EPA Finalizes Regulations for the
National Renewable Fuel Standard
Program for 2010 and Beyond
The U.S. Environmental Protection Agency is finalizing revisions
to the National Renewable Fuel Standard program (commonly
known as the RFS program). This rule makes changes to the Renewable
Fuel Standard program as required by the Energy Independence and
Security Act of 2007 (EISA). The revised statutory requirements
establish new specific annual volume standards for cellulosic biofuel,
biomass'based diesel, advanced biofuel, and total renewable fuel that
must be used in transportation fuel. The revised statutory requirements
also include new definitions and criteria for both renewable fuels and
the feedstocks used to produce them, including new greenhouse gas
(GHG) emission thresholds as determined by lifecycle analysis. The
regulatory requirements for RFS will apply to domestic and foreign
producers and importers of renewable fuel used in the U.S.
Key Act ions
This final action lays the foundation for achieving significant reductions of greenhouse
gas emissions from the use of renewable fuels, reductions of imported petroleum and
further development and expansion of our nation's renewable fuels sector.
This action is also setting the 2010 RFS volume standard at 12.95 billion gallons
(bg). Further, for the first time, EPA is setting volume standards for specific categories
of renewable fuels including cellulosic, biomass-based diesel, and total advanced
renewable fuels. For 2010, the cellulosic standard is being set at 6.5 million gallons
(mg); the biomass-based diesel standard is being set at 1.15 bg, (combining the 2009
and 2010 standards as proposed).
United States
Environmental Protection
Agency
Office of Transportation and Air Quality
EPA-420-F-10-007
February 2010
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In order to qualify for these new volume categories, fuels must demonstrate that they meet
certain minimum greenhouse gas reduction standards, based on a lifecycle assessment, in
comparison to the petroleum fuels they displace.
For its final determinations, EPA is using the best available models and has incorporated up-
dated information based on:
• significant new scientific data available to the agency
• rigorous independent peer review
• extensive public comments
For the fuel pathways modeled, the following meet or exceed the respective required minimum
GHG reduction standards:
• corn based ethanol plants using new efficient technologies
• soy based biodiesel
• biodiesel made from waste grease, oils, and fats
• sugarcane based ethanol
Fuels derived from cellulosic materials meet, and generally significantly exceed, the minimum
GHG reduction standard.
Additional information on these and other key changes can be found below.
New Renewable Volume Standards
This final rule revises the annual renewable fuel standards (RFS2) and makes the necessary pro-
gram modifications as set forth in EISA. Of these modifications, several are notable. First, the
required renewable fuel volume continues to increase under RFS2, reaching 36 bg by 2022. The
following chart shows the volume requirements from EISA:
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EISA Renewable Fuel Volume Requirements (billion gallons)
Year
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023+
Cellulosic
biofuel
requirement
n/a
n/a
0.1
0.25
0.5
1.0
1.75
3.0
4.25
5.5
7.0
8.5
10.5
13.5
16.0
b
Biomass-
based diesel
requirement
n/a
0.5
0.65
0.80
1.0
a
a
a
a
a
a
a
a
a
a
b
Total Advanced
biofuel
requirement
n/a
0.6
0.95
1.35
2.0
2.75
3.75
5.5
7.25
9.0
11.0
13.0
15.0
18.0
21.0
b
Total renewable
fuel requirement
9.0
11.1
12.95
13.95
15.2
16.55
18.15
20.5
22.25
24.0
26.0
28.0
30.0
33.0
36.0
b
" To be determined by
b To be determined by
EPA through a future
EPA through a future
rulemaking, but no less than 1.0 billion gallons.
rulemaking.
EISA Expands Coverage to Include Diesel and Nonroad Fuels
EISA expanded the RFS program beyond gasoline to generally cover all transportation fuel.
This now includes gasoline and diesel fuel intended for use in highway vehicles and engines,
and nonroad, locomotive and marine engines. These provisions continue to apply to refiners, blenders,
and importers of transportation fuel (with limited flexibilities for small refiners), and their percentage
standards apply to the total amount of gasoline and diesel they produce for such use.
2010 Standards
For 2010, EISA set a total renewable fuel standard of 12.95 billion gallons. This total volume,
presented as a fraction of a refiner's or importer's gasoline and diesel volume, must be renewable
fuel. The final 2010 standards are shown in below.
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Standards for 2010
Fuel Category
Cellulosic biofuel
Biomass-based diesel
Total Advanced biofuel
Renewable fuel
Percentage of
Fuel Required to
be Renewable
0.004%
*1.10%
0.61%
8.25%
Volume of
Renewable Fuel
(in billion gal)
0.0065
*1.15
0.95
12.95
^Combined 2009/2010 Biomass-Based Diesel Volumes Applied in 2010
Setting the 2010 Cellulosic Standard
EISA requires the Administrator to evaluate and make an appropriate market determination
for setting the Cellulosic standard each year. Based on an updated market analysis considering
detailed information from pilot and demonstration scale plants, an Energy Information
Administration analysis, and other publically and privately available market information, we
are setting the 2010 Cellulosic biofuel standard at 6.5 million ethanol-equivalent gallons. While
this volume is significantly less than that set forth in EISA for 2010, a number of companies and
projects appear to be poised to expand production over the next several years. Since the cellulosic
standard is lower than the level otherwise required by EISA, we will also make cellulosic
credits available to obligated parties for end-of-year compliance, should they need them, at
a price of $1.56 per gallon (gallon'RIN). In addition, while we have lowered the cellulosic
standard below the level otherwise required in the Act, we have maintained the advanced
biofuel and total renewable standards as that set in EISA for 2010. We are continuing to assess
the growth of the cellulosic biofuel industry and intend to issue a notice of proposed rulemaking
(NPRM) each spring and a final rule by November 30 of each year to set the renewable fuel
standards for each ensuing year.
Treatment of Biomass-based Diesel in 2010
This rule also includes special provisions to account for the 2009 biomass-based diesel volume
requirements in EISA. As described in the final rule, in November 2008 we used the new total
renewable fuel volume of 11.1 billion gallons from EISA as the basis for the 2009 total renewable
fuel standard that we issued under the RFS1 regulations. While this approach ensured that the
total mandated renewable fuel volume required by EISA for 2009 was used, the RFS1 regulatory
structure did not provide a mechanism for implementing the 0.5 billion gallon 2009 requirement
for biomasS'based diesel. We are addressing this issue in this rule combining the 2010 biomasS'
based diesel requirement of 0.65 billion gallons with the 2009 biomass-based diesel requirement
of 0.5 billion gallons to require that obligated parties meet a combined 2009/2010 requirement
of 1.15 billion gallons by the end of the 2010 compliance year.
Greenhouse Gas Reduction Thresholds
EISA established new renewable fuel categories and eligibility requirements, including setting
the first mandatory GHG reduction thresholds for the various categories of fuels. A significant
aspect of the RFS2 program is the requirement that the lifecycle GHG emissions of a qualifying
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renewable fuel must be less than the lifecycle GHG emissions of the 2005 baseline average
gasoline or diesel fuel that it replaces. Four different levels of reductions are required for the four
different renewable fuel standards. These lifecycle performance improvement thresholds are
listed in the table below:
Lifecycle GHG Thresholds Specified in EISA
(Percent reduction from 2005 baseline)
Renewable fuel"
Advanced biofuel
Biomass-based diesel
Cellulosic biofuel
20%
50%
50%
60%
" The 20% criterion generally applies to renewable fuel from new facilities that
commenced construction after December 19, 2007.
Compliance with each threshold requires a comprehensive evaluation of renewable fuels, as well
as the baseline for gasoline and diesel, on the basis of their lifecycle emissions. As mandated by
EISA, the greenhouse gas emissions assessments must evaluate the aggregate quantity of greenhouse
gas emissions (including direct emissions and significant indirect emissions such as significant
emissions from land use changes) related to the full lifecycle, including all stages of fuel and
feedstock production, distribution and use by the ultimate consumer,
EPA's lifecycle methodology required breaking new scientific ground and using analytical tools
in new ways. Throughout the development of EPA's lifecycle analysis, the Agency employed
a collaborative, transparent, and science-based approach. EPA recognizes that as the state of
scientific knowledge continues to evolve in this area, the lifecycle GHG assessments for a variety
of fuel pathways are likely to be updated. Therefore, while EPA is using its current lifecycle assessments
to inform the regulatory determinations for fuel pathways in this final rule, as required by the
statute, the Agency is also committing to further reassess these determinations and lifecycle
estimates.
Based on the Agency's current modeling of specific fuel pathways, which incorporated comments
received through the third-party peer review process, and data and information from new studies
and public comments, EPA has determined that:
• Ethanol produced from corn starch at a new (or expanded capacity from an existing)
natural gas-fired facility using advanced efficient technologies that we expect will be
most typical of new production facilities complies with the 20% GHG emission reduction
threshold
• Biobutanol from corn starch complies with the 20% GHG threshold
Ethanol produced from sugarcane complies with the applicable 50% GHG reduction
threshold for the advanced fuel category
• Biodiesel from soy oil and renewable diesel from waste oils, fats, and greases complies
with the 50% GHG threshold for the biomass-based diesel category
• Diesel produced from algal oils complies with the 50% GHG threshold for the biomass-
based diesel category
• Cellulosic ethanol and cellulosic diesel (based on currently modeled pathways) comply
with the 60% GHG reduction threshold applicable to cellulosic biofuels
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In addition to finalizing a threshold compliance determination for those pathways shown above
that we specifically modeled, our technical judgment indicates certain other pathways are likely
to be similar enough to modeled pathways that we are also assured these similar pathways qualify.
Further, for other fuels we are establishing a process whereby a biofuel producer can petition the
Agency to consider whether their product would be eligible for use in complying with an EISA
standard. For additional information on the lifecycle GHG emissions methodology and results
for renewable fuel pathways, and details on the petition process, please refer to the Lifecycle GHG
Analysis Fact Sheet, EPA420-F-10-006 or the RFS2 preamble.
Requirements for Feedstock Producers
EISA changed the definition of renewable fuel to require that it be made from feedstocks that
qualify as "renewable biomass." EISA's definition of the term "renewable biomass" limits the
types of biomass as well as the types of land from which the biomass may be harvested. The
definition generally applies restrictions to two feedstock sectors: the agricultural sector (planted
crops and crop residues) and the non-agricultural sector (planted trees and tree residues, animal
waste material and byproducts, slash and pre'Commercial thinnings). These definitions affect
feedstock use for production of compliant renewable fuels.
In the RFS2 rule, EPA is finalizing details applicable to renewable fuel producers which are
necessary to implement this requirement. For both domestic and foreign non-agricultural sector
feedstocks, renewable fuel producers can comply with specific recordkeeping and reporting
requirements for their individual facilities by collecting and maintaining appropriate records
from their feedstock suppliers that their feedstocks comply with the renewable biomass require-
ment. Producers may also, as an alternative to these individual recordkeeping and reporting
requirements, opt to form a consortium to fund an independent third party to conduct annual
renewable biomass quality-assurance surveys, based on a plan approved by EPA,
For agriculturally-based feedstocks produced in the U.S., renewable fuel producers will be in
compliance based on EPA's aggregate compliance determination. EPA will monitor agricultural
land data yearly and should the baseline level of approved agricultural land be exceeded, the
individual recordkeeping and reporting requirements imposed on the non-agricultural sector
would then be required. The program also provides an option for a similar, future aggregate
determination for renewable fuel produced from foreign-based agricultural feedstocks, if the
source region can provide sufficient data to support an effective aggregate analysis and monitoring
program. Otherwise, foreign producers must verify using one of the approaches applied in the
non-agricultural sector.
Overview of Impacts of Increasing Volume Requirements in the RFS2
Program
The increased use of renewable fuels required by the RFS2 standards is expected to reduce
dependence on foreign sources of crude oil, increase domestic sources of energy, while at the
same time providing important reductions in greenhouse gas emissions that contribute to
climate change.
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Petroleum Consumption, Energy Security and Fuel Costs
We estimate that the increased use of renewable fuels needed to reach the 36 billion gallons
mandated by 2022 relative to market projections in the absence of the mandate will displace
about 13.6 billion gallons of petroleum-based gasoline and diesel fuel. This represents about 7
percent of expected annual gasoline and diesel consumption in 2022. Furthermore, we expect
the rule to decrease oil imports by $41.5 billion, and to result in additional energy security benefits
of $2.6 billion. By 2022, the increased use of renewable fuels is expected to decrease gasoline
costs by 2.4 cents per gallon and to decrease diesel costs by 12.1 cents per gallon.
Greenhouse Gas Emissions
The expanded use of renewable fuels is expected to reduce greenhouse gas emissions by 138
million metric tons when the program is fully implemented in 2022. The reductions would be
equivalent to taking about 27 million vehicles off the road.
Emissions and Air Quality
The increased use of renewable fuels will also impact emissions with some emissions such as
hydrocarbons, nitrogen oxides (NOx), acetaldehyde and ethanol expected to increase and
others such as carbon monoxide (CO) and benzene expected to decrease. However, the impacts
of these emissions on criteria air pollutants are highly variable from region to region. Overall
the emission changes are projected to lead to increases in population-weighted annual average
ambient PM and ozone concentrations, which in turn are anticipated to lead to up to 245 cases
of adult premature mortality.
Agriculture Sector and Related Impacts
In 2022, the increased use of renewable fuels is expected to expand the market for agricultural
products such as corn and soybeans and open new markets for advanced biofuels. We estimate
that the RFS2 program would increase net farm income by $13 billion dollars - or more than 36
percent -- in 2022. We also expect corn exports to decrease by 8 percent, and soybean exports to
decrease by 14 percent.
The rule is expected to increase the cost of food $10 per person in 2022,
For More Information
For more information on the final RFS2 rule please visit the RFS website at:
http://www.epa.gov/otaq/renewablefuels/index.htm
Contact EPA's Office of Transportation and Air Quality, Assessment and Standards Division
information line at: asdinfo@epa.gov, or (734) 214-4636
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