Regulation of Fuels and Fuel Additives:
Modifications to Renewable Fuel
Standard Program
Response to Comments
&EPA
United States
Environmental Protection
Agency
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Regulation of Fuels and Fuel Additives:
Modifications to Renewable Fuel
Standard Program
Response to Comments
Compliance Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
United States
Environmental Protection
Agency
EPA-420-R-13-010
September 2013
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Regulation of Fuels and Fuel Additives: Modifications to Renewable Fuel Standard Program
EP A-HQ-O AR-2012-0223
Response to Comments Received
I. Overview
This rule was originally issued on October 9, 2012 as a direct final rule and parallel
proposed rule including an amendment to the definition of heating oil in the RFS program.l
EPA received adverse public comment and withdrew the direct final rule on December 6, 2012,
finalizing only the parts of the rule not related to the new definition of heating oil.2 This
document summarizes and responds to all comments received in relation to the heating oil
provision of the proposed rule. The public comments summarized in this document can be
viewed online at www.regulations.gov. The public docket for this rulemaking is docket number
EP A-HQ-O AR-2012-0223. EPA appreciates all comments received on this issue, and has taken
all of them into consideration in development of the final rule.
In the proposed rule, EPA amended the definition of "heating oil" in the regulations for
the Renewable Fuel Standard ("RFS") program under section 21 l(o) of the Clean Air Act. This
amendment expands the fuels included in the definition of heating oil to include any fuel oil
produced from qualifying renewable biomass that will be used to generate heat to warm
buildings or other facilities where people live, work, recreate, or conduct other activities. Fuel
oils used to generate process heat, power, or other functions are not included in this additional
category of heating oil. Producers or importers of fuel oil that meets the amended definition of
1 See_Direct Final Rule, EP A-HQ-O AR_2012-0223; FRL 9733-3, at 77 FR 61281 (October 9, 2012); and see
parallel Proposed Rule, EP A-HQ-O AR-2012-0223; FRL 9733-4, at 77 FR 61313 (October 9, 2012).
2 See Withdrawal of direct final rule, EP A-HQ-O AR-2012-0223; FRL-9758-8, at 77 FR 72746 (December 6, 2012).
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heating oil will be allowed to generate Renewable Identification Numbers ("RINs") for the
heating oil, provided that their product meets all other requirements specified in the RFS
regulations. All fuels previously included in the definition of heating oil continue to be included
as heating oil for purposes of the RFS program.
II. Supportive Comments
Commenter: Ensyn
Document Number: EPA-HQ-OAR-2012-0223-0012
Summary: Ensyn is currently producing a renewable fuel oil (RFO) used in industrial boilers,
district heating and steam loops, and similar systems that control space heat. Ensyn has an
existing stock of over 3 million gallons. Ensyn believes this will be the first certification and sale
of any commercial scale cellulosic RIN-generating renewable fuel. Ensyn has plans to develop
multiple facilities in US and Canada to produce RFO, and if this rule is finalized, will be able to
generate more cellulosic RINs. Each facility will create 125 construction jobs and 189 permanent
jobs in economically depressed regions, and will add value to US domestic timber and pulp and
paper industries. The ability to generate RINs is needed so that RFO has long-term viability.
Ensyn supports the rule's compliance provisions as a quality control measure that will support
the integrity of the RIN market. Ensyn hopes for a streamlined and efficient registration process.
Commenter: Crane & Co.
Document Number: EPA-HQ-OAR-2012-0223-0009
Summary: Crane is a manufacturer of cotton-based paper products and has tested RFO from
Envergent to fire boilers that heat facilities and power industrial processes. Testing has
encouraging results. Crane believes RFO use reduces GHG emissions by 80% compared to
petroleum fuel and has no noxious emissions. Under the new rule, Crane's use of RFO will
positively impact its business because RINs will add value and reduce energy costs, could
stabilize the company's fuel costs, and would allow Crane to spend locally for fuel. Crane hopes
for a streamlined and efficient registration process.
Commenter: Red Arrow Products
Document Number: EPA-HQ-OAR-2012-0223-0013
Summary: Red Arrow is a food flavor producer that also generates liquid fuels from a conversion
of biomass, and is also a consumer of RFO. Red Arrow has partnered with Ensyn Corporation to
produce RFO that it believes will qualify as renewable fuel under the revised definition of
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heating oil in this rule. Red Arrow estimates that it could produce 1.5 million gallons of RFO in
2013. Red Arrow has used RFO in its facilities for ambient temperature control and is using
other by-products from the renewable fuel production process for temperature control. The
company considers these temperature control processes both cost effective and energy efficient.
Commenter: Fagen Inc.
Document Number: EPA-HQ-OAR-2012-0223-0014
Summary: Fagen is a green energy design-builder that contracts for renewable energy and
renewable fuel facilities. Fagen is considering projects that would begin construction as a result
of this rule, and estimates such activities would create!25 near-term construction jobs and almost
200 permanent jobs per project.
Commenter: Seven Islands Land Company
Document Number: EPA-HQ-OAR-2012-0223-0015
Summary: Seven Islands is a major landowner in the Northeast and believes woody cellulosic
waste products can be turned into fuels. This rule would add significant potential value to the
forest product and timber service chain. Seven Islands is considering partnering with Ensyn on
development and construction of facilities to produce RFO. The partnership could bring up to
$100 million of direct investment to the region, 125 near-term construction jobs and almost 200
permanent jobs. The rule would also reduce reliance on petroleum products, reduce greenhouse
gas emissions and provide an economic boost to the timber industry.
Commenter: Green Diamond
Document Number: EPA-HQ-OAR-2012-0223-0017
Summary: Green Diamond is considering development of facilities with Ensyn that could bring
up to $100 million of direct investment to the region, 125 near-term construction jobs and almost
200 permanent jobs. Ensyn has an existing stock of over 3 million gallons.
Commenter: Chevron
Document Number: EPA-HQ-OAR-2012-0223-0016
Summary: Chevron is an obligated party under the RFS, as well as a refiner and marketer of
petroleum products. Chevron believes the current heating oil definition is overly restrictive and
this amendment will allow for greater innovation and competition within the renewable fuels
industry. The expanded definition would enable obligated parties to offer alternative fuel
products to their customers. Chevron is encouraged by the quality control measures offered by
the proposed rule's reporting, PTD, and recordkeeping requirements. Chevron remains
concerned about other issues in the RSF2 program but supports this action.
Commenter: Envergent Technologies, LLC
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Document Number: EPA-HQ-OAR-2012-0223-0018
Summary: Envergent is a joint venture of Ensyn and UOP (a Honeywell subsidiary). Its mission
is to commercialize a technology called rapid thermal pyrolysis (RTF), which converts non-food
based feedstock into renewable fuel oil (RFO). Envergent's modular refining units can produce
renewable fuels and heating oil. With upgrades, these units could produce economically
competitive transportation fuel. UOP and Ensyn are ready to produce millions of gallons of
renewable cellulosic fuels. The amendment would level the playing field for RFO with No. 1,
No. 2, and non-petroleum diesel blends currently qualifying as heating oil. The amendment
would advance commercialization of RFO and lead to a higher volume of cellulosic biofuels in
the market. Envergent supports compliance regulations that ensure integrity of RINs and hopes
for a streamlined and efficient RIN program.
Commenter: Boise, Inc.
Document Number: EPA-HQ-OAR-2012-0223-0019
Summary: Boise is interested in seeing woody, biomass-based resources used to produce
cellulosic fuel. Boise believes the technology to use lower-grade wood feedstocks for renewable
fuel is within reach. This process would not involve the higher-quality whitewood grades used in
papermaking. Boise believes a biorefming facility can drive tens of millions of dollars in local
investment and create significant numbers of jobs. Boise has a prospective partner who currently
produces RFO at a commercial scale that would qualify for the generation of cellulosic RINs.
Commenter: Honeywell
Document Number: EPA-HQ-OAR-2012-0223-0020
Summary: Honeywell and UOP (its wholly-owned subsidiary) support the expanded definition
of heating oil. The expanded definition corrects unnecessary limitations imposed by the current
definition and would spur cellulosic biofuel production and the generation of RINs from such
fuel. The modified definition would advance the goals of EISA, spur innovation in the market,
and increase production and use of renewable fuels. Deployment of Honeywell's RTF
technology and similar technologies would introduce new sources of fuel production, create
domestic jobs, and secure America's energy independence. Honeywell supports EPA's approach
to assure compliance as a reasonable framework for quality control and to build integrity and
trust in the market.
Commenter: Biomass Thermal Energy Council (BTEC)
Document Number: EPA-HQ-OAR-2012-0223-0036
Summary: BTEC is an association of biomass fuel producers, appliance manufacturers, supply
chain companies, and non-profit organizations that promotes biomass thermal energy. BTEC
believes that in the Northeast, the best and most cost-effective way to achieve the RFS goals is to
reduce reliance on #2 heating oil by substituting it with locally-produced biofuels, including
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solid biofuels made from biomass. The Midwest and Northwest would benefit also. In the
Northeast, consumers use 84% of the entire U.S. supply of heating oil. The region consumes 5.5
billion gallons of heating oil each year. The Northeast could reduce its heating oil consumption
by 1.14 billion gallons annually by converting 25% of thermal energy generated from oil to
woody and non-woody biomass and other renewable sources. This opportunity exists without the
need for additional infrastructure.
Commenter: Representative Suzanne Bonamici, Congress of the United States,
House of Representatives
Document Number: EPA-HQ-OAR-2012-0223-003 8
Summary: Representative Bonamici believes the amended definition of heating oil would benefit
multiple industries and constituencies in Oregon. The amended definition achieves
Congressional intent "to move the United States toward greater energy independence and
security (and) to increase the production of clean renewable fuels." This rule encourages
innovation and investment in renewable fuels and also adds value to a struggling timber and
wood-products industry.
Response:
EPA appreciates the support received from these commenters during the development of the
final rule. By expanding the types of fuel that are considered "heating oil" and that can generate
RINs, we believe this rule will promote the goals of the RFS program, including the increased
production and use of fuels that reduce emissions of greenhouse gases compared to fossil fuels.
In response to BTEC's comments, we point out that the final rule specifies only liquid fuels are
included in the expanded definition of heating oil. Solid and semi-solid fuels would not qualify
as "heating oil" and therefore, for RFS purposes, would not be renewable fuels capable of
generating RINs.
III. Clarification or Non-responsive Comments
Commenter: B. Partanen
Document Number: EPA-HQ-OAR-2012-0223-0010
Summary: Mr. Partanen states that there are over 10,000 buildings in New York City that burn
#6 fuel oil, but this fuel oil will not qualify for RINs because the proposed definition of heating
oil requires that the fuel oil be capable of flowing at 60 degrees F and 1 atmosphere of pressure.
Industrial applications are also eliminated by this regulation. Mr. Partanen questions why the
definition of fuel oil is so restricted.
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Response: Renewable fuel oils qualifying as heating oil under the new definition must be "fuel
oil", i.e. a liquid substance, and may not be solid or gaseous substances. The restrictions in the
definition (that it be a liquid at 60 degrees and one atmosphere of pressure and contain no more
than 2.5% solids) are needed to make sure that the products used are indeed a "fuel oil" as that
term is commonly defined. It is important to note that it is likely that most of the #6 fuel oil
referred to by this commenter currently being used in New York buildings is not produced from
renewable sources and therefore would not qualify for RIN generation even if it met all other
elements of the definition.
Commenter: L. Geraci
Document Number: EPA-HQ-OAR-2012-0223-0011
Summary: Mr. Geraci requests EPA remove or suspend the requirement for 10% ethanol in fuel.
Response: This comment is not responsive to this rulemaking.
IV. Adverse Comments
Commenter: Global Renewable Strategies and Consulting, LLC (GRSAC)
Document Number: EPA-HQ-OAR-2012-0223-0022
Summary: GRSAC is a new compliance and consulting company. While agreeing that the
modified definition of heating oil is warranted, GRSAC submits a number of comments and
specific suggestions regarding the amended definition of heating oil. GRSAC asserts that the
affidavit requirement is excessive and EPA does not have sufficient resources to administer the
additional reporting requirements. Producers/refiners cannot determine end use at the time of
production. The documentation required from an end user for registration and RIN generation is,
thus, not relevant and not warranted. The end use of the fuel will displace petroleum and reduce
CO2 emissions, so use should not be restricted. EPA should allow fuel oils to be used for power
generation. All parties who transfer the fuel should be liable for improper end use, not just the
producer. EPA should require any party who transfers fuel designated as heating fuel to report to
EPA. The definition should clarify the feedstocks and pathways that apply, i.e., how RINs will
be generated. The proposed definition may j eopardize life, safety, and the environment and
should reference ASTM standards for fuel oils.
GRSAC makes a number of specific suggestions for regulatory language, all of which were
considered by EPA in the development of the final rule. These suggestions include: adding
references to ASTM fuel oil standards; a third definition suggestion; and defining "end user,"
"documents," and "provider."
Response: Regarding tracking fuel use and recordkeeping, EPA has identified numerous reasons
for tracking end use of fuel oils used as heating oil. The affidavit requirement ensures proper use
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as heating oil and must be traceable to the producer because the producer is the party who is
responsible. Producers will need to put into place sufficient controls on these fuel oil products in
order to use the expanded definition. EPA is statutorily required to restrict the use of these fuels
to heating or fuels sold as heating oil, so the definition cannot be expanded to include any and all
end uses. Producers of renewable fuel oil to be used as heating oil must identify existing
customers at the time of registration. While this tracking places a recordkeeping and reporting
burden on producers, it is absolutely necessary for EPA to ensure that the fuel oils are used for
the proper purpose.
Regarding the suggestion to expand compliance provisions to parties other than the RIN
generator, EPA believes that since this definition is a restriction on a fuel producer's ability to
generate RINs, the fuel producer alone is responsible for tracking actual end use. Placing this
responsibility on additional intermediary parties is unnecessary and does not make sense in the
context of the program.
Regarding the applicable pathway(s) for the expanded definition of heating oil and concerns
regarding fuel quality, any approved heating oil pathway can be used for RIN generation. This is
further discussed in the preamble to the final rule. The CAA, as amended by EISA, defines the
renewable fuels in terms of their feedstock and their lifecycle greenhouse gas emissions relative
to the fossil fuel they replace. Additional environmental assessment of fuel oil for use as heating
oil would not be relevant to determining compliance with the CAA requirements for meeting the
RFS definition of renewable fuel. EPA does not believe it appropriate to limit use of fuel oils as
heating oils to only those fuel oils that meet ASTM specifications, for the same reasons, as such
a limitation is not relevant to determeining compliance with the CAA requirements for meeting
the definition of renewable fuel - that the fuel is derived from renewable biomass and meets the
appropriate lifecycle assessment threshold. The specifications adopted by EPA are solely for the
purpose of restricting the renewable fuel to a heating oil, as compared to a solid or gaseous fuel.
This is to be consistent with the term Congress used, home heating oil.
Regarding the suggestion that the newly allowed fuel oil should not be restricted to use as
heating oil, this restriction is a necessary control measure for this expansion because this type of
fuel oil is not commonly known or sold as heating oil. The only reason such a restriction is not
placed on the types of fuel currently covered by the definition of heating oil is that those fuels are
commonly known as and sold for use as heating oil, so additional control and compliance
measures are not required.
Commenter: Colonial Pipeline Company
Document Number: EPA-HQ-OAR-2012-0223-0023
Summary: Colonial Pipeline Company ("Colonial") is concerned that the new definition of
heating oil will create additional segregations of fuel meeting the same specification
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requirements. The designation of home use (versus commercial use) would have to be tracked
from the point of blending to the end user. Colonial believes that using a single specification for
heating oil would add significant efficiencies to the distribution system, and that the requirement
of use in homes is overly restrictive.
Response: The use of the fuel oil for heating spaces is not restricted to "homes", but could apply
to a number of structures where people live, work, and recreate. While using a single
specification for heating oil might make tracking through the distribution system simpler, it
would not fulfill Congress' limitation of renewable fuel to "home heating oil." As discussed in
the preamble to the final rule, EPA is reasonably interpreting this term as including fuel oils used
to heat homes or other spaces occupied by people. Expanding it to include all commercial fuel
oils would not be consistent with this limitation. Furthermore, we expect that much if not most of
the fuel oil that will meet the expanded definition of heating oil will be drop-in fuel and will
therefore not have an adverse effect on the efficiency of fuel pipelines or cause designation and
tracking confusion.
Commenter: Viesel Fuel
Document Number: EPA-HQ-OAR-2012-0223-0024
Summary: Viesel Fuel ("Viesel") is a biomass-based diesel producer that uses restaurant waste
grease as a feedstock. Viesel's product does not meet the ASTM D6751 standard. Viesel
supports the expanded definition of heating oil because it will expand the pool of biofuel
technologies and increase the volume of biofuels. However, it has concerns about the
requirement that the fuel producer show evidence of "existing customers" through affidavits.
Viesel presumes that regulation requiring affidavits from "existing customers" simply means
"final end users." Viesel also believes this affidavit requirement poses potential confusion and
that many customers will not sign affidavits for fear of legal ramifications that, for example, a
calculation could be off and lead to RIN invalidation. Large institutional customers (universities,
hospitals, government entities) have expressed concerns over signing affidavits. Fuel distributers
will not want to make their customers sign affidavits and customers will not be knowledgeable
enough to provide the required information. Trying to maintain records of the fuel's use would
be nearly impossible. Viesel recommends that instead of affidavits from end users, the product
transfer document (PTD) associated with the fuel containing a statement restricting the fuel's use
should suffice as a restriction on end use.
Viesel states that the quarterly reporting requirements (including quarterly affidavits from end
users) would be "nearly impossible". Even large institutional customers will find the quarterly
reports overly burdensome and will refuse to sign affidavits. PTDs regarding the volume of fuel
transferred and the percent blended should be sufficient to ensure the fuel is being properly used.
If PTDs are not between producers and end users, contracts should be a sufficient alternative
means of proof.
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Response: The new registration provisions require producers to identify "existing end users" (not
"customers") at the time of registration. This assures the Agency that the party who will be
consuming the fuel is using it or intends to use it for the proper purpose and therefore that RINs
generated from production of that fuel are valid. The affidavit requirement also provides a
mechanism for EPA to follow up and track actual end use if necessary. Producers who have not
identified any end users for their product will not be able to produce fuel oil for use as heating oil
and generate RINs.
This does not mean that the end users must exist at this point in time; only that they exist at the
time the fuel producer submits its registration for the fuel oil to EPA. If a producer cannot obtain
the affidavits from the end users, it must be prepared to retire the RINs generated for the fuel.
EPA knows of producers who have customers who are the end users and are willing to sign such
affidavits. Based on knowledge of those relationships, EPA believes producers will be able to
comply with this requirement, although it may make registration somewhat more burdensome
than it would be without this requirement. These requirements are necessary and tailored to be as
least restrictive as possible while ensuring compliance. The PTD requirement for fuel oil is not in
itself sufficient to ensure that the end user has complete notice and has accepted its responsibility
to use the fuel oil for the appropriate heating application only.
Similarly, EPA has found that the additional reporting requirements (including quarterly
affidavits from end users) are necessary and tailored to be as least restrictive as possible while
ensuring compliance. PTDs must accompany the fuel oil from production to end use; contracts
are not interchangeable with PTDs but are additionally required for recordkeeping.
Commenter: Triton Energy, LLC
Document Number: EPA-HQ-OAR-2012-0223-0033
Summary: Triton Energy is a biomass based biodiesel producer in Indiana whose fuel does not
meet ASTM D6751. Triton generally supports the proposed expanded definition of heating oil,
but expresses the same concerns as Viesel regarding the identification of and record-keeping and
reporting requirements for final end users.
Response: These comments are virtually identical to those of Viesel Fuel. See above EPA
responses to Viesel's comments.
Commenter: Independent Fuel Terminal Operators Association (IFTOA)
Document Number: EPA-HQ-OAR-2012-0223-003 5
Summary: IFTOA is an association of petroleum marketers that own and operate terminals and
most are obligated parties under the RFS program. IFTOA supports the expanded definition of
heating oil but opposes the provisions of the regulation designed to verify the appropriate end
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use of the newly qualifying fuel oil. IFTOA believes the verification requirements are
burdensome and unworkable and should therefore be eliminated or simplified.
IFTOA states that No.4 and No.6 fuel oil is used to heat many facilities, including small
apartment buildings with as few as 5 units, nursing homes, childcare centers, retail stores, and
churches. Marketers provide fuel to several hundred of these types of locations with only a few
larger buildings included in the total. Purchasers usually do not enter into a written contract with
a supplier; instead, the product is sold on a load-by-load basis and buildings rely on several
suppliers using informal commercial arrangements. Many purchasers do not keep formal records
and are not sophisticated businesses, but are usually a single individual or small business. IFTOA
believes the regulations requiring affidavits from and contracts with all end users are overly
burdensome and unworkable. End users will not be willing or able to produce affidavits, because
they are not all large institutions and given the potentially thousands of end users that can be
associated with a single marketer, collecting affidavits from each end user is overly burdensome.
IFTOA recommends that RINs generated with renewable fuels for blending with No.4 and No.6
and used for heating purposes should be retired if the fuel is used for process heat, power, or
other functions. Verification of appropriate use can be accomplished by quarterly reports from
producers and statements from marketers to producers, promising that the purchased fuel will be
used for heating purposes.
Response: EPA is aware that the additional reporting and recordkeeping requirements associated
with the expanded definition require additional paperwork of producers, marketers, and end-
users. However, these requirements are not overly burdensome. We are aware of producers who
are able to meet the new requirements. Furthermore, the requirements are carefully tailored to
provide the required level of assurance that the fuel oil in question meets the newly expanded
definition. Any fewer or less extensive requirements would not provide the assurance needed for
compliance with EPA's statutory mandate. Any producer who wishes to make use of this
provision to generate RINs for fuel oil used as heating oil must be prepared to comply with the
registration, reporting, and recordkeeping requirements. Nothing in this regulation limits a
producer's ability to continue to produce and sell #4 or #6 heating oil; these additional
requirements are only required for those producers who generate and sell RINs with their
product.
Commenter: James Schell
Document Number: EPA-HQ-OAR-2012-0223-0037
Summary: Mr. Schell supports the expanded definition of heating oil, but believes the PTD and
recordkeeping requirements should be more stringent than those proposed. It is unclear to him
how the PTD and recordkeeping requirements will be transferred to and applied to the end user.
The "end user" should be defined so that end use is the placement of fuel into a storage container
that is linked only to a furnace that will burn the fuel to produce heat designated for ambient air
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temperature control. This would require more precise recordkeeping by transporters and users
and would minimize violations.
Response: EPA believes the proposed recordkeeping and reporting requirements are sufficient to
assure the fuel oil under the expanded definition is used appropriately. Transporters and end
users are responsible for supplying appropriate affidavits and using the PTD associated with the
fuel. The PTD follows the fuel from the point of production all the way to the final end user. The
recordkeeping and reporting requirements are the responsibility of the fuel producer, though
some of the records (e.g., affidavits of end users) will be generated by others. We do not
therefore believe that any additional recordkeeping or reporting requirements are necessary to
provide the assurance needed regarding appropriate end use.
Commenter: Advanced Biofuels Association (ABFA)
Document Number: EPA-HQ-OAR-2012-0223-0027
Summary: ABFA supports the expanded definition of heating oil, which will offer new
opportunities, allow a broader range of fuels to participate in RFS, promote technology
neutrality, and level the playing field across renewable fuel producers. However, it believes the
documentation requirements are too onerous and will limit participation. Specifically, the end
use tracking will impose significant costs on the distribution system, be difficult to achieve, chill
use of the expanded fuels, and raise litigation concerns. Also, ABFA believes the additional
requirements for fuels qualifying under the expanded definition will create a cost avoidance
incentive for production of the mono-alkyl esters allowed in the first paragraph of the new rule.
The current recordkeeping requirements provide sufficient documentation without requiring end
user affidavits.
Response: EPA believes that the tracking requirements for fuel oils used as heating oil are
appropriate and necessary because these fuel oils are not traditionally limited to providing
heating to warm buildings or other facilities where people live, work, recreate, or conduct other
activities, and are not readily identifiable as heating oil based on their physical characteristics.
Although the added requirements for fuel oils impose some burden and may restrict to an extent
their use in the heating oil market, EPA believes such requirements are no more limiting than
necessary to ensure programmatic compliance.
Commenter: Minnesota Soybean Processers (with NBB)
Document Number: EPA-HQ-OAR-2012-0223-0028
Summary: MnSP is a soybean processor and biodiesel producer. MnSP believes both the
proposed rule and direct final rule have created confusion in the biodiesel industry and suggests
that a better and clearer definition of heating oil is needed. MnSP is concerned that the fuel oils
allowed under the expanded definition are not held to a uniform quality standard, which gives
them an unfair competitive advantage compared to biodiesel. Also, use of the new fuel oil may
have a detrimental effect on the sale of biodiesel if the new fuel oils perform poorly, because of
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consumer confusion. It is unclear to MnSP whether the new proposed oils exhibit detrimental
health effects, and MnSP therefore recommends that health effects testing should be required of
the newly-allowed fuel oils. MnSP is extremely concerned about the tracking requirements; it is
nearly impossible for a biodiesel producer to track use. Finally, MnSP believes the tracking and
affidavit requirements in the rule are unworkable and irrational for biodiesel producers.
Response: The expanded definition was intended to allow fuel oils that do not fit into the
traditional categories of #1 or #2 heating oil but that are nonetheless produced from renewable
biomass to be eligible for RIN generation. The addition of this new category is intended to
remedy what EPA now believes was an overly restrictive definition. Instead of defining the new
category of eligible fuel oils by their chemical composition, EPA intentionally defined them by
their end use. EPA's revised definition does not impose quality standards, as they are not
relevant to the factors EPA considers in determining what fuels qualify as home heating oil - the
scope of the term used by Congress, and the requirement that the fuel be derived from renewable
biomass and achieve the required lifecycle reductions in greenhouse gas emissions. Additional
quality controls are not part of the definitions adopted by Congress and not part of the RFS
program.
EPA is fuel neutral and does not express a preference between RIN generating biodiesel used as
heating oil and RIN generating fuel oil used as heating oil. It would not be appropriate for EPA
to limit the use of fuel oils that otherwise meet the definition of additional renewable fuel to
prevent competition within the heating oil market or to avoid potential damage to the commercial
reputation of biodiesel.
EPA requires health effects testing for fuels that are designated under the Fuel and Fuel Additive
Registration Program. To date, EPA has designated motor vehicle diesel fuels and has not
designated home heating oil for such testing. Any further designations of fuels for such health
effects testing is outside the scope of this rulemaking. EPA has not been presented with any
evidence demonstrating a cause for concern related to health impacts of fuel oil used as heating
oil.
Finally, the new registration and recordkeeping requirements apply only to the new category of
fuel oil, not to #1 or #2 heating oils, which are defined for RFS purposes by their chemical
composition, not by their end use. EPA's final rule does not change the prior definition of
heating oil. The final rule adds a new category of fuel oil to the definition but does not remove
or modify the definition with respect to heating oil that was previously included in the definition.
Commenter: National Biodiesel Board (NBB)
Document Number: EPA-HQ-OAR-2012-0223-0030
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Summary: NBB is a trade organization representing the biodiesel industry and
coordinating research and development on biodiesel. NBB believes that the proposed rule has
caused confusion in the industry regarding what fuels and fuel oils will be qualified as "heating
oil" under the new definition. Specifically, NBB is concerned that the proposed addition of fuel
oils to the definition of heating oil does not include any fuel quality control standards, and that
some fuels now qualifying as heating oil may become non-qualifying under the new definition.
Regarding the newly added fuel oils, NBB is concerned that the lack of quality specifications
might allow substances used as fuels that are not otherwise subject to industry standards under
section 80.2(ccc) to qualify as heating oil. The introduction of low-quality fuel oils to the market
might damage the public perception of all biofuels, and give a competitive advantage to
producers of these low-quality fuel oils. NBB also requests EPA clarify that feedstocks for the
new fuel oils are not limited to "vegetable oil" or "animal fat". The definition should include a
broader category of feedstocks, including all natural oils producing a mono alkyl ester of long
chain fatty acids (e.g., cooking oils, algal oils).
NBB is also concerned that the new definition might limit the generation of RINs for biodiesel
currently qualifying as heating oil, including that which is used in stationary sources and/or for
process heat or power generation. Additionally, biodiesel producers must be able to separate and
sell RINs generated based on their own use of biodiesel used as heating oil or for process heat or
power.
Response: Regarding the lack of fuel specifications for the new fuel oil category of heating oil,
EPA purposefully constructed the amended definition to be based on actual end use instead of
the chemical properties of the fuel oils. EPA's revised definition does not impose quality
standards, as they are not relevant to the factors EPA considers in determining what fuels qualify
as home heating oil - the scope of the term used by Congress, and the requirement that the fuel
be derived from renewable biomass and achieve the required lifecycle reduction in greenhouse
gas emissions. Adding fuel quality specifications would not affect whether the fuel was derived
from renewable biomass, and would not affect the analysis of lifecycle GHG emissions
associated with the heating oils.
With respect to the feedstocks that can be used to produce this new category of fuel oil, EPA is
only changing what fuels are included in the definition of heating oil. This does not change the
pathways that are approved for producing RIN generating heating oil. The pathways approved
for production of heating oil are not changed by this final rule, just the scope of fuels that are
included in the term heating oil. Thus this rule does not change the feedstocks that may be used
to produce heating oil.
The amended definition does not limit, reduce, or change the use of fuels currently covered
under the definition of heating oil, or track or restrict their actual end use to heating. The new
restrictions on actual end use apply only to the newly added category of fuel oils. EPA confirms
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that inclusion of the new heating oil provision for fuel oils does not impact the current definition
and use of biodiesel as heating oil, even where that biodiesel is used for process heat, power
generation, or in stationary sources. EPA confirms that biodiesel producers can (and must)
separate the RINs from wet gallons when used by the producer as heating oil or for process heat
or power.
Commenter: Renewable Energy Group ("REG")
Document Number: EPA-HQ-OAR-2012-0223-0031
Summary: REG is a biodiesel producer that supports the expansion of the definition of heating
oil. However, REG is concerned that EPA has not set or established fuel quality specifications
for the newly-allowed fuel oils, which it believes could invite abuse and adversely impact
uninformed customers. REG is concerned that the new definition may limit the current use of
biodiesel for power generation, for instance in stationary combustion turbines.
Response: Regarding the lack of fuel quality standards for the newly added fuel oils, EPA does
not believe it appropriate or necessary to qualify fuel oils by fuel quality standards for the
reasons discussed above. For reasons identified elsewhere (see, e.g. response to comments from
NBB and preamble to the final rule), EPA believes that defining these fuel oils in terms of their
end use and tracking such actual end use will prevent adverse impacts on customers or "market
confusion".
The amended definition of heating oil does not modify or limit fuel included in the existing
definition of heating oil. EPA confirms that the expansion of the heating oil definition to include
fuel oils does not impact the existing definition, and therefore does not impact the generation of
RINs for biodiesel sold as heating oil. As such, the amended definition of heating oil should not
impact REG's current production and marketing of its biodiesel products for use as heating oil
where it is ultimately used for process heat or power generation. The limitation on actual end
use for heating purposes only will apply only to the newly-added fuel oils (paragraph 2 of the
new definition) and not to those fuels that fall under the existing definition (paragraph 1 of the
new definition).
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