Renewable Fuel Standard Program
(RFS2) Summary and Analysis of
Comments
United States
Environmental Protection
Agency
-------
Renewable Fuel Standard Program
(RFS2) Summary and Analysis of
Comments
Assessment and Standards Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
v>EPA
United States EPA-420-R-10-003
Environmental Protection r , „„.„
Agency February 2010
-------
Index of RFS2
Proposal Commenters
Commenter
Abengoa Bioenergy Corporation
Aberdeen Development Corp.
Ad-Hoc Coalition of Small Business
Refiners
Advanced Biofuels Association
AE Biofuels, Inc.
Ag Partners
Ag Processing Inc.
Alliance for a Safe Alternative Fuels
Environment
Alliance of Automobile Manufacturers
Aloha Petroleum, Ltd.
Altrius Group
American Bakers Association
American Council for Ethanol
American Farm Bureau Federation
American Forest and Paper Association
American Frozen Food Institute
American Meat Institute
American Petroleum Institute
American Snack Food Association
American Soybean Association
Abbreviation
SBR
All SAFE
Alliance
ACE
AFBF
API
ASA
Docket ID Number
EPA-HQ-OAR-2005-
0161-2487
EPA-HQ-OAR-2005-
0161-1051
EPA-HQ-OAR-2005-
0161-2135,2307,2399
EPA-HQ-OAR-2005-
0161-2346, 2408
EPA-HQ-OAR-2005-
0161-2079,2318
EPA-HQ-OAR-2005-
0161-2087
EPA-HQ-OAR-2005-
0161-2363
EPA-HQ-OAR-2005-
0161-2241
EPA-HQ-OAR-2005-
0161-2132
EPA-HQ-OAR-2005-
0161-2017
EPA-HQ-OAR-2005-
0161-0911,2244
EPA-HQ-OAR-2005-
0161-2303
EPA-HQ-OAR-2005-
0161-1050,2101
EPA-HQ-OAR-2005-
0161-2150
EPA-HQ-OAR-2005-
0161-2493
EPA-HQ-OAR-2005-
0161-2504
EPA-HQ-OAR-2005-
0161-2138,2402
EPA-HQ-OAR-2005-
0161-2393,2523
EPA-HQ-OAR-2005-
0161-2246
EPA-HQ-OAR-2005-
0161-2100
-------
American Trucking Association
Amyris Biotechnologies, Inc.
Arcadia Biosciences
Archer Daniels Midland Company
Association of American Railroads
Association of International Automobile
Manufacturers
Atlantic Biofuels1
Beckley Ag Products
Beta Analytic, Inc.
Beveridge & Diamond, PC
BioPure Fuels
BioEnergy Producers Association
Biomass Rules, LLC
Biotechnology Industry Organization
(Industrial and Environmental Section)
BlueFire Ethanol
Blue Flint Ethanol, LLC
Boeing Company
BP America
Brazilian Sugarcane Industry
Association (UNICA)
Brazilian Biodiesel Union
Brazilian Vegetable Oil Industry
Association
Burack Environmental Law Offices
Butterball, LLC
ATA
ADM
AAR
AIAM
BIO
BP
UNICA
URABIO
ABIOVE
EPA-HQ-OAR-2005-
0161-2141
EPA-HQ-OAR-2005-
0161-2374
EPA-HQ-OAR-2005-
0161-2111
EPA-HQ-OAR-2005-
0161-2360
EPA-HQ-OAR-2005-
0161-2103
EPA-HQ-OAR-2005-
0161-2128
EPA-HQ-OAR-2005-
0161-1011
EPA-HQ-OAR-2005-
0161-2165,2584
EPA-HQ-OAR-2005-
0161-0998, 1027
EPA-HQ-OAR-2005-
0161-2096
EPA-HQ-OAR-2005-
0161-2048
EPA-HQ-OAR-2005-
0161-2350,2532,2539
EPA-HQ-OAR-2005-
0161-2112
EPA-HQ-OAR-2005-
0161-2385
EPA-HQ-OAR-2005-
0161-2389
EPA-HQ-OAR-2005-
0161-0993
EPA-HQ-OAR-2005-
0161-2392
EPA-HQ-OAR-2005-
0161-2384
EPA-HQ-OAR-2005-
0161-1761,2137,2476
EPA-HQ-OAR-2005-
0161-2133
EPA-HQ-OAR-2005-
0161-2133
EPA-HQ-OAR-2005-
0161-2342
EPA-HQ-OAR-2005-
0161-2506, 2627
11
-------
California Air Resources Board
Canada, Foreign Affairs and
International Trade
Canadian Bioenergy Corporation
Canopy Prospecting and Trinidad
Dehydration Company, Limited
Cargill Incorporated
Caribbean Basin Ethanol Producers
Group
Caterpillar
CC Gas Systems
Chris Gould Farms
Central Iowa Energy
Chevron
Chesapeake Bay Commission
Chesapeake Bay Foundation
Clean Air Task Force
Clean Energy
Clean Fuels Clearinghouse
ConocoPhillips
Conservation International
Conservis Corporation
Corn Plus
Cornell University
Coskata
CARS
CATF
EPA-HQ-OAR-2005-
0161-2337
EPA-HQ-OAR-2005-
0161-2519
EPA-HQ-OAR-2005-
0161-1975
EPA-HQ-OAR-2005-
0161-2362
EPA-HQ-OAR-2005-
0161-2419,2511
EPA-HQ-OAR-2005-
0161-2012
EPA-HQ-OAR-2005-
0161-2127,2518
EPA-HQ-OAR-2005-
0161-1010
EPA-HQ-OAR-2005
EPA-HQ-OAR-2005-
0161-1987-0161-2212
EPA-HQ-OAR-2005-
0161-2013
EPA-HQ-OAR-2005-
0161-2110
EPA-HQ-OAR-2005-
0161-2080,2113
EPA-HQ-OAR-2005-
0161-2334
EPA-HQ-OAR-2005-
0161-2129,2414,2538,
2414,2538
EPA-HQ-OAR-2005-
0161-2401
EPA-HQ-OAR-2005-
0161-2018,2019,2083,
2243,2319
EPA-HQ-OAR-2005-
0161-2154
EPA-HQ-OAR-2005-
0161-2512
EPA-HQ-OAR-2005-
0161-2521
EPA-HQ-OAR-2005-
0161-2115
EPA-HQ-OAR-2005-
0161-1987
EPA-HQ-OAR-2005-
111
-------
Cotner Consulting Services
Council of Western State Foresters
CountryMark Cooperative
County Sanitation Districts of Los
Angeles County
Covanta Energy
CVR Energy
Darling International Inc.
Dial Corporation (Henkel Company)
Dolphin Land Co.
Dow AgroSciences
DuPont Applied BioSciences
DSI Fabrication, Inc.
Dynamic Fuels, LLC
e-biofuels, LLC
Edison Electric Institute
Embassy of Brazil
Endicott Biofuels II, LLC
Enerkem
EnerTech Environmental, Inc.
Engine Manufacturers Association
Ensus Ltd.
Environmental Consultant
Environmental Defense Fund
EMA
0161-2526,2389
EPA-HQ-OAR-2005-
0161-1005
EPA-HQ-OAR-2005-
0161-2494
EPA-HQ-OAR-2005-
0161-2118
EPA-HQ-OAR-2005-
0161-2376, 2540
EPA-HQ-OAR-2005-
0161-2395
EPA-HQ-OAR-2005-
0161-2396
EPA-HQ-OAR-2005-
0161-0999,2151,2546
EPA-HQ-OAR-2005-
0161-2499
EPA-HQ-OAR-2005-
0161-1040
EPA-HQ-OAR-2005-
0161-2300
EPA-HQ-OAR-2005-
0161-2146
EPA-HQ-OAR-2005-
0161-1041
EPA-HQ-OAR-2005-
0161-2149,2386
EPA-HQ-OAR-2005-
0161-2210
EPA-HQ-OAR-2005-
0161-2335
EPA-HQ-OAR-2005-
0161-2525
EPA-HQ-OAR-2005-
0161-2106
EPA-HQ-OAR-2005-
0161-2416
EPA-HQ-OAR-2005-
0161-2085,2139
EPA-HQ-OAR-2005-
0161-2147
EPA-HQ-OAR-2005-
0161-1871, 1990,2387
EPA-HQ-OAR-2005-
0161-1000
EPA-HQ-OAR-2005-
IV
-------
Environmental Working Group
Environmental Intelligence, Inc.
Enzyme Development Corporation and
Genencor International (Technical
Consultant for)
EthylChem, Ltd.
European Commission
ExxonMobil Refining & Supply Co.
Farbest Foods, Inc.
Farm Econ LLC
First United Ethanol
Flint Hills Resources
Ford Motor Company
Forest Landowners Association
Friends of the Earth
Fuel Marketing Corporation
Fulcrum BioEnergy
Galva Hoi stein Ag, LLC
Gen-X Energy Group, Inc.
Georgia Forestry Commission
Gevo Inc.
Glenwood Farms
Goldsboro Milling Company
Governors' Biofuels Coalition
FHR
FLA
0161-2308
EPA-HQ-OAR-2005-
0161-2129,2414,2508,
2538
EPA-HQ-OAR-2005-
0161-1669
EPA-HQ-OAR-2005-
0161-2189
EPA-HQ-OAR-2005-
0161-2426, 2637
EPA-HQ-OAR-2005-
0161-2020
EPA-HQ-OAR-2005-
0161-2130,2427
EPA-HQ-OAR-2005-
0161-2527
EPA-HQ-OAR-2005-
0161-2138,2402
EPA-HQ-OAR-2005-
0161-2168
EPA-HQ-OAR-2005-
0161-2145
EPA-HQ-OAR-2005-
0161-2465
EPA-HQ-OAR-2005-
0161-2417,2507
EPA-HQ-OAR-2005-
0161-2129,2414,2538
EPA-HQ-OAR-2005-
0161-1002
EPA-HQ-OAR-2005-
0161-2021,2073,2389
EPA-HQ-OAR-2005-
0161-2000
EPA-HQ-OAR-2005-
0161-1044
EPA-HQ-OAR-2005-
0161-2156,2535
EPA-HQ-OAR-2005-
0161-2304
EPA-HQ-OAR-2005-
0161-1012
EPA-HQ-OAR-2005-
0161-2107
EPA-HQ-OAR-2005-
-------
Gradek Energy
Great River Energy
Green Earth Fuels, LLC
GreenShift Corporation
Griffin Industries, Inc.
Grocery Manufacturers Association
Growmark, Inc.
Growth Energy
Highlands EnviroFuels, LLC
Hillside Ag
Holliday Environmental Services, Inc.
Honeywell International, Inc.
Hornbeck Agricultural
ICM, Inc.
Illinois Corn Growers Association
Illinois Corn Growers Association, et. al.
Illinois Farm Bureau
Illinois Petroleum Marketers Association
Illinois River Energy, LLC
Illinois Soybean Association
Imperium Renewables, Inc.
IRI
0161-2390
EPA-HQ-OAR-2005-
0161-1026
EPA-HQ-OAR-2005-
0161-0953
EPA-HQ-OAR-2005-
0161-2423
EPA-HQ-OAR-2005-
0161-2074, 2094
EPA-HQ-OAR-2005-
0161-0994
EPA-HQ-OAR-2005-
0161-2309
EPA-HQ-OAR-2005-
0161-2495
EPA-HQ-OAR-2005-
0161-1959,2320,2330,
2332, 2359, 2378, 2379,
2380,2381,2382,2383,
2415,2635
EPA-HQ-OAR-2005-
0161-2445
EPA-HQ-OAR-2005-
0161-2366
EPA-HQ-OAR-2005-
0161-0982, 0983, 0986
EPA-HQ-OAR-2005-
0161-2099
EPA-HQ-OAR-2005-
0161-2148
EPA-HQ-OAR-2005-
0161-2638
EPA-HQ-OAR-2005-
0161-2339,2372
EPA-HQ-OAR-2005-
0161-2245
EPA-HQ-OAR-2005-
0161-2347
EPA-HQ-OAR-2005-
0161-2322
EPA-HQ-OAR-2005-
0161-2190
EPA-HQ-OAR-2005-
0161-2174
EPA-HQ-OAR-2005-
0161-2516
VI
-------
Independent Fuel Terminal Operators
Association
Indonesian Palm Oil Commission
INEOS Bio
Institute for Agriculture and Trade
Policy
Institute for International Trade
Negotiations, the Brazilian Institute for
International Negotiations
International Council on Clean
Transportation
logen Corporation
Iowa Biodiesel Board
Iowa Corn Growers Association
Iowa Farm Bureau Federation
Iowa Renewable Energy, LLC
Iowa Renewable Fuels Association
Iowa Soybean Association
John Deere Agriculture & Turf Division
Kansas Corn Growers Association
Kauai Westside Watershed Council
Kentucky Division of Forestry, Energy
and Environment Cabinet
Kurzman Clean Tech Research &
Kurzman Capital, LLC1
LanzaTech, Inc.
Lenahan
Lignol Innovations, Inc.
Low Carbon Synthetic Fuels Association
LyondellBasell Industries
IFTOA
ICONE
ICCT
IRFA
LCSFA
EPA-HQ-OAR-2005-
0161-2345
EPA-HQ-OAR-2005-
0161-2361
EPA-HQ-OAR-2005-
0161-2389
EPA-HQ-OAR-2005-
0161-2513
EPA-HQ-OAR-2005-
0161-1958
EPA-HQ-OAR-2005-
0161-2491
EPA-HQ-OAR-2005-
0161-2248, 2492, 2533
EPA-HQ-OAR-2005-
0161-2357
EPA-HQ-OAR-2005-
0161-2372
EPA-HQ-OAR-2005-
0161-1989
EPA-HQ-OAR-2005-
0161-2510
EPA-HQ-OAR-2005-
0161-0921,2136,2247,
2321,2372
EPA-HQ-OAR-2005-
0161-2078,2353,2530
EPA-HQ-OAR-2005-
0161-2344
EPA-HQ-OAR-2005-
0161-2488
EPA-HQ-OAR-2005-
0161-1616
EPA-HQ-OAR-2005-
0161-2005, 2349
EPA-HQ-OAR-2005-
0161-1001
EPA-HQ-OAR-2005-
0161-2131,2475
EPA-HQ-OAR-2005-
0161-2551
EPA-HQ-OAR-2005-
0161-2310
EPA-HQ-OAR-2005-
Vll
-------
Macquarie University (Australia)
Graduate School of Management
Magellan Midstream Partners
MAIZAR, Argentine Corn and Sorghum
Association
Malaysian Palm Oil Board
Manufacturers of Emission Controls
Association
Marathon Petroleum Company
Mascoma Corporation
Massachusetts Department of
Environmental Protection
Mercedes Benz
Methanol Institute
Metropolitan Washington Air Quality
Committee
Midwestern Legislative Conference of
the Council of State Governments
Minnesota Coalition for Ethanol
Minnesota Corn Growers Association
Minnesota Farm Bureau Federation
Minnesota Petroleum Retailers
Association
Minnesota Pollution Control Agency
Minnesota Soybean Processors
Missouri Corn Growers Association
Missouri Department of Natural
Resources
Murphy Oil USA, Inc.
Musket Corporation
National Alliance of Forest Owners
MPOB
MECA
MFC
MI
MPRA
MnSP
MnDNR
0161-2312
EPA-HQ-OAR-2005-
0161-1048
EPA-HQ-OAR-2005-
0161-2025, 2420
EPA-HQ-OAR-2005-
0161-1719
EPA-HQ-OAR-2005-
0161-2356
EPA-HQ-OAR-2005-
0161-2412
EPA-HQ-OAR-2005-
0161-2233
EPA-HQ-OAR-2005-
0161-2171
EPA-HQ-OAR-2005-
0161-2354
EPA-HQ-OAR-2005-
0161-2125,2398
EPA-HQ-OAR-2005-
0161-2397, 2482
EPA-HQ-OAR-2005-
0161-2375
EPA-HQ-OAR-2005-
0161-2008
EPA-HQ-OAR-2005-
0161-2152
EPA-HQ-OAR-2005-
0161-2372
EPA-HQ-OAR-2005-
0161-2446
EPA-HQ-OAR-2005-
0161-2301
EPA-HQ-OAR-2005-
0161-2534
EPA-HQ-OAR-2005-
0161-2172
EPA-HQ-OAR-2005-
0161-2372
EPA-HQ-OAR-2005-
0161-2515
EPA-HQ-OAR-2005-
0161-2400
EPA-HQ-OAR-2005-
0161-2464, 2537
EPA-HQ-OAR-2005-
Vlll
-------
National Association of Clean Air
Agencies
National Association of Convenience
Stores
National Association of State Foresters
National Biodiesel Board
National Chicken Council
National Corn Growers Association
National Council for Air and Stream
Improvement, Inc.
National Council of Chain Restaurants
National Farmers Union
National Grain and Feed Association
National Marine Manufacturers
Association
National Petrochemical and Refiners
Association
National Renderers Association
National Solid Waste Management
Association
National Sorghum Producers
National Turkey Federation
National Wildlife Federation
Natural Resources Defense Council
NGV America
Nebraska Corn Board
New England Fuel Institute
New Fuels Alliance
New Generation Biofuels
NACAA
NACS
NBB
NCGA
NCASI
NFU
NMMA
NPRA
NWF
NRDC
NEFI
NFA
NGBF
0161-2173
EPA-HQ-OAR-2005-
0161-2089
EPA-HQ-OAR-2005-
0161-2358
EPA-HQ-OAR-2005-
0161-2517
EPA-HQ-OAR-2005-
0161-2232, 2249, 2299
EPA-HQ-OAR-2005-
0161-2138,2402
EPA-HQ-OAR-2005-
0161-2122,23172331
EPA-HQ-OAR-2005-
0161-1045
EPA-HQ-OAR-2005-
0161-2309
EPA-HQ-OAR-2005-
0161-2368, 2463 (dup)
EPA-HQ-OAR-2005-
0161-2529
EPA-HQ-OAR-2005-
0161-2394
EPA-HQ-OAR-2005-
0161-2124
EPA-HQ-OAR-2005-
0161-0988
EPA-HQ-OAR-2005-
0161-2377
EPA-HQ-OAR-2005-
0161-2119
EPA-HQ-OAR-2005-
0161-2138,2402
EPA-HQ-OAR-2005-
0161-2129,2414,2538
EPA-HQ-OAR-2005-
0161-2129,2414,2538
EPA-HQ-OAR-2005-
0161-2370
EPA-HQ-OAR-2005-
0161-2098
EPA-HQ-OAR-2005-
0161-2314,2327
EPA-HQ-OAR-2005-
0161-2367
EPA-HQ-OAR-2005-
IX
-------
New Planet Energy
New York Biomass Energy Alliance
New York State Department of
Agriculture and Markets
New York State Department of
Environmental Conservation
New York University School of Law
Neste Oil Holding Inc.
Noble Americas
North American Affairs Committee of
the International DME Association
North American Carbon Capture and
Storage Association
North Atlantic Refining Ltd.
North Carolina Department of
Transportation
Northeast States for Coordinated Air Use
Management
Novogy, Inc.
Novozymes North America, Inc.
NxENRG
Oglethorpe Power
Osage Bio Energy
Outdoor Power Equipment Institute
The Pacific Forest Trust
Pennsylvania Department of Agriculture
Pennsylvania Energy Resources Group
Pennsylvania State Senate
Pennsylvania State University
Neste
NACCSA
NARL
NESCAUM
OPEI
ERG
0161-2355,2369
EPA-HQ-OAR-2005-
0161-2095
EPA-HQ-OAR-2005-
0161-2023,2352
EPA-HQ-OAR-2005-
0161-2144,2531
EPA-HQ-OAR-2005-
0161-2143
EPA-HQ-OAR-2005-
0161-2117
EPA-HQ-OAR-2005-
0161-2365,2391
EPA-HQ-OAR-2005-
0161-2341
EPA-HQ-OAR-2005-
0161-2422
EPA-HQ-OAR-2005-
0161-2097
EPA-HQ-OAR-2005-
0161-2498
EPA-HQ-OAR-2005-
0161-2474
EPA-HQ-OAR-2005-
0161-2466
EPA-HQ-OAR-2005-
0161-2081
EPA-HQ-OAR-2005-
0161-2002
EPA-HQ-OAR-2005-
0161-2004
EPA-HQ-OAR-2005-
0161-2388
EPA-HQ-OAR-2005-
0161-2343
EPA-HQ-OAR-2005-
0161-2241
EPA-HQ-OAR-2005-
0161-2424
EPA-HQ-OAR-2005-
0161-2547
EPA-HQ-OAR-2005-
0161-1052, 1977
EPA-HQ-OAR-2005-
0161-2333
EPA-HQ-OAR-2005-
-------
PetroAlgae
Petro-Diamond Incorporated
Petroleum Marketers Association of
America
Petroleum Marketers and Convenience
Stores of Iowa
Pew Center on Global Climate Change
Poet Ethanol Products
Prairie Pride, Inc.
Primafuel, Inc.
The ProExporter Network
Renewable Energy Group
Renewable Fuels Association
RENTECH, Inc.
R.W. Heiden Associates LLC
Sapphire Energy
SeQuential Pacific Biodiesel
SGBiofuels
Shell Oil Products US
Sierra Club
Sierra Research, Inc.
Small Business Association, Office of
Advocacy
Snack Food Association
The Soap and Detergent Association
PMAA
PMCI
REG
RFA
SOPUS
SB A- Advocacy
0161-2086
EPA-HQ-OAR-2005-
0161-2425
EPA-HQ-OAR-2005-
0161-2217
EPA-HQ-OAR-2005-
0161-2328
EPA-HQ-OAR-2005-
0161-2155,2328
EPA-HQ-OAR-2005-
0161-2114
EPA-HQ-OAR-2005-
0161-1033,2477,2639
EPA-HQ-OAR-2005-
0161-1049,2616
EPA-HQ-OAR-2005-
0161-2486, 2520
EPA-HQ-OAR-2005-
0161-2116
EPA-HQ-OAR-2005-
0161-1015, 1750,2123
EPA-HQ-OAR-2005-
0161-0952, 0970, 1042,
2329,2315,2329,2489
EPA-HQ-OAR-2005-
0161-2102
EPA-HQ-OAR-2005-
0161-2435
EPA-HQ-OAR-2005-
0161-2490
EPA-HQ-OAR-2005-
0161-1969,2027
EPA-HQ-OAR-2005-
0161-2336
EPA-HQ-OAR-2005-
0161-2505
EPA-HQ-OAR-2005-
0161-2129,2414,2538
EPA-HQ-OAR-2005-
0161-2204
EPA-HQ-OAR-2005-
0161-2105
EPA-HQ-OAR-2005-
0161-2309
EPA-HQ-OAR-2005-
0161-2305
XI
-------
Society of Independent Gasoline
Marketers of America
Society for Range Management
South Dakota State University
SoyMor Biodiesel, LLC (NBB)
StateLine Cooperative
Sustainable Oils, LLC
Sutherland Asbill & Brennan LLP
Syngenta Biotechnology, Inc.
Syntroleum
Targeted Growth, Inc.
Tennessee Department of Agriculture
Terrabon
Texas Commission on Environmental
Quality
Triton Energy LLC
Tyson Foods, Inc.
Union of Concerned Scientists
United Refining Company
US Canola Association
U.S. Congress, House of Representatives
United States EnviroFuels, LLC
University of California- Berkeley,
Energy and Resources Group
University of California- Berkeley,
Energy Biosciences Institute
University of Georgia Engineering
SIGMA
TCEQ
UCS
EPA-HQ-OAR-2005-
0161-2358,2632
EPA-HQ-OAR-2005-
0161-2120
EPA-HQ-OAR-2005-
0161-2524
EPA-HQ-OAR-2005-
0161-1966,2010
EPA-HQ-OAR-2005-
0161-2348
EPA-HQ-OAR-2005-
0161-2075
EPA-HQ-OAR-2005-
0161-2471
EPA-HQ-OAR-2005-
0161-2153
EPA-HQ-OAR-2005-
0161-2324
EPA-HQ-OAR-2005-
0161-2071,2093
EPA-HQ-OAR-2005-
0161-2409
EPA-HQ-OAR-2005-
0161-2047, 2084
EPA-HQ-OAR-2005-
0161-1032, 1035
EPA-HQ-OAR-2005-
0161-2549
EPA-HQ-OAR-2005-
0161-2364,2410
EPA-HQ-OAR-2005-
0161-1338,2091,2129,
2414,2501,2538,2134
EPA-HQ-OAR-2005-
0161-1397
EPA-HQ-OAR-2005-
0161-2104
EPA-HQ-OAR-2005-
0161-2528
EPA-HQ-OAR-2005-
0161-2445
EPA-HQ-OAR-2005-
0161-0904,2234,2313
EPA-HQ-OAR-2005-
0161-2302
EPA-HQ-OAR-2005-
Xll
-------
Outreach Service1
University of Illinois at Chicago
University of Minnesota- Institute on the
Environment
University of Nebraska-Lincoln,
Nebraska Center for Energy Sciences
Research, Department of Agronomy and
Horticulture
Valero Energy
Verenium Corporation
Vermont Fuel Dealers Association
Virginia Poultry Federation
Vision FL I, LLC
Waste Management
Western Dubuque Biodiesel (NBE)
Weyerhauser
The Wilderness Society
Wisconsin Department of Natural
Resources
World Energy Alternatives, LLC
World Organization of Resource
Councils
World Resources Institute
Wyoming Refining
Xebec Adsorption Inc.
Xyleco, Inc. (submitted by Mercator
XXI, LLC)
Zeachem Inc.
VFDA
WA
WORC
0161-1043
EPA-HQ-OAR-2005-
0161-2003, 2203
EPA-HQ-OAR-2005-
0161-2316,2371
EPA-HQ-OAR-2005-
0161-0981
EPA-HQ-OAR-2005-
0161-2072, 2472
EPA-HQ-OAR-2005-
0161-2502
EPA-HQ-OAR-2005-
0161-1952
EPA-HQ-OAR-2005-
0161-2522
EPA-HQ-OAR-2005-
0161-1036, 1404
EPA-HQ-OAR-2005-
0161-1995
EPA-HQ-OAR-2005-
0161-1976,2011
EPA-HQ-OAR-2005-
0161-2109,2418
EPA-HQ-OAR-2005-
0161-2129,2414,2538
EPA-HQ-OAR-2005-
0161-2497
EPA-HQ-OAR-2005-
0161-2157,2159,2170,
2226, 2227, 2293, 2295,
2296, 2297, 2298, 2340
EPA-HQ-OAR-2005-
0161-2088,2514
EPA-HQ-OAR-2005-
0161-2129,2414,2538,
2414,2538
EPA-HQ-OAR-2005-
0161-2311,2411
EPA-HQ-OAR-2005-
0161-2412
EPA-HQ-OAR-2005-
0161-2548
EPA-HQ-OAR-2005-
0161-2478
Xlll
-------
ZeroPoint Clean Tech, Inc.
EPA-HQ-OAR-2005-
0161-2413
1- Note the same standardized comment was submitted by multiple commenters, including those comments
denoted in this index. See the rulemaking docket, EPA-HQ-OAR-2005-0161, for these comments.
xiv
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Acronyms and Abbreviations
AEO
AFOLU
AFV
ARMS
ASTM
B
BESS
BG,Bg
Bgal
BLUM
BOB
BTL
Btu
bpcd
CAA
CBOB
CAFE
CAMx
CARS (or ARE)
CARD
CASAC
CBE
CBI
CBI
CCS
CDX
CET
CFR
CG
CGE
CHP
CMAQ
CO
C02
CRC
CRP
CWPPs
DDG
DG
DoE, DOE
DME
DRIA
Annual Energy Outlook
(2006 IPCC) Agricultural Forest and Other Land Use Guidelines
Alternative Fuel Vehicle
(USD A) Agricultural Resource Management Survey
American Society for Testing Materials
Billion
Biofuel Energy Systems Simulator
Billion Gallon
Billion Gallon
Brazil Land Use Model
Blendstock for Oxygenate Blending
Biomass-to-Liquid
British Thermal Unit
Barrels per Calendar Day
Clean Air Act
California Blendstock for Oxygenate Blending
Corporate Average Fuel Economy
Comprehensive Air Quality Model with Extensions
California Air Resources Board
Center for Agricultural and Rural Development (at Iowa State
University)
Clean Air Science Advisory Committee
Cellulosic Biomass Ethanol
Confidential Business Information
Caribbean Basin Initiative
Carbon Capture and Sequestration
Central Data Exchange
Constant Elasticity of Transformation
Code of Federal Regulations
Conventional Gasoline
Computable General Equilibrium
Combined Heat Processes
Community Multi-scale Air Quality Model
Carbon Monoxide
Carbon Dioxide
Coordinating Research Council
Conservation Reserve Program
Community Wildfire Protection Plans
Dried Distiller Grain
Distiller Grain
U.S. Department of Energy
Dimethyl Ether
Draft Regulatory Impact Analysis
XV
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E10
E15
E85
EBAMM
EGA
EIA
EISA
EMTS
EO
EPA
EPAct
ERG
ETBE
ETRAE1
EU
EV
FADS
FAME
FAO
FAPRI
FASOM
FFV
FR
FRAR
FRM
FT
FWP
GATT
GE
GHG
GREET
GTAB
GTAP
GWP
HAP
HC
HWP
HR
ILUC
IPCC
ISO
ISO
IT
LCA
10%Ethanol
15%Ethanol
85% Ethanol
ERG Biofuel Analysis Meta-Model
Emission Control Area
Energy Information Administration
Energy Independence and Security Act of 2007
EPA Moderated Trading System
Executive Order
Environmental Protection Agency
Energy Policy Act of 2005
Energy Resources Group (at the University of California Berkeley)
Ethyl Tertiary Butyl Ether
Elasticity of Transformation
European Union
Equivalence Value
Fatty Acid Distillate Streams
Fatty Acid Methyl Ester
(United Nations) Food and Agricultural Organization
Food and Agricultural Policy Research Institute (Model)
Forest and Agricultural Sector Optimization Model
Flex-Fuel Vehicle
Federal Register
Fuel Registration and Reporting
Final Rulemaking
Fischer-Tropsch
Fuel Warming Potential
General Agreement on Tariffs and Trade
General Equilibrium
Greenhouse Gas
Greenhouse gases, Regulated Emissions, and Energy use in
Transportation (Model)
Gasoline Treated as Blendstock
Global Trade Analysis Project (Model)
Global Warming Potential
Hazardous Air Pollutant
Hydrocarbon
Harvested Wood Products
House Report
Indirect Land Use Change
Intergovernmental Panel on Climate Change
Independent System Operator
International Standards Organization
Information Technology
Lifecycle Analysis
XVI
-------
LCFS
LEM
LEV
LHV
LNG
MCF
MM5
MODIS
MPG
MSAT
MSW
MTBE
MY
N
N2O
NAAQS
NASA
NATA
NETL
NGV
NHTSA
NLEV
NMHC
NMIM
NMOG
NOx
NPRM
NREL
OEM
OMB
OPEC
OPIS
ORNL
OTAQ
PADD
PE
P.E.
PET, PETE
PM
ppb
ppm
psi
PSD
PTD
Low Carbon Fuel Standard
Lifecycle Emissions Model
Low Emission Vehicle
Lower Heating Value
Liquefied Natural Gas
Methane Correction Factor
(Pennsylvania State University /National Center for Atmospheric
Research) Fifth-generation Mesoscale Model
(NASA's) Moderate-resolution Imaging Spectroradiometer
Miles Per Gallon
EPA's Mobile Source Air Toxics Rule
Municipal Solid Waste
Methyl Tertiary Butyl Ether
Model Year
Nitrogen
Nitrous Oxide
National Ambient Air Quality Standard
National Aeronautics and Space Administration
National Air Toxics Assessment
National Energy Technology Laboratory
Natural Gas Vehicle
National Highway Transportation Safety Administration
National Low Emission Vehicle
Non-methane Hydrocarbon
National Mobile Inventory Model
Non-methane Organic Gas
Oxides of Nitrogen
Notice of Proposed Rulemaking
National Renewable Energy Laboratory
Original Equipment Manufacturer
Office of Management and Budget
Organization of the Petroleum Exporting Countries
Oil Price Information Service
Oak Ridge National Laboratory
Office of Transportation and Air Quality
Petroleum Administration District for Defense
Partial Equilibrium
Professional Engineer
Polyethylene Terephthalate
Parti cul ate Matter
Parts Per Billion
Parts Per Million
Pound-force per Square Inch
Prevention of Significant Deterioration
Product Transfer Document
XVll
-------
R&D
RBOB
RD
REC
REDD
RFA
RFG
RFS
RFS1
RFS2
RIA
RIN
RSM
RSPO
RVO
RVP
SBA
SB AR Panel
SBREFA
sec
SEC
SIP
STEO
THC
TRS
ULSD
use
USDA
USGS
VMT
VOC
Research and Development
Reformulated Blendstock for Oxygenate Blending
Renewable Diesel
Renewable Electricity Credits
(United Nations Collaborative Programme on Reducing Emissions
from) Deforestation and Forest Degradation in Developing Countries
Regulatory Flexibility Analysis
Reformulated Gasoline
Renewable Fuel Standard
First Renewable Fuel Standard Program (finalized on May
1, 2007}
New Renewable Fuel Standard Program
Regulatory Impact Analysis
Renewable Identification Number
Response Surface Model
Roundtable for Sustainable Palm Oil
Renewable Volume Obligation
Reid Vapor Pressure
Small Business Administration
Small Business Advocacy Review Panel
Small Business Regulatory Enforcement Fairness Act
Social Cost of Carbon
U.S. Securities and Exchange Commission
State Implementation Plan
Short-term Energy Outlook
Total Hydrocarbon
Total Recoverable Sugars
Ultra-low Sulfur Diesel
United States Code
United States Department of Agriculture
U.S. Geological Survey
Vehicle Miles Traveled
Volatile Organic Compound
XVlll
-------
Table of Contents
Chapter 1 General
Chapter 2 Effective Date of the RF S2 Program
Chapter 3 Maj or Elements of the Program Required Under EISA
Chapter 4 Compliance (Registration, Recordkeeping, Reporting)
Chapter 5 Program Changes and Flexibilities
Chapter 6 Assessment of Renewable Fuel Production Capacity and Use
Chapter 7 Impacts of the Program on Greenhouse Gas (GHG) Emissions
Chapter 8 Impacts on Criteria (NAAQS) and Toxic Pollutants
Chapter 9 Costs
Chapter 10 Economic Impacts and Benefits of the Rule
Chapter 11 Impacts on Water
Chapter 12 Administrative Requirements and Legal Authority
Chapter 13 Other
xix
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Renewable Fuel Standard Program
(RFS2) Summary and Analysis of
Comments
Chapter 1
General
Assessment and Standards Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
v>EPA
United States EPA-420-R-10-003
Environmental Protection r , „„.„
Agency February 2010
-------
RFS2 Summary and Analysis of Comments
1 GENERAL
1.1 Supports Rule 1-1
1.2 Opposes Rule 1-2
-------
RFS2 Summary and Analysis of Comments
1 GENERAL
What We Proposed:
The following comments relate in general to the Notice of Proposed Rulemaking
(NPRM). The comments in this chapter are not on any specific aspect of the proposed
rule; rather, they are directed to the general substance of the proposal. More detailed
comments on specific provisions of the proposal can be found in later chapters of this
Summary and Analysis of Comments.
For more information on the proposed rule, see the Federal Register at 74 FR
24904, published on May 26, 2009. The public comments submitted on this rule can be
viewed online at www.regulations.gov (the public docket for this rulemaking is docket
number EPA-HQ-OAR-2005-0161).
1.1 Supports Rule
What Commenters Said:
We received many comments supporting the proposed rule, which generally
stated that they support the rule itself and/or efforts to reduce dependence on non-
renewable resources and foreign petroleum supplies to reduce carbon dioxide (CO 2) and
greenhouse gas (GHG) emissions. Commenters additionally expressed support for
various potential positive aspects on the development and use of biofuels, including:
technology and economic growth, job development, support of the agricultural sector,
and energy security.
However, many of these commenters also stated that, although they support the
rule, they believe that additional work should be done before the rule is finalized.
Commenters offered various suggestions on how they believe that the rule could be
improved, and those specific comments can be found throughout this Summary and
Analysis of Comments document.
Our Response:
We appreciate the support we have received from these commenters and well as
many other parties during the development of the final rule to implement the RFS2
standards as mandated by EISA. As our analysis in support of the rulemaking
demonstrates, we believe that the increase use of renewable fuels in place of petroleum
fuels will provide both greenhouse gas and energy benefits to our nation, as well as
significant economic benefits to our agricultural sector.
1-1
-------
Chapter 1: General
We have conducted extensive analysis in support of the rulemaking on the
greenhouse gas, air quality and water quality impacts of increased use of renewable fuels
as summarized in the preamble and detailed in the Final Regulatory Impact Analysis
(RIA). In addition, EPA is required by section 204 of EISA to assess the environmental
and resource conservation impacts on an ongoing basis.
1.2 Opposes Rule
What Commenters Said:
We also received comments expressing opposition to the proposed rule. These
comments listed various aspects such as flawed analyses with respect to land use and fuel
use assumptions, negative experiences with ethanol and other biofuels, regulatory and
compliance requirements, inadequate peer review, and emissions impacts of renewable
fuels.
More specifically, one commenter stated that it believes that EPA policy should
advance the intent of the Congress in workable ways; accordingly, this proposed rule
should be revisited and made practical. As written, the proposed rule suffers from suspect
methodology in the science; flawed assumptions regarding land use, petroleum and
biodiesel use; and complex regulatory burdens which inhibit rather than facilitate
desperately needed innovation.
Another commenter stated that the congressional intent clearly aims to encourage
an environmentally sound, innovative, and an economically viable renewable fuels
industry, but the proposed rule will stifle innovation. The proposed rules would
effectively deny important economic incentives to their energy crop innovations.
Some commenters stated that they are opposed to the EPA changes in RFS2.
They noted that the very intent of the original legislation, growing the US renewable
fuels industry, will be irreparably harmed if the EPA proposal is allowed to stand. Some
of these commenters further stated that there is more than sufficient testimony and sound
science refuting many of the EPA interpretations of the 2007 Energy Bill. The
commenters believe that the negative economic impact of the EPA proposal to America's
farmers, consumers, and businesses is further cause for discussion and revision to
develop fair and sensible rules.
Our Response:
We have in fact taken the comments we received on the proposal into account and
made significant changes in the lifecycle and other analyses for the rulemaking, as well
as to modify some of the programmatic requirements which should ease implementation
(e.g., new renewable biomass provisions and EMTS system). We believe that the final
rule faithfully implements the requirements of EISA in a manner consistent with our legal
1-2
-------
RFS2 Summary and Analysis of Comments
obligations, with sound science, and with sound environmental, energy, and economic
policy.
1-3
-------
Renewable Fuel Standard Program
(RFS2) Summary and Analysis of
Comments
Chapter 2
Effective Date of the RFS2 Program
Assessment and Standards Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
v>EPA
United States EPA-420-R-10-003
Environmental Protection r , „„.„
Agency February 2010
-------
RFS2 Summary and Analysis of Comments
2. EFFECTIVE DATE
What We Proposed:
The comments in this section correspond to Section II.A.5 of the preamble to the
proposed rule and pertain to the date when the RFS2 requirements start to apply to refiners and
importers of gasoline and diesel and producers and importers of renewable fuel, as well as the
volumes of renewable fuel that are required during calendar year 2010. The comments we
received and our response to those comments are summarized below.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2110
Organization: Chevron
Comment:
The commenter (2110.1) believes that reporting of RIN transactions should shift from RFS1
formats to RFS2 formats only once. The commenter believes that EPA should not begin RFS2
reporting until EMTS is ready to accept RIN transactions. (2110.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2548
Organization: Xyleco, Inc.
Comment:
EPA should ensure sufficient time for the entry-into-force of RFS2, and that transitional
regulatory arrangements support the overarching legislative objective of promoting development
of renewable fuels. That is, RFS2 should enter into force on January 1, 2011, with RFS1
continuing to apply in the meantime. This delayed implementation date would have the added
advantage that the EPA would have another year to analyze historical data on renewable fuels
production before determining whether to grant waivers, and, if so, to what level mandates
should be adjusted.
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) supports implementing the RFS2 amendments quickly, but believes
that EPA's revised lifecycle analysis is not likely to be completed in time for a January 1, 2010
effective date. The commenter believes much work still needs to be done with respect to EPA's
lifecycle analysis, particularly with respect to the sensitivity and uncertainty analysis. (2329.1,
p. 15)
The commenter believes that EPA can rely on the current RFS program to meet the revised
requirements pending issuance of final regulations. The commenter noted that the RFS1
2-1
-------
Chapter 2: Effective Date
regulations currently in place are sufficient to implement the EISA requirements. (2329.1, p. 16)
[[See Docket Number 2329.1 pp.16-19 for a detailed discussion of this issue]].
The commenter agrees that January 1, 2011 is the "most straightforward" alternative effective
date and EPA should not implement the program in the middle of the year. (2329.1, p.18)
Document No.: EPA-HQ-OAR-2005-0161-0988
Organization: National Renderers Association
Comment:
The commenter requests that EPA not delay implementation of the proposed RFS2 beyond 2009
so that the RFS2 program applies to "all renewable fuel produced on or after January 1, 2010..."
as set forth in proposed 40 CFR 80.1400. (P.I)
The commenter believes that a January 1, 2010 start date for RFS2 implementation is essential to
meet the Congressional mandate to reduce U.S. dependence on foreign sources of petroleum by
increasing domestic sources of renewable fuels. The commenter also believes the final rule must
be promulgated in 2009 to encourage the production and use of renewable fuels, especially
biomass based diesel, which will significantly reduce greenhouse gas emissions associated with
petroleum fuels. (P.I)
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) noted that the Biodiesel industry needs to have the RFS2 program
launched as soon as practical in order to preserve its current infrastructure. Due to current
economic conditions, the Biodiesel industry needs this defined market to survive and continue
producing the proposed volume of biomass-based diesel products. (0994.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-0999
Organization: Darling International Inc.
Comment:
The commenter (0999) urges EPA to promulgate the RFS2 final rule in 2009 so that the RFS2
program applies to "all renewable fuel produced on or after January 1, 2010..." as set forth in
proposed 40 CFR 80.1400. The commenter believes that a January 1, 2010 start date for RFS2
implementation is essential to meet the Congressional mandate to reduce U.S. dependence on
foreign sources of petroleum by increasing domestic sources of renewable fuels. The commenter
also believes the final rule must be promulgated in 2009 to encourage the production and use of
renewable fuels, especially biomass based diesel, which will significantly reduce greenhouse gas
emissions associated with petroleum fuels. (P.I)
Document No.: EPA-HQ-OAR-2005-0161-1015
Organization: Renewable Energy Group
Comment:
2-2
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RFS2 Summary and Analysis of Comments
The commenter (1015) believes the U.S. biodiesel industry is ready today to meet the volumetric
demands required by the RFS2. The industry will suffer if the program is delayed. EPA should
enact a January 1, 2010 implementation date for the RFS2. (1015, p.l)
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
The commenter (1044) believes that efforts should be made to implement the non-contentious
elements of the proposed rule as fast as possible and further work regarding the LCA and GHG
should be developed. [[Docket number 1044.1, p. 10]]
Document No.: EPA-HQ-OAR-2005-0161-1050
Organization: American Council for Ethanol (ACE)
Comment:
The commenter (2101.1) recommends that EPA move forward to enforce the volumetric
requirements as soon as practicable but do so in a way that does not rush the premature
application of the controversial ILUC. (2101.1, p.16)
Document No.: EPA-HQ-OAR-2005-0161-1969
Organization: SeQuential-Pacific Biodiesel
Comment:
The commenter states that they have weathered the turbulent markets by utilizing every resource
available including capitalizing on the value of our RINs. This revenue stream has been vital the
past year. The commenter urges EPA to consider the effect a delay in implementing RFS2 will
have on the renewable fuel industry. The commenter strongly supports the RFS2 regulatory
program beginning on January 1, 2010. Postponing implementation will continue to devalue
RINs currently being traded and delay the recovery for renewable fuel producers. [[Docket
number 2027, p. 1]]
Document No.: EPA-HQ-OAR-2005-0161-1975
Organization: Canadian Bioenergy Corporation
Comment:
The commenter believes that EPA should implement RFS2 volume requirements for Jan. 1,
2010. Delaying the effective date is not consistent to the stated goal to reduce U.S. dependence
of foreign sources of petroleum by increasing domestic sources of energy. Recognizing the
complexity of this task and that never before has a regulatory program assessed greenhouse gas
emissions of fuels, the industry stands ready to bring low carbon fuel to market. [[Docket
number 1975, p. 1]]
Document No.: EPA-HQ-OAR-2005-0161-2017
Organization: Aloha Petroleum, Ltd.
Comment:
2-3
-------
Chapter 2: Effective Date
The commenter (2017.1) believes that the start date should be January 1, 2011. A start date any
time during calendar year 2010 would create a great deal of confusion in the marketplace
because not all participants in the program would have adequate time to fully prepare. (2017.1,
p.2)
Document No.: EPA-HQ-OAR-2005-0161-2102
Organization: RENTECH, INC
Comment:
The commenter (2102.1) strongly supports EPA's proposed effectiveness date of January 1,
2010, as opposed to an alternative date of January 1, 2011. Any delay in implementation of the
RFS2 program will negatively affect the ability of fuel producers to deliver volumes in future
years by complicating their pathway to financing. (2102.1, p.6)
Document No.: EPA-HQ-OAR-2005-0161-2106
Organization: Endicott Biofuels II, LLC
Comment:
The commenter (2106) suggests that EPA begin implementation of the RFS2 regulatory program
on January 1, 2010 or as soon as possible thereafter but much sooner than January 1, 2011. The
mechanisms for RIN generation and compliance are already in place for a substantial portion of
the transportation fuels marketplace. While there have been some inevitable challenges, the
system is up and operating and therefore these refinements are incremental to a working system
to achieve the EISA goals. Any further delay has the effect of sending the wrong signals to the
renewable fuels marketplace where investments are necessary to achieve the EISA goals.
Additional, EPA has confirmed in this NPRM that it will be revisiting these rules on an annual
basis to correct any deficiencies in the rules that may occur with an aggressive implementation
date. [[Docket number 2106.1, p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-2110
Organization: Chevron
Comment:
The commenter supports the comments of API and NPRA.
The commenter (2110.1) thinks a year after final rule promulgation should be reasonable but
EPA should survey producers, including foreign, to confirm this view. Part of the year needs to
be devoted to logistics (purchase, transport, deployment) so that qualifying renewable fuels can
be available for compliance purposes on the program start date. Given the complex and unique
nature of the issues associated with this rulemaking, there will not be enough time for EPA to
promulgate final rules and for affected industries to make adequate preparations to comply with a
January 1, 2010 implementation date. The commenter believes that the earliest feasible option is
a January 1, 2011 start date, assuming that the final rule can be promulgated by the end of this
year. (2110.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2118
2-4
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RFS2 Summary and Analysis of Comments
Organization: CountryMark Cooperative, LLP
Comment:
The commenter (2118.1) believes that the RFS2 program should begin on January 1, 2011. The
January 1, 2010 implementation date would be infeasible. Due to the delay in promulgating the
RFS2 proposed changes, implementation of the program should be delayed to January 2011.
This would provide time to address record keeping requirements and other issues in the proposed
changes. (2118.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that the RFS2 program should begin on January 1, 2011. A
January 1, 2010 implementation date is infeasible. The commenter believes that the affected
industries need adequate lead time to implement these complicated new rules. There simply is
not time between now and January 1, 2010 to implement these rules. (2124.1, p.8)
The commenter believes that the only option is for implementation of the program is January 1,
201 lor later. (2124.1, p. 9).
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) states that the delay in OMB approval of the draft RFS2 proposal make it
highly unlikely that EPA can respond to comment and finalize the RFS2 rulemaking by the end
of October 2009 so that it can take effect on January 1, 2010. If EPA is unable to complete the
rulemaking on that schedule, the commenter urges EPA to delay implementation until January 1,
2011 and rely on the current RFS1 regulation for 2010. [[Docket number 2130.1, pp. 3 and 16]]
The commenter does not support a partial year 2010 implementation due to the complexity for
those who transact RINs, nor does the commenter believe EPA has the authority to impose EISA
total renewable volume until RFS2 rules are implemented.[[Docket number 2130.1, pp. 8 and
16]]
The commenter urges EPA to avoid the use of "advisories" regarding how it intends to
promulgate RFS2 requirements, particularly if EPA cannot meet its own schedule for
promulgating such requirements. [[Docket number 2130.1, pp. 8-9]]
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) noted that there are concerns regarding the rulemaking delay and
questioned the availability of cellulosic ethanol volumes next year. However, the commenter has
concluded that EPA should continue with the January 1, 2010, start date as proposed. If EPA
2-5
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Chapter 2: Effective Date
does delay the start date, however, it will need to provide clear direction to obligated parties
regarding the continuation of RFS1, and the commenter recommends applying a single standard
for the total renewable fuel under RFS1 regulations. (2132.1, p. 17)
Document No.: EPA-HQ-OAR-2005-0161-2136
Organization: Iowa Renewable Fuels Association (IRFS)
Comment:
The commenter (2136) urges the Agency to put in place interim rules for the RFS2 schedule
while taking more time to develop a strong scientific consensus on international ILUC, its
models and its assumptions. In addition, the commenter urges the Agency to finalize an interim
rule, and especially the biomass based diesel carve-out within the overall RFS2 schedule,
beginning on or before January 1, 2010. Such a rule needs to make clear that obligated parties
must meet the combined 2009 and 2010 biomass based diesel requirement in 2010. [[Docket
number 2136.1, p. 4]] [[See docket number 2136.1, p. 4 for additional discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2137
Organization: Brazilian Sugarcane Industry Association (UNICA)
Comment:
The commenter (2137.1) urges EPA to complete the RFS2 rulemaking at the earliest
opportunity, specifically so that the RFS2 mandate may be implemented starting on January 1,
2011. The commenter notes that the deadline by which Congress ordered EPA to revise the RFS
regulations already has passed. [[Docket number 2137.1, p. 10]]
While the commenter has some specific concerns, they believe that it is imperative to avoid any
further delay. The thoroughness of the analysis and conclusions in the proposed rule
demonstrate the extent to which the RFS2 can be finalized without delay. The commenter states
that EPA must reject requests for further delay and comply with the nondiscretionary mandate
specified in the EISA. [[Docket number 2137.1, pp. 11-12, 17]]
Document No.: EPA-HQ-OAR-2005-0161-2145
Organization: Flint Hills Resources
Comment:
The commenter (2145.1) supports implementation of the RFS2 program on January 1, 2011.
The January 1, 2010 start date is unrealistic because it does not provide affected parties with
enough time to prepare for implementation of the new requirements. The commenter agrees
with EPA that the second option considered, starting the program sometime during the 2010
calendar year, carries the many disadvantages described in the preamble. (2145.1, p.5)
The commenter also believes the requirements for the additional categories (advanced biofuels,
cellulosic biofuels and biomass-based diesel) should start contemporaneously with the rule in
2011. Prior requirements for 2009 and 2010 (which would likely have been modified) should
not be included. (2145.1, p.5)
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RFS2 Summary and Analysis of Comments
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) suggests that the RFS2 program effective date be delayed until January
1, 2011, to allow additional time for refinement and to give regulated parties an opportunity to
prepare adequately. The commenter would expect the current RFS1 program rules to remain in
effect in the interim. (2146.1, p.7)
Document No.: EPA-HQ-OAR-2005-0161-2148
Organization: Hornbeck Agricultural
Comment:
The commenter (2148) encourages EPA to defer the proposed regulations until such time as they
can be reformulated by applying the results of long-term research, accepted scientific principles,
and to be made consistent with the statutory mandates. (2148, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2149
Organization: Dynamic Fuels, LLC
Comment:
The commenter (2149.1) supports EPA's proposal that the RFS2 regulatory program start on
January 1, 2010. Holding firm on a January 1, 2010, start date would help to ensure that
renewable fuel producers and obligated parties are progressing on a timeline consistent with
EISA's intent. (2149.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2154
Organization: ConocoPhillips
Comment:
The commenter (2154.1) believes that there is not sufficient time to accomplish implementation
by January 1, 2010. It is possible that EPA will not even have the rule finalized and issued by
January 1, 2010. The commenter believes that the only feasible option is an implementation date
of January 1, 2011. This timeframe would allow the necessary time for the renewable fuel
producers to register and verify their processes and associated "D" codes for RIN generation. It
would also provide alignment with the projected availability of the EMTS, a significant tool that
will aid in facilitating the implementation of the program. (2154.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2155
Organization: Petroleum Marketers and Convenience Stores of Iowa (PMCI)
Comment:
The commenter (2155.1) believes that the effective date for the RFS2 should remain as January
1, 2010. If reasonable arguments can be made for the further assessment of indirect land use
formulas, then EPA should proceed with RFS2 without that component if for no other reason
than to preserve and better facilitate our renewable fuels production industry. (2155.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2233
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Chapter 2: Effective Date
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) believes the RFS2 programs should begin on January 1, 2011 because it
is extremely complex and the first of its kind. The commenter also believes that creating two
partial year compliance programs would create a degree of complexity and uncertainty that
might prevent the RFS2 from delivering its intended benefits. [[Docket number 2233.2, p. 1]]
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249) urges EPA to implement a workable program by January 1, 2010, which
should include volume requirements from both 2009 and 2010 in calendar year 2010. To ensure
continued investment and realization of the environmental and economic benefits derived from a
vibrant biodiesel industry, the commenter supports timely implementation. [[Docket number
2249.1, pp. 1-2]]
The commenter states that until EPA can finalize the RFS2 regulations, the current RFS
regulation can be used to implement the volume requirements for advanced biofuels and
biomass-based Diesel. Even if portions of the RFS2 program must be delayed as EPA continues
to work on the final rule, EPA must ensure an interim program is in place so that the annual
mandated volumes are met for 2009 and 2010, as required by the statute—this is a non-
discretionary duty of EPA. [[Docket number 2249.1, p. 3]]
[[Also see docket number 2249.2, pp. iv-v and pp. 3-9 for additional discussion of program
implementation and an interim program.]]
Document No.: EPA-HQ-OAR-2005-0161-2310
Organization: Low Carbon Synthetic Fuels Association (LCSFA)
Comment:
The commenter (2310) supports EPA's proposed effective date of January 1, 2010, as opposed to
an alternative date of January 1, 2011. We believe that any delay in implementation of the RFS-
II program could affect the ability of fuel producers to deliver volumes in future years by
negatively impacting their ability to obtain financing. [[Docket number 2310.1, p. 4]] [[See
docket number 2310.1, pp. 4-5 for further discussion of the effective date.]]
Document No.: EPA-HQ-OAR-2005-0161-2317
Organization: National Corn Growers Association (NCGA)
Comment:
The commenter (2317) believes that EPA should apply the renewable fuel volumes of EISA in
2010 and defer the remainder of the program to at least 2011, so as to ensure a new calendar
year, rather than a mid-year start date in 2010. [[Docket number 2317.1, p. 43]]
Document No.: EPA-HQ-OAR-2005-0161-2345
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RFS2 Summary and Analysis of Comments
Organization: Independent Fuel Terminal Operators Association (IFTOA)
Comment:
The commenter (2345) believes that a January 1, 2010 implementation date is unworkable and
does not support an implementation date in the middle of 2010. The commenter suggests
January 1, 2011 as this date will allow EPA sufficient time to formulate a workable rule and
provide the regulated community time to comply with the programs complex rules. [[Docket
number 2345.1, pp. 7-8]]
Document No.: EPA-HQ-OAR-2005-0161-2358
Organization: Society of Independent Gasoline Marketers of America (SIGMA) and the
National Association of Convenience Stores (NACS)
Comment:
The commenter (2358) does not support a January 1, 2010 implementation date and believes the
effective date should coincide with the start of the EMTS so that parties will not have to develop
and abandon procedures, and then develop new requirements mandated by EMTS. [[Docket
number 2358.1, p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2364
Organization: Tyson Foods, Inc.
Comment:
The commenter (2364.1) supports EPA's proposal that the RFS2 regulatory program start on
January 1, 2010. Holding firm on a January 1, 2010, start date would help to ensure that
renewable fuel producers and obligated parties are progressing on a timeline consistent with
EISA's intent. In addition, while there will of course be uncertainties associated with any
program, it is unclear that the benefits of delaying the start beyond January 1, 2010, outweigh the
costs. (2364.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter (2383) believes EPA should publish regulations to implement the basic
volumetric requirements for renewable fuels established by Congress without further delay. This
is critical to the continued viability of the current ethanol industry. [[Docket number 2383.1, p.
ES-1]]
The commenter adds that EPA should implement EISA's volume requirements beginning
January 1, 2010, but should defer implementation of the LCA GHG performance standard until
such standard is appropriately developed. [[Docket number 2383.1, p. ES-3, docket number
1959.1, p. 3, and docket number 2380, p. 3]]
The commenter urges EPA to immediately implement the RFS2 volume requirements while
continuing to examine the proper approaches to implementing other features of the 2007 Energy
Act. [[Docket number 2383.1, pp. 57-58]]
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Chapter 2: Effective Date
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP)
Comment:
The commenter (2384) recommends that the RFS2 commence on January 1, 2011. Compliance
with the final RFS2 requirements will take considerable time for biofuel producers and obligated
parties to implement. In addition the systems needed for the industry to comply are complex and
will take time for programming. The commenter believes the most workable solution would be
to continue the RFS1 program through 2010 and then transition into RFS2 in 2011. [[Docket
number 2384.1, p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) states that the extremely complex and first-of-a-kind nature of the issues
associated with this rulemaking, the length of time needed by EPA to promulgate final
regulations, and for impacted industries to prepare to comply, rule out a 1/1/2010 program start
date. It is critically important that obligated parties and all other parties involved in the RFS,
such as biofuel producers and distributors, have adequate time to prepare for implementation of
the complex four-tier RFS2 mandate. Also, the complexity of the compliance issues associated
with a partial year program should rule-out that possibility as essentially infeasible. The
commenter supports a 1/1/2011 start date, but adds that companies that followed EPA advice to
acquire bio-based diesel renewable identification numbers (RINs) in 2009 should not be
penalized. [[Docket number 2393.1, p. 2 and 2523.1, p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-2400
Organization: Murphy Oil USA, Inc.
Comment:
The commenter (2400.1) supports the effective date of 1/1/2011 for the RFS2 program. The later
start date will ensure more accurate positions for Refiners, Feedstock Producers, and even
Obligated Parties. Starting the program mid-year may affect its success. (2400.1, p.l and
2400.2, p.9)
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment: The commenter (2408.1) supports EPA's proposed effectiveness date of January 1,
2010 as opposed to the alternative date of January 1, 2011. Further delay in the implementation
of the RFS2 program will continue to negatively affect the ability of fuel producers to seek
funding and develop many of the new technologies which arc now in the pilot and demonstration
phases of development. (2408.1, pp.5-6)
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated
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RFS2 Summary and Analysis of Comments
Comment:
The commenter (2511.1) noted that if the agency is unable to complete the necessary refinements
to the rule due to the massive amount of review required and complexity of the proposed rule for
the industry, the commenter would not oppose a start date of 1/1/2011. The commenter does not
agree with a mid-year start date of the program. (2511.1, p.7)
Document No.: EPA-HQ-OAR-2005-0161-2423
Organization: Green Earth Fuels, LLC
Comment:
While regulators debate how to calculate complex new sciences such as international indirect
land use, the commenter (2423) states that countless biodiesel producers are going out of
business. People are losing their jobs, their savings, and their investments. Experienced
alternative fuels entrepreneurs are being driven from the industry. The commenter believes EPA
has the authority to stop this loss and proposes that EPA issue an immediate emergency rule for
obligated parties to meet the 2009 and 2010 obligations in the RFS2. This would qualify any
biodiesel purchases in 2009 and 2010, regardless of pending GHG calculation, until such time as
final rules are completed and published. This emergency rule is consistent with what EPA has
wisely included in its proposed rules; however, it would eliminate the regulatory uncertainty of
this obligation by making the obligation final, not "proposed." This strategy would also give the
agency time to adequately debate complex issues such as indirect land use change without
jeopardizing the industry the RFS is design to develop. [[Docket number 2423, p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-2465
Organization: Ford Motor Company
Comment:
The commenter (2465.1) supports the proposed implementation date of January 1, 2010 for the
Renewable Fuel Standard and the 36 billion gallons scheduled for 2022. The deadline of January
1, 2010 to initiate the RFS2 program should be maintained in support of the renewable fuel
industry. (2465.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2471
Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter (2471.1) urges EPA to allow for adequate lead-up time prior to implementation
after the final rule is issued. The issues involved in RFS2 are considerably more complex and
many key areas require additional time and effort to resolve. EPA should also provide notice as
early as possible, but at least by November 30, 2009, to clearly explain how the 2010 mandates
will be implemented both before and after the RFS2 effective date (assuming a mid-year 2010
start date). Stakeholders, including Obligated Parties and renewable fuel producers, need to
prepare accordingly; thus, EPA should take advantage of its statutory duty to set the 2010
renewable fuel standard in November to notify parties about the entirety of 2010 compliance.
The commenter also recommends that EPA set the RFS2 start date at the beginning of a new
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Chapter 2: Effective Date
compliance quarter. This will ease the reporting process and allow for a "clean break" between
RFS1 and RFS2 compliance. (2471.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2472
Organization: Valero Energy Corporation (Valero)
Comment:
The commenter (2472) believes the only workable option for implementation of the program is
January 1, 2011 or later. Even if EPA is able to promulgate a final rule before January 2010, it
will take until 2011 to accomplish the registrations that are required and to put in place the
systems and plans that are necessary for compliance. [[Docket number 2472.1, p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-2474
Organization: North Carolina Department of Transportation
Comment:
The commenter (2474) believes that EPA must act now with an interim final rule to ensure that
2009 and 2010 volumes are met as required by law. (2474, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2486
Organization: Primafuel, Inc.
Comment:
The commenter (2486) strongly supports expeditious implementation of RFS2. Any further
delay in implementation of the policies is unacceptable from a political, economic, and
environmental perspective. The commenter views the RFS2 as a dynamic regulation which, with
proper implementation, should generate clear and actionable price signals through RIN trading,
to motivate the development and uptake of lower carbon fuels and the technologies that produce
them. The commenter urges EPA to act immediately with an interim final rule to ensure that
2009 and 2010 volumetric mandates are met as required by law. "Congressional risk" threatens
sufficient levels of investment in low-carbon renewable fuels R&D and commercialization.
[[Docket number 2486.1, p. 1]]
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) believes that EPA should provide the affected industries adequate lead
time to implement these complicated new rules. There simply is not enough time between now
and January 1, 2010 for implementation. The commenter also believes that EPA should delay the
start of the program to January 1, 2012 if the rules cannot be promulgated by the end of 2010. If
EPA delays the implementation of RFS2 but is intent on increasing the required renewable fuel
volumes to implement EISA during 2010, EPA should use the existing RFS rules with the EISA
renewable fuel volumes (adjusted down for biomass-based diesel and cellulosic), similar to the
way that EPA implemented the RFS2 requirements in 2009. (2505.2, pp. 1-3) (See Docket
Number 2505.2, pp.1-3 for a detailed discussion of this issue)
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RFS2 Summary and Analysis of Comments
Document No.: EPA-HQ-OAR-2005-0161-2508
Organization: Environmental Working Group (EWG)
Comment:
The commenter (2508) strongly urges EPA, in the case that the rule is not approved in time to set
the mandate for 2010, to freeze the mandate at current levels until the rule is approved. (2508,
P-4)
Document No.: EPA-HQ-OAR-2005-0161-2537
Organization: Musket Corporation
Comment:
The commenter (2537) requests EPA issue an interim version of RFS2 in time to enforce the
2009 volumes in the EISA no later than January 1, 2010 unless a final version can be issued at
that time. [[Docket number 2537, p. 2]]
The commenter notes that EPA is proposing to combine the mandated 2009 volume of biomass-
based diesel with the 2010 volume, enforcing a two year total beginning no earlier than January
1, 2010. The commenter states that many investments in biomass-based diesel are currently
standing idle in the frustrated anticipation of supporting the congressionally-mandated 2009
volumes. Despite the recommendations that EPA published in 11/08 recommending that
obligated parties should behave in 2009 as if the final rule had been enacted, EPA in May 2009
is requesting ideas on how to delay even further adding doubt as to the value of 2009 efforts.
This has the effect of penalizing forward-thinking companies who invested in 2009 compliance.
[[Docket number 2537, pp. 1-2]]
EPA requests comment on the challenges that will be faced by the fuel distribution system and
the steps that will be necessary to facilitate the volumes of renewable fuels required under EISA.
The renewable fuel distribution system stepped up to the challenge in 2007 and 2008, led
completely by market forces, and far exceeded Congress' expanded renewable fuel targets for
those years. For the new 2009 requirement for biomass-based diesel we believe that the biggest
challenge that the distribution system currently faces is the uncertainty caused by the ongoing
delay in the issuance of final RFS2 rules. The distribution system for biomass-based diesel is, in
many cases, independent of the feedstock used to produce the renewable fuel. The investment in
these important distribution facilities, therefore, should not be confounded with the also
important debate surrounding virgin versus waste biomass feedstocks which may take
considerably more time to complete. [[Docket number 2537, p. 2]]
Our Response:
Under CAA section 211 (o) (2) (A) as modified by EISA, EPA was required to adopt
regulations to implement the new requirements of EISA within one year of enactment, or
December 19, 2008, with the expectation by Congress that all of the RFS2 program requirements
and applicable volumes would apply starting with calendar year 2009. However, as described in
the NPRM, we were not able to promulgate final RFS2 program requirements by December 19,
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Chapter 2: Effective Date
2008. EPA published the proposed rulemaking on May 26, 2009. Since the NPRM was not
published until after 2009 had started, EPA sought comment on various options for starting the
requirements of the RFS2 program (e.g., 1/1/2010, 1/1/2011, or a mid-2010 start date) depending
on the timing of the final rule. This includes inviting comment on what volumes of renewable
fuels should be required for calendar year 2010.
As evidenced above, we received a wide range of comments on these issues from a broad
array of stakeholders expressing either their support for and/or concerns with these various
options. A number of commenters also suggested that EPA should issue interim standards
particularly for biomass-based diesel applicable until such time as the final rulemaking could be
promulgated. Our response to the comments regarding an interim rulemaking can be found in
Section 3.6.2.
Some of the concerns expressed with regard to starting the RFS2 program on January 1,
2010 related to the time needed to complete the lifecycle analyses, including the analysis of
uncertainty. As described more fully in Section 7, we have completed the revised lifecycle
analyses for this final rule and used them as the basis for assigning various renewable fuel
production pathways to the four categories defined by EISA. The time needed to finish our
lifecycle analysis is therefore not a reason to delay implementation of the RFS2 requirements any
further.
EPA is issuing this final rule in January 2010. The issue regarding the effective date that
is before the agency is twofold: (1) what date should regulated parties - refiners and importers
of gasoline and diesel, and producers and importers of renewable fuel - have to start complying
with the new requirements in the RFS2 regulations, and (2) for refiners and importers of gasoline
and diesel (obligated parties), what volumes of renewable fuel should they have to meet during
calendar year 2010. In addressing these two issues, EPA was guided by two goals. One goal
was to maximize compliance with the requirements Congress set out for calendar year 2010.
That means implementing as expeditiously as practicable the transition to the requirements of the
RFS2 regulations, such as the implementation of the new definitions of renewable fuel and the
renewable biomass from which they are produced. It also means requiring the use of the four
renewable fuel volumes expected by Congress for calendar year 2010. In effect this goal calls
for transitioning as expeditiously as practicable to the RFS2 program, and doing it in a way that
maximizes the ability to meet the volume requirements Congress set for calendar year 2010.
EPA also had another goal - to provide the regulated parties with adequate lead-time to
transition to the new requirements of the RFS2 regulations and to establish renewable fuel
volume requirements that provide adequate lead-time for the obligated parties. In considering
the lead time needed by the regulated parties, EPA recognized that the RFS2 program and the
required volumes would require parties to make changes in their behavior, however in most if
not all cases, the changes build on a preexisting program and call for updating and revising
current practices, as discussed in more detail below.
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RFS2 Summary and Analysis of Comments
As discussed in Section LA.2. of the preamble, EPA has determined that the appropriate
balance of these two goals calls for the transition from using the RFS1 regulatory provisions
regarding registration, RIN generation, reporting, and recordkeeping to using comparable
provisions in this RFS2 rule to occur on July 1, 2010. This is the start of the 1st quarter
following completion of the statutorily required 60-day Congressional Review period for such a
rulemaking as this. This will provide adequate lead time for all parties to transition to the new
regulatory requirements, including additional time to prepare for RFS2 implementation for those
entities who may find it helpful, especially those covered by the RFS program for the first time.
In addition, making the transition at the end of the quarter will help simplify the recordkeeping
and reporting transition to RFS 2.
In addition, we are applying the RFS2 renewable fuel volume obligations on a calendar
year basis for 2010. That is, EPA used a full year's volume of the four renewable fuel categories
to establish the volume obligation for refiners and importers. In determining the applicable
percentages used by obligated parties, EPA used the entire 2010 calendar year projected volumes
for gasoline and diesel, and the entire 2010 calendar year volumes for renewable fuel given in
section 211 (o), with certain exceptions. EPA set the applicable percentages using a volume of
12.95 B gallons of renewable fuel, and 0.95 B gallons of advanced biofuel. EPA used less than
the entire 0.1 B gallons of cellulosic biofuel, based on our projection of the total volume of
cellulosic biofuel for 2010, under section 211 (o) (7) (D). For biomass-based diesel, EPA used a
combined volume of 1.15 B gallons covering both the 2009 and 2010 volumes of 0.5 B gallons
and 0.65 B gallons. Using these volumes, EPA determined the applicable percentages that
obligated parties will use to determine their renewable volume obligations (RVOs) at the end of
a calendar year. Obligated parties are required to apply the annual percentages to the volume of
gasoline or diesel fuel they produce during the full calendar year. Obligated parties must
demonstrate compliance with their RVOs in an annual report that is due two months after the end
of the calendar year. For 2010, the four RFS2 RVOs for each obligated party will be calculated
on the basis of all gasoline and diesel produced or imported on and after January 1, 2010,
through December 31, 2010. Obligated parties will be required to demonstrate by February 28
of 2011 that they obtained sufficient RINs to satisfy their four 2010 RVOs.
As discussed below, regulated parties have adequate lead-time to comply with these
requirements. The transition described above will ensure that the regulations will comply in
large part with the results Congress intended for 2010, even if the time needed for this
rulemaking means the results Congress desired for 2010 cannot be fully achieved.
In discussing the adequacy of the lead time to meet these requirements, there are two
distinct groups of regulated parties that should be considered separately, as the regulatory
requirements and related lead time concerns differ. These two groups are obligated parties and
renewable fuel producers and importers.
Obligated parties - refiners and importers of gasoline and diesel.
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Chapter 2: Effective Date
These parties are required to register with EPA and satisfy various record keeping and
reporting requirements. In general all of these parties are already registered with EPA for
various fuel programs, and gasoline refiners and importers are already registered under the RFS1
regulations. Any new or updated registrations must be submitted by July 1, 2010, but the
information required is straightforward to develop and submit. Obligated parties already
registered under RFS1 need not re-register under RFS2. Parties who are not already registered
under RFS1, such as the limited number of parties who refine or import diesel but not gasoline,
will need to submit initial registrations. In most if not all cases these parties are already
registered with EPA under other fuel programs. The time provided for registration is adequate to
meet this straightforward requirement.
Recordkeeping will call for ensuring that adequate records are kept, which in most cases
will mean updating the current RFS1 record systems. For diesel only refiners or importers not
already covered by RFS1, there is a need to ensure an adequate record keeping system is in
place, however the information called for is the kind of information that will normally be
generated in producing or importing diesel fuel and in obtaining and tracking the purchase of
RINs to demonstrate compliance. These parties have been on notice since EISA was passed and
since the proposal was issued of the need to develop such recordkeeping systems. The lead-time
provided by this rule should be adequate for what is a relatively straightforward recordkeeping
requirement. The first reports to EPA are not required until several months after the rule is
issued, providing adequate time to comply with the reporting requirements
Obligated parties will need to satisfy their volume obligation by the end of February
2011, which is when they submit their annual report to EPA. In that annual report they will need
to demonstrate that they have adequate RINs to satisfy their renewable volume obligations.
These volume obligations are calculated as a percentage of the entire volume of gasoline and
diesel produced or imported during colander year 2010, so it is expected that obligated parties
will obtain RINs from renewable fuel producers throughout the year. In determining the
adequacy of lead time to meet this 2010 volume obligation, one needs to consider whether there
will be an adequate supply of RINs generated by renewable fuel producers for obligated parties
to comply, and whether there is adequate lead time for the obligated parties to implement
commercial relationships to obtain these RINs.
On the first issue, two kinds of RINs can generally be used to meet the 2010 volume
obligation - (1) 2010 RFS1 RINs, generated on January 1, 2010 through June 30 31, 2010, and
up to 20% of 2009 RFS1 RINs, to the extent there are credits from over compliance with the
2009 volume obligation, and (2) 2010 RFS2 RINs generated from July 1, 2010 through the
remainder of 2010. (In addition, certain 2008 RINs can be used for compliance with the 2010
biomass-based diesel standard. See Section 3.6.3.) In effect the entire production of renewable
fuel for 2010 plus a certain amount of the renewable fuel production of 2009 may be used to
satisfy the parties' volume obligations. RFS1 RINs have been produced throughout 2009 and
continue to be produced since the beginning of 2010. There has been and will be no gap or lag
in the production of RINs, as the RFS1 regulations continue in effect and require that renewable
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RFS2 Summary and Analysis of Comments
fuel producers generate RINs for the renewable fuel they produce. These 2009 and 2010 RFS1
RINs will be available and can be used towards the RFS2 volume requirements of obligated
parties for 2010. As discussed in Section IV of the preamble EPA projects that an adequate
supply of renewable fuel will be produced or imported in 2010 with corresponding RINs to meet
the all of the volume obligations that must be met for 2010l. This projected volume of 2010
renewable fuel, combined with the ability to use a certain percentage of 2009 RFS1 RINs, means
that there will be an adequate supply of RINs for obligated parties to use in demonstrating
compliance with the 2010 volume obligation established in this rule.
On the second issue, compliance requires obligated parties to develop a commercial
relationship with generators or owners of RINs so that the obligated party purchases or otherwise
obtains enough RINs to demonstrate compliance. Obligated parties do not need lead time for
construction or investment purposes, as they are not changing the way they produce gasoline or
diesel. They do not need time to design or install new equipment, nor take other actions that
require longer lead time. Obtaining the appropriate amount of RINs involves contractual or
other arrangements with renewable fuel producers or other holders of RINs. Obligated parties
now have significant experience implementing RFS1, and the actions needed to comply under
the RFS2 regulations are a continuation of these kinds of RFS1 activities. In addition, the
renewable fuel producers have an economic incentive to sell RINs they generate, as compared to
having them expire before they are sold. It is clear that there is an incentive for RIN generators
to enter into the kind of commercial relationships that obligated parties need to enter to be able to
demonstrate compliance. Based on the significant experience already developed under RFS1,
and the ongoing generation of RINs, there is clearly adequate lead-time for obligated parties to
develop the commercial relationships needed so they can obtain enough RINs by the end of
February 2011 to demonstrate compliance with their 2010 volume obligation.
EPA has also considered whether the required volumes of renewable fuel can in practice
be produced or imported, transferred, transported and blended or otherwise used. This is
discussed in Section IV of the preamble and Chapter 1 of the RIA. As discussed there, it is
feasible to produce or import, transport and blend or otherwise use the volumes of renewable
fuels called for in 2010 under the RFS2 program.
Renewable fuel producers and importers
As discussed in Section IV of the preamble, EPA projects that the 2010 volume
requirements for renewable fuel, biomass-based diesel, and advanced biofuel will be met in large
part by ethanol produced from corn, ethanol produced from sugarcane, and biodiesel produced
from soybean and renewable biodiesel, and a limited volume of cellulosic biofuel that will be
produced. There may be a limited volume of renewable fuels from other sources, but they are
not projected. For the vast majority of this volume of projected renewable fuel, the producers or
1 For discussion of the adequacy of the volume of biomass-based diesel from 2009 and 2010, see Section IV.B.4 of
the preamble.
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Chapter 2: Effective Date
importers involved are already registered with EPA for RFS1 and have recordkeeping and
reporting systems designed to implement the RFS1 requirements.
For RFS2 there are also new restrictions on the biomass that can be used to produce
renewable fuel, and renewable fuel producers and importers who generate RINs are subject to
new requirements designed to implement these biomass restrictions. The biomass restrictions
are described in more detail in Section II.B.4 of the preamble. For ethanol and diesel produced
from crops and crop residue, the "aggregate" approach adopted by EPA means there should be
no lead time concerns with addressing the new requirements. For other renewable fuel producers
not covered by the aggregate approach, the producer and/or importer will need to have adequate
records to demonstrate that the renewable fuel was produced from renewable biomass that met
the requirements of the regulations. These recordkeeping requirements are new, but they call for
the producer and/or importer to obtain information that should already be available to them in the
normal course of their business - the source of the feedstock used to produce the renewable fuel.
If not kept already, then it is information that can reasonably be obtained in the normal course of
business. The time provided to meet this requirement should be adequate, given the nature of the
information and business records that must be kept.
Producers or importers of renewable fuel will generate RINs when they produce or
import the renewable fuel, and there are limited changes to the codes within RINs from RFS1.
These changes have been made to implement the new categories of renewable fuels, and will call
for RIN generators to determine the fuel's specific pathway prior to generating the RINs. In
most cases this is just a variation on practices already occurring under RFS1, using basic
information that is developed in the normal course of the business. In some cases, a party will
need to register with EPA as a fuel producer, if they have not already done so. Only a limited
number of new entrants to the renewable fuel market will be in this situation, and the information
required for this is generally straightforward for the current renewable fuels and kept in the
normal course of business.
Producers of renewable fuel in other countries may decide to be the RIN generator for the
fuel they produce that is exported to the U.S. In that case they need to follow all of the same
requirements applicable to domestic renewable fuel producers. As noted above, the information
needed to do this is all information they have or can obtain in the normal course of their
business. In addition, there are additional compliance related provisions that must be met,
however they are also matters that are straightforward to address.
The discussion above makes it clear that generators of RINs will have to submit
additional information to EPA and keep additional records to support that the RINs they generate
are valid, compared to RFS1. However this information is all information that should be
available in the normal course of business, and in many cases is similar to or an update to
information already kept under RFS1. The vast majority of RIN generators in 2010 are expected
to be parties already implementing the RFS1 regulations, either now or in the recent past. In
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RFS2 Summary and Analysis of Comments
these circumstances the lead time for the start of the RFS2 regulations for producers and
importers of renewable fuel should be adequate.
In addition, obligated parties and other regulated parties have received adequate notice of
these obligations and generally are well on their way to preparing for compliance. Since
December of 2007 when EISA was signed, the basic obligation of both gasoline and diesel
producers to meet the EISA volume requirements has been clear. The proposed rule called for
obligated parties to meet the full volume mandates for all four volume mandates, and to base
their volume obligation on the volume of gasoline and diesel produced starting January 1, 2010.
It also provided EPA's position on other changes called for by EISA, including the new
renewable biomass definition. The final RFS2 regulations are largely similar to the proposal as
far as the requirements that parties must meet. Changes from the proposal to the final in many
instances reduce the burden and the lead time needed for compliance. Based on discussions
with a wide variety of stakeholders, the requirements in EISA itself and EPA's proposal have led
regulated parties to take many actions preparatory to implementation of the RFS2 requirements.
Across the regulated industries, therefore, parties generally now need to finish those
preparations, as compared to starting from scratch upon issuance of the final rule. This provides
additional support for EPA's view that, as discussed above, there is adequate time for regulated
parties to meet the requirements of the RFS2 regulations, including for obligated parties to meet
their 2010 volume obligations by February 28, 2011.
This approach for volume requirements in 2010 does not impose any retroactive
requirements. The obligation that is imposed under the RFS2 regulations is forward looking - by
February 28, 2011, when compliance is determined, obligated parties must satisfy certain volume
obligations. These future requirements are calculated in part based on volumes of gasoline and
diesel produced prior to the effective date of the RFS2 regulations, but this does not make the
RFS2 requirement retroactive in nature. The RFS2 regulations do not change in any way the
legal obligations or requirements that apply prior to the effective date of the RFS2 regulations.
Instead, the RFS2 requirements impose new requirements that must be met in the future. There
is adequate lead time to comply with these RFS2 requirements, and they achieve a result that is
more consistent with Congress' goals in establishing four volume mandates for calendar year
2010, and for these reasons EPA is adopting this approach for calendar year 2010.
Some commenters expressed concern over the lead-time to develop electronic
recordkeeping and reporting programs, including the desire to transition from RFS1 to the new
EMTS program without an additional interim change. We also received numerous comments
indicating that EMTS should align with implementation of the RFS2 program, and that other
transition options such as monthly reporting were less desirable. We appreciate commenters'
concerns over having sufficient time to implement the new systems and/or make changes to
existing systems. EPA has throughout the development of EMTS utilized an open process for
sharing information with stakeholders. Since EMTS was first introduced in the NPRM, we have
conducted and continue to conduct workshops and webinars to inform stakeholders (providing
recordings of events on our website for on-demand replay) and to solicit stakeholder
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Chapter 2: Effective Date
participation in EMTS evaluation and testing. Additionally, EPA has stressed to the regulated
community that they should prepare and make plans for changing requirements associated with
new RFS2 requirements. As a result of our interactions with stakeholders, we are providing
three options for regulated parties to implement EMTS. Parties may interact with EMTS 1) via
an interactive web interface, 2) through a batch file uploading routine where batch files are
similar to RFS1 reporting, and 3) through direct node-to-node computer connections. Parties are
not limited to any one method and may change at anytime. All methods differ in the level of
technical sophistication required for implementation as well as time intensity for user
involvement. For example, parties planning to implement the node-to-node method may
experience technical issues or development constraints, and may utilize one of the other methods
until such issues can be resolved. In addition, EPA has created an XML conversion tool and
various outreach materials, including step by step tutorials, which will aid and educate EMTS
users. EPA pledges to continue to work with the regulated community, as a group and
individually, to ensure EMTS is successfully implemented. EPA anticipates that with this level
of assistance, regulated parties will not experience significant difficulties in transitioning to the
new system, and EPA believes that the many benefits of EMTS warrant its immediate use.
EPA did consider a range of other options on the effective date. In addition to a January
1, 2011 start date, we also took comment on imposing a mid-year start to the renewable fuel
volume obligations, despite the negative comments received on such an approach. For example,
EPA considered a more complicated option - (1) determine an RFS1 applicable percentage
based on just the total renewable fuel volume mandate, using the same total volume for
renewable fuel as used in the first approach, and require obligated parties to apply that
percentage to the gasoline produced from January 1, 2010 until the effective date of the RFS2
regulations, and (2) determine the four RFS2 applicable percentages as discussed above, but
require obligated parties to apply them to only the gasoline and diesel in 2010 after the effective
date of the RFS2 regulations. This approach would fail to ensure that the total volumes for three
of the volume mandates are met for 2010. In effect EPA would be requiring that obligated
parties use enough cellulosic biofuel, biomass-based diesel, and advanced biofuel to meet
approximately 50% of the total volumes required for these fuels under EISA, assuming that the
RFS2 standards went into effect on July 1, 2010. While the total volume mandate under EISA
for renewable fuel would likely be met, the other three volumes mandates would only be met in
part. This failure to maximize compliance with the requirements of EISA makes it appropriate to
reject this option, given there is adequate lead time to ensure the use of the entire annual volumes
as called for by these final rules.
In addition, this option would have introduced significant new complications into the
program for both standard setting and compliance. For instance:
(1) We would have been required to determine an RFS1 applicable percentage
standard based on just the total renewable fuel volume mandate, using the same
total volume for renewable fuel as used in our final action, and require obligated
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RFS2 Summary and Analysis of Comments
parties to apply that percentage to the gasoline produced from January 1, 2010
until the effective date of the RFS2 regulations
(2) We would have been required to determine the four RFS2 applicable percentage
standards as discussed above, but require obligated parties to apply them to only
the gasoline and diesel in 2010 after the effective date of the RFS2 regulations.
Another option would have delayed all of the RFS2 requirements until January 1, 2011,
which would avoid the complexity of the above alternative, but would be even less consistent
with EISA's volumes requirements. Again, given the adequate lead-time to implement the
requirements imposed in this final rule, it is appropriate for EPA to reject this option.
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Renewable Fuel Standard Program
(RFS2) Summary and Analysis of
Comments
Chapter 3
Major Elements of the Program
Required Under EISA
Assessment and Standards Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
v>EPA
United States EPA-420-R-10-003
Environmental Protection r , „„.„
Agency February 2010
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3. MAJOR ELEMENTS OF THE PROGRAM AS REQUIRED BY EISA
3.1 Changes to RINs 3-1
3.1.1 Valid Life of RINs 3-1
3.1.2 Designation of D Codes Differently for RFS2 3-2
3.1.3 D-Code for Cellulosic Diesel Fuel 3-4
3.2 Changes in Renewable Fuel Definitions 3-5
3.2.1 Renewable Fuel 3-8
3.2.2 Treatment of MSW 3-9
3.2.3 Advanced Biofuel 3-23
3.2.4 Cellulosic Biofuel 3-25
3.2.5 Biomass-Based Diesel 3-27
3.2.5.1 Definition of Co-processed 3-31
3.2.5.2 Algae 3-34
3.2.6 Additional Renewable Fuel 3-36
3.2.7 Biogas Used as Process Heat 3-42
3.3 Renewable Biomass 3-44
3.3.1 Alternative Legislative Definitions of "Renewable Biomass" 3-44
3.3.2 Definitions of Terms 3-45
3.3.2.1 Planted Crops 3-45
3.3.2.2 Crop Residue 3-47
3.3.2.3 Agricultural Land 3-48
3.3.2.4 Cleared or Cultivated and Actively Managed Agricultural Land 3-54
3.3.2.5 Fallow 3-56
3.3.2.6 Planted Trees 3-58
3.3.2.7 Tree Residue 3-61
3.3.2.8 Tree Plantations 3-62
3.3.2.9 Cleared and Actively Managed Tree Plantations 3-64
3.3.2.10 Slash 3-67
3.3.2.11 Pre-Commercial Thinnings 3-68
3.3.2.12 Forestland and Nonforested Land 3-72
3.3.2.13 Ecologically Sensitive Forestland 3-75
3.3.2.14 Old-Growth Forest 3-77
3.3.2.15 Areas at Risk of Wildfire 3-79
3.3.2.16 Animal Wastes and Byproducts 3-81
3.3.2.17 Other Comments on Definitions 3-82
3.3.3 Requiring a Demonstration that Feedstocks Meet the Renewable Biomass
Definition Prior to Generating RINs 3-84
3.3.3.1 General Comments 3-84
3.3.3.2 Direct Regulation of Feedstock Producers/Suppliers 3-86
3.3.3.3 Agricultural Land 3-87
3.3.3.4 Tree Plantations and Forestland 3-96
3.3.3.5 Verification Requirements for Non-Cultivated Feedstocks 3-97
3.3.3.6 Alternative Compliance Approaches 3-98
3.3.4 Requiring a Demonstration that Feedstocks Do Not Meet the Renewable
Biomass Definition Prior to Producing Renewable Fuel Without RINs 3-104
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3.3.5 Use of Data from USD A Programs 3-106
3.3.6 Third-Party Programs 3-109
3.3.7 Treatment of Foreign Renewable Fuel 3-113
3.3.8 Effect of "Renewable Biomass" Proposal on Achieving RFS Goals 3-120
3.3.9 Sustainability and Renewable Biomass Production 3-123
3.4 Renewable Fuel Exempt from 20 Percent GHG Threshold (Grandfathering) 3-126
3.4.1 Definition of Commence Construction 3-128
3.4.2 Basic Approach: Grandfathering Limited to Baseline Volumes 3-131
3.4.2.1 Limitation on Baseline Volumes 3-131
3.4.2.2 Changes at Facilities that Increase GHG Emissions 3-140
3.4.2.3 Comments on Allowing Tolerance Limit on Baseline Volume 3-141
3.4.2.4 Restriction of Deemed Compliant Facilities to Produce Only Ethanol 3-143
3.4.3 Alternative Options 3-144
3.5 Generation of RINs 3-150
3.5.1 Equivalence Values 3-151
3.5.1.1 Supports Energy-based Approach to Equivalence Values 3-151
3.5.1.2 Supports Straight Volume Approach to Equivalence Values 3-152
3.5.1.3 Other Aspects of Equivalence Values 3-159
3.5.2 RIN Generation for Domestic Producers 3-161
3.5.3 RIN Generation for Foreign Producers and Importers 3-163
3.5.3.1 Party that Generates RINs 3-163
3.5.3.2 Different Requirements for Foreign Versus Domestic Producers 3-165
3.5.4 Facilities with Multiple Applicable Pathways 3-167
3.5.5 Facilities that Co-process Renewable Biomass and Fossil Fuels 3-168
3.5.6 Fuels Without an Applicable D Code 3-169
3.5.7 RINs Generated for Electricity, Natural Gas, and Propane 3-172
3.6 Applicable Standards 3-173
3.6.1 Calculation of Standards 3-178
3.6.2 Treatment of Biomass-based Diesel in 2009 and 2010 3-180
3.6.2.1 Supports the Proposed Treatment of Biomass-based Diesel 3-184
3.6.2.2 Opposes the Proposed Treatment of Biomass-based Diesel 3-185
3.6.2.3 Request for Interim Rulemaking 3-189
3.6.2.4 Treatment of 2008 and 2009 Biodiesel RINs 3-193
3.7 Fuels that are Subject to the Standards 3-196
3.7.1 Coverage Expanded to Transportation Fuels 3-196
3.7.2 Treatment of Heating Oil and Jet Fuel 3-198
3.7.3 Treatment of Fuels for Use in Ocean-Going Vessels 3-198
3.8 Renewable Volume Obligations (RVOs) 3-200
3.8.1 Treatment of RFS 1 RINs under RFS2 3-202
3.8.2 RINs Eligible to Meet Each RVO 3-205
3.8.3 Deficit Carryovers 3-205
3.8.4 Obligated Volumes 3-206
3.8.5 Exported Renewable Fuel 3-207
3.9 Designation of Obligated Parties 3-209
3.9.1 Supports Existing Approach 3-209
3.9.2 Blenders or Other Downstream Parties Become Obligated Parties 3-213
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3.9.3 Expired RINs Used to Reduce Nationwide Obligation for the Following
Year 3-217
3.9.4 Other 3-217
3.10 Separation of RINs 3-219
3.10.1 Nonroad Diesel Fuel, Heating Oil, and Jet Fuel 3-219
3.10.2 Exporters 3-222
3.10.3 Neat Renewable Fuels 3-222
3.10.4 Biodiesel 3-225
3.10.5 Other 3-226
3.11 Alternative Approaches to RIN Transfers 3-227
3.11.1 Opposes Allowing Producers and Importers to Separate RINs 3-227
3.11.2 Supports Allowing Producers and Importers to Separate RINs 3-232
3.11.3 Direct Transfer Approach 3-237
3.11.4 Other 3-238
3.12 Treatment of Cellulosic Biofuel 3-242
3.12.1 Approach to Cellulosic Biofuel Credits 3-243
3.12.2 Adjustments to Other Standards in the Event of a Cellulosic Waiver 3-251
3.13 Production Outlook Reports 3-255
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RFS2 Summary and Analysis of Comments
3. MAJOR ELEMENTS OF THE PROGRAM As REQUIRED BY EISA
What We Proposed:
The comments in this section correspond to Section III of the preamble to the proposed
rule and address elements of the program required by the Energy Independence and Security Act
of 2007 (EISA). A summary of the comments received and our response to those comments are
located below (and in Section II of the preamble to the final rule).
3.1 Changes to RINs
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter states that EPA should require a cellulosic ethanol RIN generator to apply the
narrowest possible RIN type definition and allow the obligated party to choose if the fuel is used
to meet the cellulosic, advanced or total renewable fuel mandate. This approach should reduce
the risk of market manipulation to favor one product over another and enhance the available
information regarding each renewable fuel. [[Docket number 2393.1, pp. 8-9]]
Our Response:
Cellulosic ethanol that meets the definitional requirements of cellulosic biofuel will be
assigned a D code of 3. As described in the regulations at §80.1427(a) (2), a RIN with a D code
of 3 can be used to meet an obligated party's RVO for cellulosic biofuel, advanced biofuel, and
total renewable fuel. However, there is no requirement that an obligated party apply a RIN to all
the RVOs for which it is valid. Thus, an obligated party could apply a RIN with a D code of 3 to
its advanced biofuel RVO, but not its cellulosic biofuel or total renewable fuel RVO.
3.1.1 Valid Life of RINs
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes EPA can take actions to ensure RINs are available to all
obligated parties, including implementing the 12-month limit on the life of RINs and eliminating
the use of equivalence values. Limiting the amount of excess RINs that may be available
ensures that RINs move through the system, and are available to obligated parties. (2329.1, p.88-
89) [[See Docket Number 2329.1, pp.88-89 for a more detailed discussion of the 12-month
limit]]
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Chapter 3: Major Elements of the Program As Required By EISA
Our Response:
As described in the final rulemaking for the RFS1 program [72 FR 23933], we have
implemented the 12-month limit on the life of "credits" under the statute by allowing RINs to be
valid for 12 months following the year in which they are generated. Thus, the valid life of RINs
will span two annual compliance periods, and RINs can be used for compliance purposes in the
year generated and the following year. The rollover cap (see Section 5.4) limits the amount of
excess previous-year RINs that can be used for compliance purposes and ensures that the valid
life of RINs is real. Further limits on the number of RINs that could be used for compliance
purposes, and the elimination of Equivalence Values, are not necessary to implement the credit
provisions under the Act and would make RINs less available for compliance purposes in the
marketplace. EPA's decision to retain energy-based equivalence values is discussed in Section
II.D.I of the preamble and Section 3.5.1 of this S & A document.
3.1.2 Designation of D Codes Differently for RFS2
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) supports the alternative of the six D codes to distinguish the difference
between 2009 RINs and 2010 RINs. (0994.1, p.3)
Upon examination of the proposed regulations §80.1425(g), the commenter notes that EPA has
not utilized the six D codes. The commenter recommends that the regulations be changed as
such. The commenter also recommends that Table 1 for §80.1426 be revised to utilize the six D
codes, recognizing that the D=l and D=2 apply to 2009 biofuels and their RIN numbers. Tables
2 and 3 of this section also need to be changed to reflect use of the six D codes. (0994.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2014
Organization: Clean Fuels Clearinghouse
Comment:
The commenter (2083.1) recommends that EPA modify the proposed regulations to utilize a
sequence of codes as 3, 4, 5, and 6 for RFS2. In this way there will be no dual intra-year
representation for the use of codes 1 and 2, and the same effect will be achieved. (2083.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) agrees with EPA's proposal to use four D codes numbered 1, 2, 3 and
4, and to only allow RINs with a D code of "2" to be able to be used to meet the RVO for
Biomass-based Diesel.
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RFS2 Summary and Analysis of Comments
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) supports EPA's proposal, which makes minimal changes to the current
RIN.
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) generally supports EPA's approach of maintaining the existing RIN
structure, but modifying the D code to identify the categories of renewable fuels. The
commenter is concerned, however, about the possibility of this system growing in complexity if
EPA attempts to implement the RFS2 program mid-year, or if obligated parties become
responsible for averaging various biodiesel fuels to meet the Act's GHG threshold. EPA should
avoid these complexities by making the biodiesel producers or importers responsible for meeting
the GHG reduction thresholds. (2505.2, p.6)
Document No.: EPA-HQ-OAR-2005-0161-2471
Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter (2471.1) noted that if in finalizing the rule EPA changes a particular biofuel's
qualification in a manner that in essence "demotes" its "D-code" assignment, EPA should
provide notice and allow an opportunity to comment before finalizing. The commenter believes
that EPA should also allow for notice and comment before finalizing a new pathway assessment
or revised assessment that demotes the previously-assigned "D" code for a fuel. (2471.1, p.l 1)
Our Response:
We agree in concept with the need for a minimum of four separate D codes under RFS2. As
discussed in section II of the preamble, we believe that the best way to do this to allow for a
smooth transition from RFS1 to RFS2 is to maintain the use of D codes 1 and 2 for RFS1 RINs,
since RINs will be generated under RFS1 regulations for the first part of 2010. Subsequent D-
Codes in the final regulations are then assigned to RFS2 RINs. These D-codes effectively allow
renewable fuel producers to distinguish their product as meeting the 4 different renewable fuel
categories under RFS2, and allow obligated parties to demonstrate compliance with the 4
different RFS2 standards.
As described in preamble Section V.C, there is no longer a need to allow for averaging of
various types of biodiesel in order to meet the GHG threshold associated with the biomass-based
diesel standard. Therefore, the D code structure that we have finalized will not create additional
complexities in this context.
The final D codes assigned to individual renewable fuel pathways as shown in the lookup
table in §80.1426(f) are based on the updated lifecycle analysis completed for this final rule.
Stakeholders were given an opportunity to provide comments on the draft versions of those
lifecycle analyses in the NPRM, and EPA reviewed those comments as part of the process of
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Chapter 3: Major Elements of the Program As Required By EISA
updating those analyses. If additional pathways are added to the lookup table in the future, or
changes made to the D codes assigned to existing pathways, stakeholders will be given an
opportunity to provide comment on draft versions in a notice-and-comment process.
3.1.3 D-Code for Cellulosic Diesel Fuel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter opposes the alternative approach to create 5 D codes to give obligated parties the
choice to apply RINs for cellulosic biodiesel to either its cellulosic biofuel or biomass-based
diesel obligation, but not both. (2329.1, p.91)
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter opposes EPA's proposed alternative treatment of cellulosic-based diesel, which
would create five D codes and give the obligated party the choice to apply that RIN to either its
Cellulosic Biofuel or Biomass-based Diesel obligation, but not both. Congress clearly intended
to treat Biomass-based Diesel separately from Cellulosic Biofuel, by creating two distinct RVOs
and a higher volume mandate for Cellulosic Biofuel than Biomass-based Diesel. The definition
of Cellulosic Biofuel and Biomass-based Diesel do not coincide, and EPA should require
cellulosic diesel to be applied toward the Cellulosic Biofuel requirement, [[docket number
2249.2, p. 12]]
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter supports the alternative D code definitions in Table III.D.2.a-l but does not
agree that the producer should be allowed to choose whether to categorize his product as either
cellulosic biofuel or biomass-based diesel. The commenter suggests that EPA create a flexible D
code that would denote a fuel that can be counted as either, and that the obligated parties have
the ability to choose whether to apply such a RIN to cellulosic or biomass-based diesel. (2124.1,
p.32)
Document No.: EPA-HQ-OAR-2005-0161-2145
Organization: Flint Hills Resources
Comment:
The commenter (2145.1) recommends that a separate D code be established for cellulosic diesel.
Cellulosic diesel has the unique ability to qualify as "Biomass-based Diesel" or as "Cellulosic
Biofuel". The commenter believes the obligated party should have the decision rights to use
these RINs in either category depending on its needs. This can be accomplished by assigning a
unique D code to this type of renewable fuel (e.g., D code "5"). Under this process, a producer
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RFS2 Summary and Analysis of Comments
would assign a D code of 5 to the fuel and the obligated party could use the RIN to satisfy the
obligation under biomass-based diesel or cellulosic biofuel. The RIN could still only be used in
one of these categories (2145.1, p.7)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) supports EPA's alternative D code approach to accommodate cellulosic
diesel. This approach would enable the obligated party to choose if the fuel is used to meet the
cellulosic, advanced or renewable fuel mandate. [[Docket number 2233.2, p. 7]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
In addition, the commenter supports EPA's alternative approach where an additional D code is
created to accommodate cellulosic diesel. This approach reduces the risk of market manipulation
to favor one product over another. It is also more appropriate to allow the obligated party to
determine the RINs ultimate use and is consistent with the "nested requirements" methodology.
[[Docket number 2393.1, pp. 8-9]]
Our Response:
We disagree with the comment that the definition of cellulosic biofuel and biomass-based
diesel do not coincide. As described in the proposal and the final rule, a renewable diesel made
from cellulosic feedstocks would meet the definition of both categories. As such, the D-code
must allow for cellulosic biofuel qualify for either the cellulosic biofuel standard or the biomass-
based diesel standard. As discussed in Section II.A of the preamble, we believe that the best way
of implementing this for the smooth implementation of the program is to have the cellulosic
diesel producer identify their product in a way that allows it to be used to qualify for either
standard. Therefore, we have created a separate D code of 7 for cellulosic diesel, and producers
are required to use this D code for any renewable diesel fuel that they produce from cellulosic
feedstocks.
3.2 Changes in Renewable Fuel Definitions
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) noted that Table II.A.1-1 should be revised to list all four categories
and their required volumes as well as the total renewable requirement so that it matches the
categories listed in all tables such as Table II.A-2. Table II.A.1-1 does not support the statement:
"As shown in the table, the volume requirements are not exclusive, and generally result in nested
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Chapter 3: Major Elements of the Program As Required By EISA
requirements." If the volumes are to be nested, then the regulations need to say so directly and
the direction of the nesting. (0994.1, p.2)
Our Response:
Table II.A. 1-1 in the NPRM reflects the four fuel volume requirements as stipulated in
EISA. The nested nature of these standards is made clear in the definitions of these four fuel
standards. We have attempted to clarify the text in the FRM to better explain the nested nature
of these volume requirements.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter noted that the fourth category should have its own name such as "Other
Renewable Biofuels" and should be used throughout these regulations. Then regulated parties
will know when the term "Renewable Fuel" is used, the regulations are referring to all four
categories of biofuel and not just the fourth category. Section II.A.2 and other like sections
should be revised and consistently use the term "categories". In Section II.A.2 there are
definitions of three of the biofuel categories; there also needs to be a definition for the fourth
category under its specific name. (0994.1, p.2)
Our Response:
There is not a separate standard for "Other Renewable Fuels". Given the nested nature of
the RFS2 standards, the total renewable fuel standard is made up of fuels required to meet the
advanced biofuel standard and any other renewable fuels meeting the renewable fuel definition.
The advanced biofuel standard in turn is made up of fuels required to meet the cellulosic biofuel
standard and the biomass-based diesel definition, and any other fuels meeting the advanced
biofuel definition. We appreciate that this matter may be confusing, and in the final rule and
preamble have tried to make the requirements clear.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2118
Organization: CountryMark Cooperative, LLP
Comment:
The commenter (2118.1) requests clarification on the definitions of advanced biofuels; biomass-
based diesel; and non-ester renewable diesel. Table 1 to §80.1426 provides the applicable D
codes for each pathway for generating RINs. The commenter believes that this table is
inconsistent with the above definitions. For advanced biofuels, there are only two pathways
identified that qualify: Ethanol from Sugarcane and Non-ester renewable diesel produced from
waste grease, waste oils, tallow, chicken fat, or non-food grade corn oil that is hydrotreated and
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RFS2 Summary and Analysis of Comments
co-processed in a facility that also processes petroleum feedstock. This is inconsistent with the
discussion of advanced biofuels in the preamble. Other feed stocks and pathways should qualify
for a D code of 2 or 3 such as waste grease, etc. hydrotreated in a dedicated process;
hydrotreating of non-edible plant oils such as camelina, jatropha, algae, or pennycress in a
dedicated process; etc. Section 80.1426 does not provide a method to qualify other fuel
pathways for applicability. (2118.1, p.3)
The commenter also noted that Table 1 to 80.1426 also provides three pathways for non-ester
renewable diesel each having different D codes of 2, 3, or 4. This is inconsistent with the
definition of non-ester renewable diesel. The commenter contends that non-ester renewable
diesel definition should include D codes of at least 2 or 3. The commenter believes that other
virgin plant oils that are non-edible such as camelina, jatropha, algae, or pennycress should
qualify for a D code 2 or 3. In addition, a dedicated facility that processes waste grease, etc.
should qualify as a D code of either 2 or 3. (2118.1, p.4)
Our Response:
The table in §80.1426 of the regulations has been substantially modified since the NPRM
to reflect the fuel pathways for which lifecycle assessments have been completed for the final
rule. Fuel pathways that have not yet been modeled, such as some of those listed by the
commenter, may still qualify in the future depending the results of future lifecycle GHG
assessments. The process by which future pathways are assessed and will be added to the table
in section 80.1426 is described in Section V.C. of the preamble.
However, the commenter appears to be confusing generation of RINs with use of RINs.
The table in §80.1426 is the table used by renewable fuel producers for the generation of RINs,
and identifies the specific RIN that should be generated for each qualifying renewable fuel.
Section 80.1427 describes the provisions for the appropriate use of RINs for compliance. RINs
may often be used for multiple standards. For example, any RIN with a D-Code of 3, 4, 5, or 7
may be used for compliance with an obligated party's total renewable fuel obligation.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2310
Organization: Low Carbon Synthetic Fuels Association (LCSFA)
Comment:
The commenter (2310) supports EPA's proposal to allow generation of RINs for renewable fuels
used as jet fuel, home heating oil, and locomotive and marine diesel. EPA should also allow
RIN credits to be generated for the sale of renewable fuels in the broadest possible applications.
[[Docket number 2310.1, p. 14]]
Document No.: EPA-HQ-OAR-2005-0161-2425
Organization: Petro Algae
Comment:
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Chapter 3: Major Elements of the Program As Required By EISA
The commenter (2425) does not agree with the exclusion of ocean vessels from the definition of
eligible transportation fuels. Ocean going vessels are a very large consumer of diesel fuel and a
major emitter of COz. By excluding ocean vessels, EPA will omit a significant sector and will
limit the demand of renewable fuels thus making it more difficult to reach the aggressive
consumption goals. [[Docket number 2425.1, p. 7]]
Our Response:
In keeping with the revisions to section 211 (o) of the Clean Air Act in EISA, we are
finalizing these provisions as proposed. EISA explicitly excludes fuel used in ocean-going
vessels from the definition of transportation fuel, so EPA does not have the discretion to adopt
the commenter's suggestion.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2486
Organization: Primafuel, Inc.
Comment:
The commenter (2486.1) believes that oils recovered from biomass streams post primary
processing should be considered waste greases. This should include materials like corn oil
recovered from dry-mill ethanol plants post-fermentation. [[Refer to Docket Number 2486.1, p. 1
for additional details of this issue.]]
Our Response:
We are allowing all waste greases, fats and oils that meet the definition of renewable
biomass to be valid for generating renewable fuels under RFS2. Any oils present in post-primary
processing that would otherwise be discarded would be considered waste oils. We have included
non-food grade corn oil in the lookup table in regulation section 80.1426(f) as a valid feedstock
for the production of biodiesel and renewable diesel.
3.2.1 Renewable Fuel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter believes that the proposed definition for "renewable fuel" in §80.1401 clearly
states that ethanol shall be denatured. This should be repeated in other places, such as
§§80.1426, 80.1428, 80.1460, and 80.1466. (2124.1, p.42)
Our Response:
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RFS2 Summary and Analysis of Comments
We have specified in §80.1401 that ethanol must be denatured before RINs can be
generated for it. We also reiterate this requirement in §80.1415 in the context of specifying its
Equivalence Value. However, §80.1401 is preceded by the following statement: "The
definitions of §80.2 and of this section apply for the purposes of this Subpart M." Therefore,
there is no need to repeat any part of the definitions in other sections of Subpart M.
3.2.2 Treatment of MSW
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2021
Organization: Fulcrum Energy
Comment:
The commenter (2021.1) believes that the text of EISA is ambiguous with regard to the
definition of Renewable Biomass and it is well within EPA's discretion to find that urban waste
qualifies as Renewable Biomass, especially post-recycled urban waste. Renewable Biomass
includes urban waste because the definition of Renewable Biomass lists the primary constituents
of urban waste that can be converted to biofuel: biomass gathered from areas of human
habitation, separated yard waste, and food waste. A careful textual reading shows that these
wastes need not be separated to qualify but, regardless, urban waste is sorted several times before
being converted to biofuel, which satisfies any reasonable requirement for sorting and separation
of the eligible components of urban waste. The commenter believes that EPA's final RFS2 rule
should clarify that such urban waste qualifies as Renewable Biomass, leaving no question that
fuels derived from urban waste can qualify as Renewable Fuel and Cellulosic Biofuel. (2021.1,
p.26) (See Docket Number 2021.1, pp.15-26 for a detailed discussion of this issue.)
The commenter also believes that if EPA concludes that urban waste must be sorted to remove
recyclable materials in order to be an eligible feedstock for some or all types of renewable fuels,
the commenter recommends that EPA define a new term, "post-recycled urban waste," to
describe the waste materials that would be allowable as biofuel feedstock. The commenter
recommends that Post-Recycled Urban Waste be expressly included in the RFS2 regulations as a
form of "Renewable Biomass" and defined as "solid waste derived from residential or
commercial waste streams that have been subjected to separation through a recycling process."
(2021.1, p.32) (See Docket Number 2021.1, pp.32-33 for a detailed discussion of this issue)
The commenter also believes that EPA must allow Advanced Biofuel to be derived from urban
waste because the definition of Advanced Biofuel in EISA leaves no question that urban waste is
an eligible feedstock. Congress clearly intended for the RFS2 program to allow the use of urban
waste to produce Advanced Biofuel, regardless of EPA's interpretation of the definition of
Renewable Biomass. Advanced Biofuel need not be derived from Renewable Biomass if it is
one of the five types of eligible fuels derived from a broader category of feedstocks. The ethanol
generated from urban waste fits at least two of those broader categories since it would be derived
principally from "cellulose, hemicellulose, or lignin," and "waste material." Urban waste-
derived ethanol is therefore eligible to be Advanced Biofuel under a careful textual reading of
EISA, so long as it meets the lifecycle greenhouse gas reduction requirements for Advanced
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Biofuel. (2021.1, p.8 & pp. 13-14) (See Docket Number 2021.1, pp.8-14 for a detailed discussion
of this issue).
Document No.: EPA-HQ-OAR-2005-0161-2021
Organization: Fulcrum Energy
Comment:
The commenter (2021.1) noted that EPA requested comment on its plan to assign Renewable
Identification Numbers (RINs) in situations where a facility co-processes a renewable feedstock
simultaneously with a fossil fuel feedstock. The commenter believes that most or all waste
plastics are either direct "food wastes" (e.g., packaging, utensils), become contaminated with
food residues after entering the waste stream, or are collected from the "vicinity of buildings and
other areas regularly occupied by people" which qualifies them as Renewable Biomass as
discussed above. The commenter recommends that EPA's final rule explicitly classify post-
recycled urban waste as a renewable feedstock and not consider it to be a mixed feedstock.
(2021.1, p.37) (See Docket Number 2021.1, pp.37-42 for a detailed discussion of this issue.)
Document No.: EPA-HQ-OAR-2005-0161-2401
Organization: Clean Energy
Comment:
The commenter (2401) urges EPA to include, not exclude, MSW as a qualifying feedstock for
renewable biomass under the RFS2. [[Docket number 2401.1, p. 3]] [[See docket number
2401.1, pp. 2-4 for extensive discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
The commenter (1044) supports changes to the renewable fuel definitions that include Municipal
Solid Wastes (MSW) in its original un-segregated (neat) form. (1044.1, p. 1)
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) believes that municipal solid waste (MSW) should not be considered
renewable biomass. [[Docket number 2130.1, p. 15]]
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) believes that the fact that Congress included MSW in EPAct 05, but not
later EISA 07 and limited EISA 07 to food and yard waste that is often contained in MSW
suggests Congressional intent to exclude MSW and provides an incentive for separation of those
renewable biomass components of MSW.
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
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RFS2 Summary and Analysis of Comments
The commenter (2393) believes that the fact that Congress included municipal solid waste
(MSW) in EPACT05, but not later in EISA07 and limited EISA07 to food and yard waste that is
often contained in MSW suggests Congressional intent to exclude MSW and provides an
incentive for separation of those renewable biomass components of MSW. [[Docket number
2393.1, p. 78]]
Document No.: EPA-HQ-OAR-2005-0161-2416
Organization: Enerkem
Comment:
The commenter (2416) urges EPA to include MSW as an eligible feedstock and notes that this is
within EPA's Authority and consistent with broad public policy goals. The definition of
"renewable biomass" in EISA includes materials that ordinarily comprise MSW - food waste,
yard waste, biomass removed from the vicinity of occupied structures, and wood waste.
Additionally, the definition of "advanced biofuel" includes "ethanol derived from waste material,
including crop residue, other vegetative waste material, animal waste, and food waste and yard
waste." As with renewable biomass, the listed materials are among those generally within the
scope of MSW. [[Docket number 2416.1, p. 3]]
The commenter believes that because the definitions in EISA reflect the composition of MSW,
the inclusion of MSW as a single category is consistent with the statute. Requiring biofuels
producers to separate waste streams into smaller component parts creates a significant cost and
compliance burden, without a corresponding benefit and is not necessary to comply with the
statutory language of EISA. [[Docket number 2416.1, p. 3]]
Additionally, the greenhouse gas profile of fuels derived from MSW is well within the most
aggressive greenhouse gas targets of the statute. EISA requires "advanced biofuels" to
demonstrate a 50 percent GHG reduction, while "cellulosic biofuel" must demonstrate a 60
percent reduction. A 2007 joint study between Michigan State University and the University of
Toronto indicated that MSW reduces GHG emissions by at least 65% percent compared to
gasoline, based on a GREET model analysis of lifecycle emissions. In addition, using EPA's
WARM model, the study showed significant GHG reductions for MSW-to-ethanol as compared
to landfilling MSW. The commenter states that if EPA included the reduction in landfill
emissions as a part of the lifecycle analysis of MSW, the emissions reduction profile of MSW
would be even stronger. [[Docket number 2416.1, p. 3]]
Regarding EPA's request for comments on the inclusion of certain non-fossil portions of MSW,
such as non-recyclable plastics, the commenter recommends that EPA allow non-recyclable
plastics to be included in the waste stream used to process fuels. Plastics represented 12% of
MSW in 2007 (EPA Waste Statistics). Overall recovery of plastics is small: only 7%. Of the 30
million tons of plastics generated in 2007, only 2.1 million tons of plastics were recycled. The
rest was discarded in landfills. Plastic trash bags, plastic packaging and plastics in non-durable
goods are virtually all discarded while recovery of PET (polyethylene terephthalate) soft drink
bottles is significant with a rate of more than 36%.
[[See docket number 2416.1, pp 3-6 for extensive discussion of this issue.]
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Document No.: EPA-HQ-OAR-2005-0161-2472
Organization: Valero Energy Corporation (Valero)
Comment:
The commenter (2472) urges EPA to interpret the definition of renewable biomass to include
MSW that contains, but isn't limited to yard and/or food waste. As EPA notes in the preamble of
the proposed rule (pg. 24922), the statutory definition of renewable biomass does not include a
reference to MSW as did the definition of "cellulosic biomass ethanol" but instead references
"separated yard waste and food waste." However, as EPA also observes, ethanol derived from
waste material and biogas including landfill gas are specifically identified as eligible for
consideration under the definition of advanced biofuel (pg. 24922). The commenter believes that
at a minimum, EPA should define all biogenic materials in MSW as renewable biomass and
consider them qualifying feedstock for renewable fuels. The commenter concludes that failure to
define, at a minimum, all biogenic materials in MSW as renewable biomass would be
counterproductive and contrary to Congress' inclusion of landfill gas as an eligible biofuel
feedstock, due to the fact that landfill gas is the result of the decomposition of the entire biogenic
portion of MSW. [[Docket number 2472.1, pp 10-11]] [[See Docket number 2472.1, pp 10-11
for further discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2491
Organization: International Council on Clean Transportation (ICCT)
Comment:
The commenter (2491) suggests that all components of MSW that are biogenic (derived from
plants and animals) in origin such as paper, yard trimmings, food waste, etc. should qualify as
renewable biomass. Therefore, an important criterion for classifying the components of MSW as
renewable or nonrenewable should be how it is produced. Although fuels can be made from
fossil derived waste such as plastics, they should not be characterized as renewable biomass.
However, there should not be any restrictions on fuel production from non-renewable portions of
MSW. [[Docket number 2491.1, p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-2095
Organization: New Planet Energy
Comment:
The commenter (2095) states that urban waste is an expressly permitted feedstock for advanced
biofuel. The commenter adds that carbon-based wastes represent the nation's most promising
and virtually untapped renewable energy source. Advanced conversion technologies, which will
be commercially proven and a recognized factor in the nation's energy mix within the next three
years, could produce enough ethanol from these resources to not only satisfy the requirement for
Advanced Biofuel in EISA but to completely eliminate U.S. dependence on foreign oil. Since
one of Congress' objectives in passing EISA was to promote the use of advanced biofuels with
reduced land-use impact, and urban waste is the only currently viable feedstock with no indirect
land-use impact, the commenter believes that it is especially important that urban waste be a part
of the RFS2 program. [[Docket number 2095.1, pp. 1-2]] [[See docket number 2095.1, pp. 3-5
for background information on advanced conversion technologies]]
Document No.: EPA-HQ-OAR-2005-0161-2532
Organization: BioEnergy Producers Association
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Comment:
The commenter (2532) points out that the text of EISA unambiguously requires ethanol derived
from urban waste to be considered advanced biofuel. Statutory context affirms that ethanol
derived from urban waste can be "advanced biofuel." The Obama administration, by its actions
and key appointments, has affirmed its commitment to advanced biofuels as an essential element
in America's quest for energy independence. The President has stated his intention to double
within three years the amount of energy that could be produced from renewable resources.
[[Docket number 2532, pp. 3-4]]
Document No.: EPA-HQ-OAR-2005-0161-2376
Organization: County Sanitation Districts of Los Angeles County
Comment:
Sanitation Districts strongly believe that as long as there is no attempt to "spike" the waste with
plastics beyond what is considered normal disposal for a community, the entire MSW waste
stream should be defined as a "renewable biomass." EPA can ensure that plastics and other
components of concern are present at the lowest levels possible. One approach could require that
in order for a community's MSW to qualify as renewable biomass, that community shall have a
recycling program that achieves diversion rates at least as great as the national average for the
year of qualification. [[2376.1 p.3]
The commenter states that waste-to-fuel advanced technologies have potential to produce
significant volume of renewable fuels that could help EPA achieve the RFS2 volume mandates
of 36 billion gallons of renewable fuel by 2022. However, the emerging waste-to-fuel industry
needs additional incentives to improve the economic feasibility of such projects. Credit trading
systems for renewable fuels such as the trading system in RFS will help the emerging waste to-
fuel industry gain economic stability and promulgate long-term investments. Therefore, we
again request that waste-derived renewable fuels be included in RFS2 in order to participate in
the credit trading system. [[2376.1 p.6]]
The commenter cites evidence on pages 5-7.
Document No.: EPA-HQ-OAR-2005-0161-2023
Organization: New York Biomass Energy Alliance
Comment:
The commenter (2023) supports the inclusion MSW as renewable biomass. The commenter also
believes that yard waste and food waste should be considered renewable biomass. The
commenter suggests categorizing landfill gas as an advanced biofuel, will make RFS2 serve as a
stimulant to improved waste handling and development of waste-to-energy technologies, while
contributing the overall EISA goal of reducing fossil fuel consumption. (2023.1.pdf, p6)
Document No.: EPA-HQ-OAR-2005-0161-2466
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Comment:
The commenter (2466) recommends that EPA include MSW that contains yard and/or food
waste within the definition of renewable biomass. (2466.1.pdf, p.8)
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Document No.: EPA-HQ-OAR-2005-0161-1995
Organization: Waste Management (WA)
Comment:
The commenter (1995.1) recommends that EPA interpret the definition of renewable biomass to
include MSW that contains, but isn't limited to, yard and/or food waste. The commenter
believes that at a minimum, EPA should define all biogenic materials in MSW as renewable
biomass and consider them qualifying feedstock for renewable fuels. Exclusion of MSW as a
qualifying feedstock would exclude unprocessed MSW from any role in the development of
renewable fuel under the Energy Independence and Security Act (EISA), and would also likely
severely limit the amount of yard and food waste available as feedstock for EISA-qualifying
fuel, since large quantities of these materials are disposed of as un-separated MSW. (1995.1,
pp.1-2) (See Docket Number 1995.1, p.2 for more discussion on this issue)
The commenter also believes that the inclusion of MSW in the definition of renewable biomass
should not reduce paper recycling. To ensure that the inclusion of MSW as renewable biomass
does not divert recyclable paper materials from recycling, EPA could define all MSW as
qualifying feedstock for renewable fuels as long as the producer can certify that the MSW came
from communities that provide recycling services for their residents, or comes from commercial,
industrial or institutional sources that operate or have access to a recycling program. (1995.1,
pp.2-3)
Document No.: EPA-HQ-OAR-2005-0161-2004
Organization: NxENRG
Comment:
The commenter (2004.1) is concerned that the proposed definition of renewable biomass does
not expressly include Municipal Solid Waste (MSW) in all forms. The exclusion of MSW will
severely limit the available feedstocks under both the advanced biofuels and cellulosic biofuels
categories. Not only does the exclusion of MSW reduce available feedstocks and thereby make
compliance more difficult, it undermines the opportunity to reduce the amount of materials in
our nation's landfills. The commenter believes that MSW should include all items that are
routinely placed in landfills including construction waste, demolition waste and used tires. The
commenter also believes that:
(1) All MSW should qualify as renewable biomass including plastics and used tires that are
derived in whole or in part from petroleum.
(2) There is no sound policy reason and no Congressional directive requiring that fossil portions
be treated differently than other components of MSW.
Document No.: EPA-HQ-OAR-2005-0161-2047
Organization: Terrabon
Comment:
The commenter [[2071]] states that by interpreting "separated yard and food waste" to include
MSW, the EPA will encourage the use of MSW as a feedstock and provide an environmentally
desirable alternative for disposing of MSW by allowing the repurposing of waste that would
otherwise be placed into costly, polluted landfills.
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RFS2 Summary and Analysis of Comments
The commenter [[2071]] also states that yard and food waste should be interpreted to include
MSW because it will facilitate the economics of the domestic fuel industry and fulfill the
objectives of the EISA in encouraging domestic fuel production using domestic feedstocks.
[[#2071.lp.3]]
The commenter [[2071]] states the American Clean Energy and Security Act of 2009, amended
the definition of renewable biomass to include MSW. HR 2454 states that renewable biomass
includes "the non-fossil biogenic pollution of municipal solid waste and construction,
demolition, and disaster debris." The House's amendment would definitively make clear that
MSW will be considered renewable biomass. EPA should follow the House's lead and include
MSW within the definition of renewable biomass. [[#2071.1 p.6]]
Document No.: EPA-HQ-OAR-2005-0161-2095
Organization: New Planet Energy
Comment:
The commenter (2095) states that EPA can and should interpret "renewable biomass" to include
urban waste. The commenter adds that carbon-based wastes represent the nation's most
promising and virtually untapped renewable energy source. Advanced conversion technologies,
which will be commercially proven and a recognized factor in the nation's energy mix within the
next three years, could produce enough ethanol from these resources to not only satisfy the
requirement for Advanced Biofuel in EISA but to completely eliminate U.S. dependence on
foreign oil. Since one of Congress' objectives in passing EISA was to promote the use of
advanced biofuels with reduced land-use impact, and urban waste is the only currently viable
feedstock with no indirect land-use impact, the commenter believes that it is especially important
that urban waste be a part of the RFS2 program. [[Docket number 2095.1, pp. 1-2]] [[See docket
number 2095.1, pp. 3-5 for background information on advanced conversion technologies]]
Document No.: EPA-HQ-OAR-2005-0161-2102
Organization: RENTECH, INC
Comment:
The commenter (2102.1) believes that the definition of renewable biomass should not be limiting
and therefore should explicitly include waste streams found in Municipal Solid Waste. Every
effort should be made to allow and encourage the use of renewable wastes that are collected as
part of rural and municipal waste and recyclable collection programs, or as part of conventional
municipal waste collection. These materials, tree and yard trimmings from various sources,
waste from food production and processing (including table scraps) are truly zero carbon
feedstocks as they are gathered in the normal course of municipal waste collection. The
definition should also seek to sweep in other materials that are currently not economic to recycle
but could be used in fuels production. (2102.1, pp.3-4) (See Docket Number 2102.1, p.4 for more
discussion of this issue)
Document No.: EPA-HQ-OAR-2005-0161-2112
Organization: Biomass Rules, LLC
Comment:
The commenter (2112.1) believes that not including MSW in the RFS2 standards eliminates
some 140 million tons of biogenic and non-biogenic MSW materials annually. As we pursue
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energy independence the U.S. can not afford to turn our backs on this significant source of
renewable energy. The commenter noted that of the roughly 56 cellulosic biofuel technologies
currently being developed, 20 percent (nearly 160 million gallons total capacity) of these planned
projects utilize MSW as a feedstock. (2112.1, p.5)
The commenter also believes that the neglect of biomass from federal lands in the proposed
RFS2 rule adds significant restrictions to the success of energy independence. Without the
inclusion of biomass from federal lands in the RFS2 standards, the incentive to remove this
undervalued resource from federal lands goes away. (2112.1, p.5)
The commenter noted that most of EPA's assumptions on advanced biofuel production are based
on the brief history of using corn for ethanol which the regulation is moving away from. This
rule is written for land-centric biomass (ag and forestry). It nearly ignores all the human-centric
biomass (wastes). (2112.1, p. 13)
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
Renewable Biomass from Waste
The commenters would like EPA to consider making post-recycling residues such as the biomass
portion of the waste material left over at material recovery facilities eligible as renewable
biomass feedstocks. The commenters believe that these residues from recycling programs,
separated out in the recycling process, fit within the letter and spirit of the definition of
renewable biomass. (2129.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) recommends that EPA interpret the term "renewable biomass" as
broadly as is reasonable, so that it includes both MSW and C&D streams as eligible feedstocks
under the RFS2. (2132.1, p.10).
Document No.: EPA-HQ-OAR-2005-0161-2302
Organization: UC Berkeley - Energy Biosciences Institute
Comment:
The commenter [[2302]] states that they strongly urge EPA to modify the category of renewable
biomass, "Separated food and yard waste" to include all forms of organic municipal sold waste,
including demolition and construction residues and food processing waste. Also they strongly
urge EPA to add a new category of renewable biomass, "8. Plant material, including invasive
species, removed for habitat restoration, fire mitigation, or as a result of natural disaster". They
further suggest that this new category be excluded from predictive assessments. Also that they
encourage EPA to include the possibility that new forms of renewable biomass may emerge that
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RFS2 Summary and Analysis of Comments
are not specifically designated in the rule, and that they support EPA's inclusion of CRP land as
agricultural.
The commenter [[2302]] also states that they encourage EPA to include rangeland as agricultural
land, and that they encourage that EPA not set limits on fallow periods, and that abandoned
agricultural land be included in the allowance for renewable biomass production. [[#2302 p. 1-2]]
Document No.: EPA-HQ-OAR-2005-0161-2310
Organization: Low Carbon Synthetic Fuels Association (LCSFA)
Comment:
The commenter also states that regulated entities for several years have planned facilities based
upon the settled expectation that biomass portions of MSW would be acceptable feedstocks
under the RFS2 program. Indeed, much of EPA's modeling analysis in the draft RFS2 assumes
inclusion of some MSW within the definition of renewable biomass. We urge EPA to not upset
these settled expectations and allow biomass portions of MSW as renewable fuel feedstock.
[[Docket number 2310.1, p. 7] [[See docket number 2310.1, p. 6 for further discussion of this
issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2370
Organization: NGVAmerica
Comment:
The commenter (2370.1) believes that MSW, while not specifically identified under the
definition of renewable biomass, should be counted as renewable biomass for purposes of the
RFS Program. Even if renewable biomass does not include MSW, it is important to note that the
definition of advanced biofuel specifically includes "biogas (including landfill gas and sewage
waste treatment gas)." Even if MSW is somehow excluded from the general definition of
renewable biomass, the more specific definition of advanced biofuel expressly includes
biomethane produced from landfill gas and does not require the separation of yard waste and
food waste at the landfill in order to qualify. (2370.1, p.7)
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
2. MSW: There is no policy or scientific reason why material that is renewable and biogenic in
nature and may otherwise be discarded, should not be available as feedstock for the production
of renewable fuels. [[Docket number 2383.1, p. 14]]
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment:
The commenter (2408.1) believes that EPA should clearly include the use of municipal solid
waste ("MSW") and industrial waste gases in its definition for biomass. By including MSW in
its definition of renewable biomass, the EPA will maintain feedstock neutrality and enhance a
number of various participants who otherwise would be excluded from participation. The
commenter also urges EPA to consider defining MSW as it is defined in the Solid Waste
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Disposal Act of 2002. This approach would harmonize the EPA's approach with the approach
under the Solid Waste Disposal Act. (2408.1, pp.3-4)
The commenter also supports the inclusion of all non-recyclable waste streams found in MSW as
well as construction and demolition and disaster debris destined for landfills. Specifically, after
the last several natural disasters, significant amounts of refuse was available for use to produce
biofuels at affordable cost. The commenter believes this will significantly reduce the amount of
landfill waste, decrease total landfill methane emissions, reduce GHG impacts and extend the life
of the existing landfills. (2408.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2475
Organization: LanzaTech, Inc.
Comment:
The commenter urges EPA to include MSW in the definition of renewable biomass. Defining
renewable biomass to include MSW will capitalize on the opportunity to tap into what Congress
has identified as a valuable energy source. Additionally, by including MSW in the definition of
renewable biomass, EPA will maintain feedstock neutrality. In short, a broad definition of
renewable biomass which includes both MSW and industrial waste gases will further EPA's
goals of minimizing GHG emissions and reducing the carbon footprint. Finally, including MSW
in the definition of renewable biomass is consistent with similar definitions in existing federal
programs. [[Docket number 2475, p. 3]]
The commenter also believes that EPA should define MSW as it is defined in the Solid Waste
Disposal Act of 2002, adding that the definition of renewable biomass should explicitly include
all non-recyclable waste streams found in MSW destined for landfills. Currently, the anaerobic
decomposition of these wastes in landfills releases methane, a potent GHG with a global
warming potential 21 times that of carbon dioxide. Methane emissions from landfills constitute
34 percent of U.S. methane emissions. Even with advanced mechanisms to recover landfill gas,
approximately 30 percent of the landfill methane emissions will still reach the atmosphere.
Recognizing these waste streams in the definition of renewable biomass will reduce the amount
of landfill waste, decrease total landfill methane emissions, reduce GHG emissions, and
ultimately extend the life of existing landfills. [[Docket number 2475, pp. 3-4]]
Document No.: EPA-HQ-OAR-2005-0161-2526
Organization: Coskata
Comment:
The commenter (2526) urges the EPA to adopt an inclusive and attainable approach towards the
Renewable Biomass Definition and recordkeeping requirements. This will allow the cellulosic
biofuels industry to fully achieve its potential for reducing greenhouse gases. The commenter
makes the following points:
Waste streams should specifically include MSW and C&D waste.
Document No.: EPA-HQ-OAR-2005-0161-2532
Organization: BioEnergy Producers Association
Comment:
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RFS2 Summary and Analysis of Comments
The commenter (2532) notes that the implied requirement that only source separated food waste
or green waste will qualify for RINs and RFS2, which they believe is based upon a flawed
interpretation of the intent of federal statute, will place feedstock source separation and
regulatory reporting responsibilities on the shoulders of this industry that will meaningfully stifle
its development—whereas it is beneficial to the nation, both from an environmental and energy
recovery point of view, to encourage the production of advanced biofuels from the complete
range of carbonaceous materials that are now being placed in landfills. [[Docket number 2532, p.
2 and 2539, p. 1]] [[See docket numbers 2532, pp. 3-4 and 2539, p. 1 for discussion of food
waste, nonrecycleable paper, construction and demolition lumber, methane, urban waste, and
conversion technologies.]]
Document No.: EPA-HQ-OAR-2005-0161-2534
Organization: Minnesota Pollution Control Agency
Comment:
The commenter (2534) believes that the final rule should specifically allow MSW that contains
yard waste or food waste to qualify as renewable biomass. Although additional analysis is
needed, it is likely that the conversion of MSW to biofuel provides significant Greenhouse Gas
(GHG) benefit compared to landfilling. (2534, p.l)
The commenter also believes that the final rule should not require that both yard waste aid food
waste be present in the MSW for it to qualify. By replacing "and" with "or" the rule will fully
facilitate the use of MSW for biofuel. This clarification is also supported by the EISA definition,
which uses "separated yard waste or food waste" rather than separated yard waste and food
waste, as listed in the proposed rule. (2534, p.2)
The commenter noted that the processing of MSW into a biofuel involves technology, which can
utilize both the fossil and nonfossil portions of the MSW. The rule should clarify that both
portions will qualify as renewable biomass because of the significant potential for GHG benefits
from using all of the feedstock. By allowing the fossil portions of the MSW to be counted as
renewable biomass, the EPA will provide an incentive to use MSW in a way that could achieve
greater GHG benefits and reduce future landfill disposal. In the event that EPA chooses not to
include both fossil and non-fossil portions of MSW in the final definition of renewable biomass,
the commenter suggests that the final rule include, at a minimum, the nonfossil portion. The
commenter also believes that the final rule should not require the non-fossil portion to be
separated from the remaining MSW prior to processing, but rather acknowledge that the
separation requirement of the statute can be accounted for through the testing of the final fuel
product in accordance with recognized scientific methods such as ASTM test method D-6866.
(2534, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2047
Organization: Terrabon
Comment:
The commenter [[2071]] states that with the expected number of facilities Terrabon expects to
build, the commenter believes the reduction in GHG emissions will be 4.5 million tons by 2015
and 8.0 million tons by 2022. These GHG emission reductions would be even greater as other
companies use different technologies to convert MSW to biofuels. [[#2071.1 p.6]]
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Document No.: EPA-HQ-OAR-2005-0161-2549
Organization: Triton Energy LLC
Comment:
The commenter (2549.1) noted that the definition of "fallow land" may be in line with
terminology used within the United States Department of Agriculture (USDA), however
marginal lands, lands that are not suitable for agriculture represent potential areas for growing
energy crops. Given the large volumes of biofuel that will be required to fulfill RFS2, all land
and resources possible, including MSW, will be required unless or until there are major
advancements with algae oils or cellulosic biofuels. (2549.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2156
Organization: Georgia Forestry Commission
Comment:
The commenter (2156) recommends that demolition wood waste, construction wood wastes and
wood product manufacturing wood wastes in addition to backyard waste should be included in
the definition of renewable biomass. (2156.1 p.2)
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that EPA should promote the use of landfill gas, which may be
transported through common carrier pipelines. EPA should include the use of methane from
animal wastes and landfill gas, including methane transported through common carrier pipelines,
as part of the pathways in the final rule implementing the RFS2 program. (2329.1, p. 99-100)
Our Response:
The majority of commenters stated that MSW should be considered as renewable
biomass. American Petroleum Institute and Marathon Petroleum Company felt it should not be.
They argued that since EPAct of 2005 included MSW and EISA specifically did not, renewable
biomass is limited only to the separated yard and food waste portion of MSW.
Generally, commenters supporting the use of MSW in producing qualifying fuels under
EISA, favored either 1) a determination that unsorted MSW can be used as a feedstock for
advanced biofuel even if it does not meet the definition of renewable biomass, 2) that the Act be
interpreted to include MSW as renewable biomass, or 3) that MSW from which varying amounts
of recyclable materials have been removed could qualify as renewable biomass. Clean Air Task
Force et al. said that for EISA volume mandates to be met, it is important to take advantage of
biomass resources from urban wastes that would otherwise be landfilled. They urged that post-
recycling residues would fit within the letter and spirit of the definition of renewable biomass.
Fulcrum Energy, New Planet Energy, Enerkem and Bioenergy Producers Association
argued that the statute can be reasonably interpreted to allow advanced biofuel to be made from
material that does not meet the definition of renewable biomass. We do not agree with the
argument because the definition of advanced biofuel specifies that it is a form of "renewable
fuel," and renewable fuel is defined in the statute as fuel that is made from renewable biomass.
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RFS2 Summary and Analysis of Comments
While the definition of advanced biofuel includes a list of materials that "may" be "eligible for
consideration" as advanced biofuel, and that list includes "ethanol derived from waste materials"
and biogas "including landfill gas," the fact that the specified items are "eligible for
consideration" indicates that they do not necessarily qualify but must meet the definitional
requirements - being "renewable fuel" made from renewable biomass and having life cycle
greenhouse gas emissions that are at least 50% less than baseline fuel. There is nothing in the
statute to suggest that Congress used the term "renewable fuel" in the definition of "advanced
biofuel" to have a different meaning than the definition provided in the statute. The result of the
commenter's approach would be that general renewable fuel and cellulosic biofuel would be
required to be made from renewable biomass because the definitions of those terms specifically
refer to renewable biomass, whereas advanced biofuel and biomass-based diesel would not,
because their definitions refer to "renewable fuel" rather than "renewable biomass." EPA can
discern no basis for such a distinction. EPA believes that the Act as a whole is best interpreted
as requiring all types of qualifying renewable fuels under EISA to be made from renewable
biomass. In this manner the land and feedstock restrictions that Congress deemed important in
the context of biofuel production apply to all types of renewable fuels.
EPA also does not agree with Fulcrum Energy's argument that the listing in the
definition of renewable biomass of "biomass obtained from the immediate vicinity of buildings
and other areas regularly occupied by people, or of public infrastructure, at risk from wildfire"
should be interpreted to include MSW. It is clear that the term "at risk of wildfire" modifies the
entire sentence, and the purpose of the listing is to make the biomass that is removed in wildfire
minimization efforts, such as brush and dead woody material, available for renewable fuel
production. Such material does not typically include MSW. Had Congress intended to include
MSW in the definition of renewable biomass, EPA believes it would have clearly done so, in a
manner similar to the approach taken in EPAct, as Marathon Petroleum and API both argue.
EPA also does not believe that it would be reasonable to interpret the reference to "separated
yard or food waste" to include unsorted MSW. Although MSW contains yard and food waste,
such an approach would not give meaning to the word "separated."
The Clean Air Task Force et al stated that residues from recycling programs, separated
out in the recycling process, fit within the letter and spirit of the statutory definition of renewable
biomass. Also, the County Sanitation Districts of Los Angeles County argued that EPA could
ensure that plastics and other non-biogenic and fossil components of MSW are minimized. The
commenter suggested that waste collected in municipalities that had curbside recycling or other
comparable programs be considered separated for purposes of the definition of "separated yard
and food waste." Such an approach would leave to municipalities and waste handlers a
determination of how much waste should be recycled before the residue was used as a feedstock
for renewable fuel production. EPA believes that such an approach would not guarantee
sufficient "separation" from MSW of materials that are not yard waste or food waste to give
meaning to the statutory text. Nevertheless, the suggestion that the non-biogenic and fossil
components of MSW be minimized has merit. We believe it is reasonable to interpret the word
"separated" in the term "separated yard or food waste" to refer to the degree of separation that is
practicable. Material recovered from waste streams is typically sold to companies that will
recycle the material. EPA believes that the MSW-derived residue remaining after reasonably
practicable efforts to separate out recyclable materials should be considered separated yard and
food waste and, therefore, renewable biomass. The final rule adopts this approach. This MSW-
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derived residue would include some amount of residual non-recyclable plastic and rubber of
fossil fuel origin, much of it being wrapping and packaging material for food. Since this material
cannot be practicably separated from the remaining food and yard waste, EPA believes it is
appropriate to include it in the category of separated food and yard waste. In sum, EPA believes
that the residue remaining after paper, cardboard, plastic, textiles, metal and glass have been
removed for recycling should qualify as renewable biomass. This interpretation is consistent
with the text of the statute, and will promote the productive use of materials that would otherwise
be landfilled. It will also further the goals of EISA in promoting energy independence and the
reduction of GHG emissions from transportation fuels.
Producers using this second option, will need to determine what RINs to assign to a fuel
that is derived from a variety of materials, including yard waste (largely cellulosic) and food
waste (largely starches and sugar), as well as incidental materials remaining after reasonably
practical separation efforts such as plastic and rubber of fossil origin. EPA has not yet evaluated
the lifecycle greenhouse gas performance of fuel made from such mixed sources, so is unable at
this time to assign a D code for such fuel. The final rule, however, requires ASTM test method
D-6866 to be applied to the fuel made from MSW-derived feedstock. Through this method,
producers can determine what portion of the fuel is of biogenic origin. That biogenic portion of
the fuel will likely be largely derived from cellulosic materials (yard waste, textiles and
construction materials), and to a much smaller extent starch-based materials (non-cellulosic food
wastes). (See Tables 1 and 3 in EPA's "Municipal Solid Wastes in the United States, 2007 Facts
and Figures.) Unfortunately, EPA is not aware of a test method that is able to distinguish
between cellulosic- and starch-derived renewable fuel. Under these circumstances, EPA believes
that it is appropriate for producers to base RIN assignment on the predominant component and,
therefore, to assume that the biogenic portion of their fuel is entirely of cellulosic origin. The,
non-biogenic portion of the fuel, however, would not qualify for RINs at this time Thus, we are
providing via the ASTM testing method an opportunity for producers using a MSW-derived
feedstock to generate RINs only for the biogenic portion of their renewable fuel, and to assign a
D code of 3 (cellulosic biofuel) to such portion. There is no D code for the remaining fossil-
derived fraction of the fuel in the final rule. There is also no D code applicable to the entire
volume of renewable fuel produced when using MSW-derived residue as a feedstock. The
petition process for assigning such codes in the final rule can be used for such purpose.
NGV America suggested that biogas from landfills should be treated in the same manner
as renewable fuel produced from MSW. EPA agrees with the commenter to a certain extent. The
definition of "advanced biofuels" in EISA identifies "Biogas (including landfill gas and sewage
waste treatment gas) produced through the conversion of organic matter from renewable
biomass" as "eligible for consideration" as an advanced biofuel. However, as with MSW, the
statute requires that advanced biofuel be a "renewable fuel" and that such fuel be made from
"renewable biomass." The closest reference within the definition of renewable biomass to
landfill material is "separated yard or food waste." However, in applying the interpretation of
"separated" described above for MSW to landfill material, we come to a different result.
Landfill material has by design been put out of practical human reach. It has been disposed of in
locations, and in a manner, that is designed to be permanent. For example, modern landfills are
placed over impermeable liners and sealed with a permanent cap. In addition, the food and yard
waste present in a landfill has over time become intermingled to an extraordinary extent. This
occurs in the process of waste collection, shipment, and disposal, and subsequently through
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RFS2 Summary and Analysis of Comments
waste decay, leaching and movement within the landfill. Additionally, we note that the process
of biogas formation in a landfill provides some element of separation, in that it is formed only
from the biogenic components of landfill material, including but not strictly limited to food and
yard waste. Thus, food and yard wastes are effected a significant degree of separation from other
landfill materials through the process of biogas formation. As a result of the intermixing of
wastes, the fact that biogas is formed only from the biogenic portion of landfill material, and the
fact that landfill material is as a practical matter inaccessible for further separation, EPA believes
that biogas should be considered as produced from separated yard and food waste for purposes of
EISA. Therefore, we agree with the commenter that all biogas from landfills is eligible for RIN
generation
A number of commenters asked that additional waste streams be considered renewable
biomass, including construction and demolition wastes industrial waste gases, and invasive
species removed from lands for various beneficial purposes. However, EISA lists materials that
are eligible for consideration as renewable biomass, and EPA does not believe that these waste
categories fit within the statutory structure.
Comments regarding the lands from which renewable biomass may be obtained are
addressed in Section 3.3 of this document.
3.2.3 Advanced Biofuel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2303
Organization: American Bakers Association
Comment:
The commenter (2303.1) believes that EPA should restructure the RFS2 to accelerate the
development of advanced biofuels. Modifying the food-to-fuel mandates and restructuring the
RFS2 to give priority to advanced biofuels would limit the diversion of food to fuel. The
commenter encourages EPA to freeze mandates for conventional biofuels, and establish an "off-
ramp" that would automatically reduce the RFS2 for corn based ethanol in years when too much
food will be diverted to fuel. The commenter does not support efforts to fill the deficit created
by an inadequate supply of advanced biofuels with conventional biofuels. (2303.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2504
Organization: American Frozen Food Institute
Comment:
The commenter [[2504]] states that EPA should restructure the RFS to accelerate the
development of advanced biofuels. Modifying the food-to-fuel mandates and restructuring the
RFS2 to give priority to advanced biofuels would limit the diversion of food to fuel. And that
implementing the RFS 2 proposal would pose economic harm by significantly increasing the cost
of food, [[see #2504.1 p.l]]
Document No.: EPA-HQ-OAR-2005-0161-2309
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Organization: Grocery Manufacturers Association, National Council of Chain
Restaurants, and Snack Food Association
Comment:
The commenter [[2309]] urges EPA to restructure the RFS to give priority to advanced biofuels
and to limit the diversion of food and feed to fuel. The Clean Air Act provides EPA with the
power to waive the requirements of the RFS, in whole or in part, if implementation of the RFS
would severely harm the economy or the environment. [[#2309.1.p. 1]]
Our Response:
These comments are really comments on the CAA provisions in EISA and not on our
implementing regulations. EISA establishes the required volumes of each type of renewable
fuel, and EPA regulations are designed to create a program to implement and enforce those
volume requirements. As the commenters note, however, EPA is granted authority to waive
volume mandates specified in the statute under certain conditions. EPA intends to monitor the
effect of EISA implementation on the economy and will consider waiving volume requirements
if circumstances warrant.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2422
Organization: North American Affairs Committee of the International DME Association
Comment:
The commenter (2422) petitions EPA to specifically include DME as motor fuel in its
rulemaking. Many scientific tests have proven the merits of DME as motor fuel. DME is a
clean, colorless gas, with high ignition quality, which is easy to liquefy and transport which
makes it an ideal diesel fuel replacement, suitable for passenger cars, trucks and buses. The
commenter believes it offers great potential as a fuel for diesel vehicles due to its high cetane
number and environmental benefits (no soot, particulates or sulfur emissions). When made from
coal, natural gas or biomass, DME lowers CO and NOx emissions slowing global warming.
Moreover only modest engine modifications are required to use DME and such equipment is
available today. Extensive testing of advanced transportation fuels including DME has been
funded by government agencies. The results have proven the benefits of DME and methanol as
excellent low-carbon motor fuels. [[Docket number 2422.1, pp. 2-3]]
The commenter adds that various academic institutions that specialize in biofuels have confirmed
the merits of DME as a superior transportation fuel. Their testing confirms that these fuels have
low-carbon footprint and among the lowest green house gas emissions.
Leading global vehicle manufacturers have studied the performance of various renewable fuels
and find DME to be among the best biofuels in terms of performance, climate impact and energy
efficiency. [[Docket number 2422.1, p. 4]]
Our Response:
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RFS2 Summary and Analysis of Comments
This rulemaking is not approving fuels for use as motor vehicle fuels. Rather, those fuels
that meet all the other requisite requirements under the CAA and also meet the requirements
under 211 (o) for renewable fuels as implemented through the final RFS2 regulations are allowed
to generate RINs under the RFS2 program.
3.2.4 Cellulosic Biofuel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0953
Organization: Great River Energy
Comment:
The commenter (0953) believes that the proposed new Renewable Fuel Standards (RFS2)
definition and criteria has eliminated "other waste materials...and...otherwise used to displace
90% or more of the fossil fuel normally used in the production of ethanol" from the definition of
Cellulosic biofuel. The commenter feels that this change deals a serious financial blow to
owners and operators of Combined Heat and Power (CHP) plants and their renewable fuel
partners. (P.I)
The commenter notes that the new definition would shift some of the current "Cellulosic biofuel"
volumes into the conventional biofuel category, making it more difficult to achieve future
volumetric requirements. Eliminating the incremental RINs for each gallon produced from steam
fired conventional ethanol plants that no longer qualify under the proposed "Cellulosic biofuel"
definition, impedes the ability of power plants and other combined heat and power (CHP)
operations to attract new renewable fuel partners to utilize excess thermal energy and steam
rather than relying on the incremental combustion of primary fuel to drive the conversion process
tobiofuels. (P.I)
The commenter strongly advocates adding a simple steam fired CHP provision to the qualifying
definition of Cellulosic biofuel. This additional provision would make a meaningful contribution
toward improving energy independence and domestic security by promoting co-location of
renewable, advanced and cellulosic biofuels with new or existing combined heat and power
(CHP) plants without increasing the combustion of primary fuels. (P.I)
Document No.: EPA-HQ-OAR-2005-0161-2362
Organization: Canopy Prospecting, Inc. and Trinidad Dehydration Company, Limited
Comment:
The commenter (2362) believes that EPA should consider a waiver of the Cellulosic Biofuel
mandated description of a renewable fuel from any cellulosic, hemicellulosic, or lignin source so
as to include cane ethanol especially since its bagasse by-product is usually used in power
generation as well as for a new source of cane derived ethanol. Such a waiver would reduce the
proposed 60% reduction to 50% in the case of cellulosic ethanol for baseline lifecycle GHG
emissions. With such a modification any current projected shortfall for mandated volumes of
cellulosic ethanol would be replaced with superior advanced biofuels that meet the 50%
reduction goal. [[Docket number 2362.1, p. 2]]
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Our Response:
These comments are really comments on the CAA provisions in EISA and not on our
implementing regulations. In EISA, Congress eliminated the provision in EPAct that allowed
ethanol to be considered cellulosic biomass ethanol if produced in plants that use waste materials
to displace 90 percent or more of the fossil fuel normally used in the production of ethanol.
Thus, there is no such provision under the new definition of cellulosic biofuel, and the statute
does not provide EPA with the authority to modify the new definition. The statute also does not
allow EPA to provide other mechanisms for starch- or sugar-derived ethanol to be considered
cellulosic. However, the final rule does recognize that ethanol made from "cellulosic biomass
from agricultural residues" achieves the 60% GHG reduction threshold required of cellulosic
biofuel. Therefore, if the agricultural residues are renewable biomass, such fuel would be
eligible for cellulosic biofuel RINs.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2549
Organization: Triton Energy LLC
Comment:
The commenter (2549.1) noted that while the new statute more accurately defines cellulosic
biofuel, not providing incentives to existing ethanol producers to have a lower environmental
impact ensures that the industry will remain status quo given that it has been grandfathered.
While 2.5 RINs may be too high under the new program, the commenter believes that there
should be some incentives to the ethanol industry to improve its environmental footprint.
(2549.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2369
Organization: New Generation Biofuels (NGBF)
Comment:
The commenter (2369) states that while the new statute more accurately defines cellulosic
biofuel, not providing incentives to existing ethanol producers to have a lower environmental
impact ensures that the industry will remain status quo given that it has been grandfathered.
While 2.5 RINs may be too high under the new program, the commenter believes that there
should be some incentives to the ethanol industry to improve its environmental footprint.
[[Docket number 2369.1, p. 1]]
Our Response:
As discussed in response to the comments above, EPA does not have the authority to
amend the statutory definition of cellulosic biofuel in EISA. Nevertheless, we believe that
incentives will still exist to improve the lifecycle GHG performance of grandfathered renewable
fuel volumes. An incentive continues in the marketplace to reduce energy related costs in
producing fuels, which would also tend to improve GHG performance. In addition, any facility
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RFS2 Summary and Analysis of Comments
expansions beyond the baseline volume will require that the expanded volume meet the lifecycle
thresholds.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2502
Organization: Verenium Corporation
Comment:
The commenter (2502.1) believes that EPA should modify its definition of eligible feedstocks for
cellulosic biofuels production. To ensure consistent treatment and avoid undue discrimination
among these various types of biomass, a different definition along the following lines would be
more suitable:
"Cellulose and hemicellulose from agricultural residues (for example, including but not
limited to corn stover, wheat straw, rice straw, and sugarcane bagasse); planted grasses; planted
trees, slash and pre-commercial thinnings; and yard waste." (2502.1, p.5)
Our Response:
We do not believe that a new definition is needed. The statutory definition specifies that
cellulosic biofuel be renewable fuel derived from any cellulose, hemicellulose, or lignin that is
derived from renewable biomass. It is clear from the reference to "any" cellulose, hemicellulose
or lignin that the sources of cellulose and hemicellulose that the commenter cites are included.
3.2.5 Biomass-Based Diesel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) believes that Renewable Jet Fuel needs to be included in the discussion
on Advanced Biofuels, and should state that for Renewable Jet Fuel to qualify as Advanced
Biofuel it must use animal fats or waste greases as the feedstock. The discussion should also
specify that Renewable Jet Fuel produced from vegetable oils (and palm oils) are not classified
as Advanced Biofuel but are classified as Other Renewable Biofuel. The same discussion in
Biomass-based Diesel on co-processing in section III.B.l.d should be repeated in the Advanced
Biofuel section for Renewable Jet Fuel. (0994.1, p.4)
Our Response:
Renewable fuel that is used for jet fuel may fall into multiple renewable fuel categories
depending on its feedstock and lifecycle performance. Several pathways have been specified in
the regulations in §80.1426, while others will need to be added at a later date. However, the
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restrictions suggested by the commenters on what can qualify or not qualify as advanced would
be inconsistent with the requirements under the Act, and as such we do not have authority to
impose such restrictions. Renewable jet fuel does not have to be produced from animal fats or
waste greases for it to be considered an advanced biofuel, especially given the lifecycle results
now developed for the final rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
The commenter (1044) believes the definitions at §80.1401 are incomplete and offers the
following recommendation:
Non-Ester Renewable Diesel—the commenter proposes the definition of Non-Ester Renewable
Diesel to include the federally defined standards of both ASTM 975, as amended for
transportation fuel, and ASTM 396 for heating oil applications. In addition, the standard for
aviation (jet fuel) should be included. The commenter proposes the language change to state (3)
intended for use as transportation fuel, home heating oil or jet fuel and (4) to read &derived from
renewable biomass sources.
Their recommendation is based upon the fact the EISA changed the definition of the fuels and
the current definition does not codify the change. The language for item (5) does not correlate
with reference to §80.1426 and conflicts with §80.1426 table 1.
The commenter also feels the D code qualifier is inaccurate because renewable diesels can be
made with advance techniques other than hydro-cracking and thermal depolymerization. This is
supported by other companies being approved by the agency with technologies other than those
mentioned this year. The commenter believes these changes are warranted to accurately reflect
the intent of the EISA to capture transportation and alternate fuels as defined. [[Docket number
1044.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2099
Organization: Honeywell International, Inc.
Comment:
The commenter (2099.1) believes that EPA should include green diesel meeting ASTM D975
fuel specifications in its definition of biomass-based diesel. (2099.1, p. 13) (See Docket Number
2099.1, pp.13-14 for more discussion on this issue)
Document No.: EPA-HQ-OAR-2005-0161-2377
Organization: National Solid Wastes Management Association (NSWMA)
Comment:
NSWMA is concerned about the impact of these new biofuels on engine performance. We urge
EPA to mandate that cellulosic biofuels conform with ASTM's specification D-975 for diesel
fuels.
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Our Response:
We do not believe that the definition of renewable diesel or cellulosic diesel should
include the ASTM specifications in D-975 for diesel fuel. There may be renewable fuels or fuel
additives that are or will be approved for use in diesel engines, but which nevertheless do not
meet all specifications in ASTM D-975. In addition, heating oil and jet fuel are already defined
in §80.2. The definition of renewable fuel in §80.1401 requires such fuel to be made from
renewable biomass, and be used to replace or reduce the quantity of fossil fuel present in a
transportation fuel, heating oil, or jet fuel. Thus, §80.1401 codifies the changes in definitions
required by EISA, and these definitions apply to all RFS2 provisions in Subpart M.
The final lookup table in §80.1426(f) is more general that the one proposed in the NPRM
with respect to required elements of the renewable diesel production process. Moreover, insofar
as the lookup table does not specify a D code for a particular production pathway, a party can
petition the Agency for assignment of a D code through the provisions of §80.1416.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2147
Organization: Engine Manufacturers Association
Comment:
The commenter (2147.1) suggests that the final rule provide that any "neat" biodiesel used for
biodiesel/petroleum diesel blends be blended at a rate consistent with applicable industry
standards and manufacturers' guidelines. (Page 11)
Our Response:
The Agency would prefer that these issues be handled and addressed by industry outside
of EPA rulemaking to the extent possible, particularly if they relate more to vehicle performance
issues rather than to emission performance. The final RFS2 regulations allow biodiesel to be
blended at any level and still be valid for RFS2 compliance purposes so long as it is used as
transportation fuel, heating oil, or jet fuel. If necessary, we may address these issues through
future rulemaking efforts.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
While the commenter (2249.2) generally supports the definition of biomass-based diesel, they
urge consistency for purposes of complying with multiple federal agencies and recommends
EPA utilize the most updated version of the ASTM standard, which would make the definition
consistent with IRS tax guidance. (Docket number 2249.2, p. 10)
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Our Response:
We have included the most recent version of ASTM D-6751 in the definition of biodiesel
in §80.1401.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
With regards to the "Biomass-based Diesel and Non-ester Renewable Diesel" definitions, the
commenter (2132.1) recommends allowing "non-ester renewable diesel" to retain its chemically
natural interpretation as being something other than biodiesel and moving the code qualification
from this definition to Biomass-based Diesel, for a parallel construction of the two types of
biomass-based diesel. This change will make both definitions internally consistent and less
confusing, and it will improve flexibility in the event of future policy changes. (2132.1, p.9)
The commenter urges EPA to clarify that renewable fuels in general and non-ester renewable
diesel fuel in particular exclude non-hydrogenated vegetable oils. This change is needed to
ensure that only hydrogenated vegetable oils which undergo processing to remove oxygen and
thus are fully compatible with typical diesel fuel vehicles may be used to produce non-ester
renewable diesel. (2132.1,p.9)
Document No.: EPA-HQ-OAR-2005-0161-2099
Organization: Honeywell International, Inc.
Comment:
The commenter (2099.1) believes that EPA should revise the definitions of renewable fuel
categories to include categories of advanced biofuels able to meet EISA objectives and provide
certainty regarding appropriate RIN credits. (2099.1, p. 12) (The commenter's proposed
definition revisions can be found in Docket Number 2099.1, p.29)
The commenter believes that the definition of non-ester renewable diesel should be revised to
include fuel that qualifies for a D code of 2 or higher. (2099.1, p.14) (See Docket Number
2099.1, pp.14-15 for more discussion on this issue)
Our Response:
We agree that the definitions of biodiesel, non-ester renewable diesel, and biomass-based
diesel were not clear in the NPRM. They have been revised for this final rule to clarify that
biodiesel and non-ester renewable diesel are two different types of fuel that both meet the
requirements for biomass-based diesel. EPA, however, does not have authority under EISA to
revise the definition of advanced biofuels to include additional categories of fuel beyond those
specified in the Act. Moreover, we do not believe it would be appropriate to specify that
advanced biofuels include "green gasoline" as that term is not defined elsewhere in the
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regulations, and regardless the lookup table in §80.1426(f) identifies the specific types of fuels
that qualify as advanced biofuel. We do not believe that the definition of renewable diesel
should include ASTM D-975, as some renewable diesels or diesel additives are or may be
approved for use in diesel engines even though they do not meet all aspects of D-975. Finally,
we do not believe that non-ester renewable diesel should be allowed to be assigned a D code of 2
"or higher" as this would provide producers with inappropriate market power.
The Alliance of Automobile Manufacturers suggests that renewable fuels in general and
non-ester renewable diesel fuel in particular exclude non-hydrogenated vegetable oils. We are
not authorized to make such a change because the Clean Air Act (CAA) allows credit under
211 (o) for any qualifying renewable fuel. Accordingly, our RFS2 regulations must as well. It is
important to note, however, that qualifying as renewable under RFS2 does not constitute
qualification as a fuel under the CAA. To be a fuel, it must still satisfy any other applicable
requirements under the CAA, including 211 (f). Under present EPA policy, we will allow for the
use of vegetable oil as an additive at up to 5% in petroleum diesel fuel for use in motor vehicles.
3.2.5.1 Definition of Co-processed
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) supports EPA's proposal for defining renewable diesel as co-processed
or not co-processed. The commenter also supports EPA's proposed definition of co-processed.
This definition enables manufacturers of non-ester renewable diesel to categorize their product as
biomass-based diesel by choosing to operate existing or modified equipment in a blocked out or
sequential operation rather than processing the renewable feedstock simultaneously with
petroleum feedstock. The definition also provides additional flexibility to meet the biomass-
based diesel requirement in the most cost effective manner. (2124.1, p.21)
Document No.: EPA-HQ-OAR-2005-0161-2154
Organization: ConocoPhillips
Comment:
The commenter (2154.1) supports EPA's proposed definition of co-processed renewable diesel.
The proposed definition would allow producers of non-ester renewable diesel to categorize their
product as biomass-based diesel by choosing to operate existing or modified equipment in a
blocked out or sequential operation rather than processing the renewable feedstock
simultaneously with petroleum feedstock. (2154.1, p.8)
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
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The commenter (0994.1) supports EPA's definition of co-processing and agrees that the end
product classification, Advanced Biofuel or Other Renewable Biofuel, must depend on the GHG
reduction of the biomass feedstock. (0994.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-0999
Organization: Darling International Inc.
Comment:
The commenter (2151.1) believes that co-processing of biomass feedstock and petroleum
products in the same unit ("Co-mingling") is not the proper scenario to decrease our nation's
dependence on imported sources of petroleum or meet Congressional renewable fuel mandates.
Simply utilizing existing hydro-treating capacity available for processing crude oil does not
increase our nation's "refining" capacity and in no way lessens our dependence on foreign oil. If
the EPA were to allow this as an option, further development of the industry would be "on hold"
as potential investors of new units designed to convert biomass feedstock into renewable diesel
would have to wait to see if the difficult technical issues associated with Co-mingling could be
overcome. (2151.1, p.2)
The commenter does support the definition for "Co-processed" in the NPRM because it allows
an alternative to the traditional uses of a petroleum hydrotreater, reduces the risk profile for the
construction of new renewable diesel capacity and encourages investment in renewable fuel
development and production. At the same time, the definition does not promote or encourage
"Co-mingling" as a solution to meeting RFS2's biomass-based diesel volume mandates. (2151.1,
P-3)
Document No.: EPA-HQ-OAR-2005-0161-2106
Organization: Endicott Biofuels II, LLC
Comment:
The commenter (2106) recommends that EPA choose option 2 whereby only processing in
dedicated hydrotreating equipment can be considered as valid for compliance with production of
biomass-based diesel. This is the most practical option in our opinion since it is unlikely that the
same equipment would be able to readily switch from renewable feedstocks to petroleum without
change out of catalysts and/or other critical processing equipment. It is also recommended for
compliance purposes that the renewable portion of the fuel be held in a separate storage vessel
until such time as it can be certified and not be blended with petroleum diesel until final
certification. This should also be the case where further processing such as isomerization or
other pre or post hydrotreating steps occur. These criteria should also be strongly considered
where the finished product is renewable aviation fuels. [[Docket number 2106.1, p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) believes that the "co-processed" definition will help those newer
biofuels that can be produced at refineries, blended interchangeably with diesel fuel and are
compatible with vehicle technologies and existing infrastructure. (2132.1, p.9)
Document No.: EPA-HQ-OAR-2005-0161-2127
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Organization: Caterpillar Inc.
Comment:
The commenter (2127) encourages the EPA to reconsider the co-processing position.
Processing virgin plant oils, used oils and greases in refineries results in a renewable fuel that is a
drop-in replacement in the engines and that reduces, or eliminates, the risks of engine
incompatibility. The commenter believes the exclusion of co-processed fuel from consideration
as a renewable fuel can result in undue production burden and discourages the production of this
fuel by refining pathway. Table V.B4-3 of the NPRM shows the significant volume currently
co-processed with petroleum and shows a projected decrease in volume from new facilities due
to the current Proposed Rule. [[Docket number 2127.1, p. 10]]
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) recommends that the statutory definition of Biomass-based Diesel
expressly exclude biomass co-processed with petroleum feedstock. EPA seeks comments on two
options to deal with this exclusion. The commenter (2249.2) supports the second option because
it fulfills the intent of Congress. The 1 billion gallon requirement for Biomass-based Diesel was
based on estimates of biodiesel capacity in the United States, which is currently 2.69 billion
gallons. By excluding co-processing in the definition, Congress clearly did not intend for co-
processed renewable diesel produced by conventional petroleum refiners to qualify as Biomass-
based Diesel under the RFS2 program. There is no principled reason for EPA to treat refineries
that happen to separate the feedstocks and then mix the fuels later to allow the fuel to be
considered Biomass-based Diesel. Thus, EPA should exclude any renewable diesel coproduced
at refineries from the definition of Biomass-based Diesel, and implement the second option.
(docket number 2249.2, pp. 10-11)
Document No.: EPA-HQ-OAR-2005-0161-2310
Organization: Low Carbon Synthetic Fuels Association (LCSFA)
Comment:
The commenter (2310) believes that in order to more clearly demonstrate that only certain types
of co-processed fuels do not qualify as biomass-based diesel, EPA should alter the biomass
based diesel definition to read "renewable fuel that is simultaneously processed with petroleum
feedstock in the same unit or units is not biomass-based diesel." EPA could then eliminate the
definition of "co-processed," which the commenter believes is confusing in its own right as it is
limited to petroleum co-processing. [[Docket number 2310.1, p. 15]]
Document No.: EPA-HQ-OAR-2005-0161-2425
Organization: Petro Algae
Comment:
The commenter (2425) strongly disagrees with the definition of co-processing and the exclusion
of biomass-based diesel if co-processing occurs. The definition as included in RFS2 will remove
any possibility of manufacturing biomass-based diesel at refineries. This must seriously be
evaluated and reconsidered. The commenter believes that the definition of co-processing must
be changed, because it is not feasible as written and will limit biomass-based diesel processed
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through oil refineries. [[Docket number 2425.1, pp. 4 and 8]] [[See docket number 2425.1, pp. 4-
5 for further discussion of this issue.]]
Our Response:
Commenters were split between allowing biomass-based diesel to be processed in the
same equipment at a refinery provided that fossil fuel was not processed at the same time, and
allowing processing only in dedicated equipment. Darling International, Endicott Biofuels, and
the National Biodiesel Board favored the second option. We note that changes in refinery
capacity are not a requirement or goal in EISA as it relates to the production of biomass-based
diesel under RFS2. Nevertheless, our country is currently shutting down refining capacity.
Allowing petroleum refining equipment to instead produce renewable fuels would be both
financially and environmentally responsible and in keeping with the intent of EISA to reduce
dependence on foreign supplies of fuel.
The National Biodiesel Board states that "There is no principled reason for EPA to treat
refineries that happen to separate the feedstocks and then mix the fuels later to allow the fuel to
be considered Biomass-based Diesel." EISA is clear that co-processing of renewable biomass
and petroleum precludes the product from being categorized as biomass-based diesel, but says
nothing about mixtures of renewable fuels and petroleum-based fuels after processing. Our final
regulations implement the requirements of statute.
We selected the first option to be used in the final rule. We believe this is the most
straightforward approach and an appropriate one, given that it would allow RINs to be generated
for volumes of fuel meeting the 50% GHG reduction threshold that is derived from renewable
biomass, while not providing any credit for fuel derived from petroleum sources. In addition,
this approach avoids the need for potentially complex provisions addressing how fuel should be
treated when existing or even mothballed petroleum hydrotreating equipment is retrofitted and
placed into new service for renewable fuel production or vice versa.
Under the final rule, any fuel that does not satisfy the definition of biomass-based diesel
only because it is co-processed with petroleum will still meet the definition of "Advanced
Biofuel" provided it meets the 50% GHG threshold and other criteria for the D code of 5.
Similarly it will meet the definition of renewable fuel if it meets a GHG emission reduction
threshold of 20%. In neither case, however, will it meet the definition of biomass-based diesel.
This restriction is only really an issue for renewable diesel and biodiesel produced via the
fatty acid methyl ester (FAME) process. For other forms of biodiesel, it is never made through
any sort of co-processing with petroleum. Producers of renewable diesel must therefore specify
whether or not they use "co-processing" to produce the fuel in order to determine the correct D
code for the RIN.
3.2.5.2 Algae
What Commenters Said:
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RFS2 Summary and Analysis of Comments
Document No.: EPA-HQ-OAR-2005-0161-2425
Organization: Petro Algae
Comment:
The commenter (2425) states that although the definition of biomass diesel includes micro-algae,
it does not specifically include the more broad definition of micro-crops. Limiting the definition
will limit advancement in biofuel. [[Docket number 2425.1, pp. 3 and 8]] [[See docket number
2425.1, pp 3-4 for further discussion of algae and micro-crops.]]
Our Response:
As discussed in Section II.B.4 of the preamble, we have modified the definition of
"planted crops" to specifically reference duckweed and, more broadly, any crop intentionally
applied to a tank, pond or other growth medium. Thus, these micro-crops can qualify as
renewable biomass under the same conditions as other planted crops such as corn or soy. Algae
are separately listed in the definition of renewable biomass.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2490
Organization: Sapphire Energy
Comment:
The commenter (2490) notes that the current version of the RFS, including the amendments
made by the Energy Independence and Security Act of 2007, does not provide parity for algae-
based fuels. This lack of parity, which must be addressed through changes to EISA itself and is
beyond the scope of the present rulemaking proceeding, limits the ability of the current RFS
program to fully encourage the development of algae-based fuel. [[Docket number 2490.1, pp. 1-
2]]
The commenter adds that algae-based fuels are also presumptively excluded from the remaining
portion of the RFS. While the law does not specify that the first 15 billion gallons of the RFS
must be comprised of corn-based ethanol, existing market conditions are such that conventional
ethanol will likely comprise all of it. Furthermore, Congress has grandfathered corn ethanol
production facilities built prior to 2009 that meet a requisite 20 percent GHG reduction
threshold, further ensuring that corn ethanol will survive environmental scrutiny. Therefore, as a
practical matter, the RFS will start with 15 billion gallons of conventional, corn-based ethanol,
and the remaining 21 billion gallons will be comprised of advanced biofuels nearly 80 percent of
which will exclude algae-based biofuels. [[Docket number 2490.1, pp. 2-3]] [[See docket number
2490.1, pp. 1-4 for a discussion of this issue]]
Our Response:
This comment includes certain comments on the CAA provisions in EISA that EPA is
unable to remedy through its implementing regulations. In setting the volume requirements
under EISA for RFS2, Congress divided the total renewable fuel standard into four separate
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mandates. Biomass-based diesels, of which algal oil based diesel fuels would qualify, have their
own separate mandate. However, algal oil based fuels could also qualify for the advanced
biofuel and total renewable fuel standards. By virtue of the Act's restriction that cellulosic
biofuels be produced from cellulose, hemicellulose or lignin, only the cellulosic biofuel standard
would not be applicable for algal oil derived biofuels.
3.2.6 Additional Renewable Fuel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2471
Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter (2471.1) noted that EISA defines "additional renewable fuel" as fuel produced
from renewable biomass that is used to replace or reduce fossil fuels used in home heating oil or
jet fuel, and indicates that EPA may allow for the generation of credits for the production of such
additional renewable fuel. The commenter supports EPA's proposal to effectuate these
provisions and allow RINs attached to qualifying renewable fuel used as heating oil or jet fuel to
remain viable. The commenter believes that this change from RFS1 should help both biodiesel
producers and Obligated Parties. (2471.1, p. 15)
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter believes that marine use of blended biodiesel should not be excluded from
additional renewable fuel credit. [[Docket number 2130.1, p. 17]]
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) believes that the discussion in Sections II.A.2 and III.B.l.e needs to
clarify the concept that any qualified biofuel from one of the four biofuel categories, not some
other category called "additional renewable fuel" can now have RINs attached and used for
compliance when used as described for home heating oil or jet fuel. Biofuels used in these
applications are not "new" renewable fuels, but existing renewable fuels that are now qualified
for compliance purposes when used in these applications. (0994.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment:
The commenter (2408.1) supports EPA's intention to allow for RINs to be generated for
renewable fuels that displace fossil fuels used in jet fuel, home heating oil, locomotive and
marine diesels. The overarching goal of the statute was to reduce U.S. dependence on foreign oil
and lower the overall greenhouse gas footprint of fuels. Limiting renewable fuels only to those
used in ground vehicles is not consistent with those goals. EPA should assign RINs based on
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RFS2 Summary and Analysis of Comments
equivalency value of the energy contained in the fuel to each gallon of renewable jet fuel that
meets the ASTM specifications or other nonroad fuels. (2408.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter believes that EPA's interpretation of Congressional intent with the inclusion of
"home heating oil" as an additional renewable fuel is overly restrictive. The term "home heating
oil" is a generic reference. Congress did not intend to limit the crediting of biofuel use in heating
oil to only residential uses. This overly restrictive interpretation should be changed so as to
encourage the use of biofuels in stationary source and industrial applications. The commenter
points out that several states have either already imposed requirements or are considering such
requirements for blending biofuel into heating oil. It would be ineffective if biofuel mandated
for use in heating oil in state laws were not allowed to be credited under the RFS, particularly
given the limited amount of diesel-type biofuel qualified under the RFS2 thresholds. [[Docket
number 2393.1, p. 11]]
The commenter also supports allowing all renewable fuels to be counted towards RVO
compliance, including fuels used in ocean going vessels. Regarding the EISA-defined
Additional Renewable Fuel "home heating oil", the difficulty in ascertaining that fuels which can
be used for home heating are actually used for home heating suggests that any fuel that can be
used as home heating oil should qualify. The commenter believes this is the correct
interpretation of the intent of EISA and EPA should clarify in the final rule and preamble. If
EPA does not allow such an interpretation, this Additional Renewable Fuel, created by EISA, is
meaningless due to the inability of obligated parties to track home heating oil use to the
consumer. [[Docket number 2393.1, p. 10]]
Document No.: EPA-HQ-OAR-2005-0161-2314
Organization: The New England Fuel Institute
Comment:
The commenter (2134.1) strongly supports the proposal in the NPRM that would allow RINs to
be generated and traded when biodiesel is blended with heating oil. The commenter believes that
RINs generation will greatly assist the recent and ongoing efforts by the heating oil industry to
promote and market a product blended with renewable fuel. (2134.1, p.l)
The commenter also believes that allowing marketable RINs to be generated for renewable fuel
volumes blended with heating oil would significantly advance the transformation of this vital
product into a new generation "bioheat". (2134.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2328
Organization: Petroleum Marketers Association of America (PMAA)
Comment:
The commenter (2328.1) strongly supports the proposal that would allow renewable fuels used in
heating oil and jet fuel to generate RINs. The commenter believes that the RINs generation will
greatly assist the recent and ongoing efforts by the heating oil industry to promote and market a
greener product blended with renewable fuel. (2328.1, p.4)
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The commenter opposes any effort to subject these fuels to the RVO mandate. The problem with
calculating the RVO for heating oil obligated parties is that it is difficult to predict with any
reliability the volumes used for a particular year due to fluctuating winter weather conditions.
The commenter understands that neither EISA nor the NPRM calls for assigning RVOs to
heating oil refiners, importers or blenders but wishes to point out the logistical problems that
such a requirement would create for both the agency and the heating oil industry. (2328.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2345
Organization: Independent Fuel Terminal Operators Association (IFTOA)
Comment:
The commenter (2345) strongly supports the reinstatement of RINs for heating oil and jet fuel. It
is consistent with statutory intent to encourage as much use of renewable fuels as possible to
reduce petroleum usage and to reduce GHG emissions. [[Docket number 2345.1, p. 5]]
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter seeks clarification to ensure that biodiesel used in heating oil applications
meeting the latter definition in EISA is applicable for the renewable fuel category under RFS2.
The commenter also seeks clarification on D code applicability for biodiesel used in jet fuel or
home heating applications. [[Docket number 2249.2, p. 36]]
Document No.: EPA-HQ-OAR-2005-0161-2099
Organization: Honeywell International, Inc.
Comment:
The commenter (2099.1) supports EPA's proposed inclusion of jet fuel as additional renewable
fuel eligible to generate RINs. (2099.1, p.21)
Document No.: EPA-HQ-OAR-2005-0161-2102
Organization: RENTECH, INC
Comment:
The commenter (2102.1) supports EPA's intention to allow for RINs to be generated for
renewable fuels that displace fossil fuels used in jet fuel, home heating oil, locomotive and
marine diesels. By including additional fuels, EPA will promote the development and use of
renewable fuels by a broader spectrum of industries. The commenter believes that EPA should
assign RINs, based on Equivalency Value of energy contained in the fuel, to each gallon of
renewable jet fuel that meets the ASTM specification (ASTM 7566) or the specifications for
other nonroad fuels. This will allow fuel marketers and consumers greater flexibility in meeting
their obligations under the law, as well as encourage the development of renewable jet fuel
production. (2102.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2110
Organization: Chevron
Comment:
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The commenter (2110.1) believes that EPA should apply a broad interpretation of the definition
of home heating oil. The commenter urges EPA to view the term "home heating oil" as it appears
in Section 21 ll(o) (I) (A) as a generic reference to heating oil not intended to limit the crediting of
biofuel use in heating oil to only residential uses. This overly restrictive interpretation should be
changed so as to encourage the use of biofuels in such stationary source applications. Providing
credit for blending biofuel in heating oil under RFS2 would not only be consistent with RFS2
program goals of increasing renewable fuel use but also with existing mandates for use of biofuel
in heating oil in several of the states. (2110.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter believes that EPA's interpretation of Congressional intent with the inclusion of
"home heating oil" as an additional renewable fuel is overly restrictive. Home heating oil is a
generic reference to heating oil not intended by Congress to limit the crediting of biofuel use in
heating oil to only residential uses. [[Docket number 2130.1, pp. 11-12]]
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter supports allowing all renewable fuels to be counted in the program, including
fuels used in ocean going vessels. [[Docket number 2233.2, pp. 8-9]]
Document No.: EPA-HQ-OAR-2005-0161-2358
Organization: Society of Independent Gasoline Marketers of America (SIGMA) and the
National Association of Convenience Stores (NACS)
Comment:
The commenter (2358) suggests that RINs should be created when neat renewable fuel is
designated as transportation fuel, home heating oil or jet fuel. This approach simplifies the
tracking and trading system by limiting the possible number of transactions and advances the
programs goal. [[Docket number 2358.1, pp. 10-11]]
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
The commenter (1044) recommends the following change to §80.1401:
Home Heating Oil—the use of the phrases Home Heating Oil and Heating Oil are ambiguous. 40
CFR 80.2 clearly identifies the legal definition of heating oil. In this instance a new definition
for Home Heating Oil is needed as directed by the EISA. In addition, all references to heating
oil should be changed to home heating oil (HHO) as a consistent use of the term throughout
RFS2. [[Docket number 1044.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2135
Organization: Ad Hoc Coalition of Small Business Refiners (SBR)
Comment:
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The commenter (2135) agrees with the proposal that petroleum based heating oil should not be
included in requirement calculation for renewable volume obligation. If, however, renewable
fuels are used in boiler and heating or off-road applications, the commenter believes that their
associated RINs should not have to be retired. Thus, renewable fuels, such as biodiesel, that are
blended into non-motor vehicle fuels should not void the RINs associated with those fuels.
[[Docket number 2135.1, pp. 20-21]]
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that the reference to "home heating oil" in the proposed
definition of Additional Renewable Fuel should be clarified. The commenter recommends that
RINs associated with any renewable fuel blended into diesel, heating oil or other distillates be
allowed to be separated and used for compliance purposes without regard to ultimate end use of
that fuel. Distillate usage in stationary sources and ocean-going vessels is minor compared with
other uses. Allowing RINs associated with such usage to be used for compliance rather than
being retired will not change an obligated party's RVO, will not result in less renewable fuel
being used and will only contribute to meeting the renewable fuel volume mandates in EISA.
(2124.1, p.29)
Document No.: EPA-HQ-OAR-2005-0161-2023
Organization: New York Biomass Energy Alliance
Comment:
The commenter (2023) argues that the draft regulation considers biodiesel to be the only
available substitute for home heating oil. In the Northeastern United States, where most of the
country's home heating oil is consumed, liquid renewable fuel alternatives to number 2 heating
oil are quite limited. On the other hand, wood pellets, which meet the definition of an advanced
biofuel for cellulosic fuels (i.e., 40-44% GHG reduction), presents a viable alternative to home
heating oil throughout the region. The commenter (2023) strongly urges EPA to work with the
rapidly expanding wood pellet industry to include a workable system by which pellet fuel
manufacturers (whether using wood or cropped biomass as a feedstock) can generate RINs under
RFSII. (2023.1.pdf,p.5)
Document No.: EPA-HQ-OAR-2005-0161-2466
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Comment:
The commenter (2466) supports allowing RINs for use of renewable fuels in heating oil and jet
fuel. (2466.1.pdf, p-9)
Note - These are additional comments are from the State of New Jersey to the commenter.
Our Response:
The majority of commenters believed that renewable fuel blended into heating oil and jet
fuel should be allowed to be used for compliance purposes without regard to the ultimate end use
of the fuel. We believe that this is an appropriate approach. Thus, under our final regulations,
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there is no difference between renewable fuels blended into fuels used for transportation
purposes, versus fuels used for heating oil and jet fuel purposes.
EISA uses the term "home heating oil" in the definition of "additional renewable fuel."
The statute does not clarify whether the term should be interpreted to refer only to heating oil
actually used in homes, or to all fuel of a type that can be used in homes. We note that the term
"home heating oil" is typically used in industry in the latter manner, to refer to a type of fuel,
rather than a particular use of it, and the term is typically used interchangeably in industry with
heating oil, heating fuel, home heating fuel, and other terms depending on the region and market.
We believe this broad interpretation based on typical industry usage best serves the goals and
purposes of the statute. If EPA interpreted the term to apply only to heating oil actually used in
homes, we would necessarily require tracking of individual gallons from production through
ultimate use in use in homes in order to determine eligibility of the fuel for RINs. Given the
fungible nature of the oil delivery market, this would likely be sufficiently difficult and
potentially expensive so as to discourage the generation of RINs for renewable fuels used as
home heating oil. This problem would be similar to that which arose under RFS1 for certain
renewable fuels (in particular biodiesel) that were produced for the highway diesel market but
were also suitable for other markets such as heating oil and non-road applications where it was
unclear at the time of fuel production (when RINs are typically generated under the RFS
program) whether the fuel would ultimately be eligible to generate RINs. Congress eliminated
the complexity with respect to non-road applications in RFS 2 by eliminating the Epact restriction
that renewable fuel was a type of "motor vehicle fuel," and instead providing that renewable fuel
must be used to replace or reduce the quantity of fossil fuel present in "transportation fuel." That
term is broadly defined to include nonroad fuel. We believe it best to interpret the Act so as to
also avoid this type of complexity in the heating oil context. Thus, under today's regulations,
RINs may be generated for renewable fuel used as or blended into "heating oil," as defined in
existing EPA regulations at §80.2(ccc). In addition to simplifying implementation and
administration of the Act, this interpretation will best realize the intent of EISA to reduce or
replace the use of fossil fuels.
New York Biomass Energy Alliance stated that wood pellets should qualify as a
renewable fuel. We believe this would be an inappropriate interpretation and expansion beyond
the statutory language. EISA specifically defines additional renewable fuel as that which "is
used to replace or reduce the quantity of fossil fuel present in (emphasis added) home heating
oil or jet fuel." By this we believe a qualifying renewable fuel must be actually blended in
heating oil or jet fuel, or is a fungible fuel with them in the marketplace and capable of being
used in similar equipment. For example, in the case of home heating oil, it must be a fuel that
meets the marketplace requirements for the type of fuel referred to as heating oil. Thus, other
types of fuel, such as wood, wood pellets, and biogas that are today used to heat homes and
provide energy to businesses but which are not capable of blending into heating oil or replacing
it in similar equipment would not get credit under the RFS2 program for those heating
applications.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2115
Organization: Corn Plus
Comment:
We would propose that EPA define home heating oil to include qualifying Renewable Fuels
utilized to displace #2 Fuel Oil at Renewable Fuel production facilities in boiler applications. In
addition, because we utilize a production process that reduces GHG emissions in additional
respects, we request that EPA also consider these components and establish a fuel pathway for
DBS Fuel in Table 1 to §80.1426 that recognizes the benefits of our process. The proposed fuel
type we propose is "Dewatered Distiller Solubles." We believe that under the definitions above,
DOS Fuel generated at the Corn Plus facility that is blended into #2 Fuel Oil and is combusted in
our facility's fluidized bed boiler to produce steam for the production facility qualifies as a
Renewable Fuel and therefore generates RIN credits. Our reasoning for this is as follows.
Our Response:
As described above, we have determined that any fuel product commercially known as
heating oil may be valid for the generation of RINs if the fuel is made from renewable biomass.
However, we have not conducted a lifecycle analysis of a pathway in which coproducts of a corn
ethanol process, such as dewatered distillers solubles, are used to displace heating oil for the
generation of process heat in the ethanol production facility. Therefore, the lookup table in
§80.1426 (f) does not include a pathway in which a D code is designated for such a renewable
fuel. The petition process described in §80.1416 may be used for this purpose. However, based
on the commenter's description of dewatered distillers solubles, we do not believe that this
product could be sold commercially as heating oil, and thus may not be valid for the generation
of RINs.
3.2.7 Biogas Used as Process Heat
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2081
Organization: Novogy, Inc.
Comment:
The commenter (2081) recommends that in the case where finished cellulosic biogas is injected
into a pipeline network or sold directly to an industrial user on a pipeline network that serves
intended users under RFS2, that the volume sold then be allowed to qualify for RINs. This
recommendation is made on the basis that direct displacement of fossil derived natural gas with
cellulosic biogas can be verified within a network serving intended transportation (and
potentially home heating) users. The intended use is not in question when displacement can be
verified against an offsetting PTD compliant sales contract. This is a unique opportunity
available only to the most fungible forms of renewable fuels, such as cellulosic biogas where the
methane molecule produced legitimately carries unique renewable characteristics. In summary,
the commenter recommends suppliers of cellulosic gas be allowed to demonstrate the fuel has
been irrevocably committed to its final use once it has been sold. [[Docket number 2081.1, p.
11]] [[Also see docket number 2081.1, p. 12 for suggested modification to 80.1429(b)(4).]]
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The commenter also recommends that in the case where finished cellulosic biogas can be
verified as being used as a direct displacement of fossil derived natural gas within a network
serving intended transportation (and potentially home heating) users, that the volume sold then
be allowed to qualify for RINs. [[Docket number 2081.1, p. 11]] [[Also see docket number
2081.1, p. 12 for suggested modification to 80.1429(b)(4).]]
Our Response:
The commenter suggests that biogas injected into a pipeline network or sold directly to an
industrial user (such as a renewable fuel facility) on a commercial pipeline network should
generate RINs provided that the fuel has been "irrevocably committed to its final use once it has
been sold". We believe that portions of the suggested approach have merit. We agree that it
does not make any difference in terms of the beneficial environmental attributes associated with
the use of landfill gas whether the displacement of fossil fuel occurs in a fungible natural gas
pipeline, or in a specific facility that draws gas volume from that pipeline. In fact, a similar
approach is widely used with respect to electricity generated by renewable biomass that is placed
into a commercial electricity grid. A party buying the renewable power is credited with doing so
in state renewable portfolio programs even though the power from these sources is placed in the
fungible grid and the electrons produced by a renewable source may never actually be used by
the party purchasing it. In essence these programs assume that the renewable power purchased
and introduced into the grid is in fact used by the purchaser, even though all parties acknowledge
that use of the actual renewable-derived electrons can never be verified once placed in the
fungible grid. We believe that adopting a similar approach in RFS2, with appropriate limitations
related to the statutory scheme, will ultimately further the GHG reduction and energy security
goals of EISA.
The final rule allows producers of biogas that meets the definition of renewable fuel and
is introduced into a fungible pipeline as a result of a contract with a user of gas for transportation
purposes to generate RINs for that fuel under specified conditions. There must be a contractual
pathway that provides evidence that specific quantities of the renewable was purchased and
contracted to be delivered to a specific transportation fueling facility.l In the final rule, we
specify that the pipeline must ultimately serve the subject facility. We are also providing for
those situations in which biogas is provided directly to the transportation facility, rather than
using a commercial distribution system such as pipelines. For both cases—dedicated use and
commercial distribution—producers must provide contractual evidence of the production and
sale of such fuel, and there are also reporting and recordkeeping requirements to be followed as
well. The final rule establishes similar procedures for renewable electricity ultimately used for
transportation purposes that is introduced into a fungible grid. The final rule also allows
renewable fuel facilities causing landfill gas to be introduced into a fungible gas pipeline to be
allowed to claim those volumes in establishing the fuel pathway and appropriate D code for
generation of RINs.
The final rule includes biogas as a potential renewable fuel type that qualifies as
advanced biofuel with a D code of 5 when derived from landfills, sewage and waste treatment
Note that biogas used for transportation fuel includes propane made from renewable biomass.
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plants, and manure digesters. Produces who believe that their biogas should qualify as cellulosic
biofuel can petition us to have it classified as such.
We do not agree with the commenter that RINs can be generated if the gas is ultimately
used for home heating, as discussed above in section 3.2.6.
3.3 Renewable Biomass
3.3.1 Alternative Legislative Definitions of "Renewable Biomass"
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2140
Organization: John Deere Agriculture & Turf Division
Comment:
The commenter (2140.1) believes that EISA's definition of "renewable biomass" is unduly
constraining and could result in delays in development of alternative feedstock utilization for
production of advanced biofuels. The commenter advocates a uniform and inclusive definition
of renewable biomass that will enable achieving the RFS2 targets for advanced biofuels with a
broad array of biomass feedstocks. (2140.1, pp.4-5)
Document No.: EPA-HQ-OAR-2005-0161-2139
Organization: EnerTech Environmental, Inc.
Comment:
The commenter (2139) requests that the RFS2 classify biosolids or sewerage sludge as an
alternative fuel and that Section 211 (o) of the CAA be amended to include biosolids as a
renewable biomass. [[Docket number 2139.1, p. 2]] [[See docket number 2139.1, pp 1-2 for
further discussion of this request.]]
Document No.: EPA-HQ-OAR-2005-0161-2374
Organization: Amyris Biotechnologies, Inc. (Amyris)
Comment:
The commenter (2374) believes that in the interest of maximizing the opportunity for production
of renewable fuels, EPA should exercise its discretion in allowing biomass that is sustainably
produced for conversion into fuels. The U.S. Department of Agriculture 2008 farm bill contains
a definition of renewable biomass that may serve as a broader example. [[Docket number 2374.1,
p. 3]]
Our Response:
We have made every effort to interpret EISA's definition of "renewable biomass" as
broadly as possible without undermining the environmental protections the definition is meant to
confer. The commenters correctly note that revised legislative definitions for "renewable
biomass" have been considered - and, in the case of the Food, Conservation, and Energy Act of
2008 (2008 Farm Bill), enacted - by Congress. However, these definitions do not change the
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EISA definition, and EPA is required to promulgate regulations based on the EISA definition.
Therefore we are finalizing our regulations to implement the EISA definition of "renewable
biomass."
3.3.2 Definitions of Terms
3.3.2.1 Planted Crops
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters support EPA's proposed definition of "planted crops," which makes eligible
long-standing mixed natives, eliminating a perverse incentive for land-owners to rip up mixed
grasslands to grow specific crops, such as on restored grasslands and expired CRP property. The
commenters also support including as eligible renewable biomass plant materials removed for
the purposes of invasive species control or fire management as long as they are harvested under
terms of a conservation plan designed to protect natural resources and the environment. (2129.1,
p.5)
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter supports EPA's proposal to define "renewable biomass" to include all annual or
perennial crops and supports the proposal that this definition would include all crops
intentionally applied to the ground by humans or through "intentional natural seeding by mature
plants left undisturbed for that purpose."
Document No.: EPA-HQ-OAR-2005-0161-2144
Organization: New York State Department of Agriculture and Markets
Comment:
The commenter disagrees with the EPA proposal to exclude planted trees from the definition of
planted crops and crop residue, also contained in the above referenced section. While this
distinction may be appropriate for the establishment of some types of tree plantations, the
commenter feels that Short-Rotation Woody Crops (SRWC) such as willow should be included
under Planted Crops and Crop Residues. (2144.1, p.3) (See Docket Number 2144.1, p.3 for more
discussion on this issue)
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment:
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With regard to the dedicated perennial energy grasses for use in the production of renewable
biofuels, the commenter (2408.1) believes that EPA should recognize the wide variety of these
types of feedstocks. To the extent possible, EPA should be as flexible and broad in its definition
of these new types of feedstocks. Where appropriate, EPA should consider the inclusion of the
term "other energy grasses" to qualify as a feedstock for use in the production of RFS2 fuels.
[[See Docket Number 2408.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2508
Organization: Environmental Working Group (EWG)
Comment:
The commenter thinks EPA should exclude row or close-grown annually planted feed stock
planted on land that was pastureland at the date of enactment from the definition of renewable
biomass.
Our Response:
EPA believes that its final definition of "planted crops" is sufficiently broad to
encompass energy grasses. The final definition of "planted crops" includes all annual or
perennial agricultural crops from existing agricultural land that may be used as feedstock for
renewable fuel, such as grains, oilseeds, and sugarcane, as well as energy crops, such as
switchgrass, prairie grass, duckweed and other species (but not including algae species or planted
trees), providing that they were intentionally applied by humans to the ground, a growth
medium, or a pond or tank, either by direct application as seed or plant, or through intentional
natural seeding or vegetative propagation by mature plants introduced or left undisturbed for
that purpose. Because EISA contains specific provisions for planted trees and tree residue from
tree plantations, separate from those provisions concerning planted crops, our final definition of
planted crops in EISA excludes planted trees, even if they may be considered planted crops
under some circumstances as noted by one of the commenters.
We do not agree that row or close-grown annual crops planted on land that was actively
managed as pastureland at the date of enactment should be excluded from the definition of
renewable biomass. EISA provides that planted crops and crop residues must come from certain
"agricultural land." EPA believes that pastureland is appropriately and traditionally considered
within the scope of "agricultural land." Had Congress intended that planted crops only be
considered renewable biomass if harvested from land that was managed as cropland as of the
date of EISA enactment, as the commenter appears to suggest, then Congress would likely have
used that term rather than the broader reference to "agricultural land" in the definition of
renewable biomass.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2137
Organization: Brazilian Sugarcane Industry Association (UNICA)
Comment:
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RFS2 Summary and Analysis of Comments
The commenter (2137) states that there is no question that Brazilian sugarcane meets the EISA's
statutory definition of a renewable biomass feedstock, as it is a "planted crop "that has been
"harvested from agricultural land" that was under cultivation prior to December 2007 and
remains "actively managed." [[Docket number 2137.1, p. 4]] [[See docket number 2137, pp. 4-6
for further information.]]
Our Response:
Even if it is clear that a planted crop used by a foreign producer meets the definition of
renewable biomass, the foreign producer is still subject to requirements verifying that. As
described in the preamble, we are finalizing an "aggregate approach" for renewable biomass
verification for domestic producers using planted crops as feedstock, but are unable to adopt
comparable measures for foreign producers at this time. Therefore foreign producers of planted
crops and crop residue must provide the verification required of domestic producers for every
other type of renewable biomass. EPA will consider expanding the aggregate approach to other
countries if sufficient information and documentation becomes available.
Foreign producers of renewable fuel that is imported into the U.S., if they are generating
RINs for that volume of fuel, must designate renewable fuel intended for export to the U.S. as
such, segregate the volume until it reaches the U.S., post a bond to ensure that penalties can be
assessed in the event of a violation, and comply with other requirements designed to facilitate
enforcement, as discussed in Section II.D.2.b of the preamble. Similarly to domestic producers
of renewable fuel other than planted crops and crop residue subject to the aggregate compliance
approach, foreign producers must obtain and maintain written documentation from their
feedstock providers that can serve as evidence that their feedstocks meet the definition of
renewable biomass. For each feedstock purchase, producers must maintain documents that
identify the type and amount of feedstocks and where the feedstock was produced, as well as
documents that are sufficient to verify that the feedstock qualifies as renewable biomass.
Specifically, renewable fuel producers must maintain maps and/or electronic data identifying the
boundaries of the land where the feedstock was produced, product transfer documents (PTDs) or
bills of lading tracing the feedstock from that land to the renewable fuel production facility, and
other written records that serve as evidence that the feedstock qualifies as renewable biomass.
Furthermore, foreign producers must report to EPA quarterly a summary of the types and
volumes of feedstocks used throughout the quarter, as well as electronic data or maps identifying
the land from which those feedstocks were harvested. Foreign producers may also develop a
quality assurance program for their renewable fuel production supply chain, as described in
Section II.4.c of the preamble.
If the importer is generating the RINs for the foreign-produced fuel (if the foreign
producer has not already done so), then importers must obtain from the foreign producer and
maintain in their records written documentation, as described above, that serves as evidence that
the renewable fuel for which they are generating RINs was made from feedstocks meeting the
definition of renewable biomass.
3.3.2.2 Crop Residue
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter supports that "crop residue" should be defined to include biomass removed for
purposes of invasive species control or fire management. EPA's definition also should make
clear that crop residue is defined to include biomass from crops or crop residue that is a co-
product from industrial, commercial, or agricultural operations. "Renewable biomass" should be
defined to include any biomass removed from agricultural land that facilitates crop management,
whether or not the crop is part of the residue. [[Docket number 2383.1, pp. 14-15]]
Document No.: EPA-HQ-OAR-2005-0161-2150
Organization: American Farm Bureau Federation
Comment:
The commenter (2150.1) disagrees with EPA's definition of crop residue as the residue left over
from the harvesting of planted crops. They feel that it severely limits the types of feedstocks that
may be used under the RFS. Crop residue such as husks, seeds, bagasse, and roots can be used
as feedstock for cellulosic ethanol.
Our Response:
We agree that biomass removed from agricultural land for purposes of invasive species
control and/or fire management could be considered a form of biomass residue related to crop
production, whether or not derived from a crop itself, and therefore have modified the proposed
definition of "crop residue" to include it. We believe that such biomass is typically removed
from agricultural land for the purpose of preserving or enhancing its value in agricultural crop
production. It may be removed at the time crops are harvested, post harvest, periodically (e.g.,
for pastureland) or during extended fallow periods. We also agree with the comments
encouraging us to expand the definition of crop residue to include materials left over after the
processing of the crop into a useable resource, such as husks, seeds, bagasse and roots, and we
have altered the final definition to cover such materials. Thus our final definition of "crop
residue" is the biomass left over from the harvesting or processing of planted crops from existing
agricultural land and any biomass removed from existing agricultural land that facilitates crop
management (including biomass collected from such lands in relation to invasive species control
or fire management), whether or not the biomass includes any portion of a crop or crop plant.
3.3.2.3 Agricultural Land
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2515
Organization: Minnesota Department of Natural Resources (MnDNR)
Comment:
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The commenter supports EPA's proposal to include CRP lands as "agricultural" lands. The
commenter noted that management of these lands can be enhanced through periodic managed
mowing and removal of biomass in-lieu of or in addition to prescribed burning. Biomass
produced from these sites should be eligible under the RFS. Individual program rules will
protect the conservation values of the lands enrolled. (2515.1, p.2)
The commenter noted that farmers and grazers that have maintained native grazing lands should
be rewarded for good stewardship. Preservation of healthy grasslands will require expanding
markets for grass based agriculture - rather than reducing economic opportunities. The
commenter believes that the standards should include biomass harvested from rangelands that
does not impair the ecological integrity of these sites. Disqualifying all "range land" is not
appropriate and EPA should coordinate with USDA and its biomass programs to facilitate
incentives and rewards for sustainable management of the nation's grasslands in the context of
cellulosic biomass production. (2515.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters strongly support EPA's exclusion of rangeland from its definition of
agricultural land. (2129.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2508
Organization: Environmental Working Group (EWG)
Comment:
The commenter (2508) supports EPA's exclusion of rangeland from its definition of agricultural
land.
Document No.: EPA-HQ-OAR-2005-0161-2446
Organization: Minnesota Farm Bureau Federation
Comment:
The commenter states that rangeland should be specified as agricultural land under the RFS2.
The Agency's assertion that it is questionable whether any rangeland should qualify as actively
managed under EISA is misguided. Ranchers vigorously manage rangeland for multiple
agricultural purposes.
Document No.: EPA-HQ-OAR-2005-0161-2463
Organization: National Farmers Union
Comment:
The commenter believes rangeland should be included in the definition of existing agricultural
land. Rangeland fits within the definition of renewable biomass in the RFS2 statute. As long as
it can be established that the land was cleared and/or cultivated prior to 2007 and has been
managed as a natural ecosystem since that point, it meets the letter of the law and should be
eligible under the rule.
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Document No.: EPA-HQ-OAR-2005-0161-2502
Organization: Verenium Corporation
Comment:
The commenter (2502.1) believes that EPA should delete the proposed rule's proposed
restrictions on the use of "rangeland." The commenter believes that EPA should favor a
presumption that rangeland is considered an eligible category of land for the production of
biomass, unless specific types of such land are excluded for valid and specified reasons. (2502.1,
p.4) (See Docket Number 2502.1, p.4 for a detailed discussion of this issue)
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
Supports EPA's interpretation that crop land, pastureland and Conservation Reserve Program
land all meet this definition. Rangeland also should be included within the broad definition of
"agricultural land." Rangeland is subject to active management in terms of controlled access
through fencing and oversight and control of invasive species and grazing rates. [[Docket
number 2383.1, p. 15]]
Document No.: EPA-HQ-OAR-2005-0161-2374
Organization: Amyris Biotechnologies, Inc. (Amyris)
Comment:
The commenter also believes that EPA should include rangeland as agricultural land. The
proposal to rule rangelands ineligible is inconsistent with the congressional intent and would
likely intensify competition for lands better suited for food crop production. While there is no
commonly accepted definition of rangeland, the USDA has published estimates for U.S.
"grassland and range" to be as much as 600 million acres, which equates to approximately 66
billion gallons of corn derived ethanol. Hence this rangeland prohibition could have astonishing
affects. [[Docket number 2374.1, p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2150
Organization: American Farm Bureau Federation
Comment:
The commenter (2150.1) does not believe sales and purchasing receipts are readily available to
prove the management of rangeland. (Page 2)
The commenter (2150.1) asserts that rangeland should be specified as agricultural land under the
RFS2. They note that ranchers vigorously manage rangeland for multiple agricultural purposes.
Additionally, USDA's definition of agricultural land includes rangeland.
Document No.: EPA-HQ-OAR-2005-0161-2302
Organization: UC Berkeley - Energy Biosciences Institute
Comment:
The commenter supports EPA's inclusion of CRP land as agricultural. They also encourage
EPA to include rangeland as agricultural land, and to include abandoned agricultural land in the
allowance for renewable biomass production. [[#2302 p. 1-2]]
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Document No.: EPA-HQ-OAR-2005-0161-2144
Organization: New York State Department of Agriculture and Markets
Comment:
While the commenter (2144.1) recognizes the need to include certain provisions to safeguard this
specific land type, EPA by developing proposed rules around rangelands has effectively ruled
out, by making ineligible, significant areas of land that could be used for the establishment and
sustainable production of advanced biofuel feedstock in New York State, the Northeast and
much of the lands east of the Mississippi River. (2144.1, p.l) (See Docket Number 2144.1, pp.l-
2 for more discussion on this issue)
Document No.: EPA-HQ-OAR-2005-0161-2023
Organization: New York Biomass Energy Alliance
Comment:
The commenter (2023) discusses the definition of renewable biomass, with particular reference
to biomass produced on agricultural land. The commenter strongly disagrees with the
interpretation that abandoned farmland should be excluded from producing renewable biomass.
(2023.1.pdf, pl-5)
For additional data on agricultural land, see addendum on page 7-8 COMPARISON OF LAND
AREA DATA FROM THE CENSUS OF AGRICULTURE AND THE NATIONAL
RESOURCES INVENTORY (2023.1.pdf, p7-8)
Document No.: EPA-HQ-OAR-2005-0161-2156
Organization: Georgia Forestry Commission
Comment:
The commenter (2156) comments that CRP lands include millions of acres of planted native tree
species in the South and much of these forests are over 20 years old and will eventually be
forests of saw timber size. The commenter raises question of whether this land should be
considered agricultural, as implied by the EPA proposed rules (2156.1.docx, p.3).
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter supports EPA's efforts to make the land restriction provisions on renewable fuel
producers as consistent as possible with current industry practice and USDA interpretation. The
commenter does not object to Conservation Reserve Program (CRP) land being included as
"agricultural" land, but does not think rangeland should be considered agricultural land since,
generally, it has never been under till. [[Docket number 2393.1, p. 42]]
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) supports EPA's efforts to make the land restriction provision on
renewable fuel producers as consistent as possible with current industry practice and USDA
interpretation. The commenter does not object to Conservation Reserve Program (CRP) land
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being included as "agricultural" land, but does not think rangeland should be considered
agricultural land since, generally, it has never been under till. [[Docket number 2130.1, p. 6-7
Document No.: EPA-HQ-OAR-2005-0161-2369
Organization: New Generation Biofuels (NGBF)
Comment:
The commenter (2369) states that the definition of "fallow land" may be in line with terminology
used within the United States Department of Agriculture (USDA), however marginal lands, lands
that are not suitable for agriculture, represent potential areas for growing energy crops. The
commenter encourages EPA to include marginal and rangelands as lands where renewable
biomass may be grown and the subsequent carbon offsets or sequestration should be included in
the GHG models. [[Docket number 2369.1, p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter believes EPA improperly excluded rangeland.
Document No.: EPA-HQ-OAR-2005-0161-2425
Organization: Petro Algae
Comment:
The commenter (2425) believes it is critical EPA allow existing rangeland to quality as
agricultural land under RFS2 which will make millions of acres of non-cropland, non-forested
land qualify for renewable feedstock production. The commenter believes this is essential to
support the rigorous renewable fuel production goals. As EPA references in the proposal, the
inclusion of a land restrictions omitting existing rangeland may drive renewable fuel producers
to use rangeland and simply forgo the benefits of qualifying for RINs. This would result in an
undersupply of RINs which would drive RINs prices upward do to the supply/demand curve.
[[Docket number 2425.1, p. 7]]
Document No.: EPA-HQ-OAR-2005-0161-2120
Organization: Society for Range Management
Comment:
The commenter [[2120]] states that under the EISA language, biomass feedstocks may only be
considered "renewable" if they were grown on agricultural land. EPA interprets agricultural land
to include cropland and pastureland, but not rangeland. The Society for Range Management
feels that this is a mistake.
The commenter states rangelands hold great potential for biofuels production. A number of
important studies are exploring the feasibility and impact of production of cellulosic ethanol
from switchgrass and other native grasses on the rangelands of the Great Plains. While
environmental interests rightly point out that many of these prairie lands have large subsoil GHG
deposits that would be released through conversion to cropland, switchgrass also sequesters
significant amounts of carbon in the soil. A study by Frank et al. shows that in soil planted with
switchgrass (which has a perennial root system) carbon increased at a rate of 1.01 kg C m-2
y(1.2 Another study by Lee et al. reported that switchgrass grown in the South Dakota
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Conservation Reserve Program stored carbon at a rate of 2.4 to 4.0 Mg ha-1 y(l at the 0 to 90 cm
depth-relatively deep soil. [[#2120.1 p.2]]
The commenter [[2120]] states that EPA has expressed concern about the difficulty of
determining the boundaries of rangeland. The Chicago Climate Exchange, for example, uses the
USDA Land Resource Regions selecting counties that qualify on the basis of precipitation levels
and other factors. Satellite imaging technology, similar to those used by EPA in its attempts to
project the indirect GHG effects of land use change, can also determine vegetation types with a
high degree of accuracy, including those typical of rangeland. Much of the uncertainty revolves
around the question of active management. To put it simply, where there is no evidence that
forest cover grew on rangeland in the past, it is by definition "clear" and hence should qualify as
"cleared." It should be a relatively simple exercise to verify, through third parties, that the land
was clear of trees on December 19, 2007, based on plant growth and other evidence. [[#2120.1
p.4]]
Document No.: EPA-HQ-OAR-2005-0161-2244
Organization: Altrius Group. LLC
Comment:
Regarding the inclusion of rangeland as qualifying agricultural land, the commenter notes that
EPA interprets agricultural land to include cropland and pastureland, but not rangeland. The
commenter feels that this is a mistake. [[Docket number 2244.1, p. 2]] [[See docket number
2244, pp. 2-4 for detailed discussion of this issue.]]
Our Response:
As proposed, and as generally supported by the comments, EPA is including lands
enrolled in the CRP program in the definition of "agricultural land." However, as discussed in
detail in Section II.4.a.i.of the preamble, EPA is not including rangeland in the final definition of
existing agricultural land for a number of reasons. Under EISA, renewable biomass includes
crops and crop residue from agricultural land cleared or cultivated at any time prior to the
enactment of EISA that is either "actively managed of fallow" and nonforested. EPA believes
that in interpreting the phrase "actively managed" in this definition, it is appropriate to consider
the degree and type of management that is typically applied to planted crops and crop residue.
Although EPA appreciates the comments suggesting that some degree of management does take
place on rangeland, EPA believes that the level of "active management" that is typically
associated with land dedicated to growing planted crops is far more intensive than the types of
management associated with rangeland. Furthermore, since rangeland encompasses a wide
variety of ecosystems, including native grasslands or shrublands, savannas, wetlands, deserts and
tundra, including it in the definition of agricultural land would increase the risk that these
sensitive ecosystems would become available under EISA for conversion into intensively
managed mono-culture cropland. Finally, the conversion of relatively undisturbed rangeland to
the production of annual crops could in some cases lead to large releases of GHGs stored in the
soil which would be contrary to a principal EISA goal. Plowing up well-established grasslands,
for example, would be expected to release a large pulse of stored C02. It is likely correct as
suggested by one commenter, that soil C02 levels would then rise again if the area were planted
with a perennial crop such as switchgrass and not re-cultivated. However, by including
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rangeland as a type of "agricultural land" from which planted crops and crop residue may be
harvested, EPA would be allowing any type of planted crop (including annuals) to be grown on
the land, with the possibility of annual COz releases from the soil.
For reasons similar to those articulated above with respect to rangeland, EPA has decided
not to include "marginal lands" or "abandoned agricultural lands" that do not meet the definition
of "fallow" within the definition of "agricultural land" for purposes of the renewable biomass
definition.
One commenter asked whether CRP land that has been forested for twenty years should
be included in the definition of "agricultural land" from which planted crops and plant residue
may be obtained and qualify as renewable biomass. EPA has included CRP land in the
definition of "agricultural land." However, for planted crops and crop residue from CRP land (or
any other agricultural land) to be considered renewable biomass, the land must also have been
nonforested as of the date of enactment of EISA. Therefore, the specific land referenced by the
commenter would not appear to be eligible for the growth of planted crops or crop residue that
would be considered renewable biomass under the final RFS2 rule.
3.3.2.4 Cleared or Cultivated and Actively Managed Agricultural Land
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2150
Organization: American Farm Bureau Federation
Comment:
The commenter (2150.1) believes EPA has erroneously expanded on the EISA's existing
cropland requirement by interpreting the phrase "that is actively managed or fallow, and
nonforested" as meaning that land must have been actively managed or fallow, and nonforested,
on December 19, 2007, and continuously thereafter in order to qualify for renewable biomass
production. While the EISA defines existing cropland requirement from an historical
perspective, EPA's definition is future oriented and will impede American agriculture's
participation and our biofuels industry. The commenter states that the definition of renewable
biomass contained in the Energy Independence and Security Act of 2007 (EISA) states that land
used to grow biomass must be agricultural land cleared or cultivated at any time prior to
December 19, 2007 that is either actively managed or fallow and nonforested. (Page 1)
Document No.: EPA-HQ-OAR-2005-0161-2446
Organization: Minnesota Farm Bureau Federation
Comment:
The commenter states that contrary to congressional intent, EPA has expanded on the EISA's
existing cropland requirement; while EISA defines existing cropland requirement from an
historical perspective, EPA's definition is future oriented and will impede American agricultures
participation and our biofuels industry.
Document No.: EPA-HQ-OAR-2005-0161-2463
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Organization: National Farmers Union
Comment:
The commenter states that the term "continuously" is not found in the statute. Imposing this
standard requires that land not only have been in production on December 19, 2007, but that it
has continued to be so. The plain language of the statute does not drive to this interpretation;
instead setting a static baseline of what lands would be eligible as of December 19, 2007. The
final rule should eliminate the concept of continuously managed as farmers were not given fair
notice that this would be the potential requirement.
Document No.: EPA-HQ-OAR-2005-0161-2317
Organization: National Corn Growers Association (NCGA)
Comment:
The commenter (2317) urges EPA to revise the proposed definition of "Renewable Biomass" to
eliminate the "continuously" managed requirement. [[Docket number 2317.1, pp. 34-35]]
Document No.: EPA-HQ-OAR-2005-0161-2244
Organization: Altrius Group. LLC
Comment:
Regarding EPA's proposed requirement of documentation verifying that land was continuously
managed since December 19, 2007, the commenter (2244) points out that the term
"continuously" is not found in the statute and believes that imposing this standard requires that
land not only have been in production on December 19, 2007, but that it has continued to be so.
The plain language of the statute does not drive to this interpretation; instead setting a static
baseline of what lands would be eligible as of December 19, 2007. The commenter believes
final rule should eliminate the concept of continuously managed as farmers were not given fair
notice that this would be the potential requirement. [[Docket number 2244.1, p. 5]]
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters recommend that agricultural land should be defined as "cleared or cultivated at
any time" prior to December 19, 2007, if it was actively managed as agricultural land or fallow
(and non-forested) during the 5 years prior to December 19, 2007 and has, since December 19,
2007, been actively managed as agricultural land or fallow (and non-forested).
Document No.: EPA-HQ-OAR-2005-0161-2508
Organization: Environmental Working Group (EWG)
Comment:
The commenter believes that agricultural land should be defined as "cleared or cultivated at any
time" prior to December 19, 2007, was continuously actively managed as agricultural land or
fallow (and nonforested) during the 5 years prior to December 19, 2007 and has, since December
19, 2007, been continuously actively managed as agricultural land or fallow (and nonforested).
(2508, p.2)
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Document No.: EPA-HQ-OAR-2005-0161-2119
Organization: National Sorghum Producers
Comment:
The commenter feels that an ethanol facility producing advanced (sweet sorghum) or cellulosic
(energy sorghum) biofuel produced from feedstock grown on land that was brought into
production after December 19, 2007 should not be penalized on all produced gallons. (2119.1,
p.4)
Our Response:
EPA has modified the definition of existing agricultural land so that the "active
management" requirement is satisfied for those lands that were cleared or cultivated and actively
managed or fallow, and non-forested on December 19, 2007. EPA believes that the goal of the
EISA and RFS program, to increase the presence of renewable fuels in transportation fuel, will
be better served by interpreting the "actively managed or fallow" requirement in the renewable
biomass definition as applying to land actively managed or fallow on December 19, 2007, rather
than interpreting this requirement as applying beginning on December 19, 2007 and continuously
thereafter. This approach will also greatly ease compliance burdens, since parties will need only
demonstrate active management as of one date (the date of EISA enactment) to satisfy the active
management component of the requirements related to planted crops and crop residue, rather
than having to demonstrate active management as of that date and continuously thereafter. This
approach will also parties to suspend active management of qualifying lands for a period of time
without fear of losing qualifying status under RFS2, which could have many benefits in terms of
resource protection and wildlife management.
EISA, however, limits the eligibility of crops to those coming from agricultural land
(cropland, pastureland, and CRP land) that was cleared or cultivated prior to December 19, 2007.
Any crops coming from lands cleared after that date are not considered renewable biomass under
EISA, and, therefore, under the RFS2 program, a producer may not generate RINs for any fuel
made from those crops.
3.3.2.5 Fallow
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2144
Organization: New York State Department of Agriculture and Markets
Comment:
The commenter is concerned with the manner in which the term "fallow" is proposed to be
defined under Section 111(4) (a) (I) of the NPRM. Since the RFS2 only has purview over lands
used for the production of biofuel feedstock crops, the decision to use a very narrow definition
for fallow land could have significant unintended consequences. (2144.1, p.2) (See Docket
Number 2144.1, p.2 for more discussion on this issue)
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Document No.: EPA-HQ-OAR-2005-0161-2150
Organization: American Farm Bureau Federation
Comment:
The commenter (2150.1) does not believe it is plausible to require proof that land has been or is
currently intentionally fallow. Further, the EPA should not specify a time period after which
land that is not actively managed for agricultural purposes should be considered to have been
abandoned for agriculture. (Page 2)
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters believe that EPA should revise the definition of fallow land to include land that
has been planted to cover crops for the purpose of erosion control or soil improvement, in
accordance with USDA definitions of idle cropland. EPA should also set a time limit for land to
qualify as fallow. EPA should expand the definition of actively-managed existing agricultural
land to include land that has recently come out of a contract for the Conservation Reserve
Program (CRP), rather than placing CRP in the definition of fallow as they have done.
Document No.: EPA-HQ-OAR-2005-0161-2302
Organization: UC Berkeley - Energy Biosciences Institute
Comment:
The commenter encourages EPA not to set limits on fallow periods [[#2302 p. 1-2]]
Document No.: EPA-HQ-OAR-2005-0161-2244
Organization: Altrius Group. LLC
Comment:
EPA has suggested that, for fallow land, "the decision to let land lie fallow is made deliberately
and intentionally by a land owner or farmer such that there should be documentation of such
intent." The commenter (2244) respectfully disagrees on this point. Quite often, farmers do not
intend to leave fields fallow at all, but are forced to do so for economic, regulatory, climatic or
water-related reasons. In addition, the commenter urges the EPA not to require farmers to
produce documentation of the decision to leave fields fallow, as in many cases it does not exist
and would disqualify a great deal of agricultural land that can and should contribute to the goals
of the RFS2 program. Alternatively, if such proof were to be required, the commenter suggests
that it would be far more reasonable for EPA to accept various alternative forms of evidence,
including affidavits or other substantiating evidence. [[Docket number 2244.1, pp. 1-2]]
Regarding EPA's request for a time period for land management, the commenter believes that
EPA's presumption is unreasonable and contravenes congressional intent. If the purpose of the
statute is to use on land that was previously cultivated, an arbitrary time limit would unfairly
exclude many farmers and ranchers from the program. Many farmers may be forced to leave
land fallow against their will or may simply choose not to cultivate farmland for a period of time
for economic or other reasons. Such a period of time absent substantial other evidence, should
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not be sufficient basis to presume "abandonment" for purposes of the statute. It should not be the
role of the statute or EPA to penalize farmers further by setting an arbitrary time limit after
which their land is considered to be "abandoned." [[Docket number 2244.1, p. 2]]
Our Response:
We have decided not to include a time limit for land to qualify as "fallow" because we
understand that agricultural land may be left fallow for many different purposes and for varying
amounts of time. Any particular timeframe that EPA might choose for this purpose would be
somewhat arbitrary. Further, EISA does not indicate a period of time that qualifying land could
be fallow, so EPA does not believe that it would be appropriate to do so in its regulations.
Therefore, EPA is finalizing its proposed definition of "fallow." Also, EPA believes that
feedstock producers will be able to provide some written proof of their land being left fallow on
December 19, 2007, such as a farm management plan, evidence of participation in CRP, or other
such documentation.
While the decision to let land lie fallow may not always be the feedstock producer's first
choice, even when it is in response to economic, regulatory or other stimuli, EPA believes is still
a deliberate and intentional decision on behalf of the farmer not to plant crops on his land and to
leave that land fallow. EPA believes that the documentation required to show that land is
actively managed or fallow is sufficiently flexible to cover such situations, for example, one in
which a feedstock producer decides that the economic circumstances are such that he must leave
his land fallow for a period of time.
The definition of "fallow" specifies that for RFS2 purposes, fallow land must be
cropland, pastureland or CRP land. These are the three land types that are also included in the
definition of "existing agricultural land," and from which planted crops and crop residue may be
harvested providing that other definitional criteria are satisfied. [[Although EPA believes that
presence of land in the CRP program demonstrates "active management," such that there is no
additional reason to qualify CRP land as "fallow,"]] EPA has retained the reference to CRP land
in the definition of "fallow" to avoid the possible confusion that might arise if EPA were to list
other qualifying agricultural land types but not CRP land.
Clean Air Task Force comments that the definition of fallow land should include land
planted with cover crops. EPA believes that agricultural land planted with cover crops would be
considered actively managed rather than fallow, as the farmer is actively managing the land for a
specific purpose by planting cover crops for various reasons, including to reduce runoff or
replenish soil nutrients, among others.
3.3.2.6 Planted Trees
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2129
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Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters encourage EPA to modify the definition of "planted trees" to ensure that this
definition does not encourage the conversion of natural forests to plantations. The commenters
urge EPA to limit the definition of "planted trees" to those that were established by human
intervention.
Document No.: EPA-HQ-OAR-2005-0161-2173.1
Organization: National Association of Forest Owners (NAFO)
Comment:
The commenter supports EPA's inclusion of trees established by seeding by mature trees in the
definition of planted trees. Also, the commenter recommends that EPA include other methods of
tree regeneration, such as coppice or root suckers.
Document No.: EPA-HQ-OAR-2005-0161-2308
Organization: Environmental Defense Fund
Comment:
The commenter (2308.1) urges EPA to reconsider the breadth of the definition of "planted trees"
as the currently drafted definition, which allows naturally regenerated trees to be harvested as a
"plantation", could bypass the restrictions on harvests in ecologically sensitive forestland. (Page
2)
Document No.: EPA-HQ-OAR-2005-0161-2156
Organization: Georgia Forestry Commission
Comment:
The commenter recommends for the definition of "planted trees" that EPA provide exclusion in
the definition of planted trees for trees that are not indigenous to the region (planted trees must
be native) and provide that any non-native trees to be included as an agricultural crop.
Document No.: EPA-HQ-OAR-2005-0161-2349
Organization: Kentucky Division of Forestry
Comment:
The commenter (2349) support the interpretation of planted trees and recommends rewording the
definition to "trees from stands established by planting, artificial or natural seeding or coppice"
to include other methods of regeneration. (2349.pdf, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2494
Organization: Council of Western State Foresters
Comment:
The commenter suggests rewording the definition for the term Planted Trees to "trees from
stands established by planting, artificial or natural seeding, or coppice."
Document No.: EPA-HQ-OAR-2005-0161-2472
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Organization: Valero Energy Corporation (Valero)
Comment:
The commenter supports EPA's definition of "planted trees" and agrees with EPA that planted
trees should include not only trees established by human intervention, but also trees established
from natural seeding by mature trees left undisturbed for such a purpose.
Document No.: EPA-HQ-OAR-2005-0161-2310
Organization: Low Carbon Synthetic Fuels Association (LCSFA)
Comment:
The commenter supports EPA's proposal to include in the definition of planted trees naturally
regenerating trees left undisturbed from natural seeding by mature trees left undisturbed for such
purpose.
Document No.: EPA-HQ-OAR-2005-0161-2517
Organization: National Association of State Foresters
Comment:
NASF supports EPA's interpretation that "planted trees" include more than those planted by
humans using nursery stock or artificial seeding. Forest management includes a variety of
artificial and natural regeneration approaches. All of these techniques are necessary to
successfully and sustainably manage the wide-variety of forest types in the United States. In
addition to including trees established by natural seeding, NASF recommends the definition be
broadened to include other applied methods of direct and natural regeneration including
coppicing and sucker roots. We suggest rewording the definition to: "trees from stands
established by planting, artificial or natural seeding, or coppice."
Our Response:
EPA agrees that the inclusion of natural reseeding in the definition of "planted trees"
would make distinguishing between tree plantations and forests difficult or impossible, thus
negating the separate restrictions that Congress placed on the two types of land, as noted by
some of the commenters. On the other hand, EPA believes that trees that are naturally seeded
and grown together with hand- or machine-planted trees in a tree plantation should not
categorically be excluded from qualifying as renewable biomass. Such natural reseeding may
occur after planting the majority of trees in a tree plantation, and may be consistent with the
management plan for a tree plantation. EPA has decided, therefore, to modify its proposed
definition of "planted tree" to be trees harvested from a tree plantation. The term "tree
plantation" is defined as a stand of no less than 1 acre composed primarily of trees established by
hand- or machine-planting of a seed or sapling, or by coppice growth from the stump or root of a
tree that was hand- or machine-planted." The net effect is that as long as a tree plantation
consists "primarily" of trees that were hand- or machine planted (or derived therefrom, as
described below), then all trees from the tree plantation, including those established from natural
seeding by mature trees left undisturbed for such a purpose, will qualify as renewable biomass.
EPA does not understand planted trees to be limited to native species. Furthermore, EPA
disagrees that non-native tree species on tree plantations should be considered crops. Under
EISA, planted crops and crop residue are only considered renewable biomass if they are
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harvested from existing agricultural land. EPA's final definition of "tree plantation" is an area
predominantly composed of planted trees.
3.3.2.7 Tree Residue
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2156
Organization: Georgia Forestry Commission
Comment:
The commenter (2156) recommends that demolition wood waste, construction wood wastes and
wood product manufacturing wood wastes in addition to backyard waste should be included in
the definition of renewable biomass. (2156.1.docx, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2515
Organization: Minnesota Department of Natural Resources (MnDNR)
Comment:
The commenter disagrees with EPA's proposal to subsume the definition of tree residue into
"slash". The commenter believes that mill residues such as sawdust, bark, and black liquor
should be considered residue as they are residual after processing (2515.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2494
Organization: Council of Western State Foresters
Comment:
The commenter agrees with EPA that the term "slash" is more descriptive than "tree residue,"
and yet in practice means the same thing. Using the term "slash" rather than "tree residue" makes
sense and will be less confusing.
Document No.: EPA-HQ-OAR-2005-0161-2310
Organization: Low Carbon Synthetic Fuels Association (LCSFA)
Comment:
The commenter believes that EPA may have overlooked several issues in proposing to simplify
its regulations by including tree residues within its definition of slash and suggests that EPA
either include unmerchantable trees within the definition of slash, or explicitly include them
within the definition of planted trees. The commenter also states that merging the definition of
tree residue into the definition of slash leaves mill residue outside of the definition of biomass
and believes that this omission is a major oversight with significant unintended consequences.
The commenter states that Congress clearly intended for tree wastes to be included, as
demonstrated by its inclusion of separated yard waste, and that black liquor should also be
included within the definition of tree residue.
Document No.: EPA-HQ-OAR-2005-0161-2081
Organization: Novogy, Inc.
Comment:
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The commenter (2081) recommends that cellulosic biogas produced from waste sludge which is
a residual of the pulp & paper and recycled paper making process, be allowed to generate RINs
under RFS2. Like woodchips, saw dust and other derivatives qualifying as renewable biomass
under §80.1401, the commenter believes residual waste sludge from renewable biomass
materials should be allowed to generate RINs. Given the emphasis within EISA to focus on the
full utilization of waste cellulosic feedstocks for renewable fuels production, the commenter
would like to interpret the intent of the legislation to include waste paper sludge as a renewable
biomass feedstock. An alternative to allowing all paper sludge would be to allow only those that
can be shown to have been derived from eligible renewable biomass contained as defined in the
current regulation. [[Docket number 2081.1, p. 14]] [[See docket number 2081.1, p. 14-16 for
basis for this recommendation and suggested modification to 80.1401.]]
Our Response:
EPA has considered these comments and has expanded the definition of tree residue to
include some wood product manufacturing wastes, including residues from processing planted
trees at lumber and paper mills, but is limiting it to the biogenically derived portion of the
residues that can be traced back to feedstocks meeting the definition of renewable biomass (i.e.,
planted trees and tree residue from actively managed tree plantations on non-federal land cleared
at any time prior to December 19, 2007). RINs may only be generated for the fraction of fuel
produced that represents the biogenic portion of the tree residue, using the procedures described
in ASTM test method D-6866. Thus, if the tree residues are mixed with chemicals or other
materials during processing at the lumber or paper mills, producers may only generate RINs for
the portion of the mixture that is actually derived from planted trees.
For a discussion of demolition wood waste and construction wood wastes, see discussion
of MSW and separated yard and food wastes in section 3.2 of this document.
3.3.2.8 Tree Plantations
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2310
Organization: Low Carbon Synthetic Fuels Association (LCSFA)
Comment:
The commenter notes that EPA proposed to define a tree plantation as a stand of no fewer than
100 planted trees of similar age and comprising one or two tree species, or an area managed for
growth of such trees covering a minimum of 1 acre, and states that both the number of trees and
minimum acreage are difficult to quantify without incurring a large expense.
Document No.: EPA-HQ-OAR-2005-0161-2173.1
Organization: National Association of Forest Owners (NAFO)
Comment:
The commenter states that EPA should expand the definition of "tree plantation," by adopting
the Dictionary of Forestry definition, which is "a stand of trees composed primarily of trees
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established by planted or artificial seeding." The definition should allow for a mixture of tree
species, should allow for purposeful, "natural" regeneration, and should not require a minimum
number of trees per acre.
Document No.: EPA-HQ-OAR-2005-0161-2417
Organization: Forest Landowners Association
Comment:
The commenter notes that tree plantations are typically stands of trees established by planting.
However plantations may also include tree stands resulting from natural regeneration.
Plantations can also be pure or mixed species with uniform or diverse structures and age classes
and can be grown on rotations of varying length including an indefinite length for some values.
Document No.: EPA-HQ-OAR-2005-0161-2515
Organization: Minnesota Department of Natural Resources (MnDNR)
Comment:
The commenter believes that the proposed EPA definition of tree plantation is overly restrictive
and will undermine the formation of a cellulosic ethanol industry based on woody biomass.
Excluding sustainably produced wood and discouraging ecological management of forest
resources is not consistent with Congress' intent. The commenter suggests that EPA not narrow
the definition established within the Dictionary of Forestry. (2515.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2156
Organization: Georgia Forestry Commission
Comment:
The commenter (2156) comments that a stand of less than 100 trees per acre is common in
managed hardwood stands and raises question that will this disqualify the forest stand for
biomass harvest for next rotation? (2156.1.docx, p.2). The commenter also recommends that
EPA either define tree plantations as areas where planted trees exist or simply not define tree
plantations. (2156.1.docx, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2517
Organization: National Association of State Foresters
Comment:
The commenter states that tree plantations are established by planting or artificial seeding and-
depending on the management objectives—often include mixed species and understory
components. EPA's definition of "Tree Plantation" should not arbitrarily be limited to one or
two tree species, rather should allow for a mixture of tree species. NASF recommends EPA
broaden their definition to include stands with trees or understory components that have resulted
from natural regeneration. We suggest changing the definition to "A stand of no less than one
acre in an area with trees of similar age."
The commenter strongly encourages EPA to recognize trees planted on surface-mined lands after
Dec. 19, 2007 as eligible for RINs under EISA. Replanting surface-mined lands will enhance
their management and reduce biomass harvest pressures from other natural systems.
Document No.: EPA-HQ-OAR-2005-0161-2494
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Organization: Council of Western State Foresters
Comment:
The commenter comments that the term Tree Plantation should not be restricted to 1 or 2 species.
The expected climate change impacts on forests require that we plant trees with a consideration
for climate change, which may suggest planting multiple species rather than monocultures. The
commenter suggests changing the definition to "A stand of no less than one acre in area with
trees of a similar age."
Our Response:
In the final rule, EPA is not requiring a minimum number of trees per acre as part of the
definition of tree plantation, or specifying that a tree plantation be restricted to a set number of
species. We agree with those commenters who stated that such these proposed limitations were
too restrictive. However, EPA is maintaining the minimum 1 acre designation because EPA
believes that the statutory references to "plantation" indicate a commercial enterprise of
significant size, and that one acre is a reasonable measure of such an enterprise.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2361
Organization: Indonesian Palm Oil Commission
Comment:
The commenter (2361) is not sure if the definition of non-forested land includes oil palm
plantations. The commenter believes that the IPCC had an agreed-upon definition of forested
land and therefore oil palm should be considered as tree plantation and not forest, so that biofuel
feedstock may be legitimately obtained from it after December 19, 2007. (2361.1.pdf, p.2)
Our Response:
With respect to the categorization of oil palm plantations, we believe such plantations are
more similar to orchards than to tree plantations referred to within the definition of renewable
biomass in that they are planted and managed for the purpose of harvesting palm kernels and not
for harvesting the trees themselves, in the same way that a fruit orchard is planted and managed
to yield fruit and not woody biomass per se. Our final definition of forestland purposefully
includes tree plantations but excludes orchards, as we believe orchards are more appropriately
considered a type of agricultural land (cropland, specifically), and orchard fruits planted crops.
With this reasoning, palm kernels would also qualify as planted crops under the EISA definition
of renewable biomass, and oil palm plantations would have to meet the criteria for existing
agricultural land in order for their kernels and residue to qualify as renewable biomass under
RFS2.
3.3.2.9 Cleared and Actively Managed Tree Plantations
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters recommend that EPA verify forests as being "continuously actively managed"
using the mechanisms listed in the proposed rule, and in addition consider income tax treatment
of revenue from the property or enrollment in use value property tax programs. (2129.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2173.1
Organization: National Association of Forest Owners (NAFO)
Comment:
The commenter recommends that EPA expand the types of documents that demonstrate active
management of a tree plantation.
Document No.: EPA-HQ-OAR-2005-0161-2417
Organization: Forest Landowners Association
Comment:
The commenter states that active management is a broad concept usually embodied in some kind
of plan. A management plan is a "predetermined course of action and direction to achieve a set
of results." Management plans are usually memorialized in writing, but a plan can take many
forms. The commenter also recommends that EPA expand the documentation that shows
evidence of active management.
Document No.: EPA-HQ-OAR-2005-0161-2507
Organization: Forest Landowners Association
Comment:
The commenter [[2507]] believes the following definition is appropriate from a forestry
standpoint: "Actively managed tree plantations are forests managed for a predetermined outcome
as evidenced by: 1) A written Management Plan; 2) Participation in or management in
accordance with a certification program; 3) Harvest conducted by a logging professional that has,
or is in the process of completing, a state approved Master Logger Program; 4) An agreement
with a consulting forester; 5) Enrollment in a Landowner Assistance Program such as Forest
Map or (spell out what CMP is) CMP; 6) Participation in a silvicultural, conservation,
stewardship or other natural resource management program sponsored by a Federal, state or local
government (e.g., FIP, SIP FLEP, CRP, EQIP); or 7) Any agreement or action requiring or
implying active forest management, including harvest agreements, conservation easements,
silvicultural expenditures or other similar agreements or actions. [[2507 p.2]]
Document No.: EPA-HQ-OAR-2005-0161-2156
Organization: Georgia Forestry Commission
Comment:
The commenter (2156) comments that the requirement of documentation for tree plantations to
meet the "actively managed" definition will not be the same as agricultural lands, stating that the
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consideration of tree plantations as the same as agricultural lands is inappropriate, and noting
that planted forests grow one, two, or three decades without a significant treatment to document.
(2156.1.docx, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2349
Organization: Kentucky Division of Forestry
Comment:
The commenter (2349) recommends expanding the definition of "actively managed" land to
include 1) harvest conducted by logging professionals 2) agreement with consulting forester 3)
enrollment in landowner program 4) agreement implying active forest management 5) existence
of road system with evidence of ongoing maintenance 6) evidence of skid trails indicating
thinning with in the standard rotation period. (2349.pdf, p. 1-2)
Document No.: EPA-HQ-OAR-2005-0161-2517
Organization: National Association of State Foresters
Comment:
The commenter believes the evidence list included in the "actively managed" definition is too
narrow. Nationally, there are 10.4 million family forest owners in the U.S. who own an average
of 25 acres. Many of these landowners actively manage their forests, but are not required (by
state law or otherwise) to do so under a management plan. Further, many of these family forest
owners may not have ready access to sales or purchase records from past management activities
that can date back as many as 30-80 years. To avoid eliminating many family forest owners
from participating, NASF recommends the list of management evidence be expanded to include:
- Harvests conducted by a logging professional that has, or is in the process of completing, a
state approved Master Logger Program;
- An agreement with a consulting forester;
- Enrollment in a Landowner Assistance Program (e.g., ForestMap);
- An agreement or action requiring or implying active forest management, including a harvest
agreement, conservation easement, a silvicultural expenditure or any other similar agreement or
action;
- The existence of a road system or other physical infrastructure with evidence of ongoing
maintenance; or
- Stumps, slash, or evidence of skid trails indicating thinning or other logging within the length
of a standard rotation for the region.
The commenter also recognizes there may be other options available for demonstrating active
management (e.g., evidence of fire breaks, boundary line maintenance) and encourage EPA to
build in flexibility within the program to consider actual circumstances on the ground.
Document No.: EPA-HQ-OAR-2005-0161-2310
Organization: Low Carbon Synthetic Fuels Association (LCSFA)
Comment:
The commenter believes that any number of records, including sales records, tax records, and
insurance records, in conjunction with verification from a professional forester, would be
appropriate for verifying that land was actively managed prior to December 19, 2007.
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Our Response:
EPA has expanded the types of documents that can be used by a renewable fuel producer
to show that the tree plantation from which their feedstocks were harvested was actively
managed on December 19, 2007. Active management is evidenced by any of the following
document that can be traced to the land in question: sales records for planted trees or slash;
purchasing records for seeds, seedlings, or other nursery stock together with other written
documentation connecting the land in question to these purchases; a written management plan
for silvicultural purposes; documentation of participation in a silvicultural program sponsored by
a Federal, state or local government agency; documentation of land management in accordance
with an agricultural or silvicultural product certification program; an agreement for land
management consultation with a professional forester that identifies the land in question; or
evidence of the existence and ongoing maintenance of a road system or other physical
infrastructure designed and maintained for logging use, together with one of the above-
mentioned documents.
LFSA and the Clean Air Task Force comment that tax records should be considered
sufficient evidence of active management of a tree plantation. We considered these comments
and believe that the information these documents provide, income from sales of planted trees or
tree residue, should be reflected in sales invoices or revenue receipts.
In response to the comment that in light of the duration of tree growth, that records
evidencing management may be spaced decades or more apart, EPA notes that the regulations do
not specify a particular date for the documentation in question. Thus, although the objective of
the evidence should be to show that the plantation was actively managed as of the date of EISA,
in many instances documents prepared well before or after the date of EISA enactment may
accomplish this objective. For example, a management plan prepared in 2000 that calls for tree
growth over a twenty year period would be evidence that a tee plantation was actively managed
in 2007.
3.3.2.10 Slash
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
EPA's definitions should broadly interpret slash and pre-commercial thinnings to allow use of
biomass materials that may be otherwise wasted for production of renewable fuels. Renewable
biomass and slash should be defined to include tree bark and trees that are damaged and
destroyed by natural disasters including floods.
Document No.: EPA-HQ-OAR-2005-0161-2349
Organization: Kentucky Division of Forestry
Comment:
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The commenter (2349) suggests the definition of slash to also include "materials from stands that
have been rendered unmerchantable for logging due to degradation from natural and manmade
disturbances resulting in loss of merchantability" (2349.pdf, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2156
Organization: Georgia Forestry Commission
Comment:
The commenter (2156) recommends that the proposed definition of slash needs to include the
understory trees and cull material. (2156.1.docx, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2517
Organization: National Association of State Foresters
Comment:
The commenter states that according to the Dictionary of Forestry (1998, pp. 168), slash is "the
residue, e.g., treetops and branches, left on the ground after logging or accumulating as a result
of a storm, fire, girdling, or delimbing. NASF supports EPA's proposal to use the Dictionary of
Forestry definition of "slash" in place of the term "residue" in an effort to simplify the RFS
regulations and use a silvicultural term that is widely-used in the industry. We also support
clarifying that slash can include tree bark and can be the result of any natural disasters, including
(but not limited to) flooding. Nothing in the definition of slash should preclude the use of
material from stands that have been rendered unmerchantable for logging due to degradation
from natural and manmade disturbances resulting in loss of merchantability. Further, mill
residues such as sawdust, bark and black liquor should not be excluded as an eligible source of
renewable biomass for RIN credits.
Document No.: EPA-HQ-OAR-2005-0161-2494
Organization: Council of Western State Foresters
Comment:
The commenter believes the definition of slash should clarify that slash can include tree bark and
can be the result of any natural disaster, including flooding.
Our Response:
We proposed to define slash according to the Dictionary of Forestry (1998, pp. 168), as
"the residue, e.g., treetops and branches, left on the ground after logging or accumulating as a
result of a storm, fire, girdling, or delimbing." We also proposed to clarify that slash can include
tree bark and can be the result of any natural disaster, including flooding. In response to these
comments in support of this additional inclusion, we are expanding the definition of "slash" to
include tree bark and residue resulting from natural disaster, including flooding. EPA believes
understory trees and cull are best considered "pre-commercial thinnings" under the renewable
biomass definition.
3.3.2.11 Pre-Commercial Thinnings
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
With regard to pre-commercial thinnings, the commenters recommend that EPA should not use
maximum tree diameter as a basis to define pre-commercial thinning, as this maximum tree
diameter would need to vary greatly between forest type and location and thus one maximum
diameter would not be accurate for all locations. Instead, the commenters recommend that EPA
modify its definition of pre-commercial thinnings to include criteria which require biomass
facilities to meet minimum on-site retention of a basal area along with maximum tree diameters
appropriate to the forest type as determined by the United States Forest Service (USFS)
silvicultural stock guidelines. EPA should work with the USFS and the U.S. Fish and Wildlife
Service (FWS) to establish basal area retention rates for different forest types and regions and
develop Memorandums of Understanding as appropriate with states that have developed rigorous
biomass harvesting standards or forest management practices.
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter states that pre-commercial thinnings should include trees that are cut to
concentrate growth of more desirable trees. Regarding EPA's requested comment on whether
the agency should include a maximum diameter beyond which pre-commercial thinnings would
no longer qualify as renewable biomass, the commenter notes that appropriate thinning and
forest management practices will vary by geography and species, and states that any limitation
on the diameter of a tree to qualify as biomass will be arbitrary, cumbersome to enforce, and
provide no appreciable GHG or environmental benefit and therefore is not supported. [[Docket
number 2383.1, p. 15]]
Document No.: EPA-HQ-OAR-2005-0161-2515
Organization: Minnesota Department of Natural Resources (MnDNR)
Comment:
The commenter agrees that financial returns should not be included in the determination of the
category of pre-commercial thinnings. The commenter concurs with EPA's proposal to include
removal of diseased trees as a component of thinning. This provision could be extended to forest
health prescriptions that are designed to contain pest and disease outbreaks and infestations. The
commenter further urges EPA to consider biomass generated by other silvicultural practices that
broadly fall within the category of stand improvement as renewable. (2515.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2156
Organization: Georgia Forestry Commission
Comment:
The commenter (2156) suggests the need to include insect infested trees to the definition of pre-
commercial thinning. (2156.1.docx, p.3)
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Document No.: EPA-HQ-OAR-2005-0161-2143
Organization: New York State Department of Environmental Conservation
Comment:
The commenter (2143) mentions that the term "pre-commercial" is used inappropriately in the
discussion of the eligibility of forest biomass derived renewable fuels for inclusion in RFS.
(2143.2, p.6)
Document No.: EPA-HQ-OAR-2005-0161-2349
Organization: Kentucky Division of Forestry
Comment:
The commenter (2349) does not agree with providing the maximum diameter for pre-commercial
thinning but does support the proposed definition of pre-commercial. (2349.pdf, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2517
Organization: National Association of State Foresters
Comment:
The commenter commends EPA's decision to remove any reference to "financial return" found
in the definition of pre-commercial thinning. Further, state foresters support EPA's decision to
include diseased or insect-infested trees, and recommend the agency include trees killed by other
natural events such as by fire, flood, wind, hurricanes and other extreme events. In many cases,
pre-commercial thinnings involve removing trees of different species, crown sizes, sizes and
condition classes including the removal of diseased or infested trees to improve forest health.
The commenter also strongly recommends that EPA remove any reference to establishing
arbitrary diameter limits as this would almost certainly complicate implementation.
Document No.: EPA-HQ-OAR-2005-0161-2494
Organization: Council of Western State Foresters
Comment:
The commenter agrees with EPA that reference to "having no commercial value" should be
removed from the definition of pre-commercial thinning. The commenter recommends not
having a diameter limit for this definition because the market situation needs to evolve to allow
material to move between markets depending on local economic conditions. The commenter
supports including diseased or insect-infested trees, trees killed by fire, flood, wind and other
extreme events in the definition of pre-commercial thinning for the reasons contained in the
proposed rules. They do not support a maximum diameter, as this would necessarily be an
arbitrary limit and would unnecessarily complicate implementation. Pre-commercial thinning is
conducted for numerous purposes and can target vegetation of different species, crown sizes,
condition, stand position etc. Placing a diameter limit would not only be arbitrary, but could
work at cross-purposes for the thinning itself, including removal of diseased or infested trees to
maintain stand health. The commenter suggests the following definition for the term pre-
commercial thinnings: "Removal of trees from a stand of trees in order to reduce stocking to
improve overall stand vigor, concentrate future growth on more desirable trees, and in fire prone
ecosystems, reduce the potential of stand loss to fire."
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Document No.: EPA-HQ-OAR-2005-0161-2171
Organization: Mascoma Corporation
Comment:
The commenter believes that it is critical that EPA define "pre-commercial thinnings" and
"slash" appropriately so that the rule does not unjustifiably limit the types and quantities of wood
products-including whole trees and pulpwood-that can be harvested in a sustainable manner and
used in the production of advanced biofuels. The commenter explains that generally, pulpwood
is derived from trees that do not make good sawlogs such as heavily branched trees, diseased
trees, and tops of trees harvested for sawlogs and should be included within the definition of
"pre-commercial thinnings" and "slash." The commenter believes that pulpwood should be
specifically included as an eligible feedstock in the final rule. The House of Representatives has
passed the American Clean Energy and Security Act of 2009 which clarifies the definition of
renewable biomass including eligibility of woody biomass from both private and federal
forestlands and the commenter urges EPA to consider these modifications as it finalizes the
RFS2rule. [[Docket number 2171.1, p. 2]]
Our Response:
EPA agrees with the assessment that tree diameter varies greatly by forest type and
location, making any diameter limitation EPA might set as a basis for defining pre-commercial
thinnings arbitrary. We have therefore defined pre-commercial thinnings based on the
Dictionary of Forestry, which contains commonly understood definitions of forestry
terminology, as "the removal of trees not for immediate financial return but to reduce stocking to
concentrate growth on the more desirable trees or other vegetative material that is removed to
promote tree growth." EPA is not establishing basal area retention rates for different forest types
and regions as one commenter suggests, as a case-by-case assessment of each forest type by a
professional forester would be necessary, and such an assessment is impractical for purposes of
RFS2.
Finally, EPA notes, EISA specifically prevents slash and pre-commercial thinnings from
qualifying as renewable biomass if it is collected from federal forestlands. However, there is no
such restriction regarding biomass from federal lands if it is taken from the immediate vicinity
off buildings and other areas regularly occupied by people, or public infrastructure, at risk of
wildfire.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2173.1
Organization: National Association of Forest Owners (NAFO)
Comment:
The commenter suggests that in issuing regulations to effectuate the EISA's definition of
"renewable biomass," EPA should not overlook any important sources of forest biomass. For
example, the commenter is concerned that EPA has overlooked intercropping as a potential
source of renewable biomass. Intercropping is an innovative concept that forest landowners are
exploring, whereby foresters are planting perennial plants (such as switchgrass) between rows of
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young trees. These landowners hope to achieve annual harvests for at least ten years after
establishment, before the crops are shaded out by adjacent trees.
The commenter notes that another important source of forest biomass is understory vegetation,
including shrubs, brush, and other plants. Such vegetation is often removed to maintain
desirable forest conditions and improve tree growth. The resulting biomass can and should be
eligible for use as a fuel source along with eligible biomass from trees. Although not specifically
identified in the definition of renewable biomass, the commenter believes it is reasonable to
assume that Congress intended such material to qualify as eligible biomass, as it is a byproduct
of ordinary forest operations producing brush, slash, and other types of forest residues. The
commenter urges that EPA's regulations be drafted broadly so that the greatest array of forest
vegetation, including crops produced through intercropping and understory plants, are eligible as
renewable biomass.
Our Response:
Under EISA, renewable biomass may include "slash and pre-commercial thinnings" from
non-federal forestlands, and "planted trees and tree residue" from actively managed tree
plantations on non-federal land. EPA is including tree plantations as a subset of forestland in the
final RFS2 regulations since it is commonly understood as such throughout the forestry industry,
which will effectively allow pre-commercial thinnings and slash, in addition to planted trees and
tree residue, harvested from tree plantations to serve as qualifying feedstocks for renewable fuel
production. Thus because we have defined "pre-commercial thinnings" in the final regulations
as "trees, including unhealthy or diseased trees, primarily removed to reduce stocking to
concentrate growth on more desirable, healthy trees, or other vegetative material that is removed
to promote tree growth," understory vegetation as described by the commenter would qualify as
renewable biomass under RFS2.
However, although intercropping can help to diversify the types of feedstocks harvested
from tree plantations as noted by the commenter, we do not believe that perennial plants or other
planted crops can reasonably be considered planted trees, tree residue, slash, or pre-commercial
thinnings, and therefore intercropped plants from tree plantations would not qualify as renewable
biomass under RFS2.
3.3.2.12 Forestland and Nonforested Land
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2143
Organization: New York State Department of Environmental Conservation
Comment:
The commenter (2143) recommends that EPA should define forest land the same as the USDA
Forest Service, Forest Inventory & Assessment (FIA). (2143.2, p.6)
Document No.: EPA-HQ-OAR-2005-0161-2173.1
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Organization: National Association of Forest Owners (NAFO)
Comment:
The commenter (2173) recommends EPA amend its proposed definition of "forestland" to
include tree plantations consistent with the use of the term among forestry professionals.
Document No.: EPA-HQ-OAR-2005-0161-2144
Organization: New York State Department of Agriculture and Markets
Comment:
The commenter has considerable concern regarding language regarding the proposed definition
of "nonforested." The commenter noted that the intent of the last line in the definition is unclear.
(2144.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2515
Organization: Minnesota Department of Natural Resources (MnDNR)
Comment:
The commenter believes that EPA's proposal which defines forestland as any parcel of one acre
or more with predominately tree cover will create eligibility problems. Restoring these sites to
grass cover types and allowing those lands to supply renewable biomass will provide biomass
and enhance the ecological value and function of the sites. The commenter believes it to be more
appropriate to look at the landscape context to determine forest land status. Tools such as the
Ecological Classification System can be employed to determine forest status. (2515.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2349
Organization: Kentucky Division of Forestry
Comment:
The commenter (2349) suggests that the term Forestland should be defined according to U.S
Forest Service's Forest Inventory and Analysis (FIA) definition. (2349.pdf, p.l) The commenter
(2349) also recommends that the EPA should adopt one of the two definitions of non-forest lands
as described by: 1) RPA assessment definition of non-forest land 2) FIA definition of non-forest
land. (2349.pdf, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2156
Organization: Georgia Forestry Commission
Comment:
The commenter (2156) suggests that the definition of forestland seems appropriate, with the very
obvious exception of the proposal to not include tree plantations as forestland. This is
inappropriate and serves no purpose within the language. It could also result in unintended
effects beyond the scope of this legislation. (2156.1.docx, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2517
Organization: National Association of State Foresters
Comment:
The commenter comments that EPA's definition of forestland does not include plantations,
which are a commonly-accepted type of forest land throughout the forest industry. Planted
forests may differ from those of natural origin. In practice, however, there is no clear dichotomy
between a tree plantation and a natural forest. In place of the proposed RFS2 definition, NASF
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strongly recommends EPA defer to the commonly understood, widely used forest land definition
developed by the U.S. Forest Service Forest Inventory and Analysis (FIA) program.
Similarly, the commenter notes that the FIA definition of non-forest land is commonly-
understood in the forestry community and should be applied in EPA's RFS2 regulations.
Document No.: EPA-HQ-OAR-2005-0161-2494
Organization: Council of Western State Foresters
Comment:
The commenter suggests using the definition for non-forested land used by the US FS Forest
Inventory and Analysis program and RPA Assessment.
Document No.: EPA-HQ-OAR-2005-0161-2361
Organization: Indonesian Palm Oil Commission
Comment:
The commenter (2361) is not sure if the definition of non-forested land includes oil palm
plantations. The commenter believes that IPCC had an agreed definition of forested land
therefore oil palm should be considered as tree plantation and not forest so that biofuel feedstock
may be legitimately obtained from it after December 19, 2007. (2361.1.pdf, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2016
Organization: Malaysian Palm Oil Board (MPOB)
Comment:
The commenter (2016.1) would like to confirm that the definition of "nonforested" land (page
249330) includes oil palm plantations. This means that oil palm is to be considered "tree
plantation" and not "forest" so that biofuel feedstock may be legitimately obtained from it after
December 19, 2007. (2016, p.2)
Our Response:
In response to many of these comments, EPA's final definition of forestland is similar to
the FIA definition of forest, that is "generally undeveloped land covering a minimum of 1 acre
upon which the primary vegetative species is trees, including land that formerly had such tree
cover and that will be regenerated and tree plantations. Tree covered areas in intensive
agricultural crop production settings, such as fruit orchards, or tree-covered areas in urban
settings such as city parks, are not considered forestland."
In response to comments to broaden the definition of "forestland" to include tree
plantations, we are including tree plantations as a subset of forestland since they are commonly
understood as such throughout the forestry industry.
With respect to the categorization of oil palm plantations, we believe such plantations are
more similar to fruit orchards than to tree plantations referred to within the definition of
renewable biomass in that they are planted and managed for the purpose of harvesting palm
kernels and not for harvesting the trees themselves, in the same way that a fruit orchard is
planted and managed to yield fruit and not woody biomass per se. Our final definition of
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forestland purposefully includes tree plantations but excludes orchards, as we believe orchards
are more appropriately considered a type of agricultural land (cropland, specifically), and
orchard fruits planted crops. With this reasoning, we believe that palm kernels would also
qualify as planted crops under the EISA definition of renewable biomass, and oil palm
plantations would have to meet the criteria for existing agricultural land in order for their kernels
and residue to qualify as renewable biomass under RFS2.
Document No.: EPA-HQ-OAR-2005-0161-2143
Organization: New York State Department of Environmental Conservation
Comment:
The commenter (2143) states the proposal is not clear regarding the status of land that is
currently not actively used for agriculture or forest. These lands, that might be "idle" well into
the future and not used for activities that would interfere with the establishment of trees and
forests for biomass production, should be recognized for their ability to contribute to the
production of renewable biomass if and when action may be taken to establish forest growth.
(2143.2, p.6)
Our Response:
EISA specifies not only the types of feedstocks that may be used to produce renewable
fuel but also the types of land and status of the land from which many types of feedstocks may
come. Tree plantations must have been cleared and actively managed as of December 19, 2007
in order for biomass taken from such lands to qualify as renewable biomass. Thus land that was
"idle" on that date, unless intentionally so as a result of management decision, cannot be
considered a tree plantation under the final RFS2 regulations.
However, if at any point in the future such idle land meets the definition of forestland, is
non-federal land, and is not ecologically-sensitive land, then slash and pre-commercial thinnings
taken from such land could qualify as renewable biomass under RFS2. In addition, land that was
idle on December 19, 2007 could also potentially qualify for renewable biomass production if it
includes buildings and other areas regularly occupied by people or public infrastructure at risk of
wildfire or is used for production of non-cultivated feedstocks such as algae and animal wastes.
3.3.2.13 Ecologically Sensitive Forestland
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2143
Organization: New York State Department of Environmental Conservation
Comment:
The commenter (2143) suggests that the state forester should be responsible for defining
"ecologically sensitive forest land" as it varies by state and the entire country does not fit into
this definition. (2143.2. P.6)
Document No.: EPA-HQ-OAR-2005-0161-2349
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Organization: Kentucky Division of Forestry
Comment:
The commenter (2349) proposes that EPA should install a state-preferred method - in
consultation by the state forester to define & delineate ecologically sensitive forest land state by
state. (2349.pdf, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2156
Organization: Georgia Forestry Commission
Comment:
The commenter (2156) suggests that more clarity is needed concerning the State Natural
Heritage Program areas and globally ranked ecological community database. (2156.1.docx, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2517
Organization: National Association of State Foresters
Comment:
EPA proposes to use data compiled by NatureServe to publish a special report to identify
"ecologically sensitive forestland." The report would list all forest ecological communities in the
U.S. with a global ranking of Gl, G2, or G3, or with a State ranking of SI, S2, or S3, and would
include descriptions of the key geographic and biologic attributes of the referenced ecological
community. It is our understanding the report would identify those ecological communities from
which slash and pre-commercial thinnings could not be used as feedstock and would be
ineligible for RINs.
Ecological communities identified as critically imperiled, imperiled or rare by the Natural
Heritage Program in one state may not mean the same ecological community has the same status
in another state. EPA must be clear as they promulgate the final rule that designations as to the
status of ecological communities is restricted to the state in which it resides. Blanket, nation-
wide designations are not defensible and will further restrict the ability of meeting the goals set
forth in EISA. Rather than publishing a special report, NASF recommends EPA install a state-
deferred process whereby the State Natural Heritage Program—in consultation with the State
Forester—delineate where ecologically sensitive forest lands reside. These decisions—
alongside determinations for making information regarding the location of sensitive sites
publicly available—best reside at the state level.
Document No.: EPA-HQ-OAR-2005-0161-2173.1
Organization: National Association of Forest Owners (NAFO)
Comment:
The commenter believes EPA's inclusion of G3 forests in the list of ecologically sensitive forests
is flawed because the NatureServe rankings do not include a "rare" designation.
Document No.: EPA-HQ-OAR-2005-0161-2494
Organization: Council of Western State Foresters
Comment:
The commenter notes that NatureServe and State Natural Heritage databases are proposed by
EPA for using these designations to identify "ecologically sensitive lands" where slash and pre-
commercial thinnings could not be used as feedstock for production of renewable fuel. The
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CWSF are concerned about land use restrictions for state and private lands included in the draft
regulations that could put further restrictions on utilization of biomass from legal forest
management activities conducted by private landowners and state forest managers. Furthermore,
biomass removal may be fully consistent and appropriate for addressing conservation threats and
restoration needs for some of the identified "ecologically sensitive" forest lands, especially
where returning the system to a more traditional fire regime is part of the system's ecology and
where fire suppression has contributed to the current condition. New bioenergy markets could
help make restoration efforts on these lands more economical. The commenter recommends not
automatically excluding Nature Serve areas from potentially contributing to renewable biomass.
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters recommend that EPA should not rely solely on state natural heritage programs
to identify ecologically sensitive lands. Databases of sensitive lands maintained by non-profit
organizations, such as NatureServe, should also be consulted in determining what ecologically-
sensitive lands should not be eligible to provide biomass.
Our Response:
EISA explicitly excludes from its definition of renewable biomass slash and pre-
commercial thinnings taken from forestland ecological communities ranked as critically
imperiled, imperiled, or rare pursuant to a State Natural Heritage Program. Therefore we have
finalized our regulations to exclude biomass from such areas, specifically those with Natural
Heritage Programs global ranking of Gl or G2, or with a State ranking of SI, S2, or S3, and we
are including in the docket lists of ecological communities fitting these descriptions. The lists
consist of data compiled by NatureServe and are published in special reports to identify
"ecologically sensitive forestland." These lists are specified on a state-by-state basis.
3.3.2.14 Old-Growth Forest
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters recommend that EPA should not use a single age of 200 years to define old
growth and late-successional forests as this would not be appropriate for all locations and
ecosystems. Rather, research funding should be provided to accomplish nation-wide mapping of
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these ecosystems in order to exclude old growth and late-successional forest harvests from the
definition of renewable biomass.
Document No.: EPA-HQ-OAR-2005-0161-2349
Organization: Kentucky Division of Forestry
Comment:
The commenter (2349) suggests that the definition of Old-Growth trees should be based on
various characters as described in the Dictionary of Forestry (1998, p. 127) published by
American Society of Foresters and not based on absolute measure of 200 years of age. (2349.pdf,
P-4)
Document No.: EPA-HQ-OAR-2005-0161-2310
Organization: Low Carbon Synthetic Fuels Association (LCSFA)
Comment:
EPA proposes that ecologically sensitive forestland, which is excluded from the EISA definition
of renewable biomass, be defined to include forest that is characterized by trees at least two
hundred years old. This definition requires greater refinement due to its regional applications.
Document No.: EPA-HQ-OAR-2005-0161-2156
Organization: Georgia Forestry Commission
Comment:
The commenter (2156) recommends that older trees must be predominant in a forest to trigger
the old-growth and late successional forests classification. (2156.1.docx, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2517
Organization: National Association of State Foresters
Comment:
The commenter holds that old growth, late-successional and many of the forest communities
ranked by NatureServe are the same forests at greatest risk to insect, disease and catastrophic
wildfire threats. In fact, NatureServe often calls for the active management of these areas. We
strongly recommend EPA avoid further restricting the type and amount of biomass that can be
removed from these areas as they are the same forests that can benefit most from forest health
treatments and are already protected by federal requirements for threatened and endangered
(T&E) species. Access to new biomass markets—such as those likely to be created by a RFS—
can help cover the costs associated with restoring these areas. A narrowly interpreted EISA
biomass definition will preclude these markets from developing in many areas.
NASF disagrees with EPA's proposition to characterize old-growth and late-successional forests
as including trees at least 200 years old. As indicated in the dictionary of forestry, old-growth
forests are characterized more by structural characteristics (e.g., live trees, canopy conditions,
snags, down logs, etc.) and less by the age of the trees found in the stand. Old-growth conditions
vary by forest type, climate, site conditions and disturbance regime. Using an age-related
definition disregards other structural characteristics that more accurately identify old growth
conditions. NASF recommends EPA adopt the following definition of old-growth developed by
the US Forest Service: "Old growth encompasses the later stages of stand development that
typically differ from earlier stages in a variety of characteristics which may include tree size,
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accumulations of large dead woody material, number of canopy layers, species composition, and
ecosystem function."
Document No.: EPA-HQ-OAR-2005-0161-2494
Organization: Council of Western State Foresters
Comment:
The commenter comments that EPA should use the US Forest Service definition of old-growth
(see below) and provide for biomass removal that helps achieve ecological restoration or that
helps maintain ecological integrity of these forests. The definition should not include reference
to tree age (200 year old) or "virgin" forests.
Our Response:
While EPA understands that there are a number of criteria that professional foresters may
use in determining whether a forest is old growth and that the criteria differ depending on the
type of forest, for purposes of the RFS2 rule, EPA seeks to use definitive criteria that can be
applied by non-professionals. We have therefore finalized the proposed definition of "old
growth" as characterized by trees at least 200 years old.
3.3.2.15 Areas at Risk of Wildfire
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters would like EPA to use Community Wildfire Protection Plans and Wildland
Urban Interfaces in order to decide which materials should be removed and used to reduce
wildfire instead of assessing distance to vegetated land to determine eligible areas. (2129.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2515
Organization: Minnesota Department of Natural Resources (MnDNR)
Comment:
The commenter recommends all fuel wood within 200 ft of a given structure be eligible for
biomass (the maximum distance for eligible wood). Limiting material eligible for fuels
reduction to 100 ft is unnecessarily restrictive. Additionally, the commenter believes eligible
biomass from fuel wood reduction should not be limited to communities with Community
Wildfire Protection Plans (CWPPs). (2515.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2349
Organization: Kentucky Division of Forestry
Comment:
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The commenter (2349) does not support the definition of biomass obtained from communities at
risk being within 100 feet; however they do support immediate vicinity within 200 ft of
buildings, campgrounds, public infrastructure to be eligible for RIN. Also, the commenter
(2349) recommends that EPA use the existing definition of wildland urban interface as defined in
the Healthy Forests Restoration Act of 2003 to be eligible for RIN credits. (2349.pdf, p4)
Document No.: EPA-HQ-OAR-2005-0161-2517
Organization: National Association of State Foresters
Comment:
The commenter notes that the EISA definition of renewable biomass includes biomass obtained
from the immediate vicinity of buildings and other areas regularly occupied by people, or of
public infrastructure, at risk from wildfire. EPA proposes that under RFS2, the term "immediate
vicinity" would mean within 200 feet of a given structure or area. NASF supports EPA's
proposition to allow biomass within 200 feet of buildings, campgrounds, and other areas
regularly occupied by people, or of public infrastructure to be eligible for RINs.
EPA has called for comments on two implementation alternatives for identifying "areas at risk of
wildfire" including the use of biomass from priority areas identified in Community Wildfire
Protection Plans (CWPPs) and any area within the Wildland Urban Interface (WUI). NASF
recommends these should not be considered "implementation alternatives" rather biomass from
both the WUI and from priority areas identified in CWPPs should be eligible for RIN credits.
We recommend EPA use existing definitions of WUI already defined in statute under the
Healthy Forests Restoration Act of 2003 (PL 108-148 and HR1904).
Document No.: EPA-HQ-OAR-2005-0161-2494
Organization: Council of Western State Foresters
Comment:
The commenter states that woody material removed to reduce fire risk to communities must be
included in the definition of "renewable biomass". The definition should be consistent with the
definition of WUI and areas at risk of wildfire that are currently in legislation, specifically the
Healthy Forests Restoration Act of 2003.
Document No.: EPA-HQ-OAR-2005-0161-2310
Organization: Low Carbon Synthetic Fuels Association (LCSFA)
Comment:
The commenter believes that EPA's alternative approach for identifying biomass from areas at
risk of wildfire would ease recordkeeping requirements and would be more readily verifiable.
[[Docket number 2310.1, pp. 7-10]]
Our Response:
EPA believes that the statutory definition of WUI from the Healthy Forests Restoration
Act (Pub. L. 108-148) is too vague to use directly in implementing the RFS2 program. If EPA
used this WUI definition, individual plots of land would have to be assessed by a professional
forester on a case-by-case basis in order to determine if they meet the WUI definition, creating
an expensive burden for landowners seeking to sell biomass from their lands as renewable fuel
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feedstocks. In light of these comments and the need for a relatively simple way for landowners
and renewable fuel producers to track the status of particular plots of land, for the final rule we
are defining "areas at risk of wildfire" as those areas in the "wildland-urban interface," where
humans and their development meet or intermix with wildland fuel. The SILVIS laboratory at
the University of Wisconsin maintains a website that provides a detailed map of areas that meet
this criteria at: http://www.silvis.forest.wisc.edu/projects/US WUI 2000.asp. The electronic
WUI map is a readily accessible reference tool that was prepared by experts in the field of
identifying areas at risk of wildfire, and is thus an ideal reference for purposes of implementing
RFS2.
3.3.2.16 Animal Wastes and Byproducts
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) noted that the definition of renewable biomass is not clear as to whether
animal byproducts include all the rendered fats and oils, and believes that this section should
expand the definition of animal byproducts or reference that these include animal tallows, pork
fat, chicken grease, fish oil, etc. The commenter also believes that the list of renewable biomass
should include an eighth category called waste greases that includes waste cooking oil (called
yellow grease) and brown grease. (0994.1, p.3), stating that these greases are significant
renewable biomass feedstocks and are not identified by any of the other seven items listed.
(0994.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2305
Organization: The Soap and Detergent Association
Comment:
The commenters [[2305]] expressed concern with the inclusion of animal waste material and
animal byproducts within the definition of renewable biomass, noting that tallow and other
byproducts have many uses and that the price per barrel for tallow is similar to and at times
higher priced than a barrel of crude oil. SDA believes that they should not to be included in the
definition of renewable biomass. [[#2305.1 p.4]]
Our Response:
In the definition of renewable biomass, EISA and our final RFS2 regulations specifically
list separated food waste, "including recycled cooking and trap grease" and "animal waste
material and animal byproducts." EPA believes these listings cover the materials specified by
the first commenter. Because the category "animal wastes and animal byproducts" is included in
the statutory definition of renewable biomass, EPA cannot exclude this category from its
regulatory definition as the second commenter suggests.
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3.3.2.17 Other Comments on Definitions
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that EPA's definition of "Existing Agricultural Land" is
inconsistent with the statute and could leave land out of the program that would meet the
definition established by Congress. (2329.1, p.74) [[See Docket Number 2329.1, pp. 74-77 for a
detailed discussion on this issue]]
The commenter supports the definitions used by EPA to define cropland and forested land to the
extent those definitions are consistent with USDA and generally used definitions. The
commenter also believes that EPA's definitions of fallow, planted crops and crop residues, and
forestland are too limiting. The commenter believes that EPA should use USDA definitions that
are well-known and understood by the agricultural community, rather than create new definitions
that are likely to raise confusion and that may restrict the lands Congress sought to allow for
biofuel feedstock production. (2329.1, pp.77-79) [[See Docket Number 2329.1, pp.77-79 for a
detailed discussion of this issue]]
Document No.: EPA-HQ-OAR-2005-0161-2517
Organization: National Association of State Foresters
Comment:
The commenter holds that EISA overly restricts the ability of the nation's forests to contribute
biomass, and that a narrow interpretation from EPA will further inhibit the ability to meet the
RFS2 goals.
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter (2383) states that EPA's definitions and requirements for feedstocks and energy
sources must maximize the availability of renewable fuel consistent with the text and purpose of
EISA. In implementing the RFS2 program, EPA should adopt definitions of key terms that are
consistent with terms defined by Congress, support the purpose of the RFS2 program to increase
the production and use of renewable fuels, and avoid creation of unnecessary burdens,
restrictions, or costs that impede the use of renewable feedstocks or fuels. [[Docket number
2383.1, p. 12 and 2380.1, p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-2342
Organization: Burack Environmental Law Offices
Comment:
The commenter (2342) believes that "Biomass" is broadly defined in RFS2 (within the definition
of "Renewable Biomass") as "organic matter that is available on a renewable or recurring basis"
and that biomass is already listed as a feedstock for process heat in conjunction with one of the
corn ethanol pathways. The commenter also notes that "cellulosic biomass" does not appear to
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be specifically defined in RFS2, but has a reasonably clearly understood meaning within the
agency and regulated community. (2342, p.2)
Our Response:
EISA's renewable biomass definition includes a number of terms that require definition.
We have made every attempt to define these terms as consistently with other federal statutory
and regulatory definitions as well as industry standards as possible, while keeping them workable
for purposes of program implementation. We have also attempted, within the statutory confines
of EISA, to interpret them broadly in order to further the goal of the EISA and RFS program, to
increase the presence of renewable fuels in transportation fuel, without at the same time
compromising the environmental protections Congress intended through adopting the renewable
biomass restrictions.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2143
Organization: New York State Department of Environmental Conservation
Comment:
The commenter (2143) suggests that the definition of renewable biomass should include material
that is available from actively managed native or natural forests as well as from plantations. The
commenter (2143) suggests that participation in a federal, state or locally sponsored
"conservation" program, including the USDA Forest Service Forest Stewardship Program (as
well as the certification programs mentioned on page 24934 of the preamble) be incorporated in
the definition. (2143.2, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2302
Organization: UC Berkeley - Energy Biosciences Institute
Comment:
The commenter strongly urges EPA to add a new category of renewable biomass, "8. Plant
material, including invasive species, removed for habitat restoration, fire mitigation, or as a
result of natural disaster". They further suggest that this new category be excluded from
predictive assessments. They also encourage EPA to include the possibility that new forms of
renewable biomass may emerge that are not specifically designated in the rule.
Document No.: EPA-HQ-OAR-2005-0161-2349
Organization: Kentucky Division of Forestry
Comment:
The commenter (2349) encourages the establishment of biomass plantations on surfaced mined
lands and including them regardless of the time of establishment. (2349.pdf, p.l)
Our Response:
EISA restricts the materials that can be considered renewable biomass under RFS2, so
EPA cannot add additional categories of biomass. However, where possible without
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undermining the environmental objectives of the statute, EPA has broadly defined EISA's terms
related to renewable biomass. For example, EPA has included biomass from agricultural land
removed for purposes of invasive species control or fire management in the definition of crop
residue. Additionally, the definition of slash has been clarified to include biomass resulting from
natural disaster, including flooding.
In response to the last comment, we emphasize that EISA specifically limits the land that
renewable fuel feedstocks may come from. We have interpreted the "cleared or cultivated"
requirement in the renewable biomass definition as requiring that agricultural lands and tree
plantations be cleared prior to EISA's enactment on December 19, 2007 and actively managed
on that date. EPA cannot allow for clearing of additional lands after December 19, 2007 for
purposes of RFS2 and cannot include lands as tree plantations that were not actively managed
tree plantations as of the date of EISA enactment.
3.3.3 Requiring a Demonstration that Feedstocks Meet the Renewable Biomass Definition
Prior to Generating RINs
3.3.3.1 General Comments
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2510
Organization: Iowa Renewable Energy, LLC
Comment:
The commenter (2510) states that they have found no data source that will tell how to determine
the value of land (all types) that may be used for renewable fuels, regardless of the feedstock
type. The commenter believes that without this data, it is without merit to expect small business
to spend fortunes to chase numbers that have not been determined to be relevant to the process.
[[Docket number 2510.1, p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-1015
Organization: Renewable Energy Group
Comment:
The commenter (1015) asks for a delay in the certification for feedstock land restrictions
regulation until a cost benefit analysis is conducted on behalf of the biofuel producer and
feedstock producer to implement this section. As EPA correctly concludes, no current data is
collected from agricultural land owners, producers, and forest owners for assessing the status of
agricultural land, forest land, and other types of land that could be used for renewable fuel
feedstock production. The commenter has not identified any federal or state agency or third
party that collects such data in a timely and meaningful way. [[Docket number 2123.1, p. 5]]
Document No.: EPA-HQ-OAR-2005-0161-2010
Organization: SoyMor Biodiesel, LLC
Comment:
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The commenter (2010) asks for a delay in the certification for feedstock land restrictions
regulation until a cost benefit analysis is conducted on behalf of the biofuel producer and
feedstock producer to implement this section. As EPA correctly concludes, no current data is
collected from agricultural land owners, producers, and forest owners for assessing the status of
agricultural land, forest land, and other types of land that could be used for renewable fuel
feedstock production. The commenter has not identified any federal or state agency or third
party that collects such data in a timely and meaningful way. [[Docket number 2010.1, p. 5]]
Document No.: EPA-HQ-OAR-2005-0161-2011
Organization: Western Dubuque Biodiesel LLC
Comment:
The commenter (2011) asks for a delay in the certification for feedstock land restrictions
regulation until a cost benefit analysis is conducted on behalf of the biofuel producer and
feedstock producer to implement this section. As EPA correctly concludes, no current data is
collected from agricultural land owners, producers, and forest owners for assessing the status of
agricultural land, forest land, and other types of land that could be used for renewable fuel
feedstock production. The commenter has not identified any federal or state agency or third
party that collects such data in a timely and meaningful way. [[Docket number 2011.1, p. 5]]
Document No.: EPA-HQ-OAR-2005-0161-2013
Organization: Central Iowa Energy, LLC
Comment:
The commenter (2013) asks for a delay in the certification for feedstock land restrictions
regulation until a cost benefit analysis is conducted on behalf of the biofuel producer and
feedstock producer to implement this section. As EPA correctly concludes, no current data is
collected from agricultural land owners, producers, and forest owners for assessing the status of
agricultural land, forest land, and other types of land that could be used for renewable fuel
feedstock production. The commenter has not identified any federal or state agency or third
party that collects such data in a timely and meaningful way. [[Docket number 2013.1, p. 5]]
Our Response:
EPA is required by law to promulgate regulations to implement the language contained in
EISA, including the definition of renewable biomass which restricts renewable fuel feedstocks
and the land from which they may come. We believe that there is sufficient data, as well as
documentation on historic and current use of land, for all renewable fuel producers to be able to
meet the renewable biomass provisions contained in the final RFS2 regulations.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2354
Organization: Massachusetts Department of Environmental Protection
Comment:
The commenter (2354) encourages EPA to develop a system by which feedstocks used for
biofuels production are tracked with some specificity at the facility level. Lifecycle emissions
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depend on the location and method of feedstock production, collection so this information would
be helpful in program evaluation.
Our Response:
In the final RFS2 regulations we are requiring renewable fuel producers to report the
types and volumes of feedstocks used in each batch of renewable fuel for which RINs are
generated. We are also requiring producers who are not subject to the aggregate compliance
approach for renewable biomass to submit on a quarterly basis documentation that links their
feedstocks to their source. This information will be at the facility level.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2014
Organization: Clean Fuels Clearinghouse
Comment:
The commenter (2243.1) recommends that EPA be more prescriptive in defining renewable
biomass and modify the regulations as proposed under §80.14151 (b)(6)(I) to include the
following language "must show title evidence of ownership or lawful right of use of lands upon
which the biomass was produced." This qualifying criteria builds upon established land title
practices and will assure that EPA can administer the program as proposed. (2243.1, p.2)
Our Response:
EPA does not believe that it is necessary to adopt the specific recommendation of the
commenter. EPA believes that implementation of the renewable biomass provisions requires
some traceability of the feedstock to the land from which it was harvested. Therefore, our final
regulations contain a requirement that feedstock verification documents be traceable to the land
in question. EPA believes it is unlikely that producers will collect biomass unlawfully when
required to report to EPA the location of such collection. In addition, EPA has no reason to
believe that these or other producers would obtain feedstocks illegally, and existing state and
local laws and procedures are in place to rectify such activities if they do occur.
3.3.3.2 Direct Regulation of Feedstock Producers/Suppliers
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter (2383) is concerned about EPA's proposed requirements that renewable fuel
producers must obtain and keep records and documents demonstrating that feedstock meets the
definition of "renewable biomass," and must certify that all biomass used meets this definition,
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are unnecessarily burdensome. The feedstock producers will have greater knowledge of the
historical use of land where feedstock is produced, the production of feedstocks, and will hold
the primary records necessary to support such certification. The feedstock producers, rather than
the renewable fuel producers, should be the entities that are required to maintain primary records
regarding whether biomass meets the definition of "renewable biomass" and to certify that such
biomass meets this definition.. [[Docket number 2383.1, p. 59]]
Our Response:
We understand that in many, if not most, cases, feedstock producers will have a better
knowledge of the historical and current use of land used for growing renewable fuel feedstocks
than a renewable fuel producer will. RIN generation responsibilities, however, remain with
renewable fuel producers. For this reason, our approach for implementing the renewable
biomass provision of EISA requires renewable fuel producers to obtain documentation from the
feedstock producer (in the case of planted crops and crop residue and planted trees and tree
residue). In order for EPA to be able to properly enforce against invalid RIN generation, the
burden of proof for demonstrating that feedstocks do or do not meet the definition of "renewable
biomass" must also reside with the renewable fuel producer.
3.3.3.3 Agricultural Land
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2488
Organization: Kansas Corn Growers Association
Comment:
The commenter (2488) believes that by requiring proof that feedstocks used for ethanol
production came from cropland which was in production prior to 2007, the proposed rule has the
potential to place a great burden on corn growers. (2488, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2189
Organization: Technical Consultant for Enzyme Development Corporation and
Genencor International
Comment:
The commenter believes that the EPA proposal would put a heavy and unwarranted burden on
feedstock providers. EPA's proposal requires proof that croplands used to create biofuel
feedstock were in existence prior to EISA becoming law in 2007. But there's no risk that new
lands will be cleared for feedstock for biofuel production —and the rule would mean extra costs
and inconveniences for feedstock providers. (2189, p.2-3)
Document No.: EPA-HQ-OAR-2005-0161-2120
Organization: Society for Range Management
Comment:
The commenter [[2120]] feels that the evidence EPA requires of producers in order to verify that
their feedstock is eligible for RINs should be kept to a minimum. This is particularly true in the
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case of rangelands, where most landowners have been documenting their land management
activities for a much shorter time than is generally the case for America's farmers. EPA should
cite examples of forms of evidence that would be acceptable, but not limit its approval to those
kinds of records, in order to grant maximum flexibility to producers to demonstrate their claims.
[[#2120.1 p.4]]
Document No.: EPA-HQ-OAR-2005-0161-2446
Organization: Minnesota Farm Bureau Federation
Comment:
The commenter believes that EPA's definition of existing cropland creates onerous land use
rules and record-keeping requirements that would bar many farmers from growing crops used for
biofuel production and in so doing would reduce the value of a great deal of American farmland.
The commenter also states that EPA makes several assumptions about the management of
agricultural land that are not borne out by commonly accepted practices. For instance, the
agency asserts that sales and purchasing receipts should be available to indicate that pastureland
is being managed. Many farmers maintain their pastures even when the land is not actively
being grazed. This maintenance may include mowing to reduce noxious weeds or fire hazards.
There are not normally sales receipts or records for these routine practices.
The commenter states that a farmer may leave land fallow for a myriad of reasons. These
decisions are rarely documented. It is also unreasonable to expect that records such as sales
receipts will be transferred when land is sold to new owners. For example, following a
landowners' death land may lie fallow while estate issues are resolved. These issues can often
take years to resolve.
Document No.: EPA-HQ-OAR-2005-0161-2549
Organization: Triton Energy LLC
Comment:
The commenter (2549.1) is concerned with the unnecessary and unworkable feedstock
certification requirements that EPA has proposed. This would create a whole new trading group
on the Chicago Board of Trades and other world markets for beans and oils before the
implementation date and those after the date. Those crops and oils raised and sold before the
date would be more valuable because of the duel use of food or fuel and those after the date
would only be used for food. It will be impossible for the farmer, grain elevator, bean crusher,
storage facilities, oil transporters etc. to keep this product from getting mixed without billions of
dollars of new storage capacity which will have a negative effect on what we are trying to do.
The amount of tracking and paperwork to keep records and proof will be a nightmare for both
producers, sellers, storage facilities, traders and consumers. (2549.1, pp.1-2).
Document No.: EPA-HQ-OAR-2005-0161-2300
Organization: Dow AgroSciences
Comment:
The commenter is concerned with the unnecessary and unworkable feedstock certification
requirement that EPA has proposed. (2300, p.l)
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Document No.: EPA-HQ-OAR-2005-0161-2150
Organization: American Farm Bureau Federation
Comment:
The commenter (2150.1) believes that EPA's requirements (records of sales, written
management plans, participation in state, local or federal management agency, or certified
program) for proving cropland has been "continuously actively managed as agricultural land or
fallow" as are unnecessarily burdensome and unclear. (Page 2)
Document No.: EPA-HQ-OAR-2005-0161-2353
Organization: Iowa Soybean Association
Comment:
The commenter [[2353]] states that most Iowa farmers have extensive on-farm grain storage
facilities. Overflow grain is usually trucked to local grain elevators for temporary storage before
being commingled with grain from other farms and shipped by rail or truck to processing or
export facilities. It would be very difficult to identify (and maintain the identity of) the
originating land of any amount of production. USDA programs are in place to identify farm
acreages, provide cropping histories and monitor environmental practices, and almost all Iowa
farmers participate in these programs. Iowa soybean producers believe EPA should eliminate the
impractical and nearly impossible burden of certification of production from existing and eligible
cropland. [[#2353 p.3]]
Document No.: EPA-HQ-OAR-2005-0161-2119
Organization: National Sorghum Producers
Comment:
The commenter (2119.1) believes that the tracking requirements associated with existing
agricultural land as proposed by EPA are unrealistic and unenforceable. The commenter
believes that a system that exempts grain sorghum and other grain feedstocks is reasonable and
enforceable. The new system, however, should track other feedstocks, including sweet sorghum
and energy sorghum, since these other advanced and cellulosic feedstocks will be grown in much
closer proximity to the ethanol producing facility and will not be traded via arbitrage. (2119.1,
P-4)
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated
Comment:
The commenter (2511.1) noted that EPA is proposing an overly burdensome administrative
requirement for traceability that will have little, if any, benefit. EPA's proposed feedstock
certification provisions effectively require renewable fuel producers to segregate or identify
preserve commodity crops.
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that EPA improperly placed a substantial and undue burden of
proving renewable biomass requirement on renewable fuel producers. The statute does not
impose an affirmative duty on renewable fuel producers to use renewable biomass. The
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commenter noted that RINs are not a statutory requirement, and no where in the statute does
Congress indicate an intent to impose such stringent regulations on renewable fuel producers.
Renewable fuel producers do not have access to the type of information needed to determine
compliance with the existing cropland definition. Renewable fuel producers will need to rely on
the feedstock providers, who are either likely to impose substantial costs to obtain and provide
the information or are not likely to provide the information at all, unless EPA requires them to do
so. (2329.1, p.79)
The commenter also noted that the majority of feedstock is obtained from grain elevators or
other centralized locations. These terminals receive feedstock from numerous sources, which are
mixed together, and sell the feedstock to numerous sources. A recent study showed that 62
percent of corn from Iowa farms went to a grain elevator. Tun-Hsiang (Edward) Yu and Chad
Hart, Impact of Biofuel Industry
Expansion on Grain Utilization and Distribution: Preliminary Results of Iowa Grain and Biofuel
Survey, at 5 (2009), available at
ttp://ageconsearch.umn.edu/bitstream/46847/2/Impact%20of%20Ethanol%20Industry%20Expan
sion%20on%20Corn%20Utilization%20and%20Distribution-Final.pdf. The commenter believes
that EPA's proposal does not address the crucial fact that would make it virtually impossible for
renewable fuel producers to seek and obtain the required documentation. The commenter
believes that EPA has failed to consider this important aspect of the problem, which renders the
proposal arbitrary and capricious. (2329.1, p.79) [[See Docket Number 2329.1, pp.79-81 for a
detailed discussion of this issue]]
The commenter believes that EPA cannot impose such substantial regulatory requirements on
these producers. RFS does not give EPA broad authority to regulate renewable fuel producers,
just to implement the requirements for the fuels under the program. EPA must justify its
regulation under other Clean Air Act authority, but EPA has no such authority under the Clean
Air Act. (2329.1, pp.81-82)
The commenter believes that the proposal unfairly treats crop-based renewable fuel. EPA needs
to apply a similar presumption as it did for other types of renewable fuel. While the RFS
mandates place sufficient incentives on renewable fuel producers to ensure that the feedstock
used meets the definition of renewable biomass, the feedstock suppliers are the only ones in a
position to confirm that their feedstock meets the Act's requirements, and renewable fuel
producers should be able to rely on their representations. Except for an incorrect reading of the
statute, EPA provides no explanation as to why renewable fuel producers should not be allowed
to rely on certifications by feedstock producers for the existing cropland and planted tree
requirements, as with other feedstocks. At a minimum, the commenter believes that EPA should
provide a good faith defense for ethanol producers. (2329.1, p.83)
The commenter (2329.1) believes that EPA should provide a presumption that domestic crops
used as biofuel feedstock in the Final Rule, focusing its enforcement actions against those with
knowledge that they are using feedstock that does not meet the definition. (2329.1, p.84) [[See
Docket Number 2329.1, pp.84-85 for a detailed discussion of this issue]]
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Document No.: EPA-HQ-OAR-2005-0161-2154
Organization: ConocoPhillips
Comment:
The commenter (2154.1) noted that the recordkeeping requirements concerning demonstration
that feedstocks meet the definition of renewable biomass appear to be very onerous. The sheer
volume of documentation that would have to be passed from feedstock producers to renewable
fuel producers is staggering. EPA should give serious consideration to ways to simplify this
requirement, particularly for domestic feedstocks. (2154.1, p.8)
Document No.: EPA-HQ-OAR-2005-0161-2529
Organization: National Grain and Feed Association
Comment:
The commenter (2529) is not aware that the proposed record keeping system presently exists and
believes that any requirement mandated by EPA to create such a system is unjustifiable and
would place an unreasonable administrative burden on renewable fuel feedstock suppliers.
The commenter particularly emphasizes that due to RIN and supplier recordkeeping
requirements, grain elevators simply could choose not to participate in the renewable biomass
program, denying the use of these stocks to the renewable fuels market. This is because such
facilities receive feedstock from numerous sources, which are commingled together, and then
sell the feedstock to numerous sources. Such segregation would be extremely costly and
burdensome because it would require identity preserved storage, and would be necessary to
ensure that the grain elevator could lawfully sell its commingled feedstock as a renewable
biomass to a fuel ethanol producer.
Instead of imposing costly and burdensome inefficiencies on biofuels producers and their
suppliers, the NGFA urges EPA to work with US DA to ensure that substantial amounts of new
land are not being cleared to comply with the EISA requirements.
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (Docket number 2249.2) believes that the proposal related to the EISA
renewable biomass definition is arbitrary and capricious and should be eliminated. The
commenter does not support EPA's proposal to address the "existing cropland" requirement nor
is EPA's definition of "existing agricultural land" consistent with the statute. In addition, EPA's
approach ignores important aspects of the problem and therefore is arbitrary and capricious and
the proposal also creates unnecessary and overly burdensome administrative requirements. The
Agency's approach essentially seeks to "identify preserve" crops and should be rejected. The
commenter suggests alternative proposals to address "existing agricultural land" including
establishing baseline production of eligible. [[Docket number 2249.2, pp. 17-26]]
[[See docket number 2249.2, pp. 17-26 for the commenters" comprehensive discussion of EPA's
proposal related to definitions of "existing cropland." Also see docket number 2249.1, pp. 3-4
and docket number 2232.1, Attachment 3 for additional discussion.]]
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The commenter also believes that EPA should allow renewable fuel producers to rely on
certifications by feedstock providers for all renewable biomass, including planted crops and crop
residues and planted trees and tree residues. [[Docket number 2249.2, p. 28]]
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that the recordkeeping requirements concerning demonstration
that feedstocks meet the definition of renewable biomass are very onerous. Some simplifying
assumptions should be made and applied that would significantly reduce the recordkeeping
burden. The commenter noted that there are certain types of feedstocks that could be declared
renewable by list. These would include those that clearly come from agricultural lands such as
corn and soybeans. The burden of having every farmer provide documentation that then must
get passed along to the renewable fuel producer seems great when essentially all of certain types
of crops would fall into the renewable biomass category. The commenter encourages EPA to
consider ways to reduce the burden associated with demonstrating feedstock classification.
(2124.1, p.32)
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter believes that Section 80.1451 contains onerous documentation requirements for
renewable fuel producers. For each batch of renewable fuel produced, the renewable fuel
producer would be required to maintain records to establish that the feedstock used meets the
definition of renewable biomass as that term is defined in section 80.1401. [[Docket number
2393.1, p. 42]]
Document No.: EPA-HQ-OAR-2005-0161-2472
Organization: Valero Energy Corporation (Valero)
Comment:
The commenter (2472) strongly encourages EPA to consider ways to reduce the burden
associated with demonstrating feedstock classification. The proposed recordkeeping
requirements concerning demonstration that feedstocks meet the definition of renewable biomass
are very onerous. Some simplifying assumptions should be made and applied that would
significantly reduce the recordkeeping burden. For example, certain types of feedstocks should
be declared renewable by list. The burden of having every farmer provide documentation that
then must get passed along to a grain elevator or the renewable fuel producer seems great when
essentially all of certain types of crops would fall into the renewable biomass category. [[Docket
number 3472.1, p. 7]]
Document No.: EPA-HQ-OAR-2005-0161-2343
Organization: Osage Bio Energy
Comment:
The commenter (2343) states that the proposed rule requiring producers to certify feedstock as
renewable biomass is cumbersome, at best, and will create a difficult administrative burden. The
commenter believes that EPA should consider revising the rule to either eliminate or simplify the
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requirement to certify feedstock as renewable biomass, or; establish an exemption for biofuels
produced from winter grain crops. [[Docket number 2343, pp. 5 and 7]] [[See docket number
2343, pp. 5-7 for further discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2363
Organization: Ag Processing Inc.
Comment:
The commenter (2363) recommends that instead of requiring mass amounts of paperwork, audits
and segregation for the 99% of the biomass produced for renewable fuel production in
compliance with the "non-native" and "actively managed" standards, EPA should instead focus
on the 1% that might not be in compliance. The commenter states that renewable fuel producers
and grain handlers could be supplied an inventory of land in their region/or nationwide that has
been determined to not be in compliance or at risk. EPA can use satellite information and
presently available maps to identify virgin lands in the United States. Owners of such land are
also easily identified and could be notified. Similarly, renewable fuel producers could be given
such maps and ownership records. The commenter believes that such information would be
sufficient to warn the system not to take biomass from the operator of such land unless he or she
verifies that they have segregated the harvest from such non-compliant land. [[Docket number
2363.1, p. 10]]
Document No.: EPA-HQ-OAR-2005-0161-2487
Organization: Abengoa Bioenergy Corporation
Comment:
The commenter (2487) believes that the proposal puts a heavy and unwarranted burden on
feedstock providers by requiring proof that croplands used to create biofuel feedstock were in
existence prior to EISA becoming law in 2007. But there's no risk that new lands will be cleared
for feedstock for biofuel production and the rule would mean extra costs and inconveniences for
feedstock providers. [[Docket number 2487, p. 1]]
Document No.: EPA-HQ-OAR-2005-0161-1975
Organization: Canadian Bioenergy Corporation
Comment:
The commenter (1975) believes that EPA should delay the "chain of supply" certification until a
less burdensome tracking program is available. Allowing a delay in this chain of supply
certification for feedstock land restrictions regulation until a cost benefit analysis is conducted on
behalf of the biofuel producer to implement this section. The primary feedstock used for
biodiesel production has been a fungible commodity. According to EPA's proposed rule,
feedstock would suddenly be required to be containerized and not blended or mixed with the
same grain from different fields from, perhaps, the same farm as part of the tracking program.
This cost burden is prohibitive to the entire supply chain and is a regulatory structure that would
stifle production agriculture. [[Docket number 1975, p. 1]]
Document No.: EPA-HQ-OAR-2005-0161-2526
Organization: Coskata
Comment:
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The commenter (2526) urges the EPA to adopt an inclusive and attainable approach towards the
Renewable Biomass Definition and recordkeeping requirements. This will allow the cellulosic
biofuels industry to fully achieve its potential for reducing greenhouse gases. The commenter
makes the following points:
EPA should opt for the least onerous approach towards enforcement of the land-use
requirement - voluntary certification combined with satellite surveillance.
Land use should allow innovations that enhance land's carbon sequestration. [[Docket
number 2526.1, pp. 1-2]] [[Also see docket number 2526.1, pp. 9-11 for further discussion of
this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2244
Organization: Altrius Group. LLC
Comment:
Regarding verification of eligible renewable biomass, the commenter (2244) is concerned that by
limiting the options for verification to a small set of accepted records, farmers in some sectors
will benefit, while others may be unable to qualify because they do not have the right types of
evidence. This is particularly true in the case of rangelands, which have fewer formal
management practices in place and, therefore, fewer and different forms of evidence than
cultivated lands. Furthermore, the types of documents EPA specifies may not be commonly used
overseas, which would unfairly disadvantage producers in foreign countries who should receive
equal treatment with respect to verification. The commenter supports the alternative approach
EPA raises in its Proposed Rule, in which producers certify on their production reports that their
feedstocks meet (or do not meet) the definition of renewable biomass and are required to
maintain records to support their claims, but without specifying what those records would have
to include, in order to grant maximum flexibility to producers to demonstrate their claims.
[[Docket number 2244.1, pp. 4-5]]
Document No.: EPA-HQ-OAR-2005-0161-2612
Organization: Citizen (sample of 478 comment letters received from mass comment
campaign sponsored by American Soybean Association)
Comment:
The commenter believes the proposed feedstock certification requirements are unnecessary and
onerous.
Our Response:
In light of the comments received on the proposed renewable biomass recordkeeping
requirements and implementation options, EPA sought assistance from USDA in determining
whether existing data and data sources might suggest an alternative method for verifying
compliance with renewable biomass requirements associated with the use of domestic crops and
crop residue for renewable fuel production. Taking into consideration extensive publicly
available data on agricultural land available from USDA and USGS as well as expected
economic incentives for feedstock producers, EPA has determined that an aggregate compliance
approach is appropriate for planted crops and crop residue from the United States.
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Under the "aggregate compliance approach," EPA is determining for this rule the total
"existing agricultural land" in the U.S. at the enactment date of EISA. EPA will monitor total
agricultural land annually to determine if national agricultural land acreage increases above this
2007 national aggregate baseline Feedstocks derived from planted crops and crop residues will
be considered to be consistent with the definition of renewable biomass and renewable fuel
producers using these feedstocks will not be required to maintain specific renewable biomass
records as described above unless and until EPA determines that the 2007 national aggregate
baseline is exceeded. If EPA finds that the national aggregate baseline is exceeded, individual
recordkeeping and reporting requirements as described below will be triggered for renewable
fuel producers using crops and crop residue. We are confident that the aggregate approach will
effectively implement the EISA renewable biomass provisions related to crops and crop residue,
while also easing the burden for certain renewable fuel producers and their feedstock suppliers
vis a vis verification that their feedstock qualifies as renewable biomass.
There are four main factors supporting the aggregate compliance approach we are taking
for planted crops and crop residue. First, EPA is using data sets that allow us to obtain an
appropriately representative estimate of the agricultural lands in the U.S. that are available under
EISA for the production of crops and crop residue as feedstock for renewable fuel production.
Second, USDA data indicate an overall trend of agricultural land contraction. These data,
together with EPA economic modeling, suggest that 2007 aggregate baseline acreage should be
sufficient to support EISA renewable fuel obligations and other foreseeable demands for crop
products, at least in the near term, without clearing and cultivating additional land. Third, EPA
believes that existing economic factors for feedstock producers favor more efficient utilization
practices and bringing existing agricultural land into crop production rather than converting non-
agricultural lands to crop production. Fourth, if, at any point, EPA finds that the total amount of
land in use for the production of crops including crops for grazing and forage is equal or greater
than 397 acres (i.e., within 5 million acres of EPA's established 402 million acre baseline), EPA
will conduct further investigations to evaluate whether the presumption built into the aggregate
compliance approach remains valid. Lastly, EPA has set up a trigger mechanism such that in the
event that EPA finds in the future that there are more than the baseline amount of acres of
cropland, pastureland and CRP land, then renewable fuel producers will be required to meet the
same individual or consortium-based recordkeeping and reporting requirements applicable to
other feedstocks used in the RFS2 program. Taken together, these factors give EPA high
confidence that the aggregate compliance approach for domestically grown crops and crop
residue will effectively implement the statutory obligation that feedstock volumes used to meet
the renewable fuel requirements also comply with the definition of renewable biomass.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2360
Organization: Archer Daniels Midland Company (ADM)
Comment:
The commenter (2360.1) noted that EPA stated in the proposed rule the possibility of requiring a
certification program for feedstocks that are used in renewable fuel production. However, EPA
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did not provide a clear method to implement this certification despite the significant challenges it
would present. (2360.1, p.6)
Our Response:
EPA agrees that the proposal lacked specificity regarding certain elements of the
proposed feedstock verification requirements. In response to comments, and upon further
deliberation within EPA, EPA has modified the proposed requirements considerably for the final
rule, and has established detailed regulations explaining the types of documents and
certifications to be obtained, the parties who must generate them, how and when reports related
to feedstock verification are provided to EPA, as well as associated recordkeeping requirements.
3.3.3.4 Tree Plantations and Forestland
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2156
Organization: Georgia Forestry Commission
Comment:
The commenter (2156) is most concerned about the proposed idea of certifying renewable
biomass. The commenter disagrees that documentation of tree plantations already exist on the
many forestland tracts involved in the supply chain, as suggested by EPA and recommends that
monitoring land use at regional/state level on yearly/biannually may provide the best quality
assurance. The commenter (2156) also recommends additional thought, research, and discussion
on this topic. (2156.1.docx, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2173.1
Organization: National Association of Forest Owners (NAFO)
Comment:
The commenter believes that a true chain-of-custody tracking system is an overly burdensome
verification option for forest-derived biomass.
Document No.: EPA-HQ-OAR-2005-0161-2349
Organization: Kentucky Division of Forestry
Comment:
The commenter (2349) does not believe that chain-of-custody tracking system would be
efficient. The commenter suggests EPA to engage forest industry to develop a flexible tracking
system based on state approved management plan to track use of slash associated with logging
residues. (2349.pdf, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2517
Organization: National Association of State Foresters
Comment:
The commenter feels responsibility of verifying biomass should reside with the renewable fuel
producer and should include flexibility for producers and suppliers to choose among different
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verification tools. The system should take into consideration that most forest land ownership in
the U.S. is fragmented and held in small, private ownerships, and that brokers will aggregate
supply from multiple sources, often in the form of chipped material, making a chain-of-custody
system difficult to implement.
Document No.: EPA-HQ-OAR-2005-0161-2472
Organization: Valero Energy Corporation (Valero)
Comment:
Regarding EPA's proposed tracking requirements for renewable biomass the commenter does
not believe that renewable fuel producers should be required to track and document the origin of
woody biomass and whether a particular tree plantation has been "actively managed." EPA
should consider the use of satellite imagery to verify that current tree plantation land has been
actively managed since December 19, 2007, and that renewable fuel is indeed produced using
"renewable biomass" as defined by EPA (planted trees and slash from tree plantations located on
non-federal land that have been actively managed since December 19, 2007). Alternatively, if
EPA requires renewable fuel producers to verify qualified renewable biomass from planted trees,
the commenter agrees with EPA's proposal to allow substantiation of "active management."
[[Docket number 2472.1, pp. 11-12]]
Our Response:
EPA does not believe that the use of satellite imagery would effectively implement
EISA's renewable biomass requirements with respect to woody biomass. Satellite imagery
cannot identify the location from which a particular load of feedstock is derived. Although the
final rule establishes an aggregate compliance approach for domestic planted crops and crop
residues, EPA was not able to identify a comparable approach that would provide assurance
regarding compliance with renewable biomass requirements for woody biomass that does not
require tracking and documentation of the type that the comments disapprove of. However, the
final rule does provide an option for renewable fuel producers to utilize an alternative tracking
system involving the use of an independent third party to conduct comprehensive annual
compliance surveys. EPA believes that this alternative approach could facilitate compliance for
some producers, and is prepared to assist interested parties in developing a plan for such an
alternative approach.
3.3.3.5 Verification Requirements for Non-Cultivated Feedstocks
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2149
Organization: Dynamic Fuels, LLC
Comment:
The commenter (2149.1) believes that any approach EPA settles on to ensure that RINs are
properly generated should only be applied for feedstocks directly cultivated from land. The four
approaches described by EPA for ensuring that RINs are properly generated are discussed in the
context of the land restrictions. However, there are feedstocks that qualify as renewable biomass
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that are not cultivated from land, such as animal fats and waste yellow grease. The commenter
believes that EPA should make it clear that these feedstocks and others not directly cultivated
from land are not subject to the requirements under the verification program. (2149.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2364
Organization: Tyson Foods, Inc.
Comment:
The commenter (2364.1) believes that any approach EPA settles on to ensure that RINs are
properly generated should only be applied for feedstocks directly cultivated from land. The
commenter noted that the four approaches described by EPA for ensuring that RINs are properly
generated are discussed in the context of the land restrictions. However, there are feedstocks that
qualify as renewable biomass that are not cultivated from land, such as animal fats and waste
yellow grease. The commenter believes that EPA should make it clear that these feedstocks and
others not directly cultivated from land are not subject to the requirements under the verification
program. (2364.1, p.4)
Our Response:
While EISA is more explicit about the origins of feedstocks cultivated from land than it is
about non-cultivated feedstocks, it nonetheless limits renewable fuel feedstocks to those listed
under the definition of "renewable biomass." For this reason, both the final RFS2 regulations
require renewable fuel producers to obtain certifying documentation from their feedstock
suppliers for any non-cultivated feedstocks, including animal fats and waste grease, that they
claim qualifies as renewable biomass. This approach will help to ensure that RINs are properly
generated for renewable fuel produced from all types of feedstocks, not just those cultivated
from land.
3.3.3.6 Alternative Compliance Approaches
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2549
Organization: Triton Energy LLC
Comment:
The commenter (2549.1) supports the proposal whereby the chain of custody requirement is
eliminated by creating instead a baseline of land use. The commenter noted that the record
keeping requirements outlined under §80.1451 (6) will either eliminate most small biofuel
producers or prevent any biofuel producer that uses an agriculture crop product that is widely
traded in the market to be able to meet the recording requirements. The commenter believes that
the Recordkeeping Requirements must be modified or few to no biofuel producers will be able to
meet the requirements. (2549.1, p.6)
Document No.: EPA-HQ-OAR-2005-0161-2172
Organization: Minnesota Soybean Processors
Comment:
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The commenter states that EPA should recognize that soybeans produced inside the U.S. by U.S.
soybean growers are being grown on land cultivated for over 100 years. It is unreasonable to
believe that land under cultivation for well over 100 years will cause new land use change.
Document No.: EPA-HQ-OAR-2005-0161-2100
Organization: American Soybean Association
Comment:
The commenter believes data from USDA should demonstrate that no new acres are being
planted in the United States. There are laws and regulations already in place that prevent farmers
from breaking new land if they participate in the federal crop programs administered by USDA.
These conservation compliance and enforcement mechanisms already exist at USDA. The
existing USDA rules, and the information collected by USDA in their administration of those
rules, should be sufficient for EPA to ensure that the domestic feedstock being used in biodiesel
production is from existing and eligible cropland.
Document No.: EPA-HQ-OAR-2005-0161-2463
Organization: National Farmers Union
Comment:
NFU does not believe that this level of burden is required to ensure new lands are not being
converted to crop production. Farmers already have to report planted acres to USDA's Farm
Service Agency. EPA should use existing USDA data to establish a baseline level of production
that can be compared against the eligible lands established on December 19, 2007. On a yearly
basis, EPA can compare actual feedstock usage for ethanol, as reported by renewable fuels
producers against USDA data of feedstock production. This will validate that new domestic
lands are not being cleared to produce feedstocks such as corn for fuel production.
Document No.: EPA-HQ-OAR-2005-0161-2516
Organization: Imperium Renewables
Comment:
The commenter believes the EPA requirements to comply with the existing cropland requirement
is overly burdensome. Given U.S. land use requirements, increasing yields and production
efficiencies, and the availability of existing cropland, it is highly unlikely that new lands in the
U.S. will be cleared for purposes of RFS.
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter views the enforceability of land restrictions as particularly problematic and
states that considerable flexibility must be afforded renewable producers to keep such restrictions
from preventing the production of renewable fuels with RINs. The commenter suggests that the
agricultural community and renewable fuel producers may want to consider something akin to
the RFC Association Survey approach to demonstrate to EPA that such restrictions are being
followed. A representative survey of feedstock deliveries could be audited on a periodic basis to
confirm general adherence to the land restrictions without having to require the pedigree of each
and every feedstock delivery to a renewable producer to be proved. The commenter believes the
latter approach to be unworkable and likely to result in the production of significant amounts of
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renewable fuel that will not be able to generate RINs simply due to a lack of documentation on
feedstock pedigree. This will frustrate not only renewable producers, but also obligated parties
and EPA in terms of having a workable RFS2 program. [[Docket number 2393.1, p. 43]]
The commenter suggests that EPA provide a phase-in period of several years where-in current
renewable feedstock sources are deemed to be compliant with the feedstock land restrictions.
This period will provide the agricultural community and renewable producers with adequate time
to design and implement a survey program that meets the land restriction requirement to EPA's
satisfaction. Without such a phase-in period, EPA may be forced to disqualify RINs and
renewable fuels that were purchased in good faith. [[Docket number 2393.1, p. 43]]
[[See docket number 2393.1, pp. 42-44 for detailed discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2173.1
Organization: National Association of Forest Owners (NAFO)
Comment:
The commenter supports the alternative of bringing together renewable fuel producers and
feedstock suppliers to develop a reliable and efficient quality assurance program.
Document No.: EPA-HQ-OAR-2005-0161-2472
Organization: Valero Energy Corporation (Valero)
Comment:
The commenter (2472) believes that renewable fuel producers should not be required to track
renewable biomass. The commenter strongly supports shifting the responsibility for land use and
"renewable biomass" verification from renewable fuel producers to the regulating agency (EPA).
The commenter suggests that EPA consider the use of satellite imagery to verify that current land
use has not changed substantially from December 19, 2007, and that today's renewable fuel is
indeed produced using "renewable biomass" as defined by EPA (biomass produced from land
cultivated before December 19, 2007). [[Docket number 2472.1, p. 6]]
The commenter explains that currently in the U.S., very little land that was not previously
cultivated is being used. Or is likely to be used in the future, to generate feedstock for renewable
fuels. The majority of deforestation in the U.S. is due to the expansion of urban areas into
uncultivated or forested areas. Moreover, the majority of new land being farmed is land coming
out of the CRP program. The commenter finds it nearly impossible to envision a case where the
vast majority of renewable fuel produced in the U.S. would not be produced from renewable
biomass. Furthermore, EPA fails to take into account com growers' ability to continually
produce a larger supply of com, even on shrinking acreage, through increased yields. The
commenter adds that alternatively, if this is not acceptable to EPA, then EPA should consider
other options to facilitate the ability of renewable fuel producers to demonstrate that the fuels
that they produce meet the definition of "renewable biomass." [[Docket number 2472.1, p. 6]]
[[See docket number 2472.1, pp 6-7 for further discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2136
Organization: Iowa Renewable Fuels Association (IRFS)
Comment:
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The commenter (2136) supports Congressional intent that biofuels feedstock should not come
from virgin prairie and similar lands; however, a workable and cost-effective system to ensure
this requirement is met must be incorporated into the final rule. The commenter urges the
Agency to work with the USDA to use an acreage baseline in which feedstock verification is
only required if the baseline acreage is exceeded. Even in that case, the Agency should take a
state-by-state or regional approach so that only the area realistically impacted would have to
verify the lineage of its feedstocks. [[Docket number 2136.1, pp. 8-9]]
Document No.: EPA-HQ-OAR-2005-0161-2471
Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter (2471.1) believes that EPA should provide clear guidance to producers that
propose certain documentation or records to demonstrate that their fuel meets the qualifying
criteria. There are likely various existing forms of documentation upon which EPA can rely and,
thus, limit the potential documentation burden created by EISA and the proposed RFS2
regulations. (2471.1, p. 13)
Document No.: EPA-HQ-OAR-2005-0161-2369
Organization: New Generation Biofuels (NGBF)
Comment:
The commenter (2369) supports the proposal whereby the chain of custody requirement is
eliminated by creating instead a baseline of land use. Marginal and strip mine lands should be
taken into consideration in the baseline. The commenter adds that record keeping requirements
outlined under §80.1451 (6) will either eliminate most small biofuel producers or prevent any
biofuel producer that uses an agriculture crop product that is widely traded in the market to be
able to meet the recording requirements. The commenter believes that creating such a
requirement is untenable and it will be overly expensive to create multiple crushing and
processing facilities. Alternatively, the chain of custody requirement will most likely cause the
price of feedstocks to increase, thereby having the effect of creating higher energy costs. The
commenter contends that the requirement is tantamount to a closed loop biomass system of
which very few have ever been successfully and economically or sustainably maintained.
[[Docket number 2369.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-1015
Organization: Renewable Energy Group
Comment:
The commenter (1015) states that the primary feedstock used for biodiesel production has always
been a fungible commodity. To overlay an extensive certification process for purposes of
EISA's definition of "renewable biomass", will necessitate a procedure that may require
feedstock to be containerized and not blended or mixed with the same grain from different fields
from perhaps the same farm. The increased cost will rule out market competitiveness and
facilitate a regulatory structure that would stifle production agriculture. [[Docket number 2123.1,
p. 5]]
The commenter adds that a second approach that would simplify and yet ensure compliance is to
construct new data points between known data points, interpolation. In this case, the known data
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points are the total production acreage by feedstock and the RFS2 gallon requirements. The
number of acres needed for fuel feedstock production, taking into account waste oils, can then be
calculated. Measures can then be taken if the number of fuel feedstock acres exceeds land
restriction criteria. [[Docket number 2123.1, pp. 5-6]]
Document No.: EPA-HQ-OAR-2005-0161-2010
Organization: SoyMor Biodiesel, LLC
Comment:
The commenter (2010) states that the primary feedstock used for biodiesel production has always
been a fungible commodity. To overlay an extensive certification process for purposes of EISA's
definition of "renewable biomass", will necessitate a procedure that may require feedstock to be
containerized and not blended or mixed with the same grain from different fields from perhaps
the same farm. The increased cost will rule out market competitiveness and facilitate a
regulatory structure that would stifle production agriculture. [[Docket number 2010.1, p. 5]]
The commenter adds that a second approach that would simplify and yet ensure compliance is to
construct new data points between known data points, interpolation. In this case, the known data
points are the total production acreage by feedstock and the RFS2 gallon requirements. The
number of acres needed for fuel feedstock production, taking into account waste oils, can then be
calculated. Measures can then be taken if the number of fuel feedstock acres exceeds land
restriction criteria. [[Docket number 2010.1, p. 5]]
Document No.: EPA-HQ-OAR-2005-0161-2011
Organization: Western Dubuque Biodiesel LLC
Comment:
The commenter (2011) states that the primary feedstock used for biodiesel production has always
been a fungible commodity. To overlay an extensive certification process for purposes of
EISA's definition of "renewable biomass", will necessitate a procedure that may require
feedstock to be containerized and not blended or mixed with the same grain from different fields
from perhaps the same farm. The increased cost will rule out market competitiveness and
facilitate a regulatory structure that would stifle production agriculture. [[Docket number 2010.1,
p. 5]]
The commenter adds that a second approach that would simplify and yet ensure compliance is to
construct new data points between known data points, interpolation. In this case, the known data
points are the total production acreage by feedstock and the RFS2 gallon requirements. The
number of acres needed for fuel feedstock production, taking into account waste oils, can then be
calculated. Measures can then be taken if the number of fuel feedstock acres exceeds land
restriction criteria. [[Docket number 2011.1, pp. 5-6]]
Document No.: EPA-HQ-OAR-2005-0161-2013
Organization: Central Iowa Energy, LLC
Comment:
The commenter (2013) states that the primary feedstock used for biodiesel production has always
been a fungible commodity. To overlay an extensive certification process for purposes of
EISA's definition of "renewable biomass", will necessitate a procedure that may require
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feedstock to be containerized and not blended or mixed with the same grain from different fields
from perhaps the same farm. The increased cost will rule out market competitiveness and
facilitate a regulatory structure that would stifle production agriculture. [[Docket number 2010.1,
p. 5]] The commenter adds that a second approach that would simplify and yet ensure
compliance is to construct new data points between known data points, interpolation. In this
case, the known data points are the total production acreage by feedstock and the RFS2 gallon
requirements. The number of acres needed for fuel feedstock production, taking into account
waste oils, can then be calculated. Measures can then be taken if the number of fuel feedstock
acres exceeds land restriction criteria. [[Docket number 2013.1, pp. 5-6]]
Document No.: EPA-HQ-OAR-2005-0161-2016
Organization: Malaysian Palm Oil Board (MPOB)
Comment:
The commenter (2016.1) requests that any certification system must not be administratively
burdensome. The suggestion to have a baseline level is worth further consideration if it can
reduce the administrative burden. (2016.1, pp.2-3)
Document No.: EPA-HQ-OAR-2005-0161-2361
Organization: Indonesian Palm Oil Commission
Comment:
The commenter (2361) suggests having a baseline if it reduces the burden and suggests that the
requirements imposed on foreign producers should not be more onerous than those imposed on
local producers. Foreign producers whose raw material is not for generating RINs must have an
option not to provide documentary evidence of compliance or certification. Similarly, local
renewable fuel producers should not be compelled to demonstrate origin of feedstocks if such
biofuels are not intended to generate RINs. (2361.1.pdf, p.2, 3)
Document No.: EPA-HQ-OAR-2005-0161-1033
Organization: Poet Ethanol Products
Comment:
The commenter (1033.1) proposes that EPA set a Renewable Biomass Allowance for Renewable
Fuel Producers prior to the start of each calendar year in much the same way that they set a
Renewable Volume Obligation (RVO) for Obligated Parties. Since each Renewable Fuel
Producer is expected to submit a Production Forecast on an annual basis to assist EPA in
determining the RVO for each category of renewable fuel, the volume and type of Renewable
Biomass expected to be used in the production of the fuel would be known to EPA prior to the
beginning of each calendar year. (1033.1, p.l)
The commenter believes that for situations where the volume of Renewable Biomass forecasted
to be consumed is greater than the amount that could be reasonably produced on Existing
Agricultural Lands, then a rationing or allocation of the allowances would have to be
implemented and any purchase of feedstock in excess of the Renewable Biomass Allowance
would be subject to the documentation procedures identified by EPA at that time. (1033.1, p.2)
Our Response:
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After considering these comments and engaging in extensive dialogue with USDA, we
are finalizing reporting and recordkeeping requirements comparable to those in the approach we
discussed in the proposed rule for all categories of renewable biomass with the exception of
planted crops and crop residue from agricultural land in the United States, which will be covered
by the aggregate compliance approach discussed in Section II.B.4.c.iii of the preamble. Under
the aggregate compliance approach, EPA has determined the total amount of "existing
agricultural land" in the U.S. at the enactment date of EISA, which is 402 million acres. EPA
will monitor total agricultural land annually to determine if national agricultural land acreage
increases above this 2007 national aggregate baseline. Feedstocks derived from planted crops
and crop residues will be considered to be consistent with the definition of renewable biomass
and renewable fuel producers using these feedstocks will not be required to maintain specific
renewable biomass records as described below unless and until EPA determines that the 2007
national aggregate baseline is exceeded. If EPA finds that the national aggregate baseline is
exceeded, individual recordkeeping and reporting requirements will be triggered for renewable
fuel producers using crops and crop residue. EPA believes that the aggregate approach, though
different in details than some other alternatives suggested by commenters, will address the
commenters' primary concerns that verification procedures for domestic planted crops should be
substantially simplified from those that EPA proposed.
EPA has not identified similar simplified mechanisms that would be applicable to
feedstocks other than domestic crops and crop residues, and is therefore finalizing an individual
verification process that is similar in many respects to that proposed. However, EPA is also
finalizing as an option an alternative approach in which EPA allows renewable fuel producers
and renewable fuel feedstock producers and suppliers to develop a quality assurance program for
the renewable fuel production supply chain, similar to the model of the Reformulated Gasoline
Survey Association. While individual renewable fuel producers may still choose to comply with
the individual renewable biomass recordkeeping and reporting requirements rather than
participate in a quality assurance program, we believe that this preferred alternative could be less
costly than an individual compliance demonstration, and it would add a quality assurance
element to RFS2.
3.3.4 Requiring a Demonstration that Feedstocks Do Not Meet the Renewable Biomass
Definition Prior to Producing Renewable Fuel Without RINs
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that the regulations should limit the ability of producers and
importers to produce or import renewable fuel that does not have RINs. The RFS2 regulations
should also take into account the existence of "RIN-less" renewable fuel in the RFS2 program.
The commenter understands that the EPA is considering removing the requirement that
renewable fuel producers and importers demonstrate that renewable fuel was not made from
renewable biomass. If this is done, demonstrating that renewable fuel was made from renewable
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biomass will in effect be optional and there will be renewable fuel with no associated RINs or
"RIN-less" renewable fuel in the RFS2 program. (2124.1, p.36) [See Docket Number 2124.1,
pp.36-37 for a more detailed discussion of this issue]
Document No.: EPA-HQ-OAR-2005-0161-2173.1
Organization: National Association of Forest Owners (NAFO)
Comment:
The commenter believes the proposed requirement for the renewable fuel producer to trace the
source of their feedstock even if they do not generate RINs for that fuel is unnecessarily
burdensome and impossible to satisfy.
Document No.: EPA-HQ-OAR-2005-0161-2310
Organization: Low Carbon Synthetic Fuels Association (LCSFA)
Comment:
EPA proposes to require that all renewable fuel producers document the origin of their
feedstocks regardless of whether they plan to generate RINs, reasoning that all eligible fuel will
be needed to meet RFS2 mandates. While the commenter (2310) agrees that all producers that
want to generate RINs for their fuel should be required to document the origin of their
feedstocks, they believe that the market price for RINs should be a sufficient inducement to
encourage all fuel producers that produced their fuel with eligible feedstocks to generate RINs
for those volumes. [[Docket number 2310.1, p. 17]]
Document No.: EPA-HQ-OAR-2005-0161-2317
Organization: National Corn Growers Association (NCGA)
Comment:
The commenter (2317) urges EPA to streamline the requirements for verification of renewable
biomass feedstock and the requirements that apply to feedstocks used to generate non-RIN fuel.
[[Docket number 2317.1, p. 36]] [[See docket number 2317.1, pp. 36-43 for extensive discussion
of this issue.]]
Our Response:
EPA realizes that the implication of these proposed requirements is that renewable fuel
producers would be caught in the untenable position of being forced to participate in the RFS2
program (register, keep records, etc.) even if they are unable to generate RINS because their
feedstocks do not meet the definition of renewable biomass. After considering the comments
received, EPA has determined that this requirement would be overly burdensome and
unreasonable for producers. The burden stems from the requirement that producers prove that
their feedstocks do not qualify if they are not generating RINs. If the data did not exist or could
not be obtained, producers could not produce the fuel, even if no RINs would be generated.
Thus, for the final rule, EPA is requiring only that producers that do generate RINs have the
requisite records (as discussed in section II.B.4.C.L of this preamble) documenting that their fuel
is produced from feedstocks meeting the definition of renewable biomass. Non-RIN generating
producers need not maintain any paperwork related to their feedstocks and their origins.
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3.3.5 Use of Data from USDA Programs
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2302
Organization: UC Berkeley - Energy Biosciences Institute
Comment:
The commenter [[2302]] states they strongly encourage EPA to allow USDA to certify
renewable biomass feedstocks. [[#2302 p.3]]
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated
Comment:
The commenter believes that certification of land that has been cleared or cultivated prior to
enactment should be documented by USDA or other governmental agencies such that individual
producers should not be required to have a document for every load of grain that is received into
the facility. (2511.1,p.5)
Document No.: EPA-HQ-OAR-2005-0161-2087
Organization: Ag Partners
Comment:
The commenter [[2087]] states that EPA already knows that 99 percent or more of the biomass
produced for renewable fuel production will meet the "non-native" and "actively managed"
standards of the law. EPA states that the onerous feedstock verification regimes proposed could
be streamlined and simplified if they had access to USDA information already collected from
producers. Surely the various bureaucracies of government can find a way to share what they
already know, [[see docket#2087 p. 1]]
Document No.: EPA-HQ-OAR-2005-0161-2000
Organization: Galva Holstein Ag, LLC
Comment:
The commenter [[2000]] states that EPA already knows that 99 percent or more of the biomass
produced for renewable fuel production will meet the "non-native" and "actively managed"
standards of the law. EPA states that the onerous feedstock verification regimes proposed could
be streamlined and simplified if they had access to USDA information already collected from
producers. Surely the various bureaucracies of government can find a way to share what they
already know, [[see docket#2000 p. 1]]
Document No.: EPA-HQ-OAR-2005-0161-2348
Organization: StateLine Cooperative
Comment:
The commenter (2348) noted that EPA already knows that 99 percent or more of the biomass
produced for renewable fuel production will meet the "non-native" and "actively managed"
standards of the law. EPA states that the onerous feedstock verification regimes proposed could
be streamlined and simplified if they had access to USDA information already collected from
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producers. The commenter believes that surely the various bureaucracies of government can find
a way to share what they already know. (2348, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2363
Organization: Ag Processing Inc.
Comment:
EPA states that the onerous feedstock verification regimes proposed could be streamlined and
simplified if they had access to USDA information already collected from producers. The
commenter (2363) suggests that the government bureaucracies find a way to share what they
already know. S imilarly, at the renewable fuel level, the IRS already performs audits plant to
make sure we produced the fuel for which tax incentives are applied.
Document No.: EPA-HQ-OAR-2005-0161-2515
Organization: Minnesota Department of Natural Resources (MnDNR)
Comment:
The commenter noted that the intent of the statutory language and supporting proposed rules to
limit biomass production to existing agricultural lands is good. However, NRCS land use
categories are not intended for this purpose. A better mechanism would be to build on existing
farm program mechanisms. If land cover is converted on lands subject to Sodbuster or Swamp
Buster provisions of the farm program, then these acres should be excluded from the RFS
market. This strategy would in fact better preserve those lands by creating a new market for the
forage-type biomass produced on those lands. (2515.1, pp.1-2)
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters noted that land use and cropping history data will be needed to verify land
eligibility. U.S. Department of Agriculture (USDA) can verify this land use and cropping
history for EPA or for the renewable biomass purchaser without violating producer privacy by
implementing a system similar to the one USDA has proposed to use with IRS to verify producer
compliance with the adjusted gross income requirements in the Farm Bill. If USDA determines
that it cannot share the needed information with EPA due to data privacy concerns, then EPA
must require all landowners who wish to produce renewable biomass to sign a limited data
privacy release waiver to allow EPA or the renewable biomass purchaser access to only the data
needed to determine eligibility. (2129.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2104
Organization: US Canola Association
Comment:
The commenter [[2104]] states that EPA does not provide a clear method to implement this
feedstock certification, and they must recognize the challenge it would present. These
conservation compliance and enforcement mechanisms already exist at USDA. The existing
USDA rules, and the information collected by USDA in their administration of those rules,
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should be sufficient for EPA to ensure that the domestic feedstock being used in biodiesel
production is from eligible cropland. EPA's proposal on the existing cropland requirement does
not have practical application and will not work in practice as part of the day-to-day operation of
producing biodiesel. Additionally, given U.S. land use requirements, increasing yields and
production efficiencies, and the availability of existing cropland, it is highly unlikely that new
lands in the U.S. will be cleared for purposes of the RFS. [[#2104.1 p.5-6]]
Document No.: EPA-HQ-OAR-2005-0161-1050
Organization: American Council for Ethanol (ACE)
Comment:
The commenter (2101.1) acknowledges that Congress inserted a provision into EISA that
requires renewable fuels to be produced from biomass harvested from agricultural land cleared
or cultivated at any time prior to EISA's passage, essentially prohibiting corn or other feedstocks
from new cultivation to be used in ethanol production. The commenter is concerned about the
bureaucratic red tape that may be associated with enforcement of this provision for both farmers
and ethanol producers, in addition to the limits this provision places on land owners. This
provision, while perhaps a well-intended if imperfect effort to achieve land conservation goals, is
unworkable and unenforceable. The commenter encourages EPA to rely upon reporting tools
currently used by USDA instead of creating a new set of regulations and reports to comply with
this provision. (2101.1, p. 15)
Document No.: EPA-HQ-OAR-2005-0161-2245
Organization: Illinois Corn Growers Association, et al.
Contributors to this comment letter include: Iowa Corn Growers Association, Iowa Soybean
Association, Illinois Soybean Association, Illinois Renewable Fuels Association, Kentucky
Soybean Association, Minnesota Soybean Growers Association, Missouri Corn Growers
Association, Missouri Soybean Association, Monsanto, the National Corn to Ethanol Research
Center, Nebraska Corn Board, Nebraska Soybean Association, Novozymes, Ohio Soybean
Association, South Dakota Soybean Association, University of Illinois Chicago, Energy
Resources Center, University of Illinois Champaign-Urbana plant breeding, animal nutrition and
agronomy, DuPont, Ethanol Technologies, John Deere, and the U.S. Grains Council
Comment:
The commenters (2245.1) believe that EPA should defer to existing USDA programs for farm
use verification instead of suggesting new crop identity demonstration systems. The
recommendation by EPA that a renewable fuel producer must be able to demonstrate that their
renewable fuel was derived from renewable biomass has the potential to add significant cost to
the renewable fuels channel. For the EPA to consider any other option for determining whether
or not non-agricultural land is being utilized outside of existing USDA procedures for farm use
verification, will add both cost and uncertainty to the channel. (2245.1, pp.29-30)
Document No.: EPA-HQ-OAR-2005-0161-2360
Organization: Archer Daniels Midland Company (ADM)
Comment:
The commenter (2360.1) noted that several agricultural organizations have recommended that
EPA accept USDA data, regulations and existing laws to demonstrate that no new acres are
being planted in the U.S. and that further certification requirements are unnecessary. While the
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commenter supports simplifying this requirement, it could have the unintended consequence of
drawing a distinction between, for example, U.S. and Canadian feedstocks used in similar
production. (2360.1, p.6)
The commenter supports using USDA data for meeting feedstock certification requirements in
the U.S., but is concerned this could lead to significant NAFTA implications. (2360.1, p.6)
Document No.: EPA-HQ-OAR-2005-0161-2508
Organization: Environmental Working Group (EWG)
Comment:
The commenter (2508) is concerned about the monitoring and enforcement of land conversion
prohibitions. The commenter recommends that the USDA certify to EPA those lands that met
the definition of actively managed agricultural land on the date of enactment using existing
Common Land Unit and cropping history data. The commenter also recommends that EPA, in
consultation with USDA, develop a process for renewable fuel feedstock producers who have not
participated in USDA Farm Service Agency programs to register their land. (2508, p.2)
Our Response:
In light of the comments received on the proposed renewable biomass recordkeeping
requirements and implementation options, EPA sought assistance from USDA in determining
whether existing data and data sources might suggest an alternative method for verifying
compliance with renewable biomass requirements associated with the use of crops and crop
residue for renewable fuel production. Taking into consideration extensive publicly available
data on agricultural land available from USDA and USGS as well as expected economic
incentives for feedstock producers, EPA has determined that an aggregate compliance approach
is appropriate for certain types of renewable biomass, namely planted crops and crop residue
from the United States.
3.3.6 Third-Party Programs
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2014
Organization: Clean Fuels Clearinghouse
Comment:
The commenter (2243.1) recommends that EPA adopt a qualification approach for the renewable
biomass whereby a third party certifies the feedstock pathway from the field to the production
facility through a documented chain of title, similar to the tracking approach utilized for the
renewable fuel under RFS. (2243.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2361
Organization: Indonesian Palm Oil Commission
Comment:
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The commenter (2361) agrees that there is no existing third party certification system that
exactly fits the requirements of RFS 2 and requests that any certification system must not be
burdensome and other international standard (e.g., EU Directive on renewable energy sources
and RSPO P&C) should be taken into account and not created double burden.
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) believes that EPA should consider other options to facilitate the ability
of renewable fuel producers to demonstrate that the fuels that they produce meet the definition of
"renewable biomass." EPA should require producers to make a one time demonstration to EPA
during the registration process to establish the typical source of feedstocks and the process at the
facility. Thereafter, rather than requiring each producer to amass the records that EPA proposes
for each feedstock for each batch, EPA should recognize certifications from third party
organizations such as the Roundtable for Sustainable Palm Oil, the Roundtable for Responsible
Soy, the Better Sugarcane Initiative, and the Roundtable for Sustainable Biofuels, as sufficient.
(2505.2, p.11) (See Docket Number 2505.2, pp.11-12 for a discussion on the third party
organizations mentioned above)
Document No.: EPA-HQ-OAR-2005-0161-2310
Organization: Low Carbon Synthetic Fuels Association (LCSFA)
Comment:
The commenter (2310) states that EPA has presented a number of options for verification of
feedstock origins and encourages EPA to leverage existing programs in implementing the RFS2
as both the agricultural and forestry sectors are familiar with existing programs that
independently verify collection and accounting practices. The commenter believes that an
industry-run quality assurance program, taking advantage of existing third-party certification
programs that include inspections of feedstock suppliers, facilities, and accounting practices,
would be an effective and efficient means of ensuring that feedstocks qualify as renewable
biomass. [[Docket number 2310.1, p. 7]]
Document No.: EPA-HQ-OAR-2005-0161-2348
Organization: StateLine Cooperative
Comment:
The commenter (2348) noted that EPA did not audit or require third party verifications under
RFS1 and it should not under RFS2. The commenter believes that EPA should do spot audits or
rely on IRS audits. (2348, p.2)
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter also believes that renewable fuel producers should not be required to administer
a Quality Assurance Program. This should administered by EPA. Renewable fuel producers do
not necessarily have the expertise to set up and administer such a program. In addition,
feedstock producers are more likely to comply with federal requirements. (2329.1, p.84)
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Document No.: EPA-HQ-OAR-2005-0161-2493
Organization: American Forest & Paper Association
Comment:
The commenter (2493) feels that in regards to RINs, the approaches outlined in the Proposal are
all impractical and ignore, or underplay, the extremely large volumes of very low value biomass
which will be involved in production of renewable fuels. The commenter states that current pulp
mill operations give some sense of the scale at which renewable biomass supply operations may
operate once the technology becomes commercially viable. Pulp mills consume wood generally
from within a 50 mile radius, on average consuming over 4,100 tons of pulpwood per day. This
translates to roughly 164 truckloads delivered daily, [[see docket#2493.1 p. 8]]
The commenter states that Recognized third party certification systems provide a means of
assuring that wood fiber used to produce pulp, paper, and wood products come from sustainably
managed forests. Requiring compliance with one of these programs, including use of an
auditable wood procurement system, can easily be matched up to the proposed rules registration
(§80.1450) recordkeeping (§80.1451), reporting (§80.1452), and attest agreement (§80.1463)
requirements to provide an assurance that fiber being converted into renewable fuels meets the
requirements of the EISA mandates, [[see docket#2493.1 p. 9]]
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) encourages EPA to recognize certifications of third party organizations
such as the RSPO, or the RSB, as sufficient to meet EISA's requirements concerning the
definition of "renewable fuel." At a minimum, in lieu of the burdensome recordkeeping and
certification requirements that EPA proposed, the commenter believes that EPA should provide
renewable fuel producers the opportunity to establish a third party organization similar to the
RFC Survey Association to audit compliance with the Act to ensure that biofuels are in fact
made from "renewable biomass" without imposing requirements on individual producers to track
every kernel of corn, bean of soy, or cane of sugar used to produce biofuels. (2505.2, p.14)
Document No.: EPA-HQ-OAR-2005-0161-2494
Organization: Council of Western State Foresters
Comment:
The commenter [[2494]] states that chain of custody tracking system, records and documents
proving that woody feedstocks meet the criteria for renewable biomass will be problematic
because most of these materials are not part of an existing commodity market. This will be
particularly challenging because there will be a large portion of available woody material within
any selected supply shed that is excluded from the definition of renewable biomass.
The commenter agrees with EPA that there is currently no third-party forest certification system
that incorporates all of the complexities of the highly restrictive RFS2 renewable biomass
definition. However, there are forestry certification systems available that represent accepted
sustainable forestry practices, [[see docket #2492 p.3]]
Document No.: EPA-HQ-OAR-2005-0161-2124
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Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that EPA should consider other options to facilitate the ability
of renewable fuel producers to demonstrate that the feedstocks they use meet the definition of
"renewable biomass." The commenter stated that EPA should require producers to make a one
time demonstration to EPA during the registration process to establish the typical source of
feedstocks and the process at the facility. Thereafter, rather than requiring each producer to
amass the records that EPA proposes for each feedstock for each batch, EPA should recognize
certifications from third party organizations. At a minimum, EPA should provide renewable fuel
producers the opportunity to establish a 3rd party organization similar to the RFC Survey
Association to audit compliance with the Act to ensure that biofuels are in fact made from
"renewable biomass" without imposing requirements on individual producers to track every
kernel of corn, bean of soy, or cane of sugar used to produce biofuels. (2124.1, p.23)
Document No.: EPA-HQ-OAR-2005-0161-2517
Organization: National Association of State Foresters
Comment:
The commenter concurs with EPA's conclusion that existing third-party certification systems are
not currently well-suited to verify that biomass from forests qualifies as renewable under the
EISA definition. However, some certification systems are undergoing reviews of their standards
to address the removal of biomass from forests, and that certification standards will be available
once biomass markets have fully matured.
Our Response:
In the NPRM, we proposed not to solely rely on any existing third-party verification
program to implement the land restrictions on renewable biomass under RFS2 for several
reasons. These programs are limited in the scope of products they certify, the acreage of land
certified through third parties in the U.S. covers only a small portion of the total available land
estimated to qualify for renewable biomass production under the EISA definition, and none of
the existing third-party systems had definitions or criteria that perfectly match the land use
definitions and restrictions contained in the EISA definition of renewable biomass.
While the requirements of third party programs may not encompass all of the restrictions
and requirements of EISA's renewable biomass definition at this time, as noted by some
commenters, EPA agrees that it is possible that some third-party programs may alter their criteria
in the future to parallel EISA's requirements. Therefore in the future we will consider the use of
these programs in order to simplify compliance with the renewable biomass requirements. We
encourage fuel producers to work to identify changes to such programs that could allow them to
be used as a viable compliance option.
EPA is also finalizing an option to allow renewable fuel producers and renewable fuel
feedstock producers and suppliers to develop a quality assurance program for the renewable fuel
production supply chain, similar to the model of the successful Reformulated Gasoline Survey
Association. While individual renewable fuel producers may still choose to comply with the
individual renewable biomass recordkeeping and reporting requirements rather than participate
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in a quality assurance program, we believe that this preferred alternative could be less costly than
an individual compliance demonstration, and it would add a quality assurance element to RFS2.
Those participating renewable fuel producers would be presumed to be in compliance with the
renewable biomass requirements unless and until the quality assurance program finds evidence to
the contrary. Under this rule, renewable fuel producers must choose either to comply with the
individual renewable biomass recordkeeping and reporting described above, or they must
participate in the quality assurance program.
3.3.7 Treatment of Foreign Renewable Fuel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2329
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) supports requiring foreign producers to provide evidence regarding
land use. Requiring such information can assist EPA in gathering data to further developing its
lifecycle emissions analysis. (2329.1, p.84)
Document No.: EPA-HQ-OAR-2005-0161-2361
Organization: Indonesian Palm Oil Commission
Comment:
The commenter (2361) suggests having a baseline if it reduces the burden and suggests that the
requirements imposed on foreign producers should not be more onerous than those imposed on
local producers. Foreign producers whose raw material is not for generating RINs must have an
option not to provide documentary evidence of compliance or certification. Similarly, local
renewable fuel producers should not be compelled to demonstrate origin of feedstocks if such
biofuels are not intended to generate RINs. (2361.1.pdf, p.2, 3)
Document No.: EPA-HQ-OAR-2005-0161-2012
Organization: Caribbean Basin Ethanol Producers Group
Comment:
The commenter (2012.1) recommends that the traceability requirements be modified to reflect
the nature of how hydrous alcohol is collected, shipped, discharged, processed and stored.
(2012.2, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2020
Organization: European Commission
Comment:
The commenter (2020) is concerned about the difference in treatment between materials moving
within and outside U.S. The commenter (2020) argues that the chain of custody requirement for
foreign fuels is lot more burdensome than the "mass balance" or book and claim" method used
for U.S. based fuels. (2020.1, p, 2)
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The commenter also notes that the proposal excludes the crops from converted grassland that has
not been previously cultivated. The EC is aware that while the U.S. has a large stock of
previously cultivated land not currently under cultivation, and good records to enable producers
to demonstrate compliance with this criterion, the same is not true of all regions of the world. It
is not clear that such a blanket ban can be justified either in terms of effects on carbon stocks or
in terms of other environmental, social or economic impacts. The burdensome character of the
proposed methods of verification of compliance (pp. 84-88) adds to the EC concern. Hence, the
EC would like the U.S. authorities to clarify if they carried out any impact assessment that
assessed the merits of this provision against alternatives and if so, if this analysis could be made
available to the EC. (2020.1, p2)
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
With regards to the foreign refiner/producer certification, the commenter (2132.1) appreciates
the approach EPA is proposing to use to assure compliance, including the use of bonds. The
commenter is concerned that the complexity of the system combined with the distant origins of
the fuels may lead to a high risk of fraud, given the unproven nature of the proposed safeguards.
The commenter believes that EPA should consider a more direct and active approach to
certification to prevent non-uniform standards, misrepresentations and disparate impacts on
domestic and foreign producers. (2132.1, p. 13)
Document No.: EPA-HQ-OAR-2005-0161-2137
Organization: Brazilian Sugarcane Industry Association (UNICA)
Comment:
Referring to EISA's definition of "renewable biomass" and the creation of a requirement for
biofuel producers to verify that the source of their feedstock meets the requirements, the
commenter (2137.1) believes that there is no need to establish additional requirements for the
enforcement of the renewable biomass provision in EISA. The commenter believes that the
nature in which the sugarcane feedstock must be produced facilitates compliance to identify the
origin of the feedstock, one needs only to identify the mill, as its feedstock must come from
nearby areas. [[Docket number 2137.1, p. 37]]
The commenter is pleased to work on established agreed-upon protocols for verification. In
Brazil the verification process can be simplified by using remote sensing tools. The proposal
advocated by Poet on July 21 concerning the establishment of Renewable Biomass Allowance
for biofuel producers may present a reasonable solution. Alternatively, nearly every mill in
Brazil must renew its operating license every two years with state authorities; the commenter
recommends EPA consider using this regulatory process as part of its compliance mechanism.
[[Docket number 2137.1, pp. 37-38]]
The commenter states that two areas of the "expanded" facility registration process need
clarification in the Final Rule. First, EPA should permit the required independent engineering
review to be conducted by an independent third party who is based in and licensed by foreign
countries. Second, EPA should facilitate facility registration by allowing the registration of mills
by holding companies or cooperatives. [[Docket number 2137.1, p. 38]]
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Regarding the Proposed Rules prohibition of commingling of similar foreign-produced
renewable fuel until it enter the U.S. market, the commenter (2137.1) is concerned about possible
trade law violations and generation of additional costs for exports. The commenter recommends
that EPA reconsider its approach and follow the example set by the European Union in the
Renewable Energy Sources Directive by considering a mass balance approach. In addition, the
U.S. IRS is working with U.S. agencies to harmonize import, production, and distribution codes
in order to better track fuels; the commenter suggests that EPA explore how this effort might
serve the Agency's compliance requirements. [[Docket 2137.1, pp.38-39]]
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) believes that because of the substantial risk EPA is imposing on
renewable fuel producers, they are likely to be unable to seek feedstock from outside the United
States. EPA should implement a workable program to allow imports of feedstock, particularly in
the case where there is a drop in U.S. production based on natural causes. [[Docket number
2249.2, p. 28]]
The commenter (2249.2) suggests that EPA implement a "baseline" proposal for feedstock
imported from overseas and provides suggestions for how such a baseline proposal might work.
The commenter believes that in instances where U.S. biodiesel facilities must import feedstock,
imposing certification requirements on imported feedstock may unduly restrict the market.
[[Docket number 2249.2, p. 27]]
Although the commenter believes that information may be available or can be obtained to
determine baseline levels for other countries to assess whether imported feedstock meets the
renewable biomass definition, the commenter recognizes that EPA does not have the same
authority or ability to conduct oversight over foreign renewable fuel producers. In these cases,
EPA should require foreign renewable fuel producers to provide additional evidence regarding
land use. [[Docket number 2249.2, p. 28]]
Similarly the commenter supports EPA's proposal to require foreign producers to provide the
location of land from which they will or have acquired feedstocks, along with historical satellite
or aerial imagery demonstrating that feedstocks from these lands meet the definition of
renewable biomass. [[Docket number 2249.2, pp. 28-29]]
Document No.: EPA-HQ-OAR-2005-0161-2156
Organization: Georgia Forestry Commission
Comment:
The commenter comments that a Brazilian landowner can clear land and plant sugarcane for the
production of ethanol to be exported to the U.S. and the ethanol will qualify for an advanced
biofuel, yet forestland owners in the U.S. who do not have documented proof of "actively
managed plantations" cannot plant native species of trees in forestlands to produce cellulose for
conversion to any category of biofuels proposed by EPA (cellulosic biofuel, advanced biofuel,
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renewable biofuel). The interpretation has provided incentive for land conversion in Brazil and a
dis-incentive for regenerating forests in the U.S.
Document No.: EPA-HQ-OAR-2005-0161-2310
Organization: Low Carbon Synthetic Fuels Association (LCSFA)
Comment:
The commenter (2310) believes that the bond requirement should be limited to smaller
companies without U.S. assets. EPA should look to its bonding requirements under last year's
Phase III Nonroad Spark Ignition and Equipment Rule. There, EPA allowed companies that
meet a U.S. asset test to avoid the increased cost and burden of obtaining a bond. The
commenter recommends that EPA adopt a similar approach under the RFS2 program. [[Docket
number 2310.1, p. 17]]
Document No.: EPA-HQ-OAR-2005-0161-2312
Organization: LyondellBasell Industries
Comment:
The commenter (2312.1) strongly supports EPA's proposal for "an alternative that would
provide foreign renewable fuel producers an option of... not participating at all in the RFS2
program." The commenter's support is based on the belief that the proposed restrictions on
imported biofuels will cause more renewable fuels to be used in non-RFS2 markets, thereby
reducing the supply of RINs available for satisfying RFS2 obligations and likely resulting in
raising the market price of RINs. Since exported biofuels in various forms are expected to be a
large non-RFS2 use of biofuels in the near future, the commenter also believes that relief from
the requirements for "RIN retirement for exported renewable fuels" also needs to be applied to
the non-certified, foreign biofuels that are imported for non-RFS2 purposes. (2312.1, p.3)
The commenter believes that these non-qualify ing foreign biofuels should not be burdened with
added RFS2 verification costs. In the U.S. market, the added verification and supply chain
segregation cost for the renewable fuels required and sold in the RFS2 program will be captured
and compensated in the associated RIN prices. Since obligated parties under RFS2 are required
to obtain RINs to meet their Renewable Volume Obligations (RVOs), they anticipate absorbing
the extra costs of the RINs program. The global biofuels market will not compensate or pay for
any verification costs that are otherwise not required in global markets. (2312.1, pp.3-4) [[See
Docket Number 2312.1, pp.5-7 for a detailed discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2345
Organization: Independent Fuel Terminal Operators Association (IFTOA)
Comment:
Based on the preamble, the commenter (2345) states that EPA believes that a significant number
of foreign producers will become subject to all aspects of the RFS2 program. The commenter
believes that such action is unlikely and notes as with other fuel programs, foreign
producers/suppliers typically rely on U.S. importers to comply with EPA regulatory regimes. In
addition EPA is proposing only to allow U.S. importers to enter foreign-sourced renewable fuels
and generate RINs if the renewable product comes from a registered foreign producer. The
commenter believes that there will be few such producers and foreign-produced renewable fuel
will become scare. The result is greater demand for RINs, more difficult and costly compliance,
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and increased prices for transportation fuels for consumers. The commenter believes the RFS2
should not be administered in a manner that effectively forecloses foreign-sourced renewable
fuels and offers recommendations to ensure that foreign-sourced renewable fuels remain
available to the market. [[Docket number 2345.1, pp. 3-4]]
Document No.: EPA-HQ-OAR-2005-0161-2471
Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter (2471.1) believes that EPA should work with foreign renewable fuel producers
and their importers to determine how best to meet the requirements related to the Renewable
Biomass definition. The commenter agrees with EPA that the foreign producer is in the best
position to verify certain criteria with high accuracy, such as feedstock, land-use and production
processes. The commenter noted that EPA is working with certain foreign producers and
stakeholders. The commenter encourages EPA to continue these discussions, and to include
renewable fuel importers, to determine how best to meet these requirements. The commenter
also believes that EPA should determine what documentation is currently required by its sister
agencies and could be utilized under RFS2. (2471.1, pp.13-14) (See Docket Number 2471.1,
pp. 13-14 for more discussion on this issue)
Document No.: EPA-HQ-OAR-2005-0161-2513
Organization: Institute for Agriculture and Trade Policy
Comment:
The commenter (2513) believes imported ethanol and biodiesel should not be allowed to
contribute toward the RFS2 production mandates, because our dependence upon imported fossil
fuels would be replaced by a dependence on imports. It is proving difficult to judge the
environmental merits of our domestically produced biofuels. The U.S. is not ready to evaluate
the climate and environmental performance of imported biofuels. A clear prohibition on
imported biofuels in the RFS2 would help reduce direct land use changes abroad, while keeping
the rural development benefits of biofuels development in the U.S. [[docket #2513.1 p.4]]
Document No.: EPA-HQ-OAR-2005-0161-2514
Organization: Western Organization of Resource Councils
Comment:
Conversion [[2514]] of land to agro-fuels crops outside the borders of the U.S. is an issue that
needs to be dealt with forcefully and directly. The obvious approach is by not permitting imports
of ethanol and biodiesel. [[#2514.1 p.3]]
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
All requirements for foreign producers of renewable fuels related to "renewable biomass" should
be comparable to those required of domestic producers, with the caveat that such provisions must
ensure the same degree of certainty and provide the same opportunity for review and compliance
assurance as requirements applicable to domestic producers. EPA must make sure that its
regulations provide additional measures necessary to afford the same degree of enforce ability
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and certainty that renewable feedstocks from foreign countries meet the definition of renewable
biomass as those from American biomass suppliers. [[Docket number 2383.1, p. 16]]
Our Response:
EPA is not at liberty to prohibit imported biofuels under the RFS2 program, as some
commenters suggest. Since imported renewable fuels will be included in the program, EPA must
ensure that the imported fuels conform to the same standards as domestic fuels. With regard to
renewable biomass requirements, EISA does not distinguish between domestic renewable fuel
and fuel feedstocks and renewable fuel and fuel and feedstocks that come from abroad. Thus,
EPA must apply feedstock verification requirements to both domestic and foreign feedstocks.
EPA believes that the renewable biomass recordkeeping and reporting provisions are necessary
in order for EPA to ensure that RINs are being generated for fuel that meets EISA's definition of
renewable fuel. Just as for domestic producers, foreign producers must maintain evidence that
the fuel meets the GHG reduction requirements and is made from renewable biomass.
For the final rule, EPA is requiring that importers may only generate RINs for renewable
fuel if the foreign producer has not already done so. The foreign producers must be registered
with EPA under the RFS2 program, and must have conducted an independent engineering
review. Furthermore, we are requiring that importers obtain from the foreign producer and
maintain in their records written documentation that serves as evidence that the renewable fuel
for which they are generating RINs was made from feedstocks meeting the definition of
renewable biomass. The foreign producer that originally generated the fuel must ensure that
these feedstock records are transferred with each batch of fuel and ultimately reach the RIN-
generating importer. A requirement that importers maintain these renewable biomass records is
consistent with the renewable biomass recordkeeping requirements imposed on domestic
producers of renewable fuel.
Foreign producers that intend to generate RINs would be required to designate renewable
fuel intended for export to the U.S. as such, segregate the volume until it reaches the U.S., and
post a bond to ensure that penalties can be assessed in the event of a violation, as discussed in
Section II.D.2.b. This ensures that the volume of fuel for which the RINs were generated
ultimately is imported into the U.S. and not used elsewhere. Similarly to domestic producers of
renewable fuel, foreign producers must obtain and maintain written documentation from their
feedstock providers that can serve as evidence that their feedstocks meet the definition of
renewable biomass. Foreign producers may also develop a third-party quality assurance program
for their renewable fuel production supply chain, as described in the preamble. However, while
domestic renewable fuel producers using crops or crop residues may rely on the aggregate
compliance approach described below to ensure that their feedstocks are renewable biomass, this
approach is not available at this time to foreign renewable fuel producers. EPA does not, at this
time, have sufficient data to make a finding that non-domestically grown crops and crop residues
used in renewable fuel production satisfy the definition of renewable biomass. Nevertheless, if,
in the future, adequate land use data becomes available to make a finding that, in the aggregate,
crops and crop residues used in renewable fuel production in a particular country satisfy the
definition of renewable biomass, EPA is willing to consider an aggregate compliance approach
for renewable biomass on a country by country basis, in lieu of the individual recordkeeping and
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reporting requirements. We note that the Brazilian Sugarcane Industry Association suggests that
a simplified feedstock verification system may be possible in Brazil, and we are willing to work
with them and the Brazilian government to analyze this possibility.
With regard to the EC's comment that biomass should not be excluded from converted
grassland that has not been previously cultivated, we note that the statute specifically imposes
this limitation and EPA is not authorized to modify it. Accordingly, EPA has not conducted an
impact assessment comparing the merits of this requirement and any alternatives. In general,
these restrictions eliminate an incentive for converting native grasslands and other undeveloped
lands to biofuel production, with the consequent carbon releases, loss of habitat for native
species, and loss of biodiversity that would follow. EPA has attempted to fashion the feedstock
verification mechanisms in a workable manner, and in general requires no more of foreign
producers than of domestic producers. The one significant exception is with respect to planted
crops and crop residues, for which the aggregate approach has been adopted for domestic
feedstocks, but not for those grown overseas, for the reasons noted above.
In response to the comment that EPA's proposed feedstock certification program would
make it difficult for producers to import feedstock, EPA notes that in general the same
requirements apply for imported feedstocks as for domestic feedstocks (with the exception of
domestic feedstocks qualifying for the aggregate approach.) Thus, parties importing feedstocks
should develop similar arrangements with foreign feedstock producers for documents verifying
feedstock origin as will be needed for producers using domestically-grown biomass as feedstock.
EPA understands that there will be considerable initial effort needed to understand the new
requirements and to develop standard operating procedures for providing needed documentation,
but we expect that the process can run smoothly, without significant effort, once established.
EPA will monitor the process during initial implementation, and is prepared to make
modifications that prove to be necessary so as to facilitate and promote renewable fuel
production that complies with statutory requirements.
With respect to the comment that foreign renewable fuel producers should not be
required to participate in the RFS2 program, we note that the final rule only allows the
generation of RINs for domestic or imported renewable fuel if a party demonstrates that the fuel
is made from renewable biomass. If that demonstration is not made, RINs cannot be generated,
but the biofuel may still be sold and used in the United States.
EPA disagrees with the commenter who expects that imports of RIN-generating
renewable fuel will decrease as a result of implementation of the RFS2 program. EPA believes,
on the contrary, that RFS2 will provide a level of certainty in renewable fuel demand in the U.S.
that will stimulate additional renewable fuel imports.
With respect to UNICA's comment concerning the registration process and independent
engineering review for foreign facilities, EPA is allowing them to be conducted by a licensed
professional engineer or foreign equivalent that works in the chemical engineering field,
provided the engineer provides EPA with proof of appropriate license. EPA is requiring each
foreign production facility to be registered in order ensure from the beginning of the RFS2
program that the correct types of RINs are being generated by facilities.
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UNICA's comment expresses concern about the proposed prohibition against
commingling of similar foreign-produced renewable fuel until it enters the U.S. market. For the
final rule, EPA is allowing renewable fuel produced at foreign facilities to be comingled prior to
entry into the U.S. market if the importer is generating the RINs for the fuel, provided the
importer has documentation that tracks the volume of fuel from the foreign production facility to
the U.S. port of entry. However, EPA is maintaining the requirement that, in the situation in
which it is the foreign producer that generates RINs for a batch of renewable fuel, that foreign
producer must segregate that volume of fuel as it travels to the U.S. This requirement is
necessary to ensure that the volume of fuel for which the RINs were generated actually makes it
to the U.S.
NBB comments that EPA should use a "baseline" approach for imported feedstocks
similar to the aggregate compliance approach EPA is applying to biomass from U.S. agricultural
land. At this time, EPA does not have sufficient data to apply an aggregate compliance approach
to foreign feedstocks. However, EPA will consider expanding the aggregate compliance
approach to other countries if sufficient information and documentation becomes available.
LCSFA suggests that EPA should limit the bond requirement for foreign facilities to
smaller companies without U.S. assets. EPA feels that the bond requirement is necessary for all
foreign producers in order to ensure any judicial judgments against the companies for violations
of the Clean Air Act can be satisfied.
3.3.8 Effect of "Renewable Biomass" Proposal on Achieving RFS Goals
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2388
Organization: Oglethorpe Power
Comment:
The commenter (2388.1) is concerned that the proposed rules, which provides for a narrow
interpretation of the term "renewable biomass," does not adequately promote the policy goals
upon which the EISA legislation is based and will not be sufficiently compatible with developing
technologies aimed at reducing both our dependence on foreign oil and GHG emissions. The
commenter noted that the term "renewable biomass" incorporates a number of key terms whose
proposed definitions demonstrate that EPA has given insufficient consideration to the purposes
of the RFS amendments and the potential impact of the proposed regulations. (2388.1, p.2) (See
Docket Number 2388.1 pp.2-3 for a detailed discussion of the issues with the renewable biomass
definition)
Document No.: EPA-HQ-OAR-2005-0161-2549
Organization: Triton Energy LLC
Comment:
The commenter (2549.1) noted that the definition of "fallow land" may be in line with
terminology used within the United States Department of Agriculture (USDA), however
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marginal lands, lands that are not suitable for agriculture represent potential areas for growing
energy crops. Given the large volumes of biofuel that will be required to fulfill RFS2, all land
and resources possible, including MSW, will be required unless or until there are major
advancements with algae oils or cellulosic biofuels. (2549.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2493
Organization: American Forest & Paper Association
Comment:
The commenter states the definition of renewable biomass is extremely limited and would
severely restrict the availability of renewable fuel and the ability of the nation to achieve the RFS
targets in EISA. As just one example, the fuels produced in the Old Town, Maine, cellulosic
biofuels project included in the Proposal at Table V.B.23 (74 Fed Reg. 24990), might not qualify
as renewable fuel because the hemicellulose from which the renewable fuel is derived may not
have come from biomass that meets the statutory definition.[[see docket#2493.1 p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter supports the concept of sustainability criteria, but they are concerned that the
regulatory structure that EPA has proposed will be unworkable. EPA's proposed approach will
require elaborate new processes for biofuel producers to ensure that the feedstocks that they are
using meet the definition of "renewable biomass" and it will likely discourage imports of
biofuels, which could make the advanced biofuel mandate unworkable. (2505.2, p. 14)
Document No.: EPA-HQ-OAR-2005-0161-2515
Organization: Minnesota Department of Natural Resources (MnDNR)
Comment:
The commenter (2515.1) believes that the proposed definitions exclude many sustainable
biomass resources from the nation's biomass mix. This will likely result in one or more of the
following: 1) the industry fails to achieve Congress' goal of 16 billion gallons of cellulosic
biofuel; 2) eligible resources, such as crop residues, are exploited well beyond sustainable limits;
or 3) landowners will respond to perverse incentives to remove land from environmentally
beneficial land uses. (2515.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2446
Organization: Minnesota Farm Bureau Federation
Comment:
EPA's definition of existing cropland creates onerous land use rules and record-keeping
requirements that would bar many farmers from growing crops used for biofuel production and
in so doing would reduce the value of a great deal of American farmland. The commenter states
that contrary to congressional intent, EPA has expanded on the EISA's existing cropland
requirement; while EISA defines existing cropland requirement from an historical perspective,
EPA's definition is future oriented and will impede American agricultures participation and our
biofuels industry.
Our Response:
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We have made every effort to interpret EISA's definition of "renewable biomass" as
flexibly as possible and in such a way that will allow the mandated renewable fuel volumes to be
met without undermining the environmental protections the definition is meant to confer. We
believe that the final regulations' requirements for verifying that feedstocks used in the
production of renewable fuel meet the definition of "renewable biomass" provide sufficient
flexibility for renewable fuel producers and feedstock producers/suppliers to comply with the
requirements at minimal cost and administrative burden once the procedures are understood and
become accepted operating practice in the industry.
One commenter took issue with EPA's proposal to require that planted crops and crop
residue be eligible as renewable biomass only if taken form land actively managed as farmland
on the date of EISA enactment and consistently thereafter. EPA has modified this provision in
the final rule, requiring only that the land be actively managed on the date of EISA enactment.
We understand, as some commenters have noted, that the renewable biomass restrictions
may effectively preclude some biofuel from participation in the RFS2 program. EPA has no
discretion under the statute to waive or modify these requirements.
With respect to the comment that "marginal lands" should qualify for the production of
renewable biomass, EPA responds that the renewable biomass requirements are specified in the
statute, and EPA is not at liberty to modify them. EPA considered and rejected the concept of
including rangeland in the definition of "existing agricultural lands" from which planted crops
and crop residue may be obtained for renewable fuel production. EPA's rationale for this
decision is described in the preamble to the rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2310
Organization: Low Carbon Synthetic Fuels Association (LCSFA)
Comment:
The commenter (2310) states that EPA's estimates of feedstock availability do not account for
competitive uses of feedstock for electricity generation under most versions of a Renewable
Electricity Standard. The commenter is concerned that feedstock constraints may inhibit the
development of biofuels, and notes that diversion of biomass to energy production is an
inefficient use of biomass. The commenter believes that EPA should provide an analysis of the
most efficient use of biomass in the final rulemaking. Such an analysis would inform
policymakers of the need to prioritize biomass availability among competing policy mandates.
[[Docket number 2310.1, pp. 5-6]]
Document No.: EPA-HQ-OAR-2005-0161-2493
Organization: American Forest & Paper Association
Comment:
The commenter (2493.1) states that utilities and independent power generators are likely to
increase their use of wood biomass in response to state and national mandates/incentives
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regarding renewable energy and carbon emissions, and that this would present significant
challenges in terms of woody biomass supply and forest sustainability. [[See Docket Number
2493.1, p. 6]]
Our Response:
We acknowledge that there could be competing needs for renewable biomass feedstocks
as other requirements are put in place at the National, State, or local level for renewable
electricity. However, we believe our projections of cellulosic biomass for producing renewable
fuels are supportable even with such future competition. Although the idea of studying the most
efficient uses of biomass has merit, such an undertaking is beyond the scope of this rulemaking.
3.3.9 Sustainability and Renewable Biomass Production
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters comment that EPA should include additional safeguards to limit the amount of
crop residue that can be considered renewable biomass to only that amount that can be removed
without damage to soil and water resources. The commenters also urge EPA to allow materials
from stands planted to restore rare or historic native forest types within their historic range, as
many of these forest types benefit from the incentive for active management created by the
market for renewable biomass.
Document No.: EPA-HQ-OAR-2005-0161-2512
Organization: Conservation International
Comment:
The commenter (2512.1) supports the intent to restrict any clearing of natural habitat, and thus
limit potential GHG emissions, as well as loss of biodiversity habitat and other ecosystem
services. However, only allowing feedstock production on existing cropland will have the effect
of placing biofuel feedstocks in direct competition with feed crops, and potentially push food and
fiber crops onto newly-cleared land. The commenter suggests this risk be mitigated in two ways:
1) Create incentives to produce feedstocks on degraded or underutilized land without a current
land-use that would be displaced (i.e., grazing livestock, shifting crops);
2) Allow limited clearing of new lands, providing an independent assessment of carbon stocks,
ecosystem service value, biodiversity, and current land use is carried out. (2512.1, pp.1-2)
The commenter also believes that the issue of monitoring the cut-off date also needs to be
examined. The commenter questions how compliance will be monitored, especially for
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feedstocks such as corn, soy, and palm oil which are traded in the market, and which may have
multiple uses beyond biofuels. (2512.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2513
Organization: Institute for Agriculture and Trade Policy
Comment:
The commenter (2513) says that based on current scientific assessments of feedstock impacts in
these areas, the following preferences should be established in determining feedstock eligibility:
Preferences for perennial feedstocks over annual feedstocks, preferences for non-genetically
modified feedstocks, required conservation plans for biomass production, similar to the newly
developed Conservation Measurement Tool, preferences for non-irrigated feedstocks,
preferences and promotion of locally-owned, locally-supplied production facilities, [[docket #
2513.1 p.3]]
Document No.: EPA-HQ-OAR-2005-0161-2515
Organization: Minnesota Department of Natural Resources (MnDNR)
Comment:
The commenter does not want to incent the conversion of existing grass-based CRP, pasture, or
rangeland acres to dedicated woody biomass production within the prairie biome. The
commenter encourages EPA to explore rules that allow the use of trees in the context of
ecosystem restoration, but do not contribute to the conversion or degradation of native plant
communities. (2515.1, pp.2-3)
Document No.: EPA-HQ-OAR-2005-0161-2374
Organization: Amyris Biotechnologies, Inc. (Amyris)
Comment:
The commenter (2374) believes that in the interest of maximizing the opportunity for production
of renewable fuels, EPA should exercise its discretion in allowing biomass that is sustainably
produced for conversion into fuels. The U.S. Department of Agriculture 2008 farm bill contains
a definition of renewable biomass that may serve as a broader example. [[Docket number 2374.1,
p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2491
Organization: International Council on Clean Transportation (ICCT)
Comment:
The commenter (2491) believes that the definition of renewable biomass should not preclude the
land that would become carbon neutral or a net carbon sink and would not adversely impact
biodiversity when biomass is grown and harvested. While the commenter recognizes that some
portion of rangeland should not be used for crop production to maintain biodiversity and prevent
soil erosion, they believe some portion of rangeland can potentially be used to grow crops while
improving soil C-sequestration. The rangeland as a whole should not be precluded from the
definition of renewable biomass. Even if a part of the rangeland that is suitable for growing
biomass in a sustainable way is available, it should be eligible for biofuel production. Therefore,
in addition to the land types that are eligible for growing renewable biomass according to the
standard definition, the commenter believes that other types of land parcels that allow sustainable
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production of biomass should also be included in the definition of renewable biomass. [[Docket
number 2491.1, p. 3]]
The commenter (2491) notes that the RFS2 does not explicitly use sustainable criteria to regulate
biomass production and processing and requests explicit provisions in the RFS2 that ensure that
biomass is produced and processed in a sustainable way. Sustainable criteria similar to those of
the UK Renewable Transport Fuel Obligation can be included in RFS2. [[Docket number 2491.1,
p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2143
Organization: New York State Department of Environmental Conservation
Comment:
The commenter (2143) suggests that more emphasis should be placed on the sustainability of
biofuel feedstock production including environmental quality and land use change concerns.
The commenter (2143) would like to see a greater emphasis on setting sustainability principles
(for example, water quality and availability, soil conservation, and biodiversity), evaluation of
management practices (for example, cropping management practices such as no-till and no-till
plus cover crops) within the proposed rulemaking.
The commenter (2143) mentions that the EPA should not provide incentives for increased crop
production on Conservation Reserve Program lands without sustainability principles in place and
suggests a tracking method to verify environmental sustainability of all biofuel feedstock
sources. (2143.2, p,4-5)
Document No.: EPA-HQ-OAR-2005-0161-2497
Organization: Wisconsin Department of Natural Resources
Comment:
The commenter (2497.1) noted that if rangeland is to be included, harvest of plant materials must
be according to approved management plan that ensures sustainable harvest and management
practices. Sustainable management planning should in fact be emphasized throughout the rule.
Further suggestions for doing this are included below. The commenter also would suggest
broader consideration of biomass harvesting on all lands (e.g., State and/or Federal lands) and
management systems. The commenter believes that this should be conditional upon the
development and use of sustainable harvest guidelines by each state. (2497.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2508
Organization: Environmental Working Group (EWG)
Comment:
The commenter would like EPA to include additional safeguards that limit the amount of crop
residue that can be considered renewable biomass to only that amount of crop residue that can be
removed without damage to soil and water resources. Renewable fuel producers should be
required to certify sustainability of harvesting in order to determine whether crops and crop
residue may be considered renewable biomass. (2508, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2526
Organization: Coskata
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Comment:
We commend the EPA in following EISA guidance on defining Renewable Biomass with the
land use restrictions. However we are concerned that the land use restrictions may be too
confining to currently known agricultural and forestry management practices. For instance,
some forestry land owners are experimenting with inter-cropping of energy crops within the
active forest plantation.
This type of land management encourages land productivity while also enhancing the carbon
sequestration potential of the forest land. We are concerned that such innovative land
management techniques may not be encouraged with the restriction on the type of land on which
a crop must be grown. We urge the EPA to make a specific allowance for land use and non-food
biomass production innovations that would enhance the carbon sequestration profile of existing
land. [Docket number 2526.1, pp. 9-11.]
Our Response:
EPA appreciates the interest expressed by several commenters in incorporating
requirements or incentives for sustainable feedstock production into RFS2 to protect water and
soil quality and to promote other environmental considerations. Indeed, EPA is also interested in
ensuring that increased renewable fuel production spurred by EISA's volume mandates does not
lead to degradation in water, soil, or air quality. We also appreciate the comments suggesting
that in some instances allowing additional biomass collection from certain areas would promote
good stewardship of those lands and could help alleviate feedstock shortages or shortages of
farm products that could otherwise be grown on agricultural lands devoted to feedstock
production. We have made every effort to interpret EISA's definition of "renewable biomass" in
such a way that will allow the renewable fuel volumes to be met while maintaining the
environmental protections the definition is meant to confer. EISA's lifecycle greenhouse gas
reduction threshold requirements for different types of renewable fuel will also help ensure that
increasing renewable fuel production will not lead to increased greenhouse gas emissions.
However, beyond these provisions, EISA amendments to CAA 211 (o) do not constrain
the production of renewable fuel or its feedstocks, and therefore it would be beyond EPA's
current authority to institute additional sustainability criteria, per se, such as those suggested by
some commenters. Furthermore, EPA is not at liberty to make exceptions to the renewable
biomass restrictions imposed by statute, even to promote beneficial environmental results.
Commenters should note that EISA Sec. 204 (Environmental and Resource Conservation
Impacts) instructs EPA, in consultation with USDA and DOE, to assess and report to Congress
every three years on the impacts of RFS2 on environmental and conservation issues such as air
quality, soil conservation, water availability, and ecosystem health, and to make
recommendations for action to address any identified adverse impacts.
3.4 Renewable Fuel Exempt from 20 Percent GHG Threshold (Grandfathering)
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
The commenter (1044) offers the following remarks related to §80.1403. Which Fuels are not
subject to the 20% GHG thresholds? The language in this section is exclusive to ethanol and the
commenter opposes this perspective. The commenter supports the inclusion and replacement of
the word ethanol with renewable fuel producer. They feel this term would be consistent with the
proper use of the intended provisions identified by the EISA. [[Docket number 1044.1, p. 6]]
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter supports EPA's proposal that GHG grandfathering applies only to the general
RFS, and not advanced biofuels, biomass-based diesel or cellulosic biofuels. (2124.1, p.26)
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) agrees with EPA that any ethanol plant that is fired with natural gas,
biomass or any combination thereof for calendar years 2008 and 2009 should be considered
grandfathered and should be treated like grandfathered ethanol facilities for as long as they
continue to burn natural gas, biomass or any combination thereof. (2124.1, p.25)
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) understands EPA's proposed approach to grandfathering conventional
biofuels to be that any fuel produced at the grandfathered facilities will qualify as a renewable
fuel under the RFS2, provided it is within the original facility capacity (plus reasonable
tolerances as below) and it is used to meet the conventional biofuel target. The commenter
supports this interpretation as consistent with Congressional intent. Should the indirect land use
modeling be applied and result in biobutanol not meeting the minimum 50% GHG threshold for
an advanced biofuel, then biobutanol can only enter the market as a grandfathered conventional
renewable fuel in the case of these facilities. (2146.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2143
Organization: New York State Department of Environmental Conservation
Comment:
The commenter (2143) urges EPA to apply the 20 percent lifecycle GHG reduction requirement
to production volumes from existing facilities that exceed that facility's baseline volume and
believes that the requirement must ultimately be applied to the baseline volumes of existing
facilities.
The commenter (2143) suggests setting a date (such as 15 years from the enactment of EISA)
that meets the definition of reconstructed in 40 CFR 60.15 on which baseline production
volumes will be subject to the 20 percent lifecycle greenhouse gas reduction requirements. The
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commenter (2143) supports separate analyses for each process type as there are a few process
plant types subject to this provision. (2143.2, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2369
Organization: New Generation Biofuels (NGBF)
Comment:
The commenter (2369) believes that while the statute governing the expansion of the renewable
fuel standard allowed some fuels to be exempt from reducing greenhouse gases compared to
gasoline or diesel fuel, similar to the original renewable fuel standard program, the changed
program should still provide incentives for the exempt biofuels and biofuel production facilities
to improve their environmental footprint. The benchmark appears to be primarily in the form of
greenhouse gases, however, the commenter believes that improvements in overall emissions
and/or reducing water consumption and pollution should also be recognized and rewarded,
possibly by providing a greater number of RINs per gallon of biofuel produced [[Docket number
2369.1, p. 2]]
Our Response:
The exemption from the 20% GHG requirement applies to all renewable fuel - not just
ethanol—from facilities which commenced construction prior to December 19, 2007 per the
language in EISA. For those facilities which commenced construction after December 19, 2007
but prior to December 31, 2009, the language in EISA provides an exemption from the 20%
GHG for facilities "deemed compliant" with EISA (i.e., they must consume only natural gas
and/or biofuel). GEN-X commented that the exemption for "deemed compliant" facilities should
include all renewable fuels, not just ethanol. The language in EISA specifically names ethanol
rather than "renewable fuel" for "deemed compliant" facilities; therefore, EPA's regulations
limit the exemption only to production of ethanol from such facilities.
New Generation Biofuels suggests that facilities that are grandfathered should be given
credit for improving their "environmental footprint", so that reducing water consumption and
water pollution, for example are recognized and rewarded, possibly by allowing a greater
number of RINs per gallon of biofuel produced. The language in EISA provides for the
exemption from the 20% GHG threshold for renewable fuel, as discussed above. It does not
provide for awarding additional credits for improving environmental performance.
3.4.1 Definition of Commence Construction
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) supports using PSD definitions for commence construction. The
commenter believes that EPA's addition of language to address multi-phased projects creates
confusion, and EPA did not adequately explain what it meant by a multi-phase project. The
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commenter also believes that foreign facilities should be required to certify compliance with
these requirements, including having obtained all necessary permits, and should be required to
provide documentation to support the certification, such as an affidavit or legal opinion. EPA
cannot determine whether a foreign entity has obtained all necessary permits under foreign law.
(2329.1, pp. 70-71)
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters (2129.1) recommend that "new facility" for purposes of the RFS be defined as
any renewable fuel production plant or renewable fuel production unit at any stationary source,
including any renewable fuel production unit at an existing renewable fuel production plant, for
which construction or reconstruction commenced after December 19, 2007. A "stationary
source" is defined at CAA Section 111 (a) (3) as "any building, structure, facility, or installation
which emits or may emit any air pollutant." (2129.1, p. 11)
The commenters recommend that "grandfathered" facilities must have all necessary
preconstruction approvals completed and begun a continuous program of actual on-site
construction that goes beyond land-clearing. For multi-phased projects, the commenters suggest
that the commencement of construction of one phase does not constitute commencement of
construction of any later phase, unless each phase is "mutually dependent" on the other as a
technical matter (not just economically). The EPA must also put some limitations on the
definition of construction. EPA should also establish a concrete obligation to begin or complete
actual construction within a reasonable time frame, such as five years. Additionally, EPA should
stipulate that if a proposed facility's pre-construction approval lapses or is withdrawn, it loses its
existing source status. (212 9.1, p. 11)
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) suggests that EPA identify "commencement of construction" by
reference to the start of "beneficial operations", i.e., first commercial product shipped. (2146.1,
p.3)
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated
Comment:
The commenter (2419.1) noted that Table 1.5-15 on page 129 of the DRIA does not include the
ethanol plant expansion volume for the Blair, NE facility in the under construction column. PSD
permits from 7/7/05 and 9/8/06 are included that clearly signify that the expansion project meets
the definition of Commence Construction as outlined in the proposed regulation. [[See Docket
Numbers 2419.3 & 2419.4]] (2419.1, p.l)
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The commenter (2511.1) proposes that the "commence construction" language shall encompass
expansions at existing grandfathered facilities that commence construction prior to enactment
provided the expansion is completed by 12/19/2009. These types of expansions should be
"deemed compliant" if the construction is completed prior to enactment and operations are
started within the "deemed compliant" period up and until 12/19/2009. (2511.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2472
Organization: Valero Energy Corporation (Valero)
Comment:
The commenter agrees with EPA that the definitions of "commence" and "begin actual
construction" specified in the Prevention of Significant Deterioration ("PSD") regulations, which
draw upon definitions in the Clean Air Act, provide a clear designation that is broad enough to
avoid facility-specific issues. Yet narrow enough to prevent new facilities (post-December 19,
2007) from being grandfathered. Furthermore, the commenter agrees with EPA's additional
proposed language with respect to multi-phase projects. [[Docket number 2472.1, p. 10]]
Document No.: EPA-HQ-OAR-2005-0161-2360
Organization: Archer Daniels Midland Company (ADM)
Comment:
The commenter (2360.1) also believes that the grandfathered production levels should be based
on permitted capacities even in cases where portions of a project may have been slowed or
temporarily stopped, and even if the stoppage exceeds 18 months and the project cannot be
completed within 36 months. (2360.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2363
Organization: Ag Processing Inc.
Comment:
The commenter (2363) offers the following recommendations:
-The definition of commenced construction contained in the PSD regulations is familiar to most
people and is probably acceptable and should be easily documented through the air construction
permitting process that facilities are subject to.
Our Response:
Commenters generally agreed with EPA's proposed definition of "commence
construction". Renewable Fuels Association stated that the definition of multi-phase
construction is confusing. The definition of "commence construction" is taken from the PSD
definition, including the language on multi-phase construction. The definition has been in effect
since the early 80 's and the language on multi-phase construction is straightforward and has not
caused confusion. Furthermore, there is sufficient precedent and guidance on the subject of
"commence construction" to answer any questions that may arise concerning the definition.
Since qualification for the exemption from the 20% requirement is contingent upon commencing
construction prior to Dec 19, 2007, (or December 19, 2009 for some ethanol facilities) we do not
believe it necessary to provide a separate definition of "new facility" as the Clean Air Task Force
et al suggested.
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The Clean Air Task Force et all suggests that if air permits lapse or are withdrawn, then
the facility should no longer be considered an existing facility. The definition of "commence
construction" requires that owners have all necessary preconstruction permits. In light of this
comment we have specified in the definition of "commence construction" that the owner did not
discontinue construction for a period of 18 months or more and completed construction within a
reasonable time, not to exceed 36 months. Renewable Fuels Association states that the
requirement for preconstruction permits to have been obtained should also apply to foreign
facilities. We agree, and are requiring that owners of foreign facilities demonstrate that they
have all necessary preconstruction permits required by the governmental entities as appropriate.
The Clean Air Task Force et al, states that the "reasonable time for completion of
construction" should be specified in the regulations and they suggest five years. We have added
a provision in the regulations that specifies that construction should be completed within three
years of commencement, to qualify for completion of construction within a "reasonable amount
of time". We are including the three year requirement in the regulation itself. We believe that
three years is an adequate period of time to account for economic downturns that may cause
disruptions in construction schedules.
Cargill suggests that for facilities in "deemed compliant" status, construction should be
completed by December 31, 2009. We are requiring that facilities are "deemed compliant" if
they commence construction after December 19, 2007 but prior to December 31, 2009, are fired
by natural gas, biofuel or combination thereof, and produce only ethanol. We do not require that
construction be completed prior to December 31, 2009, and in fact, we allow the same 36 month
period as discussed above, as qualifying for a "reasonable period of time" in which construction
should be completed. Since the regulation has not gone into effect, we believe it would be unfair
to require facilities in "deemed compliant" status to have completed construction by the end of
2009.
Clean Air Task Force, et al suggested that on multi-phased projects, construction of one
phase does not constitute commencement of construction of any later phase, unless each phase is
"mutually dependent" on the other as a technical matter. The definition of "commence
construction" specifies that "for multi-phased projects, the commencement of construction of one
phase does not constitute commencement of construction of any later phase, unless each phase is
mutually dependent for physical and chemical reasons only," We believe this language satisfies
the commenter's concern.
Cargill noted that Table 1.5-15 on page 129 of the DRIA does not include the ethanol
plant expansion volume for the Blair, NE facility in the under construction column and included
copies of their PSD permits to show that construction commenced prior to December 19, 2007.
We acknowledge this and have made changes which are reflected in Section IV.B.I.a of the
preamble as well as Sections 1.5.1.1 and 1.5.1.4 of the RIA.
3.4.2 Basic Approach: Grandfathering Limited to Baseline Volumes
3.4.2.1 Limitation on Baseline Volumes
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) agrees with the definition of "nameplate capacity." (2132.1, p.10)
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) supports EPA's proposed definition of the baseline volume to be the
greater of the permitted capacity or annual peak capacity. The commenter believes that the full
capacity provided for in the permit should be used. EPA should also eliminate its conversion
factor, and add a tolerance level. A tolerance level allows facilities to become more efficient,
which would provide additional GHG benefits. Ten percent is a reasonable tolerance value for
EPA to apply. (2329.1, pp.69-69)
The commenter opposes using 2006 production as a potential alternative to define the baseline
volumes. Production in 2006 is not representative of a facility's potential capacity, but only
reflective of the demand that particular year. Nor does it recognize the improvements that can be
made to increase production without expansion of the facility. (2329.1, p.69)
The commenter also supports EPA's proposal to treat "deemed compliant" facilities as
grandfathered facilities. EPA should make clear that other types of facilities existing on the date
of enactment (e.g., a chemical plant) that may be retrofitted to produce renewable fuel after
enactment or a refinery that co-process renewable biomass with petroleum would not be eligible
for deemed compliant status. (2329.1, p..73)
Document No.: EPA-HQ-OAR-0161-2383.1
Organization: Growth Energy
Comment:
The commenter states (pp. 4-6) that EISA does not permit EPA to limit participation by facilities
that were in production or under construction when Congress passed EISA. The 20 percent
GHG performance standard of section 211 (o) (2) (A) (i) applies to only renewable fuel facilities
that are "new." The GHG performance standard does not apply to renewable fuel from those
facilities that are "already existing," on which construction commenced prior to the enactment of
EISA. EPA impermissibly tries to cause existing facilities (those that commenced construction
prior to December 19, 2007) to become subject to the GHG performance standard based on
either changes to those existing facilities, changes in the volume of production at such facilities,
or the passage of time. Nowhere does EISA provide that EPA may require facilities to meet the
GHG performance standard if existing facilities are modified, do not complete construction
within a certain duration, exceed certain volumes of production, or operate for a specified
duration. The proposed rule would require any facility, new or existing, to meet the GHG
performance standard based on increased production volumes, changes at existing facilities, or
the passage of time. However, the only factor specified by Congress in the RFS 2 as
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determinative of whether the GHG performance standard applies to renewable fuel from a
facility is whether the facility is "new," with construction beginning after enactment of the RFS
2. EPA thus "takes other factors into account" than those to which Congress limited it—the
proposed rule exceeds statutory authority. EPA cannot change the statute with additional
limitations not present on the face of the text.
Document No.: EPA-HQ-OAR-2005-0161-2079
Organization: AE Biofuels, Inc.
Comment:
The commenter (2079.1) supports the basic option, but they believe further clarification is
required to determine exactly how the baseline volumes would be calculated, and the ability of a
company to challenge the revoking of a facility's "grandfathered" status if the EPA determined
that the modifications had increased its GHG emissions. (2079.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-1050
Organization: American Council for Ethanol (ACE)
Comment:
The commenter (2101.1) believes it is appropriate that EPA's RFS2 rule determines that ethanol
plants that commenced construction before the EISA enactment date are grandfathered into the
GHG reduction provisions, and that for calendar years 2008 and 2009, any ethanol plant that is
fired with natural gas, biomass, or any combination thereof is deemed to be in compliance with
the 20 percent threshold. As a result, there is a strong likelihood that the 15 billion gallons of
corn ethanol per year called for under the RFS2 program will be deemed to comply with the
GHG reduction requirement. (2101.1, p.2)
The commenter also believes that EPA has done a thorough analysis of grandfathering options
under RFS2 for the 20 percent GHG compliance threshold, and believes the basic, proposed
approach is workable although the commenter prefers indefinite grandfathering with no
limitations placed on volume. If EPA proceeds to enforce the proposed approach, which
provides indefinite grandfathering of the base volume of fuel from the plant, the commenter
recommends that EPA allow ethanol plants, on a case-by-case basis, be granted permission for
additional or new ethanol capacity or volume to be grandfathered if the production methods
enable the plant to maintain its 20 percent GHG reduction threshold. (2101.1, p. 17)
Document No.: EPA-HQ-OAR-2005-0161-1051
Organization: Aberdeen Development Corp.
Comment:
The commenter (1051) believes there is ample support for EPA to essentially grandfather
existing facilities by deeming these facilities to be in compliance with the 50 percent reduction
requirement. [[Docket number 1051.1, p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-2012
Organization: Caribbean Basin Ethanol Producers Group
Comment:
The commenter 92012.1) recommends that their organization be grandfathered as an eligible
producer of advanced biofuels. (2012.1, p.3)
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Document No.: EPA-HQ-OAR-2005-0161-2016
Organization: Malaysian Palm Oil Board (MPOB)
Comment:
The commenter (2016.1) believes that the commence construction provision is intended to help
corn ethanol plants in the U.S. The commenter feels it should also apply to overseas facilities in
Malaysia producing biodiesel from palm oil. Whatever expiration dates decided for such
facilities in the U.S. should also be extended to foreign facilities. (2016.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that grandfathering should only apply to originally approved
baseline volumes. The commenter believes that any new volume production, no matter how
small, should be required to meet the minimum 20% GHG emissions reduction threshold. The
commenter does not agree with EPA extending any tolerance to this baseline volume. (2124.1,
p.25)
The commenter opposes any effort to apply grandfathering indefinitely or to allow any
production increases above the approved baseline to be considered to be covered under the
grandfathering provisions. (2124.1, p.26)
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) agrees with EPA's choice to provide an "indefinite time period for
grandfathering status but with restrictions to the baseline volume of renewable fuel that is
grandfathered." The commenter suggests using the indefinite exemption option. EPA estimated
the entire 15 billion gallons of Renewable Fuel as corn ethanol that will come from
"grandfathered" or "deemed compliant" plants, so an indefinite exemption should not raise the
overall amount of grandfathered fuel. If EPA believes some time limit is needed, the commenter
recommends allowing 30 years or more; by contrast, we think 15 years is too short and may limit
investments for improving operations or technologies. (2132.1, p.11)
Document No.: EPA-HQ-OAR-2005-0161-2140
Organization: John Deere Agriculture & Turf Division
Comment:
The commenter (2140.1) believes that it is critical that historical financial investments made
before enactment of EISA be protected. The commenter believes that EPA should appropriately
grandfather existing ethanol production in recognition of these significant investments underway.
The commenter believes that national renewable fuels policy must continue to recognize and
support investments made under current regulations and technologies and recognize appropriate
lead times in developing successive generations of regulations to which these facilities may be
subject. (2140.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2146
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Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) noted that many plants operate with only 10-20 days of downtime,
therefore the 95% conversion rate would be the preferred choice. The commenter also noted that
the term "new expansion" should be clarified to mean material spending on new assets which
directly results in substantial additional output of product volume. (2146.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2168
Organization: First United Ethanol, LLC
Comment:
While the commenter (2168) is encouraged that the proposed RFS2 would grandfather all
operating plants, they have to wonder about the application of that exception in the near future as
well as compliance issues that they will ultimately face. (2168, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) generally supports the proposed grandfathering approach. The
commenter agrees that EPA's proposal is a reasonable compromise to the greenfield approach
(Alternative 5) to address the potential for unlimited expansions of a particular facility, while
still giving facilities flexibility in their operations to include new feedstocks and to maintain and
improve their equipment. This approach also is practical and provides a bright line definition that
makes clear when the 20 percent requirement is triggered. [[Docket number 2249.2, pp. 33-34]]
Document No.: EPA-HQ-OAR-2005-0161-2304
Organization: Gevo Inc.
Comment:
The commenter (2304) supports EPA's basic approach on grandfathering of baseline volume of
any renewable fuel. This basic approach would provide an indefinite extension of grandfathering
and deemed compliant status but with a limitation of the exemption from the 20% GHG
threshold to a baseline volume of renewable fuel. This approach is similar to how EPA has
treated small refiner flexibilities under other fuel rules. Other proposed approaches create
significant complexity and administrative burdens to the overall program with little to no benefit.
The commenter recommends that EPA keep it simple to regulate and administer and thus simple
to comply. [[Docket number 2304.1, p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-2337
Organization: California Air Resources Board
Comment:
The commenter (2337.1) agrees with the U.S. EPA recommendation that the baseline volume of
renewable fuel exempt from the 20 percent GHG threshold requirement be the maximum
volumetric capacity of the facility as allowed in any applicable state air permit or Federal Title V
operating permit. The production of volumes greater than this amount should be subject to the
twenty percent GHG reduction requirement.
Document No.: EPA-HQ-OAR-2005-0161-2363
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Organization: Ag Processing Inc.
Comment:
The commenter (2363) recommends that the baseline volume should be the greater of the
nameplate capacity or the permitted capacity of the facility. There may be situations where the
facility is not permitted for the full nameplate capacity, but the nameplate capacity more fully
represents the volume to which capital investment has been committed. [[Docket number 2363.1,
p. 11]]
In addition, the commenter states that where air permit limitations on capacity are expressed in
hourly, daily maximums, it is proposed that those numbers are extrapolated to an annual basis
using only 7884 hours per year (90% of the total 8760 hours available in a year). The total 8760
hour per year should be used unless the permit limits the total days of operation to some number
less than 365 days per year. While most facilities take an annual shutdown for some
maintenance or repairs, the timing of the shutdown usually does not occur on the same days
every year. Thus a facility may operate 365 days (8760 hours) in a row in between shutdowns.
There are some situations where the annual peak production of a facility is proposed as the
avenue for determining the baseline capacity. This may not fully represent the true capacity of
the facility due to operational constraints such as market conditions or operating capital during
the early years of operation. [[Docket number 2363.1, p. 11]]
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP)
Comment:
The commenter (2384) is generally supportive of the basic approach to the proposed
grandfathering provisions. [[Docket number 2384.1, p. 6]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
Regarding the time period that should accompany grandfathering, the commenter (2393) believes
that without a time limit on grandfathering, there may be little incentive to further reduce GHG
emissions from existing bio-refineries. The commenter also states that EPA has extended the
definition of "grandfathering" far beyond what Congress intended. EPA should be using a 12
month time period after December 19, 2007 instead of a 36 month time period. [[Docket number
2393.1, pp. 40-41]]
The commenter agrees with the EPA interpretation of EISA that any ethanol plant that is fired
with natural gas, biomass or any combination thereof for calendar years 2008 and 2009 should be
considered grandfathered and should be treated like grandfathered ethanol facilities for as long as
they continue to burn natural gas, biomass or any combination thereof. However, the commenter
believes that grandfathering should only apply to originally approved baseline volumes. Any
new volume production, no matter how small, should be required to meet the 20% GHG
threshold. The commenter does not agree that EPA should extend grandfathering to any
volumes above this baseline volume. [[Docket number 2393.1, pp. 40-41]]
Document No.: EPA-HQ-OAR-2005-0161-2419
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Organization: Cargill Incorporated
Comment:
The commenter (2511.1) supports EPA's basic approach that would provide an indefinite
extension of grandfathering and deemed compliant status, but with a limitation of the exemption
from the 20% GHG threshold to a baseline volume of renewable fuel. The commenter also
supports uniformly applying the grandfathering provisions to both the existing biodiesel and
ethanol facilities relative to their individual GHG reduction targets in the EISA. (2511.1, p.4)
The commenter believes that facilities which are "deemed compliant" should retain their
grandfathered status for the same length of time as grandfathered facilities. The commenter does
not support the alternative in which after 2009, "deemed compliant" plants must meet the 20%
threshold in order to generate RINS for renewable fuel produced. (2511.1, p.4)
The commenter supports the provision that changes to the renewable fuel production mix would
remain grandfathered at grandfathered facilities and deemed compliant at deemed compliant
facilities, including those facilities that have expansions which bridge the 12/19/07 - 12/19/09
timeframe provided the overall volume produced does not exceed the baseline production
volume. (2511.1, p.4)
Finally, the commenter suggests that reporting information regarding process fuel, feedstock use
and product volumes could be sourced from current reporting requirements including state
compliance reports, federal Alcohol Tax and Trade Bureau reporting and Energy Information
Administration reporting. (2511.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2472
Organization: Valero Energy Corporation (Valero)
Comment:
The commenter (2472) supports EPA's basic approach in the Proposed Rule of providing an
indefinite extension of grandfathering for facilities that commence construction on or before
December 19, 2007. This approach is consistent with previous approaches established in the
CAA and other EPA regulations. [[Docket number 2472.1, p. 8]]
Document No.: EPA-HQ-OAR-2005-0161-1052
Organization: Pennsylvania Energy Resources Group (ERG)
Comment:
The commenter (1052) requests that existing biodiesel production plants be grandfathered under
EPA regulations as in compliance with the 50 percent reduction requirement. Because existing
feedstock sources are already meeting production levels and capable of increases, there are no
land use changes involved, and no significant emissions from any changes can be associated with
existing production. All lifecycle analyses, including EPA's without international land use
changes, show well over 50 percent reduction in emissions. The commenter believes there is
ample support for EPA to grandfather existing facilities by deeming these facilities to be in
compliance with the 50 percent reduction requirement. [[Docket number 1052.1, p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-1005
Organization: Cotner Consulting Services
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Comment:
While the commenter supports having the RFS2 regulations enforceable beginning January 1,
2010 so that the biomass-based diesel requirements are implemented, EPA should use its
regulatory authority to exempt biodiesel facilities that were placed in service prior to December
19,2007. (1005.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2435
Organization: R.W. Heiden Associates LLC
Comment:
The commenter believes that existing production of biodiesel should be deemed to meet the 50
percent GHG reduction requirement for biomass-based diesel. [[Docket number 2435.1, p. 2]]
[[See docket number 2435.1, pp. 2-3 for further discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2519
Organization: Canada, Foreign Affairs and International Trade
Comment:
The commenter (2519) notes that EPA has proposed a grandfathering provision for existing
biofuels production facilities. Specifically, EPA has proposed that the production from plants
which commenced construction in 2008 or 2009 and are fired with natural gas or biomass will be
deemed to be in compliance for a 20% reduction in GHGs. The commenter points out that it is
currently unclear whether foreign plants are included in this ruling. The commenter requests
clarification and would like assurance that existing Canadian production and plants that are
under construction will be granted the same opportunities. [[Docket number 2519.1, p. 2]]
Our Response:
Generally, commenters supported the basic approach in which the volume of renewable
fuel from facilities qualifying for an exemption from the 20% GHG reduction requirement
was limited to baseline volume. Growth Energy objected to the basic approach and argued that
the statute's use of the word "new" and the phrase "after December 19, 2007" provided evidence
that facilities which commenced construction prior to that date would not ever be subject to the
threshold regardless of the volume produced from such facilities. We note first that the statute
does not provide a definition of "new facility," and it is appropriate for EPA to define that term.
For reasons described in the preamble, we believe that in interpreting this term an appropriate
balance between providing an incentive to industry to build new facilities, including expansions,
to modern environmental standards and protecting recent investments from the hardship that
might be imposed as a result of the new program is to view increases above baseline volume of
renewable fuel from a facility that qualifies for the exemptions to be deemed produced from a
new facility that is not subject to the exemption..
Growth Energy also states that EPA's interpretation of EISA is contrary to Congressional
intent because the "statute induced ethanol manufacturers (and manufacturers of other renewable
fuels) to invest in plants and equipment designed to meet the renewable fuels mandate.
Congress, in passing EISA, sought to protect these investments by not making existing plants
subject to new GHG performance standards that were not in effect when such plants were
funded, designed, and built." The commenter argues that our regulations as proposed fail to
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offer such protection by retroactively penalizing early-stage renewable fuel producers. We
believe that the discussion in the NPRM makes clear that this comment is not correct. We stated
in the NPRM that a guiding principle in drafting these regulations was to offer protection for
historical business investments that were made prior to the enactment of EISA. We conducted a
survey of ethanol plants in operation, as well as those not yet in operation but which commenced
construction prior to December 19, 2007. The results of our survey indicated that it is likely that
production capacity of ethanol from all facilities that qualify for this exemption will likely equal
or exceed 15 billion gallons-the amount of renewable fuel that is not advanced biofuel or
cellulosic ethanol which is required to be added to transportation fuel per the new RFS
requirements. Since the baseline volume of the facilities qualifying for the exemption is very
likely to be 15 billion gallons, we do not agree with the commenter that subjecting increases
above the baseline volume could retroactively penalize early-stage renewable fuel producers.
Furthermore, facilities will seek to ensure that the desired and realistically planned capacity of
their facilities will be reflected in applicable environmental permits. Our final rule provides that
baseline volume is to be determined by reference to such permits, rather than actual past
production, unless this is not feasible. Therefore, the regulations do not have any retroactive
punitive effect, but instead are designed to establish the exemption at a level that will provide
appropriate protection to past investments.
Ag Processing stated that the baseline volume should be the greater of the nameplate
capacity of the permitted capacity of the facility. We had proposed in the NPRM that nameplate
capacity be defined as permitted capacity, but that if the capacity was not stipulated in any
federal, state or local air permit, then the actual peak output should be used. We have decided
that since permitted capacity is the limiting condition, by virtue of it being an enforceable limit
contained in air permits, that the term "nameplate capacity" is not needed. Thus, baseline
volume will be based on 105% of the permitted capacity, and in its absence, 105% of the actual
peak output. The 105% represents a tolerance which is discussed in Section 3.4.3.3.
We are defining actual peak capacity to be the maximum annual volume produced for
any of the five calendars prior to 2008 for facilities for which construction commenced prior to
December 19, 2007. For "deemed compliant" facilities, the actual peak capacity is based on the
maximum output achieved during the any calendar year during the first three years after startup.
We had solicited comment on how to convert volume output to annual if the permit
expresses maximum rated volume output on an hourly basis. Ag Processing commented that
although there is downtime, it doesn't always occur on an annual basis, and thus recommended
using the full 8,760 hours per year. We understand that there may be years that there is
downtime, but such an approach would not account for those years in which downtime does
occur. Typically uptimes for ethanol production facilities average 95% per year. Thus, we used a
5% downtime and will require that the hourly output be multiplied by 8,322 hours per year to
obtain the annual output, when such is not specified in permits.
Pennsylvania Energy Resource Group (ERG), R.W. Heiden, and Cotner Consulting
Services commented that existing biodiesel production plants be exempt under EPA regulations
from the 50% GHG reduction requirement applicable to biomass-based diesel. We believe that
the language of the statute is clear that the exemption applies only to the 20% GHG reduction
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requirement. Thus, the final rule does not provide exemptions for the GHG reduction
requirements specified for cellulosic biofuel, biomass-based diesel or advanced biofuel.
3.4.2.2 Changes at Facilities that Increase GHG Emissions
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) noted that while EPA's regulation of expansions at existing facilities
may be reasonable, Congress intended to grandfather entire plants and did not intend to regulate
modifications to the existing equipment. The Act provides incentives to promote improvements
and efficiency to reduce GHG emissions, and regulating modifications would create a
disincentive for facilities to seek to become more efficient or to add equipment that would reduce
GHG emissions. EPA should not limit a facility's flexibility to adjust its operations and maintain
its grandfather status. (2329.1, pp.69-70)
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter notes that the only example EPA provides as potentially troublesome from a
GHG emission perspective is a facility switching from natural gas to coal. This, however, would
require substantial investment and is not likely to occur. Also, EPA indicated that the opposite
would occur, noting plants will "transition from conventional boiler fuels to advanced biomass-
based feedstocks" and pursue combined heat technology. Thus, the commenter believes EPA
should not limit a facility's flexibility to adjust its operations and maintain its grandfather status.
[[Docket number 2249.2, p. 35]]
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated
Comment:
The commenter recommends that changes or process improvements which improve or decrease
GHG emissions, whether the changes facilitate achievement of the 20% GHG reduction
threshold or not, should not cause a revocation of the grandfathered or deemed compliant status
of a facility. (2511.1,p.4)
Document No.: EPA-HQ-OAR-2005-0161-2337
Organization: California Air Resources Board
Comment:
The commenter recommends that facilities lose their grandfathered status if they modify their
operations resulting in an increase in GHG emissions. Moreover, "grandfathered" and "deemed
compliant" status should expire on December 31, 2022. Following this date, all facilities should
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be subject to the 20 percent threshold requirement in order to generate Renewable Identification
Numbers (RIN). (Page 3)
Out Response:
Generally, commenters did not support a provision that would result in facilities losing
their exemption status if modifications they made to their operations resulted in an emissions
increase in GHG emissions. RFA pointed out that this would amount to regulating modifications
and could result in a disincentive for facilities to increase efficiency or to add equipment that
would reduce GHG emissions. We believe the comment has merit and also believe there are
many variations within a plant that cannot be adequately captured in a table of fuel and feedstock
pathways as we proposed (see 74 FR 24927). Implementing such a provision would create
questions of accounting and tracking that would need to be evaluated on a time-consuming case-
by-case basis. For example, a facility that switched from natural gas to coal, but increased the
efficiency of operation elsewhere, may argue that that the increased efficiency offset the decrease
due to the fuel switch. National Biodiesel Board commented out that it is not common for such
fuel switches to occur. Facilities that fire natural gas will tend to keep using natural gas, rather
than switching to coal. For the reasons discussed above, we have decided not to implement that
option. We note, however, one exception to this, in the case of deemed compliant facilities.
Such facilities are deemed compliant if they burn only natural gas, biomass or a combination of
both. Switching to coal would terminate their exemption status, because by definition they
would no longer meet the definition of "deemed compliant".
3.4.2.3 Comments on Allowing Tolerance Limit on Baseline Volume
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
The commenter would support a tolerance on baseline volume that is the greater of 120% of
nameplate capacity, demonstrated maximum annualized capacity or annualized volume as
permitted on current air permit. The commenter also supports the grandfathered status being
valid for an indefinite time period, for the original volumes plus reasonable tolerances as
described above. Volume above and beyond the tolerance amounts would be subject to the 20%
GHG threshold. (2146.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter generally supports the proposed definition of the baseline volume, but believes
that EPA should include a tolerance value to address improved efficiencies in facility operations.
A tolerance level also allows facilities to become more efficient, which would provide additional
GHG benefits. Although EPA suggested 10 percent may be appropriate, the commenter believes
that 20 percent is a reasonable tolerance value for EPA to apply. Twenty percent also gives
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facilities more incentives to increase their efficiencies, which will result in energy savings. On
the other hand, the baseline value should not be based only on 2006 production, as this is not
representative of a facility's potential capacity, but only reflective of the demand that particular
year. Further, the commenter believes EPA should make clear that the facility must be a
renewable fuel facility that was producing renewable fuel prior to enactment. [[Docket number
2249.2, p. 34]]
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated
Comment:
The commenter supports the 10% debottlenecking increase to the baseline volume as proposed in
the preamble. Any volume exceeding the baseline (plus 10% debottlenecking) would be subject
to the 20% GHG reduction threshold.
Document No.: EPA-HQ-OAR-2005-0161-2360
Organization: Archer Daniels Midland Company (ADM)
Comment:
The commenter (2360.1) believes that the rule should grandfather an existing facility up to the
permitted capacity and allow for a 20% tolerance on baseline value to account for such things as
potential improvements in production efficiencies.
Document No.: EPA-HQ-OAR-2005-0161-2472
Organization: Valero Energy Corporation (Valero)
Comment:
The commenter states that baseline volumes for grandfathered facilities should be based on
maximum monthly production with a 10% tolerance and believes that there is no justification for
establishing an overly restrictive definition of facility-specific grandfathered capacity. The
commenter believes that EPA should define the baseline volume for grandfathered facilities as
the actual maximum monthly production during any operating month that occurred prior to the
effective date of this Proposed Rule, plus 10%. Once the baseline volume as defined above is
exceeded, the increase above baseline volume would be subject to the 20% GHG reduction
requirement in order to generate RINs. [[Docket number 2472.1, pp. 9-10]]
Our Response
Most commenters favored the concept of a tolerance, although some favored 10% and
others 20%. When we had solicited the comment about a tolerance, we were keeping open all
options for structuring the basic exemptions, including the options for an expiration of the
exemption. In light of our final decision to exempt baseline volume for an indefinite period, we
have decided that a 10% (and 20%) level is not appropriate for this regulation for the following
reasons: 1) our decision to interpret the exemption of the baseline volume of renewable fuel
from the 20 percent requirement will extend indefinitely; thus, any tolerance provided could be
present in the marketplace for a considerable time period; 2) increases in volume of 10% or
greater could be the result of modifications other than debottlenecking, and 3) we are allowing
baseline volume to be based on the maximum capacity that is allowed under state and federal air
permits. With respect to the last reason, facilities that have been operating below the capacity
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allowed in their state permits would be able to claim a baseline volume based on the maximum
capacity. As such, these facilities may indeed be able to increase their volume by 10 to 20
percent by virtue of how their baseline volume is defined. We believe this is appropriate,
however, since their permits should reflect their design, and the fuel resulting from their original
pre-EISA (or pre-2010, for deemed compliant facilities) design should be exempt from the 20%
GHG reduction requirement.
We do recognize and agree with commenters that some allowances should be made for
minor changes brought about by normal maintenance which are consistent with the proper
operation of a facility. EPA is not aware of a particular study or analysis that could be used as a
basis for picking a tolerance level reflecting this concept. We believe, however, that the value
should be relatively small, so as not to encourage plant expansions that are unrelated to
debottlenecking. We believe that a 5% tolerance level is consistent with these considerations.
3.4.2.4 Restriction of Deemed Compliant Facilities to Produce Only Ethanol
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP)
Comment:
The commenter (2384) states that the discussion of the 20% threshold recognizes no linkage
between ethanol production and grandfathering for facilities operating or under construction
prior to December 19, 2007. The language for the "deemed compliant" facilities that
commenced construction in 2008 and 2009 comes from EISA 2007 210(a)(l). This language
does suggest a requirement that the deems compliant facility be an ethanol plant in calendar
years 2008 and 2009 but does not require that the plant remain an ethanol plant in future years.
[[Docket number 2384.1, pp. 6-7]]
The commenter recommends the following relevant principles for evaluating conversion of an
exempt ethanol facility to the production of different renewable fuel:
-Protection of historical investment.
-Avoidance of long-term backsliding on environmental performance.
-Encouragement of new technologies. [[Docket number 2384.1, pp. 6-7]]
Our Response
The language in EISA is specific that "deemed compliant" facilities are exempted from
the 20% GHG threshold only if the plants use natural gas, biomass or combination, and that only
ethanol is produced. The language is straightforward and provides no indication that different
renewable fuels may be produced after 2009 as the commenter suggests. We note, however, that
facilities that commenced construction prior to December 19, 2007, are not restricted to only
ethanol production to qualify for the exemption. We apply the exemption, however, only to that
volume of renewable fuel that does not exceed baseline volume.
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3.4.3 Alternative Options
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2079
Organization: AE Biofuels, Inc.
Comment:
The commenter (2079.1) with respect to option 2, or expiration of grandfathered status after 15
years, believes that this option is tolerable, as it is clear and concise in its scope, and leaves no
doubt as to what may or may not qualify for "grandfathering." The commenter believes that
option 3 is more tolerable than option 2, as the criteria is even clearer. The commenter finds
option 4 interesting, but again, would create many of the same problems of a facility being
unable to integrate cellulosic production technology into an existing production facility without
risking being excluded from grandfathering and thus RIN generation. With regards to option 5,
or indefinite exemption and no limitations on baseline volumes is the most preferred, as it
enables industry to innovate and increase advanced renewable biofuels production capacity,
without the compliance burden and risk of being disqualified by the EPA for any hybrid
solutions and/or integration that might be the most efficient solution. (2079.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2106
Organization: Endicott Biofuels II, LLC
Comment:
The commenter (2106) suggests the EPA consider grandfathering only those facilities that have
shown consistent production and operation and consistent demonstration of meeting ASTM
quality specifications for the 12 months prior to enacting RFS2. The facilities should be capped
at the then current operating limits of the legally permitted capacity at the time RFS2 is enacted.
The facility should also be able to document from historical testing data that it was able to
produce at the permitted capacity. Expiration of grandfathering would then follow 15 years after
EISA enactment as in EPA proposal. This would allow currently financially viable facilities
with significant investments to continue in operation and support the mandated levels of
renewable fuels. This boundary would also provide for adequate market pricing signals which
are necessary to incent new investment in more sustainable projects with genuine GHG
reductions that meet EPA requirements. [[Docket number 2106.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
Regarding regulations governing the grandfathering of conventional renewable fuels in EISA,
the commenter (2130) supports EPA's limiting grandfathered volumes to the best three-month
average during the first two years of operation. Moreover, the grandfathering should sunset no
later than 15 years after enactment of EISA (no later than 2022. [[Docket number 2130.1, pp. 10-
11]]
Document No.: EPA-HQ-OAR-2005-0161-2393
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Organization: American Petroleum Institute (API)
Comment:
Regarding the time period that should accompany grandfathering, the commenter (2393) believes
that without a time limit on grandfathering, there may be little incentive to further reduce GHG
emissions from existing bio-refineries. The commenter also states that EPA has extended the
definition of "grandfathering" far beyond what Congress intended. EPA should be using a 12
month time period after December 19, 2007 instead of a 36 month time period. [[Docket number
2393.1, pp. 40-41]]
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter does not believe that grandfathered facilities should be exempted indefinitely
and agrees with the 15 year expiration of exemption for all grandfathered facilities. The
commenter also agrees that biofuel facilities should lose their grandfathered status if they make
any changes that result in an increase in GHG emissions for the baseline volumes. The
commenter believes that EPA should limit grandfathering to only the fuel pathways that applied
in 2007. The commenter also agrees that if coal-fired units are replaced on grandfathered
facilities, they must be replaced by natural gas and/or biomass-fired units. (2124.1, p.25)
The commenter also agrees that EPA should require grandfathered facility owners to annually
report, starting in 2010, the expenses for replacements, additions and repairs and that EPA
should use these reports to determine when the facility effectively becomes new due to
rebuilding or modernization. (2124.1, p.25)
The commenter also agrees that EPA should require grandfathered facility owners to annually
report, starting in 2010, the expenses for replacements, additions and repairs and that EPA
should use these reports to determine when the facility effectively becomes new due to
rebuilding or modernization. (2124.1, p.25)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) believes that once EPA has published the GHG thresholds and fuel
pathways for biofuels, this will largely influence the future behavior of an existing plant.
Without a time-limit on grandfathering, ethanol plants may have little or no incentive to further
reduce GHG emissions. The commenter adds that EPA has extended the definition of
"grandfathering" far beyond what Congress intended; EPA should use a 12 month time period
after December 19, 2007 instead of a 36 month time period. [[Docket number 2233.2, p. 44]]
[[See docket number 2233.2, pp. 43-44 for the commenter's detailed discussion related to EPA's
grandfathering scenarios.]]
The commenter agrees with EPA that grandfathering provisions do not apply to advanced
biofuels, biomass-based diesel or cellulosic biofuels. [[Docket number 2233.2, p. 47]]
Document No.: EPA-HQ-OAR-2005-0161-2374
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Organization: Amyris Biotechnologies, Inc. (Amyris)
Comment:
In principle, the commenter (2374) does not support grandfathering of facilities as they believe
that all biofuels should be superior to the petroleum baseline. Such a waiver will result in unfair
commercial advantages without GHG benefit. As to practical implementation, the commenter
suggests such waivers have specific limited period with a critical focus on the objectives of
reducing the carbon intensity of transportation fuels and reducing the nation's reliance on
petroleum derived transportation fuels [[Docket number 2374.1, p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-2491
Organization: International Council on Clean Transportation (ICCT)
Comment:
The commenter (2491) does not think that there should be an indefinite extension of the
grandfathering provision, even with limitations. [[Docket number 2491.1, p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-2497
Organization: Wisconsin Department of Natural Resources
Comment:
The commenter (2497.1) supports Option 2, which is the expiration of the grandfather exemption
15 years after EISA enactment, industry-wide (-2022). The commenter also supports the
provision of removal of grandfather status for currently operating facilities if they switch to a
process fuel or feedstock resulting in a net increase of greenhouse gas (GHG) emissions. The
commenter also supports allowing a 10% increase in a facility's baseline before triggering
revocation of grandfather status. (2497.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) believes that EPA should limit the exemption to the volumes of fuels
produced at qualifying facilities as of the date of enactment, and EPA should sunset the
exemption. Both of these limitations to the exemption are consistent with congressional intent.
Congress clearly intended the renewable fuels provisions of EISA to result in greenhouse gas
emission reductions. It is consistent with that intent to limit the exemption to the volumes
produced at the date of enactment. (2505.2, p.3)
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) generally supports EPA's proposed approach, but believes alternatives
(1), (2) and (3) go against the statutory language and Congressional intent. The commenter
believes that EPA's Alternative 5, referred to as the Greenfield Approach, best expresses the
statutory language and Congressional intent. (2329.1, p.67) [[See Docket Number 2329.1, pp.
67-68 for a detailed discussion of Alternative 5]]
With regards to Alternative (1), the commenter believes that it ignored the language and intent of
the statute. EPA cannot determine if a facility is "new" based on actions dating as far back as the
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"startup" of the facility. The purpose of a grandfathering clause is to protect existing investment.
Under this proposal EPA would require facilities to account for actions taken well before the
EISA was enacted. This undermines the purpose of a grandfather clause. EPA must also clarify
the reporting requirements under this approach. In particular, costs of routine maintenance and
repair should not be included in such assessments. Also, facilities should not be required to find
records of costs dating back to "startup" of the facility. If EPA goes down this road, it should
limit the time period to consider costs to post-enactment, which at least recognizes the fact that
Congress sought to protect pre-EISA investment, if not comply with the statutory provisions.
(2329.1, pp. 71-72)
With regards to Alternative (2) & (3), the commenter also believes that it is contrary to the
language and intent of the statute. The 15-year limit is based on an underlying assumption that
facilities are reconstructed over a set period of time-an estimated 15 years for ethanol plants.
This may not be factually correct. The statute expressly refers to "new facilities" and making
existing facilities "new" on a date certain beyond the dates in the statute is illegal. EPA simply
has no authority to place a time limit on the grandfathering provided by Congress. The
commenter believes that the 15 years is wholly arbitrary. Imposing time limits on the
grandfathering provision undermines the purpose of a grandfathering statute to protect pre-
enactment investment. (2329.1, pp.72-73)
Document No.: EPA-HQ-OAR-2005-0161-2079
Organization: AE Biofuels, Inc.
Comment:
With regards to option 1, in which facilities are considered new if they meet the definition of
reconstruction as defined by the EPA, the commenter believes that such a provision would
eliminate the possibility of any renewable fuel production facility electing to integrate a
cellulosic or second-generation ethanol production technology into their process. (2079.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2106
Organization: Endicott Biofuels II, LLC
Comment:
The commenter (2106) suggests the EPA consider grandfathering only those facilities that have
shown consistent production and operation and consistent demonstration of meeting ASTM
quality specifications for the 12 months prior to enacting RFS2. The facilities should be capped
at the then current operating limits of the legally permitted capacity at the time RFS2 is enacted.
The facility should also be able to document from historical testing data that it was able to
produce at the permitted capacity for a reasonable time period. Expiration would then follow 15
years after EISA enactment as in EPA's proposal. This would allow currently financially viable
facilities with significant investments to continue in operation and support the mandated levels of
renewable fuels. This boundary would also provide for adequate market pricing signals which
are necessary to incent new investment in more sustainable projects with genuine GHG
reductions that meet EPA requirements which we presume is the primary goal. [[Docket number
2106.1, p. 1]]
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
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Comment:
The commenter (2249.2) believes that Alternative 1 (Reconstruction) and Alternatives 2 and 3
(Time Limited Grandfathering) are contrary to the statute. [[Docket number 2249.2, p. 35]]
The commenter states that Alternative 1 is overly burdensome and ignores the intent of Congress
to grandfather "facilities." Moreover, requiring facilities to provide information to EPA
regarding any action it takes to maintain their facility is overly burdensome, and creates
disincentives for increasing a plant's efficiency and reducing its overall GHG emissions. This
approach should be rejected outright. [[Docket number 2249.2, pp. 35-36]]
The commenter adds that similarly, Alternatives 2 and 3, which propose to end grandfathering
after 15 years, should be rejected outright. The 15-year limit is based on an underlying
assumption that facilities are reconstructed over a set period of time. This may not be factually
correct and is irrelevant based on the statutory language. This approach does not give meaning to
Congress' use of the words "new facilities" in that it makes existing facilities "new" on a date
certain, even if they have not been reconstructed, and undermines the purpose of a
grandfathering statute to protect pre-enactment investment. The commenter believes that EPA
has no authority to place a time limit on the grandfathering provided by Congress. [[Docket
number 2249.2, p. 36]]
Document No.: EPA-HQ-OAR-2005-0161-2363
Organization: Ag Processing Inc.
Comment:
The commenter (2362) offers the following recommendations related to four of the five
alternative approaches:
This concept of using "reconstruction" for retiring grandfathered volumes does not work under
RFS2. RFS2 may require replacement of equipment with entirely different processes. There is
no allowance for switching to more economical fuels. There is no "cost-effectiveness
evaluation." There are no set impact thresholds for any increase in emissions.
This is one of the most blatant violations of EPA's own stated goals in the proposed rule.
EPA states "At the same time we also want to offer protection for historical business
investments that were made prior to enactment of EISA.
No proposal could contradict EPA's stated goal more than the idea of using New Source
Performance Standards (NSPS) to interpret the EISA Grandfather Clause.
Ethanol plants have been operating since the late 1970s and early 1980s. These plants
will have had numerous upgrades and expansions in the past 25-30 years in order to stay
competitive and comply with ever increasing safety, health and environmental
regulations.
Even if an old plant has been completely rebuilt prior to the date of enactment such
business decision should surely not be interpreted as thereby disqualification for
grandfathering.
Nowhere does EISA say that EPA should revoke the grandfather clause after ANY period
of time. EPA's proposals to revoke the clause goes beyond the law and is clearly
designed to kill any future growth in corn ethanol.
EPA has relied on conjecture from construction and engineering companies that
producers will upgrade existing plants with equipment that will somehow bring such
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plants in under the 20% cap for "new" plants. In fact, EPA's proposals-taken in their
entirety, will put a chilling effect on any further investment in existing corn based ethanol
plants. [[Docket number 2363.1, p. 12]]
Regarding debottlenecking, the commenter notes that a facility is typically permitted at its
bottlenecked capacity. The nameplate capacity of a facility could be determined by the highest
capacity of the "significant" production components of a process, as long as the cost of
debottlenecking does not exceed 25 percent of the cost of the existing facility. [[Docket number
2363.1, p. 12]]
Document No.: EPA-HQ-OAR-2005-0161-2472
Organization: Valero Energy Corporation (Valero)
Comment:
The commenter (2472) is concerned about the 15-year sunset provision discussed in the
proposed rule. The commenter believes that limiting the grandfathering provision by either a sun
setting provision or an overly restrictive definition of baseline volume will impede, and possibly
prevent, the orderly financial recovery of the corn-based ethanol industry. [[Docket number
2472.1, pp. 8-9]] [[See Docket number 2472.1, pp. 8-9 for extensive discussion of the
commenter's concerns related to Grandfathering.]]
Document No.: EPA-HQ-OAR-2005-0161-2491
Organization: International Council on Clean Transportation (ICCT)
Comment:
The commenter (2491) believes that of five additional options presented for grandfathering
facilities, option (2) is the most appropriate provision since it protects the business interests, and
is less costly to implement, monitor and verify. This option puts less burden on facility operators
with regard to record keeping, and also provides an incentive to improve or modify the
processes. Therefore, when the grandfathering provision expires after 15 years, the
grandfathered facilities would be in a good shape to meet the 20% GHG reduction requirement.
The option (2) can be imposed industry-wide so that facilities small or big will not be
discriminated. [[Docket number 2491.1, p. 2]]
Our Response:
Some commenters supported the option of an expiration date, specifically API, NPRA
some refining companies and others. Renewable Fuels Association, the National Biodiesel
Board, Ag Processing and several other commenters did not support that option, nor the
reconstruction and facility options (Options 2 and 3).
Generally, commenters who supported an expiration of the exemption did so because of
concerns that the basic approach of providing an indefinite exemption would not provide any
incentives to bring these plants into compliance with current standards. They also objected to
plants being allowed an indefinite exemption despite the fact that such plants have long since
paid off their investors. Commenters who did not support the expiration option, opposed it
because they felt it was a violation of the statute. Valero Energy claimed that such a limit
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would "impede, and possibly prevent, the orderly financial recovery of the corn-based ethanol
industry."
EPA believes that it would enhance the environmental protection goals of the Act to
establish an expiration date for the exemption, and that, on the other hand, such an approach
may lead to closures of plants that might find it too expensive to retrofit at the end of the
exemption period. Such a result would not further the energy independence goals of the
statute. Thus, a decision in either direction could both enhance and detract from important
goals of the statute. With these factors in mind, we have decided not to adopt one of the
exemption options for two primary reasons. First, our approach to limiting the exemption to
baseline volumes means that there is less of a justification for an expiration of the exemption
than if we had chosen an option such as exempting all volumes of fuel that could be produced
into the indefinite future from qualifying facilities and their expansions. Second, we find the
approach closer to the text of the statute, which does not specifically suggest a temporal
limitation.
There were few comments addressing the "facility" approach, and the indefinite
grandfathering approach in which the exemption status is not limited to baseline volume, but to
whatever volume of renewable fuel the plant may produce. With respect to the latter option, the
Renewable Fuels Association stated that such approach best expresses the statutory language and
Congressional intent. However, we see nothing in the text of the statute to suggest that the
expanded production from facilities that qualify for the exemption, and which may be based on
major construction into the indefinite future, should also qualify for the exemption. We believe
that the approach we have selected for the final rule will provide appropriate protection to
existing investments, while requiring that new volumes be produced in accordance with the GHG
standards specified in EISA.
3.5 Generation of RINs
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2412
Organization: Xebec Adsorption Inc.
Comment:
The commenter (2412.1) proposes that EPA lead the world by including a requirement for the
suppliers of fossil-based natural gas to generate RINs, calculated as a percentage of that portion
of the product that the entire industry supplies for use as transportation fuels. We recommend
that EPA apply this requirement industry wide, to all suppliers of Natural Gas. This will serve to
share the burden of cost and not dissuade any specific gas supplier from selling small volumes of
gas to fledgling NGV fuel providers. The commenter believes that this strategy will encourage
the continued growth and expanded environmental benefits of the industry. (2412.1, p.4)
Our Response:
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CAA 211 (o) specifies that only renewable fuels are valid for meeting the volume
mandates. The statute does not provide authority for EPA to allow fossil-based natural gas to
generate RINs, regardless of whether that natural gas is used in transportation.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) believes that each RIN should continue to be generated by the producer
or importer of the renewable fuel, as is the case under the RFS1 program. (2146.1, p.2)
Our Response:
While we examined various approaches to the designation of RIN generators in the RFS1
rulemaking, we did not take comment on alternatives to the final RFS1 approach in the RFS2
NPRM. We continue to believe that the RIN system operates most efficiently when RINs are
generated by producers and importers of renewable fuel.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2548
Organization: Xyleco, Inc.
Comment:
To provide the legal certainty necessary for innovation, EPA should make clear in the final rules
that, even in the event of litigation, (1) pathways remain approved until modified following the
procedures of the final rules, (2) RINs generated by producers following an authorized pathway
remain valid, and (3) producers who produce in good faith in compliance with those approved
pathways are not vulnerable to compliance sanctions.
Our Response:
The pathways in the lookup table in §80.1426 (f) for which D codes have been assigned
remain valid for RIN generation until modified through a notice-and-comment rulemaking. In
the event of a court-ordered suspension of any portion of the RFS2 regulations, or during the
period of any litigation, the court would indicate whether and under what conditions pathways in
the lookup table at §80.1426(f) would continue to be valid for RIN generation.
3.5.1 Equivalence Values
3.5.1.1 Supports Energy-based Approach to Equivalence Values
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) requests that RFS2 continue to use the RFSI Equivalence Values for
Biofuels on the basis of energy content. This will support the marketplace demand for Biofuels
above their specified minimum. (0994.1, p.7)
Document No.: EPA-HQ-OAR-2005-0161-2110
Organization: Chevron
Comment:
The commenter (2110.1) believes that the energy-content-based equivalency values are
appropriate. (2110.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) supports retaining the energy density-based approach to equivalence
values. An energy density-based approach helps provide a level playing field for all existing and
future potential renewable fuels. The commenter prefers the simplest approach, which would be
to provide weighting factors and the factored RIN volumes would be used to meet the standards
(i.e., the biomass-based diesel standard). (2124.1, p.21)
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) states that EPA's RFSI equivalence values for the various renewable
fuels based on energy density is a reasonable mechanism and should be retained to encourage the
use of higher energy density fuels. [[Docket number 2130.1, p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) believes that equivalence values should be based on the energy and
renewable contents of each renewable fuel against a baseline of denatured ethanol, consistent
with the approach used under the original RFS program. The commenter also believes that EPA
is correct to convert volumes of biomass based diesel to ethanol-equivalent volumes. The
commenter also agrees with EPA's proposal to treat the denaturant in ethanol and the
nonrenewable portion of biodiesel as de minimis, thus counting these portions as part of the
renewable fuel compliance volume. (2132.1, pp.6-7) [[See Docket Number 2132.1, pp.14-15 for
a detailed discussion on equivalence values]]
Document No.: EPA-HQ-OAR-2005-0161-2143
Organization: New York State Department of Environmental Conservation
Comment:
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The commenter (2143) recommends that the current method of generating RINs based on
equivalent amounts of fuel energy must be retained. The commenter (2143) argues that the
volume based program provides an inappropriate market advantage to low volumetric energy
content renewable fuels.(2143.2, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2145
Organization: Flint Hills Resources
Comment:
The commenter (2145.1) supports retaining the energy-based approach of the RFS1 program.
(2145.1, p.7)
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) recommends continuing the use of Equivalence Values as under RFS1.
This approach is consistent with Congressional intent to support use the development and use of
advanced biofuels, and is an appropriate measure of the biofuel's ability to replace overall fossil
fuel use and impact on the transportation sector. (2146.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2149
Organization: Dynamic Fuels, LLC
Comment:
The commenter (2149.1) agrees with option one, which would continue to apply equivalence
values based on the energy content and renewable content of each renewable fuel in comparison
to denatured ethanol, consistent with the approach under RFS1. The commenter also believes
that this should continue to apply to the biomass-based diesel category. (21491.1, p.3)
The commenter noted that if the second option is chosen, and all liquid renewable fuels are
counted strictly based on their measured volumes, the commenter believes the non-renewable
content of the fuels should be treated as de-minimus. The main reason is that this approach
would simplify recordkeeping for us and other renewable fuel companies. (2149.1, pp.3-4)
Document No.: EPA-HQ-OAR-2005-0161-2154
Organization: ConocoPhillips
Comment:
The commenter (2154.1) supports retaining the current energy based equivalence values.
(2154.1, pp.5-6)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) believes that the concept of equivalence values, the weighting of
renewable fuels volumes to account for differences in energy content, made sense for RFS1 and
makes sense for RFS2. EPA should continue this practice. The use of equivalence values is
necessary for the total and advanced renewable category because many different renewables will
be combined in these categories. The commenter further states that it is essential that cellulosic
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diesel get some credit for the extra energy it supplies to U.S. transportation and the refinery
based renewable diesel should get credit for the extra BTUs it provides. [[Docket number
2233.2, p. 8]]
Document No.: EPA-HQ-OAR-2005-0161-2337
Organization: California Air Resources Board
Comment:
The commenter (2337.1) recommends that U.S. EPA calculate equivalence values for fuels
based on the energy content (ethanol equivalent gallons) and not on volume. The use of energy
equivalence values will create a more level playing field for the production of different fuels
from the same feedstock.
Document No.: EPA-HQ-OAR-2005-0161-2358
Organization: Society of Independent Gasoline Marketers of America (SIGMA) and the
National Association of Convenience Stores (NACS)
Comment:
The commenter (2358) believes the equivalence values should be based on a fuel's energy
content rather than its volume—this approach is more consistent with the program goal of
displacing fossil fuel. Using a volume-based equivalence value would put the fuels capable of
displacing the largest amount of fossil fuels at a cost disadvantage. [[Docket number 2358.1, p.
5]]
Document No.: EPA-HQ-OAR-2005-0161-2364
Organization: Tyson Foods, Inc.
Comment:
The commenter (2364.1) agrees that equivalence values need to be applied based on the energy
content and renewable content of each renewable fuel in comparison to denatured ethanol,
consistent with the approach under RFS1. The commenter believes that this should continue to
apply to the biomass-based diesel category. The commenter believes that a change in how
Equivalence Values are applies could negatively impact the value of Dynamic Fuels" product. A
change would also represent a flawed fix. The commenter noted that if EPA chose the second
option, and all liquid renewable fuels are counted strictly based on their measured volumes, then
the commenter believes the non-renewable content of the fuels should be treated as de minimus.
The main reason is that this approach would simplify recordkeeping for us and other renewable
fuel companies. In addition, because the non-renewable content is typically a small fraction of
the overall volume of each alternative fuel, little benefit would be gained from the precision.
(2364.1, pp.3-4)
Document No.: EPA-HQ-OAR-2005-0161-2365
Organization: Neste Oil Holding, Inc
Comment:
The commenter (2365.1) believes that the existing methodology for calculating equivalency
value in the Renewable Fuel Standard remains very relevant and should not be altered. (2365.1,
p.2)
Document No.: EPA-HQ-OAR-2005-0161-2384
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Organization: BP America (BP)
Comment:
The commenter (2384) agrees with EPA's assessment of this issue in the RFS1 regulations and
agrees with maintaining the use of equivalence values for RFS2. The commenter believes that
equivalency values based on energy content and renewable content are the appropriate yardsticks
for determining how different types of fuel deliver the goals of RFS2. [[Docket number 2384.1,
pp. 4-5]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) supports EPA's use of fuel energy content as the basis of establishing
RIN equivalence values and adds that equivalence values should be uniformly applied to all
renewables, regardless of production means or use location. This approach was used in the
RFS1 regulations and should be continued under RFS2 as a sound basis for weighing the relative
energy contribution by the mandated renewables. [[Docket number 2393.1, p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment:
The commenter (2408.1) supports the continuation of the current EPA approach basing the
equivalence values on the energy content and renewable content of each renewable fuel in
comparison to denatured ethanol, which is consistent with the approach under RFS1. This
approach is also consistent with other energy sectors for non liquid-energy fuels such as biogas
and renewable electricity. The commenter is concerned that the failure to utilize an energy
density approach will lead to the diversion of feedstocks away from fuels and toward other
energy sources, thus making it more difficult to reach the gallons mandated under the statute.
(2408.1, p.2)
The commenter encourages EPA to simply take the current energy density program and apply it
forward to each of the distinct categories under the redesigned RFS2. (2408.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2106
Organization: Endicott Biofuels II, LLC
Comment:
The commenter (2106) proposes the continued use of energy content as finalized in RFS1 rather
than volume as is proposed as an alternative. The commenter is concerned is that if Obligated
Parties are measured on compliance using volume only, we believe this will erode the value of
RINs associated with the newly developed categories of renewable fuels which have an
inherently higher energy content per gallon when using the ethanol equivalency basis. This
ethanol equivalency tends to incent the highest use of renewable feedstocks into delivering the
most energy dense fuels which are in turn most efficient to transport and deliver to the end users.
[[Docket number 2106.1, p. 5]]
Our Response:
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As discussed in Section II.D.I of the preamble to the final rule, we generally agree with
the above comments in 3.5.1.1, and have finalized an energy-based approach to Equivalence
Values that is consistent with the approach taken in RFS1.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) supports EPA's proposal to retain equivalence values for biodiesel and
renewable diesel, but not for those RINs being used toward the biomass-based diesel or
advanced biofuel mandates. Unlike the existing RFS program where biodiesel is competing with
corn ethanol, the advanced biofuel mandates should be met on a gallon to gallon basis. [[Docket
number 2249.1, p. 5]]
However, the commenter also recognizes that the existence of four standards under RFS 2 may
not obviate the value of standardizing for energy content, which provides a level playing field
under RFS1 for various types of renewable fuels based on energy content. Thus, the commenter
believes that equivalence values under RFS 1 should remain in use for the renewable fuel
category under RFS2. This category represents the RIN marketplace under RFS1 and fuels with
higher ethanol equivalent energy content should be able to demonstrate their favorable energy
profile in this category. [[Docket number 2249.2, p. 32 and docket number 2249.1, p. 5]]
Our Response:
As discussed in Section II.D.I of the preamble, we are retaining the energy-based
approach to Equivalence Values promulgated with the RFS1 final rule for all renewable fuels.
However, as described in Section II.E.I of the preamble, we are treating the biomass-based
diesel volume mandate as biodiesel equivalent volume, while treating the volume mandates for
cellulosic biofuel, advanced biofuel, and total renewable fuel as ethanol-equivalent volumes. To
accomplish both of these goals, we have adjusted the biomass-based standard by the 1.5
Equivalence Value for biodiesel.
We do not believe that it would be appropriate to treat the advanced biofuel mandate as
actual volume rather than as ethanol-equivalent volume. While the biomass-based diesel
mandate is clearly intended to represent diesel fuel and diesel fuel substitutes, the advanced
biofuel mandate can be met with any type of renewable fuel. To treat the advanced biofuel
mandate as actual volume would require that we presume a specific mixture of renewable fuels
in setting the standard, and apply the appropriate Equivalence Value to each type of renewable
fuel in a manner similar to the way we have set the standard for biomass-based diesel. The
advanced biofuel standard would then depend on the mixture of renewable fuel types that we
assume will be produced. Since doing so would b equivalent to EPA choosing what renewable
fuel types should be produced or imported, we do not believe this would be appropriate.
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3.5.1.2 Supports Straight Volume Approach to Equivalence Values
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated
Comment:
The commenter (2511.1) noted that since EISA targets are defined in terms of volume, a 1:1
valuation for all categories of RINs should be used.
Document No.: EPA-HQ-OAR-2005-0161-0999
Organization: Darling International Inc.
Comment:
The commenter (2151.1) supports EPA's decision in the NPRM to adopt the straight volume
approach for measuring renewable fuel to calculate compliance with the volume mandates of
RFS2, rather than taking the approach to incorporate equivalence values for renewable fuels
based on their energy content. Specifically, the commenter supports EPA's decision to adopt the
straight volume based requirement to calculate compliance for biomass based diesel. (2151.1,
P-4)
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that EPA should not retain the current equivalence values. If
EPA does retain equivalence values, the commenter would support setting the values at 1 for all
liquid fuels and all of the volume mandates. (2329.1, pp.89-90)
Document No.: EPA-HQ-OAR-2005-0161-1033
Organization: Poet Ethanol Products
Comment:
The commenter (1033.1) supports EPA's proposal of shifting the RINS value of all renewable
fuels to be based on the fuel's measured volume as opposed to the existing equivalence value
formulas. (1033.1,p.2)
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
The commenter (1044.1) supports the proposal that demonstrates the generation of 1 RIN for 1
gallon because this concept demonstrates the actual gallons produced and distributed in the
system to ensure 100% compliance without error. The commenter believes that EPA's concern
that the market will not respond and RINs may not have values is unfounded because recent
developments in the RIN trading markets indicate otherwise. (1044.1, p. 1)
Document No.: EPA-HQ-OAR-2005-0161-2119
Organization: National Sorghum Producers
Comment:
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The commenter (2119.1) is in favor of a straight volume approach to measuring liquid gallons of
renewable fuel. The commenter believes that an energy-based approach would favor biodiesel
and could result in not meeting the specific gallons of advanced biofuel as specified in EISA. By
using a straight volume approach, the amount of advanced biofuel as specified in EISA would be
produced at the most efficient level. The commenter believes that the final rule should provide a
clear incentive to produce both advanced ethanol and biodiesel. (2119.1, pp.4-5)
Document No.: EPA-HQ-OAR-2005-0161-2360
Organization: Archer Daniels Midland Company (ADM)
Comment:
The commenter (2360.1) believes that since EISA expanded the renewable fuels program to
include four separate categories of renewable fuel with its own volume requirement, there may
no longer be a need for Equivalence Values greater than 1.0. The commenter also supports
EPA's proposal that all liquid renewable fuels should be counted strictly on the basis of their
measured volumes, and the Equivalence Values for all renewable fuels should be 1.0. This
would greatly simplify the program and result in fewer calculation errors. (2360.1, pp.6-7)
Document No.: EPA-HQ-OAR-2005-0161-2400
Organization: Murphy Oil USA, Inc.
Comment:
The commenter recommends all Equivalence Values for all renewable fuels be 1.0. The
commenter recommends that the EPA keep the RIN types separated utilizing the different D-
codes. By using the different RIN types instead of equivalency values, it forces certain types of
renewable fuels to be blended in, and one type (corn ethanol) cannot be used to meet the
obligation for another (biodiesel).
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated
Comment:
The commenter (2511.1) encourages EPA to use a 1:1 valuation of RINs under the RFS2
program. Based on the volume thresholds outlined in the RFS2 schedule, using an equivalence
value of 1.5:1 would be allowing extra credit for biodiesel. (2 511.1, p. 7)
Document No.: EPA-HQ-OAR-2005-0161-1050
Organization: American Council for Ethanol (ACE)
Comment:
Initially, the commenter (2101.1) strongly disagreed with EPA's proposal to create equivalency
values for a range of fuels. Therefore, the commenter pleased that EPA is planning to enforce a
straight volumetric approach for RFS2, this is especially appropriate given the nested standards
that have been established in RFS2 for various forms of advanced and cellulosic biofuel.
(2101.1, p.15)
Our Response:
The commenters provided little support for their preference that Equivalence Values be
based strictly on measured volumes. Although some commenters believe that the use of an
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energy-based approach would provide extra credit to renewable fuels other than ethanol, in fact
this approach would ensure that all renewable fuels are valued the same in terms of their ability
to displace fossil-based transportation fuels. Therefore, as discussed in Section II.D.I of the
preamble, we are maintaining the energy-based approach to Equivalence Values promulgated
under RFS1.
3.5.1.3 Other Aspects of Equivalence Values
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter supports the proposal to change ethanol energy content from 77,550 Btu per
gallon to 77,930 Btu per gallon. (2329.1, pp.89-90)
Our Response:
We agree with the need for a change to the volumetric energy content of ethanol.
However, as described in Section III.D.I of the preamble, we are finalizing an energy content for
ethanol of 77,000 Btu/gal.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1050
Organization: American Council for Ethanol (ACE)
Comment:
The commenter is aware of several corn ethanol producers who have been able to generate 2.5
credits for every gallon of ethanol produced under RFS1 because they have implemented a low
carbon technology to power their ethanol facility. The commenter thinks it is unfair to arbitrarily
take this opportunity away from those producers, so the commenter recommend that EPA
consider a plan to gradually phase out the 2.5:1 credit. (2101.1, p. 15)
Document No.: EPA-HQ-OAR-2005-0161-2548
Organization: Xyleco, Inc.
Comment:
EISA displaces the explicit statutory-mandate of a 2.5 equivalence ratio. However, EISA
prescribes that EPA shall make available credits at statutorily prescribed prices to enable
obligated parties to demonstrate compliance. The Act further delegates to EPA broad authority
to establish a credit regime that promotes cellulosic biofuels. EPA should reinstate credit
advantages for cellulosic biofuels and sharpen the incentives for new innovative technologies, to
ensure continuation of the targeted incentives necessary for renewable fuels development. At a
minimum, EPA should maintain the existing credit incentives through 2012, the period of
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establishment contemplated by EPAct that market participants such as Xyleco have relied on in
making investments and developing innovative cellulosic biofuels production processes.
Our Response:
EISA eliminated the provision originally created in CAA 211 (o) by the Energy Policy
Act of 2005 which gave 2.5:1 credit to any ethanol if 90% of the facility's process energy is
derived from renewable sources. Given the changes to the RFS standards and requirements for
what fuels qualify for those standards that were brought about by EISA, we do not believe it
would be appropriate or in keeping with the intent of the Act to continue to provide such
additional credit for these fuels. Once the provisions of the revised CAA 211 (o) are
implemented through the RFS2 regulations, the 2.5:1 credit provision ceases to be applicable.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2137
Organization: Brazilian Sugarcane Industry Association (UNICA)
Comment:
Urging EPA not to wait for the final endangerment finding, the commenter (2137.1) asks that the
Agency promote the use of the lowest GHG emitting renewable fuels. The commenter
recommends that EPA establish in the final RFS2 rule that the best performing renewable fuel
pathway in any given RFS2 category would receive commensurately higher equivalence values
based on their relative reduction in GHG emission (Code "RR" in 38-digit Renewable
Identification Numbers, RIN codes). The commenter further states that in the absence of such a
requirement, the renewable fuel with the lowest price—not necessarily the fuel with the lowest
GHG emissions—would be consumed in the greatest quantity. In contrast, by including such a
requirement, there would likely be greater demand for the fuels with lower GHG emissions as
compared to conventional renewable fuels. [[Docket number 2137.1, p. 16]]
Document No.: EPA-HQ-OAR-2005-0161-2154
Organization: ConocoPhillips
Comment:
The commenter believes it appropriate to provide additional equivalency value relative to the
GHG value of the utilized renewable fuels. The current approach provides very broad threshold
values that do not value a renewable fuel for its potential contribution to GHG emission
reductions. The commenter supports further weighting through added RIN production of
advance-low GHG renewable fuels in a manner similar to the EV value in RFS1. (2154.1, pp.5-
6)
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment:
The commenter suggested that EPA consider providing additional RIN credits for all fuels that
exceed their GHG reduction requirements. This changed could be a simple formula that involves
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awarding a couple of tenths of one RIN credit for each fuel which exceeds its GHG reduction
target by some specific amount. (2408.1, pp.2-3)
Document No.: EPA-HQ-OAR-2005-0161-2548
Organization: Xyleco, Inc.
Comment:
EPA should also include in its approval procedure recognition for new renewable fuels
production pathways by providing additional incentives for such innovative, breakthrough
technologies. EPA should provide in its final rules that new biofuel pathways that meet certain
criteria - e.g., new pathways representing breakthrough technologies with low environmental
impacts -- receive increased Equivalence Values of 2.5 to 5 to 1.
Our Response:
As discussed in sections 3.5.1.1 and 3.5.1.2 above, we are finalizing Equivalence Values
based on energy content in this final rule. We believe this effectively implements the provisions
of section 211 (o) of the CAA and results in a system that appropriately credits renewable fuels
based on their ability to displace fossil fuels. We recognize that further adjusting Equivalence
Values to reflect GHG performance could encourage facilities to improve the environmental
attributes of their fuels beyond the specified statutory levels, and would provide additional
market encouragement to the production of the best GHG-performing fuels. We believe,
however, that such an approach would most effectively involve case-by-case life cycle analyses
that are beyond the ability of the Agency to perform at this time. If in the future we develop
such capability, or discern that a broader approach may be practical, we may reconsider this
issue.
3.5.2 RIN Generation for Domestic Producers
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2145
Organization: Flint Hills Resources
Comment:
The commenter (2145.1) supports the concept of allowing a biodiesel producer to "average" its
production across facilities. The commenter noted that the following are advantages of using the
company-wide averaging approach: GHG reduction goals met; high quality product available;
and, better alignment with EISA volumetric goals. (2145.1, pp.3-4) [[See Docket Number
2145.1, pp.2-5 for a detailed discussion of this issue.]]
Our Response:
Based on the updated lifecycle analyses presented in today's final rule, both soy-based
biodiesel and waste grease-based biodiesel meet the 50% GHG threshold associated with the
biomass-based diesel volume mandate. As a result, there is no longer a need for a provision
allowing biodiesel to be averaged across facilities.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2312
Organization: LyondellBasell Industries
Comment:
The commenter (2312.1) believes that the RFS2 regulations should continue the aspect of the
RFS1 regulations that recognized and maintained the market flexibility to fully pass-through the
RINs associated with renewable fuel alcohol volumes when those volumes are combined with
isobutylene in making higher value bio-ether blendstocks such as ETBE. (2312.1, pp.2-3)
Our Response:
We agree that RINs assigned to renewable fuel used as a feedstock in the production of
another renewable fuel should be assigned to the new renewable fuel. We have retained this
provision at §80.1426(c)(6).
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2358
Organization: Society of Independent Gasoline Marketers of America (SIGMA) and the
National Association of Convenience Stores (NACS)
Comment:
The commenter (2358) believes it is essential that RINs be generated for all eligible fuel to
maintain RIN liquidly. The commenter suggests creation of a renewable "pedigree" that
accompanies the fuel as it moves through the stream of commerce to avoid creation of fraudulent
RINs for fuel that does not meet the requirements. [[Docket number 2358.1, pp.3-4]]
Our Response:
In the NPRM, we proposed that a producer could produce and sell biofuel without RINs
if he demonstrated that the renewable biomass definition had not been met. For the reasons
described in Section II.B.4 of the preamble, we have determined that this requirement would
have been overly burdensome to producers. The creation of a renewable pedigree as the
commenter suggests would have required a similar level of effort. However, the final rule
requires that RINs be generated for all qualifying renewable fuel for which the producer has
demonstrated that the renewable fuel was made from renewable biomass. Moreover, we are
finalizing an aggregate compliance provision for domestic "planted crops and crop residue" used
as feedstock in biofuel production. As a result those producers using such materials as
feedstock will not need to make a demonstration that their renewable fuel is made from
renewable biomass, and they will be required to generate RINs.
We believe that the provisions we have finalized are sufficient to ensure that RINs are
properly generated, traded, and used for compliance. In particular our creation of the EMTS
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system for tracking RIN transactions will help tremendously. Creation of a new renewable
pedigree for RINs would appear to create considerable new complexity in the RIN system
without providing any significant degree of protection against fraudulent RINs. As a result, we
are not finalizing such a system.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2310
Organization: Low Carbon Synthetic Fuels Association (LCSFA)
Comment:
The commenter (2310) states that normally, they would expect the fuel categories with the
highest GHG reduction thresholds to command the highest market price, and BTL producers
would clearly generate RINs for those categories. However, in the preamble EPA states that
"under certain conditions it may be possible for the market price of corn ethanol RINs to be
significantly higher than the market price of cellulosic biofuel RINs." Under such conditions,
however remote, it would be inappropriate and contrary to Congressional intent to have corn
ethanol RINs command a higher price than those of the most advanced fuels required under the
statute, which may be more expensive to produce if externalities in the production cost
assessment are not considered (as is the case with many first generation biofuels). In such a case,
the commenter believes it would be appropriate for EPA to allow cellulosic biofuel producers the
freedom to sell into a broader RIN category. [[Docket number 2310.1, p. 16]]
Our Response:
In order to ensure that RINs accurately represent the renewable fuels that they are
generated to represent, we are requiring that producers generate RINs according to the D codes
specified in the lookup table in §80.1426(f) that correspond to their operations. We do not allow
producers to choose alternative D codes for the RINs, as this would misrepresent the fuels that
they produce. However, since cellulosic biofuel RINs can be used to comply with the advanced
biofuel and total renewable fuel standards, a producer of cellulosic biofuel can price its RINs to
compete with advanced biofuel RINs or renewable fuel RINs.
3.5.3 RIN Generation for Foreign Producers and Importers
3.5.3.1 Party that Generates RINs
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2012
Organization: Caribbean Basin Ethanol Producers Group
Comment:
The commenter (2012.1) recommends that the generator of the RINS be the importer of record.
(2012.1, p.3)
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Document No.: EPA-HQ-OAR-2005-0161-2137
Organization: Brazilian Sugarcane Industry Association (UNICA)
Comment:
The commenter (2137.1) states given that EPA takes the view that renewable fuel ethanol
requires the addition of a denaturant, and that in the case of the sugarcane ethanol pathway the
denaturant is nearly always added at the U.S. port of entry, the Final Rule should clarify that
importers, not foreign producers, should generate the RINs under RFS2 as has been the case in
RFS1. The requirement for adding denaturant, which ironically requires the addition of a non-
renewable fuel such as gasoline, is unique to the U.S. and consequently, one that shifts the point
of RIN generation to the port of entry in the case of imported ethanol. [[Docket number 2137.1,
p. 39]]
Document No.: EPA-HQ-OAR-2005-0161-2362
Organization: Canopy Prospecting, Inc. And Trinidad Dehydration Company, Limited
Comment:
The commenter (2362) is concerned about traceability and RINS. TDCL expects to operate as a
tolling facility for third parties. TDCL would only have responsibility for their ethanol from the
time it passes from the ship chartered by a client to deliver the hydrous ethanol to the time that
TDCL delivers the product again to the tolling client's chartered ship's flange. Under such a
scenario, TDCL could not establish the origins of the hydrous or anhydrous ethanol. Therefore,
we recommend that the importer of record into the United States be responsible for generating
RINS. [[Docket number 2362.1, p. 2]]
Our Response:
Under our final RFS2 regulations at §80.1401 (definition of "renewable fuel"), RINs can
be generated for imported biofuel that meets the definition of "renewable fuel," under which
ethanol must contain a denaturant. Insofar as the importer adds the denaturant to a batch of
ethanol that he is importing, then the importer is the only party that can generate RINs for that
batch of ethanol. If the denaturant is added to the ethanol prior to importation, then the party that
adds the denaturant has the opportunity to generate RINs for that batch if he is registered with
the EPA and can make a demonstration that the batch meets the full definition of "renewable
fuel" including the requirement that it be made from renewable biomass.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2637
Organization: EthylChem, Ltd
Comment:
We must also concur with others' comments in urging EPA to designate the importer of record
as the entity responsible for generating the RINs on all imports of fuel ethanol into the U.S. So
much consolidation and comingling make it virtually impossible to trace volumes back to a
single mill in Brazil.
Document No.: EPA-HQ-OAR-2005-0161-2017
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Organization: Aloha Petroleum, Ltd.
Comment:
The commenter (2017.1) believes that the entity that denatures imported undenatured ethanol
should not have the burden of complying with the feedstock source and pathway determination
requirements. (2017.1, p.2)
Our Response:
A party that adds a denaturant to imported undenatured ethanol is a producer of
renewable fuel under the RFS2 regulations, since "renewable fuel" is defined in §80.1401 to
include only denatured (not undenatured) ethanol. If the party adding the denaturant wishes to
generate RINs, it must obtain appropriate information from the foreign producer regarding
compliance with the renewable biomass requirements and information about the production
process, as provided in §80.1426(a)(2).
3.5.3.2 Different Requirements for Foreign Versus Domestic Producers
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated
Comment:
The commenter (2511.1) supports equal and fair treatment for international producer certification
and registration when compared to domestic producers and facilities. All imported biofuels
products must be held to the same standards as domestic biofuels. (2511.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2137
Organization: Brazilian Sugarcane Industry Association (UNICA)
Comment:
The commenter (2137.1) believes that the EPA's proposed approach to implementing the new
RIN system, implicates several World Trade Organization (WTO) violations. The commenter
urges EPA to reconsider the proposed system to avoid such concerns. Specifically, the proposed
RIN system described in the proposed RFS2 are inconsistent with the United States'
international legal obligations under the WTO Agreement in six distinct ways as grouped into the
follow three categories of measures:
A. Additional "enforcement-related" requirements that are levied exclusively on foreign
renewable fuel producers RFPs) and renewable fuel importers (RFIs), specifically
requirements to (1) physically segregate fuel; (2) ensure third-party certification and
comparison; (3) comply with an up-front bond-posting requirement; and satisfy
additional annual attest engagement requirements;
B. (5) the exemption of domestic small-batch RFPs from all recordkeeping, reporting and
attest engagement requirements; and
C. (6) The differential treatment of domestic and foreign RFPs in connection with
documentation requirements for implementing the land use restrictions. [[Docket number
2137.1, p. 35]]
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The commenter states that each single one of these six measure independently constitutes an
unjust discrimination of foreign renewable fuel and is thus a violation of Articles 2.1 and 2.2 of
the Agreement on Technical Barriers to Trade (TBT Agreement), as well as Article 111:4 of the
General Agreement on Tariffs and Trade (GATT). In addition, all measures identified, except
measure (5), the small-batch waiver for domestic RFPs, are in contravention of Article XI: 1
GATT. [[Docket number 2137.1, p. 35]]
The commenter urges EPA to address these issues in finalizing the RFS2 to avoid any WTO
violations. Further, beyond mere WTO ramification, these unfair restrictions against foreign
producers risk EPA's ability to achieve the ambitious volume goals mandated by EISA, [[docket
number 2137.1, p. 36]] [[See docket 2137.2 pp 36-36 for details of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2145
Organization: Flint Hills Resources
Comment:
The commenter (2145.1) strongly agrees that a renewable fuel importer should have the same
requirements as a U.S. producer. A level playing field should exist for all participants in this
program. Ethanol and biodiesel produced by a foreign source must account for life cycle impacts
just as a domestic producer. The commenter disagrees with the structure set up in RFS2 to
accomplish this and requests EPA modify the process. The commenter suggests that EPA create
requirements for "biofuel importers" that parallel the requirements of a "renewable fuel
importer" found in §80.1426. In this scenario, the "biofuel importer" would provide
documentation that the biofuel was provided by registered "biofuel producers" (vs. renewable
fuel producers). A "biofuel producer" would have similar requirements for registration that a
"renewable fuel producer" has in §80.1450. (2145.1, pp.5-6) [[See Docket Number 2145.1, pp.5-
6 for a detailed discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2358
Organization: Society of Independent Gasoline Marketers of America (SIGMA) and the
National Association of Convenience Stores (NACS)
Comment:
The commenter (2358) believes EPA proposal to prevent fraud by segregating foreign fuels that
does not qualify for RIN generation is unrealistic and impractical. The commenter suggests that
foreign producers meet all the same requirements as domestic producers as the best way to avoid
fraud. [[Docket number 2358.1, pp. 4-5]]
Our Response:
For the most part, requirements under RFS2 for foreign and domestic producers of
renewable fuel are the same. The RFS2 requirements that are unique to foreign producers of
renewable fuel were developed collaboratively with stakeholders in previous fuel rulemakings,
and in some cases are provisions developed and finalized in response to previous GATT
challenges. Many of these provisions were again proposed and finalized in the RFS1
rulemaking. These include such requirements as posting a bond, admitting EPA enforcement
personnel, and submitting to third-party engineering reviews of their production process.
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The additional requirements imposed by EISA on renewable fuels, in particular the need
to demonstrate compliance with the GHG thresholds and the renewable biomass definition,
demand more rigor than was necessary under RFS1 in terms of enforcement and verifying
compliance because of the larger volumes and the need to determine what feedstocks and
production processes were used at the foreign facility. For renewable fuel produced outside the
U.S., this process presents special challenges due to the difficulty in gaining access to the fuel
production, storage, and distribution network. Therefore, we believe it is both appropriate and
necessary to place requirements on foreign producers to ensure that renewable fuel entering the
U.S. is valid for compliance with the RFS2 volume mandates. See preamble Section II.D.2.C for
further discussion.
3.5.4 Facilities with Multiple Applicable Pathways
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) generally supports EPA's proposal for facilities that have multiple
pathways, but believes that facilities often mix energy sources to improve energy efficiency,
which may not be accurately addressed in EPA's pathways. (2329.1, p. 98)
Our Response:
We have revised the fuel pathways in the lookup table at §80.1426 to accommodate
renewable fuel production facilities that utilize both fossil and non-fossil fuels for process heat
where possible. See further responses to comments on facilities with multiple process heat
energy sources in Sections 7.3 and 7.5. The final regulations also include a petition process that
parties may utilize to seek qualification of such pathways for D codes. See responses to
comments in Section 7.4.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1033
Organization: Poet Ethanol Products
Comment:
The commenter (1033.1) believes that the proposal of collecting the mass of different feedstocks
consumed in the production of renewable fuel is not particularly cumbersome. The only
modification the commenter would suggest to the EPA's proposal of capturing this information
daily is that Renewable Fuel Producers be allowed to capture it no less frequently than at a batch
level. This approach would alleviate the additional complications of having to then dissect and
reassemble the data for reporting on a batch basis when the batches cross days or you have
multiple batches produced in a day. (1033.1, p.2)
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Our Response:
The regulations at §80.1426 (d) (5) have been modified to allow producers to use
feedstock mass data measured on a daily or per-batch basis.
3.5.5 Facilities that Co-process Renewable Biomass and Fossil Fuels
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) agrees with the proposal to generate RINs for the "advanced biofuel"
portion of a renewable fuel produced through co-processing. Facilities that co-process
renewable biomass and fossil fuels to produce a single fuel that is partially renewable should use
the relative energy in the feedstocks to determine the number of gallon-RINs that should be
generated. (2132.1, p.9)
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) states that RIN generation for co-processing of renewable and fossil fuels
should be based on relative energy in the feedstocks. [[Docket number 2130.1, p. 16]]
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) supports the methodologies for handling facilities with multiple fuel type
pathways and co-processed fuels. [[Docket number 2233.2 p. 8]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) supports the methodologies for handling facilities with multiple fuel type
pathways and co-processed fuels as proposed with subsequent application of appropriate EV and
CV equivalency factors and does not support either of the suggested alternatives. The alternative
methods involve far more complexity in compliance demonstration and enforcement than the
small amount of accuracy that would be gained. EPA's alternative clearly is not warranted.
[[Docket number 2393.1, p. 10)
Document No.: EPA-HQ-OAR-2005-0161-1027
Organization: Beta Analytic, Inc.
Comment:
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The commenter (0998_Copyright) believes that it should particularly since the ASTM D6866
test can accurately determine the biomass fraction of the resultant fuel. It must be noted that the
ASTM D6866 method is already adopted in the current EPA's greenhouse gas reporting rule
under the Tier 4 sampling protocol for municipal solid waste, specifically for the measurement of
the biogenic C02 fraction. Although the ASTM D6866 method cannot determine the different
renewable biomass feedstock percentages, it can determine with excellent accuracy and precision
the biomass carbon fraction of fuels. The commenter also wanted to mention that ASTM D6866
is an accepted method for measuring the biomass fraction of fuels in the Australian, European
Union, and other regional greenhouse gas protocols, such California's AB 32 and the Western
Climate Initiative. This widely accepted method is also being considered as a biomass carbon
verification test for the Renewable Transportation Fuels Obligation in the United Kingdom.
(0998_Copyright, pp.1-2) (See Docket Number 0998_Copyright, pp.1-31 for a detailed
discussion on ASTM D 6866)
Our Response:
We have finalized our approach to facilities that co-process renewable biomass and fossil
fuels essentially as proposed, as described in preamble Section III.D.4. We are also providing
producers the option of using a radiocarbon dating test method such as ASTM D-6866 to
determine the renewable content of their biofuels, as an alternative to determining the renewable
content of their feedstocks.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2420
Organization: Magellan Midstream Partners
Comment:
The commenter (2420.1) supports EPA's recognition that open-access terminals depend upon a
regulatory environment that provides the ability to co-mingle renewable fuels from multiple
suppliers in the same storage tank. Because of the potential increase in production of cellulosic,
advanced and traditional biofuels, the commenter stresses the importance of co-mingling fuels in
an effort to promote operational efficiencies and reduce distribution costs. (2420.1, p.2)
Our Response:
We have designed the RIN program structure to allow for such commingling of fuels.
3.5.6 Fuels Without an Applicable D Code
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment:
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The commenter (2408.1) recognizes the limited resources and the tremendous variability and
range of renewable fuels technologies which are currently exploring their commercial
applicability under the proposed RFS2 rules. The commenter urges that EPA create an expedited
process that would allow individual technologies utilizing specific feedstocks to be able to
demonstrate their various greenhouse gas reduction capabilities.
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
Regarding RIN-less biofuels, the commenter believes that EPA should require all biofuels that
are produced or imported to either meet the RFS2 thresholds or to be treated as transportation
fuels, with a RFS2 obligation. [[Docket number 2233.2, p. 10]]
Document No.: EPA-HQ-OAR-2005-0161-1036
Organization: Vision FL I, LLC
Comment:
The commenter (1036.1) noted that since fuel pathways and applicable D codes have such a
strong economic effect on ethanol sales from smaller producers (less than 100MGY), generalized
fuel definition GHG reductions and D codes will put many companies at a severe competitive
disadvantage because of the RIN generation and sales associated with those broad classes of fuel.
The commenter suggests that a process can choose to prove through the EPA's modeling (when
completely finalized) they can produce GHG reductions in upwards of 60%; which would grant
said process plant the ability to us a D code of 1 for use with the associated RINs. (1036.1, p.2)
The commenter believes that the current wording and broad GHG definitions are
"unintentionally subsidizing" the cellulosic fuel class by ignoring project/process specific
fundamentals such as production costs, best management practices, and electricity sales via by-
product combustion from other advanced biofuels. The commenter recommends that the fuel
pathway tables (VI.E.1-1, VI.E.2-1, VI.E.4-1) remain as is to be used as general look up values,
but Table III.B.2-1 should reflect fuel classes such as Class I, Class II etc...that corresponds to
the appropriate GHG lifecycle reductions. If such an approach is not acceptable, than the
commenter suggests a provision be added where a fuel producer can apply for a D code higher
than the recommended D code from their fuel pathway as long as work is completed with the
EPA on a "case-by-case" basis to confirm through the GHG models such a reduction is indeed
feasible. (1036.1, p.2)
Our Response:
EPA is finalizing a petition process for all renewable fuels and fuel additives that are not
in the list of modeled pathways. The process is designed to allow companies to generate RINs, if
EPA can in its judgment determine if the unique pathway is eligible to generate RINs. We
believe this addresses the comments on the need to have an expedited process. Not all petitions
will be granted and some will require EPA to finalize a rule making before those pathways may
be eligible for RINs. See additional discussion of the petition process in the response to
comments in Section 7.4.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2119
Organization: National Sorghum Producers
Comment:
With regards to distiller's grains, the commenter believes that a facility that dries only a portion
of its distiller's grains should only be producing different RINs (or no RINs) on that portion of
biofuels that resulted in dried distiller's grains. If a facility estimates that it will dry 20% of its
distiller's grains in a year, then 20% of the daily volume of ethanol should have a different RIN
(or no RIN). An adjustment could then be made each quarter to account for the actual amount of
dried distiller's grains produced. (21191, p.4)
Our Response:
EPA has modeled that facilities that dry no more than 65% of their distillers grains and
solubles in a calendar year and uses other advanced technologies then they may qualify to
produce RINs. If the production facility pathways qualify as meeting the GHG threshold then
that facility may generate RINs for all qualifying volumes. If a producer believes that it should
be permitted to generate RINs with different D codes depending on the fraction of distiller's
grains that is dried, we have developed a petition process for that purpose. See responses to
comments in Section 7.4.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2110
Organization: Chevron
Comment:
The commenter (2110.1) believes that EPA should create a Renewable Volume Obligation
(RVO) for all RIN-less renewable fuels. In the final rule, EPA should make clear that RIN-less
renewables, destined to be used neat or blended into other fuels are, by definition, transportation
fuels for the purpose of the RFS and, consequently, incur a RVO. (2110.1, p.3)
Our Response:
We agree that biofuel may be produced or imported under RFS2 for which no RINs are
generated. If this biofuel is used as transportation fuel, it might be reasonable to treat it as
obligated fuel subject to the standards. However, we do not believe that it would be appropriate
at this time to finalize a requirement that RIN-less biofuel be considered an obligated fuel. We
did not propose such an approach in the NPRM, and as a result many renewable fuel producers
who could be affected did not have an opportunity to consider and comment on it. Moreover, the
volume of RIN-less biofuel is likely to be small compared to the volume of renewable fuel with
RINs since RINs have value and producers currently have an incentive to generate them. See
further discussion in preamble Section III.D.7.
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3.5.7 RINs Generated for Electricity, Natural Gas, and Propane
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
Regarding how to calculate RINs for electric vehicles, natural gas and propane, the commenter
believes that only VMT that is based on the actual use of renewables should be credited. There
should be no double-counting (generation) of RINs. [[Docket number 2233.2, p. 11]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
Regarding how to calculate RINs for electric vehicles, natural gas and propane, while the
commenter (2393) supports such RIN generation, only renewable fuels used in the direct
application allowed by Congress, i.e., transportation fuels and heating oil that is based on the
actual use of renewables in these applications should be credited. There should be no double-
counting (generation) of RINs and adequate enforcement mechanisms need to be created to
ensure this. [[Docket 2393.1, p. 12]]
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter believes that the EPA should not include biomass electricity, natural gas, CNG
or LNG in the RFS2 program at this time. These industries are not well developed as
transportation fuel sources, and for now creates a significant burden to have to track whether
these energy sources were manufactured with qualified biomass, and whether any portion of
these fuels (if manufactured from biomass) were used as transportation fuel. (0994.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2099
Organization: Honeywell International, Inc.
Comment:
The commenter (2099.1) requests that EPA modify the proposed definition of renewable fuel by
eliminating the inclusion of electricity, natural gas, and propane made from renewable biomass.
(2009.1, pp.10) (See Docket Number 2099.1, pp.10-12 for a more detailed discussion on this
issue)
Our Response:
As discussed in Section II.B.I of the preamble, we are finalizing provisions to allow for the
generation of RINs for renewable electricity, natural gas, or propane that has been shown to be
used for transportation purposes. (Note that not all of these fuels currently have a D-Code
assigned to them and would still have to qualify as renewable fuels under future additions to the
lookup table in §80.1426.) Like any other renewable fuel producer, they will have to
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demonstrate at the time of registration and through annual audits that their fuel qualifies to
generate RINs under the RFS program. In addition, producers of renewable electricity, natural
gas, or propane can only generate RINs for their products if they can demonstrate that those fuels
are in fact used as transportation fuel.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2466
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Comment:
The commenter (2466) supports the proposed alternative to allow or require parties that supply
these fuels to centrally fueled fleets to generate RINs even if they are not the producers of the
fuel. They support this approach because it would provide an incentive for a larger volume of
electricity, natural gas and propane that is made from renewable biomass to be used as vehicle
fuel. (2466.1.pdf.p.8)
Document No.: EPA-HQ-OAR-2005-0161-2337
Organization: California Air Resources Board
Comment:
The commenter (2337.1) recommends that parties who supply centrally located fleets with
renewable electricity, natural gas, and propane be allowed to generate RINs, even if they are not
the producer of the fuel. Any transportation fuel that can be verifiability linked via physical
pathway to renewable biomass should be allowed to generate RINs. Only by establishing a level
playing field for all renewable fuels will the market be effective in promoting the least cost mix
of transportation fuels. (Page 4)
Our Response:
In order to protect against possible double counting, we are restricting RIN generation for
renewable electricity, natural gas, and propane to the producer of the fuel. Downstream
distributors or users of these fuels cannot generate RINs. We had considered allowing
downstream parties to also generate the RINs since they could better identify the use of the fuels
for transportation purposes. However, as some commenters suggested, this might have provided
an opportunity for double-generation of RINs for these fuels. If these fuels develop as
transportation fuels in the future and mechanisms can be developed to address potential double
counting and related enforcement concerns, then in the future we can consider allowing
downstream parties to generate RINs as well.
3.6 Applicable Standards
Note: Comments related to our projection of the 2010 cellulosic biofuel volumes and our process
for setting the standard for cellulosic biofuel can be found in Section 6.3.2.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) supports the application of the renewable fuel standard to nonroad
sources.
Our Response:
We agree with this comment. EISA requires that renewable fuels valid for compliance
purposes under RFS2 are those that are used to replace or reduce the quantity of fossil fuel
present in a transportation fuel, and transportation fuel is defined to include fuel used in nonroad
vehicles and engines.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) stated that if the RFS2 regulations will be effective on 1/1/11, then
statutory mandates for biomass-based diesel for 2009 and 2010 and for cellulosic biofuel for
2010 should be ignored/eliminated. The commenter then stated that if the RFS2 regulations will
be effective on 1/1/10, then the statutory mandate for biomass-based diesel for 2009 and
cellulosic biofuel for 2010 should be ignored/eliminated. (2124.1, p.10)
The commenter believes that EPA should not attempt to combine the 2010 and 2011 yearly
standards for biomass-based diesel or cellulosic renewable fuels. (2124.1, p.11)
Our Response:
While the RFS2 regulations will go into effect on July 1, 2010, we are applying the four
RFS2 standards to all gasoline and diesel produced in 2010. We do not believe that the statutory
mandate for biomass-based diesel in 2009 should be ignored. We did not have the RFS2
program in place for 2009 and thus could not establish a separate standard for biomass-based
diesel in 2009. To best implement Congress' intent for 2009 and 2010, we are combining the
2010 biomass-based diesel volume of 0.65 billion gallons with the 2009 biomass-based diesel
volume 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. As described in
more detail in Section II.E.2 of the preamble, this approach is similar in concept to the deficit
carryover provision that would have applied to the full 2009 volume mandate of 0.5 billion
gallons.
As described in the responses to comments in Section 3.6.2 below, we also do not believe
that the cellulosic biofuel standard for 2010 should be eliminated. Based on our analysis of
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cellulosic production facilities, we have determined that 6.5 million gallons of ethanol-equivalent
cellulosic biofuel can be produced in 2010.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2374
Organization: Amyris Biotechnologies, Inc. (Amyris)
Comment:
The commenter (2374) supports the proposed RFS2 fuel volumes and believes that advanced
biofuels will contribute significantly to the objectives of reducing the carbon intensity of
transportation fuels and reducing the nation's reliance on petroleum derived transportation fuels.
[[Docket number 2374.1, p. 1]]
Our Response:
We agree that advanced biofuels are an important component of the RFS2 program for
many reasons, including the fact that they must meet a GHG threshold of 50%.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that EPA must continue to implement the volume mandates
each year until it can complete its lifecycle analysis. (2329.1, p. 16)
Our Response:
We have conducted a complete lifecycle analysis for a number of renewable fuel
pathways, and as a result we are implementing the full RFS2 program including the four RFS2
standards required by EISA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2317
Organization: National Corn Growers Association (NCGA)
Comment:
Referring to the 2008 Texas petition to reduce the RFS mandate, the commenter (2317) believes
that EPA should evaluate any waivers of the RFS volumes with a high degree of scrutiny.
[[Docket number 2317.1, p. 44]]
Our Response:
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We agree that any request for a waiver of any portion of the volumes required by EISA
must be evaluated closely before a decision is made to approve or disapprove it. Such waiver
actions, however, are outside the scope of this final rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment:
The commenter (2408.1) believes that, within the Advanced Biofuels pool, if significant
shortfalls in a particular subcategory such as the biomass-based diesel pool or the cellulosic pool
require an adjustment of the volume mandate that other nested categories within the advanced
biofuels pool should be allowed to fill the shortfall. Given the specific requirements of an
advanced biofuel and the definition of conventional fuels in EISA, corn based ethanol should be
excluded from filling any volume shortfalls in the advanced categories. (2408.1, pp.4-5)
Our Response:
Congress gave EPA the authority to lower the required total and advanced biofuel
volumes if EPA reduces the required volume of cellulosic biofuel. For 2010, while we are
lowering the cellulosic biofuel standard, we are maintaining the other standards at their EISA-
mandated levels. The biomass-based diesel volume needed to meet its standard will
automatically fulfill the advanced biofuel standard, given the energy-based Equivalence Values
for biodiesel and renewable diesel. Decisions for standards in future years will be made at that
time.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
Referring to EPA's request for comment on how to address the individual targets identified for
2009 and 2010 in the 2007 RFS legislation, the commenter (2233) states that obligated parties
and renewable fuel producers remain at a loss as to how such targets can be addressed absent
completion of the life cycle assessment methodology and final implementing regulations.
Clearly the 2009 mandate for individual categories of renewable fuels is no longer feasible.
Our Response:
The lifecycle analyses have been updated and finished for this final rule, and we have
determined that there exist renewable fuel pathways meeting the applicable GHG thresholds for
all four categories of renewable fuel. Therefore, we believe that the volume mandates in EISA
can be met, with the exception of the cellulosic biofuel standard which we have determined
should be based on 6.5 million gallons of ethanol-equivalent renewable fuel. Moreover, the
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2009 mandate for biomass-based diesel will be met in the context of a combined 2009/2010
standard as described in preamble Section II.E.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter believes that the standards for 2011 should be announced by the Agency by the
end of November 2010. The commenter supports notice-and-comment, but observes that EPA
lacks statutory authority to impose EISA Total Advanced Biofuel renewable mandates for 2010
until RFS2 final rules become effective. (2124.1, p.20)
Our Response:
The standards for 2011 will indeed be announced by EPA by November 30, 2010,
following the statutory mandate. As described in Section I.A.2 of the preamble, we believe it is
appropriate to set the annual standards through a notice-and-comment rulemaking process. Thus,
for future standards, we intend to issue an NPRM in the Spring and a final rule by November 30
of each year in order to determine the appropriate standards applicable in the following year.
However, in the case of the 2010 standards, we are finalizing them as part of today's action.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP).
Comment:
The commenter (2384) states that given the physical and regulatory barriers to implementing
RFS2, EPA should add a comprehensive market assessment to its annual process for setting
RVOs to avoid market-wide shortfalls which could cause dislocations in the RIN marketplace
and encourage unscrupulous behavior. The commenter believes this annual assessment should
consider all aspects of the biofuels supply chain. [[Docket number 2384.1, p. 3]]
Our Response:
As described in Section ILK of the preamble, we are requiring production outlook reports
from the renewable fuel production industry to help us in projecting the volumes of renewable
fuel that can be produced in the future. We will assess any other data that is available during our
annual rulemaking process to set the standards for the next year, including data on the operation
of the fuels market and the RIN market.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
Therefore the 2010 RFS2 obligation would be the 6.8 bgy directed under the current RFS
regulations. [[Docket number 2233.2, pp. 1-2]
Our Response:
We do not believe it would be appropriate to continue to use the mandated volumes from
EPAct 2005 for total renewable fuel as the basis for standards in 2009 and beyond. EISA
changed the volumes in CAA 211 (o), and the standards are based upon the volumes mandated in
CAA 211(o).
3.6.1 Calculation of Standards
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
Since the RFS2 regulations will not be in effect in 2010 and the small refinery and small refiner
exemptions expire at the end of 2010, the "Std" equations only apply for years 2011 and later.
As a result, the "GE" terms for exempt small refineries and small refiners should be dropped
from the "Std" equations. (2124.1, p.43)
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
Since the Std RF equations only apply for years 2011 and later, the "GE" term, which is used to
represent small refinery exempted gasoline, should be dropped from the Std RF equations.
[[Docket number 2393.1, p. 7]]
Our Response:
The total projected non-renewable gasoline and diesel volumes from which the annual
standards are calculated are based on EIA projections of gasoline and diesel consumption in the
contiguous 48 states and Hawaii, adjusted by constant percentages of 11.9% and 15.2% in 2010
only to account for small refinery/refiner gasoline and diesel volumes, respectively, and with
built-in correction factors to be used when and if Alaska or a territory opt-in to the program.
Because the RFS2 program will be in effect in 2010, it is appropriate to maintain the "GE" term
in the equation and note that it only applies for 2010.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) agrees with EPA's proposal to base the RFS2 standards on the sum of
all gasoline and diesel fuel used. This will allow obligated parties to use RINs generated in the
most receptive markets to help satisfy their overall renewable volume obligation, and this will
help minimize the overall cost of the program. (2132.1, p.7)
Our Response:
While we took comment on an alternative approach in which the standards would be
calculated separately for gasoline and diesel, we agree that the most straightforward approach is
to sum gasoline and diesel together in order to calculate the standards. This is the approach we
have finalized in today's rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) believes there are problems with EPA's calculation of the RVO in
Section 80.1405. [[Docket number 2233.2, p.6]] [[See docket number 2233.2, pp. 6-7 for
explanation of the formula issues.]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter adds that there are problems with EPA's calculation of the renewable volume
obligation (RVO) under the RFS1 regulations. In the four Standard Renewable Fuel (Std RF)
equations in this section, EPA subtracts the U.S. Energy Information Administration's (EIA)
projected renewable usage from EIA's projected gasoline and diesel demand. The commenter
believes that since EPA is actually mandating the minimum renewable volumes for the year in
question, it should in fact only use the EIA renewable projections if they are larger than the
mandated renewable volumes. In the cases where EIA's projected renewable volumes are less
than the renewable fuel volumes which will be mandated, the actual mandated volumes should
be used.
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that the renewable fuel standard equations must be calculated
carefully. The proposed equations for the calculation of the annual renewable fuel standard
percentages are at §80.1405(d). The denominators should be EIA projections of gasoline and
diesel volumes excluding renewable fuels.
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Our Response:
The denominator of the equations for setting the RFS2 standards represent non-renewable
gasoline and diesel projected to be produced or imported in a calendar year. To obtain these
values, we use the projections from El A for total (renewable plus nonrenewable) gasoline and
diesel, and then subtract the EIA projections for renewable fuels blended into gasoline and
diesel. In this calculation, it does not matter if the EIA projection of renewable fuel is higher or
lower than the EISA-mandated volumes for RFS2. The EIA projection must be used in either
case to ensure that the resulting non-renewable gasoline and diesel projections are consistent.
3.6.2 Treatment of Biomass-based Diesel in 2009 and 2010
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1001
Organization: Kurzman Clean Tech Research & Kurzman Capital, LLC
Comment:
The commenter (1001.1) wants the program to succeed. Under the statute, EPA has ample
authority to implement a workable program. The proposed rule, however, does not achieve this
goal and, in fact, stands to undermine Congressional intent in establishing the biomass-based
diesel requirement—an integral part of the program. (1001.1, p. 1)
Our Response:
The final rule includes an updated lifecycle analysis concluding that biodiesel made from
both waste greases and soybean oil will meet the 50% GHG threshold, and therefore will count
as biomass-based diesel. In addition, to ensure that the volumes of biomass-based diesel
required by EISA for 2009 are implemented, we are finalizing a 2010 standard that is based upon
a combination of the 2009 and 2010 volume mandates for biomass-based diesel. Compliance
with this standard must be demonstrated by February 28, 2011. We believe that these provisions
result in a workable program that achieves Congressional intent.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2118
Organization: CountryMark Cooperative, LLP
Comment:
The commenter (2118.1) believes that the proposed changes will not adequately stimulate
production of biomass-based diesel fuel. Based on current consumer demand, diesel fuel makes
up approximately 31% of fuel demand. However, the biomass-based diesel volumes presented
in EISA only account for 6.6% of the total renewable fuel requirement in 2012. The commenter
believes that this disproportionate distribution between biomass-based diesel and other primarily
gasoline substitute renewable fuels will lead to a potential diesel fuel supply shortfall as industry
crude throughput is reduced to absorb gasoline substitutes. The commenter requests that the
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EPA Administrator review the volume requirement for biomass-based diesel to determine if a
higher volume requirement is necessary to ensure that adequate supplies of renewable diesel are
developed on a commercial scale. (2118.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter believes that EPA should carefully evaluate future biomass-based diesel
production capability. The commenter stated that EPA will need to identify the annual
regulatory volume for the first year of the RFS2 program for biomass-based diesel. To identify
an appropriate regulatory volume for 2011, the Agency should project actual supply in 2011.
The commenter believes that EPA should not just rely on nameplate production capacity and
assume that all plants will operate at 100% capacity utilization throughout 2011. (2124.1, p.23)
Document No.: EPA-HQ-OAR-2005-0161-2106
Organization: Endicott Biofuels II, LLC
Comment:
The commenter (2106) suggests that EPA strongly consider setting more aggressive targets for
biomass-based diesel beginning in 2013 to provide the necessary pricing signals to the market to
incent advancement of new technologies. The commenter's analysis based upon a compilation
of NREL, USDA, U.S. Bureau of Labor & Statistics, and National Renderer's Association data
concludes there is enough energy dense fats and oils neutral and non-neutral materials to support
over 2 billion gallons of biomass based diesel already in the marketplace in the U.S. If foreign
sources are included, the total is much higher. Technology exists today to convert these
feedstocks into high quality methyl esters. The commenter also suggests that the only barrier to
utilization of these feedstocks is price differential to crude oil and that the 30% suggested
restriction is overly conservative. Therefore, the commenter suggests the EPA target
significantly greater than 1 billion gallons of biomass-based diesel in 2013 and beyond. [[Docket
number 2106.1, p. 1]]
Our Response:
The volumes for biomass-based diesel were established by EISA, and EPA does not have
the authority to increase those volumes prior to 2013. For 2013 and beyond, EPA must
determine the appropriate volumes to require, so long as those volumes exceed 1.0 bill gal. We
have not conducted the analyses necessary to determine the appropriate volumes for 2013 and
beyond, and thus have not established those volumes in today's final rulemaking.
As discussed in our responses under section 3.6.2.2, we have assessed the potential
biomass-based diesel volume for 2010 and believe that the standard based upon 1.15 bill gal is
feasible. We intend to continue to assess the potential production as we set the standards for
future years based on available information, including information provided to us in the annual
production outlook reports discussed in preamble Section ILK.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2141
Organization: American Trucking Associations
Comment:
The commenter (2141.1) recommends that EPA temporarily allow domestically produced soy-
based biodiesel to be used to meet the biomass-based diesel requirements under RFS2. This will
ensure that the RFS2 statutory mandates are achievable in the near term. Once EPA obtains
scientifically-defensible data on soy based biodiesel's lifecycle emissions, EPA should address
the issue in a future rulemaking. (2141.1, p.5)
Our Response:
The updated lifecycle analysis of GHG emissions for soy-based biodiesel indicates that it
meets the 50% GHG threshold applicable to biomass-based diesel. Therefore, there is no need
for special, temporary treatment of biodiesel in order to meet the biomass-based diesel standard.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2400
Organization: Murphy Oil USA, Inc.
Comment:
The commenter believes that allowing parties to utilize the same RINs over multiple years will
likely cause issues with software programs that are managing RINs and will also cause confusion
when calculating the 0100 reports. The commenter recommends that the EPA not allow
biodiesel RINs to be used twice. Allowing obligated parties to use the RINs for compliance as
well as sell them would cause inconsistencies when performing attestations. (2400.2, p.2)
Our Response:
We have designed the regulations such that the software issues described by the
commenter are unlikely to occur. Under RFS2, all RINs can only be used for compliance
purposes in a single year. This includes compliance with the combined 2009/2010 biomass-
based diesel standard. However, prior to determining compliance with the combined 2009/2010
biomass-based diesel standard, obligated parties can take a credit for any biodiesel or renewable
diesel RINs that were used for compliance in 2009. In other words, the RVO for biomass-based
diesel will be reduced by the number of RINs that the obligated party used for compliance in
2009. The resulting, adjusted RVO must then be met with 2008, 2009, and/or 2010 RINs that
have not previously been used for compliance purposes, subject to rollover restrictions.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2155
Organization: Petroleum Marketers and Convenience Stores of Iowa (PMCI)
Comment:
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The commenter (2155.1) believes that biomass based diesel should be treated as an ethanol-
equivalent volume as opposed to the suggested diesel volume for the purpose of continuity
amongst other types of renewable fuels (2155.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter agrees with EPA that Congress intended the required volumes related to
Biomass-based Diesel to be treated as diesel volumes rather than ethanol-equivalent volumes.
The commenter states that Congress also intended to spur the development of advanced biofuels,
through specific volume mandates. The commenter urges EPA to apply option 2 to the Biomass-
based Diesel, Advanced Biofuel, and Cellulosic Biofuel RVOs. [[Docket number 2249.2, p. 32]]
Document No.: EPA-HQ-OAR-2005-0161-2145
Organization: Flint Hills Resources
Comment:
The required categories of "Total Renewable Fuel", "Total Advanced Fuel" and "Cellulosic
Biofuel" should share a common basis for accounting for different renewable fuels that are
replacing both gasoline and diesel in the marketplace. The commenter advocates that the
biomass-based diesel standard be expressed as an ethanol-equivalent volume. This approach has
the benefits of being simple and transparent. (2145.1, p.7)
Document No.: EPA-HQ-OAR-2005-0161-2360
Organization: Archer Daniels Midland Company (ADM)
Comment:
The commenter (2360.1) agrees with the EPA that Congress intended the required volumes of
Biomass-based Diesel to be treated as diesel volumes rather than ethanol-equivalent volumes.
The 1 billion gallons of Biomass-based Diesel by 2012 is intended to be a strict volume
calculation and not an ethanol-equivalent energy content calculation. (2360.1, p.7)
Our Response:
While the EISA-mandated volumes for cellulosic biofuel, advanced biofuel, and total
renewable fuel can be met with any type of renewable fuel, we believe that the mandated volume
for biomass-based diesel was intended to be met only by renewable fuels that displace fossil-
based diesel. Moreover, we expect that the predominant renewable fuel used to meet the
biomass-based diesel requirement will be biodiesel (mono-alkyl esters). Since we are finalizing
the energy content approach to Equivalence Values, we have adjusted the biomass-based diesel
volume mandate from EISA upward by a factor of 1.5, the Equivalence Value for biodiesel. The
net result is a biomass-based diesel gallon being worth 1.0 gallons toward the biomass-based
diesel standard, but worth 1.5 gallons toward the other standards.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2471
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Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter noted that if EPA finalizes the Biomass-Based Diesel fuel standard as proposed,
an Obligated Party's BED obligation will actually exceed its Advanced Biofuel RVO in 2010
(due to the proposed combined 2009-2010 BED mandate). The commenter does not believe that
this result was intended and requests that EPA clarify this situation to allow Obligated Parties to
separate an appropriate amount of self-generated "D3" RINs. (2471.1, p.17)
Our Response:
The biomass-based diesel volume of 1.15 bill gal for 2010 will automatically fulfill the
advanced biofuel standard, given the energy-based Equivalence Values for biodiesel and
renewable diesel. However, obligated parties can still buy advanced biofuels with a D code of 5
and use them to meet their total renewable fuel standard, or retain them for use in 2011.
3.6.2.1 Supports the Proposed Treatment of Biomass-based Diesel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) supports the Option 1 Treatment that rolls the 2009 Biomass-based
Diesel requirements into 2010 for total volume of 1.15 billion gal. The commenter also supports
the pathway of subtracting 2009 consumed Biodiesel or Renewable Diesel from the 2010
requirement of 1.15 billion gal. The commenter supports the position of being able to use excess
2009 Biodiesel volumes (RR code of 15 or 17) (at a 20% rollover cap) to go toward meeting the
balance of their 2010 Biomass-based Diesel volume requirements. (0994.1, p.8)
Document No.: EPA-HQ-OAR-2005-0161-2110
Organization: Chevron
Comment:
The commenter (2110.1) believes that EPA should not penalize obligated parties who responded
in good faith to EPA guidance on complying with the 2009 BED volume requirement. EPA
should explicitly allow BED RINs procured based on EPA advice to be used for BED
compliance with the first BED volume mandate established under the final RFS2 rules. (2110.1,
P-3)
Our Response:
We agree that the special provisions proposed in the NPRM to account for the 2009
biomass-based diesel volume requirements in EISA should be finalized. Since the RFS1
regulatory structure did not provide a mechanism for implementing the 0.5 billion gallon
requirement for biomass-based diesel in 2009, we are combining the 2010 biomass-based diesel
requirement of 0.65 billion gallons with the 2009 biomass based diesel requirement of 0.5 billion
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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. All 2009 RINs for biodiesel and renewable
diesel are valid for complying with this combined 2009/2010 standard, consistent with our
intention as described in the November 2008 notice setting the 2009 standard for total renewable
fuel.
3.6.2.2 Opposes the Proposed Treatment of Biomass-based Diesel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP)
Comment:
The commenter (2384) recommends commencement of a biodiesel requirement on January 1,
2011 and a volume requirement of 800 million gallons for 2011 as was legislated in EISA. The
industry will need adequate lead time from the date of the final rule to plan, designing, construct,
and complete the necessary biodiesel infrastructure. [[Docket number 2384.1, p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that EPA should not combine the 2009 and 2010 requirements.
By imposing the 2009 volume requirements in 2010, EPA would be imposing a retroactive
requirement and immediately put obligated parties in a compliance deficit. (2124.1, p.10)
The commenter also believes that EPA's proposal to combine the 2009 and 2010 volume
mandates for 2010 is clearly contrary to the express intent of Congress. Combining the 2009 and
2010 standards makes little sense as a practical matter since it results in a standard of 1.15 billion
gallons when Congress only envisioned a 1 billion gallon mandate in 2012. EPA is creating a
situation where unnecessary blending capacity is required for a one year period. The commenter
noted that the same would be true if EPA attempts to combine the 2010 and 2011 standards if the
RFS2 program starts in 2011. (2124.1, p.ll)
The commenter strongly opposes any attempt by EPA to impose, on a retroactive basis, biomass-
based diesel requirements for 2009 or any other period that precedes a final rulemaking for RFS2
that includes provisions sufficient to implement EISA requirements. EPA has no authority to
"recapture" volume mandates under different start-date scenarios. (2124.1, p.ll) [For a detailed
discussion of this issue, see pp. 12-16 of Docket Number 2124.1).
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) states that when EPA finalizes the RFS2 rulemaking, the 2009 biomass-
based diesel requirement should not be carried forward to 2010 and the 2010 biomass-based
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diesel and cellulosic ethanol requirements should not be carried forward to 2011. [[Docket
number 2130.1, p. 8]]
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
Regarding the 2010 mandates, the commenter opposes adding these mandates to 2011. Adding
the Biomass-based Diesel mandates is particularly onerous as obligated parties sort through
infrastructure, seasonality, quality, economic and GHG reduction issues. Therefore, for 2009, by
default, EPA must rely on the RFS1 regulations and the overall mandate alone. [[Docket number
2233.2, p. 39]]
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) believes that EPA should not combine the 2009 and 2010 requirements.
By imposing the 2009 volume requirements in 2010, EPA would be imposing a retroactive
requirement and immediately put virtually all obligated parties in an immediate compliance
deficit. This is not consistent with longstanding legal principles, or principles of basic fairness,
that prohibit the government from promulgating ex post facto laws. (2505.2, pp.3-4) (See Docket
Number 2505.2 for a detailed discussion of this issue)
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter further states that EPA should abandon any notion that EISA requirements can
be brought forward. Should the RFS2 start date be 1/1/2011 (as recommended by the
commenter), the 2011 EISA requirement of 0.80 bg would be a substantial fraction of the
proposed 2009/2010 lumped requirement of 1.15 bg and would come at a time when production
is even lower than when initially proposed with the November 2008 notice. [[Docket number
2393.1, pp. 14-15 and 2523.1, p. 2]]
The commenter understands that EPA's rationale for establishing the proposed 2009/2010 BED
standard is in jeopardy should the start date be extended, but in extending the start date EPA will
have to establish a transition program to manage other EISA mandates and a few practical
matters that are seriously compromised by the delay in promulgating the final rules. As part of
this transition program, EPA should explicitly allow the use of prior-year biodiesel RINs
procured based on EPA advice for BED compliance with, at a minimum, the first BED volume
mandate established under the final RFS2 rules. [[Docket number 2393.1, pp. 15-16]]
Our Response:
We continue to believe that it is appropriate and consistent with the statute to combine
the 2009 and 2010 mandated volumes for biomass-based diesel into a single two-year obligation
for which compliance must be demonstrated by February 28, 2011. Congress expected and
intended that RFS2 regulations would be adopted by the end of 2008, and that they would have
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applied in full to 2009 and 2010. If that had occurred, then obligated parties would have
transitioned from RFS1 requirements to RFS2 requirements starting with 2009. They would
have had a 2009 volume obligation for biomass-based diesel based on a total volume of 0.5
billion gallons, and a 2010 volume obligation based on a total volume of 0.65 billion gallons. If
an obligated party did not satisfy their individual 2009 volume obligation by the end of 2009,
then the statute allowed the party to carry the deficit over to 2010 as long as they were in full
compliance with both 2009 and 2010 volume requirements by the end of 2010. This is the
mechanism that Congress employed to ensure that 1.15 billion gallons would be used by the end
of 2010, spread out over 2009 and 2010, through the use of separate 2009 and 2010 volume
obligations combined with a deficit carry over provision.
EPA did not issue the RFS2 regulations by the end of 2008, and the transition from RFS1
to RFS2 did not occur at the beginning of 2009. EPA is thus faced with structuring and
implementing a transition from the RFS1 to the RFS2 regulations in a way that most
appropriately meets two goals. One goal is to maximize compliance with the volume
requirements Congress set out for biomass-based diesel. The other goal is to provide the
regulated parties with adequate lead-time to meet such volume requirements.
As discussed below, there is significant productive capacity for the production and use of
biomass-based diesel, a large amount of which is not currently used because of inadequate
demand. Productive capacity is currently estimated at over 2.8 billion gallons, far beyond the
2009 and 2010 volumes set by Congress in EISA. Clearly productive capacity of biomass-based
diesel is not a limiting factor as far as the feasibility of the EISA volume requirements or lead
time for obligated parties. As discussed below it is also relatively straightforward for much of
the current unused capacity to be brought on line, something we believe will occur once
sufficient incentive is put in place, such as the combined 2009-10 volume requirement in this
rule.
In these circumstances, EPA believes it is appropriate to establish a volume obligation on
refiners and importers that amounts to using 1.15 billion gallons by the end of 2010. This should
not be seen as just a 2010 obligation. It is an obligation that must be met by the end of 2010, and
that reflects the use of biomass-based diesel over both 2009 and 2010. In effect, EPA believes
that given the amount of biomass-based diesel that was already used in 2009, obligated parties
have adequate lead time such that by the end of 2010 their use of biomass-based diesel over both
2009 and 2010 can quite feasibly and practicably amount to 1.15 billion gallons. This recognizes
that approximately 300 million gallons have already been used in 2009, calling for the use of
approximately 815 million additional gallons by the end of 2010. Less volume may actually be
called for, as obligated parties can also use 2008 RFS1 RINs that are not used for other
compliance purposes.
As discussed above and in more detail later and in Section IV.B.4 of the preamble and
Section 1.5.4 of the RIA, there is adequate lead time to accomplish this given the large excess
current capacity for production of biomass-based diesel. In addition, this approach maximizes
the ability to meet the volume goals established by Congress in EISA. Recognizing that, in light
of the fact that we are issuing the final RFS2 regulations over a year later than specified in the
statute, no program established by EPA will match the specific structure envisioned by Congress
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in EISA, this approach comes closest to meeting both the content and purpose of EISA. It is
built on and achieves the same volume levels envisioned by Congress. It also functions very
similar to the compliance carryover provisions adopted by Congress. Section 211 (o) (2) (A) uses
broad language giving EPA authority to "revise the regulations under this paragraph to ensure
that transportation fuel sold or introduced into commerce in the Untied States .... on an annual
average basis, contains at least the applicable volume of ... biomass-based diesel determined in
accordance with subparagraph (B)." This generally broad grant of authority reasonably is
construed to include the authority to adopt this kind of transition from RFS1 to RFS2
requirements, that best promotes the purposes of the EISA biomass-based diesel provisions,
given all of the circumstances noted above and best matches the 2009 transition from RFS1 to
RFS2 envisioned in EISA.
The alternative approach, suggested by some commenters, would be for EPA to establish
solely a 2010 volume requirement, based on the 0.65 billion gallons. This would lead to less use
of biomass-based diesel over the two calendar years than envisioned by Congress.
This approach of a combined 2009 and 2010 volume requirement, achieved by the end of
2010, does not impose any retroactive requirements. The obligation that is imposed under the
RFS2 regulations is forward-looking - by February 28, 2011, when compliance is determined,
obligated parties must satisfy a certain biomass-based diesel volume obligation. This is a future
requirement and can be satisfied by biodiesel produced and used in 2009 in addition to 2010, and
to some extent biodiesel produced and used in 2008. However the RFS2 regulations do not
change in any way the legal obligations or requirements that apply for conduct or action
occurring prior to the effective date of the RFS2 regulations. Instead, the RFS2 requirements
impose new biomass-based diesel requirements that must be met in the future. While they take
into account and give credit for past actions, they do not regulate or change in any way the legal
obligations applicable to past conduct.
Some commenters stated that this approach would make them in noncompliance as of the
issuance of the regulations. That is not accurate. Compliance by refiners or importers is not
determined until February 28, 2011. No one can be in noncompliance with this volume
obligation prior to that date. As of the effective date of the RFS2 regulations, refiners and
importers will have new obligations that they will have to meet by a future compliance date, but
the regulations do not mean that they are in noncompliance upon issuance of the regulations.
Sufficient capacity exists for producing the entire biomass-based diesel needed in 2010 to
comply with the combined 1.15 billion gallon requirement. As discussed in section IV.B.4 in the
preamble, biodiesel production capacity has continued to grow and is currently estimated at over
2.8 billion gallons; also 75 million gal/yr of renewable diesel production capacity is expected to
come online in 2010 as well.
As a benchmark, U.S. biodiesel production in 2008 reached an estimated 776 million
gallons, demonstrating that not only does the U.S. have ample production capacity, but also the
feedstock and distribution infrastructure to produce very large volumes. For various economic
reasons, production fell in 2009, but despite this fact, we have seen that approximately 600
million gal/yr of capacity was built or purchased between fall of 2008 and fall of 2009
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(determined by comparing lists of operating plants maintained by National Biodiesel Board).
This suggests continued interest and available production capacity to enable obligated parties to
meet the standard.
As an additional metric, we see that for July-September of 2009 (the latest EIA data
available as of this writing), biodiesel was produced at an annualized rate of 570 million gal/yr.
Many of these plants are operating below their full capacities, so simply increasing utilization
will likely be sufficient to meet the required volume for 2010. In reviewing biodiesel production
over time, it is clear that wide swings in production can occur extremely rapidly. Thus,
increasing production at plants currently operating is entirely feasible, with the main issues
limited to purchase and transport logistics for the increased volumes of feedstock. Meanwhile, a
portion of the large amount of idle capacity could also be brought online once operators receive
the signal that will be provided by publication of this final rulemaking. Biodiesel plants have the
ability to restart rapidly as evidenced by the long history of facilities shutting down temporarily
and then starting back up again when economic conditions improve.
3.6.2.3 Request for Interim Rulemaking
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2510
Organization: Iowa Renewable Energy, LLC
Comment:
The commenter (2510) says EPA should implement interim rules to ensure the volume
requirements for biomass-based diesel are met and not further delayed. Delaying the effective
date is not consistent to the stated goal to reduce U.S. dependence of foreign sources of
petroleum by increasing domestic sources of energy. [[Docket number 2510.1, p. 2]]
The commenter concludes that the final rules as they are today will destroy business, investors
will lose their equity, and employees will lose jobs and benefits. Delaying the implementation of
a good RFS proposal encourages the use of more foreign oil, and that should not be the goal of
EPA's proposal. [[Docket number 2510.1, p. 8]]
Document No.: EPA-HQ-OAR-2005-0161-1051
Organization: Aberdeen Development Corp.
Comment:
The commenter (1051) supports having the RFS2 regulations enforceable beginning January 1,
2010 but adds that delayed implementation of the biomass-based diesel requirement has
adversely affected the biodiesel industry and the commenter specifically. Recognizing that
EPA's proposed rule may not be finalized until the end of 2009 and may have an effective date
beyond January 1, 2010, EPA must act now to effectuate Congressional intent and implement the
2009 volume mandate for biomass-based diesel (and, if necessary, the 2010 requirement).
[[Docket number 1051.1, p.l]]
Document No.: EPA-HQ-OAR-2005-0161-1005
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Organization: Cotner Consulting Services
Comment:
The commenter (1005.1) noted that the Energy Independence and Security Act (EISA) of 2007
added a specific mandate for biomass-based diesel as part of the program's Advanced Biofuels
schedule. The biomass-based diesel requirement was to begin in 2009 with 500 million gallons.
EISA required EPA to revise the current RFS regulations to ensure these new mandates are
implemented. Unfortunately, EPA has yet to issue final rules largely due to the complicated and
controversial lifecycle analysis being conducted as part of the RFS2 regulations. This has
delayed implementation of the biomass-based diesel requirement, which has adversely affected
the biodiesel industry. The commenter believes that EPA must act now to effectuate
Congressional intent and implement the 2009 volume mandate for biomass-based diesel (and, if
necessary, the 2010 requirement). (1005.1, p.l)
The commenter believes that existing biodiesel facilities, which are able to meet the RFS2
requirements with existing feedstock sources, should not be unfairly penalized for assumptions
related to international land use changes. EPA has already indicated that obligated parties will
be able to use 2009 biodiesel and renewable diesel to meet the RFS2 requirements. The
commenter believes that EPA should grant this relief in the form of an interim final rule that
codifies this finding and that would ensure the biomass-based diesel requirement is being met
until the entire RFS2 program is finalized and becomes effective. At a minimum, EPA must
provide notice that 2009 biodiesel RINs are valid and will be required to show compliance with
the RFS2 to fulfill Congressional intent and provide legal certainty to the industry. (1005.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-1052
Organization: Pennsylvania Energy Resources Group (ERG)
Comment:
The commenter (1052) states that existing biodiesel facilities which are able to meet the RFS2
requirements with existing feedstock sources should not be unfairly penalized for assumptions
related to international land use changes. Since EPA has already indicated that 2009 biodiesel
and renewable diesel can be used to meet the RFS2 requirements, an interim rule will support
stability for the industry. [[Docket number 1052.1, pp. 1-2]]
Document No.: EPA-HQ-OAR-2005-0161-2079
Organization: AE Biofuels, Inc.
Comment:
The commenter (2079.1) requests that EPA publish a rule that will implement the Biomass-based
Diesel requirement for 2009 (and until final regulations become effective) or, at a minimum,
provide notice that 2009 biodiesel and renewable diesel will be valid and required to be in
compliance with the RFS2 program. (2079.1, p. 3)
Document No.: EPA-HQ-OAR-2005-0161-2360
Organization: Archer Daniels Midland Company (ADM)
Comment:
The commenter (2360.1) requests that EPA publish a rule that will implement the Biomass-based
Diesel requirement for 2009 and 2010 (and until final regulations become effective) or, at a
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minimum, provide notice that 2009 and 2010 biodiesel and renewable diesel will be valid and
required to be in compliance with the RFS2 program. (2360.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-1051
Organization: Aberdeen Development Corp.
Comment:
The commenter (1051) states that EPA has already indicated that obligated parties will be able to
use 2009 biodiesel and renewable diesel to meet the RFS2 requirements. If EPA does not issue
an interim final rule that codified this finding then, at a minimum, EPA must provide notice that
2009 biodiesel RINs are valid and will be required to show compliance with the RFS2 to fulfill
Congressional intent and provide legal certainty to the industry. [[Docket number 1051.1, p, 1]]
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) believes that EPA must implement the volume mandates for biomass-
based diesel. The commenter is concerned about delays due to the ongoing work needed to
complete the lifecycle analysis and urges EPA to issue RVOs this year for the 2010 required
volumes for renewable fuel, advanced biofuels, and biomass-based diesel. Issuing RVOs this
year for each of these mandates would provide certainty for stakeholders and ensure that the
mandated volumes are meted. The commenter suggests that until EPA can finalize the RFS2
regulation, the current RFS regulations can be used to implement the volume requirements.
[[Docket number 2249.1, pp. 2-3]
Document No.: EPA-HQ-OAR-2005-0161-1001
Organization: Kurzman Clean Tech Research & Kurzman Capital, LLC
Comment:
The commenter (1001.1) looks forward to working with EPA to address the proposal's
shortcomings and implement a final rule prior to January 1, 2010. The commenter recognizes,
however, that a final rule may not be issued until the end of 2009 and/or may not be made
effective until after January 1, 2010. The commenter urges EPA to issue an interim rule to
effectuate Congressional intent and address the adverse impacts any further delay of
implementing the RFS2 requirements will have on the biodiesel industry. (1001.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-1015
Organization: Renewable Energy Group
Comment:
The commenter also says EPA should implement interim rules to ensure the required volume
requirements biomass-based diesel to the regulated parties are met and not further delayed.
Delaying the effective date is not consistent to the stated goal to reduce U.S. dependence of
foreign sources of petroleum by increasing domestic sources of energy. Recognizing the
complexity of this task and that never before has a regulatory program assessed greenhouse gas
emissions of fuels. [[Docket number 2123.1, pp. 3-4]]
Document No.: EPA-HQ-OAR-2005-0161-1049
Organization: Prairie Pride, Inc.
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Comment:
The commenter (1049) states that delayed implementation of the biomass-based diesel
requirement has adversely affected their business and believes that EPA should act now to
implement the 2009 volume mandate for biomass-based diesel. Also, EPA should grant this
relief in the form of an interim final rule that codifies the biomass-based diesel requirement is
met until the entire RFS2 program is finalized and becomes effective. [[Docket number 1049, p.
1]]
Document No.: EPA-HQ-OAR-2005-0161-1051
Organization: Aberdeen Development Corp.
Comment:
Since EPA has already indicated that obligated parties will be able to use 2009 biodiesel and
renewable diesel to meet the RFS2 requirements, the commenter believes that EPA should grant
this relief in the form of an interim final rule that codifies this finding and that would ensure the
biomass-based diesel requirement is being met until the entire RFS2 program is finalized and
becomes effective. [[Docket number 1051.1, p.l]]
Document No.: EPA-HQ-OAR-2005-0161-1052
Organization: Pennsylvania Energy Resources Group (ERG)
Comment:
The commenter (1052) strongly believes that an interim rule is critical to ensure that the 2009
and 2010 volumes are met, as required by the Energy Independence and Security Act of 2007.
The two month extension to the comment period for the new regulations further delays
implementation, creating additional difficulties for biodiesel plants, refineries and terminal
facilities that are spending hundreds of millions of dollars in Pennsylvania alone to meet the
volume goals under RFS2. The commenter states that the Pennsylvania biodiesel industry
cannot afford a significant further delay in implementation of the volume requirements mandated
by EISA 2007. [[Docket number 1052.1, p. 1]]
Document No.: EPA-HQ-OAR-2005-0161-2010, EPA-HQ-OAR-2005-0161-2011, EPA-
HQ-OAR-2005-0161-2013, etal.
Organization: SoyMor Biodiesel, LLC, Western Dubuque Biodiesel LLC, Central Iowa
Energy, LLC, et al.
Comment:
The commenters stated that EPA should implement interim rules to ensure the required volume
requirements biomass-based diesel to the regulated parties are met and not further delayed.
Delaying the effective date is not consistent to the stated goal to reduce U.S. dependence of
foreign sources of petroleum by increasing domestic sources of energy. Recognizing the
complexity of this task and that never before has a regulatory program assessed greenhouse gas
emissions of fuels.
Document No.: EPA-HQ-OAR-2005-0161-2300
Organization: Dow AgroSciences
Comment:
The commenter (2300) requests that due to the tight timing and possibilities that the rule may not
be made effective until after January 1, 2010, EPA should issue an interim rule to effectively
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state Congressional intent which the commenter believes is different from that currently
proposed. (2300, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2435
Organization: R.W. Heiden Associates LLC
Comment:
The commenter (2435) recognizes that a final rule may not be issued until the end of 2009 and/or
may not be made effective until after January 1, 2010. As such, they urge EPA to issue an
interim rule to effectuate Congressional intent and address the adverse impacts any further delay
of implementing the RFS2 requirements will have on the biodiesel industry. The lack of
implementation of the RFS2 adds greatly to business uncertainty in an already stressed market
place. [[Docket number 2435.1, pp. 1-2 and 6-7]]
Document No.: EPA-HQ-OAR-2005-0161-2464, 2537
Organization: Musket Corporation
Comment:
The commenter (2464.1) believes that EPA should issue an interim version of RFS2 in time to
enforce the 2009 volumes in the EISA no later than January 1, 2010 unless a final version can be
issued at that time. (2464.1, p.2) (See Docket Number 2464.1, pp.1-2 for a detailed discussion of
this issue)
Our Response:
An interim rulemaking that put in place the 2009 volume requirement for biomass-based
diesel without also putting in place EISA's new definition for biomass-based diesel, renewable
fuel, and renewable biomass, would have raised significant legal and policy issues that would
necessarily have required a new proposal with its own public notice and comment process. After
analyzing our available authorities, we determined that a rulemaking addressing these issues
without allowing for public participation would ultimately not be successful. Additionally,
because of the significant time required for notice and comment rulemaking, the need to provide
industry with adequate lead time for new requirements, and the fact that we were already well
into calendar year 2009 when the request for an interim rulemaking was received, it was unlikely
that any interim rule could impact biodiesel demand in 2009. Resources applied to the interim
rulemaking would also have been unavailable for development of the final RFS2 rulemaking. As
a result, developing an interim rule could easily have undermined EPA's ability to complete the
full RFS2 program regulations in time for 2010 implementation. Therefore, we believed that the
most prudent course of action was to continue development of the final RFS2 rulemaking rather
than to divert resources to an interim rulemaking that would not likely have had a significant
impact on 2009 biodiesel demand.
3.6.2.4 Treatment of 2008 and 2009 Biodiesel RINs
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0994
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Organization: Griffin Industries
Comment:
The commenter is against the proposal of allowing 2008 Biodiesel and Renewable Diesel excess
RINs for compliance of the 2009/2010 Biomass-based Diesel requirements. This can work
against the purchase of Biodiesel and Renewable Diesel in 2009 and 2010. Per the RFS1
regulations, excess 2008 RINs no matter what type are permitted to meet the 2009 RFS1 volume
obligation, but should not be permitted to meet the 2009/2010 Biomass-based Diesel Obligation.
This eliminates any possible confusion about when 2008 RINs are to be retired. (0994.1, p.8)
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
The commenter (1044) supports this proposed option, allowance of 2008 RINs for compliance
subjected to the 20% carryover provisions, because it demonstrates a common sense approach of
the intended actions of RFS1 and identified the issue caused by the delayed implementation of
RFS 2. The commenter asks for an immediate notice or technical amendment on this issue.
(1044.1, p. 2)
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter states that current holders of biodiesel RINs for 2008 and 2009 (and potentially
2010) should be able to carry those RINs forward for use in demonstrating compliance for 2011
if EPA carries any of the biodiesel requirements for 2009 and 2010 forward to 2011. [[Docket
number 2130.1, p. 17]]
Document No.: EPA-HQ-OAR-2005-0161-2155
Organization: Petroleum Marketers and Convenience Stores of Iowa (PMCI)
Comment:
The commenter (2155.1) believes that it is important for the EPA to set guidance stating that
2009 generated biodiesel RINs be used for biodiesel compliance purposes and be allowed to
carry over into 2010.
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
Referring to the November 2008 notice of the 2009 mandated volumes, the commenter believes
that it is extremely unfair for EPA to now finalize rules that cause economic harm to the
obligated parties who attempted to comply with EPA's earlier guidance. The commenter
recommends that EPA allow 2008 and 2009 biodiesel RINs to comply with either a partial 2010
or a 2011 biomass based diesel obligation. [[Docket number 2233.2, p. 39]]
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP)
Comment:
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The commenter (2384) recommends commencement of a biodiesel requirement on January 1,
2011 and a volume requirement of 800 million gallons for 2011 as was legislated in EISA. The
commenter also recommends that any biodiesel blended in 2009 and 2010 be allowed to be
applied to the 2011 obligations. [[Docket number 2384.1, p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
In particular, EPA has proposed to allow 2008 RINs be used to meet the joint 2009/2010
Biomass-based Diesel volume. The commenter states that this proposal would violate the 12
month limit on the life of a credit, as such RIN should have been applied in 2008 and could have
been applied to meet the overall standard in 2009. Moreover, there is more than sufficient
supply in 2009, and expected in 2010, to meet the Biomass-based Diesel requirement. Indeed,
obligated parties have refused to purchase biodiesel in 2009, making it unlikely that the 2009
volume mandate will be met in actual volumes, despite availability of biodiesel. Obligated
parties should not be able to make up for their own inaction by using 2008 RINs. There is
simply no justification for allowing 2008 RINs to be used to show compliance in 2010. [[Docket
number 2249.2, pp. 31-32]]
Our Response:
Since the 2010 compliance demonstration will include the obligation that would have
applied in 2009, and 2008 RINs would be valid for 2009 compliance, we are allowing excess
2008 biodiesel and renewable diesel RINs that were not used for compliance purposes in 2008 to
be used for compliance purposes in 2009 or 2010. This is consistent with the requirement that
RINs are valid in the year they are generated and in the following calendar year. Moreover, all
2009 RINs for biodiesel and renewable diesel are valid for complying with this combined
2009/2010 standard, consistent with our intention as described in the November 2008 notice
setting the 2009 standard for total renewable fuel. Roll-over provisions apply when using prior-
year RINs, as discussed in the preamble.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) disagrees with EPA's proposal to allow 2009 biodiesel and renewable
diesel RINs to be used for the 2010 biomass-based diesel standard. The commenter noted that
EPA is trying to apply the statutory RFS2 standard in 2009 even before implementing the RFS2
program, on the assumption that soy-based biodiesel could satisfy EISA's GHG lifecycle test.
Since EPA's analysis ultimately showed biodiesel did not qualify as biomass-based diesel, this
assumption is no longer valid. If EPA could legally justify extending the allowance program to
biomass-based diesel, this would help the market function better when EPA's volume estimates
prove significantly off the mark. (2132.1, p. 17)
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Our Response:
Our updated lifecycle analysis for the RFS2 final rule determined that soy-based
biodiesel meets the 50% GHG threshold for biomass-based diesel. We note, however, that
biodiesel RINs generated in 2009 are valid to demonstrate compliance with the 2010 RFS2
biomass-based diesel standard as a transition measure, reflecting the fact that RINs are valid in
the year they are generated and the following calendar year. Thus, the 2009 biodiesel RINs
would be valid for use in complying with the 2010 standards even if the fuel for which the RINs
were generated did not meet the 50% RFS2 GHG reduction threshold or if that fuel was not
made with renewable biomass. Therefore, biodiesel RINs generated in 2009 are valid for
meeting the appropriate RFS2 standards. Our analysis of the biomass-based diesel market
indicates that sufficient production capacity exists to meet the combined 2009/2010 volume
requirement of 1.15 bill gal, taking into account biodiesel produced in 2009.
3.7 Fuels that are Subject to the Standards
3.7.1 Coverage Expanded to Transportation Fuels
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2396
Organization: CVR Energy
Comment:
The commenter (2396.1) supports the long-range goal of diversifying America's transportation
fuels and do not oppose the development and use of biofuels.
Document No.: EPA-HQ-OAR-2005-0161-2369
Organization: New Generation Biofuels (NGBF)
Comment:
The commenter (2369) states that given that EISA expanded the RFS program to include
transportation fuel other than gasoline, EPA proposes to include motor vehicle, nonroad,
locomotive, and marine (MVNRLM) diesel fuel in the required volume obligation (RVO)
calculation. The commenter argues that biofuels that may be used in non-road, locomotive
applications would qualify for RINs as well. If there is a larger pool of RVO required by
including the total MVNRLM volumes, biofuels should be able to be used in those applications
as well. Further, reducing the emissions in the nonroad and locomotive applications is just as
valid as reducing emission in motor vehicle applications. [[Docket number 2369.1, p. 5]]
Document No.: EPA-HQ-OAR-2005-0161-2358
Organization: Society of Independent Gasoline Marketers of America (SIGMA) and the
National Association of Convenience Stores (NACS)
Comment:
The commenter (2358) supports EPA's extension of the RFS to all transportation fuels, including
diesel and nonroad fuels. [[Docket number 2358.1, p. 2]]
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Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
It is the commenter's (2233) position that EPA cannot lawfully establish renewable fuel
standards (either general or fuel-type-specific) based on the volumes set forth in EISA without
completing the rulemaking specified in the final sentence of CAA 211 (o) (2) (A) (I), nor can EPA
lawfully extend the RFS program to fuels other than gasoline.
Our Response:
We appreciate the comments received on this topic. With respect to comments related to
the expansion of the RFS program to include "transportation fuels", EISA clearly stated that the
renewable fuels standards apply to transportation fuels—and such fuels are to include fuels for
use in "motor vehicles, motor vehicle engines, nonroad vehicles, and nonroad vehicle engines.
Accordingly, we are applying the standards to transportation fuels in the RFS2 rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
The commenter (1044) believes the definitions at §80.1401 are incomplete and offered the
following recommendations:
Diesel—The definition for diesel refers to any and all products listed in §80.1407. So, in
§80.1407 the fuels Gasoline, RBOB, CBOB, and Biomass-Based Diesels and others are listed
thereby capturing gasoline products as diesel. We are certain this is an error. The commenter
proposes the definition of Diesel to codify 40 CFR 80.2 and requests Diesel to be defined as
MVNRLM (petroleum derived) as discussed in the preamble. As it is written, the term diesel
would also imply that the renewable fuel producers (Biomass-Based Diesel) would become
obligated parties since the federal definition of diesel 40 CFR Part 80 (80.2(x)(2)) includes
biodiesel.
This further identifies the need and use of MVNRLM as discussed in the preamble as a definition
for diesel in RFS 2 and absolves the renewable biomass based diesel producers from compliance
issues associated with obligated parties. The commenter believes this is an unintended
consequence and would promote the intent of the RFS for compliance purposes between parties.
[[Docket number 1044.1, pp. 3-4]]
Our Response:
The final regulations at §80.1407(d) specify that diesel fuel which is subject to the
standards must be non-renewable, and meet the definition of MVNRLM diesel fuel at
§80.2 (qqq).
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3.7.2 Treatment of Heating Oil and Jet Fuel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2314
Organization: The New England Fuel Institute
Comment:
While the commenter (2134.1) supports including heating oil and jet fuel into the RIN program,
the commenter opposes any effort to subject these fuels to the RVO mandate. The problem with
calculating obligated party RVOs for heating oil is that it is difficult to predict with any
reliability the volumes needed for a particular heating season due to fluctuating winter weather
conditions. Previous year consumption data provides little evidence with which to predict
current year demand. (2134.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter requests that EPA clarify whether aviation fuel will be included in determining
the renewable volume obligation if RINs are generated. The commenter believes that aviation
fuel should be included in the definition of transportation fuel as defined in EISA, and counted in
determining obligated parties RVOs. The commenter finds aviation to be a mode of
transportation and more specifically a nonroad vehicle, and thus it would be appropriate to
categorize aviation fuel as a type of transportation fuel in calculating the RVOs. [[Docket
number 2249.2, pp. 38-39]]
Our Response:
While we are not requiring heating oil and jet fuel to be included in the fuel used by a
refiner or importer to calculate their RVOs, we are allowing renewable fuels used as or in
heating oil and jet fuel to generate RINs. Similarly, RINs associated with a renewable fuel, such
as biodiesel, that is blended into heating oil will continue to be valid for compliance purposes.
As mentioned above, EISA clearly stated that the renewable fuels standards apply to
transportation fuels. However, the statute did not expressly define all terms in the definition of
"transportation fuel", so we are interpreting this to mean that Congress defers to the Agency's
definitions in this respect. We are interpreting the "diesel" portion of transportation fuel to be
MVNRLM diesel fuel (as defined at §80.2(qqq)), and jet fuel is not an MVNRLM diesel fuel.
As such, we are not considering jet fuel (or heating oil) to be a transportation fuel under the RFS
program.
3.7.3 Treatment of Fuels for Use in Ocean-Going Vessels
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1044
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Organization: GEN-X Energy Group Inc.
Comment:
The commenter supports the definition of an Oceangoing Vessel to include Category 3 engines
only, and opposes the inclusion of Category 2 engines. [[Docket number 1044.1, p. 4]] [[See
Docket number 1044.1, pp 4-5 for further discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) is opposed to expanding the definition of "ocean-going vessel" to include
C2 engines. To help with the success of the RFS, EPA should allow every possible outlet for
renewable fuel. [[Docket number 2393.1, p. 78]]
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) believes that EPA should revise its definition of "ocean going" vessels.
While the commenter supports excluding Category 3 marine engines, as provided by the statute,
it believes that EPA should clarify that the definition does not include any Category 1 and
Category 2 marine engines. [[Docket number 2249.2, p. 36-37]] [[See pp. 36-38 for additional
discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter is opposed to the expansion of the term "ocean-going vessel" to include those
powered by C2 engines. [[Docket number 2233.2, p. 69]]
Our Response:
To avoid confusion with the recently finalized Category 3 Marine Rule (Control of
Emissions from New Marine Compression Ignition Engines at or Above 30 Liters per Cylinder,
signed December, 18, 2009), we have instead finalized a definition of "fuels for use in ocean-
going vessels." We believe that "fuels for use in ocean-going vessels" is a more appropriate
definition because it is based on the fuel supply system. Under this definition, those heavy
distillate and residual fuels that are intended for use in ocean-going vessels are not considered
transportation fuels and thus will not be subject to the RVOs.
For this definition, we interpret the term "ocean-going vessels" to mean, primarily,
Category 3 marine vessels (vessels propelled by the largest category of marine engines—those
with a displacement of 30 liters per cylinder or more). Since these vessels use residual fuels
most of the time, and almost no other marine vessels use residual fuel, our definition deems
marine residual fuel to be a fuel used in ocean-going vessels. The definition also recognizes that
these vessels may sometimes use other fuels. In particular, the definition states that Emission
Control Area (EGA) marine fuel is also deemed to be a fuel used in ocean-going vessels.
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(Recently adopted regulations specify that fuel used by these vessels near the U.S. coast will be
EGA marine fuel that is generally subject to a 1,000 ppm sulfur cap beginning June 1, 2014.)
With respect to the comments that EPA should not allow the term "ocean-going vessel"
to include Category 2 engines, we note that Category 1 and Category 2 engines/vessels are
generally subject to the NRLM diesel fuel standards. Since NRLM diesel fuel would not be
considered part of "fuels for use in ocean-going vessels", this means that the vast majority of fuel
used by Category 1 and Category 2 engines would be considered part of "transportation fuels".
However, our recent rulemaking to establish new standards for Category 3 engines included a
provision that would effectively allow Category 1 and 2 auxiliary engines installed on Category
3 vessels (i.e., those vessels powered by Category 3 engines) to utilize fuels other than NRLM.
This allowance is to reduce burden that could potentially be caused by requiring that these
Category 1 and 2 auxiliary engines burn 15 ppm diesel fuel—which could result in a Category 3
vessel needing to carry three different types of fuel onboard. Thus, to the extent that these
engines use residual fuel or EGA marine fuel, their fuel would also not be considered
"transportation fuels".
3.8 Renewable Volume Obligations (RVOs)
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2014
Organization: Clean Fuels Clearinghouse
Comment:
The commenter (2014.1) provided specific comments regarding regulatory text responding to
RVOs. [[See Docket Number 2014.1, pp.1-2 for these detailed comments]]
Our Response:
We have modified the language in §80.1427 to be clearer with regard to compliance with
RVOs.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2154
Organization: ConocoPhillips
Comment:
The commenter (2154.1) believes that EPA should apply any expired RINs to reducing the next
year's total volume obligation. (2154.1, p.6)
Our Response:
While we took comment on this alternative in the NPRM, there was little support for it
among stakeholders. We do not believe it would be appropriate to apply expired RINs to the
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next year's volume requirements since it would have the effect of making the valid life of RINs
meaningless on a nationwide basis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2364
Organization: Tyson Foods, Inc.
Comment:
The commenter (2364.1) has serious concerns with the renewable fuels volumes mandated in the
Energy Independence and Security Act of 2007 (EISA), particularly the increased mandate for
corn-based ethanol. A sustainable and successful biofuels program will promote high
performance products that do not rely primarily on food-based feedstocks. The commenter urges
EPA to make this transition to the next generation of biofuels its primary focus as it finalizes this
rule. (2364.1, p.l)
Our Response:
Since the volume mandates were specified in EISA, EPA has very little authority to
change them. Aside from the waiver provisions, we cannot promote advanced biofuels over
general renewable fuels.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
It is the commenter's (2393) view that if "RIN-less" renewables enter the marketplace suitable
for use in motor vehicles, they are, for the purpose of the RFS, motor vehicle fuels and,
consequently, incur a renewable volume obligation (RVO). To avoid future misunderstandings,
EPA should include a clear statement to this effect in the final rule and its preamble. [[Docket
number 2393.1, p. 8]]
Our Response:
We agree that biofuel may be produced or imported under RFS2 for which no RINs are
generated. If this biofuel is used as transportation fuel, it might be reasonable to treat it as
obligated fuel subject to the standards. However, we do not believe that it would be appropriate
at this time to finalize a requirement that RIN-less biofuel be considered an obligated fuel. We
did not propose such an approach in the NPRM, and as a result many renewable fuel producers
who could be affected did not have an opportunity to consider and comment on it. Moreover, the
volume of RIN-less biofuel is likely to be small compared to the volume of renewable fuel with
RINs since RINs have value and producers currently have an incentive to generate them. See
further discussion in preamble Section III.D.7.
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3.8.1 Treatment of RFS1 RINs under RFS2
Document No.: EPA-HQ-OAR-2005-0161-1033
Organization: Poet Ethanol Products
Comment:
The commenter believes the EPA's suggestion of allowing any appropriately generated RINs
with a D-Code of 1 that exist prior to the effective date of RFS2 to also be treated as cellulosic
biofuel under RFS2 and be used to meet up to 20% of the current year Renewable Volume
Obligations for Obligated Parties. (1033.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) disagrees with EPA's proposal to allow 2009 cellulosic biomass
ethanol RINs to be used for the 2010 cellulosic biofuel standard. (2132.1, p. 17)
Our Response:
We believe that RFS1 RINs with a D code of 1 should be treated as RFS2 RINs with a D
code of 3, as described more fully in Section III.G.3 of the preamble. However, RFS1 RINs
generated in 2010 will not be subject to the 20% rollover cap in the context of 2010 compliance
demonstrations.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
With regards to EPA's transition rules for RFS1 RINs, the commenter agrees with EPA that
RFS1 RINs for ethanol would meet new requirements for RFS2, including the renewable
biomass and 20 percent requirement. Although the commenter supports EPA's proposed
transition rules, these rules will not be necessary if the effective date is January 1, 2011. (2329.1,
p. 19)
If EPA continues to allow for some rollover of credits into the next year, the commenter supports
EPA's proposed treatment of RINs generated under RFS1 to show compliance with RFS2
requirements. (2329.1, p.91)
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
The commenter (1044) supports the use of excess 2009 RINs for 2010 compliance, as this
represents a responsible approach to the smooth transition to the new program. In addition, it is
the commenter's opinion this action supports all renewable fuels producers and would alleviate
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concerns of the obligated parties regarding compliance. The commenter asks for an immediate
notice or technical amendment on this issue. (1044.1, p. 2)
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) supports the proposed read-across from the RFS1 biodiesel and cellulosic
ethanol RINs for use in RFS2. Using RIN "D" code for cellulosic ethanol is appropriate.
[[Docket number 2130.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) supports the proposed read-across from the RFS1 biodiesel and
Cellulosic ethanol RINs for use in RFS2. Using RIN "RR" code for ester and non-ester based
biodiesel to biomass-based diesel is appropriate. [[Docket number 2130.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) urges EPA to carefully review the final rule to ensure that it has
completely translated the single RIN concepts from RFS1 to the four different types of RINs in
RFS2. For example when RINs are retired, it should be made clear that the type of RIN which is
retired should match the type of RIN generated. [[Docket number 2233.2, p. 10]]
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated
Comment:
To avoid double counting, RINs that have been retired, previously used for compliance or used
in an off-road application shall not be eligible for use or eligible to be "unretired." Only RINs
which have not been previously used for compliance should be allowed to be used as credit
against Renewable Volume Obligations (RVOs). (2511.1, p.7) [[See Docket Number 2511.1,
pp.7-8 for a detailed discussion of this issue]]
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) notes that the Proposed Rule states that RINs previously retired in
nonroad applications may be reinstated under the RFS2. The commenter agrees with this
language and asks the EPA to provide a workable time frame for such reinstatement. The
commenter also asks EPA to clarify that RIN ownership for reinstated RINs belong to the party
that retired the RIN. Additionally, the commenter asks EPA to clarify specific treatment of
nonroad RINs in 2010 or later provided the RFS2 does not commence on January 1, 2010.
[[Docket number 2249.2, p. 36]]
Document No.: EPA-HQ-OAR-2005-0161-2471
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Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter (2471.1) supports EPA's position that RINs generated under RFS1 should be
grandfathered under RFS2. In particular, we agree that biodiesel RINs with an "RR" code of
"15" or "17" should be considered "Biomass-Based Diesel" RINs under RFS2, and that RINs
with an RFS1 D-code of 1 should be treated as "Cellulosic Biofuel" RINs. We also suggest
allowing RINs for waste-derived ethanol (RFS1 D-code of 2, "RR" code of "25") to qualify as
"Advanced Biofuel" RINs. (2471.1, P.12)
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter supports the proposal documented in III.E.3.a that provides for 2009 RFS1 RINs
with a D code of 15 or 17 to be equivalent to 2010 RINs with a D code of 2 (or D code of 4 if the
six D code option is approved). This will allow all excess 2009 Biodiesel RINs to meet up to
20% of the 2010 Biomass-based Diesel obligation (after the 2009 volume obligation is
subtracted from the total 2010 obligation). (0994.1, p.8)
Our Response:
We agree that RFS1 RINs should be valid for compliance with the RFS2 standards, and
have finalized the transition provisions as proposed. These provisions ensure that the two-year
valid life of RINs is maintained during the transition from RFS1 to RFS2. Our final regulations
at §80.1427(a) (4) describe the treatment of RFS1 RINs for compliance purposes under RFS2.
According to this protocol, all RFS1 RINs can be used for compliance purposes under RFS2 and
are correlated according to their RR and D codes.
We do not believe that it would be appropriate to allow RFS1 RINs representing waste-
derived ethanol to qualify as advanced biofuel RINs under RFS2. Although such RFS1 RINs
could be identified by a D code of 2 and an RR code of 25, waste-derived ethanol is not
explicitly defined in the RFS1 regulations at §80.1101. As a result, we do not have confidence
that such renewable fuel would meet the requirements for advanced biofuel under RFS2. Thus,
RFS1 RINs representing waste-derived ethanol will be treated as renewable fuel RINs under
RFS2. However, in 2010 there will be no need for RINs categorized as advanced biofuel since
the advanced biofuel standard will be automatically met with biomass-based diesel RINs
generated to meet the biomass-based diesel standard.
Retirement of RINs for renewable fuels used in nonroad or heating oil applications is
governed by RFS1 regulations at §80.1129 (e). We believe that a specific RIN which is retired
under these circumstances should be allowed to be reinstated and used for compliance purposes
under RFS2, since RINs have a valid life of 2 years, and an RFS1 RIN generated in 2009 or 2010
should be valid for RFS2 compliance purposes in 2010 or 2011, respectively, if it has not
previously been used for compliance. The protocol for RIN reinstatement is described at
§80.1429(g). Since the same specific RIN that was retired would be reinstated, the type of RIN
which is retired will always match the type of RIN generated. RIN ownership for reinstated
RINs belongs to the party that owned the RIN at the time it was retired.
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3.8.2 RINs Eligible to Meet Each RVO
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2118
Organization: CountryMark Cooperative, LLP
Comment:
The commenter (2118.1) believes that consideration should be given to allowing RINs to be
interchangeable to meet individual obligation of each category.
Document No.: EPA-HQ-OAR-2005-0161-2400
Organization: Murphy Oil USA, Inc.
Comment:
The commenter recommends the substitution of corn RINs for all or part of cellulosic obligation
be allowed. (2400.2, p. 1)
Our Response:
EISA intended that specified categories of renewable fuels would be used to meet
specified volume mandates. The substitution of one type of RIN for another would make the
four separate standards meaningless.
3.8.3 Deficit Carryovers
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2345
Organization: Independent Fuel Terminal Operators Association (IFTOA)
Comment:
Regarding the "deficit carry over" provision, EPA says that the excessive 2009 RINs could not
be traded to another party. The commenter (2345) believes this approach is appropriate because
it approximates the manner in which the statute had assumed compliance would have been
demonstrated if the RFS2 regulations had been issued by the end of 2008. [[Docket number
2345.1, p. 5]]
Our Response:
The commenter refers specifically to the proposed approach to the biomass-based diesel
standard in which the number of 2009 biodiesel RINs used by an obligated party for compliance
in 2009 can be subtracted off that party's RVO for the biomass-based diesel standard in 2010,
prior to determining compliance with that RVO. In this context, such RINs could not be traded
to another party. We agree with the commenter that this approach is designed to approximate the
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intent of EISA given that RFS2 was not effective in 2009, and we have finalized this approach as
proposed.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2102
Organization: RENTECH, INC
Comment:
The commenter (2102.1) encourages EPA to allow obligated parties to run negative credit
balances for longer periods of time in the early years of the program, consistent with EPA's
statutory obligations to determine available volumes each year. (2102.1, p.6)
Our Response:
CAA 211 (o) explicitly allows a deficit carryover of no more than one year at a time. As
a result, obligated parties cannot carry a deficit for two or more years in a row. The statute does
not provide EPA the authority to change this provision.
3.8.4 Obligated Volumes
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2400
Organization: Murphy Oil USA, Inc.
Comment:
The commenter (2400.2) believes that exported fuels should be excluded from a company's
RVO. EISA requires EPA to exclude fuel from an obligated party's obligation because EISA is
limited to the transportation fuels used in the United States. The commenter recommends that
language be put in similar to §80.1407 (d) (5) to include exported distillate fuels as well. Just as
the provisions apply to gasoline fuels, the same provisions should apply to distillate fuels and
should be excluded from the obligation. EPA should also be clear that both gasoline and distillate
volumes produced at transmix facilities do not incur an obligation since these fuels are
previously accounted for and are already part of the obligation of refiners and importers. (2400.2,
p. 12)
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter believes that EPA should include provisions in this section specifying which
types of distillate fuels are included, and excluded from the obligation. EPA should also clarify
that gasoline and distillate volumes produced at transmix facilities do not incur an obligation
since such fuel was already accounted for and is part of the obligation of refiners and importers.
(2505.2, p.5)
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Our Response:
In the list of exclusions for exported gasoline in the proposed regulations at §80.1407(d),
we inadvertently failed to list corresponding exclusions for exported diesel. This has been
corrected for the final rule. The correction includes an explicit reference to diesel in transmix.
3.8.5 Exported Renewable Fuel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2471
Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter (2471.1) believes that EPA should amend the RFS2 regulations to better
recognize certain commercial realities of the renewable fuel export industry. The commenter
believes that modest changes to the regulations can enhance exporters' flexibility. Specifically,
EPA should allow exporters to demonstrate that the product exported was actually produced or
acquired in the preceding year. The commenter noted that the requested change would not in
any way reduce accountability for renewable fuel exports. Instead it would merely correct an
inequity that arises during the transition between compliance years. (2471.1, Section 3.6, pp.12-
13)
Our Response:
The provisions at §80.1430 that require an exporter to determine an RVO based on
exported volumes of renewable fuel are designed to ensure that only renewable fuel actually
consumed within the 48 contiguous states or Hawaii is counted towards meeting the volume
mandates in EISA. Since the statutory volume consumption mandates are annual, the regulations
are designed to account for exported renewable fuel at the time it is exported, when it is removed
from the pool of renewable fuel being consumed in the U.S. In this context, the year of
production of the exported renewable fuel is not as important as the year of exportation.
Moreover, exporters are unlikely to have access to information about the production date of the
renewable fuel they are exporting. Any RINs assigned to the exported renewable fuel may not
have been generated to represent that fuel, since assigned RINs are fungible and can be moved
from one batch of renewable to another.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter also supports an approach where an exporter assumes all ethanol is renewable
fuel and biodiesel is biomass based diesel. The incentives to import cellulosic and advanced
biofuels in the RIN market will encourage companies to import cellulosic and advanced fuels.
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The commenter is aware of several biodiesel exporters who have apparently failed to retire the
RINs associated with biodiesel produced in the U.S. and shipped to Europe. The commenter
urges EPA to enforce these provisions. [[Docket number 2233.2, p. 9]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter also supports the approach where exported ethanol is assumed to be renewable
fuel and exported biodiesel is presumed to be biomass-based diesel. The commenter believes
incentives to import cellulosic and advanced biofuels in the RIN market will encourage
companies to import cellulosic and advanced fuels. Thus, it is highly likely that exported
renewable fuels will not meet the cellulosic and advanced biofuel criteria. [[Docket number
2393.1, pp. 10-11]]
Our Response:
We agree that it is more likely that cellulosic and advanced biofuels will be imported
rather than exported, minimizing any potential misrepresentation of exported volumes when an
exporter determines its RVOs. We also agree that exported volumes of biodiesel and renewable
diesel should in most cases be used to determine an RVO for biomass-based diesel. However,
we have determined that the approach we proposed in the NPRM could provide an opportunity
for some parties to gain an inappropriate advantage in the RIN market. For instance, a party
could import ethanol with advanced biofuel RINs, separate those RINs, export the ethanol, and
be subject to only a total renewable RVO. They would then be able to sell the advanced biofuel
RINs and purchase lower value renewable fuels RINs to satisfy their RVO. A similar situation
could arise when a producer of cellulosic biofuel is also an exporter. Therefore, we have
modified §80.1430 so that if an exporter knows or has reason to know that the renewable fuel
that it is exporting is advanced biofuel or cellulosic biofuel, the exporter must determine an RVO
for the advanced biofuel or cellulosic biofuel rather than simply assuming it is general renewable
fuel.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2096
Organization: Beveridge & Diamond, PC
Comment:
The commenter (2096) notes that a party may receive a biodiesel blend containing volumes of
biodiesel without attached RINs. As currently proposed, EPA's RFS2 regulations do not appear
to place any express requirement on the transferors of such a blend to identify the volume
percentage of biodiesel included in that blend. This ambiguity may become problematic when a
party that subsequently receives the biodiesel blend seeks to export the blend. [[Docket number
2096.1, p. 2]]
The commenter explains that without a requirement that the transferor of a biodiesel blend
disclose to subsequent parties the volume percentage of biodiesel in the blend, an exporter may
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acquire a quantity of blended biodiesel for which the specific volume percentage of biodiesel is
unknown. The exporter would thus be blocked from an ability to make the determination of its
own export RVO. [[Docket number 2096.1, p. 2]]
For this reason, the commenter believes that with regard to every transfer of biodiesel, whether
for export or domestic use, EPA should require that the volume of biodiesel being transferred by
any party be identified in PTDs used to transfer ownership of the blend. At a minimum, the
commenter asks that EPA clarify the obligation of every party that transfers a blend containing
biodiesel from which RINs have been separated to disclose to the transferee the volume of
biodiesel in the transferred blend. [[Docket number 2096.1, p. 2]]
The commenter also points out that EPA's proposal does not identify any test method for use by
exporters making the required volume determination. They respectfully ask that EPA include in
its final RFS2 regulations the specific method, whether ASTM or otherwise, that exporters must
use to determine the amount of renewable fuel or biodiesel in a blend, including the degree of
accuracy to which the Agency requires such a determination to meet. In addition, the commenter
asks EPA to indicate whether there is a de minimis volume percentage of renewable fuel and/or
biodiesel in a blend below which EPA does not require consideration by an exporter determining
its RVO and, if so, the method by which such de minimis amount must be identified. [[Docket
number 2096.1, pp. 2-3]]
Our Response:
We agree that exporters require more specific direction on how to determine the
concentration of renewable fuel in blends that they export. To this end, we have added a
provision to §80.1430(b) (4) that gives exporters the option of obtaining this information from
their supplier, using a radiocarbon dating test method such as ASTM D-6866 to determine the
renewable content of the exported fuel, or by assuming the maximum concentration of the
renewable fuel in the blend as allowed by law and/or regulation.
We do not believe that such direction is necessary for domestic use of biodiesel blends,
since such blending is generally the basis for separation of any assigned RINs. As a result,
downstream parties taking ownership of such blends will not have a need to know the specific
concentration of renewable fuel in the blend under RFS2 regulations.
3.9 Designation of Obligated Parties
3.9.1 Supports Existing Approach
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
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The commenter (2329.1) supports retaining the obligated parties as defined under the current
system. The RFS program has been in place for two years, and the parties understand their
obligations and the requirements. The commenter agrees that the alternatives "would result in a
significant change in the number of obligated parties and the movement of RINs." (74 FR
24963.) (2329.1, p.86)
Document No.: EPA-HQ-OAR-2005-0161-2017
Organization: Aloha Petroleum, Ltd.
Comment:
The commenter (2017.1) believes that the current definition of Obligated Party and the definition
included in the proposed RFS2 regulations under §80.1406 are adequate and should not be
changed. The current approach, where importers and refiners are Obligated Parties, is the most
effective way to enforce the requirements of the RFS. (2017.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2110
Organization: Chevron
Comment:
The commenter (2110.1) believes that EPA should not change the current obligated parties or
shift the point of regulation downstream in the supply chain. The commenter believes this
threatens the ability of the program to reach mandated goals and will result EPA having to delay
the program even further or risk having to take remedial action midstream, a very disruptive
prospect at a time when the program faces several serious challenges as it is. The proposal
appears to create more problems than it solves. (2110.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2155
Organization: Petroleum Marketers and Convenience Stores of Iowa (PMCI)
Comment:
The commenter (2155.1) noted that the concept of moving a federal obligation from major oil
companies to small businesses is not practical nor will it generate the outcome as described in
this preamble. Furthermore, the EISA does not imply nor does it suggest that any party other
than fuel reformulators, importers, and refiners are obligated under the law. The commenter
believes that the suggestion to move the RFS obligation to the renewable fuel blender is
premature and will only increase energy costs to the end consumer further. (2155.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2217
Organization: Petro-Diamond Incorporated
Comment:
The commenter (2217) opposes modifying the current definition of "obligated party" as
primarily refiners and importers to include "blenders". (2217, p.l) (See Docket Number 2217.1,
p.l for more discussion on this issue)
Document No.: EPA-HQ-OAR-2005-0161-2314
Organization: The New England Fuel Institute
Comment:
The commenter (2134.1) opposes any changes in the RFS program that would extend obligated
party status to downstream blenders. The commenter believes it is premature to assess the status
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of the RINs market until the agency deploys its Moderated Tracking System MTS for RINs
transactions. The MTS will produce a much more accurate snapshot of the RINs market because
it creates a central transaction point for all RINs separations, including buy, sell, and retire
transactions. MTS will also have the capability to track detailed transaction history on a
company by company basis and identify invalid or incomplete RIN report filings. (2134.1, pp.2-
3)
The commenter believes that EPA must consider alternative regulatory approaches to minimize
the significant economic impact that redefining obligated parties would have on small businesses
petroleum marketers and fuel dealers. Alternatives should include renewable fuel blending
thresholds for transportation fuels below which obligated party status is not imposed. If done
properly, the thresholds would protect small business petroleum marketers and fuel dealers from
the crushing compliance burdens that shifting obligated party status would inflict while at the
same time helping to achieve the ambitious RVO schedule under EISA. EPA must also conduct
a new, thorough and comprehensive regulatory flexibility analysis on the costs and associated
compliance burdens such a change would impose on small business petroleum marketers and
fuel dealers. 2134.1,p.3)
Document No.: EPA-HQ-OAR-2005-0161-2328
Organization: Petroleum Marketers Association of America (PMAA)
Comment:
The commenter (2328.1) opposes any changes in the RFS program that would extend obligated
party status to downstream blender. The commenter noted that if EPA should continue to weigh
such options, it must consider alternative regulatory approaches to minimize the significant
economic impact that redefining obligated parties would have on small business petroleum
marketers. Alternatives should include renewable fuel blending thresholds for transportation
fuels below which obligated party status is not imposed. If done properly, the thresholds would
protect small business petroleum marketers from the crushing compliance burdens that shifting
obligated party status would inflict while helping to achieve ambitious RVOs under EISA.
(2328.1, p.2)
If EPA was to consider redefining obligated parties, the commenter would expect the agency to
conduct a new and comprehensive regulatory flexibility analysis pursuant to Title 5 U.S.C. Sec.
601-612 on the costs and associated compliance burdens such a change would impose on small
business petroleum marketers. (2105.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2358
Organization: Society of Independent Gasoline Marketers of America (SIGMA) and the
National Association of Convenience Stores (NACS)
Comment:
The commenter (2358) believes the proposal to alter the designation of obligated parties by
assigning RVOs based solely on the volume of finished gasoline produced or imported is badly
misguided and also believes EPA's scenario where large refiners hoard RINs is unlikely. In
addition, EPA's proposal to more closely align a party's obligation to acquire RIN with a party's
access to RINs relies on false assumptions. The commenter believes that the method for
assigning RVOs should remain unchanged and RBOB and CBOB should remain on the list of
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fuels subject to the standard. [[Docket number 2358.1, pp. 5-8]] [[See docket number 2358.1, pp.
5-8 for a detailed discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2374
Organization: Amyris Biotechnologies, Inc. (Amyris)
Comment:
The commenter (2374) notes that in RFS, the renewable volume obligation applied to refiners,
blenders, and importers of motor vehicle or non-road gasoline or diesel. The commenter
believes this system should be extended to RFS 2 to promote blending of renewable fuels with
traditional petroleum fuels. [[Docket number 2374.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP)
Comment:
The commenter (2384) believes that changing the obligated parties under RFS2 to include
blenders of RBOB and CBOB provides minimal benefits while requiring a higher cost of
administration for both market participants and for EPA. The RFS1 approach to obligated
parties was well designed; there is no need to change it. [[Docket number 2384.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2400
Organization: Murphy Oil USA, Inc.
Comment:
The commenter (2400.1) opposes the potential shift of obligated party "downstream" to the
terminal operator. The commenter hopes that EPA will consider the financial implications and
investments used to meet the current compliance measures as an obligated part and the resulting
impact of more than doubling the number of obligated parties in the marketplace by moving the
responsibility "downstream." (2400.1, p.l)
The commenter recommends that EPA keep the obligated party at the current refiner level. The
reporting requirements and time taken to ensure RVO is met would become even more difficult
should EPA change the obligated party. Shifting the obligation further downstream would likely
cause confusion in reporting and inject a high degree of instability in the RIN marketplace. If the
obligated party were change, EPA may have to delay the program in order to address myriad of
unforeseen variables, complexities in monitoring and enforcement, and training of scores of new
obligated parties. (2400.2, pp.3-4)
Document No.: EPA-HQ-OAR-2005-0161-2464
Organization: Musket Corporation
Comment:
The commenter (2464.1) requests that EPA continue to define obligated parties in RFS2 as the
refiners and importers of petroleum-based fuels. (2464.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2322
Organization: Illinois Petroleum Marketers Association
Comment:
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The commenter [[2322]] number of consequences will flow from designating downstream
blenders as "obligated parties." First, if blenders have no control over the volume of blended
gasoline they can acquire in any given year, how can they be sanctioned for failing to meet a
goal? We recommend that downstream blenders who are not producers, refiners or exporters
should not be designated obligated parties. [[#2322.1 p.2]]
Our Response:
We agree in general that the existing designation of obligated parties has been effective
and should be retained under RFS2.
3.9.2 Blenders or Other Downstream Parties Become Obligated Parties
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2118
Organization: CountryMark Cooperative, LLP
Comment:
The commenter (2118.1) believes that the Renewable Volume Obligation calculation should be
adjusted so products that rely on ethanol blending to make a final product not be included in the
calculation for those volumes that said blending is not under control of the obligated party. For
product sold as 84 CBOB, the ethanol blending obligation should be shifted to the downstream
blender of the final product. (2118.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
Regarding EPA's request for comment on a possible change in the definition of the parties
subject to the renewable volume obligation, the commenter (2130) believes that the parties
obligated under the RFS should be those parties that have control of the decision regarding
whether to blend or not to blend biofuels to make a finished fuel blend for retail or wholesale
purchaser consumer sales. The commenter believes that in the absence of this change, it will
become increasingly difficult for refiners and importers to secure the requisite number of RINs to
demonstrate compliance, particularly if their refinery production levels of gasoline or diesel
exceed their downstream marketing volumes. [[Docket number 2130.1, pp.1-2]]
Document No.: EPA-HQ-OAR-2005-0161-2472
Organization: Valero Energy Corporation (Valero)
Comment:
The commenter (2472) supports changing the designation of obligated parties to the party that
has title of the gasoline and diesel at the truck rack before it is loaded into trucks for delivery to
retail outlets and wholesale purchaser-consumer facilities as the EPA proposed in the RFS2
preamble. [[Docket number 2072, p. 2]] [[See docket number 2072, pp 2-4 for discussion of the
impact of this change.]]
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Document No.: EPA-HQ-OAR-2005-0161-1002
Organization: Fuel Marketing Corporation
Comment:
The commenter (1002) supports eliminating RBOB and CBOB from the list of fuels that are
subjected to the standard, as such making blenders of these fuels obligated parties. (1002/1002.1,
p.D
Document No.: EPA-HQ-OAR-2005-0161-1033
Organization: Poet Ethanol Products
Comment:
The commenter (1033.1) endorses altering the definition of an Obligated Party/Renewable
Volume Obligations to say that the RVO is placed upon the party blending the finished gasoline
or diesel fuel. This modification would correct a fundamental weakness in the alignment of
incentives for how RVOs were calculated under RFS1. (1033.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) approves the second alternative which is to move the obligations for all
gasoline and diesel downstream to parties who supply finished transportation fuels. The
commenter noted that there are numerous problems with the current RFS1 regulations that will
be magnified under the RFS2 regulations if the obligated party remains the refiner/importer. The
current form of the regulation does not: maximize benefits and minimize costs, treat all regulated
parties equally, or minimize costs to the consumer. The commenter noted that the current
definition of obligated party has the following issues:
1. Creates an uneven playing field among refiners/importers
2. Creates an uneven playing field between refiners and renewable fuel blenders
3. Does not address issue of state clear gasoline regulations
4. Does not address the issue of RIN-less renewable fuel. (2124.1, p. 16)
The commenter stated that EPA's primary reason for making refiners and importers the obligated
party instead of renewable fuel blenders or those parties that hold title to the fuel at the truck rack
was to minimize the number of parties impacted by the regulations. With ethanol now
approaching 100% penetration in the gasoline pool (at least at 10% or lower blends), all of these
parties will be reporting under the current RFS1 regulations. The commenter believes that
changing the definition of obligated party to providers of finished transportation fuels will not
significantly increase the number of parties reporting to the EPA. (2124.1, p. 17)
Document No.: EPA-HQ-OAR-2005-0161-2145
Organization: Flint Hills Resources
Comment:
The commenter (2145.1) supports moving the Renewable Volume Obligation (RVO) to the
producer of the finished fuel. The commenter recommends that a party's RVO be based on the
volumes of non-renewable finished gasoline or diesel that it produces or imports. (2145.1, p.2)
[[See Docket Number 2145.1, p.2 for a detailed discussion on this issue.]]
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Document No.: EPA-HQ-OAR-2005-0161-2154
Organization: ConocoPhillips
Comment:
The commenter (2154.1) believes that a change in the obligated party designation is imperative
to the workability of the RFS2 program and parity amongst market participants. The commenter
support shifting the obligation to the provider of finished transportation fuels. (2154.1, p.2)
[[See Docket Number 2154.1 pp.2-4 for a detailed discussion on this issue]]
Document No.: EPA-HQ-OAR-2005-0161-2345
Organization: Independent Fuel Terminal Operators Association (IFTOA)
Comment:
Referring to EPA's proposed alternates to the current designation, including a suggested
alternate that EPA change the designation to the entity that owns the renewable fuel and the
petroleum product immediately prior to blending above the rack, while not endorsing the
suggestion, the commenter (2345) stresses that if the Agency makes such a change in the
designation, it should only apply to lenders operating above the rack. These blenders tend to be
larger companies that greater ability to ensure compliance. [[Docket number 2345.1, pp. 1-2]]
Document No.: EPA-HQ-OAR-2005-0161-2471
Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter (2471.1) believes that EPA can dramatically ease the flow of RINs and reduce
the costs associated with compliance by re-defining "Obligated Parties" as solely renewable fuel
blenders, thus moving the point of compliance downstream to the terminal rack or other point
where renewable and petroleum-based fuels are blended to produce a retail-grade product.
(2471.1, p.4) (See Docket Number 2471.1, pp.4-5 for a detailed discussion on this issue)
Document No.: EPA-HQ-OAR-2005-0161-2472
Organization: Valero Energy Corporation (Valero)
Comment:
The commenter (2472) does not support any of EPA's alternative approaches related to the
designation of obligated parties. Rather, the commenter supports a hybrid of the two alternative
approaches proposed by EPA. The commenter says that the RFS2 obligated party should be the
ethanol blender for RBOB and CBOB, and the party that holds title to finished conventional,
RFC and diesel at the truck rack before it is loaded into trucks for supply to retail outlets or
wholesale purchaser-consumer facilities. [[Docket number 2472.1, p. 3]] [[See docket number
2472.1, pp. 3-5 for extensive discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) believes that EPA should move the obligation downstream to blenders
who have control over the amount and type of biofuel blended. Shifting the burden downstream
is appropriate in light of the complicated four mandate structure of EISA, since it is only the
downstream blender that has the ability to decide which biofuels to blend. Shifting the
obligation downstream also addresses the issue of state ethanol blending laws, which have the
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potential to interfere with the ability of obligated parties to comply. The commenter
recommends that the obligated party be the party that has title to gasoline or diesel fuel at the
time that it enters the truck at a terminal rack (the typical point of taxation). To the extent that a
party downstream of that point adds ethanol or biodiesel to the gasoline or diesel, the obligation
for that volume of gasoline or diesel fuel should transfer to the party that blended the ethanol or
biodiesel and be subtracted from the obligation of the party that held title to the gasoline or diesel
fuel as it enters the truck at a terminal rack. (2505.2, pp.4-5)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
Referring to the three alternatives for obligated parties, the commenter believes that all the
alternatives have serious problems, such as requiring obligated parties to blend more than the
marketplace can absorb, which are likely to eventually cause the obligated parties to be unable to
comply or for EPA to be unable to effectively enforce the RFS2. The commenter does indicate
that the "Finished transportation fuel supplier" option is the best of the three. In addition, the
commenter states that obligated parties cannot be held responsible for activities outside of their
control, and urges EPA to create reasonable boundaries each year to ensure the market acts
rationally. [[Docket number 2233.2, pp. 2-3]] [[See docket number 2233.2, pp. 2-6 for a detailed
discussion of each EPA-proposed alternative.]]
Our Response:
We do not believe that the concerns expressed about the existing designation of obligated
parties, or the perceived benefits of alternative schemes, warrant a change for the RFS2 program
at this time. We continue to believe that the market will provide opportunities for parties who
are in need of RINs to acquire them from parties who have excess. This has been the case in
RFS1, and we believe that it will continue to be true under RFS2. Moreover, a change in the
designation of obligated parties would result in a significant change in the number of obligated
parties and the movement of RINs. Such changes could disrupt the operation of the RFS
program during the transition from RFS1 to RFS2 and be administratively burdensome in the
long term for the many blenders who are small businesses. Further discussion of this issue can
be found in Section II.G.I of the preamble.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2322
Organization: Illinois Petroleum Marketers Association
Comment:
The commenter [[2322]] states that IPMA members have traditionally purchased ethanol at the
best price from an independent ethanol producer. They receive Renewable Identification
Numbers (RINs) as a result of this process. Many oil companies now no longer sell pure,
unblended gasoline at the terminal rack and will only sell pre-blended gasoline. This removes
independent marketers' ability to purchase gasoline and ethanol separately. The new RIN rules
eliminate this competition by removing the financial incentive to blend and discouraging
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blending below the terminal rack will have an impact on the wholesale and retail price of
gasoline that could also create opportunities to manipulate the market. [[#2322.1 p.1-2]]
Our Response:
The RFS program is intended only to ensure that certain mandated volumes of renewable
fuel are used in transportation fuel, heating oil, or jet fuel in the U.S. each year. The program
leaves to the market the choice of which party blends renewable fuels into gasoline and diesel.
However, since we have determined that RINs should continue to be transferred with volumes of
renewable fuel through the distribution system until renewable fuel is purchased by an obligated
party or blended into conventional fuels, consistent with the RFS1 program, there remains an
incentive for blenders to purchase ethanol and gasoline separately and blend them to produce
transportation fuel.
3.9.3 Expired RINs Used to Reduce Nationwide Obligation for the Following Year
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter believes that EPA should reject its proposed alternative to reduce the overall
volume based on excess RINs. The mandated volumes are a minimum, and EPA should not take
actions that may otherwise reduce the volumes in any year. Moreover, while EPA claims this
approach would prevent "hoarding" from driving up demand for renewable fuel, it, in fact, may
provide incentives for obligated parties to hoard RINs. (2329.1, p.90)
Our Response:
We agree with this comment. While the use of expired RINs to reduce the next year's
volume could help ensure that the obligation applied to each refiner and importer of gasoline and
diesel is more closely aligned with their access to RINs, we recognize that this alternative
approach would reduce the volumes mandated by EISA. We do not believe this would be
appropriate, and therefore are not finalizing this approach.
3.9.4 Other
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
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While the commenter (2249) believes that EPA does not intend for biodiesel producers to
become obligated parties with RVOs, the commenter requests clarification on the application of
the definition of producers and importers of diesel fuel. [[Docket number 2249.2, p. 29]]
Our Response:
As provided in §80.1407(d) and (f), diesel fuel that is subject to the standards and incurs
an RVO must be non-renewable. Thus, producers that produce only biodiesel and do not export
would not have an RVO.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2370
Organization: NGVAmerica
Comment:
The commenter (2370.1) supports the decision to not include natural gas and other alternative
fuel providers as regulated entities. While it is laudable to encourage alternative fuels to include
a renewable component, there is no indication that Congress intended such a requirement to be
mandatory for alternative fuels such as natural gas, propane or electricity. (2370.1, p.8)
Our Response:
While we have excluded natural gas, propane and electricity from the list of obligated
fuels subject to the standards, we are allowing producers of such fuels to generate RINs if they
can demonstrate that their fuels are made from renewable biomass and are actually used as
transportation fuel in the U.S. If in the future these fuels become a more significant portion of
the transportation fuel pool, we may consider making them subject to the standards.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) states that none of the three alternatives proposed by EPA eliminates the
future compliance difficulties of obligated parties or the future enforcement issues that will face
EPA with the RFS2 four-tier renewable fuels mandates. Nor will any of them solve the problem
that the commenter believes is the fundamental driver causing this discussion to intensify at this
time, i.e., the approaching E10 blend wall and, consequently, a potential RIN shortage that will
send obligated parties scrambling to try to find a way to comply with the RFS. [[Docket number
2393.1, p. 4]]
Regardless of where the obligation lies, the commenter believes that EPA must ensure that all
annual biofuels mandates are in fact achievable. EPA needs to err on the side of being certain
that the next year's production of the mandated biofuels will occur. [[Docket number 2393.1, p.
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5]] [[Also see Docket number 2393.1, pp. 4-7 for further discussion of the alternatives for
obligated parties.]]
Our Response:
In the annual rulemaking that we intend to promulgate to set the standards for the
following year, we will be evaluating both production and import potential under the provisions
of CAA 211 (o) (7) (D) as well as issues related to consumption potential, such as storage,
distribution, and dispensing capacity. In this context we will be evaluating the E85 market and
the potential for FFVs to consume it. The annual standard for cellulosic biofuel will be based
directly on the projected volume of cellulosic biofuel production in the following year. EPA will
use similar information in considering whether waivers are appropriate for the other renewable
fuel standards.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1041
Organization: DSI Fabrication, Inc.
Comment:
The commenter's (1041) specifically relates to whether county, state, or local governments that
produce their own biodiesel from waste vegetable oil (WVO) or yellow grease and use it in their
fleet vehicles are subject to this proposed rulemaking. The commenter is aware of several
county governments that produce high quality biodiesel (B100) from WVO for use in their own
fleet vehicles. The counties do not distribute or sell the biodiesel but use a blend of B20 in their
fleet vehicles. The commenter questions if this means they are not subject to the requirements of
this proposed rulemaking. (1041, p.l)
The commenter believes that the benefits of counties, states, or local governments producing
biodiesel from WVO and using it in-their fleet vehicles should be supported, encouraged and
promoted. In addition, biodiesel produced from WVO has a GHG performance of 80%
reduction from the conventional diesel baseline. Therefore, it would not be appropriate to reduce
the threshold to 40% to allow biodiesel producers to average their emissions to meet the one
billion gallon volumetric requirements by 2012 unless every effort is made to encourage and
promote the production of biodiesel from WVO. (1041, p.l)
The commenter's other comment relates to whether a county, state, or local government that
produces ASTM quality biodiesel from WVO which is used strictly in their fleet vehicles (not
distributed or sold) would be eligible to participate in any future carbon trading efforts to reduce
GHG. (1041, p.2)
Our Response:
The RFS program does not distinguish between renewable fuels used by the party that
produced them, or sold for use by another party. Renewable fuels that are valid under RFS are
those that are used to replace or reduce the quantity of fossil fuel present in a transportation fuel,
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heating oil, or jet fuel. Any party producing renewable fuel that meets these requirements is a
regulated party.
The RFS program does not currently provide a means for generating carbon credits for
trading. Any provision for carbon credits generated for renewable fuels must await a future
regulatory action allow it.
3.10 Separation of RINs
Note: Comments addressing the alternative approach to RIN transfers presented in the NPRM in
which producers would have been allowed to separate RINs from batches (Section III.H.4 of
NPRM) are addressed in Section 3.11
3.10.1 Nonroad Diesel Fuel, Heating Oil, and Jet Fuel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2369
Organization: New Generation Biofuels (NGBF)
Comment:
The commenter (2369) questions the logic of retiring RINs if a renewable fuel is used in a
commercial or industrial boiler or ocean-going vessel. If a renewable fuel is sold on the market
and blended in all fuel oil #2 and sold on the retail level it is not clear why a RIN would be
retired as the renewable fuel in principle reduces greenhouse gas emissions and is better for the
environment. If RINs are separated from the fuel and the distributor blends biofuel in most of
the gallons of fuel sold, the commenter believes that determining a customer's use of the fuel
places an unnecessary burden on the biofuel providers and distributors. [[Docket number
23369.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2549
Organization: Triton Energy LLC
Comment:
The commenter (2549.1) question the logic of retiring RINs if a renewable fuel is used in a
commercial or industrial boiler or oceangoing vessel. If RINs are separated from the fuel and the
distributor blends biofuel in most of the gallons of fuel sold, determining a customer's use of the
fuel places an unnecessary burden on the biofuel providers and distributors. (2549.1, pp.6-7)
Our Response:
EISA's definition of "additional renewable fuel" includes renewable fuel that is used to
replace or reduce the quantity of fossil fuel present in home heating oil and jet fuel, and in the
NPRM we proposed that RINs could be generated and used for compliance purposes for all such
renewable fuels. However, in the NPRM we distinguished between heating oil used for
residential heating from that used for commercial or industrial heating purposes. Based on
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further evaluation of industry practices and comments from stakeholders, we have determined
that such a distinction is not appropriate. First, the term home heating oil is used interchangeably
in the marketplace with heating oil to refer to the type of fuel used in home, commercial, and
industrial applications, not to refer to its place of use. Second, by using the broader industry
interpretation of the term "home heating oil" to refer to all heating oil that could be used in
homes, whether or not it ultimately does, the RFS2 program will be greatly simplified for both
regulated parties and EPA enforcement personnel, and appropriate credit will be provided for the
use of renewable fuels that displace fossil fuels. This is in keeping both with the GHG reduction
and energy security goals of EISA. Therefore, for the final rule we are eliminating the
requirement that RINs be retired for renewable fuel present in heating oil that is used in a
commercial or industrial boiler, and are allowing RINs to be generated and used for RFS2
compliance purposes for all renewable fuels designated as or used in heating oil. The term
"heating oil" is defined for RFS2 purposes consistent with existing EPA regulations at 40 CFR
80.2(ccc). See additional responses to comments on the subject of heating oil in Section 3.2.6.
EISA explicitly excludes renewable fuels used in ocean-going vessels from the definition
of transportation fuel, and makes no other allowances for including such fuels in the RFS2
program. Therefore, we are requiring RINs assigned to renewable fuel that is used in an ocean-
going vessel to be retired.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2549
Organization: Triton Energy LLC
Comment:
The commenter believes that a similar system in the fuels market whereby the RINs are
separated from the fuel sold in the market managed by the EPA through an EPA Moderated
Transaction System appears to be logical especially if the participants are limited to those who
generate and sell RINs and those who need to purchase RINs. (2549.1., p.7)
Our Response:
The EPA Moderated Transaction System (EMTS) will streamline much of the RIN
transfers and RIN separations that are currently recorded separately in each party's IT system,
and will significantly reduce many of the errors in RINs. However, we do not believe that the
benefits of EMTS warrant a change in which parties can own RINs or separate RINs from
volumes of renewable fuel. In the RFS1 program we designed the regulatory program such that
RINs must be assigned to renewable fuel by the producer or importer, and must be transferred
with the renewable fuel until it is owned by an obligated party or is blended into gasoline or
diesel. This approach was designed to ensure that RINs make their way to the parties that need
them for compliance. While we did take comment on alternative approaches to RIN transfers,
we have determined that these alternatives should not be implemented as discussed more fully in
Section 3.11.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2155
Organization: Petroleum Marketers and Convenience Stores of Iowa (PMCI)
Comment:
Written guidance on how to handle 2009 biodiesel RINs, previously retired due to nonroad
applications, is needed so that those RINs may be pulled out of retirement and made valid for
meeting RVOs. (2155.1, p. 1)
Our Response:
In the NPRM we proposed that certain RINs retired under the RFS1 regulations at
§80.1129 (e), including those retired because of ultimate use in a nonroad application, could be
reinstated for use in complying with the 2010 RFS2 standards. We have finalized this provision
at §80.1429(g). Reinstatement can be made through EMTS.
3.10.2 Exporters
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter believes that the current treatment of exports and imports of renewable fuels is
appropriate. (2329.1, p.87)
Document No.: EPA-HQ-OAR-2005-0161-2471
Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter noted that RFS1 expressly allows RF producers, importers and marketers to
transfer up to 2.5 assigned RINs per gallon, and likewise authorizes RF blenders to separate up to
2.5 RINs per gallon blended. The regulations, however, do not specifically authorize RF
exporters to separate up to 2.5 RINs per gallon exported (although we have been advised by EPA
that it has informally adopted this position). The commenter requests that EPA formally adopt
this change as part of RFS2. (2471.1, p. 17)
Our Response:
The regulations at §80.1429 (b) have been modified to allow exporters to separate up to
2.5 RINs for each gallon of renewable fuel exported, consistent with the treatment of blenders.
3.10.3 Neat Renewable Fuels
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) noted that if the Producer RIN separation proposal does not become
law, then the commenter agrees that sections 80.1429(b)(2) and 80.1429(b)(5) be eliminated and
section 80.1429(b) (4) be expanded to allow RINs to be separated from neat fuel or blends under
the restrictions cited by the EPA.
Our Response:
We have retained the proposed provisions for neat renewable fuel or blends designated as
transportation fuel, heating oil, or jet fuel in the final rule. These provisions are designed to
ensure that RINs can be separated from any renewable fuel, whether in neat or blended form
when the fuel is designated and used as transportation fuel, heating oil or jet fuel without further
blending. However, we do not believe that the RIN separation provisions applicable to blenders
should be eliminated since the blender is not required to ensure that the blend is used as a
transportation fuel, heating oil, or jet fuel in its blended form without further blending.
Moreover, we do not believe that the RIN separation restrictions on biodiesel, which require that
biodiesel be blended at 80 percent biodiesel or less to activate RIN separation, in instances where
the fuel is not designated for use as transportation fuel, heating oil or jet fuel without further
blending, should be eliminated since biodiesel producers often add small amounts of fossil-based
diesel to their biodiesel for tax credit purposes, but do not designate the resulting blend as a
transportation fuel, heating oil, or jet fuel. As described in Section 3.4.10 below, RINs can be
separated from biodiesel blends with greater than 80 percent biodiesel if such blends are
designated and used as transportation fuel, heating oil, or jet fuel at that blend level.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
Regarding "Neat Renewable Fuels and Blends-Transportation and Home Heating Oil and Jet
Fuel" the commenter (1044) believes that requiring a blending event is misguided. The
commenter states that biomass-based diesel must conform to recognized ASTM standards that
allow the fuels to be used in any fashion similar to diesel. The commenter further states that the
notion that biomass-based diesels must be blended with baseline or non-baseline diesel is
nonsense. The commenter believes that a review of this action, and the subsequent removal of
this item, would relinquish the requirement and burden of support documentation for blenders
and support statements of use as discussed in this proposed rule and streamline the ability of
producers to generate, separate and distribute RINs more effectively. (1044.1, p. 2)
Our Response:
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The provisions at §80.1429 regarding separation of RINs do not require blending of
renewable fuel with conventional gasoline or diesel prior to the separation of RINs. However,
due to concerns that producers could exercise market power by separating and retaining RINs
from renewable fuels that they produce, we have included a requirement that RINs can only be
separated from neat renewable fuels if a party designates the neat renewable fuel as
transportation fuel, heating oil, or jet fuel and demonstrates that it is used as such in its neat
form.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2081
Organization: Novogy, Inc.
Comment:
The commenter (2081) seeks to confirm their interpretation of the proposed approach to RIN
separation for a fungible renewable fuel such as methane molecules derived from cellulosic
biomass that are produced and sold as biogas in "neat" form under RFS2. Specifically, the
commenter would like to confirm that the regulation allows producers who can produce and sell
cellulosic biogas for an intended transportation fuel use under RFS2 (and potentially as a fossil
gas replacement in a home heating application) to be eligible to separate the RINs generated for
that batch of fuel at the time the fuel is sold for its designated purpose. Successful
documentation would include verification that the amount of cellulosic biogas produced and sold
was used either: (a) as produced for a designated on-site transportation user; (b) injected into a
pipeline network serving multiple end users drawing on this supply for transportation; or, (c)
directly by industrial entities connected into that same pipeline network, where their direct usage
of cellulosic biogas would effectively displace quantities of fossil derived natural gas from that
network. Designated use would be verified in an off-setting sales contract. Producers generating
and separating RINs would track the credits on the EPA monitored trading system. Annual attest
requirements will use Btu equivalence measures from RFS2 tied to cu ft of biogas sold on
required PTD documents to ensure producers are not able to separate more RINs than correspond
to the volume of fuels they produce. Mirroring proposed compliance mechanisms would allow
cellulosic biogas producers flexibility to scale new distribution by selling directly to
transportation users, into pipelines or to large industrial natural gas users drawing off natural gas
pipeline networks that serve transportation (and potentially home heating) users. The commenter
requests confirmation that a producer of cellulosic biogas can separate an appropriate RIN at the
time the cellulosic biogas product is sold in "neat" form for an approved use as designated use
under RFS2. [[Docket number 2081.1, p. 7]] [[See docket number 2081.1, pp. 7-11 for detailed
discussion of this issue.]]
Our Response:
Our final regulations allow biogas producers to generate RINs and separate them if they
designate it as transportation fuel, and demonstrate its use as transportation fuel. The regulations
specify conditions and procedures applicable to producers introducing biogas into a fungible
natural gas pipeline to ensure that a similar quantity of fungible fuel is ultimately used for
transportation purposes. See also the discussion of biogas in Section 3.2. Biogas used as
transportation fuel could only be considered cellulosic biofuel if it is made from cellulosic
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renewable biomass, and could only be assigned cellulosic biofuel RINs if a D code is approved
by EPA in §80.1426(f) or pursuant to §80.1416.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter agrees with and supports allowing RINs associated with neat renewable fuels to
be separated and traded as EPA has proposed as long as such renewable fuels are not further
blended. [[Docket number 2393.1, p. 11]]
Our Response:
We agree that parties designating neat renewable fuels as transportation fuel, heating oil,
or jet fuel for use without further blending can separate the RINs.
3.10.4 Biodiesel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
If the Producer RIN separation proposal does not become law, then the commenter agrees with
the EPA proposal to allow RIN separation for blends above B80 when the fuel is specified for
transportation fuel, heating oil or jet fuel and no further blending is allowed.
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter supports allowing RINs associated with neat renewable fuels to be separated and
traded and supports altering the definition of a neat renewable fuel to allow biodiesel blenders
creating a blend of B80 or higher to separate RINs. [[Docket number 2233.2, p. 9]]
Our Response:
In order to account for situations in which biodiesel blends of 81 percent or greater may
be used as transportation fuel, heating oil, or jet fuel without ever having been owned by an
obligated party, EPA proposed, and is finalizing a change to the applicability of the RIN
separation provisions for RFS2. Regulation Section 80.1429(b) (4) will allow for separation of
RINs for neat renewable fuel or blends of renewable fuel and diesel fuel that the party designates
as transportation fuel, heating oil, or jet fuel, provided the neat renewable fuel or blend is used in
the designated form, without further blending, as transportation fuel, heating oil, or jet fuel.
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Those parties that blend renewable fuel with gasoline or diesel fuel (in a blend containing 80
percent or less biodiesel) must separate RINs pursuant to §80.1429(b) (2).
3.10.5 Other
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2400
Organization: Murphy Oil USA, Inc.
Comment:
The commenter (2400.2) recommends that RINs associated with any renewable fuel blended into
any distillate be allowed to be separated and then used for compliance purposes. Using RINs for
compliance that were blended into any distillate outside of MVNRLM will not change an
obligated parties RVO, and still allows for the use of renewable fuel into the distillate supply.
(2400.2, p.5)
Our Response:
EISA defines renewable fuels that are valid under RFS2 as those that are used to replace
or reduce fossil fuel present in transportation fuel, heating oil, or jet fuel. Under most
circumstances this means that renewable fuels that can be blended into fossil-based distillate will
be valid for RFS compliance purposes. However, the resulting blend must be used as
transportation fuel, heating oil, or jet fuel. For instance, renewable fuel blended with distillate
for use in ocean-going vessels would not be valid under RFS 2, since EISA explicitly excludes
such fuels.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter believes that EPA should revise the rules to limit the ability to separate RINs to
obligated parties. Since the time that EPA promulgated the RFS1 rules several states have
passed laws that could interfere with the ability of obligated parties to comply with the RFS
rules. EPA could facilitate compliance with the RFS by re-aligning the obligated parties and
limiting the ability to separate RINs to such parties. (2505.2, p.9)
Our Response:
While obligated parties can separate RINs for any renewable fuel batches that they own,
not all renewable fuel is owned by an obligated party prior to being used as transportation fuel,
heating oil, or jet fuel. Therefore, we must provide opportunities for other parties to separate
RINs from renewable fuel. In most cases, RIN separation by a non-obligated party will occur
because the renewable fuel has been blended with gasoline or diesel to produce transportation
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fuel, heating oil, or jet fuel. Exporters can also separate RINs for volumes of renewable fuel that
they export, but such exporters will also incur an RVO to which those RINs can be applied.
Other parties can also separate RINs without blending if they designate the renewable fuel as
transportation fuel, heating oil, or jet fuel in its neat form, and they demonstrate that the neat
renewable fuel is actually used in its designated form.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) requests that RIN Marketers be permitted to own RINs and to function
under the RFS2 program. (0994.1, p. 13)
Our Response:
Any party that registers under the RFS2 program can own RINs. A marketer that
assumes ownership of renewable fuel with assigned RINs cannot separate those RINs unless they
blend the renewable fuel into gasoline or diesel for use as transportation fuel, heating oil, or jet
fuel. However, once separated, RINs can be owned by any party.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2155
Organization: Petroleum Marketers and Convenience Stores of Iowa (PMCI)
Comment:
The commenter (2155.1) also believes that the original intent of the RFS must be upheld and that
those desiring to take title to the RINs on neat product, being purchased downstream, must be
allowed to do so without interference or pressures from other EPA-registered parties. (2155.1,
p.3)
Our Response:
A party who takes ownership of neat renewable fuel can also take ownership of any RINs
assigned to that neat renewable fuel if it is registered with EPA under the RFS2 program. If an
upstream party has already separated the RINs from the neat renewable fuel by designating it as
transportation fuel, heating oil, or jet fuel in its neat form, then no RINs will be assigned to it
when a downstream party takes ownership of it.
3.11 Alternative Approaches to RIN Transfers
3.11.1 Opposes Allowing Producers and Importers to Separate RINs
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2155
Organization: Petroleum Marketers and Convenience Stores of Iowa (PMCI)
Comment:
The commenter (2155.1) noted that EPA proposes alternate methods for the separating and
selling of RINs. One such proposal would lead renewable fuel producers down the path of pre-
designating their product as transportation fuel, home heating oil, or jet fuel, yielding a
marketable RIN. The subsequently separated RINs could then be sold to obligated parties by the
Producer or Importer. The commenter believes that not only would this remove any potential
incentive for the actual (true) blender on record to continue purchasing renewable fuels but it is
also wrought with tracking and end-use verification issues. If such language were to be adopted,
renewable fuel blenders would be left with a strict compliance burden with zero financial
incentive to absorb the costs of compliance. The commenter also wanted to point out to EPA
that if adopted, this provision would be subject to the Regulatory Flexibility Act and as amended
by the Business Regulatory Enforcement Fairness Act of 1996. (2155.1, P.2)
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP)
Comment:
The commenter (2384) states that since the inception of RFS2, obligated parties and blenders
have made investments and divestments contemplating RIN separation fuels consistent with
RFS1. A policy shift 4 years later would likely reward those companies who chose not to invest
and penalize those who have made investments in biofuel blending based on RIN separation. In
addition linking RIN separation with blending, more directly aligns the economic incentive with
the business decision to blend more biofuels. [[docket number 2384.1, p. 5]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393.1) believes EPA has not provided justification for allowing producers to
separate RINs and does not support allowing renewable fuel producers and importers to separate
RINs. The concerns for market manipulation are equally, if not more valid in the RFS2 program.
Also, the approach does not correct the inefficient markets that result from obligated parties
being only at the refinery gate. If however, EPA decides to allow producers to separate RINs the
commenter believes that significant safeguards are needed. These safeguards must include, at a
minimum: obligated party only trading, establishment of the EMTS, controls to prevent RIN
hoarding by producers and RFS 1-type trading limits on the number of RINs bought and sold.
[[Docket number 2393.1]]
Document No.: EPA-HQ-OAR-2005-0161-2400
Organization: Murphy Oil USA, Inc.
Comment:
The commenter also believes that renewable producers should not have the ability to separate
RINs and pass them along as they feel necessary. The commenter recommends that the EPA
only allows a producer to separate RINs if they are selling to an obligated party to allow for
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fewer bulk transfers. RINs should continue to be passed as stated in RFS1 if the buyer is not an
obligated party. (2400.2, p.6)
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) believes that allowing the renewable fuel producers to separate the
RINs could result in hoarding of RINs by the producers and take away the economic incentive
for the blender (who could either use or sell the RIN) to blend the renewable fuel. (2505.2, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2537
Organization: Musket Corporation
Comment:
The commenter (2537) opposes a change in the process of separating a RIN from the fuel. To
the extent that EPA continues to be conceded about RIN transfers, a reduction of the rollover cap
would suffice. The commenter notes that in one of EPA's alternate proposals a renewable fuel
producer would be allowed to separate RINs from the fuel. In another proposal renewable fuel
producers would only be allowed to transfer RINs to obligated parties. Both of the proposals
ignore the incentives that were created for non-obligated parties to participate in and improve the
economic efficiency of the RFS. This vibrant sector has the capability of "filling in the gaps" in
regions where obligated parties are unwilling or unable to invest in the infrastructure required to
bring renewable fuels into the motor fuel supply chain. Changing the RIN transfer system as
EPA proposes would create the high likelihood of failing to meet the volume goals in EISA,
since the opportunity to detach and resell the RIN is in many cases the only incentive for non-
obligated parties to blend renewable fuels. Although many obligated parties have their own
facilities for distribution and handling of renewable fuels and can chose whether to purchase the
renewable fuel or the RIN, the likelihood that a non-obligated party would invest capital would
decline without the assurance of a forward RIN market in which to hedge their risk. The EPA-
stated goal of a gain in efficiency in the "tracking and trading of RINs" would be offset by the
real risk of a shortfall in the consumption of renewable fuels by non obligated parties which
would raise the total cost to the motoring public. [[Docket number 2537, pp. 2-3]]
Document No.: EPA-HQ-OAR-2005-0161-2472
Organization: Valero Energy Corporation (Valero)
Comment:
The commenter (2472) notes that EPA proposes allowing renewable fuel producers to separate
and sell RINs to obligated parties as a "solution" to the issue of an uneven playing field. The
commenter strongly opposes this option. This option would not address the issue of state clear
gasoline regulations and RIN-less renewable fuel working against the goals of the RFS2
program. In addition, as EPA stated in section HI.B.4.b of the preamble (74 FR 24936), "... this
approach could potentially place obligated parties at greater risk of market manipulation by
renewable fuel producers..." While EPA may favor this approach because it simplifies the
regulations, the commenter believes that EPA acknowledged risks are unacceptable. Especially
when the hybrid approach to obligated parties is a valid workable solution. [[Docket number
2472.1, p. 5]]
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Referring to EPA's request for comments on alternative approaches to RIN transfers as an
alternative to changing the designation of obligated party, the commenter does not support this
approach. The alternative approaches to RIN transfers will not minimize cost, treat all regulated
parties equally, minimize cost to the consumer, and would be potentially un-workable and
definitely have unintended consequences. [[Docket number 2072, pp. 4-5]]
Document No.: EPA-HQ-OAR-2005-0161-2464
Organization: Musket Corporation
Comment:
The commenter (2464.1) believes that changing the RIN transfer system as the EPA proposes
would create the high likelihood of failing to meet the volume goals in EISA, since the
opportunity to detach and resell the RIN is in many cases the only incentive for non-obligated
parties to blend renewable fuels. The commenter opposes a change in the process of separating a
RIN from the fuel. To the extent that EPA continues to be concerned about RIN transfers, a
reduction of the rollover cap would suffice. (2464.1, pp.2-3)
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP)
Comment:
The commenter (2384) believes that the current approach developed for RFS1 is an effective
system that avoids pitfalls that may emerge in the alternate RIN transfer approaches considered.
[[docket number 2384.1, p. 5]]
Document No.: EPA-HQ-OAR-2005-0161-1033
Organization: Poet Ethanol Products
Comment:
The commenter (1033.1) believes the majority of complications associated with RIN Transfers
will be addressed through the implementation of EMTS. By making changes to the area of
separating or transferring RINs, it seems it would be adding complexity to an area that is already
working fairly effectively or where plans are already in place to address shortcomings. The
commenter feels that it would be best to implement the Proposed Rulemaking and see how that is
functioning before making further modifications to this process. (1033.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2118
Organization: CountryMark Cooperative, LLP
Comment:
The commenter (2118.1) believes that RINs should be separated from renewable fuels from the
Blender who is or will be an obligated party. The commenter does not agree with the alternative
approaches on the transfer of RINs. If renewable fuel producers are allowed to separate all RINs
and either transfer them separately or sell them to obligated parties, obligated parties would be at
the mercy of the renewable fuels producers. The intent of the standard is to blend renewable
fuels into existing gasoline and diesel production. (2118.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
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The commenter (2124.1) opposes EPA's proposal allowing renewable fuel producers to separate
and sell RINs to obligated parties as a "solution" to the issue of an uneven playing field. The
commenter believes that this "direct transfer" approach would just change the location of the
uneven playing field to between refiner/importers and renewable fuel producers. This option
would not address the issue of state clear gasoline regulations and RIN-less renewable fuel
working against the goals of the RFS2 program. The commenter noted that while EPA may
favor this approach because it simplifies the regulations, the EPA-acknowledged risks are
unacceptable, especially when the hybrid approach to obligated parties is a valid workable
solution. (2124.1, p.18)
Document No.: EPA-HQ-OAR-2005-0161-2135
Organization: Ad Hoc Coalition of Small Business Refiners (SBR)
Comment:
The commenter (2135) does not agree with the alternative approach of allowing renewable fuel
producers to separate RINS from renewable fuels. If renewable fuel producers are allowed to
separate RINs and either transfer them separately or sell them to obligated parties, obligated
parties could be at increased risk of market volatility/manipulation by the renewable fuels
producers. The current system of having the blender or the obligated party separate the RIN
from the renewable fuel provides a check and balance on the system that ensures that the intent
of the standard is met. The few SBRs now participating in the RFS RIN program spend a
significant amount of time verifying and ensuring that the volume of RINs received are correct
for the volume of renewable fuels they purchase for introduction into the market place.
Allowing the renewable fuels producer to separate the RIN and transfer or sell them separately
may not promote entry of the same levels of renewable fuels into the marketplace, the
overarching goal of the RFS program. [[Docket number 2135, p. 21]]
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
Regarding EPA's request for comment on the separation of RINs by biofuel producers, the
commenter (2130) states that while this change could simplify RIN reporting and verification, it
would necessitate other changes to safeguard against RIN market manipulation. [[Docket number
2130.1 pp. 2-3]]
Our Response:
We agree that allowing producers to separate RINs from renewable fuels that they
produce would have significant impacts on the RIN distribution system, potentially allowing
producers to hoard RINs. Blenders may also have less incentive to purchase renewable fuels for
bending if they will not receive RINs with those renewable fuels that they can separate and sell.
Therefore, the RFS2 program requires that producers assign RINs to batches and transfer those
RINs with batches to downstream parties, consistent with the RFS1 program. The only
exception is that a producer can separate RINs if they designate their renewable fuel as
transportation fuel, heating oil, or jet fuel in its neat form, and the fuel is ultimately used in its
designated form without further blending. EPA believes that this exception is appropriate, since
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there will be no downstream blending event at which RINs would be separated, and the fuel may
never be owned by an obligated party (who would separate it).
3.11.2 Supports Allowing Producers and Importers to Separate RINs
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2172
Organization: Minnesota Soybean Processors
Comment:
MnSP strongly supports EPA's proposal to allow renewable fuel producers to separate and sell
RINs apart from renewable fuel gallons. MnSP's experience with RIN assignment has been
extremely negative in that it has reduced the MnSP customer list from 200 plus to less than 10.
In Minnesota, a state with a 5 percent biodiesel requirement, most petroleum wholesalers
("jobbers") simply cannot afford the cost of complying with the RIN regulations and as a result
MnSP has seen nearly a complete loss of biodiesel demand from petroleum jobbers. The
enactment of RFS1 and its attending RIN program has been the single largest disincentive for
petroleum jobbers to perform biodiesel blending in the history of biodiesel.
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter supports the proposal to make all RIN separating activities the responsibility of
the Producer (Section III.H. 4) which would simplify the RIN management process. If this were
adopted, it would not be necessary to consider the proposals in IV.A or IV.C.I. (0994.1, p. 15)
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) supports allowing RINs to trade separately from volume, as it will
foster greater RIN market simplicity and liquidity. Separating RINs and volume will avoid
imposing the significant inefficiencies and cost burdens of physical segregation of the different
fuels along the value chain. (2146.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-1015
Organization: Renewable Energy Group
Comment:
The commenter (1015) believes allowing a renewable fuel producer to separate the RIN at
production will not only streamline the tracking and trading of RINs, but will be effective
because our biodiesel company works with a significant number of small jobbers in the
marketplace. (1015, p.l)
Document No.: EPA-HQ-OAR-2005-0161-1975
Organization: Canadian Bioenergy Corporation
Comment:
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The commenter (1975) believes that EPA should allow RINs to be separated by biodiesel
producers in order to offer value. Allowing a renewable fuel producer to separate the RIN at
production will not only streamline the tracking and trading of RINs, but will be effective
because our biodiesel company works with a significant number of small jobbers in the
marketplace. Allowing the biodiesel producer to take ownership and separate these RINs gives
producers the ability to transfer/sell RINs to third parties. This also removes compliance burdens
from the small petroleum jobbers which, in turn, will increase availability of biodiesel in the
marketplace and provide an additional revenue stream to the biodiesel industry which is already
under duress. [[Docket number 1975, p. 1]]
Document No.: EPA-HQ-OAR-2005-0161-2010
Organization: SoyMor Biodiesel, LLC
Comment:
The commenter (2010) believes that allowing a renewable fuel producer to separate the RIN at
production (with a K code of 2 rather than 1) will streamline the tracking and trading of RINs.
This will also be effective because REG works with a significant number of small jobbers in the
marketplace who, although they are proponents and supporters of the renewable fuel industry, do
not have the financial ability to comply with the reporting requirements being placed on them as
part of the RFS. If the EPA requires absolute compliance with the RFS standard as written, the
commenter believes this group will remove themselves from the biodiesel marketplace. This
represents approximately 30% of our market. By allowing the producer to take ownership and
separate these RINs and achieve the ability to transfer/sell them to third parties while removing
compliance burdens from the small operators will increase availability of biodiesel in the
marketplace and provide an additional revenue stream to an industry already under duress.
[[Docket number 2010.2, p. 7]]
Document No.: EPA-HQ-OAR-2005-0161-2011
Organization: Western Dubuque Biodiesel LLC
Comment:
The commenter (2011) believes that allowing a renewable fuel producer to separate the RIN at
production (with a K code of 2 rather than 1) will streamline the tracking and trading of RINs.
This will also be effective because REG works with a significant number of small jobbers in the
marketplace who, although they are proponents and supporters of the renewable fuel industry, do
not have the financial ability to comply with the reporting requirements being placed on them as
part of the RFS. If the EPA requires absolute compliance with the RFS standard as written, the
commenter believes this group will remove themselves from the biodiesel marketplace. This
represents approximately 30% of our market. By allowing the producer to take ownership and
separate these RINs and achieve the ability to transfer/sell them to third parties while removing
compliance burdens from the small operators will increase availability of biodiesel in the
marketplace and provide an additional revenue stream to an industry already under duress.
[[Docket number 2011.1, p. 7]]
Document No.: EPA-HQ-OAR-2005-0161-2013
Organization: Central Iowa Energy, LLC
Comment:
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The commenter (2013) believes that allowing a renewable fuel producer to separate the RIN at
production (with a K code of 2 rather than 1) will streamline the tracking and trading of RINs.
This will also be effective because REG works with a significant number of small jobbers in the
marketplace who, although they are proponents and supporters of the renewable fuel industry, do
not have the financial ability to comply with the reporting requirements being placed on them as
part of the RFS. If the EPA requires absolute compliance with the RFS standard as written, the
commenter believes this group will remove themselves from the biodiesel marketplace. This
represents approximately 30% of our market. By allowing the producer to take ownership and
separate these RINs and achieve the ability to transfer/sell them to third parties while removing
compliance burdens from the small operators will increase availability of biodiesel in the
marketplace and provide an additional revenue stream to an industry already under duress.
[[Docket number 2013.1, p. 7]]
Document No.: EPA-HQ-OAR-2005-0161-2248
Organization: logen Corporation
Comment:
The commenter (2248.1) believes that EPA should allow CE RINs to be separated from the
associated fuel by CE producers. This will allow CE producers to more directly control how
they are able to profit from both of the commodities they produce. (2248.1, p.9)
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (docket number 2249.2) supports the proposal to allow renewable fuel producers
to separate and sell RINs apart from gallons. Allowing biodiesel producers to separate all RINs
will reduce some of the burdens involved in tracking the use of the biodiesel. EPA initially
imposed this requirement to avoid RIN hoarding by renewable fuel producers. However, such
has not been the case. Moreover, it is in the interest of biodiesel producers to ensure that the
biodiesel is sold, but provides more flexibility in the sale of the RINs. In addition, the
commenter opposes EPA's other proposals to ensure access to RINs and believes there is ample
capacity for biodiesel production to meet the RFS2 requirements. [[Docket number 2249.2, pp.
29-30]]
Document No.: EPA-HQ-OAR-2005-0161-2502
Organization: Verenium Corporation
Comment:
The commenter (2502.1) sees merit in permitting separation of RINs to make various attributes
of fuels tradable. This greater flexibility will enhance market operations and simplify the
logistics of fuel transportation and delivery and, as EPA noted, enable the creation of a single
RIN marketplace. The commenter recommends that EPA adopt its proposed alternative
approach of permitting producers to sell RINs separate from volumes of fuel, to any party.
(2502.1, p.7) (See Docket Number 2502.1, p.7 for a detailed discussion of this issue)
Document No.: EPA-HQ-OAR-2005-0161-2510
Organization: Iowa Renewable Energy, LLC
Comment:
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The commenter (2510) states that much of their business is with local and regional companies
that are established oil jobbers and believes that it is logical to include the biodiesel fuel
distribution in their business as they have existing infrastructure to handle the products and a
customer base that desires fuels requiring less foreign oils. With the way the current RIN
program is written, these local jobbers may elect to not participate. This defeats the purpose of
the RFS2 proposals and will again delay the goals of the program. [[Docket number 2510.1, p.
4]]
The commenter adds that allowing the producer to take ownership and separate these RINs and
achieve the ability to transfer/sell them to third parties while removing compliance burdens from
the small jobbers will increase availability of biodiesel in the marketplace and provide an
additional revenue stream to an industry already under duress. [[Docket number 2510.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment:
The commenter believes the RIN credits should be able to be sold separately from the fuel. This
will provide a larger pool of purchasers and also make it easier on a regional basis to distribute
some of the local renewable gallons. (2408.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2149
Organization: Dynamic Fuels, LLC
Comment:
The commenter (2149.1) supports removing the restriction requiring that RINs be strictly
assigned to fuel, and therefore do not support the direct transfer alternative. The commenter
agrees with EPA that this approach streamlines compliance, and provides greater incentives to
demonstrate compliance. The commenter disagrees, however, with the notion there is somehow
any greater possibility for market manipulation by renewable fuel producers than obligated
parties. The commenter also believes that removing the assignment would reduce industry-wide
spending on transportation and logistics costs. (214 9.1, pp. 1 - 2)
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) supports the alternative of Producers separating RINs and not
transferring them with renewable fuel purchases. This will result in more small volumes of
biofuel being distributed, and RIN tracking will be much simpler. The commenter believes that
§80.1429(4) addresses the RIN transfer issues that were not clear in RFS1. The commenter also
supports the situation where RIN Marketers are permitted to participate in the RFS2 program, to
own RINs and have access to the information in the EMTS in order to make buy or sell decisions
on RINs. The commenter believes that the inclusion of RIN Marketers will reduce the potential
for manipulation of the RIN value in the marketplace by either RIN Generators or Obligated
Parties. (0994.1, pp.8-9)
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
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Comment:
The commenter (1044) supports allowing the renewable fuel producer to sell the RIN to any
registered party. The commenter, as a producer, sees the need to streamline the RIN transfer
process or transactions responsibly. Similarly, the thought process represents other diesel
programs. The commenter also agrees this would spare the entire distribution system issues of
reporting and compliance that are causing a direct restriction of trade. It would also allow the
parties that wish to conduct transactions with RINs the "option" to participate. (1044.1, p. 2)
Document No.: EPA-HQ-OAR-2005-0161-2084
Organization: Syntroleum
Comment:
We support [[2324]] removing the restriction requiring that RINs be strictly assigned to fuel, and
therefore do not support the direct transfer alternative. However, we disagree with the notion
that there is somehow any greater possibility for market manipulation by renewable fuel
producers than obligated parties. There is one key reason why removing the assignment makes
sense: It will reduce industry-wide spending on transportation and logistics costs. [[2324.1 p.l]]
The commenter [[2324]] states that for an example, assuming conventional diesel sells for
$2.00/gal and biomass-based diesel RINs are worth $0.20/gal, most non-obligated parties would
be willing to pay $2.00/gal for the biomass-based diesel, because at that point the costs of both
fuels are identical. However, an obligated party would be willing to pay a greater amount for the
fuel, $2.20/gal. As such, even if the cost to transport the fuel to an obligated party was $0.15
more than a non-obligated party, the producer would be incented to send the fuel a longer
distance to make more on a per gallon basis [[2324.1 p.2]]
Document No.: EPA-HQ-OAR-2005-0161-2364
Organization: Tyson Foods, Inc.
Comment:
The commenter (2364.1) supports removing the restriction requiring that RINs be strictly
assigned to fuel, and therefore do not support the direct transfer alternative.
The commenter agrees with EPA that this approach streamlines compliance, and provides greater
incentives to demonstrate compliance. The commenter disagrees with the notion there is
somehow any greater possibility for market manipulation by renewable fuel producers than
obligated parties. (2364.1, p.2)
The commenter noted that the ability of a producer to separate the RIN from the fuel would
enable producers to sell the fuel to the closest buyer, without regard to whether or not the buyer
is an obligated party. Under the current system, where RINs are attached to batches of fuel,
producers are incentivized to sell the fuel to obligated parties so long as the RIN value is greater
than the transportation cost to send the fuel to a more distant obligated party. The commenter
believes that a preferable system would enable the producer to separate the RIN, and therefore
sell the fuel to the closest user. Also, because the RINs have value, there is an economic
incentive for the renewable fuel producer to transfer the RINs to the obligated party. (2364.1, 2)
Our Response:
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In general we disagree with these comments. We believe that the advantages of this
alternative approach are significantly outweighed by the disadvantages. For instance, while
allowing producers to separate RINs from batches of renewable fuel they produce would likely
simplify the distribution of RINs, it also creates the potential for RIN hoarding on the part of
producers. The commenters did not provide compelling arguments that this potential hoarding
was unlikely to occur. The fact that this alternative approach would be a significant deviation
from the RFS1 program structure could also adversely impact the transition from RFS1 to RFS2.
Both RIN hoarding and adverse impacts on program transition could increase RIN prices and
ultimately fuel prices for consumers.
With the exception of potential simplification to information included on PTDs, we do
not believe that allowing producers to separate RINs would simplify the distribution of fuels, as
physical segregation of the different fuels within the distribution system is not required by the
RFS2 program. Producers can transfer anywhere between zero and 2.5 gallon-RINs with each
gallon of renewable fuel, and are not required to maintain the assignment of a specific RIN to the
gallon of renewable fuel that it was generated to represent. These provisions provide producers
the flexibility to sell some renewable fuel without RINs for downstream parties who prefer it.
The introduction of EMTS is also expected to ease compliance burdens for parties who buy and
sell renewable fuel with assigned RINs.
3.11.3 Direct Transfer Approach
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter agrees that RINs attached to renewable fuel sold directly to Obligated Parties
should also be transferred to Obligated Parties. However, based on the regulations that RINs
need to be retired when renewable fuel is exported, Exporters must also receive RINs with their
fuel purchase so that they can meet their export RVO. The commenter also agrees that for all
other sales, the Producer (or RIN Generator) should separate and keep the RINs. (0994.1, p.10)
The commenter does not agree that Producers (RIN generators) must sell their RINs to Obligated
Parties on a quarterly basis. The Producer, if a direct exporter, will need to retain some RINs to
meet his direct export RVO. The commenter believes that Renewable fuel Exporters must also
be allowed to own RINs to meet direct export RVO. (0994.1, p.10)
The commenter noted that sections 80.1426(e) and 80.1429 need to be changed to reflect the
proposal that RINs are assigned to volumes of renewable fuel and only transferred if the fuel is
sold directly to an Obligated Party or to an Exporter, otherwise the RINs are separated from the
fuel and retained by the Producer or RIN Generator. (0994.1, p.10)
Document No.: EPA-HQ-OAR-2005-0161-2472
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Organization: Valero Energy Corporation (Valero)
Comment:
The commenter states that if the Agency does select the direct transfer option, EPA should
restrict the sale of RINs to obligated parties, as proposed in the NPRM. However, the
commenter does not support the proposed auction approach for RINs that a renewable fuel
producer does not sell. Instead, EPA should require that by the 15th of every month, the
renewable fuel producer must have sold all of its RINs from the previous month's production.
There will always be a market clearing price that renewable fuel producers will be able to sell
their RINs at to meet their sales requirement. [[Docket number 2472.1, p. 5]]
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233.2) does not support allowing producers and importing parties to separate
RINs with no further safeguards, citing concerns for market manipulation. The commenter
would support this approach only if tied to "obligated party only" trading and establishment of
EMTS and controls to prevent RIN inventory builds by producers. [[Docket number 2233.2, p.
7]]
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter believes that if EPA selects the direct transfer option, then EPA should restrict
the sale of RINs to obligated parties, as proposed in the NPRM. The commenter though does not
support the proposed auction approach for RINs that a renewable fuel producer does not sell.
Instead, the commenter believes that EPA should require that by the 15th of every month, the
renewable fuel producer must have sold all of it RINs from the previous month's production.
Introducing an auction mechanism is an unnecessary complication. The commenter also does
not support using the proposed EPA-moderated RIN trading system as a vehicle to facilitate RIN
purchases and sales beyond the voluntary listing of contact information only by buyers and
sellers. (2124.1, p. 18)
Our Response:
The direct transfer approach had the potential to alleviate some of the concerns with
allowing producers to separate RINs as expressed in comments summarized in Section 3.11.1
above. However, we continue to believe it would be difficult to ensure that producers are
actually selling their RINs in a timely manner without imposing excessive prices on those RINs.
Moreover, this change to the RIN distribution system could significantly disrupt the functioning
of the RIN market during the transition from RFS1 to RFS2, as some RINs would be required to
be transferred with volume whole others would not. Therefore, as discussed in Section II.H.4 of
the preamble, we are not finalizing such an approach.
3.11.4 Other
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
If the Producer RIN separation proposal does not become law, then the commenter requests that
the regulations for section 80.1429 be expanded to clarify the three fuel sales situations discussed
in Section III.H.4 so that RIN separation in these cases is well defined. (0994.1, p.10)
Our Response:
Modifications have been made to §80.1429 to clarify the conditions under which RINs
may or must be separated from renewable fuel.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1002
Organization: Fuel Marketing Corporation
Comment:
The commenter (1002) has concerns over the two proposed methods of distributing RINs, either
allowing producers complete separation of RINs or allowing producers to sell directly to
obligated parties. Both scenarios pose a serious risk to the distribution of renewable fuel that is
going to be required, especially true if blenders who may not buy directly from producers are
made into obligated parties with the above mentioned changes. The commenter sees both
methods limiting the ability to push current and new renewable fuel types through the supply
chain, limiting or even eliminating the ability of marketers to sell product without RINs to
obligated parties since such product is not needed for obligation. The commenter also feels that
giving producers the ability to separate RINs completely or sell directly to obligated parties gives
too much control to single group of stakeholders. (1002/1002.1, p.2)
The commenter proposes that RINs be separated by marketers and producers for the two
following circumstances:
-Product is shipped by railcar
-Product is placed in a terminal or pipeline for blending purposes
Separating RINs for fuel transported by railcar would eliminate the need of tracking railcar
movement for the purposes of transferring RINs. RIN separation for renewable fuel placed in
terminals and pipelines for blending will allow producers and marketers the ability to assign
RINs based on volumes purchased instead of individual transactions. (1002/1002.1, pp.2-3)
Our Response:
As described in our responses to comments in Section 3.11.2 above, we agree that
producers should generally not be allowed to separate RINs from batches of renewable fuel that
they produce. (One exception being where a producer designates neat renewable fuel as
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transportation fuel, heating oil or jet fuel, and the fuel is used in that manner without further
blending. See Section 3.10). However, we also do not believe that RIN separation should be
allowed for renewable fuel shipped by railcar or pipelines. The RFS2 program is based on
ownership of renewable fuel with assigned RINs, not the mode of transport. Moreover, the IT
systems required for tracking renewable fuel with assigned RINs should be the same regardless
of mode of transport. The RFS2 program includes a variety of flexibilities that can address the
commenter's concerns, including the flexibility to assign batch numbers on the basis of
individual transactions or total volumes purchased, up to 30 days worth of volume.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
If EPA retains the general prohibition on renewable fuel producers being able to separate RINs,
the commenter (2249.2) requests EPA to change the transfer rate of RINs with associated gallons
of biodiesel. Under RFS1 RINs may be transferred accompanying gallons of renewable fuel in
the range of 0-2.5 RINs per gallon of fuel. Since a gallon of biodiesel generates 1.5 RINs, the
commenter requests that a gallon of biodiesel be transferred with between 0 and 3 RINs. The
commenter believes this would greatly simplify the math and result in fewer calculation errors.
[[Docket number 2249.2, p. 33]]
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) believes that EPA should clarify that the 2.5 gal transfer limit in (a) (4),
which was a feature of RFS1, should not apply to RFS2, since there is no longer a 2.5
equivalence value for cellulosic ethanol. (2505.2, p.9)
Our Response:
The regulatory provision allowing 0-2.5 gallon-RINs to be transferred with each gallon of
renewable fuel was established under RFS1. The upper limit of 2.5 was determined from the
maximum number of gallon-RINs that could be generated for any gallon of renewable fuel,
based on the statutory requirement that cellulosic biomass ethanol and waste-derived ethanol
each count as 2.5 gallons of renewable fuel for compliance purposes. However, this higher limit
also served to provide flexibility in RIN transactions, allowing more or fewer RINs to be
transferred with volume depending on the needs are desires of the trading partners.
Although EISA eliminated this provision from CAA 211 (o), the RFS2 NPRM did not
propose changing the upper limit of 2.5 for gallon-RINs transferred with each gallon of
renewable fuel in order to maintain the flexibility for RIN transactions. We believe that the 2.5
limit provides sufficient flexibility for all renewable fuels, including biodiesel. Moreover,
maintaining this provision for RFS2 helps to ensure a smooth transition from RFS1.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2345
Organization: Independent Fuel Terminal Operators Association (IFTOA)
Comment:
The commenter (2345) believes that only parties within the petroleum business should be
engaged in the purchase and sale of RINs. The participation of brokers and traders is detrimental
to the market and should not be permitted under RFS2. The commenter also suggests that at the
end of the year, all regulated parties own no more than a specific percentage of expired RINs. In
this way, each party will have an incentive either to use the RINs or sell those that are expiring.
Thus, a greater number of RINs will be on the market and obligated parties can meet their
obligation more easily [[Docket number 2345.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter supports restricting the purchase of separated RINs to only obligated parties
regardless of the approach adopted in the final regulations. First, allowing non obligated parties
to purchase RINs creates an un-level playing field. Second, allowing non obligated parties to
purchase RINs may lead to higher prices and increased price volatility. Finally, allowing non
obligated parties to purchase RINs will lead to higher costs to the consumer and act as another
hidden tax. The commenter strongly noted they do not support EPA acting as a broker, buyer or
seller of RINs beyond the statutory requirement for EPA to offer cellulosic credits for cellulosic
biofuel when a waiver is necessary. (2124.1, p.30)
Our Response:
The regulatory provisions established during the RFS1 rulemaking process allowing any
party to own RINs were intended to maximize the avenues through which blenders can sell the
RINs they have acquired. We continue to believe that this is an important element of the
program. Moreover, we do not believe it would be appropriate to limit the number of RINs that
any party can own, and either of these changes could significantly alter the operation of the RIN
market. Therefore, we have not made these changes for the RFS2 final rule.
Under the RFS2 program, EPA does not act as a broker, buyer, or seller of RINs beyond
the statutory requirement that we offer cellulosic biofuel waiver credits under specific
circumstances.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2358
Organization: Society of Independent Gasoline Marketers of America (SIGMA) and the
National Association of Convenience Stores (NACS)
Comment:
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The commenter (2358) believes that the proposal regarding RIN transfer should be altered, but
not in the way EPA suggests. The commenter urges EPA to consider an alternative that would
have RINs generated at the time the renewable fuel is actually either blended with fossil fuels or
used in its "neat" form as a transportation fuel or heating fuel. [[Docket number 2358.1, pp. 7-8]]
[[See docket number 2358.1, pp. 7-10 for an extensive discussion of this issue.]]
Our Response:
We considered a variety of approaches to designing the RIN program in the RFS1
rulemaking, including that raised by this commenter. We evaluated comments received in
response to the RFS1 NPRM and promulgated a program structure in which the renewable fuel
producer generates the RINs. The reasons we did not select the approach recommended by the
commenter are described in the preamble to the final RFS1 rule, and remain applicable under
RFS2.
3.12 Treatment of Cellulosic Biofuel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment:
The commenter also believes that at this point in time, the credits should be issued on a wet
barrel basis and that the Agency resist the inclination to issue paper credits. EPA should make
adjustments to volume at the end of each mandated period, not at the beginning. This approach
will help create an atmosphere for financial support moving forward for the industry. (2408.1,
p.5)
Our Response:
EISA requires that we make cellulosic biofuel waiver credits available if we waive a
portion of the statutory volume for cellulosic biofuel. These credits represent an alternative
means of compliance for obligated parties in the event that cellulosic biofuel RINs are either
unavailable or available at excessive prices. Therefore, the waiver credits are not issued on the
basis of wet barrels.
EISA directs EPA to publish the RFS2 standards by November 30 of the previous year.
As a result, we must determine what the required volumes of renewable fuel will be prior to the
beginning of a compliance period, not at the end.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2345
Organization: Independent Fuel Terminal Operators Association (IFTOA)
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Comment:
The commenter (2345) supports the proposal to calculate the price of cellulosic allowances using
the 12-month average wholesale price of a gallon of gasoline from the refinery gate. The price
should remain constant for the entire calendar year the waiver is in place. In addition, the
allowances program needs stability—a constant annual price, not quarterly changes. To provide
for a transparent predictable and stable allowance market, the price of allowances should be
based on the higher of 25 cents per gallon or the amount by which $3.00 per exceeds the average
wholesale price of a gallon of gasoline measured from the refinery gate. This approach will
provide the program with a more accurate measure of wholesale gasoline prices. [[Docket
number 2345.1, pp. 6-7]]
Our Response:
We have finalized using a 12 month average price per gallon based on EIA's monthly
refinery gate price data. We have also finalized that the price will be set annually.
3.12.1 Approach to Cellulosic Biofuel Credits
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (0952.1, 0970.1) believes that the proposal does not provide sufficient certainty
to investors in cellulosic biofuels. The price cap on EPA's allowances may also result in placing
cellulosic biofuels at a price disadvantage, affecting investments and creating disincentives to
develop cellulosic biofuels. The commenter feels that the proposal also goes against
Congressional intent to promote investment in cellulosic biofuel. (0970.1, p.2)
The commenter believes that EPA should limit waivers of the RFS. For the cellulosic biofuel
waiver, EPA indicated that it believed it would be appropriate to allow excess advanced biofuels
to make up some or all of the shortfall in cellulosic biofuel. The commenter supports this
interpretation, and agrees that if other advanced biofuels are available they should be allowed to
make up the waived amount of cellulosic biofuel. This would ensure that the GHG emission
reductions sought by Congress are still met, and the mandated volumes are sold. (2329.1, p.92)
The commenter also believes that EPA should limit the ability of obligated parties to use
cellulosic allowances. The commenter supports the proposed limits on the use of cellulosic
biofuel allowances, but believes that they are not sufficient. The commenter also believes that
EPA should implement the dual RIN system to ensure the sale of cellulosic ethanol and ensure
the volume mandates are met. (2329.1, p. 93-94) [[See Docket Number 2329.1, pp.93-95 for a
detailed discussion of these issues]]
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
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Comment:
The commenter (0952.1, 0970.1) would like to work with EPA to ensure that the final version of
the RIN system is designed to ensure that it does not undermine the main thrust of RFS program:
namely to increase the use of all renewable fuels and, in particular, cellulosic ethanol. (0970.1,
p.2)
Document No.: EPA-HQ-OAR-2005-0161-1033
Organization: Poet Ethanol Products
Comment:
The commenter (1033.1) agrees in principal with EPA's theory for issuing Cellulosic
Allowances. Because there are still a number of avenues though that would exist in the proposed
methodology for market manipulation, the commenter encourages EPA to be flexible in its
implementation approach and be ready to make modifications as warranted to ensure the intent
of the program is carried out. (1033.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-1050
Organization: American Council for Ethanol (ACE)
Comment:
The commenter (1050.1) is concerned about the provisions that address the treatment of
cellulosic biofuel within this revised RIN system, which they believe may have the effect of
inhibiting cellulosic biofuels commercialization. (1050.1, p.l)
The commenter noted that EPA credits equal to the reduced volumetric target would not only be
allowed to show compliance with the cellulosic biofuel volumetric mandate, but also with the
advanced biofuel and renewable fuel mandates. This is not what Congress intended. The
commenter noted that the EISA requires that EPA develop rules with respect to cellulosic
biofuels that do not "reduce the use of other renewable fuels." But as currently proposed, EPA
issued credits could be used by obligated parties to reduce the overall volumetric consumption
requirements of the RFS. As the commenter indicated during the rulemaking for the first RFS
program, they have serious concerns about actions EPA may propose to permit the use of a paper
credit or allowance to satisfy the Act's requirement to use a physical gallon of fuel, because
doing so could result in a reduction in the overall volume of renewable fuel used under the
program. (0150.1, pp. 1-2)
The commenter is also concerned that the proposed price cap on EPA's allowances could lead to
cellulosic biofuels being put at a price disadvantage, which would have a negative impact on
cellulosic biofuels investment. (1050.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that EPA's assessment of the statutory requirements of the
cellulosic biofuel waiver provision is appropriate. In the event that a waiver is required by the
annual assessment of cellulosic biofuel capability, the commenter believes that EPA must make
available to obligated parties at their discretion allowances up to the amount of the revised
cellulosic biofuel requirement. The commenter also supports EPA's proposal that such
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allowances cannot be traded or banked for future use, but would be allowed to meet the
cellulosic biofuel requirement, the advanced biofuel requirement, and the total renewables
requirement. Use to meet all three requirements must be allowed due to the nested nature of the
mandates. (2124.1, p. 19)
The commenter also strongly supports EPA's proposal that if it reduces the cellulosic biofuel
mandate, then cellulosic biofuel allowances bought from EPA may also be used to meet the
obligated party's RVOs for Advanced Biofuels and the general RFS. (2124.1, p.20)
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) believes that EPA must make available to obligated parties allowances up
to the amount of the revised cellulosic biofuel requirement and supports the proposal that such
allowances cannot be traded or banked for future use, but used to meet the requirements. In
addition, in making its annual assessment of cellulosic biofuel capability, the commenter urges
EPA to adjust the advanced biofuel and total renewables requirements by the same volume as
cellulosic adjustment. [[Docket number 2130, pp 4-5]]
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) noted that some have expressed concern that if EPA issues RIN credits
for cellulosic fuels, retailers might be able to avoid buying the fuel, which could result in
cellulosic ethanol prices below ethanol made from other feedstocks. The commenter wants to
ensure that the cellulosic fuel industry is able to quickly expand to meet the RFS requirements,
and this will mean avoiding the use of credits and waivers. The commenter also noted that EPA
had proposed to allow obligated parties to purchase cellulosic credits from EPA as a way to
discharge their obligation to purchase advanced biofuel. This arrangement could cause
significant market disruptions anytime the market price for conventional RINs was above the
EISA-dictated price for EPA-supplied cellulosic credits. The commenter noted that one fix to
this potential problem would be to not exempt any obligated party using EPA-supplied credits
for compliance with the cellulosic standard from the obligation to purchase its full share of
advanced biofuels. (2132.1, pp.23-24)
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) believes that EPA should make available for sale a number of cellulosic
biofuel credits that is no more than the volumetric requirement. Each credit will sell at the
higher of $0.25 per gallon or the amount by which $3.00 per gallon exceeds the average U.S.
wholesale price of a gallon of gasoline. The commenter supports the process as outlined in the
RFS2 proposed rulemaking, with the exception that the cellulosic allowances should not be
applicable to meeting other renewable fuel categories. (2146.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2146
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Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) support the process proposed by EPA for conducting a yearly review
and rulemaking process to determine cellulosic ethanol volumes, thereby both ensuring an outlet
for the early cellulosic volumes produced and eliminating the requirement for the fuel industry to
purchase volumes larger than those anticipated to be available for their purchase. (2146.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2171
Organization: Mascoma Corporation
Comment:
The commenter (2171) urges EPA to limit the number of cellulosic allowances that EPA will
offer for sale in years that it reduces the cellulosic biofuels mandate to better ensure a market
demand for cellulosic ethanol that will spur investment in cellulosic production. [[Docket
number 2171.1, p. 5]]
The commenter states that the specific volume requirements for cellulosic biofuels in the RFS2
are critical to fostering investment confidence in developing new projects; therefore, it is
essential that EPA not undermine confidence via the rules establishing EPA's waiver authority
and the resulting sale of cellulosic allowances. The proposal envisions the issuance of
allowances equal to the amount of the reduced cellulosic biofuel requirement and allows them to
be used to show compliance for not only the cellulosic biofuel requirement, but also the
advanced biofuel and renewable fuel requirements. The commenter believes that this proposal
has two significant shortcomings. First, by choosing to issue an equal number of cellulosic
allowances as the cellulosic volume mandate (instead of a smaller percentage of the total
volume) the rule artificially caps cellulosic ethanol prices. While conventional ethanol RINs are
allowed to be priced in the marketplace, cellulosic RINs would be capped based upon the price
that EPA sells the cellulosic allowance. Second, this proposal could also result in EPA-issued
cellulosic allowances reducing the overall number of actual gallons of renewable fuels sold in the
United States. As a result of these two deficiencies, the RFS2 rule does not provide sufficient
certainty to cellulosic biofuels investors and creates a potential disincentive to developing
cellulosic biofuels. The commenter appreciates EPA's efforts to restrict cellulosic allowances to
ensure obligated parties do not misuse them, and believes the final rule should correct these
deficiencies to ensure that the RFS2 truly drives demand and spurs investment in cellulosic
biofuel production. [[Docket number 2171.1, p. 4]] [[See docket number 2171.1, pp.3-4 for
further discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2248
Organization: logen Corporation
Comment:
The commenter (2248.1) noted that if implemented properly, the availability of EPA-issued
cellulosic biofuel credits will:
1) Ensure competition/deny market- or monopoly-power for parties that hold CE RINs in
excess of their RVO for CE
2) Ensure, as a result of that market competition, that cost of CE is capped at the prevailing
market price for ethanol, plus the price for an EPA-issued cellulosic biofuel credit or a
CERIN
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3) Ensure a smooth process exists for compliance in the event that either
a. EPA overestimates the available volume of CE, or
b. Parties holding excess CE RINs choose to use them for additional compliance
purposes rather than sell them to other obligated parties
4) Enable the credit price formula set in law to create transparency and certainty on CE RIN
prices
5) Create certainty for regulated entities through availability of EPA-issued cellulosic
biofuel credits for all who seek them for compliance
6) Creates market liquidity through the option for obligated parties to purchase as many
EPA-issued cellulosic biofuel credits from EPA as are sought for compliance
7) Create certainty for renewable fuel producers by ensuring that the market rewards CE for
its additional policy benefits by pricing it at a slight premium
The commenter believes that this provision is deserving of especially careful and thoughtful
implementation. The multiple functions of this provision underscore and at the same time solve
the challenges created for the market players needing to comply with the CE portion of the RFS.
(2248.1, p.4)
The commenter also believes that the ability of EPA to sell cellulosic biofuel credits both
eliminates the prospect of any party establishing market- or monopoly-power over CE RIN
markets and limits what can be charged for those RINs. It is necessary that EPA make as many
cellulosic biofuel credits available as are sought for compliance in any given year. Failure to do
so would reconstitute the opportunity for obligated parties to be subjected to monopoly pricing
whenever the market lacks willing sellers offering reasonable prices. (2248.1, p.5)
The commenter noted that EPA's proposed implementation of the provisions of Sec. 202
(e) (2) (D) would allow an EPA-issued credit - or allowance - to excuse obligated parties from
purchasing the full applicable volume for Advanced Biofuel or renewable fuel. This is in direct
contravention of the provision in EISA that states that the Administrator must "limit any
potential misuse of cellulosic biofuel credits to reduce the use of other renewable fuels". (2248.1,
p.6) (See Docket Number 2248.1, pp.6-7 for a detailed discussion of this issue)
The commenter noted that the proposed rule suggests obligated parties would be forced to
purchase EPA-issued cellulosic biofuel credits to cover a volume of CE that the EPA is certain
the industry will not produce. Should this occur, it could undermine public and political support
for the RFS, which in turn would dampen investment in next generation renewable fuel
technology. The NPRM also suggests that EPA would not reduce the CE applicable volume to a
level at which it can be reasonably confident will be available to obligated parties. The
commenter urges EPA to adhere to Congressional direction and set the applicable volume each
year at a level that EPA can reasonably expect will be available. (2248.1, pp.7-8) (See Docket
Number 2248.1, pp.7-8 for a detailed discussion of this issue)
Document No.: EPA-HQ-OAR-2005-0161-2248
Organization: logen Corporation
Comment:
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The commenter (2248.1) recommends that EPA maximize the benefits of the RFS by reducing
the applicable volume for CE based on EPA's best assessment of available CE, and limit the use
of EPA-issued cellulosic biofuel credits to satisfying compliance with an obligated party's RVO
for CE, but not for Advanced Biofuel or Renewable Fuel. The result will be a more favorable
and predictable environment for businesses looking to commercialize CE. (2248.1, p.2) (See
Docket Number 2248.1, pp.2-3 for a detailed discussion of this issue)
The commenter believes that it is essential that the Administrator follow Congressional direction
and reduce the applicable volume to a level agency assessments suggest will be available. This
serves two purposes. First, it will relieve the petroleum industry of any obligation to purchase
those volumes of fuel that the CE industry is not yet able to produce. Secondly, it will serve the
larger Congressional objective of ensuring that, to the extent the CE industry can produce fuel; it
will have a market for that fuel. In taking this approach, the Administrator will promote
confidence in the political stability behind the policy. If EPA were to require obligated parties to
purchase EPA-issued cellulosic biofuel credits for every gallon between actual production and
the ambitious target volumes in EISA, it is highly likely that the CE mandate will come under
attack from the petroleum industry as equivalent to a tax that will have no effect on accelerating
CE deployment. (2248.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (224932) noted that for the Cellulosic Biofuel waiver, EPA indicated that it
believed it would be appropriate to allow other excess advanced biofuels to make up some or the
entire shortfall in cellulosic biofuel. The commenter supports this interpretation, and agrees that
if other advanced biofuels are available they should be allowed to make up the waived amount of
cellulosic biofuel. [[Docket number 2249.2, p. 49]]
The commenter also has concerns that EPA's cellulosic biofuel allowance provisions may work
to reduce the actual volumes of advanced biofuels or renewable fuels sold each year. While the
commenter supports EPA's limitations on purchasing and trading such allowances, EPA also
proposes to permit these allowances to be used to show compliance with the Cellulosic Biofuel,
Advanced Biofuel and Renewable Fuel obligations. As EPA recognizes, its proposal still runs
the risk of affecting the overall volumes sold. As such, the commenter supports EPA's
alternative approach to limit the application of allowances to the Cellulosic Biofuel volume only
to limit the potential adverse impacts on the purchase of other renewable fuels. [[Docket number
2249.2, pp. 49-50]]
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP)
Comment:
The commenter supports EPA's proposals to allow obligated parties to purchase allowances up
to the level of their cellulosic biofuel RVO less the number of cellulosic biofuel RINs they own;
to allow an obligated party to use such allowances to meet its total renewable and advanced
biofuel standards, if it used the allowance to meet its cellulosic biofuel standard; and
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recommends that EPA provide obligated parties the flexibility to meet their revised cellulosic
requirement with cellulosic RINs and/or cellulosic allowances, [[docket number 2384.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
Where EPA adjusts the cellulosic biofuel requirement due to inadequate production capacity,
EPA proposes to make allowances available to obligated parties up to the level of the adjusted
cellulosic biofuel standard. The commenter agrees that this is required by EISA. EPA also states
that "Because cellulosic biofuel RINs can be used to meet the advanced biofuel and total
renewable fuel standards in addition to the cellulosic biofuel standard, we propose that cellulosic
biofuel allowances also be available for use in meeting those three standards." Section 80.1427
should be clarified to make clear that allowances used to comply with the cellulosic renewable
fuel mandate also count towards the advanced and general renewable fuel obligations. [[Docket
number 2393.1, p. 40]]
Document No.: EPA-HQ-OAR-2005-0161-2400
Organization: Murphy Oil USA, Inc.
Comment:
The commenter noted that should EPA over-estimate the amount of cellulosic gallons that will
be available for a particular year, obligated parties will need other means to meet their
obligation. The commenter recommends that the EPA offer cellulosic allowances to obligated
parties only when they need additional RIN credits to meet their annual obligation. The number
of credits purchased needs to be limited to the remaining amount of credits needed to meet the
obligation, with no excess. (2400.2, pp. 7-8)
The commenter also noted that EPA indicated interest in restricting obligated parties from
purchasing extra allowances and to use cellulosic RINs for other compliance categories. EPA
must carefully consider the timing and availability of allowances before advancing such a
change. The commenter recommends that the EPA only allow obligated parties to purchase
cellulosic allowances after the year-end RFS0300 reports are completed and obligation has been
calculated. (2400.2, p.8)
Document No.: EPA-HQ-OAR-2005-0161-2471
Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter (2471.1) supports EPA's proposal to place certain restrictions on Cellulosic
Biofuel credits that EPA must issue, per statute, if it waives a portion of the Cellulosic Biofuel
mandate. It could be very difficult to obtain Cellulosic Biofuel RINs, even when there is not a
waiver, given the relatively small volume of Cellulosic Biofuel required initially and the fact that
every Obligated Party, no matter how small their obligation, must obtain these RINs. If part of
the mandate is waived, securing Cellulosic Biofuel RINs could be especially difficult. The
commenter also supports EPA's proposal that Cellulosic Biofuel "allowances" issued by EPA
pursuant to a waiver should be limited in terms of who can buy, sell or trade them. The
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commenter requests that EPA clarify that it will not issue allowances in instances where the
entire Cellulosic Biofuel mandate is waived. (2471.1, p.11)
Document No.: EPA-HQ-OAR-2005-0161-2502
Organization: Verenium Corporation
Comment:
The commenter (2502.1) recommends that EPA require that obligated parties demonstrate actual
progress toward fulfilling their annual RVOs through periodic, e.g., quarterly reports on volumes
actually acquired during each period. (2502.1, p.6) (See Docket Number 2502.1, p.5 for a
detailed discussion of this issue)
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) agrees with EPA's proposal to make allowances available to obligated
parties up to the level of the adjusted cellulosic biofuel standard. Whenever EPA adjusts the
cellulosic biofuel mandate due to inadequate production capacity, the commenter believes that
EPA should reduce the overhanging advanced and general renewable fuel mandates by an equal
amount. If EPA does not reduce the overhanging mandates, EPA will be merely creating an
incentive to increase use of the least performing biofuels and exacerbating the El0 blend wall
problem and the de facto E85 mandate imposed by EISA. (2505.2, p. 13)
The commenter also believes that section 80.1427 should also be clarified to make clear that
allowances used to comply with the cellulosic renewable fuel mandate also count towards the
advanced and general renewable fuel obligations. (2505.2, p. 13)
Document No.: EPA-HQ-OAR-2005-0161-2526
Organization: Coskata
Comment:
The commenter (2526) believes that the EPA must set a clear and strong precedent for allowing
the waiver and cellulosic RIN allowance to perform as Congress intended, which is to spur
deployment of cellulosic technologies that can have meaningful reductions in transportation
related greenhouse gas emissions. The commenter believes that RIN allowances should not
displace volumetric requirements for blending all biofuels and RINs should trade separately from
volume. [[Docket number 2526.1, p. 1]] [[See docket number 2526.1, pp. 2-9 for a detailed
discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2047
Organization: Terrabon
Comment:
The commenter [[2071]] also states because of regional demand disparities caused by
transportation costs. The result is that certain regions of the country may have an oversupply of
biofuels because distant Obligated Parties choose to purchase allowances rather than wet gallons
while those Obligated Parties that are near sources of biofuels would only purchase sufficient
wet gallons to satisfy their applicable RVOs. This would leave producers with gallons of
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cellulosic biofuel that cannot be sold for an economical price even while satisfying
Congressional intent under the EISA. [[#2071.1 p.8]]
Document No.: EPA-HQ-OAR-2005-0161-2389
Organization: BlueFire et al.
Comment:
The commenter (2389) wants EPA to have transparent pricing and to ensure renewable fuel is
actually purchased.
Our Response:
Based on the comments provided, EPA has finalized the Cellulosic Biofuel Waiver
Credits (waiver credits) provision slightly differently than as proposed. We agree that waiver
credits should not replace consumption of renewable fuel. Our final rules provide that waiver
credits may only be used for the cellulosic biofuel standard. Companies purchasing waiver
credits will need to purchase biomass based diesel, advanced biofuel and total renewable RINs to
meet their obligations for those standards in the same way as if they had purchased cellulosic
biofuel RINs. In order to ensure every obligated party has access to the waiver credits we are
setting the quantity of waiver credits for a given compliance year to the volume of the reduced
cellulosic biofuel standard for that year.
Some parties commented about the price of waiver credits stating that the price could
affect market dynamics. The pricing formula was set in the Act and EPA is finalizing what we
proposed based on the instructions provided in the Act. We took comment on how often we
should set the price for credits. Based on comment, EPA will only set the price annually when
we finalize the cellulosic biofuel standard for the next compliance period. This approach will
provide regulatory certainty for obligated parties and producers of cellulosic biofuels.
3.12.2 Adjustments to Other Standards in the Event of a Cellulosic Waiver
What the Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that if EPA determines that a cellulosic biofuel waiver is
needed, the commenter urges EPA to also adjust the advanced biofuel and total renewables
requirements by the same volume as the cellulosic adjustment. If EPA adopts a 30 year
averaging and zero discount rate for Lifecycle Analysis, it is unlikely there will be any advanced
biofuel to make up the cellulosic shortfall. The commenter stated that EPA should not ever
adjust only the advanced biofuel requirement and leave the total renewable requirement
unchanged. Such an action would allow the use of grandfathered biofuels that need not provide
any GHG reduction to replace cellulosic biofuels that are required to achieve at least a 60%
lifecycle GHG emissions reduction. (2124.1, p. 19)
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Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (224932) believes that, as long as other renewable fuels are available, the
renewable fuel standard should not be reduced. While it may not present the same GHG
reductions as cellulosic biofuel, other renewable fuels would still provide GHG emission
reduction benefits over petroleum. [[Docket number 2249.2, p. 49]]
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
For the Cellulosic Biofuel waiver, EPA indicated that it believed it would be appropriate to allow
other excess advanced biofuels to make up some or the entire shortfall in cellulosic biofuel. The
commenter supports this interpretation, and agrees that if other advanced biofuels are available
they should be allowed to make up the waived amount of cellulosic biofuel. [[Docket number
2249.2, p. 49]]
EPA further noted that, if the advanced biofuel requirement were also lowered, the total
renewable fuel volume would be lowered to the same degree. The commenter believes that, as
long as other renewable fuels are available, the renewable fuel standard should not be reduced.
While it may not present the same GHG reductions as cellulosic biofuel, other renewable fuels
would still provide GHG emission reduction benefits over petroleum. [[Docket number 2249.2,
p. 49]]
The commenter also has concerns that EPA's cellulosic biofuel allowance provisions may work
to reduce the actual volumes of advanced biofuels or renewable fuels sold each year. While the
commenter supports EPA's limitations on purchasing and trading such allowances, EPA also
proposes to permit these allowances to be used to show compliance with the Cellulosic Biofuel,
Advanced Biofuel and Renewable Fuel obligations. As EPA recognizes, its proposal still runs
the risk of affecting the overall volumes sold. As such, the commenter supports EPA's
alternative approach to limit the application of allowances to the Cellulosic Biofuel volume only
to limit the potential adverse impacts on the purchase of other renewable fuels. [[Docket number
2249.2, pp. 49-50]]
Document No.: EPA-HQ-OAR-2005-0161-2337
Organization: California Air Resources Board
Comment:
The commenter (2337.1) believes that a policy which allows the substitution of biodiesel or
sugarcane ethanol for cellulosic biofuel would significantly reduce incentive for investment in
cellulosic and other second and third generation biofuels. Therefore, they recommend U.S. EPA
only allow other second and third generation biofuels that do not compete with food for arable
land to be substituted for cellulosic ethanol should the projected volume of cellulosic ethanol not
meet the minimum applicable volume required by statute. This restriction will help preserve the
incentive for investment in truly sustainable biofuels. (Page 4)
Document No.: EPA-HQ-OAR-2005-0161-2384
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Organization: BP America (BP)
Comment:
The commenter recommends that if EPA determines a shortfall in cellulosic biofuel production
capacity for the following year and subsequently reduces the following year's requirements for
cellulosic biofuel, the EPA should also reduce the advanced and total renewable fuel volume
requirements by the same amount that the cellulosic requirements were reduced, [[docket
number 2384.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
Regarding the impact of the cellulosic mandate on other mandates, the commenter (2393.1)
believes that both the advanced and total mandates should be reduced by the same amount as the
cellulosic waiver—this will have no material adverse impact on any producing entity and will
serve to slow the approach of the E10 blend wall. The commenter adds that if EPA does not
reduce the overhanging mandates, EPA will (a) create an incentive to increase use of the least
performing biofuels that Congress clearly sought to limit and (b) exacerbate the E10 blend wall
problem and the de facto E85 mandate imposed by EISA. [[Docket number 2393.1, p. 40]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter adds that the mandates for both the advanced biofuels and total renewable fuels
should be reduced by the same amount as the cellulosic biofuels waiver. This will have no
material adverse impact on any producing entity and will serve to slow the approach of the E10
blend wall. [[Docket number 2523.1, p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-2364
Organization: Tyson Foods, Inc.
Comment:
The commenter agrees with EPA's view that EISA effectively sets a limit for participation in the
RFS program of 15 billion gallons of corn-based ethanol by 2022. The commenter also agrees
with EPA's position that any reduction to the advanced biofuels standard in a given year should
be accompanied by a corresponding reduction in the overall renewable standard. This will
ensure that corn-based ethanol cannot be used to meet volume levels that Congress clearly
intended be met by next generation biofuels. (2364.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
Regarding where "EPA determines that the projected volume of cellulosic biofuels is not
sufficient to meet the levels in EISA we will consider the availability of other advanced biofuels
in deciding whether to lower the advanced biofuel standard as well." The commenter believes
that both the advanced and total mandates should be reduced by the same amount as the
cellulosic waiver. [[Docket number 2233.2, p. 42]]
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The commenter also supports the approach that EPA has proposed for the issuance and use of
EPA-issued cellulosic RINS. [[Docket number 2233.2, p. 43]]
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (0952.1, 0970.1) is concerned that the provisions in the proposed rule that
address cellulosic biofuel may undermine, rather than advance, Congress' intent. (0970.1, p.l)
The new program could have some important shortcomings with respect to how RINs are issued
and applied for cellulosic biofuel in the event EPA waives all or part of the cellulosic biofuel
requirement. Under the Act, EPA must reduce the cellulosic biofuel requirement to the extent
projections indicate that the volume expected to be produced in the next year will be less than the
minimum applicable volume required. If such is the case, EPA must issue allowances up to the
reduced volume for sale at a price capped by the statute. Under the proposal, EPA would issue
such allowances in the amount of the reduced cellulosic biofuel requirement and allow them to
be used to show compliance not only with the cellulosic biofuel requirement, but also the
advanced biofuel and renewable fuel requirements. While the commenter appreciates the limits
EPA has proposed to restrict the ability of obligated parties to misuse these allowances, these
limits are not adequate to protect against reduction in the amount of renewable fuel sold or to
ensure continued investments being made in the industry—two clear goals of Congress. (0970.1,
pp.1-2)
The commenter noted that EISA requires that EPA promulgate regulations governing cellulosic
biofuel credits in a manner that does not inappropriately "reduce the use of other renewable
fuels" and that provides certainty to renewable fuel producers. Obligated parties utilizing
cellulosic allowances purchased directly from the EPA may not be required to purchase a volume
of renewable fuel equal to the number of cellulosic credits that it retires. These paper credits,
rather than actual volumes, then will be used to meet these requirements. Thus, EPA-issued
credits could be used to reduce the overall volume requirements of the RFS. If EPA reduces the
RFS commensurate with the reduction in the cellulosic biofuel requirement, this reduction in
actual volumes sold is even more pronounced. (0970.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters (2129.1) believe that EPA should exercise its authority under Section 202(e) of
EISA to reduce the total volume required under the renewable fuel standard if it determines that
reduced volumes of cellulosic biofuel are projected to be available, so as to match the required
volume to the projected volume available. The commenters suggest that the EPA adjust the total
renewable standard, and not only the advanced biofuel standard, downwards in every event of
projected shortfall in the volumes of cellulosic biofuels, and to make that downward adjustment
of equal or greater amount. EPA must not allow for a fuel that achieves less GHG emissions
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RFS2 Summary and Analysis of Comments
reductions below baseline levels than the cellulosic or advanced biofuel that has fallen short of
projected volume levels to be allowed to fill the deficit left by this shortfall. (2129.1, p.14)
Document No.: EPA-HQ-OAR-2005-0161-2137
Organization: Brazilian Sugarcane Industry Association (UNICA)
Comment:
The commenter (2137.1) notes that it is likely that there will not be enough cellulosic biofuels
available to meet the RFS2 volume targets for 2010 and beyond. And concurs with EPA's
interpretation of the EISA that "it would be appropriate to allow excess advanced biofuels to
make up some or all of the shortfall in cellulosic biofuel." The commenter believes that in any
given year, if there is an insufficient volume of cellulosic biofuel available but an ample volume
of other advanced biofuels available with GHG emissions equal or better than the cellulosic
threshold, EPA should not lower the required volumes for advanced biofuel but instead shift the
requirement from cellulosic to the other advanced biofuel categories. To ignore this option
would be to encourage the use of fossil fuels. [[Docket number 2137.1, pp. 14-15]]
The commenter (2137.1) also concurs with EPA's assertion that "we do not believe it would be
appropriate to lower the advanced biofuel standard but not the total renewable standard", as this
would allow conventional biofuels to effectively be used to meet the standards that Congress
specifically set for cellulosic and advanced biofuels. [[Docket number 2137.1, p. 15]]
Our Response:
We appreciate the varying perspectives of the different commenters on future
adjustments to the advanced and total renewable fuel standards in the event of a waiver of the
cellulosic biofuel standard. For 2010, while we are waiving a portion of the cellulosic biofuel
standard, we are not adjusting the other standards. The relative magnitude of the biomass-based
diesel standard in 2010 made any adjustment to the advanced biofuel and total renewable
standard unnecessary. The approach for any adjustments to the standards in future years will be
decided when those standards are finalized.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1, p.11) believes combining standards for the cellulosic biofuel mandate
would exceed EPA's authority. (2124.1, p.11)
Our Response:
EPA is not combining standards for the cellulosic biofuel mandate in the final rule.
3.13 Production Outlook Reports
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
If Production Outlook Reports can be captured by the EMTS system, the commenter (1044)
would fully endorse the requirement based upon their live attendance at the EMTS Seminar. The
commenter finds this provision similar to other agency fuel programs; therefore, they would
support it provided the EMTS system will capture the data. (1044.1, p. 3)
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) believes that Production Outlook Reports by biofuel producers should be
required, but not overly relied upon, particularly for new biofuel technologies. [[Docket number
2130.1, p. 17]]
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that EPA provides no reasonable explanation to require the
information being requested for the outlook reports, and such information is not needed to assist
parties to come into compliance. (2329.1, p. 105) [[See Docket Number 2329.1, pp.104-105 for a
detailed discussion of this issue]]
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) rejects the proposal for an annual outlook report required for each
regulated party. With so many unknowns and no previous history of renewable fuels mandate,
and no sense of continued tax rebate, the renewable fuels industry cannot confidently project
what will happen in year 2010, let alone 2022. Until the industry operates a few years under the
RFS2 carve-outs and the issues on tax rebate for renewables are resolved, the industry cannot
develop a meaningful outlook forecast. EPA would be better off hiring a consultant who can
look at the big picture and provide a much more meaningful evaluation than could be provided
by the individual members of the biofuels industry. (0994.1, pp. 14-15)
Document No.: EPA-HQ-OAR-2005-0161-2155
Organization: Petroleum Marketers and Convenience Stores of Iowa (PMCI)
Comment:
The commenter (2155.1) believes that EPA would be grossly duplicating regulatory efforts by
requiring renewable fuel marketers and terminals to report on an annual basis as to volumes,
type, and projections. These regulated parties already submit quarterly and annual (sometimes
monthly) reports for blending credit purposes. This information is readily available to the EPA
and should not be duplicated. (2155.1, p.3)
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RFS2 Summary and Analysis of Comments
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) opposes requiring annual production reports. This proposal would be
another burden for the renewable fuels industry. Moreover, the requirement is wholly
unnecessary. EPA has sufficient information available to track production and future plans for
production from El A and from the National Biodiesel Board for the industry as a whole. EPA
provides no valid justification to require annual production reports from individual facilities.
[[Docket number 2249.2, pp. 43-44 and docket number 2249.1, p. 5]]
Document No.: EPA-HQ-OAR-2005-0161-2345
Organization: Independent Fuel Terminal Operators Association (IFTOA)
Comment:
The commenter (2345) believes that additional terminal reporting is unnecessary and
burdensome. EPA can base its decision regarding terminals on information from EIA and from
private publications that provide data on individual facilities, tankage, and products they handle.
[[Docket number 2345.1, p. 7]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) notes that EPA is considering whether to require the annual submission
of data to facilitate its evaluation of the ability of the distribution system to deliver projected
volumes of biofuels to petroleum terminals. Currently, EIA's Petroleum Supply Monthly reports
data on a monthly basis for the supply, disposition, and inventory of renewable fuels for each
PADD. The commenter suggests that EPA use these EIA data and not place any additional
reporting burden on terminal operators and others in the distribution system. [[Docket number
2393.1, p. 14]]
Regarding the fuel producers annual "Production Outlook Report", because cellulosic
technologies are unproven, and based on past experience with projected timelines for completion
of cellulosic projects, it would seem likely that there may be a tendency for producers to
overestimate their production capacity. EPA does not appear to provide guidelines to producers
regarding their predictions of next year production, nor provisions for penalties to producers who
submit information that does not prove to be accurate. The commenter believes that accuracy in
mandated producer reports should be enforced just as vigorously as accuracy in mandated
obligated party compliance demonstration reports. [[Docket number 2393.1, pp 38-39]]
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated
Comment:
The commenter (2511.1) is opposed to submitting such confidential and strategic information
even under a CBI submission. The commenter believes that any forward looking information to
2022 seems excessive and somewhat useless given the nature of such long-term predictions.
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Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) believes that EPA should limit these reports to producers of renewable
fuel (both domestic and foreign) and not require such reports from importers. Importers will
tend to import renewable fuels based on variable economic conditions and will likely not be able
to reliably predict the amount of renewable fuels that they may import in future years. (2505.2,
p.10)
Document No.: EPA-HQ-OAR-2005-0161-2172
Organization: Minnesota Soybean Producers (MnSP)
Comment:
MnSP also objects to EPA's proposal that annual renewable fuel production outlook reports be
required of all domestic renewable fuel producers. This proposal is burdensome and duplicative
for the domestic biodiesel industry. The Energy Information Administration currently collects
significant and detailed monthly biodiesel production, by-product production, pricing, production
forecasts and other information from biodiesel producers. This information already exists in the
public domain. MnSP urges EPA to utilize the information already being generated and not
implement duplicate reporting requirements that are already required by other agencies.
Our Response:
As discussed in section ILK of the preamble, we are finalizing the requirement for
production outlook reports from renewable fuel producers. The information required for the
reports will be in a simple spreadsheet format, similar to the diesel fuel pre-compliance reports,
and we may also utilize information reported to EMTS as well. The information submitted in the
reports will be used to evaluate the progress that the industry is making towards the renewable
fuels volume goals mandated by EISA. They will help EPA set the annual cellulosic biofuel
standard and consider whether waivers would be appropriate with respect to the advanced
biofuel, biomass-based diesel, and total renewable fuel standards. Without this information we
would be unable to reliably set the renewable fuel standards each year and appropriately respond
to waiver applications. While we understand that the types of projections we request in the
Outlook Reports could be somewhat speculative in nature, we believe that the projections will
provide us with the most reliable information possible to inform the annual RFS standards and
waiver considerations. Further, we believe this information will be more useful to us than other
public information that is released in other contexts (e.g., announcements for marketing
purposes). It will provide the most accurate information available for setting the cellulosic
biofuel and biomass-based diesel standards, and any adjustments to the advanced biofuel and
total renewable fuel standards.
We recognize concerns of some commenters with respect to submission of confidential
business plans and forecasts. All information submitted to EPA will be treated as confidential
business information (CBI), and if used by EPA in a regulatory context will only be reported out
in very general terms. As with our Diesel Pre-compliance Reports, we fully expect that the
information will be somewhat speculative in the early reports, and we will weight it accordingly.
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RFS2 Summary and Analysis of Comments
As the program progresses, however, information submitted for the reports will continue to
improve. We believe that any information, whether speculative or concrete, will be helpful for
the purposes described above. Thus we are finalizing Production Outlook Reports, and the
required elements at §80.1449.
We appreciate that some commenters expressed concern that the Production Outlook
Reports may contain too many unknowns or might not provide meaningful information.
However, as discussed above, while these reports will have their limitations, we believe they will
provide the best and most up to date information available for us to use in setting the standards
and considering any waiver requests. We will of course also look to other publicly available
information, and may consider using contractors to help out in this regard, but it cannot replace
the need for the production outlook report data.
A commenter noted that this provision is similar to reports required under the diesel
program, and further stated that if the required information can be captured by EMTS, the
commenter fully supports this requirement. However, the commenter stated that it is opposed to
some of the required elements of the reports for planned expanded or new production (strategic
planning, planning and front-end engineering, detailed engineering and permitting, procurement
and construction, and commissioning and start-up); these are an aspect of financial planning that
the commenter believes EPA has no jurisdiction over and cannot derive basis from EISA in any
form regardless of interpretation. As explained above, this information will be used by EPA to
inform us for setting the standards on an annual basis and in responding to any waiver petitions.
It will not be used to assess compliance with the program. The other provisions for registration,
recordkeeping, and reporting serve that purpose.
We note that the information that currently exists from other sources mentioned by the
commenters is generally either current or historical information. For the purposes of setting
future standards, we need to have information on future plans and projections. We understand
that reality will always be different from the projections, but they will still give us the best
possible source of information. Furthermore, by having projections five years out into the future,
and then obtaining new reports every year, we will be able to assess the trends in the data and
reports to better utilize them over time.
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Renewable Fuel Standard Program
(RFS2) Summary and Analysis of
Comments
Chapter 4
Compliance
(Registration, Recordkeeping, Reporting)
Assessment and Standards Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
v>EPA
United States EPA-420-R-10-003
Environmental Protection r , „„.„
Agency February 2010
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4. COMPLIANCE (REGISTRATION, RECORDKEEPING, REPORTING)
4.1 Registration 4-3
4.2 RIN Tracking and Price Reporting 4-14
4.3 Reporting and Attest Engagements 4-21
4.3.1 EMTS 4-21
4.3.2 Monthly Reporting 4-23
4.3.3 Additional Reporting Information 4-26
4.3.4 Attest Engagements 4-30
4.4 Product Transfer Documents (PTDs) 4-31
4.5 Recordkeeping 4-33
4.6 EPA Moderated Transaction System (EMTS) 4-33
4.6.1 General Comments 4-33
4.6.2 PTD and Attest Engagements Under RFS2 4-36
4.6.3 Start-up of EMTS 4-37
4.6.4 Timing of Transaction Reporting 4-39
4.6.5 Technical Elements of EMTS 4-40
4.6.6 Batch Reporting Via EMTS 4-41
4.7 Prohibited Acts and Liability for Violations 4-42
4.8 Retail Dispenser Labeling for Gasoline with Greater than 10 Percent Ethanol 4-43
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RFS2 Summary and Analysis of Comments
4. COMPLIANCE (REGISTRATION, RECORDKEEPING, REPORTING)
What We Proposed:
The comments in this section correspond to Section IV of the preamble to the proposed
rule and address registration, recordkeeping, reporting. A summary of the comments received
and our response to those comments are located below (and in section III of the preamble to the
final rule).
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
The commenter (1044) offers the following remarks related to proposed regulation §80.1427:
§80.1427(7) (i) and (7) (iii) (How are RINs used to demonstrate compliance?) The language
contradicts itself. In §1427(7) (i) the word "all" is used referring to 2008 and 2009 RINs for 2010
compliance purposes and in §1427(7) (iii) the wording limits the use to 2008 and 2009 RINs that
were not used for prior compliance. Which is it? Clearly the preamble discusses all 2008 and
2009 excess RINs that were not used for compliance purposes will move forward. Therefore the
commenter requests the wording to reflect that position. [[Docket number 1044.1, p. 6]]
Document No.: EPA-HQ-OAR-2005-0161-2312
Organization: LyondellBasell Industries
Comment:
The commenter (2312.1) noted that the revised RFS2 definition of "renewable fuels" will likely
exclude or block much of the current foreign biofuels as well as future expansions from entering
U.S. commerce and thereby being used to satisfy non-RFS2 markets. EPA is essentially
applying the same costly and extensive supply chain record-keeping and segregation
(verification) requirements on any biofuel trade in the U.S. even if that trade is not intended for
satisfying RFS2 obligations. Unless modified, these additional requirements will economically
penalize any future biofuels trade in the U.S. that is not intended for meeting the RFS2 fuels
requirements in the U.S., and will unfairly and unnecessarily disadvantage a U.S. producer's
ability to compete in supplying either fuel blends with biofuels or bio-component intermediates
to the global markets. (2312.1, p.4-5)
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that EPA should revise the registration, recordkeeping and
reporting requirements for the renewable biomass definition to simply require registrants to
identify the types of feedstock they use, to keep verifiable records of the amount and type of
feedstocks used in producing the renewable fuel. (2329.1, p. 102)
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Chapter 4: Compliance (Registration, Recordkeeping, Reporting)
Document No.: EPA-HQ-OAR-2005-0161-2079
Organization: AE Biofuels, Inc.
Comment:
The commenter (2079.1) noted that the proposal includes a multitude of new registration,
recordkeeping, and reporting requirements for biodiesel producers, including possible onsite
engineering reviews by a certified Professional Engineer. Many of these new requirements
(which also include renewable biomass verification records and submission of RIN pricing
information to EPA) appear to offer little or no regulatory benefit and are not thoroughly
justified in the proposal. (2079.1, p.10)
Document No.: EPA-HQ-OAR-2005-0161-2099
Organization: Honeywell International, Inc.
Comment:
The commenter (2099.1) supports EPA's proposed approach that importers of renewable fuels
should be subject to the same reporting, registration, recordkeeping, and attest engagement
regimes. (2099.1, p.25)
Document No.: EPA-HQ-OAR-2005-0161-2149
Organization: Dynamic Fuels, LLC
Comment:
The commenter (2149.1) believes that it is important that EPA works to keep the regulatory
compliance burdens to a minimum. The benefits of regulations should be carefully balanced with
the costs they create. This is perhaps most important in the emerging renewable fuels industry
where the typical competitor is relatively small and therefore lacks the scale that can help it
absorb such costs. (2149.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter (2383) believes EPA should eliminate recordkeeping, reporting, and registration
requirements that are unnecessary or overly burdensome or expensive. [[Docket number 2380.1,
p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2474
Organization: North Carolina Department of Transportation
Comment:
The commenter (2474) believes that registration, certification, and reporting requirements that
are impractical and burdensome should be eliminated. (2474, p.2)
Our Response:
RFS2 is inherently more complicated than RFS1 due to additional requirements imposed
by Congress in EISA. As such, the registration, recordkeeping and reporting requirements have
necessarily become more burdensome to ensure the requirements of EISA are being fulfilled. In
Section II of the FRM preamble, we have addressed concerns over burdens associated with
specific topics such as Registration requirements, third party engineering reviews, and
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RFS2 Summary and Analysis of Comments
Production Outlook reports. While additional burdens are a fact of new RFS2 requirements, we
are sensitive to the burdens placed on the regulated community and have made significant
improvements to the mechanisms associated with some of these functions. We have revised our
registration system via EPA's Central Data Exchange (CDX) enabling regulated parties to apply
for registration IDs and make corrections online. We have also introduced the EPA Moderated
Transaction System (EMTS) to manage the generation and tracking of RINs in a less
burdensome manner than was used in RFS1. EPA staff continues to make improvements to the
registration and reporting infrastructure in order to reduce burdens on the regulated community
and EPA, as well as to insure confidence and compliance with RFS2.
4.1 Registration
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
The commenter (2157) is concerned with additional registration, certification, and reporting
requirements that EPA is proposing. The commenter finds these are impractical, burdensome
and unnecessary. Generally the current RFS RIN program has been working, and EPA should
not add undue burdens that may be cost prohibitive and, in fact, may result in having the
opposite of the intended effect. Specifically, EPA should presume the existing agricultural lands
are met, and not require certification and, at most, should utilize an approach similar to the
baseline production approach identified in the Proposed Rule (taking into account increased
yields). Additionally, price information, on-site engineering reviews, and production outlook
reports are unnecessary and burdensome, may require release of confidential business
information, and should not be required. (2157 p. iv-v).
Document No.: EPA-HQ-OAR-2005-0161-2358
Organization: Society of Independent Gasoline Marketers of America (SIGMA) and the
National Association of Convenience Stores (NACS)
Comment:
EPA should impose regulatory requirements of foreign producers in a way that facilitates their
participation, for example, allowing engineers based in and licensed by foreign countries to
perform reviews. [[Docket number 2358.1, pp. 4-5]]
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) generally supports using a one-time registration requirement to identify
grandfather status and identify pathways to generate RINs. The commenter does not agree with
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the on-site engineering review requirements. (2329.1, p. 102) [See Docket Number 2329.1, p.
102 for a detailed discussion of this issue]]
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) believes that EPA should eliminate the re-registration process because
the only purpose it served is to allow EPA to obtain confidential business information that is not
necessary for the success of the RFS2 program. Requiring re- registration and engineering
inspection will delay the Jan 1, 2010 launch of the RFS2 which will have significant negative
economic impact on the Biodiesel industry. (0994.1, p.6)
The commenter also believes that since feedstock usage is the critical element in establishing the
proper Biofuel categories, the requirement for a professional engineering inspection of all
renewable fuel facilities is not necessary and should be eliminated. If a biofuel facility is
expecting to get grandfathered into the system then a formal request form should be required.
This form should require the details about the facility such as the existing production capacity at
the time of the grandfathering. However this form is not needed for all other biomass Producers
who are not to be grandfathered. (0994.1, p.6)
Document No.: EPA-HQ-OAR-2005-0161-1033
Organization: Poet Ethanol Products
Comment:
The commenter (1033.1) suggest that the requirement of an Independent Professional Engineer
review places a undue burden and expense on facilities, not to mention being impractical to
accomplish given what is likely to be a very narrow window for registration after the final rule is
published. Since most producers have licensed engineers on-site or individuals who are very
knowledgeable of the design and operation of the facilities, the commenter believes that at least
for all of the Grandfathered facilities, but preferably all Producers, that the requirement of the
analysis to be done by an "Independent Professional Engineer" be stricken and allow it to be
performed by a "knowledgeable employee of the Producer". (1033.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
Referring to proposed §80.1450, the commenter (1044) vehemently opposes these additional
requirements and this section! Their opposition is based upon the reality of Biomass-Based
Diesel production (Biodiesel)-producers must undergo the exact requirements for permitting
under the guidelines of the National Environmental Policy Act as adopted by each State.
[[Docket number 1044.1, pp. 7-8]]
Document No.: EPA-HQ-OAR-2005-0161-1051
Organization: Aberdeen Development Corp.
Comment:
The commenter (1051.1) states that the proposed rule includes many new requirements which
appear to offer little or no regulatory benefit while adding significantly to biodiesel producers"
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RFS2 Summary and Analysis of Comments
compliance burdens. Since most producers are small businesses, many are incapable of
complying with these extremely complex regulations. Therefore, we recommend working with
the National Biodiesel Board to simplify or eliminate registration, certification, and reporting
requirements that are impractical and burdensome. [[Docket number 1051.1, p, 4]]
Document No.: EPA-HQ-OAR-2005-0161-2110
Organization: Chevron
Comment:
The commenter (2110.1) is hopeful that the registration and reporting system could be
simplified. Eventually any system should include an internationally accepted certification
system applied by accredited organizations that cover the fuel life cycle (as required by EISA
and presumably other sustainability measures if and when they are developed) and provisions for
a consistent global certification system. A preferred system would take advantage of existing or
developing third-party efforts and ultimately provide a single certificate establishing the
sustainability credentials of the biofuel, its GHG saving percentage, and all the information
needed to establish a D code or, better yet, assign the D code itself. (2110.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter believes that the only option is for implementation of the program is January 1,
2011 or later. Even if EPA is able to promulgate a final rule before January 2010, it will take
until 2011 to accomplish the registrations that are required and to put in place the systems and
plans that are necessary for compliance (assuming that EPA can issue the final rule by January
2010). (2124.1, p. 9).
The commenter (2124.1) noted that registration will be a burdensome process for renewable fuel
producers and that it will take considerable time for all renewable fuel producers to complete the
registration process. The commenter believes that it is imperative that EPA provide sufficient
lead time at the beginning of this program to allow these registrations to occur. If sufficient time
is not provided, it could limit the availability of RINs. (2124.1, p.22-23)
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) supports an engineering review to verify the appropriate D code is being
generated and believes that EPA should clarify the kinds of production changes that would
trigger a review by a professional engineer. However, the commenter believes that the
requirements that EPA envisions are far too complex and time consuming which is one of the
reasons they believe a start date before 1/1/2011 will be disruptive.
Document No.: EPA-HQ-OAR-2005-0161-2125
Organization: Mercedes Benz
Comment:
With respect to the registration of new biomass-diesel manufacturers, including biodiesel
manufacturers under 40 CFR. Part 79, and the regulation of fuel production quality under 40
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Chapter 4: Compliance (Registration, Recordkeeping, Reporting)
CFR Part 80, the commenter (2125.10 believes that the existing regulatory mechanisms need to
be made more stringent and effective. (2125.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2145
Organization: Flint Hills Resources
Comment:
The commenter (2145.1) noted that in §80.1450, there are several references to providing EPA
with registration "information specified under §80.76." Some of the §80.76 registration
information does not make strict sense in the context of '80.1450. The commenter suggests that
EPA address these inconsistencies with changes to either §80.76 or §80.1450, or both. (2145.1,
P-8)
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) supports extending the RIN registration requirements to all domestic
renewable fuel producers, importers, and foreign renewable fuel producers in an equitable
manner. While it is appropriate for EPA to request information about a producer's products,
feedstocks and facilities in order to allow proper classification of the fuel, the commenter is
concerned about the potential compliance burden and additional costs a new verification or
certification process would create. (2146.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
The commenter (2157) is concerned with additional registration, certification, and reporting
requirements that EPA is proposing. The commenter finds these are impractical, burdensome
and unnecessary. Generally the current RFS RIN program has been working, and EPA should
not add undue burdens that may be cost prohibitive and, in fact, may result in having the
opposite of the intended effect. Specifically, EPA should presume the existing agricultural lands
are met, and not require certification and, at most, should utilize an approach similar to the
baseline production approach identified in the Proposed Rule (taking into account increased
yields). (2157 p. iv).
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) supports an engineering review to verify the appropriate D code is being
generated. EPA should make clear what kinds of production changes would trigger a P.E.
review. [[Docket number 2233.2, p. 45]]
Document No.: EPA-HQ-OAR-2005-0161-2249
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RFS2 Summary and Analysis of Comments
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) supports a streamlined registration process. In particular the commenter
generally supports the proposed revisions to the registration process, but opposes the requirement
for an on-site engineering review as unnecessary and overly burdensome. The commenter agrees
that it made sense to require on-site inspection of the facility for foreign producers where EPA
does not have the same access to records or ability to inspect, but such is not the case for U.S.
facilities. The commenter notes that EPA already requires substantial recordkeeping and
reporting, including attest engagement requirements that are sufficient to meet any enforcement
needs. The on-site engineering review also seems counter to EPA's decision to use lookup tables
to identify general pathways to ease administrative burdens, rather than allow those facilities to
establish a source-specific pathway. If EPA believes there is a question regarding a particular
facility, it retains authority to request and review additional records, and to inspect the facility.
The commenter believes that EPA should remove this requirement for on-site engineering
reviews of U.S. facilities. [[Docket number 2249.2, pp. 39-40]]
In addition the commenter asks EPA to clarify how to register facilities that use
multiple/aggregated feedstocks. Although the commenter opposes an on-site review
requirement, they seek clarification to ensure that EPA's proposal to require an update of facility
registration does not include a change in feedstock that was already identified and documented
under the list of "capable" feedstocks for renewable fuel production. If EPA intends every
feedstock change to require an on-site engineering review, this requirement would be costly and
unnecessary. Docket number 2249.2, p. 40]] [[See docket number 2249.2, pp. 40-42 and docket
number 2249.1, pp 4-5 for additional discussion of this issue. ]]
Document No.: EPA-HQ-OAR-2005-0161-2341
Organization: Noble Americas
Comment:
The commenter (2341) believes that re-registration should not be required and would contribute
to delays in the implementation of RFS2. The commenter asks that the inconsistency be
reconciled and feels that re-registration is not justified. (2341, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2358
Organization: Society of Independent Gasoline Marketers of America (SIGMA) and the
National Association of Convenience Stores (NACS)
Comment:
The commenter (2358) believes EPA should impose regulatory requirements of foreign
producers in a way that facilitates their participation, for example, allowing engineers base in and
licensed by foreign countries to perform reviews. [[Docket number 2358.1, pp. 4-5]]
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
In Section 80.1450, EPA proposes expanded registration requirements applicable to renewable
fuel producers. The commenter (2383) requests that EPA eliminate from the registration
requirements information under section 80.1450(b) (1) (v) regarding facilities that commenced
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Chapter 4: Compliance (Registration, Recordkeeping, Reporting)
construction prior to December 19, 2007. EPA further proposes that as part of the re-registration
process, each producer must include an "independent third-party engineering review" of
information regarding each facility's fuel and feedstock production, feedstocks, production
processes, and energy sources. The commenter believes such an independent review will
produce no new information, will only confirm information the facility has already certified is
accurate, and will be expensive. [[Docket number 2383.1, pp. 59-60]]
The commenter believes there is no basis or need for EPA to require the types of records
specified under section 80.1450(b)(l)(v) (records of costs of additions, repairs, replacements,
estimated life of facility, economic and technical limitations to meeting 20 percent GHG
performance standard) from ethanol production facilities that commenced construction before
December 19, 2007. The commenter requests that EPA eliminate the requirements from the final
rule. [[Docket number 2383.1, p. 59]]
The commenter also believes that EPA's suggestion that renewable fuel producers must
reregister every three years is too frequent. Given the burden and cost of re-registering, the
commenter recommends that producers should not have to re-register more frequently than every
five years. Further, the commenter believes EPA should eliminate its proposed section
80.1450(d) (2) that requires producers to update registration within seven days for any changes to
a renewable fuel facility "not affecting the renewable fuel category for which the producer is
registered." Such requirement serves no regulatory purpose and is unnecessarily burdensome.
[[Docket number 2383.1, p. 60]]
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated
Comment:
The commenter (2511.1) noted that EPA proposes that every facility complete an on-site
engineering review of their facility performed in conjunction with his or her initial registration
for the new RFS program in order to establish the proper basis for RIN generation, and every
three years thereafter to verify that the fuel pathways established in their initial registration are
still applicable. The commenter believes that grandfathered and deemed compliant facilities
should not be subject to such a requirement. The commenter points out that EPA is requiring
every facility to complete such an engineering review, but is advocating a "generic" fuel
pathway in lieu of individual plant carbon footprints. (2511.1,p .6)
Document No.: EPA-HQ-OAR-2005-0161-2435
Organization: R.W. Heiden Associates LLC
Comment:
The commenter (2435) notes that EPA's proposal requires a number of new compliance and
certification provisions that will place a significant regulatory compliance burden on the
industry, the majority of which is comprised of small businesses. Many of the proposed
compliance provisions do not have practical application and will not work in practice as part of
the day-to-day operation of producing biodiesel, nor do they offer regulatory benefit and are not
justified in the proposal. The commenter recommends that the agency work with the National
Biodiesel Board to simplify or eliminate registration, certification, and reporting requirements
that are impractical and overly burdensome. [[Docket number 2435.1, p. 6]]
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RFS2 Summary and Analysis of Comments
Document No.: EPA-HQ-OAR-2005-0161-2472
Organization: Valero Energy Corporation (Valero)
Comment:
The commenter (2472) notes that as proposed, all renewable fuel producers would be required to
make a showing to EPA, certified by an independent 3rd party, to establish the pathway for the
renewable fuels produced at each facility so that the renewable fuels produced at each facility
can be classified appropriately under the RIN system. Clearly, this will be a burdensome process
for renewable fuel producers and it will take considerable time for all renewable fuel producers
to complete the registration process. The commenter believes it is imperative that EPA provide
sufficient lead time at the beginning of this program to allow these registrations to occur. If
sufficient time is not provided, it could limit the availability of RINs. [[Docket number 2472.1, p.
7]]
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter noted that there is not sufficient time before January 1, 2010, for foreign and
domestic renewable fuel producers to satisfy the requirements for registration under proposed
section 80.1450. (2505.2, pp.1-3) (See Docket Number 2505.2, pp.1-3 for a detailed discussion
of this issue)
The commenter (2505.2) believes that it is imperative that EPA provide sufficient lead time at
the beginning of this program to allow these registrations to occur. If sufficient time is not
provided, it could result in a shortage of RINs, because renewable fuel producers will not be able
to assign RINs to the fuels that they produce unless they are registered under the new rules.
(2505.2, pp.10-11)
Document No.: EPA-HQ-OAR-2005-0161-1001
Organization: Kurzman Clean Tech Research & Kurzman Capital, LLC
Comment:
The commenter (1001.1) noted that the proposal includes a multitude of new registration,
recordkeeping, and reporting requirements for biodiesel producers, including possible on-site
engineering reviews by a certified Professional Engineer. Many of these new requirements
appear to offer little or no regulatory benefit and are not thoroughly justified in the proposal.
The commenter recommends that the agency work with the National Biodiesel Board to simplify
or eliminate registration, certification, and reporting requirements that are impractical and overly
burdensome. (1001.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-1005
Organization: Cotner Consulting Services
Comment:
The commenter (1005.1) noted that the proposed rule includes many new requirements which
appear to offer little or no regulatory benefit while adding significantly to biodiesel producers'
compliance burdens. Since most producers are small businesses, many are incapable of
complying with these extremely complex regulations. The commenter recommends working
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Chapter 4: Compliance (Registration, Recordkeeping, Reporting)
with the National Biodiesel Board to simplify or eliminate registration, certification, and
reporting requirements that are impractical and burdensome. (1005.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-1010
Organization: CC Gas Systems, LLC
Comment:
The commenter (1010.1) noted that the proposal includes a multitude of new registration,
recordkeeping, and reporting requirements for biodiesel producers, including possible on-site
engineering reviews by a certified Professional Engineer. Many of these new requirements
appear to offer little or no regulatory benefit and are not thoroughly justified in the proposal.
The commenter recommends that the Agency work with the National Biodiesel Board to
simplify or eliminate registration, certification, and reporting requirements that are impractical
and overly burdensome. (1010.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-1011
Organization: Atlantic BioFuels
Comment:
The commenter (1011.1) noted that the proposed rule includes many new requirements which
appear to offer little or no regulatory benefit while adding significantly to biodiesel producers'
compliance burdens. Since most producers are small businesses, many are incapable of
complying with these extremely complex regulations. The commenter recommends working
with the National Biodiesel Board to simplify or eliminate registration, certification, and
reporting requirements that are impractical and burdensome. (1011.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-1012
Organization: Glenwood Farms
Comment:
The commenter (1012.1) noted that the proposed rule includes many new requirements which
appear to offer little or no regulatory benefit while adding significantly to biodiesel producers'
compliance burdens. Since most producers are small businesses, many are incapable of
complying with these extremely complex regulations. The commenter recommends working
with the National Biodiesel Board to simplify or eliminate registration, certification, and
reporting requirements that are impractical and burdensome. (1012.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-1025
Organization: Law Offices of David Wilcox
Comment:
The commenter (1025) noted that the proposed rule includes many new requirements which
appear to offer little or no regulatory benefit while adding significantly to biodiesel producers'
compliance burdens. Since most producers are small businesses, many are incapable of
complying with these extremely complex regulations. The commenter recommends working
with the National Biodiesel Board to simplify or eliminate registration, certification, and
reporting requirements that are impractical and burdensome. (1025, p.5)
Document No.: EPA-HQ-OAR-2005-0161-1028
Organization: Citizen
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RFS2 Summary and Analysis of Comments
Comment:
The commenter (1028) noted that the proposed rule includes many new requirements which
appear to offer little or no regulatory benefit while adding significantly to biodiesel producers'
compliance burdens. Since most producers are small businesses, many are incapable of
complying with these extremely complex regulations. The commenter recommends working
with the National Biodiesel Board to simplify or eliminate registration, certification, and
reporting requirements that are impractical and burdensome. (1028, p.3)
Document No.: EPA-HQ-OAR-2005-0161-1029
Organization: C.I.B.
Comment:
The commenter (1029) noted that the proposed rule includes many new requirements which
appear to offer little or no regulatory benefit while adding significantly to biodiesel producers'
compliance burdens. Since most producers are small businesses, many are incapable of
complying with these extremely complex regulations. The commenter recommends working
with the National Biodiesel Board to simplify or eliminate registration, certification, and
reporting requirements that are impractical and burdensome. (1029, p.3)
Document No.: EPA-HQ-OAR-2005-0161-1043
Organization: University of Georgia Engineering Outreach Service
Comment:
The commenter (1043.1) noted that the proposal includes a multitude of new registration,
recordkeeping, and reporting requirements for biodiesel producers, including possible on-site
engineering reviews by a certified Professional Engineer. Many of these new requirements
appear to offer little or no regulatory benefit and are not thoroughly justified in the proposal.
The commenter recommends that the Agency work with the National Biodiesel Board to
simplify or eliminate registration, certification, and reporting requirements that are impractical
and overly burdensome. (1043.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2016
Organization: Malaysian Palm Oil Board (MPOB)
Comment:
The commenter believes that for overseas installations, independent engineering review, if ever
required, should also be allowed to be conducted by a professional engineer recognized by the
country in which the installation is located. (2016.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2172
Organization: Minnesota Soybean Processors
Comment:
MnSP is extremely opposed to the portions of this proposed EPA rulemaking that contains
numerous and burdensome registration, recordkeeping and reporting requirements that outweigh
any benefit. This rulemaking includes a multitude of new registration, recordkeeping, and
reporting requirements for biodiesel producers including proposed on-site engineering reviews
by a licensed Professional Engineer.
Our Response:
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Registration Info
In order to implement and enforce the new restrictions on qualifying renewable fuel
under RFS2, we are revising the registration process for renewable fuel producers and importers.
Many commenters argue that the expanded registration requirement is unnecessary and
burdensome. EPA disagrees and believes that the information to be collected through the
expanded registration process is essential to generating and assigning a certain category of RIN
to a volume of fuel. Additionally, the information collected is essential to determining whether
the feedstock used to produce the fuel meets the definition of renewable biomass, whether the
lifecycle greenhouse gas emissions of the fuel meets a certain GHG reduction threshold and, in
some cases, whether the renewable fuel production facility is considered to be grandfathered into
the program. Therefore, we are requiring producers, including foreign producers, and importers
that generate RINs to provide us with information on their feedstocks, facilities, and products, in
order to implement and enforce the program and have confidence that producers and importers
are properly categorizing their fuel and generating RINs.
Re-registration
Several commenters argue that they should not be required to update their RFS1
registration for purposes of RFS2. EPA believes that re-registration is necessary because the
information being collected for purposes of RFS2 is greatly expanded from that collected under
RFS1 due to the additional requirements imposed by EISA. More detailed information on
feedstocks, processes and energy sources is necessary under RFS2 to ensure the proper RIN type
is generated. This type of information was not necessary or required under RFS1, so even if a
party is already registered under the RFS1 program, that party will need to re-register for
purposes of RFS2 to provide the additional information.
Registration for Grandfathered Facilities
Several commenters argue that those facilities that are grandfathered under RFS2 should
not be subject to the registration and engineering review requirements proposed for RFS2.
However, EPA believes that producers of renewable fuel from grandfathered facilities must
confirm their eligibility to be grandfathered and must provide information that demonstrates
when the facility commenced construction, and that establishes the baseline volume of the fuel.
However, in response to comments and to reduce demand on engineering resources, EPA is
allowing grandfathered facilities an additional six months to register and submit their
engineering review.
Registration for Foreign Producers and Importers
EPA proposed that foreign producers of renewable fuel meet the same requirements as
domestic producers, including registering information about their feedstocks, facilities, and
products, as well as submitting an on-site independent engineering review of their facilities at the
time of registration for the program and every three years thereafter. These proposed
requirements apply to all foreign renewable fuel producers who plan to export their products to
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RFS2 Summary and Analysis of Comments
the U.S. as part of the RFS2 program, whether the foreign producer generates RINs for their fuel
or an importer does. NBB argues that facilities located in the U.S. should not have to conduct
the engineering review of the facility as it is unnecessary since EPA has the authority to inspect
the facilities at any time and conduct their own review, but that foreign facilities should be
required to conduct third-party engineering reviews. In contrast, DuPont Applied BioSciences
argues that domestic and foreign facilities should be subject to the same engineering review
requirements. EPA believes that the application of the facility registration and engineering
review requirement should be consistently applied to both domestic and foreign producers so that
EPA has the information necessary ensure from the beginning of the RFS2 program that the
correct types of RINs are being generated by facilities. Without the registration information,
RINs will not properly generated from the beginning of the program by both domestic and
foreign producers and EPA will have to take remedial action and invalidate many RINs, which
will hinder the program as a whole.
Engineering Reviews
A number of commenters argue that engineering reviews are not necessary. EPA is
finalizing the proposed requirement for an on-site engineering review of facilities producing
renewable fuel due to the variability of production facilities, the increase in the number of
categories of renewable fuels, and the importance of ensuring that that RINs are generated in the
correct category. Without these engineering reviews, we do not believe it would be possible to
implement the RFS2 program in a manner that ensured the requirements of EISA were being
fulfilled. Additionally, the engineering review provides a check against fraudulent RIN
generation. In order to establish the proper basis for RIN generation, we are requiring that every
renewable fuel producer have the on-site engineering review of their facility performed in
conjunction with his or her initial registration for the new RFS program. Additionally, the on-
site engineering review must be conducted every three years thereafter to verify that the fuel
pathways established in the initial registration are still applicable. Producers are required to
submit a copy of their independent engineering review to EPA, for verification and enforcement
purposes.
Independent Third Party Engineer
Commenters argue that having the facility engineering review conducted by an
independent third party is unnecessary since most facilities could have their review conducted by
on-site engineers who have in-depth knowledge of the facility and its processes, heat sources and
feedstocks. EPA argues that it is necessary to have an independent party conduct the engineering
review because an independent party can maintain impartiality and objectivity in evaluating the
facilities and their processes. The independent party must be a licensed professional engineer
(P.E.), or foreign equivalent who works in the chemical engineering field. The independent third
party must provide to EPA documentation of his or her qualifications as part of the engineering
review, including proof of appropriate P.E. license or foreign equivalent.
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Many commenters argue that completing the registration and third-party engineering
requirements will take a significant amount of time, and that EPA would need to provide ample
time for regulated parties to complete these requirements prior to the start of the RFS2 program.
The agency recognizes that there are significant concerns involving timing necessary and ability
to produce a completed engineering review to satisfy registration requirements. Since the
publication of the RFS2 NPRM, we have delivered consistently a message stating that advanced
planning and preparation was necessary from all parties, EPA and the regulated community
inclusive, for successful implementation of this program. Furthermore, in an effort to reduce
demand on engineering resources, we are allowing grandfathered facilities an additional six
months to submit their engineering review. This will direct the focus of engineering review
resources on producers of advanced, cellulosic and biomass based diesel. EPA fully expects
these producers of advanced renewable fuels to meet the engineering review requirement;
however, if they are having difficulties producing engineer's reports prior to July 1, we ask that
they contact us.
Registration Updates
Commenters argue that registration updates every three years are unnecessary and that
the registration should be a one-time occurrence. However, since operations change over time
EPA believes that updates are necessary to confirm that the producer is continuing to generate
the proper RIN type based on its feedstocks, processes and product. Additionally, registration
updates must be submitted if a producer makes changes at his facility that are not included in his
original registration.
Handling of Information Claimed as Confidential Business Information (CBI)
EPA acknowledges that some information required to be submitted under the RFS2
regulation may be claimed as CBI by the submitter. EPA is required to treat such information in
accordance with our regulations at 40 CFR part 2. In addition, EPA has issued guidelines and
policies for handling of information claimed as CBI in order to implement these regulations.
4.2 RIN Tracking and Price Reporting
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
With regards to Part (e) (3) (x), the commenter (2505.2) strongly disagrees with this proposal.
EPA does not need this information for compliance purposes, and it is highly sensitive
confidential business information that EPA should not require parties to submit unless it is
absolutely necessary for compliance. (2505.2, p.12)
Document No.: EPA-HQ-OAR-2005-0161-2155
Organization: Petroleum Marketers and Convenience Stores of Iowa (PMCI)
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Comment:
The commenter (2155.1) believes that in the event that a RIN generator inadvertently attaches an
invalid RIN (incorrect batch number, duplicated RIN, typo, etc.) to valid gallons sold, and said
generator subsequently goes out of business, EPA shall regenerate or replace those RINs in order
to maintain the intent of the law. The commenter also believes that the RIN generator should be
allowed to generate RINs on a point of sale and/or point of import basis until such time allows
for the implementation of EPA's EMTS RIN verification and tracking tools. This will limit the
negative impacts and disincentives created by RINs generated at the end of calendar years but
not sold until the following year. (2155.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
The commenter (1044) strongly opposes the requirement to provide pricing information with
transactions. They feel this type of information gathering is the responsibility of the SEC. In
their review of the EISA, they were unable to identify the provisions that require the gathering of
this information from any party. (1044, p. 3)
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters (2129.1) believe that the RIN and pathway system as proposed by EPA will
make it virtually impossible to track the emissions of specific gallons. This will greatly reduce
the usefulness of the RIN system in encouraging market differentiation. EPA should strive to
incorporate more specificity in the RIN system, aiming to assign more refined point-assessments
of emissions associated with each batch of renewables fuels and tracking that rather than just
pathways in the RIN. Simply expanding the number of digits in the RIN code will remove the
current constraint, which limits tracking to just pathway letters. Second, the pathway system
needs to include a better way for novel and better pathways to be recognized in a timely fashion.
(2129.1, p. 15)
Document No.: EPA-HQ-OAR-2005-0161-2154
Organization: ConocoPhillips
Comment:
With regards to EPA requiring reporting of RIN prices, the commenter (2154.1) considers this
information to be Business Confidential and object to its inclusion in the RIN reporting
requirements. EPA should eliminate this when promulgating the final rule. (2154.1, p.6)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
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Chapter 4: Compliance (Registration, Recordkeeping, Reporting)
The commenter (2233) notes that as the RFS2 program is currently proposed, RIN costs can
infinitely increase and at some point a very high RIN price will have a negative impact on the
program. The commenter suggests that EPA consider establishing a RIN cap or ceiling. EPA
would make paper RINs available at this value and thus RIN prices would not rise above this
ceiling price. [[Docket number 2233.2, pp. 13-14]]
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter believes that EPA provides no evidence that the RIN market is not working, and
requires EPA to "assess the general health and direction of the market and overall liquidity of
RINs." The commenter states that the RIN market is already transparent, and parties should not
be required to submit pricing information to EPA, which may then be available to the public.
Price information is considered confidential business information and the disclosure of this
sensitive information should not be required. None of EPA's asserted benefits justifies requiring
this information. [[Docket number 2249.2, p. 42]]
The commenter adds that there is ample information in the marketplace as to the supply of
renewable fuels, the prices of those fuels, and obligated parties are well aware of RIN pricing in
the marketplace. There is simply no support to claim that RIN prices will provide any additional
information of which the regulated entities are not already aware. In sum, the commenter
believes that the price of RINs is confidential business information and EPA should remove the
requirement to report RIN prices. [[Docket number 2249.2, pp. 42-43]] [[See docket number
2249.1, p. 5 for additional discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2400
Organization: Murphy Oil USA, Inc.
Comment:
The commenter (2400.2) recommends that all RIN information pertaining to value or financial
position of the company be kept confidential. The commenter believes the EPA can obtain
enough RIN market perspective without requiring companies to give specific company pricing
information. (2400.2, p. 10)
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter rejects EPA's proposal to include RIN pricing on the RIN Transaction Reports.
RIN values are not necessarily known at the time of a renewable fuel sale; and RIN values are
not a strong measure of industry health. Feedstock prices, and diesel and gasoline prices are a
much stronger indicator of industry health and these items are published in readily accessible
forms. EPA should develop the expertise of using the feedstock and petroleum fuels prices to
gauge the health of the renewable fuels industry and for setting renewable fuel standards.
(0994.1, p. 13)
Document No.: EPA-HQ-OAR-2005-0161-1002
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RFS2 Summary and Analysis of Comments
Organization: Fuel Marketing Corporation
Comment:
The commenter (1002) has concerns over the requirement that price information be submitted
with each transaction. The commenter strongly feels this is strictly private information, and such
information is not needed to access the market conditions as there are reporting services the
industry uses to evaluate pricing that the EPA can access as well. The commenter also questions
the security of such information, especially the quantities of such information being stored; make
it more of a target for intrusion for those seeking such information. (1002/1002.1, p.3)
The commenter also feels that including pricing information by transaction basis will
dramatically impact the technical requirements needed to implement the EMTS system for the
user, increasing the amount of data entry for those that cannot automate, and prevents the ability
to send volume reporting as stated above which will have the positive effect of reducing the
amount of transaction the EMTS system will handle. (1002/1002.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) opposes EPA's proposal to require that RIN prices be reported to EPA.
The commenter recommends that EPA should follow the same RIN pricing reporting
requirement as set in RFS1. Reporting RIN pricing, in general, could have an adverse affect on
Confidential Business Information (CBI) and Corporate Intelligence (CI). (2124.1, p.30)
The commenter also noted that that the EPA lacks specific statutory authority to require
burdensome and intrusive reporting of RIN price information with regard to the price of RINs in
transactions (whether purchases, trades or sales). (2124.1, p.31) [See more detailed information
on this issue in Docket Number 2124.1, pp.31-32]
The commenter noted that a downstream party should not be required to adjust records, reports
and compliance calculations because an upstream party made a mistake and distributed invalid
RINs. The proposed regulation should be edited such that the upstream party makes peace with
EPA and EMTS when an invalid RIN is discovered and downstream parties will not be bothered.
(2124.1, pp.34-35)
Document No.: EPA-HQ-OAR-2005-0161-2135
Organization: Ad Hoc Coalition of Small Business Refiners (SBR)
Comment:
The commenter (2135) opposes the proposal to include requirements for RIN price reporting to
EPA as a result of RIN purchases, sales or trades. Public disclosure of company-specific RIN
pricing data could lead to unintended market manipulation and price volatility. Moreover, the
prices of RINs do not ensure that the applicable level of renewable fuel has been added to a
transportation fuel nor are they needed to ensure that the requirements of the RFS program are
satisfied. [[Docket number 2135.1, p. 22]]
Document No.: EPA-HQ-OAR-2005-0161-2155
Organization: Petroleum Marketers and Convenience Stores of Iowa (PMCI)
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Comment:
The commenter strongly disagrees with the EPA's position on the need to capture RIN values for
separated and assigned RINs. This is not the function of the EPA to gather market (pricing)
information and to then hold that information publicly. (2155.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2341
Organization: Noble Americas
Comment:
The commenter also believes that pricing information is of significant commercial value and
could disrupt markets if inadvertently disclosed, and EPA should not require price reporting.
Since price errors are the most common reason for invoice corrections, including pricing
information in the data required for each renewable fuel and RIN transaction managed through
the EMTS will not only increase the quantity of data being processed by the EMTS system, it
will create unintentional RIN errors which will further increase the burden on EMTS. (2341, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated
Comment:
The commenter is opposed to submitting the price information for assigned RINs. The RIN
value is not a line item on the invoice when selling volumes of renewable fuels with RINs. The
commenter proposes that EPA source RIN pricing information from publicly available RIN
trading groups on a stated periodic basis. (2511.1, p.6)
Document No.: EPA-HQ-OAR-2005-0161-2464
Organization: Musket Corporation
Comment:
The commenter (2464.1) opposes a requirement for the reporting of confidential RIN prices to
EPA. (2464.1,p.3)
Document No.: EPA-HQ-OAR-2005-0161-2537
Organization: Musket Corporation
Comment:
The commenter also opposes a requirement for the reporting of confidential RIN prices to EPA.
The commenter believes that the inclusion of RIN prices in the regular reports is unnecessary if
EPA's intent is solely to monitor market disruptions, since several industry-standard reporting
services publish RIN prices daily. The quality of that price data is good enough for major firms
to accept for marked-to-market treatment. For individuals to report price transactions to EPA is
burdensome, unnecessary and creates the risk of the loss of confidential business information.
[[Docket number 2537, p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2471
Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter disagrees with EPA's proposal to compel parties to report their RIN transaction
prices. 18 RIN price data is currently available from a variety of sources, including several trade
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RFS2 Summary and Analysis of Comments
publications such as OPIS Ethanol and Biodiesel Information Service and Platt's Oilgram
Report, and published price data from the Chicago Board of Trade and NYMEX. (2471.1, p. 15)
Document No.: EPA-HQ-OAR-2005-0161-2145
Organization: Flint Hills Resources
Comment:
The commenter (2145.1) does not support reporting RIN prices through the EMTS system.
Pricing information is not required or needed to implement the objectives of EISA. If EPA
needs this type of information to make decisions around such things as waiver requests, there are
commercial services (e.g., Biofuelsconnect.com, OPIS, Platts) that can satisfy this need. (2145.1,
pp.6-7)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) opposes reporting RIN prices as business confidential information that
could be subject to FOIA. The commenter also opposes the requirement for renewable fuel
prices and volumes. [[Docket number 2233.2, p. 11]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter strongly opposes the requirement to report RIN prices. RIN prices are business
confidential information that could be subject to Freedom of Information Act requests. In
addition, RINs purchased with renewable fuel are often, if not always, not priced separately.
Thus for anything other than pure RIN transactions, RIN prices are not available. [[Docket
number 2393.1, p. 12]]
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter also opposes EPA's proposal to require reporting of RIN prices. This
requirement, as well as the requirement for production outlook reports, is unnecessary and raises
substantial business confidential issues that EPA does not address in the Proposed Rule. Price
information is considered confidential business information and should not be required to be
disclosed. EPA should eliminate this requirement from the final rule (2329.1, p. 103-104)
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) supports the EPA moderated transaction system that EPA has proposed
with one important exception. The commenter strongly opposes the requirement to report RIN
prices. RIN prices are business confidential information that could be subject to Freedom of
Information Act requests. In addition, RINs purchased with renewable fuel are often, if not
always, not priced separately. Thus for anything other than pure RIN transactions, RIN prices are
not available. [[Docket number 2393.1, p. 12]]
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Document No.: EPA-HQ-OAR-2005-0161-2145
Organization: Flint Hills Resources
Comment:
The commenter (2145.1) supports the development and implementation of the EMTS system.
The commenter does not support reporting RIN prices through the EMTS system. Pricing
information is not required or needed to implement the objectives of EISA. If EPA needs this
type of information to make decisions around such things as waiver requests, there are
commercial services (e.g., Biofuelsconnect.com, OPIS, Platts) that can satisfy this need. (2145.1,
pp.6-7)
Document No.: EPA-HQ-OAR-2005-0161-1002
Organization: Fuel Marketing Corporation
Comment:
The commenter (1002) has grave concerns on recording pricing information on a transaction
basis. The commenter also has concerns of using a transaction based system instead of volumes.
(1002/1002.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2047
Organization: Terrabon
Comment:
Commenter [[2071]] proposes that quarterly pricing should be used rather than annual pricing,
given the volatility of the price. Within the past year, retail gas prices have ranged from nearly
$4 per gallon last summer to $1.80 in January 2009.More frequent pricing will come closer to
replicating market conditions. [[#2071.1 p.7]]
Document No.: EPA-HQ-OAR-2005-0161-2172
Organization: Minnesota Soybean Processors
Comment:
The commenter (2172) is opposed to the submission of Confidential Businesses Information
regarding the pricing of Renewable Fuel Identification numbers (RINs).
Our Response:
A group of commenters suggested that EPA track emissions of specific gallons of
renewable fuel and that the RIN number be increased to provide a means for expanding RIN
pathway information collected. The RIN system has been developed to verify the production
(and presumed use) of the different categories of renewable fuels required by the RFS2
standards. Any additional use of the RIN for greater differentiation of environmental
performance of renewable fuels is beyond the scope of this rule.
Another commenter suggested that EPA set a cap, or ceiling, on the price of RINs in
RFS2 and further suggested that EPA make paper RINs available at the ceiling. The RIN
concept was developed as a market based system where RIN price has the potential to drive
desirable outcome through the economic incentives associated with supply and demand. That is,
a higher RIN price would foster development of the renewable product that is associated with
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RFS2 Summary and Analysis of Comments
that RIN. Additionally, EISA only provides for EPA generated credits for use with the cellulosic
biofuel standard and only for the situation where EPA has determined that a given year's
cellulosic standard will not be met and sets an adjusted cellulosic standard. There are general
waiver provisions that may be used in cases of localized, State, or national economic hardship
should conditions warrant such an action.
A majority of commenters stated their opposition to the collection of RIN price data with
transaction submissions, due to Confidential Business Information (CBI) concerns, other services
being able to provide this information, marketplace delays and undue stress on the EMTS from
disagreements in RIN Price. EPA decided that the price information has great programmatic
value because it will help us anticipate and appropriately react to market disruptions and other
compliance challenges, assess and develop responses to potential waivers, and assist in setting
future renewable standards. In addition, EPA decided that highly summarized price information
(e.g., the average price of RINs traded nationwide) may be valuable to regulated parties, as well,
and may help them to anticipate and avoid market disruptions. Also, EPA will not require the
matching of the exact RIN price to alleviate the burden of resubmission due to price mistakes.
However, the price information must be accurate rounded to the nearest cent (US Dollar) at the
time of sending the transactional information to EMTS. With regard to concerns about handling
of information claimed as CBI, EPA acknowledges that some information required to be
submitted under the RFS2 regulation, including individual price information and certain other
aspects of RIN transactions, may be claimed as CBI by the submitter. EPA is required to treat
such information in accordance with our regulations at 40 CFR part 2. In addition, EPA has
issued guidelines and policies for handling of information claimed as CBI in order to implement
these regulations.
4.3 Reporting and Attest Engagements
4.3.1 EMTS
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) notes that the proposed rule requires a list of all RINs used for
compliance and that Section 80.1452(c) (1) (iii) (E) also requires this list. The commenter
recommends that this redundancy be removed by restating §80.1452(a)(l)(x) to reference the list
provided in §80.1452(c)(l) (iii) (E). [[Docket number 2233.2, p. 14]]
The commenter recommends that EMTS be designed with the capability to accept and
requirement to submit the obligation report information within its framework. The obligated
parties transportation fuel production volume, resulting RVOs, and deficit RVOs are all that
remain for EMTS to capture so that all RFS reporting information is in a common system.
[[Docket number 2233.2, p. 14]]
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Document No.: EPA-HQ-OAR-2005-0161-2135
Organization: Ad Hoc Coalition of Small Business Refiners (SBR)
Comment:
The commenter (2135) adds that they would support a RIN transaction environment in which a
sophisticated, well-managed and enforced EMTS became the central distribution point for
Producer/Importer RINs mandatorily transferred directly into it for subsequent distribution/sale
only to Obligated Parties. SBRs agree that the purchase of separated RINs should be restricted
to obligated parties only. Allowing non-obligated parties to purchase segregated RINs can lead
to increased market price volatility, speculation and perceived market longs/shorts, none of
which furthers compliance with the Reformulated Fuels Standard. [[Docket number 2135.1, p.
22]]
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
The commenter (1044) opposes the provision for a Federally run trading platform and believes
this is a responsibility of private business and not that of government. The commenter points out
that there are no other government run trading boards. (1044, p. 3)
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) believes that Part (e) (3), which requires that after EMTS starts,
obligated parties will have to report within 3 days to the transaction, is unworkable.
Document No.: EPA-HQ-OAR-2005-0161-2172
Organization: Minnesota Soybean Processors
Comment:
The commenter (2172) believes EPA could allow for a greater time period, 10 days, before a
renewable fuel producer has to transfer RINs thus allowing time for payment to occur.
Our Response:
A commenter suggested that we eliminate the requirement of listing RINs used for
compliance and that we build the capability to accept obligated party information into the EMTS
framework. The Agency is adopting EMTS for RFS2 RIN generation activities and for
transactions involving RFS2 RINs. While the use of EMTS will reduce the burdens on most
regulated parties, including obligated parties, it does not replace all functions of quarterly and
annual reports submitted through CDX. EMTS will eliminate the need to list RFS2 RINs used
for compliance, but it will not manage deficits and RVO calculations.
Regarding the comment that EMTS be the basis for a direct RIN transfer system, EPA
addressed a number of alternative options in the FRM preamble. It was determined that given
the significant challenges associated with a change to the requirement that RINs be transferred
with volume and the opposing views among stakeholders, we would not make any changes.
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RFS2 Summary and Analysis of Comments
A commenter opposes a federally run trading platform pointing out that this is a function
for the private sector. The characterization of EMTS as a trading platform is a misconception.
Implementation of EMTS incorporates requirements necessary to confirm RIN generating
activities and transactions, thus ensuring overall compliance with RFS2. EMTS does not broker
transactions, nor does it post holdings of RIN accounts; the information submitted to EMTS is
based on commercial transactions that have been completed and are documented by PTDs.
EPA has concluded that five days, or a business week, is an appropriate amount of time
for both parties to receive or provide necessary documentation in order to interact with EMTS
accurately and timely. "Real time" will be defined as within five (5) business days of a
reportable event (e.g., generation and assignment of RINs, transfer of RINs).
4.3.2 Monthly Reporting
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) believes that reporting should remain quarterly. Monthly reporting will
not provide adequate time for obligated parties to complete RIN tracking/reconciliation with
counterparties - it barely works with quarterly reporting now.
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
If, as the commenter (2393) recommends, EMTS is implemented concurrently with RFS2
startup, no increased reporting frequency is justified. RFS2 should not start up without EMTS to
avoid having to create a temporary, interim RFS2 system that will be wasteful of resources, both
those of industry and of EPA. [[Docket number 2393.1, pp. 13-14]]
Document No.: EPA-HQ-OAR-2005-0161-2400
Organization: Murphy Oil USA, Inc.
Comment:
The commenter (2400.2) prefers to keep the reporting on a quarterly basis to ensure accuracy and
preciseness of reports submitted to the EPA. If the EPA were to need any data for statistical
purposes, they will have real-time information, especially with EMTS which should eliminate
the need for monthly reporting. (2400.2, p.9 and p.l 1)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) opposes increasing the reporting frequency from quarterly to monthly.
EPA should strive to align the roll out of the EMTS system with the implementation of the RFS2
regulations. There is no justification to increase the reporting requirements simply because EPA
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has failed to both finalize the RFS2 regulations and to roll out the EMTS in a timely manner.
[[Docket number 2233.2, p. 14]]
Document No.: EPA-HQ-OAR-2005-0161-2341
Organization: Noble Americas
Comment:
The commenter (2341) believes that monthly reporting substantially increases the cost of
reporting and should not be required. If it is required, the deadline for reporting should be 60
days after the end of the month (rather than 30 days) to allow sufficient time to reconcile and
perfect the data. The commenter believes that EPA should also consider elimination of quarterly
transaction reporting (RFS0200) once the EMTS system is fully operational in year two. (2341,
p.2)
Document No.: EPA-HQ-OAR-2005-0161-2154
Organization: ConocoPhillips
Comment:
The commenter (2154.1) noted that even if there ends up being a timing disconnect between the
implementation of the rule requirements and the initiation of the EMTS, monthly reporting is not
warranted. At a minimum, monthly reporting should only apply to renewable producers as the
accuracy of the RIN information is critical to the system. (2154.1, p.7)
Document No.: EPA-HQ-OAR-2005-0161-2155
Organization: Petroleum Marketers and Convenience Stores of Iowa (PMCI)
Comment:
The commenter (2155.1) believes that given the relatively short period of time until the
implementation of the EMTS, EPA should continue with quarterly reporting. Monthly reporting
will not solve RIN validation issues. (2155.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) does not support a monthly reporting requirement for 2010 as a lead in to
the EMTS. [[Docket number 2130.1, p. 9]]
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that monthly reporting should not be required in 2010 for all
RIN-owning parties. The RFS2 regulations will be effective when the EMTS is activated,
probably 1/1/11. Therefore, there is no need to submit monthly reports when EMTS is
operational. (2124.1, p.34)
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
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RFS2 Summary and Analysis of Comments
The commenter agrees with EPA's proposal to provide faster and more efficient validation of
RINs. Although the commenter does not believe EPA can implement the RFS2 for an effective
date of January 1, 2010, the commenter does not oppose requiring monthly transaction reports
until the EMTS is operational. Parties should be able to adjust their reporting from quarterly to
monthly without significant burden, and it would provide EPA with information sooner to
validate RINs to avoid the problems with finding potential problems down the road. (2329.1, p.
103)
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
The commenter (1044) states that the increased frequency of reporting is a change that would
invoke a financial burden; however, in the big picture, realizes this important aspect to the EISA
needs support. The commenter hopes the implementation and use of the proposed EMTS system
would shift reporting to an issue of data query by the agency and relieve them of the reporting
issues including attestation. (1044.1, p. 2)
Document No.: EPA-HQ-OAR-2005-0161-2014
Organization: Clean Fuels Clearinghouse
Comment:
The commenter (2018.1) noted that RFS2 will increase reporting frequency from a quarterly time
cycle to monthly in that period of time between RFS2 going into effect and EMTS becoming
operational. Once EMTS is operational, reporting frequency increases to "near real-time", or no
less than every 3 days. The commenter supports such modifications and encourages EPA to
adopt the rule as proposed in these areas. The commenter believes that the proposed increased
reporting frequency does not address the demand side of the economic balance, leaving obligated
parties to an annual reporting frequency. The commenter recommends that EPA increase the
reporting frequency for obligated parties.
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that monthly reporting should not be required in 2010 for all
RIN-owning parties. The RFS2 regulations will be effective when the EMTS is activated,
probably 1/1/11. Therefore, there is no need to submit monthly reports when EMTS is
operational. (2124.1, p.34)
Document No.: EPA-HQ-OAR-2005-0161-2172
Organization: Minnesota Soybean Processors
Comment:
The commenter (2172) believes that producer of renewable fuel be required to submit batch RIN
transaction reports on a monthly basis for 2010 is extremely burdensome for MnSP and other
regulated parties, EPA states that the reason for these reports is to assist parties in indentifying
errors before the errors result in violations(s). MnSP does not believe that an increased
frequency in reporting is needed or warranted and suggests that any RINs generated prior to
EMTS implementation could trade under a separate category and disclosure since RIN traders
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using EMTS has the ability to instantly determine if the RINs being traded were created before
EMTS and thus poses a greater risk.
Our Response:
The NPRM discussed changing the frequency of reporting for RFS2 RIN generation
activity and transactions from quarterly to monthly, in the event that EMTS would not be
available for use at the start of the program. EMTS will be available and its use will coincide
with the start of the RFS2 program.
EPA acknowledges that some information required to be submitted under the RFS2
regulation may be claimed as CBI by the submitter. EPA is required to treat such information in
accordance with our regulations at 40 CFR Part 2. In addition, EPA has issued guidelines and
policies for handling of information claimed as CBI in order to implement these regulations.
4.3.3 Additional Reporting Information
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) questions EPA's proposal to further burden terminal operators and others
in the distribution system with new reporting requirements. It is unclear what information these
parties could give the EPA that would provide useful or new information not already available to
EPA through EIA's Petroleum Supply Monthly data. [[Docket number 2233.2, p. 15]]
Document No.: EPA-HQ-OAR-2005-0161-2014
Organization: Clean Fuels Clearinghouse
Comment:
The commenter (2018.1) suggests that EPA should consider requiring an "estimated" RFS0300
report each quarter with the accompanying RFS0200 and associated "USE" records. A final
RFS0300 report would be made then on an annual basis. This could be set up similar to the
quarterly estimated tax approach utilized by the IRS and required of corporations where prior
year obligations would serve as the quarterly basis. (2018.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2014
Organization: Clean Fuels Clearinghouse
Comment:
The commenter (2018.1) recommends that EPA require a reporting of the last batch number used
by either a producer or importer of renewable fuel during the first interim period (RFS1). This
last batch number would then be made publicly available on the transition date and would be
utilized by industry to self monitor and assure that subsequent batches under RFS2 were
generated at a batch number greater than that reported. (2083.1, p.l)
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RFS2 Summary and Analysis of Comments
Document No.: EPA-HQ-OAR-2005-0161-2471
Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter (2471.1) believes that EPA should provide clear guidance to producers that
propose certain documentation or records to demonstrate that their fuel meets the qualifying
criteria. There are likely various existing forms of documentation upon which EPA can rely and,
thus, limit the potential documentation burden created by EISA and the proposed RFS2
regulations. (2471.1, p. 13)
The commenter also believes that EPA should use reports under RFS2 both to ensure parties'
compliance and to monitor the overall health of the program. While the commenter does not
endorse the establishment of position limits or caps on the total number of unassigned RINs that
a party may buy or hold, they do believe that, in a tight RIN market, EPA should scrutinize
reports to prevent obvious attempts to hoard RINs or to manipulate the market. (2471.1, p. 15)
The commenter noted that regulated parties generally have struggled to identify the correct
"transaction date" for RIN Transaction Reports under RFS1. This issue is not inconsequential,
as the choice of transaction date can influence whether a party maintains compliance with the
quarterly balancing requirements for assigned RINs. The commenter believes that EPA should
clarify this ambiguity by adopting as a default position that the "transaction date" is the date of
the product transfer document or other document (e.g., invoice) that conveys RINs from buyer to
seller. (2471.1, p. 17)
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter (2383) is concerned about EPA's proposed section 80.1452(e)(2)(xi) that
renewable fuel producers must now report "the type and volume of co-products produced" with
each batch of renewable fuel. This proposed requirement is burdensome, costly, and
unnecessary D-code classification is not linked to the level of co-product produced at a facility
and reporting the quantity of co-product production serves no regulatory purpose under EISA.
[[Docket number 2383.1, p. 59]]
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) believes that EPA needs to rethink the concept of the Batch Report.
The supposition that every gallon of renewable fuel in a tank with assigned RIN numbers will be
sold or will be sold as renewable fuel is faulty. Having to assign a batch RIN number for the
total batch volume will create extra work, requiring facilities to assign RIN numbers and then
retire RIN numbers for non fuel sales and for tank heel volumes. Under RFSI, assigning RIN
numbers prior to a renewable fuel sale was simple and avoided having to generate and retire RIN
numbers for fuel volumes that were not part of the renewable fuel program. (0994.1, p. 11)
The commenter noted that EPA will have to create a new RIN Retire code to deal with the
circumstance when RINs are retired because a heel volume is not sold from a tank, and that heel
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becomes part of the next batch created in that tank. While the commenter sees many advantages
of the EMTS, the Batch Report causes facilities to generate more transactions to retire RINs than
in RFS1. If retiring RINs becomes a significant burden, facilities will generate a Batch Report
for each single sale in which the batch volume and RIN number are tied to that single sale. The
commenter also noted that Producers will have to have two accounts in the EMTS RIN Bank:
one account will be for valid Generated RINs (from Batch Reports) and one account for
Separated RINs. (0994.1, pp.11-12)
The commenter rejects the idea of requiring all the additional information on the RIN Generation
Report. These results can always be verified by examining the feedstock purchase orders and the
test results from the biofuel made from these purchases as part of the attest engagement. The
request for additional information such as co-products produced have nothing directly to do with
verification that the feedstock is qualified to produce the specified category of biofuel. The RFS
reports need to be kept as simple as possible. (0994.1, p. 12)
The commenter rejects the requirement that feedstocks need to be certified that they are the
proper feedstocks for the specified category of biofuel product. The commenter also rejects the
statement that a renewable fuel producer who makes renewable fuel that does not qualify under
RFS2 must report this fuel and state why it does not qualify. If a producer makes a product that
does not use approved feedstocks and does not produce a fuel that qualifies under one of the four
(or 6) D codes, then the product is not renewable fuel. Therefore this product does not need to
be reported at all to the EPA. (0994.1, pp.12-13)
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter noted that EPA should clarify the rules for retiring RINs. The rules do not
address the situation where a party exports cellulosic renewable fuel, or advanced renewable
fuel. (2505.2, p.9)
Document No.: EPA-HQ-OAR-2005-0161-1969
Organization: SeQuential-Pacific Biodiesel
Comment:
The commenter (1969) states that as a Renewable Fuel Producer committed to sustainable
Biodiesel production from renewable resources, they have been fortunate to survive this
economic contraction. A huge piece has been the added value of the Renewable Identification
Numbers (RINs). The small but steady RIN revenue stream allowed the commenter to keep our
doors open and prevent a complete plant shut down and lay offs. In recent months they have
seen the value of the RINs decrease sharply. One of those factors is the rule that obligated
parties are only required to report RINs on an annual basis. This creates an uneven demand for
RINs throughout the year. The commenter strongly encourages EPA to change the reporting
requirements of obligated parties so they are identical with the responsibilities of renewable fuel
producers. Quarterly reporting would create a level playing field for both obligated parties and
renewable fuel producers thus smoothing the volatile market prices. [[Docket numbers 1969.1, p.
1 and 2027, p. 1]]
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RFS2 Summary and Analysis of Comments
Document No.: EPA-HQ-OAR-2005-0161-1033
Organization: Poet Ethanol Products
Comment:
The commenter (1033.1) finds that the reporting of the volume and type of co-products produced
with the renewable fuel to be ancillary to the determination of the fuel pathway the renewable
fuel qualifies for and poses an additional layer of complexity to the reporting process for
Producers which is unnecessary. The commenter respectfully submits that this item be removed
from the Recordkeeping Requirements for Renewable Fuel Producers. (1033.1, p.3)
Our Response:
Several commenters expressed concern for additional reporting burdens associated with
RFS2. Some referenced alternate means of collecting data such as EIA's monthly data reports.
However, in order to enforce the requirements of EISA and RFS2, EPA must be able to confirm
claims of individual renewable producers for the products they make, the feedstocks they use and
the processes employed. Part of the assessment includes reviewing co-products generated which
were considered during EPA's life cycle assessment. We are requiring that co-product
production be identified for each batch of renewable produced, and that each quarter the volumes
of co-product produced at a facility be reported by co-product type.
Some commenters suggested that EPA require obligated parties to demonstrate quarterly
use of RINs for compliance. Such a requirement, while it may provide for more constant
demand for RINs, conflicts with the statutory requirement for an annual compliance program.
The Clean Fuels Clearing House suggested that EPA require reporting of the last batch
number used by a producer or importer and that EPA publish this information for industry self
monitoring. EPA understands the potential utility of such information, but after considering the
added burden of this one-time data collection and limitations for a practical implementation -
modifications of RFS1ICR, conflicting collection methods with EMTS, and limited resources,
EPA chose not to pursue this idea.
A comment regarding the use of EMTS data to monitor hoarding is being considered for
future development. The same commenter suggested that EPA clarify the definition of
"transaction date." Just as with RFS1, the date of the commercial document (PTD) which
transfers ownership of RINs from one owner to another is the date that shall be used by both the
buyer and seller of RINs.
A commenter suggested that EPA reconsider the concept of a batch. We believe that the
definition of a batch, as carried over from RFS1, provides RIN generators with a range of
flexibility to accommodate a variety of process methods (i.e., generating RINs in a batch tank or
generating RINs as product is being shipped out of the facility. The same commenter suggested
that new RIN retirement codes need to be incorporated into the EMTS system, however the
producer may want to examine whether or not it makes sense to align RIN generation with
volume that is leaving the facility. The commenter is also correct that a RIN owner with have
separate accounts for assigned and separated RINs. Finally, the commenter suggested that
feedstocks do not need to be certified. The statutory requirements that are the basis for RFS2
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require such certification. EPA has taken steps to ease the burdens of certification where
practicable.
A commenter suggested that EPA clarify rules for exporters separating RINs.
The FRM preamble discusses the requirements for exports given the fungible nature of RINs.
The exporter will determine its RVO based on the type of renewable and the volume being
exported.
4.3.4 Attest Engagements
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that the proposed attest engagement requirements should be
greatly minimized by EMTS, in particular noting the attest of the PTDs and transactions between
the transferor and transferee. The commenter believes that the RFS2 regulations should be
flexible when requiring information submission to EPA within a short period of time after a
renewable fuel is produced or imported. (2124.1, p.35)
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
The commenter also provided public testimony regarding the hopefulness that this system would
eventually become a data inquiry system and alleviate the burden of reporting and the attestation
audits. Furthermore, the commenter suggests EPA consider a "vesting" program for data entry
to ensure future compliance with the renewable fuels producers and hopes this will build
relationships and foster a sense of trust between all regulated parties and the Agency. (1044.1, p.
3)
Document No.: EPA-HQ-OAR-2005-0161-2145
Organization: Flint Hills Resources
Comment:
The commenter (2145.1) believes that the attest requirements as proposed in '80.1464 for an
obligated party should be modified to exclude the attestation of RIN transaction reports. The
commenter also noted that the attest requirements in §80.1464 say "The requirements regarding
annual attest engagements in §§80.125 through 80.127, and 80.130, also apply" to these RFS2
attest procedures. Since §§80.125 and 80.130 are limited in scope to refiners and importers,
§80.1464 should be revised to account for that. The lead-in sentence of §80.1464 could be
reworded: "As the requirements regarding annual attest engagements in §§80.125 through
80.127, and 80.130 apply to refiners and importers in Subpart F, so do those requirements also
apply to obligated parties, exporters, renewable fuel producers, RIN-generating importers, and
other parties owning RINs with regard to any attest engagement procedures required under this
Subpart M." (2145.1, pp.7-8)
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RFS2 Summary and Analysis of Comments
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2), with regards to EPA's proposal to require auditors to attest PTDs,
believes that it is duplicative and overly burdensome to require this for parties that receive PTDs.
In addition, given the EMTS system, it appears that the attestation requirements will no longer be
necessary and should be eliminated. (2505.2, p. 13)
Our Response:
Commenters suggested that with the use of EMTS, that Attest requirements could be
eliminated or greatly reduced. The purpose of the Attest is for EPA to receive third party
verification of information submitted to EPA as well confirmation that records required to be
retained by the regulated community are being kept. While the requirements for RFS2 reports
have changed from RFS1 and the introduction of EMTS will simplify some data transactions and
will result in data of better quality, the requirement for third party verification must still be met
through the Attest process.
4.4 Product Transfer Documents (PTDs)
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter believes that EPA needs to drop its proposal that PTDs contain complete RINs.
[[Docket number 2233.2, p. 9]]
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that RIN numbers should not be required to appear on a PTD
in their entirety. PTDs should be required to show the number and type of gallon-RINs being
transferred, but not all 38 digits. The commenter believes that these proposed regulations could
cause problems when the PTD shows 38 digits that do not match the RINs transferred within
EMTS. (2124.1, p.34)
Document No.: EPA-HQ-OAR-2005-0161-2145
Organization: Flint Hills Resources
Comment:
The commenter (2145.1) believes that Renewable fuels PTDs should not be required to duplicate
information already entered into the EMTS. The proposed regulations require the 38-digit RIN
(reference §80.14538) and the number of RINs by type and RIN generation year (reference
§80.1453(d)). The renewable fuel PTD should only be required to show the quantity of RINs
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being transferred. A replication of any of the data contained in the EMTS is unnecessary
especially the 38-digit RIN as it will always be prone to error. One of the most significant
benefits of the EMTS is the elimination of transcription errors and this benefit should not be lost.
The commenter also believes that no additional PTD documentation for separated RIN
transactions should be required other than what is contained in the EMTS. (2145.1, p.7)
Document No.: EPA-HQ-OAR-2005-0161-2400
Organization: Murphy Oil USA, Inc.
Comment:
The commenter (2400.2) believes that with the implementation of EMTS, EPA should only
require the volume of RINs transferred to be stated. There is no need to continue to incorporate
the entire 38-digit RIN on any invoice or PTD. Requiring the 38 digit number be present on the
PTD could create an issue if the number is incorrectly printed or does not match the RIN number
within the EMTS system. Other than the number and type of gallon-RINs being transferred, no
additional information is needed on the PTD. The commenter recommends that the PTD or
invoice only contain the number of RINs being transferred as stated in the EMTS section (IV.
E.2). (2400.2, p.13)
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) believes that EPA should eliminate the requirement for renewable fuel
producers to provide a PTD the "same day" as they transfer title to the renewable fuel.
Experience under the RFS1 program suggests that this is an unnecessary and impractical
requirement. This PTD requirement will be especially unworkable for foreign renewable fuel
producers. The commenter proposes that EPA require "timely" delivery of PTDs or "within 10
business days". (2505.2, p.9)
The commenter believes that once EMTS is in place, regulated parties should not be required to
send each other PTDs. After EMTS, the rules should provide that all that is required to be sent
to a counter party is reference to the EMTS activity ID number. (2505.2, p.12)
Our Response:
With the implementation of EMTS, EPA agrees that parties trading Renewable
Identification Numbers (RINs) will no longer need to include the RIN in its entirety on a Product
Transfer Document (PTD). However, in order to complete an EMTS RIN transfer, certain buy
and sell transaction elements must match. Therefore, a PTD must be used to transfer generic
RINs with identifying transactional information used for matching. EPA has removed the
requirement for parties to include the RIN in its entirety on a PTD, but RIN identifying
information must be included on a PTD, such as RIN type, generation year, and assignment.
EPA maintains that a PTD must be used to transfer ownership of assigned and separated
RINs. A product transfer document is the physical document where renewable fuel and RIN
ownership are transferred between parties. While EMTS buy and sell transactions contain an
optional PTD field for a user specified PTD number, EMTS does not generate PTD numbers.
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RFS2 Summary and Analysis of Comments
The optional PTD number element can assist both trading parties match records with EMTS
transactional information and reports for annual attest engagements.
EPA maintains that if assigned RINs are being transferred separately from the PTD
transferring a volume of renewable fuel, then the document listing the assigned RINs must be
provided to the same person on the same day as the PTD used to transfer ownership of the
volume of renewable fuel. Assigned RINs may not be transferred without simultaneously
transferring a volume of renewable fuel.
4.5 Recordkeeping
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2112
Organization: Biomass Rules, LLC
Comment:
The commenter (2112.1) believes that producer record keeping requirements are not cost-
effective and are difficult to enforce. (2112.1, p. 13)
Our Response:
EPA maintains that the recordkeeping requirements in RFS2 are necessary to support
enforcement of the proper generation and use of RINs for compliance purposes. Furthermore,
we believe that most parties would keep basic records regarding their products and RINs, and
records regarding transactions involving their products and RINs, in the normal course of
business.
4.6 EPA Moderated Transaction System (EMTS)
4.6.1 General Comments
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2014
Organization: Clean Fuels Clearinghouse
Comment:
The commenter is in support of the EMTS concept and encourages EPA to take a much more
active role in the initial generation of RINs as well as the clearing of RIN transactions between
principal parties. Without involvement and enforcement by EPA the number of erroneous and
fraudulent RINs will continue to propagate. (2019.1, p.l) [[See Docket Number 2019.1, pp.1-2
for additional specific comments regarding regulatory text responding to EMTS]]
The commenter provided detailed comments on the issues related to the duplication of renewable
fuel credits, known as RINs, and their detrimental effect on the effectiveness of the renewable
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fuel standard. Such occurrences are frequent and have a very costly impact on legitimate biofuel
producers and considerable exposure to liability on behalf of the obligated parties under these
regulations. (2319.1, p.l) [[See Docket Number 2319.1, pp.1-2 for a discussion on this issue of
duplication of RIN credits]]
The commenter (2014.1) provided specific comments regarding regulatory text responding to the
EMTS and invalid RINs. [[See Docket Number 2319.1, pp.3-6 for these detailed comments]]
Document No.: EPA-HQ-OAR-2005-0161-2135
Organization: Ad Hoc Coalition of Small Business Refiners (SBR)
Comment:
The commenter (2135) supports EPA's recognition that improvement is needed in screening and
tracking RIN credits. The proposed EPA-Monitored Transaction System (EMTS) offers a viable
approach that would maintain basic RIN handling requirements from RFS1 and presumably
bring greater integrity to the market. A strong policing system, of course, should be an essential
element of such a mechanism. [[Docket number 2135.1, pp. 21-22]]
Document No.: EPA-HQ-OAR-2005-0161-2154
Organization: ConocoPhillips
Comment:
The commenter (2154.1) supports EPA's development of the EMTS. This system, when
implemented, will help alleviate the burden of tracking RIN transactions and hopefully reduce
complication of non-legitimate RINs in the marketplace. However, it is imperative that the
EMTS recognize the time requirements to verify data and transactions. The commenter believes
the EMTS tool can reduce the perceived complications of placing the obligation with final fuel
providers. EPA should be designing the EMTS to accommodate this approach. (2154.1, p.6)
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
The commenter (2157) supports EPA's decision to build on the current RFS1 program, as well as
to move toward an EPA moderated trading system. The commenter also supports various
proposals by EPA, which it believes would improve renewable fuel producers' ability to compete
in the RIN market, but believes there is ample access to RINs and rejects attempts by EPA to
become a market regulator. (2157 p. iv)
Organization: Independent Fuel Terminal Operators Association (IFTOA).
Comment:
The commenter (2345) believes the EPA EMTS could be a system that would provide the
regulated community with the needed information and transparency regarding RIN transactions
to facilitate a more liquid RIN market. The commenter provides recommendation to EPA for
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RFS2 Summary and Analysis of Comments
making EMTS as useful as possible. [[Docket number 2345.1, p. 2]] [[See docket number
2345.1, pp 2-3 for the EMTS recommendations.]]
Document No.: EPA-HQ-OAR-2005-0161-2345
Document No.: EPA-HQ-OAR-2005-0161-2369
Organization: New Generation Biofuels (NGBF)
Comment:
Regarding the Renewable Identification Numbers questions and approaches outlined in the
preamble, the commenter (2369) supports separating RINs from the biofuel and an EPA
Moderated Transaction System. In the electricity market, Independent System Operators (ISO)
frequently manage the renewable electricity credits (REC) trading. Entities that participate in the
REC market through the ISOs, generated the credits or need them for compliance. Within such
systems, there are few speculators or marketers who may participate. The commenter believes
that a similar system in the fuels market whereby the RINs are separated from the fuel and sold
in the platform managed by the EPA through an EPA Moderated Transaction System appears to
be logical, especially if the participants are limited to those who generate and sell RINs and those
who need to purchase RINs. [[Docket number 2369.1, p. 5]]
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter (2383) supports EPA's proposed use of the EMTS for tracking RINs. The
commenter believes use of EMTS will help eliminate certain errors related to using and tracking
individual RINs, eliminate administrative errors, and should help save time and resources.
Early-stage screening will help ensure that RINs are valid, and EPA's proposal that RIN records
move toward generation in "real time," when renewable fuel is produced, would alleviate some
of the problems with delayed reporting under the current system. The commenter also supports
EPA's proposal to allow parties to opt-in to EMTS in 2010. [[Docket number 2383.1, p. 60]]
Document No.: EPA-HQ-OAR-2005-0161-2472
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter fully supports continuation of the 38 digit RIN-structure. This current
methodology can easily manage all expected changes associated with RFS2 (i.e., revising D
codes) and will minimize the cost to all users by avoiding costly IT infrastructure restructuring.
(2124.1, p.29)
Organization: Valero Energy Corporation (Valero)
Comment:
The commenter (2472) does not support the proposed EPA-moderated RIN trading system as a
vehicle to facilitate RIN purchases and sales beyond the voluntary listing of contact information
by buyers and sellers. [[Docket number 2472.1, pp. 4-5]]
Document No.: EPA-HQ-OAR-2005-0161-2105
Organization: Small Business Administration, Office of Advocacy
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Comment:
The commenter (2105.1) believes that EPA should report on the feasibility of the RIN trading
system. While the EPA plans to create an automated, real-time system, it does not yet exist.
Until such a system is in full operation, the incidence and cost of reporting error is likely to
increase as blending requirements increase dramatically under RFS2. The commenter requests
an analysis of the RIN system in order to better understand the market and its feasibility and
efficiency. (2105.1, p.5)
Our Response:
We introduced the EPA Moderated Transaction System (EMTS) in the NPRM as a new
method for managing the generation of RINs and transactions involving RINs, designed to
resolve the RIN management issues of RFS1 that lead to widespread RIN errors, many times
resulting in invalid RINs and often tedious remedial procedures to resolve those errors. In
response to the generally broad acceptance of the EMTS concept, we are instituting the use of
EMTS for all RFS2 RIN generation and transactions beginning July 1, 2010.
We believe that EMTS will significantly reduce the number of invalid RINs that have
been generated - inadvertently, in many cases - under RFS1. In cases in which invalid RINs do
make their way into EMTS, we have designed the system in such a way as to enable EPA to take
corrective action swiftly, as several of the commenters have emphasized is necessary. We
disagree with the comment that EPA is attempting to act as a market regulator with the
institution of EMTS. Rather, we view EMTS as offering a neutral platform through which RIN
transactions can be carried out with reduced burden on industry. While the 38-digit RIN
information will remain intact as the basis of EMTS transactions, the system will conduct these
transactions in a more generic, and therefore simpler, way than has been done under RFS1.
4.6.2 PTD and Attest Engagements Under RFS2
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2154
Organization: ConocoPhillips
Comment:
The commenter (2154.1) believes that there should be no need for the entire 38 digit RIN to be
on the PTD. Also, the attestation requirements should be simplified due to the presence of
EMTS. (2154.1, p.7)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) states that, under the EMTS environment, the RIN should not be required
on the PTD. [[Docket number 2233.2, p. 11]]
Our Response:
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RFS2 Summary and Analysis of Comments
While we believe that EMTS will simplify and reduce burdens on the regulated
community, it is important to point out that EMTS is strictly a RIN tracking and managing tool
designed to facilitate reporting under the Renewable Fuel Standard program. Product transfer
documents are the commercial documents used to memorialize transactions of RINs between a
buyer and a seller in the market. The EMTS will rely on references to these documents, which
can take many forms, but it is not capable of replacing those documents. In addition, the entire
38-digit RIN will not be required to be listed on the PTD as the generic RIN information is
sufficient as long as both parties accept the trading of RINs on a generic basis. Attest
engagements are used to verify that the records required to be kept by regulated parties,
including information retained by a regulated party as well as information reported to EPA such
as laboratory test results, contracts between renewable fuel/RIN buyers and sellers, feedstock
documentation, etc. is correctly maintained or reported. The information reported via EMTS is
but a subset of the information required to be maintained in a regulated party's records, and both
PTDs and attest engagements are necessary to ensure that the information collected and tracked
in EMTS concurs with actual events.
4.6.3 Start-up of EMTS
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) supports a mandatory start date for EMTS coincident with the rest of
RFS2 which they presume [per the commenter's comments in Chapter 2 of this Summary and
Analysis of Comments document] will be January 1, 2011. [[Docket number 2393.1, p. 12]]
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) supports the proposed Moderated Transaction System (EMTS) and urges
EPA to keep the program on schedule and to require its use as soon as possible by all parties who
hold or transact RINs. [[Docket number 2130.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) supports a January 1, 2011 start date for EMTS and the alignment of the
RFS2 implementation date with the EMTS start date. A fter EMTS has been in place for a year,
EPA should review the RFS and RFS2 regulations and drop any requirements that are no longer
warranted. The commenter also believes that once the EMTS is in place, EPA should review and
simplify the attest engagement requirements. [[Docket number 2233.2, p. 11]]
Document No.: EPA-HQ-OAR-2005-0161-2249
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Organization: National Biodiesel Board (NBB)
Comment:
While the commenter (2499.2) generally supports EPA's proposal to move toward an EPA
moderated transaction system, however they have concerns regarding the implementation. The
commenter would like EPA to be aware of the IRS requiring our members to become active
participants in the ExStars system, which is designed to report the sale of taxable biodiesel. To
reduce the implementation burden, the commenter asks EPA to consider EMTS implementation
alongside ExStars implementation.
Document No.: EPA-HQ-OAR-2005-0161-2014
Organization: Clean Fuels Clearinghouse
Comment:
The commenter (2014.1) recommends that in the event of a mid-year implementation of RFS2
that EPA take additional steps to accelerate the implementation of EMTS to coincide with the
same date. In the event that the entire EMTS system could not be made active on the same date
as RFS2, then as a minimum the priority should be placed on making that portion of EMTS that
addresses renewable biomass and RIN batch generation active and fully functional on the RFS2
effective date. (2083.1, pp.1-2)
Document No.: EPA-HQ-OAR-2005-0161-2017
Organization: Aloha Petroleum, Ltd.
Comment:
The commenter (2017.1) endorses a "closed" system for RIN transactions and management as
the EPA proposes. The initiation of this new RIN management system should coincide with the
start of the RFS2 program. Sufficient time should be allotted for companies to purchase and
install new hardware and software programs, train personnel and learn the new system. In fact,
starting the EMTS system prior to RFS2, even if only in "beta" mode, would be helpful in
making the transition from the current system to EMTS. (2017.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2471
Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter (2471.1) noted that the Proposed Rule indicates that if EMTS is not in place at
the start of RFS2, parties will be required to file reports similar to the current process under
RFS1, but on a monthly rather than a quarterly basis. The commenter disagrees with this
proposed change in the reporting schedule. Monthly reporting frequency is impossible in the
present 38-digit code system due to on-going problems with invalid RINs and transfer delays,
which in turn have required parties to continuously revisit and re-file their RFS1 reports. A
monthly reporting requirement will exacerbate these delays and re-filings and will not produce
any commensurate benefit of improvements to RIN integrity. Until EMTS is in place, the
current quarterly reporting timeframes should be maintained. (2471.1, p. 15)
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
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RFS2 Summary and Analysis of Comments
The commenter (2505.2) noted that while the EMTS system will be a helpful new tool,
participation in the program should be voluntary.
Document No.: EPA-HQ-OAR-2005-0161-2172
Organization: Minnesota Soybean Processors
Comment:
The commenter (2172) noted that EPA needs to also be aware that IRS has indicated that
biodiesel producers will most likely be required to participate in the IRS ExStars tax reporting
system, a system using only IRS approved software, which may also place significant demands
on renewable fuel producers IT staff.
Our Response:
We are requiring the use of EMTS for all RFS2 RIN generation and transactions
beginning July 1, 2010. We appreciate commenters' concerns over having sufficient time to
implement the new system, which is why EPA has utilized an open process for the development
of EMTS since it was first introduced in the NPRM, conducting workshops and webinars and
soliciting stakeholder participation in its evaluation and testing. EPA pledges to continue to
work with the regulated community, as a group and individually, to ensure EMTS is successfully
implemented. EPA anticipates that with this level of assistance, regulated parties will not
experience significant difficulties in transitioning to the new system, and EPA believes that the
many benefits of the new system warrant its immediate use. Due to limitations, EPA chose not
to integrate EMTS with IRS ExStars tax reporting system at this time. However, EPA will look
for future integration opportunities.
4.6.4 Timing of Transaction Reporting
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2154
Organization: ConocoPhillips
Comment:
The commenter (2154.1) believes that three days to enter RIN transactional information into
EMTS is not feasible. The commenter thinks a more reasonable approach would be to require
sellers to enter data within 7 days and provide purchasers an additional 7 days (for a total of 14
days following the activity). Given the complexity of the 4 tiers of renewable fuels and
establishment of the new D code, this additional time will be particularly important at the start of
the program. (2154.1, pp.6-7)
Our Response:
In order for EMTS to be a "real time" system, we must require that the information
comes in a timely manner. EPA has concluded that five days, or a business week, is an
appropriate amount of time for both parties to receive or provide necessary documentation in
order to interact with EMTS accurately and timely. "Real time" will be defined as within five
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Chapter 4: Compliance (Registration, Recordkeeping, Reporting)
(5) business days of a reportable event (e.g., generation and assignment of RINs, transfer of
RINs).
4.6.5 Technical Elements of EMTS
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2081
Organization: Novogy, Inc.
Comment:
The commenter (2081) seeks to confirm that RINs generated and for the production and
separation of cellulosic biogas would be eligible to utilize the envisioned EPA monitored trading
system. [[Docket number 2081.1, p. 11]]
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
Although not included specifically in the Proposed Rule but a concern to the commenter (2249)
is the security of the EMTS system. Using node capability may place users at an increased risk
of data misplacement. The information being exchanged is sensitive, and as such the commenter
requests the EPA clarify the potential risks and take steps as necessary to ensure the security of
sensitive data provided in the EMTS system. [[Docket number 2249.2, p. 43]]
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter recommends that EMTS generate a unique transactional ID for each transaction
that which the Transferor may reference in their commercial documentation sent to the
Transferee by which the Transferee will be able to readily match and reconcile with EMTS and
subsequently acknowledge the transaction.
Document No.: EPA-HQ-OAR-2005-0161-2172
Organization: Minnesota Soybean Processors
Comment:
The commenter (2172) also has significant concerns about the security of the EMTS network.
As a large producer of biodiesel, it appears that because of the design of the MnSP computer
network, MnSP will most likely need to become a node on the EMTS network. EPA needs to be
sensitive to the fact that any time a node is placed on a computer network, a potential door for
security breach is opened. MnSP requests that EPA clearly and precisely document to users the
network safeguards that will be used to protect the sanctity of the system.
Our Response:
Under the final RFS2 regulations, EMTS will be the platform for generation of and
transactions involving all RINs beginning with the effective date of the regulations. Therefore,
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RFS2 Summary and Analysis of Comments
RINs associated with cellulosic biogas will indeed be eligible, in fact required, to be exclusively
generated and traded within EMTS.
EPA acknowledges that some information required to be submitted under the RFS2
regulation may be claimed as CBI by the submitter and this includes some data that may be
submitted via EMTS. EPA is required to treat information claimed as CBI in accordance with
our regulations at 40 CFR Part 2. In addition, EPA has issued guidelines and policies for
handling of information claimed as CBI in order to implement these regulations. EPA is
required to develop system security plans (SSPs) that are compliant with our regulations and
with various standards, including the current version of NIST 800-53, related to government
information systems. We are also required to periodically review and update our technical
controls.
We appreciate the comment on the need for a unique ID for each transaction that takes
place within EMTS. We have determined that such information should be part of the record for
each RIN transaction and have added it into the system design.
4.6.6 Batch Reporting Via EMTS
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) believes that EPA needs to rethink the concept of the Batch Report.
The supposition that every gallon of renewable fuel in a tank with assigned RIN numbers will be
sold or will be sold as renewable fuel is faulty. Having to assign a batch RIN number for the
total batch volume will create extra work, requiring facilities to assign RIN numbers and then
retire RIN numbers for non fuel sales and for tank heel volumes. Under RFSI, assigning RIN
numbers prior to a renewable fuel sale was simple and avoided having to generate and retire RIN
numbers for fuel volumes that were not part of the renewable fuel program. (0994.1, p.l 1)
The commenter noted that EPA will have to create a new RIN Retire code to deal with the
circumstance when RINs are retired because a heel volume is not sold from a tank, and that heel
becomes part of the next batch created in that tank. While the commenter sees many advantages
of the EMTS, the Batch Report causes facilities to generate more transactions to retire RINs than
in RFSI. If retiring RINs becomes a significant burden, facilities will generate a Batch Report
for each single sale in which the batch volume and RIN number are tied to that single sale. The
commenter also noted that Producers will have to have two accounts in the EMTS RIN Bank:
one account will be for valid Generated RINs (from Batch Reports) and one account for
Separated RINs. (0994.1, pp.11-12)
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
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Chapter 4: Compliance (Registration, Recordkeeping, Reporting)
The commenter (2499.2) believes that the proposal requiring importers and producers of
renewable fuel to submit batch reports RIN transaction reports on a monthly basis for 2010, is
extraneous and onerous. [[Docket number 2249.2, p. 43]]
Our Response:
We are finalizing our proposed approach to screen and assign RINs at the point when
RINs are generated through production or importation of renewable fuel. However, we will
continue to allow producers and importers to generate RINs at the renewable fuel point of sale as
long as this practice, if adopted by a RIN generator, is applied consistently. We believe that this
allowance will obviate the need for a RIN generator to retire RINs associated with heel volumes
or other volumes of fuel that will not be subject to the regulations under Subpart M.
As for the frequency of report submissions, given that participation in EMTS will be
required of all parties who own RINs beginning with the effective date of the RFS2 regulations
(July 1, 2010), RIN generation ("batch reports") and transaction reports will be due on a
quarterly, not monthly, basis.
4.7 Prohibited Acts and Liability for Violations
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2358
Organization: Society of Independent Gasoline Marketers of America (SIGMA) and the
National Association of Convenience Stores (NACS)
Comment:
Regarding the proposal to impose liability on parties that use or transfer invalid RINs, regardless
of whether the RIN was acquired in good faith, the commenter (2358) believes it is unfair to
impose liability on parties unless they knew or should have known that the RIN was invalid.
Strict liability will discourage parties from participating in the sale of renewable fuels. [[Docket
number 2358.1, p. 11]]
Document No.: EPA-HQ-OAR-2005-0161-2155
Organization: Petroleum Marketers and Convenience Stores of Iowa (PMCI)
Comment:
The commenter (2155.1) questions what type of enforcement actions can the EPA take against a
foreign producer? Even if a supply agreement between Importer and Foreign Producer states
that the Producer will comply and document RFS2 requirements, will not the Importer be the
non-compliant and enforced upon entity by EPA, as opposed to an entity outside of EPA's
jurisdiction? The commenter believes that if ILUC temporarily drops out of this rule-making,
then this issue would most likely be of a lesser concern. The Importer would have to document
that the Producer has complied with the FRARs fuel registration process and meets ASTM
standards. Both are easily done by EPA records review and physical testing of the product.
(2155.1, p.2)
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RFS2 Summary and Analysis of Comments
Document No.: EPA-HQ-OAR-2005-0161-2341
Organization: Noble Americas
Comment:
The commenter (2341) noted that the rules governing the assignment of the advanced categories
are complicated such that errors could result, which would invalidate the RIN. The commenter
believes that rather than invalidate the advanced RIN entirely, it should be instead downgraded
to category 4 (assuming that it meets those lesser requirements). This would partially preserve
the economic value of the RIN and reduce disruptions to Obligated Parties. (2341, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) noted that while the EMTS system will be a helpful new tool,
participation in the program should be voluntary. Where parties purchase RINs that have been
cleared through the EMTS system, they should be able to rely on those RINs and held harmless
if the RIN is later found to be invalid for some reason. The commenter believes that liability for
the invalid RIN should fall on the party that caused the RIN to be invalid, not a party that
innocently acquires an invalid RIN. (2505.2, p.)
Our Response:
Shell Oil, SIGMA and NACS argue that parties should not be liable for invalid RINs that
they receive in good faith. However, EPA believes these enforcement provisions are necessary
to ensure the RFS2 program goals are not compromised by illegal conduct in the creation and
transfer of RINs. As with RFS1, under RFS2 there is no "good faith" provision to RIN
ownership. An underlying principle of RIN ownership is still one of "buyer beware" and RINs
may be prohibited from use and retired at any time if they are found to be invalid. However,
because of the "buyer beware" nature of the program, EPA is offering the option, thought EMTS,
for a RIN buyer to protect themselves by accepting or rejecting RINs from specific RIN
generators or from specific classes of RIN generators.
Commenter Noble Americas argues that improperly generated advanced RINs should not
be invalidated, but should instead be downgraded to a lower category of RIN. EPA believes that
in order to maintain the integrity of the RIN program, improperly generated RINs must be
considered invalid, and, therefore, must be retired. EPA believes that the registration process,
combined with the safeguards in EMTS will greatly limit situations in which a RIN is generated
in an incorrect category.
PMCI questions EPA's jurisdiction over foreign producers of renewable fuel that is
imported into the U.S. In order for a foreign producer to generate RINs under the RFS2, the
producer must commit to allow EPA inspections of their facilities and records, and are subject to
U.S. substantive and procedural laws for civil and criminal enforcement under the Clean Air Act.
If an importer plans to generate RINs for renewable fuel produced by a foreign producer, the
importer is responsible for ensuring that the RINs are properly generated and would be liable for
a violation if the RINs improperly generated.
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Chapter 4: Compliance (Registration, Recordkeeping, Reporting)
4.8 Retail Dispenser Labeling for Gasoline with Greater than 10 Percent Ethanol
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
Depending on the outcome of ongoing DOE/EPA/CRC testing for mid-level blend use in the
legacy fleet, the commenter (2130) states that stronger preventive measures may be needed, as
well as product liability relief to enable E10+ distribution and marketing, or widespread E85 use.
EPA's proposal to require labels on pumps that dispense gasoline with greater than 10% ethanol
content is the minimum mechanism necessary to prevent misfueling. [[Docket number 2130.1, p.
4]]
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) supports the proposal to require a new warning label for marketers who
sell, dispense or offers for sale ethanol blends containing more than 10% v/v ethanol. This label
would advise consumers that such fuel is for use only in flexible fueled vehicles (FFVs), may
damage non-FFVs and warns that putting such fuel into non-FFVs is against federal law. While
the commenter opposes using the label as the sole mechanism to prevent misfueling should EPA
grant a partial waiver, a label is an important communication and educational tool. (2132.1, p.6)
[[See Docket Number 2132.1, pp.15-16 for a detailed discussion on Pump Labeling for E10+]]
Document No.: EPA-HQ-OAR-2005-0161-2135
Organization: Ad Hoc Coalition of Small Business Refiners (SBR)
Comment:
The commenter (2135) believes that refiners and blenders should be held harmless for claims of
damage to engines arising out of increasing ethanol content of gasoline above 10% by volume if
and when such blends are approved for sale and the refiner or blender chooses to fulfill his
obligation for RINs by producing or marketing such product. [[Docket number 2135.1, p. 21]]
Document No.: EPA-HQ-OAR-2005-0161-2143
Organization: New York State Department of Environmental Conservation
Comment:
The commenter (2143) supports EPA's labeling provision and suggests that the exact wording
will have to depend on the outcome of E15 section 211 (f) waiver review. (2143.2, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) is concerned about rolling out large volumes of E85 or a mid level
ethanol gasoline and selling these in the same market as E10. All three fuels will be sold from
dispensers with the same size nozzles, which can be used to fuel either FFVs or standard
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RFS2 Summary and Analysis of Comments
gasoline vehicles. E85 and mid level ethanol gasoline will have to be priced lower than E10, if
large volumes of these fuels are needed for mandate compliance. This lower price will probably
encourage consumers to use E85 and mid level ethanol gasoline in vehicles that will be damaged
by these fuels. [[Docket number 2233.2, p. 19]]
The commenter believes that EPA must undertake a robust public information campaign to
educate the population about the potential effects of misfueling and supports an approach that
addresses misfueling using both methods-advisory and preventative. The commenter adds that
the fuel manufacturer (i.e., refiners, blenders, importers) cannot and should not be held
responsible for ensuring that consumers choose compatible products when fueling their vehicle.
The commenter also believes that fuel retailers and suppliers cannot and should not be
responsible for customers misfueling their vehicles in the presence of adequate, government
directed measures to advise/prevent against its occurrence. [[Docket number 2233.2, pp. 20-22]]
[[See docket number 2233.2, pp. 20-22 for further discussion of these issues.]]
The commenter urges EPA to drop the provisions covering E10+ labeling requirements when
finalizing the RFS2 rule. Since EPA is not proposing to approve an E10+ fuel at this time, the
commenter believes it would be more appropriate and make more sense for EPA to establish the
E10+ labeling requirements after they have approved an E10+ fuel. [[Docket number 2233.2, p.
38]]
Document No.: EPA-HQ-OAR-2005-0161-2241
Organization: Outdoor Power Equipment Institute (OPEI); Alliance for a Safe
Alternative Fuels Environment (A11SAFE)
Comment:
The commenter (2241.1) noted that labeling alone would not be a sufficient safeguard to prevent
widespread misfueling. However, as an initial measure, labeling should be required. To
improve the pump labeling provisions, EPA should adopt a single uniform and clear label and
not allow for alternate labels. Second, the proposed pump label refers only to vehicles. EPA
must include strong language that indicates that (other than flex-fuel motor vehicles), vehicles,
portable gas containers, boats, and nonroad vehicles and equipment should not be fueled with
blends above E10. EPA must also strengthen language to ensure that labels are visible to
consumers. Rather than require that a label be in "the immediate area" of the pump stand, the
commenter suggests that EPA explicitly require that pump labels be on each pump and in plain
view of the person operating the pump. EPA should require that the label inform consumers that
ethanol blends contain less energy than regular gasoline, and that vehicles and equipment
operating on them will not realize advertised fuel efficiency. (2241.1, pp.13-14)
Document No.: EPA-HQ-OAR-2005-0161-2358
Organization: Society of Independent Gasoline Marketers of America (SIGMA) and the
National Association of Convenience Stores (NACS)
Comment:
The commenter (2358) believes that believes EPA's proposed retail dispenser labeling is
sufficient to prevent most retail customer misfueling. Imposing fines on retailers is unfair as
most retail sales are self-service sales. Additionally, it is unrealistic to expect store personnel to
police motorists dispensing fuel. [[Docket number 2358.1, pp. 11-12]]
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Chapter 4: Compliance (Registration, Recordkeeping, Reporting)
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP)
Comment:
The commenter (2384) is concerned about misfueling and the distinct potential liabilities
involved. The commenter believes EPA should clearly specify the steps that fuel suppliers and
marketers can take to minimize these liabilities and provide limited relief from liability. [[Docket
number 2384.1, p. 12]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) believes that EPA must undertake a robust public information campaign
to educate the population about the potential effects of misfueling. The commenter supports an
approach that addresses misfueling using both advisory and preventative methods. Whichever
method(s) are chosen, such measures must provide retailers and suppliers with liability
protection should misfueling take place. The commenter states that fuel retailers and suppliers
cannot and should not be responsible for customers misfueling their vehicles in the presence of
adequate, government directed measures to advise and prevent its occurrence. [[Docket number
2393.1, pp. 19-21]] [[See docket number 2393.1, pp. 19-21 for further discussion of the
misfueling issue.]]
The commenter further states that to ensure that consumers are aware of the presence of ethanol,
there will have to be a significant effort towards consumer awareness. The commenter believes
that both the government and industry should be responsible for educating the consumer on the
options and benefits of ethanol. Where a retailer decides to sell E85, it is that retailer's
responsibility to advertise his specific product in his market. Additionally, automakers should
reach out to all FFV owners to ensure that those consumers are aware of the types of fuel that
their vehicle can use (including reminders on vehicle fill stems, etc.). [[Docket number 2393.1, p.
26]]
In addition, the commenter requests that EPA clarify the legality of the use of retail blender
pumps for dispensing blends between E10 and E70. [[Docket number 2393.1, p. 70]] [[See
docket number 2393.1, pp. 69-70 for discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) noted that §80.1469 contains requirements for the labeling of gasoline
containing greater than 10 volume percent ethanol. The commenter agrees that under existing
law, such fuel can only be used in FFVs and that consumers should be advised that is the case
and that any misfueling is a violation by the consumer and is a violation of federal law for which
the consumer would be liable. (2505.2, p.14)
Our Response:
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RFS2 Summary and Analysis of Comments
Based on the public comments and the fact that EPA has not completed its evaluation of
the El 5 waiver petition, we believe that it is appropriate to defer finalizing labeling requirements
for >E10 blends at this time. This will afford us the opportunity to complete our analysis of what
measures might be appropriate to prevent misfueling with >E10 blends before this may become a
concern in the context of the RFS2 program.
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Renewable Fuel Standard Program
(RFS2) Summary and Analysis of
Comments
Chapter 5
Program Changes and Flexibilities
Assessment and Standards Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
v>EPA
United States EPA-420-R-10-003
Environmental Protection r , „„.„
Agency February 2010
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5. PROGRAM CHANGES AND FLEXIBILITIES
5.1 Small Refinery and Small Refiner Flexibilities 5-1
5.1.1 Extension of the Temporary Exemption for Small Refineries and Small Refiners 5-1
5.1.2 Additional Small Refiner-specific Flexibilities 5-6
5.1.3 Other Small Refinery and Small Refiner Issues 5-9
5.2 Upward Delegation of RIN-Separating Responsibilities 5-11
5.3 Small Producer Exemption 5-16
5.4 20% Rollover Cap 5-17
5.4.1 Level of the Rollover Cap 5-17
5.4.2 Other Aspects of the Rollover Cap 5-22
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RFS2 Summary and Analysis of Comments
5 PROGRAM CHANGES AND FLEXIBILITIES
What We Proposed:
The comments in this section correspond to Section IV of the preamble to the proposed
rule and address changes to the RFS program and flexibilities offered under the program. A
summary of the comments received and our response to those comments are located below (and
also in section III of the preamble to the final rule).
5.1 Small Refinery and Small Refiner Flexibilities
5.1.1 Extension of the Temporary Exemption for Small Refineries and Small Refiners
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2105
Organization: Small Business Administration, Office of Advocacy
Comment:
The commenter (2105.1) believes that EPA should institute a temporary delay of implementation
of the RFS2 rule for small refiners. The commenter believes that the statutory language in the
EISA does not interfere with EPA's ability, under the provisions of the Regulatory Flexibility
Act (RFA), to grant relief to regulated small entities upon which the rule will have a significant
economic impact. A delay in implementation for small refiners would also lessen the regulatory
burden of this rule. (2105.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2118
Organization: CountryMark Cooperative, LLP
Comment:
The commenter (2118.1) believes that provisions should be provided to allow a delay or phase-in
for small refiners. The commenter is a member of an ad-hoc coalition of Small Business Refiners
(SBR) and agrees with the comments provided by the group. The SBR Coalition believes that
EPA does have the legal discretion to allow small refiners and small refineries owned by SBRs
to delay their entry in to the RFS2 program for as long as five years. The commenter
recommends that the RFS2 compliance date for small entities be delayed until at least 2014.
(2118.1, p.2)
The commenter takes issue with the Department of Energy (DOE) "Small Refinery Exemption
Study" released in January of 2009 determining that small refineries would not face
disproportionate economic harm by their participation in the RFS Program. Such a limited
investigation into the impact on small refineries could not have resulted in any in-depth analysis
as to the financial impact. Before EPA adopts the final RFS2 regulations that, DOE should
conduct another study which properly evaluates the impact on small refineries. (2118.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2135
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Organization: Ad Hoc Coalition of Small Business Refiners (SBR)
Comment:
The commenter states that EPA does have legal authority to permit a delay (or phase-in) of the
RFS2 program under the CAA. The SBR Coalition submits that EPA's legal concerns relative to
both the suggested delay and the phase-in are unsustainable in view of EPA's past exercises of
discretion under the RFS1 program and also in view of the extensive discretion afforded to EPA
under Section 211(o) of the CAA. [[Docket number 2135.1, pp. 15-16]] [[See docket number
2135.1, pp 15-19 for extensive discussion of this issue.]]
The commenter makes the following specific comments/recommendations: that the Department
of Energy should be directed to reopen and reassess the Small Refineries Exemption Study by
June 30, 2010 as suggested by the Senate Appropriations Committee in January 2009; and that
the RFS2 effective date for small entities should be delayed at least until 2014.
Document No.: EPA-HQ-OAR-2005-0161-2311
Organization: Wyoming Refining Company
Comment:
The commenter (2311.1) urges EPA to review and exercise its legal authority to provide
additional flexibility and relief for small refiners as recommended by the Small Advocacy
Review Panel. (2311.1,p.5)
Document No.: EPA-HQ-OAR-2005-0161-2498
Organization: North Atlantic Refining Ltd.
Comment:
The commenter urges EPA to grant small refiners as much time to prepare for the burdens of
RFS2 as was provided under RFS1, thereby delaying small refiner compliance to January 2014.
This extension would provide invaluable time for small refiners to adjust to the new
requirements and to take steps to mitigate their burdens.
The commenter also urges EPA to finalize its proposal to allow small refiners to apply for future
extensions of their exemption based on case-by-case showings of economic hardship. The
commenter recommends that EPA adopt a policy of liberally granting such extension requests.
Doing so would alleviate the significant burdens facing small refiners, and would be consistent
with U.S. small business relief policies. (2498.1, pp.4-5)
Document No.: EPA-HQ-OAR-2005-0161-2396
Organization: CVR Energy
Comment:
The commenter (2396.1) requests that EPA reopen and reassess the Small Refineries Exemption
Study by June 30, 2010 as suggested by the Senate Appropriations Committee in January 2009.
The commenter would also like EPA to delay the effective date for SBRs until at least 2014
and/or grant an automatic exemption extension for those qualifying for an extension under the
original RFS rule.
Document No.: EPA-HQ-OAR-2005-0161-2400
Organization: Murphy Oil USA, Inc.
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Comment:
The commenter (2400.2) recommends that EPA maintain the exemption set forth in RFS1 and
allow small refinery exemption through December 31, 2010. (2400.2, p.10)
Document No.: EPA-HQ-OAR-2005-0161-2130
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) agree with EPA's continuance of the RFS1 temporary small
refiner/small refinery exemption through December 31, 2010, recognizing that RFS2 will
probably be implemented on or before this date for all obligated parties. The commenter urges
EPA to not extend the exemption beyond this date since all parties have been well aware of the
statute's timeline, including small refineries and qualified small refiners should have been
striving to achieve compliance by the end of 2010 since EISA passage. (2132.1, pp.17-18)
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that the small refinery exemption should not be extended; and
the small refiner exemption should be eliminated. (2329.1, p. 86) [[See Docket Number 2329.1,
pp.86-87 for a detailed discussion of this issue]]
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) supports EPA's intention not to extend the RFS1 small refiner
exemption. [[Docket number 2130.1, p. 11]]
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) believes that EPA should not promulgate an exemption for small
refiners. The Energy Policy Act of 2005 very specifically provides an exemption for small
refineries. Nowhere does the Act provide a similar exemption for small refiners. EPA should not
extend the exemption for an additional two years. The law includes a provision that allows an
extension of the small refinery exemption upon a showing of undue economic hardship by
individual small refineries. The commenter believes that EPA should limit any exemption
extension to situations where the party seeking the exemption qualifies as a small refinery and
can make such a showing. (2505.2, p. 10)
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) believes that EPA should not promulgate an exemption for "small
refiners." EPAct 2005 very specifically provides an exemption for "small refineries." Nowhere
does the Act provide a similar exemption for "small refiners." Thus, EPA should never have
provided this small refiners' exemption. Now, EPA is proposing to extend the exemption for an
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Chapter 5: Program Changes and Flexibilities
additional two years. The commenter states that EPA should not extend this exemption. The
law includes a provision that allows an extension of the small refinery exemption upon a
showing of undue economic hardship by individual small refineries. EPA should limit any
exemption extension to situations where the party seeking the exemption qualifies as a small
refinery and can make such a showing. Any exemption should only apply to the specific small
refinery that has petitioned for an extension, not the entire universe of small refineries. [[Docket
number 2393.1, pp. 12-13]]
Our Response:
The RFS1 program regulations exempt gasoline produced by small refineries from the
renewable fuels standard through December 31, 2010 (at 40 CFR 80.1141), per EPAct. As EISA
did not alter the small refinery exemption in any way, we are retaining this small refinery
temporary exemption in the RFS2 program; however, the exemption will now apply to all
transportation fuel produced by small refineries (including diesel and nonroad fuels), as EISA
also covers transportation fuels, not just gasoline. Likewise, as we extended under RFS1 the
small refinery temporary exemption to the few remaining small refiners that met the Small
Business Administration's (SBA) definition of a small business (1,500 employees or less
company-wide), we are also finalizing a continuation of the small refiner temporary exemption
through December 31, 2010 for transportation fuels produced by these refiners.
Some commenters mentioned the opportunity for relief based on a case-by-case hardship
demonstration, and we note (as discussed in Section III.E.2 of the preamble to the final rule) that
EPAct also authorizes EPA to grant an extension for a small refinery based upon
disproportionate economic hardship, on a case-by-case basis. We believe that these avenues of
relief can and should be fully explored by small refiners who are covered by the small refinery
provision. In addition, we believe that it is appropriate to allow petitions to EPA for an
extension of the temporary exemption based on disproportionate economic hardship for those
small refiners who are not covered by the small refinery provision (again, per our discretion
under section 211 (o) (3) (B)); this would ensure that all small refiners have the same relief
available to them as small refineries do. Thus, we are finalizing a hardship provision for small
refineries in the RFS2 program, that any small refinery may apply for a case-by-case hardship at
any time on the basis of disproportionate economic hardship per CAA section 211 (o) (9) (B). We
are also finalizing a case-by-case hardship provision for those small refiners that do not operate
small refineries using our discretion under CAA section 211 (o) (3) (B). This provision will allow
those small refiners that do not operate small refineries to apply for the same kind of hardship
extension as a small refinery. In evaluating applications for this hardship provision EPA will
take into consideration information gathered from annual reports and RIN system progress
updates, as recommended by the SBAR Panel, as well as information provided by the petitioner
and through consultation with DOE.
As discussed in Section III.E of the preamble to the final rule, EPAct required that DOE
perform a study by December 31, 2008 on the impact of the renewable fuel requirements on
small refineries (section 211 (o) (9) (A) (ii) (I)), and whether or not the requirements would impose
a disproportionate economic hardship on these refineries. In the small refinery study, "EPACT
2005 Section 1501 Small Refineries Exemption Study", DOE's finding was that there is no
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RFS2 Summary and Analysis of Comments
reason to believe that any small refinery would be disproportionately harmed by inclusion in the
proposed RFS2 program. Further, the finding was that there appeared to be no shortage of RINs
available under RFS1, and EISA has provided flexibility through waiver authority (per section
211 (o) (7)). Further, in the case of the cellulosic biofuel standard, cellulosic biofuel allowances
can be provided from EPA at prices established in EISA (see regulation section 80.1456). DOE
thus determined that small refineries would not be subject to disproportionate economic hardship
under the proposed RFS2 program, and that the exemption should not, on the basis of the study,
be extended for small refineries (including those small refiners who own refineries meeting the
small refinery definition) beyond December 31, 2010. DOE noted in the study that, if
circumstances were to change and/or the RIN market were to become non-competitive or
illiquid, individual small refineries have the ability to petition EPA for an extension of their
small refinery exemption (pursuant to Section 211 (o) (9) (B)).
A number of commenters take issue with the DOE study, and we are also aware that there
have been expressions of concern from Congress regarding the DOE Study. Specifically, in
Senate Report 111-45, the Senate Appropriations Committee "directed [DOE] to reopen and
reassess the Small Refineries Exemption Study by June 30, 2010," noting a number of factors
that the Committee intended that DOE consider in the revised study. The Final Conference
Report 111-278 to the Energy & Water Development Appropriations Act (H.R. 3183),
referenced the language in the Senate Report, noting that the conferees "support the study
requested by the Senate on RFS and expect the Department to undertake the requested economic
review." At the present time, however, the DOE study has not been revised. If DOE prepares a
revised study and the revised study finds that there is a disproportionate economic impact, we
will revisit the exemption extension at that point in accordance with section 211 (o) (9) (A) (ii).
With respect to the comments regarding extending the small refiner temporary exemption
past December 31, 2010 and EPA's legal authority, we note that (as described in the Final Panel
Report) EPA early-on identified limitations on its authority to issue additional flexibility and
exemptions to small refineries. In section 211 (o) (9) Congress specifically addressed the issue of
an extension of time for compliance for small refineries, temporarily exempting them from
renewable fuel obligations through December 31, 2010. As discussed above, the statute also
includes two specific provisions describing the basis and manner in which further extensions of
this exemption can be provided. In the RFS1 rulemaking, EPA considered whether it should
provide additional relief to the limited number of small refiners who were not covered by the
small refinery provision, by providing them a temporary exemption consistent with that provided
by Congress for small refineries. EPA exercised its discretion under section 211 (o) (3) and
provided such relief. Thus, in RFS1, EPA did not modify the relief provided by Congress for
small refineries, but did exercise its discretion to provide the same relief specified by statute to a
few additional parties.
In RFS2 we are faced with a different issue—the extent to which EPA should provide
additional relief to small refineries beyond the relief specified by statute, and whether it should
provide such further relief to small refiners as well. There is considerable overlap between
entities that are small refineries and those that are small refiners. Providing additional relief just
to small refiners would, therefore, also extend additional relief to at least a number of small
refineries. Congress spoke directly to the relief that EPA may provide for small refineries,
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Chapter 5: Program Changes and Flexibilities
including those small refineries operated by small refiners, and limited that relief to a blanket
exemption through December 31, 2010, with additional extensions if the criteria specified by
Congress are met. EPA believes that an additional or different extension, relying on a more
general provision in section 211 (o) (3) would be inconsistent with Congressional intent. Further,
we do not believe that the statute allows us the discretion to give relief to small refiners only—as
this would result in a subset of small refineries (those that also qualify as small refiners)
receiving relief that is greater than the relief already given to all small refineries under EISA.
EPA also notes that the criteria specified by statute for providing a further compliance
extension to small refineries is a demonstration of "disproportionate economic hardship." The
statute provides that such hardship can be identified through the DOE study, or in individual
petitions submitted to the Agency. However, the DOE study has concluded that no
disproportionate economic hardship exists, at least under current conditions and for the
foreseeable future under RFS2. Comments received by EPA on this matter also do not have the
data and information necessary for EPA to conclude that disproportionate economic hardship
exists. Therefore, absent further information that may be provided through the petition process,
there does not currently appear to be a basis under the statute for granting a blanket extension of
the exemption to small refineries at this time. If DOE revises its study and comes to a different
conclusion, EPA can revisit this issue at that time.
5.1.2 Additional Small Refiner-specific Flexibilities
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2105
Organization: Small Business Administration, Office of Advocacy
Comment:
The commenter (2105.1) believes that EPA should consider a phase-in for small refiners. By
phasing in compliance requirements over a brief time period, EPA could lessen the burden of
regulation and promote compliance. (2015.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2118
Organization: CountryMark Cooperative, LLP
Comment:
The commenter (2118.1) believes that provisions should be provided to allow a phase-in for
small refiners.
Document No.: EPA-HQ-OAR-2005-0161-2135
Organization: Ad Hoc Coalition of Small Business Refiners (SBR)
Comment:
The commenter (2135) is concerned that EPA's proposed rule ignored or denied much of the
relief recommended in the Small Business Advocacy Review Panel (Panel). The commenter
believes that EPA's tentative responses to concerns expressed by the SERs orally and in written
comments were unsatisfactory. The commenter adds that it is clear that the Panel favored broad-
based relief for small business refiners. [[Docket number 2135.1, pp. 14-15]]
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RFS2 Summary and Analysis of Comments
The commenter states that EPA does have legal authority to permit a delay or phase-in of the
RFS2 program under the CAA. The SBR Coalition submits that EPA's legal concerns relative to
both the suggested delay and the phase-in are unsustainable in view of EPA's past exercises of
discretion under the RFS1 program and also in view of the extensive discretion afforded to EPA
under Section 211(o) of the CAA. [[Docket number 2135.1, pp. 15-16]] [[See docket number
2135.1, pp 15-19 for extensive discussion of this issue.]]
The commenter adds that SBRs do not have the staff or systems to manage and account for four
different categories of RINs and rural SBRs will suffer economic hardship and disadvantage
because of the unavailability of biofuels. The commenter believes that RINs should be
interchangeable for SBRs. [[Docket number 2135.1, p. 21]
The commenter submits that EPA needs to recognize (i) the extent of potential harm of the
current RFS2 proposal to members of the SBR Coalition and similarly situated entities, (ii) the
need for corresponding relief, (iii) the inadequacy of the small refinery study conducted by DOE
on which many of EPA's recommendations are based and (iv) the legality of the alternatives
proposed by the SBR Coalition in connection with Congressional authority under the relevant
legislation and last year's Small Business Advocacy Review Panel process. By fully and actively
involving ourselves in a dialogue with EPA over the foregoing issues—issues which are of
critical importance to our industry—the commenter remains hopeful that judicial review of the
RFS2 rulemaking by our industry segment will not be necessary.[[Docket number 2135.1, p. 22]
The commenter makes the following specific comments/recommendations:
When SBRs become obligated parties under RFS2, they should be provided critical
flexibilities, including a phase-in of the standards, a higher rollover cap (50% is
recommended) and the ability to use RINs interchangeably.
EPA should include a review of the RIN system in its annual review procedures and
invite SBR participation in the development of the review process.
Document No.: EPA-HQ-OAR-2005-0161-1397
Organization: United Refining Company
Comment:
The commenter (1397) would like to see an exemption written in the rule excluding "Small
Business Refiners" from being required to blend renewable fuels beyond the maximum levels of
E10 and B5, better known as the "blendwall". (1397, p. 1)
Document No.: EPA-HQ-OAR-2005-0161-2396
Organization: CVR Energy
Comment:
The commenter (2396.1) stated that EPA should also provide the SBRs with critically needed
flexibility by establishing a phase-in of the standards. (2396.1, p. 1)
The commenter would also like EPA to perform an annual review of the RIN system and make
adjustments as necessary to mitigate adverse impacts to the refining industry with particular
focus on disproportionate SBR impact. EPA should also provide a general hardship exemption
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for any SBRs meeting specified hardship criteria, which should be developed cooperatively with
SBR participation. (2396.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) noted that EPA seeks comment on whether to provide a program
review as recommended by the Small Business Advocacy Review Panel. The commenter
believes that EPA should not interfere with markets. The commenter believes that the vast
majority, if not all, renewable fuel in the United States will be targeted for inclusion in the RFS
program, EPA's projections as to the availability of such fuel is sufficient information to assess
whether RINs will be available. There is no valid reason to include review of RIN trading
system. (2329.1, p. 104)
Our Response:
With respect to a phase-in for small refiners, we stated in the NPRM that we had serious
concerns about our legal authority to provide such a phase-in. CAA section 211 (o) (3) (B) states
that the renewable fuel obligation shall "consist of a single applicable percentage that applies to
all categories of persons specified" as obligated parties. A phase-in approach would essentially
result in different applicable percentages being applied to different obligated parties. Further,
such a phase-in approach would provide more relief to small refineries operated by small refiners
than that provided under the statutory small refinery provisions.
After considering the comments on this issue, we continue to believe that allowing a
phase-in of regulatory requirements for small refiners would be inconsistent with the statute, for
the same reasons we discussed in 5.1.1 for why we cannot grant an automatic extension of the
temporary exemption. Any individual entities that are experiencing hardship that could justify a
phase-in of the standards have the ability to petition EPA for individualized relief. Thus, we did
not include a phase-in of standards for small refiners in the final rule.
With respect to RIN-related flexibilities for small refiners (flexibilities in the RIN
rollover cap percentage and allowing small refiners only to use RINs interchangeably), we do not
believe it is appropriate to finalize such provisions. In the RFS1 rule, up to 20% of a previous
year's RINs may be "rolled over" and used for compliance in the following year. In the
preamble to the proposed rule, we discussed the concept of allowing for flexibilities in the
rollover cap, such as a higher RIN rollover cap for small refiners for some period of time or for
at least some of the four standards. As the rollover cap is the means through which we are
implementing the limited credit lifetime provisions in section 211 (o) of the CAA, and therefore
cannot simply be eliminated, we requested comment on the concept of increasing the RIN
rollover cap percentage for small refiners and an appropriate level of that percentage. In
response to the Panel's recommendation, we also sought comment on allowing small refiners to
use the four types of RINs interchangeably. As highlighted in the NPRM, we continue to believe
that allowing the concept of interchangeable RINs for small refiners only, would fail to require
implementation of the four different standards mandated by Congress (e.g., conventional biofuel
could not be used instead of cellulosic biofuel or biomass-based diesel), and is not consistent
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RFS2 Summary and Analysis of Comments
with section 211 (o) of the Clean Air Act. Essentially, it would circumvent the explicit direction
of Congress in EISA to require that the four RFS2 standards be met separately and fully. An
additional and independent reason for not providing the relief requested is that, given the
findings from the DOE study that small refineries (and thus, most small refiners) do not currently
face disproportionate economic hardship, and are not expected to do so as RFS2 is implemented,
and without the data and information necessary to conclude that disproportionate economic
hardship exists, we do not believe that a basis exists to justify providing small refiners with a
larger rollover cap than other regulated entities. Thus, small refiners will be held to the same
RIN rollover cap as other obligated parties.
Based on comments received on the proposed rule regarding an annual review, we
believe that such information could be helpful to industry, especially small businesses, to aid the
proper functioning of the RIN market (particularly in the first years of the program). However,
during the development of the final rule, it became evident that there could be instances where
we would want to report out RIN system information on a more frequent basis than just once a
year. Thus we will periodically report out elements of RIN system progress; but such
information will be reported via other means (e.g., the RFS website
(www.epa.gov/otaq/renewablefuels/index.htm), EMTS homepage, etc.).
5.1.3 Other Small Refinery and Small Refiner Issues
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2498
Organization: North Atlantic Refining Ltd.
Comment:
The commenter (2498.1) noted that the proposed RFS2 small refiner provisions currently do not
require a "prior ownership" certification. The commenter urges EPA to finalize these provisions
as proposed. If, however, EPA elects to include a prior ownership requirement in the final rule,
EPA should not set a retroactive ownership date, to avoid disrupting parties' investment-backed
expectations and plans. (2498.1, p.3) (See Docket Number 2498.1, pp.2-3 for a detailed
discussion of this issue).
The commenter also noted that the proposed RFS2 regulations provide that any small refiner that
subsequently fails to meet all of the qualifying criteria will be disqualified from exemption "as of
the effective date of this subpart." The commenter believes that such retroactive application of
the RFS program is unnecessarily punitive and could inhibit ordinary growth and expansion.
The commenter strongly urges EPA to apply the RFS program's requirements only prospectively
in the event that an exempt small refiner subsequently fails to qualify. (2498.1, p.3) (See Docket
Number 2498.1, pp.3-4 for a detailed discussion of this issue)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
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Chapter 5: Program Changes and Flexibilities
The commenter believes that EPA should not change the year used to establish a refinery's
qualification for the small refinery exemption in this manner. Changing the qualification year
will change which refineries are eligible for the small refinery exemption. Refineries have
already built their compliance strategies based on having received EPA recognition that they
qualify for the small refinery exemption under EPAct and the RFS1 regulations, using the
refinery's 2004 production to determine qualification. Changing the rules at this point in the
program is unfair and is not authorized under EISA 07. [[Docket number 2233.2, p. 12]]
The commenter supports the extension of the small refinery exemption and believes that these
small refineries should be grandfathered or should be granted a permanent exemption. [[Docket
number 2233.2, p. 12]]
Document No.: EPA-HQ-OAR-2005-0161-2105
Organization: Small Business Administration, Office of Advocacy
Comment:
The commenter noted that there are issues with the availability of "exotic" renewable fuels, those
made using methods that are not yet commercially viable. This additional GHG reduction
requirement adds significant cost and uncertainty to a rule that is already costly and filled with
uncertainty for small entities.
The commenter noted that given that the production, price, and availability of RINs are very
uncertain, further narrowing the types of renewable fuels acceptable for compliance will further
decrease the availability of RINs. RFS2 was designed with a focus on the importance of energy
independence and security rather than greenhouse gas emissions reductions. Areas within the
United States that currently grow soybeans and produce soybean-based diesel will be drastically
affected by the elimination of this fuel from certification for blending. The commenter believes
that EPA should consider waivers to assist these regions in compliance. (2105.1, p.6)
The commenter also believes that the approval and selection of renewable fuel technologies will
create limitations on innovation. These limitations would put restraints on potentially beneficial
and cost-effective improvements. (2105.1, p.6)
Our Response:
Due to the fact that the RFS1 rule only placed renewable fuel obligations on producers
and importers of gasoline, there may be new small refiners (or small refineries) that were not
covered by the RFS 1 exemption for small refineries and small refiners—such as refiners that
only produce diesel fuel. Consequently, we have finalized such provisions for RFS2 to also
cover diesel and nonroad fuels. With regard to the comment that we are changing the
qualification date from 2004 to 2007, we would like to clarify that this is not the case. Any small
refinery or small refiner that is currently exempt under RFS1 will not need to reapply under
RFS2 for the temporary exemption. The verification letter for small refineries (§80.1441) or
RFS program small refiner status (§80.1442) is for those refiners that are now newly covered by
the RFS program due to EISA's expansion to "transportation fuels" (which include diesel and
nonroad fuels).
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RFS2 Summary and Analysis of Comments
Regarding the comment that EPA should not set a "retroactive ownership date", we note
first that the small refiner provisions for this rule are consistent with the small refiner provisions
in our other fuels programs (the small refinery provision under the RFS program was set out by
Congress in EPAct, thus there are elements of it that are not the same as our previous fuels
programs). We believe that a prior ownership requirement is necessary to ensure that we are
providing relief to those refiners that are truly at an inherent disadvantage due to their size, as
recognized by the Small Business Administration's small entity size standards. Our intent in all
of our fuels programs has been, and continues to be, limiting the small refiner relief provisions to
a small subset of refiners that are generally inherently challenged, as discussed above. It would
be hard to understand how an entity with the ability to purchase a new refinery is inherently
challenged. At the same time, it is also our intent to avoid stifling normal business growth.
Therefore, a refiner will be disqualified as a small refiner if it exceeds the small refiner criteria
through its involvement in transactions such as purchasing or being acquired by another entity,
merging with a non-small refiner, or when it ceases to produce its transportation fuel from crude.
With respect to the commenter's concern regarding disqualification, we are finalizing that
refiners who qualify as small refiners and subsequently fail to meet all of the qualifying criteria
are disqualified as small refiners as of January 1 of the next calendar year. However, a refiner
that is disqualified from its small refiner status due to providing false information in its small
refiner verification letter will be disqualified as a small refiner as of the effective date of the rule.
With regard to the comments from Advocacy, we note that EISA put in place a number
of additional requirements for the RFS program, which we are implementing with the RFS2 final
rule. This includes both the new cellulosic, advanced, and biomass-based diesel standards, as
well as the lifecycle GHG performance thresholds for these fuels.
5.2 Upward Delegation of RIN-Separating Responsibilities
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) supports the proposal to allow small blenders to delegate their
obligations. Experience with RFS1 shows that it is difficult for parties to transfer a small amount
of RINs. This proposal would also make it easier to track RINs, than would be requiring
numerous small entities to report RIN transactions. (2329.1, pp.91-92)
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter supports the proposal to make all RIN-separating activities the responsibility of
the Producer (Section III.Ft. 4) which would simplify the RIN management process. If this were
adopted, it would not be necessary to consider the proposals in IV.A or IV.C. 1. If the proposal
in III.Ft.4 is not adopted, then the commenter would support the option to have small blenders
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(125,000 gal handled) delegate their RIN separating responsibilities to the Producer or fuel
provider. (0994.1, p. 15)
Document No.: EPA-HQ-OAR-2005-0161-1002
Organization: Fuel Marketing Corporation
Comment:
The commenter (1002) noted in Section 3.9 that they believe the threshold of 125,000 gallons
should be set at a minimum of 1,000,000 gallons blended or traded for upward delegation. The
commenter believes that the financial burden of anything below this point, especially in regards
to annual reporting and technical requirements to manage transactions either themselves or
through a third party, will have a tremendous impact on them. (1002/1002.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2155
Organization: Petroleum Marketers and Convenience Stores of Iowa (PMCI)
Comment:
The commenter (2155.1) agrees with EPA's proposed language to allow blenders handling less
than 125,000 gallons of renewable fuels per year to transfer those attached RINs upstream. The
commenter believes that this upward delegation exception should be limited to the small blender
and not allowed for any other parties regulated under the RFS program for fear of market
manipulation and erroneous supply agreements intended to coerce the buyer/blender to forfeit
RINs. The small blender must have the first right of refusal. (2155.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) supports allowing parties directly upstream from small biofuels blenders
to separate and trade RINs. Additionally, small biofuels blenders should be required to
specifically identify the upstream party which will be responsible for registering and reporting
their RIN activity. The commenter also supports EPA's proposed 125,000 total gallons per year
limit for defining these small biofuels blenders.
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
To the extent EPA does not generally allow separation of RINs by renewable fuel producers, the
commenter supports allowing upstream delegation of RINs by small blenders. In the Proposed
Rule, EPA indicated it believes it may be appropriate, under the current requirements limiting
separation of RINs to obligated parties, to permit blenders who only blend a small amount of
renewable fuel to allow the party directly upstream to separate RINs on their behalf. The
commenter agrees with this proposal as the cost of reporting and compliance is a tremendous
financial hardship for many small blenders. [[Docket number 2249.2, p. 30]]
The commenter suggests that a specific allotment be given for small blenders who blend
biodiesel and recommends that EPA increase this value to 250,000 gallons of biodiesel.
Additionally, the commenter requests EPA to establish a specific carve out for biodiesel in the
small blender provisions and believes that this is necessary as the majority of the renewable fuel
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RFS2 Summary and Analysis of Comments
that will be blended by small blenders will be ethanol, as ethanol is easier to blend than
biodiesel. [[Docket number 2249.2, pp. 30-31]]
Document No.: EPA-HQ-OAR-2005-0161-2314
Organization: The New England Fuel Institute
Comment:
The commenter (2134.1) supports the proposal in the NPRM that would permit the upward
delegation of RIN separating responsibilities by small blenders who blend and sell less than
125,000 gallons of renewable fuel per year. (2314.1, p.3)
The commenter proposes that two approaches to upward delegation transactions be adopted in
the final rulemaking; the first approach would allow the blender to enter into an annual
authorization that applies to all volumes of renewable fuel transferred between the parties for a
given year, as proposed in the NPRM; the alternative approach would allow small blenders to
enter into arrangements with multiple suppliers on a transaction by transaction basis. The
adoption of both these approaches is essential to ensure that small blenders, who have less
leverage with suppliers than the large blenders with regard to contractual terms, are guaranteed a
consistent supply of renewable fuel blendstock at a price that allows the best possible margins
for the blender. (2134.1,p.4)
Document No.: EPA-HQ-OAR-2005-0161-2328
Organization: Petroleum Marketers Association of America (PMAA)
Comment:
The commenter (2328.1) supports the proposal that would permit the upward delegation of RIN
separating responsibilities by small blenders who blend and sell less than 125,000 gallons of
renewable fuel per year. The commenter believes that the upward delegation of RIN-separating
responsibilities should be at the discretion of the blender and that such separation be mandatory
on the supplier when requested. (2328.1, p.3)
The commenter is concerned with the proposal requiring small blenders to enter into a contract
with renewable fuel suppliers authorizing for the period of one year the upward delegation of all
RINs transferred between the parties. This proposal would lock blenders into a supply contract
with a single renewable fuel supplier and remove a blenders ability to "shop around" for
competitive pricing. The commenter proposes that two approaches to upward delegation
transactions be adopted in the final rulemaking: one approach would allow the blender to enter
into an annual authorization that applies to all volumes of renewable fuel transferred between the
parties for a given year as proposed in the NPRM; the second approach would allow small
blenders to enter into arrangements with multiple suppliers on a transaction by transaction basis.
(2328.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393.1) believes that EPA should not allow small entities to delegate their RIN
related responsibilities to parties directly upstream. [[Docket number 2393.1, pp. 11-12]]
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Chapter 5: Program Changes and Flexibilities
Document No.: EPA-HQ-OAR-2005-0161-2172
Organization: Minnesota Soybean Processors (MnSP)
Comment:
MnSP commented that it strongly supports the proposal to permit small blenders of renewable
fuel to allow the party directly upstream to separate RINs on their behalf, but notes that if EPA
agrees to allow renewable fuel producers the ability to separate and sell RINs apart from
renewable fuel gallons, this proposal will not be needed. MnSP believes that EPA's enactment of
rules allowing renewable fuel blenders to delegate their RIN separation to an upstream party will
greatly enhance the availability of renewable fuels across the U.S. Additionally giving small
blenders the ability to significantly reduce their compliance costs of blending renewable fuels
greatly levels the economic playing field between large volume renewable fuel blenders and
small volume renewable fuel blenders.
MnSP recommends that if EPA allows small blenders to delegate the separation of RINs on their
behalf as proposed in this rule, that a specific biodiesel volume carve out be created. The
commenter noted that many petroleum jobbers that MnSP sold to sell approximately 5 million
gallons of petroleum diesel fuel annually. The diesel fuel is obtained from obligated parties
through signing of a supply contract(s) with an obligated party (ies). When these jobbers blend
the 5 million gallons of petroleum diesel with biodiesel to produce a 5 percent biodiesel blend
level, 250,000 gallons of B100 (neat) biodiesel is needed. Thus MnSP commented that it
believes that the current 125,000 EPA suggested renewable fuel volume threshold to delegate
RIN separation upstream is inadequate in volume for it to have a significant impact for most
petroleum jobbers to blend biodiesel. In addition, because ethanol is easier for petroleum jobbers
to blend with gasoline versus biodiesel blended into diesel, it is probable that petroleum jobbers
will favor blending ethanol into gasoline. When faced with the ease of blending ethanol versus
biodiesel, the small blender will choose to blend ethanol at the expense of blending biodiesel into
diesel fuel, thus placing biodiesel blending at a disadvantage. As a result MnSP strongly
suggests that EPA create a specific biodiesel carve out volume of 250,000 gallons for small
biodiesel blenders so that upstream parties can separate RINs on behalf of small biodiesel
blenders.
MnSP also strongly requests that EPA create a special registration for those small renewable
blenders of renewable fuel who delegate their RIN separation upstream which specifically
exempts them from all existing RFS1 RIN compliance requirements other than registration. This
registration would require the small blender to report the number of renewable fuel gallons
purchased by the registrant to EPA on a quarterly basis. Should the small blender registrant
exceed his small blender exemption of 250,000 gallons of biodiesel, any penalties incurred
would flow to the small blender registrant and not to the biodiesel producer. MnSP would be
supportive of a simple small blender gallons purchased reporting method to EPA (something
similar to IRS' form 1099 reporting) annually reporting small blender registrant total purchased
gallons to EPA and the registered party (ies) in order to validate the small blender registration.
Our Response:
As discussed in the preamble to the final rule, in some cases a party who receives RINs
with a volume of renewable fuel is required to either separate or retire those RINs (and, absent
5-14
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RFS2 Summary and Analysis of Comments
the RFS program, some parties would be subject to few if any EPA regulations governing fuels),
but the affected party may purchase and/or use such small volumes of renewable fuel that it
renders the reporting and recordkeeping requirements of the RFS program a large burden. This
situation will become more prevalent with the RFS2 rule, as EISA added diesel fuel to the RFS
program. With the RFS1 rule, small blenders (generally farmers and other parties that use
nonroad diesel fuel) blending small amounts of biodiesel were not covered under the rule as
EPAct mandated renewable fuel blending for highway gasoline only. EISA mandates certain
amounts of renewable fuels to be blended into all transportation fuels—which includes highway
and nonroad diesel fuel. Thus, parties that were not regulated under the RFS1 rule who only
blend a small amount of renewable fuel (and, as mentioned above, are generally not subject to
EPA fuels regulations) will now be regulated by the RFS program.
Consequently, we believe it is appropriate, and thus we are finalizing as proposed, to
permit blenders who only blend a small amount of renewable fuel to allow the party directly
upstream to separate RINs on their behalf. Such a provision is consistent with the fact that the
RFS program already allows marketers of renewable fuels to assign more RINs to some of their
sold product and no RINs to the rest of their sold product. Further, this provision was designed
to allow the sale of some renewable fuel with no RINs so that small renewable fuel purchasers
could elect to purchase fuel without also assuming burdens associated with RFS2 compliance.
We believe that this provision will also help to eliminate undue burden on small parties who
would otherwise not be regulated by this program. This provision is solely for the case of
blenders who blend and trade less than 125,000 total gallons of renewable fuel per year (i.e., a
company that blends 100,000 gallons and trades another 100,000 gallons would not be able to
use this provision) and is available to any blender who must separate RINs from a volume of
renewable fuel under §80.1429(b)(2).
With regard to comments suggesting that the 125,000 gallon limit should be higher, we
are retaining this threshold as we believe that it strikes the correct balance between providing
relief to small blenders, while still ensuring that non-obligated parties cannot unduly influence
the RIN market.
We are also finalizing, as stated in the preamble, that for upstream delegation, both
parties must sign a quarterly written statement (which must be included with the reporting
party's reports) authorizing the upward delegation. Copies of these statements must be retained
as records by both parties and reported to EPA quarterly. Thus, EPA will know which party will
be responsible for the recordkeeping and reporting duties of another party. The supplier would
then be allowed to retain ownership of RINs assigned to a volume of renewable fuel when that
volume is transferred, under the condition that the RINs be separated or retired concurrently with
the transfer of the volume. This statement would apply to all volumes of renewable fuel
transferred between the two parties. Thus, the two parties would enter into a contract stating that
the supplier has RIN-separation responsibilities for all transferred volumes between the two of
them, and no additional permissions from the small blender would be needed for any volumes
transferred. A blender may enter into such an agreement with as many parties as they wish.
With regard to comments requesting that EPA increase the small blender volume for
biodiesel blending and/or allow a carve-out for biodiesel, we are not finalizing such provisions in
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Chapter 5: Program Changes and Flexibilities
the rule. We do not believe it is necessary to provide additional allowances for biodiesel
blenders only, and we believe it could unnecessarily complicate the upward delegation provision
to have different volume requirements for various types of renewable fuels. Further, the 125,000
gallon limit is intended to identify parties whose operations are truly small, and for whom
compliance with RFS2 recordkeeping and reporting requirements could likely be excessively
burdensome. We believe that the 125,000 gallon limit is appropriate regardless of the fuel that is
being blended.
Regarding comments on upward delegation agreements, we are in fact allowing blenders
to enter into upward delegation contracts with multiple suppliers. We proposed that contracts
would be valid for one year (and thus parties would need to re-submit their agreements with EPA
annually), however we are not finalizing that requirement. Once two parties enter into a
contract, they will not have to resubmit unless the blender's registration status changes such that
the blender would need to re-register with EPA. We are also not finalizing the requested
provision that upward delegation be at the discretion of the blender such that separation be
mandatory on the supplier when requested. Some suppliers may not want to perform RIN-
related responsibilities for their customers, and EPA does not wish to require them to do so.
With respect to comments that a special registration should be provided for small
blenders, we note that we are requiring that small blenders would still have to register with EPA
even if they are delegating their RIN responsibilities upward. While these small blenders will
not have to perform some of the compliance provisions such as reporting, they will still be
required to register.
5.3 Small Producer Exemption
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2425
Organization: PetroAlgae
Comment:
The commenter (2425) believes the 10,000 gallon small producer exemption needs to be
increased to a minimum of 50,000 gallons per year. The increase is based on the increase in
renewable fuel requirement in RFS2 vs. RFS1, essentially increasing the de minims threshold.
[[Docket number 2425.1, p. 7]]
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that the annual volume threshold should be 10,000 gallons of
renewable fuel for refiners and importers who choose not to generate RINs. (2124.1, p.34)
Document No.: EPA-HQ-OAR-2005-0161-2393, EPA-HQ-OAR-2005-0161-2233
Organization: American Petroleum Institute (API), Marathon Petroleum Company
Comment:
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RFS2 Summary and Analysis of Comments
The commenter (2393.1) supports less burdensome registration and recordkeeping requirements
for small producers, but while they may not be subject to all the requirements of larger entities,
the commenter supports requiring these entities to, at minimum, generate RINs for all qualifying
renewables. [[Docket number 2393.1, p. 12]]
Our Response:
As discussed in section III.C of the preamble, we are maintaining the provision from the
RFS1 rule that parties who produce or import less than 10,000 gallons of renewable fuel in a year
are not required to generate RINs for that volume (even if they have the information available to
demonstrate that the fuel is made from renewable biomass), and are permanently exempted from
registering with the EPA if they do not take ownership of RINs generated by other parties.
These producers and importers are also exempt from registration, reporting, recordkeeping, and
attest engagement requirements. We note that while these parties are exempt from generating
RINs, there may be small producers who choose to participate in the RIN program.
We believe this will have only an insignificant impact on the overall volume of RINs in
the marketplace, and is necessary to avoid placing the registration, recordkeeping, reporting, and
other program related burdens on such small producers that might otherwise be forced to cease
production. In addition to the permanent exemption for those producers and importers who
produce or import less than 10,000 gallons of renewable fuel per year, we are also finalizing a
temporary exemption for renewable fuel producers who produce less than 125,000 gallons of
renewable fuel each year from new production facilities. These producers are not required to
generate and assign RINs to batches of renewable fuel for a period of up to three years,
beginning with the calendar year in which the production facility produces its first gallon of
renewable fuel. Such producers are also exempt from registration, reporting, recordkeeping, and
attest engagement requirements as long as they do not own RINs or voluntarily generate and
assign RINs. This provision is intended to allow pilot and demonstration plants of new
renewable fuel technologies to focus on developing the technology and obtaining financing
during these early stages of their development without having to comply with the RFS2
regulations.
5.4 20% Rollover Cap
5.4.1 Level of the Rollover Cap
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2537
Organization: Musket Corporation
Comment:
EPA does identify, but does not recommend however, a change that could increase the flow of
RINs from the RIN separator to obligated parties; that of reducing the 20% rollover cap to 10%.
This change would significantly reduce the likelihood that an obligated party would withhold
RINs in excess of their current year obligation. [[Docket number 2537, pp. 2-3]]
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Chapter 5: Program Changes and Flexibilities
Document No.: EPA-HQ-OAR-2005-0161-1033
Organization: Poet Ethanol Products
Comment:
The commenter (1033.1) believes the cap is effective as it exists today and would not be in favor
of moving it in either direction from 20%. (1033.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-1050
Organization: American Council for Ethanol (ACE)
Comment:
The commenter (2101.1) noted that to address the threat of a RIN snow-ball effect and the use of
paper credits instead of physical gallons by obligated parties, during RFS1 EPA proposed to set a
cap on the number of RINs that could rollover from one year to another for use by obligated
parties. While the commenter appreciated EPA's effort to find a solution to address this RIN
rollover risk, the commenter did not support the 20 percent rollover cap at that time. Instead, the
commenter advised that the Agency comply with the 2005 Acts clear language calling for a 12-
month credit lifespan by applying a retrospective system to ensure that minimum volumes of
renewable fuel are used on an annual basis. (2101.1, p. 16)
The commenter recommends that EPA revisit this issue and consider enforcing the original
intent of the law to not allow RIN rollover. If EPA is unwilling to take this step, the commenter
recommends the Agency reduce the cap from 20 percent to 10 percent to more adequately
address rollover concerns. The Act provides for the use of physical gallons of renewable fuel to
satisfy annual obligations. In light of this requirement, a reduced cap of 10 percent is more
defensible and would more consistently ensure the purpose of the law is achieved. (2101.1, p. 16)
Document No.: EPA-HQ-OAR-2005-0161-2118
Organization: CountryMark Cooperative, LLP
Comment:
The commenter (2118.1) recommends that for biodiesel as a minimum the 20% requirement be
increased to 50% so prior year RINs can be counted toward obligation through June of the
following year. (2118.1,p.3)
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that the current 20% cap on the use of last year's RINs for
RFS compliance should be increased to 40%. Increasing the rollover cap to
40% allows these end-of-year renewable fuel volumes to be more readily incorporated into RFS2
compliance strategies. The higher cap would also provide more flexibility given higher RFS2
volume requirements. (2124.1, p.20-21)
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
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RFS2 Summary and Analysis of Comments
The commenter (2130) believes that rollover RINs should not be capped. Putting a cap on the
use of following year rollover RINs distorts the RFS by removing legitimate renewable fuel use
that should count toward meeting the mandatory FRS obligation. [[Docket number 2130.1, p.
11]]
Document No.: EPA-HQ-OAR-2005-0161-2145
Organization: Flint Hills Resources
Comment:
The commenter (2145.1) supports increasing the rollover cap to 40%. To allow an obligated
party to truly benefit from this provision as intended, the cap must be raised. (2145.1, p.6)
Document No.: EPA-HQ-OAR-2005-0161-2154
Organization: ConocoPhillips
Comment:
The commenter (2154.1) noted that should EPA revise the definition of obligated party, the RIN
carryover cap could remain in place or even increased some to account for the time lag in
moving RINs through the system. However, the current RIN carryover cap exacerbates the
problem when put in combination with the existing obligation structure. (2154.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter believes that unneeded limitations on RIN carryover from one year to the next
can only result in some renewable biofuel production not being credited toward the mandated
volumes and some RINs would expire unused. Since meeting the RFS2 increasing mandated
renewable biofuel requirements will be difficult, EPA must avoid situations where it arbitrarily
destroys valuable RINs. [[Docket number 2233.2, p. 13]]
The commenter adds that EPA should also recognize that at the beginning of each new year,
obligated parties and blenders use biofuels that have the previous year's code. It is very possible
for a blender or obligated party to have 10 to 20% of the total biofuels blended in a single year,
produced in the previous year. While the commenter would argue that EPA should completely
eliminate the RIN carryover cap, at a minimum, EPA should raise the cap to a level that allows a
reasonable number of RINs actually generated in the previous year to be carried into the next
year. If a 20% real RIN carryover is deemed advisable, then this 20% should be added to the 10-
20% previous year biofuel production that is blended in the current year. Thus the RIN carryover
cap should at a minimum be in the 40% range. [[Docket number 2233.2, p. 13]]
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
EPA retains the current provision that would allow an obligated party to use RINs generated in
the prior year subject to a 20 percent cap. The commenter (2249.2) believes EPA should
eliminate any potential for rollover and at a minimum, lower the cap, not increase it. [[Docket
number 2249.2, p. 31 and docket number 2249.1, p. 5]]
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Chapter 5: Program Changes and Flexibilities
In addition, the commenter states that the 20 percent was based on an analysis of historical
supply of ethanol, and one year in which supply was reduced by 20 percent due to a drought.
Biodiesel capacity, however, exceeds the statutory mandates for Biomass-based Diesel, and
alternative feedstocks are available to make up any potential loss of crops. As such, the rollover
provision would only work to undermine the ability of biodiesel producers to sell actual volumes
of biodiesel each year as intended by Congress. There is no support for needing a 20 percent
carryover to address any potential shortfall for the biomass-based diesel requirement. Moreover,
EPA should promote the use of other fuels that may be available to make up for potential losses.
The commenter suggests that if some rollover is retained, a 10 percent cap should be more than
sufficient, while limiting the potential reduction of actual volumes sold each year. [[Docket
number 2249.2, p. 32]]
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
Regarding continuation of the 20 percent rollover cap for use in the RFS2 program, the
commenter (2383) believes the ability to rollover some RINs provides flexibility and the 20
percent cap helps insure annual generation of RINs. The commenter thus supports continuation
of the 20 percent rollover cap. [[Docket number 2383.1, p. 61]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) notes that mandated renewable biofuels volumes in the RFS2 program
are expected to quickly reach and exceed production in nearly every category. Under these
circumstances, unneeded limitations on RIN carryover from one year to the next could result in
some renewable biofuel production not being credited toward the mandated volumes and some
RINs could then expire unused. Since meeting the RFS2 increased renewable biofuel mandate
requirements will be difficult, EPA must avoid situations where it arbitrarily destroys valuable
RINs because of an unnecessary carryover limitation. [[Docket number 2393.1, p. 13]]
The commenter suggests that a larger RIN carryover cap could become beneficial to stakeholders
as the marketing year for U.S. corn straddles two calendar years and production of some
important renewable fuels (such as Brazilian sugar-cane based ethanol) is seasonal. Increased
flexibility could mitigate negative economic impacts during temporary periods of unfavorable
renewable fuel economics. [[Docket number 2393.1, p. 13]]
The commenter urges EPA to recognize that at the beginning of each year, obligated parties and
blenders must necessarily use biofuels that have the previous year's code to ensure continuity of
supply. The commenter believes that EPA should completely eliminate the RIN carryover cap. If
EPA decides to retain the cap, at a minimum EPA should raise the cap to a level that allows a
reasonable number of RINs actually generated in the previous year to be carried into the next
year without reducing the carryover allowance. In addition, to accommodate the fact that
beginning year inventories of biofuels blended into fuels sold in the current year could represent
up to 10% or 20% of the previous year biofuel production, the RIN carryover cap should be
raised from 20% to a minimum of 40%. [[Docket number 2393.1, p. 13]]
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RFS2 Summary and Analysis of Comments
Document No.: EPA-HQ-OAR-2005-0161-2396
Organization: CVR Energy
Comment:
The commenter (2396.1) requests that EPA provide a 50% rollover cap and the ability to
interchangeably utilize RINs. (2396.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2400
Organization: Murphy Oil USA, Inc.
Comment:
The commenter (2400.2) believes that eliminating the 20% RIN rollover cap would greatly
compromise compliance measures put into place and free flowing activity in the RIN
marketplace. The commenter recommends the 20% rollover cap be maintained at its current level
or raised to a 30% rollover cap. Eliminating the rollover cap requires obligated parties to obtain
their entire obligation in the current year which entails a potential obligation deficit. (2400.2, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2425
Organization: Petro Algae
Comment:
The commenter (2425) disagrees with the 20% RIN roll-over limit. There needs to be greater
rollover flexibility based on the higher renewable fuel volume requirements. This is critical to
provide more flexibility in the system. [[Docket number 2425.1, p. 7]]
Document No.: EPA-HQ-OAR-2005-0161-2471
Organization: Sutherland Asbill & Brennan LLP
Comment:
The rollover cap should not be decreased under any circumstances. The rollover cap provides
essential flexibility to meeting the mandates and allowing Obligated Parties to meet their RVOs.
(2471.1, p.12)
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) opposes EPA's proposal to limit the carryover of RINs to 20%. If EPA
must impose a cap on the amount of RINs that can be carried over, the commenter recommends
40%. If EPA must establish a RIN rollover cap, the cap should be large enough to provide
obligated parties with sufficient flexibility in the event the production of ethanol or other
renewable fuels is significantly constrained in any given year. Increasing the roll over cap to
40% would also help address a practical problem that has arisen due to the fact that RINs are
assigned at the time that renewable fuel is produced. (2505.2,p .8)
Our Response:
As described in Section III.D of the preamble, we continue to believe that a rollover cap is
necessary to implement EISA's restriction on the life of credits. We proposed that the 20% cap
established under RFS1 be maintained for RFS2, but took comment on values higher or lower than
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Chapter 5: Program Changes and Flexibilities
20%. The comments above highlight many of the same advantages and disadvantages of the 20%
rollover cap that we discussed in the NPRM, as well as in the RFS1 FRM. Commenters suggested
values ranging from 0% to 50%, with some suggesting that the cap be maintained at 20% and others
suggesting that the cap be eliminated entirely. A discussion of the advantages and disadvantages of
a higher or lower rollover cap can be found in Section III.D of the preamble.
In light of the comments received, we believe that the 20% level continues to provide the
appropriate balance between, on the one hand, allowing legitimate RIN carryovers and protecting
against potential supply shortfalls that could limit the availability of RINs, and on the other hand
ensuring an annual demand for renewable fuels as envisioned by EISA. Therefore, we are
continuing the 20% rollover cap for obligated parties for the RFS2 program.
5.4.2 Other Aspects of the Rollover Cap
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2047
Organization: Terrabon
Comment:
Commenter [[2071]] states they also propose that the current 20% rollover cap on excess RINs
would be modified to apply on a quarterly basis rather than an annual basis. They believe that
measuring compliance on an annual basis creates too much opportunity for gamesmanship
among the players in the renewable fuels industry. [[#2071.1 p.7]]
Our Response:
The rollover cap was put in place to effectuate the requirement in the CAA 211 (o) that
credits have a limited life. In essence, it prevents excess credits from being rolled over year after
year and building up over time. This is an annual limitation under the statute, so applying it
quarterly would go beyond the requirements of CAA 211 (o). Furthermore, applying the
restriction on a quarterly basis would require substantial changes and impose complicated
restrictions to the RIN program, for no clear purpose. We are not aware of any "gamesmanship"
going on as suggested by the commenter.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2471
Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter (2471.1) agrees with EPA that the rollover cap should be separately applied to
each of the four Obligated Party RVOs each year.
Our Response:
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RFS2 Summary and Analysis of Comments
We agree that the rollover cap should be separately applied to each of the four RVOs. If
the 20% rollover cap were applied only to the total renewable fuel RVO, an obligated party
could build up credits over time for one of the other three RVOs that could far exceed 20%.
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Renewable Fuel Standard Program
(RFS2) Summary and Analysis of
Comments
Chapter 6
Assessment of Renewable Fuel Production
Capacity and Use
Assessment and Standards Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
v>EPA
United States EPA-420-R-10-003
Environmental Protection r , „„.„
Agency February 2010
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6 ASSESSMENT OF RENEWABLE FUEL PRODUCTION CAPACITY AND USE
6.1 Control Case 6-1
6.2 Renewable Fuel Production 6-5
6.2.1 Biomass Feedstock Availability 6-5
6.2.2 Setting the Cellulosic Biofuel Standard 6-8
6.2.3 Imported Sugarcane Ethanol 6-14
6.2.4 Biodiesel and Renewable Diesel 6-14
6.3 Renewable Fuel Distribution 6-19
6.3.1 Renewable Fuel Distribution and Storage Considerations Through the
Petroleum Terminal Level 6-19
6.3.2 E85 Refueling Facility Accommodations 6-25
6.3.3 Misfueling of Non-Flex fuel Vehicles with E85 6-27
6.3.4 Potential Need for High Vapor Pressure Gasoline Blendstocks at Terminals
to Manufacture E85 6-29
6.4 Ethanol Consumption and the Blendwall 6-30
6.4.1 EPA Should Promote FFV/E85 Growth 6-30
6.4.2 Getting Beyond the Blend Wall with Non-Ethanol Renewables 6-32
6.4.3 Potential for Optimizing Vehicles for Increased Ethanol Use 6-33
6.4.4 FFV Production and E85 Utilization Assumptions 6-34
6.4.5 Retail Price Relationship of E10/E85 6-40
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RFS2 Summary and Analysis of Comments
6 ASSESSMENT OF RENEWABLE FUEL PRODUCTION CAPACITY AND USE
What We Proposed:
The comments in this section correspond to Section V of the preamble to the proposed
rule and address renewable fuel production capacity and use. A summary of the comments
received and our response to those comments are located below. Our updated assessment of
renewable fuel production and use can be found in Section IV of the preamble to the final rule.
Note that comments received on the Reference Case, and our responses to those comments, are
located in Chapter 7 of this Summary and Analysis of Comments Document.
6.1 Control Case
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter believes that if EPA implements its proposal to allow animal fats and waste
greases to be blended with vegetable oils to create a feedstock that will yield a vegetable oil
Biodiesel that meets a 50% GHG emissions reduction (relative), then animal fats and waste
greases will also be in high demand. If these regulations play out, the price of animal fats and
waste greases may rise close to the price of soy oil. This will have significant impact in the feed
market that uses animal fats and waste greases as animal feed. (0994.1, p. 15)
The commenter noted that the technology of an RD plant and the operating/management
personnel in an RD plant are much more sophisticated than a Biodiesel plant. Facility cost for an
RD plant is much more expensive than a Biodiesel facility. The commenter is aware of only one
RD plant being built in the U.S. Because the economic cost of an RD plant is so high, the
economic plant size is also quite large (50 - 75 million gal). This requires a large volume of
animal fats and greases. Most processors/suppliers of animal fats and greases already have
customers for these products. Pulling large volumes of these products away from existing
customers is not particularly attractive, considering the precarious nature of the biofuels industry.
On this basis we do not believe that there will be a large number of RD facilities built in the U.S.
(0994.1, pp. 15-16)
The commenter also does not believe that co-processing of animal fats in petroleum refinery
hydrotreaters will be a significant factor in the Biofuels mix. (0994.1, p. 16)
Our Response:
The commenter's statement with respect to blending of animal fats and waste greases are
no longer relevant given the lifecycle results for soy biodiesel in the final rule and the lack of a
need for averaging with waste oils.
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In the final rulemaking, we are not projecting any co-processing of rendered fats or
greases with petroleum for a variety of reasons, including the recent change in tax law that
reduces the incentive to co-process relative to stand-alone processing, as well as the different
operating parameters and pre-treatment demands of animal fats vs. petroleum that could make
co-processing cumbersome from an engineering point of view.
Our control case scenario conservatively projects only 150 MMgal/yr of RD production,
which is consistent with the commenter's statements about available feedstocks and capital costs.
Our analysis suggests that per-gallon production costs will be very similar for RD vs. biodiesel
produced from the same feedstock, despite the higher capital costs of the RD facility. The
question remains whether the fuel products produced by the RD plant will be of sufficiently high
value to favor construction of more RD plants in the long term that may displace biodiesel
production from the same feedstock, or garner new sources.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2143
Organization: New York State Department of Environmental Conservation
Comment:
The commenter (2143) believes that biobutanol and other renewable fuels have greater potential
than what the EPA's analysis suggests. (2143.2, p.8)
Our Response:
We recognize that there are other fuels with the potential to enter the market. For the
final rule we have modified our primary control case to model the impacts of increased
renewable fuel use using greater volumes of non-ethanol renewable fuels. For some of our
analyses where time permitted, we also assessed the impacts using a lower and a higher
assumption with respect to the ethanol makeup of the future renewable fuel volume. We believe
that for the purposes of assessing the impact of increased renewable fuels we chose a set of
renewable fuels which are within the range of possible future predictions. As new technologies,
feedstocks, and fuels emerge, our understanding of them will continue to evolve which may
warrant new evaluations and projections of those fuels, feedstocks, and technologies.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2302
Organization: UC Berkeley - Energy Biosciences Institute
Comment:
Commenter [[2302]] suggests reassessment of claims regarding possible impacts of Jatropha
cultivation on food production or prices, and suggests using a conversion factor of at least 100
gallons ethanol per ton for bagasse. [[#2302 p.6]]
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RFS2 Summary and Analysis of Comments
Our Response:
We have revised our assessment and no longer suggest that Jatropha will impact food
production or prices as we have not modeled its production at this time. We still include
background discussion on the potential of the crop in the RIA, Chapter 1.
We based our final rule ethanol conversion factors on work completed by the National
Renewable Energy Laboratory (NREL), modeling 92.3 gallons per ton for all agricultural
residues, switchgrass, and agricultural byproducts of processing such as bagasse and sweet
sorghum pulp in 2022. Although this is less than suggested by the commenter, we believe the
yield used is consistent across similar feedstocks and takes into account expert opinion on
biofuel feedstock processing. The conversion factor for bagasse used in the NPRM was around
70 gallons per ton based on previous assumptions and has since been revised. Table 1.5-46 of
the draft RIA, "tons used column" was rounded to the nearest million tons, and explains the
discrepancy noted by the commenter as states having different gallons per ton. In the table from
the draft RIA, Texas is noted as producing 1 million tons (more accurately 0.6 million tons was
projected to be used). If the more accurate number is used, yields for each state are actually
much closer than suggested. Yield assumptions, among other parameters were updated in our
agricultural modeling since the proposal and are further explained in the RIA, Chapter 1 and 5.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2336
Organization: SG Biofuels
Comment:
The commenter (2336) states that jatropha curcas is largely undomesticated. Unlike soy, canola
and corn, it has not been bred to maximize yields, minimize inputs and expand possible growing
ranges. With modern science, the commenter believes they have a huge opportunity to improve
this crop. Without addressing this key difference, EPA is comparing apples to oranges. Jatropha
as it exists today is nothing like what it will be even a few years from now. EPA has an
opportunity to encourage and speed the development of this crop, enabling significant reductions
in GHG on a much shorter timeline, as well as accelerating the identification of cold-tolerant
strains capable of thriving in southern regions of the United States. Even imports from Latin
American-based production could result in GHG reductions over petroleum based energy.
[[Docket number 2336.1, p. 1]] [[See docket number 2336.1, p. 1-5 for extensive discussion of
this issue.]]
The commenter disputes two statements (DRIA, 1.1.3.4.3 Jatropha Conclusions)
- The section opens with the statement, "It is unlikely that Jatropha curcas will be able to help the
United States meet its energy needs in the future without disrupting current food crops, water
resources, and other U.S. interests." On the contrary, the undomesticated Jatropha curcas has
huge potential to improve yields, reduce inputs, grow in more varied climates and further
improve many traits, unlocking a significant renewable energy solution for the US.
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Chapter 6: Assessment Of Renewable Fuel Production Capacity and Use
- The other statement the commenter disagrees with is "Even under optimal conditions, Jatropha
yields are unlikely to be radically different from that of other conventional oil plants thus, its
possible impact on US energy supply is limited." Even if yields are equivalent, there would be a
significant impact on US energy supply, but as the commenter has shown the yields are much
higher than other oil crops (50% to 245% higher). In addition, Jatropha is an undomesticated
plant that has had very little effort applied towards breeding for improved yields and reduced
inputs. Significant increases in the yields, cold tolerance, and other agronomically useful traits
can be expected over the next several decades since we are starting from a largely unimproved
base unlike soy and canola where all the easy gains have been already obtained. [[Docket
number 2336.1, p. 5]]
The commenter encourages EPA to include Jatropha oil in its analysis in order to encourage both
U.S. and Latin American interests to further develop the potential of this undomesticated crop for
energy use. Like any crop, Jatropha needs to be planted on the right land, in the right climate and
with the right management. As these aspects are perfected and teams of scientists like ours
conduct breeding and crop improvement programs, Jatropha will be even more successful.
[[Docket number 2336.1, p. 5]]
Our Response:
Since the proposal, we have reassessed our statements on Jatropha and no longer suggest
that Jatropha will impact food production or prices as we have not modeled its production at this
time. We agree that since Jatropha is a relatively new crop in the U.S. there is a large potential
for future improvements in many areas (e.g. yields, cold tolerance, etc.) and thus contribution
towards fuel production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) noted that in Section V.B.4, EPA states that the definition of Biodiesel
is sufficiently broad to include both Renewable Diesel and true Biodiesel (fatty acid methyl
ester). The commenter believes that this is a significant error. True Biodiesel is a fatty acid
methyl ester and Renewable Diesel (RD) is a synthetic hydrocarbon. While both fuels work in
diesel engines, they have different physical properties and are each defined in different ASTM
specifications. RD is included in the Diesel Fuel Oil ASTM specification. Biodiesel has its own
ASTM spec. RD as a petroleum product, can drop directly into the petroleum infrastructure such
as utilizing pipelines for distribution. Biodiesel cannot drop into this infrastructure. Biodiesel has
yet to be approved for distribution by pipeline because it is considered a contaminate that could
get into pipeline- transferred jet fuel. The press has not yet caught on to the correct use of the
terms Biofuels and Biodiesel, but it is important for EPA to support the distinction between the
two products. If not, people will be saying that RFS2 has now created four categories of
Biodiesel, when they mean four classes of biofuel. [[See Docket Number 0944.1, p. 16]]
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RFS2 Summary and Analysis of Comments
Our Response:
When we refer to the definition of biodiesel being broad, we are referring to the
definition under the Act established by Congress, which we are implementing through the RFS
standards. We believe our discussions of biodiesel and renewable diesel are generally clear
about the difference between methyl esters and the hydrocarbons made by RD processing,
including mention of the differences in storage and shipment requirements. However, in cases
where statutory language is broad enough to include both it is our intent to make compliance as
inclusive as possible.
6.2 Renewable Fuel Production
6.2.1 Biomass Feedstock Availability
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2143
Organization: New York State Department of Environmental Conservation
Comment:
The commenter points out that EPA does not elaborate on a projected production path for
cellulosic diesel and suggests that a detailed analysis of the expected production and distribution
costs and benefits of cellulosic diesel be presented. [[See Docket Number 2143.2, p.8]]
Our Response:
We have included an analysis of the potential for cellulosic diesel for the final rule. Refer
to Section 1.5.3 of the RIA for more information on current industry plans for cellulosic diesel,
Section 4.1 for production costs, and Section 4.2 for distribution costs.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2021
Organization: Fulcrum Energy
Comment:
The commenter (2021.1) noted that EPA requested comments on how to estimate urban waste
feedstock availability. This issue is discussed in detail in Attachment 1, a white paper entitled,
"Advancing Waste-Derived Biofuels As A Significant And Sustainable Low Carbon Fuel
Pathway: A Policy Brief." [[See Docket Number 2021.1, p.44. Refer to pp. 47-55 for whitepaper
on how to estimate urban waste feedstock availability]]
Our Response:
We appreciate the comments provided on estimating urban waste feedstock availability.
While our feedstock availability assessment for urban waste uses slightly different methodology,
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Chapter 6: Assessment Of Renewable Fuel Production Capacity and Use
assumptions, and data sources than that provided by the commenter, both estimates suggest that
urban wastes have a large potential towards providing fuel to meet the renewable fuels standard.
In general, we assume more conservative assumptions on the total amount of urban waste
generated, portion of that waste available after considering factors such as land filling,
composition of feedstock, moisture, and potential contamination, and conversion yields.
Therefore we estimate less available urban waste feedstock than suggested by the commenter.
Even so, we believe our estimates are reasonable given the assumptions made.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2302
Organization: UC Berkeley - Energy Biosciences Institute
Comment:
The commenter (2302.1) strongly suggests that EPA implement mechanisms for allowing each
state to submit their assessment of their potential biomass resources, as most states are currently
compiling or have compiled such assessments, and seek expert input from other relevant
agencies. In all cases, real data should always take precedence over that predicted from models.
[[See Docket Number 2302.1, p.4]]
Our Response:
The models employed in our assessments utilize data from states and other sources. We
welcome any new assessments of potential biomass resources that are available on a state-by-
state basis to be included in our future analyses.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2316
Organization: University of Minnesota
Comment:
The commenter (2316.1) is concerned about the amount of corn stover and other crop residues
potentially available for use as feedstocks for advanced and cellulosic biofuels. The current
analysis as reported in this Proposed Rulemaking suggests that 444.4 million tons of corn stover
will be available in 2022, that 122 million tons could be harvested sustainably in the top 12 corn
producing states, and that 82 million tons could be harvested to produce 7.8 billion gallons of
ethanol. These estimates are too high because of an error in correction for grain moisture and the
use of outdated stover-to-grain ratios. Rather, it is more likely that 250.2 million tons of corn
stover will be available in 2022, which would leave an insufficient amount sustainably
harvestable to produce the goal of 7.8 billion gallons. Residues from other crops should also be
adjusted accordingly. I am including a detailed description of these corrections and adjustments
in Appendix B. [[See Docket Number 2316.1, p.2]]
Our Response:
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RFS2 Summary and Analysis of Comments
We have updated our assessment for the final rule and project 4.9 ethanol-equivalent
billion gallons will be derived from corn stover based on the FASOM model. This volume is
less than that projected for the proposal (7.8 ethanol-equivalent billion gallons), resulting in
fewer residues required to be collected for processing into fuel. We account for grain moisture
as well as stover-to-grain ratios based on literature available to us at the time and have better
clarified whether we are referring to dry or wet tons of residues available in our updated
analyses. We are continually updating our analyses to take into account new data and
assumptions for future analyses.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2493
Organization: American Forest & Paper Association
Comment:
The commenter (2493.1) states that utilities and independent power generators are likely to
increase their use of wood biomass in response to state and national mandates/incentives
regarding renewable energy and carbon emissions, and that this would present significant
challenges in terms of woody biomass supply and forest sustainability. [[See Docket Number
2493.1, p. 6]]
Our Response:
We acknowledge that there could be competing needs for renewable biomass feedstocks
as other requirements are put in place at the National, State, or local level for renewable
electricity. However, we believe our projections of cellulosic biomass for producing renewable
fuels are supportable even with such future competition.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2350
Organization: BioEnergy Producers Association
Comment:
The commenter (2350) believes that as non-food derived resources, carbon-based wastes
represent the nation's most promising and virtually untapped renewable energy resource—some
500 million tons of which are readily available for conversion to energy. The commenter states
that upcoming technologies could produce enough ethanol from these resources to eliminate the
nation's need to import petroleum. [[See Docket Number 2350, p. 1]]
Our Response:
We agree that non-food derived resources will play a large role in helping our nation
meet EISA. As suggested by the commenter and described in our analyses, potential feedstocks
used for biofuel production may include agricultural residues, forestry biomass, certain
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Chapter 6: Assessment Of Renewable Fuel Production Capacity and Use
renewable portions of municipal solid waste and construction and demolition waste, and energy
crops.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0964
Organization: Citizen
Comment:
The commenter (0964) believes that the value placed in corn-based ethanol as a fuel additive is
misguided. The commenter cites two federal studies and a Wall Street Journal editorial
("Ethanol's Grocery Bill", June 2, 2009). The commenter states that growing native grasses for
ethanol would be a lot easier and cheaper than cultivating a domesticated crop such as corn. (P.
1)
Our Response:
There are many potential benefits to the use of perennial grasses, such as reduced
fertilizer inputs, higher total biomass yields per unit of land area than comparable annual species,
and the ability for a perennial species roots to remain in the soil after harvesting above-ground
biomass. Our analyses suggest that perennial grasses will play a major role as feedstocks
necessary to help meet EISA's cellulosic biofuel requirement of 16 billion gallons by 2022.
While the potential is there, there are still challenges that must be addressed before
perennial species can be grown and harvested at a commercial scale (e.g., establishing contracts
between farmers and biofuel producers, developing optimal harvest techniques and equipment).
These challenges are currently being investigated by researchers at universities, industry groups,
as well as government laboratories around the world. As such, it is important to recognize that
many of our conventional crops that have already had many years of experience being grown and
harvested will have some cost advantages over relatively newer feedstocks and are also likely to
play a role in meeting the total renewable fuels requirement of 36 billion gallons by 2022.
6.2.2 Setting the Cellulosic Biofuel Standard
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393.1) believes that the Agency analysis of the potential volumes of cellulosic
fuels that it expects to be available in 2010 is far too optimistic and based on inadequate
documentation. Internal commenter analysis suggests that less than 10 MMG will be produced in
2010, but EPA is projecting almost 145 MMG of ethanol-equivalent fuels. The RFS2 mandates
100 MMG of ethanol-equivalent fuels. Other independent assessments of the projected growth of
cellulosic ethanol through 2022 indicate that domestic production is likely to be billions of
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RFS2 Summary and Analysis of Comments
gallons short of the EISA mandates. The commenter believes that the waiver decision for the
following year should be based on demonstrated rated (existing continuous operation for at least
three months) annual capacity as of the required November 30 notice. This is a concrete standard
that is not subject to subjective projections. [[See Docket Number 2393.1 and refer to pp. 34-40
for a more extensive discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2110
Organization: Chevron
Comment:
The commenter (2110.1) believes that EPA should adjust the cellulosic biofuel requirement
under Section 202 (e) of EISA to reflect a more credible estimate of fuel availability than was
presented in the now outdated NPRM. The commenter believes that the volumes of cellulosic
biofuel projected to be available in the NPRM are overly optimistic and inconsistent with the
current state of the technology and commercial scale-up by the cellulosic biofuels industry. The
commenter believes that the issuance of a cellulosic biofuel waiver under EISA section
211 (0) (7) (d) is essential for the first year of the RFS2, at the very least. The waivered amount
should be no greater than the actual production as of November 30 of the previous year when, by
statute, EPA must determine applicable percentages for the following year. [[See Docket
Number 2110.1, p.4]]
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130.1) states that EPA's assessment of forward year cellulosic ethanol
production capability must be realistic, and based on actual demonstrated commercial production
capability. When assessing new technologies, EPA must adopt a higher standard that capability
must be demonstrated both in terms of the actual fuel being produced and the capacity of the
plant to operate reliably at some demonstrated operating capacity. Obligated parties must not be
put in the position of being forced to carry deficits forward due to the unreliability of new
technology or overly optimistic acceptance of new technology claims. [[See Docket Number
2130.1, pp. 4 & 10]]
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233.1) believes the Agency's analysis of the potential volumes of cellulosic
fuels that it expects to be available in 2010 is far too optimistic. Internal commenter analysis
suggests that less than 10 MMG will be produced in 2010, but EPA is projecting almost 145
MMG of ethanol-equivalent fuel. The RFS2 mandates 100 MMG of ethanol-equivalent fuels.
The commenter goes on to explain that EPA's NRPM assessment contains several errors in
projected cellulosic capacity, including relying on Cello Energy for 78% of the volume. The
commenter acknowledges that it is difficult to identify a credible path for rapid cellulosic
production capacity growth that might meet the aggressive targets mandated in EISA. However,
EPA cannot base its estimate of the next year's cellulosic biofuels production on advertising,
propaganda, or mere company statements of production intents. EPA must base its estimate on
current year actual production. The commenter concludes by recommending that EPA
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Chapter 6: Assessment Of Renewable Fuel Production Capacity and Use
immediately invoke the cellulosic waiver protocols for 2010 and 2011. The commenter's
analysis indicates that the EISA mandates are not going to be achieved at any time in the near- or
mid-term (3-7 years). As such, EPA will need to routinely waive the existing EISA cellulosic
mandates. EPA should do so in a manner that will not penalize gasoline blending companies
because of the failure of the cellulosic ethanol industry to meet EISA goals. [[See Docket
Number 2233.2, pp. 40-42]]
Document No.: EPA-HQ-OAR-2005-0161-2400
Organization: Murphy Oil USA, Inc.
Comment:
The commenter (2400.2) reiterates that "EISA requires in section 202 (e) that the Administrator
set the cellulosic biofuel standard each November for the next year based on the lesser of the
volume specified in the Act or the projected volume of cellulosic biofuel production for that
year." The commenter believes that EPA should avoid a situation that forces obligated parties to
pay for the lack of investment by biofuel companies. The commenter recommends that the EPA
calculate the standards as they set forth in section III.I.I. This will ensure that the obligations for
cellulosic blending are based off attainable levels. [[See Docket Number 2400.2, p.7]]
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical & Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that it is critical when EPA is making its annual assessment of
cellulosic biofuel capability that they rely on demonstrated production capability. As evidenced
in this proposal, reliance on "planned" capability for such new and unproven technologies is
fraught with great risk. EPA's reliance on plans by one potential cellulosic biofuel supplier to
supply 70% of the 2010 cellulosic biofuel volume with as yet undemonstrated technology is not
an appropriate evaluation of capability. As evidenced by recent publicity, Cello Energy is yet to
demonstrate the production of any cellulosic biofuel and has had a judgment in the amount of
$10.4 million entered against them by an Alabama jury that found their technology claims to be
fraudulent. When assessing new technologies, EPA must adopt a higher standard that capability
must be demonstrated both in terms of the actual fuel being produced and the capacity of the
plant to operate reliably at some demonstrated operating capacity. Obligated parties must not be
put in the position of being forced to carry deficits forward due to the unreliability of new
technology, or EPA's overly optimistic acceptance of new technology capability claims. [[See
Docket Number 2124.1, p. 19]]
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell and Motiva Enterprises
Comment:
According to the commenter (2505.1), although EPA has proposed not to waive the cellulosic
renewable fuel requirement for 2010, EPA has not adequately evaluated whether there will in
fact be 100 million gallons of production of cellulosic ethanol in 2010. The commenter is
doubtful that there is in fact 100 million gallons of existing production capacity. Recent news
articles about Cello are counter to the EPA's assessment in the NPRM. EPA should do a
thorough analysis of the availability of cellulosic ethanol and adjust the RFS2 standards
accordingly.
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Document No.: EPA-HQ-OAR-2005-0161-2389
Organization: BlueFire, Coskata, INEOS Bio and Fulcrum Bioenergy
Comment:
The commenters (2389.1) believe that the long-term goal of 16 billion gallons per year of
cellulosic biofuels is achievable but they do not believe that the industry will be capable of
producing the volumes targeted for 2010. In no way should this be viewed as a failure of the
RFS. The ambitious EISA targets are driving significant investments and speeding technology
advancements in cellulosic ethanol production. As these technologies demonstrate their
commercial viability, rapid deployment and scale up to meet the near and long-term targets will
occur. Congress showed great foresight in allowing EPA discretion to waive the annual targets to
ensure compliance is met by obligated parties. Congress specifically instructed the Administrator
to reduce volume to what is "available." EISA Sec. 202 directs that the "Administrator shall
reduce the applicable volume of cellulosic biofuel required under paragraph (2) (B) to the
projected volume available during that calendar year". This requirement addresses the prospect
that the petroleum industry would be held to account for purchasing fuel that could not be
produced in sufficient quantities. It is essential that the Administrator follow Congressional
direction and reduce the cellulosic volume to a level in which there can be reasonable confidence
of availability. This will relieve the petroleum industry of any obligation to purchase fuel that the
cellulosic biofuel industry is not able to produce. Secondly, it will serve the larger Congressional
objective of ensuring that any cellulosic biofuel that is produced will have a market. A critical
third benefit of the Administrator taking this approach is to promote confidence in the ability of
the RFS to function properly, which will provide political support for the regulation. [[See
Docket Number 2389.1, pp. 1-2]]
Document No.: EPA-HQ-OAR-2005-0161-2526
Organization: Coskata
Comment:
The commenter (2526.1) believes that the annual cellulosic biofuel standards should be set
prudently. The market conditions resulting from EPA's implementation of a Sec. 202 waiver
(and the corresponding credit provisions) will have a profound effect on the industry's ability to
meet Congressional targets for production in the middle and later stages of the RFS2 program.
EPA's approach could enable and accelerate the deployment of cellulosic biofuel production
technology. Alternatively, if not properly implemented, it could destabilize the market for
cellulosic biofuels and increase investment risk, delaying indefinitely the potential for these
technologies to make significant contributions to the nation's fuel supply.
According to the commenter, the cellulosic biofuel industry is not likely to be capable of
satisfying the ambitious targets Congress set for cellulosic production in the early years of the
program. Congress anticipated this and established authorities in Sec. 202 (e) (2) (D) to enable
smooth implementation of the RFS while the industry develops to a degree that is capable of
meeting the scale of production envisioned by EISA. To ensure that the RFS creates optimal
market conditions for rapid deployment of cellulosic biofuels, the applicable volume for
cellulosic biofuels should be set annually to reflect the volume of cellulosic biofuels that EPA
has a high degree of confidence will be available the following year, while allowing an extra
"stretch-goal" to induce new capacity growth. [[See Docket Number 2526.1, pp. 1-2]]
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Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont
Comment:
The commenter (2146.1) acknowledges that EISA requires EPA to set the cellulosic biofuel
standard each November for the following year, based on either the volume specified by the Act
or the projected production volume for that year, whichever is lower. While many companies,
including DDCE, are making progress toward bringing pilot- and commercial-scale production
facilities on line, the commenter believes it is likely that the volumes of cellulosic ethanol
available for blending into the US gasoline supply will fall short during the next 2-3 years.
Therefore, we support the process proposed by EPA for conducting a yearly review and
rulemaking process to determine cellulosic ethanol volumes, thereby both ensuring an outlet for
the early cellulosic volumes produced and eliminating the requirement for the fuel industry to
purchase volumes larger than those anticipated to be available for their purchase. [[See Docket
Number 2146.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2248.1
Organization: logen
Comment:
The commenter (2248.1) recommends that EPA maximize the benefits of the RFS by reducing
the applicable volume for cellulosic ethanol (CE) based on the agency's best assessment of
available CE, and limit the use of EPA-issued cellulosic biofuel credits. The result will be a
more favorable and predictable environment for businesses looking to commercialize CE. [[See
Docket Number 2248.1, p. 2]]
The requirement for EPA to reset annually the applicable volume for cellulosic ethanol based on
the volume of CE that will be "available" addresses the prospect that the petroleum industry
would otherwise be held accountable for purchasing a fuel that could not yet be produced in
sufficient quantities. By directing the Administrator to reduce the applicable volume to the
amount "available", Congress established the volumes in EISA for cellulosic ethanol as targets,
rather than mandates. It is essential that the Administrator follow Congressional direction and
reduce the applicable volume to a level agency assessments suggest will be available. Setting
reasonably accurate volumes will bolster private sector confidence that political support for this
policy is stable, and will lead to an increased appetite to commit resources to developing the
industry. Precise estimates of availability for the following year will not be achievable. The
Administrator should produce a reasonable estimate based on production facilities in operation
and projected start-up dates for facilities expected to become operational in the following year.
[[See Docket Number 2248.1, p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2329
Organization: Renewable Fuels Association
Comment:
According to the commenter, Congress specifically limited EPA's discretion to reduce the RFS
volume mandates. Any reduction in volumes must comply with the waiver provisions in Section
21 l(o) (7). 42 U.S.C. § 7545(o) (7). The circumstances warranting a waiver under Section
21 l(o) (7), i.e., lack of domestic supply, are simply not present.
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Document No.: EPA-HQ-OAR-2005-0161-2047
Organization: Terrabon
Comment:
The commenter (2047.1) objects to the EPA's determination that the industry can produce 100
million gallons of cellulosic biofuels in 2010. The commenter claims EPA is operating on
erroneous information regarding the production of plants to meet the 100 million gallon
cellulosic biofuel standard in 2010. According to the commenter, several of the plants EPA
depended on for producing fuel will not be online when EPA expected, e.g., Cello Energy,
Range Fuels, etc. [[See Docket Number 2047.1, pp. 9-10]]
Document No.: EPA-HQ-OAR-2005-0161-2137.1
Organization: The Brazilian Sugarcane Industry Association (UNICA)
Comment:
The commenter (2137.1) believes EPA is well prepared to finalize the RFS2 in a defensible
posture in a manner that promotes Congress' intent by addressing a number of issues including
waiving the cellulosic biofuel requirements at this time to allow advanced biofuels to satisfy the
cellulosic mandates. [[See Docket Number 2137.1, p. 13]]
Our Response:
We agree with some of the concerns raised by refiners and biofuel producers with respect
our preliminary assessment that that nation could meet the 100 million gallon cellulosic biofuel
standard set by EISA in 2010. As explained in Section IV.B.3.b of the preamble, in the NPRM,
we conducted an assessment of the cellulosic biofuel industry to arrive at the conclusion that it
was possible to uphold the 100 million gallon standard based on current and anticipated
production. At the time of our April 2009 NPRM assessment, we were aware of a handful of
small pilot and demonstration plants that could contribute to meeting the 2010 standard, but the
largest volume contributions were expected to come from Cello Energy and Range Fuels. We
also included production from a number of companies with plans to bring small pilot or demo
plants online in 2010.
Since our April 2009 industry assessment, there have been a number of changes and
delays in production plans due to technological, contractual, financial and other reasons. Cello
Energy and Range Fuels have delayed or reduced their production plans for 2010. And Range
Fuels will begin operations at its commercial plant in Soperton, GA by producing methanol (not
ethanol). In addition, some of the small plants expected to come online in 2010 have pushed
back production to the 2011-2012 timeframe. However, we have also become aware of other
potential suppliers of cellulosic biofuel in 2010. Based on our revised industry assessment and a
supply estimate provided to us by EIA on October 29, 2009 (required under section 211 (o) (3) (A)
per EISA), we believe that a small amount of cellulosic biofuel could be produced and/or
imported to the United States to contribute to the 2010 cellulosic biofuel standard. As this time,
we believe the six most likely suppliers of cellulosic biofuel in 2010 are Cello Energy, DuPont
Danisco Cellulosic Ethanol, Dynamotive, Enerkem, Fiberight and KL Energy (discussed in more
detail in Section IV.B.3.b of the preamble and Section 1.5.3 of the RIA). As such, we are using
our Cellulosic Biofuel Waiver Authority under section 211 (o) (7) (D) (i) to finalize a reduced 6.5
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million gallon ethanol-equivalent standard based on EIA's supply estimate, which we agree
represents a reasonable volume of cellulosic biofuel that could potentially be produced and made
commercially available in 2010. While we acknowledge there they is still uncertainty
surrounding the industry's ability to supply this volume of cellulosic biofuel, we believe a 6.5
million ethanol-equivalent standard is defensible based on our recent supply assessment, EIA's
assessment, and also in-line with the intent of EISA.
As raised by several comments, EPA could have taken a more conservative approach and
limited the cellulosic standard to only those facilities that were online and/or operating
continuously for some period of time (e.g., three months) at the time of our assessment.
However, we believe this strategy could hinder the growth of this up-and-coming industry. For
example, consider a plant that came online in December after we set the standard for the
following year in November. This producer could be excluded from having a market for its
cellulosic biofuel for up to 13 months. Such action could hamper future investments in cellulosic
biofuel. Furthermore, since we are setting a standard that we are reasonably confident can be
met based on recent supply assessments (including meetings with a number of companies), we
do not anticipate that obligated parties will be faced with the burden of carrying deficits forward
or purchasing credits for a fuel that cannot be produced in sufficient quantities.
6.2.3 Imported Sugarcane Ethanol
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2137
Organization: Brazilian Sugarcane Industry Association (UNICA)
Comment:
The commenter (2137.1) urges EPA, when looking at yields, to carefully consider Total
Recoverable Sugars (TRS) yield (kilograms of sugars per ton of crop) increases as well as
traditional yield measures (metric tons of crops per acre). In addition, the FAPRI model appears
to ignore this essential aspect of sugarcane. [[Docket Number 2137.1, pp. 6-7]]
Our Response:
In our assessment we look at both crop yields (tons/acre) as well as ethanol conversion
yield projections (gallons/ton). We believe that by considering improvements in ethanol yield,
we essentially consider improvements in TRS yields since greater sugars per ton generally means
greater yields at the facility.
6.2.4 Biodiesel and Renewable Diesel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2151
Organization: Darling International Inc.
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RFS2 Summary and Analysis of Comments
Comment:
The commenter (2151.1) believes that there are sufficient amounts of waste animal fat and
greases to fulfill the renewable fuel volume requirements and still support other uses. The
commenter believes that a significantly higher portion than the 30% of rendered animal fats and
recycled cooking oils suggested by EPA in the NPRM can be diverted without impacting the
supply to these other customers. The commenter believes at least 52% of the rendered animal
fats and recycled cooking oil supply is available for use in the biofuels sector. [[See Docket
Number 2151.1, p.2. Refer to Attachment A (2151.2) for a more detailed discussion of the basis
that there are sufficient waste animal fats and waste greases to meet both the non-feed and
biofuels requirements.]]
Document No.: EPA-HQ-OAR-2005-0161-2084
Organization: Syntroleum
Comment:
The commenter (2084.1) states: the reason we expect limited impacts on domestic industry if
animal fats are used for renewable diesel is that the U.S. currently exports roughly as much
animal fat as would be needed to produce the renewable diesel. Approximately 2.8 billion
pounds of animal fat would be needed to produce the renewable diesel, but the U.S. exported 2.4
billion pounds. The remaining amount needed is relatively small given that the U.S. produces
approximately 11 billion pounds of animal fat annually. [[See Docket Number 2084.1, p.4]]
Document No.: EPA-HQ-OAR-2005-0161-2149
Organization: Dynamic Fuels, LLC
Comment:
The commenter (2149.1) expects limited potential impacts on domestic industry based on the use
of animal fats for renewable diesel, both for the anticipated production volumes of biomass-
based diesel and other advanced biofuel. The commenter believes that expanding the use of
animal fats for biodiesel production, as a replacement for virgin oils, would likely have a severe
negative impact on domestic industry. An additional 5 billion pounds of animal fats would be
needed to produce the biodiesel volumes that EPA suggests may derive from virgin plant oils.
(See Docket Number 2149.1, pp.4-5)
Document No.: EPA-HQ-OAR-2005-0161-2364
Organization: Tyson Foods, Inc.
Comment:
The commenter (2364.1) noted that they expect limited impacts on domestic industry if animal
fats are used for renewable diesel as the U.S. currently exports roughly as much animal fat as
would be needed to produce the renewable diesel. However, the commenter does believe that
expanding the use of animal fats for biodiesel production, as a replacement for virgin oils, would
likely have a severe negative impact on domestic industry. [[See Docket Number 2364.1, p.5]]
Our Response:
Our primary control case in the final rulemaking projects a total use of approximately 3
billion Ibs of rendered fat and grease feedstocks for biofuel by 2022. One factor in this decision
is our revised expectation that corn oil extraction at dry mill ethanol plants will provide a
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Chapter 6: Assessment Of Renewable Fuel Production Capacity and Use
significant amount of inexpensive feedstock for biofuel production by 2022; also we're not sure
it is reasonable to expect diversion of larger amounts of rendered fats (including exports) without
other undesirable consequences in other markets. However, if it does become feasible, our
program allows for it.
Use of this quantity of fats and greases for biofuels is consistent with a statement we
received from the National Renderer's Association during our drafting of the proposal, stating
that it seemed possible for as much as 30% of supply of rendered materials (or about 3 billion
Ibs) to be diverted to biofuels without severe impacts on other domestic uses. After the proposal,
we received comments and some analysis from Darling International also suggesting use of this
quantity of material would be feasible.
We continue to project a significant amount of soy oil will be used for biodiesel
production, as there is a close relationship between many soy processors and biodiesel producers
(some companies do both operations). Despite any reduction of soy oil use in food products, its
price has not declined in any sustained manner, likely due to its increasing use elsewhere in the
world as a food product. Thus, the biodiesel industry has continued to seek out cheaper
feedstocks to remain viable and competitive.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2106
Organization: Endicott Biofuels II, LLC
Comment:
The commenter (2106.1) suggests that EPA strongly consider setting more aggressive targets for
biomass based diesel beginning in 2013 to provide the necessary pricing signals to the market to
incent advancement of new technologies. The commenter's analysis based upon a compilation
of NREL, USDA, US Bureau of Labor & Statistics, and National Renderer's Association data
concludes there is enough energy dense fats and oils neutral and non-neutral materials to support
over 2 billion gallons of biomass based diesel already in the marketplace in the U.S. If foreign
sources are included, the total is much higher. Technology exists today to convert these
feedstocks into high quality methyl esters. The commenter also suggests that the only barrier to
utilization of these feedstocks is the price differential to crude oil and that the 30% suggested
restriction is overly conservative. Therefore, we suggest the EPA target significantly greater
than 1 billion gallons of biomass-based diesel in 2013 and beyond. [[See Docket Number 2106.1,
p. 5]]
Our Response:
For our analyses for this final rulemaking, we have increased our projected quantity of
biodiesel made from rendered fats and greases; we also project significant additional volume of
biodiesel will be made oil extracted as a co-product of dry mill ethanol production. To the extent
that other sources of fats, oils, and non-neutral feedstocks become available at good prices, we
expect they will be used to generate RINs in the Advanced Biofuel category. We will continue to
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RFS2 Summary and Analysis of Comments
assess the market for biomass-based diesel and take that information into consideration in
subsequent rulemaking actions to set standards for 2013 and beyond as required by the Act.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2110
Organization: Chevron
Comment:
The commenter (2110.1) believes that EPA should support the removal of barriers to the
development of renewable diesel established in EISA which call into question EPA's optimistic
outlook. [[Refer to Docket Number 2110.1, p.5 for a more detailed discussion of this issue.]]
Our Response:
As acknowledged by the commenter, the prohibition on inclusion of co-processed
renewable diesel is part of the statutory language, and not something EPA can simply overlook.
Consistent with this limitation and other factors, we have reduced the projected volume of
renewable diesel to 150 MMgal/yr in this final rulemaking.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2010
Organization: SoyMor Biodiesel, LLC
Comment:
The commenter (2010) says that in order to stay competitive in the petroleum diesel fuel
marketplace, biodiesel plants have invested in pretreatment processes to allow for multi-
feedstock conversion to biodiesel. Looking to the future, biodiesel plants must be allowed to
utilize a robust source of multiple feedstock options if the biomass-based diesel volume
mandates are to be achieved. Moreover, spreading feedstock sources toward multiple options
will not only be economically advantageous to the fuel market, but will relieve pressure on high-
protein food industries by making available millions of more pounds of additional soybean meal.
[[Docket number 2010.1, p. 10]] [[See docket number 2010.1, pp. 10-12 for discussion of
feedstock utilization for biodiesel and renewable diesel.]]
Document No.: EPA-HQ-OAR-2005-0161-2011
Organization: Western Dubuque Biodiesel LLC
Comment:
The commenter (2011) says that in order to stay competitive in the petroleum diesel fuel
marketplace, biodiesel plants have invested in pretreatment processes to allow for multi-
feedstock conversion to biodiesel. Looking to the future, biodiesel plants must be allowed to
utilize a robust source of multiple feedstock options if the biomass-based diesel volume
mandates are to be achieved. Moreover, spreading feedstock sources toward multiple options
will not only be economically advantageous to the fuel market, but will relieve pressure on high-
protein food industries by making available millions of more pounds of additional soybean meal.
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Chapter 6: Assessment Of Renewable Fuel Production Capacity and Use
[[Docket number 2011.1, p. 10]] [[See docket number 2011.1, pp. 10-12 for discussion of
feedstock utilization for biodiesel and renewable diesel.]]
Document No.: EPA-HQ-OAR-2005-0161-2013
Organization: Central Iowa Energy, LLC
Comment:
The commenter (2013) says that in order to stay competitive in the petroleum diesel fuel
marketplace, biodiesel plants have invested in pretreatment processes to allow for multi-
feedstock conversion to biodiesel. Looking to the future, biodiesel plants must be allowed to
utilize a robust source of multiple feedstock options if the biomass-based diesel volume
mandates are to be achieved. Moreover, spreading feedstock sources toward multiple options
will not only be economically advantageous to the fuel market, but will relieve pressure on high-
protein food industries by making available millions of more pounds of additional soybean meal.
[[Docket number 2013.1, p. 10]] [[See docket number 2013.1, pp. 10-12 for discussion of
feedstock utilization for biodiesel and renewable diesel.]]
Document No.: EPA-HQ-OAR-2005-0161-2510
Organization: Iowa Renewable Energy, LLC
Comment:
The commenter (2510) states that when their facilities were built, they invested in additional
equipment that allows them to process not only "virgin" plant oils, but also animal fats, recycled
plant oils, and used cooking oils from the food industry. This allows the commenter to utilize
many feedstocks and helps recycle many pounds of products that would normally be discarded,
buried, or inefficiently used for other purposes. When grains are process for eventual use in the
food industry, vegetable oil is a by-product. If more corn and soybeans for food are grown, there
will be more oil available which becomes available for biodiesel fuels and it creates value in the
form of jobs, fuel to replace foreign oil, and more value to the grower and the distribution chain
involved. [[Docket number 2510.1, p. 6]]
Document No.: EPA-HQ-OAR-2005-0161-2210
Organization: e-biofuels, LLC
Comment:
The commenter (2210) states that the biodiesel industry is developing alternative sources of
feedstocks which will be more sustainable and have less of a negative environmental impact.
These feedstocks will become more readily available as the industry progresses. The commenter
adds that, as the biodiesel industry moves forward, the keys to growth lie in the development of
sustainable and practical products that can be efficiently converted into a fuel that can be used
for various energy applications. There are a lot of initiatives out there to find what will be the
next breakthrough in biodiesel development, yet it is important to remember that we are dealing
with a fuel that is very simple and it needs to stay that way. [[See Docket Number 2210, p. 1 and
refer to pp. 1-2 for further discussion of the biodiesel industry.]]
Our Response:
We recognize that biodiesel facilities have been increasing their ability to process a
variety of feedstocks and therefore have assumed in the final rule that biodiesel plants will utilize
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RFS2 Summary and Analysis of Comments
a mix of virgin plant oils, animal fats and recycled oils, as well as potentially new sources such
as algal oil in the future. Our primary control case projects a mix for 2022 of approximately
40% virgin vegetable oil (primarily soy), 40% low-grade corn oil extracted from dry mill ethanol
production, 15% animal fats and greases, and 5% algal oil or similar advanced feedstocks. (See
RIA Chapter 1.1 for more details.) We expect biodiesel use to grow under the program outlined
in this rulemaking, and a diversification of feedstocks will be an important factor for reducing
swings in production cost and mitigating negative environmental impacts.
6.3 Renewable Fuel Distribution
6.3.1 Renewable Fuel Distribution and Storage Considerations Through the Petroleum
Terminal Level
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2147
Organization: Engine Manufacturers Association
Comment:
The commenter (2147.1) recommends that EPA further evaluate the logistics required to
coordinate the production and use of the renewable fuel requirements as specified by EISA.
(Page 10)
Document No.: EPA-HQ-OAR-2005-0161-2103
Organization: Association of American Railroads
Comment:
The commenter (2103.1) noted that the preamble states that "it should be feasible for the
distribution infrastructure upstream of the terminal to accommodate the additional freight
associated with these RFS2 standards especially given the lead time available." The commenter
agrees with this assessment, as long as rail capacity needs are properly addressed. The capacity
issue is so important that a further discussion of it is warranted. (2103.1, p.3) [[See Docket
Number 2103.1, pp.3-5 for a detailed discussion of this issue]]
The commenter also noted that the NPRM correctly noted that if unit trains are to be an option,
smaller-capacity ethanol producers may need to store product until enough ethanol is ready to fill
a unit train, or more than one producer may need to share a train. This is already happening at
some locations. (2103.1, p.4)
The commenter does not agree with the statement in the preamble that a "number of additional
rail terminals are likely to be configured for receipt of unit trains of ethanol for further
distribution by tank truck or other means to petroleum terminals. The placement of ethanol unit
train receipt facilities at rail terminals would be particularly useful in situations where petroleum
terminals might find it difficult or impossible to install their own ethanol rail receipt capability.
We anticipate that ethanol storage will typically be installed at rail terminal ethanol receipt hubs
over the long run. We do not anticipate that the rail industry will experience substantial
difficulty in installing such ethanol-specific facilities once a clear long term demand for ethanol
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Chapter 6: Assessment Of Renewable Fuel Production Capacity and Use
in the target markets has been established to justify the investment." The commenter believes
that railroads should not be viewed as responsible for providing, or likely to provide, ethanol
receipt and storage capability, just as they generally do not provide receipt and storage capability
for the commodities. (2103.1, p.4)
Document No.: EPA-HQ-OAR-2005-0161-2329
Organization: Renewable Fuels Association
Comment:
The commenter made some statements regarding analysis in the DRIA of the production and
distribution of ethanol. With regards to the Overview of Ethanol Distribution section, the
commenter noted that EPA stated that ethanol cannot be shipped by pipeline because it can cause
stress corrosion cracking. This has not been established as applying to pipelines, and work is
ongoing and various mitigation strategies are being investigated. (2329.1, p. 100)
With regards to the Shipment of Ethanol to Petroleum Terminals section, the commenter noted
that EPA assumes 50 percent of new unit train facilities will be located at petroleum terminals
and 50 percent at rail terminals. But, it is highly unlikely that 50 percent of petroleum terminals
would install unit train rail receipt capability. (2329.1, p. 100)
With regards to the Rail Transportation System Accommodation section, the commenter noted
that EPA referred to space at rail terminals which would be highly unlikely to accommodate
truck traffic. EPA stated that "rail terminals" would hold minimal inventories believing
petroleum terminals would hold the buffer inventory. Thus far it has been the hub distribution
terminals that hold the buffer inventory. (2329.1, p. 100)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter expresses concerns about the renewable fuel distribution. [[Docket number
2233.2, pp. 54-55]]
The commenter states that driver shortages have impacted the overall trucking industry, and
legislation currently under consideration to retire existing tank truck designs has the potential to
reduce their availability. [[Docket number 2233.2, pp. 56]]
The commenter expresses concerns related to the necessary system accommodations for rail,
marine, and road transportation systems but concludes that despite the concerns, there are no
obvious constraints to the distribution of biofuels, biofuel feedstocks, and biofuel byproducts.
The commenter believes that EPA should monitor the market conditions for these transportation
modes to ensure unexpected problems do not develop into problems that impact the ability to
meet RFS volume requirements and believes that a full infrastructure study should be done to
identify potential problems. [[Docket number 2233.2, pp. 55-57]]
The commenter expresses concerns related to the current rail receipt capability at terminals,
including: the limited receipt capability at existing terminals; the extent to which the installation
of ethanol receipt facilities at rail terminals can help to meet the need to bring ethanol by rail to
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RFS2 Summary and Analysis of Comments
petroleum terminals; and the lack of available land at existing terminals on which to build new
rail receipt capability. The commenter believes alternative transport methods need to be found
and implemented to bring ethanol to petroleum terminals. Additionally, EPA makes assumptions
regarding "cooperation" among terminals with and without rail receipt capability and increased
truck traffic. [[Docket number 2233.2, pp. 57-58]]
Regarding biodiesel distribution, the commenter notes that EPA fails to mention the precluding
nature of biodiesel transport via pipeline, which serves to increase the likelihood that truck will
be the dominant transport method for biodiesel. Jet fuel, commonly transported via pipeline,
cannot currently be transported via any pipeline transporting biodiesel. For pipelines that
transport jet fuel, the commenter believes that the risks of contamination to the jet fuel may be
too high and carry too great a cost to justify any benefit. [[Docket number 2233.2, pp. 54-55]]
Document No.: EPA-HQ-OAR-2005-0161-2420
Organization: Magellan Midstream Partners
Comment:
The commenter (2420.1) disagrees with EPA's conclusions with regards to pipelines and had
hoped that that EPA would recognize the need to transform the traditional transportation system
for ethanol to make it more efficient. The commenter noted that pipelines are the safest, most
reliable and efficient way to transport large volume of liquid energy from where it's produced to
where it's consumed. In addition, pipelines offer reduced GHG emissions when compared to
traditional modes used to transport ethanol. (2420.1, p.6)
Document No.: EPA-HQ-OAR-2005-0161-2345
Organization: Independent Fuel Terminal Operators Association (IFTOA)
Comment:
Regarding the capacity of terminals to receive rail shipments, the commenter (2345) the
commenter strongly disagrees that terminals could modify existing petroleum tanks to
accommodate increased volumes of renewable fuels and does not believe that the addition of
new ethanol storage tanks at existing rail terminals will help to address the storage problem. The
commenter concludes that the increased renewable fuels will put additional strain on the
distribution system and substantially increase the costs of the fuel [[Docket number 2345.1, pp.
5-6]]
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP)
Comment:
The commenter (2384) notes the unwarranted assumption that renewable fuels have the same
physical and chemical characteristics as fossil fuels and gasoline/ethanol blends of up to 10%
ethanol. In fact ethanol is significantly more corrosive than gasoline and E10 which is of direct
importance to the suitability of storage and dispensing devices currently in place at retail fuel
outlets. The commenter adds that it is know that there are compatibility issues with biodiesel in
the fuel dispensing system. The commenter notes that Underwriters Laboratories has not yet
certified a complete E85 refueling dispenser. [[Docket number 2384.1, pp. 7-8]]
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The commenter (2384) believes that until the necessary infrastructure material compatibility
issues can be resolved, there will be an inadequate domestic supply of safe and legally compliant
fuel to achieve the renewable fuel volume obligations. Until then, EPA should consider
exercising its authority to waive the renewable fuel volume requirements in whole or in part if it
receives a petition to do so or may do so on its own initiative. [[Docket number 2384.1, p. 10]]
In addition the commenter urges EPA to conduct a through review of the retail fuel outlet
infrastructure and the impact it will have on the industry's ability to achieve the renewable fuel
volume requirements [[Docket number 2384.1, p.l 10]]
Document No.: EPA-HQ-OAR-2005-0161-2362
Organization: Canopy Prospecting, Inc. And Trinidad Dehydration Company, Limited
Comment:
The commenter (2362.1) states that EPA's draft rule fails to mention the improved continuity
and security of supply that Caribbean Basin Economic Recovery Act (CBI) ethanol dehydration
plants offer in case of disruption of shipments from Brazil or from the U.S. Midwest to coastal
U.S. destinations. In the event that U.S. or Brazilian produced ethanol delivery is delayed to
coastal locations, CBI dehydrated ethanol will fill the gap until supply is restored. [[Docket
number 2362.1, p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter states that EPA appears to be unaware that EISA effectively prevents
comingling of refinery-produced renewable diesel with petroleum-based diesel. Section V.C.3
of the proposed rulemaking makes no mention of EISA Section 205 which requires retail
labeling of the qualifying biomass-based diesel content of any blend over 5% by volume.
Tracking from refinery to retail is not possible at present. Because of this impediment, the
development of renewable diesel is severely hampered and EPA's optimistic outlook is
unjustified. Renewable gasoline is similarly disadvantaged. [[Docket number 2393.1, p. 33]]
The commenter provides additional detailed comments related to fuel distribution, including
biodiesel distribution, necessary system accommodations for rail, marine, and road transportation
systems, terminal rail receipt issues, and the need for additional E85 facilities. [[Docket number
2393.1, pp. 57-61]] [[See docket number 2393.1, pp 57-61 and docket number 2393.5,
Attachment 4 for a detailed discussion of this issue.]]
Our Response:
We conducted an analysis of the fuel distribution infrastructure changes (and associated
capital costs) that will be needed to support the transport of the volumes of biofuels needed to
meet the RFS2 standards (see Sections 1.6 and 4.2 of the RIA). The accommodation by the rail
transportation system of the increased freight load anticipated from the transport of biofuels is
discussed in Sections 1.6.3 and 1.6.4 of the RIA.
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RFS2 Summary and Analysis of Comments
In the NPRM, we projected that biofuel unit train receipt facilities would be located at
petroleum terminals and existing rail terminals. Based on industry input regarding the logistical
hurdles in citing unit train receipt facilities at petroleum/existing rail terminals, we now project
that such facilities will be constructed on dedicated property with rail access that is as close to
petroleum terminals as practicable.1 Thus, we believe that it is most appropriate to assume that
all biofuel storage tanks needed at such facilities would be new construction. We recognize that
there may be some opportunity for idled terminal storage facilities to be reactivated to provide
biofuels storage. However, we have no information regarding the extent to which such facilities
might exist and whether their location would suit the needs of a unit train receipt facility. We
acknowledge that some unit train receipt facilities might be linked to petroleum terminals by
pipeline, thereby limiting the amount of biofuel storage capacity needed at such facilities.
However, due to uncertainties regarding the extent to which this would be possible, we opted to
assume that all unit train receipt facilities would ship biofuels to petroleum terminals via tank
truck.
In the NPRM we projected that trans-loading of biofuels from rail cars to tank trucks at
rail terminals would be an interim measure until biofuel storage tanks were constructed at rail
terminals.2 Based on industry input, we now expect trans-loading will be a long-term means of
transferring manifest rail car shipments of biofuels received at existing rail terminals to tank
trucks for delivery to petroleum terminals. Therefore, we are projecting that rail terminals will
handle biofuel manifest rail car shipments by trans-loading as they do today. The use of trans-
loading eliminates the need for biofuel storage tanks at rail terminals to facilitate the transfer of
biofuels from manifest rail cars to tank trucks.
We continue to believe that a substantial fraction of the biofuel storage capacity that we
project will be needed at petroleum terminals to support the RFS2 volumes can be
accommodated through the retrofitting of existing storage capacity currently used to store the
volumes of petroleum fuels that biofuels will displace. As biofuel use ramps up over time
thorough the projected increase in the use of E85 and cellulosic distillate fuel/renewable diesel
fuel, less petroleum-based fuel will be needed as a fraction of the total volume of motor fuel
used. Thus, it seems reasonable to assume that some of the existing storage tanks will be
available to be switched over to biofuel storage service. We understand that the storage capacity
for petroleum-based fuels at terminals must be sufficiently large to permit the receipt of the
minimum batch sizes shipped by petroleum pipelines. However, we do not believe that the
projected transfer of the petroleum-based fuel storage capacity to biofuel service will be of
sufficient magnitude to impede the continued receipt of pipeline batches of petroleum-based
fuels. We estimated that it costs $5 per barrel of storage capacity to prepare a gasoline storage
tank to make it suitable for storing ethanol. We project that cellulosic distillate fuel/renewable
diesel will be compatible with existing petroleum fuel distribution infrastructure. Therefore, we
assumed that the costs associated with preparing a diesel storage tank for cellulosic distillate
fuel/renewable diesel fuel service will be negligible.
1 Existing unit train receipt facilities have primarily followed this model. See the US Development Group's
interactive map of their ethanol unit train receipt facilities at http://www.us-dev.com/terminals.htm
2 Trans-loading refers to the direct transfer of the contents of a rail car to a tank truck without the intervening
delivery into a storage tank.
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We believe that the biofuel storage capacity that we project will be constructed at unit
train receipt facilities may provide some buffer to lessen the amount of additional biofuel storage
needed at terminals. In planning the construction of unit train facilities, discussions will take
place between the unit train receipt facility's owner and the petroleum terminals that the facility
will serve. During these discussions a determination will be made regarding the delivery
schedule for shipment of biofuels by tank truck to petroleum terminals. To the extent that
petroleum terminals have difficulty in accommodating large volumes of biofuel storage capacity,
it may be possible for unit train receipt facilities to deliver biofuels to petroleum terminals on
more of a just-in-time basis than via large periodic deliveries. This would tend to displace the
need for some of the biofuel storage volume that we projected would be needed at petroleum
terminals to unit train receipt facilities.
To understand the impact of RFS2 volume requirements on transportation infrastructure, we
commissioned an analysis by Oak Ridge National Laboratories (ORNL) to examine biofuel
transportation, activity, and potential distribution constraints for North American waterways,
roadways, and freight rail system. The analysis found that biofuels transport is expected to
constitute a small portion of the total freight tonnage for all commodities transported through
2022. The results suggest that it should be feasible for transportation infrastructure to
accommodate the additional biofuels freight associated with the RFS2.
We acknowledge that CBI ethanol dehydration plants represent an important segment of
the nation's ethanol supply system. A large percentage of our forecasted ethanol imports are
projected to come through the CBI.
Based on our analysis of the number of tank truck drivers needed support shipment of
biofuels to meet the RFS2 standard, we believe that the availability of tank truck drivers should
not represent a serious issue. See Section 1.6.6 of the RIA. We do not believe that the changes
to the specifications for tank trucks under consideration cited by the commenter will result in a
shortage of available tank trucks for the shipment of biofuels.
We understand that various strategies are being investigated to mitigate the corrosion
issues associated with shipping ethanol by pipeline. We noted in the RIA that a short pipeline in
Florida apparently has resolved these issues and is shipping ethanol in batch mode in an existing
pipeline which also ships gasoline. Other larger pipelines also hope to develop similar
mitigation strategies which will allow the shipment of ethanol. However, the results of these
investigative efforts are not yet in and concerns related to corrosion still prevent the vast majority
of pipelines from shipping ethanol. We understand that jet fuel contamination concerns currently
limit the ability to ship biodiesel by pipeline. Biodiesel blends are currently being shipped on
some pipelines that do not handle jet fuel. We assumed that all biofuel transport would take
place by rail car, barge, and tank truck due to uncertainties regarding the extent to which
pipelines can play a greater role in biofuel transport in the future and the potential timetable
when such a change may take place. We acknowledge that the efficiency and reliability of
biofuel distribution would likely be significantly improved to the extent that pipelines can play
an increasing role in biofuel transport.
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RFS2 Summary and Analysis of Comments
Our analysis recognizes that there are special considerations associated with the
distribution of ethanol and biodiesel due to difference in their chemical/physical nature compared
to petroleum-based fuels. We acknowledged that ethanol storage tanks would need to be
constructed of materials that are ethanol tolerant. We also projected the need for significant new
retail storage and dispensing infrastructure at retail facilities to handle E85. We did not assume
that any existing retail dispensing/storage equipment would be retrofitted to allow it to be used
for E85 service. We acknowledged that biodiesel storage/blending/and transport vessels would
need to be insulated and/or heated to prevent biodiesel gelling during cold conditions. Existing
retail storage and dispensing equipment is suitable to handle biodiesel blends up to 5 volume
percent provided that fuel meets accepted industry consensus fuel quality specifications. To the
extent that there may be biodiesel fuel quality issues from certain manufacturers which may
results fuel infrastructure compatibility issues, we believe that such issues can be addressed
through industry consensus specifications such as those developed by ASTM and enforced at the
State level. We believe that cellulosic distillate fuel and renewable diesel fuel will be confirmed
to be sufficiently similar to petroleum-based diesel fuel so as to not result in any unique materials
compatibility concerns in the fuel distribution system.
We understand that Underwriters Laboratories has yet to certify a complete E85
dispenser. All dispenser parts other than the hose which connects the dispenser to the nozzle
have passed the necessary testing. We believe that there is no technical barrier in finding a hose
that would meet the testing requirements. Therefore, we believe that UL certifications for
complete E85 dispensers will be achieved by fuel dispenser manufacturers in sufficient time to
facilitate the installation of the E85 retail facilities that we project will be needed to support the
RFS2 volumes.
While the pump labeling provisions required by EISA section 205 may constrain the use
of renewable diesel fuel and/or biodiesel due to the difficulty of tracking in a fungible system the
concentration of biomass-based diesel in the final product, we believe that it should still be
possible for the biomass-based diesel volumes required by the EISA to be sold.
We believe that it may be possible for the necessary fuel distribution infrastructure to be
put in place in time to support the use of the RFS2 volumes. To the extent that problems might
arise in making the needed fuel distribution upgrades which jeopardize meeting the RFS2
volumes, EPA may consider the need to waive a portion of the renewable fuel volume
requirements.
6.3.2 E85 Refueling Facility Accommodations
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) believes that EPA has greatly overestimated the likely success of E85.
The commenter supports the incorporation of ethanol into existing gasoline grades that can be
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used in today's vehicle fleet. EPA should recognize that at this time, E85 is only compatible
with approximately three percent of motor vehicles, and generally requires dedicated storage
tanks and dispensers constructed from materials that are compatible with E85. The commenter is
concerned that widespread introduction of E85 alongside conventional gasoline grades will
further increase supply chain complexity, which in turn may increase vulnerability to supply
disruption, especially during times of regional or national crisis. [[Docket number 2505.2, p.16]].
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) does not believe E85 is a commercially viable fuel and does not believe
sufficient volumes of E85 can be introduced without significant misfueling occurring.
The commenter discusses the need for additional E85 facilities and EPA's proposed estimates for
retail facilities. The commenter also points out issues with the effectiveness of automatic tank
gauges in E85 tanks due to the ability to E85 to absorb high quantities of water without inducing
phase separation.[[Docket number 2233.2, pp. 59-60]]
Finally, the commenter believes that EPA should clarify the legal status of Retail Blender pumps.
[[Docket number 2233.2, p. 64]] .[[See docket number 2233.2, pp. 64-65 for further discussion
of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2152
Organization: Minnesota Coalition for Ethanol
Comment:
The commenter [2152] stated that one way to address the ethanol "blend wall" would be to
expand the number of ethanol blender pumps available to consumers to support the sale of
blends between El5 and E85 for use in FFVs.
Our Response:
We recognize that E85 requires dedicated retail storage and dispensers. We believe that
it may be possible for retailers to provide sufficient access to E85 refueling facilities. See
sections 1.6 and 4.2 of the RIA for a discussion of the accommodation of such facilities at retail
and the associated costs. See section 6.4 of this document for a discussion of E85 pricing and
flex-fuel vehicle considerations.
We understand that there are issues with maintaining the functionality of automatic tank
gauges used with E85 underground storage tanks. We believe that such issues can be resolved so
as not to impede the projected expansion in E85 refueling infrastructure to support the use of the
RFS2 volumes.
We believe that the main potential concern regarding how the more widespread use of
E85 might complicate the fuel distribution system is associated with the potential need for
special high vapor pressure petroleum-based blendstocks at terminals to manufacture E85 that
meets ASTM minimum volatility specifications. We believe that industry is fully capable of
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RFS2 Summary and Analysis of Comments
addressing this issue through the ongoing ASTM processes. This could include new
specifications for E85 (or introduce another specification for flex-fuel vehicle fuel) to allow such
fuel to be manufactured with commonly-available gasoline blendstocks (by lowering the
minimum ethanol content specification). Therefore, we believe that the more widespread use of
E85 which we project will take place to help meet the RFS2 volumes will not substantially
increase the vulnerability to supply disruption.
To support the use of the volume of ethanol that we project would be used to meet the
RFS2 standards, we modeled a scenario that is based on the addition of E85 refueling
infrastructure to supply E85 to FFVs. Only FFVs are currently approved to use the >E10 ethanol
fuel blends dispensed from blender pumps. Any use of blender pumps in lieu of our assumptions
regarding FFV refueling from E85 dispensers would result in the need for additional FFV
refueling facilities, additional FFVs, and increased FFV refueling frequency with >E10 blends.
6.3.3 Misfueling of Non-Flex fuel Vehicles with E85
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233.2
Organization: Marathon
Comment:
The commenter states that EPA should drop the provisions covering E10+ labeling requirements
when finalizing this rule. Since EPA is not proposing to approve an E10+ fuel at this time , it
would be more appropriate and make more sense for EPA to establish the El0+ labeling
requirements after they have approved an E10+ fuel.
The commenter states that there are considerable misfueling concerns about rolling out large
volumes of E85 in the same market as E10. E85 will have to be priced lower than E10, if a large
volume of E85 is needed for mandate compliance. This lower price will probably encourage
consumers to use E85 in vehicles that will be damaged by these fuels.
The commenter states that EPA must undertake a robust public information campaign to educate
the population about the potential effects of misfueling. Marathon supports an approach that
addresses misfueling using both methods - advisory and preventative, as needed. Unintentional
misfuelings will most likely rise as different fuels intended for a specific subset of the vehicle
population enter the marketplace. These misfuelings may be adequately addressed using advisory
methods, such as public education programs, color-coding nozzles, or tactile stimuli on the
nozzle handle. However, a significant number of misfuelings that occur are intentional and
therefore may not be necessarily mitigated by advisory methods.
The commenter states that misfueling non-FFV vehicles with E85 may present significant
misfueling concerns, but testing of the legacy fleet with E85 must be completed to determine
how serious the potential problems may be so that a determination can be made as to whether
advisory or preventive measures are required at retail. The commenter states that the likelihood
of needing preventive measures for E85 misfueling would seem more probable than for mid-
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Chapter 6: Assessment Of Renewable Fuel Production Capacity and Use
level blends. If a preventative measure such as nozzle size differences is chosen, not only will
pump nozzles need to be changed, but existing FFVs will also need to be retrofitted (as would
the portion of the legacy fleet eligible to use mid-level blends if a nozzle size difference is
needed as a preventive measure to prevent mid-level blend misfueling). Whether the preventive
measure chosen is nozzle size differences, a card issued to the customer to enable the use of a
unique fuel blend, or some interaction between the pump and customer, each option involves
significant infrastructure and educational hurdles that must be addressed, with the help of the
Federal Government, before any mid-level ethanol blend can be approved or the use of E85
expanded significantly.
Whether the options chosen are advisory or preventative misfueling measures, or both, if
implemented as directed by the Federal Government, such measures must provide retailers and
suppliers with liability protection should misfueling take place. Fuel retailers and suppliers
cannot and should not be responsible for customers misfueling their vehicles in the presence of
adequate, government directed measures to advise/prevent against its occurrence.
Document No.: EPA-HQ-OAR-2005-0161-2132.1
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter notes that they are pleased EPA has proposed to require a new warning label for
marketers who sell, dispense or offers for sale ethanol blends containing more than 10% v/v
ethanol.
The commenter recommends adding information about the energy content of the fuel to the fuel
dispenser label, for all fuels (including biodiesel-diesel fuel blends) containing an energy value
that is 96% or less than that of the federal emission test fuel. The label should use BTU/gal (or
KJ/liter, where liters are used) to compare with the federal test fuel and inform consumers about
the estimated impact of the fuel on their volumetric fuel economy. Specifically, the pump label
should advise consumers that using such a fuel will provide lower fuel economy than indicated
on the Monroney (fuel economy) label that came with their new vehicle and is indicated in their
owner's manual.
Document No.: EPA-HQ-OAR-2005-0161-2143.2
Organization: New York State Department of Environmental Conservation
Comment:
The Department supports the proposed labeling requirements for gasoline-ethanol blends
containing more than 10 volume percent ethanol (Proposed 40 CFR 80.1469).
We support this labeling provision, but the exact wording will have to depend on the outcome of
the El 5 section 211 (f) waiver review. While effective pump labels may do little to prevent
intentional misfueling with blends greater than E10, they should provide significant
environmental and consumer protection benefits by helping minimize accidental misfueling.
Our Response:
We proposed labeling requirements for fuel dispensers that handle greater than 10
volume percent ethanol blends which included the following text: For use only in flexible-fuel
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RFS2 Summary and Analysis of Comments
vehicles, May damage non-flexible-fuel vehicles, Federal law prohibits use in non-flexible-fuel
vehicles. This proposal was primarily meant to help address concerns about the potential
misfueling of non-flex-fuel vehicles with E85, in light of the anticipated increase in E85 sales
volumes in response to the RFS2 program. All ethanol blends above 10 volume percent were
included due to the increasing industry focus on ethanol blender pumps that are designed to
dispense a variety of ethanol blends (e.g., E30, and E40) for use in flex-fuel vehicles.
EPA is currently evaluating a petition to allow the use of up to 15 volume percent ethanol
in non-flex fuel vehicles. One potential result of this evaluation might be for EPA to grant a
partial waiver that is applicable only for a subset of the current vehicle population. Under such
an approach, a label for El5 fuel dispensers would be needed that identifies what vehicles are
approved to use the fuel.
Based on the public comments and the fact that EPA has not completed its evaluation of
the El 5 waiver petition, we believe that it is appropriate to defer finalizing labeling requirements
for >E10 blends at this time. This will afford us the opportunity to complete our analysis of what
measures might be appropriate to prevent misfueling with >E10 blends before this may become a
concern in the context of the RFS2 program.
6.3.4 Potential Need for High Vapor Pressure Gasoline Blendstocks at Terminals to
Manufacture E85
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) states that EPA is incorrect in its assumption that certified gasoline
currently on hand at terminals can be used to make up the non-ethanol portion of E85;
The commenter (2233) raises several E85 concerns including the commenter's decision to stop
all E85 sales; and the forthcoming ASTM revision of E85's specification. [[Docket number
2233.2, pp. 23-24]] [[See docket number 2233.2, pp. 23-27.]]
The commenter expresses concerns related to E85 terminal blending. The commenter believes
that because of seasonal maximum vapor pressure specifications in ASTM D 4814, as well as
EPA's summertime RVP and RFC regulations, certified gasoline on hand at terminals cannot be
used to blend E85 that consistently meets seasonal minimum vapor pressure specifications in
ASTM D 5798. Therefore, EPA's assumption that certified gasoline currently on hand at
terminals can be used to make up the non-ethanol portion of E-85 is incorrect. The commenter
adds that while ASTM activities may facilitate the outcome, there is no reason to assume the
current ASTM activities will completely change this outcome. [[Docket number 2233.2, p. 58]]
Regarding butane/pentane blending, the commenter states that most companies currently have
little or no butane/pentane blending capability. Of those member companies that have this
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capability, the butane/pentane blending capability exists at a small percentage of their terminals.
The commenter adds that the primary objection to adding this capability at terminal sites is the
lack of space for new storage infrastructure. Terminals are currently maximizing all available
storage space. [[Docket number 2233.2, pp. 58-59]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter urges that EPA reanalyze the impact of manufacturing, distributing, and
marketing E85 under the assumption that a third component will be needed to meet ASTM vapor
pressure minima for E85. [[Docket number 2393.1, pp. 22-24]] [[See docket number 2393.1, pp
21-24 for further discussion of issues associated with E85 blending.]]
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) stated that they expect ASTM to resolve current issues related to
difficulties in meeting E85 minimum volatility specifications by amending the ASTM
specifications for E85.
Our Response:
It appears that ASTM may be successful in adjusting the specifications for E85 (or
introducing an new specification for flex-fuel vehicle fuel) so that gasoline blendstocks
commonly found at petroleum terminals can be used to blend E85 (and/or such a flex-fuel
vehicle fuel) which complies with ASTM minimum volatility specifications.3 If these ASTM
efforts are not successful, butane or some other special gasoline blendstock would be needed to
manufacture E85 that complies with ASTM minimum volatility specifications. We understand
that few petroleum terminals currently have butane blending capability. We conducted a
sensitivity analysis to assess the costs of supplying butane to petroleum terminals to assist in the
manufacture of E85 which complies with minimum volatility specifications. The analysis found
that such equipment can generally be installed for approximately $1.5 million per system. In
instances in which blenders lack nearby space for new storage infrastructure, tankage for butane
blending can be located more than 1,500 feet from the point of injection. See Sections 1.6.8 and
4.2.1.1.10 of the RIA for a discussion of the potential need for special blendstocks at petroleum
terminals for E85 blending and the associated costs.
6.4 Ethanol Consumption and the Blendwall
6.4.1 EPA Should Promote FFV/E85 Growth
3 One option under consideration by ASTM is to develop a new specification for "flex-fuel vehicle fuel". The term
"E85" would not be used in such a specification. The minimum ethanol content specification of such a "flex-fuel
vehicle fuel" would be set sufficiently low to allow minimum ASTM volatility specifications without the need for
high volatility gasoline blendstocks. A similar approach has been taken regarding the specifications for flex fuel
vehicle fuel in Canada.
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RFS2 Summary and Analysis of Comments
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0897
Organization: Citizen
Comment:
One commenter (0897) asks EPA to do more to help the conversion to ethanol by encouraging
GSA auto use of E85, starting a matching fund program for converting pumps to E85, and
encouraging states to require new stations to offer E85. In addition, the commenter notes that
EPA flex fuel car mileage estimates are wrong—the estimates use flat-rate estimates based on
BTU content compared to gasoline, rather than gathering actual E85 data. [[See Docket Number
0897.pp.l-2]]
Document No.: EPA-HQ-OAR-2005-0161-2329
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that EPA should continue to promote expansion of E85 use.
Even health groups support the expansion in use of E85. As noted in testimony by Blake Early of
the American Lung Association, E85 is seen an important benefit of the RFS because: flexible
fuel vehicles must certify to the same emissions standards as gasoline; E85 is lower in
evaporative emissions than gasoline; and, from a volume perspective, every gallon of E85
consumes eight times more ethanol than E10. [[See Docket Number 2329.1, p. 106]]
Our Response:
Aside from being subject to government fleet alternative-fuel vehicle requirements, EPA
does not have the authority to implement FFV mandates and/or E85 infrastructure requirements.
The purpose of today's rulemaking is not to promote or discourage E85 specifically but rather
put in place the RFS2 program set by Congress in the Energy Independence and Security Act of
2007 (EISA). While we acknowledge that there are several challenges associated with getting
beyond the E10 blend wall, at the present time, E85 and FFVs are the only legal means for
consuming more than 14-15 Bgal of ethanol and thus the focus of our biofuel consumption
assessment. However, for the final rule, we have also considered the impact of more non-ethanol
advanced biofuels.
With respect to the citizen's comment that the FFV E85 usage calculations presented in
Section 1.7.1.2.4 of the DRIA were based on average VMT and MPG estimates made for FFVs
in the fleet in 2007. The intent was to compute the theoretical FFV E85 consumption potential if
all FFVs in the fleet were to fuel on E85 100% of the time and compare it back to actual reported
E85 consumption as a basis for discussing today's low E85 refueling rates. We agree it might be
helpful to apply actual FFV fuel economy data instead of fuel economy estimates based average
fleet characteristics. However, we are not aware of any recent FFV fuel economy estimates that
look at all 1998-current MY FFVs and compute a current fleet-average fuel economy. As such,
we chose to rely on published or otherwise accepted industry data. For the FRM, we relied on
FFV fleet characteristics consistent with information used in the proposed Light-Duty Vehicle
GHG Rule. For more information, refer to Section 1.7.4 of the RIA.
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6.4.2 Getting Beyond the Blend Wall with Non-Ethanol Renewables
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2143
Organization: New York State Department of Environmental Conservation
Comment:
The commenter (2143.1) notes that in EPA's impact analyses for the NPRM, ethanol remains the
dominant renewable fuel. Purely hydrocarbon-based gasoline would be replaced by a
combination of E10 and E85. The requisite quantity of ethanol flexible fuel vehicles (FFVs)
would be produced and sold and motorists would select the required volumes of E85 to meet the
RFS2 standards. Cost-effective production methods for cellulosic ethanol would be invented and
the needed production facilities brought on line (to the virtual exclusion of any other cellulosic
product). Feedstock crop production would increase to meet fuel production demands. The
commenter believes there are many alternative scenarios that are as likely, or more likely to
occur, than the one depicted in the DRIA. We believe that EPA has overestimated the use of E85
in FFVs and underestimated the use of intermediate blends in FFVs. [[See Docket Number
2143.2, p. 8]]
Document No.: EPA-HQ-OAR-2005-0161-2241
Organization: Outdoor Power Equipment Institute (OPEI); Alliance for a Safe
Alternative Fuels Environment (A11SAFE)
Comment:
The commenter (2241.1) believes that EPA should explore the possibility of avoiding the blend
wall through the use of non-ethanol cellulosic biofuels, and we encourage EPA to incentivize
second and third-generation renewable fuels that are compatible with the existing fuels
infrastructure and will benefit, rather than harm, air quality and products. (2241.1, p.20)
Document No.: EPA-HQ-OAR-2005-0161-2310
Organization: Low Carbon Synthetic Fuels Association (LCSFA)
Comment:
The commenter (2310) encourages EPA to support another option for avoiding the ethanol blend
wall that EPA explored in the preamble, namely the production of cellulosic biofuels other than
ethanol. EPA specifically cited the potential of F-T fuels to deliver volumes that would avoid the
ethanol blend wall and associated infrastructure issues. The commenter believes that F-T fuels
can provide a critical solution to simultaneously meeting the mandates and protecting existing
vehicles, equipment, and, most importantly, air quality. Thus, the commenter strongly
encourages EPA to adopt a regulatory framework that will promote fuels that help engines,
vehicles, and equipment run cleaner, more efficiently, and with reduced emissions across the
board for all air pollutants. [[Docket number 2310.1, p. 2]] [[See docket number 2310.1, pp. 1-2
for further discussion of this issue.]]
Our Response:
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RFS2 Summary and Analysis of Comments
We agree with the New York State Department of Conservation, OPEI, A11SAFE,, and
the Low Carbon Synthetic Fuels Association that there are varying ways the RFS2 requirements
could be met in the future, e.g., with increased ethanol, diesel fuel replacements, etc. For the
NPRM, we based our impact analyses on a volume scenario which assumed the bulk of the RFS2
standards (i.e., cellulosic biofuel standard) would be met with increased ethanol use. This was
intended to be a simplifying assumption for analysis purposes, although consistent with the
direction of many industry investments at the time.
For the final rule, as explained in Section IV.A of the Preamble and Sections 1.2.2 and
1.2.3 of the RIA, we have analyzed the impact of many of our analyses on three potential
renewable fuel growth scenarios, two of which assume considerably higher use of non-ethanol
renewable fuels than the NPRM. While we are not suggesting that these are the only potential
future outcomes, we believe it is beneficial to measure the impacts of varying levels of ethanol
use ranging from 17.5 to 33.2 billion gallons in 2022. Our primary control case used throughout
our analyses assumed 22.2 billion gallons of ethanol (corn, imported sugarcane, and cellulosic)
in 2022.
6.4.3 Potential for Optimizing Vehicles for Increased Ethanol Use
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2048
Organization: BioPure Fuels
Comment:
The commenter (2048.1) recommends that EPA look at possible incentives for optimizing the
energy benefits from timing adjustments in flex fuel cars by determining if there are studies
being done in Brazil evaluating the fuel economy of ethanol in new cars that have timing
adjusted for ethanol vs. gasoline. This could be used to consider various incentives that could be
offered to auto companies to get vehicles optimized for ethanol fuel efficiency in the event
ethanol is much less expensive and readily available, as is now true in Brazil. These incentives
could include mixed alcohol and bio-butanol. (2048.1, p.6)
Our Response:
The assumption throughout the RFS2 rulemaking is that ethanol's fuel economy is
directly proportional to its energy density and its concentration in the fuel. Accordingly, an FFV
refueling on E85 would get 22% worse fuel economy than the same FFV refueling on E10, or
24% worse fuel economy than when refueling on conventional gasoline (EO).4 As
acknowledged in Section 4.4.1.5 of the RIA, some studies have suggested that ethanol's decrease
in fuel economy may be less than its relative decrease in volumetric energy content of the fuel.
However, we believe the results could be premature and maybe even a function of how the
4 Based on the assumption that E85 contains 74 vol% denatured fuel ethanol on average, E10 contains 10 vol%
ethanol and ethanol and non-oxygenated gasoline have LHVs of 77,012 BTU/gal and 115,000 BTU/gal,
respectively.
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testing was conducted than the true effect of ethanol on fuel economy. We intend to investigate
this further as additional data becomes available.
With respect to vehicles, we acknowledge that the majority of vehicles on the road were
not optimized to burn ethanol with respect to engine design, controls and fuel delivery methods.
Automakers could alter vehicle design to allow vehicles to more efficiently burn ethanol, namely
optimize FFVs to handle E85. However, it is unlikely that automakers will optimize many new
FFV product lines to handle E85 until they see an increase in E85 refueling rates and even less
likely that in-use vehicles would be optimized in any way. As explained in Section 1.7.4 of the
RIA, we estimate that FFVs with reasonable access to E85 in 2008 were only refueling on it 4%
of the time on average.
6.4.4 FFV Production and E85 Utilization Assumptions
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
With regards to FFV mandates, the commenter (2132.1) believes that the numbers of existing
and planned FFVs are sufficient to achieve near-term ethanol consumption targets, and as the
fuel infrastructure expands and becomes more established with consumer-friendly prices, market
demand will drive additional FFV growth as it has elsewhere. (2132.1, p.26) [[See Docket
Number 2132.1, pp.24-25 for a detailed discussion on FFV mandates]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) states that it is unreasonable for EPA to require obligated parties to blend
more than can be sold as approved fuel blends for use in suitable vehicles and distributed through
approved infrastructure. Obligated parties cannot be held responsible for activities outside of
their control, and EPA should create reasonable mandates each year to ensure sufficient RIN
availability to allow industry to comply with the RFS regardless of where EPA places the
obligation. [[Docket number 2393.1, p. 5]]
The commenter (2393) states that there are essentially two solutions that have been proposed to
move beyond the blend wall: increased use of E85 and mid-level blends. The commenter's
issues with E85 are the rapidity with which the number of FFVs in operation is increasing (and
will increase in the future) and in the likelihood that FFV operators will use E85 fuel. Even if the
domestic automakers meet public commitments to make 50% of their new vehicles as FFVs by
2012, API does not believe that there will be a sufficient number of FFVs in operation to
consume the volumes of renewable fuels required to meet the RFS2 mandate. The commenter
incorporates by reference the Sierra Research Report included as Attachment 4 to their
comments. [[See Docket Number 2523.1, p.17-18]]
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RFS2 Summary and Analysis of Comments
The commenter acknowledges that many states have adopted California vehicle emission
standards. It is our understanding that FFVs have difficulty meeting these standards, particularly
at the lower test temperatures required. Thus, FFV penetration into California and the other states
may be hindered. The commenter also points out that if gasoline demand falls (as it is currently
doing), there will be even less gasoline volume to absorb ethanol, and the blend-wall will likely
come sooner.
Even if the domestic automakers meet public commitments to make 50% of their new vehicles as
FFVs by 2012, the commenter doubts that there will be a sufficient number of FFVs in operation
through 2020 to address the problem. The commenter points out that EPA assumes in the NPRM
that 25% of the new vehicle production of the non-domestic automakers will consist of FFVs by
2017, an assumption which seems highly improbable given that only a few FFV models are
offered by less than a handful of the import automakers today and the above-noted fact that FFVs
are not yet certified to cold temperature California LEV standards. In addition, the phase-out of
the CAFE credit for FFVs in the post 2015 timeframe that is currently scheduled is likely to
serve as a powerful disincentive for further market penetration of this technology.
The commenter concludes by saying, even if one were to accept EIA projections of the growth in
the stock of FFVs through 2022 as a likely reality (per AEO 2009) and unrealistically assume
that FFV owners/operators refuel on E85 100% of the time, it will not be enough to meet the
EISA-mandated volumes of ethanol (i.e., 34.1 Bgal of ethanol, as analyzed in the NPRM).
[[Docket number 2293.1, pp. 26-28]]
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP Products North America (BP)
Comment:
The commenter (2384) believes it is unreasonable for EPA to require obligated parties to blend
more than the market place can absorb through the sale of approved fuel blends for use in
suitable vehicles and distributed through approved infrastructure. [[Docket number 2384.1, p. 3]]
Although FFVs can legally consume blends up to 85%, the commenter (2384.1) believes there
are not yet enough vehicles on the road to reasonably achieve RFS2 compliance. The
commenter is reasonably confident that RINs will provide the economic currency which enables
parties to rationally offer E85 for sale to consumers near energy parity. However, many FFV
owners may still not choose to refuel with E85 on a regular basis. EPA will need to make
reasonable assumptions (based on real consumer behavior) to assess the market's ability to
consume biofuels when considering to exercise waiver authority. [[Docket number 2384, p. 12]]
Document No.: EPA-HQ-OAR-2005-0161-2147
Organization: Engine Manufacturers Association
Comment:
The commenter (2147.1) recommends that EPA undertake a marketing research study to identify
why consumers with flex-fuel products and access to E85 do not purchase E85. They believe
that the results of such study will indicate that consumers are not willing to (i) pay a premium for
fuel with lower fuel efficiency (on a dollar per mile basis); and/or (ii) refuel more frequently. It
is apparent that several ethanol proponents may have already come to the same conclusion and
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Chapter 6: Assessment Of Renewable Fuel Production Capacity and Use
are investing capital into blender pumps with the intention of identifying what blend level (E40,
E50, etc.) is preferred by the consumer.
If EPA does not undertake such a market research study, the commenter recommends that the
agency leverage the ethanol blend retail industry information in order to identify and select an
alternative blend level to replace E85 that will increase the overall demand for such blend and
thereby generate the capital investment required to support such blend in the market. (Page 9)
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) believes that EPA's analysis of E85's potential needs updating and the
use of realistic assumptions regarding FFV production as well as E85 use. EPA's assumption for
total annual vehicle sales predicates the current economic downturn - less than 16 million
vehicles per year, and much of the decline has been in traditional FFV offerings. EPA's
assessment much be updated to reflect a slower penetration of FFVs into the nation's vehicle
inventory. [[Docket number 2130.1, p. 12]]
At some point in the future with ethanol production efficiency improvements and reduced
feedstock costs from higher agricultural yields (or much higher crude oil market valuation) it is
conceivable that E85 might become competitive with gasoline. However, reliance on such
developments to promulgate a workable RFS program is problematic.
The commenter points out EPA's recently expressed intent to grant California's request for a
waiver to regulate vehicle GHG emissions and to adopt similar federal requirements also raises
significant questions regarding E85's viability as a solution. To date, few FFVs can meet the
California emission standards and 13 additional states representing -40% of gasoline demand
have indicated that they will adopt the California vehicle standards. If FFVs cannot meet those
standards, the potential penetration of FFVs and E85 will be further constrained. [[Docket
number 2130.1, pp. 13-14]]
Document No.: EPA-HQ-OAR-2005-0161-2465
Organization: Ford Motor Company
Comment:
The commenter (2465.1) supports a renewable fuel standard as an enabler for the biofuel
industry to expand production and distribution to meet our common energy security, climate
change and economic goals. The goals of the RFS2 program will require a coordinated effort
that involves greatly increasing the availability of vehicles capable of operating on ethanol
blends greater than E10 and up to E85.
The commenter presents their comprehensive transportation energy use model ("Ford Model"
and explains some of the model runs they've conducting. Their modeling relies on EIA's AEO
2008 to establish light-duty gasoline fuel demand and uses Ford's assumptions with respect to
future LDV sales, improvements in fuel economy over time, etc.
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RFS2 Summary and Analysis of Comments
Analysis of the Ford Model suggests that FFVs would need to make up 21% of new vehicles
entering the fleet after 2011 to provide sufficient ethanol-consuming capacity to meet the RFS2.
However, this would require an E85 use rate of 100% in FFVs which, according to the
commenter, could be unrealistic. If one assumes that FFVs owners use E85 at a lower rate, more
FFVs would be needed. The commenter modeled an E85 use rate of 50% in FFVs, and
determined the percentage of FFVs produced after 2011 would need to increase to 46%. And if
the E85 use rate was 25%, the percentage of FFVs required would jump to 95%.
In all scenarios, as the E85 use in FFVs differs, the number of FFVs in the fleet and the required
FFVs sales would need to differ in an inversely proportional manner. Although one cannot
expect quantum leaps in FFV production from one model year to the next, one could envision
ramping up the production of FFVs gradually over time. [[See Docket Number 2465.1, pp. 6-7]]
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233.1) agrees that for E85 to be competitive with E10, the price should reflect
the relative BTU content of the fuel and compensate the consumer for the required time for
additional fill ups. To ensure that consumers are aware of the presence of ethanol, we agree
there will have to be significant efforts towards consumer awareness. The commenter believes
that the government should be responsible for educating the consumer on the options and
benefits of ethanol. Where a retailed decides to sell E85, it is that retailer's responsibilities to
advertise his specific product in his market. Additionally, automakers should reach out to all
FFV owners in order to ensure that those consumers are aware of the types of fuel their vehicle
can use.
EPA discusses the potential implications of an FFV mandate to increasing ethanol usage in the
NPRM. The commenter points out that increasing FFVs in the fleet does not change the relative
economics or consumer acceptance of ethanol and gasoline. Putting more FFVs into the fleet
will not change the relative prices of transportation fuels. Ethanol price will primarily depend
upon the economics of the feedstock and conversion. [[Docket number 2233.2, pp. 27-28]]
The commenter believes that EPA's estimates of the future growth in E85 fuel consumption are
based on assumptions that may not be realistic given historical trends and recent rulemakings.
Even is the domestic automakers meet public commitments to make 50% FFVs by 2012, it is
doubtful that there will be a sufficient number of FFVs in operation through 2020 to address the
problem. The commenter points out that EPA assumes in the NPRM that 25% of the new
vehicle production of the non-domestic automakers will consist of FFVs by 2017, an assumption
which seems highly improbable given that only a few FFV models are offered by less than a
handful of the import automakers today. In addition, the phase-out of the CAFE credit for FFVs
in the post 2015 timeframe that is currently under consideration by EPA and NHTSA is likely to
serve as a powerful disincentive for further market penetration of this technology.
The commenter concludes by saying, even if one were to accept EIA projections of the growth in
the stock of FFVs through 2022 as a likely reality (per AEO 2009) and conservatively assume
that FFV owners/operators refuel on E85 100% of the time, there would not be enough FFVs in
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Chapter 6: Assessment Of Renewable Fuel Production Capacity and Use
the fleet to consume all the E85 that would be required to meet the EISA-mandated volumes of
ethanol. [[Docket number 2233.2, pp. 30-31]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: Sierra Research
Comment:
The Sierra Research Report No. SR2009-09-01 entitled "Technical Review of 2009 EPA Draft
Regulatory Impact Analysis For Non-GHG Pollutants due to Changes to the Renewable Fuel
Standard" was prepared for API on September 29, 2009 and incorporated by reference into their
comments (2393.7). A summary of the points raised with respect to fuel volumes, FFVs, and
E85 is presented below.
Critical Aspect 1 - The main findings of the review of the DRIA with respect to the first critical
area—assumed renewable fuel types, volumes, and vehicle technology changes—are:
• The volumes and types of renewable fuels, primarily ethanol in the form of E85, assumed
in the DRIA are not consistent with those of the U.S. Department of Energy's (DOE),
Energy Information Administration's (ElA) Annual Energy Outlook (AEO).
• Relative to other current estimates, the DRIA analysis overestimates transportation
energy demand, and therefore the feasibility of compliance with the volumetric
renewable fuel requirements of the RFS2.
• The DRIA analysis evaluates in detail only one "control case" for RFS2 compliance
based on E10 and E85 rather than fully analyzing other potential control cases.
• The DRIA analysis is based on a number of assumptions and input data from a variety of
different sources that are inconsistent and there has been no apparent attempt made to
reconcile these inconsistencies.
• The DRIA assumes that the bulk of the renewable fuel required for compliance with the
RFS2 will be consumed in the form of E85 by FFVs, but that assumption rests on what
appear to be unreasonably optimistic assumptions regarding the number of FFVs that will
be produced and the amount of E85 that will be consumed.
Our Response:
As explained in Section 1.7.2 of the RIA, we have updated our light-duty vehicle
projections to account for the dip in sales in response to the downturn in the economy. In
addition, we have modified our FFV sales assumptions to account for the fact that it is unlikely
that non-domestic automakers would ramp up FFV production in the future, absent an FFV
mandate or other political measures. As explained above, for the final rule, we have established
three control cases with varying levels of ethanol to measure the potential impacts of the RFS2
program. Accordingly, we have established three potential FFV production scenarios with
somewhat proportional sales projections. For our low-ethanol case (17.5 Bgal of ethanol by
2022), we modeled FFV sales according to AEO 2009. For our primary mid-ethanol control
case (22.2 Bgal of ethanol by 2022), we assumed GM, Ford and Chrysler would follow through
with their voluntary commitment to produce 50% FFVs by 2012 (this is similar to the
"Committed" FFV production scenario modeled for the NPRM). And finally, for our high-
ethanol scenario (33.2 Bgal of ethanol by 2022), we modeled the impacts of a hypothetical 80%
FFV mandate based on the Open Fuel Standard (OFS) legislature introduced in Congress. While
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RFS2 Summary and Analysis of Comments
we are not suggesting that Congress implement a national FFV mandate, given the downturn in
the economy (resulting in reduced VMT, gasoline demand and vehicle sales), an FFV mandate
could be the only viable means for consuming 33.2 billion gallons of ethanol by 2022. If
challenges in certifying FFVs in California continue in the future, then FFV sales, E85 retail
stations and/or FFV E85 refueling rates would all have to be higher in the rest of the United
States to compensate. In addition, if the phase-out of CAFE credits has a significant impact on
total FFV sales, then E85 availability and FFV E85 refueling rates would need to be even higher.
In addition, we believe that E85 has the ability to be a viable fuel in the future provided
crude oil prices track around $116/bbl as predicted by EIA in AEO 2009. In order for E85 to be
competitive with $4/gal gasoline (E10) at retail5, we project that it should be priced about 25%
lower, or around $3/gal considering its reduced energy density, additional time spent refueling,
etc. In order for ethanol to be valuable to refiners as an E85 blendstock, the corresponding rack
price would need to be less than or equal to around $2/gal. The current rack price for ethanol is
abound $2.20/gallon. However, we agree with Exxon that ethanol production efficiency
improvements and reduced feedstock costs could lower the price of ethanol in the future.
We project that the average ethanol delivered price (volume-weighted average production cost of
corn, cellulosic and imported ethanol plus distribution) will come down to around $1.67/gallon
in 2022 under our mid-ethanol primary control case. Therefore, while gasoline refiners and
markets will always have a greater profit margin selling ethanol in low-level blends to consumers
based on volume, they should be able to maintain a profit selling it as E85 in the future. Refer to
Sections 4.4 and 1.7.5 of the RIA for more information.
In response to some of Sierra Research's more detailed comments, many of their
suggested alternative data sources (e.g., FFV sales) have been reflected in our updated ethanol
consumption analysis. However, a number of their comments relate to various assumptions made
with respect to our projections of renewable fuel used for impact analyses. While we have made
some changes in our assumption between the NPRM and FRM in this area, many different
assumptions and estimates could have been made. However, we believe that the two reference
cases and three control cases used for the final rule provide a reasonable foundation for assessing
the potential impacts of the RFS2 program. Regardless, the RFS2 standards are dictated by
statute and the results of the analyses will not change the magnitude or timing of the standards.
We will continue to consider comments raised by Sierra Research in our ongoing assessments of
the impacts of renewable fuel use.
In response to statement that EPA should not hold obligated parties responsible for
blending more renewable fuels into transportation fuel than can produced, distributed, and
consumed, we note that these comments relate to potential future waivers of the RFS2 standards.
As discussed in section 13.4.4, EISA provides general waiver authority for the RFS2 standards
similar to that provided for the RFS1 standards under EPAct 2005, as well as waiver authority
specific to the biomass-based diesel standard and the cellulosic biofuel standard. This waiver
authority will be exercised in the future as necessary and appropriate, and the nature of any
waiver action taken will be determined based on the specific situation at the time.
1 Refer to Section 4.4 of the RIA for more information on projected gasoline prices.
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Chapter 6: Assessment Of Renewable Fuel Production Capacity and Use
6.4.5 Retail Price Relationship of E10/E85
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) points out that the NPRM indicates that the E10/E85 price relationship
could be modified by the refining industry. It states that, " [o]ne potential action that refiners
might take to ensure a sufficient RIN supply would be to subsidize the price of the ethanol used
to manufacture E85. Such a subsidy might be financed by an increase in their selling price of
gasoline. In addition refiners with marketing arms could adjust the retail price relationship of
E10 in E85 in way that encourages E85 throughput while still maintaining the same average net
profit. The NPRM requests comment on viable and cooperative ways refiners and gasoline
retailers could promote E85 throughput to meet the proposed E85 requirements."
EPA appears to assume that a single refiner can set the price of its gasoline to ensure that there is
equivalence between E10 and E85, and that the sale of the two fuels would allow that refiner to
"maintain the same average net profit." This assumption reflects a deep misunderstanding of the
U.S. gasoline market. A refiner has no control over the price of crude oil, the price of the
gasoline or the price of ethanol. Prices are ultimately based on the international supply and
demand of crude oil, gasoline and blendstocks, and the supply and demand for the product that is
being sold in a given geographical market. This is further exemplified by a refiner, obligated by
production, which has no associated retail marketing. EPA has a deep misunderstanding of the
impacts and linkages of ethanol import tariffs, ethanol production subsidies and volume
mandates as these interact with obligated blending, discretionary blending, and new "D" codes
for proposed RINs. [[Docket number 2523.1, p.24]]
Further, it is simply not legal for a group of refiners or retailers to work in "cooperative ways to
promote E85 throughput to meet the proposed E85 requirements" in the way the EPA apparently
anticipates. Federal antitrust laws forbid agreements among competitors to set 26
prices (whether "reasonable" or not), adjust outputs, or allocate markets; the penalties for such
conduct are quite severe, involving corporate and personal criminal liability (up to 10 years in
jail), large civil fines and the possibility of large triple-damage lawsuits by those harmed by the
conduct. Hence, the EPA's suggested approach, which appears to require the reduction or
elimination of competition is simply unrealistic and unworkable. The NPRM indicates that some
states waive or discount excise taxes on E85 and that this "helps contribute to a retail price
relationship that favors E85 over conventional gasoline." Waiving or discounting state or federal
tax for E85 may, depending on market conditions, contribute to a closer price relationship
between E85 and gasoline. Tax relief of this type should be weighed with caution though
because it limits the funds that are available to maintain highways and bridges and picks winners
and losers based upon application. Waiving the tax on E85 is also equivalent to offering another
subsidy to ethanol. [[Docket number 2523.1, p.25-26]]
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
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RFS2 Summary and Analysis of Comments
Comment:
According to the commenter (2130.1), EPA's suggestion that somehow retail marketers could
subsidize E85 sales by attractive pricing while seeking to recover the cost with E10 sales by
raising the cost of E10 demonstrates a fundamental lack of understanding of petroleum product
markets. Such markets are competitive, and an individual marketer cannot hope to succeed by
acting at variance with the market direction. Customers with FFVs would take advantage of his
lower E85 price by preferentially filling up their FFVs at his station, generating a financial loss
on the E85 volume he sells. However, customers who need E10 could go elsewhere to avoid the
higher cost of El0 he offers, since other marketers would be offering E10 that did not also carry
the burden of an E85 subsidy recovery. Of course, anti-trust laws prevent a group of individual
marketers from acting in "cooperative ways to promote E85 throughput to meet the proposed
E85 requirements" as EPA seems to anticipate. EPA should not look to petroleum marketers to
somehow create an incentive for customers to buy a non-cost-effective product like E85. Market
factors preclude the viability of such a strategy. [[Docket number 2130.1, p. 13]]
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comments:
As stated in the NPRM, current federal and most state tax codes do not distinguish between
ethanol sold as E10 and E85. The commenter acknowledges that waiving or discounting the
federal tax for E85 will contribute to a close price relationship. However, it also limits the funds
that are available to maintain highways and bridges. This type of tax relief should be weighted
with caution. Waiving the tax on E85 is also equivalent to offering another subsidy to ethanol.
The NPRM indicates that the E10/E85 price relationship could be modified by the refining
industry. EPA appears to assume that a single refiner can set the price of his gasoline and thus
ensure that this is equivalence between E10 and E85 and further that the sale of the two fuels
would allow that refiner to "maintain the same average net profit." According to the commenter,
this assumption reflects a deep misunderstanding of the U.S. gasoline market. A refiner has no
control over the price of crude oil and no control over the price of gasoline (or distillate). Prices
are based on international supply and demand. Refiners and retailers cannot and do not set the
price of their product. They must unilaterally use market information to determine asking price.
Consequently, it is not possible for a refiner or retailer to "adjust the retail price relationship of
E10 to E85 in such a way that encourages E85 throughput while maintaining the same average
net profit." The market is too complex for such an approach to work. Further, The Sherman Act
specifically prohibits this type of activity and indicates that this type of violation could result in
treble damages and personal liability. [[Docket number 2233.2, pp. 28-30]]
Document No.: EPA-HQ-OAR-2005-0161-2358
Organization: Society of Independent Gasoline Marketers of America (SIGMA) and the
National Association of Convenience Stores (NACS)
Comment:
Regarding EPA's proposal on market pricing of E85 versus gasoline where the refiners reduce
the price of E85 and increase the price of gasoline and whether refiners and retailer might work
together to adjust the relative price of E85 and gasoline, the commenter believes these proposal
are unsustainable and may violate antitrust laws. [[Docket number 2358.1, p. 14]]
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Chapter 6: Assessment Of Renewable Fuel Production Capacity and Use
Our Response:
In our NPRM, we were mainly pointing out the fact that, due to the lower value of
ethanol when sold on an energy basis compared to gasoline then on a volume basis, the price of
E85 and of ethanol in the marketplace will have to adjust to compensate if the increased volumes
of ethanol are to be sold as E85. The means by which this happens will have to be sorted out in
the marketplace. If it isn't, then it would push the market further and faster towards other
solutions to meet the RFS2 standards, such as increased use of non-ethanol renewables, e.g.,
butanol, renewable hydrocarbons, etc.
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Renewable Fuel Standard Program
(RFS2) Summary and Analysis of
Comments
Chapter 7
Impacts of the Program on
Greenhouse Gas (GHG) Emissions
Assessment and Standards Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
v>EPA
United States EPA-420-R-10-003
Environmental Protection r , „„.„
Agency February 2010
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7 IMPACTS OF THE PROGRAM ON GREENHOUSE GAS (GHG) EMISSIONS
7.1 Definition of Lifecycle GHG Emissions 7-3
7.2 Methodology 7-4
7.2.1 Scenario Description 7-18
7.2.2 Scope of the Analysis 7-20
7.2.2.1 Legal Interpretation of Lifecycle Greenhouse Gas Emissions 7-23
7.2.2.2 System Boundaries 7-29
7.2.3 Modeling Framework 7-36
7.2.4 Treatment of Uncertainty 7-109
7.2.5 Components of the Lifecycle GHG Emissions Analysis 7-123
7.2.5.1 Feedstock Production (Domestic & International Ag Sector
Impacts) 7-130
7.2.5.2 Land Use Changes 7-175
7.2.5.3 Feedstock Transport 7- 330
7.2.5.4 Processing 7-331
7.2.6 Petroleum Baseline 7-332
7.2.7 Energy Sector Indirect Impacts 7-349
7.3 Fuel Specific GHG Emissions Estimates 7-356
7.3.1 Greenhouse Gas Emissions Reductions Relative to the 2005 Petroleum
Baseline 7-357
7.3.1.1 Corn Ethanol 7-369
7.3.1.2 Imported Ethanol 7-376
7.3.1.3 Cellulosic Ethanol 7-380
7.3.1.4 Biodiesel 7-383
7.3.2 Treatment of GHG Emissions over Time 7-405
7.3.2.1 Time Horizon 7-409
7.3.2.2 Discount Rate 7-420
7.4 GHG Thresholds 7-428
7.4.1 Advanced Biofuel 7-433
7.4.2 Biomass-based Diesel 7-438
7.5 Assignments of Pathways to Renewable Fuel Categories 7-443
7.5.1 Assignments for Pathways Subjected to Lifecycle Analyses 7-446
7.5.2 Assignments for Additional Pathways 7-450
7.5.2.1 Ethanol from Starch 7-454
7.5.2.2 Renewable Fuels from Cellulosic Biomass 7-459
7.5.2.3 Biodiesel 7-461
7.5.2.4 Renewable Diesel Through Hydrotreating 7-475
7.5.2.5 Lifecycle Analysis Petition Process 7-475
7.6 Total GHG Emission Reductions 7-479
7.7 Lifecycle GHG Thresholds 7-483
7.8 Peer Review 7-484
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RFS2 Summary and Analysis of Comments
7 IMPACTS OF THE PROGRAM ON GREENHOUSE GAS (GHG) EMISSIONS
What We Proposed:
The comments in this section correspond to Section V of the preamble to the proposed
rule and address impacts of the program on GHG emissions. A summary of the comments
received and our response to those comments are located below. These topics are also largely
considered in Section V of the preamble to the final rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1000
Organization: Environmental Consultant
Comment:
The commenter (1000) objects to the inclusion of greenhouse gas emissions regulation as a part
of the EPA proposal. The commenter states that the EISA of 2007 has no restrictions on
greenhouse gas. The commenter also noted that a large body of scientific evidence has shown
that anthropogenic emissions of GHG are not related to climate. The commenter recommends
that all reference to GHG be removed from the subject regulations. (P.I)
Our Response:
EISA includes specific greenhouse gas reduction thresholds for each type of renewable
fuel mandated by the Act requiring a percentage improvement compared to a baseline of the
gasoline and diesel used in 2005. The definition of lifecycle greenhouse gas emissions is
specifically provided in the statute. While these thresholds do not constitute a specific control on
greenhouse gases for transportation fuels (such as a low carbon fuel standard), they do require
that the volume mandates be met through the use of renewable fuels that meet certain lifecycle
GHG reduction thresholds when compared to the baseline lifecycle emissions of petroleum fuel
they replace. This final rule implements those requirements and therefore the references to GHG
are appropriate and required.
This final rule does not, however, discuss the role of GHG emissions in climate change.
EPA's position on this topic is provided in a separate and unrelated action—see
http:www.epa.gov/climatechange/endangerment.html
Document No.: EPA-HQ-OAR-2005-0161-2308
Organization: Environmental Defense Fund
Comment:
The commenter (2308.1) believes additional measures are necessary to produce biofuels in a way
that creates benefits for the climate and other natural resources, in particular with regard to
reducing emissions from tropical deforestation, which EPA has identified as a significant source
of indirect land use change emissions. (Page 2)
7-1
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
Our Response:
This final rule implements the greenhouse gas thresholds and renewable biomass
restrictions in EISA and provides an analysis of the air and water quality impacts of expanded
biofuels use. As noted by the commenter, additional measures (i.e., international frameworks)
are beyond the scope of this rulemaking.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2466
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Comment:
The commenter (2466) comments that when the full lifecycle impacts of this ethanol are taken
into account, including the effects of indirect land use change, substitution of this grandfathered
ethanol for gasoline could result in a substantial increase in greenhouse gas emissions. The
commenter strongly urges EPA to assess the above described impacts and establish anti-
backsliding provisions to forestall increases in emissions or alternatively consider waiving the
volumetric requirements of the RFS in a given year to prevent significant increases in emissions.
(2466.1.pdf,p7)
Our Response:
As provided in EISA, renewable fuel from existing facilities is exempt from the lifecycle
GHG emission reduction threshold of 20%. Today's final rule will implement this provision by
exempting up to a baseline volume for such facilities, which will be established at the time of
registration. The exemption from the 20% GHG threshold applies only to renewable fuel that is
produced from facilities which commenced construction on or before December 19, 2007, or in
the case of ethanol plants that use natural gas biomass, or a combination thereof for process heat,
on or before December 31, 2009. EPA's implementation of these provisions is described in
detail in Section II.B.3 of the preamble. EISA created a new CAA section 211 (v) concerning
mitigation of adverse air quality impacts of the implementation of this program. In addition,
EISA authorizes EPA to issue waivers of the volumetric renewable fuel requirements of the Act
under various circumstances, including where EPA makes a finding that implementation of the
requirements would severely harm the economy or environment of a State, a region, or the
United States. However EPA is not taking action under either of these provisions in this
rulemaking, and is not in a position to address comments concerning action under those
authorities, assuming that is what the commenter is suggesting. EPA is currently conducting the
study called for under CAA section 211 (v) (1), and commenter has not presented any analysis to
support their general request that EPA consider waiving volume requirements at some time.
However, we note that our analysis of the GHG impacts of the final rule (which analyzes the
difference between business as usual and the RFS2 volumes) includes some of the GHG impacts
of grandfathered ethanol.
As provided in EISA, renewable fuel from existing facilities is exempt from the lifecycle
GHG emission reduction threshold of 20% up to a baseline volume for that facility that will be
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RFS2 Summary and Analysis of Comments
established at the time of registration. The exemption from the 20% GHG threshold applies only
to renewable fuel that is produced from facilities which commenced construction on or before
December 19, 2007, or in the case of ethanol plants that use natural gas or biodiesel for process
heat, on or before December 31, 2009. EPA's implementation of these provisions is described in
detail in Section II.B.3 of the preamble. The waiver and antibacksliding provisions in EISA
provide specific circumstances for the use of these provisions, which do not include addressing
the GHG emissions resulting from grandfathered volumes.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2112
Organization: Biomass Rules, LLC
Comment:
The commenter (2112.1) noted that the four fuel designations cannot be maintained and verified
by EPA. EPA has illustrated repeatedly that insufficient data and analytical confidence exist to
develop rules four renewable fuels standards. This is not a criticism of EPA. The analytical
infrastructure does not exist to do what the EISA requested regarding the complex criteria for the
emission impact of the three non-corn biofuel categories. (2112.1, p.4)
Our Response:
As detailed in the preamble and RIA, EPA has used up to date models, data and other
information to assess the GHG impacts of biofuels. Throughout the development of EPA's
lifecycle analysis, the Agency has employed a collaborative, transparent, and science-based
approach. EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. We believe we have in a technically appropriate manner,
implemented the mandates of EISA
7.1 Definition of Lifecycle GHG Emissions
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0951
Organization: Citizen
Comment:
One commenter (0951) states that the proposed changes to the RFS program must be based on
science. This commenter believes that the "Searchinger, et al" and "Tilman" studies are not
scientific examinations of the indirect land use issue and has been criticized by many legitimate
scientists. The commenter also states that there is currently no scientifically based or empirical
evidence that biofuels production causes any negative indirect land use changes at all. (Pp. 1-3)
Our Response:
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
The lifecycle methodology developed by EPA, and explained in detail in this final rule, is
based on the best available scientific techniques. It also relies on a body of scientific literature
on this topic as well as an independent scientific peer review of EPA's methodology. The peer
review, the public comments we have received, and the analysis conducted for the proposal and
final rule indicate that it is important to take into account indirect emissions. Through this
evaluation, EPA also has determined that biofuels production leads to both negative and positive
indirect land use changes. We also recognize the uncertainties inherent in this estimation and
therefore have taken an approach that quantifies the uncertainty and presents the weight of
currently available evidence in making our threshold determination.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2165
Organization: Beckley Ag Products
Comment:
The commenter (2165.1) is concerned that while the law specifies that GHG emissions included
direct emissions and significant indirect emissions such as significant emissions from land use
changes, as determined by the Administrator, they believe it is premature to adopt GHG criteria
for indirect land use changes (ILUC). Specifically the commenter is concerned that there are no
widely accepted methodologies or models for calculating ILUC resulting from increases in
production of biofuels.
Given the complexity and uncertainty of this issue, the commenter urges EPA to not include any
calculations of ILUC in determining GHG emissions for biofuels at this time. (2165.1, p. 2)
Our Response:
EPA is making the GHG threshold determination based on a methodology that includes
an analysis of the full lifecycle, including significant emissions related to international land-use
change. EPA has used the best available models for this purpose, and has incorporated many
modifications to its proposed approach based on comments from the public and peer reviewers
and developing science. EPA has also quantified the uncertainty associated with significant
components of its analyses, including important factors affecting GHG emissions associated with
international land use change. The Agency has updated and refined its modeling approach since
proposal in several important ways, and EPA is confident that its modeling of GHG emissions
associated with international land use is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations described above. We plan to
continue to improve upon our analyses, and will update it in the future as appropriate.
7.2 Methodology
What Commenters Said:
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RFS2 Summary and Analysis of Comments
Document No.: EPA-HQ-OAR-2005-0161-0981
Organization: Nebraska Center for Energy Sciences Research, Department of Agronomy
and Horticulture, University of Nebraska-Lincoln
Comment:
The commenter (0981) recommends that the biofuel LCA performed by EPA follow ISO and
EPA guidelines and Federal law to the highest degree possible. The commenter believes that
such practices will help to ensure the accuracy of the parameter values used and the resulting
effectiveness and transparency of regulatory LCA applied to biofuels. (Pp. 12-14)
Our Response:
EPA has used International Standards Organization (ISO) guidance on lifecycle analysis
in developing its lifecycle analysis. We have drawn upon a suite of the most recent and
advanced and peer-reviewed models, studies, and data to develop a methodology for lifecycle
analyses of renewable fuel greenhouse gas emissions. As mandated in EISA, lifecycle GHG
emissions of biofuels was compared to the lifecycle GHG emissions of a 2005 gasoline or diesel
baseline. For both the biofuels and petroleum GHG lifecycle analysis, EPA has developed clear
and consistent system boundaries (both physical and temporal) which are explicitly laid out in
the Final Rulemaking. Further, we assessed uncertainty in the final analysis. EPA provides a
complete description of the lifecycle analysis methodology and provides the data used in the
analysis in the Final Rule Preamble, Regulatory Impact Assessment, and the Docket.
EPA has followed EPA and federal regulatory procedures. In addition, EPA has
extensively coordinated the development of our methodology and selection of inputs and models
with outside experts and across the federal government. After EISA's enactment in December
2007, we met frequently with the Departments of Agriculture and Energy to share our analytical
plan, request feedback on our key assumptions, and provide preliminary results as they became
available. In many cases, we adopted the models, inputs, and assumptions suggested by these
Departments.
Lastly, EPA conducted a formal, external, independent peer review for the novel pieces
developed for this lifecycle analysis following EPA and OMB guidance for third party, peer
reviews. The names of the reviewers, charge questions, the original comments received from the
reviewers as well as contractor summaries of the comments were made publically available in
the docket.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1001, EPA-HQ-OAR-2005-0161-1005, EPA-
HQ-OAR-2005-0161-1010, EPA-HQ-OAR-2005-0161-1011, EPA-HQ-OAR-2005-0161-1012,
EPA-HQ-OAR-2005-0161-1025, EPA-HQ-OAR-2005-0161-1029, EPA-HQ-OAR-2005-0161-
1043, etal.
Organization: Kurzman Clean Tech Research & Kurzman Capital, LLC, Cotner
Consulting Services, CC Gas Systems, LLC, Atlantic BioFuels, Glenwood Farms, Law Offices
of David Wilcox, C.I.E.,University of Georgia Engineering Outreach Service, et al.
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
Comment:
The commenters noted that EPA's methodology is not ready to be used for purposes of
regulating biofuels. EPA's method of lifecycle analysis is not widely accepted and should not be
used to regulate biodiesel.
The commenters understand that EPA's lifecycle analysis is being peer reviewed and encourages
EPA to include experts from the biodiesel industry in the peer review process. Throughout the
peer review process, the commenters strongly encourage EPA to provide reviewers with
additional independent studies and analyses that will help place the EPA lifecycle analysis in
context and provide a holistic view of the debate over indirect effects.
Our Response:
EPA recognizes that it has had to break new scientific ground in developing a lifecycle
methodology as required by EISA. This is why the Agency employed a collaborative,
transparent, and science-based approach. EPA took numerous measures to seek public comment
on our approach—including extending the comment period for the proposed rule, holding a two-
day public workshop on the lifecycle methodology, and reaching out to dozens of stakeholders,
including the biodiesel community, through individual meetings, conferences and events. As
noted by the commenter, EPA also initiated an independent peer review of specific areas of our
work. The information we received through this process has led to the approach in this final rule
which bases the GHG threshold compliance determinations on the weight of evidence currently
available and quantifies the uncertainty about critical variables.
Further, EPA recognizes the state of scientific knowledge continues to evolve in this area.
While the Agency is using its current lifecycle assessments to inform the regulatory
determinations for fuel pathways in this final rule, the Agency is also committing to further
reassess these determinations. As part of this ongoing effort, we will ask for the expert advice of
the National Academy of Sciences as well as other experts.
With regard to the comment on the peer review process—the lifecycle review was
conducted following the Office of Management and Budget's (OMB) peer review guidance and
according to EPA's longstanding and rigorous peer review policies. In accordance with these
guidelines, independent, third-party contractors autonomously developed their own list of expert
reviewers. The reviewers selected are leading experts in their respective fields, including
lifecycle assessment, economic modeling, remote sensing imagery, biofuel technologies, soil
science, agricultural economics, and climate science. Contractors provided the expert reviewers
with the material for review and charge questions developed by EPA. These questions, which
were reviewed and edited by OMB, guided the review process. The peer reviewers worked
independently and were not asked to reach a consensus decision.
More information on the peer review, including each of the peer review comments, is
available at: http:www.epa.gov/otaq/renewablefuels/index.htm. The results of the peer review
were included in the docket for public review and consideration during the public comment
period for the proposal.
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RFS2 Summary and Analysis of Comments
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2079
Organization: AE Biofuels, Inc.
Comment:
The commenter (2079.1) believes that EPA's method of lifecycle analysis is not widely accepted
and is not consistent with standards for such analysis. Until a reasonable level of scientific
consensus is achieved, the commenter believes that the methodology should not be used to
regulate biofuels production. (2079.1, p.7)
Our Response:
EPA recognizes that it has had to break new scientific ground in developing a lifecycle
methodology as required by EISA. This is why the Agency employed a collaborative,
transparent and science-based approach. EPA took numerous measures to seek public comment
on our approach—including extending the comment period for the proposed rule, holding a two-
day public workshop on the lifecycle methodology, and reaching out to dozens of stakeholders,
including the biodiesel community, through individual meetings, conferences and events. As
noted by the commenter, EPA also initiated an independent peer review of specific areas of our
work. The information we received through this process has led to the approach in this final rule
which bases the GHG threshold compliance determinations on the weight of evidence currently
available and quantifies the uncertainty about critical variables.
Further, EPA recognizes the state of scientific knowledge continues to evolve in this area.
While the Agency is using its current lifecycle assessments to inform the regulatory
determinations for fuel pathways in this final rule, the Agency is also committing to further
reassess these determinations. As part of this ongoing effort, we will ask for the expert advice of
the National Academy of Sciences as well as other experts.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2048
Organization: BioPure Fuels
Comment:
The commenter (2048.1) believes that the science behind indirect land use assumptions is weak
and open to criticism. Clearly there is room for questioning the assumptions being made in
including indirect land use in the regulations and this is perhaps the area where U.S. EPA is
likely to obtain the greatest criticism (as evidenced by the recent hearing on indirect land use in
Congress). (2048.1,p.3)
With regards to the GREET model, the commenter is not in favor of any of the recommendations
in the GREET model associated with indirect land use change, staff recommendations to include
indirect land use change in carbon calculations and adoption of a rule that includes Indirect Land
Use Change (ILUC). The commenter agrees with comments from stakeholders including the
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
letter by 111 Ph.D. Scientists stating that the science used in determining these market mediated,
indirect impacts is quite limited and highly uncertain. In addition, the selective enforcement of
indirect land use impacts for biofuels over other fuels included in the LCFS violates the most
basic principles of regulatory fairness. (2048.1, p. 11)
Our Response:
EPA has clearly acknowledged that our lifecycle methodology required breaking new
scientific ground and using analytical tools in new ways. The work was generally recognized as
state of the art and an advance on lifecycle thinking, specifically regarding the indirect impacts
of biofuels. EPA took numerous measures to seek public comment on our approach—including
extending the comment period for the proposed rule, holding a two-day public workshop on the
lifecycle methodology, and reaching out to dozens of stakeholders, through individual meetings,
conferences and events. EPA also initiated an independent scientific peer review of specific
areas of our work.
EPA has recognized that there are uncertainties associated with these estimates—
particularly with regard to indirect land use change—and has sought to develop an approach that
manages these uncertainties. However, EPA rejects the view that the modeling relied upon in
the final rule is too uncertain or untested to provide a credible and reasonable scientific basis for
determining whether the aggregate lifecycle emissions exceed the thresholds. If the international
land use impacts were so uncertain that their impact on lifecycle GHG emissions could not be
adequately determined, this does not mean EPA could assume the international land use change
emissions are zero. High uncertainty would not mean that emissions are small and can be
ignored; rather it could mean that we could not tell whether they are large or small. If high
uncertainty meant that EPA were not able to determine that indirect emissions from international
land use change are small enough that the total lifecycle emissions meet the threshold, then that
fuel could not be determined to meet the GHG thresholds of EISA and the fuel would necessarily
have to be excluded from the program. The Agency has chosen an approach that includes
biofuels with a significant international land use impact in this program. We also have chosen an
approach that quantifies uncertainty and presents the weight of currently available evidence in
making our threshold determinations.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2110
Organization: Chevron
Comment:
The commenter (2110.1) supports EPA's overall approach to GHG life-cycle analysis (LCA) as
it applies to biofuels but believes the agency must be flexible enough to adapt to the changing
science of LCA. The commenter believes that EPA needs enough flexibility to respond to the
evolving science of LCA and the unpredictable nature of advanced fuel technology development
without causing investments made in good faith to be undermined. (2110.1, p.4)
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RFS2 Summary and Analysis of Comments
The commenter noted that despite the potential for negative life-cycle GHG impacts of using
conventional biofuels, it is important that EPA avoid developing overly permissive life-cycle
criteria or other mechanisms that enable them to meet category requirements that are otherwise
unattainable. There are of the aes allowed under the law that would retain the use of good
science. (2110.1, p.4)
Our Response:
EPA agrees with commenter that impacts from indirect land use change must be included
in our lifecycle analysis. Further, we have taken steps in the final rule to account for
uncertainties.
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 will continue to change.
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. As part of this
ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as well as
other experts, and incorporate their advice and any updated information we receive into a new
assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in this
final rule. EPA will request that the National Academy of Sciences over the next two years
evaluate the approach taken in this rule, the underlying science of lifecycle assessment, and in
particular indirect land use change, and make recommendations for subsequent rulemakings on
this subject. This new assessment could result in new determinations of threshold compliance
compared to those included in this rule that would apply to future production (from plants that
are constructed after each subsequent rule).
EPA is basing its GHG threshold compliance determinations for this rule on an approach
that considers the uncertainty in our assessments as well as other information available to the
Agency. For fuel pathways with a significant land use impact, the evidence considered includes
the best estimate as well as the range of possible lifecycle greenhouse gas emission results based
on formal uncertainty and sensitivity analyses conducted by the Agency.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2112
Organization: Biomass Rules, LLC
Comment:
The commenter (2112.1) believes that ignoring the fundamental principles of mathematics
renders EPA estimates meaningless. The best data and methodologies do not meet quality
necessary to serve the "force of law." Professionals in the life cycle assessment (LCA) field can
not agree on the proper methodology. Therefore, no legally defensible LCA methodology exists.
In addition EPA took coefficients developed from radically different models and created new
models that create hypothetical results that are far beyond the boundaries of the underlying
original data. (2112.1, p. 1)
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
Our Response:
There is no legal requirement that there be a consensus of expert opinion before EPA
may take action as required by the statute. Instead, EPA often is required to and does act in
situations where the science is controversial and uncertain. In this case, EPA has conducted
extensive outreach to obtain expert advice on the issues relevant to LCA, and used that advice to
update the LCA. In general there was broad support for many of the methodological elements of
EPA's analysis, and in several areas EPA received constructive criticism and advice and updated
our analysis consistent with that advice. EPA's LCA analysis reflects the best available science,
and is an adequate basis for the regulatory determination for which it is used - determining
compliance with the GHG thresholds.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) supports periodic reevaluations and updates to the LCA (perhaps every
three years, initially) to adjust the analysis as technology and modeling evolves. The commenter
urges EPA to continue efforts with CARB to harmonize LCA methodologies to the extent
possible, and be able to explain differences where authorizing documentation precludes
harmonization. (2124.1, p.24)
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
Regarding the LCA for RFS2, he commenter (2130) commends EPA for its scientific approach
and diligence in examining the full gamut of potential impacts from the production and use of
various biofuels. The commenter supports periodic reevaluations and updates to the LCA
(perhaps every three years) to adjust the analysis as technology and modeling evolve and urges
EPA to continue efforts with CARB to harmonize LCA methodologies. [[Docket number 2130.1,
pp. 3-4 and pp. 18-20]]
Our Response:
EPA is committed to reassess the lifecycle estimates presented in this final rule. As part
of this ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as
well as other experts, and incorporate their advice and any updated information we receive into a
new assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in
this final rule. EPA will request that the National Academy of Sciences over the next two years
evaluate the approach taken in this rule, the underlying science of lifecycle assessment, and in
particular indirect land use change, and make recommendations for subsequent rulemakings on
this subject.
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RFS2 Summary and Analysis of Comments
Throughout the development of the lifecycle methodology EPA has worked closely with
the State of California. While each agency's statutory requirements necessitate some differences
(as noted by the commenter) in general, CARB and EPA have developed the same
methodological approach to assessing the lifecycle impacts of biofuels. EPA will continue to
coordinate with CARB as we implement the RFS2 program and reassess the lifecycle estimates.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2234
Organization: Energy & Resources Group University of California
Comment:
The commenter states that the use of the FASOM model for domestic agricultural market and
GHG analysis adds a great deal of complication to this modeling effort, but the payoffs appear to
be meager. The inconsistencies between FASOM and FAPRI are troubling, and the GHG
accounting in FASOM remains poorly documented and in some cases, incorrect. We would
therefore prefer to see a single, consistent approach (i.e., FASOM plus emission factors) applied
to all regions. [[2234.1 p.2]]
Our Response:
While FASOM is an excellent model, it focuses on agricultural production within the
U.S. For international impacts on agriculture, FAPRI was used. Common parameters between
the models were aligned to help assure consistent results.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2435
Organization: R.W. Heiden Associates LLC
Comment:
The commenter (2435) states that the lifecycle GHG methodology for biodiesel is flawed and
should not be used to regulate the biofuels industry. The commenter is concerned with the
uncertainty and speculation associated with the analysis of biofuels, including the methodology
relating to significant indirect emissions. [[Docket number 2435.1, p. 3]]
The commenter notes that EPA's lifecycle analysis is being peer reviewed and encourages EPA
to include experts from the biodiesel industry in the process. Based on the number of lifecycle
analysis being completed by different levels of government and by a multitude of countries, the
commenter's industry has developed an intimate working knowledge of many lifecycle models
and methodologies and believes they could contribute to the development of an appropriate
system that can be used in the future. [[Docket number 2435.1, p. 5]]
Our Response:
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
As detailed in the preamble and RIA, EPA has used up to date models, data and other
information to assess the GHG impacts of biofuels. Throughout the development of EPA's
lifecycle analysis, the Agency has employed a collaborative, transparent, and science-based
approach. EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. We believe we have in a technically appropriate manner,
implemented the mandates of EISA.
Regarding the comment on EPA's approach to LCA, EPA has clearly described its
analytical techniques, the models used and the sources of data. We believe these represent the
best tools and information available and there appropriate use for biofuel modeling was
confirmed by peer review and other comments. These models (as well as other models evaluated
for their projections of land use impact) confirm that indirect land use impacts are significant and
cannot be ignored.
To ensure the Agency made its decisions for this final rule on the best science available,
EPA conducted a formal, independent peer review of key components of the analysis. The
reviews were conducted following the Office of Management and Budget's peer review guidance
that ensures consistent, independent government-wide implementation of peer review, and
according to EPA's longstanding and rigorous peer review policies. In accordance with these
guidelines, EPA used independent, third-party contractors to select highly qualified peer
reviewers. The reviewers selected are leading experts in their respective fields, including
lifecycle assessment, economic modeling, remote sensing imagery, biofuel technologies, soil
science, agricultural economics, and climate science.
The commenter's industry can contribute to the development of an appropriate system
that can be used in the future in a number of ways in addition to providing comment for this
rulemaking including through ongoing EPA stakeholder outreach.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2612
Organization: Citizen (sample of 478 comment letters received from mass comment
campaign sponsored by American Soybean Association)
The commenter (2612) identified 8 "vital flaws and concerns with the RFS2 proposed rule":
1) Indirect Land Use - Flawed and immature assumptions and methodology utilized to measure
the indirect land use impacts of U.S. soy biodiesel production.
2) Feedstock Certification - Unnecessary and onerous feedstock certification requirements.
3) Nitrogen - The EPA methodology contains a major error pertaining to the direct emission
calculations for nitrogen in soybean production.
4) Co-Products - The EPA did not account for glycerine as a co-product.
5) Biodiesel Energy Balance - EPA inaccurately assesses the energy balance of biodiesel.
6) Biodiesel Pathway - The proposed pathway of using a 52-48 feedstock ratio of biodiesel
feedstocks is not workable in practice.
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RFS2 Summary and Analysis of Comments
7) GHG Calculations Must Account for Improved Agriculture Yields and Efficiency
8) Petroleum Baseline - EPA's analysis compares estimated, future direct and indirect GHG
emissions for biodiesel to only direct emissions for petroleum.
More broadly, the commenter (2612) notes that, "[With] corrected values for nitrogen emissions,
co-products, and the energy balance from biodiesel production would result in soy biodiesel
GHG emissions that are over 60% better than petroleum, easily exceeding the 50% GHG
threshold called for under the RFS2 biomass-based diesel schedule. An appropriate indirect land
use analysis would further enhance soy biodiesel's value relative to petroleum diesel." (2612 p.2)
Specific comments are listed under the appropriate heading.
Our Response:
(1): EPA continues to believe that compliance with the EISA mandate — determining
"the aggregate GHG emissions related to the full fuel lifecycle, including both direct emissions
and significant indirect emissions such as land use changes" — makes it necessary to assess
those direct and significant indirect impacts that occur not just within the United States, but also
those that occur in other countries.
(2) Feedstock certification comments are addressed in Section 3.3 of this Summary and
Analysis of Comments. In brief, EPA has determined that an aggregate compliance approach is
appropriate for renewable biomass that is defined as planted crops and crop residue from the
United States. See the Preamble Section II.B.4.C for further details on feedstock compliance for
all feedstocks.
(3): The proposal analysis calculated N20 emissions from domestic fertilizer application
and nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in N20 emissions. The proposal
analysis NzO factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating NzO emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
The NzO emission factors used in the proposal overestimated NzO emissions from
nitrogen fixing crops, because they were based on the 1996 IPCC guidance for N20 accounting.
As an update in 2006, IPCC guidance was changed such that biological nitrogen fixation was
removed as a direct source of NzO because of the lack of evidence of significant emissions
arising from the fixation process itself. IPCC concluded that the NzO emissions induced by the
growth of legume crops/forages may be estimated solely as a function of the above-ground and
below-ground nitrogen inputs from crop/forage residue. This change effectively reduces the
NzO emissions from nitrogen fixing crops like soybeans and nitrogen fixing hay from the 1996
to 2006 IPCC guidance.
Therefore, as part of the update to new N20 emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
(4): Glycerin is a co-product of biodiesel production. Our proposal analysis did not
assume any credit for this glycerin product. The assumption for the proposal was that by 2022
the market for glycerin would be saturated due to the large increase in biodiesel production in
both the U.S. and abroad and the glycerin would therefore be a waste product. We agree with
the comments that we should be factoring in a co-product credit for glycerin as there would be
some valuable use for this product in the market. Therefore, we have included for the final rule
analysis that glycerin would displace residual oil as a fuel source on an energy equivalent basis.
This is based on the assumption that the glycerin market would still be saturated in 2022 and that
glycerin produced from biodiesel would not displace any additional petroleum glycerin
production. However, the biodiesel glycerin would not be a waste and a low value use would be
to use the glycerin as a fuel source. The fuel source assumed to be replaced by the glycerin is
residual oil. This inclusion of a co-product credit for glycerin reduces the overall GHG impact
of biodiesel compared to the proposal analysis.
(5): The EISA mandates setting up fuel GHG thresholds do not require the EPA to do site
specific GHG analysis but rather determine for specific fuel pathways if they meet the thresholds
for the different fuel categories. Therefore, we have developed an average energy use value for
biodiesel production. As part of the final rule we updated the energy use assumptions for
biodiesel production to be in line with the latest energy balance reports from USDA and the
University of Idaho. Therefore, the final rule assumes lower energy use for biodiesel production
compared to the proposal analysis.
(6): For the final rule analysis soybean biodiesel meets the 50% lifecycle GHG reduction
threshold for biomass-based diesel. Therefore, the averaging of different feedstocks is not
required and is not part of the final rule.
(7): Our analysis does account for improving yields and efficiencies over time. For
example we have soybean yields increasing in our models out to 2022 which is the year we base
the analysis on. So our results do account for improving yields. Furthermore, we have
performed a high yield sensitivity analysis as part of this rulemaking to test the impact that
assumption has on the overall results.
(8): The reason the system boundaries used for threshold assessment in the proposed rule
and the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
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RFS2 Summary and Analysis of Comments
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
With all the changes made to the modeling since the proposal, soybean biodiesel qualifies
under the biomass based diesel standard with a 57% reduction in GHG emissions.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2620
Organization: Citizen (sample of 7,440 comment letters received from mass comment
campaign sponsored by National Biodiesel Board (NBBJ)
Comment:
The commenter (2620) notes that, "The lifecycle greenhouse gas methodology for biodiesel is
flawed." (2620 p. 2)
Our Response:
For the FRM, biodiesel results from soy were significantly updated in response to new
data and industry comment. Results also included an analysis of uncertainty which was
considered in determining compliance with the GHG threshold.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2622
Organization: Citizen (sample of 18 comment letters received from mass comment
campaign sponsored by National Biodiesel Board (NBBJ)
Comment:
The commenter (2622) notes that it is necessary for EPA to "Review iLUC models that could
take soybean oil-based biodiesel out of the demand mix." (2622 p. 1)
Document No.: EPA-HQ-OAR-2005-0161-2625
Organization: Citizen (sample of 400 comment letters received from mass comment
campaign sponsored by an anonymous organization)
Comment:
The commenter (2625) notes that, "EPA's method of lifecycle analysis, which utilizes various
models and incorporates indirect emissions from land use changes, is not widely accepted. As
such, and until a reasonable level of scientific consensus is achieved, the methodology should not
be used to regulate biodiesel." (2625 p. 2)
Further, the commenter (2625) notes that inaccurate data and assumptions were used in
developing the lifecycle analysis including, "Global market drivers for feedstocks, like soybeans
are not included." (2625 p. 2)
Our Response:
EPA is making the GHG threshold determination in this final rule based on a
methodology that includes an analysis of the full lifecycle, including significant emissions
related to international land-use change. As described in more detail in the Preamble, EPA has
used the best available models for this purpose, and has incorporated many modifications to its
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RFS2 Summary and Analysis of Comments
proposed approach based on comments from the public and peer reviewers and developing
science. EPA has also quantified the uncertainty associated with significant components of its
analyses, including important factors affecting GHG emissions associated with international land
use change. EPA has updated and refined its modeling approach since proposal in several
important ways, and EPA is confident that its modeling of GHG emissions associated with
international land use is comprehensive and provides a reasonable and scientifically robust basis
for making threshold determinations. For the final rule analysis EPA has determined that
soybean biodiesel qualifies under the biomass based diesel threshold. EPA plans to continue to
improve upon its analyses, and will update it in the future as appropriate.
As detailed in the preamble and RIA, EPA has used up to date models, data and other
information to assess the GHG impacts of biofuels. Throughout the development of EPA's
lifecycle analysis, the Agency has employed a collaborative, transparent, and science-based
approach. EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. We believe we have in a technically appropriate manner,
implemented the mandates of EISA Regarding the specific comment of market drivers, EPA
clearly recognizes there are a number of market drivers affecting agricultural decisions and has
acknowledged this in the preamble and RIA. We also indicate that we are using historical data
for the purpose of establishing a land use trend which assumes the market drivers affecting land
use in the past will continue through 2022.
While recognizing the ground breaking nature of using lifecycle analysis in regulation,
EPA also notes that it has used the best tools currently available (as supported by peer review
and public comment) and the most up to date information. The FRM analyses including the use
of uncertainty analysis, allows EPA to make a reasoned assessment of lifecycle GHG impacts of
biofuels compared to the petroleum fuels they are replacing, consistent with the mandates of
EISA.
The models EPA has used take into account the global demands and interactions for
feedstocks. Data used are the best currently available and reflect the inputs and coordination
with industry, USDA and other experts.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2390
Organization: Governors' Biofuels Coalition
Comment:
The commenter is disappointed by EPA's failure to adequately recognize the impacts of the
impressive technology advances that have already been implemented, and will continue to occur,
at both the direct and indirect level. The vast majority of U.S. ethanol production now comes
from plants built after 2005, and their improvements in energy and water efficiencies are well
demonstrated. Both corn and soybean yields will continue to increase because of technological
innovations. There is no question that biofuels will get cleaner in the years to come, and
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conventional and unconventional oil will get dirtier, but EPA's static modeling does not capture
these trend lines in any way. (2390.1, p.2)
Our Response:
EPA recognizes that advancements in technological progress will take place over time.
In this respect, EPA disagrees that the modeling analysis conducted for this rulemaking is static.
Rather, it takes into account various expectations for increases in technology throughout the
renewable fuel manufacturing process, both in the field and in the plants. Accordingly, EPA's
analysis of the agriculture sector includes crop yield projections that increase over time which
are consistent with USDA's projections. EPA also takes into account current and future
projected energy and technology improvements at biofuel production facilities. The lifecycle
GHG results for the different biofuels are based on 2022 values which accounts for the
agricultural and process technology improvements
7.2.1 Scenario Description
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) noted that EPA's analysis evaluates the incremental impact of
renewable fuel facilities built in 2022. The commenter believes that this procedure
underestimates GHG emissions from biofuel facilities before 2022 and introduces uncertainty
through use of projected factors instead of validated data. It would be better to base the analysis
on a near-term date using actual data and to then update as needed if data indicates improvement.
(2124.1, p.47)
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) notes that to quantify the incremental lifecycle GHG emissions
associated with the increase in biofuels mandated by EISA, EPA develops a "Control Case"
projection of lifecycle GHG emissions for the biofuel volumes assumed to be produced in 2022
in accordance with EISA. This projection is compared with a 2022 "Reference Case" projection
of lifecycle emissions for biofuel volumes assumed to be produced in the absence of EISA. The
commenter believes that basing LCA GHG benefits on a single future calendar year (2022)
magnifies uncertainty; it would be far better for EPA to base its analysis on a near-term date
using actual data and to update as needed if data indicates improvement. [[Docket number
2393.1, p. 49]]
Our Response:
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RFS2 Summary and Analysis of Comments
We continue to focus our final rule analyses on 2022 results for two main reasons. First,
it would require an extremely complex assessment and administratively difficult implementation
program to track how biofuel production might continuously change from month to month or
year to year. Instead, it seems appropriate that each biofuel be assessed a level of GHG
performance that is constant over the implementation of this rule, allowing fuel providers to
anticipate how these GHG performance assessments should affect their production plans.
Second, it is appropriate to focus on 2022, the final year of ramp up in the required volumes of
renewable fuel as this year. Assessment in this year allows the complete fuel volumes specified
in EISA to be incorporated. This also allows for the complete implementation of technology
changes and updates that were made to improve or modeling efforts. For example, the inclusion
of price induced yield increases and the efficiency gains of DCs replacement are phased in over
time. Furthermore, these changes are in part driven by the changes in earlier years of increased
biofuel use.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters (2129.1) believe that the basic structure of EPA's GHG lifecycle assessment as
well as the assessment of ILUC is reasonable and workable. The final rule should clarify that
periodic review and assessment of the lifecycle GHG emissions analysis and resulting fuel-
specific GHG emissions estimates is mandatory and should occur every three years. EPA must
insert a new section in the final rules regulatory text setting forth the review requirements.
(2129.1, pp.6-7)
Our Response:
EPA has indicated in the preamble its intention to continue to develop improvements to
lifecycle assessment of biofuels and to periodically update its analyses, consistent with EISA. It
is inappropriate and unnecessary to include regulatory text directed at EPA future actions.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter (2383) believes that EPA's regulations should create incentives to encourage
reductions in "direct" greenhouse gas emissions beyond the minimum requirements of EISA.
The commenter also believes that a voluntary, verifiable program involving appropriate
compliance assurance measures for corn ethanol manufacturers whose facilities and processes
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outperform industry average levels, or the minimum GHG reduction requirements set by the
RFS2 requirements, is the appropriate mechanism to assure the availability of credits. [[Docket
number 2383.1, p. 18]] [[See docket number 2383.1, pp. 18-19 for further discussion of this
issue.]]
Our Response:
EPA has distinguished performance across various pathways for corn ethanol production,
focusing on differences in processing technology and treatment of co-products. We have also
adopted a petition process whereby additional technical innovations can be evaluated and
recognized in our LCA assessments.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2508
Organization: Environmental Working Group (EWG)
Comment:
The commenter (2508) finds that the basic structure for EPA's assessment of the overall LCA as
well as the assessment of ILUC is reasonable and workable. The commenter supports the
general methodology that EPA has used for modeling the indirect land-use impacts. It is
ecologically and legally necessary for EPA to include ILUC in this assessment and the
commenter applauds EPA for doing so. (2508, pp.2-3) (See Docket Number 2508, p.3 for more
discussion on this issue)
Our Response:
EPA agrees with commenter that it is legally necessary for EPA to include international
land use emissions in its assessments.
7.2.2 Scope of the Analysis
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1001, EPA-HQ-OAR-2005-0161-1005, EPA-
HQ-OAR-2005-0161-1010, EPA-HQ-OAR-2005-0161-1011, EPA-HQ-OAR-2005-0161-1012,
EPA-HQ-OAR-2005-0161-1025, EPA-HQ-OAR-2005-0161-1029, EPA-HQ-OAR-2005-0161-
1043, etal.
Organization: Kurzman Clean Tech Research & Kurzman Capital, LLC, Cotner
Consulting Services, CC Gas Systems, LLC, Atlantic BioFuels, Glenwood Farms, Law Offices
of David Wilcox, C.I.E.,University of Georgia Engineering Outreach Service, et al.
Comment:
The commenters noted that EPA's GHG emissions methodology contains a major error
regarding direct emission calculations for nitrogen. The 2006 Guidelines for National
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RFS2 Summary and Analysis of Comments
Greenhouse Gas Inventories by the Intergovernmental Panel on Climate Change (IPCC)
concludes that nitrogen fixed in soil by soybeans should not be considered a GHG emission.
EPA, however, does not incorporate the IPCC's updated nitrogen findings and thus attributes
excess nitrogen emissions to soybean cultivation. The commenters noted that this error reduces
the GHG score for soy biodiesel by more than 20 percent. (1043.1, p. 3)
Our Response:
The proposal analysis calculated NzO emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in NzO emissions. The proposal
analysis N20 factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating NzO emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
The N20 emission factors used in the proposal overestimated N20 emissions from nitrogen
fixing crops, because they were based on the 1996 IPCC guidance for NzO accounting. As an
update in 2006, IPCC guidance was changed such that biological nitrogen fixation was removed
as a direct source of NzO because of the lack of evidence of significant emissions arising from
the fixation process itself. IPCC concluded that the N20 emissions induced by the growth of
legume crops/forages may be estimated solely as a function of the above-ground and below-
ground nitrogen inputs from crop/forage residue. This change effectively reduces the N20
emissions from nitrogen fixing crops like soybeans and nitrogen fixing hay from the 1996 to
2006 IPCC guidance.
Therefore, as part of the update to new NzO emission factors from DAYCENT used for our final
rule analysis we have updated to the 2006 IPCC guidance which reduces the N20 emissions from
soybean production. This has the effect of reducing lifecycle GHG emissions for soybean
biodiesel production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) states that an analysis of international indirect land use change should
not be used to regulate the U.S. biofuels industry. The commenter believes that the methodology
for assessing indirect emissions from international indirect land use change is not ready to be
used for purposes of regulating biofuels. In addition, the method used by EPA to estimate
indirect land use is new and untested. There are currently no generally accepted economic or
scientific methods for estimating indirect land use change. The commenter further states that
utilizing various models and incorporating indirect emissions from land use changes, is not
widely accepted for inclusion in a lifecycle analysis, and is not consistent with standards for such
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
analysis. As such, and until a reasonable level of economic or scientific consensus is achieved,
the commenter believes that the methodology should not be used to regulate biodiesel. [[Docket
number 2249.2, p.51]]
The commenter also states that if implemented as proposed by EPA, biodiesel produced from
domestically produced vegetable oils are disqualified from the Biomass-based Diesel program,
based on wholly unrelated land use decisions in South America, which will make it difficult to
meet the volume goals established by statute, despite the abundance of biodiesel available. To
realize the potential benefits of the RFS2, the commenter believes that it is imperative that the
regulation be guided by sound economics and science; together with, a transparent analysis.
[[Docket number 2249.2, p.51]] [[See docket number 2249.2, pp. 51-53 and docket number
2232.1, Attachments 4, 5, and 6 for additional discussion of this issue.]]
Our Response:
EPA recognizes that it has had to break new scientific ground in developing a lifecycle
methodology as required by EISA. This is why the Agency employed a collaborative,
transparent and science-based approach. EPA took numerous measures to seek public comment
on our approach—including extending the comment period for the proposed rule, holding a two-
day public workshop on the lifecycle methodology, and reaching out to dozens of stakeholders,
including the biodiesel community, through individual meetings, conferences and events. EPA
also initiated an independent peer review of specific areas of our work.
Further, EPA recognizes the state of scientific knowledge continues to evolve in this area.
While the Agency is using its current lifecycle assessments to inform the regulatory
determinations for fuel pathways in this final rule, the Agency is also committing to further
reassess these determinations. As part of this ongoing effort, we will ask for the expert advice of
the National Academy of Sciences as well as other experts. EPA will request that the National
Academy of Sciences over the next two years evaluate the approach taken in this rule, the
underlying science of lifecycle assessment, and in particular indirect land use change, and make
recommendations for subsequent rulemakings on this subject.
EPA has made the GHG threshold determinations based on a methodology that includes
an analysis of the full lifecycle, including significant emissions related to international land-use
change. EPA has used the best available models for this purpose, and has incorporated many
modifications to its proposed approach based on comments from the public and peer reviewers
and developing science. EPA has also quantified the uncertainty associated with significant
components of its analyses, including important factors affecting GHG emissions associated with
international land use change. The Agency has updated and refined its modeling approach since
the proposal in several important ways, and EPA is confident that its modeling of GHG
emissions associated with international land use is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations. Based on the Agency's
analyses, EPA has determined that biodiesel and renewable diesel from soy oil or waste oils, fats
and greases will exceed the 50% threshold for biomass-based diesel compared to the 2005
petroleum diesel baseline.
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RFS2 Summary and Analysis of Comments
7.2.2.1 Legal Interpretation of Lifecycle Greenhouse Gas Emissions
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2463.2
Organization: National Farmers Union
Comment:
The commenter (2463) states that the statute, as passed by Congress, does not mandate that EPA
consider international land use change as part of its lifecycle analysis. Instead, the statute
requires consideration of direct emissions and significant indirect emissions as determined by the
Secretary. Given the lack of a Congressional mandate to include the impact of international land
use impacts, the question turns on whether indirect land use change impacts can be proven to be
a result of ethanol production stemming from the RFS2. NFU believes that EPA has failed to
meet this threshold.
Including international land use impacts is within the discretion of the administration. As such,
EPA should be required to prove with a high level of certainty that domestic ethanol production
is the cause of international indirect land use before it inhibits future domestic ethanol production
and undermines Congressional intent in expanding renewable fuel usage in the United States.
We do not believe that EPA has done so. (2463.2 Pg. 4).
Our Response:
Overall, EPA is confident that it is appropriate to consider indirect emissions, including
those from both domestic and international land use changes, as "related to" the full fuel
lifecycle, based on the results of our modeling. These results form a reasonable technical basis
for the linkage between the full fuel lifecycle of transportation fuels and indirect emissions, as
well as for the determination that these emissions are significant. EPA believes that while
uncertainty in the resulting aggregate GHG estimates should be taken into consideration, it
would be inappropriate to exclude indirect emissions estimates from this analysis. The use of
reasonable estimates of these kinds of indirect emissions allows EPA to conduct a reasoned
evaluation of total GHG impacts, which is needed to promote the objectives of this provision, as
compared to ignoring or not accounting for these indirect emissions.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) states that Congress places limits on what emission should be included
in the lifecycle analysis adding that there is no evidence that Congress intended to address
international indirect land use changes through the RFS program. Moreover, the limits Congress
did place on EPA's authority to assess such emission evidences an intent not to include such
attenuated and speculative emissions. The commenter adds that the goal of the RFS was to assist
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
this country's efforts to move away from its dependence on foreign oil, so it would be
nonsensical for Congress not to have anticipated direct emissions from foreign production and
transportation of oil would be included in the analysis. [[Docket number 2249.2, pp. 64-66]]
The commenter also believes that Congress required that there be "significant" indirect
emissions from "significant" land use changes. The uncertainty and lack of evidence make it
speculative that any such changes occur as a result of U.S. biofuel production much less that
such changes would rise to the level of significance as to be required to be included in the
lifecycle analysis. [[Docket number 2249.2, p. 66]]
Our Response
EPA believes that a complete analysis of the aggregate GHG emissions related to the full
lifecycle of renewable fuels includes the significant indirect emissions from international land
use change that are predicted to result from increased domestic use of agricultural feedstocks to
produce renewable fuel. The statute specifically directs EPA to include in its analyses
significant indirect emissions such as significant emissions from land use changes. EPA has not
ignored either the terms "significant" or "life cycle." It is clear from EPA's assessments that the
modeled indirect emissions from land use changes are "significant" in terms of their relationship
to total GHG emissions for given fuel pathways. Therefore, they are appropriately considered in
the total GHG emissions profile for the fuels in question. EPA has not ignored the term "life
cycle." The entire approach used by EPA is directed to fully analyzing emissions related to the
complete lifecycle of renewable and baseline fuels.
Although the definition of lifecycle greenhouse gas emissions in Section 211 (o) does not
specifically mention international emissions, it would be inconsistent with the intent of this
section of the amended Act to exclude them. The definition of lifecycle GHG emissions makes
it clear that EPA is to determine the aggregate emissions related to the "full" fuel lifecycle,
including "all stages of fuel and feedstock production and distribution." Thus, EPA could not, as
a legal matter, ignore those parts of a fuel lifecycle that occur overseas.
Drawing a distinction between GHG emissions that occur inside the U.S. as compared to
emissions that occur outside the U.S. would result in a lifecycle analysis that bears no apparent
relationship to the purpose of this provision. The purpose of the thresholds in EISA is to require
the use of renewable fuels that achieve reductions in GHG emissions compared to the baseline.
Ignoring international emissions, a large part of the GHG emission associated with the different
fuels, would result in a GHG analysis that bears no relationship to the real world emissions
impact of transportation fuels. The baseline would be significantly understated, given the large
amount of imported crude and imported finished gasoline and diesel used in 2005. Likewise, the
emissions estimates for imported renewable fuel would be grossly reduced in comparison to the
aggregate emissions estimates for fuels made domestically with domestically-grown feedstocks,
simply because the impacts of domestically produced fuels occurred within the U.S. EPA does
not believe that Congress intended such a result.
Excluding international impacts means large percentages of GHG emissions would be
ignored. This would take place in a context where the global warming impact of emissions is
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RFS2 Summary and Analysis of Comments
irrespective of where the emissions occur. If the purpose of thresholds is to achieve some
reduction in GHG emissions in order to help address climate change, then ignoring emissions
outside our borders interferes with the ability to achieve this objective. Such an approach would
essentially undermine the purpose of the provision, and would be an arbitrary interpretation of
the broadly phrased text used by Congress.
Further, EPA does not agree that including international indirect emissions in EPA's
lifecycle analysis exercises regulatory authority over activities that occur solely outside the U.S.,
nor does it raise questions of extra-territorial jurisdiction. EPA's regulatory action involves an
assessment of products either produced in the U.S. or imported into the U.S. EPA is simply
assessing whether the use of these products in the U.S. satisfies requirements under EISA for the
use of designated volumes of renewable fuel, cellulosic biofuel, biomass-based diesel, and
advanced biofuel. Considering international emissions in determining the lifecycle GHG
emissions of the domestically-produced or imported fuel does not change the fact that the actual
regulation of the product involves its use solely inside the U.S.
Lastly, as to the comment that matters that could appropriately be considered part of a
food lifecycle (new land clearing for overseas grain production as a result of decreased U.S.
grain exports) should not be considered part of a renewable fuel lifecycle. However, the
suggested approach would mean that EPA would fail to account for the significant indirect
emissions that relate to renewable fuel production. EPA believes this would be counter to
Congressional intent. Although a life cycle analysis of foreign food production may also take
into account a given land use change, this does not mean that the same land use change should
not be considered in evaluating its ultimate cause, which may be renewable fuel production in
the United States.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter (2383) believes that EPA's regulations for conventional biofuels from new
facilities cannot properly attribute "significant indirect" greenhouse gas lifecycle emissions
impacts to compliance with the proposed standards without first developing scientifically
credible methods of analyzing such indirect effects. The commenter makes two points. First, it
must be recognized that the only indirect emissions impacts that EPA needs to address in the
RFS2 rulemaking are those that the statute requires it to address. Second, EPA must recognize
that the statute certainly gives it the authority to engage in "bifurcated" rulemaking, meaning, in
this context, the publication of a Final Rule addressing all issues other than the indirect emissions
assessment for biofuels that are subject to LCA requirements. [[Docket number 2383.1, pp. 19
and 20]] [[See docket number 2383.1, pp. 19-20 for extensive discussion of these points.]]
The commenter states that "Indirect" emissions, as the term is defined by EPA, involve a far
more complex analytical framework. While the NPRM at one juncture makes the claim that
"indirect land use change linkages are generally close, and not extended or overly complex," that
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is not the position of EPA's peer reviewers nor, in fact, of the authors of several of the key
predictive econometric models deployed by EPA in the rulemaking process. [[Docket number
2383.1, p. 22]] [[See docket number 2383.1, pp. 22-23 and docket number 2379.1, the
declaration of Bruce E. Dale.]]
The commenter believes that least four threshold issues involving indirect effects need to be
considered. The first is what type of causal link must exist between (i) compliance with the
RFS2 using fuels subject to the 20 percent GHG reduction target, and (ii) land use change
domestically or overseas. The second is whether the statute directs or permits EPA to treat
international land use change differently from land use change in the United States. The third is
whether it is appropriate, or permitted by the statute, to "discount" GHG emissions reductions
and increases based on when the GHG reductions or increases occur. The fourth (which is a
product mainly of the peer review process and the economic literature) is whether GHG
emissions are to be considered and valued based on anything other than their mass and relative
global warming potential. [[Docket number 2383.1, pp. 22-23]] [[See docket number 2383.1, pp.
22-34 for a detailed discussion of each of the four issues.]]
Document No.: EPA-HQ-OAR-2005-0161-2372
Organization: Illinois Corn Growers Association, Iowa Corn Growers Association,
Minnesota Corn Growers Association, Missouri Corn Growers Association, and Illinois
Renewable Fuels Association
Comment:
The commenters requested that EPA bifurcate the rulemaking docket into two separate dockets:
keep the existing docket (EPA-HQ-OAR-2005-0161) as Docket A to establish GHG footprints
for each category of renewable fuel and petroleum without consideration of ILUC; and open a
new Docket B to develop verifiable and consistent international data and a reliable model for
ILUC, and establish a timetable for any necessary studies and subsequent rulemaking action.
The commenters stated that, based on the record created, there are no currently available means
for accurately determining the nature and quantity of ILUC or its GHG emissions, or for relating
ILUC and its emissions to U.S. biofuel production. Bifurcation of the rulemaking creates an
avenue by which EPA can revisit the ILUC impacts of biofuels as accurate and consistent data
and models become available. The commenters stated that they believe the crux of the ILUC
problem (as summarized by the Association of Public and Land-Grant Universities in a letter to
Congressmen Peterson and Lucas): ".. .the scientific data aren't currently available on a global
basis to be able to accurately determine the extent to which biofuel production causes land use
changes in remote locations or the greenhouse gas emission that might exist."
The commenters suggested that EPA move forward with its rulemaking duty, but should not
include assumed, inaccurate ILUC emissions in the GHG emission footprints. The commenters
further stated that, given the highly level of error forecasted by EPA, indicated by various
comments submitted on the rule, doing something is not better than doing nothing (and it is not a
better alternative than creating a separate docket to develop a sound scientific basis for
determining ILUC impacts). The commenters thus believe that bifurcation is the best option in
this case because it will: 1) allow the RFS2 program to proceed as quickly as possible to achieve
EISA's goals; 2) avoid applying an arbitrary penalty to U.S. biofuels; 3) allow the record on
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ILUC GHG emissions to continue to be developed on a separate track as data and new models
become available; and 4) reduce the likelihood that the RFS2 standards will be appealed, stayed,
and vacated.
The commenters stated that they believe the ILUC component of the NPRM will not survive the
Clean Air Act's "arbitrary and capricious" standard of review. Additionally, the commenters
noted that bifurcation provides an avenue for completing the rulemaking consistent with
statutory directives and with the evidence in the record, while also recognizing the need for
additional study of the ILUC component on a separate tract, as consistent with the approach
adopted in the Peterson Amendment to HR 2454 and the EU's conclusion that additional study
of ILUC is necessary. The commenters further stated that bifurcation is consistent with EPA
precedent, as EPA has previously bifurcated rulemaking proceedings and/or deferred
consideration of elements of a rule when it determines that a portion of the rule is not supported
by scientific or other factual information in the record.
The commenters stated that they also believe bifurcation is necessary because the key models
used to forecast the emissions, FASOM and FAPRI, are not publicly available and their
assumptions and inputs have not been available for public review, and thus cannot be finalized in
the existing docket. The commenters also stated that additional currently available information
will not remedy the deficiencies in the ILUC data and models—they believe the additional
studies commissioned by EPA may improve the data, but will not change the fact that basic
information on international land use is not available and the inputs on modeling are not
consistent for domestic and international land use.
Our Response:
EPA is making the GHG threshold determination based on a methodology that includes
an analysis of the full lifecycle, including significant emissions related to international land-use
change. EPA has used the best available models for this purpose, and has incorporated many
modifications to its proposed approach based on comments from the public and peer reviewers
and developing science. EPA has also quantified the uncertainty associated with significant
components of its analyses, including important factors affecting GHG emissions associated with
international land use change. The Agency has updated and refined its modeling approach since
proposal in several important ways, and EPA is confident that its modeling of GHG emissions
associated with international land use is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations described above.
The advice and information received through EPA's peer review are reflected throughout
the final rule. The reviewers also provided recommendations that have helped to inform the
larger methodological decisions presented in the final rule. For example, the reviewers in
general supported the importance of assessing indirect land use change and determined that EPA
used the best available tools and approaches for this work. However, the review also recognized
that no existing model comprehensively simulates the direct and indirect effects of biofuel
production both domestically and internationally, and therefore model development is still
evolving. The uncertainty associated with estimating indirect impacts and the difficulty in
developing precise results also were reflected in the comments. The results of the peer review,
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and the feedback we have received from the comment process, supported the value of conducting
an uncertainty analysis to help quantify the magnitude of this uncertainty and its relative impact
on resulting lifecycle emission estimates. Therefore, working closely with other government
agencies as well as incorporating feedback from experts who commented on the rule, we have
quantified the uncertainty associated specifically with the international indirect land use change
emissions associated with increased biofuel production.
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 will continue to change.
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. As part of this
ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as well as
other experts, and incorporate their advice and any updated information we receive into a new
assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in this
final rule. EPA will request that the National Academy of Sciences over the next two years
evaluate the approach taken in this rule, the underlying science of lifecycle assessment, and in
particular indirect land use change, and make recommendations for subsequent rulemakings on
this subject. This new assessment could result in new determinations of threshold compliance
compared to those included in this rule that would apply to future production (from plants that
are constructed after each subsequent rule).
EPA believes the final methodology addresses each of the threshold issues identified by
the commenters.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2519
Organization: Canada, Foreign Affairs and International Trade
Comment:
The commenter (2519) believes that given the current state of biofuels trade between Canada and
the U.S., the Government of Canada would like to emphasize the need for regulatory alignment
on the lifecycle issue given that some of the aspects of the proposed EPA GHG assessment could
create a technical trade barrier for future Canadian biofuels exported to the U.S. [[Docket
number 2519.1, p. 2]]
Our Response:
The regulations finalized for RFS2 determine GHG threshold compliance on the basis of
fuel pathways, irrespective of the country where the feedstock or the fuel was produced.
EPA establishes in the final rulemaking a petition process whereby a party can petition
the Agency to consider new pathways for GHG reduction threshold compliance. We welcome
parties, both domestic and foreign, to utilize the petition process described below to request EPA
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to examine additional pathways. EPA will process these petitions as expeditiously as possible.
A full description of the petition process can be located in the Preamble Section V.C.
Regarding regulatory alignment, EPA technical staff has had informal technical
exchanges with their counterparts in Canada on lifecycle emissions assessment of transportation
fuels and expect to continue those technical exchanges.
7.2.2.2 System Boundaries
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) noted that EPA's analysis does not comply with ISO standards on
lifecycle analysis. The commenter also noted that EPA provided no explanation of how its
methodology attempts to comport with the ISO Standard. (2329.1, p.31)
EPA's claim that its analysis of international land use changes complies with the ISO
standards is wrong, and it is absolutely clear that substantially more work is needed to obtain
better data and to understand the numerous factors that affect land use decisions and their
interaction. These factors are:
-The analysis fails to use consistent system boundaries in conducting its comparisons between
renewable fuels and the baseline petroleum.
-The analysis suffers from a lack of reliable and updated data, and it cannot be validated.
-The analysis is not transparent and cannot be reproduced.
-The analysis fails to provide sufficient explanation of the uncertainties involved in evaluating
international indirect land use changes. (2329.1, pp.31-33) [[See Docket Number 2329.1, pp.31-
33 for a more detailed discussion of this issue]]
Our Response
EPA has used International Standards Organization (ISO) guidance on lifecycle analysis
in developing its lifecycle analysis. We have drawn upon a suite of the most recent and
advanced and peer-reviewed models, studies, and data to develop a methodology that
appropriately incorporates indirect land use change into renewable fuels lifecycle analyses. As
mandated in EISA, lifecycle GHG emissions of biofuels was compared to the lifecycle GHG
emissions of a 2005 gasoline or diesel baseline. For both the biofuels and petroleum GHG
lifecycle analysis, EPA has developed clear and consistent system boundaries (both physical and
temporal) which are explicitly laid out in the Final Rulemaking. Further, we assessed
uncertainty in final analysis. EPA provides a complete description of the lifecycle analysis
methodology and provides the data used in the analysis in the Final Rule Preamble, Regulatory
Impact Assessment, and the Docket.
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EPA conducted a formal, external, independent peer review for the novel pieces
developed for this lifecycle analysis following EPA and OMB guidance for third party, peer
reviews. The names of the reviewers, charge questions, the original comments received from the
reviewers as well as contractor summaries of the comments were made publically available in
the docket.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1052
Organization: Pennsylvania Energy Resources Group (ERG)
Comment:
The commenter (1052) believes that EPA's analysis compares estimated, future direct AND
INDIRECT GHG emissions for biodiesel to only direct emissions for petroleum is a violation of
sound science. Comparative analysis must contain the same comparative criteria, and should not
be an "apples to oranges" comparison. Congress recognized this and from our discussions with
members, it is clearly the intent to compare alternative fuels with fossil fuels on an even playing
field. Such comparison is a specific requirement of the International Standards Organization
(ISO) 14040 standard for lifecycle analysis. [[Docket number 1052.1, p. 2]]
Our Response:
The reason the threshold assessment in the proposed rule and the final rule did not
include a marginal analysis of petroleum production was due to the definition of "baseline
lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA. The definitions of the
different renewable fuel categories specify that the lifecycle threshold analysis be compared to
baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to be
only "average" lifecycle emissions for this single specified year and volume, it does not allow for
a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
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the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters (2129.1) believe that it is inappropriate for EPA to set the starting point it uses
for the period of the analysis of GHG emissions from biofuels in 2022 given that the GHGs are
emitted in the present as the feedstock and fuel is produced and combusted. The commenters ask
that EPA shift the baseline year for analysis from 2022 to a year that better reflects the average
performance of the RFS, such as 2012, with a commitment to update the analysis regularly to
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reflect documented changes in technologies and practices as well as better information on trends
in land-use and associated emissions. (2129.1, p.6)
The commenters are supportive of including all direct emissions and indirect emissions that are
shown to be significant in the baseline for gasoline and diesel fuel. (2129.1, p.6)
Our Response:
We continue to focus our final rule analyses on 2022 results for two main reasons. First,
it would require an extremely complex assessment and administratively difficult implementation
program to track how biofuel production might continuously change from month to month or
year to year. Instead, it seems appropriate that each biofuel be assessed a level of GHG
performance that is constant over the implementation of this rule, allowing fuel providers to
anticipate how these GHG performance assessments should affect their production plans.
Second, it is appropriate to focus on 2022, the final year of ramp up in the required volumes of
renewable fuel as this year. Assessment in this year allows the complete fuel volumes specified
in EISA to be incorporated. This also allows for the complete implementation of technology
changes and updates that were made to improve or modeling efforts. For example, the inclusion
of price induced yield increases and the efficiency gains of DCs replacement are phased in over
time. Furthermore, these changes are in part driven by the changes in earlier years of increased
biofuel use.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2168
Organization: First United Ethanol, LLC
Comment:
The commenter (2168) noted that EPA's suggested process of measuring the lifecycle is based
on flawed and outdated data that is often politically skewed. The chosen scientific methods must
be based on current, accurate information that has undergone unbiased peer review. If a process
is without precedent, it most often is not without error. (2168, p.2)
Our Response:
EPA has drawn upon a suite of the most recent and advanced and peer-reviewed models,
studies, and data to develop a methodology that appropriately incorporates indirect land use
change into renewable fuels lifecycle analyses. Further, EPA conducted a formal peer review of
new pieces included in the lifecycle analysis. In accordance with OMB and EPA peer review
guidance, EPA used independent, third-party contractors to conduct this external peer review by
experts in relevant fields. The names of the reviewers, charge questions, the original comments
received from the reviewers as well as contractor summaries of the comments were made
publically available in the docket.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) states that Congress did not specify the level of "science" required, but
EPA guidance and international standards require that any lifecycle analysis be based on sound
scientific principles and at this point, it is undisputed that an analysis of indirect land use changes
cannot meet these principles. The commenter refers to Federal government and ISO guidance, as
well as other information [[See docket number 2232.1, Attachments 8, 9, 11, and 12]] to support
their position, [[docket number 2249.2, p. 54]]
The commenter adds that it is simply insufficient to claim that indirect land use changes should
be included in the lifecycle methodology simply because there are some models available. EPA
must also provide sufficient support to indicate the models are reasonable to be used in this case.
The lack of scientific and economic validity of the models used for purposes on which to base a
regulatory rule is undisputed, which renders the entire methodology as wholly unreasonable and
unreliable, [[docket number 2249.2, p. 61]]
[[See docket number 2249.2, pp. 54-61 for a comprehensive discussion of this issue. Also see
docket number 2232.1, Attachments 8, 9, and 10]]
Our Response:
EPA has used International Standards Organization (ISO) guidance on lifecycle analysis
in developing its lifecycle analysis. We have drawn upon a suite of the most recent and
advanced and peer-reviewed models, studies, and data to develop a methodology for lifecycle
analyses of renewable fuel greenhouse gas emissions. As mandated in EISA, lifecycle GHG
emissions of biofuels was compared to the lifecycle GHG emissions of a 2005 gasoline or diesel
baseline. For both the biofuels and petroleum GHG lifecycle analysis, EPA has developed clear
and consistent system boundaries (both physical and temporal) which are explicitly laid out in
the Final Rulemaking. Further, we assessed uncertainty in the final analysis. EPA provides a
complete description of the lifecycle analysis methodology and provides the data used in the
analysis in the Final Rule Preamble, Regulatory Impact Assessment, and the Docket.
EPA has followed EPA and federal regulatory procedures. In addition, EPA has
extensively coordinated the development of our methodology and selection of inputs and models
with outside experts and across the federal government. After EISA's enactment in December
2007, we met frequently with the Departments of Agriculture and Energy to share our analytical
plan, request feedback on our key assumptions, and provide preliminary results as they became
available. In many cases, we adopted the models, inputs, and assumptions suggested by these
Departments.
EPA also conducted a formal, external, independent peer review for the novel pieces
developed for this lifecycle analysis following EPA and OMB guidance for third party, peer
reviews. The names of the reviewers, charge questions, the original comments received from the
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reviewers as well as contractor summaries of the comments were made publically available in
the docket.
EPA recognizes that it has had to break new scientific ground in developing a lifecycle
methodology as required by EISA. This is why the Agency employed a collaborative,
transparent and science-based approach. EPA took numerous measures to seek public comment
on our approach—including extending the comment period for the proposed rule, holding a two-
day public workshop on the lifecycle methodology, and reaching out to dozens of stakeholders,
including the biodiesel community, through individual meetings, conferences and events. As
noted by the commenter, EPA also initiated an independent peer review of specific areas of our
work. The information we received through this process has led to the approach in this final rule
which bases the GHG threshold compliance determinations on the weight of evidence currently
available and quantifies the uncertainty about critical variables.
Further, EPA recognizes the state of scientific knowledge continues to evolve in this area.
While the Agency is using its current lifecycle assessments to inform the regulatory
determinations for fuel pathways in this final rule, the Agency is also committing to further
reassess these determinations. As part of this ongoing effort, we will ask for the expert advice of
the National Academy of Sciences as well as other experts.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2367
Organization: New Fuels Alliance (NFA)
Comment:
The commenter (2367) believes that EPA's carbon accounting methodologies should adhere to
the fundamental principles of a fair and balanced LCA, starting with common LCA System
boundaries. [[Docket number 2367.1, p. 2]]
The commenter is concerned that the proposed RFS2 program would debit biofuels for direct and
indirect carbon emissions, but would only debit petroleum for direct carbon emissions. The
commenter believes this approach would establish an unbalanced carbon accounting metric that
would distort the environmental benefits associated with producing and using biofuel. In
addition, this approach is clearly to the benefit of petroleum, as the fuel being penalized for
fewer general categories of carbon emissions, which runs counter to the overarching policy goals
of EISA07 to reduce our dependence on petroleum fuel. [[Docket number 2367.1, p. 4]]
[[See docket number 2367.1, pp. 2-10 for a detailed discussion of this issue.]]
The commenter also believes that EPA should credit biofuels with an indirect "Avoidance
Credit" for mitigating petroleum indirect effects [[Docket number 2367.1, p. 27]] [[See docket
number 2367.1, pp. 27-29 for discussion of this issue.]]
Our Response:
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The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
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would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2425
Organization: Petro Algae
Comment:
The commenter (2425) urges EPA to be more clear about the indirect emissions that need to be
included in a LCA. The statement that the aggregate quantity of GHG emissions includes direct
emissions and significant indirect emissions such as significant emissions from land use changes
can be very misleading. How does a company determine what is significant? Without clarity,
there will be gaming in the system. The commenter recommends a clear list of both direct and
indirect sources simply be supplied by EPA. [[Docket number 2425.1, p. 6]]
Our Response:
In the preamble, RIA, and other supporting documentation, EPA has detailed what is
included in its LCA assessments including the boundary conditions for the assessment and
impacts on land use. We note, however, that individual companies need not calculate their own
LCA as EPA does this as part of its GHG threshold compliance assessment. We do not believe
our methodology promotes "gaming of the system." However, we also note that the
methodology and data inputs will be reviewed and updated as appropriate by EPA with updates
reflected in subsequent rulemakings.
7.2.3 Modeling Framework
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2339
Organization: Illinois Com Growers Association (IGCA)
Comment:
The commenter states that EPA has used a single well-known model, GREET, to determine the
lifecycle emissions for gasoline and diesel as well as the direct GHG emissions for renewable
fuels. In contrast, for indirect emissions from renewable fuels, EPA has pieced together the
output of a number of different models which were developed for entirely different purposes.
While the GREET Model is up-to-date, the ICGA is concerned that the models used to calculate
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indirect emissions may contain out-of-date information on matters such as state-of -the-art
ethanol technology and processes, increased crop yields, and other new and evolving agricultural
practices. Further, ICGA is concerned that the assumptions, confidence levels, and inputs for the
models vary in general. [[#2339 p.3]]
Our Response:
EPA disagrees with the comment that the GREET model inputs are more up to date than
the inputs used in our rulemaking analysis. Rather, our analysis takes into account various
expectations for increases in technology throughout the renewable fuel manufacturing process,
both in the field and in the plants. Accordingly, EPA's analysis of the agriculture sector includes
crop yield projections that increase over time which are consistent with USDA's projections.
EPA also takes into account current and future projected energy and technology improvements at
biofuel production facilities. The lifecycle GHG results for the different biofuels are based on
2022 values which accounts for the agricultural and process technology improvements.
Furthermore, EPA does not use the GREET model for the direct impacts of biofuel production,
accounting for biofuel lifecycle GHG emissions are done with the use of agricultural sector
models.
While the GREET model has been used extensively in the past to determine lifecycle
GHG emissions from transportation fuels, it was not sufficient for the lifecycle modeling
required for this rulemaking. The EISA mandate specifically required the assessment of indirect
impacts of biofuel production, the GREET model does not include indirect impacts and therefore
could not be solely used for this rulemaking analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2320.1
Document No.: EPA-HQ-OAR-2005-0161-2415.1
Organization: Informa for Growth Energy
Organization: Informa for Renewable Fuels Association, Illinois Corn Marketing Board
and National Corn Growers Association
Comment:
There remained a significant difference in U.S. commodity price impacts of RFS2 despite
attempts to harmonize U.S. export volumes of major commodities between FASOM and FAPRI
models. The commenter asserts that this differential likely has a significant impact on land use
change in other countries (2320.1, pi,11-12)
Informa suggests allowing ethanol yields per bushel to continue to increase instead of being
static as assumed in FASOM. (2320.1, p3,13)
EPA crop yields are too low, Informa projects exceeding 200 bushels per acres for corn in 2022
and almost 52 bushels per acres of soybean yields by 2022. (2320.1,p32/33) (2415.1,pl4/15)
Our Response:
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Although the FASOM and FAPRI models serve a largely similar purpose in the RFS2
analysis, which is to model the economic impacts of the rule on the agriculture sector, they are
fundamentally two different models. FASOM is a long-term model that analyzes the U.S.
agriculture sector in five year time steps, where as FAPRI analyzes the global agriculture sector
in annual time steps, taking world trade, consumption and production interactions into account.
The differences in commodity price changes between the two models, as noted by the
commenter, are primarily due to the fact that the FAPRI model allows for increased renewable
fuel production in other countries, thereby muting price impacts worldwide and in the U.S.
While the EPA analysis for the proposed rulemaking has specifically attempted to harmonize as
many assumptions between the two models as possible (e.g., corn and soybean yields based on
USDA projections), a number of additional assumptions have been coordinated between both
models for the final rulemaking analysis. These include modeling the same levels of renewable
fuels expected to fulfill the RFS2 requirements by 2022 (e.g., corn ethanol, soy oil biodiesel,
corn oil biodiesel, etc.), distillers grains replacement rates of corn and soybean meal in animal
feed (based on research by Argonne National Laboratory), and others. With this additional
coordination, combined with a number of improvements to the models (e.g., the addition of the
forestry sector in the FASOM model, and the addition of the regional Brazil Module in the
FAPRI model) EPA believes that its analysis of the global agriculture sector is more consistent,
refined, and detailed as a result. For details on the improvements to the FASOM and FAPRI
models, as well as the assumptions used in each model, please refer to Chapter 5 of the RIA.
The corn ethanol conversion yields (2.71 gallons/bushel for dry mill ethanol and 2.5
gallons/bushel) used in our agricultural sector modeling represent the average yields for all
ethanol mills in production. These yields reflect the lower yields achieved by older existing
plants, as well as higher yields expected in future plants. The average ethanol yield used in our
modeling is higher than the current industry average, therefore it implicitly reflects anticipated
increases in efficiency in the future. As a point of clarification, the ethanol yields cited in the
Informa report appear to be for 5% denatured corn ethanol, which must be converted to pure
ethanol for an equivalent comparison.
Our crop yield projections are based on USDA's most recent forecasts through 2018, and
then extrapolated out through 2022. We believe these projections represent a feasible future
scenario. However, we have also included a sensitivity analysis that increases corn and soybean
yields by approximately 25% by 2022. The results of this analysis are included in the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2320.1
Document No.: EPA-HQ-OAR-2005-0161-2415.1
Organization: Informa for Growth Energy
Organization: Informa for Renewable Fuels Association, Illinois Corn Marketing Board
and National Corn Growers Association
Comment:
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FASOM used an unrealistically low level of soybean oil as feedstock in its reference case.
(2320.1, p2,18,34) (2415.1, p!6)
Our Response:
Based on comments we have received, for the final rulemaking, we have revised our
reference case to include higher volumes of soybean oil as a biodiesel feedstock. However, since
our analysis normalizes the greenhouse gas emissions impacts on a per BTU basis, the effect of
using different volumes in our calculations is minimized.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2320.1
Organization: Informa for Growth Energy
Comment:
Informa was unable to run the FAPRI models independently as only staff members at Iowa State
University can operate and solve the model. (2320.1, pi)
The time period in estimating key coefficients within equations in FAPRI could not be
determined. There appears to be no peer review of the adjustments made to these coefficients
outside of CARD. (2320.1, p!9)
Informa conducted a "backcast" with the FASOM model and found that historical and current
export estimates from FASOM did not match or come close to actual historical exports. The
soybean oil and meal exports simulated by FASOM for the 2000-2004 period are more than
double the actual levels occurred. This is important because soybean oil is used in biodiesel.
(2320.1, pl.9-11)
Our Response:
The FASOM and FAPRI models were used for the economic agricultural analysis. EPA
has provided in the docket a number of materials explaining how the models work and how they
produced the results in the proposal as well as the results provides in the final rule, including: the
release of data from these models that are used in the analysis; detailed documentation in the
form of the preamble, RIA, and technical reports; and making the models themselves available to
the extent possible. This, in combination with EPA's outreach to stakeholders throughout the
analytical process, hosting a public forum on the lifecycle analysis methodology, and the
publication of a peer review of the methodology used, EPA believes that the information
provided in the Notice of Proposed Rulemaking (NPRM) is consistent with Agency and OMB
guidelines on information quality and provides a comprehensive source of information allowing
robust opportunity for public comment. See the related response to Document Number EPA-
HQ-OAR-2005-0161-0952 for additional information on this topic.
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EPA recognizes that the FAPRI model can not be run by others without obtaining the
services of the Center for Agricultural and Rural Development (CARD) staff at Iowa State
University. While this makes it harder for commenters to have the model run for themselves,
that does not mean they have not been provided adequate information and opportunity to
comment on EPA's proposal. There are other rulemaking situations where EPA relies on
information in a proposal that is not automatically replicable by commenters, and this does not
mean EPA may not rely on it or that commenters are not provided an adequate opportunity to
comment. For example, in some rulemakings EPA relies on peer reviewed studies of health
effects associated with air pollution, and commenters may or may not have access to the
underlying data in the study, hence may not be able to replicate the study themselves. However
that does not mean EPA may not rely on relevant and credible studies, or that EPA has not
provided an adequate opportunity to comment on the basis for EPA's proposal, including
comment on the pros and cons of that study or other studies or modeling that also shed light on
the same issue. In this case, EPA provided a comprehensive variety of information that explains
in detail the analysis and modeling underlying the proposal and final rule. Commenters have
commented on many of these elements of EPA's work, and have in some cases referred EPA to
other relevant modeling results or studies. EPA has provided all of the information it could
about the basis for its modeling, and commenters have had a full opportunity to comment on it.
Any inability to have the FAPRI model run for the commenter themselves, whether to replicate
EPA's results or run variations on them, does not preclude comemnters from providing comment
on the results of that modeling and all of the underlying information provided by EPA related to
it, and to obtain other information they deem relevant to support their comments.
The FAPRI model as used for the NPRM analysis was made available on the docket in a
"solved" model state for one of the volume scenarios analyzed. This allows the public to view
all of the elements of the model, and includes all formulas, assumptions, and elasticities used.
These factors apply to all volume scenarios run through the FAPRI model. EPA will also
provide the updated version of the model in a "solved" state on the docket for the final
rulemaking analysis. In addition, all data used for the lifecycle analysis is available on the
docket. This includes data for all sensitivity analysis (e.g., "high yield" scenarios). Also, a
technical report authored by those who "run" the models, CARD staff at Iowa State University,
is available on the docket, and provides details on assumptions used, how the model functions,
and results from the model.
EPA disagrees that the FAPRI model is not reviewed outside of staff at CARD at Iowa
State University. In regards to a review of the FAPRI model, FAPRI (which consists of both the
Center for National Food and Agriculture Policy at the University of Missouri-Columbia, and
CARD at Iowa State University) conducts an annual baseline review and publishes their baseline
projections for the U.S. agricultural sector and international commodity markets. These
published baseline projections are known as FAPRI Outlooks. These baseline projections are
extensively reviewed by several groups prior to publication, including USDA, various
international organizations, other academic institutions, and other industry experts. Comments
and recommendations from these groups are taken into account for the final baseline projection
published in the FAPRI Outlook each year. EPA's analysis of the global agriculture sector is
based on the latest FAPRI baseline available, taking into account assumptions used in the EPA
analysis, as well as the adding to the model's capabilities where appropriate, such as the addition
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of the regional Brazil Module. All adjustments made to the FAPRI model for EPA's analysis is
thoroughly documented in the RIA and items in the docket mentioned above. Additional
information on the review of the FAPRI model, baseline projection review, and publications of
the FAPRI Outlook can be found on FAPRI's website.
It should also be noted that the results of these models will not exactly reflect historical
observations when "backcasting" is conducted. To analyze each renewable fuel feedstock, EPA
analyzes the effect of an increase in demand for each particular renewable fuel, holding all other
factors constant. Through this method, all changes that occur in the model are attributable to this
change in demand. However, this evaluation will not reflect historical data patterns, as there are
several varying factors occurring simultaneously in history.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2320.1
Document No.: EPA-HQ-OAR-2005-0161-2415.1
Organization: Informa for Growth Energy
Organization: Informa for Renewable Fuels Association, Illinois Corn Marketing Board
and National Corn Growers Association
Comment:
Both FASOM and FAPRI use oversimplified assumptions regarding the amounts of corn and
soybean meal displaced by DCs. Informa considers the update of Dr. Jerry Shurson in March of
2009 of the Argonne report to be the best available for determining corn and soybean meal
displacement, which calls for 0.895 and 0.334 for corn and soybean meal displacement ratios,
respectively. (2415.1,plO Appendix H) The FASOM and FAPRI models should assume that one
pound of distillers grains displaces 1.23 Ibs of corn and soybean meal combined. (2320.1, p2)
The FASOM model understates distillers grains production. There appears to be a discrepancy in
the model to cause a shortfall in number of tons produced. Also, FASOM's distillers grain yield
is lower than that used by USDA. (2320.1, p!5)
Our Response:
For the final rulemaking analysis, distillers grains replacement rates of corn and soybean
meal in animal feed have been updated based on the latest research by Argonne National
Laboratory in both the FASOM and FAPRI models. These replacement rates are higher and
more efficient than those used in the proposal's analysis. It should be noted that replacement
rates vary by animal in the Argonne report, and have been implemented as such in EPA's
analysis. This method provides a more accurate analysis than the replacement rates for corn and
soybean meal suggested by the commenter, which are weighted averages across different animal
types. Details on these assumptions can be found in the RIA and the technical reports for each
respective model. EPA believes that this is an important part of the agriculture sector analysis,
and will continue to monitor the scientific progress made on this topic. As updated scientific
data becomes available in, EPA will update its assumptions accordingly in future analyses.
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Between the analysis for the proposal and the final rulemaking, we also recognized the
discrepancy in the amount of distillers grains produced. We have updated the FASOM model to
reflect the appropriate amount of distiller grains production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2320.1
Document No.: EPA-HQ-OAR-2005-0161-2415.1
Organization: Informa for Growth Energy
Organization: Informa for Renewable Fuels Association, Illinois Corn Marketing Board
and National Corn Growers Association
Comment:
Informa believes that corn-based ethanol production will reach 17 billion gallons in a reference
case by 2022 due to continued corn yield improvements and global economic growth will
support high energy prices so that corn-based ethanol volumes are over the RFS2 level to be
produced. (2415.1,p7 Appendix H)
Informa suggests using AEO 2008 early release version rather than AE02007 as the basis for
reference case volumes. Land use change is likely overstated during the 2012 and 2017 periods
due to differences between the two AEO cases. (2320.1, p3,13)
Our Response:
Even if corn ethanol volumes in the reference case would have been higher using either
the AEO 2008 early release volumes or Informa's projections, we disagree that our analysis
overstates land use change impacts. The threshold analysis mandated by EISA requires EPA to
determine the impacts of the different biofuels production which requires us to consider two
scenarios with differing volumes of biofuels. So regardless of what volume might or might not
actually be produced, our threshold analysis would still be based on two different volume
scenarios and production of any amount of biofuels would still have an impact. Furthermore,
since our analysis normalizes the greenhouse gas emissions impacts on a per BTU basis, the
effect of using different volumes in our calculations is minimized.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2463.2
Organization: National Farmers Union
Comment:
The commenter (2463) states that there is little certainty that international land use changes will
occur, and if so, that they are the result of U.S. corn ethanol production. The significant lack of
transparency and inability of stakeholders to replicate EPA's results severely undermines the
confidence in the proposed rule's findings. (2463.2 Pg. 4).
Document No.: EPA-HQ-OAR-2005-0161-0952
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Organization: Renewable Fuels Association
Comment:
The commenter (0952.1) noted that even though EPA indicated it is being transparent with
respect to its lifecycle analysis, the information that has been provided is wholly insufficient.
Based on the information currently provided in the Notice of Proposed Rulemaking, Regulatory
Impact Analysis, and supporting and related materials posted to docket EPA-HQ-OAR-2005-
0161 as of May 29, 2009, third parties are unable to replicate the results of EPA's biofuels
lifecycle modeling for proposed changes to the RFS program. While certain inputs, outputs, and
documentation for independent models are made available on the docket, stakeholders are unable
to assemble these disparate components in a way that would reasonably allow replication of the
EPA modeling process. (0952.1, p.2)
The commenter noted that it is important that stakeholders have the ability to replicate EPA's
results for several reasons: 1.) To allow stakeholders to understand the structure of the modeling
framework and the impact of certain parameters on the modeling outcomes; 2.) To validate the
accuracy and precision of EPA's analysis; 3.) To allow stakeholders to perform independent
analyses using alternative assumptions and inputs. (0952.1, p.2)
The commenter believes that the inaccessibility of these models and the lack of clear, detailed
documentation on how the various models and data sets were integrated appears to violate EPA's
guidance regarding transparency. (0952.1, p.2)
The commenter requested the following items:
1. EPA should provide public access to the FAPRI system of models as configured for the
RFS analysis. This should include all assumptions, inputs, price and demand elasticities
used, outputs for all scenarios and sensitivity cases, and other pertinent information.
2. EPA should provide public access to the FASOM model as configured for the RFS
analysis. This should include all assumptions, inputs, price and demand elasticities used,
outputs for all scenarios and sensitivity cases, and other pertinent information.
3. EPA should provide the version of the GREET model it used for the RFS analysis along
with all assumptions and inputs that differ from GREET defaults. Further, the ASPEN-
based model used by EPA should be made available with documentation describing how
the model was used to generate 2022-era performance assessments.
4. EPA should provide detailed documentation describing exactly how all of the various
models used (FAPRI, FASOM, GREET, ASPEN, etc.) were integrated and what
adjustments were made to each to enable amalgamation. For example, there is no
documentation available on how the emissions data provided by Winrock Corp. Was
applied to the FAPRI model results. A thorough description of how all of the inputs and
outputs from each model were reconciled and harmonized is absolutely essential.
(0952.1, pp.2-3)
On August 4, the commenter submitted comments expressing their concerns that there is still
insufficient information for the public to adequately comment on the proposal and, therefore,
meaningfully participate in the rulemaking process. Of particular concern, and the focus of this
letter, is the inability of the public to replicate EPA's analysis with respect to international ILUC.
(1042.1, p.l)
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One of the specific concerns outlined in the commenter's June comments was that the Food and
Agriculture Policy Research Institute (FAPRI) system of models as configured and used by EPA
was not available for public use. Therefore, stakeholders were unable to replicate EPA's work.
The commenter had requested that the FAPRI model itself and all associated materials be made
available so that stakeholders could "run" the model to replicate EPA's results and to conduct
sensitivity analyses. Several dozen spreadsheets and documents containing model inputs and
results were posted to the docket during the first week of June 2009. The information provided
by EPA does not allow the public to replicate EPA's findings. According to the docket, the
FAPRI model is contained on a CD with the ID # of EPA-HQ-OAR-2005-0161-967. Upon
receipt, the CD was found to contain 10 Microsoft EXCEL files, but no other documentation.
Upon opening each file, the EXCEL program immediately generated an error message stating
that additional information was needed from other workbooks. Examination of these missing
links determined that none of the listed files and spreadsheets was included on the CD. Indeed,
some of these files were even referenced by inaccessible web addresses. Since these auxiliary
files are missing, EXCEL only allows the user to "Edit", "Update", or "Ignore" these links. In
this situation, the "Edit" and "Update" options are invalid, since the required files are simply not
available. Selecting the "Ignore" option leaves each spreadsheet in a quasi-finished state, with
many incomplete cells and equations, broken executables (macros), etc. Consequently, the
FAPRI system, as delivered on the CD, is inoperable and insufficient to explain how EPA
reached its results. (1042.1, p.2-3)
The commenter also commented on a subsequent document posted to the docket (EPA-HQ-
OAR-2005-0161-1020) entitled "Solving the Food and Agriculture Policy Research Institute
Model", which provided a broad overview of the FAPRI modeling system. Unfortunately, the
document does not give any information regarding how to set up or run the spreadsheets, what
data needs to be shared between them, or how to determine when the system has reached
"equilibrium." As a result, the FAPRI system is still inoperable by stakeholders. In investigating
the issue further and discussing the model's configuration with professors at Iowa State
University, the commenter learned that due to the structural nature of the FAPRI model, no one
outside of the FAPRI/CARD system can actually "run" the model in the way that it was run for
EPA's analysis. Thus, it appears the only way to conduct independent FAPRI model runs and
sensitivity analysis is to establish a contract with FAPRI/CARD. This is a great concern to the
commenter. (1042.1, p.3)
The commenter noted that because the model is inaccessible to run by anyone other than current
FAPRI/CARD staff in the same manner that it was run for EPA, the FAPRI model results cannot
be verified and, moreover, lack corroboration and validity. While the commenter is not
questioning the integrity or acumen of the FAPRI modelers who conducted the EPA analysis, the
results do not have the same level of validity that they would if someone outside of the
CARD/FAPRI system were able to replicate the results. The inability to replicate EPA's FAPRI
model results greatly weakens the capacity of stakeholders to provide meaningful comment.
Further, the inability of stakeholders to conduct sensitivity runs is particularly problematic
because EPA did not conduct any sensitivity analyses of its own on the effects of various inputs
on land use emissions with the FAPRI model. In addition to providing sufficient information to
allow the public to replicate EPA's analysis, EPA also must "apply especially rigorous
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robustness checks to analytical results and carefully document all checks that were undertaken."
The commenter requests that robust sensitivity analysis of the impacts of various input variables
on land use emissions be conducted. The commenter also requests that EPA provide the results
of these sensitivity runs to the public for their review and comment, as well as any changes to its
analysis and results that EPA anticipates for the final rule. At a minimum, the commenter
believes sensitivity runs should be conducted and provided to the public on the following major
factors:
- Projected domestic and international crop yields
- Distillers grains (DG) displacement ratios and ingredients displaced
- Conservation Reserve Program (CRP) and cropland pasture land inventories
- Pasture stocking rates in Brazil (1042.1, pp.3-4)
[[A more thorough description of these factors and others, as well as the desired EPA sensitivity
analysis is can be found on pp. 6-7 of Docket Number 1042.1.]]
The commenter also believes that the FASOM and FAPRI models being used by EPA to assess
indirect land use changes were not intended for the purposes in which they are being used by
EPA. These are economic models that attempt to assess the impacts of changes in policy and
economic parameters on prices and agricultural commodities, and were not intended to forecast
absolute levels of exports. (2329.1, p.27). [[See Docket Number 2329.1, pp.27-29 for a detailed
discussion of this issue]]
The commenter noted that even though they support the California Air Resources Board's
(CARB) analysis of emissions from indirect land use change, CARB's disparate results
compared to EPA show the high uncertainty in using economic models. The widely disparate
results coming from EPA, CARB, and others is further evidence that the results are highly
sensitive to a number of exceedingly uncertain input parameters and assumptions. (2329.1,
pp.33-34)
The commenter also noted that comparing the results to the real world shows that the economic
models are not reasonable to assess emissions attributable to ethanol. The commenter noted that
agricultural markets in the real world frequently contradict economic theory and highlight the
need to exercise caution when interpreting the results of economic models. (2329.1, pp.34-35)
Our Response:
The FASOM and FAPRI models were used for the economic agricultural analysis. EPA
has provided in the docket a number of materials explaining how the models work and how they
produced the results in the proposal as well as the results provides in the final rule, including: the
release of data from these models that are used in the analysis; detailed documentation in the
form of the preamble, RIA, and technical reports; and making the models themselves available to
the extent possible. This, in combination with EPA's outreach to stakeholders throughout the
analytical process, hosting a public forum on the lifecycle analysis methodology, and the
publication of a peer review of the methodology used, EPA believes that the information
provided in the Notice of Proposed Rulemaking (NPRM) is consistent with Agency and OMB
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guidelines on information quality and provides a comprehensive source of information allowing
robust opportunity for public comment.
EPA recognizes that the FAPRI model can not be run by others without obtaining the
services of the CARD staff at Iowa State University. While this makes it harder for commenters
to have the model run for themselves, that does not mean they have not been provided adequate
information and opportunity to comment on EPA's proposal. There are other rulemaking
situations where EPA relies on information in a proposal that is not automatically replicable by
commenters, and this does not mean EPA may not rely on it or that commenters are not provided
an adequate opportunity to comment. For example, in some rulemakings EPA relies on peer
reviewed studies of health effects associated with air pollution, and commenters may or may not
have access to the underlying data in the study, hence may not be able to replicate the study
themselves. However that does not mean EPA may not rely on relevant and credible studies, or
that EPA has not provided an adequate opportunity to comment on the basis for EPA's proposal,
including comment on the pros and cons of that study or other studies or modeling that also shed
light on the same issue. In this case, EPA provided a comprehensive variety of information that
explains in detail the analysis and modeling underlying the proposal and final rule. Commenters
have commented on many of these elements of EPA's work, and have in some cases referred
EPA to other relevant modeling results or studies. EPA has provided all of the information it
could about the basis for its modeling, and commenters have had a full opportunity to comment
on it. Any inability to have the FAPRI model run for the commenter themselves, whether to
replicate EPA's results or run variations on them, does not preclude comemnters from providing
comment on the results of that modeling and all of the underlying information provided by EPA
related to it, and to obtain other information they deem relevant to support their comments.
In regards to the items specifically requested by the commenter:
1. The FAPRI model as used for the NPRM analysis was made available on the docket in a
"solved" model state for one of the volume scenarios analyzed. This allows the public to
view all of the elements of the model, and includes all formulas, assumptions, and
elasticities used. These factors apply to all volume scenarios run through the FAPRI
model. EPA will also provide the updated version of the model in a "solved" state on the
docket for the final rulemaking analysis. In addition, all data used for the lifecycle
analysis is available on the docket. This includes data for all sensitivity analysis (e.g.,
"high yield" scenarios). Also, a technical report authored by those who "run" the models,
CARD staff at Iowa State University, is available on the docket, and provides details on
assumptions used, how the model functions, and results from the model.
2. The FASOM model, as used for the NPRM analysis, was made available on the docket in
the form of a CD. The updated version of the model used for the final rulemaking
analysis will also be available on the docket, as well as the data from the model used for
the analysis, and a technical report that provides details on assumptions used, how the
model functions, and results from the model.
3. The GREET model used in the analysis was provided in the Docket, the RIA documents
any changes made to the assumptions in GREET. The spreadsheets used in our analysis
are available in the Docket as well and they provide, along with documentation in the
RIA, all the assumptions used regarding process energy use.
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4. Details regarding the assumptions made for each model, as well as how the models were
used together to complete the lifecycle analysis is discussed in the RIA. In addition, the
docket contains detailed technical reports for the FASOM and FAPRI models which
document how the models work, as well as a discussion of the assumptions used and
results from the RFS2 analysis.
One of the technical difficulties associated with replication of the FAPRI model is that it is a
complex set of models that does not rely on an automated process. Rather, it requires experts at
CARD to run the complete set of FAPRI models. Documentation on the general structure and
operation of the FAPRI models is available on the docket. This documentation is not intended to
be a set of instructions. Rather, it is intended to reveal how the models actually operate in an
effort to be as transparent as possible
Although the FAPRI model cannot be operated by any third parties, EPA has provided all
data from FAPRI runs used in the lifecycle analysis, as well as those for sensitivity analyses, on
the docket. In addition, EPA quantified in the uncertainty in our evaluation of GHG emissions
impacts from biofuel-induced land use changes. These uncertainty ranges, and the procedures
used to calculate them, are presented and discussed in preamble Section V and in additional
detail in RIA Chapter 2.
Regarding alternative scenarios, the analysis for the final rulemaking includes a sensitivity
run with higher domestic and international yields for corn and soybean. These results will be
available on the docket. In regards to the other requests for sensitivity runs, a number of other
updates have been made to the FASOM and FAPRI models that affect these factors. Namely,
distillers grains replacement rates for corn and soybean meal in animal feed are updated to reflect
the latest research by Argonne National Laboratory in both the FASOM and FAPRI models, and
the FAPRI Brazil module includes livestock production and pasture acres on a regional basis
within Brazil. Each region allows for livestock intensification on pasture land in response to
competition for other land uses, demand for livestock production, and other factors. Additional
detail on these updates can be found in the RIA and the technical reports for each respective
model.
Throughout the rulemaking process, EPA consulted with numerous experts and stakeholders
in industry, academia, and government in regards to all aspects of the analysis. Based on
feedback received through this consultation process, but also through the publicly available peer
review of EPA's lifecycle methodology, EPA has received support for the use of economic
agricultural models (FASOM and FAPRI) to estimate changes in cropland worldwide based on
changes in demand for renewable fuel. EPA also received feedback on the use of general
equilibrium models, such as GTAP, to estimate land use change. However, partial equilibrium
economic models used for the lifecycle analysis (FASOM and FAPRI) provide more refined
detail than a general equilibrium model is able to. In order to further explore how these two
types of models compare with one another, using similar assumptions, EPA has provided a
complementary analysis of the RFS2 using the GTAP model. Details on the use of the GTAP
model, and how it compares to the FAPRI models used in the lifecycle analysis, can be found in
the RIA.
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It should be noted that the results of these models will not exactly reflect historical
observations. To analyze each renewable fuel feedstock, EPA analyzes the effect of an increase
in demand for each particular renewable fuel, holding all other factors constant. Through this
method, all changes that occur in the model are attributable to this change in demand. However,
this evaluation will not reflect historical data patterns, as there are several varying factors
occurring simultaneously in history.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0953
Organization: Great River Energy
Comment:
The commenter (0953.1) believes that user- friendly models and metrics are needed for industry
participants to understand how a wide variety of technologies will be evaluated under Net
Lifecycle Greenhouse Gas Emissions. (P.I)
Our Response:
The models chosen to evaluate the lifecycle GHG emissions for a particular renewable
fuel feedstock are among the most recommended models that can be used for their particular
purpose. How each model was used, and how each model interacted with another, is thoroughly
documented through the RIA and a series of technical reports provided on the docket, written by
the creators/implementers of the models. The data used for analysis is also provided, and when
possible, the models themselves have been made available to the public to evaluate how the
models applied.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0981
Organization: Nebraska Center for Energy Sciences Research, Department of Agronomy
and Horticulture, University of Nebraska-Lincoln
Comment:
The commenter ((0981) states that the LCA in the RFS2 is excessively complicated, and
particularly as the basis for regulation. It employs such a large number of excessively complex
models that regulated entities and researchers will have limited abilities to evaluate the accuracy
of the estimations. The commenter adds that the RFS2 LCA methodology must approach
complete transparency of methods, data, and references used. Achieving adequate transparency
of assumptions and data employed in LCAs for regulation of biofuels is best achieved using only
one or a few models, but comprehensive evaluation in the LCA of indirect effects requires
multiple complicated models. The commenter asks if transparency and comprehensive
evaluation are mutually exclusive, and if so, suggests it may be justified to concentrate the first
round of RFS2 LCA methodology on direct emission only. (Pp. 5-7)
Our Response:
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EPA recognizes that it has had to break new scientific ground in developing a lifecycle
methodology as required by EISA. This is why the Agency employed a collaborative,
transparent and science-based approach. EPA took numerous measures to seek public comment
on our approach—including extending the comment period for the proposed rule, holding a two-
day public workshop on the lifecycle methodology, and reaching out to dozens of stakeholders,
including the biodiesel community, through individual meetings, conferences and events. As
noted by the commenter, EPA also initiated an independent peer review of specific areas of our
work. The information we received through this process has led to the approach in this final rule
which bases the GHG threshold compliance determinations on the weight of evidence currently
available and quantifies the uncertainty about critical variables.
Further, EPA recognizes the state of scientific knowledge continues to evolve in this area.
While the Agency is using its current lifecycle assessments to inform the regulatory
determinations for fuel pathways in this final rule, the Agency is also committing to further
reassess these determinations. As part of this ongoing effort, we will ask for the expert advice of
the National Academy of Sciences as well as other experts.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0981
Organization: Nebraska Center for Energy Sciences Research, Department of Agronomy
and Horticulture, University of Nebraska-Lincoln
Comment:
The commenter recommends that all values and corresponding units for primary data inputs used
in the proposed LCA framework be provided and clearly linked to the supporting documentation.
Preference should be given to documentation taken from peer-reviewed publications or other
widely accessible databases. If acceptable transparency can not be reached, the EPA should
consider forgoing analysis of secondary indirect effects, while focusing on direct emission in the
interim. (P. 7)
Our Response:
The FASOM and FAPRI models were used for the economic agricultural analysis. EPA
has provided in the docket a number of materials explaining how the models work and how they
produced the results in the proposal as well as the results provides in the final rule, including: the
release of data from the models that are used in the analysis; detailed documentation in the form
of the preamble, RIA, and technical reports; and making the models themselves available to the
extent possible. This, in combination with EPA's outreach to stakeholders throughout the
analytical process, hosting a public forum on the lifecycle analysis methodology, and the
publication of a peer review of the methodology used, EPA believes that the information
provided in the Notice of Proposed Rulemaking (NPRM) and Final rule is consistent with
Agency and OMB guidelines on information quality and provides a comprehensive source of
information allowing robust opportunity for public comment.
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EPA recognizes that the FAPRI model can not be run by others without obtaining the
services of the CARD staff at Iowa State University. While this makes it harder for commenters
to have the model run for themselves, that does not mean they have not been provided adequate
information and opportunity to comment on EPA's proposal. There are other rulemaking
situations where EPA relies on information in a proposal that is not automatically replicable by
commenters, and this does not mean EPA may not rely on it or that commenters are not provided
an adequate opportunity to comment. For example, in some rulemakings EPA relies on peer
reviewed studies of health effects associated with air pollution, and commenters may or may not
have access to the underlying data in the study, hence may not be able to replicate the study
themselves. However that does not mean EPA may not rely on relevant and credible studies, or
that EPA has not provided an adequate opportunity to comment on the basis for EPA's proposal,
including comment on the pros and cons of that study or other studies or modeling that also shed
light on the same issue. In this case, EPA provided a comprehensive variety of information that
explains in detail the analysis and modeling underlying the proposal and final rule. Commenters
have commented on many of these elements of EPA's work, and have in some cases referred
EPA to other relevant modeling results or studies. EPA has provided all of the information it
could about the basis for its modeling, and commenters have had a full opportunity to comment
on it. Any inability to have the FAPRI model run for the commenter themselves, whether to
replicate EPA's results or run variations on them, does not preclude comemnters from providing
comment on the results of that modeling and all of the underlying information provided by EPA
related to it, and to obtain other information they deem relevant to support their comments.
Specifically, the FAPRI model as used for the NPRM analysis was made available on the
docket in a "solved" model state for one of the volume scenarios analyzed. This allows the
public to view all of the elements of the model, and includes all formulas, assumptions, and
elasticities used. These factors apply to all volume scenarios run through the FAPRI model.
EPA will also provide the updated version of the model in a "solved" state on the docket for the
final rulemaking analysis. In addition, all data used for the lifecycle analysis is available on the
docket. This includes data for all sensitivity analysis (e.g., "high yield" scenarios). Also, a
technical report authored by those who "run" the models, CARD staff at Iowa State University,
is available on the docket, and provides details on assumptions used, how the model functions,
and results from the model.
The FAPRI model is a complex set of models that does not rely on an automated process.
Rather, it requires experts at CARD to run the complete set of FAPRI models. Documentation
on the general structure and operation of the FAPRI models is available on the docket. This
documentation is not intended to be a step-by-step set of instructions. Rather, it is intended to
reveal how the models actually operate in an effort to be as transparent as possible.
The FASOM model, as used for the NPRM analysis, was made available on the docket in
the form of a CD. The updated version of the model used for the final rulemaking analysis will
also be available on the docket, as well as the data from the model used for the analysis, and a
technical report that provides details on assumptions used, how the model functions, and results
from the model.
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RFS2 Summary and Analysis of Comments
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0981
Organization: Nebraska Center for Energy Sciences Research, Department of Agronomy
and Horticulture, University of Nebraska-Lincoln
Comment:
The commenter also recommends that default parameter values and emission factors for each
individual fuel type in the GREET model undergo rigorous external peer review managed by the
EPA, and a summary list of all internal parameters and supporting citations be included with
GREET for each fuel type. The commenter points to the EBAMM and BESS [Biofuel Energy
Systems Simulator] LCA emissions models and their associated documentation of primary data
as examples of appropriate transparency and disclosure. (P. 9)
Our Response:
EPA conducted an external peer review of the lifecycle analysis used in the RFS2
proposed rule. This peer review included consideration of the use of GREET emission factors
for fertilizer production, petroleum fuel use, electricity production, and fuel and feedstock
transport. The peer reviewers concluded that the GREET factors were adequate for our
analyses. In addition, the GREET parameters used for our lifecycle analyses are all available in
Chapter 2 of the RIA of this final rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1001, EPA-HQ-OAR-2005-0161-1005, EPA-
HQ-OAR-2005-0161-1010, EPA-HQ-OAR-2005-0161-1011, EPA-HQ-OAR-2005-0161-1012,
EPA-HQ-OAR-2005-0161-1025, EPA-HQ-OAR-2005-0161-1029, EPA-HQ-OAR-2005-0161-
1043, EPA-HQ-OAR-2005-0161-2079, etal.
Organization: Kurzman Clean Tech Research & Kurzman Capital, LLC, Cotner
Consulting Services, CC Gas Systems, LLC, Atlantic BioFuels, Glenwood Farms, Law Offices
of David Wilcox, C.I.B., University of Georgia Engineering Outreach Service, AE Biofuels, Inc.,
etal.
Comment:
The commenters noted that much of the data and assumptions contained within the nine models
used by EPA are inaccurate. Examples of errors include:
-Energy balance data used by EPA is out of date.
-Co-product allocations for glycerin were not incorporated.
-Global market drivers for feedstocks, like soybeans are not included.
Document No.: EPA-HQ-OAR-2005-0161-1051, EPA-HQ-OAR-2005-0161-2435, et al.
Organization: Aberdeen Development Corp., R.W. Heiden Associates LLC, et al.
Comment:
The commenters believe EPA's methodology is not ready to be used for purposes of regulating
biofuels. They stated that EPA's method of lifecycle analysis, which utilizes various models and
incorporates indirect emissions from land use changes, is not widely accepted and is not
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consistent with standards for such analysis. As such, and until a reasonable level of scientific
consensus is achieved, the methodology should not be used to regulate biodiesel. [[Docket
number 2435.1, p. 3]]
The commenters also believe much of the data and assumptions contained within the nine
models used by EPA are inaccurate. Examples include: Energy balance data used by EPA is out
of date, co-product allocations for glycerine were not incorporated, Global market drivers for
feedstocks, like soybeans are not included. [[Docket number 2435.1, p. 4]]
Our Response:
To the maximum extent possible, we have continued to review and update the data and
assumptions underlying our modeling tools. As part of the final rule we updated the energy use
assumptions for biodiesel production to be in line with the latest energy balance reports including
the University of Idaho Study. Therefore, the final rule assumes lower energy use for biodiesel
production compared to the proposal analysis. In addition, we have revised our analysis to
assume that glycerin will displace residual oil as an energy source for this final rulemaking. We
disagree, however, that global market drivers for feedstocks are not included in our models. For
example, our partial equilibrium agricultural sector models FASOM and FAPRI both take into
account that approximately 80% of the soybean is meal, whereas approximately 20% of the
soybean is oil. Profit maximization that takes into account both streams of ree is included in the
projected planting decisions of farmers. In addition, both agricultural sector models take into
account changes in macroeconomic conditions over time, such as increases in income and
population that also affect world markets for feedstocks.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1015, EPA-HQ-OAR-2005-0161-2010, EPA-
HQ-OAR-2005-0161-2011, EPA-HQ-OAR-2005-0161-2013, etal.
Organization: Renewable Energy Group, SoyMor Biodiesel, LLC, Western Dubuque
Biodiesel LLC, Central Iowa Energy, LLC, et al.
Comment:
The commenters stated that the renewable fuels industry is experiencing economic challenges
that necessitate creativity and innovation to ensure marketplace viability. However, credit
market uncertainty is exacerbated due to the EPA's use of LCA that does not conform to ISO
LCA standards and EPA guidelines for LCA use. EPA's Information Quality Guidelines define
environmental model use.
Regarding LCA on biofuels, the commenter believes that EPA has not provided complete,
transparent, and relevant information to the extent practicable for comprehensive review.
ISO LCA principles and framework are long standing and well tested. Again, EPA has allowed
the data quality requirements to be dated and the use of partial equilibrium models that were not
specifically designed for the outcome intended by Congress. The commenters pointed to other
weaknesses, as noted by peer reviewer Dr. Wang.
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EPA states in the preamble that it has utilized the best science available in reference to analyzing
renewable fuels GHG threshold compliance, but the response to the draft rules demonstrates the
inadequacy of the best science available. The commenters believe that additional analysis must
proceed before regulatory measures are finalized, otherwise, the commenter asks will we instead
replace imported foreign oil with imported foreign renewable fuel? Is this outcome the intent of
policy makers? The commenters believe EPA should implement interim rules and proceed with
the mandated gallons on 1/1/10, but not attribute GHG thresholds until further scientific analysis
can be completed.
Our Response:
EPA has used International Standards Organization (ISO) guidance on lifecycle analysis
in developing its lifecycle analysis. We have drawn upon a suite of the most recent and
advanced and peer-reviewed models, studies, and data to develop a methodology for lifecycle
analyses of renewable fuel greenhouse gas emissions. As mandated in EISA, lifecycle GHG
emissions of biofuels was compared to the lifecycle GHG emissions of a 2005 gasoline or diesel
baseline. For both the biofuels and petroleum GHG lifecycle analysis, EPA has developed clear
and consistent system boundaries (both physical and temporal) which are explicitly laid out in
the Final Rulemaking. Further, we assessed uncertainty in the final analysis. EPA provides a
complete description of the lifecycle analysis methodology and provides the data used in the
analysis in the Final Rule Preamble, Regulatory Impact Assessment, and the Docket.
EPA has followed EPA and federal regulatory procedures. In addition, EPA has
extensively coordinated the development of our methodology and selection of inputs and models
with outside experts and across the federal government. After EISA's enactment in December
2007, we met frequently with the Departments of Agriculture and Energy to share our analytical
plan, request feedback on our key assumptions, and provide preliminary results as they became
available. In many cases, we adopted the models, inputs, and assumptions suggested by these
Departments.
EPA conducted a formal, external, independent peer review for the novel pieces
developed for this lifecycle analysis following EPA and OMB guidance for third party, peer
reviews. The names of the reviewers, charge questions, the original comments received from the
reviewers as well as contractor summaries of the comments were made publically available in
the docket.
With regard to domestically and foreign-produced fuel, the regulations finalized for RFS2
determine GHG threshold compliance on the basis of fuel pathways, irrespective of the country
where the feedstock or the fuel was produced.
Lastly, with regard to Dr. Wang's comments summarized in the comment letter: For the
LCA analysis done for this rulemaking EPA has built into the models used activities and
technologies for the pathways considered. As part of the threshold analysis needed for this
rulemaking we do not need to identify individual plant or location specific profiles but rather
average values for specific fuel and feedstock pathways. As new technologies become available
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we have a number of ways of incorporating those into our analysis going forward. EPA provides
a petition process in the FRM through which fuel pathways not included in the FRM can be
analyzed and provided a compliance determination by EPA. Furthermore, EPA is committed to
periodic updates that will take into account in the modeling new activities and technologies.
EPA's approach of using agriculture economic models like FASOM and FAPRI to model
biofuel production are specifically designed to simulate the use of different agricultural sector
products and co-products. The models consider the markets and value of the different products
and the interactions in these markets with the production and use of different products and co-
products. So for biodiesel production, the markets for soybean meal and soybean oil are
specifically captured and the changes in these markets with more or less soybean meal produced
and more or less soybean oil used for biodiesel are captured.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1669
Organization: Environmental Intelligence, Inc.
Comment:
The commenter (1669.1) noted that some research has stated that the GREET model, upon which
some federal policy analysis is based, overstates the energy required to produce soybeans and
other crops. RFS2 should be delayed to allow completion of a multi-year study (with a
statistically significant study population) of the energy inputs to row crop production. Some
other research has stated that the GREET model also overstates energy requirements for ethanol
processing. (1669.1, p. 1)
Our Response:
EPA disagrees with this comment, as described in the proposal and final rule, we do not
rely on GREET factors and inputs for energy required for row crop production or for energy used
at ethanol facilities. The values we do use in the FASOM model on row crop production are
based on USDA and State data on production and it varies by management practice and region.
For foreign production our input data was based on FAO and IEA data and were peer reviewed
as part of this rulemaking process.
Ethanol energy use was based on a study by the University of Illinois at Chicago Energy
Resource Center and assumes efficiency improvements over time.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1722
Organization: Citizen
Comment:
The commenter (1722) noted that EPA repeatedly noted that "the best science available" is used,
yet the models used do not meet the standards that EPA uses for findings, such as the science
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RFS2 Summary and Analysis of Comments
cited in EPA's recent determination regarding the six greenhouse gases that cause or contribute
to endangerment of health and welfare. (1722, p.3)
Our Response:
The lifecycle methodology developed by EPA, and explained in detail in this final rule, is
based on the best available scientific techniques. It also relies on a body of scientific literature
on this topic as well as an independent scientific peer review of EPA's methodology. The peer
review, the public comments we have received, and the analysis conducted for the proposal and
final rule indicate that it is important to take into account indirect emissions. Through this
evaluation, EPA also has determined that biofuels production leads to both negative and positive
indirect land use changes. We also recognize the uncertainties inherent in this estimation and
therefore have taken an approach that quantifies the uncertainty and presents the weight of
currently available evidence in making our threshold determination.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2002
Organization: Novozymes North America, Inc. (Novozymes)
Comment:
The commenter (2002) has serious concerns with the "pasture replacement method", which the
EPA has developed as an add-on to the modeling of international land use change in the FAPR1
Model. The commenter makes the following recommendations:
1. The agency should give further consideration to the mechanisms that lead to conversion of
grassland/savanna to pasture land and incorporate that in the modeling for the final rule.
2. EPA may consider using the GTAP Model to quantify the level of livestock intensification and
encourages EPA to align pasture replacement and livestock intensification with the changes in
livestock production predicted by the FAPRI Model in order to ensure consistency.
3. EPA should reconsider not just the amount of land being affected by pasture replacement but
also the types of land (the biomes) being affected. [[Docket number 2002.1, pp. 2-3]]
Our Response:
1. For the final rule we made several improvements in our analysis of land converted to
pasture.
As explained in preamble Section V, one of the major changes made to the FAPRI model
between the NPRM and FRM includes the more detailed representation of Brazil through a new
integrated module. The Brazil module was developed by Iowa State with input from Brazilian
agricultural sector experts and we believe it is an improvement over the approach used in the
proposal. The new Brazil module also explicitly accounts for changes in pasture acres, therefore
accounting for the competition between crop and pasture acres. Furthermore, the Brazil module
explicitly models livestock intensification, the practice of increasing the number of heads of
cattle per acre of land in response to higher commodity prices or increased demand for land.
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In addition to modifying how pasture acres are treated in Brazil, we also improved the
methodology for calculating pasture acreage changes in other countries. We received several
comments through the public comment period and peer reviewers supporting a better analysis of
the interaction between crops, pasture, and livestock. In the NPRM, although we accounted for
GHG emissions from livestock production (e.g., manure management), we did not explicitly
account for GHG emissions from changes in pasture demand. In response to comments received,
our new methodology accounts for changes in pasture area resulting from livestock fluctuations
and therefore captures the link between livestock and land used for grazing. Based on regional
pasture stocking rates (livestock per acre), we now calculate the amount of land used for
livestock grazing. The regional stocking rates were determined with data on livestock
populations from the UN Food and Agricultural Organization (FAO) and data on pasture area
measured with agricultural inventory and satellite-derived land cover data. As a result of this
change, in countries where livestock numbers decrease, less land is needed for pasture.
Therefore, unneeded pasture acres are available for crop land or allowed to revert to their natural
state. In countries where livestock numbers increase, more land is needed for pasture, which can
be added on abandoned cropland or unused grassland, or it can result in deforestation. We
believe this new methodology provides a more realistic assessment of land use changes,
especially in regions where livestock populations are changing significantly. For additional
information on the pasture replacement methodology, see RIA Chapter 2.
2. For the reasons discussed in preamble Section V, we considered the use of the GTAP
model, but based on the input we received from commenters and expert reviewers, we did not
rely on GTAP in our analysis for this rulemaking. Instead, we opted to use the GTAP model to
inform the range of potential GHG emissions associated with land use change resulting from an
increase in biofuels. As the commenter states, GTAP does attempt to explicitly model pasture
area and the potential for pasture intensification and extensification.
As described in more detail in RIA Chapter 2, the quantity of total acres converted to
crop land projected by GTAP were generally consistent with the FAPRI results when normalized
on a per BTU basis, although there were differences in the regional distribution of these changes.
The land use changes projected by GTAP were smaller than land use changes predicted by
FAPRI, which is most likely due to two differences in the modeling frameworks. First, demand
for other uses of land are explicitly captured in GTAP, which puts downward pressure on the
amount of land that can be converted to crops from pasture or forest. Second, none of the peer-
reviewed versions of GTAP currently contain unmanaged cropland, thereby omitting additional
sources of land. The GTAP model also predicted larger increases in forest conversion than the
FAPRI/Winrock analysis, in part because the GTAP model includes only three types of land (i.e.,
crops, pasture, forest). As discussed in the FAPRI/Winrock section, there are many other
categories of land which may be converted to pasture and crop land.
As the GTAP model results are sensitive to the key parameter values, it was also useful
for developing a set of confidence intervals around the projected land use changes using a
systematic sensitivity analysis. Several key parameters were identified that have a significant
impact on the land use change projections, including the yield elasticity (i.e., the change in yield
that results from a change in that commodity's price), the elasticity of transformation of land
supply (i.e., the measure of how easily land can be converted between forest, pasture, and crop
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RFS2 Summary and Analysis of Comments
land), and the elasticity of transformation of crop land (i.e., the measure of how easily land can
be converted between crops). Although the confidence intervals are relatively large, in most
cases the ranges do not bracket zero. Therefore, we conclude that the impacts of the corn ethanol
and soybean biodiesel mandates on land use change are statistically significant. Additional
information on the GTAP results is discussed in RIA Chapter 2.
3. Among the most important revisions to our international analysis, in terms of their net
effect on GHG emissions, were improvements that we made in our modeling of the interactions
between livestock, pasture, crops and unused, or underutilized, grasslands globally. In the
NPRM we made the broad assumption that international crop expansion would necessarily
displace pasture, which would require an equivalent amount of pasture to expand into forests and
shrublands. In the FRM analysis as discussed above, we have linked international changes in
livestock production with changes in pasture area to allow for pasture abandonment in regions
where livestock production decreases as a result of biofuel production. We also incorporated the
ability of pasture to expand onto unused, or underutilized, grasslands and savannas which on a
global basis reduced the amount of forest conversion compared to the proposal. For more details
on our revised analysis of the types of land affected by pasture conversion, see RIA Chapter 2.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2016
Organization: Malaysian Palm Oil Board (MPOB)
Comment:
The commenter (2016.10 believes that the latest data must be use in models used. The data in
Table VI.B5-1 of the proposal preamble for the Winrock Model are outdated being from 2001 to
2004 and do not reflect the latest trend. The percentage of land converted from forest in Malaysia
(74%) appears to be misleading and may include replanting of old oil palm trees. (2016.1, p.2)
Our Response:
EPA strongly agrees with the commenter that the latest data and models should be used
for lifecycle GHG analysis. Throughout the development of EPA's lifecycle analysis, the
Agency has employed a collaborative, transparent, and science-based approach. In order to
maximize stakeholder outreach opportunities, the comment period for the proposed rule was
extended to 120 days. In addition to this formal comment period, EPA made multiple efforts to
solicit public and expert feedback on our approach. Beginning early in the NPRM process and
continuing throughout the development of this final rule, EPA held hundreds of meetings with
stakeholders, including government, academia, industry, and non-profit organizations, to gather
expert technical input. Our work was also informed heavily by consultation with other federal
agencies. For example, we have relied on the expert advice of USDA and DOE, as well as
incorporating the most recent inputs and models provided by these Agencies. Dialogue with the
State of California and the European Union on their parallel, on-going efforts in GHG lifecycle
analysis also helped inform EPA's methodology. As described below, formal technical
exchanges and an independent, formal peer review of the methodology were also significant
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components of the Agency's outreach. A key result of our outreach effort has been awareness of
new studies and data that have been incorporated into our final rule analysis.
EPA also agrees with the commenters' recommendation that the most recent satellite
imagery should be incorporated. All of the expert peer reviewers agreed that the version 4
MODIS data set used in the proposed rule, which covers 2001-2004 with one square-kilometer
(1km) spatial resolution, was appropriate for our analysis given the goals of the study at the time.
However, almost all of the reviewers strongly recommended using a data set covering a longer
time period. The reviewers argued that the 3-year time period from 2001-2004 was too short to
capture the often gradual, or sequential, cropland expansion that has been observed in the tropics.
The short time period may also show unusual or temporary trends in land use caused by short-
term policy changes or market influences. The reviewers suggested that remote sensing
observations covering 5-10 years would be adequate to address these problems. The reviewers
also recommended that remote sensing observations should be as recent as possible in order to
capture current land use change drivers and patterns (e.g., political systems, infrastructure, and
protected areas). To use the best available data and respond to the peer reviewers'
recommendations, the analysis was updated to include the most recent MODIS data set, version
5, which covers the time period 2001-2007. MODIS land cover products are not available for
years prior to 2001, so it is not currently possible to analyze a time period longer than six years
(i.e., 2001-2007) with a single, or consistent, data set. Thus, consistent with the peer review
recommendations, we are now using the most recent global data set which covers at least 5 years.
There are other advantages to using the version 5 MODIS data, such as improved spatial
resolution, and robust data validation. MODIS V5 provides 4-times better spatial resolution than
the data used in our proposed rule analysis. Based on this improved data set, and our validation
results, which are discussed further in the Section V of the preamble and Chapter 2.4.4 of the
RIA, our updated estimate of the percentage of new cropland from forest in Malaysia is 52%,
with 27% coming from mixed land (which is a mosaic of savanna, grassland, forest and
cropland) and 13% coming from savanna. While we think this represents a much improved
estimate compared to our analysis for the proposed rule, we are still aware of the uncertainty in
this part of our analysis. For example, we acknowledge that satellite imagery could confuse
forest land and oil palm plantations in Malaysia. Therefore, for the final rule, we quantified the
uncertainty in these estimates and presented a range of results. Furthermore, to narrow the
uncertainty, we utilized data validation from NASA, which compared the satellite land cover
classifications to on the ground surveys. This data validation helped us to correct the original
data set for systematic classification errors, such as the potential issues raised by the commenter.
Finally, it should be noted we have not directly analyzed land use change impacts from
U.S. consumption of biodiesel derived from palm oil. For such an analysis, we would want to
consider additional data sources to determine the areas where palm oil production would be most
likely to expand in that particular scenario.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2048
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Organization: BioPure Fuels
Comment:
The commenter (2048.1) recommends that U.S. EPA staff follow the recommendations of
UNICA in re-adjusting the GREET model to update it to the more realistic situation in
production of sugar cane in the current production now centered in Sao Paulo and other southern
states. (2048.1, p.10) (See Docket Number 2048.1, pp.9-10 for a detailed discussion of this issue)
Our Response:
For the final rule we have updated our imported sugarcane ethanol analysis based on
those comments submitted by UNICA as well as recommendations from Brazilian researchers.
Changes since the proposal include assuming the additional production of electricity due to the
collection of sugarcane trash, phase out of sugarcane burning in the future, mechanization of
harvesting, and updates in feedstock and ethanol transport. These changes reflect the
improvements expected to be possible by 2022.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2112
Organization: Biomass Rules, LLC
Comment:
The commenter (2112.1) noted that the economic modeling can not meet the ISO standards for
the following reasons:
- Country specific data is required, but rarely exists.
- Models are based on insights, assumptions, simplifications, and many subjective judgment
calls.
- EPA and the California Air Resources Board (CARB) are using economic policy decision
models (FAPRI and GTAP) to make billion dollar regulatory laws.
- Model accuracy is not high enough to achieve EISA mandate objectives. (2112.1, p.7)
Our Response:
EPA has used International Standards Organization (ISO) guidance on lifecycle analysis
in developing its lifecycle analysis. We have drawn upon a suite of the most recent and
advanced and peer-reviewed models, studies, and data to develop a methodology for lifecycle
analyses of renewable fuel greenhouse gas emissions. As mandated in EISA, lifecycle GHG
emissions of biofuels was compared to the lifecycle GHG emissions of a 2005 gasoline or diesel
baseline. For both the biofuels and petroleum GHG lifecycle analysis, EPA has developed clear
and consistent system boundaries (both physical and temporal) which are explicitly laid out in
the Final Rulemaking. Further, we assessed uncertainty in the final analysis. EPA provides a
complete description of the lifecycle analysis methodology and provides the data used in the
analysis in the Final Rule Preamble, Regulatory Impact Assessment, and the Docket.
EPA has followed EPA and federal regulatory procedures. In addition, EPA has
extensively coordinated the development of our methodology and selection of inputs and models
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with outside experts and across the federal government. After EISA's enactment in December
2007, we met frequently with the Departments of Agriculture and Energy to share our analytical
plan, request feedback on our key assumptions, and provide preliminary results as they became
available. In many cases, we adopted the models, inputs, and assumptions suggested by these
Departments.
EPA conducted a formal, external, independent peer review for the novel pieces
developed for this lifecycle analysis following EPA and OMB guidance for third party, peer
reviews. The names of the reviewers, charge questions, the original comments received from the
reviewers as well as contractor summaries of the comments were made publically available in
the docket.
Lastly, throughout the development of the lifecycle methodology EPA has worked
closely with the State of California. While each agency's statutory requirements necessitate some
differences (as noted by the commenter) in general, CARB and EPA have developed the same
methodological approach to assessing the lifecycle impacts of biofuels. EPA will continue to
coordinate with CARB as we implement the RFS2 program and reassess the lifecycle estimates.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2119
Organization: National Sorghum Producers
Comment:
The commenter (2119.1) believes that the assumption in the FASOM model that grain sorghum
only produces 2.281 gallons of ethanol per bushel of grain sorghum needs to be changed to
reflect actual use of sorghum in the ethanol industry. (2119.1, p.2)
Our Response:
EPA has clearly acknowledged that there are uncertainties associated with these
estimates-particularly with regard to indirect land use change-and has sought to develop an
approach that manages these uncertainties. However, EPA rejects the view that the modeling
relied upon in the final rule is too uncertain or untested to provide a credible and reasonable
scientific basis for determining whether the aggregate lifecycle emissions exceed the thresholds.
If the international land use impacts were so uncertain that their impact on lifecycle GHG
emissions could not be adequately determined, this does not mean EPA could assume the
international land use change emissions are zero. High uncertainty would not mean that
emissions are small and can be ignored; rather it could mean that we could not tell whether they
are large or small. If high uncertainty meant that EPA were not able to determine that indirect
emissions from international land use change are small enough that the total lifecycle emissions
meet the threshold, then that fuel could not be determined to meet the GHG thresholds of EISA
and the fuel would necessarily have to be excluded from the program. EPA has chosen an
approach that includes biofuels with a significant international land use impact in this program.
We also have chosen an approach that quantifies uncertainty and presents the weight of currently
available evidence in making our threshold determinations
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2119
Organization: National Sorghum Producers
Comment:
The commenter (2119.1) believes that the assumption in the FASOM model that grain sorghum
only produces 2.281 gallons of ethanol per bushel of grain sorghum needs to be changed to
reflect actual use of sorghum in the ethanol industry. (2119.1, p.2)
The commenter also believes that the FASOM assumption of grain sorghum trend yield
only increasing 0.09% per year needs to be updated. Based upon grain sorghum yields since
1988, the trend yield would be 0.8% per year. By increasing the trend yield to 0.8% per year,
GHG reduction would increase by 2.2%. Increasing the trend yield to 1.3% (the commenter's
recommendation) would result in 3.6% more GHG reduction. By setting the ethanol conversion
rate to 2.66 gallons per bushel and increasing the trend yield to 1.3%, grain sorghum's GHG
reduction would be 64.1% for a dry mill facility fueled with natural gas. (2119.1, p.3)
The commenter believes that the assumptions on the input elasticities of grain sorghum
need to be corrected. The current FASOM assumptions for grain sorghum input elasticities are
much higher than compared to corn, the closest other feedgrain in the model. FASOM has the
sorghum input elasticity for both nitrogen and potassium at six times the input elasticity of corn.
This penalizes sorghum due to the GHG emissions from producing nitrogen and potassium
fertilizers. (2119.1, pp.3-4)
The commenter also believes that FASOM assumptions for sweet sorghum to ethanol
yields should be increased to a minimum of 11 gallons per wet ton on first crop sweet sorghum
and 13 gallons per wet ton of rattooned sorghum. (2119.1, p. 4)
The commenter noted that the term "energy sorghum" is now being used for high tonnage
hybrid forage sorghum that can be used in the making of cellulosic biofuel. Energy sorghum was
not included in the proposed rule, but the latest version of FASOM does include energy
sorghum. (2119.1, p.6)
Our Response:
EPA appreciates the provision of data by the commenter and welcomes continued input.
We recognize that a number of possible renewable feedstocks are not evaluated in the current
analysis. EPA anticipates modeling grain sorghum ethanol, woody pulp ethanol, and palm oil
biodiesel after this final rule and including the determinations in a rulemaking within 6 months.
EPA established in the final rulemaking a petition process whereby parties can petition EPA to
evaluate fuel pathways that have not been modeled for this rule.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
1. The commenters (2129.1) recommendation on the modeling of agricultural markets is to
follow the guidance of the peer reviewers. A clear message from the peer review process was
that the basic modeling approach pursued by EPA is appropriate. The commenters recommend
that EPA updates its analysis based on actual data on U.S. and international land-use changes.
(2129.1, p.7) [[See Docket Number 2129.1, pp.7-8 for a detailed discussion on modeling of
agricultural markets]]
2. The commenter said that the peer reviewers supported the use of partial equilibrium models
because they can incorporate greater detail in the agricultural sector than general equilibrium
models. However, it is important the EPA heed peer review concerns about potential
inconsistencies from the dual use of the FAPRI and FASOM models. According to the
commenters, Dr. Wang and Mr. Searchinger pointed to inconsistencies in this approach. Dr.
Banse pointed out that it is logically possible to meld models but only if they are used iteratively.
The commenters recommended that EPA explore the viability of this iterative approach. The
commenters also suggested that adopting FAPRI as a single model would be an appropriate way
to resolve the inconsistencies.
3. The commenters generally agree that the approach used by EPA to model indirect land use
change outside of the U.S. is scientifically and legally appropriate in light of the data and
modeling tools currently available to EPA. (2129.1, pp.8-9) [[See Docket Number 2129.1, pp.8-
9 for a detailed discussion on modeling of international land-use changes]]
Our Response:
1. EPA agrees with the commenters that the language in EISA requires EPA to include
indirect land use impacts. EPA also agrees with the commenters that the expert peer reviewers
provided valuable guidance for international agricultural modeling. We also agree that the
independent peer reviewers generally supported EPA's analytical approach as scientifically
justifiable, however the expert reviewers pointed out problematic areas in our analysis and
suggested many new studies and data sources for consideration. Consistent with the reviewers'
guidance, we maintained our overall modeling approach, but we also took a number of specific
steps to improve our analysis based on the peer reviewers' recommendations.
2. Although we have used the partial equilibrium (PE) models FASOM and FAPRI as
the primary tools for evaluating whether individual biofuels meet the GHG thresholds, as part of
the peer review process, we explicitly requested input on whether the general equilibrium (GE)
models should be used. None of the comments recommended using a GE model as the sole tool
for estimating GHG emissions, given the limited details on the agricultural sector contained in
most GE models. The peer reviewers generally supported the use of the FASOM and FAPRI
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models for our GHG analysis given the level of detail included in the PE models, however
several comments suggested incorporating GE models into the analysis. Given these
recommendations, we opted to use the GTAP model to inform the range of potential GHG
emissions associated with land use change resulting from an increase in biofuels. Our
consideration of the GTAP model is described in preamble Section V.
We also received comments on the combined use of FASOM and FAPRI. Several
comments and peer reviewers questioned the benefit of using two agricultural sector models.
Specifically reviewers pointed to some of the inconsistencies in the FASOM and FAPRI
domestic results. For the final rule analysis we worked to reconcile the two model results. We
apply the same set of scenarios and key input assumptions in both models. For example, both
models were updated to apply consistent treatment of DCs in domestic livestock feed
replacement and consistent assumptions regarding DG export.
Some reviewers questioned the benefits of using FASOM and suggested we rely entirely
on the FAPRI model for the analysis. However, we continue to believe there are benefits to the
use of FASOM. Specifically, the fact that FASOM has domestic land use change interactions
between crop, pasture, and forest integrated into the modeling is an advantage over using the
domestic FAPRI model that only tracks cropland.
3. One of the main comments we received on our choice of models was the issue of
transparency. Several comments were concerned that the results of EPA's modeling efforts can
not be duplicated outside the experts who developed the models and conducted the analysis used
by EPA in the proposal. Upon the release of the proposal, EPA requested comment on the use of
these various models. EPA conducted a number of measures to gather comments, including the
public comment period upon release of the NPRM analysis, holding a public workshop on the
lifecycle methodology, and conducting a peer review of the lifecycle methodology. Specifically,
one of the major tasks of the peer review of EPA's lifecycle GHG methodology was to review
and comment on the use of the various models and their linkages. The response we received
through the peer review is supportive of our use of the FASOM and FAPRI models, affirming
that they are the strong and appropriate tools for the task of estimating land use changes
stemming from agricultural economic impacts due to changes in biofuel policy.
In addition, in an effort to garner as useful comments as possible and to be as transparent
as possible about the modeling process, EPA supplied in the docket technical documents for the
FASOM and FAPRI models, the output received by EPA from each model, and the models
themselves such that the public and commenters could learn and examine how each model
operates.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
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The commenter believes the use of FASOM and FAPRI to model ILUC is appropriate and that
linking the models is also appropriate and allows the analytical strengths of both models to be
utilized. The commenter also supports examination of GTAP as an alternative modeling
platform with global scope. [[Docket number 2130.1, p. 19]]
Our Response:
We appreciate comments provided by ExxonMobil supporting our use of FASOM and
FAPRI to determine indirect land use change. As recommended by ExxonMobil and others, we
have also explored the option of incorporating the GTAP model into our modeling framework,
and have included the results of this analysis in the Chapter 2 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2133
Organization: The Brazilian Vegetable Oil Industry Association (ABIOVE) and the
Brazilian Biodiesel Union (UBRABIO)
Comment:
1. The commenter (2133) believes that the integration of long-term projections based on
deterministic models, which did not consider the peculiarities of the oilseed complexes and the
new agricultural research that will lead to increased productivity, produces results not connected
to the real economy and market projections. [[Docket number 2133.1, p. 25]] [[See docket
number 2133.1, pp. 5-8 for extensive discussion of this issue.]]
The economic incentives are all focused on these objectives. Attributing all the increase in
biodiesel production to soy is to ignore the real economic determinants of oilseed production and
that biodiesel will incentivate raw material diversification and agricultural research. (2133.1, p.8)
2. Brazil grows an average of only one head of beef cattle per hectare of pasture, according to the
results of IBGE's Agriculture-Livestock Census. This number can increase to eight head of
cattle per hectare, using adequate handling and crop-livestock rotation, thus freeing up a gigantic
area for agriculture and not putting pressure on areas of native vegetation. However, even a very
conservative estimate shows the potential for taking advantage of Brazil's pastures. Increasing
the Brazilian average from 1 to 1.4 head per hectare (for the state of Sao Paulo) will make 33
million hectares available for agriculture, equivalent to 70% of Brazil's grain acreage. This is
more than sufficient to meet all Brazil's needs for domestic consumption and exports, especially
in view of the growth potential for agricultural productivity and the possibility of growing two or
even three grain harvests in the same area every year. (2133.1, p.l 1)
The commenter says the model does not consider the national statistics bases for land use,
agriculture, and deforestation, which is another mistake since Brazil is internationally recognized
for its competence in production of information of this nature. [[Docket number 2133.1, p. 25]]
3. The commenter believes that the use of remote sensory techniques creates another uncertainty
due to the low resolution and incorrect date of the images used for analysis of land use changes.
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In addition, the Winrock International model commits a serious mistake in adopting the
hypothesis that only part of the pastures is available for allocation to agriculture. To calculate
forgone sequestration, the model again overestimated emission as it did not consider the initial
hypothesis that deforestation occurs in areas of mature native vegetation. [[Docket number
2133.1, p. 25]] [[See docket number 2133.1, pp. 9-12 for extensive discussion of this issue.]]
Our Response:
1. To estimate lifecycle indirect impacts of biofuel production requires the use of
economic modeling to determine the market impacts of using agricultural commodity feedstocks
for biofuels. The use of economic models and the uncertainty of those models to accurately
predict future agricultural sector scenarios was one of the main comments we received on our
analysis. While the comments and specifically the peer review supported our need to use
economic models to incorporate and measure indirect impacts of biofuel production, they also
highlighted the uncertainty with that modeling approach, especially in projecting out to the
future.
However, it is important to note that while there are many factors that impact the
uncertainty in predicting total land used for crop production, making accurate predictions of
many of these factors are not relevant to our analysis. For example different assumptions about
economic growth rates, weather, and exchange rates will all impact future agricultural
projections including amount of land use for crops. However, we are interested only in the
difference between two biofuel scenarios holding all other changes constant. So the absolute
values and projections for crops and other variables in the model projections are not as important
as the difference the model is projecting due to an increase in biofuels production. This limits
the uncertainty of using the economic models for our analysis.
Furthermore, one of the key uncertainties associated with our agricultural sector
economic modeling that impacts land use change results is the assumptions around crop yields.
In addition to including an assessment of the commodity price impact on international crop
yields, as discussed in preamble Section V.A.2, we conducted sensitivity analysis around
different future yield assumptions for cron and soy in our analysis.
Therefore, because of the fact that we are only using the economic models to determine
the difference between two projected scenarios and the fact that we are conducting sensitivity
analysis around the yield assumptions we feel it is appropriate and acceptable to use economic
models in our analysis of determining GHG thresholds in our final rule analysis.
Our modeling does not attribute all of the biodiesel increase to soybeans. The biodiesel
standard in 2022 is one billion gallons. In our modeling we assume that this biodiesel will be
produced with a variety of feedstocks, with soybeans accounting for approximately 660 million
gallons. Furthermore, the FASOM and FAPRI models which we used do account for the soy
meal co-product. For crops with by-products, behavioral equations for the by-products are
included (e.g., soybean meal, soybean oil and biodiesel from soybeans). For each commodity, a
market-clearing price is achieved by equating quantity supplied to quantity demanded. The
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market linkages imply that changes in one commodity sector will have impacts on the other
sectors.
2. A significant improvement in our modeling was the incorporation of FAPRI's
improved Brazil model, which is based on the high-quality statistics collected by the Brazilian
Government. The Brazil module was developed by Iowa State with input from Brazilian
agricultural sector experts and we believe it is an improvement over the approach used in the
proposal. In the NPRM, we requested additional data for countries outside the U.S. We received
comments encouraging us to use regional and country specific data where it was available. We
also received comments encouraging us to take into account the available supply of abandoned
pastureland in Brazil as a potential source of new crop land. The new Brazil module addresses
these comments. Since the Brazil module contains data specific to six regions, this additional
level of details allows FAPRI to more accurately capture real-world responses to higher
agricultural prices. For example, double cropping (the practice of planting a winter crop of corn
or wheat on existing crop acres) is a common practice in Brazil. Increased double cropping is
feasible in response to higher agricultural prices, which increases total production without
increasing land use conversion. The new Brazil module also explicitly accounts for changes in
pasture acres, therefore accounting for the competition between crop and pasture acres.
Furthermore, the Brazil module explicitly models livestock intensification, the practice of
increasing the number of heads of cattle per acre of land in response to higher commodity prices
or increased demand for land.
In addition to modifying how pasture acres are treated in Brazil, we also improved the
methodology for calculating pasture acreage changes in other countries. We received several
comments through the public comment period and peer reviewers supporting a better analysis of
the interaction between crops, pasture, and livestock. In the NPRM, although we accounted for
GHG emissions from livestock production (e.g., manure management), we did not explicitly
account for GHG emissions from changes in pasture demand. In response to comments received,
our new methodology accounts for changes in pasture area resulting from livestock fluctuations
and therefore captures the link between livestock and land used for grazing. Based on regional
pasture stocking rates (livestock per acre), we now calculate the amount of land used for
livestock grazing. The regional stocking rates were determined with data on livestock
populations from the UN Food and Agricultural Organization (FAO) and data on pasture area
measured with agricultural inventory and satellite-derived land cover data. As a result of this
change, in countries where livestock numbers decrease, less land is needed for pasture.
Therefore, unneeded pasture acres are available for crop land or allowed to revert to their natural
state. In countries where livestock numbers increase, more land is needed for pasture, which can
be added on abandoned cropland or unused grassland, or it can result in deforestation. We
believe this new methodology provides a more realistic assessment of land use changes,
especially in regions where livestock populations are changing significantly.
3. All five of the expert peer reviewers that reviewed our use of satellite imagery agreed
that our general approach was scientifically justifiable. However, all of the peer reviewers
qualified that statement by describing relevant uncertainties and highlighting revisions that
would improve our analysis. Some of the public commenters supported EPA's use of satellite
imagery, while other expressed concern. In general, both sets of public commenters—those in
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favor and opposed—outlined the same criticisms and suggestions as the expert peer reviewers.
Among the many valuable suggestions for satellite data analysis provided in the expert peer
reviews and public comments, several major recommendations emerged: EPA should use the
most recent satellite data set that covers a period of at least 5 years; EPA should use higher
resolution satellite imagery; EPA's analysis should consider a wider range of land categories;
EPA should improve it's analysis of the interaction between cropland, pasture and unused or
underutilized land; and EPA's analysis should include thorough data validation and a full
assessment of uncertainty. In preamble Section V, we describe these and other recommendations
and how we addressed each of them to improve our analysis. Based on the peer reviewers
agreement that our general approach is scientifically justifiable, and in light of the significant
improvements made, we think that our approach represents the best available analysis of the
types of land affected internationally.
In the proposed rule, to estimate annual forgone forest sequestration, we used IPCC
default data for the growth rates of forests greater than 20 years old. The expert peer reviewers
noted that these estimates could be refined with more detailed information from the scientific
literature. Many of the public commenters were also concerned that EPA's approach
overestimated foregone sequestration because it did not adequately account for natural
disturbances, such as fires and disease. To address these comments, our analysis has been
updated with peer reviewed studies of long-term growth rates for both tropical and temperate
forests. These estimates are based on long-term records (i.e., monitoring stations in old-growth
forests for the tropics and multi-decadal inventory comparisons for the temperate regions) and
reflect all losses/gains over time. These studies show that the old-growth forests in the tropics
that many once assumed to be in "steady state" (i.e., carbon gains equal losses) are in fact still
gaining carbon. In summary, our analysis now includes more conservative foregone forest
sequestration estimates that account for natural gains and losses over time.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2136
Organization: Iowa Renewable Fuels Association (IRFS)
Document No.: EPA-HQ-OAR-2005-0161-2320.1
Organization: Informa, for Growth Energy
Comment:
The commenter (2136) states that if the Agency's combination of models was correctly
forecasting the international linkages and impacts of increased biofuels production in the future,
they would also be able to accurately "backcast" the same linkages and impacts. However, the
real world data does not even remotely support this conclusion. [[Docket number 2136.1, p. 3]]
[[See docket number 2136.1, pp. 3-4 for additional discussion of this issue.]]
Informa conducted a "backcast" with the FASOM model and found that historical and current
export estimates from FASOM did not match or come close to actual historical exports. The
soybean oil and meal exports simulated by FASOM for the 2000-2004 period are more than
double the actual levels occurred. This is important because soybean oil is used in biodiesel.
(2320.1, pi,9-11)
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Our Response:
For the evaluation of domestic and international cropland change, the FASOM and
FAPRI models were used, respectively. Both models incorporate elasticities and assumptions
based on historical data trends. However, for the purpose of evaluating a particular renewable
fuel, each feedstock is analyzed by examining the result of only increasing the volume demanded
of that particular renewable fuel, ceteris parabis. Through this method, all changes that occur in
the model are attributable to this change in demand. This evaluation will not reflect historical
data patterns, as there are several varying factors occurring simultaneously in history.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2137
Organization: Brazilian Sugarcane Industry Association (UNICA)
Comment:
The commenter (2137.1) recognizes the complexity of completing the lifecycle analysis and in
general believes that it was carefully done and captured many of the complexities of agriculture,
land use and biofuel production worldwide. At the same time, the commenter also believes that
further refinement is warranted and necessary for the final rule. The commenter identifies the
necessary changes to EPA's "direct" lifecycle calculation (including the need to incorporate the
anticipated changes to the sugarcane ethanol pathway through 2022 as well as to include
emissions credits for the surplus bioelectricity that displaces other more carbon-intensive energy
sources in Brazil) and addresses the "indirect" calculations, with a particular focus on the need to
incorporate a Brazil-specific land use model into EPA's calculations.[[Docket number 2137.1,
pp. 17-18]] [[See docket number 2137.1, pp 18-34 for details of this discussion.]]
Our Response:
For the final rule we have incorporated many of the suggestions for the direct lifecycle
calculations for the sugarcane pathway in our analyses. First, we now account for the expected
phase-out of sugarcane harvest burning in the future. Secondly, we have included an increase in
mechanical harvesting. Thirdly, we have included emissions credits for surplus electricity from
the use of sugarcane trash and efficiency improvements at mills as expected by 2022. In
addition, we support the method of assuming marginal electricity (i.e., natural gas) as the
electricity being displaced when accounting for surplus electricity generated at the sugarcane
ethanol facility.
Several clarifications were also requested by the commenter. First, we have corrected
our assessment to include a scenario where sugarcane straw is assumed to be collected at 40%
(i.e., 56 kg dry leaves and tops per metric ton of cane). Straw is assumed to have a moisture
content of 50% or 140 kg of dry leaves and tops per metric ton of cane. Please refer to Section
2.4.3.5 of the RIA for more detail on sugarcane burning. Secondly, we did not double-count
transport emissions in the United States. The misunderstanding is due to a mislabeling of the
items "Fuel Production" and "Other (fuel and feedstock transport)". "Fuel Production"
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mistakenly included ethanol transport outside the U.S. (for travel from Brazil to U.S.) whereas
"Other (fuel and feedstock transport)" only included the ethanol transport within the U.S. We
have for the final rule corrected this error and aggregated all ethanol transport emissions along
with feedstock transport emissions for better clarification so that the "Fuel Production" category
is correctly represented. Thirdly, we have used the suggestion to assume negligible "haul back"
shipping emissions for ethanol transport from Brazil to the U.S. Lastly, the Agency uses the
Global Warming Potential (GWP) values from IPCC's Second Assessment Report. These GWP
values have been agreed upon in the international framework for addressing climate change and
are used in EPA's Endangerment Finding for greenhouse gases and for the official U.S. GHG
Inventory.
Furthermore, in terms of the indirect impacts, we have included a Brazil component of
our international agricultural sector modeling.
EPA recognizes the importance of accurately modeling the land use change in Brazil.
For the final rulemaking analysis, EPA has worked with FAPRI to incorporate a separate Brazil
module which analyzes Brazil through six geographic regions, providing extensive information
on land used for cropland and livestock production in each region. This is the first non-U.S.
country modeled on a regional basis in the FAPRI model, and includes analysis of other
variables. For example, double cropping (the practice of planting a winter crop of corn or wheat
on existing crop acres) is a common practice in Brazil. Increased double cropping is feasible in
response to higher agricultural prices, which increases total production without increasing land
use conversion. The new Brazil module also explicitly accounts for changes in pasture acres,
therefore accounting for the competition between crop and pasture acres. Furthermore, the
Brazil module explicitly models livestock intensification, the practice of increasing the number
of heads of cattle per acre of land in response to higher commodity prices or increased demand
for land. EPA believes that this will provide a much more detailed and accurate representation
of land use change in Brazil.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) noted that while EPA's analysis is a major attempt at bringing together
multiple inputs and models, the commenter is concerned that several of the individual models
used were not developed with these applications in mind, but rather were intended to capture /
analyze agricultural economic decisions and their impacts. (2146.1, p.4) [[See Docket Number
2146.1, pp.4-5 for a detailed discussion of the commenter's problem with the models]]
Our Response:
While the models we have used to measure lifecycle greenhouse gas emissions may not
have been explicitly developed to capture indirect land use change, both the FASOM and FAPRI
models were designed to analyze the impacts of government policies in the agricultural sector.
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FASOM has been used for over a decade to analyze the impacts of economy-wide greenhouse
gas policies on the agricultural and forestry sector in the U.S. In addition, the FAPRI model has
been used extensively over the last 25 years to analyze the agricultural sector impacts of policies
designed to increase biofuel demand and other agricultural policy questions.
Both the FASOM and FAPRI models are best suited for analyzing the impact of a policy
relative to a predetermined baseline, not for projecting absolute future levels. Because we
recognize this limitation, we have structured our analysis to rely on the change in prices and
quantities as a result of renewable fuel volumes required by the RFS2, which reduces the
sensitivity of the results on any single future level of production, exports, or acreage projections.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2174
Organization: Illinois Soybean Association
Comment:
The commenter (2174) noted that Under the Energy Independence & Security Act (EISA) of
2007, to be eligible for the new RFS2, biodiesel must meet a 50% greenhouse gas (GHG)
reduction relative to petroleum diesel. Under the existing GREET model (Greenhouse gases,
Regulated Emissions, and Energy use in Transportation) used by the EPA and the U.S.
Department of Energy, biodiesel achieves a 78% GHG reduction relative to petroleum diesel.
(2174, p.l)
Our Response:
Under EISA biodiesel must meet a 50% reduction in lifecycle GHG emissions including
significant indirect emissions. The GREET analysis cited does not include indirect emissions.
Therefore, EPA had to do our own analysis including indirect impacts in order to determine if
biodiesel met the threshold requirements of biomass based diesel.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) believes a collaborative effort to develop agreed upon models is needed.
Before the models are incorporated into regulation, all stakeholders must accept the science
behind them. [[Docket number 2233.2, p. 46]]
The commenter discusses issues related to EPA's use of FASOM/FAPRI models plus Winrock
data. The commenter is concerned that EPA methodology lacks transparency in a number of
respects including the lack of data to replicate and verify EPA's results. The commenter also
believes that EPA needs to use complete versions of each model (FAPRI and FASOM) with
appropriate parameters, and EPA needs to calibrate models to a more consistent Reference Case.
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The commenter notes that the FASOM model results in a corn price increase in 2022 of 4.6%
compared to the baseline looks low, especially given some recent historical corn price changes.
[[Docket number 2233.2, pp. 49-51]]
Our Response:
Throughout the rulemaking process, EPA consulted with numerous experts and
stakeholders in industry, academia, and government in regards to all aspects of the analysis. In
addition, EPA hosted a public forum on lifecycle analysis and our methodology, welcoming
participation and discussion with outside stakeholders. This, in combination with the release of
all data used in the analysis; detailed documentation in the form of the draft preamble, RIA, and
technical reports; the availability of models on the docket to the extent possible; and the
publication of a peer review of the lifecycle methodology; EPA believes that the information
provided in the NPRM is consistent with Agency and OMB guidelines on information quality
and provides a comprehensive source of information allowing robust opportunity for public
comment. Following the release of the NPRM analysis, EPA received helpful feedback on
assumptions and methodology used in the analysis as well as support for the use of various
models in the analysis and how they are used together.
For the final rulemaking analysis, EPA worked to ensure that the assumptions used in the
FASOM and FAPRI models are more consistent, and expanded the amount of detail each model
provides. For instance, the FASOM model now incorporates both the forestry and agricultural
sectors of the model, showing the dynamic interaction between the two sectors in terms of land
competition and other factors. Also, the FAPRI model now includes a Brazil module which
analyzes Brazil in terms of six geographical regions, providing extensive information on land
used for cropland and livestock production in each region. EPA believes that these model
improvements provide a more complete, refined, and accurate lifecycle analysis.
In regards to corn prices, the change in the price of corn estimated in the FASOM model
is only the result of an increased demand for renewable fuel. Historical changes in prices that are
subject to a number of varying factors and is not directly comparable to model estimates.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2234
Organization: University of California Energy & Resources Group
Comment:
1. The commenter [[2234]] lists major concerns as: The lack of forestry in FASOM (as run for
the NPRM) prevents any domestic conversion of forests to cropping. FASOM predicts less
domestic land conversion than does the domestic FAPRI model, yet the latter drives the
international LUC estimates, resulting in an underestimate of total land conversion.
2. MODIS underestimates forest and wetland conversion, resulting in low emission factors. (See
detailed comments by Ralph Heimlich.)
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3. The use of a 2022 rather than a near-term baseline, with very high projected crop and
biorefining yields predicted with no sound prediction model reduces the quantity of land required
to replace land used to produce any fixed quantity of biofuels relative to that required in the near
term.
4. Summing emission flows rather than considering radiative forcing fails to properly account for
the early release of COz from LUC (O'Hare, Plevin et al. 2009). We note that several peer
reviewers raised this issue. Displacing soybeans with corn earns a spurious N20 "benefit" in
FASOM. (We have been unable to ascertain the rationale for this benefit.) The GHG benefits of
conversion to no-till cultivation appear to be overstated. [[2234.1 p.3]
Our Response:
1. Following the publication of the NPRM analysis, EPA worked to expand the coverage
of the FASOM model. For the final rulemaking analysis, the FASOM model includes both the
forestry and agricultural sectors. These two sectors dynamically interact with one another in
terms of land competition over time. In addition, the FASOM model now provides a detailed
accounting of various types of land in the U.S., including cropland, pasture, forestland, rangeland
and developed land.
We recognize that FASOM and FAPRI do not provide identical land use change results
as a result of an increase of renewable fuel demand. However, for the purposes of lifecycle
analysis, results from these two models are analyzed on a normalized basis, minimizing
distortionary effects from using two models. It should also be noted that EPA has coordinated
numerous assumptions between the two models, and relies on each model for its relative
analytical strength. For instance, FASOM provides valuable detail for several land types in the
U.S., as well as the incorporation of various greenhouse gas factors. The strength of using the
model is to provide a detailed analysis of international cropland use, as affected by changes in
world trade of commodities (price and quantity) following changes in U.S. demand for
renewable fuel.
Information on the assumptions used in both models, as well as details on the operation
of each model can be found in the Preamble, RIA, and technical reports included in the docket.
2. One benefit of using the MODIS data set is that it is routinely and extensively
validated by NASA's MODIS land validation team. NASA uses several validation techniques
for quality assurance and to develop uncertainty information for its products. NASA's primary
validation technique includes comparing the satellite classifications to data collected through
field and aircraft surveys, and other satellite data sensors. The accuracy of the version 5 MODIS
land cover product was assessed over a significant set of international locations, including
roughly 1,900 sample site clusters covering close to 150 million square kilometers. The results
of these validation efforts are summarized in a "confusion matrix" which compares the satellite's
land classifications with the actual land types observed on the ground. We used this information
to assess the accuracy and systematic biases in the published MODIS data. In general, the
validation process found that MODIS version 5 was quite accurate at distinguishing forest from
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cropland or grassland. However, the satellite was more likely; for example, to confuse savanna
and shrubland because these land types can look quite similar from space.
Using the data validation information from NASA about which types of land MODIS
tends to confuse which each other, our Monte Carlo analysis was able to account for systematic
misclassifications in the MODIS data set. We did not know how these improvements would
affect the final results, but, as the commenters suggested, our updated analysis shows that the
MODIS data used in our proposed rule analysis underestimated the percentage of land converted
from forest in many of the regions analyzed.
The reviewers specifically recommended the addition cropland/natural vegetation
mosaic, permanent wetlands, and barren or sparsely vegetated land, all of which are now
included in our analysis. Consistent with these recommendations, there are 9 aggregate land
categories in our revised analysis: barren, cropland, excluded (e.g., urban, ice, water bodies),
forest, grassland, mixed (i.e., cropland/natural vegetation mosaic), savanna, shrubland and
wetland. These land cover categories capture all significant types of land affected by agricultural
land use changes. As described below in Section V.B.2.b.iii, we also estimated carbon
sequestrations for all of these land categories.
As the commenters' point out, wetlands were not included in the proposed rule analysis.
The expert reviewers specifically recommended the addition cropland/natural vegetation mosaic,
permanent wetlands, and barren or sparsely vegetated land, all of which are now included in our
analysis. Consistent with these recommendations, there are 9 aggregate land categories in our
revised analysis: barren, cropland, excluded (e.g., urban, ice, water bodies), forest, grassland,
mixed (i.e., cropland/natural vegetation mosaic), savanna, shrubland and wetland. We found a
relatively small share of agricultural land converted from wetlands. The region with the largest
share of wetlands converted to cropland was Bangladesh, where 5% of new cropland was
projected to come from wetlands.
3. We project our analysis and economic modeling through the life of the program. We
then consider the impacts of an increase of biofuels on the agricultural sector in 2022 as the basis
for our threshold analysis. This was an area that we received numerous comments on
highlighting that this approach adds uncertainty to our results because we are projecting
uncertain technology and other changes out into the future. One of the recommendations was to
base the lifecycle GHG assessments on a near term time frame and update the analysis every few
years to capture actual technology changes.
We continue to focus our final rule analyses on 2022 results for two main reasons. First,
it would require an extremely complex assessment and administratively difficult implementation
program to track how biofuel production might continuously change from month to month or
year to year. Instead, it seems appropriate that each biofuel be assessed a level of GHG
performance that is constant over the implementation of this rule, allowing fuel providers to
anticipate how these GHG performance assessments should affect their production plans.
Second, it is appropriate to focus on 2022, the final year of ramp up in the required volumes of
renewable fuel as this year. Assessment in this year allows the complete fuel volumes specified
in EISA to be incorporated. This also allows for the complete implementation of technology
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changes and updates that were made to improve or modeling efforts. For example, the inclusion
of price induced yield increases and the efficiency gains of DCs replacement are phased in over
time. Furthermore, these changes are in part driven by the changes in earlier years of increased
biofuel use.
4. EPA accounts for GHG emission impacts based on the GWPs of the emissions
considered. The EISA language specifically states that GHG emissions should be weighted
based on GWPs. The definition of "Lifecycle Greenhouse Gas Emissions" in EISA specifies
that:
" the mass values for all greenhouse gases are adjusted to account for their relative global
warming potential."
Furthermore, peer reviewers generally supported EPA's approach of using GWPs and
highlighted several areas where the Fuel Warming Potential (FWP) approach that considers
radiative forcing could be improved upon before applying it to this type of analysis.
In the proposal analysis for this rulemaking displacing soybeans with corn in FASOM did
generate an NzO benefit because of the assumptions concerning soybean NzO emissions. The
proposal analysis used outdated N20 emission factors for soybeans that overestimated emissions;
therefore, replacing soybeans with corn generated N20 reductions. The N20 emission factors for
soybeans have been updated as part of the final rulemaking analysis.
The GHG emissions associated with conversion to no-till cultivation has also been
updated as part of the final rulemaking analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2245
Organization: Illinois Corn Growers Association, et.al.
Contributors to this comment letter include: Iowa Corn Growers Association, Iowa Soybean
Association, Illinois Soybean Association, Illinois Renewable Fuels Association, Kentucky
Soybean Association, Minnesota Soybean Growers Association, Missouri Corn Growers
Association, Missouri Soybean Association, Monsanto, the National Corn to Ethanol Research
Center, Nebraska Corn Board, Nebraska Soybean Association, Novozymes, Ohio Soybean
Association, South Dakota Soybean Association, University of Illinois Chicago, Energy
Resources Center, University of Illinois Champaign-Urbana plant breeding, animal nutrition and
agronomy, DuPont, Ethanol Technologies, John Deere, and the U.S. Grains Council
Comment:
1. The commenters (2245.1) recommend that a detailed peer review of global corn export
demand be conducted to help improve and validate the FAPRI model results. (2245.1, p.23)
The commenters believe that FAPRI is unable to address changes in international pasture. There
are a number of errors that exist in EPA's attempt to identify changes in international pasture.
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First, the use of MODIS satellite data from 2001 and 2004 to predict future land use change
designations that is not able to identify pasture as a land use category, second, the use of an EPA
add on to the FAPRI model in an unvalidated attempt to predict pasture displacement, third, no
recognition of pasture intensification in Brazil which has been repeatedly highlighted by
Brazilian experts in EPA workshops, and finally, the assumption that any displaced pastureland
is re-established on forest or scrubland. The EPA should defer the recommendations on this
approach to specifically commissioned experts with the appropriate technical expertise to
provide accurate, in country, ground up assessments of land use change. (2245.1, p.26)
2. The commenters also believe that EPA used dated or inadequate data for components of its
proposed rule. This data needs to be made current and kept current. EPA needs to update its
direct GHG determinations for corn based ethanol to reflect current, versus dated, operational
performance data. EPA also needs to update its base GHG values for current, versus historic
fertilizer usage. The baseline data used by GREET also needs to be updated to reflect current
technology adoption and a mechanism needs to be created for annual updates. It is not
appropriate to hold these assumptions constant until 2022. (2245.1, pp.26-27)
3. The commenters would like EPA to provide to the public all inputs and all assumptions, the
source of all inputs and assumptions, a mechanism by which the public can access and run all
modeling scenarios, and scenarios demonstrating model sensitivities. (2245.1, p.28)
Our Response:
1. A significant improvement in our modeling was the incorporation of FAPRI's
improved Brazil model, which is based on the high-quality statistics collected by the Brazilian
Government. The Brazil module was developed by Iowa State with input from Brazilian
agricultural sector experts and we believe it is an improvement over the approach used in the
proposal. In the NPRM, we requested additional data for countries outside the U.S. We received
comments encouraging us to use regional and country specific data where it was available. We
also received comments encouraging us to take into account the available supply of abandoned
pastureland in Brazil as a potential source of new crop land. The new Brazil module addresses
these comments. Since the Brazil module contains data specific to six regions, this additional
level of details allows FAPRI to more accurately capture real-world responses to higher
agricultural prices. For example, double cropping (the practice of planting a winter crop of corn
or wheat on existing crop acres) is a common practice in Brazil. Increased double cropping is
feasible in response to higher agricultural prices, which increases total production without
increasing land use conversion. The new Brazil module also explicitly accounts for changes in
pasture acres, therefore accounting for the competition between crop and pasture acres.
Furthermore, the Brazil module explicitly models livestock intensification, the practice of
increasing the number of heads of cattle per acre of land in response to higher commodity prices
or increased demand for land.
In addition to modifying how pasture acres are treated in Brazil, we also improved the
methodology for calculating pasture acreage changes in other countries. We received several
comments through the public comment period and peer reviewers supporting a better analysis of
the interaction between crops, pasture, and livestock. In the NPRM, although we accounted for
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GHG emissions from livestock production (e.g., manure management), we did not explicitly
account for GHG emissions from changes in pasture demand. In response to comments received,
our new methodology accounts for changes in pasture area resulting from livestock fluctuations
and therefore captures the link between livestock and land used for grazing. Based on regional
pasture stocking rates (livestock per acre), we now calculate the amount of land used for
livestock grazing. The regional stocking rates were determined with data on livestock
populations from the UN Food and Agricultural Organization (FAO) and data on pasture area
measured with agricultural inventory and satellite-derived land cover data. As a result of this
change, in countries where livestock numbers decrease, less land is needed for pasture.
Therefore, unneeded pasture acres are available for crop land or allowed to revert to their natural
state. In countries where livestock numbers increase, more land is needed for pasture, which can
be added on abandoned cropland or unused grassland, or it can result in deforestation. We
believe this new methodology provides a more realistic assessment of land use changes,
especially in regions where livestock populations are changing significantly.
Another important addition to our analysis was consideration of the types of land affected
by changes in pasture area, and the interaction of pasture land with cropland. In the proposed
rule, we made a broad assumption that the total land area used for pasture would stay the same in
each country or region. Thus, in the proposed rule, we assumed that any crop expansion onto
pasture would necessarily require an equal amount of pasture to be replaced on forest or
shrubland. We received a large number of comments questioning these assumptions, and the
expert peer reviewers encouraged us to develop a better representation of the interactions
between cropland and pasture land. The results from the FAPRI model are now used to
determine pasture area changes in each country or region. In regions where we project that
pasture and crop area both increase, the land types affected by pasture expansion are determined
using the same analysis used for crop expansion. This new approach accounts for the ability of
pasture to expand on to previously unused, or underutilized, grasslands and savanna. In regions
where we project that crop and pasture area will change in opposite directions (e.g., crop area
increases and pasture decreases) we assume that crops will expand onto abandoned pasture, and
vice versa. Our analysis also now accounts for carbon sequestration resulting from crop or
pasture abandonment. We used our satellite analysis, which shows the dominant ecosystems and
land cover types in each region, to determine which types of ecosystems would grow back on
abandoned agricultural lands in each region.
We believe that our analysis incorporates the best available data on pasture stocking rates
on a globally consistent basis. However, we recognize that this is an area for further work, and it
is one of the issues that we specifically intend to recommend for study by the National Academy
of Sciences as part of its review of our analysis for this rulemaking.
2. EPA disagrees with this comment. For the proposal, one of the key sources of
information on energy use for corn ethanol production was a study from the University of Illinois
at Chicago Energy Resource Center. Between proposal and final rule, the study was updated,
therefore, we incorporated the results of the updated study in our corn ethanol pathways process
energy use for the final rule. We also updated corn ethanol production energy use for different
technologies in the final rule based on feedback from industry technology providers as part of the
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public comment period. This analysis assumes energy efficiency gain out to 2022 and does not
rely on current energy use data.
Fertilizer use data is based on values in the FASOM model on row crop production which
are based on USDA and State data on production, values vary by management practice and
region. Our agricultural sector modeling includes projections out to 2022 and not relying on
current data for threshold determinations.
3. Accompanying the Preamble and RIA in the release of the Notice of Proposed
Rulemaking (NPRM), EPA provided on the docket the model data used for the analysis, detailed
technical reports of the models used, as well as access to the models to the extent possible. In
addition, EPA hosted a public forum on lifecycle analysis and our methodology, welcoming
participation and discussion with outside stakeholders; published a peer review of the lifecycle
methodology; and consulted with numerous experts and stakeholders in industry, academia, and
government in regards to all aspects of the analysis. Following the release of the NPRM
analysis, EPA received helpful feedback on assumptions and methodology used in the analysis.
For the final rulemaking analysis, EPA provided updated documentation on the
methodology used with updated assumptions. Correspondingly, all data used for the final
analysis, as well as data used for sensitivity analyses, has been provided. Lastly, the models used
for this analysis have been provided to the extent possible on the docket.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
1. The commenter (2249.2) states that while FASOM and FAPRI are well-known, they were not
intended to be used in the manner EPA has proposed. FASOM and FAPRI are economic models
that attempt to assess the impacts of changes in policy and economic parameters on prices and
agricultural commodities. These economic models were not intended to forecast absolute levels
of exports, and the inherent assumptions of the models trend the findings toward overestimating
exports compared to actual data. In addition, these models were not meant to be used to calculate
land use decisions for regulatory purposes. Economic forecasting using models as tools to
identify policy is fundamentally different than assessing emissions for regulatory purposes.
[[Docket number 2249.2, pp. 53-54]] [[Also see docket number 2232.1, Attachments 6 and 7 for
additional information.]]
The commenter adds that EPA and others claim that the FAPRI model is appropriate because it
has been used by numerous government entities to inform agricultural policy decisions, largely
economic policies that may influence agricultural prices, but there are no examples of FAPRI
being used to identify a specific score to be used for regulatory purposes. EPA was required to
make adjustments to both models, which are highly dependent on inputs and assumptions used.
[[Docket number 2249.2, p. 54]
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2. The commenter believes there are also numerous flaws in the models that make their
application to the lifecycle analysis here questionable. (A more detailed analysis of the
weaknesses of these models and EPA's methodology is included as Attachment 7 [[docket
number 2232.1]] (John M. Urbanchuk, Review of Models Used By EPA to Estimate Indirect
Land Use Changes to Renewable Fuel Standard (Sept. 7, 2009) and Attachment 6 [[docket
number 2232.1]] (Nelson Report).) Significantly, the models are limited in analyzing other
market factors. In addition, the commenter states that EPA also fails to provide sufficient
information as to the coordination between the two models. [[Docket number 2249.2, p. 54]]
3. The commenter adds that the mere fact that models were peer reviewed is not sufficient to
ensure the validity of an approach. The commenter refers to OMB and EPA guidance and peer
review reports to support their position, noting a lack of consensus among the peer reviewers.
[[Docket number 2249.2, pp. 61-64]]
Our Response:
1. To estimate lifecycle indirect impacts of biofuel production, as specified in EISA,
requires the use of economic modeling to determine the market impacts of using agricultural
commodity feedstocks for biofuels. The complexity and uncertainty inherent in this work made
it extremely important that we seek the advice and input of a broad group of stakeholders.
EPA's multiple efforts to solicit public and expert feedback are described in preamble Section V.
Based on the all of the feedback received by the agency through the public-comment
process and from the expert peer reviewers we determined that FASOM and FAPRI are the best
available models for this analysis. This determination was based on several factors. For one, the
expert peer reviewers generally agreed that EPA's approach of linking partial equilibrium
models was preferable to using a general equilibrium model, especially given the fact that no
single existing model comprehensively simulates the direct and indirect effects of biofuel
production both domestically and internationally. Support for FASOM and FAPRI was based, in
part, on the level of detail included in the models and the fact that the models were designed to
project physical quantities (as opposed to ex-post conversion of economic units into physical
units). Furthermore, we made a number of improvements to these models to incorporate
new/supplemental data, and to address specific concerns. These improvements, discussed in
preamble Section V, include FAPRI's updated Brazil model, updated DDG displacement rates
incorporated into both models, consideration of price-induced yields in the FAPRI modeling
structure, and improved treatment of international pasture modeling.
Even with all of the improvements made to our analysis, we recognize inherent
uncertainty in the use of economic models to accurately predict future agricultural sector
scenarios. However, it is important to note that while there are many factors that impact the
uncertainty in predicting total land used for crop production, making accurate predictions of
many of these factors are not relevant to our analysis. For example different assumptions about
economic growth rates, weather, and exchange rates will all impact future agricultural
projections including amount of land use for crops. However, we are interested only in the
difference between two biofuel scenarios holding all other changes constant. So the absolute
values and projections for crops and other variables in the model projections are not as important
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as the difference the model is projecting due to an increase in biofuels production. This limits
the uncertainty of using the economic models for our analysis.
As described in the proposal, to estimate lifecycle indirect impacts of biofuel production
requires the use of economic modeling to determine the market impacts of using agricultural
commodity feedstocks for biofuels. The use of economic models and the uncertainty of those
models to accurately predict future agricultural sector scenarios was one of the main comments
we received on our analysis. While the comments and specifically the peer review supported our
need to use economic models to incorporate and measure indirect impacts of biofuel production,
they also highlighted the uncertainty with that modeling approach, especially in projecting out to
the future.
However, it is important to note that while there are many factors that impact the
uncertainty in predicting total land used for crop production, making accurate predictions of
many of these factors are not relevant to our analysis. For example different assumptions about
economic growth rates, weather, and exchange rates will all impact future agricultural
projections including amount of land use for crops. However, we are interested only in the
difference between two biofuel scenarios holding all other changes constant. So the absolute
values and projections for crops and other variables in the model projections are not as important
as the difference the model is projecting due to an increase in biofuels production. This limits
the uncertainty of using the economic models for our analysis.
Furthermore, one of the key uncertainties associated with our agricultural sector
economic modeling that has the biggest impact on land use change results is the assumptions
around crop yields. As discussed in preamble Section V.A.2, we are conducting sensitivity
analysis around different yield assumptions in our analysis.
Therefore, because of the fact that we are only using the economic models to determine
the difference between two projected scenarios and the fact that we are conducting sensitivity
analysis around the yield assumptions we feel it is appropriate and acceptable to use economic
models in our analysis of determining GHG thresholds in our final rule analysis.
2. Several comments and peer reviewers questioned the benefit of using two agricultural
sector models. Specifically reviewers pointed to some of the inconsistencies in the FASOM and
FAPRI domestic results. For the final rule analysis we worked to reconcile the two model
results. We applied the same set of scenarios and key input assumptions in both models. For
example, both models were updated to apply consistent treatment of DCs in domestic livestock
feed replacement and consistent assumptions regarding DG export.
Some reviewers questioned the benefits of using FASOM and suggested we rely entirely
on the FAPRI model for the analysis. However, we continue to believe there are benefits to the
use of FASOM. Specifically, the fact that FASOM has domestic land use change interactions
between crop, pasture, and forest integrated into the modeling is an advantage over using the
domestic FAPRI model that only tracks cropland.
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The RIA provides a detailed look on the coordination between the two models, namely
ensuring that the assumptions used and the scenarios analyzed are the same. Further information
on how these assumptions and scenarios were analyzed in each model can be found in the
technical documentation for each model in the docket.
3. To ensure the Agency made its decisions for this final rule on the best science
available, EPA conducted a formal, independent peer review of key components of the analysis.
The reviews were conducted following the Office of Management and Budget's peer review
guidance that ensures consistent, independent government-wide implementation of peer review,
and according to EPA's longstanding and rigorous peer review policies. In accordance with
these guidelines, EPA used independent, third-party contractors to select highly qualified peer
reviewers. The reviewers selected are leading experts in their respective fields, including
lifecycle assessment, economic modeling, remote sensing imagery, biofuel technologies, soil
science, agricultural economics, and climate science. They were asked to evaluate four key
components of EPA's methodology: (1) land use modeling, specifically the use of satellite data
and EPA's proposed land conversion GHG emission factors; (2) methods to account for the
variable timing of GHG emissions; (3) GHG emissions from foreign crop production (both the
modeling and data used); and (4) how the models EPA relied upon are used together to provide
overall lifecycle estimates.
The advice and information received through this peer review are reflected throughout
this section. EPA's use of higher resolution satellite data is one example of a direct outcome of
the peer review, as is the Agency's decision to retain its reliance upon this data. The reviewers
also provided recommendations that have helped to inform the larger methodological decisions
presented in this final rule. For example, the reviewers in general supported the importance of
assessing indirect land use change and determined that EPA used the best available tools and
approaches for this work. However, the review also recognized that no existing model
comprehensively simulates the direct and indirect effects of biofuel production both domestically
and internationally, and therefore model development is still evolving. The uncertainty
associated with estimating indirect impacts and the difficulty in developing precise results also
were reflected in the comments. In the long term, this peer review will help focus EPA's
ongoing lifecycle analysis work as well as our future interactions with the National Academy of
Science and other experts.
The peer review was one of many efforts by EPA to seek the advice and input of a broad
group of stakeholders. In order to maximize stakeholder outreach opportunities, the comment
period for the proposed rule was extended to 120 days. In addition to this formal comment
period, EPA made multiple efforts to solicit public and expert feedback on our approach.
Beginning early in the NPRM process and continuing throughout the development of this final
rule, EPA held hundreds of meetings with stakeholders, including government, academia,
industry, and non-profit organizations, to gather expert technical input. Our work was also
informed heavily by consultation with other federal agencies. For example, we have relied on
the expert advice of USD A and DOE, as well as incorporating the most recent inputs and models
provided by these Agencies. Dialogue with the State of California and the European Union on
their parallel, on-going efforts in GHG lifecycle analysis also helped inform EPA's
methodology. As described below, formal technical exchanges and an independent, formal peer
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review of the methodology were also significant components of the Agency's outreach. A key
result of our outreach effort has been awareness of new studies and data that have been
incorporated into our final rule analysis.
Altogether, the many and extensive public comments we received to the rule docket, the
numerous meetings, workshops and technical exchanges, and the scientific peer review have all
been instrumental to EPA's ability to advance our analysis between proposal and final and to
develop the methodological and regulatory approach for this rulemaking.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2317
Organization: National Corn Growers Association (NCGA)
Comment:
1. The commenter (2317) urges EPA to make its models available to the public so that they can
evaluate the impact of accurate corn yield projections on the modeled GHG impacts and meet its
commitment to transparency and the requirements of the Information Quality Act. [[Docket
number 2317.1, p. 17]] [[See docket number 2317.1, pp. 17-20 for extensive discussion of this
issue.]]
2. The commenter believes that because the Winrock analysis has been shown to be inaccurate,
any model that relies on it is likely to be inaccurate as well.
3. Given that EPA uses models in combination for its analysis, erroneous inputs to FASOM and
FAPRI based on Winrock modeling multiplies the errors in the results of the analysis. [[Docket
number 2317.1, p. 24]] [[See docket number 2317.1, pp. 24-26 for extensive discussion of this
issue.]]
4. Even if Winrock's analyses were accurate, which the commenter believes is not the case, the
problem with EPA's approach is that it simply does not follow that the social, political and
economic forces that led to particular land use shifts in 2001-2004 would be replicated over the
next 20 to 30 years under the RFS2 program. EPA has provided no support in the docket or
explanation in the Proposed Rule as to why it believes the land use patterns of 2001-2004 are
representative of the land use shifts that will occur in the future. While this may be the only data
that EPA has, that is not a sufficient basis to use it. EPA must show that such land use
conversion patterns are relevant to what will happen as a result of implementation of the RFS2.
It is not surprising that such an analysis is not provided in the proposal because it is highly
unlikely that the same forces that affected land use change in 2001-2004 will be replicated in the
future (23117.1, p.26).
5. In addition, there appears to be another error in the Winrock analysis (making the leap that
earlier social, economic and political forces will be replicated in the future), the failure of
Winrock to estimate the rate of conversion of cropland back to pasture or forest. We know this
occurs as the 1 billion acres of abandoned cropland in the world attests. Winrock should have
provided the net rate of conversion of forest to cropland, if any, rather than assuming that once
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forest was converted to cropland, it would always stay in cropland and would never revert to
forest or pasture, both of which store large amounts of carbon and simultaneously tie up
nitrogen.
Our Response:
1. The FASOM and FAPRI models were used for the economic agricultural analysis.
EPA has provided in the docket a number of materials explaining how the models work and how
they produced the results in the proposal as well as the results provides in the final rule,
including: the release of data from these models that are used in the analysis; detailed
documentation in the form of the preamble, RIA, and technical reports; and making the models
themselves available to the extent possible. This, in combination with EPA's outreach to
stakeholders throughout the analytical process, hosting a public forum on the lifecycle analysis
methodology, and the publication of a peer review of the methodology used, EPA believes that
the information provided in the Notice of Proposed Rulemaking (NPRM) is consistent with
Agency and OMB guidelines on information quality and provides a comprehensive source of
information allowing robust opportunity for public comment.
EPA recognizes that the FAPRI model can not be run by others without obtaining the
services of the CARD staff at Iowa State University. While this makes it harder for commenters
to have the model run for themselves, that does not mean they have not been provided adequate
information and opportunity to comment on EPA's proposal. There are other rulemaking
situations where EPA relies on information in a proposal that is not automatically replicable by
commenters, and this does not mean EPA may not rely on it or that commenters are not provided
an adequate opportunity to comment. For example, in some rulemakings EPA relies on peer
reviewed studies of health effects associated with air pollution, and commenters may or may not
have access to the underlying data in the study, hence may not be able to replicate the study
themselves. However that does not mean EPA may not rely on relevant and credible studies, or
that EPA has not provided an adequate opportunity to comment on the basis for EPA's proposal,
including comment on the pros and cons of that study or other studies or modeling that also shed
light on the same issue. In this case, EPA provided a comprehensive variety of information that
explains in detail the analysis and modeling underlying the proposal and final rule. Commenters
have commented on many of these elements of EPA's work, and have in some cases referred
EPA to other relevant modeling results or studies. EPA has provided all of the information it
could about the basis for its modeling, and commenters have had a full opportunity to comment
on it. Any inability to have the FAPRI model run for the commenter themselves, whether to
replicate EPA's results or run variations on them, does not preclude comemnters from providing
comment on the results of that modeling and all of the underlying information provided by EPA
related to it, and to obtain other information they deem relevant to support their comments.
The FAPRI model is a complex set of models that does not rely on an automated process.
Rather, it requires experts at CARD to run the complete set of FAPRI models. Documentation
on the general structure and operation of the FAPRI models is available on the docket. This
documentation is not intended to be a step-by-step set of instructions. Rather, it is intended to
reveal how the models actually operate in an effort to be as transparent as possible
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For the final rulemaking analysis, EPA will provide updated documentation on the
methodology used with updated assumptions. Correspondingly, all data used for the final
analysis, as well as data used for sensitivity analyses (including from model runs conducted for a
higher corn and soybean yield scenario), will be provided. Lastly, the models used for this
analysis will be provided to the extent possible on the docket.
2. The proposed rule included a detailed description of the FAPRI/Winrock approach
used to determine the type of land affected internationally. This approach uses satellite data
depicting recent land conversion trends in conjunction with economic projections from the
FAPRI model (an economic model of global agricultural markets) to determine the type of land
converted internationally. In the proposed rule we described areas of uncertainty in this
approach, illustrated the uncertainty with sensitivity analyses, and discussed other potential
approaches for this analysis. To encourage expert and stakeholder feedback, EPA specifically
invited comment on this issue, held public hearings and workshops, and sponsored an
independent peer-review, all of which specifically highlighted this part of our analysis for
feedback. While there were a wide range of views expressed in these forums, the feedback
received by the Agency generally supported the FAPRI/Winrock approach as appropriate for this
analysis. For example, all five experts that peer reviewed EPA's use of satellite imagery agreed
that it is scientifically justifiable to use historic remote sensing data in conjunction with
agricultural sector models to evaluate and project land use change emissions associated with
biofuel production. Additionally, the peer reviewers and public commenters highlighted
problematic areas and suggested revisions to improve our analysis. In preamble Section V, we
describe the key revisions that were implemented which have significantly improved our analysis
based on the feedback received.
As discussed above, all five of the expert peer reviewers that reviewed our use of satellite
imagery for this analysis agreed that our general approach was scientifically justifiable.
However, all of the peer reviewers qualified that statement by describing relevant uncertainties
and highlighting revisions that would improve our analysis. Some of the public commenters
supported EPA's use of satellite imagery, while other expressed concern. In general, both sets of
public commenters—those in favor and opposed—outlined the same criticisms and suggestions
as the expert peer reviewers. Among the many valuable suggestions for satellite data analysis
provided in the expert peer reviews and public comments, several major recommendations
emerged: EPA should use the most recent satellite data set that covers a period of at least 5 years;
EPA should use higher resolution satellite imagery; EPA's analysis should consider a wider
range of land categories; EPA should improve it's analysis of the interaction between cropland,
pasture and unused or underutilized land; and EPA's analysis should include thorough data
validation and a full assessment of uncertainty. In preamble Section V, we describe these and
other recommendations and how we addressed each of them to improve our analysis. Based on
the peer reviewers agreement that our general approach is scientifically justifiable, and in light of
the significant improvements made, we think that our approach represents the best available
analysis of the types of land affected internationally.
3. As explained in preamble Section V, none of the satellite data analysis or emissions
factors that EPA developed with Winrock was used as inputs into the FASOM or FAPRI
modeling used in our analysis.
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4. As discussed in preamble section V, our assessment of satellite data uncertainty did
not try to fully quantify the uncertainty of using historical data to make future projections about
the types of land that would be affected internationally. However, we think it is reasonable to
assume that in general, recent land use change patterns will continue in the future absent major
economic or land use regime shifts caused, for example, by changes in government policies.
Thus, our uncertainty assessment provides a reasonable estimate of the variability in land use
change patterns absent any fundamental shifts in the factors that affect land use patterns.
However, our uncertainty assessment does not attempt to fully quantify the probability of major
shifts in land use regimes, such as the implementation of effective international policies to curb
deforestation. Although, the likelihood of these changes was not fully quantified, we conducted
sensitivity analysis illustrating potential scenarios (e.g., if all or none of the land use changes
affected forests) and how they could affect lifecycle GHG emissions from each biofuel.
5. The satellite data is used to determine what types of land would be affected by
agricultural expansion or reversion as projected by the economic models used. The rate of
conversion of croplands to other land types is therefore not relevant in our analysis. However,
the satellite data showing these rates is available on the public docket.
Furthermore, as an improvement in our land use modeling framework, we now capture
the possibility that an indirect effect of biofuel production could be crop or pasture abandonment
in certain regions. For example, in countries where we project that livestock numbers decrease
as a result of biofuel production, less land is needed for pasture. Therefore, unneeded pasture
acres are available for crop land or allowed to revert to their natural state. In countries where
livestock numbers increase, more land is needed for pasture, which can be added on abandoned
cropland or unused grassland, or it can result in deforestation. We believe this new methodology
provides a more realistic assessment of land use changes. Our analysis of the types of land that
would grow back on abandoned agricultural land, and the resulting carbon uptake, is discussed in
more detail RIA Chapter 2.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2353
Organization: Iowa Soybean Association
Comment:
The commenter [[2353]] states that soybeans are raised in a rotation with corn. Since soybeans
fix nitrogen from the air, the nitrogen nodules on their roots help fertilize the next crop, reducing
both fertilizer use and tillage. Nitrogen fertilizer is not used on soybeans. [[#2353 p.2]]
Our Response:
EPA's analysis takes into account the fact that soybeans fix nitrogen. The crop budgets
included in the FASOM model include data on input use that varies by crop, management
practices, and region. There is often considerable variation in the inputs used per acre. Crop
budgets are based on USDA Agricultural Resource Management Survey (ARMS) data and crop
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budgets developed by university extension offices. More information on this can be found in the
FASOM documentation in the Docket.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2360
Organization: Archer Daniels Midland Company (ADM)
Comment:
The commenter (2360.1) believes that EPA should provide a mechanism for site specific fuel
assessment and pathway creation. (2360.1, p.6)
Our Response:
EPA has provided a petition process whereby biofuel producers can request EPA to
evaluate specific technologies or operating processes that distinguish their biofuel production
LCA GHG impacts from those already considered by EPA. These new technologies or operating
processes can then receive an alternative GHG threshold assessment, if appropriate.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter (2383) states that the case law, ISO criteria and EPA protocols establish clear
requirements for predictive models that EPA must apply in order to determine any indirect
impacts of compliance with the RFS2 regulation on GHG emissions. The commenter adds that
the lifecycle emissions analysis presented in the NPRM relies upon an unusually complex chain
of predictive models. EPA's use of such models must comply with the standards of transparency
and reliability established by the Clean Air Act, as well the standards set by EPA and the Office
of Management and Budget. The Agency cannot rely on data or analysis known only to itself
and its contractors. Moreover, the right and need for the public to participate in the rulemaking
process requires that agencies like EPA in this rulemaking follow a simple path. The commenter
is concerned that the current approach being taken by EPA to the complex issue of international
indirect land use change and GHG emissions too often deviates from that path. [[Docket number
2383.1, pp. 34-35]] [[See docket number 2383.1, pp. 34-37 and 2380.1 p. 2 for a detailed
discussion of this issue.]]
The commenter also states that EPA's current analytical methods do not permit it to determine
that conventional biofuels from new facilities in the united states will cause "significant"indirect
GHG emissions increases, adding that there are strong reasons to be skeptical of the type of LCA
analysis on which the NPRM relies to project international land-use change. The commenter
points to the declaration of Bruce E. Dale. [[Docket number 2382.1, p. 37]] [[See docket number
2382.1, pp. 37-40 and docket number 2379.1, declaration of Bruce E. Dale for a detailed
discussion of this issue.]]
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Additionally, the commenter states that EPA is not permitted to rely on models that lack
adequate transparency and that have not been peer reviewed. The inability of the public (and
EPA's peer reviewers) to examine adequately the FAPRI and FASOM models is documented in
a report by Informa Economics for Growth Energy, and has been described in the commenter's
recent letter to EPA. The commenter believes that FASOM fails basic tests for model reliability
and therefore cannot be used in estimating land use change. The commenter also believes that
FAPRI's design is ad hoc and lacks objectivity and consistent boundaries. [[Docket number
2382.1, pp. 40-44]] [[See docket number 2382.1, pp. 40-44 for a detailed discussion of these
issues.]]
The commenter believes that EPA is not relying on the "Best Available Science" for key factors
in its land use change analysis. Also EPA has not procured and published systemic sensitivity
analyses for its economic modeling. The LCA analysis does not apply consistent system
boundaries, contrary to the requirements of the Statute. Based on current documentation, EPA's
analysis does not permit it to allocate property land use and land-cover change among relevant
causes, and does not include important sensitivity analyses. Finally, the commenter states that
portions of EPA's analysis appear to violate a basic law of science. [[Docket number 2382.1, pp.
44-51]] [[See docket number 2382.1, pp. 44-51 and docket number 2379.1, declaration of Bruce
E. Dale for a detailed discussion of these issues.]]
The commenter explains that after considerable effort, experts retained by the commenter were
unable to operate the FAPRI models. This means that they could not replicate the models'
results, conduct sensitivity analyses, or test the credibility of the outputs produced. The
commenter believes that other stakeholders similarly have not been able to operate the FAPRI
models. [[Docket number 1959.1, p. 1]]
Our Response:
As detailed in the preamble and RIA, EPA has used up to date models, data and other
information to assess the GHG impacts of biofuels. Throughout the development of EPA's
lifecycle analysis, the Agency has employed a collaborative, transparent, and science-based
approach. EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. We believe we have in a technically appropriate manner,
implemented the mandates of EISA. As part of this effort we made publically available detailed
descriptions of the models used, data sources and assumptions including a fuel description of the
FAPRI model and its algorithms and provided copies of outputs of the model including
underlying outputs that affected the final results. This level of information is sufficient to
provide adequate notice and opportunity for comment.
The FASOM and FAPRI models were used for the economic agricultural analysis. EPA
has provided in the docket a number of materials explaining how the models work and how they
produced the results in the proposal as well as the results provides in the final rule, including: the
release of data from these models that are used in the analysis; detailed documentation in the
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form of the preamble, RIA, and technical reports; and making the models themselves available to
the extent possible. This, in combination with EPA's outreach to stakeholders throughout the
analytical process, hosting a public forum on the lifecycle analysis methodology, and the
publication of a peer review of the methodology used, EPA believes that the information
provided in the Notice of Proposed Rulemaking (NPRM) is consistent with Agency and OMB
guidelines on information quality and provides a comprehensive source of information allowing
robust opportunity for public comment.
EPA recognizes that the FAPRI model can not be run by others without obtaining the
services of the CARD staff at Iowa State University. While this makes it harder for commenters
to have the model run for themselves, that does not mean they have not been provided adequate
information and opportunity to comment on EPA's proposal. There are other rulemaking
situations where EPA relies on information in a proposal that is not automatically replicable by
commenters, and this does not mean EPA may not rely on it or that commenters are not provided
an adequate opportunity to comment. For example, in some rulemakings EPA relies on peer
reviewed studies of health effects associated with air pollution, and commenters may or may not
have access to the underlying data in the study, hence may not be able to replicate the study
themselves. However that does not mean EPA may not rely on relevant and credible studies, or
that EPA has not provided an adequate opportunity to comment on the basis for EPA's proposal,
including comment on the pros and cons of that study or other studies or modeling that also shed
light on the same issue. In this case, EPA provided a comprehensive variety of information that
explains in detail the analysis and modeling underlying the proposal and final rule. Commenters
have commented on many of these elements of EPA's work, and have in some cases referred
EPA to other relevant modeling results or studies. EPA has provided all of the information it
could about the basis for its modeling, and commenters have had a full opportunity to comment
on it. Any inability to have the FAPRI model run for the commenter themselves, whether to
replicate EPA's results or run variations on them, does not preclude comemnters from providing
comment on the results of that modeling and all of the underlying information provided by EPA
related to it, and to obtain other information they deem relevant to support their comments.
The FAPRI model is a complex set of models that does not rely on an automated process.
Rather, it requires experts at CARD to run the complete set of FAPRI models. Documentation
on the general structure and operation of the FAPRI models is available on the docket. This
documentation is not intended to be a step-by-step set of instructions. Rather, it is intended to
reveal how the models actually operate in an effort to be as transparent as possible.
Although the FAPRI model cannot be operated by any third parties, EPA has provided all
data from FAPRI runs used in the lifecycle analysis, as well as those for sensitivity analyses, on
the docket. In addition, EPA quantified in the uncertainty in our evaluation of GHG emissions
impacts from biofuel-induced land use changes. These uncertainty ranges, and the procedures
used to calculate them, are presented and discussed in preamble Section V and in additional
detail in RIA Chapter 2.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter is also concerned about the method used to translate the FAPRI models into
estimates of how the RFS2 program would affect land use and land cover. EPA has not provided
to the public the specific protocols used in interpreting and applying the satellite data. In
addition, EPA has not explained with any specificity some very important assumptions about the
release of carbon during the predicted land-use changes. [[Docket number 1959.1, pp. 1-2]]
Our Response:
The proposed rule included a detailed description of the FAPRI/Winrock approach used
to determine the type of land affected internationally. This approach uses satellite data depicting
recent land conversion trends in conjunction with economic projections from the FAPRI model
(an economic model of global agricultural markets) to determine the type of land converted
internationally. EPA explained the reasoning for every assumption used our analysis in the
Section VI of the preamble to the proposed rule and in Draft RIA Chapter 2. In the proposed
rule we described areas of uncertainty in this approach, illustrated the uncertainty with sensitivity
analyses, and discussed other potential approaches for this analysis. Furthermore, every single
data input and calculation that EPA used to translate the FAPRI model estimates into land cover
and GHG emissions impacts were made publicly available in memoranda and spreadsheets in the
public docket (see document numbers: 0938, 0945, 0949, and 0891).
To encourage expert and stakeholder feedback, EPA specifically invited comment on this
issue, held public hearings and workshops, and sponsored an independent peer-review, all of
which specifically highlighted this part of our analysis for feedback. While there were a wide
range of views expressed in these forums, the feedback received by the Agency generally
supported the FAPRI/Winrock approach as appropriate for this analysis. For example, all five
experts that peer reviewed EPA's use of satellite imagery agreed that it is scientifically justifiable
to use historic remote sensing data in conjunction with agricultural sector models to evaluate and
project land use change emissions associated with biofuel production. Additionally, the peer
reviewers and public commenters highlighted problematic areas and suggested revisions to
improve our analysis. In preamble Section V, we describe the key revisions that were
implemented which have significantly improved our analysis based on the feedback received.
Based on the peer reviewers agreement that our general approach is scientifically justifiable, and
in light of the significant improvements made, we think that our approach represents the best
available analysis of the types of land affected internationally.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter also expresses concern about the Agency's apparent determination to consider
the results of one or more additional modeling systems in the land-use change analysis in the
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Final Rule. The public cannot comment effectively on these additional modeling approaches
without concrete information. The commenter suggests actions that will make the lifecycle
analyses more transparent. [[Docket number 1959.1, p. 2]] [[See docket number 1959.1, pp. 2-3
for suggested actions.]]
[[Also see Attachment at docket number 1959.1 for explanation of commenter's concerns with
certain aspects of the process by which EPA is developing its biofuels lifecycle analysis.]]
Our Response:
Again, the Agency has been transparent in its use of the different models and how these
models inter-relate. We have also provided in the RIA details of sensitivity analyses conducted
by the Agency as part of the documentation supporting this rule. These include results from
GTAP modeling, an alternative modeling framework which we did not use directly for our
lifecycle GHG assessments but the results of which we believed were informative in assessing
the reliability of the modeling results directly used.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2387
Organization: Ensus Ltd
Comment:
The commenter (2387) expresses concern about the level of transparency of the macro-
economic models. The commenter explains that in order to check the validity of a modeling
approach, or to understand why different models give different results, it is important to know
the justification for the modeling approaches that are adopted, the data fitting processes and data
that have been used to determine parameters, for example elasticities, in the model. In many
cases this is lacking in current ME models. [[Docket number 2387.1, p. 3]] [[See docket number
2387.1, pp. 4-5 for further discussion of this issue.]]
Our Response:
EPA has gone to great and appropriately reasonable lengths to detail the design of models
used, the input parameters, sources of data, outputs of individual analyses and has included
uncertainty assessments and sensitivity analyses about key parameters likely to have the most
significant impacts on results. To the extent possible, these were documented in the public
docket and made available to the public before close of comment. Additionally, we conducted a
public workshop during the comment period in which we explained the models and data sources
used and responded to comments and questions in order to assure full understanding of the
analyses conducted for the proposal and thus to help assure complete and informed comments.
We also held dozens of meetings with industry and others to understand their concerns, explain
our analyses, receive updated information and otherwise benefit from comments. Further we
have conducted a peer review of the models used and data sources and have reflected the results
of those peer reviews in its final rule assessments. For this final rule, we have included detailed
information of the models used and the outputs of individual models including the
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macroeconomic models. We remain cond that we have used the best data and analytical tools
available and have appropriately used these tools and data in constructing the final rule analyses.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) notes that EPA employed a suite of tools and analytical procedures to
model domestic and international agricultural sector impacts. This "synthesizing" of models and
analytical procedures is particularly problematic in that it is an approach that lacks transparency.
[[Docket number 2393.1, p. 45]] [[See docket number 2393.1, pp. 45-47 for further discussion of
this issue.]]
The commenter adds that use of biomass to generate electricity in general provides much larger
GHG benefits than does the conversion of biomass to fuel. Therefore the commenter
recommends that EPA evaluate cellulosic ethanol on an electricity neutral basis in order to
isolate the GHG impact of the biofuel activity from that of electricity generation. The commenter
states that no-till farming should not be tied directly to stover collection. Under many scenarios
corn stover could lead to soil carbon depletion instead of accumulation. [[Docket number 2393.1,
pp. 47-48]]
Regarding the modeling of direct and indirect nitrous oxide emissions from agricultural sources,
the commenter urges EPA to exercise caution in using the DAYCENT model outputs as inputs to
FASOM. Concerns have been raised to the effect that the DAYCENT model reportedly
overestimates NzO emissions by more than a factor of two for some types of corn farming
applications. How has EPA addressed this potential for overestimation in making the
determination to use DAYCENT model output to update the NzO factors in FASOM? If a model
output that is subject to such a large degree of error is used as an input to another model, what
will be the impact on the uncertainty associated with the overall biofuel lifecycle GHG
calculation? The commenter believes that EPA should subject DAYCENT to careful scrutiny so
that its contribution to the lifecycle GHG associated with producing a biofuel can be properly
understood and evaluated.[[Docket number 2393.1, p. 48]]
Our Response:
We have made models and results available in the docket, used the same set of
assumptions in both sets of models, and performed an uncertainty analysis around results.
Regarding the commenter's statements about the use of biomass the generate electricity,
we are evaluating only the RFS2 biofuel policy, not other GHG policies that could impact the
use of biomass for electricity. In terms of the biofuel production we do evaluate cellulosic
biofuel pathways that do not produce excess electricity, for example the thermochemical ethanol
pathway and the F-T diesel pathway.
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No-till is not directly linked to corn stover production. The model does assume that with
no-til practices farmers could remove more stover from the field. Therefore, based on economics
as stover becomes more profitable it is more economical for farmers to switch to no-till practices
in order to remove more stover from the field.
Regarding the commenter's concern about the DAYCENT model, the main difference
between using IPCC factors directly as opposed to relying on DAYCENT modeling is that IPCC
provides default factors by crop by country, while DAYCENT models N20 emissions by crop
but also by region within the US, accounting for different soil types and weather factors. For the
final rule we still rely on the DAYCENT modeling results as we believe them to be more
accurate. For example, the National Greenhouse Gas Inventory as reported annually by the U.S.
to the Framework Convention on Climate Change uses the DAYCENT model to determine N20
emissions from domestic fertilizer use as opposed to using default IPCC factors as the
DAYCENT modeling is recognized to be a more accurate approach.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2425
Organization: Petro Algae
Comment:
The commenter (2425) notes that EPA references the Greenhouse gases, Regulated Emissions,
and Energy use in Transportation (GREET) model. The commenter states that the GREET
model is very limited on feedstock pathways and does not include any pathways associated with
algae or other non-food biomass such as micro-crops. Further analysis of this model and its
applicability to micro-crops needs to be closely evaluated. Without this model, the commenter
asks what will EPA accept to support the LCA. [[Docket number 2425.1, p. 6]]
Our Response:
EPA agrees that the GREET model does not have and algae pathway, therefore for the
final rule analysis EPA conducted our own analysis of algae to biodiesel production. EPA
worked with NREL to develop process information for algae to biofuel production process. This
analysis indicated that algae would qualify as an advanced biofuel.
Furthermore, for the final rule we have set up a petition process where fuel providers can
provide information to EPA if their specific process is not captured by EPA's current analysis or
rulemaking.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2486
Organization: Primafuel, Inc.
Comment:
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The commenter (2486) believes that land-use change is only one of many indirect/market-
mediated effects of the fuels industry. Other market mediated environmental impacts include
water use, urban sprawl, etc. The focus on land-use change as the ONLY indirect/market-
mediated impact considered in EPA's modeling results in an unreasonable focus on biofuels.
While indirect land use changes of petroleum fuels have been considered, other market mediated
impacts have not. EPA must therefore consider analogous market-mediated impacts from
conventional petroleum fuels in the event that biofuels are NOT used. For example, the increased
demand for crude oil would drive crude oil prices up. There are a number of detrimental
environmental consequences caused by higher oil prices, expanded conventional drilling,
expanded tar-sands mining, rising commodity prices, rising food prices. All these rising prices
cause widespread expansion of extractive industries and agriculture, well documented through
the last oil super spike in 2008. To assume that these impacts are negligible is effectively
subsidizing the largest polluters. [[Docket number 2486.1, p. 2]] [[See docket number 2486.1, p.
3 for examples provided for EPA's consideration.]]
Our Response:
The reason the system boundaries used for threshold assessment in the proposed rule did
not include indirect emissions from petroleum production was to be consistent with the goals and
scope of the analysis as defined by the Energy Independence and Security Act (EISA).
The text of EISA specifies that the lifecycle threshold analysis for the different renewable
fuel categories be compared to baseline lifecycle greenhouse gas emissions. EISA defines
baseline lifecycle GHG emissions as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
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products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2497
Organization: Wisconsin Department of Natural Resources
Comment:
The commenter (2497.1) believes that EPA did not analyze other types of renewable
fuels/blendstocks, such as cellulosic diesel or gasoline, biogas, biofuels from e.g., algae, or other
biomass-to-liquids (BTL). The modeling should describe the impacts of the production and/or
use of these renewable fuels on air quality and model the impacts, if deemed appropriate.
(2497.1, p.2)
The commenter also noted that the Midwest currently is and will likely continue to be a
significant production center and user of renewable biofuels. The commenter believes that the
modeling should acknowledge this by focusing sufficient resources to conduct the needed
modeling in this region. The commenter requests that the needed modeling and information
gathering be completed within two years of the rule becoming final (i.e., November 2011). If
EPA does not have the resources to complete the required modeling in a timely manner,
assistance from other credible entities, such as LADCO, should be utilized. (2497.1, p.2)
The commenter also requests that the modeling take into consideration the ongoing, regular
reviews of existing criteria pollutant and toxics rules. The modeling should include an
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evaluation of the broader implications of rule implementation, including the full suite of
renewable fuels, on the standards and objectives of the Clean Air Act and impacts/affects to land
use. (2497.1,p.2)
Our Response:
EPA has updated its analyses for the final rule and has included a number of additional
pathways including cellulosic diesel and algae as recommended by the commenter. We have
modeled all those pathways we expect will be significant contributors of biofuel in the
foreseeable future. We note however that for some of these pathways such as for cellulosic
diesel and biofuels using algae oil as feedstock, the technologies remain under development and
assessment of GHG performance may need to be updated to reflect this ongoing development.
EPA has indicated its plans to continue assessment of biofuels including emerging pathways and
will incorporate these in subsequent rulemakings as soon as practicable.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2500
Organization: Citizen
Comment:
The commenter (2500.1) noted that the use of the FASOM and FAPRI models in the manner
used is not justifiable by any principle of modeling, and "after the fact" jiggling with models to
address the most visible inconsistencies is as much a cause for concern as a sign of progress.
(2500.1, p.2)
Our Response:
As detailed in the preamble and RIA, EPA has used up to date models, data and other
information to assess the GHG impacts of biofuels. Throughout the development of EPA's
lifecycle analysis, the Agency has employed a collaborative, transparent, and science-based
approach. EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. We believe we have in a technically appropriate manner,
implemented the mandates of EISA. The adjustments made to the FASOM and FAPRI models
were intended to provide consistency of assumptions across the models. EPA believes making
these adjustments for consistency is warranted and appropriate.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2500
Organization: Citizen
Comment:
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The commenter noted that one of the greatest opportunities for inconsistency lies in the differing
modeling treatments of switchgrass ethanol. FASOM uses one set of tools that predict one set of
lands will be used to produce cellulosic ethanol, which will in turn generate large reductions in
the amount of cropland devoted to a range of other crops. An increase of slightly more than 2
million acres of switchgrass results in a reduction of roughly 1.8 million acres of other croplands
and hay. There are large reductions in agricultural production emissions in the U.S. However,
FAPRI predicts only around 1.3 million acres of increased agricultural production abroad. The
large differences in the predicted exports highlight the discrepancies and appear to lead to a
significant underestimation of emissions. (2500.1, p.2) (See Docket Number 2500.1, pp.2-3 for a
detailed discussion of this issue)
Our Response:
For the final rule analysis EPA has updated the treatment of switchgrass ethanol in
FASOM and FAPRI. For the final rule EPA took the projected domestic crop acre changes
impacted by increased switchgrass from the FASOM model and applied those acre and crop
impacts to the domestic component of the FAPRI model. We then determine the international
impacts of those domestic changes in the FAPRI model. This is a more consistent approach for
measuring the impacts of switchgrass production. We are also working with FAPRI to get
switchgrass specifically added to the model for future analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2500
Organization: Citizen
Comment:
The commenter also noted that the broad categories of biofuels do not provide a sound basis for
estimating future greenhouse gas emissions because they incorporate large numbers of pure
assumptions. A better approach would derive a simple model from its other model results of key
assumed factors that drive the results and establish categories based on future actual experience.
For example, EPA can estimate the type of land use change likely to rely from the use of land of
particular productivity, which can then be turned into variable emissions per unit based on
switchgrass yields and conversion efficiencies in plants. (2500.1, p.3)
Our Response:
The requirements from EISA do not require EPA to develop specific GHG estimates per
gallon of fuel produced. The thresholds are per categories of fuels so EPA can develop average
GHG emission estimates per pathway for the different categories. EPA will continue to update
our analysis based on future actual analysis. Furthermore, if a fuel producer has a process or
feedstock that is not specifically modeled by EPA they could provide their own information as
part of a petition process to have their fuels analyzed.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2508
Organization: Environmental Working Group (EWG)
Comment:
The commenter (2508) approves of EPA's proposal to move to the Daycent model for nitrous
oxide emissions, however until there is a new approach to estimating indirect emissions that is
better than using the IPCC parameters, the commenter recommends use of those IPCC
parameters. (2508, p.4)
Our Response:
The difference between using IPCC factors directly vs. the DAYCENT model is that
IPCC provides default factors by crop by country, while DAYCENT models N20 emissions by
crop but also by region within the US, accounting for different soil types and weather factors.
For the final rule we still rely on the DAYCENT modeling results for domestic N20 emissions as
we believe them to be more accurate. For example, the National Greenhouse Gas Inventory as
reported annually by the U.S. to the Framework Convention on Climate Change uses the
DAYCENT model to determine N20 emissions from domestic fertilizer use as opposed to using
default IPCC factors as the DAYCENT modeling is recognized to be a more accurate approach.
For international N20 emissions we use IPCC default factors by crop.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2512
Organization: Conservation International
Comment:
The commenter (2512.1) asserts that it is not appropriate to use a weighted average approach for
estimating the type of land is converted to crop land at the national level. The commenter
believes this is an important shortcoming of the current models, and crops should be assessed
regionally, as the agricultural models do for domestic crop production. If the Winrock land type
classes are also assessed uniformly for each country (as it appears they are), this is also a
problem for this assessment. The commenter suggests that, for large countries at a minimum,
sub-national units be used for modeling. (2512.1, pp.5-6)
The commenter believes that where the degree of blending for market-traded commodities is
such that no region of origin can be proscribed, a weighted average should be assigned to regions
which produce the commodity, based on the percentage of national production each represents.
This would allow the assessments to more accurately reflect the impact of biofuel production on
emissions and other factors. (2512.1, p.6)
The commenter noted that while the strongly supports the inclusion of potential impacts of
biofuel development on biodiversity in the models, the commenter did not see biodiversity
referenced elsewhere in RFS2. If EPA is going to include in the analysis, the commenter would
appreciate seeing further details. (2512.1, p.11)
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Our Response:
We agree with the commentor that details on where land conversion takes place at a sub-
national level would be preferable, particularly for large countries. This is one of the reasons we
have include the Brazil module in our FAPRI analysis for the final rulemaking. Since the FAPRI
model now quantifies changes in acreage at a sub-national level in Brazil, we are able to use
Winrock data to classify the type of land that is converted at a sub-national level. While we plan
to continue to add this level of detail to the FAPRI model for other countries over time, we do
not yet have the capability to estimate acreage changes at the sub-national level outside of the
U.S. and Brazil.
We were not able to include an analysis of the biodiversity impacts of the renewable
standard for this rulemaking.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2525
Organization: Embassy of Brazil
Comment:
The commenter (2525) requests that special emphasis be placed on the following issues:
1. The application of deterministic economic models for predicting outcomes from single value
parameters is disputable. Minor parameters variations can generate output discrepancies leading
to enormous margins of error.
2. A proposed biofuels lifecycle analysis must be undertaken in a comparable base of fossil fuels
lifecycle analysis.
3. While Brazil has a large volume of data to inform carbon content calculations, this will not be
the case for several other developing countries. Little accuracy carbon content calculations
model, with an average margin of error between 75 and 90%, represents an additional challenge
to the reliability of aggregating such data to the overall analysis.
4. Cogeneration of electricity from sugarcane bagasse - already acknowledged in the Californian
LCFS - is not currently contemplated on EPA's lifecycle analysis model. [[Docket number 2525,
p.l]]
[[Also see docket number 2525.1, the annex transcript, that contains 5 hours of the discussions
containing assessments and considerations from Brazilian specialists to the lifecycle analysis
model preliminary developed by EPA.]]
Our Response:
1. The peer review, the public comments we have received, and the analysis conducted
for the proposal and updated here for the final rule, indicate that it is important to take into
account indirect emissions when looking at lifecycle emissions from biofuels. It is clear that,
especially when considering commodity feedstocks, including the market interactions of biofuel
demand on feedstock and agricultural markets is a more accurate representation of the impacts of
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an increase in biofuels production on GHG emissions than if these market interactions are not
considered.
However, it is also clear that there are uncertainties associated with these estimates,
particularly with regard to indirect land use change and the use of economic models to project
future market interactions. Reviewers highlighted the uncertainty associated with our lifecycle
GHG analysis and pointed to the inherent uncertainty of the economic modeling.
In the proposal, we asked for comment on whether and how to conduct an uncertainty
analysis to help quantify the magnitude of this uncertainty and its relative impact on the resulting
lifecycle emissions estimates. The results of the peer review, and the feedback we have received
from the comment process, supported the value of conducting such an analysis. Therefore,
working closely with other government agencies as well as incorporating feedback from experts
who commented on the rule, we have quantified the uncertainty associated specifically with the
international indirect land use change emissions associated with increased biofuel production.
Although there is uncertainty in all portions of the lifecycle modeling, we focused our
uncertainty analysis on the factors that are the most uncertain and have the biggest impact on the
results. For example, the energy and GHG emissions used by a natural gas-fired ethanol plant to
produce one gallon of ethanol can be calculated through direct observations, though this will
vary somewhat between individual facilities. The indirect domestic emissions are also fairly
well understood, however these results are sensitive to a number of key assumptions (e.g.,
current and future corn yields). The indirect, international emissions are the component of our
analysis with the highest level of uncertainty. For example, identifying what type of land is
converted internationally and the emissions associated with this land conversion are critical
issues that have a large impact on the GHG emissions estimates.
Therefore, we focused our efforts on the international indirect land use change emissions
and worked to manage the uncertainty around those impacts in three ways: (1) getting the best
information possible and updating our analysis to narrow the uncertainty, (2) performing
sensitivity analysis around key factors to test the impact on the results, and (3) establishing
reasonable ranges of uncertainty and using probability distributions within these ranges in
threshold assessment.
For this final rule we have incorporated a statistical analysis of uncertainty about critical
variables in our pathway analysis. This uncertainty analysis is explained in detail in preamble
Section V and is consistent with the specific recommendations received through our peer review
and public comments on the proposal. The uncertainty analysis focused on two aspects of
indirect land use change - the types of land converted and the GHG emission associated with
different types of land converted. In particular, our uncertainty analysis focused on such specific
sources of information as the satellite imaging used to inform our assessment of land use trends
and the specific changes in carbon storage expected from a change in land use in each
geographic area of the world modeled. We have also performed additional sensitivity analyses
including analysis of two yield scenarios for corn and soy beans to assess the impact of changes
in yield assumptions.
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This uncertainty analysis provides information on both the range of possible outcomes for
the parameters analyzed, an estimate of the degree of confidence that the actual result will be
within a particular range (in our case, we estimated a 95% confidence interval) and an estimate
of the central tendency or midpoint of the GHG performance estimate.
2. The reason the system boundaries used for threshold assessment in the proposed rule
and the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
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Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
3. For the final rule our evaluation of biofuel lifecycle GHG emissions specifically
considered the geographic variability in land cover carbon content data quality and quantity.
For all countries analyzed, we followed the 2006 IPCC Agricultural Forest and Other
Land Use Guidelines (AFOLU) and used the best available data in the scientific literature. In
addition to seeking comment on our analysis in the proposed rule, EPA organized public
hearings and workshops, and an expert peer review specifically eliciting feedback on this part of
the lifecycle analysis. All of the expert peer reviewers generally felt that our analysis followed
IPCC guidelines and was scientifically justifiable; however, they did make several suggestions of
new data sources and recommended areas that could benefit from additional clarification. Based
on the detailed comments we received, we worked with Winrock to make a number of important
revisions, which have significantly improved this part of our analysis. These improvements
include the incorporation of a higher resolution soil map of the world, several new studies on
biomass carbon stocks, and new studies on annual forest carbon uptake by old-growth forests.
All of these improvements are discussed in more detail in preamble Section V.
As discussed in preamble Section V, we conducted a full assessment of the uncertainty in
international land use change emissions factors consistent with 2006 IPCC guidance.1 This
analysis considers the uncertainty in the every parameter used in our emissions factor estimates.
Standard deviations for each parameter were estimated based on the quality and quantity the
underlying data for each. For example, in our analysis the standard errors (as a percent of the
mean) tend to be smallest for forest carbon stocks in Brazil, because a large amount of high
quality/resolution data was considered to estimate that parameter. Standard errors are largest for
parameters that were estimated by scaling other data, or applying IPCC defaults, e.g., savanna
carbon stocks in Yemen.
4. For the proposal we did include cogeneration of electricity from sugarcane bagasse.
However, it was brought to our attention to also consider the use of sugarcane trash to generate
additional electricity credit. For the final rule we have incorporated the use of sugarcane trash
and other anticipated improvements by 2022 into our analyses.
1 2006 IPCC Guidelines for National Greenhouse Gas Inventories, Volume 1: General Guidance and Reporting,
Chapter 3: Uncertainties, available at http://www.ipcc-nggip.iges.or.jp/public/2006gl/voll.html
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2541
Organization: Citizen
Comment:
The commenter (2541) noted that while they support modeling efforts of the type solicited by the
EPA, they do not believe that the particular applications are appropriate. The commenter noted
that these models just are not designed to provide the details needed. Much more country by
country research would be required. (2541, p.l)
Our Response:
We have significantly updated our modeling analyses since the proposal including our
assessments of international impacts which now include more country specific information.. As
explained in both the proposal and the final rule, we believe econometric models such as
FASOM and FAPRI are essential in evaluating the agricultural industry's response to increase
demand for biofuel feedstock. The specific use of these two models is supported by their related
use in other government assessment of agricultural industry response. Their use for biofuel
feedstock assessment is support by peer review and other comments.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161
Organization: Growth Energy
Comment:
[ The following is from Growth Energy's late supplemental comment document-a document
number has not been assignedyet]:
The commenter reviewed comments submitted by ICONE on what ICONE calls the Brazilian
Land Use Change Model (BLUM) (See docket number 1958.1). The commenter does not
believe that the predictive models adapted for use in BLUM are appropriate for use in attempting
to estimate the environmental impacts of compliance the RFS2 regulation.
Our Response:
The Brazil module (an early version of which was used in the ICONE's analysis) was
developed by Iowa State University with input from Brazilian agricultural sector experts and we
believe it is an improvement over the approach used in the proposal. In the NPRM, we requested
additional data for countries outside the U.S. We received comments encouraging us to use
regional and country specific data where it was available. We also received comments
encouraging us to take into account the available supply of abandoned pastureland in Brazil as a
potential source of new crop land. The new Brazil module addresses these comments. Since the
Brazil module contains data specific to six regions, this additional level of details allows FAPRI
to more accurately capture real-world responses to higher agricultural prices. For example,
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double cropping (the practice of planting a winter crop of corn or wheat on existing crop acres) is
a common practice in Brazil. Increased double cropping is feasible in response to higher
agricultural prices, which increases total production without increasing land use conversion. The
new Brazil module also explicitly accounts for changes in pasture acres, therefore accounting for
the competition between crop and pasture acres. Furthermore, the Brazil module explicitly
models livestock intensification, the practice of increasing the number of heads of cattle per acre
of land in response to higher commodity prices or increased demand for land.
ICONE's analysis uses BLUM by itself based on the assumption that sugarcane ethanol
production in Brazil has no effect or interactions with agricultural markets in other countries.
We did not think this was a valid assumption, so instead of modeling Brazil in isolation we
integrated updated Brazil module into FAPRI's global modeling framework. We used this
modeling structure to analyze all of the renewable fuels assessed with FAPRI in this rulemaking.
What Commenters Said:
The commenter is not aware of any means by which the public can fully understand and test
BLUM, and doubts that EPA can do so either, because the necessary documentation is
unpublished.
Our Response:
As was done for the NPRM analysis, EPA will be making available on the docket
documentation of the agriculture sector models used, including FAPRI and the use/integration of
the Brazil Module, in the RIA as well as a detailed technical report authored by CARD staff that
operated the FAPRI model for EPA's analysis. In addition, a "solved" Reference Case version
of the FAPRI model used for EPA's analysis will be available on the docket as well. In
combination, this should provide sufficient information to the public about how the FAPRI
model (with the Brazil Module) was used in EPA's analysis, and how various assumptions are
incorporated into the modeling analysis.
What Commenters Said:
The commenter has been unable to locate any indication that BLUM has experienced the type of
review required by EPA's March 2009 Guidance on the Development, Evaluation and
Application of Environmental Models. This omission is not explained in ICONE's filing. Is it
apparent from other materials placed on the docket by ICONE and affiliated organizations that
ICONE has been at work on BLUM for many months, and could have sought evaluation of
BLUM using the March 2009 protocols. Even if all the necessary documentation were available
to EPA, it would not be consistent with EPA's goals of transparency nor with the Clean Air Act
for EPA to rely on results of a model that has not been made available for full public review and
that has not been fully and publicly evaluated in the manner required by the March 2009
Guidance on modeling.
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Our Response
EPA has followed EPA and federal regulatory procedures. EPA described as part of the
proposal working to build a Brazil specific module in the FAPRI framework. In addition, EPA
has extensively coordinated the development of our methodology and selection of inputs and
models with outside experts and across the federal government. After EISA's enactment in
December 2007, we met frequently with the Departments of Agriculture and Energy to share our
analytical plan, request feedback on our key assumptions, and provide preliminary results as they
became available. In many cases, we adopted the models, inputs, and assumptions suggested by
these Departments. The Brazil module as also part of the discussions of the lifecycle workshop
held during the comment period.
In regards to a review of the FAPRI model, FAPRI (which consists of both the Center for
National Food and Agriculture Policy at the University of Missouri-Columbia, and CARD at
Iowa State University) conducts an annual baseline review and publishes their baseline
projections for the U.S. agricultural sector and international commodity markets. These
published baseline projections are known as FAPRI Outlooks. These baseline projections are
extensively reviewed by several groups prior to publication, including USDA, various
international organizations, other academic institutions, and other industry experts. Comments
and recommendations from these groups are taken into account for the final baseline projection
published in the FAPRI Outlook each year. EPA's analysis of the global agriculture sector is
based on the latest FAPRI baseline available, taking into account assumptions used in the EPA
analysis, as well as the adding to the model's capabilities where appropriate, including the
addition of the regional Brazil Module. All adjustments made to the FAPRI model for EPA's
analysis are thoroughly documented in the RIA and items in the docket mentioned above.
Additional information on the review of the FAPRI model, baseline projection review, and
publications of the FAPRI Outlook can be found on FAPRI's website.
What Commenters Said:
The materials placed in the docket by ICONE do not appear to provide complete references for
important assumptions about area elasticities for various crops, or to explain why those
elasticities are different from those used in the models that EPA used in the proposed rule. There
is also no complete explanation for the inclusion of pasture elasticity in BLUM; such an
elasticity is not found in EPA's version of the FAPRI models.
Our Response:
The Brazil Module of FAPRI was developed by the Center for Agriculture and Rural
Development at Iowa State University, with input from Brazilian agricultural sector experts, and
utilizes data collected by the Brazilian Agriculture Census. The Brazil Module was not
completely developed in time for use in the Proposal's analysis, but was available for use in the
final rulemaking analysis. Technical documentation for the FAPRI model as used in the final
rulemaking analysis provides additional information behind the development of the Brazil
Module and the data sources used.
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What Commenters Said:
BLUM makes unexplained assumptions about land conversion in different area in Brazil. For
example, in the Southeast Region defined by BLUM, all expansion of crop land is assumed to
occur in the Cerrado.
Our Response:
As explained in preamble Section V, we used the results from the global FAPRI model,
which incorporated the new Brazil module, to project the amount of crop and pasture area
changes in each country or region. The new Brazil module explicitly projects crop and pasture
area in 6 distinct regions in Brazil. To determine the types of land affected by these land use
changes, we did not use the same assumptions as ICONE. Instead, we used the FAPRI/Winrock
satellite data analysis explained in preamble Section V. This approach uses satellite data
depicting recent land conversion trends to determine the type of land converted internationally.
As explained in preamble Section V, all of the expert peer reviewers that reviewed EPA's use of
satellite data agreed that in general EPA's approach is scientifically justifiable.
What Commenters Said:
ICONE also has not fully explained why it assumed a higher carbon uptake for sugar cane than
proposed by EPA.
Our Response:
The land conversion emissions estimates used in our analysis consider the carbon stored
in crop biomass. In the proposed rule, we used the IPCC default biomass sequestration factor of
5 metric tons of carbon per hectare for annual crops, and applied this value to all crops globally.
The final rule analysis now distinguishes between annual and perennial crops, with separate
sequestration estimates for sugarcane and oil palm determined from the scientific literature.
Carbon stocks in sugarcane after one year of growth were assumed to be 44 t C02e/ha.
(Carbon stocks for long-lived tree species such as oil palm accumulate carbon more slowly in the
early phases of growth.) The value for sugarcane was derived from estimates of carbon stocks in
sugarcane in aboveground biomass (17 t C ha4 or 62 t COz, Amaral et al. 2008)' and in
belowground biomass (7 t C/ha or 26 t C02/ha, Smith et al. 2005)" for a total of 88 t C02e/ha.
We assumed a growth period of two years to achieve full carbon stocks, therefore the carbon
stock in sugarcane after one year of growth was assumed to be 44 t C02/ha.
What Commenters Said:
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Growth Energy believes that EPA should complete the portion of the RFS2 rulemaking
necessary to implement volumetric requirements for renewable fuels for calendar year 2010, and
to complete work on other portions of the May 2009 regulatory proposal at a later point. If the
Agency adopts that approach, Growth Energy recommends that EPA publish in the Federal
Register a "Notice of Data and Availability" concerning the BLUM model, and any other
additional models that PEA might include in the Notice, and invite public comment. This would
permit ICONE to address the issues presented in this letter and otherwise to supplement their
earlier filing in order to permit effective consideration of its analysis. It would also permit all
interested parties to comment on BLUM and any other materials covered by such as Notice.
Our Response:
EPA believes it has sufficient information on which to base its lifecycle GHG
assessments through 2022 for the fuel pathways included in this final rule. It has thoroughly
documented the sources of data and models used for this final rule
What Commenters Said:
The commenter includes a draft paper, submitted for publication in a peer-review journal, by
scientists at the Oak Ride National Laboratory (ORNL), supported by the U.S. Department of
Energy. The work by the ORNL scientists included the following: (i) an examination of the
basic methodological issues presented by the indirect land use change (ILUC) theory, (ii) an
evalutation of the Global Trade Analysis Project (GTAP) models, and (iii) results of the indirect
emissions impacts estimated using a version of GTAP developed at ORNL.
The commenter states that the ORNL scientists have concluded that the quantitative results of
land use change models "requires more data and more detailed land-use modeling," if it is to be
used to support regulatory action. Their work is obviously important if EPA is considering using
the GTAP modeling framework for purpose of a Final Rule analysis. Their work is also
important in assessing the ILUC by means of any other modeling framework, including the
much-criticized alternatives to GTAP that are discussed in EPA's proposed rule. The ORNL
scientists' paper contains analyses that "apply equally well to non-GTAP simulations of U.S.
biofuels policy."
The commenter also calls attention to a number of "critical flaws" in other GTAP simulations
raised in the ORNL paper. First, the commenter asserts that prior estimates of the impact of an
"ethanol shock" on land use should be attributed to the impacts of oil prices. The paper also
asserts that GTAP's substitution of land types is not reflective of how land is actually substituted
among different uses. The ORNL study concludes that appropriate adjustments are made, the
impacts of increased biofuels use outside the United States "are quite small" (See enclosed
ORNL study for details). Growth Energy therefore recommends that EPA rely on the ORNL
scientists' work, rather than other simulations using less accurate versions of GTAP or the
models discussed in the May 2009 Federal Register, if the Agency is obliged to proceed with
ILUC analysis at this point.
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Our Response:
EPA reviewed the ORNL study and identified three major criticisms of the GTAP model
in the study. EPA also found several criticisms of Searchinger et al. (2008) in the ORNL study.
As discussed below, while the ORNL researchers raise some important issues associated with
modeling, we disagree that these criticisms apply equally well to other simulations (e.g., our
lifecycle analysis for this rulemaking.) Furthermore, we have also identified several
methodological concerns with their modifications to the GTAP model, and therefore disagree
that it is the most appropriate model for measuring indirect land use change at this time.
First, the ORNL study argues that previous GTAP simulations inappropriately shock oil
prices in order to shock ethanol production. The study also argues that Searchinger et al. (2008)
also used this methodology, which ORNL authors argue is invalid. This criticism is not relevant
to EPA's analysis for this rulemaking because we exogenously specified the oil prices and
biofuel volumes in our simulation scenarios with the FASOM and FAPRI models. In other
words, we only shocked the level of biofuel production, and held oil prices constant. In our
GTAP scenarios, we also exogenously required an increase in biofuel volumes between our
reference case and our policy case, therefore the land use changes observed are a direct result of
the change in biofuel volumes. We therefore believe this criticism is not applicable to our
analysis for this rulemaking.
Second, the ORNL study changes the original GTAP elasticities of substitution between
renewable fuels and petroleum products to zero implying that both the fuels are consumed in
fixed proportions and cannot act as substitutes. This assumption does not accurately reflect
transportation fuel markets, since it assumes that consumers cannot choose to substitute
renewable fuels (e.g., E-85) for petroleum products if the relative prices change.
Third, the ORNL study argues that previous GTAP simulations inappropriately excluded
so-called "unmanaged land" from its modeling of land cover changes. This criticism does not
apply to EPA's FAPRI/Winrock modeling, because our modeling framework does not exclude
unmanaged natural ecosystems from the land resource that could be used for agricultural
purposes. As discussed in preamble Section V, we agree that one of the current limitations of the
GTAP model is that it does not allow some of the land that is currently classified as
"unmanaged" (e.g., grassland and savannah) to be transferred into crop or pastureland.
However, the nested model structure made by ORNL to address this issue raises several
important methodological concerns. ORNL equates the percentage change in effective land with
the percentage change in physical land implying that all lands are equally productive. While a
percentage change approach is commonly used in computable general equilibrium (CGE)
modeling due to linearization, we believe it is problematic when determining land use changes,
since the total amount of land is not held constant as a result of policy changes (e.g., total
physical land will not be forced to add up). Furthermore, this approach does not make any
productivity adjustments based on new land that is brought into crop production, which is an
important factor to consider. It is inappropriate to include the physical land hectares directly in a
constant elasticity of transformation (GET) land supply function, as the share weighted percent
change in hectares would not sum to zero. In addition, the ORNL study also adapts the elasticity
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of transformation (ETRAE1) across land covers as -0.1 compared to -0.2 in the EPA studies.
This would result in lower land cover change as reflected in our systematic sensitivity analyses.
Fourth, the ORNL study claims that "the GTAP models exclude more than 300 million
hectares of land in the U.S. (about one third of total U.S. land area) and the ORNL study includes
this area." However, their entire work is based on the data base provided by the GTAP. Our
studies indicate that GTAP data base in fact has 2.14 billion acres of land which is very close the
actual U.S. land area of 2.3 billion acres. This indicates that there is a critical flaw in the way the
ORNL study has utilized the GTAP land use data base.
Fifth, the ORNL study argues that GTAP is a static model so that it cannot properly
model technological improvements, such as increasing crop yields over time. The ORNL study
also argues that Searchinger et al. (2008) did not appropriately account for future crop yield
increases. These criticisms do not apply to EPA's modeling for this rulemaking. We used
dynamic models that account for technological advancements over time. As discussed in
preamble Section V, throughout the rulemaking process EPA made this issue a priority and
employed an open, collaborative and science-based approach to determine the appropriate
technological improvement rates to include in our modeling.
For the reasons cited above, EPA disagrees with the commenter that we should use the
ORNL version of the GTAP model. We believe it is premature to use this version of the model
since it has not yet been published in a peer-reviewed journal, nor has it undergone peer-review
through the Center for Global Trade Analysis at Purdue University, which is the coordinating
center for the GTAP model.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2339
Organization: Illinois Com Growers Association
Comment:
The commenter states that EPA has used a single well-known model, GREET, to determine the
lifecycle emissions for gasoline and diesel as well as the direct GHG emissions for renewable
fuels. In contrast, for indirect emissions from renewable fuels, EPA has pieced together the
output of a number of different models which were developed for entirely different purposes.
While the GREET Model is up-to-date, the ICGA is concerned that the models used to calculate
indirect emissions may contain out-of-date information on matters such as state-of-the-art
ethanol technology and processes, increased crop yields, and other new and evolving agricultural
practices. Further, ICGA is concerned that the assumptions, confidence levels, and inputs for the
models vary in general. [[#2339 p.3]]
Our Response:
EPA disagrees with the comment that the GREET model inputs are more up to date than
the inputs used in our rulemaking analysis. Rather, our analysis takes into account various
expectations for increases in technology throughout the renewable fuel manufacturing process,
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both in the field and in the plants. Accordingly, EPA's analysis of the agriculture sector includes
crop yield projections that increase over time which are consistent with USDA's projections.
EPA also takes into account current and future projected energy and technology improvements at
biofuel production facilities. The lifecycle GHG results for the different biofuels are based on
2022 values which accounts for the agricultural and process technology improvements.
Furthermore, EPA does not use the GREET model for the direct impacts of biofuel production,
accounting for biofuel lifecycle GHG emissions are done with the use of agricultural sector
models.
While the GREET model has been used extensively in the past to determine lifecycle
GHG emissions from transportation fuels, it was not sufficient for the lifecycle modeling
required for this rulemaking. The EISA mandate specifically required the assessment of indirect
impacts of biofuel production, the GREET model does not include indirect impacts and therefore
could not be used for this rulemaking analysis.
What Commenters Said:
Document No.: (EPA-HQ-OAR-2005-0161-3084)
Organization: Renewable Fuels Association
Comment:
We carefully examined the proposed RFS2 rule for any evidence that EPA evaluated FASOM's
predictions of corn and soybean meal production and their sensitivity to the distillers grains feed
replacement assumptions, but found no sensitivity analyses. Therefore, we asked Air
Improvement Resource, Inc. (AIR) to run sensitivity analysis of FASOM results The commenter
ran three scenarios:
1. Default DG: used the DG replacement rates used in EPA's proposed rule analysis
2. RFA DG: scaled-up the DG replacement rates based on research from University of
Minnesota
3. Zero DG: assumed DG does not replace feed at all
There are three findings from this analysis:
1. The model shows that DG use does reduce land devoted to soybeans, and also reduces
soybean production.
2. The model shows that DG use does reduce land devoted to corn, but for some unidentifiable
reason, does not reduce corn production.
3. The model does not reduce corn and soybean acreage in response to increased DG
displacement to the degree our external calculations suggest should reasonably occur. The
reasons for this are not clear.
Since DCs have a significant effect on net land use for corn ethanol, we think these FASOM
modeling issues should be carefully examined by EPA before finalizing the RFS2. While the
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directional effects of increasing DG substitution inside the FASOM model appear correct, the
magnitude of the effects appears grossly understated. The reasons for this should be investigated.
Based on the apparent gross understatement of the land impact of increasing DG substitution, it
appears the FASOM model may possibly be flawed in how it translates changes in DG
substitution rates into acreage impacts.
Our Response:
There are many factors that are impacted in a detailed agricultural sector economic model
like FASOM when a factor is changed. When the efficiency of DCS use is changed this could
have impacts on many other factors like the value (and price) of corn, soybean meal, livestock,
etc. These changes will all have ripple effects on the amounts and types of crops grown.
The commenter bases their finding on "back of the envelope" calculations of the
differences in corn and soybean acreage that they expected a priori between the RFA DG and
Zero DG scenarios. These back of the envelope calculations include no accounting for market
responses, which, as discussed above are essential to understand the impacts of agricultural
technology or policy changes. Furthermore, the "Zero DDG" case is such a radical departure
from the current reality of corn ethanol production that we can not respond to the results of that
simulation without more information. In summary, we do not think that "back of the envelope"
calculations that make no attempt to consider market responses can be used as a basis to validate
the efficacy of complex economic models such as FASOM.
In the proposed rule EPA discussed DCS replacement rates and specifically requested
comment on this input into our modeling. For the final rulemaking analysis, both the FASOM
and FAPRI models have incorporated updated distillers grains replacement rates for corn and
soybean meal in animal feed. These updated assumptions are based on recent research
conducted by Argonne National Laboratory. These assumptions, however, are applied to all
volume scenarios analyzed in the FASOM and FAPRI models for this rulemaking. Therefore, an
increase in demand for renewable fuel under these circumstances still results in land use. Our
modeling is described in more detail in preamble Section V.
7.2.4 Treatment of Uncertainty
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
1. The commenter (0952.1) believes that EPA should provide the results of formal uncertainty
analysis (if such an analysis was conducted) including confidence intervals and probability
distributions. Uncertainty analysis is necessary so that decision makers can reasonably
understand the degree of confidence they can place in the model results. (09582.1, pp.3)
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2. As of September 24, 2009, the commenter is not aware that EPA has neither conducted nor
provided to the public such analyses. The lack of reproducibility of EPAs results (with respect to
FAPRI), and the lack of analysis as to robustness of these results, calls into question whether the
FAPRI or FASOM models rise to the level of scientific validity, utility, objectivity or integrity
that can be reasonably used in this type of rulemaking process. The commenter beleives that it is
inappropriate at this time to use either model to establish point estimates for international indirect
land use change emissions in this rulemaking. (2329.1, 24)
Our Response:
1. The peer review, the public comments we have received, and the analysis conducted
for the proposal and updated here for the final rule, indicate that it is important to take into
account indirect emissions when looking at lifecycle emissions from biofuels. It is clear that,
especially when considering commodity feedstocks, including the market interactions of biofuel
demand on feedstock and agricultural markets is a more accurate representation of the impacts of
an increase in biofuels production on GHG emissions than if these market interactions are not
considered.
However, it is also clear that there are uncertainties associated with these estimates,
particularly with regard to indirect land use change and the use of economic models to project
future market interactions. Reviewers highlighted the uncertainty associated with our lifecycle
GHG analysis and pointed to the inherent uncertainty of the economic modeling.
In the proposal, we asked for comment on whether and how to conduct an uncertainty
analysis to help quantify the magnitude of this uncertainty and its relative impact on the resulting
lifecycle emissions estimates. The results of the peer review, and the feedback we have received
from the comment process, supported the value of conducting such an analysis. Therefore,
working closely with other government agencies as well as incorporating feedback from experts
who commented on the rule, we have quantified the uncertainty associated specifically with the
international indirect land use change emissions associated with increased biofuel production.
Although there is uncertainty in all portions of the lifecycle modeling, we focused our
uncertainty analysis on the factors that are the most uncertain and have the biggest impact on the
results. For example, the energy and GHG emissions used by a natural gas-fired ethanol plant to
produce one gallon of ethanol can be calculated through direct observations, though this will
vary somewhat between individual facilities. The indirect domestic emissions are also fairly
well understood, however these results are sensitive to a number of key assumptions (e.g.,
current and future corn yields). The indirect, international emissions are the component of our
analysis with the highest level of uncertainty. For example, identifying what type of land is
converted internationally and the emissions associated with this land conversion are critical
issues that have a large impact on the GHG emissions estimates.
Therefore, we focused our efforts on the international indirect land use change emissions
and worked to manage the uncertainty around those impacts in three ways: (1) getting the best
information possible and updating our analysis to narrow the uncertainty, (2) performing
sensitivity analysis around key factors to test the impact on the results, and (3) establishing
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reasonable ranges of uncertainty and using probability distributions within these ranges in
threshold assessment.
For this final rule we have incorporated a statistical analysis of uncertainty about critical
variables in our pathway analysis. This uncertainty analysis is explained in detail in preamble
Section V and is consistent with the specific recommendations received through our peer review
and public comments on the proposal. The uncertainty analysis focused on two aspects of
indirect land use change - the types of land converted and the GHG emission associated with
different types of land converted. In particular, our uncertainty analysis focused on such specific
sources of information as the satellite imaging used to inform our assessment of land use trends
and the specific changes in carbon storage expected from a change in land use in each
geographic area of the world modeled. We have also performed additional sensitivity analyses
including analysis of two yield scenarios for corn and soy beans to assess the impact of changes
in yield assumptions.
This uncertainty analysis provides information on both the range of possible outcomes for
the parameters analyzed, an estimate of the degree of confidence that the actual result will be
within a particular range (in our case, we estimated a 95% confidence interval) and an estimate
of the central tendency or midpoint of the GHG performance estimate.
2. The FASOM and FAPRI models contain a number of updates for the final rulemaking
analysis that incorporate several of the items cited by the commenter. Namely, distillers grains
displacement rates of corn and soybean meal in animal feed have been updated based on the
latest research by Argonne National Laboratory in both models. In addition, a sensitivity
analysis of higher projected yields of corn and soybeans was conducted in both the FASOM and
FAPRI models. The FAPRI model also includes a new Brazil module, which analyzes the
country of Brazil on a 6-geographic region basis. The Brazil module includes various data for
cropland, pasture land, and livestock production rates in each region, and allows for livestock
intensification on pasture land in response to competition for other land uses, demand for
livestock production, and other factors. Details on these updates can be found in the RIA and the
technical reports for each respective model. In addition, all data from the FASOM and FAPRI
models from the base analysis and sensitivity runs, as well as the models themselves (to the
extent possible), are available on the docket.
The FASOM and FAPRI models were used for the economic agricultural analysis. EPA
has provided in the docket a number of materials explaining how the models work and how they
produced the results in the proposal as well as the results provides in the final rule, including: the
release of data from these models that are used in the analysis; detailed documentation in the
form of the preamble, RIA, and technical reports; and making the models themselves available to
the extent possible. This, in combination with EPA's outreach to stakeholders throughout the
analytical process, hosting a public forum on the lifecycle analysis methodology, and the
publication of a peer review of the methodology used, EPA believes that the information
provided in the Notice of Proposed Rulemaking (NPRM) is consistent with Agency and OMB
guidelines on information quality and provides a comprehensive source of information allowing
robust opportunity for public comment.
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EPA recognizes that the FAPRI model can not be run by others without obtaining the
services of the CARD staff at Iowa State University. While this makes it harder for commenters
to have the model run for themselves, that does not mean they have not been provided adequate
information and opportunity to comment on EPA's proposal. There are other rulemaking
situations where EPA relies on information in a proposal that is not automatically replicable by
commenters, and this does not mean EPA may not rely on it or that commenters are not provided
an adequate opportunity to comment. For example, in some rulemakings EPA relies on peer
reviewed studies of health effects associated with air pollution, and commenters may or may not
have access to the underlying data in the study, hence may not be able to replicate the study
themselves. However that does not mean EPA may not rely on relevant and credible studies, or
that EPA has not provided an adequate opportunity to comment on the basis for EPA's proposal,
including comment on the pros and cons of that study or other studies or modeling that also shed
light on the same issue. In this case, EPA provided a comprehensive variety of information that
explains in detail the analysis and modeling underlying the proposal and final rule. Commenters
have commented on many of these elements of EPA's work, and have in some cases referred
EPA to other relevant modeling results or studies. EPA has provided all of the information it
could about the basis for its modeling, and commenters have had a full opportunity to comment
on it. Any inability to have the FAPRI model run for the commenter themselves, whether to
replicate EPA's results or run variations on them, does not preclude comemnters from providing
comment on the results of that modeling and all of the underlying information provided by EPA
related to it, and to obtain other information they deem relevant to support their comments.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0981
Organization: Nebraska Center for Energy Sciences Research, Department of Agronomy
and Horticulture, University of Nebraska-Lincoln
Comment:
The commenter (0981) states that the current RFS2 methodology does not accurately represent
the actual GHG emission performance of biofuel producers relative to petroleum producers. The
RFS2 methodology for the LCA of biofuels relies heavily on hypothetical data derived from
complex models. (Pp. 1-4)
The commenter recommends that EPA perform a baseline LCA of the most prevalent biorefinery
types of the corn-ethanol industry as it has operated in 2007-2010, and use these estimates as the
benchmark for refining LCA methodology of other biofuels. The LCA of biofuel producers
should be determined for operational biorefineries and cropping systems based on relevant
statistics, on an annual or biannual basis. The full impact of the RFS2 should be estimated based
on projections from the current status of the industry, where possible. (P. 4)
Our Response:
It is possible to perform an LCA of corn ethanol based on measured and collected data
from biofuel refineries and cropping practices to produce the corn used for the ethanol.
However, this is not an accurate assessment of the full lifecycle impacts as it does not account
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for any indirect impacts. As mandated by EISA EPA needs to account for significant indirect
impacts of biofuel production in the lifecycle assessment. This necessitates the use of economic
modeling as was done for the proposal and final rule assessment.
This being said we do use to most up to date data on biofuel processing and recent data
from crop production practices in the models used in this analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1051
Organization: Aberdeen Development Corp.
Comment:
The commenter (1051) states that the Lifecycle GHG methodology for biodiesel is flawed. The
commenter's primary concern is the uncertainty and speculation associated with EPA's lifecycle
GHG analysis of biofuels, including the methodology relating to significant indirect emissions.
[[Docket number 1051.1, p. 2]]
Our Response:
Throughout the development of EPA's lifecycle analysis, the Agency has employed a
collaborative, transparent, and science-based approach. EPA's lifecycle methodology, as
developed for the RFS2 proposal, required breaking new scientific ground and using analytical
tools in new ways. The work was generally recognized as state of the art and an advance on
lifecycle thinking, specifically regarding the indirect impacts of biofuels.
The Agency also has clearly acknowledged that there are uncertainties associated with
the lifecycle estimates, particularly with regard to indirect land use change and the use of
economic models to project future market interactions. In the proposal, we asked for comment
on whether and how to conduct an uncertainty analysis to help quantify the magnitude of this
uncertainty and its relative impact on the resulting lifecycle emissions estimates. The results of
the peer review, and the feedback we have received from the comment process, supported the
value of conducting such an analysis. Therefore, working closely with other government
agencies as well as incorporating feedback from experts who commented on the rule, the final
rule quantifies the uncertainty associated specifically with the international indirect land use
change emissions associated with increased biofuel production.
EPA focused our uncertainty analysis on international indirect land use change emissions
(the component of our analysis we found to have the highest level of uncertainty). We have
worked to manage the uncertainty around those impacts in three ways: (1) getting the best
information possible and updating our analysis to narrow the uncertainty, (2) performing
sensitivity analysis around key factors to test the impact on the results, and (3) establishing
reasonable ranges of uncertainty and using probability distributions within these ranges in
threshold assessment. The following sections outline how we have incorporated these three
approaches into our analysis.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
With respect to the level of uncertainty associated with the EPA's modeling approach, the
commenters (2129.1) believe that many aspects of the analysis have the effect of lowering the
estimate of ILUC. Aspects of the proposal that have the effect of lowering ILUC estimates
include, but are not limited to: the lack of forestry data in FASOM; the difference in the amounts
of land conversion projected by FASOM and FAPRI; the tendency of MODIS to underestimate
the amount of forest and wetland conversion, and the resulting use of generally low emissions
factors; the use of a future year baseline along with the expected but as of yet unrealized
improvements for the analysis; and the decision to sum emission flows rather than consider
radiative forcing (thus ignoring the residence time of climate-forcing pollutants). The net effect
of these elements may result in an underestimate of the total lifecycle emissions. (2129.1, p.7)
Our Response:
Regarding Uncertainty In Our Analysis:
It is clear that there are uncertainties associated with indirect emissions estimates,
particularly with regard to indirect land use change and the use of economic models to project
future market interactions. Reviewers highlighted the uncertainty associated with our lifecycle
GHG analysis and pointed to the inherent uncertainty of the economic modeling.
In the proposal, we asked for comment on whether and how to conduct an uncertainty
analysis to help quantify the magnitude of this uncertainty and its relative impact on the resulting
lifecycle emissions estimates. The results of the peer review, and the feedback we have received
from the comment process, supported the value of conducting such an analysis. Therefore,
working closely with other government agencies as well as incorporating feedback from experts
who commented on the rule, we have quantified the uncertainty associated specifically with the
international indirect land use change emissions associated with increased biofuel production.
Although there is uncertainty in all portions of the lifecycle modeling, we focused our
uncertainty analysis on the factors that are the most uncertain and have the biggest impact on the
results. For example, the energy and GHG emissions used by a natural gas-fired ethanol plant to
produce one gallon of ethanol can be calculated through direct observations, though this will
vary somewhat between individual facilities. The indirect domestic emissions are also fairly
well understood, however these results are sensitive to a number of key assumptions (e.g.,
current and future corn yields). The indirect, international emissions are the component of our
analysis with the highest level of uncertainty. For example, identifying what type of land is
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converted internationally and the emissions associated with this land conversion are critical
issues that have a large impact on the GHG emissions estimates.
Therefore, we focused our efforts on the international indirect land use change emissions
and worked to manage the uncertainty around those impacts in three ways: (1) getting the best
information possible and updating our analysis to narrow the uncertainty, (2) performing
sensitivity analysis around key factors to test the impact on the results, and (3) establishing
reasonable ranges of uncertainty and using probability distributions within these ranges in
threshold assessment. The following sections outline how we have incorporated these three
approaches into our analysis.
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 will continue to change.
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. As part of this
ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as well as
other experts, and incorporate their advice and any updated information we receive into a new
assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in this
final rule. EPA will request that the National Academy of Sciences over the next two years
evaluate the approach taken in this rule, the underlying science of lifecycle assessment, and in
particular indirect land use change, and make recommendations for subsequent rulemakings on
this subject. This new assessment could result in new determinations of threshold compliance
compared to those included in this rule that would apply to future production (from plants that
are constructed after each subsequent rule).
Regarding the Specific Points Raised By Commenters:
First, in our response we assume that the commenter intended to say that the items listed
would increase (as opposed to lower) the ILUC estimates.
As discussed in preamble Section V, the forest component of FASOM has now been
incorporated into our analysis.
Regarding the combined use of FASOM and FAPRI, several commenters and peer
reviewers questioned the benefit of using two agricultural sector models. Specifically reviewers
pointed to some of the inconsistencies in the FASOM and FAPRI domestic results. For the final
rule analysis we worked to reconcile the two model results. We apply the same set of scenarios
and key input assumptions in both models. For example, both models were updated to apply
consistent treatment of DCs in domestic livestock feed replacement and consistent assumptions
regarding DG export. Some reviewers questioned the benefits of using FASOM and suggested
we rely entirely on the FAPRI model for the analysis. However, we continue to believe there are
benefits to the use of FASOM. Specifically, the fact that FASOM has domestic land use change
interactions between crop, pasture, and forest integrated into the modeling is an advantage over
using the domestic FAPRI model that only tracks cropland. In our judgment these benefits
outweigh any uncertainty added by generating two model results.
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Regarding potential problems in the MODIS satellite data used in our analysis, we used
data validation studies conducted by NASA to evaluate the accuracy of the satellite data and to
correct systematic errors. In general, the validation process found that MODIS version 5 was
quite accurate at distinguishing forest from cropland or grassland. However, the satellite was
more likely; for example, to confuse savanna and shrubland because these land types can look
quite similar from space. We did not know how these improvements would affect the final
results, but, as the commenters suggest, our updated analysis shows that the MODIS data used in
our proposed rule analysis underestimated the percentage of land converted from forest in many
of the regions analyzed. We also conducted a quantitative uncertainty assessment of our use of
satellite imagery. More information about the satellite data validation and uncertainty
assessment is provided above and in preamble Section V.
As the commenters' point out, wetlands were not included in the proposed rule analysis,
but they have been added to the final rule analysis. We found a relatively small share of
agricultural land converted from wetlands. The region with the largest share of wetlands
converted to cropland was Bangladesh, where 5% of new cropland came from wetlands.
As discussed in Section V.A.2, the uncertainty of land use change emissions is an
important consideration in EPA's threshold determinations as part of this rulemaking.
We conducted a full assessment of the uncertainty in international land use change emissions
factors consistent with 2006 IPCC guidance.2 This analysis considers the uncertainty in the
every parameter used in our emissions factor estimates. Standard deviations for each parameter
were estimated based on the quality and quantity the underlying data. Following IPCC guidance,
the uncertainties in individual parameters of an emissions factor were combined using a Tier 2
Monte Carlo simulation approach.
We continue to focus our final rule analyses on 2022 results for two main reasons. First,
it would require an extremely complex assessment and administratively difficult implementation
program to track how biofuel production might continuously change from month to month or
year to year. Instead, it seems appropriate that each biofuel be assessed a level of GHG
performance that is constant over the implementation of this rule, allowing fuel providers to
anticipate how these GHG performance assessments should affect their production plans.
Second, it is appropriate to focus on 2022, the final year of ramp up in the required volumes of
renewable fuel as this year. Assessment in this year allows the complete fuel volumes specified
in EISA to be incorporated. This also allows for the complete implementation of technology
changes and updates that were made to improve or modeling efforts. For example, the inclusion
of price induced yield increases and the efficiency gains of DCs replacement are phased in over
time. Furthermore, these changes are in part driven by the changes in earlier years of increased
biofuel use.
Finally, we evaluated the aggregated quantity of GHG emissions adjusted to account for
their relative global warming potential (GWP). We used the 100-year GWP's developed by the
2 2006 IPCC Guidelines for National Greenhouse Gas Inventories, Volume 1: General Guidance and Reporting,
Chapter 3: Uncertainties, available at http://www.ipcc-nggip.iges.or.jp/public/2006gl/voll.html
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IPCC and listed in their Second Assessment Report. The 100-year GWP's were used for the
biofuels as well as the petroleum baseline.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2136
Organization: Iowa Renewable Fuels Association (IRFS)
Comment:
The commenter (2136) believes that several uncertainty assumptions related to plant efficiencies,
crop yield projections, coproduct credits, and nitrogen emissions from soybean production fed
into the ILUC models that they believe need major adjustment. The commenter urges the
Agency to fully consider other, more in-depth, submissions in this area from national biofuels
associations. [[Docket number 2136.1, p. 5]] [[See docket number 2136.1, pp. 5-8 for a
discussion of each of the assumptions.]]
Our Response:
As part of the final rulemaking EPA has updated our analysis to include new data for
soybean biodiesel production energy use, we have included a sensitivity analysis on higher crop
yields, we have included a co-product credit for the glycerin produced from biodiesel production,
and we have updated the N20 emissions factors for soybean production. These updates were
based in part on all of the data submissions we received.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Comment:
The commenter (2157) notes that EPA did not assume a statistical distribution of uncertainty in
their input data to perform the standard Monte Carlo analysis. EPA instead used point values.
This is contrary to lifecycle analysis principles. EPA justifies the use of a point value by
claiming that they do not know how these data are statistically distributed (normal vs. Poisson,
vs. log normal, etc). This is not an acceptable response. It would be more appropriate for EPA
to determine the effect of assuming various distribution functions through such analyses. (2157
p.55)
Our Response:
For the final rule analysis EPA has performed an uncertainty analysis around the key
components of indirect land use change modeling. These include types of land impacted and the
emission factors from this land conversion. The uncertainty around these factors is based on
actual information on data variation. EPA still believes that it is difficult to include an
uncertainty on all input data for the same reasons stated in the proposal, the lack of data on the
covariance of all factors and information on factor variation.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) states that the uncertainty analysis is lacking throughout the analysis.
EPA claims to have addressed uncertainty in part by conducting sensitivity analyses of with the
FASOM and FAPRI models using 4 different types of feed stocks. However, this is not a real
uncertainty analysis. The commenter recommends that EPA do much more to quantify the
sources of uncertainty in its modeling results. [[Docket number 2233.2, p. 52]]
Our Response:
For the final rule analysis EPA has done more to quantify the uncertainty in our modeling
results. Although there is uncertainty in all portions of the lifecycle modeling, we focused our
uncertainty analysis on the factors that are the most uncertain and have the biggest impact on the
results. For example, the energy and GHG emissions used by a natural gas-fired ethanol plant to
produce one gallon of ethanol can be calculated through direct observations, though this will
vary somewhat between individual facilities. The indirect domestic emissions are also fairly
well understood, however these results are sensitive to a number of key assumptions (e.g.,
current and future corn yields). The indirect, international emissions are the component of our
analysis with the highest level of uncertainty and have particularly significant impact on our
overall assessment results. For example, identifying what type of land is converted
internationally and the emissions associated with this land conversion are critical issues that have
a large impact on the GHG emissions estimates.
Therefore, we focused our efforts on the international indirect land use change emissions
and worked to manage the uncertainty around those impacts in three ways: (1) getting the best
information possible and updating our analysis to narrow the uncertainty, (2) performing
sensitivity analysis around key factors to test the impact on the results, and (3) establishing
reasonable ranges of uncertainty and using probability distributions within these ranges in
threshold assessment.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2234
Organization: Energy & Resources Group University of California
Comment:
The commenter [[2234]] states that two key distinct, though related, uncertainty analyses that
can be performed: 1. Uncertainty importance analysis (global sensitivity analysis) identifies
which parameters are important contributors to the uncertainty in model outputs. This analysis
doesn't require precise distributions since the results are essentially qualitative: a list of the key
factors and their relative contribution to uncertainty. This analysis helps isolate the parameters
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for which more precise probability distributions should be developed. 2. Uncertainty propagation
characterizes the overall uncertainty in model outputs, given the uncertainties in model inputs.
An accurate assessment does require accurate input probability distributions and parameter
correlations, but these are not required to estimate the order of magnitude of the uncertainty in
the result. Moreover, sensitivity analysis can be performed on the key distributions and
parameter correlations identified in the uncertainty importance analysis, to bound the range of
results for the output probability distributions. In its NPRM and DRIA, EPA has failed to
address (i), and has largely punted on (ii), opting instead for a one-at-a-time sensitivity analysis.
[[2234.1 p.10-11]]
Our Response:
For the final rule analysis EPA has performed an uncertainty analysis around the key
components of indirect land use change modeling. These include types of land impacted and the
emission factors from this land conversion. The uncertainty around these factors is based on
actual information on data variation. EPA has also included sensitivity analysis around key
components such as crop yields. EPA still believes that it is difficult to include an uncertainty on
all input data for the same reasons stated in the proposal, the lack of data on the covariance of all
factors and information on factor variation.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2245
Organization: Illinois Corn Growers Association, et al.
Contributors to this comment letter include: Iowa Corn Growers Association, Iowa Soybean
Association, Illinois Soybean Association, Illinois Renewable Fuels Association, Kentucky
Soybean Association, Minnesota Soybean Growers Association, Missouri Corn Growers
Association, Missouri Soybean Association, Monsanto, the National Corn to Ethanol Research
Center, Nebraska Corn Board, Nebraska Soybean Association, Novozymes, Ohio Soybean
Association, South Dakota Soybean Association, University of Illinois Chicago, Energy
Resources Center, University of Illinois Champaign-Urbana plant breeding, animal nutrition and
agronomy, DuPont, Ethanol Technologies, John Deere, and the U.S. Grains Council
Comment:
The commenters (2245.1) believe that EPA needs to include error propagation such that we can
all understand the accuracy of their land use prediction and thus the accuracy associated with
their GHG predictions for various fuel types. It is not clear from the analysis the EPA has
presented on RFS2 how accurately existing econometric models are able to predict land usage.
Model validation is an important facet to ensure RFS2 regulations are made based upon accurate
predictions. The commenters believe that there is a need to reduce the errors associated with land
use calculations by improving and validating input assumptions, particularly crop yield
projections. There is also a need to validate the sensitivity of the land use change models to
changes in macroeconomic assumptions. (2245.1, p.21)
The commenters believe that EPA should run sensitivity analyses for key input variables The
commenters noted that it is readily assumed, but has not been proven that errors in
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macroeconomic and policy forecasting between the reference and control cancel themselves out.
EPA should validate this assumption by running the following scenarios:
- A case where crop yields increase globally - due to changes in technology and / or attributable
to yield responses to higher demand.
-A case where the key macroeconomic policy variables, including factors such as energy price,
value of the dollar in relation to other currencies and in particular to the real, population growth
and GDP growth. (2245.1, p.22)
Our Response:
Throughout the rulemaking process, EPA consulted with numerous experts and
stakeholders in industry, academia, and government in regards to all aspects of the analysis.
Based on feedback received through this consultation process, but also through the publicly
available peer review of EPA's lifecycle methodology, EPA has received support for the use of
economic agricultural models (FASOM and FAPRI) to estimate changes in cropland worldwide
based on changes in demand for renewable fuel.
We recognize that deterministic models (i.e., FASOM and FAPRI) do not reflect the
range of potential values for key parameters. For this final rulemaking, we have incorporated
uncertainty analysis where possible in order to help bracket the potential margin of error around
key variables. For example, we have conducted an uncertainty analysis around the classification
errors that may arise from the interpretation of satellite data and around the parameters used in
the emission factor estimates.
For the final rulemaking analysis, a sensitivity analysis of higher projected yields of corn
and soybeans was conducted in both the FASOM and FAPRI models. Data from the base
analysis, as well as for the sensitivity analysis, runs can be found on the docket. A discussion of
these results is included in the RIA and the technical reports written for each model on the
docket.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP)
Comment:
The commenter (2384) supports the need for periodic assessment of the LCA methodology and
the acknowledged high level of uncertainty warrants an initial review as early as 3 years.
[[docket number 2384.1, p. 6]]
Our Response:
EPA recognizes that the state of scientific knowledge continues to evolve in this area and
is committing to further reassess these determinations and lifecycle estimates. As part of this
ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as well as
other experts, and incorporate their advice and any updated information we receive into a new
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assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in this
final rule. EPA will request that the National Academy of Sciences over the next two years
evaluate the approach taken in this rule, the underlying science of lifecycle assessment, and in
particular indirect land use change, and make recommendations for subsequent rulemakings on
this subject. This new assessment could result in new determinations of threshold compliance
compared to those included in this rule that would apply to future production (from plants that
are constructed after each subsequent rule).
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2387
Organization: Ensus Ltd
Comment:
Regarding the validation of models used, the commenter (2387) states that for predictions to be
trusted, the ME models need to be validated, by demonstrating that their predictions of past
perturbations in crop land areas, trade flows etc satisfactorily match those observed. It is not
clear whether the ME models have been validated in this way. Docket number 2387.1, p. 4]]
[[See docket number 2387.1, pp. 12-13 for further discussion of this issue.]]
Our Response:
While the comments and specifically the peer review supported our need to use economic
models to incorporate and measure indirect impacts of biofuel production they also highlighted
the uncertainty with that modeling approach, especially in projecting out to the future.
However, it is important to note that while many factors impact the certainty in predicting
total land used for crop production, making accurate predictions of many of these factors are not
relevant to our analysis. For example different assumptions about economic growth rates,
weather, and exchange rates will all impact future agricultural projections including amount of
land use for crops. However, we are interested only in the difference between two biofuel
scenarios holding all other changes constant. So the absolute values and projections for crops,
etc. in the model projections are not as important as the difference the model is projecting due to
an increase in biofuels production. This limits the uncertainty of using the economic models for
our analysis.
The main factors impacting the economic modeling and land use results due to biofuels
are overall crop / commodity demand and yields (and the responsiveness of these parameters to
price changes). To examine the impact of changes in yield on the overall biofuel lifecycle GHG
results, we have made two main changes in the economic modeling used for the proposal. In
order to update our analysis and reduce uncertainty we have included a price induced yield
impact, as discussed in the RIA Chapter 5. Furthermore we also include a sensitivity analysis of
a high yield scenario to test the impact of higher yields on the results, as discussed in the RIA
Section 2.6.2.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
1. The commenter (2393) notes that EPA does not consider the impact of multiple, simultaneous
parameter perturbations in its approach to evaluate the uncertainty in biofuels LCA assessments.
Rather, EPA uses a one-at-a-time (OAT) analysis, which fails to account for the many
interactions between model parameters in non-linear models. [[Docket number 2393.1, p. 49]]
The commenter believes EPA should perform two key distinct, though related, uncertainty
analyses on each of the individual model components of its LCA modeling system: 1)
uncertainty importance analysis, and 2) Uncertainty propagation. [[Docket number 2393.1, p.
50]]
Our Response:
1. Through technical outreach, the peer review process, and the public comment period,
EPA received and reviewed a significant amount of data, studies, and information on our
proposed lifecycle analysis approach. Through this process we were able to identify the factors
that have the largest impact on lifecycle GHG emissions estimates. Crop yields, the length of the
time period for analysis, and the types of land affected by agricultural expansion were identified
as being among the most important factors in our analysis.
For this final rule we have incorporated a statistical analysis of uncertainty about critical
variables in our pathway analysis. This uncertainty analysis is explained in detail in preamble
Section V and is consistent with the specific recommendations received through our peer review
and public comments on the proposal. The uncertainty analysis focused on two aspects of
indirect land use change - the types of land converted and the GHG emission associated with
different types of land converted. In particular, our uncertainty analysis focused on such specific
sources of information as the satellite imaging used to inform our assessment of land use trends
and the specific changes in carbon storage expected from a change in land use in each
geographic area of the world modeled. These sources of uncertainty were quantified with Monte
Carlo following IPCC Tier 2 guidelines for propagation of errors.
We have also performed additional sensitivity analyses including analysis of two yield
scenarios for corn and soy beans to assess the impact of changes in yield assumptions.
This uncertainty analysis provides information on both the range of possible outcomes for
the parameters analyzed, an estimate of the degree of confidence that the actual result will be
within a particular range (in our case, we estimated a 95% confidence interval) and an estimate
of the central tendency or midpoint of the GHG performance estimate.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment:
The commenter (2408) suggests that EPA utilize flexible ranges so as to afford the opportunity
for newer technologies to demonstrate and comply with the greenhouse gas ("GHG") reduction
requirements under the rule. (2408.1, pp.1-2)
Our Response:
For the final rule, EPA has adopted a petition process whereby biofuel producers can
request EPA review of new process technologies. Additionally, EPA has indicated its intention
to periodically update its analyses to reflect new data and information including the development
of new technologies. We believe this should address the commenter's concerns.
7.2.5 Components of the Lifecycle GHG Emissions Analysis
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1036
Organization: Vision FL I, LLC
Comment:
The commenter (1036.1) proposes the addition of Sweet Sorghum Ethanol to Section II.A.3 of
the Preamble. Sweet sorghum much like switchgrass can be grown on marginal lands that do not
compete with domestic or international commodity crop production as food or feed crops. More
importantly, it can be grown year round as a true "energy crop" in areas of central and southern
Florida. The processing of sweet sorghum into ethanol utilizes the exact same techniques that
have been in practice for the last thirty five years in Brazil. This gives the sweet sorghum model
a solid advantage over cellulosic ethanol because the processing of the ethanol has been
commercially pushed through the learning curve due to the experience of Brazilian operations.
This is a crop with the potential to create roughly 2 billion gallons of advanced biofuel, and has
lifecycle GHG emission reductions far greater than 60% compared to the 2005 petroleum
baseline. (1036.1, p.3)
The three charts (1036.1, pp.4-6) have been created by combining the GHG modeling
information from documents EPA-HQ-OAR-2005-0161-0938.3, and 0938.6, modified to best
represent a domestic sweet sorghum ethanol facility using standard technologies and standard
yields. These charts are just recaps showing the expected GHG lifecycle reductions for a sweet
sorghum ethanol project and the detailed documents can be found in Attachments 1036.3,
1036.4, and 1036.5. (1036.1, p.3)
Our Response:
For the final rule, EPA determined it did not have sufficient information on which to
base a lifecycle GHG assessment for sweet sorghum. However, EPA has adopted a petition
process whereby biofuel producers can request EPA review of new process technologies and
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feedstock sources. Additionally, EPA has indicated its intention to periodically update its
analyses to reflect new data and information including the development of new technologies and
feedstock sources. We anticipate that as emerging pathways approach commercialization,
sufficient information can be made available to allow EPA to conduct an appropriate LCA.
While the data available today may be insufficient to allow LCA, such data for sweet sorghum
should be able to be developed and thus this pathway included through these mechanisms.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2112
Organization: Biomass Rules, LLC
Comment:
The commenter (2112.1) noted that Bruce Dale, Professor, Chemical Engineering, Michigan
State University, and pioneer in LCA analyses was concerned with many of the choices made in
the RFS2 analyses. Some of his concerns are:
- High profile guessing is still guessing (referring to the Searchinger, et. al and Crutzen, et. al.
papers).
- Lifecycle Analyses (LCA) must follow certain rules to be effective. The following rules were
not followed:
- Use the most recent/most accurate data possible.
- Select the reference system: what exactly are we comparing?
- Make it easy for others to check your data and methods' transparency
- Set clear system boundaries (physical & temporal) must be equal or comparable for
reference system and/or reference product of interest
- Multi-product systems must allocate environmental costs among all products
- Perform sensitivity analysis: how much do results vary if assumptions or data change?
(2112.1, pp.7-8)
Our Response:
EPA has used International Standards Organization (ISO) guidance on lifecycle analysis
in developing its lifecycle analysis. We have drawn upon a suite of the most recent and
advanced and peer-reviewed models, studies, and data to develop a methodology for lifecycle
analyses of renewable fuel greenhouse gas emissions. As mandated in EISA, lifecycle GHG
emissions of biofuels was compared to the lifecycle GHG emissions of a 2005 gasoline or diesel
baseline. For both the biofuels and petroleum GHG lifecycle analysis, EPA has developed clear
and consistent system boundaries (both physical and temporal) which are explicitly laid out in
the Final Rulemaking. Further, we assessed uncertainty in the final analysis and have performed
sensitivity analyses. EPA provides a complete description of the lifecycle analysis methodology
and provides the data used in the analysis in the Final Rule Preamble, Regulatory Impact
Assessment, and the Docket.
EPA has followed EPA and federal regulatory procedures. In addition, EPA has
extensively coordinated the development of our methodology and selection of inputs and models
with outside experts and across the federal government. After EISA's enactment in December
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2007, we met frequently with the Departments of Agriculture and Energy to share our analytical
plan, request feedback on our key assumptions, and provide preliminary results as they became
available. In many cases, we adopted the models, inputs, and assumptions suggested by these
Departments.
Lastly, EPA conducted a formal, external, independent peer review for the novel pieces
developed for this lifecycle analysis following EPA and OMB guidance for third party, peer
reviews. The names of the reviewers, charge questions, the original comments received from the
reviewers as well as contractor summaries of the comments were made publically available in
the docket.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2138
Organization: American Meat Institute, National Chicken Council, National Turkey
Federation, Farm Econ LLC
Comment:
The commenter [[2138]] EPA makes a projection in the proposed rule by stating that the U.S.
population is expected to be 318 million in 2017 and 330 million in 20229. This projection runs
completely counter to the latest estimates from the Census Bureau, published in 2008, which
project the 2017 resident population to be 331.8 million, rising to 347.8 million in 2022. Why
EPA deviated so significantly from the Census Bureaus projections is not explained. [[2138 p.4]]
Our Response:
For the final rulemaking analysis, projection estimates have been updated with the latest
population projections figures for 2017 and 2022 from the Census Bureau. These are the same
estimates cited by the commenter, published in August, 2008, and based on the 2000 Census.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2302
Organization: UC Berkeley - Energy Biosciences Institute
Comment:
The commenter [[2302]] supports EPA's proposal for the creation of an interactive, web-based
mapping tool utilizing reported and satellite data for land determination. [[#2302 p.4]]
Our Response:
EPA did not create a web-based mapping tool as part of the analysis for this rulemaking.
However, we have made our analysis as user-friendly as possible by making all of the data,
inputs and documentation publicly available, and by holding numerous events and meetings to
explain our analysis in detail to experts, stakeholders and the public. We will continue to
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consider the value of creating a web-based mapping tool as part of ongoing updates to our
lifecycle analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2361
Organization: Indonesian Palm Oil Commission
Comment:
The commenter (2361) suggests to not factor the effects of ILUC due to the reliability of the
models used. However, if ILUC must be included, and the life cycle analysis results for soy
biodiesel be extended to biodiesel from all vegetable oils including palm oil in the absence of
any available specific analysis at the moment. This would mean that biodiesel from palm oil will
be deemed to meet the 20% threshold for renewable fuel as for soy biodiesel. Also, renewable
fuel pathway table should not be limited to ethanol from corn and/or corn starch, sugarcane and
biodiesel from soy but also include biodiesel from other vegetable oils as shown in Table VI. E.
4.1 in when such data are available. (2361.1.pdf, p.2)
Our Response:
EPA recognizes that it has had to break new scientific ground in developing a lifecycle
methodology as required by EISA. This is why the Agency employed a collaborative,
transparent and science-based approach. EPA took numerous measures to seek public comment
on our approach—including extending the comment period for the proposed rule, holding a two-
day public workshop on the lifecycle methodology, and reaching out to dozens of stakeholders,
including the biodiesel community, through individual meetings, conferences and events. EPA
also initiated an independent peer review of specific areas of our work.
Further, EPA recognizes the state of scientific knowledge continues to evolve in this area.
While the Agency is using its current lifecycle assessments to inform the regulatory
determinations for fuel pathways in this final rule, the Agency is also committing to further
reassess these determinations. As part of this ongoing effort, we will ask for the expert advice of
the National Academy of Sciences as well as other experts. EPA will request that the National
Academy of Sciences over the next two years evaluate the approach taken in this rule, the
underlying science of lifecycle assessment, and in particular indirect land use change, and make
recommendations for subsequent rulemakings on this subject.
EPA has extended its analyses to apply to additional pathways for which the necessary
information was available. We did not extend our analysis of soy-based biodiesel to also cover
biodiesel from palm oil as we had no information to support this as technically appropriate.
However, we did include in the final rule a petition process whereby a producer of biofuel not
cover by the final rule can provide necessary information to EPA to allow the Agency to conduct
an appropriate LCA and determine compliance with GHG thresholds. Additionally, EPA
indicated that as a matter of its ongoing assessment, it would work to expand coverage to other
biofuels which it determined were likely to be used in the U.S. and for which sufficient
information were available to allow a LCA GHG analysis. Such new assessments will be
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periodically reflected in regulatory updates to this rule. Section V.C of the Preamble describes
the details of the petition process.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2466
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Comment:
The commenter (2466) supports EPA working closely with California regarding the development
of transportation fuels lifecycle GHG impacts and encourage future cooperation. Consistency of
the RFS2 program with the California LCFS program will assist the Northeast in their efforts to
develop a regional LCFS program. (2466.1.pdf, p.9)
Additional comments are from the State of New Jersey to the commenter: The commenter (2466)
suggests that instead of using a single time horizon, it would be more accurate to estimate the
project time horizon differently from the impact time horizon. The commenter (2466) agrees
that the land use impacts would persist for a longer time period, such as 100 years. The
commenter (2466) also agrees with the assumption of a gradual phase-out of corn starch ethanol
production between 2022 and 2045. (2466.1.pdf, p.9)
Our Response:
We appreciate commenter's support for our ongoing work with the State of California in
examining the impacts of renewable fuels.
In the proposed rule, EPA highlighted two time periods of 30 years and 100 years for
consideration in GHG lifecycle analysis. The Agency discussed the relative advantages of these,
and other, time periods. The expert peer reviewers discussed a number of justifiable time periods
ranging from 13 to 100 years. The reviewers said that longer time frames, such as 100 years,
were only appropriate if the Agency used positive discount rates to value future emissions.
Almost all of the peer reviewers specifically said that a time frame of 20 to 30 years would be
justifiable based on the average life of a biofuel production facility. The reviewers and the
public commenters provided several arguments for the application of a 30 year time frame. A 30
year time period is appropriate because future emissions are less certain and more difficult to
value, so the analysis should be confined insofar as possible to the foreseeable future. Another
argument is that a near-term time horizon is consistent with the latest climate science that
indicates that swift and deep reductions of heat-trapping gasses are needed to avoid catastrophic
changes due to a warming climate. One of the reviewers said that while "there is no unassailable
basis for choosing a very specific timeframe" the expected average lifetime of a biofuel
production facility is the "most sensible anchor" for the choice of a timeframe. Alternatively, a
number of commenters argued that a 100-year time frame is the appropriate time period for GHG
lifecycle emissions analysis principally since this is the time period over which climate change
impacts are likely to occur.
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Based upon the comments received from the peer review and public between after the
RFS2 proposal, EPA has decided to use a 30 year frame for assessing the lifecycle GHG
emissions. There are several reasons why the 30 year time frame was chosen. The use of the life
of a typical biofuel plant seems reasonable as a basis for the timeframe for assessing the GHG
emissions impacts of a renewable fuel. Also, the 30 year time frame focuses on GHG emissions
impacts that are more near term and, hence, more certain.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2514
Organization: Western Organization of Resource Councils
Comment:
The commenter [[2514]] continues to support lifecycle accounting for greenhouse gases from all
fuels, including renewable fuels and the development of transparent and credible methods to
calculate the carbon costs of indirect land use changes due to biofuel.
The commenter states that the modeling should fully and accurately account for the energy value
of animal feed byproducts of renewable fuels, and that the rule may have the unintended effect of
undermining advanced biofuels with more beneficial ecological footprints.
The commenter states that for example, small micro-processed biodiesel that uses oilseed crops
grown in rotation with small grains in the Northern Great Plains, that utilizes expeller-pressed
meal to supplement primarily grassfed livestock, and that uses both the fuel and the feed on site
or locally, offers significant benefits in the lifecycle carbon footprint.
Also commenter states that very small processors must incur prohibitively exorbitant expense to
establish that already certified CAA-compliant fuels do comply with the Clean Air Act, when
periodic tests verifying the fuel meets an ASTM standard should suffice. [[See docket # 2514
p.l]]
Our Response:
We have not specifically modeled biodiesel from oilseed crops grown in rotation with
small grains in the Northwest Great Plains. However, we do have provisions in our rulemaking
to account for feedstocks and processes not specifically modeled. While we have not been able
to model all possible feedstocks that can and are being used for renewable fuel production, there
are a variety of feedstocks that should have similar enough characteristics to those already
modeled to allow them to be grouped in with already modeled fuel pathways. This list includes
secondary annual crops planted on existing crop land such as winter cover crops and providing
cellulosic material, starch or oil for biofuel production.
Furthermore, EPA is establishing a process whereby a biofuel producer can petition the
Agency to also consider their unique production or feedstock pathway if it is different from those
specifically listed in the current regulations.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2612
Organization: Citizen (sample comment letter representing 478 comment letters from
mass comment campaign sponsored by American Soybean Association)
Comment:
The commenter (2612) identified 8 "vital flaws and concerns with the RFS2 proposed rule,"
including: "3) Nitrogen - The EPA methodology contains a major error pertaining to the direct
emission calculations for nitrogen in soybean production." (2612 p. 2)
Our Response:
See response to Comment EPA-HQ-OAR-2005-0161-2612 in Section 7.2.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2625
Organization: Citizen (sample comment representing 400 comment letters from mass
comment campaign sponsored by an anonymous organization)
Comment:
The commenter (2625) notes that, "EPA's GHG emissions methodology contains a major error
regarding direct emission calculations for nitrogen. The 2006 Guidelines for National
Greenhouse Gas Inventories by the Intergovernmental Panel on Climate Change (IPCC)
concludes that nitrogen fixed in soil by soybeans should not be considered a GHG emission.
EPA, however, does not incorporate the IPCC's updated nitrogen findings and thus attributes
excess nitrogen emissions to soybean cultivation. This error reduces the GHG score for soy
biodiesel by more than 20 percent." (2615 p. 2)
Our Response:
The proposal analysis calculated NzO emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in NzO emissions. The proposal
analysis NzO factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating NzO emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
The NzO emission factors used in the proposal overestimated NzO emissions from
nitrogen fixing crops, because they were based on the 1996 IPCC guidance for NzO accounting.
As an update in 2006, IPCC guidance was changed such that biological nitrogen fixation was
removed as a direct source of NzO because of the lack of evidence of significant emissions
arising from the fixation process itself. IPCC concluded that the NzO emissions induced by the
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growth of legume crops/forages may be estimated solely as a function of the above-ground and
below-ground nitrogen inputs from crop/forage residue. This change effectively reduces the
N20 emissions from nitrogen fixing crops like soybeans and nitrogen fixing hay from the 1996
to 2006 IPCC guidance.
Therefore, as part of the update to new N20 emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the N20
emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
7.2.5.1 Feedstock Production (Domestic & International Ag Sector Impacts)
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0981
Organization: Nebraska Center for Energy Sciences Research, Department of Agronomy
and Horticulture, University of Nebraska-Lincoln
Comment:
The commenter (0981) strongly supports the use of IPCC emission factors for N20 emissions
because they are the most consistent with direct field scale measurements. In addition the
commenter states that there is no evidence to suggest that use of greater complexity and input
data requirements of the DAYCENT model improves the estimation of N20 emissions from
cropping systems compared to use of IPCC default parameters. The commenter recommends
that emission of N20 from cropping systems be based on IPCC emission factors, such as in
FASOM, GREET, and BESS, until it can be clearly documented that ecosystem models such as
DAYCENT provide more accurate estimates. (P. 9)
Our Response:
The main difference between using IPCC factors directly as opposed to relying on
DAYCENT modeling is that IPCC provides default factors by crop by country, while
DAYCENT models N20 emissions by crop but also by region within the U.S., accounting for
different soil types and weather factors. For the final rule we still rely on the DAYCENT
modeling results as we believe them to be more accurate. For example, the National Greenhouse
Gas Inventory as reported annually by the U.S. to the Framework Convention on Climate
Change uses the DAYCENT model to determine N20 emissions from domestic fertilizer use as
opposed to using default IPCC factors as the DAYCENT modeling is recognized to be a more
accurate approach.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1001, EPA-HQ-OAR-2005-0161-1005, EPA-
HQ-OAR-2005-0161-1010, EPA-HQ-OAR-2005-0161-1011, EPA-HQ-OAR-2005-0161-1012,
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EPA-HQ-OAR-2005-0161-1025, EPA-HQ-OAR-2005-0161-1029, EPA-HQ-OAR-2005-0161-
1043, EPA-HQ-OAR-2005-0161-1049, etal.
Organization: Kurzman Clean Tech Research & Kurzman Capital, LLC, Cotner
Consulting Services, CC Gas Systems, LLC, Atlantic BioFuels, Glenwood Farms, Law Offices
of David Wilcox, C.I.B., University of Georgia Engineering Outreach Service, Prairie Pride,
Inc., etal.
Comment:
The commenters believe that EPA's assumptions regarding international land use changes
associated with U.S. biodiesel production do not reflect the real world. EPA assumes increased
U.S. biodiesel production will lead to land conversion in South America. If this assumption were
correct, Brazilian soybean acreage would have increased from 2004 through 2008, a time in
which U.S. biodiesel production increased from 25 million to 690 million gallons. During this
time, however, Brazilian soybean acres actually decreased by 1.5 million hectares.
The commenters noted that this shows the inaccuracy of EPA's hypothesis and modeling. EPA's
analysis does not consider global market drivers for biodiesel feedstock, such as soybeans, that
have substantial influence on U.S. exports and land use changes in other countries.
Document No.: EPA-HQ-OAR-2005-0161-2010, EPA-HQ-OAR-2005-0161-2011, EPA-
HQ-OAR-2005-0161-2013, etal.
Organization: SoyMor Biodiesel, LLC, Western Dubuque Biodiesel LLC, Central Iowa
Energy, LLC, et al.
Comment:
EPA concludes with certainty that international land use change will occur and GHG emissions
will result due to a direct relationship between shifts in the agricultural market as a consequence
of the increased demand for biofuels in the U.S. However, EPA dismisses actual data on land
usage in Brazil. For example data shows a decrease of soybean hectares under production from
2004 to 2008 by 1.5 million. While for the same period of time, U.S. biodiesel production
increased from 25 million gallons to 690 million gallons. In addition, the forestry minister in
Indonesia recently highlighted the cause of deforestation in his country as illegal logging—
laying the entire burden of deforestation causation around the world at the feet of U.S. biofuels
producers is a narrow approach to a significant and multifaceted global issue.
Document No.: EPA-HQ-OAR-2005-0161-2314
Organization: The New England Fuel Institute
Comment:
The commenter does not believe that increased U.S. soy based biodiesel production will lead to
deforestation and land use conversion in South America. If this assumption is valid, Brazilian
soybean acreage would have increased from 2004 through 2008, when biodiesel production in
the United States increased from 25 million to 690 million gallons. In fact, Brazilian soybean
crops actually decreased by 1.5 million hectares during this same period. Current production
data suggests that soy based biodiesel volumes sufficient to meet EISA mandates will result in
no measurable lend use changes either here in the United States or in South America. (2134.1,
p.4)
Document No.: EPA-HQ-OAR-2005-0161-2435
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Organization: R.W. Heiden Associates LLC
Comment:
The commenter (2435) believes EPA's assumptions regarding international land use changes
associated with U.S. biodiesel production do not reflect the real world. EPA assumes increased
U.S. biodiesel production will lead to land conversion in South America. If this assumption were
correct, Brazilian soybean acreage would have increased from 2004 through 2008, a time in
which U.S. biodiesel production increased from 25 million to 690 million gallons. During this
time, however, Brazilian soybean acres actually decreased by 1.5 million hectares. Clearly, this
shows the inaccuracy of EPA's hypothesis and modeling. Indeed, land use changes in other
countries have numerous drivers wholly unrelated to U.S. biodiesel production. EPA's analysis
does not consider global market drivers for biodiesel feedstock, such as soybeans, that have
substantial influence on U.S. exports and land use changes in other countries. [[Docket number
2435.1, p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2625
Organization: Citizen (sample comment letter representing 400 comment letters received
from mass comment campaign sponsored by an anonymous organization)
Comment:
The commenter (2625) notes that "EPA assumes increased U.S. biodiesel production will lead to
land conversion in South America. If this assumption were correct, Brazilian soybean acreage
would have increased from 2004 through 2008, a time in which U.S. biodiesel production
increased from 25 million to 690 million gallons. During this time, however, Brazilian soybean
acres actually decreased by 1.5 million hectares." (2625 p. 2)
Document No.: EPA-HQ-OAR-2005-0161-2415.1
Organization: Informa for Renewable Fuels Association, Illinois Corn Marketing Board
and National Corn Growers Association
Comment:
Informa reviewed the Winrock analysis of land-use transitions. The Winrock findings about
whether cropland increased or decreased between 2001 and 2004 were contradicted by data from
the U.S. Department of Agriculture and FAO. For example, cropland in Brazil under the
Winrock data decreased from 2001 to 2004, whereas USD A data showed an increase. The
Winrock data arrived at a materially smaller amount of cropland in Brazil than either the USDA
or FAO data would indicate. Thus, the conclusions drawn by Winrock using satellite data differ
from the measurements "on the ground" that are reflected in USDA and FAO data. (2415.1, p2
Appendix H)
Our Response:
As explained in preamble Section V, to quantify the lifecycle GHG emissions associated
with the increase in renewable fuel mandated by EISA, we compared the differences in total
GHG emissions between two future renewable fuel volume scenarios using well established-
economic models. For each individual biofuel, we analyzed the incremental GHG emission
impacts of increasing the volume of that fuel to the total mix of biofuels needed to meet the
EISA requirements. The scenarios that we compared include the same background projections
about agricultural and economic conditions such as macroeconomic growth, oil prices, crop
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growing conditions, exchange rates and government policies. Thus, we isolate the effects of
each type of biofuel expansion because all other factors that affect the agricultural economy are
held constant.
The historical biodiesel and soybean statistics cited by the commenters are not
comparable with our model predictions. During the time period discussed by the commenters
(i.e., 2004 to 2008) many of the conditions that can affect the agricultural economy were
changing. For example, oil prices spiked, soybean blight became more prevalent in Brazil,
exchange rates were adjusted, and corn ethanol volumes also expanded substantially. In other
words, the increase in soy-based biodiesel production was not the only important factor that
changed during the period. Therefore, the fact that soybean acreage contracted in Brazil during
this period does not refute model predictions about how Brazil responds to U.S. biodiesel
production. If we could "re-run" history with a lower biodiesel volume, it may well be that
Brazil soybean acreage would have been much smaller than it actually was, in which case the
model predictions would be validated.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1015
Organization: Renewable Energy Group
Comment:
The commenter (1015) states that the data sets used by FASOM did not use the latest guidance
from Intergovernmental Panel on Climate Change (IPCC). EPA clearly notes (in Sec. VI.B.4.L
footnote 272) that IPCC guidelines have been considered, however, the table noted above fails to
conform to 2006 IPCC guidelines. FASOM was calibrated with 2001 EPA emission data. Using
the 2006 IPCC guidelines, the accurate calculation shows a decrease in C02 emission by -
244,560 tonnes and -5,504 g/MMBtu, therefore, the GHG emissions are a -20.9% decrease.
[[Docket number 2123.1, p. 4]]
The commenter points out that according to the current energy use of their plants, the
commenter's usage is approximately 18% lower than for soy biodiesel and approximately 13 to
14% lower for animal fats than the data used by EPA. The commenter adds that Biodiesel has
the highest energy balance of any transportation fuel produced in the U.S. The latest report from
the University of Idaho shows energy used to produce soy biodiesel compared to petroleum is
4.56:1. This is due to increased efficiencies in biodiesel production, soy crushing, farming
practices, and increases in soybean yields. In 1998, the energy balance was 3.2:1. By 2015, the
balance is projected to reach 5.44:1. [[Docket number 2123.1, pp. 6-7]]
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2011
Organization: Western Dubuque Biodiesel LLC
Document No.: EPA-HQ-OAR-2005-0161-2013
Organization: Central Iowa Energy, LLC
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Comment:
The commenter (2013) states that the data sets used by FASOM did not use the latest guidance
from Intergovernmental Panel on Climate Change (IPCC). EPA clearly notes (in Sec. VI.B.4.L
footnote 272) that IPCC guidelines have been considered, however, the table noted above fails to
conform to 2006 IPCC guidelines. FASOM was calibrated with 2001 EPA emission data. Using
the 2006 IPCC guidelines, the accurate calculation shows a decrease in C02 emission by -
244,560 tonnes and -5,504 g/MMBtu, therefore, the GHG emissions are a -20.9% decrease.
[[Docket number 2013.1, p. 6]]
The commenter points out that according to the current energy use of their plants, the
commenter's usage is approximately 18% lower than for soy biodiesel and approximately 13 to
14% lower for animal fats than the data used by EPA. The commenter adds that Biodiesel has the
highest energy balance of any transportation fuel produced in the U.S. The latest report from the
University of Idaho shows energy used to produce soy biodiesel compared to petroleum is
4.56:1. This is due to increased efficiencies in biodiesel production, soy crushing, farming
practices, and increases in soybean yields. In 1998, the energy balance was 3.2:1. By 2015, the
balance is projected to reach 5.44:1. [[Docket number 2013.1, pp. 6-7]]
Our Response:
The proposal analysis calculated NzO emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in NzO emissions. The proposal
analysis N20 factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating NzO emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
The NzO emission factors used in the proposal overestimated NzO emissions from
nitrogen fixing crops, because they were based on the 1996 IPCC guidance for NzO accounting.
As an update in 2006, IPCC guidance was changed such that biological nitrogen fixation was
removed as a direct source of NzO because of the lack of evidence of significant emissions
arising from the fixation process itself. IPCC concluded that the NzO emissions induced by the
growth of legume crops/forages may be estimated solely as a function of the above-ground and
below-ground nitrogen inputs from crop/forage residue. This change effectively reduces the
NzO emissions from nitrogen fixing crops like soybeans and nitrogen fixing hay from the 1996
to 2006 IPCC guidance.
Therefore, as part of the update to new N20 emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the N20
emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
In regards to the comment on energy use, EISA mandates setting up fuel GHG thresholds
do not require the EPA to do site specific GHG analysis but rather determine for specific fuel
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pathways if they meet the thresholds for the different fuel categories. Therefore, we have
developed an average energy use value for biodiesel production. As part of the final rule we
updated the energy use assumptions for biodiesel production to be in line with the latest energy
balance reports from USDA and the University of Idaho. Therefore, the final rule assumes lower
energy use for biodiesel production compared to the proposal analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1026
Organization: Gradek Energy
Comment:
The commenter (1026.1) believes that using agricultural production as the sole supplier to
meeting the biofuels demands will have negative environmental consequences initially. It may
well be the case that the adverse environmental effects of such an action plan will outweigh the
benefits of biofuels in itself. There will be a significant increase in water usage to produce the
biofuels, high levels of water and soil contamination through the use of fertilizers. The change in
land use, which requires the removal of forests, will increase C02 emissions and will affect the
natural habitat of many species. Furthermore, the lack of a fuel and transportation infrastructure
would require massive efforts to refine and distribute the biofuels to the market. (1026.1, p.2)
The commenter does not condone the production of biofuels through agricultural production, but
believes that solely using agricultural production to meet the EPA's environmental objectives is
not a sustainable option. The commenter believes the best way to alleviate the environmental
impact caused by fuel demand is to eliminate oil waste sources by transforming them into
renewable fuel. (1026.1, p.2)
Our Response:
EPA notes that the majority of these comments are beyond the scope of this rulemaking.
However, there are several aspects of the RFS2 program that relate to the commenter's
statements. For one, EISA establishes lifecycle GHG emission thresholds for each type of
renewable fuel mandated by the Act. EPA has developed a methodology to implement these
thresholds, which includes an assessment of the GHG impacts associated with land use changes
noted by the commenter. Secondly, EPA has finalized an approach to implementing the
renewable biomass provisions in EISA—which limit the types of biomass as well as the types of
land from which the biomass may be harvested. Lastly, we have conducted an analysis of the air
and water quality impacts of this rulemaking.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1036
Organization: Vision FL I, LLC
Comment:
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The commenter (1404.1) noted that On July 20, 2009, CARB released version 2.2 of the
"Detailed California-Modified GREET Pathways for Brazilian Sugarcane Ethanol: Average
Brazilian Ethanol, With Mechanized Harvesting and Electricity Co-product Credit, With Co-
product Credit." (See Docket Number 1404.3) The commenter recommends that the EPA
considers the figures in the above attachment as inputs into the GHG lifecycle analysis for the
final ruling as they will increase the GHG reduction percentage of the current sugarcane import
model. These figures should be considered for domestic sugarcane ethanol and sweet sorghum
ethanol processing facilities that are being planned for construction. (1404.1, p.3) (See Docket
Number 1404.1, p.3 for more discussion on this issue)
Our Response:
We have included mechanized harvesting as well as electricity co-product credit (from
bagasse and trash) in our analyses for the final rule based on recommendations from UNICA as
well as Brazilian researchers. This has resulted in imported sugarcane ethanol meeting the
advanced biofuel lifecycle threshold of 50%. At this time domestic sugarcane ethanol also
qualifies for the advance biofuel category. EPA anticipates modeling grain sorghum ethanol
after this final rule and including the determinations in a rulemaking within 6 months. EPA has
established a petition process whereby additional fuel pathways can be evaluated for threshold
compliance (See Preamble Section V.C).
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
Although the EPA has demonstrated the use of co-products as the basis for GHG emissions from
ethanol facilities, the commenter (1044) states that EPA failed to capture the data from co-
product generation from renewable biomass based diesel (biodiesel) production facilities or the
use of combined heat processes (CHP). This factor alone is a significant role player in the LCA
and violates the tenants of ISO 14040 standards and this factor is not considered in any fashion
or form unlike ethanol. In fact, in the preamble the discussion regarding co-products is centered
wholly on ethanol which demonstrates the lack of understanding of Biomass Based Diesel
refineries. The commenter therefore requests a review of this perspective and asks that the co-
products from Biomass Based Diesel refineries to be included in the LCA and GHG profiles in
accordance with the proposed language as written. The commenter believes the agency failed to
fulfill its statutory requirement with this aspect of the proposal. The statements regarding crude
glycerin and its side product effects (X) (C) (3) are not entirely accurate and again poorly reflect
the misunderstandings of the agency. [[Docket number 1044.1, p. 10]]
Our Response:
Glycerin is a co-product of biodiesel production. Our proposal analysis did not assume
any credit for this glycerin product. The assumption for the proposal was that by 2022 the
market for glycerin would be saturated due to the large increase in biodiesel production in both
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the U.S. and abroad and the glycerin would therefore be a waste product. We agree with the
comments that we should be factoring in a co-product credit for glycerin as there would be some
valuable use for this product in the market. Therefore, we have included for the final rule
analysis that glycerin would displace residual oil as a fuel source on an energy equivalent basis.
This is based on the assumption that the glycerin market would still be saturated in 2022 and that
glycerin produced from biodiesel would not displace any additional petroleum glycerin
production. However, the biodiesel glycerin would not be a waste and a low value use would be
to use the glycerin as a fuel source. The fuel source assumed to be replaced by the glycerin is
residual oil. This inclusion of a co-product credit for glycerin reduces the overall GHG impact
of biodiesel compared to the proposal analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1049
Organization: Prairie Pride, Inc.
Comment:
The commenter (1049) urges EPA to incorporate the IPCC's nitrogen findings and remove the
attribution of excess nitrogen emissions from soybean cultivation. This change will reduce GHG
score for soy biodiesel by more than 20 percent. [[Docket number 1049, p. 2]]
Our Response:
The proposal analysis calculated N20 emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in N20 emissions. The proposal
analysis NzO factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating NzO emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
We received a number of comments on our proposal results indicating that the N20
emissions were overestimated from soybean and other legume production (e.g., nitrogen fixing
hay) in our analysis. The main issue is that because the NzO emission factors used in the
proposal were based on the 1996 IPCC guidance for N20 accounting they were overestimating
N20 emissions from nitrogen fixing crops. As an update in 2006, IPCC guidance was changed
such that biological nitrogen fixation was removed as a direct source of NzO because of the lack
of evidence of significant emissions arising from the fixation process itself. IPCC concluded that
the N20 emissions induced by the growth of legume crops/forages may be estimated solely as a
function of the above-ground and below-ground nitrogen inputs from crop/forage residue. This
change effectively reduces the NzO emissions from nitrogen fixing crops like soybeans and
nitrogen fixing hay from the 1996 to 2006 IPCC guidance.
Therefore, as part of the update to new N20 emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the
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emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1051
Organization: Aberdeen Development Corp.
Comment:
The commenter (1051) believes that EPA's GHG emissions methodology contains a major error
regarding direct emission calculations for nitrogen. The 2006 Guidelines for National
Greenhouse Gas Inventories by the IPCC's concludes that nitrogen fixed in soil by soybeans
should not be considered a GHG emission. EPA, however, does not incorporate the IPCC's
updated nitrogen findings and thus attributes excess nitrogen emissions to soybean cultivation.
This error reduces the GHG score for soy biodiesel by more than 20 percent. [[Docket number
1051.1, p. 2]]
Our Response:
The proposal analysis calculated N20 emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in N20 emissions. The proposal
analysis N20 factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating N20 emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
We received a number of comments on our proposal results indicating that the N20
emissions were overestimated from soybean and other legume production (e.g., nitrogen fixing
hay) in our analysis. The main issue is that because the N20 emission factors used in the
proposal were based on the 1996 IPCC guidance for N20 accounting they were overestimating
N20 emissions from nitrogen fixing crops. As an update in 2006, IPCC guidance was changed
such that biological nitrogen fixation was removed as a direct source of N20 because of the lack
of evidence of significant emissions arising from the fixation process itself. IPCC concluded that
the N20 emissions induced by the growth of legume crops/forages may be estimated solely as a
function of the above-ground and below-ground nitrogen inputs from crop/forage residue. This
change effectively reduces the N20 emissions from nitrogen fixing crops like soybeans and
nitrogen fixing hay from the 1996 to 2006 IPCC guidance.
Therefore, as part of the update to new N20 emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the N20
emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1051
Organization: Aberdeen Development Corp.
Comment:
The commenter adds that EPA's analysis, which looks at the incremental change in biodiesel
production, establishes an artificially low production baseline and does not accurately account
for increasing crop yields and production efficiencies. Also, the agency utilized a 2007 Energy
Information Agency analysis that underestimates U.S. biodiesel production. In addition, multiple
state policies and fleet requirements will be implemented between 2008 and 2022. The EPA
penalizes the biodiesel industry by not considering new technology regarding fats and oils
production. Sources such as camelina, winter canola, and algae are not taken into account. In
addition, higher yielding oilseed technology has not been fully incorporated. Thus, the
commenter believes that EPA overestimated potential indirect land use change associated with
vegetable oil based biodiesel. [[Docket number 1051.1, p. 3]]
Our Response:
As was done for the proposal, to quantify the lifecycle GHG emissions associated with
the increase in renewable fuel mandated by EISA, we compared the differences in total GHG
emissions between two future volume scenarios in our economic models. For each individual
biofuel, we analyzed the incremental GHG emission impacts of increasing the volume of that
fuel to the total mix of biofuels needed to meet the EISA requirements. Rather than focus on the
impacts associated with a specific gallon of fuel and tracking inputs and outputs across different
lifecycle stages, we determined the overall aggregate impacts across sectors of the economy in
response to a given volume change in the amount of biofuel produced.
The two future scenarios considered included a "business as usual" volume of a particular
renewable fuel based on what would likely be in the fuel pool in 2022 without EISA, as
predicted by the Energy Information Agency's Annual Energy Outlook (AEO) for 2007 (which
took into account the economic and policy factors in existence in 2007 before EISA). The second
scenario assumed a higher volume of renewable fuels as mandated by EISA for 2022. In this
rulemaking analysis we only account for other policies that are currently in effect, we do not
model any future potential regulations. However, we do consider in this analysis increasing crop
yields and production efficiencies over time.
For the final rule analysis we have incorporated the LCA results for an algae oil pathway
but not for other oilseed pathways. However, we do not extend our results from soybean
modeling to other oilseed pathways. Those would be analyzed separately through future
rulemaking analysis if necessary.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1669
Organization: Environmental Intelligence, Inc.
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Comment:
The commenter (1669.1) is concerned with the unnecessary and unworkable feedstock
certification requirements that EPA has proposed. EPA must understand that soybeans are
produced primarily for the meal that is used in the feed and food market. Historically, there has
been surplus soybean oil that has depressed prices for soybeans. EPA's proposed rule on RFS2
implementation is significantly flawed and would do unnecessary harm to the competitive
position of the U.S. soy biodiesel industry. (1669.1, p.l)
The commenter noted that the EPA methodology contains a major error pertaining to the direct
emission calculations for nitrogen in soybean production. EPA also did not account for
glycerine as a co-product and inaccurately assesses the energy balance of biodiesel. The
commenter also believes that the GHG calculations must account for improved agriculture yields
and efficiency. The commenter believes that corrected values for nitrogen emissions, co-
products, and energy balance from biodiesel production would result in soy biodiesel GHG
emissions that are over 60% better than petroleum, easily exceeding the 50% GHG threshold
called for under the RFS2 biomass-based diesel schedule. An appropriate indirect land use
analysis would further enhance soy biodiesel's value relative to petroleum diesel. (1669.1, p.2)
Our Response:
As noted in response to other points raised by the commenter, EPA has substantially
updated its analysis of soy-based biodiesel, reflecting many of the specific technical issues raised
by the commenter. Regarding the overall driving forces for soy bean production, these are
accounted in our assessment of both the baseline projections for demand and for the demand
estimate due to biofuel production. EPA has appropriately considered market impacts.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1719
Organization: MAIZAR, Argentine Corn and Sorghum Association
Comment:
The commenter (1719.1) believes that all data which is used by the mathematical and
econometric models chosen by the EPA to evaluate and to qualify related to Argentina be
verified, analyzed and adopted by mutual consent. (1719.1, p.6)
The commenter also believes that all data obtained from the models chosen by EPA that are used
as a basis for Argentina's qualification by EISA, and any another current or future regulation that
evaluates Argentina's agricultural production-relating to land use changes, GHG emissions as
well as any other purpose be verified, analyzed and adopted by mutual consent. Only this way
the EPA will be assured that the data and assumptions used reflect accurately what occurs today
and what the future holds so that the norms applied in the qualification of biofuels in the United
States will be the most reliable for the objectives sought. (1719.1, p.6)
Our Response:
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RFS2 Summary and Analysis of Comments
Via the proposal process, EPA identified its sources of data and the mathematical and
econometric models it was using. Benefitting from public comment and other sources of
updated information, EPA used the most up to date and verifiable information available for
updating analyses for the final rule. In particular for Argentina, we used data provided by
respected international organizations, in particular data from the Food and Agricultural
Organization of the United Nations and the International Energy Agency.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2010
Organization: SoyMor Biodiesel, LLC
Comment:
The commenter (2010) states that the data sets used by FASOM did not use the latest guidance
from the Intergovernmental Panel on Climate Change (IPCC). EPA clearly notes (in Sec.
VI.B.4.L footnote 272) that IPCC guidelines have been considered, however, the table noted
above fails to conform to 2006 IPCC guidelines. FASOM was calibrated with 2001 EPA
emission data. Using the 2006 IPCC guidelines, the accurate calculation shows a decrease in
C02 emission by -244,560 tons and -5,504 g/MMBtu, therefore, the GHG emissions are a -
20.9% decrease. [[Docket number 2010.2, p. 4]]
The commenter points out that according to the current energy use of their plants, the
commenter's usage is approximately 18% lower than for soy biodiesel and approximately 13 to
14% lower for animal fats than the data used by EPA. The commenter adds that Biodiesel has the
highest energy balance of any transportation fuel produced in the U.S. The latest report from the
University of Idaho shows energy used to produce soy biodiesel compared to petroleum is
4.56:1. This is due to increased efficiencies in biodiesel production, soy crushing, farming
practices, and increases in soybean yields. In 1998, the energy balance was 3.2:1. By 2015, the
balance is projected to reach 5.44:1. [[Docket number 2010.2, pp. 5-6]]
Our Response:
The proposal analysis calculated NzO emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in NzO emissions. The proposal
analysis NzO factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating NzO emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
The NzO emission factors used in the proposal overestimated NzO emissions from
nitrogen fixing crops, because they were based on the 1996 IPCC guidance for NzO accounting.
As an update in 2006, IPCC guidance was changed such that biological nitrogen fixation was
removed as a direct source of NzO because of the lack of evidence of significant emissions
arising from the fixation process itself. IPCC concluded that the NzO emissions induced by the
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growth of legume crops/forages may be estimated solely as a function of the above-ground and
below-ground nitrogen inputs from crop/forage residue. This change effectively reduces the
NzO emissions from nitrogen fixing crops like soybeans and nitrogen fixing hay from the 1996
to 2006 IPCC guidance.
Therefore, as part of the update to new N20 emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the NzO
emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
The EISA mandates setting up fuel GHG thresholds do not require the EPA to do site specific
GHG analysis but rather determine for specific fuel pathways if they meet the thresholds for the
different fuel categories. As part of the final rule we updated the energy use assumptions for
biodiesel production to e in line with the latest energy balance reports including the University of
Idaho Study. Therefore, the final rule assumes lower energy use for biodiesel production
compared to the proposal analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2016
Organization: Malaysian Palm Oil Board (MPOB)
Comment:
The commenter (2016.1) believes that the various models used to calculate effects of indirect
land use change have not been scientifically proven to be accurate and reliable. The commenter
believes that indirect land use change (ILUC) should not be factored in. If this is the case,
Malaysian palm biodiesel can easily achieve more than 50% emission savings. (2016.1, p.2)
If ILUC must be included, the commenter agrees with the proposal that the life cycle analysis
results for soy biodiesel be extended to biodiesel from all vegetable oils including palm oil in the
absence of any available specific analysis at the moment. This would mean that biodiesel from
palm oil will be deemed to meet the 20% threshold for renewable fuel as for soy biodiesel. The
renewable fuel pathway table (Table VI E 2-1) should not be limited to ethanol from corn and
biodiesel from soy but also include biodiesel from other vegetable oils as shown in Table VI. E.
4.1 when such data are available. (2016.1, p.2)
Our Response:
EPA recognizes that it has had to break new scientific ground in developing a lifecycle
methodology as required by EISA. This is why the Agency employed a collaborative,
transparent and science-based approach. EPA took numerous measures to seek public comment
on our approach—including extending the comment period for the proposed rule, holding a two-
day public workshop on the lifecycle methodology, and reaching out to dozens of stakeholders,
including the biodiesel community, through individual meetings, conferences and events. As
noted by the commenter, EPA also initiated an independent peer review of specific areas of our
work. The information we received through this process has led to the approach in this final rule
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which bases the GHG threshold compliance determinations on the weight of evidence currently
available and quantifies the uncertainty about critical variables.
EPA has recognized that there are uncertainties associated with these estimates-
particularly with regard to indirect land use change-and has sought to develop an approach that
manages these uncertainties. However, EPA rejects the view that the modeling relied upon in
the final rule is too uncertain or untested to provide a credible and reasonable scientific basis for
determining whether the aggregate lifecycle emissions exceed the thresholds. If the international
land use impacts were so uncertain that their impact on lifecycle GHG emissions could not be
adequately determined, this does not mean EPA could assume the international land use change
emissions are zero. High uncertainty would not mean that emissions are small and can be
ignored; rather it could mean that we could not tell whether they are large or small. If high
uncertainty meant that EPA were not able to determine that indirect emissions from international
land use change are small enough that the total lifecycle emissions meet the threshold, then that
fuel could not be determined to meet the GHG thresholds of EISA and the fuel would necessarily
have to be excluded from the program. The Agency has chosen an approach that includes
biofuels with a significant international land use impact in this program. We also have chosen an
approach that quantifies uncertainty and presents the weight of currently available evidence in
making our threshold determinations.
For the final rule, EPA has updated analyses using the most recent data and information
available. It has extended its analyses to additional pathways for which the necessary
information was available. We did not extend our analysis of soy-based biodiesel to also cover
biodiesel from palm oil as we had no information to support this as technically appropriate.
However, we did include in the final rule a petition process whereby a producer of biofuel not
cover by the final rule can provide necessary information to EPA to allow the Agency to conduct
an appropriate LCA and determine compliance with GHG thresholds. EPA indicated that as a
matter of its ongoing assessment, it would work to expand coverage to other biofuels which it
determined were likely to be used in the U.S. and for which sufficient information were available
to allow a LCA GHG analysis. Such new assessments will be periodically reflected in regulatory
updates to this rule. In addition, EPA anticipates modeling palm oil biodiesel and include the
determination in a rulemaking in the next six months.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2048
Organization: BioPure Fuels
Comment:
The commenters (2048.1) believes the goal of use of 35 billion gallons of biofuels by 2022 is
very conservative and could be much greater given the volatility and cost risk associated with
dependence on petroleum (as we saw in 2008) and the need to achieve carbon reductions of as
much as 80% by 2020 to avoid the worst impacts of climate change. There are also numerous
benefits in development of alternative fuels in terms of investment in the agricultural sector
(which is likely to lead to greater food production not less), increased job benefits in the USA
and globally, and other secondary benefits. The commenter notes that it is not the only way to
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reduce carbon emissions in fuel and leaving out other alternatives (fuel additives) is a policy
mistake that should not be overlooked. This is particularly relevant to the current rule adoption
process because some fuel additives can overcome the problems associated with certain biofuel
feedstocks because of dual benefits from additive use. (2048.1 p.7)
The commenter recommend that U.S. EPA staff work together to develop a specific guidance
document for the oil seed industry that suggests best practices for co-planting of oil seed trees
with food crops to optimize the production of both food and fuel and to minimize the life cycle
carbon impacts of oil production. The commenter encourages U.S. EPA to make changes in the
GREET model and any implementation of the RFS2 to consider an integrated approach to
production of both food and fuel. This will optimize carbon benefits and help provide solutions
to what is seen as a perceived barrier to investment in the biofuels sector and sustainability of
biofuels. This guide would be used by the oil seed industry in looking at how to produce
vegetable oil in a way that leads to the best possible food supply and carbon life cycle results.
(2048.1, p.ll)
Our Response:
Regarding the recommendations to consider higher fuel mandates or alternative means of
reducing carbon from the transportation sector, EPA notes this rule is responding to the specific
mandates of EISA.
Regarding recommendations for identifying best practices for the agricultural and biofuel
production communities, the detailed documentation of how EPA has conducted its LCA for
GHG in part addresses this recommendation as it highlights those parameters and practices
which tend to make the greatest difference in GHG assessment. Also we have adopted a petition
process whereby new, enhanced technologies for biofuel production can be identified and their
benefits quantified. This process should tend to support the development and adoption of
innovative technologies which improve GHG performance.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2079
Organization: AE Biofuels, Inc.
Comment:
The commenter (2079.1) believes that EPA's GHG emissions methodology contains a major
error pertaining to the direct emission calculations for nitrogen. The 2006 Guidelines for
National Greenhouse Gas Inventories by the Intergovernmental Panel on Climate Change (IPCC)
concludes that nitrogen fixed in soil by soybeans should not be considered a GHG emission.
EPA, however, does not incorporate the IPCC's updated nitrogen findings and thus attributes
excess nitrogen emissions to soybean cultivation. Notably, both the Argonne National
Laboratory and the California Air Resources Board use the IPCC data in their models. This error
reduces the GHG score for soy biodiesel by more than 20 percent. (2079.1, p.7)
Our Response:
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The proposal analysis calculated N20 emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in N20 emissions. The proposal
analysis N20 factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating N20 emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
We received a number of comments on our proposal results indicating that the N20
emissions were overestimated from soybean and other legume production (e.g., nitrogen fixing
hay) in our analysis. The main issue is that because the N20 emission factors used in the
proposal were based on the 1996 IPCC guidance for N20 accounting they were overestimating
N20 emissions from nitrogen fixing crops. As an update in 2006, IPCC guidance was changed
such that biological nitrogen fixation was removed as a direct source of N20 because of the lack
of evidence of significant emissions arising from the fixation process itself. IPCC concluded that
the N20 emissions induced by the growth of legume crops/forages may be estimated solely as a
function of the above-ground and below-ground nitrogen inputs from crop/forage residue. This
change effectively reduces the N20 emissions from nitrogen fixing crops like soybeans and
nitrogen fixing hay from the 1996 to 2006 IPCC guidance.
Therefore, as part of the update to new N20 emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the N20
emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2112
Organization: Biomass Rules, LLC
Comment:
The commenter (2112.1) noted that non-renewable fuels are not held to the same standards as the
biofuels. The LCA analysis does not include the environmental impact of using Canadian tar
sands for fuel (or other fossil fuels). The LCA also misallocates energy made from wastes.
Food wastes and sewage should be included in food LCA models. The commenter also noted
that the proposed rule fails to acknowledge the energy value of methane and the fertility value of
carbon dioxide. Production of these greenhouse gases is not bad. What is undesirable is the
release of these valuable fuel, fertilizer, and food ingredients. This proposed rule does not
incentivize the channeling of these emissions into further production of valuable products.
(2112.1, p.14)
Our Response:
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As indentified in both the proposal and the final rule, EPA interprets EISA as requiring
biofuel lifecycle GHG performance to be compared with a 2005 baseline average fuel it is
replacing. To the extent specific fuel sources such as Canadian tar sands were represented in that
2005 baseline fuel pool; we have analyzed their lifecycle GHG impact. In the final rule we have
also assessed fuels made from waste products. Regarding credit for possible uses of GHG
emissions, we have provided credit for co-products produced in conjunction with biofuel
production if such co-products were indentified and likely to be produced and marketed. We did
not analyze potential uses for GHG emissions for which their currently appears to be no market
value (such as excess C02).
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2116
Organization: The ProExporter Network
Comment:
The commenter (2116) noted that increases in yield per acre for corn have allowed the U.S. to
meet all traditional uses for corn and to increase production of ethanol. USDA projections of
historical trend corn yields for the next ten years indicate that production will increase to allow
for five billion bushels of corn to be used for ethanol in 2018 and meet other domestic and export
needs. If yields per acre increase more rapidly as major seed corn companies believe, the U.S.
will have even more corn available for all uses. (2116, p.l)
The commenter also noted that a logical concern could be raised that the world corn market
could be growing rapidly, but the U.S. not gain much of that market because corn is being bid
away for domestic ethanol production. (2116.1, p.4) (See Docket Number 2116.1, pp.3-6 for a
detailed discussion on U.S. corn exports)
The commenter noted that as ethanol production increases at a slower rate in the years ahead, the
increase in production of DDGS will also slow and more corn will be needed if livestock and
poultry production continues to increase as expected in the USDA long-term projections.
(2116.1, p.6) (See Docket Number 2116.1, pp.6-7 for a detailed discussion of this issue)
The commenter believes that if there is a need for increased corn production outside the U.S. the
quickest way to achieve that would be through increased yields on existing corn land. (2116.1,
p. 12) (See Docket Number 2116.1, pp.12-13 for more information regarding international corn
yields)
Our Response:
The analysis for the final rulemaking includes a sensitivity run with corn and soybean
yield projections that are higher than USDA projections. These higher yields occur both
domestically and internationally in the sensitivity run. Results from the model sensitivity runs in
FASOM and FAPRI are located in the docket, and are discussed in the RIA and the technical
reports for each model, also found on the docket.
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EPA agrees that net corn exports are projected to decrease as demand for renewable fuel
increases. However, EPA's analysis also projects additional production of corn for ethanol
production in the U.S. to satisfy this increase in demand. Additionally, as an indirect effect of
biofuel production, corn used for other purposes, such as in animal feed, also decreases, allowing
for more corn to be used for ethanol production. Effects on the use of corn as a result of an
increase demand for renewable fuels are discussed in more detail in chapters 2 and 5 of the RIA.
EPA's analysis also projects international yields for crops such as corn to increase over
time. In addition, the FAPRI model includes price-induced changes in yield. Thus, as demand
for a commodity increases, raising the global price for that commodity, yields will increase as a
result. Additional information on price-induced yields in the FAPRI can be found in the RIA
and the technical documentation for the FAPRI model in the docket.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2119
Organization: National Sorghum Producers
Comment:
With regards to distillers grains, the commenter believes that a facility that dries only a portion
of its distiller's grains should only be producing different RINs (or no RINs) on that portion of
biofuels that resulted in dried distiller's grains. If a facility estimates that it will dry 20% of its
distiller's grains in a year, then 20% of the daily volume of ethanol should have a different RIN
(or no RIN). An adjustment could then be made each quarter to account for the actual amount of
dried distiller's grains produced. (21191, p.4)
The commenter noted that the inclusion of energy sorghum into the final rule will help spur
investment into biorefineries that will process biomass into cellulosic ethanol. With feedstock
currently available, the inclusion in the final rule will give confidence to investors that cellulosic
ethanol can be a viable investment opportunity. (2119.1, p.6)
Our Response:
EPA has modeled that facilities that dry no more than 65% of their distillers grains and
solubles in a calendar year and uses other advanced technologies then they may qualify to
produce RINs. If the production facility pathways qualify as meeting the GHG threshold then
that facility may generate RINs for all qualifying volumes.
EPA has not analyzed the lifecycle GHG performance of energy sorghum or sweet
sorghum-based biofuel. As emerging fuel pathways, we expect the data and other information
on which to base a LCA will improve as the pathway approaches commercialization. EPA has
provided a petition process for fuel providers to provide information necessary for EPA to
conduct a biofuel LCA. Additionally, EPA plans to routinely expand on the biofuels it has
assessed and reflect these new assessments in periodic updates to this final rule.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) supports EPA's approach to add direct and indirect N20 emissions to
domestic agriculture LCA. The commenter supports sound science and this is a component that
should not be ignored or skipped. (2124.1, p.28)
Our Response:
We have included direct and indirect N20 emissions from domestic and international
agriculture in our analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2136
Organization: Iowa Renewable Fuels Association (IRFS)
Comment:
The commenter (2136) states that EPA relies on old data set that do not keep up with the
dynamic innovation in the renewables sector. Accurate and up-to-date data sets for biofuels and
coproducts production must be used. The commenter adds that most biodiesel refineries in Iowa
report that current energy use is approximately 18% lower for soy biodiesel and approximately
13 to 14% lower for animal fats than the data used by EPA. [[Docket number 2136.1, pp. 5-6]]
Our Response:
For the final rule analysis EPA has used up to date data sets for biofuels and co-products
produced in the renewable sector. We have updated the corn ethanol energy use projections
based on an update of the study used in the proposal. We have updated the corn ethanol and
biodiesel co-product credit based on new research and data available since the proposal was
released. We have also updated the biodiesel energy use values based on new studies that have
been released since the proposal. For biodiesel production this has lowered the energy use in
comparison to the values used in the proposal.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2463.2
Organization: National Farmers Union
Comment:
The commenter (2463) believes EPA is underestimating key data requirements in the analysis.
One of the key requirements in attempting to determine indirect land use change is the amount of
U.S. crop production. EPA assumes that U.S. corn yields will average 180 bushels per acre in
2022, increasing at an annual rate of 1.6 percent annually. In comparison, industry researchers
believe that U.S. yields could increase much more significantly over the same period reaching
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more than 250 bushels an acre in 2022. If yields more closely match industry estimates, any
potential impact from international land use change would be further minimized. (2463.2 Pg. 4).
Our Response:
Our crop yield projections are based on USDA's most recent forecasts through 2018, and
then extrapolated out through 2022. We believe these projections represent a feasible future
scenario. However, we have also included a sensitivity analysis that increases corn and soybean
yields by approximately 25% by 2022. The results of this analysis are included in the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2136
Organization: Iowa Renewable Fuels Association (IRFS)
Comment:
The commenter is concerned about EPA's crop yield projections and urges the Agency to
carefully consider comments from DuPont/Pioneer, Monsanto, Syngenta and other seed
technology providers that make clear we are in the midst of a period of technology driven yield
transformation. The commenter believes that the Agency must abandon its 30-year straight-line
yield assumption when modeling ILUC and direct feedstock production efficiencies. [[Docket
number 2136.1, pp. 6-7]]
Our Response:
EPA has considered data supplied by seed producers and others regarding its future
projections of yield and has reflected these projections in its threshold assessments. In particular
we have conducted sensitivity assessments using high yield cases and confirmed that high yields
do not change the results of our analyses. However, we also plan to periodically update our
analyses and should yield projections change, these changes would be captured in subsequent
reassessments and appropriate updates to our threshold determinations.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2136
Organization: Iowa Renewable Fuels Association (IRFS)
Comment:
The commenter applauds the Agency for pledging to incorporate the updated 2006 Guidelines
for National Greenhouse Gas Inventories from the Intergovernmental Panel on Climate Change
into the final rule. Utilizing these guidelines for incorporating nitrogen values into the GHG
emissions calculations would increase soybean oil-based biodiesel's GHG reduction percentage
by an additional 20.9 percent. [[Docket number 2136.1, pp. 7-8]]
Our Response:
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EPA has considered data supplied by seed producers and others regarding its future
projections of yield and has reflected these projections in its threshold assessments. In particular
we have conducted sensitivity assessments using high yield cases and confirmed that high yields
do not change the results of our analyses. However, we also plan to periodically update our
analyses and should yield projections change, these changes would be captured in subsequent
reassessments and appropriate updates to our threshold determinations.
The proposal analysis calculated N20 emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in N20 emissions. The proposal
analysis NzO factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating N20 emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
The NzO emission factors used in the proposal overestimated NzO emissions from
nitrogen fixing crops, because they were based on the 1996 IPCC guidance for N20 accounting.
As an update in 2006, IPCC guidance was changed such that biological nitrogen fixation was
removed as a direct source of N20 because of the lack of evidence of significant emissions
arising from the fixation process itself. IPCC concluded that the NzO emissions induced by the
growth of legume crops/forages may be estimated solely as a function of the above-ground and
below-ground nitrogen inputs from crop/forage residue. This change effectively reduces the
N20 emissions from nitrogen fixing crops like soybeans and nitrogen fixing hay from the 1996
to 2006 IPCC guidance.
Therefore, as part of the update to new NzO emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the N20
emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2140
Organization: John Deere Agriculture & Turf Division
Comment:
1. The commenter (2140.1) noted that it is also critical to recognize that degraded and/or
underutilized land in many countries could be used to meet increasing demand for new crop
production, whether for production of food and feed or renewable fuels. (2140.1, pp.2-3)
The commenter also noted that it is critical to incorporate up-to-date information about yield
increases and productivity gains. Simple extrapolation of long-term historic yield trends ignores
the fact that yield gains have occurred at an accelerated rate following the advent of
biotechnology and marker assisted breeding. It is also critically important to develop appropriate
assumptions for increases in crop productivity in the rest of the world. There is currently a
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considerable yield gap between yields in the developed countries and in the rest of the world; a
gap that can be narrowed through adaptation of some current and future technologies. The
impacts of increasing crop yields in the rest of the world relative to crop yields in the United
States are critical. The commenter is confident that the historically demonstrated trend of
increasing agricultural commodity production efficiency will continue. The highly-successful
technologies and equipment currently utilized in the United States will enable even more
dramatic positive impacts when deployed on a global scale. These technologies and practices can
increase crop yields in the developing world dramatically, and result in improvements to human
and environmental health. (2140.1, p.3) (See Docket Number 2140.1, pp.3-4 for a detailed
discussion of this issue)
2. The commenter believes that EPA must also fully account for the utilization of all products
from the biofuels production chain, as utilization of part of a crop for fuels production does not
replace other uses of the crop, such as for feed, oils, and chemicals. The commenter also noted
that the EPA proposed rule does not account for glycerin resulting from biodiesel production, a
factor that can markedly improve the emissions assessment of biodiesel. (2140.1, p.4) *
3. The commenter also believes that assumptions regarding international impacts in crop supplies
of domestic renewable fuels policies must also take into account actual export and trade
volumes. (2140.1, p.4)
4. The commenter also believes that it is appropriate for the EPA to seek greater accuracy in the
estimation of nitrous oxide emissions from agriculture than what is currently attainable with
existing estimates. (2140.1, p.5)
Our Response:
1. EPA has considered data supplied by seed producers and others regarding its future
projections of yield and has reflected these projections in its threshold assessments. In particular
we have conducted sensitivity assessments using high yield cases and confirmed that high yields
do not change the results of our analyses. However, we also plan to periodically update our
analyses and should yield projections change, these changes would be captured in subsequent
reassessments and appropriate updates to our threshold determinations.
2. In the LCA analysis performed for this rulemaking EPA has fully accounted for the
utilization of all products from the biofuels production chain. For example we account for the
use of corn ethanol co-product DCS use as animal feed displacing use of other crops for feed.
The final rule analysis also accounts for the beneficial use of glycerin from biodiesel production
which lowers the GHG impacts associated with biodiesel compared to the analysis in the
proposal.
3. The domestic and international agricultural sector modeling done for this analysis
takes into account actual export and trade volumes. However, the analysis is based on projected
export and trade volumes for different fuel volume scenarios in the future. Furthermore, we are
only interested in the difference between the two scenarios in a given year not absolute levels of
exports or how absolute levels of exports change over time for a given case.
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4. For the final rule analysis we have updated the N20 emission estimates domestically to
take into account new data and work performed by Colorado State University on soil and crop
N20 emissions.
EPA has considered data supplied by seed producers and others regarding its future
projections of yield and has reflected these projections in its threshold assessments. In particular
we have conducted sensitivity assessments using high yield cases and confirmed that high yields
do not change the results of our analyses. However, we also plan to periodically update our
analyses and should yield projections change, these changes would be captured in subsequent
reassessments and appropriate updates to our threshold determinations.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2141
Organization: American Trucking Associations
Comment:
The commenter (2141.1) has monitored the debate over indirect carbon emissions and its
potential impact upon the use of soy-based biodiesel under RFS2. The commenter strongly
believes that EPA's decisions on this matter must be based upon sound science and that EPA
cannot ignore indirect carbon emissions from fuels used to satisfy the various RFS2 mandates.
The failure to include indirect carbon emissions could ultimately require the imposition of
additional carbon offsets from other sources in order to meet any future government-mandated
carbon reduction goals. (2141.1, p.5)
Our Response:
EPA agrees that the lifecycle methodology must be based on sound science. EPA has
made every effort to craft a collaborative, transparent and science-based approach. We also
agree that EISA requires us to consider indirect emissions in our lifecycle assessment. While
EPA has gone to great lengths to measure these impacts, including the use of analytical tools in
new ways, we also have sought to acknowledge and manage the uncertainties associated with
these estimates, particularly with regard to indirect land use change.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) noted that it is critical that the assumptions used properly reflect the
positive impacts of technology and yield improvement over time. The current EPA analysis
appears to underestimate the efficiency gains in crop production, therefore overestimating both
the amount and type of land use required going forward. (2146.1, p.5)
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Our Response:
To quantify the impact of future yield projections raised by Dupont and others, we have
estimated greenhouse gas emission estimates for corn ethanol and soybean biodiesel using our
business as usual trends as well as a scenario in which future yields for corn and soybeans are
approximately 25% higher by 2022. Results of both future yield scenarios are provided in
Chapter 2 of the RIA and demonstrate the impact of this assumption on the modeling results.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2148
Organization: Hornbeck Agricultural
Comment:
The commenter (2148) is concerned about the proposed EPA regulations that purport to measure
the lifecycle benefits of soy-based biodiesel. EPA appears to be going beyond its statutory
mandate. (2148, p. 1)
The commenter noted that yield increases by U.S. soybean farmers will play a significant role in
meeting biodiesel feedstock demand by producing more soybeans on the same amount of land.
Historical data show that productivity gains and yield increases are the norm for U.S. agriculture.
Over the 25-year period from 1981-2006, U.S. soybean farmers increased their acre-yield nearly
50 percent, from 30 bushels per acre to 43 bushels per acre. This equates to an average yield
increase of one-half bushel per acre per year, and represents the minimum productivity increase
that is likely to occur. Emerging technologies are expected to increase future yields that will
surpass those achieved over the past 25 years. (2148, p.l)
Our Response:
The commenter in particular focused on EPA's inclusion of indirect land use changes in
its LCA of soy-based biodiesel. We first note that EPA has significantly updated its LCA
assessments since the proposal to reflect new and improved data and other information.
However, as stated in the proposal and reaffirmed in this final rule, EPA believes including
indirect land use impacts is technically appropriate, consistent with the mandates of EISA and
can be down in a credible, science based manner. The models and data used for the final rule
assessments are the best available and are of sufficient reliability to support and determination of
compliance with the GHG performance threshold. Uncertainty analyses which in particular
focused on indirect land use impacts were included in this final rule assessment.
EPA has considered data supplied by seed producers and others regarding its future
projections of yield and has reflected these projections in its threshold assessments. In particular
we have conducted sensitivity assessments using high yield cases and confirmed that high yields
do not change the results of our analyses. However, we also plan to periodically update our
analyses and should yield projections change, these changes would be captured in subsequent
reassessments and appropriate updates to our threshold determinations.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2168
Organization: First United Ethanol, LLC
Comment:
The commenter (2168) noted that part of the flawed science lies within EPA's attempt to
separate the elements of good and bad within a single corn plant. Corn-based ethanol produced
from the kernel of the corn is reported to have a higher GHG emission than ethanol produced
from corn stover. How can this science disproportionately assign GHG emissions to different
parts of the same plant? The entire plant is being grown on American farms where our farmers
are employing their best practices to achieve the highest yields possible with the least amount of
inputs, including fertilizer and chemicals. The same cannot be said for the crops used to produce
imported ethanol. Imported ethanol should be evaluated and if necessary, charged with additional
GHG emissions based on its own set of circumstances. (2168, p.2)
Our Response:
The rationale used by EPA was that in the case of corn stover collected for cellulosic fuel
production, the corn was planted for the corn kernels harvested; the remaining stover would then
be considered agricultural excess with no land use impact (i.e., the corn was planted for the corn
kernel, not for producing left over stover, some of which might be collected and turned into
cellulosic biofuel). At this time, for example, farmers fertilize corn for optimum corn kernel
production, not for optimum stover production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2174
Organization: Illinois Soybean Association
Comment:
The commenter (2174) noted that biodiesel is the cleanest burning biofuel currently used in
commercial markets. Biodiesel is a renewable and sustainable energy source that can play a
significant role in the national efforts to increase the energy security and improve the
environmental footprint. Biodiesel has also provided a significant market opportunity for U.S.
soybean farmers and jobs and economic development for rural communities. The commenter
believes that yield increases by U.S. soybean farmers will play a significant role in meeting
biofuel feedstock demand by producing more soybeans on the same amount of land. U.S. seed
technology companies are projecting that current soybean yields will double by 2030. (2174, p.2)
Our Response:
The GHG benefits of biodiesel from soy oil have been evaluated by EPA and clearly
recognized in determining this fuel pathway as comply with the advanced biofuel GHG
performance threshold.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2189
Organization: Technical Consultant for Enzyme Development Corporation and
Genencor International
Comment:
The commenter (2189) noted that steady improvements in grain production per acre and
increases in gallons of ethanol produced per bushel of corn are resulting in more ethanol being
produced and more corn being available for export without planting more acres of corn.
Improved agricultural techniques and improved corn genetics from scientists at companies such
as Monsanto, Dupont and Syngenta will result in dramatic increases in corn production in the
next ten years. The rate of improvement in accelerating, not slowing down. A good part of these
improvements have been motivated by the production of fuel ethanol from corn and other grains.
That provides the incremental market demand for corn and the financial incentives for farmers,
process engineering companies, agricultural engineering firms, companies working in grain
genetics, and grain processing plants to produce innovations year by year. (2189, p.2)
Our Response:
For the lifecycle threshold analysis, yields for corn are based on USDA projections.
However, EPA did conduct a sensitivity analysis with higher domestic and international yields
for corn and soybeans to account for possible increases in the rate of technological progress.
Results from the model sensitivity runs in FASOM and FAPRI are located in the docket, and are
discussed in the RIA and the technical reports for each model, also found on the docket.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2234
Organization: Energy & Resources Group University of California
Comment:
The commenter [[2234]] states that the effects of changes in consumption of distillers grains on
enteric methane emissions is promised to be added; this is currently not included in FASOM.
[[2234.1 p.6]]
Our Response:
EPA agrees with the comment that changes in distillers grains in animal feed has an
effect on enteric methane emissions; this impct is included in the final rulemaking analysis. For
additional details, please refer to the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2245
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Organization: Illinois Corn Growers Association, et.al.
Contributors to this comment letter include: Iowa Corn Growers Association, Iowa Soybean
Association, Illinois Soybean Association, Illinois Renewable Fuels Association, Kentucky
Soybean Association, Minnesota Soybean Growers Association, Missouri Corn Growers
Association, Missouri Soybean Association, Monsanto, the National Corn to Ethanol Research
Center, Nebraska Corn Board, Nebraska Soybean Association, Novozymes, Ohio Soybean
Association, South Dakota Soybean Association, University of Illinois Chicago, Energy
Resources Center, University of Illinois Champaign-Urbana plant breeding, animal nutrition and
agronomy, DuPont, Ethanol Technologies, John Deere, and the U.S. Grains Council
Comment:
The commenters (2245.1) believe that EPA needs to update their expected yield projections and
should take into account data quality and uncertainty associated with their projections. Accurate
crop yield projections are extremely important to properly calculate indirect land use changes.
Although most crops in most countries have a strong history of yield increases, there is
considerable variability in individual yield predictions. Indirect land use change calculations
must take into account the errors associated with forward predicting crop yields and must be
based upon an established and agreed to time frame for trend line yields. (2245.1, p.2) (See
Docket Number 2245.1, pp.2-21 for a detailed discussion on crop yield projections)
Our Response:
For the final rule, EPA has updated its assessment of crop yields both domestically and
internationally. We have calculated lifecycle emission performance assuming both base yields
derived from projecting into the future longer term historical trends and also assuming a marked
increase in future yields based on industry and other comments. We have also included
uncertainty analyses which in particular focus on international indirect land use impacts. These
uncertainty assessments were used in determining whether a biofuel pathway was likely to
exceed its GHG performance threshold.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) states that EPA's analysis of the domestic agricultural sector also may
overestimate domestic agricultural emissions. The domestic agricultural emissions are based on
very high energy consumption rates—50 percent higher than those used in GREET and 300
percent higher than a recent survey of Iowa soybean producers. [[Docket number 2249.2, p.
106]]
In addition, the transportation emissions for feedstock and fuel are calculated from the GREET
model using the model defaults. The commenter is concerned that the feedstock transportation
emissions may also be included in the FASOM emission estimates because this energy is
included in farm energy. These emissions would amount to 2,615 g COzeq/mm BTU and could
be double counted. The commenter adds that this is another example of the lack of transparency
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in the FASOM and FAPRI modeling, and the inability to reproduce EPA's results. [[Docket
number 2249.2, p. 106]]
Our Response:
We disagree that the energy use for soybean production has been overestimated. Energy
data (e.g., diesel fuel, gasoline, electricity, natural gas) included within the crop budgets in
FASOM are based on USDA Agricultural Resource Management Survey (ARMS) data
(http:www.ers.usda.gov/Data/ARMS/) and crop budgets developed by university extension
offices. The differences with other sources of data are because the crop budgets included in the
FASOM model include data on input use that varies by crop, management practices, and region.
There is often considerable variation in the inputs used per acre, which implies that total input
use and associated GHG emissions and other environmental impacts will be affected by changes
in crop mix and management practices that result under the different scenarios considered.
Furthermore, the energy use for transportation is not double counted in the modeling.
The energy use for crop production is separate from the energy used to transport feedstocks.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2300
Organization: Dow AgroSciences
Comment:
The commenter (2300) believes that the analysis of nitrous oxide (NzO) emissions is incorrect
and does not provide opportunity for notice and comment on the studies EPA intends to use for
the final rule. The commenter also noted that technologies like nitrapyrin and its propensity for
reducing NzO has not been considered in EPA calculations. The commenter requests that such
products be included, particularly in light of a new and easy formulation being introduced this
year to the marketplace. (2300, p.l)
Our Response:
EPA believes the analysis of NzO emissions used for the final rule is correct and that we
have provided for opportunity for notice and comment.
The proposal analysis calculated NzO emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in NzO emissions. The proposal
analysis NzO factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating NzO emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal but the model and approach was identified in
order to provide the opportunity for notice and comment.
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We received a number of comments on our proposal results indicating that the N20
emissions were overestimated from soybean and other legume production (e.g., nitrogen fixing
hay) in our analysis. The main issue is that because the NzO emission factors used in the
proposal were based on the 1996 IPCC guidance for N20 accounting they were overestimating
N20 emissions from nitrogen fixing crops. As an update in 2006, IPCC guidance was changed
such that biological nitrogen fixation was removed as a direct source of N20 because of the lack
of evidence of significant emissions arising from the fixation process itself. IPCC concluded that
the N20 emissions induced by the growth of legume crops/forages may be estimated solely as a
function of the above-ground and below-ground nitrogen inputs from crop/forage residue. This
change effectively reduces the N20 emissions from nitrogen fixing crops like soybeans and
nitrogen fixing hay from the 1996 to 2006 IPCC guidance.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2317
Organization: National Corn Growers Association (NCGA)
Comment:
1. The commenter (2317) believes the proposal's approach to the LC analysis inappropriately
attributes GHG emissions to corn ethanol and should be dropped or revised substantially. The
commenter adds that the proposal's domestic corn yield projections are inconsistent with current
trends and forecasts and must be increased substantially. [[Docket number 2317.1, p. 7]] [[See
docket number 2317.1, pp. 7-15 for an extensive discussion of this issue.]]
2. The commenter states that like the proposal's domestic corn yield rate projections, the
international corn yield projections are inconsistent with current trends in corn yields and must
be increased substantially. [[Docket number 2317.1, p. 21]] [[See docket number 2317.1, pp. 21-
22 for further discussion of this issue.]]
3. The commenter adds that the analysis of nitrous oxide emissions is flawed and fails to provide
an opportunity for notice and comment on the studies upon which EPA sates it will base the final
rule. [[Docket number 2317.1, p. 28]] [[See docket number 2317.1, pp. 28-34 for extensive
discussion of this issue.]]
Our Response:
1. Regarding the comment on EPA's approach to LCA, EPA has clearly described its
analytical techniques, the models used and the sources of data. We believe these represent the
best tools and information available and there appropriate use for biofuel modeling was
confirmed by peer review and other comments. These models (as well as other models evaluated
for their projections of land use impact) confirm that indirect land use impacts are significant and
cannot be ignored.
2. For the final rule, EPA has updated its assessment of crop yields both domestically and
internationally. We have calculated lifecycle emission performance assuming both base yields
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derived from projecting into the future longer term historical trends and also assuming a marked
increase in future yields based on industry and other comments.
3. EPA believes the analysis of N20 emissions used for the final rule is correct and that
we have provided for opportunity for notice and comment.
The proposal analysis calculated N20 emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in N20 emissions. The proposal
analysis N20 factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating N20 emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal but the model and approach was identified in
order to provide the opportunity for notice and comment.
We received a number of comments on our proposal results indicating that the N20
emissions were overestimated from soybean and other legume production (e.g., nitrogen fixing
hay) in our analysis. The main issue is that because the N20 emission factors used in the
proposal were based on the 1996 IPCC guidance for N20 accounting they were overestimating
N20 emissions from nitrogen fixing crops. As an update in 2006, IPCC guidance was changed
such that biological nitrogen fixation was removed as a direct source of N20 because of the lack
of evidence of significant emissions arising from the fixation process itself. IPCC concluded that
the N20 emissions induced by the growth of legume crops/forages may be estimated solely as a
function of the above-ground and below-ground nitrogen inputs from crop/forage residue. This
change effectively reduces the N20 emissions from nitrogen fixing crops like soybeans and
nitrogen fixing hay from the 1996 to 2006 IPCC guidance.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2348
Organization: StateLine Cooperative
Comment:
The commenter (2348) believes that EPA should assume that CRP land will be released in
response to a long term change in demand for ethanol and soy biodiesel. EPA should also
assume corn and soybean yield increases more in line with recent experience rather than long
term trends. (2348, p. 1)
Our Response:
Based on coordination with USDA, EPA modeled assuming land in CRP will be
supported by USDA and therefore would not be available for biofuel production.
For the final rule, EPA has updated its assessment of crop yields both domestically and
internationally. We have calculated lifecycle emission performance assuming both base yields
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derived from projecting into the future longer term historical trends and also assuming a marked
increase in future yields based on industry and other comments.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2354
Organization: Massachusetts Department of Environmental Protection
Comment:
The commenter (2354) recommends that the biofuels created from mixed feedstocks should
NOT be assigned a single lifecycle emissions score based on the weighted average of the score
that would be achieved by either feedstock. Allowing this type of averaging provides an
incentive to combine feedstocks with high lifecycle emissions (e.g., virgin vegetable oils) with
feedstocks with low lifecycle emissions (e.g., waste greases). The commenter (2354)
recommends creating a system that favors feedstocks, such as waste grease, over feedstocks such
as virgin vegetable oils. (2354.pdf, p.4)
Our Response:
The option of averaging soy and waste grease biodiesel performance was not adopted.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2355
Organization: New Generation Biofuels
Comment:
As confidential information, the commenter (2355) supports the use of corn oil extract, a
byproduct from the ethanol process as a feedstock for biofuels. The commenter recommends
that the indirect impacts for the corn oil extract be minimal compared to the indirect land use
change impacts attributed to corn for the corn ethanol process. Corn oil is a small percentage of
the syrup from the ethanol process and accounts for 3 to 4% of the total volume of the corn
kernel. In addition, the commenter argues that the corn oil should be seen as a waste stream with
little to no indirect land use change impacts. [[Docket number 2355, p. 2]]
Our Response:
Our final rulemaking includes a pathway for non-food grade corn oil to biodiesel
production. This pathway qualifies for the biomass-based diesel category RINs.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2360
Organization: Archer Daniels Midland Company (ADM)
Comment:
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The commenter (2360.1) noted that EPA's GHG emissions methodology contains a significant
error pertaining to the direct emission calculations for nitrogen. The commenter stated that the
2006 Guidelines for National Greenhouse Gas Inventories by the Intergovernmental Panel on
Climate Change (IPCC) concludes that nitrogen fixed in soil by soybeans should not be
considered a GHG emission. EPA, however, does not incorporate the IPCC's updated nitrogen
findings and thus attributes excess nitrogen emissions to soybean cultivation. This error reduced
the GHG score for soy biodiesel by more than 20 percent and should be corrected. (2360.1, p.4)
Our Response:
The main issue is that because the NzO emission factors used in the proposal were based
on the 1996 IPCC guidance for N20 accounting they were overestimating N20 emissions from
nitrogen fixing crops. As an update in 2006, IPCC guidance was changed such that biological
nitrogen fixation was removed as a direct source of N20 because of the lack of evidence of
significant emissions arising from the fixation process itself. IPCC concluded that the NzO
emissions induced by the growth of legume crops/forages may be estimated solely as a function
of the above-ground and below-ground nitrogen inputs from crop/forage residue. This change
effectively reduces the N20 emissions from nitrogen fixing crops like soybeans and nitrogen
fixing hay from the 1996 to 2006 IPCC guidance.
Therefore, as part of the update to new N20 emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the N20
emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2363
Organization: Ag Processing Inc.
Comment:
The commenter (2363) urges EPA to assume that corn and soybean yield increases more in line
with recent experience rather than long term trends. [[Docket number 2363.1, p. 7]] [[See docket
number 2363.1, p. 2 for further discussion of this issue.]]
Our Response:
While we believe it is most appropriate to use future yields that are consistent with
USDA's agricultural projections, we have also conducted a sensitivity analysis in which we
increase yields of corn and soybean by 25% by 2022. The results of this analysis are included in
Chapter 2 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2365
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Organization: Neste Oil Holding, Inc
Comment:
The commenter (2365.1) urges EPA to proceed with caution in adopting ILUC models , and
more importantly, in using key assumptions which are inputs to the model and which are
obviously critical in determining model results. (2365.1, p.3)
Our Response:
EPA recognizes that it has had to break new scientific ground in developing a lifecycle
methodology as required by EISA. This is why the Agency employed a collaborative,
transparent and science-based approach. EPA took numerous measures to seek public comment
on our approach—including extending the comment period for the proposed rule, holding a two-
day public workshop on the lifecycle methodology, and reaching out to dozens of stakeholders,
including the biodiesel community, through individual meetings, conferences and events. EPA
also initiated an independent peer review of specific areas of our work.
Further, EPA recognizes the state of scientific knowledge continues to evolve in this area.
While the Agency is using its current lifecycle assessments to inform the regulatory
determinations for fuel pathways in this final rule, the Agency is also committing to further
reassess these determinations. As part of this ongoing effort, we will ask for the expert advice of
the National Academy of Sciences as well as other experts. EPA will request that the National
Academy of Sciences over the next two years evaluate the approach taken in this rule, the
underlying science of lifecycle assessment, and in particular indirect land use change, and make
recommendations for subsequent rulemakings on this subject.
We recognize the importance that key variables can have when calculating the indirect
land use change impacts of an increase in renewable fuels. It is for this reason that we have
included a summary of the key assumptions used in the agricultural sector modeling in Chapter 5
of the RIA. As part of the notice and comment process, we have received valuable input on
these key assumptions as well as many other parameters included in our modeling analysis, and
have incorporated the best available data as it becomes available.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2369
Organization: New Generation Biofuels (NGBF)
Comment:
The commenter (2369) states that they did not comment on the methods and details used to
determine the GHG reductions from various fuels and feedstocks, because, in general, ILUC is
not fully developed and many assumptions penalize the biofuel industry. The commenter asks
that careful review and development of ILUC be conducted and that indirect effects of all other
fuels are also included in the calculations. [[Docket number 2369.1, p. 5]]
Our Response:
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EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. However, the Agency has clearly acknowledged that there are
uncertainties associated with these estimates, particularly with regard to indirect land use change
and the use of economic models to project future market interactions. In the final rule, EPA
presents an approach that manages these uncertainties in three ways: (1) getting the best
information possible, (2) performing sensitivity analysis around key factors, and (3) establishing
reasonable ranges of uncertainty and using probability distributions within these ranges in our
threshold assessment.
EPA disagrees that its analysis penalizes the biofuels industry. EPA is simply attempting
to account for all GHG emissions related to the full fuel lifecycle. Domestic renewable fuel
producers may have no direct control over land use changes that occur overseas as a result of
renewable fuel production and use here, but their choice of feedstock can and does influence
oversees activities, and EPA believes it is appropriate to consider the GHG emissions from those
activities in its analyses.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2374
Organization: Amyris Biotechnologies, Inc. (Amyris)
Comment:
The commenter (2374) believes a certification program covering both direct and indirect effects
must be developed allowing prompt verification of improved practices for feedstock and biofuels
production. The addition of a certification program for updating GHG values would promote best
practices in existing biofuels and advanced technologies. [[Docket number 2374.1, p. 2]]
Our Response:
EPA has provided a petition process whereby biofuel producers can request EPA to
evaluate specific technologies or operating processes that distinguish their biofuel production
LCA GHG impacts from those already considered by EPA. These new technologies or operating
processes can then receive an alternative GHG threshold assessment, if appropriate. This
petition process also extends to new feedstocks. Additionally, EPA has indicated in the
preamble its intention to periodically update its analyses to reflect new data and information
including the development of new technologies and feedstock sources.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2390
Organization: Governors' Biofuels Coalition
Comment:
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The commenter (2390.1) believes that EPA's view of net corn use thus land use change for
ethanol production is wrong. Corn used in ethanol plants does not "disappear" as does exported
corn. (2390.1, p.l) (See Docket Number 2390.1, pp.1-2 for more discussion on this issue)
Our Response:
In assessing the impact of increases mandated by EISA, EPA believes it is most
reasonable to assume the impacts would be due to biofuel that would not already appear in the
market (i.e., business as usual volumes). Thus the EISA mandated volume impact would only be
associated with the incremental volume resulting from the mandate.
EPA disagrees with the commentor's interpretation that our analysis assumes corn from
ethanol "disappears". Our agricultural sector modeling takes into account the fact that DCS, a
byproduct of dry-mill corn ethanol, can be used as a feed substitute in place of corn and
soybeans, thereby reducing the need to grow additional acres of corn or soybeans. Additional
details on the DCS assumptions can be found in Chapter 5 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2474
Organization: North Carolina Department of Transportation
Comment:
The commenter (2474) believes that nitrogen fixing in soil was incorrectly included. The
commenter also noted that the energy balance data is out of date, co-product allocations for
glycerin were not incorporated, and global market drivers for feed stocks, are not considered.
The commenter believes that EPA should analyze indirect emissions for all fuels or for none, and
should compare biofuels to the more expensive and higher carbon sources of crude they will be
replacing such as tar sands and heavy crude. The commenter also noted that EPA's production
baseline does not properly account for increasing crop yields and production efficiencies. (2474,
p.l)
Our Response:
The proposal analysis calculated N20 emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in N20 emissions. The proposal
analysis N20 factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating N20 emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
The N20 emission factors used in the proposal overestimated N20 emissions from
nitrogen fixing crops, because they were based on the 1996 IPCC guidance for N20 accounting.
As an update in 2006, IPCC guidance was changed such that biological nitrogen fixation was
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removed as a direct source of N20 because of the lack of evidence of significant emissions
arising from the fixation process itself. IPCC concluded that the N20 emissions induced by the
growth of legume crops/forages may be estimated solely as a function of the above-ground and
below-ground nitrogen inputs from crop/forage residue. This change effectively reduces the
N20 emissions from nitrogen fixing crops like soybeans and nitrogen fixing hay from the 1996
to 2006 IPCC guidance.
Therefore, as part of the update to new N20 emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the N20
emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
Glycerin is a co-product of biodiesel production. Our proposal analysis did not assume
any credit for this glycerin product. The assumption for the proposal was that by 2022 the
market for glycerin would be saturated due to the large increase in biodiesel production in both
the U.S. and abroad and the glycerin would therefore be a waste product. We agree with the
comments that we should be factoring in a co-product credit for glycerin as there would be some
valuable use for this product in the market. Therefore, we have included for the final rule
analysis that glycerin would displace residual oil as a fuel source on an energy equivalent basis.
This is based on the assumption that the glycerin market would still be saturated in 2022 and that
glycerin produced from biodiesel would not displace any additional petroleum glycerin
production. However, the biodiesel glycerin would not be a waste and a low value use would be
to use the glycerin as a fuel source. The fuel source assumed to be replaced by the glycerin is
residual oil. This inclusion of a co-product credit for glycerin reduces the overall GHG impact
of biodiesel compared to the proposal analysis.
The EISA mandates setting up fuel GHG thresholds do not require the EPA to do site
specific GHG analysis but rather determine for specific fuel pathways if they meet the thresholds
for the different fuel categories. Therefore, we have developed an average energy use value for
biodiesel production. As part of the final rule we updated the energy use assumptions for
biodiesel production to be in line with the latest energy balance reports from USDA and the
University of Idaho. Therefore, the final rule assumes lower energy use for biodiesel production
compared to the proposal analysis.
Overall with all the changes made to the modeling since the proposal, soybean biodiesel
qualifies under the biomass based diesel standard with a 57% reduction in GHG emissions.
EPA disagrees with the comment on petroleum indirect emissions. The reason the
system boundaries used for threshold assessment in the proposed rule did not include indirect
emissions from petroleum production was to be consistent with the goals and scope of the
analysis as defined by the Energy Independence and Security Act (EISA).
The text of EISA specifies that the lifecycle threshold analysis for the different renewable
fuel categories be compared to baseline lifecycle greenhouse gas emissions. EISA defines
baseline lifecycle GHG emissions as:
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The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2490
Organization: Sapphire Energy
Comment:
The commenter (2490) believes EPA should consider C02 as a feedstock in its lifecycle analysis.
The commenter recommends that EPA's methodology for undertaking lifecycle analysis of
biofuels most notably photosynthetic algae-base fuels - specifically account for the use of
industrial-source C02 as a feedstock. [[Docket number 2490.1, pp. 5-6]] [[See docket number
2490.1, pp. 5-6 for further discussion of this recommendation.]]
Our Response:
EPA's lifeycle assessment does take into account the uptake of C02 that will occur as
part of the production of biofuel feedstock.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2495
Organization: GROWMARK, Inc.
Comment:
The commenter (2495) noted that current corn production data and trends are very important to a
model system. American agriculture is producing an increasing amount of corn. As agriculture
continues its efficiency producing more corn per acre while maximizing the use of fertilizer and
land, the commenter continues to see efficiency gains in ethanol production systems.
Advancement within ethanol production plants are also occurring to assist companies with
increasing their overall operational efficiency. Larger crop outputs on a similar amount of
agricultural land in the U.S. allows for increased food, fiber and fuel resources for the U.S. and
other countries. This approach helps to meet our national objectives for renewable products.
(2495, p.2)
Our Response:
We do consider in our analysis the increasing crop yields and production efficiencies
over time. In addition, we have also analyzed as part of this rulemaking a high yield case as a
sensitivity analysis. This does not change the fact that any change in biofuel volumes for
whatever reason compared to a case without them would still have impacts. As was done for the
proposal, to quantify the lifecycle GHG emissions associated with the increase in renewable fuel
mandated by EISA, we compared the differences in total GHG emissions between two future
volume scenarios in our economic models (both of which take into account these advances).
Simply assuming that increases in future yields and technology will be sufficient to meet U.S.
food, fiber, and fuel requirements ignores the secondary impacts of diverting some of these
domestic feedstocks from international markets. Our interpretation of EISA requires us to take
into consideration these significant indirect impacts of increasing renewable fuel volumes.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2508
Organization: Environmental Working Group (EWG)
Comment:
The commenter (2508) is concerned about EPA's current approach of using production of 12.4
billion gallons of corn-ethanol as the baseline for simulating the effect of increasing production
to 15 billion gallons. The picture is much worse for corn-ethanol if the baseline assumes a lower
level of corn-ethanol production as the baseline. (2508, p.3)
Our Response:
In assessing the impact of increases mandated by EISA, EPA believes it is most
reasonable to assume the impacts would be due to biofuel that would not already appear in the
market (i.e., business as usual volumes). Thus the EISA mandated volume impact would only be
associated with the incremental volume resulting from the mandate.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2508
Organization: Environmental Working Group (EWG)
Comment:
The commenter is concerned that the current approach does not take into consideration
variability in crop production. The commenter believes that EPA should employ a safety valve -
cut back on mandates when indicators of market stress, such as the stocks-to-use ratios, season
average price predictions, or futures prices of commodities used as biofuel feedstocks, point to
reduced supplies, increased demands, or general tightness in markets that would exacerbate
pressure to convert additional land. The commenter also recommends that EPA include a
measure of variability when estimating life-cycle GHG emissions instead of relying on baselines
that have no stochastic component. (2508, p.3)
Our Response:
EPA recognizes that under various circumstances there may be a variety of burdens that
would make satisfying the renewable fuel requirements difficult. There are waiver provisions
and methods in place as part of the program that organizations may utilize if this is the case. For
details on these provisions, please refer to the Preamble and RIA.
EPA also recognizes that there may be some variability in the results of the analysis, and
as such our analysis for the final rulemaking includes data validation and quantitative uncertainty
assessment regarding the types of land affected, and the resulting GHG emissions impacts. For
more details about the updates in our analysis see Section V of the preamble.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2508
Organization: Environmental Working Group (EWG)
Comment:
The commenter is also concerned that EPA's current model allows consumption (of grain and
meat) to decline in order to make room for corn-ethanol production, particularly in developing
nations that are least able to cope with increased food prices. The commenter recommends that
EPA consider estimating biofuel GHG emissions holding global food consumption levels
constant, or even allowing for growth to meet projections of increased demand for food
associated with projected population and/or income growth. (2508, p.3)
Our Response:
The FAPRI model estimates that world food consumption does, indeed, decrease due to
commodity price increases that result from increased demand for renewable fuels. However, the
analysis only analyzes reponses due to the increase demand for renewable fuel. The only factors
held constant in the analysis are those that adhere to proper laws and regulations in place, and to
scientifically-based assumptions. By allowing world food consumption to be affected by
changes in demand for renewable fuel as determined by the FAPRI economic model, EPA is
better able to analyze effects specifically due to increase biofuel production.
For a full discussion of world food consumption, as well as effects on major areas of food
consumption (e.g., grains, oilseeds, etc.), please refer the RIA and the FAPRI model
documentation on the docket.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2510
Organization: Iowa Renewable Energy, LLC
Comment:
The commenter (2510) states that according to the current energy use of their plants, their usage
is approximately 18% lower than for soy biodiesel and approximately 13 to 14% lower for
animal fats than the data used by EPA. [[Docket number 2510.1, p. 3]]
The commenter adds that biodiesel has the highest energy balance of any transportation fuel
produced in the U.S. The latest report from the University of Idaho shows energy used to
produce soy biodiesel compared to petroleum is 4.56:1. This is due to increased efficiencies in
biodiesel production, soy crushing, farming practices, and increases in soybean yields. In 1998,
the energy balance was 3.2:1. By 2015, the balance is projected to reach 5.44:1. [[Docket number
2510.1, p. 4]]
Our Response:
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As part of the final rule we updated the energy use assumptions for biodiesel production
to be in line with the latest energy balance reports including the University of Idaho Study.
Therefore, the final rule assumes lower energy use for biodiesel production compared to the
proposal analysis. The EISA mandates for assessing pathways for meeting GHG thresholds do
not require the EPA to do site specific GHG analysis. EPA has established pathway compliance
based on its assessments of nation-wide performance. However, in the final rule, EPA also
established a petition process whereby biofuel producers can petition the Agency for a change in
thereshold assessment (a change in D code) if its production process differs from those modeled.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2512
Organization: Conservation International
Comment:
The commenter noted that it is unclear whether the FASOM mode incorporates changes in
emissions from possible changes in feed mixtures. The commenter believes that this should be
clarified. (2512.1, pp.8-9)
The commenter questions if productivity increases in other countries are stratified by country/
groups of countries? (2512.1, p.9) (See Docket Number 2512.1, p.9 for more discussion on this
issue)
Our Response:
The EPA modeling does take into account the changes in enteric fermentation emissions
from livestock with increased amounts of DCS used as feed.
The technological rates of progress for crop yields in the FAPRI model are based on the
best available data. The sources for this data include the F.O Lichts Online Database; the Food
and Agricultural Organization (FAO) of the United Nations (FAOSTAT Online); and the
Production, Supply and Distribution View (PS&D) of the USDA. For countries that do not have
sufficient sources of historical data, FAPRI assumes that technological rates of progress are
similar to those nations in similar geographic regions. Additional detail on the data sources for
the FAPRI model, and how it operates can be found in RIA and the technical report on the
FAPRI model that can be found in the docket.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2524
Organization: South Dakota State University
Comment:
The commenters (2524.1) noted that the impacts of ethanol production on food production in
Iowa, Nebraska, Minnesota, and South Dakota is extremely complex and suggested that by
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linking ethanol and livestock production systems: 1) ethanol production could have neutral
impact on the region's ability to produce food; 2) the profitability and energy efficiency of
agriculture could be improved and the release of greenhouse gases would likely be reduced; and
4) the linkages between food, ethanol, and land-use changes in the Africa and South America are
tenuous at best. (2524.1, p.l)
Our Response:
The econometric models used by EPA consider the inter-relations between biofuel
feedstock production and production of food and feed. They include projected improvements in
agriculture practices nationwide in the U.S. as well as in other countries. Since the proposal,
significant enhancements in modeling including improved data internationally have been
included. These enhancements are detailed in the preamble and in the RIA. As noted by the
commenters, EPA's LCA takes into account continued improvements in agricultural practices
and account for co-product benefits (e.g., from DCS). While we did an impact assessment of the
potential impact of biofuel production on farm income, this assessment did not necessarily
consider all the farm profit potentials identified by the comments. However, this should not
impact our primary analyses of GHG impacts. The factors impacting GHG performance as
indentified by the comments (e.g., impact on soil carbon; crop yields per acre) were considered
in our evaluation.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2524
Organization: South Dakota State University
Comment:
The commenters noted that primary arguments used against biofuel production are that more
energy is required to produce the product than it produces. This argument may have been true 30
years ago. However, just like other industries, agriculture has made huge improvements over the
past decades. The commenters also noted that findings reported by the United States Department
of Energy confirm that agriculture energy efficiency is improving and that even when corn grain
is converted into ethanol, the amount of energy produced exceed input energy requirement.
(2524.1, p.2)
Our Response:
Regarding energy required to produce corn ethanol, EPA has evaluated this as part of our
lifecycle assessment, including all inputs for feedstock production, harvesting, collection,
transport, conversion to biofuel (including co-product benefits) and transport to point of final
use. These impacts are documented in the preamble and more extensively in the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2532
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Organization: BioEnergy Producers Association
Comment:
The commenter (2532) believes that for advanced biofuels, when produced from organic wastes,
these offsets include reduced methane emissions from landfills, five times greater energy
recovery than landfill biogas, reduced emissions from waste transport, zero impact on direct or
indirect land use change, elimination of the need to utilize food derived resources as feedstocks,
massively reducing the need to devote 55 million acres to the growing of cellulosic feedstocks,
with the attendant environmental expenditure of manpower, water resources, harvesting and
transport. And most importantly, the reduced 02 emissions from automobiles, estimated at 86%
or more, when waste-derived biofuels are compared with an energy equivalent amount of
gasoline. Such consideration would more appropriately align the EPA with other existing and
emerging national policy, whose primary objectives are energy independence. [[Docket number
2532, p. 2]]
Our Response:
For the final rule, EPA has analyzed biofuel pathways for using waste material including
organic waste material that would otherwise be placed in landfills. We have determined such
organic waste to comply with the renewable fuel definition and to meet GHG performance
thresholds. This determination and the associated analyses are documented in the preamble
(Section II) and in additional detail in the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2549
Organization: Triton Energy LLC
Comment:
The commenter believes that the EPA methodology contains a major error pertaining to the
direct emission calculations for nitrogen in soybean production. EPA also did not account for
glycerin as a co-product or for those that may use new advanced processes to convert this into
finished goods product and not scrap the glycerin. (2549.1, p.2)
The commenter noted that that corrected values for nitrogen emissions, co-products, and the
energy balance from biodiesel/renewable diesel production would result in soy biodiesel GHG
emissions that are over 60% better than petroleum, easily exceeding the 50% GHG threshold
called for under the RFS2 biomass-based diesel schedule. An appropriate indirect land use
analysis would further enhance soy renewable diesel value relative to petroleum diesel. (2549.1,
p.3)
The commenter believes that the GHG calculations must account for improved agriculture yields
and efficiency. (2549.1, p.3)
Our Response:
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The proposal analysis calculated NzO emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in NzO emissions. The proposal
analysis N20 factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating NzO emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
The N20 emission factors used in the proposal overestimated N20 emissions from
nitrogen fixing crops, because they were based on the 1996 IPCC guidance for NzO accounting.
As an update in 2006, IPCC guidance was changed such that biological nitrogen fixation was
removed as a direct source of NzO because of the lack of evidence of significant emissions
arising from the fixation process itself. IPCC concluded that the N20 emissions induced by the
growth of legume crops/forages may be estimated solely as a function of the above-ground and
below-ground nitrogen inputs from crop/forage residue. This change effectively reduces the
NzO emissions from nitrogen fixing crops like soybeans and nitrogen fixing hay from the 1996
to 2006 IPCC guidance.
Therefore, as part of the update to new N20 emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the N20
emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
Glycerin is a co-product of biodiesel production. Our proposal analysis did not assume
any credit for this glycerin product. The assumption for the proposal was that by 2022 the
market for glycerin would be saturated due to the large increase in biodiesel production in both
the U.S. and abroad and the glycerin would therefore be a waste product. We agree with the
comments that we should be factoring in a co-product credit for glycerin as there would be some
valuable use for this product in the market. Therefore, we have included for the final rule
analysis that glycerin would displace residual oil as a fuel source on an energy equivalent basis.
This is based on the assumption that the glycerin market would still be saturated in 2022 and that
glycerin produced from biodiesel would not displace any additional petroleum glycerin
production. However, the biodiesel glycerin would not be a waste and a low value use would be
to use the glycerin as a fuel source. The fuel source assumed to be replaced by the glycerin is
residual oil. This inclusion of a co-product credit for glycerin reduces the overall GHG impact
of biodiesel compared to the proposal analysis.
The EISA mandates setting up fuel GHG thresholds do not require the EPA to do site
specific GHG analysis but rather determine for specific fuel pathways if they meet the thresholds
for the different fuel categories. Therefore, we have developed an average energy use value for
biodiesel production. As part of the final rule we updated the energy use assumptions for
biodiesel production to be in line with the latest energy balance reports from USDA and the
University of Idaho. Therefore, the final rule assumes lower energy use for biodiesel production
compared to the proposal analysis.
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Overall with all the changes made to the modeling since the proposal, soybean biodiesel
qualifies under the biomass based diesel standard with a 57% reduction in GHG emissions.
We do consider in our analysis the increasing crop yields and production efficiencies
over time. In addition, we have also analyzed as part of this rulemaking a high yield case as a
sensitivity analysis. Furthermore, for this final rulemaking analysis, we have also taken into
account increases in yields that may occur as the price of that commodity increases (price-
induced yields).
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2614
Organization: Citizen (sample letter representing 364 comment letters received from
mass comment campaign sponsored by an anonymous organization)
Comment:
The commenter (2614) notes that, "EPA should assume the increased demand for ethanol and
soy biodiesel will mean the release of more CRP land. Recognizing that recent corn and soybean
yields are increasing at a greater rate than the long-term trend is important in your rulemaking
process. Because what this means, is that U.S. producers will be able to meet the needs of the
U.S. renewable fuels industry if not hampered by unnecessary regulation." (2614 p. 1)
Document No.: EPA-HQ-OAR-2005-0161-2615
Organization: Citizen (sample comment letter representing 9 comment letters received
from mass comment campaign sponsored by an anonymous organization)
Comment:
The commenter (2615) notes that EPA should, "Assume that CRP land will be released in
response to a long term change in demand for ethanol and soy biodiesel [, and that]... Corn and
soybean yield increases more in line with recent experience rather than long term trends." (2615
p.D
Our Response:
Based on coordination with USDA, EPA modeled assuming land in CRP will be
supported by USDA and therefore would not be available for biofuel feedstock production.
For the final rule, EPA has updated its assessment of crop yields both domestically and
internationally. We have calculated lifecycle emission performance assuming both base yields
derived from projecting into the future longer term historical trends and also assuming a marked
increase in future yields based on industry and other comments.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2363
Organization: Ag Processing Inc.
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Comment:
The commenter (2363) argues that it is well known that removal of crop residue will reduce soil
organic carbon and thus increase atmospheric COz loading, yet EPA chose to ignore this basic
element of soil and climate change science. [[Docket number 2363.1, p. 5]] [[See docket number
2363.1, pp. 5-7 for further discussion of this issue.]]
Our Response:
The modeling for this rule does not directly account for changes in organic soil carbon
content due to residue removal and this impact on C02 loading. The modeling does account for
changes in carbon due to tillage practices, which can modify the effect of residue removal on soil
carbon content. EPA does, however, recognize that this is an area for further study.
7.2.5.2 Land Use Changes
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1989
Organization: Iowa Farm Bureau Federation
Comment:
The uncertainty inherent in EPA's analysis is clearly illustrated with the review of a few basic
facts. For example, those that support the concept of ILU changes claim that ethanol production
in the United States affects the rate of deforestation. If that is the case, then why has Brazilian
deforestation decreased by over 50 percent in the same period that U.S. ethanol production has
increased by more than 90 percent. Furthermore, it has also been reported that the soybean price
is negatively 53 percent correlated with the rate of Brazilian deforestation. (Since 2004, the
negative correlation between U.S. soybean prices and Brazilian deforestation has increased to 70
percent). The argument that the rate of deforestation may have been even slower if there was no
increase in U.S. ethanol production is only conjecture and not supported by the data. If anything,
the correlation data strongly suggests that increases in U.S. ethanol production actually results in
decreases in Brazilian deforestation.
(3) Currently, there is nearly no tested and validated science for quantification of ILU. The
models in use rely on correlations that have been postulated rather than on validated causations.
As such, these models are in an infant and unreliable stage. However, despite the short comings
of the science, the proposed rule attempts to comply with EISA by including some adjustments
to specific forms of ethanol for indirect land use changes.
Document No.: EPA-HQ-OAR-2005-0161-1989
Organization: Iowa Farm Bureau Federation
Comment:
Dr. Bruce Babcock at the Center for Agricultural and Rural Development (CARD), Iowa State
University, in testimony on May 6, 2009, before the Subcommittee on Conservation, Credit,
Energy, and Research, U.S. House Committee On Agriculture, concluded that while our ability
to estimate changes in agricultural land use in the U.S. due to a change in biofuels policy may be
reasonably good, our ability to estimate land use changes overseas is not. Our ability to
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accurately measure the extent of land use changes outside the U.S. is limited because of a lack of
reliable data and a lack of knowledge about what is actually going on in other countries.
Babcock testified that CARD is investing heavily in improving its understanding of Brazilian
agriculture to better enable the EPA to conduct its analysis. They anticipate replicating this effort
for other major producing countries, too. Without this kind of hard labor and data-intensive
work, it is impossible to conclude with any certainty, Babcock said, the extent to which increased
emissions from land conversion offset the decrease in emissions from using a renewable fuel in
our transportation sector.
The recent EPA peer review panel also reaffirmed many of the concerns the IFBF has about the
EPA's proposed rule and rulemaking process. The panel expressed concern about using these
incomplete and unreliable models to measure ILU changes and indicated that they didn't have
enough time to review this convoluted and complicated proposal. We are also concerned that
there is no evidence that the U.S. Department of Agriculture or any other federal agencies with
expertise on these issues were included in the peer review process. This is exactly why the House
of Representatives voted in the climate change bill to limit EPA's ability to implement
international ILU provisions in the RFS-2.
We respectively disagree with the EPA assessment "...that there were no direct and substantial
[conflict of interest] or appearance of impartiality issues that would have prevented a peer
reviewer's comments from being considered by EPA." Dr. Timothy Searchinger, for instance,
has been an outspoken critic of biofuels and is clearly not impartial. His inclusion on the peer
review panel casts serious doubt on the sincerity of EPA in wanting an unbiased, critical review
of the issues associated with life-cycle analysis and the use of models to assess causality.
In addition, a glaring weakness of the approach used is the lack of linkage of the driving force of
petroleum prices on input prices for agricultural products and the resulting causalities that exist
between petroleum prices and food prices. Increasing petroleum prices result in increased prices
for crops and food commodities, and thus, a significant portion of the land-use change is
attributable to the underlying change in energy prices, not just the changes that occur because of
linkages of biofuels production to energy policy.
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
1. The commenter (2329.1) believes that there is is insufficient science to include international
indirect land use changes. EPA's methodology for assessing indirect land use changes is new
and untested, and simply fails to rise to the level of scientific integrity necessary to support
regulatory actions. There are currently no accepted scientific methods for estimating indirect
land use change associated with biofuel production, and EPA's use of various models, in
particular the FAPRI model, is not consistent with accepted standards for lifecycle analysis. The
commenter believes that EPA should not include international indirect land use changes in its
lifecycle analysis. Even though the statute requires EPA to consider significant indirect
emissions when calculating a renewable fuel's emission profile, the statute does not require EPA
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to rely on faulty data and to make unrealistic assumptions. (2329.1, p. 25) [[See Docket Number
2329.1, pp.25-27 for a detailed discussion of this issue]]
The commenter also believes that EPA's inclusion of indirect emissions from international land
use changes in its lifecycle analysis goes beyond the statutory language and intent of Congress.
(2329.1, p.35) [[See Docket Number 2329.1, pp.35-39 for a more detailed discussion of this
issue]]
Our Response:
EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. EPA took numerous measures to seek public comment on our
approach—including extending the comment period for the proposed rule, holding a two-day
public workshop on the lifecycle methodology, and reaching out to dozens of stakeholders,
through individual meetings, conferences and events. EPA also initiated an independent
scientific peer review of specific areas of our work.
EPA has clearly acknowledged that there are uncertainties associated with these
estimates-particularly with regard to indirect land use change~and has sought to develop an
approach that manages these uncertainties. However, EPA rejects the view that the modeling
relied upon in the final rule is too uncertain to provide a credible and reasonable scientific basis
for determining whether the aggregate lifecycle emissions exceed the thresholds. If the
international land use impacts were so uncertain that their impact on lifecycle GHG emissions
could not be adequately determined, this does not mean EPA could assume the international land
use change emissions are zero. High uncertainty would not mean that emissions are small and
can be ignored; rather it could mean that we could not tell whether they are large or small. If
high uncertainty meant that EPA were not able to determine that indirect emissions from
international land use change are small enough that the total lifecycle emissions meet the
threshold, then that fuel could not be determined to meet the GHG thresholds of EISA and the
fuel would necessarily have to be excluded from the program. EPA has chosen an approach that
includes biofuels with a significant international land use impact in this program.
As to the comments about the statutory language and intent of Congress, EPA believes
that a complete analysis of the aggregate GHG emissions related to the full lifecycle of
renewable fuels includes the significant indirect emissions from international land use change
that are predicted to result from increased domestic use of agricultural feedstocks to produce
renewable fuel. The statute specifically directs EPA to include in its analyses significant indirect
emissions such as significant emissions from land use changes. EPA has not ignored either the
terms "significant" or "life cycle." It is clear from EPA's assessments that the modeled indirect
emissions from land use changes are "significant" in terms of their relationship to total GHG
emissions for given fuel pathways. Therefore, they are appropriately considered in the total
GHG emissions profile for the fuels in question. EPA has not ignored the term "life cycle." The
entire approach used by EPA is directed to fully analyzing emissions related to the complete
lifecycle of renewable and baseline fuels.
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Although the definition of lifecycle greenhouse gas emissions in Section 211 (o) does not
specifically mention international emissions, it would be inconsistent with the text and the intent
of this section of the Act to exclude them. The definition of lifecycle GHG emissions makes it
clear that EPA is to determine the "aggregate" emissions "related to" the "full" fuel lifecycle,
including "all stages of fuel and feedstock production and distribution". EPA is directed to
include both direct emissions and significant indirect emissions, such as significant emissions
from land use changes. A large variety of activities outside the U.S. play a major part in the full
fuel lifecycle of both the baseline fuel (gasoline and diesel fuel used as transportation fuel in
2005) and renewable fuels. For example, several stages of the lifecycle process for gasoline and
diesel can occur overseas, including extraction and delivery of imported crude oil, and for
imported gasoline and diesel products, emissions associated with refining and distribution of the
finished product to the U.S. For imported renewable fuel, all of the emissions associated with
feedstock production and distribution, fuel processing, and delivery of the finished renewable
fuel to the U.S. occur overseas. Whether the direct or indirect emissions occur in the U.S. or
overseas does not change that they are related to the full fuel lifecycle. There is no basis in the
definition to treat direct or indirect emissions that occur overseas different from direct or indirect
emissions that occur in the US. Thus, EPA could not, as a legal matter, ignore those parts of a
fuel lifecycle that occur overseas.
Excluding international impacts means large percentages of GHG emissions would be
ignored. This would take place in a context where the global warming impact of emissions is
irrespective of where the emissions occur. If the purpose of thresholds is to achieve some
reduction in GHG emissions in order to help address climate change, then ignoring emissions
outside our borders interferes with the ability to achieve this objective. Such an approach would
essentially undermine the purpose of the provision, and would be an arbitrary interpretation of
the broadly phrased text used by Congress.
Lastly, EPA believes that including international indirect emissions in EPA's lifecycle
analysis does not exercise regulatory authority over activities that occur solely outside the U.S.,
nor does it raise questions of extra-territorial jurisdiction. EPA's regulatory action involves an
assessment of products either produced in the U.S. or imported into the U.S. EPA is simply
assessing whether the use of these products in the U.S. satisfies requirements under EISA for the
use of designated volumes of renewable fuel, cellulosic biofuel, biomass-based diesel, and
advanced biofuel. Considering international emissions in determining the lifecycle GHG
emissions of the domestically-produced or imported fuel does not change the fact that the actual
regulation of the product involves its use solely inside the U.S.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
2. The commenter believes that EPA relies on questionable studies to claim "potential" impacts
on international land use changes from U.S. biofuel production. The commenter noted that
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EPA's assertion that U.S. biofuel production will have impacts on international land use changes
are largely based on a paper by Timothy Searchinger, et al., entitled Use of U.S. croplands for
biofuels increases greenhouse gases through emissions from land-use change, Science 319:1238-
1240 (2008). The Searchinger paper is based on a theory that use of crops in the United States
for biofuels causes reduced exports, leading other countries to expand their crop production, and
resulting in the clearing of land that is currently unused for agricultural production. The
Searchinger paper is not a lifecycle analysis and is based on flawed assumptions and inadequate
data. (2329.1, p.39) [[See Docket Number 2329.1, pp.39-41 for a detailed discussion of this
issue]]
No margins of error were reported by Searchinger, there was no discussion of the assumptions
utilized and the degree of their validity, and the analysis could not be replicated due to a lack of
transparency. The commenter noted the following flawed assumptions in Searcher et al.: (a)
inclusion of high estimates of ethanol production by 2015 all assumed to be derived from corn
(double that required by the EISA); (b) failure to incorporate technological advances in the
industry; (c) questionable assumptions regarding types of land converted; (d) reliance on satellite
data that has misclassification problems (on the order of 54.55% in identifying cropland) and that
was based on a time period where land use changes were driven by rapid industrial growth and
were subject to little or no regulatory control; (e) inclusion of flawed assumptions regarding crop
yields and distiller grain displacement; and (f) reliance on commodity prices that were much
lower than today. The Searchinger paper fails to properly account for increased corn yields,
which reduce the need for land use changes.
Our Response:
EPA has made the GHG threshold determinations based on a methodology that includes
an analysis of the full lifecycle, including significant emissions related to international land-use
change. EPA has used the best available models for this purpose, and has incorporated many
modifications to its proposed approach based on comments from the public and peer reviewers
and developing science. EPA has also quantified the uncertainty associated with significant
components of its analyses, including important factors affecting GHG emissions associated with
international land use change. The Agency has updated and refined its modeling approach since
proposal in several important ways, and EPA is confident that its modeling of GHG emissions
associated with international land use is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations. Based on the Agency's
analyses, EPA has determined that biodiesel and renewable diesel from soy oil or waste oils, fats
and greases will exceed the 50% threshold for biomass-based diesel compared to the 2005
petroleum diesel baseline.
EPA's analysis for this rulemaking is entirely independent of the Searchinger et al. study
cited by the commenter. The most significant similarity between our analysis and the work done
by Searchinger et al. is that we also used the FAPRI modeling framework to simulate
international responses to biofuel policies. However, our modeling approach is substantively
different and we have incorporated many modifications to our approach based on comments
from the public and peer reviewers and developing science.
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The updates we have incorporated address all of the specific criticisms of Searchinger et
al. cited by the commenter. Searchinger et al. analyzed an arbitrary increase in biofuel
production, while we specifically analyzed the impacts of the revisions to the RFS specified in
EISA. Based the advice and input of a broad group of stakeholders we extensively updated the
FAPRI model with the best available data and information about agricultural and food markets.
For example, our modeling includes a more detailed representation of Brazil and price-induced
yield responses. We also include many technological advances over time, such as corn and
soybean yields and co-product efficiency. We use more recent and higher resolution satellite
data, and we model the interactions between pasture and cropland. Furthermore, our analysis
includes data validation and quantitative uncertainty assessment regarding the types of land
affected, and the resulting GHG emissions impacts. For more details about the updates in our
analysis see Section V of the preamble.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
3. The commenter also noted that EPA's analysis does not account for the fact that U.S. biofuel
production actually promotes sustainable agriculture, which can reduce land use impacts. The
commenter also believes that EPA's analysis fails to adequately account for the other, more
likely causes of international land use changes. (2329.1, pp.41&42) [[See Docket Number
2329.1, pp.41-48 for a detailed discussion on this issue]]
Our Response:
To the maximum extent possible, our agricultural sector modeling does capture
incentives for promoting certain farming practices that may be encouraged by the increase in
demand for renewable fuels. For example, the FASOM model captures incentives for farmers to
switch to reduced tilling practices as more stover is harvested for cellulosic ethanol production.
In addition, the FAPRI model now takes into account price induced yield changes, which
accounts for the fact that farmers will increase yields on existing lands rather than expand onto
new lands as a result of higher commodity prices.
As described in the preamble and RIA, we recognize there are many social, economic,
and political factors that contribute to land use change, such as urbanization and increasing
populations. We have taken into account the impact of future projections of population,
urbanization, income, and other macroeconomic conditions in our reference case. As a standard
economic practice, we are assuming all of those other factors are held constant in both our
reference case and our policy case. Our analysis therefore focuses only on the changes in land
use that result from an increase in the renewable fuel volumes required by the RFS2.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
With regards to the Winrock data, the commenter believes that EPA's reliance on Winrock
satellite data from the 2001-2004 timeframe renders the entire analysis arbitrary in that EPA is
suggesting that land use changes that occurred for any reason in the countries of interest serve as
an appropriate proxy for land use changes resulting from U.S. biofuel expansion under the RFS.
The Winrock data cannot provide any causal connection between the land use changes and U.S.
biofuel production. The analysis of the Winrock data also shows a high error rate. The
commenter believes that with no attempt to verify the land use changes reported in the Winrock
report, and with very questionable changes reported over a three-year period, the Winrock data is
not suitable for use in policy assessments. (2329.1, pp.48-51) [[See Docket Number 2329.1,
pp.48-51 for a detailed discussion of this issue]]
Our Response:
The proposed rule included a detailed description of the FAPRI/Winrock approach used
to determine the type of land affected internationally. This approach uses satellite data depicting
recent land conversion trends in conjunction with economic projections from the FAPRI model
(an economic model of global agricultural markets) to determine the type of land converted
internationally. In the proposed rule we described areas of uncertainty in this approach,
illustrated the uncertainty with sensitivity analyses, and discussed other potential approaches for
this analysis. To encourage expert and stakeholder feedback, EPA specifically invited comment
on this issue, held public hearings and workshops, and sponsored an independent peer-review, all
of which specifically highlighted this part of our analysis for feedback. While there were a wide
range of views expressed in these forums, the feedback received by the Agency generally
supported the FAPRI/Winrock approach as appropriate for this analysis. For example, all five
experts that peer reviewed EPA's use of satellite imagery agreed that it is scientifically justifiable
to use historic remote sensing data in conjunction with agricultural sector models to evaluate and
project land use change emissions associated with biofuel production. Additionally, the peer
reviewers and public commenters highlighted problematic areas and suggested revisions to
improve our analysis. In preamble Section V, we describe the key revisions that were
implemented which have significantly improved our analysis based on the feedback received.
As discussed above, all five of the expert peer reviewers that reviewed our use of satellite
imagery for this analysis agreed that our general approach was scientifically justifiable.
However, all of the peer reviewers qualified that statement by describing relevant uncertainties
and highlighting revisions that would improve our analysis. Some of the public commenters
supported EPA's use of satellite imagery, while other expressed concern. In general, both sets of
public commenters—those in favor and opposed—outlined the same criticisms and suggestions
as the expert peer reviewers. Among the many valuable suggestions for satellite data analysis
provided in the expert peer reviews and public comments, several major recommendations
emerged: EPA should use the most recent satellite data set that covers a period of at least 5 years;
EPA should use higher resolution satellite imagery; EPA's analysis should consider a wider
range of land categories; EPA should improve it's analysis of the interaction between cropland,
pasture and unused or underutilized land; and EPA's analysis should include thorough data
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validation and a full assessment of uncertainty. In preamble Section V, we describe these and
other recommendations and how we addressed each of them to improve our analysis. Based on
the peer reviewers agreement that our general approach is scientifically justifiable, and in light of
the significant improvements made, we think that our approach represents the best available
analysis of the types of land affected internationally.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter also believes that EPA's approach fails to adequately account for corn yields and
role of DDG in maintaining or growing exports, resulting in less need for land use changes.
(2329.1, p.51) [[See Docket Number 2329.1, pp.51-52 for a detailed discussion of this issue]]
Our Response:
For the final rule, EPA has updated its assessment of crop yields both domestically and
internationally. We have calculated lifecycle emission performance assuming both base yields
derived from projecting into the future longer term historical trends and also assuming a marked
increase in future yields based on industry and other comments
Final rule analyses also have updated our assessment of the use of DDG and its impact on
land use.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter believes that EPA failed to consider emissions from direct land use changes
associated with petroleum exploration and production. EPA also has failed to consider indirect
emissions of baseline gasoline. (2329.1, pp.53-55) [[See Docket Number 2329.1, pp.53-55 for a
detailed discussion of these issues]]
Our Response:
For the final rule, we performed an estimate of land use change emissions associated with
oil extraction and production to determine if the value was significant enough to be included in
our petroleum baseline calculation. As oil sands production incurs a greater degree of land use
change versus conventional crude oil production, we made an estimate of the emissions from the
conversion of Alberta forest for oil sands production. Using literature values, we found that land
use change emissions for oil sands were negligible compared to the total well-to-tank values and
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did not change the overall petroleum baseline values. A more complete discussion of our
analysis can be found in Chapter 2.5.7 of the RIA.
The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
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Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter believes that the following corrections to its analysis:
-The assumptions used by EPA in its FASOM and FAPRI modeling regarding corn yields need
to be increased substantially;
-The models used by EPA do not include correct U.S. land inventories, which forces the
modeling framework to immediately "Look" overseas for land to convert;
-CRP land should not be limited to 32 million acres; and,
-EPA did not properly account for pasture intensification in Brazil. [[See Docket Number
2329.1, pp.57-60 for a detailed discussion of these issues]]
Our Response:
For the final rule, EPA has updated its assessment of crop yields both domestically and
internationally. We have calculated lifecycle emission performance assuming both base yields
derived from projecting into the future longer term historical trends and also assuming a marked
increase in future yields based on industry and other comments.
EPA's analysis for the proposal and for the final rulemaking shows changes in both
domestic and international cropland production in response to the increased demand for
renewable fuels. For the final rulemaking analysis, the FASOM model includes both the forestry
and agriculture sector models, and dynamically interact with one another via price changes and
competition for land (amongst other variables). In addition, the FASOM model has been
updated to account for additional land classes in the United States, based on USDA NASS data.
This includes cropland pasture, forest pasture, forestland, rangeland, developed land, and acres
enrolled in the Conservation Reserve Program. Details on changes in land use in the U.S., and
the updates to the FASOM model are discussed in the Preamble, the RIA, and the technical
report for the FASOM model in the docket.
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Based on coordination with USDA, EPA modeled assuming land in CRP will be
supported by USDA and therefore would not be available for biofuel feedstock production.
As explained in preamble Section V, one of the major changes made to the FAPRI model
between the NPRM and FRM includes the more detailed representation of Brazil through a new
integrated module. The Brazil module was developed by Iowa State with input from Brazilian
agricultural sector experts and we believe it is an improvement over the approach used in the
proposal. The new Brazil module also explicitly accounts for changes in pasture acres, therefore
accounting for the competition between crop and pasture acres. Furthermore, the Brazil module
explicitly models livestock intensification, the practice of increasing the number of heads of
cattle per acre of land in response to higher commodity prices or increased demand for land.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that EPA's assumptions regarding carbon sequestration are
flawed. EPA should revise its 80-year assumption for the final rule. EPA should also be using
the same average age for carbon sequestration and for developing the emission factors for forest
conversion. (2329.1, p.60)
The commenter noted that ethanol facilities have taken great strides in addressing GHG
emissions, including carbon capture and sequestration projects, which are not reflected in EPA's
pathways. EPA should allow facilities to submit a facility specific analysis in order for the
facility to take advantage of the measures they are taking to reduce their overall carbon footprint.
(2329.1, p. 99)
Our Response:
In the proposed rule, to estimate annual forgone forest sequestration, we used IPCC
default data for the growth rates of forests greater than 20 years old. The expert peer reviewers
noted that these estimates could be refined with more detailed information from the scientific
literature. Many of the public commenters were also concerned that EPA's approach
overestimated foregone sequestration because it did not adequately account for natural
disturbances, such as fires and disease. To address these comments, our analysis has been
updated with peer reviewed studies of long-term growth rates for both tropical and temperate
forests. These estimates are based on long-term records (i.e., monitoring stations in old-growth
forests for the tropics and multi-decadal inventory comparisons for the temperate regions) and
reflect all losses/gains over time. These studies show that the old-growth forests in the tropics
that many once assumed to be in "steady state" (i.e., carbon gains equal losses) are in fact still
gaining carbon. In summary, our analysis now includes more conservative foregone forest
sequestration estimates that account for natural gains and losses over time.
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For this final rule, EPA did not have sufficient information to model the likely impacts of
carbon capture and sequestration used in combination with tranditional biofuel facilities.
However, EPA has established a petition process whereby biofuel producers can petition the
Agency for a change in threshold assessment (a different D code) based on differences in
production processes compared to those modeled.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1015
Organization: Renewable Energy Group
Comment:
The commenter (1015) believes the biodiesel industry must be able to utilize every feedstock
available. The EPA should not exclude soybean oil-based biodiesel from RINs eligibility, and
thus RFS2 volume requirements, as a result of indirect land use change formulations for
greenhouse gas emissions. (1015, p.l)
Our Response:
Based on the analysis and approach explained in the final rule, EPA has determined that
biodiesel and renewable diesel from soy oil or waste oils, fats and greases will exceed the 50%
threshold for biomass-based diesel compared to the 2005 petroleum diesel baseline.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
The commenter (1044) supports ILUC of the LCA from the perspective of confinement of use to
the industries of the United States of America-only. The commenter states that EISA does not
give any agency authorization to consider data from foreign countries. However, in the preamble
of the proposed rule the EPA uses the language "interprets" (VI) (B) (2) (a) they must include that
data. The commenter strongly disagrees, especially, when certain vegetable oil feedstocks are
only grown in the United States. The commenter presents three main arguments that the EISA
definition does not state nor imply that EPA has the jurisdictional authority to capture LCA data
outside the boundaries of the U.S. [[Docket number 1044.1, p. 8]] [[See docket number 1044.1,
pp 8-10 for further discussion of this issue.]]
Our Response:
With regard to the legal interpretation of the definition of lifecycle analysis, EPA believes
that a complete analysis of the aggregate GHG emissions related to the full lifecycle of
renewable fuels includes the significant indirect emissions from international land use change
that are predicted to result from increased domestic use of agricultural feedstocks to produce
renewable fuel. The statute specifically directs EPA to include in its analyses significant indirect
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emissions such as significant emissions from land use changes. EPA has not ignored either the
terms "significant" or "life cycle." It is clear from EPA's assessments that the modeled indirect
emissions from land use changes are "significant" in terms of their relationship to total GHG
emissions for given fuel pathways. Therefore, they are appropriately considered in the total
GHG emissions profile for the fuels in question. EPA has not ignored the term "life cycle." The
entire approach used by EPA is directed to fully analyzing emissions related to the complete
lifecycle of renewable and baseline fuels.
Although the definition of lifecycle greenhouse gas emissions in Section 211 (o) does not
specifically mention international emissions, it would be inconsistent with the intent of this
section of the amended Act to exclude them. The definition of lifecycle GHG emissions makes
it clear that EPA is to determine the aggregate emissions related to the "full" fuel lifecycle,
including "all stages of fuel and feedstock production and distribution." Thus, EPA could not, as
a legal matter, ignore those parts of a fuel lifecycle that occur overseas.
Drawing a distinction between GHG emissions that occur inside the U.S. as compared to
emissions that occur outside the U.S. would result in a lifecycle analysis that bears no apparent
relationship to the purpose of this provision. The purpose of the thresholds in EISA is to require
the use of renewable fuels that achieve reductions in GHG emissions compared to the baseline.
Ignoring international emissions, a large part of the GHG emission associated with the different
fuels, would result in a GHG analysis that bears no relationship to the real world emissions
impact of transportation fuels. The baseline would be significantly understated, given the large
amount of imported crude and imported finished gasoline and diesel used in 2005. Likewise, the
emissions estimates for imported renewable fuel would be grossly reduced in comparison to the
aggregate emissions estimates for fuels made domestically with domestically-grown feedstocks,
simply because the impacts of domestically produced fuels occurred within the U.S. EPA does
not believe that Congress intended such a result.
Relative and direct "global warming potentials" are in reference to technical methods of
expressing quantities of greenhouse gases, irrespective of the source of the greenhouse gas.
Lastly, while some feedstocks may only be produced in the United State, their indirect
market effects may impact global agricultural markets. Therefore, international indirect effects
are considered for domestically produced feedstocks as well as foreign-produced feedstocks.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1048
Organization: Macquarie University (Australia) Graduate School of Management
(COPYRIGHT)
Comment:
Commenter[[1048]] finds that EPA shows a lack of transparency and scientific integrity in
Searchinger et al. The commenter describes rules as more ideology than science and seeking to
put biofuels in worst possible light; - Alternative approaches likely to be more fruitful in
genuinely evaluating effects of biofuels grown around the world. A scholarly analysis of the
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keystone of indirect land use study. Commenters feel the framework used was inappropriate in
that it started with assumptions as to diversion of grain to ethanol production in the U.S. but then
extrapolated these to parts of the world, such as sugarcane growing in Brazil, which are actually
(much) more bio-efficient.
Commenters [[1048]] analysis concluded that Searchinger et al. Failed sound scientific standards
on many fronts and that government agencies relying on Searchinger et al. Findings for
evaluating biofuels would be better served by utilizing other controls. The commenter states
"Indirect land use change effects are too diffuse and subject to too many arbitrary assumptions to
be useful for rule-making," stated Professor Mathews. "The use of direct and controllable
measures such as building statements of origin or biofuels into the contracts that regulate the sale
of such commodities would secure better results." The issue is where to draw the boundary for
life cycle analysis and how to address ILUC effects within the boundary. Non-industry experts
are concerned that this is taking regulatory action too far, and the science underpinning such
actions, including the ILUC calculations.
Our Response:
We have analyzed and reviewed the dozens of studies that have been published on
indirect land use change in the last several years. We have been informed by previous work but
our analysis goes beyond anything that has been done currently and improves on much of the
existing work. Through our rulemaking process we have worked with numerous stakeholders
including the scientists who have authored those studies to incorporate the best data and tools
available into the lifecycle analysis.
EPA recognizes that it has had to break new scientific ground in developing a lifecycle
methodology as required by EISA. This is why the Agency employed a collaborative,
transparent and science-based approach. EPA took numerous measures to seek public comment
on our approach—including extending the comment period for the proposed rule, holding a two-
day public workshop on the lifecycle methodology, and reaching out to dozens of stakeholders,
including the biodiesel community, through individual meetings, conferences and events. EPA
also initiated an independent peer review of specific areas of our work.
Further, EPA recognizes the state of scientific knowledge continues to evolve in this area.
While the Agency is using its current lifecycle assessments to inform the regulatory
determinations for fuel pathways in this final rule, the Agency is also committing to further
reassess these determinations. As part of this ongoing effort, we will ask for the expert advice of
the National Academy of Sciences as well as other experts. EPA will request that the National
Academy of Sciences over the next two years evaluate the approach taken in this rule, the
underlying science of lifecycle assessment, and in particular indirect land use change, and make
recommendations for subsequent rulemakings on this subject.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1049
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Organization: Prairie Pride, Inc.
Comment:
The commenter (1049) believes that existing biodiesel facilities meeting the RFS2 requirements
with existing feedstock sources should not be unfairly penalized for assumptions related to
international land use changes. The commenter requests the EPA use its regulatory authority to
exempt existing biodiesel facilities from land use changes. Existing feedstock sources are already
available to meet this production level. As such, no land use changes, and therefore no
significant emissions from those changes, should be with existing production. [[Docket number
1049, p. 1]]
The commenter states that EPA's assumptions regarding international land use changes
associated with U.S. biodiesel production do not reflect historical results and should be revised.
EPA assumes increased U.S. biodiesel production will lead to land conversion in South America;
however, Brazilian soybean acreage has decreased 1.5 million hectares from 2004 through 2008,
a time in which U.S. biodiesel production increased from 25 million to 690 million gallons.
[[Docket number 1049, p. 2]]
The commenter believes that co-product allocations for glycerin need to be incorporated in GHG
calculations, which would dramatically increase biodiesel's GHG benefits compared to
petroleum. [[Docket number 1049, p. 2]]
The commenter adds that EPA's approach should account for increasing soybean yields and
improving farm efficiencies. Soybean hybrids and farming techniques have continuously
improved over the past fifty years and this trend is expected to continue. [[Docket number 1049,
p. 2]]
Our Response:
Based on the analysis and approach explained in the final rule, EPA has determined that
biodiesel and renewable diesel from soy oil or waste oils, fats and greases will exceed the 50%
threshold for biomass-based diesel compared to the 2005 petroleum diesel baseline. This
assessment includes the impacts from international land use changes, which EPA is required to
consider and which EPA has found to be significant for biodiesel production.
Glycerin is a co-product of biodiesel production. Our proposal analysis did not assume
any credit for this glycerin product. The assumption for the proposal was that by 2022 the
market for glycerin would be saturated due to the large increase in biodiesel production in both
the U.S. and abroad and the glycerin would therefore be a waste product. We received a number
of comments that we should be factoring in a co-product credit for glycerin as there would be
some valuable use for this product in the market. Based on these comments we have included
for the final rule analysis that glycerin would displace residual oil as a fuel source on an energy
equivalent basis. This is based on the assumption that the glycerin market would still be
saturated in 2022 and that glycerin produced from biodiesel would not displace any additional
petroleum glycerin production. However, the biodiesel glycerin would not be a waste and a low
value use would be to use the glycerin as a fuel source. The fuel source assumed to be replaced
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by the glycerin is residual oil. This inclusion of a co-product credit for glycerin reduces the
overall GHG impact of biodiesel compared to the proposal analysis.
For the final rule, EPA has updated its assessment of crop yields both domestically and
internationally. We have calculated lifecycle emission performance assuming both base yields
derived from projecting into the future longer term historical trends and also assuming a marked
increase in future yields based on industry and other comments
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1050
Organization: American Council for Ethanol (ACE)
Comment:
The commenter (2101.1) noted that because of the selective enforcement of the controversial and
untested theory of ILUC against biofuels by EPA, they cannot support the rule as written and
instead recommend that EPA issue a final rule that does not apply an ILUC penalty for biofuels.
The commenter recommends that EPA should insist upon greater scientific consensus and real-
world data of so-called ILUC effects from biofuels before moving forward to apply them in the
final rule. (2101.1, p.2)
The commenter noted that EISA does not direct EPA, not in statutory language nor in intent, to
estimate the impact of international land use changes in its calculation of the greenhouse gas
impact of biofuels. The law specifically compels EPA to examine significant direct and indirect
land use changes, but EPA alone, with the strong backing of groups who do not want to see
biofuels succeed, has loosely interpreted the law and unfortunately given credence to this
controversial and untested theory of international ILUC. (2101.1, pp.3-4)
The commenter also noted that the EISA statute does not require EPA to apply ILUC outside the
United States. Because of the selective enforcement of the controversial and untested theory of
ILUC against biofuels by EPA, the commenter can not support the rule as written and instead
recommends that EPA issue a final rule that does not apply an international ILUC penalty for
biofuels, consistent with the law. (2101.1, p. 16)
Our Response:
EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. EPA took numerous measures to seek public comment on our
approach—including extending the comment period for the proposed rule, holding a two-day
public workshop on the lifecycle methodology, and reaching out to dozens of stakeholders,
through individual meetings, conferences and events. EPA also initiated an independent
scientific peer review of specific areas of our work.
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EPA has clearly acknowledged that there are significant uncertainties associated with these
estimates-particularly with regard to indirect land use change-and has developed an approach
that manages these uncertainties. However, EPA rejects the view that the modeling relied upon
in the final rule is too uncertain or untested to provide a credible and reasonable scientific basis
for determining whether the aggregate lifecycle emissions exceed the thresholds. In addition, if
international land use impacts were so uncertain that their impact on lifecycle GHG emissions
could not be adequately determined, this does not mean EPA could assume the international land
use change emissions are zero. High uncertainty as claimed by the commenter would not mean
that we have absis to believe the emissions are small and can be ignored; rather it would mean
that we could not tell whether they are large or small. If high uncertainty meant that EPA were
not able to determine that indirect emissions from international land use change are small enough
that the total lifecycle emissions meet the threshold, then that fuel could not be determined to
meet the GHG thresholds of EISA and the fuel would necessarily have to be excluded from the
program. EPA has chosen an approach that takes the uncertainty of international land use
impacts into account, does not ignore it, and provides a credible and reasonable estimate of the
significant emissions associated with these land use impacts. Our approach quantifies
uncertainty and presents the weight of currently available evidence in making our threshold
determinations.
Although the definition of lifecycle greenhouse gas emissions in Section 211 (o) does not
specifically mention international emissions, it would be inconsistent with the text and the intent
of this section of the Act to exclude them. The definition of lifecycle GHG emissions makes it
clear that EPA is to determine the "aggregate" emissions "related to" the "full" fuel lifecycle,
including "all stages of fuel and feedstock production and distribution". EPA is directed to
include both direct emissions and significant indirect emissions, such as significant emissions
from land use changes. A large variety of activities outside the U.S. play a major part in the full
fuel lifecycle of both the baseline fuel (gasoline and diesel fuel used as transportation fuel in
2005) and renewable fuels. For example, several stages of the lifecycle process for gasoline and
diesel can occur overseas, including extraction and delivery of imported crude oil, and for
imported gasoline and diesel products, emissions associated with refining and distribution of the
finished product to the U.S. For imported renewable fuel, all of the emissions associated with
feedstock production and distribution, fuel processing, and delivery of the finished renewable
fuel to the U.S. occur overseas. Whether the direct or indirect emissions occur in the U.S. or
overseas does not change that they are related to the full fuel lifecycle. There is no basis in the
definition to treat direct or indirect emissions that occur overseas different from direct or indirect
emissions that occur in the US. Thus, EPA could not, as a legal matter, ignore those parts of a
fuel lifecycle that occur overseas.
Excluding international impacts means large percentages of GHG emissions would be
ignored. This would take place in a context where the global warming impact of emissions is
irrespective of where the emissions occur. If the purpose of thresholds is to achieve some
reduction in GHG emissions in order to help address climate change, then ignoring emissions
outside our borders interferes with the ability to achieve this objective. Such an approach would
essentially undermine the purpose of the provision, and would be an arbitrary interpretation of
the broadly phrased text used by Congress.
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Lastly, EPA believes that including international indirect emissions in EPA's lifecycle
analysis does not exercise regulatory authority over activities that occur solely outside the U.S.,
nor does it raise questions of extra-territorial jurisdiction. EPA's regulatory action involves an
assessment of products either produced in the U.S. or imported into the U.S. EPA is simply
assessing whether the use of these products in the U.S. satisfies requirements under EISA for the
use of designated volumes of renewable fuel, cellulosic biofuel, biomass-based diesel, and
advanced biofuel. Considering international emissions in determining the lifecycle GHG
emissions of the domestically-produced or imported fuel does not change the fact that the actual
regulation of the product involves its use solely inside the U.S.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1050
Organization: American Council for Ethanol (ACE)
Comment:
The commenter also noted that ILUC models provide for interesting discussions, but they are not
reliable enough to be used for determining policies with national and consequential
ramifications. Computer models are entirely dependent on the assumptions that are employed by
those who develop them. Ultimately the only meaningful test of whether a computer model is
sound is whether its predictions can be corroborated by actual on-the-ground measurements.
Without these real-world substantiations, models are more theory than science. In the case of
ILUCs from biofuels, the measurements of on-the-ground land clearing do not corroborate the
predictions of existing models. (2101.1, pp.4&5)
The commenter believes that computer models should not be used to ascribe GHG emissions to
biofuels or any other energy source until those models have been shown through years of
corroborative data to accurately predict real-world changes in emission rates. Some academics
who developed the models used by EPA may not agree with the commenter about what the
"score" or "penalty" for corn ethanol under the ILUC theory is (often they say the land use
change effect of corn ethanol is not zero), but even they would admit their models need more
work before they can be reliably used in a policy context. (2101.1, p.5)
The commenter is pleased that EPA sent a letter to Senator Tom Harkin (D-IA) in response to an
amendment he filed to the Fiscal Year 2010 Interior Appropriations bill which would require
more EPA study of ILUC before enforcing it in the RFS2 rule. The fact that EPA noted "that
there are significant uncertainties associated with these estimates (ILUC) and in particular, with
the estimate of indirect land use change" is an important acknowledgment. Thanks for asking
EPA staff to quantify the uncertainty associated with specifically the ILUC emissions. They are
working closely with USDA as well as incorporating feedback from experts who are
commenting on the rule. It is important to understand the uncertainty surrounding the estimates
before finalizing the RFS2 rule. (2101.1, p.7)
In an effort to better understand lifecycle analysis and indirect effects, the commenter
commissioned a study by Global Insight entitled "Lifecycle Analysis of Greenhouse Gas
Emissions Associated with Starch-based Ethanol." Key findings from that report include:
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-Changes in land use have always occurred and are not new, nor are biofuels the primary driver
of them. Global population growth cannot be ignored as a factor.
Our Response:
We agree that land use change has occurred in the past and will continue. We also agree
that there are many drivers for land use change including global population growth. Our analysis
is based on the difference between two future scenarios with different levels of biofuels
production that both include population growth and other land use change factors. So we are
only calculating the impact of the increase in biofuel production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1050
Organization: American Council for Ethanol (ACE)
Comment:
-The scientific literature available to date shows a huge variation in estimates of carbon release
from land clearing in general, on the order of 50 percent plus or minus - a huge margin of error
that should not be relied upon to make policy.
Our Response:
For the final rule analysis we have included the uncertainty of carbon releases from land
clearing. However, we disagree that we can not make threshold determinations because of this
uncertainty. For this final rule, because of the inherent uncertainty and the state of the evolving
science on this issue, EPA is basing its GHG threshold compliance determinations for this rule
on an approach that considers the weight of evidence currently available. For fuel pathways with
a significant land use impact, the evidence considered includes the best estimate as well as the
range of possible lifecycle greenhouse gas emission results based on formal uncertainty and
sensitivity analyses conducted by the Agency. In making the threshold determinations for this
rule, EPA weighed all of the evidence available to it, while placing the greatest weight on the
best estimate value for the base yield scenario. In those cases where the best estimate for the
potentially conservative base yield scenario exceeds the reduction threshold, EPA judges that
there is a good basis to be confident that the threshold will be achieved and is determining that
the bio-fuel pathway complies with the applicable threshold. To the extent the midpoint of the
scenarios analyzed lies further above a threshold for a particular biofuel pathway, we have
increasingly greater confidence that the biofuel exceeds the threshold.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1050
Organization: American Council for Ethanol (ACE)
Comment:
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-If some land use change is due to increased biofuels production, the overriding challenge is to
quantify which changes can indeed be directly attributed to biofuels.
Our Response:
The way the analysis was conducted we specifically quantify changes that are attributable
to biofuel production. We consider the emissions difference between two future scenarios where
the only difference between the two scenarios is the amount of biofuels produced. By doing this
scenario analysis we isolate the impacts due to biofuel production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1050
Organization: American Council for Ethanol (ACE)
Comment:
-If the indirect GHG emissions of biofuels are counted toward the carbon footprint, so should be
the indirect emissions associated with petroleum production. (2101.1, pp.7-8)
Our Response:
The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
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average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1050
Organization: American Council for Ethanol (ACE)
Comment:
The commenter believes that EPA needs to more carefully consider the value of ethanol co-
products (distillers grains) that are returned to the feed supply and the fact that corn yields are
not fixed but are constantly improving thanks to improved farming methods and biotechnology.
If proper credit is provided to distillers grains co-products, which replace the need for corn and
soybean meal in livestock feed, and if increased corn yields are considered, the 15 billion gallons
of corn ethanol called for under RFS2 can be produced without any land use penalties. (2101.1,
P-8)
The commenter noted that ascribing GHG emissions from land clearing in developing countries
to biofuels production in the U.S. would hold the domestic ethanol industry to a uniquely
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punitive standard, one that no other U.S. industry would face under any existing or proposed
GHG control program. (2101.1, p. 14)
Our Response:
For the final rulemaking analysis, both the FASOM and FAPRI models have
incorporated updated distillers grains replacement rates for corn and soybean meal in animal
feed. These updated assumptions are based on recent research conducted by Argonne National
Laboratory. In addition, both the FASOM and FAPRI models expect crop yields to continue to
increase over time, in accordance with USDA projections. These assumptions, however, are
applied to all volume scenarios analyzed in the FASOM and FAPRI models for this rulemaking.
Therefore, an increase in demand for renewable fuel under these circumstances still results in
land use change stemming from increased crop production in the final rulemaking analysis.
Another update to the FAPRI model related to improved crop yields includes price-induced yield
changes, which results in increased yield for a crop as its price increases. Details on these
assumptions in the final rulemaking can be found in the RIA, and the technical reports on the
docket for the FASOM and FAPRI models.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1051
Organization: Aberdeen Development Corp.
Comment:
The commenter (1051) believes that existing biodiesel facilities, which are able to meet the
RFS2 requirements with existing feedstock sources, should not be unfairly penalized for
assumptions related to international land use changes. EPA has already indicated that obligated
parties will be able to use 2009 biodiesel and renewable diesel to meet the RFS2 requirements.
[[Docket number 1051.1, p. 1]]
The commenter urges EPA to use its regulatory authority to exempt biodiesel facilities that were
placed in service prior to December 19, 2007, the date of enactment of EISA from being unfairly
penalized for assumptions related to international land use changes that cannot be validated with
credible science and are unrelated to U.S. biodiesel production. [[Docket number 1051.1, p. 2]]
Our Response:
EISA "grandfathers" production from existing facilities but only for compliance with the
basic renewable fuel compliance threshold (i.e, 20% GHG improvement) not the advanced
biofuel threshold (50% improvement) which is generally the target for biodiesel.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1051
Organization: Aberdeen Development Corp.
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Comment:
The commenter believes that existing U.S. biodiesel production, which has been steadily
growing, will have no land use changes and therefore no significant emissions can be associated
with existing production. [[Docket number 1051.1, p. 2]]
The commenter states that EPA's assumptions regarding international land use changes
associated with U.S. biodiesel production do not reflect the real world. EPA assumes increased
U.S. biodiesel production will lead to land conversion in South America. If this assumption were
correct, Brazilian soybean acreage would have increased from 2004 through 2008, a time in
which U.S. biodiesel production increased from 25 million to 690 million gallons. During this
time, however, Brazilian soybean acres actually decreased by 1.5 million hectares. [[Docket
number 1051.1, p. 2]]
Our Response:
The commenter indicates that methodology for determining GHG impacts is flawed in
that it is not a widely accepted methodology, includes indirect land use changes (including
international land use impacts), out of date IPPC factors for nitrogen from soybean production,
glycerine co-product benefits are under estimated, and the petroleum baseline does not take into
account future petroleum trends. As detailed in the preamble and RIA, EPA has used the most
up to date models, data and other information in its LCA. These indicate that indirect impacts
including international land use impacts are significant and should appropriately be included in
accordance with good practice and the requirements of EISA. For the final rule we have updated
our nitrogen data to use the latest IPPC guidance and have included co-product value for
glycerine.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1338
Organization: Union for Concerned Scientists
Comment:
The commenter's (1338) recommend that the Renewable Fuel Standard (RFS) use the latest
science to calculate the lifecycle analyses of heat-trapping emissions from biofuels. Doing this
would ensure that indirect land use change, resulting from converting forests and grasslands to
farmland for fuel crop production, is taken into account. (1338, p.l)
The commenter's note that recent peer-reviewed research indicates that the production of
conventional biofuels can directly or indirectly result in substantial global warming emissions.
Previous lifecycle analyses of biofuels did not adequately account for these emissions, giving
these fuels credit for greater reductions in heat-trapping emissions than actually achieved. The
data on land use change indicate that the emissions related to biofuels are significant and can be
quite large. The commenter's note that even though it is currently difficult to assign a precise
value to the effect of indirect land use, regulations based on the best available science need to be
developed without ignoring this major source of global warming pollution. (1338, p.l)
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Our Response:
EPA agrees with the commenter's suggestion to use the latest science. The methodology
presented in the final rule includes significant enhancements to our approach, including the
incorporation of new scientific data. In addition, as required by EISA, EPA has considered all
aspects of a fuel's lifecycle emissions in order to determine compliance with the thresholds.
EPA believes it has developed an approach that incorporates and measures full lifecycle
emissions while also acknowledging that single point estimates of these impacts may not be
possible given the uncertainties in certain areas.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1669
Organization: Environmental Intelligence, Inc.
Comment:
The commenter (1669.1) is concerned that the evidence demonstrates that U.S. biodiesel
production is not the cause of significant land use change in Brazil or elsewhere. U.S. soybean
farmers should not be penalized based on flawed and immature assumptions and theories.
(1669.1, p.l)
Our Response:
As described in more detail and in Section V of the preamble, EPA has used the best
available models to analyze the indirect impacts of U.S. biodiesel production, and has
incorporated many modifications to its proposed approach based on comments from the public
and peer reviewers and developing science. EPA has also quantified the uncertainty associated
with significant components of its analyses, including important factors affecting GHG
emissions associated with international land use change. EPA has updated and refined its
modeling approach since proposal in several important ways, and EPA is confident that its
modeling of GHG emissions associated with international land use is comprehensive and
provides a reasonable and scientifically robust basis for making the threshold determinations
required for this rulemaking. As discussed in the preamble, EPA plans to continue to improve
upon its analyses, and will update it in the future as appropriate.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1719
Organization: MAIZAR, Argentine Corn and Sorghum Association
Comment:
The commenter (1719.1) needs to make EPA aware that the theoretical bases on which the
proposed rulemaking is founded, known as the international Land Use Change theory ("iLUC"),
directly contradicts the commenter's experience and knowledge of the agricultural development
in Argentina and of the care and sustainability of its ecosystems. Land use change is actually an
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opportunity to improve ecosystems and, when desired, it is a method to accumulate organic
matter and sequester in the soil the GHG emitted by other activities of mankind. (1719.1, p.l&5)
Our Response:
As detailed in the preamble and RIA, EPA has used the most up to date models, data and
other information in its LCA. These indicate that indirect impacts including international land
use impacts are significant and should appropriately be included in accordance with good
practice and the requirements of EISA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1722
Organization: Citizen
Comment:
The commenter (1722) believes that the greenhouse gas emissions resulting from the change in
the use of the land (be they negative or positive) are not directly related to any of the enumerated
direct emissions sources; they are, however, indirectly related. The commenter noted that in the
proposed rule, EPA leaped from "indirect emissions such as significant emissions from land use
changes" to "international indirect land use change," creating this phrase which is not in the
legislation. EPA then proposed that when land is taken from one use in one part of the world,
identifiable and quantifiable adjustments will be made in another part of the world in response.
The commenter believes that such a broad re-interpretation of the phrase is unwarranted. (1722,
p.3)
The commenter believes that indirect emissions could result from land use changes in other
countries in the production of biofuels in those countries. It would seem reasonable to include
those emissions in the lifecycle calculation, should those biofuels be imported to the U.S.
However, it is an unwarranted stretch to suggest that any change in the use of land from one
purpose to another in one country has a predictable, measurable, emission-creating counterpart in
another country, in another part of the world. The commenter believes that there is no
justification in the legislation to include international indirect land use change analysis in
calculating the required lifecycle greenhouse gas emissions either baseline or comparative.
(1722, p.3)
The commenter believes that EPA should not incorporate any evaluation of any international
indirect land use change - or any indirect land use change - into its analysis of greenhouse gas
emissions for the purpose of determining if a biofuel meets the Renewable Fuel Standard.
Indirect land use changes-related analysis should only be incorporated after the appropriate tools
are developed and meet independent peer-reviewed approval such as that which might be
provided by the National Academies of Sciences. (1722, p.4)
Our Response:
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EPA believes that a complete analysis of the aggregate GHG emissions related to the full
lifecycle of renewable fuels includes the significant indirect emissions from international land
use change that are predicted to result from increased domestic use of agricultural feedstocks to
produce renewable fuel. The statute specifically directs EPA to include in its analyses
significant indirect emissions such as significant emissions from land use changes. EPA has not
ignored either the terms "significant" or "life cycle." It is clear from EPA's assessments that the
modeled indirect emissions from land use changes are "significant" in terms of their relationship
to total GHG emissions for given fuel pathways. Therefore, they are appropriately considered in
the total GHG emissions profile for the fuels in question. EPA has not ignored the term "life
cycle." The entire approach used by EPA is directed to fully analyzing emissions related to the
complete lifecycle of renewable and baseline fuels.
Although the definition of lifecycle greenhouse gas emissions in Section 211 (o) does not
specifically mention international emissions, it would be inconsistent with the text and the intent
of this section of the Act to exclude them. The definition of lifecycle GHG emissions makes it
clear that EPA is to determine the "aggregate" emissions "related to" the "full" fuel lifecycle,
including "all stages of fuel and feedstock production and distribution". EPA is directed to
include both direct emissions and significant indirect emissions, such as significant emissions
from land use changes. A large variety of activities outside the U.S. play a major part in the full
fuel lifecycle of both the baseline fuel (gasoline and diesel fuel used as transportation fuel in
2005) and renewable fuels. For example, several stages of the lifecycle process for gasoline and
diesel can occur overseas, including extraction and delivery of imported crude oil, and for
imported gasoline and diesel products, emissions associated with refining and distribution of the
finished product to the U.S. For imported renewable fuel, all of the emissions associated with
feedstock production and distribution, fuel processing, and delivery of the finished renewable
fuel to the U.S. occur overseas. Whether the direct or indirect emissions occur in the U.S. or
overseas does not change that they are related to the full fuel lifecycle. There is no basis in the
definition to treat direct or indirect emissions that occur overseas different from direct or indirect
emissions that occur in the US. Thus, EPA could not, as a legal matter, ignore those parts of a
fuel lifecycle that occur overseas.
EPA is making the GHG threshold determination based on a methodology that includes
an analysis of the full lifecycle, including significant emissions related to international land-use
change. EPA has used the best available models for this purpose, and has incorporated many
modifications to its proposed approach based on comments from the public and peer reviewers
and developing science. EPA has also quantified the uncertainty associated with significant
components of its analyses, including important factors affecting GHG emissions associated with
international land use change. The Agency has updated and refined its modeling approach since
proposal in several important ways, and EPA is confident that its modeling of GHG emissions
associated with international land use is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations described above.
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 will continue to change.
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
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committing to further reassess these determinations and lifecycle estimates. As part of this
ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as well as
other experts, and incorporate their advice and any updated information we receive into a new
assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in this
final rule. EPA will request that the National Academy of Sciences over the next two years
evaluate the approach taken in this rule, the underlying science of lifecycle assessment, and in
particular indirect land use change, and make recommendations for subsequent rulemakings on
this subject.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1975
Organization: Canadian Bioenergy Corporation
Comment:
The commenter (1975) believes that indirect Land Use Change should not be used to calculate
greenhouse gas emissions. The biodiesel industry must be able to utilize every feedstock
available. The EPA should not exclude soybean oil-based biodiesel from RINs eligibility, and
thus RFS2 volume requirements, as a result of indirect land use change formulations for
greenhouse gas emissions. The EPA concludes, with certainty, that international land use change
will occur and GHG emissions will result due to a direct relationship between shifts in the
agricultural market as a consequence of the increased demand for biofuels in the U.S. However,
the EPA dismisses actual data. For example, on land usage in Brazil, data shows a decrease of
soybean hectares under production from 2004 to 2008 by 1.5 million. While for the same period
of time, U.S. biodiesel production increased from 25 million gallons to 690 million gallons. The
commenter believes it is wrong to lay deforestation across globe at the feet of the U.S. biofuels
industry. [[Docket number 1975, p. 1]]
Our Response:
EPA is making the GHG threshold determination based on a methodology that includes
an analysis of the full lifecycle, including significant emissions related to international land-use
change. EPA has used the best available models for this purpose, and has incorporated many
modifications to its proposed approach based on comments from the public and peer reviewers
and developing science. EPA has also quantified the uncertainty associated with significant
components of its analyses, including important factors affecting GHG emissions associated with
international land use change. The Agency has updated and refined its modeling approach since
proposal in several important ways, and EPA is confident that its modeling of GHG emissions
associated with international land use is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations described above. We plan to
continue to improve upon our analyses, and will update it in the future as appropriate. Based on
this analysis and approach, EPA has determined that biodiesel and renewable diesel from soy oil
or waste oils, fats, and greases will exceed the 50% GHG threshold for biomass-based diesel.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-1987
Organization: Cornell University
Comment:
The commenter [[1987]] states that applying their methodology to Brazilian and U.S. data, they
find that in Brazil conversion to biofuel production of two land types is genuinely sustainable,
i.e., satisfies our sustainability standard, whereas in the United States no land type satisfies their
criterion. [[1987.1 p.3]]
Our Response:
The commenter's statement that corn ethanol production in the U.S. does not satisfy their
defined "sustainability criteria" is based on the authors' conclusion that corn ethanol produced in
the U.S. requires a payback period of at least 61 years. This conclusion is based on a simple
analysis using data from Searchinger et al. (2008). EPA disagrees, because, as described in
preamble Section V, EPA's analysis finds that many U.S. corn ethanol pathways require a
payback period of less than 30 years. As described in the preamble, we have made number of
very important updates as compared to the Searchinger et al. (2008) analysis. Furthermore, the
analysis conducted by the commenter makes several assumptions that EPA does not support,
such as the assumption that crop yields will not increase over time. For the same reasons, EPA
also disagrees with the commenter's calculated payback periods for ethanol produced in Brazil.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2000
Organization: Galva Holstein Ag, LLC.
Comment:
The commenter [[2000]] states that EPA should Drop consideration of "international" land use
change and focus on domestic land use change only, assume that CRP land will be released in
response to a long-term change in demand for ethanol and soy biodiesel, and assume corn and
soybean yield increases more in line with recent experience rather than long-term trends, [[see
docket#2000 p. 1]]
Our Response:
Based on coordination with USDA, EPA modeled assuming land in CRP will be
supported by USDA and therefore would not be available for biofuel feedstock production.
For the final rule, EPA has updated its assessment of crop yields both domestically and
internationally. We have calculated lifecycle emission performance assuming both base yields
derived from projecting into the future longer term historical trends and also assuming a marked
increase in future yields based on industry and other comments
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2002
Organization: Novozymes North America, Inc. (Novozymes)
Comment:
The commenter (2002) states that the economic models being used for ILUC modeling were not
developed for this purpose (a point also made in the peer review) and are in themselves a
significant source of uncertainty. The same also goes for the input parameters of the models such
as price elasticities, which have significant influence on the ILUC results produced by the
models. [[Docket number 2002.1, p. 2]]
The commenter points out that on page 353 in the DRIA, the EPA states that price-induced yield
changes are assumed to be counteracted by lower productivity on marginal lands taken into
production due to increased biofuels production. Meanwhile, the EPA does nothing to give a
quantitative substantiation of this assumption. The commenter recommends that the EPA
explores the aspect of price-induced yield changes in more detail and would also mentions that
new land taken into production internationally does not necessarily have a lower fertility than
existing agricultural land. The EPA may consider using the GTAP Model to quantify price-
induced yield changes. [[Docket number 2002.1, p. 5]]
Our Response:
In the NPRM we requested comment on whether the higher prices caused by an increased
in demand for biofuels would increase future yield projections in the policy case beyond the
yield trends in the reference case (sometimes referred to as "price induced yields"), or whether
these price induced yields would be offset by the reduction in yields associated with expanding
production onto new marginal acres (sometimes referred to as extensification). Based on the
comments we received, along with additional historical trend analysis conducted by FAPRI, the
FAPRI model was updated to include elasticity factors for yields to respond to changes in prices
over time both in the U.S. and internationally.
As the price of corn increase, farmers, seed producers, and others involved in crop
production have an additional incentive to improve yields. The price induced yield phenomenon
is partially offset by the reduced yields that result from expanding on to new crop acres, which is
often referred to as extensification. However, the price-induced yield impact is projected to be
larger than the extensification effect. For example, in 2022 the price of corn increases by $0.10
(3.3 percent) in the U.S. In response, the average corn yield in 2022 increases by 0.4 bushels per
acre (0.4 percent). In another example, in 2022, world corn prices increase by $0.12 per bushel
(3.1 percent). As a result, corn yields in China increased from 101.9 bushels per acre in the
Reference Case to 102.3 bushels per acre in the Control Case in 2022, a 0.3 percent
improvement. Additional details on the methodology behind the estimation of price-induced
yields can be found RIA Chapter 5.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2002
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Organization: Novozymes North America, Inc. (Novozymes)
Comment:
The commenter notes EPA's assumption that new land brought into production is cleared by
burning in most of the countries considered in the GHG analysis. Meanwhile, EPA recognizes
that timber and other valuable products are removed from forests before conversion to cropland,
at least in the United States (DRIA page 354). EPA states that accounting for timber removal
would only reduce GHG emissions from forests converted to cropland by 2% (DRIA page 385).
The commenter believes that this is very low and is difficult for the reader to verify since a
breakdown of the emissions from forest conversion is not provided. The commenter recommends
that the EPA provides a more transparent substantiation of its assessment for the clearing of land
in the documentation for the final rule. [[Docket number 2002.1, p. 5]]
Our Response:
As the commenter states, some wood felled during timber harvest and deforestation is
used in wooden products (e.g., furniture) that retain biogenic carbon for a long period of time.
Emissions from forest products can also occur over several years or decades.
With the addition of the forestry module to the FASOM domestic modeling, FASOM
takes into account both the carbon stored in harvested wood products (HWP) and the emission
streams associated with them over time for domestic forests. Thus, wood products are accounted
for in the domestic modeling for the final rulemaking. For details on these domestic HWP
calculations, see the RIA 2.4.4.1.
Some commenters argued that consideration of the use of harvested wood in products
would decrease land use change emissions and reduce the impacts of biofuel production. For the
international land use analysis in the proposed rule, we investigated the share of cleared forest
biomass that is typically used in HWP. However, we did not account for this factor in the
proposed rule after it was determined that HWP would have a very small impact on the
magnitude of international land use change emissions.
A number of commenters expressed concern that we did not account for HWP, and they
argued that HWP would be more significant than we had determined. However, in response to
specific questions on this topic, all of the expert peer reviewers agreed that EPA had properly
accounted for HWP and other factors (e.g., land filling) that could prevent or delay emissions
from land clearing. One of the peer reviewers noted that forests converted to croplands are
generally driven by interests unrelated to timber, and thus the trees are simply burned and
exceptions are probably of minor importance.
To study this issue further, we looked at FAO timber volume estimates for 111
developing countries, and published literature on the share of harvested timber used in wood
products and the oxidation period for wood products, such as wood-based panels and other
industrial roundwood. Consistent with the peer reviewers' statements, our analysis concluded
that even in countries with high rates of harvested timber utilization, such as Indonesia, a very
small share of harvested forest biomass would be sequestered in HWP for longer than 30 years.
The details of our HWP analysis are discussed further in RIA Chapter 2.
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This is an area for further work, but based on our analysis, and the feedback from expert
commenters, we do not expect that consideration of HWP would have a significant impact on the
magnitude of GHG emissions from international deforestation in our analysis. Furthermore, the
range of outcomes from consideration of HWP is indirectly captured in our assessment of forest
carbon stock uncertainty.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2008
Organization: Midwestern Legislative Conference of the Council of State Governments
Comment:
The commenter (2008.1) urges that biofuels be provided a level playing field by federal or state
authorities in the calculation of the effects of indirect land use. (2008.1, p.l)
Our Response:
For this rule, EPA has applied the same methodology in analyzing the LCA of all
biofuels. We believe our methodology represents the best currently available and should be used
for this national rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2010
Organization: SoyMor Biodiesel, LLC
Comment:
The commenter (2010) notes that EPA insists that indirect emissions due to land use change, as
directed by statute, includes international land use change and attempts to use data derived from
intricate corollary-models and dated satellite imaging. Rather than applying the indirect
emissions assumption to all fuels as directed by statue, EPA choose to apply this assumption
only to biofuels. The baseline for petroleum is static and does not include indirect emissions.
This action violates a true comparative LCA analysis and ISO standards. The commenter adds
that using faulty data and assumptions to drive a regulatory polity after billions of dollars of
federal, state, and private investments in renewable biofuels is unconscionable. [[Docket number
2010.1, p. 9]]
It's apparent that there is no consensus on how indirect emissions should be accounted for in an
LCA for soy biodiesel. If transparency cannot be readily attained, analysis of indirect effects for
biofuels should be deferred until all factors and petroleum fuels are considered. [[Docket number
2010.1, p. 9]]
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2152.1
Organization: Minnesota Coalition for Ethanol
Comment:
The commenter (2152) has great concern with the inclusion of indirect land use change in
lifecycle GHG analysis. The recent debate about indirect land use change in the U.S. House of
Representatives demonstrates that his concept is very controversial. Even by utilizing the best
research techniques available, there is little or no consensus among the scientific community as
to how indirect effects can be measured. The language included in the amendment sponsored by
Rep. Collin Peterson prohibited the EPA from considering international indirect land use change
while this concept is still being studied. (2152.1 Pg. 1).
Our Response:
EPA believes there is a great deal of scientific consensus on the need to account for
indirect emissions in assessing the lifecycle impacts of biofuels. EPA's goal in developing this
methodology was to use a scientifically sound approach and to appropriately characterize
uncertainty. In an independent peer review or EPA's methodology the reviewers in general
supported the importance of assessing indirect land use change and determined that EPA used
the best available tools and approaches for this work. This peer review, along with the extensive
public comments the Agency received, supported the value of quantifying the magnitude of this
uncertainty and its relative impact on the resulting lifecycle emission estimates as is done in this
final rule.
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 will continue to change.
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. As part of this
ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as well as
other experts, and incorporate their advice and any updated information we receive into a new
assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in this
final rule. EPA will request that the National Academy of Sciences over the next two years
evaluate the approach taken in this rule, the underlying science of lifecycle assessment, and in
particular indirect land use change, and make recommendations for subsequent rulemakings on
this subject. This new assessment could result in new determinations of threshold compliance
compared to those included in this rule that would apply to future production (from plants that
are constructed after each subsequent rule).
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2011
Organization: Western Dubuque Biodiesel LLC
Document No.: EPA-HQ-OAR-2005-0161-2013
Organization: Central Iowa Energy, LLC
Comment:
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RFS2 Summary and Analysis of Comments
The commenter (2013) notes that EPA insists that indirect emissions due to land use change, as
directed by statute, includes international land use change and attempts to use data derived from
intricate corollary-models and dated satellite imaging. Rather than applying the indirect
emissions assumption to all fuels as directed by statue, EPA choose to apply this assumption
only to biofuels. The baseline for petroleum is static and does not include indirect emissions.
This action violates a true comparative LCA analysis and ISO standards. The commenter adds
that using faulty data and assumptions to drive a regulatory polity after billions of dollars of
federal, state, and private investments in renewable biofuels is unconscionable. [[Docket number
2013.1, p. 9]]
It's apparent that there is no consensus on how indirect emissions should be accounted for in an
LCA for soy biodiesel. If transparency cannot be readily attained, analysis of indirect effects for
biofuels should be deferred until all factors and petroleum fuels are considered. [[Docket number
2013.1, p. 10]]
Our Response:
The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
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We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
With regard to the lifecycle analysis more generally, the Agency believes it has
developed a scientifically sound, state-of-the-art, methodology. In an independent peer review
of EPA's methodology the reviewers in general supported the importance of assessing indirect
land use change and determined that EPA used the best available tools and approaches for this
work. This peer review, along with the extensive public comments the Agency received,
supported the value of quantifying the magnitude of this uncertainty and its relative impact on
the resulting lifecycle emission estimates as is done in this final rule. We focused our
uncertainty analysis on the international indirect land use change emissions and worked to
manage the uncertainty around those impacts.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2047
Organization: Terrabon
Comment:
The commenter [[2071]] states the statute's current heavy reliance on crop-based feedstocks
creates incentives to shift the entire burden of feedstock production onto lands, which promotes
intense production and increases the odds of economically unsustainable land management
processes. [[#2071.1 p.4]]
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RFS2 Summary and Analysis of Comments
Our Response:
EISA and EPA's rule acknowledge the expected high levels of biofuels likely to come
from crops. However, provisions are made for including non-crop feedstock sources including
waste fats and greases as well as agricultural wastes.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2048
Organization: BioPure Fuels
Comment:
The commenter (2048.1) believes that the science behind indirect land use assumptions is weak
and open to criticism. Clearly there is room for questioning the assumptions being made in
including indirect land use in the regulations and this is perhaps the area where U.S. EPA is
likely to obtain the greatest criticism (as evidenced by the recent hearing on indirect land use in
Congress). (2048.1,p.3)
With regards to the GREET model, the commenter is not in favor of any of the recommendations
in the GREET model associated with indirect land use change, staff recommendations to include
indirect land use change in carbon calculations and adoption of a rule that includes Indirect Land
Use Change (ILUC). The commenter agrees with comments from stakeholders including the
letter by 111 Ph.D. Scientists stating that the science used in determining these market mediated,
indirect impacts is quite limited and highly uncertain. In addition, the selective enforcement of
indirect land use impacts for biofuels over other fuels included in the LCFS violates the most
basic principles of regulatory fairness. (2048.1, p. 11)
Our Response:
EPA has clearly acknowledged that our lifecycle methodology required breaking new
scientific ground and using analytical tools in new ways. The work was generally recognized as
state of the art and an advance on lifecycle thinking, specifically regarding the indirect impacts
of biofuels. EPA took numerous measures to seek public comment on our approach—including
extending the comment period for the proposed rule, holding a two-day public workshop on the
lifecycle methodology, and reaching out to dozens of stakeholders, through individual meetings,
conferences and events. EPA also initiated an independent scientific peer review of specific
areas of our work.
EPA has recognized that there are uncertainties associated with these estimates-
particularly with regard to indirect land use change~and has sought to develop an approach that
manages these uncertainties. However, EPA rejects the view that the modeling relied upon in
the final rule is too uncertain or untested to provide a credible and reasonable scientific basis for
determining whether the aggregate lifecycle emissions exceed the thresholds. If the international
land use impacts were so uncertain that their impact on lifecycle GHG emissions could not be
adequately determined, this does not mean EPA could assume the international land use change
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emissions are zero. High uncertainty would not mean that emissions are small and can be
ignored; rather it could mean that we could not tell whether they are large or small. If high
uncertainty meant that EPA were not able to determine that indirect emissions from international
land use change are small enough that the total lifecycle emissions meet the threshold, then that
fuel could not be determined to meet the GHG thresholds of EISA and the fuel would necessarily
have to be excluded from the program. The Agency has chosen an approach that includes
biofuels with a significant international land use impact in this program. We also have chosen an
approach that quantifies uncertainty and presents the weight of currently available evidence in
making our threshold determinations.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2079
Organization: AE Biofuels, Inc.
Comment:
The commenter (2079.1) believes that EPA's assumptions regarding international land use
changes associated with U.S. biodiesel production do not reflect the real world. EPA's analysis
does not consider global market drivers for biodiesel feedstock, such as soybeans, that have
substantial influence on U.S. exports and land use changes in other countries. (2079.1, p.7)
Our Response:
To quantify the lifecycle GHG emissions associated with the increase in renewable fuel
mandated by EISA, we compared the differences in total GHG emissions between two future
volume scenarios using well established-economic models. For each individual biofuel, we
analyzed the incremental GHG emission impacts of increasing the volume of that fuel to the total
mix of biofuels needed to meet the EISA requirements. The scenarios that we compared include
the same background projections about agricultural and economic conditions such as
macroeconomic growth, oil prices, crop growing conditions, exchange rates and government
policies. Thus, we isolate the effects of each type of biofuel expansion because all other factors
that affect the agricultural economy are held constant.
The historical biodiesel and soybean statistics cited by the commenter are not comparable
with our model predictions. During the time period discussed by the commenter (i.e., 2004 to
2008) many of the conditions that can affect the agricultural economy were changing. For
example, oil prices spiked, soybean blight became more prevalent in Brazil, exchange rates were
adjusted, and corn ethanol volumes also expanded substantially. In other words, the increase in
soy-based biodiesel production was not the only important factor that changed during the period.
Therefore, the fact that soybean acreage contracted in Brazil during this period does not refute
model predictions about how Brazil responds to U.S. biodiesel production. If we could "re-run"
history with a lower biodiesel volume, it may well be that Brazil soybean acreage would have
been much larger than it actually was, in which case the model predictions would be validated.
What Commenters Said:
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RFS2 Summary and Analysis of Comments
Document No.: EPA-HQ-OAR-2005-0161-2087
Organization: Ag Partners
Comment:
The commenter [[2087]] states that EPA should drop consideration of "international" land use
change and focus on domestic land use change only, assume that CRP land will be released in
response to a long-term change in demand for ethanol and soy biodiesel, and assume corn and
soybean yield increases more in line with recent experience rather than long-term trends, [[see
docket#2087 p. 1]]
Our Response:
As required by EISA, EPA has included in its lifecycle GHG assessment all significant
impacts on GHG emissions including those resulting from international land use change. EPA
bleives its assessments are technically appropriate and defensible and consistent with the
mandates of law.
Based on coordination with USDA, EPA modeled assuming land in CRP will be
supported by USDA and therefore would not be available for biofuel feedstock production.
For the final rule, EPA has updated its assessment of crop yields both domestically and
internationally. We have calculated lifecycle emission performance assuming both base yields
derived from projecting into the future longer term historical trends and also assuming a marked
increase in future yields based on industry and other comments
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2104
Organization: US Canola Association
Comment:
The commenter [[2104]] state that they are concerned that EPA has attributed an undue degree of
land use causation to U.S. biofuels production and do not adequately consider other market
factors that have driven international land use decisions historically and currently. These myriad
other factors include, population growth, food and feed demand, timber prices, Brazilian
agricultural policies and subsidies, Argentina's Differential Export Taxes, and the European
Union's ban on U.S. soybean imports due to biotechnology barriers. [[#2104.1 p.3]]
Our Response:
To quantify the lifecycle GHG emissions associated with the increase in renewable fuel
mandated by EISA, we compared the differences in total GHG emissions between two future
volume scenarios using well established-economic models. For each individual biofuel, we
analyzed the incremental GHG emission impacts of increasing the volume of that fuel to the total
mix of biofuels needed to meet the EISA requirements. The scenarios that we compared include
the same background projections about agricultural and economic conditions such as
macroeconomic growth, oil prices, crop growing conditions, exchange rates and government
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
policies. Thus, we isolate the effects of each type of biofuel expansion because all other factors
that affect the agricultural economy are held constant.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2104
Organization: US Canola Association
Comment:
The commenter states that Iowa State University Professor, Dr. Robert Brown has conducted a
statistical analysis of indirect land use change for Brazil in which the linear regressions typically
showed correlations of about 0.01. In fact, acreage in Brazil dedicated to soybean cultivation
actually decreased from 2004 through 2008. In 2004, soybean production in Brazil covered
22.917 million hectares. In 2008, soybean production accounted for 21.400 million hectares.
EPA has proposed to conduct their lifecycle GHG analysis for all vegetable oil based biodiesel
using flawed and immature assumptions regarding international indirect land use that result in a
significant and unprecedented penalty being applied to biodiesel produced from virgin vegetable
oils. Additionally, yield increases by U.S. farmers will play a significant role in meeting biofuel
feedstock demand by producing more feedstock on the same amount of land, and that the statute
does not require EPA to include international indirect emissions in their life-cycle analysis for
biofuels. [[#2104.1 p.3-4]]
Our Response:
The historical biodiesel and soybean statistics cited by the commenter are not comparable
with our model predictions. During the time period discussed by the commenter (i.e., 2004 to
2008) many of the conditions that can affect the agricultural economy were changing. For
example, oil prices spiked, soybean blight became more prevalent in Brazil, exchange rates were
adjusted, and corn ethanol volumes also expanded substantially. In other words, the increase in
soy-based biodiesel production was not the only important factor that changed during the period.
Therefore, the fact that soybean acreage contracted in Brazil during this period does not refute
model predictions about how Brazil responds to U.S. biodiesel production.
To constitute a meaningful analysis of the correlation between U.S. biofuel production
and soybean acreage in Brazil, the linear regressions cited by the commenter would have to
statistically control for the many other variables that changed during the time period analyzed.
Such an analysis would require extensive economic, climatic and agricultural data collection and
validation. EPA has not received documentation showing that the linear regressions cited
include these necessary statistical procedures.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2110
Organization: Chevron
Comment:
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RFS2 Summary and Analysis of Comments
The commenter (2110.1) agrees that impacts from indirect land use change (ILUC) should be
included based on the best science available. That science says that ILUC is a real, significant
effect; only its magnitude is uncertain. Failure to include ILUC initially only to add it later will
lead to bad investment decisions, stranded capital and possible harm to the environment. (2110.1,
p.4)
Our Response:
EPA agrees with commenter that impacts from indirect land use change must be included
in our lifecycle analysis. Further, we have taken steps in the final rule to account for
uncertainties.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2112
Organization: Biomass Rules, LLC
Comment:
The commenter (2112.2) believes that arbitrary restrictions imposed by imposing indirect land
use analyses interfere with the challenge of participation in the RFS2 program. After months of
debate, no defensible causality has been established between U.S. biofuel policy influence and
global land use decisions. EPA made a gallant effort, but gaping holes remain in the level of data
required to develop a representative relationship. The result is that a forced effort to guess about
indirect land use creates significant barriers to energy security without providing effective
greenhouse gas safeguards. (2112.1, p. 1)
The commenter believes that the statutory language for indirect land use is fatally flawed. EPA
does a disservice to the Congress by forcing through a law that can not be measured (See
discussion on limitation of the Lifecycle Assessments below). There is insufficient data to
conduct the level of analysis that EPA has attempted to deliver. The commenter believes that
indirect land use effects must be balanced with 1) the GHG emission impact of developing the
Canadian tar sands as well as 2) coping with U.S. cropland losses due to urban development. The
land use issues (direct and indirect) do not deal with urban expansion. (2112.1, p.4) (See Docket
Number 2212.1, p.4 for more information on this issue)
Regarding modeling indirection land use change, the commenter listed some findings from
Stephen Kaffka, Director of the California Biomass Collaborative. These findings include:
1. There is an uneasy relationship between methods and outputs.
2. Models should be seen as learning tools, not truth machines.
3. There is no single policy that can control the response of complex systems. Attempting to do
so will reduce sustainability.
4. It is not food (or feed) vs. fuels, but a question of how to create more sustainable agro-
ecosystems (more diverse, more profitable). In many cases, crops grown for biomass may
facilitate that process, not only in CA but also in many locations in the developing world were
human need is great.
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5. The distinction between first generation biofuels and second generation biofuels is partially
arbitrary and misleading & If the entire crop plant were used (corn, sugarbeets), then energy
yields could be similar to or even greater compared to so-called 2nd generation crops like switch
grass. An integrated bio-refinery may change the production of energy to a by-product or waste
management process rather than the primary activity.
6. The decision to impose an ILUC handicap on agricultural biofuels was premature and
occurred without sufficient understanding of the nature of agricultural systems. This violates the
principle of a performance standard by excluding potentially viable biofuel sources and methods,
and shuts off the human talent for agriculture as part of the solution.
7. CA should encourage indigenous biofuel production to do its share to reduce GHG without
exporting all the consequences of doing so to other locations. This is partly a matter of ethics, but
it will also have the best estimates of GHG effects for local systems.
8. The key to a successful transition to a low carbon future will be entrepreneurial innovation.
The state should err on the side of encouraging such innovation.
9. The economic, social and ecological effects of regulation of the energy sector are so
fundamental, far-reaching and complex, that prudence and time are needed to achieve the
greatest net environmental and social benefits. (2112.1, p.9) (See Docket Number 2112.1, pp.9-
10 for more discussion on this issue)
Our Response:
As detailed in the preamble and RIA, EPA has used the most up to date models, data and
other information in its LCA. These indicate that indirect impacts including international land
use impacts are significant and should appropriately be included in accordance with good
practice and the requirements of EISA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2112
Organization: Biomass Rules, LLC
Comment:
The commenter (2112.1) noted the EPA carbon emissions over time are fatally tied to the
assumption that their numbers reflect what is actually happening in real life. The coefficients
used by EPA to forecast carbon emissions and sequestration out 30 and 100 years may reflect a
few situations, but they do not come close to approximating field conditions in the US. If real life
emission values differ by only a small amount from the EPA estimates the forecasted results
change significantly. (2112.1, p. 12)
Our Response:
For this final rule we have incorporated a statistical analysis of uncertainty about critical
variables in our pathway analysis. This uncertainty analysis is explained in detail in preamble
Section V and is consistent with the specific recommendations received through our peer review
and public comments on the proposal. The uncertainty analysis focused on two aspects of
indirect land use change - the types of land converted and the GHG emission associated with
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different types of land converted. In particular, our uncertainty analysis focused on such specific
sources of information as the satellite imaging used to inform our assessment of land use trends
and the specific changes in carbon storage expected from a change in land use in each
geographic area of the world modeled. We have also performed additional sensitivity analyses
including analysis of two yield scenarios for corn and soy beans to assess the impact of changes
in yield assumptions.
This uncertainty analysis provides information on both the range of possible outcomes for
the parameters analyzed, an estimate of the degree of confidence that the actual result will be
within a particular range (in our case, we estimated a 95% confidence interval) and an estimate
of the central tendency or midpoint of the GHG performance estimate.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2116
Organization: The ProExporter Network
Comment:
The commenter (2116) noted that international land use change has been occurring since 1975
and will continue to occur with or without U.S. corn ethanol production. While total world acres
harvested of coarse grains (corn, barley and sorghum) and food grains (wheat and rice) have
been relatively stable since 1975 at about 611 million acres and 919 million acres, respectively,
annual world oilseeds acreage (soybeans, peanuts, rapeseed and sunflowers) increased from 173
million in 1975/76 to 423 million acres in 2008/09 (2116, p.2)
The commenter noted that the EISA of 2007 mandates that land use change factors be included
in life cycle analyses of renewable fuels made from biomass, including corn ethanol. That has
resulted in the use of several econometric models that purport to measure the impact of land use
change in other countries resulting from corn ethanol production in the U.S. The results of these
analyses are at odds with the realities of production and use of corn in the U.S. for the last 35
years and USDA's projections for the next ten years. (2116.1, p.3)
Our Response:
As described in the proposal, to estimate lifecycle indirect impacts of biofuel production
requires the use of economic modeling to determine the market impacts of using agricultural
commodity feedstocks for biofuels. The use of economic models and the uncertainty of those
models to accurately predict future agricultural sector scenarios was one of the main comments
we received on our analysis. While the comments and specifically the peer review supported our
need to use economic models to incorporate and measure indirect impacts of biofuel production,
they also highlighted the uncertainty with that modeling approach, especially in projecting out to
the future.
However, it is important to note that while there are many factors that impact the
uncertainty in predicting total land used for crop production, making accurate predictions of
many of these factors are not relevant to our analysis. For example different assumptions about
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economic growth rates, weather, and exchange rates will all impact future agricultural
projections including amount of land use for crops. However, we are interested only in the
difference between two biofuel scenarios holding all other changes constant. So the absolute
values and projections for crops and other variables in the model projections are not as important
as the difference the model is projecting due to an increase in biofuels production. This limits
the uncertainty of using the economic models for our analysis.
Furthermore, one of the key uncertainties associated with our agricultural sector
economic modeling that has the biggest impact on land use change results is the assumptions
around crop yields. As discussed in Section V.A.2, we are conducting sensitivity analysis
around different yield assumptions in our analysis.
Therefore, because of the fact that we are only using the economic models to determine
the difference between two projected scenarios and the fact that we are conducting sensitivity
analysis around the yield assumptions we feel it is appropriate and acceptable to use economic
models in our analysis of determining GHG thresholds in our final rule analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2117
Organization: NYU School of Law
Comment:
The commenter [[2117]] believes that EPA's decision to include international impacts is required
by legal standards and by best economic practices. [[2117.1 p.2]]
The commenter also states a court will find an agency action to be illegally arbitrary and
capricious if an agency entirely failed to consider an important aspect of the problem. 12
International GHG emissions from land use changes are clearly an important aspect of the
lifecycle GHG calculation. As EPA notes, a large variety of different activities outside the U.S.
play a major part of the full fuel lifecycle of baseline and renewable fuels. 13 Excluding
international land use changes would arbitrarily ignore an important aspect of the regulatory
issues put before EPA by Congress. Indeed, because a key goal of EISA is to reduce GHG
emissions, 14 it would be arbitrary and in contravention of congressional intent to ignore any
significant source of GHG emissions, such as international land use changes. [[2117.1 p.3]]
Our Response:
EPA believes the preamble for the final rule addresses each of the points raised by the
commenter.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2119
Organization: National Sorghum Producers
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Comment:
The commenter (2119.1) does not support the use of indirect land use change penalties. Although
the commenter recognizes the work that EPA has put into the modeling of indirect land use
change, they believe that too much is unknown and the modeling too theoretical to be used in a
final rule. (2119.1,p.7)
Our Response:
EPA has clearly acknowledged that there are uncertainties associated with these
estimates—particularly with regard to indirect land use change—and has sought to develop an
approach that manages these uncertainties. However, EPA rejects the view that the modeling
relied upon in the final rule is too uncertain or untested to provide a credible and reasonable
scientific basis for determining whether the aggregate lifecycle emissions exceed the thresholds.
If the international land use impacts were so uncertain that their impact on lifecycle GHG
emissions could not be adequately determined, this does not mean EPA could assume the
international land use change emissions are zero. High uncertainty would not mean that
emissions are small and can be ignored; rather it could mean that we could not tell whether they
are large or small. If high uncertainty meant that EPA were not able to determine that indirect
emissions from international land use change are small enough that the total lifecycle emissions
meet the threshold, then that fuel could not be determined to meet the GHG thresholds of EISA
and the fuel would necessarily have to be excluded from the program. EPA has chosen an
approach that includes biofuels with a significant international land use impact in this program.
We also have chosen an approach that quantifies uncertainty and presents the weight of currently
available evidence in making our threshold determinations.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) strongly supports EPA's inclusion of indirect land-use change (ILUC)
in biofuel GHG LCA. Including ILUC in the assessment of greenhouse gas (GHG) emissions
from biofuels is critical if GHG reduction goals are to be achieved. The projected magnitude of
ILUC emissions are large and therefore, notwithstanding the technical uncertainty, should be part
of both near and long term quantification of biofuel GHG emissions. The commenter also
supports:
-Assessment of global ILUC emissions using the best available science, and continued
refinement of this assessment as science and experience progress.
-Incorporation of ILUC emissions in regulations pertaining to biofuel GHG emissions by
practical methodologies that can be applied in the near term. (2124.1, p.46)
The commenter also endorses the use of FASOM and FAPRI to model ILUC. These models are
detailed tools with a high level of detail and data validation. FASOM has been used to model
U.S. agricultural GHG for many years. Linking the models is appropriate and allows the
analytical strengths of both models to be utilized. The commenter supports the examination of
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GTAP as an alternative modeling platform with global scope. The commenter also agrees with
use of satellite (MODIS) data to estimate type of land converted internationally but recommend
use of a larger dataset than just three years. (2124.1, pp.46-47)
Our Response:
EPA recognizes that it has had to break new scientific ground in developing a lifecycle
methodology as required by EISA. This is why the Agency employed a collaborative,
transparent and science-based approach. EPA took numerous measures to seek public comment
on our approach—including extending the comment period for the proposed rule, holding a two-
day public workshop on the lifecycle methodology, and reaching out to dozens of stakeholders,
including the biodiesel community, through individual meetings, conferences and events. EPA
also initiated an independent peer review of specific areas of our work.
Further, EPA recognizes the state of scientific knowledge continues to evolve in this area.
While the Agency is using its current lifecycle assessments to inform the regulatory
determinations for fuel pathways in this final rule, the Agency is also committing to further
reassess these determinations. As part of this ongoing effort, we will ask for the expert advice of
the National Academy of Sciences as well as other experts. EPA will request that the National
Academy of Sciences over the next two years evaluate the approach taken in this rule, the
underlying science of lifecycle assessment, and in particular indirect land use change, and make
recommendations for subsequent rulemakings on this subject.
We appreciate comments provided by NPRA supporting our use of FASOM and FAPRI
to determine indirect land use change. As recommended by NRPA and others, we have also
explored the option of also incorporating the GTAP model into our modeling framework, and
have included the results of this analysis in the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenter (2129.1) believes that it is legally necessary for EPA to include ILUC in its
lifecycle assessment and supports EPA. (2129.1, p.6)
Our Response:
EPA agrees with commenter that the language in EISA requires EPA to include
significant indirect emissions, which includes significant emissions from land use impacts.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) agrees with EPA's interpretation that EISA requires that EPA consider
both direct and indirect land use change impacts and strongly supports the inclusion of indirect
land-use change in biofuel GHG LCA. Additionally, the commenter believes that collaborative
work is needed at the international level to develop a common and appropriate methodology to
account for ILUC [[Docket number 2130.1, pp. 3 and 18-19]
Our Response:
EPA agrees with commenter that impacts from indirect land use change must be included
in our lifecycle analysis.
EPA has and continues to pursue technical cooperation and exchange with our
international partners with regard to analysis of lifecycle greenhouse gases from biofuels,
including those due to land use change.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) believes that EPA should remain cautious when estimating these
impacts and use a strong, science-based analysis to the extent possible. EPA may want to
consider regulating or prohibiting certain practices as an alternative approach to implementing
this part of EISA, unless or until it receives further guidance from Congress. (2132.1, p.8)
Our Response:
As detailed in the preamble and RIA, EPA has used up to date models, data and other
information to assess the GHG impacts of biofuels. Throughout the development of EPA's
lifecycle analysis, the Agency has employed a collaborative, transparent, and science-based
approach. EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. We believe we have in a technically appropriate manner,
implemented the mandates of EISA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2136
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Organization: Iowa Renewable Fuels Association (IRFS)
Comment:
The commenter (2136) questions if a ILUC assessment is required. The combination of the
CAA's legal scope, Congressional intent and overwhelming scientific uncertainty strongly argue
for the EPA to not attempt to assess the international ILUC of biofuels. The commenter urges
the EPA to reconsider its position that international ILUC must be included in the final rule.
[[Docket number 2136.1, p. 2]]
Our Response:
EPA has clearly acknowledged that there are uncertainties associated with indirect land
use change estimates and has sought to develop an approach that manages these uncertainties.
However, EPA rejects the view that the modeling relied upon in the final rule is too uncertain or
untested to provide a credible and reasonable scientific basis for determining whether the
aggregate lifecycle emissions exceed the thresholds. If the international land use impacts were
so uncertain that their impact on lifecycle GHG emissions could not be adequately determined,
this does not mean EPA could assume the international land use change emissions are zero.
High uncertainty would not mean that emissions are small and can be ignored; rather it could
mean that we could not tell whether they are large or small. If high uncertainty meant that EPA
were not able to determine that indirect emissions from international land use change are small
enough that the total lifecycle emissions meet the threshold, then that fuel could not be
determined to meet the GHG thresholds of EISA and the fuel would necessarily have to be
excluded from the program. EPA has chosen an approach that includes biofuels with a
significant international land use impact in this program. We also have chosen an approach that
quantifies uncertainty and presents the weight of currently available evidence in making our
threshold determinations.
Further, the statute specifically directs EPA to include in its analyses significant indirect
emissions such as significant emissions from land use changes. EPA has not ignored either the
terms "significant" or "life cycle." It is clear from EPA's assessments that the modeled indirect
emissions from land use changes are "significant" in terms of their relationship to total GHG
emissions for given fuel pathways. Therefore, they are appropriately considered in the total
GHG emissions profile for the fuels in question.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2136
Organization: Iowa Renewable Fuels Association (IRFS)
Comment:
The commenter states that the current EPA model, which assumes that distillers grains replaces
conventional feed on a pound-for-pound basis, is incorrect. With the starch gone, distillers
grains is a high protein feed ration. Due to the high protein content per pound, one pound of
distiller grains displaces more than a pound of corn and soybean meal. Factoring in the higher
displacement rate and taking into account that soybean meal is also displaced from the feed
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ration, not just corn, there is a significant positive impact on the ILUC models. [[Docket number
2136.1, p. 7]]
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) noted that current EPA analysis undervalues Dgs by only displacing 1
Ib of corn grain per Ib of Dgs, which results in an overestimate of land use change. (214 6.1, p. 6)
Our Response:
For the final rulemaking analysis, distillers grains replacement rates of corn and soybean
meal in animal feed have been updated based on the latest research by Argonne National
Laboratory in both the FASOM and FAPRI models. These replacement rates are higher and
more efficient than those used in the proposal's analysis. Details on these assumptions can be
found in the RIA and the technical reports for each respective model.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2136
Organization: Iowa Renewable Fuels Association (IRFS)
Comment:
The commenter is concerned that the draft rule seriously underestimates, even ignores, the value
of glycerin from biodiesel producers. Utilizing glycerin as a valuable coproduct and petroleum
replacement in the GHG emissions calculations would increase soybean oil-based biodiesel's
GHG reduction percentage by roughly 17 percent. The commenter urges EPA to take into
account valuable future markets as it quantifies the energy efficiency of biodiesel production.
[[Docket number 2136.1, p. 7 and Docket number 2321.1]] [[See copyrighted materials at docket
numbers 2247.1 and 2321.1 for additional information on glycerin.]]
Our Response:
Glycerin is a co-product of biodiesel production. Our proposal analysis did not assume
any credit for this glycerin product. The assumption for the proposal was that by 2022 the
market for glycerin would be saturated due to the large increase in biodiesel production in both
the U.S. and abroad and the glycerin would therefore be a waste product. We received a number
of comments that we should be factoring in a co-product credit for glycerin as there would be
some valuable use for this product in the market. Based on these comments we have included
for the final rule analysis that glycerin would displace residual oil as a fuel source on an energy
equivalent basis. This is based on the assumption that the glycerin market would still be
saturated in 2022 and that glycerin produced from biodiesel would not displace any additional
petroleum glycerin production. However, the biodiesel glycerin would not be a waste and a low
value use would be to use the glycerin as a fuel source. The fuel source assumed to be replaced
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by the glycerin is residual oil. This inclusion of a co-product credit for glycerin reduces the
overall GHG impact of biodiesel compared to the proposal analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2137
Organization: Brazilian Sugarcane Industry Association (UNICA)
Comment:
The commenter (2137.1) states that EPA should apply the same standard for assessing
international land use change to both domestic and internationally sourced feedstocks. Referring
to HR 2454, the commenter strenuously cautions EPA again applying different standards for
calculating emissions for domestically vs. foreign produced fuels. Such an approach would
undercut EPA's ability to establish the 2010 RFS2, increase fuels market uncertainty at a time of
economic stress, and likely undermine the ongoing work of EPA and stakeholders aimed at
reducing the level of uncertainty associated with these calculations and models. [[Docket number
2137.1, p. 16]]
Our Response:
The regulations finalized for RFS2 determine GHG threshold compliance on the basis of
fuel pathways, irrespective of the country where the feedstock or the fuel was produced.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2140
Organization: John Deere Agriculture & Turf Division
Comment:
The commenter (2140.1) recommends EPA and other federal agencies undertake greater study of
indirect land use impacts and not assign any international indirect land use impact values to
biofuels at this time. Attempting to assign an indirect land use value prematurely can result in
significant impacts on innovation, delays in reducing greenhouse gas emissions, and thwart
progress towards more environmental and economically sustainable production of food, fiber,
and fuel for the world's growing population. (2140.1, p.l)
The commenter noted that the proposed rule assumes land use patterns related to renewable fuels
are reflective of total global land use change patterns. This assumption ignores the reality that
decisions related to conversion of non-cropland to cropland are based on completely different
criteria than decisions of what crop to grow on a given parcel of cropland in a given year.
(2140.1, p.2) (See Docket Number 2140.1, p.2 for a more detailed discussion of this issue)
Our Response:
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 will continue to change.
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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. As part of this
ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as well as
other experts, and incorporate their advice and any updated information we receive into a new
assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in this
final rule. EPA will request that the National Academy of Sciences over the next two years
evaluate the approach taken in this rule, the underlying science of lifecycle assessment, and in
particular indirect land use change, and make recommendations for subsequent rulemakings on
this subject. This new assessment could result in new determinations of threshold compliance
compared to those included in this rule that would apply to future production (from plants that
are constructed after each subsequent rule).
To estimate lifecycle indirect impacts of biofuel production requires the use of economic
modeling to determine the market impacts of using agricultural commodity feedstocks for
biofuels. The use of economic models and the uncertainty of those models to accurately predict
future agricultural sector scenarios was one of the main comments we received on our analysis.
While the comments and specifically the peer review supported our need to use economic
models to incorporate and measure indirect impacts of biofuel production, they also highlighted
the uncertainty with that modeling approach, especially in projecting out to the future.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2143
Organization: New York State Department of Environmental Conservation
Comment:
The commenter (2143) strongly recommends that evaluation of the full lifecycle emission
impacts of fuel production should include both direct and significant indirect emissions from
land use changes.
The commenter (2143) suggests that the uncertainty in the quantitative magnitude of emissions is
not a sufficient reason for ignoring the statutory mandate to include land use change emissions.
(2143.2, p.3)
The commenter (2143) suggests that the proposed rulemaking should use a 30 year time frame
and 0 percent discount rate instead of 100 years and 2 percent discount rate when estimating the
emissions related to indirect land usage change.(2143.2, p,4)
Our Response:
EPA agrees with commenter on the need to include full lifecycle emissions and that
uncertainty does not mean that EPA can ignore impacts. Further, EPA has finalized its
assessments based on an analysis assuming 30 years of continued emission impacts with a 0
discount rate.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2148
Organization: Hornbeck Agricultural
Comment:
The commenter (2148) believes that EPA is relying on unproven techniques in an attempt to
measure international indirect land use changes (ILUC) associated with soy biodiesel production.
EPA has proposed regulations that are overreaching, deeply flawed, and counterproductive. Even
if a "climate bill" does not pass in Congress this session, the commenter believes there is logic in
the House version passed this summer that would call upon the National Academy of Sciences to
study the potential international impact for five years to avoid the adoption of any short-sighted
regulations. (2148, p.l)
Below are several points that offer a rationale for the EPA not to apply the proposed rules based
on assumptions of ILUC.
1. The commenter believes that EPA is going beyond Congressional mandate. The EISA
statute does not direct EPA to include international indirect emissions in its lifecycle
analysis of biofuels. An EPA lifecycle analysis that attempts to measure international
ILUC is unnecessary and inappropriate, given that Congress did not choose to require
such analysis.
2. The commenter noted that EPA used a new and untested method in its attempt to measure
international ILUC. There is no generally accepted scientific methodology for measuring
indirect land use change, and the International Standards Organization (ISO) has not
published standards for analyzing indirect effects.
3. The commenter noted that global land use change has occurred for many years, long
before biodiesel was produced in the U.S. Many factors including urbanization, world
population growth and dietary changes, timber and hardwood prices, etc., impact and
drive land use change. However, EPA analysis measures the conversion of Brazilian
forestland to cropland during 2001-2004, extrapolates that trend into the future, and
attributes the possible future change to U.S. production of soy biodiesel. Soy biodiesel
production is not driving land use change in the Amazon region, and any land use change
that is occurring certainly cannot be solely attributed to U.S. biodiesel.
Our Response:
Although the definition of lifecycle greenhouse gas emissions in Section 211 (o) does not
specifically mention international emissions, it would be inconsistent with the text and the intent
of this section of the Act to exclude them. The definition of lifecycle GHG emissions makes it
clear that EPA is to determine the "aggregate" emissions "related to" the "full" fuel lifecycle,
including "all stages of fuel and feedstock production and distribution". EPA is directed to
include both direct emissions and significant indirect emissions, such as significant emissions
from land use changes. A large variety of activities outside the U.S. play a major part in the full
fuel lifecycle of both the baseline fuel (gasoline and diesel fuel used as transportation fuel in
2005) and renewable fuels. For example, several stages of the lifecycle process for gasoline and
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diesel can occur overseas, including extraction and delivery of imported crude oil, and for
imported gasoline and diesel products, emissions associated with refining and distribution of the
finished product to the U.S. For imported renewable fuel, all of the emissions associated with
feedstock production and distribution, fuel processing, and delivery of the finished renewable
fuel to the U.S. occur overseas. Whether the direct or indirect emissions occur in the U.S. or
overseas does not change that they are related to the full fuel lifecycle. There is no basis in the
definition to treat direct or indirect emissions that occur overseas different from direct or indirect
emissions that occur in the U.S. Thus, EPA could not, as a legal matter, ignore those parts of a
fuel lifecycle that occur overseas.
EPA is making the GHG threshold determination based on a methodology that includes
an analysis of the full lifecycle, including significant emissions related to international land-use
change. EPA has used the best available models for this purpose, and has incorporated many
modifications to its proposed approach based on comments from the public and peer reviewers
and developing science. EPA has also quantified the uncertainty associated with significant
components of its analyses, including important factors affecting GHG emissions associated with
international land use change. The Agency has updated and refined its modeling approach since
proposal in several important ways, and EPA is confident that its modeling of GHG emissions
associated with international land use is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations described above.
However, 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 will continue to change.
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. As part of this
ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as well as
other experts, and incorporate their advice and any updated information we receive into a new
assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in this
final rule. EPA will request that the National Academy of Sciences over the next two years
evaluate the approach taken in this rule, the underlying science of lifecycle assessment, and in
particular indirect land use change, and make recommendations for subsequent rulemakings on
this subject. This new assessment could result in new determinations of threshold compliance
compared to those included in this rule that would apply to future production (from plants that
are constructed after each subsequent rule).
To quantify the lifecycle GHG emissions associated with the increase in renewable fuel
mandated by EISA, we compared the differences in total GHG emissions between two future
volume scenarios using well established-economic models. For each individual biofuel, we
analyzed the incremental GHG emission impacts of increasing the volume of that fuel to the total
mix of biofuels needed to meet the EISA requirements. The scenarios that we compared include
the same background projections about agricultural and economic conditions such as
macroeconomic growth, oil prices, crop growing conditions, exchange rates and government
policies. Thus, we isolate the effects of each type of biofuel expansion because all other factors
that affect the agricultural economy are held constant.
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The proposed rule included a detailed description of the FAPRI/Winrock approach used
to determine the type of land affected internationally. This approach uses satellite data depicting
recent land conversion trends in conjunction with economic projections from the FAPRI model
(an economic model of global agricultural markets) to determine the type of land converted
internationally. In the proposed rule we described areas of uncertainty in this approach,
illustrated the uncertainty with sensitivity analyses, and discussed other potential approaches for
this analysis. To encourage expert and stakeholder feedback, EPA specifically invited comment
on this issue, held public hearings and workshops, and sponsored an independent peer-review, all
of which specifically highlighted this part of our analysis for feedback. While there were a wide
range of views expressed in these forums, the feedback received by the Agency generally
supported the FAPRI/Winrock approach as appropriate for this analysis. For example, all five
experts that peer reviewed EPA's use of satellite imagery agreed that it is scientifically justifiable
to use historic remote sensing data in conjunction with agricultural sector models to evaluate and
project land use change emissions associated with biofuel production. Additionally, the peer
reviewers and public commenters highlighted problematic areas and suggested revisions to
improve our analysis. In preamble Section V, we describe the key revisions that were
implemented which have significantly improved our analysis based on the feedback received.
As discussed above, all five of the expert peer reviewers that reviewed our use of satellite
imagery for this analysis agreed that our general approach was scientifically justifiable.
However, all of the peer reviewers qualified that statement by describing relevant uncertainties
and highlighting revisions that would improve our analysis. Some of the public commenters
supported EPA's use of satellite imagery, while other expressed concern. In general, both sets of
public commenters—those in favor and opposed—outlined the same criticisms and suggestions
as the expert peer reviewers. Among the many valuable suggestions for satellite data analysis
provided in the expert peer reviews and public comments, several major recommendations
emerged: EPA should use the most recent satellite data set that covers a period of at least 5 years;
EPA should use higher resolution satellite imagery; EPA's analysis should consider a wider
range of land categories; EPA should improve it's analysis of the interaction between cropland,
pasture and unused or underutilized land; and EPA's analysis should include thorough data
validation and a full assessment of uncertainty. In preamble Section V, we describe these and
other recommendations and how we addressed each of them to improve our analysis. For
example, we have updated our analysis to consider satellite data from 2001-2007. Based on the
peer reviewers agreement that our general approach is scientifically justifiable, and in light of the
significant improvements made, we think that our approach represents the best available analysis
of the types of land affected internationally.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2148
Organization: Hornbeck Agricultural
Comment:
4. The commenter believes that other market factors, including input and transportation
costs, determine how farmers will put their lands to use.
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Our Response:
We agree that factors such as input and transportation costs influence how farmers will
use their land, however these factors are primarily captured in our reference case. Our
greenhouse gas emissions analysis focuses on the incremental impact of increasing renewable
fuel volumes to meet the RFS2 requirements. Since the increase in renewable fuel volumes will
increase the world price of commodities and decrease exports from the U.S., it will make
agricultural production on some new acres of land profitable in other countries. Our analysis
captures this incremental increase in new acres that results from the change in renewable fuel
volumes from our reference case to our control case.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2148
Organization: Hornbeck Agricultural
Comment:
5. The commenter believes that an increase of 300 million gallons of biodiesel (from 700
million to 1.0 billion gallons annually) as called for under the RFS2 should not result in the
substantial land use "penalty" ascribed to U.S. soy biodiesel by EPA. Any reasonable land use
penalty that might be justifiably attributed to U.S. soy biodiesel should certainly not result in
pushing soy biodiesel below the 50% GHG reduction threshold required under the statute.
Our Response:
With regard to their relationship between land use and soybean biodiesel lifecycle GHG
emissions, EPA is making the GHG threshold determination based on a methodology that
includes an analysis of the full lifecycle, including significant emissions related to international
land-use change. As described in more detail below and in Section V of this preamble, EPA has
used the best available models for this purpose, and has incorporated many modifications to its
proposed approach based on comments from the public and peer reviewers and developing
science. EPA has also quantified the uncertainty associated with significant components of its
analyses, including important factors affecting GHG emissions associated with international land
use change. As discussed below, EPA has updated and refined its modeling approach since
proposal in several important ways, and EPA is confident that its modeling of GHG emissions
associated with international land use is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations described above. As discussed
below, EPA plans to continue to improve upon its analyses, and will update it in the future as
appropriate.
The revised lifecycle assessment for soybean biodiesel predicts less overall indirect land
use change (less land needed) and less impact from the land use changed that does occur (due to
updates in types of converted land assumed). In addition, the latest IPCC guidance indicates
reduced domestic soybean N20 emissions, and updated USDA and industry data show
reductions in biodiesel processing energy use and a higher co-product credit, all of which further
reduced the modeled soybean biodiesel lifecycle GHG emissions. This has resulted in a
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significant improvement in our assessment of the lifecycle performance of soybean biodiesel as
compared to the estimate in the proposal.
EPA's final analysis indicates that, based on currently available information and our
current analysis over the range of scenarios considered, the performance of soy oil-based
biodiesel exceeds the 50% threshold.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2148
Organization: Hornbeck Agricultural
Comment:
6. The commenter noted that other measures are being implemented to address land use
change for certain sensitive areas such as Brazils Amazon region. (2148, p.l)
Our Response:
One of the major changes made to our modeling between the NPRM and FRM includes
the more detailed representation of Brazil through a new module integrated into the global
FAPRI modeling framework. The Brazil module was developed by Iowa State with input from
Brazilian agricultural sector experts and we believe it is an improvement over the approach used
in the proposal. Furthermore, it includes information that helps to address the points raised by
the commenter. For example, when the model determines the area of crop and pasture
expansion/reversion in each region in Brazil it considers the cost of deforestation in each region.
The deforestation costs are based on the various policies put in place in Brazil to limit the
amount of future deforestation. In developing the model we worked with Iowa State and
Brazilian experts to be realistic about how we modeled these policies, because based on past
experience, it would be unreasonable to assume full compliance in all regions of Brazil. More
information about the new Brazil model is included in preamble Section V.
Furthermore, we quantified major sources of uncertainty in our evaluation of the types of
land that would be affected by land conversion. Our central estimates are based on recent land
use change patterns from 2001-2007, so to the extent that the Soy Moratorium was affecting land
use changes during this period, we have captured some of those effects in our analysis.
Furthermore, our 95% confidence ranges include scenarios with less deforestation, which could
be the result of efforts like the Soy Moratorium mentioned by the commenter.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2150
Organization: American Farm Bureau Federation
Comment:
The commenter (2150.1) strongly objects to the agency's proposal related to indirect land use
changes. There is no reliable way to measure or accurately predict how the production of
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RFS2 Summary and Analysis of Comments
biofuels will affect land use change in other countries. Improved plant varieties, new
technologies and more efficient agricultural practices have produced greater crop yields of higher
quality. It is unrealistic to think that anyone can predict how agriculture will evolve in the future
based on the single variable of biofuels utilization. (Page 3)
Our Response:
EPA's lifecycle methodology required breaking new scientific ground and using
analytical tools in new ways. The work was generally recognized as state of the art and an
advance on lifecycle thinking, specifically regarding the indirect impacts of biofuels. EPA took
numerous measures to seek public comment on our approach—including extending the comment
period for the proposed rule, holding a two-day public workshop on the lifecycle methodology,
and reaching out to dozens of stakeholders, through individual meetings, conferences and events.
EPA also initiated an independent scientific peer review of specific areas of our work.
As to the comment about changes in crop yields, for this analysis we ran a base yield case
and a high yield case. This will provide two distinct model results for key parameters like total
amount of land converted by crop by country.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2154
Organization: ConocoPhillips
Comment:
The commenter (2154.1) noted that EPA has determined through their current analysis that the
indirect land use change (LUC) impacts are significant for certain fuels and have included these
impacts in the total life cycle assessment. The commenter is supportive of including these
factors, based on the best scientific data currently available. The commenter also encourages
EPA to conduct periodic evaluations to be able to capture any improvements in the modeling and
assessment technologies as they evolve. (2154.1, p.8)
Our Response:
The Agency will further reassess our determinations and lifecycle estimates. As part of
this ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as
well as other experts, and incorporate their advice and any updated information we receive into a
new assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in
this final rule. EPA will request that the National Academy of Sciences over the next two years
evaluate the approach taken in this rule, the underlying science of lifecycle assessment, and in
particular indirect land use change, and make recommendations for subsequent rulemakings on
this subject.
What Commenters Said:
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
The commenter (2157) recommends that EPA utilize a greenhouse gas (GHG) emission
methodology for rulemaking purposes that is based on sound economics and science and the
most updated information, is valid for regulatory purposes, and does not unfairly penalize U.S.
biofuel production for unrelated land use shifts in foreign nations. The commenter also
recommends that EPA implement a workable program that is simple and efficient while not
imposing undue burdens on the renewable fuel industry. Based on the issues above, the
commenter believes EPA's proposed approach for addressing emissions from international
indirect land use should be excluded. (2157 p. i-ii and 48-50)
Our Response:
Throughout the development of EPA's lifecycle analysis, the Agency has employed a
collaborative, transparent, and science-based approach. EPA's lifecycle methodology, as
developed for the RFS2 proposal, required breaking new scientific ground and using analytical
tools in new ways. The work was generally recognized as state of the art and an advance on
lifecycle thinking, specifically regarding the indirect impacts of biofuels. The Agency has
updated and refined its modeling approach since proposal in several important ways, including a
number of updates made in direct response comments from the public and peer reviewers. EPA
is confident that its modeling of GHG emissions is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations. EPA has also quantified the
uncertainty associated with significant components of its analyses, including important factors
affecting GHG emissions associated with international land use change. Lastly, EPA has strove
to create a workable program that builds off the current RFS1 program.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
The commenter (2157) makes specific suggestions for corrections to EPA's lifecycle analysis for
biodiesel:
(1) nitrogen fixing in soil was incorrectly included and if corrected would decrease GHG
lifecycle emissions by an additional 20.9 percent,
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RFS2 Summary and Analysis of Comments
Our Response:
The proposal analysis calculated N20 emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in N20 emissions. The proposal
analysis N20 factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating N20 emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
The N20 emission factors used in the proposal overestimated N20 emissions from
nitrogen fixing crops, because they were based on the 1996 IPCC guidance for N20 accounting.
As an update in 2006, IPCC guidance was changed such that biological nitrogen fixation was
removed as a direct source of N20 because of the lack of evidence of significant emissions
arising from the fixation process itself. IPCC concluded that the N20 emissions induced by the
growth of legume crops/forages may be estimated solely as a function of the above-ground and
below-ground nitrogen inputs from crop/forage residue. This change effectively reduces the
N20 emissions from nitrogen fixing crops like soybeans and nitrogen fixing hay from the 1996
to 2006 IPCC guidance.
Therefore, as part of the update to new N20 emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the N20
emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
(2) The energy balance data is out of date, co-product allocations for glycerin were not
incorporated, and global market drivers for feedstocks are not considered when updated and
included these factors would further decrease GHG lifecycle emissions by an additional 19.1
percent.
Our Response:
To the maximum extent possible, we have continued to review and update the data and
assumptions underlying our modeling tools. As part of the final rule we updated the energy use
assumptions for biodiesel production to be in line with the latest energy balance reports including
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
the University of Idaho Study. Therefore, the final rule assumes lower energy use for biodiesel
production compared to the proposal analysis. In addition, we have revised our analysis to
assume that glycerin will displace residual oil as an energy source for this final rulemaking. We
disagree, however, that global market drivers for feedstocks are not included in our models. For
example, our partial equilibrium agricultural sector models FASOM and FAPRI both take into
account that approximately 80% of the soybean is meal, whereas approximately 20% of the
soybean is oil. Profit maximization that takes into account both streams of ree is included in the
projected planting decisions of farmers. In addition, both agricultural sector models take into
account changes in macroeconomic conditions over time, such as increases in income and
population that also affect world markets for feedstocks.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
(3) EPA should analyze indirect emissions for all fuels or for none, and should compare biofuels
to the more expensive and higher carbon sources of crude they will be replacing such as tar sands
and heavy crude.
Our Response:
As required by EISA, GHG performance of biofuels is to be compared to the average
lifecycle GHG emissions of the 2005 baseline fuel pool for the type of fuel, gasoline or diesel,
being replaced to determine threshold compliance. EPA did, however, also analyze the likely
GHG benefits of the rule considering the petroleum fuel pool in 2022 including projected
sources.
The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
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RFS2 Summary and Analysis of Comments
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
(4) EPA's reference case underestimates the volume of biodiesel production in absence of an
RFS, and therefore overestimates the land use change resulting from RFS implementation.
Our Response:
EPA disagrees with this comment, any change in biofuel volumes for whatever reason
compared to a case without them would still have impacts. Even if biodiesel volumes would
have reached the mandated volumes in 2022 there is still an impact with producing these
volumes compared to a case without them. The threshold analysis mandated by EISA requires
EPA to determine the impacts of the different biofuels production which requires us to consider
two scenarios with differing volumes of biofuels. So regardless of what volume might or might
not actually be produced, our threshold analysis would still be based on two different volume
scenarios and production of any amount of biofuels would still have an impact. Furthermore,
since our analysis normalizes the greenhouse gas emissions impacts on a per BTU basis, the
effect of using different volumes in our calculations is minimized.
For this rulemaking analysis we are only considering the policy for which this analysis
was done, namely EISA. Where there are other polices on the books that would impact our
analysis, they have been accounted for but we do not project future polices that are not in place.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
(5) the commenter agrees that EPA should use a 100-year time frame, but EPA should eliminate
the arbitrary 2 percent discount rate.
Our Response:
In the proposed rule, EPA highlighted two time periods of 30 years and 100 years for
consideration in GHG lifecycle analysis. The Agency discussed the relative advantages of these,
and other, time periods. The expert peer reviewers discussed a number of justifiable time periods
ranging from 13 to 100 years. The reviewers said that longer time frames, such as 100 years,
were only appropriate if the Agency used positive discount rates to value future emissions.
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RFS2 Summary and Analysis of Comments
Almost all of the peer reviewers specifically said that a time frame of 20 to 30 years would be
justifiable based on the average life of a biofuel production facility. The reviewers and the
public commenters provided several arguments for the application of a 30 year time frame. A 30
year time period is appropriate because future emissions are less certain and more difficult to
value, so the analysis should be confined insofar as possible to the foreseeable future. Another
argument is that a near-term time horizon is consistent with the latest climate science that
indicates that swift and deep reductions of heat-trapping gasses are needed to avoid catastrophic
changes due to a warming climate. One of the reviewers said that while "there is no unassailable
basis for choosing a very specific timeframe" the expected average lifetime of a biofuel
production facility is the "most sensible anchor" for the choice of a timeframe. Alternatively, a
number of commenters argued that a 100 year time frame is the appropriate time period for GHG
lifecycle emissions analysis principally since this is the time period over which climate change
impacts are likely to occur.
Based upon the comments received from the peer review and public between after the
RFS2 proposal, EPA has decided to use a 30 year frame for assessing the lifecycle GHG
emissions. There are several reasons why the 30 year time frame was chosen. The use of the life
of a typical biofuel plant seems reasonable as a basis for the timeframe for assessing the GHG
emissions impacts of a renewable fuel. Also, the 30 year time frame focuses on GHG emissions
impacts that are more near term and, hence, more certain.
After considering the comments on discounting from the peer review and the public, EPA
decided not to discount (i.e., use a 0% discount rate) GHG emissions due to the many issues
associated with applying an economic concept to a physical parameter. First, it is unclear
whether EISA intended lifecycle GHG emissions to be converted into a metric whose
underpinnings rest on principals of economic valuation. A more literal interpretation of EISA is
that EPA should consider only physical GHG emissions. Second, even if the principle of tying
GHG emissions to economic valuation approaches were to be accepted, there would still be the
problem that there is a lack of consensus in the scientific community about the best way to
translate GHG emissions into a proxy for economic damages. Some of the issues that arise are:
how to factor in the atmospheric residence times of GHG emissions in the atmosphere, and the
evolution of atmospheric concentrations of GHG emissions through time both with and without
renewable fuels. As mentioned previously, there is also a lack of consensus as to the appropriate
discount rate to apply to GHG lifecycle emissions streams through time. Also, since EPA has
decided to base threshold assessments of lifecycle GHG emissions on a 30 year time frame, the
issue of whether to discount GHG emissions is not as significant as if the EPA had chosen the
100 year time frame to assess GHG emissions impacts
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
(6) EPA has relied upon questionable data and assumptions relating to international indirect land
use change, which disproportionally penalize U.S. biodiesel producers for unrelated land use
changes outside the United States.
Our Response:
EPA is making the GHG threshold determination based on a methodology that includes
an analysis of the full lifecycle, including significant emissions related to international land-use
change. EPA has used the best available models for this purpose, and has incorporated many
modifications to its proposed approach based on comments from the public and peer reviewers
and developing science. EPA has also quantified the uncertainty associated with significant
components of its analyses, including important factors affecting GHG emissions associated with
international land use change. The Agency has updated and refined its modeling approach since
proposal in several important ways, and EPA is confident that its modeling of GHG emissions
associated with international land use is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations described above. We plan to
continue to improve upon our analyses, and will update it in the future as appropriate.
Based on this analysis and approach, EPA has determined that biodiesel and renewable
diesel from soy oil or waste oils, fats, and greases will exceed the 50% GHG threshold for
biomass-based diesel.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
(7) The Winrock satellite data has a 70% accuracy rate.
Our Response:
All five of the expert peer reviewers that reviewed our use of satellite imagery agreed that
our general approach was scientifically justifiable. However, all of the peer reviewers qualified
that statement by describing relevant uncertainties and highlighting revisions that would improve
our analysis. Some of the public commenters supported EPA's use of satellite imagery, while
other expressed concern. In general, both sets of public commenters—those in favor and
opposed—outlined the same criticisms and suggestions as the expert peer reviewers. Among the
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RFS2 Summary and Analysis of Comments
many valuable suggestions for satellite data analysis provided in the expert peer reviews and
public comments, several major recommendations emerged: EPA should use the most recent
satellite data set that covers a period of at least 5 years; EPA should use higher resolution
satellite imagery; EPA's analysis should consider a wider range of land categories; EPA should
improve it's analysis of the interaction between cropland, pasture and unused or underutilized
land; and EPA's analysis should include thorough data validation and a full assessment of
uncertainty. In preamble Section V, we describe these and other recommendations and how we
addressed each of them to improve our analysis. Based on the peer reviewers agreement that our
general approach is scientifically justifiable, and in light of the significant improvements made,
we think that our approach represents the best available analysis of the types of land affected
internationally.
One benefit of the MODIS satellite data set that we used in our analysis is that it is
routinely and extensively validated by NASA's MODIS land validation team. NASA uses
several validation techniques for quality assurance and to develop uncertainty information for its
products. NASA's primary validation technique includes comparing the satellite classifications
to data collected through field and aircraft surveys, and other satellite data sensors. The accuracy
of the version 5 MODIS land cover product was assessed over a significant set of international
locations, including roughly 1,900 sample site clusters covering close to 150 million square
kilometers. The results of these validation efforts are summarized in a "confusion matrix" which
compares the satellite's land classifications with the actual land types observed on the ground.
We used this information to assess the accuracy and systematic biases in the published MODIS
data. In general, the validation process found that MODIS version 5 was quite accurate at
distinguishing forest from cropland or grassland. However, the satellite was more likely; for
example, to confuse savanna and shrubland because these land types can look quite similar from
space. Using the data validation information from NASA about which types of land MODIS
tends to confuse which each other, our Monte Carlo analysis was able to account for systematic
misclassifications in the MODIS data set. More information about our data validation and
uncertainty assessment procedures is available in RIA Chapter 2.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
(8) EPA calculations attribute all forest harvesting emissions to indirect land use emissions to
agriculture.
Our Response:
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
EPA disagrees with this comment. We do not attribute all forest harvesting emissions to
indirect land use emissions, we first start with modeling how much indirect land use change there
would be based on economic analysis that isolates the impacts and land use required for the
specific biofuel in question. So the amount of land impacted is very specific to only biofuel
production. In terms of what types of land would be converted into the new land required we
rely on the satellite data for recent trends for types of land converted to agriculture. We only
consider the trends of what types of land are converted to agriculture for our analysis. Our use of
satellite data is only for trends not for calculating total acres of land use change, that is based on
our economic models.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
(9) Emissions resulting from natural deforestation, forest fires, disease, and climate damage were
also charged to agriculture (yet events or land use changes that resulted in the land having more
carbon was excluded from the calculations.
Our Response:
As mentioned in our answer to #10 below, our emissions factors reflect the net carbon
changes over time, which account for both natural disturbances as well as factors increasing
carbon. Furthermore, to the extent natural disturbances lowers carbon in a forest, the emissions
from forest conversion are decreased. The soil sequestration by crops is also factored in, and if a
crop results in more soil carbon then the ecosystem converted than that is included in the analysis
and would be a benefit for the biofuel.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
(10) EPA's assumption that trees live forever is incorrect and contrary to established United
Nations Intergovernmental Panel on Climate Change (IPCC) guidelines. Carbon losses
associated with natural disturbances and mortality should be included in the calculation. These
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RFS2 Summary and Analysis of Comments
factors have a far greater impact on GHG emissions than lost sequestration and can have a huge
impact on emission calculations.
(lOa) Accurately accounting for natural disturbances in soy-based biodiesel's GHG emission
profile would decrease GHG emissions by an additional 25 percent compared to baseline
petroleum.
(lOb) The inclusion of accurate assumptions regarding both natural disturbances and mortality
could decrease GHG emissions by an additional 55 percent compared to baseline petroleum.
Our Response:
In the proposed rule, to estimate annual forgone forest sequestration, we used IPCC
default data for the growth rates of forests greater than 20 years old. The expert peer reviewers
noted that these estimates could be refined with more detailed information from the scientific
literature. Many of the public commenters were also concerned that EPA's approach
overestimated foregone sequestration because it did not adequately account for natural
disturbances, such as fires and disease. To address these comments, our analysis has been
updated with peer reviewed studies of long-term growth rates for both tropical and temperate
forests. These estimates are based on long-term records (i.e., monitoring stations in old-growth
forests for the tropics and multi-decadal inventory comparisons for the temperate regions) and
reflect all losses/gains over time. These studies show that the old-growth forests in the tropics
that many once assumed to be in "steady state" (i.e., carbon gains equal losses) are in fact still
gaining carbon. In summary, our analysis now includes more conservative foregone forest
sequestration estimates that account for natural gains and losses over time.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
(11) EPA's methodology assumes that 20 percent of the new land dedicated to soybean
cultivation comes from Paraguay. In the absence of credible land use data for Paraguay, EPA
relied upon a world average based on 10 countries. Properly accounting for this would reduce
the GHG score for soy-based biodiesel by 20 percent in relation to petroleum.
Our Response:
In the proposed rule analysis we had only developed satellite data analysis and land
conversion emissions factors for 10 of the most important regions (including 35 countries), with
a weighted average applied to the rest of the world. Paraguay was not one of the 35 countries
covered in our proposed rule analysis. We have since completed a global satellite data and land
conversion emissions factor analysis covering over 750 distinct regions across 160 countries.
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
This was an analytical improvement that we committed to do in the proposed rule. Our updated
analysis includes the evaluation of Paraguay recommended by the commenter.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
(12) EPA's international indirect land use calculations assume that 10 percent of new land comes
from India. India currently has over 61 million acres of fallow land, of which approximately 60%
is currently fallow. Emissions associated with international indirect land use changes in India
will be zero under any reasonable assumptions relating to increased production demand.
Our Response:
As discussed in preamble Section V, we used well-established economic models to
project the amount and location of international cropland and pasture land conversions. In some
of the scenarios analyzed, we project biofuel-induced cropland expansion in India. This crop
expansion in India would require soil to be plowed on land that would otherwise not be used for
crop production. Based on numerous studies synthesized in the IPCC guidelines, we know that
this would cause positive carbon releases to the atmosphere. To the extent that biomass is also
cleared as part, the net emissions impact would be greater. In some of our scenarios, however,
we do project crop and/or pasture abandonment in India. In this case we follow IPCC guidelines
to account for carbon uptake on land previously used for agriculture.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
(13) EPA inaccurately assumes that significant amounts of pastureland would be converted to
cropland. Appropriately allocating grassland would decrease GHG emissions by an additional 25
percent compared to baseline diesel fuel.
Our Response:
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RFS2 Summary and Analysis of Comments
As explained in preamble Section V, one of the major changes made to the FAPRI model
between the NPRM and FRM includes the more detailed representation of Brazil through a new
integrated module. The Brazil module was developed by Iowa State University with input from
Brazilian agricultural sector experts and we believe it is an improvement over the approach used
in the proposal. The new Brazil module also explicitly accounts for changes in pasture acres,
therefore accounting for the competition between crop and pasture acres. Furthermore, the
Brazil module explicitly models livestock intensification, the practice of increasing the number
of heads of cattle per acre of land in response to higher commodity prices or increased demand
for land.
In addition to modifying how pasture acres are treated in Brazil, we also improved the
methodology for calculating pasture acreage changes in other countries. We received several
comments through the public comment period and peer reviewers supporting a better analysis of
the interaction between crops, pasture, and livestock. In the NPRM, although we accounted for
GHG emissions from livestock production (e.g., manure management), we did not explicitly
account for GHG emissions from changes in pasture demand. In response to comments received,
our new methodology accounts for changes in pasture area resulting from livestock fluctuations
and therefore captures the link between livestock and land used for grazing. Based on regional
pasture stocking rates (livestock per acre), we now calculate the amount of land used for
livestock grazing. The regional stocking rates were determined with data on livestock
populations from the UN Food and Agricultural Organization (FAO) and data on pasture area
measured with agricultural inventory and satellite-derived land cover data. As a result of this
change, in countries where livestock numbers decrease, less land is needed for pasture.
Therefore, unneeded pasture acres are available for crop land or allowed to revert to their natural
state. In countries where livestock numbers increase, more land is needed for pasture, which can
be added on abandoned cropland or unused grassland, or it can result in deforestation. We
believe this new methodology provides a more realistic assessment of land use changes,
especially in regions where livestock populations are changing significantly. For additional
information on the pasture replacement methodology, see RIA Chapter 2.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
(14) EPA's assumptions regarding the rate of wood harvesting is inconsistent with actual
harvesting practices and other assumptions with respect to biomass inventory. Correcting these
assumptions could reduce GHG emissions associated with indirect land use emissions by as
much as 10 percent. (2157 p. ii-iii)
Our Response:
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
As the commenter states, some wood felled during timber harvest and deforestation is
used in wooden products (e.g., furniture) that retain biogenic carbon for a long period of time.
Emissions from forest products can also occur over several years or decades.
With the addition of the forestry module to the FASOM domestic modeling, FASOM
takes into account both the carbon stored in harvested wood products (HWP) and the emission
streams associated with them over time for domestic forests. Thus, wood products are accounted
for in the domestic modeling for the final rulemaking. For details on these domestic HWP
calculations, see the RIA 2.4.4.1.
Some commenters argued that consideration of the use of harvested wood in products
would decrease land use change emissions and reduce the impacts of biofuel production. For the
international land use analysis in the proposed rule, we investigated the share of cleared forest
biomass that is typically used in harvested wood products (HWP). However, we did not account
for this factor in the proposed rule after it was determined that HWP would have a very small
impact on the magnitude of international land use change emissions.
A number of commenters expressed concern that we did not account for HWP, and they
argued that HWP would be more significant than we had determined. However, in response to
specific questions on this topic, all of the expert peer reviewers agreed that EPA had properly
accounted for HWP and other factors (e.g., land filling) that could prevent or delay emissions
from land clearing. One of the peer reviewers noted that forests converted to croplands are
generally driven by interests unrelated to timber, and thus the trees are simply burned and
exceptions are probably of minor importance.
To study this issue further, we looked at FAO timber volume estimates for 111
developing countries, and published literature on the share of harvested timber used in wood
products and the oxidation period for wood products, such as wood-based panels and other
industrial roundwood. Consistent with the peer reviewers' statements, our analysis concluded
that even in countries with high rates of harvested timber utilization, such as Indonesia, a very
small share of harvested forest biomass would be sequestered in HWP for longer than 30 years.
The details of our HWP analysis are discussed further in RIA Chapter 2.
This is an area for further work, but based on our analysis, and the feedback from expert
commenters, we do not expect that consideration of HWP would have a significant impact on the
magnitude of GHG emissions from international deforestation in our analysis. Furthermore, the
range of outcomes from consideration of HWP is indirectly captured in our assessment of forest
carbon stock uncertainty.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
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RFS2 Summary and Analysis of Comments
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
The commenter (2157) notes that EPA's analysis of indirect land use changes are not based on
the "best available science" or international standards. Extensive comments are offered on
various criteria, but the commenter identifies 7 main issues (each discussed in-depth): (1)
inconsistent system boundaries, (2) lack of reliable data, (3) failure to adequately address
allocation issues, (4) lack of transparency and reproducibility, (5) inadequate analysis and
explanation of uncertainty, (6) insufficient sensitivity analysis, and (7) lack of validation. (2175
p. 51-58)
Our Response:
Throughout the development of EPA's lifecycle analysis, the Agency has employed a
collaborative, transparent, and science-based approach. EPA's lifecycle methodology, as
developed for the RFS2 proposal, required breaking new scientific ground and using analytical
tools in new ways. The work was generally recognized as state of the art and an advance on
lifecycle thinking, specifically regarding the indirect impacts of biofuels. The Agency has
updated and refined its modeling approach since proposal in several important ways, including a
number of updates made in direct response comments from the public and peer reviewers. EPA
is confident that its modeling of GHG emissions is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations. EPA has also quantified the
uncertainty associated with significant components of its analyses, including important factors
affecting GHG emissions associated with international land use change.
Further, to ensure the Agency made its decisions for this final rule on the best science
available, EPA conducted a formal, independent peer review of key components of the analysis.
The reviews were conducted following the Office of Management and Budget's peer review
guidance that ensures consistent, independent government-wide implementation of peer review,
and according to EPA's longstanding and rigorous peer review policies. In accordance with
these guidelines, EPA used independent, third-party contractors to select highly qualified peer
reviewers. The reviewers selected are leading experts in their respective fields, including
lifecycle assessment, economic modeling, remote sensing imagery, biofuel technologies, soil
science, agricultural economics, and climate science. They were asked to evaluate four key
components of EPA's methodology: (1) land use modeling, specifically the use of satellite data
and EPA's proposed land conversion GHG emission factors; (2) methods to account for the
variable timing of GHG emissions; (3) GHG emissions from foreign crop production (both the
modeling and data used); and (4) how the models EPA relied upon are used together to provide
overall lifecycle estimates.
One of the main comments we received on the NPRM on our choice of models was the
issue of transparency. Several comments were concerned that the results of EPA's modeling
efforts can not be duplicated outside the experts who developed the models and conducted the
analysis used by EPA in the proposal. Upon the release of the proposal, EPA requested
comment on the use of these various models. EPA conducted a number of measures to gather
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
comments, including the public comment period upon release of the NPRM analysis, holding a
public workshop on the lifecycle methodology, and conducting a peer review of the lifecycle
methodology. Specifically, one of the major tasks of the peer review of EPA's lifecycle GHG
methodology was to review and comment on the use of the various models and their linkages.
The response we received through the peer review is supportive of our use of the FASOM and
FAPRI models, affirming that they are the strong and appropriate tools for the task of estimating
land use changes stemming from agricultural economic impacts due to changes in biofuel policy.
In addition, in an effort to garner as useful comments as possible and to be as transparent
as possible about the modeling process, EPA supplied in the docket technical documents for the
FASOM and FAPRI models, the output received by EPA from each model, and the models
themselves such that the public and commenters could learn and examine how each model
operates.
Building upon the support for the use of the FASOM and FAPRI models, a number of
important enhancements were made to both models in response to comments received through
the public comment system and through the peer review, and in consultation with various experts
on domestic and international agronomics. These enhancements include updated substitution
rates of corn and soybean meal for distillers grains (DG) based on recent scientific research by
Argonne National Laboratory, the addition of a corn oil from the dry mill ethanol extraction
process as a source of biodiesel, the full incorporation of FASOM's forestry model that
dynamically interacts with the agriculture sector model in the U.S., as well as the addition of a
Brazil regional model to the FAPRI modeling system. All of these enhancements are discussed
in more detail in the rule's preamble and RIA. In addition to the model enhancements we also
conducted a sensitivity analysis on yields as part of our final rule analysis. These updates to our
modeling and the sensitivity analysis were done in response to public comments specifically
asking for this to add transparency to the modeling and modeling results.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
The commenter (2157) is concerned that EPA has included indirect land use changes that occur
outside of the U.S., given that nothing in the definition of "significant indirect" emissions
indicates that it must consider these and they are highly speculative at this time. Significant
discussion follows on pages (2175 p. 61-68).
Our Response:
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RFS2 Summary and Analysis of Comments
Although the definition of lifecycle greenhouse gas emissions in Section 211 (o) does not
specifically mention international emissions, it would be inconsistent with the text and the intent
of this section of the Act to exclude them. The definition of lifecycle GHG emissions makes it
clear that EPA is to determine the "aggregate" emissions "related to" the "full" fuel lifecycle,
including "all stages of fuel and feedstock production and distribution". EPA is directed to
include both direct emissions and significant indirect emissions, such as significant emissions
from land use changes. A large variety of activities outside the U.S. play a major part in the full
fuel lifecycle of both the baseline fuel (gasoline and diesel fuel used as transportation fuel in
2005) and renewable fuels. For example, several stages of the lifecycle process for gasoline and
diesel can occur overseas, including extraction and delivery of imported crude oil, and for
imported gasoline and diesel products, emissions associated with refining and distribution of the
finished product to the U.S. For imported renewable fuel, all of the emissions associated with
feedstock production and distribution, fuel processing, and delivery of the finished renewable
fuel to the U.S. occur overseas. Whether the direct or indirect emissions occur in the U.S. or
overseas does not change that they are related to the full fuel lifecycle. There is no basis in the
definition to treat direct or indirect emissions that occur overseas different from direct or indirect
emissions that occur in the U.S. Thus, EPA could not, as a legal matter, ignore those parts of a
fuel lifecycle that occur overseas.
EPA understands that including international indirect land use change is a key decision
and that there is significant uncertainty associated with it. That is why we have taken an
approach that quantifies that uncertainty and presents the weight of currently available evidence
in making our threshold determinations.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
The commenter (2157) notes that EPA's approach to address indirect emissions from
international land use is further flaws in 3 ways: (1) EPA's focus on two scenarios is
inappropriate and substantially overestimates the potential impacts of biofuel production in the
United States on land use changes outside the United States, (2) EPA's use of satellite data from
2001-2004 is inappropriate, and (3) EPA's lifecycle analysis relating to the global consequences
of indirect emissions is inaccurate and must incorporate a number of factors omitted from the
original analysis. Each point is discussed in more detail on (2175 p. 76-86).
Our Response:
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
Comments (1), and (3) are addressed in the previous responses. Comment (2) concerning
the use of 2001 - 2004 satellite data, we have updated our analysis for the final rulemaking and
are now using 2001 - 2007 satellite data in our analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
The commenter (2157) notes that a lifecycle analysis must not include disproportionate treatment
of crop-based biofuels. They cite two main criticisms: EPA must consider direct land use
changes associated with petroleum and indirect emissions of baseline gasoline, and adequately
explain why it seems them not to be "significant." Detailed discussion of both points is
presented in (2157 p. 86-89).
Document No.: EPA-HQ-OAR-2005-0161-2168
Organization: First United Ethanol, LLC
Comment:
The commenter (2168) noted that land use change is not applied to the GHG emissions
calculation for gasoline which results in an unfair comparison of biofuels to gasoline or other
fuels. The commenter questions if not all of the energy requirements to locate oil reserves,
extraction of the oil, transportation of the oil, refining of the oil and transportation of the refined
products should be included? These energy requirements all vary widely depending on the
source and type of the oil being refined. Gasoline is gasoline but the GHG emissions vary widely
depending on the "feedstock" of the oil. The commenter also questioned what is the GHG
calculation for the energy requirements to protect the world's oil supplies and shipping lanes?
The commenter believes that that value should be calculated all the way down to the steel used
for armor plating to protect our American soldiers from lEDs. (2168, pp.2-3)
The commenter noted that EPA reported in the RFS2 that it is compelled to include significant
indirect emission impacts including those due to land use changes in other countries. The data
indicate that excluding the international land use change would result in corn ethanol having an
approximately 60% reduction in lifecycle GHG emissions compared to petroleum gasoline
regardless of timing or discount rate used. The commenter believes that this theory leads one to
believe that if that same impact were applied to gasoline, corn-based ethanol would have a much
larger reduction capacity on emissions. (2168, p.3)
Our Response:
The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
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RFS2 Summary and Analysis of Comments
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
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Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
We also performed an estimate of land use change emissions associated with oil
extraction and production to determine if the value was significant enough to be included in our
petroleum baseline calculation. As oil sands production incurs a greater degree of land use
change versus conventional crude oil production, we made an estimate of the emissions from the
conversion of Alberta forest for oil sands production. Using literature values, we found that land
use change emissions for oil sands were negligible compared to the total well-to-tank values and
did not change the overall petroleum baseline values. A more complete discussion of our
analysis can be found in Chapter 2.5.7 of the RIA.
We also do not believe that emissions arising from military activities can be readily
attributed to the protection of oil imports. Military activities, even in world regions that
represent vital sources of oil imports, undoubtedly serve a broader range of security and foreign
policy objectives than merely protecting oil supplies. In the peer review of the energy security
analysis that EPA commissioned, a majority of peer reviewers believed that U.S. military costs
should be excluded absent a widely agreed methodology for estimating this component of U.S.
energy security. Since military impacts were not considered for the energy security analysis in
this final rule, they were also excluded from any lifecycle GHG analyses
Furthermore, increased domestic consumption of renewable fuels is expected to decrease
oil demand and thus reduce oil imports. However, an incremental reduction in oil imports is not
expected to cause an analogous reduction in U.S. military expenditures and activities. Hence,
even if we were able to attribute GHG emissions to the protection of oil imports, it is unlikely
that there would be a decrease in military-related GHG emissions as a result of this rule. More
detail on this topic can be found in the Energy Security Analysis in Chapter 5 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2174
Organization: Illinois Soybean Association
Comment:
The commenter (2174) feels strongly that EPA does not recognize the evidence that soy
biodiesel use in the United States does not drive international land use change. The commenter
noted that the EPA analysis uses worldwide land converted to cropland from 20012004 and
extrapolates that into the future. Since there was very little U.S. soy biodiesel produced from
20012004, it is illogical how EPA justifies attributing future land conversion to soy biodiesel. If
Brazilian land use change is a key factor then past and recent trends in Brazilian soy planted area
should be a telling data point. In fact, Brazilian soy area increased most significantly in years
prior to the existence of U.S. biodiesel production. In the last five years, when U.S. biodiesel
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production has increased exponentially, Brazilian soy area has remained relatively flat. U.S.
biodiesel use does not drive international land use decisions and certainly cannot be singled out
for responsibility for all land use changes. The commenter believes that if soy biodiesel is
excluded, the biomass-based diesel schedule under RFS2 cannot be achieved. (2174, p.l)
Our Response:
To quantify the lifecycle GHG emissions associated with the increase in renewable fuel
mandated by EISA, we compared the differences in total GHG emissions between two future
volume scenarios using well established-economic models. For each individual biofuel, we
analyzed the incremental GHG emission impacts of increasing the volume of that fuel to the total
mix of biofuels needed to meet the EISA requirements. The scenarios that we compared include
the same background projections about agricultural and economic conditions such as
macroeconomic growth, oil prices, crop growing conditions, exchange rates and government
policies. Thus, we isolate the effects of each type of biofuel expansion because all other factors
that affect the agricultural economy are held constant.
The historical biodiesel and soybean statistics cited by the commenter are not comparable
with our model predictions. During the time period discussed by the commenter (i.e., 2004 to
2008) many of the conditions that can affect the agricultural economy were changing. For
example, oil prices spiked, soybean blight became more prevalent in Brazil, exchange rates were
adjusted, and corn ethanol volumes also expanded substantially. In other words, the increase in
soy-based biodiesel production was not the only important factor that changed during the period.
Therefore, the fact that soybean acreage contracted in Brazil during this period does not refute
model predictions about how Brazil responds to U.S. biodiesel production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2190
Organization: Illinois River Energy, LLC.
Comment:
The commenter [[2190]] state the international land use penalties are based on complicated
models that are strongly influenced by independent model variables whose assumed values are
just not backed by verifiable evidence.[[#2190 p.l]]
Our Response:
As detailed in the preamble and RIA, EPA has used the most up to date models, data and
other information in its LCA. These indicate that indirect impacts including international land
use impacts are significant and should appropriately be included in accordance with good
practice and the requirements of EISA.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2203
Organization: University of Illinois at Chicago
Comment:
The commenter [[2003]] states that their studies show that there are significant differences
regarding the accuracy with which international land use change can be determined compared to
the accuracies achievable for domestic land use change assessments. [[#2003 p.l]]
The commenter [[2003]] finds that EPA's reliance on MODIS imagery to determine prior land
use of international crop acres (1km and 500m spatial resolution, respectively) produces results
with high inaccuracies. In fact, the combined error range may exceed the predicted land use
change between important ecosystem transitions for biofuels analyses such as the conversion of
tropical rainforest to cropland in Brazil. [[#2003 p.3]]
The commenter [[2003]] recommends that land cover products based on high resolution satellite
imagery be combined with existing cropping pattern information for international transition
regions associated with indirect land use change are created. [[#2003 p.3]]
The commenter cites extensive studies and data presented on pages 4-30.
Our Response:
All five of the expert peer reviewers that reviewed our use of satellite imagery agreed that
our general approach was scientifically justifiable. However, all of the peer reviewers qualified
that statement by describing relevant uncertainties and highlighting revisions that would improve
our analysis. Some of the public commenters supported EPA's use of satellite imagery, while
other expressed concern. In general, both sets of public commenters—those in favor and
opposed—outlined the same criticisms and suggestions as the expert peer reviewers. Among the
many valuable suggestions for satellite data analysis provided in the expert peer reviews and
public comments, several major recommendations emerged: EPA should use the most recent
satellite data set that covers a period of at least 5 years; EPA should use higher resolution
satellite imagery; EPA's analysis should consider a wider range of land categories; EPA should
improve it's analysis of the interaction between cropland, pasture and unused or underutilized
land; and EPA's analysis should include thorough data validation and a full assessment of
uncertainty. In preamble Section V, we describe these and other recommendations and how we
addressed each of them to improve our analysis. Based on the peer reviewers agreement that our
general approach is scientifically justifiable, and in light of the significant improvements made,
we think that our approach represents the best available analysis of the types of land affected
internationally.
One benefit of the MODIS satellite data set that we used in our analysis is that it is
routinely and extensively validated by NASA's MODIS land validation team. NASA uses
several validation techniques for quality assurance and to develop uncertainty information for its
products. NASA's primary validation technique includes comparing the satellite classifications
to data collected through field and aircraft surveys, and other satellite data sensors. The accuracy
of the version 5 MODIS land cover product was assessed over a significant set of international
locations, including roughly 1,900 sample site clusters covering close to 150 million square
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kilometers. The results of these validation efforts are summarized in a "confusion matrix" which
compares the satellite's land classifications with the actual land types observed on the ground.
We used this information to assess the accuracy and systematic biases in the published MODIS
data. In general, the validation process found that MODIS version 5 was quite accurate at
distinguishing forest from cropland or grassland. However, the satellite was more likely; for
example, to confuse savanna and shrubland because these land types can look quite similar from
space. Using the data validation information from NASA about which types of land MODIS
tends to confuse which each other, our Monte Carlo analysis was able to account for systematic
misclassifications in the MODIS data set. More information about our data validation and
uncertainty assessment procedures is available in RIA Chapter 2.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) notes the unresolved issues, uncertainty and lack of scientific consensus
on the LC GHG emission impact of biofuels related to land use change. Regarding the
contribution of indirect or market-mediated GHG emissions effects from land-use changes
attributable to expanded biofuels production, the commenter supports EPA's inclusion of these
effects in its assessment of the GHG impacts of the RFS2. Since the science, methods and data
is rapidly evolving, the commenter urges EPA to revisit this topic as part of a formal periodic
technical review process. [[Docket number 2233.2, pp. 45-46]]
Our Response:
EPA is basing its GHG threshold compliance determinations for this rule on an approach
that considers the uncertainty in our assessments and other information available to the Agency.
For fuel pathways with a significant land use impact, the evidence considered includes the best
estimate as well as the range of possible lifecycle greenhouse gas emission results based on
formal uncertainty and sensitivity analyses conducted by the Agency.
The Agency will further reassess our determinations and lifecycle estimates. As part of
this ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as
well as other experts, and incorporate their advice and any updated information we receive into a
new assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in
this final rule. EPA will request that the National Academy of Sciences over the next two years
evaluate the approach taken in this rule, the underlying science of lifecycle assessment, and in
particular indirect land use change, and make recommendations for subsequent rulemakings on
this subject.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2234
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Organization: Energy & Resources Group University of California
Comment:
The commenter [[2234]] states that the treatment of emissions using the net present value of
emission flows over 100-years is a poor choice for several reasons. The commenter recommends
using a shorter time period or including the increasingly low probability that these systems will
remain in place decades into the future. The commenter also recommends discounting damages,
(or a reasonable proxy) rather than discounting physical emission flows. [[2234.1 p.l]]
The commenter also states that inadequate time was provided to review the large number of
models used in this rulemaking. [[2234.1 p.4]]
Our Response:
In the proposal, we considered several options for the timeframe over which to measure
lifecycle GHG impacts and the possibility of discounting those impacts. Based on peer review
recommendations and other comments received, EPA is finalizing its assessments based on an
analysis assuming 30 years of continued emission impacts after the program is fully phased in by
2022 and without discounting those impacts.
In order to maximize the opportunity for stakeholders to review and comment upon
EPA's approach, the comment period for this rulemaking was extended by an additional 60 days.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2245
Organization: Illinois Corn Growers Association, et.al.
Contributors to this comment letter include: Iowa Corn Growers Association, Iowa Soybean
Association, Illinois Soybean Association, Illinois Renewable Fuels Association, Kentucky
Soybean Association, Minnesota Soybean Growers Association, Missouri Corn Growers
Association, Missouri Soybean Association, Monsanto, the National Corn to Ethanol Research
Center, Nebraska Corn Board, Nebraska Soybean Association, Novozymes, Ohio Soybean
Association, South Dakota Soybean Association, University of Illinois Chicago, Energy
Resources Center, University of Illinois Champaign-Urbana plant breeding, animal nutrition and
agronomy, DuPont, Ethanol Technologies, John Deere, and the U.S. Grains Council
Comment:
The commenters (2245.1) noted that land use change in the context of global demand for
agricultural land needs to be incorporated when making predictions of emissions due to indirect
land use change. (2245.1, p.23) (See Docket Number 2245.1, pp.23-24 for a discussion on this
issue)
Our Response:
EPA believes that its analysis properly takes into account the growth in global population
and food demand over time in the FAPRI modeling analysis. However, to correctly model the
impact of increased demand for renewable fuels, one must observe the difference that results
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from a change in only the demand for renewable fuel in a given time period. Thus, although an
increase crop production for renewable fuel in a given period may indeed have occurred due to
increasing demand for food over time in a future time period, this ignores the increased demand
for renewable fuel in that future time period.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2245
Organization: Illinois Corn Growers Association, et.al.
Comment:
The commenters believe that EPA needs to correct its land use requirements for corn based
ethanol with accurate corn and soybean meal coproduct displacement values. EPA has
inaccurately credited the displacement of soybean meal and corn across species from distillers"
dried grain with soluble (DDGS) as a 1 for 1 displacement resulting in inaccurately higher corn
and soybean acreage requirements for biofuels. Peer reviewed scientific literature consistently
indicates that 1 kg of DDGS can replace between 0.50 and 0.70 kg of corn and between 0.40 and
0.60 kg of soybean meal. (2245.1 p.24)
Our Response:
For the final rulemaking analysis, distillers grains replacement rates of corn and soybean
meal in animal feed have been updated based on the latest research by Argonne National
Laboratory in both the FASOM and FAPRI models. These replacement rates are higher and
more efficient than those used in the proposal's analysis. In addition, co-product credits are
attributed to distillers grains in EPA's analysis. Details on these assumptions can be found in the
RIA and the technical reports for each respective model.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2245
Organization: Illinois Corn Growers Association, et.al.
Comment:
The commenters also believe that EPA should correct their later year DDGS yield assumptions;
reducing DDGS yield from 17 Ibs/bu across all dry grind plants to 17 Ibs/bu from the 78% of the
plants not incorporating backend oil extraction and 16.4 Ibs/bu for the 22% of plants the EPA is
assuming will adopt backend oil extraction technology. On average, this results in a yield of 16.7
Ibs/bu. (2245.1, p.24)
Our Response:
For the final rulemaking analysis, EPA estimates that by 2022, 70% of dry mill ethanol
plants will adopt corn oil extraction technology, 20% will adopt fractionation technology, and
10% will not adopt either technology. Details on the assumptions used in the final rulemaking
analysis in regards to corn oil extraction, fractionation, and DG production can be found in the
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RIA. Scientific assumptions that are more up to date than those used in this analysis will be
considered in future updates to the analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2245
Organization: Illinois Corn Growers Association, et.al.
Comment:
The commenters believe that EPA needs to credit corn based ethanol with the additional
coproducts resulting from backend oil extraction for biodiesel, corn stover utilized as an
alternative to coal for electricity generation, and the reduction in gasoline emissions resulting
from the utilization of ethanol. GHG reduction considerations for new coproducts were not
considered in the proposed rule. If the EPA is going to include the mass reduction from backend
oil extraction, it needs to include the coproduct credit from the utilization of backend oil as a
feedstock for biodiesel production which reduces the dry grind corn ethanol carbon footprint by
an estimated 3.11 gC02e/MJ. (2245.1, pp.24-25)
Our Response:
For the final rulemaking analysis, coproducts from corn ethanol, such as corn oil from
extraction and fractionation, have been attributed credits. For more information on credits for
coproducts attributed to various renewable fuels, please refer to the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2245
Organization: Illinois Corn Growers Association, et.al.
Comment:
The commenters concur with the determination by the 2009/28/EC of the European Parliament
and of the Council on the Promotion of the Use of Energy From Renewable Fuel Sources to
delay the incorporation of an indirect land use change determination value for any renewable
fuels until a methodology and the best available scientific evidence can be brought to bear
(Directive 2009/28/EC, 2009). The commenters believe the efforts initiated by the Department of
Energy at Oak Ridge National Laboratories provide the most promising approach to creating a
common agreed upon approach and an understanding of the data needs for quality indirect land
use determinations. (2245.1, p.29)
Our Response:
EPA believes that compliance with the EISA mandate — determining "the aggregate
GHG emissions related to the full fuel lifecycle, including both direct emissions and significant
indirect emissions such as land use changes" — makes it necessary to assess those direct and
significant indirect impacts that occur not just within the United States, but also those that occur
in other countries.
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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 will continue to change.
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. As part of this
ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as well as
other experts, and incorporate their advice and any updated information we receive into a new
assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in this
final rule. EPA will request that the National Academy of Sciences over the next two years
evaluate the approach taken in this rule, the underlying science of lifecycle assessment, and in
particular indirect land use change, and make recommendations for subsequent rulemakings on
this subject. This new assessment could result in new determinations of threshold compliance
compared to those included in this rule that would apply to future production (from plants that
are constructed after each subsequent rule).
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) believes that the inclusion of international indirect land use changes in
its lifecycle analysis for biodiesel is arbitrary and capricious. The commenter bases their
position on the following points:
A. EPA assumptions that biofuel production in the U.S. will lead to "significant" land use
changes do not accurately reflect the real world and thus are arbitrary. EPA assumes that indirect
emission related to international land use changes are "significant," relying on highly criticized
and questionable data. GHG calculations from land use must appropriately account for improved
agriculture yields and efficiencies. Real world evidence shows that biodiesel production has
little, if any, impacts on land use changes. The demand for oils for biofuel production in the U.S.
will not result in significant indirect land use changes internationally. [[Docket number 2249.2,
pp. 66-79]]
B. EPA's approach to addressing indirect emission from international land use changes is
arbitrary. EPA's focus on two scenarios is inappropriate and substantially overestimates the
potential impacts of biofuel production in the United States on land use changes outside the
United States. EPA's use of satellite data from 2001-2004 is inappropriate. EPA's lifecycle
analysis relating to the global consequences of indirect emissions are inaccurate and must
incorporate a number of factors omitted from the original analysis. [[Docket number 2249.2, pp.
79-88]]
[[See docket number 2249.2, pp. 66-88 for comprehensive discussion of the commenter's points
listed above.]]
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Our Response:
The EISA statute specifically directs EPA to include in its analyses significant indirect
emissions such as significant emissions from land use changes. EPA has not ignored either the
terms "significant" or "life cycle." It is clear from EPA's assessments that the modeled indirect
emissions from land use changes are "significant" in terms of their relationship to total GHG
emissions for given fuel pathways. Therefore, they are appropriately considered in the total
GHG emissions profile for the fuels in question.
Throughout the development of EPA's lifecycle analysis, the Agency has employed a
collaborative, transparent, and science-based approach. EPA's lifecycle methodology, as
developed for the RFS2 proposal, required breaking new scientific ground and using analytical
tools in new ways. The work was generally recognized as state of the art and an advance on
lifecycle thinking, specifically regarding the indirect impacts of biofuels.
However, the complexity and uncertainty inherent in this work made it extremely
important that we seek the advice and input of a broad group of stakeholders. In order to
maximize stakeholder outreach opportunities, the comment period for the proposed rule was
extended to 120 days. In addition to this formal comment period, EPA made multiple efforts to
solicit public and expert feedback on our approach. Beginning early in the NPRM process and
continuing throughout the development of this final rule, EPA held multiple meetings with
stakeholders, including government, academia, industry, and non-profit organizations, to gather
expert technical input. Our work was also informed heavily by consultation with other federal
agencies. For example, we have relied on the expert advice of USDA and DOE, as well as
incorporating the most recent inputs and models provided by these Agencies. Dialogue with the
State of California and the European Union on their parallel, on-going efforts in GHG lifecycle
analysis also helped inform EPA's methodology. As described below, formal technical
exchanges and an independent, formal peer review of the methodology were also significant
components of the Agency's outreach. A key result of our outreach effort has been awareness of
new studies and data that have been incorporated into our final rule analysis.
EPA has made a number of significant enhancements to our approach in conducting the
lifecycle analysis for the final rule, including the incorporation new scientific data that has
become available since the proposal, including new improved satellite data, as well as the
approach to recognize and quantify, where appropriate, the uncertainty inherent in this analysis.
Our updated analysis is well grounded in the science and responds fully to the concerns raised by
commenter.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2300
Organization: Dow AgroSciences
Comment:
The commenter (2300) believes that the calculations on crops yields must be revisited and based
on current trends, not those from 2005. (2300, p.l) The commenter believes that evidence is
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clear that U.S. biofuel production does not result in significant, if any, land use change in Brazil
or elsewhere and that this applies to any of the crops used for biofuel production, including corn,
soybeans, or canola. The commenter requests that EPA review the potential penalties that could
be applied to U.S. farmers based on flawed and immature assumptions and theories that are
applied to all vegetable oils.
The commenter also noted that nowhere in the statutory language do they find the legal basis for
including international indirect emissions in the lifecycle emissions definition. This suggests that
applying the Energy Independence and Security Act beyond U.S. borders may be inappropriate.
(2300, p.l)
Our Response:
For the final rule, EPA has updated its assessment of crop yields both domestically and
internationally. We have calculated lifecycle emission performance assuming both base yields
derived from projecting into the future longer term historical trends and also assuming a marked
increase in future yields based on industry and other comments
As detailed in the preamble and RIA, EPA has used the most up to date models, data and
other information in its LCA. These indicate that indirect impacts including international land
use impacts are significant and should appropriately be included in accordance with good
practice and the requirements of EISA.
Although the definition of lifecycle greenhouse gas emissions in Section 211 (o) does not
specifically mention international emissions, it would be inconsistent with the text and the intent
of this section of the Act to exclude them. The definition of lifecycle GHG emissions makes it
clear that EPA is to determine the "aggregate" emissions "related to" the "full" fuel lifecycle,
including "all stages of fuel and feedstock production and distribution". EPA is directed to
include both direct emissions and significant indirect emissions, such as significant emissions
from land use changes. A large variety of activities outside the U.S. play a major part in the full
fuel lifecycle of both the baseline fuel (gasoline and diesel fuel used as transportation fuel in
2005) and renewable fuels. For example, several stages of the lifecycle process for gasoline and
diesel can occur overseas, including extraction and delivery of imported crude oil, and for
imported gasoline and diesel products, emissions associated with refining and distribution of the
finished product to the U.S. For imported renewable fuel, all of the emissions associated with
feedstock production and distribution, fuel processing, and delivery of the finished renewable
fuel to the U.S. occur overseas. Whether the direct or indirect emissions occur in the U.S. or
overseas does not change that they are related to the full fuel lifecycle. There is no basis in the
definition to treat direct or indirect emissions that occur overseas different from direct or indirect
emissions that occur in the US. Thus, EPA could not, as a legal matter, ignore those parts of a
fuel lifecycle that occur overseas.
Drawing a distinction between GHG emissions that occur inside the U.S. as compared to
emissions that occur outside the U.S. would result in a lifecycle analysis that bears no apparent
relationship to the purpose of this provision. The purpose of the thresholds in EISA is to require
the use of renewable fuels that achieve reductions in GHG emissions compared to the baseline.
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Ignoring international emissions, a large part of the GHG emission associated with the different
fuels, would result in a GHG analysis that bears no relationship to the real world emissions
impact of transportation fuels. The baseline would be significantly understated, given the large
amount of imported crude and imported finished gasoline and diesel used in 2005. Likewise, the
emissions estimates for imported renewable fuel would be grossly reduced in comparison to the
aggregate emissions estimates for fuels made domestically with domestically-grown feedstocks,
simply because the impacts of domestically produced fuels occurred within the U.S. EPA does
not believe that Congress intended such a result.
Lastly, EPA believes that including international indirect emissions in EPA's lifecycle
analysis does not exercise regulatory authority over activities that occur solely outside the U.S.,
nor does it raise questions of extra-territorial jurisdiction. EPA's regulatory action involves an
assessment of products either produced in the U.S. or imported into the U.S. EPA is simply
assessing whether the use of these products in the U.S. satisfies requirements under EISA for the
use of designated volumes of renewable fuel, cellulosic biofuel, biomass-based diesel, and
advanced biofuel. Considering international emissions in determining the lifecycle GHG
emissions of the domestically-produced or imported fuel does not change the fact that the actual
regulation of the product involves its use solely inside the U.S.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2302
Organization: UC Berkeley - Energy Biosciences Institute
Comment:
The commenter [[2302]] states that they caution EPA on extrapolation of land use changes from
recent trends. Land use change typically occurs in phases as a result of complex triggers and
should not be viewed as a linear function of time [[#2302 p.4]]
The commenter [[2302]] strongly suggests that EPA provide mechanisms for evaluating the
appropriateness of incorporating these emerging techniques, including broader peer-review and
additional workshops, and include a mechanism for re-evaluation at regular (e.g., every 12-18
months) intervals. [[#2302 p.5]]
Document No.: EPA-HQ-OAR-2005-0161-2304
Organization: Gevo Inc.
Comment:
The commenter (2304) believes that limitations of the current science underlying land use
change, including assumptions about future crops yield and land constraint, causality, and the
role of global land policies, impose a large range of uncertainty on lifecycle GHG calculations
for biofuels. The commenter urges EPA to fully acknowledge the extent of the uncertainty in
estimation of emissions from land use change, and ensure that emerging biofuels technologies
are not disqualified from participation in the RFS2 program unless clearly demonstrated to be out
of compliance with the program's GHG performance requirements. Technology innovation in
the biofuels space is occurring at a rapid rate. In its final rule, EPA should allow biotechnology
to aid the future biofuels industry in continuing to increase crop yields, decrease fertilizer inputs,
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increase drought tolerance and lower their carbon footprint. EPA should increase the
transparency of the carbon intensity processes and reduce the time needed to certify pathways.
Biofuels should be credited for reducing future gasoline and diesel production emissions by
curbing demand for more GHG-intensive sources of petroleum-based fuels. [[Docket number
2304.1, p. 2]]
Our Response:
As detailed in the preamble and RIA, EPA has used up to date models, data and other
information to assess the GHG impacts of biofuels. Throughout the development of EPA's
lifecycle analysis, the Agency has employed a collaborative, transparent, and science-based
approach. EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. We believe we have in a technically appropriate manner,
implemented the mandates of EISA
We have also included uncertainty analyses which in particular focus on international
indirect land use impacts. These uncertainty assessments were used in determining whether a
biofuel pathway was likely to exceed its GHG performance threshold.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2314
Organization: The New England Fuel Institute
Comment:
The commenter (2134.1) fully supports EPA's efforts to discourage global deforestation which
contributes to greenhouse gas emissions worldwide. A steady, reliable and cost effective supply
of biodiesel is absolutely essential if the heating oil industry is to reach its long term goal of
marketing a home heating oil with a 20% renewable fuel content. The reality is that this goal
requires a robust supply of biodiesel derived from soy beans. (2314.1, p.4)
The commenter believes that any lifecycle analysis used by the EPA to measure the effect of
biodiesel production on greenhouse gas emissions and land use changes should more accurately
reflect current soy crop and biodiesel production data. The commentor asserts that EPA
mistakenly assumes that soybeans are planted for the oil. The commenter also believes that until
alternative sources of biodiesel are perfected, soy based biodiesel is absolutely vital to achieving
the renewable fuel mandates required under EISA. (2314.1, p.5)
Our Response:
The commentor has misinterpreted EPA's characterization of the soybean markets. Our
analysis does take into account the fact that soybeans are 80% meal and 20% oil. However, our
modeling framework assumes that farmers choose to plant an additional acre of soybeans based
on the expected net returns associated with the sum of both the oil and the meal streams,
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compared to the returns associated with other crops. We believe this optimization approach
accurately represents the soybean and biodiesel production markets.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2316
Organization: University of Minnesota
Comment:
The commenter [[2316]] states: I would note that it is also appropriate to account for the
significant uncertainty associated with whether land converted as a result of biofuel production
will remain in biofuel production throughout the entire analytical time horizon, or whether it may
be converted to other uses. Land conversion results in an more certain release of carbon
occurring primarily within a few years of conversion compared to a less certain offset of
petroleum projected to occur up to thirty or even a hundred years out. As such it is appropriate to
discount future carbon savings from biofuel production to reflect this uncertainty. In sum,
accounting for uncertainty in ILUC will likely decrease the apparent lifecycle greenhouse gas
(GHG) emissions of biofuels, but accounting for uncertainty in future biofuel production will
likely increase such estimates. [[2316.1 p.2]]
Our Response:
It is true that the GHG emissions from land use change are uncertain, which is why EPA
specifically built in an uncertainty analysis around the land use change component of our
analysis for this final rule.
As the commenter points out there are several aspects of the land use change modeling
that impact the overall Iresults, the time frame for analysis, how and if to discount future
emissions and reductions, and whether to account for land reversion or not.
In the proposed rule, EPA highlighted two time periods of 30 years and 100 years for
consideration in GHG lifecycle analysis. The Agency discussed the relative advantages of these,
and other, time periods. The expert peer reviewers discussed a number of justifiable time periods
ranging from 13 to 100 years. The reviewers said that longer time frames, such as 100 years,
were only appropriate if the Agency used positive discount rates to value future emissions.
Almost all of the peer reviewers specifically said that a time frame of 20 to 30 years would be
justifiable based on the average life of a biofuel production facility. The reviewers and the
public commenters provided several arguments for the application of a 30 year time frame. A 30
year time period is appropriate because future emissions are less certain and more difficult to
value, so the analysis should be confined insofar as possible to the foreseeable future. Another
argument is that a near-term time horizon is consistent with the latest climate science that
indicates that swift and deep reductions of heat-trapping gasses are needed to avoid catastrophic
changes due to a warming climate. One of the reviewers said that while "there is no unassailable
basis for choosing a very specific timeframe" the expected average lifetime of a biofuel
production facility is the "most sensible anchor" for the choice of a timeframe. Alternatively, a
number of commenters argued that a 100 year time frame is the appropriate time period for GHG
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lifecycle emissions analysis principally since this is the time period over which climate change
impacts are likely to occur.
Based upon the comments received from the peer review and public between after the
RFS2 proposal, EPA has decided to use a 30 year frame for assessing the lifecycle GHG
emissions. There are several reasons why the 30 year time frame was chosen. The use of the life
of a typical biofuel plant seems reasonable as a basis for the timeframe for assessing the GHG
emissions impacts of a renewable fuel. Also, the 30 year time frame focuses on GHG emissions
impacts that are more near term and, hence, more certain.
EPA received numerous of comments on whether lifecycle GHG emissions should be
discounted through time. For example, as part of the EPA-sponsored peer review, while many of
peer reviewers thought that current GHG emissions reductions should be more strongly weighted
than future reductions, the peer reviewers were in general agreement that a discount rate should
only be applied to a monetary unit, rather than a physical unit, such as an GHG emission. One
peer reviewer suggested that it is scientifically justifiable to use discounting procedures for GHG
emissions if the procedure is broadened to capture more than the "time value of money" and
includes biophysical relationships such as the changing value of damages produced by
atmospheric GHG stocks, the persistence of GHGs in the atmosphere and the initial GHG stock
levels. Alternatively, another peer reviewer argued that the provision of EISA that deals with
lifecycle GHG emissions didn't call for an economic assessment, therefore discounting of GHG
emissions would not be appropriate. A majority of peer reviewers said that a 0% discount rate
would be appropriate if EPA uses a short time horizon (13-30 years) to assess GHG impacts.
The reasoning for not using discounting with shorter time periods is that for purposes of meeting
the EISA GHG thresholds, a GHG emission now is not significantly different than a GHG
emission 30 years from now.
In addition to the comments received in the peer review, EPA also received many
comments in the public comment period. Commenters suggested that discounting is an essential
part of long term cost benefit analysis but it is not necessary in the context of the physical
aggregation of lifecycle GHG emissions called for in the EISA. Also, commenters expressed
concerns that any discount rate chosen by the Agency would be based upon relatively arbitrary
criteria.
After considering the comments on discounting from the peer review and the public, EPA
decided not to discount (i.e., use a 0% discount rate) GHG emissions due to the many issues
associated with applying an economic concept to a physical parameter. First, it is unclear
whether EISA intended lifecycle GHG emissions to be converted into a metric whose
underpinnings rest on principals of economic valuation. A more literal interpretation of EISA is
that EPA should consider only physical GHG emissions. Second, even if the principle of tying
GHG emissions to economic valuation approaches were to be accepted, there would still be the
problem that there is a lack of consensus in the scientific community about the best way to
translate GHG emissions into a proxy for economic damages. Some of the issues that arise are:
how to factor in the atmospheric residence times of GHG emissions in the atmosphere, and the
evolution of atmospheric concentrations of GHG emissions through time both with and without
renewable fuels. As mentioned previously, there is also a lack of consensus as to the appropriate
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discount rate to apply to GHG lifecycle emissions streams through time. Also, since EPA has
decided to base threshold assessments of lifecycle GHG emissions on a 30 year time frame, the
issue of whether to discount GHG emissions is not as significant as if the EPA had chosen the
100 year time frame to assess GHG emissions impacts.
In the proposed rule EPA sought comment on whether sequestration from land reversion
following the end of production of a particular biofuel should be considered in our analysis. A
majority (3) of the expert peer reviewers responded that reversion should not be counted. Two
of the peer reviewers offered conditional support: one advised EPA to consider land reversion
impacts only if it had reason to believe that croplands dedicated to biofuels would be reverted;
the other suggested that EPA try different scenarios to test if land reversion has a significant
effect.
The reviewers that objected to counting post-production land reversion offered a number
of justifications to support their position. All of them said that there is no reason to assume that
land would in fact revert following biofuel production. Instead, it is more likely that land would
be kept in crop production for food or that the land would be developed. One of the reviewers
recommended that EPA consider post-project salvaged carbon as part of a second independent
land use change that occurs once the biofuel project terminates. Another reviewer noted that
even if land were reverted, the benefits of sequestration would be attributed to the grazing,
forestry, or conservation payment activities associated with the new land use, not to biofuel
production.
Dr. Fargione expaneded on his lack of support for counting post-project reversion. He
interpreted EISA to mandate reduced emissions during the project time frame, and therefore
concluded that emission reduction calculations should be based only on land use change and
foregone sequestration that occur during the project time frame. Indeed, EISA specifies that
lifecycle GHG emissions shall include the "full fuel lifeycle, including all stages of fuel and
feedstock production and distribution," but the Act does not specifically mention post-project
activities as part of the lifecycle. Thus, Dr. Fargione argued, the only accounting required
following the project time horizon is based on fate of the emissions already released (and their
radiative forcing and residence time in the atmosphere). According to Dr. Fargione, one
potential exception to this would be if EPA were to include long-lived forest products, as these
emissions are not dependent on assumptions about future land use change. (As discussed in
preamble Section V, EPA has determined that long-lived wood products from international land
conversion are not a significant factor).
Based on comments from the expert reviewers and the public, and for the reasons
discussed above, EPA decided that 30 years is a reasonable time frame over which to evaluate
lifecycle GHG emissions. As part of this determination, EPA decided that the most reasonable
approach is to expect that a particular biofuel pathway should achieve GHG reductions
commensurate with the required reduction thresholds, as specified in EISA, during a 30 year
time period, and not to give credit for potential post-project sequestrations.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2317
Organization: National Corn Growers Association (NCGA)
Comment:
The commenter (2317) believes that much of the controversy over EPA's international indirect
land use change (ILUC) analysis can be resolved by simply calculating the existing domestic
capability to meet fuel, food, and feed demand properly. If EPA did so, the calculation would
show that no additional land conversion is needed as a result of the RFS2 and therefore that no
significant emissions will result from the RFS2 mandates. The commenter urges EPA to revisit
these aspects of the program and to make revisions to the regulations consistent with their
comments. [[Docket number 2317.1, p. 3]]
Our Response:
While the existing domestic capacity may exist to meet U.S. fuel, food, and fuel demand,
this calculation ignores the impact the U.S. has on world agricultural markets. Since the U.S. is
the world's largest exporter of corn and a significant exporter of soybeans, a significant decrease
in U.S. exports would have ripple effects throughout the world. If increasing demand for
renewable fuels in the U.S. increases commodity prices and reduces U.S. exports of corn and
soybeans, international agricultural markets will respond by increasing supply. As described
below, we believe our interpretation of the term "significant indirect impacts" to include
international land use change is consistent with the statutory intent of EISA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2317
Organization: National Corn Growers Association (NCGA)
Comment:
The commenter believes the legal basis offered in the proposal for including international
indirect emission in the LC emissions definition is not supported by the statutory language and
EPA seeks to extend the application of the Energy Independence and Security Act beyond the
U.S. borders. [[Docket number 2317.1, p. 3]] [[See docket number 2317.1, pp. 3-6 for extensive
discussion of this issue.]]
The commenter notes that the statute requires that LC emissions be related to the fuel LC and
that EPA's analysis must accurately determine the quantity of such emissions and whether they
are significant. In light of the inability to estimate accurately indirect emissions attributable to
international land use changes and because the statute does not indicate that emissions based on
international land use changes are required to be included in the lifecycle analysis, the
commenter believe that EPA should adopt an interpretation that is limited to domestic significant
indirect emissions. [[Docket number 2317.1, p. 3]] [[See docket number 2317.1, pp. 3-6 for
extensive discussion of this issue.]]
The commenter adds that because the increased supplies of domestic corn that result from
increased yields will provide the corn necessary for future exports and other uses, there is no
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significant International land use change as a result of RFS2. [[Docket number 2317.1, p. 15]]
[[See docket number 2317.1, pp. 15-17 for extensive discussion of this issue.]]
Our Response:
See responses to prior comments for EPA's interpretation of the definition of lifecycle
greenhouse gas emissions, and why it is appropriate for EPA to include significant indirect
emissions from land use change that occurs overseas
With respect to the impact of the RFS program on future exports of corn, EPA estimated
the changes in the domestic agricultural sector (e.g., changes in crop acres resulting from
increased demand for biofuel feedstock or changes in the number of livestock due to higher corn
prices) and their associated emissions, using the Forestry and Agricultural Sector Optimization
Model (FASOM), developed by Texas A&M University and others. This model and our analysis
clearly found an impact on U.S. corn exports due to the RFS, which is explained in detail in the
rulemaking.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2317
Organization: National Corn Growers Association (NCGA)
Comment:
The commenter disagrees with EPA's assumption that increased biofuels production is the
causative factor for increased GHG emissions. [[Docket number 2317.1, p. 22]] [[See docket
number 2317.1, pp. 22-24 for extensive discussion of this issue.]]
The commenter believes that EPA fails to give proper credit for distillers grains as co-product.
[[Docket number 2317.1, p. 26]] [[See docket number 2317.1, pp. 26-28 for extensive discussion
of this issue.]]
Our Response:
For the final rulemaking analysis, distillers grains replacement rates of corn and soybean
meal in animal feed have been updated based on the latest research by Argonne National
Laboratory in both the FASOM and FAPRI models. These replacement rates are higher and
more efficient than those used in the proposal's analysis. In addition, co-product credits are
attributed to distillers grains in EPA's analysis. Details on these assumptions can be found in the
RIA and the technical reports for each respective model.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2339
Organization: Illinois Com Growers Association
Comment:
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The commenter [[#2339]] states that EPA has admitted that its proposal is based on many
uncertainties, it argues that to fail to consider indirect international land use change would be
worse in that it would ignore any contribution by U.S. renewable fuels policy to these foreign
development decisions. EPA has mistakenly read into EISA Title II a requirement that renewable
fuels produced in the United States must take responsibility for the carbon footprint associated
with unassociated future land use changes in other countries. [[#2339 p.4,7]]
Our Response:
EPA is making the GHG threshold determinations based on a methodology that includes
an analysis of the full lifecycle, including significant emissions related to international land-use
change. EPA has used the best available models for this purpose, and has incorporated many
modifications to its proposed approach based on comments from the public and peer reviewers
and developing science. EPA has also quantified the uncertainty associated with significant
components of its analyses, including important factors affecting GHG emissions associated with
international land use change. The Agency has updated and refined its modeling approach since
proposal in several important ways, and EPA is confident that its modeling of GHG emissions
associated with international land use is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations described above. We plan to
continue to improve upon our analyses, and will update it in the future as appropriate.
EPA does not believe it has misread or otherwise mistakenly read the requirements in
EISA. A large variety of activities outside the U.S. play a major part in the full fuel lifecycle of
both baseline (gasoline and diesel fuel used as transportation fuel in 2005) and renewable fuels.
For example, several stages of the lifecycle process for gasoline and diesel can occur overseas,
including extraction and delivery of imported crude oil, and for imported gasoline and diesel
products, emissions associated with refining and distribution of the finished product to the U.S.
For imported renewable fuel, all of the emissions associated with feedstock production and
distribution, fuel processing, and delivery of the finished renewable fuel to the U.S. occur
overseas. The definition of lifecycle GHG emissions makes it clear that EPA is to determine the
aggregate emissions related to the "full" fuel lifecycle, including "all stages of fuel and feedstock
production and distribution." Thus, EPA could not, as a legal matter, ignore those parts of a fuel
lifecycle that occur overseas.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2347
Organization: Illinois Farm Bureau
Comment:
The commenter [[2347]] states he uncertainty level and the possibility of error in the proposals
assumptions are high, it is therefore ludicrous to try to analyze how international indirect land
use will affect GHG impacts. The proposal also appears to go far beyond the intent of the law
when it incorrectly gives U.S. renewable fuel producers the carbon footprint of others that are
beyond the control of U.S producers. [[#2347.1 p.l]]
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Our Response:
EPA continues to believe that compliance with the EISA mandate — determining "the
aggregate GHG emissions related to the full fuel lifecycle, including both direct emissions and
significant indirect emissions such as land use changes" — makes it necessary to assess those
direct and significant indirect impacts that occur not just within the United States, but also those
that occur in other countries.
Although considering international emissions in its analyses could result in different
implications under the statute for various fuels and fuel pathways as compared to ignoring these
emissions, EPA believes that this is precisely the outcome that Congress intended.
Implementation of EISA will undoubtedly benefit the domestic agricultural sector as a whole,
with some components benefiting more than others depending in part on the lifecycle GHG
emissions associated with the products to be made from individual feedstocks. If Congress had
sought to promote all biofuel production without regard to GHG emissions related to the full
lifecycle of those fuels, it would not have specified GHG reduction thresholds for each category
of renewable fuel for which volume targets are specified in the Act.
It is also important to note that including international indirect emissions in EPA's
lifecycle analysis does not exercise regulatory authority over activities that occur solely outside
the U.S., nor does it raise questions of extra-territorial jurisdiction. EPA's regulatory action
involves an assessment of products either produced in the U.S. or imported into the U.S. EPA is
simply assessing whether the use of these products in the U.S. satisfies requirements under EISA
for the use of designated volumes of renewable fuel, cellulosic biofuel, biomass-based diesel,
and advanced biofuel. Considering international emissions in determining the lifecycle GHG
emissions of the domestically-produced or imported fuel does not change the fact that the actual
regulation of the product involves its use solely inside the U.S.
Excluding international impacts means large percentages of GHG emissions would be
ignored. This would take place in a context where the global warming impact of emissions is
irrespective of where the emissions occur. If the purpose of thresholds is to achieve some
reduction in GHG emissions in order to help address climate change, then ignoring emissions
outside our borders interferes with the ability to achieve this objective. Such an approach would
essentially undermine the purpose of the provision, and would be an arbitrary interpretation of
the broadly phrased text used by Congress.
EPA disagrees that it is seeking to penalize domestic renewable fuel producers for
impacts over which they have no control. EPA is simply attempting to account for all GHG
emissions related to the full fuel lifecycle. Domestic renewable fuel producers may have no
direct control over land use changes that occur overseas as a result of renewable fuel production
and use here, but their choice of feedstock can and does influence oversees activities, and EPA
believes it is appropriate to consider the GHG emissions from those activities in its analyses.
Furthermore, as described in this rulemaking, EPA has used the best available models
and substantially modified key inputs to those models to reflect comments by peer reviewers, the
public, and emerging science. EPA has also modeled additional scenarios from those described
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in the NPRM. EPA recognizes that uncertainty exists with respect to the results, and has
attempted to quantify the range of uncertainty. While EPA agrees that application of the models
it has used in the context of assessing GHG emissions represents changes from previous biofuel
lifecycle modeling, EPA disagrees that it has used faulty data, modeled unrealistic scenarios, or
that its approach is otherwise scientifically indefensible. Although the results of modeling GHG
emissions associated with international land use change are uncertain, EPA has attempted to
quantify that uncertainty and is now in a better position to consider the uncertainty inherent in its
approach.
EPA understands that including international indirect land use change is a key decision
and that there is significant uncertainty associated with it. That is why we have taken an
approach that quantifies that uncertainty and presents the weight of currently available evidence
in making our threshold determinations.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2348
Organization: StateLine Cooperative
Comment:
The commenter (2348) believes that EPA should drop consideration of "international" land use
change and focus on domestic land use change only.
Our Response:
EPA is making the GHG threshold determination based on a methodology that includes
an analysis of the full lifecycle, including significant emissions related to international land-use
change. EPA has used the best available models for this purpose, and has incorporated many
modifications to its proposed approach based on comments from the public and peer reviewers
and developing science. EPA has also quantified the uncertainty associated with significant
components of its analyses, including important factors affecting GHG emissions associated with
international land use change. The Agency has updated and refined its modeling approach since
proposal in several important ways, and EPA is confident that its modeling of GHG emissions
associated with international land use is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2350
Organization: BioEnergy Producers Association
Comment:
The commenter (2350) submits that as EPA considers regulations relating to Indirect Land Use
Change, any such regulations should stipulate that there are no such impacts involved in the
production of advanced biofuels from organic wastes. As non-food derived resources, carbon-
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based wastes represent the nation's most promising and virtually untapped renewable energy
source. [[Docket number 2350, p. 1]]
Our Response:
EPA has analyzed biofuels from biogenic waste feedstocks and assessed their potential
indirect land use impacts, determining that such impacts are negligible or nonexistent.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2353
Organization: Iowa Soybean Association
Comment:
The commenter [[2353]] states that soybeans are raised in a rotation with corn. Since soybeans
fix nitrogen from the air, the nitrogen nodules on their roots help fertilize the next crop, reducing
both fertilizer use and tillage. Nitrogen fertilizer is not used on soybeans. [[#2353 p.2]]
Our Response:
EPA's analysis takes into account the fact that soybeans fix nitrogen. The crop budgets
included in the FASOM model include data on input use that varies by crop, management
practices, and region. There is often considerable variation in the inputs used per acre. Crop
budgets are based on USDA Agricultural Resource Management Survey (ARMS) data and crop
budgets developed by university extension offices. More information on this can be found in the
FASOM documentation in the Docket.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2354
Organization: Massachusetts Department of Environmental Protection
Comment:
The commenter (2354) strongly agrees with the proposal to fully account for indirect land use
change (ILUC) when determining lifecycle greenhouse gas emissions from biofuels. (2354.pdf,
p.3)
Our Response:
EPA's final rule includes a full assessment of indirect land use change impacts.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2357
Organization: Iowa Biodiesel Board
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Comment:
The commenter [[2357]] states that underestimating biodiesel volumes results in an overestimate
of indirect land use changes, penalizing the biodiesel industry. Also EPA assumes increased
U.S. biodiesel production will lead to land conversion in South America. If this assumption were
correct, Brazilian soybean acreage would have increased from 2004 through 2008, a time in
which U.S. biodiesel production increased from 25 million to 690 million gallons [[2357.1 p.4-
5]]
Our Response:
We disagree with the comment that underestimating biodiesel volumes result in an
overstatement of indirect land use change, even if biodiesel volumes would have reached the
mandated volumes in 2022 there is still an impact with producing these volumes compared to a
case without them. The threshold analysis mandated by EISA requires EPA to determine the
impacts of the different biofuels production which requires us to consider two scenarios with
differing volumes of biofuels. So regardless of what volume might or might not actually be
produced, our threshold analysis would still be based on two different volume scenarios and
production of any amount of biofuels would still have an impact. Furthermore, since our
analysis normalizes the greenhouse gas emissions impacts on a per BTU basis, the effect of using
different volumes in our calculations is minimized.
The historical biodiesel and soybean statistics cited by the commenter are not comparable
with our model predictions. During the time period discussed by the commenter (i.e., 2004 to
2008) many of the conditions that can affect the agricultural economy were changing. For
example, oil prices spiked, soybean blight became more prevalent in Brazil, exchange rates were
adjusted, and corn ethanol volumes also expanded substantially. In other words, the increase in
soy-based biodiesel production was not the only important factor that changed during the period.
Therefore, the fact that soybean acreage contracted in Brazil during this period does not refute
model predictions about how Brazil responds to U.S. biodiesel production. If we could "re-run"
history with a lower biodiesel volume, it may well be that Brazil soybean acreage would have
been much smaller than it actually was, in which case the model predictions would be validated.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2357
Organization: Iowa Biodiesel Board
Comment:
The commenter also states that EPA's GHG emissions methodology contains a major error
pertaining to the direct emission calculations for nitrogen. The 2006 Guidelines for National
Greenhouse Gas Inventories by the Intergovernmental Panel on Climate Change (IPCC)
concludes that nitrogen fixed in soil by soybeans should not be considered a GHG emission.
EPA, however, does not incorporate the IPCC's updated nitrogen findings, this error reduces the
GHG score for soy biodiesel by more than 20 percent. [[2357.1 p.5]]
Our Response:
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The proposal analysis calculated N20 emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in N20 emissions. The proposal
analysis N20 factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating N20 emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
We received a number of comments on our proposal results indicating that the N20
emissions were overestimated from soybean and other legume production (e.g., nitrogen fixing
hay) in our analysis. The main issue is that because the N20 emission factors used in the
proposal were based on the 1996 IPCC guidance for N20 accounting they were overestimating
N20 emissions from nitrogen fixing crops. As an update in 2006, IPCC guidance was changed
such that biological nitrogen fixation was removed as a direct source of N20 because of the lack
of evidence of significant emissions arising from the fixation process itself. IPCC concluded that
the N20 emissions induced by the growth of legume crops/forages may be estimated solely as a
function of the above-ground and below-ground nitrogen inputs from crop/forage residue. This
change effectively reduces the N20 emissions from nitrogen fixing crops like soybeans and
nitrogen fixing hay from the 1996 to 2006 IPCC guidance.
Therefore, as part of the update to new N20 emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the N20
emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2360
Organization: Archer Daniels Midland Company (ADM)
Comment:
The commenter's (2360.1) greatest concern is with the calculation of indirect land use change
values under the rule. The commenter believes the modeling used to evaluate these impacts has
not been fully developed and may greatly overestimate the impact of biofuels on land use.
Biofuels hold great promise as part of this country's energy future, and corn-based ethanol and
biomass-based biodiesel are already delivering on those promises across the country. Moreover,
first-generation biofuels are the bridge that will speed the development of the next generation
cellulosic solutions. However, the proposed land use values place a major obstacle to future
development of the domestic biofuels industry. (2360.1, p.l)
The commenter believes that questionable modeling of indirect land use changes should not be
used to undermine the commitment to today's biofuels, nor should it be allowed to imperil
tomorrow's cellulosic solutions. The commenter believes that modeling should not be allowed
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RFS2 Summary and Analysis of Comments
to dictate major decisions regarding our energy future until we can be confident it adequately
captures the indirect impact of any fuel. (2360.1, p.2)
Our Response:
EPA is making the GHG threshold determination based on a methodology that includes
an analysis of the full lifecycle, including significant emissions related to international land-use
change. EPA has used the best available models for this purpose, and has incorporated many
modifications to its proposed approach based on comments from the public and peer reviewers
and developing science. EPA has also quantified the uncertainty associated with significant
components of its analyses, including important factors affecting GHG emissions associated with
international land use change. The Agency has updated and refined its modeling approach since
proposal in several important ways, and EPA is confident that its modeling of GHG emissions
associated with international land use is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations described above. EPA plans
to continue to improve upon its analyses, and will update it in the future as appropriate.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2363
Organization: Ag Processing Inc.
Comment:
The commenter (2363) urges EPA to drop consideration of "international" land use change and
focus on domestic land use change only. [[Docket number 2363.1, p. 7]] [[See docket number
2363.1, pp. 1-2 for further discussion of this issue.]]
The commenter also urges EPA to assume that CRP land will be released in response to long
term change in demand for ethanol and soy biodiesel. [[Docket number 2363.1, p. 7]] [[See
docket number 2363.1, pp. 2-4 for further discussion of this issue.]]
Our Response:
EPA is making the GHG threshold determination based on a methodology that includes
an analysis of the full lifecycle, including significant emissions related to international land-use
change. EPA has used the best available models for this purpose, and has incorporated many
modifications to its proposed approach based on comments from the public and peer reviewers
and developing science. EPA has also quantified the uncertainty associated with significant
components of its analyses, including important factors affecting GHG emissions associated with
international land use change. The Agency has updated and refined its modeling approach since
proposal in several important ways, and EPA is confident that its modeling of GHG emissions
associated with international land use is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations described above. We plan to
continue to improve upon our analyses, and will update it in the future as appropriate.
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Based on coordination with USDA, EPA modeled assuming land in CRP will be
supported by USDA and therefore would not be available for biofuel feedstock production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2367
Organization: New Fuels Alliance (NFA)
Comment:
The commenter (2367) expresses widespread concerns about EPA's methodology, boundaries,
uncertainty, and unintended consequences related to predicting indirect land use change. Two
primary objectives to enforcing indirect land use change penalties against biofuels are lack of
parity and the scientific uncertainty. The commenter refers to the unanswered questions raised by
the analysis performed by Dr. Wang from the Argonne National Laboratory. The commenter
believes that enforcing overly uncertain carbon scoring metric could have the perverse result of
promoting more carbon intensive fuels. With all of the uncertainties associated with EPA's
approach to modeling indirect land use change, the commenter questions how EPA is prepared to
declare that biofuels are responsible for "significant indirect emission."
The commenter believes that EPA must re-balance the RFS2 LCA to avoid destabilizing the
program by differentiating direct and indirect carbon effects and assessing petroleum in a more
comprehensive and responsible way. The commenter strongly recommends that EPA reconsider
the principles contained in ISO 14040, establish common system boundaries for all fuels, and re-
balance the LCA analysis for RFS2. [[Docket number 2367.1, pp. 10-16]] [[See docket number
2367.1, pp. 4-18 for a detailed discussion of the commenter's concerns related to indirect land
use change.]]
Our Response:
The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
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analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum use. We
performed an analysis to determine the marginal crude that would be displaced by biofuels use.
Using well-to-tank GHG values for crude extracted from various countries, we were able to
determine an approximate "marginal petroleum baseline" by applying the factors to the countries
where crude production increased. We found that the marginal baseline was, for an average
gallon of gasoline, not statistically different than the average baseline value used in this final
rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace petroleum co-
products. When crude oil is refined to produce gasoline and diesel, petroleum co-products, such
as residual fuel oil and petroleum coke, are also produced. An increase in the demand for
renewable fuels could impact the energy system's utilization of petroleum co-products due to the
ripple effects of price impacts. We expect that an increase in domestic renewable fuels demand
will lead to a decrease in domestic crude oil consumption due to lower demand for gasoline and
diesel; however, this is unlikely to significantly impact demand for petroleum co-products unless
the price for these co-products is significantly affected. Refiners respond to demand for fuels,
and they may choose to produce a larger percentage of petroleum co-products per barrel of crude
then they had in the past in response to lower gasoline or diesel demand. This increased supply
and possible lower refinery costs could translate into a slight decrease in co-product cost and
therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering the
world crude oil price and therefore increase international demand for petroleum-based fuels and
increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found in
Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix of crude
oil and finished product in 2022 that would be displaced by renewable fuels. Further discussion
of this analysis can also be found in Chapter 2.7 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2369
Organization: New Generation Biofuels (NGBF)
Comment:
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The commenter (2369) agrees with many commenters that the science of ILUC needs further
developing before finalizing on a specific method of determining the cradle to grave greenhouse
gas emissions of most biofuels. [[Docket number 2369.1, p. 1]]
Our Response:
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 will continue to change.
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. As part of this
ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as well as
other experts, and incorporate their advice and any updated information we receive into a new
assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in this
final rule. EPA will request that the National Academy of Sciences over the next two years
evaluate the approach taken in this rule, the underlying science of lifecycle assessment, and in
particular indirect land use change, and make recommendations for subsequent rulemakings on
this subject.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2374
Organization: Amyris Biotechnologies, Inc. (Amyris)
Comment:
The commenter (2374) states that the science behind indirect land use models is young and
subject to much interpretation and debate within the scientific community. If the RFS2 is
implemented with indirect effects, the commenter believes that EPA should allow maximum
flexibility, cost-effective farming practices, while providing an incentive structure promoting
best practices. The commenter also believes that the 100 year pay-back period should be utilized
for calculations. Once lands are transformed into agricultural use, historically the land remains
agricultural for many generations-thus a 100 year pay-back period is appropriate. More broadly,
the commenter believes that EPA should: 1) provide or allow verifiable mechanisms for
producers to proactively reduce their indirect impacts of biofuels production and 2) allow regular
updates to the model calculating the magnitude of the indirect effects, especially in light of the
nascence of the science behind the calculation. [[Docket number 2374.1, p. 2]]
Our Response:
In the proposal, we considered several options for the timeframe over which to measure
lifecycle GHG impacts and the possibility of discounting those impacts. Based on peer review
recommendations and other comments received, EPA is finalizing its assessments based on an
analysis assuming 30 years of continued emission impacts after the program is fully phased in by
2022 and without discounting those impacts.
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EPA is making the GHG threshold determination based on a methodology that includes
an analysis of the full lifecycle, including significant emissions related to international land-use
change.
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 will continue to change.
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. As part of this
ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as well as
other experts, and incorporate their advice and any updated information we receive into a new
assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in this
final rule. EPA will request that the National Academy of Sciences over the next two years
evaluate the approach taken in this rule, the underlying science of lifecycle assessment, and in
particular indirect land use change, and make recommendations for subsequent rulemakings on
this subject.
While commenter's suggestion to incentivize best practices is beyond the scope of this
rulemaking, EPA will take this suggestion under consideration for future voluntary programs.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
Informa developed independent forecasts of U.S. and global crop acreage and supply/demand
balances and compared the forecasts to those agricultural economic models used by EPA. Total
world corn area in FAPRI is larger in 2022 in the control case relative to the reference case
compared to Informa forecasts. Informa shows a decrease in total world soybean area whereas
FAPRI shows an increase when the control case is compared to the reference case in 2022.
Informa's corn export forecast is moderately below FASOM's forecast and significantly below
FAPRI's (2415.1, pi & p!8 Appendix H)
To provide appropriate bounds on the land use change predicted by EPA's modeling suite, the
commenter (2383) asked Informa to use Informa's world agricultural and economic data bases
and predictive methodology in order to show what the impact of specified increases in U.S. corn
ethanol usage would be on cropland conversion in the United States and overseas. A key
assumption in this effort and an assumption which Growth Energy asked Informa to assume for
purposes of this exercise was that the level and rate of land conversion overseas could in fact be
attributed to the RFS2 program. The results are shown in Table 1 of the Informa Report. On the
assumptions supplied, Informa predicted a net increase in world corn and soybean acreage of 2.2
million acres. By contrast, FAPRI's estimate is a net increase of 7.4 million acres. The
commenter concludes that the data set and methodology that are actually used in the business
world to plan investments and to predict commodity prices the Informa data set and methodology
demonstrate that the results generated for EPA by FAPRI's "black box" are more than 300
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percent overstated. If EPA is not prepared to accept Informa's analysis as part of the LCA
analysis, it must explain why. [[Docket number 2383.1, pp. 51-52]] [[See docket number 2383.1,
pp. 51-52 and docket number 2415.1-2, which are electronic files associate with the Informa
Economics report.]]
Our Response:
Although the Informa model provides a useful estimate of their interpretation of the
impacts of a change in corn ethanol and soybean based biodiesel, we do not believe that their
analysis can be used at this time to replace our FAPRI and FASOM analysis of the indirect land
use change associated with an increase in renewable fuel volumes. As described in other
sections, we disagree with Informa's assertion that the projected yields used in our modeling are
too low. Informa projects corn yields of 201.7 bushels per acre and soybean yields of 51.7
bushels/acre by 2022 which are within the range of the reasonable yields we considered for oour
sensitivity analyses. These higher yield sensitivity analyses did not change our threshold
assessments.
Furthermore, the Informa model lacks much of the detail that the use of the FASOM and
FAPRI models provide. For example, the Informa model does not appear to include cellulosic
feedstocks, therefore it cannot be used to assess the competition between energy crops and
conventional crops in the U.S. In addition, the Informa model does not appear to take into
account the domestic land use competition between agricultural and forestry sectors. Since the
Informa "Control Case" does not appear to take into account cellulosic or imported ethanol
volumes, it is not appropriate to compare the Informa control case with the FASOM or FAPRI
control case.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP)
Comment:
The commenter (2384) does not believe that the science and methodology underlying the LCA,
including significant emission from land use changes, has progress sufficiently to provide a
rigorous differentiation between fuels. Until a more reliable land use data set is available, the
commenter recommends that EPA rely on the feedstock requirements described in EISA to
differentiate fuels, [[docket number 2384.1, p. 6]]
Our Response:
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As legally required by EISA, EPA is making the GHG threshold determination based on
a methodology that includes an analysis of the full lifecycle, including significant emissions
related to international land-use change. EPA has used the best available models for this
purpose, and has incorporated many modifications to its proposed approach based on comments
from the public and peer reviewers and developing science. EPA has also quantified the
uncertainty associated with significant components of its analyses, including important factors
affecting GHG emissions associated with international land use change. The Agency has
updated and refined its modeling approach since proposal in several important ways, and EPA is
confident that its modeling of GHG emissions associated with international land use is
comprehensive and provides a reasonable and scientifically robust basis for making the threshold
determinations described above. EPA plans to continue to improve upon its analyses, and will
update it in the future as appropriate.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2387
Organization: Ensus Ltd
Comment:
The commenter (2387) believes that increased global production of crop-derived biofuel
feedstock creates a significant risk of indirect land use change and it is inevitable that GHG
emissions from ILUC will need to be quantified for different biofuels and feed-stocks. However,
they are concerned about the accuracy of the modeling of indirect land use change in the FAPRI
and FASOM models especially the methods and factors used in the following parts of the
models: Accounting for biofuel co-products, Modeling land area changes as a result of demand
growth, Modeling of oilseeds market, type of land changes, and land use change for meat
production. The commenter believes that with all of these issues, the models overestimate the
level of GHG emissions from indirect land use change. [[Docket number 2387.1, p. 1]]
Our Response:
As detailed in the preamble and RIA, EPA has used up to date models, data and other
information to assess the GHG impacts of biofuels. Throughout the development of EPA's
lifecycle analysis, the Agency has employed a collaborative, transparent, and science-based
approach. EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. We believe we have in a technically appropriate manner,
implemented the mandates of EISA. The models indicate that indirect impacts including
international land use impacts are significant and should appropriately be included in accordance
with good practice and the requirements of EISA. We have also included uncertainty analyses
which in particular focus on international indirect land use impacts. These uncertainty
assessments were used in determining whether a biofuel pathway was likely to exceed its GHG
performance threshold.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2387
Organization: Ensus Ltd
Comment:
More specifically, the commenter states:
-The lack of proper accounting for high protein biofuel co-products causes an overestimation of
the GHG emissions from ILUG. [[See docket number 2387.1, p. 5 for further discussion of the
issue.]]
Our Response:
For the final rulemaking analysis, distillers grains replacement rates of corn and soybean
meal in animal feed have been updated based on the latest research by Argonne National
Laboratory in both the FASOM and FAPRI models. These replacement rates are higher and
more efficient than those used in the proposal's analysis. Details on these assumptions can be
found in the RIA and the technical reports for each respective model.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2387
Organization: Ensus Ltd
Comment:
-The EPA ME models determine the land area growth indirectly by subtracting a yield growth
estimate from the demand growth. The yield growth estimate is an exogenous value that does not
properly account for changes in yield growth as a result of demand growth. The models therefore
assume that all the increase in demand above the estimated yield growth is met by land area
change. The lack of modeling of the proportion of demand growth from yield growth and area
growth will cause an error in the estimation of the GHG emissions from ILUC. [[See docket
number 2387.1, pp. 5-7 for further discussion of the issue.]]
Our Response:
EPA agrees with the comment that there needs to be a demand response on crop yields.
One of the updates to the FAPRI model for the final rulemaking analysis is the incorporation of
price-induced yields. Thus, as demand for a commodity increases, raising the global price for
that commodity, yields will increase as a result. Additional information on price-induced yields
in the FAPRI can be found in the RIA and the technical documentation for the FAPRI model in
the docket.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2387
Organization: Ensus Ltd
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Comment:
-The EPA FASOM model appears to assume that the use of soy oil for biodiesel production will
be met by growing soybeans and that the soy meal co-product will substitute for cereals and hay.
However, soybean is primarily grown for the meal, not for the oil, so increased production of
biodiesel from soy oil will lead to replacement of the soy oil on the global market by other
vegetable oils, primarily palm oil. The assumption that soy is just grown primarily for its oil,
rather than primarily for its meal will lead to an overestimation of the overall land used for the
production of soy biodiesel and underestimate the land saved by soy meal replacement by DOGS
co-product from corn bioethanol. These will both cause an overestimation of the GHG emissions
from ILUG. [[See docket number 2387.1, pp. 8-9 for further discussion of the issue.]]
Our Response:
EPA's analysis shows that the total value for soybeans is a combination of the value of
raw soybeans, soybean meal, and soybean oil combined. Soybean meal is an important and
substantial component of soybeans, and is a major source of animal feed, among other uses.
However, soybean oil is also a valued component of soybeans, both for the use in food products,
as well as for biodiesel production. EPA's analysis shows that changes in demand for soybean
oil biodiesel will affect not only the value of soybean oil, but the value of soybeans and soybean
meal as well. The primary source of soybean oil for biodiesel production comes from a
reduction in soybean oil exports from the U.S. to the global trade market. The FAPRI model
also analyzes the effect this change in soybean oil exports from the U.S. has on the global
vegetable oil market.
For additional detail of the assumptions and results of the final rulemaking analysis,
please refer to the RIA, as well as the technical reports of the FASOM and FAPRI models in the
docket.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2387
Organization: Ensus Ltd
Comment:
-There are enormous discrepancies in the changes in crop areas for the EU and Brazil given by
the FAO data and the MODIS data used for EPA work. The reasons for this need to be resolved.
[[See docket number 2387.1, pp. 9-10 and docket number 1990.1, pp. 1-4 for extensive
discussion of the issue.]]
Our Response:
Based on comments from the expert peer reviewers EPA updated its analysis with the
new MODIS Version 5 satellite data set covering 2001-2007. Compared to the MODIS Version
4 data set used in the proposed rule, the new MODIS data is higher resolution, more recent, and
covers a longer time period. Another benefit of using the MODIS data set is that it is routinely
and extensively validated by NASA's MODIS land validation team. NASA uses several
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validation techniques for quality assurance and to develop uncertainty information for its
products. NASA's primary validation technique includes comparing the satellite classifications
to data collected through field and aircraft surveys, and other satellite data sensors. The accuracy
of the version 5 MODIS land cover product was assessed over a significant set of international
locations, including roughly 1,900 sample site clusters covering close to 150 million square
kilometers. The results of these validation efforts are summarized in a "confusion matrix" which
compares the satellite's land classifications with the actual land types observed on the ground.
We used this information to assess the accuracy and systematic biases in the published MODIS
data.
Resolving discrepancies between our data and the FAO data is not necessary for our
analysis. As discussed above, the MODIS Version 5 land cover data has been vetted with data
validation efforts that are far more rigorous than simply comparing the MODIS and FAO data
sets.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2387
Organization: Ensus Ltd
Comment:
-Regarding land use change for meat production, it is assumed in the EPA ME models that the
conversion of grassland to cropland in one region will lead to the conversion of an equal area of
shrub land or forest to grassland in another region. Work shows that this assumption cannot be
justified. This assumption causes an overestimation of the land use change resulting from ILUC.
[[See docket number 2387.1, pp. 10-12 for further discussion of the issue.]]
Our Response:
For the final rule we made several improvements in our analysis of land converted to
pasture.
As explained in preamble Section V, one of the major changes made to the FAPRI model
between the NPRM and FRM includes the more detailed representation of Brazil through a new
integrated module. The Brazil module was developed by Iowa State with input from Brazilian
agricultural sector experts and we believe it is an improvement over the approach used in the
proposal. The new Brazil module also explicitly accounts for changes in pasture acres, therefore
accounting for the competition between crop and pasture acres. Furthermore, the Brazil module
explicitly models livestock intensification, the practice of increasing the number of heads of
cattle per acre of land in response to higher commodity prices or increased demand for land.
In addition to modifying how pasture acres are treated in Brazil, we also improved the
methodology for calculating pasture acreage changes in other countries. We received several
comments through the public comment period and peer reviewers supporting a better analysis of
the interaction between crops, pasture, and livestock. In the NPRM, although we accounted for
GHG emissions from livestock production (e.g., manure management), we did not explicitly
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account for GHG emissions from changes in pasture demand. In response to comments received,
our new methodology account for changes in pasture area resulting from livestock fluctuations
and therefore captures the link between livestock and land used for grazing. Based on regional
pasture stocking rates (livestock per acre), we now calculate the amount of land used for
livestock grazing. The regional stocking rates were determined with data on livestock
populations from the UN Food and Agricultural Organization (FAO) and data on pasture area
measured with agricultural inventory and satellite-derived land cover data. As a result of this
change, in countries where livestock numbers decrease, less land is needed for pasture.
Therefore, unneeded pasture acres are available for crop land or allowed to revert to their natural
state. In countries where livestock numbers increase, more land is needed for pasture, which can
be added on abandoned cropland or unused grassland, or it can result in deforestation. We
believe this new methodology provides a more realistic assessment of land use changes,
especially in regions where livestock populations are changing significantly. For additional
information on the pasture replacement methodology, see RIA Chapter 2.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2390
Organization: Governors' Biofuels Coalition
Comment:
The commenter (2390.1) noted that the information available to comment on the proposal
pertaining to EPA's ILUC lifecycle analysis is inadequate. The data and information presented
do not permit replication of EPA's ILUC findings. The ability to reproduce EPA"s findings is an
essential part of ensuring the quality of the findings and the transparency citizens expect from
their government. (2390.1, p.1)
Our Response:
As detailed in the preamble and RIA, EPA has used up to date models, data and other
information to assess the GHG impacts of biofuels. Throughout the development of EPA's
lifecycle analysis, the Agency has employed a collaborative, transparent, and science-based
approach. EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. We believe we have in a technically appropriate manner,
implemented the mandates of EISA
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) supports EPA's inclusion of the effects of land use changes in its
assessment of the GHG impacts of the RFS2 proposed rule. While EPA's proposed approach is a
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commendable first step, it is clear that the science, methods and data underlying the
quantification of ILUC effects will continue to evolve even after the RFS2 final rule is published.
The commenter notes that EPA recognizes this evolution of the science and supports EPA's
"plan to establish formal update procedures that include further peer review of the lifecycle
analysis framework and methodology." In fact, the commenter urges EPA to revisit this topic as
part of a formal periodic technical review process. [[Docket number 2393.1, pp. 44-45 and
2523.1, p. 3]]
Our Response:
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 will continue to change.
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. As part of this
ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as well as
other experts, and incorporate their advice and any updated information we receive into a new
assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in this
final rule. EPA will request that the National Academy of Sciences over the next two years
evaluate the approach taken in this rule, the underlying science of lifecycle assessment, and in
particular indirect land use change, and make recommendations for subsequent rulemakings on
this subject. This new assessment could result in new determinations of threshold compliance
compared to those included in this rule that would apply to future production (from plants that
are constructed after each subsequent rule).
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2401
Organization: Clean Energy
Comment:
The commenter (2401) fully supports EPA's decision to apply indirect land use change analysis
to all fuels to perform lifecycle GHG emission assessments. The commenter believes that EPA
is applying the best science available and has been willing to subject their analysis to peer review
and they feel confident that EPA will responsibly apply ILUC. [[Docket number 2401.1, p. 7]]
Our Response:
EPA agrees with the commenter that we have applied the best science available and has
employed a collaborative and transparent approach.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
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Comment:
The commenter (2408.1) encourages EPA to continue to study, develop and peer-review the vast
amount of information which is currently being generated in this area. The commenter
encourages EPA to consider the ability of technology to deliver efficiency gains in current crop
production as well as the development of better farming practices and higher yielding crop
varieties.
Our Response:
EPA has conducted a peer review of its LCA methodology and data sources; results are
reflected in final rule. Additionally, as stated in Preamble, EPA intends to continue working to
improve its LCA capability and as part of that effort plans to solicit support from the National
Academy of Sciences. For the final rule, EPA has updated its assessment of crop yields both
domestically and internationally. We have calculated lifecycle emission performance assuming
both base yields derived from projecting into the future longer term historical trends and also
assuming a marked increase in future yields based on industry and other comments.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment:
In addition, the assumptions concerning the types of lands which are being converted and the
resulting specific changes in foreign land use arc difficult and have many competing pressures,
which-at a minimum-make it difficult to accurately calculate specific impacts resulting from
biofuels. Over time, the understanding and accuracy of these types of modeling efforts should
improve and become far more accurate. (2408.1, p.3)
Our Response:
EPA worked with Winrock International to evaluate the types of land that would be
affected internationally. Winrock is a global nonprofit organization with years of experience in
the development and application of the IPCC agricultural forestry and other land use (AFOLU)
guidance. For the proposed rule, we used satellite data from 2001-2004 to provide a breakdown
of the types of land converted to crop production. A key strength of this approach is that satellite
information is based on empirical observations which can be verified and statistically tested for
accuracy. Furthermore, it is reasonable to assume that recent land use change decisions have
been driven largely by economics, and, as such, recent patterns will continue in the future, absent
major economic or land use regime shifts caused, for example, by changes in government
policies.
As discussed above, all five of the expert peer reviewers that reviewed our use of satellite
imagery for this analysis agreed that our general approach was scientifically justifiable.
However, all of the peer reviewers qualified that statement by describing relevant uncertainties
and highlighting revisions that would improve our analysis. Some of the public commenters
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supported EPA's use of satellite imagery, while other expressed concern. In general, both sets of
public commenters—those in favor and opposed—outlined the same criticisms and suggestions
as the expert peer reviewers. Among the many valuable suggestions for satellite data analysis
provided in the expert peer reviews and public comments, several major recommendations
emerged: EPA should use the most recent satellite data set that covers a period of at least 5 years;
EPA should use higher resolution satellite imagery; EPA's analysis should consider a wider
range of land categories; EPA should improve it's analysis of the interaction between cropland,
pasture and unused or underutilized land; and EPA's analysis should include thorough data
validation and a full assessment of uncertainty. Below, we describe these and other
recommendations and how we addressed each of them to improve our analysis. Based on the
peer reviewers agreement that our general approach is scientifically justifiable, and in light of the
significant improvements made, we think that our approach represents the best available analysis
of the types of land affected internationally.
EPA recognizes that as the state of scientific knowledge continues to evolve in this area.
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. As part of this
ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as well as
other experts, and incorporate their advice and any updated information we receive into a new
assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in this
final rule. EPA will request that the National Academy of Sciences over the next two years
evaluate the approach taken in this rule, the underlying science of lifecycle assessment, and in
particular indirect land use change, and make recommendations for subsequent rulemakings on
this subject.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2409
Organization: Tennessee Department of Agriculture
Comment:
The commenter [[2409]] states that the new methodology arbitrarily assigns greenhouse gas
(GHG) emissions associated with land use changes in other countries to biofuels produced and
used in this nation. This would, in effect, prevent all soy oil biodiesel producers from earning
Renewable Identification Numbers (RINs). And that the methodology developed by EPA to
determine the GHG emission profile of biofuels under the RFS2 program is based on
questionable inputs and dubious assumptions about international land use changes. The
commenter also states that from 2004 to 2008, U.S. biodiesel production grew from 25 million
gallons to 690 million gallons. Between 2004 and 2008, the land area devoted to soybean
production in Brazil decreased by 1.52 million hectares. [[#2409.1 p.2]]
The commenter also states that soybeans everywhere in the world are grown primarily to meet
the demand for their 80 percent protein meal. By-products do not drive supply responses and
soybean oil for biodiesel does not drive planting decisions for farmers. If it did, then farmers
would plant crops other than soybeans, that produce more oil per acre. [[#2409.1 p.3]]
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Our Response:
To quantify the lifecycle GHG emissions associated with the increase in renewable fuel
mandated by EISA, we compared the differences in total GHG emissions between two future
volume scenarios using well established-economic models. For each individual biofuel, we
analyzed the incremental GHG emission impacts of increasing the volume of that fuel to the total
mix of biofuels needed to meet the EISA requirements. The scenarios that we compared include
the same background projections about agricultural and economic conditions such as
macroeconomic growth, oil prices, crop growing conditions, exchange rates and government
policies. Thus, we isolate the effects of each type of biofuel expansion because all other factors
that affect the agricultural economy are held constant.
Furthermore, the agricultural economic models which we used account for the soy meal
co-product. For crops with by-products, behavioral equations for the by-products are included
(e.g., soybean meal, soybean oil and biodiesel from soybeans). For each commodity, a market-
clearing price is achieved by equating quantity supplied to quantity demanded. The market
linkages imply that changes in one commodity sector will have impacts on the other sectors.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated.
Comment:
The commenter (251 1.1) noted that indirect land use changes pose several significant challenges
for analysts and policymakers. The commenter recognizes that land use changes do occur, and
that at some level, such changes may be influenced by biofuels policy, in addition to a host of
other factors. EPA's proposed rule would unilaterally make changes to domestic U.S. law, with
the goal of indirectly addressing an international problem, largely on the other side of the planet.
Land use changes in the United States have been minimal, and large-scale land diversion of crop
land into conversion use has been in place for decades as a part of U.S. government policy. The
commenter has significant concerns that the proposed policy is far too narrow, and hence is an
inefficient and ineffective way of reducing GHG emissions. It will also place an unreasonable
and disproportionate burden on domestic U.S. farmers and the biofuels industry. It will also
unfairly penalize those in developing countries (251 1.1, p. 1). The commenter also noted that
EISA requires that EPA address Indirect Land Use Changes. However, the Act offers EPA broad
discretion to adopt an implementing rule that reflects the inherent complexity in such analysis.
EISA simply calls for including indirect emissions. The Act does not specify a direct mechanism,
or any other mechanism, on how to design and model the impact of biofuels on land use changes,
and is silent on whether the act is designed to be extraterritorial. The commenter believes that
EPA should ensure flexible implementation and compliance with Indirect Land Use parameters.
Our Response:
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EPA is making the GHG threshold determination based on a methodology that includes
an analysis of the full lifecycle, including significant emissions related to international land-use
change. EPA has used the best available models for this purpose, and has incorporated many
modifications to its proposed approach based on comments from the public and peer reviewers
and developing science. EPA has also quantified the uncertainty associated with significant
components of its analyses, including important factors affecting GHG emissions associated with
international land use change. The Agency has updated and refined its modeling approach since
proposal in several important ways, and EPA is confident that its modeling of GHG emissions
associated with international land use is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations. EPA plans to continue to
improve upon its analyses, and will update it in the future as appropriate.
Although considering international emissions in its analyses could result in different
implications under the statute for various fuels and fuel pathways as compared to ignoring these
emissions, EPA believes that this is precisely the outcome that Congress intended.
Implementation of EISA will undoubtedly benefit the domestic agricultural sector as a whole,
with some components benefiting more than others depending in part on the lifecycle GHG
emissions associated with the products to be made from individual feedstocks. If Congress had
sought to promote all biofuel production without regard to GHG emissions related to the full
lifecycle of those fuels, it would not have specified GHG reduction thresholds for each category
of renewable fuel for which volume targets are specified in the Act.
Including international indirect emissions in EPA's lifecycle analysis does not exercise
regulatory authority over activities that occur solely outside the U.S., nor does it raise questions
of extra-territorial jurisdiction. EPA's regulatory action involves an assessment of products either
produced in the U.S. or imported into the U.S. EPA is simply assessing whether the use of these
products in the U.S. satisfies requirements under EISA for the use of designated volumes of
renewable fuel, cellulosic biofuel, biomass-based diesel, and advanced biofuel. Considering
international emissions in determining the lifecycle GHG emissions of the domestically-
produced or imported fuel does not change the fact that the actual regulation of the product
involves its use solely inside the U.S.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated.
Comment:
The commenter noted that under EPA's proposed rule, a rather simple, direct allocation to the
biofuels industry is determined on the potential gallons produced per acre. The commenter
believes that this rule, while simple, vastly underestimates the myriad of other factors that
influence land use decisions and lacks accuracy. The commenter also believes that any
calculation of land use changes should also monitor and factor in the improvements in marginal
lands. Substantial improvements can and will be made in utilizing marginal lands, if producers
are allowed to respond and given the tools to responsibly cultivate and develop these acres.
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Omitting these acres as a likely first response to market conditions seriously alters the emissions
calculations. (2511.1, pp.2-3)
Our Response:
It appears that the commentor has misinterpreted our analysis of indirect land use change.
Our methodology does not attribute all land use change to renewable fuels. Instead, only the
incremental change in land use that occurs as a result of the increase in renewable fuel volumes
required by the RFS2 is attributed to renewable fuels. To the extent that other drivers such as
urban development, demand for wood products, and demand for other agricultural products
result in land use changes, those impacts are included in our reference case and are not allocated
to the renewable fuels. However, secondary impacts, such as a reduction in meat demand that
might occur if feed prices increase, are captured in our agricultural modeling framework.
Therefore, we disagree with the commentor that we have reduced a "complex, multi-dimensional
system to something so simple as to be almost unrecognizable."
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated.
Comment:
The commenter believes that the proposed rule penalizes lesser-developed countries. Biofuels
have created an entirely new distribution choice for the world's farmers. Now, by inhibiting this
industry and restricting this new source of demand, they would be preempting a strong anti-
poverty measure for those in need. (2511.1, p.3)
The commenter also noted that a direct approach to limiting land clearing is a much more
reliable approach to reducing GHG emissions. The commenter believes that nations should be
encouraged to finalize and enforce existing, and new, land use regulations that are structured to
reduce deforestation. The commenter also encourages the U.S. government to work with other
countries that are also currently analyzing the impacts of land use changes. (2511.1, p.3)
The commenter believes that EPA needs to determine the basis for allocating the land use
changes such that one country's direct changes are not double counted as another country's
indirect changes. In order to properly allocate and determine the extent of the land use changes
that should be borne by the biofuels industry, the EPA needs data that shows causation as
opposed to speculative data. (2511.1, p.6)
Our Response:
It appears that the commenter has misinterpreted our analysis of indirect land use change.
Our methodology does not attribute all land use change to renewable fuels. Instead, only the
incremental change in land use that occurs as a result of the increase in renewable fuel volumes
required by the RFS2 is attributed to renewable fuels. To the extent that other drivers such as
urban development, demand for wood products, and demand for other agricultural products
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result in land use changes, those impacts are included in our reference case and are not allocated
to the renewable fuels. However, secondary impacts, such as a reduction in meat demand that
might occur if feed prices increase, are captured in our agricultural modeling framework.
Therefore, we disagree with the commenter that we have reduced a "complex, multi-dimensional
system to something so simple as to be almost unrecognizable."
The regulations finalized for RFS2 determine GHG threshold compliance on the basis of
fuel pathways, irrespective of the country where the feedstock or the fuel was produced
EISA requires EPA to develop regulations for biofuels based on the development of a
lifecycle analysis methodology that includes significant indirect effects such as land use change.
The direct approach to limiting land clearing discussed by the commenter is outside of the scope
of EISA's provisions for the Renewable Fuel Standard.
EPA's approach avoids double counting of emissions associated with the renewable fuel
pathway. The key issue at hand here is whether there are controls through other mechanisms on
these sources of emissions that are included in the analysis. If international land use change
emissions indirectly due to biofuels were accounted for and controlled through other policy
systems of accounting, then the biofuels indirect impacts would not need assessment, but
currently that is not the case.
EPA notes that Congress has specified in Section 211 (o) the required causal link between
a fuel and indirect emissions. The indirect emissions must be "related to" the full fuel lifecycle.
EPA believes that it has demonstrated this link through its modeling efforts. Specifically, the
models predict that increased demand for feedstocks to produce renewable fuel that satisfies
EISA mandates will likely result in international land use change. Such change is, then, "related
to" the full fuel lifecycle of these fuels. EPA does not believe that the statute requires EPA to
wait until these effects occur to establish the required linkage, but instead believes that it is
authorized to use predictive models to demonstrate likely results.
Therefore, we do not attribute all land use change to biofuels in our lifecycle analysis.
Instead, we evaluated the incremental impact that biofuel production will have on existing land
use and land use change. Our approach assumes that other drivers will still be in place and
isolates the impacts due to biofuels production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated.
Comment:
The commenter is concerned that EPA's data and the California Air Resources Board (CARB)
data have such widely varying results. The commenter suggests that neither model is robust
enough to calculate a firm number. More sensitivity analysis and Monte Carlo simulations need
to be conducted to demonstrate where there are areas to tighten within the model to eliminate
errors. (2511.1, p.7)
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Our Response:
For the final rule, EPA has included uncertainty and sensitivity analyses about critical
parameters. We also anticipate continuing to work with CARB and other organizations and
experts to improve LCA modeling and data.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2423
Organization: Green Earth Fuels, LLC
Comment:
The commenter (2423) addresses the provision in the proposal which deals with the calculation
of GHG reductions and indirect land use. The commenter first points out that they have already
invested money, earned from producing "first generation biofuels," to develop non-food
feedstocks such as camelina and jatropha which can be produced with less environmental impact.
The commenter believes this is critical to our industry's growth and a demonstration of the value
of supporting first generation biofuels and that these are the types of crops EPA's rules should be
supporting; however under the proposal, they would not quality for RFS2. [[Docket number
2423, pp. 1-2]]
The commenter notes that they have been developing a palm plantation in Guatemala using the
latest and most advanced environmental standards and working with NGO's such as Rainforest
Alliance to develop sustainable palm standards for the region. EPA's proposed international
indirect land use rules suggest that for every gallon of biodiesel produced rain forests will be
destroyed. In fact the commenter believes that they are saving rainforests and preserving lands
ravaged not by industrial farmers but rainforest land burned by indigenous people just trying to
survive through subsistence farming. By disqualifying vegetable oil based biodiesel from
qualifying for the RFS2, EPA eliminates much of the incentive for pursuing these new, positive
practices. [[Docket number 2423, p. 2]]
Our Response:
EPA provides in the final rulemaking a petition process by which those fuel pathways
that have not yet been modeled EPA modeling can be evaluated to determine compliance with
one or more of the renewable fuel categories. Section V.C of the Preamble describes the petition
process.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2424
Organization: The Pacific Forest Trust
Comment:
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The commenter (2424.1) applauds EPA that they include the impacts of both direct and indirect
land use in the analysis of biofuel lifecycle emissions. (2424.1, p.l)
The commenter noted that while the utilization of biofuels might reduce the amount of carbon
released through the combustion of fossil fuels, the attendant changes in land use can result in
increased emissions from terrestrial systems. The commenter believes that selectively accounting
for only the fossil fuel carbon reductions from biofuel utilization, without considering resultant
terrestrial emissions, is not just poor accounting, it is self-defeating - both for the environment
and ultimately the broader economy. (2424.1, p.l) (See Docket Number 2424.1, pp.1-5 for more
discussion about this issue)
The commenter also noted that while biofuel production that causes the conversion of terrestrial
ecosystems may be favored by landowners who stand to gain from biofuel production (if not
carbon management), the carbon benefits (or lack thereof) of biofuel production are highly
variable and contingent upon a variety of factors. In some instances, biofuel production may
indeed be beneficial but this is highly dependent upon a variety of actors. If biofuels are
produced from waste biomass or crops grown on degraded or abandoned agricultural lands, little
or no carbon debt is incurred, and immediate emissions reduction benefits may well result.
However, establishing this determination requires the accurate accounting of not only the carbon
benefits of biofuel production, but all attendant emissions as well. (2424.1, p.5)
Our Response:
As detailed in the preamble and RIA, EPA has used up to date models, data and other
information to assess the GHG impacts of biofuels. Throughout the development of EPA's
lifecycle analysis, the Agency has employed a collaborative, transparent, and science-based
approach. EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, including both direct and the
indirect impacts of biofuels. We believe we have in a technically appropriate manner,
implemented the mandates of EISA In particular it takes into account impacts on GHG
emissions due to changes in land use such as the removal of trees.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2424
Organization: The Pacific Forest Trust
Comment:
The commenter (2424.1) believes that it is apparent that retaining terrestrial systems to actively
sequester and store atmospheric carbon is paramount. The commenter noted that currently,
domestic forestry and land use sequester approximately 884 million metric tons of carbon
dioxide annually, or nearly 12% of all U.S. GHG emissions. However, these lands have the
potential to sequester and store far more carbon - up to an additional 40 to 60 billion tons of
carbon from forests alone over the next half century. When the climate benefits of all global
terrestrial systems are considered, the services provided are staggering - with more than 2 trillion
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metric tons of carbon stored in the Earth's soils and aboveground biomass. The vast, terrestrial
carbon reserves will be critical to effectively combating global climate change. However, the
efficacy of this invaluable asset depends on the continued existence and sustainable management
of these systems. This will require that policies accurately account for carbon emissions and
reductions related to these lands, such as the lifecycle accounting of carbon emissions from both
direct and indirect land use. (2424.1, p.2)
Our Response:
EPA is making the GHG threshold determinations for RFS2 based on a methodology that
includes an analysis of the full lifecycle, including significant emissions related to international
land-use change. EPA received significant comment on including international indirect
emissions in its lifecycle calculations. EPA continues to believe that compliance with the EISA
mandate — determining "the aggregate GHG emissions related to the full fuel lifecycle,
including both direct emissions and significant indirect emissions such as land use changes" —
makes it necessary to assess those direct and significant indirect impacts that occur not just
within the United States, but also those that occur in other countries. Preamble Section V
includes more discussion of our reasons for including carbon emissions from indirect land use
change.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2425
Organization: Petro Algae
Comment:
The commenter (2425) states that it is critical the RFS2 clearly state secondary land use
emissions are not applicable to renewable fuels derived from non food-based feedstock. The
commenter adds that although the inclusion of secondary land use emissions has merits, the
models used to estimate secondary land use emission are simply not as transparent as they need
to be and further evaluation of this requirement and the models is needed. The commenter
believes that it is the spike in C02 emissions caused by the indirect land use that is causing EPA
to look at 30 or 100 year emission profiles so the net present value (NPV) of GHG emissions
have an opportunity to meet the RFS2 GHG reduction criteria. [[Docket number 2425.1, p. 5]]
Our Response:
As detailed in the preamble and RIA, EPA has used up to date models, data and other
information to assess the GHG impacts of biofuels. Throughout the development of EPA's
lifecycle analysis, the Agency has employed a collaborative, transparent, and science-based
approach. EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. We believe we have in a technically appropriate manner,
implemented the mandates of EISA. Regarding renewable fuels from non food feedstock, EPA
modeled a variety of pathways such as those using corn stover, switchgrass and algae as
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feedstock sources with varying impacts on land use. These results are detailed in the preamble
and to a greater extent in the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2446
Organization: Minnesota Farm Bureau Federation
Comment:
MFBF strongly objects to the Agency's proposal related to indirect land use changes. There is no
reliable way to measure or accurately predict how the production of biofuels will affect land use
change in other countries.
Our Response:
The Agency believes it has developed a scientifically sound, state-of-the-art,
methodology. In an independent peer review or EPA's methodology the reviewers in general
supported the importance of assessing indirect land use change and determined that EPA used
the best available tools and approaches for this work. This peer review, along with the extensive
public comments the Agency received, supported the value of quantifying the magnitude of this
uncertainty and its relative impact on the resulting lifecycle emission estimates as is done in this
final rule. It is also clear that there are uncertainties associated with these estimates, particularly
with regard to indirect land use change and the use of economic models to project future market
interactions. Therefore, we focused our efforts on the international indirect land use change
emissions and worked to manage the uncertainty around those impacts.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2466
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Comment:
The commenter (2466) strongly recommends inclusion of the impact of indirect and use change
in GHG emissions accounting. The commenter (2466) fully supports EPA's use of lifecycle
analysis of biofuels, which evaluates GHG emissions on a full fuel lifecycle basis, including
direct emissions and significant indirect emissions such as significant emissions from land use
changes. The commenter (2466) suggests that land use change, particularly from clearing and
degradation of tropical forests, is responsible for approximately one-fifth of annual global GHG
emissions. Given the volumes of biofuels proposed to be required under the proposed renewable
2 fuel standard (RFS), the rule when finalized could potentially add substantial pressure to world
markets for agricultural and forest-based biomass. (2466.1.pdf, p2)
The commenter (2466) encourages EPA to devote sufficient resources to continued improvement
of modeling tools to estimate land use change resulting from increased demand for biofuels and
evaluation of alternative models and approaches.(2466.1.pdf, p2)
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Our Response:
EPA agrees with commenter and is making the GHG threshold determinations based on a
methodology that includes an analysis of the full lifecycle, including significant emissions
related to international land-use change. The Agency also agrees with commenter on the
importance of continuing this work. As part of this ongoing effort, we will ask for the expert
advice of the National Academy of Sciences, as well as other experts, and incorporate their
advice and any updated information we receive into a new assessment of the lifecycle GHG
emissions performance of the biofuels being evaluated in this final rule. EPA will request that
the National Academy of Sciences over the next two years evaluate the approach taken in this
rule, the underlying science of lifecycle assessment, and in particular indirect land use change,
and make recommendations for subsequent rulemakings on this subject.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2471
Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter (2471.1) finds it troubling that EPA's proposed rule includes indirect land use
change ("ILUC") assessments that would disqualify virgin oil-based biodiesel from satisfying
the Biomass-Based Diesel mandate. There appears to be sufficient disagreement over the science
of ILUC and how best to make the assessments and apply the models. The commenter urges
EPA to consider tabling this part of the rule for further study. There is no downside in allowing
for more time to gather more information. (2471.1, p. 10)
Our Response:
As detailed in the preamble and RIA, EPA has used up to date models, data and other
information to assess the GHG impacts of biofuels. Throughout the development of EPA's
lifecycle analysis, the Agency has employed a collaborative, transparent, and science-based
approach. EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. We believe we have in a technically appropriate manner,
implemented the mandates of EISA
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2472
Organization: Valero Energy Corporation (Valero)
Comment:
The commenter (2472) supports EPA's Life Cycle Analysis work and the inclusion of In-Direct
Land Use Change in the RFS2 regulations. The commenter commends EPA on the job that they
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have done and believe that this part of the proposed regulations is based on sound science and
adheres to the other core principals. [[Docket number 2072, p. 2]]
Our Response:
EPA agrees with commenter that the lifecycle methodology is based on sound science
and that it incorporates indirect land use changes.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2474
Organization: North Carolina Department of Transportation
Comment:
The commenter (2474) believes that EPA should correct the false statement included in the
proposal that "the impact of any land-use change tends to be magnified with soybean bio-diesel."
(2474, p.l)
Our Response:
As stated in other responses, we believe the quoted statement is being misinterpreted.
This statement was a qualitative explanation for why land use changes projected by the
agricultural sector models in the NPRM analysis may have been larger than the corn ethanol land
use changes on a per BTU basis. We were not implying that soybeans were being planted
exclusively for soybean oil. The agricultural sector models take into account the fact that
soybeans are approximately 80% meal and 20% oil. Furthermore, the agricultural sector models
assume that farmers choose to plant soybeans based on the expected net returns associated with
the sum of both the oil and the meal ree streams. We believe this optimization approach
accurately represents the soybean production markets.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2478
Organization: ZeaChem Inc.
Comment:
The commenter (2478) is highly uncertain of the speculative inclusion of indirect land use
change (ILUC) emissions associated with advanced biofuels production. There is no scientific
consensus on how to accurately measure the indirect effects of any fuel type. Rigorous model
validation is needed to align model data sets to real world facts. This validation needs to be
undertaken in a transparent manner so that the integrity of all data and information can be
ensured. The commenter believes that the biofuels industry should not be singled out or held to a
separate standard compared to other fuels. For example, indirect GHG emissions related to the
oil supply chain are apparently not considered in the 2005 petroleum baseline as calculated by
EPA. This biased and uneven comparison automatically puts domestically produced biofuels at a
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disadvantage compared to carbon intensive, fossil fuel resources. [[Docket number 2478.1, pp. 2-
3]]
Our Response:
EPA believes there is a great deal of scientific consensus on the need to account for
indirect emissions in assessing the lifecycle impacts of biofuels. EPA's goal in developing this
methodology was to use a scientifically sound approach and to appropriately characterize
uncertainty. In an independent peer review or EPA's methodology the reviewers in general
supported the importance of assessing indirect land use change and determined that EPA used
the best available tools and approaches for this work. This peer review, along with the extensive
public comments the Agency received, supported the value of quantifying the magnitude of this
uncertainty and its relative impact on the resulting lifecycle emission estimates as is done in this
final rule.
The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and opportunity for
comment, for gasoline or diesel (whichever is being replaced by the renewable fuel) sold or
distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2486
Organization: Primafuel, Inc.
Comment:
The commenter (2486) states that if indirect land-use change (iDLUC) is to be charged to
biofuels production, then reductions in land-use must also be counted towards a credit with co-
products due to displacement. In keeping with displacement co-product credit allocation
methodology, any "cost" or "penalty" associated with a product must be counted as an "asset"
with regards to new co-products. This should also be true with regards to iDLUC penalties for
biofuels feedstock. IDLUC impacts must be counted as credits towards co-products. For
example, waste corn oil extracted from thin-stillage from dry mill ethanol plants offsets soybean
oil in the biodiesel industry. IDLUC penalties charged to soybean oil should accordingly be
counted as a credit for waste corn oil. [[Docket number 2486.1, p. 2]]
Our Response:
EPA agrees that displacement methodology should be used to assign credits to co-
products. In EPA's analysis, this methodology is used to assign the proper credits to particular
renewable fuels based on their related co-products, such as distillers grains and soybean meal.
Additional information on co-product credits and how they are attributed to renewable fuels can
be found in the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2486
Organization: Primafuel, Inc.
Comment:
Referring to the "polluter pays principle," the commenter states that iDLUC is a market-
mediated effect, and as such there are multiple causes of land use-change. Charging biofuels for
some theoretical share of this impact while not charging other (much larger and more mature)
industries is not in keeping with the polluter pays principle. In fact, it effectively subsidizes the
detrimental environmental impacts of industries like pulp & paper, timber, and cattle ranching.
[[Docket number 2486.1, p. 2]]
Our Response:
This rule is focused on the impacts of transportation fuels, not on the larger economy and
sources of pollution
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2486
Organization: Primafuel, Inc.
Comment:
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The commenter believes that so-called indirect land-use changes ought to be dealt with more
directly. Rather than attempting to mitigate the impact of non-U.S. land-use changes, EPA
should engage non-U.S. governments directly, to promote and establish native-ecosystem
protections and more sustainable land-use policies. [[Docket number 2486.1, p. 4]] [[See docket
number 2486.1, pp. 3-4 for further discussion of this issue.]]
Our Response:
The commenter's suggestions on engaging other nations in mitigating the impacts of land
use changes are outside the scope of this rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2487
Organization: Abengoa Bioenergy Corporation
Comment:
The commenter (2487) believes that EPA should exclude any estimates of international indirect
land use changes from the lifecycle GHG analysis of biofuels as there is no legitimate scientific
way to quantify those impacts. Inclusion of penalties for ILUC are based on conjecture and
assumptions that have no valid scientific basis, and which defy any credible causal link.
Our Response:
EPA disagrees with commenter that there is no legitimate scientific way—or valid
scientific basis~to quantify international land use impacts. The Agency believes it has
developed a scientifically sound, state-of-the-art, methodology. In an independent peer review
or EPA's methodology the reviewers in general supported the importance of assessing indirect
land use change and determined that EPA used the best available tools and approaches for this
work. This peer review, along with the extensive public comments the Agency received,
supported the value of quantifying the magnitude of this uncertainty and its relative impact on
the resulting lifecycle emission estimates as is done in this final rule. It is also clear that there
are uncertainties associated with these estimates, particularly with regard to indirect land use
change and the use of economic models to project future market interactions. Therefore, we
focused our efforts on the international indirect land use change emissions and worked to
manage the uncertainty around those impacts.
EPA disagrees that accounting for international land use impacts constitutes a penalty.
EPA is simply attempting to account for all GHG emissions related to the full fuel lifecycle as
required by EISA. Domestic renewable fuel producers may have no direct control over land use
changes that occur overseas as a result of renewable fuel production and use here, but their
choice of feedstock can and does influence oversees activities, and EPA believes it is appropriate
to consider the GHG emissions from those activities in its analyses.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2487
Organization: Abengoa Bioenergy Corporation
Comment:
In addition, if indirect land use change consequences for biofuels are to be attributed, then EPA
should also estimate and attribute indirect impacts of the continued use of petroleum. [[Docket
number 2487, p. 1]]
Our Response:
The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
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petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2488
Organization: Kansas Corn Growers Association
Comment:
The commenter (2488) noted that there is no evidence that corn production in the United States
has had an impact on land use in Brazil or other countries. U.S. corn growers continue to grow
more corn per acre, thanks to advances in technology and farming practices. Yields are predicted
to continue to increase especially as new biotech seed traits are introduced. A new drought
tolerant trait will soon be available in corn, allowing even more efficiencies and ability to
overcome adverse conditions that have in the past caused high yield losses. Not only do these
advances allow companies to produce more on less land, they also allow the companies to meet
the needs of all their customers, including the ethanol industry. (2488, p.2)
Our Response:
To quantify the lifecycle GHG emissions associated with the increase in renewable fuel
mandated by EISA, we compared the differences in total GHG emissions between two future
volume scenarios using well established-economic models. For each individual biofuel, we
analyzed the incremental GHG emission impacts of increasing the volume of that fuel to the total
mix of biofuels needed to meet the EISA requirements. The scenarios that we compared include
the same background projections about agricultural and economic conditions, such as the rate of
crop yield technology improvement. Thus, we isolate the effects of each type of biofuel
expansion because all other factors that affect the agricultural economy are held constant. Our
analysis suggests that even when increased crop yield are taken into account, corn ethanol
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production in the U.S. does have impacts on global commodity prices and land use decisions in
other countries.
A factor that can have a significant impact on the amount of land that may be converted
as a result of increasing biofuel demand are changes in crop yields over time. As discussed in
the NPRM, our proposal based domestic yields on USDA projections for both the reference case
and the control case. As discussed in preamble Section V.B.l.c, for this FRM we have also
included scenarios that use higher yield projections in both the reference case and the control
case. One of the key uncertainties associated with our agricultural sector economic modeling
that has the biggest impact on land use change results is the assumptions around crop yields. As
discussed in preamble Section V.A.2, we are conducting sensitivity analysis around different
yield assumptions in our analysis.
In the NPRM we also requested comment on whether the higher prices caused by an
increased in demand for biofuels would increase future yield projections in the policy case
beyond the yield trends in the reference case (sometimes referred to as "price induced yields"),
or whether these price induced yields would be offset by the reduction in yields associated with
expanding production onto new marginal acres (sometimes referred to as extensification). Based
on the comments we received, along with additional historical trend analysis conducted by
FAPRI, the international agricultural modeling framework now incorporates a price induced
yield component. The new yield adjustments are partially offset by the extensification factor,
however, the combined impact is that fewer new acres are needed for agricultural production to
meet world agricultural demands. Our consideration of price-induced yield impacts is explained
in RIA Chapter 5.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2490
Organization: Sapphire Energy
Comment:
While the commenter (2490) supports the consideration of indirect changes to land use as part of
the EPA's lifecycle analysis, they believe that the science underlying such consideration must be
further validated before it is applied. As a matter of policy, a lifecycle analysis that does not
consider indirect changes to land use will provide a misleading analysis of the true carbon impact
of biofuels, and undermine the objective of reducing GHG emissions. The commenter also notes
that the EPA correctly recognizes in the Preamble that the production of algae-based biofuels
does not compete with food crops and can be cultivated on marginal land rather than cropland.
Thus, the production of algal fuel will result in dramatically fewer indirect land use changes than
many other renewable alternatives. Consequently, algae-based fuel has a significantly lower
carbon footprint than renewable fuel feedstocks that are grown on croplands. [[Docket number
2490.1, p. 7]]
Document No.: EPA-HQ-OAR-2005-0161-2491
Organization: International Council on Clean Transportation (ICCT)
Comment:
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Regarding indirect GHG emissions from land use changes, the commenter (2491) recommends
that the EPA conduct a formal uncertainty analysis of ILUC GHG estimates obtained from both
GTAP model, and a combination FASOM and FAPRI models using Monte Carlo analysis. A
comparison of estimates obtained from various models will help correct the model assumptions
and parameters and develop a more robust and integrated model that can predict ILUC emissions
with a reasonable certainty. [[Docket number 2491.1, pp. 3-4]]
Our Response:
For this final rule we have incorporated a statistical analysis of uncertainty about critical
variables in our pathway analysis. This uncertainty analysis is explained in detail in preamble
Section V and is consistent with the specific recommendations received through our peer review
and public comments on the proposal. The uncertainty analysis focused on two aspects of
indirect land use change - the types of land converted and the GHG emission associated with
different types of land converted. In particular, our uncertainty analysis focused on such specific
sources of information as the satellite imaging used to inform our assessment of land use trends
and the specific changes in carbon storage expected from a change in land use in each
geographic area of the world modeled. We have also performed additional sensitivity analyses
including analysis of two yield scenarios for corn and soy beans to assess the impact of changes
in yield assumptions.
This uncertainty analysis provides information on both the range of possible outcomes for
the parameters analyzed, an estimate of the degree of confidence that the actual result will be
within a particular range (in our case, we estimated a 95% confidence interval) and an estimate
of the central tendency or midpoint of the GHG performance estimate.
The structure of the FAPRI international model framework is not currently suited for
Monte Carlo type analysis. Thus, we were not able to complete the specific analysis
recommended by the commenter. However, as noted above, EPA believes that we have
quantified uncertainty from the most important factors in our analysis. Furthermore, as
explained in preamble Section V, we did conduct systematic sensitivity analysis with the GTAP
model. Based on the GTAP analysis results we were able to conclude that the impacts of the
corn ethanol and soybean biodiesel mandates on land use change are statistically significant.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2494
Organization: Council of Western State Foresters
Comment:
The commenter [[2494]] states that there are large uncertainties and lack of evidence to support
theoretical scenarios of how changing U.S. biofuels production can be linked in a cause and
effect to land use changes in other countries. The Energy Independence and Security Act
requires the National Academies of Science to produce a study and report on this topic along
with other associated environment effects, which may provide some valuable insight into how to
consider this issue.
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Our Response:
Throughout the development of EPA's lifecycle analysis, the Agency has employed a
collaborative, transparent, and science-based approach. EPA's lifecycle methodology, as
developed for the RFS2 proposal, required breaking new scientific ground and using analytical
tools in new ways. The work was generally recognized as state of the art and an advance on
lifecycle thinking, specifically regarding the indirect impacts of biofuels. That being said, the
Agency has been clear to recognize that there are significant uncertainties associated with these
estimates, particularly with regard to indirect land use change and the use of economic models to
project future market interactions. EPA has quantified the uncertainty associated with significant
components of its analyses, including important factors affecting GHG emissions associated with
international land use change. The Agency is also committing to further reassess these
determinations and lifecycle estimates. As part of this ongoing effort, we will ask for the expert
advice of the National Academy of Sciences, as well as other experts, and incorporate their
advice and any updated information we receive into a new assessment of the lifecycle GHG
emissions performance of the biofuels being evaluated in this final rule. EPA will request that
the National Academy of Sciences over the next two years evaluate the approach taken in this
rule, the underlying science of lifecycle assessment, and in particular indirect land use change,
and make recommendations for subsequent rulemakings on this subject.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2494
Organization: Council of Western State Foresters
Comment:
The commenter also states that wood products produced as a result of forest land conversion
should be accounted for in GHG emissions associated with different types of land conversion.
Many of these products store sequestered carbon long after they are removed from the
landscapes terrestrial carbon pool, and should be considered as carbon release happening over
time rather than just a one-time release of carbon when the land is converted to a non-forest use
production. If the converted land was once undisturbed then the system was likely mature and in
equilibrium and not necessarily sequestering additional carbon if left alone, [[see docket #
2492.1p.2]]
Our Response:
As the commenter states, some wood felled during timber harvest and deforestation is
used in wooden products (e.g., furniture) that retain biogenic carbon for a long period of time.
Emissions from forest products can also occur over several years or decades.
With the addition of the forestry module to the FASOM domestic modeling, FASOM
takes into account both the carbon stored in harvested wood products (HWP) and the emission
streams associated with them over time for domestic forests. Thus, wood products are accounted
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for in the domestic modeling for the final rulemaking. For details on these domestic HWP
calculations, see the RIA 2.4.4.1.
Some commenters argued that consideration of the use of harvested wood in products
would decrease land use change emissions and reduce the impacts of biofuel production. For the
international land use analysis in the proposed rule, we investigated the share of cleared forest
biomass that is typically used in HWP. However, we did not account for this factor in the
proposed rule after it was determined that HWP would have a very small impact on the
magnitude of international land use change emissions.
A number of commenters expressed concern that we did not account for HWP, and they
argued that HWP would be more significant than we had determined. However, in response to
specific questions on this topic, all of the expert peer reviewers agreed that EPA had properly
accounted for HWP and other factors (e.g., land filling) that could prevent or delay emissions
from land clearing. One of the peer reviewers noted that forests converted to croplands are
generally driven by interests unrelated to timber, and thus the trees are simply burned and
exceptions are probably of minor importance.
To study this issue further, we looked at FAO timber volume estimates for 111
developing countries, and published literature on the share of harvested timber used in wood
products and the oxidation period for wood products, such as wood-based panels and other
industrial roundwood. Consistent with the peer reviewers' statements, our analysis concluded
that even in countries with high rates of harvested timber utilization, such as Indonesia, a very
small share of harvested forest biomass would be sequestered in HWP for longer than 30 years.
The details of our HWP analysis are discussed further in RIA Chapter 2.
This is an area for further work, but based on our analysis, and the feedback from expert
commenters, we do not expect that consideration of HWP would have a significant impact on the
magnitude of GHG emissions from international deforestation in our analysis. Furthermore, the
range of outcomes from consideration of HWP is indirectly captured in our assessment of forest
carbon stock uncertainty.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2495
Organization: GROWMARK, Inc.
Comment:
The commenter (2495) has concerns with EPA's proposed rule to implement the expanded
Renewable Fuels Standard with a calculation for indirect land use on international lands. The
provision addressing indirect land use should not be included in any final rule. EPA's base
assumption for corn ethanol life cycle analysis appear deficient or unreasonably limited and does
not do enough to reflect current data for corn production. It is admittedly known that land use
data in other countries is limited at best and this allows too much variance for false conclusions
on what is driving land use decisions. (2495, p.l)
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Our Response:
EPA rejects the view that the modeling relied upon in the final rule, which includes
emissions associated with international indirect land use change, cannot provide a credible and
reasonable scientific basis for determining whether the aggregate lifecycle emissions exceed the
thresholds. In addition, the definition of lifecycle emissions includes significant indirect
emissions associated with land use change. In deciding whether a bio-fuel pathway meets the
threshold, EPA has to consider what it knows about all aspects of the lifecycle emissions, and
decide whether there is a valid basis to find that the aggregate lifecycle emissions of the fuel,
taking into account significant indirect emissions from land use change meets the threshold.
Based on the analyses conducted for this rule, EPA has determined international indirect land use
impacts are significant and therefore must be included in threshold compliance assessment.
The Agency has updated and refined its modeling approach since proposal in several
important ways, including a number of updates made in direct response comments from the
public and peer reviewers. EPA is confident that its modeling of GHG emissions is
comprehensive and provides a reasonable and scientifically robust basis for making the threshold
determinations. EPA has also quantified the uncertainty associated with significant components
of its analyses, including important factors affecting GHG emissions associated with
international land use change.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2499
Organization: Dial Corporation (Henkel Company)
Comment:
The commenter [[2499]] states that they share the concerns of Soap and Detergent Association
about the potential for this rule to divert oleochemical feedstocks to biofuel production, forcing
the industry to seek alternative raw materials, such as palm oil, for oleochemical production.
Recently, Dial has had to compete with the biofuels industry for animal fats (tallow) based upon
government policies that favor biofuel production rather than traditional uses. Supporters argue
that animal fats are waste products, but this is far from true. Animal fats and waste greases have
a variety of uses, such as for oleochemicals, pet food, and animal feed. Animal fats are also not
an expandable resource; supply will not increase as demand increases- driven by government
mandates. EPAs' proposed rule has the potential to shift the country's animal fats to biofuel
production as the nation seeks to comply with the Renewable Fuel Standard. If soy-based
biodiesel is deemed ineligible for RIN credits due to potential greenhouse gas emissions under
the indirect land use change calculations, then increased pressure will be placed on using animal
fats for biofuels [[See #2499.1 p.l]]
Our Response:
EPA did not fully analyze competing uses for some feedstock sources such as the
commenter identified. While these uses may have economic impacts, they do not impact the
lifecycle GHG assessment or eligibility of the feedstock for use in transportation fule.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2502
Organization: Verenium Corporation
Comment:
The commenter (2502.1) believes that EPA should defer consideration of indirect land use
change issues, and specifically the international component of land use change, until there is a
stronger empirical basis for drawing conclusions supported by broad scientific consensus.
(2502.1, p.9) (See Docket Number 2502.1, pp.8-9 for a detailed discussion of this issue)
Our Response:
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 will continue to change.
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. As part of this
ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as well as
other experts, and incorporate their advice and any updated information we receive into a new
assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in this
final rule. EPA will request that the National Academy of Sciences over the next two years
evaluate the approach taken in this rule, the underlying science of lifecycle assessment, and in
particular indirect land use change, and make recommendations for subsequent rulemakings on
this subject. This new assessment could result in new determinations of threshold compliance
compared to those included in this rule that would apply to future production (from plants that
are constructed after each subsequent rule).
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (25085.2) believes that rather than imposing a highly uncertain indirect land use
change factor on the carbon intensity of biofuels, EPA should focus solely on direct land use
change at this time, and adopt a globally harmonized approach to for biofuels to address potential
indirect land use change issues. The commenter also believes that rather than adopting a highly
uncertain indirect land use change factor, EPA should adopt appropriate sustainability criteria for
biofuels. The commenter is concerned that applying an indirect land use change factor could
have a significant adverse impact on the existing biofuels industry, and the developing advanced
biofuels industry. (2505.2, p.15)
Our Response:
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EPA believes that a complete analysis of the aggregate GHG emissions related to the full
lifecycle of renewable fuels includes the significant indirect emissions from land use change that
are predicted to result from increased domestic use of agricultural feedstocks to produce
renewable fuel. The statute specifically directs EPA to include in its analyses significant indirect
emissions such as significant emissions from land use changes. EPA has not ignored either the
terms "significant" or "life cycle." It is clear from EPA's assessments that the modeled indirect
emissions from land use changes are "significant" in terms of their relationship to total GHG
emissions for given fuel pathways. Therefore, they are appropriately considered in the total
GHG emissions profile for the fuels in question. EPA has not ignored the term "life cycle." The
entire approach used by EPA is directed to fully analyzing emissions related to the complete
lifecycle of renewable and baseline fuels.
EPA recognizes that it has had to break new scientific ground in developing a lifecycle
methodology as required by EISA. This is why the Agency employed a collaborative,
transparent and science-based approach. EPA took numerous measures to seek public comment
on our approach—including extending the comment period for the proposed rule, holding a two-
day public workshop on the lifecycle methodology, and reaching out to dozens of stakeholders,
including the biodiesel community, through individual meetings, conferences and events. As
noted by the commenter, EPA also initiated an independent peer review of specific areas of our
work. The information we received through this process has led to the approach in this final rule
which bases the GHG threshold compliance determinations on all the information currently
available and quantifies the uncertainty about critical variables.
Further, EPA recognizes the state of scientific knowledge continues to evolve in this area.
While the Agency is using its current lifecycle assessments to inform the regulatory
determinations for fuel pathways in this final rule, the Agency is also committing to further
reassess these determinations. As part of this ongoing effort, we will ask for the expert advice of
the National Academy of Sciences as well as other experts.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2508
Organization: Environmental Working Group (EWG)
Comment:
The commenter (2508) believes that EPA has the authority and duty to account for direct land
use changes. There is significant potential as well for domestic indirect land use change that
should be accounted for by EPA. Such indirect land use change can occur if a producer replaces
food crops with fuel crops on existing cropland and then clears forest, rangeland, or pasture to
plant food crops. Expanding his cropland acreage to produce the food crops, even without
international ILUC accounting, this type of obvious domestic indirect land use change should be
accounted for. (2508, p.2)
The commenter is also very concerned about the potential for slippage under the land conversion
prohibitions. If a producer plants energy crops on existing cropland, then clears other land to
produce the displaced crops, slippage is occurring. EPA explicitly states in the rule that they
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don't have authority to prohibit slippage. The commenter believes that some coordination
between USDA base acreage accounting and EPA biofuel feedstock accounting needs to be
developed to avoid this problem. (2508, p.2)
Our Response:
EPA agrees with commenter on the importance of accounting for domestic and
international indirect emissions. Our final methodology as presented in this final rule includes
these emissions.
In keeping with EISA, under today's final rule, renewable fuel producers may only
generate RINs for fuels made from feedstocks meeting the definition of renewable biomass. In
order to implement this requirement, the final rule presents three potential mechanisms for
domestic and foreign renewable fuel producers to verify that their feedstocks comply with this
requirement. Further, based on USDA's publicly available agricultural land data, EPA is able to
establish a baseline of the aggregate amount of U.S. agricultural land (meaning cropland,
pastureland and CRP land in the United States) that is available for the production of crops and
crop residues for use in renewable fuel production consistent with the definition of renewable
biomass. EPA has determined that, in the aggregate this amount of agricultural land (land
cleared or cultivated prior to EISA's enactment (December 19, 2007) and actively managed or
fallow, and nonforested on that date) is expected to, at least in the near term, be sufficient to
support EISA renewable fuel obligations and other foreseeable demands for crop products,
without clearing and cultivating additional land. Discussion of other comments related to this
issue is contained in section 3.3.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2510
Organization: Iowa Renewable Energy, LLC
Comment:
The commenter (2510) states that if EPA includes indirect emissions due to land use change it
has to be applied across the board equally, not selectively. Land use is constantly changing here
and abroad. The American farmer and small businessman CAN NOT be held responsible for
actions of foreign governments in setting policy, including how land is used or what crops may
be grown. The commenter believes EPA is assuming that when anyone in the world is tilling
another acre of soil for crops it is not going to be used for food. That's incorrect, acres are tilled,
acres are put into conservation - it an ever changing number. As crops are grown more
efficiently, is it wrong to not use additional gains beyond food needs for uses that also benefit
mankind, including the reduction of petroleum oil usage? The commenter urges EPA to discard
this piece of the RFS2. [[Docket number 2510.1, p. 5]]
Our Response:
EPA notes that Congress has specified in Section 211 (o) the required causal link between
a fuel and indirect emissions. The indirect emissions must be "related to" the full fuel lifecycle.
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EPA believes that it has demonstrated this link through its modeling efforts. Specifically, the
models predict that increased demand for feedstocks to produce renewable fuel that satisfies
EISA mandates will likely result in international land use change. Such change is, then, "related
to" the full fuel lifecycle of these fuels. EPA does not believe that the statute requires EPA to
wait until these effects occur to establish the required linkage, but instead believes that it is
authorized to use predictive models to demonstrate likely results.
Therefore, we do not attribute all land use change to biofuels in our lifecycle analysis.
Instead, we evaluated the incremental impact that biofuel production will have on existing land
use and land use change. Our approach assumes that other drivers will still be in place and
isolates the impacts due to biofuels production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2512
Organization: Conservation International
Comment:
The commenter (2512) feels the inclusion of indirect land use change is absolutely critical to
ensuring biofuels play a real role in reducing global greenhouse gas emissions, and thus
mitigating climate change. The commenter would strongly oppose any attempts to remove iLUC
from the RFS2. (2512, p. 1)
Recognizing the uncertainty inherent in iLUC calculations and the limitations of current models,
the commenter recommends that models and assumptions be reviewed after a specified period of
time (perhaps 5 years) and adjusted as necessary, to take into account advances in science and
modeling and lessons learned from the first years of implementation of the RFS2. (2512.1, p.3)
The commenter believes that the direct emissions calculations should also include any clearing
of vegetation on land placed under production for feedstocks (for example, secondary forest that
has regenerated on previously-cleared land). (2512.1, p.4)
The commenter also agrees that emissions from outside the U.S. (both direct and indirect) must
be includes in analysis, as the impact of GHG emissions is not constrained by borders, but rather
affects the global climate. (2512.1, p.7)
The commenter noted that ISO standards serve as an important minimum standard for programs,
and the ISO standard offers one of the more developed standards for biofuels. The commenter
believes that EPA should clarify it will use a cradle-to-grave LCA as opposed to any other
boundary option possible. (2512.1, p.7)
The commenter questions if potential REDD payments are factored into the models. If they are
not, the commenter suggests this option be considered, as potential payments for maintaining
standing forests will likely be a factor in decisions by landowners whether to convert land in the
future. The commenter believes it is also important to note that while economic factors are
critical to landowners in making conversion decisions, costs and profit are not the only factors.
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Other issues, such as securing recognized land ownership and tenure, can also be driving forces
behind conversion. The commenter believes that it should be made clear that the potential
conversion of forestry lands is indirect, as direct conversion would not be allowed given the cut-
off date. The commenter fully supports the concept of incorporating government policies and
regulations, as well as enforcement capabilities into the models (perhaps through a governance
coefficient for enforcement effectiveness). (2512.1, pp.10-11)
The commenter (2512.1) believes that foregone sequestration should be included in the proposal.
(2512.1, p.ll)
Our Response:
EPA appreciates Conservation International's support for including indirect land use
change in the lifecycle analysis. EPA recognizes that it has had to break new scientific ground in
developing a lifecycle methodology as required by EISA. This is why the Agency employed a
collaborative, transparent and science-based approach. EPA took numerous measures to seek
public comment on our approach—including extending the comment period for the proposed
rule, holding a two-day public workshop on the lifecycle methodology, and reaching out to
dozens of stakeholders, including the biodiesel community, through individual meetings,
conferences and events. As noted by the commenter, EPA also initiated an independent peer
review of specific areas of our work. The information we received through this process has led
to the approach in this final rule which bases the GHG threshold compliance determinations on
the weight of evidence currently available and quantifies the uncertainty about critical variables.
Further, EPA recognizes the state of scientific knowledge continues to evolve in this area.
While the Agency is using its current lifecycle assessments to inform the regulatory
determinations for fuel pathways in this final rule, the Agency is also committing to further
reassess these determinations. As part of this ongoing effort, we will ask for the expert advice of
the National Academy of Sciences as well as other experts.
For EPA's modeling of both domestic and international land use change, lifecycle GHG
assessments include emissions due to clearing of land due for direct cultivation of renewable fuel
feedstocks. FASOM incorporates this calculus directly in its domestic land use modeling. In the
case of international land use change, satellite data analyses provide historical trends that capture
land conversion of secondary forests into agricultural lands.
EPA has included in its analysis significant direct and indirect land use change that
occurs domestically and internationally due to biofuels production under the Renewable Fuel
Standard program, in accordance with EISA. In agreement with the commenter, EPA believes
that a complete analysis of the aggregate GHG emissions related to the full lifecycle of
renewable fuels includes the significant indirect emissions from international land use change
that are predicted to result from increased domestic use of agricultural feedstocks to produce
renewable fuel.
EPA has used International Standards Organization (ISO) guidance on lifecycle analysis
in developing its lifecycle analysis. We have drawn upon a suite of the most recent and
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advanced and peer-reviewed models, studies, and data to develop a methodology for lifecycle
analyses of renewable fuel greenhouse gas emissions. As mandated in EISA, lifecycle GHG
emissions of biofuels was compared to the lifecycle GHG emissions of a 2005 gasoline or diesel
baseline. For both the biofuels and petroleum GHG lifecycle analysis, EPA has developed clear
and consistent system boundaries (both physical and temporal) which are explicitly laid out in
the Final Rulemaking. Further, we assessed uncertainty in the final analysis. EPA provides a
complete description of the lifecycle analysis methodology and provides the data used in the
analysis in the Final Rule Preamble, Regulatory Impact Assessment, and the Docket.
The lifecycle analysis used for the final rulemaking is based on current domestic and
international laws, regulations, and policies, as EPA cannot predict those policies which will be
implemented in the future in the U.S., other countries, or internationally. Therefore, REDD
payments are not incorporated into the current lifecycle analysis.
Foregone forest sequestration was included in EPA's analysis for the proposal and it is
still included in EPA's analysis for this final rulemaking. Preamble Section V explains our
evaluation of foregone sequestration and how it fits into our lifecycle GHG analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2513
Organization: Institute for Agriculture and Trade Policy
Comment:
The commenter [[2513]] does not presently support the inclusion of indirect land use change
estimates in these calculations, as they do not believe the science behind their calculations is
sufficiently accurate at this stage to be used for effective policymaking. They do not dispute the
fact that undesirable land use change is a very serious issue and that biofuel development may
certainly play a part in driving this change, but it is one they believe at this time, with our current
state of knowledge, would be best dealt with through direct policies and shared actions to attack
the overall systemic conditions that result in undesirable land use change and environmental
degradation. [[Docket* 2513.1 p.1-2]]
Our Response:
EPA is making the GHG threshold determination based on a methodology that includes
an analysis of the full lifecycle, including significant emissions related to international land-use
change. EPA has used the best available models for this purpose, and has incorporated many
modifications to its proposed approach based on comments from the public and peer reviewers
and developing science. EPA has also quantified the uncertainty associated with significant
components of its analyses, including important factors affecting GHG emissions associated with
international land use change. The Agency has updated and refined its modeling approach since
proposal in several important ways, and EPA is confident that its modeling of GHG emissions
associated with international land use is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations described above. We plan to
continue to improve upon our analyses, and will update it in the future as appropriate. Through
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these actions, EPA has met its obligations under EISA. The additional policies mentioned by
commenter are beyond the scope of this rulemaking.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2514
Organization: Western Organization of Resource Councils
Comment:
Conversion [[2514]] of land to agro-fuels crops outside the borders of the U.S. is an issue that
needs to be dealt with forcefully and directly. The obvious approach is by not permitting imports
of ethanol and biodiesel. [[#2514.1 p.3]]
Our Response:
The application of the lifecycle analysis methodology is neutral to country of origin. The
same requirements apply to both domestic and imported fuels.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2517
Organization: National Association of State Foresters
Comment:
The commenter urges EPA to conduct its own Life Cycle Analysis, and to consider the one being
conducted by the National Academy of Science per EISA, before promulgating final regulations
based on science that is incomplete, uncertain and variable. The commenter believes the agency
will then find that wood and forest biomass will meet the requirements for advanced biofuels or
cellulosic biofuels criteria.
Our Response:
EPA has conducted its own LCA for this rulemaking. We have determined that fuels
produced from forest waste biomass do meet the requirements for advanced biofuels and
cellulosic biofuels criteria. We continue to evaluate the lifecycle GHG impacts of producing
biofuels from from wood from commercially planted forests.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2519
Organization: Canada, Foreign Affairs and International Trade
Comment:
The commenter (2519) specifically questions the regulatory assessment that could include
indirect land use change and they would like to reserve comment pending further development of
the proposal. [[Docket number 2519.1, p. 1]]
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Our Response:
As required by EISA and as technically appropriate, EPA has included indeirect land use
change in its GHG assessment. EPA provided a public comment period and other opportunities
which parties have utilized to provide comments and suggestions to EPA on its LCA. Since
EPA expects to continue to refine and update its lifecycle assessment, this should provide an
opportunity to further comment.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2528
Organization: U.S. Congress, House of Representatives
The commenter included a comment letter from the Missouri Corn Growers Association (2528,
pp.2-3)
Comment:
The commenter (2528) does not believe indirect land uses in foreign countries ought to be a
consideration when it comes to advancing the American biofuels industry. (2528), p.l)
Our Response:
EPA notes that implementation of EISA will undoubtedly benefit the domestic
agricultural sector as a whole, with some components benefiting more than others depending in
part on the lifecycle GHG emissions associated with the products to be made from individual
feedstocks. However, if Congress had sought to promote all biofuel production without regard to
GHG emissions related to the full lifecycle of those fuels, it would not have specified GHG
reduction thresholds for each category of renewable fuel for which volume targets are specified
in the Act.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2529
Organization: National Grain and Feed Association
Comment:
The commenter (docket #2529.1) states that EPA is using unproven models when making its
proposed policy decisions, because the science on indirect land use is immature, and that models
used by the agency are not sufficiently developed to provide validated outcomes.
The commenter states that EPA's models, after considering land use changes, reduce the
estimated reduction of GHG emissions of corn ethanol from 61 percent to 16 percent, and reduce
the estimated reduction of GHG emissions of soy biodiesel from 80 percent to 22 percent, with
essentially all of the decrease resulting from alleged international land use change.
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The commenter dislikes that EPA assumes a static U.S. land use scenario under which 34 million
acres of land will remain in the Conservation Reserve Program (CRP), even if crop prices
increase. They feel that it makes sense to assume some flexibility in U.S. land use patterns in the
coming years, rather than to assume a completely static land use situation.
[[see docket #2529.1 p. 1]]
Our Response:
As detailed in the preamble and RIA, EPA has used up to date models, data and other
information to assess the GHG impacts of biofuels. Throughout the development of EPA's
lifecycle analysis, the Agency has employed a collaborative, transparent, and science-based
approach. EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. We believe we have in a technically appropriate manner,
implemented the mandates of EISA
Based on coordination with USDA, EPA modeled assuming land in CRP will be
supported by USDA and therefore would not be available for biofuel feedstock production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2532
Organization: BioEnergy Producers Association
Comment:
The commenter (2532) points out that they have previously written to urge that EPA, in any
future regulations relating to Indirect Land Use Change, stipulate that there are no such impacts
direct or indirect involved in the production of advanced biofuels from organic wastes. It is
important for EPA to calculate the life-cycle benefits of biofuels production. [[Docket number
2532, p. 1]]
The commenter believes the regulations under consideration in association with EPA's ILUC
rule making would be burdensome for third generation biofuels producers (i.e., those that will be
using new conversion technologies to produce advanced biofuels, electricity and other products
from municipal solid waste and other non-food derived and non-purpose grown organic waste
materials). [[Docket number 2532, p. 2]]
Our Response:
EPA has analyzed biofuels from biogenic waste feedstock and assessed their potential
indirect land use impacts, determining that such impacts are negligible or nonexistent.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2541
Organization: Citizen
Comment:
The commenter (1722) noted that the contentious issue is EPA's interpretation that the land use
evaluation should be applied to foreign nations. Biofuel industry representatives argue that this
was not the intent of Congress. The commenter noted that in adding projected foreign land use
change to 2022, the reduction in GHG emissions for corn ethanol plants using natural gas as a
fuel drops form 60% to 16% to 35%, depending on the type of operation. For soybean oil
biodiesel plants, the reduction drops from 80% to 22%. (2541_Copyright, p.l)
Our Response:
EPA does not agree with the presumption that Congress is concerned only with domestic
effects and domestic impacts only or that Congress intended to benefit domestic agriculture
through EISA enactment, and that the statute's ambiguous terms should not be interpreted in a
manner that could harm domestic agriculture in general. Although considering international
emissions in its analyses could result in different implications under the statute for various fuels
and fuel pathways as compared to ignoring these emissions, EPA believes that this is precisely
the outcome that Congress intended. Implementation of EISA will undoubtedly benefit the
domestic agricultural sector as a whole, with some components benefiting more than others
depending in part on the lifecycle GHG emissions associated with the products to be made from
individual feedstocks. If Congress had sought to promote all biofuel production without regard
to GHG emissions related to the full lifecycle of those fuels, it would not have specified GHG
reduction thresholds for each category of renewable fuel for which volume targets are specified
in the Act.
Based on the analyses and approach described in Section V of the preamble, EPA is
determining 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 will meet the 20% GHG emission reduction threshold
compared to the 2005 baseline gasoline. We are also determining that biobutanol from corn
starch meets the 20% threshold. Similarly, EPA is making the determination that biodiesel and
renewable diesel from soy oil or waste oils, fats and greases will exceed the 50% GHG threshold
for biomass-based diesel compared to the 2005 petroleum diesel baseline. In addition, we have
now modeled biodiesel and renewable diesel produced from algal oils as complying with the
50% threshold for biomass-based diesel. EPA is also determining that ethanol from sugarcane
complies with the applicable 50% GHG reduction threshold for advanced biofuels. The modeled
pathways (feedstock and production technology) for cellulosic ethanol and cellulosic diesel
would also comply with the 60% GHG reduction threshold applicable to cellulosic biofuels.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2549
Organization: Triton Energy LLC
Comment:
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The commenter (2549.1) believes that flawed and immature assumptions and methodology are
being utilized to measure the indirect land use impacts of U.S. soy Renewable Diesel production.
(2549.1, p.2)
The commenter believes that ILUC is not fully developed and many assumptions penalize the
biofuel industry. The commenter requests careful review and development of ILUC be
conducted and that indirect effects of all other fuels are also included in the calculations. (2549.1,
P-7)
Our Response:
Throughout the development of EPA's lifecycle analysis, the Agency has employed a
collaborative, transparent, and science-based approach. EPA's lifecycle methodology, as
developed for the RFS2 proposal, required breaking new scientific ground and using analytical
tools in new ways. The work was generally recognized as state of the art and an advance on
lifecycle thinking, specifically regarding the indirect impacts of biofuels.
EPA also recognizes that as the state of scientific knowledge continues to evolve in this
area, the lifecycle GHG assessments for a variety of fuel pathways will continue to change.
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. As part of this
ongoing effort, we will ask for the expert advice of the National Academy of Sciences, as well as
other experts, and incorporate their advice and any updated information we receive into a new
assessment of the lifecycle GHG emissions performance of the biofuels being evaluated in this
final rule.
Lastly, EPA disagrees that accounting for international land use impacts constitutes a
penalty. EPA is simply accounting for all GHG emissions related to the full fuel lifecycle as
required by EISA in order to determine the threshold performance for these biofuels. Domestic
renewable fuel producers may have no direct control over land use changes that occur overseas
as a result of renewable fuel production and use here, but their choice of feedstock can and does
influence oversees activities, and EPA believes it is appropriate to consider the GHG emissions
from those activities in its analyses.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2613
Organization: Citizen (sample comment letter representing 306 comment letters received
from mass comment campaign sponsored by an anonymous organization)
Comment:
The commenter (2613) notes that, "The methodology used to measure the impacts of U.S. corn
and ethanol production is the issue of International Land Use Change or Indirect Land Use is
flawed and immature. There is no evidence to support EPA's claim that corn production in the
U.S. has any impact on the production of crops in other countries such as Brazil." (2613 p. 1)
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Our Response:
The Agency believes it has developed a scientifically sound, state-of-the-art,
methodology. In an independent peer review or EPA's methodology the reviewers in general
supported the importance of assessing indirect land use change and determined that EPA used
the best available tools and approaches for this work. The Agency also has updated and refined
its modeling approach since proposal in several important ways, including a number of updates
made in direct response comments from the public and peer reviewers. EPA is confident that its
modeling of GHG emissions is comprehensive and provides a reasonable and scientifically
robust basis for making the threshold determinations. EPA has also quantified the uncertainty
associated with significant components of its analyses, including important factors affecting
GHG emissions associated with international land use change.
EPA has used a suite of global models to project a variety of agricultural impacts of the
RFS program, including changes in the types of crops and number of acres planted world-wide.
These shifts in the agricultural market are a direct consequence of the increased demand for
biofuels in the U.S. This increased demand diverts biofuel feedstocks from other competing uses,
and also increases the price of the feedstock, thus spurring additional international production.
Our analysis uses country-specific information to determine the amount, location, and type of
land use change that would occur to meet these changes in production patterns. The linkages of
these changes to increased U.S. biofuel demand in our analysis are generally close, and are not
extended or overly complex.
Overall, EPA is confident that it is appropriate to consider indirect emissions, including
those from both domestic and international land use changes, as "related to" the full fuel
lifecycle, based on the results of our modeling. These results form a reasonable technical basis
for the linkage between the full fuel lifecycle of transportation fuels and indirect emissions, as
well as for the determination that these emissions are significant. EPA believes that while
uncertainty in the resulting aggregate GHG estimates should be taken into consideration, it
would be inappropriate to exclude indirect emissions estimates from this analysis. The use of
reasonable estimates of these kinds of indirect emissions allows EPA to conduct a reasoned
evaluation of total GHG impacts, which is needed to promote the objectives of this provision, as
compared to ignoring or not accounting for these indirect emissions.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2614
Organization: Citizen (sample comment letter representing 364 comment letters received
from mass comment campaign sponsored by an anonymous organization)
Comment:
The commenter (2614) notes that, "EPA should consider domestic land use change only. Trying
to reign in international land use changes is not EPA's jurisdiction and nearly impossible as
many countries such as China, India and Brazil do not conform to Green House Gas compliance
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RFS2 Summary and Analysis of Comments
anyway. Your indirect land use proposal will place the grain I produce at a competitive
disadvantage in our global market place." (2614 p.l)
Our Response:
EPA does not agree that including international indirect emissions in EPA's lifecycle
analysis exercises regulatory authority over activities that occur solely outside the U.S., nor does
it raise questions of extra-territorial jurisdiction. EPA's regulatory action involves an assessment
of products either produced in the U.S. or imported into the U.S. EPA is simply assessing
whether the use of these products in the U.S. satisfies requirements under EISA for the use of
designated volumes of renewable fuel, cellulosic biofuel, biomass-based diesel, and advanced
biofuel. Considering international emissions in determining the lifecycle GHG emissions of the
domestically-produced or imported fuel does not change the fact that the actual regulation of the
product involves its use solely inside the U.S.
If Congress had sought to promote all biofuel production without regard to GHG
emissions related to the full lifecycle of those fuels, it would not have specified GHG reduction
thresholds for each category of renewable fuel for which volume targets are specified in the Act.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2615
Organization: Citizen (sample comment letter representing 9 comment letters received
from mass comment campaign sponsored by an anonymous organization)
Comment:
The commenter (2615) notes that the consideration of international land use change should be
eliminated. Calculations should focus on domestic land use change only. (2615 p. 1)
Document No.: EPA-HQ-OAR-2005-0161-2617
Organization: Citizen (sample comment letter representing 72 comment letters received
from mass comment campaign sponsored by an anonymous organization)
Comment:
The commenter notes that, "EPA's proposal assumes that U.S. biofuel production will lead to
reduced exports. But there's simply no evidence to support that claim - nor other EPA
assumptions about how agricultural land use will change with increased biofuel production."
(2617 p.l)
Our Response:
EPA's analysis is focused only on the difference between two biofuel scenarios, holding
all other changes constant. Thus when considering the impact on exports, our analysis sought to
determine only the impact of the higher volume of renewable fuels as mandated by EISA
compared to a business as usual case. To conduct this analysis we use economic modeling to
determine the market impacts of using agricultural commodity feedstocks for biofuels. The
comments and peer review supported our need to use these economic models.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2618
Organization: Citizen (sample comment letter representing 40 comment letters received
from mass comment campaign sponsored by an anonymous organization)
Comment:
The commenter (2618) notes that, "Forcing hypothetical 'models' on U.S. farmers and
renewable fuel producers which the rest of the world does not abide by is unfair and puts our
country at a huge disadvantage. Indirect land use is an unproven concept and should not be a
consideration in the RFS2." (2618 p. 1)
Our Response'.
As described in the proposal, to estimate lifecycle indirect impacts of biofuel production
requires the use of economic modeling to determine the market impacts of using agricultural
commodity feedstocks for biofuels. The use of economic models and the uncertainty of those
models to accurately predict future agricultural sector scenarios was one of the main comments
we received on our analysis. While the comments and specifically the peer review supported our
need to use economic models to incorporate and measure indirect impacts of biofuel production,
they also highlighted the uncertainty with that modeling approach, especially in projecting out to
the future.
However, it is important to note that while there are many factors that impact the
uncertainty in predicting total land used for crop production, making accurate predictions of
many of these factors are not relevant to our analysis. For example different assumptions about
economic growth rates, weather, and exchange rates will all impact future agricultural
projections including amount of land use for crops. However, we are interested only in the
difference between two biofuel scenarios holding all other changes constant. So the absolute
values and projections for crops and other variables in the model projections are not as important
as the difference the model is projecting due to an increase in biofuels production. This limits
the uncertainty of using the economic models for our analysis.
Furthermore, one of the key uncertainties associated with our agricultural sector
economic modeling that has the biggest impact on land use change results is the assumptions
around crop yields. As discussed in preamble Section V.A.2, we are conducting sensitivity
analysis around different yield assumptions in our analysis.
Therefore, because of the fact that we are only using the economic models to determine
the difference between two projected scenarios and the fact that we are conducting sensitivity
analysis around the yield assumptions we feel it is appropriate and acceptable to use economic
models in our analysis of determining GHG thresholds in our final rule analysis.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2619
Organization: Citizen (sample comment letter representing 162 comment letters received
from mass comment campaign sponsored by an anonymous organization)
Comment:
The commenter (2619) is concerned that, "The calculation of greenhouse gas emissions includes
indirect land use changes for biofuels that as currently drafted in the RFS2 disqualifies Biomass-
based Diesel derived from vegetable oil, including domestically produced soybean. Vegetable
oils account for more than sixty percent of the feedstock that is available to meet the RFS2
Biomass based Diesel targets, and the use requirements established cannot be met if these
feedstocks are disqualified from the program. Given the complexity of calculating the indirect
land use component of the greenhouse gas emissions for biofuels at this time we ask that the
EPA refrain from including any calculation of the indirect land use change components in
determining the life-cycle greenhouse gas emissions for biofuels at this time." (2619 p. 1)
Our Response:
Based on the analyses and approach described in Section V of the preamble, EPA is
determining that biodiesel and renewable diesel from soy oil or waste oils, fats and greases will
exceed the 50% GHG threshold for biomass-based diesel compared to the 2005 petroleum diesel
baseline. In addition, we have now modeled biodiesel and renewable diesel produced from algal
oils as complying with the 50% threshold for biomass-based diesel.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2623
Organization: Citizen
Notes:
Docket number 2623 includes a letter of affirmation from Sierra Club (2623), a petition letter
signed by 13,432 citizens (2623.2) and 1,614 personalized comments based on the petition letter
(2623.1). Due to some overlap in the two attachments this equates to a total of 14,855 individual
comments. Information for all 3 sources is summarized under this docket number.
Comment:
The commenter (2623) notes that, "Accounting for indirect land use changes as Congress called
for in creating this RFS - is critical to making sure we truly reduce greenhouse gas emissions by
2050 as we use more renewable fuels." (2623.2 p. 1)
Our Response:
EPA agrees with the importance of accounting for indirect land use change as required by
Congress.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2624
Organization: Citizen (sample comment letter representing 1,084 comment letters
received from mass comment campaign sponsored by an anonymous organization)
Comment:
The commenter encourages EPA to, "withdraw the international land use penalties that are
assigned to Biofuel." (2624 p. 1)
Our Response:
EPA is making the GHG threshold determination based on a methodology that includes
an analysis of the full lifecycle, including significant emissions related to international land-use
change. EPA has used the best available models for this purpose, and has incorporated many
modifications to its proposed approach based on comments from the public and peer reviewers
and developing science. EPA has also quantified the uncertainty associated with significant
components of its analyses, including important factors affecting GHG emissions associated with
international land use change. The Agency has updated and refined its modeling approach since
proposal in several important ways, and EPA is confident that its modeling of GHG emissions
associated with international land use is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations described above.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2625
Organization: Citizen (sample comment letter representing 400 comment letters received
from mass comment campaign sponsored by an anonymous organization)
Comment:
The commenter (2625) notes that, "Existing feedstock sources are already available to meet this
production level (and even additional production as noted below). As such, no land use changes,
and therefore no significant emissions from those changes, can be associated with existing
production." (2625 p. 1)
Our Response:
EPA believes its analysis has clearly established that the increase in biofuel production as
mandated by EISA results in both direct and indirect land use changes.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2625
Organization: Citizen (sample comment letter representing 400 comment letters received
from mass comment campaign sponsored by an anonymous organization)
Comment:
Further, the commenter (2625) notes outputs from lifecycle analysis models are only as good as
their inputs. Unfortunately, much of the data and assumptions contained within the nine models
used by EPA are inaccurate. Examples include:
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o Energy balance data used by EPA is out of date.
o Co-product allocations for glycerine were not incorporated.
o Global market drivers for feedstocks, like soybeans are not included.
(2625 p. 2)
Our Response:
To the maximum extent possible, we have continued to review and update the data and
assumptions underlying our modeling tools. As part of the final rule we updated the energy use
assumptions for biodiesel production to be in line with the latest energy balance reports including
the University of Idaho Study. Therefore, the final rule assumes lower energy use for biodiesel
production compared to the proposal analysis. In addition, we have revised our analysis to
assume that glycerin will displace residual oil as an energy source for this final rulemaking. We
disagree, however, that global market drivers for feedstocks are not included in our models. For
example, our partial equilibrium agricultural sector models FASOM and FAPRI both take into
account that approximately 80% of the soybean is meal, whereas approximately 20% of the
soybean is oil. Profit maximization that takes into account both streams of ree is included in the
projected planting decisions of farmers. In addition, both agricultural sector models take into
account changes in macroeconomic conditions over time, such as increases in income and
population that also affect world markets for feedstocks.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2625
Organization: Citizen (sample comment letter representing 400 comment letters received
from mass comment campaign sponsored by an anonymous organization)
Comment:
Further, the commenter (2625) notes that, "EPA's approach establishes an artificially low
production baseline, and does not accurately account for increasing crop yields and production
efficiencies. The agency utilized a 2007 Energy Information Agency analysis that
underestimates U.S. biodiesel production. In addition, multiple state policies and fleet
requirements will be implemented between 2008 and 2022. These use requirements will increase
the baseline volume of biodiesel that will be used regardless of the RFS2 program. The EPA
also penalizes the biodiesel industry by not considering new technology regarding fats and oils
production. Sources such as camelina, winter canola, and algae are not taken into account. In
addition, higher yielding oilseed technology has not been fully incorporated. Thus, EPA
overestimated potential indirect land use change associated with vegetable oil based biodiesel."
(2625 p.2)
Our Response:
We do consider in our analysis the increasing crop yields and production efficiencies
over time. In addition, we have also analyzed as part of this rulemaking a high yield case as a
sensitivity analysis. This does not change the fact that any change in biofuel volumes for
whatever reason compared o a case without them would still have impacts. Even if biodiesel
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volumes would have reached the mandated volumes in 2022 there is still an impact with
producing these volumes compared to a case without them. The threshold analysis mandated by
EISA requires EPA to determine the impacts of the different biofuels production which requires
us to consider two scenarios with differing volumes of biofuels. So regardless of what volume
might or might not actually be produced, our threshold analysis would still be based on two
different volume scenarios and production of any amount of biofuels would still have an impact.
Furthermore, since our analysis normalizes the greenhouse gas emissions impacts on a per BTU
basis, the effect of using different volumes in our calculations is minimized.
For this rulemaking analysis we are only considering the policy for which this analysis
was done, namely EISA. Where there are other polices on the books that would impact our
analysis, they have been accounted for but we do not project future polices that are not in place.
For the final rule analysis we have incorporated the LCA results for an algae oil pathway
but not for other oilseed pathways. However, we do not extend our results from soybean
modeling to other oilseed pathways. Those would be analyzed separately through future
rulemaking analysis if necessary.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2625
Organization: Citizen (sample comment letter representing 400 comment letters received
from mass comment campaign sponsored by an anonymous organization)
Comment:
Further, the commenter (2625) notes that, "The GHG emissions from biodiesel derived from
virgin vegetable oils should be depreciated over 100 years, as EPA has proposed, rather than the
30 years some have suggested. Historical data indicates that land converted to agricultural
production tends to continue in that purpose for at least a century. Dramatic innovation is not
occurring in the engine manufacturing industry in a way that suggests that heavy duty liquid
transportation fuels will no longer be needed in as little as 30 years, or any remotely similar
timeframe. Additionally, 100 years is a modest scope of time when you consider that the
greenhouse gases that are being released by the burning of fossil fuels took the Earth millions of
years to capture and sequester." (2625 p.2-3)
Our Response:
In the proposed rule, EPA highlighted two time periods of 30 years and 100 years for
consideration in GHG lifecycle analysis. The Agency discussed the relative advantages of these,
and other, time periods. The expert peer reviewers discussed a number of justifiable time periods
ranging from 13 to 100 years. The reviewers said that longer time frames, such as 100 years,
were only appropriate if the Agency used positive discount rates to value future emissions.
Almost all of the peer reviewers specifically said that a time frame of 20 to 30 years would be
justifiable based on the average life of a biofuel production facility. The reviewers and the
public commenters provided several arguments for the application of a 30 year time frame. A 30
year time period is appropriate because future emissions are less certain and more difficult to
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value, so the analysis should be confined insofar as possible to the foreseeable future. Another
argument is that a near-term time horizon is consistent with the latest climate science that
indicates that swift and deep reductions of heat-trapping gasses are needed to avoid catastrophic
changes due to a warming climate. One of the reviewers said that while "there is no unassailable
basis for choosing a very specific timeframe" the expected average lifetime of a biofuel
production facility is the "most sensible anchor" for the choice of a timeframe. Alternatively, a
number of commenters argued that a 100 year time frame is the appropriate time period for GHG
lifecycle emissions analysis principally since this is the time period over which climate change
impacts are likely to occur.
Based upon the comments received from the peer review and public between after the
RFS2 proposal, EPA has decided to use a 30 year frame for assessing the lifecycle GHG
emissions. There are several reasons why the 30 year time frame was chosen. The use of the life
of a typical biofuel plant seems reasonable as a basis for the timeframe for assessing the GHG
emissions impacts of a renewable fuel. Also, the 30 year time frame focuses on GHG emissions
impacts that are more near term and, hence, more certain.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2625
Organization: Citizen (sample comment letter representing 400 comment letters received
from mass comment campaign sponsored by an anonymous organization)
Comment:
Finally, the commenter (2625) notes that, "In Section VI.C.D of the preamble, it is stated that the
impact of any land-use change tends to be magnified with soybean biodiesel. The statement is
justified by asserting that soybeans have a low gallon-per-acre yield compared to corn ethanol.
This statement is simply false. For this to be true, soybean oil used for biodiesel must require
additional soybeans to be grown somewhere else in the world to replace the oil used for
biodiesel. Everywhere in the world, soybeans are grown primarily for the demand created by the
protein meal, which comprises 80 percent of the bean. By-products do not drive supply
responses and soybean oil for biodiesel does not drive planting decisions for farmers. If it did,
then farmers would plant crops, other than soybeans, that produce more oil per acre. This
economic reality invalidates EPA's link between use of soybean oil for biodiesel and magnified
land use change impact. We strongly urge EPA to correct this statement in its final rule." (2625
p.3)
Our Response:
As stated in other responses, we believe the quoted statement is being misinterpreted.
This statement was a qualitative explanation for why land use changes projected by the
agricultural sector models in the NPRM analysis may have been larger than the corn ethanol land
use changes on a per BTU basis. We were not implying that soybeans were being planted
exclusively for soybean oil. The agricultural sector models take into account the fact that
soybeans are approximately 80% meal and 20% oil. Furthermore, the agricultural sector models
assume that farmers choose to plant soybeans based on the expected net returns associated with
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the sum of both the oil and the meal ree streams. We believe this optimization approach
accurately represents the soybean production markets.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2516.1
Organization: Imperium
Comment:
Lipid sources such as camelinia, winter canola, algae and other sustainable oilseed crops are not
factored in
Document No.: EPA-HQ-OAR-2005-0161-2435
Organization: R.W. Heiden Associates LLC
Comment:
The commenter (2435) states that a review of the EPA reference case, which was used to
calculate the increased levels of biofuels needed to meet RFS2, reveals the fact that the agency
has penalized the biodiesel industry when calculating potential global land use change by
establishing an artificially low production baseline. EPA utilizes a 2007 Energy Information
Administration (EIA) analysis that underestimates U.S. biodiesel production, which reached
levels of 690 million gallons in 2008. In addition, multiple state policies and fleet requirements
will be implemented between 2008 and 2022. These use requirements will increase the baseline
volume of biodiesel that will be used regardless of the RFS2 program. Underestimating
biodiesel volumes results in an overestimate of indirect land use changes, penalizing the
biodiesel industry. In looking at an incremental change, EPA's approach also does not
accurately reflect increasing crop yields, which have allowed the agricultural industry to keep up
with demand. The EPA analysis also penalizes the biodiesel industry by not fully considering
new fats and oils technology that can increase the contribution biodiesel will make to the
Biomass-based Diesel category in RFS2. The proposed rule only considers soybean oil,
vegetable oil from ethanol plants, and rendered fats and waste greases in its analysis. Lipid
sources such as camelina, winter canola, and algae are not factored into the feedstock supply. In
addition, higher yielding oilseed technology has not been fully incorporated. Implementation of
a workable RFS2 Program will continue to support investment in new technology. Regardless,
whether or not additional vegetable oil supplies are factored into the EPA reference case or the
EPA control case, the result should be the same. The amount of vegetable oil produced
domestically is greater than assumed in the proposed rule. Thus, the commenter believes that
EPA's approach has severely overestimated potential indirect land use change associated with
vegetable oil based biodiesel. [[Docket number 2435.1, p. 4]]
Our Response:
As was done for the proposal, to quantify the lifecycle GHG emissions associated with
the increase in renewable fuel mandated by EISA, we compared the differences in total GHG
emissions between two future volume scenarios in our economic models. For each individual
biofuel, we analyzed the incremental GHG emission impacts of increasing the volume of that
fuel to the total mix of biofuels needed to meet the EISA requirements. Rather than focus on the
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impacts associated with a specific gallon of fuel and tracking inputs and outputs across different
lifecycle stages, we determined the overall aggregate impacts across sectors of the economy in
response to a given volume change in the amount of biofuel produced.
The two future scenarios considered included a "business as usual" volume of a particular
renewable fuel based on what would likely be in the fuel pool in 2022 without EISA, as
predicted by the Energy Information Agency's Annual Energy Outlook (AEO) for 2007 (which
took into account the economic and policy factors in existence in 2007 before EISA). The second
scenario assumed a higher volume of renewable fuels as mandated by EISA for 2022. In this
rulemaking analysis we only account for other policies that are currently in effect, we do not
model any future potential regulations. However, we do consider in this analysis increasing crop
yields and production efficiencies over time.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) believes that EPA should adjust its estimates of the baseline level for
biodiesel without the RFS. The commenter thinks that the levels are too low leading to an
overestimate of potential land use impacts. The EPA reference case, which was used to calculate
the increased levels of biofuels needed to meet RFS2, underestimates biodiesel production
without the RFS. In addition, the amount of vegetable oil produced domestically is greater than
assumed in the Proposed Rule. In addition, multiple state policies and fleet requirements will be
implemented between 2008 and 2022. The commenter believes that these use requirements will
increase the baseline volume of biodiesel that will be used regardless of the RFS2 program.
Thus, these factors in the baseline have resulted in an overestimate of the potential indirect land
use change associated with vegetable oil based biodiesel. The commenter refers to the Kruse
RFS2 Report [[see docket number 2232.1, Attachment 10]] for additional information related to
EPA's undercount of biodiesel production without RFS2. [[See docket number 2249.2, pp. 99-
101 for detailed discussion of this issue.]]
Our Response:
We disagree with the comment that our baseline level is too low and that as a result we
are overestimating the potential land use impacts. As was done for the proposal, to quantify the
lifecycle GHG emissions associated with the increase in renewable fuel mandated by EISA, we
compared the differences in total GHG emissions between two future volume scenarios in our
economic models. For each individual biofuel, we analyzed the incremental GHG emission
impacts of increasing the volume of that fuel to the total mix of biofuels needed to meet the
EISA requirements. Rather than focus on the impacts associated with a specific gallon of fuel
and tracking inputs and outputs across different lifecycle stages, we determined the overall
aggregate impacts across sectors of the economy in response to a given volume change in the
amount of biofuel produced.
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The two future scenarios considered included a "business as usual" volume of a particular
renewable fuel based on what would likely be in the fuel pool in 2022 without EISA, as
predicted by the Energy Information Agency's Annual Energy Outlook (AEO) for 2007 (which
took into account the economic and policy factors in existence in 2007 before EISA). The second
scenario assumed a higher volume of renewable fuels as mandated by EISA for 2022. In this
rulemaking analysis we only account for other policies that are currently in effect, we do not
model any future potential regulations.
While we recognize that the AEO 2007 renewable fuel volumes may be lower than
currently projected U.S. biodiesel production and fleet requirements, we believe the AEO 2007
projections represent a reasonable baseline against which to measure the impact of an increase in
renewable fuel volumes as a result of the RFS2 because it was the last official EIA projection
that did not take into account the new volumes required by EISA.
For this rulemaking analysis we are only considering the policy for which this analysis
was done, namely EISA. Where other existing requirements would impact our analysis, they
have been accounted for but we do not project future requirements that are not in place.
For the final rule analysis we have incorporated the LCA results for an algae oil pathway
but not for other oilseed pathways. However, we do not extend our results from soybean
modeling to other oilseed pathways. Those would be analyzed separately through future
rulemaking analysis if necessary.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that EPA should update its reference case to better reflect
expected ethanol production. The 12.4 bgy estimate for the 2022 base case is inappropriate, and
EPA should reassess its baseline. Using the Informa forecast, there would be no international
land use changes associated with the RFS2, because the reference case would be higher than the
control case. (2329.1, p.61)
Our Response:
We disagree with this comment, even if ethanol volumes would have reached the
mandated volumes in 2022 there is still an impact with producing these volumes compared to a
case without them. The threshold analysis mandated by EISA requires EPA to determine the
impacts of the different biofuels production which requires us to consider two scenarios with
differing volumes of biofuels. So regardless of what volume might or might not actually be
produced, our threshold analysis would still be based on two different volume scenarios and
production of any amount of biofuels would still have an impact. Furthermore, since our
analysis normalizes the greenhouse gas emissions impacts on a per BTU basis, the effect of using
different volumes in our calculations is minimized.
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We believe that our primary reference case projections are appropriate because they are
consistent with those forecasts previously used by our agency as well as by our federal agencies.
We use the Energy Information Administration (EIA)'s Annual Energy Outlook (AEO 2007) for
estimating renewable fuel volumes because it does not already take into account the enactment of
EISA. Wherever possible we have also assessed many of the impacts of the program relative to
the RFS1 mandated renewable fuel volumes to give another perspective. By using these
reference cases, our assessments provide important information on the wider public policy
considerations related to renewable fuel production and use, climate change, and national energy
security.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2626
Organization: Citizen (sample comment letter representing 2,048 comment letters
received from mass comment campaign sponsored by an anonymous organization)
Comment:
The commenter (2626) urges, "EPA to keep the timeframe for crediting reduced emissions from
biofuels to 30 years or less. A longer timeframe would only complicate this process and delay
the swift action we need now to avoid catastrophic impacts from climate change. A timeframe
of 100 years or more would allow biofuels that are bad for the climate to squeak through the
reduction requirements." (2626 p.l)
Our Response:
In the proposed rule, EPA highlighted two time periods of 30 years and 100 years for
consideration in GHG lifecycle analysis. The Agency discussed the relative advantages of these,
and other, time periods. The expert peer reviewers discussed a number of justifiable time periods
ranging from 13 to 100 years. The reviewers said that longer time frames, such as 100 years,
were only appropriate if the Agency used positive discount rates to value future emissions.
Almost all of the peer reviewers specifically said that a time frame of 20 to 30 years would be
justifiable based on the average life of a biofuel production facility. The reviewers and the
public commenters provided several arguments for the application of a 30 year time frame. A 30
year time period is appropriate because future emissions are less certain and more difficult to
value, so the analysis should be confined insofar as possible to the foreseeable future. Another
argument is that a near-term time horizon is consistent with the latest climate science that
indicates that swift and deep reductions of heat-trapping gasses are needed to avoid catastrophic
changes due to a warming climate. One of the reviewers said that while "there is no unassailable
basis for choosing a very specific timeframe" the expected average lifetime of a biofuel
production facility is the "most sensible anchor" for the choice of a timeframe. Alternatively, a
number of commenters argued that a 100 year time frame is the appropriate time period for GHG
lifecycle emissions analysis principally since this is the time period over which climate change
impacts are likely to occur.
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Based upon the comments received from the peer review and public between after the
RFS2 proposal, EPA has decided to use a 30 year frame for assessing the lifecycle GHG
emissions. There are several reasons why the 30 year time frame was chosen. The use of the life
of a typical biofuel plant seems reasonable as a basis for the timeframe for assessing the GHG
emissions impacts of a renewable fuel. Also, the 30 year time frame focuses on GHG emissions
impacts that are more near term and, hence, more certain.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2634
Organization: Citizen (sample comment letter representing 155 comment letters received
from mass comment campaign sponsored by Prairie Pride Inc.)
Comment:
The commenter (2634) notes that, "Existing biodiesel facilities meeting the RFS2 requirements
with existing feedstock sources should not be unfairly penalized for assumptions related to
international land use changes. We request the EPA use its regulatory authority to exempt
existing biodiesel facilities from land use changes. The U.S. biodiesel industry has been steadily
growing over the past several years with 690 million gallons in production in 2008. Existing
feedstock sources are already available to meet this production level. As such, no land use
changes, and therefore no significant emissions from those changes, should be associated with
existing production. We recommend changing the Lifecycle Greenhouse Gas Methodology for
Biodiesel and consider the following elements of EPA's lifecycle analysis: EPA's assumptions
regarding international land use changes associated with U.S. biodiesel production do not reflect
historical results and should be revised. EPA assumes increased U.S. biodiesel production will
lead to land conversion in South America. Brazilian soybean acreage has decreased 1.5 million
hectares from 2004 through 2008, a time in which U.S. biodiesel production increased from 25
million to 690 million gallons." (2634 p 1-2)
Our Response:
As detailed in the preamble and RIA, EPA has used up to date models, data and other
information to assess the GHG impacts of biofuels. Throughout the development of EPA's
lifecycle analysis, the Agency has employed a collaborative, transparent, and science-based
approach. EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. We believe we have in a technically appropriate manner,
implemented the mandates of EISA
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2634
Organization: Citizen (sample comment letter representing 155 comment letters received
from mass comment campaign sponsored by Prairie Pride Inc.)
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Comment:
Further, the commenter (2634) notes that, "The 2006 Guidelines for National Greenhouse Gas
Inventories by the Intergovernmental Panel on Climate Change (IPCC) concludes that nitrogen
fixed in soil by soybeans should not be considered a GHG emission. EPA should incorporate the
IPCC's nitrogen findings and remove the attribution of excess nitrogen emissions from soybean
cultivation. This change will reduce GHG score for soy biodiesel by more than 20 percent."
(2634 p. 2)
The proposal analysis calculated N20 emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in N20 emissions. The proposal
analysis N20 factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating N20 emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
We received a number of comments on our proposal results indicating that the N20
emissions were overestimated from soybean and other legume production (e.g., nitrogen fixing
hay) in our analysis. The main issue is that because the N20 emission factors used in the
proposal were based on the 1996 IPCC guidance for N20 accounting they were overestimating
N20 emissions from nitrogen fixing crops. As an update in 2006, IPCC guidance was changed
such that biological nitrogen fixation was removed as a direct source of N20 because of the lack
of evidence of significant emissions arising from the fixation process itself. IPCC concluded that
the N20 emissions induced by the growth of legume crops/forages may be estimated solely as a
function of the above-ground and below-ground nitrogen inputs from crop/forage residue. This
change effectively reduces the N20 emissions from nitrogen fixing crops like soybeans and
nitrogen fixing hay from the 1996 to 2006 IPCC guidance.
Therefore, as part of the update to new N20 emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the N20
emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2634
Organization: Citizen (sample comment letter representing 155 comment letters received
from mass comment campaign sponsored by Prairie Pride Inc.)
Comment:
Further, the commenter (2634) notes that, "Co-product allocations for glycerin need to be
incorporated in GHG calculations." (2634 p.2)
Our Response:
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Glycerin is a co-product of biodiesel production. Our proposal analysis did not assume
any credit for this glycerin product. The assumption for the proposal was that by 2022 the
market for glycerin would be saturated due to the large increase in biodiesel production in both
the U.S. and abroad and the glycerin would therefore be a waste product. We received a number
of comments that we should be factoring in a co-product credit for glycerin as there would be
some valuable use for this product in the market. Based on these comments we have included
for the final rule analysis that glycerin would displace residual oil as a fuel source on an energy
equivalent basis. This is based on the assumption that the glycerin market would still be
saturated in 2022 and that glycerin produced from biodiesel would not displace any additional
petroleum glycerin production. However, the biodiesel glycerin would not be a waste and a low
value use would be to use the glycerin as a fuel source. The fuel source assumed to be replaced
by the glycerin is residual oil. This inclusion of a co-product credit for glycerin reduces the
overall GHG impact of biodiesel compared to the proposal analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0933
Organization: Citizen
Comment:
The commenter (0933) believes that use of ethanol is a good way to lessen imports of petroleum
products while keeping dollars in the USA and reduce the cost of farm program expenses. The
commenter strongly opposes the land use change calculations presented by Mr. Searchinger. (P.
1)
Our Response:
The lifecycle methodology developed by EPA, and explained in detail in this final rule, is
based on the best available scientific techniques. It does not rely on one study in the literature,
but instead relies on the body of scientific literature on this topic as well as an independent
scientific peer review of EPA's methodology. The peer review, the public comments we have
received, and the analysis conducted for the proposal and final rule indicate that it is important to
take into account indirect emissions. Through this evaluation, EPA also has determined that
biofuels production leads to both negative and positive indirect land use changes. We also
recognize the uncertainties inherent in this estimation and therefore have taken an approach that
quantifies the uncertainty and presents the weight of currently available evidence in making our
threshold determination.
7.2.5.3 Feedstock Transport
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2625
Organization: Citizen (sample comment letter representing 400 comment letters received
from mass comment campaign sponsored by an anonymous organization)
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Comment:
The commenter (2624) notes that, "After concluding biodiesel from virgin vegetable oils does
not qualify for the program, the agency attempts to restore it, in part, by creating a pathway for
compliance purposes whereby virgin vegetable oils can be combined with waste oils in a 52-48
percent ratio. This is unworkable from a practical perspective. Instead, EPA should recognize
that U.S. feedstock supplies naturally produce a feedstock mix that, even when using EPA's low
GHG values, meets the thresholds for Advanced Biofuels. Moreover, to the extent necessary,
EPA should use its authority and adjust the 50 percent reduction requirement downward to 40
percent to ensure U.S. biodiesel can meet the biomass-based diesel requirements, as intended by
Congress." (2625 p.3)
Our Response:
For the final rule we are not allowing averaging of soy-based biodesel and biodiesel
produced from waste products since this is not necessary for threshold compliance of soy-based
biodiesel
7.2.5.4 Processing
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2360
Organization: Archer Daniels Midland Company (ADM)
Comment:
The commenter (2360.1) noted that the EPA methodology inaccurately assesses the glycerin co-
product of biodiesel production from vegetable oil. While the approach used by the EPA with the
FASOM and FAPRI models should deal with the agricultural co-products as part of the new
equilibrium, the models are not capable of automatically compensating for non-agricultural co-
products, and these would have to be dealt with outside the models. (2360.1, p.3)
Our Response:
Glycerin is a co-product of biodiesel production. Our proposal analysis did not assume
any credit for this glycerin product. The assumption for the proposal was that by 2022 the
market for glycerin would be saturated due to the large increase in biodiesel production in both
the U.S. and abroad and the glycerin would therefore be a waste product. We received a number
of comments that we should be factoring in a co-product credit for glycerin as there would be
some valuable use for this product in the market. Based on these comments we have included
for the final rule analysis that glycerin would displace residual oil as a fuel source on an energy
equivalent basis. This is based on the assumption that the glycerin market would still be
saturated in 2022 and that glycerin produced from biodiesel would not displace any additional
petroleum glycerin production. However, the biodiesel glycerin would not be a waste and a low
value use would be to use the glycerin as a fuel source. The fuel source assumed to be replaced
by the glycerin is residual oil. This inclusion of a co-product credit for glycerin reduces the
overall GHG impact of biodiesel compared to the proposal analysis.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2360
Organization: Archer Daniels Midland Company (ADM)
Comment:
The commenter also believes that the EPA methodology inaccurately assesses the energy balance
of biodiesel production. The input data used by EPA for the amount of energy used to create a
gallon of biodiesel is overstated. EPA used a factor of 3.2 units of energy produced per unit of
energy used. The updated factor should be 5.2 units of energy produced per unit of energy used.
Updating this data point would decrease the biodiesel emissions factor by 1.5%. (2360.1, p.3)
Our Response:
We have updated our analysis to include the latest information available on process
energy requirements.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2486
Organization: Primafuel, Inc.
Comment:
The commenter (2486) believes that co-product allocation should be based on displacement
methodology. Displacement methodology provides the greatest incentive to improve
environmental performance per dollar invested. This will catalyze the uptake of new process
technologies to produce new products from waste streams including renewable chemicals and
other higher value materials. [[Docket number 2486.1, p. 1]] [[See docket number 2486.1, pp. 1-
2 for further discussion of this issue.]]
Our Response:
EPA agrees that displacement methodology should be used to assign credits to co-
products. In EPA's analysis, this methodology is used to assign the proper credits to particular
renewable fuels based on their related co-products, such as distillers grains and soybean meal.
Additional information on co-product credits and how they are attributed to renewable fuels can
be found in the RIA.
7.2.6 Petroleum Baseline
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2516.1
Organization: Imperium
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Comment:
EPA's analysis does not account for the fact that biodiesel is reducing and delaying the need for
diesel derived from high carbon sources of crude oil such as Canadian tar sands and Venezuelan
extra heavy crude.
Document No.: EPA-HQ-OAR-2005-0161-1989
Organization: Iowa Farm Bureau Federation
Comment:
Two of the more apparent omissions in the study are GHG emissions as a result of required
military presence in foreign countries to assure an undisturbed supply chain and changes in the
proportion of fuel produced from more intensive GHG pathways such as fuel extracted from tar
sands. Some studies have estimated conservatively that military emissions resulting from
security requirements could easily double the amount of total life-cycle GHG emissions related
to petroleum (Liska, 2009).
In addition, as fuel continues to be more demanded, the argument can be made (Liska, et al) that
gasoline pathways other than crude petroleum will become a larger part of the fuel mix. In order
to accurately compare potential GHG savings from ethanol use, the baseline needs to include the
future mix of all pathways given pre-2005 trends. Including both of these factors in the analysis
will provide a much more accurate estimate of the GHG emissions from the fuel that ethanol will
be replacing.
Document No.: EPA-HQ-OAR-2005-0161-2152.1
Organization: Minnesota Coalition for Ethanol
Comment:
The commenter (2152) believes the 2005 gasoline baseline included in EISA should reflect the
sources of crude oil that would have been used in the absence of the RFS - the carbon impact of
the fossil fuel sources that ethanol and other biofuels will replace in the future. Biofuels are not
replacing the "easy" sources of liquid fuels, such as light, sweet crude from West Texas.
Biofuels are displacing the energy-intensive, environmentally-destructive sources such as fuel
derived from tar sands, oil shale, and deep water drilling. It is equally critical to estimate the
amount of carbon emissions that will be offset by the expanded use of ethanol and reduced
reliance on traditional fossil fuels. (2152.1 Pg. 1).
Our Response:
The reason the system boundaries used for threshold gasoline assessment in the proposed
rule and the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and opportunity for
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comment, for gasoline or diesel (whichever is being replaced by the renewable fuel) sold or
distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that the 2005 baseline does not adequately address the
increasing use of marginal sources of petroleum. The commenter believes that EPA cannot
wholly ignore the fact that ethanol is reducing and delaying the need to resort to more and more
high carbon sources of crude oil such as Canadian tar sands and Venezuelan extra heavy crude.
(2329.1, p.55) [[See Docket Number 2329.1, pp.55-57 for a detailed discussion of this issue]]
Document No.: EPA-HQ-OAR-2005-0161-0981
Organization: Nebraska Center for Energy Sciences Research, Department of Agronomy
and Horticulture, University of Nebraska-Lincoln
Comment:
The commenter (0981) states that as unconventional petroleum sources (tar sands, coal-to-
liquids, and oil shale) become more dominant in the future, the GHG-intensity of gasoline will
increase, and the life cycle emissions estimates need to account for these changes. The
commenter also provides estimates of the average additional GHG emission attributable to
gasoline to account for military security in the Middle East. The commenter recommends that
the gasoline baseline be updated either annually or biannually to accurately represent changes in
the petroleum supply. If indirect effects are included for other fuels, then the marginal indirect
GHG emissions associated with military security for oil need to be included in the life cycle
emission of petroleum. (Pp. 9-12)
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Document No.: EPA-HQ-OAR-2005-0161-1001, EPA-HQ-OAR-2005-0161-1005, EPA-
HQ-OAR-2005-0161-1010, EPA-HQ-OAR-2005-0161-1011, EPA-HQ-OAR-2005-0161-1012,
EPA-HQ-OAR-2005-0161-1025, EPA-HQ-OAR-2005-0161-1029, EPA-HQ-OAR-2005-0161-
1043, etal.
Organization: Kurzman Clean Tech Research & Kurzman Capital, LLC, Cotner
Consulting Services, CC Gas Systems, LLC, Atlantic BioFuels, Glenwood Farms, Law Offices
of David Wilcox, C.I.B., University of Georgia Engineering Outreach Service, et al.
Comment:
The commenters noted that EPA's analysis does not account for the fact that biodiesel is
reducing and delaying the need for diesel derived from high carbon sources of crude oil such as
Canadian tar sands. EPA's analysis also compares estimated future direct and indirect GHG
emissions for biodiesel to direct (only) emissions for petroleum. This dramatically reduces
biodiesel's GHG benefits compared to petroleum and is an obvious violation of a basic scientific
principle, that comparative analysis contains the same comparative criteria.
Document No.: EPA-HQ-OAR-2005-0161-1050
Organization: American Council for Ethanol (ACE)
Comment:
The commenter (2101.1) recommends that EPA annually update the petroleum baseline to more
accurately capture the carbon intensities of future sources of oil and gasoline. (2101.1, p. 16)
Document No.: EPA-HQ-OAR-2005-0161-1669
Organization: Environmental Intelligence, Inc.
Comment:
The commenter (1669.1) noted that EPA's analysis compares estimated, future direct and
indirect GHG emissions for biodiesel to only direct emissions for petroleum. (1669.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2079
Organization: AE Biofuels, Inc.
Comment:
The commenter (2079.1) believes that EPA's analysis does not account for the fact that biodiesel
is reducing and delaying the need for diesel derived from high carbon sources of crude oil such
as Canadian tar sands and Venezuelan extra heavy crude. EPA's analysis compares estimated,
future direct and indirect GHG emissions for biodiesel to direct (only) emissions for petroleum.
This dramatically reduces biodiesel's GHG benefits compared to petroleum and is an obvious
violation of a basic scientific principle, that comparative analysis contains the same comparative
criteria. (2079.1,p.7)
Document No.: EPA-HQ-OAR-2005-0161-2136
Organization: Iowa Renewable Fuels Association (IRFS)
Comment:
The commenter (2136) notes that there is consensus that as we move from 2010 to 2022, the
carbon footprint of the average gasoline or diesel fuel will be much higher than in 2005. The
marginal barrel of oil will come from nontraditional sources, such as the Canadian tar sands,
Venezuelan heavy crude, or super-deep drilling ocean rigs. The carbon footprint of these fossil
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fuels is significantly higher than light, sweet crude oil from Saudi Arabia. The DOE's senior
analyst Zia Haq agrees that the marginal barrel of oil will come from these nontraditional
sources. As biofuels use increases, it will replace fuels from these nontraditional sources, not
Saudi Arabian oil. Ignoring the indirect emissions due to land use changes results in a GHG
analysis that bears little relationship to the real-world emission impact of fossil fuels. The
commenter urges the Agency to recognize the most likely fossil fuels that increased biofuels
usage will displace and credit biofuels with the avoided emissions compared to the 2005 baseline
fossil fuels. [[Docket number 2136.1, p. 8]]
Document No.: EPA-HQ-OAR-2005-0161-2140
Organization: John Deere Agriculture & Turf Division
Comment:
The commenter (2140.1) believes that EISA created an inappropriate framework for estimating
greenhouse gas emission from various fuels, comparing total future direct and indirect lifecycle
emissions from renewable fuels to a 2005 petroleum baseline that only includes direct emissions
impacts. Although calculating indirect emissions from petroleum is certainly complicated, the
commenter believes that it is important that any assessment of the environmental benefits of
renewable fuels be made using adequate and comparable assessments of conventional fuels. It is
also critical to acknowledge that the 2005 petroleum baseline does not likely reflect the
petroleum fuel mix of the future. (2140.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2148
Organization: Hornbeck Agricultural
Comment:
The commenter (2148) noted that it is not clear that the indirect emissions of petroleum diesel
(the baseline against which biodiesel is being measured) are adequately factored into that
baseline. The commenter believes that it must be recognized that EPA's use of an inaccurate
baseline would distort and diminish the credit EPA gives to soy biodiesel for its ability to reduce
greenhouse gas emissions. Biodiesel has been shown to reduce certain greenhouse gas emissions
by 78%, but EPA proposes to credit soy biodiesel with a substantially lower GHG reduction.
(2148, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2190
Organization: Illinois River Energy, LLC.
Comment:
The commenter [[2190]] states that in contrast to the complicated model based treatment of
biofuels, fossil fuel alternatives are treated overly simplistically and their very real indirect
effects are not even seriously considered. There is very real evidence that the carbon intensity of
fossil fuels is increasing and that biofuels are compared against an unreal, lower carbon intensity
benchmark. [[#2190 p.l]]
Document No.: EPA-HQ-OAR-2005-0161-2302
Organization: UC Berkeley - Energy Biosciences Institute
Comment:
The commenter [[2302]] states that a baseline of 2005 fossil fuel is not appropriate as a long-
term baseline, in part because current fossil fuels are explicitly assumed to have the same value
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and it does not reflect changes in production. We disagree with the assessment presented in the
DRIA (pg. 285) that the annual baseline emissions for gasoline and diesel do not change
substantially over time; while that may have been acceptable in the past, current extraction
practices as illustrated by tar sands and oil shale, along with the growing processing of heavier,
more sour crude, require a more up-to-date evaluation of the fossil fuel baseline. [[#2302 p.4]]
Document No.: EPA-HQ-OAR-2005-0161-2316
Organization: University of Minnesota
Comment:
The commenter [[2316]] states: my fifth comment concerns the GHG impacts of petroleum-
based fuels. Even though it is not strictly written into EISA, I encourage you to include indirect
GHG emissions from gasoline and diesel in your baseline calculations, while also considering
that the marginal increase in crude production should include advanced extraction technology
and discovery of new fields. Indirect GHG emissions for petroleum may include land-use change
and emissions due to international security. If the latter is considered it would also be appropriate
first to allocate emissions in foreign conflicts over all applicable causes for international
involvement beyond stabilization of foreign petroleum supplies, and second to consider allocated
emissions due to homeland security when calculating emissions for domestic biofuel production.
[[2316.1 p.2]]
Document No.: EPA-HQ-OAR-2005-0161-2350
Organization: BioEnergy Producers Association
Comment:
The commenter (2350) believes that common sense tells us that biofuels are not the only energy
source that has indirect land use impacts. If EPA finds it difficult to identify an indirect land use
change resulting from petroleum, the commenter suggests a look at the bayous of Louisiana that
have been fouled by pollution from oil refining, the devastation being created in Canada by tar
sands oil recovery, or the Exxon Valdez disaster. The commenter questions how EPA can
conclude that no indirect land use impact results from the use of petroleum. The commenter also
contends that if the EPA believes it is so easy to project the impact of a corn grower in Iowa on
the many economic and social motivations of those who are removing forests in Brazil, it should
be equally as easy to project the worldwide indirect land use change resulting from the
worldwide recovery and transport of petroleum. [[Docket number 2350, pp. 2-3]]
Document No.: EPA-HQ-OAR-2005-0161-2357
Organization: Iowa Biodiesel Board
Comment:
The commenter [[2357]] states that EPA's analysis does not account for the fact that biodiesel is
reducing and delaying the need for diesel derived from high carbon sources of crude oil such as
Canadian tar sands and Venezuelan extra heavy crude. In addition, EPA's analysis compares
estimated, future direct and indirect GHG emissions for biodiesel to only direct emissions for
petroleum. [[2357.1 p.5]]
Document No.: EPA-HQ-OAR-2005-0161-2367
Organization: New Fuels Alliance (NFA)
Comment:
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The commenter (2367) is concerned about EPA's assessment of petroleum and states that recent
work suggests that there are significant omissions from the petroleum fuel carbon score. The
commenter contends that oil has a direct land use effect and believes that EPA must assess
petroleum-based fuels for indirect effects and points out that crude oil is a finite resource. The
commenter also questions why EPA decided not to include military emissions as part of the
petroleum carbon score. [[Docket number 2367.1, pp. 18-27]] [[See docket number 2367.1, pp.
18-27 for a detailed discussion of these issues.]]
The commenter also believes that EPA should assess the RFS2 policy for indirect effects, as
opposed to individual fuel gallons; to put it another way, a gallon of biofuel would be compared
to a gallon of petroleum based on their cumulative direct supply chain emissions, including
upstream emissions such as direct biofuel land use and oil extraction. [[See docket number
2367.1, pp. 29-30 for further discussion of this issue.]]
In conclusion, the commenter adds that EPA has the responsibility, and challenge, of
determining the GHG impacts of compliance fuels, as they relate to a petroleum baseline, for the
RFS2 program. The only way the agency can objectively accomplish that legislative mandate is
to measure the GHG profile of a particular gallon of biofuel with the GHG profile of a particular
gallon of petroleum using the same metric in both scenarios. To do otherwise would be in direct
conflict with the intent of EISA07 to assess the "relative global warming potential" of renewable
and petroleum-based fuels and would leave the regulation vulnerable to criticism and potential
legal challenge. If EPA is unable to precisely determine the range of direct and indirect
emissions of both a gallon of biofuel and a gallon of petroleum, it must then identify a way in
which the legislative intent of EISA07 can be followed so that significant GHG reductions are
realized in the nation's fuel stream. To achieve that requirement, the commenter strongly
encourages EPA to implement a marginal displacement approach to carbon accounting. This
would address the major problem of asymmetrical carbon accounting encompassed in EPA's
proposed regulation. [[Docket number 2367.1, p. 31]]
Document No.: EPA-HQ-OAR-2005-0161-2435
Organization: R.W. Heiden Associates LLC
Comment:
The commenter (2435) believes EPA's analysis does not account for the fact that biodiesel is
reducing and delaying the need for diesel derived from high carbon sources of crude oil such as
Canadian tar sands and Venezuelan extra heavy crude. In addition, EPA's analysis compares
estimated, future direct and indirect GHG emissions for biodiesel to direct (only) emissions for
petroleum. This dramatically reduces biodiesel's GHG benefits compared to petroleum and is an
obvious violation of a basic scientific principle, that comparative analysis contains the same
comparative criteria. GHG analyses should be "apples-to-apples" comparisons. It was surely the
intent of Congress to compare alternative fuels on an equal basis with the fossil-fuels they
replace. Such comparison is a basic requirement of lifecycle analysis as applied by competent
science and is a specific requirement of the International Standards Organization (ISO) 14040
standard for lifecycle analysis. [[Docket number 2435.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2478
Organization: ZeaChem Inc.
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Comment:
The commenter (2478) believes that the 2005 petroleum baseline is not an accurate or proper
baseline for which to calculate emissions going forward. Domestically produced ethanol is
reducing and delaying the need for gasoline from marginal, high carbon sources of crude oil such
as tar sands and extra heavy crude. These marginal sources of petroleum resources have
significant indirect impacts that are not included in current calculations or comparisons. [[Docket
number 2478.1, p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2487
Organization: Abengoa Bioenergy Corporation
Comment:
The commenter (2487) believes that since biofuels reduce the need for additional gallons of
petroleum, the lifecycle impact of biofuels should be compared to the lifecycle impact of the
incremental additional gallons of petroleum that would be used if biofuels were not available.
[[Docket number 2487, p. 1]]
Document No.: EPA-HQ-OAR-2005-0161-2549
Organization: Triton Energy LLC
Comment:
The commenter (2549.1) noted that EPA's analysis compares estimated, future direct and
indirect GHG emissions for renewable diesel to only direct emissions for petroleum. (2549.1,
P-3)
Document No.: EPA-HQ-OAR-2005-0161-2612
Organization: Citizen (sample comment letter representing 478 comment letters received
from mass comment campaign sponsored by American Soybean Association)
Comment:
The commenter (2612) identified 8 "vital flaws and concerns with the RFS2 proposed rule,"
including: "8) Petroleum Baseline - EPA's analysis compares estimated, future direct and
indirect GHG emissions for biodiesel to only direct emissions for petroleum." (2612 p. 2)
Document No.: EPA-HQ-OAR-2005-0161-2617
Organization: Citizen (sample comment letter representing 72 comment letters received
from mass comment campaign sponsored by an anonymous organization)
Comment:
The commenter (2617) notes that, "EPA's analysis... ignores the direct land use impacts of future
oil exploration and production, and doesn't include any indirect emissions analysis for petroleum
- a finite resource, creating an unfair comparison that disadvantages renewable fuel." (2617 p. 1)
Document No.: EPA-HQ-OAR-2005-0161-2625
Organization: Citizen (sample comment letter representing 400 comment letters received
from mass comment campaign sponsored by an anonymous organization)
Comment:
The commenter (2625) notes that, "EPA's analysis does not account for the fact that biodiesel is
reducing and delaying the need for diesel derived from high carbon sources of crude oil such as
Canadian tar sands. In addition, the agency's analysis compares estimated future direct and
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indirect GHG emissions for biodiesel to direct (only) emissions for petroleum. This dramatically
reduces biodiesel's GHG benefits compared to petroleum and is an obvious violation of a basic
scientific principle, that comparative analysis contains the same comparative criteria." (2625 p.
2)
Document No.: EPA-HQ-OAR-2005-0161-2634
Organization: Citizen (sample comment letter representing 155 comment letters received
from mass comment campaign sponsored by Prairie Pride Inc.)
Comment:
The commenter (2634) notes that, "The EPA's analysis compares estimated future direct and
indirect GHG emissions for biodiesel to only direct emissions for petroleum. This dramatically
reduces biodiesel's GHG benefits compared to petroleum and should be revised so the
comparative analysis contains the same comparative criteria. EPA's approach should account
for increasing soybean yields and improving farm efficiencies. Soybean hybrids and farming
techniques have continuously improved over the past fifty years and this trend is expected to
continue." (2634 p. 2)
Document No.: EPA-HQ-OAR-2005-0161-2002
Organization: Novozymes North America, Inc. (Novozymes)
Comment:
The commenter (2002) is concerned about marginal biofuels production in 2022 vs. average
petroleum production in 2005. The commenter points out that whereas the EPA has done
extensive work on identifying the indirect effects of biofuels (most notably indirect land use
change) and has also expanded the system boundaries to take into account the use of biofuels
byproducts such as distiller's grains, the agency has done little to account for the actual
consequences of displacing fossil fuels. The commenter recommends that EPA performs an
analysis to determine the type and status of marginal fossil fuels from now until 2022.
Conceptually, this analysis will be no different from considering the market-mediated indirect
effects of biofuels. On the contrary, identifying marginal fossil fuels is in complete alignment
with the ILUC calculations. Furthermore, the commenter recommends that the EPA recalculates
the "payback times" of biofuels (see e.g., DRIA page 286) to reflect the fossil fuel emissions
actually avoided by use of biofuels. It is clear that the current approach overestimates the
"payback times" due to the false comparison of marginal biofuels production in 2022 with
average fossil fuel production in 2005. [[Docket number 2002.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-0897
Organization: Citizen
Comment:
One commenter (0897) appreciates EPA support for the creation and extension of the renewable
ethanol standards. This commenter states that EPA's calculation on the land use CO2 should
favor ethanol production. The commenter believes that oil creates a large COz footprint through
processes that EPA did not take into account, such as the fuel used by the U.S. military to
safeguard the transport of foreign fuel from the Middle East to the U.S. (P. 1)
Our Response:
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The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
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would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
As stated in the proposal and restated in the preamble to the final rule, EPA has not
included in its assessment of GHG impacts of petroleum the potential impacts due to military
operations to protect sources of petroleum. While these potential military impacts have been
estimated by some researchers, there is clearly no consensus on how much if any of the GHG
emissions from military operations should be attributed to an assessment of petroleum's GHG
lifecycle impact. Do the the widely speculative nature of such an assessment, EPA chose to
leave it out of our GHG assessment. This omission has been clearly noted in the pramble to this
final rule.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
We also do not believe that emissions arising from military activities can be readily
attributed to the protection of oil imports. Military activities, even in world regions that
represent vital sources of oil imports, undoubtedly serve a broader range of security and foreign
policy objectives than merely protecting oil supplies. In the peer review of the energy security
analysis that EPA commissioned, a majority of peer reviewers believed that U.S. military costs
should be excluded absent a widely agreed methodology for estimating this component of U.S.
energy security. Since military impacts were not considered for the energy security analysis in
this final rule, they were also excluded from any lifecycle GHG analyses
Furthermore, increased domestic consumption of renewable fuels is expected to decrease
oil demand and thus reduce oil imports. However, an incremental reduction in oil imports is not
expected to cause an analogous reduction in U.S. military expenditures and activities. Hence,
even if we were able to attribute GHG emissions to the protection of oil imports, it is unlikely
that there would be a decrease in military-related GHG emissions as a result of this rule. More
detail on this topic can be found in the Energy Security Analysis in Chapter 5 of the RIA.
For the final rule, we performed an estimate of land use change emissions associated with
oil extraction and production to determine if the value was significant enough to be included in
our petroleum baseline calculation. As oil sands production incurs a greater degree of land use
change versus conventional crude oil production, we made an estimate of the emissions from the
conversion of Alberta forest for oil sands production. Using literature values, we found that land
use change emissions for oil sands were negligible compared to the total well-to-tank values and
did not change the overall petroleum baseline values. A more complete discussion of our
analysis can be found in Chapter 2.5.7 of the RIA.
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For the final rule, we are using the model developed by the National Energy Technology
Laboratory (NETL) to determine the 2005 petroleum baseline. The NETL model provides a
more accurate and comprehensive assessment of the petroleum baseline than the approach used
in the proposed rule by utilizing site-specific data, such as country-specific crude oil extraction
profiles and port-to-port travel distances for imported crude oil and petroleum products. The
NETL model utilizes recent data to determine the GHG emissions from crude oil extraction and
transport, refining, and finished product transport. Furthermore, NETL uses 2005 data for major
oil sands producers to determine the emissions from oil sands extraction. More detail on the
methodologies used by NETL can be found in Chapter 2.5 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2514
Organization: Western Organization of Resource Councils (WORC)
Comment:
The commenter [[2514]] states that in regards to using the standard GREET model:
1. With Canadian tar sands pipelines crossing WORC members in several states, WORC is
acutely aware of the high carbon costs and net energy losses involved with tar sands.
There is a significant carbon footprint and land use impact from stripping the boreal
northern forests of Canada to surface mine crude bitumen. In addition, enormous
quantities of energy are necessary to refine, heat, and pump the product in massive
pipelines to southern U.S. refineries and markets. The pipelines stretching across
thousands of miles of farm and ranch lands should be considered as well.
2. Similarly, WORC members also reside in Northwest Colorado where oil shale
developments would require huge amounts of energy, despoil enormous tracts of land,
and consume vast quantities of water in an arid environment. The energy requirements
for removing and processing the oil shale will be enormous as well.
3. WORC members also live and work over coal seams that could be strip mined and
refined into liquid fuels, again at enormous costs in land, water and net energy inputs.
Much discussion of coal liquefaction presumes a viable technique for carbon capture and
sequestration, an emerging and untested technology; but one which assuredly will require
significant energy to bring into effect, and which has implications for land use and
impacts off-site, including pipelines and drilling, jeopardizing precious groundwater
sources.
4. More conventional oil and gas developments are also incurring significant wide scale
land use impacts across the Western U.S., including the salinization of the Tongue and
Powder River basins from coal bed methane developments and the impacts of increasing
use of hydraulic fracturing to extract natural gas on surface and groundwater across
Wyoming, North Dakota, Colorado, New Mexico, and Montana. [[#2514.1 p.2]]
Our Response:
For the final rule, we performed an estimate of land use change emissions associated with
oil extraction and production to determine if the value was significant enough to be included in
our petroleum baseline calculation. As oil sands production incurs a greater degree of land use
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change versus conventional crude oil production, we made an estimate of the emissions from the
conversion of Alberta forest for oil sands production. Using literature values, we found that land
use change emissions for oil sands were negligible compared to the total well-to-tank values and
did not change the overall petroleum baseline values. A more complete discussion of our
analysis can be found in Chapter 2.5.7 of the RIA.
We did not consider land use emissions associated with road or other infrastructure
construction for petroleum extraction, transport, refining, or upgrading, as the land use change
associated with roads constructed for crop and livestock production was also not included.
Furthermore, land use associated with natural gas extracted for use in oil sands extraction or
upgrading was not considered, as the land use change from natural gas extracted for renewable
fuels production was also not considered.
The petroleum production component of the system boundaries was specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel. In 2005, there were a negligible amount of liquid fuels
synthesized from oil shale or coal liquefaction.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2491
Organization: International Council on Clean Transportation (ICCT)
Comment:
With respect to petroleum fuels, the commenter (2491) states that EPA has used default values of
GREET, but does not describe which allocation method (value-based approach or system
expansion approach—also called displacement method) was used in deriving the default values.
The commenter believes that it would be helpful to specify the allocation method used to avoid
the misunderstanding and possibility of manipulation by fuel providers. [[Docket number 2491.1,
pp. 1-2]]
Our Response:
For the final rule, we are using the model developed by the National Energy Technology
Laboratory (NETL) to determine the 2005 petroleum baseline. The NETL model provides a
more accurate and comprehensive assessment of the petroleum baseline than the approach used
in the proposed rule by utilizing site-specific data, such as country-specific crude oil extraction
profiles and port-to-port travel distances for imported crude oil and petroleum products. The
NETL model utilizes recent data to determine the GHG emissions from crude oil extraction and
transport, refining, and finished product transport. Furthermore, NETL uses 2005 data for major
oil sands producers to determine the emissions from oil sands extraction. More detail on the
methodologies used by NETL can be found in Chapter 2.5 of the RIA.
NETL employed a tiered allocation approach to partition the GHG emissions associated
with refinery products. The allocation procedure was based on the ISO 14044 (Section 4.3.4.2
Allocation procedure, (b) Step 2) standard for allocating emissions from co-product operations
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by first sub-dividing to the smallest unit process and then proportioning the emissions profile
based on the dependent physical properties of the sub-unit (volumetric throughput of the sub-
unit) when allocation cannot be avoided. The allocation procedure applied by NETL is outlined
in Section 4.0 of their report, "Development of Baseline Data and Analysis of Life Cycle
Greenhouse Gas Emissions of Petroleum-Based Fuels," available in the RFS2 docket at EPA-
HQ-OAR-2005-0161.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2048
Organization: BioPure Fuels
Comment:
With regards to allocation of refining emissions to different petroleum co-products, the
commenter (2048.1) requests that U.S. EPA apply an economic allocation approach. They
reference the allocation methods discussed by the ISO or ASTM Committee in Sweden that was
responsible for making decisions about life-cycle GHG emissions for petroleum in the EU cap-
and-trade system. (2048.1, p.4) (See Docket Number 2048.1, pp.4-5 for a detailed discussion of
this issue)
Our Response:
EPA disagrees with the commenter. The economic approach for allocation is more
relevant to the EU Emissions Trading System, due to the importance of allocating emissions to
specific industrial sectors. However, this is not relevant for our LCA for biofuels. ISO gives
specific guidance on hierarchy of allocation methods for LCA, starting with: 1) avoid allocation
- what we do for biofuels; 2) partition based on the underlying physical relationships-what we do
for refining; and 3) economic value-which is not used in our analysis.
For the final rule, we are using the model developed by the National Energy Technology
Laboratory (NETL) to determine the 2005 petroleum baseline. The NETL model provides a
more accurate and comprehensive assessment of the petroleum baseline than the approach used
in the proposed rule by utilizing site-specific data, such as country-specific crude oil extraction
profiles and port-to-port travel distances for imported crude oil and petroleum products. The
NETL model utilizes recent data to determine the GHG emissions from crude oil extraction and
transport, refining, and finished product transport. Furthermore, NETL uses 2005 data for major
oil sands producers to determine the emissions from oil sands extraction. More detail on the
methodologies used by NETL can be found in Chapter 2.5 of the RIA.
NETL employed a tiered allocation approach to partition the GHG emissions associated
with refinery products. The allocation procedure was based on the ISO 14044 (Section 4.3.4.2
Allocation procedure, (b) Step 2) standard for allocating emissions from co-product operations
by first sub-dividing to the smallest unit process and then proportioning the emissions profile
based on the dependent physical properties of the sub-unit (volumetric throughput of the sub-
unit) when allocation cannot be avoided. The allocation procedure applied by NETL is outlined
in Section 4.0 of their report, "Development of Baseline Data and Analysis of Life Cycle
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Greenhouse Gas Emissions of Petroleum-Based Fuels," available in the RFS2 docket at EPA-
HQ-OAR-2005-0161.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The (2233) commenter supports the exclusion of indirect, including land use and military
presence, impacts of petroleum in the petroleum LCA. The commenter believes these types of
indirect effects are insignificant and speculative. [[Docket number 2233.2, pp. 51-52]]
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) noted that during the public hearings, several parties suggested that
EPA should change the methodology for determining the greenhouse gas emission reductions of
biofuels by changing the gasoline and diesel baselines. The commenter agrees with EPA's
interpretation of this provision, and EPA's conclusion that Congress did not authorize EPA to go
beyond the definition in EISA. (2505.2, p.15)
Our Response:
EPA agrees with these comments. Further discussion of our analysis of the indirect
impacts of petroleum use can be found in Section V.B.3 of the preamble and Chapter 2.7 of the
RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) notes several concerns with respect to EPA's development of well-to-
tank average GHG emissions factors for gasoline and diesel. Specifically, based on their
assessment of EPA's approach to modeling GHG emissions from oil refining as presented in
Section 2.4.4 of the DRIA, the commenter believes that the lifecycle GHG emissions for
gasoline and diesel fuel may be overstated. The commenter notes inappropriate data and
information used in the baseline. [[Docket number 2393.1, p. 51]] [[See docket number 2393.1,
pp. 51-55 for a detailed discussion of the petroleum baseline including gasoline baseline, diesel
fuel baseline, and indirect impacts of petroleum. The commenter also refers to docket number
2393.4, Attachment 3; however, this is a copyrighted document not available on FDMS.]]
Our Response:
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For the final rule, we are using the model developed by the National Energy Technology
Laboratory (NETL) to determine the 2005 petroleum baseline. The NETL model provides a
more accurate and comprehensive assessment of the petroleum baseline than the approach used
in the proposed rule by utilizing site-specific data, such as country-specific crude oil extraction
profiles and port-to-port travel distances for imported crude oil and petroleum products. The
NETL model utilizes recent data to determine the GHG emissions from crude oil extraction and
transport, refining, and finished product transport. Furthermore, NETL uses 2005 data for major
oil sands producers to determine the emissions from oil sands extraction. More detail on the
methodologies used by NETL can be found in Chapter 2.5 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) states that a lifecycle analysis must not include disproportionate
treatment of crop-based biofuels. Comparing direct (only) emissions for petroleum to direct and
indirect GHG emissions for biodiesel dramatically reduces biodiesel's GHG benefits compared
to petroleum and is an obvious violation of a basic scientific principle. Therefore, EPA must
consider direct land use changes associated with petroleum exploration and production and must
also consider indirect emission of baseline gasoline and adequately explain why it deems them
not to be "significant." [[Docket number 2249.2, pp. 89-91]]
The commenter also believes that the baseline for petroleum should be based on updated
information. Baseline emissions are based on outdated information. Although the commenter
generally supports use of the GREET model, as an excellent lifecycle assessment tool, the inputs
in GREET need updating. Further, more recent data indicates that energy used for crude oil
production has increased substantially from the information used by GREET. GREET also
appears to underestimate the emissions attributable to oil sands and crude oil transportation. In
addition, EPA uses the 1995 IPCC global warming potentials (GWPs) for methane and nitrous
oxides. These numbers have been updated twice since these values were produced, resulting in a
greater weighting on methane and a lower weighting on nitrous oxide. The most updated GWP's
should be used. [[Docket number 2249.2, p. 107]]
Our Response:
The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
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opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
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For the final rule, we performed an estimate of land use change emissions associated with
oil extraction and production to determine if the value was significant enough to be included in
our petroleum baseline calculation. As oil sands production incurs a greater degree of land use
change versus conventional crude oil production, we made an estimate of the emissions from the
conversion of Alberta forest for oil sands production. Using literature values, we found that land
use change emissions for oil sands were negligible compared to the total well-to-tank values and
did not change the overall petroleum baseline values. A more complete discussion of our
analysis can be found in Chapter 2.5.7 of the RIA.
For the final rule, we are using the model developed by the National Energy Technology
Laboratory (NETL) to determine the 2005 petroleum baseline. The NETL model provides a
more accurate and comprehensive assessment of the petroleum baseline than the approach used
in the proposed rule by utilizing site-specific data, such as country-specific crude oil extraction
profiles and port-to-port travel distances for imported crude oil and petroleum products. The
NETL model utilizes recent data to determine the GHG emissions from crude oil extraction and
transport, refining, and finished product transport. Furthermore, NETL uses 2005 data for major
oil sands producers to determine the emissions from oil sands extraction. More detail on the
methodologies used by NETL can be found in Chapter 2.5 of the RIA.
EPA uses the Global Warming Potential (GWP) values from IPCC's Second Assessment
Report. These GWP values have been agreed upon in the international framework for addressing
climate change and are used in EPA's Endangerment Finding for greenhouse gases and for the
official U.S. GHG Inventory.
7.2.7 Energy Sector Indirect Impacts
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1050
Organization: American Council for Ethanol (ACE)
Comment:
The commenter (2101.1) noted that if EPA insists upon applying indirect effects, they encourage
EPA to apply indirect effects for all fuels. This includes undertaking a complete lifecycle
assessment of the indirect emissions associated with petroleum. The commenter noted that direct
effects are time-tested, peer-reviewed, reliable and verifiable scientific determinations about the
lifecycle carbon footprint of fuels or sources of energy that enjoy broad scientific consensus. So-
called "indirect effects," particularly ILUCs attributable to biofuels, are new, untested,
unreliable, and controversial computer-generated predictions that are being selectively applied to
corn ethanol only at this time. According to scientists, there are no peer-reviewed or published
scientific models that accurately calculate the potential indirect carbon intensity of forms of
biofuels today, including the models relied upon by EPA in the RFS2 rule. (2101.1, p.2)
The commenter noted that while EPA determined that land use impacts of petroleum production
would not have an appreciable impact on the 2005 baseline GHG emissions, the commenter
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finds it remarkable and bizarre that EPA fails to see that future sources of petroleum certainly
will have appreciable indirect effects due to the massive expenditures in energy made annually
by the U.S. military to protect oil supplies and transportation routes around the world, as well as
land use effects (i.e., Alberta Tar Sands Oil). To ignore these petroleum-related indirect
emissions means that EPA's comparison of emissions from biofuels versus petroleum is at best
intellectually dishonest, and at worst a deliberate attempt to obfuscate the truth. (2101.1, p.3)
If EPA is intent on pursuing ILUC and indirect effects, the commenter would like EPA to fairly
assess indirect effects on a level playing field. Indirect activities, such as military operations to
protect oil supplies and shipping lanes with ships, aircraft, tanks, jeeps, and trucks powered by
oil are not accounted for by EPA in their analysis on the carbon intensity of petroleum. (2101.1,
p.10)
The commenter also recommends that EPA revisit its lifecycle analysis comparisons and
compare future barrels of ethanol to future barrels of oil in determining the carbon intensity of
fuels. That approach is much more relevant to the real-world scenarios and would do a much
more effective job of identifying what fuels will indeed be more low carbon. (2101.1, p. 11)
Our Response:
The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
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final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
For the final rule, we performed an estimate of land use change emissions associated with
oil extraction and production to determine if the value was significant enough to be included in
our petroleum baseline calculation. As oil sands production incurs a greater degree of land use
change versus conventional crude oil production, we made an estimate of the emissions from the
conversion of Alberta forest for oil sands production. Using literature values, we found that land
use change emissions for oil sands were negligible compared to the total well-to-tank values and
did not change the overall petroleum baseline values. A more complete discussion of our
analysis can be found in Chapter 2.5.7 of the RIA.
We also do not believe that emissions arising from military activities can be readily
attributed to the protection of oil imports. Military activities, even in world regions that
represent vital sources of oil imports, undoubtedly serve a broader range of security and foreign
policy objectives than merely protecting oil supplies. In the peer review of the energy security
analysis that EPA commissioned, a majority of peer reviewers believed that U.S. military costs
should be excluded absent a widely agreed methodology for estimating this component of U.S.
energy security. Since military impacts were not considered for the energy security analysis in
this final rule, they were also excluded from any lifecycle GHG analyses
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Furthermore, increased domestic consumption of renewable fuels is expected to decrease
oil demand and thus reduce oil imports. However, an incremental reduction in oil imports is not
expected to cause an analogous reduction in U.S. military expenditures and activities. Hence,
even if we were able to attribute GHG emissions to the protection of oil imports, it is unlikely
that there would be a decrease in military-related GHG emissions as a result of this rule. More
detail on this topic can be found in the Energy Security Analysis in Chapter 5 of the RIA.
For the final rule, we are using the model developed by the National Energy Technology
Laboratory (NETL) to determine the 2005 petroleum baseline. The NETL model provides a
more accurate and comprehensive assessment of the petroleum baseline than the approach used
in the proposed rule by utilizing site-specific data, such as country-specific crude oil extraction
profiles and port-to-port travel distances for imported crude oil and petroleum products. The
NETL model utilizes recent data to determine the GHG emissions from crude oil extraction and
transport, refining, and finished product transport. Furthermore, NETL uses 2005 data for major
oil sands producers to determine the emissions from oil sands extraction. More detail on the
methodologies used by NETL can be found in Chapter 2.5 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2140
Organization: John Deere Agriculture & Turf Division
Comment:
The commenter (2140.1) supports utilization of biofuels in the United States as a method of
increasing energy stability and independence, reducing greenhouse gas emissions, and generating
rural economic opportunities. The commenter believes there is currently no scientific consensus
regarding indirect land use impacts of biofuels.
The commenter also believes the American Clean Energy and Security Act of 2009 (H.R. 2454)
recently passed by the House of Representatives reflects Congressional concern that indirect
emissions impacts not be considered at this time. (2140.1, p.l)
Our Response:
EPA believes there is a great deal of scientific consensus on the need to account for
indirect emissions in assessing the lifecycle impacts of biofuels. EPA's goal in developing this
methodology was to use a scientifically sound approach and to appropriately characterize
uncertainty. In an independent peer review or EPA's methodology the reviewers in general
supported the importance of assessing indirect land use change and determined that EPA used
the best available tools and approaches for this work. This peer review, along with the extensive
public comments the Agency received, supported the value of quantifying the magnitude of this
uncertainty and its relative impact on the resulting lifecycle emission estimates as is done in this
final rule.
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EPA's obligation is to implement EISA as enacted by Congress. We cannot comment on
the motivations of proposed legislation.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
While the commenter (2146.1) supports EPA's efforts to continually reduce GHG emissions
from transportation fuels, the commenter is concerned about the approach being considered for
evaluations of indirect effects of biofuels. Not only is it unjustified to apply indirect effects
solely to biofuels and not other fuels, but the critical issue of land use change and deforestation
should be examined more holistically, taking into explicit account all the complex factors
contributing to these changes globally. The commenter urges EPA to delay inclusion of
potential indirect effects in the LCA of biofuels until further, specific studies can be undertaken
by respected, scientifically-skilled institutions. (2146.1, pp.6-7) [[See Docket Number 2146.1,
pp.6-7 for a detailed discussion of this issue]]
Our Response:
EPA's analysis does take into account the different factors contributing to land use
change. However, it is important to note that while many factors impact the certainty in
predicting total land used for crop production, making accurate predictions of many of these
factors are not relevant to our analysis. For example different assumptions about economic
growth rates, weather, and exchange rates will all impact future agricultural projections including
amount of land use for crops. However, we are interested only in the difference between two
biofuel scenarios holding all other changes constant. So the absolute values and projections for
crops, etc. in the model projections are not as important as the difference the model is projecting
due to an increase in biofuels production. This limits the uncertainty of predicting total land
used change from biofuel production.
Furthermore, EPA believes that there is enough information available to include indirect
impacts in this final rulemaking. EPA has used the best available models and substantially
modified key inputs to those models to reflect comments by peer reviewers, the public, and
emerging science. EPA has also modeled additional scenarios from those described in the
NPRM. EPA recognizes that uncertainty exists with respect to the results, and has attempted to
quantify the range of uncertainty. While EPA agrees that application of the models it has used in
the context of assessing GHG emissions represents changes from previous biofuel lifecycle
modeling, EPA disagrees that it has used faulty data, modeled unrealistic scenarios, or that its
approach is otherwise scientifically indefensible. Although the results of modeling GHG
emissions associated with international land use change are uncertain, EPA has attempted to
quantify that uncertainty and is now in a better position to consider the uncertainty inherent in its
approach.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0897
Organization: Citizen
Comment:
One commenter (0897) appreciates EPA support for the creation and extension of the renewable
ethanol standards. This commenter states that EPA's calculation on the land use COz should
favor ethanol production. The commenter believes that oil creates a large C02 footprint through
processes that EPA did not take into account, such as the fuel used by the U.S. military to
safeguard the transport of foreign fuel from the Middle East to the U.S. (P. 1)
Our Response:
The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
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products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
For the final rule, we performed an estimate of land use change emissions associated with
oil extraction and production to determine if the value was significant enough to be included in
our petroleum baseline calculation. As oil sands production incurs a greater degree of land use
change versus conventional crude oil production, we made an estimate of the emissions from the
conversion of Alberta forest for oil sands production. Using literature values, we found that land
use change emissions for oil sands were negligible compared to the total well-to-tank values and
did not change the overall petroleum baseline values. A more complete discussion of our
analysis can be found in Chapter 2.5.7 of the RIA.
We also do not believe that emissions arising from military activities can be readily
attributed to the protection of oil imports. Military activities, even in world regions that
represent vital sources of oil imports, undoubtedly serve a broader range of security and foreign
policy objectives than merely protecting oil supplies. In the peer review of the energy security
analysis that EPA commissioned, a majority of peer reviewers believed that U.S. military costs
should be excluded absent a widely agreed methodology for estimating this component of U.S.
energy security. Since military impacts were not considered for the energy security analysis in
this final rule, they were also excluded from any lifecycle GHG analyses
Furthermore, increased domestic consumption of renewable fuels is expected to decrease
oil demand and thus reduce oil imports. However, an incremental reduction in oil imports is not
expected to cause an analogous reduction in U.S. military expenditures and activities. Hence,
even if we were able to attribute GHG emissions to the protection of oil imports, it is unlikely
that there would be a decrease in military-related GHG emissions as a result of this rule. More
detail on this topic can be found in the Energy Security Analysis in Chapter 5 of the RIA.
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For the final rule, we are using the model developed by the National Energy Technology
Laboratory (NETL) to determine the 2005 petroleum baseline. The NETL model provides a
more accurate and comprehensive assessment of the petroleum baseline than the approach used
in the proposed rule by utilizing site-specific data, such as country-specific crude oil extraction
profiles and port-to-port travel distances for imported crude oil and petroleum products. The
NETL model utilizes recent data to determine the GHG emissions from crude oil extraction and
transport, refining, and finished product transport. Furthermore, NETL uses 2005 data for major
oil sands producers to determine the emissions from oil sands extraction. More detail on the
methodologies used by NETL can be found in Chapter 2.5 of the RIA.
7.3 Fuel Specific GHG Emissions Estimates
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2133
Organization: The Brazilian Vegetable Oil Industry Association (ABIOVE) and the
Brazilian Biodiesel Union (UBRABIO)
Comment:
The commenter (2133) requests the total exclusion of emissions attributed to the indirect effects
of land use to Brazilian biodiesel, and that data on Brazilian soy presented in the report prepared
by the University of Sao Paulo be used. This report concludes:
1. The application of a consequential approach to Life Cycle Assessment created confusion in
the interpretation of the GHG emissions. It would be helpful if the results for domestic and
international GHG balances were also presented, setting as boundaries the soybean production
itself, aside from the impact that increased production might have on other crops and the
resulting emissions.
2. International agricultural emission should be disaggregated into country-specific data for the
main soybean producing countries.
3. Data for Brazil should include currently available sources with a proper representation of low
N fertilizer application due to see inoculation, clean energy matrix, low fuel use in no-till
farming and use of renewable fuel in agricultural machinery.
4. No-till farming and crop-integration can potentially increase soil carbon stocks, thus
removing CO2 from the atmosphere. Soil carbon sequestration under conservationist
management practices should be included in the GHG balance of bio-based products, including
soybean-derived biodiesel [[Docket number 2133.1, p. 21]] [[See docket number 2133.1, pp. 14-
21 for the University of Sao Paulo report.]]
Our Response:
1. Based on the definition of lifecycle GHG emissions specified in EISA, we determined
that consequential lifecycle analysis was appropriate for this rulemaking. As discussed in RIA
Chapter 2, there are many studies in the published literature that estimate attributional lifecycle
GHG emissions from soy-based biodiesel production. However, to avoid confusion, we focused
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solely on presenting consequential lifecycle analysis results which are directly relevant for this
rulemaking.
To calculate GHG emissions impacts from crop production, we used data on agricultural
inputs and energy use by crop and region. We specifically had this data peer reviewed by a
panel of experts. The expert peer reviewers recommended several sources of data to augment
our analysis. We used these recommendations to improve our estimates of crop-specific and
country-specific GHG impacts from crop production. This data is discussed and presented in
RIA Chapter 2.
2. Given the nature of EPA'si lifecycle analysis, which considers all significant direct and
indirect emissions sources, presenting the results for only one country, or a handful of countries,
can be misleading because all of the impacts must be considered together. As discussed above,
all of the country-specific data inputs, assumptions and results are discussed in the RIA and
included in the public docket.
3. To estimate soil carbon emissions resulting from agricultural land conversions, we
assumed medium inputs and full-tillage for new cropland. Following Table 5.5 in the IPCC
AFOLU, in Brazil we used the soil land use (FLU) parameter of 0.48 for long-term cultivated
crops in a tropical temperature regime and moist/wet moisture regime. However, we also
considered the +/- 46% error estimate in Table 5.5 to quantify the uncertainty in our calculations.
The IPCC default soil management factor (FMG) for no-till farming in tropical/moist regions is
1.22. This means that in Brazil, the assumption that all new cropland uses no-till farming
methods would reduce our soil C change estimates for land converted to cropland by 22%. Thus,
by considering the +/- 46% uncertainty factor for the FLU parameter, our 95% confidence range
encompasses the case where all new cropland uses no-till farming methods. Projecting future
soil management practices internationally is an area for more work, and we intend to study this
more as part of ongoing lifecycle analysis updates.
4. Soil carbon stocks from different cropping practices internationally are included as part
of the range of uncertainty around our land use change results. Soil carbon changes from
different cropping practices domestically are included explicitly in our modeling for all the
different biofuel pathways considered.
7.3.1 Greenhouse Gas Emissions Reductions Relative to the 2005 Petroleum Baseline
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2012
Organization: Caribbean Basin Ethanol Producers Group
Comment:
The commenter (2012.1) requests that their organization be allowed to voluntarily transition
from the use of fossil fuels to power their plant to an alternative energy such as bagasse to reduce
our emissions of CO2. (2012.1,p.3)
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Our Response:
EPA has modeled sugarcane ethanol production assuming the use of bagasse for
providing process energy. We have not model facilities using other energy sources for sugarcane
ethanol production. A fuel producer using production technology that utilizes other energy
sources will need to petition the Agency and supply the necessary information to allow
calculation of the lifecycle emissions impact of the fuel it is producing.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2071
Organization: Targeted Growth, Inc.
Comment:
The commenter states they have developed three new versions of potential feedstocks that should
have much lower LCA GHG emissions, and would be inappropriately categorized by the current
legislation; camelina, sugar corn, and algae. The commenter makes three suggestions:
A. That the Final Rule make a distinction between feedstocks that are currently in large
cultivation (corn, soybeans, canola, sugar, and timber) and pre-commercial dedicated
energy crops.
B. That pre-commercial dedicated crops not be subject to a formal LCA until they reach a
threshold of 1 million acres of domestic cultivation; this will allow new crops to gain a
commercial foothold and develop data at an appropriate scale that will allow for a more
accurate analysis of that crops LCA GHG emissions from production.
C. That for new crops which reach the 1 million acre milestone, the EPA have an expedited
process for conducting an LCA GHG emission analysis that is timely; such pathways
should be established within a timely 90 days after the year in which the 1 million acre
milestone has been met.
Our Response:
The final rule clearly makes a distinction between fuel produced from current crops and
technology and that produced from emerging alternative feedstocks and technologies. EPA has
provided a petition process whereby biofuel producers can request EPA to evaluate specific
technologies or operating processes that distinguish their biofuel production LCA GHG impacts
from those already considered by EPA. These new technologies or operating processes can then
receive an alternative GHG threshold assessment, if appropriate.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2093
Organization: Targeted Growth, Inc.
Comment:
The commenter [[2093]] proposes that that EPA issue a final rule that supports the development
of next generation feedstocks and brings transparency to the regulatory process. The final rule
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should make a distinction between feedstocks that are already in large scale cultivation - corn,
sugar, soybeans - and pre-commercial dedicated energy crops. Pre-commercial energy crops
should not be subject to a lifecycle analysis. They should be considered in compliance with the
rule's lifecycle greenhouse gas emission reduction requirements for biodiesel and cellulosic
biofuels until they reach a threshold of 1 million acres of domestic cultivation, [[see docket
#2093, p.2]]
Our Response:
The final rule clearly makes a distinction between fuel produced from current crops and
technology and that produced from emerging alternative feedstocks and technologies. EPA has
provided a petition process whereby biofuel producers can request EPA to evaluate specific
technologies or operating processes that distinguish their biofuel production LCA GHG impacts
from those already considered by EPA. These new technologies or operating processes can then
receive an alternative GHG threshold assessment, if appropriate.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2111
Organization: Arcadia Biosciences, Inc.
Comment:
The commenter [[2011]] states that though it may be appropriate not to forecast improvements in
the lifecycle GHG emissions over time based on yield and technological improvements, it would
be inappropriate to assume that yield and technological improvements could not bring the
lifecycle GHG emissions of corn ethanol or soy biodiesel down enough to qualify for the
Advanced Biofuel or Biomass-Based Diesel definition.
Our concern is that the given RFS2 structure does not provide proper incentive for adoption of
GHG reducing technologies in feedstock and biofuel production. Without incentives from the
EPA through the Renewable Fuels Standard program, these technologies may not be adopted
unless they provide an economic benefit to the farmer or producer, [[see #2011.1 p.3-4]]
Our Response:
For the final rule, EPA has updated its assessment of crop yields both domestically and
internationally. We have calculated lifecycle emission performance assuming both base yields
derived from projecting into the future longer term historical trends and also assuming a marked
increase in future yields based on industry and other comments.
EPA has provided a petition process whereby biofuel producers can request EPA to
evaluate specific technologies or operating processes that distinguish their biofuel production
LCA GHG impacts from those already considered by EPA. These new technologies or operating
processes can then receive an alternative GHG threshold assessment, if appropriate.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2112
Organization: Biomass Rules, LLC
Comment:
The commenter (2112.1) believes that the percent reduction in GHG emissions is also arbitrary.
If severe reductions do not allow the industry to rise to meet those standards, the law will fail far
more completely than if the RFS standards are broadly inclusive to industry participation but the
reductions are incremental. The conventional biofuel standards (starch-based ethanol) should
include a 10 percent reduction in GHG emissions, while the advance renewable
(biomass/cellulosic) fuels should include a 20 percent reduction. (2112.1, p.2)
The commenter believes that the reduction targets should be treated as a safety valve rather than
a prescriptive absolute. The current fixed percent reductions should serve only as a policy
mechanism to keep technologies from commercialization that utilizes more fossil fuels in the
generation of biofuels than they create. Lowering the percent reduction goals will also relieve
the responsibility on EPA for guessing about long term effects. (2112.1, p.2)
Our Response:
EPA notes that the four specific GHG thresholds as well as the requirements for EPA's
greenhouse gas assessments are provided in the EISA statute.
Based on the analyses and approach described in the preamble, EPA is determining 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 will meet the 20% GHG emission reduction threshold compared to the 2005
baseline gasoline. We are also determining that biobutanol from corn starch meets the 20%
threshold. Similarly, EPA is making the determination that biodiesel and renewable diesel from
soy oil or waste oils, fats and greases will exceed the 50% GHG threshold for biomass-based
diesel compared to the 2005 petroleum diesel baseline. In addition, we have now modeled
biodiesel and renewable diesel produced from algal oils as complying with the 50% threshold for
biomass-based diesel. EPA is also determining that ethanol from sugarcane complies with the
applicable 50% GHG reduction threshold for advanced biofuels. The modeled pathways
(feedstock and production technology) for cellulosic ethanol and cellulosic diesel would also
comply with the 60% GHG reduction threshold applicable to cellulosic biofuels.
Under EISA, EPA is allowed to adjust the GHG reduction thresholds downward by up to
10% if necessary based on lifecycle GHG assessment of biofuels likely to be available. Based
on the results summarized above, we are not finalizing any adjustments to the lifecycle GHG
thresholds for the four renewable fuel standard categories.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
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Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) noted that during the public hearings on the proposed RFS2 rule,
several parties suggested that EPA should change the methodology for determining the
greenhouse gas emission reductions of biofuels by changing the gasoline and diesel baselines.
The commenter agrees with EPA's stated view that EISA clearly specifies the baseline. The
commenter agrees with EPA's interpretation of this statutory provision, and EPA's conclusion
that Congress did not authorize EPA to go beyond this definition. (2124.1, p.28)
Our Response:
EPA agrees with this comment. Further discussion of our analysis of the indirect impacts
of petroleum use can be found in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) noted that in order for the comparisons with biofuels to be accurate
over the time period covered by the RFS2, the biofuel LCA results should be compared to the
incremental fossil fuels to be replaced over that same time horizon. The commenter encourages
EPA to compare reductions in greenhouse gas emissions attributable to renewable biofuels
displacement of gasoline and diesel through 2022, in addition to the 2005 baseline defined.
(2146.1, p.6)
Our Response:
The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
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analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2153
Organization: Syngenta Biotechnology, Inc.
Comment:
The commenter [[2153]] notes that technologies now on the cusp of commercialization and
others under development will affect these variables and EPA's analyses. The final rule should
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provide enough flexibility for EPA to review and revise these estimates and make program
adjustments to reflect the quickly developing capabilities of evolving technology. Technology
currently in development stands to increase yield and enhance nitrogen or water use efficiency,
or by greater implementation of management practices such as conservation tillage, to better
sequester carbon. Through the use of existing and future technology corn producers will
continue to significantly increase yield and reduce the carbon footprint of agricultural
production. The technologies in Syngenta's pipeline also include new seed treatments that
protect emerging plants, biotech traits to control a wide spectrum of pests, drought tolerance and
nitrogen utilization traits, and new chemistries capable of reducing plant stress. Thus, Syngenta
believes that the yield projections through 2022 employed by EPA in RFS2 are overly
conservative. [[#2153.1 p.2-3]]
Our Response:
The specific mandates for advanced biofuel and the phase in of these mandates over time
are specified in the legislation. EPA does not have authority to accelerate the phase in of these
mandates.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Comment:
The commenter (2157) notes several issues which require EPA to update its modeling as it
substantially underestimates the reduction of GHG emissions from biodiesel: (1) The baseline
EPA assumes for biodiesel is too low, biodiesel production will be greater then mandate so there
is no indirect land use impacts from biodiesel production, (2) EPA needs to update N20
emissions from soybean production, include a glycerin co-product credit, and update the energy
balance for biodiesel production, (3) Emissions calculated for the domestic agriculture sector
may be overstated, the energy use for soybean production is too high, and transport energy may
be double counted, (4) the baseline for petroleum should be based on updated information, and
(5) EPA should give biofuels credit for the avoidance of increased use of marginal sourced of
crude oil. [Each point is discussed in detail on (2157 p. 104).]
Our Responses:
(1): On the baseline issue, we disagree with this comment, even if biodiesel volumes
would have reached the mandated volumes in 2022 there is still an impact with producing these
volumes compared to a case without them. The threshold analysis mandated by EISA requires
EPA to determine the impacts of the different biofuels production which requires us to consider
two scenarios with differing volumes of biofuels. So regardless of what volume might or might
not actually be produced, our threshold analysis would still be based on two different volume
scenarios and production of any amount of biofuels would still have an impact. Furthermore,
since our analysis normalizes the greenhouse gas emissions impacts on a per BTU basis, the
effect of using different volumes in our calculations is minimized.
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(2): For the final rule analysis EPA has updated the N20 emission estimates for soybean
production to be consistent with the latest IPCC guidance. We have also updated our analysis to
include a co-product credit from glycerin production. Finally we have updated our energy
balance estimates based on the latest published reports from USDA on biodiesel energy use.
(3): We disagree that the energy use for soybean production has been overestimated.
Energy data (e.g., diesel fuel, gasoline, electricity, natural gas) included within the crop budgets
in FASOM are based on USDA Agricultural Resource Management Survey (ARMS) data
(http:www.ers.usda.gov/Data/ARMS/) and crop budgets developed by university extension
offices. The differences with other sources of data are because the crop budgets included in the
FASOM model include data on input use that varies by crop, management practices, and region.
There is often considerable variation in the inputs used per acre, which implies that total input
use and associated GHG emissions and other environmental impacts will be affected by changes
in crop mix and management practices that result under the different scenarios considered.
Furthermore, the energy use for transportation is not double counted in the modeling. The
energy use for crop production is separate from the energy used to transport feedstocks.
(4) & (5): The reason the system boundaries used for threshold assessment in the
proposed rule and the final rule did not include a marginal analysis of petroleum production was
due to the definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of
the CAA. The definitions of the different renewable fuel categories specify that the lifecycle
threshold analysis be compared to baseline lifecycle greenhouse gas emissions, which are
defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
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final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
For the final rule, we are using the model developed by the National Energy Technology
Laboratory (NETL) to determine the 2005 petroleum baseline. The NETL model provides a
more accurate and comprehensive assessment of the petroleum baseline than the approach used
in the proposed rule by utilizing site-specific data, such as country-specific crude oil extraction
profiles and port-to-port travel distances for imported crude oil and petroleum products. The
NETL model utilizes recent data to determine the GHG emissions from crude oil extraction and
transport, refining, and finished product transport. Furthermore, NETL uses 2005 data for major
oil sands producers to determine the emissions from oil sands extraction. More detail on the
methodologies used by NETL can be found in Chapter 2.5 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2190
Organization: Illinois River Energy, LLC.
Comment:
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The commenter [[2190]] states that the model assumptions regarding agricultural productivity
growth and biofuel processing efficiency improvements are simply unjustifiably pessimistic.
[[#2190 p.2]]
Our Response:
There are many factors that go into the economic modeling but the yield assumptions for
different crops has one of the biggest impacts on land use and land use change. Therefore, for
our final rule analysis we ran a base yield case and a high yield case.
EPA's base yield projections are derived from extrapolating through 2022 long-term historical
U.S. corn yields from 1985 to 2009. This estimate, 183 bushels/acre for corn and 48
bushels/acre for soybeans, is consistent with USDA's method of projecting future crop yields.
During the public comment process we learned that numerous technical advancements--
including better farm practices, seed hybridization and genetic modification-have led to more
rapid gains in yields since 1995. In addition, commenters, including many leading seed
companies, provided data supporting more rapid improvements in future yields. For example,
commenters pointed to recent advancements in seed development (including genetic
modification) and the general accumulation of knowledge of how to develop and bring to market
seed varieties—factors that would allow for a greater rate of development of seed varieties
requiring fewer inputs such as fertilizer and pest management applications. Therefore, in
coordination with USDA experts, EPA has developed for this final rule a high yield case
scenario of 230 bushels/acre for corn and 60 bushels/acre for soybeans. These figures represent
the 99% upper bound confidence limit of variability in historical U.S. yields. This high yield
case represents a feasible high yield scenario for the purpose of a sensitivity test of the impact on
the results of higher yields.
Feedback we received indicated that corn and soybean yields respond in tandem and that
a high yield corn case would also imply a higher yield for soybeans as well. The high yield case
is therefore based on higher yield corn and soybeans in the U.S. as well as in the major corn and
soybean producing countries around the world.
While we modeled a high yield scenario for this analysis we continue to rely primarily on
the base yield estimates in our assessments of different biofuel lifecycle GHG emissions. The
reasons outlined above could lead to higher rates of yield growth in the future, however, there are
mitigating factors that could limit this yield growth or potentially cause reductions in yield
growth rates. For example, the water requirements for both increased corn farming and ethanol
production could lead to future water constraints that may in some regions limit yield growth
potential. Furthermore, one of the long term impacts of potential global climate change could be
a reduction in agricultural output of different impacted regions around the world, including the
U.S. This could also serve to reduce yield growth. As with many aspects of this lifecycle
modeling, as the science and data evolves on crop yields, the Agency will update its factors
accordingly.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2245
Organization: Illinois Corn Growers Association, et.al.
Contributors to this comment letter include: Iowa Corn Growers Association, Iowa Soybean
Association, Illinois Soybean Association, Illinois Renewable Fuels Association, Kentucky
Soybean Association, Minnesota Soybean Growers Association, Missouri Corn Growers
Association, Missouri Soybean Association, Monsanto, the National Corn to Ethanol Research
Center, Nebraska Corn Board, Nebraska Soybean Association, Novozymes, Ohio Soybean
Association, South Dakota Soybean Association, University of Illinois Chicago, Energy
Resources Center, University of Illinois Champaign-Urbana plant breeding, animal nutrition and
agronomy, DuPont, Ethanol Technologies, John Deere, and the U.S. Grains Council
Comment:
The commenters (2245.1) believe that EPA needs to establish the appropriate boundaries for
GHG determinations. EPA has repeatedly indicated that their hands are tied by the legislative
language indicating that renewable fuel production in 2022 must achieve a 20% reduction in
lifecycle GHG emissions compared to the average for gasoline or diesel sold and distributed as
transportation fuel in 2005. EPA is being inconsistent in its response to this legislative request.
EPA should either exercise its discretion in resetting the baseline year for greenhouse gas
emissions for the relative comparison of all fuels to 2022 or include the emission savings from
marginal sources of petroleum as an indirect credit to the biofuel. (2245.1, p.30)
Document No.: EPA-HQ-OAR-2005-0161-2339
Organization: Illinois Com Growers Association
Comment:
The commenter [[2339]] states EPA's proposal not only fails to calculate the full lifecycle GHG
emissions of the displaced gasoline and diesel fuel in the baseline year, it also fails to credit
renewable fuels with the reduction in the gasoline and diesel fuel lifecycle GHG emissions that
will be achieved over time as those fuels are replaced. EPA admits that it has not included
indirect land use impacts in its analysis of the petroleum lifecycle GHGs either domestic or
international. [[#2339 p.6]]
Our Response:
The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
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sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2504
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Organization: American Frozen Food Institute
Comment:
The commenter [[2504]] states that EPA should restructure the RFS to accelerate the
development of advanced biofuels. Modifying the food-to-fuel mandates and restructuring the
RFS2 to give priority to advanced biofuels would limit the diversion of food to fuel. And that
implementing the RFS 2 proposal would pose economic harm by significantly increasing the cost
of food, [[see #2504.1 p.l]]
Our Response:
The specific mandates for advanced biofuel and the phase in of these mandates over time
are specified in the legislation. EPA does not have authority to accelerate the phase in of these
mandates.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2625
Organization: Citizen (sample comment letter representing 400 comment letters received
from an anonymous organization)
Comment:
The commenter (2625) notes that, "All lifecycle analyses, including EPA's without international
land use changes, show well over 50 percent reductions in emissions. There is ample support,
therefore, for EPA to essentially grandfather existing facilities by deeming these facilities to be
in compliance with the 50 percent reduction requirement." (2625 p. 1)
Our Response:
"Grandfathering" of facilities is as provided for in EISA; this limits grandfathering of
fuel for compliance with the basic renewable fuel standard of 20% reduction compared to
petroleum fuel; it does not apply to fuels meeting the 50% reduction target for advanced biofuels.
Additionally, EPA has determined it is appropriate to assess the full lifecycle impacts of biofuels
including international land use impacts as directed by EISA.
7.3.1.1 Corn Ethanol
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that EPA's substantial focus on corn ethanol in the Proposed
Rule and DRIA appears to ignore the fact that the lifecycle emissions definition in the statute
applies to both renewable fuels and the baseline petroleum. (2329.1, p.52)
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Our Response:
The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
For the final rule, we performed an estimate of land use change emissions associated with
oil extraction and production to determine if the value was significant enough to be included in
our petroleum baseline calculation. As oil sands production incurs a greater degree of land use
change versus conventional crude oil production, we made an estimate of the emissions from the
conversion of Alberta forest for oil sands production. Using literature values, we found that land
use change emissions for oil sands were negligible compared to the total well-to-tank values and
did not change the overall petroleum baseline values. A more complete discussion of our
analysis can be found in Chapter 2.5.7 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
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The commenter also noted that a traditional lifecycle analysis shows substantial reductions in
GHG emissions from corn ethanol compared to petroleum. The commenter agrees with EPA's
exclusion of biogenic carbon based on corn uptake from tailpipe emissions associated with
ethanol combustion. (2329.1, pp.64-65)
Our Response:
We do not use GREET factors for corn tethanol, either growing or processing, we use
FASOM and FAPRI inputs for scorn growing, including a high yield scenario, we use
projections to 2022 for technology and efficiency improvements for corn ethanol process energy
use.
Furthermore we do not calculate direct emissions specifically since our modeling
includes indirect impacts of agriculture including livestock and crop shifting.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter noted that neither the FAPRI nor FASOM models included projections of the
frequency of use of the following farm practices, which have been shown to reduce energy
consumption on the farm, and in some cases, very significantly reduce N20 emissions from
agriculture:
-No till farming (reduces soil carbon and nitrogen loss, and reduces agriculture energy use)
-Conservation till farming (also reduces soil carbon and nitrogen loss, and reduces agriculture
energy use)
-Winter cover and double cropping (reduces N20 emissions and increases soil carbon).
The commenter believes that EPA should project agriculture emissions to 2022, estimating
frequencies of the above practices on newly converted land. (2329.1, p.66)
Our Response'.
Our domestic ag sector modeling does include different farming practices including no-
till and conservation tillage. We project out to 2022 the use of these different tillage practices
based on the economics involved.
Winter cover and double cropping are captured in our international Brazil module
projecting out to 2022. As part of ongoing analysis we will look at feedstocks produced from
winter and double cropping in terms of feedstocks for biofuels production.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter believes that EPA should allow sources to submit their own facility-specific
analysis to establish whether it can meet the GHG reduction requirements of RFS2. (2329.1,
p.96)
Our Response:
EPA has established biofuel threshold decisions that apply nationally, to all facilities
producing the same fuel, using the same feedstock and the same production technologies. EPA
has also provided a petition process whereby biofuel producers can request EPA to evaluate
specific technologies or operating processes that distinguish their biofuel production LCA GHG
impacts from those already considered by EPA. These new technologies or operating processes
can then receive an alternative GHG threshold assessment, if appropriate.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter feels that while ethanol facilities have continued to improve efficiencies, EPA
did not reflect this in the proposed pathways.
Our Response:
EPA's analyses take into account expect improvements in facility performance over time.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter also believes that EPA's proposed treatment of processing distiller grains does
not adequately reflect practices. Facilities should be able to adjust EPA's proposed percentages
in its lifecycle analysis based on the amount of distiller grains it distributes as wet versus dry.
Even thought the commenter disputes EPA's estimated percentages in Table VI.C.1-2, this
adjustment may allow additional production processes to qualify that are otherwise under the 20
percent reduction requirement. The commenter believes that EPA should analyze and provide
additional pathways, as few facilities dry their distiller grains or sell wet distiller grains 100
percent of the time. (2329.1, p. 98)
Our Response:
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EPA has established biofuel threshold decisions that apply nationally, to all facilities
producing the same fuel, using the same feedstock and the same production technologies. EPA
has also provided a petition process whereby biofuel producers can request EPA to evaluate
specific technologies or operating processes that distinguish their biofuel production LCA GHG
impacts from those already considered by EPA. These new technologies or operating processes
can then receive an alternative GHG threshold assessment, if appropriate.
EPA also recognizes that the amount of drying of distiller grains will have an impact on
the overall lifecycle results for corn ethanol. For the final rule EPA has provided a number of
pathways for corn ethanol that qualify for the 20% GHG lifecycle threshold depending on the
type of technology, process fuel, and percentage of distiller grain drying used.
Document No.: EPA-HQ-OAR-2005-0161-1989
Organization: Iowa Farm Bureau Federation
Comment:
By implementing the rule as proposed, EPA sets a dangerous precedent for states to follow
without the same consideration for existing ethanol production. The result very well could be a
series of state regulations for low-carbon fuels which refuse to acknowledge EPA-2 Renewable
Identification Numbers (RINs), or 38-character numeric codes assigned to grandfathered
producers or importers of renewable fuel as a basic currency for the RFS program's credits and
trading. The resulting damage to the well-established ethanol industry compliance system would
be based heavily on unsure and questionable analysis of ILU changes.
Our Response:
EPA has established these final rules in accordance with the mandates of EISA. As
described in the final rule and referenced elsewhere in this summary and analysis of comment,
EPA believes it has properly assed land use impacts including significant indirect land use
changes which will results form ncreased demand of biofuel feedstock. Individual state actions
regarding the acceptability of biofuels under state-specific programs are outside the scope of this
rule. However, we note that for the final rule, EPA has determined several corn ethanol
pathways that we believe represent anticipated technology that will meet the 20% threshold for
renewable fuels.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0981
Organization: Nebraska Center for Energy Sciences Research, Department of Agronomy
and Horticulture, University of Nebraska-Lincoln
Comment:
The commenter (0981) states that empirical data concerning biorefinery operations for the LCA
of corn-ethanol scarce. Because of industry growth and the lack of information concerning the
performance of these biorefineries, the commenter recommends that EPA perform a survey of
biorefinery efficiency across the U.S. ethanol industry for dry and wet mills, and use these actual
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data as the basis for establishing the baseline for GHG emissions from current corn-ethanol
systems, (pp. 7-8)
Our Response:
EPA has used the most up to date information on current biorefinery performance based
in part on recent survey data. Through the proposal process, EPA described its energy
assumptions for biorefineries and reflected in its final analysis updated information.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2002
Organization: Novozymes North America, Inc. (Novozymes)
Comment:
The commenter (2002) recommends that EPA modify the foregone carbon sequestration for the
final rule to reflect the fact that old forests sequester less carbon than relatively young forests.
[[Docket number 2002.1, p. 5]]
Our Response:
In the proposed rule, to estimate international annual forgone forest sequestration, we
used IPCC default data for the growth rates of forests greater than 20 years old. The expert peer
reviewers noted that these estimates could be refined with more detailed information from the
scientific literature. Many of the public commenters were also concerned that EPA's approach
overestimated foregone sequestration because it did not adequately account for natural
disturbances, such as fires and disease. To address these comments, our analysis has been
updated with peer reviewed studies of long-term growth rates for both tropical and temperate
forests. These estimates are based on long-term records (i.e., monitoring stations in old-growth
forests for the tropics and multi-decadal inventory comparisons for the temperate regions) and
reflect all losses/gains over time. These studies show that the old-growth forests in the tropics
that many once assumed to be in "steady state" (i.e., carbon gains equal losses) are in fact still
gaining carbon. In summary, our analysis now includes more conservative foregone forest
sequestration estimates that account for natural gains and losses over time.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2074
Organization: GreenShift Corporation
Document No.: EPA-HQ-OAR-2005-0161-2094
Organization: GreenShift Corporation
Comment:
The commenter (2074, 2094) provides the three most significant effects of extracting corn oil
from any ethanol plant:
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1. GHG emissions from ethanol production are actually 29 percent less than gasoline when corn
oil is extracted, compared to the 19 percent EPA calculated in its draft impact statement on this
RFS2 proposal.
2. Corn oil extraction after fermentation allows a dry mill ethanol pant to produce 11 percent
more total fuel energy by manufacturing biodiesel from its com oil.
3. Additional corn oil extraction efficiency, coupled with corn varieties now available that have
higher corn oil content (and the same starch content), have the potential to more than double
these benefits. [[Docket number 2074, 2094, p. 1]]
The commenter also notes that the EPA assumptions for the electrical energy use and oil
recovery potential of corn oil extraction are flawed. [[Docket number 2074, p. 2; 2094, p. 3-5]]
The commenter concludes that operating with corn oil extraction, every ethanol plant can reduce
GHG emissions by more than the 20 percent threshold, so that all corn ethanol will meet the
definition of a renewable fuel. [[Docket number 2074, p. 4]] [[See docket number 2074, p. 2-4
for further discussion.]]
Our Response:
EPA has included both front-end corn oil fractionation, and back-end corn oil extraction
as technologies available for dry mill corn ethanol plants as part of our life cycle GHG analysis.
Our projections are that the majority of corn ethanol plants in 2022 will have either fractionation
or extraction technology installed. We account for the energy use and co-product changes
associated with removing corn oil from the process. The corn oil from extraction is assumed to
be used as a biodiesel feedstock. The information provided in GreenShift's comments, as well as
conversations between GreenShift and EPA has been taken into account to update the electrical
energy use and corn oil recovery potential of corn oil extraction modeling.
Based on our final rulemaking analysis we have found that corn ethanol, including
advanced technologies such as corn oil extraction/fractionation, reduce GHG emissions by more
than the 20% threshold required for renewable fuels.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2153
Organization: Syngenta Biotechnology, Inc.
Comment:
The commenter [[2153]] states that corn is one of the best understood crops in the world. The
substantial infrastructure that is in place to harvest and store corn must not be overlooked. Some
have estimated that dedicated energy crops such as switchgrass will require up to six times the
current volume to achieve the same energy density as corn. Therefore, to reach national goals
for cellulosic ethanol, the U.S. needs to develop the necessary harvesting and storage
infrastructure necessary. While this is an admirable goal, such infrastructure development will
require an increase in targeted investment and will take years. [[#2409.1 p.2]]
Our Response:
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As part of its cost analysis, EPA considered the needed energy and related greenhouse
gas impacts for growing, harvesting, gathering, shipping, storing and producing biofuel from
energy crops. In doing this analysis we also developed some information on the likely cost
impacts. However, as energy crop production and use for biofuel production is in its infancy,
these assessments will likely need to be updated as commercial production starts to occur.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
Using EPA's proposed LCA GHG emissions for corn-based ethanol, the commenter (2233)
notes that GHG emissions from corn-based ethanol will increase significantly for at least the next
13 years and, everything else being equal, for the next 30 years, total cumulative GHG emissions
from corn-based ethanol will be higher than at the beginning of the RFS2 program. It will not be
until 2040 at the earliest that the corn-based ethanol portion of the RFS2 program begins to show
some slight benefits. The commenter recommends that EPA submit this information to Congress
and the Administration with a recommendation that the corn-based ethanol portion of RFS2 be
removed. [[Docket number 2233.2, p. 45]]
Our Response:
The recommendation to provide information to Congress and to recommend corn-based
ethanol be removed from the RFS2 rule are outside the scope of this rulemaking.
7.3.1.2 Imported Ethanol
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1958
Organization: Institute for International Trade Negotiations, The Brazalian Institute for
International Negotiations (ICONE)
Comment:
The commenter (1958) believes that the GHG emissions in the proposed RFS2 Draft Regulatory
Impact Analysis (DRIA) as a result of an increasing demand for sugarcane ethanol overstate the
emissions associated to direct and indirect land use changes. This commenter shows that a more
accurate land use model for Brazil derives new per hectare C02-e emissions factors and, as a
consequence, the reduction of GHG emissions of sugarcane ethanol compared to gasoline should
be higher than the results presented by the draft analysis. Rather than 44 percent reduction for
100 year with 2% discount and 26 percent for 30 years with 0% discount as published in RFS2's
DRIA, our analysis indicates 69 percent for 100 year with 2% discount and 60 percent for 30
year with 0% discount. The commenter strongly urges the EPA to revise its calculations, taking
into account the methodology and the results presented in their comment letter and attachment.
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[[Docket number 1958.1, p. 1]] [[See docket number 1958.1, pp. 1-31 and 1958.2, comment
attachment for extensive discussion of the commenter's analysis and calculations on GHG
emissions using the Brazilian Land Use Model (BLUM)]]
Our Response:
The Brazil module (an early version of which was used in the commentor's analysis) was
developed by Iowa State University with input from Brazilian agricultural sector experts and we
believe it is an improvement over the approach used in EPA's proposed rule. In the NPRM, we
requested additional data for countries outside the U.S. We received comments encouraging us
to use regional and country specific data where it was available. We also received comments
encouraging us to take into account the available supply of abandoned pastureland in Brazil as a
potential source of new crop land. The new Brazil module addresses these comments. Since the
Brazil module contains data specific to six regions, this additional level of details allows FAPRI
to more accurately capture real-world responses to higher agricultural prices. For example,
double cropping (the practice of planting a winter crop of corn or wheat on existing crop acres) is
a common practice in Brazil. Increased double cropping is feasible in response to higher
agricultural prices, which increases total production without increasing land use conversion. The
new Brazil module also explicitly accounts for changes in pasture acres, therefore accounting for
the competition between crop and pasture acres. Furthermore, the Brazil module explicitly
models livestock intensification, the practice of increasing the number of heads of cattle per acre
of land in response to higher commodity prices or increased demand for land.
The commentor's analysis uses the Brazil model by itself based on the assumption that
sugarcane ethanol production in Brazil has no effect or interactions with agricultural markets in
other countries. We did not think this was a valid assumption, so instead of modeling Brazil in
isolation we integrated the Brazil module into the FAPRI's global modeling framework. We
used this modeling structure to analyze all of the renewable fuels assessed with FAPRI in this
rulemaking. Our analysis with the international FAPRI models indicates the sugarcane ethanol
production in Brazil can impact global commodity prices and agricultural activities in other
countries. However, in the scenarios we analyzed the impacts of sugarcane ethanol production
outside of Brazil were relatively modest. Although there are several differences in our approach
compared the analysis done by the commenters, including the modeling changes described
above, our final lifecycle results for sugarcane ethanol are similar to the results derived by the
commenter. As discussed in preamble Section V, with a 30 year time period and 0% discount
rate, we estimate that imported sugarcane ethanol gives a 61% reduction in lifecycle GHG
emissions compared to the petroluem baseline, with a 95% confidence range of a 53%-70%
reduction.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2204
Organization: Sierra Research, Inc.
Comment:
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The commenter [[2204]] states they have identified the following errors and omissions in the
analysis of sugarcane ethanol: 1. Ignoring direct and indirect N20 emissions from crop residues;
2. Use of inappropriately low fertilizer rates; 3. Failure to account for energy inputs for
dehydration of hydrous ethanol; 4. Failure to accurately assess transport of ethanol from Brazil to
U.S.; 5. Failure to assess actual cane harvesting practices and processing in Brazil; and 6. Use of
the unrealistic assumption that all excess electricity resulting from ethanol production in Brazil
will displace fossil fuel combustion. The commenter cites extensive quantitative analysis on
pages 3-27.
Our Response:
With respect to the first comment, it is correct that the proposal did not include N20
emissions from the direct and indirect emissions from crop residues for cotton, palm oil,
rapeseed, sugar beet, sugarcane, or sunflower. These were not included for these crops because
default crop-specific IPCC factors used in the calculation were not available. Comments from
our peer review process suggested that we include proxy emissions from these crops based on
similar crop types that do have default factors. Therefore, for our final rule analysis we have
included crop residue N20 emissions from sugarcane production based on perennial grass as a
proxy. See Section 2.4.3.2 of the RIA for more details.
With respect to the second comment, we have updated our fertilizer rates based on a more
recent International Fertilizer Industry Association (IFA) report as suggested by our peer review.
This report provides more up-to-date and consistent datasets for fertilizer rates than that used for
the proposal.
With respect to the third comment, for the final rule we include the energy input required
for ethanol dehydration regardless if it is dehydrated in Brazil or in a Caribbean country. All
imported ethanol is assumed to be anhydrous once it enters the U.S. for consumption. See
Section 2.4.7.5.5 of the RIA for more information.
With respect to the fourth comment, we have reassessed our assumptions on
transportation of ethanol from Brazil to the U.S. Updated feedstock transport assumptions are
based on suggestions from UNICA as well as Brazilian researchers as further discussed in
Section 2.4.6 of the RIA. We have also updated our sugarcane ethanol transport assumptions as
described in 2.4.8.3 for the final rule. For example, we now assume that back-haul emissions are
negligible for ocean tankers transporting ethanol from Brazil to the United States. We have also
estimated the average distance for ethanol transported by ocean tanker to various U.S. ports
instead of assuming default assumptions of only two ports. We have updated our assumptions on
the average distance ethanol is transported by truck, barge, and rail within the United States
(from import facilities to petroleum blending terminals) based on a recent study conducted by
Oak Ridge National Laboratory.
With respect to the fifth comment, we have updated our analysis to include the potential
for mechanical harvesting and crop residue burning emissions. We assume for the final rule that
there will be 100% mechanical harvesting and that the majority (not all) of sugarcane will be left
unburned in the field by 2022. Please refer to Section 2.4.3.5 of the RIA for more information.
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We account for the potential for increased diesel fuel consumption for mechanical harvesting as
described in Section 2.4.3.3 in the RIA.
With respect to the final comment, we have updated our analysis to provide better
documentation on our assumptions for the anticipated amount of surplus electricity generated by
a sugarcane facility by the year 2022. This is further described in Section 2.4.7.5.6 of the RIA.
In addition, for the final rule we assume that surplus electricity will displace natural gas based
electricity. Several commenters agree that this method is appropriate. We believe the use of
marginal grid electricity instead of average electricity is reasonable given that 1.) We are
crediting on the basis of displacement 2.) Electricity produced at the sugarcane ethanol facility is
always dispatched when a mill is operating and this allows for reduction of the use of other
thermal power plants. See Section 2.4.7.5.6.1 of the RIA for more information.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2362
Organization: Canopy Prospecting, Inc. And Trinidad Dehydration Company, Limited
Comment:
The commenter (2362) is concerned about EPA's lifecycle analysis of cane-based ethanol from
Brazil and that the draft rule does not take ethanol dehydrated in the Caribbean into account. If
Brazilian sugarcane ethanol is determined to be an Advanced Biofuel, the commenter urges EPA
to include Caribbean Basin Economic Recovery Act (CBI) dehydrated Brazilian ethanol as an
Advanced Biofuel as well. [[Docket number 2362, pp. 3 and 4]] [[See docket number 2362.1, pp.
3-6 for further discussion of this issue.]]
Our Response:
We have included this pathway in our final rule analysis including the change in GHG
emissions associated with CBI dehydration of Brazilian sugarcane ethanol. This pathway
qualifies as an advanced biofuel.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2426
Organization: EthylChem, Ltd.
Comment:
The commenter (2426) urges EPA to avoid a regional approach to determining the GHG
emissions associated with the dehydration of ethanol. Under the RFS2, renewable fuels from
new facilities are required to reduce greenhouse gas (GHG) emissions from a baseline by certain
specified percentages. In EPA's proposal, sugarcane ethanol is listed as having a 44% reduction
in GHG emissions. If EPA makes the 10% adjustment in the specified threshold that it is
considering, all sugarcane ethanol would qualify as an "Advanced Biofuel" regardless of where
it was dehydrated. The commenter believes that such a region-neutral approach is the most
rational approach. However, if EPA were to take a regional approach, the commenter argues that
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the Agency must at least establish a process by which fuel from low GHG-emitting dehydrators
(e.g., larger plants, plants using gas as a fuel, etc.) can be exempted. To do otherwise would
penalize those that have invested in dehydration processes that minimize GHG emissions.
[[Docket number 2426.1, pp. 1-2]]
Document No.: EPA-HQ-OAR-2005-0161-2637.1
Organization: EthylChem, Ltd.
Comment:
The commenter (2637) is writing in regards to the dehydration of ethanol in the Caribbean before
shipping to the U.S. The commenter states that since fuel type and fuel efficiency, and therefore
GHG emissions, vary from plant to plant within a region, if EPA were to take a regional
approach to adjusting GHG emission values, it must at least establish a process by which fuel
from low GHG-emitting dehydrators (e.g., plants using gas as a fuel, larger facilities, etc.)
receives a more favorable rating than that from other smaller facilities using fuel oil as an energy
source. To do otherwise would penalize those that have invested in dehydration processes that
minimize GHG emissions. (2637.1 Pgs. 1-2).
Our Response:
As part of the final rule LCA analysis EPA has considered Caribbean Basin ethanol
dehydration. Based on our updated analysis imported ethanol would qualify for the Advanced
category of fuels regardless of where or how it was dehydrated. As the rule only has specified
thresholds for fuels to qualify the Agency does not have to distinguish between different
producers or processes if they all fall within a given category. Therefore, we are not
distinguishing fuels on a regional basis.
7.3.1.3 Cellulosic Ethanol
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that there is very large uncertainty in projected future GHG
emissions of cellulosic ethanol due to the range in potential feedstocks and chemicals as well as
yields and co-products, as well as the lack of any existing commercial operation. The commenter
noted that EPA projected large improvements in performance to the 2022 time frame, but it is
not clear these improvements will be realized. GHG emissions associated with enzyme
production for cellulosic ethanol can be much larger than corn ethanol and a can be significant
fraction of cellulosic ethanol GHG.The commenter believes that outlining current and possible
future performance and tracking the progress over time would provide a better measurement of
the LCA performance of cellulosic ethanol. (2124.1, p.47)
Our Response:
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EPA has based its projected improvements for cellulosic ethanol and other emerging
technologies on guidance from the DOE's laboratory, the National Renewable Energy
Laboratory (NREL). NREL has many years of expertise in this area and works closely with
other researchers and industry groups in the area of advanced biofuels. As such, we believe
these projections are reflective of what is possible in a future 2022 time frame. Refer to the
technical documents available in the docket and the RIA for more information. As research
evolves and commercial operation begins, we will have the opportunity to continue to update our
analyses as necessary.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter also noted that the spreadsheet on cellulosic ethanol indicates that cellulosic
ethanol causes a large reduction in GHG emissions from international livestock production. The
commenter stated that the mechanism for such a reduction is not clear. (2124.1, p.48)
Our Response:
Our analysis of switchgrass ethanol produced with enzymatic technology for the final
rule estimates a 10 kg C02e / mmBTU reduction in lifecycle GHG emissions, i.e., a 110%
reduction compared to the petroleum baseline. We estimate that emissions from international
livestock production are reduced by 0.25 kg C02e/mmBTU. The mechanism for this small
reduction is based our projection that switchgrass feedstocks will be grown on fertile lands,
which can increase land rents and displace production of other crops. As a result livestock feed
prices increase slightly, which causes a small reduction in global livestock output. More details
are provided in RIA Chapter 2.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) states that there is a very large uncertainty in projected future GHG
emission of cellulosic ethanol due to the range in potential feedstocks and chemicals as well as
yields and co-products, as well as the lack of any existing commercial operation. EPA has
projected large improvements in performance to the 2022 time frame, but it is not clear these
improvements will be realized. [[Docket number 2130.1, p. 20]]
Document No.: EPA-HQ-OAR-2005-0161-2316
Organization: University of Minnesota
Comment:
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My third [[2316]] comment concerns the statement in the Proposed Rulemaking that increased
stover removal was also associated with higher rates of reduced tillage or no tillage practices
which results in soil carbon increase. That conservation tillage practices increase soil carbon is a
widely held belief, such as reviewed by West and Post (2002), but more recent research very
strongly suggests that this phenomenon may not exist. Rather, earlier studies showing increased
carbon sequestration under conservation tillage may have in fact been reporting an artifact of not
sampling the soil profile deeply enough. I am including a more detailed explanation of this point
in Appendix A. [[2316.1 p.2]]
Our Response:
Our analysis for the final rulemaking updated the soil carbon accounting in our domestic
agricultural sector modeling. Changes in soil carbon are a function of several parameters
including tillage practice, crop type, irrigation, etc. In terms of tillage practices, agricultural soils
have traditionally been tilled to create a suitable seedbed, reduce weed competition, and remove
restrictions to crop root growth. However, by loosening the soil, tillage breaks up soil aggregates
and increases the exposure of soil organic matter to oxygen, which speeds oxidation and results
in reduced soil carbon with an associated release of COz into the atmosphere. The use of tillage
alternatives that reduce soil disturbance and therefore reduce oxidation of soil organic matter will
increase soil carbon sequestration. EPA understands there are studies to the contrary, that
basically indicate no change in soil carbon with different tillage practices, however, we believe
these new studies are inconclusive at this point. EPA understands this is an area for future
research and will continue to examine this issue for future analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2478
Organization: ZeaChem Inc.
Comment:
The commenter (2478) discusses their ethanol process and states that the total lifecycle impacts
of production and use of their cellulosic ethanol results in a 94% reduction in GHG emissions
versus conventional gasoline. [[Docket number 2478.1, p. 2]] [[See docket number 2478.2 for
the full LCA using the GREET model.]]
Our Response:
EPA has analyzed the lifecycle GHG impacts of cellulosic ethanol from several feedstock
sources. These results vary on the basis of the feedstock source. The results are underlying
calculations are described in the preamble section V and with additional detail in RIA chapter 2.
We have found that all the pathways modeled achieve the 60% GHG reductions required for the
cellulosic ethanol category. If a fuel producer believes they have a process that is significantly
different from the ones included in our final rulemaking and that will result in establishing a new
or different threshold designation (D code), they can petition the agency for inclusion of their
specific pathway.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2395.1
Organization: Covanta
Comment:
The commenter (2395) indicates a life cycle analysis (LCA) performed on both a 30-year and
100-year with a 2% discount rate basis reveals that, for a wide range of biogenic fractions of
MSW, the process generates a fuel meeting the reduction requirements of the proposed RFS. An
LCA performed in accordance with international and scientific precedents, where future
emissions are not discounted or limited to a finite time period, results in even greater net
reductions. These results fully support a finding by EPA that post-recycled MSW warrants
inclusion as a defined renewable feedstock in the RFS. (2395.1 Pg. 7-8).
Our Response:
As discussed in Section II.B.4.d of the Preamble, EPA has determined that the biogenic
portion of post recycled MSW is eligible to produce renewable fuel and will largely be made up
of cellulosic material. Therefore biofuel made from this waste-derived material will qualify as
cellulosic biofuel.
Furthermore, separated food and yard wastes, including food and beverage wastes from
food production and processing are another category of waste product that would not have any
land-use change impact. These waste products can be used as feedstock for advanced biofuel
production or cellulosic biofuel production.
7.3.1.4 Biodiesel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2154
Organization: ConocoPhillips
Comment:
The commenter (2154.1) does not support the potential averaging approaches outlined by EPA as
a means to qualify biodiesel as biomass-based diesel. The current life cycle analysis results
indicate that biodiesel produced from vegetable oils does not meet the 50% GHG emission
reduction threshold requirement as mandated by the Energy Independence and Security Act of
2007. Although EPA has the authority to lower that threshold to as low as 40%, vegetable oil
based biodiesel would still not meet that threshold. Based on projected availability of qualifying
fuel, the commenter believes that EPA should immediately reduce the biomass-based diesel
standard to reflect what qualifying volumes will be available. If the standard is effective starting
in 2011, the commenter believes that the biomass-based diesel standard should be no more than
0.8 billion gallons, the legislated target for 2011 volume. (2154.1, p.5)
Our Response:
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EPA is not adopting averaging of biodiesel feedstock pathways for the final rule. We
have determined that biodiesel for soy oil will meet the biodiesel threshold of 50%. Therefore
averaging is not necessary nor is lowering the threshold performance standard.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter opposes EPA's option to combine/average biodiesels to reach the biomass-based
diesel mandated volumes. If there is not enough biodiesel capacity to meet mandate, EPA can
use general waiver authority. Also, the commenter believes that averaging would violate
Congress's stated intention by allowing biofuels that do not meet the GHG thresholds on their
own. [[Docket number 2233.2, p. 43]]
Our Response:
EPA is not adopting averaging of biodiesel feedstock pathways for the final rule. We
have determined that biodiesel for soy oil will meet the biodiesel threshold of 50%. Therefore
averaging is not necessary nor is lowering the threshold performance standard.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) believes that this section should specifically include animal fats in the
evaluation and be included in Table VI.C.1-12 as a separate line item. (0994.1, p.17)
Our Response:
We agree and have included animal fats as meeting the lifecycle threshold of 50% for
biomass-based diesel.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0999
Organization: Darling International Inc.
Comment:
The commenter (2151.1) supports U.S. EPA's determination that animal fats and waste grease
feedstocks (including tallow from rendering) have no land use impacts and will achieve at least
an 80% reduction in greenhouse gas ("GHG") emissions as compared to petroleum products.
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(2151.1, p.4) [[See Docket Number 2151.3 for a independent evaluation of the expected GHG
reductions associated with biofuels produced from waste fats and greases from a third party
consultant, Gal Consultants.]]
Our Response:
We have continued to assume that animal fats and waste greases will meet the lifecycle
threshold for biomass-based diesel for the final rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1001, EPA-HQ-OAR-2005-0161-1005, EPA-
HQ-OAR-2005-0161-1010, EPA-HQ-OAR-2005-0161-1011, EPA-HQ-OAR-2005-0161-1012,
EPA-HQ-OAR-2005-0161-1025, EPA-HQ-OAR-2005-0161-1029, EPA-HQ-OAR-2005-0161-
1043, EPA-HQ-OAR-2005-0161-1051, etal.
Organization: Kurzman Clean Tech Research & Kurzman Capital, LLC, Cotner
Consulting Services, CC Gas Systems, LLC, Atlantic BioFuels, Glenwood Farms, Law Offices
of David Wilcox, C.I.B., University of Georgia Engineering Outreach Service, Aberdeen
Development Corp., et al.
Comment:
The commenters noted that EPA's analysis, on calculating international land changes, looks at
the incremental change in biodiesel production based on two scenarios. Review of the EPA
reference case reveals the fact that the agency has penalized the biodiesel industry when
calculating potential global land use change by establishing an artificially low production
baseline. Underestimating biodiesel volumes results in an overestimate of indirect land use
changes, penalizing the biodiesel industry.
The commenters also noted that EPA's approach does not accurately reflect increasing crop
yields, which have allowed the agricultural industry to keep up with demand. The EPA analysis
also penalizes the biodiesel industry by not fully considering new fats and oils technology that
can increase the contribution biodiesel will make to the Biomass-based Diesel category in RFS2.
The proposed rule only considers soybean oil, vegetable oil from ethanol plants, and rendered
fats and waste greases in its analysis. Lipid sources such as camelina, winter canola, and algae
are not factored into the feedstock supply.
The commenters noted that in Section VI.C.D of the preamble, it is stated that "the impact of any
land-use change tends to be magnified with soybean biodiesel." The statement is justified by
asserting that soybeans have a low gallon-per-acre yield compared to corn ethanol. The
commenters believe that this statement is simply false. For this to be true, soybean oil used for
biodiesel must require additional soybeans to be grown somewhere else in the world to replace
the oil used for biodiesel. The commenters strongly urge EPA to correct this statement in its
final rule.
Our Response:
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For the final rule, EPA has updated its assessment of crop yields both domestically and
internationally. We have calculated lifecycle emission performance assuming both base yields
derived from projecting into the future longer term historical trends and also assuming a marked
increase in future yields based on industry and other comments
EPA has considered data supplied by seed producers and others regarding its future
projections of yield and has reflected these projections in its threshold assessments. In particular
we have conducted sensitivity assessments using high yield cases and confirmed that high yields
do not change the results of our analyses. However, we also plan to periodically update our
analyses and should yield projections change, these changes would be captured in subsequent
reassessments and appropriate updates to our threshold determinations.
For biodiesel produced from soy, we note that as described in the preamble and further in
the RIA, the LCA has been considerably updated since the proposal to reflect comments received
and updated information. However, our analysis still predicts that the use of soy bean oil to
produce biofuel means that it will no longer be available for other markets. This unmet demand
means that additional acres of soy beans will be planted both domestically and in other countries.
The final rule analyses also include analyses for algae-based biodiesel. It is noted in the
preamble that since use of algae oil is early in its biofuel development, this analysis may need to
be updated to reflect changes as this pathway approaches commercialization.
Regarding other biofuel feedstock sources not modeled for the final rule (including
camelina and winter canola, EPA has adopted a petition process whereby biofuel producers can
request EPA review of new process technologies. Additionally, EPA has indicated its intention
to periodically update its analyses to reflect new data and information including the development
of new technologies.
Additionally, EPA's analysis considers oil sources other than soy beans in determining
the impact of using soy oil for biodiesel production. This analysis is documented in the
preamble section V and in additional detail in Chapter 2 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1052
Organization: Pennsylvania Energy Resources Group (ERG)
Comment:
The commenter (1052) has serious concerns over the lifecycle greenhouse gas methodology for
biodiesel. There are multiple inaccuracies and assumptions which are flawed. Among the many
items identified as such by the commenter are used of out of date data being used, ignoring world
markets for feedstocks, coproducts and agricultural crop yield and production improvements.
The commenter finds the inclusion of the language "the impact of any land use change tends to
be magnified with soybean biodiesel" to be both inaccurate and problematic, adding that public
policies must be driven by sound science, not political philosophy or assumption. [[Docket
number 1052.1, p. 2]]
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Our Response:
The Agency has updated and refined its modeling approach since proposal in several
important ways, including a number of updates made in direct response comments from the
public and peer reviewers. EPA is confident that its modeling of GHG emissions is
comprehensive and provides a reasonable and scientifically robust basis for making the threshold
determinations. EPA has also quantified the uncertainty associated with significant components
of its analyses, including important factors affecting GHG emissions associated with
international land use change. Based on this analysis and approach, EPA has determined that
biodiesel and renewable diesel from soy oil or waste oils, fats, and greases will exceed the 50%
GHG threshold for biomass-based diesel.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2048
Organization: BioPure Fuels
Comment:
The commenter (2048.1) noted that CARB is currently undertaking studies looking at the effect
of low blends on the fuel efficiency of the biofuel versus a pure fuel at common blend levels.
The commenter recommends that EPA review this data when it is available from CARB studies
or use other data of NREL or U.S. EPA as a guide and adjust the life cycle emissions of at least
biodiesel to account for its actual fuel efficiency at the most common blend levels (2%, 5%, 10%
and 20%). (2048.1 ,p.6)
Our Response:
EPA will consider this information when it becomes available for any future updates to
the analysis performed for this rulemaking. Currently there is no data to suggest using anything
different from energy value of the fuel to compare emissions (i.e., no change in engine
efficiencies).
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2516.1
Organization: Imperium
Comment:
Review of the EPA reference case, which was used to calculate the increased levels of biofuels
needed to meet RFS2, reveals the fact that the agency has penalized the biodiesel industry when
calculating potential global land use change by establishing an artificially low production
baseline. EPA's approach does not accurately reflect increasing crop yields, and does not fully
consider new fats and oils technology.
Document No.: EPA-HQ-OAR-2005-0161-2079
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Organization: AE Biofuels, Inc.
Comment:
The commenter (2079.1) noted that in reviewing the EPA reference case, which was used to
calculate the increased levels of biofuels needed to meet RFS2, they revealed the fact that EPA
has penalized the biodiesel industry when calculating potential global land use change by
establishing an artificially low production baseline. In looking at an incremental change, EPA's
approach also does not accurately reflect increasing crop yields, which have allowed the
agricultural industry to keep up with demand. The EPA analysis also penalizes the biodiesel
industry by not fully considering new fats and oils technology that can increase the contribution
biodiesel will make to the Biomass-based Diesel category in RFS2. (2079.1, p.8) (See Docket
Number 2079.1, p.8 for a detailed discussion of this issue)
The commenter believes that the statement the impact of any land-use change tends to be
magnified with soybean biodiesel is false. For this statement to be true, soybean oil used for
biodiesel must require additional soybeans to be grown somewhere else in the world to replace
the oil used for biodiesel. The commenter urges EPA to correct this statement in its final rule.
(2079.1, p.9)
Our Response:
With regard to their relationship between land use and soybean biodiesel lifecycle GHG
emissions, EPA is making the GHG threshold determination based on a methodology that
includes an analysis of the full lifecycle, including significant emissions related to international
land-use change. As described in more detail below and in Section V of this preamble, EPA has
used the best available models for this purpose, and has incorporated many modifications to its
proposed approach based on comments from the public and peer reviewers and developing
science. EPA has also quantified the uncertainty associated with significant components of its
analyses, including important factors affecting GHG emissions associated with international land
use change. As discussed below, EPA has updated and refined its modeling approach since
proposal in several important ways, and EPA is confident that its modeling of GHG emissions
associated with international land use is comprehensive and provides a reasonable and
scientifically robust basis for making the threshold determinations described above. As discussed
below, EPA plans to continue to improve upon its analyses, and will update it in the future as
appropriate.
The revised lifecycle assessment for soybean biodiesel predicts less overall indirect land
use change (less land needed) and less impact from the land use changed that does occur (due to
updates in types of converted land assumed). In addition, the latest IPCC guidance indicates
reduced domestic soybean NzO emissions, and updated USDA and industry data show
reductions in biodiesel processing energy use and a higher co-product credit, all of which further
reduced the modeled soybean biodiesel lifecycle GHG emissions. This has resulted in a
significant improvement in our assessment of the lifecycle performance of soybean biodiesel as
compared to the estimate in the proposal.
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EPA's final analysis indicates that, based on currently available information and our
current analysis over the range of scenarios considered, the performance of soy oil-based
biodiesel exceeds the 50% threshold.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2104
Organization: US Canola Association
Comment:
The commenter [[2104]] states that EPA did not account for glycerin as a co-product. Glycerin
is a co-product of biodiesel production and when the emissions value is calculated it will
decrease emissions by 15%. The biodiesel process produces one pound of glycerin for every ten
pounds of biodiesel produced. This means that 0.74 pounds are produced for every gallon of
biodiesel or 6.2 pounds per mm BTU of biodiesel. GREET calculates the GHG emissions
associated with the materials that are embedded in the glycerin. These emissions are 2,735 g C02
eq/pound of glycerin. This amounts to 16,957 g C02 eq/mm BTU. [[#2104.1 p.6]]
Our Response:
Glycerin is a co-product of biodiesel production. Our proposal analysis did not assume
any credit for this glycerin product. The assumption for the proposal was that by 2022 the
market for glycerin would be saturated due to the large increase in biodiesel production in both
the U.S. and abroad and the glycerin would therefore be a waste product. We received a number
of comments that we should be factoring in a co-product credit for glycerin as there would be
some valuable use for this product in the market. Based on these comments we have included
for the final rule analysis that glycerin would displace residual oil as a fuel source on an energy
equivalent basis. This is based on the assumption that the glycerin market would still be
saturated in 2022 and that glycerin produced from biodiesel would not displace any additional
petroleum glycerin production. However, the biodiesel glycerin would not be a waste and a low
value use would be to use the glycerin as a fuel source. The fuel source assumed to be replaced
by the glycerin is residual oil. This inclusion of a co-product credit for glycerin reduces the
overall GHG impact of biodiesel compared to the proposal analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2104
Organization: US Canola Association
Comment:
The commenter [[2104]] states the EPA methodology inaccurately assesses the energy balance of
biodiesel production. It takes less energy to produce a gallon of biodiesel than considered by
EPA. EPA used a factor of 3.2 units of energy produced per unit of energy used. The updated
factor should be a factor of 5.2 units of energy produced per unit of energy used. Updating this
data point decreases the biodiesel emissions factor by 1.5%. [[#2104.1 p.6-7]]
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Our Response:
The EISA mandates setting up fuel GHG thresholds do not require the EPA to do site
specific GHG analysis but rather determine for specific fuel pathways if they meet the thresholds
for the different fuel categories. Therefore, we have developed an average energy use value for
biodiesel production. As part of the final rule we updated the energy use assumptions for
biodiesel production to be in line with the latest energy balance reports from USDA and the
University of Idaho. Therefore, the final rule assumes lower energy use for biodiesel production
compared to the proposal analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2104
Organization: US Canola Association
Comment:
The commenter also stated that specifically, the proposed rule only considers soybean oil,
vegetable oil from ethanol plants, and rendered fats and waste greases in their analysis. Lipid
sources such as canola (spring and winter) are not factored into the feedstock supply. [[#2104.1
p.7]]
Our Response:
EPA establishs in the final rulemaking a petition process whereby a party can petition the
Agency to consider new pathways for GHG reduction threshold compliance. We welcome
parties, both domestic and foreign, to utilize the petition process described below to request EPA
to examine additional pathways. EPA will process these petitions as expeditiously as possible.
A full description of the petition process can be located in the Preamble Section V.C.
EPA has focused our analysis on the fuels and feedstocks that we modeled as being used
in the current or near term to meet the EISA mandates. That does not mean other fuels or
feedstocks would not meet the requirements to be considered under the program. We have set up
a process for fuels and feedstocks that do not specifically show up in the current rulemaking to
petition the Agency for consideration.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2104
Organization: US Canola Association
Comment:
The commenter states that EPA's analysis compares estimated, future direct and indirect GHG
emissions for biodiesel to direct (only) emissions for petroleum. [[#2104.1 p.8]]
Our Response:
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The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
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would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
The commenter (2157) notes several issues which require EPA to update its modeling as it
substantially underestimates the reduction of GHG emissions from biodiesel: (1) EPA's
methodology calculates NzO emissions as it related to soybean production based on outdated
information, (2) Credit for the glycerin co-product of biodiesel production from soybean oil
should be included in the lifecycle analysis and (3) EPA should update the energy balance of
biodiesel production. Each is discussed in detail on (2157 p. 99-103).
Our Response:
(1) The proposal analysis calculated N20 emissions from domestic fertilizer application
and nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in N20 emissions. The proposal
analysis NzO factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating NzO emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
The main issue is that because the NzO emission factors used in the proposal were based
on the 1996 IPCC guidance for NzO accounting they were overestimating NzO emissions from
nitrogen fixing crops. As an update in 2006, IPCC guidance was changed such that biological
nitrogen fixation was removed as a direct source of NzO because of the lack of evidence of
significant emissions arising from the fixation process itself. IPCC concluded that the NzO
emissions induced by the growth of legume crops/forages may be estimated solely as a function
of the above-ground and below-ground nitrogen inputs from crop/forage residue. This change
effectively reduces the NzO emissions from nitrogen fixing crops like soybeans and nitrogen
fixing hay from the 1996 to 2006 IPCC guidance.
Therefore, as part of the update to new N20 emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the
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emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
(2) Glycerin is a co-product of biodiesel production. Our proposal analysis did not
assume any credit for this glycerin product. The assumption for the proposal was that by 2022
the market for glycerin would be saturated due to the large increase in biodiesel production in
both the U.S. and abroad and the glycerin would therefore be a waste product. We received a
number of comments that we should be factoring in a co-product credit for glycerin as there
would be some valuable use for this product in the market. Based on these comments we have
included for the final rule analysis that glycerin would displace residual oil as a fuel source on an
energy equivalent basis. This is based on the assumption that the glycerin market would still be
saturated in 2022 and that glycerin produced from biodiesel would not displace any additional
petroleum glycerin production. However, the biodiesel glycerin would not be a waste and a low
value use would be to use the glycerin as a fuel source. The fuel source assumed to be replaced
by the glycerin is residual oil. This inclusion of a co-product credit for glycerin reduces the
overall GHG impact of biodiesel compared to the proposal analysis.
(3) The EISA mandates setting up fuel GHG thresholds do not require the EPA to do site
specific GHG analysis but rather determine for specific fuel pathways if they meet the thresholds
for the different fuel categories. Therefore, we have developed an average energy use value for
biodiesel production. As part of the final rule we updated the energy use assumptions for
biodiesel production to be in line with the latest energy balance reports from USDA and the
University of Idaho. Therefore, the final rule assumes lower energy use for biodiesel production
compared to the proposal analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
Additionally, the commenter (2157) notes that EPA should give biofuels credit for the avoidance
of increased use of marginal sourced of crude oil, which have significantly higher GHG
emissions. This is discussed in detail on (2157 p. 104-106).
Our Response:
For this final rule, we did consider the potential indirect impacts of petroleum use. We
performed an analysis to determine the marginal crude that would be displaced by biofuels use.
Using well-to-tank GHG values for crude extracted from various countries, we were able to
determine an approximate "marginal petroleum baseline" by applying the factors to the countries
where crude production increased. We found that the marginal baseline was, for an average
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gallon of gasoline, not statistically different than the average baseline value used in this final
rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
We also do not believe that emissions arising from military activities can be readily
attributed to the protection of oil imports. Military activities, even in world regions that
represent vital sources of oil imports, undoubtedly serve a broader range of security and foreign
policy objectives than merely protecting oil supplies. In the peer review of the energy security
analysis that EPA commissioned, a majority of peer reviewers believed that U.S. military costs
should be excluded absent a widely agreed methodology for estimating this component of U.S.
energy security. Since military impacts were not considered for the energy security analysis in
this final rule, they were also excluded from any lifecycle GHG analyses
Furthermore, increased domestic consumption of renewable fuels is expected to decrease
oil demand and thus reduce oil imports. However, an incremental reduction in oil imports is not
expected to cause an analogous reduction in U.S. military expenditures and activities. Hence,
even if we were able to attribute GHG emissions to the protection of oil imports, it is unlikely
that there would be a decrease in military-related GHG emissions as a result of this rule. More
detail on this topic can be found in the Energy Security Analysis in Chapter 5 of the RIA.
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For the final rule, we performed an estimate of land use change emissions associated with
oil extraction and production to determine if the value was significant enough to be included in
our petroleum baseline calculation. As oil sands production incurs a greater degree of land use
change versus conventional crude oil production, we made an estimate of the emissions from the
conversion of Alberta forest for oil sands production. Using literature values, we found that land
use change emissions for oil sands were negligible compared to the total well-to-tank values and
did not change the overall petroleum baseline values. A more complete discussion of our
analysis can be found in Chapter 2.5.7 of the RIA.
For the final rule, we are using the model developed by the National Energy Technology
Laboratory (NETL) to determine the 2005 petroleum baseline. The NETL model provides a
more accurate and comprehensive assessment of the petroleum baseline than the approach used
in the proposed rule by utilizing site-specific data, such as country-specific crude oil extraction
profiles and port-to-port travel distances for imported crude oil and petroleum products. The
NETL model utilizes recent data to determine the GHG emissions from crude oil extraction and
transport, refining, and finished product transport. Furthermore, NETL uses 2005 data for major
oil sands producers to determine the emissions from oil sands extraction. More detail on the
methodologies used by NETL can be found in Chapter 2.5 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2212
Organization: Chris Gould Farms
Comment:
The commenter [[2212]] states that his crop yields have increased dramatically in the last five
years and sound science indicates they will continue to do so.
Our Response:
EPA recognizes that crop yields will continue to increase over time. Modeling of the
agriculture sector takes this increase into account, and yield projections are based on those of
USDA. However, EPA's analysis shows that while yields continue to increase over time in all
scenarios, an increase in demand for renewable fuel production will still result in land use
change. For more information on how increasing crop yields are taken into account in the
FASOM and FAPRI models, refer to Chapter 5 in the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2516.1
Organization: Imperium
Comment:
(1) The lifecycle GHG methodology for Biodiesel is Flawed and should not be used to regulate
the biofuels industry - As was clearly set forth in EISA, the domestic concerns associated with
importation of high carbon emitting foreign oil drove the Congressional dictate. Allowing
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international externalities (i.e., indirect land use effects) cannot be allowed to undermine the
clear purpose.
(2) EPA assumes increased U.S. biodiesel production will lead to land conversion in South
America. If this assumption were correct, Brazilian soybean acreage would have increased from
2004 through 2008, a time in which U.S. biodiesel production increased 25 million to 690
million gallons. During this time, however, Brazilian soybean acres actually decreased by 1.5
million hectares. Clearly, this shows the inaccuracy of EPA's hypothesis and modeling.
(3) Energy balance data used by EPA is out of date
(4) EPA's methodology calculates N20 emissions as it relates to soybean production based on
outdated information.
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) believes that EPA modeling substantially underestimates the reduction
in GHG emissions from biodiesel and urges EPA to update the lifecycle analysis. The
commenter points to three significant omissions in EPA's methodology and when updated and
corrected, the lifecycle GHG emission reductions for biodiesel derived from virgin vegetable oils
will have a lifecycle GHG reduction performance of greater than 60 percent (including direct
emissions and significant indirect emissions such as significant emissions from land use
changes). The commenter asks that these corrections be included in EPA's analysis of the
lifecycle GHG emissions of biodiesel:
1. EPA's methodology calculates N20 emissions as it relates to soybean production based on
outdated information.
Our Response:
The proposal analysis calculated N20 emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in N20 emissions. The proposal
analysis N20 factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating N20 emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
The main issue is that because the N20 emission factors used in the proposal were based
on the 1996 IPCC guidance for N20 accounting they were overestimating N20 emissions from
nitrogen fixing crops. As an update in 2006, IPCC guidance was changed such that biological
nitrogen fixation was removed as a direct source of N20 because of the lack of evidence of
significant emissions arising from the fixation process itself. IPCC concluded that the N20
emissions induced by the growth of legume crops/forages may be estimated solely as a function
of the above-ground and below-ground nitrogen inputs from crop/forage residue. This change
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effectively reduces the N20 emissions from nitrogen fixing crops like soybeans and nitrogen
fixing hay from the 1996 to 2006 IPCC guidance.
Therefore, as part of the update to new N20 emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the N20
emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
Credit for the glycerin co-product of biodiesel production from soybean oil should be included in
the lifecycle analysis.
Document No.: EPA-HQ-OAR-2005-0161-2516.1
Organization: Imperium
Comment:
Co-product allocations of glycerin were not incorporated.
Our Response:
Glycerin is a co-product of biodiesel production. Our proposal analysis did not assume
any credit for this glycerin product. The assumption for the proposal was that by 2022 the
market for glycerin would be saturated due to the large increase in biodiesel production in both
the U.S. and abroad and the glycerin would therefore be a waste product. We received a number
of comments that we should be factoring in a co-product credit for glycerin as there would be
some valuable use for this product in the market. Based on these comments we have included
for the final rule analysis that glycerin would displace residual oil as a fuel source on an energy
equivalent basis. This is based on the assumption that the glycerin market would still be
saturated in 2022 and that glycerin produced from biodiesel would not displace any additional
petroleum glycerin production. However, the biodiesel glycerin would not be a waste and a low
value use would be to use the glycerin as a fuel source. The fuel source assumed to be replaced
by the glycerin is residual oil. This inclusion of a co-product credit for glycerin reduces the
overall GHG impact of biodiesel compared to the proposal analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
3. EPA should update the energy balance of biodiesel production.
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Our Response:
The EISA mandates setting up fuel GHG thresholds do not require the EPA to do site
specific GHG analysis but rather determine for specific fuel pathways if they meet the thresholds
for the different fuel categories. Therefore, we have developed an average energy use value for
biodiesel production. As part of the final rule we updated the energy use assumptions for
biodiesel production to be in line with the latest energy balance reports from USDA and the
University of Idaho. Therefore, the final rule assumes lower energy use for biodiesel production
compared to the proposal analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter believes that adjusting for the three issues above would result in a 62 percent
reduction in GHG emissions for biodiesel compared to baseline petroleum diesel utilizing EPA's
proposed methodology. [[Docket number 2249.2, pp. 101-106]]
Our Response:
EPA updated these factors as well as a number of other changes. New results for
biodiesel are a 57% reduction in GHG emissions compared to petroleum fuel.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter also believes that EPA should give biofuels credit for the avoidance of increased
use of marginal sources of crude oil, which have significantly higher GHG emissions. EPA's
analysis does not account for the fact that biodiesel is reducing and delaying the need for diesel
derived from high carbon sources of crude oil such as Canadian tar sands and Venezuelan extra
heavy crude. EPA's lifecycle analysis is based on future production of biofuels, but the results
are compared against baseline petroleum, which is defined as the "gasoline or diesel (whichever
is being replaced by the renewable fuel) sold or distributed as transportation fuel in 2005."
Based on this definition, EPA has focused on the mix of fuels in 2005 to determine the baseline
against which biofuels are compared. EPA's approach fails to recognize the increasing
inefficiency of petroleum production compared to the increasing efficiency of renewable fuels.
[[Docket number 2249.2, p. 107]]
The commenter states that EPA should account for this key omission in at least two ways: first,
EPA can focus on the marginal sources of petroleum in identifying the baseline and second, EPA
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could credit biofuels with the avoidance of GHG emissions in replacing these marginal sources
in the future. [[Docket number 2249.2, pp. 108-109]]
Our Response:
The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
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Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found in
Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix of crude
oil and finished product in 2022 that would be displaced by renewable fuels. Further discussion
of this analysis can also be found in Chapter 2.7 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2328
Organization: Petroleum Marketers Association of America (PMAA)
Comment:
The commenter (2328.1) fully supports EPA's efforts to discourage global deforestation which
contributes to greenhouse gas emissions worldwide. The commenter believes that any lifecycle
analysis used by the EPA to measure the effect of biodiesel production on greenhouse gas
emissions and land use changes should more accurately reflect current soy crop and biodiesel
production data. The commenter also believes that, for the immediate future, the continued
reliance on soy crops for domestic biodiesel production is absolutely vital to achieving the
renewable fuel mandates mandated in EISA and promoting the growth and acceptance of this
homegrown renewable fuel to consumers nationwide. (2328.1, p.8)
Our Response:
As indicated in the preamble and as reflected in the final regulations, EPA has modeled
soy-based biodiesel as complying with the biodiesel GHG performance threshold.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2353
Organization: Iowa Soybean Association
Comment:
The commenter states that Iowa's soybean yields have been increasing faster than the national
average, due to our naturally rich soils, ample rainfall and improved genetics. At the Kimberley
farm (site of the Iowa visit), soybean yield has improved from 30 bushels per acre to 55 bushels
per acre over the past 25 years. New seed technologies show promise of doubling yields within
the next 10 years. Any models used to calculate resource use based on average U.S. yields over
the past 10 years would not reflect current productivity. [[#2353 p.2]]
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Our Response:
It should be noted that EPA's analysis takes U.S. regional yield productivity differences
into account. For example, our analysis shows that the Corn Belt region is much more
productive in terms of corn and has higher corn yields than other regions in the U.S. Similarly,
other crops have different yield potentials across different U.S. regions. For EPA's analysis, it is
expected that the national average corn yield across all U.S. regions will reflect USD A
projections.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2353
Organization: Iowa Soybean Association
Comment:
The commenter states that new farming technology, including GPS yield monitors, satellite
imaging of fields and farm energy use assessment are in use at thousands of Iowa farms,
reducing their carbon footprint. This technology allows precision application of herbicides and
fertilizer, reducing farm input costs and optimizing productivity. [[#2353 p.2]]
EPA did not account for glycerin, which is a co-product of biodiesel production and decreases
the calculated emissions for biodiesel by 15%. [[#2353 p.3]]
Our Response:
Glycerin is a co-product of biodiesel production. Our proposal analysis did not assume
any credit for this glycerin product. The assumption for the proposal was that by 2022 the
market for glycerin would be saturated due to the large increase in biodiesel production in both
the U.S. and abroad and the glycerin would therefore be a waste product. We received a number
of comments that we should be factoring in a co-product credit for glycerin as there would be
some valuable use for this product in the market. Based on these comments we have included
for the final rule analysis that glycerin would displace residual oil as a fuel source on an energy
equivalent basis. This is based on the assumption that the glycerin market would still be
saturated in 2022 and that glycerin produced from biodiesel would not displace any additional
petroleum glycerin production. However, the biodiesel glycerin would not be a waste and a low
value use would be to use the glycerin as a fuel source. The fuel source assumed to be replaced
by the glycerin is residual oil. This inclusion of a co-product credit for glycerin reduces the
overall GHG impact of biodiesel compared to the proposal analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2357
Organization: Iowa Biodiesel Board
Comment:
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Also lipid sources such as camelina, winter canola, and algae are not factored into the feedstock
supply, along with higher yielding oilseed technology. [[2357.1 p.5]]
Our Response:
For the final rule, EPA has determined that biodiesel produced from algae oil will comply
with the advance biofuel GHG performance threshold. We have not modeled camlina as a
biofuel feedstock. While we do not have sufficient information to model these camlina for the
final rule, EPA has adopted a petition process, explained in preamble Section V, whereby biofuel
producers can request EPA review of new feedstocks and process technologies. Additionally,
EPA has indicated its intention to periodically update its analyses to reflect new data and
information including the development of new feedstock sources.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2362
Organization: Canopy Prospecting, Inc. And Trinidad Dehydration Company, Limited
Comment:
The commenter urges EPA to consider a waiver of the Advanced biofuel baseline lifecycle GHG
emissions reductions from a goal of 50% to an achievable 40% for the Caribbean Basin
Economic Recovery Act (CBI) based dehydrators who have little to no control over indirect land
use changes in Brazil. [[Docket number 2362.1, p. 2]]
Our Response:
For the final rule, EPA has modeled sugarcane ethanol as complying with the 50%
advanced biodiesel threshold, including that fuel which is dehydrated in the Caribbean Basin.
Therefore there is no need to reduce the threshold to 40%.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2409
Organization: Tennessee Department of Agriculture
Comment:
The commenter [[2409]] states that EPA's GHG emissions methodology used outdated
assumptions in the direct emission calculations for nitrogen. The 2006 Guidelines for National
Greenhouse Gas Inventories by the Intergovernmental Panel on Climate Change (IPCC)
concludes that nitrogen fixed in soil by soybeans should not be considered a GHG emission. The
Argonne National Laboratory and the California Air Resources Board use the IPCC data in their
models. EPA, however, does not incorporate the IPCC's updated findings and thus attributes
excess nitrogen emissions to soybean cultivation. Making the necessary adjustments to correct
this error reduces the GHG score for soy biodiesel by more than 20 percent. [[#2409.1 p.2]]
Our Response:
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The proposal analysis calculated N20 emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in N20 emissions. The proposal
analysis NzO factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating N20 emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
The main issue is that because the NzO emission factors used in the proposal were based
on the 1996 IPCC guidance for N20 accounting they were overestimating N20 emissions from
nitrogen fixing crops. As an update in 2006, IPCC guidance was changed such that biological
nitrogen fixation was removed as a direct source of N20 because of the lack of evidence of
significant emissions arising from the fixation process itself. IPCC concluded that the NzO
emissions induced by the growth of legume crops/forages may be estimated solely as a function
of the above-ground and below-ground nitrogen inputs from crop/forage residue. This change
effectively reduces the N20 emissions from nitrogen fixing crops like soybeans and nitrogen
fixing hay from the 1996 to 2006 IPCC guidance.
Therefore, as part of the update to new N20 emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the N20
emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2409
Organization: Tennessee Department of Agriculture
Comment:
The commenter also states that Administration (ElA) analysis that underestimates U.S. biodiesel
production, which reached levels of 690 million gallons in 2008. In addition, multiple state
policies and fleet requirements will be implemented between 2008 and 2022. These use
requirements will increase the baseline volume of biodiesel that will be used regardless of the
RFS2 program. Underestimating biodiesel volumes results in an overestimate of indirect land
use changes, which penalizes the biodiesel industry. EPA's approach also does not accurately
reflect increasing crop yields. The EPA analysis does not fully consider new fats and oils that
can increase the contribution biodiesel will make to the Biomass-based Diesel category in RFS2.
Lipid sources such as camelina, winter canola, and algae are not factored into the feedstock
supply. [[#2409.1 p.2-3]]
Our Response:
As noted in the preamble and additionally in the RIA, EPA has significantly updated its
soy-based biodiesel assessment for this final rule based on comments and new data. Regarding
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the issue of how underestimating the volume of biodiesel produced will impact the LCA, this
would not have a significant impact on the per-gallon LCA. We have also modeled the use of
waste oils, fats and greases and included these pathways as eligible for advanced biofuel credit.
Regarding other biofuel feedstock sources not modeled for the final rule (including camelina and
winter canola, EPA has adopted a petition process whereby biofuel producers can request EPA
review of new process technologies. Additionally, EPA has indicated its intention to
periodically update its analyses to reflect new data and information including the development of
new technologies.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2435
Organization: R.W. Heiden Associates LLC
Comment:
The commenter (2435) believes that EPA's characterization of the impact of land use changes
from soy biodiesel is inaccurate. In Section VI.C.D of the preamble, it is stated that "the impact
of any land-use change tends to be magnified with soybean biodiesel." The statement is justified
by asserting that soybeans have a low gallon-per-acre yield compared to corn ethanol. This
statement is simply false. For this to be true, soybean oil used for biodiesel must require
additional soybeans to be grown somewhere else in the world to replace the oil used for
biodiesel. Everywhere in the world, soybeans are grown primarily for the demand for their 80%
protein meal. By-products do not drive supply responses and soybean oil for biodiesel does not
drive planting decisions for farmers. If it did, then farmers would plant crops, other than
soybeans, that produce more oil per acre. This economic reality invalidates EPA's link between
use of soybean oil for biodiesel and magnified land use change impact. The commenter strongly
urges EPA to correct this statement in its final rule. [[Docket number 2435.1, p. 5]]
Our Response:
As stated in other responses, we believe the quoted statement is being misinterpreted.
This statement was a qualitative explanation for why land use changes projected by the
agricultural sector models in the NPRM analysis may have been larger than the corn ethanol land
use changes on a per BTU basis. We were not implying that soybeans were being planted
exclusively for soybean oil. The agricultural sector models take into account the fact that
soybeans are approximately 80% meal and 20% oil. Furthermore, the agricultural sector models
assume that farmers choose to plant soybeans based on the expected net returns associated with
the sum of both the oil and the meal ree streams. We believe this optimization approach
accurately represents the soybean production markets.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2549
Organization: Triton Energy LLC
Comment:
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The commenter (2549.1) believes that EPA inaccurately assesses the energy balance of
renewable diesel. (2549.1, p.3)
Our Response:
As part of the final rule we updated the energy use assumptions for biodiesel production
to be in line with the latest energy balance reports from USDA and the University of Idaho.
Therefore, the final rule assumes lower energy use for biodiesel production compared to the
proposal analysis.
7.3.2 Treatment of GHG Emissions Over Time
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2112
Organization: Biomass Rules, LLC
Comment:
The commenter (2112.1) noted that EPA does not correctly account for the influence of
time/discounting. For example, there is an absence of technical change in agriculture (yields,
efficiency, etc.). EPA has no appreciation for the influence of technical change in agriculture.
This phenomenon of constantly increasing output using fewer inputs is the essential
underpinning of economic growth. (2112.1, p.10) (See Docket Number 2112.1, pp.10-12 for
more discussion on this issue)
Our Response:
In the analysis for both the proposal and the final rulemaking, EPA does not show an
increase of input application rates for agricultural production. This is in keeping with historical
data from the USDA Economic Research Service as cited by the commenter, which shows crop
yields increasing over time, while agricultural input rates have remained relatively constant.
Although the rates remain level over time in the analysis, total fertilizer use does increase as a
result of an increased demand for renewable fuels. However, this is entirely due to increases in
crop production. For additional information on the agricultural modeling portions of the
analysis, please refer to Chapter 5 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1051
Organization: Aberdeen Development Corp.
Comment:
The commenter adds that GHG emissions from biodiesel derived from virgin vegetable oils
should be depreciated over 100 years, as EPA has proposed, rather than the 30 years some have
suggested. [[Docket number 1051.1, p. 3]]
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Our Response:
The commenter argues that since liquid fuels are likely to be required for more than 30
years, the benefits of biofuels should be counted for 100 years, not 30. EPA sought comment on
both 30 years and 100 years for assessing biofuel impacts. Based on comments received, EPA
deter mined it is most appropriate to limit the assessment time period to 30 years as a most
reasonable time frame after 2022 to expect soy-based biofuel to continue to be produced and
used in the U.S.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1045
Organization: National Council for Air and Stream Improvement, Inc. (NCASI)
Comment:
One commenter (1045.1) believes that EPA should consider recent model-based analyses of
climate response to carbon dioxide emissions (e.g., "The proportionality of global warming to
cumulative carbon emissions" by H.D. Matthews et al. Nature Vol 459, 11 June 2009, p. 829-
832). The commenter states that these analysis show that the amount of anthropogenic climate
warming at some future target date (e.g., 100 years from now) depends mainly on the cumulative
amount of emissions prior to the target date. In other words, the distribution of emissions in time
over the next 100 years doesn't matter - it is the total amount of emissions that is important. An
important implication of this result is that there should be no preference in policy or regulations
for an "early emission reduction strategy" (EERS) over a "delayed emission reduction strategy"
(DERS) if cumulative emissions are less for DERS than for EERS over the analysis period.
(1045.1, p. 1)
EPA's LCA results indicate that development and deployment of advanced biofuels with indirect
land use effects can be viewed as a DERS that leads to lower cumulative emissions over the long
term relative to an EERS' "do nothing". The commenter believes that in this context, there
should be no preference for "do nothing" and the appropriate discount rate is zero. The
commenter further believes that a time frame of 100 years is most appropriate because the GHG
mitigation benefits of replacing petroleum with advanced biofuels will accumulate throughout
the 21st century and beyond. (1045.1, p. 1)
A counter argument is that an EERS puts society on a trajectory to reduce cumulative emissions
over the next century. The commenter states that this counter argument is not relevant to EPA's
LCA analysis of advanced biofuels because the "do nothing" EERS in this case does not put
society on a trajectory to reduce cumulative emissions. (1045.1, p. 1)
Document No.: EPA-HQ-OAR-2005-0161-1050
Organization: American Council for Ethanol (ACE)
Comment:
The commenter (2101.1) generally supports EPA's approach to employ a 100 year time horizon
and a 2 percent discount rate if the Agency insists on proceeding with ILUC effects estimates.
(2101.1, P.4)
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Document No.: EPA-HQ-OAR-2005-0161-2119
Organization: National Sorghum Producers
Comment:
The commenter (2119.1) supports a 100 year time horizon with the proposed 2% discounting.
Using a 30 year time horizon with no discounting does not promote the growth of the renewable
fuels industry and does not further the goals of EISA. By using a 100 year time horizon with 2%
discounting, the industry can continue to grow and make sound investments for the future.
(2119.1, p.10)
Document No.: EPA-HQ-OAR-2005-0161-2154
Organization: ConocoPhillips
Comment:
The commenter (2154.1) favors the use of 30 years for averaging and a zero discount rate which
represents a more conservative and realistic approach than the 100 year, 2% discount factor
approach proposed by EPA. The shorter time period gives more weight to the known, more
immediate, effects of carbon release from clearing, burning and loss of soil sequestration while a
zero discount rate values future impacts the same as current impacts. (2154.1, p.8)
Our Response:
In the proposed rule, EPA highlighted two time periods of 30 years and 100 years for
consideration in GHG lifecycle analysis. The Agency discussed the relative advantages of these,
and other, time periods. The expert peer reviewers discussed a number of justifiable time periods
ranging from 13 to 100 years. The reviewers said that longer time frames, such as 100 years,
were only appropriate if the Agency used positive discount rates to value future emissions.
Almost all of the peer reviewers specifically said that a time frame of 20 to 30 years would be
justifiable based on the average life of a biofuel production facility. The reviewers and the
public commenters provided several arguments for the application of a 30 year time frame. A 30
year time period is appropriate because future emissions are less certain and more difficult to
value, so the analysis should be confined insofar as possible to the foreseeable future. Another
argument is that a near-term time horizon is consistent with the latest climate science that
indicates that swift and deep reductions of heat-trapping gasses are needed to avoid catastrophic
changes due to a warming climate. One of the reviewers said that while "there is no unassailable
basis for choosing a very specific timeframe" the expected average lifetime of a biofuel
production facility is the "most sensible anchor" for the choice of a timeframe. Alternatively, a
number of commenters argued that a 100 year time frame is the appropriate time period for GHG
lifecycle emissions analysis principally since this is the time period over which climate change
impacts are likely to occur.
Based upon the comments received from the peer review and public between after the
RFS2 proposal, EPA has decided to use a 30 year frame for assessing the lifecycle GHG
emissions. There are several reasons why the 30 year time frame was chosen. The use of the life
of a typical biofuel plant seems reasonable as a basis for the timeframe for assessing the GHG
emissions impacts of a biofuel. Also, the 30 year time frame focuses on GHG emissions impacts
that are more near term and, hence, more certain.
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EPA received numerous of comments on whether lifecycle GHG emissions should be
discounted through time. For example, as part of the EPA-sponsored peer review, while many of
peer reviewers thought that current GHG emissions reductions should be more strongly weighted
than future reductions, the peer reviewers were in general agreement that a discount rate should
only be applied to a monetary unit, rather than a physical unit, such as an GHG emission. One
peer reviewer suggested that it is scientifically justifiable to use discounting procedures for GHG
emissions if the procedure is broadened to capture more than the "time value of money" and
includes biophysical relationships such as the changing value of damages produced by
atmospheric GHG stocks, the persistence of GHGs in the atmosphere and the initial GHG stock
levels. Alternatively, another peer reviewer argued that the provision of EISA that deals with
lifecycle GHG emissions didn't call for an economic assessment, therefore discounting of GHG
emissions would not be appropriate. A majority of peer reviewers said that a 0% discount rate
would be appropriate if EPA uses a short time horizon (13-30 years) to assess GHG impacts. The
reasoning for not using discounting with shorter time periods is that for purposes of meeting the
EISA GHG thresholds, a GHG emission now is not significantly different than a GHG emission
30 years from now.
In addition to the comments received in the peer review, EPA also received many
comments in the public comment period. Commenters suggested that discounting is an essential
part of long term cost benefit analysis but it is not necessary in the context of the physical
aggregation of lifecycle GHG emissions called for in the EISA. Also, commenters expressed
concerns that any discount rate chosen by the Agency would be based upon relatively arbitrary
criteria.
After considering the comments on discounting from the peer review and the public, EPA
decided not to discount (i.e., use a 0% discount rate) GHG emissions due to the many issues
associated with applying an economic concept to a physical parameter. First, it is unclear
whether EISA intended lifecycle GHG emissions to be converted into a metric whose
underpinnings rest on principals of economic valuation. A more literal interpretation of EISA is
that EPA should consider only physical GHG emissions. Second, even if the principle of tying
GHG emissions to economic valuation approaches were to be accepted, there would still be the
problem that there is a lack of consensus in the scientific community about the best way to
translate GHG emissions into a proxy for economic damages. Some of the issues that arise are:
how to factor in the atmospheric residence times of GHG emissions in the atmosphere, and the
evolution of atmospheric concentrations of GHG emissions through time both with and without
renewable fuels. As mentioned previously, there is also a lack of consensus as to the appropriate
discount rate to apply to GHG lifecycle emissions streams through time. Also, since EPA has
decided to base threshold assessments of lifecycle GHG emissions on a 30 year time frame, the
issue of whether to discount GHG emissions is not as significant as if the EPA had chosen the
100 year time frame to assess GHG emissions impacts
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2154
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Organization: ConocoPhillips
Comment:
The commenter urges EPA to pre-empt states from establishing unique state requirements that
utilize differing life cycle analysis approaches than EPA. For example, California chose to use
30 year averaging in their modeling efforts. Should EPA use a 30 year rather than a 100 year
timeframe, it would help harmonize the California and EPA results (there would still be some
differences due to remaining differences in models used and other assumptions). (2154.1, p.9)
Our Response:
EPA is finalizing this rule under the authority of the CAA as amended by EISA. We do
not have additional pre-emption authority. As noted in the preamble and further in the RIA, EPA
has based its final rule LCAs on modeling impacts for 30 years, rather than 100 years.
7.3.2.1 Time Horizon
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) supports EPA's proposal to use a 100-year time frame, rather than the
30 year time frame. One hundred years is the most appropriate option for three major reasons:
(1) 100 years is a modest scope of time when the long-term impacts and atmospheric residence
of GHG emissions are considered; (2) given that the focus is on emissions from the land and land
is a permanent resource, a longer time period is justified; and (3) the 100-year time frame is
consistent with other EPA and international, including IPCC, analysis of climate change impacts.
(2320.1, p.61) [[See Docket Number 2329.1, pp.61-63 for a detailed discussion of this issue]]
Document No.: EPA-HQ-OAR-2005-0161-1001, EPA-HQ-OAR-2005-0161-1005, EPA-
HQ-OAR-2005-0161-1010, EPA-HQ-OAR-2005-0161-1011, EPA-HQ-OAR-2005-0161-1012,
EPA-HQ-OAR-2005-0161-1025, EPA-HQ-OAR-2005-0161-1029, EPA-HQ-OAR-2005-0161-
1043, EPA-HQ-OAR-2005-0161-2079, etal.
Organization: Kurzman Clean Tech Research & Kurzman Capital, LLC, Cotner
Consulting Services, CC Gas Systems, LLC, Atlantic BioFuels, Glenwood Farms, Law Offices
of David Wilcox, C.I.B., University of Georgia Engineering Outreach Service, AE Biofuels, Inc.,
etal.
Comment:
The commenters believe that the GHG emissions from biodiesel derived from virgin vegetable
oils should be depreciated over 100 years, as EPA has proposed, rather than the 30 years some
have suggested.
Document No.: EPA-HQ-OAR-2005-0161-2134
Organization: Union of Concerned Scientists
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Comment:
The commenter (2134.1) believes that the timeframe over which reduced emissions from
substituting biofuels for gasoline are credited should be no longer than 30 years and perhaps
even shorter because:
-The certainty with which the future production patterns for a given crop diminishes dramatically
for forecasts longer than 20-30 years. There are many other critical projections used to
determine what credit is appropriate, and many of these projections become highly speculative
more than two or three decades in the future.
-The damage already being done by climate change and the potential tipping points in the near
future require immediate action, and emissions reductions that accrue more than 20-30 years in
the future will not occur in time to address these concerns, while land use emissions may
exacerbate them. See attached document on the urgency of addressing climate change and
references therein.
-Between 20 and 30 years is consistent with typical lifecycle analysis based on projected facility
lifetime. (2134.1, p. 1)
The commenter also believes that the 30 year timeframe without discounting is simple and
adequate to achieve the goals of the RFS2. (2134.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) supports the use of the 100-year time period, consistent with the model
used by the Intergovernmental Panel of Climate Change (IPCC) and with the language contained
in EISA, whereby the global warming potential of GHG emissions is based on impacts over 100
years. (2146.1, p.6)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) supports the use of a 20 year time horizon, adding that it is virtually
impossible to accurately predict which biofuels will be economically viable 50 to 100 years from
now. [[Docket number 2233.2, p. 47]]
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) supports EPA's proposal to use a 100-year time frame for its lifecycle
analysis. The GHG emissions from biodiesel derived from virgin vegetable oils should be
depreciated over 100 years, as EPA has proposed (or an even longer timeframe commensurate
with the timeframe it takes to sequester the carbon in fossil fuels that biodiesel displaces). The
commenter believes that the lOOyear time frame is consistent with other EPA and international
analysis of climate change impacts [[Docket number 2249.2, p. 92]] [[See docket number
2249.2, pp. 92-95 for additional discussion of the commenter's support on this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2337
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RFS2 Summary and Analysis of Comments
Organization: California Air Resources Board
Comment:
The commenter (2337.1) urges the use of no more than a 30 year time horizon.
Very significant reductions in GHG emissions are needed in the near term to diminish the
potential for large and possibly irreversible damage from climate change. Achieving these
reductions requires approaches which promote fuels that provide earlier benefits.
Furthermore, it is very difficult to project the mix of fuels and production methods over the next
three decades, much less through the remainder of the century. The assumption that the
production techniques used for fuels supplied to meet the RFS will continue for many decades to
come is very uncertain. Requiring a shorter "payback" period is far more likely to produce net
benefits. (Page 3)
Document No.: EPA-HQ-OAR-2005-0161-2089
Organization: National Association of Clean Air Agencies (NACAA)
Comment:
The commenter (2089.1) urges EPA to rely on the 30-year analysis so that appropriate market
incentives are created for advanced biofuels that will result in true GHG benefits.
By highlighting in the proposal the results of its analysis of two of the time horizons- 30 years
and 100 years- the agency illustrates that biofuel-induced land use changes (i.e., the conversion
of land to produce renewable fuel feedstock) can result in overwhelming GHG emissions in the
near term with respect to certain renewable fuels, such as corn ethanol, sugarcane ethanol and
soy-based bio-diesel, and that it can take significant time (much more than a few years) for these
adverse emissions impacts to be negated by replacing petroleum with biofuels. Although the
GHG impacts under the 100-year scenario are far more positive, it is unrealistic to base
renewable fuel policies and regulations on such a long-term analysis. (Page 4)
Document No.: EPA-HQ-OAR-2005-0161-2112
Organization: Biomass Rules, LLC
Comment:
The commenter (2112.1) believes that the impacts of time used in the RFS2 proposed rule fall
woefully short of what is necessary to have an accurate picture of the impact of RFS over time.
(2112.1, p.13)
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) believes that shorter time periods give more weight to the known, more
immediate, effects of carbon release from clearing, burning, and loss of soil sequestration. Use
of longer time periods gives more weight to activities that are much more uncertain. The
commenter believes that the 100 year period is a poor choice because: 100 years is much longer
than the life of individual biofuel plants, there is considerable uncertainty about benefits in the
out years of a 100-year period and benefits are credited that occur well beyond the period
covered by the current regulation. A time period of 30 years or less and simple averaging is a
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pragmatic approach that ensures that anticipated GHG benefits from the regulation are received.
A thirty-year analysis period with no discounting is also consistent with recent CARB LCA.
(2124.1, p.47)
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters (2129.1) believe that the timeframe over which reduced emissions from
substituting biofuels for gasoline are credited should be no longer than 30 years and perhaps
even shorter. A 100 year time frame as proposed is impossible to justify. A 30-year time frame
is more appropriate for the following reasons:
-The certainty of the numerous assumptions and predictions that underlie the analysis diminish
drastically for projections out further than 20-30 years.
-The damage already being done by climate change and the potential tipping points in the near
future require immediate action, and emissions reductions that accrue more than 20-30 years in
the future will not occur in time to address these concerns, while near-term land use emissions
may exacerbate them.
- Between 20 and 30 years is consistent with typical lifecycle analysis based on projected facility
lifetime. (2129.1, pp.9-10)
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) favors the use of 30 years for averaging because the shorter time period
gives more weight to the known, more immediate, effects of carbon release from clearing,
burning, and loss of soil sequestration. The commenter also supports periodic reevaluations and
updates to the LCA (perhaps every three years) to adjust the analysis as technology and
modeling evolve. [[Docket number 2130.1, pp. 3-4 and 19]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) states that if EPA's objective is to increase the certainty of achieving
GHG emission reductions in the near term, then it should use the more conservative and shorter
30-year time period for the analysis. Shorter time periods give more weight to the known, more
immediate, effects of carbon release from clearing, burning, and loss of soil sequestration. Use
of longer time periods gives more weight to activities that are much more uncertain. The
commenter believes that the 100-year time period is a poor choice because: 100 years is much
longer than the life of individual biofuel plants, there is considerable uncertainty about benefits
in the out years of a 100-year time period, and benefits are credited that occur well beyond the
period covered by the current regulation. A longer time horizon also introduces a need for
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discounting emissions, but there is no clear rationale for selecting an appropriate discount rate.
[[Docket number 2393.1, pp. 50-51]]
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment:
The commenter (2408.1) supports EPA's 100 year averaging proposal as proposed. (2408.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2425
Organization: Petro Algae
Comment:
The commenter (2425) believes that the 100-year lifespan for the net present value (NPV) of
GHG emissions should not be used because there are too many uncertainties to allow such a
timeframe. Renewable fuels must show environmental benefits over a much shorter time
horizon, corresponding with a timeline that is reasonable and where land and future fuel demand
risks are controllable. [[Docket number 2425.1, pp. 5 and 8]]
Document No.: EPA-HQ-OAR-2005-0161-2435
Organization: R.W. Heiden Associates LLC
Comment:
The commenter (2435) believes that GHG emissions from biodiesel derived from virgin
vegetable oils should be depreciated over 100 years, as EPA has proposed, rather than the 30
years some have suggested. Historical data indicate that land converted to agricultural
production tends to continue in that purpose for at least a century. Additionally, dramatic
innovation is not occurring in the engine manufacturing industry in a way that suggests that
heavy duty liquid transportation fuels will no longer be needed in as little as 30 years, or any
remotely similar timeframe. [[Docket number 2435.1, pp. 4-5]]
Document No.: EPA-HQ-OAR-2005-0161-2639.1
Organization: Poet Ethanol
Comment:
In conclusion, there is no empirical support for the use of a limited, 20- to 30-year time frame to
measure the benefits of corn ethanol as an alternative fuel in lifecycle analyses for the RFS 2
proposal. The 100-year time horizon applied in the May 2009 Federal Register's analysis is far
more appropriate.
Document No.: EPA-HQ-OAR-2005-0161-2472
Organization: Valero Energy Corporation (Valero)
Comment:
The commenter (2472) supports EPA's 100 year treatment of emissions over time versus the 30
year alternative. [[Docket number 2072, p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-2474
Organization: North Carolina Department of Transportation
Comment:
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The commenter (2474) believes that EPA should use the proposed 100 year timeline vs. a 30
year timeline as some have suggested. (2474, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2516.1
Organization: Imperium
Comment:
Supports use of 100 year time frame. A 30-year production time frame for all fuels applied
across the board is too short a time-frame to compare accurately petroleum fuels that have
already been in the marketplace for 100 years with advanced biofuels that have yet to reach
commercialization
Document No.: EPA-HQ-OAR-2005-0161-2508
Organization: Environmental Working Group (EWG)
Comment:
The commenter (2508) encourages EPA to use a time horizon long enough to encompass all the
impacts from the 2022 level of production and resultant emissions from indirect land use change
(including all emissions from land clearing and sequestration foregone). (2508, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2512
Organization: Conservation International
Comment:
The commenter (2512.1) noted that specialists such as Winrock have noted that estimating
beyond 30 years is often not scientifically rigorous - i.e., with a 95% confidence interval. Carbon
policy currently allows for several options to choose from, allowing for a range of 20-60 years,
and use of a discount rate to account for uncertainty. (2512.1, p. 11)
Document No.: EPA-HQ-OAR-2005-0161-2354
Organization: Massachusetts Department of Environmental Protection
Comment:
The commenter (2354) recommends a time horizon of not more than 30 years. The commenter
the following reasons:
1. The expected benefits assume that biofuels will substitute for petroleum-based fuels. If
petroleum-based fuels and biofuels are eventually replaced instead by, for example, renewable
electricity, the long-term benefits of building biofuel production capacity will not be realized.
2. The reliance on expected long-term emissions reductions ignores the fact that we are
becoming increasingly concerned about the near-term stability of the climate system. Given this
concern, a policy that relies on the expectation that reductions in the far future (i.e., more than 30
years in the future) will compensate for significant emissions in the next several years does not
seem appropriate.
3. The analytic methods should reflect the normal tendency to value near-term benefits over
long-term benefits.
4. Land use changes caused by biofuels production will have impacts unrelated to climate change
that are significant, adverse, and irreversible. (2354.pdf, p.4)
Our Response:
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RFS2 Summary and Analysis of Comments
In the proposed rule, EPA highlighted two time periods of 30 years and 100 years for
consideration in GHG lifecycle analysis. The Agency discussed the relative advantages of these,
and other, time periods. The expert peer reviewers discussed a number of justifiable time
periods ranging from 13 to 100 years. The reviewers said that longer time frames, such as 100
years, were only appropriate if the Agency used positive discount rates to value future emissions.
Almost all of the peer reviewers specifically said that a time frame of 20 to 30 years would be
justifiable based on the average life of a biofuel production facility. The reviewers and the
public commenters provided several arguments for the application of a 30 year time frame. A 30
year time period is appropriate because future emissions are less certain and more difficult to
value, so the analysis should be confined insofar as possible to the foreseeable future. Another
argument is that a near-term time horizon is consistent with the latest climate science that
indicates that swift and deep reductions of heat-trapping gasses are needed to avoid catastrophic
changes due to a warming climate. One of the reviewers said that while "there is no unassailable
basis for choosing a very specific timeframe" the expected average lifetime of a biofuel
production facility is the "most sensible anchor" for the choice of a timeframe. Alternatively, a
number of commenters argued that a 100 year time frame is the appropriate time period for GHG
lifecycle emissions analysis principally since this is the time period over which climate change
impacts are likely to occur.
Based upon the comments received from the peer review and public between after the
RFS2 proposal, EPA has decided to use a 30 year frame for assessing the lifecycle GHG
emissions. There are several reasons why the 30 year time frame was chosen. The use of the life
of a typical biofuel plant seems reasonable as a basis for the timeframe for assessing the GHG
emissions impacts of a renewable fuel. Also, the 30 year time frame focuses on GHG emissions
impacts that are more near term and, hence, more certain.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter also believes that EPA's analysis of improvement in plant and agricultural
efficiency underestimates GHG emission from biofuel facilities before 2022 and introduces
uncertainty through use of projected factors instead of validated data. The commenter believes it
would be better to base the analysis on a near-term date using actual data and update as needed if
data indicates improvement. [[Docket number 2130.1, p. 19]]
Our Response:
We continue to focus our final rule analyses on 2022 results for two main reasons. First,
it would require an extremely complex assessment and administratively difficult implementation
program to track how biofuel production might continuously change from month to month or
year to year. Instead, it seems appropriate that each biofuel be assessed a level of GHG
performance that is constant over the implementation of this rule, allowing fuel providers to
anticipate how these GHG performance assessments should affect their production plans.
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Second, it is appropriate to focus on 2022, the final year of ramp up in the required volumes of
renewable fuel as this year. Assessment in this year allows the complete fuel volumes specified
in EISA to be incorporated. This also allows for the complete implementation of technology
changes and updates that were made to improve or modeling efforts. For example, the inclusion
of price induced yield increases and the efficiency gains of DCs replacement are phased in over
time. Furthermore, these changes are in part driven by the changes in earlier years of increased
biofuel use.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
[ [ The following is from Growth Energy's late supplemental comment document (2635.1)] ]
The commenter (2383) believes adopting the recommendations offered in some public comment
submissions to address uncertainty by arbitrarily truncating the analytic horizon or applying
higher discount rates would be especially unfortunate in the broader context of policies intended
to address climate change and other environmental challenges for which the effects are long-term
and uncertain. [[Docket number 2635.1, p. 3]]
Our Response:
In the proposed rule, EPA highlighted two time periods of 30 years and 100 years for
consideration in GHG lifecycle analysis. The Agency discussed the relative advantages of these,
and other, time periods. The expert peer reviewers discussed a number of justifiable time periods
ranging from 13 to 100 years. The reviewers said that longer time frames, such as 100 years,
were only appropriate if the Agency used positive discount rates to value future emissions.
Almost all of the peer reviewers specifically said that a time frame of 20 to 30 years would be
justifiable based on the average life of a biofuel production facility. The reviewers and the
public commenters provided several arguments for the application of a 30 year time frame. A 30
year time period is appropriate because future emissions are less certain and more difficult to
value, so the analysis should be confined insofar as possible to the foreseeable future. Another
argument is that a near-term time horizon is consistent with the latest climate science that
indicates that swift and deep reductions of heat-trapping gasses are needed to avoid catastrophic
changes due to a warming climate. One of the reviewers said that while "there is no unassailable
basis for choosing a very specific timeframe" the expected average lifetime of a biofuel
production facility is the "most sensible anchor" for the choice of a timeframe. Alternatively, a
number of commenters argued that a 100 year time frame is the appropriate time period for GHG
lifecycle emissions analysis principally since this is the time period over which climate change
impacts are likely to occur.
Based upon the comments received from the peer review and public between after the RFS2
proposal, EPA has decided to use a 30 year frame for assessing the lifecycle GHG emissions.
There are several reasons why the 30 year time frame was chosen. The use of the life of a typical
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biofuel plant seems reasonable as a basis for the timeframe for assessing the GHG emissions
impacts of a renewable fuel. Also, the 30 year time frame focuses on GHG emissions impacts
that are more near term and, hence, more certain.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter notes that one of the key issues in EPA's analysis is the time horizon employed
in the analysis. The commenter believes it is useful to define two different horizons. One is the
Project Horizon, the period over which the biofuel in question will be produced and hence
generate emission reductions by displacing gasoline. The second is the Impact Horizon, the
period over which emissions will be projected and analyzed. Although EPA's draft analysis
identified these two types of time horizons, in practice its calculations treated them as being
identical. The commenter believes that there is value in distinguishing the two types of horizons
and that the two generally will not be equal in length. [[Docket number 2635.1, p. 5]] [[See
docket number 2635.1, pp. 5-6 for further discussion of project and impact horizons]]
Our Response:
For the reasons discussed above, the Agency decided to use a 30 year frame for assessing
lifecycle GHG emissions. We also did not set different time horizons for the project and impact
horizons. In our analysis we adjust the mass values of the GHGs to account for their relative
global warming potential (GWP). Specifically, we use the 100-year GWPs developed by the
IPCC and published in the Second Assessment Report. Therefore, the climate impacts of each
emission are, in effect, accounted for over 100 years.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter adds that the measure of radiative forcing proposed by O'Hare et al. - referred to
as "fuel warming potential" or FWP - suffers from a major flaw as a result of the fact that its
fixed horizon differentially truncates the tracking of GHGs emitted at different times. The FWP
approach in O'Hare et al. applies a uniform end date in evaluating the radiative forcing of
different emission streams. As a result, later emission reductions from biofuels receive relatively
little weight simply because their impacts are considered for many fewer years than are the
upfront emission increases from ILUCs. This distortion is particularly acute when the horizon
used to compute the FWP measure is relatively short.
The commenter suggests that the problems caused by this kind of arbitrary truncation can be
addressed in various ways. One is to use a very long evaluation horizon so that the impact of the
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truncation effect is minimized. Another is to adopt a uniform horizon for how long the effects of
emissions are tracked and evaluated from the time they are emitted; e.g., the radiative forcing
effect is measured for a fixed number of years after the emissions occur, whether those emissions
occur in year 1 or year 21. [[Docket number 2635.1, pp. 6-7]] [[See docket number 2635.1, pp.
6-7 for further discussion of Fuel Warming Potential]]
Our Response:
In the proposed rule the EPA sought comment on metrics to account for GHG releases
over time. One of the methods that EPA specifically sought comment on was the fuel warming
potential (FWP) method proposed by O'Hare et al. Two of the expert reviewers agreed that the
FWP could be an appropriate metric. However, they also said that the current FWP method has
limitations which should be corrected before it is applied. One of the strongest arguments for the
FWP method is that it is more amenable than 100-year GWP for use with non-zero discount
rates. This is because the 100-year GWP is based on undiscounted impacts, so applying non-
zero discount rates to GWP-weighted emissions can introduce accounting inconsistencies.
However, these potential problems are avoided because EPA is using a 0% discount rate to
evaluate GHG emissions over time.
Based on the comments received, EPA has not adopted the FWP method in our analysis
for this rule. We determined that aggregating GWP-weighted emissions is the best available for
this rulemaking.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
Projections of emissions from indirect land use change (ILUC) should incorporate estimates of
potential credits that will occur after production of the biofuel in question ceases. Estimating
such credits is necessary to provide a complete accounting of emissions changes due to the use of
biofuels. Such credits would include cases in which the land freed following the end of
production of a particular biofuel may be used for purposes that otherwise would require ILUCs
and cause increases in emissions of sequestered GHGs.
Presumably commenters that object to estimating post-production impacts would call for
truncating the analysis because of uncertainty. However, uncertainty should be handled
explicitly, not used as a reason to arbitrarily exclude uncertain effects. The commenter notes that
if major uncertainty were used as a criterion for screening out effects, emission increases
associated with ILUCs would not be considered at all given what we understand are the
substantial uncertainties associated with their calculation.
Our Response:
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In the proposed rule EPA sought comment on whether two separate time horizons should
be established, i.e., the project horizons and the impact horizon. EPA also sought comment on
whether we should account for emissions or credits that could occur between the end of the
project horizon and the end of the impact horizon. For the reasons discussed above EPA decided
to use a 30 year frame, and not to distinguish between the project and impact time frames. One
result of this decision is that we did not evaluate potential emissions or credits that would occur
after production of the biofuel in production ceases.
In the proposed rule EPA sought commenter on whether sequestration from land
reversion following the end of production of a particular biofuel should be considered in our
analysis. A majority (3) of the expert peer reviewers responded that reversion should not be
counted. Two of the peer reviewers offered conditional support: one advised EPA to consider
land reversion impacts only if it had reason to believe that croplands dedicated to biofuels would
be reverted; the other suggested that EPA try different scenarios to test if land reversion has a
significant effect.
The reviewers that objected to counting post-production land reversion offered a number
of justifications to support their position. All of them said that there is no reason to assume that
land would in fact revert following biofuel production. Instead, it is more likely that land would
be kept in crop production for food or that the land would be developed. One of the reviewers
recommended that EPA consider post-project salvaged carbon as part of a second independent
land use change that occurs once the biofuel project terminates. Another reviewer noted that
even if land were reverted, the benefits of sequestration would be attributed to the grazing,
forestry, or conservation payment activities associated with the new land use, not to biofuel
production.
Dr. Fargione interpreted EISA to mandate reduced emissions during the project time
frame, and therefore concluded that emission reduction calculations should be based only on land
use change and foregone sequestration that occur during the project time frame. Indeed, EISA
specifies that lifecycle GHG emissions shall include the "full fuel lifeycle, including all stages of
fuel and feedstock production and distribution," but the Act does not specifically mention post-
project activities as part of the lifecycle. Thus, Dr. Fargione argued, the only accounting
required following the project time horizon is based on fate of the emissions already released
(and their radiative forcing and residence time in the atmosphere). According to Dr. Fargione,
one potential exception to this would be if EPA were to include long-lived forest products, as
these emissions are not dependent on assumptions about future land use change. (As discussed
in preamble Section V, EPA has determined that long-lived wood products from international
land conversion are not a significant factor).
Based on comments from the expert reviewers and the public, and for the reasons
discussed above, EPA decided that 30 years is a reasonable time frame over which to evaluate
lifecycle GHG emissions. As part of this determination, EPA decided that the most reasonable
approach is to expect that a particular biofuel pathway should achieve GHG reductions
commensurate with the required reduction thresholds, as specified in EISA, during a 30 year
time period, and not to give credit for potential post-project sequestrations.
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7.3.2.2 Discount Rate
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) opposes the use of any discount rate higher than zero percent. The
commenter noted that EPA is not conducting a risk assessment or a valuation of benefits, it is
attempting to assess physical emissions attributed to biofuel production. A discount rate is an
economic consideration that is more appropriate when considering the value of the benefits of a
regulation. While peer reviewers largely agreed that there should be no discount rate for shorter
time frames, there is insufficient support to require a higher discount rate for the 100-year time
frame. (232.1, p.63)
Document No.: EPA-HQ-OAR-2005-0161-1001, EPA-HQ-OAR-2005-0161-1005, EPA-
HQ-OAR-2005-0161-1010, EPA-HQ-OAR-2005-0161-1011, EPA-HQ-OAR-2005-0161-1012,
EPA-HQ-OAR-2005-0161-1025, EPA-HQ-OAR-2005-0161-1029, EPA-HQ-OAR-2005-0161-
1043, EPA-HQ-OAR-2005-0161-1049, etal.
Organization: Kurzman Clean Tech Research & Kurzman Capital, LLC, Cotner
Consulting Services, CC Gas Systems, LLC, Atlantic BioFuels, Glenwood Farms, Law Offices
of David Wilcox, C.I.B., University of Georgia Engineering Outreach Service, Prairie Pride, Inc.
Comment:
The commenters believe that EPA should eliminate the arbitrary 2 percent discount rate applied
to the carbon payback of biofuel use, adding that discounting is an economic consideration and
should not be applied to physical emissions.
Emissions will cost more in the future and not less, so discounting them to say they are worth
less in the future is likely incorrect.
Document No.: EPA-HQ-OAR-2005-0161-2516.1
Organization: Imperium
Comment:
Because Congress asked EPA to assess physical amounts not to render a valuation estimate, EPA
should not use a discount rate.
Document No.: EPA-HQ-OAR-2005-0161-1051
Organization: Aberdeen Development Corp.
Comment:
The commenter (1051) urges EPA to eliminate the arbitrary 2 percent discount rate applied to the
carbon payback of biofuel use. Discounting is an economic consideration and should not be
applied to physical emissions.
Emissions will cost more in the future and not less, so discounting them to say they are worth
less in the future is incorrect. Biofuel production has shown a steady trend of decreasing carbon
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RFS2 Summary and Analysis of Comments
emission and increasing carbon sequestration and payback for land conversion. [[Docket number
1051.1, p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2357
Organization: Iowa Biodiesel Board
Comment:
The commenter states that EPA should eliminate the arbitrary 2 percent discount rate applied to
the carbon payback of biofuel use. Discounting is an economic consideration and should not be
applied to physical emissions. Emissions will cost more in the future and not less.
Document No.: EPA-HQ-OAR-2005-0161-1987
Organization: Cornell University
Comment:
The commenter attached an academic paper [[1987]] argues that lifecycle analysis that assumes
0% discount rates and a constant price of carbon are biased and distort policy recommendations.
Specifically, the paper says, "LCA is based on GHG balance calculations, i.e., comparing overall
GHG emission with overall GHG uptake over periods of time (e.g., 30 years), and such balances
interpreted as economic benefits or costs only if (i) the (environmental) price of carbon is
constant over time and (ii) the social discount rate (SDR) is zero. Both conditions are
inappropriate: the price of carbon increases over time as long as atmospheric GHG concentration
increases (with its ensuing climate change induced threats); and a positive (though not
necessarily constant) discount rate is required to determine intergenerational tradeoffs when
economic growth is expected to persist (even at a reduced rate). Existing sustainability standards
(with or without iLUC) are therefore biased and distort the ensuing policy recommendation. In
this paper we develop a cost-benefit test for biofuel production which relaxes these assumptions
and allows for a changing carbon price and a positive SDR, thereby offering a genuinely
sustainable standard for biofuel production."
Document No.: EPA-HQ-OAR-2005-0161-2079
Organization: AE Biofuels, Inc.
Comment:
The commenter (2079.1) believes that EPA should eliminate the arbitrary 2 percent discount rate
applied to the carbon payback of biofuel use. Discounting is an economic consideration and
should not be applied to physical emissions. (2079.1, p.9)
Document No.: EPA-HQ-OAR-2005-0161-2435
Organization: R.W. Heiden Associates LLC
Comment:
The commenter (2435) believes that EPA should eliminate the arbitrary 2 percent discount rate
applied to the carbon payback of biofuel use. Discounting is an economic consideration and
should not be applied to physical emissions. Emissions will cost more in the future and not less,
so discounting them to say they are worth less in the future is incorrect. Biofuel production has
shown a steady trend of decreasing carbon emission and increasing carbon sequestration and
payback for land conversion. [[Docket number 2435.1, p. 5]]
Document No.: EPA-HQ-OAR-2005-0161-2466
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Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Comment:
The commenter (2466) suggests that use of physical science metrics such as actual quantities of
climate forcing gasses in the atmosphere weighted by global warming potential, or cumulative
radiative forcing should be used to evaluate emissions over time instead of use of a constant,
somewhat arbitrary, value (e.g., 2%). (2466.1.pdf, p.10)
Document No.: EPA-HQ-OAR-2005-0161-2472
Organization: Valero Energy Corporation (Valero)
Comment:
The commenter (2472) supports EPA's 2% discount rate treatment of emissions over time versus
the 0% discount rate alternative. [[Docket number 2072, p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-2466
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Comment:
The commenter (2466) suggests that use of physical science metrics such as actual quantities of
climate forcing gasses in the atmosphere weighted by global warming potential, or cumulative
radiative forcing should be used to evaluate emissions over time instead of use of a constant,
somewhat arbitrary, value (e.g., 2%). (2466.1.pdf, p.10)
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) favors the use of 30 years for averaging and a zero discount rate as a
more conservative approach. The shorter time period gives more weight to the known, more
immediate, effects of carbon release from clearing, burning and loss of soil sequestration while a
zero discount rate values future impacts the same as current impacts. The commenter believes
100 years of assumed use for a given biofuel and its pathway is simply assuming too much about
future decisions beyond our control. (2124.1, p.24)
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
Comment:
The commenters (2129.1) noted that while discounting is an essential part of long term cost
benefit analysis, it is not necessary in the context of the physical aggregation called for in the
RFS, especially over a relatively short time frame. Longer timeframes introduce a great deal of
unnecessary complexity and uncertainty, without meaningfully improving the accuracy or
completeness of the result. The commenters believe that the discounting method proposed by
EPA is inadequate because the proposed 2% discounting rate is a risk free rate that does not
reflect, among other things, the significant risk that future climate benefits through avoided
emissions may fail to materialize. The 30 year timeframe without discounting is simple and
adequate to achieve the goals of EISA. (2129.1, p.10)
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Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) favors the use of a zero discount rate because it values future impacts the
same as current impacts. [[Docket number 2130.1, pp. 3-4]]
Document No.: EPA-HQ-OAR-2005-0161-2134
Organization: Union of Concerned Scientists
Comment:
The commenter (2134.1) believes that discounting is not necessary or appropriate in the context
of the physical aggregation called for in the RFS2 for the following reasons.
-Discounting is appropriately applied to economic rather than physical quantities. It is not
obvious that the economic impact of emissions is constant over time, especially over 100 years,
so the proposed discounting approach is inadequate.
-The discounting rate being discussed is a risk free rate that does not reflect, among other things,
the real risk that future climate benefits through avoided emissions fail to materialize.
-There is no technical consensus or guidance in the law on the appropriate social cost of carbon
to use in the regulation and questions of intergenerational equity and etc. need not be introduced
into what is ostensibly a technical analysis.
- A short time frame makes the result less sensitive to the discount rate, so these difficult
questions can more reasonably be neglected by limiting the analysis to a relatively short time
frame. (2134.1, pp.1-2)
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) believes that it is unclear that accounting methodologies can or should
be used to evaluate impact of physical elements such as greenhouse gases. The commenter
recommends a 0% rate be applied by EPA. (2146.1, p.6)
Document No.: EPA-HQ-OAR-2005-0161-2634
Organization: Citizen (sample of 155 comment letters received from mass comment
campaign sponsored by Prairie Pride Inc.)
Comment:
The commenter (2634) notes that, "EPA should eliminate the arbitrary 2 percent discount rate
applied to the carbon payback of biofuel use. Discounting is an economic consideration and
should not be applied to physical emissions. Emissions will cost more in the future and not less,
so discounting them to say they are worth less in the future is likely incorrect." (2634 p. 2)
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Comment:
The commenter (2157) notes that because Congress asked EPA to assess physical amounts not to
render a valuation estimate, EPA should not use a discount rate. Discounting is an economic
consideration and should not be applied when attempting to assess physical emissions. A use of
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a discount rate in this case in unwarranted. It is not clear whether a market-based rate of time
preference is appropriate in this case. (2157 p. 92-93). Further discussion and various scenarios
are discussed on (2157 93-95).
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) supports the use of a scientifically determined discount rate to value the
relative importance of current versus future reductions in GHG emissions; however, EPA uses a
very unscientific argument to support the selection of the arbitrary 2% rate. In addition, the
commenter argues that it is inconsistent for EPA to propose using a discount factor for a 100
year time period and then to propose that no discount factor be used for shorter time periods.
The commenter adds that if EPA incorporates the use of a discount rate, it must determine this
rate on a scientific basis. Using an appropriate climate change model would give EPA the
information needed to calculate the effective discount rate. [[Docket number 2233.2, pp. 47-48]]
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) does not support use of a discount rate; Congress asked EPA to assess
physical amounts, not to render a valuation estimate. The commenter urges EPA to eliminate the
arbitrary 2 percent discount rate applied to the carbon payback of biofuel use. As EPA's analysis
shows, the choice of a discount rate can have significant effects on the results of a lifecycle
analysis. A discount rate, however, is a policy assessment of costs and benefits, which is
inapplicable here. EPA is not being asked to "value" emissions reductions over time, but to
assess what those reductions actually will be. Discounting is an economic consideration and
should not be applied when attempting to assess physical emissions. A use of a discount rate in
this case is unwarranted. [[Docket number 2249.2, p. 95]] [[See docket 2249.2, pp. 95-98 for a
comprehensive discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2474
Organization: North Carolina Department of Transportation
Comment:
The commenter (2474) believes that EPA should eliminate the arbitrary 2 percent discount rate.
(2474, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2466
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Comment:
The commenter (2466) suggests that use of physical science metrics such as actual quantities of
climate forcing gasses in the atmosphere weighted by global warming potential, or cumulative
radiative forcing should be used to evaluate emissions over time instead of use of a constant,
somewhat arbitrary, value (e.g., 2%). (2466.1.pdf, p.10)
Document No.: EPA-HQ-OAR-2005-0161-2491
Organization: International Council on Clean Transportation (ICCT)
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Comment:
The commenter (2491) believes that the EPA is correct in recognizing that not all GHG released
over different time periods are equal. The GHG released now will likely to have more impact on
climate change than GHG released after 50 or 100 years. Therefore, it is a scientifically good
approach to discount GHG emissions if we consider a policy horizon of more than 50 years.
However, due to future uncertainties regarding how biomass will be grown and processed, the
complexity involved in GHG estimations for land use changes (both direct and indirect) and
possible policy changes, the commenter believes that the lOOyear time frame may not be realistic
for estimating GHG emissions. It might be better to use a SOyear time period with 0% discount
rate for calculating WTW GHG emissions of biofuels. [[Docket number 2491.1, p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2466
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Comment:
The commenter (2466) suggests that use of physical science metrics such as actual quantities of
climate forcing gasses in the atmosphere weighted by global warming potential, or cumulative
radiative forcing should be used to evaluate emissions over time instead of use of a constant,
somewhat arbitrary, value (e.g., 2%). (2466.1.pdf, p.10)
Document No.: EPA-HQ-OAR-2005-0161-2508
Organization: Environmental Working Group (EWG)
Comment:
The commenter (2508) recommends that EPA lay out those emissions as accurately as possible
on their true time path, adjust them for their climate change potential, and discount those
adjusted emissions back to present terms using a non-zero discount rate that reflects the
uncertainty in the estimate of the damages. (2508, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2466
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Comment:
The commenter (2466) suggests that use of physical science metrics such as actual quantities of
climate forcing gasses in the atmosphere weighted by global warming potential, or cumulative
radiative forcing should be used to evaluate emissions over time instead of use of a constant,
somewhat arbitrary, value (e.g., 2%). (2466.1.pdf, p.10)
Document No.: EPA-HQ-OAR-2005-0161-2512
Organization: Conservation International
Comment:
The commenter (2512.1) noted that discount rates provide a level of assurance to all calculations
and allow for uncertainty and risk. The VCS standard includes a table for discount rates
according to land use type and low, medium or high risk. (2512.1, p. 12)
Document No.: EPA-HQ-OAR-2005-0161-2466
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Comment:
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The commenter (2466) suggests that use of physical science metrics such as actual quantities of
climate forcing gasses in the atmosphere weighted by global warming potential, or cumulative
radiative forcing should be used to evaluate emissions over time instead of use of a constant,
somewhat arbitrary, value (e.g., 2%). (2466.1.pdf, p.10)
Document No.: EPA-HQ-OAR-2005-0161-2357
Organization: Iowa Biodiesel Board
Comment:
The commenter states that EPA should eliminate the arbitrary 2 percent discount rate applied to
the carbon payback of biofuel use. Discounting is an economic consideration and should not be
applied to physical emissions. Emissions will cost more in the future and not less.
Our Response:
EPA received numerous of comments on whether GHG lifecycle emissions should be
discounted through time. For example, as part of the EPA-sponsored peer review, while many of
peer reviewers thought that current GHG emissions reductions should be more strongly weighted
than future reductions, the peer reviewers were in general agreement that a discount rate should
only be applied to a monetary unit, rather than a physical unit, such as an GHG emission. One
peer reviewer suggested that it is scientifically justifiable to use discounting procedures for GHG
emissions if the procedure is broadened to capture more than the "time value of money" and
includes biophysical relationships such as the changing value of damages produced by
atmospheric GHG stocks, the persistence of GHGs in the atmosphere and the initial GHG stock
levels. Alternatively, another peer reviewer argued that the provision of EISA that deals with
lifecycle GHG emissions did not call for an economic assessment, therefore discounting of GHG
emissions would not be appropriate. A majority of peer reviewers said that a 0% discount rate
would be appropriate if EPA uses a short time horizon (13-30 years) to assess GHG impacts.
The reasoning for not using discounting with shorter time periods is that for purposes of meeting
the EISA GHG thresholds, a GHG emission now is not significantly different than a GHG
emission 30 years from now.
In addition to the comments received in the peer review, EPA also received many
comments in the public comment period. The commenters suggested that discounting is an
essential part of long term cost benefit analysis but it is not necessary in the context of the
physical aggregation of lifecycle GHG emissions called for in the EISA. Also, commenters
expressed concerns that any discount rate chosen by the Agency would be based upon relatively
arbitrary criteria.
After considering the comments on discounting from the peer review and the public, EPA
decided not to discount (i.e., use a 0% discount rate) GHG emissions due to the many issues
associated with applying an economic concept to a physical parameter. First, it is unclear
whether EISA intended lifecycle GHG emissions to be converted into a metric whose
underpinnings rest on principals of economic valuation. A more literal interpretation of EISA is
that EPA should consider only physical GHG emissions. Second, even if the principle of tying
GHG emissions to economic valuation approaches were to be accepted, there would still be the
problem that there is a lack of consensus in the scientific community about the best way to
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translate GHG emissions into a proxy for economic damages. Some of the issues that arise are:
how to factor in the atmospheric residence times of GHG emissions in the atmosphere, and the
evolution of atmospheric concentrations of GHG emissions through time both with and without
renewable fuels. As mentioned previously, there is also a lack of consensus as to the appropriate
discount rate to apply to GHG lifecycle emissions streams through time. Also, since EPA has
decided to base threshold assessments of lifecycle GHG emissions on a 30 year time frame, the
issue of whether to discount GHG emissions is not as significant as if the EPA had chosen the
100 year time frame to assess GHG emissions impacts
EPA is finalizing its assessments based on an analysis assuming 30 years of continued
emission impacts with a 0 discount rate.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2466
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Comment:
The commenter (2466) agrees with the idea of an expert peer review regarding the issues
surrounding time horizons and discount rates. (2466.1.pdf, p.10)
Our Response:
A peer review of this specific issue was undertaken between the proposal and final rule.
We have incorporated the comments received from the peer reviewers into our final rule
analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter (2383) believes EPA's "Discount" analysis greatly undervalues the GHG
reductions provided by biofuels. Dr. W. Kip Viscusi, one of the nation's foremost economists,
analysis shows that the reductions in the present value of the longer-term GHG reductions
produced by RFS2 are partially, and in some cases completely, offset once proper account is
taken of the escalating social cost of carbon. The upshot is that the "discount rates" shown in the
NPRM, which range from two to seven percent, would all need to be adjusted downward after
accounting for the social cost of carbon. Those adjustments would readily place the majority of
current U.S. corn ethanol biorefineries in compliance with the 20 percent GHG emissions
reduction targets specified for new corn biorefineries in section 211 (o) (2) (A) (I), if the nominal
"discount rate" is set at three percent or below three percent being the discount rate applied by
EPA in other recent GHG analyses. If EPA does not make the adjustments in "discount rates"
recommended by Dr. Viscusi, it must present its reasons for not doing so. If EPA accepts the
need for adjustments to reflect the future social cost of carbon, but believes a different valuation
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than the default valuation proposed by Dr. Viscusi should be used, it also needs to explain its
reasoning, and it must permit public comment on its alternate selection. [[Docket number 2383.1,
p. 52]] [[See docket number 2383.1, p. 52-53 and 2359.1 for further discussion of this issue.]]
Our Response:
As part of the EPA-sponsored peer review we received numerous of comments on
whether GHG lifecycle emissions should be discounted through time, while many of peer
reviewers thought that current GHG emissions reductions should be more strongly weighted than
future reductions, the peer reviewers were in general agreement that a discount rate should only
be applied to a monetary unit, rather than a physical unit, such as an GHG emission. One peer
reviewer suggested that it is scientifically justifiable to use discounting procedures for GHG
emissions if the procedure is broadened to capture more than the "time value of money" and
includes biophysical relationships such as the changing value of damages produced by
atmospheric GHG stocks, the persistence of GHGs in the atmosphere and the initial GHG stock
levels.
The social cost of carbon is an economic valuation of a physical quantity of GHG
emissions. As discussed in preamble Section V, in this final rule EPA is not applying economic
concepts to physical GHG emissions for the purposes of determining which biofuels comply
with the lifecycle GHG thresholds specified in EISA. Therefore, we did not include the social
cost of carbon in our lifecycle GHG emissions calculations.
After considering the comments on discounting from the peer review and the public, EPA
decided not to discount (i.e., use a 0% discount rate) GHG emissions due to the many issues
associated with applying an economic concept to a physical parameter. First, it is unclear
whether EISA intended lifecycle GHG emissions to be converted into a metric whose
underpinnings rest on principals of economic valuation. A more literal interpretation of EISA is
that EPA should consider only physical GHG emissions. Second, even if the principle of tying
GHG emissions to economic valuation approaches were to be accepted, there would still be the
problem that there is a lack of consensus in the scientific community about the best way to
translate GHG emissions into a proxy for economic damages. Some of the issues that arise are:
how to factor in the atmospheric residence times of GHG emissions in the atmosphere, and the
evolution of atmospheric concentrations of GHG emissions through time both with and without
renewable fuels. As mentioned previously, there is also a lack of consensus as to the appropriate
discount rate to apply to GHG lifecycle emissions streams through time. Also, since EPA has
decided to base threshold assessments of lifecycle GHG emissions on a 30 year time frame, the
issue of whether to discount GHG emissions is not as significant as if the EPA had chosen the
100 year time frame to assess GHG emissions impacts.
7.4 GHG Thresholds
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0953
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Organization: Great River Energy
Comment:
The commenter (0953) noted that in the examples illustrated in EPA-420-F-09-024 "EPA
Lifecycle Analysis of Greenhouse Gas Emissions from Renewable Fuels", it appears that the
closest proxy to determining the net benefit of CHP is comparing "Corn Ethanol - dry mill
biomass" at 3996/18% Lifecycle GHG reduction with "Corn Ethanol - dry mill biomass with
CHP" at 47%/26% Lifecycle GHG reduction. The commenter is disheartened that the net CHP
benefit is so small. There are virtually no technology improvements that can be made to
overcome the indirect land use penalty associated with conventional ethanol and soy biodiesel.
The commenter believes that neither of these examples would qualify as an "Advanced" (50%
reduction threshold) or "Cellulosic" biofuel (60% reduction threshold). (p.l)
Our Response:
As noted in the preamble and the regulations for this final rule, EPA has identified a
number of technically feasible pathways for both corn ethanol and biodiesel which will allow the
fuel to meet or exceed the 20% and 50% thresholds, respectively, for these products. We note
that under EISA, ethanol from corn starch is not eligible for compliance with the advanced
biofuel standard. A number of pathways have also been determined as meeting the cellulosic
biofuel standard of 60%.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1000
Organization: Environmental Consultant
Comment:
The commenter (1000) believes that Section VI of the preamble for the proposed regulation
incorrectly states that EISA establishes GHG thresholds for each category of renewable fuels.
(P.I)
Our Response:
EPA disagrees with the commenter. As explained in the NPRM and the final rule, EISA
requires that the lifecycle GHG emissions of a qualifying renewable fuel 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.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2316
Organization: University of Minnesota
Comment:
The commenter [[2316]] states: My second comment concerns the appropriate analytical time
horizon. I propose that the most appropriate duration to use is 15 years, or the regulatory duration
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of the Renewable Fuel Standard in the Energy Independence and Security Act of 2007 (EISA).
The proposed 30-year horizon is fixed to an assumed biorefinery production lifetime, but
ultimately the impact of EISA is determined by the period over which it provides financial
incentive to build and operate biorefineries, not by how long such facilities may stand. Any
decisions to build and run biorefineries have been and will be made by investors with the
knowledge that recovery of any capital and operating costs from EISA payments will occur prior
to or during 2022. Likewise, any carbon debt associated with land conversion, which itself
comes at a cost to society, should be attributed to EISA's impact on decisions to build and
operate biorefineries, which will all be made prior to 2022. [[2316.1 p.l]]
Our Response:
In the proposed rule, EPA highlighted two time periods of 30 years and 100 years for
consideration in GHG lifecycle analysis. The Agency discussed the relative advantages of these,
and other, time periods. The expert peer reviewers discussed a number of justifiable time
periods ranging from 13 to 100 years. The reviewers said that longer time frames, such as 100
years, were only appropriate if the Agency used positive discount rates to value future emissions.
Almost all of the peer reviewers specifically said that a time frame of 20 to 30 years would be
justifiable based on the average life of a biofuel production facility. The reviewers and the
public commenters provided several arguments for the application of a 30 year time frame. A 30
year time period is appropriate because future emissions are less certain and more difficult to
value, so the analysis should be confined insofar as possible to the foreseeable future. Another
argument is that a near-term time horizon is consistent with the latest climate science that
indicates that swift and deep reductions of heat-trapping gasses are needed to avoid catastrophic
changes due to a warming climate. One of the reviewers said that while "there is no unassailable
basis for choosing a very specific timeframe" the expected average lifetime of a biofuel
production facility is the "most sensible anchor" for the choice of a timeframe. Alternatively, a
number of commenters argued that a 100 year time frame is the appropriate time period for GHG
lifecycle emissions analysis principally since this is the time period over which climate change
impacts are likely to occur.
Based upon the comments received from the peer review and public between after the
RFS2 proposal, EPA has decided to use a 30 year frame for assessing the lifecycle GHG
emissions. There are several reasons why the 30 year time frame was chosen. The use of the life
of a typical biofuel plant seems reasonable as a basis for the timeframe for assessing the GHG
emissions impacts of a renewable fuel. Also, the 30 year time frame focuses on GHG emissions
impacts that are more near term and, hence, more certain.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2364
Organization: Tyson Foods, Inc.
Comment:
The commenter (2364.1) supports reducing the GHG threshold for biomass-based diesel and
advanced biofuel to 40 percent. (2364.1, p.5)
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Document No.: EPA-HQ-OAR-2005-0161-2365
Organization: Neste Oil Holding, Inc
Comment:
The commenter (2365.1) noted that there is still no scientifically undisputable methodology for
precisely quantifying the ILUC effect of biofuels. The commenter believes that EPA should
accommodate these uncertainties by reducing the GHG reduction requirement for advanced
biofuels and biomass-based diesel from 50% to 40% - as the Congress intended. (2365.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2099
Organization: Honeywell International, Inc.
Comment:
The commenter (2099.1) believes that EPA should maintain the statutory definitions of lifecycle
greenhouse gas emissions thresholds in order to promote the second generation biofuels market
and facilitate global trade. (2099.1, p.22) (See Docket Number 2099.1, pp.22-23 for more
discussion on this issue)
The commenter also believes that due to the sufficient feedstock available to meet the EISA
standards, EPA must not lower the GHG emission performance threshold in the categories of
advanced biofuel and biomass-based diesel. (2099.1, p.23) (See Docket Number 2099.1, pp.23-
24 for more discussion on this issue)
Document No.: EPA-HQ-OAR-2005-0161-2079
Organization: AE Biofuels, Inc.
Comment:
The commenter (2079.1) believes that all of the GHG Reduction thresholds should be reduced by
the maximum amount that the proposed rule provides for, or 10%, for all fuels in the RFS2.
(2079.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2549
Organization: Triton Energy LLC
Comment:
The commenter (2549.1) supports lowering the requirement to 40% until the GHG emission
science, including indirect land use change (ILUC) is more fully developed and the biofuel
industry is better established. (2549.1, p.7)
Our Response:
EPA is not finalizing any adjustments to the lifecycle GHG thresholds as the Agency has
determined that such adjustments are not necessary given the threshold determinations explained
in the final rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2425
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Organization: Petro Algae
Comment:
The commenter (2425) encourages EPA to establish a default list of fuels meeting the GHG
thresholds based on a 2022 performance assessment. If a company does not agree with the LCA
factor, they should have the right to submit a specific LCA for their fuel/operation. This process
will accelerate the acceptance and issuance of RINs and will avoid a large level of LCA reviews
by EPA. [[Docket number 2425.1, p. 6]]
Our Response:
EPA provides in the final rulemaking a petition process by which those fuel pathways
that have not yet been modeled EPA modeling can be evaluated to determine compliance with
one or more of the renewable fuel categories.
We are establish a process whereby a biofuel producer can petition the Agency to also
consider additional new energy saving production facility designs or co-product pathways as
eligible pathways in addition to those specifically listed in today's regulations. We expect the
petitioner will describe the alternative production facility technology applied and supply data
establishing the amount of energy savings that will result from the use of the alternative
technology. Similarly, for alternative co-products, we will expect the petitioner to document the
energy required to produce the co-product and the intended use of the co-product (e.g., DCS as a
replacement for corn and soy meal as animal feed is a current example). EPA will use the data
supplied via the petition and technically evaluate whether the information is sufficient and allows
EPA to determine the new pathways would indeed qualify. If we make such a technical
determination, then the fuel producer will be allowed to generate RINs for fuel produced using
such additional pathway (s). It will not be necessary to update the regulations to specifically list
such additional pathways prior to their being used for this program.
As technology develops, new feedstocks emerge, and information becomes available, we
anticipate including emerging pathways and new feedstocks in periodic regulatory updates to this
final rule. Including these new feedstock and fuel pathways will involve the same petition
process as described above. Biofuel producers who would like to get their fuel or feedstock
included would have to provide information on their process as outlined above. Furthermore if a
new feedstock is being utilized, information regarding that feedstock would also be required.
Information would include at a minimum, type of feedstock and source, data on market value of
the feedstock and current uses if any. Other information required would include input
requirements of chemicals (fertilizer, pesticides, etc.) and energy use by type of energy. Yield
information would also be required for both the current situation as well as anticipated changes
over time.
For inclusion of new fuel and feedstock pathways, it may be important to seek public
comment on the modeling. We would therefore intend to utilize the annual rulemaking process
already planned for establishing the renewable fuel standards applicable for the following year,
to also provide an opportunity to propose and finalize the inclusion of these emerging pathways
on our list of eligible biofuels, as appropriate.
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RFS2 Summary and Analysis of Comments
See section V.C of the Preamble describing the petition process details.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2512
Organization: Conservation International
Comment:
The commenter (2512.1) agrees that the proposed thresholds for lifecycle GHG emissions
reductions are reasonable, although the commenter feels that biofuels produced at existing plants
should meet the same minimum requirements, rather than being "grandfathered" in. The
commenter recommends thresholds be re-evaluated periodically and improved over time.
(2512.1, p.2)
Our Response:
As stipulated by EISA, renewable fuel from existing facilities is exempt from the
lifecycle GHG emission reduction threshold of 20% up to a baseline volume for that facility that
will be established at the time of registration. As discussed in preamble Section II.B.3, the
exemption from the 20% GHG threshold applies only to renewable fuel that is produced from
facilities which commenced construction on or before December 19, 2007, or in the case of
ethanol plants that use natural gas or biodiesel for process heat, on or before December 31, 2009.
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. As specified by
EISA, if EPA revises the analytical methodology for determining lifecycle greenhouse gas
emissions, any such revision will apply to renewable fuel from new facilities that commence
construction after the effective date of the revision.
7.4.1 Advanced Biofuel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2110
Organization: Chevron
Comment:
The commenter (2110.1) believes that the final rule must provide appropriate incentives for
advanced biofuel development while maintaining responsible environmental standards for those
fuels. (2110.1,p.4)
The ommenter recommended that EPA be flexible in its LCA so as to recognize the evolving
science.
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Our Response:
EPA has indicated in the preamble its intention to continue to develop improvements to
lifecycle assessment of biofuels and to periodically update its analyses, consistent with EISA.
Additionally, EPA has provided a petition process whereby biofuel producers can request EPA to
evaluate specific technologies or operating processes that distinguish their biofuel production
LCA GHG impacts from those already considered by EPA. These new technologies or operating
processes can then receive an alternative GHG threshold assessment, if appropriate.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2119
Organization: National Sorghum Producers
Comment:
The commenter (2119.1) is in favor of leaving the advanced biofuel threshold at the 50% GHG
reduction level. The key to the RFS2 is to promote the use of alternative feedstocks that reduce
GHG. By lowering the level, it would incentivize other feedstocks. However, if the indirect land
use change penalty lowers grain or sweet sorghum feedstock GHG reduction levels below 50%,
then the advanced biofuels threshold should be lowered to 40% as allowed by EISA. (2119.1,
p.5)
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) does not support the proposed adjustment in the advanced biofuel GHG
reduction threshold to allow sugar ethanol to quality as advanced biofuel. [[Docket number
2130.1, p. 9]]
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) supports the reduction of the advanced biofuels threshold to 40%, but
adds that by proposing to lower the threshold level to only 44%, EPA implies far more modeling
accuracy than there really is. [[Docket number 2233.2, p. 53]]
Our Response:
EPA is not finalizing any adjustments to the lifecycle GHG thresholds as the Agency has
determined that such adjustments are not necessary given the threshold determinations explained
in the final rule.
What Commenters Said:
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Document No.: EPA-HQ-OAR-2005-0161-2348
Organization: StateLine Cooperative
Comment:
The commenter (2348) believes that EPA should recalculate the GHG intensity value for
advanced fuel given the assumption that 70 percent will come from crop residue. EPA should
also refigure the water quality impacts resulting from greater erosion and water quality reduction
when crop residues are removed. (2348, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2363
Organization: Ag Processing Inc.
Comment:
The commenter (2363) requests that EPA recalculate the GHG intensity value for advanced fuel
given the assumption that 70% will come from crop residue. [[Docket number 2363.1, p. 7]]
[[See docket number 2363.1, pp. 3-4 for further discussion of this issue.]]
Our Response:
EPA has done an analysis of advanced and cellulosic fuels from a number of different
feedstocks including crop residues. We have developed specific GHG lifecycle results for the
different types of feedstocks separately, including one for crop residues vs. other feedstocks used
for cellulosic or advanced biofuel production.
We do not project significant levels of residue removal in the regions modeled as part of
our water quality analysis so their impacts are not considered.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2374
Organization: Amyris Biotechnologies, Inc. (Amyris)
Comment:
The commenter (2374) notes that legislatively, EPA has the authority to adjust the thresholds for
each class of Renewable Biofuels by up to 10% and believes that EPA should use this authority
to actively qualify as many biofuels for each category. [[Docket number 2374.1, p. 2]]
Our Response:
EPA is not finalizing any adjustments to the lifecycle GHG thresholds as the Agency has
determined that such adjustments are not necessary given the threshold determinations explained
in the final rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
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Comment:
The commenter (2383) states that if EPA attributes any significant indirect emissions impact to
conventional biofuels, it must set a 10 percent threshold for corn ethanol from new facilities.
The statute does not limit EPA's authority in the manner suggested by the NPRM. EPA is not
directed to adjust the 20 percent requirement to allow only "at least a few of the best" corn
ethanol processes at new biorefineries to participate in the program. To the contrary, the statute
mandates that adjustments "shall" enable participation by a range of different natural gas fired
corn-based ethanol plants. [[Docket number 2383.1, p. 54]] [[Also see docket number 2381.1,
declaration of Lautt.]]
The commenter also states that there are no grounds to treat ethanol from sugarcane as an
advanced biofuel. The NPRM proposes to relax the requirement for 50 percent emissions
reductions from sugarcane but this analysis is improper in numerous respects. [[Docket numbers
2383.1, p. 55-56, 2204.1, declaration of James M. Lyons, and 2380.1, p. 2]]
Our Response:
EPA is not finalizing any adjustments to the lifecycle GHG thresholds as the Agency has
determined that such adjustments are not necessary given the threshold determinations explained
in the final rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) states that the GHG reduction thresholds contained in the RFS2 mandates
create a powerful incentive to produce low carbon fuels, but believes the agency should establish
additional incentives to encourage production of low carbon fuels, beyond threshold levels, by
establishing a lifecycle GHG reduction RIN multiplier. The commenter believes that the current
proposal lacks incentives for biofuel producers and regulated parties to develop and utilize
biofuel with greater lifecycle GHG reduction characteristics. The commenter provides
guidelines to establish incentives in the form of a GHG reduction RIN multiplier. [[Docket
number 2393.1, pp. 3-4]]
Our Response:
EPA has adopted regulations which differentiate fuels on, among other things, the basis
of their compliance with the thresholds as determined by full lifecycle analysis as directed by
EISA. All fuels achieving a threshold receive the same credit for generating RINs under this
program. It is not clear whether EPA would have the authority under section 211 (o) to adopt the
kind incentive program suggested by the commenter. In any case, it would not be appropriate at
this time to do so, in part because it would call for making more precise determinations of
lifecycle GHG emissions than the single determination of compliance or non-compliance with
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the Act's GHG thresholds. The lifecycle analyses performed by EPA for this rulemaking were
not intended to serve that function.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
EPA has proposed to adjust the required reduction threshold for "advanced biofuels" from 50%
to 44%. The commenter states that the 44% reduction value is based on the 100-year time
period; on the 30-year time period this fuel pathway would not qualify. The same value is also
based on the 2% discount rate, without which the fuel pathway would qualify as a 61%
reduction. [[Docket number 2393.1, p. 56]]
Our Response:
EPA has adopted final rules which include determining compliance assuming 30 years of
GHG emission impacts, with no discount. Based on this analysis, a number of fuel pathways
meet the 50% GHG threshold for advanced biofuels. Therefore we have determined it is
unnecessary to adjust the threshold.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated
Comment:
The commenter (2511.1) supports reducing the GHG threshold of the advanced category to 40%.
When correct NOx credits are applied, and EPA reduces the advanced threshold to 40-44%,
soybean oil biodiesel appropriately qualifies as an advanced biofuel and for the biomass based
diesel category. (2511.1, p.5)
Our Response:
EPA is not finalizing any adjustments to the lifecycle GHG thresholds as the Agency has
determined that such adjustments are not necessary given the threshold determinations explained
in the final rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2472
Organization: Valero Energy Corporation (Valero)
Comment:
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The commenter (2472) supports making the hurdle for advanced biofuel a 40% reduction versus
a 50% reduction. [[Docket number 2072, p. 2]]
Our Response:
EPA is not finalizing any adjustments to the lifecycle GHG thresholds as the Agency has
determined that such adjustments are not necessary given the threshold determinations explained
in the final rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter also believes that the definition of Advanced Biofuel needs to be
expanded where it states: "...as long as it meets the proposed 40 - 44% GHG emission reduction
as it relates to the gasoline, diesel fuel or jet fuel that it displaces or replaces." The commenter
also supports the idea of reducing the GHG reductions emissions to 40% to allow sugar cane
ethanol to be categorizes as an Advanced Biofuel.
Our Response:
EPA has not finalized adjustments to the Advanced Biofuel threshold since it has
determined several pathways are capable of meeting the 50% threshold and therefore no
adjustment is necessary.
7.4.2 Biomass-based Diesel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1001, EPA-HQ-OAR-2005-0161-1005, EPA-
HQ-OAR-2005-0161-1010, EPA-HQ-OAR-2005-0161-1011, EPA-HQ-OAR-2005-0161-1012,
EPA-HQ-OAR-2005-0161-1025, EPA-HQ-OAR-2005-0161-1029, EPA-HQ-OAR-2005-0161-
1043, etal.
Organization: Kurzman Clean Tech Research & Kurzman Capital, LLC, Cotner
Consulting Services, CC Gas Systems, LLC, Atlantic BioFuels, Glenwood Farms, Law Offices
of David Wilcox, C.I.B., University of Georgia Engineering Outreach Service, et al.
Comment:
The commenters noted that the U.S. biodiesel industry has been steadily growing over the past
several years with 690 million gallons in production in 2008. Existing feedstock sources are
already available to meet this production level. As such, no land use changes, and therefore no
significant emissions from those changes, can be associated with existing production. All
lifecycle analyses, including EPA's without international land use changes, show well over 50
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percent reduction in emissions. The commenters also noted that there is ample support for EPA
to grandfather existing facilities by deeming these facilities to be in compliance with the 50
percent reduction requirement.
The commenters also noted that fairness and good policy dictate that EPA's regulations should
not undermine investments made prior to the implementation of RFS2 regulations. EPA's
proposed rule does not meet these standards. By eliminating substantial portions of U.S.
biodiesel production from the Biomass-based Diesel category, EPA has undermined existing
investments and has created disincentives for continued investment in U.S. biodiesel production
and distribution.
Our Response:
Based on analyses conducted for this final rule, EPA has determined that several
pathways are available for the biodiesel industry which meet or exceed the advance biofuel GHG
threshold. As detailed in the preamble and RIA, EPA has used the most up to date models, data
and other information in its LCA. These indicate that indirect impacts including international
land use impacts are significant and should appropriately be included in accordance with good
practice and the requirements of EISA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2000
Organization: Galva Holstein Ag, LLC.
Comment:
The commenter [[2000]] states that EPA should reduce the biomass-based diesel fuel GHG
threshold to 40 percent, and recommends that for biomass-based diesel not meeting the advanced
GHG reduction threshold, an energy content-based factor of 1.5 be continued, [[see docket#2000
p. 1]]
Document No.: EPA-HQ-OAR-2005-0161-2079
Organization: AE Biofuels, Inc.
Comment:
The commenter (2079.1) believes that the existing production of biodiesel should be deemed to
meet the 50 percent greenhouse gas emission reduction requirement for biomass-based diesel.
(2079.1, p.6) (See Docket Number 2079.1, p.6-7 for a detailed discussion of this issue)
Document No.: EPA-HQ-OAR-2005-0161-2087
Organization: Ag Partners
Comment:
The commenter [[2087]] states that EPA should reduce the biomass-based diesel fuel GHG
threshold to 40 percent, and recommends that for biomass based diesel not meeting the advanced
GHG reduction threshold, an energy content based factor of 1.5 be continued, [[see docket#2087
p. 1]]
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Document No.: EPA-HQ-OAR-2005-0161-2106
Organization: Endicott Biofuels II, LLC
Comment:
The commenter (2106) suggests that reducing the GHG level to 40% on a temporary basis only
since blending with other feedstocks will be difficult for EPA to measure and demonstrate
compliance. [[Docket number 2106.1, p. 5]]
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) does not support an adjustment to the biomass-based diesel minimum
GHG emissions reduction threshold, nor any of the averaging approaches outlined by EPA as a
mechanism to qualify biodiesel that would otherwise not qualify as biomass-based diesel. If the
final lifecycle analysis does not qualify vegetable oil-sourced biodiesel as biomass-based diesel,
EPA should not resort to averaging techniques to artificially qualify such biofuels. The
commenter believes that EPA should initiate a general waiver process to reduce the biomass-
based diesel requirement to the level of available biodiesel or renewable diesel that does qualify
as biomass-based diesel, taking into account geographical and seasonal factors. (2124.1, p.26)
If EPA proceeds with an averaging approach to qualify vegetable oil-sourced biodiesel as
biomass-based diesel, the commenter urges EPA to utilize a n averaging mechanism that allows
both producers and obligated parties to average the appropriate ratio of RINs. (2124.1, p.26)
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) does not support an adjustment to the biomass-based diesel GHG
reduction threshold, nor any of the averaging approaches outlined by EPA as a mechanism to
qualify biodiesel that would otherwise not qualify as biomass-based diesel [[Docket number
2130.1, p. 9]] [[See docket number 2130.1, pp. 9-10 for further discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) believes that if the final EPA analysis of the GHG reduction of any
biodiesel pathway fails to meet the 50 Percent GHG reduction requirement for Biomass-based
Diesel and Advanced Biofuel, then the Agency should use its authority as provided by Congress
and adjust the 50 percent GHG reduction requirement downward to 40 percent to ensure U.S.
biodiesel can meet the Biomass-based Diesel and Advanced Biofuel requirements, as intended
by Congress. [[Docket number 2249.2, p. 12]]
The commenter notes that the Proposed Rule restricts feedstock for Biomass-based Diesel to
only animal fats and restaurant grease and points out that vegetable oils account for
approximately 60 percent of the feedstock that is available to meet the RFS2 Biomass based
Diesel targets, and disqualifying these sustainable oils from the program will significantly inhibit
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RFS2 Summary and Analysis of Comments
the domestic industry's ability to meet the RFS2 volume goals established by law. [[Docket
number 2249.2, p. 13]]
[[See docket number 2249.2, p. 13 for additional discussion of this issue]]
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) notes that EPA and EIA both predict that there will not be sufficient
quantities of fuels to meet the 50%, or even the 40% thresholds; however, 40% is the lowest
level that EPA can set for the biomass-based diesel threshold. The commenter supports this
revised level. [[Docket number 2233.2, p. 54]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
EPA has asked for comment on whether to adjust the required reduction threshold for "biomass-
based diesel" from 50% to 40%. Additionally, EPA has proposed to allow producers to mix
biomass-based diesel fuels with varying reduction levels in order to meet a yearlong average of a
40% reduction from the product. The commenter opposes the use of averaging to enable
currently available bio-mass based diesel fuels "fit" the EISA requirement. The commenter
expresses support for lowering of the threshold to 40%, provided that EPA determines that there
are no feedstock pathways that can meet the 50% threshold. However, EPA does not have the
authority to allow averaging. E PA instead should immediately waive future volumes of
biomass-based diesel to levels that do not exceed those possible to be produced from biomass
suitable to meet the allowable GHG threshold for advanced biofuels.
Document No.: EPA-HQ-OAR-2005-0161-2420
Organization: Magellan Midstream Partners
Comment:
The commenter (2420.1) is concerned that EPA's proposed GHG threshold for biodiesel
produced from soybean oil will not qualify under the biomass-based diesel category. The
commenter noted that by limiting the market potential for soy-based biodiesel, EPA may be
promoting drivability problems for unsuspecting diesel motorists particularly in the northern tier
of the United States. This action may also eliminate a number of operating biodiesel plants from
participating in the biomass based diesel program which will make it difficult for obligated
parties to meet their RVO. The commenter urges EPA to carefully consider the technical data
submitted by affected parties to determine if soy-based biodiesel will meet the biomass based
diesel standard. (2420.1, pp.2-3)
Document No.: EPA-HQ-OAR-2005-0161-2425
Organization: Petro Algae
Comment:
Referring to the proposed 50% LCA threshold for biomass-based diesel that can be modified on
a case-by-case basis and the adjustments that can be made to this threshold only if it is
determined the threshold is not commercially feasible for fuels made from a variety of feedstock
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material, the commenter (2425) requests this definition to be clarified and explains that for
certain smaller facilities, the economies of scale do not allow for the most energy efficient
production rate. These facilities are still critical in the production of biomass-based diesel and
should be allowed leniency with respect to the LCA threshold. [[Docket number 2425.1, p. 5]]
Document No.: EPA-HQ-OAR-2005-0161-2474
Organization: North Carolina Department of Transportation
Comment:
The commenter (2474) believes that EPA should adjust the 50 percent reduction requirement for
biomass-based diesel to 40 percent. (2474, p.2)
Our Response:
Based on analyses conducted for this final rule, EPA has determined that several
pathways are available for the biodiesel industry which meet or exceed the advance biofuel GHG
threshold. Therefore there is no need to reduce the 50% threshold. Additionally, we are not
allowing averaging of biodiesel from vegetable oils with those produced from waste oils, fats
and greases as this is not necessary to allow compliance with the biomass-based diesel GHG
performance threshold.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2174
Organization: Illinois Soybean Association
Comment:
The commenter (2174) believes that the 50% GHG level that biodiesel must meet is arbitrary.
Existing ethanol plants are exempt and do not have to meet any GHG reduction threshold. The
statute does not require EPA to include international indirect emissions in their lifecycle analysis
for biofuels. (2174, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2348
Organization: StateLine Cooperative
Comment:
The commenter (2348) believes that EPA should reduce the biomass-based diesel fuel GHG
threshold to 40 percent. The commenter also recommends that for biomass based diesel not
meeting the advanced GHG reduction threshold, an energy content based factor of 1.5 be
continued. (2348, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2363
Organization: Ag Processing Inc.
Comment:
The commenter (2363) supports reducing the biomass-based diesel fuel GHG threshold to 40%.
[[Docket number 2363.1, p. 7]] [[See docket number 2363.1, p. 2 for further discussion of this
issue.]]
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Our Response:
The 50% threshold was established by Congress. EPA disagrees with commenter's
interpretation of the statute. EPA's rationale and methodology is explained in detail in the final
rule.
7.5 Assignments of Pathways to Renewable Fuel Categories
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2112
Organization: Biomass Rules, LLC
Comment:
The commenter (2112.1) believes that EPA can not replicate the archaic technology matrix used
in this proposed rule for the dozens of technologies using dozens of feedstocks that are being
developed. (2112.1, p. 13)
Our Response:
As detailed in the preamble and RIA, EPA has used up to date models, data and other
information to assess the GHG impacts of biofuels. Throughout the development of EPA's
lifecycle analysis, the Agency has employed a collaborative, transparent, and science-based
approach. EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. We believe we have in a technically appropriate manner,
implemented the mandates of EISA
For the final rule, EPA has adopted a petition process whereby biofuel producers can
request EPA review of new process technologies. Additionally, EPA has indicated its intention
to periodically update its analyses to reflect new data and information including the development
of new technologies.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2016
Organization: Malaysian Palm Oil Board (MPOB)
Comment:
The commenter (2016.1) is thankful that EPA allows biofuels from foreign sources such as
Malaysia. The commenter noted that on page 24917, it was stated that the agriculture crops for
renewable transportation fuels will mostly be grown in the U.S. The report alludes that whatever
little imports will mainly be for the three advanced biofuel categories but not the residual
renewable fuels category which has lower GHG savings requirements. The commenter requests
that the contribution from foreign sources be reflected in this category. Tables V.A. 1-1 and
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V.A. 2-1 should therefore also show the contribution from other non advanced biofuel other than
corn ethanol. (2016.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2361
Organization: Indonesian Palm Oil Commission
Comment:
The commenter (2361) is concerned about the statement that the agriculture crops for renewable
transportation fuels will mostly be grown in the U.S. The report alludes that the imports will
mainly be for the three advanced biofuel categories but not the residual renewable fuels category
which has lower GHG savings requirements. It was predicted that all non-advanced biofuel will
be from corn ethanol (U.S.) and the commenter (2361) requests that the contribution of non
advanced biofuel from other countries allowed to be imported into the U.S. (2361.pdf, p.l)
Our Response:
The lifecycle analysis of fuels is based on the characteristics of the fuel pathway rather
than whether it is domestically produced or imported. The economic models project that a large
volume of feedstocks will be produced in the U.S.; however, domestic and imported fuels are
eligible for all four renewable fuel categories if they meet the lifecycle greenhouse gas reduction
thresholds and the definition of renewable biomass. EPA also provides a petition process for
fuel pathways not yet analyzed.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that EPA should promote the use of landfill gas, which may be
transported through common carrier pipelines. EPA should include the use of methane from
animal wastes and landfill gas, including methane transported through common carrier pipelines,
as part of the pathways in the final rule implementing the RFS2 program. (2329.1, p. 99-100)
Our Response:
As part of the final rulemaking EPA has included a pathway for biogas from landfills,
sewage and waste treatment plants, and manure digesters to qualify as an advanced biofuel.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2471
Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter (2471.1) noted that if in finalizing the rule EPA changes a particular biofuel's
qualification in a manner that in essence "demotes" its "D-code" assignment, EPA should
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RFS2 Summary and Analysis of Comments
provide notice and allow an opportunity to comment before finalizing. The commenter believes
that EPA should also allow for notice and comment before finalizing a new pathway assessment
or revised assessment that demotes the previously-assigned "D" code for a fuel. (2471.1, p.l 1)
Our Response:
Any updates to the rulemaking and fuel's D-code assignment will go through a proposal
and final rulemaking process. Furthermore, any changes to a fuel pathway D-code would only
apply to new facilities, constructed after the change, all existing facilities would be grandfathered
under the original D-code rating.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2376
Organization: Country Sanitation Districts of Los Angeles County
Comment:
The commenter [[2376]] states that waste-to-fuel advanced technologies such as those listed
above have potential to produce significant volume of renewable fuels that could help EPA
achieve the RFS2 volume mandates of 36 billion gallons of renewable fuel by 2022. However,
the emerging waste-to-fuel industry needs additional incentives to improve the economic
feasibility of such projects. Credit trading systems for renewable fuels such as the trading
system in RFS will help the emerging waste to- fuel industry gain economic stability and
promulgate long-term investments. Therefore, we again request that waste-derived renewable
fuels be included in RFS2 in order to participate in the credit trading system. [[2376.1 p.6]]
Our Response:
As discussed in more detail in Section II.B.4.d of the Preamble, EPA has determined that
the biogenic portion of post recycled MSW is eligible to produce renewable fuel and will largely
be made up of cellulosic material. Therefore biofuel made from this waste-derived material will
qualify as cellulosic biofuel.
Furthermore, separated food and yard wastes, including food and beverage wastes from
food production and processing are another category of waste product that would not have any
land-use change impact. These waste products can be used as feedstock for advanced biofuel
production or cellulosic biofuel production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
The commenter (1044) states the Agency failed to assign Algae and a "D" code for Algae in the
proposed rule. The commenter requests clarification from EPA as to how it considers this
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feedstock. In other words is this considered virgin plant oil? Or will it have its own LCA? How
will water consumption factor into the equation? The commenter also states that the Agency
fails to recognize the diversity of the Biomass Feedstocks for Biomass Based Diesels that are
grown in the U.S. as rotation crops as a traditional farming practice. More importantly, most of
these feedstocks can not be grown or are not grown in areas of global concern and should not be
subjected to ILUC of those areas. The premise one acre of renewable biomass that is grown in
the U.S. will force another acre in the rain forests of the world to vanish for the purposes of
renewable fuels are severely misunderstood! Recent studies conducted by Greenpeace clearly
identified the actual destruction of rainforest is a direct result poor livestock management
practices. In addition, EPA should recognize, as required in EISA, the value of consulting the
Department of Agriculture regarding those farming practices to accurately depict the LCA of
those operations. [[Docket number 1044.1, pp 9-10]]
Our Response:
For the final rule, EPA has determined that biodiesel produced from algae oil will comply
with the advance biofuel GHG performance threshold and included a specific pathway in the
rulemaking for biodiesel from algae.
EPA also provides D-codes for secondary annual crops planted on existing crop land -
such as winter cover crops. These secondary crops are assumed to have no land use impact since
they are planted on land otherwise used for primary crop production. GHG emissions would
only be associated with growing, harvesting and transporting the secondary crop and then
processing into biofuel. See Preamble Section V.C for details.
We have not specifically modeled other biomass based diesel feedstocks. However, EPA
has adopted a petition process, explained in preamble Section V, whereby biofuel producers can
request EPA review of new feedstocks and process technologies. Additionally, EPA has
indicated its intention to periodically update its analyses to reflect new data and information
including the development of new feedstock sources.
In conducting the lifecycle assessment of biofuels for this rulemaking EPA worked
closely with USDA and the models used incorporated USDA data in terms of farming practices.
7.5.1 Assignments for Pathways Subjected to Lifecycle Analyses
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2075
Organization: Sustainable Oils, LLC (SO)
Comment:
The commenter (2075) requests that the Final Rule make a distinction between feedstocks that
are currently in large cultivation (corn, soybeans, canola, sugar, and timber) and pre-commercial
dedicated energy crops. [[Docket number 2075.1, p. 3]]
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RFS2 Summary and Analysis of Comments
The commenter notes that EPA proposes to assign various combinations of feedstock, fuel type,
and production process to one of four categories of fuels eligible for compliance under RFS2.
Or, alternatively, it will determine that the combination is not eligible due to a failure to meet
required thresholds. Thus the commenter believes that the NPRM is inherently backward-
looking and is based on the existence of historical data related to prior biofuel cultivation and
processing technologies. Camelina would be lumped in with soybean-based biodiesel. [[Docket
number 2075.1, pp. 2-3]]
Additionally, EPA plans to update its analyses at three-to-five year intervals. The Proposed Rule
may be adequate for existing commercialized biofuels with historical data sets and known
technologies. However, innovative next generation biofuels simply will fly under the EPA's
radar. They will not be designated as compliant renewable fuels from the point of view of this
NPRM. Next generation feedstocks will not be developed and commercialized in a timely
manner. If the EPA process for approving new pathways is not timely, and a three-to-five year
interval is not timely, the commenter believes that regulatory uncertainty will lethally inhibit the
substantial private investment needed to create the improved feedstocks which, in turn, are
needed to create a commercially viable biofuel industry. Contrary to Congressional intent, this
NPRM will stifle innovation. [[Docket number 2075.1, p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2245
Organization: Illinois Corn Growers Association, et al.
Contributors to this comment letter include: Iowa Corn Growers Association, Iowa Soybean
Association, Illinois Soybean Association, Illinois Renewable Fuels Association, Kentucky
Soybean Association, Minnesota Soybean Growers Association, Missouri Corn Growers
Association, Missouri Soybean Association, Monsanto, the National Corn to Ethanol Research
Center, Nebraska Corn Board, Nebraska Soybean Association, Novozymes, Ohio Soybean
Association, South Dakota Soybean Association, University of Illinois Chicago, Energy
Resources Center, University of Illinois Champaign-Urbana plant breeding, animal nutrition and
agronomy, DuPont, Ethanol Technologies, John Deere, and the U.S. Grains Council
Comment:
The commenters (2245.1) believe that EPA needs to define a mechanism by which the
designated fuel pathways are routinely updated to ensure they reflect the most current GHG
comparisons. (2245.1, p.30)
Document No.: EPA-HQ-OAR-2005-0161-2365
Organization: Neste Oil Holding, Inc
Comment:
The commenter (2365.1) believes that EPA should consider allowing companies to present
specific fuel pathways. If specific fuel pathways which employ sustainable and carbon
mitigation processes are to be encouraged, they must be recognized and given credit under the
RFS. (2365.1, p.3)
Our Response:
For the final rule, EPA has established a petition process whereby biofuel producers can
request EPA review of new process technologies or operating practices if it is expected they
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could qualify for a new or different threshold assessment (D code). Additionally, EPA has
indicated its intention to periodically update its analyses to reflect new data and information
including the development of new technologies.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2119
Organization: National Sorghum Producers
Comment:
The commenter (2119.1) noted that grain sorghum is not corn starch, and if meeting the
greenhouse gas (GHG) requirements of the rule, should be assigned a separate pathway and
classified as an advanced biofuel. (2119.1, p.2)
The commenter also believes that sweet sorghum should also have its own pathway in the final
rule. (2119.1,p.4)
The commenter believes that energy sorghum should have its own dedicated pathway in the final
rule. By having dedicated pathways for both energy sorghum and switchgrass, risk will be
lowered as biorefineries can work with producers in an area to produce the feedstock with the
best agronomic package for that region. (2119.1, p.6)
Our Response:
This final rule establishes a pathway for biofuel produced from switchgrass. As stated in
the preamble to the final rule, EPA anticipates analyzing grain sorghum ethanol as a biofuel
feedstock within the next 6 months. For other fuels not modeled for this rule, EPA has
established a petition process whereby biofuel producers can request EPA review of new process
technologies.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2374
Organization: Amyris Biotechnologies, Inc. (Amyris)
Comment:
The commenter (2374) believes that EPA should allow producers on a case-by-case basis to
verify the carbon intensity of their specific process and feedstocks, and immediately certify to
the new values. This certification process should be responsive to new innovations in production
allowing for immediate benefit of their emissions reduction. By quickly rewarding innovation
with improved performance metrics, the EPA will incentivize producers to continually improve
their carbon footprint. [[Docket number 2374.1, p. 1]]
Our Response:
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RFS2 Summary and Analysis of Comments
Based on analyses conducted for this final rule, EPA has determined that several
pathways, including from soy oil, are available for the biodiesel industry which meet or exceed
the advance biofuel GHG threshold.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated
Comment:
The commenter (2511.1) noted that several aspects of the fuel pathways need to be addressed
including: yield data, fuel baselines including petroleum and indirect effects of petroleum
lifecycle, co-product credits and emissions debits for petroleum co-products, time discounting
and linkages of models. The commenter advocates that EPA needs to use real data where real
data exists. This information should be modeled to determine the effectiveness of the predictions
of the models. Models carrying the significance of this regulation need to be verified, the
regulations should not be based on speculation, modeling and assumptions indefinitely. (2511.1,
P-6)
Our Response:
As detailed in the final rule preamble and RIA, EPA has used up to date models, data and
other information to assess the GHG impacts of biofuels. Throughout the development of EPA's
lifecycle analysis, the Agency has employed a collaborative, transparent, and science-based
approach. EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. We believe we have in a technically appropriate manner,
implemented the mandates of EISA. Our analyses indicate that indirect impacts including
international land use impacts are significant and should appropriately be included in accordance
with good practice and the requirements of EISA.
For the final rule, EPA has updated its assessment of crop yields both domestically and
internationally. We have calculated lifecycle emission performance assuming both base yields
derived from projecting into the future longer term historical trends and also assuming a marked
increase in future yields based on industry and other comments
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2549
Organization: Triton Energy LLC
Comment:
The commenter (2549.1) noted that given the large carbon emissions due to ILUC, some biofuels
may have to choose a 20% reduction category instead of an advanced biofuel where the carbon
emissions reduction is 40 to 50%. (2549.1, p.4)
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Our Response:
As noted in the preamble to the final rule, EPA believes it has appropriately determined
the ILUC impact of a wide range of biofuels. Further, a number of pathways have been
determined to meet the advance biofuel threshold performance of 50%.
7.5.2 Assignments for Additional Pathways
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1044
Organization: GEN-X Energy Group Inc.
Comment:
The commenter (1044) offers the following remarks related to proposed §80.1426 table 1: This
section represents the pathways available to the renewable fuel producers. The commenter
firmly opposes this section as it does not accurately identify pathways for biodiesel or renewable
diesel feedstocks and presumes that all virgin vegetable oils and waste oils are the same. The
commenter provided an excel spreadsheet listed as exhibit A to this document that accurately
depicts various feedstocks. The commenter proposes a review of this information and that EPA
correctly place certain vegetable oil feedstocks in the correct pathways. In addition, algae was
not identified as mandated by the language of the EISA. [[Docket number 1044.1, p. 6]]
[[NOTE: Exhibit A (excel spreadsheet) referred to above is not available on FDMS.]]
Our Response:
Based on analyses conducted for this final rule, EPA has determined that several
pathways, including from soy oil, are available for the biodiesel industry which meet or exceed
the advance biofuel GHG threshold. Therefore there is no need to reduce the 50% threshold.
Additionally, we are not allowing averaging of biodiesel from vegetable oils with those produced
from waste oils, fats and greases as this is not necessary to allow compliance with the biomass-
based diesel GHG performance threshold.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2106
Organization: Endicott Biofuels II, LLC
Comment:
The commenter (2106) suggests that EPA further evaluate at least two conversion pathways or
modified pathways. In the first case, the commenter suggests that the renewable diesel
conversion pathway is significantly different from conventional transesterification methods to
produce a renewable diesel substitute and therefore it should be evaluated separately with a
special focus on the source of hydrogen used in hydrotreating. In the second case, where
extensive pretreatment and fat stripping equipment is added to existing transesterification plants
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RFS2 Summary and Analysis of Comments
to handle high FFA feedstocks, there can be a materially higher yield loss resulting in carbon
conversion losses and hence a reduced GHG reduction from the base feedstock. [[Docket number
2106.1, p. 6]]
Our Response:
For the final rule, EPA has analyzed a number of biodiesel pathways as complying with
the advance biofuel GHG performance threshold. EPA has adopted a petition process whereby
biofuel producers can request EPA review of new process technologies. Additionally, EPA has
indicated its intention to periodically update its analyses to reflect new data and information
including the development of new technologies.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2302
Organization: UC Berkeley - Energy Biosciences Institute
Comment:
The commenter [[2302]] strongly suggests that EPA create a transparent mechanism for the
evaluation of emerging conversion technologies including submission and review. Such
technological advances may result in significantly different lifecycle assessments. [[#2302 p.5]]
The commenter also suggests that for: 1) thermochemical gasification followed by Fischer-
Tropsch synthesis; and 2) catalytic racking/depolymerization followed by catalytic fuel
synthesis, that EPA add these to the table as additional lines rather than attempting to combine
multiple possible pathways into a single line item to avoid ambiguity. [[#2302 p.5]]
Our Response:
Biofuels producers who believe that their production process is significantly different
than those included in the list of pathways are eligible to petition EPA. The petition must
include information necessary to allow EPA to determine the life cycle green house gas
emissions of the fuel. This is further discussed in the preamble Section V.C. Please see Section
7.5.2.5 of this Summary and Analysis of Comments document for EPA's full response regarding
the petition process for additional pathways.
For inclusion of new fuel and feedstock pathways, it may be important to seek public
comment on the modeling. We therefore intend to utilize the annual rulemaking process already
planned for establishing the renewable fuel standards applicable for the following year, to also
provide an opportunity to propose and finalize the inclusion of these emerging pathways on our
list of eligible biofuels, as appropriate.
The fact that the EISA requirements define specific categories of fuels with lifecycle
GHG thresholds means that EPA does not have to define a specific lifecycle GHG value for each
individual gallon of fuel. If different types of biofuel pathways each meet the requirements of a
certain pathway there is no need to distinguish between them.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2486
Organization: Primafuel, Inc.
Comment:
With a market-minded view of the regulations, the commenter (2486) believes that it is
imperative that the process for proposing new or modified fuel pathways must be highly
efficient. [[Docket number 2486.1, p. 2]] [[See docket number 2486.1, p. 2 for additional details
of this issue.]]
Our Response:
For the final rule, EPA has adopted a petition process whereby biofuel producers can
request EPA review of new process technologies or feedstock sources. Additionally, EPA has
indicated its intention to periodically update its analyses to reflect new data and information
including the development of new technologies and feedstock sources.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2395.1
Organization: Covanta
Comment:
The commenter (2395) believes renewable fuels generated from waste biomass, including the
biogenic fraction of MSW, do not lead to land use change. (2395.1 Pg. 6-7).
Our Response:
For the final rule analysis EPA determined that biofuel from separated yard and food
wastes (which may contain incidental and post-recycled paper and wood wastes) satisfy biofuel
thresholds. Separated food waste is largely starch-based and thus qualifies for the advanced
biofuel standard of 50% reduction. EPA believes that renewable fuel produced from feedstocks
consisting of wastes that would normally be discarded or put to a secondary use, and which have
not been intentionally rendered unfit for productive use, should be assumed to have little or no
land use emissions of GHGs. The use of wastes that would normally be discarded does not
increase the demand for land. For example, the use in biofuel production of food waste from a
food processing facility that would normally be placed in a landfill will not increase the demand
for land to grow the crops that were purchased by the food processing facility.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2487
Organization: Abengoa Bioenergy Corporation
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Comment:
The commenter (2487) believes that RFS2 rules as written provide little incentive for individual
facilities to reduce their greenhouse gas (GHG) footprint. By providing a limited number of
"pathways" for GHG classification purposes, and no opportunity for individual facilities to
provide a distinct lifecycle analysis for unique facilities which have (or wish to) incorporate
GHG reduction technologies, there is no opportunity to benefit from these improvements. The
commenter states that the opportunity to submit individual lifecycle analyses is critical for non-
corn facilities which might qualify as an Advanced Biofuel after making process modifications
to improve GHG reductions that are not recognized in the existing pathways. [[Docket number
2487, p. 1]]
In connection with the suggestion above, the commenter adds that it is critical that the methods
of calculating the GHG footprint of each facility be transparent and reproducible by individual
participants. EPA's models and calculations are neither, and therefore put the industry in the
position of having to comply with limitations that cannot be estimated or anticipated in advance.
[[Docket number 2487, p. 1]]
Our Response:
For the final rule, EPA has adopted a petition process whereby biofuel producers can
request EPA review of new process technologies. Additionally, EPA has indicated its intention
to periodically update its analyses to reflect new data and information including the development
of new technologies. We note however, that for this rule, it is only necessary to meet the
threshold; no additional credit is available for fuels produced at facilities which exceed the
threshold. As detailed in the preamble and RIA, EPA has used up to date models, data and other
information to assess the GHG impacts of biofuels. Throughout the development of EPA's
lifecycle analysis, the Agency has employed a collaborative, transparent, and science-based
approach. EPA's lifecycle methodology, as developed for the RFS2 proposal, required breaking
new scientific ground and using analytical tools in new ways. The work was generally
recognized as state of the art and an advance on lifecycle thinking, specifically regarding the
indirect impacts of biofuels. We believe we have in a technically appropriate manner,
implemented the mandates of EISA
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment:
With regard to the dedicated perennial energy grasses for use in the production of renewable
biofuels, the commenter (2408.1) believes that EPA should recognize the wide variety of these
types of feedstocks. To the extent possible, EPA should be as flexible and broad in its definition
of these new types of feedstocks. Where appropriate, EPA should consider the inclusion of the
term "other energy grasses" to qualify as a feedstock for use in the production of RFS2 fuels.
[[See Docket Number 2408.1, p. 4]]
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Our Response:
We recognize that there is a wide variety of perennial energy grasses. More description
is provided in Chapter 1 of the RIA. In terms of evaluating "other energy grasses" as meeting
the GHG thresholds, we believe other perennial grasses likely to compete as feedstock sources
will have similar land use and agricultural inputs as switchgrass (the energy grass modeled) and
are therefore confident the results from switchgrass can be extended to miscanthus and other
perennial grasses. However, we note that the energy crop industry is just starting to develop and
therefore as favored perennial grasses start to emerge, additional analyses may be warranted
7.5.2.1 Ethanol from Starch
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1036
Organization: Vision FL I, LLC
Comment:
The commenter (1036.1) noticed upon review of the fuel pathway tables (VI.E.1-1, VI.E.2-1,
VI.E.4-1), as well as the proposed Table 1 to 80.1426 (Applicable D codes for Each Fuel
Pathway for use in Generating RINs), that Sweet Sorghum ethanol has been "unintentionally"
omitted from the look up tables. The commenter is requesting that Sweet Sorghum ethanol be
classified with Sugarcane Ethanol on all look up tables; this is because the facilities that are used
for Sweet Sorghum ethanol are Brazilian Sugarcane processing plants tailored to handle the
slightly different feedstock. (1036.1, p.3)
Our Response:
We did not model the use of sweet sorghum as a feedstock. For the final rule, EPA has
adopted a petition process whereby biofuel producers can request EPA review of new process
technologies and feedstock sources. Additionally, EPA has indicated its intention to periodically
update its analyses to reflect new data and information including the development of new
technologies and feedstock sources.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2343
Organization: Osage Bio Energy
Comment:
The commenter (2343) states that the proposed language to assign winter barley (and other non-
corn starch) the same fuel pathway as corn prevents projects utilizing those feedstocks from ever
achieving Advanced Biofuel status. The legislative mandate contained in EISA 2007 identifies
barley as an eligible Advanced Biofuel feedstock. However, Proposed Rule language contained
in Section VI.E.S.a seeks to apply a first-generation corn pathway to barley ethanol. According
to the language and corresponding lookup table VI.E.4-1, it appears that all ethanol-from-grain
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starch processes would be assigned the same pathway as corn, even with lifecycle greenhouse
gas emissions less than 50% of baseline. The commenter requests that EPA eliminate or modify
the Proposed Rule language, uphold the spirit of the law provided for in EISA 2007, and make
accommodations for the benefits of winter barley as an ethanol feedstock. [[Docket number
2343, pp. 1 and 5]] [[See docket number 2343, pp. 1-5 for further discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2547
Organization: Pennsylvania Department of Agriculture
Comment:
The commenter (2547) noted that Section VI.E.3 of the proposed rule references barley as an
ethanol feedstock. It appears under the proposed rule, that all ethanol-from grain starch
processes would be assigned the same pathway as corn, making it ineligible for benefits as an
Advanced Biofuel. Barley as an Advance Biofuel has the potential to provide substantial
benefits. The potential benefits of increased barley production are significant. It is in a unique
position to increase biofuel feedstock without disrupting current production, and at the same time
offers significant environmental benefits. (2547, p.l)
Our Response:
EPA has not analyzed barley as a feedstock for this final rule. For the final rule, EPA has
adopted a petition process whereby biofuel producers can request EPA review of new process
technologies or feedstock sources. Additionally, EPA has indicated its intention to periodically
update its analyses to reflect new data and information including the development of new
technologies and feedstock sources. However, we have determined that winter cover crops will
provide feedstock which will allow biofuels to be produced that comply with the advance biofuel
standard since they have negligible or no impact on land use.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2360
Organization: Archer Daniels Midland Company (ADM)
Comment:
The commenter (2360.1) noted that in the proposed rule, a natural gas dry mill that dries 100%
Distillers Grains (Dgs) has a GHG reduction of 16% (100 yr 2% discount) while a natural gas
dry mill that produces only wet Dgs has a GHG reduction of 27% (100 yr 2% discount) in
comparison to the petroleum baseline as shown in Table VI.C.1-2. The commenter believes the
all-or-nothing approach is inappropriate and recommends including a pathway selection in the
lookup table where a portion of the feed is dried. A facility could reduce their lifecycle GHG
emissions by switching from drying all their feed to only drying a portion of the feed to increase
the 16% reduction to the 20% reduction requirement specified in the RFS2 regulations for corn-
based ethanol. The commenter also noted that since many pathways in existence today are not
included in the lookup table, EPA should clarify how facilities with pathways that do not exactly
match those in the rule will be handled. (2360.1, p.2)
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The commenter also recommends that EPA expands the wet mill pathways with mixed fuel
options as well as process improvement options such as CHP and membrane separation along
with a facility type that has wet feed, as is described for the dry mill cases. It is not reasonable to
exclude facilities from the program that don't completely match up with EPA's stated pathways
when their lifecycle GHG reductions would otherwise qualify them for inclusion. (2360.1, p.2)
Our Response:
EPA has determined that a facility drying no more than 65% of their distillers grain (and
using natural gas, biomass or biogas as process energy sources) will meet the GHG threshold.
Additionally, the application of advanced technologies will also allow corn ethanol to meet the
20% threshold standard. The pathways for which corn ethanol will meet or exceed the 20%
threshold are detailed in the preamble and in the regulations. EPA also has provided a petition
process whereby biofuel producers can request EPA to evaluate specific technologies or
operating processes that distinguish their biofuel production LCA GHG impacts from those
already considered by EPA. These new technologies or operating processes can then receive an
alternative GHG threshold assessment, if appropriate.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2075
Organization: Sustainable Oils, LLC (SO)
Comment:
The commenter (2075) requests that pre-commercial dedicated crops not be subject to a formal
LCA until they reach a threshold of 1 million acres of domestic cultivation. This will allow new
crops to gain a commercial foothold and develop data at an appropriate scale that will allow for a
more accurate analysis of that crop's LCA GHG emissions from production. The commenter
also requests that for new crops which reach the 1 million acre milestone, EPA have an
expedited process for conducting an LCA GHG emission analysis that is timely. Such pathways
should be established within a timely 90 days after the year in which the 1 million acre milestone
has been met. [[Docket number 2075.1, p. 3]]
Our Response:
EPA appreciates the need to have accurate data. However, it should not necessary to
reach a threshold of 1 million acres of domestic cultivation before accurate assessment of the
agricultural production including inputs affecting GHG assessment can be determined. We also
expect that agricultural production will occur in advance of using the feedstock for commercial
biofuel production allosing additional time to appropriately assessment feedstock production.
For the final rule, EPA has adopted a petition process whereby biofuel producers can request
EPA review of new process technologies and feedstock sources. Additionally, EPA has
indicated its intention to periodically update its analyses to reflect new data and information
including the development of new technologies and feedstock sources.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that EPA should clarify that ethanol from grain sorghum
qualifies as an Advanced biofuel. Grain sorghum is not corn starch, and, if it meets the GHG
requirements of the rule, should be assigned a separate pathway and classified as an advanced
biofuel. (2329.1, p. 101)
Our Response:
As stated in the preamble to the final rule, EPA intends to analyze grain sorghum as a
biofuel feedstock within the next 6 months.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2333
Organization: Pennsylvania State Senate
Comment:
The commenter (2333) noted that In Section VI.E.3.a of EPA's Proposed Rule, there is a
reference to the use of barley as an ethanol feedstock. From the language in the noted section, it
appears that all ethanol-from-grain starch processes would be assigned the same pathway as corn
as reflected in the lookup table VI.E.4-1, regardless of lifecycle greenhouse gas performance. If
assigning barley plants the same pathway as corn makes them ineligible for benefits associated
with being an Advanced Biofuel, the commenter believes that the lifecycle benefits of winter
barley will not be accurately reflected. In fact winter cover crops such as barley grown on fallow
crop land, commonly rotated in a double crop cycle with summer soybeans provide incremental
food and energy without displacing land or existing crops. The commenter also noted that
growing winter barley for food and fuel has environmental and economic benefits that
differentiate it from corn as an ethanol feedstock. (2333, p.l)
Our Response:
EPA has not analyzed the use of a priamary crop of barley to produce ethanol. However,
EPA provides in the final rulemaking a petition process by which those fuel pathways that have
not yet been modeled can be evaluated to determine compliance with one or more of the
renewable fuel categories. Preamble Section V.C describes the petition process details.
With regards to barley grown as a secondary, winter cover crop, EPA does provide D-
codes for secondary annual crops planted on existing crop land - such as winter cover crops.
While different from crop residues, these secondary crops also have no land use impact since
they are planted on land otherwise used for primary crop production. GHG emissions would
only be associated with growing, harvesting and transporting the secondary crop and then
processing into biofuel. In the case of secondary crops that might be used for cellulosic biofuel
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production, they would also have no land-use change impact, and consequently modeling
conducted for corn stover is also being extended to these crops. See Preamble Section V.C for
details.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2113
Organization: Chesapeake Bay Commission
Comment:
The commenter (2113) requests to reclassify non-corn starch based ethanol as Advanced
Biofuels as originally defined in the Energy Independence and Security Act of 2007. (2113.pdf,
p.D
The commenter (2113) is concerned about categorizing all non-corn starch ethanol, including
barley-based ethanol, as a Renewable Fuel and not as an Advanced Biofuel. The classification
would unfairly burden this promising new and emerging industry. The commenter (2113)
provides several reasons to why barley based ethanol in particular should be categorized as an
Advanced Biofuel including lifecycle greenhouse gas benefits, reduction in nutrients runoff by
planting winter crops and a boost in income without disrupting the food and feed chain.
(2113.pdf,p.2)
Document No.: EPA-HQ-OAR-2005-0161-2086
Organization: Pennsylvania State University
Comment:
The commenter [[2086]] states that EISA 2007 specifically includes barley starch as a feedstock
option in the definition of Advanced Biofuel. In Section VI.E.3 .a of the rule, there is a reference
to the use of barley as ethanol feedstock. It appears that all ethanol-from-grain starch processes
would be assigned the same pathway as corn as in table VI.E.4-1, regardless of GHG
performance. If assigning barley plants the same pathway as corn makes them ineligible for
benefits associated with being an Advanced Biofuel, the lifecycle benefits of winter barley will
not be accurately reflected.
The commenter states that winter cover crops such as barley grown can be grown on fallow crop
land too drought prone for corn, or commonly rotated in a double crop system with soybeans to
provide incremental food and energy without displacing land or existing crops nearly as much as
corn. Additionally, according to the Chesapeake Bay Commission 2007 report, winter cover
crops could reduce nitrogen runoff by 17.1 million Ibs per year. Dr. Thomas O'Donnell from the
Global Emissions Exchange states that winter cover crops such as barley can help reduce carbon
emissions by 6/10 ton per acre per year and qualify for carbon credits with no-till practices.
Growing winter barley for food and fuel has environmental and economic benefits that
differentiate it from corn as an ethanol feedstock. [[2086.1 p.l]]
Our Response:
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EPA has not analyzed barley as a feedstock for this final rule. For the final rule, EPA has
adopted a petition process whereby biofuel producers can request EPA review of new process
technologies or feedstock sources. Additionally, EPA has indicated its intention to periodically
update its analyses to reflect new data and information including the development of new
technologies and feedstock sources. However, we have determined that winter cover crops will
provide feedstock which will allow biofuels to be produced that comply with the advance biofuel
standard.
7.5.2.2 Renewable Fuels from Cellulosic Biomass
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2022
Organization: Lignol Innovations, Inc.
Comment:
Referring to production process requirements for fuel ethanol from feedstocks, the commenter
(2022) believes that process heat should not be required to be obtained from lignin, but
alternatively should be allowed from woody biomass residues, such as agricultural crop residues,
forestry slash, bark, tree limbs, forestry thinning, lumber mill residues, pulp and paper mill
wastes, demolition wastes, gas from anaerobic digestion systems, etc. The commenter states that
this type of woody biomass waste is routinely used as boiler fuel for steam and power production
to support pulp and paper mill operations. [[Docket number 2022.1, p. 1]]
The commenter notes that that lignin is the only significant renewable source of aromatic ring
chemical structures—currently the entire aromatic chemicals industry is dependent on benzene
obtained from crude oil. Given the projected magnitude of the cellulosic ethanol and advanced
fuels industry that will be needed to fulfill the RFS2 mandate and extrapolating that to the
quantity of lignin that will be produced from biorefineries processing wood and woody biomass,
it can be projected that this lignin could replace much of the crude oil-derived aromatic
chemicals needed by the chemicals and materials industry [[Docket number 2022.1, p. 2]] [[See
docket number 2022.1, pp. 2-3 for further discussion of this issue.]]
Our Response:
EPA has determined in this rule that cellulosic biofuel made from a range of feedstock
sources and using a range of processes will comply with the cellulosic biofuel GHG performance
threshold. We do not require that biofuels only be made from the pathways modeled. Additional
pathways can be used by biofuel producers including using lignin for other valuable products
rather than burning it for energy at a biofuel facility or using it to add feedstock for biofuel
production. EPA has provided a petition process whereby biofuel producers can request EPA to
evaluate specific technologies or operating processes that distinguish their biofuel production
LCA GHG impacts from those already considered by EPA. These new technologies or operating
processes can then receive an alternative GHG threshold assessment, if appropriate.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2171
Organization: Mascoma Corporation
Comment:
The commenter (2171) requests that EPA more clearly define cellulosic ethanol pathways in
order to ensure maximum flexibility in developing successful commercial projects including
making clear that cellulosic biofuel companies that sell lignin as a co-product of the biofuels
process will receive proper credit in the lifecycle calculation and is an approved pathway to
generate cellulosic RINs. The commenter also asks EPA to establish a mechanism to allow new
fuels and/or fuels produced from new feedstocks to generate RINs while awaiting approval of a
formal fuels pathway. [[Docket number 2171.1, p. 5]]
Our Response:
EPA has determined in this rule that cellulosic biofuel made from a range of feedstock
sources and using a range of processes will comply with the cellulosic biofuel GHG performance
threshold.
Additionally, EPA has provided a petition process whereby biofuel producers can request
EPA to evaluate specific technologies or operating processes that distinguish their biofuel
production LCA GHG impacts from those already considered by EPA. These new technologies
or operating processes can then receive an alternative GHG threshold assessment, if appropriate.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2342
Organization: Burack Environmental Law Offices
Comment:
The commenter (2342) is requesting modification of the following pathway in Table 1 of
proposed §80.1426 (Table VI.E.4-1 in the preamble at 74 FR 25054):
Fuel Type: Ethanol
Feedstock: Cellulose and hemicellulose from corn stover, switchgrass. Miscanthus.
Wheat straw, rice straw, sugarcane bagasse, forest waste, yard waste, or planted trees
Production process requirements:
-Enzymatic hydrolysis of cellulose
-Fermentation of sugars
-Process heat derived from lignin,
The commenter's requested modification is to broaden the universe of materials that may be used
to produce process heat for ethanol production, to include appropriate materials other than lignin.
(2342, p.l)
Our Response:
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Table V.C-6: D-Code Designations in the Final Rule preamble has been updated since
the proposal. For cellulosic ethanol the table now broadly covers any process type using
cellulosic biomass from agricultural residues; slash, forest thinnings and forest product residues;
annual cover crops; switchgrass and miscanthus; cellulosic components of separated yard wastes,
celluloisic components of separated food wastes and cellulosic components of separated
municipal solid waste.
7.5.2.3 Biodiesel
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0994
Organization: Griffin Industries
Comment:
The commenter (0994.1) supports the proposal to allow blends of waste grease and soy oil to be
blended to create a feedstock that will qualify the Biodiesel product as Biomass-based Diesel.
The commenter supports the reduction of this biofuel category to 40% GHG reduction to
minimize the market disruption of these fats and oils when they are moved from animal feed to
Biodiesel production. (0994.1, P.19)
The commenter also supports the first blend proposal because most major Biodiesel Producers
have the capability to convert waste greases and animal fats directly to Biodiesel. This option is
the simplest method for the Obligated Party. The commenter believes that other Biomass-based
Diesel feedstocks will want to have their feedstock qualify for this blending program. If these
other feedstocks have different GHG reductions than the waste greases, EPA will have to
develop a blend table for use with these different feedstocks. Under Option 1, this keeps the
responsibility with the Biodiesel Producer, producing one product that meets Biomass-based
Diesel requirements, and does not burden the Obligated Party to find and purchase the right mix
of Biodiesels to qualify as a 2 (or 4 in the 6 Code system). (0994.1, p. 19)
The commenter does not support the second alternative. Without creating D codes (as proposed
in the third alternative) this approach is not workable and probably not enforceable. The
commenter also does not support the third alternative since this still places an undue burden on
the Obligated Parties. If other Biomass-based Diesel feedstocks are allowed to be used for this
blend scenario, the Obligated Party's burden becomes greater since there may be different blend
ratios. The commenter requests that in the whole discussion on blending that animal fats be
designated with waste greases, as both have the 80% GHG reduction and therefore are identical
blending components. EPA may want to consider all other Biomass-based Diesel feedstocks to
qualify as a blend component for soy oil to meet the 50% GHG reduction. The other vegetable
oils (in place of soy oil) should also be considered in this blending proposal. (0994.1, p. 19)
Document No.: EPA-HQ-OAR-2005-0161-1001, EPA-HQ-OAR-2005-0161-1005, EPA-
HQ-OAR-2005-0161-1010, EPA-HQ-OAR-2005-0161-1011, EPA-HQ-OAR-2005-0161-1012,
EPA-HQ-OAR-2005-0161-1025, EPA-HQ-OAR-2005-0161-1043, etal.
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Organization: Kurzman Clean Tech Research & Kurzman Capital, LLC, Cotner
Consulting Services, CC Gas Systems, LLC, Atlantic BioFuels, Glenwood Farms, Law Offices
of David Wilcox, University of Georgia Engineering Outreach Service, et al.
Comment:
The commenters believe that the proposed Biodiesel pathway is unworkable. The proposed
pathway is not workable in practice and should be viewed by the EPA as a barrier to compliance.
Vegetable oils account for approximately 70 percent of the feedstock that is available to meet the
RFS2 Biomass-based Diesel targets, and the RFS2 volume goals simply cannot be met if
vegetable oils are disqualified from the program. The agency should fully consider the fact that
feedstock supplies in the U.S. will inherently produce an industry wide feedstock mixture that,
even utilizing the unfavorable GHG reduction values assigned by EPA, would meet the
established thresholds for Advanced Biofuels.
The commenters believe that EPA should use its authority as provided by Congress and adjust
the 50 percent reduction requirement for Biomass-based Diesel downward to 40 percent to
ensure U.S. biodiesel can meet the biomass-based diesel requirements, as intended by Congress.
Document No.: EPA-HQ-OAR-2005-0161-1029
Organization: C.I.B.
Comment:
The commenter (1029) believes that the proposed biodiesel pathway is unworkable. EPA should
use its authority and adjust the 50 percent reduction requirement downward to 40 percent to
ensure U.S. biodiesel can meet the biomass-based diesel requirements, as intended by Congress.
(1029, p.3)
Document No.: EPA-HQ-OAR-2005-0161-1051
Organization: Aberdeen Development Corp.
Comment:
The commenter (1051) believes that the proposed biodiesel pathway is unworkable from a
practical perspective. After concluding biodiesel from virgin vegetable oils does not qualify for
the program, the agency attempts to restore it, in part, by creating a pathway for compliance
purposes whereby virgin vegetable oils can be combined with waste oils in a 52-48 percent ratio.
Instead, the commenter states that the EPA should recognize that U.S. feedstock supplies
naturally produce a feedstock mix that, even when using EPA's low GHG values, meets the
thresholds for Advanced Biofuels.
Moreover, to the extent necessary, EPA should use its authority and adjust the 50 percent
reduction requirement downward to 40 percent to ensure U.S. biodiesel can meet the biomass-
based diesel requirements, as intended by Congress. [[Docket number 1051.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-1669
Organization: Environmental Intelligence, Inc.
Comment:
The commenter (1669.1) believes that the proposed pathway of using a 52-48 feedstock ratio of
biodiesel feedstocks is not workable in practice. (1669.1, p.2)
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Document No.: EPA-HQ-OAR-2005-0161-2010, EPA-HQ-OAR-2005-0161-2011, EPA-
HQ-OAR-2005-0161-2013, etal.
Organization: SoyMor Biodiesel, LLC, Western Dubuque Biodiesel LLC, Central Iowa
Energy, LLC, et al.
Comment:
The commenters state that multi-feedstock biodiesel production facilities are able to blend high
fatty acids (animal fats/waste corn oil) with low fatty acid (soybean oil) feedstock at the
beginning of the esterification process. The commenters' recommendation is to aggregate high
and low blends yearly to meet the GHG threshold. The commenters believe that biodiesel
production facilities and obligated parties should be allowed to demonstrate that a minimum
number of waste grease-based biodiesel RINs is used to meet the biomass-based diesel standard
in comparison to the number of soybean oil-based biodiesel RINs.
The commenters conclude that given the fuel pathway EPA is proposing for soy biodiesel and
considering how the California Air Resources Board has proposed the fuel pathway for soy
biodiesel with its Low Carbon Fuel Standard (LCFS); a very peculiar marketing scenario for soy
biodiesel is emerging. ARE does not require a minimum GHG reduction threshold for fuel; the
only requirement is to meet or fall under a yearly carbon intensity (CI) target for fuel. Therefore,
soy biodiesel can meet these CI reduction targets beginning in 2010 with a blend of B2. A soy
biodiesel blend of B2 can be sold in California and meet the LCFS, but will not have a RIN
attached. However, it will qualify for a LCFS carbon credit. The commenters believe this
consequence illustrates well intended policy to reduce GHG emissions, but causes confusion and
uncertainty in the marketplace.
Document No.: EPA-HQ-OAR-2005-0161-2079
Organization: AE Biofuels, Inc.
Comment:
The commenter (2079.1) believes that the proposed biodiesel pathway is not workable in practice
and should be viewed by the EPA as a barrier to compliance. Vegetable oils account for
approximately 70 percent of the feedstock that is available to meet the RFS2 Biomass-based
Diesel targets, and the RFS2 volume goals simply cannot be met if vegetable oils are disqualified
from the program. This outcome is not consistent with either sound science or sound energy
policy. Instead, EPA should fully consider the fact that feedstock supplies in the U.S. will
inherently produce an industry wide feedstock mixture that, even utilizing the unfavorable GHG
reduction values assigned by EPA, would meet the established thresholds for Advanced Biofuels.
(2079.1, pp.9-10)
Document No.: EPA-HQ-OAR-2005-0161-2099
Organization: Honeywell International, Inc.
Comment:
The commenter (2099.1) supports EPA's proposal to average biodiesel GHG performance for
the purposes of achieving the GHG threshold. (2099.1, p.21)
Our Response:
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Based on analyses conducted for this final rule, EPA has determined that several
pathways are available for the biodiesel industry which meet or exceed the advance biofuel GHG
threshold. Therefore there is no need to reduce the 50% threshold. Additionally, we are not
allowing averaging of biodiesel from vegetable oils with those produced from waste oils, fats
and greases as this is not necessary to allow compliance with the biomass-based diesel GHG
performance threshold.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2392.1
Organization: The Boeing Company
Comment:
The commenter (2392) states that the EPA plans to update its analyses at three-to-five year
intervals may be adequate for existing commercialized biofuels with historical data sets and
known technologies. They will, however, not work for the next generation of biofuels because
these fuels will not be designated as compliant renewable fuels from the point of view of the
proposed rule. This will mean that next generation feedstocks will not be developed and
commercialized in a timely manner. If the EPA process for approving new pathways is not
timely, and a three-to-five year interval is not timely, regulatory uncertainty will lethally inhibit
the substantial private investment needed to create the improved feedstocks which, in turn, are
needed to create a commercially viable biofuel industry. Contrary to Congressional intent, EPA's
proposed rule will stifle innovation. (2392.1 Pgs. 6-8).
Our Response:
For those fuel pathways that are different than those pathways EPA has listed in today's
regulations, EPA is establishing a petition process whereby a party can petition the Agency to
consider new pathways for GHG reduction threshold compliance. The petition process is meant
for parties with serious intention to move forward with production via the petitioned fuel
pathway and who have moved sufficiently forward in the business process to show feasibility of
the fuel pathway's implementation. The Agency will not consider frivolous petitions with
insufficient information and clarity for Agency analysis. EPA will process these petitions as
expeditiously as possible, taking into consideration that some fuel pathways are closer to the
commercial production stage than others. In all events, parties are expected to begin this process
with ample lead time as compared to their commercial start dates.
EPA anticipates that for some petitioned fuel pathways with unique modifications or
enhancements to production technologies of pathways otherwise modeled for the regulations
listed today, EPA may be able to evaluate the pathway as a reasonably straight-forward
extension of our current assessments. We expect such a determination would be pathway
specific, and would be based on a technical analysis that compared the applicant fuel pathway to
the fuel a pathway (s) that had already been analyzed. In these cases, EPA would be able make a
determination without proceeding through a full rulemaking process. In such cases, we would
expect to make a decision for that specific pathway without conducting a full rulemaking
process. We would expect to evaluate whether the pathway is consistent with the definitions of
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renewable fuel types in the regulations, generally without going through rulemaking, and issue
an approval or disapproval that applies to the petitioner. We anticipate that we will subsequently
propose to add the pathway to the regulations.
If EPA determines that a petitioned fuel pathway requires significant new analysis and/or
modeling, EPA will need to give notice and seek public comment. For example, we anticipate
that pathways with feedstocks or fuel types not yet modeled by EPA will require additional
modeling and public comment before a determination of compliance can be made. In these cases,
the determination would be incorporated into the annual rulemaking process established in
today's regulations.
When EPA makes a technical determination is made that a petitioned fuel pathway
qualifies for a RFS volume standard, a D-code will be assigned to the fuel pathway. We
anticipate that renewable fuel producers and importers will be able to generate RINs for the
additional pathway after the next available update of the EPA Moderated Transaction System
(EMTS) that follows a determination. EPA expects to update the EMTS quarterly, as long as
necessary. Renewable fuel producers will be able to register the fuel pathway through the EPA
Fuels Programs Registration System two weeks after the date of determination, but as described
above, will not be able to generate RINs until the quarterly EMTS update.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1026
Organization: Gradek Energy
Comment:
The commenter (1026.1) is concerned with the provisions in the proposed rule that do not
address the retention of waste oil feedstock, which may undermine, rather than advance,
Congress intent in generating sufficient supply of renewable fuel and reducing GHG emissions.
The removal of waste oil recovered from wastewater, from the definition of renewable feedstock
is an issue that will have important consequences in the RFS Act as well as environmental
impact. The Energy Independence and Security Act of 2007 (EISA), defines waste gas that
would be flared or vented as a form of recoverable waste energy, in that useful thermal energy
may be harnessed from that waste stream which would displace a conventional fuel source and it
is a hydrocarbon based fuel that is in a gaseous state. In contrast waste oil which is in a liquid
form and would be suitable for displacing conventional transportation fuel is not designated as a
recoverable waste energy source. This form of inconsistency obviously needs to be corrected.
The avoided GHG emissions and pollution achieved with the recovery of the waste energy from
the waste oil exceeds 85% of the lifecycle GHG emissions for gasoline or diesel. (1026.1 p.l)
The emission reductions from the inclusion of waste oil as a renewable fuel source which is
immediately available are substantially greater than the impact of corn starch biofuels because
of:
-The avoided emissions from the biogenic degradation of the waste oil amount to:
-One barrel of waste oil which undergoes anaerobic digestion in a wastewater stream has a MCF
of 70% and will potentially generate 123 Kgs. of CH4 or the equivalent of 2.6 tons of
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-One barrel of waste oil which undergoes anaerobic digestion in a landfill has a MCF of 10% and
will potentially generate 365 Kgs. of C02.
-One barrel of waste oil which undergoes aerobic digestion in a landfill has a carbon conversion
factor of 100% and will potentially generate 478 Kgs. of C02.
-Carbon neutral resource (waste stream), providing for a lower carbon intensity fuel.
-No additional infrastructure needed for refining, distribution and transportation to market as it is
blended with conventional crude fuels. (1026.1, p.2)
The transformation of oil wastes into an energy resource benefits all stakeholders by:
-Increasing recoverable reserves in the U.S. domestic production by eliminating the oily wastes.
-Alleviating environmental impact associated with disposal and storage of these wastes.
-Reducing U.S. oil imports is an energy security benefit:
-Obtaining higher liquid yield from crude import volumes.
-Obtaining higher liquid yield from domestic crude production volumes. (1026.1, p.2)
-Avoiding increased emissions in land use change impact
-448 Million tons of C02 eq. required acreage for energy crops in the U.S.A.
-Impact reflecting the shift of crop production internationally to meet biofuels demand in U.S.A.
-Reducing the pressure on international commodity prices for corn, soybean, canola, rapeseed
-Help alleviate hunger in under developed countries which cannot afford higher food costs.
-More than one-third of corn production in the U.S.A. in 2008 was being used to produce ethanol
and about half the vegetable oils produced in the European Union were being used for biodiesel
fuel.
-IFRPI's IMPACT, projects that real prices of maize and oilseeds in 2020 will be 26and 18
percent higher respectively, compared with a scenario that keeps biofuels production at 2007
levels.
-Growth in world demand for food will mirror population growth, progressively declining from
2.2% a year in the last decades of the 20th century, to 1.6% in 2015, 1.4% in 2015-30, and 0.9%
in 2030-50.
-Reduce the consumption of water for production of energy crops
-Under current production conditions, it takes an average of roughly 2,500 liters of water to
produce 1 liter of liquid biofuels.
-Agriculture accounts for 70% of freshwater withdrawals from rivers, lakes and aquifers.
-3% of the irrigation water in the U.S. is used for biofuels production.
-Reduce the impact on water from the increased fertilizer usage for energy crops
-Decrease the phosphorus load in water runoff which causes blue algae blooms (eutrophication)
in freshwater bodies.
-Eliminate significant nitrogen load increase in water runoff (estimated increase of 8.8 million
pounds).
-Facilitate compliance of regulatory obligations for the domestic refining industry.
-Reduce the impact of water contamination from disposal of oily wastes
-Groundwater concentration of leaching contaminants.
-Reduce health risks associated due to leaching in soil and groundwater table. (1026.1, p.3)
The commenter noted that consideration has to be given to retaining the inclusion of waste oil
from wastewater treatment as an alternative renewable fuel feedstock as its benefits clearly
address the objectives set out by the Clean Air Act and the Energy Security Act. It also ensures a
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level playing field for compliance between foreign and domestic producers of renewable fuels.
(1026.1, p.3)
Our Response:
For the final rule, EPA has determined that fuels made from waste biogenic oils will
qualify as meeting the advance fuel category GHG performance threshold.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2104
Organization: US Canola Association
Comment:
The commenter [[2104]] states the EPA methodology inaccurately assesses the energy balance of
biodiesel production. It takes less energy to produce a gallon of biodiesel than considered by the
EPA. EPA used a factor of 3.2 units of energy produced per unit of energy used. The updated
factor should be a factor of 5.2 units of energy produced per unit of energy used. Updating this
data point decreases the biodiesel emissions factor by 1.5%. [[#2104.1 p.6-7]]
Our Response:
The EISA mandates setting up fuel GHG thresholds do not require the EPA to do site
specific GHG analysis but rather determine for specific fuel pathways if they meet the thresholds
for the different fuel categories. Therefore, we have developed an average energy use value for
biodiesel production. As part of the final rule we updated the energy use assumptions for
biodiesel production to be in line with the latest energy balance reports from USDA and the
University of Idaho. Therefore, the final rule assumes lower energy use for biodiesel production
compared to the proposal analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2104
Organization: US Canola Association
Comment:
The commenter also states that specifically, the proposed rule only considers soybean oil,
vegetable oil from ethanol plants, and rendered fats and waste greases in their analysis. Lipid
sources such as canola (spring and winter) are not factored into the feedstock supply. [[#2104.1
p.7]]
Our Response:
EPA has not modeled canola for this final rule. For the final rule, EPA has adopted a
petition process whereby biofuel producers can request EPA review of new process technologies
and feedstock sources. Additionally, EPA has indicated its intention to periodically update its
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analyses to reflect new data and information including the development of new technologies and
feedstock sources.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2104
Organization: US Canola Association
Comment:
The commenter states that EPA's analysis compares estimated, future direct and indirect GHG
emissions for biodiesel to direct (only) emissions for petroleum. [[#2104.1 p.8]]
Our Response:
The reason the system boundaries used for threshold assessment in the proposed rule and
the final rule did not include a marginal analysis of petroleum production was due to the
definition of "baseline lifecycle greenhouse gas emissions" in Section 211 (o) (1) (C) of the CAA.
The definitions of the different renewable fuel categories specify that the lifecycle threshold
analysis be compared to baseline lifecycle greenhouse gas emissions, which are defined as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel. Furthermore, as the EISA language specifies that the baseline emissions are to
be only "average" lifecycle emissions for this single specified year and volume, it does not allow
for a comparison of alternative scenarios. Indirect effects can only be determined using such an
analysis; therefore there are no indirect emissions to include in the baseline lifecycle greenhouse
gas emissions.
However, for this final rule, we did consider the potential indirect impacts of petroleum
use. We performed an analysis to determine the marginal crude that would be displaced by
biofuels use. Using well-to-tank GHG values for crude extracted from various countries, we
were able to determine an approximate "marginal petroleum baseline" by applying the factors to
the countries where crude production increased. We found that the marginal baseline was, for an
average gallon of gasoline, not statistically different than the average baseline value used in this
final rulemaking. More details on this analysis can be found in the memo, "Petroleum Indirect
Impacts Analysis" in the RFS2 docket at EPA-HQ-OAR-2005-0161.
We also considered whether the displacement of petroleum fuels could displace
petroleum co-products. When crude oil is refined to produce gasoline and diesel, petroleum co-
products, such as residual fuel oil and petroleum coke, are also produced. An increase in the
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demand for renewable fuels could impact the energy system's utilization of petroleum co-
products due to the ripple effects of price impacts. We expect that an increase in domestic
renewable fuels demand will lead to a decrease in domestic crude oil consumption due to lower
demand for gasoline and diesel; however, this is unlikely to significantly impact demand for
petroleum co-products unless the price for these co-products is significantly affected. Refiners
respond to demand for fuels, and they may choose to produce a larger percentage of petroleum
co-products per barrel of crude then they had in the past in response to lower gasoline or diesel
demand. This increased supply and possible lower refinery costs could translate into a slight
decrease in co-product cost and therefore marginally impact demand.
Increased renewable fuel use domestically is expected to also have the effect of lowering
the world crude oil price and therefore increase international demand for petroleum-based fuels
and increase GHG emissions. This increase in demand outside of the U.S. due to price changes
would partially negate the decrease in GHG emissions domestically from reduced petroleum fuel
demand due to biofuels.
Further discussion of our analysis of the indirect impacts of petroleum use can be found
in Section V.B.3 of the preamble and Chapter 2.7 of the RIA.
For determining the overall GHG impacts of the rule, we did consider the projected mix
of crude oil and finished product in 2022 that would be displaced by renewable fuels. Further
discussion of this analysis can also be found in Chapter 2.7 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2106
Organization: Endicott Biofuels II, LLC
Comment:
The commenter (2106) believes that any averaging or mingling of feedstocks raises compliance
problems for EPA. The challenges associated with accurately monitoring feedstock consumption
combined with the strong producer incentive in the form of achieving enhanced GHG values will
potentially lead to abuse in the system. A similar compliance issue occurs where multiple
finished products are comingled or blended for enhanced GHG values. For these reasons, the
commenter believes it is best to not allow averaging of GHG values across mingling of
feedstocks or across facilities owned by the same company. [[Docket number 2106.1, p. 5]]
The commenter also suggests that EPA strongly consider setting more aggressive targets for
biomass based diesel beginning in 2013 to provide the necessary pricing signals to the market to
incent advancement of new technologies. The commenter's analysis based upon a compilation
of NREL, USDA, U.S. Bureau of Labor & Statistics, and National Renderer's Association data
concludes there is enough energy dense fats and oils neutral and non-neutral materials to support
over 2 billion gallons of biomass based diesel already in the marketplace in the U.S. If foreign
sources are included, the total is much higher. Technology exists today to convert these
feedstocks into high quality methyl esters. The commenter also suggests that the only barrier to
utilization of these feedstocks is price differential to crude oil and that the 30% suggested
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restriction is overly conservative. Therefore, we suggest the EPA target significantly greater
than 1 billion gallons of biomass-based diesel in 2013 and beyond. [[Docket number 2106.1, p.
6]]
In addition, the commenter suggests that with a sufficient supply of low GHG based feedstocks
and available proven technology exists to convert those feedstocks to methyl esters, it is neither
necessary nor desirable to reduce the biomass based biodiesel GHG threshold to 40%. [[Docket
number 2106.1, p. 6]]
Our Response:
Based on analyses conducted for this final rule, EPA has determined that several
pathways are available for the biodiesel industry which meet or exceed the advance biofuel GHG
threshold. Therefore there is no need to reduce the 50% threshold. Additionally, we are not
allowing averaging of biodiesel from vegetable oils with those produced from waste oils, fats
and greases as this is not necessary to allow compliance with the biomass-based diesel GHG
performance threshold.
Regarding standards for 2013 and beyond, EPA is not taking action on these standards as
part of this final rule. As required by EISA, EPA will establish these standards as part of future
rulemaking actions.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2392.1
Organization: The Boeing Company
Comment:
The commenter (2392) suggests EPA take steps to fully evaluate emerging advanced second
generation energy crop feedstocks, like camelina, jatropha, halophytes, and algae and avoid
categorizing them with first generation food crop feedstocks for the purposes of statutory
definitions of qualifying biodiesel including RFS2. (2392.1 Pgs. 3-6).
Our Response:
For this rulemaking lifecycle GHG analysis EPA focused on the fuels and feedstocks
that are either being used currently or that we anticipated would be used in the near term. For the
final rule analysis we did not specifically model camelina, jatropha, or halophytes as feedstocks
for biofuel production. We do however have an algae pathway as part of our final rule analysis
and show that it would qualify under the lifecycle GHG requirements. For the feedstocks not
modeled we have yet to categorize them with respect to which compliance with the thresholds.
For the final rule, EPA has adopted a petition process whereby biofuel producers can
request EPA review of new process technologies and feedstock sources. Additionally, EPA has
indicated its intention to periodically update its analyses to reflect new data and information
including the development of new technologies and feedstock sources.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249.2) does not support EPA's proposed alternative 52/48 pathway to meet the
50 percent GHG reduction requirement. The commenter believes that the proposed pathway is
impractical. Vegetable oils account for approximately 60 percent of the feedstock that is
available to meet the RFS2 Biomass-based Diesel targets, and the RFS2 volume goals may be
difficult or perhaps impossible to meet if vegetable oils are disqualified from the program. The
commenter states that there currently are not sufficient waste oils to produce enough biodiesel to
meet the RFS2 volume mandates, and may not be sufficient supply available to biodiesel
facilities to be used in the ratio suggested by EPA. [[Docket number 2249.2, pp. 13-14]]
The commenter states that if in the final regulations vegetable oils do not meet the GHG
reduction to qualify as Biomass-based Diesel or Advanced Biofuels, then a method does need to
be developed to allow for the blending of vegetable oils into the Biomass-based Diesel produced
from waste oils that do meet the GHG reduction requirement and still count as Biomass-based
Diesel. The commenter proposes allowing the blending of RINs by the obligated parties. EPA
notes this as a possible option for comment in the Proposed Rule. 74 FR 25053. But, EPA notes
that this approach would require a system with six D codes instead of four. The commenter does
not believe that additional D codes are necessary as RINs are adequately coded under the current
proposal to show compliance. [[Docket number 2249.2, p. 14]] [[See docket number 2249.2, pp.
14-15 for further discussion of the commenter's proposed approach]]
The commenter believes that EPA should expand the possible pathways for biodiesel to account
for varying feedstocks used by facilities. The commenter maintains that all vegetable oils should
qualify as Biomass-based Diesel and as a D code "2" RIN. The biodiesel industry uses a
plethora of oil based feedstocks, many of which are not described in the Proposed Rule. In the
event all virgin vegetable oils do not qualify for the Biomass-based Diesel program, then
additional sources [[see docket number 2249.2, p. 16 for list of additional sources.]] should be
incorporated into EPA's pathways, providing flexibility to biodiesel facilities to utilize a mixture
of these feedstocks. In addition, the commenter believes that Biodiesel from Fatty Acid
Distillate Streams (FADS) should be considered a waste or recycled oil for purposes of RIN
assignment and EPA should clarify the status of FADS in the final rule. [[Docket number 2249.2,
p. 15-16]]
The commenter states that EPA should allow producers to present a lifecycle analysis based on
facility-specific configurations to address both pathways that have not been analyzed by EPA
and to establish that the facility can meet the 50 percent GHG requirement based on its specific
processes. This would provide facilities incentives to continue to become more efficient and
invest in new technologies to limit their GHG emissions, promoting further reductions. The
commenter further states that the opportunity should also be provided for facilities to submit
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updated lifecycle analysis where it undergoes an improvement to change its pathways. [[Docket
number 2249.2, p. 15-16]]
For renewable fuels that are not in the lookup table (proposed Table 1 to 40 CFR 80.1426) the
commenter requests that EPA develop and document a process for the treatment of new fuels and
processes not specifically addressed by the lookup table, and that EPA agree to respond within
180 days of submission. This documentation will allow renewable fuel producers to estimate the
length of time necessary to add a particular pathway to the regulations. Additionally, the
commenter requests that EPA allow any new biodiesel, regardless of feedstock, to be able to
generate a RIN with a D code of "4" until EPA accepts the new pathway. In this way, the
biodiesel industry can continue to work toward newer and better feedstocks, but would not be
hamstrung by any delay in approving a new pathway. [[Docket number 2249.2, p. 16-17]]
Our Response:
Based on analyses conducted for this final rule, EPA has determined that several
pathways are available for the biodiesel industry which meet or exceed the advance biofuel GHG
threshold. Therefore there is no need to reduce the 50% threshold. Additionally, we are not
allowing averaging of biodiesel from vegetable oils with those produced from waste oils, fats
and greases as this is not necessary to allow compliance with the biomass-based diesel GHG
performance threshold.
For the final rule, EPA has adopted a petition process whereby biofuel producers can
request EPA review of new process technologies and feedstock sources. Additionally, EPA has
indicated its intention to periodically update its analyses to reflect new data and information
including the development of new technologies and feedstock sources.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2357
Organization: Iowa Biodiesel Board
Comment:
The commenter [[2357]] states the proposed pathway is not workable in practice and should be
viewed by the EPA as a barrier to compliance. [[2357.1 p.6]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) opposes allowing producers to average biomass-based diesels. If EPA
decides to proceed with an averaging approach to qualify vegetable oil sourced biodiesel as
biomass-based diesel, the commenter urges EPA to utilize an averaging mechanism that allows
both producers and obligated parties to average the appropriate ratio of RINs. This will provide
the greatest degree of flexibility, and flexibility will be needed to overcome geographical and
seasonal differences. [[Docket number 2393.1, pp. 40-41]]
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Document No.: EPA-HQ-OAR-2005-0161-2435
Organization: R.W. Heiden Associates LLC
Comment:
The commenter (2435) believes that the proposed biodiesel pathway is not workable in practice
and should be viewed by EPA as a barrier to compliance. Vegetable oils account for
approximately 70 percent of the feedstock that is available to meet the RFS2 Biomass-based
Diesel targets, and the RFS2 volume goals simply cannot be met if vegetable oils are disqualified
from the program. This outcome is not consistent with either sound science or sound energy
policy. Instead, the agency should fully consider the fact that feedstock supplies in the U.S. will
inherently produce an industry wide feedstock mixture that, even utilizing the unfavorable GHG
reduction values assigned by EPA, would meet the established thresholds for Advanced Biofuels.
[[Docket number 2435.1, p. 5]]
Document No.: EPA-HQ-OAR-2005-0161-2510
Organization: Iowa Renewable Energy, LLC
Comment:
Referring to achieving GHG thresholds with blending soybean oil and waste oil, the commenter
(2510) states that it is correct that to maintain a constant mixture, or blend, of recycled oils/fats
with virgin plant oils every day. Due to seasonal differences on availability, affordability, and
use acceptance, this should be looked at on an annual basis, not a portion thereof. RINs used to
meet biomass standards should have the flexibility to allow for availability of product as it is
subject to change over time. [[Docket number 2510.1, p. 6]]
Document No.: EPA-HQ-OAR-2005-0161-2549
Organization: Triton Energy LLC
Comment:
The commenter (2549.1) believes that the proposed pathway of using a 5248 feedstock ratio of
biodiesel feedstocks is not workable in practice. (2549.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2612
Organization: Citizen (sample comment letter representing 478 comment letters received
from mass comment campaign sponsored by American Soybean Association)
Comment:
The commenter (2612) identified 8 "vital flaws and concerns with the RFS2 proposed rule,"
including: "6) Biodiesel Pathway - The proposed pathway of using a 52-48 feedstock ratio of
biodiesel feedstocks is not workable in practice." (2612 p. 2)
Our Response:
Based on analyses conducted for this final rule, EPA has determined that several
pathways are available for the biodiesel industry which meet or exceed the advance biofuel GHG
threshold. Therefore there is no need to reduce the 50% threshold. Additionally, we are not
allowing averaging of biodiesel from vegetable oils with those produced from waste oils, fats
and greases as this is not necessary to allow compliance with the biomass-based diesel GHG
performance threshold.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2016
Organization: Malaysian Palm Oil Board (MPOB)
Comment:
The commenter (2016.1) is thankful that EPA allows biofuels from foreign sources such as
Malaysia. The commenter noted that on page 24917, it was stated that the agriculture crops for
renewable transportation fuels will mostly be grown in the U.S. The report alludes that whatever
little imports will mainly be for the three advanced biofuel categories but not the residual
renewable fuels category which has lower GHG savings requirements. The commenter requests
that the contribution from foreign sources be reflected in this category. Tables V.A. 1-1 and V.A.
2-1 should therefore also show the contribution from other non advanced biofuel other than corn
ethanol. (2016.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2361
Organization: Indonesian Palm Oil Commission
Comment:
The commenter (2361) is concerned about the statement that the agriculture crops for renewable
transportation fuels will mostly be grown in the U.S. The report alludes that the imports will
mainly be for the three advanced biofuel categories but not the residual renewable fuels category
which has lower GHG savings requirements. It was predicted that all non-advanced biofuel will
be from corn ethanol (U.S.) and the commenter (2361) requests that the contribution of non
advanced biofuel from other countries allowed to be imported into the U.S. (2361.pdf, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2110
Organization: Chevron
Comment:
The commenter (2110.1) believes that EPA should develop a credible, sustainable pathway in
RFS2 for palm oil-derived biofuel. The commenter noted that EPA gave limited consideration in
the NPRM to the possibility that palm oil-derived biodiesel or renewable diesel will find its way
to the U.S. and be used for compliance with the RFS. The commenter strongly recommends that
EPA consult with industry and create a sustainable pathway at its earliest convenience instead of
categorically placing such material off limits for RFS compliance. (2110.1, p.4)
Our Response:
The lifecycle analysis of fuels is based on the characteristics of the fuel pathway rather
than whether it is domestically produced or imported. The economic models project that a large
volume of feedstocks will be produced in the U.S.; however, domestic and imported fuels are
eligible for all four renewable fuel categories if they meet the lifecycle greenhouse gas reduction
thresholds and the definition of renewable biomass.
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EPA anticipates modeling the palm oil biodiesel pathway after this final rule and
including the determinations in a rulemaking within 6 months. In addition, EPA also provides a
petition process for other fuel pathways not yet analyzed.
7.5.2.4 Renewable Diesel Through Hydrotreating
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment:
The commenter also suggests that EPA utilize flexible ranges so as to afford the opportunity for
newer technologies to demonstrate and comply with the greenhouse gas ("GHG") reduction
requirements under the rule. (2408.1, pp.1-2)
Our Response:
For the final rule, EPA has adopted a petition process whereby biofuel producers can
request EPA review of new process technologies and feedstock sources. Additionally, EPA has
indicated its intention to periodically update its analyses to reflect new data and information
including the development of new technologies and feedstock sources.
7.5.2.5 Lifecycle Analysis Petition Process
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) believes that it is critical for EPA to clearly define a process for updates
in the light of, and to address developments in, among other areas:
-alternative or improved fuel pathways
-alternative or improved farming practices
-new feedstocks
-evolving LCA methodology
-emerging (international) policies (2146.1, p.7)
Document No.: EPA-HQ-OAR-2005-0161-2370
Organization: NGVAmerica
Comment:
The commenter (2370.1) noted that EPA's notice acknowledges the potential for biomethane to
play a role as a transportation fuel. Biomethane is included under the RFS Program because it
falls under the definition of advanced biofuel. EPA, however, has apparently concluded the use
of biomethane as a transportation fuel is not sufficient at this time to warrant additional analysis
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of the greenhouse gas emission benefits of biomethane. The commenter believes that there is
sufficient interest in this growing fuel to warrant taking the time to include the benefits of
biomethane in this rulemaking effort. (2370.1, p.2) (See Docket Number 2370.1, pp.2-6 for a
detailed discussion on this issue)
Document No.: EPA-HQ-OAR-2005-0161-2482
Organization: Methanol Institute
Comment:
The commenter requested that EPA maintain a role for biomethanol and include this as a
pathway.
Document No.: EPA-HQ-OAR-2005-0161-2401
Organization: Clean Energy
Comment:
The commenter (2401) urges EPA to quantify the emission reduction benefits of biogas
produced from renewable sources for transportation purposes and consider advanced biofuels
and cellulosic biofuels classifications for RIN generation. [[Docket number 2401.1, p. 1]] [[See
docket number 2401.1, pp. 1-2 for discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2354
Organization: Massachusetts Department of Environmental Protection
Comment:
The commenter (2354) strongly encourages EPA to rigorously evaluate and publish the full
lifecycle emissions for all renewable fuels. The commenter (2354) states that this information
will be useful in developing state-specific biofuel blending mandate and a regional low carbon
fuel standard. (2354.pdf, p.4-5)
Document No.: EPA-HQ-OAR-2005-0161-1036
Organization: Vision FL I, LLC
Comment:
The commenter (1036.1) noted that since fuel pathways and applicable D codes have such a
strong economic effect on ethanol sales from smaller producers (less than 100MGY), generalized
fuel definition GHG reductions and D codes will put many companies at a severe competitive
disadvantage because of the RIN generation and sales associated with those broad classes of fuel.
The commenter suggests that a process can choose to prove through the EPA's modeling (when
completely finalized) they can produce GHG reductions in upwards of 60%; which would grant
said process plant the ability to us a D code of 1 for use with the associated RINs. (1036.1, p.2)
The commenter believes that the current wording and broad GHG definitions are
"unintentionally subsidizing" the cellulosic fuel class by ignoring project/process specific
fundamentals such as production costs, best management practices, and electricity sales via by-
product combustion from other advanced biofuels. The commenter recommends that the fuel
pathway tables (VI.E.1-1, VI.E.2-1, VI.E.4-1) remain as is to be used as general look up values,
but Table III.B.2-1 should reflect fuel classes such as Class I, Class II etc...that corresponds to
the appropriate GHG lifecycle reductions. If such an approach is not acceptable, than the
commenter suggests a provision be added where a fuel producer can apply for a D code higher
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than the recommended D code from their fuel pathway as long as work is completed with the
EPA on a "case-by-case" basis to confirm through the GHG models such a reduction is indeed
feasible. (1036.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment:
The commenter (2408.1) recognizes the limited resources and the tremendous variability and
range of renewable fuels technologies which are currently exploring their commercial
applicability under the proposed RFS2 rules. The commenter urges that EPA create an expedited
process that would allow individual technologies utilizing specific feedstocks to be able to
demonstrate their various greenhouse gas reduction capabilities.
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter also believes that EPA's treatment of new fuels and pathways does not
adequately protect investment or recognize the improved efficiencies of new facilities. (2329.1,
p. 100) [[See Docket Number 2329.1, p. 100-101 for a more detailed discussion of this issue]]
Document No.: EPA-HQ-OAR-2005-0161-2115.1
Organization: Corn Plus
Comment:
The commenter (2115) states that because they utilize a production process that reduces GHG
emissions in additional respects, we request that EPA also consider these components and
establish a fuel pathway for DDS Fuel in Table 1 to §80.1426 that recognizes the benefits of our
process. The proposed fuel type we propose is "Dewatered Distiller Solubles." The feedstock is
"corn mash." The production process requirements are "Dry mill plant- Process heat derived
from biomass- Additional energy requirements met from 25% minimum on site renewable
energy power generation- 25% minimum distillers wet grains." We would propose that the D
code for this pathway is 3, corresponding to the fuel's proper categorization as advanced biofuel
("Advanced Biofuel").
Document No.: EPA-HQ-OAR-2005-0161-2099
Organization: Honeywell International, Inc.
Comment:
The commenter (2099.1) believes that EPA should include green gasoline by example in the
definition of advanced biofuel. (2099.1, p.14)
Document No.: EPA-HQ-OAR-2005-0161-2004
Organization: NxENRG
Comment:
The commenter (2004.1) requests that EPA expressly acknowledge the eligibility of our fuel,
methanol, as being eligible to be an advanced biofuel under 42 USC §7545(o)(l)(A)(ii)(VI):
"Butanol and other alcohols produced through the conversion of organic matter from renewable
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biomass." The commenter requests that renewable methanol be specifically approved for the
following reasons:
1. Conversion of syngas to methanol is a proven commercial scale technology that has been
successfully utilized for over 60 years,
2. Methanol is a proven transportation fuel used in over 15,000 cars in California in the
1990s that were manufactured by U.S. automakers,
3. Yield of fuel per ton of feedstock is higher and thus total Btu energy yield per ton
exceeds ethanol when utilizing thermochemical gasification technology,
4. The Open Fuels Standard, a Bill currently in congressional sub committees includes
methanol as an M85 blend with gasoline, putting it on an equal footing with ethanol in the Bill.
(2004.1, p.3)
Our Response:
EPA recognizes that we did not analyze all pathways that might be feasible through 2022.
For those fuel pathways that are different than those pathways EPA has listed in today's
regulations, EPA is establishing a petition process whereby a party can petition the Agency to
consider new pathways for GHG reduction threshold compliance. The petition process is meant
for parties with serious intention to move forward with production via the petitioned fuel
pathway and who have moved sufficiently forward in the business process to show feasibility of
the fuel pathway's implementation. We welcome parties to utilize the petition process described
below to request EPA to examine additional pathways. For full detail on the petition process, see
the Preamble Section V.C and §80.1416.
In addition, EPA also plans to continue to model additional pathways we expect will be
commercially available in the U.S. as soon as sufficient information is available to complete a
quality lifecycle assessment.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2519
Organization: Canada, Foreign Affairs and International Trade
Comment:
The commenter (2519) believes it is important to note that lifecycle emissions of Canadian
biofuel production may be different from those in the U.S., and that certain Canadian feedstocks
(i.e., wheat and canola) are not included in the EPA proposed measure. Therefore, the
commenter states that it would not be appropriate to apply U.S. emission factors to Canadian
production. The commenter would welcome the opportunity to work with the U.S. to develop
emission factors for fuel production pathways specific to Canada. [[Docket number 2519.1, p.
1]]
Our Response:
The application of the lifecycle analysis methodology is neutral to country of origin.
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Fuels with the same feedstock, fuel production technology, as a pathway that has been
analyzed will be treated the same as the relevant modeled pathway (i.e., corn ethanol, butanol,
biodiesel from soy, waste and algae, sugarcane ethanol, and cellulosic including stover and
switchgrass).
EPA recognizes that we did not analyze all pathways that might be feasible through 2022.
For those fuel pathways that are different than those pathways EPA has listed in today's
regulations, EPA is establishing a petition process whereby parties, both domestic and foreign,
can petition the Agency to consider new pathways for GHG reduction threshold compliance.
The petition process is meant for parties with serious intention to move forward with production
via the petitioned fuel pathway and who have moved sufficiently forward in the business process
to show feasibility of the fuel pathway's implementation. We welcome parties, both domestic
and foreign, to utilize the petition process described below to request EPA to examine additional
pathways. For full detail on the petition process, see the Preamble Section V.C and §80.1416.
7.6 Total GHG Emission Reductions
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2149
Organization: Dynamic Fuels, LLC
Comment:
The commenter (2149.1) supports reducing the GHG threshold for biomass-based diesel and
advanced biofuel to 40 percent. (2149.1, p.5)
Our Response:
Based on analyses conducted for this final rule, EPA has determined that several
pathways are available for the biodiesel industry which meet or exceed the advance biofuel GHG
threshold. Therefore there is no need to reduce the 50% threshold. Additionally, we are not
allowing averaging of biodiesel from vegetable oils with those produced from waste oils, fats
and greases as this is not necessary to allow compliance with the biomass-based diesel GHG
performance threshold.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2156
Organization: Georgia Forestry Commission
Comment:
The commenter (2156) agrees that GHG emission reductions using woody biomass from forests
meet the 60% reduction necessary for the cellulosic fuels, as suggested by EPA. The commenter
suggests that since biomass production from managed forests does not result in the loss of forests
to dedicated crops, there should be no indirect effect on land use. Other analyses of the
differences between biomass production from managed forests and biomass production from
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short rotation woody crops (switch grass, hybrid poplar, etc.) should be done prior to any change
in the proposed D values. (2156.1.docx, p.5)
Our Response:
EPA did not have time to analyze the LCA GHG impacts of biofuel produced from
managed forest feedstock, but intends to do so within 6 months of this final rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter believes that basing LCA GHG benefits on a single future calendar year (2022)
broadens the uncertainty of EPA's estimates. The commenter cites several reasons for their
position, including: use of 2022 for biofuels versus 2005 baseline for petroleum; the fact that
2022 is the year in which biofuel volumes are at maximum levels; and that larger marginal
impacts of RFS2 biofuel volumes occur prior to 2022.[[Docket number 2233.2, pp. 48-49]]
Our Response:
We continue to focus our final rule analyses on 2022 results for two main reasons. First,
it would require an extremely complex assessment and administratively difficult implementation
program to track how biofuel production might continuously change from month to month or
year to year. Instead, it seems appropriate that each biofuel be assessed a level of GHG
performance that is constant over the implementation of this rule, allowing fuel providers to
anticipate how these GHG performance assessments should affect their production plans.
Second, it is appropriate to focus on 2022, the final year of ramp up in the required volumes of
renewable fuel as this year. Assessment in this year allows the complete fuel volumes specified
in EISA to be incorporated. This also allows for the complete implementation of technology
changes and updates that were made to improve or modeling efforts. For example, the inclusion
of price induced yield increases and the efficiency gains of DCs replacement are phased in over
time. Furthermore, these changes are in part driven by the changes in earlier years of increased
biofuel use.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment:
The commenter (2408.1) EPA initially should take full advantage of the statutory authority
granted to it by Congress and reduce the requirements by the full 10 percent. Such action would
enable the producers and the science to have the maximum flexibility and time to develop and
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perfect technologies and feedstocks so as to not only meet the initial GHG reduction
requirements but also to lay the template for enhanced reductions in the future. (2408.1, p.3)
Our Response:
EPA is not finalizing any adjustments to the lifecycle GHG thresholds as the Agency has
determined that such adjustments are not necessary given the threshold determinations explained
in the final rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2419
Organization: Cargill Incorporated
Comment:
The commenter (251 1.1) noted that the American Soybean Association and the National
Biodiesel Board have raised substantial arguments with merit regarding the data on the nitrogen
fixation of soybean row crops and on the lack of co-product credit for glycerin. Soybeans are not
given the proper NOx credit from emissions, which skew the GHG emission reduction
calculation. The 2006 Guidelines for National Greenhouse Gas Inventories by the
Intergovernmental Panel on Climate Change (IPCC) concludes that nitrogen fixed in soil by
soybeans should not be considered a GHG emission. The commenter noted that EPA did not
incorporate the IPCC's updated nitrogen findings and thus attributes excess nitrogen emissions to
soybean cultivation. (2511.1, p. 5)
Our Response:
The proposal analysis calculated NzO emissions from domestic fertilizer application and
nitrogen fixing crops based on the amount of fertilizer used and different regional factors to
represent the percent of nitrogen (N) fertilizer applied that result in NzO emissions. The proposal
analysis NzO factors were based on existing DAYCENT modeling that was developed using the
1996 IPCC guidance for calculating NzO emissions from fertilizer applications and nitrogen
fixing crops. We identified in the proposal that this was an area we would be updating for the
final rule based on new analysis from Colorado State University using the DAYCENT model.
This update was not available at time of proposal.
The NzO emission factors used in the proposal overestimated NzO emissions from
nitrogen fixing crops, because they were based on the 1996 IPCC guidance for NzO accounting.
As an update in 2006, IPCC guidance was changed such that biological nitrogen fixation was
removed as a direct source of NzO because of the lack of evidence of significant emissions
arising from the fixation process itself. IPCC concluded that the NzO emissions induced by the
growth of legume crops/forages may be estimated solely as a function of the above-ground and
below-ground nitrogen inputs from crop/forage residue. This change effectively reduces the
NzO emissions from nitrogen fixing crops like soybeans and nitrogen fixing hay from the 1996
to 2006 IPCC guidance.
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Therefore, as part of the update to new N20 emission factors from DAYCENT used for
our final rule analysis we have updated to the 2006 IPCC guidance which reduces the N20
emissions from soybean production. This has the effect of reducing lifecycle GHG emissions for
soybean biodiesel production.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2486
Organization: Primafuel, Inc.
Comment:
Regarding legislative intent, the commenter (2486) believes that inclusion of GHG regulations in
the renewable fuel standard was intended to reduce the overall GHG emissions of the
transportation sector, not simply to regulate the renewable fuels component of the transportation
fuels mix. As such, regulatory rules which serve to reduce the GHG emissions of renewable
fuels, while causing an increase in GHG from other fuels or even sectors of the economy would
almost certainly violate the intent of EISA 2007 and RFS2. [[Docket number 2486.1, p. 3]]
Our Response:
EISA requires that the lifecycle GHG emissions of a qualifying 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. 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 form land use changes) related to the full lifecycle,
including all stages of fuel and feedstock production, distribution and use by the ultimate
consumer.
EPA also analyzed the overall GHG emission impacts of this rulemaking in parallel with
the lifecycle analysis performed to develop the individual fuel thresholds. The same sources of
emissions apply such that this analysis includes the effects of three main areas: a) emissions
related to the production of biofuels, including the growing of feedstock (corn, soybeans, etc.)
with associated domestic and international land use change impacts, transport of feedstock to
fuel production plants, fuel production, and distribution of finished fuel; b) emissions related to
the extraction, production and distribution of petroleum gasoline and diesel fuel that is replaced
by use of biofuels; and c) difference in tailpipe combustion of the renewable and petroleum
based fuels.
Based on the range of results for the international land use change emissions the overall
annualized average emission reductions of the rule could range from -136 to -140 million metrics
tons of C02-eq. emissions.
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7.7 Lifecycle GHG Thresholds
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1036
Organization: Vision FL I, LLC
Comment:
The commenter (1036.1) recommends that under Table III.B.2-1 of the NPRM, the "Advanced
Biofuel" reduction threshold of 50% be reduced to 44%. This would align with the GHG
lifecycle modeling that has been completed thus far for Brazilian Sugarcane imports (EPA-HQ-
OAR-2005-0161-0938.3). Considering that sugarcane ethanol (or "sugar juice ethanol") is the
only commercially viable pathway that can meet the requirements for the "Advanced Biofuel"
classification volumes in the near term; the EPA and "public interests" would be putting this
program at a great disadvantage by keeping the GHG reduction threshold at 50%. Domestic
"sugar ethanol" projects have much greater GHG reductions than the Brazilian import cases due
to International Land Use Change reductions however; the volumes required by RFS2 cannot be
met by domestic projects for approximately four to five years considering the construction
constraints due to the current credit market. (1036.1, pp.1-2)
Our Response:
Based on comments from UNICA and Brazilian researchers we have updated our
imported sugarcane ethanol lifecycle analyses which have effectively improved the lifecycle
GHG performance for imported sugarcane ethanol beyond 50%. As such, imported sugarcane
ethanol meets the advanced biofuel lifecycle thresholds and no adjustment to the threshold is
necessary. At this time we also assume that sugarcane ethanol produced in countries other than
Brazil (e.g., U.S. or Caribbean) would also meet the threshold compliance value.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2137
Organization: Brazilian Sugarcane Industry Association (UNICA)
Comment:
The commenter (2137.1) states that EPA should adjust the advanced fuel lifecycle threshold to
40% in the final rule. While the commenter believes that there is abundant scientific evidence
that sugarcane ethanol reduces GHG emissions compared to conventional gasoline by up to 90%,
they concur that the threshold should be set at 40% at this time. Furthermore, if EPA does not
update the lifecycle analysis in the Final Rule, sugarcane ethanol would not qualify as an
advanced biofuel at the 50% GHG threshold. The commenter believes this result would be
unreasonable given the uncertainty in EPA's lifecycle analysis and the clear Congressional intent
to include sugarcane ethanol as an eligible advanced biofuel. [[Docket number 2137.1, p. 13]]
In addition, to further emphasize the need to properly characterize sugarcane as an advanced
biofuel is EPA's own reasonable conclusion that any "advanced biofuel produced above and
beyond what is required for the advanced biofuel requirements could reduce the amount of corn
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ethanol needed to meet the total renewable fuel standard. The commenter fully supports this
conclusion, which is supported by the record. [[Docket number 2137.1, p. 14]]
The commenter (2137.1) cautions EPA against only increasing the conventional biofuel mandate
and presuming that all biofuels will be counted in the conventional pool. Congressional intent
and President Obama clearly encourages the use of progressively cleaner, renewable fuels. The
commenter believes that EPA has an abundance of information to make a determination that
sugarcane ethanol meets the advanced biofuels lifecycle threshold and should implement the
RFS2 without delay in 2010. [[Docket number 2137.1, p. 17]]
Our Response:
We have not adjusted the threshold to 40% for the final rule because based on comments
from UNICA as well as others we were able to incorporate several updates to our lifecycle
analyses for imported sugarcane ethanol. The final rule results indicate that imported sugarcane
ethanol meets the 50% GHG threshold for advanced biofuel and as such, no adjustment to the
advanced biofuel threshold is necessary.
Regarding the recommendation to implement the RFS2 biofuel standards for 2010, this is
what EPA is doing.
7.8 Peer Review
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) does not support EPA's peer review process. EPA's process was
closed to the public, and has the appearance of bias. Peer review guidance emphasizes public
participation during the peer review process. (2329.1, p. 29) [[See Docket Number 2329.1,
pp.29-30 for a more detailed discussion of the commenter's concerns with the peer review
process]]
Our Response:
To ensure the Agency made its decisions for this final rule on the best science available,
EPA conducted a formal, independent peer review of key components of the analysis. The
reviews were conducted following the Office of Management and Budget's peer review guidance
that ensures consistent, independent government-wide implementation of peer review, and
according to EPA's longstanding and rigorous peer review policies. In accordance with these
guidelines, EPA used independent, third-party contractors to select highly qualified peer
reviewers. The independent contractors autonomously selected reviewers who are widely
published in peer reviewed journals and recognized as leading experts in their respective fields.
After identifying the most qualified individuals, the independent contractors screened candidates
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for possible conflict of interest, bias due to strong editorial positions taken on issues related to
this rulemaking, contractual relationships to EPA, and overall perception of independence from
the Agency. The reviewers selected are leading experts in their respective fields, including
lifecycle assessment, economic modeling, remote sensing imagery, biofuel technologies, soil
science, agricultural economics, and climate science. The full results of the peer review were
added to the public docket during the comment period for this rulemaking. The comments
provided by the expert reviewers were considered along with all of the public comments that
EPA received.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1050
Organization: American Council for Ethanol (ACE)
Comment:
The commenter (2101.1) is pleased that EPA decided to initiate an independent peer review to
help respond to stakeholder concerns and to ensure that the agency makes decisions with respect
to RFS2 and particularly ILUC on the best available science. Unfortunately, the commenter is
shocked and deeply concerned that Timothy Searchinger, the attorney who has created
extraordinary controversy with his unrelenting attacks launched against ethanol and American
agriculture, was named to the peer review panel. While some of the individuals EPA relied upon
to conduct the peer review of the lifecycle greenhouse gas assumptions have impeccable
credentials, because Searchinger is so divisive, his service on the peer review perhaps
unnecessarily tarnishes the efforts of the other esteemed individuals named to the panel to
undertake this critically important work. (2101.1, p. 14)
The commenter noted that by insisting in the RFS2 proposed rule on arbitrarily ascribing GHG
emissions to biofuels that cannot be shown empirically and which depend upon tortured use of
computer models lacking the confidence of so many scientists, EPA has already exposed itself to
a barrage of criticism. But to make matters worse, the naming of Timothy Searchinger to the
peer review panel simply invites cynicism about the motives of EPA about the basic veracity of
the lifecycle GHG analysis, and about the potential use of the lifecycle analysis tool as a political
weapon against other energy sources in future GHG reduction programs. (2101.1, p. 14)
Our Response:
The reviews were conducted following the Office of Management and Budget's peer
review guidance that ensures consistent, independent government-wide implementation of peer
review, and according to EPA's longstanding and rigorous peer review policies. In accordance
with these guidelines, EPA used independent, third-party contractors to select highly qualified
peer reviewers. The independent contractors autonomously selected reviewers who are widely
published in peer reviewed journals and recognized as leading experts in their respective fields.
EPA wanted to avoid the appearance of selecting or denying candidates based on
previously stated positions. That is why the Agency followed federal guidelines and used third-
party contractors to independently select the reviewers. The independent contractors selected
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reviewers based on their expertise in the relevant subject matter areas. It is not surprising that
many of the most highly qualified individuals have done previous research or made public
statements about biofuels.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2390
Organization: Governors' Biofuels Coalition
Comment:
The commenter (2390.1) recommends and supports the use of a peer review approach to guide
IILUC theory. However, some of the reviewers selected by EPA lack scientific training and are
primarily anti-biofuel advocates. This casts doubt on a process that included many qualified
expert reviewers who provided valuable input in a good faith effort to reach a reasonable
consensus on this issue. (2390.1, p.l)
Document No.: EPA-HQ-OAR-2005-0161-2189
Organization: Technical Consultant for Enzyme Development Corporation and
Genencor International
Comment:
The commenter (2189) noted that the proposal is based assumptions and analyses that aren't the
product of good science. The reviewers in the peer review process were not competent to assess
the assumptions and science involved in EPA's proposed rules. They were too far removed from
agricultural business and technology. (2189, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2112
Organization: Biomass Rules, LLC
Comment:
The commenter (2112.1) noted that nearly all the peer reviewers were biased toward greenhouse
gas reduction. In fact, potential peer-reviewers were screened subjectively. This subjective
screening created biases to the pool of peer reviewers. This limits the objectivity of the results.
(2112.1, p.7) (See Docket Number 2112.1, pp.6-7 or more discussion on the peer review process)
Our Response:
To ensure the Agency made its decisions for this final rule on the best science available,
EPA conducted a formal, independent peer review of key components of the analysis. The
reviews were conducted following the Office of Management and Budget's peer review guidance
that ensures consistent, independent government-wide implementation of peer review, and
according to EPA's longstanding and rigorous peer review policies. In accordance with these
guidelines, EPA used independent, third-party contractors to select highly qualified peer
reviewers. The independent contractors autonomously selected reviewers who are widely
published in peer reviewed journals and recognized as leading experts in their respective fields.
After identifying the most qualified individuals, the independent contractors screened candidates
for possible conflict of interest, bias due to strong editorial positions taken on issues related to
this rulemaking, contractual relationships to EPA, and overall perception of independence from
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the Agency. The reviewers selected are leading experts in their respective fields, including
lifecycle assessment, economic modeling, remote sensing imagery, biofuel technologies, soil
science, agricultural economics, and climate science.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2528
Organization: U.S. Congress, House of Representatives
Comment:
Upon seeing the peer review analysis and the designated peer reviewers, the commenter (2528)
is disappointed by the absence of objectivity and a lack of unbiased opinions in the process. The
commenter is dismayed by EPA's disregard for an approach that is fair and balanced. The
commenter is also frustrated that the United States Department of Agriculture, which has
extensive knowledge related to this issue, was in no way included in the peer review process.
Instead, individuals with long-standing agendas contrary to the goals of the RFS2 were given
prominent placement on the review panel. (2528, p.2) (See Docket Number 2528, pp.2-3 for
more discussion on this issue)
Our Response:
The reviews were conducted following the Office of Management and Budget's peer
review guidance that ensures consistent, independent government-wide implementation of peer
review, and according to EPA's longstanding and rigorous peer review policies. In accordance
with these guidelines, EPA used independent, third-party contractors to select highly qualified
peer reviewers. The independent contractors autonomously selected reviewers who are widely
published in peer reviewed journals and recognized as leading experts in their respective fields.
EPA wanted to avoid the appearance of selecting or denying candidates based on
previously stated positions. That is why the Agency followed federal guidelines and used third-
party contractors to independently select the reviewers. The independent contractors selected
reviewers based on their expertise in the relevant subject matter areas. It is not surprising that
many of the most highly qualified individuals have done previous research or made public
statements about biofuels.
Beginning early in this rulemaking process and continuing throughout the development
of this final rule, EPA held hundreds of meetings with stakeholders, including government,
academia, industry, and non-profit organizations, to gather expert technical input. Our work was
also informed heavily by consultation with other federal agencies. For example, we have relied
on the expert advice of USDA and DOE, as well as incorporating the most recent inputs and
models provided by these Agencies. Dialogue with the State of California and the European
Union on their parallel, on-going efforts in GHG lifecycle analysis also helped inform EPA's
methodology. A key result of our outreach effort has been awareness of new studies and data
that have been incorporated into our final rule analysis.
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What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2245
Organization: Illinois Corn Growers Association, et. al.
Contributors to this comment letter include: Iowa Corn Growers Association, Iowa Soybean
Association, Illinois Soybean Association, Illinois Renewable Fuels Association, Kentucky
Soybean Association, Minnesota Soybean Growers Association, Missouri Corn Growers
Association, Missouri Soybean Association, Monsanto, the National Corn to Ethanol Research
Center, Nebraska Corn Board, Nebraska Soybean Association, Novozymes, Ohio Soybean
Association, South Dakota Soybean Association, University of Illinois Chicago, Energy
Resources Center, University of Illinois Champaign-Urbana plant breeding, animal nutrition and
agronomy, DuPont, Ethanol Technologies, John Deere, and the U.S. Grains Council
Comment:
The commenters (2245.1) believe that EPA did not follow appropriate procedures or guidelines
in conducting a peer review and needs to repeat the process once the rule and docket are
complete. The commenters were disappointed in the lack of a transparent process for the
identification of the capabilities required for peer reviewers or of a transparent selection process.
The reviewers involved clearly lacked the appropriate breadth and depth of expertise to
adequately review and comment on the extensive technical elements of the proposal and a
number of the reviewers lacked impartiality. The commenters would like a subsequent peer
review be commissioned once the docket is complete. The request for candidates, selection
criteria and selection process must then be conducted in an open and transparent manner with a
focus on the capabilities and independence of the reviewers. (2245.1, pp.27-28)
Document No.: EPA-HQ-OAR-2005-0161-1989
Organization: Iowa Farm Bureau Federation (IFBF)
Comment:
The recent EPA peer review panel also reaffirmed many of the concerns the IFBF has about the
EPA's proposed rule and rulemaking process. The panel expressed concern about using these
incomplete and unreliable models to measure ILU changes and indicated that they didn't have
enough time to review this convoluted and complicated proposal. We are also concerned that
there is no evidence that the U.S. Department of Agriculture or any other federal agencies with
expertise on these issues were included in the peer review process. This is exactly why the
House of Representatives voted in the climate change bill to limit EPA's ability to implement
international ILU provisions in the RFS-2.
We respectively disagree with the EPA assessment "...that there were no direct and substantial
[conflict of interest] or appearance of impartiality issues that would have prevented a peer
reviewer's comments from being considered by EPA." Dr. Timothy Searchinger, for instance,
has been an outspoken critic of biofuels and is clearly not impartial. His inclusion on the peer
review panel casts serious doubt on the sincerity of EPA in wanting an unbiased, critical review
of the issues associated with life-cycle analysis and the use of models to assess causality.
Our Response:
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RFS2 Summary and Analysis of Comments
EPA's peer review process was fully transparent. All of the peer review documents,
including explanations from the independent contractors about how reviewers were selected,
were made publicly available on EPA's website and in the public docket for this rulemaking.
The reviews were conducted following the Office of Management and Budget's peer
review guidance that ensures consistent, independent government-wide implementation of peer
review, and according to EPA's longstanding and rigorous peer review policies. In accordance
with these guidelines, EPA used independent, third-party contractors to select highly qualified
peer reviewers. The independent contractors autonomously selected reviewers who are widely
published in peer reviewed journals and recognized as leading experts in their respective fields.
After identifying the most qualified individuals, the independent contractors screened candidates
for possible conflict of interest, bias due to strong editorial positions taken on issues related to
this rulemaking, contractual relationships to EPA, and overall perception of independence from
the Agency. The reviewers selected are leading experts in their respective fields, including
lifecycle assessment, economic modeling, remote sensing imagery, biofuel technologies, soil
science, agricultural economics, and climate science.
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. As part of this ongoing effort, we
will ask for the expert advice of the National Academy of Sciences, as well as other experts, and
incorporate their advice and any updated information we receive into a new assessment of the
lifecycle GHG emissions performance of the biofuels being evaluated in this final rule. EPA will
request that the National Academy of Sciences evaluate the approach taken in this rule, the
underlying science of lifecycle assessment, and in particular indirect land use change, and make
recommendations for subsequent lifecycle GHG assessments on this subject. As specified by
EISA, if EPA revises the analytical methodology for determining lifecycle greenhouse gas
emissions, any such revision will apply to renewable fuel from new facilities that commence
construction after the effective date of the revision.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2079
Organization: AE Biofuels, Inc.
Comment:
With regards to the peer review process, the commenter (2079.1) encourages EPA to include
experts from the biodiesel industry in the peer review process. Throughout the peer review
process, the commenter encourages EPA to provide reviewers with additional independent
studies and analyses that will help place the EPA lifecycle analysis in context and provide a
holistic view of the debate over indirect effects. (2079.1, p.9)
Our Response:
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Chapter 7: Impacts of the Program on Greenhouse Gas (GHG) Emissions
The reviews were conducted following the Office of Management and Budget's peer
review guidance that ensures consistent, independent government-wide implementation of peer
review, and according to EPA's longstanding and rigorous peer review policies. In accordance
with these guidelines, EPA used independent, third-party contractors to select highly qualified
peer reviewers. The independent contractors autonomously selected reviewers who are widely
published in peer reviewed journals and recognized as leading experts in their respective fields.
After identifying the most qualified individuals, the independent contractors screened candidates
for possible conflict of interest, bias due to strong editorial positions taken on issues related to
this rulemaking, contractual relationships to EPA, and overall perception of independence from
the Agency. The reviewers selected are leading experts in their respective fields, including
lifecycle assessment, economic modeling, remote sensing imagery, biofuel technologies, soil
science, agricultural economics, and climate science.
EPA provided the expert reviewers with all of the relevant materials needed to conduct a
thorough and detailed review of EPA's analysis. The expert reviewers, as well as the public
commenters, referenced a wide range of additional studies and sources of data to inform there
responses. One of the most important outcomes of the peer review and EPA's efforts to
maximize stakeholder feedback was the consideration of new studies and data sources in our
lifecycle analysis for the final rule.
1 Amaral W. A. N., J.P. Marinho, R. Tarasantchi, A. Beber, and E. Giuliani. 2008, Environmental sustainability of
sugarcane ethanol in Brazil. In: Zuurbier P.; van de Vooren J. (eds) Sugarcane ethanol: Contribution to climate
change mitigation and the environment. Wageningen Academic, Wageningen, pp 121-124.
11 Smith, D.M., N.G. Inman-Bamber and P.J. Thorburn. 2005. Growth and function of the sugarcane root system.
Field Crops Research 92: 169-183.
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(RFS2) Summary and Analysis of
Comments
Chapter 8
Impacts on Criteria (NAAQS) and
Toxic Pollutants
Assessment and Standards Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
v>EPA
United States EPA-420-R-10-003
Environmental Protection r , „„.„
Agency February 2010
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8 IMPACTS ON CRITERIA (NAAQS) AND Toxic POLLUTANTS
8.1 Fuel Production and Distribution Impacts of the Proposed Program 8-1
8.2 Vehicle and Equipment Emission Impacts of Fuel Program 8-7
8.3 Air Quality Impacts 8-9
8.3.1 Air Quality Modeling Methodology 8-9
8.3.2 Impacts of Proposed Standards on Future Air Quality and Mitigation
of Negative Impacts 8-14
8.4 Health and Environmental Effects of Criteria and Air Toxic Pollutants 8-19
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RFS2 Summary and Analysis of Comments
8 IMPACTS ON CRITERIA (NAAQS) AND Toxic POLLUTANTS
What We Proposed:
The comments in this section correspond to Section VII of the preamble to the proposed
rule and address impacts of the program on non-GHG emissions. A summary of the comments
received and our response to those comments are located below (and in Section VI of the
preamble to the final rule).
8.1 Fuel Production and Distribution Impacts of the Proposed Program
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) is concerned about the assessment of non-GHG emissions reported in the
DRIA. The commenter lists specific concerns and refers EPA to a report that provides an in-
depth discussion of the issues. [[Docket number 2393.1, p. 72]] [[See docket number 2393.1, pp.
71-73 and docket number 2393.7, Attachment 6 for further discussion of this issue.]]
Our Response:
EPA's responses are made directly to the specific comments outlined in the supporting
report authored by Sierra Research, summarized below. Many of these comments pertain to
vehicle and equipment emission impacts, but are included in this section to keep responses to the
Sierra report contiguous.
What Commenter Said:
Sierra Research expressed concern (pp. 12-13, 16-17) about the analysis using multiple sources
of fuel consumption, VMT and fuel economy - namely AE02007, AE02008 and MOVES. In
particular, Sierra pointed to discrepancies in fuel economy, vehicle class mix and VMT
projections between AEO and MOVES as a "fundamental flaw".
Our Response:
The primary reason MOVES and AEO fuel economies differ is because AEO reports a
"CAFE-space" value, while MOVES deals directly in on-road fuel economy; EPA estimates on-
road fuel economy to be about 20 percent lower than CAFE values. Additional differences are
tied to different levels of fuel economy standards. While Sierra is correct that previous releases
of MOVES have not accounted for the 2006 rules mandating increase in truck CAFE standards,
these were accounted for in the RFS2 analysis. The primary difference between AEO2007 and
AE02008 is the inclusion of the EISA fuel economy mandates, which is why AE02008 was
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Chapter 8: Impacts on Criteria (NAAQS) and Toxic Pollutants
used for the overall gasoline volume estimates in the rule. These as of yet have not been
accounted for in MOVES because the EISA requirements are being implemented through light-
duty greenhouse gas standards which have not yet been finalized.
In general, AEO was used for the projections of energy demand in the rule. MOVES was
employed where supplemental information, not available in AEO, was needed—mainly non-
GHG emission estimates, and the breakdown of car and truck sales. For non-GHG estimates, the
fuel economy issues raised by Sierra aren't relevant, but Sierra's comment regarding inconsistent
VMT is. MOVES was updated with AE02009 VMT for the air quality and final rule analysis,
so it does reflect the lower VMT growth contained in the AEO updates. With respect to
car/truck sales breakdown, this analysis was updated to reflect the car/truck split used in the light
duty greenhouse gas proposal, which is consistent with AE02009.
What Commenter Said:
Sierra Research raised the concern (pp. 32-33) that using the pre-aggregation function in
MOVES (temporally and geographically) would affect the accuracy of the modeled impacts, and
suggested a sensitivity analysis to assess this. Sierra also expressed concern with the fuel
"binning" approach in MOVES, stating it would be critical to perform a reanalysis when
MOVES was updated with the Complex and Predictive models.
Our Response:
We acknowledge that using a limited number of months affects modeled impacts; we
found that with MOVES this impact is similar in magnitude to that quoted by Sierra from the
RFS1 analysis, and does not play an important role in the general magnitude and direction of the
estimated impacts. For the air quality modeling work, the model was run over all 12 months.
With respect to geographic pre-aggregation, the model develops a fuel supply which retains the
market share of fuels at the county level rather than combining fuel properties into an average
fuel. On the last point regarding fuel "binning", in accordance with Sierra's comment the
analysis for the final rule was redone primarily to allow the updates based on Complex and
Predictive model to be incorporated.
What Commenter Said:
Sierra Research states on page 34 that biodiesel impacts would likely increase if the new
MOVES estimates were used, as the baseline emissions are expected to increase significantly
between MOVES and MOBILE. On page 36 Sierra pointed out that not clear how biodiesel was
apportioned between the onroad and offroad fleet.
Our Response:
Biodiesel was apportioned entirely to the onroad fleet, and Sierra's comment regarding
the magnitude of increase using MOVES is true, although we did not reflect this in the final rule
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RFS2 Summary and Analysis of Comments
as the MOVES heavy-duty numbers were not final at the time of the analysis. We estimate that
the NOx increase due to the use of biodiesel would be closer to 4,000 tons nationwide, vs. 1,300
tons used in the final rule analysis (the NPRM used an estimate of around 400 tons, but this was
corrected in the final rule as it did not account for the dilution of biodiesel into B20 and lower
blends). We project that this increase is still very small relative to the national NOx inventory
(less than 0.05 percent).
What Commenter Said:
Sierra Research commented on page 35 that EPA apparently estimated naphthalene for E85
vehicles incorrectly by combining naphthalene emissions data from one test program and PM
from another to develop toxic to PM ratios which were then applied to PM emissions.
Our Response:
This is not what EPA did. EPA scaled the naphthalene to PM ratio from EO vehicles by
0.15, assuming naphthalene would decrease by the volume of ethanol in the fuel, which is not
expected to produce any naphthalene emissions.
What Commenter Said:
On page 35, Sierra Research said that their analysis of the datasets we used to develop butadiene
to VOC ratios for E85 did not show a statistically significant difference between vehicles
running on EO versus E85.
Our Response:
Our analysis of E85 data showed the butadiene to VOC ratio is roughly 5 times lower,
which is roughly what one would expect from dilution with ethanol.
What Commenter Said:
On page 35, Sierra Research stated that their analysis showed a roughly 6000% increase in
acetaldehyde emission rates for vehicles running on E85 versus EO. On page 36, they showed
inventory results in tons per summer day that indicated a roughly 10-fold higher increase in
acetaldehyde than EPA estimated for the draft RIA's "more sensitive" control case. They
explain this, stating, "For acetaldehyde, vastly different assumptions regarding acetaldehyde
emissions from FFVs operating on E85 result in the DRIA more-sensitive values being about an
order of magnitude lower."
Our Response:
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As detailed in Section 3.1.1.2.2 of the RIA, EPA's analysis of acetaldehyde emissions
from E85 were based on data from the same two studies Sierra Research relied on, plus
additional data from EPA's Office of Research and Development which was consistent with the
other two studies. Thus, it is difficult for us to understand how Sierra Research found an
inventory impact an order of magnitude higher, as there is no documentation of how they derived
this estimate. As noted in our response to API's comment regarding acetaldehyde emissions
below, we developed the acetaldehyde emissions based on ratios to VOC rather than direct
application of this percent increase to an EO emissions baseline, and perhaps a difference in how
the increase was applied explains the large difference Sierra reports.
What Commenter Said:
On page 43 Sierra mentioned inconsistency in ag equipment emissions between FASOM ag fuel
use and NONROAD model.
Our Response:
There is no way they would be consistent. They're totally different models.
What Commenter Said:
On page 44, Sierra commented on the lack of accounting for locations where marginal
production of fertilizer and pesticides is going to occur.
Our Response:
We acknowledge that using a uniform distribution is a simplification; developing an
analysis of localized impacts was beyond the scope possible for the rule.
What Commenter Said:
Sierra Research stated on page 46, "the total VOC emissions increase presented (32,278 tons per
day) [by EPA] is smaller than the sum of the increases of ethanol, benzene, acetaldehyde,
formaldehyde, and acrolein (43,754 tons per day). Given that these five species fall within the
EPA definition for VOC, it is not possible that the method used to estimate the VOC impacts is
consistent with the method used to produce the estimates for the specific compounds. Similarly,
on page 46, Sierra Research notes a potential inconsistency in impacts of renewable fuel
transport, with an increase in ethanol emissions much larger than the increase in total VOC.
Our Response:
These apparent discrepancies are, in fact, possible because some sources have increases
in total VOC and others have decreases, and these sources have varying levels of ethanol and air
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RFS2 Summary and Analysis of Comments
toxics. For instance, while there is an overall increase in total VOC, there are also VOC
reductions from displaced gasoline production and distribution (see impacts spreadsheet, Results
Diff tab), and there are, of course, no ethanol emissions associated with gasoline production and
distribution.
What Commenter Said:
Sierra mentioned on page 47 that the assumption that electricity can be generated from biomass
without resulting in non-GHG emissions is unlikely.
Our Response:
We don't say that there aren't emissions. The emissions are included in the overall
biofuel plant emissions in the cases where the electricity is not purchased.
What Commenter Said:
On page 48, Sierra Research noted a discrepancy in VOC emission factors for storage and
distribution emissions on Table 3.1-21 and those in the impacts spreadsheet provided in the
docket for the rule. (The emission factors in the impacts spreadsheet were larger.)
Our Response:
This was in fact an error discovered after publication of the draft RIA, and was corrected
for the final rule.
What Commenter Said:
On page 49, Sierra Research noted that the draft RIA stated toxic emission factors for ethanol
production facilities came from wet mill plants whereas most plants in the future will be dry mill
plants, with much different emission rates.
Our Response:
This was actually a typographical error in the RIA. Over 90% of the available emissions
data used to develop emission factors were from dry mill plants.
What Commenters Said:
Sierra Research stated on page 49:
"EPA fails to point out that there may be biases introduced in its air toxic emission factor
development when the 2005 NEI reporting is used. There were limited state data submitted for
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Chapter 8: Impacts on Criteria (NAAQS) and Toxic Pollutants
calendar year 2005 because EPA de-emphasized state submittals for that year due to budgetary
issues. Therefore, the state sample may be biased according to the states that elected to submit
their data. This is an additional level of uncertainty that is introduced into the emission rates that
were derived in this way."
Our Response:
This is a good point and we have added text addressing this to the RIA.
What Commenter Said:
Sierra pointed out on page 47 and 49 the need to consider effects of emission trading programs.
Our Response:
It is not certain that the emission reductions projected in refineries would meet the criteria
that would allow them to be traded upon under NSR provisions.
What Commenter Said:
Sierra points out on page 49 that U.S. refineries might increase exports as domestic demand
shrinks.
Our Response:
We do not have any basis for the potential impact on exports, making this issue difficult
to assess. However, increased exports are less likely for gasoline, since we project most of the
reductions will be from imported gasoline, and demand for exported gasoline is low. Increased
exports may be more of a possibility for diesel, but again, it is more likely that the impact will
mainly be reduced imports.
What Commenter Said:
On page 50, Sierra points out that benzene emissions from pesticide application is 26% of VOC,
which seems high.
Our response:
This estimate is used in EPA's National Emissions Inventory. However, benzene is no
longer used in pesticide products, and is no longer permitted as of 2004 (Federal Register, April
4,2002,67(65): 16027-16030). Thus, the inventory is inaccurate. However, due to time
constraints, this error could not be corrected for the final rule.
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RFS2 Summary and Analysis of Comments
8.2 Vehicle and Equipment Emission Impacts of Fuel Program
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) recommends that EPA review CRC E-65-3. CRC, Fuel Permeation
from Automotive Systems: EO, E6, E10, E20, and E85, Final Report,
CRC Project No. E-65-3 (Dec. 2006), available at http://www.crcao.com/reports
/recentstudies2006/E-65-3/CRC%20E-65-3%20Final%20Report.pdf. The commenter does not
think permeation emission rates should be increased at all between E6 and E10. (2329.1, p. 109)
Our Response^
For the final rule, EPA has updated permeation effects based on the most recent available data,
as detailed in the technical memo from David Hawkins to the docket entitled "Analysis of
Ethanol Evaporative Permeation Effects Update". This analysis included data from the E-65-3
program, and reflects the conclusion that a statistically significant difference in permeation effect
between E5.7 and E10 was not found.
What Commenter Said:
The commenter noted that in Table 3.1-8 of the DRIA (at 447), EPA did not evaluate any change
in PM emissions for nonroad SI engines. The commenter recommends that the Air Improvement
Resource, Inc testing programs be included with other testing programs EPA will assemble for
the final rule. (2329.1, pp. 110-111)
Our Response:
As EPA is in the midst of gathering data on ethanol effects on nonroad SI engines, we did
not change our assumptions for these effects for the final rule. However, we did add language in
the Regulatory Impact Analysis stating that the nonroad SI impacts presented in the rule do not
account for a new requirement that many engines be certified on E10 beginning in 2011,
meaning that by 2022 a significant share of engines in the fleet will effectively show no emission
effect from E10, significantly reducing the nonroad SI impacts presented in this rule.
What Commenter Said:
The commenter (2329.1) provided comments on table 3.1-6 of the DRIA (at 446). One number
that stood out in the table was the 3739.8% increase in acetaldehyde. This percentage is high not
because acetaldehyde emissions are very high from these vehicles, rather the percent is so high
because acetaldehyde emissions from EO are very close to zero.. In situations like these, where
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Chapter 8: Impacts on Criteria (NAAQS) and Toxic Pollutants
the increase in emissions is extremely sensitive to the denominator, it is far preferable to model
this pollutant with an offset in mg/mi, rather than a multiplicative percentage. The concern is that
as the non-methane organic gas (NMOG) emissions of the FFV increase with age, or with lower
temperature, or some combination of the two, the acetaldehyde emissions still are assumed to
increase by 3739.8%. It is likely that they increase as the vehicle ages or at low temperatures, but
it is highly unlikely that they increase at the same percent that they do under relatively low
mileage and 75F testing temperature. Thus, it is far preferable to develop an emission offset for
acetaldehyde, and apply this under all conditions. (2329.1, pp. 109-110)
Our Response:
While the test results reported this percent increase, for the inventory calculation
acetaldehyde impacts were not calculated by applying a percent increase to EO emissions, but
instead were estimated based on ratios to VOC. This is detailed in Section 3.1.1.2.2 of the RIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter states that EPA has used a piecemeal application of both the current models
(NMIM/MOBILE6) and now-obsolete versions of MOVES emission inventory models; as a
result, the subsequent reanalysis proposed by EPA using updated information may yield
substantially different results.
Our Response:
The use of draft components of MOVES was made only where there was enough
confidence that the updated information, while still draft, would better represent the emission
impacts of the rule. Specifically, it was important in this analysis to update the MOBILES E10
impacts to the Predictive Model E10 impacts developed in the RFS1 rule; MOBILES was also
incapable of breaking out evaporative permeation emissions, which are very sensitive to E10.
The final rule analysis does update the version of MOVES used for the inventories, and is a
closer reflection of the final model. Because the RFS2 final rule E10 impacts were in large part
carried through to the final version of MOVES2010 , we would not expect substantially different
impacts between the final rule analysis and MOVES2010.
What Commenter Said:
API expressed concern that the MOVES model did not employ restrictions on emissions below
30 ppm sulfur, and recommended that ARB's Predictive Model be used to updated the MOVES
approach
Our Response:
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RFS2 Summary and Analysis of Comments
The sulfur assumptions in MOVES did not have bearing in the emission inventory
analysis for RFS2. However, this comment was taken into consideration and addressed for the
final version of MOVES2010.
Note: API comments on vehicle and equipment emission impacts contained in the Sierra
Research report are addressed in the previous section.
8.3 Air Quality Impacts
8.3.1 Air Quality Modeling Methodology
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2310
Organization: Low Carbon Synthetic Fuels Association (LCSFA)
Comment:
The commenter (2310) expresses concern that EPA's air quality impacts analysis could be
misinterpreted by policy officials and others who might wrongly conclude that all renewable
fuels negatively impact air quality. This is not the case for biomass-to-liquids (BTL) fuels, which
are far cleaner than both other renewable fuels (like ethanol) and the petroleum fuels they would
displace. As a result, use of BTL fuels would improve air quality nationwide, and, in particular,
in non-attainment areas. The commenter requests that EPA conduct an alternate analysis of the
nationwide and local air quality impacts (or improvements) that would result from the use of
BTL fuels to meet the 16 billion gallon cellulosic biofuel standard (which would require roughly
9.4 gallons of BTL at a 1.7 equivalence value). Indeed, EISA Section 209 requires that EPA
consider in its study of air quality impacts 'different blend levels, types of renewable fuels, and
available vehicle technologies.' The commenter believes that EPA should develop accurate and
objective evaluations of the air quality impacts of various renewable fuels that could be used to
meet EISA mandates. Such an analysis should make clear to policy officials that improved air
quality and increased use of certain clean renewable fuels are not mutually exclusive goals.
[[Docket number 2310.1, p. 3]
Document No.: EPA-HQ-OAR-2005-0161-2497
Organization: Wisconsin Department of Natural Resources
Comment:
The commenter (2497.1) noted that the Midwest currently is and will likely continue to be a
significant production center and user of renewable biofuels. The commenter believes that the
modeling should acknowledge this by focusing sufficient resources to conduct the needed
modeling in this region. The commenter requests that the needed modeling and information
gathering be completed within two years of the rule becoming final (i.e., November 2011). If
EPA does not have the resources to complete the required modeling in a timely manner,
assistance from other credible entities, such as LADCO, should be utilized. (2497.1, p.2)
The commenter also requests that the modeling take into consideration the ongoing, regular
reviews of existing criteria pollutant and toxics rules.
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Document No.: EPA-HQ-OAR-2005-0161-2466
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Comment:
The commenter (2466) included additional comments from the State of New Jersey in addition to
their own comments. The State of New Jersey supports EPA's proposal to use a national-scale
air quality modeling analysis to assess the impacts of the RFS2 program on future ambient
concentrations of PM2.5, ozone and air toxics. The State of New Jersey supports the CMAQ
modeling platform and provides suggestions regarding the modeling plan. A) 2007 meteorology
is preferred over 2005 meteorology for PM2.5 and ozone modeling B) WRF use is currently
more prevalent than MM5 for meteorology modeling as suggested by EPA. (2466.1.pdf, p.10)
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter lists specific concerns about air quality modeling and refers EPA to a report that
provides an in-depth discussion of the issues. [[Docket number 2393.1, p. 72]] [[See docket
number 2393.1, pp. 71-73 and docket number 2393.7, Attachment 6 for further discussion of this
issue.]].
First, the commenter encourages EPA to perform air quality modeling of ozone, PM and
hazardous air pollutants (HAPs) at one time, using CMAQ in the "one atmosphere"
methodology. This method assures the atmospheric chemistry and physics represent the
production of ozone, PM and HAPs simultaneously—not independently.
Second, the commenter recommends that EPA model with 4 km nesting as well as 36km and
12km in order to avoid dilution of urban point or mobile source emissions which - if it occurred
- would lead to a possible understatement predicted concentrations. The commenter also
recommends that EPA develop the urban emissions inventory at a minimum grid resolution of
4km, such that dilution is not achieved through methods similar to CAMx's flexi-nesting.
Third, the commenter is concerned with EPA's proposal to use the three-dimensional global
atmospheric chemistry model, GEOS-CHEM, as an input to CMAQ or CAMx. The commenter
believes that the application of CMAQ or CAMx mixes stratospheric ozone down to the surface
and affects high altitude areas, inadvertently misleading decision-makers.
Finally, the commenter is concerned that the chemical mechanism for modeling SOA in CMAQ
is relatively new and the degree to which it has been validated other than by "internal EPA
evaluation" is unclear. The commenter suggests that the DRIA provides no indication as to how
EPA will adjust either emissions of total aromatics or of specific aromatic compounds such as
toluene in performing CMAQ modeling given that benzene is the only aromatic compound for
which it has even attempted to quantify the emissions impact of the RFS. The commenter
believes it is unclear why the issue of aromatic impacts on SOA formation is included in the
DRIA.
Our Response:
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RFS2 Summary and Analysis of Comments
We believe that it is important to include biofuels other than ethanol in our analysis of air
quality impacts. Time requirements for the air quality modeling necessitated starting the air
quality modeling prior to finalizing the emissions inventories for the final rule. Time constraints
also precluded us from analyzing multiple strategies for meeting the EISA renewable fuels
mandate. Thus, we used interim inventories that reflected the use of ethanol in about 34 of the
mandated 36 billion gallons of renewable fuel. The remaining gallons of renewable fuel were
comprised of biodiesel and renewable diesel. The subsequent final inventories, not done in time
for air quality modeling, reflect the use of other types of cellulosic biofuels in place of ethanol.
We will incorporate the improvements made to this rule's final inventories into our
inventories for the "anti-backsliding" analysis required by Clean Air Act section 211 (v).
Further, some commenters suggested EPA should separately evaluate air quality impacts of
various renewable fuels, and EPA should convey the message that increased use of certain
renewable fuels may improve air quality. We will keep these suggestions in mind as we conduct
our anti-backsliding analysis.
The Wisconsin Department of Natural Resources suggested that EPA modeling efforts
should focus on the Midwest region. We modeled the entire country, including the Midwest, and
the modeling grid size provides sufficient resolution to characterize impacts in the Midwest. In
addition, we note that the meteorological model used in our air quality modeling accounts for
Midwest weather patterns. The Wisconsin Department of Natural Resources also commented
that EPA's modeling should take into account ongoing, regular reviews of existing rules. We
regularly update our baseline/reference case to reflect all currently promulgated air quality
regulations.
In response to the State of New Jersey's specific suggestions on EPA's modeling plan,
first, as noted in EPA modeling guidance, the choice of a model base year involves numerous
considerations. The ultimate goal is to successfully model a variety of meteorological conditions
conducive to a range of air pollution levels while using the best available model input data.
Clearly, there are differences between the national simulations being done for the RFS2 analysis
and the regional analyses being done by the State of New Jersey (and others) for upcoming
attainment demonstrations of ozone and PM2.5. Based on an EPA analysis of the climatology of
2005 and 2007, we concluded that the former year was more appropriate for this particular
national analysis given the extreme drought conditions in the southeastern U.S. and extreme wet
conditions in the central U.S. during 2007. The ability to use unadjusted 2005 National Emission
Inventory (NEI) data as emissions inputs was another factor in favor of 2005.
Second, while EPA is using the MM5 meteorological model for this rulemaking analysis,
we are actively conducting MM5 and WRF comparisons for later base years. It is possible that
we may be switching to WRF in subsequent analyses. However, as indicated in EPA modeling
guidance, the most important consideration with respect to meteorological inputs is not which
model is used, but instead how well the chosen model replicates the observed meteorology over
the period in question. As is documented in the air quality modeling technical support document
(AQ TSD) for the RFS2 final rulemaking (EPA-454/R-10-001 found in the docket for this rule),
EPA is satisfied that the MM5 model performance is appropriate for use in this analysis with
relatively low bias and error values for key meteorological parameters.
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Chapter 8: Impacts on Criteria (NAAQS) and Toxic Pollutants
In regards to comments from API listing specific concerns about modeling methodology,
first, EPA understands the importance of considering atmospheric chemistry interactions
holistically. Accordingly, the CMAQ modeling was performed in "one-atmosphere" mode.
Second, while the emissions inventories can be available at a 4-km resolution (via spatial
surrogate techniques), EPA has concluded that 12-km resolution is the most appropriate choice
for the model horizontal grids for simulating the national impacts of the RFS2 program on air
quality. The 12-km grid resolution employed in this analysis is consistent with EPA guidance
for attainment demonstration modeling of ozone and PM2.5. Several studies have shown that
model performance does not necessarily improve with finer grid resolution, nor does the model
response differ appreciably in models that used both 12- and 4-km grids (Arunachalam, 2006;
Cohan, 2006; Gego, 2005) when considering air quality at the regional- or city-scale. Even at
12-km resolution the RFS2 CMAQ modeling captures the NOx inhibition ozone effects resulting
from new point sources associated with the production of renewable fuels. Even with short-cuts
like "flexi-nesting" of non-emissions fields, conducting finer resolution modeling over some/all
urban areas would involve a large increase in computational resources with no guarantee of
improved, or even differing outcomes, from a national perspective. Based on all of the above
factors, EPA is comfortable with the conclusion that the RFS2 air quality modeling approach is
sufficient for estimating the national impacts of the program on air quality and human health.
Third, like the commenter, EPA was also concerned about the potential for stratospheric
ozone from the global model (GEOS-Chem) boundary conditions inappropriately affecting
surface air quality over high-altitude and other locations. Initial sensitivity tests performed as
part of the EPA model evaluation process indicated that this could be problematic in certain parts
of the year. To remedy this problem, EPA capped the ozone levels within the upper levels of the
GEOS-Chem boundary conditions to 70 ppb, in effect removing the potential for stratospheric
ozone to impact the surface layer. Additionally, our testing showed that most episodes of
stratospheric (or upper tropospheric) intrusions into the surface boundary layer occur outside the
period between May and September. We are only using the 153 days between May 1st and
September 30th to estimate the ozone impacts of the RFS2 program. More details on the
aforementioned sensitivity tests and the ozone modeling period will be contained in the air
quality modeling Technical Support Document (AQ TSD) that accompanies the final
rulemaking.
Finally, the issue of aromatic impacts on SOA formation is included in our air quality
discussion because aromatic emissions can change with increased renewable fuel use and can
therefore impact ambient SOA concentrations. As discussed in Section 3.4.1.2.2 of the RIA,
toluene is an important contributor to anthropogenic SOA. Other aromatic compounds
contribute as well, but the extent of their contribution has not yet been quantified. Mobile
sources are the most significant contributor to ambient toluene concentrations as shown by
analyses done for the 2002 National Air Toxics Assessment (NATA) (U.S. EPA, 2009) and the
Mobile Source Air Toxics (MSAT) Rule (U.S. EPA, 2007). Levels of toluene and other
aromatics in gasoline are potentially influenced by the amount of ethanol blended into the fuel.
The high octane quality of ethanol greatly reduces the need for and levels of other high-octane
components such as toluene (which is the major aromatic compound in gasoline). Since
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RFS2 Summary and Analysis of Comments
toluene contributes to SOA and the toluene level of gasoline is decreasing, it is important to
assess the effect of these reductions on ambient PM.
Therefore, EPA did estimate emissions of aromatics for our emissions and air quality
modeling of the impacts of RFS2 fuel volumes, as discussed in Sections 3.1 and 3.3 of the RIA.
In addition to developing emission inventories for explicit model species in CMAQ, we also
developed inventories for a large number of precursor compounds, including aromatics, through
application of speciation profiles in SMOKE (see also Section 3.4.1.2 of the RIA). We collected
and analyzed new data on impacts of increased ethanol (E10 and E85) on aromatics and other
compounds for Tier 2 vehicles, and developed new profiles for this rule (EPA 2009a). We used
separate profiles for older vehicles that also account for ethanol impacts (Environ 2008), and
accounted for the mix of Tier 1 and Tier 2 vehicles. Thus, the statement that we only accounted
for impacts on benzene is incorrect.
As discussed in Section 3.4.1.2.2 of the RIA, researchers recently developed a new
aromatic SOA chemical mechanism that takes into account both the impact of NOx on SOA
formation and the contribution of benzene to SOA formation (Henze et al., 2007). EPA has
updated the SOA chemical mechanism in CMAQ v4.7 by using this new mechanism, along with
(1) laboratory-determined thermodynamic enthalpies of vaporization and SOA to SOC
(secondary organic carbon) ratios, (2) SOA contributions from sesquiterpenes, isoprene, and
benzene and (3) an elementary treatment of acid catalyzed isoprene (Bhave et al., 2009). The
impact of the new SOA mechanism has been fully evaluated using tracer-based SOA data as well
as the more directly measured ambient OC concentrations. (Foley et al., 2009; Bhave 2009).
References:
Arunachalam, S., A. Holland, B. Do, and M. Abraczinskas, (2006), A Quantitative Assessment
of the Influence of Grid Resolution on Predictions of Future-Year Air Quality In North Carolina,
USA, Atmospheric Environment, 40 (26), 5010-5026.
Bhave, P (2009) How Have PM Model Estimates Improved with Advances in Aerosol Process
Representations? Board of Scientific Counselors Meeting, June 2009
http://www.epa.gov/osp/bosc/presentations/Air_Jun09/l-30_Bhave_poster.pdf
Bhave, P, C Nolte, K Foley, W Appel, A Carlton, S Napelenok (2009) Modeling Atmospheric
Particulate Matter: Description and Evaluation of the CMAQ Aerosol Module (1.3).
http://www.epa.gov/asmdnerl/peer/posters/Abstract_l.3.pdf.
Cohan, D.S., Y. Hu, A.G. Russell, (2006), "Dependence of ozone sensitivity analysis on grid
resolution", Atmospheric Environment, 40, 126-135.
ENVIRON International Corporation. 2008. Emission profiles for EPA SPECIATE database.
EPA Contract No: EP-C-06-094. Available in the docket for this rule.
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Chapter 8: Impacts on Criteria (NAAQS) and Toxic Pollutants
Foley, KM., SJ Roselle, KW Appel, PV Bhave, JE Pleim, TL Otte, R Mathur, G Sarwar, JO
Young, RC Gilliam, CG Nolte, JT Kelly, AB Gilliland, JO Bash (2009) Incremental testing of
the community multiscale air quality (CMAQ) modeling system version 4.7, Geosci. Model Dev.
Discuss., 2: 1245-1297. http://www.geosci-model-dev-discuss.net/2/1245/2009A
Gego, E., H. Hogreffe, G. Kallos, A. Voudouri, J. Irwin, and S. T. Rao, (2005), "Examination of
Model Predictions at Different Horizontal Grid Resolutions", Environmental Fluid Mechanics, 5,
63-85.
Griffin RJ, DR Cocker III, RC Flagan, JH Seinfeld (1999) Organic aerosol formation from
oxidation of biogenic hydrocarbons, J Geophys Res 104: 3555-3567.
Henze DK, JH Seinfeld (2006) Global secondary organic aerosol from isoprene oxidation.
Geophys Res Lett 33: L09812. doi:10.1029/2006GL025976.
Henze, DK, JH Seinfeld, NL Ng, JH Kroll, TM Fu, DJ Jacob, CL Heald (2007) Global modeling
of secondary organic aerosol formation from aromatic hydrocarbons: High- vs. low-yield
pathways, Atmos Chem Phys Discuss, 7: 14569-14601. www.atmos-chem-phys-
discuss.net/7/14569/2007/. http://puck.che.caltech.edu/~daven/home/pubs/acpd-7-14569-2007-
print.pdf.
Jaoui M, M Lewandowski, TE Kleindienst, JH Offenberg, EO Edney (2007) a -Caryophyllinic
acid: An atmospheric tracer for a-caryophyllene secondary organic aerosol. Geophys Res Lett
34: L05816. doi:10.1029/2006GL028827.
Ng NL, JH Kroll, AWH Chan, PS Chabra, RC Flagan, JH Seinfeld (2007) Secondary organic
aerosol formation from m-xylene, toluene, and benzene. Atmos Chem Phys 7: 3909-3922.
U.S. EPA (2009a). Exhaust Emission Profiles for EPA SPECIATE Database: Engery Policy Act
(EPAct) Low-Level Ethanol Fuel Blends and Tier 2 Light-Duty Vehicles. EPA-20-R-09-002,
June 2009.
U. S. EPA. (2009b) 2002 National-Scale Air Toxics Assessment.
http://www.epa.gov/ttn/atw/nata2002/risksum.html
U. S. EPA (2007) Regulatory Impact Analysis for the Control of Hazardous Air Pollutants from
Mobile Sources Rule, Chapter 3, Air Quality and Resulting Health and Welfare Effects of Air
Pollution from Mobile Sources. 72 FR 8428, February 26, 2007.
http://www.epa.gov/otaq/regs/toxics/420r07002.pdf
8.3.2 Impacts of Proposed Standards on Future Air Quality and Mitigation of Negative
Impacts
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2089
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RFS2 Summary and Analysis of Comments
Organization: National Association of Clean Air Agencies (NACAA)
Comment:
The commenter (2089.1) is concerned that commitments to increase the use of renewable fuels
for the purposes of energy security and GHG emissions reductions have been made without
sufficient study of the potential adverse air quality and human health impacts. The commenter
points out that EPA's estimates of increases in upstream and downstream emissions of NOx, HC,
PM, and acetaldehyde are not small and the renewable fuel standards program could
substantially increase air pollution and imperil public health.
The commenter (2089.1) believes that as increased volumes of renewable fuels displace gasoline,
emissions will increase significantly unless appropriately rigorous controls are put in place now.
Therefore, they urge strongly that before EPA takes final action on this rule, the agency ensure
that the full range of air quality impacts of the RFS - upstream and downstream- is
comprehensively quantified, that appropriate mitigation measures are identified and that
provisions for timely implementation of these mitigation measures are included in the final rule
(e.g., BACT review for all pollutants). (2089.1, Page 3)
Document No.: EPA-HQ-OAR-2005-0161-2354
Organization: Massachusetts Department of Environmental Protection
Comment:
The commenter (2354) is concerned that without appropriate complementary strategies the
proposed program could result in adverse effects on criteria pollutants and air toxics.
The commenter (2354) is concerned about the projected increases in VOC and NOx emissions
because of possibility of non-attainment for the 2008 ozone standard. Also, the projected
increase in SO 2 emissions represents a setback to multiple air quality issues such as PM levels,
regional haze, and acid rain.
The commenter (2354) is very concerned about impacts on air toxics (acrolein) resulting from
implementation of RFS2. The potential of increases in the evaporative emissions of air toxics
from motor vehicles represents a significant public health threat. The commenter (2354) urges
EPA to mitigate these impacts by strengthening existing regulatory strategies that address these
negative air impacts. The commenter (2354) suggests that one option would be to ensure that
federally mandated reductions from other transportation sources occur, such as more stringent
tailpipe standards. Another is to tighten permitting requirements (e.g., BACT reviews) for
biofuel production facilities.
Document No.: EPA-HQ-OAR-2005-0161-1032
Organization: Texas Commission on Environmental Quality
Comment:
The commenter (1032.1) noted that EPA commented that the proposed expanded RFS Program
will "result in significant increases in ethanol and acetaldehyde emissions-increasing the total
U.S. inventories of these pollutants by up to 30-40 percent in 2022 relative to the RFS1 mandate
case," and with "more modest but still significant increases" in oxides of nitrogen (NOx),
formaldehyde, and particulate emissions. These EPA comments indicate that increased use of
renewable fuels under an expanded RFS program would result in a potential negative impact on
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Chapter 8: Impacts on Criteria (NAAQS) and Toxic Pollutants
criteria pollutant emissions that are of critical importance for compliance with the National
Ambient Air Quality Standards (NAAQS) for ground level ozone, primarily volatile organic
compounds (VOC) and NOx emissions. Ground level ozone is created by a photochemical
reaction of VOC and NOx emissions in the presence of sunlight. Additionally, acetaldehyde and
formaldehyde are of concern from an air toxics perspective. (1032.1, p.l)
The commenter has implemented a number of regulatory air quality control strategies in its State
Implementation Plan (SIP) revisions to reduce VOC and NOx emissions in the areas of Texas
that have been designated by the EPA as nonattainment for ground level ozone. The commenter
is concerned that the adoption of the proposed rules to expand the RFS program may have a
negative impact on the efforts of the State of Texas to meet its SIP goals. (1032.1, p.l)
The commenter (1032.1) recommends that the EPA reevaluate the appropriateness of requiring
the increased use of renewable fuels in areas of the nation that are designated by the EPA as
nonattainment areas under the NAAQS for ground level ozone or in areas that are considered to
be near-nonattainment areas. (1032.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2143
Organization: New York State Department of Environmental Conservation
Comment:
The commenter (2143) argues that the discussion of environmental impact is inadequate and
deprives public in submitting meaningful comments. (2143.2,p.9)
The commenter (2143) urges the need to discuss and mitigate the increase in criteria and toxic air
pollutant emissions and the impact on NAAQS as result of this rule.(2143.2,p.9).
The commenter (2143) suggests that the issue of increase in toxic emissions must be addressed.
(2143.2, p.10) Specifically, the commenter suggests that the EPA "take regulatory steps to
ensure that the gasoline benzene reduction potential of renewable fuel blending is achieved in
practice" and promulgate tailpipe standards for appropriate specific toxics.
Document No.: EPA-HQ-OAR-2005-0161-2375
Organization: Metropolitan Washington Air Quality Committee
Comment:
The commenter (2375.1) is concerned about the potential impact of the proposed rule on regional
ground level ozone and particulate matter levels. The commenter believes that if the rule is
implemented as proposed, EPA should mitigate the potential impacts and adopt appropriate,
timely, and cost-effective controls that can be implemented on a national and regional scale.
(2375.1, p.l)
The commenter noted that EPA did not provide any results from air quality monitoring studies in
the analysis that would enable a region to better understand the likely air quality impacts as a
region develop plans to meet the new standard. The commenter believes that a comprehensive
federal analysis of anticipated air quality impacts is essential before finalizing the proposal. EPA
should initiate strong proactive steps to mitigate the anticipated increase in emissions through
other regulatory initiatives. (2375.1, p.l)
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RFS2 Summary and Analysis of Comments
Document No.: EPA-HQ-OAR-2005-0161-2241
Organization: Alliance for a Safe Alternative Fuels Environment (ALLSAFE) and the
Outdoor Power Equipment Institute (OPEI)
Comment:
The commenter (2241) noted that EISA created a new CAA Section 211 (v), which requires that
EPA conduct a study of the potential air quality impacts of fuels and prevent air quality
deterioration by promulgating regulations "that mitigate, to the greatest extent achievable, any
adverse impacts on air quality" caused by the RFS2 mandates. EPA indicated in the RFS2
preamble that it will have local air quality modeling completed for the final rule. As this
modeling should constitute the EISA required study, EPA must mitigate air quality impacts in
the final rule by ensuring that fuels and fuel additives do not negatively impact air quality.
Document No.: EPA-HQ-OAR-2005-0161-2466
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Comment:
The commenter (2466) urges EPA to pursue a vigorous assessment of these effects and establish
rigorous anti-backsliding provisions for air and water quality to ensure that increased production
of renewable fuels does not increase air and water pollution. Alternatively, the commenter
encourages EPA to waive the RFS2 volume requirements if appropriate, until such time as the
potentially adverse environmental impacts are mitigated.
The commenter (2466) points out that EPA states in the preamble to the proposed rule that the
increased use of renewable fuels would also impact criteria pollutant emissions and there is a
potential for increased emissions of acetaldehyde, acrolein, and other air toxics if the RFS
volume requirements are implemented. (2466.1.pdf, p6,7)
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) lists specific concerns about air quality modeling and refers EPA to a
report that provides an in-depth discussion of the issues. [[Docket number 2393.1, p. 72]] [[See
docket number 2393.1, pp. 71-73 and docket number 2393.7, Attachment 6 for further discussion
of this issue.]]. In the report, the commenter is concerned that EPA had not yet performed the
modeling required to assess the impacts of the RFS2 on ambient air quality and argues that this
renders the DRIA incomplete and makes it impossible to provide informed comments.
The commenter argues that EISA requires EPA to study air quality impacts and make a
determination whether or not increased renewable fuels will adversely impact air quality as a
result of changes in vehicle and engine emissions of air pollutants, and it would be beneficial if
EPA publishes guidance on measuring "anti-backsliding" that will allow for a timely response.
Document No.: EPA-HQ-OAR-2005-0161-0983
Organization: Holliday Environmental Services, Inc.
Comment:
The commenter (0983) argues that ethanol causes more pollution than gasoline when burned.
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Chapter 8: Impacts on Criteria (NAAQS) and Toxic Pollutants
The commenter states, "Using ethanol actually creates more smog than using regular gasoline,
and the EPA's own attorneys had to admit that fact in front of the justices presiding over the
Third Circuit Court of Appeals in 1995 (API v. EPA). First, the primary job of the
Environmental Protection Agency is to protect our environment. Raising the pollution does not
adhere to the principle, 'Do no harm.' Ethanol does harm. Increasing the percentage of ethanol
increases the harm."
Document No.: EPA-HQ-OAR-2005-0161-2421
Organization: Manufacturers of Emission Controls Association (MECA)
Comment:
The commenter (2421) believes that in coordination with EPA final action on this proposed
renewable fuel regulation, the agency should quickly propose and put in place appropriate
measures that would mitigate any air quality impacts associated with the final renewable fuels
standard. (2421.1,p.5)
Our Response
The final rule presents the results of our modeling to determine the incremental air
quality impacts of the renewable fuel standards, as compared to two reference cases: a 2022
baseline projection based on the RFS1-mandated volume of 7.1 billion gallons of renewable
fuels, and a 2022 baseline projection based on the AEO 2007 volume of 13.6 gallons of
renewable fuels. While the process of modeling air quality impacts began in the earlier stages of
this rulemaking, due to the considerable length of time required to conduct this modeling, EPA
did not complete it in time to publish it in the NRPM.
Like the commenters, EPA is concerned about the potential for negative air quality
impacts of the renewable fuel standards finalized in this rule. The results of the air quality
modeling conducted for this rule are presented in Section VI.D of the preamble and Section 3.4
of the RIA. In addition to air quality modeling, EPA reviewed the literature on evaluation of
renewable fuel impacts using air quality monitoring data (Section 3.4 of the RIA).
The air quality modeling conducted for this rule does not constitute the "anti-backsliding"
study required by Clean Air Act section 211 (v). That study, and any regulatory measures to
mitigate air quality impacts considering the results of that study, are separate from this
rulemaking action. The anti-backsliding study is required to include consideration of "different
blend levels, types of renewable fuels, and available vehicle technologies." In addition, the anti-
backsliding exercise will be able to include inventory improvements, including additional
emissions test data, that we could not include in this rulemaking analysis due to time constraints.
While some commenters argued that the RFS2 requirements should be waived until mitigation
measures are in place, EISA includes deadlines for EPA action in issuing the RFS2 regulations,
the 211 (v) anti-backsliding study, and any regulations designed to mitigate the adverse impacts
identified in the 211 (v) study. These deadlines clearly demonstrate that Congress did not intend
that the RFS2 regulations be delayed pending completion of either the study or issuance of
mitigation measures. As to the suggestion that EPA waive the RFS2 volume mandates until
such time as adverse environmental impacts are mitigated, EPA notes that its general waiver
authority requires a determination that implementation of the standards would severely harm the
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RFS2 Summary and Analysis of Comments
economy or environment of a State, a region or the United States, or that there is inadequate
domestic supply to fulfill the mandates. EPA's analyses to date do not indicate that the criteria
for issuing a waiver are present at this time. However, EPA may exercise this general waiver
authority at any time on its own motion or in response to a petition. We also note that EISA does
not provide EPA with authority to exempt ozone nonattainment areas from the RFS2 standards
and the statute clearly envisioned that to the extent that adverse impacts occurred, they would be
mitigated by additional regulations.
EPA appreciates the commenters' specific suggestions on measures for mitigation of
negative air quality impacts. EPA will consider these suggestions in the context of rulemaking
under CAA section 211 (v). One of the commenters suggested that EPA should publish guidance
on measuring anti-backsliding that will allow for a "timely response"; because EPA is
conducting the anti-backsliding study, this is not necessary. The draft anti-backsliding study will
be released for comment, as required by CAA section 211 (q).
8.4 Health and Environmental Effects of Criteria and Air Toxic Pollutants
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0984
Organization: Citizen
Comment:
The commenter (0984) noted that there has been virtually no toxicology research conducted to
date that directly compares biodiesel and diesel in the same well conceived experiment
specifically designed to evaluate a number of relevant health-effect endpoints in a biological
system. The toxicology research community has been engaged in research related to diesel and
other mobile source air pollutants for several decades. As a result of these investigations,
petroleum diesel exhaust today is recognized to induce tissue-specific and systemic
inflammation, aggravated allergic disease, and cardiopulmonary injury. Biodiesel is a mono-
alkyl ester derived from either edible or non-edible plant oils and can be used unblended or
blended with traditional petroleum diesel in an unmodified diesel engine. The chemistry of
biodiesel is different than that of petroleum diesel and therefore the combustion processes and
emissions profiles are disparate. It is plausible that different types of feedstocks used in biodiesel
production and the requisite fuel additives may produce or contribute to combustion products
that exceed current emissions regulations in some locations and could adversely affect human
health. (0984, pp.1-2)
Document No.: EPA-HQ-OAR-2005-0161-2010; EPA-HQ-OAR-2005-0161-2011; EPA-
HQ-OAR-2005-0161-2013;EPA-HQ-OAR-2005-0161-2123
Organizations: SoyMor Biodiesel, LLC; Western Dubuque Biodiesel, LLC; Central Iowa
Energy, LLC; Renewable Energy Group®
Comment:
The commenters (2010, 2011, 2013, 2023) state that initial studies have shown a dramatic
reduction in particulate matter for biodiesel emissions when compared to regular diesel. And,
specific additional studies are being completed such as one published this year, "Release of the
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Chapter 8: Impacts on Criteria (NAAQS) and Toxic Pollutants
Pro-Inflammatory Markers by BEAS-2B Cells Following In Vitro Exposure to Biodiesel
Extracts," Swanson et. al. This study demonstrated that the organic extracts of biodiesel can
increase the amount of healthy cells which can counteract the damaged cells resulting from petro
diesel emissions. While more studies need to be completed; the commenter believes it's apparent
and should not be overlooked that biodiesel may actually increase positive health related effects
and should be accounted for with an economic and health social cost in an LCA. [[Docket
number 2010.1, p. 12]]
Document No.: EPA-HQ-OAR-2005-0161-2510
Organization: Iowa Renewable Energy, LLC
Comment:
The commenter (2510) states that all their employees know that if we had a choice of sucking
fumes from diesel truck using petroleum-based fuel or fumes from a French fry vat, we're going
with the fries. The commenter adds that biodiesel is better than 100% petroleum diesel - another
reason to get on with using biodiesel and stop delaying the RFS2 program. [[Docket number
2510.1, p. 6]]
Our Response:
EPA's assessment of the emission impacts resulting from the use of biodiesel is
contained in the appendix to the RIA. These emission impacts were reflected in the emission
inventory and air quality assessments also contained in the RIA (though the air quality analysis
used draft estimates of the emission impacts of biodiesel). The use of biodiesel fuel seems to
produce less PM, VOC, and CO emission than petroleum diesel, and slightly more NOx. The
difference in composition, and resultant health impacts, of the PM may be different from that
from conventional diesel. Under the fuel registration regulations at 40 CFR 79, the National
Biodiesel Board conducted health-effects testing on biodiesel in the late 1990's and EPA had that
information reviewed by a contractor. While regulatory responsibility for health effects testing
resides with manufacturers under Clean Air Act section 211 (b), EPA's Office of Research and
Development is conducting some research in this area. It has in vitro and installation studies
underway, development of test strategies for animal inhalation studies, and studies of formation
of reaction products from biodiesel exhaust.
Commenters 2010, 2022, 2013 and 2023 noted that biodiesel may improve health and
that these improvements should be included in an economic benefits analysis. As stated above,
the estimated emission impacts of biodiesel were reflected in our air quality modeling, which
was then used in our assessment of the monetized health impacts of the increased use of
renewable fuels needed to meet the RFS2 standards. The impacts of biodiesel are reflected along
with those for the other renewable fuels. In addition, the emission impacts were treated the same
as those from other fuels (i.e., the PM emissions from biodiesel were treated the same as PM
from other sources).
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Renewable Fuel Standard Program
(RFS2) Summary and Analysis of
Comments
Chapter 9
Costs
Assessment and Standards Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
v>EPA
United States EPA-420-R-10-003
Environmental Protection r , „„.„
Agency February 2010
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9 COSTS
9.1 Renewable Fuel Production Costs 9-1
9.2 Distribution Costs 9-4
9.3 Total Estimated Cost Impacts 9-5
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RFS2 Summary and Analysis of Comments
9 COSTS
What We Proposed:
The comments in this section correspond to Section VIII of the preamble to the proposed
rule and address impacts of the program on costs of the program. A summary of the comments
received and our response to those comments are located below (and in Section VII of the
preamble to the final rule).
9.1 Renewable Fuel Production Costs
What Commenters Said:
Document No.: Varied
Organization: Renewable Energy Group, SoyMor Biodiesel, LLC, Western Dubuque
Biodiesel LLC, Central Iowa Energy, LLC, et al.
Comment:
Referring to cost impacts of renewable fuel and glycerin as a co-product, the commenter (1015)
notes that given the rapid growth of national biodiesel production, this non petroleum based co-
product has lead to significant ongoing research at USDA-ARS and several top agricultural
universities. This research has stimulated new applications for both crude and refined glycerin in
several industries domestically and overseas. The commenter adds that the market average price
for crude 80% basis glycerin is $0.1175, as reported by the Jacobsen Fats & Oils Bulletin
between I/ 2008 to II2009. The highest price was reported last year of $0.30/lbs. Glycerin will
continue to be a valuable co-product for vegetable and fats based biodiesel. [[Docket number
2123.1, pp. 4-5]]
The commenter concludes that the final rule implemented by EPA will dramatically impact the
biodiesel industry. Manufacturing facilities are running much below capacity or are shut down.
Credit markets continue to be tight until lenders see signs of confidence from agencies like EPA.
The commenter is seeing signs that the petroleum industry is delaying biodiesel purchases until
rules are in place, in turn, making working capital difficult to obtain. [[Docket number 2123.1, p.
16]]
Document No.: EPA-HQ-OAR-2005-0161-2510
Organization: Iowa Renewable Energy, LLC
Comment:
The commenter (2510) states that as research continues, new uses for glycerin are coming to the
table everyday, again reducing some of the need for foreign oil and its derivatives. [[Docket
number 2510.1, p. 3]]
Our Response:
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Chapter 9: Costs
We have adjusted glycerin co-product price to $0.15/lb (2007$) to better reflect new uses.
Though prices may go higher, to be conservative we chose this value as a sort of baseline,
equivalent to glycerin's heating value based on our control case refinery modeling work.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2021
Organization: Fulcrum Energy
Comment:
The commenter (2021.1) noted that EPA requested comments on the costs of sorting urban waste
and the costs avoided by diverting cellulosic materials from landfills. The commenter has done
extensive analysis regarding the processing of urban waste into a feedstock suitable for
conversion technologies. The commenter concluded that the processing costs are generally less
than $10 per ton (far lower than expected tipping fees for waste), which demonstrates that urban
waste is in fact a zero or negative cost feedstock. The commenter noted that the processing costs
for a waste-to-fuels feedstock preparation facility require much less commodity-driven
separation, less labor and benefit from the ability to shred and reduce the incoming waste to a
more manageable size that enables the facility to meet its sole objective: remove the inorganics
from the waste stream. The remaining material organic and reduced in size makes excellent
feedstock for a gasifier, which is capable of handling a heterogeneous stream of waste for
conversion to synthesis gas. (2021.1, p.42-44)
Our Response:
We have added text to Section 4.1.1.2.1 discussing the research by Fulcrum, as well as
other companies intending to use MSW as a feedstock for the production of biofuels, that
indicates MSW may be available as a zero or even negative cost material. While this may be the
case for the scenarios Fulcrum has investigated, we believe there are several factors that will
cause the average price of MSW for use as a biofuel feedstock to be higher. First, in order for
MSW to be eligible as a feedstock, a certain level of separation of recyclable materials must first
occur, including separation of not only inorganic material (glass and metals), but also inorganic
materials such as paper and plastics. Furthermore, some biofuel processes, especially
biochemical processes, may be more sensitive to contaminated materials and therefore require an
even more thorough and costly separation of waste materials. Additionally, we believe that
while initial sources of MSW may indeed be zero cost feedstocks, the average cost of MSW will
increase as additional quantities of MSW are used for biofuel production and more expensive
sources are utilized. Competition for MSW from other biofuel producers as well as waste to
energy companies may further increase the cost of MSW. For our final rule we have adjusted the
cost of MSW downward, assuming that it is available at a cost of $ 15 per ton if sourced from
within the same count as the biofuel production facility. If the MSW is being brought in from
neighboring counties and additional transportation cost is added.
What Commenters Said:
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RFS2 Summary and Analysis of Comments
Document No.: EPA-HQ-OAR-2005-0161-2048
Organization: BioPure Fuels
Comment:
The commenter (2048.1) supports the implementation of the RFS2 regardless of consumer cost.
However, the commenter believes the oil companies will try to fight the rule adoption in other
states, nationally or internationally by pointing out the impact it could have on fuel cost. (2048.1,
P-7)
Our Response:
After proposing the RFS2 program, EPA gathered all comments advocating both for and
against the proposed program or aspects of the proposed program. We considered all these
comments and reassessed the program partially on these comments. We then issued the final
rulemaking.
The cost impacts are one of the many impacts of the program that we assess and consider.
Since we proposed the RFS2 program, the Department of Energy has reevaluated its crude oil
prices and now believes that crude oil prices will be much higher in the future. If crude oil prices
will be as high as projected, our analysis shows that the RFS2 program will cause a cost savings
in the future, not a cost increase.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2311
Organization: Wyoming Refining Company
Comment:
The commenter (2311.1) believes that that the financial burden of compliance with the proposed
rules will be so great as to seriously threaten the continued business existence of one or more
Small Business Refiners in Petroleum Administration for Defense District (PADD) IV. (2311.1,
p.2) [[See Docket Number 2311.1 pp.2-5 for detailed discussion of this issue.]]
Our Response:
While the RFS2 standards as written by Congress will have impacts on all refiners, we
don't believe that the RFS2 renewable fuels requirement will cause a large impact on PADD IV
refiners as expected by the commenter. As discussed in Section 7 of the RIA, we estimate that
the costs to small refiners will in all cases be less than 1 percent including PADD IV refiners. In
addition, as crude oil prices rise and renewable fuels prices fall, these costs will be further
minimized.
Since the program is a nationwide average program with credits (RINs) being traded
nationwide to demonstrate compliance, the economic impacts in PADD IV should be similar to
the impacts nationwide. Furthermore, since the obligation is a function of gasoline and diesel
fuel production, the economic impacts on an annual average basis for small refiners are reduced
in proportion to their production volume.
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Chapter 9: Costs
9.2 Distribution Costs
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter questions the accuracy of EPA's cost estimates for installing E85 refueling
equipment, adding that EPA's rationalization of the costs of the E85 upgrade fails to account for
the upfront affordability of this upgrade.
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP)
Comment:
The commenter stated that the cost of installing one underground storage tank, related piping
dispensers would range from $200 to $600 thousand. The commenter stated this would be
extremely burdensome for independent retailers and that the time needed to complete such
installations would contribute to an extended delay before renewable fuels can be safely and
legally stored and dispensed at retail facilities.
Our Response:
While the RFS2 standards could be met using a range of different renewable fuels, for
our analysis of the impacts of the standards, we have assumed a large portion would be met with
ethanol, some of which is in the form of E85. To cost this out, we project the need for a
significant number of new E85 retail dispensers and storage tanks at existing fuel retail facilities.
Our cost estimates are based on input from fuel retailers familiar with installation of E85
facilities. We project that depending on the number of dispensers at a facility, the cost per
facility would range from $130 to $175 thousand dollars (see Section 4.2 of the Regulatory
Impact Analysis). We believe that given the projected crude oil costs in the future, the cost of
ethanol may compare favorably to gasoline (see the response to the comment from the Engine
Manufacturers Association [2147] in Section 6.4 of this document. Therefore, the demand for
E85 may be sufficient for retailers to justify the installation of E85 dispensing/storage
equipment. There are also government assistance programs in place that will help retailers
recoup a significant fraction of the cost of installing E85 refueling equipment.
We acknowledge that the timeline for the addition of new E85 facilities is aggressive.
Nevertheless, we believe the addition of these numbers of new E85 facilities may be possible for
the industries that manufacture and install E85 retail equipment.
We believe that no changes to retail infrastructure will be needed to handle biodiesel
blends up to 5% and blends of cellulosic distillate/renewable diesel fuel.
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RFS2 Summary and Analysis of Comments
9.3 Total Estimated Cost Impacts
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company
Comment:
Overly aggressive biofuel mandates are expensive because (1) both corn-based and cellulosic
ethanol are costly to produce relative to conventional fuels, (2) a gallon of ethanol has only two-
thirds the energy content of a gallon of gasoline, and (3) corn-based ethanol production uses a
significant amount of energy obtained from fossil fuels. MathPro estimates that replacing a
barrel of crude oil with an energy-equivalent volume of ethanol would cost between $260 and
$310 per barrel of crude displaced, depending upon the full cost of ethanol production. The
MathPro cost estimates relied upon recent U.S. government estimates of the full costs of
cellulosic ethanol: $3.50 to $4.00 per gallon - roughly twice the current cost of corn ethanol
production.
Our Response:
Whether renewable fuels increases or decreases fuel costs is partially driven by the
production cost of renewable biofuels. Since corn-based ethanol is largely phased in by the time
the RFS2 program takes effect, the RFS2 program will mostly require expanded use of cellulosic
ethanol and cellulosic diesel fuel. Therefore the costs of the program are dependent to a great
extent on what happens with the cellulosic biofuel production costs over years that the program
phases in. In the RIA we provide our projections for the production costs of cellulosic biofuels.
Crude oil prices are another factor and they are expected to increase over the period that the
RFS2 program is phasing-in.
In our analysis, we estimate that the RFS2 program will be a zero cost program when
crude oil is priced at $88 per barrel. At EIA's projected crude oil price of $116 per barrel in
2022, the RFS2 program is expected to incur a significant cost savings.
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Renewable Fuel Standard Program
(RFS2) Summary and Analysis of
Comments
Chapter 10
Economic Impacts and
Benefits of the Rule
Assessment and Standards Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
v>EPA
United States EPA-420-R-10-003
Environmental Protection r , „„.„
Agency February 2010
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10 ECONOMIC IMPACTS AND BENEFITS OF THE RULE
10.1 Economic Impact Analysis 10-1
10.2 Agricultural Impacts 10-7
10.3 Energy Security Impacts 10-10
10.4 Benefits of Reducing GHG Emissions 10-13
10.5 Economy-Wide Impacts 10-20
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RFS2 Summary and Analysis of Comments
10 ECONOMIC IMPACTS AND BENEFITS OF THE RULE
The comments in this section correspond to Section IX of the preamble to the proposed
rule and address economic impacts and benefits of the program. A summary of the comments
received and our response to those comments are located below (please also see Section VIII of
the preamble to the final rule for a further discussion of these issues).
10.1 Economic Impact Analysis
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) agrees that the RFS is not likely to impact food prices, and incorporates
by reference its comments on the Texas waiver request. The commenter noted that EPA's
analysis on food prices, while correct, is additional evidence that the RFS will have little, if any,
impact on land use changes. (2329.1, p. 112-113) [[See Docket Number 2329.1, pp.112-113 for a
detailed discussion of the Economic Analysis]]
Our Response:
EPA's analysis of the RFS2 rule estimates that there will be a modest impact on both
U.S. food prices and land use as a result of the rule. For instance, the FASOM model estimates
that requiring the Control Case renewable fuel volumes results in an increase in U.S. corn price
of roughly $0.27 per bushel (8.2 percent) above the AEO 2007 Reference Case price in 2022.
By 2022, FASOM projects that U.S. soybean prices increase by $1.02 per bushel (10.3 percent)
above the AEO 2007 Reference Case soybean price. Higher corn and soybean prices also result
in higher meat prices. In 2022, it is estimated that the average price for all meat production in
the FASOM model increases by 0.1 percent. Due to higher agricultural commodity prices,
FASOM estimates that U.S. food costs increase by roughly $10 per person per year by 2022,
relative to the AEO 2007 Reference Case. Total effective farm gate food costs increase by $3.6
billion (0.2 percent) in 2022. To put these changes in perspective, average U.S. per capita food
expenditures in 2007 were $3,778 or approximately 10 percent of personal disposable income.
The RFS2 rule is also anticipated to have modest impacts on land use patterns in the U.S.
In 2022, FASOM projects that total cropland increases by 3.1 million acres (1.0 percent) relative
to the Reference Case. The increase in cropland is derived primarily from a combination of
decreased idle cropland acres, a decrease in idled cropland pasture acres, and a decrease in forest
acres.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2107
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Chapter 10: Economic Impacts and Benefits of the Rule
Organization: Goldsboro Milling Company
Comment:
The commenter (2107.1) noted that economists have shown that EPA models of the RFS2
severely underestimate its effects on consumer food prices. The commenter requests that in
EPA's final analysis, they work to include a more comprehensive study on commodities, which
have a direct impact on food prices. (2107.1, p.2)
Our Response:
EPA's analysis of the RFS2 rule estimates that there will be a modest impact on U.S.
food prices as a result of the rule. See previous response to EPA-HQ-OAR-2005-0161-0952
(Renewable Fuels Association).
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2317
Organization: National Corn Growers Association (NCGA)
Comment:
The commenter (2317) agrees with EPA that the RFS program has not had any meaningful effect
on food prices. EPA should confirm this conclusion in the final rule. [[Docket number 2317.1,
pp. 43-44]]
Our Response:
EPA's analysis of the RFS2 rule estimates that there will be a modest impact on U.S.
food prices as a result of the rule. See previous response to EPA-HQ-OAR-2005-0161-0952
(Renewable Fuels Association).
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2047
Organization: Terrabon
Comment:
Commenter [[2071]] states the rule's exclusive focus on crop-based feedstocks undermines the
sustainability of the biofuel industry as a whole. The Texas biofuel industry is illustrative. With
the record costs of corn, fanners supplanted soybeans with corn, which led to a significant lack of
feedstock supply for biofuel producers in Texas. As a result of the limited feedstock supply, at
least two Texas biodiesel plants were forced to cease operations. [[#2071.1 p.5]]
Our Response:
A variety of different renewable fuels are capable of qualifying for use under the RFS 2
rule. The RFS2 rule allows for renewable fuel to be produced from a variety of feedstocks. These
feedstocks can be crop-based, crop residues, waste-based, or dedicated energy crops. Most of the
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RFS2 Summary and Analysis of Comments
expanded RFS2 volume requirements must come from cellulosic feedstock sources. While there
are specific definitional requirements for each feedstock, the Act allows the market to determine
which feedstock will be used to satisfy the EISA volume requirements, assuming that feedstock
meets the applicable greenhouse gas reduction threshold and renewable biomass definition
requirements.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2074
Organization: GreenShift Corporation
Comment:
EPA estimated in its impact assessment that corn oil extraction after fermentation will be
incorporated in about 20 percent of ethanol plant production by the year 2022. The commenter
(2074) believes this number is much too low. Today's penetration of corn oil extraction
technology is about 12 percent, representing only systems with the initial efficiency of extracting
30 percent of the available oil. In the next 10 to 15 years, the commenter suggests the majority of
the industry will add corn oil extraction, including new extraction technology, as a means to add
revenue, reduce costs and decrease GHG emissions, all at the same time. [[Docket number 2074,
p. 4]]
Our Response:
For the final rulemaking, EPA's agricultural models have been updated with revised
estimates for fractionation and extraction use in the future. Based on engineering cost analysis, it
is expected that by 2022, 70% of dry mill corn ethanol plants will adopt extraction technology,
20% will adopt fractionation technology, and 10% will not adopt either technology. Corn oil
that is withdrawn from the extraction process is not food-grade, and is considered only suitable
as a biodiesel feedstock. By 2022, it is estimated that corn oil from extraction is a significant
contributor to the biodiesel volume required by the RFS2 rule. Corn oil that is withdrawn via the
fractionation process is considered food-grade, and is assumed to only enter those markets due to
favorable economics there.
Additional information regarding the assumptions behind corn oil extraction can be found
in chapters 1,2, and 5 of the RIA, as well as in the technical reports on the FASOM and FAPRI
models for the final rulemaking analysis.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2112
Organization: Biomass Rules, LLC
Comment:
The commenter (2112.1) noted that the economy wide impact analysis was not completed when
the rule was written. Without that analysis, EPA anticipated the need for taxes to increase to pay
for this rule. The benefits from the rule should be sufficient to pay for the implementation of the
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Chapter 10: Economic Impacts and Benefits of the Rule
RFS. EPA does not understand that building a biofuel infrastructure will also enhance the
environment. Although EPA's entire analytical effort is biased against biofuel adoption, it
doesn't change the fact that increasing energy independence and economic growth (the supply,
demand, and technical efficiency of biofuel production) will reduce ancient carbon emissions
and promote sequestration. However, the opposite is not true. Reducing carbon emissions will
not promote energy independence and economic growth. (2112.1, p.3)
The commenter noted that EPA chose to remove military effects from their work on the basis
that it is too difficult, but constructed a global indirect land use model with limited data. The
commenter noted that it is not clear why one analysis was deemed unworkable, while the other
apparently unworkable analysis was deemed ok. (2112.1, p. 12)
Our Response:
As the commenter notes, for the RFS2 proposal an economy-wide analysis was not
undertaken. However, for the final RFS2 rule, EPA did conduct an economy-wide analysis. As
described in the January 11, 2010 Memorandum to Docket Re: Economy-Wide Impacts of the
Renewable Fuels Standard, our analysis shows that the combined impact of higher agricultural
commodity prices and higher transportation fuel prices decrease U.S. GDP in the early years of
the program. However, the costs of renewable fuels are projected to decrease over time, while
the cost of petroleum products is projected to increase significantly over time. By 2016,
renewable fuels are projected to be cheaper than the gasoline and diesel that they replace. By
2030, the impacts of lower transportation fuel costs and lower world oil prices outweigh the
impacts of higher agricultural commodities, resulting in an increase in U.S. GDP with the RFS2
rule.
EPA believes that all of the impacts of the RFS 2 rule—including international impacts—
should be estimated when assessing the impacts of the rule. In the case of EPA's analysis of the
RFS2 rule's impacts on agricultural commodities, it is well understood that domestic and
international markets are linked by changes in the price of agricultural commodities and net
exports of agricultural commodities. Thus, increasing use of renewable fuels in the U.S. will
have market impacts that transmit to agricultural production patterns outside the U.S. and result
in international land use change. Agricultural sector modeling tools have been used for decades
to analyze the impacts of different policies on the price and production of different commodities
worldwide. Therefore, we were able to use the well-established, peer-reviewed FAPRI/CARD
model to estimate the amount of additional crop acres that would be brought into production as a
result of the renewable fuel standard volumes. .
In contrast, the link between energy security benefits and military expenditures to secure a steady
flow of petroleum is less well understood and established. See related responses to comments by
Renewable Energy Group (EPA-HQ-OAR-2005-0161-1015), SoyMor Biodiesel, LLC (EPA-
HQ-OAR-2005-0161-2010), and Western Dubuque Biodiesel LLC (EPA-HQ-OAR-2005-0161-
2011) in Section 10.3 on Energy Security.
What Commenters Said:
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RFS2 Summary and Analysis of Comments
Document No.: EPA-HQ-OAR-2005-0161-2502
Organization: Verenium Corporation
Comment:
The commenter (2502.1) believes that in its final cost-benefit analysis, EPA should provide full
and fair consideration, e.g., through probabilistic analysis, of the economic and consumer
benefits that can be expected over time from the addition of volumes to the total U.S. fuel supply
called for by the RFS2 program. (2502.1, p.ll) (See Docket Number 2502.1, pp.10-11 fora
detailed discussion of this issue)
Our Response:
For the final rulemaking, EPA has conducted a thorough cost-benefit analysis of the
required renewable fuel volumes. Please refer to Section VIII of the preamble and Chapter 5 of
the RIA for more detail about, and the results of, the economic impact analysis. While not all of
the analyses lend themselves to thorough probabilistic analysis, we have conducted a
probabilistic analysis of the quantified and monetized health impacts associated with the required
renewable fuel volumes. We also present certain economic impact results in terms of ranges to
reflect uncertainty when appropriate.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) noted that under Executive Order 12866, EPA is required to analyze the
economic impacts of the proposed regulation, and if significant, to obtain review by the Office of
Management and Budget. EPA's analysis is incomplete because it is missing an assessment of
the costs to automakers, the public and others due to misfueling. The commenter also believes
that EPA must conduct and publish this analysis for comment before finalizing the rule. (2132.1,
p.7) [[See Docket Number 2132.1, pp.27-28 for detailed discussion on this issue]]
Our Response:
This issue is not unique to this rulemaking. E85 is already a fuel in the marketplace
being supported by the Alliance and its members and already raises concerns of misfueling
conventional vehicles on E85. It is for this very reason that the FTC is considering E85 pump
label requirements, and why we proposed similar pump label requirements in the NPRM.
Furthermore, while we have modeled its use, E85 is not required to be used by this program. It
is up to the industry and marketplace to determine which renewable fuels are produced and how
they are used in order to meet the RFS2 standards. E85 is one of several options currently being
considered by industry. If E85 continues to be pursued and its use continues to grow, then the
potential for such misfueling concerns may also grow, and as a result efforts to mitigate and
alleviate potential in-use concerns should then be considered and investigated. Given the
uncertainty in the future use of E85, the uncertainty in projecting misfueling rates in a future
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Chapter 10: Economic Impacts and Benefits of the Rule
marketplace that looks very different from today's E85 market, and the uncertainty of potential
misfueling mitigation measures, it is not possible at the present time to quantify costs associated
with this potential misfueling, and we have no basis to believe that they would be large enough
to have a significant impact on the overall economic impacts of the program. Finally, the
standards we are setting were specified in EISA by Congress and are not being set on the basis of
the economic impacts. Thus, there is no compelling need to assess these costs prior to finalizing
the rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2305
Organization: The Soap and Detergent Association
Comment:
The commenter [[2305]] stated that federal biofuel policies have persistently threatened its
continued viability as a domestic industry. If animal fats are lost as a raw material to the
oleochemical industry, the logical replacement for tallow is palm oil. However, a shift to palm
oil will set the stage for the U.S. oleochemical industry to be lost to offshore producers.
The commenter states that at present animal fats are competitively priced in comparison to palm
oil. This is in turn allows U.S. domestic producers to compete effectively with palm oil-based
competitors. However, if animal fats either become unavailable for oleochemical production
because of government policies directing them to biodiesel production, or, they lose their price
advantage for the same reason, the U.S. industry will be forced offshore to be near palm oil
sources. It is critically important to understand that current policies threaten both availability
and price. [[#2305.1 p.2]]
Our Response:
The RFS2 rule allows for renewable fuel to be produced from a variety of feedstocks.
These feedstocks can be crop-based, crop residues, waste-based, or dedicated energy crops. The
analysis presented in Chapter 1 of the RIA indicates that biodiesel could be produced from a
number of sources, including soybean oil, yellow grease, fractionated corn oil, and animal fats.
The volumes presented in Chapter 1 represent only one possible pathway for meeting the RFS2
volume requirements. We expect that biodiesel will be produced from feedstocks on a least-cost
basis.
However, we are sensitive to the concerns raised by commenters that increases in
renewable fuels will affect industries beyond the transportation and fuels industries. While we
have attempted to model the economy-wide impacts of the RFS2 rule, as described in the
January 11, 2010 Memorandum to Docket Re: Economy-Wide Impacts of the Renewable Fuels
Standard, our current modeling framework does not have sufficient detail to determine the
impact on the oleochemical industry. In addition, the commenter has not provided EPA will any
specific data or information that can be used to estimate the impacts of the RFS2 on the
oleochemical industry.
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RFS2 Summary and Analysis of Comments
It should be noted that Darling International, a large rendering company and marketer of
rendered fats and recycled greases, submitted comments and analysis suggesting there would be
adequate supply of this material for significantly increased use in renewable fuel production (see
Docket item OAR-2005-0161-2151.2). They point out that only about 20 percent of rendered
materials are currently used by the oleochemical industry, and suggest exports (totaling some 3
billion Ibs/yr, or about 30 percent of current supply) as a potential source of additional domestic
feedstock. Another mitigating factor is increased contribution of non-food grade corn oil from
dry mill ethanol production. We project this will bring as much as 5 billion Ibs/yr of additional
inedible and relatively low-cost feedstock to the market, helping to balance supply issues.
Document No.: EPA-HQ-OAR-2005-0161-2112
Organization: Biomass Rules, LLC
Comment:
The commenter (2112.1) believes that the weak summary of the agricultural, forestry, MSW
(none), and energy security costs and benefits are disappointing. Much of the text in the RFS2
preamble on benefits is dedicated to explaining why these economic and energy security issues
could not adequately be developed with EPA's allotted time frame. (2112.1, p.3)
Our Response:
As detailed in the RIA, we have projected a wide range of costs and benefits associated
with the increased use of renewable fuels needed to achieve the RFS2 standards. Most of these
analyses have been updated considerably from the work done for the NPRM and have taken into
account information provided to us during the public comment period. More work can always be
done, but we balance our analyses to provide a perspective which is both sufficient and valuable
on what the environmental and economic impacts are of increased renewable fuel use.
10.2 Agricultural Impacts
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2305
Organization: The Soap and Detergent Association
Comment:
Commenter [[2305]] states total fat and greases production has been flat over the last three years
at circa 10 billion Ibs according to the National Renderers Association (NRA). This includes
everything from inedible tallow, hog grease, yellow grease, lard, edible tallow and poultry fat.
Last year, 863 million Ibs, or over 8% of the 10 billion Ibs, went to biodiesel according to an
NRA report. This was more than a 200% increase over the previous year. Over the last three
years, fat prices have jumped from the mid teens (historical range) to as much as $0.50/lb. The
U.S. oleochemical industry has historically used around 2 billion Ibs of fats and greases as raw
material for a viable and important contributor to the U.S. economy. If soya is excluded from
qualification under the RFS2, then essentially 100 percent of United States fats and greases are
likely to be consumed in meeting the biodiesel mandates. There would be nothing that the
oleochemical industry could do to stop it. Unfortunately, even if soya is qualified under the
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Chapter 10: Economic Impacts and Benefits of the Rule
RFS2, fat prices will likely rise to soya price which is almost equally catastrophic for
oleochemical producers as described above. [[#2305.1 p.3-4]]
Our Response:
Based on the lifecycle analysis conducted for this final RFS2 rule, soybean-based
biodiesel will qualify as a biomass-based diesel renewable fuel. Therefore, the commenters
concern that 100 percent of the U.S. fats and greases will be needed to meet the biofuel mandates
is not applicable. The RFS2 allows for renewable fuel to be produced from a variety of
feedstocks. These feedstocks can be crop-based, crop residues and waste-based or dedicated
energy crops. The analysis presented in Chapter 1 of the RIA indicates that biodiesel could be
produced from a number of sources, including soybean oil, yellow grease, fractionated corn oil,
and animal fats. In addition, EPA estimates that a significant contribution of non-food grade
corn oil from dry mill ethanol production will be produced to meet the EISA biodiesel
requirement. We project this will bring as much as 5 billion Ibs/yr of additional inedible and
relatively low-cost feedstock to the market, helping to balance supply issues. The volumes
presented in Chapter 1 represent only one possible pathway for meeting the RFS2 volume
requirements. In reality, we expect that biodiesel will be produced from feedstocks on a least
cost basis.
As renewable fuel volumes increase to meet the RFS2 volumes, the prices of all biodiesel
feedstocks are generally expected to increase, not just the price of rendered fats. As described in
Chapter 5 of the RIA, our analysis shows that soybean oil prices will also increase as a result of
the RFS2 volume requirements. Therefore, it is unlikely that the biodiesel mandate will result in
fat prices that rise to the same level as soybean oil prices. Since soybean oil has several higher
value uses (e.g., as a food source) than rendered fats and oils, we expect that soybean oil prices
will continue to remain higher than rendered fats and oil prices even with the higher biodiesel
volumes required by the RFS2 rule.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2138
Organization: American Meat Institute, National Chicken Council, National Turkey
Federation, Farm Econ LLC
Comment:
Commenter [[2138]] states that contrary to the EPA analysis in the NPRM, the RFS and other
policies are likely the major cause of the increase in corn prices since 2005. The U.S. is the only
country with a biofuel policy that subsidizes and encourages a grain-based ethanol industry. U.S.
tax credits and the RFS have offered financial support and a guaranteed market for the use of
corn to produce ethanol. Since the advent of the RFS the only major increase in GLOBAL grain
demand has come from the U.S. ethanol sector. For that reason, we believe that in the absence of
the RFS and direct subsidies the U.S. ethanol sector would be much smaller, and agricultural
price much lower, than is the case today. We also believe that future increases in the RFS will
exacerbate the current effects of the RFS. [[2138 p.12]]
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RFS2 Summary and Analysis of Comments
Our Response:
We disagree with the commenter that the U.S. increase in renewable fuels is the only
cause for the increase in agricultural commodities since 2005. A number of factors have
contributed to the recent increase in corn prices, such as higher foreign demand for coarse grains,
sustained drought in major international crop producing regions, and historically high energy
prices. Furthermore, increasing world demand for vegetable oils can also contribute to higher
overall agricultural commodity prices, including grains, since increased production of oil crops
may crowd out production of alternate crops. Since the majority of additional renewable fuel
required by the RFS2 must be cellulosic or advanced renewable fuels, our analysis shows that
there will be only a modest increase in crop prices as a result of the RFS2 requirements. For
instance, the FASOM model estimates that between the AE02007 Reference Case and the
Control Case renewable fuel volumes will result in an increase in the U.S. corn price of $0.27 per
bushel (8.2 percent) above the Reference Case price in 2022. By 2022, FASOM projects that
U.S. soybean prices increase by $1.02 per bushel (10.3 percent) above the Reference Case price.
Higher corn and soybean prices also result in higher meat prices. In 2022, it is estimated that the
average price for all meat production in the FASOM model increases by 0.1 percent.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2010, EPA-HQ-OAR-2005-0161-2011, EPA-
HQ-OAR-2005-0161-2013
Organization: SoyMor Biodiesel, LLC, Western Dubuque Biodiesel LLC, Central Iowa
Energy, LLC
Comment:
The commenter (2010) states that FASOM assumes the increased cost/person for food due to
higher usage of soy biodiesel in 2022 without considering the policy impacts of banning trans fat
by policy makers. Data from the U.S. census bureau shows a 56% drop in soy oil used for baking
and frying since 2002. The commenter adds that even as soy oil used for baking and frying has
dropped dramatically, soy oil used to produce biodiesel in the U.S. has declined 35% from July
2007 to May 2008. [[Docket number 2010.1, pp. 13-14]], [[Docket number 2011.1, pp. 13-14]]
Our Response:
EPA's analysis using the FASOM and FAPRI models are only analyzing the impact of
increased demand for renewable fuels. Certain assumptions, such as population growth,
developed land use, as well as laws, regulations, and policies (e.g., conservation reserve
program) are held ceteris paribus between model scenarios. Thus, since EPA analyzes the
difference between modeling scenarios, we are only observing the effect of change in demand
for renewable fuel. Additional information on how the FASOM and FAPRI models were used to
estimate the impact of increased demand for renewable fuel can be found in the RIA and in their
respective technical reports in the docket.
What Commenters Said:
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Chapter 10: Economic Impacts and Benefits of the Rule
Document No.: EPA-HQ-OAR-2005-0161-2143
Organization: New York State Department of Environmental Conservation
Comment:
The commenter (2143) mentions that it is not clear where the depicted feedstock inventory for
cellulosic biofuel production in 2022 comes from, given that no cellulosic biofuel is being
produced in the reference case and suggests that EPA should discuss, by State, the sources of
expected cellulosic biofuel feedstocks. [[See Docket Number 2143.2, p.8]]
Our Response:
For the proposal and the final rulemaking, EPA provides regional crop production at the
state level in each scenario analyzed in the docket as part of the FASOM modeling results.
Specifically, in regard to cellulosic renewable fuel, the two primary feedstocks projected for
cellulosic renewable fuel production are switchgrass and corn residue. The RIA for the final
rulemaking includes the top ten producing states for each of these feedstocks in Chapter 5. More
information on these feedstocks, and other cellulosic feedstocks by region can be found in the
docket.
10.3 Energy Security Impacts
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1015, EPA-HQ-OAR-2005-0161-2010, EPA-
HQ-OAR-2005-0161-2011,EPA-HQ-OAR-2005-0161-2510
Organization: Renewable Energy Group, SoyMor Biodiesel, LLC, Western Dubuque
Biodiesel LLC, Iowa Renewable Energy, LLC
Comment:
The commenter (1015) states that policy makers, administration officials, and agency personnel
have told the American public that energy security is a top priority and necessitates complex
public policy and enormous public expenditure to achieve. The cost of the protection of the
imported crude oil supply has been studied and analyzed. One report by the International Center
for Technology Assessment concluded that the cost of protection could be as high as $0.30/gal
just for gasoline. It is disingenuous for EPA to acknowledge the costs, but conclude that it's not
worth the time and effort to add this component to the full life cycle analysis of petroleum fuel
because of a lack of LCA availability. The commenter suggests commissioning a model to
address the carbon cost of petroleum. The Department of Defense estimates show the cost to
protect Persian Gulf oil interests at $50B/yr. The commenter questions EPA's conclusion that
the carbon cost of this mission is not noteworthy. [[Docket number 2123.1, p. 13]]
The commenter (2510) states that as long as we are importing foreign oil, there will be a military
presence required to prevent disruptions in the supply and distribution chain. These costs are not
included in the government models but are real costs that make biofuels more attractive. The
commenter finds it interesting the EPA doesn't think it is important to figure the costs because it
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RFS2 Summary and Analysis of Comments
is too difficult; however, if the government can't do it, how does EPA expect a small business to
do it effectively? [[Docket number 2510.1, p. 6]]
Our Response:
For the RFS2 rule, U.S. military costs associated with energy security, and resulting
greenhouse gas emissions from military activities, are excluded because their attribution to
particular missions or activities is not well understood or established. Most U.S. military forces
serve a broad range of security and foreign policy objectives. Attempts to attribute some share
of U.S. military costs or greenhouse gas emission to changes in U.S. oil imports are further
challenged by the need to estimate how those costs and greenhouse gas emissions might vary
with incremental variations in U.S. oil consumption and imports as a result of the RFS2 rule. In
the RFS1 rulemaking, a peer review was undertaken of the methodology that is the basis for
U.S.'s energy security analysis. Most of the peer reviewers were in agreement that U.S. military
costs should not be quantified in EPA's energy security analysis. While studies that were
submitted to the Agency did attempt to quantify the military costs associated with maintaining a
stable flow of petroleum to the U.S., even the studies' authors concede that the estimates
developed should not be used for policy analysis's purposes, but rather for illustrative and
discussion purposes only.
The reason the system boundaries used for threshold assessment in the proposed rule did
not include indirect emissions from petroleum production was to be consistent with the goals and
scope of the analysis as defined by the Energy Independence and Security Act (EISA).
The text of EISA specifies that the lifecycle threshold analysis for the different renewable
fuel categories be compared to baseline lifecycle greenhouse gas emissions. EISA defines
baseline lifecycle GHG emissions as:
The term 'baseline lifecycle greenhouse gas emissions' means the average lifecycle
greenhouse gas emissions, as determined by the Administrator, after notice and
opportunity for comment, for gasoline or diesel (whichever is being replaced by the
renewable fuel) sold or distributed as transportation fuel in 2005.
Therefore, the petroleum production component of the system boundaries is specifically
mandated by EISA to be based on the 2005 average for crude oil used to make gasoline or diesel
sold or distributed as transportation fuel, and not the marginal crude oil that will be displaced by
renewable fuel.
However, for this final rule, we did analyze the potential indirect impacts of petroleum
use. Discussion of our analysis can be found in Section V.B.3 of the preamble and Chapter 2.7
oftheRIA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2138
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Chapter 10: Economic Impacts and Benefits of the Rule
Organization: American Meat Institute, National Chicken Council, National Turkey
Federation, Farm Econ LLC
Comment:
Commenter [[2138]] states the table [[on p.4]] shows that as we moved into 2007 there was a
marked increase in the relationship between energy prices, as represented by gasoline, and corn
prices. As ethanol production and energy prices increased in 2008 the correlation increased to
0.89. The increased correlation coincides with the rapid expansion in ethanol production that we
believe was largely a result of the RFS and a guarantee of a market. As the RFS expands from
the current 10.5 billion gallons to 36 billion in 2022 the fuel and agricultural price linkage will be
strengthened. This is important and highly relevant information to EPA analysis. It also casts
serious doubts on the results obtained from the FAPRI, FASOM and other models used to assess
the impact of RFS2. These models used in EPA analysis contain substantial historical data prior
to 2007. In that data there is essentially no correlation between energy sector prices and
agricultural prices. Recent developments represent a fundamental structural change. In particular,
predicted impacts of energy markets and price changes on agricultural sector prices and
production will be substantially underestimated by models that do not include such a
relationship. [[2138p.4]]
Our Response:
As the commenter notes, the market price of oil-based and renewable fuels are
increasingly linked since the fuels in their end-use form tend to be relatively close substitutes for
each other. In the analysis of the RFS2 rule, EPA has focused on the production costs of
renewable fuels in comparison to oil prices. We believe that the models that we are using—
FAPRI, FASOM and engineering processing models—are accurately assessing the costs of
producing renewable fuels, which we are using to assess the impacts of the RFS2 program.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) believes that the energy security impacts of increased ethanol mandates
are marginal and costly. [[Docket number 2233.2, p. 65]] [[See docket number 2233.2, pp. 65-66
for additional discussion of this issue.]]
Our Response:
Energy security is generally agreed to be the U.S.'s ability to obtain and maintain a steady
and affordable flow of energy for its use. By requiring the wider use of renewable fuels, the
RFS2 rule promotes diversification of transportation fuels in the U.S. and helps to improve the
U.S.'s energy security. The wider use of renewable fuels has two effects. First, by reducing U.S.
oil imports and consumption, the RFS2 rule lowers the world oil price, which decreases the costs
of purchasing imported crude oil/refined products (the so called "monopsony/import cost"
effect). In addition, the wider use of renewable fuels lowers the potential macroeconomic
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RFS2 Summary and Analysis of Comments
disruption impacts to the U.S. economy of potential future oil supply disruptions. In addition,
the Agency conducted an extensive cost analysis for the RFS2 rule and determined that cost-
effective renewable fuel technologies will be developed and deployed, and that the resulting cost
of the renewable fuels will be competitive with petroleum products. Thus, the Agency does not
believe that the energy security benefits impacts of increased use of renewable fuels are costly or
marginal.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) believes that the energy security impacts of increased ethanol mandates
are marginal. The commenter further states that the biofuel mandates impact energy security only
at the margin as a gallon of ethanol has only two-thirds the energy content of a gallon of gasoline
and corn-based ethanol production uses a significant amount of energy obtained from fossil
fuels. In fact, higher corn-based ethanol production could actually increase natural gas imports.
Additionally, biofuel mandates are expensive because both corn-based and cellulosic ethanol are
costly to produce relative to conventional fuels, and the energy content of ethanol is only two-
thirds that of a gallon of gasoline. [[Docket number 2393.1, pp. 70-71]]
Our Response:
Energy security is generally agreed to be the U.S.'s ability to obtain and maintain a steady
and affordable flow of energy for its use. For every gallon of ethanol produced, roughly two-
thirds of a gallon of imported gasoline or equivalent crude oil product is likely to be displaced
(since imported gasoline/crude oil is likely to be the "marginal" supply of petroleum products to
the U.S.) Furthermore, imported gasoline/crude oil is likely to come from portions of the world
where oil supply is unstable. As a result, decreased use of this petroleum imports increases the
energy security of the U.S. The Agency conducted an extensive cost analysis for the RFS2 rule
and determined that cost-effective renewable fuel technologies will be developed and deployed,
and that the resulting cost of the renewable fuels will be competitive with petroleum products.
10.4 Benefits of Reducing GHG Emissions
What We Proposed:
Document No.: EPA-HQ-OAR-2005-0161-2114
Organization: Pew Center on Global Climate Change
Comment:
The commenter (2114) suggests that given that future economic growth and interest rates are
uncertain, and could even be negative in the worst case, using the minimum recommended rate is
justified on both ethical and analytical grounds.
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Chapter 10: Economic Impacts and Benefits of the Rule
The commenter is concerned that in more recent social carbon cost estimate by an Interagency
Working group, a high discount rate (3-5%) was used. The justification for such a high discount
rate is faulty, therefore, and should be abandoned on the grounds of analytical inaccuracy and
incompatibility with the ethical standards embodied in current OMB and EPA guidance.
(2114.Lpdf.pl)
The commenter (2114) mentioned that it is critically important that the EPA analyze discount
rate uncertainty as planned and that it employs the resulting SCC estimate in developing the final
standard. (2114.1.pdf, p2)
The commenter (2114) comments that many expected and potential impacts are omitted from the
SCC calculation, including nonmarket impacts and potential abrupt, catastrophic, or irreversible
outcomes. The commenter comments that by this omission, the benefits of avoiding these
impacts is effectively set to zero- the only value known to be incorrect. The commenter suggests
that until EPA is better able to quantify omitted impacts directly, analysts should compensate by
an alternative method. One option is to solicit expert opinions on the value of omitted impacts.
Another option is to add a risk premium. ((2114.1.pdf, p.3)
The commenter (2114) comments on the unjustified optimism of I AM results and suggests that
since current lAMs do not capture the impacts of changing extremes, it is folly to accept their
estimates of net positive benefits, especially in climate-sensitive sectors like agriculture and
forestry. (2114.1.pdf, p.3)
Our Response:
As mentioned in the response to Commenter [[2117]] the Interagency Workgroup is
actively working on the development of new SCC values. The workgroup is aware of the critical
role played by discount rates in the ultimate ranges of SCC values. Under certain discounting
schemes, such as the Ramsey equation, the growth rate is highly correlated to the choice of
discount rate. Other discounting schemes allow for uncertainty in the discount rate over time. All
comments on discounting, both on how the rate is determined and uncertainty over the rate, are
being considered by the Interagency Workgroup for the development of new SCC values.
Omitted impacts are an important issue when examining the benefits of emissions
reductions. To some extent, many of these impacts are captured in the three integrated
assessment models used for the interim values, including non-market impacts and some
catastrophic impacts. However, the models are imperfect and EPA therefore feels it is important
to discuss qualitatively the nature and extent of these omitted impacts, indicating the likely
direction of the bias, in order to better inform policy makers. In the case of the RFS2, however,
the standards have been prescribed by Congress, so the exclusion of these benefits does not
impact the setting of the standard. Commenter's suggestions on how to address these issues in
future standard settings are appreciated and will be considered.
As the commenter rightly points out, the impacts in the integrated assessment models are
based primarily on changes in average temperatures. Impacts are also likely to occur because of
increasing variance in weather extremes (increased droughts, floods, severe weather events).
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RFS2 Summary and Analysis of Comments
These impacts are also not currently well captured by IA models and EPA has sought to address
this issue in a similar fashion to other omitted impacts.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2117
Organization: NYU School of Law
Comment:
Commenter [[2117]] states that according to best practices, and as required by EPA's internal
guidelines and Executive Order 12,866, 39 EPA must analyze the potential costs and benefits of
its proposed regulation, and must quantify those impacts to the extent possible. To estimate the
projected benefits of reducing GHG emissions, EPA must calculate the reductions achieved by
switching to renewable fuels, multiplied by the monetary measure of incremental damage
resulting from each additional ton of GHG emissions, often called the social cost of carbon
(SCC).
Commenter [[2117]] states that EPA does employ a range of SCC estimates in both its proposed
rule on the Renewable Fuel Standard program and in its draft regulatory impact analysis. IPI
largely supports EPA's approach to the use of SCC estimates. However, as EPA readily admits,
its SCC figures are preliminary and uncertain. More recently, a collection of federal agencies
has been working on a more refined methodology to calculate the SCC. In a separate rulemaking
released this month, EPA used these newer Interagency figures to calculate the benefits of
reducing GHG emissions from motor vehicles. These comments do not promote the use of any
specific range of SCC figures over another. Instead, these comments seek to remind EPA of
certain methodological considerations that must be taken into account no matter what SCC range
is selected. [[2117.1 p.7]]
Commenter offers extensive further commentary on pages 7-12.
Our Response:
EPA thanks the commenter [[2117]] for the extensive methodological input. The
commenter raised several key issues. The first of these is the treatment of omitted impacts and
ancillary benefits. The commenter notes the importance of an in-depth discussion, rather than
simply a listing of omitted impacts. Additionally, the commenter notes that to the extent
possible, ancillary impacts should be separately identified and calculated. The RFS2 standards
we are setting were specified in EISA by Congress and are not being set on the basis of the
economic impacts, including the value of the SCC. However, the commenter's suggestions will
be taken into account in the development of new SCC values.
The commenter additionally noted the importance of accounting for catastrophic and
irreversible events and suggested several alternate methodologies for doing so. Again, this work
continues to be ongoing and all comments will be considered in the derivation of new SCC
values.
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Chapter 10: Economic Impacts and Benefits of the Rule
In a discussion about the omitted benefits to the domestic SCC values, the commenter
notes that there are specific omitted benefits that should be taken into account, above and beyond
those listed by EPA. Work continues to better estimate and understand all impacts, both those
that occur domestically as well as globally.
The commenter discusses discounting choices and notes that EPA and OMB guidance
both place ranges of discount rates for long-term, intergenerational issues between 0% and 3%.
Commenter suggests that updated SCC values should reflect this guidance. These comments
will be taken into account by the Interagency Workgroup as new values are developed.
Finally, the commenter notes that the presentation of the results is critically important,
noting both that it is mathematically incorrect to take the arithmetic mean of the discount rates
(as opposed to the discount factors) and that presentation of only means obscures the distribution
and uncertainty around the SCC estimates. EPA agrees with both these points and will strive to
address these issues within the context of the Interagency Workgroup process to develop a new
set of SCC estimates.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1987
Organization: Cornell University
Comment:
Commenter [[1987]] states it is difficult to overstate the role played by the social discount rate in
cost benefit analyses of public projects. And it is even more difficult to do so when the project
under consideration extends into the distant future, as is the case when dealing with climate
change consequences of GHG emissions. A case in point is the recent controversy surrounding
the Stern Review (Stern, 2007), which revolves around the parameters of the SDR (Dasgupta
2007, Nordhaus 2007, Weitzman 2007). The SDR is often represented in the form r = p + g*r|,
where p is the pure (utility) discount rate, r| is the elasticity of marginal utility of consumption
and g is the growth rate of per capita consumption. This expression separates between the two
main motives of discounting, namely impatience (p) and economic growth (g). While
discounting for impatience (or pure time discounting) is reasonable for private investments, it is
harder to justify in public investments. [[1987.1 p.6-9]]
Our Response:
EPA agrees that SCC estimates are highly sensitive to selection of the discount rate. EPA
will strive to address this issue through the Interagency Workgroup's ongoing development of
new SCC numbers.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2326
Organization: N/A
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RFS2 Summary and Analysis of Comments
Comment:
The commenter's (2326) remarks are directed primarily to the new interagency social cost of
carbon (SCC) estimates that have appeared in a recent DOE rulemaking. The commenter focuses
on methodological issues that the interagency process might consider. It is important to note that
in the RFS2 proposed rule, the estimates are not used for setting the standard, which has already
been legislatively prescribed. That stands in stark contrast to other rules considering SCC
estimates, such as recent DOE rules for beverage machines and appliances and DOT CAFE
standards, where the chosen SCC estimates can influence the standard. For this reason (standard
setting), the commenter believes it will be important for the Administration to settle on a few
specific estimates that can be applied across rules that have incremental effects on global
emissions (i.e., non-climate policies). Clearly, that is what the Interagency process that has
developed new tentative estimates is attempting to do, and they should be commended for it.
[[Docket number 2326.1, p. 1]]
The commenter provided the following specific comments about SCC, as it was presented in the
DOE final beverage machines rule, Energy Conservation Program: Energy Conservation
Standards for Refrigerated Bottled or Canned Beverage Vending Machines; Final Rule, Federal
Register, Vol. 74, No. 167, August 31, 2009, pp. 44914-44968,
http://wwwl.eere.energy.gov/buildings/appliance standards/commercial/beverage machines.ht
ml.
Our Response:
EPA thanks the commenter [[2326]] for the various comments regarding the presentation
of interim SCC estimates in the DOE final beverage machines rule, Energy Conservation
Program: Energy Conservation Standards for Refrigerated Bottled or Canned Beverage Vending
Machines; Final Rule, (74 FR 44914; August 31, 2009). EPA has since then presented a similar
discussion about the derivation and use of the Interagency Workgroup's interim SCC estimates
in the Proposed Rulemaking to Establish Light-Duty Vehicle GHG Emission Standards (74 FR
49454, September 28, 2009).
The commenter noted that socioeconomic uncertainty cannot be resolved and has
implications for future emissions, climate change, and adaptive capacity. The Interagency
Workgroup plans to examine the implications of various socioeconomic scenarios on the SCC.
The commenter discussed the filtering exercise conducted as part of the interim SCC
derivation, and noted that little has changed in SCC modeling since 2001. The Interagency
Workgroup decided to limit the sample size as a trade-off for SCC estimates from the most
recent versions of the three models. Although the sample size is smaller, the estimates are
presumed to be superior to estimates from earlier versions of the models. The distribution of the
SCC is planned to be explored in the next phase of SCC development within the workgroup.
The commenter discussed statements made in the Vending Machine rule regarding the
possibility of future consideration of SCC estimates based off of business-as-usual projections.
We agree that this type of departure is not warranted.
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Chapter 10: Economic Impacts and Benefits of the Rule
The commenter stated that the estimates resulting from the filtering and averaging
approach do not fully capture SCC uncertainty and climate change risk. EPA, as a part of the
Interagency Workgroup, has begun a process that will better, and more systematically,
characterize the uncertainty surrounding estimates of the SCC.
The commenter stated that estimates based on different discount rates cannot be
averaged. As described in the referenced text, both 3 percent and 5 percent are reasonable
estimates of the discount rate under specific economic assumptions. EPA agrees and will strive
to address this issue through the Interagency Workgroup's ongoing development of new SCC
estimates. In addition, EPA has judged other rates to be reasonable (e.g. 2 percent) for prior
analysis (such as the NPRM for this rule). The current work to better characterize the uncertainty
surrounding SCC estimates will also explore different approaches to uncertainty in the discount
rate.
The commenter recommended that EPA reconsider providing an odd number of SCC
estimates. EPA continues to examine the appropriateness of these five values and expects to
release new ranges in the coming months. EPA agrees with the commenter on the importance of
developing SCC estimates based on methodological soundness and places high emphasis on this
issue.
The commenter asked why the Hope (2006) estimates were labeled as 5 percent. One
common equation used to calculate the discount rate is the Ramsey equation: r = p + g*r\, where
p is the pure rate of time preference, g is the growth rate, and r\ is the elasticity of the marginal
utility of consumption. The pure rate of time preference cited in the Hope (2006) article is 3
percent per year. While the actual discount rate varies over time, it is relatively common to refer
to the discount rate as the pure rate of time preference plus 2 percent, where the 2 percent is
roughly the growth rate times the elasticity of the marginal utility of consumption. A more
accurate categorization would be "approximately 5 percent" or "a pure rate of time preference of
3 percent." On-going efforts to develop a range of SCC estimates will address this issue directly.
The commenter requested more information to understand the application of Newell and
Pizer discounting. The undiscounted stream of benefits was not available for each of the studies
included in this analysis. The way that the Newell and Pizer (2003) findings were adapted for the
interim values was to apply the adjustment factors implied by either their preferred random walk
model or mean-reverting model. According to the random walk model, SCC estimates based on
a 3 percent or 5 percent discount rate are adjusted by 70.733 percent and 89.8 percent,
respectively. The mean-reverting model implies adjustments of 10.733 percent and 16.8 percent
for estimates based on a 3 percent or 5 percent discount rate.
Note Newell and Pizer based adjustment factors were not applied to estimates from Guo
et al. (2006) that use a different approach to account for discount rate uncertainty.
The commenter also stated that Newell and Pizer discounting will be inconsistent with
various alternative futures. On-going work within the Interagency Workgroup is exploring the
implications of uncertainty over socio-economic futures.
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RFS2 Summary and Analysis of Comments
The commenter presented various observations about efficiency and ethical judgments
underlying discount rates, intergenerational implications, interpretation of a risk premium, and
dynamic discount rates. The Interagency Workgroup is considering all comments when
developing new ranges of discount rates to use for updated SCC values.
The commenter noted difficulty in discussing domestic SCC estimates without more
guidance about how the agencies would use such estimates. EPA will take this comment into
consideration if and when it explores domestic estimates in the development of updated SCC
values.
The commenter requested information about base years and Newell and Pizer
discounting. Please see table below.
Model
FUND
FUND
FUND
PAGE
PAGE
DICE
Study
Anthoffetal. 2009
Link and Tol 2004
Guo et al. 2006
Wahba & Hope 2006
Hope 2006
Nordhaus 2008
Base year (Best available info)
2000
1995
1995
2000
2000
2005
Year Dollars (Best available info)
2000
1995
1995
2000
2000
2005
Additionally, the commenter requested a complete list of references. The references are
as follows:
Anthoff, D., C. Hepburn, and R. Tol. 2009. Equity weighting and the marginal damage costs of
climate change. Ecological Economics 68: 836:849.
Guo, J., CJ. Hepburn, R. Tol, and D. Antoff. 2006. Discounting and the social cost of carbon: a
closer look at uncertainty. Environmental Science and Policy 9: 205-216.
Hope, Chris. 2008. Optimal carbon emissions and the social cost of carbon over time under
uncertainty. The Integrated Assessment Journal 8(1): 107-122.
Hope, Chris. 2006. The Marginal Impact of C02 from PAGE2002: An Integrated Assessment
Model Incorporating the IPCC's Five Reasons for Concern. The Integrated Assessment Journal
6(1): 19-56.
Link, P.M., and R. Tol. 2004. Possible Economic Impacts of a Shutdown of the Thermohaline
Circulation: an Application of FUND. Portuguese Economic Journal 3: 99-114.
Newell, R., and W. Pizer. 2003. Discounting the Distant Future: How Much Do Uncertain Rates
Increase Valuations? Journal of Environmental Economics and Management 46: 52-71.
Nordhaus, William. 2008. A Question of Balance: Weighing the Options on Global Warming
Policies. New Haven, CT: Yale University Press.
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Chapter 10: Economic Impacts and Benefits of the Rule
Tol, R. 2008. The Social Cost of Carbon: Trends, Outliers and Catastrophes. Economics: The
Open-Access, Open-Assessment E-Journal 2(25): 1-24.
Wahba, Mohammed, and Chris Hope. 2006. The Marginal Impact of Carbon Emissions Under
Two Scenarios of Future Emissions. Energy Policy 34: 3305-3316.
The commenter also identified an incorrect reference—EPA notes that Nordhaus (2007)
does not exist.
10.5 Economy-Wide Impacts
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2093
Organization: Targeted Growth, Inc.
Comment:
Commenter [[2093]] states that as a company that is pursuing a business strategy focused on new
energy crops, we have spent considerable time understanding how the proposed rules will treat
new energy crops and are extremely concerned that the rules as written will negatively impact
our ability to continue developing next generation biofuel crops. The RFS2 as currently written
will have a chilling effect on the development of new energy feedstocks, impeding investment
and innovation, [[see docket #2093, p.2]]
Our Response:
A variety of different renewable fuels are capable of qualifying for use under the RFS2
rule. These feedstocks can be crop-based, crop residues and waste-based or dedicated energy
crops. While there are specific definitional requirements for feedstocks, the Act is feedstock-
neutral and allows the market to determine which feedstock will be used to satisfy the EISA
requirements. EISA set volume requirements that encourage significantly higher volumes of
advance renewable fuels from cellulosic feedstock sources that can include energy crops. Thus,
we do not believe that EISA will have a "chilling effect" on new energy feedstocks, or act as an
impediment to investment and innovation in the development of energy feedstocks.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2309
Organization: Grocery Manufacturers Association, National Council of Chain
Restaurants, and Snack Food Association
Comment:
Commenter [[2309]] states that the RFS would pose severe economic and environmental harm
by significantly increasing the cost of food and feed, potentially damaging more than 400
millions of engines and injuring their operators, contributing to poor air and water quality in
many communities, and by driving millions of people around globe into poverty. [[#2309.1.p. 1]]
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RFS2 Summary and Analysis of Comments
Our Response:
The commenter [2309] raises a number of issues associated with the RFS2 rule. The first
issue the commenter raises is about the impacts of the RFS2 on the cost of agricultural
commodities. Our analysis shows that the increase in renewable fuel volumes required by the
RFS2 rule will raise food prices modestly, as described in more detail in our response in Section
10.2 to SoyMor Biodiesel, LLC (EPA-HQ-OAR-2005-0161-2010), Western Dubuque Biodiesel
LLC, (EPA-HQ-OAR-2005-0161-2011), and Central Iowa Energy, LLC (EPA-HQ-OAR-2005-
0161-2013).
The second concern that the commenter raises is about the potential of the RFS2 rule to
adversely impact vehicles and their operators. With regard to fuel utilization and motor vehicles,
all fuels and fuel additives are required to be registered with the Agency and ultimately approved
for use prior to being put into the commercial fuel market. Therefore, the use of these fuels
should not pose a risk to the equipment and operators if used in appropriate applications. The
RFS2 program defines which fuels and fuel additives are renewable with respect to the program
itself, however it does not approve fuels or fuel additives for use. That is done through other
Clean Air Act authorities and regulations where applicable.
The third concern the commenter raises is about the air and water quality impacts of the
RFS2 rule. The Agency conducted a detailed air quality analysis of the RFS2 rule. In that
analysis, we found that there are both air quality benefits (e.g., reductions in benzene and carbon
monoxide) and disbenefits (e.g., ozone) associated with the wider use of renewable fuels. These
impacts will vary based the type of fuel utilized and the geographic location of its use. See
Chapter Three of the RIA for more information on the air quality impacts of the RFS2 rule. EPA
agrees that water quantity is an important consideration in the development of renewable fuels,
especially in some local or regional areas with limited water supplies. See Chapter Six of the
Regulatory Impact Analysis for more information on the water quality and quantity impacts of
the RFS2 rule. EPA will further evaluate water quantity and quantity impacts in the report to
Congress required under Section 204 of EISA due December 2010. The last issue that the
commenter raises is the issue of the impact of the RFS2 rule on global poverty. Estimating the
effects of the RFS2 rule on global poverty is beyond the scope of this rulemaking.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2396
Organization: CVR Energy
Comment:
The commenter (2396.1) is concerned the mandate for yet-to-be developed and/or adequately
tested transportation fuels will have an adverse economic impact not only on the general
petroleum refining industry, and the SBR in particular, but also on our nation's entire
transportation system. (2396.1, p.2)
Our Response:
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Chapter 10: Economic Impacts and Benefits of the Rule
In the Energy Independence and Security Act (EISA), Congress expanded upon the
renewable fuels mandate of RFS1 to further reduce our reliance on imported petroleum.
Although renewable fuel use has increased beyond that required in RFS1 (most likely due to
higher average crude oil prices), the RFS2 program is expected to further expand the use (or
ensure the expansion) of renewable fuels.
The principal renewable fuels expected to be used are ethanol, biodiesel and renewable
and cellulosic diesel fuel. Although the commenter questions whether these renewable fuels
have been adequately tested, ethanol has been tested extensively in motor vehicles and has been
adapted into the gasoline pool for many years. While the volume of biodiesel blended into diesel
fuel is small, there has been extensive vehicle and fuel testing of biodiesel fuel. Renewable and
cellulosic diesel fuel are the newest of the principal renewable fuels which we expect to be used,
however, they are also the most like petroleum-based diesel fuel so their blending with
petroleum-based diesel fuel should be straightforward. The petroleum industry has demonstrated
that it is up to the challenge of adapting to and using these new fuels. However, if a particular
refiner does not wish to attempt to use a particular renewable fuel, or any renewable fuel, it has
the option to allow other refiners to blend its required share of renewable fuels into the gasoline
and diesel fuel pool, and purchase the RINs generated by those refiners.
There are many impacts of this program. For example, cellulosic biofuels will require the
development of a whole new infrastructure for the planting and harvesting of cellulosic
feedstocks, as well as the construction of biofuel plants that will convert the cellulosic feedstocks
into viable biofuels. Then the cellulosic biofuels will have to be transported from the plants that
produce them to the terminal where they will usually be blended into the gasoline and diesel fuel
pools, requiring new fuel distribution hardware. In some cases, the retail sector may need to
modify its fuel dispensing hardware to enable selling the new renewable fuels. All these steps
will require extensive capital investments and incur other costs associated with these various
steps. The RIA contains our assessment of these many impacts and their related costs. Despite
these new capital costs and other costs, because the price of crude oil is expected to increase
significantly, the net impact of the RFS2 program is expected to be a cost savings to consumers.
Even if the price of crude oil does not increase to the point as projected by DOE and the RFS2
program increases costs, the RFS2 program will reduce our dependence on foreign oil which was
a primary reason why Congress included the RFS2 provisions in EISA.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2508
Organization: Environmental Working Group (EWG)
Comment:
The commenter (2508) recommends that EPA cast a sufficiently broad net in its criteria for
determining harm to the economy or the environment. The Administrator should look at the
following economic factors: impact on commodity/feed prices; consequent impact on food
prices; impact on exports of agricultural commodities and global food supply. The
Administrator should also look at the following environmental factors: impact on soil quality;
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RFS2 Summary and Analysis of Comments
impact on water quantity and quality; impact on aquatic and terrestrial fish and wildlife habitat
and biodiversity. (2508, p.4)
Our Response:
We have carried out an extensive set of analyses to quantify the impacts of the increased
renewable fuel volumes projected to be used to comply with the RFS2 standards, including many
of the economic and environmental impacts highlighted by the commenter. Specifically, the
Agency has conducted an economy-wide analysis to determine the impact of this rule on the U.S.
economy and has examined subsectors of the economy, including the agricultural sector, to
determine the impacts on commodity/feed prices and the resulting impact on food prices and
annual costs to American families. For additional details, see the January 11, 2010
Memorandum to Docket Re: Economy-Wide Impacts of the Renewable Fuels Standard. Further,
the Agency examined air and water quality impacts, quantifying impacts to the extent possible
with the models and tools available to the Agency. Where it was not possible to quantify
impacts, the Agency qualitatively described those impacts and invites the public to provide tools
and methods to quantify those impacts that could only be qualitatively described. These analyses
are described in detail in the Regulatory Impact Analysis for the final rule. Additional analyses
will continue to be carried out by the Agency over time in response to section 204 of EISA
entitled "Environmental and Resource Conservation Impacts," and section 209 of EISA entitled
"Anti-backsliding."
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Renewable Fuel Standard Program
(RFS2) Summary and Analysis of
Comments
Chapter 11
Impacts on Water
Assessment and Standards Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
v>EPA
United States EPA-420-R-10-003
Environmental Protection r , „„.„
Agency February 2010
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11 IMPACTS ON WATER
11.1 Ecological Impacts 11-1
11.2 Additional Water Issues 11-3
11.2.1 Ethanol Production 11-4
11.2.2 Ethanol Leaks and Spills 11-4
11.3 Water Quantity 11-4
11.4 Request for Comment on Options for Reducing Water Quality Impacts 11-5
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RFS2 Summary and Analysis of Comments
11 IMPACTS ON WATER
What We Proposed:
The comments in this section correspond to Section X of the preamble to the proposed
rule and address impacts on water. A summary of the comments received and our response to
those comments are located below (as well as Section IX of the preamble to the final rule).
11.1 Ecological Impacts
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0982
Organization: Holliday Environmental Services, Inc.
Comment:
The commenter noted that water is as precious as fuel and if we run out, water will be more
precious. The country cannot afford more ethanol! (0986.1, p.l)
Our Response:
EPA agrees that water quantity is an important consideration in the development of
biofuels, especially in some local or regional areas with limited water supplies. EPA will further
evaluate water quantity impacts in the report to Congress required under Section 204 of EISA
due December 2010.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2466
Organization: Northeast States for Coordinated Air Use Management (NESCAUM)
Comment:
The commenter (2466) urges EPA to pursue vigorous assessment on impact on water quality as a
result of increase in corn production for ethanol. The commenter points out that the agency
states in its Regulatory Impact Analysis that it anticipates that increased corn production for
ethanol will increase the occurrence of nitrate, nitrite, and atrazine in sources of drinking water.
It may exacerbate existing serious water quality problems in the Gulf of Mexico and may
potentially cause adverse human health effects due to increase in pesticides usage. (2466.1.pdf,
P7)
Our Response:
For this rulemaking, EPA quantitatively and qualitatively analyzed certain water quality
impacts of the increase in corn production for ethanol. The quantitative analysis of the Upper
Mississippi River Basin estimated that this rulemaking will lead to an increase in nitrogen loads
to the Mississippi River from the Upper Mississippi River Basin by 1.2% in 2022 compared to
11-1
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Chapter 11: Impacts on Water
the AEO 2007 ethanol volumes. Phosphorus loading is estimated to increase 0.7%. In addition,
Section 204 of EISA requires EPA, in consultation with USDA and DOE, to produce a report to
Congress every three years on the impacts to date and likely future impacts of the RFS on : (1)
environmental issues (air quality, effects on hypoxia, pesticides, sediment, nutrient and pathogen
levels in waters, acreage and function of waters, and soil environmental quality); (2) resource
conservation issues (soil conservation, water availability, and ecosystem health and biodiversity
including impacts on forests, grasslands and wetlands), and (3) the growth and use of cultivated
invasive or noxious plants and their impacts on the environment and agriculture. The first report
is due December 2010.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2363
Organization: Ag Processing Inc.
Comment:
The commenter (2363) urges EPA to refigure the water quality impacts resulting from greater
erosion and water quality reduction when crop residues are removed. [[Docket number 2363.1, p.
7]] [[See docket number 2363.1, pp. 4-5 for further discussion of this issue.]]
Our Response:
The preamble (Section IX) and RIA (Section 6) includes a qualitative discussion of the
value of crop residues for both soil and water quality and the potential negative environmental
impacts when residues are removed. We were unable to conduct a quantitative analysis at this
time. However, as stated in the RIA, different conservation systems and conservation practice
standards will need to be developed and adopted for cellulosic feedstocks, such as corn stover,
switchgrass, and trees for biofuels production. USDA will need to continue to adjust current
standards and develop additional standards, where needed, to permit cellulosic feedstocks to be
produced and utilized in a sustainable manner.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2111
Organization: Arcadia Biosciences, Inc.
Comment:
Commenter [[2011]] states that the impact of future biofuel production on water quality can be
most cost effectively addressed with the development and employment of Nitrogen Use
Efficiency (NUE) technology. Increased corn demand as a result of biofuels incentives and
policies could potentially harm water quality, depending on other factors that impact production
and yields. Widespread deployment of NUE would decrease demand and use of nitrogen
fertilizer and logically decrease nitrogen use for corn production and improve water quality.
[[See #2011.1 p.2]] In addition the commenter states that drought-tolerant technology will
improve farming efficiencies and reduce the demand for water
11-2
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RFS2 Summary and Analysis of Comments
Our Response:
EPA analysis shows that the increase in corn demand as a result of this rulemaking will
increase nitrogen loadings to water with current agricultural genotypes. A variety of
conservation practices are needed to minimize nitrogen runoff and leaching from corn fields.
EPA will have an opportunity to consider improvements in crop performance in its periodic
reports under EISA 204 on the environmental impacts of the RFS
What Commenters Said:
Document No: EPA-HQ-OAR-2005-0161-2526
Organization: Coskata
Comment: EPA should take a lifecycle view of water impacts
EPA appropriately recognizes the non-agricultural sources of water quality and quantity impacts
from ethanol production. In completing its Regulatory Impact Analysis, EPA should however
consider the water impacts of the fossil fuels these biofuels are displacing, as well as consider a
more complete landscape of water management practices in the ethanol industry.
The biofuels industry is also making great strides in reducing its water needs. As EPA points
out, new corn ethanol plants use about half as much water than older designs thanks to increased
recycling and process heat management. Cellulosic ethanol furthermore is expected to have
water requirements that are substantially less than corn ethanol on a "lifecycle" basis (including
water needed for feedstock and fuel production). A recent study by Argonne National Lab found
that switchgrass-based cellulosic ethanol could have water use requirements in line with, or even
lower, than all major sources of gasoline in the U.S. Coskata is furthermore specifically
designing its process for minimum water utilization through innovative process heat integration
and advanced recycling, and expects to have one of the lowest water requirements in the
emerging advanced biofuel industry. Finally, crop genetics companies are developing advanced
varieties of corn and biomass crops, such as drought tolerant corn and energy crops that don't
require irrigation, which will further lessen the water impacts of the industry.
Our Response:
EPA did not conduct a lifecycle analysis of the water quality and quantity impacts of this
rulemaking, nor was it required under EISA. However, Section 204 of EISA requires EPA, in
consultation with USDA and DOE, to produce a report to Congress every three years on the
impacts to date and likely future impacts of the RFS including: environmental issues (air quality,
effects on hypoxia, pesticides, sediment, nutrient and pathogen levels in waters, acreage and
function of waters, and soil quality; resource conservation issues (soil conservation, water
availability, and ecosystem health and biodiversity), and the growth and use of cultivated
invasive or noxious plants and their impacts on the environment and agriculture. The first report
is due December 2010. EPA will consider this comment in the context of that undertaking.
11.2 Additional Water Issues
11-3
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Chapter 11: Impacts on Water
11.2.1 Ethanol Production
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2526
Organization: Coskata
Comment:
The commenter (2526) believes that EPA should take a more complete view of water impacts
and not seek to regulate corn fertilizer use by regulating biofuel manufacturers. [[Docket number
2526.1, p. 2]] [[See docket number 2526.1, pp. 11-12 for further discussion of this issue.]]
Our Response:
EPA agrees with the concerns expressed by the commenter and is not regulating fertilizer
use on corn production through this rulemaking. EPA and USDA are working together to help
agricultural producers implement practices to minimize water pollution from corn production.
11.2.2 Ethanol Leaks and Spills
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP)
Comment:
The commenter suggests a full exam of the water and air pollution risks associated with spills
and releases from using existing fuel dispensing facility infrastructure [[Docket number 2384.1,
p.l 10]]
Our Response:
More detail on ethanol biodegradation and a summary of laboratory and field studies of
ethanol spills will be forthcoming in the EPAct 2005 Report to Congress on Fuel Additive
Replacements for MTBE in 2010. In addition, EPA is undertaking analyses designed to assess
the potential impacts of ethanol blends on tank infrastructure and leak detection systems and
determine the resulting water quality impacts.
11.3 Water Quantity
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2249
Organization: National Biodiesel Board (NBB)
Comment:
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RFS2 Summary and Analysis of Comments
The commenter (2249.2) believes that EPA need not, and should not, address Section 211 (c) in
the context of this rulemaking. EPA's authority under Section 211 (c) is not intended to address
any potential impact that might arise as a result of the RFS program, but is limited. 42 U.S.C.
75458. The commenter notes that EPA does not have the authority to regulate agricultural
practices, and believes that attempts to regulate agricultural practices by imposing additional
requirement on the feedstock that can be used by renewable fuel producers is beyond the
authority provided in Section 211(c). [[Docket number 2249.2, pp. 109-110]]
Nonetheless, the commenter notes that soybean farming and biodiesel production provide water
quality benefits. For example, soybean is often used as part of a crop rotation program, which
promotes sustainability, including reducing impacts of agricultural production on water.
Soybeans require an insignificant amount of fertilizer, pesticide, and irrigation inputs, and
therefore represent significantly less potential water quality and quantity impacts. In addition,
biodiesel production also involves little water per gallon. [[Docket number 2249.2, p. 110]]
Our Response:
The final rule does not include any controls related to agricultural practices under
authority of CAA Section 211 (c). EPA and USDA are working together to help agricultural
producers implement practices to minimize water pollution from corn production. EPA
understands that soybeans use fewer inputs than corn. However soybeans also have less residue
than corn which can result in greater sediment losses from fields as a result.
11.4 Request for Comment on Options for Reducing Water Quality Impacts
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that this is not the appropriate forum for EPA to seek comment
on regulation of renewable fuel to address water quality. EPA's authority under Section 211 (c) is
limited and is intended to addresses the fuel itself or emissions, not any potential impact that
might arise as a result of the RFS program. In particular, EPA does not have the authority to
regulate agricultural practices, and there is no indication Congress intended EPA to regulate
agricultural practices by imposing additional requirement on the feedstock that can be used by
renewable fuel producers through Section 211 (c). The commenter believes that this is a blatant
example of EPA seeking to overstep its authority to regulate the agricultural industry. (2329.1, p.
Ill)
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
11-5
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Chapter 11: Impacts on Water
Comment:
The commenters (2129.1) believe that EPA should exercise its authority under Section 211 (c) to
protect against water pollution that threatens public health or welfare. The commenters do not
see a rationale for singling out corn ethanol however, but support applying such authority to all
biofuels produced under the RFS2. EPA could use this authority in combination with restrictions
on the volume of environmentally damaging biofuels that are produced under the RFS2, pursuant
to either its waiver authority under Section 211 (o) of the Clean Air Act or its control or prohibit
authority under Section 211(c) of the CAA. (2129.1, p. 13)
The commenters support EPA's suggestion to impose restrictions on farming practices used in
the production of biofuels that cause, or contribute to water pollution (including any degradation
in the quality of groundwater) that may reasonably be anticipated to endanger the public health
or welfare. The commenters suggest that EPA impose eligibility requirements on feedstock
production for fuel that ensure the following conditions are met:
-No current violations of the Clean Water Act or Swampbuster have been identified on the land;
-The land used to grow crops is not eroding in excess of tolerable levels—soil is eroding faster
than new soil is naturally produced; and
-A soil and water conservation plan is in place and being implemented for the land, or
alternatively, a certain score could be required on the USDA's Soil and Water Evaluation tool or
EPA could adapt this tool for this specific purpose. (2129.1, pp.13-14)
Document No.: EPA-HQ-OAR-2005-0161-2374
Organization: Amyris Biotechnologies, Inc. (Amyris)
Comment:
Regarding EPA's request for comment on how and if to include water issues related to biofuels
production, the commenter (2374) supports clear definitions of sustainability that allow
companies to verifiably produce better biofuels. If in completing its Regulatory Impact
Analysis, EPA should consider the water impacts of biofuels, the commenter believes that
biofuel water use should be weighed against the water use in fossil fuel just as EPA is doing for
GHG emissions. The mandate to use biofuels should always be measured against the petroleum
alternative being displaced. [[Docket number 2374.1, p. 3]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) states that the potential water quality impacts of biofuels are important
and EPA should look at them carefully. EPA will likely need the results of the study required by
section 204 of EISA before it can make a finding that a fuel, or its emission product, "causes or
contributes" to air pollution or water pollution that may reasonably be anticipated to endanger
the public health or welfare. The commenter recommends that EPA OAR consult with the
Office of Water, Office of Underground Storage Tanks, and Office of Research and
Development, as they prepare the section 204 report. The commenter also recommends that
EPA review the recommendations made by the Agency's MTBE Blue Ribbon Panel 1999
recommendations included conducting a full, multi-media assessment of effects on air, soil, and
water of any major new additive to gasoline prior to its introduction. [[Docket number 2393.1, p.
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RFS2 Summary and Analysis of Comments
66]] [[See docket number 2393.1, pp 65-69 and docket number 2393.6, Attachment 5 for a
detailed discussion of water quality assessment.]]
Document No.: EPA-HQ-OAR-2005-0161-2497
Organization: Wisconsin Department of Natural Resources
Comment:
The commenter (2497.1) believes that impacts to water quality and quantity from expanded
biofuel production need to be carefully considered. Putting additional land into crop production
increases the risks of surface water and groundwater contamination from agricultural chemicals
and additional aquifer depletion. The commenter believes that the future diversification of
biofuel stocks, such as cellulosic-based ethanol production, can not only minimize impacts to
land and water, but can create enhanced environmental benefits from agriculture and forestry
practices. The commenter recommends that EPA financially support research to minimize
groundwater and surface water impacts from increased biofuel production. Specifically, the
research should be focused in the Midwest region. (2497.1, p.2)
Our Response:
The final rule does not include any controls related to agricultural practices under
authority of CAA Section 211 (c). However, EPA may consider using this authority in the future.
EPA and USDA are working together to help agricultural producers implement practices to
protect water quality through voluntary conservation programs.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2111
Organization: Arcadia Biosciences, Inc.
Comment:
Commenter [[2011]] states that imposing additional feedstock certification that requires
manufacturers to certify that they used specific cultivation practices for corn would be expensive
and impractical. Tracking the practices under which a feedstock was grown and maintaining that
throughout the supply chain would require a costly revamping of the grain delivery process.
Certification requirements would increase production costs and be a disincentive to sustainable
biofuel production.
Our Response:
The final rule does not include the type of certification procedures the commenter finds
objectionable.
11-7
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Renewable Fuel Standard Program
(RFS2) Summary and Analysis of
Comments
Chapter 12
Administrative Requirements and
Legal Authority
Assessment and Standards Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
v>EPA
United States EPA-420-R-10-003
Environmental Protection r , „„.„
Agency February 2010
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12. ADMINISTRATIVE REQUIREMENTS AND LEGAL AUTHORITY
12.1 Paperwork Reduction Act/Information Collection Requests (ICR) 12-1
12.2 Regulatory Flexibility Act/SBREFA 12-1
12.3 Other Executive Orders 12-4
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RFS2 Summary and Analysis of Comments
12. ADMINISTRATIVE REQUIREMENTS AND LEGAL AUTHORITY
What We Proposed:
The comments in this section correspond to Section XII of the preamble to the proposed
rule and address compliance burden and program impacts. A summary of the comments
received and our responses to those comments are located below (and in Section XI of the
preamble to the final rule).
12.1 Paperwork Reduction Act/Information Collection Requests (ICR)
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1.
Comment:
The commenter (2157) is concerned with additional registration, certification, and reporting
requirements that EPA is proposing. The commenter finds these are impractical, burdensome
and unnecessary. Generally the current RFS RIN program has been working, and EPA should
not add undue burdens that may be cost prohibitive and, in fact, may result in having the
opposite of the intended effect. Specifically, EPA should presume the existing agricultural lands
are met, and not require certification and, at most, should utilize an approach similar to the
baseline production approach identified in the Proposed Rule (taking into account increased
yields). Additionally, price information, on-site engineering reviews, and production outlook
reports are unnecessary and burdensome, may require release of confidential business
information, and should not be required. (2157 p. iv-v and 21-23).
Our Response:
Please see Chapter 4 of this Summary and Analysis of Comments document for
responses related to compliance burdens. We note that a final Supporting Statement with
detailed cost estimates has been prepared for the final rule and has been submitted to the Office
of Management and Budget (OMB) for approval under EPA ICR Number 2333.02. A copy of
the Supporting Statement has been placed in the docket for the final rule. The Supporting
Statement contains detailed estimates of the costs associated with recordkeeping and reporting by
party and by recordkeeping and reporting activity. Interested parties are urged to review the
Supporting Statement.
12.2 Regulatory Flexibility Act/SBREFA
12-1
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Chapter 12: Administrative Requirements and Legal Authority
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2118
Organization: CountryMark Cooperative, LLP
Comment:
The commenter (2118.1) believes that EPA has the legal authority to adopt the recommendations
of the SBREFA panel conceding the impact of RFS2 proposed regulation on SBRs. RFS2 will
have a substantial financial impact and create operating problems for SBRs. The SBREFA
process was properly conducted and resulted in the determination that SBRs would be impacted
by the proposed regulations and EPA should grant appropriate relief to SBRs as a result of the
recommendations of the SBREFA panel. (2118.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2135
Organization: Ad Hoc Coalition of Small Business Refiners (SBR)
Comment:
Under Section 604 of SBREFA, EPA is required to perform a thorough analysis of the
implications of the RFS2 proposal on small entities and potential alternatives to minimize
significant economic impacts on such entities. The commenter (2135) notes that to date, EPA has
not offered factual, policy, and legal reasons necessary to satisfy the SBREFA mandates.
[[Docket number 2135.1, p. 15]]
The commenter states that EPA's disregard of flexibility considerations cannot be sustained
under SBREFA. In view of the conclusory nature of EPA's legal reasoning described above, the
commenter submits that EPA's regulatory flexibility analysis, as well as the proposals and non-
proposals it purports to support, cannot pass muster under Section 604 of SBREFA. Moreover,
because EPA has valid legal authority to permit the Panel recommendations, EPA's conclusion
to the contrary is a clear error in judgment, not in accordance with law, and therefore, arbitrary
and capricious. [[Docket number 2135.1, pp. 19-20]]
The commenter further states that EPA's bases for disregarding the relief being sought by the
SBR Coalition is inimical to the safeguards that the RFA and SBREFA were set in place to
address and, therefore, are not in the public interest. In this regard, it should be noted that Section
611 (a) (4) (2) requires that a Court remand a rule to the agency for non-compliance with SBREFA
unless the Court determines that the enforcement of the rule is in the public interest. As set forth
above, unless EPA satisfies its obligations to conduct a meaningful evaluation of the impact on
small businesses and considers reasonable alternatives, then the outcome of the rulemaking is
clearly at odds with the public interest. Indeed, the "harm" that EPA hypothesizes relative to the
commenter's proposals is precisely the type of relief that the RFA and SBREFA were enacted to
provide. EPA must demonstrate a greater showing of harm to the public interest in order to
disregard the proposals of the SBR Coalition. [[Docket number 2135.1, p. 20]]
Document No.: EPA-HQ-OAR-2005-0161-2105
Organization: Small Business Administration, Office of Advocacy
Comment:
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RFS2 Summary and Analysis of Comments
The commenter (2105.1) noted that small entity fuel refiners have expressed concern over the
general impracticability of the rapid implementation schedule of the RFS2 program. Many
commercially unavailable and untested fuels are required to be blended into petroleum fuel
stocks in the near future, and small refiners are concerned that they will be disadvantaged in the
marketplace by the uncertainty caused by this situation. (2015.1, p.2)
Our Response:
As discussed in detail Section III.E of the preamble to the final rule and Chapter 7 of the
Final RIA, Congress spoke directly to the relief that EPA may provide for small refineries,
including those small refineries operated by small refiners, and limited that relief to a blanket
exemption through December 31, 2010, with additional extensions if the criteria specified by
Congress are met. EPA believes that an additional or different extension, relying on a more
general provision in section 211 (o) (3) would be inconsistent with Congressional intent. Further,
we do not believe that the statute allows us the discretion to give relief to small refiners only—as
this would result in a subset of small refineries (those that also qualify as small refiners)
receiving relief that is greater than the relief already given to all small refineries under EISA.
The criterion specified by the statute for providing a further compliance extension to small
refineries is a demonstration of "disproportionate economic hardship." The statute provides that
such hardship can be identified through the DOE study, or in individual petitions submitted to
the Agency. However, the DOE study has concluded that no disproportionate economic
hardship exists, at least under current conditions and for the foreseeable future under RFS2.
Therefore, absent further information that may be provided through the petition process, there
does not currently appear to be a basis under the statute for granting further compliance
extensions to small refineries. If DOE revises its study1 and comes to a different conclusion,
EPA can revisit exemption extension at that time in accordance with section 211 (o) (9) (A) (ii).
We note that we are finalizing a petition process for small refiners, based upon
disproportionate economic hardship, which is similar to the provision for case-by-case
extensions for small refineries. We believe that these avenues of relief can and should be fully
explored by small refiners who are covered by the small refinery provision, as well as those not
covered by the small refinery provision. In evaluating applications for this hardship provision
EPA will take into consideration information gathered from annual reports and RIN system
progress updates, as recommended by the SBAR Panel, as well as information provided by the
petitioner and through consultation with DOE.
In response to the comment stating that the rapid RFS2 implementation schedule will
harm small refiners, EPA notes that small entities qualifying as small refiners and small
refineries are temporarily exempt from renewable fuel standard obligations through 2010.
Therefore they will have most of this calendar year to prepare for compliance. Furthermore, a
compliance demonstration for 2011 will not be required until February of 2012, providing
1 In Senate Report 111-45, the Senate Appropriations Committee "directed [DOE] to reopen and reassess the Small
Refineries Exemption Study by June 30, 2010," noting a number of factors that the Committee intended that DOE
consider in the revised study. The Final Conference Report 111-278 to the Energy & Water Development
Appropriations Act (H.R. 3183), referenced the language in the Senate Report, noting that the conferees "support the
study requested by the Senate on RFS and expect the Department to undertake the requested economic review."
12-1
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Chapter 12: Administrative Requirements and Legal Authority
additional flexibility and lead time for compliance. Finally, compliance does not require actual
blending of renewable fuel, but can be achieved merely through the purchase of RINs.
Therefore, EPA does not foresee that small refineries or small refiners will have difficulty
complying with their obligations under RFS2 as a result of the RFS2 implementation schedule.
12.3 Other Executive Orders
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) supports voluntary consensus standards. EPA should follow the
guidance from OMB, let the marketplace work, and not step in to regulate when there is a
voluntary standard. (2124.1, p.22)
Document No.: EPA-HQ-OAR-2005-0161-2105
Organization: Small Business Administration, Office of Advocacy
Comment:
The commenter (2105.1) noted that small refiners are concerned that RFS2 mandates, under the
auspices of the EISA, could, in fact, threaten regional energy security and independence within
the U.S. Many small refiners serve isolated regions of the U.S. without many substitute fuel
suppliers, or serve as primary suppliers to military bases or installations. If the requirements of
the RFS2 program interfere with the ability of these refiners to meet the demands of their
isolated and unique customers, it could have the unintended consequence of disrupting U.S.
energy markets rather than making them more independent and secure. The commenter believes
that EPA should consider the energy independence and security impact of this rule on
geographically isolated regions of the country and military bases and installations, and find
flexibility options to alleviate these potential problems before they happen. (2105.1, p.7)
Document No.: EPA-HQ-OAR-2005-0161-2105
Organization: Small Business Administration, Office of Advocacy
Comment:
The commenter (2105.1) noted that there are issues with the availability of "exotic" renewable
fuels, those made using methods that are not yet commercially viable. This additional GHG
reduction requirement adds significant cost and uncertainty to a rule that is already costly and
filled with uncertainty for small entities. (2105.1, p.6)
The commenter noted that given that the production, price, and availability of RINs are very
uncertain, further narrowing the types of renewable fuels acceptable for compliance will further
decrease the availability of RINs. RFS2 was designed with a focus on the importance of energy
independence and security rather than greenhouse gas emissions reductions. Areas within the
United States that currently grow soybeans and produce soybean-based diesel will be drastically
affected by the elimination of this fuel from certification for blending. The commenter believes
that EPA should consider waivers to assist these regions in compliance. (2105.1, p.6)
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RFS2 Summary and Analysis of Comments
The commenter also believes that the approval and selection of renewable fuel technologies will
create limitations on innovation. These limitations would put restraints on potentially beneficial
and cost-effective improvements. (2105.1, p.6)
Our Response:
We appreciate the commenters' remarks and concerns regarding the various executive
orders including the National Technology Transfer and Advancement Act (voluntary consensus
standards) and the Regulatory Flexibility Act (RFA), as amended by the Small Business
Regulatory Enforcement Fairness Act (SBREFA).
We note that we are incorporating by reference the most recent version of the voluntary
consensus standard ASTM D-6751-08, which the RFS1 rule already contains at 40 CFR Part 80
Subpart K, and are adding several more voluntary consensus standards (ASTM D-l250-08,
"Standard Guide for Use of the Petroleum Measurement Tables"; ASTM D-4442, "Standard Test
Methods for Direct Moisture Content Measurement of Wood and Wood-Base Materials"; ASTM
D-4444, "Standard Test Method for Laboratory Standardization and Calibration of Hand-Held
Moisture Meters"; ASTM D-6866-08 "Standard Test Methods for Determining the Biobased
Content of Solid, Liquid, and Gaseous Samples Using Radiocarbon Analysis"; ASTM E-711,
"Standard Test Method for Gross Calorific Value of Refuse-Derived Fuel by the Bomb
Calorimeter"; and ASTM E-870, "Standard Test Methods for Analysis of Wood Fuels".)
Information about these standards may be obtained through the ASTM website (www.astm.org)
or by contacting ASTM at (610) 832-9585.
While the RFS2 standards as written by Congress will have impacts on all refiners, we do
not believe that the RFS2 renewable fuels requirement will cause a large impact on small refiners
as expected by the commenter. As discussed in Section 7 of the RIA, we estimate that the costs
to small refiners will in all cases be less than 1 percent. In addition, as crude oil prices rise and
renewable fuels prices fall, these costs will be further minimized.
Since the program is a nationwide average program with credits (RINs) being traded
nationwide to demonstrate compliance, the economic impacts to small refiners should be similar
to the impacts nationwide. Furthermore, since the obligation is a function of gasoline and diesel
fuel production, the economic impacts on an annual average basis for small refiners are reduced
in proportion to their production volume. Finally, EPA does not believe that compliance by
small refiners providing fuel to military bases or other small markets will be more onerous than
compliance for other small entities or refiners at large. Compliance can be achieved through the
purchase of RINs on the marketplace, and there is no need to alter fuel production or delivery
practices.
Additionally, the final rule makes a distinction between fuel produced from current crops
and technology and that produced from emerging alternative feedstocks and technologies. EPA
has provided a petition process whereby biofuel producers can request EPA to evaluate specific
technologies or operating processes that distinguish their biofuel production LCA GHG impacts
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Chapter 12: Administrative Requirements and Legal Authority
from those already considered by EPA. These new technologies or operating processes can then
receive an alternative GHG threshold assessment, if appropriate.
One commenter expressed a concern about the qualification of soy-based biodiesel under
EISA, and the impact that constraints on that product would have on RIN availability and price.
EPA's proposed lifecycle analysis of soy-based biodiesel suggested that it would not meet the
required 50% reduction in GHG emissions as compared to baseline fuel for qualification as
biomass-based diesel. However, EPA's revised lifecycle assessment for the final rule indicates
that it does qualify, so EPA believes that this change has addressed the commenter's concerns.
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Renewable Fuel Standard Program
(RFS2) Summary and Analysis of
Comments
Chapter 13
Other
Assessment and Standards Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
v>EPA
United States EPA-420-R-10-003
Environmental Protection r , „„.„
Agency February 2010
-------
13 OTHER
13.1 Public Participation Process (Public Hearing and Comment Process) 13-1
13.2 Carbon Capture and Sequestration (CCS) 13-3
13.3 Biodiesel Temperature Standardization 13-6
13.4 Comments Outside Scope of the Proposal 13-10
13.4.1 Fuel Quality 13-10
13.4.2 Low Carbon Fuel Standard & Cap and Trade 13-14
13.4.3 E15 Waiver 13-15
13.4.4 General Waiver Authority 13-27
13.4.5 EPA Requirements for E85 Blenders and Compositional Gasoline
Blendstocks Used to Manufacture E85 13-29
13.4.6 Other Comments Outside Scope of the Rule 13-31
13.5 Other 13-31
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RFS2 Summary and Analysis of Comments
13 OTHER
What We Proposed:
The comments in this section do not necessarily correspond to specific section of the
preamble to the proposed rule, but rather are comments that span various areas and issues. A
summary of the comments received and our responses to those comments are located below.
13.1 Public Participation Process (Public Hearing and Comment Process)
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that EPA has not provided sufficient opportunity to comment
as required by the Clean Air Act. Significant portions of EPA's lifecycle analysis that was
included in the Proposed Rule lack sufficient transparency required for scientific analysis and
public review and comment. The commenter believes that prior to finalizing its lifecycle
analysis, EPA must give the public an opportunity to review and comment on revisions,
including the numerous elements that EPA acknowledges were not completed prior to proposal,
to the analysis. (2329.1, p.20).
The commenter also believes that while EPA has provided some information on its lifecycle
analysis, the information regarding its analysis of land use changes is insufficient to make its
analysis transparent and cannot be reproduced, undermining the public's ability to comment and
placing into question the scientific validity of its analysis. (2329.1, p.22)
Document No.: EPA-HQ-OAR-2005-0161-2204
Organization: Sierra Research, Inc.
Comment:
Commenters [[2204]] review has been limited due to the failure of U.S. EPA fully to document
and explain in the DRIA its direct lifecycle emissions analysis (LCA) for Brazilian sugarcane
ethanol. Based on my experience related to regulatory development while employed by the
California Air Resources Board, it is not acceptable to attempt to finalize a regulation without
providing an opportunity for public review of and comment on a reasonably complete set of data
and assumptions used in preparing an emissions analysis. [[2204 p.2-3]]
Document No.: EPA-HQ-OAR-2005-0161-2339
Organization: Illinois Com Growers Association
Comment:
Commenter [[2339]] states that EPA repeatedly states that it will develop additional data and
convene peer review work groups after the close of the public comment period to address holes
in its analysis. But this does not solve the problem that the proposal that has been presented to
13-1
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Chapter 13: Other
the public is not documented by good science in the EPA record. Moreover, EPA's opaque post-
comment period peer review process cannot retroactively cure the failure to disclose the
scientific basis of the proposal to the public before finalizing the rule. This peer review should
have taken place before this rule was proposed. EPA's Peer Review Handbook states as much.
[[#2339 p.4]]
Document No.: EPA-HQ-OAR-2005-0161-2347
Organization: Illinois Farm Bureau
Comment:
Commenter [[2347]] states EPA's proposal is not transparent. The proposal does not allow the
public to effectively comment on the rule. [[#2347.1 p.2]]
Document No.: EPA-HQ-OAR-2005-0161-2471
Organization: Sutherland Asbill & Brennan LLP
Comment:
The commenter (2471.1) believes that before finalizing the rule, EPA must hold public hearings
on the entirety of the rule. The commenter noted that EPA did convene a broader hearing on the
proposal in June; however, that hearing occurred only a few weeks after the Proposed Rule was
published. Both EPA's and stakeholders' understanding of key issues since has evolved
considerably, and will continue to do so as EPA considers public comments on the rulemaking.
Transition issues and obstacles are likely to arise if the final rule is adopted without additional
EPA-stakeholder interaction in the form of a second multi-topic hearing. The best way to
effectuate the goals of EPAct and EISA is to implement an RFS2 program that has been
thoroughly examined and crafted to address valid concerns, incorporate sensible flexibilities and
correct inconsistencies or misperceptions before being finalized. (2471.1, p.3)
Our Response:
EPA held a public hearing on the proposed rule on June 9, 2009. At the hearing, any
interested party was invited to provide public comment, and a great many did so. In addition,
we initially provided a 60-day public comment period for interested parties unable to attend the
hearing to submit written comments, and for those who attended the hearing to submit
supplementary or revised comments. At the request of a number of individuals, we later
extended the comment period an additional 60 days to provide the public and the regulated
community additional time to review and provide comments on the proposed rulemaking. We
received some comments after the close of the comment period, and to the extent possible, we
have considered and responded to these late comments as well. Finally, it is important to note
that EPA was directed by Congress to issue the final RFS2 rule by December 19, 2008.
Although EPA missed this deadline due to the complexities inherent in the rulemaking and the
time needed to evaluate the many comments received, EPA was mindful that it had an obligation
to proceed expeditiously to issuing a final rule, and therefore had to weigh the benefits of further
extensions of comment opportunities with the statutory imperative to issue a final rule as
promptly after the statutory deadline as possible. In sum, EPA believes that the public was
provided ample opportunity for public comment, especially in light of the tight deadlines
imposed by the statute for issuing a final rule.
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RFS2 Summary and Analysis of Comments
A significant development that occurred during the public comment period was the
release of the report of the peer review that EPA sought with respect to its proposed lifecycle
analyses. We promptly added the report to the public docket, and the extension of the comment
period allowed the public the ability to consider the peer reviewers comments in evaluating
EPA's proposal and preparing their own written comments on the rule.
With regard to holding an additional hearing, we do not agree with the commenter's
assessment. The proposed rule was signed by the EPA Administrator on May 5, 2009 and the
signature version was made available on EPA's website the same day. The hearing date of June
9, 2009 was chosen due to the time constraints for completing the final rule. We do understand
the commenters' point that our understanding and our stakeholders' understanding of key issues
evolve as we consider public comments on the rulemaking, and for this reason, but we note that
commenters had ample opportunity after the public hearing to submit written comments, as
discussed above.
13.2 Carbon Capture and Sequestration (CCS)
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that EPA's assumptions regarding carbon sequestration are
flawed. EPA should revise its 80-year assumption for the final rule. EPA should also be using
the same average age for carbon sequestration and for developing the emission factors for forest
conversion. (2329.1, p.60)
The commenter noted that ethanol facilities have taken great strides in addressing GHG
emissions, including carbon capture and sequestration projects, which are not reflected in EPA's
pathways. EPA should allow facilities to submit a facility specific analysis in order for the
facility to take advantage of the measures they are taking to reduce their overall carbon footprint.
(2329.1, p. 99)
Document No.: EPA-HQ-OAR-2005-0161-1033
Organization: Poet Ethanol Products
Comment:
The commenter (1033.1) submits to EPA for consideration the concept that by capturing and
making carbon dioxide available for commercial use, that Renewable Fuel Producers are
displacing carbon dioxide that has been sequestered in the earth and would otherwise remain
there were it not for its market value. Whether under an offshoot of the Carbon Capture and
Storage program or as simply as being evaluated as a separate fuel pathway, the commenter
believes this production process should be separately considered for its contribution to lowering
GHG emissions. (1033.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2097
13-3
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Chapter 13: Other
Organization: North American Carbon Capture and Storage Association (NACCSA)
Comment:
The commenter (2097) addresses the need for clear and cohesive regulation. For example, the
Proposed UIC Rules are focused on protecting underground sources of drinking water (USDW)
and cannot address, for example, issues related to use of CCS to satisfy existing or future
emissions reductions requirements under the SDWA rulemaking. While recognizing the
resulting necessity of some ad hoc rulemaking in the CCS context, NACCSA encourages the
Agency to work toward creation of a comprehensive framework for CCS, rather than a
patchwork of context-specific CCS provisions. (2097.1.pdf, p3)
The commenter (2097) suggests avoiding potential conflicts with the UIC program. EPA's
Proposed RFS Rules identify a number of program elements that will require treatment in order
for fuel producers to utilize CCS as a means to reduce life-cycle GHG emissions from fuels,
these are listed on page 3, page4 and page 5 of the document. (2097.1.pdf, p3-5)
The commenter (2097) suggests developing a comprehensive framework and avoiding a
regulatory patchwork. For example, rather than develop rules specific to the use of CCS in
reducing life-cycle GHG emissions for RFS purposes, EPA should work toward development of
a comprehensive regulatory framework for all aspects of a CCS project. (2097.1.pdf, p 5)
The commenter (2097) would welcome the opportunity to work with EPA in crafting an
appropriate framework for CCS. (2097.1.pdf, p 5)
Document No.: EPA-HQ-OAR-2005-0161-2146
Organization: DuPont Applied BioSciences
Comment:
The commenter (2146.1) recommends no provisions for generating RINs based on carbon
capture be allowed until approaches / means of C02 capture, transportation and storage have
been fully tested and regulated by the EPA. (2146.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2335
Organization: Edison Electric Institute
Comment:
The commenter (2335.1) believes that CCS technologies are a critical element in the full
portfolio of options needed to reduce GHG emissions and combat climate change, and that the
promise of CCS is not limited to its use in connection with coal-fired electricity production. The
commenter applauds EPA for its recognition that CCS can be a key element in reducing the life-
cycle GHG emissions of renewable fuels. Not only does EPA's acknowledgement lay the
groundwork for use of CCS in reducing carbon dioxide (C02) emissions associated with
renewable fuels, it also serves to support commercial development and deployment of CCS
technologies more generally. The commenter supports the development of clear, flexible and
appropriately tailored regulatory regimes that will facilitate development of and investment in
CCS technology and projects. Of particular importance in this context is the need to avoid
piecemeal regulation of CCS. In particular, the commenter urges EPA to ensure that any
monitoring requirements that may be considered for purposes of the Proposed Rules are not
duplicative of potential SDWA monitoring requirements and do not impose additional
13-4
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RFS2 Summary and Analysis of Comments
unnecessary burdens on CCS projects. (2335.1, p.4 & p.6) (See Docket Number 2335.1, pp.4-9
for a more detailed discussion of these issues)
Document No.: EPA-HQ-OAR-2005-0161-2360
Organization: Archer Daniels Midland Company (ADM)
Comment:
The commenter (2360.1) noted that the development and deployment of carbon capture and
storage technologies is an important means of reducing GHG emissions. The commenter
recommends that EPA should provide a mechanism for GHG reductions due to CCS to be
credited for a given fuel pathway. The commenter believes that EPA should deem compliance
with the UIC permit issued for CCS as adequate assurance that the monitoring and recordkeeping
necessary to ensure the carbon is captured. These programs are designed to ensure this is
occurring. This rule should not try to reinvent the wheel for the existing programs under which
CCS are implemented. (2360.1, p.5)
The commenter noted that EPA requested comment on efficacy of capturing CO 2 from
combustion of fossil fuels. The commenter believes that EPA correctly concluded that
immediate source C02 for capture is that from fermentation. There are numerous issues to be
resolved before combustion emissions will be efficiently captured, but that should not stop EPA
from proposing an ethanol with CCS pathway. Such a pathway, which could be used now for
ethanol fermentation, would be available for future use from fossil fuel combustion. (2360.1, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter (2383) states that EPA's proposed regulations do not provide any "pathway" or
mechanism for a renewable fuel producer that captures and stores CO2 to use associated GHG
reductions in establishing that a fuel qualifies for generation of RINs as either "renewable fuel"
or "advance biofuel." The commenter recommends that EPA establish a process to expedite
assignment of new D codes based on case-by-case demonstrations of the lifecycle GHG
emissions of a particular fuel. The commenter urges EPA to clarify in RFS2 that, for purposes of
any "additionally" analyses under carbon legislation and programs, while CCS systems may be
used to qualify a fuel for a specific D code classification of renewable fuel, to the extent such
systems are not necessary for a fuel to achieve a particular D code, any carbon reductions from
CCS systems should be fully creditable as "additional" reductions or offsets. [[Docket number
2383.1, p. 62]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2303) believes that companies should be encouraged to pursue a broad suite of
solutions, including carbon capture and storage (CCS), to reduce GHG emissions. However,
establishing monitoring requirements and performance standards for C02 leakage from CCS
implies EPA support for a specific pathway for renewable fuel producers to reduce the GHG
emissions associated with renewable fuel production. Additionally including CCS regulations in
the RFS2 regulations would create a patchwork of requirements for CCS. The commenter
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Chapter 13: Other
supports establishment of CCS regulations separately from the RFS regulation. Separate
regulations would facilitate commercial deployment of this important technology while avoiding
duplicative rules. If EPA chooses to include CCS requirements in the RFS regulation, the
commenter offers suggestions on capturing CO 2 from the combustion of fossil fuels for process
heat, monitoring to demonstrate long-term storage of CO 2, and performance standard for CO2
leakage during transport, injection, and/or geologic storage. [[Docket number 2393.1, p. 61]]
[[See docket number 2393.1, pp. 61-65 for a detailed discussion of this issue.]]
Our Response:
EPA recognizes the necessity of clear and cohesive regulation regarding carbon capture
and sequestration (CCS). We acknowledge the difficulty that conflicting and/or patchwork CCS
regulations would impose on this developing technology; however the establishment of
comprehensive CCS regulations is beyond the scope of this rule.
EPA has not finalized a pathway allowing a biofuel producer to generate RINs using
carbon capture and storage to reduce lifecycle green house gas emissions to meet the thresholds
in this rule. The many uncertainties surrounding CCS regulations, as well as the wide range of
green house gas emission reductions achievable depending on how CCS is utilized, are primary
factors in this decision. Biofuel producers who desire to generate RINs using CCS as part of
their fuel production process will be eligible to petition EPA. Biofuels producers using CCS as
part of their fuel production process will be considered to have a significantly different pathway
than those described in Table V.C-7. For a description of the petition process see Section V.C of
the Preamble. These petitions will be evaluated on a case by case basis. Biofuel producers who
capture C02 for commercial sale, displacing naturally sequestered C02 that would otherwise be
collected and used in a variety of industries, and desire to generate RINs are also eligible to
petition EPA. In addition to the information that must be submitted as part of the petition
process described in Section V.C of the Preamble, these biofuel producers must also demonstrate
that the sale of this C02 replaces naturally sequestered C02 in the market.
13.3 Biodiesel Temperature Standardization
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) notes that Section 80.1426(d) (10) provides formulas for the
standardization of volume for ethanol and biodiesel. However, paragraph (iii) in this section
allows the standardization of volume for other renewable fuels to be determined by an
appropriate formula commonly accepted by the industry which may be reviewed by the EPA for
appropriateness. The commenter recommends that EPA extend this courtesy to biodiesel.
[[Docket number 2233.2, p. 15]]
Document No.: EPA-HQ-OAR-2005-0161-2249
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RFS2 Summary and Analysis of Comments
Organization: National Biodiesel Board (NBB)
Comment:
The commenter (2249) requests that EPA revise its renewable identification numbers (RIN)
temperature correction factors for biodiesel. The commenter has collected significant industry
data and polled the commercial marketplace and is providing the following recommendations to
EPA for temperature compensating biodiesel RINs:
-Allow the use of the API tables for temperature compensating of biodiesel RINs, or;
-Allow the use of the current EPA equation for calculating RINs with adjusted values contained
below; and
-Require, under either scenario, that the method of temperature compensation (API tables,
updated EPA formula) be recorded and disclosed by the biodiesel company for purposes of RIN
generation on each RIN transaction. [[Docket number 2249.2, pp. 44-45]]
The commenter stands willing to work with EPA to fine tune the record keeping associated with
this option. The commenter believes that the option above represents a significant step forward
in simplifying the generations of RINs and harmonizing the RIN and sales gallon accounting
systems of both biodiesel and obligated parties. This simplification will reduce the overall cost
of compliance and significantly reduce the possibility of invalid RINs and the costs and lost
productivity in dealing with possible invalid RINs. [[Docket number 2249.2, p. 46]] [[See docket
number 2249.2, pp. 44-48 for further explanation of the rational and basis for this
recommendation.]]
Document No.: EPA-HQ-OAR-2005-0161-2360
Organization: Archer Daniels Midland Company (ADM)
Comment:
The commenter (2360.1) noted that in September 2008, EPA published an equation for biodiesel
volume corrections to be used to calculate RINs as part of the Renewable Fuel Standard. This
equation utilized a coefficient of expansion of 0.0008008 for all biodiesel regardless of feedstock
or processing. Now EPA is proposing to change the coefficient of expansion significantly to
0.00045767. The commenter recommends that EPA use the API values (widely used by
traditional fuel suppliers) rather than the value proposed in that it is confusing to use different
values for calculating RINs volumes and sales volumes. It is imperative to have a single,
uniform calculation to apply throughout the industry. (2360.1, p.7-8) [[See Docket Number
2360.1, pp.7-8 for a detailed discussion of this issue]]
Document No.: EPA-HQ-OAR-2005-0161-2157
Organization: World Energy Alternatives, LLC.
Notes:
The same comment has been submitted and posted multiple times under the following docket
numbers: 2157-2157.1, 2294-2294.1, 2295-2295.1, 2296-2296.1, 2297-2297.1, 2298-2298.1,
2340-2340.1, 2226-2226.1, 2227-2227.1, 2293-2293.1, 2170-2170.1, 2159-2159.1. 2157
contains all of the summary information.
Comment:
The commenter (2157) requests that EPA revise its renewable identification numbers and
temperature correction factors for biodiesel. Additional detail given on (2157 p. 41-26).
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Chapter 13: Other
Document No.: EPA-HQ-OAR-2005-0161-2172.1
Organization: Minnesota Soybean Processors.
Comment:
The commenter (2172) requests that EPA revise its renewable identification numbers (RIN)
temperature correction factors for biodiesel to the 2008 Minnesota Hedman equation.
Our Response:
The volume of a batch of renewable fuel can change under extreme changes in
temperature. The volume of a batch of renewable fuel can experience expansion as the
temperature increases, or can experience contraction as temperature decreases. The Agency
requires temperature standardization of renewable fuels at 60 ° Fahrenheit (°F) so renewable fuel
volumes are accounted for on a uniform and consistent basis over the entire fuels industry. In the
May 1, 2007 Renewable Fuels Standard (RFS) final rule the Agency required biodiesel
temperature standardization to be completed as follows:
Vs,b = Va,b X(-0.0008008 X T + 1.0480)
Where
Vs,b = Standard Volume of biodiesel at 60 degrees F, in gallons;
Va,b = Actual volume of biodiesel, in gallons;
T = Actual temperature of batch, in degrees F.
This equation was based on data from a published research paper by Tate et al.l
Members of the petroleum industry have indicated that the current biodiesel temperature
standardization equation in the regulations provides different results than that commonly used by
both the petroleum and biodiesel industry for commercial trading of biodiesel. These
commercial values are either based on American Petroleum Institute (API) tables for petroleum
products or on empirical values from industry measurements at common temperatures and
pressures observed in bulk fuel facilities. The difference between RIN calculated volumes and
commercial sales volumes has created confusion within the record keeping system of both the
petroleum and biodiesel industry.
In the RFS2 proposed rule, the Agency proposed the temperature standardization of
biodiesel remain unchanged from the RFS1 requirements.2 The Agency received comments
from Archer Daniels Midland Company (ADM), World Energy Alternatives, Marathon
Petroleum Company (Marathon), Minnesota Soybean Processors (MSP), and the National
Biodiesel Board (NBB) to revise the biodiesel temperature standardization equation.
Both ADM and NBB agreed on the necessity for biodiesel temperature standardization at
60 °F. ADM, MSP, and NBB commented on several empirical calculations which have been
developed specific to biodiesel temperature standardization since the 2007 RFS1 final rule.
These include a 2004 data set developed by the Minnesota Department of Commerce and the
1 Equation was derived from R.E. Tate et al. "The Densities of Three Biodiesel Fuels at Temperatures up to 300°C.'
Department of Biological Engineering, Dalhousie University, April 2005. "Fuel 85 (2006) 1004-1009, Table 1 for
soy methyl ester."
2 74 FR 24943, May 26, 2009.
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RFS2 Summary and Analysis of Comments
Renewable Energy Group and updated in 2008; information embedded in the European Biodiesel
Specification EN 14214; and information from the Alberta Research Council. The table below
provides values from NBB for 1000 gallons of biodiesel standardized to a temperature at 60 °F
for these empirical calculations, along with the current EPA equation, and the American
Petroleum Institute (API) Refined Products Table 6.
Table 1: NBB Comparison of Biodiesel Temperature Standardization Calculations to 60°F for
1000 gallons of Biodiesel at 90°F
2007 EPA Biodiesel Formula
2008 Minnesota (Hedman) data
API Refined Products Table 6 (biodiesel
density @ 7.359)
Alberta Research Council
EN 14214 data
2004 Minnesota Renewable Energy Group data
975.28 gallons
986. 270 gallons
986.625 gallons
986.238 gallons
986.401 gallons
986.830 gallons
As illustrated by the results from the above table, the values for the various biodiesel
temperature standardization empirical calculations are within 1 gallon of agreement of each other
for a 1000 gallon biodiesel batch, except for the current biodiesel temperature standardization
equation in the regulations.
To ensure consistency in RIN generation, ADM commented EPA should adopt only one
biodiesel temperature standardization calculation. ADM commented that all biodiesel
temperature standardization calculations developed, including the API Refined Products Table 6,
are in very close agreement with each other and the differences between them all are
insignificant. They further commented the API Refined Products Table 6 has provided a
uniform measurement of volume for years for the entire liquid fuels industry. Thus, ADM
believes the API Refined Products Table 6 should be adopted for biodiesel to be consistent with
the calculation of sales volumes. Finally ADM comments adoption of the API Refined Products
Table 6 would allow for easier verification within the marketplace, eliminate the need for
calculating one volume for sales and trades and another for RINs, and prevents the entire
distribution network from facing the financial burden of reprogramming existing meters that
already are based on the API Refined Products Table 6.
NBB commented that earlier surveys from its members indicate a fifty-fifty split between
members using the API Refined Products Table 6 or some variation of the current EPA biodiesel
formula for biodiesel temperature standardization. Some NBB members indicated that the API
Refined Products Table 6 was more commonly used by the petroleum industry and embedded
into the meters, pumps and accounting systems of the petroleum industry. Companies already
using the API Refined Products Table 6 would have a reduction in required paperwork with RIN
generation and tracking because already existing commercial documents could serve that
purpose and they thus could eliminate or reduce their current dual tracking system. Other NBB
members have already embedded the current EPA biodiesel equation within their accounting and
sales systems and would like to continue using that type of biodiesel temperature standardization
approach rather than the API Refined Products Table 6. The NBB and MSP recommended EPA
revise its current equation in the regulations to the 2008 Hedman biodiesel temperature
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Chapter 13: Other
standardization equation. Thus, NBB commented EPA should provide flexibility to their
members by allowing the use of either the API Product Table 6 or the use of a biodiesel
temperature standardization equation.
Marathon commented the regulations allow for the standardization of volume for other
renewable fuels to be determined by an appropriate formula commonly accepted by the industry
which may be reviewed by the EPA for appropriateness. They recommended that EPA extend
this courtesy to biodiesel.
The Agency acknowledges that the current biodiesel temperature standardization
equation is likely not correct for biodiesel temperature standardization at ambient temperatures
observed in the fuel distribution system. Based on the comments received, the Agency is
amending the regulations to allow for two ways for biodiesel temperature standardization: 1) the
American Petroleum Institute Refined Products Table 6B, as referenced in ASTM D1250-08,
entitled, "Standard Guide for Use of the Petroleum Measurement Tables", and 2) a biodiesel
temperature standardization equation that utilizes the 2008 data generated by the Minnesota
Department of Commerce and the Renewable Energy Group. These two methods for biodiesel
temperature standardization are within one gallon of agreement of each other for a 1000 gallon
biodiesel batch and thus in very close agreement. ADM, MSP and NBB acknowledged that the
differences between these two methods are insignificant and the resulting corrected volumes
from these two methods of calculation are within accuracy tolerances of any metered
measurement. Thus, the Agency believes the allowance of both of these methods for biodiesel
temperature standardization will increase flexibility while still providing for a consistent
generation and accounting of biodiesel RINs over the entire fuel delivery system.
13.4 Comments Outside Scope of the Proposal
13.4.1 Fuel Quality
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2465
Organization: Ford Motor Company
Comment:
The commenter believes that vehicle compatibility, refueling infrastructure improvement and
appropriate pricing are all important to achieving the RFS2 goals; however, there is a need for
strict adherence to fuel quality needs as outlined by automakers. Automakers are best suited to
define the requirements for their engines and vehicles. As such, fuel experts from the auto
industry worldwide have created the Worldwide Fuel Charter (WFFC). The WFFC includes
guidelines for all transportation fuels including biofuels and was created to assist countries with
implementation of transportation fuels. The commenter believes that both the base fuel as well
as the final blended biofuel needs to meet minimum automaker fuel specifications. (2465.1, p. 13)
The commenter also believes that ethanol should become an accepted transportation fuel.
However, in order for ethanol to gain acceptance in the marketplace, it is essential to avoid the
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RFS2 Summary and Analysis of Comments
kind of consumer backlash that developed with early and flawed diesel applications in the U.S.
car market. (2465.1, p.14) (See Docket Number 2465.1, p.14 for more discussion on this issue)
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter recommends against EPA including E85 quality specifications to the RFS2
regulation because it will be unnecessary to do so. (Docket Number 2132.1, pp.18-19) [[See
Docket Number 2132.1, pp.18-20 for a detailed discussion on the ATSM Fuel Quality Standard
for E85)
To the extent the expansion of renewable fuels in the marketplace may cause an increase in
emissions, the commenter (2132.1) that EPA recognizes such increases will need to be mitigated
through fuel quality changes and not through regulations on other sources. (2132.1, p.8)
Document No.: EPA-HQ-OAR-2005-0161-2143
Organization: New York State Department of Environmental Conservation
Comment:
The commenter (2143) suggests that if E85 must be regulated if it is expected to be a significant
motor fuel. (2143.2, p.10)
Document No.: EPA-HQ-OAR-2005-0161-2127
Organization: Caterpillar Inc
Comment:
The commenter notes that significant uncertainty with today's bio-diesel fuels (FAME), and
despite their availability, there is a lack of adequate clarity to their effects, shorter term and
longer term. Engine manufacturers need predictability and consistency of fuel in order to design
future engine technologies. Because of this, engine manufacturers need adequate lead-time to
develop the requisite technologies that offer optimum performance, coupled with the most cost
effective GHG reductions. [[Docket number 2127.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2141
Organization: American Trucking Association
Comment:
The commenter (2141.1) noted that the rule does not require that fuel used to satisfy the
biomass-based diesel portion of the mandate comply with ASTM D975. This oversight must be
remedied to avoid potential damage and operating challenges for the legacy fleet. The
commenter noted that last year, ASTM-International approved a modification to the on-road
diesel fuel standard (i.e., ASTM D975), which will facilitate the use of biodiesel in blends up to
five percent (B5). Five percent of the diesel fuel consumed by the U.S. trucking industry is 1.95
billion gallons almost double the amount mandated by RFS2. The commenter believes that
requiring compliance with ASTM D975 will not impede the ability to achieve the biomass-based
diesel targets under RFS2. There is no reason that EPA should not require fuel sold in the U.S.
to meet this universally accepted standard. (2141.1, p.2)
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The commenter also noted that the rule may result in certain obligated parties distributing blends
of biodiesel that exceed five percent. These higher biodiesel blends do not meet the ASTM
D975 standard. While renewable diesel that meets the ASTM D975 standard is expected to
perform comparably to today's ultra low sulfur diesel (ULSD) fuel, first generation biodiesel has
been shown to present operational challenges for the trucking industry as the blend rate
increases. (2141.1, p.2) [[See Docket Number 2141.1, pp.3-5 for a detailed discussion of the
operational challenges.]]
Document No.: EPA-HQ-OAR-2005-0161-2127
Organization: Caterpillar Inc
Comment:
The commenter (2127) is concerned about two interrelated issues: certification fuel and
certification testing. The commenter believes it is very premature to discuss any changes to the
current diesel engine certification testing process or the current certification fuel used in that
process. Renewable fuels currently available in the marketplace significantly vary in
compositions and quality. Engine manufacturers should not be required to test or otherwise
demonstrate compliance to a variety of possible renewable fuels or blends. That would be
extremely cumbersome, cost prohibitive, and not practical. [[Docket number 2127.1, p. 4]]
The commenter adds that an engine manufacturer should not be liable, or implicitly accountable,
for emissions when a fuel different than the certification fuel, is used. Emissions certification
tests are based on using a well-defined certification fuel and need to continue in this course.
[[Docket number 2127.1, p. 4]]
The commenter states that EPA needs to provide assurance and enforcement for the technical
and quality specifications for both renewable fuels and the resulting finished fuel blends in the
market. The commenter states that such enforcement of current renewable fuels and finished
fuels to the latest industry specifications and standards by EPA will be critical to the success of
this renewable fuels initiative. The commenter (2127) believes that transparency to the end user
about the "finished" fuel being purchased will be another important element of assuring the
market about the quality and consistency of the transportation fuel pool. [[Docket number
2127.1, p. 4]]
The commenter urges EPA to work with Agency counterparts in other major geographic areas
with the goal of achieving this global harmonization of renewable fuel specifications and
standards. [[Docket number 2127.1, p. 4]]
Document No.: EPA-HQ-OAR-2005-0161-2127
Organization: Caterpillar Inc
Comment:
The commenter (2127) is concerned that the proposal does not address the demand side of
renewable fuels, nor the compatibility of the mandated renewable fuels with current and future
engine technologies. The commenter and the engine industry have long stressed that engine
technology and fuels need to be developed together, as a "system", in order to address the needs
of customers and society. The commenter believes that promoting much greater use of renewable
fuels (by and through this RFS2 NPRM) should only be done in parallel with a thorough
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RFS2 Summary and Analysis of Comments
investigation of the implications and compatibility of the various renewable fuels/fuel blends
with the engine technologies. [[Docket number 2127.1, pp. 3-4]]
Document No.: EPA-HQ-OAR-2005-0161-0984
Organization: Citizen
Comment:
The commenter noted that the fuel quality standards currently in development by standards
organizations in the U.S., Europe and Brazil tend to be feedstock neutral, performance-based
standards. Achieving fuel production quality standards is a worthy goal because longer term,
standardization of biofuels will hopefully enable us to more clearly identify the public health
benefits of biofuels from an air pollution stand point. (0984, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2127
Organization: Caterpillar Inc
Comment:
The commenter states that EPA needs to provide assurance and enforcement for the technical
and quality specifications for both renewable fuels and the resulting finished fuel blends in the
market. The commenter states that such enforcement of current renewable fuels and finished
fuels to the latest industry specifications and standards by EPA will be critical to the success of
this renewable fuels initiative. The commenter (2127) believes that transparency to the end user
about the "finished" fuel being purchased will be another important element of assuring the
market about the quality and consistency of the transportation fuel pool. [[Docket number
2127.1, p. 4]]
Organization: Engine Manufacturers Association
Comment:
The commenter (2147.1) recommends that EPA combine the RFS2s increased renewable fuel
production requirements with the necessary finished fuel specification requirements in a single
comprehensive rulemaking package providing both the timing and logistics required to
coordinate the production and use of the renewable fuel requirements as specified by EISA.
(Page 10)
Document No.: EPA-HQ-OAR-2005-0161-2125
Organization: Mercedes Benz
Comment:
The commenter (2125.1) noted that there are a number of forms of biomass-based diesel, such as
renewable (non-ester) diesel, which represent excellent solutions for meeting the aggressive
EISA volumetric mandate for biomass-based diesel. These non-ester renewable diesels, such as
biomass-to-liquid fuels and hydrotreated vegetable oil, do not present the types of performance
and reliability problems associated with traditional biodiesel. In contrast, in order to use
traditional biodiesel to meet the EISA mandates, these performance and reliability problems
must be addressed. (2125.1, p.2) [[See Docket Number 2125.1, pp.2-3 for a detailed discussion
of this issue.]]
Our Response:
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Chapter 13: Other
The RFS2 final rulemaking is implementing the new provisions of section 211 (o) of the
CAA. In so doing, it is establishing a program for the generation and use of renewable credits
(RINs) for fuels that meet the requirements for a renewable fuel under section 211 (o). Other
sections of the CAA address standards for and approvals for the use of fuels and fuel additives.
New specifications for fuels and fuel additives and new mechanisms to enforce those
requirements are outside the scope of the RFS2 rule. The current EPA requirements which apply
to finished motor fuels will continue to apply to finished motor fuels which contain biofuels. For
example in the case of diesel fuel used for highway consumption, such fuel must meet a 15 ppm
sulfur specification which EPA enforces throughout the fuel distribution system.
13.4.2 Low Carbon Fuel Standard & Cap and Trade
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-0952
Organization: Renewable Fuels Association
Comment:
The commenter (2329.1) believes that EPA should preempt state programs designed to address
carbon content and lifecycle analysis of fuels. The commenter believes that EPA should use its
authority to preempt state low carbon fuel standards. (2329.1, p. 107) [[See Docket Number
2329.1, pp.107-108 for a detailed discussion of this issue]]
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) questions EPA's discretionary authority to control fuels for GHG
impacts. The commenter states that Congress has sometimes chosen to establish fuel standards
itself rather than looking to EPA to rely on authority delegated by §2118 of the Clean Air Act to
set those standards and believes that this is exactly what Congress did when it enacted EISA.
EPA action under §2118 to set additional fuel standards such as a low-carbon fuel standard
(LCFS) is unneeded and duplicative. [[Docket number 2393.1, pp 76-77 and 2523.1, pp. 2-3]]
[[See docket number 2393.1, pp 76-78 for details of this discussion.]]
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) questions EPA's discretionary authority to control fuels for GHG
impacts. The commenter states that Congress has sometimes chosen to establish fuel standards
itself rather than looking to EPA to rely on authority delegated by §2118 of the Clean Air Act to
set those standards and believes that this is exactly what Congress did when it enacted EISA.
EPA action under §2118 to set additional fuel standards such as a low-carbon fuel standard
(LCFS) is unneeded and duplicative. [[Docket number 2233.2, p. 66]] [[See docket number
2233.2, pp. 66-68 for additional discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2337
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RFS2 Summary and Analysis of Comments
Organization: California Air Resources Board
Comment:
The commenter (2337.1) would like to see future RFS proposals reflect the existing standards in
place in California's LCFS (low carbon fuel standard) in a variety of ways: California's LCFS
avoids volumetric requirements and instead promotes carbon intensity reductions from a broad
mix of fuels without applying set limits to individual fuels. No fuel production is
"grandfathered", rather the LCFS applies a carbon intensity performance standard. Fuel
producers are allowed to pursue the cost-effective mix of fuels of their choosing so long as they
meet the overall emissions reduction requirement. (Page 5)
Document No.: EPA-HQ-OAR-2005-0161-2127
Organization: Caterpillar Inc
Comment:
Regarding a fuel-based carbon pricing mechanism, the commenter points out that there are two
basic approaches to a "fuel based carbon pricing mechanism" (FBCPM). Including all
transportation fuels under a "cap & trade" system would be one approach. The other approach
would be a "carbon tax" on transportation fuels. The commenter believes this price based
approach, or a market based approach would be technology neutral and would be the most
efficient approach; hence, the comment recommends a FBCPM.
However, the commenter also believes that a FBCPM and a RFS can be complimentary
approaches to mitigating GHG emissions and improving energy efficiency; and thus, are not
necessarily mutually exclusive. They could possibly be implemented in concert with one another.
[[Docket number 2127.1, p. 8]]
Our Response:
EPA through the RFS2 final rule is implementing the Renewable Fuel Standards program
as required by Congress through EISA. Issues associated with State LCFS programs, and
potential future Federal fuel standards, are not germane to the final RFS program. However,
where possible we have attempted to structure the RFS 2 program so as to be compatible with
existing State LCS programs, including coordination on lifecycle modeling.
13.4.3 E15 Waiver
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) is concerned about retail dispensing and consumer acceptance of E10+
fuels. The commenter notes that the equipment at retail sites has only been approved for use
with up to 10% ethanol and there are regulatory issues, safety consideration, and concerns with
dispensing equipment to resolve. [[Docket number 2233.2, pp. 17-18]]
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Chapter 13: Other
Document No.: EPA-HQ-OAR-2005-0161-2303
Organization: American Bakers Association
Comment:
The commenter (2303.1) believes that EPA should not increase fuel blend levels until advanced
biofuels are available and the ongoing science has been completed. EPA should also ensure that
it has its Science Advisory Boards (SAB) ethanol blends compatibility study completed prior to
altering existing ethanol blend levels is significant. The commenter urges EPA to oppose
proposals that recommend increasing the amount of corn ethanol that can be blended into
gasoline. EPA should take the appropriate steps to bring advanced biofuels into the marketplace.
According to the Grocery Manufacturers Associations study, more than half of the U.S. corn
crop will be diverted from food and feed to fuel if EPA permits the use of El 5, leading to
significant increases in food and feed prices and potentially, creating food security issues for the
U.S. population in the future. (2303.1, pp.1-2)
Document No.: EPA-HQ-OAR-2005-0161-2504
Organization: American Frozen Food Institute
Comment:
Commenter [[2504]] states that EPA should not increase fuel blend levels until advanced
biofuels are available and the ongoing scientific research has been completed. And that EPA
should oppose proposals that recommend increasing the amount of corn ethanol that can be
blended into gasoline. [[#2504.1 p. 2]]
Document No.: EPA-HQ-OAR-2005-0161-0933
Organization: Citizen
Comment:
The commenter (0933) reports excellent performance of his FFV fleet and chainsaws using
ethanol blends. The commenter suggests that EPA move the allowable blends upward until UL
finishes the certification for E85, investment in pumps follow, E85 vehicles are brought to
market with new technologies to maximize ethanol efficiency, and the public embraces high
ethanol blends. The commenter also sees no issues with a voluntary cap of El 5. [[See Docket
Number 0933, pp.1-2]]
Document No.: EPA-HQ-OAR-2005-0161-2329
Organization: Renewable Fuels Association
Comment:
The commenter noted that EPA dedicated several pages of the preamble to the so-called "blend
wall" issue. The commenter noted that the "blend wall" is largely irrelevant to the RFS mandate
requirements. The commenter believes that this discussion is best addressed in context of the
petition for a waiver that is currently pending before EPA, rather than as part of the final rule.
Ultimately, allowing mid-level blends will be an important part of meeting the RFS2 volume
requirements under the EISA, and EPA should move expeditiously to approve the waiver request
or otherwise allow increased use of ethanol in gasoline. The commenter incorporated by
reference its comments on the El5 waiver request (Appendix 0). [[See Docket Number 2329.1,
p. 107]]
Document No.: EPA-HQ-OAR-2005-0161-0964
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RFS2 Summary and Analysis of Comments
Organization: Citizen
Comment:
The commenter (0694) asks EPA to consider potential damage to engines and invalidation of
engine warranties as the amount of ethanol allowed in gasoline mixes rises. (P. 1)
Document No.: EPA-HQ-OAR-2005-0161-1397
Organization: United Refining Company
Comment:
The commenter (1397) is concerned that blending beyond E10 and B5 is the liability issue. If
ethanol blends and biodiesel blends are to be increased above 10% by volume and 5%
respectively, the commenter would need a liability waiver to protect against engine damage
claims which could result in ruinously large expenses for defending such claims and paying
judgments. (1397, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2102
Organization: RENTECH, INC
Comment:
Given the limited benefit that midlevel ethanol would have in helping EPA to achieve EISA
mandates, the commenter (2102.1) believes it would be shortsighted to risk damaging vehicles
and equipment that were not designed to operate on more than 10 percent ethanol. We support a
careful review of the El 5 waiver, as negative consumer experiences with midlevel ethanol would
create a stigma in the marketplace against all renewable fuels and undermine the ability of
ultimately achieving EISA mandates. (2102.1, pp.5-6) (See Docket Number 2102.1, p.6 for more
discussion on this issue)
Document No.: EPA-HQ-OAR-2005-0161-2105
Organization: Small Business Administration, Office of Advocacy
Comment:
The commenter (2105.1) believes that EPA should not approve the El 5 waiver until definitive
research has been conducted showing the viability of El 5 for safe and effective use. Small
refiners are concerned that the blending requirements will force them to produce El 5 as the only
alternative for the volume of ethanol that they must use, and doing so will cause damage to
gasoline powered engines that will result in legal liability for the fuel producers. Until engine and
vehicle producers certify their vehicles as safe for El5 use, and El5 is found through extensive
research not to be harmful for already produced engines, EPA should not approve any El5
waiver and should instead find alternative methods for mitigating the blend wall stalemate.
(2105.1, p.7)
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) opposes the proposal to approve El 5 as gasoline and urges EPA to
reject Growth Energy's petition for the following reasons:
(1) the science on the impact of mid-level ethanol blends on consumer safety, engine
performance, and potential environmental harm has not been completed and likely will not be
completed for at least two years;
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Chapter 13: Other
(2) the information submitted by Growth Energy in support of its petition is a woefully
inadequate foundation upon which to base such an important change in the nation's supply of
gasoline;
(3) the potential approval of Growth Energy's petition is not an effective short- or medium-term
solution to avoiding the "blendwall" problem caused by the increasing conventional biofuels
volumes mandated under the Energy Independence and Security Act of 2007 and thus EPA
should not rush such an important decision until a scientifically-based rationale can be reached
regarding consumer safety, engine reliability, and environmental concerns of mid-level ethanol
blends use in all gasoline-powered motor vehicles and engines in use in the United States; and
(4) this seemingly modest petition will, if granted, have wide-ranging implications on other
federal and state fuels programs and will require a series of complex and lengthy rulemakings to
harmonize these programs with the introduction of mid-level ethanol blends. (2124.1, p. 37)
The commenter also opposes the grant of a "partial waiver" to permit the use of mid-level
ethanol blends in some gasoline-powered engines for the following reasons:
(1) it would cause significant disruption in the nation's wholesale and retail gasoline distribution
infrastructure, widespread consumer confusion and potential misfueling, and potential liability
for engine and fuel manufacturers for any damage caused to gasoline-powered engines not
compatible with mid-level ethanol blends; and
(2) EPA does not have the statutory authority under Section 211 (f) of the Clean Air Act to grant
a partial waiver. (2124.1, p.38)
[[See Docket Number 2124.2 for detailed comments on this issue]]
The commenter also believes that there are several mid-level ethanol blend infrastructure
compatibility issues; including OSHA regulations, EPA UST regulations, UST leak detection
equipment, Fire Codes, and Vapor Recovery. (2124.1, p.38) [[See Docket Number 2124.1,
pp.38-40 for a detailed discussion of this issue]].
The commenter proposes that EPA provide for conventional gasoline the blending flexibility
EPA provides for reformulated gasoline (RFC). The commenter noted that EPA regulations
allow retailers to sell non-ethanol-blended RFC that has been combined with ethanol-blended
RFC under certain conditions ("commingling"). Providing this flexibility for conventional
gasoline would provide flexibility while retail stations transition to ethanol-blended gasoline in
the summer and transition out of ethanol-blended gasoline when there may be an ethanol
shortage in a given area. (2124.1, p.41) [[See Docket Number 2124.1, pp.41-42 for a detailed
discussion of this issue]]
Document No.: EPA-HQ-OAR-2005-0161-2130
Organization: ExxonMobil Refining & Supply Company (ExxonMobil)
Comment:
The commenter (2130) urges EPA to require that new vehicles be certified on El0 as it is the
prevailing fuel in the marketplace. Moreover, if EPA subsequently grants a substantially similar
waiver for an E10+ blend, the new E10+ blending level should become the new certification fuel
for new vehicle production and testing. [[Docket number 2130.1, p. 11]]
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RFS2 Summary and Analysis of Comments
The commenter believes that a mid-level blend substantially similar waiver is needed to permit
growth in the use of ethanol as the RFS2 mandates intend. However, long term durability testing
of the legacy fleet must be completed so the potential impacts of a mid-level blend waiver
decision can be adequately assessed. In addition, the adequacy of distribution and retail
infrastructure to accommodate mid-level blends must be assessed as well and a path available to
enable any upgrading that may be needed. [[Docket number 2130.1, pp. 14-15]]
The commenter does not support a "testing tolerance" approach to avoid the full testing and
analysis requirements of a substantially similar waiver. [[Docket number 2130.1, p. 15]]
In addition, the commenter states that when EPA reaches a decision regarding the Growth
Energy waiver petition or any subsequent petition that may result in approval of a mid-level
blend for use, EPA must clarify the status of the 1 psi RVP waiver for 10% ethanol blending.
[[Docket number 2130.1, p. 15]]
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) noted that one of the issues highlighted in the RFS2 rulemaking
preamble is the possibility that EPA might partially grant the El 5 waiver request, thereby
allowing mid-level ethanol blends to be used in some, but not all, vehicles. EPA has rightly
recognized that such a step would require careful implementation strategies to prevent the
misfueling of vehicles and products that cannot safely use El 5. The commenter believes that
EPA still needs more data to determine whether any vehicles may successfully use El5,
including models meeting Tier 2 emission standards as suggested in the proposed rule. Since El 5
has not yet been proved safe for any vehicles, discussing ways to implement a split market may
be premature. (2132.1, p.2) [[ See Docket Number 2132.1, pp.21-23 for a detailed discussion
E15&E85)
With regards to the partial waiver implementation, the commenter noted that EPA asked for
comment on a variety of ways to identify the fleet that might be allowed to use a higher ethanol
blend, such as a model year cut-off or a technology group, such as Tier 2. This discussion is
premature because we don't know yet what the research will show. Assuming some class of
vehicles is shown capable of using some blend above E10, for discussion purposes, the
commenter believes that EPA will need to clearly define the class and explain how the owners
will learn what fuel is appropriate for their vehicle. (2132.1, p.26) [[See Docket Number 2132.1,
pp.26-27 for a detailed discussion on the partial waiver implementation]]
Document No.: EPA-HQ-OAR-2005-0161-2147
Organization: Engine Manufacturers Association
Comment:
The commenter (2147.1) asserts that blends greater than E10 are not compatible with the existing
spark ignition (SSI) engine powered equipment fleet.
They specify that data generated through DOE contracts for testing SSI engines confirmed that
significant increases in regulated emissions were identified when engines were aged using El5
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Chapter 13: Other
fuel. The combination of EPA's own experience with ethanol blends increasing evaporative
emissions and DOE's experience with ethanol blends increasing exhaust emissions provides
clear and compelling evidence that blends greater than E10 are not compatible with the existing
SSI engine powered equipment fleet. While it does not appear that EPA is proposing to breach
the El0 blend wall within the RFS2 NPRM, the substantial preamble discussion concerning the
relationship between the RFS2 mandated ethanol volume and the ability to adsorb that volume
with E10 and E85 blends, results in the obvious conclusion that EPA intends to make a change to
finished fuel specifications at some point in the near future. (Page 8)
Additionally, the commenter (2147.1) raises strong objections to the bifurcated fuel distribution
system where traditional gasoline (E10 maximum) and E85 would remain in the market but an
additional category (El 5, E20, etc.) would be introduced for use in a sub-set of existing non-flex
vehicles. The commenter notes this is not viable for a number of reasons including: (i) fuel
infrastructure; (ii) customer acceptance; (iii) misfueling of engines/vehicles; (iv) unintentional
misfueling of small portable containers; and (v) potential to consume the volume of ethanol
required by the proposed rule. (Page 8)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) believes there are many challenges related to the E10 blendwall, fuel
distribution and the FFV fleet. After 2013, the volumes of ethanol mandated by EISA will be in
excess of the market's capability to absorb under current regulations. If gasoline demand falls (as
it is currently doing), there will be even less gasoline volume to absorb ethanol, and the
blendwall would come sooner. In addition, it is unrealistic to believe that 100% of the gasoline
pool will have 10% ethanol blended into every gallon. If only 95 or 90% of the gasoline pool
blends ethanol, the blendwall could occur in 2012 or 2011. Regarding the distribution issues, the
commenter states that huge sums of money will need to be invested in new infrastructure before
either of the two proposed solutions (E85 and mid-level blends) have an impact on the blendwall.
In addition E85 has marketing problems and mid-level ethanol blends require years of research
before they can be introduced into the current fleet without creating very large liability concerns.
[[Docket number 2233.2, pp. 15-16]] [[See docket number 2233.2, pp. 15-20 for further
discussion of these issues.]]
The commenter also notes significant consumer acceptance issues associated with E85 that will
make it an unworkable solution to the E10 blendwall problem. [[Docket number 2233.2, pp. 18-
19]]
The commenter also states that the measurement tolerance for ethanol value can not be used to
allow biofuels blenders to deliberately blend above the legal limit. [[Docket number 2233.2, pp.
32-33]]
The commenter urges EPA to reject the current Growth Energy El5 waiver application because
the technical justification is inadequate, adding that the waiver application no more supports a
partial waiver than it does a full waiver. [[Docket number 2233.2, p. 33]] [[See docket number
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RFS2 Summary and Analysis of Comments
2233.2, pp. 33-38 and pp. 71-73, Attachment A for an extensive discussion of the issues of
concern associated with the E85 waiver.]]
The commenter believes that EPA should change future vehicle certification fuel to E10 and that
FFVs should be certified on E85 and E10. [[Docket number 2233.2, pp. 63-64]]
Document No.: EPA-HQ-OAR-2005-0161-2241
Organization: Outdoor Power Equipment Institute (OPEI); Alliance for a Safe Alternative
Fuels Environment (A11SAFE)
Comment:
The commenter (2241.1) noted that EPA must not only consider companion provisions in
Section 211, but it must also consider all other CAA Title II programs and ensure that the RFS2
is not causing unintended consequences in each class of regulated on-road and nonroad mobile
sources. In addition to considering whether emissions failures are occurring and whether
emissions are increasing (and mitigating those increases), EPA must also ensure that RFS2
mandates will never unintentionally result in de facto more stringent emission standards without
first going through notice and comment rulemakings based on complete administrative records.
(2241.1, p.6
The commenter (2241.1) recognizes the daunting challenges EPA faces in meeting the EISA
mandate for 36 billion gallons of renewable fuel (including 16 billion gallons of cellulosic
biofuel) by 2022. Adoption of provisions that promote mid-level ethanol will result in profound
impacts on our nation's air quality and on the performance, efficiency, and operability of over
400 million pieces of legacy equipment. The commenter believes that EPA should promote fuels
that will meet the EISA mandates and improve the emissions, performance and efficiency of
engines, vehicles and equipment. Given the limited benefit that mid-level ethanol would have in
helping EPA to achieve EISA mandates, the commenter believes it would be shortsighted to risk
damaging vehicles and equipment that were not designed to operate on more than 10% ethanol.
(2241.1, pp.7-8) (See Docket Number 2241.2 exhibit A, for more discussion on this issue)
To the extent EPA wants to pursue a "partial waiver" approach (or a similar approach), the
commenter believes that EPA should initiate a separate future rulemaking process (under section
2118) and develop a well-supported, specific proposal and administrative record that carefully
evaluates all the complex issues associated with potentially bifurcating the national fuel supply
system through practical and specific proposals to avoid misfueling. (2241.1, pp.9-10) (See
Docket Number 2241.1, pp.8-11 for more discussion on this issue)
The commenter also believes that the misfueling controls proposed by EPA fall short of those
that were proven ineffective during the leaded gasoline transition. These include labeling of fuel
inlets and pumps, notification to owners through outreach efforts and owner's manuals, and use
of cards/transponders that would limit the dispensing of mid-level ethanol to flex-fuel vehicles.
(2241.1, p.11) (See Docket Number 2241.1, pp.10-12 for more discussion on this issue)
The commenter is also concerned about the continued market availability of fuels with lower
levels of ethanol. (2241.1, p. 12) (See Docket Number 2241.1, pp. 12-13 for more discussion on
this issue)
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Chapter 13: Other
Although not specifically mentioned in the RFS2 proposal, the commenter is concerned that
illegal misfueling now occurs at existing blender pumps dispensing mid-level ethanol fuels and
will continue to occur at even greater rates if gasoline stations are misled into believing they are
not responsible, accountable, or liable for such misfueling. (2241.1, p.14) (See Docket Number
2241.1, pp.14-16 for more discussion on this issue)
The commenter noted that EPA solicited comment on the appropriateness of redefining the
regulatory definition of "substantially similar" to include mid-level ethanol blends, specifically
El 2, thereby temporarily avoiding the need to obtain a waiver under CAA Section 211 (f) (4).
The commenter believes that this proposal would not appreciably affect the impending blend
wall, as even El 5 would only delay the blend wall for a few years. The commenter also believes
that this would be contrary to Congress' clear intent in passing EISA. (2241.1, p. 16) (See Docket
Number 2241.1, pp. 16-19 for more discussion on this issue)
The commenter does not believe it would be appropriate for EPA to institute a measurement
tolerance for ethanol that would allow ethanol levels beyond 10%. The 10% ethanol limit has
been in place for over thirty years without a measurement tolerance, which stands as clear
evidence that such a tolerance is not needed to ensure that obligated parties can meet ethanol
content limitations. (2241.1, p.20) (See Docket Number 2241.1, p.20 for more discussion on this
issue)
Document No.: EPA-HQ-OAR-2005-0161-2312
Organization: LyondellBasell Industries
Comment:
The commenter (2312.1) believes that if EPA were to raise the oxygen level in the "Substantially
Similar" interpretive rule for commercial gasoline so as to accommodate 12 volume percent
ethanol or 15 volume percent ethanol, then the increased oxygen level should also apply to all
aliphatic oxygenates compounds (alcohols and ethers) because these compounds have physical
and chemical properties that make them more inert than ethanol blended in gasoline. The
commenter also believes that if EPA should choose to relax any of the ASTM volatility
specifications for the ethanol blended under the "sub-sim" rule, then it is appropriate to extend
this same flexibility to blending the other oxygenates under the rule as well so as to not cause
distorted incentives that make the fuel marketplace less efficient. (2312.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2328
Organization: Petroleum Marketers Association of America (PMAA)
Comment:
The commenter (2328.1) opposes any solution on overcoming an anticipated renewable fuel
blend wall that includes introduction of a new mid-level ethanol blend without first fully
addressing legacy equipment compatibility and liability issues. The commenter noted that EPA
predicts that based on RVO mandates, a "blend wall" will be hit in 2013 without the approval of
a new mid-level ethanol/gasoline blend in addition to the E-10 and E-85 blends currently
available. Moreover, the EPA suggests the blend wall can be delayed until 2016 with an E-15
blend. The commenter also noted that there are many issues that must be resolved before a mid-
level ethanol blend is an acceptable option to overcome a renewable fuel blend wall. The
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RFS2 Summary and Analysis of Comments
proponents of a mid-level ethanol blend to meet renewable fuel volume mandates fail to properly
consider the interaction of alcohol blends over 10 percent with the large and extensive network
of existing petroleum storage and distribution equipment that is not designed to accommodate
higher ethanol blends. (2328.1, p.4) [[See Docket Number 2328.1, pp.5-8 for a detailed
discussion of the issues]]
Document No.: EPA-HQ-OAR-2005-0161-2358
Organization: Society of Independent Gasoline Marketers of America (SIGMA) and the
National Association of Convenience Stores (NACS)
Comment:
The commenter (2358) states that the proposal to increase production of fuels containing more
than 10% ethanol by providing waivers does not address the practical and legal problems with
selling such fuels. One issue concerns the equipment used to store and deliver fuel to customers.
A second set of issue concerns potential liability resulting from misfueling by customers. The
commenter suggests that the only way to deal with these obstacles is for Congress to pass
legislation insulating retails from liability, but if Congress doesn't act and EPA proceeds with the
waiver, it should accompany the waiver with a notice and comment rulemaking on misfueling.
[[Docket number 2358.1, pp. 12-13]]
Regarding redefining "substantially similar" to allow mid-level ethanol blends, the commenter
states that they do not have sufficient information concerning the chemical and physical
properties of mid-level ethanol blends and the effect such fuels have on emissions to comment
on this issue. [[Docket number 2358.1, p. 15]]
Document No.: EPA-HQ-OAR-2005-0161-2383
Organization: Growth Energy
Comment:
The commenter (2383) is concerned that EPA's preliminary analysis and strategy, as described
in the NPRM, appears flawed in that it fails to fully recognize the extent to which the petroleum
"blend wall" hinders increased production and use of renewable fuels in the United States.
EPA's strategy also relies too heavily on E-85 and flex fuel vehicles, and fails to recognize that
approval and use of mid-level ethanol blends is essential to meeting EISA's mandates. The
commenter believes that EPA should recognize and address the blend wall and also recognize
and address that its reliance on E-85/FFVs is insufficient to meet near-term RFS2 volume
mandates. The commenter urges EPA to support mid-level ethanol blends as the most efficient
and effective way to satisfy EISA's volume mandates. [[Docket number 2382.1, pp. 63-64 and
2380.1, p. 3]] [[See docket number 2382.1, pp. 63-65 for further details of the blend-wall issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP)
Comment:
The commenter (2384) states that in order to comply with the renewable fuel volume
requirements, the industry will need to sell E10+ fuels throughout the country; however, it is not
currently legal given the many federal and state laws governing fuel dispensing facility
infrastructure nor has its safety for the public, workers, or the environment been demonstrated.
[[Docket number 2384.1, p. 10]]
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Chapter 13: Other
The commenter notes the current legal requirements for existing fuel dispensing facility
infrastructure and suggests that the existing retail fuel outlet infrastructure cannot be legally used
to dispense renewable fuels until further action is taken either by a nationally recognized testing
laboratory to test those fuels with existing infrastructure or State Fire Marshals grant a waiver.
[[Docket number 2384.1, p. 8]]
The commenter points out the significant risks to the motoring public, fuel dispensing facility
workers, and the environment of renewable fuels incompatible with fuel dispensing facility
infrastructure. Given the lack of testing of dispenser system components for use with El 5+, the
commenter believes that it is not yet possible to sell these fuels and comply with various legal
requirements. [[Docket number 2384.1, p. 9]]
The commenter encourages EPA to consult with various Federal, State, and local agencies,
associations, as well as other organizations to understand the issues related to the commenter's
infrastructure concerns. [[Docket number 2384.1, pp. 10-11]]
The commenter is concerned with vehicle compatibility with E10+ blends and states that failing
to properly test vehicles with new biofuel blends puts consumers and the environment at risk.
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) concludes that there are no easy answers to the E10 blend wall problem
and encourages the Agency to provide clear and early general waiver notices to all stakeholders
as the blend wall approaches. In addition, under the RFS1 obligated party requirements, some
parties will reach the blend wall well in advance of others. Should this architecture be retained,
the commenter believes that EPA must consider these aspects in its wavier analyses and response
to blend wall issues. [[Docket number 2393.1, p. 19]]
The commenter does not support a "testing tolerance" approach to avoid the full testing and
analysis requirements of a substantially similar (sub sim) waiver. The commenter believes that
such a suggestion is merely an effort to avoid the substantive requirements of the Clean Air Act.
The volume percentage of ethanol in gasoline is readily determined using very accurate
volumetric ratio blending facilities now in place at most blending terminals. [[Docket number
2393.1, p. 28]]
The commenter has reviewed the Application for a Waiver Pursuant to Section 211 (f) (4) of the
Clean Air Act for E-1519 that was submitted to the EPA by Growth Energy on March 6, 2009. In
the commenter's judgment, EPA should reject the current Growth Energy El 5 waiver
application because the technical justification is inadequate. [[See docket number 2393.2,
Attachment 1 for comments on the El5 waiver request.]] The commenter believes that
introduction of El 5 blends is a significant fuel change that will result in oxygen content well
outside the range for which U.S. vehicles and engines have been designed. Therefore, thorough
vehicle and engine studies that develop robust, supportive data are needed to ensure that adverse
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RFS2 Summary and Analysis of Comments
impacts are avoided. [[Docket number 2393.1, pp. 28-29]] [[See docket number 2393.1, pp. 28-
32 and 2393.3, Attachment 2 for further discussion of this issue.]]
The commenter believes that the reasoning behind the Renewable Fuels Association's (RFA)
request for a revised definition of "substantially similar" to allow for El2 blends and for those
vehicle and engine types is flawed. RFA supports its request by claiming that El 2 blends are
substantially similar to fuels used in certified vehicles, but this is an incorrect comparison - by
terms of the statute, the baseline for any comparison is the certification fuel. [[Docket number
2393.1, pp. 32-33]]
The commenter also requests that EPA require new vehicles be certified on El0 as it is clearly
the prevailing fuel in the marketplace. [[Docket number 2393.1, pp. 33-34]]
Document No.: EPA-HQ-OAR-2005-0161-2394
Organization: National Marine Manufacturers Association (NMMA)
Comment:
The commenter's (2394.1) primary issue of concern is EPA's theoretical contemplation of the
various mechanisms and desirability of introducing intermediate, or mid-level, ethanol blends
into the fuels marketplace as a general purpose fuel. The commenter does not believe it is
desirable to move to midlevel ethanol blends. (2394.1, p.2)
The commenter does not oppose the use of ethanol at 10 percent ("E10") or less in gasoline.
There are cases where E10 has negatively and significantly impacted recreational marine engines
and fuel systems, but through education regarding the proper storage of his type of fuel, boaters
are slowly adjusting to managing this fuel in their marine applications. The commenter strongly
encourages EPA to avoid utilizing mid-level ethanol fuel blends as a pathway to achieve RFS
targets. (2394.1,p.2)
The commenter strongly urges the EPA to deny the Growth Energy waiver until a
comprehensive evaluation of marine engines and fuel systems is conducted and the waiver
requirements in the statute have been satisfied. (2394.1, p.3) [[See Docket Number 2394.1, pp.2-
3 for a detailed discussion on the waiver of mid-level ethanol blends.]]
The commenter opposes any redefinition of "substantially similar," as is contemplated in the
proposal. EPA solicits comment on whether it would be appropriate to redefine the regulatory
definition in order to capture mid-level blends such as El 2. The commenter does not believe
such an action is appropriate, and would suggest that any internal agency action not subject to
full public rulemaking with respect to mid-level ethanol blends would circumvent provisions in
the Energy Independence and Security Act of 2007 (EISA), in which Congress clearly expressed
its intention that mid-level fuels be fully studied. (2394.1, p.3)
The commenter noted that EPA solicited comment on the question of whether it is appropriate to
institute a "measurement tolerance" and allow for the sale of El 1. The commenter believes that
this approach is neither appropriate nor helpful in meeting RFS targets, and therefore EPA
should not pursue this. Allowing for El 1, which is not tested, constitutes the first step toward
and incremental creep of intermediate ethanol blends in the absence of a full and meaningful
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Chapter 13: Other
dataset for the fuel on marine equipment and other on-road and non-road engines and vehicles.
(2394.1, p.4)
The commenter also strongly opposes the granting of a so-called "partial" or "conditional"
waiver that would allow the entry of mid-level ethanol blends in the market for general sale.
(2394.1, p.4) [[See Docket Number 2394.1, pp.4-6 for a detailed discussion on this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2408
Organization: Advanced Biofuels Association
Comment:
One of the commenter's (2346) concerns about raising the blend wall is the degradation of
ground level ozone associated with the higher vapor pressure associated with the higher blend.
This is clearly a concern that EPA should weigh heavily in its protection of the public health and
safety. Given that these advanced technologies may be available in the very near future, the
commenter believes that EPA should seriously consider whether they might present a better
environmental and market opportunity in lieu of waiving the current 10 percent blend
requirements. (2346, p.5)
Document No.: EPA-HQ-OAR-2005-0161-2465
Organization: Ford Motor Company
Comment:
The commenter (2465.1) supports a renewable fuel standard as an enabler for the biofuel
industry to expand production and distribution to meet our common energy security, climate
change and economic goals. The goals of the RFS2 program will require a coordinated effort
that:
- adequately informs consumers regarding pending changes to fuels; and
- protects manufacturers in cases of misfueling. (2465.1, p.2)
The commenter also endorses efforts to increase the ethanol content of base level blends beyond
E10 provided collaboration with key stakeholders succeeds in addressing concerns with its use in
the legacy fleet (i.e. vehicles that are on the road today, and that will continue to be on the road
for the next several years, were not designed to operate on ethanol blends greater than 10% by
volume). Expanding non-FFV capabilities beyond 10% by volume ethanol (El5 or E20) starting
on some date certain in the future will help in achieving the RFS2 goals. (2465.1, p.2)
The commenter also noted that to successfully implement the RFS2 program, there is a need to
expand vehicle and infrastructure compatibility in the form of expanding the capability of new
non-FFV vehicles to accommodate ethanol blends beyond 10% by volume, while simultaneously
implementing necessary improvements in refueling infrastructure. (2465.1, p.10)
Document No.: EPA-HQ-OAR-2005-0161-2505
Organization: Shell Oil Products US
Comment:
The commenter (2505.2) does not believe that there is sufficient basis at this time to grant, in
whole or in part, a substantially similar waiver for elevated levels of ethanol in gasoline. There is
considerable ongoing effort to evaluate the potential effects of increased ethanol levels on
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RFS2 Summary and Analysis of Comments
automobile emission control devices through the Coordinating Research Council. The
commenter believes that EPA will not have sufficient data to consider the petition until such time
that work is completed. EPA should also recognize that the blendwall is fast approaching and
approving higher levels of ethanol in gasoline by issuing a substantially similar waiver is not a
"silver bullet" solution. (2505.2, p. 16)
Document No.: EPA-HQ-OAR-2005-0161-2309
Organization: Grocery Manufacturers Association, National Council of Chain
Restaurants, and Snack Food Association
Comment:
Commenter [[2309]] urges EPA to oppose proposals by some corn ethanol companies to increase
by 50 percent the amount of corn ethanol that can be blended into gasoline. [[#2309.l.p.2]] Bob
Our Response:
Comments related to the potential introduction of a mid-level ethanol blend for use in
conventional vehicles (or a subset of conventional vehicles) will be addressed in EPA's response
to the petition that EPA grant a waiver to allow the use of a mid-level ethanol blend in
conventional vehicles.
13.4.4 General Waiver Authority
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
The commenter (2233) stated that EPA needs to be proactive in initiating waivers in order to
fairly treat obligated parties and maintain market stability. Failure to issue timely of proactive
waivers will risk the inability of the entire industry to comply and a complete collapse of the
RFS2 program.
The commenter believes that EPA must immediately begin preparations for changing the
regulations and granting appropriate waivers to keep the RFS2 program from becoming
uncomplyable. EPA can not wait until a large number of obligated parties end a year in a RIN
deficit position. The one year RIN deficit carryover provision should be designed to help
individual company compliance not as a temporary patch for an infeasible biofuels program. It
is illegal for EPA to establish a program where compliance is impossible. [[Docket number
2233.2, pp. 19-20]]
Document No.: EPA-HQ-OAR-2005-0161-2129
Organization: Clean Air Task Force, Environment America, Environmental Working
Group, Friends of the Earth, National Wildlife Federation, Natural Resources Defense Council,
Sierra Club, Union of Concerned Scientists, The Wilderness Society and World Resources
Institute
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Chapter 13: Other
Comment:
The commenters (2129.1) noted that EPA has the authority under Section 211(o) of the Clean
Air Act to issue a waiver that decreases the volume of renewable fuels required under the RFS in
order to avoid severe environmental harm. The production of renewable fuel can be harmful to
water quality, water quantity, biodiversity, soil health, and the climate, but it can also be done in
a way that is beneficial to these natural resources. If it can be demonstrated that the RFS
mandate is driving increased production of biofuels in a way that damages these resources, this
would provide a basis for granting a waiver from the RFS. The EPA Administrator could target
of the use of the waiver authority by decreasing the quantity of environmentally damaging
conventional biofuels, such as corn ethanol, that is required under the RFS2, without reducing
the volumes those types of biofuels that are not found to cause the same level of environmental
damage. (2129.1, p. 12)
The commenters are particularly concerned with environmental harm because a significant
amount of ethanol will be grandfathered in this rule and will not have to comply with the GHG
reduction requirement. Even if EPA adopts an appropriately narrow interpretation of the EISA's
grandfathering provisions, approximately 13 billion gallons of corn ethanol will still be
grandfathered under the RFS 2, which could result in the adverse climate and water quality
effects. Both of the major environmental problems associated with corn ethanol- nitrogen
pollution and GHG emissions - would provide bases for granting a waiver from the RFS.
(2129.1, p.12)
Document No.: EPA-HQ-OAR-2005-0161-2138
Organization: American Meat Institute, National Chicken Council, National Turkey
Federation, Farm Econ LLC
Comment:
Commenter [[2138]] states our energy supply is currently based largely on petroleum and other
fossil fuels. Annual variation in production of these fuels is very small compared to U.S. corn
and soybeans. As the chart below shows year-on-year variation for both feedstock crops dwarfs
the variability of both U.S. and global crude oil production. The potential consequences of this
risk of production variation for the U.S. food and fuel economy are becoming more significant as
the RFS grows and we become more dependent on agriculture for our fuel supply. More
importantly, the RFS also creates inflexibility in the use of key crops for food versus fuel uses.
In the event of a major crop production failure an unchanging RFS would force a
disproportionate share of the adjustment on the food production sector. In the interest of
transparency and market certainty we would strongly suggest that USDA and EPA establish
published guidelines for adjustments to the RFS in the event of a shortage of biofuel feedstocks,
most importantly corn and soybeans. This would offer all commodity users, including ethanol
producers, a degree of certainty missing in the current RFS adjustment mechanism. We believe
that such a system would fall within the language of EISA and the intent of Congress. [[2138
p.3]]
Document No.: EPA-HQ-OAR-2005-0161-2248
Organization: logen Corporation
Comment:
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RFS2 Summary and Analysis of Comments
The commenter (2248.1) believes that EPA should give consideration to the significant potential
for the market forces to play out in such a way as to resolve the blendwall without regulatory
relief. If EPA wants to encourage market forces that can assist with its not insignificant efforts to
address the challenges posed by the blendwall, it should make clear in the final RFS rule that
high RIN prices alone would not constitute sufficient grounds for the government to waive the
RFS. (2248.1, pp.9-10)
Document No.: EPA-HQ-OAR-2005-0161-2107
Organization: Goldsboro Milling Company
Comment:
The commenter (2107.1) would like to remind EPA that there remains no provisions in the RFS
program that provide a safety net in the event of a corn supply shortfall or emergency. Without a
safety net or the ability to predict Mother Nature, these policies continue to be inflexible
mandates that have and will again cause devastating effects on consumers, producers, rural
businesses, and even government feeding programs that rely livestock, poultry, and dairy
products. (2107.1, p.2)
Our Response:
The issues raised by the commenters are outside the scope of the RFS2 rulemaking itself,
but rather relate to potential future waivers of the RFS2 standards. EISA provides general
waiver authority for the RFS2 standards similar to that provided for the RFS1 standards under
EPAct 2005, as well as waiver authority specific to the biomass-based diesel standard and the
cellulosic biofuel standard. This waiver authority will be exercised in the future as necessary and
appropriate, and the nature of any waiver action taken will be determined based on the specific
situation at the time. In the past EPA received a waiver petition for the RFS1 standards from the
State of Texas. While we denied that petition, our response to it (73 FR 47168, August 13, 2008)
provides guidance for future waiver petitions. Approval of a general waiver petition would
impact the national RFS program even though a petition may be based on severe economic harm
or severe environmental harm to a State, a region, or the U.S. as a whole, or inadequate domestic
supply. Any petition for a waiver will be evaluated based on the sufficiency of information
provided and merit of the petition. The guidance indicates that EPA will look for an applicant's
petition to include information and robust analyses that address the impacts of implementing the
RFS and the nature and degree of harm associated with the impacts of the RFS. The Agency
may grant a waiver under its general waiver authority for no more than one year unless renewed
by the Administrator, and suggests that an applicant's petition be received at least six months
prior to the requested start date of the requested waiver or three months prior to termination of a
waiver if renewal is desired.
13.4.5 EPA Requirements for E85 Blenders and Compositional Gasoline Blendstocks Used
to Manufacture E85
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2393
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Chapter 13: Other
Organization: American Petroleum Institute (API)
Comment:
The commenter (2393) strongly urges EPA to include, as EPA suggests, a separate section in the
RFS2 discussing the rules for production of E85. The commenter believes that there are a
sufficient number of issues raised by the overlap of regulations governing the manufacture and
distribution of gasoline (some are raised by EPA in this rulemaking) to justify such an
undertaking. In addressing E85, the commenter urges EPA to focus on:
1. The RFS2 NPRM statement: "The RFC and anti-dumping regulations currently require
certified gasoline to be blended with denatured ethanol to produce E85." The commenter
can find no explicit mention of this in the RFC or anti-dumping regulations nor any
support for it.
2. The need for an E85 producer to register as a refiner.
3. Assurance that if E85 is made from a blendstock that is not finished gasoline, that the
blending of the blendstock, vapor pressure enhancing material and ethanol does not
produce an obligation for registration as a refiner under either RFC or the RFS or any
other gasoline regulatory program.
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) objects to an E85 producer registering as a refiner. (2124.1, p.21)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
EPA states that the RFC and anti-dumping regulations currently require certified gasoline to be
blended with denatured ethanol to produce E85. The commenter believes that EPA is incorrect
in this interpretation. The hydrocarbon blend components for producing E85 do not have to meet
gasoline regulations. This hydrocarbon blending component does not have any RFC and anti-
dumping standards. The commenter also believes that EPA incorrectly states that if terminal
operators add blendstocks to finished gasoline for use in manufacturing E85, the terminal
operator would need to register as a refiner with EPA and meet all applicable standards for
refiners. The commenter points out that ethanol producers are currently blending finished
gasoline to produce E85 and EPA does not require them to register as refiners. EPA needs to
treat terminal operators and ethanol producers in an equivalent manner when they blend E85.
[[Docket number 2233.2, pp. 22-23]]
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter recommended giving E85 manufacturers who use blendstocks the maximum
possible flexibility to blend ASTM compliant E85 using the lowest cost blendstocks, to help
ensure a plentiful supply of competitively priced E85. [2132]
Document No.: EPA-HQ-OAR-2005-0161
Organization: Magellan Midstream Partners
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Comment:
The commenter states that as a matter of fairness, E85 manufacturers who use blendstocks like
butane to produce E85 should be required to fully comply with EPA's refiner requirements.
Our Response:
EPA's policy regarding the registration of E85 blenders and the compositional
requirements for the gasoline blendstocks used in the manufacture of E85 is outside the context
of this rule.
13.4.6 Other Comments Outside Scope of the Rule
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2143
Organization: New York State Department of Environmental Conservation
Comment:
The commenter suggests that the new vehicle and engine certification needs to be modified to
reflect the use of ethanol and E85. (2143.2, p.ll)
Document No.: EPA-HQ-OAR-2005-0161-2393
Organization: American Petroleum Institute (API)
Comment:
The commenter requests that EPA clarify the legality of the use of retail blender pumps for
dispensing blends between E10 and E70. [[Docket number 2393.1, p. 70]] [[See docket number
2393.1, pp. 69-70 for discussion of this issue.]]
Our Response:
The potential need to modify EPA's vehicle and engine certification requirements
associated with the use of ethanol and E85 is outside the context of this rule.
Regarding the comment on the legality of the use of retail blender pumps, EPA issued
two letters regarding the status of blender pumps dispensing such ethanol blends. These letters
state that the fuel dispensed from such pumps may only be used in flexible fuel vehicles.3 EPA
intends to evaluate whether additional EPA labeling requirements are needed for such blender
pumps outside that context of this rule. We deferred the consideration of such potential labeling
requirements until after EPA completes its evaluation of the petition to allow El 5 blends to be
used in conventional fuel vehicles since the decision on this petition may impact the text on the
labels.
13.5 Other
3 Letter from Adam Kushner, EPA to Bob Greco, API, dated July 31, 2008. Letter from Margo Oge, EPA, to
Dawna Leitzke, South Dakota Petroleum and Propane Marketers Association, dated Nov 28, 2006.
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Chapter 13: Other
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2020
Organization: European Commission
Comment:
The commenter (2020) believes that the U.S. and EU should use procedures and definitions that
as similar as possible in terms of sustainability and GHG requirements for biofuels, this will
facilitate the trade between the two jurisdictions. (2020.1, p.3)
Our Response:
Many aspects of the RFS program were mandated by statute, including the definitions
and GHG thresholds for renewable fuels. However, we agree that it would be beneficial to
coordinate on other aspects of biofuels, such as lifecycle modeling, data and assumptions and
tracking of sustainability measures for renewable biomass used to produce renewable fuels.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2124
Organization: National Petrochemical and Refiners Association (NPRA)
Comment:
The commenter (2124.1) understands that EPA's current interpretation of 40 CFR 80.78(a) (5)
and (7) is that this regulatory section prohibits the addition of ethanol to a commingled mixture
of RBOB and conventional gasoline (or "CBOB" blendstock material). The commenter proposes
that the prohibitions in §80.78(a) (5) and (7) be appropriately changed to allow RBOB to be
added to a tank of CG (or a tank of CBOB blendstock material) before the addition of ethanol at
the terminal rack for sale in a conventional gasoline market. The additional flexibility being
requested here would be most helpful in two areas: (1) achievement of the mandated renewable
fuel mandates in RFS1, and the soon to be promulgated RFS2, and (2) help in relieving
distribution and supply issues that occur unexpectedly, as well as during natural disasters such as
during hurricane season. (2124.1, p. 40-41)
Document No.: EPA-HQ-OAR-2005-0161-2384
Organization: BP America (BP)
Comment:
Regarding the need for EPA to allow commingling of RBOB and conventional gasoline, the
commenter (2384) points to issues with the sequence of commingling at §80.78(a) (5) and (7) and
provides suggestions to allow for flexibility. [[Docket number 2384.1, pp. 12-13]]
Our Response:
The regulations cited in the comment do prohibit blending RBOB with, among other
things, conventional gasoline or conventional gasoline blendstock. This is necessary, among
other reasons, to assure that RBOB is blended with the proper amount and type of oxygenate, as
directed by the refiner. After that blending takes place, the reformulated gasoline may be
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distributed for use in RFC areas but may also be distributed into conventional gasoline areas. If
blending with conventional gasoline or blendstock were allowed, the resultant product could not
be sold as RFC and the refiner(s) who produced the RBOB would be giving themselves
inappropriate credit for having produced RFC containing a certain amount of ethanol. The
regulations do not currently have provisions for CBOB. There are only the provisions in
§80.101 (d) (4) (and related provisions in the Gasoline Sulfur rule and the Mobile Source Air
Toxics (MSAT) rule) relating to when a refiner is allowed to count downstream added oxygenate
in its anti-dumping compliance calculations. There are not regulations for CBOB that could be
used to account for CBOB in fungible, complex distribution systems. To the extent that the
commenters seek changes to existing regulations other than those implementing section 211 (o),
those comments are outside the scope of this rulemaking.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2521
Organization: Conservis Corporation
Comment:
The commenter (2521.1) noted that they are aware of certain industry challenges to the proposed
rules on the grounds that the mandate would create an untenable information management
burden to industry, and that implementation of the rules would be technologically infeasible. We
respectfully submit that neither concern is well-founded. The commenter's compliance platform
is currently being configured to work with the EPA's EMTS system for managing all aspects of
the Renewable Identification Number (RIN) program. The commenter understands the many
challenges that exist in implementing the Renewable Land Source Tracking Program. The
commenter's compliance software is readily adaptable to meet the mandates of the Renewable
Land Source Tracking Program, including registering land source uses with supporting
documentation and, if desired, satellite imagery verification. If EPA would like to see this, the
commenter would be pleased to demo the software any time. (2521.1, pp.1-2)
Our Response:
EPA has attempted, as the commenter notes, to adopt feasible information management
requirements. The final rule has adopted requirements that producers or importers of renewable
fuel provide mapping data for plots of land where certain types of feedstocks are harvested,
except to the extent that their feedstock is verified as renewable biomass through the aggregate
approach.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-1036
Organization: Vision FL I, LLC
Comment:
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Chapter 13: Other
The commenter (1036.1) advises that EPA considers changing Tables III.A-1, and III.A.2-1 to
reflect a stronger focus on GHG reductions, and not fuel category definitions as it currently
stands. (1036.1, p.2)
Document No.: EPA-HQ-OAR-2005-0161-2233
Organization: Marathon Petroleum Company (Marathon)
Comment:
Referring to the review of EPA's RFS2 DRIA performed by the American Petroleum Institute
(API), the commenter (2233) points to concerns with the DRIA's assumed renewable fuel types,
fuel volumes, vehicle technology changes, and emission levels. [[Docket number 2233.2, p. 61]]
[[See docket number 2233.2, pp. 60-63 for an extensive discussion of this issue.]]
Document No.: EPA-HQ-OAR-2005-0161-2147
Organization: Engine Manufacturers Association
Comment:
The commenter (2147.1) suggests that the final rule clarify that production requirements for
renewable fuel volumes imposed by the regulation do not circumvent EPA's regulatory controls
in place for gasoline or diesel fuel finished fuels. (Page 11)
Our Response:
We appreciate the commenters' concerns and comments, and we note that these items are
responded to throughout the RIA and preamble to the final rule. Regarding the comment that
EPA should change Tables III.A-1 and 2, please see Section II of the preamble (as well as
§80.1426 of the regulations) for a discussion on changes to D codes and D code definitions.
With regard to concerns with assumptions made in the Draft RIA, please see the Final RIA for a
discussion on our analysis regarding these items.
What Commenters Said:
Document No.: EPA-HQ-OAR-2005-0161-2308
Organization: Environmental Defense Fund
Comment:
The commenter (2308.1) would like to state that ultimately the most effective tool to address
emissions from tropical deforestation is the enactment of federal legislation and an international
framework that compensate developing countries for reducing all emissions from deforestation
and degradation. (Page 2)
Document No.: EPA-HQ-OAR-2005-0161-2048
Organization: BioPure Fuels
Comment:
The commenter (2048.1) recommends that EPA work to develop a guidance document for the
sugar cane ethanol industry that suggests best practices for conversion of sugar cane to biofuel
from an analysis of best available technology. This guide would immediately be used by the
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U.S. and global sugar cane industry to achieve maximum biofuel production from all cane
biomass that leads to the best possible carbon benefits. (2048.1, p. 10)
Document No.: EPA-HQ-OAR-2005-0161-2155
Organization: Petroleum Marketers and Convenience Stores of Iowa (PMCI)
Comment:
The commenter (2155.1) believes that legislative solutions must be formulated in order to limit
the liabilities put upon the retailer for those situations where an end-user places the fuel in a non-
FFV which is not warranted for such a fuel. Furthermore, additional protections will be
necessary for the equipment dispensing blends greater than E10. (2155.1, p.3)
Document No.: EPA-HQ-OAR-2005-0161-2132
Organization: Alliance of Automobile Manufacturers
Comment:
The commenter (2132.1) thinks that EPA's analysis of the current and future renewable fuel
markets and the associated impacts of various scenarios to be commendable, especially
considering the number of very complex and novel issues and the short amount of time available
to conduct the analyses. The annual rulemaking process will allow EPA to adjust its volume
targets as needed for the renewable fuel industry's production capabilities. (2132.1, p.7) [[See
Docket Number 2132.1, pp.24-25 for a detailed discussion of this issue]]
Our Response:
We appreciate the commenters' concerns and comments, however these comments are
not germane to finalizing the RFS2 final rule. Other government programs are designed to help
assess and develop fuel and feedstock technology, and legislative measures are outside the scope
of EPA's authority for this rule.
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