminals by domestic truck,
only suitable for use as a biodiesel estimate aggregate emissions, rather
marine, and rail distribution systems. than using site-specific values.
feedstock. We used ORNLs transportation
Based on cost projections outlined in Commenters noted a number of GREET
projections for 2022 under the EISA input values that they believed to be
Section VII.A, it is estimated that by policy scenario to update our estimates
2022, 70% of dry mill ethanol plants incorrect. These included: energy
of the GHG impacts associated with the efficiency values for crude oil
will conduct extraction, 20% will
transportation of corn, cellulosic, and extraction; methane emission factors for
conduct fractionation, and that 10%
sugarcane ethanol. Since the study did oil production and flaring;
will choose to do neither. These
not address the distribution of ethanol transportation distances for crude oil
parameters have been incorporated into
from petroleum blending terminals to and petroleum products; and the oil
the FASOM and FAPRICARD models
refueling stations, we continued to use tanker cargo payload value. Commenters
for the final rulemaking analysis,
GREET defaults to estimate these also noted that GREET does not account
allowing for corn oil from extraction as
impacts. for the energy consumption associated
a major biodiesel feedstock.
Glycerin is a co-product of biodiesel The ORNL study also did not address with crude oil transport in the country
production. Our proposal analysis did the transportation of imported ethanol of extraction.
not assume any credit for this glycerin within its country of origin or en route In addition, commenters stated that
product. The assumption for the to the import facility in the United the crude oil import slate assumed in
proposal was that by 2022 the market States. As in the proposal, we used the proposed rule was inconsistent with
for glycerin would be saturated due to GREET defaults to estimate the impacts EIA crude oil production and import
the large increase in biodiesel associated with the transportation of data for 2005. Commenters also noted
production in both the US and abroad sugarcane ethanol within Brazil. We that the gasoline and diesel mix that we
and the glycerin would therefore be a updated the GREET default for the used for the proposal did not match
waste product. We received a number of average distance sugarcane ethanol with EIA prime supplier sales volume
comments that we should be factoring travels by ocean tanker using recent data. One specific comment focused on
in a co-product credit for glycerin as shipping data from EIA in order to the definition of low-sulfur diesel in
there would be some valuable use for account for both direct Brazilian exports GREET, where it is defined as being 11
this product in the market. Based on and the shipment of ethanol from ppm sulfur content, which is
these comments we have included for countries in the Caribbean Basin inconsistent with EPAs definition. As a
the final rule analysis that glycerin 178 The method used to estimate the GHG impacts
result, in the proposed rule, all
would displace residual oil as a fuel associated with biodiesel transportation has not
transportation diesel produced in 2005
source on an energy equivalent basis. been changed since the proposal. This method was assumed to be ultra-low sulfur
This is based on the assumption that the utilized an earlier version of the GREET model. diesel.
We largely agree with the above procedures). Unlike GREET, the NETL compared to the full petroleum
comments. An updated version of the study utilized site-specific data, such as lifecycle. More detail on this analysis
GREET model (Version 1.8c) is country-specific crude oil extraction can be found in Chapter 2 of the RIA.
available, and it may address some of profiles and port-to-port travel distances Consideration of marginal impacts:
the issues raised by commenters. We for imported crude oil and petroleum We received several comments stating
considered using this new version of products. The NETL model also that we did not use consistent system
GREET with updated input values from accounts for NGLs and unfinished oils boundaries in our comparisons of
publically available sources to as refinery inputs, which is not biofuels and petroleum-based fuels, in
determine the petroleum baseline for available in GREET. particular by using a marginal
the final rule. However, we have Thus, we believe that use of the NETL assessment of GHG emissions related to
decided that using the 2005 petroleum model addresses the commenters biofuel, but not doing so for baseline
baseline model developed by the concerns with the GREET inputs used in petroleum fuels. According to
National Energy Technology Laboratory the proposed rule. We have also verified commenters, by not assessing the
(NETL) 179 would address the that the NETL model uses a crude oil marginal impacts of petroleum
commenters concerns, and result in a input mix and gasoline and diesel production, we overestimated the GHG
more accurate and comprehensive product slate consistent with EIA data impacts of an increase in biofuel use in
assessment of the petroleum baseline for 2005. the proposed rule. Commenters argued
than we could obtain using the GREET For the final rule, we have also that a consistent modeling approach
model. updated the CO2 emissions factors to be would involve a marginal analysis for
Use of NETL study for final rule consistent with other EPA rulemakings. both biofuels and the petroleum
petroleum baseline calculation: In the EPA recently revised the CO2 emission baseline.
proposed rule, we requested comment factors for gasoline and diesel and used The reason the system boundaries
on using the NETL study for our 2005 them in the September 28, 2009
used for threshold assessment in the
petroleum baseline for the final proposed rule to establish GHG
proposed rule and the final rule did not
rulemaking. We only received one standards for light-duty vehicles. These
include a marginal analysis of
comment, which agreed that the NETL new factors are slightly lower than those
petroleum production was due to the
values were generally more accurate and used in the RFS2 proposal and result in
definition of baseline lifecycle
better documented than the values in a decrease in tailpipe GHG emissions of
greenhouse gas emissions in Section
GREET. However, the commenter also 0.4% for gasoline of 0.6% and for diesel.
Overall, with the switch to NETL and 211(o)(1)(C) of the CAA. The definitions
stated that NETLs use of 2002 crude oil of the different renewable fuel
the updated tailpipe values, the final
extraction data would underestimate categories specify that the lifecycle
petroleum baseline value calculated for
extraction emissions for 2005, and that threshold analysis be compared to
the final rule analysis does not differ
it would be inconsistent to use the baseline lifecycle greenhouse gas
significantly from what we calculated in
GREET model for determining GHG emissions, which are defined as:
the proposed rule.
emissions from biofuels, but not for Inclusion of estimate for land use The term baseline lifecycle greenhouse gas
petroleum. change: Numerous commenters raised emissions means the average lifecycle
We do not agree with the commenters greenhouse gas emissions, as determined by
the issue of land use change with regard
criticism of the NETL model. We have to oil production, both on a direct and the Administrator, after notice and
not seen data that indicates that the indirect basis. The proposed rule opportunity for comment, for gasoline or
GHG emissions associated with crude analysis for baseline petroleum diesel (whichever is being replaced by the
oil extraction would be appreciably renewable fuel) sold or distributed as
emissions did not consider any land use transportation fuel in 2005.
different in 2005 than 2002. EPA also change emissions associated with crude
believes that it is important to use the oil extraction. For the final rule, we do Therefore, the petroleum production
best available tools to estimate a not consider land use emissions component of the system boundaries is
petroleum baseline that can be associated with road or other specifically mandated by EISA to be
compared to renewable fuels. The fact infrastructure construction for based on the 2005 average for crude oil
that some GREET emission factors are petroleum extraction, transport, used to make gasoline or diesel sold or
used in the calculation of biofuel refining, or upgrading, as the land use distributed as transportation fuel, and
lifecycle GHG impacts is not a reason to change associated with roads not the marginal crude oil that will be
use the GREET model for the petroleum constructed for crop and livestock displaced by renewable fuel.
baseline analysis over what we feel to be production was also not included. Furthermore, as the EISA language
a better tool for the baseline calculation Furthermore, land use associated with specifies that the baseline emissions are
needed. natural gas extracted for use in oil sands to be only average lifecycle emissions
NETL states that the goal of their extraction or upgrading was also not for this single specified year and
study is to determine the life cycle considered, as the land use change from volume, it does not allow for a
greenhouse gas emissions for liquid natural gas extracted for biofuels comparison of alternative scenarios.
fuels (conventional gasoline, production was not considered. Indirect effects can only be determined
conventional diesel, and kerosene-based However, for the final rule we did using such an analysis; therefore there
jet fuel) production from petroleum as consider the inclusion of land use are no indirect emissions to include in
consumed in the U.S. in 2005 to allow emissions associated with oil extraction. the baseline lifecycle greenhouse gas
comparisons with alternative Using estimates for land-use change emissions.
transportation fuel options on the same from conventional oil production and On the other hand, assessing the
basis (i.e., life cycle modeling oil sands in conjunction with our data lifecycle GHG emissions of renewable
assumptions, boundaries, and allocation for the carbon intensity of land being fuel is not tied by statute to the 2005
179 Department of Energy: National Energy
developed, we were able to determine baseline and could therefore be based
Technology Laboratory. 2009. NETL: Petroleum-
GHG emissions associated with land use on a marginal analysis of anticipated
Based Fuels Life Cycle Greenhouse Gas Analysis change for oil production. Our analysis changes in transportation fuel as would
2005 Baseline Model. showed that the value was negligible result from meeting the EISA mandates.
Thus, Congress did not, as many EPA recognizes that the state of specific pathways for emerging biofuels
commenters suggested, intend to scientific knowledge in this area is that would use oil from algae as their
accomplish simply a reduction in GHG continuing to evolve, and that as the feedstock. Additional GHG performance
emissions as compared to the situation science evolves, the lifecycle assessment results for other feedstock/
that would exist in the future without greenhouse gas assessments for a variety fuel/technology combinations are also
enactment of EISA, as would be the case of fuel pathways will continue to described below as well as in the RIA
if Congress had specified that EPA use change. Therefore, while EPA is making Chapter 2.
a marginal analysis in assessing the regulatory determinations for fuel Below we consider the analytical
GHG emissions related to conventional pathways as required by the statute in results of scenarios and fuel pathways
baseline fuels that the EISA-mandated this final rule based on its current modeled by EPA as well as additional
biofuels would replace. Rather, the assessment, EPA is at the same time appropriate information to determine
statute specifies a logical approach for committing to further reassess these the threshold compliance for an array of
reducing the GHG emissions of determinations and the lifecycle biofuels likely to be produced in 2022.
transportation fuel as compared to those estimates. As part of the ongoing effort, Ethanol from corn starch: While EPA
emissions that occurred in 2005. we will ask for the expert advice of the
analyzed the lifecycle GHG performance
Therefore, EPA has retained in todays National Academy of Sciences as well
of a variety of ethanol from corn starch
final rule the basic analytical approach as other experts and then reflect this
pathways (complete results can be
(marginal analysis for biofuels and 2005 advice and any updated information in
found in the RIA), for purposes of this
average for baseline fuels) used in the a new assessment of the lifecycle GHG
threshold determination we have
proposed rule. emission performance of the biofuels
focused the discussion on the impacts of
being evaluated today. EPA will request
C. Threshold Determination and those plant designs that are most likely
that the National Academy of Sciences
Assignment of Pathways to be built in the future. We have
evaluate the approach taken in this rule,
As required by EISA, EPA is making focused this discussion on new plant
and the underlying science of lifecycle
a determination of lifecycle GHG assessment and in particular indirect designs because production from
emission threshold compliance for the land use change, and make existing plants is grandfathered for
range of pathways likely to produce recommendations for subsequent purposes of compliance with the 20%
significant volumes of biofuel for use in rulemakings on this subject. This new lifecycle GHG threshold. Only new
the U.S. by 2022. These threshold assessment could in some cases result in plants and expanded capacity at
assessments only pertain to biofuels new determinations of threshold existing plants need to comply with a
which are not produced in production compliance compared to those included 20% lifecycle GHG emissions threshold
facilities that are grandfathered in this rule which would apply to future to comply with the total renewable fuel
(grandfathering of production facilities production from plants that are mandate under the RFS2.
is discussed at the end of Section V.C). constructed after each subsequent rule. While we focus our lifecycle GHG
As described in Section I.A.3, because Nonetheless, EPA is required by EISA threshold analysis on the new plant
of the inherent uncertainty and the state to make threshold determinations at this designs most likely to be built through
of the evolving science on this issue, time as to what fuels qualify for each of 2022, we also note that some existing
EPA is basing its GHG threshold the four different fuel categories and plant designs, although subject to the
compliance determinations for this rule lifecycle GHG thresholds. In the grandfathering provisions, would not
on an approach that considers the previous sections, we have described qualify if having to meet the 20%
weight of evidence currently available. the analytical basis EPA is using for its performance threshold. For example,
For fuel pathways with a significant lifecycle GHG assessment. These existing designs of ethanol plants using
land use impact, the evidence analyses represent the most up to date coal as their process heat source would
considered includes the best estimate as information currently available on the not qualify.
well as the range of possible lifecycle GHG emissions associated with each As discussed in Section IV, EPA
greenhouse gas emission results based element of the full lifecycle assessment. anticipates that by 2022 any new dry
on formal uncertainty and sensitivity Notably these analyses include an mill plants producing ethanol from corn
analyses conducted by the Agency. In assessment of uncertainty for key starch will be equipped with more
making the threshold determinations for parameters of the pathways evaluated. energy efficient technology and/or
this rule, EPA weighed all of the The best estimates and ranges of results enhanced co-product production than
evidence available to it, while placing for the different pathways can be used todays average plant. These predictions
the greatest weight on the best estimate to help assess whether a particular are largely based on economic
value for the base yield scenario. In pathway should be considered as considerations. To compete
those cases where the best estimate for attaining the 20%, 50% or 60% economically, future ethanol plants will
the potentially conservative base yield thresholds, as applicable. The graphs need to employ energy saving
scenario exceeds the reduction included in the discussion below technologies and other value added
threshold, EPA judges that there is a provide representative depictions of the technologies that have the effect of also
good basis to be confident that the results of our analysis (including the reducing their GHG footprint. For
threshold will be achieved and is uncertainty in the modeling) for typical example, while only in limited use
determining that the bio-fuel pathway pathways for corn ethanol, biodiesel today, we predict approximately 90% of
complies with the applicable threshold. produced from soy oil and from waste all plants will be producing corn oil as
To the extent the midpoint of the oils, fats and greases, sugarcane ethanol a by-product either through a
scenarios analyzed lies further above a and cellulosic biofuel from switchgrass. fractionation or extraction process; it is
threshold for a particular biofuel We have also conducted lifecycle likely most if not all new plants will
pathway, we have increasingly greater modeling assessments for cellulosic elect to include such technology. We
confidence that the biofuel exceeds the biofuel pathways using other feedstock also predict that all will use natural gas,
threshold. sources, for biobutanol and for two biomass or biogas as the process energy
source.180 181 We also expect that, to GHG performance of the plant. The advanced technologies and operating
lower their operating costs, most current national average plant sells procedures is included in Table V.C6.
facilities will sell a portion of their co- approximately 37% of the DGS co- Figure V.C1 shows the percent
product DGS prior to drying thus product prior to drying. change in the lifecycle GHG emissions
reducing energy consumption and In analyzing the corn ethanol plant
designs we expect could be built compared to the petroleum gasoline
improving the efficiency and lifecycle
through 2022 using natural gas or baseline in 2022 for a corn ethanol dry
180 Dry mill corn ethanol plants using coal as a
biomass for process energy and mill plant using natural gas for its
process energy source would not qualify as employing advanced technology, in all process energy source, drying the
exceeding the 20% reduction threshold as modeled. national average of 63% of the DGS it
We do not expect plants relying on coal for process cases, the midpoint and therefore the
energy to be built through 2022. However, if they majority of the scenarios analyzed are produces and employing corn oil
were built, they would need to use technology above the 20% threshold. This indicates fractionation technology. Lifecycle GHG
improvements such as carbon capture and storage that, based on the current modeling emissions equivalent to the gasoline
(CCS) technology. We did not model what the
performance would be if these plants also installed approaches and sets of assumptions, we baseline are represented on the graph by
CCS technology. are over 50% confident the actual GHG the zero on the X-axis. The 20%
181 We do not believe new wet mill corn ethanol
performance of the ethanol from new reduction threshold is represented by
plants will be built through 2022 since this design corn ethanol plants will exceed the
is much more complicated and expensive than a
the dashed line at 20 on the graph.
dry mill plant. Especially since dry mill plants threshold of 20% improvement in The results for this corn ethanol
equipped with corn oil fractionation will produce lifecycle GHG emissions performance scenario are that the midpoint of the
additional supplies of food grade corn oil (one of compared to the gasoline it is replacing. range of results is a 21% reduction in
the products and therefore reasons to construct a We are determining at this time that
wet mill plant), we see no near term incentive for GHG emissions compared to the
additional wet mill ethanol production capacity. the corn ethanol produced at such new gasoline 2005 baseline. The 95%
However, we have modeled the lifecycle GHG plants (and existing plants with
confidence interval around that
impact of ethanol produced at a wet mill plant expanded capacity employing the same
when relying on biomass as the process energy midpoint ranges from a 7% reduction to
technology) will exceed the 20% GHG
source and have determined it would meet the 20%
performance threshold. A complete a 32% reduction compared to the
GHG threshold. Therefore, this type of facility is
also included in Table V.C6. listing of complying facilities using gasoline baseline.
Table V.C1 below includes lifecycle and energy use, rice methane) and modeled, the domestic results would
GHG emissions broken down by several livestock production. The fuel likely be significantly different.
stages of the lifecycle impacts for a production row includes emissions from The table includes our mean estimate
natural gas dry mill corn ethanol facility the fuel production or refining facility, of international land use change
as compared to the 2005 baseline primarily from energy consumption. For emissions as well as the 95%
average for gasoline. This table (and renewable fuels, tailpipe emissions only confidence range from our uncertainty
similar tables which follow in the include non-CO2 gases, because the assessment, which accounts for
discussion for other biofuels) is carbon emitted as a result of fuel uncertainty in the types of land use
included to transparently demonstrate combustion is offset by the uptake of changes and the magnitude of resulting
the contribution of each stage and their biogenic carbon during feedstock GHG emissions. The last row includes
relative significance. Lifecycle production. Note, that while the table mean, low and high total lifecycle GHG
emissions are normalized per energy separates the emissions into different emissions based on the 95% confidence
unit of fuel produced and presented in categories, the results are based on range for land use change emissions. For
kilograms of carbon-dioxide equivalent integrated modeling; therefore, one the petroleum baseline, the fuel
GHG emissions per million British component can not be removed without production stage includes emissions
Thermal Units of renewable fuel impacting the other results. For from extraction, transport, refining and
produced (kg CO2e/mmBTU). The example, domestic land use and distribution of petroleum transportation
domestic and international agriculture agricultural sector emissions depend on fuel. Petroleum tailpipe emissions
rows include emissions from changes in the international assumptions. If a case include CO2 and non-CO2 gases emitted
agricultural production (e.g., fertilizer without international impacts were from fuel combustion.
ER26MR10.424</GPH>
TABLE V.C1LIFECYCLE GHG EMISSIONS FOR CORN ETHANOL, 2022

[kg CO2e/mmBTU]
2005 Gaso-
Fuel type Ethanol line baseline
Fuel Production Technology ........................................................................................... Natural Gas Fired Dry Mill .........................
Net Domestic Agriculture (w/o land use change) ........................................................... 4 .................................................................
Net International Agriculture (w/o land use change) ...................................................... 12 ...............................................................
Domestic Land Use Change ........................................................................................... 2 ..............................................................
International Land Use Change, Mean (Low/High) ........................................................ 32 (21/46) ...................................................
Fuel Production ............................................................................................................... 28 ............................................................... 19
Fuel and Feedstock Transport ........................................................................................ 4 .................................................................
Tailpipe Emissions .......................................................................................................... 1 ................................................................. 79
Total Emissions, Mean (Low/High) ................................................................................. 79 (54/97) ................................................... 98
While we are projecting technology the base yield case, the midpoint and potential uses of glycerin, potential uses
enhancements which would allow corn therefore the majority of the scenarios of glycerin including as a feedstock to
ethanol plants to exceed the threshold, analyzed exceed the threshold. This the chemical industry could be higher
plant designs which do not include indicates that based on currently in GHG benefit than its assumed use as
such advanced technology would not available information and our current a heating fuel.
comply. For example, a basic plant analysis over the range of scenarios Considering all of the above current
which is not equipped with considered, the actual performance of information and analyses, EPA
combinations of advanced technologies soy oil-based biodiesel likely exceeds concludes that biodiesel made from soy
such as corn oil fractionation or dries the applicable 50% threshold. oil will exceed its lifecycle GHG
more than 50% of its DGS is predicted The scenarios analyzed also indicate, threshold. Further, we see no benefit in
to not comply. While we do not expect based on current data, we are at least lowering the threshold to as low as 40%
such a basic, low technology plant to be 95% confident biodiesel produced from as allowed under EISA as this will
built nor existing plants to expand their soy oil will have GHG impacts which neither benefit available supply nor
production without also installing such are better than the 2005 baseline diesel GHG performance of the fuel. Therefore,
advanced technology, if this were to fuel. From a GHG impact perspective, the threshold for this rule will be
occur, ethanol produced at such we therefore conclude that even in the maintained at 50%.
facilities would not comply with the less likely event the actual performance Figure V.C2 shows the percent
20% threshold. of biodiesel from soy oil does not change in the typical 2022 soybean
Biodiesel from soybean oil: We exceed the 50% threshold, GHG biodiesel lifecycle GHG emissions
analyzed the lifecycle GHG emission emission performance of transportation compared to the petroleum diesel fuel
impacts of producing biodiesel using fuel would still improve if this biodiesel 2005 baseline. Lifecycle GHG emissions
soy oil as a feedstock for compliance replaced diesel fuel. equivalent to the diesel fuel baseline are
with a lifecycle GHG performance We are further confident that represented on the graph by the zero on
threshold of 50%. The modeling biodiesel exceeds the 50% threshold the X-axis. The 50% reduction
framework for this analysis was much since our assessment of biodiesel GHG threshold is represented by the dashed
the same as used for the proposal. performance does not include any line at 50 on the graph. The results for
However, as noted above, based on prediction of significant improvements soybean biodiesel are that the midpoint
comments, updated information and in plant technology or unanticipated of the range of results is a 57%
enhanced models, the results are energy saving improvements that would reduction in GHG emissions compared
significantly updated. further improve GHG performance. to the diesel fuel baseline. The 95%
As in the case of ethanol produced Additionally, our assumption that the confidence interval around that
from corn starch, EPA has relied on a co-product of glycerin would only have midpoint results in range of a 22%
weight of evidence in developing its GHG value as replacement for residual reduction to an 85% reduction
threshold assessment for biodiesel heating oil could be conservative. While compared to the diesel fuel 2005
produced from soybean oil. In analyzing we have not analyzed the range of baseline.
Biodiesel from waste oils, fats and for biofuel from waste oils fats and proposal, biofuel from these feedstock
greases: The lifecycle assessment of greases is much the same as that sources easily exceeds the applicable
GHG performance for biodiesel analyzed for the proposal. As was the threshold of 50%.
produced from waste oils, fats and case for the proposal, the assessment of Table V.C2 below breaks down by
greases is much simpler than each element in the lifecycle process is
stage the lifecycle GHG emissions for
comparable assessments for biofuels straight forward and includes collecting
soy-based biodiesel, biodiesel from
made from crops. In the case of and transporting the feedstock,
biodiesel made from waste material, transforming it into a biofuel and waste grease feedstocks and the 2005
there is no land use impact so the distributing and using the fuel. Based on diesel baseline. The average 2022
agricultural assessments required for the lifecycle assessment for this final biodiesel production process reflected
crop-based biofuels are unnecessary. rule, we are estimating biofuel from in this table assumes that natural gas is
Without the uncertainty concerns due to waste oils, fats and greases result in an used for process energy and accounts for
land use impacts, there was no need to 86% reduction in GHG emissions co-product glycerin displacing residual
conduct an uncertainty analysis for compared to the 2005 baseline for oil. This table demonstrates the
biodiesel from waste oils, fats and petroleum diesel. As was the case for contribution of each stage and their
greases. The assessment methodology the assessment included in the relative significance.
TABLE V.C2LIFECYCLE GHG EMISSIONS FOR BIODIESEL, 2022

[kg CO2e/mmBTU]
Soy-based Waste grease 2005 Diesel

Fuel type biodiesel biodiesel baseline
Net Domestic Agriculture (w/o land use change) ........................................................................ 10 0

Net International Agriculture (w/o land use change) ................................................................... 1 0
Domestic Land Use Change ....................................................................................................... 9 0
International Land Use Change, ..................................................................................................
ER26MR10.425</GPH>
Mean (Low/High) ......................................................................................................................... 43 (15/76) 0
TABLE V.C2LIFECYCLE GHG EMISSIONS FOR BIODIESEL, 2022Continued

[kg CO2e/mmBTU]
Soy-based Waste grease 2005 Diesel

Fuel type biodiesel biodiesel baseline
Fuel Production ............................................................................................................................ 13 10 18

Fuel and Feedstock Transport .................................................................................................... 3 3
Tailpipe Emissions ....................................................................................................................... 1 1 79
Total Emissions, Mean ................................................................................................................

(Low/High) .................................................................................................................................... 42 (14/76) 14 97
Biodiesel from algae oil: We analyzed We also analyzed pathways assuming by EISA. If sugarcane ethanol was not
the lifecycle GHG emission impacts of the ethanol is distilled in Brazil or an eligible source of advanced biofuel
producing biodiesel from algae oil as a alternatively being distilled in the and other unanticipated sources did not
feedstock for compliance with a Caribbean. We did not analyze a high become available, the standard for
lifecycle performance threshold of 50%. yield case for sugarcane as we did for advanced biofuel would have to be
Our analyses were based on corn and soy since we had no lower to the extent necessary to
technoeconomic modeling completed by information available suggesting there compensate for the lack of eligible
NREL, as previously discussed. The could be an appreciable range in sugarcane ethanol. The lower amount of
NREL modeling included algae expected sugarcane yields. advanced biofuel would then most
cultivation, harvesting, extraction, and Based on the currently available likely be replaced with petroleum-based
recovery of algae oil. Algae oil is further information, the midpoint and thus the gasoline. The replacement fuel would
assumed to use the same oil to biodiesel majority of the scenarios analyzed have a worse GHG performance than the
production technology as soy oil, which exceed the 50% threshold applicable to sugarcane ethanol. Therefore, GHG
was updated based on enhanced advanced biofuels. This indicates that performance of the transportation fuel
models. As algae are expected to be based on currently available information pool would suffer.
grown on relatively small amounts of and our current analysis, it is more than Considering the above, EPA has
non-arable lands, it is expected that the 50% likely that the actual performance concluded that, based on currently
land use impact will be negligible. of ethanol produced from sugarcane
available information and our analysis,
Based on our current lifecycle exceeds the applicable 50% threshold.
ethanol from sugarcane qualifies as an
assessment of algae oil for the final rule, The analyses also indicate, based on
current data, ethanol produced from advanced biofuel.
we are determining that biodiesel from Figure V.C3 shows the percent
sugarcane will clearly have GHG
algae oil will comply with the lifecycle change in the average 2022 sugarcane
impacts which are better than the 2005
performance advanced biofuel threshold ethanol lifecycle GHG emissions
baseline gasoline. From a GHG impact
of 50%. compared to the petroleum gasoline
perspective, we therefore conclude that
Ethanol from sugarcane: As is the even in the less likely event the actual 2005 baseline. These results assume the
case for other crop-based biofuels, EPA performance of sugarcane does not ethanol is produced and dehydrated in
considered the weight of evidence exceed the 50% threshold, GHG Brazil prior to being imported into the
currently available information in emission performance of ethanol from U.S. Lifecycle GHG emissions
assessing the lifecycle GHG performance sugarcane would be better than gasoline. equivalent to the gasoline baseline are
of this fuel. As noted in Section I.A.3, We also considered what would represented on the graph by the zero on
this lifecycle GHG assessment includes happen if we determine that ethanol the X-axis. The 50% reduction
significant updates from the analysis from sugarcane does not comply with a threshold is represented by the dashed
performed for the proposal. We have 50% threshold due to the relatively low line at 50 on the graph. The results for
added pathways for sugarcane ethanol risk that this biofuel will actually be this sugarcane ethanol scenario are that
such that we now distinguish sugarcane below that threshold. Based on our the midpoint of the range of results is
ethanol produced assuming most crop current analysis of available pathways a 61% reduction in GHG emissions
residue (leaves and stalks) are collected for producing advanced biofuel, we compared to the gasoline baseline. The
and therefore available for burning as believe that it will be necessary to 95% confidence interval around that
process energy, or sugarcane produced include over 2 billion gallons of midpoint results in a range of a 52% to
without the extra crop residue being sugarcane ethanol in order to meet the 71% reduction compared to the gasoline
collected nor burned as process energy. advanced biofuel volumes anticipated 2005 baseline.
Table V.C3 below presents results for fuel production emissions include tables, domestic emissions include all
sugarcane ethanol production and use displacement of marginal Brazilian emissions sources in the United States,
by lifecycle stage. This table electricity because electricity is with all other emissionsincluding
demonstrates the contribution of each generated with the sugarcane bagasse emissions from Brazilpresented in the
stage and their relative significance. The co-product. As in similar previous international categories.
TABLE V.C3LIFECYCLE GHG EMISSIONS FOR SUGARCANE ETHANOL, 2022

[kg CO2e/mmBTU]
Sugarcane 2005 Gasoline

Fuel type ethanol baseline
Net Domestic Agriculture (w/o land use change) .................................................................................................. 0 0

Net International Agriculture (w/o land use change) ............................................................................................. 38 0
Domestic Land Use Change ................................................................................................................................. 1 0
International Land Use Change, Mean (Low/High) ............................................................................................... 4(5/12) 0
Fuel Production ...................................................................................................................................................... 11 19
Fuel and Feedstock Transport .............................................................................................................................. 5 0
Tailpipe Emissions ................................................................................................................................................. 1 79
Total Emissions, Mean (Low/High) ................................................................................................................ 38 (29/46) 98

Cellulosic Biofuels: In the proposal, proposed that such cellulosic biofuels considerably updated our lifecycle
we analyzed biochemical cellulosic met the required 60% lifecycle analysis, and have analyzed additional
ethanol pathways from both switchgrass threshold by a considerable margin. As cellulosic biofuel pathways (i.e.,
and corn stover, and on that basis described in Section V.B, we have thermochemical cellulosic ethanol and a
ER26MR10.426</GPH>
BTL diesel pathway). We analyzed the from switchgrass using the biochemical scenario are that the midpoint of the
GHG impacts of each element of the process compared to the petroleum range of results is a 110% reduction in
lifecycle for producing and using gasoline 2005 baseline. Lifecycle GHG GHG emissions compared to the
biofuels from cellulosic biomass, and as emissions equivalent to the gasoline gasoline baseline. The 95% confidence
for other fuel pathways, considered the baseline are represented on the graph by interval around that midpoint ranges
range of possible outcomes. the zero on the X-axis. The 60% from 102% reduction to a 117%
Figure V.C4 shows the percent reduction threshold is represented by reduction compared to the gasoline
change in the average lifecycle GHG the dashed line at 60 on the graph. baseline.
emissions in 2022 for ethanol produced The results for this switchgrass ethanol
Table V.C4 below shows lifecycle table is included to demonstrate the thermochemical production
GHG emissions for cellulosic ethanol contribution of each stage and their technologies. The fuel production
produced from switchgrass (as depicted relative significance. Results are emissions for the biochemical pathway
in Figure V.C4, above) and also corn presented for the biochemical include credit for excess electricity
residue by lifecycle stage, comparing production technology depicted in generation at the fuel production
these to the 2005 baseline gasoline. This Figure V.C4 above and also for facility.
TABLE V.C4LIFECYCLE GHG EMISSIONS FOR CELLULOSIC ETHANOL, 2022

[kg CO2e/mmBTU]
Fuel type Switchgrass ethanol Corn residue 2005 Gasoline

baseline
Fuel production technology Bio-chemical Thermo-chemical Bio-chemical Thermo-chemical
Net Domestic Agriculture (w/o land use

change) .............................................. 6 6 11 11 0
ER26MR10.427</GPH>
TABLE V.C4LIFECYCLE GHG EMISSIONS FOR CELLULOSIC ETHANOL, 2022Continued

[kg CO2e/mmBTU]
Fuel type Switchgrass ethanol Corn residue 2005 Gasoline

baseline
Fuel production technology Bio-chemical Thermo-chemical Bio-chemical Thermo-chemical
Net International Agriculture (w/o land

use change) ....................................... 0 0 0 0 0
Domestic Land Use Change .................. 2 3 11 11 0
International Land Use Change, Mean
(Low/High) .......................................... 15 (9/23) 16 1(9/24) 0 0 0
Fuel Production ...................................... 33 4 33 4 19
Fuel and Feedstock Transport ............... 3 3 2 2 0
Tailpipe Emissions ................................. 1 1 1 1 79
Total Emissions, Mean (Low/High) 10 (17/2) 27 (20/35) 29 7 98
Table V.C5 below presents lifecycle produced with a Fischer-Tropsch

GHG emissions for cellulosic diesel process by lifecycle stage.
TABLE V.C5LIFECYCLE GHG EMISSIONS FOR CELLULOSIC DIESEL, 2022

[kg CO2e/mmBTU]
Fuel type Switchgrass diesel Corn residue diesel

2005 Diesel baseline
Fuel production technology FT diesel FT diesel
Net Domestic Agriculture (w/o land use change) .............................................. 6 11 0

Net International Agriculture (w/o land use change) ......................................... 0 0 0
Domestic Land Use Change ............................................................................. 3 11 0
International Land Use Change, Mean (Low/High) ........................................... 16 (9/24) 0 0
Fuel Production .................................................................................................. 5 5 18
Fuel and Feedstock Transport .......................................................................... 3 2 0
Tailpipe Emissions ............................................................................................. 1 1 79
Total Emissions, Mean (Low/High) ............................................................ 29 (22/37) 9 97
Based on the currently available imported sugarcane ethanol from countries where the models predict
information, we conclude that all production in countries other than these biofuels might additionally be
modeled cellulosic biofuel pathways are Brazil. However, these rules do not produced, this would tend to lower our
expected to exceed the 60% threshold prohibit the use in the U.S. of these assessment of international indirect
applicable to cellulosic biofuels. fuels produced in countries not impacts but could increase our
Assessments of similar feedstock modeled if they are also expected to assessment of the domestic (i.e., the
sources: In the proposal, we indicated comply with the eligibility requirements country of origin) land use impacts. EPA
that although we did not specifically including meeting the thresholds for believes, because of these offsetting
analyze all potential feedstock sources, GHG performance. Although the GHG factors along with the small amounts of
some feedstock sources are similar emissions of producing these fuels from fuel potentially coming from other
enough to those modeled that we countries, that incorporating fuels
feedstock grown or biofuel produced in
believe the modeled results could be produced in other countries will not
other countries has not been specifically
extended to these similar feedstock impact our threshold analysis.
modeled, we do not anticipate their use
types. Comments received supported Therefore, fuels of the same fuel type,
this approach and the specific would impact our conclusions regarding
produced from the same feedstock using
recommendations for similar feedstock these feedstock pathways. The
the same fuel production technology as
designations as proposed. emissions of producing these fuels in modeled fuel pathways will be assessed
For this final rule, consistent with other countries could be slightly higher the same GHG performance decisions
what was proposed, we are relying on or lower than what was modeled regardless of country of origin.
modeling results and only expanding to depending on a number of factors. Our We are also able to conclude that
additional pathways where we have analyses indicate that crop yields for the some feedstock types not specifically
good information these additional crops in other countries where these modeled should be covered as we have
pathways will have lifecycle GHG fuels are also most likely to be produced good reason to believe their
results which either will not impact our are similar or lower than U.S. values performance would be better than the
overall assessment of the performance of indicating the same or slightly higher feedstock pathways modeled. Thus for
that fuel pathway or would have at least GHG impacts. Agricultural sector inputs example, we can conclude that, as in the
as good as the modeled pathways. The for the crops in these other countries are case of corn stover which we have
agricultural sector modeling used for roughly the same or lower than the U.S. modeled as a feedstock source,
our lifecycle analysis does not predict pointing toward the same or slightly cellulosic biofuel produced from other
any soybean biodiesel or corn ethanol lower GHG impacts. If crop production agricultural waste will also have no land
will be imported into the U.S., or any were to expand due to biofuels in the use impact and would be expected to
have lifecycle GHG emission impacts convert that feedstock into a biofuel. determined to meet the requirements of
similar enough to the modeled corn This has led us to conclude it is advanced biofuel.
stover feedstock pathway such that they reasonable to include a restricted set of While we have not been able to model
would also comply. Similarly, we have additional feedstocks in pathways all possible feedstocks that can and are
information on miscanthus indicating complying with the applicable being used for renewable fuel
that this perennial will yield more threshold. production, there are a variety of
feedstock per acre than the modeled The look-up table identifies a number feedstocks that should have similar
switchgrass feedstock without of individual fuel pathways that allow enough characteristics to those already
additional GHG inputs such as fertilizer. for the use of waste feedstocks. These modeled to allow them to be grouped in
Therefore we are concluding that since feedstocks include (1) waste ethanol with already modeled fuel pathways. In
cellulosic biofuel from switchgrass from beverage production, (2) waste particular, as discussed below, there are
complies with the cellulosic threshold starches from food production and five categories of biofuel feedstock
of 60% reduction, fuel produced using agricultural residues, (3) waste oils/fats/ sources for which we are confident, by
miscanthus and other perennial grasses greases, (4) waste sugar from food and virtue of their lack of any land-use
will also surely comply. beverage production, and (5) food and change impact, in qualifying them for
We are also determined that biofuel beverage production wastes. For the particular renewable fuel standards (D-
from separated yard and food wastes purpose of this rule only, EPA will codes) on the basis of our existing
consider these feedstocks to be wastes modeling.
(which may contain incidental and post-
if they are used as feedstock to produce 1. All crop residues which provide
recycled paper and wood wastes) satisfy
fuel, but would otherwise normally be starch or cellulosic feedstock. By virtue
biofuel thresholds. Separated food waste of the fact that they do not cause any
is largely starch-based and thus qualifies discarded or used for another secondary
purpose because they are no longer land-use change impacts, they should
for the advanced biofuel standard of all have similar lifecycle GHG impacts.
50% reduction. If the biofuel producer suitable for their original intended use.
They may be unsuitable for their Thus, modeling conducted for corn
can demonstrate that it is able to stover is being extended to other crop
quantify the cellulosic portion of food original intended use either because
residues such as wheat straw, rice straw,
wastes, fuel made from the cellulosic they are themselves waste from that
and citrus residue. These residues are
portion can qualify as cellulosic biofuel. original use (e.g., table scraps) or
what remains after a primary crop is
Since we have determined that yard because of contamination, spoilage or
harvested, and can be similarly
wastes are largely cellulosic, biofuel other unintentional acts. EPA will not
collected, transported and used in
from yard waste will qualify as consider any material that has been
biofuel production.
cellulosic biofuel. The use of separated intentionally rendered unsuitable for its 2. Slash, forest thinnings, and forest
yard and food wastes for biofuel original use to be a waste. residue providing cellulosic feedstock.
production including the requirements As discussed in more detail in Section As excess material, these represent
for demonstrating what portion of food II.B.4.d, EPA has also determined that another form of residue which should
waste is cellulosic feedstock is the biogenic portion of post recycled also result in no land-use change GHG
discussed further in Section II.B.4.d. MSW is eligible to produce renewable impacts. Their GHG emission impacts
EPA believes that renewable fuel fuel and will largely be made up of would only be associated with
produced from feedstocks consisting of cellulosic material. Therefore biofuel collection, transport, and processing
wastes that would normally be made from this waste-derived material into biofuel. Consequently, modeling
discarded or put to a secondary use, and will qualify as cellulosic biofuel. conducted for corn stover is also being
which have not been intentionally EPA has also considered biofuels extended to these residues.
rendered unfit for productive use, produced from annual cover crops such 3. Annual cover crops planted on
should be assumed to have little or no as cover crops grown in the winter. existing crop land such as winter cover
land use emissions of GHGs. The use of These annual cover crops are normally crops and providing cellulosic material,
wastes that would normally be planted as a rotation between primary starch or oil for biofuel production.
discarded does not increase the demand planted crops or between trees and While different from crop residues,
for land. For example, the use in biofuel vines in orchards and vineyards, these secondary crops also have no land
production of food waste from a food typically to protect soil from erosion, use impact since they are planted on
processing facility that would normally improve the soil between periods of land otherwise used for primary crop
be placed in a landfill will not increase regular crops, or for other conservation production. GHG emissions would only
the demand for land to grow the crops purposes. For annual cover crops grown be associated with growing, harvesting
that were purchased by the food on the same land as the primary crops, and transporting the secondary crop and
processing facility. Similarly, wastes we have determined that there is little then processing into biofuel. In the case
that would not normally be discarded or no land use impact such that the of secondary crops that might be used
because there are alternative secondary GHG emissions associated with them for cellulosic biofuel production, they
uses for them (for example would largely result due to inputs would also have no land-use change
contaminated vegetable oil might be required to grow the crop, harvesting impact, and consequently modeling
burned in a boiler) are not produced for and transporting to the biofuel conducted for corn stover is also being
the purpose of such secondary use and production facility, turning that extended to these crops. In the case of
the use of these feedstocks also does not feedstock into a biofuel and transporting secondary crops used for oil production,
increase demand for land. Since these it to its end use. As such, the biofuel they would then have no land-use
waste-derived feedstocks have little or from cellulosic biomass from annual change similar to waste fats, oils and
no land use impact, the lifecycle GHG cover crops are, for example, greases. Consequently, modeling
emissions associated with their use for determined to meet requirements of conducted for biodiesel and renewable
biofuel production are largely the result cellulosic biofuel, oil from annual cover diesel from these waste oils is also being
of the energy required to collect and crops are determined to meet the extended to these annual cover crops.
process the feedstock prior to requirements of renewable diesel and 4. Separated food and yard wastes,
conversion, and the energy required to starches from annual cover crops are including food and beverage wastes
from food production and processing as fertilizer per acre. We believe other facility using none of the advanced
are another category of waste product perennial grasses likely to compete as technologies listed in Table V.C6 will
that would not have any land-use feedstock sources will have similar land qualify as producing ethanol meeting
change impact. These waste products use and agricultural inputs are therefore the 20% performance threshold if it
can be used as feedstock for advanced confident the results from switchgrass sells at least 50% of its DGS prior to
biofuel production or cellulosic biofuel can be extended to miscanthus and drying.
production. Waste oils have already other perennial grasses. However, we
been modeled as complying with the note that the energy crop industry is just TABLE V.C6MODELED ADVANCED
biomass-based diesel standard. starting to develop and therefore as TECHNOLOGIES
Applying our sugarcane results without favored perennial grasses start to
the land-use change component to waste emerge, additional analyses may be Corn oil fractionation
sugars clearly demonstrates compliance warranted. Corn oil extraction
with the advanced biofuel threshold. Membrane separation
Applicable D-Codes for Fuel Raw starch hydrolysis
Applying our corn results without the Pathways: Based on the above, corn Combined heat and power
land-use component to waste starches ethanol facilities using natural gas or
clearly demonstrates compliance with biomass as the process energy source Following the criteria for D-Codes
the renewable fuel standard will meet the applicable 20% GHG defined in Section II.A1, the following
5. Perennial grasses including performance threshold if it either also renewable fuel pathways have been
switchgrass and miscanthus. We uses at least two of the technologies found to comply with the applicable
modeled switchgrass and miscanthus Table V.C6 or one of the technologies lifecycle GHG thresholds and are
has higher yield per acre without any in Table V.C6 but marketing at least therefore eligible for the D-Codes
significant (or perhaps less) inputs such 35% of its DGS as wet. Alternatively, a specified in Table V.C7.
TABLE V.C7D-CODE DESIGNATIONS

Production process
Fuel type Feedstock D-Code
requirements
Ethanol .................................................. Corn starch .......................................... All of the following: 6 (renewable fuel)
Drymill process, using natural gas,
biomass or biogas for process en-
ergy and at least two advanced
technologies from Table V.C6).
Dry mill process, using natural gas,
ergy and one of the advanced tech-
nologies from Table V.C6 plus dry-
ing no more than 65% of the DGS it
markets annually.
Dry mill process, using natural gas,
ergy and drying no more than 50%
of the DGS it markets annually.
Ethanol .................................................. Corn starch .......................................... Wet mill process using biomass or 6 (renewable fuel)
biogas for process energy.
Ethanol .................................................. Starches from agricultural residues; Fermentation using natural gas, bio- 6 (renewable fuel)
starches from annual cover crops. mass or biogas for process energy.
Biodiesel, and renewable diesel ........... Soy bean oil; One of the following: 4 (biomass-based
diesel)
Oil from annual cover crops ................ Trans-Esterification.
Algal oil ................................................ Hydrotreating.
Biogenic waste oils/fats/greases; Excluding processes that coprocess
renewable biomass and petroleum.
Non-food grade corn oil.
Biodiesel, and renewable diesel ........... Soy bean oil; One of the following: 5 (Advanced)
Oil from annual cover crops ................ Trans-Esterification.
Algal oil ................................................ Hydrotreating.
Biogenic waste oils/fats/greases; Includes only processes that co-
process renewable biomass and pe-
troleum.
Non-food grade corn oil.
Ethanol .................................................. Sugarcane ............................................ Fermentation (Any) .............................. 5 (Advanced)
Ethanol .................................................. Cellulosic Biomass from agricultural Any ....................................................... 3 (Cellulosic Biofuel)
residues, slash, forest thinnings, for-

est product residues, annual cover
crops, switchgrass and miscanthus;
cellulosic components of separated
yard wastes; cellulosic components
of separated food wastes; and cellu-
losic components of separated
MSW.
TABLE V.C7D-CODE DESIGNATIONSContinued

Production process
requirements
Cellulosic Diesel, Jet Fuel and Heating Cellulosic Biomass from agricultural Any ....................................................... 7 (Cellulosic Biofuel
Oil. residues, slash, forest thinnings, for- or Biomass-Based
est product residues, annual cover Diesel)
yard wastes, cellulosic components
of separated food wastes, and cellu-
MSW.
Butanol .................................................. Corn starch .......................................... Fermentation; dry mill using natural 6 (renewable fuel)
gas, biomass or biogas for process
energy.
Cellulosic Naphtha ................................ Cellulosic Biomass from agricultural Fischer-Tropsch process ..................... 3 (Cellulosic Biofuel)
residues, slash, forest thinnings, for-
est product residues, annual cover
yard wastes, cellulosic components
of separated food wastes, and cellu-
MSW.
Ethanol, renewable diesel, jet fuel, The non-cellulosic portions of sepa- Any ....................................................... 5 (Advanced)
heating oil, and naphtha. rated food wastes.
Biogas ................................................... Landfills, sewage and waste treatment Any ....................................................... 5 (Advanced)
plants, manure digesters.
Pathways for which we have not made In other cases, we have not modeled others. In all events, parties are
a threshold compliance decision: The the lifecycle GHG performance of expected to begin this process with
pathways identified in the Table V.C6 pathways because we did not have ample lead time as compared to their
represent those pathways we have sufficient information. For those fuel commercial start dates.
analyzed and determined meet the pathways that are different than those In addition to the technical
applicable thresholds as establish by pathways EPA has listed in todays information described below and listed
EISA. We did not analyze all pathways regulations, EPA is establishing a in todays regulations (see 80.1416), a
that might be feasible through 2022. In petition process whereby a party can petition must include all information
some cases, we did not have sufficient petition the Agency to consider new required in the registration process
time to complete the necessary lifecycle pathways for GHG reduction threshold except the engineering review. The
GHG impact assessment for this final compliance. The petition process is petition should demonstrate technical
rule. In addition to the pathways meant for parties with serious intention and commercial feasibility. For
identified in Table V.C6, EPA to moved forward with production via example, a petition could include
anticipates modeling grain sorghum the petitioned fuel pathway and who copies of applications for air or
ethanol, woody pulp ethanol, and palm have moved sufficiently forward in the construction permits, copies of blue
oil biodiesel after this final rule and business process to show feasibility of prints of the facility, or photographs of
including the determinations in a the fuel pathways implementation. The the facility or pilot plant. The petition
rulemaking within 6 months. Based on Agency will not consider frivolous must include information necessary to
current and projected commercial petitions with insufficient information allow EPA to effectively determine the
trends and the status of current analysis and clarity for Agency analysis. In lifecycle green house gas emissions of
at EPA, biofuels from these three addition, if the petition addresses a fuel the fuel. The petitioner must describe
pathways are either currently being pathway that already complies for one the alternative production facility
produced or are planned production in or more types of renewable fuels under technology applied and supply data
the near-term. Our analyses project that RFS (e.g., renewable fuel or advanced establishing the energy savings that will
they will be used in meeting the RFS2 biofuel), the pathway must have the result from the use of the alternative
volume standard in the near-term. potential to result in the pathway technology. The information required
During the course of the NPRM qualifying for a new renewable fuel would include, at a minimum, a mass
comment period, EPA received detailed category for which it was not previously and energy balance for the proposed
information on these pathways and is qualified. Thus, for example, the fuel production process. This would
currently in the process of analyzing Agency will not undertake any include for example, mass inputs of raw
these pathways. We have received additional review for a party wishing to material feedstocks and consumables,
comments on several additional get a modified LCA value for a mass outputs of fuel product produced
feedstock/fuel pathways, including previously approved fuel pathway if the as well as co-products and waste
rapeseed/canola, camelina, sweet desired new value would not change the materials production. Energy inputs
sorghum, wheat, and mustard seed, and overall pathway classification. EPA will information should include fuels used
we welcome parties to utilize the process these petitions as expeditiously by type, including purchased electricity.
petition process described below to as possible, taking into consideration If steam or hot water is purchased, the
request EPA to examine additional that some fuel pathways are closer to source and fuel required for its
pathways. the commercial production stage than generation would also be reported.
Energy output information should current assessments. We expect such a proposed, these producers could market
include energy content of the fuel determination would be pathway their fuel on the basis of temporarily
product produced (with heating value specific, and would be based on a assigned D-codes. While the objective
specified) as well as energy content of technical analysis that compared the was sound, EPA now believes it is best
any co-products. The petitioner should applicant fuel pathway to the fuel to to properly assure compliance with
also report the extent to which excess pathway(s) that had already been thresholds on the basis of completed
electricity is generated and distributed analyzed. In these cases, EPA would be lifecycle GHG assessments. As noted
outside the production facility. able to make a determination without above, the Agency commits to expedited
Information on co-products should proceeding through a full rulemaking assessment and rulemaking for those
include the expected use of the co- process. For example, petitions may pathways most likely to generate biofuel
products and their market value. All submit unique biofuel production in the immediate future, including
information should be provided in a facility configurations, operations, or co- ethanol produced from grain sorghum,
format such that it can be normalized on product pathways that could result in ethanol, woody pulp ethanol, and palm
a fuel output basis (for example, tons greater efficiencies than the pathways oil biodiesel. We also plan to continue
feedstock per gallon of fuel produced). modeled for this rulemaking, but to model additional pathways we expect
Other process descriptions necessary to otherwise do not differ greatly from the will be commercially available in the
understand the fuel production process modeled fuel pathways. In such cases, U.S. as soon as sufficient information is
should be included (e.g., process we would expect to make a decision for available to complete a quality lifecycle
modeling flowcharts). Any other that specific pathway without assessment. For these reasons, EPA is
relevant information, including that conducting a full rulemaking process. not finalizing a provision for assigning
pertaining to energy saving technologies We would expect to evaluate whether temporary D-codes.
or other process improvements that the pathway is consistent with the
D. Total GHG Reductions
document significant differences definitions of renewable fuel types in
between the fuel production processes the regulations, generally without going Similar to the analysis done in our
outlined in this rule and that used by through rulemaking, and issue an proposal, our analysis of the overall
the renewable fuel producer, should approval or disapproval that applies to GHG emission impacts of increased
also be submitted with the petition. the petitioner. We anticipate that we volumes of renewable fuel was
For fuel pathways that utilize will subsequently propose to add the performed in parallel with the lifecycle
feedstocks that have not yet been pathway to the regulations. analysis performed to develop the
modeled for this rulemaking, the If EPA determines that a petitioned individual fuel thresholds described in
petition must also submit information fuel pathway requires significant new previous sections. The same sources of
on the feedstock. Information would analysis and/or modeling, EPA will emissions apply such that this analysis
include, at a minimum, the feedstock need to give notice and seek public includes the effects of three main areas:
type and feedstock production source comment. For example, we anticipate (a) Emissions related to the production
and data on the market value of the that pathways with feedstocks or fuel of biofuels, including the growing of
feedstock and current uses of the types not yet modeled by EPA will feedstock (corn, soybeans, etc.) with
feedstock, if any. The petition should require additional modeling and public associated domestic and international
also include chemical input comment before a determination of land use change impacts, transport of
requirements (e.g., fertilizer, pesticides, compliance can be made. In these cases, feedstock to fuel production plants, fuel
etc.) and energy use in feedstock the determination would be production, and distribution of finished
production listed by type of energy. incorporated into the annual rulemaking fuel; (b) emissions related to the
Yield information would also be process established in todays extraction, production and distribution
required for both the current yields of regulations. of petroleum gasoline and diesel fuel
the feedstock as well as anticipated When EPA makes a technical that is replaced by use of biofuels; and
changes in feedstock yields over time. determination is made that a petitioned (c) difference in tailpipe combustion of
EPA will use the data supplied in the fuel pathway qualifies for a RFS volume the renewable and petroleum based
petition and other data and information standard, a D-code will be assigned to fuels.
available to the Agency to technically the fuel pathway. We anticipate that The main difference between the
evaluate whether the information is renewable fuel producers and importers results of the proposal analysis and the
sufficient for EPA to make a will be able to generate RINs for the final rule analysis are higher domestic
determination of the RFS standards for additional pathway after the next land use change emissions in the final
which the fuel pathway may qualify. If available update of the EPA Moderated rule analysis. As was the case in the
EPA determines that the petition is Transaction System (EMTS) that follows proposal, simply adding up the
insufficient for determination, the a determination. EPA expects to update individual lifecycle results determined
petitioner will be so notified. If EPA the EMTS quarterly, as long as in Section V.C. multiplied by their
determines it has been provided necessary. Renewable fuel producers respective volumes would yield a
sufficient data from the petitioner to will be able to register the fuel pathway different assessment of the overall
evaluate the fuel pathway, we will then through the EPA Fuels Programs impacts. The two analyses are separate
proceed with any analyses required to Registration System two weeks after the in that the overall impacts capture
make a technical determination of date of determination, but as described interactions between the different fuels
compliance. above, will not be able to generate RINs that can not be broken out into per fuels
EPA anticipates that for some until the quarterly EMTS update. impacts, while the threshold values
petitioned fuel pathways with unique In the proposal, we suggested a represent impacts of specific fuels but
modifications or enhancements to system of temporary D-codes for biofuel do not account for all the interactions.
production technologies of pathways pathways we had not analyzed. This While individual fuel analysis
otherwise modeled for the regulations was proposed as a means of assuring no generally had small domestic land use
listed today, EPA may be able to undue hardship for biofuel producers change emission impacts, the overall
evaluate the pathway as a reasonably using feedstock sources or processing impacts had larger domestic land use
straight-forward extension of our technologies not analyzed by EPA. As change emissions. The primary reason
for the difference in domestic land use climate change projections. GHGs mix MiniCAM was used to create the
change between the individual fuel well in the atmosphere and have long globally and temporally consistent set of
scenarios and the combined fuel atmospheric lifetimes, so changes in climate relevant variables required for
scenarios is that when looking at GHG emissions will affect future climate running MAGICC. MAGICC was then
individual fuels there is some for decades to centuries. Two common used to estimate the change in the global
interaction between different crops (e.g., indicators of climate change are global mean surface temperature over time.
corn replacing soybeans), but with mean surface temperature and global Given the magnitude of the estimated
combined volume scenario when all mean sea level rise. This section emissions reductions associated with
mandates need to be met there is less estimates the response in global mean the increased volumes of renewable
opportunity for crop replacement (e.g., surface temperature and global mean sea fuel, a simple climate model such as
both corn and soybean acres needed) level rise projections to the estimated MAGICC is reasonable for estimating the
and therefore more land is required. net global GHG emissions reductions climate response.
As discussed in previous sections on associated with increased volumes of EPA applied the estimated annual
lifecycle GHG thresholds there is an renewable fuel. GHG emissions changes for the final
initial one time release from land EPA estimated changes in projected
rule to a MiniCAM baseline emissions
conversion and smaller ongoing global mean surface temperatures to
scenario.184 Specifically, the CO2, N2O,
releases, but there are also ongoing 2050 using the MiniCAM (Mini Climate
and CH4 annual emission changes from
benefits of using renewable fuels over Assessment Model) integrated
20222052 from Section V.D were
time replacing petroleum fuel use. assessment model 182 coupled with the
applied as net reductions to this
Based on the volume scenario MAGICC (Model for the Assessment of
baseline scenario for each GHG.
considered, the one time land use Greenhouse-Gas Induced Climate
Change) simple climate model.183 Table V.E1 provides our estimated
change impacts result in 313 million
reductions in projected global mean
metric tons of CO2-eq. emissions
182 MiniCAM is a long-term, global integrated surface temperatures and mean sea level
increase. There are, however, based on assessment model of energy, economy, agriculture rise associated with the reductions in
the biofuel use replacing petroleum and land use, that considers the sources of GHG emissions due to the increase in
fuels, GHG reductions in each year. emissions of a suite of greenhouse gases (GHGs),
emitted in 14 globally disaggregated global regions renewable fuels in 2022. To capture
Totaling the emissions impacts over 30
(i.e., U.S., Western Europe, China), the fate of some of the uncertainty in the climate
years but assuming a 0% discount rate emissions to the atmosphere, and the consequences system, we estimated the changes in
over this 30 year period would result in of changing concentrations of greenhouse related
projected temperatures and sea level
an estimated total NPV reduction in gases for climate change. MiniCAM begins with a
representation of demographic and economic across the most current
GHG emissions of 4.15 billion tons over developments in each region and combines these Intergovernmental Panel on Climate
30 years. with assumptions about technology development to Change (IPCC) range of climate
This total NPV reduction can be describe an internally consistent representation of
energy, agriculture, land-use, and economic sensitivities, 1.5 C to 6.0 C.185 To
converted into annual average GHG
developments that in turn shape global emissions. illustrate the time profile of the
reductions, which can be used for the Brenkert A, S. Smith, S. Kim, and H. Pitcher, 2003: estimated reductions in projected global
calculations of the monetized GHG Model Documentation for the MiniCAM. PNNL
mean surface temperatures and mean
benefits as shown in Section VIII.C.3. 14337, Pacific Northwest National Laboratory,
Richland, Washington. For a recent report and sea level rise, we have also provided
This annualized value is based on
detailed description and discussion of MiniCAM, Figures V.E1 and V.E2.
converting the lump sum present values see Clarke, L., J. Edmonds, H. Jacoby, H. Pitcher, J.
described above into their annualized Reilly, R. Richels, 2007. Scenarios of Greenhouse 184 The reference scenario is the MiniCAM
equivalents. A comparable value Gas Emissions and Atmospheric Concentrations. reference (no climate policy) scenario used as the
assuming 30 years of GHG emissions Sub-report 2.1A of Synthesis and Assessment basis for the Representative Concentration Pathway
Product 2.1 by the U.S. Climate Change Science RCP4.5 using historical emissions until 2005. This
changes, but not applying a discount Program and the Subcommittee on Global Change scenario is used because it contains a
rate to those emissions results in an Research. Department of Energy, Office of comprehensive suite of greenhouse and pollutant
estimated annualized average emission Biological & Environmental Research, Washington, gas emissions including carbonaceous aerosols. The
DC., USA, 154 pp.
reduction of approximately 138 million 183 MAGICC consists of a suite of coupled gas-
four RCP scenarios will be used as common inputs
metrics tons of CO2-eq. emissions. into a variety of Earth System Models for inter-
cycle, climate and ice-melt models integrated into model comparisons leading to the IPCC AR5 (Moss
We also considered the uncertainty in a single framework. The framework allows the user et al. 2008). The MiniCAM RCP4.5 is based on the
the international land use change to determine changes in GHG concentrations, scenarios presented in Clarke et al. (2007) with non-
emission estimates for the overall global-mean surface air temperature and sea-level
CO2 and pollutant gas emissions implemented as
resulting from anthropogenic emissions of carbon
impacts. Based on the range of results dioxide (CO2), methane (CH4), nitrous oxide (N2O),
described in Smith and Wigley (2006). Base-year
for the international land use change information has been updated to the latest available
reactive gases (e.g., CO, NOX, VOCs), the
data for the RCP process.
emissions the overall annualized halocarbons (e.g. HCFCs, HFCs, PFCs) and sulfur
185 In IPCC reports, equilibrium climate
dioxide (SO2). MAGICC emulates the global-mean
average emission reductions of temperature responses of more sophisticated sensitivity refers to the equilibrium change in the
increased volumes of renewable fuel coupled Atmosphere/Ocean General Circulation annual mean global surface temperature following
could range from 136 to 140 million Models (AOGCMs) with high accuracy. Wigley, a doubling of the atmospheric equivalent carbon
T.M.L. and Raper, S.C.B. 1992. Implications for dioxide concentration. The IPCC states that climate
metrics tons of CO2-eq. emissions. sensitivity is likely to be in the range of 2 C to
Climate and Sea-Level of Revised IPCC Emissions
E. Effects of GHG Emission Reductions Scenarios Nature 357, 293300. Raper, S.C.B., 4.5 C and described 3 C as a best estimate. The
Wigley T.M.L. and Warrick R.A. 1996. In Sea-Level IPCC goes on to note that climate sensitivity is very
and Changes in Global Temperature unlikely to be less than 1.5 C and values
Rise and Coastal Subsidence: Causes, Consequences
and Sea Level and Strategies J.D. Milliman, B.U. Haq, Eds., Kluwer substantially higher than 4.5 C cannot be
Academic Publishers, Dordrecht, The Netherlands, excluded. IPCC WGI, 2007, Climate Change 2007
The reductions in CO2 and other pp. 1145. Wigley, T.M.L. and Raper, S.C.B. 2002. The Physical Science Basis, Contribution of
GHGs associated with increased Reasons for larger warming projections in the IPCC Working Group I to the Fourth Assessment Report
volumes of renewable fuel will affect Third Assessment Report J. Climate 15, 29452952. of the IPCC, http://www.ipcc.ch/.
TABLE V.E1ESTIMATED REDUCTIONS IN PROJECTED GLOBAL MEAN SURFACE TEMPERATURE AND GLOBAL MEAN SEA
LEVEL RISE FROM BASELINE IN 20202050
Climate sensitivity
1.5 2 2.5 3 4.5 6
Year Change in global mean surface temperatures (degrees Celsius)
2020 ......................................................................................................... 0.000 0.000 0.000 0.000 0.000 0.000

2025 ......................................................................................................... 0.000 0.000 0.000 0.000 0.000 0.000
2030 ......................................................................................................... 0.000 0.000 0.000 0.000 0.000 0.000
2035 ......................................................................................................... 0.001 0.001 0.001 0.001 0.001 0.001
2040 ......................................................................................................... 0.001 0.001 0.001 0.001 0.001 0.001
2045 ......................................................................................................... 0.001 0.001 0.001 0.001 0.002 0.002
2050 ......................................................................................................... 0.001 0.001 0.002 0.002 0.002 0.002
Year Change in global mean sea level rise (centimeters)
2020 ......................................................................................................... 0.000 0.000 0.000 0.000 0.000 0.000

2025 ......................................................................................................... 0.000 0.000 0.000 0.000 0.000 0.000
2030 ......................................................................................................... 0.001 0.001 0.001 0.001 0.001 0.001
2035 ......................................................................................................... 0.002 0.002 0.002 0.003 0.003 0.003
2040 ......................................................................................................... 0.003 0.004 0.004 0.005 0.005 0.006
2045 ......................................................................................................... 0.005 0.006 0.006 0.007 0.008 0.009
2050 ......................................................................................................... 0.006 0.008 0.009 0.009 0.011 0.012
The results in Table V.E1 and concentrations. The air quality impacts, analysis are the impacts of reduced
Figures V.E1 and V.E2 show small however, are highly variable from region gasoline and diesel refining as these
reductions in the global mean surface to region. Ambient PM2.5 is likely to fuels are displaced by biofuels.
temperature and sea level rise increase in areas associated with biofuel Emission impacts of tailpipe and
projections across all climate production and transport and decrease evaporative emissions for on and off
sensitivities. Overall, the reductions are in other areas; for ozone, many areas of road sources have been estimated by
small relative to the IPCCs best the country will experience increases incorporating per vehicle fuel effects
estimate temperature increases by 2100 and a few areas will see decreases. from recent research into mobile source
of 1.8 C to 4.0 C.186 Although IPCC Ethanol concentrations will increase emission inventory estimation methods.
does not issue best estimate sea level substantially; for the other modeled air
rise projections, the model-based range toxics there are some localized impacts, In the proposal we analyzed a single
across SRES scenarios is 18 to 59 cm by but relatively little impact on national renewable fuel volume scenario, largely
2099.187 While the distribution of average concentrations. dependent on ethanol, relative to three
potential temperatures in any particular different reference cases, including the
A. Overview of Emissions Impacts RFS1 base case. For todays rule we are
year is shifting down, the shift is not
uniform. The magnitude of the decrease Todays action will affect the presenting emission impacts for three
is larger for higher climate sensitivities. emissions of criteria pollutants (those fuel volume scenarios relative to two
The same pattern appears in the pollutants for which EPA has reference cases (RFS1 mandate and
reductions in the sea level rise established a National Ambient Air AEO) to show a range of the possible
projections. Thus, we can conclude that Quality Standard has been established), effects of biofuels depending on the
the impact of increased volumes of criteria pollutant precursors,188 and air relative quantities of various biofuels
renewable fuel is to lower the risk of toxics, which may affect overall air that may be used to meet the overall
climate change, as the probabilities of quality and health. Emissions are renewable fuel requirements. We have
temperature increase and sea level rise affected by the processes required to also updated our modeling for the RFS1
are reduced. produce and distribute large volumes of
mandate reference case to better reflect
biofuels required by todays action and
VI. How Would the Proposal Impact the emissions for this case. Table VI.A
the direct effects of these fuels on
Criteria and Toxic Pollutant Emissions vehicle and equipment emissions. As 1 shows the fuel volumes for the two
and Their Associated Effects? detailed in Chapter 3 of the Regulatory reference cases and all three control
This section presents our assessment Impact Analysis (RIA), we have scenarios. Further discussion of these
of the changes in emissions and air estimated emissions impacts of fuel volumes and the subcategories
quality resulting from the increased production and distribution-related within each are available in Section
renewable fuel volumes needed to meet emissions using the life cycle analysis IV.A. The emission impacts of the
the RFS2 standards. Increases in methodology described in Section V primary control scenario (22.2 Bgal of
emissions of hydrocarbons, nitrogen with emission factors for criteria and ethanol) are presented here relative to
oxides, particulate matter, and other toxic emissions for each stage of the life both reference cases. The corresponding
pollutants are projected to lead to cycle, including agriculture, feedstock results for all three control cases are
increases in population-weighted transportation, and the production and available in Chapter 3 of the Regulatory
annual average ambient PM and ozone distribution of biofuel; included in this Impact Analysis for this rule.
186 IPCC WGI, 2007. report does not assess the likelihood, nor provide 188 NO and VOC are precursors to the criteria
X
187 Because understanding of some important a best estimate or an upper bound for sea level rise. pollutant ozone; we group them with criteria
effects driving sea level rise is too limited, this IPCC Synthesis Report, p. 45. pollutants in this chapter for ease of discussion.
TABLE VI.A1RENEWABLE FUEL VOLUMES FOR EACH REFERENCE CASE AND CONTROL SCENARIO
[Bgal/year in 2022]
Ethanol Renewable Cellulosic

Scenario Biodiesel diesel diesel
Corn Cellulosic Imported Total
RFS1 Ref ................................................. 7.046 0.0 0.0 7.046 0.303 0.0 0.0
AEO Ref ................................................... 12.29 0.25 0.64 13.18 0.38 0.0 0.0
Low Ethanol ............................................. 15.0 0.25 2.24 17.49 1.67 0.15 9.26
Mid Ethanol (Primary) .............................. 15.0 4.92 2.24 22.16 1.67 0.15 6.52
High Ethanol ............................................ 15.0 16.0 2.24 33.24 1.67 0.15 0.0
There have been a number of other vapor emissions during ethanol for the proposal and negligible impact
enhancements and corrections to the transport, made possible by a detailed used in the air quality analyses.
non-GHG emission inventory estimates analysis of costs and transport modes Analysis of criteria and toxic emission
since the NPRM, some of which were conducted by Oak Ridge National impacts was performed for calendar
included in the air quality modeling Laboratory (ORNL).189 This change year 2022, since this year reflects the
inventories, while others occurred later alone more than doubled the predicted full implementation of todays rule. Our
than that. The major changes are overall increase in ethanol emissions 2022 projections account for projected
mentioned here, and all the significant from the increased use of renewable growth in vehicle travel and the effects
changes are explained in detail in fuels, increasing the VOC enough to of applicable emission and fuel
Chapter 3 of the RIA. change the overall VOC impact from a economy standards, including Tier 2
One significant change relates to the decrease to a substantial increase. and Mobile Source Air Toxics (MSAT)
downstream vehicle and equipment Significant updates have also been rules for cars and light trucks and
emission impacts of using the increased made to emissions from cellulosic recently finalized controls on spark-
proportions of renewable fuels. In the biofuel plants, in part to reflect the ignited off-road engines.
proposal we provided two different assumed shift in volumes from The analysis presented here provides
analyses based on two different cellulosic ethanol to diesel between the estimates of the change in national
assumptions regarding the effects of E10 proposed and final rules. For cellulosic emission totals that would result from
and E85 versus E0 on exhaust emissions ethanol plants, after the air quality the increased use of renewable fuels to
from cars and trucks. Those were modeling was done we discovered that meet the statutory requirements of EISA.
referred to as less sensitive and more the calculation of emissions from these These totals may not be a good
sensitive cases. Based on analysis of plants had been overestimated due to indication of local or regional air quality
recent emissions test data conducted failing to account for the portion of and health impacts. These results are
since publication of the NPRM, we are biomass that is not used for process aggregated across highly localized
modeling a single case. As detailed in energy. This change decreases the sources, such as emissions from ethanol
Section VI.C, the case modeled for the estimated NOX and CO impacts, and plants and evaporative emissions from
final rule is a hybrid approach, applying shifts the PM impact of these plants cars, and reflect offsets such as
more sensitive impacts for E10 and from an increase to a small decrease. decreased emissions from gasoline
pre-Tier 2 light duty vehicles, and However, these changes are refineries. The location and composition
applying the less sensitive E10 effects counterbalanced by varying degrees by of emissions from these disparate
for Tier 2 light duty cars and trucks, shifting some of the cellulosic volume sources may strongly influence the air
which means no impact for NOX or non- from ethanol to diesel, which requires quality and health impacts of the
methane hydrocarbons (NMHC). We nearly twice the biomass as needed by increased use of renewable fuels, so full-
have also updated our estimates of ethanol to produce one gallon. While scale photochemical air quality
evaporative permeation impacts of E10 the net effect of the changes in modeling was also performed to
based on recent studies. Finally, for the cellulosic plant emissions is a decrease accurately assess this. These localized
final rule inventories we are only in NOX and CO emission impacts impacts are discussed in Section VI.D.
claiming emission effects with use of relative to the proposal, the shift to Our projected emission impacts for
E85 in flex-fueled vehicles relative to E0 cellulosic diesel under the primary the primary renewable fuel scenario
for two pollutants: ethanol and scenario results in a larger increase in relative to the two reference cases are
acetaldehyde, for which data suggests upstream PM emissions than reported shown in Table VI.A2 for 2022. This
the effects are more certain. For the in the NPRM or used in the air quality shows the expected emission changes
more sensitive case presented in the analysis. for the U.S. in that year, and the percent
NPRM, and used in the air quality Updates to agricultural modeling contribution of this impact relative to
modeling, we had estimated changes to assumptions made between proposal the total U.S. inventory. Overall we
additional pollutants (including and final had a significant impact on project that increases in the use of
significant PM reductions) based on ammonia (NH3) emissions. Final renewable fuels will result in significant
some very limited data. Until such time modeling reflects an increase in increases in ethanol and acetaldehyde
as additional data is collected to fertilizer use with the primary control emissionsincreasing the total U.S.
enhance this analysis it is premature to case, which results in a 1.2 percent inventories of these pollutants by 1618
use such assumptions. increase in NH3 emissions, a change percent in 2022 relative to the RFS1
For upstream emissions associated from the 0.5 percent decrease projected mandate case. We project more modest
with fuel production and distribution, 189 Analysis of Fuel Ethanol Transportation
increases in NOX, HC, PM,
the largest change that was included in Activity and Potential Distribution Constraints,
formaldehyde, 1,3-butadiene, acrolein,
the air quality modeling was the Oak Ridge National Laboratory, U.S. Department of and ammonia (NH3) relative to the RFS1
improved estimate of VOC and ethanol Energy, March 2009. mandate case. We project a 5 percent
decrease in CO (due to impacts of displacement of gasoline with ethanol similar directionally, but smaller in
ethanol on exhaust emissions from in the fuel pool). Impacts on SO2 and magnitude due to the less drastic
vehicles and nonroad equipment), and a naphthalene are much smaller. Relative differences in fuel volumes.
2.4 percent decrease in benzene (due to to the AEO reference case the results are
TABLE VI.A2TOTAL COMBINED UPSTREAM AND DOWNSTREAM EMISSION IMPACTS IN 2022 FOR PRIMARY SCENARIO
RELATIVE TO EACH REFERENCE CASE
RFS1 Mandate AEO
Pollutant Annual short % of total U.S. Annual short % of Total
tons inventory tons U.S. inventory
NOX .................................................................................................................. 247,604 1.95 184,820 1.45

HC .................................................................................................................... 100,762 0.87 24,523 0.21
PM10 ................................................................................................................. 69,013 1.92 63,323 1.76
PM2.5 ................................................................................................................ 15,549 0.46 14,393 0.42
CO .................................................................................................................... 2,869,842 5.30 376,419 0.69
Benzene ........................................................................................................... 4,264 2.41 1,004 0.57
Ethanol ............................................................................................................. 100,123 18.20 54,137 9.84
1,3Butadiene .................................................................................................. 224 1.70 59 0.45
Acetaldehyde ................................................................................................... 5,848 15.80 3,108 8.40
Formaldehyde .................................................................................................. 355 0.48 130 0.17
Naphthalene ..................................................................................................... 1 0.01 4 0.03
Acrolein ............................................................................................................ 22 0.38 21 0.35
SO2 .................................................................................................................. 3,286 0.04 5,065 0.06
NH3 .................................................................................................................. 48,711 1.15 48,711 1.15
The breakdown of these results by the particular, the modeling of the benzene, 1,3-butadiene, formaldehyde,
fuel production/distribution (well-to- agriculture sector was greatly expanded acetaldehyde, acrolein and naphthalene.
pump emissions) and vehicle and beyond the RFS1 analysis, employing Results of these calculations relative
equipment (pump-to-wheel) emissions economic and agriculture models to to each reference case in 2022 are
is discussed in the following sections. consider factors such as land-use shown in Table VI.B1 for the criteria
impact, agricultural burning, fertilizer, pollutants, ammonia, ethanol and
B. Fuel Production & Distribution
pesticide use, livestock, crop allocation, individual air toxic pollutants. Due to
Impacts of the Proposed Program
and crop exports. the complex interactions involved in
Fuel production and distribution Other updates and enhancements to projections in the agricultural modeling,
emission impacts of the increased use of the GREET model assumptions include we did not attempt to adjust the
renewable fuels were estimated in updated feedstock energy requirements agricultural inputs of the AEO reference
conjunction with the development of and estimates of excess electricity case for the RFS1 mandate reference
life cycle GHG emission impacts and the available for sale from new cellulosic case. So the fertilizer and pesticide
GHG emission inventories discussed in ethanol plants, based on modeling by quantities, livestock counts, and total
Section V. These emissions are the National Renewable Energy agricultural acres were the same for both
calculated according to the breakdowns Laboratory (NREL). Per-gallon emission reference cases. The agricultural
of agriculture, feedstock transport, fuel factors for new corn ethanol plants were modeling that had been done for the
production, and fuel distribution; the updated based on EPA analysis of RFS1 rule itself was much simpler and
basic calculation is a function of fuel energy efficiency technologies currently inconsistent with the new modeling, so
volumes in the analysis year and the available (such as combined heat and it would be inappropriate to use those
emission factors associated with each power) and their expected market estimates.
process or subprocess. Additionally, the penetrations. There are no new The fuel production and distribution
emission impact of displaced petroleum standards planned at this time that impacts of the increased use of
is estimated, using the same domestic/ would offer any additional control of renewable fuels on VOC are mainly due
import shares discussed in Section V emissions from corn or cellulosic to increases in emissions connected
above. ethanol plants. EPA also updated the with biofuel production, countered by
In general the basis for this life cycle fuel and feedstock transport emission decreases in emissions associated with
evaluation was the analysis conducted factors to account for recent EPA gasoline production and distribution as
as part of the Renewable Fuel Standard emission standards and modeling, such ethanol displaces some of the gasoline.
(RFS1) rulemaking, but enhanced as the locomotive and commercial Increases in PM2.5, SOX and especially
significantly. While our approach for marine standards finalized in 2008, and NOX are driven by stationary
the RFS1 was to rely heavily on the revised heavy-duty truck emission rates combustion emissions from the
Greenhouse Gases, Regulated contained in EPAs draft MOVES2009 substantial increase in corn and
Emissions, and Energy Use in model. EPA also modified the ethanol cellulosic ethanol production. Biofuel
Transportation (GREET) model, transport distances based on a detailed plants (corn and cellulosic) tend to have
developed by the Department of analysis of costs versus transport mode greater combustion emissions relative to
Energys Argonne National Laboratory conducted by Oak Ridge National petroleum refineries on a per-BTU of
(ANL), we are now able to take Laboratory. In addition, GREET does not fuel produced basis. Increases in SOX
advantage of additional information and include air toxics or ethanol. Thus emissions are also due to increases in
models to significantly strengthen and emission factors for ethanol and the agricultural chemical production and
expand our analysis for this rule. In following air toxics were added: transport, while substantial PM
increases are also associated with projected to increase. Relative to the US production and distribution.
fugitive dust from agricultural total reference case emissions with Formaldehyde and acrolein increases
operations. Ammonia emissions are RFS1 mandate ethanol volumes, are smaller, on the order of 0.41
expected to increase substantially due to increases of 413 percent for percent. There are also very small
increased ammonia from fertilizer use. acetaldehyde and ethanol vapor are decreases in benzene, 1,3-butadiene and
Ethanol vapor and most air toxic especially significant because they are naphthalene relative to the US total
emissions associated with fuel driven directly by the increased ethanol emissions.
production and distribution are
TABLE VI.B1UPSTREAM FUEL PRODUCTION AND DISTRIBUTION IMPACTS OF THE PRIMARY SCENARIO IN 2022
RFS1 mandate AEO
Pollutant Annual short % of Total Annual short % of Total
tons U.S. inventory tons U.S. inventory
NOX .................................................................................................................. 169,665 1.34 164,170 1.29

HC .................................................................................................................... 77,014 0.67 19,737 0.17
PM10 ................................................................................................................. 69,583 1.94 63,892 1.78
PM2.5 ................................................................................................................ 15,864 0.47 14,707 0.43
CO .................................................................................................................... 135,658 0.25 130,172 0.24
Benzene ........................................................................................................... 231 0.13 236 0.13
Ethanol ............................................................................................................. 69,445 12.63 35,865 6.52
1,3Butadiene .................................................................................................. 1 0.01 0 0.00
Acetaldehyde ................................................................................................... 1,617 4.37 933 2.52
Formaldehyde .................................................................................................. 293 0.39 187 0.25
Naphthalene ..................................................................................................... 8 0.06 6 0.04
Acrolein ............................................................................................................ 67 1.13 37 0.63
SO2 .................................................................................................................. 3,266 0.04 5,044 0.06
NH3 .................................................................................................................. 48,711 1.15 48,711 1.15
C. Vehicle and Equipment Emission sensitive case that newer technology and show trends similar to light duty
Impacts of Fuel Program Tier 2 vehicles are generally able to vehicles. Biodiesel effects for this
control for changes to emissions analysis were unchanged from the
The effects of the increased use of
associated with low level ethanol proposal, and are based on an analysis
renewable fuels on vehicle and blends; for this analysis we therefore are of recent biodiesel testing, detailed in
equipment emissions are a direct not attributing any NOX or VOC impact the RIA, showing a 2 percent increase in
function of the effects of these fuels on to the use of E10 on these vehicles. The NOX with a 20 percent biodiesel blend,
exhaust and evaporative emissions from data does show sensitivity for older a 16 percent decrease in PM, and a 14
vehicles and off-road equipment, and technology (pre-Tier 2) vehicles, so this percent decrease in HC. These results
evaporation of fuel from portable analysis does attribute an increase in essentially confirm the results of an
containers. To assess these impacts we NOX and decrease in NMHC to the use earlier EPA analysis. This analysis does
conducted separate analyses to quantify of E10 in these vehicles. This analysis not attribute any downstream emission
the emission impacts of additional E10 does not include any emission impacts impact from the use of renewable diesel
due to the increased use of renewable with use of E85 in flex-fueled vehicles, or cellulosic-based diesel relative to
fuels on gasoline vehicles, nonroad except for increases in ethanol and conventional diesel due to their
spark-ignited engines and portable fuel acetaldehyde, as the limited data chemical similarity to diesel fuel and
containers; E85 on cars and light trucks; currently available is insufficient to limited test data.
biodiesel on diesel vehicles; and quantify the impact with any degree of Summarized vehicle and equipment
increased refueling events due to lower certainty. Overall the sensitivity of emission impacts in 2022, updated as
energy density of biofuels.190 exhaust emissions to ethanol assumed noted above, are shown in Table VI.C
In the proposal we provided two for the final rule analysis is closer to the 1 relative to each reference case. The
different analyses based on two different less sensitive case presented in the totals shown below reflect the net
assumptions regarding the effects of E10 proposal; and is generally less sensitive impacts from all mobile sources,
and E85 on exhaust emissions from cars than the case used for the air quality including car and truck evaporative
and trucks. Those were referred to as modeling, as discussed in Section VI.D. emissions, off road emissions, and
less sensitive and more sensitive We have also updated our estimates of portable fuel containers. Additional
cases. Based on analysis of recent E10 effects on permeation emissions breakdowns by mobile source category
studies, todays analysis is based on a from light-duty vehicles based on can be found in Chapter 3 of the RIA.
hybrid of these two scenarios. As testing recently completed by the Carbon monoxide, PM, benzene, and
detailed in the RIA, EPA and other Coordinating Research Council (CRC), acrolein are projected to decrease in
parties have been gathering additional 2022 as a result of the increased use of
showing that the relative increase in

data on the emission impacts of ethanol VOC emissions is higher for newer renewable fuels, while NOX, HC and the
fuels on later model vehicles. Data technology vehicles. Nonroad spark other air toxics, especially ethanol and
available in time for this analysis ignition (SI) emission impacts of E10 acetaldehyde, are projected to increase
supports the hypothesis of the less were based on EPAs NONROAD model due to the impacts of E10.
190 The impact of renewable diesel was not impact on criteria and toxic emissions due to the emission effects relative to conventional diesel are
estimated for this analysis; we expect little overall relatively small volume change, and because presumed to be negligible.
TABLE VI.C1DOWNSTREAM VEHICLE AND EQUIPMENT EMISSION IMPACTS OF THE PRIMARY SCENARIO IN 2022
RFS1 Mandate AEO
Pollutant Annual short % of Total Annual short % of Total
tons U.S. inventory tons U.S. inventory
NOX .................................................................................................................. 77,939 0.61 20,650 0.16

HC .................................................................................................................... 23,748 0.21 4,786 0.04
PM10 ................................................................................................................. 569 0.02 569 0.02
PM2.5 ................................................................................................................ 315 0.01 315 0.01
CO .................................................................................................................... 3,005,500 5.55 506,591 0.94
Benzene ........................................................................................................... 4,033 2.28 768 0.43
Ethanol ............................................................................................................. 30,678 5.58 18,272 3.32
1,3Butadiene .................................................................................................. 225 1.71 59 0.45
Acetaldehyde ................................................................................................... 4,231 11.43 2,175 5.88
Formaldehyde .................................................................................................. 62 0.08 57 0.08
Naphthalene ..................................................................................................... 7 0.05 2 0.01
Acrolein ............................................................................................................ 44 0.75 16 0.28
SO2 .................................................................................................................. 21 0.00 21 0.00
NH3 .................................................................................................................. 0 0.00 0 0.00
D. Air Quality Impacts billion gallon renewable fuel mandate, As discussed above in Sections VI.A
Air quality modeling was performed that approximately 20 billion gallons of and VI.C of this preamble, the interim
to assess the projected impact of the this ethanol will be in the form of E85, emission inventories used for the air
renewable fuel volumes required by and that the use of E85 results in fewer quality modeling analysis are the more
RFS2 on emissions of criteria and air emissions of direct PM2.5 from vehicles. sensitive case described in the
toxic pollutants. Our air quality The emission impacts and air quality proposal. As a result, the interim
modeling reflects the impact of results would be different if, instead of inventories used for air quality
increased renewable fuel use required E85, more non-ethanol biofuels are used modeling assume that vehicles
by RFS2 compared with two different or mid-level ethanol blends are operating on E10 have higher NOX
reference cases that include the use of approved. emissions and lower VOC, CO and PM
renewable fuels: A 2022 reference case In fact, as explained in Section IV, our exhaust emissions compared to the FRM
projection based on the RFS1-mandated more recent analyses indicate that inventories.
volume of 7.1 billion gallons of ethanol and E85 volumes are likely to be Cellulosic plant emissions
renewable fuels, and a 2022 reference significantly lower than what we The interim emission inventories
case projection based on the AEO 2007 assumed in the interim inventories. used in air quality modeling generally
volume of roughly 13.6 billion gallons Furthermore, the final emission assumed higher emissions from
of renewable fuels. Thus, the results inventories do not include vehicle- cellulosic plants than the FRM
represent the impact of an incremental related PM reductions associated with inventories, which used revised
increase in ethanol and other renewable E85 use, as discussed in Section VI.A estimates based on updates to the
fuels. We note that the air quality and VI.C of this preamble. There are fraction of biomass burned at these
modeling results presented in this final additional, important limitations and plants. However, as noted in Section
rule do not constitute the anti- uncertainties associated with the VI.A, the shift of some cellulosic
backsliding analysis required by Clean interim inventories that must be kept in volume from ethanol to diesel results in
Air Act section 211(v). EPA will be mind when considering the results: higher PM emissions from cellulosic
analyzing air quality impacts of Error in PM2.5 emissions from plants in the final rule inventories than
increased renewable fuel use through locomotive engines used in the air quality modeling
that study and will promulgate inventories.
appropriate mitigation measures under After the air quality modeling was
completed, we discovered an error in Ethanol volume
section 211(v), separate from this final
action. the way that PM2.5 emissions from As mentioned above, the interim
It is critical to note that a key locomotive engines were allocated to emission inventories used in our air
limitation of the analysis is that it counties in the inventory. Although quality modeling reflect the use of
employed interim emission inventories, there was very little impact on national- ethanol in about 34 of the mandated 36
which were somewhat enhanced level PM2.5 emissions, PM2.5 emission billion gallons and do not include any
compared to what was described in the changes were too high in some counties cellulosic diesel. As shown in Table
proposal, but due to the timing of the and too low in others, by varying VI.A1, the FRM inventories assume 22
analysis did not include some of the degrees. As a result, we do not present billion gallons of ethanol in the primary
later enhancements and corrections of the modeling results for specific case and 6.5 billion gallons of cellulosic
the final emission inventories presented localized PM2.5 impacts. However, we diesel. The inventories used for air
in this FRM (see Section VI.A through have concluded that PM2.5 modeling quality modeling assume ethanol
VI.C of this preamble). Most results are still informative for national- volumes are more consistent with the
significantly, our modeling of the air level benefits assessment, as discussed FRMs high-ethanol case inventory,
quality impacts of the renewable fuel at more length in Section VIII.D of this which reflects the use of 33 billion
volumes required by RFS2 relied upon preamble and the RIA. gallons of ethanol and no cellulosic
interim inventories that assumed that Sensitivity of light-duty vehicle diesel.
ethanol will make up 34 of the 36 exhaust emissions to ethanol blends Renewable fuel transport emissions
As discussed in Section 3.3, the be very complex, and there are attain the 2006 24-hour PM2.5 NAAQS
estimates of renewable fuel transport uncertainties in emissions of precursor in the 2014 to 2019 time frame and then
volumes and distances differ between compounds and reaction pathways. In be required to maintain the 2006 24-
the air quality modeling and final rule addition, simplifications of chemistry hour PM2.5 NAAQS thereafter.
inventories. must be made in order to handle
In this section, we present EPA has already adopted many
reactions of thousands of chemicals in
information on current modeled levels emission control programs that are
the atmosphere. Another source of
of pollution as well as projections for expected to reduce ambient PM2.5 levels
uncertainty involves the hydrocarbon
2022, with respect to ambient PM2.5, speciation profiles, which are applied to and which will assist in reducing the
ozone, selected air toxics, and nitrogen the VOC inventories to break VOC down number of areas that fail to achieve the
and sulfur deposition. The air quality into individual constituent compounds PM2.5 NAAQS. Even so, recent air
modeling results indicate that ambient which react in the atmosphere. Given quality modeling for the Control of
PM2.5 is likely to increase in areas the complexity of the atmospheric Emissions from New Marine
associated with biofuel production and chemistry, the hydrocarbon speciation Compression-Ignition Engines at or
transport and decrease in other areas. has an important influence on the air Above 30 Liters per Cylinder rule
The results of the air quality modeling quality modeling results. Speciation projects that in 2020, at least 10
also indicate that many areas of the profiles for a number of key sources are counties with a population of almost 25
country will experience increases in based on data with significant million may not attain the 1997 annual
ambient ozone and a few areas will see limitations. Finally, there are PM2.5 standard of 15 g/m3 and 47
decreases in ambient ozone as a result uncertainties in the surrogates used to counties with a population of over 53
of the renewable fuel volumes required allocate emissions spatially and million may not attain the 2006 24-hour
by RFS2. The modeling also shows that temporally; this is particularly PM2.5 standard of 35 g/m3.191 These
ethanol concentrations increase significant in projecting the location of numbers do not account for those areas
substantially with increases in new ethanol plants, especially future that are close to (e.g., within 10 percent
renewable fuel volumes. For the other cellulosic biofuel plants. These plants of) the PM2.5 standards. These areas,
modeled air toxics, there are some can have large impacts on local although not violating the standards,
localized impacts, but relatively little emissions. A more detailed discussion will also benefit from any reductions in
impact on national average of these and additional uncertainties PM2.5 ensuring long-term maintenance
concentrations. Our air quality and limitations associated with our air of the PM2.5 NAAQS.
modeling does not show substantial quality modeling is presented in Section
overall nationwide impacts on the 3.4 of the RIA. c. Projected Levels With RFS2 Volumes
annual total sulfur and nitrogen
deposition occurring across the U.S. 1. Particulate Matter We are not able to present air quality
However, the air quality modeling a. Current Levels modeling results which detail changes
results indicate that the entire Eastern in PM2.5 design values for specific local
half of the U.S. along with the Pacific PM2.5 concentrations exceeding the areas due to the error in the locomotive
Northwest would see increases in level of the PM2.5 NAAQS occur in inventory mentioned in the introduction
nitrogen deposition as a result of many parts of the country. In 2005, EPA to this section. However, we do know
increased renewable fuel use. The designated 39 nonattainment areas for that ambient PM2.5 increases in some
results of the modeling also show that the 1997 PM2.5 NAAQS (70 FR 943, areas of the country and decreases in
sulfur deposition will increase in the January 5, 2005). These areas are other areas of the country. Ambient
Midwest and in some rural areas of the composed of 208 full or partial counties PM2.5 is likely to increase as a result of
west associated with biofuel production. with a total population exceeding 88
emissions at biofuel production plants
The results are discussed in more detail million. The 1997 PM2.5 NAAQS was
and from biofuel transport, both of
below and in Section 3.4 of the RIA. recently revised and the 2006 24-hour
which are more prevalent in the
We used the Community Multi-scale PM2.5 NAAQS became effective on
Midwest. PM concentrations are likely
Air Quality (CMAQ) photochemical December 18, 2006. On October 8, 2009,
the EPA issued final nonattainment area to decrease in some areas due to
model, version 4.7, for our analysis.
designations for the 2006 24-hour PM2.5 reductions in SOA formation and
This version of CMAQ includes a
number of improvements to previous NAAQS (74 FR 58688, November 13, reduced emissions from gasoline
versions of the model that are important 2009). These designations include 31 refineries. In addition, decreases in
in assessing impacts of the increased areas composed of 120 full or partial ambient PM are predicted because our
use of renewable fuels, including counties with a population of over 70 modeling inventory assumed that E85
additional pathways for formation of million. In total, there are 54 PM2.5 usage reduces PM tailpipe emissions.
soluble organic aerosols (SOA). These nonattainment areas composed of 245 The decreases in ambient PM from
improvements are discussed in Section counties with a population of 101 reductions in SOA and tailpipe
3.4 of the RIA. million people. emissions are likely to occur where
In addition to the limitations of the there is a higher density of vehicles,
analysis that result from the use of b. Projected Levels Without RFS2 such as the Northeast. See Section
interim emission inventories rather than Volumes VIII.D for a discussion of the changes in
the FRM inventories, there are States with PM2.5 nonattainment areas national average population-weighted
uncertainties in the air quality analysis are required to take action to bring those PM2.5 concentrations.
that should be noted. First, there are areas into compliance in the future.
uncertainties inherent in the modeling Areas designated as not attaining the 191 US EPA (2009). Final Rule Control of
process. Pollutants such as ozone, PM, 1997 PM2.5 NAAQS will need to attain Emissions from New Marine Compression-Ignition
acetaldehyde, formaldehyde, acrolein, the 1997 standards in the 2010 to 2015 Engines at or Above 30 Liters per Cylinder. (This
rule was signed on December 18, 2009 but has not
and 1,3-butadiene can be formed time frame, and then maintain them yet been published in the Federal Register. The
secondarily through atmospheric thereafter. The 2006 24-hour PM2.5 signed version of the rule is available at http://
chemical processes. These processes can nonattainment areas will be required to epa.gov/otaq/oceanvessels.htm).
2. Ozone increased protection of public health numbers above likely underestimate the
a. Current Levels and welfare. As of January 6, 2010 there number of counties that are not meeting
are 51 areas designated as the ozone NAAQS because the
8-hour ozone concentrations nonattainment for the 1997 8-hour nonattainment areas associated with the
exceeding the level of the ozone ozone NAAQS, comprising 266 full or more stringent 2008 8-hour ozone
NAAQS occur in many parts of the partial counties with a total population NAAQS have not yet been
country. In 2008, the U.S. EPA amended of over 122 million people. These designated.192 Table VI.D1 provides an
the ozone NAAQS (73 FR 16436, March numbers do not include the people estimate, based on 200507 air quality
27, 2008). The final 2008 ozone NAAQS living in areas where there is a future data, of the counties with design values
rule set forth revisions to the previous risk of failing to maintain or attain the greater than the 2008 8-hour ozone
1997 NAAQS for ozone to provide 1997 8-hour ozone NAAQS. The NAAQS of 0.075 ppm.
TABLE VI.D1COUNTIES WITH DESIGN VALUES GREATER THAN THE 2008 OZONE NAAQS BASED ON 20052007 AIR
QUALITY DATA
Number of Population a
counties
1997 Ozone Standard: Counties within the 51 areas currently designated as nonattainment (as of 1/6/10) ....... 266 122,343, 799
2008 Ozone Standard: Additional counties that would not meet the 2008 NAAQS b ............................................ 227 41,285,262
Total .................................................................................................................................................................. 493 163,629,061

Notes:
a Population numbers are from 2000 census data.
b Area designations for the 2008 ozone NAAQS have not yet been made. Nonattainment for the 2008 Ozone NAAQS would be based on three
years of air quality data from later years. Also, the county numbers in this row include only the counties with monitors violating the 2008 Ozone
NAAQS. The numbers in this table may be an underestimate of the number of counties and populations that will eventually be included in areas
with multiple counties designated nonattainment.
b. Projected Levels Without RFS2 NAAQS. Even so, our air quality 8-hour ozone design value is in Morgan
Volumes modeling projects that in 2022, with all County, Alabama, 1.56 ppb and 1.27
States with 8-hour ozone current controls but excluding the ppb when compared with the RFS1
nonattainment areas are required to take impacts of the renewable fuel volumes mandate and AEO 2007 reference cases
action to bring those areas into required by RFS2, up to 7 counties with respectively. As mentioned above there
compliance in the future. Based on the a population of over 22 million may not are some areas which see decreases in
final rule designating and classifying 8- attain the 2008 ozone standard of 0.075 their ozone design values. This is likely
hour ozone nonattainment areas for the ppm (75 ppb). These numbers do not due to VOC emission reductions at the
1997 standard (69 FR 23951, April 30, account for those areas that are close to tailpipe in urban areas that are VOC-
2004), most 8-hour ozone nonattainment (e.g., within 10 percent of) the 2008 limited (reducing VOCs role as a
areas will be required to attain the ozone standard. These areas, although precursor to ozone formation). The
ozone NAAQS in the 2007 to 2013 time not violating the standards, will also maximum decrease projected in an 8-
frame and then maintain the NAAQS benefit from any reductions in ozone hour ozone design value is in Riverside,
thereafter. EPA has recently proposed to ensuring long-term maintenance of the CA, 0.66 ppb and 0.6 ppb when
reconsider the 2008 ozone NAAQS. If ozone NAAQS. compared with the RFS1 mandate and
EPA promulgates different ozone c. Projected Levels With RFS2 Volumes AEO 2007 reference cases respectively.
NAAQS in 2010 as a result of the On a population-weighted basis, the
reconsideration, they would fully Our modeling indicates that the average modeled future-year 8-hour
replace the 2008 ozone NAAQS and required renewable fuel volumes will ozone design values are projected to
there would no longer be a requirement cause increases in ozone design value increase by 0.28 ppb in 2022 when
to designate areas for the 2008 NAAQS. concentrations in many areas of the compared with the RFS1 mandate
EPA would designate nonattainment country and decreases in ozone design reference case and increase by 0.16 ppb
areas for a potential new 2010 primary value concentrations in a few areas. Air when compared with the AEO 2007
ozone NAAQS based on the quality modeling of the expected
reference case. On a population-
reconsideration of the 2008 ozone impacts of the renewable fuel volumes
weighted basis the design values for
NAAQS in 2011. The attainment dates required by RFS2 shows that in 2022,
for areas designated nonattainment for a most counties with modeled data, those counties that are projected to be
potential new 2010 primary ozone especially those in the southeast U.S., above the 2008 ozone standard in 2022
NAAQS are likely to be in the 2014 to will see increases in their ozone design will see decreases of 0.14 ppb when
2031 timeframe, depending on the values. These adverse impacts are likely compared with the RFS1 mandate
severity of the problem. due to increased upstream emissions of reference case and 0.15 ppb when
EPA has already adopted many NOX in many areas that are NOX-limited compared with the AEO 2007 reference
case.
emission control programs that are (acting as a precursor to ozone

expected to reduce ambient ozone levels formation). The majority of these design
and assist in reducing the number of value increases are less than 0.5 ppb.
areas that fail to achieve the ozone The maximum projected increase in an
192 EPA recently proposed to reconsider the 2008 continued applicability of the 2008 ozone NAAQS, NAAQS. The new deadline is March 2011. EPA
NAAQS. Because of the uncertainty the EPA has used its authority to extend by 1 year the intends to complete the reconsideration by August
reconsideration proposal creates regarding the deadline for promulgating designations for those 31, 2010.
3. Air Toxics rule, although there is considerable control, and exclusion of upstream
a. Current Levels uncertainty associated with the results. impacts may limit the ability of these
Annual percent changes in ambient studies to inform expected impacts on
The majority of Americans continue concentrations of acetaldehyde are less ambient air quality Given the conflicting
to be exposed to ambient concentrations than 1% for most of the country, and results among past studies and the
of air toxics at levels which have the annual absolute changes in ambient limitations of our analysis, considerable
potential to cause adverse health concentrations of acetaldehyde are additional work is needed to address the
effects.193 The levels of air toxics to generally less than 0.1 g/m3. Some impacts of the renewable fuel volumes
which people are exposed vary urban areas show decreases in ambient required by this rule on ambient
depending on where people live and acetaldehyde concentrations ranging concentrations of acetaldehyde.
work and the kinds of activities in from 1 to 10%, and some rural areas
which they engage, as discussed in associated with new ethanol plants ii. Formaldehyde
detail in U.S. EPAs recent Mobile show increases in ambient acetaldehyde
Source Air Toxics Rule.194 According to Our air quality modeling results do
concentrations ranging from 1 to 10% not show substantial impacts on
the National Air Toxic Assessment with RFS2 volumes. This increase is
(NATA) for 2002,195 mobile sources ambient concentrations of formaldehyde
due to an increase in emissions of from the renewable fuel volumes
were responsible for 47 percent of primary acetaldehyde and precursor
outdoor toxic emissions, over 50 percent required by this rule. Most of the U.S.
emissions from ethanol plants. A key experiences a 1% or less change in
of the cancer risk, and over 80 percent reason for the decrease in urban areas is
of the noncancer hazard. Benzene is the ambient formaldehyde concentrations.
reductions in certain acetaldehyde
largest contributor to cancer risk of all Decreases in ambient formaldehyde
precursors, primarily alkenes (olefins).
124 pollutants quantitatively assessed in concentrations range between 1 and 5%
Most ambient acetaldehyde is formed
the 2002 NATA and mobile sources in a few urban areas. Increases range
from secondary photochemical reactions
were responsible for 59 percent of between 1 and 2.5% in some rural areas
of numerous precursor compounds, and
benzene emissions in 2002. Over the associated with new ethanol plants; this
many photochemical mechanisms are
years, EPA has implemented a number result is due to increases in emissions
responsible for this process.
of mobile source and fuel controls The uncertainty associated with these of primary formaldehyde and
resulting in VOC reductions, which also formaldehyde precursors from the new
results is described in more detail in
reduce benzene and other air toxic ethanol plants. Absolute changes in
Section 3.4 of the RIA. For example,
emissions. ambient concentrations of formaldehyde
some of the modeled decreases would
b. Projected Levels likely become increases using data are generally less than 0.1 g/m3.
Our modeling indicates that, while recently collected by EPAs Office of iii. Ethanol
there are some localized impacts, the Research and Development on the
renewable fuel volumes required by composition of hydrocarbon emissions Our modeling projects that the
RFS2 have relatively little impact on from gasoline storage, gasoline renewable fuel volumes required by this
national average ambient concentrations distribution, and gas cans. Furthermore, rule will lead to significant nationwide
of the modeled air toxics. An exception as noted in the introduction to Section increases in ambient ethanol
is increased ambient concentrations of VI.D, the inventories used for air quality concentrations. Increases ranging
ethanol. For more information on the air modeling may overestimate NOX, between 10 to 50% are seen across most
toxics modeling results, see Section 3.4 because they assumed that use of E10 of the country. The largest increases
of the RIA for annual average results would lead to increases in NOX (more than 100%) occur in urban areas
and Appendix 3A of the RIA for emissions for later model year vehicles. with high amounts of on-road emissions
seasonal average results. Our discussion The emission inventories for the final and in rural areas associated with new
of the air quality modeling results rule no longer make this assumption, ethanol plants. Absolute increases in
focuses primarily on impacts of the based on recent EPA testing results.196 ambient ethanol concentrations are
renewable fuel volumes required by Because increases in NOX may result in above 1.0 ppb in some urban areas.
RFS2 in reference to the RFS1 mandate more acetyl peroxy radical forming PAN Analysis of a modeling error that
for 2022. Except where specifically rather than acetaldehyde, our air quality impacted ethanol emissions suggests
discussed below, air quality modeling modeling results may underestimate the that this error resulted in overestimates
results of increased renewable fuel use ambient concentrations of acetaldehyde. of ethanol impacts by more than 10%
with RFS2 as compared to the AEO Some previous U.S. monitoring across much of the country. For a
2007 reference case are presented in studies have suggested an insignificant detailed discussion of this error, please
Appendix 3A of this RIA. or small impact of increased use of refer to the emissions modeling TSD,
ethanol in fuel on ambient found in the docket for this rule (EPA
i. Acetaldehyde acetaldehyde, as discussed in more HQOAR20050161).
Our air quality modeling does not detail in Section 3.4 of the RIA. These
show substantial overall nationwide studies suggest that increases in direct iv. Benzene
impacts on ambient concentrations of emissions of acetaldehyde are offset by Our modeling projects that the
acetaldehyde as a result of the decreases in the secondary formation of renewable fuel volumes required by this
renewable fuel volumes required by this acetaldehyde. Other past studies have rule will lead to small nationwide
shown increases in ambient decreases in ambient benzene
193 U. S. EPA. (2009) 2002 National-Scale Air

acetaldehyde with increased use of concentrations. Decreases in ambient
Toxics Assessment. http://www.epa.gov/ttn/atw/ ethanol in fuel, although factors such as
nata2002/. benzene concentrations range between 1
194 U.S. Environmental Protection Agency (2007). differences in vehicle fleet, lack of RVP and 10% across most of the country and
Control of Hazardous Air Pollutants from Mobile can be higher in a few urban areas.
Sources; Final Rule. 72 FR 8434, February 26, 2007. 196 Summary of recent findings for fuel effects of
195 U.S. EPA. (2009) 2002 National-Scale Air a 10% ethanol blend on light duty exhaust
Absolute changes in ambient
Toxics Assessment. http://www.epa.gov/ttn/atw/ emissions, Memo from Aron Butler to Docket EPA concentrations of benzene show
nata2002/. HQOAR20050161. reductions up to 0.2 g/m3.
v. 1,3-Butadiene data used to estimate snowmobile 1,3- that have wintertime increases in
butadiene emission inventories. ambient 1,3-butadiene. 1,3-butadiene is
The results of our air quality a precursor to acrolein, and these
modeling show small increases and vi. Acrolein
increases are likely associated with the
decreases in ambient concentrations of Our air quality modeling shows small same emission inventory issues in areas
1,3-butadiene in parts of the U.S. as a regional increases and decreases in of high snowmobile usage seen for 1,3-
result of increases in renewable fuel ambient concentrations of acrolein as a butadiene, as described above.
volumes required by RFS2. Generally, result of increases in renewable fuel
decreases occur in some southern areas volumes required by this rule. Decreases vii. Population Metrics
of the country and increases occur in in acrolein concentrations occur in
some northern areas and areas with high some eastern and southern parts of the To assess the impact of projected
altitudes. Percent changes in 1,3- U.S. and increases occur in some changes in ambient air toxics as a result
butadiene concentrations are over 50% northern areas and areas associated with of increases in renewable fuel volumes
in several areas; but the changes in new ethanol plants. Changes in absolute required by this rule, we developed
absolute concentrations of ambient 1,3- ambient concentrations of acrolein are population metrics that show the
butadiene are generally less than 0.005 between 0.001 g/m3 with the population experiencing increases and
g/m 3. Annual increases in ambient exception of the increases associated decreases in annual ambient
concentrations of 1,3-butadiene are with new ethanol plants. These concentrations of the modeled air
driven by wintertime changes. These increases can be up to and above 0.005 toxics. Table VI.D2 below illustrates
increases appear in rural areas with cold g/m3 with percent changes above 50% the percentage of the population
winters and low ambient levels but high and are due to increases in emissions of impacted by changes of various
contributions of emissions from acrolein from the new plants. Ambient magnitudes in annual ambient
snowmobiles, and a major reason for acrolein increases in northern regions concentrations with the renewable fuel
this modeled increase may be are driven by wintertime changes, and volumes required by RFS2, as compared
deficiencies in available emissions test occur in the same areas of the country to the RFS1 mandate reference case.
TABLE VI.D2PERCENT OF TOTAL POPULATION IMPACTED BY CHANGES IN ANNUAL AMBIENT CONCENTRATIONS OF

TOXIC POLLUTANTS: RFS2 COMPARE TO RFS1 MANDATE
Percent change in annual Acetaldehyde Acrolein Benzene 1,3Butadiene Ethanol Formaldehyde
ambient concentration (percent) (percent) (percent) (percent) (percent) (percent)
100 .............................. ............................ ............................ ............................ ............................ ............................ ............................

>100 to 50 .............. ............................ ............................ ............................ ............................ ............................ ............................
>50 to 10 ................ 0.76 ............................ 1.18 1.38 ............................ ............................
>10 to 5 .................. 8.17 0.18 12.92 28.11 ............................ ............................
>5 to 2.5 ................. 13.29 13.66 48.76 31.98 ............................ 4.11
>2.5 to 1 ................. 25.26 40.13 23.60 12.87 ............................ 19.30
>1 to <1 ........................ 52.24 36.03 13.55 19.37 ............................ 76.08
1 to <2.5 ......................... 0.24 3.44 ............................ 1.53 ............................ 0.48
2.5 to <5 ......................... 0.04 2.93 ............................ 1.13 0.22 0.01
5 to <10 .......................... 0.02 2.00 ............................ 1.13 1.23 ............................
10 to <50 ........................ ............................ 1.51 ............................ 2.15 63.29 ............................
50 to <100 ...................... ............................ 0.08 ............................ 0.28 34.49 ............................
100 ................................. ............................ 0.05 ............................ 0.06 0.77 ............................
Table VI.D3 shows changes in the concentrations of air toxics that are increased renewable fuel use as required
population-weighted average ambient projected to occur in 2022 with by this rule.
TABLE VI.D3POPULATION-WEIGHTED AVERAGE AMBIENT CONCENTRATIONS OF AIR TOXICS IN 2022 WITH RFS2
RENEWABLE FUEL REQUIREMENTS
Population-weighted concentration Population-weighted concentration
(Annual average in g/m 3) (Annual average in g/m 3)
RFS2 v. RFS1 mandate reference case RFS2 v. AEO 2007 reference case
Diff.
RFS1 Diff.
RFS2 RFS2 RFS2 AEO 2007
mandate RFS2AEO
RFS1
Acetaldehyde ................................................................... 1.590 1.618 0.028 1.590 1.613 0.023

Acrolein ............................................................................ 0.017 0.018 0.001 0.017 0.017 0.0001
Benzene ........................................................................... 0.520 0.535 0.015 0.520 0.527 0.007
1,3-Butadiene ................................................................... 0.022 0.023 0.001 0.022 0.230 0.208

Ethanol ............................................................................. 1.521 1.039 0.482 1.521 1.112 0.409
Formaldehyde .................................................................. 1.549 1.558 0.009 1.549 0.004 0.006
4. Nitrogen and Sulfur Deposition deposition of 2% to more than 4%. The Current NAAQS use PM2.5 as the
a. Current Levels remainder of the country will see only indicator for fine particles (with PM2.5
minimal changes in sulfur deposition, referring to particles with a nominal
Over the past two decades, the EPA ranging from decreases of less than 1% mean aerodynamic diameter less than or
has undertaken numerous efforts to to increases of less than 1%. For a map equal to 2.5 m), and use PM10 as the
reduce nitrogen and sulfur deposition of 2022 sulfur deposition impacts and indicator for purposes of regulating the
across the U.S. Analyses of long-term additional information on these coarse fraction of PM10 (referred to as
monitoring data for the U.S. show that impacts, see Section 3.4.2.2 of the RIA. thoracic coarse particles or coarse-
deposition of both nitrogen and sulfur Overall, nitrogen deposition impacts fraction particles; generally including
compounds has decreased over the last in 2022 resulting from the renewable particles with a nominal mean
17 years although many areas continue fuel volumes required by RFS2 are more aerodynamic diameter greater than 2.5
to be negatively impacted by deposition. widespread than the sulfur deposition m and less than or equal to 10 m, or
Deposition of inorganic nitrogen and impacts. When compared to the RFS1 PM102.5). Ultrafine particles are a subset
sulfur species routinely measured in the mandate 2007 reference case, nearly the of fine particles, generally less than 100
U.S. between 2004 and 2006 were as entire eastern half of the United States nanometers (0.1 m) in aerodynamic
high as 9.6 kilograms of nitrogen per will see nitrogen deposition increases diameter.
hectare per year (kg N/ha/yr) and 21.3 ranging from 0.5% to more than 2%. Fine particles are produced primarily
kilograms of sulfur per hectare per year The largest increases will occur in the by combustion processes and by
(kg S/ha/yr). The data show that states of Illinois, Michigan, Indiana, transformations of gaseous emissions
reductions were more substantial for Wisconsin, and Missouri, with large (e.g., SOX, NOX and VOC) in the
sulfur compounds than for nitrogen portions of each of these states seeing atmosphere. The chemical and physical
compounds. These numbers are nitrogen deposition increases of more properties of PM2.5 may vary greatly
generated by the U.S. national than 2%. The Pacific Northwest will with time, region, meteorology, and
monitoring network and they likely also experience increases in nitrogen of source category. Thus, PM2.5 may
underestimate nitrogen deposition 0.5% to more than 2%. When compared include a complex mixture of different
because neither ammonia nor organic to the AEO 2007 reference case, the pollutants including sulfates, nitrates,
nitrogen is measured. In the eastern changes in nitrogen deposition are more organic compounds, elemental carbon
U.S., where data are most abundant, limited. The eastern half of the United and metal compounds. These particles
total sulfur deposition decreased by States will still see nitrogen deposition
about 36% between 1990 and 2005, can remain in the atmosphere for days
increases ranging from 0.5% to more to weeks and travel hundreds to
while total nitrogen deposition than 2%; however, the size of the area
decreased by 19% over the same time thousands of kilometers.
with these changes will be smaller.
frame.197 Increases of more than 2% will b. Health Effects of PM
b. Projected Levels primarily occur only in Illinois, Indiana, Scientific studies show ambient PM is
Michigan, and Missouri. Fewer areas in associated with a series of adverse
Our air quality modeling does not the Pacific Northwest will have
show substantial overall nationwide health effects. These health effects are
increases in nitrogen deposition when discussed in detail in EPAs 2004
impacts on the annual total sulfur and compared to the AEO 2007 reference
nitrogen deposition occurring across the Particulate Matter Air Quality Criteria
case. In both the RFS1 mandate and Document (PM AQCD) and the 2005 PM
U.S. as a result of increased renewable AEO 2007 reference cases, the Mountain
fuel volumes required by this rule. For Staff Paper.198 199 200 Further discussion
West and Southwest will see only of health effects associated with PM can
sulfur deposition, when compared to minimal changes in nitrogen deposition,
the RFS1 mandate reference case, the also be found in the RIA for this rule.
ranging from decreases of less than Health effects associated with short-
RFS2 renewable fuel volumes will result 0.5% to increases of less than 0.5%. A
in annual percent increases in the term exposures (hours to days) to
few areas in Minnesota and western ambient PM include premature
Midwest ranging from 1% to more than Kansas would experience reductions of
4%. Some rural areas in the west, likely mortality, aggravation of cardiovascular
nitrogen up to 2%. See Section 3.4.2.2 and lung disease (as indicated by
associated with new ethanol plants, will of the RIA for a map and additional
also have increases in sulfur deposition
information on nitrogen deposition 198 U.S. EPA (2004). Air Quality Criteria for
ranging from 1% to more than 4% as a
impacts. Particulate Matter. Volume I EPA600/P99/002aF
result of the RFS2 renewable fuel and Volume II EPA600/P99/002bF. Retrieved on
volumes. When compared to the AEO E. Health Effects of Criteria and Air March 19, 2009 from Docket EPAHQOAR2003
2007 reference case, the changes are Toxics Pollutants 0190 at http://www.regulations.gov/.
more limited. The Midwest will still 199 U.S. EPA. (2005). Review of the National
1. Particulate Matter Ambient Air Quality Standard for Particulate
have sulfur deposition increases ranging
Matter: Policy Assessment of Scientific and
from 1% to more than 4%, but the size a. Background Technical Information, OAQPS Staff Paper. EPA
of the area with these changes will be Particulate matter is a generic term for 452/R05005a. Retrieved March 19, 2009 from
smaller. The Pacific Northwest has a broad class of chemically and http://www.epa.gov/ttn/naaqs/standards/pm/data/
minimal areas with increases in sulfur pmstaffpaper_20051221.pdf.
physically diverse substances. It can be 200 The PM NAAQS is currently under review and
deposition when compared to the AEO principally characterized as discrete the EPA is considering all available science on PM
2007 reference case. When compared to particles that exist in the condensed health effects, including information which has
both the RFS1 mandate and AEO 2007 (liquid or solid) phase spanning several been published since 2004, in the development of
reference cases, areas along the Gulf orders of magnitude in size. Since 1987, the upcoming PM Integrated Science Assessment
Coast in Louisiana and Texas will Document (ISA). A second draft of the PM ISA was
EPA has delineated that subset of completed in July 2009 and was submitted for
experience decreases in sulfur inhalable particles small enough to review by the Clean Air Scientific Advisory
penetrate to the thoracic region Committee (CASAC) of EPAs Science Advisory
197 U.S. EPA. U.S. EPAs 2008 Report on the Board. Comments from the general public have also
Environment (Final Report). U.S. Environmental
(including the tracheobronchial and been requested. For more information, see http://
Protection Agency, Washington, DC, EPA/600/R alveolar regions) of the respiratory tract cfpub.epa.gov/ncea/cfm/recordisplay.
07/045F (NTIS PB2008112484). (referred to as thoracic particles). cfm?deid=210586.
increased hospital admissions and extension of the American Cancer irritate the respiratory system, causing
emergency department visits), increased Society Study shows an association coughing, throat irritation, and/or
respiratory symptoms including cough between PM2.5 and sulfate uncomfortable sensation in the chest.
and difficulty breathing, decrements in concentrations and lung cancer Ozone can reduce lung function and
lung function, altered heart rate rhythm, mortality.207 make it more difficult to breathe deeply;
and other more subtle changes in blood breathing may also become more rapid
markers related to cardiovascular 2. Ozone and shallow than normal, thereby
health.201 Long-term exposure to PM2.5 a. Background limiting a persons activity. Ozone can
and sulfates has also been associated Ground-level ozone pollution is also aggravate asthma, leading to more
with mortality from cardiopulmonary typically formed by the reaction of VOC asthma attacks that require medical
disease and lung cancer, and effects on and NOX in the lower atmosphere in the attention and/or the use of additional
the respiratory system such as reduced presence of heat and sunlight. These medication. In addition, there is
lung function growth or development of pollutants, often referred to as ozone suggestive evidence of a contribution of
respiratory disease. A new analysis precursors, are emitted by many types of ozone to cardiovascular-related
shows an association between long-term pollution sources, such as highway and morbidity and highly suggestive
PM2.5 exposure and a subclinical nonroad motor vehicles and engines, evidence that short-term ozone exposure
measure of atherosclerosis.202 203 power plants, chemical plants, directly or indirectly contributes to non-
Studies examining populations accidental and cardiopulmonary-related
refineries, makers of consumer and
exposed over the long term (one or more mortality, but additional research is
commercial products, industrial
years) to different levels of air pollution, needed to clarify the underlying
facilities, and smaller area sources.
including the Harvard Six Cities Study The science of ozone formation, mechanisms causing these effects. In a
and the American Cancer Society Study, transport, and accumulation is recent report on the estimation of ozone-
show associations between long-term complex.208 Ground-level ozone is related premature mortality published
exposure to ambient PM2.5 and both all by the National Research Council (NRC),
produced and destroyed in a cyclical set
cause and cardiopulmonary premature a panel of experts and reviewers
of chemical reactions, many of which
mortality.204 205 206 In addition, an concluded that short-term exposure to
are sensitive to temperature and
ambient ozone is likely to contribute to
sunlight. When ambient temperatures
201 U.S. EPA. (2006). National Ambient Air premature deaths and that ozone-related
Quality Standards for Particulate Matte. 71 FR and sunlight levels remain high for
mortality should be included in
61144, October 17, 2006. several days and the air is relatively
estimates of the health benefits of
202 Kunzli, N., Jerrett, M., Mack, W.J., et al. stagnant, ozone and its precursors can
(2004). Ambient air pollution and atherosclerosis in reducing ozone exposure.211 Animal
build up and result in more ozone than
Los Angeles. Environ Health Perspect.,113, 201 toxicological evidence indicates that
typically occurs on a single high-
206. with repeated exposure, ozone can
203 This study is included in the 2006 Provisional temperature day. Ozone can be inflame and damage the lining of the
Assessment of Recent Studies on Health Effects of transported hundreds of miles lungs, which may lead to permanent
Particulate Matter Exposure. The provisional downwind from precursor emissions, changes in lung tissue and irreversible
assessment did not and could not (given a very resulting in elevated ozone levels even
short timeframe) undergo the extensive critical reductions in lung function. People who
review by CASAC and the public, as did the PM in areas with low local VOC or NOX are more susceptible to effects
AQCD. The provisional assessment found that the emissions. associated with exposure to ozone can
new studies expand the scientific information and
provide important insights on the relationship b. Health Effects of Ozone include children, the elderly, and
between PM exposure and health effects of PM. The individuals with respiratory disease
The health and welfare effects of
provisional assessment also found that new such as asthma. Those with greater
studies generally strengthen the evidence that acute ozone are well documented and are
exposures to ozone, for instance due to
and chronic exposure to fine particles and acute assessed in EPAs 2006 Air Quality
exposure to thoracic coarse particles are associated time spent outdoors (e.g., children and
Criteria Document (ozone AQCD) and
with health effects. Further, the provisional science outdoor workers), are of particular
2007 Staff Paper.209 210 Ozone can
assessment found that the results reported in the concern.
studies did not dramatically diverge from previous The 2006 ozone AQCD also examined
findings, and taken in context with the findings of report of the Institutes Particle Epidemiology
the AQCD, the new information and findings did Reanalysis Project. Cambridge, MA: Health Effects relevant new scientific information that
not materially change any of the broad scientific Institute. Retrieved on March 19, 2009 from has emerged in the past decade,
conclusions regarding the health effects of PM http://es.epa.gov/ncer/science/pm/hei/Rean- including the impact of ozone exposure
exposure made in the AQCD. However, it is ExecSumm.pdf. on such health effects as changes in
important to note that this assessment was limited 207 Pope, C. A., III, Burnett, R.T., Thun, M. J.,
lung structure and biochemistry,
to screening, surveying, and preparing a provisional Calle, E.E., Krewski, D., Ito, K., Thurston, G.D.,
assessment of these studies. For reasons outlined in (2002). Lung cancer, cardiopulmonary mortality, inflammation of the lungs, exacerbation
Section I.C of the preamble for the final PM NAAQS and long-term exposure to fine particulate air and causation of asthma, respiratory
rulemaking in 2006 (see 71 FR 6114849, October pollution. J. Am. Med. Assoc., 287, 11321141. illness-related school absence, hospital
17, 2006), EPA based its NAAQS decision on the 208 U.S. EPA. (2006). Air Quality Criteria for
admissions and premature mortality.
science presented in the 2004 AQCD. Ozone and Related Photochemical Oxidants (Final).
204 Dockery, D.W., Pope, C.A. III, Xu, X, et al. EPA/600/R05/004aFcF. Washington, DC: U.S.
Animal toxicological studies have
(1993). An association between air pollution and EPA. Retrieved on March 19, 2009 from Docket suggested potential interactions between
mortality in six U.S. cities. N Engl J Med, 329, EPAHQOAR20030190 at http:// ozone and PM with increased responses
17531759. Retrieved on March 19, 2009 from www.regulations.gov/. observed to mixtures of the two
http://content.nejm.org/cgi/content/full/329/24/ 209 U.S. EPA. (2006). Air Quality Criteria for
pollutants compared to either ozone or
1753. Ozone and Related Photochemical Oxidants (Final).
PM alone. The respiratory morbidity
205 Pope, C.A., III, Thun, M.J., Namboodiri, M.M., EPA/600/R05/004aFcF. Washington, DC: U.S.
Dockery, D.W., Evans, J.S., Speizer, F.E., and Heath, EPA. Retrieved on March 19, 2009 from Docket observed in animal studies along with
C.W., Jr. (1995). Particulate air pollution as a EPAHQOAR20030190 at http://
predictor of mortality in a prospective study of U.S. www.regulations.gov/. March 19, 2009 from Docket EPAHQOAR2003
adults. Am. J. Respir. Crit. Care Med, 151, 669674. 210 U.S. EPA. (2007). Review of the National 0190 at http://www.regulations.gov/.
206 Krewski, D., Burnett, R.T., Goldberg, M.S., et Ambient Air Quality Standards for Ozone: Policy 211 National Research Council (NRC), 2008.
al. (2000). Reanalysis of the Harvard Six Cities Assessment of Scientific and Technical Estimating Mortality Risk Reduction and Economic
study and the American Cancer Society study of Information, OAQPS Staff Paper. EPA452/R07 Benefits from Controlling Ozone Air Pollution. The
particulate air pollution and mortality. A special 003. Washington, DC, U.S. EPA. Retrieved on National Academies Press: Washington, DC.
the evidence from epidemiologic studies asthmatics to NO2 concentrations as low relationship between short-term
supports a causal relationship between as 0.26 ppm. In addition, small but exposure to SO2 and mortality.
acute ambient ozone exposures and significant increases in non-specific
4. Carbon Monoxide
increased respiratory-related emergency airway hyperresponsiveness were
room visits and hospitalizations in the reported following 1-hour exposures of Carbon monoxide (CO) forms as a
warm season. In addition, there is asthmatics to 0.1 ppm NO2. Second, result of incomplete fuel combustion.
suggestive evidence of a contribution of exposure to NO2 has been found to CO enters the bloodstream through the
ozone to cardiovascular-related enhance the inherent responsiveness of lungs, forming carboxyhemoglobin and
morbidity and non-accidental and the airway to subsequent nonspecific reducing the delivery of oxygen to the
cardiopulmonary mortality. challenges in controlled human bodys organs and tissues. The health
exposure studies of asthmatic subjects. threat from exposures to lower levels of
3. NOX and SOX CO is most serious for those who suffer
Enhanced airway responsiveness could
a. Background have important clinical implications for from cardiovascular disease,
Nitrogen dioxide (NO2) is a member of asthmatics since transient increases in particularly those with angina or
the NOX family of gases. Most NO2 is airway responsiveness following NO2 peripheral vascular disease.
formed in the air through the oxidation exposure have the potential to increase Epidemiological studies have suggested
of nitric oxide (NO) emitted when fuel symptoms and worsen asthma control. that exposure to ambient levels of CO is
is burned at a high temperature. SO2, a Together, the epidemiologic and associated with increased risk of
member of the sulfur oxide (SOX) family experimental data sets form a plausible, hospital admissions for cardiovascular
of gases, is formed from burning fuels consistent, and coherent description of causes, fetal effects, and possibly
containing sulfur (e.g., coal or oil a relationship between NO2 exposures premature cardiovascular mortality.
derived), extracting gasoline from oil, or and an array of adverse health effects Healthy individuals also are affected,
extracting metals from ore. that range from the onset of respiratory but only when they are exposed to
SO2 and NO2 can dissolve in water symptoms to hospital admission. higher CO levels. Exposure of healthy
vapor and further oxidize to form Although the weight of evidence individuals to elevated CO levels is
sulfuric and nitric acid which react with supporting a causal relationship is associated with impairment of visual
ammonia to form sulfates and nitrates, somewhat less certain than that perception, work capacity, manual
both of which are important associated with respiratory morbidity, dexterity, learning ability and
components of ambient PM. The health NO2 has also been linked to other health performance of complex tasks. Carbon
effects of ambient PM are discussed in endpoints. These include all-cause monoxide also contributes to ozone
Section VI.D.1 of this preamble. NOX (nonaccidental) mortality, hospital nonattainment since carbon monoxide
along with non-methane hydrocarbon admissions or emergency department reacts photochemically in the
(NMHC) are the two major precursors of visits for cardiovascular disease, and atmosphere to form ozone.214
ozone. The health effects of ozone are decrements in lung function growth Additional information on CO related
covered in Section VI.D.2. associated with chronic exposure. health effects can be found in the
Carbon Monoxide Air Quality Criteria
b. Health Effects of NOX c. Health Effects of SOX Document (CO AQCD).215 216
Information on the health effects of Information on the health effects of
SO2 can be found in the U.S. 5. Air Toxics
NO2 can be found in the U.S.
Environmental Protection Agency Environmental Protection Agency The population experiences an
Integrated Science Assessment (ISA) for Integrated Science Assessment for elevated risk of cancer and noncancer
Nitrogen Oxides.212 The U.S. EPA has Sulfur Oxides.213 SO2 has long been health effects from exposure to the class
concluded that the findings of known to cause adverse respiratory of pollutants known collectively as air
epidemiologic, controlled human health effects, particularly among toxics.217 Fuel combustion contributes
exposure, and animal toxicological individuals with asthma. Other to ambient levels of air toxics that can
studies provide evidence that is potentially sensitive groups include include, but are not limited to,
sufficient to infer a likely causal children and the elderly. During periods acetaldehyde, acrolein, benzene, 1,3-
relationship between respiratory effects of elevated ventilation, asthmatics may butadiene, formaldehyde, ethanol,
and short-term NO2 exposure. The ISA experience symptomatic naphthalene and peroxyacetyl nitrate
concludes that the strongest evidence bronchoconstriction within minutes of
214 U.S. EPA (2000). Air Quality Criteria for
for such a relationship comes from exposure. Following an extensive
Carbon Monoxide, EPA/600/P99/001F. This
epidemiologic studies of respiratory evaluation of health evidence from document is available in Docket EPAHQOAR
effects including symptoms, emergency epidemiologic and laboratory studies, 20040008.
department visits, and hospital the EPA has concluded that there is a 215 U.S. EPA (2000). Air Quality Criteria for
admissions. The ISA also draws two causal relationship between respiratory Carbon Monoxide, EPA/600/P99/001F. This
broad conclusions regarding airway health effects and short-term exposure document is available in Docket EPAHQOAR
20040008.
responsiveness following NO2 exposure. to SO2. Separately, based on an 216 The CO NAAQS is currently under review and
First, the ISA concludes that NO2 evaluation of the epidemiologic the EPA is considering all available science on CO
exposure may enhance the sensitivity to evidence of associations between short- health effects, including information which has
allergen-induced decrements in lung term exposure to SO2 and mortality, the been published since 2000, in the development of
function and increase the allergen- the upcoming CO Integrated Science Assessment
EPA has concluded that the overall Document (ISA). A second draft of the CO ISA was
induced airway inflammatory response
evidence is suggestive of a causal completed in September 2009 and was submitted

following 30-minute exposures of for review by the Clean Air Scientific Advisory
213 U.S. EPA. (2008). Integrated Science Committee (CASAC) of EPAs Science Advisory
212 U.S.EPA (2008). Integrated Science Assessment (ISA) for Sulfur OxidesHealth Board. For more information, see http://
Assessment for Oxides of NitrogenHealth Criteria Criteria (Final Report). EPA/600/R08/047F. cfpub.epa.gov/ncea/cfm/recordisplay.
(Final Report). EPA/600/R08/071. Washington, Washington, DC: U.S. Environmental Protection cfm?deid=213229.
DC,: U.S.EPA. Retrieved on March 19, 2009 from Agency. Retrieved on March 18, 2009 from 217 U. S. EPA. 2002 National-Scale Air Toxics
http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm? http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm? Assessment. http://www.epa.gov/ttn/atw/nata2002/

deid=194645. deid=198843. risksum.html.
(PAN). Acrolein, benzene, 1,3- subpopulation to decrements in decreases in respiratory rate.231 Based
butadiene, formaldehyde and functional expiratory volume (FEV1 on animal data, individuals with
naphthalene have significant test) and bronchoconstriction upon compromised respiratory function (e.g.,
contributions from mobile sources and acetaldehyde inhalation.225 The agency emphysema, asthma) are expected to be
were identified as national or regional is currently conducting a reassessment at increased risk of developing adverse
risk drivers in the 2002 National-scale of the health hazards from inhalation responses to strong respiratory irritants
Air Toxics Assessment (NATA).218 exposure to acetaldehyde. such as acrolein.
PAN, which is formed from precursor EPA determined in 2003 that the
compounds by atmospheric processes, b. Acrolein human carcinogenic potential of
is not assessed in NATA. Emissions and Acrolein is extremely acrid and acrolein could not be determined
ambient concentrations of compounds irritating to humans when inhaled, with because the available data were
are discussed in Chapter 3 of the RIA acute exposure resulting in upper inadequate. No information was
and Section VI.D.3 of this preamble. respiratory tract irritation, mucus available on the carcinogenic effects of
hypersecretion and congestion. The acrolein in humans and the animal data
a. Acetaldehyde
intense irritancy of this carbonyl has provided inadequate evidence of
Acetaldehyde is classified in EPAs carcinogenicity.232 The IARC
been demonstrated during controlled
IRIS database as a probable human determined in 1995 that acrolein was
tests in human subjects, who suffer
carcinogen, based on nasal tumors in not classifiable as to its carcinogenicity
intolerable eye and nasal mucosal
rats, and is considered toxic by the in humans.233
sensory reactions within minutes of
inhalation, oral, and intravenous
exposure.226 These data and additional c. Benzene
routes.219 Acetaldehyde is reasonably
studies regarding acute effects of human
anticipated to be a human carcinogen by The EPAs IRIS database lists benzene
exposure to acrolein are summarized in
the U.S. DHHS in the 11th Report on as a known human carcinogen (causing
EPAs 2003 IRIS Human Health
Carcinogens and is classified as possibly leukemia) by all routes of exposure, and
Assessment for acrolein.227 Evidence
carcinogenic to humans (Group 2B) by concludes that exposure is associated
available from studies in humans
the IARC.220 221 EPA is currently with additional health effects, including
indicate that levels as low as 0.09 ppm
conducting a reassessment of cancer risk genetic changes in both humans and
(0.21 mg/m3) for five minutes may elicit
from inhalation exposure to animals and increased proliferation of
subjective complaints of eye irritation
acetaldehyde. bone marrow cells in mice.234 235 236 EPA
with increasing concentrations leading
The primary noncancer effects of states in its IRIS database that data
to more extensive eye, nose and
exposure to acetaldehyde vapors indicate a causal relationship between
respiratory symptoms.228 Lesions to the
include irritation of the eyes, skin, and benzene exposure and acute
lungs and upper respiratory tract of rats,
respiratory tract.222 In short-term (4 lymphocytic leukemia and suggest a
rabbits, and hamsters have been
week) rat studies, degeneration of relationship between benzene exposure
observed after subchronic exposure to
olfactory epithelium was observed at and chronic non-lymphocytic leukemia
acrolein.229 Acute exposure effects in
various concentration levels of and chronic lymphocytic leukemia. The
animal studies report bronchial hyper-
acetaldehyde exposure.223 224 Data from International Agency for Research on
responsiveness.230 In a recent study, the
these studies were used by EPA to Carcinogens (IARC) has determined that
acute respiratory irritant effects of
develop an inhalation reference benzene is a human carcinogen and the
exposure to 1.1 ppm acrolein were more
concentration. Some asthmatics have U.S. Department of Health and Human
pronounced in mice with allergic
been shown to be a sensitive Services (DHHS) has characterized
airway disease by comparison to non-
218 U.S. EPA .2009. National-Scale Air Toxics diseased mice which also showed 231 Morris JB, Symanowicz PT, Olsen JE, et al.
Assessment for 2002. http://www.epa.gov/ttn/atw/ 2003. Immediate sensory nerve-mediated
nata2002. 225 Myou, S.; Fujimura, M.; Nishi K.; Ohka, T.; respiratory responses to irritants in healthy and
219 U.S. EPA. 1991. Integrated Risk Information and Matsuda, T. 1993. Aerosolized acetaldehyde allergic airway-diseased mice. J Appl Physiol
System File of Acetaldehyde. Research and induces histamine-mediated bronchoconstriction in 94(4):15631571.
Development, National Center for Environmental asthmatics. Am. Rev. Respir.Dis.148(4 Pt 1): 9403. 232 U.S. EPA. 2003. Integrated Risk Information
Assessment, Washington, DC. This material is 226 Sim VM, Pattle RE. Effect of possible smog System File of Acrolein. Research and
available electronically at http://www.epa.gov/iris/ irritants on human subjects JAMA165: 19802010, Development, National Center for Environmental
subst/0290.htm. 1957. Assessment, Washington, DC. This material is
220 U.S. Department of Health and Human 227 U.S. EPA (U.S. Environmental Protection available at http://www.epa.gov/iris/subst/
Services National Toxicology Program 11th Report Agency). (2003) Toxicological review of acrolein in 0364.htm.
on Carcinogens available at: ntp.niehs.nih.gov/ support of summary information on Integrated Risk 233 International Agency for Research on Cancer
index.cfm?objectid=32BA9724F1F6975E Information System (IRIS) National Center for (IARC). 1995. Monographs on the evaluation of
7FCE50709CB4C932. Environmental Assessment, Washington, DC. EPA/ carcinogenic risk of chemicals to humans, Volume
221 International Agency for Research on Cancer 635/R03/003. Available online at: http:// 63, Dry cleaning, some chlorinated solvents and
(IARC). 1999. Re-evaluation of some organic www.epa.gov/ncea/iris. other industrial chemicals , World Health
chemicals, hydrazine, and hydrogen peroxide. IARC 228 Weber-Tschopp, A; Fischer, T; Gierer, R; et al. Organization, Lyon, France.
Monographs on the Evaluation of Carcinogenic Risk (1977) Experimentelle reizwirkungen von Acrolein 234 U.S. EPA. 2000. Integrated Risk Information
of Chemical to Humans, Vol 71. Lyon, France. auf den Menschen. Int Arch Occup Environ Hlth System File for Benzene. This material is available
222 U.S. EPA. 1991. Integrated Risk Information 40(2):117130. In German electronically at http://www.epa.gov/iris/subst/
System File of Acetaldehyde. This material is 229 Integrated Risk Information System File of 0276.htm.
available electronically at http://www.epa.gov/iris/ Acrolein. Office of Research and Development, 235 International Agency for Research on Cancer
subst/0290.htm. National Center for Environmental Assessment, (IARC). 1982. Monographs on the evaluation of
223 Appleman, L. M., R. A. Woutersen, V. J. Feron, Washington, DC. This material is available at carcinogenic risk of chemicals to humans, Volume
R. N. Hooftman, and W. R. F. Notten. 1986. Effects http://www.epa.gov/iris/subst/0364.htm. 29, Some industrial chemicals and dyestuffs, World
of the variable versus fixed exposure levels on the 230 U.S. EPA (U.S. Environmental Protection Health Organization, Lyon, France, p. 345389.
toxicity of acetaldehyde in rats. J. Appl. Toxicol. 6: Agency). (2003) Toxicological review of acrolein in 236 Irons, R.D.; Stillman, W.S.; Colagiovanni, D.B.;
331336. support of summary information on Integrated Risk Henry, V.A. 1992. Synergistic action of the benzene
224 Appleman, L.M., R.A. Woutersen, and V.J. Information System (IRIS) National Center for metabolite hydroquinone on myelopoietic
Feron. 1982. Inhalation toxicity of acetaldehyde in Environmental Assessment, Washington, DC. EPA/ stimulating activity of granulocyte/macrophage
rats. I. Acute and subacute studies. Toxicology. 23: 635/R03/003. Available online at: http:// colony-stimulating factor in vitro, Proc. Natl. Acad.
293297. www.epa.gov/ncea/iris. Sci. 89:36913695.
benzene as a known human determined that 1,3-butadiene is a As part of the IRIS assessment,
carcinogen.237 238 human carcinogen and the U.S. DHHS pharmacokinetic models are being
A number of adverse noncancer has characterized 1,3-butadiene as a evaluated as a means of extrapolating
health effects including blood disorders, known human carcinogen.249 250 There across species (animal to human) and
such as preleukemia and aplastic are numerous studies consistently across exposure routes (oral to
anemia, have also been associated with demonstrating that 1,3-butadiene is inhalation) to better characterize the
long-term exposure to benzene.239 240 metabolized into genotoxic metabolites health hazards and dose-response
The most sensitive noncancer effect by experimental animals and humans. relationships for low levels of ethanol
observed in humans, based on current The specific mechanisms of 1,3- exposure in the environment.
data, is the depression of the absolute butadiene-induced carcinogenesis are The IARC has classified alcoholic
lymphocyte count in blood.241 242 In unknown; however, the scientific beverages as carcinogenic to humans
addition, recent work, including studies evidence strongly suggests that the based on sufficient evidence that
sponsored by the Health Effects Institute carcinogenic effects are mediated by malignant tumors of the mouth,
(HEI), provides evidence that genotoxic metabolites. Animal data pharynx, larynx, esophagus, and liver
biochemical responses are occurring at suggest that females may be more are causally related to the consumption
lower levels of benzene exposure than sensitive than males for cancer effects of alcoholic beverages.252 The U.S.
previously known.243 244 245 246 EPAs associated with 1,3-butadiene exposure; DHHS in the 11th Report on
IRIS program has not yet evaluated there are insufficient data in humans Carcinogens also identified alcoholic
these new data. from which to draw conclusions about beverages as a known human
sensitive subpopulations. 1,3-butadiene carcinogen (they have not evaluated the
d. 1,3Butadiene
also causes a variety of reproductive and cancer risks specifically from exposure
EPA has characterized 1,3-butadiene developmental effects in mice; no to ethanol), with evidence for cancer of
as carcinogenic to humans by human data on these effects are the mouth, pharynx, larynx, esophagus,
inhalation.247 248 The IARC has available. The most sensitive effect was liver and breast.253 There are no studies
ovarian atrophy observed in a lifetime reporting carcinogenic effects from
237 International Agency for Research on Cancer
bioassay of female mice.251 inhalation of ethanol. EPA is currently
(IARC). 1987. Monographs on the evaluation of
carcinogenic risk of chemicals to humans, Volume e. Ethanol evaluating the available human and
29, Supplement 7, Some industrial chemicals and animal cancer data to identify which
dyestuffs, World Health Organization, Lyon, France. EPA is conducting an assessment of cancer type(s) are the most relevant to
238 U.S. Department of Health and Human the cancer and noncancer effects of an assessment of risk to humans from a
Services National Toxicology Program 11th Report exposure to ethanol, a compound which
on Carcinogens available at: http://ntp. low-level oral and inhalation exposure
niehs.nih.gov/go/16183.
is not currently listed in EPAs IRIS. A to ethanol.
239 Aksoy, M. (1989). Hematotoxicity and description of these effects to the extent
that information is available will be Noncancer health effects data are
carcinogenicity of benzene. Environ. Health
Perspect. 82: 193197. presented, as required by Section 1505 available from animal studies as well as
240 Goldstein, B.D. (1988). Benzene toxicity.
of EPAct, in a Report to Congress on epidemiologic studies. The
Occupational medicine. State of the Art Reviews. 3:
public health, air quality and water epidemiologic data are obtained from
541554. studies of alcoholic beverage
241 Rothman, N., G.L. Li, M. Dosemeci, W.E. resource impacts of fuel additives. We
expect to release that report in 2010. consumption. Effects include
Bechtold, G.E. Marti, Y.Z. Wang, M. Linet, L.Q. Xi,
W. Lu, M.T. Smith, N. Titenko-Holland, L.P. Zhang, Extensive data are available regarding neurological impairment,
W. Blot, S.N. Yin, and R.B. Hayes (1996) adverse health effects associated with developmental effects, cardiovascular
Hematotoxicity among Chinese workers heavily
the ingestion of ethanol while data on effects, immune system depression, and
exposed to benzene. Am. J. Ind. Med. 29: 236246. effects on the liver, pancreas and
242 U.S. EPA (2002) Toxicological Review of inhalation exposure effects are sparse.
Benzene (Noncancer Effects). Environmental
reproductive system.254 There is
Protection Agency, Integrated Risk Information Washington Office, Washington, DC. Report No. evidence that children prenatally
System (IRIS), Research and Development, National EPA600P98001F. This document is available exposed via mothers ingestion of
Center for Environmental Assessment, Washington electronically at http://www.epa.gov/iris/supdocs/ alcoholic beverages during
DC. This material is available electronically at buta-sup.pdf.
http://www.epa.gov/iris/subst/0276.htm. 248 U.S. EPA (2002) Full IRIS Summary for 1,3-
pregnancy are at increased risk of
243 Qu, O.; Shore, R.; Li, G.; Jin, X.; Chen, C.L.;
butadiene (CASRN 106990). Environmental
hyperactivity and attention deficits,
Cohen, B.; Melikian, A.; Eastmond, D.; Rappaport, Protection Agency, Integrated Risk Information impaired motor coordination, a lack of
S.; Li, H.; Rupa, D.; Suramaya, R.; Songnian, W.; System (IRIS), Research and Development, National regulation of social behavior or poor
Huifant, Y.; Meng, M.; Winnik, M.; Kwok, E.; Li, Y.; Center for Environmental Assessment, Washington, psychosocial functioning, and deficits
Mu, R.; Xu, B.; Zhang, X.; Li, K. (2003) HEI Report DC http://www.epa.gov/iris/subst/0139.htm.
115, Validation & Evaluation of Biomarkers in 249 International Agency for Research on Cancer
in cognition, mathematical ability,
Workers Exposed to Benzene in China. (IARC) (1999) Monographs on the evaluation of verbal fluency, and spatial
244 Qu, Q., R. Shore, G. Li, X. Jin, L.C. Chen, B.
carcinogenic risk of chemicals to humans, Volume
Cohen, et al. (2002) Hematological changes among 71, Re-evaluation of some organic chemicals, 252 International Agency for Research on Cancer
Chinese workers with a broad range of benzene hydrazine and hydrogen peroxide and Volume 97 (IARC). 1988. Monographs on the evaluation of
exposures. Am. J. Industr. Med. 42: 275285. (in preparation), World Health Organization, Lyon, carcinogenic risk of chemicals to humans, Volume
245 Lan, Qing, Zhang, L., Li, G., Vermeulen, R., et France. 44, Alcohol Drinking, World Health Organization,
al. (2004) Hematotoxically in Workers Exposed to 250 U.S. Department of Health and Human
Lyon, France.
Low Levels of Benzene. Science 306: 17741776. Services (2005) National Toxicology Program 11th 253 U.S. Department of Health and Human
246 Turtletaub, K.W. and Mani, C. (2003) Benzene Report on Carcinogens available at: ntp.niehs.
metabolism in rodents at doses relevant to human nih.gov/index.cfm?objectid=32BA9724F1F6975E Services. 2005. National Toxicology Program 11th
exposure from Urban Air. Research Reports Health 7FCE50709CB4C932. Report on Carcinogens available at: ntp.niehs.
Effect Inst. Report No.113. 251 Bevan, C.; Stadler, J.C.; Elliot, G.S.; et al. nih.gov/index.cfm?objectid=32BA9724F1F6975E
247 U.S. EPA (2002) Health Assessment of 1,3 (1996) Subchronic toxicity of 4-vinylcyclohexene in 7FCE50709CB4C932.
Butadiene. Office of Research and Development, rats and mice by inhalation. Fundam. Appl. 254 U.S. Department of Health and Human
National Center for Environmental Assessment, Toxicol. 32:110. Services. 2000. 10th Special Report to the U.S.
Congress on Alcohol and Health. June. 2000.
memory.255 256 257 258 259 260 261 262 In some Institute of Occupational Safety and DNA-damaging agent in mammalian
people, genetic factors influencing the Health (NIOSH) study of garment cells either in vivo or in vitro. Some
metabolism of ethanol can lead to workers also found increased risk of studies suggest that PAN may be a weak
differences in internal levels of ethanol death due to leukemia among workers bacterial mutagen at high concentrations
and may render some subpopulations exposed to formaldehyde.267 Extended much higher than exist in present urban
more susceptible to risks from the follow-up of a cohort of British chemical atmospheres.272
effects of ethanol. workers did not find evidence of an Effects of ground-level smog causing
increase in nasopharyngeal or intense eye irritation have been
f. Formaldehyde attributed to photochemical oxidants,
lymphohematopoietic cancers, but a
Since 1987, EPA has classified continuing statistically significant including PAN.273 Animal toxicological
formaldehyde as a probable human excess in lung cancers was reported.268 information on the inhalation effects of
carcinogen based on evidence in Recently, the IARC re-classified the non-ozone oxidants has been limited
humans and in rats, mice, hamsters, and formaldehyde as a human carcinogen to a few studies on PAN. Acute
monkeys.263 EPA is currently reviewing (Group 1).269 exposure to levels of PAN can cause
recently published epidemiological Formaldehyde exposure also causes a changes in lung morphology, behavioral
data. For instance, research conducted range of noncancer health effects, modifications, weight loss, and
by the National Cancer Institute (NCI) including irritation of the eyes (burning susceptibility to pulmonary infections.
found an increased risk of and watering of the eyes), nose and Human exposure studies indicate minor
nasopharyngeal cancer and throat. Effects from repeated exposure in pulmonary function effects at high PAN
lymphohematopoietic malignancies humans include respiratory tract concentrations, but large inter-
such as leukemia among workers irritation, chronic bronchitis and nasal individual variability precludes
exposed to formaldehyde.264 265 In an epithelial lesions such as metaplasia definitive conclusions.274
analysis of the lymphohematopoietic and loss of cilia. Animal studies suggest
cancer mortality from an extended h. Naphthalene
that formaldehyde may also cause
follow-up of these workers, NCI airway inflammationincluding Naphthalene is found in small
confirmed an association between eosinophil infiltration into the airways. quantities in gasoline and diesel fuels.
lymphohematopoietic cancer risk and There are several studies that suggest Naphthalene emissions have been
peak exposures.266 A recent National that formaldehyde may increase the risk measured in larger quantities in both
of asthmaparticularly in the gasoline and diesel exhaust compared
255 Goodlett CR, KH Horn, F Zhou. 2005. Alcohol
young.270 271 with evaporative emissions from mobile
teratogeniesis: mechanisms of damage and
strategies for intervention. Exp. Biol. Med. 230:394
sources, indicating it is primarily a
406.
g. Peroxyacetyl nitrate (PAN) product of combustion. EPA released an
256 Riley EP, CL McGee. 2005. Fetal alcohol Peroxyacetyl nitrate (PAN) has not external review draft of a reassessment
spectrum disorders: an overview with emphasis on been evaluated by EPAs IRIS program. of the inhalation carcinogenicity of
changes in brain and behavior. Exp. Biol. Med.
230:357365. Information regarding the potential naphthalene based on a number of
257 Zhang X, JH Sliwowska, J Weinberg. 2005. carcinogenicity of PAN is limited. As recent animal carcinogenicity
Prenatal alcohol exposure and fetal programming: noted in the EPA air quality criteria studies.275 The draft reassessment
effects on neuroendocrine and immune function. document for ozone and related completed external peer review.276
Exp. Biol. Med. 230:376388.
258 Riley EP, CL McGee, ER Sowell. 2004.
photochemical oxidants, cytogenetic Based on external peer review
Teratogenic effects of alcohol: a decade of brain studies indicate that PAN is not a potent
272 U.S. EPA. 2006. Air quality criteria for ozone
imaging. Am. J. Med. Genet. Part C: Semin. Med. mutagen, clastogen (a compound that
Genet. 127:3541. and related photochemical oxidants (Ozone CD).
259 Gunzerath L, V Faden, S Zakhari, K Warren.
can cause breaks in chromosomes), or Research Triangle Park, NC: National Cetner for
2004. National Institute on Alcohol Abuse and Environmental Assesssment; report no. EPA/600/R
Alcoholism report on moderate drinking. Alcohol. Hauptmann, M. 2009. Mortality from 05/004aFcF.3v. page 578 Available at http://
Clin. Exp. Res. 28:829847. lymphohematopoietic malignancies among workers cfpub.epa.gov/ncea/.
260 World Health Organization (WHO). 2004. in formaldehyde industries: The National Cancer 273 U.S. EPA Air Quality Criteria for Ozone and
Global status report on alcohol 2004. Geneva, Institute cohort. J. National Cancer Inst. 101: 751 Related Photochemical Oxidants (Final). U.S.
Switzerland: Department of Mental Health and 761. Environmental Protection Agency, Washington, DC,
267 Pinkerton, L. E. 2004. Mortality among a
Substance Abuse. Available: http://www.who.int/ EPA 600/R05/004aFcF, 2006. page 563. This
substance_abuse/publications/global_status_ cohort of garment workers exposed to document is available in Docket EPAHQOAR
report_2004_overview.pdf formaldehyde: an update. Occup. Environ. Med. 61: 20050161. This document may be accessed
261 Chen WJA, SE Maier, SE Parnell, FR West. 193200. electronically at: http://www.epa.gov/ttn/naaqs/
268 Coggon, D, EC Harris, J Poole, KT Palmer. standards/ozone/s_o3_cr_cd.html.
2003. Alcohol and the developing brain:
neuroanatomical studies. Alcohol Res. Health 2003. Extended follow-up of a cohort of British 274 U.S. EPA Air Quality Criteria for Ozone and
27:174180. chemical workers exposed to formaldehyde. J Related Photochemical Oxidants (Final). U.S.
262 Driscoll CD, AP Streissguth, EP Riley. 1990. National Cancer Inst. 95:16081615. Environmental Protection Agency, Washington, DC,
Prenatal alcohol exposure comparability of effects 269 International Agency for Research on Cancer EPA 600/R05/004aFcF, 2006. page 578. This
in humans and animal models. Neurotoxicol. (IARC). 2006. Formaldehyde, 2Butoxyethanol and document is available in Docket EPAHQOAR
Teratol. 12:231238. 1-tert-Butoxypropan-2-ol. Volume 88. (in 20050161. This document may be accessed
263 U.S. EPA (1987) Assessment of Health Risks preparation), World Health Organization, Lyon, electronically at: http://www.epa.gov/ttn/naaqs/
to Garment Workers and Certain Home Residents France. standards/ozone/s_o3_cr_cd.html.
from Exposure to Formaldehyde, Office of 270 Agency for Toxic Substances and Disease 275 U. S. EPA. 2004. Toxicological Review of
Pesticides and Toxic Substances, April 1987. Registry (ATSDR). 1999. Toxicological profile for Naphthalene (Reassessment of the Inhalation
264 Hauptmann, M.; Lubin, J. H.; Stewart, P. A.; Formaldehyde. Atlanta, GA: U.S. Department of Cancer Risk), Environmental Protection Agency,
Hayes, R. B.; Blair, A. 2003. Mortality from Health and Human Services, Public Health Service. Integrated Risk Information System, Research and
lymphohematopoetic malignancies among workers http://www.atsdr.cdc.gov/toxprofiles/tp111.html. Development, National Center for Environmental
in formaldehyde industries. Journal of the National 271 WHO (2002) Concise International Chemical Assessment, Washington, DC. This material is
Cancer Institute 95: 16151623. Assessment Document 40: Formaldehyde. available electronically at http://www.epa.gov/iris/
265 Hauptmann, M.; Lubin, J. H.; Stewart, P. A.;
Published under the joint sponsorship of the United subst/0436.htm.
Hayes, R. B.; Blair, A. 2004. Mortality from solid Nations Environment Programme, the International 276 Oak Ridge Institute for Science and Education.
cancers among workers in formaldehyde industries. Labour Organization, and the World Health (2004). External Peer Review for the IRIS
American Journal of Epidemiology 159: 11171130. Organization, and produced within the framework Reassessment of the Inhalation Carcinogenicity of
266 Beane Freeman, L. E.; Blair, A.; Lubin, J. H.; of the Inter-Organization Programme for the Sound Naphthalene. August 2004. http://cfpub.epa.gov/
Stewart, P. A.; Hayes, R. B.; Hoover, R. N.; Management of Chemicals. Geneva. ncea/cfm/recordisplay.cfm?deid=84403.
comments received, additional analyses urban ornamentals, and environmental 1999, the regional haze rule (64 FR
are being undertaken. This external effects associated with air toxics. 35714) was put in place to protect the
review draft does not represent official visibility in mandatory class I federal
1. Visibility
agency opinion and was released solely areas. Visibility can be said to be
for the purposes of external peer review Visibility can be defined as the degree impaired in both PM2.5 nonattainment
and public comment. The National to which the atmosphere is transparent areas and mandatory class I federal
Toxicology Program listed naphthalene to visible light.281 Airborne particles areas.
as reasonably anticipated to be a degrade visibility by scattering and
human carcinogen in 2004 on the basis absorbing light. Visibility is important 2. Atmospheric Deposition
of bioassays reporting clear evidence of because it has direct significance to
peoples enjoyment of daily activities in Wet and dry deposition of ambient
carcinogenicity in rats and some particulate matter delivers a complex
evidence of carcinogenicity in mice.277 all parts of the country. Individuals
value good visibility for the well-being mixture of metals (e.g., mercury, zinc,
California EPA has released a new risk lead, nickel, aluminum, cadmium),
assessment for naphthalene, and the it provides them directly, where they
live and work, and in places where they organic compounds (e.g., POM, dioxins,
IARC has reevaluated naphthalene and furans) and inorganic compounds (e.g.,
re-classified it as Group 2B: possibly enjoy recreational opportunities.
Visibility is also highly valued in nitrate, sulfate) to terrestrial and aquatic
carcinogenic to humans.278 Naphthalene ecosystems. The chemical form of the
also causes a number of chronic non- significant natural areas such as
national parks and wilderness areas and compounds deposited depends on a
cancer effects in animals, including variety of factors including ambient
abnormal cell changes and growth in special emphasis is given to protecting
visibility in these areas. For more conditions (e.g., temperature, humidity,
respiratory and nasal tissues.279
information on visibility, see the final oxidant levels) and the sources of the
i. Other Air Toxics 2004 PM AQCD as well as the 2005 PM material. Chemical and physical
Staff Paper.282 283 transformations of the compounds occur
In addition to the compounds EPA is pursuing a two-part strategy to in the atmosphere as well as the media
described above, other compounds in address visibility. First, to address the onto which they deposit. These
gaseous hydrocarbon and PM emissions welfare effects of PM on visibility, EPA transformations in turn influence the
from vehicles will be affected by todays has set secondary PM2.5 standards fate, bioavailability and potential
final action. Mobile source air toxic which act in conjunction with the toxicity of these compounds.
compounds that will potentially be establishment of a regional haze Atmospheric deposition has been
impacted include ethylbenzene, program. In setting this secondary identified as a key component of the
polycyclic organic matter, standard, EPA has concluded that PM2.5 environmental and human health
propionaldehyde, toluene, and xylene. causes adverse effects on visibility in hazard posed by several pollutants
Information regarding the health effects various locations, depending on PM including mercury, dioxin and PCBs.285
of these compounds can be found in concentrations and factors such as
EPAs IRIS database.280 Adverse impacts on water quality can
chemical composition and average
occur when atmospheric contaminants
F. Environmental Effects of Criteria and relative humidity. Second, section 169
deposit to the water surface or when
Air Toxic Pollutants of the Clean Air Act provides additional
authority to address existing visibility material deposited on the land enters a
impairment and prevent future visibility waterbody through runoff. Potential
In this section we discuss some of the
impairment in the 156 national parks, impacts of atmospheric deposition to
environmental effects of PM and its
forests and wilderness areas categorized waterbodies include those related to
precursors such as visibility
as mandatory class I federal areas (62 FR both nutrient and toxic inputs. Adverse
impairment, atmospheric deposition,
and materials damage and soiling, as 3868081, July 18, 1997).284 In July effects to human health and welfare can
well as environmental effects associated occur from the addition of excess
with the presence of ozone in the 281 National Research Council, 1993. Protecting nitrogen via atmospheric deposition.
ambient air, such as impacts on plants, Visibility in National Parks and Wilderness Areas. The nitrogen-nutrient enrichment
National Academy of Sciences Committee on Haze contributes to toxic algae blooms and
including trees, agronomic crops and in National Parks and Wilderness Areas. National
Academy Press, Washington, DC. This document is zones of depleted oxygen, which can
277 National Toxicology Program (NTP). (2004).
available in Docket EPAHQOAR20050161. lead to fish kills, frequently in coastal
This book can be viewed on the National Academy waters. Deposition of heavy metals or
11th Report on Carcinogens. Public Health Service, Press Web site at http://www.nap.edu/books/
U.S. Department of Health and Human Services, 0309048443/html/.
other toxins may lead to the human
Research Triangle Park, NC. Available from: 282 U.S. EPA (2004) Air Quality Criteria for ingestion of contaminated fish, human
http://ntp-server.niehs.nih.gov.
278 International Agency for Research on Cancer
Particulate Matter (Oct 2004), Volume I Document ingestion of contaminated water,
No. EPA600/P99/002aF and Volume II Document damage to the marine ecology, and
(IARC). (2002). Monographs on the Evaluation of No. EPA600/P99/002bF. This document is
the Carcinogenic Risk of Chemicals for Humans. available in Docket EPAHQOAR20050161. limits to recreational uses. Several
Vol. 82. Lyon, France. 283 U.S. EPA (2005) Review of the National studies have been conducted in U.S.
279 U. S. EPA. 1998. Toxicological Review of
Ambient Air Quality Standard for Particulate coastal waters and in the Great Lakes
Naphthalene, Environmental Protection Agency, Matter: Policy Assessment of Scientific and
Integrated Risk Information System, Research and
Region in which the role of ambient
Technical Information, OAQPS Staff Paper. EPA
Development, National Center for Environmental 452/R05005. This document is available in PM deposition and runoff is
Assessment, Washington, DC. This material is Docket EPAHQOAR20050161.
available electronically at http://www.epa.gov/iris/ 284 These areas are defined in CAA section 162 as 285 U.S. EPA (2000) Deposition of Air Pollutants
subst/0436.htm. those national parks exceeding 6,000 acres, to the Great Waters: Third Report to Congress.
280 U.S. EPA Integrated Risk Information System wilderness areas and memorial parks exceeding Office of Air Quality Planning and Standards. EPA
(IRIS) database is available at: http://www.epa.gov/ 5,000 acres, and all international parks which were 453/R000005. This document is available in
iris. in existence on August 7, 1977. Docket EPAHQOAR20050161.
investigated.286 287 288 289 290 damage to forest productivity. Potential effects of ozone on forest and other
Atmospheric deposition of nitrogen impacts also include adverse effects to natural vegetation can potentially lead
and sulfur contributes to acidification, human health through ingestion of to species shifts and loss from the
altering biogeochemistry and affecting contaminated vegetation or livestock (as affected ecosystems, resulting in a loss
animal and plant life in terrestrial and in the case for dioxin deposition), or reduction in associated ecosystem
aquatic ecosystems across the U.S. The reduction in crop yield, and limited use goods and services. Lastly, visible ozone
sensitivity of terrestrial and aquatic of land due to contamination. injury to leaves can result in a loss of
ecosystems to acidification from Atmospheric deposition of pollutants aesthetic value in areas of special scenic
nitrogen and sulfur deposition is can reduce the aesthetic appeal of significance like national parks and
predominantly governed by geology. buildings and culturally important wilderness areas. The final 2006 Ozone
Prolonged exposure to excess nitrogen articles through soiling, and can Air Quality Criteria Document presents
and sulfur deposition in sensitive areas contribute directly (or in conjunction more detailed information on ozone
acidifies lakes, rivers and soils. with other pollutants) to structural effects on vegetation and ecosystems.
Increased acidity in surface waters damage by means of corrosion or
erosion. Atmospheric deposition may 4. Environmental Effects of Air Toxics
creates inhospitable conditions for biota
and affects the abundance and affect materials principally by Fuel combustion emissions contribute
nutritional value of preferred prey promoting and accelerating the to ambient levels of pollutants that
species, threatening biodiversity and corrosion of metals, by degrading paints, contribute to adverse effects on
ecosystem function. Over time, and by deteriorating building materials vegetation. PAN is a well-established
acidifying deposition also removes such as concrete and limestone. phytotoxicant causing visible injury to
essential nutrients from forest soils, Particles contribute to these effects leaves that can appear as metallic
depleting the capacity of soils to because of their electrolytic, glazing on the lower surface of leaves
neutralize future acid loadings and hygroscopic, and acidic properties, and with some leafy vegetables exhibiting
negatively affecting forest sustainability. their ability to adsorb corrosive gases particular sensitivity (e.g., spinach,
Major effects include a decline in (principally sulfur dioxide). The rate of lettuce, chard).291 292 293 PAN has been
sensitive forest tree species, such as red metal corrosion depends on a number of demonstrated to inhibit photosynthetic
spruce (Picea rubens) and sugar maple factors, including: the deposition rate and non-photosynthetic processes in
(Acer saccharum), and a loss of and nature of the pollutant; the plants and retard the growth of young
biodiversity of fishes, zooplankton, and influence of the metal protective navel orange trees.294 295 In addition to
macro invertebrates. corrosion film; the amount of moisture its oxidizing capability, PAN
In addition to the role nitrogen present; variability in the contributes nitrogen to forests and other
deposition plays in acidification, electrochemical reactions; the presence vegetation via uptake as well as dry and
nitrogen deposition also causes and concentration of other surface wet deposition to surfaces. As noted in
ecosystem nutrient enrichment leading electrolytes; and the orientation of the Section IX, nitrogen deposition can lead
to eutrophication that alters metal surface. to saturation of terrestrial ecosystems
biogeochemical cycles. Excess nitrogen 3. Plant and Ecosystem Effects of Ozone and research is needed to understand
also leads to the loss of nitrogen the impacts of excess nitrogen
Elevated ozone levels contribute to
sensitive lichen species as they are deposition experienced in some areas of
environmental effects, with impacts to
outcompeted by invasive grasses as well the country on water quality and
plants and ecosystems being of most
as altering the biodiversity of terrestrial ecosystems.296
concern. Ozone can produce both acute
ecosystems, such as grasslands and and chronic injury in sensitive species Volatile organic compounds (VOCs),
meadows. For a broader explanation of depending on the concentration level some of which are considered air toxics,
the topics treated here, refer to the and the duration of the exposure. Ozone have long been suspected to play a role
description in Section 3.6.2 of the RIA. effects also tend to accumulate over the in vegetation damage.297 In laboratory
Adverse impacts on soil chemistry experiments, a wide range of tolerance
growing season of the plant, so that even
and plant life have been observed for low concentrations experienced for a
areas heavily influenced by atmospheric longer duration have the potential to
291 Nouchi I, S Toyama. 1998. Effects of ozone
deposition of nutrients, metals and acid and peroxyacetyl nitrate on polar lipids and fatty
create chronic stress on vegetation. acids in leaves of morning glory and kidney bean.
species, resulting in species shifts, loss Ozone damage to plants includes visible Plant Physiol. 87:638646.
of biodiversity, forest decline and injury to leaves and impaired 292 Oka E, Y Tagami, T Oohashi, N Kondo. 2004.
A physiological and morphological study on the

286 U.S. EPA (2004) National Coastal Condition
photosynthesis, both of which can lead injury caused by exposure to the air pollutant,
Report II. Office of Research and Development/ to reduced plant growth and peroxyacetyl nitrate (PAN), based on the
Office of Water. EPA620/R03/002. This document reproduction, resulting in reduced crop quantitative assessment of the injury. J Plant Res.
is available in Docket EPAHQOAR20050161. yields, forestry production, and use of 117:2736.
287 Gao, Y., E.D. Nelson, M.P. Field, et al. 2002. 293 Sun EJ, MH Huang. 1995. Detection of
sensitive ornamentals in landscaping. In
Characterization of atmospheric trace elements on peroxyacetyl nitrate at phytotoxic level and its
PM2.5 particulate matter over the New York-New
addition, the impairment of effects on vegetation in Taiwan. Atmos. Env.
Jersey harbor estuary. Atmos. Environ. 36: 1077 photosynthesis, the process by which 29:28992904.
1086. the plant makes carbohydrates (its 294 Koukol J, WM Dugger, Jr., RL Palmer. 1967.
288 Kim, G., N. Hussain, J.R. Scudlark, and T.M.
source of energy and food), can lead to Inhibitory effect of peroxyacetyl nitrate on cyclic
Church. 2000. Factors influencing the atmospheric photophosphorylation by chloroplasts from black
a subsequent reduction in root growth valentine bean leaves. Plant Physiol. 42:14191422.
depositional fluxes of stable Pb, 210Pb, and 7Be
and carbohydrate storage below ground,
into Chesapeake Bay. J. Atmos. Chem. 36: 6579. 295 Thompson CR, G Kats. 1975. Effects of
289 Lu, R., R.P. Turco, K. Stolzenbach, et al. 2003. resulting in other, more subtle plant and ambient concentrations of peroxyacetyl nitrate on
Dry deposition of airborne trace metals on the Los ecosystems impacts. navel orange trees. Env. Sci. Technol. 9:3538.
Angeles Basin and adjacent coastal waters. J. These latter impacts include 296 Bytnerowicz A, ME Fenn. 1995. Nitrogen
Geophys. Res. 108(D2, 4074): AAC 111 to 1124. increased susceptibility of plants to deposition in California forests: A Review. Environ.
290 Marvin, C.H., M.N. Charlton, E.J. Reiner, et al. Pollut. 92:127146.
2002. Surficial sediment contamination in Lakes
insect attack, disease, harsh weather, 297 US EPA. 1991. Effects of organic chemicals in
Erie and Ontario: A comparative analysis. J. Great interspecies competition and overall the atmosphere on terrestrial plants. EPA/600/391/
Lakes Res. 28(3): 437450. decreased plant vigor. The adverse 001.
to VOCs has been observed.298 VII. Impacts on Cost of Renewable commodities as projected by AEO and
Decreases in harvested seed pod weight Fuels, Gasoline, and Diesel the FASOM model respectively.
have been reported for the more For our policy case scenario, we used
sensitive plants, and some studies have We have assessed the impacts of the corn prices of $3.60/bu in 2022 with
reported effects on seed germination, renewable fuel volumes required by corresponding DDGS prices of $124.74/
EISA on their costs and on the costs of ton (all 2007$). These estimates are
flowering and fruit ripening. Effects of
the gasoline and diesel fuels into which taken from agricultural economics
individual VOCs or their role in
the renewable fuels will be blended. modeling work done for this rule using
conjunction with other stressors (e.g., More details of feedstock costs are
acidification, drought, temperature the Forestry and Agricultural Sector
addressed in Section VIII.A. Optimization Model (see Section
extremes) have not been well studied. In
a recent study of a mixture of VOCs A. Renewable Fuel Production Costs VIII.A).
including ethanol and toluene on For natural gas-fired ethanol
1. Ethanol Production Costs production producing dried co-product
herbaceous plants, significant effects on
a. Corn Ethanol (currently describes the largest fraction
seed production, leaf water content and
of the industry), in the policy case corn
photosynthetic efficiency were reported A significant amount of work has feedstock minus DDGS sale credit
for some plant species.299 been done in the last decade surveying represents about 54% of the final per-
Research suggests an adverse impact and modeling the costs involved in gallon cost, while utilities, facility,
of vehicle exhaust on plants, which has producing ethanol from corn in order to chemical and enzymes, and labor
in some cases been attributed to serve business and investment purposes comprise about 22%, 13%, 7%, and 4%,
aromatic compounds and in other cases as well as to try to educate energy policy respectively. Thus, the cost of ethanol
to nitrogen oxides.300 301 302 The impacts decisions. Corn ethanol costs for our production is most sensitive to the
of VOCs on plant reproduction may work were estimated using models prices of corn and the primary co-
have long-term implications for developed and maintained by USDA. product, DDGS, and relatively
biodiversity and survival of native Their work has been described in a insensitive to economy of scale over the
species near major roadways. Most of peer-reviewed journal paper on cost range of plant sizes typically seen (40
the studies of the impacts of VOCs on modeling of the dry-grind corn ethanol 100 MMgal/yr).
vegetation have focused on short-term process, and compares well with cost We expect that several process fuels
exposure and few studies have focused information found in surveys of existing will be used to produce corn ethanol
on long-term effects of VOCs on plants. 303 304 The USDA models were (see RIA Section 1.4), which are
vegetation and the potential for adjusted to reflect the energy usage we presented by their projected 2022
anticipate for the average ethanol plant volume production share in Table
metabolites of these compounds to
in 2022 and intermediate years, as well VII.A.11 and cost impacts for each in
affect herbivores or insects.
as the prices of energy and agricultural Table VII.A.12.305
TABLE VII.A.11PROJECTED 2022 BREAKDOWN OF FUEL TYPES USED TO ESTIMATE PRODUCTION COST OF CORN
ETHANOL, PERCENT SHARE OF TOTAL PRODUCTION VOLUME
Plant type Fuel type Total by plant
type
Biomass Coal Natural gas Biogas
% % % % All fuels
Coal/Biomass Boiler ....................................................................... 11 0 ...................... ...................... 11

Coal/Biomass Boiler + CHP .......................................................... 10 4 ...................... ...................... 14
Natural Gas Boiler ......................................................................... ...................... ...................... 49 14 63
Natural Gas Boiler + CHP ............................................................. ...................... ...................... 12 ...................... 12
Total by Fuel Type .................................................................. 21 4 61 14 100
TABLE VII.A.12PROJECTED 2022 BREAKDOWN OF COST IMPACTS BY FUEL TYPE USED IN ESTIMATING PRODUCTION
COST OF CORN ETHANOL, DOLLARS PER GALLON RELATIVE TO NATURAL GAS BASELINE
type
Biomass a Coal Natural gas Biogas b All fuels
Coal/Biomass Boiler ....................................................................... +$0.009 +$0.009
298 Cape JN, ID Leith, J Binnie, J Content, M deposition. Water, Air, and Soil Pollut. 121:327 304 Shapouri, H., Gallagher, P.; USDAs 2002
Donkin, M Skewes, DN Price AR Brown, AD 337. Ethanol Cost-of-Production Survey (published July
Sharpe. 2003. Effects of VOCs on herbaceous plants 301 Ugrekhelidze D, F Korte, G Kvesitadze. 1997.
2005).
in an open-top chamber experiment. Environ. Uptake and transformation of benzene and toluene 305 Projected fuel mix was taken from Mueller, S.,
Pollut. 124:341343. by plant leaves. Ecotox. Environ. Safety 37:2429.
299 Cape JN, ID Leith, J Binnie, J Content, M 302 Kammerbauer H, H Selinger, R Rommelt, A
Energy Research Center at the University of
Chicago; An Analysis of the Projected Energy Use
Donkin, M Skewes, DN Price AR Brown, AD Ziegler-Jons, D Knoppik, B Hock. 1987. Toxic
Sharpe. 2003. Effects of VOCs on herbaceous plants components of motor vehicle emissions for the of Future Dry Mill Corn Ethanol Plants (2010
in an open-top chamber experiment. Environ. spruce Pciea abies. Environ. Pollut. 48:235243. 2030); cost estimates were derived from
Pollut. 124:341343. 303 Kwaitkowski, J.R., Macon, A., Taylor, F., modifications to the USDA process models.
300 Viskari EL. 2000. Epicuticular wax of Norway Johnston, D.B.; Industrial Crops and Products 23
spruce needles as indicator of traffic pollutant (2006) 288296.
TABLE VII.A.12PROJECTED 2022 BREAKDOWN OF COST IMPACTS BY FUEL TYPE USED IN ESTIMATING PRODUCTION
COST OF CORN ETHANOL, DOLLARS PER GALLON RELATIVE TO NATURAL GAS BASELINEContinued
type
Biomass a Coal Natural gas Biogas b All fuels
Coal/Biomass Boiler + CHP .......................................................... 0.021 0.021

Natural Gas Boiler ......................................................................... ...................... ...................... baseline +$0.00
Natural Gas Boiler + CHP ............................................................. ...................... ...................... $0.032
Total by Fuel Type .................................................................. ...................... ...................... ...................... ...................... $0.006

a Assumes biomass has same plant-delivered cost as coal.
b Assumes biogas has same plant-delivered cost as natural gas.
In addition to the primary fuel type fractionation, cold starch fermentation, value co-products that result from the
used by ethanol production facilities, and ethanol dehydration membranes adoption of these new technologies. The
we also anticipate new technologies and will allow ethanol producers to further projected adoption rates of these
efficiency improvements will impact the reduce energy consumption and technologies, and their impacts on the
cost of ethanol production. More produce higher value co-products. production cost of corn ethanol, are
efficient motors and turbines are These technologies are discussed in summarized in Table VII.A.13 below.
currently under development and are sections 1.4.1.3 and 1.5.1.3 of the RIA. More detail on how the USDA models
likely to be adopted by ethanol In order to reflect the cost advantages of were adjusted and the impact this had
producers as ways to lower green house ethanol producers using these on the average price of ethanol
gas emissions and reduce energy costs. technologies the USDA models were production can be found in section
Several new process technologies, adapted to take into account the capital
4.1.1.1 of the RIA.
including corn oil extraction, corn costs, lower energy usage, and higher
TABLE VII.A.13PROJECTED COST IMPACTS OR NEW CORN ETHANOL TECHNOLOGIES

Percent of
plants Cost impact Weighted
Technology adopting (change from cost impact
technology baseline)
(percent)
More Efficient Boilers/Motors/Turbines ....................................................................... 100 Baseline ............................. $0.00/gal

Raw Starch Hydrolysis ................................................................................................ 22 $0.066/gal ....................... $0.015/gal
Corn Fractionation ...................................................................................................... 20 $0.093/gal ....................... $0.019/gal
Corn Oil Extraction ...................................................................................................... 70 $0.079/gal ....................... $0.055/gal
Membrane Separation ................................................................................................ 5 $0.064/gal ....................... $0.003/gal
Total Cost Impact ................................................................................................ N/A N/A ..................................... $0.092/gal
Whether or not the distillers grains TABLE VII.A.14AVERAGE ETHANOL operations, capital depreciation, labor,
and solubles (DGS) are dried also has an COST OF PRODUCTION overhead, and denaturant, minus
impact on the cost of ethanol revenue from sale of co-products. The
production. Drying the DGS is an energy Baseline Cost of Production $1.627/gal capital cost for a 65 MMgal/yr natural
intensive process and results in a (Natural Gas, no new tech- gas fired dry mill plant is estimated at
significant increase in energy usages as nologies, 100% dry DGS). $97MM (the projected average size of
well as cost. The advantages of dry DGS Fuel Type Cost Impact ............. $0.006/ such plants in 2022).
gal Similarly, coal and biomass fired
are reduced transportation costs and a New Technology Cost Impact .. $0.092/
product that is less susceptible to plants were assumed to be 110 MGY in
gal
spoilage, and can therefore be sold to a capacity, with an estimated capital cost
DGS Drying Cost Impact .......... $0.031/
much wider market. If the DGS can be gal of $184MM.306 Despite the lower
sold wet, the cost of ethanol production Average Cost of Ethanol Pro- $1.499/gal operating costs of coal and biomass fired
duction (2022). plants the higher capital costs result, on
can be reduced by $0.083 per gallon. A
average, ethanol produced in a facility
2007 survey of ethanol producers
Based on energy prices from EIAs using coal or biomass as a primary
indicated that 37% of DGS were being energy source results in a per-gallon
sold wet. We anticipate that this Annual Energy Outlook (AEO) April
2009 updated reference case ($116/bbl cost $0.01/gal higher compared to
percentage of wet DGS will remain production using natural gas. See
crude oil), we arrive at a production cost
constant in 2022. The net cost impact of Chapter 4.1 of the RIA for more details.
of $1.50/gal. More details on the ethanol
selling 37% of the DGS wet is an
production cost estimates can be found
average cost reduction of $0.031 per in Chapter 4 of the RIA. This estimate 306 Capital costs for a natural gas fired plant were
gallon. represents the full cost to the plant taken from USDA cost model; incremental costs to
use coal as the primary energy source were derived
operator, including purchase of from conversations with ethanol plant construction
feedstocks, energy required for contractors.
In this cost estimation work, we did feedstock costs include an $11 per dry For the crop residues, we relied on
not assume any pelletizing of DDGS. ton cost to account for the costs of this the FASOM agricultural cost model for
Pelletizing is expected to improve ease grinding operation, regardless of farm harvesting and collection costs.
of shipment to more distant markets, whether this operation occurs in the FASOM estimates corn stover would
which may become more important at field or at the plant gate. cost $34.49 per dry ton at the farm gate.
the larger volumes projected for the This reflects the cost to mow, rake, bale,
future. However, while many in Crop Residue and Energy Crops and field haul the bales and replace
industry are aware of this technology, Crop residue harvest is currently a nutrients. This farm gate cost could be
those we spoke with are not employing secondary harvest; that is they are lower if new equipment is developed
it in their plants, and do not expect harvested or gathered only after the that would allow the farmer to harvest
widespread use in the foreseeable prime crop has been harvested. In most the corn stover at the same time as the
future. According to USDAs model, northern areas, the harvest periods will corn. Energy crops such as switchgrass
pelletizing adds $0.035/gal to the be short due to the onset of winter and miscanthus would be harvested,
ethanol production cost. weather. In some cases, it may be baled, stored and transported in a
Note that the ethanol production cost necessary to gather a full years worth of manner very similar to crop residues.
given here does not account for any residue within just a few weeks. The FASOM model estimates switch
subsidies on production or sale of Consequently, to accomplish this grass, which we are using to be
ethanol, and is independent of the hundreds of pieces of farm equipment representative of all energy crops,
market price of ethanol. will be required for a few weeks each would be available at farm side at a cost
year to complete a harvest. Winter of $40.85.
b. Cellulosic Ethanol
conditions in the South make it Forestry Residue
i. Feedstock Costs somewhat easier to extend the harvest
Cellulosic Feedstock Costs periods; in some cases, it may be Harvest and transport costs for woody
possible to harvest a residue on an as biomass in its different forms vary due
To estimate the cost of producing to tract size, tree species, volumes
cellulosic biofuels, it was first necessary needed basis.
removed, distance to the wood-using/
to estimate the cost of harvesting, During the corn grain harvest,
storage facility, terrain, road condition,
storing, processing and transporting the generally only the cob and the leaves
and many other considerations. There is
feedstocks to the biofuel production above the cob are taken into the a significant variation in these factors
facilities. Ethanol or other cellulosic harvester. Thus, the stover harvest within the United States, so timber
biofuels can be produced from crop would likely require some portion of the harvest and delivery systems must be
residues such as corn stover, wheat, standing-stalks be mowed or shredded, designed to meet constraints at the local
rice, oat, and barley straw, sugar cane following which the entire residue, level. Harvesting costs also depend on
bagasse, and sorghum, from other including that discharged from the the type of equipment used, season in
cellulosic plant matter such as forest combine residue-spreader, would need which the operation occurs, along with
thinnings and forest-fuel removal, to be raked. Balers, likely a mix of large a host of other factors. Much of the
pulping residues, and from the round and large square balers, would forest residue is already being harvested
cellulosic portions of municipal solid follow the rakes. The bales would then by logging operations, or is available
waste (MSW). be removed from the field, usually to from milling operations. However, the
Our feedstock supply analysis the field-side in the first operation of the smaller branches and smaller trees
projected that energy crops would be actual harvest, following which they proposed to be used for biofuel
the most abundant of the cellulosic would then be hauled to a satellite production are not collected for their
feedstocks, comprising about 49% of the facility for intermediate storage. For our lumber so they are normally left behind.
total biomass feedstock inventory. analysis we assumed that bales would Thus, this forest residue would have to
Agricultural residues, predominantly then be hauled by truck and trailer to be collected and transported out of the
corn stover, make up approximately the processing plant on an as needed forest, and then most likely chipped
36% of the total, followed by MSW at basis. before transport to the biofuel plant.
approximately 15% and forestry residue The small grain straws (wheat, rice, In general, most operators in the near
at about 1%. At present, there are no oats, barley, sorghum) are cut near the future would be expected to chip at
commercial sized cellulosic ethanol ground at the time of grain harvest and roadside in the forest, blowing the chips
plants in the U.S. Likewise, there are no thus likely wont require further directly into a chip van. When the van
commercially proven, fully-integrated mowing or shredding. They will likely is full it will be hauled to an end users
feedstock supply systems dedicated to need to be raked into a windrow prior facility and a new van will be moved
providing any of the feedstocks we to baling. Because small grain straws into position at the chipper. The process
mentioned to ethanol facilities of any have been baled and stored for many might change in the future as baling
size, although certain biomass is years, we dont expect unusual systems become economically feasible
harvested for other purposes. For this requirements for handling these or as roll-off containers are proven as a
reason, our feedstock cost estimates are residues. Their harvest and storage costs way to handle logging slash. At present,
projections and not based on any will likely be less than those for corn most of the chipping for biomass
existing market data. stover, but their overall quantity is production is done in connection with
Our feedstock costs include an much less than corn stover (corn stover forest thinning treatments as part of a
additional preprocessing cost that many makes up about 68% of all the crop forest fire prevention strategy. The
other feedstock cost estimates do not residues), so we dont expect their lower major problem associated with
includethus our costs may seem costs to have, individually or collecting logging residues and biomass
higher. We used biofuel plant cost collectively, a huge effect on the overall from small trees is handling the material
estimates provided by NREL which no feedstock costs. Thus, we project that in the forest before it gets to the chipper.
longer includes the cost for finely for several years, the feedstock costs Specially-built balers and roll-off
grinding the feedstock prior to feeding will be largely a function of the cost to containers offer some promise to reduce
it to the biofuel plant. Thus, our harvest, store, and haul corn stover. this cost. Whether the material is
collected from a forest thinning biofuels will be required to account for downstream of where the waste is
operation or a commercial logging those components of the waste. We offer generated puts the cost in the $20 to $30
operation, chips from residues will be three methods for performing such per ton range. There is a risk, though,
dirty and will require screening or some accounting. One method is feedstock that the waste stream could still be
type of filtration at the end-users accounting in which the components of contaminated and this would increase
facility.307 the waste stream are inventoried to the cost of both transporting the
As with agricultural residues and obtain the fraction representing the material and using this material at the
energy crops we relied on the FASOM portion of the waste stream that biofuel plant due to the toxic ash
model for road side costs for forestry qualifies as renewable biomass. The produced which would require disposal
residue. The FASOM model estimates second method is that upon verification at a toxic waste facility. If a less
costs for both hardwood and softwood that the food and yard waste is contaminated stream is desired it would
logging residues. We anticipate that reasonably separated, that 100 percent probably require sorting at the
forestry residue for the production of of such waste may be counted as generation sitethe home or business
cellulosic biofuels would be a mixture renewable biomass for purpose of which would likely be more costly since
of both hard and soft woods. In order to generating RINs. Reasonable separation many more people in society would
obtain a cost for forest residues to be is considered to occur where curbside then have to be involved and special
used as a feedstock for cellulosic recycling is implemented, or where trucks would need to be used. Also,
biofuels we averaged the costs of the technologies are employed that ensure a widespread participation is difficult
hardwood and softwood logging residue maximum degree of separation, when a change in human behavior is
prices reported by FASOM. This including but not limited to material required as some may not be so willing
resulted in a forestry residue price of recovery facilities. Under the second to participate. Offering incentives could
$20.79 at the roadside. Note that this method, the renewable portion of the help to speed the transition to curbside
does not include the cost of the grinding fuel so produced must be verified via a
recycling (i.e., charging a fee for
operation that would be required before carbon dating method (ASTM D6866
nonsorted waste, or paying a small
the forestry residues can be processed method) which is specified and
amount for sorted tree trimmings and
by the biofuel producer. incorporated by reference in todays
construction and demolition waste).
regulation. The third method is the
Municipal Solid Waste Assuming that curbside sorting is
application of a default fraction of 50%
Millions of tons of municipal solid to be applied to the waste stream involved, at least in a minor way, total
waste (MSW) continue to be disposed of purchased and used by the fuel sorting costs might be in the $30 to $40
in landfills across the country, despite producer. per ton range.
recent large gains in waste reduction One method for sorting that would These sorting costs would be offset by
and diversion. The biomass fraction of qualify to ensure reasonable separation the cost savings for not disposing of the
this total stream represents a potentially has occurred is single stream recycling, waste material. Most landfills charge
significant resource for renewable in which the waste is sorted either at a tipping fees, the cost to dump a load of
energy (including electricity and sorting facility or at the landfill prior to waste into a landfill. In the United
biofuels). Because this waste material is dumping. There are two prominent States, the national average nominal
already being generated, collected and options here. The first is that there is no tipping fee increased fourfold from 1985
transported (it would only need to be sorting at the waste creation site, the to 2000. The real tipping fee almost
transported to a different location), its home or business, and thus a single doubled, up from a national average (in
use is likely to be less expensive than waste stream must be sorted at the 1997 dollars) of about $12 per ton in
other cellulosic feedstocks. One facility. The second is that the sorting 1985 to just over $30 in 2000. Equally
important difficulty facing those who occurs at the waste collection facility. important, it is apparent that the tipping
plan to use MSW fractions for fuel The sorting would likely be done by fees are much higher in densely
production is that in many places, even hand or by automated equipment at the populated regions and for areas along
today, MSW is a mixture of all types of facility known as material recovery the U.S. coast. For example, in 2004, the
wastes, including biomaterials such as facilities (MRFs). To do so by hand is tipping fees were $9 per ton in Denver
animal fats and grease, tin, iron, very labor intensive and somewhat and $97 per ton in Spokane. Statewide
aluminum, and other metals, painted slower than using an automated system. averages also varied widely, from $8 a
woods, plastics, and glass. Many of In most cases the by-hand system ton in New Mexico to $75 in New
these materials cant be used in produces a slightly cleaner stream, but Jersey. Tipping fees ranged from $21 to
biochemical and thermochemical the high cost of labor usually makes the 98 per ton in 2006 for MSW and $18/
ethanol production, and, in fact, would automated system more cost-effective. ton to $120/ton for construction and
inflate the transportation costs, impede Perhaps the best approach for low cost demolition waste. It is likely that the
the operations at the cellulosic ethanol and a clean stream is the combination
tipping fees are highest for
plant and cause an expensive waste of hand sorting with automated sorting.
Another method is a combination of contaminated waste that require the
stream for biofuel producers. disposal of the waste in more expensive
In todays regulation the definition of the two which requires that there is at
least some sorting at the home or waste sites that can accept the
renewable biomass includes the contaminated waste as opposed to a
separated yard and food waste portion business which helps to prevent
contamination of the waste material, but composting site. However, this same
of MSW. As discussed in Section
then the final sorting occurs contaminated material would probably
III.B.4.d, we are including as part of
downstream at a sorting site, or at the not be desirable to biofuel producers.

separated yard and food waste,
landfill. Presuming that only the
incidental and post-recycled paper and
We have little data and few estimates uncontaminated cellulosic waste (yard
wood wastes. Thus, firms planning on
for the cost to sort MSW. One estimate trimmings, building construction and
using MSW for producing cellulosic
generated by our Office of Solid Waste demolition waste and some paper) is
307 Personal Communication, Eini C. Lowell, for a combination of mechanically and collected as feedstocks for biofuel
Research Scientist, USDA Forest Service manually sorting a single waste stream plants, the handling and tipping fees are
likely much lower, in the $30 per ton not anticipate any additional costs to agricultural residues or energy crops to
range.308 transport the cellulosic material to the be stored on their farms and transported
The wide variance in the cost of many biofuel production facility if it is to the production facility on an as
of these areas affecting the final cost of sourced from within the same county as needed basis unless they were
MSW as a cellulosic feedstock, the production facility. This is because compensated for the space bales occupy
including costs for collecting and this material is already being collected and damage done to their fields by the
sorting MSW as well as the tipping fees and transported to a sorting center heavy traffic that would be involved in
for disposing of waste materials, makes landfill, and would simply be re-routed the collection of this material from their
approximating the cost of MSW a to the production facility. farms. Bales left exposed to the weather
difficult task. Rather than attempt to For agricultural residues, energy would also decompose much more
build a model ourselves that would crops, and forestry residue, however, rapidly resulting in a higher cost per ton
estimate the cost of sorted MSW, we there will be additional costs associated of usable cellulosic material to biofuel
decided to contact several companies with transporting them from the farm or producers. This loss would be
that are currently planning on using forest side to the production facility. minimized if the bales are stored in
MSW as a feedstock for cellulosic These costs are heavily dependent on covered sheds. Our cost estimating tool
biofuel production. In confidential the distance that the feedstock must be takes these secondary storage costs into
conversations with these companies transported from the places where it is account for agricultural residues and
they indicated that they believed that produced to the biofuel production energy crops. MSW and forestry
sorted MSW would be available at a facility. In order to estimate these costs residues have no secondary storage
near zero cost. In one case they had we created a cost estimating tool that costs as they can be collected and
already begun securing MSW sources of calculated transportation costs based on transported on an as needed basis.
feedstock for future biofuel production the distance the cellulosic material
facilities. They indicated to us that would have to be transported from the Cellulosic Feedstock Cost Curve
while there would be a significant cost farm or forest side to the production
associated with sorting the MSW, this facility. This tool relies on data When the various costs described
would be offset, or nearly so, by income provided by the National Agricultural above are combined, together with the
generated from the sale of recovered Statistics Service for information on the cost of grinding the cellulosic material
materials (paper, metals, plastics, etc.) availability and location of agricultural ($11/ton), the result is not a single cost,
and the avoidance of tipping fees. There residue. Information on abandoned crop but rather a cost curve. This is due to
would still, however, be some costs land, which was assumed to be the the fact that each feedstock source has
associated with the transportation and source of energy crops, was provided by a unique price based on the FASOM
disposal of materials unfit for the Elliot Campbell at UC Davis. Data on the estimate of the cost of production of the
biofuels production process. Based on availability and location of forest feedstock and the cost of transportation
this information, we conservatively residues was provided by the national and secondary storage (if appropriate),
estimate that MSW would be available forestry service. For more information where feedstocks have the lowest total
for use in a cellulosic biofuel on this secondary storage and cost in the parts of the country where
production process at a cost of $15 per transportation cost estimating tool that the cellulosic plants are likely to be
ton. See section 4.1 of the RIA for we used to estimate transportation costs located. The cost per ton of feedstock is
further discussion on the cost of MSW see Chapter 4.1 of the RIA. lower when the total production of
as a feedstock for cellulosic biofuels We also believe that some cellulosic cellulosic biofuel is low as the cheapest
production. feedstocks will require secondary feedstocks are utilized first. As
storage. Agricultural residues and cellulosic biofuel production increases,
Secondary Storage and Transportation
energy crops will generally be harvested so does the cost of cellulosic feedstocks,
In addition to the roadside costs cited annually, sometimes in time periods as as more expensive sources of feedstock
in the preceding sections, there will also short as a few weeks in order to are used. The cost curve for cellulosic
be a cost to transport the cellulosic complete the harvest before the onset of feedstocks for the production of up to 16
materials from the farm or forest to the billion ethanol equivalent gallons of
winter weather. The large quantity of
production facility. We relied on our cellulosic biofuels is shown in Graph
feedstock required for a commercial
own cost analysis to determine the VIII.A.11 below. The average cost of
scale biofuel production plant makes it
transportation costs. For MSW we do cellulosic feedstock at a production
highly unlikely that a years worth of
feedstock would be stored at the level of 16 billion ethanol equivalent
308 We plan on conducting a more thorough
analysis of tipping fees by waste type for the final production facility. It is also unlikely gallons is $67.42, and is summarized in
rulemaking. that farmers would tolerate the baled Table VII.A.15.
TABLE VII.A.15SUMMARY OF CELLULOSIC FEEDSTOCK COSTS

Ag Residue Switchgrass Forest Residue MSW
36% of Total Feedstock ................. 49% of total Feedstock ................. 1% of Total Feedstock ................. 15% of Total Feedstock
Mowing, Raking, Baling, Hauling, Mowing, Raking, Baling, Hauling, Harvesting, Hauling to Forest Sorting, Contaminant Removal,
Nutrients and Farmer Payment Nutrients and Farmer Payment Edge, $20.79/ton. Tipping Fees Avoided, $15/ton
$34.49/ton. $40.85/ton.
Hauling to Secondary Storage, Secondary Storage, Hauling to Plant

$21.53/ton (average)
Grinding
$11/ton
Total
$67.42/ton
ii. Production Costs for Cellulosic follow-up report which delved deeper the RFS standard is being phased in.
Biofuels into biochemical plant design in areas The specific years assessed by NREL
In this section, we discuss the cost to that it had identified in the 1999 report were 2010, 2015 and 2022. The year
biochemically and thermochemically as deserving for additional research. 2010 technology essentially represents
convert cellulosic feedstocks into fuel Again, the 2002 report estimated the the status of todays biochemical
ethanol. ethanol production cost for an nth cellulosic plants. The year 2015
generation biochemical cellulosic technology captures the expected near-
Biochemical Ethanol ethanol plant. These reports not only term improvements including the rapid
The National Renewable Energy helped to inform policy makers on the improvements being made in enzyme
Laboratory has been evaluating the state likely capability and cost for technology. The year 2022 technology
of biochemical cellulosic plant biochemically converting cellulose to captures the cost of mature biochemical
technology over the past decade or so, ethanol, but it helped to inform cellulosic plant technology. Table
and it has identified principal areas for biochemical technology researchers on
VII.A.16 summarizes NRELs estimated
improvement. In 1999, it released its the most likely technology

and projected production costs for
first report on the likely design concept improvements that could be
incorporated into these plant designs. biochemical cellulosic ethanol plant
for an nth generation biochemical technology for their projected year 2022
cellulosic ethanol plant which projected To comply with the RFS 2 technology in 2007 dollars reflecting a
the state of technology in some future requirements, NREL assessed the likely 7 percent before tax rate of return on
year after the improvements were state of biochemical cellulosic plant investment. The biochemical cellulosic
ER26MR10.428</GPH>
adopted. In 2002, NREL released a technology for EPA over the years that
ethanol costs are based on a cellulosic

feedstock cost of 67 per dry ton.
TABLE VII.A.16YEAR 2022 BIOCHEMICAL CELLULOSIC ETHANOL PRODUCTION COSTS PROVIDED BY NREL
[2007 dollars and 7% before tax rate of return]
Year technology 2022
Plant Size .................................................................................................................................................................. 71

MMgal/yr
Capital Cost ............................................................................................................................................................... 199
$MM
$MM/yr c/gal
Capital Cost 7% ROI before taxes ........................................................................................................................... 22 31

Fixed Costs ............................................................................................................................................................... 8 12
Feedstock Cost ......................................................................................................................................................... 52 73
Other raw matl. costs ................................................................................................................................................ 12 16
Enzyme Cost ............................................................................................................................................................. 5 8
Enzyme nutrients ...................................................................................................................................................... 2 2
Electricity ................................................................................................................................................................... 12 16
Waste disposal .......................................................................................................................................................... 1 1
Total Costs ......................................................................................................................................................... 90 127
Thermochemical Ethanol over a catalyst which converts the assessment that may not be achievable
Thermochemical conversion is syngas to mixed alcoholsmainly within the timeframe of our program,
another reaction pathway which exists methanol. The methanol can be reacted EPA contracted NREL to assess the costs
for converting cellulose to ethanol. further to ethanol. for a thermochemical technology which
Thermochemical technology is based on NREL has authored a thermochemical produces mixed alcohols for years 2010,
the heat and pressure-based gasification report: Phillips, S Thermochemical 2015 and 2022. Table VII.A.17
or pyrolysis of nearly any biomass Ethanol via Indirect Gasification and summarizes NRELs estimated and
feedstock, including those weve Mixed Alcohol Synthesis of projected production costs for
highlighted as likely biochemical Lignocellulosic Biomass; April, 2007, biochemical cellulosic ethanol plant
feedstocks. The syngas could then be which already provided a cost estimate. technology for their projected year 2022
converted into mixed alcohols, However, this report only hypothesized technology in 2007 dollars reflecting a
hydrocarbon fuels, chemicals, and how a thermochemical ethanol plant 7 percent before tax rate of return on
power. In the case that the syngas is could achieve production costs at a very investment. The costs are based on a
converted to ethanol, a possible means low cost of $1 per gallon. Rather than cellulosic feedstock cost of 67 per dry
for doing so would be to pass the syngas rely on a very aggressively analyzed cost ton.
TABLE VII.A.17YEAR 2022 THERMOCHEMICAL CELLULOSIC PRODUCTION COSTS OF MIXED ALCOHOLS PROVIDED BY
NREL
Year technology 2022
Plant Size .................................................................................................................................................................. 72.7 Total Alcohol.

MMgal/yr .................................................................................................................................................................... 61.9 Ethanol.
Capital Cost ............................................................................................................................................................... 207.
$MM
$MM/yr c/gal
Capital Cost 7% ROI before taxes ........................................................................................................................... 23 37

Fixed Costs ............................................................................................................................................................... 13 21
Feedstock Cost ......................................................................................................................................................... 52 85
Coproduct Credit ....................................................................................................................................................... 13 21
Other Raw Material, Waste Disposal and Catalyst Costs ........................................................................................ 1 4
Total Costs ................................................................................................................................................................ 76 126

Cost estimates for both biochemical of the biochemical and thermochemical mixed alcohols, a Fischer Tropsch
and thermochemical ethanol pathways cellulosic ethanol costs. reactor can be added to convert the
ended up being ultimately identical. For syngas to diesel fuel and naphtha. This
BTL Diesel Fuel
our cost analysis, we based the technology is commonly termed
cellulosic ethanol costs on the average If cellulose is converted to syngas, biomass-to-liquids (BTL) because of its
rather than converting the syngas to similarity to gas-to-liquids and coal-to-
liquids technology. Diesel fuels higher refinery reformers since it does not costs for BTL diesel fuel and naphtha.
energy density per gallon than ethanol contain the naphthenic compounds that Like the other technologies, we asked
and even biodiesel provides it an are necessary for octane improvement for cost estimates for the same years
inherent advantage over these other by those units. Because of the large assessed above for cellulosic ethanol
fuels. In addition, BTL diesel fuel can be amount of octane rich ethanol which is which was for 2010, 2015 and 2022,
more easily distributed from production expected to be made available from both however, NREL did not believe that the
to retail outlets and used by motor corn and cellulose, it could be that BTL costs would change that much over this
vehicles. The diesel fuel produced by naphtha could be blended along with time span. So NREL only provided the
the Fischer Tropsch process tends to be the ethanol into the gasoline pool. costs for 2022, advising us that the costs
comprised of paraffins which provide a Rather than prejudge how this naphtha would only be slightly less for earlier
much higher cetane number than may be utilized in the future, for our years, and most of that difference would
petroleum diesel fuel, with a downside cost analysis we simply assigned it a because of the poorer economies of scale
of poorer cloud point which reduces its coproduct credit. So we set the BTL for the initial smaller sized plants.
widespread use in cold temperatures. naphtha cost to be 83% as much of the Table VII.A.18 summarizes NRELs
The naphtha produced by the BTL cost of BTL diesel fuel based on its estimated and projected production
process is also largely comprised of relative energy density. costs for a thermochemical Fischer
paraffins, however, as a gasoline Although there were several studies Tropsch biochemical cellulosic ethanol
blendstock it is poor because of its very available which provided costs plant technology for their projected year
low octane (potentially as low as 50 estimates for BTL diesel fuel, they did 2022 technology in 2007 dollars
octane). This material could be not provide sufficient detail to reflecting a 7 percent before tax rate of
processed by refinery isomerization understand all the cost elements of BTL return on investment. The costs are
units raising its octane to perhaps 70 diesel fuel and naphtha. EPA therefore based on a cellulosic feedstock cost of
octane, but it cannot be processed by asked NREL to estimate the production 67 per dry ton.
TABLE VII.A.18YEAR 2022 PRODUCTION COSTS OF THERMOCHEMICAL (BTL) CELLULOSIC FISCHER TROPSCH DIESEL
FUEL PROVIDED BY NREL
33.2 Diesel fuel

Plant Size MMgal/yr 49.4 all liquid
Capital Cost $MM .................................................................................................................................................................... 346

Capital Cost 7% ROI before taxes ($MM/yr) .......................................................................................................................... 38
Fixed Costs ($MM/yr) .............................................................................................................................................................. 18
Feedstock Cost ($MM/yr) ........................................................................................................................................................ 52
Coproduct Credit ($MM/yr)a .................................................................................................................................................... 32
Other raw matl. Costs ($MM/yr) .............................................................................................................................................. 1.5
Waste Disposal and Catalyst Costs ($MM/yr) ........................................................................................................................ 1.5
Total Costs ($MM/yr) ............................................................................................................................................................... 79
Total Costs (cents/gallon of diesel fuel) .................................................................................................................................. 237
a Based on a naphtha coproduct value of 198 cents per gallon.
Other Cellulosic Diesel Fuel Costs c. Imported Sugarcane Ethanol as energy costs at the plant. Another
We based our imported ethanol fuel possible difference in production cost
For our volumes analysis, we estimates is whether or not the estimates
assumed early on for our final rule costs on cost estimates of sugarcane
ethanol in Brazil. Generally, ethanol are referring to hydrous or anhydrous
analysis that there would likely be ethanol. Costs for anhydrous ethanol
from sugarcane produced in developing
several different cellulosic biofuel (for blending with gasoline) are
countries with warm climates is much
technologies, other than BTL, producing typically several cents per gallon higher
cheaper to produce than ethanol from
cellulosic diesel fuel. However, we were grain or sugar beets. This is due to than hydrous ethanol (for use in
either not able to obtain cost favorable growing conditions, relatively dedicated ethanol vehicles in Brazil).309
information from them, or we were low cost feedstock and energy inputs, It is not entirely clear from the majority
uncertain enough about their future that and other cost reductions gained from of studies whether reported costs are for
we felt that we should not base the cost years of experience. hydrous or anhydrous ethanol. Yet
of the program on them. For example, As discussed in Chapter 4 of the RIA, another difference could be the slate of
Cello Energy has already built a our literature search of production costs products the plant is producing, for
cellulosic diesel fuel facility in Alabama for sugar cane ethanol in Brazil example, future plants may be dedicated
here in the US with projected costs of indicates that production costs tend to ethanol facilities while others involve
about one dollar per gallon of diesel range from as low as $0.57 per gallon of the production of both sugar and
fuel. However, the facility has had ethanol to as high as $1.48 per gallon of ethanol in the same facility. Due to
difficulty operating as designed. As a ethanol. This large range for estimating economies of scale, production costs are
result, perhaps very conservatively, we production costs is partly due to the also typically smaller per gallon for
assumed that the other cellulosic diesel significant variations over time in larger facilities.
fuel costs would be the same as the BTL exchange rates, costs of sugarcane and The study by OECD (2008) entitled
diesel fuel costs, and used the 237 cents oil products, etc. For example, earlier Biofuels: Linking Support to
per gallon cost for BTL diesel fuel for estimates may underestimate current
the entire cost for cellulosic diesel fuel. crude and natural gas costs which 309 International Energy Agency (IEA), Biofuels
influence the cost of feedstock as well for Transport: An International Perspective, 2004.
Performance, appears to provide the assumptions made for the study, which 50% with an 8% interest rate and a
most recent and detailed set of are shown in Table VII.A.19. The selling of surplus power at $57 per
assumptions and production costs. As estimate assumes an ethanol-dedicated MWh.
such, our estimate of sugarcane mill and is based off an internal rate of
production costs primarily relies on the return of 12%, a debt/equity ratio of
TABLE VII.A.19COST OF PRODUCTION IN A STANDARD ETHANOL PROJECT IN BRAZIL

Sugarcane Productivity ................................................................................................................................. 71.5 t/ha.
Sugarcane Consumption .............................................................................................................................. 2 million tons/year.
Harvesting days ............................................................................................................................................ 167.
Ethanol productivity ...................................................................................................................................... 85 liters/ton (22.5 gal/ton).
Ethanol Production ....................................................................................................................................... 170 million liters/year (45 MGY).
Surplus power produced ............................................................................................................................... 40 kWh/ton sugarcane.
Investment cost in mill .................................................................................................................................. USD 97 million.
Investment cost for sugarcane production ................................................................................................... USD 36 million.
O & M (Operating & Maintenance) costs ..................................................................................................... $0.26/gal.
Variable sugarcane production costs ........................................................................................................... $0.64/gal.
Capital costs ................................................................................................................................................. $0.49/gal.
Total production costs .................................................................................................................................. $1.40/gal.
The estimate above is based on the production of ethanol from 6,000 liters/ production of excess electricity. The
costs of producing ethanol in Brazil on ha (at 85 liters/ton sugarcane in 2005) to production costs estimates in the OECD
average, today. However, we are 10,400 liters/ha (at 109 liters/ton study assumes an excess of 40 kWh per
interested in how the costs of producing sugarcane) by 2025.314 Although not ton sugarcane, however, future
ethanol will change by the year 2022. reflected here, there could also be cost sugarcane plants are expected to
Although various cost estimates exist, and efficiency improvements related to produce 135 kWh per ton sugarcane
analysis of the cost trends over time feedstock collection, storage, and assuming the use of higher efficiency
shows that the cost of producing ethanol distribution. condensing-extraction steam turbine
in Brazil has been steadily declining Assuming that ethanol productivity (CEST) systems and use of 40% of
due to efficiency improvements in cane increases to 100 liters/ton by 2015 and available straw.315 Assuming excess
production and ethanol conversion 109 liters/ton by 2025, variable electricity is sold for $57 per MWh, the
processes. Between 1980 and 1998 (total sugarcane ethanol production costs are production of 95 kWh per ton would be
span of 19 years) ethanol cost declined be expected to decrease to equivalent to a credit of $0.22 per gallon
by approximately 30.8%.310 This change approximately $0.51/gal from $0.64/gal ethanol produced. We have included
in the cost of production over time in since less feedstock is needed to this potential additional credit from
Brazil is known as the ethanol cost produce the same volume of ethanol greater use of bagasse and straw in our
Learning Curve. using the estimates from estimates at this time, calculated as a
The change in ethanol costs will Table VII.A.17, above. We assumed a decrease in operating costs from $0.26
depend on the likely productivity gains linear decrease between data points for per gallon to $0.04 per gallon.
and technological innovations that can 2005, 2015, and 2025. Adding operating It is also important to note that
be made in the future. As the majority ($0.26/gal) and capital costs ($0.49/gal) ethanol production costs can increase if
of learning may have already occurred, from Table VII.A.17, to a sugarcane the costs of compliance with various
it is likely that the decline in sugarcane cost of $0.51/gal, total production costs sustainability criteria are taken into
ethanol costs will be less drastic in the are $1.26/gal in 2022. account. For instance, using organic or
future as the production process and Brazil sugarcane producers are also green cane production, adopting higher
cane practices have matured. Industrial expected to move from burned cane wages, etc. could increase production
efficiency gains are already at about manual harvesting to mechanical costs for sugarcane ethanol.316 Such
85% and are expected to increase to harvesting. As a result, large amounts of sustainability criteria could also be
90% in 2015.311 Most of the straw are expected to be available. Costs applicable to other feedstocks, for
productivity growth is expected to come of mechanical harvesting are lower example, those used in corn- or soy-
from sugarcane production, where compared to manually harvesting, based biofuel production. If these
yields are expected to grow from the therefore, we would expect costs for measures are adopted in the future,
current 70 tons/ha, to 96 tons/ha in sugarcane to decline as greater production costs will be higher than we
2025.312 Sugarcane quality is also sugarcane producers move to have projected.
expected to improve, with sucrose mechanical harvesting. However, diesel In addition to production costs, there
content growing from 14.5% to 17.3% use increases with mechanical are also logistical and port costs. We
in 2025.313 All productivity gains harvesting and with diesel fuel prices used the report from AgraFNP to
together could allow the increase in the expected to increase in the future, costs estimate such costs since it was the only
may be higher than expected. Therefore, resource that included both logistical
310 Goldemberg, J. as sited in Rothkopf, Garten, A we have not assumed any changes to
harvesting costs due to the switchover
Blueprint for Green Energy in the Americas, 2006. 315 Macedo. I.C., Green house gases emissions in
311 Unicamp A Expansao do Proalcool como from manual harvesting to mechanical the production and use of ethanol from sugarcane
Programa de Desenvolvimento Nacional. harvesting. in Brazil: The 2005/2006 Averages and a Prediction
Powerpoint presentation at Ethanol Seminar in As more straw is expected to be for 2020, Biomass and Bioenergy, 2008.
BNDES, 2006. As sited in OECD, Biofuels: Linking 316 Smeets E, Junginger M, Faaij A, Walter A,
Support to Performance, ITF Round Tables No. collected at future sugarcane ethanol
Dolzan P, Turkenburg W, The sustainability of
138, March 2008. facilities, there is greater potential for Brazilian EthanolAn Assessment of the
312 Ibid.
possibilities of certified production, Biomass and
313 Ibid. 314 Ibid. Bioenergy, 2008.
and port costs. The total average respectively, as shown in Table VII.A.1
logistical and port cost for sugarcane 10.
ethanol is $0.20/gal and $0.09/gal,
TABLE VII.A.110IMPORTED ETHANOL COST AT PORT IN BRAZIL

[2006 $]
Logistical Port cost

costs
Region US
US ($/gal)
($/gal)
NE Sao Paulo .......................................................................................................................................................... 0.150 0.097

W Sao Paulo ............................................................................................................................................................ 0.210 0.097
SE Sao Paulo .......................................................................................................................................................... 0.103 0.097
S Sao Paulo ............................................................................................................................................................. 0.175 0.097
N Parana .................................................................................................................................................................. 0.238 0.097
S Goias .................................................................................................................................................................... 0.337 0.097
E Mato Grosso do sul .............................................................................................................................................. 0.331 0.097
Triangulo mineiro ..................................................................................................................................................... 0.207 0.097
NE Cost ................................................................................................................................................................... 0.027 0.060
Sao Francisco Valley ............................................................................................................................................... 0.193 0.060
Average .................................................................................................................................................................... 0.197 0.089
Total fuel costs must also include the this may seem to be an advantage for arriving in the U.S. from Caribbean
cost to ship ethanol from Brazil to the Caribbean countries, it should be noted Basin Initiative (CBI) countries are
U.S. The average cost from 20062008 that there would be some additional exempt from the tariff. In addition, all
was estimated to be approximately cost for shipping ethanol from Brazil to imports are given an ad valorem tax of
$0.17 per gallon of ethanol.317 Costs the Caribbean country. Therefore, we 2.5% for undenatured ethanol and a
were estimated as the difference assume all costs for shipping ethanol to 1.9% tax for denatured ethanol. We
between the unit value cost of insurance be $0.17 per gallon regardless of the assumed an ad valorem tax of 2.5% for
and freight (CIF) and the unit value country importing ethanol to the U.S. all ethanol. Thus, including tariffs and
Total imported ethanol fuel costs (at
customs price. The average cost to ship ad valorem taxes, the average cost of
U.S. ports) prior to tariff and tax for
ethanol from Caribbean countries (e.g. imported ethanol is shown in Table
2022 is shown in Table VII.A.111, at
El Salvador, Jamaica, etc.) to the U.S. $1.50/gallon. Direct Brazilian imports VII.A.112 in the Brazil Direct w/Tax &
from 20062008 was approximately are also subject to an additional $0.54 Tariff and CBI w/Tax columns for
$0.13 per gallon of ethanol. Although per gallon tariff, whereas those imports 2022.
TABLE VII.A.111AVERAGE IMPORTED ETHANOL COSTS PRIOR TO TARIFF AND TAXES IN 2022
Transport cost
Sugarcane production cost Operating cost Capital cost Logistical cost Port cost from port to Total cost
($/gal) ($/gal) ($/gal) ($/gal) ($/gal) US ($/gal)
($/gal)
0.51 .......................................................... 0.04 0.49 0.20 0.09 0.17 1.50
TABLE VII.A.112AVERAGE IMPORTED ETHANOL COSTS IN 2022

Brazil direct w/
Brazil direct CBI CBI w/tax
tax & tariff
($/gal) ($/gal) ($/gal)
($/gal)
1.50 .............................................................................................................................................. 2.08 1.50 1.54
2. Biodiesel and Renewable Diesel a. Biodiesel required to utilize feedstocks with high
Production Costs free fatty acid content.
Biodiesel production costs for this
Biodiesel and renewable diesel rule were estimated using two versions The production model simulates a 10
production costs are primarily a of a biodiesel production facility model million-gallon-per-year plant operating
a continuous flow transesterification
function of the feedstock cost, and to a obtained from USDA, one using
process. USDA used the SuperPro

much lesser extent, the capital and other degummed soy oil as a feedstock and
Designer chemical process simulation
operating costs of the facility. the other using yellow grease. The
software to estimate heat and material
biodiesel from yellow grease model
flowrates and equipment sizing.
includes acid pre-treatment steps Outputs from this software were then
317 Official Statistics of the U.S. Department of
Commerce, USITC.
combined in a spreadsheet with acid pre-treatment facilities, and is publicly by UOP, Inc. and overall
equipment, energy, labor, and chemical projected by the FASOM model to have project cost of $150MM taken from
costs to generate a final estimate of about one half the value of soy oil. Syntroleum, Corp. materials.320 321 The
production cost. The model is described Finally, we project a small amount of feedstock was assumed to be yellow
in a 2006 publication in Bioresource algae-derived oil (or similarly advanced grease or similar rendered material.
Technology, peer-reviewed scientific feedstock) will be used by 2022. As algal Hydrogen and co-product prices were
journal. 318 For the purpose of biofuel technology is still in a relatively taken from refinery modeling done for
estimating biodiesel production cost for early stage of development, there are this rule, while an aggregate figure of
this rulemaking, a model with updated many possible configurations for the $0.069/gal, derived from the UOP
facility, labor, and chemical costs was production of this material and thus publication, was used to cover other
used. Installed capital cost was $11.9 there is considerable uncertainty variable operating costs besides
million, and energy prices were taken regarding process performance and cost. hydrogen (includes labor, catalyst, and
from AEO 2009: natural gas at $7.75/ Based on work done by NREL at the utilities). Cost contributions of various
MMBtu and electricity at $0.066/kWh. time of this rulemaking, we assumed a process aspects are shown in Table
Capital charge plus maintenance was production cost of $0.68/lb for this VII.A.22. More details are available in
assumed to be 14% of total capital per feedstock.319 More details on how this Chapter 4.1 of the RIA.
year. Table VII.A.21 shows the estimate was made can be found in
production cost allocation for the soy Chapter 4.1 of the RIA. TABLE VII.A.22PRODUCTION COST
oil-to-biodiesel facility as modeled in A co-product of transesterification is ALLOCATION FOR RENEWABLE DIE-
the 2022 policy case. crude glycerin. With the upswing in
SEL FOR POLICY CASE IN 2022
worldwide biodiesel production in
TABLE VII.A.21PRODUCTION COST recent years, its price has been
Contribution to
ALLOCATION FOR SOY BIODIESEL depressed in most markets. Closure of Cost category cost
remaining petrochemical glycerin (percent)
FOR POLICY CASE IN 2022
plants, along with development of
processes to make new use of it as a Feedstock ........................... 78
Contribution to Capital & Facility ................. 11
Cost category cost feedstock for other commodity
(percent) chemicals has provided some support Hydrogen ............................ 7
Other variable costs ........... 3
for a price recovery. Some companies
Soy Oil ................................ 85 are experimenting with using glycerin
Other Materials a ................. 6 as a fuel for process or facility heat. We Table VII.A.23 summarizes the
Capital & Facility ................. 6 production costs for biodiesel and
expect new uses for this coproduct to
Labor ................................... 2
continue growing to reach an renewable diesel as estimated for this
Utilities ................................ 2
equilibrium with supply at or near its rule, as well as their projected volume
a Includes acids, bases, methanol, catalyst. heating value, which we estimate to be contribution in 2022. Biodiesel made
Soy oil costs were generated by the $0.15/lb. As a result, the sale of this from yellow grease is projected to be
FASOM agricultural model (described material as a co-product reduces about 10% cheaper to produce despite
in more detail in Section VIII.A). biodiesel production cost by about its higher production cost due to the
Historically, the majority of biodiesel $0.13/gal in our control case. large influence of the feedstock cost,
production in the U.S. has used soy oil, which is about 30% lower. Biodiesel
b. Renewable Diesel
a relatively high-value feedstock, but a from extracted corn oil is expected to be
growing fraction of biodiesel is being Renewable diesel production can significantly cheaper to produce than
made from yellow grease (rendered or occur in a few different configurations: this, again due to the projected
reclaimed oil that is not suitable for use within the boundaries of an existing feedstock cost being about half that of
in food products). This material has refinery where it may or may not be soy oil. Finally, renewable diesel from
historically sold for about 70% of the coprocessed with petroleum, or at a stand-alone production is estimated in
stand-alone plant that may or may not this analysis to have total production
value of virgin soy oil. However,
be co-located with other facilities that cost similar to biodiesel from yellow
conversion of yellow grease into
provide utilities or hydrogen. Given grease. However, given the business
biodiesel requires an additional acid
changes in the tax incentives as well as partnership between the fuel production
pre-treatment step, and therefore the
current project announcements, we have and animal processing companies who
processing costs are higher than for
chosen to project that all renewable have announced or are constructing the
virgin soy oil (4050 cents/gal if
diesel will be produced in stand-alone U.S. plants to date, we expect the
feedstock costs are equal), reducing the
facilities, not coprocessing with feedstock being used there may be made
attractiveness of the cheaper feedstock
petroleum. The 75 MMgal/yr available at a lower cost than we are
to some extent. Another feedstock we
Syntroleum facility scheduled to come projecting here for yellow grease.
expect to be used in significant online in Geismar, Louisiana, in 2010 is
quantities in the future is distressed an example of such a plant.
corn oil extracted from process streams Our production cost estimates used
320 A New Development in Renewable Fuels:
that make up distillers grains. This Green Diesel, AM0710 Annual Meeting NPRA,
hydrogen requirements made available March 1820, 2007.
material will also require processing in 321 Taken from Syntroleum Investor Presentation,
319 See Technical Memo in the docket entitled November 5, 2009. See http://
318 Haas,M.J, A process model to estimate Techno-economic analysis of microalgae-derived www.syntroleum.com/Presentations/

biodiesel production costs, Bioresource Technology biofuel production by Ryan Davis of the National SyntroleumInvestorPresentation.
97 (2006) 671678. Renewable Energy Laboratory. November%205.2009.FINAL.pdf.
TABLE VII.A.23SUMMARY OF COST FOR BIODIESEL AND RENEWABLE DIESEL FOR POLICY CASE IN 2022
[2007$]
Feedstock Fuel produc-

Fuel/feedstock price tion cost
($/lb) ($/gal)
Biodiesel/soy oil ....................................................................................................................................................... 0.33 a 2.73

Biodiesel/corn oil extraction at ethanol plants ......................................................................................................... 0.17 a 1.90
Biodiesel/yellow grease or other rendered fats ....................................................................................................... 0.23 b 2.43
Biodiesel/algae or other advanced virgin oil feedstock ........................................................................................... 0.58 c 4.52 d
Renewable diesel/yellow grease or other rendered fats ......................................................................................... 0.23 b 2.42
a Taken from outputs of FASOM model.
b Derived from outputs of FASOM model, assuming 70% value of soy oil.
c Derived from figures in a Technical Memo by Ryan Davis of NREL entitled Techno-economic analysis of microalgae-derived biofuel produc-
tion (available in docket).
d This production cost assumes this advanced feedstock has very low free fatty acid content.
B. Biofuel Distribution Costs the volumes of renewable fuels substantially under the three control
Our analysis of the costs associated projected to be used under RFS2 is scenarios that we analyzed. Table
with distributing the volume of biofuels contained in Section IV.C. of todays VII.B.11 contains our estimates of the
that we project will be used under RFS2 preamble and 1.6 of the RIA. There will fuel distribution infrastructure capital
focuses on: (1) The capital cost of be ancillary costs associated with costs to support the use of the
making the necessary upgrades to the upgrading the basic rail, marine, and additional ethanol that we project will
fuel distribution infrastructure system road transportation nets to handle the be used under the three use scenarios by
directly related to handling these fuels, increase in freight volume due to the 2022 relative to the RFS1 reference case
and (2) the ongoing additional freight RFS2. We have not sought to quantify forecast of 7.05 BGY.324 The total
costs associated with shipping these ancillary costs because (1) the estimated capital costs under our
renewable fuels to the point where they growth in freight traffic that is primary case are estimated at $7.90
are blended with petroleum-based attributable to RFS2 represents a small billion which when amortized equates
fuels.322 The following sections outline fraction of the total anticipated increase to approximately 6 cents per gallon of
our estimates of the distribution costs in freight tonnage (approximately 3% of the additional ethanol volume that
for the additional volumes of ethanol, rail traffic by 2022, see Section IV.C.1), would be used in 2022 in response to
cellulosic distillate fuel, renewable and (2) we do not believe there is an the RFS2 standards relative to the RFS1
diesel fuel, and biodiesel that we project adequate way to estimate such non- reference case.325 Capital costs under
would be used in response to the RFS2 direct costs. the low-ethanol and high-ethanol
standards under the three control 1. Ethanol Distribution Costs scenarios are estimated at $5.47 billion
scenarios that we analyzed relative to and $11.92 billion respectively. This
the two reference cases.323 The capital costs to upgrade the equates to 6 and 5 cents per gallon
A discussion of the capability of the distribution system to handle the respectively relative to the RFS1
transportation system to accommodate increased volumes of ethanol vary reference case.
TABLE VII.B.11ESTIMATED ETHANOL DISTRIBUTION INFRASTRUCTURE CAPITAL COSTS UNDER THE RFS1 REFERENCE
CASE
Million $
Low-ethanol Primary High-ethanol

scenario scenario scenario
Fixed Facilities:
Marine Import Facilities ........................................................................................................ 49 53 63
Marine Facilities for Shipment Inside U.S. ........................................................................... 98 130 186
Unit Train Receipt Facilities ................................................................................................. 444 586 838
Manifest Rail Receipt Facilities ............................................................................................ 15 20 28
Petroleum Terminals:
Terminal Storage Tanks ....................................................................................................... 859 1,243 2,073
Blending & Misc. Equipment ................................................................................................ 1,006 1,064 1,144
E85 Retail ............................................................................................................................. 1,957 3,293 4,973
Mobile Facilities:
Rail Cars ............................................................................................................................... 884 1,279 2,218
Barges .................................................................................................................................. 53 77 133
Tank Trucks .......................................................................................................................... 107 154 268
322 The anticipated ways that the renewable fuels 324 See Section IV.C. of todays preamble for 325 These capital costs will be incurred
projected to be used in response to the EISA will discussion of the upgrades we project will be incrementally through 2022 as ethanol volumes
be distributed is discussed in Section IV.C. of needed to the distribution system to handle the increase. Capital costs for tank trucks were
todays preamble. increase in ethanol volumes under EISA. The amortized over 10 years with a 7% cost of capital.
323 Please refer to Section 4.2 of the RIA for
derivation of these estimates is discussed in Section Other capital costs were amortized over 15 years
additional discussion of how these estimates were 4.2 of the RIA. with a 7% return on capital.
derived.
TABLE VII.B.11ESTIMATED ETHANOL DISTRIBUTION INFRASTRUCTURE CAPITAL COSTS UNDER THE RFS1 REFERENCE
CASEContinued
Million $

Total Capital Costs (Million $) ....................................................................................... 5,471 7,898 11,922
Total Capital Costs (cents per gallon ethanol) ............................................................. 6 6 5
Table VII.B.12 contains our estimates estimated capital costs under our reference case. Capital costs under the
of the fuel distribution infrastructure primary case are estimated at $5.50 low-ethanol and high-ethanol scenarios
costs to support the use of the billion which when amortized equates are estimated at $3.02 billion and $9.93
additional ethanol that we project will to approximately 7 cents per gallon of billion respectively. This equates to 8
be used under the three use scenarios by the additional ethanol volume that and 6 cents per gallon respectively
2022 relative to the AEO reference case would be used in 2022 in response to relative to the AEO reference case.
forecast of 13.18 BGY. The total the RFS2 standards relative to the AEO
TABLE VII.B.12ESTIMATED ETHANOL DISTRIBUTION INFRASTRUCTURE CAPITAL COSTS UNDER THE AEO REFERENCE
CASE
Million $

Fixed Facilities:
Marine Import Facilities ........................................................................................................ 49 53 63
Marine Facilities for Shipment Inside U.S. ........................................................................... 76 100 144
Unit Train Receipt Facilities ................................................................................................. 238 434 748
Manifest Rail Receipt Facilities ............................................................................................ 7 12 21
Terminal Storage Tanks ....................................................................................................... 355 739 1,568
Blending & Misc. Equipment ................................................................................................ 345 411 503
E85 Retail ............................................................................................................................. 1,526 2,863 4,893
Mobile Facilities:
Rail Cars ............................................................................................................................... 309 522 1,133
Barges .................................................................................................................................. 16 38 63
Tank Trucks .......................................................................................................................... 68 103 194
Total Capital Costs (Million $) ....................................................................................... 3,025 5,505 9,935
Total Capital Costs (cents per gallon ethanol) ............................................................. 8 7 6
We estimate that ethanol freight costs detailed projections of which costs are estimated at 21, 20, and 18
under the primary and high-ethanol transportation modes and combination cents per gallon respectively for the
scenarios would be 13 cents per gallon of modes (e.g. unit train to barge) are low-ethanol, primary, and high-ethanol
on a national average basis. Ethanol best suited for delivery of ethanol to scenarios.
freight costs under the high-ethanol specific markets considering ethanol As discussed in Section IV.C. of
scenario are estimated at 12 cents per source and end use locations, the todays preamble, ASTM International is
gallon. These estimates are based on an current configuration and projected considering a change to specification on
analysis conducted for EPA by Oak evolution of the distribution system, the minimum ethanol content in E85 to
Ridge National Laboratory (ORNL) and cost considerations for the different facilitate the manufacture of E85 at
which were modified to reflect transportation modes. terminals which meets minimum
projected higher transportation fuel Summing the freight and capital costs volatility specifications using
costs in the future, the likely installation estimates results in an estimate of 19 commonly-available finished gasoline. If
of fewer unit train receipt facilities than cents per gallon for ethanol distribution the current difficulties in blending E85
costs for our primary and low-ethanol to meet minimum volatility
that projected by ORNL based on
scenarios under the RFS1 reference specifications can not be resolved by
industry comments, and to conform to
case. Total ethanol distribution costs lowering the minimum ethanol
the ethanol volumes under the three
under the RFS1 reference case for the concentration of E85, high vapor
control scenarios analyzed in todays pressure blendstocks will need to be
rule.326 The ORNL analysis contains high-ethanol scenario are estimated at
17 cents per gallon. Under the AEO supplied to approximately two thirds of
326 Analysis of Fuel Ethanol Transportation reference case, total ethanol distribution petroleum terminals for blending with
Activity and Potential Distribution Constraints, E85.327 This would necessitate the
prepared for EPA by Oak Ridge National somewhat with increasing ethanol volume. See
Laboratory, March 2009. The ORNL analysis Section 4.2 of the RIA for additional discussion of 327 If this is the case, EPA would need to
indicates that ethanol freight costs decrease the estimation of ethanol freight costs. reconsider its policies regarding what blendstocks
installation of new blending/storage needed to support the use of the maintain sufficient throughput per
equipment at petroleum terminals and projected ethanol volumes under the facility.329
additional butane tank cars and tank EISA would be installed at petroleum
trucks. The capital costs for such 2. Cellulosic Distillate and Renewable
terminals, and half would be installed at
facilities would be $2.2 billion, $1.4 Diesel Distribution Costs
rail terminals. Based on input from
billion, and $0.6 billion under the high- industry and a study conducted for us We chose to evaluate the distribution
ethanol, primary, and low-ethanol by ORNL, we now believe that all unit costs for cellulosic distillate and
scenarios respectively under both train receipt facilities will be installed at renewable diesel together because the
reference cases. By amortizing these new dedicated locations.328 This change same considerations apply to their
capital costs and adding in butane handling in the fuel distribution system
results in the need for additional tank
freight costs, we estimate that the need
truck receipt equipment at terminals and because the projected volume of
to supply special blendstocks at
and additional tank trucks to carry renewable diesel fuel is relatively small.
terminals for E85 blending would add
approximately 1 cent per gallon to ethanol from rail to petroleum terminals Table VII.B.21 contains our estimates
ethanol distribution costs for all three compared to the NPRM. However, we of the fuel distribution infrastructure
analysis scenarios relative to the RFS1 also received additional input from capital costs to support the use of the
reference case. Relative to the AEO industry on the cost of unit train cellulosic distillate and renewable
reference case, the additional cost facilities which indicates that such diesel fuel that we project will be used
would be approximately 2 cents per facilities are not as costly as we under the three use scenarios by 2022
gallon under the primary and low- projected in the NPRM. We also under the RFS1 reference case.330 The
ethanol scenarios, and approximately 1 increased the average E85 facility cost total estimated capital costs by 2022
cent per gallon under the high-ethanol relative to the NPRM to reflect the likely under our primary and low-ethanol
scenario. need for additional E85 dispensers and scenarios are estimated at $1.38 billion
In the NPRM, we estimated that half a larger underground storage tank to and $2.00 billion respectively under the
of the new ethanol rail receipt capability RFS1 reference case.
TABLE VII.B.21ESTIMATED CELLULOSIC DISTILLATE FUEL DISTRIBUTION INFRASTRUCTURE CAPITAL COSTS UNDER THE
RFS1 REFERENCE CASE
Million $

scenario scenario case
Fixed Facilities:
Marine Facilities for Shipment Inside US ............................................................................. 87 56 -
Unit Train Receipt Facilities ................................................................................................. 394 253 ........................
Manifest Rail Receipt Facilities ............................................................................................ 13 8 ........................
Terminal Storage Tanks ....................................................................................................... 218 154 ........................
Blending & Misc. Equipment ................................................................................................ 361 252 ........................
Mobile Facilities:
Rail Cars ............................................................................................................................... 784 552 ........................
Barges .................................................................................................................................. 47 33 ........................
Tank Trucks .......................................................................................................................... 95 ........................ ........................
Total Capital Costs (Million $) ....................................................................................... 1,999 1,375 NA
Total Capital Costs (cents per gallon of cellulosic distillate fuel) ................................. 2 2 NA
Table VII.B.22 contains our estimates reference case. Total capital costs are by rounding when translating these
of the infrastructure changes and estimated at $1.02 and $1.46 billion for costs to a cents-per-gallon basis. When
associated capital costs to support the the primary and low-ethanol scenarios amortized, these capital costs equate to
use of the cellulosic distillate and respectively under the AEO reference approximately 2 cents per gallon for
renewable diesel fuel that we project case. The difference in estimated capital both control scenarios under both
will be used under the three use costs for the two control scenarios under reference cases.331
scenarios by 2022 under the AEO the two reference scenarios is obscured
can be used at petroleum terminals in the 329 This is a sensitivity case that was evaluated in 331 These capital costs will be incurred
manufacture of E85. the NPRM. incrementally through 2022 as ethanol volumes

330 See Section IV.C. of todays preamble for
328 Analysis of Fuel Ethanol Transportation increase. Capital costs for tank trucks were
Activity and Potential Distribution Constraints, discussion of the upgrades we project will be amortized over 10 years with a 7% cost of capital.
needed to the distribution system to handle the Other capital costs were amortized over 15 years
prepared for EPA by Oak Ridge National Laboratory
increase in ethanol volumes under EISA. The with a 7% return on capital.
(ORNL), March 2009. derivation of these estimates is discussed in Section
1.6 of the RIA.
TABLE VII.B.22ESTIMATED CELLULOSIC DISTILLATE FUEL DISTRIBUTION INFRASTRUCTURE CAPITAL COSTS UNDER THE
AEO REFERENCE CASE
Million $

scenario scenario case
Fixed Facilities:
Marine Facilities for Shipment Inside US ............................................................................. 67 43 ........................
Unit Train Receipt Facilities ................................................................................................. 511 315 ........................
Manifest Rail Receipt Facilities ............................................................................................ 15 9 ........................
Terminal Storage Tanks ....................................................................................................... 218 154 ........................
Blending & Misc. Equipment ................................................................................................ 304 223 ........................
Mobile Facilities:
Rail Cars ............................................................................................................................... 784 552 ........................
Barges .................................................................................................................................. 47 33 ........................
Tank Trucks .......................................................................................................................... 90 63 ........................
Total Capital Costs (Million $) ....................................................................................... 2,036 1,392 NA
Total Capital Costs (cents per gallon of cellulosic distillate fuel) ................................................ 2 2 NA
We estimate that cellulosic distillate currently located in the Midwest. TABLE VII.B.31ESTIMATED BIO-
freight costs would be 13 cents per Cellulosic distillate costs should also DIESEL DISTRIBUTION INFRASTRUC-
gallon on a national average basis under tend to be lower than those for ethanol TURE CAPITAL COSTS UNDER THE
both the primary and low-ethanol because cellulosic distillate fuel blends RFS1 REFERENCE CASE
scenarios. This estimate is based on the are compatible with existing petroleum
application to cellulosic distillate distribution equipment, whereas there Million $
freight costs of an analysis conducted are special considerations associated
for EPA by Oak Ridge National with the distribution of ethanol. The Fixed Facilities:
Laboratory (ORNL) of ethanol freight most notable of these considerations is Petroleum Terminals:
costs.332 The underlying premise is that Storage Tanks ......................... 411
the need for special fuel retail Blending & Misc. Equipment ... 612
both ethanol and cellulosic distillate
equipment for E85 (as evidenced in Mobile Facilities:
fuel would be handled by the same
types of distribution facilities on the Table VII.B.11). Thus, the cellulosic Rail Cars ................................. 111
journey to petroleum terminals.333 distillate distribution costs estimated Barges ..................................... 53
here are likely to be conservative. Tank Trucks ............................ 25
Summing the freight and capital costs
results in an estimated 15 cents per 3. Biodiesel Distribution Costs Total Capital Costs (Million
gallon in total distribution costs for both $) ...................................... 1,212
the primary and low-ethanol scenarios Table VII.B.31 contains our estimates
under both reference cases. of the infrastructure changes and Total Capital Costs (cents per
The ethanol and cellulosic distillate associated capital costs to support the gallon of biodiesel) .................. 10
distribution cost estimates are based on use of the additional biodiesel that we
the projections of the location of biofuel project will be used under RFS2 by 2022 Table VII.B.32 contains our estimates
production facilities and end use areas relative to the RFS reference case of 300 of the infrastructure changes and
contained in the NPRM. The extent to MGY by 2022.334 The total capital costs associated capital costs to support the
which new biofuel production facilities are estimated at $1.2 billion which use of the additional biodiesel that we
are more dispersed than projected in the equates to approximately 10 cents per project will be used under RFS2 by 2022
NPRM, distribution costs for ethanol gallon of additional biodiesel relative to the AEO reference case of 380
from new production facilities and for MGY. The total capital costs are
volume.335
all cellulosic distillate facilities may estimated at $1.1 billion which equates
tend be lower than those projected by to approximately 10 cents per gallon of
this analysis as the fuel has more additional biodiesel volume.
opportunity to be used locally. This
would potentially be a greater benefit in TABLE VII.B.32ESTIMATED BIO-
lowering cellulosic distillate DIESEL DISTRIBUTION INFRASTRUC-
334 We project that by 2022 300 MGY of biodiesel
distribution costs than overall ethanol TURE CAPITAL COSTS UNDER THE
distribution costs given the large would be used under the RFS1 reference case, 380
MGY of biodiesel would be used under the RFS AEO REFERENCE CASE
number of ethanol production facilities reference case and that a total of 1.67 BGY of
biodiesel would be used under the EISA. Biodiesel Million $
332 Analysis of Fuel Ethanol Transportation use is projected to be the same under all three of
Activity and Potential Distribution Constraints, analysis scenarios. Fixed Facilities:
prepared for EPA by Oak Ridge National 335 These capital costs will be incurred Petroleum Terminals:
Laboratory, March 2009. See Section 4.2 of the RIA
for additional discussion of the estimation of incrementally through 2022 as biodiesel volumes Storage Tanks ......................... 387
cellulosic distillate freight costs. increase. Capital costs for tank trucks were Blending & Misc. Equipment ... 576
333 The same unit train and manifest rail receipt amortized over 10 years with a 7% cost of capital. Mobile Facilities:
facilities would be used to handle shipments of Other capital costs were amortized over 15 years Rail Cars ................................. 105
both fuels. with a 7% return on capital. Barges ..................................... 50
TABLE VII.B.32ESTIMATED BIO- results for estimating the volume of U.S. refineries, while the rest of the
DIESEL DISTRIBUTION INFRASTRUC- displaced petroleum as other economic additional ethanol displaces imported
TURE CAPITAL COSTS UNDER THE factors also come into play. Instead we gasoline or gasoline blendstocks which
AEO REFERENCE CASEContinued conducted an energy balance around the does not affect domestic refining sector
increased use of renewable fuels, costs. To estimate the portion of new
Million $ estimating the energy-equivalent ethanol which displaces U.S. refinery
volume of gasoline or diesel fuel production we relied on some Markal
Tank Trucks ............................ 24 displaced. This allowed us to more refinery modeling conducted for us by
easily apply our best estimates for how DOE. The Markal refinery model models
Total Capital Costs (Million much of the petroleum would displace all the refinery sectors of the world and
$) ...................................... 1,141 imports of finished products versus thus can do a fair job estimating how
Total Capital Costs (cents per crude oil for our energy security renewable fuels would impact imports
gallon of biodiesel) .................. 10 analysis which is discussed in Section of finished gasoline and gasoline
VIII.B of this preamble. blendstocks. The Markal refinery model
We estimate that biodiesel freight As part of this petroleum estimated that 23rds of a reduction in
costs would be 10 cents per gallon on displacement analysis, we accounted for petroleum gasoline demand would be
a national average basis. State biodiesel the change in petroleum demanded by met by a reduction in imported gasoline
use requirements and biodiesel upstream processes related to additional or gasoline blendstocks, while the other
13rd would be met by reduced refining
production locations were taken into production of the renewable fuels as
account in formulating this estimate.336 well as reduced production of production by the U.S. refining sector.
The biodiesel blend ratio was estimated petroleum fuels. For example, growing In the case of biodiesel and renewable
to vary between 2 and 5%. Adding the corn used for ethanol production diesel, all of it is presumed to offset
estimated freight costs to the amortized requires the use of diesel fuel in domestic diesel fuel production. For
capital costs results in an estimate of tractors, which reduces the volume of ethanol, biodiesel and renewable diesel,
total biodiesel distribution costs of 20 petroleum displaced by the ethanol. the amount of petroleum fuel displaced
cents per gallon under both the RFS1 Similarly, the refining of crude oil uses is estimated based on the relative energy
and AEO reference cases. by-product hydrocarbons for heating contents of the renewable fuels to the
within the refinery, therefore the overall fuels which they are displacing. The
C. Reduced U.S. Refining Demand effect of reduced gasoline and diesel savings due to lower imported gasoline
As renewable and alternative fuel use fuel consumption is actually greater and diesel fuel is accounted for in the
increases, the volume of petroleum- because of the additional upstream energy security analysis contained in
based products, such has gasoline and effect. We used the lifecycle petroleum Section VIII.B.
diesel fuel, would decrease. This demand estimates provided for in the For estimating the U.S. refinery
reduction in finished refinery petroleum GREET model to account for the industry cost reductions, we multiplied
products results in reduced refinery upstream consumption of petroleum for the estimated volume of domestic
industry costs. The reduced costs would each of the renewable and alternative gasoline and diesel fuel displaced by the
essentially be the volume of fuel fuels, as well as for gasoline and diesel projected wholesale price for each of
displaced multiplied by the cost for fuel. Although there may be some these fuels in 2022, which are $3.42 per
producing the fuel. There is also a renewable fuel used for upstream gallon for gasoline, and $3.83 per gallon
reduction in capital costs as investment energy, we assumed that this entire for diesel fuel. For the volume of
in new refinery capacity is displaced by volume is petroleum because the petroleum displaced upstream, we
investments in renewable and volume of renewable and alternative valued it using the wholesale diesel fuel
alternative fuels capacity. fuels is fixed by the RFS2 standard. price. Table VII.C1 shows the net
Although we conducted refinery We assumed that a portion of the volumetric impact on the petroleum
modeling for estimating the cost of gasoline displaced by ethanol would portion of gasoline and diesel fuel
blending ethanol (see Section VII.B), we have been produced from domestic demand, as well as the reduced refining
did not rely on the refinery model refineries causing reduced demand from industry costs for 2022.
TABLE VII.C1CHANGES IN U.S. REFINERY INDUSTRY VOLUMES AND COSTS FOR INCREASED RENEWABLE FUEL
VOLUMES IN 2022 RELATIVE TO THE AEO 2007 REFERENCE CASE
[2007 dollars]
Low ethanol case Primary case High ethanol case

(mid-ethanol case)
Bil gals Bil $ Bil gals Bil $
Bil gals Bil $
Upstream:
Petroleum ...................................................................................... 0.34 1.3 0.34 1.3 0.33 1.3
End Use:
Gasoline ........................................................................................ 0.9 3.1 2.0 6.8 4.4 15.0
Diesel Fuel .................................................................................... 10.1 38.7 7.5 28.7 1.3 5.0
Total ....................................................................................... 10.7 40.5 9.2 34.2 5.4 18.7
336 See Section 4.2 of the RIA for a discussion of
our derivation of biodiesel distribution costs.
For the primary control case relative the 15 ppm cap standards on highway (FFVs) over that of conventionally
to the AEO 2007 reference case, this and nonroad diesel fuel, the Mobile fueled vehicles.
analysis estimates that the increased Source Air Toxics (MSAT) 0.62 volume The refinery model was provided
volumes of renewable fuel would percent benzene standard. We also some flexibility and also was
reduce the gasoline and diesel fuel modeled the implementation of EPAct constrained with respect to the
production volume of US refineries by of 2005, which by rescinding the applicable gasoline volatility standards
9.2 billion gallons in 2022, which would reformulated gasoline oxygenate for blending up E10. The refinery model
reduce their raw material purchases and standard, resulted in the discontinued allowed conventional gasoline and most
production costs by $34 billion dollars. use of MTBE, and a large increase in the low RVP control programs to increase
Accounting for all the petroleum amount of ethanol blended into by 1.0 pounds per square inch (psi) in
displaced (domestic and foreign), the reformulated gasoline. We also modeled Reid Vapor Pressure (RVP) waiver
increased volumes of renewable fuel the EISA Energy Bill corporate average during the summer. However,
caused by the RFS 2 fuels program are fuel economy (cafe) standards in the wintertime conventional gasoline was
estimated to reduce gasoline and diesel reference case because it will be assumed to comply with the wintertime
fuel demand by 13.2 billion gallons. phasing-in, and affect the phase-in of ASTM RVP and Volume/Liquid (V/L)
D. Total Estimated Cost Impacts the RFS2. standards.
The third step, or the control cases, The costs for producing, distributing
The previous sections of this chapter and using biodiesel and renewable
presented estimates of the cost of involved the modeling of three different
possible renewable fuels volumes. The diesel are accounted for outside the
producing and distributing corn-based refinery modeling. Their production and
and cellulosic-based ethanol, cellulosic three different volumes were designed
distribution costs are estimated first,
diesel fuel, imported ethanol, biodiesel, to capture the additional use of corn
compared to the costs of producing
and renewable diesel. In this section, we ethanol and biodiesel and a range of
diesel fuel, and then are added to the
briefly summarize the methodology cellulosic ethanol and cellulosic diesel
costs estimated by the refinery cost
used and the results of our analysis to fuel volumes. The volumes that we
model for blending the ethanol.
estimate the cost and other implications assessed in our analysis are summarized
for increased use of renewable fuels to in Section IV.A above. 2. Overall Impact on Fuel Cost
displace gasoline and diesel fuel. An The price of ethanol and E85 used in Utilizing the refinery modeling output
important aspect of this analysis is the refinery modeling is a critical conducted for todays final rule, we
refinery modeling which primarily was determinant of the overall economics of calculated the costs for each control
used to estimate the costs of blending using ethanol. Ethanol was priced case, which represented the three
ethanol into gasoline, as well as the initially based on the historical average different renewable fuels scenarios in
overall refinery industry impacts of the price spread between regular grade 2022, relative to the AEO 2007 and
fuel program. A detailed discussion of conventional gasoline and ethanol, but RFS1 reference cases. The costs are
how the renewable fuel volumes affect
then adjusted post-modeling to reflect reported separately for blending ethanol
refinery gasoline production volumes
the projected production cost for both into gasoline, as E10 and E85, and for
and cost is contained in Chapter 4 of the
corn and cellulosic-based ethanol. The blending cellulosic diesel fuel, biodiesel
RIA.
refinery modeling assumed that all and renewable diesel into petroleum-
1. Refinery Modeling Methodology ethanol added to gasoline for E10 is based diesel fuel. These costs do not
The refinery modeling was conducted match-blended for octane by refiners in include the biofuel consumption tax
in three distinct steps. The first step the reference and control cases. For the subsidies. The costs are based on 2007
involved the establishment of a 2004 control case, E85 was assumed to be dollars and the capital costs are
base case which calibrated the refinery priced lower than gasoline to reflect its amortized at seven percent return on
model against 2004 volumes, gasoline lower energy content, longer refueling investment (ROI) before taxes.
quality, and refinery capital in place. time and lower availability (see Chapter Tables VII.D.21 and VII.D.22
The EPA and ASTM fuel quality 4 of the RIA for a detailed discussion for summarize the costs for each of the
constraints in effect by 2004 are how we projected E85 prices). For the three control cases, including the
imposed on the products. refinery modeling, E85 was assumed to aggregated total for all the fuel changes
For the second step, we established be blended with gasoline blendstock and the per-gallon costs, relative to the
two year 2022 future year reference designed for blending with E10, and AEO 2007 and RFS1 reference cases,
cases which based their energy demand with butane to bring the RVP of E85 up respectively. This estimate of costs
off of the 2009 Annual Energy Outlook to that allowed by ASTM International reflects the changes in gasoline that are
(AEO). One of the reference cases standards for E85. Thus, unlike current occurring with the expanded use of
assumes business-as-usual demand practices today where E85 is blended at renewable and alternative fuels. These
growth from the AEO 2007 reference 85% in the summer and E70 in the costs include the labor, utility and other
case discussed in Section IV.A.1. The winter, we assumed that E85 is blended operating costs, fixed costs and the
other utilized the RFS1 reference case. at 85% year-round. As E85 capital costs for all the fuel changes
The refinery modeling results are based specifications are still under expected. These cost estimates do not
on $116 per barrel crude oil prices consideration by ASTM, this account for the various tax subsidies.
which are the 2022 projected prices by assumption may differ from future The per-gallon costs are derived by
EIA in its 2009 AEO. We also modeled procedures. E85 use in any one market dividing the total costs over all U.S.
the implementation of several new is limited to levels which we estimated gasoline and diesel fuel projected to be
environmental programs that will have would reflect the ability of FFV vehicles consumed in 2022. These costs are only
required changes in fuel quality by in the area to consume the E85 volume. for the incremental renewable fuel
2022, including the 30 part per million Our costs also include the incremental volumes beyond the volumes modeled
(ppm) average gasoline sulfur standard, costs of producing flexible fuel vehicles in the two reference cases.
TABLE VII.D.21ESTIMATED FUEL COSTS OF INCREASED VOLUMES OF RENEWABLE FUEL IN 2022 INCREMENTAL TO THE
AEO 2007 REFERENCE CASE
[2007 dollars, 7% ROI before taxes]
Primary case
Low ethanol High ethanol
(mid-ethanol
case case
case)
Gasoline Impacts:
$billion/yr ....................................................................................................................... 0.67 3.31 5.90
c/gal .............................................................................................................................. 0.48 2.35 4.08
Diesel Fuel Impacts:
$billion/yr ....................................................................................................................... 11.7 8.5 1.27
c/gal .............................................................................................................................. 16.4 12.1 1.79
Total Impact:
$billion/yr ....................................................................................................................... 12.4 11.8 7.17
Incremental to the AEO 2007 of $11.8 billion. Expressed as per-gallon prices. Because our cost model was
reference case, our analysis shows that costs, these fuel changes would decrease created to be able to assess the cost of
for the low ethanol case which models the cost of producing gasoline and the program at a higher crude oil price,
mostly cellulosic diesel instead of diesel fuel by 2.4 and 12.1 cents per we can also assess the cost at other
cellulosic ethanol, the gasoline and gallon, respectively. crude oil prices. As a sensitivity, we
diesel fuel costs are projected to For the high ethanol case where the varied crude oil prices in our model to
decrease by $0.7 billion and $11.70 cellulosic biofuel is cellulosic ethanol find the break-even (no cost) point of
billion, respectively, for a total savings (as in the proposal), the gasoline and the RFS2 program. Using our cost model
of $12.4 billion. Expressed as per-gallon diesel fuel costs are projected to we estimate that, for the primary control
costs, these fuel changes would decrease decrease by $5.9 billion and $1.3 case relative to the AEO 2007 reference
the cost of producing gasoline and billion, respectively, for a total savings case, the RFS2 program (total of gasoline
diesel fuel by 0.5 and 16.4 cents per of $7.2 billion. Expressed as per-gallon and diesel fuel costs) would break-even
gallon, respectively. costs, these fuel changes would decrease at a 2022 crude oil price of $88 per
For our primary case which models a the cost of producing gasoline and barrel. Thus, in 2022 if crude oil is
mix of cellulosic diesel fuel and diesel fuel by 4.1 and 1.8 cents per priced lower than $88 per barrel, the
cellulosic ethanol, the gasoline and gallon, respectively. RFS2 program would cost money; if
diesel fuel costs are projected to Crude oil prices have been very crude oil is priced higher than $88 per
decrease by $3.3 billion and $8.5 volatile over the last several years which barrel, the RFS2 program would result
billion, respectively, for a total savings raises uncertainty about future crude oil in a cost savings.
TABLE VII.D.22ESTIMATED FUEL COSTS OF INCREASED VOLUMES OF RENEWABLE FUEL IN 2022 INCREMENTAL TO THE
RFS1 REFERENCE CASE
[2007 dollars, 7% ROI before taxes]
Primary case
(mid-ethanol
case case
case)
Gasoline Impacts:
$billion/yr ....................................................................................................................... 3.12 5.63 7.79
c/gal .............................................................................................................................. 2.24 4.00 5.38
Diesel Fuel Impacts:
$billion/yr ....................................................................................................................... 11.7 8.6 1.35
c/gal .............................................................................................................................. 16.5 12.1 1.90
Total Impact:
$billion/yr ....................................................................................................................... 14.8 14.2 9.14
Incremental to the RFS1 reference For our primary case which models a diesel fuel costs are projected to
case, our analysis shows that for the low mix of cellulosic diesel fuel and decrease by $7.8 billion and $1.4
ethanol case which models mostly cellulosic ethanol, the gasoline and billion, respectively, for a total savings
cellulosic diesel instead of cellulosic diesel fuel costs are projected to of $9.1 billion. Expressed as per-gallon
ethanol, the gasoline and diesel fuel decrease by $5.6 billion and $8.6 costs, these fuel changes would decrease
costs are projected to decrease by $3.1 billion, respectively, for a total savings the cost of producing gasoline and
billion and $11.70 billion, respectively, of $14.2.billion. Expressed as per-gallon diesel fuel by 5.4 and 1.9 cents per
for a total savings of $14.8 billion. costs, these fuel changes would decrease gallon, respectively.
Expressed as per-gallon costs, these fuel the cost of producing gasoline and Both the gasoline and diesel fuel costs
changes would decrease the cost of diesel fuel by 4.0 and 12.1 cents per are negative because of the relatively
producing gasoline and diesel fuel by gallon, respectively. high crude oil prices estimated by EIA
2.4 and 16.5 cents per gallon, For the high ethanol case where the for the year 2022. Given the higher
respectively. cellulosic biofuel is cellulosic ethanol projected crude oil prices and these
(as in the proposal), the gasoline and savings, it is difficult to quantify how
much of the increase in renewable fuels diesel case) to the high ethanol case: (1) The increased use of renewable and
and the associated savings is due to the Cellulosic ethanol costs include the alternative fuels would require capital
RFS 2 program versus what would have costs for fuel flexible vehicles, while investments in corn and cellulosic
happened regardless in the marketplace. vehicles using cellulosic diesel fuel are ethanol plants, and renewable diesel
However, even with the high crude oil not expected to require any vehicle fuel plants. In addition to producing the
prices as projected by EIA, some or modifications, hence there is no fuels, storage and distribution facilities
perhaps even most of the investments in additional estimated cost, (2) the crude along the whole distribution chain,
these emerging renewable fuels oil price adjustment based on crude oil including at retail, will have to be
technologies may not occur without the and finished gasoline and diesel fuel constructed for these new fuels.
RFS 2 program in place. The reason for price data from 2002 to 2008 increases Conversely, as these renewable and
this is that investors are hesitant to the estimated production cost for alternative fuels are being produced,
invest in emerging technologies when petroleum diesel fuel more so than for they supplant gasoline and diesel fuel
the threat remains for a drop in the price demand which results in less new
gasolinetherefore cellulosic diesel
of crude oil leaving their investment investments in refineries compared to
shows a greater cost savings. If the
dollars stranded. The RFS2 program business-as-usual. In Table VII.D.23,
provides certainty for investors to invest diesel fuel prices do not increase more we list the total incremental capital
in renewable fuel technologies. than gasoline prices with higher crude investments that we project would be
There are two important reasons why oil prices, then the significantly higher made for this RFS2 rulemaking
the diesel fuel costs are more negative savings for renewable diesel fuel over incremental to the RFS1 reference case
than the gasoline costs when comparing that for renewable ethanol would be less (refer to Chapter 4 of the RIA for more
the low ethanol case (high cellulosic than that modeled here. detail).
TABLE VII.D.23TOTAL PROJECTED U.S. CAPITAL INVESTMENTS TO MEET THE INCREASED VOLUMES OF RENEWABLE
FUEL
[Incremental to the AEO 2007 reference case, billion dollars]
Primary case
Cost type Plant type (mid-ethanol
case case
case)
Production Costs .............................. Corn Ethanol ................................................................. 3.9 3.9 3.9

Cellulosic Ethanol ......................................................... 0 14.3 48.3
Cellulosic Diesel a ......................................................... 96.5 68.0 0
Renewable Diesel and Algae ....................................... 1.1 1.1 1.1
Distribution Costs ............................. All Ethanol ..................................................................... 5.6 8.2 11.9
Cellulosic and Renewable Diesel Fuel ......................... 2.0 1.4 ........................
Biodiesel ........................................................................ 1.2 1.2 1.2
FFV Costs ..................................................................... 0.8 1.8 6.1
Refining ......................................................................... 10.7 9.4 4.1
Total Capital Investments ......... ....................................................................................... 110.4 90.5 68.4

a Cellulosic
diesel fuel is assumed to be produced by BTL plants which is a very capital intensive technology. If some or even most of this vol-
ume comes from other cellulosic diesel fuel technologies which are less capital intensive, the capital costs attributed to cellulosic diesel would be
much lower.
Table VII.D.23 shows that the total U.S. and global agricultural sectors. The be referred to as the FAPRICARD
U.S. capital investments attributed to Forest and Agricultural Sector model.
this program ranges from $71 to $111 Optimization Model (FASOM), FASOM is a long-term economic
billion in 2022 for the high ethanol to developed by Professor Bruce McCarl of model of the U.S. agriculture and
low ethanol cases. The capital Texas A&M University and others, forestry sectors that attempts to
investments made for renewable fuels provides detailed information on the maximize total revenues for producers
technologies are much more than the domestic agricultural and forestry while meeting the demands of
decrease in refining industry capital sectors, as well as greenhouse gas consumers. FASOM can be utilized to
investments because (1) a large part of impacts of renewable fuels. The Food estimate which crops, livestock, forest
the decrease in petroleum gasoline and Agricultural Policy Research stands, and processed agricultural and
supply was from reduced imports, (2) Institute (FAPRI) at Iowa State forestry products would be produced in
renewable fuels technologies are more University and the University of the U.S. given RFS2 biofuel
capital intensive per gallon of fuel Missouri-Columbia maintains a number requirements. In each model simulation,
produced than incremental increases in of econometric models that are capable crops compete for price sensitive inputs
gasoline and diesel fuel production at of providing detailed information on such as land and labor at the regional
refineries, and (3) ethanol and biodiesel impacts on international agricultural level and the cost of these and other
require considerable distribution and markets from the wider use of inputs are used to determine the price
retail infrastructure investments. renewable fuels in the U.S. EPA worked and level of production of primary
VIII. Economic Impacts and Benefits directly with the Center for Agriculture commodities (e.g., field crops, livestock,
and Rural Development (CARD) at Iowa and biofuel products). FASOM also
A. Agricultural and Forestry Impacts State University to implement the estimates prices using costs associated
EPA used two principal tools to FAPRI model to analyze the impacts of with the processing of primary
model the potential domestic and the RFS2 on the global agriculture commodities into secondary products
international impacts of the RFS2 on the sector. Thus, this model will henceforth (e.g., converting livestock to meat and
dairy, crushing soybeans to soybean (afforested), as well as the amount of price transmission equation. Since
meal and oil, etc.). FASOM does not forest acres on public land. Forest econometric models for each sector can
capture short-term fluctuations (i.e., pasture is unmanaged pasture land with be linked, changes in one commodity
month-to-month, annual) in prices and varying amounts of tree cover that can sector will impact other sectors.
production, however, as it is designed to be used for livestock production. A Elasticity values for supply and demand
identify long-term trends (i.e., five to ten portion of this land may be used for responses are based on econometric
years). timber harvest. Rangeland is unmanaged analysis and on consensus estimates.
There are a few notable changes that land that can be used for livestock As one of the largest and fastest
have been made to both the FASOM and grazing production. While the amount developing countries in the world, a
FAPRICARD models, as well as to of rangeland idled or used for major producer and exporter of sugar
some of the underlying assumptions production may vary, rangeland may ethanol, and in possession of one of the
used in the agro-economic analysis not be used for any other purpose than worlds largest carbon sinks, the
since the release of the proposed for cattle grazing. Amazon, Brazil is acknowledged to be
rulemaking analysis. These changes A third major change in the FASOM an important part of our analysis in
were made as a result of further research model is the adoption of updated terms of indirect land use change. For
and consultation with experts, as well cellulosic ethanol conversion rates. We the proposals analysis, the FAPRI
as in response to comments received updated the cellulosic ethanol CARD model analyzed Brazil at a
during the public comment period conversion rates based on new data national level as any other non-US
following the release of the proposed provided by the National Renewable nation in the model, covering only crop
rulemaking. In regards to the FASOM Energy Laboratory (NREL). The new area and commodity prices. Comments
model, the first major change made to analysis by NREL simplified and and feedback received indicated the
the model is the inclusion of the full updated the conversion yields of the importance of analyzing Brazil at a
interaction between the forestry and different types of feedstocks. As a result regional level, given its diverse natural
agriculture sectors, as discussed in the of these changes, the gallons per ton lands across the country, and to also
NPRM and supported by comments yields for switchgrass and several other closely examine livestock production in
received. For the proposed rulemaking, feedstocks increased from the values terms of land use.
the FASOM model was only capable of used in the proposal, while the yields In response to these comments, the
modeling the changes in the agriculture for corn residue and several other FAPRICARD model now includes an
sector alone. In terms of land use, the feedstocks decreased slightly from the integrated Brazil module that provides
only land use that could be examined NPRM values. In addition, we also additional detail on agricultural land
was cropland and pasture use. With the updated our feedstock production yields use in Brazil for six geographic regions.
incorporation of a forestry sector that based on new work conducted by the The new Brazil module explicitly
dynamically interacts with the Pacific Northwest National Laboratory models the competition between
agriculture, we are able to examine how (PNNL).337 This analysis increased the cropland and pastureland used for
crop and forest acres compete for land tons per acre yields for several livestock production in each region. In
in response to changes in policy. Also, dedicated energy crops. These changes addition, the Brazil module allows for
similar to the agriculture sector, the increased the amount of cellulosic region-specific agriculture practices
forestry sector has its own set of forestry ethanol projected to come from energy such as double cropping and livestock
products, including logging and milling crops. Additional details on the FASOM intensification in response to higher
residues that are available for the model changes can be found in Chapter commodity prices. The addition of the
production of cellulosic ethanol. 5 of the RIA. Brazil module allows for a more refined
The second major change to the The FAPRICARD models are analysis of land use change and
FASOM model is the addition of a full econometric models covering many economic impacts in Brazil than what
accounting of major land types in the agricultural commodities. These models was able to be done for the proposals
U.S., including cropland, cropland capture the biological, technical, and analysis.
pasture, forestland, forest pasture, economic relationships among key Another topic that we received
rangeland, acres enrolled in the variables within a particular commodity comments on was in regards to price-
Conservation Reserve Program (CRP), and across commodities. They are based induced yields. Namely that with an
and developed land. These changes on historical data analysis, current increase in price for a particular crop,
address comments raised by peer academic research, and a reliance on seed producers and/or farmers have a
reviewers and the general public that we accepted economic, agronomic, and greater incentive to increase yields for
should more explicitly link the biological relationships in agricultural that particular crop in order to
interaction between livestock, pasture production and markets. The maximize revenue. In the analysis for
land, cropland, and forest land, as well international modeling system includes proposal, the FAPRICARD model did
as have a detailed accounting of acres in international grains, oilseeds, ethanol, not include impacts of commodity price
the U.S. across different land uses. sugar, and livestock models. In general, changes on yields. For the final
Cropland is actively managed cropland, for each commodity sector, the rulemaking, the FAPRICARD model
used for both traditional crops (e.g., economic relationship that supply now includes feedback from changes in
corn and soybeans) and dedicated equals demand is maintained by commodity prices on yields. The
energy crops (e.g., switchgrass). determining a market-clearing price for elasticities for these responses are based
Cropland pasture is managed pasture the commodity. In countries where on an econometric analysis of historical
land used for livestock production, but domestic prices are not solved data on yield and price changes for
which can also be converted to cropland endogenously, these prices are modeled various commodities. Additional details
production. Forestland contains a as a function of the world price using a on the FAPRICARD modeling updates
number of sub-categories, tracking the can be found in Chapter 5 of the RIA.
number of acres both newly and 337 Thomson, A.M., R.C. Izarrualde, T.O. West,
In the NPRM, we specifically
continually harvested (reforested), the D.J. Parrish, D.D. Tyler, and J.R. Williams. 2009. requested comments on our
Simulating Potential Switchgrass Production in the
number of acres harvested and United States. PNNL19072. College Park, MD: assumptions regarding distiller grain
converted to other land uses Pacific Northwest National Laboratory. with solubles (DGS) replacement rates.
For the proposal, we assumed that one withdraw corn oil via extraction (from switchgrass, 0.6 billion gallons from
pound of DGS replaced one pound of DGS), resulting in corn oil that is non- sugarcane bagasse, and 0.1 billion
total of corn and soybean meal for all food grade and can only be used as a gallons from forestry residues.
fed animals. We received numerous biodiesel source; 20% will withdraw Given the nature of the models, there
comments on this assumption. Many corn oil via fractionation (prior to the are some limitations on what each
commenters suggested that we adopt the creation of DGS), resulting in corn oil model may explicitly model as a biofuel
replacement rates included in the recent that is food-grade; and 10% will do feedstock source. For example, since
research by Argonne National neither extraction or fractionation. FASOM is a domestic agricultural sector
Laboratory (ANL) and others.338 The Based on this research, both the FASOM model it cannot be utilized to examine
ANL study found that one pound of and FAPRICARD models are the impacts of the wider use of biofuel
DGS can be used to replace 1.196 estimating that approximately 681 imports into the U.S. Similarly, the
pounds total of corn and soybean meal million gallons of biodiesel can be FAPRICARD model does not explicitly
for various fed animals due to the higher produced from non-food grade corn oil model the forestry sector in the U.S. and
nutritional content of DGS per pound from extraction by 2022 in the Control therefore does not include biofuels
compared to corn and soybean meal. For Case. Additional information regarding produced from the U.S. forestry sector.
the final rulemaking analysis, these these changes to the FASOM and Also, neither of the two models used for
replacement rates are incorporated in FAPRICARD models can be found in this analysisFASOM or FAPRI
both the FASOM and FAPRICARD RIA Chapter 5. CARDinclude biofuels derived from
models, and are treated as a maximum domestic municipal solid waste. Thus,
1. Biofuel Volumes Modeled
replacement rate possibility that is fully for the RFS2 agricultural sector analysis,
phased in by 2015. In addition, the For the agricultural sector analysis these biofuel sources are analyzed
maximum inclusion rates for DGS in an using the FASOM and FAPRICARD outside of the agricultural sector
animals diet have also been models of the RFS2 biofuel volumes, we models.
incorporated into the models. Given assumed 15 billion gallons (Bgal) of All of the results presented in this
these parameters, each agriculture sector corn ethanol would be produced for use section are relative to the AEO 2007
model determines the total quantity of as transportation fuel by 2022, an Reference Case renewable fuel volumes,
DGS used in feed based on relative increase of 2.7 Bgal from the Reference which include 12.3 Bgal of grain-based
prices for competing feed sources. Case. Also, we modeled 1.7 Bgal of ethanol, 0.4 Bgal of biodiesel, and 0.3
In addition, both FASOM and FAPRI biodiesel use as fuel in 2022, an Bgal of cellulosic ethanol in 2022. The
CARD now explicitly model corn oil increase of 1.3 Bgal from the Reference domestic figures are provided by
from the dry mill ethanol extraction Case. In addition, we modeled an FASOM, and all of the international
process as a new source of biodiesel. increase of 16 Bgal of cellulosic ethanol numbers are provided by FAPRICARD.
Based on engineering research (refer to in 2022. In FASOM, this volume The detailed FASOM results, detailed
Section VII.A) regarding expected consists of 4.9 billion gallons of FAPRICARD results, and additional
technological adoption, it is estimated cellulosic ethanol coming from corn sensitivity analyses are described in
that 70% of dry mill ethanol plants will residue in 2022, 7.9 billion gallons from more detail in the RIA.
TABLE VIII.A.11ETHANOL SOURCE VOLUMES MODELED IN 2022

[Billions of gallons]
AEO 2007 Control

Ethanol source reference Change
case
case
Corn Ethanol ............................................................................................................................................ 12.3 15.0 2.7

Corn Residue Cellulosic Ethanol * ........................................................................................................... 0 4.9 4.9
Sugarcane Bagasse Cellulosic Ethanol * ................................................................................................ 0.2 0.6 0.4
Switchgrass Cellulosic Ethanol * .............................................................................................................. 0 7.9 7.9
Forestry Residue Cellulosic Ethanol * ..................................................................................................... 0 0.1 0.1
Net Imports of Sugarcane Ethanol ** ....................................................................................................... 0.6 2.2 1.6
Other Ethano *** ....................................................................................................................................... 0.1 2.6 2.5
* Cellulosic Ethanol feedstocks are not explicitly modeled in FAPRICARD.
** Net Imports of Sugarcane Ethanol is not explicitly modeled in FASOM.
*** Includes MSW, which is not explicitly modeled by either FASOM or FAPRICARD.
TABLE VIII.A.12BIODIESEL SOURCE VOLUMES MODELED IN 2022

[Millions of gallons]
AEO 2007 Control

Biodiesel source reference Change
case
case
Soybean Oil ............................................................................................................................................. 119.9 659.4 539.5

Corn Oil (Dry Mill Extraction) ................................................................................................................... 0.4 681.3 680.8
Animal Fats .............................................................................................................................................. 93.9 126.9 33.0
Yellow Grease ......................................................................................................................................... 170.9 253.1 82.3
338 Salil Arora, May Wu, and Michael Wang, Corn Ethanol Life-Cycle Analysis, September 2008. See http://www.transportation.anl.gov/pdfs/AF/
Update of Distillers Grains Displacement Ratios for 527.pdf.
2. Commodity Price Changes prices would increase by $1.02 per by the increase in biofuel demand,
bushel (10.3%) above the Reference however softwood lumber prices
For the scenario modeled, FASOM Case price of $9.85 per bushel. In 2022, increase by $0.46 per board foot (0.1%)
predicts that in 2022 U.S. corn prices U.S. soybean oil prices would increase in 2022 to $386 per board foot.
would increase by $0.27 per bushel $183.32 per ton (37.9%) above the Additional price impacts are included
(8.2%) above the Reference Case price of Reference Case price of $483.10 per ton. in Section 5 of the RIA.
$3.32 per bushel. By 2022, U.S. soybean Hardwood lumber prices are unaffected
TABLE VIII.A.21CHANGE IN U.S. COMMODITY PRICES FROM THE AEO 2007 REFERENCE CASE
[2007$]
Commodity Change % Change
Corn ............................................................................................... 0.27/bushel .................................................................................. 8.2

Soybeans ...................................................................................... 1.02/bushel .................................................................................. 10.3
Soybean Oil ................................................................................... 183.32/ton .................................................................................... 37.9
Hardwood Lumber ......................................................................... 0.00/board foot ............................................................................. 0
Softwood Lumber .......................................................................... 0.46/board foot ............................................................................. 0.1
By 2022, the price of switchgrass would increase $23.27 to the Control Control Case price of $23.22 per wet ton
would increase by $20.12 per wet ton to Case price of $29.70 per wet ton by in 2022. These prices do not include the
the Control Case price of $40.85 per wet 2022. Softwood logging residue prices storage, handling, or delivery costs,
ton. Additionally, the farm gate would increase $8.99 per wet ton to which would result in a delivered price
feedstock price of corn residue would $18.37 per wet ton in the Control Case to the ethanol facility of at least twice
increase by $29.48 per wet ton to the in 2022. Similarly, the price of the farm gate cost, depending on the
Control Case price of $34.49 per wet hardwood logging residues would region.
ton. The price of sugarcane bagasse increase by $17.85 per wet ton to the
TABLE VIII.A.22CHANGE IN U.S. CELLULOSIC FEEDSTOCK PRICES FROM THE AEO 2007 REFERENCE CASE
[2007$]
Commodity Control case price Change
Switchgrass ....................................................... $40.85/wet ton .................................................. $20.12/wet ton.

Corn Residue ..................................................... 34.49/wet ton .................................................... 29.48/wet ton.
Sugarcane Bagasse .......................................... 29.70/wet ton .................................................... 23.27/wet ton.
Softwood Logging Residue ............................... 18.37/wet ton .................................................... 8.99/wet ton.
Hardwood Logging Residue .............................. 23.22 ................................................................. 17.85/wet ton.
3. Impacts on U.S. Farm Income (8.2%) to 2.1 billion bushels by 2022. TABLE VIII.A.41CHANGE IN U.S.
The increase in renewable fuel In value terms, U.S. exports of corn EXPORTS FROM THE AEO 2007
production provides a significant would fall by $57 million (0.8%) to REFERENCE CASE IN 2022Contin-
increase in net farm income to the U.S. $7.5 billion in 2022. U.S. exports of ued
agricultural sector. FASOM predicts that soybeans would also decrease due to the
net U.S. farm income would increase by increased use of renewable fuels. Change % Change
$13 billion dollars in 2022 (36%), FASOM estimates that U.S. exports of (millions)
relative to the AEO 2007 Reference soybeans would decrease 135 million
Total Value of Exports
Case. bushels (13.6%) to 858 million
bushels by 2022. In value terms, U.S. Corn (2007$) ........ $57 0.8
4. Commodity Use Changes
exports of soybeans would decrease by Soybeans (2007$) $453 4.6
Changes in the consumption patterns $453 million (4.6%) to $9.3 billion in
of U.S. corn can be seen by the 2022. Lumber production in the U.S. is
increasing percentage of corn used for affected as well, as forestry acres
ethanol. FASOM estimates the amount TABLE VIII.A.41CHANGE IN U.S. decrease as a result of expanding crop
of domestically produced corn used for EXPORTS FROM THE AEO 2007 acres (see below). In 2022, hardwood
ethanol in 2022 would increase to lumber production increases by 0.2%,
40.5%, relative to the 33.2% usage rate
REFERENCE CASE IN 2022
and softwood production decreases by
under the Reference Case. 0.2%.
Change
The rising price of corn and soybeans % Change
(millions)
in the U.S. would also have a direct TABLE VIII.A.42PERCENT CHANGE
impact on how corn is used. Higher Exports IN U.S. LUMBER PRODUCTION FROM
domestic corn prices would lead to THE AEO 2007 REFERENCE CASE IN
lower U.S. exports as the world markets Corn in Bushels .... 188 8.2 2022
shift to other sources of these products Soybeans in Bush-
or expand the use of substitute grains. els ...................... 135 13.6 Commodity % Change
FASOM estimates that U.S. corn exports
would drop 188 million bushels Hardwood Lumber ...................... 0.2
TABLE VIII.A.42PERCENT CHANGE TABLE VIII.A.43CHANGE IN ETH- switchgrass acres from nearly zero acres
IN U.S. LUMBER PRODUCTION FROM ANOL BYPRODUCTS USE IN FEED in the Reference Case, to 12.5 million
THE AEO 2007 REFERENCE CASE IN RELATIVE TO THE AEO 2007 REF- acres in the Control Case as demand for
2022Continued ERENCE CASE
cellulosic ethanol increases between
cases. Similarly, as demand for
[Millions of tons] cellulosic ethanol from bagasse
Commodity % Change
increases, sugarcane acres increase by
Control
Softwood Lumber ....................... 0.2 Category Change 0.1 million acres (20%) to 0.9 million
case
acres by 2022. Although we received
Higher U.S. demand for corn for DGS (Traditional) .. 6.5 27.5 comments suggesting that acres enrolled
DGS (Fractionated) 32.7 32.7 in the Conservation Reserve Program
ethanol production would cause a Gluten Meal .......... 2.1 0.1 (CRP) may decrease below the 32
decrease in the use of corn for U.S. Gluten Feed .......... 4.8 0.3 million acres assumed in the NPRM, we
livestock feed. Substitutes are available
Total Ethanol did not revise this assumption for
for corn as a feedstock, and this market several reasons. First, the commodity
is price sensitive. Several ethanol Byproducts ..... 46.1 5.4
price changes predicted by FASOM are
processing byproducts could also be relatively modest and would therefore
The EISA cellulosic ethanol
used to replace a portion of the corn requirements result in the production of have a limited impact on the decision to
used as feed, depending on the type of residual agriculture and forestry re-enroll in the program. Second, the
animal. One of the major byproducts of products, as well as dedicated energy CRP program is designed to allow for
the ethanol production process that can crops. By 2022, FASOM predicts increased payment if land rental rates
be used as a feed source, and as a production of 97.4 million tons of increase. Therefore, for the reasons
substitute for corn and soybean meal, is switchgrass and 59.9 million tons of outlined in the NPRM, we believe the
distiller grains with solubles (DGS). corn residue. Sugarcane bagasse for assumption that CRP acres will not drop
DGS are a by-product of the dry mill cellulosic ethanol production increases below 32 million acres is a plausible
ethanol production process. As by 6 million tons to 9.6 million tons in future projection.
discussed above, the replacement rates 2022 relative to the Reference Case. In
of DGs for corn and soybean meal in the addition, FASOM predicts production TABLE VIII.A.51CHANGE IN U.S.
diets of fed animals is higher than what of 1.7 million tons of forestry residues CROP ACRES RELATIVE TO THE
was used in the proposal based on the for cellulosic ethanol production. AEO 2007 REFERENCE CASE IN
latest scientific research regarding 5. U.S. Land Use Changes 2022
nutritional content of feed sources. In [Millions of acres]
Higher U.S. corn prices would have a
addition, as discussed above and in
direct impact on the value of U.S.
Chapter VI, there are new processes for Crop Change % Change
agricultural land. As demand for corn
withdrawing corn oil from the dry mill and other farm products increases, the
ethanol production process. Therefore, Corn ...................... 3.6 4.6
amount of land devoted to cropland Soybeans .............. 1.4 2.1
we are now modeling two types of DGS: production would increase. FASOM Sugarcane ............ 0.1 20
Those that are created during the estimates an increase of 3.6 million Switchgrass .......... 12.5 20,000
extraction/fractionation process acres (4.6%) in harvested corn acres,
(fractionated DGS), and those created in relative to 77.9 million acres harvested With the increase in biofuel demand
plants that do not conduct fractionation under the Reference Case by 2022.339 that results from the implementation of
or extraction (traditional DGS). In Most of the new corn acres come from the RFS2 policy, there is an increase of
addition, other byproducts that can be a reduction in existing crop acres, such 3.1 million acres are dedicated towards
used as feed substitutes include gluten as rice, wheat, and hay. crop production. This increase in crop
meal and gluten feed, which are Though demand for biodiesel acres results in a decrease of 1.9
byproducts of wet milling ethanol increases, FASOM predicts a fall in U.S. million pasture acres, an increase of 1.1
production. In 2022, traditional DGS soybean acres harvested. According to million acres of forest pasture, and a
used in feed decreases by 27.5 million the model, harvested soybean acres decrease of 1.2 million forestry acres.
tons from the Reference Case to 6.5 would decrease by approximately 1.4
million tons in the Control Case. million acres (2.1%), relative to the TABLE VIII.A.52CHANGE IN U.S.
However, the use of fractionated DGS Reference Case acreage of 68.1 million CROP ACRES RELATIVE TO THE
increases by 32.7 million tons from 20 acres in 2022. Despite the decrease in AEO 2007 REFERENCE CASE IN
thousand tons used in the Reference soybean acres in 2022, soybean oil 2022
Case in 2022. Gluten meal used in feed production would increase by 0.5 [Millions of acres]
million tons (4.7%) by 2022 over the
decreases by 0.1 million tons (4.5%)
Reference Case. This occurs due to the Land type Change % Change
to 2.1 million tons in the Control Case.
decrease in soybean exports mentioned
Gluten feed use increases by 0.3 million above. Additionally, FASOM predicts Cropland ............... 3.1 1.0
tons (6.4%) in 2022 to 4.8 million tons that soybean oil exports would decrease Cropland Pasture .. 1.9 5.8
in the Control Case. By 2022, FASOM 1.2 million tons by 2022 (51%) Forest Pasture ...... 1.1 0.7
predicts total ethanol byproducts used Forestry ................. 1.2 0.3
relative to the Reference Case.

in feed would increase by 5.4 million As the demand for cellulosic ethanol
tons (13.2%) to 46.1 million tons, The additional demand for corn and
increases, most of the production is
compared to 40.8 million tons under the derived from switchgrass. By 2022, other crops for biofuel production also
Reference Case. results in increased use of fertilizer in
339 Total U.S. planted corn acres increases to 87.1
the U.S. In 2022, FASOM estimates that
million acres from the Reference Case level of 83.5 U.S. nitrogen fertilizer use would
million acres in 2022. increase 1.5 billion pounds (5.7%) over
the Reference Case nitrogen fertilizer Case. The impact on world soybean biofuels and, based upon this updated
use of 26.2 billion pounds. In 2022, U.S. prices is somewhat smaller, increasing approach, we estimate the monetary
phosphorous fertilizer use would $0.08 per bushel (0.8%) to $9.63 per value of the energy security benefits of
increase by 714 million pounds (12.7%) bushel in 2022. the RFS2 required renewable fuel
relative to the Reference Case level of This increase in international volumes.
5.6 billion pounds. commodity prices has a direct impact
on world food consumption.344 The 1. Implications of Reduced Petroleum
TABLE VIII.A.53CHANGE IN U.S. FAPRICARD model indicates that Use on U.S. Imports
FERTILIZER USE RELATIVE TO THE world consumption of corn for food In 2008, U.S. petroleum import
AEO 2007 REFERENCE CASE would decrease by 0.6 million metric
tons in 2022 relative to the Reference expenditures represented 21% of total
[Millions of pounds] U.S. imports of all goods and
Case. Similarly, the FAPRICARD
services.345 In 2008, the U.S. imported
Fertilizer Change % Change model estimates that world 66% of the petroleum it consumed, and
consumption of oil for food (e.g.,
Nitrogen ................ 1,501 5.7 vegetable oils) decreases by 1.7 million
the transportation sector accounted for
Phosphorous ......... 714 12.7 metric tons by 2022. Wheat 70% of total U.S. petroleum
consumption is not estimated to change consumption. This compares to
6. Impact on U.S. Food Prices substantially in 2022. The model also approximately 37% of petroleum from
estimates a small change in world meat imports and 55% consumption of
Due to higher commodity prices, petroleum in the transportation sector in
FASOM estimates that U.S. food consumption, decreasing by -0.1 million
metric tons in 2022. When considering 1975.346 It is clear that petroleum
costs 340 would increase by roughly $10
all the food uses included in the model, imports have a significant impact on the
per person per year by 2022, relative to
world food consumption decreases by U.S. economy. Requiring the wider use
the Reference Case. 341 Total effective
farm gate food costs would increase by 2.4 million metric tons by 2022 of renewable fuels in the U.S. is
$3.6 billion (0.2%) in 2022.342 To put (0.11%). While FAPRICARD expected to lower U.S. petroleum
these changes in perspective, average provides estimates of changes in world imports.
U.S. per capita food expenditures in food consumption, estimating effects on For this final rule, EPA estimated the
2007 were $3,778 or approximately 10% global nutrition is beyond the scope of reductions in U.S. petroleum imports
of personal disposable income. The total this analysis. using a modified version of the National
amount spent on food in the U.S. in Energy Modeling System (EPANEMS).
2007 was $1.14 trillion dollars.343 TABLE VIII.A.71CHANGE IN WORLD EPANEMS is an energy-economy
FOOD CONSUMPTION RELATIVE TO modeling system of U.S. energy markets
7. International Impacts THE AEO 2007 REFERENCE CASE through the 2030 time period. EPA
Changes in the U.S. agriculture [Millions of metric tons] NEMS projects U.S. production,
economy are likely to have affects in imports, conversion, consumption, and
other countries around the world in Category 2022 prices of energy; subject to assumptions
terms of trade, land use, and the global on world energy markets, resource
price and consumption of fuel and food. Corn .................................................. 0.6
Wheat ............................................... 0.0 availability and costs, behavioral and
We utilized the FAPRICARD model to
Vegetable Oils .................................. 1.7 technological choice criteria, cost and
assess the impacts of the increased use
Meat .................................................. 0.1 performance characteristics of energy
of renewable fuels in the U.S. on world
technologies, and demographics. For
agricultural markets. Total Food ..................................... 2.4
The FAPRICARD modeling shows this analysis, the 2009 NEMS model was
that world corn prices would increase modified to use the 2007 (pre-EISA)
Additional information on the U.S.
by $0.12 per bushel (3.1%) to $3.88 per Annual Energy Outlook (AEO) levels of
agricultural and forestry sectors, as well
bushel in 2022, relative to the Reference biofuels in the Reference Case. These
as international trade impacts are
results were compared to our Control
described in more detail in the RIA
340 FASOM does not calculate changes in price to Case, which assumes the renewable fuel
(Chapter 5).
the consumer directly. The proxy for aggregate food volumes required by EISA will be met
price change is an indexed value of all food prices B. Energy Security Impacts by 2022. The reductions in U.S. oil
at the farm gate. It should be noted, however, that
according to USDA, approximately 80% of Increasing usage of renewable fuels imports projected by EPANEMS as a
consumer food expenditures are a result of handling helps to reduce U.S. petroleum imports. result of the RFS2 is approximately 0.9
after it leaves the farm (e.g., processing, packaging, A reduction of U.S. petroleum imports million barrels per day, which amounts
storage, marketing, and distribution). These costs to about $41.5 billion in lower crude oil
consist of a complex set of variables, and do not reduces both financial and strategic
necessarily change in proportion to an increase in risks associated with a potential and refined product import payments in
farm gate costs. In fact, these intermediate steps can disruption in supply or a spike in cost 2022.
absorb price increases to some extent, suggesting of a particular energy source. This
that only a portion of farm gate price changes are 2. Energy Security Implications
typically reflected at the retail level. See http:// reduction in risks is a measure of
www.ers.usda.gov/publications/foodreview/ improved U.S. energy security. In this In order to understand the energy
septdec00/FRsept00e.pdf. section, we detail an updated
341 These estimates are based on U.S. Census
security implications of the increased
methodology for estimating the energy use of renewable fuels, EPA used the Oil
population projections of 331 million people in
2017 and 348 million people in 2022. See http:// security benefits of reduced U.S. oil
www.census.gov/population/www/projections/ imports which explicitly includes 345 Source: U.S. Bureau of Economic Analysis,
summarytables.html. U.S. International Transactions Accounts Data, as

342 Farm Gate food prices refer to the prices that 344 The food commodities included in the FAPRI shown on June 24, 2009.
farmers are paid for their commodities. model include corn, wheat, sorghum, barley, 346 Source: U.S. Department of Energy, Annual
343 See www.ers.usda.gov/Briefing/ soybeans, sugar, peanuts, oils, beef, pork, poultry, Energy Review 2008, Report No. DOE/EIA
CPIFoodAndExpenditures/Data/table15.htm. and dairy products.
0384(2008), Tables 5.1 and 5.13c, June 26, 2009.
Security Metrics Model 347 348 (OSMM), reduction in the supply of key the risk of reductions in U.S. economic
developed and maintained by Oak Ridge agricultural feedstocks (i.e., corn) that output and disruption of the U.S.
National Laboratory. This model are used to make ethanol. To the extent economy caused by sudden disruptions
examines the future economic costs of that supply disruptions in feedstocks in the supply of imported oil to the U.S.
oil imports and oil supply disruptions used to make biofuels are correlated (i.e., macroeconomic disruption/
to the U.S., grouping costs into (1) the with oil supply disruptions, the energy adjustment costs). Maintaining a U.S.
higher costs for oil imports resulting security benefits of biofuels may be military presence to help secure stable
from the effect of U.S. import demand lessened, by substituting one fuel with oil supply from potentially vulnerable
on the world oil price and OPEC market supply disruptions for another. For this regions of the world is also a measure
power (i.e., the import demand or analysis, the energy security of energy security, but has been
monopsony costs); and (2) the implications of the wider use of biofuels excluded from this analysis because its
expected cost of reductions in U.S. in the U.S. are broken down between attribution to particular military
economic output and disruption of the biofuels produced domestically (e.g., missions or activities is difficult.
U.S. economy caused by sudden ethanol made from corn/switchgrass,
a. Effect of Oil Use on Long-Run Oil
disruptions in the supply of imported soy-based biodiesel) and imported
Price, U.S. Import Costs, and Economic
oil to the U.S. (i.e., macroeconomic biofuels (e.g., ethanol made from
Output
disruption/adjustment costs). Beginning sugarcane).
with Reference projections for the oil For the proposed RFS2 rule, EPA The first component of the economic
and liquid fuel markets from the EIAs worked with Oak Ridge National costs of importing petroleum into the
2009 AEO, the OSMM compares costs Laboratory (ORNL), which has U.S. follows from the effect of U.S.
under those futures with selected cases developed approaches for evaluating the import demand on the world oil price
under differing energy policies and social costs and energy security over the long-run. Because the U.S. is a
technology mixes. It provides measures implications of oil use. In the study sufficiently large purchaser of foreign
of expected costs and risk by entitled The Energy Security Benefits of oil supplies, its purchases can affect the
probabilistic simulation through 2022. Reduced Oil Use, 20062015, world oil price. This monopsony power
Uncertainty is inherent in energy completed in March, 2008, ORNL means that increases in U.S. petroleum
security analysis, and it is explicitly updated and applied the analytical demand can cause the world price of
represented for long-run future oil approach used in the 1997 Report Oil crude oil to rise, and conversely, that
market conditions, disruption events, Imports: An Assessment of Benefits and reduced U.S. petroleum demand can
and key parameters. Costs. 349 350 This study is included as reduce the world price of crude oil.
An important aspect of the OSMM is part of the record in this rulemaking.351 Thus, one benefit of decreasing U.S. oil
that it explicitly addresses the energy This study underwent a Peer Review, purchases is the potential decrease in
security implications of the wider use of sponsored by the Agency. the crude oil price paid for all crude oil
biofuels as transportation fuels in the The prior approach that ORNL has purchased.
U.S. Increased use of biofuels not only developed estimates the incremental In the case of the RFS2, increasing
results in changes in the levels of U.S. benefits to society, in dollars per barrel, U.S. demand for biofuels partially
oil imports and consumption, but also of reducing U.S. oil imports, called the offsets the U.S. oil market import cost
can alter key supply and demand oil oil import premium. With OSMM, reduction. The offset is because the
elasticities. The elasticities are ORNL uses a consistent approach, RFS2 results in a modest increases in
significant for energy security since they estimating the incremental cost to the biofuels imported to the U.S. (1.6 billion
measure the potential for substitution U.S. of the increased use of renewable gallons in 2022), and a modest increase
away from oil, in the long and short-run, fuels required by EISA, and reporting in the world ethanol price (from $1.48/
depending on how oil prices evolve and that cost in dollars per barrel of biofuel. gallon to $1.61/gallon, a $0.13/gallon
whether oil supply disruptions occur. In this case, these increased volumes increase in 2022). Thus, the biofuels
Also, the OSMM accounts for the alter both the U.S. oil import and that the U.S. had imported would be
potential of supply disruptions from consumption levels, while introducing a higher priced, partially offsetting the
biofuels. For example, there could be a substitute fuel and altering demand reduction in U.S. oil import costs. The
drought in the U.S. that could cause a responsiveness. As before, OSMM ORNL estimates this monopsony
considers the economic cost of component of the energy security
347 The OSMM methods are consistent with the importing petroleum into the U.S. The benefit (oil market and biofuel market
recommended methodologies of the National economic cost of importing petroleum impacts combined) is $7.86/barrel of
Resource Councils (NRCs) (2005) Committee on
into the U.S. was defined as (1) the biofuel (2007$) for the year 2022, as
Prospective Benefits of DOEs Energy Efficiency and shown in Table VIII.B.21. Based upon
Fossil Energy R&D Programs. The OSMM defines higher costs for oil imports resulting
and implements a method that makes use of the from the effect of U.S. import demand the 90 percent confidence interval, the
NRCs typology of prospective benefits and on the world oil price and OPEC market monopsony portion of the energy
methodological framework, satisfies the NRCs
power (i.e., monopsony costs); and (2) security benefit ranges from $5.37 to
criteria for prospective benefits evaluation, and $10.71/barrel of biofuel in the year
permits measurement of prospective energy security
benefits for policies and technologies related to oil. 349 Leiby, Paul N., Donald W. Jones, T. Randall 2022.
It has been used to estimate the prospective oil Curlee, and Russell Lee, Oil Imports: An
security benefits of Department of Energys Energy Assessment of Benefits and Costs, ORNL6851, Oak b. Short-Run Disruption Premium From
Efficiency and Renewable Energy R&D programs, Ridge National Laboratory, November, 1997. Expected Costs of Sudden Supply
and is also applicable to other strategies and 350 The 1997 ORNL paper was cited and its Disruptions
policies aimed at changing the level and results used in DOT/NHTSAs rules establishing
composition of U.S. petroleum demand. To evaluate CAFE standards for 2008 through 2011 model year The second component of the external
the RFS2, the OSMM was modified to include light trucks. See DOT/NHTSA, Final Regulatory economic costs resulting from U.S. oil
supplies and demand of biofuels (principally Impacts Analysis: Corporate Average Fuel Economy imports arises from the vulnerability of
ethanol) as well as petroleum. and CAFE Reform MY 20082011, March 2006. the U.S. economy to oil shocks. The cost
348 Leiby, P.N., Energy Security Impacts of 351 Leiby, Paul N. Estimating the Energy Security
Renewable Fuel Use Under the RFS2 Rule Benefits of Reduced U.S. Oil Imports, Oak Ridge
of shocks depends on their likelihood,
Methodology, Oak Ridge National Laboratory, National Laboratory, ORNL/TM2007/028, Final size, and length; the capabilities of the
January 19, 2010. Report, 2008. market and U.S. Strategic Petroleum
Reserve (SPR) to respond; and the c. Costs of Existing U.S. Energy Security benefits from the increased use of
sensitivity of the U.S. economy to Policies renewable fuels, such as the benefits of
sudden price increases. The total Another often-identified component reducing greenhouse gas emissions, are
vulnerability of the U.S. economy to oil
of the full economic costs of U.S. oil calculated at a global level? Monopsony
price shocks depends on the levels of
imports is the costs to the U.S. taxpayers benefits represent avoided payments by
both U.S. petroleum consumption andof existing U.S. energy security policies. the U.S. to oil producers in foreign
imports. Variation in oil consumption
The two primary examples are countries that result from a decrease in
levels can change the sensitivity of the
maintaining a military presence to help the world oil price as the U.S. decreases
economy to oil price shocks, and its consumption of imported oil (net of
secure stable oil supply from potentially
variation in import levels or demand increased imported biofuel payments by
vulnerable regions of the world and
flexibility can affect the magnitude of the U.S.). Although there is clearly a
maintaining the SPR to provide buffer
potential increases in oil price due to benefit to the U.S. when considered
supplies and help protect the U.S.
supply disruptions from the domestic perspective, the
economy from the consequences of
A major strength of the OSMM is that decrease in price due to decreased
global oil supply disruptions.
it addresses risk-shifting that might demand in the U.S. also represents a
U.S. military costs are excluded from
occur as the U.S. reduces its loss to other countries. Given the
the analysis performed by ORNL
dependency on petroleum and increases redistributive nature of this effect, do
because their attribution to particular
its use of biofuels, which the other oil the negative effects on other countries
missions or activities is difficult. Most
premium model could not. The prior net out the positive impacts to the
military forces serve a broad range of
oil premium analysis focused only on U.S.? If this is the case, then, the
security and foreign policy objectives.
the potential for biofuels to reduce U.S. monopsony portion of the energy
Attempts to attribute some share of U.S. security premium should be excluded
oil imports, and the resulting military costs to oil imports are further from the net benefits calculation. Based
implications of lower U.S. oil imports
challenged by the need to estimate how on this reasoning, EPAs estimates of net
for energy security. As the U.S. relies
those costs might vary with incremental benefits for the increased use of
more heavily on biofuels, such as corn-
variations in U.S. oil imports. In the renewable fuels required by EISA
based ethanol, there could be adverse
peer review of the energy security exclude the portion of energy security
consequences from a supply-disruption
analysis that the Agency commissioned, benefits stemming from the U.S.
perspective associated with, for a majority of peer reviewers believed exercising its monopsony power in oil
example, a long-term drought. that U.S. military costs should be markets. Thus, EPA only includes the
Alternatively, a supply disruption of
excluded absence a widely agreed macroeconomic disruption/adjustment
petroleum will more likely be caused by
methodology for estimating this cost portion of the energy security
geopolitical factors rather than extreme
component of U.S. energy security. premium.
weather conditions. Hence, the causal
Similarly, while the costs for building However, even when the global value
factors of a supply-disruption fromand maintaining the SPR are more for greenhouse gas reduction benefits is
imported petroleum and, alternatively,
clearly related to U.S. oil use and used, a strong argument can be made
biofuels, are likely to be unrelated.
imports, historically these costs have that the monopsony benefits should be
Thus, diversifying the sources of U.S.
not varied in response to changes in included in net benefits calculation.
transportation fuel is expected to U.S. oil import levels. Thus, while SPR Maintaining the earths climate is a
provide energy security benefits. Biofuel
is factored into the ORNL analysis, the global public good and as such requires
supply disruptions are represented cost of maintaining the SPR is excluded. that a global perspective be taken on the
based on the historical volatility of Some commenters felt that the benefits of GHG mitigation by all
yields for biofuel feedstocks or similar
Agency should attempt to monetize U.S. nations, including the U.S. The global
crops. The ORNL estimates this military costs and include these costs in SCC is used in these calculations, not
macroeconomic/disruption component the energy security analysis, while other because the global net benefits of the
of the energy security benefit (oil market
commenters agreed with the Agency increased use of renewable fuels are
and biofuel market impacts combined)
that these costs should be excluded. The being computed (they are not), but
is $6.56/barrel (2007$) for the year 2022,
Agency did not receive any new rather because in the context of a global
as shown in Table VIII.B.21. Basedanalysis or methodological approach public good, the global marginal benefit
upon the 90 percent confidence interval,
from commenters which could be used is the correct benefit against which
the macroeconomic/disruption to monetize U.S. military costs in a domestic costs are to be compared. In
component of the energy security meaningful or credible manner. Since other words, using the global SCC does
benefit ranges from $0.94 to $12.23/
U.S. military impacts are not factored not transform the calculation from a
barrel of biofuel in the year 2022.into the energy security analysis, they domestic (i.e., U.S.) to a global one.
are also excluded from the lifecycle Rather, the domestic perspective is
TABLE VIII.B.21ENERGY SECURITY GHG analysis. maintained while recognizing that the
BENEFITS OF THE VOLUMES RE- 3. Combining Energy Security and Other impacts from domestic GHG emissions
QUIRED BY RFS2 IN 2022 are truly global in nature.
Benefits
[2007$ per barrel of biofuel] Energy security, on the other hand, is
The literature on the energy security broadly defined as protecting the U.S.
Component Estimate for the last two decades has routinely economy against circumstances that
combined the monopsony and the threaten significant short- and long-term
Monopsony ....................... 7.86 macroeconomic disruption components increases in energy costs. Energy
(5.3710.71) when calculating the total value of the security is inherently a domestic
Macroeconomic Disruption 6.56 energy security premium. However, in benefit. However, the use of the
(0.9412.23) the context of using a global value for domestic monopsony benefit is not
the Social Cost of Carbon (SCC) the necessarily in conflict with the use of
Total .............................. 14.42
(6.3122.95) question arises: how should the energy the global SCC, because the global SCC
security premium be used when some represents the benefits against which
the costs associated with our (i.e., the about the results of the longer-term For at least three reasons, any
U.S.s) domestic mitigation efforts process. Although these values were not particular figure will be contestable.
should be judged. In addition, the U.S. used in the NPRM, some commenters First, scientific and economic
values both maintaining the earths raised issues with these values and the knowledge about the impacts of climate
climate and providing for its own methodology used to develop them in change continues to grow. With new
energy security. If this reasoning holds, response to their publication elsewhere. and better information about relevant
the two benefitsthe global benefits of Many of these issues are being questions, including the cost, burdens,
reducing greenhouse gas emissions and examined by the interagency and possibility of adaptation, current
the full energy security premium, workgroup. estimates will inevitably change over
including the monopsony benefits The rest of this Preamble section will time. Second, some of the likely and
should be counted in the net benefits provide the basis for the interim SCC potential damages from climate
estimates. In the final analysis, the values, and the estimates of the total changefor example, the loss of
Agency determined that the first climate-related benefits of the increased endangered speciesare generally not
argument is more compelling and use of renewable fuels that follow from included in current SCC estimates.
therefore has determined that using only these interim values. As discussed These omissions may turn out to be
the macroeconomic disruption below, the interim dollar estimates of significant in the sense that they may
component of the energy security the SCC represent a partial accounting mean that the best current estimates are
benefit is the appropriate metric for this of climate change impacts. too low. As noted by the IPCC Fourth
rule. In addition to the quantitative account Assessment Report, It is very likely that
presented in this section, a qualitative globally aggregated figures
4. Total Energy Security Benefits underestimate the damage costs because
appraisal of climate-related impacts is
In 2022, total annual energy security published in Section V of todays rule they cannot include many non-
benefits are estimated for the difference and in other recent climate change quantifiable impacts. Third, when
between the renewable fuel volumes in analyses. For example, EPAs economic efficiency criteria, under
the Primary Control Case (30.50 billion Endangerment and Cause or Contribute specific assumptions, are juxtaposed
gallons) and the AEO2007 Reference Findings for Greenhouse Gases under with ethical considerations, the
Case (13.56 billion gallons). Total Section 202(a) of the Clean Air Act and outcome may be controversial. These
annual energy security benefits are the accompanying Technical Support ethical considerations, including those
calculated by multiplying the change in Document (TSD) presents a summary of involving the treatment of future
renewable fuel volumes (16.94 billion impacts and risks of climate change generations, should and will also play a
gallons or 403 million barrels) and the projected in the absence of actions to role in judgments about the SCC (see in
macroeconomic disruption/adjustment mitigate GHG emissions.352 The TSD particular the discussion of the discount
portion of the energy security premium rate, below).
synthesizes major findings from the best
($6.56/barrel of renewable fuels). The To date, SCC estimates presented in
available scientific assessments of the recent regulatory documents have
estimated total energy security benefit is scientific literature that have gone
$2.6 billion (2007$) for the year 2022. varied within and among agencies,
through rigorous and transparent peer including DOT, DOE, and EPA. For
The estimated total energy security review, including the major assessment
benefit using the macroeconomic example, a regulation proposed by DOT
reports of both the Intergovernmental in 2008 assumed a value of $7 per
disruption/adjustment portion of the Panel on Climate Change (IPCC) and the
energy security benefit in 2022 ranges metric tonne CO2 353 (2006$) for 2011
U.S. Climate Change Science Program emission reductions (with a range of $0
from $379 million to $4.9 billion based (CCSP).
upon the 90 percent confidence 14 for sensitivity analysis). One of the
intervals. 2. Derivation of Interim Social Cost of regulations proposed by DOE in 2009
Carbon Values used a range of $0$20 (2007$). Both of
C. Benefits of Reducing GHG Emissions these ranges were designed to reflect the
The social cost of carbon (SCC) is value of damages to the United States
1. Introduction intended to be a monetary measure of resulting from carbon emissions, or the
This section presents estimates of the the incremental damage resulting from domestic SCC. In the final MY2011
economic benefits that could be carbon dioxide (CO2) emissions, CAFE EIS, DOT used both a domestic
monetized for the reductions in GHG including (but not limited to) net SCC value of $2/t-CO2 and a global SCC
emissions projected to occur through agricultural productivity loss, human value of $33/t-CO2 (with sensitivity
the increased use of renewable fuels health effects, property damages from analysis at $80/t-CO2) (in 2006 dollars
required by EISA. The total benefit sea level rise, and changes in ecosystem for 2007 emissions), increasing at 2.4%
estimates were calculated by services. Any effort to quantify and to per year thereafter. The final MY2011
multiplying a marginal dollar value (i.e., monetize the consequences associated CAFE rule also presented a range from
cost per ton) of carbon emissions, also with climate change will raise serious $2 to $80/t-CO2.
referred to as social cost of carbon questions of science, economics, and In the May 2009 proposal leading to
(SCC), by the anticipated level of ethics. But with full regard for the limits todays final rule, EPA identified
emissions reductions in tons. of both quantification and monetization preliminary SCC estimates that spanned
The SCC values underlying the of impacts, the SCC can be used to three orders of magnitude. EPAs May
benefits estimates for this rule represent provide an estimate of the social
U.S. government-wide interim values benefits of reductions in GHG 353 For the purposes of this discussion, we
for SCC. As discussed below, federal emissions. present all values of the SCC as the cost per metric
tonne of CO2 emissions. Some discussions of the
agencies will use these interim values to SCC in the literature use an alternative presentation
assess some of the economic benefits of 352 See Federal Register/Vol. 74, No. 2398/
of a dollar per metric ton of carbon. The standard
GHG reductions while an interagency Wednesday, December 16, 2009/Rules and adjustment factor is 3.67, which means, for
Regulations at http://frwebgate4.access.gpo.gov/cgi- example, that a SCC of $10 per ton of CO2 would
workgroup develops SCC values for use bin/PDFgate.cgi?WAISdocID=969788398047 be equivalent to a cost of $36.70 for a ton of carbon
in the long-term. The interim values +0+2+0&WAISaction=retrieve or http://epa.gov/ emitted. Unless otherwise indicated, a ton refers
should not be viewed as an expectation climatechange/endangerment.html. to a metric ton.
2009 proposal also presented about the results of the longer-term necessary to halt and reverse the growth
preliminary global SCC estimates process. of GHGs, the combined effects of
developed from a survey analysis of the This process will allow the multiple strategies to reduce GHG
peer reviewed literature (i.e., meta workgroup to explore questions raised emissions domestically and abroad
analysis). The global mean values from in the May 2009 proposal as they are could make a major difference in the
the meta analysis were $68 and $40/t- relevant to the development of SCC climate change impacts experienced by
CO2 for discount rates of 2% and 3% values for use in the long-term. The future generations.356 The projected net
respectively (in 2006 real dollars for workgroup may evaluate factors not GHG emissions reductions associated
2007 emissions).354 currently captured in todays estimates with the increased use of renewable
Since publication of the May 2009 due to time constraints, such as the fuels reflect an incremental change to
proposal, a federal interagency working quantification of additional impact projected total global emissions. Given
group has established a methodology for categories where possible and an that the climate response is projected to
selecting a range of interim SCC uncertainty analysis. The be a marginal change relative to the
estimates for use in regulatory analyses. Administration will seek comment on baseline climate, we estimate the
Todays final rule uses the five values all of the scientific, economic, and marginal value of changes in climate
for the SCC that are the outcome of this ethical issues before establishing change impacts over time and use this
process. A complete description of the improved estimates for use in future value to measure the monetized
methodology used to generate this rulemakings. marginal benefits of the GHG emissions
The outcomes of the Administrations reductions projected for the increased
interim set of SCC estimates can be
process to develop interim values are renewable fuel volumes required by
found in the RIA for this rule and in
judgments in favor of a) global rather EISA.
multiple other published rules,
than domestic values, b) an annual
including a proposal to limit vehicle Accordingly, EPA has used the set of
growth rate of 3%, and c) interim global
greenhouse gas emissions that requests SCC estimates for 2007 (in 2007 dollars) interim, global SCC values described
public comment on the estimates and of $56, $34, $20, $10, and $5 per metric above to estimate the benefits of the
underlying methodology.355 ton of CO2. As noted, this is an increased use of renewable fuels. The
It should be emphasized that the emphatically interim SCC value. The interim SCC values for emissions in
analysis here is preliminary. These judgments herein will be subject to 2007, which reflect the Administrations
interim estimates are being used for the further scrutiny and exploration. interim interpretation of the current
short-term while an interagency group literature, are $5, $10, $20, $34, and
develops a more comprehensive 3. Application of Interim SCC Estimates $56, in 2007 dollars, and are based on
characterization of the distribution of to GHG Emissions Reductions a CO2 emissions change of 1 metric ton
SCC values for future economic and While no single rule or action can in 2007. Table VIII.C.31 presents the
regulatory analyses. The interim values independently achieve the deep interim SCC values for both the years
should not be viewed as an expectation worldwide emissions reductions 2007 and 2022 in 2007 dollars.
TABLE VIII.C.31INTERIM SCC SCHEDULE (2007$ PER METRIC TONNE OF CO2)

5% Average SCC 3%
Year 5% 3%
(Newell-Pizer)* from 3% and 5% (Newell-Pizer)*
2007 ....................................................... $5 $10 $20 $34 $56

2022 ....................................................... 8 16 30 53 88
Note: The SCC values are dollar-year and emissions-year specific. These values are presented in 2007$, for individual year of emissions. To
determine values for other years not presented in the table, use a 3% per year growth rate. SCC values represent only a partial accounting for
climate impacts.
* SCC values are adjusted based on Newell and Pizer (2003) to account to future uncertainty in discount rates.
Table VIII.C.32 provides, for the low, 2022 from Table VIII.C.31 to produce the increase in renewable fuel volumes,
base, and high cases, the average annual the average annual monetized benefit multiplying them by the SCC (which is
GHG emissions reductions in 2022. The from the emissions reductions for CO2- increasing at a rate of 3 percent per
annualized emissions reductions are equivalent GHGs. This is equivalent to year), and then discounting the stream
multiplied by the SCC estimates for taking the time stream of emissions from of benefits by 3 percent.
TABLE VIII.C.32AVERAGE ANNUAL EMISSIONS REDUCTION (MILLION METRIC TONNES CO2-e) AND MONETIZED
BENEFITS (MILLION 2007$) IN 2022
Low case Base case High case
Emissions Reductions ................................................................................................................. 136.104 138.411 140.291

5% ................................................................................................................................................ $1,089 $1,107 $1,122
5% (Newell-Pizer) ........................................................................................................................ $2,178 $2,215 $2,245
Average SCC from 3% and 5% .................................................................................................. $4,138 $4,208 $4,265

3% ................................................................................................................................................ $7,186 $7,308 $7,407
354 74FR 25094 (May 26, 2009). Emission Standards and Corporate Average Fuel on its own achieve all needed GHG reductions,
355 Federal Register 40 CFR Parts 86 and 600, Economy Standards; Proposed Rule. noting that [a]gencies, like legislatures, do not
September 28, 2009 Proposed Rulemaking To 356 The Supreme Court recognized in generally resolve massive problems in one fell
Establish Light-Duty Vehicle Greenhouse Gas Massachusetts v. EPA that a single action will not regulatory swoop. See Massachusetts v. EPA, 549
U.S. at 524 (2007).
TABLE VIII.C.32AVERAGE ANNUAL EMISSIONS REDUCTION (MILLION METRIC TONNES CO2-e) AND MONETIZED
BENEFITS (MILLION 2007$) IN 2022Continued
Low case Base case High case
3% (Newell-Pizer) ........................................................................................................................ $11,976 $12,179 $12,344
Table VIII.C.33 provides, for the 2022. The SCC estimates for 2022 VIII.C.33 represent the net present
high, base, and low cases, the monetized increase at a rate of 3 percent per year, value of these emissions for 30 years
benefits from the emissions reductions and are then multiplied by the stream of using a discount rate of 7 percent.
from the increase in renewable fuel emissions for each respective year for 30
volumes for CO2-equivalent GHGs in years. The monetized benefits in table
TABLE VIII.C.33MONETIZED BENEFITS (MILLION 2007$) OF RFS2 VOLUMES IN 2022 USING A 7% DISCOUNT RATE
High Base Low
5% ................................................................................................................................................ $606 $620 $631

5% (Newell-Pizer) ........................................................................................................................ 1,212 1,239 1,262
Average SCC from 3% and 5% .................................................................................................. 2,302 2,355 2,397
3% ................................................................................................................................................ 3,999 4,089 4,163
3% (Newell-Pizer) ........................................................................................................................ 6,665 6,816 6,939
D. Criteria Pollutant Health and projection based on the RFS1-mandated ambient PM2.5. As described in Section
Environmental Impacts volume of 7.1 billion gallons of VI, ambient PM2.5 is likely to increase as
renewable fuels, and a 2022 baseline a result of emissions at biofuel
1. Overview
projection based on the AEO 2007 production plants and from biofuel
This section describes EPAs analysis volume of roughly 13.6 billion gallons transport, both of which are more
of the co-pollutant health and of renewable fuels.357 Thus, the results prevalent in the Midwest. PM
environmental impacts that can be represent the impact of an incremental concentrations are also likely to
expected to occur as a result of the increase in ethanol and other renewable decrease in some areas. While the PM-
increase in renewable fuel use fuels. We note that the air quality related air quality impacts are relatively
throughout the period from initial modeling results presented in this final small, the increase in population-
implementation of the RFS2 rule rule do not constitute the anti- weighted national average PM2.5
through 2022. Although the purpose of backsliding analysis required by Clean exposure results in a net increase in
this final rule is to implement the Air Act section 211(v). EPA will be adverse PM-related human health
renewable fuel requirements established analyzing air quality and health impacts impacts. (the increase in national
by the Energy Independence and of increased renewable fuel use through population weighted annual average
Security Act (EISA) of 2007, the that study and will promulgate PM2.5 is 0.006 g/m3 and 0.002 g/m3
increased use of renewable fuels will appropriate mitigation measures under relative to the RFS1 and AEO2007
also impact emissions of criteria and air section 211(v), separate from this final reference cases, respectively).
toxic pollutants and their resultant action.
ambient concentrations. The fuels As can be seen in Section VI.D of this The required renewable fuel volumes,
changes detailed in Section 3.1 of the preamble, as well as in Section 3.4 of relative to both reference scenarios, are
RIA will influence emissions of VOCs, the RIA that accompanies this preamble, also projected to adversely impact ozone
PM, NOX, and SOX and air toxics and there are both increased and decreased air quality over much of the U.S.,
affect exhaust and evaporative concentrations of ambient criteria especially in the Midwest, Northeast
emissions of these pollutants from pollutants and air toxics. Overall, we and Southeast. These adverse impacts
vehicles and equipment. They will also estimate that the required renewable are likely due to increased upstream
affect emissions from upstream sources fuel volumes will lead to a net increase emissions of NOX in many areas that are
such as fuel production, storage, in criteria pollutant-related health NOX-limited (acting as a precursor to
distribution and agricultural emissions. impacts. By 2022, the final RFS2 ozone formation). There are, however,
Any decrease or increase in ambient volumes relative to both reference case ozone air quality improvements in some
ozone, PM2.5, and air toxics associated scenarios (RFS1 and AEO2007), are highly-populated areas that currently
with the increased use of renewable projected to adversely impact PM2.5 air have poor air quality. This is likely due
fuels will impact human health in the quality over parts of the U.S., while to VOC emission reductions at the
form of a decrease or increase in the risk some areas will experience decreases in tailpipe in urban areas that are VOC-
of incurring premature death and other limited (reducing VOCs role as a
serious human health effects, as well as 357 The 2022 modeled scenarios assume the precursor to ozone formation). Relative
other important public health and following: RFS1 reference case assumes 6.7 Bgal/yr to the RFS1 mandate reference case, the
ethanol and 0.38 Bgal/yr biodiesel; AEO2007 RFS2 volumes result in an increase in
welfare effects. reference case assumes 13.18 Bgal/yr ethanol and
This analysis reflects the impact of 0.38 Bgal/yr biodiesel; RFS2 control case assumes national ozone-related health impacts
the 2022 mandated renewable fuel 34.14 Bgal/yr ethanol, 0.81 Bgal/yr biodiesel, and (population weighted maximum 8-hour
volumes (the RFS2 control case) 0.38 Bgal/yr renewable diesel. Please refer to average ozone increases by 0.177 ppb).
Chapter 3.3 and Table 3.31 for more information
compared with two different reference about the renewable fuel volumes assumed in the
Relative to the AEO2007 reference case,
scenarios that include the use of modeled analyses and the corresponding emissions the RFS2 volumes result in an increase
renewable fuels: a 2022 baseline inventories. in national ozone-related health impacts
(population weighted maximum 8-hour BenMAP is a computer program The emission impacts, air quality results
average ozone increases by 0.116 ppb). developed by the U.S. EPA that and benefits analysis would be different
The analysis of national-level PM2.5- integrates a number of the modeling if, instead of E85, more non-ethanol
and ozone-related health and elements used in previous analyses (e.g., biofuels are used or mid-level ethanol
environmental impacts associated with interpolation functions, population blends are approved and utilized.
the required renewable fuel volumes is projections, health impact functions, In fact, as explained earlier in this
based on peer-reviewed studies of air valuation functions, analysis and preamble, our more recent analyses
quality and human health effects (see pooling methods) to translate modeled indicate that ethanol and E85 volumes
US EPA, 2006 and US EPA, 2008).358 359 air concentration estimates into health are likely to be significantly lower than
We are also consistent with the benefits effects incidence estimates and what we assumed in the interim
analysis methods that supported the monetized benefits estimates. inventories. Furthermore, the final
recently proposed Portland Cement The range of total national-level emission inventories do not include
National Emissions Standards for ozone- and PM-related monetized vehicle-related PM reductions
Hazardous Air Pollutants (NESHAP) impacts associated with the required associated with E85 use, as discussed in
RIA (U.S. EPA, 2009a),360 the proposed renewable fuel volumes is presented in Section VI.A through VI.C. There are
NO2 primary NAAQS RIA (U.S. EPA, Table VIII.D.11.364 We present total additional, important limitations and
2009b),361 and the proposed Category 3 monetized impacts based on the PM- uncertainties associated with the
Marine Diesel Engines RIA (U.S. EPA, and ozone-related premature mortality interim inventories that must be kept in
2009c).362 These methods are described function used. Total monetized impacts mind when considering the results,
in more detail in the RIA that therefore reflect the addition of each which are described in more detail in
accompanies this preamble. To model estimate of ozone-related premature Section VI. While it is difficult to
the ozone and PM air quality impacts of mortality (each with its own row in describe the overall impact of these
the required renewable fuel volumes, Table VIII.D.11) to estimates of PM- limitations and uncertainties on the
we used the Community Multiscale Air related premature mortality. These quantified and monetized health
Quality (CMAQ) model (see Section estimates represent EPAs preferred impacts of the increased renewable fuel
VI.D). The modeled ambient air quality approach to characterizing the best volumes without updating the air
data serves as an input to the estimate of monetized impacts quality modeling analysis, we believe
Environmental Benefits Mapping and associated with the required renewable the results are still useful for describing
Analysis Program (BenMAP).363 fuel volumes. potential national-level health impacts.
358 U.S. Environmental Protection Agency. (2006).
Emissions and air quality modeling Additionally, after the air quality
Final Regulatory Impact Analysis (RIA) for the
decisions were made early in the modeling was completed, we discovered
Proposed National Ambient Air Quality Standards analytical process and as a result, there an error in the way that PM2.5 emissions
for Particulate Matter. Prepared by: Office of Air are a number of important limitations from locomotive engines were allocated
and Radiation. Retrieved March, 26, 2009 at and uncertainties associated with the air to counties in the inventory. The
http://www.epa.gov/ttn/ecas/ria.html.
359 U.S. Environmental Protection Agency. (2008).
quality modeling analysis that must be mismatched allocations between the
Final Ozone NAAQS Regulatory Impact Analysis. kept in mind when considering the reference and control scenarios resulted
Prepared by: Office of Air and Radiation, Office of results. A key limitation of the analysis in PM2.5 emission changes that were too
Air Quality Planning and Standards. Retrieved is that it employed interim emission high in some counties and too low in
March, 26, 2009 at http://www.epa.gov/ttn/ecas/ inventories, which were enhanced
ria.html.
others, by varying degrees. As a result,
360 U.S. Environmental Protection Agency (U.S. compared to what was described in the we did not present the modeling results
EPA). 2009a. Regulatory Impact Analysis: National proposal, but did not include some of for specific localized PM2.5 impacts in
Emission Standards for Hazardous Air Pollutants the later enhancements and corrections Section VI.D. However, because the
from the Portland Cement Manufacturing Industry. of the final emission inventories error was random and offsetting, there
Office of Air Quality Planning and Standards,
Research Triangle Park, NC. April. Available on the
presented in this FRM (see Section VI.A was very little impact on national-level
Internet at http://www.epa.gov/ttn/ecas/regdata/ through VI.C of this preamble). Most PM2.5 emissions. An analysis of the
RIAs/portlandcementria_42009.pdf. significantly, our modeling of the air errors impact on the national emission
361 U.S. Environmental Protection Agency (U.S.
quality impacts of RFS2 relied upon inventories found that direct PM2.5
EPA). 2009b. Proposed NO2 NAAQS Regulatory interim inventories that assumed that
Impact Analysis (RIA). Office of Air Quality
emissions were inflated by 8% relative
Planning and Standards, Research Triangle Park, ethanol will make up 34 of the 36 to the AEO reference case and by 0.6%
NC. April. Available on the Internet at http:// billion gallon renewable fuel mandate, relative to the RFS1 reference case,
www.epa.gov/ttn/ecas/regdata/RIAs/ that approximately 20 billion gallons of leading to a small overestimation of
proposedno2ria.pdf. Note: The revised NO2 this ethanol will be in the form of E85,
NAAQS may be final by the publication of this
national PM-related adverse health
action. and that the use of E85 results in fewer impacts. Note that this error did not
362 U.S. Environmnetal Protection Agency (U.S. emissions of direct PM2.5 from vehicles. impact other PM precursor inventories
EPA). 2009c. Draft Regulatory Impact Analysis: such as NOX and SO2. As a result, we
Control of Emissions of Air Pollution from Category 364 Note that these impacts reflect the national
have concluded that PM2.5 modeling
3 Marine Diesel Engines. Office of Transportation total of PM-related benefits and disbenefits and
and Air Quality, June. Available on the Internet at ozone-related benefits and disbenefits. The sum of
results are still informative for national-
http://www.epa.gov/otaq/regs/nonroad/ total of benefits and disbenefits yields a net level benefits assessment, particularly
420d09002.htm. Note: The C3 rule may be final by negative benefit, or disbenefit. See Tables VIII.D.2 given that other uncertainties in the
the publication of this action. 1 and VIII.D.22 for pollutant- and endpoint- PM2.5 inventory (such as E85 usage,
363 Information on BenMAP, including specific incidence estimates and Table VIII.D.31
discussed below) have a more important
downloads of the software, can be found at for pollutant- and endpoint specific monetized
http://www.epa.gov/ttn/ecas/benmodels.html. values. (and offsetting) effect.
TABLE VIII.D.11ESTIMATED 2022 MONETIZED PM- AND OZONE-RELATED HEALTH IMPACTS FROM THE MANDATED
RENEWABLE FUEL VOLUMES a
Total benefits Total benefits
Premature ozone mortality Reference (billions, 2007$, 3% (billions, 2007$, 7%
function discount rate) b,c discount rate) b,c
2022 Total Ozone and PM Benefits, RFS2 Control Case Compared to RFS1 Reference Case a
Multi-city analyses ............... Bell et al., 2004 ................... Total: $1.4 to $2.8 ..................................................... Total: $1.4 to $2.6.
PM: $0.92 to $2.3 ..................................................... PM: $0.84 to $2.0.
Ozone: $0.52 ................................................................ Ozone: $0.52.
Huang et al., 2005 .............. Total: $1.8 to $3.1 ..................................................... Total: $1.7 to $2.9.
PM: $0.92 to $2.3 ..................................................... PM: $0.84 to $2.0.
Ozone: $0.83 ................................................................ Ozone: $0.83.
Schwartz, 2005 ................... Total: $1.7 to $3.0 ..................................................... Total: $1.6 to $2.8.
PM: $0.92 to $2.3 ..................................................... PM: $0.84 to $2.0.
Ozone: $0.77 ................................................................ Ozone: $0.77.
Meta-analyses ..................... Bell et al., 2005 ................... Total: $2.5 to $3.8 ..................................................... Total: $2.4 to $3.6.
PM: $0.92 to $2.3 ..................................................... PM: $0.84 to $2.0.
Ozone: $1.6 .................................................................. Ozone: $1.6.
Ito et al., 2005 ..................... Total: $3.1 to $4.5 ..................................................... Total: $3.0 to $4.2.
PM: $0.92 to $2.3 ..................................................... PM: $0.84 to $2.0.
Ozone: $2.2 .................................................................. Ozone: $2.2.
Levy et al., 2005 ................. Total: $3.1 to $4.5 ..................................................... Total: $3.1 to $4.3.
PM: $0.92 to $2.3 ..................................................... PM: $0.84 to $2.0.
Ozone: $2.2 .................................................................. Ozone: $2.2.
2022 Total Ozone and PM Benefits, RFS2 Control Case Compared to AEO Reference Case a
Multi-city analyses ............... Bell et al., 2004 ................... Total: $0.63 to $1.0 ................................................... Total: $0.60 to
$0.98.
PM: $0.29 to $0.70 ................................................... PM: $0.26 to $0.63.
Ozone: $0.34 ................................................................ Ozone: $0.34.
Huang et al., 2005 .............. Total: $0.84 to $1.3 ................................................... Total: $0.81 to $1.2.
PM: $0.29 to $0.70 ................................................... PM: $0.26 to $0.63.
Ozone: $0.55 ................................................................ Ozone: $0.55.
Schwartz, 2005 ................... Total: $0.80 to $1.2 ................................................... Total: $0.77 to $1.1.
PM: $0.29 to $0.70 ................................................... PM: $0.26 to $0.63.
Ozone: $0.51 ................................................................ Ozone: $0.51.
Meta-analyses ..................... Bell et al., 2005 ................... Total: $1.3 to $1.8 ..................................................... Total: $1.3 to $1.7.
PM: $0.29 to $0.70 ................................................... PM: $0.26 to $0.63.
Ozone: $1.0 .................................................................. Ozone: $1.0.
Ito et al., 2005 ..................... Total: $1.7 to $2.2 ..................................................... Total: $1.7 to $2.1.
PM: $0.29 to $0.70 ................................................... PM: $0.26 to $0.63.
Ozone: $1.5 .................................................................. Ozone: $1.5.
Levy et al., 2005 ................. Total: $1.8 to $2.2 ..................................................... Total: $1.7 to $2.1.
PM: $0.29 to $0.70 ................................................... PM: $0.26 to $0.63.
Ozone: $1.5 .................................................................. Ozone: $1.5.
Notes:
a Total includes premature mortality-related and morbidity-related ozone and PM
2.5 benefits. Range was developed by adding the estimate
from the ozone premature mortality function to the estimate of PM 2.5- related premature mortality derived from either the ACS study (Pope et al.,
2002) or the Six-Cities study (Laden et al., 2006).
b Note that total benefits presented here do not include a number of unquantified benefits categories. A detailed listing of unquantified health
and welfare effects is provided in Table VIII.D.12.
c Results reflect the use of both a 3 and 7 percent discount rate, as recommended by EPAs Guidelines for Preparing Economic Analyses and
OMB Circular A4. Results are rounded to two significant digits for ease of presentation and computation.
The monetized estimates in Table available data. We have not quantified to quantify a number of known welfare
VIII.D.11 include all of the human a number of known or suspected health effects, including acid and particulate
health impacts we are able to quantify effects linked with ozone and PM for deposition damage to cultural
and monetize at this time. However, the which appropriate health impact monuments and other materials, and
full complement of human health and functions are not available or which do environmental impacts of
welfare effects associated with PM and not provide easily interpretable eutrophication in coastal areas. These
ozone remain unquantified because of outcomes (i.e., changes in heart rate are listed in Table VIII.D.12.
current limitations in methods or variability). Additionally, we are unable
TABLE VIII.D.12UNQUANTIFIED AND NON-MONETIZED POTENTIAL EFFECTS FROM THE MANDATED RENEWABLE FUEL
VOLUMES
Pollutant/effects Effects not included in analysischanges in:
Ozone Healtha .......................................................................................... Chronic respiratory damageb.
TABLE VIII.D.12UNQUANTIFIED AND NON-MONETIZED POTENTIAL EFFECTS FROM THE MANDATED RENEWABLE FUEL
VOLUMESContinued
Pollutant/effects Effects not included in analysischanges in:
Premature aging of the lungsb.

Non-asthma respiratory emergency room visits.
Exposure to UVb (+/)e.
Ozone Welfare .......................................................................................... Yields for.
commercial forests.
some fruits and vegetables.
non-commercial crops.
Damage to urban ornamental plants.
Impacts on recreational demand from damaged forest aesthetics.
Ecosystem functions.
PM Healthc ............................................................................................... Premature mortalityshort term exposuresd.
Low birth weight.
Pulmonary function.
Chronic respiratory diseases other than chronic bronchitis.
Non-asthma respiratory emergency room visits.
PM Welfare ............................................................................................... Residential and recreational visibility in non-Class I areas.
Soiling and materials damage.
Damage to ecosystem functions.
Nitrogen and Sulfate Deposition Welfare ................................................. Commercial forests due to acidic sulfate and nitrate deposition.
Commercial freshwater fishing due to acidic deposition.
Recreation in terrestrial ecosystems due to acidic deposition.
Existence values for currently healthy ecosystems.
Commercial fishing, agriculture, and forests due to nitrogen deposition.
Recreation in estuarine ecosystems due to nitrogen deposition.
Ecosystem functions.
Passive fertilization.
CO Health ................................................................................................. Behavioral effects.
HC/Toxics Healthf ..................................................................................... Cancer (benzene, 1,3-butadiene, formaldehyde, acetaldehyde).
Anemia (benzene).
Disruption of production of blood components (benzene).
Reduction in the number of blood platelets (benzene).
Excessive bone marrow formation (benzene).
Depression of lymphocyte counts (benzene).
Reproductive and developmental effects (1,3-butadiene).
Irritation of eyes and mucus membranes (formaldehyde).
Respiratory irritation (formaldehyde).
Asthma attacks in asthmatics (formaldehyde).
Asthma-like symptoms in non-asthmatics (formaldehyde).
Irritation of the eyes, skin, and respiratory tract (acetaldehyde).
Upper respiratory tract irritation and congestion (acrolein).
HC/Toxics Welfare .................................................................................... Direct toxic effects to animals.
Bioaccumulation in the food chain.
Damage to ecosystem function.
Odor.
Notes:
a The public health impact of biological responses such as increased airway responsiveness to stimuli, inflammation in the lung, acute inflam-
mation and respiratory cell damage, and increased susceptibility to respiratory infection are likely partially represented by our quantified
endpoints.
b The public health impact of effects such as chronic respiratory damage and premature aging of the lungs may be partially represented by
quantified endpoints such as hospital admissions or premature mortality, but a number of other related health impacts, such as doctor visits and
decreased athletic performance, remain unquantified.
c In addition to primary economic endpoints, there are a number of biological responses that have been associated with PM health effects in-
cluding morphological changes and altered host defense mechanisms. The public health impact of these biological responses may be partly rep-
resented by our quantified endpoints.
d While some of the effects of short-term exposures are likely to be captured in the estimates, there may be premature mortality due to short-
term exposure to PM not captured in the cohort studies used in this analysis. However, the PM mortality results derived from the expert
elicitation do take into account premature mortality effects of short term exposures.
e May result in benefits or adverse health impacts.
f Many of the key hydrocarbons related to this rule are also hazardous air pollutants listed in the Clean Air Act.
While there will be impacts available tools and methods to assess air for assessment at the national scale are
associated with air toxic pollutant toxics risk from mobile sources at the those used in the National-Scale Air
emission changes that result from the national scale are not adequate for Toxics Assessment (NATA). The EPA
increased use of renewable fuels, we do extrapolation to incidence estimations Science Advisory Board specifically
not attempt to monetize those impacts. or benefits assessment. The best suite of commented in their review of the 1996
This is primarily because currently tools and methods currently available NATA that these tools were not yet
ready for use in a national-scale benefits health impacts in the 48 contiguous U.S. AEO reference scenario, we estimate
analysis, because they did not consider states associated with the required that the required renewable fuel
the full distribution of exposure and renewable fuel volumes relative to both volumes will result in between 33 and
risk, or address sub-chronic health the RFS1 and AEO reference cases for 85 cases of PM2.5-related premature
effects.365 While EPA has since 2022. For each endpoint presented in deaths annually in 2022. For ozone-
improved the tools, there remain critical Tables VIII.D.21 and VIII.D.22, we related premature mortality, we estimate
limitations for estimating incidence and provide both the mean estimate and the that national changes in ambient ozone
assessing benefits of reducing mobile 90% confidence interval. will contribute to between 54 to 250
source air toxics. EPA continues to work additional premature mortalities in 2022
to address these limitations; however, Using EPAs preferred estimates,
based on the ACS and Six-Cities studies as a result of the required renewable
we did not have the methods and tools
and no threshold assumption in the fuel volumes relative to the RFS1
available for national-scale application
in time for the analysis of the final model of mortality, we estimate that the scenario. When compared to the AEO
rule.366 required renewable fuel volumes will reference scenario, we estimate that the
result in between 110 and 270 cases of required renewable fuel volumes will
2. Quantified Human Health Impacts PM2.5-related premature deaths annually contribute to between 36 to 160
Tables VIII.D.21 and VIII.D.22 in 2022 when compared to the RFS1 additional ozone-related premature
present the annual PM2.5 and ozone reference case. When compared to the mortalities in 2022.
TABLE VIII.D.21ESTIMATED PM2.5-RELATED HEALTH IMPACTS ASSOCIATED WITH THE MANDATED RENEWABLE FUEL
VOLUMES a
2022 RFS2 Control case 2022 RFS2 Control case
compared to RFS1 compared to AEO
Health effect reference case reference case
(5th%95th%ile) (5th%95th%ile)
Premature MortalityDerived from Epidemiology Literature b

Adult, age 30+, ACS Cohort Study (Pope et al., 2002) .......................................................... 110 33
(42 170) (13 53)
Adult, age 25+, Six-Cities Study (Laden et al., 2006) ............................................................ 270 85
(150 400) (46 120)
Infant, age <1 year (Woodruff et al., 1997) ............................................................................. 0 0
(0 1) (0 1)
Chronic bronchitis (adult, age 26 and over) ............................................................................ 65 19
(26 110) (4 18)
Non-fatal myocardial infarction (adult, age 18 and over) ........................................................ 180 51
(65 290) (19 84)
Hospital admissionsrespiratory (all ages) c .......................................................................... 26 7
(25 26) (5 8)
Hospital admissionscardiovascular (adults, age >18) d ....................................................... 55 12
(44 70) (9 16)
Emergency room visits for asthma (age 18 years and younger) ............................................ 180 99
(110 260) (58 140)
Acute bronchitis, (children, age 812) ..................................................................................... 160 50
(0 330) (0 100)
Lower respiratory symptoms (children, age 714) .................................................................. 1,900 600
(910 2,900) (290 910)
Upper respiratory symptoms (asthmatic children, age 918) ................................................. 1,400 450
(450 2,400) (140 750)
Asthma exacerbation (asthmatic children, age 618) ............................................................. 1,700 540
(190 4,800) (60 1,500)
Work loss days ........................................................................................................................ 11,000 3,200
(10,000 13,000) (2,800 3,700)
Minor restricted activity days (adults age 1865) ................................................................... 68,000 19,000
(57,000 78,000) (16,000 22.000)
Notes:
a Note that negative incidence expressed in this table reflects disbenefits; in other words, an increase in total aggregated national-level PM-re-
lated health impacts. Incidence is rounded to two significant digits. Estimates represent incidence within the 48 contiguous United States.
b PM-related adult mortality based upon the American Cancer Society (ACS) Cohort Study (Pope et al., 2002) and the Six-Cities Study (Laden
et al., 2006). Note that these are two alternative estimates of adult mortality and should not be summed. PM-related infant mortality based upon
a study by Woodruff, Grillo, and Schoendorf, (1997).367
c Respiratory hospital admissions for PM include admissions for chronic obstructive pulmonary disease (COPD), pneumonia and asthma.
d Cardiovascular hospital admissions for PM include total cardiovascular and subcategories for ischemic heart disease, dysrhythmias, and
heart failure.
365 Science Advisory Board. 2001. NATA Board/EPA Workshop on the Benefits of Reductions workshop.html for more information about the
Evaluating the National-Scale Air Toxics in Exposure to Hazardous Air Pollutants, which workshop and its associated materials.
Assessment for 1996an SAB Advisory. http:// generated thoughtful discussion on approaches to 367 Woodruff, T.J., J. Grillo, and K.C. Schoendorf.
www.epa.gov/ttn/atw/sab/sabrev.html. estimating human health benefits from reductions 1997. The Relationship Between Selected Causes
366 In April, 2009, EPA hosted a workshop on in air toxics exposure, but no consensus was of Postneonatal Infant Mortality and Particulate Air
estimating the benefits or reducing hazardous air reached on methods that could be implemented in Pollution in the United States. Environmental
pollutants. This workshop built upon the work the near term for a broad selection of air toxics. Health Perspectives 105(6): 608612.
accomplished in the June 2000 Science Advisory Please visit http://epa.gov/air/toxicair/2009
TABLE VIII.D.22ESTIMATED OZONE-RELATED HEALTH IMPACTS ASSOCIATED WITH THE MANDATED RENEWABLE FUEL
VOLUMES a
2022 RFS2 Control case 2022 RFS2 Control case
compared to RFS1 compared to AEO
Health effect reference case reference case
(5th%95th%ile) (5th%95th%ile)
Premature Mortality, All ages b

Multi-City Analyses
Bell et al. (2004)Non-accidental ................................................................................... 54 36
(17 92) (10 62)
Huang et al. (2005)Cardiopulmonary ........................................................................... 90 59
(31 149) (18 100)
Schwartz (2005)Non-accidental .................................................................................... 83 55
(24 140) (13 97)
Meta-analyses:
Bell et al. (2005)All cause ............................................................................................. 180 120
(80 270) (49 180)
Ito et al. (2005)Non-accidental ..................................................................................... 240 160
(140 350) (90 230)
Levy et al. (2005)All cause ........................................................................................... 250 160
(170 330) (110 220)
Hospital admissionsrespiratory causes (adult, 65 and older) c ............................................ 470 310
(20 860) (5 580)
Hospital admissionsrespiratory causes (children, under 2) ................................................. 83 190
(24 140) (52 330)
Emergency room visit for asthma (all ages) ........................................................................... 260 180
(0 740) (0 510)
Minor restricted activity days (adults, age 1865) .................................................................. 300,000 200,000
(110,000 500,000) (59,000 340,000)
School absence days .............................................................................................................. 110,000 75,000
(35,000 180,000) (19,000 120,000)
Notes:
a Note that negative incidence expressed in this table reflects disbenefits; in other words, an increase in total aggregated national-level ozone-
related health impacts. Incidence is rounded to two significant digits. Estimates represent incidence within the 48 contiguous United States. Note
that negative incidence estimates represent additional cases of an endpoint related to pollution increases associated with the increased use of
renewable fuels.
b Estimates of ozone-related premature mortality are based upon incidence estimates derived from several alternative studies: Bell et al.
(2004); Huang et al. (2005); Schwartz (2005) ; Bell et al. (2005); Ito et al. (2005); Levy et al. (2005). The estimates of ozone-related premature
mortality should therefore not be summed.
c Respiratory hospital admissions for ozone include admissions for all respiratory causes and subcategories for COPD and pneumonia.
3. Monetized Impacts health impacts are driven primarily by rate. The total monetized adverse health
Table VIII.D.31 presents the the increase in PM2.5- and ozone-related impacts in 2022 for the required
estimated monetary value of the premature fatalities. renewable fuel volumes relative to the
increase in ozone and PM2.5-related Our estimate of monetized adverse AEO reference case are between $0.63
health effects incidence associated with health impacts in 2022 for the required billion and $2.2 billion assuming a 3
the required renewable fuel volumes renewable fuel volumes relative to the percent discount rate, and between
relative to both the RFS1 and AEO RFS1 reference case, using the ACS and $0.60 billion and $2.1 billion assuming
reference cases for 2022. All monetized Six-Cities PM mortality studies and the a 7 percent discount rate. We are unable
estimates are stated in 2007$. These range of ozone mortality assumptions, to quantify a number of health and
estimates account for growth in real are between $1.4 billion and $4.5 environmental impact categories (see
gross domestic product (GDP) per capita billion, assuming a 3 percent discount Table VIII.D.12). These unquantified
between the present and the year 2022. rate, or between $1.4 billion and $4.3 impacts may be substantial, although
As the table indicates, total adverse billion, assuming a 7 percent discount their magnitude is highly uncertain.
TABLE VIII.D.31ESTIMATED MONETARY VALUE OF HEALTH AND WELFARE EFFECT INCIDENCE

[In millions of 2007$] a b
2022 RFS2 Control 2022 RFS2 Control

case compared to case compared to AEO
RFS1 reference case reference case
PM2.5-Related Health Effect Estimated Mean Value of Reductions

(5th and 95th %ile)
Premature MortalityDerived from Epidemiology Studies c d

Adult, age 30+ ACS study (Pope et al., 2002):
3% discount rate ........................................................................................................... $860 $270
($100$2,300) ($32$700)
7% discount rate ........................................................................................................... $770 $240
($91$2,000) ($28$630)
TABLE VIII.D.31ESTIMATED MONETARY VALUE OF HEALTH AND WELFARE EFFECT INCIDENCEContinued

[In millions of 2007$] a b
2022 RFS2 Control 2022 RFS2 Control

case compared to case compared to AEO
RFS1 reference case reference case
Adult, age 25+ Six-cities study (Laden et al., 2006):

3% discount rate ........................................................................................................... $2,200 $680
($29$5,500) ($90$1,700)
7% discount rate ........................................................................................................... $2,000 $620
($26$5,000) ($81$1,600)
Infant Mortality, <1 year(Woodruff et al. 1997) ................................................................. $4.0 $1.7
($3.0$15) ($1.3$6.7)
Chronic bronchitis (adults, 26 and over) ..................................................................................... $32 $9.4
($2.5$110) ($0.72$33)
Non-fatal acute myocardial infarctions:
3% discount rate ................................................................................................................... $23 $6.6
($4.1$58) ($1.0$17)
7% discount rate ................................................................................................................... $23 $6.4
($3.8$58) ($0.95$16)
Hospital admissions for respiratory causes ................................................................................. $0.39 $0.11
($0.19$0.57 ($0.06$0.17)
Hospital admissions for cardiovascular causes .......................................................................... $1.5 $0.33
($0.96$2.1) ($0.20$0.45)
Emergency room visits for asthma .............................................................................................. $0.07 $0.04
($0.04$0.10) ($0.02$0.06)
Acute bronchitis (children, age 812) .......................................................................................... $0.01 $0.004
($0$0.03) ($0$0.01)
Lower respiratory symptoms (children, 714) ............................................................................. $0.04 $0.01
($0.01$0.07) ($0.004$0.02)
Upper respiratory symptoms (asthma, 911) .............................................................................. $0.04 $0.01
($0.01$0.10) ($0.004$0.03)
Asthma exacerbations ................................................................................................................. $0.09 $0.03
($0.009$0.28) ($0.003$0.09)
Work loss days ............................................................................................................................ $1.7 $0.49
($1.5$1.9) ($0.42$0.55)
Minor restrictedactivity days (MRADs) ..................................................................................... $4.3 $1.2
($2.5$6.2) ($0.69$1.7)
Ozone-related Health Effect
Premature Mortality, All agesDerived from Multi-city analyses:

Bell et al., 2004 .................................................................................................................... $480 $320
($51$1,300) ($32$880)
Huang et al., 2005 ................................................................................................................ $800 $530
($90$2,200) ($56$1,400)
Schwartz, 2005 ..................................................................................................................... $740 $490
($76$2,000) ($48$1,300)
Premature Mortality, All agesDerived from Meta-analyses:
Bell et al., 2005 .................................................................................................................... $1,600 $1,000
($200$4,000) ($130$,700)
Ito et al., 2005 ...................................................................................................................... $2,200 $1,400
($290$5,400) ($190$3,600)
Levy et al., 2005 ................................................................................................................... $2,200 $1,400
($300$5,300) ($200$3,500)
Hospital admissionsrespiratory causes (adult, 65 and older) .................................................. $11 $7.4
($0.49$20) ($0.13$14)
Hospital admissionsrespiratory causes (children, under 2) ..................................................... $3.0 $1.9
($1.0$4,9) ($0.52$3.3)
Emergency room visit for asthma (all ages) ............................................................................... $0.10 $0.07
($0.009$0.26) ($0.008$0.18)
Minor restricted activity days (adults, age 1865) ...................................................................... $19 $13
($6.4$35) ($3.6$24)
School absence days .................................................................................................................. $10 $6.7
($3.1$16) ($1.7$11)
Notes:
a Negatives indicate a disbenefit, or an increase in health effect incidence. Monetary impacts are rounded to two significant digits for ease of
presentation and computation. PM and ozone impacts are nationwide.
b Monetary impacts adjusted to account for growth in real GDP per capita between 1990 and the analysis year (2022).
c Valuation assumes discounting over the SAB recommended 20 year segmented lag structure. Results reflect the use of 3 percent and 7 per-
cent discount rates consistent with EPA and OMB guidelines for preparing economic analyses.
4. What Are the Limitations of the been completely established, the weight EPAs methodology for analyzing air
Health Impacts Analysis? of the available epidemiological, pollution-related health and
Every benefit-cost analysis examining toxicological, and experimental environmental impacts. EPA addressed
the potential effects of a change in evidence supports an assumption of many of these comments in the analysis
environmental protection requirements causality. The impacts of including a of the final PM NAAQS.369 370 This
is limited to some extent by data gaps, probabilistic representation of causality analysis incorporates this most recent
limitations in model capabilities (such were explored in the expert elicitation- work to the extent possible.
as geographic coverage), and based results of the PM NAAQS RIA.
E. Summary of Costs and Benefits
uncertainties in the underlying All fine particles, regardless of their
chemical composition, are equally Presented in this section are a
scientific and economic studies used to
potent in causing premature mortality. summary of costs, benefits, and net
configure the benefit and cost models.
This is an important assumption, benefits of the renewable fuel volumes
Limitations of the scientific literature
because PM related to fuel use in mobile required by final RFS2 program. Table
often result in the inability to estimate
sources may differ significantly from VIII.E1 shows the estimated annual
quantitative changes in health and
PM precursors released from electric societal costs and benefits of the
environmental effects, such as
generating units and other industrial increased use of renewable fuels in
premature mortality associated with
sources. However, no clear scientific 2022. The table also presents estimated
exposure to carbon monoxide.
grounds exist for supporting differential annual net benefits for 2022. In this
Deficiencies in the economics literature
effects estimates by particle type. table, fuel savings are presented as
often result in the inability to assign
The CR function for fine particles negative costs associated with the
economic values even to those health
is approximately linear within the range increased use of renewable fuels (rather
and environmental outcomes which can
of ambient concentrations under than positive savings). Note that all
be quantified. These general
consideration. Thus, the estimates costs and benefits are presented in
uncertainties in the underlying
include health benefits from reducing annual terms; we were unable to
scientific and economics literature,
fine particles in areas with varied estimate a stream of costs and benefits
which can lead to valuations that are
concentrations of PM, including both for many of the cost-benefit categories
higher or lower, are discussed in detail
regions that may be in attainment with and were therefore unable to estimate
in the RIA and its supporting references.
PM2.5 standards and those that are at net present value.
Key uncertainties that have a bearing on Table VIII.E1 presents the benefits of
the results of the benefit-cost analysis of risk of not meeting the standards.
There is uncertainty in the reduced GHG emissionsand
the coordinated strategy include the consequently the annual quantified
magnitude of the association between
following: benefits (i.e., total benefits) and
ozone and premature mortality. The
The exclusion of potentially quantified net benefitsfor each of five
range of ozone impacts associated with
significant and unquantified benefit interim SCC values considered by EPA.
the increased use of renewable fuels is
categories (such as health, odor, and As discussed in Section VIII.C, there is
estimated based on the risk of several
ecological benefits of reduction in air a very high probability (very likely
sources of ozone-related mortality effect
toxics, ozone, and PM); according to the IPCC) that the benefit
Errors in measurement and estimates. In a recent report on the
estimation of ozone-related premature estimates from GHG reductions are
projection for variables such as underestimates because, in part, models
population growth; mortality published by the National
Research Council, a panel of experts and used to calculate SCC values do not
Uncertainties in the estimation of include information about impacts that
future year emissions inventories and reviewers concluded that short-term
exposure to ambient ozone is likely to have not been quantified.
air quality;
Uncertainty in the estimated contribute to premature deaths and that
ozone-related mortality should be TABLE VIII.E1QUANTIFIED COSTS
relationships of health and welfare
included in estimates of the health AND BENEFITS OF THE VOLUMES RE-
effects to changes in pollutant
concentrations including the shape of impacts of reducing ozone exposure.368 QUIRED BY RFS2 RELATIVE TO THE
the CR function, the size of the effect EPA has requested advice from the AEO REFERENCE CASE IN 2022
estimates, and the relative toxicity of the National Academy of Sciences on how [Billions of 2007 dollars] 371
many components of the PM mixture; best to quantify uncertainty in the
Uncertainties in exposure relationship between ozone exposure 2022
estimation; and and premature mortality in the context
Uncertainties associated with the of quantifying health impacts. Quantified Annual Costs
effect of potential future actions to limit Acknowledging the omission of a
range of health and environmental Overall Fuel Cost a ............ $11.8.
emissions.
As Table VIII.D.31 indicates, total impacts, and the uncertainties
Quantified Annual Benefits
impacts are driven primarily by the mentioned above, we present a best
additional premature mortalities estimate of the total monetized impacts Reduced GHG Emissions
estimated to occur each year. Some key based on our interpretation of the best (by SCC):
assumptions underlying the premature available scientific literature and SCC 5% ......................... $0.6 to $1.1.
mortality estimates include the methods supported by EPAs technical
following, which may also contribute to peer review panel, the Science Advisory 369 National Research Council (NRC). 2002.
Boards Health Effects Subcommittee Estimating the Public Health Benefits of Proposed
uncertainty: Air Pollution Regulations. The National Academies
Inhalation of fine particles is (SABHES). The National Academies of Press: Washington, DC.
causally associated with premature Science (NRC, 2002) has also reviewed 370 U.S. Environmental Protection Agency.
death at concentrations near those October 2006. Final Regulatory Impact Analysis
368 National Research Council (NRC), 2008. (RIA) for the Proposed National Ambient Air
experienced by most Americans on a Estimating Mortality Risk Reduction and Economic Quality Standards for Particulate Matter. Prepared
daily basis. Although biological Benefits from Controlling Ozone Air Pollution. The by: Office of Air and Radiation. Available at
mechanisms for this effect have not yet National Academies Press: Washington, DC. http://www.epa.gov/ttn/ecas/ria.html.
TABLE VIII.E1QUANTIFIED COSTS resources. While there are methods to can return to water through depositional
AND BENEFITS OF THE VOLUMES RE- minimize and mitigate the effects on processes.
QUIRED BY RFS2 RELATIVE TO THE water resources, there is still a potential Over the past 20 years, corn has been
AEO REFERENCE CASE IN 2022 to impact both human health and the increasingly grown in rotation with
environment. Since both the irrigation other crops, especially soybeans. As
Continued of corn and ethanol production use large
[Billions of 2007 dollars] 371 corn prices increase relative to prices for
quantities of water, the supply of water other crops, more farmers choose to
could also be significantly affected in
2022 grow corn every year (continuous corn).
some locations.
Continuous corn production results in
SCC 5% Newell-Pizer .... $1.2 to $2.2. 1. Agriculture and Water Quality significantly greater nitrogen losses
SCC from 3% and 5% ... $2.4 to $4.2. annually than a corn-soybean rotation
SCC 3% ......................... $4.1 to $7.3. There are three major pathways for
contaminants to reach water from and lower yields per acre. In response,
SCC 3% Newell-Pizer .... $6.8 to $12.2.
PM2.5- and Ozone-Related $0.63 to agricultural lands: Run off from the farmers may add higher rates of nitrogen
Benefits b, c. $2.2. lands surface, man-made ditches or fertilizer to try to match yields of corn
Energy Security Impacts ... $2.6. subsurface tile drains, and leaching to grown in rotation. Growing continuous
Total Benefits (by SCC): ground water. Many factors influence corn also increases the viability of pests
SCC 5% ......................... $1 to $3.1. the potential for contaminants such as such as corn rootworm. Farmers may
SCC 5% Newell-Pizer .... $1.6 to $4.2. fertilizers, sediment, and pesticides to increase the use of pesticides to control
SCC from 3% and 5% ... $2.8 to $6.2. these pests. As corn acres increase, use
SCC 3% ......................... $4.5 to $9.3.
reach water from agricultural lands,
including: Soil type, slope, climate, crop of the common herbicides like atrazine
SCC 3% Newell-Pizer .... $7.2 to $14.2.
type, and management. Management of and glyphosate (e.g. Roundup) may also
Quantified Net Benefits agricultural lands can take many forms, increase.
but key factors include nutrient and High corn prices may encourage
Net Benefits (by SCC): pesticide application rates and
SCC 5% ......................... $13 to $15.
farmers to grow corn on lands that are
application methods, tillage, use of marginal for row crop production such
SCC 5% Newell-Pizer .... $13 to $16. conservation practices and crop
SCC from 3% and 5% ... $15 to $18. as hay land or pasture. Typically,
SCC 3% ......................... $16 to $21. rotations by farmers, and acreage and agricultural producers apply far less
SCC 3% Newell-Pizer .... $19 to $26. intensity of artificially drained lands. fertilizers and pesticides on pasture
To examine the potential water- land than land in row crops. Corn yield
a Negative costs represent fuel savings from
related impacts of growing crops for on these marginal lands will be lower
decreased gasoline and diesel consumption. biofuels, EPA focused its analysis on
b Negative benefits indicate a disbenefit, or and may require higher fertilizer rates.
an increase in monetized health impacts. Total corn production for several reasons.
Disturbances of these soils can release
includes premature mortality-related and mor- First, corn acres have increased
bidity-related ozone and PM2.5 impacts. Range nitrogen that has been stored in the soil.
dramatically, 20% from 2006 to 2007.
was developed by adding the estimate from Since nitrogen fertilizer prices are tied
Although corn acres have since declined
the ozone premature mortality function to the
somewhat, total corn acres in 2009 to oil prices, fertilizer costs have
estimate of PM2.5-related premature mortality fluctuated. How agricultural producers
derived from either the ACS study (Pope et remained the second highest since
al., 2002) or the Six-Cities study (Laden et al., 1946.372 Second, corn kernels are have responded to these changes in both
2006). currently the predominant and most corn and fertilizer prices is unclear.
c The PM -related impacts presented in
2.5
this table assume a 3% discount rate in the economically viable feedstock for Artificial drainage is another
valuation of premature mortality to account for significant ethanol production. In important factor in determining the
a twenty-year segmented cessation lag. If a addition, corn stover (stalks, leaves) will losses of nutrients from cropland.
7% discount rate had been used, the values likely be the predominant feedstock for Artificial drainage consists either of
would be approximately 9% lower.
cellulosic ethanol production in the subsurface tiles/pipes or man-made
IX. Impacts on Water Upper Mississippi River Basin where ditches that move water from wet soils
we modeled water quality impacts. And to surface waters so crops can be
A. Background third, corn production can contribute planted. In a few areas, drains move
As the production of biofuels significantly to water pollution. Corn water to wells and then groundwater
increases as required by this rule, there has the highest fertilizer and pesticide instead of to surface water. Artificial
may be adverse impacts on both water use per acre and accounts for the largest drainage has transformed large expanses
quality and water quantity affecting share of nitrogen fertilizer use among all of historic wetland soils into productive
drinking water sources and ecological crops.373 Corn generally utilizes only 40 agriculture lands. However, the artificial
habitats. The impacts could come from to 60 percent of the applied nitrogen drains or ditches also move nutrients
several different pathways: Growing fertilizer or the residual organic nitrogen and pesticides more quickly to surface
crops for the biofuel feedstock as well from sources such as manure or waters without any of the attenuation
as production, storage, and distribution soybeans. The remaining nitrogen is that would occur if these contaminants
of the biofuels. Increased production of available to leave the field and run off moved through soils or wetlands. The
biofuel crops may lead to changes in the to surface waters, leach into ground highest proportion of tile drainage
management of cropland and the use of water, or volatilize to the air where it occurs in the Upper Mississippi and the
fertilizer and pesticides that could lead Ohio-Tennessee River basins in areas of
to greater loadings of nutrients, 372 U.S. Department of Agriculture, National
intensive corn production.374 Manmade
pesticides, and sediment to our water Agricultural Statistics Service, Crop Production,
August 12, 2009, available online at: http://
usda.mannlib.cornell.edu/usda/current/CropProd/ 374 U.S. Environmental Protection Agency, EPA
371 Inthis table, we have included only the CropProd-08-12-2009.pdf. Science Advisory Board, Hypoxia in the northern
estimates from the sector models as they provided 373 Committee on Water Implications of Biofuels Gulf of Mexico, EPASAB08003, 275 p., available
a more detailed breakdown of costs and benefits. Production in the United States, National Research online at: http://yosemite.epa.gov/sab/
We have excluded estimates of the agricultural Council, 2008, Water implications of biofuels sabproduct.nsf/
sector impacts of the RFS2 in Table VIII F1 since production in the United States, The National C3D2F27094E03F90852573B800601D93/$File/EPA-
these impacts are considered economic rents. Academies Press, Washington, DC, 88 pp. SAB-08-003complete.unsigned.pdf.
ditches predominate in areas like the perennial crop that does not require are already the major source of total
Eastern Shore of the Chesapeake Bay. high inputs of fertilizers or pesticides. nitrogen loadings to the Mississippi
The increase in corn production and As a perennial crop, there is limited River. A large area of low oxygen, or
prices may also have significant impacts sediment runoff compared to annual hypoxia, forms in the Gulf of Mexico
on voluntary conservation programs crops. There is very minimal acreage of every year, often called the dead zone.
funded by the U.S. Department of switchgrass grown at the present time, The primary cause of the hypoxia is
Agriculture (USDA). Conservation so it is difficult to predict what inputs excess nutrients (nitrogen and
programs provide important funding to farmers will use to cultivate it as a phosphorus) from the Upper Midwest
help agricultural producers implement commercial crop. Some concern has flowing into the Mississippi River to the
practices to protect water quality and been expressed about farmers increasing Gulf. These nutrients trigger excessive
other resources. As land values increase fertilizer application rates and irrigation algal growth (or eutrophication)
due to higher crop prices, USDA on switchgrass to increase yields. resulting in reduced sunlight, loss of
payments may not keep up with the aquatic habitat, and a decrease in
need for farmers and tenant farmers, to 2. Ecological Impacts
oxygen dissolved in the water. Hypoxia
make an adequate return. For example, Nitrogen and phosphorus enrichment threatens commercial and recreational
the cost of farmland in Iowa increased due to human activities is one of the fisheries in the Gulf because fish,
an average of 18% in 2007 from 2006 leading problems facing our nations shrimp, and other aquatic species
prices. lakes, reservoirs, and estuaries. Nutrient cannot live in the low oxygen waters.
Both land retirement programs, like enrichment also has negative impacts on The 2008 hypoxic zone was measured
the Conservation Reserve Program aquatic life in streams; adverse health at 8,000 square miles, the second largest
(CRP), and working land programs, like effects on humans and domestic since measurements began in 1985.376
the Environmental Quality Incentives animals; and impairs aesthetic and In 2009 models predicted an even larger
Program (EQIP), can be affected. Under recreational use. Excess nutrients can hypoxic zone, but it was measured at
CRP, USDA contracts with farmers to lead to excessive growth of algae in only 3,000 square miles. A combination
take land out of crop production to rivers and streams, and aquatic plants in of below average high flows on the
plant grasses or trees. Generally farmers all waters. For example, declines in Mississippi River and winds that mixed
put land into CRP because it is less invertebrate community structure have Gulf waters are the likely causes of the
productive and has other characteristics been correlated directly with increases reduced size of the 2009 zone. The
that make the cropland more in phosphorus concentration. High Mississippi River/Gulf of Mexico
environmentally sensitive, such as high concentrations of nitrogen in the form of Watershed Nutrient Task Forces Gulf
erosion rates. CRP provides valuable ammonia are toxic to aquatic animals. Hypoxia Action Plan 2008 calls for a
environmental benefits both for water Excessive levels of algae have also been 45% reduction in both nitrogen and
quality and for wildlife habitat. shown to be damaging to invertebrates. phosphorus reaching the Gulf to reduce
Midwestern states, where much of U.S. Finally, fish and invertebrates will the size of the zone.377 The Action Plan
corn is grown, tend to have lower CRP experience growth problems and can die states that an additional reduction in
reenrollment rates than the national if either oxygen is depleted or pH nitrogen and phosphorus beyond the
average. Under EQIP, USDA makes cost- increases are severe. Both of these 45% would be necessary to account for
share payments to farmers to implement conditions are symptoms of increased corn production for ethanol
conservation practices. Some of the eutrophication. As a biologic system and climate change impacts.
most cost-effective practices becomes more enriched by nutrients, Alexander, et al.378 modeled the
implemented through these different species of algae may spread sources of nutrient loadings to the Gulf
conservation programs include: and species composition can shift. of Mexico using the USGS SPARROW
Riparian buffers; crop rotation; Nutrient pollution is widespread. model. They estimated that agricultural
appropriate rate, timing, and method of Although the most widely known sources contribute more than 70% of the
fertilizer application; cover crops; and, examples of significant nutrient impacts delivered nitrogen and phosphorus.
on tile-drained lands, treatment are in the Gulf of Mexico and the Corn and soybean production accounted
wetlands and controlled drainage. If Chesapeake Bay, there are known for 52% of nitrogen delivery and 25%
producers believe that participation in impacts in over 80 estuaries/bays, and of the phosphorus delivery.
conservation programs may reduce their thousands of rivers, streams, and lakes. Several recent scientific reports have
profits, they may be less willing to Waterbodies in virtually every state and estimated the impact of increasing
participate and/or require higher territory in the U.S. are impacted by ethanol feedstock acres in the Gulf of
payments to offset perceived losses. nutrient-related degradation. Reducing
The water quality impacts of nutrient pollution is a priority for EPA. 376 Louisiana Universities Marine Consortium,
agricultural cellulosic feedstocks such 2009, Gulf of Mexico Dead Zone Surprising Small,
as corn stover and switchgrass are 3. Impacts to the Gulf of Mexico but Severe, available online at: http://
www.gulfhypoxia.net/Research/
unknown, since cellulosic ethanol is not According to the National Research Shelfwide%20Cruises/2009/Files/
currently produced commercially. Corn Council, nutrients and sediment are the Press_Release.pdf.
377 Mississippi River/Gulf of Mexico Watershed
stover appears to be one of the most two primary water quality problems in
Nutrient Task Force, 2008, Gulf hypoxia action plan
viable feedstock for cellulosic ethanol, the Mississippi River Basin and the Gulf 2008 for reducing, mitigating, and controlling
especially in the Corn Belt states. When of Mexico.375 Production of corn for hypoxia in the northern Gulf of Mexico and
left in the field, corn stover maintains ethanol may exacerbate these existing improving water quality in the Mississippi River
the soil organic carbon which has many serious water quality problems. basin, 61 p., Washington, DC, available online at:
http://www.epa.gov/msbasin/actionplan.htm.
benefits as a source of nutrients, Nitrogen fertilizer applications to corn 378 Alexander, R.B., Smith, R.A., Schwarz, G.E.,
preventing erosion by wind and water, Boyer, E.W., Nolan, J.V., and Brakebill, J.W., 2008,
and increasing soil aeration and water 375 Committee on the Mississippi River and the
Differences in phosphorus and nitrogen delivery to
infiltration. If corn stover is Clean Water Act, National Research Council, 2008, the Gulf of Mexico from the Mississippi River basin,
Mississippi River Water Quality and the Clean Environmental Science and Technology, v. 42, no.
overharvested, there may be impacts to Water Act: Progress, Challenges, and Opportunities, 3, p. 822830, available online at: http://
both soil quality and water quality. The National Academies Press, Washington, DC, pubs.acs.org/cgi-bin/abstract.cgi/esthag/2008/42/
Unlike corn, switchgrass is a native, 252 pp. i03/abs/es0716103.html.
Mexico watershed. Donner and major water quality concerns such as from corn stover, would be produced in
Kuchariks 379 study showed increases Gulf of Mexico hypoxia, large corn the reference case since the AEO report
in nitrogen export to the Gulf as a result production, and numerous ethanol did not include cellulosic ethanol
of increasing corn ethanol production production plants. production in its estimates.
from 2007 levels to 15 billion gallons in On average the UMRB contributes The SWAT model was applied (i.e.,
2022. They concluded that the about 39% of the total nitrogen loads calibrated) to the UMRB using 1960 to
expansion of corn-based ethanol and 26% of the total phosphorus loads 2001 weather data and flow and water
production could make it almost to the Gulf of Mexico. The high quality data from 13 USGS gages on the
impossible to meet the Gulf of Mexico percentage of nitrogen from the UMRB main stem of the Mississippi River. The
nitrogen reduction goals without a is primarily due to the large inputs of 42-year SWAT model runs were
radical shift in feed production, fertilizer for agriculture and the 60% of performed and the results analyzed to
livestock diet, and management of cropland that is artificially drained by establish runoff, sediment, nitrogen, and
agricultural lands. The study estimated tiles. Since the mid 1990s, the annual phosphorous loadings from each of the
a mean dissolved inorganic nitrogen nitrate-nitrogen flux has steadily 131 8-digit HUC subwatersheds and the
load increase of 10% to 18% from 2007 decreased. The Science Advisory Board larger 4-digit subbasins, along with the
to 2022 to meet the 15 billion gallon report attributes this decline to higher total outflow from the UMRB and at the
corn ethanol goal. EPAs Science amount of nitrogen removed during various USGS gage sites along the
Advisory Board report to the harvest, due to higher crop yields. For Mississippi River. These results
Mississippi River/Gulf of Mexico the same time period, phosphorus provided the Reference Scenario model
Watershed Task Force estimated that inputs increased 12%. values to which the future alternatives
corn grown for ethanol will result in an are compared.
1. SWAT Model Physical structures that disconnect
additional national annual loading of
almost 300 million pounds of nitrogen. EPA selected the SWAT (Soil and fertile floodplains with seasonal
An estimated 80% of that nitrogen Water Assessment Tool) model to assess fluctuation of stream and river levels
loading or 238 million pounds will nutrient and sediment loads from also affect water quantity and quality by
occur in the Mississippi-Atchafalaya changes in agricultural production in altering the ability of these soils to serve
River Basin and contribute nitrogen to the UMRB. SWAT is a physical process as a sink for nutrient rich waters. In lieu
the hypoxia in the Gulf of Mexico. The model developed to quantify the impact of data on where these structures are or
results of a study by Costello, et al. of land management practices in large, may be constructed, these effects were
indicate that moving from corn to complex watersheds.381 not modeled.
switchgrass and corn stover to produce 2. AEO 2007 Reference Case 3. Reference Cases and RFS2 Control
ethanol will result in a 20% decrease in Case
the nitrate outputs from the Mississippi- In order to assess alternative potential
Atchafalaya River Basin. This decrease future conditions within the UMRB, To assess the impacts of the increased
is not enough to meet the EPA target for EPA developed a SWAT model of a use of corn ethanol, we modeled an
reduction of the hypoxic zone reference case scenario of current RFS2 Control Case and compared it to
reduction.380 conditions against which to analyze the both the AEO 2007 Reference Case and
future impact of increased corn the RFS1 Mandate Reference Case for
B. Upper Mississippi River Basin production. For the NPRM, we used a the years 2010, 2015, 2020, and 2022.
Analysis 2005 baseline. For the final rule, we The RFS2 national corn ethanol
To provide a quantitative estimate of revised the baseline to correspond with volumes of 11.24 billion gallons a year
the impact of the increased use of the agricultural analysis described in (BGY) for 2010, and 15 BGY for 2016 to
renewable fuels and production of corn Section VIII.A. Therefore we used the 2022 were adjusted for the UMRB.
ethanol generally on water quality, EPA corn ethanol production baseline from Annual increases in corn yield of 1.23%
conducted an analysis that modeled the the Annual Energy Outlook (AEO) 2007 were built into the future scenarios.
changes in loadings of nitrogen, report382 as our reference case. We National average corn yields have been
phosphorus, and sediment from assumed that 33% of the corn produced increasing primarily due to favorable
agricultural production in the Upper in the UMRB was converted to corn weather conditions and improvement in
Mississippi River Basin (UMRB). The ethanol, based on estimates from practices to reduce stress on the corn
UMRB drains approximately 189,000 USDA.383 This baseline does not plants from excess water, drought, and
square miles, including large parts of include corn ethanol produced at the pests. Fewer corn acres were needed to
the states of Illinois, Iowa, Minnesota, volumes required by this rulemaking. meet ethanol production goals in the
Missouri, and Wisconsin. Small The analysis assumes that no cellulosic Control Case scenario after 2015 due to
portions of Indiana, Michigan, and ethanol, including ethanol produced those yield increases. Corn acres
South Dakota also lie within the basin. increased 9% in 2022 between the AEO
EPA selected the UMRB because it is 381 Gassman, P.W., Reyes, M.R., Green, C.H.,
2007 Reference Case and the RFS2 (No
representative of the many potential Arnold, J.G., 2007, The soil and water assessment Stover) Control Case. We were not able
tool: Historical development, applications, and
issues associated with ethanol future research directions. Transactions of the to model the impacts of corn stover
production, including its connection to American Society of Agricultural and Biological removal at this time, so the analysis
Engineers, v. 50, no. 4, p. 12111240. http:// only reflects the impacts of increased
379 Donner, S.D. and Kucharik, C.J., 2008, Corn- www.card.iastate.edu/environment/items/ use of corn grain for renewable fuel use.
based ethanol production compromises goal of asabe_swat.pdf.
Tables IX.B.31 through IX.B.33
382 U. S. Department of Energy, Energy

reducing nitrogen export by the Mississippi River,
PNAS, v. 105, no. 11, p. 45134518, available Information Administration, Annual Energy compare the model outputs for nitrogen,
online at: http://www.pnas.org/content/105/11/ Outlook 2007 With Projections to 2030, February phosphorus, and sediment between the
4513.full. 2007, available on-line at: http://tonto.eia.doe.gov/ AEO 2007 Reference Case and the RFS2
380 Costello, C.; Griffin, W.M.; Landis, A.E.; ftproot/forecasting/0383(2007).pdf. (No Stover) Control Case scenarios for
Matthew, H.S., 2009, Impact of biofuel crop 383 U.S. Department of Agriculture, USDA
production on the formation of hypoxia in the Gulf Agricultural Projections to 2018, February 2009,
the years 2010, 2015, 2020, and 2022.
of Mexico, Environmental Science and Technology, available on-line at: http://www.ers.usda.gov/ Land load is the total amount of
43 (20), pp. 79857991. Publications/OCE091/. nitrogen or phosphorus that reaches a
stream within the UMRB. The total Mississippi River basin, not the entire increased average corn yield per acre,
outflow is the nitrogen, phosphorus, or Mississippi River watershed. As noted resulting in greater plant uptake of
sediment measured at the outlet of the earlier, the UMRB contributes about nitrogen and fewer corn acres planted to
UMRB at Grafton, Illinois after 39% of the total nitrogen loads and 26% reach the ethanol production
accounting for in-stream loses due to of total phosphorus loads to the Gulf of requirements of this rule.
uptake or assimilation. These results Mexico. The decreasing nutrient load
only estimate loadings from the Upper over time is likely attributable to the
TABLE IX.B.31AVERAGE ANNUAL NITROGEN LOADS: COMPARISON OF AEO 2007 REFERENCE CASE TO THE 2022
RFS2 (NO STOVER) CONTROL CASE
[% difference in parentheses]
AEO 2007 reference case 2022 RFS2 (No Stover) Control case
Model run Total land load, Total outflow, Total land load, Total outflow,
million lbs million lbs million lbs million lbs
2010 ......................................................................................... 1948 1470 1944 (0.21) 1467 (0.20)

2015 ......................................................................................... 1911 1441 1946 (1.83) 1469 (1.94)
2020 ......................................................................................... 1887 1421 1912 (1.32) 1442 (1.48)
2022 ......................................................................................... 1877 1413 1897 (1.07) 1430 (1.20)
About 24 to 26% of the nitrogen and environmental concern. Five percent or pollutant becomes an air pollutant until
phosphorus leaving agricultural fields more of the nitrogen can be converted it is either captured through biological
was assimilated (taken by aquatic plants to nitrous gas, a powerful greenhouse sequestration or converted fully to
or volatilized) before reaching the outlet gas that has 300 times the climate elemental nitrogen.
of the UMRB. The assimilated nitrogen warming potential of carbon dioxide,
is not necessarily eliminated as an the major greenhouse. Thus, a water
TABLE IX.B.32AVERAGE ANNUAL PHOSPHORUS LOADS: COMPARISON OF AEO 2007 REFERENCE CASE TO THE 2022
RFS2 (NO STOVER) CONTROL CASE
AEO 2007 Reference case 2022 RFS2 (No Stover) control case
Model run Total land load, Total outflow, Total land load, Total outflow,
million lbs million lbs million lbs million lbs
2010 ......................................................................................... 180.0 133.8 179.9 (0.06) 133.7 (0.07)

2015 ......................................................................................... 178.2 132.3 179.6 (0.79) 133.6 (0.98)
2020 ......................................................................................... 177.0 131.3 178.2 (0.68) 132.4 (0.84)
2022 ......................................................................................... 176.5 130.9 177.6 (0.62) 131.8 (0.69)
Total sediment outflow showed very ethanol and the crop yield is a complex choosing this watershed included:
little change over all scenarios. This relationship. Increased demand for corn Percentage of corn area representative of
result is primarily due to corn stover based ethanol will not always result in the UMRB, stream segments included in
remaining on the field following harvest increases in corn acres. Our modeling EPAs 303(d) list of impaired waters due
and therefore reducing sediment demonstrated that in less than a decade, to high nutrient levels, biorefinery
transport to water. increasing corn yields may counter the plants, drinking water intakes, and
need for increased corn production observed streamflow and water quality
TABLE IX.B.33AVERAGE ANNUAL resulting in the number of acres of corn data. Nearly 88% of the watershed is in
SEDIMENT LOADS: COMPARISON OF stabilizing and additional nutrient and agriculture. 75% of the watershed
AEO 2007 REFERENCE CASE TO sediment loadings decreasing from the produces corn and soybeans, mostly in
THE 2022 RFS2 CONTROL CASE earlier peaks. rotation. Hay and other row crops are
At this time, we are not able to assess produced on the remaining agriculture
the impact of these additional loadings land. The city of Des Moines makes up
2007 AEO 2022 Control on the size of the Gulf of Mexico about 8% of the watershed. The state of
volume case hypoxia zone or water quality within Iowa has listed numerous stream
Model run Total outflow, the UMRB. For more details on the segments of the Raccoon River as
Total outflow, analysis, including comparisons with impaired.
million tons million tons
the RFS1, see Chapter 6 in the RIA. The case study used the same
2010 .......... 6.231 6.232 (0.02) assumptions and scenarios as those

4. Case Study used for the UMRB analysis. SWAT-
2015 .......... 6.221 6.233 (0.19)
2020 .......... 6.214 6.224 (0.16) To evaluate local water quality simulated streamflow and water quality
2022 .......... 6.211 6.220 (0.14) impacts that are impossible to ascertain (total nitrogen and phosphorus, and
at the scale of the UMRB, we also sediment loadings) were calibrated
The relationship between the number modeled the Raccoon River watershed against observed data at both monthly
of acres of corn needed to produce in central Iowa. The criteria for and yearly time steps.
As in the UMRB study, nitrogen loads order established a Federal Leadership process water and neglect the water
to water increased for the future Committee, chaired by EPA, and with discharged as reject water.
scenarios, though at a greater rate. senior representatives from the The largest source of wastewater
Future phosphorus loads decreased in departments of Agriculture, Commerce, discharge is reverse osmosis reject water
the Raccoon River model, where they Defense, Homeland Security, Interior, from process water purification. The
had shown minor increases in the and Transportation. In November 2009, reverse osmosis process concentrates
UMRB model. For the Raccoon River, these federal agencies released a draft groundwater minerals to levels where
there was a greater decrease in sediment strategy which contains a range of they can have water quality impacts.
load, which is the likely cause for the approaches for accelerating cleanup of There is really no means of treating
decrease in phosphorus loadings. the nations largest estuary and its vast these ions to reduce toxicity, other than
watershed.384 The draft strategy calls for further concentration and disposal, or
5. Sensitivity Analysis use of in-stream dilution. Some facilities
increased accountability and
Using the existing UMRB SWAT performance from pollution control, have had to construct long pipelines to
model, a sensitivity analysis was habitat protection and land conservation get access to dilution so they can meet
conducted on a number of important programs at all levels of government, water quality standards. Ethanol plants
meteorological and management related including an expanded use of regulatory also discharge cooling water blowdown,
factors. The goal was to further authorities to address pollution control where some water is discharged to avoid
understand the model characteristics and additional voluntary and market- the buildup of minerals in the cooling
and sensitivities to parameters and based solutionsparticularly when it system. These brines are similar to the
input forcing functions that control the comes to habitat protection and land reject water described above. In
model response for the key conservation programs. The proposed addition, if off-batch ethanol product or
environmental indicators of concern. actions are in response to overwhelming process water is discharged, the waste
Scenarios were constructed using four scientific evidence that the health of the stream can have high Biochemical
factors: fertilization application Chesapeake Bay remains exceptionally Oxygen Demand (BOD) levels. BOD
threshold, corn residue removal, daily poor, despite the concerted restoration directly affects the amount of dissolved
air temperature, and daily precipitation. efforts of the past 25 years. oxygen in rivers and streams. The
The results of the analysis showed that greater the BOD, the more rapidly
rainfall and temperature are the most Agricultural lands contribute more oxygen is depleted in the stream. The
influential factors for all model outputs: nutrients to the Chesapeake Bay than consequences of high BOD are the same
water yield, total nitrogen and any other land use. To estimate the as those for low dissolved oxygen:
phosphorus loadings, and sediment increase in nutrient loads to the Bay aquatic organisms become stressed,
loadings. These results underscored the from changes to agricultural crop suffocate, and die.
importance of representing these two production from 2005 to 2008, the Older generation production facilities
driving factors accurately in hydrologic Chesapeake Bay Program Watershed used four to six gallons of process water
modeling. Corn residue removal Model Phase 4.3 and Vortex models to produce a gallon of ethanol, but
noticeably reduced nutrient loading into were utilized. Total nitrogen loads newer facilities use less than three
streams while increasing sediment increased by almost 2.4 million pounds gallons of water in the production
loads. However, since corn residue is from an increase of almost 66,000 corn process. Most of this water savings is
the main source of organic nitrogen and acres. As agriculture land use shifts gained through improved recycling of
phosphorus, the removal of the residue from hay and pasture to more water and heat in the process. Water
leads to the need for higher nutrient intensively fertilized row crops, this supply is a local issue, and there have
inputs in the growing season. The analysis estimates that nitrogen loads been concerns with water consumption
fertilization application threshold increase by 8.8 million pounds. as new plants go online. Some facilities
scenario did not tangibly impact water 2. Ethanol Production and Distribution are tapping into deeper aquifers as a
yield and sediment loading. The source of water. These deeper water
findings from this study indicated that a. Production resources tend to contain higher levels
future climate change could greatly of minerals and this can further increase
There are three principal sources of
influence water availability and the concentration of minerals in reverse
discharges to water from ethanol plants:
pollution from corn cropland. osmosis reject water. Geographic
reject water from water purification,
impacts of water use vary. A typical
C. Additional Water Issues cooling water blowdown, and off-batch
plant producing 50 million gallons of
ethanol. Most ethanol facilities use
The full water quality and water ethanol per year uses a minimum of 175
onsite wells to produce the process
quantity impacts resulting from corn million gallons of water annually. In
water for the ethanol process.
ethanol production go beyond the Iowa, water consumption from ethanol
Groundwater sources are generally not
ability of our model. For example, the refining accounts for about seven
suitable for process water because of
model does not account for fresh water percent of all industrial water use, and
their mineral content. Therefore, the
constraints in irrigated agriculture in is projected to be 14% by 2012or
water must be treated, commonly by
corn producing areas or predict future about 50 million gallons per day.
reverse osmosis. For every two gallons
increases in drainage of agricultural
of pure water produced, about a gallon b. Distillers Grain with Solubles
lands. The following issues are
of brine is discharged as reject water Distillers grain with solubles (DGS) is
summarized to provide additional
from this process. Most estimates of an important co-product of ethanol
context about the broader range of
water consumption in ethanol production. About one-third of the corn

potential impacts. See Chapter 6 in the
production are based on the use of clean processed into ethanol is converted into
RIA for more discussion of these issues.
DGS. DGS has become an increasingly
1. Chesapeake Bay Watershed 384 Federal Leadership Committee for the
important feed component for confined
Chesapeake Bay, November 9, 2009, Executive
In May 2009, President Obama issued Order 13508: Draft Strategy for Protecting and
livestock. DGS are higher in crude
Executive Order 13508 on Chesapeake Restoring the Chesapeake Bay, available on-line at: protein (nitrogen) and three to four
Bay Restoration and Protection. The http://executiveorder.chesapeakebay.net/. times higher in phosphorus relative to
traditional feeds. When nitrogen and toluene and 95% for benzene).386 The 3. Biodiesel Plants
phosphorus are fed in excess of the plume of BTEX compounds from a fuel Biodiesel plants use much less water
animals needs, these nutrients are spill (benzene, toluene, ethylbenzene than ethanol plants. Water is used for
excreted in the manure. When manure and xylenes) can extend as much as washing impurities from the finished
is applied to crops at rates above their 70% farther in ground water and can product. Water use is variable, but is
nutrient needs or at times the crop persist longer, thereby increasing usually less than one gallon of water for
cannot use the nutrients, the nutrients potential exposures to these each gallon of biodiesel produced.
can run off to surface waters or leach compounds.387 Larger well-designed plants use water
into ground waters. Ethanol leak and spills from the more sparingly, while smaller producers
Livestock producers can limit the approximately 600,000 gas stations in use more water. Some facilities recycle
potential pollution from manure the U.S, could have a significant impact washwater, which reduces water
applications to crops by implementing on water quality and drinking water consumption. The levels of BOD
comprehensive nutrient management. supplies. Urban areas, that rely on (biological oxygen demand) in process
Due to the substantially higher ground water for drinking water would wastewater from biodiesel plants is
phosphorus content of manure from be affected most, especially where are highly variable. Most production
livestock fed DGS, producers will existing water shortages. processes produce washwater that has
potentially need significantly more With the increasing use of ethanol in very high BOD levels. The high BOD
acres to apply the manure so that the fuel supply nationwide, it is levels of these wastes can overload and
phosphorus will not be applied at rates important to understand the impact of disrupt municipal treatment plants.
above the needs of the crops. This is a ethanol on the existing tank Crude glycerin is an important side
particularly important concern in areas infrastructure. Federal regulations product from the biodiesel process and
where concentrated livestock require that underground storage tank is about 10% of the final product.
production already produces more (UST) systems be compatible with the Although there is a commercial market
phosphorus in the manure than can be fuel stored. Because much of the current for glycerin, the rapid development of
taken up by crops or pasture land in the underground storage tank equipment the biodiesel industry has caused a glut
vicinity. was designed and tested for use with of glycerin production and many
Several recent studies have indicated petroleum fuels, there may be many facilities dispose of their glycerin. Poor
that DGS may have an impact on food UST systems currently in use that handling of crude glycerin has resulted
safety. Cattle fed DGS have a higher contain materials that are incompatible in disruptions at sewage treatment
prevalence of a major food-borne with ethanol blends greater than 10%. plants and fish kills.
pathogen, E. coli O157, than cattle Combined with the fact that ethanol is
4. Water Quantity
without DGS in their diets.385 More more corrosive than petroleum, there is
research is needed to confirm these concern regarding the increased Water demand for crop production for
studies and devise methods to eliminate potential for leaks from existing ethanol could potentially be much
the potential risks. distribution systems, terminals and gas larger than biorefinery demand.
stations and subsequent impacts on According to the National Research
c. Ethanol Leaks and Spills from Fueling Council, the demand for water to
water supplies. Given the practical
Stations irrigate crops for biofuels will not have
challenges of determining the age and
The potential for exposure to fuel materials of underground storage an impact on national water use, but it
components and/or additives can occur equipment at approximately 233,000 is likely to have significant local and
when underground fuel storage tanks federally regulated facilities, it may be regional impacts. The impact is crop
leak fuel into ground water that is used difficult or impossible to confirm the and region specific, but could be
for drinking water supplies or when compatibility of current underground especially great in areas where new
spills occur from aboveground tanks or storage tanks and other tank-related acres are irrigated.
distribution systems that contaminate hardware with ethanol blends. Further 5. Drinking Water
surface drinking water supplies, or discussion of challenges in retail
distribution are discussed in Section 1.6 Increased corn production will result
surface waters. Additionally, in surface
of the RIA. in the increased use of fertilizers and
waters, rapid biodegradation of ethanol
herbicides which can drain to surface
can result in depletion of dissolved In 2008, there were 7,400 reported
water or ground water sources used by
oxygen with potential mortality to releases from underground storage
public water systems and individual
aquatic life. tanks. Therefore, EPA is undertaking
home owners on private wells. This may
Regarding leaks or spills and drinking analyses designed to assess the potential
increase the occurrence of nitrate,
water impacts, ethanol biodegrades impacts of ethanol blends on tank
nitrite, and the herbicide Atrazine in
quickly and is not necessarily the infrastructure and leak detection
sources of drinking water. The U.S.
pollutant of greatest concern in these systems and determine the resulting
Geological Survey evaluated the fate
situations. Instead, ethanols high water quality impacts.
and transport of herbicides in surface
biodegradability shifts the subsurface water, ground water, and in
geochemistry, which can cause the 386 Mackay, D.M., de Sieyes, N. R., Einarson,
precipitation in the Midwest during the
reduced biodegradation of benzene, M.D., Feris, K.P., Pappas, A.A., Wood, I.A.,
Jacobson, L., Justice, L.G., Noske, M.N., Scow, K.M., 1990s. The results of these studies
toluene, and xylene (up to 50% for and Wilson, J.T., 2006, Impact of ethanol on the showed the occurrence and temporal
natural attenuation of benzene, toluene, and distribution of herbicides and their

385 Jacob, M. D., Fox, J. T., Drouillard, J. S., o-Xylene in a normally sulfate-reducing aquifer,
Environmental Science & Technology, v. 40, p.
associated degradation products in
Renter, D. G., Nagaraja, T. G., 2008, Effects of dried
distillers grain on fecal prevalence and growth of 61236130. reservoir outflows.388
Escherichia coli O157 in batch culture 387 Ruiz-Aguilar, G. M. L.; OReilly, K.; Alvarez,
fermentations from cattle, Applied and P. J. J., 2003, Forum: A comparison of benzene and 388 Scribner, E.A., Thurman, E.M., Goolsby, D.A.,
Environmental Microbiology, v. 74, no. 1, p. 3843, toluene plume lengths for sites contaminated with Meyer, M.T., Battaglin, W.A., and Kolpin, D.W.,
available online at: http://aem.asm.org/cgi/content/ regular vs. ethanol-amended gasoline, Ground 2005, Summary of significant results from studies
abstract/74/1/38. Water Monitoring and Remediation, v. 23, p. 4853. Continued
Under the Safe Drinking Water Act, significant regulatory action because it C. Regulatory Flexibility Act
EPA has established enforceable is likely to have an annual effect on the
1. Overview
standards for these contaminants that economy of $100 million or more.
apply to public water systems. Source Accordingly, EPA submitted this action The Regulatory Flexibility Act (RFA)
water contamination by these chemicals to the Office of Management and Budget generally requires an agency to prepare
may raise local water system costs for (OMB) for review under EO 12866 and a regulatory flexibility analysis of any
treatment or for increased energy to any changes made in response to OMB rule subject to notice and comment
pump water where ethanol production recommendations have been rulemaking requirements under the
is accelerating the long running documented in the docket for this Administrative Procedure Act or any
depletion of aquifers e.g., pumping extra action. other statute unless the agency certifies
water to grow the additional corn in In addition, EPA prepared an analysis that the rule will not have a significant
addition to pumping extra water to of the potential costs and benefits economic impact on a substantial
process the corn into ethanol. There is associated with this action. This number of small entities. Small entities
also an (often concurrent) risk of analysis is contained in the Regulatory include small businesses, small
exhausting local drinking water Impact Analysis, which is available in organizations, and small governmental
supplies where aquifers have been the docket for this rulemaking and at the jurisdictions.
severely depleted. For purposes of assessing the impacts
docket internet address listed under
of the renewable fuel volume
ADDRESSES in the first part of this final
X. Public Participation requirements of RFS2 on small entities,
rule.
Many interested parties participated small entity is defined as: (1) A small
in the rulemaking process that B. Paperwork Reduction Act business as defined by the Small
culminates with this final rule. This Business Administrations (SBA)
The information collection
process provided opportunity for regulations at 13 CFR 121.201 (see table
requirements in this have been
submitting written public comments below); (2) a small governmental
submitted for approval to the Office of
following the proposal that we jurisdiction that is a government of a
Management and Budget (OMB) under
published on May 26, 2009 (74 FR city, county, town, school district or
the Paperwork Reduction Act, 44 U.S.C.
24904), and we considered these special district with a population of less
3501 et seq. The information collection
comments in developing the final rule. than 50,000; and (3) a small
requirements are not enforceable until
In addition, we held a public hearing on organization that is any not-for-profit
OMB approves them. enterprise which is independently
the proposed rulemaking on June 9, Information to be collected under this
2009, and we have considered owned and operated and is not
rulemaking includes compliance reports dominant in its field.
comments presented at the hearing. and reports regarding the generation and
Throughout the rulemaking process, The following table provides an
assignment of, and transactions overview of the primary SBA small
EPA met with stakeholders including involving, RINs. This final rule involves
representatives from the fuel and business categories potentially affected
registration requirements, recordkeeping by this regulation:
renewable fuels industries, the and reporting. Affected parties include
agricultural sector, and others. The producers of renewable fuels, importers, Defined as
program we are finalizing today was NAICS a
domestic and foreign refiners, exporters, Industry a small entity by codes
developed as a collaborative effort with domestic and foreign parties who own SBA if:
these stakeholders. RINs, and biofuel feedstock producers.
We have prepared a detailed Gasoline and 1,500 employ- 324110
Individual items of recordkeeping and diesel fuel re- ees.
Summary and Analysis of Comments reporting are discussed in great detail in
document, which describes the finers.
this preamble and in the Supporting
comments we received on the proposal Statement for the Renewable Fuels
a North American Industrial Classification
and our response to each of these System.

Standard (RFS2) Final Rule, which has
comments. The Summary and Analysis been placed in the public docket. 2. Background
of Comments is available in the docket We estimate the annual recordkeeping
for this rule at the Internet address Section 1501 of the Energy Policy Act
and reporting burden for this rule at 3.2 of 2005 (EPAct) amended section 211 of
listed under ADDRESSES, as well as on hours per response. We estimate a total
the Office of Transportation and Air the Clean Air Act (CAA) by adding
of 1,060,026 respondents; 4,781,126 section 211(o) which required the
Quality Web site (http://www.epa.gov/ responses; 1,485,008 burden hours, and
otaq/renewablefuels/index.htm). In Environmental Protection Agency (EPA)
a total cost associated with responding to promulgate regulations implementing
addition, comments and responses for of $112,872,105. Burden is defined at 5
key issues are included throughout this a renewable fuel program. EPAct
CFR 1320.3(b). specified that the regulations must
preamble.
An agency may not conduct or ensure a specific volume of renewable
XI. Statutory and Executive Order sponsor, and a person is not required to fuel to be used in gasoline sold in the
Reviews respond to, a collection of information U.S. each year, with the total volume
unless it displays a currently valid OMB increasing over time. The goal of the
A. Executive Order 12866: Regulatory
control number. The OMB control program was to reduce dependence on
Planning and Review
numbers for EPAs regulations in 40 foreign sources of petroleum, increase
Under section 3(f)(1) of Executive CFR are listed in 40 CFR Part 9. In domestic sources of energy, and help
Order (EO) 12866 (58 FR 51735, October addition, EPA is amending the table in transition to alternatives to petroleum in
4, 1993), this action is an economically 40 CFR part 9 of currently approved the transportation sector.
OMB control numbers for various The final Renewable Fuels Standard
of triazine herbicides and their degradation regulations to list the regulatory (RFS1) program rule was published on
products in surface water, ground water, and
precipitation in the Midwestern United States
citations for the information May 1, 2007, and the program began on
during the 1990s: U.S. Geological Survey Scientific requirements contained in this final September 1, 2007. Per EPAct, the RFS1
Investigations Report 20055094, 27 p. rule. program created a specific annual level
for minimum renewable fuel use that definition.389 It should be noted that or the Panel), which considered many
increases over timeresulting in a because of the dynamics in the refining regulatory options and flexibilities that
requirement that 7.5 billion gallons of industry (i.e., mergers and acquisitions), would help mitigate potential adverse
renewable fuel be blended into gasoline the actual number of refiners that effects on small businesses as a result of
(for highway use only) by 2012. Under ultimately qualify for small refiner the increased volumes of renewable fuel
the RFS1 program, compliance is based status under the RFS2 rule could be required by RFS2. During the SBREFA
on meeting the required annual different than this estimate. Panel process, the Panel sought out and
renewable fuel volume percent standard received comments on the regulatory
4. Reporting, Recordkeeping, and
(published annually in the Federal options and flexibilities that were
Compliance
Register by EPA) through the use of presented to Small Entity
Renewable Identification Numbers, or Registration, reporting, and Representatives (SERs) and Panel
RINs, 38-digit serial numbers assigned recordkeeping are necessary to track members. The major flexibilities and
to each batch of renewable fuel compliance with the RFS standards and hardship relief provisions that were
produced. For obligated parties (those transactions involving RINs. As recommended by the Panel were
who must meet the annual volume discussed above in Sections II.J and proposed and some are being finalized
percent standard), RINs must be III.A, the compliance requirements today (for more information regarding
acquired to show compliance. under the RFS2 rule are in many ways the Panel process, see the SBREFA Final
The Energy Independence and similar to those required under the Panel Report, which is available in the
Security Act of 2007 (EISA) amended RFS1 rule, with some modifications public docket for this rule).
section 211(o), and the RFS program, by (e.g., those to account for the new
requiring higher volumes of renewable requirements of EISA). New provisions b. Outreach With Small Entities (and the
fuels, to result in 36 billion gallons of being finalized in todays action include Panel Process)
renewable fuel by 2022. EISA also the new EPA Moderated Transaction As required by section 609(b) of the
expanded the purview of the RFS1 System (EMTS) which allows for real- RFA as amended by SBREFA, EPA
program by requiring that these time reporting of RIN generation conducted outreach to small entities
renewable fuels be blended into transactions, and the ability for small and convened a SBAR Panel prior to
gasoline and diesel fuel (both highway blenders to delegate their RIN- proposing the RFS2 rule to obtain
and nonroad). This expanded the pool separation responsibilities to the party advice and recommendations of
of regulated entities, so the obligated directly upstream. Please see Sections II representatives of the small entities that
parties under the RFS program will now and III of this preamble for more potentially would be subject to the
include certain refiners, importers, and detailed information on these and other rules requirements.
blenders of these fuels that were not registration, recordkeeping, reporting, As part of the SBAR Panel process, we
previously covered by the RFS1 and compliance requirements of this conducted outreach with
program. In addition to the total final rule. representatives from the various small
renewable fuel standard required by entities that would be affected by the
5. Related Federal Rules rule. We met with these SERs to discuss
EPAct, EISA added standards for three
additional types of renewable fuels to We are aware of a few other current the potential rulemaking approaches
the program (advanced biofuel, or proposed Federal rules that are and potential options to decrease the
cellulosic biofuel, and biomass-based related to this rule. The primary related impact of the rulemaking on their
diesel) and requires compliance with all Federal rules are: the first Renewable industries. The Panel received written
four standards. Fuel Standard (RFS1) rule (72 FR 23900, comments from the SERs, specifically
As required by section 609(b) of the May 1, 2007), the RFS1 Technical on regulatory alternatives that could
RFA, as amended by SBREFA, EPA also Amendment Direct Final Rulemaking help to minimize the rules impact on
conducted outreach to small entities (73 FR 57248, October 2, 2008),390 and small businesses. In general, SERs stated
and convened a Small Business Control of Emissions from New Marine that they believed that small refiners
Advocacy Review Panel to obtain advice Compression-Ignition Engines at or would face challenges in meeting the
and recommendations of representatives Above 30 Liters per Cylinder (proposed new standards. More specifically, they
of the small entities that potentially rule: 74 FR 44442, August 28, 2009; voiced concerns with respect to the RIN
would be subject to the rules final rule: Signed December 22, 2009). program itself, uncertainty (with the
requirements. 6. Steps Taken To Minimize the required renewable fuel volumes, RIN
Significant Economic Impact on Small availability, and cost), and the desire for
3. Summary of Potentially Affected
Entities a RIN system review.
Small Entities The Panel agreed that EPA should
The small entities that will potentially a. Significant Panel Findings consider the issues raised by the SERs
be subject to the RFS program include: We convened a Small Business (and discussions had by the Panel itself)
domestic refiners that produce gasoline Advocacy Review Panel (SBAR Panel, and that EPA should consider
and/or diesel and importers of gasoline comments on flexibility alternatives that
and/or diesel into the United States. 389 EPAct defined a small refinery as a refinery
would help to mitigate any negative
Based on 2007 data, EPA believes that with a crude throughput of no more than 75,000 impacts on small businesses.
barrels of crude per day (at CAA section
there are about 95 refiners of gasoline 211(o)(1)(K)). This definition is based on facility Alternatives discussed throughout the
and diesel fuel. Of these, EPA believes size and is different than SBAs small refiner Panel process included those offered in
that there are currently 17 refiners, definition (which is based on company size). A previous or current EPA rulemakings, as
owning 20 refineries, producing small refinery could be owned by a larger refiner

that exceeds SBAs small entity standards. SBAs
well as alternatives suggested by SERs
gasoline and/or diesel fuel that meet the size standards were established to set apart those and Panel members, and the Panel
SBA small entity definition of having businesses which are most likely to be at an recommended that all be considered in
1,500 employees or less. Further, we inherent economic disadvantage relative to larger the development of the rule.
businesses.
believe that three of these refiners own 390 This Direct Final Rule corrects minor
A summary of the Panels
refineries that do not meet the typographical errors and provides clarification on recommendations, what the Agency
Congressional small refinery existing provisions in the RFS1 regulations. proposed, and what is being finalized
today is discussed below. A detailed exemption. These avenues were a for at least some of the four standards.
discussion of the regulatory alternatives possible extension of the temporary Further, we noted our belief that since
and hardship provisions discussed and exemption for an additional two years the concept of a rollover cap was not
recommended by the Panel can be following a study of small refineries by mandated by section 211(o), EPA
found in the SBREFA Final Panel the Department of Energy (DOE) and believes that there may be an
Report, and a discussion of the provisions for case-by-case economic opportunity to provide appropriate
provisions being finalized today is hardship relief. flexibility in this area to small refiners
located in Section III.E of this preamble. We proposed and took comment on under the RFS2 program but only if it
the recommendations of the Panel and is determined in the DOE small refinery
c. Panel Recommendations, Proposed SERs above. As discussed in section study that there is a disproportionate
Provisions, and Provisions Being III.E of this preamble, based on our effect warranting relief. The Panel
Finalized analysis and further review of the recommended that EPA request
The purpose of the Panel process is to provisions and the DOE Small Refinery comment on increasing the RIN rollover
solicit information as well as suggested Study, we have decided to finalize cap percentage for small refiners, and
flexibility options from the SERs, and continuing the small refinery and small further that EPA should request
the Panel recommended that EPA refiner exemption finalized in RFS1 comment on an appropriate level of that
continue to do so during the through December 31, 2010 for all small percentage. The Panel also
development of the RFS2 rule. refiners. recommended that EPA invite comment
Recognizing the concerns about EPAs on allowing RINs to be used
authority to provide extensions to a ii. Phase-in
interchangeably for small refiners, but
subset of small refineries (i.e., those that Small refiner SERs suggested that a not propose this concept because under
are owned by small refiners) different phase-in of the obligations applicable to this approach small refiners would
from that provided to small refineries in small refiners would be beneficial for arguably be subject to a different
section 211(o)(9), the Panel compliance, such that small refiners applicable percentage than other
recommended that EPA continue to would comply by gradually meeting the obligated parties.
evaluate this issue, and that EPA request standards on an incremental basis over We proposed a change to the RIN
comment on its authority and the a period of time, after which point they rollover cap, and took comment on the
appropriateness of providing extensions would comply fully with the RFS2 concept of allowing RINs to be used
beyond those authorized by section standards, EPA has serious concerns interchangeably for small refiners only.
211(o)(9) for small refineries operated about its authority to allow for such a As noted above in section III of this
by a small refiner. The Panel also phase-in of the standards. CAA section preamble, we are not finalizing RIN-
recommended that EPA propose to 211(o)(3)(B) states that the renewable related provisions in todays action. As
provide the same extension provision of fuel obligation shall consist of a single highlighted in the NPRM, we continue
211(o)(9) to small refiners who do not applicable percentage that applies to all to believe that the concept of
own small refineries as is provided for categories of persons specified as interchangeable RINs for small refiners
small refiners who do own small obligated parties. This kind of phase-in only fails to require the four different
refineries. approach would result in different standards mandated by Congress (e.g.,
applicable percentages being applied to conventional biofuel could not be used
i. Delay in Standards
different obligated parties. Further, as instead of cellulosic biofuel or biomass-
The RFS1 program regulations discussed above, such a phase-in based diesel). Further, given the
provide small refiners who operate approach would provide more relief to findings from the DOE study, if small
small refineries as well as small refiners small refineries operated by small refineries and small refiners do not face
who do not operate small refineries with refiners than that provided under the disproportionate economic hardship,
a temporary exemption from the small refinery provision. Thus the Panel then we do not believe that we have the
standard through December 31, 2010. recommended that EPA should invite basis for granting such additional relief
Small refiner SERs suggested that an comment on a phase-in, but not propose beyond what Congress already
additional temporary exemption for the such a provision. provided. Thus, small refiners will be
RFS2 program would be beneficial to We took comment on this provision, held to the same RIN rollover cap as
them in meeting the RFS2 standards. however we are not finalizing this other obligated parties.
EPA evaluated a temporary exemption provision, as we continue to believe that
for at least some of the four required iv. Program Review
a phase-in of the applicable standards
RFS2 standards for small refiners. The would in fact result in different With regard to the suggested program
Panel recommended that EPA propose a standards for small refiners. review, EPA raised the concern that this
delay in the effective date of the could lead to some redundancy since
standards until 2014 for small entities, iii. RIN-Related Flexibilities EPA is required to publish a notice of
to the maximum extent allowed by the The small refiner SERs requested that the applicable RFS standards in the
statute. However, the Panel recognized the proposed rule contain provisions for Federal Register annually, and that this
that EPA has serious concerns about its small refiners related to the RIN system, annual process will inevitably include
authority to provide an extension of the such as flexibilities in the RIN rollover an evaluation of the projected
temporary exemption for small cap percentage and allowing all small availability of renewable fuels.
refineries that is different from that refiners to use RINs interchangeably. In Nevertheless, the SBA and OMB Panel
provided in CAA section 211(o)(9), the RFS1 program, EPA allows for 20% members stated that they believe that a
since Congress specifically addressed an of a previous years RINs to be rolled program review could be helpful to
extension for small refineries in that over and used for compliance in the small entities in providing them some
provision. following year. We noted during the insight to the RFS programs progress
The Panel did recommend that EPA Panel process that a provision to allow and alleviate some uncertainty
propose other avenues through which for flexibilities in the rollover cap could regarding the RIN system. As EPA will
small refineries and small refiners could include a higher RIN rollover cap for be publishing a Federal Register notice
receive extensions of the temporary small refiners for some period of time or annually, the Panel recommended that
EPA include an update of RIN system EPACT 2005 Section 1501 Small of the small refinery temporary
progress (e.g., RIN trading, RIN Refineries Exemption Study, DOEs exemption on the basis of
availability, etc.) in this notice and that finding was that there is no reason to disproportionate economic hardship.
the results of this evaluation be believe that any small refinery would be Refiners may petition EPA for this case-
considered in any request for case-by- disproportionately harmed by inclusion by-case hardship relief at any time.
case hardship relief. in the proposed RFS2 program. This The Panel recommended that EPA
We did propose that in the annual finding was based on the fact that there propose in the RFS2 program a case-by-
notice of the RFS standards that EPA appeared to be no shortage of RINs case hardship provision for small
must publish in the Federal Register, available under RFS1, and EISA has refineries similar to that provided at 40
we would also include information to provided flexibility through waiver CFR 80.1141(e)(1). The Panel also
help inform industry about the RIN authority (per section 211(o)(7)). recommended that EPA propose a case-
system. We also proposed that Further, in the case of the cellulosic by-case hardship provision for small
information from the annual Production biofuel standard, cellulosic biofuel refiners that do not operate small
Outlook Reports that producers and allowances can be provided from EPA at refineries that is comparable to that
importers must submit to EPA, as well prices established in EISA (see provided for small refineries under
as information required in EMTS regulation section 80.1455). DOE thus section 211(o)(9)(B), using its discretion
reports, could be used in the annual determined that no small refinery would under CAA section 211(o)(3)(B). This
Federal Register notice to update RIN be subject to disproportionate economic would apply if EPA does not adopt an
system progress. However, during the hardship under the proposed RFS2 automatic extension for small refiners,
development of the final rule, it became program, and that the small refinery and would allow those small refiners
evident that there could be instances exemption should not be extended that do not operate small refineries to
where we would want to report out RIN beyond December 31, 2010. DOE noted apply for the same kind of extension as
system information on a more frequent in the study that, if circumstances were a small refinery. The Panel
basis than just once a year. Thus we are to change and/or the RIN market were recommended that EPA take into
finalizing that we will report out to become non-competitive or illiquid, consideration the results of the annual
elements of RIN system progress; but individual small refineries have the update of RIN system progress and the
such information will be reported via ability to petition EPA for an extension DOE small refinery study in assessing
other means (e.g., the RFS Web site of their small refinery exemption (as such hardship applications.
(www.epa.gov/otaq/renewablefuels/ stated in regulation section 80.1441). We believe that these avenues of relief
index.htm), EMTS homepage, etc.). As discussed in section III.E of this can and should be fully explored by
Additionally, we will also publish preamble, since the only small refinery small refiners who are covered by the
annual summaries of the Production study available for us to use as a basis small refinery provision. In addition, we
Outlook Reports. for whether or not to grant small believe that it is appropriate to allow
refineries an automatic two-year petitions to EPA for an extension of the
v. Extensions of the Temporary temporary exemption based on
extension of the exemption is the study
Exemption Based on a Study of Small disproportionate economic hardship for
that was performed in 2008, we had to
Refinery Impacts use this study to develop this final rule. those small refiners who are not covered
The Panel recommended that EPA EPAct directs EPA to consider the DOE by the small refinery provision (again,
propose in the RFS2 program the small refinery study in assessing the per our discretion under section
provision at 40 CFR 80.1141(e) impacts to small refineries, and we 211(o)(3)(B)); this would ensure that all
extending the RFS1 temporary interpret this to mean that any extension small refiners have the same relief
exemption for at least two years for any past December 31, 2010 has to be tied available to them as small refineries do.
small refinery that DOE determines to the DOE Study. Further, since that Thus, we are finalizing a hardship
would be subject to disproportionate study found that there was no provision for small refineries in the
economic hardship if required to disproportionate economic impact on RFS2 program, that any small refinery
comply with the RFS2 requirements. small refineries, we cannot grant an may apply for a case-by-case hardship at
Section 211(o)(9)(A)(ii) required that automatic additional extension for small any time on the basis of
by December 31, 2008, DOE was to refineries or small refiners (except on a disproportionate economic hardship per
perform a study of the economic case-by-case hardship basis). However, CAA section 211(o)(9)(B). We are also
impacts of the RFS requirements on this does not preclude small refiners finalizing a case-by-case hardship
small refineries to assess and determine from applying for case-by-case provision for those small refiners that
whether the RFS requirements would extensions of the small refiner do not operate small refineries (section
impose a disproportionate economic temporary exemption. 80.1442(h)) using our discretion under
hardship on small refineries, and submit Note that if the revised DOE study CAA section 211(o)(3)(B). This
this study to EPA. Section 211(o)(9) also (see Section III.E.3 of this preamble) provision will allow those small refiners
provided that small refineries found to finds that there is a disproportionate that do not operate small refineries to
be in a disproportionate economic economic impact, we will revisit the apply for the same kind of extension as
hardship situation would receive an extension of the temporary exemption at a small refinery. In evaluating
extension of the temporary exemption that point. applications for this hardship provision
for at least two years. EPA will take into consideration
The Panel also recommended that vi. Extensions of the Temporary
information gathered from annual
EPA work with DOE in the development Exemption Based on Disproportionate
reports and RIN system progress
of the small refinery study, specifically Economic Hardship

updates, as recommended by the SBAR
to communicate the comments that While SERs did not specifically Panel.
SERs raised during the Panel process. comment on the concept of hardship
We did not propose and are not provisions for the upcoming proposal, 7. Conclusions
finalizing this hardship provision given the Panel noted that under CAA section Pursuant to section 603 of the RFA,
the outcome of the DOE small refinery 211(o)(9)(B) small refineries may EPA prepared an initial regulatory
study. In the small refinery study, petition EPA for case-by-case extensions flexibility analysis (IRFA) for the
proposed rule and convened a Small generally must prepare a written Order 13175 (65 FR 67249, November 9,
Business Advocacy Review Panel to statement, including a cost-benefit 2000). This rule will be implemented at
obtain advice and recommendations of analysis, for proposed and final rules the Federal level and impose
representatives of the regulated small with Federal mandates that may result compliance costs only on transportation
entities (see 74 FR 24904, May 26, in expenditures to State, local, and fuel refiners, blenders, marketers,
2009). A detailed discussion of the tribal governments, in the aggregate, or distributors, importers, and exporters.
Panels advice and recommendations is to the private sector, of $100 million or Tribal governments would be affected
found in the Panel Report, located in the more in any one year. only to the extent they purchase and use
rulemaking docket. A summary of the This rule is not subject to the regulated fuels. Thus, Executive Order
Panels recommendations is presented requirements of section 203 of UMRA 13175 does not apply to this action. EPA
at 74 FR 25106 (May 26, 2009). because it contains no regulatory specifically solicited comment on the
As required by section 604 of the requirements that might significantly or proposed rule from tribal officials.
RFA, we also prepared a final regulatory uniquely affect small governments. EPA
flexibility analysis (FRFA) for todays has determined that this rule contains a G. Executive Order 13045: Protection of
final rule. The FRFA addresses the Federal mandate that may result in Children From Environmental Health
issues raised by public comments on the expenditures of $100 million or more Risks and Safety Risks
IRFA, which was part of the proposal of for the private sector in any one year, EPA interprets EO 13045 (62 FR
this rule. The FRFA is available for but the rule imposes no enforceable 19885, April 23, 1997) as applying only
review in the docket and is summarized duty on any State, local or tribal to those regulatory actions that concern
above. governments. Nonetheless, EPA believes health or safety risks, such that the
Many aspects of the RFS2 rule, such that todays action represents the least analysis required under section 5501 of
as the required amounts of annual costly, most cost-effective approach to the EO has the potential to influence the
renewable fuel volumes, are specified in achieve the statutory requirements of regulation. This action is not subject to
EPAct and EISA. As discussed above, the rule. The costs and benefits EO 13045 because it does not establish
small refiners and small refineries associated with the increased use of an environmental standard intended to
receive an exemption from the RFS renewable fuels are discussed above and mitigate health or safety risks and
standards until January 1, 2011 and are in the Regulatory Impact Analysis, as because it implements specific
not required to make expensive capital required by the UMRA. standards established by Congress in
improvements like those required under
E. Executive Order 13132: Federalism statutes.
other EPA fuels programs. Further, the
DOE small refinery study did not find Executive Order 13132, entitled H. Executive Order 13211: Actions
that there was a disproportionate Federalism (64 FR 43255, August 10, Concerning Regulations That
economic impact on small refineries as 1999), requires EPA to develop an Significantly Affect Energy Supply,
a whole as a result of this rule (and the accountable process to ensure Distribution, or Use
majority of the refiners that meet the meaningful and timely input by State
definition of a small refiner, also own and local officials in the development of This rule is not subject to Executive
refineries that meet the Congressional regulatory policies that have federalism Order 13211 (66 FR 28355 (May 22,
small refinery definition). implications. Policies that have 2001)), because it is not likely to have
A cost-to-sales ratio test, a ratio of the federalism implications is defined in a significant adverse effect on the
estimated annualized compliance costs the Executive Order to include supply, distribution, or use of energy. In
to the value of sales per company, was regulations that have substantial direct fact, this rule has a positive effect on
performed for gasoline and/or diesel effects on the States, on the relationship energy supply and use. By promoting
small refiners. From this cost-to-sales between the national government and the diversification of transportation
test, it was estimated that all small the States, or on the distribution of fuels, the increased use of renewable
entities have compliance costs that are power and responsibilities among the fuels enhances energy supply.
less than one percent of their sales (a various levels of government. Therefore, we have concluded that this
complete discussion of the costs to This final rule does not have rule is not likely to have any adverse
refiners as a result of the increased federalism implications. It will not have energy effects. Our energy effects
volumes of renewable fuel required by substantial direct effects on the States, analysis is discussed in Section VIII.B.
EISA is located in Section VII of this on the relationship between the national I. National Technology Transfer
preamble). government and the States, or on the Advancement Act
As required by section 212 of distribution of power and
SBREFA, EPA also is preparing a Small responsibilities among the various Section 12(d) of the National
Entity Compliance Guide to help small levels of government, as specified in Technology Transfer and Advancement
entities comply with this rule. This Executive Order 13132. Thus, Executive Act of 1995 (NTTAA), Public Law
guide will be available on the RFS Web Order 13132 does not apply to this rule. 104113, 12(d) (15 U.S.C. 272 note)
site (www.epa.gov/otaq/renewablefuels/ In the spirit of Executive Order 13132, directs EPA to use voluntary consensus
index.htm), and will be available 60 and consistent with EPA policy to standards in its regulatory activities
days after the rule is finalized. promote communications between EPA unless to do so would be inconsistent
and State and local governments, EPA with applicable law or otherwise
D. Unfunded Mandates Reform Act impractical. Voluntary consensus
specifically solicited comment on the
Title II of the Unfunded Mandates proposed rule from State and local standards are technical standards (e.g.,
Reform Act of 1995 (UMRA), 2 U.S.C. officials. materials specifications, test methods,
15311538, requires Federal agencies, sampling procedures, and business
unless otherwise prohibited by law, to F. Executive Order 13175: Consultation practices) that are developed or adopted
assess the effects of their regulatory and Coordination With Indian Tribal by voluntary consensus standards
actions on State, local, and tribal Governments bodies. NTTAA directs EPA to provide
governments and the private sector. This action does not have tribal Congress, through OMB, explanations
Under section 202 of the UMRA, EPA implications, as specified in Executive when the Agency decides not to use
available and applicable voluntary environmental justice considerations, 2. A new Subpart M is added to part
consensus standards. EPA nevertheless determined that this 80 to read as follows:
This rulemaking changes the rule does not have a disproportionately Subpart MRenewable Fuel Standard
Renewable Fuel Standard (RFS) high and adverse human health or
program at Title 40 of the Code of Sec.
environmental impact on minority or 80.1400 Applicability.
Federal Regulations, Subpart K which low-income populations. 80.1401 Definitions.
already contains voluntary consensus 80.1402 [Reserved]
standard ASTM D675106a Standard K. Congressional Review Act
80.1403 Which fuels are not subject to the
Specification for Biodiesel Fuel Blend The Congressional Review Act, 5 20% GHG thresholds?
Stock (B100) for Middle Distillate U.S.C. 801 et seq., as added by the Small 80.1404 [Reserved]
Fuels. This rulemaking incorporates Business Regulatory Enforcement 80.1405 What are the Renewable Fuel
the most recent version of that standard Fairness Act of 1996, generally provides Standards?
(ASTM D675108) and adds several 80.1406 Who is an obligated party under
that before a rule may take effect, the the RFS program?
more voluntary consensus standards: agency promulgating the rule must 80.1407 How are the Renewable Volume
ASTM D125008, Standard Guide for submit a rule report, which includes a Obligations calculated?
Use of the Petroleum Measurement copy of the rule, to each House of the 80.140880.1414 [Reserved]
Tables; ASTM D4442, Standard Test Congress and to the Comptroller General 80.1415 How are equivalence values
Methods for Direct Moisture Content of the United States. EPA will submit a assigned to renewable fuel?
Measurement of Wood and Wood-Base report containing this rule and other 80.1416 Petition process for evaluation of
Materials; ASTM D4444, Standard required information to the U.S. Senate, new renewable fuels and pathways.
Test Method for Laboratory 80.141780.1424 [Reserved]
the U.S. House of Representatives, and 80.1425 Renewable Identification Numbers
Standardization and Calibration of the Comptroller General of the United (RINs).
Hand-Held Moisture Meters; ASTM States prior to publication of the rule in 80.1426 How are RINs generated and
D686608 Standard Test Methods for the Federal Register. A Major rule assigned to batches of renewable fuel by
Determining the Biobased Content of cannot take effect until 60 days after it renewable fuel producers or importers?
Solid, Liquid, and Gaseous Samples is published in the Federal Register. 80.1427 How are RINs used to demonstrate
Using Radiocarbon Analysis; ASTM This action is a major rule as defined compliance?
E711, Standard Test Method for Gross 80.1428 General requirements for RIN
by 5 U.S.C. 804(2). This rule will be distribution.
Calorific Value of Refuse-Derived Fuel effective July 1, 2010. 80.1429 Requirements for separating RINs
by the Bomb Calorimeter; and ASTM from volumes of renewable fuel.
E870, Standard Test Methods for XII. Statutory Provisions and Legal
80.1430 Requirements for exporters of
Analysis of Wood Fuels. Information Authority renewable fuels.
about these standards may be obtained Statutory authority for the rule 80.1431 Treatment of invalid RINs.
through the ASTM Web site (http:// finalized today can be found in section 80.1432 Reported spillage or disposal of
www.astm.org) or by calling ASTM at 211 of the Clean Air Act, 42 U.S.C. renewable fuel.
(610) 8329585. 80.143380.1439 [Reserved]
7545. Additional support for the 80.1440 What are the provisions for
This rulemaking does not change procedural and compliance related
these voluntary consensus standards, blenders who handle and blend less than
aspects of todays rule, including the 125,000 gallons of renewable fuel per
and does not involve any other recordkeeping requirements, come from year?
technical standards. Therefore, EPA is Sections 114, 208, and 301(a) of the 80.1441 Small refinery exemption.
not considering the use of any voluntary Clean Air Act, 42 U.S.C. 7414, 7542, and 80.1442 What are the provisions for small
consensus standards other than those 7601(a). refiners under the RFS program?
described above. 80.1443 What are the opt-in provisions for
List of Subjects in 40 CFR Part 80 noncontiguous states and territories?
J. Executive Order 12898: Federal 80.144480.1448 [Reserved]
Actions To Address Environmental Environmental protection, 80.1449 What are the Production Outlook
Justice in Minority Populations and Administrative practice and procedure, Report requirements?
Low-Income Populations Agriculture, Air pollution control, 80.1450 What are the registration
Confidential business information, requirements under the RFS program?
Executive Order (EO) 12898 (59 FR 80.1451 What are the reporting
Diesel Fuel, Energy, Forest and Forest
7629 (Feb. 16, 1994)) establishes federal requirements under the RFS program?
Products, Fuel additives, Gasoline,
executive policy on environmental 80.1452 What are the requirements related
Imports, Incorporation by reference,
justice. Its main provision directs to the EPA Moderated Transaction
Labeling, Motor vehicle pollution, System (EMTS)?
federal agencies, to the greatest extent
Penalties, Petroleum, Reporting and 80.1453 What are the product transfer
practicable and permitted by law, to
recordkeeping requirements. document (PTD) requirements for the
make environmental justice part of their
Dated: February 3, 2010. RFS program?
mission by identifying and addressing,
80.1454 What are the recordkeeping
as appropriate, disproportionately high Lisa P. Jackson,
requirements under the RFS program?
and adverse human health or Administrator. 80.1455 What are the small volume
environmental effects of their programs, For the reasons set forth in the provisions for renewable fuel production
policies, and activities on minority preamble, 40 CFR part 80 is amended as facilities and importers?
populations and low-income follows: 80.1456 What are the provisions for
populations in the United States. cellulosic biofuel waiver credits?
EPA lacks the discretionary authority 80.145780.1459 [Reserved]

PART 80REGULATION OF FUELS
to address environmental justice in this 80.1460 What acts are prohibited under the
AND FUEL ADDITIVES RFS program?
rulemaking since the Agency is 80.1461 Who is liable for violations under
implementing specific standards 1. The authority citation for part 80
the RFS program?
established by Congress in statutes. continues to read as follows: 80.1462 [Reserved]
Although EPA lacks authority to modify Authority: 42 U.S.C. 7414, 7542, 7545, and 80.1463 What penalties apply under the
todays regulatory action on the basis of 7601(a). RFS program?
80.1464 What are the attest engagement Baseline lifecycle greenhouse gas Crop residue is the biomass left over
requirements under the RFS program? emissions means the average lifecycle from the harvesting or processing of
80.1465 What are the additional greenhouse gas emissions for gasoline or planted crops from existing agricultural
requirements under this subpart for diesel (whichever is being replaced by land and any biomass removed from
foreign small refiners, foreign small
refineries, and importers of RFS
the renewable fuel) sold or distributed existing agricultural land that facilitates
FRFUEL? as transportation fuel in 2005. crop management (including biomass
80.1466 What are the additional Biodiesel means a mono-alkyl ester removed from such lands in relation to
requirements under this subpart for RIN- that meets ASTM D 6751 (incorporated invasive species control or fire
generating foreign producers and by reference, see 80.1468). management), whether or not the
importers of renewable fuels for which Biogas means a mixture of biomass includes any portion of a crop
RINs have been generated by the foreign hydrocarbons that is a gas at 60 degrees or crop plant.
producer? Fahrenheit and 1 atmosphere of Cropland is land used for production
80.1467 What are the additional of crops for harvest and includes
pressure that is produced through the
requirements under this subpart for a
conversion of organic matter. Biogas cultivated cropland, such as for row
foreign RIN owner?
80.1468 Incorporation by reference. that is used to generate RINs must be crops or close-grown crops, and non-
renewable fuel. Biogas includes cultivated cropland, such as for
Subpart MRenewable Fuel Standard propane, and landfill gas, manure horticultural or aquatic crops.
digester gas, and sewage waste Diesel, for the purposes of this
80.1400 Applicability. treatment gas. subpart, refers to any and all of the
The provisions of this Subpart M shall Biomass-based diesel means a products specified at 80.1407(e).
apply for all renewable fuel produced renewable fuel that has lifecycle Ecologically sensitive forestland
on or after July 1, 2010, for all RINs greenhouse gas emissions that are at means forestland that meets either of the
generated on or after July 1, 2010, and least 50 percent less than baseline following criteria:
for all renewable volume obligations lifecycle greenhouse gas emissions and (1) An ecological community with a
and compliance periods starting with meets all of the requirements of global or state ranking of critically
January 1, 2010. Except as provided paragraph (1) of this definition: imperiled, imperiled or rare pursuant to
otherwise in this Subpart M, the (1)(i) Is a transportation fuel, a State Natural Heritage Program. For
provisions of Subpart K of this Part 80 transportation fuel additive, heating oil, examples of such ecological
shall not apply for such renewable fuel, or jet fuel. communities, see Listing of Forest
RINs, renewable volume obligations, or (ii) Meets the definition of either Ecological Communities Pursuant to 40
compliance periods. biodiesel or non-ester renewable diesel. CFR 80.1401; S1S3 communities,
(iii) Is registered as a motor vehicle which is number EPAHQOAR2005
80.1401 Definitions.
fuel or fuel additive under 40 CFR part 01611034.1 in the public docket, and
The definitions of 80.2 and of this 79, if the fuel or fuel additive is Listing of Forest Ecological
section apply for the purposes of this intended for use in a motor vehicle. Communities Pursuant to 40 CFR
Subpart M. The definitions of this 80.1401; G1G2 communities, which is
(2) Renewable fuel that is co-
section do not apply to other subparts number EPAHQOAR20050161
processed with petroleum is not
unless otherwise noted. Note that many 2906.1 in the public docket. This
biomass-based diesel.
terms defined here are common terms material is available for inspection at
Cellulosic biofuel means renewable
that have specific meanings under this the EPA Docket Center, EPA/DC, EPA
fuel derived from any cellulose, hemi-
subpart M. The definitions follow: West, Room 3334, 1301 Constitution
cellulose, or lignin that has lifecycle
Advanced biofuel means renewable Ave., NW., Washington DC. The
greenhouse gas emissions that are at
fuel, other than ethanol derived from telephone number for the Air Docket is
least 60 percent less than the baseline
cornstarch, has lifecycle greenhouse gas (202) 5661742.
lifecycle greenhouse gas emissions. (2) Old growth or late successional,
emissions that are at least 50 percent Cellulosic diesel is any renewable fuel
less than baseline lifecycle greenhouse characterized by trees at least 200 years
which meets both the definitions of in age.
gas emissions. cellulosic biofuel and biomass-based EPA Moderated Transaction System,
Annual cover crop means an annual diesel, as defined in this section or EMTS, means a closed, EPA
crop, planted as a rotation between 80.1401. Cellulosic diesel includes moderated system that provides a
primary planted crops, or between trees heating oil and jet fuel made from mechanism for screening and tracking
and vines in orchards and vineyards, cellulosic feedstocks. Renewable Identification Numbers
typically to protect soil from erosion Combined heat and power (CHP), also (RINs) as per 80.1452.
and to improve the soil between periods known as cogeneration, refers to Existing agricultural land is cropland,
of regular crops. industrial processes in which byproduct pastureland, and land enrolled in the
Areas at risk of wildfire are those heat that would otherwise be released Conservation Reserve Program
areas in the wildland-urban interface, into the environment is used for process (administered by the U.S. Department of
where humans and their development heating and/or electricity production. Agricultures Farm Service Agency) that
meet or intermix with wildland fuel. Co-processed means that renewable was cleared or cultivated prior to
Note that, for guidance, the SILVIS biomass was simultaneously processed December 19, 2007, and that, on
laboratory at the University of with fossil fuels or other non-renewable December 19, 2007, was:
Wisconsin maintains a Web site that feedstock in the same unit or units to (1) Nonforested; and
provides a detailed map of areas produce a fuel that is partially derived (2) Actively managed as agricultural
meeting this criteria at: http://www. from renewable biomass. land or fallow, as evidenced by records
silvis.forest.wisc.edu/projects/US_WUI_ Corn oil extraction means the which must be traceable to the land in
2000.asp. The SILVIS laboratory is recovery of corn oil from the thin question, which must include one of the
located at 1630 Linden Drive, Madison, stillage and/or the DGS produced by a following:
Wisconsin 53706 and can be contacted dry mill corn ethanol plant, most often (i) Records of sales of planted crops,
at (608) 2634349. by mechanical separation. crop residue, or livestock, or records of
purchases for land treatments such as Gasoline, for the purposes of this Pre-commercial thinnings are trees,
fertilizer, weed control, or seeding. subpart, refers to any and all of the including unhealthy or diseased trees,
(ii) A written management plan for products specified at 80.1407(c). primarily removed to reduce stocking to
agricultural purposes. Heating oil has the meaning given in concentrate growth on more desirable,
(iii) Documented participation in an 80.2(ccc). healthy trees, or other vegetative
agricultural management program Importers. For the purposes of this material that is removed to promote tree
administered by a Federal, state, or local subpart, an importer of transportation growth.
government agency. fuel or renewable fuel is any U.S. Renewable biomass means each of the
(iv) Documented management in domestic person who: following (including any incidental, de
accordance with a certification program (1) Brings transportation fuel or minimis contaminants that are
for agricultural products. renewable fuel into the 48 contiguous impractical to remove and are related to
Exporter of renewable fuel means: states of the United States or Hawaii, customary feedstock production and
(1) A person that transfers any from a foreign country or from an area transport):
renewable fuel to a location outside the that has not opted in to the program (1) Planted crops and crop residue
contiguous 48 states and Hawaii; and requirements of this subpart pursuant to harvested from existing agricultural
(2) A person that transfers any 80.1443; or land cleared or cultivated prior to
renewable fuel from a location in the (2) Brings transportation fuel or December 19, 2007 and that was
contiguous 48 states or Hawaii to Alaska renewable fuel into an area that has nonforested and either actively managed
or a United States territory, unless that opted in to the program requirements of or fallow on December 19, 2007.
state or territory has received an this subpart pursuant to 80.1443 from (2) Planted trees and tree residue from
approval from the Administrator to opt- a foreign country or from an area that a tree plantation located on non-federal
in to the renewable fuel program has not opted in to the program land (including land belonging to an
pursuant to 80.1443. requirements of this subpart. Indian tribe or an Indian individual that
Facility means all of the activities and Motor vehicle has the meaning given is held in trust by the U.S. or subject to
equipment associated with the in Section 216(2) of the Clean Air Act a restriction against alienation imposed
production of renewable fuel starting (42 U.S.C. 7550(2)). by the U.S.) that was cleared at any time
from the point of delivery of feedstock Naphtha means a renewable fuel or prior to December 19, 2007 and actively
material to the point of final storage of fuel blending component falling within managed on December 19, 2007.
the end product, which are located on the boiling range of gasoline. (3) Animal waste material and animal
one property, and are under the control Neat renewable fuel is a renewable byproducts.
of the same person (or persons under fuel to which 1% or less of gasoline (as (4) Slash and pre-commercial
common control). defined in this section) or diesel fuel thinnings from non-federal forestland
Fallow means cropland, pastureland, has been added. (including forestland belonging to an
or land enrolled in the Conservation Non-ester renewable diesel means Indian tribe or an Indian individual,
Reserve Program (administered by the renewable fuel which is all of the that are held in trust by the United
U.S. Department of Agricultures Farm following: States or subject to a restriction against
Service Agency) that is intentionally left (1) Registered as a motor vehicle fuel alienation imposed by the United
idle to regenerate for future agricultural or fuel additive under 40 CFR Part 79, States) that is not ecologically sensitive
purposes with no seeding or planting, if the fuel or fuel additive is intended forestland.
harvesting, mowing, or treatment during for use in a motor vehicle. (5) Biomass (organic matter that is
the fallow period. (2) Not a mono-alkyl ester. available on a renewable or recurring
Forestland is generally undeveloped Nonforested land means land that is basis) obtained from the immediate
land covering a minimum area of 1 acre not forestland. vicinity of buildings and other areas
upon which the primary vegetative Nonroad vehicle has the meaning regularly occupied by people, or of
species are trees, including land that given in Section 216(11) of the Clean public infrastructure, in an area at risk
formerly had such tree cover and that Air Act (42 U.S.C. 7550(11)). of wildfire.
will be regenerated and tree plantations. Pastureland is land managed for the (6) Algae.
Tree covered areas in intensive production of indigenous or introduced (7) Separated yard waste or food
agricultural crop production settings, forage plants for livestock grazing or hay waste, including recycled cooking and
such as fruit orchards or tree-covered production, and to prevent succession trap grease, and materials described in
areas in urban settings such as city to other plant types. 80.1426(f)(5)(i).
parks, are not considered forestland. Planted crops are all annual or Renewable fuel means a fuel which
Fractionation of feedstocks means a perennial agricultural crops from meets all of the requirements of
process whereby seeds are divided in existing agricultural land that may be paragraph (1) of this definition:
various components and oils are used as feedstocks for renewable fuel, (1)(i) Fuel that is produced from
removed prior to fermentation for the such as grains, oilseeds, sugarcane, renewable biomass.
production of ethanol. switchgrass, prairie grass, duckweed, (ii) Fuel that is used to replace or
Fuel for use in an ocean-going vessel and other species (but not including reduce the quantity of fossil fuel present
means, for this subpart only: algae species or planted trees), in a transportation fuel, heating oil, or
(1) Any marine residual fuel (whether providing that they were intentionally jet fuel.
burned in ocean waters, Great Lakes, or applied by humans to the ground, a (iii) Has lifecycle greenhouse gas
other internal waters); growth medium, a pond or tank, either emissions that are at least 20 percent
(2) Emission Control Area (ECA) by direct application as seed or plant, or less than baseline lifecycle greenhouse
marine fuel, pursuant to 80.2(ttt) and through intentional natural seeding or gas emissions, unless the fuel is exempt
80.510(k) (whether burned in ocean vegetative propagation by mature plants from this requirement pursuant to
waters, Great Lakes, or other internal introduced or left undisturbed for that 80.1403.
waters); and purpose. (2) Ethanol covered by this definition
(3) Any other fuel intended for use Planted trees are trees harvested from shall be denatured as required and
only in ocean-going vessels. a tree plantation. defined in 27 CFR parts 19 through 21.
Any volume of denaturant added to the (7) Evidence of the existence and or a combination thereof, the actual
undenatured ethanol by a producer or ongoing maintenance of a road system peak capacity is based on any calendar
importer in excess of 2 volume percent or other physical infrastructure year after startup during the first three
shall not be included in the volume of designed and maintained for logging years of operation.
ethanol for purposes of determining use, together with one of the above- (4) Commence construction, as
compliance with the requirements mentioned documents. applied to facilities that produce
under this subpart. Tree residue is slash and any woody renewable fuel, means that:
Renewable Identification Number residue generated during the processing (i) The owner or operator has all
(RIN), is a unique number generated to of planted trees from tree plantations for necessary preconstruction approvals or
represent a volume of renewable fuel use in lumber, paper, furniture or other permits (as defined at 40 CFR
pursuant to 80.1425 and 80.1426. applications, provided that such woody 52.21(b)(10)), and has satisfied either of
(1) Gallon-RIN is a RIN that represents residue is not mixed with similar the following:
an individual gallon of renewable fuel; residue from trees that do not originate (A) Begun, or caused to begin, a
and in tree plantations. continuous program of actual
(2) Batch-RIN is a RIN that represents Yard waste is leaves, sticks, pine construction on-site (as defined in 40
multiple gallon-RINs. needles, grass and hedge clippings, and CFR 52.21(b)(11)).
Slash is the residue, including similar waste from residential, (B) Entered into binding agreements
treetops, branches, and bark, left on the commercial, or industrial areas (but not or contractual obligations, which cannot
ground after logging or accumulating as from forestlands or tree plantations). be cancelled or modified without
a result of a storm, fire, delimbing, or substantial loss to the owner or
80.1402 [Reserved] operator, to undertake a program of
other similar disturbance.
Small refinery, for this subpart only, actual construction of the facility.
80.1403 Which fuels are not subject to
(ii) For multi-phased projects, the
means a refinery for which the average the 20% GHG thresholds?
commencement of construction of one
aggregate daily crude oil throughput for (a) For purposes of this section, the phase does not constitute
calendar year 2006 (as determined by following definitions apply: commencement of construction of any
dividing the aggregate throughput for (1) Baseline volume means the later phase, unless each phase is
the calendar year by the number of days permitted capacity or, if permitted mutually dependent for physical and
in the calendar year) does not exceed capacity cannot be determined, the chemical reasons only.
75,000 barrels. actual peak capacity of a specific (b) The lifecycle greenhouse gas
Transportation fuel means fuel for use renewable fuel production facility on a emissions from renewable fuels must be
in motor vehicles, motor vehicle calendar year basis. at least 20 percent less than baseline
engines, nonroad vehicles, or nonroad (2) Permitted capacity means 105% of lifecycle greenhouse gas emissions, with
engines (except for ocean-going vessels). the maximum permissible volume the exception of the baseline volumes of
Tree plantation is a stand of no less output of renewable fuel that is allowed renewable fuel produced from facilities
than 1 acre composed primarily of trees under operating conditions specified in described in paragraphs (c) and (d) of
established by hand- or machine- the most restrictive of all applicable this section.
planting of a seed or sapling, or by preconstruction, construction and (c) The baseline volume of renewable
coppice growth from the stump or root operating permits issued by regulatory fuel that is produced from facilities and
of a tree that was hand- or machine- authorities (including local, regional, any expansions, all of which
planted. Tree plantations must have state or a foreign equivalent of a state, commenced construction on or before
been cleared prior to December 19, 2007 and federal permits, or permits issued December 19, 2007, shall not be subject
and must have been actively managed by foreign governmental agencies) that to the requirement that lifecycle
on December 19, 2007, as evidenced by govern the construction and/or greenhouse gas emissions be at least 20
records which must be traceable to the operation of the renewable fuel facility, percent less than baseline lifecycle
land in question, which must include: reported as: greenhouse gas emissions if the owner
(1) Sales records for planted trees or (i) Annual volume output on a or operator:
tree residue together with other written calendar year basis; or (1) Did not discontinue construction
documentation connecting the land in (ii) If the permit specifies maximum for a period of 18 months after
question to these purchases; rated volume output on an hourly basis, commencement of construction; and
(2) Purchasing records for seeds, then multiplying the hourly output by (2) Completed construction within 36
seedlings, or other nursery stock 8,322 hours per year to obtain the months of commencement of
together with other written annual output. construction.
documentation connecting the land in (3) Actual peak capacity means 105% (d) The baseline volume of ethanol
question to these purchases; of the maximum annual volume of that is produced from facilities and any
(3) A written management plan for renewable fuels produced from a expansions all of which commenced
silvicultural purposes; specific renewable fuel production construction after December 19, 2007
(4) Documentation of participation in facility on a calendar year basis. and on or before December 31, 2009,
a silvicultural program sponsored by a (i) For facilities that commenced shall not be subject to the requirement
Federal, state or local government construction prior to December 19, 2007 that lifecycle greenhouse gas emissions
agency; the actual peak capacity is based on the be at least 20 percent less than baseline
(5) Documentation of land last five calendar years prior to 2008, lifecycle greenhouse gas emissions if
management in accordance with an unless no such production exists, in such facilities are fired with natural gas,
agricultural or silvicultural product which case actual peak capacity is biomass, or a combination thereof at all
certification program; determined pursuant to paragraph times the facility operated between
(6) An agreement for land (a)(3)(ii) of this section. December 19, 2007 and December 31,
management consultation with a (ii) For facilities that commenced 2009 and if:
professional forester that identifies the construction after December 19, 2007, (1) The owner or operator did not
land in question; or and are fired with natural gas, biomass, discontinue construction for a period of
18 months after commencement of (f) If there are any changes in the mix (1) The value of the cellulosic biofuel
construction; of renewable fuels produced by those standard for 2010 shall be 0.004 percent.
(2) The owner or operator completed facilities described in paragraph (d) of (2) The value of the biomass-based
construction within 36 months of this section, only the ethanol volume (to diesel standard for 2010 shall be 1.10
commencement of construction; and the extent it is less than or equal to percent.
baseline volume) will not be subject to
(3) The baseline volume continues to (3) The value of the advanced biofuel
the requirement that lifecycle
be produced through processes fired standard for 2010 shall be 0.61 percent.
greenhouse gas emissions be at least 20
with natural gas, biomass, or any percent less than baseline lifecycle (4) The value of the renewable fuel
combination thereof. greenhouse gas emissions. Any party standard for 2010 shall be 8.25 percent.
(e) The annual volume of renewable that changes the fuel mix must update (b) Beginning with the 2011
fuel during a calendar year from their registration as specified in compliance period, EPA will calculate
facilities described in paragraphs (c) and 80.1450(d). the value of the annual standards and
(d) of this section that exceeds the publish these values in the Federal
80.1404 [Reserved] Register by November 30 of the year
baseline volume shall be subject to the
requirement that lifecycle greenhouse 80.1405 What are the Renewable Fuel preceding the compliance period.
gas emissions be at least 20 percent less Standards? (c) EPA will calculate the annual
than baseline lifecycle greenhouse gas (a) Renewable Fuel Standards for renewable fuel percentage standards
emissions. 2010. using the following equations:
RFVCB,i
StdCB,i = 100%
RFVBBD,i 1.5
StdBBD,i = 100%
RFVAB,i
StdAB,i = 100%
RFVRF,i
StdRF,i = 100%
Where: RDi = Amount of renewable fuel blended into 80.1441 and 80.1442, respectively.
StdCB,i = The cellulosic biofuel standard for diesel that is projected to be consumed Assumed to equal 0.152*(Di-RDi).
year i, in percent. in the 48 contiguous states and Hawaii,
in year i, in gallons. (d) The 2010 price for cellulosic
StdBBD,i = The biomass-based diesel standard
for year i, in percent. GSi = Amount of gasoline projected to be biofuel waiver credits is $1.56 per
StdAB,i = The advanced biofuel standard for used in Alaska or a U.S. territory, in year waiver credit.
year i, in percent. i, if the state or territory has opted-in or
opts-in, in gallons. 80.1406 Who is an obligated party under
StdRF,i = The renewable fuel standard for year the RFS program?
RGSi = Amount of renewable fuel blended
i, in percent.
into gasoline that is projected to be (a)(1) An obligated party is any refiner
RFVCB,i = Annual volume of cellulosic
consumed in Alaska or a U.S. territory, that produces gasoline or diesel fuel
biofuel required by section 211(o)(2)(B) in year i, if the state or territory opts-in,
of the Clean Air Act for year i, in gallons. in gallons. within the 48 contiguous states or
RFVBBD,i = Annual volume of biomass-based DSi = Amount of diesel projected to be used Hawaii, or any importer that imports
diesel required by section 211(o)(2)(B) of in Alaska or a U.S. territory, in year i, if gasoline or diesel fuel into the 48
the Clean Air Act for year i, in gallons. the state or territory has opted-in or opts- contiguous states or Hawaii during a
RFVAB,i = Annual volume of advanced in, in gallons. compliance period. A party that simply
biofuel required by section 211(o)(2)(B) RDSi = Amount of renewable fuel blended
of the Clean Air Act for year i, in gallons.
blends renewable fuel into gasoline or
into diesel that is projected to be diesel fuel, as defined in 80.1407(c) or
RFVRF,i = Annual volume of renewable fuel consumed in Alaska or a U.S. territory,
required by section 211(o)(2)(B) of the in year i, if the state or territory opts-in,
(e), is not an obligated party.
Clean Air Act for year i, in gallons. in gallons. (2) If the Administrator approves a
Gi = Amount of gasoline projected to be used GEi = The amount of gasoline projected to be petition of Alaska or a United States
in the 48 contiguous states and Hawaii, produced by exempt small refineries and territory to opt-in to the renewable fuel
in year i, in gallons. small refiners, in year i, in gallons in any program under the provisions in
Di = Amount of diesel projected to be used year they are exempt per 80.1441 and 80.1443, then obligated party shall
in the 48 contiguous states and Hawaii, 80.1442, respectively. Assumed to equal
in year i, in gallons.
also include any refiner that produces
0.119*(Gi-RGi).
RGi = Amount of renewable fuel blended into DEi = The amount of diesel fuel projected to gasoline or diesel fuel within that state
gasoline that is projected to be consumed be produced by exempt small refineries or territory, or any importer that imports
in the 48 contiguous states and Hawaii, and small refiners in year i, in gallons, gasoline or diesel fuel into that state or
ER26MR10.429</GPH>
in year i, in gallons. in any year they are exempt per territory.
(b) For each compliance period paragraphs (b), (c), and (f) of this section, RVORF,i = The Renewable Volume Obligation
starting with 2010, an obligated party is which is produced in or imported into for renewable fuel for an obligated party
required to demonstrate, pursuant to the 48 contiguous states or Hawaii by an for calendar year i, in gallons.
obligated party in calendar year i, in RFStdRF,i = The standard for renewable fuel
80.1427, that it has satisfied the
gallons. for calendar year i, determined by EPA
Renewable Volume Obligations for that DVi = The non-renewable diesel volume, pursuant to 80.1405, in percent.
compliance period, as specified in determined in accordance with GVi = The non-renewable gasoline volume,
80.1407(a). paragraphs (d), (e), and (f) of this section, determined in accordance with
(c) Aggregation of facilities. produced in or imported into the 48 paragraphs (b), (c), and (f) of this section,
(1) Except as provided in paragraph contiguous states or Hawaii by an which is produced in or imported into
(c)(2) of this section, an obligated party obligated party in calendar year i, in the 48 contiguous states or Hawaii by an
may comply with the requirements of gallons. obligated party in calendar year i, in
paragraph (b) of this section for all of its DCB,i1 = Deficit carryover from the previous gallons.
refineries in the aggregate, or for each year for cellulosic biofuel, in gallons. DVi = The non-renewable diesel volume,
refinery individually. determined in accordance with
(2) Biomass-based diesel. paragraphs (d), (e), and (f) of this section,
(2) An obligated party that carries a RVOBBD,i = (RFStdBBD,i * (GVi + DVi)) + produced in or imported into the 48
deficit into year i+1 must use the same DBBD,i1 contiguous states or Hawaii by an
approach to aggregation of facilities in obligated party in calendar year i, in
year i+1 as it did in year i. Where:
gallons.
(d) An obligated party must comply RVOBBD,i = The Renewable Volume
DRF,i1 = Deficit carryover from the previous
Obligation for biomass-based diesel for
with the requirements of paragraph (b) year for renewable fuel, in gallons.
an obligated party for calendar year i, in
of this section for all of its imported gallons. (b) The non-renewable gasoline
gasoline or diesel fuel in the aggregate. RFStdBBD,i = The standard for biomass-based volume, GVi, for an obligated party for
(e) An obligated party that is both a diesel for calendar year i, determined by a given year as specified in paragraph
refiner and importer must comply with EPA pursuant to 80.1405, in percent. (a) of this section is calculated as
the requirements of paragraph (b) of this GVi = The non-renewable gasoline volume, follows:
section for its imported gasoline or determined in accordance with
diesel fuel separately from gasoline or paragraphs (b), (c), and (f) of this section,
diesel fuel produced by its domestic which is produced in or imported into n m
refinery or refineries. the 48 contiguous states or Hawaii by an GVi = Gx RBGy
(f) Where a refinery or import facility obligated party in calendar year i, in x =1 y =1
is jointly owned by two or more parties, gallons.
DVi = The non-renewable diesel volume, Where:
the requirements of paragraph (b) of this x = Individual batch of gasoline produced or
determined in accordance with
section may be met by one of the joint paragraphs (d), (e), and (f) of this section, imported in calendar year i.
owners for all of the gasoline or diesel produced in or imported into the 48 n = Total number of batches of gasoline
fuel produced/imported at the facility, contiguous states or Hawaii by an produced or imported in calendar year i.
or each party may meet the obligated party in calendar year i, in Gx = Volume of batch x of gasoline produced
requirements of paragraph (b) of this gallons. or imported, as defined in paragraph (c)
section for the portion of the gasoline or DBBD,i1 = Deficit carryover from the previous of this section, in gallons.
diesel fuel that it produces or imports, year for biomass-based diesel, in gallons. y = Individual batch of renewable fuel
blended into gasoline in calendar year i.
as long as all of the gasoline or diesel (3) Advanced biofuel. m = Total number of batches of renewable
fuel produced/imported at the facility is RVOAB,i = (RFStdAB,i * (GVi + DVi)) + fuel blended into gasoline in calendar
accounted for in determining the DAB,i1 year i.
Renewable Volume Obligations under Where: RBGy = Volume of batch y of renewable fuel
80.1407. RVOAB,i = The Renewable Volume Obligation blended into gasoline, in gallons.
(g) The requirements in paragraph (b) for advanced biofuel for an obligated (c) Except as specified in paragraph (f)
of this section apply to the following party for calendar year i, in gallons. of this section, all of the following
compliance periods: Beginning in 2010, RFStdAB,i = The standard for advanced products that are produced or imported
and every year thereafter, the biofuel for calendar year i, determined during a compliance period, collectively
compliance period is January 1 through by EPA pursuant to 80.1405, in
called gasoline for the purposes of this
December 31. percent.
GVi = The non-renewable gasoline volume, section (unless otherwise specified), are
80.1407 How are the Renewable Volume determined in accordance with to be included (but not double-counted)
Obligations calculated? paragraphs (b), (c), and (f) of this section, in the volume used to calculate a partys
(a) The Renewable Volume which is produced in or imported into Renewable Volume Obligations under
Obligations for an obligated party are the 48 contiguous states or Hawaii by an paragraph (a) of this section, except as
determined according to the following obligated party in calendar year i, in provided in paragraph (f) of this section:
formulas: gallons. (1) Reformulated gasoline, whether or
DVi = The non-renewable diesel volume, not renewable fuel is later added to it.
(1) Cellulosic biofuel.
determined in accordance with (2) Conventional gasoline, whether or
RVOCB,i = (RFStdCB,i * (GVi + DVi)) + paragraphs (d), (e), and (f) of this section,
DCB,i1 not renewable fuel is later added to it.
produced in or imported into the 48 (3) Reformulated gasoline blendstock
Where: contiguous states or Hawaii by an
obligated party in calendar year i, in
that becomes finished reformulated
RVOCB,i = The Renewable Volume Obligation gasoline upon the addition of oxygenate
for cellulosic biofuel for an obligated gallons.

DAB,i1 = Deficit carryover from the previous (RBOB).
party for calendar year i, in gallons. (4) Conventional gasoline blendstock
RFStdCB,i = The standard for cellulosic year for advanced biofuel, in gallons.
biofuel for calendar year i, determined
that becomes finished conventional
(4) Renewable fuel.
by EPA pursuant to 80.1405, in gasoline upon the addition of oxygenate
RVORF,i = (RFStdRF,i * (GVi + DVi)) + (CBOB).
percent.
GVi = The non-renewable gasoline volume,
DRF,i1 (5) Blendstock (including butane and
ER26MR10.430</GPH>
determined in accordance with Where: gasoline treated as blendstock (GTAB))
that has been combined with other Hawaii, and gasoline or diesel fuel (c) Calculation of new equivalence
blendstock and/or finished gasoline to exported for use outside Alaska, the values.
produce gasoline. Commonwealth of Puerto Rico, the U.S. (1) The equivalence value for
(6) Any gasoline, or any unfinished Virgin Islands, Guam, American Samoa, renewable fuels described in paragraph
gasoline that becomes finished gasoline and the Commonwealth of the Northern (b)(7) of this section shall be calculated
upon the addition of oxygenate, that is Marianas, if the area has opted into the using the following formula:
produced or imported to comply with a RFS program under 80.1443. EV = (R/0.972) * (EC/77,000)
state or local fuels program. (6) For blenders, the volume of Where:
(d) The diesel non-renewable volume, finished gasoline, finished diesel fuel,
DVi, for an obligated party for a given EV = Equivalence Value for the renewable
RBOB, or CBOB to which a blender adds fuel, rounded to the nearest tenth.
year as specified in paragraph (a) of this blendstocks. R = Renewable content of the renewable fuel.
section is calculated as follows: (7) The gasoline or diesel fuel portion This is a measure of the portion of a
of transmix produced by a transmix renewable fuel that came from a
n m processor, or the transmix blended into renewable source, expressed as a
DVi = Dx RBDy gasoline or diesel fuel by a transmix percent, on an energy basis.
blender, under 80.84. EC = Energy content of the renewable fuel,
x =1 y =1
(8) Any gasoline or diesel fuel that is in Btu per gallon (lower heating value).
Where:
not transportation fuel. (2) The application for an equivalence
x = Individual batch of diesel produced or value shall include a technical
imported in calendar year i. 80.140880.1414 [Reserved]
justification that includes a description
n = Total number of batches of diesel
produced or imported in calendar year i. 80.1415 How are equivalence values of the renewable fuel, feedstock(s) used
Dx = Volume of batch x of diesel produced assigned to renewable fuel? to make it, and the production process.
or imported, as defined in paragraph (e) (a)(1) Each gallon of a renewable fuel, (3) The Agency will review the
of this section, in gallons. or gallon equivalent pursuant to technical justification and assign an
y = Individual batch of renewable fuel paragraph (c) of this section, shall be appropriate equivalence value to the
blended into diesel in calendar year i. renewable fuel based on the procedure
assigned an equivalence value by the
m = Total number of batches of renewable in this paragraph (c).
fuel blended into diesel in calendar year producer or importer pursuant to
paragraph (b) or (c) of this section. (4) Applications for equivalence
i. values must be sent to one of the
RBDy = Volume of batch y of renewable fuel (2) The equivalence value is a number
that is used to determine how many following addresses:
blended into diesel, in gallons.
(i) For U.S. Mail: U.S. EPA, Attn:
(e) Except as specified in paragraph (f) gallon-RINs can be generated for a batch
RFS2 Program Equivalence Value
of this section, all products meeting the of renewable fuel according to
Application, 6406J, 1200 Pennsylvania
definition of MVNRLM diesel fuel at 80.1426.
(b) Equivalence values shall be Avenue, NW., Washington, DC 20460.
80.2(qqq) that are produced or (ii) For overnight or courier services:
imported during a compliance period, assigned for certain renewable fuels as
U.S. EPA, Attn: RFS2 Program
collectively called diesel fuel for the follows:
Equivalence Value Application, 6406J,
purposes of this section (unless (1) Ethanol which is denatured shall
1310 L Street, NW., 6th floor,
otherwise specified), are to be included have an equivalence value of 1.0.
Washington, DC 20005. (202) 3439038.
(but not double-counted) in the volume (2) Biodiesel (mono-alkyl ester) shall
(5) All applications required under
used to calculate a partys Renewable have an equivalence value of 1.5.
this section shall be submitted on forms
(3) Butanol shall have an equivalence
Volume Obligations under paragraph (a) and following procedures prescribed by
value of 1.3.
of this section. the Administrator.
(f) The following products are not (4) Non-ester renewable diesel with a
included in the volume of gasoline or lower heating value of at least 123,500 80.1416 Petition process for evaluation
diesel fuel produced or imported used Btu/gal shall have an equivalence value of new renewable fuels pathways.
to calculate a partys Renewable Volume of 1.7. (a)(1) A party may petition EPA to
Obligations according to paragraph (a) (5) A gallon of renewable fuel assign a D code for a new renewable fuel
of this section: represents 77,000 Btu (lower heating pathway that has not been evaluated by
(1) Any renewable fuel as defined in value) of biogas, and biogas shall have EPA to determine if it qualifies for a D
80.1401. an equivalence value of 1.0. code as defined in 80.1426(f), pursuant
(2) Blendstock that has not been (6) A gallon of renewable fuel to this section. A D code must be
combined with other blendstock, represents 22.6 kW-hr of electricity, and approved prior to the generation of RINs
finished gasoline, or diesel to produce electricity shall have an equivalence for the fuel in question.
gasoline or diesel. value of 1.0. (2) For renewable fuel pathways that
(3) Gasoline or diesel fuel produced or (7) For all other renewable fuels, a have been determined by EPA not to
imported for use in Alaska, the producer or importer shall submit an qualify for a D code as defined in
Commonwealth of Puerto Rico, the U.S. application to the Agency for an 80.1426(f), parties who can document
Virgin Islands, Guam, American Samoa, equivalence value following the significant differences between the fuel
and the Commonwealth of the Northern provisions of paragraph (c) of this production processes considered in this
Marianas, unless the area has opted into section. A producer or importer may rule and their fuel pathway production
the RFS program under 80.1443. also submit an application for an processes may petition EPA to use a D
(4) Gasoline or diesel fuel produced alternative equivalence value pursuant code pursuant to this section.
by a small refinery that has an to paragraph (c) if the renewable fuel is (3) Parties may petition EPA to qualify
exemption under 80.1441 or an listed in this paragraph (b), but the their renewable fuel pathway for a
approved small refiner that has an producer or importer has reason to different D code than the D code
exemption under 80.1442. believe that a different equivalence assigned to the fuel pathway as defined
(5) Gasoline or diesel fuel exported for value than that listed in this paragraph in 80.1426(f) if the parties can
ER26MR10.431</MATH>
use outside the 48 United States and (b) is warranted. document significant differences
between the fuel production processes determines the petition to be (3) D has the value of 5 to denote fuel
considered in this rule and their fuel incomplete, then the company may categorized as advanced biofuel.
pathway production processes, pursuant resubmit. (4) D has the value of 6 to denote fuel
to this section. (2) The petition must be signed and categorized as renewable fuel.
(b)(1) Any petition under paragraph certified as meeting all the applicable (5) D has the value of 7 to denote fuel
(a) of this section shall include all the requirements of this subpart by the categorized as cellulosic diesel.
following: responsible corporate officer of the (h) SSSSSSSS is a number
(i) The information specified under applicant organization. representing the first gallon-RIN
80.76. (3) If EPA determines that the petition associated with a batch of renewable
(ii) A technical justification that is incomplete then EPA will notify the fuel.
includes a description of the renewable applicant in writing that the petition is (i) EEEEEEEE is a number
fuel, feedstock(s) used to make it, and incomplete and will not be reviewed representing the last gallon-RIN
the production process. The justification further. However, an amended petition associated with a batch of renewable
must include process modeling flow that corrects the omission may be refuel. EEEEEEEE will be identical to
charts. submitted for EPA review. SSSSSSSS if the batch-RIN represents a
(iii) A mass balance for the pathway, (4) If the fuel or pathway described in single gallon-RIN. Assign the value of
including feedstocks, fuels produced, the petition does not meet the EEEEEEEE as described in 80.1426.
co-products, and waste materials definitions in 80.1401 of renewable
production. fuel, advanced biofuel, cellulosic 80.1426 How are RINs generated and
(iv) Information on co-products, biofuel, or biomass-based diesel, then assigned to batches of renewable fuel by
EPA will notify the applicant in writing renewable fuel producers or importers?
including their expected use and market
value. that the petition is denied and will not (a) General requirements.
(v) An energy balance for the be reviewed further. (1) To the extent permitted under
pathway, including a list of any energy (d) The petition under this section paragraphs (b) and (c) of this section,
and process heat inputs and outputs shall be submitted on forms and producers and importers of renewable
used in the pathway, including such following procedures as prescribed by fuel must generate RINs to represent
sources produced off site or by another EPA. that fuel if the fuel:
entity. (i) Qualifies for a D code pursuant to
80.141780.1424 [Reserved] 80.1426(f), or EPA has approved a
(vi) Any other relevant information,
including information pertaining to 80.1425 Renewable Identification petition for use of a D code pursuant to
energy saving technologies or other Numbers (RINs). 80.1416; and
process improvements. Each RIN is a 38-character numeric (ii) Is demonstrated to be produced
(vii) The Administrator may ask for code of the following form: from renewable biomass pursuant to the
additional information to complete the reporting requirements of 80.1451 and
KYYYYCCCCFFFFFBBBBBRRD
lifecycle greenhouse gas assessment of the recordkeeping requirements of
SSSSSSSSEEEEEEEE
the new fuel or pathway. 80.1454.
(a) K is a number identifying the type (A) Feedstocks meeting the
(2) For those companies who use a of RIN as follows:
feedstock not previously evaluated by requirements of renewable biomass
(1) K has the value of 1 when the RIN through the aggregate compliance
EPA under this subpart, the petition is assigned to a volume of renewable
must include all the following in provision at 80.1454(g) are deemed to
fuel pursuant to 80.1426(e) and be renewable biomass.
addition to the requirements in 80.1428(a).
paragraph (b)(1) of this section: (B) [Reserved]
(2) K has the value of 2 when the RIN (2) To generate RINs for imported
(i) Type of feedstock and description has been separated from a volume of
of how it meets the definition of renewable fuel, including any
renewable fuel pursuant to 80.1429. renewable fuel contained in imported
renewable biomass. (b) YYYY is the calendar year in
(ii) Market value of the feedstock. transportation fuel, importers must
which the RIN was generated.
(iii) List of other uses for the (c) CCCC is the registration number obtain information from a foreign
feedstock. assigned, according to 80.1450, to the producer that is registered pursuant to
(iv) List of chemical inputs needed to producer or importer of the batch of 80.1450 sufficient to make the
produce the renewable biomass source renewable fuel. appropriate determination regarding the
of the feedstock and prepare the (d) FFFFF is the registration number applicable D code and compliance with
renewable biomass for processing into assigned, according to 80.1450, to the the renewable biomass definition for
feedstock. facility at which the batch of renewable each imported batch for which RINs are
(v) Identify energy needed to obtain fuel was produced or imported. generated.
the feedstock and deliver it to the (e) BBBBB is a serial number assigned (3) A party generating a RIN shall
facility. If applicable, identify energy to the batch which is chosen by the specify the appropriate numerical
needed to plant and harvest the producer or importer of the batch such values for each component of the RIN in
renewable biomass source of the that no two batches have the same value accordance with the provisions of
feedstock and modify the source to in a given calendar year. 80.1425(a) and paragraph (f) of this
create the feedstock. (f) RR is a number representing 10 section.
(vi) Current and projected yields of times the equivalence value of the (b) Regional applicability.
the feedstock that will be used to renewable fuel as specified in 80.1415. (1) Except as provided in paragraph
produce the fuels. (g) D is a number determined (c) of this section, a RIN must be
(vii) The Administrator may ask for according to 80.1426(f) and identifying generated by a renewable fuel producer
additional information to complete the the type of renewable fuel, as follows: or importer for a batch of renewable fuel
lifecycle Greenhouse Gas assessment of (1) D has the value of 3 to denote fuel that satisfies the requirements of
the new fuel or pathway. categorized as cellulosic biofuel. paragraph (a)(1) of this section if it is
(c)(1) A company may only submit (2) D has the value of 4 to denote fuel produced or imported for use as
one petition per pathway. If EPA categorized as biomass-based diesel. transportation fuel, heating oil, or jet
fuel in the 48 contiguous states or produces its first gallon of renewable (2) Multiple gallon-RINs generated to
Hawaii. fuel. represent a given volume of renewable
(2) If the Administrator approves a (4) Importers shall not generate RINs fuel can be represented by a single
petition of Alaska or a United States for fuel imported from a foreign batch-RIN through the appropriate
territory to opt-in to the renewable fuel producer that is not registered with EPA designation of the RIN volume codes
program under the provisions in as required in 80.1450. SSSSSSSS and EEEEEEEE.
80.1443, then the requirements of (5) Importers shall not generate RINs (i) The value of SSSSSSSS in the
paragraph (b)(1) of this section shall also for renewable fuel that has already been batch-RIN shall be 00000001 to
apply to renewable fuel produced or assigned RINs by a registered foreign represent the first gallon-RIN associated
imported for use as transportation fuel, producer. with the volume of renewable fuel.
heating oil, or jet fuel in that state or (6) A party is prohibited from (ii) The value of EEEEEEEE in the
territory beginning in the next calendar generating RINs for a volume of fuel that batch-RIN shall represent the last
year. it produces if: gallon-RIN associated with the volume
(c) Cases in which RINs are not (i) The fuel does not meet the of renewable fuel, based on the RIN
generated. requirements of paragraph (a)(1) of this volume determined pursuant to
section; or paragraph (f) of this section.
(1) Fuel producers and importers may (ii) The fuel has been produced from (iii) Under 80.1452, RIN volumes
not generate RINs for fuel that is not a chemical conversion process that uses will be managed by EMTS. RIN codes
designated or intended for use as another renewable fuel as a feedstock, SSSSSSSS and EEEEEEEE do not have
transportation fuel, heating oil, or jet the renewable fuel used as a feedstock a role in EMTS.
fuel. was produced by another party, and (e) Assignment of RINs to batches.
(2) Small producer/importer RINs with a K code of 1 were received (1) The producer or importer of
threshold. Pursuant to 80.1455(a) and with the renewable fuel. renewable fuel must assign all RINs
(b), renewable fuel producers that (A) Parties who produce renewable generated to volumes of renewable fuel.
produce less than 10,000 gallons a year fuel made from a feedstock which itself (2) A RIN is assigned to a volume of
of renewable fuel, and importers that was a renewable fuel received with renewable fuel when ownership of the
import less than 10,000 gallons a year of RINs, shall assign the original RINs to RIN is transferred along with the
renewable fuel, are not required to the new renewable fuel. transfer of ownership of the volume of
generate and assign RINs to batches of (B) [Reserved] renewable fuel, pursuant to 80.1428(a).
renewable fuel that that satisfy the (d)(1) Definition of batch. For the (3) All assigned RINs shall have a K
requirements of paragraph (a)(1) of this purposes of this section and 80.1425, code value of 1.
section that they produce or import. a batch of renewable fuel is a volume (f) Generation of RINs.
(3) Temporary new producer of renewable fuel that has been assigned (1) Applicable pathways. D codes
threshold. Pursuant to 80.1455(c) and a unique identifier within a calendar shall be used in RINs generated by
(d), renewable fuel producers that year by the producer or importer of the producers or importers of renewable
produce less than 125,000 gallons a year renewable fuel in accordance with the fuel according to the pathways listed in
of renewable fuel are not required to provisions of this section and 80.1425. Table 1 to this section, or as approved
generate and assign RINs to batches of (i) The number of gallon-RINs by the Administrator. In choosing an
renewable fuel that satisfy the generated for a batch of renewable fuel appropriate D code, producers and
requirements of paragraph (a)(1) of this may not exceed 99,999,999. importers may disregard any incidental,
section and that are produced from a (ii) A batch of renewable fuel cannot de minimis feedstock contaminants that
new facility, for a maximum of three represent renewable fuel produced or are impractical to remove and are
years beginning with the calendar year imported in excess of one calendar related to customary feedstock
in which the production facility month. production and transport.
TABLE 1 TO 80.1426 APPLICABLE D CODES FOR EACH FUEL PATHWAY FOR USE IN GENERATING RINS
Production process
requirements
Ethanol ............................. Corn starch .............................................................. All of the following: .................................................. 6

Drymill process, using natural gas, biomass, or
biogas for process energy and at least two ad-
vanced technologies from Table 2 to this section.
Dry mill process, using natural gas, biomass, or
biogas for process energy and at least one of
the advanced technologies from Table 2 to this
section plus drying no more than 65% of the
distillers grains with solubles it markets annually.
Dry mill process, using natural gas, biomass, or
biogas for process energy and drying no more
than 50% of the distillers grains with solubles it

markets annually.
Ethanol ............................. Corn starch .............................................................. Wet mill process using biomass or biogas for 6
process energy.
Ethanol ............................. Starches from agricultural residues and annual Fermentation using natural gas, biomass, or 6
covercrops. biogas for process energy.
TABLE 1 TO 80.1426 APPLICABLE D CODES FOR EACH FUEL PATHWAY FOR USE IN GENERATING RINSContinued
Production process
requirements
Biodiesel, and renewable Soy bean oil; One of the following: 4

diesel. Oil from annual covercrops; Trans-Esterification
Algal oil; Hydrotreating
Biogenic waste oils/fats/greases; Excluding processes that co-process renewable
Non-food grade corn oil. biomass and petroleum.
Biodiesel, and renewable Soy bean oil; One of the following: 5
diesel. Oil from annual covercrops; Trans-Esterification
Algal oil; Hydrotreating
Biogenic waste oils/fats/greases; Includes only processes that co-process renew-
Non-food grade corn oil. able biomass and petroleum.
Ethanol ............................. Sugarcane ............................................................... Fermentation ........................................................... 5
Ethanol ............................. Cellulosic Biomass from agricultural residues, Any .......................................................................... 3
slash, forest thinnings and forest product resi-
dues, annual covercrops; switchgrass, and
miscanthus; cellulosic components of separated
yard wastes; cellulosic components of separated
food wastes; and cellulosic components of sep-
arated MSW.
Cellulosic Diesel, Jet Fuel Cellulosic Biomass from agricultural residues, Any .......................................................................... 7
and Heating Oil. slash, forest thinnings and forest product resi-
dues, annual covercrops, switchgrass, and
arated MSW.
Butanol ............................. Corn starch .............................................................. Fermentation; dry mill using natural gas, biomass, 6
or biogas for process energy.
Cellulosic Naphtha ........... Cellulosic Biomass from agricultural residues, Fischer-Tropsch process ......................................... 3
slash, forest thinnings and forest product resi-
dues, annual covercrops, switchgrass, and
arated MSW.
Ethanol, renewable diesel, The non-cellulosic portions of separated food Any .......................................................................... 5
jet fuel, heating oil, and wastes.
naphtha.
Biogas .............................. Landfills, sewage and waste treatment plants, ma- Any .......................................................................... 5
nure digesters.
TABLE 2 TO 80.1426ADVANCED calculated in accordance with paragraph for a batch of renewable fuel shall be
TECHNOLOGIES (f)(8) of this section. equal to a volume calculated according
(ii) The D code that shall be used in to the following formula:
Corn oil fractionation. the RINs generated shall be the D code VRIN = EV * Vs
Corn oil extraction. specified in Table 1 to this section, or Where:
Membrane separation. a D code as approved by the VRIN = RIN volume, in gallons, for use in
Raw starch hydrolysis. Administrator, which corresponds to determining the number of gallon-RINs
Combined heat and power.
the pathway that describes the that shall be generated for the batch.
producers operations. EV = Equivalence value for the batch of
(2) Renewable fuel that can be (3) Renewable fuel that can be renewable fuel per 80.1415.
described by a single pathway. described by two or more pathways. Vs = Standardized volume of the batch of
(i) The number of gallon-RINs that renewable fuel at 60 F, in gallons,
(i) The D codes that shall be used in calculated in accordance with paragraph
shall be generated for a batch of the RINs generated by a producer or (f)(8) of this section.
renewable fuel by a producer or importer whose renewable fuel can be
importer for renewable fuel that can be described by two or more pathways (iii) If all the pathways describing the
described by a single pathway shall be shall be the D codes specified in Table producers operations have the same D
equal to a volume calculated according 1 to this section, or D codes as approved code but individual batches are
to the following formula: by the Administrator, which correspond comprised of a mixture of fuel types
to the pathways that describe the with different equivalence values, then
VRIN = EV * Vs that D code shall be used in all the RINs
renewable fuel throughout that calendar
Where: generated and the number of gallon-

year.
VRIN = RIN volume, in gallons, for use in
(ii) If all the pathways describing the RINs that shall be generated for a batch
determining the number of gallon-RINs of renewable fuel shall be equal to a
that shall be generated for the batch. producers operations have the same D
code and each batch is of a single fuel volume calculated according to the
EV = Equivalence value for the batch of following formula:
renewable fuel per 80.1415. type, then that D code shall be used in
Vs = Standardized volume of the batch of all the RINs generated and the number VRIN = S(EVi * Vs,i)
renewable fuel at 60 F, in gallons, of gallon-RINs that shall be generated Where:
VRIN = RIN volume, in gallons, for use in unique batch identifiers for each portion EVCB = Equivalence value for the cellulosic
determining the number of gallon-RINs of the batch with a different D code. biofuel portion of the batch per
that shall be generated for the batch. 80.1415.
EVi = Equivalence value for fuel type i in the EVBBD = Equivalence value for the biomass-
TABLE 3 TO 80.1426NUMBER OF based diesel portion of the batch per
batch of renewable fuel per 80.1415.
Vs,i = Standardized volume of fuel type i GALLON-RINS TO ASSIGN TO 80.1415.
in the batch of renewable fuel at 60 F, in BATCH-RINS WITH D CODES DE- EVAB = Equivalence value for the advanced
gallons, calculated in accordance with PENDENT ON FUEL TYPE biofuel portion of the batch per
paragraph (f)(8) of this section. 80.1415.
D code to use in Number of EVRF = Equivalence value for the renewable
(iv) If the pathway applicable to a batch-RIN gallon-RINs fuel portion of the batch per 80.1415.
producer changes on a specific date, EVCD = Equivalence value for the cellulosic
such that one pathway applies before D = 3 ......................... VRIN, CB = EVCB * diesel portion of the batch per 80.1415.
the date and another pathway applies Vs,CB Vs,CB = Standardized volume at 60 F of the
on and after the date, and each batch is D = 4 ......................... VRIN, BBD = EVBBD * portion of the batch that must be
Vs,BBD assigned a D code of 3, in gallons,
of a single fuel type, then the applicable calculated in accordance with paragraph
D = 5 ......................... VRIN, AB = EVAB *
D code and batch identifier used in Vs,AB (f)(8) of this section.
generating RINs must change on the D = 6 ......................... VRIN, RF = EVRF * Vs,BBD = Standardized volume at 60 F of the
date that the change in pathway occurs Vs,RF portion of the batch that must be
and the number of gallon-RINs that shall D = 7 ......................... VRIN, CD = EVCD * assigned a D code of 4, in gallons,
be generated for a batch of renewable Vs,CD calculated in accordance with paragraph
fuel shall be equal to a volume (f)(8) of this section.
calculated according to the following Where: Vs,AB = Standardized volume at 60 F of the
formula: VRIN,CB = RIN volume, in gallons, for use in portion of the batch that must be
determining the number of gallon-RINs assigned a D code of 5, in gallons,
VRIN = EV * Vs that shall be generated for the cellulosic calculated in accordance with paragraph
biofuel portion of the batch with a D (f)(8) of this section.
Where:
Vs,RF = Standardized volume at 60 F of the
VRIN = RIN volume, in gallons, for use in code of 3.
portion of the batch that must be
determining the number of gallon-RINs VRIN,BBD = RIN volume, in gallons, for use in
assigned a D code of 6, in gallons,
that shall be generated for a batch with determining the number of gallon-RINs
calculated in accordance with paragraph
a single applicable D code. that shall be generated for the biomass-
(f)(8) of this section.
EV = Equivalence value for the batch of based diesel portion of the batch with a
Vs,CD = Standardized volume at 60 F of the
renewable fuel per 80.1415. D code of 4.
portion of the batch that must be
Vs = Standardized volume of the batch of VRIN,AB = RIN volume, in gallons, for use in
assigned a D code of 7, in gallons,
renewable fuel at 60 F, in gallons, determining the number of gallon-RINs
calculated in accordance with paragraph
calculated in accordance with paragraph that shall be generated for the advanced
(f)(8) of this section. biofuel potion of the batch with a D code
of 5. (vi) If a producer produces a single
(v) If a producer produces batches that VRIN,RF = RIN volume, in gallons, for use in type of renewable fuel using two or
are comprised of a mixture of fuel types determining the number of gallon-RINs more different feedstocks which are
with different equivalence values and that shall be generated for the renewable processed simultaneously, and each
fuel potion of the batch with a D code
different applicable D codes, then batch is comprised of a single type of
of 6.
separate values for VRIN shall be VRIN,CD = RIN volume, in gallons, for use in fuel, then the number of gallon-RINs
calculated for each category of determining the number of gallon-RINs that shall be generated for a batch of
renewable fuel according to formulas in that shall be generated for the cellulosic renewable fuel and assigned a particular
Table 3 to this section. All batch-RINs diesel portion of the batch with a D code D code shall be determined according to
thus generated shall be assigned to of 7. the formulas in Table 4 to this section.
ER26MR10.432</MATH>
Where: simultaneously to produce a section, or a D code as approved by the

VRIN,CB = RIN volume, in gallons, for use in transportation fuel that is partially Administrator, which corresponds to
determining the number of gallon-RINs renewable. the pathway that describes a producers
that shall be generated for a batch of (i) The number of gallon-RINs that operations. In determining the
cellulosic biofuel with a D code of 3. shall be generated for a batch of appropriate pathway, the contribution
VRIN,BBD = RIN volume, in gallons, for use in
determining the number of gallon-RINs
partially renewable transportation fuel of fossil fuel feedstocks to the
that shall be generated for a batch of shall be equal to a volume VRIN production of partially renewable fuel
biomass-based diesel with a D code of 4. calculated according to Method A or shall be ignored.
VRIN,AB = RIN volume, in gallons, for use in Method B. (5) Renewable fuel produced from
determining the number of gallon-RINs (A) Method A. separated yard and food waste.
that shall be generated for a batch of (1) VRIN shall be calculated according (i) Separated yard waste and food
advanced biofuel with a D code of 5. to the following formula: waste means, for the purposes of this
VRIN,RF = RIN volume, in gallons, for use in section, waste that is one of the
determining the number of gallon-RINs VRIN = EV * Vs * FER/(FER + FENR)
following:
that shall be generated for a batch of Where: (A) Separated yard wastes, which are
renewable fuel with a D code of 6. VRIN = RIN volume, in gallons, for use in feedstock streams consisting of yard
VRIN,CD = RIN volume, in gallons, for use in determining the number of gallon-RINs
determining the number of gallon-RINs waste kept separate since generation
that shall be generated for the batch. from other waste materials. Separated
that shall be generated for a batch of EV = Equivalence value for the batch of
cellulosic diesel with a D code of 7. renewable fuel per 80.1415.
yard wastes are deemed to be composed
EV = Equivalence value for the renewable Vs = Standardized volume of the batch of entirely of cellulosic materials.
fuel per 80.1415. renewable fuel at 60 F, in gallons, (B) Separated food wastes, which are
Vs = Standardized volume of the batch of calculated in accordance with paragraph feedstock streams consisting of food
renewable fuel at 60 F, in gallons, (f)(8) of this section. wastes kept separate since generation
calculated in accordance with paragraph FER = Feedstock energy from renewable from other waste materials, and which
(f)(8) of this section. biomass used to make the transportation include food and beverage production
FE3 = Feedstock energy from all feedstocks fuel, in Btu.
whose pathways have been assigned a D wastes and post-consumer food and
FENR = Feedstock energy from non-renewable beverage wastes. Separated food wastes
code of 3 under Table 1 to this section, feedstocks used to make the
or a D code of 3 as approved by the are deemed to be composed entirely of
transportation fuel, in Btu.
Administrator, in Btu. non-cellulosic materials, unless a party
FE4 = Feedstock energy from all feedstocks (2) The value of FE for use in demonstrates that a portion of the
whose pathways have been assigned a D paragraph (f)(4)(i)(A)(1) of this section feedstock is cellulosic through approval
code of 4 under Table 1 to this section, shall be calculated from the following of their facility registration.
or a D code of 4 as approved by the formula: (C) Separated municipal solid waste
Administrator, in Btu.
FE5 = Feedstock energy from all feedstocks FE = M * (1 m) * CF * E (MSW), which is material remaining
whose pathways have been assigned a D after separation actions have been taken
FE = Feedstock energy, in Btu. to remove recyclable paper, cardboard,
code of 5 under Table 1 to this section, M = Mass of feedstock, in pounds, measured
or a D code of 5 as approved by the plastics, rubber, textiles, metals, and
on a daily or per-batch basis.
m = Average moisture content of the
glass from municipal solid waste, and
FE6 = Feedstock energy from all feedstocks which is composed of both cellulosic
feedstock, in mass percent.
whose pathways have been assigned a D and non-cellulosic materials.
CF = Converted fraction in annual average
code of 6 under Table 1 to this section, (ii)(A) A feedstock qualifies under
mass percent, representing that portion
or a D code of 6 as approved by the paragraph (f)(5)(i)(A) or (f)(5)(i)(B) of
of the feedstock that is converted into
FE7 = Feedstock energy from all feedstocks
transportation fuel by the producer. this section only if it is collected
E = Energy content of the components of the according to a plan submitted to and
whose pathways have been assigned a D
feedstock that are converted to fuel, in approved by U.S. EPA under the
code of 7 under Table 1 to this section,
or a D code of 7 as approved by the annual average Btu/lb, determined registration procedures specified in
according to paragraph (f)(7) of this
Administrator, in Btu. 80.1450(b)(1)(vii).
section.
Feedstock energy values, FE, shall be (B) A feedstock qualifies under
calculated according to the following (B) Method B. VRIN shall be calculated paragraph (f)(5)(i)(C) of this section only
formula: according to the following formula: if it is collected according to a plan
VRIN = EV * Vs * R submitted to and approved by U.S. EPA
FE = M * (1 m) * CF * E
under the registration procedures
Where: Where:
specified in 80.1450(b)(1)(viii).
FE = Feedstock energy, in Btu. VRIN = RIN volume, in gallons, for use in (iii) Separation and recycling actions
M = Mass of feedstock, in pounds, measured determining the number of gallon-RINs
that shall be generated for the batch.
specified in paragraph (f)(5)(i)(C) of this
on a daily or per-batch basis. section are considered to occur if:
m = Average moisture content of the EV = Equivalence value for the batch of
renewable fuel per 80.1415. (A) Recyclable paper, cardboard,
feedstock, in mass percent.
Vs = Standardized volume of the batch of plastics, rubber, textiles, metals, and
CF = Converted Fraction in annual average
mass percent, representing that portion renewable fuel at 60 F, in gallons, glass that can be recycled are separated
of the feedstock that is converted into calculated in accordance with paragraph and removed from the municipal solid
renewable fuel by the producer. (f)(8) of this section. waste stream to the extent reasonably
E = Energy content of the components of the R = The renewable fraction of the fuel as practicable according to a plan
feedstock that are converted to measured by a carbon-14 dating test submitted to and approved by U.S. EPA
renewable fuel, in annual average Btu/lb, method as provided in paragraph (f)(9) of under the registration procedures
determined according to paragraph (f)(7) this section.
specified in 80.1450(b)(1)(viii); and
of this section. (ii) The D code that shall be used in (B) The fuel producer has evidence of
(4) Renewable fuel that is produced by the RINs generated to represent partially all contractual arrangements for paper,
co-processing renewable biomass and renewable transportation fuel shall be cardboard, plastics, rubber, textiles,
non-renewable feedstocks the D code specified in Table 1 to this metals, and glass that are recycled.
(iv)(A) The number of gallon-RINs describes the producers operations and value of E. The value of E shall be based
that shall be generated for a batch of feedstocks. upon the test results of a sample of
renewable fuel derived from separated (6) Renewable fuel neither covered by feedstock that, based upon good
yard waste as defined in paragraph the pathways in Table 1 to this section, engineering judgment, is representative
(f)(5)(i)(A) of this section shall be equal nor given an approval by the of the feedstocks used to produce
to a volume VRIN and is calculated Administrator for use of a specific D renewable fuel:
according to the following formula: code. (A) ASTM E 870 or ASTM E 711 for
VRIN = EV * Vs If none of the pathways described in gross calorific value (both incorporated
Table 1 to this section apply to a by reference, see 80.1468).
Where: (B) ASTM D 4442 or ASTM D 4444 for
producers operations, and the producer
VRIN = RIN volume, in gallons, for use in has not received approval for the use of moisture content (both incorporated by
determining the number of cellulosic reference, see 80.1468).
a specific D code by the Administrator,
biofuel gallon-RINs that shall be
the party may generate RINs if the fuel (vi) Default values for E.
generated for the batch.
EV = Equivalence value for the batch of from its facility is made from renewable (A) Starch: 7,600 Btu/lb.
renewable fuel per 80.1415. biomass and qualifies for an exemption (B) Sugar: 7,300 Btu/lb.
Vs = Standardized volume of the batch of under 80.1403 from the requirement (C) Vegetable oil: 17,000 Btu/lb.
renewable fuel at 60 F, in gallons, that renewable fuel achieve at least a 20 (D) Waste cooking oil or trap grease:
calculated in accordance with paragraph percent reduction in lifecycle 16,600 Btu/lb.
(f)(8) of this section. greenhouse gas emissions compared to (E) Tallow or fat: 16,200 Btu/lb.
baseline lifecycle greenhouse gas (F) Manure: 6,900 Btu/lb.
(B) The number of gallon-RINs that (G) Woody biomass: 8,400 Btu/lb.
shall be generated for a batch of emissions.
(i) The number of gallon-RINs that (H) Herbaceous biomass: 7,300 Btu/lb.
renewable fuel derived from separated (I) Yard wastes: 2,900 Btu/lb.
food waste as defined in paragraph shall be generated for a batch of
(J) Biogas: 11,000 Btu/lb.
(f)(5)(i)(B) of this section shall be equal renewable fuel that qualifies for an
(K) Food waste: 2,000 Btu/lb.
to a volume VRIN and is calculated exemption from the 20 percent GHG (L) Paper: 7,200 Btu/lb.
according to the following formula: reduction requirements under 80.1403 (M) Crude oil: 19,100 Btu/lb.
shall be equal to a volume calculated (N) Coalbituminous: 12,200 Btu/lb.
VRIN = EV * Vs
according to the following formula: (O) Coalanthracite: 13,300 Btu/lb.
Where:
VRIN = EV * Vs (P) Coallignite or sub-bituminous:
VRIN = RIN volume, in gallons, for use in
determining the number of cellulosic or Where: 7,900 Btu/lb.
advanced biofuel gallon-RINs that shall VRIN = RIN volume, in gallons, for use in (Q) Natural gas: 19,700 Btu/lb.
be generated for the batch. determining the number of gallon-RINs (R) Tires or rubber: 16,000 Btu/lb.
EV = Equivalence value for the batch of that shall be generated for the batch. (S) Plastic: 19,000 Btu/lb.
renewable fuel per 80.1415. EV = Equivalence value for the batch of (8) Standardization of volumes. In
Vs = Standardized volume of the batch of renewable fuel per 80.1415. determining the standardized volume of
renewable fuel at 60 F, in gallons, Vs = Standardized volume of the batch of a batch of renewable fuel for purposes
calculated in accordance with paragraph renewable fuel at 60 F, in gallons, of generating RINs under this paragraph
(f)(8) of this section. calculated in accordance with paragraph (f), the batch volumes shall be adjusted
(f)(8) of this section. to a standard temperature of 60 F.
(v) The number of cellulosic biofuel
gallon-RINs that shall be generated for (ii) A D code of 6 shall be used in the (i) For ethanol, the following formula
the cellulosic portion of a batch of RINs generated under this paragraph shall be used:
renewable fuel derived from separated (f)(6). Vs,e = Va,e * (0.0006301 * T + 1.0378)
MSW as defined in paragraph (f)(5)(i)(C) (7) Determination of feedstock energy Where:
of this section shall be determined content factors.
Vs,e = Standardized volume of ethanol at 60
according to the following formula: (i) For purposes of paragraphs F, in gallons.
(f)(3)(vi) and (f)(4)(i)(A)(2) of this Va,e = Actual volume of ethanol, in gallons.
VRIN = EV * Vs * R
section, producers must specify the T = Actual temperature of the batch, in F.
Where: value for E, the energy content of the
VRIN = RIN volume, in gallons, for use in components of the feedstock that are (ii) For biodiesel (mono-alkyl esters),
determining the number of cellulosic converted to renewable fuel, used in the one of the following two methods for
biofuel gallon-RINs that shall be calculation of the feedstock energy biodiesel temperature standardization to
generated for the batch.
value FE. 60 Fahrenheit (F ) shall be used:
EV = Equivalence value for the batch of (A) Vs,b = Va.b * (-0.00045767 * T +
renewable fuel per 80.1415. (ii) The value for E shall represent the
higher or gross calorific heating value 1.02746025)
Vs = Standardized volume of the batch of
renewable fuel at 60 F, in gallons, for a feedstock on a zero moisture basis. Where:
calculated in accordance with paragraph (iii) Producers must specify the value Vs,b = Standardized volume of biodiesel at 60
(f)(8) of this section. for E for each type of feedstock at least F, in gallons.
R = The calculated non-fossil fraction of the once per calendar year. Va,b = Actual volume of biodiesel, in gallons.
fuel as measured by a carbon-14 dating (iv) A producer must use default T = Actual temperature of the batch, in F.
test method as provided in paragraph values for E as provided in paragraph (B) The standardized volume of
(f)(7)(vi) of this section, or must biodiesel at 60 F, in gallons, as
(vi) The D code that shall be used in determine alternative values for its own calculated from the use of the American
the RINs generated to represent feedstocks according to paragraph Petroleum Institute Refined Products
separated yard waste, food waste, and (f)(7)(v) of this section. Table 6B, as referenced in ASTM D 1250
MSW shall be the D code specified in (v) Producers that do not use a default (incorporated by reference, see
Table 1 to this section, or a D code as value for E must use the following test 80.1468).
approved by the Administrator, which methods, or alternative test methods as (iii) For other renewable fuels, an
corresponds to the pathway that approved by EPA, to determine the appropriate formula commonly
accepted by the industry shall be used Ri1,adj = Adjusted value of R for use in the transport of fuel between the
to standardize the actual volume to 60 generating RINs in month the second injection and withdrawal points; and
F. Formulas used must be reported to month i+1. (B) The volume and heat content of
EPA, and may be determined to be Ri1,calc = Calculated value of R in second biogas injected into the pipeline and the
month i+1 by applying a radiocarbon volume of gas used as transportation
inappropriate. dating test method to a composite
(9) Use of radiocarbon dating test sample of fuel.
fuel are measured by continuous
methods. Ri,est = Estimate of R for the first month i. metering.
(i) Parties may use a radiocarbon (iii) The fuel used for transportation
dating test method for determination of (10)(i) For purposes of this section, purposes is considered produced from
the renewable fraction of a fuel R used electricity and biogas used as renewable biomass only to the extent
to determine VRIN as provided in transportation fuel is considered that:
paragraphs (f)(4) and (f)(5) of this renewable fuel and the producer may (A) The amount of fuel used at the
section. generate RINs if all of the following transportation fueling facility matches
(ii) Parties must use Method B or apply: the amount of fuel derived from
Method C of ASTM D 6866 (A) The fuel is produced from renewable biomass that the producer
(incorporated by reference, see renewable biomass and qualifies for a D contracted to have placed into the
80.1468), or an alternative test method code in Table 1 to this section or has commercial distribution system; and
as approved by EPA. received approval for use of a D code by (B) No other party relied upon the
(iii) For each batch of fuel, the value the Administrator; contracted volume of biogas for the
of R must be based on: (B) The renewable electricity, or creation of RINs.
biogas, is not placed in a commercial (iv) Electricity that is generated by co-
(A) A radiocarbon dating test of the
distribution system along with fuels firing a combination of renewable
batch of fuel produced; or
derived from nonrenewable feedstocks; biomass and fossil fuel may qualify for
(B) A radiocarbon dating test of a
and RINs only for the portion attributable to
composite sample of previously
(C) The fuel producer has entered into the renewable biomass, using the
produced fuel, if all of the following
a written contract for the sale and use procedure described in paragraph (f)(4)
conditions are met:
as transportation fuel of a specific of this section.
(1) Based upon good engineering (12)(i) For purposes of Table 1 to this
judgment, the renewable fraction of the quantity of electricity or biogas.
(ii) Electricity that is generated by co- section, process heat produced from
composite sample must be combustion of gas at a renewable fuel
firing a combination of renewable
representative of the batch of fuel facility is considered derived from
biomass and fossil fuel may generate
produced. biomass if the gas used for process heat
(2) The composite sample is RINs only for the portion attributable to
the renewable biomass portion, using is biogas, and is generated at the facility
comprised of a volume weighted or directly transported to the facility
combination of samples from every the procedure described in paragraph
(f)(4) of this section. and meets all of the following
batch of partially renewable conditions:
(11)(i) For purposes of this section,
transportation fuel produced by the (A) The producer has entered into a
electricity and biogas that is introduced
party over a period not to exceed one written contract for the procurement of
into a commercial distribution system
calendar month, or more frequently if a specific volume of biogas with a
may be considered renewable fuel and
necessary to ensure that the test results specific heat content.
may qualify for RINs if:
are representative of the renewable (B) The volume of biogas was sold to
(A) The fuel is produced from
fraction of the partially renewable fuel. the renewable fuel production facility,
renewable biomass and qualifies for a D
(3) The composite sample must be and to no other facility.
code in Table 1 of this section or has
well mixed prior to testing. (C) The volume of biogas has been
received approval for use of a D code by
(4) A volume of each composite gathered, processed and injected into a
the Administrator;
sample must be retained for a minimum common carrier pipeline and the gas
(B) The fuel producer has entered into
of two years, and be of sufficient volume that is ultimately withdrawn from that
a written contract for the sale of a
to permit two additional tests to be pipeline is withdrawn in a manner and
specific quantity of fuel derived from
conducted. at a time consistent with the transport
renewable biomass sources with a party
(iv) If the party is using the composite of fuel between the injection and
that uses fuel taken from a commercial
sampling approach according to withdrawal points.
distribution system for transportation
paragraph (f)(9)(iii)(B) of this section, (D) The volume and heat content of
purposes, and such fuel has been
the party may estimate the value of R for biogas injected into the pipeline and the
introduced into that commercial
use in generating RINs in the first month volume of gas used as process heat are
distribution system (e.g., pipeline,
if all of the following conditions are measured by continuous metering.
transmission line); and (E) The common carrier pipeline into
met:
(C) The quantity of biogas or which the biogas is placed ultimately
(A) The estimate of R for the first
electricity for which RINs were serves the producers renewable fuel
month is based on information on the
generated was sold to the transportation facility.
composition of the feedstock;
fueling facility and to no other facility. (ii) The process heat produced from
(B) The party calculates R in the
(ii) Biogas that is introduced into a combustion of gas at a renewable fuel
second month based on the application
commercial distribution system may facility described in (f)(12)(i) of this
of a radiocarbon dating test on a
qualify for RINs only for the volume of
composite sample pursuant to section shall not be considered derived

biogas that has been gathered, from biomass if any other party relied
(f)(9)(iii)(B) of this section; and
processed, and injected into a common upon the contracted volume of biogas
(C) The party adjusts the value of R
carrier pipeline: for the creation of RINs.
used to generate RINs in the second
(A) The gas that is ultimately
month using the following formula:
withdrawn from that pipeline for 80.1427 How are RINs used to
Ri1,adj = 2 Ri1,calcRi,est transportation purposes is withdrawn in demonstrate compliance?
Where: a manner and at a time consistent with (a) Renewable Volume Obligations.
(1) Except as specified in paragraph party or renewable fuel exporter for (iii) All other RINs generated pursuant
(b) of this section or 80.1456, each calendar year i, in gallons, pursuant to to 80.1126 are deemed equivalent to
party that is an obligated party under 80.1407 or 80.1430. RINs generated pursuant to 80.1426
80.1406 and is obligated to meet the (iv) Renewable fuel. having D codes of 6.
Renewable Volume Obligations under (SRINNUM)RF,i + (SRINNUM)RF,i-1 = (iv) A RIN generated pursuant to
80.1407, or is an exporter of renewable RVORF,i 80.1126 that was retired pursuant to
fuels that is obligated to meet Where: 80.1129(e) because the associated
Renewable Volume Obligations under volume of fuel was not used as motor
(SRINNUM)RF,i = Sum of all owned gallon-
80.1430, must demonstrate pursuant to RINs that are valid for use in complying vehicle fuel may be reinstated for use in
80.1451(a)(1) that it is retiring for with the renewable fuel RVO, were complying with a 2010 RVO pursuant to
compliance purposes a sufficient generated in year i, and are being applied 80.1429(g).
number of RINs to satisfy the following towards the RVORF,i, in gallons. (5) The value of (SRINNUM)i-1 may
equations: (SRINNUM)RF,i-1 = Sum of all owned gallon- not exceed values determined by the
(i) Cellulosic biofuel. RINs that are valid for use in complying following inequalities except as
with the renewable fuel RVO, were provided in paragraph (a)(7)(iii) of this
(SRINNUM)CB,i + (SRINNUM)CB,i1 =
generated in year i-1, and are being
RVOCB,i applied towards the RVORF,i, in gallons. section and 80.1442(d):
Where: RVORF,i = The Renewable Volume Obligation (SRINNUM)CB,i-1 0.20 * RVOCB,i
(SRINNUM)CB,i = Sum of all owned gallon- for renewable fuel for the obligated party (SRINNUM)BBD,i-1 0.20 * RVOBBD,i
RINs that are valid for use in complying or renewable fuel exporter for calendar (SRINNUM)AB,i-1 0.20 * RVOAB,i
with the cellulosic biofuel RVO, were year i, in gallons, pursuant to 80.1407 (SRINNUM)RF,i-1 0.20 * RVORF,i
generated in year i, and are being applied or 80.1430.
(6) Except as provided in paragraph
towards the RVOCB,i, in gallons. (2) Except as described in paragraph (a)(7) of this section:
(SRINNUM)CB,i-1 = Sum of all owned gallon- (a)(4) of this section, RINs that are valid
RINs that are valid for use in complying (i) RINs may only be used to
for use in complying with each demonstrate compliance with the RVOs
with the cellulosic biofuel RVO, were
generated in year i-1, and are being Renewable Volume Obligation are for the calendar year in which they were
applied towards the RVOCB,i, in gallons. determined by their D codes. generated or the following calendar
RVOCB,i = The Renewable Volume Obligation (i) RINs with a D code of 3 or 7 are year.
for cellulosic biofuel for the obligated valid for compliance with the cellulosic (ii) RINs used to demonstrate
party or renewable fuel exporter for biofuel RVO. compliance in one year cannot be used
calendar year i, in gallons, pursuant to (ii) RINs with a D code of 4 or 7 are to demonstrate compliance in any other
80.1407 or 80.1430. valid for compliance with the biomass- year.
(ii) Biomass-based diesel. Use the based diesel RVO. (7) Biomass-based diesel in 2010.
equation in this paragraph, except as (iii) RINs with a D code of 3, 4, 5, or
(i) Prior to determining compliance
provided in paragraph (a)(7) of this 7 are valid for compliance with the
with the 2010 biomass-based diesel
section. advanced biofuel RVO.
(iv) RINs with a D code of 3, 4, 5, 6, RVO, obligated parties may reduce the
(SRINNUM)BBD,i + (SRINNUM)BBD,i-1 = value of RVOBBD,2010 by an amount
or 7 are valid for compliance with the
RVOBBD,i equal to the sum of all 2008 and 2009
renewable fuel RVO.
Where: (3)(i) Except as provided in paragraph RINs that they used for compliance
(SRINNUM)BBD,i = Sum of all owned gallon- (a)(3)(ii) of this section, a party may use purposes for calendar year 2009 which
RINs that are valid for use in complying the same RIN to demonstrate have a D code of 2 and an RR code of
with the biomass-based diesel RVO, were compliance with more than one RVO so 15 or 17.
generated in year i, and are being applied long as it is valid for compliance with (ii) For calendar year 2010 only, the
towards the RVOBBD,i, in gallons. following equation shall be used to
(SRINNUM)BBD,i-1 = Sum of all owned gallon-
all RVOs to which it is applied.
(ii) A cellulosic diesel RIN with a D determine compliance with the
RINs that are valid for use in complying
with the biomass-based diesel RVO, were code of 7 cannot be used to demonstrate biomass-based diesel RVO instead of the
generated in year i-1, and are being compliance with both a cellulosic equation in paragraph (a)(1)(ii) of this
applied towards the RVOBBD,i, in gallons. biofuel RVO and a biomass-based diesel section:
RVOBBD,i = The Renewable Volume RVO. (SRINNUM)BBD,2010 +
Obligation for biomass-based diesel for (4) Notwithstanding the requirements (SRINNUM)BBD,2009 +
the obligated party or renewable fuel of 80.1428(c) or paragraph (a)(6)(i) of (SRINNUM)BBD,2008 = RVOBBD,2010
exporter for calendar year i after 2010, in this section, for purposes of
gallons, pursuant to 80.1407 or Where:
80.1430. demonstrating compliance for calendar
(SRINNUM)BBD,2010 = Sum of all owned
years 2010 or 2011, RINs generated gallon-RINs that are valid for use in
(iii) Advanced biofuel. pursuant to 80.1126 that have not been complying with the biomass-based diesel
(SRINNUM)AB,i + (SRINNUM)AB,i-1 = used for compliance purposes may be RVO, were generated in year 2010, and
RVOAB,i used for compliance in 2010 or 2011, as are being applied towards the
Where: follows, insofar as permissible pursuant RVOBBD,2010, in gallons.
(SRINNUM)AB,i = Sum of all owned gallon- to paragraphs (a)(5) and (a)(7)(iii) of this (SRINNUM)BBD,2009 = Sum of all owned
RINs that are valid for use in complying section: gallon-RINs that are valid for use in
with the advanced biofuel RVO, were (i) A RIN generated pursuant to complying with the biomass-based diesel
generated in year i, and are being applied 80.1126 with a D code of 2 and an RR RVO, were generated in year 2009, have
towards the RVOAB,i, in gallons. code of 15 or 17 is deemed equivalent not previously been used for compliance
(SRINNUM)AB,i-1 = Sum of all owned gallon- purposes, and are being applied towards
to a RIN generated pursuant to 80.1426 the RVOBBD,2010, in gallons.
RINs that are valid for use in complying
with the advanced biofuel RVO, were
having a D code of 4. (SRINNUM)BBD,2008 = Sum of all owned
generated in year i-1, and are being (ii) A RIN generated pursuant to gallon-RINs that are valid for use in
applied towards the RVOAB,i, in gallons. 80.1126 with a D code of 1 is deemed complying with the biomass-based diesel
RVOAB,i = The Renewable Volume Obligation equivalent to a RIN generated pursuant RVO, were generated in year 2008, have
for advanced biofuel for the obligated to 80.1426 having a D code of 3. not previously been used for compliance
purposes, and are being applied towards Di = RVOi [(SRINNUM)i + document used to transfer ownership of
the RVOBBD,2010, in gallons. (SRINNUM)i-1] the volume of renewable fuel.
RVOBBD,2010 = The Renewable Volume (b) RINs separated from volumes of
Obligation for biomass-based diesel for Where:
renewable fuel.
the obligated party for calendar year Di = The deficit, in gallons, generated in
(1) Separated RIN, for the purposes of
2010, in gallons, pursuant to 80.1407 or calendar year i that must be carried over
80.1430, as adjusted by paragraph to year i+1 if allowed pursuant to this subpart, means a RIN with a K code
(a)(7)(i) of this section. paragraph (b)(1) of this section. of 2 that has been separated from a
RVOi = The Renewable Volume Obligation volume of renewable fuel pursuant to
(iii) The values of (SRINNUM)2008 and 80.1429.
for the obligated party or renewable fuel
(SRINNUM)2009 may not exceed values exporter for calendar year i, in gallons. (2) Any person that has registered
determined by both of the following (SRINNUM)i = Sum of all acquired gallon- pursuant to 80.1450 can own a
inequalities: RINs that were generated in year i and separated RIN.
(SRINNUM)BBD,2008 0.087 * are being applied towards the RVOi, in (3) Separated RINs can be transferred
RVOBBD,2010 gallons. any number of times.
(SRINNUM)BBD,2008 + (SRINNUM)i-1 = Sum of all acquired gallon- (c) RIN expiration. Except as provided
(SRINNUM)BBD,2009 0.20 * RINs that were generated in year i-1 and in 80.1427(a)(7), a RIN is valid for
RVOBBD,2010 are being applied towards the RVOi, in compliance during the calendar year in
gallons.
(8) A party may only use a RIN for which it was generated, or the following
purposes of meeting the requirements of calendar year. Any RIN that is not used
80.1428 General requirements for RIN
paragraph (a)(1) or (a)(7) of this section distribution.
for compliance purposes for the
if that RIN is a separated RIN with a K calendar year in which it was generated,
code of 2 obtained in accordance with (a) RINs assigned to volumes of or for the following calendar year, will
80.1428 and 80.1429. renewable fuel. be considered an expired RIN. Pursuant
(9) The number of gallon-RINs (1) Assigned RIN, for the purposes of to 80.1431(a), an expired RIN that is
associated with a given batch-RIN that this subpart, means a RIN assigned to a used for compliance will be considered
can be used for compliance with the volume of renewable fuel pursuant to an invalid RIN.
RVOs shall be calculated from the 80.1426(e) with a K code of 1. (d) Any batch-RIN can be divided into
following formula: (2) Except as provided in 80.1429, multiple batch-RINs, each representing
RINNUM = EEEEEEEE SSSSSSSS + no person can separate a RIN that has a smaller number of gallon-RINs, if all
1 been assigned to a batch pursuant to of the following conditions are met:
80.1426(e). (1) All RIN components other than
Where:
(3) An assigned RIN cannot be SSSSSSSS and EEEEEEEE are identical
RINNUM = Number of gallon-RINs associated transferred to another person without
with a batch-RIN, where each gallon-RIN for the original parent and newly
represents one gallon of renewable fuel simultaneously transferring a volume of formed daughter RINs.
for compliance purposes. renewable fuel to that same person. (2) The sum of the gallon-RINs
EEEEEEEE = Batch-RIN component (4) No more than 2.5 assigned gallon- associated with the multiple daughter
identifying the last gallon-RIN associated RINs with a K code of 1 can be batch-RINs is equal to the gallon-RINs
with the batch-RIN. transferred to another person with every associated with the parent batch-RIN.
SSSSSSSS = Batch-RIN component gallon of renewable fuel transferred to
identifying the first gallon-RIN that same person. 80.1429 Requirements for separating
associated with the batch-RIN. (5)(i) On each of the dates listed in RINs from volumes of renewable fuel.
(b) Deficit carryovers. paragraph (a)(5)(ii) of this section in any (a)(1) Separation of a RIN from a
(1) An obligated party or an exporter calendar year, the following equation volume of renewable fuel means
of renewable fuel that fails to meet the must be satisfied for assigned RINs and termination of the assignment of the RIN
requirements of paragraph (a)(1) or (a)(7) volumes of renewable fuel owned by a to a volume of renewable fuel.
of this section for calendar year i is person: (2) RINs that have been separated
permitted to carry a deficit into year i+1 from volumes of renewable fuel become
S(RIN)D S(Vsi * 2.5)D
under the following conditions: separated RINs subject to the provisions
(i) The party did not carry a deficit Where: of 80.1428(b).
into calendar year i from calendar year D = Applicable date. (b) A RIN that is assigned to a volume
i-1 for the same RVO. S(RIN)D = Sum of all assigned gallon-RINs of renewable fuel can be separated from
(ii) The party subsequently meets the with a K code of 1 that are owned on that volume only under one of the
requirements of paragraph (a)(1) of this date D. following conditions:
(Vsi)D = Volume i of renewable fuel owned on (1) Except as provided in paragraphs
section for calendar year i+1 and carries date D, standardized to 60 F, in gallons.
no deficit into year i+2 for the same (b)(7) and (b)(9) of this section, a party
RVO. (ii) The applicable dates are March 31, that is an obligated party according to
(iii) For compliance with the biomass- June 30, September 30, and December 80.1406 must separate any RINs that
based diesel RVO in calendar year 2011, 31. have been assigned to a volume of
the deficit which is carried over from (6) Any transfer of ownership of renewable fuel if that party owns that
2010 is no larger than 57% of the partys assigned RINs must be documented on volume.
2010 biomass-based diesel RVO as product transfer documents generated (2) Except as provided in paragraph
determined prior to any adjustment pursuant to 80.1453. (b)(6) of this section, any party that
applied pursuant to paragraph (a)(7)(i) (i) The RIN must be recorded on the owns a volume of renewable fuel must
of this section. product transfer document used to separate any RINs that have been
(iv) The party uses the same transfer ownership of the volume of assigned to that volume once the
compliance approach in year i+1 as it renewable fuel to another person; or volume is blended with gasoline or
did in year i, as provided in (ii) The RIN must be recorded on a diesel to produce a transportation fuel,
80.1406(c)(2). separate product transfer document heating oil, or jet fuel. A party may
(2) A deficit is calculated according to transferred to the same person on the separate up to 2.5 RINs per gallon of
the following formula: same day as the product transfer blended renewable fuel.
(3) Any party that exports a volume of (8) Small refiners and small refineries (g) Any 2009 RINs retired pursuant to
renewable fuel must separate any RINs may only separate RINs that have been 80.1129 because renewable fuel was
that have been assigned to the exported assigned to volumes of renewable fuel used in a non-motor vehicle application,
volume. A party may separate up to 2.5 that the party blends into gasoline or heating oil, or jet fuel may be reinstated
RINs per gallon of exported renewable diesel to produce transportation fuel, by the retiring party for sale or use to
fuel. heating oil, or jet fuel, or that the party demonstrate compliance with a 2010
(4) Any party that produces, imports, used as transportation fuel, heating oil, RVO.
owns, sells, or uses a volume of neat or jet fuel. This paragraph (b)(8) shall
renewable fuel, or a blend of renewable apply only under the following 80.1430 Requirements for exporters of
renewable fuels.
fuel and diesel fuel, must separate any conditions:
RINs that have been assigned to that (i) During the calendar year in which (a) Any party that owns any amount
volume of neat renewable fuel or that the party has received a small refinery of renewable fuel, whether in its neat
blend if: exemption under 80.1441 or a small form or blended with gasoline or diesel,
(i) The party designates the neat refiner exemption under 80.1442; and that is exported from any of the regions
renewable fuel or blend as (ii) The party is not otherwise an described in 80.1426(b) shall acquire
transportation fuel, heating oil, or jet obligated party during the period of sufficient RINs to comply with all
fuel; and time that the small refinery or small applicable Renewable Volume
(ii) The neat renewable fuel or blend refiner exemption is in effect. Obligations under paragraph (b) of this
is used without further blending, in the (9) Except as provided in paragraphs section representing the exported
designated form, as transportation fuel, (b)(2) through (b)(5) and (b)(8) of this renewable fuel.
heating oil, or jet fuel. section, RINs owned by obligated (b) Renewable Volume Obligations.
(5) Any party that produces, imports, parties whose non-export renewable An exporter of renewable fuel shall
owns, sells, or uses a volume of volume obligations are solely related to determine its Renewable Volume
electricity or biogas for which RINs have the addition of blendstocks into a Obligations from the volumes of the
been generated in accordance with volume of finished gasoline, finished renewable fuel exported.
80.1426(f) must separate any RINs that diesel fuel, RBOB, or CBOB, can only be (1) Cellulosic biofuel.
have been assigned to that volume of separated from volumes of renewable RVOCB,i = S(VOLk * EVk)i + DCB,i-1
renewable electricity or biogas if: fuel if the number of gallon-RINs Where:
(i) The party designates the electricity separated in a calendar year are less RVOCB,i = The Renewable Volume Obligation
or biogas as transportation fuel; and than or equal to a limit set as follows: for cellulosic biofuel for the exporter for
(ii) The electricity or biogas is used as (i) For RINs with a D code of 3, the calendar year i, in gallons.
transportation fuel. limit shall be equal to RVOCB. k = A discrete volume of exported renewable
(6) RINs assigned to a volume of (ii) For RINs with a D code of 4, the fuel.
biodiesel (mono-alkyl ester) can only be limit shall be equal to RVOBBD. VOLk = The standardized volume of discrete
separated from that volume pursuant to (iii) For RINs with a D code of 7, the volume k of exported renewable fuel that
paragraph (b)(2) of this section if such limit shall be equal to the larger of the exporter knows or has reason to
biodiesel is blended into diesel fuel at RVOBBD or RVOCB. know is cellulosic biofuel, in gallons,
a concentration of 80 volume percent (iv) For RINs with a D code of 5, the calculated in accordance with
limit shall be equal to 80.1426(f)(8).
biodiesel (mono-alkyl ester) or less.
EVk = The equivalence value associated with
(i) This paragraph (b)(6) shall not RVOABRVOCBRVOBBD.
discrete volume k.
apply to biodiesel owned by obligated (v) For RINs with a D code of 6, the S = Sum involving all volumes of cellulosic
parties or to exported volumes of limit shall be equal to RVORFRVOAB. biofuel exported.
biodiesel. (c) The party responsible for DCB,i-1 = Deficit carryover from the
(ii) This paragraph (b)(6) shall not separating a RIN from a volume of previous year for cellulosic biofuel, in
apply to parties meeting the renewable fuel shall change the K code gallons.
requirements of paragraph (b)(4) of this in the RIN from a value of 1 to a value
(2) Biomass-based diesel.
section. of 2 prior to transferring the RIN to any
(7) For RINs that an obligated party other party. RVOBBD,i = S(VOLk * EVk)i + DBBD,i-1
generates for renewable fuel that has not (d) Upon and after separation of a RIN Where:
been blended into gasoline or diesel to from its associated volume of renewable RVOBBD,i = The Renewable Volume
produce a transportation fuel, heating fuel, the separated RIN must be Obligation for biomass-based diesel for
oil, or jet fuel, the obligated party can accompanied by documentation when the exporter for calendar year i, in
only separate such RINs from volumes transferred to another party pursuant to gallons.
80.1453. k = A discrete volume of exported renewable
of renewable fuel if the number of
(e) Upon and after separation of a RIN fuel.
gallon-RINs separated in a calendar year VOLk = The standardized volume of discrete
are less than or equal to a limit set as from its associated volume of renewable
volume k of exported renewable fuel that
follows: fuel, product transfer documents used to is biodiesel or renewable diesel, or that
(i) For RINs with a D code of 3, the transfer ownership of the volume must the exporter knows or has reason to
limit shall be equal to RVOCB. meet the requirements of 80.1453. know is biomass-based diesel, in gallons,
(ii) For RINs with a D code of 4, the (f) Any party that uses a renewable calculated in accordance with
limit shall be equal to RVOBBD. fuel in any application that is not 80.1426(f)(8).
(iii) For RINs with a D code of 7, the transportation fuel, heating oil, or jet EVk = The equivalence value associated with
limit shall be equal to the larger of fuel, or designates a renewable fuel for discrete volume k.
RVOBBD or RVOCB. use as something other than S = Sum involving all volumes of biomass-
transportation fuel, heating oil, or jet based diesel exported.
(iv) For RINs with a D code of 5, the
DBBD,i-1 = Deficit carryover from the previous
limit shall be equal to fuel, must retire any RINs received with year for biomass-based diesel, in gallons.
RVOABRVOCBRVOBBD. that renewable fuel and report the
(v) For RINs with a D code of 6, the retired RINs in the applicable reports (3) Advanced biofuel.
limit shall be equal to RVORFRVOAB. under 80.1451. RVOAB,i = S(VOLk * EVk)i + DAB,i-1
Where: (1) Information from the supplier of Renewable Volume Obligations at the
RVOAB,i = The Renewable Volume Obligation the blend of the concentration of end of the compliance year.
for advanced biofuel for the exporter for renewable fuel in the blend.
calendar year i, in gallons. (2) Determination of the renewable 80.1432 Reported spillage or disposal of
k = A discrete volume of exported renewable renewable fuel.
portion of the blend using Method B or
fuel. Method C of ASTM D 6866 (a) A reported spillage or disposal
VOLk = The standardized volume of discrete
(incorporated by reference, see under this subpart means a spillage or
volume k of exported renewable fuel that disposal of renewable fuel associated
is biodiesel or renewable diesel, or that 80.1468), or an alternative test method
as approved by the EPA. with a requirement by a federal, state, or
the exporter knows or has reason to local authority to report the spillage or
know is biomass-based diesel, cellulosic (3) Assuming the maximum
concentration of the renewable fuel in disposal.
biofuel, or advanced biofuel, in gallons,
(b) Except as provided in paragraph
calculated in accordance with the blend as allowed by law and/or
80.1426(f)(8). (c) of this section, in the event of a
regulation.
EVk = The equivalence value associated with (f) Each exporter of renewable fuel reported spillage or disposal of any
discrete volume k. volume of renewable fuel, the owner of
must demonstrate compliance with its
S = Sum involving all volumes of advanced the renewable fuel must retire a number
RVOs pursuant to 80.1427.
biofuel exported. of RINs corresponding to the volume of
DAB,i-1 = Deficit carryover from the previous 80.1431 Treatment of invalid RINs. spilled or disposed of renewable fuel
year for advanced biofuel, in gallons. multiplied by its equivalence value.
(a) Invalid RINs.
(4) Renewable fuel. (1) An invalid RIN is a RIN that is any (1) If the equivalence value for the
of the following: spilled or disposed of volume may be
RVORF,i = S(VOLk * EVk)i + DRF,i-1
(i) A duplicate of a valid RIN. determined pursuant to 80.1415 based
Where: on its composition, then the appropriate
(ii) Was based on incorrect volumes or
RVORF,i = The Renewable Volume Obligation volumes that have not been equivalence value shall be used.
for renewable fuel for the exporter for (2) If the equivalence value for a
calendar year i, in gallons.
standardized to 60 F.
(iii) Has expired, as provided in spilled or disposed of volume of
k = A discrete volume of exported renewable renewable fuel cannot be determined,
fuel. 80.1428(c).
(iv) Was based on an incorrect the equivalence value shall be 1.0.
VOLk = The standardized volume of discrete (c) If the owner of a volume of
volume k of any exported renewable equivalence value.
fuel, in gallons, calculated in accordance (v) Deemed invalid under renewable fuel that is spilled or
with 80.1426(f)(8). 80.1467(g). disposed of and reported establishes
EVk = The equivalence value associated with (vi) Does not represent renewable fuel that no RINs were generated to represent
discrete volume k. as defined in 80.1401. the volume, then no RINs shall be
S = Sum involving all volumes of renewable (vii) Was assigned an incorrect D retired.
fuel exported. (d) A RIN that is retired under
code value under 80.1426(f) for the
DRF,i-1 = Deficit carryover from the previous paragraph (b) of this section:
year for renewable fuel, in gallons. associated volume of fuel. (1) Must be reported as a retired RIN
(viii) Was improperly separated
(c) If the exporter knows or has reason in the applicable reports under
pursuant to 80.1429. 80.1451.
to know that a volume of exported (ix) Was otherwise improperly (2) May not be transferred to another
renewable fuel is cellulosic diesel, he generated. person or used by any obligated party to
must treat the exported volume as either (2) In the event that the same RIN is demonstrate compliance with the
cellulosic biofuel or biomass-based transferred to two or more parties, all partys Renewable Volume Obligations.
diesel when determining his Renewable such RINs are deemed invalid, unless
Volume Obligations pursuant to EPA in its sole discretion determines 80.143380.1439 [Reserved]
paragraph (b) of this section. that some portion of these RINs is valid.
(d) For the purposes of calculating the 80.1440 What are the provisions for
(b) In the case of RINs that are invalid,
blenders who handle and blend less than
Renewable Volume Obligations: the following provisions apply: 125,000 gallons of renewable fuel per year?
(1) If the equivalence value for a (1) Upon determination by any party
volume of exported renewable fuel can (a) Renewable fuel blenders who
that RINs owned are invalid, the party
be determined pursuant to 80.1415 handle and blend less than 125,000
must keep copies and adjust its records,
based on its composition, then the gallons of renewable fuel per year, and
reports, and compliance calculations in
appropriate equivalence value shall be who do not have Renewable Volume
which the invalid RINs were used. The
Obligations, are permitted to delegate
used in the calculation of the exporters party must retire the invalid RINs in the
their RIN-related responsibilities to the
Renewable Volume Obligations under applicable RIN transaction reports
party directly upstream of them who
paragraph (b) of this section. under 80.1451(c)(2) for the quarter in supplied the renewable fuel for
(2) If the category of the exported which the RINs were determined to be blending.
renewable fuel is known to be biomass- invalid. (b) The RIN-related responsibilities
based diesel but the composition is (2) Invalid RINs cannot be used to that may be delegated directly upstream
unknown, the value of EVk shall be 1.5. achieve compliance with the Renewable include all of the following:
(3) If neither the category nor Volume Obligations of an obligated (1) The RIN separation requirements
composition of a volume of exported party or exporter, regardless of the of 80.1429.
renewable fuel can be determined, the partys good faith belief that the RINs (2) The reporting requirements of
value of EVk shall be 1.0. were valid at the time they were 80.1451.
(e) For renewable fuels that are in the acquired. (3) The recordkeeping requirements of
form of a blend with gasoline or diesel (3) Any valid RINs remaining after 80.1454.
at the time of export, the exporter shall invalid RINs are retired must first be (4) The attest engagement
determine the volume of exported applied to correct the transfer of invalid requirements of 80.1464.
renewable fuel based on one of the RINs to another party before applying (c) For upstream delegation of RIN-
following: the valid RINs to meet the partys related responsibilities, both parties
must agree on the delegation, and a do not need to resubmit a small refinery years if a study by the Secretary of
quarterly written statement signed by verification letter under this subpart M. Energy determines that compliance with
both parties must be included with the This paragraph (a) does not supersede the requirements of this subpart would
reporting partys reports under 80.1141. impose a disproportionate economic
80.1451. (b)(1) A refiner owning a small hardship on a small refinery.
(1) Both parties must keep copies of refinery must submit a verification letter (2) A refiner may petition the
the signed quarterly written statement to EPA containing all of the following Administrator for an extension of its
agreeing to the upward delegation for 5 information: small refinery exemption, based on
years. (i) The annual average aggregate daily disproportionate economic hardship, at
(2) Parties delegating their RIN crude oil throughput for the period any time.
responsibilities upward shall keep January 1, 2006 through December 31, (i) A petition for an extension of the
copies of their registration forms as 2006 (as determined by dividing the small refinery exemption must specify
submitted to EPA. aggregate throughput for the calendar the factors that demonstrate a
(3) If EPA finds that a renewable fuel year by the number 365). disproportionate economic hardship
blender improperly delegated its RIN- (ii) A letter signed by the president, and must provide a detailed discussion
related responsibilities under this chief operating or chief executive officer regarding the hardship the refinery
subpart M, the blender will be held of the company, or his/her designee, would face in producing transportation
accountable for any RINs separated and stating that the information contained in fuel meeting the requirements of
will be subject to all RIN-related the letter is true to the best of his/her 80.1405 and the date the refiner
responsibilities under this subpart. knowledge, and that the refinery was anticipates that compliance with the
(d) Renewable fuel blenders who small as of December 31, 2006. requirements can reasonably be
handle and blend less than 125,000 (iii) Name, address, phone number, achieved at the small refinery.
gallons of renewable fuel per year and facsimile number, and e-mail address of (ii) The Administrator shall act on
delegate their RIN-related a corporate contact person. such a petition not later than 90 days
responsibilities under paragraph (b) of (2) Verification letters must be
after the date of receipt of the petition.
this section must register pursuant to submitted by July 1, 2010 to one of the
(f) At any time, a refiner with a small
80.1450(e). addresses listed in paragraph (h) of this
refinery exemption under paragraph (a)
(e) Renewable fuel blenders who section.
(3) For foreign refiners the small of this section may waive that
handle and blend less than 125,000 exemption upon notification to EPA.
gallons of renewable fuel per year and refinery exemption shall be effective
upon approval, by EPA, of a small (1) A refiners notice to EPA that it
who do not opt to delegate their RIN- intends to waive its small refinery
related responsibilities will be subject to refinery application. The application
must contain all of the elements exemption must be received by
all requirements stated in paragraph (b) November 1 to be effective in the next
of this section, and all other applicable required for small refinery verification
letters (as specified in paragraph (b)(1) compliance year.
requirements of this subpart M. (2) The waiver will be effective
of this section), must satisfy the
80.1441 Small refinery exemption. provisions of 80.1465(f) through (i) beginning on January 1 of the following
(a)(1) Transportation fuel produced at and (o), and must be submitted by July calendar year, at which point the
a refinery by a refiner, or foreign refiner 1, 2010 to one of the addresses listed in transportation fuel produced at that
(as defined at 80.1465(a)), is exempt paragraph (h) of this section. refinery will be subject to the renewable
from January 1, 2010 through December (4) Small refinery verification letters fuels standard of 80.1405 and the
31, 2010 from the renewable fuel are not required for those refiners who owner or operator of the refinery shall
standards of 80.1405, and the owner or have already submitted a complete be subject to all other requirements that
operator of the refinery, or foreign verification letter under subpart K of apply to obligated parties under this
refinery, is exempt from the this part 80. Verification letters Subpart M.
requirements that apply to obligated submitted under subpart K prior to July (3) The waiver notice must be sent to
parties under this subpart M for fuel 1, 2010 that satisfy the requirements of EPA at one of the addresses listed in
produced at the refinery if the refinery subpart K shall be deemed to satisfy the paragraph (h) of this section.
meets the definition of a small refinery requirements for verification letters (g) A refiner that acquires a refinery
under 80.1401 for calendar year 2006. under this subpart M. from either an approved small refiner
(2) The exemption of paragraph (a)(1) (c) If EPA finds that a refiner provided (as defined under 80.1442(a)) or
of this section shall apply unless a false or inaccurate information another refiner with an approved small
refiner chooses to waive this exemption regarding a refinerys crude throughput refinery exemption under paragraph (a)
(as described in paragraph (f) of this (pursuant to paragraph (b)(1)(i) of this of this section shall notify EPA in
section), or the exemption is extended section) in its small refinery verification writing no later than 20 days following
(as described in paragraph (e) of this letter, the exemption will be void as of the acquisition.
section). the effective date of these regulations. (h) Verification letters under
(3) For the purposes of this section, (d) If a refiner is complying on an paragraph (b) of this section, petitions
the term refiner shall include foreign aggregate basis for multiple refineries, for small refinery hardship extensions
refiners. any such refiner may exclude from the under paragraph (e) of this section, and
(4) This exemption shall only apply to calculation of its Renewable Volume small refinery exemption waiver notices
refineries that process crude oil through Obligations (under 80.1407) under paragraph (f) of this section shall
refinery processing units. transportation fuel from any refinery be sent to one of the following
(5) The small refinery exemption is receiving the small refinery exemption addresses:
effective immediately, except as under paragraph (a) of this section. (1) For US mail: U.S. EPA, Attn: RFS
specified in paragraph (b)(3) of this (e)(1) The exemption period in Program, 6406J, 1200 Pennsylvania
section. paragraph (a) of this section shall be Avenue, NW., Washington, DC 20460.
(6) Refiners who own refineries that extended by the Administrator for a (2) For overnight or courier services:
qualified as small under 40 CFR 80.1141 period of not less than two additional U.S. EPA, Attn: RFS Program, 6406J,
1310 L Street, NW., 6th floor, the Energy Information Administration (2) The small refiner exemption shall
Washington, DC 20005. (202) 3439038. (EIA) of the U.S. Department of Energy apply to an approved small refiner
(DOE), for the period January 1, 2006 unless that refiner chooses to waive this
80.1442 What are the provisions for through December 31, 2006. The exemption (as described in paragraph
small refiners under the RFS program?
information submitted to EIA is (d) of this section).
(a)(1) To qualify as a small refiner presumed to be correct. In cases where (d)(1) A refiner with approved small
under this section, a refiner must meet a company disagrees with this refiner status may, at any time, waive
all of the following criteria: information, the company may petition the small refiner exemption under
(i) The refiner produced EPA with appropriate data to correct the paragraph (c) of this section upon
transportation fuel at its refineries by record when the company submits its notification to EPA.
processing crude oil through refinery application. (2) A refiners notice to EPA that it
processing units from January 1, 2006 (vii) The verification letter must be intends to waive the small refiner
through December 31, 2006. signed by the president, chief operating exemption must be received by
(ii) The refiner employed an average or chief executive officer of the November 1 of a given year in order for
of no more than 1,500 people, based on company, or his/her designee, stating the waiver to be effective for the
the average number of employees for all that the information is true to the best following calendar year. The waiver will
pay periods for calendar year 2006 for of his/her knowledge, and that the be effective beginning on January 1 of
all subsidiary companies, all parent company owned the refinery as of the following calendar year, at which
companies, all subsidiaries of the parent December 31, 2006. point the refiner will be subject to the
companies, and all joint venture (viii) Name, address, phone number, renewable fuel standards of 80.1405
partners. facsimile number, and e-mail address of and the requirements that apply to
(iii) The refiner had a corporate- a corporate contact person. obligated parties under this subpart.
average crude oil capacity less than or (3) In the case of a refiner who
(3) The waiver must be sent to EPA
equal to 155,000 barrels per calendar acquires or reactivates a refinery that
at one of the addresses listed in
day (bpcd) for 2006. was shutdown or non-operational
paragraph (i) of this section.
(2) For the purposes of this section, between January 1, 2005 and January 1,
the term refiner shall include foreign (e) Refiners who qualify as small
2006, the information required in
refiners. refiners under this section and
paragraph (b)(2) of this section must be
(3) Refiners who qualified as small subsequently fail to meet all of the
provided for the time period since the
under 40 CFR 80.1142 do not need to qualifying criteria as set out in
refiner acquired or reactivated the
reapply for small refiner status under paragraph (a) of this section are
refinery.
this subpart M. This paragraph (a) does (4) EPA will notify a refiner of its disqualified as small refiners of January
not supersede 80.1142. approval or disapproval of the 1 of the next calendar year, except as
(b)(1) The small refiner exemption is application for small refiner status by provided under paragraphs (d) and
effective immediately, except as letter. (e)(2) of this section.
provided in paragraph (b)(5) of this (5) For foreign refiners the small (1) In the event such disqualification
section. refiner exemption shall be effective occurs, the refiner shall notify EPA in
(2) Refiners who qualify for the small upon approval, by EPA, of a small writing no later than 20 days following
refiner exemption under paragraph (a) refiner application. The application the disqualifying event.
of this section must submit a must contain all of the elements (2) Disqualification under this
verification letter (and any other required for small refiner verification paragraph (e) shall not apply in the case
relevant information) to EPA by July 1, letters (as specified in paragraph (b)(2) of a merger between two approved small
2010. The small refiner verification of this section), must satisfy the refiners.
letter must include all of the following provisions of 80.1465(f) through (h) (f) If EPA finds that a refiner provided
information for the refiner and for all and (o), must demonstrate compliance false or inaccurate information in its
subsidiary companies, all parent with the crude oil capacity criterion of small refiner status verification letter
companies, all subsidiaries of the parent paragraph (a)(1)(iii) of this section, and under this subpart M, the refiner will be
companies, and all joint venture must be submitted by July 1, 2010 to disqualified as a small refiner as of the
partners: one of the addresses listed in paragraph effective date of this subpart.
(i) A listing of the name and address (i) of this section. (g) Any refiner that acquires a refinery
of each company location where any (6) Small refiner verification letters from another refiner with approved
employee worked for the period January submitted under subpart K ( 80.1142) small refiner status under paragraph (a)
1, 2006 through December 31, 2006. prior to July 1, 2010 that satisfy the of this section shall notify EPA in
(ii) The average number of employees requirements of subpart K shall be writing no later than 20 days following
at each location based on the number of deemed to satisfy the requirements for the acquisition.
employees for each pay period for the small refiner verification letters under (h) Extensions of the small refiner
period January 1, 2006 through this subpart M. temporary exemption.
December 31, 2006. (c) Small refiner temporary (1) A small refiner may apply for an
(iii) The type of business activities exemption. extension of the temporary exemption of
carried out at each location. (1) Transportation fuel produced by paragraph (c)(1) of this section based on
(iv) For joint ventures, the total an approved small refiner, or foreign a showing of all the following:
number of employees includes the small refiner (as defined at 80.1465(a)), (i) Circumstances exist that impose
combined employee count of all is exempt from January 1, 2010 through disproportionate economic hardship on
corporate entities in the venture. December 31, 2010 from the renewable the refiner and significantly affects the
(v) For government-owned refiners, fuel standards of 80.1405 and the refiners ability to comply with the RFS
the total employee count includes all requirements that apply to obligated standards.
government employees. parties under this subpart if the refiner (ii) The refiner has made best efforts
(vi) The total corporate crude oil or foreign refiner meets all the criteria to comply with the requirements of this
capacity of each refinery as reported to of paragraph (a)(1) of this section. subpart.
(2) A refiner must apply, and be (d)(1) A petition submitted under this (iv) Changes to the facility that would
approved, for small refiner status under section must be received by EPA by raise or lower emissions of any
this section. November 1 for the state or territory to greenhouse gases from the facility.
(3) A small refiners hardship be included in the RFS program in the (5) For expanded production capacity
application must include all the next calendar year. that is planned or underway at each
following information: (2) A petition submitted under this existing facility, or new production
(i) A plan demonstrating how the section should be sent to either of the facilities that are planned or underway,
refiner will comply with the following addresses: information on all the following, as
requirements of 80.1405 (and all other (i) For US Mail: U.S. EPA, Attn: RFS available:
requirements of this subpart applicable Program, 6406J, 1200 Pennsylvania (i) Strategic planning.
to obligated parties), as expeditiously as Avenue, NW., Washington, DC 20460. (ii) Planning and front-end
possible. (ii) For overnight or courier services: engineering.
(ii) A detailed description of the U.S. EPA, Attn: RFS Program, 6406J, (iii) Detailed engineering and
refinery configuration and operations 1310 L Street, NW., 6th floor, permitting.
including, at a minimum, all the Washington, DC 20005. (202) 3439038. (iv) Procurement and construction.
following information: (e) Upon approval of the petition by (v) Commissioning and startup.
(A) The refinerys total crude the Administrator: (6) Whether capital commitments
capacity. (1) EPA shall calculate the standards have been made or are projected to be
(B) Total crude capacity of any other for the following year, including the made.
refineries owned by the same entity. total gasoline and diesel fuel volume for (b) The information listed in
(C) Total volume of gasoline and the state or territory in question. paragraph (a) of this section shall
diesel produced at the refinery. (2) Beginning on January 1 of the next include the reporting partys best
(D) Detailed descriptions of efforts to calendar year, all gasoline and diesel estimates for the five following calendar
comply. fuel refiners and importers in the state years.
(E) Bond rating of the entity that owns or territory for which a petition has been (c) Production outlook reports must
the refinery. approved shall be obligated parties as provide an update of the progress in
(F) Estimated investment needed to defined in 80.1406. each of the areas listed in paragraph (a)
comply with the requirements of this (3) Beginning on January 1 of the next of this section in comparison to
subpart M. calendar year, all renewable fuel information provided in previous year
(4) A small refiner shall notify EPA in producers in the state or territory for production outlook reports.
writing of any changes to its situation which a petition has been approved (d) Production outlook reports shall
between approval of the extension shall, pursuant to 80.1426(a)(2), be be sent to one of the following
application and the end of its approved required to generate RINs and comply addresses:
extension period. with other requirements of this subpart (1) For U.S. Mail: U.S. EPA, Attn: RFS
(5) EPA may impose reasonable M that are applicable to producers of ProgramProduction Outlook Reports,
conditions on extensions of the renewable fuel. 6406J, 1200 Pennsylvania Avenue, NW.,
temporary exemption, including Washington, DC 20460.
reducing the length of such an 80.144480.1448 [Reserved] (2) For overnight or courier services:
extension, if conditions or situations U.S. EPA, Attn: RFS Program
80.1449 What are the Production Outlook
change between approval of the Production Outlook Reports, 6406J,
Report requirements?
application and the end of the approved 1310 L Street, NW., 6th floor,
extension period. (a) A registered renewable fuel Washington, DC 20005; (202) 3439038.
(i) Small refiner status verification producer or importer, for each of its (e) All production outlook reports
letters, small refiner exemption waivers, facilities, must submit all of the required under this section shall be
or applications for extensions of the following information, as applicable, to submitted on forms and following
small refiner temporary exemption EPA by March 31 of each year procedures prescribed by the
under this section must be sent to one (September 1 for the report due in Administrator.
of the following addresses: 2010):
(1) For US Mail: U.S. EPA, Attn: RFS (1) The type, or types, of renewable 80.1450 What are the registration
fuel expected to be produced or requirements under the RFS program?
Program, 6406J, 1200 Pennsylvania
Avenue, NW., Washington, DC 20460. imported at each facility owned by the (a) Obligated Parties and Exporters.
(2) For overnight or courier services: renewable fuel producer or importer. Any obligated party described in
U.S. EPA, Attn: RFS Program, 6406J, (2) The volume of each type of 80.1406, and any exporter of
1310 L Street, NW., 6th floor, renewable fuel expected to be produced renewable fuel described in 80.1430,
Washington, DC 20005. (202) 3439038. or imported at each facility. must provide EPA with the information
(3) The number of RINs expected to be specified for registration under 80.76,
80.1443 What are the opt-in provisions generated by the renewable fuel if such information has not already been
for noncontiguous states and territories? producer or importer for each type of provided under the provisions of this
(a) Alaska or a United States territory renewable fuel. part. An obligated party or an exporter
may petition the Administrator to opt- (4) Information about all the of renewable fuel must receive EPA-
in to the program requirements of this following: issued identification numbers prior to
subpart. (i) Existing and planned production engaging in any transaction involving
(b) The Administrator will approve capacity. RINs. Registration information may be
the petition if it meets the provisions of (ii) Long-range plans for expansion of submitted to EPA at any time after
paragraphs (c) and (d) of this section. production capacity at existing facilities publication of this rule in the Federal
(c) The petition must be signed by the or construction of new facilities. Register, but must be submitted and
Governor of the state or his authorized (iii) Feedstocks and production accepted by EPA by July 1, 2010, or 60
representative (or the equivalent official processes to be used at each production days prior to RIN ownership, whichever
of the territory). facility. date comes later.
(b) Producers. Any RIN-generating December 31, 2009 for facilities (A) The location of the municipal
foreign or domestic producer of described in 80.1403(d). waste facility from which the separated
renewable fuel or any foreign producer (D) Copies of documents food and yard waste is collected.
that sells renewable fuel for RIN demonstrating the facilitys actual peak (B) A plan providing ongoing
generation by a United States importer capacity as defined in 80.1401(a)(3) if verification that there is separation of
must provide EPA the information the maximum rated annual volume recyclable paper, cardboard, plastics,
specified under 80.76 if such output of renewable fuel is not specified rubber, textiles, metals, and glass wastes
information has not already been in any applicable air permits issued by to the extent reasonably practicable and
provided under the provisions of this the U.S. Environmental Protection which documents the following:
part, and must receive EPA-issued Agency, state, local air pollution control (1) Extent and nature of recycling that
company and facility identification agencies, or foreign governmental occurred prior to receipt of the waste
numbers prior to the generation of any agencies. material by the renewable fuel producer;
RINs for their fuel. All the following (E) The date that construction (2) Identification of available
registration information may be commences, along with evidence recycling technology and practices that
submitted to EPA at any time after demonstrating that construction are appropriate for removing recycling
promulgation of this rule in the Federal commenced as defined in materials from the waste stream; and
Register, but must be submitted and 80.1403(a)(4) including, but not (3) Identification of the technology or
accepted by EPA by July 1, 2010, or 60 limited to, contracts with construction practices selected including an
days prior to the generation of RINs, and other companies. explanation for such selection, and
whichever date comes later, subject to (vi) Records relevant to generation of reasons why other technologies or
this subpart: RINs from: practices were not.
(1) A description of the types of (A) Producers providing biogas, or (C) Contracts relevant to materials
renewable fuels that the producer renewable electricity to transportation recycled from municipal waste streams
intends to produce at the facility and fueling facilities as described in as described in 80.1426(f)(5)(iii).
that the facility is capable of producing 80.1426(f)(10); (D) Certification by the producer that
without significant modifications to the (B) Producers providing biogas, or recycling is conducted in a manner
existing facility. For each type of renewable electricity to transportation consistent with goals and requirements
renewable fuel, the renewable fuel fueling facilities via commercial of applicable State and local laws
producer shall also provide all the distribution systems as described in relating to recycling and waste
following: 80.1426(f)(11); and management.
(i) A list of all the feedstocks the (C) Producers using biogas for process
(2) An independent third party
facility is capable of utilizing without heat in the production of renewable fuel
engineering review and written report
significant modification to the existing as described in 80.1426(f)(12).
(vii)(A) For a producer of renewable and verification of the information
facility. provided pursuant to paragraph (b)(1) of
fuel made from separated yard waste per
(ii) A description of the facilitys this section. The report and verification
80.1426(f)(5)(i)(A):
renewable fuel production processes. (1) The location of any municipal shall be based upon a site visit and
(iii) The type of co-products produced waste facility or other facility from review of relevant documents and shall
with each type of renewable fuel. which the waste stream consisting separately identify each item required
(iv) A list of the facilitys process solely of separated yard waste is by paragraph (b)(1) of this section,
energy fuel types and locations from collected; and describe how the independent third
which the fuel was produced or (2) A plan documenting how the party evaluated the accuracy of the
extracted. waste will be collected and for ongoing information provided, state whether the
(v) For facilities described in verification that such waste consists independent third party agrees with the
80.1403(c) and (d): only of yard waste and kept separate information provided, and identify any
(A) The facilitys baseline volume as since generation from other waste exceptions between the independent
defined in 80.1403(a)(1). materials, and incidental other third partys findings and the
(B) The facilitys renewable fuel components (e.g., paper and plastics). information provided.
production capacity as specified in (B) For a producer of renewable fuel (i) The verifications required under
applicable air permits issued by the U.S. made from separated food waste per this section must be conducted by:
Environmental Protection Agency, state, 80.1426(f)(5)(i)(B): (A) A Professional Chemical Engineer
local air pollution control agencies, or (1) The location of any municipal who is based in the United States and
foreign governmental agencies and that waste facility or other facility from is licensed by an appropriate state
govern the construction and/or which the waste stream consisting agency for a domestic production
operation of the renewable fuel facility: solely of separated food waste is facility.
(1) Issued or revised no later than collected; and (B) An independent third party who
December 19, 2007 for facilities (2) A plan documenting how the is a licensed professional engineer or
described in 80.1403(c). waste will be collected, how the foreign equivalent who works in the
(2) Issued or revised no later than cellulosic and non-cellulosic portions of chemical engineering field for a foreign
December 31, 2009 for facilities the waste will be quantified, and for production facility.
described in 80.1403(d). ongoing verification that such waste (ii) To be considered an independent
(C) Copies of applicable air permits consists only of food waste kept third party under this paragraph (b)(2):
issued by the U.S. Environmental separate since generation from other (A) The third party shall not be
Protection Agency, state, local air waste materials, containing only operated by the renewable fuel producer
pollution control agencies, or foreign incidental other components (e.g., paper or any subsidiary or employee of the
governmental agencies, that provide and plastics). renewable fuel producer.
evidence that such permits were issued (viii) For a producer of renewable fuel (B) The third party shall be free from
prior to December 19, 2007 for facilities made from separated municipal solid any interest in the renewable fuel
described in 80.1403(c), and prior to waste per 80.1426(f)(5)(i)(C): producers business.
(C) The renewable fuel producer shall assigned RINs or generating any RINs (g) Registration shall be on forms, and
be free from any interest in the third for renewable fuel, whichever date following policies, established by the
partys business. comes later. Administrator.
(D) Use of a third party that is (d) Registration updates.
debarred, suspended, or proposed for (1) Any producer of renewable fuel 80.1451 What are the reporting
who makes changes to his facility that requirements under the RFS program?
debarment pursuant to the Government-
wide Debarment and Suspension will qualify his renewable fuel for a (a) Obligated parties and exporters.
regulations, 40 CFR part 32, or the renewable fuel category or D code as Any obligated party described in
Debarment, Suspension and Ineligibility defined in 80.1425(g) that is not 80.1406 or exporter of renewable fuel
provisions of the Federal Acquisition reflected in the producers registration described in 80.1430 must submit to
Regulations, 48 CFR, part 9, subpart 9.4, information on file with EPA must EPA reports according to the schedule,
shall be deemed noncompliance with update his registration information and and containing all the information, that
the requirements of this section. submit a copy of an updated is set forth in this paragraph (a).
(E) The third party must provide to independent engineering review at least (1) Annual compliance reports for the
EPA documentation of his or her 60 days prior to producing the new type previous compliance period shall be
qualifications as part of the engineering of renewable fuel. submitted by February 28 of each year
review, including proof of appropriate (2) Any producer of renewable fuel and shall include all of the following
professional license or foreign who makes any other changes to a information:
equivalent. facility that do not affect the renewable (i) The obligated partys or exporters
(iii) The independent third party shall fuel category for which the producer is name.
retain all records pertaining to the registered per paragraph (b) of this (ii) The EPA company registration
verification required under this section section must update his registration number.
for a period of five years from the date information 7 days prior to the change. (iii) Whether the domestic refiner, as
of creation and shall deliver such (3) All producers of renewable fuel defined in 80.1406, is complying on a
records to the Administrator upon must update registration information corporate (aggregate) or facility-by-
request. and submit a copy of an updated facility basis.
(iv) The renewable fuel producer must independent engineering review every 3 (iv) The EPA facility registration
retain records of the review and years after initial registration. In number, if complying on a facility-by-
verification, as required in addition to conducting the engineering facility basis.
80.1454(b)(6). review and written report and
(v) The production volume and
(3) A Fuel Supply Plan that includes verification required by paragraph (b)(2)
import volume of all of the products
all the following information: of this section, the updated independent
listed in 80.1407(c) and (e) for the
(i) Name of source of each and every engineering review shall include a
reporting year.
fuel that the renewable fuel producer detailed review of the renewable fuel
producers calculations used to (vi) The RVOs, as defined in
intends to be co-fired or used in a fuel 80.1427(a) for obligated parties and
blend. determine VRIN of a representative
sample of batches of each type of 80.1430(b) for exporters of renewable
(ii) Anticipated proportion of each
renewable fuel produced since the last fuel, for the reporting year.
fuel in the mix or in the fuel blend.
(iii) Anticipated net heat content of registration. The representative sample (vii) Any deficit RVOs carried over
each, including any expected seasonal shall be selected in accordance with the from the previous year.
variations, such as those due to sample size guidelines set forth at (viii) The total current-year RINs by
moisture content or wood species. 80.127. category of renewable fuel, as those
(iv) Seasonal variation, if any, of the (e) Any party who owns RINs, intends fuels are defined in 80.1401 (i.e.,
fuel mix or blend. to own RINs, or intends to allow another cellulosic biofuel, biomass-based diesel,
(v) An affidavit from the biogas party to separate RINs as per 80.1440, advanced biofuel, renewable fuel, and
supplier stating its intent to supply but who is not covered by paragraphs cellulosic diesel), retired for
biogas to the renewable fuel producer, (a), (b), or (c) of this section, must compliance.
the quantity and energy content of the provide EPA the information specified (ix) The total prior-year RINs by
biogas that it intends to provide to the under 80.76, if such information has renewable fuel category, as those fuels
renewable fuel producer, and a not already been provided under the are defined in 80.1401, retired for
statement that this volume of biogas will provisions of this part and must receive compliance.
not be used for the creation of a an EPA-issued company identification (x) The total cellulosic biofuel waiver
Renewable Energy Credit, or of any number prior to owning any RINs. credits used to meet the partys
other type of environmental or energy Registration information may be cellulosic biofuel RVO.
attribute or credit. submitted to EPA at any time after (xi) A list of all RINs retired for
(c) Importers. Importers of renewable promulgation of this rule in the Federal compliance in the reporting year.
fuel must provide EPA the information Register, but must be submitted at least (A) RIN information provided by the
specified under 80.76, if such 30 days prior to RIN ownership. EPA Moderated Transaction System
information has not already been (f) To aid EPA in verifying claims that (EMTS) that is retired to meet
provided under the provisions of this a facility qualifies for an exemption compliance conveyed via the EMTS as
part and must receive an EPA-issued described in 80.1403(c) or (d), per 80.1452.
company identification number prior to registrations for such facilities must be (B) [Reserved]
generating or owning RINs. Registration submitted by July 1, 2013. EPA may in (xii) Any deficit RVO(s) carried into
information may be submitted to EPA at its sole discretion waive this the subsequent year.
any time after promulgation of this rule requirement if it determines that the (xiii) Any additional information that
in the Federal Register, but must be information submitted in any later the Administrator may require.
submitted and accepted by EPA by July registration can be verified by EPA in (2) The RIN transaction reports
1, 2010, or 60 days prior to an importer the same manner as would have been required under paragraph (c)(1) of this
importing any renewable fuel with possible with a timely submission. section.
(3) The quarterly RIN activity reports described in 80.1426(f)(10) and (11), (G) For a RIN purchase or sale, the
required under paragraph (c)(2) of this and producers of renewable fuel that trading partners EPA company
section. use biogas for process heat as described registration number. For all other
(4) Reports required under this in 80.1426(f)(12), shall report the transactions, the submitting partys EPA
paragraph (a) must be signed and energy content produced and supplied company registration number.
certified as meeting all the applicable to the transportation fueling facility, in (H) RIN subject to the transaction.
requirements of this subpart by the units of energy (for example, MMBtu or (I) For a RIN purchase or sale, the per
owner or a responsible corporate officer MW) based on metering of gas volume gallon RIN price and/or the per gallon
of the obligated party or exporter. or electricity. And the name and EPA price of renewable fuel price with RINs
(b) Renewable fuel producers company registration number of the included.
(domestic and foreign) and importers. transportation fueling facility. (J) The reason code for retiring RINs,
Any domestic producer or importer of (Q) Producers of renewable fuel that separating RINs, buying RINs, or selling
renewable fuel who generates RINs, or use biogas for process heat as described RINs.
foreign renewable fuel producer who in 80.1426(f)(12), shall identify the (K) Any additional information that
generates RINs, must submit to EPA supplier of the biogas and report the the Administrator may require.
reports according to the schedule, and energy content produced and supplied (2) RIN activity reports shall be
containing all the information, that is to the renewable fuel facility, in MMBtu submitted to EPA according to the
set forth in this paragraph (b). based on metering of gas volume. schedule specified in paragraph (f)(2) of
(1)(i) For RINs generated beginning on (R) Producers of renewable fuel made this section. Each report shall
July 1, 2010, RIN generation reports for from municipal solid waste as described summarize RIN activities for the
each facility owned by the renewable in 80.1426(f)(5)(i)(C), shall report the reporting period, separately for RINs
fuel producer or importer shall be amount of paper, cardboard, plastics, separated from a renewable fuel volume
submitted according to the schedule rubber, textiles, metals, and glass and RINs assigned to a renewable fuel
specified in paragraph (f)(2) of this separated from municipal solid waste volume. The quarterly RIN activity
section. for recycling. Reporting shall be in units reports shall include all of the following
(ii) The RIN generation reports shall of weight. information:
include all the following information for (S) Any additional information the (i) The submitting partys name.
each batch of renewable fuel produced Administrator may require. (ii) The submitting partys EPA
or imported, where batch means a (2) The RIN transaction reports company registration number.
discrete quantity of renewable fuel required under paragraph (c)(1) of this (iii) The number of current-year RINs
produced or imported and assigned a section. owned at the start of the quarter.
unique batch-RIN per 80.1426(d): (3) The RIN activity reports required (iv) The number of prior-year RINs
(A) The RIN generators name. under paragraph (c)(2) of this section. owned at the start of the quarter.
(B) The RIN generators EPA company (4) Reports required under this (v) The total current-year RINs
registration number. paragraph (b) must be signed and purchased.
(C) The renewable fuel producer EPA certified as meeting all the applicable (vi) The total prior-year RINs
facility registration number. requirements of this subpart by the purchased.
(D) The importer EPA facility owner or a responsible corporate officer (vii) The total current-year RINs sold.
registration number and foreign of the renewable fuel producer or (viii) The total prior-year RINs sold.
renewable producer company importer. (ix) The total current-year RINs
registration number, if applicable. (c) All RIN-owning parties. Any party, retired.
(E) The applicable reporting period. including any party specified in (x) The total prior-year RINs retired.
(F) The quantity of RINs generated for paragraphs (a) and (b) of this section, (xi) The number of current-year RINs
each batch according to 80.1426. that owns RINs during a reporting owned at the end of the quarter.
(G) The production date of each batch. period, must submit reports to EPA (xii) The number of prior-year RINs
(H) The category of renewable fuel of according to the schedule, and owned at the end of the quarter.
each batch, as defined in 80.1401. containing all the information, that is (xiii) The number of RINs generated.
(I) The volume of denaturant and set forth in this paragraph (c). (xiv) The volume of renewable fuel (in
applicable equivalence value of each (1)(i) For RIN transactions beginning gallons) owned at the end of the quarter.
batch. on July 1, 2010, RIN transaction reports (xv) The total 2009 retired RINs
(J) The volume of each batch listing each RIN transaction shall be reinstated.
produced. submitted according to the schedule in (xvi) Any additional information that
(K) The types and volumes of paragraph (f)(2) of this section. the Administrator may require.
feedstocks used. (ii) As per 80.1452, RIN transaction (3) All reports required under this
(L) The process(es) and feedstock(s) information listing each RIN transaction paragraph (c) must be signed and
used and proportion of renewable shall be submitted to the EMTS. certified as meeting all the applicable
volume attributable to each process and (iii) Each report required by paragraph requirements of this subpart by the RIN
feedstock. (c)(1)(i) of this section shall include all owner or a responsible corporate officer
(M) The type of co-products produced of the following information: of the RIN owner.
with each batch of renewable fuel. (A) The submitting partys name. (d) Except for those producers subject
(N) The volume of co-products (B) The submitting partys EPA to the aggregate compliance approach
produced in each quarter. company registration number. described in 80.1454(g), producers and
(O) A list of the RINs generated and (C) The applicable reporting period. RIN-generating importers of renewable
an affirmation that the feedstock(s) used (D) Transaction type (i.e., RIN buy, fuel made from feedstocks that are
for each batch meets the definition of RIN sell, RIN separation, RIN retire, planted crops and crop residue from
renewable biomass as defined in reinstated 2009 RIN). existing agricultural land, planted trees
80.1401. (E) Transaction date. or tree residue from actively managed
(P) Producers of renewable electricity (F) For a RIN purchase or sale, the tree plantations, slash and pre-
and biogas used for transportation as trading partners name. commercial thinnings from forestlands
or biomass obtained from areas at risk by the owner or a responsible corporate (2) The submitting partys EPA
of wildfire must submit quarterly officer of the submitter. company registration number.
reports according to the schedule in (g) All reports required under this (3) The generation year of the RINs.
paragraph (f)(2) of this section that section shall be submitted on forms and (4) The RIN assignment information
include all of the following: following procedures prescribed by the (Assigned or Separated).
(1) A summary of the types and Administrator. (5) The RIN type, or D code.
volumes of feedstocks used in that (6) Transaction type (i.e., RIN buy,
80.1452 What are the requirements RIN sell, RIN separation, RIN retire).
quarter.
related to the EPA Moderated Transaction (7) Transaction date as per
(2) Electronic data identifying the System (EMTS)?
land by coordinates of the points 80.1453(a)(4).
(a) Each party required to submit (8) For a RIN purchase or sale, the
defining the boundaries from which
information under this section must trading partners name.
each type of feedstock listed per
establish an account with the EPA (9) For a RIN purchase or sale, the
paragraph (d)(1) of this section was
Moderated Transaction System (EMTS) trading partners EPA company
harvested.
at least 60 days prior to engaging in any registration number.
(3) If electronic data identifying a plot
RIN transactions, or July 1, 2010, (10) For an assigned RIN purchase or
of land have been submitted previously,
whichever is later. sale, the renewable fuel volume
producers and RIN-generating importers
(b) Starting July 1, 2010, each time a associated with the sale.
may submit a cross-reference to that (11) Quantity of RINs involved in a
domestic producer or importer of
electronic data. transaction.
renewable fuel, or foreign renewable
(e) If EPA finds that the 2007 baseline (12) The per gallon RIN price or the
fuel producer who generates RINs,
amount of agricultural land has been per-gallon price of renewable fuel with
produces or imports a batch of
exceeded in any year beginning in 2010, RINs included.
renewable fuel, all the following
beginning on the first day of July of the (13) The reason for retiring RINs,
information must be submitted to EPA
following calendar year any domestic separating RINs, buying RINs, or selling
via the submitting partys EMTS
producers of renewable fuel as defined RINs.
account within five (5) business days:
in 80.1401 who use planted crops and/ (1) The renewable fuel producers, (14) Any additional information that
or crop residue from existing foreign renewable fuel producers, or the Administrator may require.
agricultural lands as feedstock must importers name. (d) All information required under
submit quarterly reports according to (2) The renewable fuel producers or this section shall be submitted on forms
the schedule in paragraph (f)(2) of this foreign renewable fuel producers EPA and following procedures prescribed by
section that include all of the following: company registration number. the Administrator.
(1) A summary of the types and (3) The importers EPA company
volumes of feedstocks used in that 80.1453 What are the product transfer
registration number if applicable. document (PTD) requirements for the RFS
quarter. (4) The renewable fuel producers or program?
(2) Maps or electronic data identifying foreign renewable fuel producers EPA
the land from which each type of (a) On each occasion when any party
facility registration number. transfers ownership of renewable fuels
feedstock listed per paragraph (d)(1) (5) The importers EPA facility
above was harvested. or separated RINs subject to this
registration number. subpart, the transferor must provide to
(i) If maps or electronic data (6) The RIN type (i.e., D code) of the
identifying a plot of land have been the transferee documents identifying the
batch. renewable fuel and any RINs (whether
submitted previously, producers and (7) The production process(es) used
RIN-generating importers may submit a assigned or separated) which include all
for the batch. of the following information, as
cross-reference to that map or electronic (8) The production date of the batch.
data. applicable:
(9) The category of renewable fuel of (1) The name and address of the
(ii) [Reserved.] the batch, as defined in 80.1401.
(f) Quarterly report submission transferor and transferee.
(10) The volume of the batch. (2) The transferors and transferees
deadlines. The submission deadlines for (11) The volume of denaturant and EPA company registration numbers.
quarterly reports shall be as follows: applicable equivalence value of each (3) The volume of renewable fuel that
(1) [Reserved.] batch. is being transferred, if any.
(2) Quarterly reports shall be (12) Quantity of RINs generated for (4) The date of the transfer.
submitted to EPA by the last day of the the batch. (5) For assigned or separated RINs, the
second month following the reporting (13) The type and volume of per gallon RIN price or the per gallon
period (i.e., the report covering January feedstock(s) used for the batch. renewable fuel price if the RIN price is
March would be due by May 31st, the (14) An affirmation that the included.
report covering AprilJune would be feedstock(s) used for each batch meets (6) The quantity of RINs being traded.
due by August 31st, the report covering the definition of renewable biomass as (7) The RIN type (i.e., D code).
JulySeptember would be due by defined in 80.1401. (8) The Assignment Code (Assigned or
November 30th and the report covering (15) The type of co-products produced Separated, or K code = 1 or 2).
OctoberDecember would be due by with the batch of renewable fuel. (9) The RIN generation year.
February 28th). Any reports generated (16) Any additional information the (10) The associated reason for the sell
by EMTS must be reviewed, Administrator may require. or buy transaction.
supplemented, and/or corrected if not (c) Starting July 1, 2010, each time (11) Whether any RINs are assigned to
complete and accurate, and verified by any party engages in a transaction the volume, as follows:
the owner or responsible corporate involving RINs, all the following (i) If the assigned RINs are being
office prior to submittal. information must be submitted to EPA transferred on the same PTD used to
(3) Reports required must be signed via the submitting partys EMTS transfer ownership of the renewable
and certified as meeting all the account within five (5) business days: fuel, then the assigned RINs shall be
applicable requirements of this subpart (1) The submitting partys name. listed on the PTD.
(ii) If the assigned RINs are being (4) Records related to the use of RINs any volume of renewable fuel for which
transferred on a separate PTD from that (by facility, if applicable) for RINs were generated or blend of
which is used to transfer ownership of compliance, including all of the renewable fuel for which RINs were
the renewable fuel, then the PTD which following: generated and gasoline or diesel fuel
is used to transfer ownership of the (i) Methods and variables used to that any party designates for use as
renewable fuel shall state the number of calculate the Renewable Volume transportation fuel, jet fuel, or heating
gallon-RINs being transferred as well as Obligations pursuant to 80.1407 or oil and the use of the fuel or blend as
a unique reference to the PTD which is 80.1430. transportation fuel, jet fuel, or heating
transferring the assigned RINs. (ii) List of RINs used to demonstrate oil without further blending, in the
(iii) If no assigned RINs are being compliance. designated form.
transferred with the renewable fuel, the (iii) Additional information related to (6) Copies of registration documents
PTD which is used to transfer details of RIN use for compliance. required under 80.1450, including
ownership of the renewable fuel shall (5) Records related to the separation information on fuels and products,
state No assigned RINs transferred. of assigned RINs from renewable fuel feedstocks, facility production
(iv) If RINs have been separated from volume. processes, process changes, and
the renewable fuel or blend pursuant to (b) Requirements for all producers of capacity, energy sources, and a copy of
80.1429(b)(4), then all PTDs which are renewable fuel. Beginning July 1, 2010, the independent third party engineering
at any time used to transfer ownership any domestic or RIN-generating foreign review submitted to EPA per
of the renewable fuel or blend shall state producer of a renewable fuel as defined 80.1450(b)(2).
This volume of fuel must be used in the in 80.1401 must keep all of the (c) Additional requirements for
designated form, without further following records in addition to those imports of renewable fuel.
blending. required under paragraphs (c) or (d) of (1) Beginning July 1, 2010, any RIN-
(b) Except for transfers to truck this section: generating foreign producer of a
carriers, retailers, or wholesale (1) Product transfer documents renewable fuel or RIN-generating
purchaser-consumers, product codes consistent with 80.1453 and associated importer must keep records of feedstock
may be used to convey the information with the renewable fuel producers purchases and transfers associated with
required under paragraphs (a)(1) activity, if any, as transferor or renewable fuel for which RINs are
through (a)(11) of this section if such transferee of renewable fuel or separated generated, sufficient to verify that
codes are clearly understood by each RINs. feedstocks used are renewable biomass
transferee. (2) Copies of all reports submitted to (as defined in 80.1401).
(c) For renewable fuel, other than EPA under 80.1449 and 80.1451(b). (i) RIN-generating foreign producers
ethanol, that is not registered as motor (3) Records related to the generation and importers of renewable fuel made
vehicle fuel under 40 CFR Part 79, the and assignment of RINs for each facility, from feedstocks that are planted crops
PTD which is used to transfer including all of the following: or crop residue from existing
ownership of the renewable fuel shall (i) Batch volume in gallons. agricultural land, planted trees or tree
state This volume of renewable fuel (ii) Batch number. residue from actively managed tree
may not be used as a motor vehicle (iii) RIN as assigned under 80.1426, plantations, slash and pre-commercial
fuel. if applicable. thinnings from forestlands or biomass
(iv) Identification of batches by obtained from wildland-urban interface
80.1454 What are the recordkeeping renewable category.
requirements under the RFS program? must maintain all of the following
(v) Type and quantity of co-products records to verify the location where
(a) Requirements for obligated parties produced. these feedstocks were produced:
and exporters. Beginning July 1, 2010, (vi) Type and quantity of feedstocks (A) Maps or electronic data
any obligated party (as described at used. indentifying the boundaries of the land
80.1406) or exporter of renewable fuel (vii) Type and quantity of fuel used
where each type of feedstock was
(as described at 80.1401) must keep all for process heat.
produced.
of the following records: (viii) Feedstock energy calculations (B) Bills of lading, product transfer
(1) Product transfer documents per 80.1426(f)(4). documents, or other commercial
consistent with 80.1453 and associated (ix) Date of production.
(x) Results of any laboratory analysis documents showing the quantity of
with the obligated partys or exporters
of batch chemical composition or feedstock purchased from each area
activity, if any, as transferor or
physical properties. identified in paragraph (c)(1)(i)(A) of
transferee of renewable fuel or separated
(xi) All commercial documents and this section, and showing each transfer
RINs.
(2) Copies of all reports submitted to additional information related to details of custody of the feedstock from the
EPA under 80.1449 and 80.1451(a), of RIN generation. location where it was produced to the
as applicable. (4) Records related to each RIN renewable fuel production facility.
(3) Records related to each RIN transaction, separately for each (ii)(A) RIN-generating foreign
transaction, including all of the transaction, including all of the producers and importers of renewable
following: following: fuel made from planted crops or crop
(i) A list of the RINs owned, (i) A list of the RINs owned, residue from existing agricultural land
purchased, sold, separated, retired, or purchased, sold, retired, or reinstated. must keep records that serve as
reinstated. (ii) The parties involved in each evidence that the land from which the
(ii) The parties involved in each RIN transaction including the transferor, feedstock was obtained was cleared or
transaction including the transferor, transferee, and any broker or agent. cultivated prior to December 19, 2007
transferee, and any broker or agent. (iii) The date of the transfer of the and actively managed or fallow, and
(iii) The date of the transfer of the RIN(s). nonforested on December 19, 2007. RIN-
RIN(s). (iv) Additional information related to generating foreign producers or
(iv) Additional information related to details of the transaction and its terms. importers of renewable fuel made from
details of the RIN transaction and its (5) Records related to the production, planted trees or tree residue from
terms. importation, ownership, sale or use of actively managed tree plantations must
keep records that serve as evidence that (G) Date of import. as evidence that the land from which
the land from which the feedstock was (H) Results of any laboratory analysis the feedstock was obtained was cleared
obtained was cleared prior to December of batch chemical composition or prior to December 19, 2007 and actively
19, 2007 and actively managed on physical properties. managed on December 19, 2007. The
December 19, 2007. (I) The EPA registration number of the records must be provided by the
(B) The records must be provided by foreign renewable fuel producers feedstock producer and must include at
the feedstock producer, traceable to the producing the fuel. least one of the following documents,
land in question, and consist of at least (J) Additional information related to which must be traceable to the land in
one of the following documents: details of RIN generation. question:
(1) Sales records for planted crops or (iv) Records related to each RIN (i) Sales records for planted trees or
trees, crop or tree residue, or livestock; transaction, including all of the tree residue.
purchasing records for fertilizer, weed following: (ii) Purchasing records for fertilizer,
control, or reseeding, including seeds, (A) A list of the RINs owned, weed control, or reseeding, including
seedlings, or other nursery stock. purchased, sold, separated, retired, or seeds, seedlings, or other nursery stock.
(2) A written management plan for reinstated. (iii) A written management plan for
agricultural or silvicultural purposes; (B) The parties involved in each silvicultural purposes.
documentation of participation in an transaction including the transferor, (iv) Documentation of participation in
agricultural or silvicultural program transferee, and any broker or agent. a silvicultural program sponsored by a
sponsored by a Federal, state, or local (C) The date of the transfer of the Federal, state, or local government
government agency. RIN(s). agency.
(3) Documentation of land (D) Additional information related to (v) Documentation of land
management in accordance with an details of the transaction and its terms. management in accordance with a
agricultural or silvicultural product (v) Copies of registration documents silvicultural product certification
certification program, an agreement for required under 80.1450. program, an agreement for land
land management consultation with a (vi) Records related to the import of management consultation with a
professional forester that identifies the any volume of renewable fuel that the professional forester.
land in question. importer designates for use as (vi) Evidence of the existence and
(4) Evidence of the existence and transportation fuel, jet fuel, or heating ongoing maintenance of a road system
ongoing maintenance of a road system oil. or other physical infrastructure
or other physical infrastructure (d) Additional requirements for designed and maintained for logging
designed and maintained for logging domestic producers of renewable fuel. use, together with one of the
use, together with one of the Except as provided in paragraphs (g) aforementioned documents.
aforementioned documents in this and (h) of this section, beginning July 1, (3) Domestic producers of renewable
paragraph (c)(1)(ii)(B). 2010, any domestic producer of fuel made from any other type of
(iii) RIN-generating foreign producers renewable fuel as defined in 80.1401 renewable biomass must have
and importers of renewable fuel made that generates RINs for such fuel must documents from their feedstock supplier
from any other type of renewable keep documents associated with certifying that the feedstock qualifies as
biomass must have documents from feedstock purchases and transfers that renewable biomass as defined in
their feedstock supplier certifying that identify where the feedstocks were 80.1401, describing the feedstock and
the feedstock qualifies as renewable produced and are sufficient to verify identifying the process that was used to
biomass as defined in 80.1401, that feedstocks used are renewable generate the feedstock.
describing the feedstock and identifying biomass (as defined in 80.1401) if RINs (e) Additional requirements for
the process that was used to generate are generated. producers of fuel exempt from the 20%
the feedstock. (1) Domestic producers of renewable GHG reduction requirement. Beginning
(2) Beginning July 1, 2010, any RIN- fuel made from feedstocks that are July 1, 2010, any production facility
generating importer of renewable fuel planted trees or tree residue from with a baseline volume of fuel that is
(as defined in 80.1401) must keep all actively managed tree plantations, slash not subject to the 20% GHG threshold,
of the following records: and pre-commercial thinnings from pursuant to 80.1403(c) and (d), must
(i) Product transfer documents forestlands or biomass obtained from keep all of the following:
consistent with 80.1453 and associated areas at risk of wildfire must maintain (1) Detailed engineering plans for the
with the renewable fuel importers all the following records to verify the facility.
activity, if any, as transferor or location where these feedstocks were (2) Federal, State, and local (or foreign
transferee of renewable fuel. produced: governmental) preconstruction
(ii) Copies of all reports submitted to (i) Maps or electronic data identifying approvals and permitting.
EPA under 80.1449 and 80.1451(b); the boundaries of the land where each (3) Procurement and construction
however, duplicate records are not type of feedstock was produced. contracts and agreements.
required. (ii) Bills of lading, product transfer (f) Requirements for other parties that
(iii) Records related to the generation documents or other commercial own RINs. Beginning July 1, 2010, any
and assignment of RINs for each facility, documents showing the quantity of party, other than those parties covered
including all of the following: feedstock purchased from each area in paragraphs (a) and (b) of this section,
(A) Batch volume in gallons. identified in paragraph (d)(1)(i) of this that owns RINs must keep all of the
(B) Batch number. section, and showing each transfer of following records:
(C) RIN as assigned under 80.1426. custody of the feedstock from the (1) Product transfer documents
(D) Identification of batches by location where it was produced to the consistent with 80.1453 and associated
renewable category. renewable fuel production facility. with the partys activity, if any, as
(E) Type and quantity of feedstocks (2) Domestic producers of renewable transferor or transferee of renewable fuel
used. fuel made from planted trees or tree or separated RINs.
(F) Type and quantity of fuel used for residue from actively managed tree (2) Copies of all reports submitted to
process heat. plantations must keep records that serve EPA under 80.1451(c).
(3) Records related to each RIN agricultural product certification (ii) Obtain the records and product
transaction by renewable fuel category, program. transfer documents associated with the
including all of the following: (ii) Records to verify the location feedstocks being audited.
(i) A list of the RINs owned, where the feedstocks were produced: (iii) Determine the feedstock
purchased, sold, retired, or reinstated. (A) Maps or electronic data supplier(s) that supplied the feedstocks
(ii) The parties involved in each RIN indentifying the boundaries of the land to the renewable fuel producer.
transaction including the transferor, where each type of feedstock was (iv) Confirm that feedstocks used to
transferee, and any broker or agent. produced; and produce RIN-generating renewable fuels
(iii) The date of the transfer of the (B) Bills of lading, product transfer meet the definition of renewable
RIN(s). documents or other commercial biomass as defined in 80.1401.
(iv) Additional information related to documents showing the quantity of (v) Immediately notify EPA of any
details of the transaction and its terms. feedstock purchased from each area case where the feedstocks do not meet
(4) Records related to any volume of identified in paragraph (c)(1)(i)(A) of the definition of renewable biomass as
renewable fuel that the party designated this section, and showing each transfer defined in 80.1401.
of custody of the feedstock from the (vi) Immediately notify EPA of any
for use as transportation fuel, jet fuel, or
location where it was produced to the instances where a renewable fuel
heating oil and from which RINs were
renewable fuel facility. producer, importer or feedstock supplier
separated pursuant to 80.1429(b)(4).
(h) Alternative renewable biomass subject to review under the approved
(g) Aggregate compliance with
tracking requirement. Any foreign or plan fails to cooperate in the manner
renewable biomass requirement. Any
domestic renewable fuel producer or described in this section.
domestic producer of renewable fuel (vii) Submit to EPA a report of each
made from planted crops or crop importer as defined in 80.1401 may
survey, within thirty days following the
residue from existing agricultural land comply with the following alternative
completion of each survey, such report
as defined in 80.1401 is subject to the renewable biomass tracking requirement
to include all the following information:
aggregate compliance approach and is instead of the recordkeeping (A) The identification of the person
not required to maintain feedstock requirements in paragraphs (c)(1), (d), who conducted the survey.
records unless EPA publishes a finding and (g) of this section: (B) An attestation by the officer of the
that the 2007 baseline amount of (1) To comply with the alternative surveyor company that the survey was
agricultural land has been exceeded. renewable biomass tracking requirement conducted in accordance with the
(1) EPA will make a finding under this paragraph (h), a renewable survey plan and the survey results are
concerning whether the 2007 baseline fuel producer or importer must either accurate.
amount of agricultural land has been arrange to have an independent third (C) Identification of the parties for
exceeded and will publish this finding party conduct a comprehensive program whom the survey was conducted.
in the Federal Register by November 30 of annual compliance surveys, or (D) Identification of the covered area
of the year preceding the compliance participate in the funding of an surveyed.
period. organization which arranged to have an (E) The dates on which the survey
(2) If EPA finds that the 2007 baseline independent third party conduct a was conducted.
amount of agricultural land has been comprehensive program of annual (F) The address of each facility at
exceeded, beginning on the first day of compliance surveys, to be carried out in which the survey audit was conducted
July of the compliance period in accordance with a survey plan which and the date of the audit.
question any domestic producer of has been approved by EPA. (G) A description of the methodology
renewable fuel made from planted crops (2) The annual compliance surveys used to select the locations for survey
and/or crop residue from agricultural under this paragraph (h) must be all the audits and the number of audits
lands as feedstock for renewable fuel for following: conducted.
which RINs are generated must keep all (i) Planned and conducted by an (viii) Maintain all records relating to
the following records: independent surveyor that meets the the survey audits conducted under this
(i) Records that serve as evidence that requirements in 80.68(c)(13)(i). section (h) for a period of at least 5
the land from which the feedstock was (ii) Conducted at renewable fuel years.
obtained was cleared or cultivated prior production and import facilities and (ix) At any time permit any
to December 19, 2007 and actively their feedstock suppliers. representative of EPA to monitor the
managed or fallow, and nonforested on (iii) Representative of all renewable conduct of the surveys, including
December 19, 2007. The records must be fuel producers and importers in the observing audits, reviewing records, and
provided by the feedstock producer and survey area and representative of their analysis of the audit results.
must include at least one of the feedstock suppliers. (4) A survey plan under this
following documents, which must be (iv) Designed to achieve at least the paragraph (h) must include all the
traceable to the land in question: same level of quality assurance required following:
(i) Identification of the parties for
(A) Sales records for planted crops, in paragraphs (c)(1), (d) and (g) of this
whom the survey is to be conducted.
crop residue or livestock. section. (ii) Identification of the independent
(B) Purchasing records for fertilizer, (3) The compliance survey program surveyor.
weed control, seeds, seedlings, or other shall require the independent surveyor (iii) A methodology for determining
nursery stock. conducting the surveys to do all the all the following:
(C) A written management plan for following: (A) When the audits will be
agricultural purposes. (i) Conduct feedstock audits of conducted.

(D) Documentation of participation in renewable fuel production and import (B) The audit locations.
an agricultural program sponsored by a facilities in accordance with the survey (C) The number of audits to be
Federal, state, or local government plan approved under this paragraph (h), conducted during the annual
agency. or immediately notify EPA of any compliance period.
(E) Documentation of land refusal of these facilities to allow an (iv) Any other elements determined
management in accordance with an audit to be conducted. by EPA to be necessary to achieve the
level of quality assurance required (vii) Any notifications required under for use as a feedstock in producing
under paragraphs (c)(1), (d), and (g) of this paragraph (h) must be directed to renewable fuel.
this section. the officer designated in paragraph (iii) Such other records as may be
(5)(i) Each renewable fuel producer (h)(6)(vi) of this section. requested by the Administrator.
and importer who participates in the (7)(i) No later than December 1 of the (k) A renewable fuel producer that
alternative renewable biomass tracking year preceding the year in which the generates RINs for biogas or electricity
under this paragraph (h) must take all surveys will be conducted, the contract produced from renewable biomass
reasonable steps to ensure that each with the independent surveyor shall be (renewable electricity) for fuels that are
feedstock producer, aggregator, in effect, and an amount of money used for transportation pursuant to
distributor, or supplier cooperates with necessary to carry out the entire survey 80.1426(f)(10) and (11), or that uses
this program by allowing the plan shall be paid to the independent process heat from biogas to generate
independent surveyor to audit their surveyor or placed into an escrow RINs for renewable fuel pursuant to
facility and by providing to the account with instructions to the escrow 80.1426(f)(12) shall keep all of the
independent surveyor and/or EPA, upon agent to pay the money to the following additional records:
request, copies of management plans, independent surveyor during the course (1) Contracts and documents
product transfer documents, and other of the conduct of the survey plan. memorializing the sale of biogas or
records or information regarding the (ii) No later than December 15 of the renewable electricity for use as
source of any feedstocks received. year preceding the year in which the transportation fuel relied upon in
(ii) Reasonable steps under paragraph surveys will be conducted, EPA must 80.1426(f)(10), 80.1426(f)(11), or for
(h)(5)(i) of this section must include, but receive a copy of the contract with the use of biogas for use as process heat to
typically should not be limited to: independent surveyor, proof that the make renewable fuel as relied upon in
Contractual agreements with feedstock money necessary to carry out the survey 80.1426(f)(12), and the transfer of title
producers, aggregators, distributors, and plan has either been paid to the of the biogas or renewable electricity
suppliers, which require them to independent surveyor or placed into an and all associated environmental
cooperate with the independent escrow account, and, if placed into an attributes from the point of generation to
surveyor and/or EPA in the manner escrow account, a copy of the escrow the transportation fueling facility.
described in paragraph (h)(5)(i) of this agreement, to be sent to the official (2) Documents demonstrating the
section. designated in paragraph (h)(6)(iii) of this volume and energy content of biogas, or
(6) The procedure for obtaining EPA section. energy content of renewable electricity
approval of a survey plan under this (8) A failure of any renewable fuel relied upon under 80.1426(f)(10) that
paragraph (h), and for revocation of any producers or importer to fulfill or cause was delivered to the transportation
such approval, are as follows: to be fulfilled any of the requirements fueling facility.
(3) Documents demonstrating the
(i) A detailed survey plan which of this paragraph (h) will cause the
volume and energy content of biogas, or
complies with the requirements of this option for such party to use the
energy content of renewable electricity
paragraph (h) must be submitted to EPA, alternative quality assurance
relied upon under 80.1426(f)(11) or
no later than September 1 of the year requirements under this paragraph (h) to
biogas relied upon under
preceding the calendar year in which be void ab initio.
80.1426(f)(12) that was placed into the
the surveys will be conducted. (i) Beginning July 1, 2010, all parties
common carrier pipeline (for biogas) or
(ii) The survey plan must be signed by must keep transaction information sent
transmission line (for renewable
a responsible corporate officer of the to EMTS in addition to other records
electricity).
renewable fuel producer or importer, or required under this section. (4) Documents demonstrating the
responsible officer of the organization (j) A renewable fuel producer that volume and energy content of biogas, or
which arranges to have an independent produces fuel from separated yard and energy content of renewable electricity
surveyor conduct a program of food waste as described in relied upon under 80.1426(f)(12) at the
renewable biomass compliance surveys, 80.1426(f)(5)(i)(A) and (B) and point of distribution.
as applicable. separated municipal waste as described (5) Affidavits from the biogas, or
(iii) The survey plan must be sent to in 80.1426(f)(5)(i)(C) shall keep all the renewable electricity producer and all
the following address: Director, following additional records: parties that held title to the biogas or
Compliance and Innovative Strategies (1) For separated yard and food waste renewable electricity confirming that
Division, U.S. Environmental Protection as described in 80.1426(f)(5)(i)(A) and title and environmental attributes of the
Agency, 1200 Pennsylvania Ave., NW. (B): biogas or renewable electricity relied
(6406J), Washington, DC 20460. (i) Documents demonstrating the upon under 80.1426(f)(10) and (11) or
(iv) EPA will send a letter to the party amounts, by weight, purchased of biogas relied upon under
submitting a survey plan under this separated yard and food waste for use as 80.1426(f)(12) were delivered to the
section, either approving or a feedstock in producing renewable fuel. transportation fueling facility and only
disapproving the survey plan. (ii) Such other records as may be to the transportation fueling facility.
(v) EPA may revoke any approval of requested by the Administrator. The renewable fuel producer shall
a survey plan under this section for (2) For separated municipal solid create and/or obtain these affidavits at
cause, including an EPA determination waste as described in least once per calendar quarter.
that the approved survey plan had 80.1426(f)(5)(i)(C): (6) The biogas or renewable electricity
proved inadequate in practice or that it (i) Contracts and documents producers Compliance Certification
was not diligently implemented. memorializing the sale of paper, required under Title V of the Clean Air
(vi) The approving official for an cardboard, plastics, rubber, textiles, Act.
alternative quality assurance program metals, and glass separated from (7) Such other records as may be
under this section is the Director of the municipal solid waste for recycling. requested by the Administrator.
Compliance and Innovative Strategies (ii) Documents demonstrating the (l) The records required under
Division, Office of Transportation and amounts by weight purchased of post- paragraphs (a) through (d) and (f)
Air Quality. recycled separated yard and food waste through (k) of this section and under
80.1453 shall be kept for five years (2) Renewable fuel production reduced cellulosic biofuel volume
from the date they were created, except facilities and importers who produce or established by EPA for the compliance
that records related to transactions import less than 10,000 gallons of year.
involving RINs shall be kept for five renewable fuel each year but wish to (b) Use of cellulosic biofuel waiver
years from the date of the RIN own RINs will be subject to all credits.
transaction. requirements stated in paragraphs (a)(1) (1) Cellulosic biofuel waiver credits
(m) The records required under through (a)(6) and (b)(1) of this section, are only valid for use in the compliance
paragraph (e) of this section shall be and all other applicable requirements of year that they are made available.
kept through calendar year 2022. this subpart M. (2) Cellulosic biofuel waiver credits
(n) On request by EPA, the records (c) Temporary volume threshold. are nonrefundable.
required under this section and under Renewable fuel production facilities (3) Cellulosic biofuel waiver credits
80.1453 must be made available to the located within the United States that are nontransferable.
Administrator or the Administrators produce less than 125,000 gallons of (4) Cellulosic biofuel waiver credits
authorized representative. For records renewable fuel each year are not subject may only be used for an obligated
that are electronically generated or to the requirements of 80.1426(a) and partys current year cellulosic biofuel
maintained, the equipment or software (e) related to the generation and RVO and not towards any prior year
necessary to read the records shall be assignment of RINs to batches of deficit cellulosic biofuel volume
made available; or, if requested by EPA, renewable fuel for up to three years, obligations.
electronic records shall be converted to beginning with the calendar year in (c) Purchase of cellulosic biofuel
paper documents. which the production facility produces waiver credits.
(o) The records required in paragraphs its first gallon of renewable fuel. Except (1) Only parties with an RVO for
(b)(3) and (c)(1) of this section must be as stated in paragraph (d) of this section, cellulosic biofuel may purchase
transferred with any renewable fuel sent such production facilities that do not cellulosic biofuel waiver credits.
to the importer of that renewable fuel by generate and/or assign RINs to batches (2) Cellulosic biofuel waiver credits
any foreign producer not generating of renewable fuel are also exempt from shall be purchased from EPA at the time
RINs for his renewable fuel. all the following requirements of this that a party submits its annual
(p) Copies of all reports required subpart for a maximum of three years: compliance report to EPA pursuant to
under 80.1464. (1) The registration requirements of 80.1451(a)(1).
80.1450. (3) Parties may not purchase more
80.1455 What are the small volume (2) The reporting requirements of cellulosic biofuel waiver credits than
provisions for renewable fuel production 80.1451. their current year cellulosic biofuel RVO
facilities and importers? (3) The EMTS requirements of minus cellulosic biofuel RINs with a D
(a) Standard volume threshold. 80.1452. code of 3 that they own.
Renewable fuel production facilities (4) The recordkeeping requirements of (4) Cellulosic biofuel waiver credits
located within the United States that 80.1454. may only be used to meet an obligated
produce less than 10,000 gallons of (5) The attest engagement partys cellulosic biofuel RVO.
renewable fuel each year, and importers requirements of 80.1464. (d) Setting the price of cellulosic
who import less than 10,000 gallons of (6) The production outlook report biofuel waiver credits.
renewable fuel each year, are not subject requirements of 80.1449. (1) The price for cellulosic biofuel
to the requirements of 80.1426(a) and (d)(1) Renewable fuel production waiver credits shall be set equal to the
(e) related to the generation and facilities who produce less than 125,000 greater of:
assignment of RINs or to batches of gallons of renewable fuel each year and (i) $0.25 per cellulosic biofuel waiver
renewable fuel. Except as stated in that generate and/or assign RINs to credit, adjusted for inflation in
paragraph (b) of this section, such batches of renewable fuel are subject to comparison to calendar year 2008; or
production facilities and importers that the provisions of 80.1426, 80.1449 (ii) $3.00 less the wholesale price of
do not generate and/or assign RINs to through 80.1452, 80.1454, and 80.1464. gasoline per cellulosic biofuel waiver
(2) Renewable fuel production credit, adjusted for inflation in
batches of renewable fuel are also
facilities who produce less than 125,000 comparison to calendar year 2008.
exempt from all the following
gallons of renewable fuel each year but (2) The wholesale price of gasoline
requirements of this subpart:
wish to own RINs will be subject to all will be calculated by averaging the most
(1) The registration requirements of
requirements stated in paragraphs (c)(1) recent twelve monthly values for U.S.
80.1450.
through (c)(6) and (d)(1) of this section, Total Gasoline Bulk Sales (Price) by
(2) The reporting requirements of
and all other applicable requirements of Refiners as provided by the Energy
80.1451.
this subpart M. Information Administration that are
(3) The EMTS requirements of
80.1452. 80.1456 What are the provisions for available as of September 30 of the year
(4) The recordkeeping requirements of cellulosic biofuel waiver credits? preceding the compliance period.
80.1454. (a) If EPA reduces the applicable (3) The inflation adjustment will be
(5) The attest engagement volume of cellulosic biofuel pursuant to calculated by comparing the most recent
requirements of 80.1464. section 211(o)(7)(D)(i) of the Clean Air Consumer Price Index for All Urban
(6) The production outlook report Act (42 U.S.C. 7545(o)(7)(D)(i)) for any Consumers (CPIU) for All Items
requirements of 80.1449. given compliance year, then EPA will expenditure category as provided by the
(b)(1) Renewable fuel production provide cellulosic biofuel waiver credits Bureau of Labor Statistics that is
facilities and importers who produce or for purchase for that compliance year. available at the time EPA sets the
import less than 10,000 gallons of (1) The price of these cellulosic cellulosic biofuel standard to the most
renewable fuel each year and that biofuel waiver credits will be set by EPA recent comparable value reported after
generate and/or assign RINs to batches on an annual basis in accordance with December 31, 2008. When EPA must set
of renewable fuel are subject to the paragraph (d) of this section. the price of cellulosic biofuel waiver
provisions of 80.1426, 80.1449 (2) The total cellulosic biofuel waiver credits for a compliance year, EPA will
through 80.1452, 80.1454, and 80.1464. credits available will be equal to the calculate the new amounts for
paragraphs (d)(1)(i) and (ii) of this requirement that applies to that person procedures, such as the requirements in
section for each year after 2008 and under this subpart. 80.1465 and 80.1466, the following
every month where data is available for annual attest engagement procedures are
the year preceding the compliance 80.1461 Who is liable for violations required under this subpart.
under the RFS program?
period at the time EPA sets the (a) Obligated parties and exporters.
cellulosic biofuel standard. (a) Liability for violations of The following attest procedures shall be
(e) Cellulosic biofuel waiver credits prohibited acts. completed for any obligated party as
under this section will only be able to (1) Any person who violates a stated in 80.1406(a) or exporter of
be purchased on forms and following prohibition under 80.1460(a) through renewable fuel:
procedures prescribed by EPA. (d) is liable for the violation of that (1) Annual compliance demonstration
prohibition. report.
80.145780.1459 [Reserved] (2) Any person who causes another
(i) Obtain and read a copy of the
person to violate a prohibition under
80.1460 What acts are prohibited under annual compliance demonstration
80.1460(a) through (d) is liable for a
the RFS program? report required under 80.1451(a)(1)
violation of 80.1460(e).
(a) Renewable fuels producer or which contains information regarding
(b) Liability for failure to meet other
importer violation. Except as provided all the following:
provisions of this subpart.
in 80.1455, no person shall produce or (1) Any person who fails to meet a (A) The obligated partys volume of
import a renewable fuel without requirement of any provision of this all products listed in 80.1407(c) and
complying with the requirements of subpart is liable for a violation of that (e), or the exporters volume of each
80.1426 regarding the generation and provision. category of exported renewable fuel
assignment of RINs. (2) Any person who causes another identified in 80.1430 (b)(1)(i), (b)(1)(ii),
(b) RIN generation and transfer person to fail to meet a requirement of (b)(2)(i), and (b)(2)(ii).
violations. No person shall do any of the any provision of this subpart is liable for (B) RVOs.
following: causing a violation of that provision. (C) RINs used for compliance.
(1) Generate a RIN for a fuel that is not (c) Parent corporation liability. Any (ii) Obtain documentation of any
a renewable fuel, or for which the parent corporation is liable for any volumes of renewable fuel used in
applicable renewable fuel volume was violation of this subpart that is products listed in 80.1407(c) and (e) at
not produced. committed by any of its subsidiaries. the refinery or import facility or
(2) Create or transfer to any person a (d) Joint venture liability. Each partner exported during the reporting year;
RIN that is invalid under 80.1431. to a joint venture is jointly and severally compute and report as a finding the
(3) Transfer to any person a RIN that liable for any violation of this subpart total volumes of renewable fuel
is not properly identified as required that is committed by the joint venture represented in these documents.
under 80.1425. operation. (iii) For obligated parties, compare the
(4) Transfer to any person a RIN with volumes of products listed in
a K code of 1 without transferring an 80.1462 [Reserved] 80.1407(c) and (e) reported to EPA in
appropriate volume of renewable fuel to 80.1463 What penalties apply under the
the report required under 80.1451(a)(1)
the same person on the same day. RFS program? with the volumes, excluding any
(5) Introduce into commerce any renewable fuel volumes, contained in
(a) Any person who is liable for a
renewable fuel produced from a the inventory reconciliation analysis
violation under 80.1461 is subject a to
feedstock or through a process that is under 80.133 and the volume of non-
civil penalty as specified in sections 205
not described in the persons renewable diesel produced or imported.
and 211(d) of the Clean Air Act, for
registration information. Verify that the volumes reported to EPA
every day of each such violation and the
(c) RIN use violations. No person shall agree with the volumes in the inventory
amount of economic benefit or savings
do any of the following: reconciliation analysis and the volumes
resulting from each violation.
(1) Fail to acquire sufficient RINs, or (b) Any person liable under of non-renewable diesel produced or
use invalid RINs, to meet the persons 80.1461(a) for a violation of imported, and report as a finding any
RVOs under 80.1427. 80.1460(c) for failure to meet its RVOs, exception.
(2) Fail to acquire sufficient RINs to or 80.1460(e) for causing another (iv) For exporters, perform all of the
meet the persons RVOs under person to fail to meet their RVOs, during following:
80.1430. any averaging period, is subject to a (A) Obtain the database, spreadsheet,
(3) Use a validly generated RIN to separate day of violation for each day in or other documentation that the
meet the persons RVOs under the averaging period. exporter maintains for purposes for all
80.1427, or separate and transfer a (c) Any person liable under exported renewable fuel.
validly generated RIN, where the person 80.1461(b) for failure to meet, or (B) Compare the volume of products
ultimately uses the renewable fuel causing a failure to meet, a requirement identified in these documents with the
volume associated with the RIN in an of any provision of this subpart is liable volumes reported to EPA.
application other than for use as for a separate day of violation for each (C) Verify that the volumes reported
transportation fuel, jet fuel, or heating day such a requirement remains to EPA agree with the volumes
oil (as defined in 80.1401). unfulfilled. identified in the database, spreadsheet,
(d) RIN retention violation. No person or other documentation, and report as a
shall retain RINs in violation of the 80.1464 What are the attest engagement finding any exception.
requirements in 80.1428(a)(5). requirements under the RFS program? (v) Compute and report as a finding
(e) Causing a violation. No person The requirements regarding annual the obligated partys or exporters RVOs,
shall cause another person to commit an attest engagements in 80.125 through and any deficit RVOs carried over from
act in violation of any prohibited act 80.127, and 80.130, also apply to any the previous year or carried into the
under this section. attest engagement procedures required subsequent year, and verify that the
(f) Failure to meet a requirement. No under this subpart M. In addition to any values agree with the values reported to
person shall fail to meet any other applicable attest engagement EPA.
(vi) Obtain the database, spreadsheet, RIN activity for RINs assigned to a transaction reports required under
or other documentation for all RINs by volume of renewable fuel, the volume 80.1451(b)(2) for the compliance year.
type of renewable fuel used for and type of renewable fuel (as defined (ii) Obtain contracts, invoices, or
compliance during the year being in 80.1401) of renewable fuel owned at other documentation for the
reviewed; calculate the total number of the end of each quarter; as represented representative samples of RIN
RINs associated with each type of in these documents; and state whether transactions; compute the transaction
renewable fuel used for compliance by this information agrees with the partys types, transaction dates, and the RINs
year of generation represented in these reports to EPA. traded; state whether this information
documents; state whether this (b) Renewable fuel producers and agrees with the partys reports to EPA
information agrees with the report to RIN-generating importers. The following and report as a finding any exceptions.
EPA and report as a finding any attest procedures shall be completed for (3) RIN activity reports.
exceptions. any RIN-generating renewable fuel (i) Obtain and read copies of the
(vii) For exporters, perform all the producer or importer: quarterly RIN activity reports required
following: (1) RIN generation reports. under 80.1451(b)(3) for the compliance
(A) Select sample batches in (i) Obtain and read copies of the year.
accordance with the guidelines in reports required under 80.1451(b)(1), (ii) Obtain the database, spreadsheet,
80.127 from each separate category of (e), and (d) for the compliance year. or other documentation used to generate
renewable fuel exported and identified (ii) Obtain production data for each the information in the RIN activity
in 80.1451(a). renewable fuel batch by type of reports; compare the RIN transaction
(B) Obtain invoices, bills of lading renewable fuel that was produced or samples reviewed under paragraph
and other documentation for the imported during the year being (b)(2) of this section with the
representative samples. Calculate the reviewed; compute the RIN numbers, corresponding entries in the database or
RVO for the exported fuel, state whether production dates, types, volumes of spreadsheet and report as a finding any
this information agrees with the report denaturant and applicable equivalence discrepancies; report the total number of
to EPA and report as a finding any values, and production volumes for each RIN generated during each quarter
exception. each batch; report the total RINs and compute and report the total
(C) State whether any of these generated during the year being number of current-year and prior-year
documents refer to the exported fuel as reviewed; and state whether this RINs owned at the start and end of each
advanced biofuel or cellulosic biofuel, information agrees with the partys quarter, purchased, sold, retired and
and report as a finding whether or not reports to EPA. Report as a finding any reinstated, and for parties that reported
the exporter calculated an advanced exceptions. RIN activity for RINs assigned to a
biofuel or cellulosic biofuel RVO for (iii) Verify that the proper number of
volume of renewable fuel, the volume of
these fuels pursuant to 80.1430(b)(2)(i) RINs were generated and assigned
renewable fuel owned at the end of each
or (ii). pursuant to the requirements of
quarter, as represented in these
(2) RIN transaction reports. 80.1426 for each batch of renewable
documents; and state whether this
(i) Obtain and read copies of a fuel produced or imported.
(iv) Obtain product transfer information agrees with the partys
representative sample, selected in
documents for a representative sample, reports to EPA.
accordance with the guidelines in
80.127, of each RIN transaction type selected in accordance with the (4) Independent Third Party
(RINs purchased, RINs sold, RINs guidelines in 80.127, of renewable fuel Engineering Review.
retired, RINs reinstated) included in the batches produced or imported during (i) Obtain documentation of
RIN transaction reports required under the year being reviewed; verify that the independent third party engineering
80.1451(a)(2) for the compliance year. product transfer documents contain the reviews required under 80.1450(b)(2).
(ii) Obtain contracts, invoices, or applicable information required under (ii) Review and verify the written
other documentation for the 80.1453; verify the accuracy of the verification and records generated as
representative samples of RIN information contained in the product part of the independent third party
transactions; compute the transaction transfer documents; report as a finding engineering review.
types, transaction dates, and RINs any product transfer document that does (c) Other parties owning RINs. The
traded; state whether the information not contain the applicable information following attest procedures shall be
agrees with the partys reports to EPA required under 80.1453. completed for any party other than an
and report as a finding any exceptions. (v)(A) Obtain documentation, as obligated party or renewable fuel
(3) RIN activity reports. required under 80.1451(b), (d), and (e) producer or importer that owns any
(i) Obtain and read copies of all associated with feedstock purchases for RINs during a calendar year:
quarterly RIN activity reports required a representative sample, selected in (1) RIN transaction reports.
under 80.1451(a)(3) for the compliance accordance with the guidelines in (i) Obtain and read copies of a
year. 80.127, of renewable fuel batches representative sample, selected in
(ii) Obtain the database, spreadsheet, produced or imported during the year accordance with the guidelines in
or other documentation used to generate being reviewed. 80.127, of each RIN transaction type
the information in the RIN activity (B) Verify that feedstocks were (RINs purchased, RINs sold, RINs
reports; compare the RIN transaction properly identified in the reports and retired, RINs separated, RINs reinstated)
samples reviewed under paragraph met the definition of renewable biomass included in the RIN transaction reports
(a)(2) of this section with the in 80.1401. required under 80.1451(c)(1) for the
corresponding entries in the database or (2) RIN transaction reports. compliance year.
spreadsheet and report as a finding any (i) Obtain and read copies of a (ii) Obtain contracts, invoices, or
discrepancies; compute the total representative sample, selected in other documentation for the
number of current-year and prior-year accordance with the guidelines in representative samples of RIN
RINs owned at the start and end of each 80.127, of each transaction type (RINs transactions; compute the transaction
quarter, purchased, sold, retired and purchased, RINs sold, RINs retired, RINs types, transaction dates, and the RINs
reinstated, and for parties that reported reinstated) included in the RIN traded; state whether this information
agrees with the partys reports to EPA (4) Foreign small refiner is a foreign (i) Designation of the transportation
and report as a finding any exceptions. refiner that has received a small refiner fuel as RFSFRFUEL.
(2) RIN activity reports. exemption under 80.1442. (ii) The certification required under
(i) Obtain and read copies of the (5) RFSFRFUEL is transportation fuel paragraph (c)(2) of this section.
quarterly RIN activity reports required produced at a foreign refinery that has (d) Load port independent testing and
under 80.1451(c)(2) for the compliance received a small refinery exemption refinery identification.
year. under 80.1441 or by a foreign refiner (1) On each occasion that RFS
with a small refiner exemption under FRFUEL is loaded onto a vessel for
(ii) Obtain the database, spreadsheet,
80.1442. transport to the United States the
or other documentation used to generate
(6) Non-RFSFRFUEL is one of the foreign small refiner shall have an
the information in the RIN activity
following: independent third party do all the
reports; compare the RIN transaction
(i) Transportation fuel produced at a following:
samples reviewed under paragraph (i) Inspect the vessel prior to loading
(c)(1) of this section with the foreign refinery that has received a
small refinery exemption under and determine the volume of any tank
corresponding entries in the database or bottoms.
spreadsheet and report as a finding any 80.1441 or by a foreign refiner with a
small refiner exemption under (ii) Determine the temperature-
discrepancies; compute the total corrected volume of RFSFRFUEL
number of current-year and prior-year 80.1442.
(ii) Transportation fuel produced at a loaded onto the vessel (exclusive of any
RINs owned at the start and end of each tank bottoms before loading).
quarter, purchased, sold, retired, foreign refinery that has not received a
small refinery exemption under (iii) Obtain the EPA-assigned
separated, and reinstated and for parties registration number of the foreign
that reported RIN activity for RINs 80.1441 or by a foreign refiner that has
not received a small refiner exemption refinery.
assigned to a volume of renewable fuel, (iv) Determine the name and country
the volume of renewable fuel owned at under 80.1442.
of registration of the vessel used to
(b) General requirements for RFS
the end of each quarter, as represented transport the RFSFRFUEL to the
FRFUEL for foreign small refineries and
in these documents; and state whether United States.
small refiners. A foreign refiner must do (v) Determine the date and time the
this information agrees with the partys
all the following: vessel departs the port serving the
reports to EPA.
(1) Designate, at the time of
(d) For each compliance year, each foreign refinery.
production, each batch of transportation (vi) Review original documents that
party subject to the attest engagement fuel produced at the foreign refinery
requirements under this section shall reflect movement and storage of the
that is exported for use in the United RFSFRFUEL from the foreign refinery
cause the reports required under this States as RFSFRFUEL.
section to be submitted to EPA by May to the load port, and from this review
(2) Meet all requirements that apply to determine:
31 of the year following the compliance refiners who have received a small
year. (A) The refinery at which the RFS
refinery or small refiner exemption FRFUEL was produced; and
(e) The party conducting the under this subpart. (B) That the RFSFRFUEL remained
procedures under this section shall (c) Designation, foreign small refiner segregated from Non-RFSFRFUEL and
obtain a written representation from a certification, and product transfer other RFSFRFUEL produced at a
company representative that the copies documents. different refinery.
of the reports required under this (1) Any foreign small refiner must (2) The independent third party shall
section are complete and accurate designate each batch of RFSFRFUEL as submit a report to all the following:
copies of the reports filed with EPA. such at the time the transportation fuel (i) The foreign small refiner or owner
(f) The party conducting the is produced. of the foreign small refinery, containing
procedures under this section shall (2) On each occasion when RFS the information required under
identify and report as a finding the FRFUEL is loaded onto a vessel or other paragraph (d)(1) of this section, to
commercial computer program used by transportation mode for transport to the accompany the product transfer
the party to track the data required by United States, the foreign small refiner documents for the vessel.
the regulations in this subpart, if any. shall prepare a certification for each (ii) The Administrator, containing the
batch of RFSFRFUEL that meets all the information required under paragraph
80.1465 What are the additional
requirements under this subpart for foreign
following requirements: (d)(1) of this section, within thirty days
small refiners, foreign small refineries, and (i) The certification shall include the following the date of the independent
importers of RFSFRFUEL? report of the independent third party third partys inspection. This report
under paragraph (d) of this section, and shall include a description of the
(a) Definitions. The following
all the following additional information: method used to determine the identity
additional definitions apply for this (A) The name and EPA registration of the refinery at which the
subpart: number of the refinery that produced transportation fuel was produced,
(1) Foreign refinery is a refinery that the RFSFRFUEL. assurance that the transportation fuel
is located outside the United States, the (B) [Reserved] remained segregated as specified in
Commonwealth of Puerto Rico, the U.S. (ii) The identification of the paragraph (j)(1) of this section, and a
Virgin Islands, Guam, American Samoa, transportation fuel as RFSFRFUEL. description of the transportation fuels
and the Commonwealth of the Northern (iii) The volume of RFSFRFUEL movement and storage between
Mariana Islands (collectively referred to being transported, in gallons. production at the source refinery and
in this section as the United States). (3) On each occasion when any vessel loading.
(2) Foreign refiner is a person that person transfers custody or title to any (3) The independent third party must
meets the definition of refiner under RFSFRFUEL prior to its being do all the following:
80.2(i) for a foreign refinery. imported into the United States, it must (i) Be approved in advance by EPA,
(3) Foreign small refinery is a foreign include all the following information as based on a demonstration of ability to
refinery that has received a small part of the product transfer document perform the procedures required in this
refinery exemption under 80.1441. information: paragraph (d).
(ii) Be independent under the criteria (iii) EPA inspectors and auditors may solely with respect to actions instituted
specified in 80.65(f)(2)(iii). be EPA employees or contractors to against the foreign refiner, its agents and
(iii) Sign a commitment that contains EPA. employees in any court or other tribunal
the provisions specified in paragraph (f) (iv) Any documents requested that are in the United States for conduct that
of this section with regard to activities, related to matters covered by violates the requirements applicable to
facilities, and documents relevant to inspections and audits must be the foreign refiner under this subpart,
compliance with the requirements of provided to an EPA inspector or auditor including conduct that violates the
this paragraph (d). on request. False Statements Accountability Act of
(e) Comparison of load port and port (v) Inspections and audits may 1996 (18 U.S.C. 1001) and section
of entry testing. include review and copying of any 113(c)(2) of the Clean Air Act (42 U.S.C.
(1)(i) Any foreign small refiner or documents related to all the following: 7413).
foreign small refinery and any United (A) The volume of RFSFRFUEL. (6) The foreign refiner, or its agents or
States importer of RFSFRFUEL shall (B) The proper classification of
employees, will not seek to detain or to
compare the results from the load port transportation fuel as being RFS
impose civil or criminal remedies
testing under paragraph (d) of this FRFUEL or as not being RFSFRFUEL.
against EPA inspectors or auditors,
section, with the port of entry testing as (C) Transfers of title or custody to
whether EPA employees or EPA
reported under paragraph (k) of this RFSFRFUEL.
(D) Testing of RFSFRFUEL. contractors, for actions performed
section, for the volume of transportation within the scope of EPA employment or
fuel, except as specified in paragraph (E) Work performed and reports
prepared by independent third parties contract related to the provisions of this
(e)(1)(ii) of this section. section.
(ii) Where a vessel transporting RFS and by independent auditors under the
FRFUEL offloads this transportation fuel requirements of this section, including (7) The commitment required by this
at more than one United States port of work papers. paragraph (f) shall be signed by the
entry, the requirements of paragraph (vi) Inspections and audits may owner or president of the foreign refiner
(e)(1)(i) of this section do not apply at include interviewing employees. business.
subsequent ports of entry if the United (vii) Any employee of the foreign (8) In any case where RFSFRFUEL
States importer obtains a certification refiner must be made available for produced at a foreign refinery is stored
from the vessel owner that the interview by the EPA inspector or or transported by another company
requirements of paragraph (e)(1)(i) of auditor, on request, within a reasonable between the refinery and the vessel that
this section were met and that the vessel time period. transports the RFSFRFUEL to the
has not loaded any transportation fuel (viii) English language translations of United States, the foreign refiner shall
or blendstock between the first United any documents must be provided to an obtain from each such other company a
States port of entry and any subsequent EPA inspector or auditor, on request, commitment that meets the
port of entry. within 10 working days. requirements specified in paragraphs
(2) If the temperature-corrected (ix) English language interpreters (f)(1) through (f)(7) of this section, and
volumes determined at the port of entry must be provided to accompany EPA these commitments shall be included in
and at the load port differ by more than inspectors and auditors, on request. the foreign refiners application for a
one percent, the United States importer (2) An agent for service of process small refinery or small refiner
and the foreign small refiner or foreign located in the District of Columbia shall exemption under this subpart.
small refinery shall not treat the be named, and service on this agent
constitutes service on the foreign refiner (g) Sovereign immunity. By
transportation fuel as RFSFRFUEL and submitting an application for a small
the importer shall include the volume of or any employee of the foreign refiner
for any action by EPA or otherwise by refinery or small refiner exemption
transportation fuel in the importers RFS under this subpart, or by producing and
compliance calculations. the United States related to the
requirements of this subpart. exporting transportation fuel to the
(f) Foreign refiner commitments. Any United States under such exemption,
foreign small refinery or foreign small (3) The forum for any civil or criminal
enforcement action related to the the foreign refiner, and its agents and
refiner shall commit to and comply with employees, without exception, become
the provisions contained in this provisions of this section for violations
of the Clean Air Act or regulations subject to the full operation of the
paragraph (f) as a condition to being administrative and judicial enforcement
approved for a small refinery or small promulgated thereunder shall be
governed by the Clean Air Act, powers and provisions of the United
refiner exemption under this subpart. States without limitation based on
(1) Any United States Environmental including the EPA administrative forum
where allowed under the Clean Air Act. sovereign immunity, with respect to
Protection Agency inspector or auditor actions instituted against the foreign
must be given full, complete, and (4) United States substantive and
procedural laws shall apply to any civil refiner, its agents and employees in any
immediate access to conduct court or other tribunal in the United
inspections and audits of the foreign or criminal enforcement action against
the foreign refiner or any employee of States for conduct that violates the
refinery. requirements applicable to the foreign
(i) Inspections and audits may be the foreign refiner related to the
provisions of this section. refiner under this subpart, including
either announced in advance by EPA, or
(5) Submitting an application for a conduct that violates the False
unannounced.
(ii) Access will be provided to any small refinery or small refiner Statements Accountability Act of 1996
location where: exemption, or producing and exporting (18 U.S.C. 1001) and section 113(c)(2) of
(A) Transportation fuel is produced; transportation fuel under such the Clean Air Act (42 U.S.C. 7413).
(B) Documents related to refinery exemption, and all other actions to (h) Bond posting. Any foreign refiner
operations are kept; and comply with the requirements of this shall meet the requirements of this
(C) RFSFRFUEL is stored or subpart relating to such exemption paragraph (h) as a condition to approval
transported between the foreign refinery constitute actions or activities covered of a foreign small refinery or foreign
and the United States, including storage by and within the meaning of the small refiner exemption under this
tanks, vessels, and pipelines. provisions of 28 U.S.C. 1605(a)(2), but subpart.
(1) The foreign refiner shall post a bond amount changes. If the bond including identification of the port at
bond of the amount calculated using the amount decreases, the foreign refiner which the product was off loaded.
following equation: may reduce the amount of the bond (5) Any United States importer shall
Bond = G * $ 0.01 beginning 90 days after the date the meet all other requirements of this
bond amount changes. subpart for any imported transportation
Where:
Bond = amount of the bond in United States
(i) English language reports. Any fuel that is not classified as RFS
dollars. document submitted to EPA by a foreign FRFUEL under paragraph (k)(2) of this
G = the largest volume of transportation fuel refiner shall be in English, or shall section.
produced at the foreign refinery and include an English language translation. (l) Truck imports of RFSFRFUEL
exported to the United States, in gallons, (j) Prohibitions. produced at a foreign refinery.
during a single calendar year among the (1) No person may combine RFS (1) Any refiner whose RFSFRFUEL is
most recent of the following calendar FRFUEL with any Non-RFSFRFUEL, transported into the United States by
years, up to a maximum of five calendar and no person may combine RFS truck may petition EPA to use
years: the calendar year immediately FRFUEL with any RFSFRFUEL
preceding the date the refinerys or
alternative procedures to meet all the
produced at a different refinery, until following requirements:
refiners application is submitted, the
the importer has met all the (i) Certification under paragraph (c)(2)
calendar year the application is
submitted, and each succeeding calendar requirements of paragraph (k) of this of this section.
year. section. (ii) Load port and port of entry testing
(2) No foreign refiner or other person requirements under paragraphs (d) and
(2) Bonds shall be posted by: may cause another person to commit an
(i) Paying the amount of the bond to (e) of this section.
action prohibited in paragraph (j)(1) of (iii) Importer testing requirements
the Treasurer of the United States; this section, or that otherwise violates
(ii) Obtaining a bond in the proper under paragraph (k)(3) of this section.
the requirements of this section. (2) These alternative procedures must
amount from a third party surety agent (k) United States importer
that is payable to satisfy United States ensure RFSFRFUEL remains segregated
requirements. Any United States from Non-RFSFRFUEL until it is
administrative or judicial judgments importer of RFSFRFUEL shall meet the
against the foreign refiner, provided imported into the United States. The
following requirements: petition will be evaluated based on
EPA agrees in advance as to the third (1) Each batch of imported RFS
party and the nature of the surety whether it adequately addresses all the
FRFUEL shall be classified by the
agreement; or following:
importer as being RFSFRFUEL.
(iii) An alternative commitment that (i) Provisions for monitoring pipeline
(2) Transportation fuel shall be
results in assets of an appropriate shipments, if applicable, from the
classified as RFSFRFUEL according to
liquidity and value being readily refinery, that ensure segregation of RFS
the designation by the foreign refiner if
available to the United States, provided FRFUEL from that refinery from all
this designation is supported by product
EPA agrees in advance as to the other transportation fuel.
transfer documents prepared by the
alternative commitment. foreign refiner as required in paragraph (ii) Contracts with any terminals and/
(3) Bonds posted under this paragraph (c) of this section. Additionally, the or pipelines that receive and/or
(h) shall: importer shall comply with all transport RFSFRFUEL that prohibit the
(i) Be used to satisfy any judicial requirements of this subpart applicable commingling of RFSFRFUEL with
judgment that results from an to importers. Non-RFSFRFUEL or RFSFRFUEL
administrative or judicial enforcement (3) For each transportation fuel batch from other foreign refineries.
action for conduct in violation of this classified as RFSFRFUEL, any United (iii) Attest procedures to be conducted
subpart, including where such conduct States importer shall have an annually by an independent third party
violates the False Statements independent third party do all the that review loading records and import
Accountability Act of 1996 (18 U.S.C. following: documents based on volume
1001) and section 113(c)(2) of the Clean (i) Determine the volume of reconciliation, or other criteria, to
Air Act (42 U.S.C. 7413); transportation fuel in the vessel. confirm that all RFSFRFUEL remains
(ii) Be provided by a corporate surety (ii) Use the foreign refiners RFS segregated throughout the distribution
that is listed in the United States FRFUEL certification to determine the system.
Department of Treasury Circular 570 name and EPA-assigned registration (3) The petition described in this
Companies Holding Certificates of number of the foreign refinery that section must be submitted to EPA along
Authority as Acceptable Sureties on produced the RFSFRFUEL. with the application for a small refinery
Federal Bonds; and (iii) Determine the name and country or small refiner exemption under this
(iii) Include a commitment that the of registration of the vessel used to subpart.
bond will remain in effect for at least transport the RFSFRFUEL to the (m) Additional attest requirements for
five years following the end of latest United States. importers of RFSFRFUEL. The
annual reporting period that the foreign (iv) Determine the date and time the following additional procedures shall be
refiner produces transportation fuel vessel arrives at the United States port carried out by any importer of RFS
pursuant to the requirements of this of entry. FRFUEL as part of the attest engagement
subpart. (4) Any importer shall submit reports required for importers under this
(4) On any occasion a foreign refiner within 30 days following the date any subpart M.
bond is used to satisfy any judgment, vessel transporting RFSFRFUEL arrives (1) Obtain listings of all tenders of
the foreign refiner shall increase the at the United States port of entry to: RFSFRFUEL. Agree the total volume of
bond to cover the amount used within (i) The Administrator, containing the tenders from the listings to the
90 days of the date the bond is used. information determined under transportation fuel inventory
(5) If the bond amount for a foreign paragraph (k)(3) of this section; and reconciliation analysis required in
refiner increases, the foreign refiner (ii) The foreign refiner, containing the 80.133(b), and to the volumes
shall increase the bond to cover the information determined under determined by the third party under
shortfall within 90 days of the date the paragraph (k)(3)(i) of this section, and paragraph (d) of this section.
(2) For each tender under paragraph (i) Agree the volume of tenders from forms that may be specified by the
(m)(1) of this section, where the the listings to the transportation fuel Administrator.
transportation fuel is loaded onto a inventory reconciliation analysis in (2) Signed by the president or owner
marine vessel, report as a finding the 80.133(b). of the foreign refiner company, or by
name and country of registration of each (ii) Obtain a separate listing of the that persons immediate designee, and
vessel, and the volumes of RFS tenders under this paragraph (m)(5) shall contain the following declaration:
FRFUEL loaded onto each vessel. where the transportation fuel is loaded I hereby certify: (1) That I have actual
(3) Select a sample from the list of onto a marine vessel. Select a sample authority to sign on behalf of and to
vessels identified per paragraph (m)(2) from this listing in accordance with the bind [insert name of foreign refiner]
of this section used to transport RFS guidelines in 80.127, and obtain a with regard to all statements contained
FRFUEL, in accordance with the commercial document of general herein; (2) that I am aware that the
guidelines in 80.127, and for each circulation that lists vessel arrivals and information contained herein is being
vessel selected perform all the departures, and that includes the port Certified, or submitted to the United
following: and date of departure and the ports and States Environmental Protection
(i) Obtain the report of the dates where the transportation fuel was Agency, under the requirements of 40
independent third party, under off loaded for the selected vessels. CFR part 80, subpart M, and that the
paragraph (d) of this section. Determine and report as a finding the information is material for determining
(A) Agree the information in these country where the transportation fuel compliance under these regulations; and
reports with regard to vessel was off loaded for each vessel selected. (3) that I have read and understand the
identification and transportation fuel (6) In order to complete the information being Certified or
volume. requirements of this paragraph (m), an submitted, and this information is true,
(B) Identify, and report as a finding, auditor shall do all the following: complete and correct to the best of my
each occasion the load port and port of (i) Be independent of the foreign knowledge and belief after I have taken
entry volume results differ by more than refiner or importer. reasonable and appropriate steps to
the amount allowed in paragraph (e)(2) (ii) Be licensed as a Certified Public verify the accuracy thereof. I affirm that
of this section, and determine whether Accountant in the United States and a I have read and understand the
all of the requirements of paragraph citizen of the United States, or be provisions of 40 CFR part 80, subpart M,
(e)(2) of this section have been met. approved in advance by EPA based on including 40 CFR 80.1465 apply to
(ii) Obtain the documents used by the a demonstration of ability to perform the [INSERT NAME OF FOREIGN
independent third party to determine procedures required in 80.125 REFINER]. Pursuant to Clean Air Act
transportation and storage of the RFS through 80.127, 80.130, 80.1464, and section 113(c) and 18 U.S.C. 1001, the
FRFUEL from the refinery to the load this paragraph (m). penalty for furnishing false, incomplete
(iii) Sign a commitment that contains or misleading information in this
port, under paragraph (d) of this section.
the provisions specified in paragraph (f) certification or submission is a fine of
Obtain tank activity records for any
of this section with regard to activities up to $10,000 U.S., and/or
storage tank where the RFSFRFUEL is
and documents relevant to compliance imprisonment for up to five years.
stored, and pipeline activity records for
with the requirements of 80.125
any pipeline used to transport the RFS
through 80.127, 80.130, 80.1464, and 80.1466 What are the additional
FRFUEL prior to being loaded onto the requirements under this subpart for RIN-
this paragraph (m).
vessel. Use these records to determine generating foreign producers and importers
(n) Withdrawal or suspension of
whether the RFSFRFUEL was of renewable fuels for which RINs have
foreign small refiner or foreign small
produced at the refinery that is the been generated by the foreign producer?
refinery status. EPA may withdraw or
subject of the attest engagement, and (a) Foreign producer of renewable
suspend a foreign refiners small
whether the RFSFRFUEL was mixed fuel. For purposes of this subpart, a
refinery or small refiner exemption
with any Non-RFSFRFUEL or any foreign producer of renewable fuel is a
where:
RFSFRFUEL produced at a different (1) A foreign refiner fails to meet any person located outside the United
refinery. requirement of this section; States, the Commonwealth of Puerto
(4) Select a sample from the list of (2) A foreign government fails to Rico, the Virgin Islands, Guam,
vessels identified per paragraph (m)(2) allow EPA inspections as provided in American Samoa, and the
of this section used to transport RFS paragraph (f)(1) of this section; Commonwealth of the Northern Mariana
FRFUEL, in accordance with the (3) A foreign refiner asserts a claim of, Islands (collectively referred to in this
guidelines in 80.127, and for each or a right to claim, sovereign immunity section as the United States) that has
vessel selected perform all of the in an action to enforce the requirements been approved by EPA to generate RINs
following: in this subpart; or for renewable fuel it produces for export
(i) Obtain a commercial document of (4) A foreign refiner fails to pay a civil to the United States, hereinafter referred
general circulation that lists vessel or criminal penalty that is not satisfied to as a foreign producer under this
arrivals and departures, and that using the foreign refiner bond specified section.
includes the port and date of departure in paragraph (h) of this section. (b) General requirements. An
of the vessel, and the port of entry and (o) Additional requirements for approved foreign producer under this
date of arrival of the vessel. applications, reports and certificates. section must meet all requirements that
(ii) Agree the vessels departure and Any application for a small refinery or apply to renewable fuel producers
arrival locations and dates from the small refiner exemption, alternative under this subpart.
independent third party and United procedures under paragraph (l) of this (c) Designation, foreign producer
States importer reports to the section, any report, certification, or certification, and product transfer
information contained in the other submission required under this documents.
commercial document. section shall be: (1) Any approved foreign producer
(5) Obtain separate listings of all (1) Submitted in accordance with under this section that generates RINs
tenders of RFSFRFUEL, and perform procedures specified by the for renewable fuel must designate each
all the following: Administrator, including use of any batch of such renewable fuel as RFS
FRRF at the time the renewable fuel is other RFSFRRF produced by a associated with the renewable fuel shall
produced. different foreign producer. be calculated based on the lesser of the
(2) On each occasion when RFSFRRF (2) The independent third party shall two volumes in paragraph (e)(1)(i) of
is transferred for transport to a vessel or submit a report to the following: this section.
loaded onto a vessel or other (i) The RIN-generating foreign (ii) Where the port of entry volume is
transportation mode for transport to the producer, containing the information the lesser of the two volumes in
United States, the RIN-generating required under paragraph (d)(1) of this paragraph (e)(1)(i) of this section, the
foreign producer shall prepare a section, to accompany the product importer shall calculate the difference
certification for each batch of RFS transfer documents for the vessel. between the number of RINs originally
FRRF; the certification shall include the (ii) The Administrator, containing the assigned by the foreign producer and
report of the independent third party information required under paragraph the number of RINs calculated under
under paragraph (d) of this section, and (d)(1) of this section, within thirty days 80.1426 for the volume of renewable
all the following additional information: following the date of the independent fuel as measured at the port of entry,
(i) The name and EPA registration third partys inspection. This report and acquire and retire that amount of
number of the company that produced shall include a description of the RINs in accordance with paragraph
the RFSFRRF. method used to determine the identity (k)(3) of this section.
(ii) The identification of the of the foreign producer facility at which (f) Foreign producer commitments.
renewable fuel as RFSFRRF. the renewable fuel was produced, Any RIN-generating foreign producer
(iii) The identification of the assurance that the renewable fuel shall commit to and comply with the
renewable fuel by type, D code, and remained segregated as specified in provisions contained in this paragraph
number of RINs generated. paragraph (j)(1) of this section, and a (f) as a condition to being approved as
(iv) The volume of RFSFRRF, description of the renewable fuels a foreign producer under this subpart.
standardized per 80.1426(f)(8), being movement and storage between (1) Any United States Environmental
transported, in gallons. production at the source facility and Protection Agency inspector or auditor
(3) On each occasion when any vessel loading. must be given full, complete, and
person transfers custody or title to any (3) The independent third party must: immediate access to conduct
RFSFRRF prior to its being imported (i) Be approved in advance by EPA, inspections and audits of the foreign
into the United States, it must include based on a demonstration of ability to producer facility.
all the following information as part of perform the procedures required in this (i) Inspections and audits may be
the product transfer document paragraph (d); either announced in advance by EPA, or
information: (ii) Be independent under the criteria unannounced.
(i) Designation of the renewable fuel specified in 80.65(e)(2)(iii); and (ii) Access will be provided to any
as RFSFRRF. (iii) Sign a commitment that contains location where:
(ii) The certification required under the provisions specified in paragraph (f) (A) Renewable fuel is produced;
paragraph (c)(2) of this section. of this section with regard to activities, (B) Documents related to renewable
(d) Load port independent testing and fuel producer operations are kept; and
facilities and documents relevant to
producer identification. (C) RFSFRRF is stored or transported
compliance with the requirements of
(1) On each occasion that RFSFRRF between the foreign producer and the
is loaded onto a vessel for transport to this paragraph (d).
(e) Comparison of load port and port United States, including storage tanks,
the United States the RIN-generating vessels and pipelines.
of entry testing.
foreign producer shall have an (1)(i) Any RIN-generating foreign (iii) EPA inspectors and auditors may
independent third party do all the producer and any United States be EPA employees or contractors to
following: EPA.
importer of RFSFRRF shall compare
(i) Inspect the vessel prior to loading (iv) Any documents requested that are
the results from the load port testing
and determine the volume of any tank related to matters covered by
bottoms. under paragraph (d) of this section, with
inspections and audits must be
(ii) Determine the volume of RFS the port of entry testing as reported
provided to an EPA inspector or auditor
FRRF, standardized per 80.1426(f)(8), under paragraph (k) of this section, for
on request.
loaded onto the vessel (exclusive of any the volume of renewable fuel, (v) Inspections and audits may
tank bottoms before loading). standardized per 80.1426(f)(8), except include review and copying of any
(iii) Obtain the EPA-assigned as specified in paragraph (e)(1)(ii) of this documents related to the following:
registration number of the foreign section. (A) The volume of RFSFRRF.
producer. (ii) Where a vessel transporting RFS (B) The proper classification of
(iv) Determine the name and country FRRF offloads the renewable fuel at renewable fuel as being RFSFRRF.
of registration of the vessel used to more than one United States port of (C) Transfers of title or custody to
transport the RFSFRRF to the United entry, the requirements of paragraph RFSFRRF.
States. (e)(1)(i) of this section do not apply at (D) Work performed and reports
(v) Determine the date and time the subsequent ports of entry if the United prepared by independent third parties
vessel departs the port serving the States importer obtains a certification and by independent auditors under the
foreign producer. from the vessel owner that the requirements of this section, including
(vi) Review original documents that requirements of paragraph (e)(1)(i) of work papers.
reflect movement and storage of the this section were met and that the vessel (vi) Inspections and audits by EPA
RFSFRRF from the RIN-generating has not loaded any renewable fuel may include interviewing employees.
foreign producer to the load port, and between the first United States port of (vii) Any employee of the foreign
from this review determine all the entry and the subsequent ports of entry. producer must be made available for
following: (2)(i) If the temperature-corrected interview by the EPA inspector or
(A) The facility at which the RFS volumes, after accounting for tank auditor, on request, within a reasonable
FRRF was produced. bottoms, determined at the port of entry time period.
(B) That the RFSFRRF remained and at the load port differ by more than (viii) English language translations of
segregated from Non-RFSFRRF and one percent, the number of RINs any documents must be provided to an
EPA inspector or auditor, on request, included in the foreign producers liquidity and value being readily
within 10 working days. application to be an approved foreign available to the United States provided
(ix) English language interpreters producer under this subpart. EPA agrees in advance as to the
must be provided to accompany EPA (g) Sovereign immunity. By alternative commitment.
inspectors and auditors, on request. submitting an application to be an (3) Bonds posted under this paragraph
(2) An agent for service of process approved foreign producer under this (h) shall:
located in the District of Columbia shall subpart, or by producing and exporting (i) Be used to satisfy any judicial
be named, and service on this agent renewable fuel to the United States judgment that results from an
constitutes service on the foreign under such approval, the foreign administrative or judicial enforcement
producer or any employee of the foreign producer, and its agents and employees, action for conduct in violation of this
producer for any action by EPA or without exception, become subject to subpart, including where such conduct
otherwise by the United States related to the full operation of the administrative violates the False Statements
the requirements of this subpart. and judicial enforcement powers and Accountability Act of 1996 (18 U.S.C.
(3) The forum for any civil or criminal provisions of the United States without 1001) and section 113(c)(2) of the Clean
enforcement action related to the limitation based on sovereign immunity, Air Act (42 U.S.C. 7413);
provisions of this section for violations with respect to actions instituted against (ii) Be provided by a corporate surety
of the Clean Air Act or regulations the foreign producer, its agents and that is listed in the United States
promulgated thereunder shall be employees in any court or other tribunal Department of Treasury Circular 570
governed by the Clean Air Act, in the United States for conduct that Companies Holding Certificates of
including the EPA administrative forum violates the requirements applicable to Authority as Acceptable Sureties on
where allowed under the Clean Air Act. the foreign producer under this subpart, Federal Bonds; and
(4) United States substantive and (iii) Include a commitment that the
including conduct that violates the
procedural laws shall apply to any civil bond will remain in effect for at least
False Statements Accountability Act of
or criminal enforcement action against five years following the end of latest
1996 (18 U.S.C. 1001) and section
the foreign producer or any employee of annual reporting period that the foreign
113(c)(2) of the Clean Air Act (42 U.S.C.
the foreign producer related to the producer produces renewable fuel
7413).
provisions of this section. (h) Bond posting. Any RIN-generating pursuant to the requirements of this
(5) Applying to be an approved subpart.
foreign producer shall meet the
foreign producer under this section, or (4) On any occasion a foreign
requirements of this paragraph (h) as a
producing or exporting renewable fuel producer bond is used to satisfy any
condition to approval as a foreign
under such approval, and all other judgment, the foreign producer shall
producer under this subpart.
actions to comply with the requirements increase the bond to cover the amount
(1) The RIN-generating foreign
of this subpart relating to such approval used within 90 days of the date the
producer shall post a bond of the
constitute actions or activities covered bond is used.
amount calculated using the following
by and within the meaning of the (i) English language reports. Any
equation:
provisions of 28 U.S.C. 1605(a)(2), but document submitted to EPA by a foreign
solely with respect to actions instituted Bond = G * $ 0.01
producer shall be in English, or shall
against the foreign producer, its agents Where: include an English language translation.
and employees in any court or other Bond = amount of the bond in U.S. dollars. (j) Prohibitions.
tribunal in the United States for conduct G = the greater of: the largest volume of (1) No person may combine RFS
that violates the requirements renewable fuel produced by the foreign FRRF with any Non-RFSFRRF, and no
applicable to the foreign producer under producer and exported to the United person may combine RFSFRRF with
this subpart, including conduct that States, in gallons, during a single any RFSFRRF produced at a different
violates the False Statements calendar year among the five preceding
calendar years, or the largest volume of
production facility, until the importer
Accountability Act of 1996 (18 U.S.C. renewable fuel that the foreign producers has met all the requirements of
1001) and section 113(c)(2) of the Clean expects to export to the Unites States paragraph (k) of this section.
Air Act (42 U.S.C. 7413). during any calendar year identified in (2) No foreign producer or other
(6) The foreign producer, or its agents the Production Outlook Report required person may cause another person to
or employees, will not seek to detain or by 80.1449. If the volume of renewable commit an action prohibited in
to impose civil or criminal remedies fuel exported to the United States paragraph (j)(1) of this section, or that
against EPA inspectors or auditors for increases above the largest volume otherwise violates the requirements of
actions performed within the scope of identified in the Production Outlook this section.
EPA employment or contract related to Report during any calendar year, the (3) No foreign producer and importer
foreign producer shall increase the bond
the provisions of this section. may generate RINs for the same volume
to cover the shortfall within 90 days.
(7) The commitment required by this of renewable fuel.
paragraph (f) shall be signed by the (2) Bonds shall be posted by any of (4) A foreign producer of renewable
owner or president of the foreign the following methods: fuel is prohibited from generating RINs
producer company. (i) Paying the amount of the bond to in excess of the number for which the
(8) In any case where RFSFRRF the Treasurer of the United States. bond requirements of this section have
produced at a foreign producer facility (ii) Obtaining a bond in the proper been satisfied.
is stored or transported by another amount from a third party surety agent (k) Requirements for United States
company between the production that is payable to satisfy United States importers of RFSFRRF. Any United
facility and the vessel that transports the administrative or judicial judgments States importers of RFSFRRF shall
RFSFRRF to the United States, the against the foreign producer, provided meet all the following requirements:
foreign producer shall obtain from each EPA agrees in advance as to the third (1) Renewable fuel shall be classified
such other company a commitment that party and the nature of the surety as RFSFRRF according to the
meets the requirements specified in agreement. designation by the foreign producer if
paragraphs (f)(1) through (7) of this (iii) An alternative commitment that this designation is supported by product
section, and these commitments shall be results in assets of an appropriate transfer documents prepared by the
foreign producer as required in prohibit the commingling of RFSFRRF the vessel. Use these records to
paragraph (c) of this section. with Non-RFSFRRF or RFSFRRF from determine whether the RFSFRRF was
(2) For each renewable fuel batch other foreign producers. produced at the foreign producers
classified as RFSFRRF, any United (ii) Attest procedures to be conducted facility that is the subject of the attest
States importer shall have an annually by an independent third party engagement, and whether the RFS
independent third party do all the that review loading records and import FRRF was mixed with any Non-RFS
following: documents based on volume FRRF or any RFSFRRF produced at a
(i) Determine the volume of renewable reconciliation to confirm that all RFS different facility.
fuel, standardized per 80.1426(f)(8), in FRRF remains segregated. (4) Select a sample from the list of
the vessel. (3) The petition described in this vessels identified in paragraph (m)(2) of
(ii) Use the foreign producers RFS section must be submitted to EPA along this section used to transport RFS
FRRF certification to determine the with the application for approval as a FRRF, in accordance with the guidelines
name and EPA-assigned registration foreign producer under this subpart. in 80.127, and for each vessel selected
number of the foreign producer that (m) Additional attest requirements for perform the following:
produced the RFSFRRF. producers of RFSFRRF. The following (i) Obtain a commercial document of
(iii) Determine the name and country additional procedures shall be carried general circulation that lists vessel
of registration of the vessel used to out by any producer of RFSFRRF as arrivals and departures, and that
transport the RFSFRRF to the United part of the attest engagement required includes the port and date of departure
States. for renewable fuel producers under this
(iv) Determine the date and time the of the vessel, and the port of entry and
subpart M. date of arrival of the vessel.
vessel arrives at the United States port (1) Obtain listings of all tenders of
of entry. (ii) Agree the vessels departure and
RFSFRRF. Agree the total volume of arrival locations and dates from the
(3) Where the importer is required to tenders from the listings to the volumes
retire RINs under paragraph (e)(2) of this independent third party and United
determined by the third party under States importer reports to the
section, the importer must report the paragraph (d) of this section.
retired RINs in the applicable reports information contained in the
(2) For each tender under paragraph
under 80.1451. commercial document.
(m)(1) of this section, where the
(4) Any importer shall submit reports (5) Obtain a separate listing of the
renewable fuel is loaded onto a marine
within 30 days following the date any tenders under this paragraph (m)(5)
vessel, report as a finding the name and
vessel transporting RFSFRRF arrives at where the RFSFRRF is loaded onto a
country of registration of each vessel,
the United States port of entry to all the marine vessel. Select a sample from this
and the volumes of RFSFRRF loaded
following: listing in accordance with the
onto each vessel.
(i) The Administrator, containing the (3) Select a sample from the list of guidelines in 80.127, and obtain a
information determined under vessels identified in paragraph (m)(2) of commercial document of general
paragraph (k)(2) of this section. this section used to transport RFS circulation that lists vessel arrivals and
(ii) The foreign producer, containing departures, and that includes the port
FRRF, in accordance with the guidelines
the information determined under and date of departure and the ports and
in 80.127, and for each vessel selected
paragraph (k)(2)(i) of this section, and dates where the renewable fuel was
perform all the following:
including identification of the port at (i) Obtain the report of the offloaded for the selected vessels.
which the product was offloaded, and Determine and report as a finding the
independent third party, under
any RINs retired under paragraph (e)(2) country where the renewable fuel was
paragraph (d) of this section, and of the
of this section. offloaded for each vessel selected.
(5) Any United States importer shall United States importer under paragraph
(k) of this section. (6) In order to complete the
meet all other requirements of this requirements of this paragraph (m) an
(A) Agree the information in these
subpart for any imported renewable fuel auditor shall:
reports with regard to vessel
that is not classified as RFSFRRF (i) Be independent of the foreign
identification and renewable fuel
under paragraph (k)(1) of this section. producer;
(l) Truck imports of RFSFRRF volume.
(B) Identify, and report as a finding, (ii) Be licensed as a Certified Public
produced by a foreign producer. Accountant in the United States and a
(1) Any foreign producer whose RFS each occasion the load port and port of
entry volume results differ by more than citizen of the United States, or be
FRRF is transported into the United
the amount allowed in paragraph (e) of approved in advance by EPA based on
States by truck may petition EPA to use
this section, and determine whether the a demonstration of ability to perform the
alternative procedures to meet all the
importer retired the appropriate amount procedures required in 80.125
following requirements:
(i) Certification under paragraph (c)(2) of RINs as required under paragraph through 80.127, 80.130, 80.1464, and
of this section. (e)(2) of this section, and submitted the this paragraph (m); and
(ii) Load port and port of entry testing applicable reports under 80.1451 in (iii) Sign a commitment that contains
under paragraphs (d) and (e) of this accordance with paragraph (k)(4) of this the provisions specified in paragraph (f)
section. section. of this section with regard to activities
(iii) Importer testing under paragraph (ii) Obtain the documents used by the and documents relevant to compliance
(k)(2) of this section. independent third party to determine with the requirements of 80.125
(2) These alternative procedures must transportation and storage of the RFS through 80.127, 80.130, 80.1464, and
ensure RFSFRRF remains segregated FRRF from the foreign producers this paragraph (m).
from Non-RFSFRRF until it is facility to the load port, under (n) Withdrawal or suspension of
imported into the United States. The paragraph (d) of this section. Obtain foreign producer approval. EPA may
petition will be evaluated based on tank activity records for any storage tank withdraw or suspend a foreign
whether it adequately addresses all of where the RFSFRRF is stored, and producers approval where any of the
the following: activity records for any mode of following occur:
(i) Contracts with any facilities that transportation used to transport the (1) A foreign producer fails to meet
receive and/or transport RFSFRRF that RFSFRRF prior to being loaded onto any requirement of this section.
(2) A foreign government fails to American Samoa, and the of the Clean Air Act or regulations
allow EPA inspections or audits as Commonwealth of the Northern Mariana promulgated thereunder shall be
provided in paragraph (f)(1) of this Islands (collectively referred to in this governed by the Clean Air Act,
section. section as the United States) that has including the EPA administrative forum
(3) A foreign producer asserts a claim been approved by EPA to own RINs. where allowed under the Clean Air Act.
of, or a right to claim, sovereign (b) General Requirement. An (4) United States substantive and
immunity in an action to enforce the approved foreign RIN owner must meet procedural laws shall apply to any civil
requirements in this subpart. all requirements that apply to parties or criminal enforcement action against
(4) A foreign producer fails to pay a who own RINs under this subpart. the foreign RIN owner or any employee
civil or criminal penalty that is not (c) Foreign RIN owner commitments. of the foreign RIN owner related to the
satisfied using the foreign producer Any person shall commit to and comply provisions of this section.
bond specified in paragraph (h) of this with the provisions contained in this (5) Submitting an application to be a
section. paragraph (c) as a condition to being foreign RIN owner, and all other actions
(o) Additional requirements for approved as a foreign RIN owner under to comply with the requirements of this
applications, reports and certificates. this subpart. subpart constitute actions or activities
Any application for approval as a (1) Any United States Environmental covered by and within the meaning of
foreign producer, alternative procedures Protection Agency inspector or auditor the provisions of 28 U.S.C. 1605(a)(2),
under paragraph (l) of this section, any must be given full, complete, and but solely with respect to actions
report, certification, or other submission immediate access to conduct instituted against the foreign RIN owner,
required under this section shall be: inspections and audits of the foreign its agents and employees in any court or
(1) Submitted in accordance with RIN owners place of business. other tribunal in the United States for
procedures specified by the (i) Inspections and audits may be conduct that violates the requirements
Administrator, including use of any either announced in advance by EPA, or applicable to the foreign RIN owner
forms that may be specified by the unannounced. under this subpart, including conduct
Administrator. (ii) Access will be provided to any that violates the False Statements
(2) Signed by the president or owner location where documents related to Accountability Act of 1996 (18 U.S.C.
of the foreign producer company, or by RINs the foreign RIN owner has 1001) and section 113(c)(2) of the Clean
that persons immediate designee, and obtained, sold, transferred or held are Air Act (42 U.S.C. 7413).
shall contain the following declaration: kept. (6) The foreign RIN owner, or its
I hereby certify: (1) That I have actual (iii) Inspections and audits may be by agents or employees, will not seek to
authority to sign on behalf of and to EPA employees or contractors to EPA. detain or to impose civil or criminal
bind [INSERT NAME OF FOREIGN (iv) Any documents requested that are remedies against EPA inspectors or
PRODUCER] with regard to all related to matters covered by auditors, whether EPA employees or
statements contained herein; (2) that I inspections and audits must be EPA contractors, for actions performed
am aware that the information provided to an EPA inspector or auditor within the scope of EPA employment
contained herein is being Certified, or on request. related to the provisions of this section.
submitted to the United States (v) Inspections and audits by EPA (7) The commitment required by this
Environmental Protection Agency, may include review and copying of any paragraph (c) shall be signed by the
under the requirements of 40 CFR part documents related to the following: owner or president of the foreign RIN
80, subpart M, and that the information (A) Transfers of title to RINs. owner business.
is material for determining compliance (B) Work performed and reports (d) Sovereign immunity. By
under these regulations; and (3) that I prepared by independent auditors under submitting an application to be a foreign
have read and understand the the requirements of this section, RIN owner under this subpart, the
information being Certified or including work papers. foreign entity, and its agents and
submitted, and this information is true, (vi) Inspections and audits by EPA employees, without exception, become
complete and correct to the best of my may include interviewing employees. subject to the full operation of the
knowledge and belief after I have taken (vii) Any employee of the foreign RIN administrative and judicial enforcement
reasonable and appropriate steps to owner must be made available for powers and provisions of the United
verify the accuracy thereof. I affirm that interview by the EPA inspector or States without limitation based on
I have read and understand the auditor, on request, within a reasonable sovereign immunity, with respect to
provisions of 40 CFR part 80, subpart M, time period. actions instituted against the foreign
including 40 CFR 80.1465 apply to (viii) English language translations of RIN owner, its agents and employees in
[INSERT NAME OF FOREIGN any documents must be provided to an any court or other tribunal in the United
PRODUCER]. Pursuant to Clean Air Act EPA inspector or auditor, on request, States for conduct that violates the
section 113(c) and 18 U.S.C. 1001, the within 10 working days. requirements applicable to the foreign
penalty for furnishing false, incomplete (ix) English language interpreters RIN owner under this subpart, including
or misleading information in this must be provided to accompany EPA conduct that violates the False
certification or submission is a fine of inspectors and auditors, on request. Statements Accountability Act of 1996
up to $10,000 U.S., and/or (2) An agent for service of process (18 U.S.C. 1001) and section 113(c)(2) of
imprisonment for up to five years.. located in the District of Columbia shall the Clean Air Act (42 U.S.C. 7413).
be named, and service on this agent (e) Bond posting. Any foreign entity
80.1467 What are the additional constitutes service on the foreign RIN shall meet the requirements of this
requirements under this subpart for a owner or any employee of the foreign paragraph (e) as a condition to approval
foreign RIN owner? RIN owner for any action by EPA or as a foreign RIN owner under this
(a) Foreign RIN owner. For purposes otherwise by the United States related to subpart.
of this subpart, a foreign RIN owner is the requirements of this subpart. (1) The foreign entity shall post a
a person located outside the United (3) The forum for any civil or criminal bond of the amount calculated using the
States, the Commonwealth of Puerto enforcement action related to the following equation:
Rico, the Virgin Islands, Guam, provisions of this section for violations Bond = G * $ 0.01
Where: five years following the end of latest (2) A foreign government fails to
Bond = amount of the bond in U.S. dollars. reporting period in which the foreign allow EPA inspections as provided in
G = the total of the number of gallon-RINs the RIN owner obtains, sells, transfers, or paragraph (c)(1) of this section.
foreign entity expects to sell or transfer holds RINs. (3) A foreign RIN owner asserts a
during the first calendar year that the (4) On any occasion a foreign RIN claim of, or a right to claim, sovereign
foreign entity is a RIN owner, plus the immunity in an action to enforce the
number of gallon-RINs the foreign entity owner bond is used to satisfy any
expects to sell or transfer during the next judgment, the foreign RIN owner shall requirements in this subpart.
four calendar years. After the first increase the bond to cover the amount (4) A foreign RIN owner fails to pay
calendar year, the bond amount shall be used within 90 days of the date the a civil or criminal penalty that is not
based on the actual number of gallon- bond is used. satisfied using the foreign RIN owner
RINs sold or transferred during the (f) English language reports. Any bond specified in paragraph (e) of this
current calendar year and the number document submitted to EPA by a foreign section.
held at the conclusion of the current RIN owner shall be in English, or shall (j) Additional requirements for
averaging year, plus the number of applications, reports and certificates.
gallon-RINs sold or transferred during include an English language translation.
(g) Prohibitions. Any application for approval as a
the four most recent calendar years
(1) A foreign RIN owner is prohibited foreign RIN owner, any report,
preceding the current calendar year. For
any year for which there were fewer than from obtaining, selling, transferring, or certification, or other submission
four preceding years in which the foreign holding any RIN that is in excess of the required under this section shall be:
entity sold or transferred RINs, the bond number for which the bond (1) Submitted in accordance with
shall be based on the total of the number requirements of this section have been procedures specified by the
of gallon-RINs sold or transferred during
satisfied. Administrator, including use of any
the current calendar year and the forms that may be specified by the
number held at the end of the current (2) Any RIN that is sold, transferred,
or held that is in excess of the number Administrator.
calendar year, plus the number of gallon- (2) Signed by the president or owner
RINs sold or transferred during any for which the bond requirements of this
of the foreign RIN owner company, or
calendar year preceding the current section have been satisfied is an invalid
calendar year, plus the number of gallon-
by that persons immediate designee,
RIN under 80.1431.
RINs expected to be sold or transferred and shall contain the following
(3) Any RIN that is obtained from a
during subsequent calendar years, the declaration:
person located outside the United States I hereby certify: (1) That I have actual
total number of years not to exceed four
calendar years in addition to the current
that is not an approved foreign RIN authority to sign on behalf of and to
calendar year. owner under this section is an invalid bind [INSERT NAME OF FOREIGN RIN
RIN under 80.1431. OWNER] with regard to all statements
(2) Bonds shall be posted by doing (4) No foreign RIN owner or other
any of the following: contained herein; (2) that I am aware
person may cause another person to that the information contained herein is
(i) Paying the amount of the bond to
commit an action prohibited in this being Certified, or submitted to the
the Treasurer of the United States.
paragraph (g), or that otherwise violates United States Environmental Protection
(ii) Obtaining a bond in the proper
the requirements of this section. Agency, under the requirements of 40
amount from a third party surety agent
(h) Additional attest requirements for CFR part 80, subpart M, and that the
that is payable to satisfy United States
foreign RIN owners. The following information is material for determining
administrative or judicial judgments
additional requirements apply to any compliance under these regulations; and
against the foreign RIN owner, provided
foreign RIN owner as part of the attest (3) that I have read and understand the
EPA agrees in advance as to the third
engagement required for RIN owners information being Certified or
party and the nature of the surety
under this subpart M. submitted, and this information is true,
agreement.
(iii) An alternative commitment that (1) The attest auditor must be complete and correct to the best of my
results in assets of an appropriate independent of the foreign RIN owner. knowledge and belief after I have taken
liquidity and value being readily (2) The attest auditor must be licensed reasonable and appropriate steps to
available to the United States, provided as a Certified Public Accountant in the verify the accuracy thereof. I affirm that
EPA agrees in advance as to the United States and a citizen of the United I have read and understand the
alternative commitment. States, or be approved in advance by provisions of 40 CFR part 80, subpart M,
(3) All the following shall apply to EPA based on a demonstration of ability including 40 CFR 80.1467 apply to
bonds posted under this paragraph (e); to perform the procedures required in [INSERT NAME OF FOREIGN RIN
bonds shall: 80.125 through 80.127, 80.130, and OWNER]. Pursuant to Clean Air Act
(i) Be used to satisfy any judicial 80.1464. section 113(c) and 18 U.S.C. 1001, the
judgment that results from an (3) The attest auditor must sign a penalty for furnishing false, incomplete
administrative or judicial enforcement commitment that contains the or misleading information in this
action for conduct in violation of this provisions specified in paragraph (c) of certification or submission is a fine of
subpart, including where such conduct this section with regard to activities and up to $10,000 U.S., and/or
violates the False Statements documents relevant to compliance with imprisonment for up to five years..
Accountability Act of 1996 (18 U.S.C. the requirements of 80.125 through
1001) and section 113(c)(2) of the Clean 80.127, 80.130, and 80.1464. 80.1468 Incorporation by reference.
Air Act (42 U.S.C. 7413). (i) Withdrawal or suspension of (a) Certain material is incorporated by
(ii) Be provided by a corporate surety foreign RIN owner status. EPA may reference into this part with the
that is listed in the United States withdraw or suspend its approval of a approval of the Director of the Federal
Department of Treasury Circular 570 foreign RIN owner where any of the Register under 5 U.S.C. 552(a) and 1
Companies Holding Certificates of following occur: CFR part 51. To enforce any edition
Authority as Acceptable Sureties on (1) A foreign RIN owner fails to meet other than that specified in this section,
Federal Bonds. any requirement of this section, the Environmental Protection Agency
(iii) Include a commitment that the including, but not limited to, the bond (EPA) must publish notice of change in
bond will remain in effect for at least requirements. the Federal Register and the material
must be available to the public. All Pennsylvania 19428 (18002621373, Middle Distillate Fuels, Approved 2009;
approved material is available for www.astm.org). IBR approved for 80.1401.
inspection at the National Archives and (1) ASTM D 125008 (ASTM D (5) ASTM D 686608 (ASTM D
Records Administration (NARA). For 1250), Standard Guide for Use of the 6866), Standard Test Methods for
information on the availability of this Petroleum Measurement Tables, Determining the Biobased Content of
material at NARA, call 2027416030 or Approved 2008; IBR approved for Solid, Liquid, and Gaseous Samples
go to: http://www/archives.gov/ 80.1426(f)(8)(ii)(B). Using Radiocarbon Analysis, Approved
federal_register/code_of (2) ASTM D 444207 (ASTM D 2008; IBR approved for
_federal_regulations/ibr_locations.html. 4442), Standard Test Methods for 80.1426(f)(9)(ii) and 80.1430(e)(2).
This material is also available for Direct Moisture Content Measurement (6) ASTM E 71187 (ASTM E 711),
inspection at the EPA Docket Center, of Wood and Wood-Base Materials, Standard Test Method for Gross
Docket No. EPAHQOAR20050161, Approved 2007; IBR approved for Calorific Value of Refuse-Derived Fuel
80.1426(f)(7)(v)(B). by the Bomb Calorimeter, Reapproved
EPA/DC, EPA West, Room 3334, 1301
(3) ASTM D 444408 (ASTM D
Constitution Ave., NW., Washington 2004; IBR approved for
4444), Standard Test Method for
DC. The telephone number for the Air 80.1426(f)(7)(v)(A).
Laboratory Standardization and
Docket is (202) 5661742. Also, this Calibration of Hand-Held Moisture (7) ASTM E 87082 (ASTM E 870),
material is available from the source Meters, Approved 2008; IBR approved Standard Test Methods for Analysis of
listed in paragraph (b) of this section. for 80.1426(f)(7)(v)(B). Wood Fuels, Reapproved 2006); IBR
(b) American Society for Testing and (4) ASTM D 675109 (ASTM D approved for 80.1426(f)(7)(v)(A).
Materials, 100 Barr Harbor Drive, P.O. 6751), Standard Specification for [FR Doc. 20103851 Filed 32510; 8:45 am]
Box C700, West Conshohocken, Biodiesel Fuel Blend Stock (B100) for BILLING CODE 656050P

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Friday,

March 26, 2010

Category NAICS 1 codes SIC 2 codes Examples of potentially regulated entities

Industry .................................................................. 324110 2911 Petroleum Refineries.

iv. Summary of Cellulosic Feedstocks for 2. Ozone 7. International Impacts

BILLING CODE 656050C

emission impacts after the program is make the threshold determinations

Emissions and Air Quality

GHG Emissions ......................................................... 138 million metric tons .................................................................................... V.D.

Other Environmental Impacts

Gasoline Costs .......................................................... 2.4/gal ............................................................................................................ VII.D.

Diesel Costs .............................................................. 12.1 /gal ........................................................................................................ VII.D.

Corn ........................................................................... +8.2% .................................................................................................................. VIII.A.

Food ........................................................................... +$10 per capita ................................................................................................... VIII.A.

Energy Security ......................................................... +$2.6 Billion ........................................................................................................ VIII.B.

TABLE II.A1FINAL D CODE DEFINITIONS

1 ............................................................ Cellulosic biomass ethanol ................................................................................. Not applicable.

3 The production of biodiesel (mono alkyl esters)

in homes in order to determine GHG performance thresholds for each of

Structure and Reproduction, by Harold C. Bold and

Cropland and Pastureland ....................................................................................................................................... 365 367

Total Land ......................................................................................................................................................... 402 404

typically include incidental allowed, the producer is required to

electricity that is produced by the co-

TABLE II.D.31APPROACH TO ASSIGNING MULTIPLE D CODES FOR MULTIPLE APPLICABLE PATHWAYS

TABLE II.D.31APPROACH TO ASSIGNING MULTIPLE D CODES FOR MULTIPLE APPLICABLE PATHWAYSContinued

because it relies on projections of the renewable gasoline and diesel volumes

Gi = Amount of gasoline projected to be used RGSi = Amount of renewable fuel blended

diesel that is projected to be consumed consumed in Alaska or a U.S. territory in

permits a deficit carryover from one

TABLE II.G.31RINS THAT CAN BE USED TO MEET EACH STANDARD

Cellulosic biofuel ....................................................................... RVOCB ...................................................................................... 3 and 7.

TABLE II.G.4.a1TREATMENT OF RFS1 RINS FOR RFS2 COMPLIANCE PURPOSES

categories of renewable fuel (cellulosic

to meet its cellulosic biofuel obligation.

would have an independent market

To implement EISAs restriction on In the extreme, removal of the cap 1. BackgroundRFS1

comparison to parties with excess RINs. on small business refiners. exemption.

TABLE IV.A.11REFERENCE CASE RENEWABLE FUEL VOLUMES IN 2022

Advanced biofuel Non-advanced

Advanced biofuel Non-ad-

TABLE IV.A.31CONTROL CASE PROJECTED RENEWABLE FUEL VOLUMES IN 2022

Advanced biofuel Non-ad-

Low-Ethanol Straight Vol-

RIA for more detail on three control a. Historic/Current Production

ethanol producers. Section 1.5.1 of the RIA.

then. on hold. Surge to End; U.S. Customs Loophole Closed Oct.

Total .................. .................................. .................................. .................................. 30.35 ........................ 5.04

commercial sale. designed to both facilitate research and

81 Refer to December 4, 2009 DOE press release

Labrie on December 14, 2009. in 2010. of the RIA.

analysis was used to inform the air quality

TABLE IV.B.41SUMMARY OF U.S. BIODIESEL PRODUCTION AND USE

2004 ........................................... 245 28 .............................................. 11 27 .............................................. 96

Total production capacity on-line (million gal/yr) ............................................................................................................................. 2,610 1,968

Base Acid- Renewable

Virgin vegetable oil ...................................................................................................................... 660 ........................ ........................

120 At least one current ethanol unit train receipt

122 See Section 1.6 of the RIA for additional

132 The Model T was also capable of running on

kerosene. primary mid-ethanol case of 22.2 billion

outscope/0087A.html. HQOAR200501612124.1). Update (Table 2).

139 The gasoline energy demand forecast provided