Renewable Fuel Standards for 2014,
2015 and 2016, and the Biomass-Based
Volume for 2017:
Response to Comments
&EPA
United States
Environmental Protection
Agency
-------
Renewable Fuel Standards for 2014,
2015 and 2016, and the Biomass-Based
Volume for 2017:
Response to Comments
Assessment and Standards Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
&EPA
United States
Environmental Protection
Agency
EPA-420-R-15-024
November 2015
-------
Table of Contents
Table of Contents i
List of Organizations Submitting Comments iv
Introduction 1
1. General Comments 3
1.1 Supports Rule 3
1.2 Opposes Rule 11
2. Proposed National Volume Requirements for Advanced Biofuel and Total Renewable Fuel. 44
2.1 General Comments 44
2.1.1 General Comments on Advanced Biofuels 47
2.1.2 General Comments on Total Renewable Fuel 50
2.2 Statutory Authorities for Reducing Volumes Targets 53
2.2.1 Cellulosic Waiver Authority 63
2.2.2 General Waiver Authority 73
2.2.2.1 Inadequate Domestic Supply 93
2.2.2.2 Severe Economic Harm 115
2.2.3 Combining Authorities for Reductions in Advanced Biofuel and Total Renewable Fuel
117
2.2.4 Inability of the Market to Reach Statutory Volumes 121
2.3 Proposed Approach to Determining Volume Requirements 127
2.3.1 Congressional Intent to Increase Volumes 130
2.3.2 Power of the Market to Respond to Ambitious Standards 150
2.4 Proposed Volumes for Total Renewable Fuel 167
2.4.1 Proposed Total Renewable Fuel Volume for 2014 182
2.4.2 Proposed Total Renewable Fuel Volume for 2015 191
2.4.3 Proposed Total Renewable Fuel Volume for 2016 195
2.5 Proposed Volumes for Advanced Biofuel 214
2.5.1 Proposed Advanced Biofuel Volume for 2014 218
2.5.2 Proposed Advanced Biofuel Volume for 2015 225
2.5.3 Proposed Advanced Biofuel Volume for 2016 229
2.6 Ethanol Consumption 248
2.6.1 E10 Blendwall and Demand for Gasoline 260
2.6.2 Assumptions of Zero Volumes for EO and El 5 284
2.7 Volume Scenarios 321
2.7.1 Achievable Volumes of E85 Consumption 326
2.7.2 Impacts on Advanced Biodiesel Production and Imports 357
2.7.3 Impacts on Corn Ethanol 363
2.7.4 Impacts on Imports of Sugarcane Ethanol 369
2.7.5 Impacts on imports of Conventional Biodiesel 374
3. Proposed National Volume Requirement for Biomass-Based Diesel for 2014-2017 377
3.1 General Comments on Biomass-Based Diesel 377
3.2 Factors Affecting Supply and Consumption 384
3.2.1 Availability of Feedstocks 389
3.2.2 Product on Capacity 402
3.2.3 Imports of Biomass-Based Diesel 408
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3.2.4 Limitations on Biodiesel use due to Cold Weather Operability and Engine Warranties
428
3.2.5 Federal Tax Credit for Biodiesel 434
3.3 Determination of Applicable Volumes 437
3.3.1 Balance between Supporting the Biomass-Based Diesel Industry and Ensuring
Opportunities for Other Advanced to Grow 449
3.3.2 Applicable Biomass-Based Diesel Volume for 2014 456
3.3.3 Applicable Biomass-Based Diesel Volumes for 2015-2017 458
3.4 Consideration of Statutory Factors 470
3.4.1 Advanced Biofuel as the Driver for Biomass-Based Diesel Demand 478
3.4.2 Increases in Biomass-Based Diesel Displace Other Advanced, Not Diesel 478
3.4.3 Comments on Specific Statutory Factors 485
3.5 General Comments on Increasing the BED Standard Above 1.28 Billion Gallons 504
3.5.1 Comments Supporting Biomass-Based Diesel Volume Requirement Above 1.28
Billion Gallons 506
3.5.2 Comments Supporting Biomass-Based Diesel Volume Requirement No Higher Than
1.28 Billion Gallons 523
4. Proposed Cellulosic Biofuel Standards 529
4.1 General Comments on Cellulosic Biofuels 529
4.2 Cellulosic Biofuel Volume Assessment 540
4.2.1 Potential Domestic Producers 543
4.2.2 Potential Foreign Sources of Cellulosic Biofuel 551
4.3 Proposed Cellulosic Biofuel Standards 552
4.3.1 Proposed Cellulosic Biofuel Volume for 2014 559
4.3.2 Proposed Cellulosic Biofuel Volume for 2015 559
4.3.3 Proposed Cellulosic Biofuel Volume for 2016 562
4.4 Rescission of the 2011 Cellulosic Biofuel Standards 572
5. Proposed Percentage Standards 573
6. Treatment of Carryover RINs 574
6.1 General Comments on Treatment of Carryover RINs 574
6.2 Comments on Treatment of Cellulosic Carryover RINs 594
7. Economic Impacts of the Proposed Rule 600
7.1 General Comments on Economic Impacts 600
7.2 Agricultural Impacts (Food, Animal Feed, Crops, Feedstock) 631
7.3 Fuels Industry Impacts (Oil Refineries, Biofuel Facilities) 673
7.4 Impact on RINs 689
7.5 Retail Fuel Prices 698
7.6 Energy Security 712
7.7 Impact on Jobs and Local/State Economy 721
7.8 Cost to Consumer 740
8. Environmental Impacts of the Proposed Rule 749
8.1 General Comments on Environmental Impacts 749
8.2 Climate Change (GHG Impacts) 758
8.3 Air Quality 780
8.4 Water Quality 791
8.5 Wetlands, Ecosystems and Wildlife Habitats 796
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9. Proposed Changes to Regulations 801
9.1 Algal Biofuel Pathways 801
9.2 Deadlines for Compliance Demonstrations and Attest Engagements 807
10. Other Comments 811
10.1 Outlook for 2017 and Beyond 811
10.2 Dates/Deadlines 819
10.2.1 Statutory Deadlines 821
10.3 Public Participation 830
10.4 Statutory and Executive Order Reviews 831
10.5 Statutory Authority 833
10.6 Beyond the Scope 833
10.6.1 Legislative Changes 833
10.6.2 RFS Program Designs 835
10.6.3 RIN-Generating Pathway Approvals 838
10.6.4 Ethanol Impacts on Engines 843
10.6.5 Other Information and Ideas to Overcome Current Challenges 855
10.6.6 Changing the Point of Obligation 865
10.6.7 Cellulosic Waiver Credits and Rollover Cap 883
10.6.8Biointermediates 889
10.7 Small Refineries and Small Refiners 892
in
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List of Organizations Submitting Comments
Organization
62nd Legislative District,
Pennsylvania House of
Representatives
Abengoa Bioenergy
Abengoa Bioenergy,
DuPont, and Poet-DSM
ABO, ACOREandBIO
Ace Ethanol/Fox River
Valley Ethanol
Advanced Biofuels
Association (ABFA)
Advanced Biofuels
Business Council (ABBC)
Advanced Economic
Solutions (AES)
Advanced Ethanol Council
Ag Processing, Inc.
AgriVision Equipment
Group
AJW, Inc.
AL-Corn Clean Fuel
Algae Biomass
Organization (ABO)
American Automobile
Association (AAA)
American Biogas Council
American Cleaning
Institute (ACI)
Organization Type
State and Local
Governments and
Organizations
Renewable Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
Other
Companies/Industries
Renewable Fuels Industry
Renewable Fuels Industry
Equipment Manufacturers
& Suppliers
Renewable Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
Vehicle Dealers and
Organizations
Renewable Fuels Industry
Other
Companies/Industries
Commenter Name(s)
Dave Reed
Christopher Standlee
Christopher Standlee, Jan
Koninckx, and James Moe
Algae Biomass Organization
(ABO), American Council On
Renewable Energy (ACORE),
and Biotechnology Industry
Organization (BIO)
Neal Kemmet
Michael McAdams
R. Brooke Coleman
William Lapp
Brooke Coleman
Steve Nogel
Jeremy Ostrander
Christopher Hessler
Randall J Doyal
Matt Carr
Avery Ash
Patrick Serfass
Jacob Cassady
Docket File(s)
EPA-HQ-OAR-2015-01 1 l-3462.html,
EPA-HQ-OAR-2015-01 1 1-3462-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2474.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2474-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-3272.html,
EPA-HQ-OAR-2015-01 11-3272-
A3.pdf, EPA-HQ-OAR-2015-01 11-
3272-A2.pdf, EPA-HQ-OAR-2015-
0111-3272-Al.pdf
EPA-HQ-OAR-2015-0111-1950.html,
EPA-HQ-OAR-2015-01 11-1950-
Al.pdf
EPA-HQ-OAR-2015-0111-1200.html,
EPA-HQ-OAR-2015-01 11-1200-
A2.pdf, EPA-HQ-OAR-2015-01 11-
1200-Al.pdf
EPA-HQ-OAR-2015-01 1 l-2498.html,
EP A-HQ-O AR-20 15-0111 -2498-
Al.pdf
EPA-HQ-OAR-2015-0111-3528.html,
EPA-HQ-OAR-2015-01 11-3528-
Al.pdf
EPA-HQ-OAR-2015-0111-1193.html,
EPA-HQ-OAR-2015-01 11-1 193-
Al.docx
EPA-HQ-OAR-2015-01 11-1044
EPA-HQ-OAR-2015-01 11-1044
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-01 1 l-2268.html,
EP A-HQ-O AR-20 15-0111 -2268-
Al.pdf
EPA-HQ-OAR-2015-01 11-1214-
Al.pdf, EPA-HQ-OAR-2015-01 11-
1214.html, EPA-HQ-OAR-2015-01 11-
1214-A2.pdf
EPA-HQ-OAR-2015-0111-1951.html,
EP A-HQ-O AR-2015-0111-1951-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2037.html,
EPA-HQ-OAR-2015-01 11-2037-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2504.html,
EP A-HQ-O AR-20 1 5-0 1 1 1 -2504-
Al.pdf
EPA-HQ-OAR-2015-0111-1934.html,
EPA-HQ-OAR-2015-01 11-1934-
Al.pdf
IV
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Organization
American Coalition for
Ethanol (ACE)
American Council on
Renewable Energy
(ACORE)
American Farm Bureau
Federation (Farm Bureau)
American Fuel &
Petrochemical
Manufacturers and
American Petroleum
Institute
American Motorcyclist
Association
American Soybean
Association (ASA)
American Sportfishing
Association (ASA)
Americans for Prosperity
Anonymous Citizen 6
Archer Daniels Midland
Company (ADM)
Association of Nebraska
Ethanol Producers
(ANEEP)
Association of Nebraska
Ethanol Producers
(ANEEPySchmit
Industries, Inc.
Atlantic Drywall
Aventine Renewable
Energy
Organization Type
Renewable Fuels Industry
Renewable Fuels Industry
Farms
Petroleum Fuels Industry
Other Organizations,
Institutes, and
Foundations
Agribusiness
Other
Companies/Industries
Environmental Non-
governmental
Organizations
Private Citizens
Agribusiness
Renewable Fuels Industry
Renewable Fuels Industry
Other
Companies/Industries
Renewable Fuels Industry
Commenter Name(s)
Brian Jennings
Jeramy Shays
Dale Moore
Richard Moskowitz, Robert L.
Greco, III
Rick Podliska
Wade Cowan and Bob Henry
Scott Gudes
Jeff Glendening
N/A
Mark Bemis, Kent Engelbrecht
and Craig Willis
Loran Schmit
Loran Schmit
Marc Marois
Mark Beemer
Docket File(s)
EPA-HQ-OAR-2015-01 1 l-2543.html,
EPA-HQ-OAR-2015-01 1 1-2543-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2543-Al.pdf
EPA-HQ-OAR-2015-0111-1926.html,
EPA-HQ-OAR-2015-01 11-1926-
Al.pdf
EPA-HQ-OAR-2015-0111-2355.html,
EPA-HQ-OAR-2015-01 11-2355-
Al.pdf
EPA-HQ-OAR-2015-01 11-3526-
A2.pdf, EPA-HQ-OAR-2015-01 11-
3526-Al.pdf, EPA-HQ-OAR-2015-
01 ll-1948.html, EPA-HQ-OAR-2015-
01 ll-1948-A6.pdf, EPA-HQ-OAR-
2015-01 ll-1948-A5.pdf, EPA-HQ-
OAR-2015-0111-1948-A4.pptx, EPA-
HQ-OAR-2015-01 ll-1948-A3.pdf,
EPA-HQ-OAR-2015-01 11-1948-
A2.pdf, EPA-HQ-OAR-2015-01 11-
1948-Al.pdf, EPA-HQ-OAR-2015-
01 ll-3526.html
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-0111-1818.html,
EPA-HQ-OAR-2015-01 11-1818-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-0424.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -0424-
Al.pdf
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-0111-0113.html
EPA-HQ-OAR-2015-01 1 l-2262.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2262-
Al.pdf
EPA-HQ-OAR-2015-0111-1809.html,
EPA-HQ-OAR-2015-01 11-1809-
Al.pdf
EPA-HQ-OAR-2015-0111-1956.html,
EPA-HQ-OAR-2015-01 11-1956-
A2.pdf, EPA-HQ-OAR-2015-01 11-
1956-Al.pdf
EPA-HQ-OAR-2015-0111-1658.html,
EPA-HQ-OAR-2015-01 11-1658-
Al.pdf
EPA-HQ-OAR-2015-01 11-1044
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Organization
Badger State Ethanol
Baker Commodities
Bates White
Big River Resources, LLC
BioEnergy R&D
Biogas Researchers Inc.
(BR)
Biotechnology Industry
Organization
Board of Commissioners,
Mercer County
Board of County
Commissioners of Putnam
County, Ohio
BP America (BP)
Brazilian Sugarcane
Industry Association
(UNICA)
Butamax Advanced
Biofuels, LLC
Butrolix
Calease, John
California Biodiesel
Alliance (CBA)
Organization Type
Renewable Fuels Industry
Other
Companies/Industries
Other
Companies/Industries
Renewable Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
State and Local
Governments and
Organizations
State and Local
Governments and
Organizations
Fuels Industry
Agribusiness
Renewable Fuels Industry
Renewable Fuels Industry
Private Citizens
Renewable Fuels Industry
Commenter Name(s)
Kurt Koller
Patrick Faecke
David DeRamus
Raymond E. Defenbaugh
Claus Crone Fuglsang
Jim Lemon
Brent Erickson
John N. Lechner and Matthew
B. McConnell
Janice K. Raburn
Elizabeth Farina and Leticia
Phillips
Don Mattsson
John Calease
Curtis Wright
Docket File(s)
EPA-HQ-OAR-2015-01 1 l-2277.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2277-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2277-Al.pdf, EPA-HQ-OAR-2015-
01 ll-1201.html, EPA-HQ-OAR-2015-
01 ll-1201-A2.pdf, EP A-HQ-O AR-
2015-0111-1201-Al.pdf
EPA-HQ-OAR-2015-0111-1907.html,
EPA-HQ-OAR-2015-01 11-1907-
Al.pdf
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-01 1 l-3445.html,
EPA-HQ-OAR-2015-01 11-3445-
Al.pdf, EPA-HQ-OAR-2015-01 11-
3419.html, EPA-HQ-OAR-2015-01 11-
3419-Al.pdf
EPA-HQ-OAR-2015-0111-0124.html,
EPA-HQ-OAR-2015-01 11-0124-
Al.docx
EPA-HQ-OAR-2015-01 1 l-2494.html,
EP A-HQ-O AR-20 15-0111-2494-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2266.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2266-
Al.pdf, EPA-HQ-OAR-2015-01 11-
1958.html, EPA-HQ-OAR-2015-01 11-
1958-A2.pdf, EP A-HQ-O AR-2015-
0111-1958-Al.pdf
EPA-HQ-OAR-2015-0111-1223.html,
EPA-HQ-OAR-2015-01 11-1223-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-3289.html,
EPA-HQ-OAR-2015-01 11-3289-
Al.pdf
EPA-HQ-OAR-2015-0111-1935.html,
EPA-HQ-OAR-2015-01 11-1935-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2495.html,
EPA-HQ-OAR-2015-01 11-2495-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2495-Al.pdf
EPA-HQ-OAR-2015-0111-1938.html,
EPA-HQ-OAR-2015-01 11-1938-
A2.pdf, EPA-HQ-OAR-2015-01 11-
1938-Al.pdf
EPA-HQ-OAR-2015-0111-2819.html,
EPA-HQ-OAR-2015-01 11-2819-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2819-Al.pdf
EP A-HQ-O AR-2015-1044
EPA-HQ-OAR-2015-0111-1910.html,
EPA-HQ-OAR-2015-01 11-1910-
Al.pdf
VI
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Organization
California Dairy Campaign
Canola Council of Canada
Carbon Green BioEnergy,
LLC
Central Indiana Ethanol
(CIE)
Chevron
CHS, Inc.
Clean Air Task Force
Clean Energy Renewables
Clean Fuels Development
Coalition and the Nebraska
Ethanol Board
Coalition for Renewable
Natural Gas
Colorado Corn Growers
Association
Commonwealth Agri-
Energy, LLC
Organization Type
Agribusiness
Agribusiness
Renewable Fuels Industry
Renewable Fuels Industry
Petroleum Fuels Industry
Renewable Fuels Industry
Environmental Non-
governmental
Organizations
Renewable Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
Agribusiness
Renewable Fuels Industry
Commenter Name(s)
Joe Augusto
Brian Innes
Mitch Miller
Brad T. Tinkel
Maria Pica Karp and Robert
Anderson
Steve Markham
Jonathan F. Lewis
Harrison Clay
Todd C. Sneller and Douglas
Durante
David Cox
M. Sponsler
Mick Henderson
Docket File(s)
EPA-HQ-OAR-2015-0111-1816.html,
EPA-HQ-OAR-2015-01 11-1816-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2484.html,
EP A-HQ-O AR-20 15-0111-2484-
Al.pdf
EPA-HQ-OAR-2015-0111-1688.html,
EPA-HQ-OAR-2015-01 11-1688-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2823.html,
EPA-HQ-OAR-2015-01 11-2823-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2823-Al.pdf, EPA-HQ-OAR-2015-
01 ll-2822.html, EPA-HQ-OAR-2015-
01 ll-3444.html, EPA-HQ-OAR-2015-
01 ll-2822-A2.pdf, EPA-HQ-OAR-
2015-01 ll-3444-A2.pdf, EPA-HQ-
OAR-2015-0111-2822-Al.pdf, EPA-
HQ-OAR-2015-01 1 1-3444-A1 .pdf,
EPA-HQ-OAR-2015-0111-2821.html,
EPA-HQ-OAR-2015-01 11-2821-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2821-Al.pdf, EPA-HQ-OAR-2015-
01 ll-3443.html, EPA-HQ-OAR-2015-
01 ll-3443-A2.pdf, EP A-HQ-O AR-
2015-0111-3443-Al.pdf
EPA-HQ-OAR-2015-0111-3527.html,
EPA-HQ-OAR-2015-01 11-3527-
A3.pdf, EPA-HQ-OAR-2015-01 11-
3527-A2.pdf, EPA-HQ-OAR-2015-
0111-3527-Al.pdf, EPA-HQ-OAR-
2015-01 ll-1911.html, EP A-HQ-O AR-
2015-0111-1911-Al.pdf
EP A-HQ-O AR-2015-1044
EPA-HQ-OAR-2015-0111-1828.html,
EPA-HQ-OAR-2015-01 11-1828-
Al.pdf
EPA-HQ-OAR-2015-0111-1908.html,
EPA-HQ-OAR-2015-01 11-1908-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2259.html,
EPA-HQ-OAR-2015-01 11-2259-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-3278.html,
EPA-HQ-OAR-2015-01 11-3278-
Al.pdf
EPA-HQ-OAR-2015-0111-2334.html,
EPA-HQ-OAR-2015-01 11-2334-
Al.pdf
EPA-HQ-OAR-2015-0111-1215.html,
EPA-HQ-OAR-2015-01 11-1215-
A2.pdf, EPA-HQ-OAR-2015-01 11-
1215-Al.pdf
Vll
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Organization
Commonwealth of
Pennsylvania
Conestoga Energy Partners
Holding
Conference of Professional
Operators for Response
Towing
Cool Planet Energy
Systems
Corn Producers
Association of Texas
(CPAT)
Cornelius Seed Corn
Company
Cornhusker Energy
Lexington
Countrymark Cooperative
Holding Corporation
Crawford County
Crimson Renewable
Energy LP
CVR Refining, LP
(CVRR)
Dakota Spirit AgEnergy
Darling Ingredients Inc.
DENCO II
DriveGreen LLC
DuPont
Organization Type
State and Local
Governments and
Organizations
Renewable Fuels Industry
Other
Companies/Industries
Renewable Fuels Industry
State and Local
Governments and
Organizations
Agribusiness
Renewable Fuels Industry
Fuels Industry
State and Local
Governments and
Organizations
Renewable Fuels Industry
Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
Commenter Name(s)
Dave Reed
Tom Willis
Tina M. Cardone
David Gibson
Chuck Cornelius
Todd Rohrbough
Matthew L. Smorch
Gibson, David
Harry Simpson
John J. Lipinski
Cathleen T. OHiggins
John Bullock
Mick Miller, Carson Berger,
and Brandon Soine
Gordon F. Grimes
Jan Koninckx
Docket File(s)
EPA-HQ-OAR-2015-01 11-1933-
Al.pdf, EPA-HQ-OAR-2015-01 11-
1933.html
EPA-HQ-OAR-2015-1044
EPA-HQ-OAR-2015-0111-1718.html,
EPA-HQ-OAR-2015-01 11-1718-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2572.html
EPA-HQ-OAR-2015-01 1 l-2276.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2276-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2276-Al.pdf, EPA-HQ-OAR-2015-
01 ll-1689.html, EPA-HQ-OAR-2015-
0111-1689-Al.pdf
EPA-HQ-OAR-2015-01 1 l-3247.html,
EPA-HQ-OAR-2015-01 11-3247-
Al.pdf
EPA-HQ-OAR-2015-0111-1198.html,
EPA-HQ-OAR-2015-01 11-1 198-
Al.pptx
EPA-HQ-OAR-2015-01 1 l-2264.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2264-
Al.pdf
EPA-HQ-OAR-2015-0111-1666.html,
EPA-HQ-OAR-2015-01 11-1666-
Al.pdf
EPA-HQ-OAR-2015-0111-1823.html,
EPA-HQ-OAR-2015-01 11-1823-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2606.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2606-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2606-Al.pdf, EPA-HQ-OAR-2015-
01 ll-2500.html, EPA-HQ-OAR-2015-
0111-2500-Al.pdf
EPA-HQ-OAR-2015-01 1 l-2057.html,
EP A-HQ-O AR-20 15-0111 -2057-
Al.pdf
EPA-HQ-OAR-2015-0111-1929.html,
EPA-HQ-OAR-2015-01 11-1929-
Al.pdf
EPA-HQ-OAR-2015-0111-1216.html,
EPA-HQ-OAR-2015-01 11-1216-
A2.pdf, EPA-HQ-OAR-2015-01 11-
1216-Al.pdf
EPA-HQ-OAR-2015-0111-1822.html,
EPA-HQ-OAR-2015-01 11-1822-
Al.pdf
EPA-HQ-OAR-2015-0111-1826.html,
EPA-HQ-OAR-2015-01 11-1826-
Al.pdf
Vlll
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Organization
East Kansas Agri-Energy,
LLC (EKAE)
Ecoengineers
Energy Policy Research
Foundation, Inc. (EPRINC)
Energy Resources Center
at the University of
Illinois-Chicago
Enerkem
Environmental and Energy
Study Institute (EESI)
Environmental Working
Group (EWG)
ERI Solutions
ExxonMobil Refining &
Supply Company
Farm Credit Services of
America
Farmers Cooperative
Company
Florida Chamber of
Commerce
Freedom of Road Riders
and Motorcycle Riders
Foundation (MRF)
Fremont Industries
Fuel Cell and Hydrogen
Energy Association
(FCHEA)
Funding Farm
General Motors
Organization Type
Renewable Fuels Industry
Other
Companies/Industries
Non-governmental
Institutes and Foundations
(other than
Environmental)
Academic Institutions
Renewable Fuels Industry
Environmental Non-
governmental
Organizations
Environmental Non-
governmental
Organizations
Other
Companies/Industries
Fuels Industry
Farms
Agribusiness
Chambers of Commerce
Other Organizations,
Institutes, and
Foundations
Equipment Manufacturers
Renewable Fuels Industry
Farms
Vehicle Manufacturers
and Organizations
Commenter Name(s)
Bill Pracht, Jeff Oestmann, and
Tom Leitnaker and Kevin
Mobley
Shashi Menon
Lucian Pugliaresi
Iris Caldwell
Vincent Chornet
Carol Werner
Mike Lavender
Nathan Vander Griend
Ian S. Can-
Douglas R. Stark
Darin Schlapia
David A. Hart
William Kempker
Kevin Ross and Rob Herbon
Bud DeFlaviis
David Kolsrud
Matthew Rudnick
Docket File(s)
EPA-HQ-OAR-2015-01 1 l-2607.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2607-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2607-Al.pdf, EPA-HQ-OAR-2015-
01 11-2783. html, EP A-HQ-O AR-2015-
0111-2783-Al.pdf, EPA-HQ-OAR-
2015-01 ll-1721.html, EP A-HQ-O AR-
2015-01 11-1721-Al.docx
EPA-HQ-OAR-2015-01 1 l-2269.html,
EP A-HQ-O AR-20 15-0111 -2269-
Al.pdf
EPA-HQ-OAR-2015-0111-1946.html,
EPA-HQ-OAR-2015-01 11-1946-
Al.pdf
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-0111-1940.html,
EPA-HQ-OAR-2015-01 11-1940-
Al.pdf
EPA-HQ-OAR-2015-0111-1944.html,
EPA-HQ-OAR-2015-01 11-1944-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2040.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2040-
Al.pdf
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-01 1 l-2270.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2270-
Al.pdf
EPA-HQ-OAR-2015-0111-2491.html,
EPA-HQ-OAR-2015-01 11-2491-
Al.pdf
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-0111-3425.html
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-01 1 l-2483.html,
EPA-HQ-OAR-2015-01 11-2483-
Al.pdf
EPA-HQ-OAR-2015-0111-2812.html,
EPA-HQ-OAR-2015-01 11-2812-
Al.pdf
EPA-HQ-OAR-2015-0111-1931.html,
EPA-HQ-OAR-2015-01 11-1931-
Al.pdf
IX
-------
Organization
George Washington
University Regulatory
Studies Center
Governor of Iowa, et al,
Governorsafi™ Biofuels
Coalition
Greater Mankato Growth
Green Plains, Inc.
Greenville-Reynolds
Development Corporation
Growth Energy
Harrods Creek Boat
Owners Association
Hermes Consolidated, LLC
dba Wymoing Refining
Company
Highwater Ethanol, LLC
Hinman Trucking
HollyFrontier Corporation
HuskerAgLLC
ICM
Illinois Corn Growers
Association (ICGA) and
Illinois Renewable Fuels
Association (IRFA)
Illinois Department of
Agriculture
Organization Type
Academic Institutions
State and Local
Governments and
Organizations
State and Local
Governments and
Organizations
Chambers of Commerce
Renewable Fuels Industry
State and Local
Governments and
Organizations
Renewable Fuels Industry
Other
Companies/Industries
Fuels Industry
Renewable Fuels Industry
Other
Companies/Industries
Petroleum Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
State and Local
Governments and
Organizations
State and Local
Governments and
Organizations
Commenter Name(s)
Sofie E. Miller
Terry E. Branstad
Larry Pearce
Jonathan G. Zierdt
Jeff Briggs and Brian Engel
Bradley R. Gosser
Tom Buis
Mark Windhorst
Bob Neufeld
Brian Kletscher
Rick Hinman
Michael C. Jennings and Brian
Carron
Seth Harder
Jeff Scharping
Kenneth Hartman and
Raymond Defenbaugh
Philip Nelson
Docket File(s)
EPA-HQ-OAR-2015-0111-1815.html,
EPA-HQ-OAR-2015-01 11-1815-
Al.pdf
EPA-HQ-OAR-2015-0111-1915.html,
EPA-HQ-OAR-2015-01 11-1915-
A2.pdf, EPA-HQ-OAR-2015-01 11-
1915-Al.pdf
EPA-HQ-OAR-2015-0111-1722.html,
EPA-HQ-OAR-2015-01 11-1722-
Al.doc, EPA-HQ-OAR-2015-01 11-
2489.html, EPA-HQ-OAR-2015-0111-
2489-Al.pdf, EPA-HQ-OAR-2015-
01 ll-1912.html, EPA-HQ-OAR-2015-
0111-1912-Al.pdf
EPA-HQ-OAR-2015-0111-1312.html,
EP A-HQ-O AR-2015-0111-1312-
Al.pdf
EPA-HQ-OAR-2015-1044
EPA-HQ-OAR-2015-0111-3453.html,
EPA-HQ-OAR-2015-01 11-3453-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2604.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2604-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2604-Al.pdf
EPA-HQ-OAR-2015-0111-1841.html
EPA-HQ-OAR-2015-01 1 l-2487.html,
EP A-HQ-O AR-20 15-0111-2487-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2506.html,
EP A-HQ-O AR-20 1 5-0 1 1 1 -2506-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2506-Al.pdf
EPA-HQ-OAR-2015-0111-1659.html,
EPA-HQ-OAR-2015-01 11-1659-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2257.html,
EP A-HQ-O AR-20 15-0111 -2257-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2044.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2044-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2044-Al.pdf
EPA-HQ-OAR-2015-1044
EPA-HQ-OAR-2015-01 1 l-2542.html,
EP A-HQ-O AR-20 1 5-0 1 1 1 -2542-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2542-Al.pdf, EPA-HQ-OAR-2015-
01 ll-1925.html, EPA-HQ-OAR-2015-
0111-1925-Al.pdf
EPA-HQ-OAR-2015-01 1 l-0260.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -0260-
Al.doc
-------
Organization
Illinois Farm Bureau
Illinois Soybean Growers
(ISO)
Imperium Renewables and
Renewable Biofuels
Independent Fuel Terminal
Operators Association
(IFTOA)
Indiana Corn Growers
Association (ICGA)
Indiana Ethanol Producers
Association
Indiana Farm Bureau
Indiana Soybean Alliance
and American Soybean
Association
International Council on
Clean Transportation
(ICCT)
Iowa Biodiesel Board
(IBB) and Iowa Soybean
Association (ISA)
Iowa Corn Growers
Association (ICGA)
Iowa Farm Bureau
Federation (IFBF)
Iowa Renewable Fuels
Association
Iowa Soybean Association
John Deere
Johns Hopkins University
Kane Ranch, LLC
Kansas Corn Growers
Association
Organization Type
State and Local
Governments and
Organizations
Agribusiness
Renewable Fuels Industry
Petroleum Fuels Industry
Agribusiness
Renewable Fuels Industry
State and Local
Governments and
Organizations
Agribusiness
Non-governmental
Institutes and Foundations
(other than
Environmental)
Renewable Fuels Industry
Agribusiness
State and Local
Governments and
Organizations
Renewable Fuels Industry
Agribusiness
Agribusiness
Academic Institutions
Farms
Agribusiness
Commenter Name(s)
Adam Nielsen
Bill Raben
John Plaza and Jonathan
Phillips
Andrea Grant
Herbert Ringel
Steve Pittman
Kyle Cline
David Lowe
Nic Lutsey
Grant Kimberley
Jerry Mohr
Craig Hill and Charles Norris
Monte Shaw
Tom Oswald
Charles A. Studer
Adam Christensen
Gath Fiedler
Docket File(s)
EPA-HQ-OAR-2015-01 1 l-3290.html,
EPA-HQ-OAR-2015-01 1 1-3290-
A2.pdf, EPA-HQ-OAR-2015-01 11-
3290-Al.pdf
EPA-HQ-OAR-2015-01 1 l-3428.html
EPA-HQ-OAR-2015-01 1 l-2043.html,
EPA-HQ-OAR-2015-01 11-2043-
Al.pdf
EPA-HQ-OAR-2015-01 11-1947-
Al.docx, EPA-HQ-OAR-2015-01 11-
1947.html
EPA-HQ-OAR-2015-01 1 l-2503.html,
EPA-HQ-OAR-2015-01 11-2503-
Al.pdf
EPA-HQ-OAR-2015-0111-3485.html,
EPA-HQ-OAR-2015-01 11-3485-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2486.html,
EP A-HQ-O AR-20 15-0111-2486-
Al.docx
EPA-HQ-OAR-2015-01 1 l-2502.html,
EP A-HQ-O AR-20 1 5-0 1 1 1 -2502-
Al.pdf
EPA-HQ-OAR-2015-0111-1923.html,
EPA-HQ-OAR-2015-01 11-1923-
Al.pdf
EPA-HQ-OAR-2015-0111-1942.html,
EPA-HQ-OAR-2015-01 11-1942-
Al.pdf
EPA-HQ-OAR-2015-0111-1820.html,
EPA-HQ-OAR-2015-01 11-1820-
Al.pdf
EPA-HQ-OAR-2015-0111-1717.html,
EPA-HQ-OAR-2015-01 11-1717-
Al.pdf
EPA-HQ-OAR-2015-0111-1957.html,
EPA-HQ-OAR-2015-01 11-1957-
A2.pdf, EPA-HQ-OAR-2015-01 11-
1957-Al.pdf
EPA-HQ-OAR-2015-01 1 l-3424.html
EPA-HQ-OAR-2015-01 1 l-2042.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2042-
Al.pdf
EPA-HQ-OAR-2015-0111-3273.html,
EPA-HQ-OAR-2015-01 11-3273-
Al.pdf
EPA-HQ-OAR-2015-0111-1660.html,
EPA-HQ-OAR-2015-01 11-1660-
Al.pdf
EPA-HQ-OAR-2015-01 1 1-3 172.html,
EPA-HQ-OAR-2015-01 1 1-3 172-
Al.pdf
XI
-------
Organization
Kansas Department of
Agriculture (KDA)
Kansas Farm Bureau
Kansas Soybean
Association
Kentucky Beverage
Association
Kentucky Corn Growers
Association
Kentucky State Senate
LanzaTech, Inc.
Ledgewood Auto Body
and Repair LLC
Leifmark LLC
Linn & Associates
Little Sioux Corn
Processors
LMC International, Ltd.
Marathon Petroleum
Company
MARC-IV Consulting
Marine Retailers
Association of the
Americas (MRAA)
Marquis Energy LLC
Maryland Grain Producers
Association
Masco ma LLC, Lallemand
Inc.
Mass Campaign Comment
sponsored by America's
Renewable Future (email) -
(474)
Organization Type
State and Local
Governments and
Organizations
State and Local
Governments and
Organizations
Agribusiness
Other
Companies/Industries
Agribusiness
State and Local
Governments and
Organizations
Renewable Fuels Industry
Other
Companies/Industries
Renewable Fuels Industry
Other
Companies/Industries
Agribusiness
Other
Companies/Industries
Petroleum Fuels Industry
Renewable Fuels Industry
Vehicle Dealers and
Organizations
Renewable Fuels Industry
Agribusiness
Equipment Manufacturers
& Suppliers
Private Citizens
Commenter Name(s)
Jackie McClaskey
Richard Felts
Raylen Phelon
Les Fugate
Russel Schwenke
Whitney Westerfield
Jennifer Holmgren
Robert Suker
Paul Kamp
Jerrod Kitt
Steve Roe
Andrea Kavaler
C. Michael Palmer
Steve Howell & Alan Weber
William Higgins
Dana Gustafson and Mark
Marquis
Lynne Hoot
Christopher Veit
N/A
Docket File(s)
EPA-HQ-OAR-2015-0111-1196.html,
EPA-HQ-OAR-2015-01 11-1 196-
Al.pdf
EPA-HQ-OAR-2015-0111-1195.html,
EPA-HQ-OAR-2015-01 11-1 195-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2340.html
EPA-HQ-OAR-2015-0111-2356.html
EPA-HQ-OAR-2015-01 1 l-2499.html,
EP A-HQ-O AR-20 15-0111 -2499-
Al.pdf
EP A-HQ-O AR-2015-1044
EPA-HQ-OAR-2015-01 1 l-2038.html,
EPA-HQ-OAR-2015-01 11-2038-
Al.pdf
EPA-HQ-OAR-2015-0111-1834.html
EPA-HQ-OAR-2015-0111-1955.html,
EPA-HQ-OAR-2015-01 11-1955-
A2.pdf, EPA-HQ-OAR-2015-01 11-
1955-Al.pdf, EPA-HQ-OAR-2015-
01 ll-2479.html, EP A-HQ-O AR-2015-
0111-2479-Al.pdf
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-0111-1664.html,
EPA-HQ-OAR-2015-01 11-1664-
Al.docx
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-0111-1932.html,
EPA-HQ-OAR-2015-01 11-1932-
Al.pdf
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-0111-1949.html,
EPA-HQ-OAR-2015-01 11-1949-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2800.html,
EP A-HQ-O AR-20 1 5-0 1 1 1 -2800-
Al.pdf
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-01 1 l-0263.html,
EPA-HQ-OAR-2015-01 11-0263-
Al.pdf
EPA-HQ-OAR-2015-0111-1962.html,
EPA-HQ-OAR-2015-01 11-1962-
A2.xls, EPA-HQ-OAR-2015-01 11-
1962-Al.pdf
Xll
-------
Organization
Mass Comment Campaign
sponsored by ActionAid
USA (web) - (2629)
Mass Comment Campaign
sponsored by Adkins
Energy LLC (paper) -
(120)
Mass Comment Campaign
sponsored by American
Ethanol-NASCAR (paper)
-(65)
Mass Comment Campaign
sponsored by American
Motorcyclist Association
(AMA) (web) - (29,379)
Mass Comment Campaign
sponsored by America's
Renewable Future (email) -
(1313)
Mass Comment Campaign
sponsored by anonymous 1
(web) - (23)
Mass Comment Campaign
sponsored by anonymous
10 (email) - (297)
Mass Comment Campaign
sponsored by anonymous
11 (email) - (695)
Mass Comment Campaign
sponsored by anonymous
12 (email) - (560)
Mass Comment Campaign
sponsored by anonymous
13 (web) -(121)
Mass Comment Campaign
sponsored by anonymous
14 (email) - (1339)
Mass Comment Campaign
sponsored by anonymous
15 (email) - (2485)
Mass Comment Campaign
sponsored by anonymous
16 (email) - (189)
Mass Comment Campaign
sponsored by anonymous
17 (email) - (3670)
Mass Comment Campaign
sponsored by anonymous
18 (email) - (7560)
Mass Comment Campaign
sponsored by anonymous
19 (email) -(49 10)
Organization Type
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Commenter Name(s)
N/A
N/A
N/A
Wayne Allard
N/A
N/A
John Becker
Dave Ringkob
Duane Rixe
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Docket File(s)
EPA-HQ-OAR-2015-0111-2553.html,
EPA-HQ-OAR-2015-01 11-2553-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2553-Al.pdf
EPA-HQ-OAR-2015-01 1 l-2956.html,
EP A-HQ-O AR-20 1 5-0 1 1 1 -2956-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2955.html,
EPA-HQ-OAR-2015-01 11-2955-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2049.html,
EP A-HQ-O AR-20 15-0111 -2049-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2049-Al.pdf
EPA-HQ-OAR-2015-0111-1963.html,
EPA-HQ-OAR-2015-01 11-1963-
A2.xlsx, EPA-HQ-OAR-2015-01 11-
1963-Al.pdf
EPA-HQ-OAR-2015-0111-0118.html
EPA-HQ-OAR-2015-0111-0213.html,
EPA-HQ-OAR-2015-01 11-0213-
Al.pdf
EPA-HQ-OAR-2015-0111-0214.html,
EPA-HQ-OAR-2015-01 11-0214-
Al.pdf
EPA-HQ-OAR-2015-0111-0215.html,
EPA-HQ-OAR-2015-01 11-0215-
Al.pdf
EPA-HQ-OAR-2015-0111-0106.html
EPA-HQ-OAR-2015-0111-0216.html,
EPA-HQ-OAR-2015-01 11-0216-
Al.pdf
EPA-HQ-OAR-2015-0111-0217.html,
EPA-HQ-OAR-2015-01 11-0217-
Al.pdf
EPA-HQ-OAR-2015-0111-0218.html,
EPA-HQ-OAR-2015-01 11-0218-
Al.pdf
EPA-HQ-OAR-2015-0111-0219.html,
EPA-HQ-OAR-2015-01 11-0219-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-0220.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -0220-
Al.pdf
EPA-HQ-OAR-2015-01 11-0221-
Al.pdf, EPA-HQ-OAR-2015-01 11-
0221.html
Xlll
-------
Organization
Mass Comment Campaign
sponsored by anonymous 2
(web) -(2781)
Mass Comment Campaign
sponsored by anonymous
20 (email) -(11431)
Mass Comment Campaign
sponsored by anonymous
21 (web) - (13)
Mass Comment Campaign
sponsored by anonymous
22 (email) - (57)
Mass Comment Campaign
sponsored by anonymous
23 (email) - (10)
Mass Comment Campaign
sponsored by anonymous
24 (postcard) - (207)
Mass Comment Campaign
sponsored by anonymous
25 (email) -(11)
Mass Comment Campaign
sponsored by anonymous
26 (web) -(11)
Mass Comment Campaign
sponsored by anonymous
27 (paper) - (120)
Organization Type
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Commenter Name(s)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Docket File(s)
EP A-HQ-O AR-20 15-0111 -0208-
Al.pdf, EP A-HQ-O AR-2015-01 11-
0079.html, EP A-HQ-O AR-2015-01 11-
0208.html
EP A-HQ-O AR-2015-01 1 l-0222.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -0222-
Al.pdf
EP A-HQ-O AR-2015-01 1 l-0279.html
EP A-HQ-O AR-2015-01 ll-1478.html,
EP A-HQ-O AR-2015-01 11-1478-
Al.pdf
EPA-HQ-OAR-2015-0111-1479.html,
EP A-HQ-O AR-2015-01 11-1479-
Al.pdf
EP A-HQ-O AR-2015-01 1 l-2563.html,
EP A-HQ-O AR-2015-01 11-2563-
Al.pdf
EP A-HQ-O AR-2015-01 1 l-2567.html,
EP A-HQ-O AR-20 1 5-0 1 1 1 -2567-
Al.pdf
EP A-HQ-O AR-2015-01 1 l-2826.html
EP A-HQ-O AR-2015-01 1 l-2959.html,
EP A-HQ-O AR-2015-01 11-2959-
Al.pdf
XIV
-------
Organization
Mass Comment Campaign
sponsored by anonymous
28 (USB) -(250, 144)
Mass Comment Campaign
sponsored by anonymous
29 (email) - (29)
Mass Comment Campaign
sponsored by anonymous 3
(web) - (893)
Mass Comment Campaign
sponsored by anonymous
30 (email) - (26)
Mass Comment Campaign
sponsored by anonymous
31 (paper) -(301)
Mass Comment Campaign
sponsored by anonymous
32 (postcard) - (7,903)
Mass Comment Campaign
sponsored by anonymous
33 (paper) - (164)
Mass Comment Campaign
sponsored by anonymous
34 (postcard) - (56)
Mass Comment Campaign
sponsored by anonymous
35 (paper) - (347)
Organization Type
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Commenter Name(s)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Docket File(s)
EPA-HQ-OAR-2015-01 11-2554-
A5.pdf, EPA-HQ-OAR-2015-01 11-
2554-A4.pdf, EPA-HQ-OAR-20 15-
0111-2554-A3.pdf, EPA-HQ-OAR-
2015-0111-2554-A23.pdf, EPA-HQ-
OAR-2015-0111-2554-A22.pdf, EPA-
HQ-OAR-20 1 5-0 1 1 1 -2554-A2 1 .pdf,
EPA-HQ-OAR-2015-01 11-2554-
A20.pdf, EPA-HQ-OAR-2015-01 11-
2554-A17.pdf, EPA-HQ-OAR-20 15-
0111-2554-A19.pdf, EPA-HQ-OAR-
2015-0111-2554-A16.pdf, EPA-HQ-
OAR-2015-0111-2554-A18.pdf, EPA-
HQ-OAR-2015-0111-2554-A15.pdf,
EPA-HQ-OAR-2015-01 11-2554-
A14.pdf, EPA-HQ-OAR-2015-01 11-
2554-A13.pdf, EPA-HQ-OAR-20 15-
0111-2554-A12.pdf, EPA-HQ-OAR-
2015-0111-2554-All.pdf, EPA-HQ-
OAR-2015-0111-2554-A10.pdf, EPA-
HQ-OAR-2015-0111-2554.html, EPA-
HQ-OAR-2015-0111-2554-A2.pdf,
EPA-HQ-OAR-2015-01 11-2554-
Al.pdf, EPA-HQ-OAR-2015-01 11-
2554-A9.pdf, EPA-HQ-OAR-20 15-
0111-2554-A8.pdf, EPA-HQ-OAR-
2015-0111-2554-A7.pdf, EPA-HQ-
OAR-2015-0111-2554-A6.pdf
EPA-HQ-OAR-2015-01 1 l-2558.html,
EPA-HQ-OAR-2015-01 1 1-2558-
Al.pdf
EPA-HQ-OAR-2015-0111-0126.html
EPA-HQ-OAR-2015-01 1 l-2560.html,
EPA-HQ-OAR-20 1 5-0 1 1 1 -2560-
Al.pdf
EPA-HQ-OAR-2015-0111-2561.html,
EPA-HQ-OAR-2015-01 11-2561-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2562.html,
EPA-HQ-OAR-20 1 5-0 1 1 1 -2562-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2957.html,
EPA-HQ-OAR-20 1 5-0 1 1 1 -2957-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-3472.html,
EPA-HQ-OAR-2015-01 1 1-3472-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-3474.html,
EPA-HQ-OAR-2015-01 1 1-3474-
Al.pdf
XV
-------
Organization
Mass Comment Campaign
sponsored by anonymous 4
(web) - (786)
Mass Comment Campaign
sponsored by anonymous 5
(web) - (386)
Mass Comment Campaign
sponsored by anonymous 6
(web) -(391)
Mass Comment Campaign
sponsored by anonymous 7
(email) - (82)
Mass Comment Campaign
sponsored by anonymous 8
(email) - (505)
Mass Comment Campaign
sponsored by anonymous 9
(email) - (230)
Mass Comment Campaign
sponsored by Biodiesel.org
(email) - (93)
Mass Comment Campaign
sponsored by Care2
(email) - (9720)
Mass Comment Campaign
sponsored by Corn, LP
(web) - (37)
Mass Comment Campaign
sponsored by Creppie
Masters (paper) - (120)
Mass Comment Campaign
sponsored by DENCO II.
Absolute Energy. L.L.C.
(paper) - (633)
Mass Comment Campaign
sponsored by employees of
Western Dubuque
Biodiesel (web) - (1)
Mass Comment Campaign
sponsored by Fuels
America (email and paper)
-(213,555)
Mass Comment Campaign
sponsored by Indiana Corn
Growers Association and
Indiana Soybean Alliance
(email) - (304)
Organization Type
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Commenter Name(s)
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Ben Dotson
N/A
Docket File(s)
EPA-HQ-OAR-2015-0111-0127.html
EPA-HQ-OAR-2015-0111-0128.html
EPA-HQ-OAR-2015-0111-0129.html
EPA-HQ-OAR-2015-01 1 l-0209.html,
EP A-HQ-O AR-20 15-0111 -0209-
Al.pdf
EPA-HQ-OAR-2015-0111-0210.html,
EPA-HQ-OAR-2015-01 11-0210-
Al.pdf
EPA-HQ-OAR-2015-0111-0212.html,
EPA-HQ-OAR-2015-01 11-0212-
Al.pdf
EPA-HQ-OAR-2015-0111-0211.html,
EPA-HQ-OAR-2015-01 11-0211-
Al.pdf
EPA-HQ-OAR-2015-0111-1476.html,
EPA-HQ-OAR-2015-01 11-1476-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2047.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2047-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2960.html,
EP A-HQ-O AR-20 1 5-0 1 1 1 -2960-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-0207.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -0207-
Al.pdf
EPA-HQ-OAR-2015-0111-1961.html,
EPA-HQ-OAR-2015-01 11-1961-
Al.pdf
EPA-HQ-OAR-2015-01 11-2555-
Al.pdf, EPA-HQ-OAR-2015-01 11-
2555.html, EP A-HQ-O AR-20 15 -0111-
2555-A6.pdf, EPA-HQ-OAR-2015-
01 ll-2555-A5.pdf, EPA-HQ-OAR-
2015-01 ll-2555-A4.pdf, EPA-HQ-
OAR-2015-01 ll-2555-A3.pdf, EPA-
HQ-OAR-2015-0111-2555-A2.xlsx
EPA-HQ-OAR-2015-0111-3387.html,
EPA-HQ-OAR-2015-01 11-3387-
Al.pdf, EPA-HQ-OAR-2015-01 11-
2568.html, EP A-HQ-O AR-20 15 -0111-
2568-A2.pdf, EPA-HQ-OAR-2015-
01 1 1 -2568-A1 .pdf
XVI
-------
Organization
Mass Comment Campaign
sponsored by Indiana
Soybean Alliance (email) -
(250)
Mass Comment Campaign
sponsored by
KeepAmericaFishing
(web) - (5403)
Mass Comment Campaign
sponsored by Little Sioux
Corn Processors (web) -
(44)
Mass Comment Campaign
sponsored by Minnesota
Corn Growers Association
- (784)
Mass Comment Campaign
sponsored by National
Corn Growers Association
(NCGA)- (24,661)
Organization Type
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Commenter Name(s)
N/A
N/A
N/A
N/A
N/A
Docket File(s)
EPA-HQ-OAR-2015-01 1 l-2569.html,
EP A-HQ-O AR-20 1 5-0 1 1 1 -2569-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2569-Al.pdf
EPA-HQ-OAR-2015-01 1 l-2050.html,
EP A-HQ-O AR-20 15-0111 -2050-
A3.pdf, EPA-HQ-OAR-2015-01 11-
2050-A2.pdf, EP A-HQ-O AR-2015-
0111-2050-Al.pdf
EPA-HQ-OAR-2015-01 1 l-2045.html,
EPA-HQ-OAR-2015-01 1 1-2045-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2962.html,
EP A-HQ-O AR-20 1 5-0 1 1 1 -2962-
Al.pdf, EPA-HQ-OAR-2015-01 11-
2961.html, EPA-HQ-OAR-2015-01 11-
2961-Al.pdf, EPA-HQ-OAR-2015-
01 ll-2570.html, EPA-HQ-OAR-2015-
01 ll-2570-A2.pdf, EP A-HQ-O AR-
2015-0111-2570-Al.pdf
EPA-HQ-OAR-2015-01 11-2565-
Al.pdf, EPA-HQ-OAR-2015-01 11-
2564.html, EP A-HQ-O AR-20 15 -0111-
2564-Al.pdf, EPA-HQ-OAR-2015-
01 ll-2557.html, EPA-HQ-OAR-2015-
0111-2557-Al.pdf, EPA-HQ-OAR-
2015-01 ll-2556.html, EP A-HQ-O AR-
2015-0111-2556-Al.pdf, EPA-HQ-
OAR-2015-01 ll-3477.html, EPA-HQ-
OAR-2015-0111-3477-Al.pdf, EPA-
HQ-OAR-2015-01 ll-3476.html, EPA-
HQ-OAR-2015-0111-3476-Al.pdf,
EPA-HQ-OAR-2015-01 1 l-3475.html,
EPA-HQ-OAR-2015-01 11-3475-
Al.pdf, EPA-HQ-OAR-2015-01 11-
3473.html, EP A-HQ-O AR-20 15 -0111-
3473-Al.pdf, EPA-HQ-OAR-2015-
01 ll-3470.html, EPA-HQ-OAR-2015-
0111-3470-Al.pdf, EPA-HQ-OAR-
2015-01 ll-3389.html, EP A-HQ-O AR-
2015-0111-3389-Al.pdf, EPA-HQ-
OAR-2015-01 ll-3291.html, EPA-HQ-
OAR-2015-0111-3291-Al.pdf, EPA-
HQ-OAR-2015-01 ll-2964.html, EPA-
HQ-OAR-2015-01 1 1-2964-Al.pdf,
EPA-HQ-OAR-2015-01 1 l-2824.html,
EP A-HQ-O AR-20 1 5-0 1 1 1 -2824-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2824-Al.pdf, EPA-HQ-OAR-2015-
01 ll-2566.html, EPA-HQ-OAR-2015-
0111-2566-Al.pdf, EPA-HQ-OAR-
2015-01 ll-2565.html
XV11
-------
Organization
Mass Comment Campaign
sponsored by Nebraska
Corn Board (paper) -
(1856)
Mass Comment Campaign
sponsored by POET
(email) -(661)
Mass Comment Campaign
sponsored by POET
Biorefining (paper) - (25)
Mass Comment Campaign
sponsored by POET
Biorefining 1 (paper) -
(692)
Mass Comment Campaign
sponsored by Quad County
Corn (web) - (37)
Mass Comment Campaign
sponsored by soybean
farmers (email) - (8)
Mass Comment Campaign
sponsored by Vote Vets
(email) - (46994)
Mass Comment Campaign
submitted by DuPont
employees (web) - (1)
Mass Comment Campaign
submitted by employees of
New Leaf Biofuel (web) -
(24)
Mass Comment Campaign
submitted by employees of
Siouxland Energy
Cooperative (web) - (30)
Mass Comment Campaign
submitted by investors in
Golden Grain Energy LLC.
(paper) - (327)
Mass Comment Campaign
submitted by members of
the marine industry (email)
- (408)
Mass Comment Campaign
submitted by recreational
boat owners (email) -
(17697)
Mass Comment Campaign
sponsored by Lincoln
Energy LLC (paper) - (9)
Organization Type
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Private Citizens
Commenter Name(s)
N/A
Sara Andresen
N/A
N/A
N/A
N/A
N/A
Jeppe Nelson
N/A
N/A
N/A
N/A
N/A
N/A
Docket File(s)
EPA-HQ-OAR-2015-0111-3388.html,
EPA-HQ-OAR-2015-01 11-3388-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2772.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2772-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2772-Al.pdf
EPA-HQ-OAR-2015-01 1 l-2954.html,
EP A-HQ-O AR-20 1 5-0 1 1 1 -2954-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2963.html,
EPA-HQ-OAR-2015-01 11-2963-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2046.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2046-
Al.pdf
EPA-HQ-OAR-2015-0111-1480.html,
EPA-HQ-OAR-2015-01 11-1480-
Al.pdf
EP A-HQ-O AR-20 15-0111 -2056-
Al.pdf, EPA-HQ-OAR-2015-01 11-
2056.html, EP A-HQ-O AR-20 15 -0111-
2056-A2.pdf
EPA-HQ-OAR-2015-01 1 l-2825.html
EPA-HQ-OAR-2015-01 1 l-2048.html,
EP A-HQ-O AR-20 15-0111 -2048-
Al.docx
EPA-HQ-OAR-2015-0111-1960.html,
EPA-HQ-OAR-2015-01 11-1960-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2559.html,
EPA-HQ-OAR-2015-01 11-2559-
Al.pdf
EPA-HQ-OAR-2015-0111-1477.html,
EPA-HQ-OAR-2015-01 11-1477-
Al.pdf
EPA-HQ-OAR-2015-0111-3253.html,
EPA-HQ-OAR-2015-01 11-3253-
Al.pdf, EPA-HQ-OAR-2015-01 11-
1475.html, EPA-HQ-OAR-2015-01 11-
1475-Al.pdf
EPA-HQ-OAR-2015-0111-3471.html,
EPA-HQ-OAR-2015-01 11-3471-
Al.pdf
XVlll
-------
Organization
Metropolitan Energy
Center
Michigan Boating
Industries Association
Michigan Corn Growers
Association
Mid-Missouri Energy
Miller, Denis
Minnesota Bio-Fuels
Association (MBA)
Minnesota Corn Growers
Association (MCGA)
Minnesota Corn Research
and Promotion Council
Minnesota Farm Bureau
Minnesota Farmers Union
(MFU)
Minnesota Soybean
Processors (MnSP)
Minnesota State Senate
Minsk, Ronald
Missouri Coalition for the
Environment
Missouri Corn Growers
Association (MCGA)
Missouri Corn
Merchandising Council
Missouri Farm Bureau
(MFB)
Missouri Soybean
Association (MSA)
Organization Type
Other Organizations,
Institutes, and
Foundations
Vehicle Dealers and
Organizations
Agribusiness
Renewable Fuels Industry
Private Citizens
Renewable Fuels Industry
Agribusiness
Agribusiness
State and Local
Governments and
Organizations
State and Local
Governments and
Organizations
Agribusiness
State and Local
Governments and
Organizations
Private Citizens
Environmental Non-
governmental
Organizations
Agribusiness
Agribusiness
State and Local
Governments and
Organizations
Agribusiness
Commenter Name(s)
Kelly Gilbert
Nicki Polan
Jim Zook
Chris Wilson
Denis Miller
Timothy J. Rudnicki
Bruce Peterson
Jerry Demmer
Kevin Paap
Doug Peterson
Ronald Marr
Torrey Westrom, Senator
Ronald E. Minsk
Melissa Vatterott
Kevin Hurst
Morris Heitman
Blake Hurst
Gary Wheeler
Docket File(s)
EPA-HQ-OAR-2015-01 11-1044
EPA-HQ-OAR-2015-01 1 l-3448.html,
EPA-HQ-OAR-2015-01 11-3448-
Al.pdf
EPA-HQ-OAR-2015-01 11-1044
EPA-HQ-OAR-2015-0111-1224.html,
EPA-HQ-OAR-2015-01 11-1224-
A2.pdf, EPA-HQ-OAR-2015-01 11-
1224-Al.pdf
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-0111-1936.html,
EPA-HQ-OAR-2015-01 11-1936-
Al.pdf, EPA-HQ-OAR-2015-01 11-
1905.html, EPA-HQ-OAR-2015-01 11-
1905-Al.pdf
EPA-HQ-OAR-2015-0111-1920.html,
EPA-HQ-OAR-2015-01 11-1920-
Al.pdf
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-01 1 l-2263.html,
EPA-HQ-OAR-2015-01 11-2263-
Al.pdf
EPA-HQ-OAR-2015-0111-1311.html,
EPA-HQ-OAR-2015-0111-1311-
Al.docx
EPA-HQ-OAR-2015-01 1 l-2505.html,
EPA-HQ-OAR-2015-01 11-2505-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-3284.html,
EPA-HQ-OAR-2015-01 11-3284-
Al.pdf
EPA-HQ-OAR-2015-0111-1307.html,
EPA-HQ-OAR-2015-01 11-1307-
Al.pdf
EPA-HQ-OAR-2015-0111-2271.html,
EPA-HQ-OAR-2015-01 11-2271-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2507.html,
EP A-HQ-O AR-20 1 5-0 1 1 1 -2507-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2507-Al.pdf
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-0111-1824.html,
EPA-HQ-OAR-2015-01 11-1824-
Al.pdf
EPA-HQ-OAR-2015-0111-3304.html
XIX
-------
Organization
Monroe Energy, LLC and
Philadelphia Energy
Solutions Refining and
Marketing, LLC
Monsanto
N. Bowdish Company
NAFA Fleet Management
Association
National Association of
Charterboat Operators
National Association of
Convenience Stores
(NACS), National
Association of Truck Stop
Operators (NATSO),
Society of Independent
Gasoline Marketers of
America (SIGMA) and
Petroleum Marketers
Association of America
(PMAA)
National Association of
Truck Stop Operators
(NATSO)
National Biodiesel Board
National Chicken Council
(NCC)
National Corn Growers
Association (NCGA)
Organization Type
Renewable Fuels Industry
Agribusiness
Renewable Fuels Industry
Vehicle Dealers and
Organizations
Other
Companies/Industries
Other
Companies/Industries
Other
Companies/Industries
Renewable Fuels Industry
Agribusiness
Agribusiness
Commenter Name(s)
JohnB. McShane, Thomas J.
Perrelli, Matthew E. Price, and
Micah J. Cogen
Lisa Safarian
Nick Bowdish
Phillip E. Russo
R. F. Zales, II
David Fialkov
David H. Fialkov
Anne Steckel and Joe Jobe
Mike Brown
Chip Bowling
Docket File(s)
EPA-HQ-OAR-2015-01 1 l-2603.html,
EPA-HQ-OAR-2015-01 1 1-2603-
A3.pdf, EPA-HQ-OAR-2015-01 11-
2603-A2.pdf, EP A-HQ-O AR-2015-
0111-2603-Al.pdf
EPA-HQ-OAR-2015-0111-1945.html,
EPA-HQ-OAR-2015-01 11-1945-
Al.pdf
EPA-HQ-OAR-2015-0111-1202.html,
EPA-HQ-OAR-2015-01 11-1202-
Al.pdf
EPA-HQ-OAR-2015-0111-3171.html,
EPA-HQ-OAR-2015-01 11-3 171-
Al.pdf
EPA-HQ-OAR-2015-0111-1922.html,
EPA-HQ-OAR-2015-01 11-1922-
Al.pdf, EPA-HQ-OAR-2015-01 11-
1812.html, EPA-HQ-OAR-2015-01 11-
1812-Al.pdf
EPA-HQ-OAR-2015-01 1 l-2480.html,
EP A-HQ-O AR-20 15-0111-2480-
Al.docx, EPA-HQ-OAR-2015-01 11-
1937-A2.pdf, EPA-HQ-OAR-2015-
01 ll-1921.html, EP A-HQ-O AR-2015-
0111-1921-Al.doc
EPA-HQ-OAR-2015-01 1 l-2478.html,
EP A-HQ-O AR-20 15-0111 -2478-
Al.docx
EPA-HQ-OAR-2015-01 11-1953-
A8.pdf, EPA-HQ-OAR-2015-01 11-
1953-A7.pdf, EPA-HQ-OAR-2015-
01 ll-1953-A6.pdf, EPA-HQ-OAR-
2015-01 ll-1953-A5.pdf, EPA-HQ-
OAR-2015-01 ll-1953-A4.pdf, EPA-
HQ-OAR-2015-01 ll-1953-A3.pdf,
EPA-HQ-OAR-2015-01 11-1953-
A2.pdf, EPA-HQ-OAR-2015-01 11-
1953-A10.pdf, EP A-HQ-O AR-2015-
0111-1953-Al.pdf, EPA-HQ-OAR-
2015-01 ll-1953.html, EPA-HQ-OAR-
2015-01 ll-1953-A9.pdf
EPA-HQ-OAR-2015-0111-1814.html,
EPA-HQ-OAR-2015-01 11-1814-
Al.pdf
EPA-HQ-OAR-2015-01 11-1939-
Al.pdf, EPA-HQ-OAR-2015-01 11-
3276.html, EP A-HQ-O AR-20 15 -0111-
3276-Al.pdf, EPA-HQ-OAR-2015-
01 ll-1939.html
XX
-------
Organization
National Corn-to-Ethanol
Research Center (NCERC
at SIUE)
National Corn-to-Ethanol
Research Center (NCERC)
National Council of Chain
Restaurants (NCCR)
National Farmers Union
(NFU)
National Marine
Manufacturers Association
(NMMA)
National Renderers
Association (NRA)
National Restaurant
Association
National Sorghum
Producers
National Taxpayers Union
(NTU)
Nebraska Energy Office
Nebraska Unicameral
Legislature
Organization Type
Academic Institutions
Academic Institutions
Other
Companies/Industries
Farms
Vehicle Manufacturers
and Organizations
Other
Companies/Industries
Other
Companies/Industries
Agribusiness
Other Organizations,
Institutes, and
Foundations
State and Local
Governments and
Organizations
State and Local
Governments and
Organizations
Commenter Name(s)
John Caupert
John Caupert
M. Scott Vinsonq
Thomas Driscoll and Bonn
Teske and Vern Jantzen
T. Nicole Vasilaros and
Michael Lewan
Nancy E. Foster
Laura Abshire
J.B. Stewart and John Duff
Pete Sepp
David Bracht
Curt Friesen
Docket File(s)
EPA-HQ-OAR-2015-0111-1226.html,
EPA-HQ-OAR-2015-01 11-1226-
A2.pdf, EPA-HQ-OAR-2015-01 11-
1226-Al.pdf
EPA-HQ-OAR-2015-0111-1225.html,
EPA-HQ-OAR-2015-01 11-1225-
A2.pdf, EPA-HQ-OAR-2015-01 11-
1225-Al.pdf
EPA-HQ-OAR-2015-01 11-2258-
Al.docx, EPA-HQ-OAR-2015-01 11-
2258.html
EPA-HQ-OAR-2015-01 11-1662-
Al.pdf, EPA-HQ-OAR-2015-01 11-
1661.html, EPA-HQ-OAR-2015-01 11-
1661-Al.pdf, EPA-HQ-OAR-2015-
01 ll-1657.html, EPA-HQ-OAR-2015-
0111-1657-Al.pdf, EPA-HQ-OAR-
2015-01 ll-2475.html, EP A-HQ-O AR-
2015-0111-2475-Al.pdf, EPA-HQ-
OAR-2015-01 ll-2261.html, EPA-HQ-
OAR-2015-0111-2261-Al.pdf, EPA-
HQ-OAR-2015-01 ll-1913.html, EPA-
HQ-OAR-2015-0111-1913-Al.pdf,
EPA-HQ-OAR-2015-0111-1825.html,
EPA-HQ-OAR-2015-01 11-1825-
Al.pdf, EPA-HQ-OAR-2015-01 11-
1813.html, EPA-HQ-OAR-2015-01 11-
1813-Al.pdf, EPA-HQ-OAR-2015-
01 ll-1679.html, EPA-HQ-OAR-2015-
0111-1679-Al.pdf, EPA-HQ-OAR-
2015-01 ll-1662.html
EPA-HQ-OAR-2015-0111-1928.html,
EPA-HQ-OAR-2015-01 11-1928-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2496.html,
EP A-HQ-O AR-20 15-0111-2496-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2267.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2267-
Al.pdf
EPA-HQ-OAR-2015-0111-1914.html,
EPA-HQ-OAR-2015-01 11-1914-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-3279.html,
EPA-HQ-OAR-2015-01 11-3279-
A2.pdf, EPA-HQ-OAR-2015-01 11-
3279-Al.pdf
EP A-HQ-O AR-2015-1044
EP A-HQ-O AR-2015-1044
XXI
-------
Organization
Nestle
New England Fuel Institute
(NEFI)
New Leaf Biofuel, LLC
Newport Biodiesel
NH Energy Forum
North Dakota Corn
Growers Association
(NDCGA), etal,
North Dakota Ethanol
Council
North Dakota Farmers
Union (NDFU)
North Dakota Grain
Growers Association
North Dakota Office of the
Governor
Northern Canola Growers
Association
Novozymes Americas
NUVUFuels, LLC and
DENCO II
Office of Commissioners,
Lawrence County,
Pennsylvania
Office of the Lt. Governor,
Indianapolis, Indiana
Ohio Corn & Wheat
Growers Association
Organization Type
Other
Companies/Industries
Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
State and Local
Governments and
Organizations
Agribusiness
State and Local
Governments and
Organizations
State and Local
Governments and
Organizations
Agribusiness
State and Local
Governments and
Organizations
Agribusiness
Renewable Fuels Industry
Renewable Fuels Industry
State and Local
Governments and
Organizations
State and Local
Governments and
Organizations
Agribusiness
Commenter Name(s)
Paul Bakus and Joe Sivewright
Jennifer Case
Bob Morton
Dennis Green, Joe Guthrie, and
Joe Sweeney
Blair Thoreson
Jeff Zueger
Kayla Pulvermacher
Mark J. Formo
Jack Dalrymple, Governor
Barry Coleman
Adam Monroe
Mick Miller
Daniel J. Vogler
Sue Ellspermann
Tadd Nicholson
Docket File(s)
EPA-HQ-OAR-2015-0111-1918.html,
EPA-HQ-OAR-2015-01 11-1918-
Al.docx
EPA-HQ-OAR-2015-0111-2501.html,
EPA-HQ-OAR-2015-01 11-2501-
Al.doc
EPA-HQ-OAR-2015-0111-1909.html,
EPA-HQ-OAR-2015-01 11-1909-
Al.pdf
EPA-HQ-OAR-2015-1044
EPA-HQ-OAR-2015-01 1 l-0282.html,
EP A-HQ-O AR-20 15-0111-0282-
Al.pdf, EPA-HQ-OAR-2015-01 11-
0281.html, EPA-HQ-OAR-2015-01 11-
0281-Al.pdf, EPA-HQ-OAR-2015-
01 ll-0280.html, EPA-HQ-OAR-2015-
0111-0280-Al.pdf
EPA-HQ-OAR-2015-0111-2541.html,
EPA-HQ-OAR-2015-01 11-2541-
A4.pdf, EPA-HQ-OAR-2015-01 11-
2541-A3.pdf, EPA-HQ-OAR-2015-
01 ll-2541-A2.pdf, EP A-HQ-O AR-
2015-0111-2541-Al.pdf
EPA-HQ-OAR-2015-0111-1927.html,
EPA-HQ-OAR-2015-01 11-1927-
Al.pdf
EPA-HQ-OAR-2015-0111-1916.html,
EPA-HQ-OAR-2015-01 11-1916-
Al.pdf
EPA-HQ-OAR-2015-01 11-1656-
Al.pdf, EPA-HQ-OAR-2015-01 11-
1656.html
EPA-HQ-OAR-2015-0111-1763.html,
EPA-HQ-OAR-2015-01 11-1763-
A2.pdf, EPA-HQ-OAR-2015-01 11-
1763-Al.pdf
EPA-HQ-OAR-2015-01 1 l-2036.html,
EPA-HQ-OAR-2015-01 11-2036-
Al.doc
EPA-HQ-OAR-2015-01 1 l-3277.html,
EPA-HQ-OAR-2015-01 11-3277-
Al.pdf
EPA-HQ-OAR-2015-01 1 1-263 l.html,
EPA-HQ-OAR-2015-01 11-2631-
Al.pdf
EPA-HQ-OAR-2015-0111-3458.html,
EPA-HQ-OAR-2015-01 11-3458-
Al.pdf
EP A-HQ-O AR-20 15-0111-2482-
Al.pdf, EPA-HQ-OAR-2015-01 11-
2482.html
EPA-HQ-OAR-2015-0111-1723.html,
EPA-HQ-OAR-2015-01 11-1723-
Al.pdf
XXll
-------
Organization
Ohio House of
Representatives
Outdoor Power Equipment
Institute (OPEI)
Pacific Ethanol, Inc.
Paul Bertels Farms
PBF Holding Company
LLC
Pennsylvania Off-Highway
Vehicle Association
Petroleum Marketers
Association of America
(PMAA)
Phillips 66 Company
Poet, LLC
POET-DSM Advanced
Biofuels
Protec Fuel
Quad County Corn
Processors Cooperative
(QCCP)
Renew Kansas
Renewable Energy Group,
Inc. (REG)
Renewable Fuels
Association (RFA)
Rider, Allen
Organization Type
State and Local
Governments and
Organizations
Other
Companies/Industries
Renewable Fuels Industry
Farms
Petroleum Fuels Industry
Other Organizations,
Institutes, and
Foundations
Petroleum Fuels Industry
Petroleum Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
Fuels Industry
Agribusiness
Renewable Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
Private Citizens
Commenter Name(s)
Bill Reineke, State
Representative
Kris Kiser
Tom Koehler
Paul Bertels
Jeffrey Dill
Dick Lepley
Mark S. Morgan
Maria K. Benyshek
Kyle Gilley and Mark DeVries
Dan Cummings
Steve Walk
Delayne D. Johnson
Randy E. Stookey
Anthony Hulen and Gary Haer
Jeff Cooper
Allen Rider
Docket File(s)
EPA-HQ-OAR-2015-01 1 l-3486.html,
EPA-HQ-OAR-2015-01 1 1-3486-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2492.html,
EP A-HQ-O AR-20 15-0111-2492-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2508.html,
EP A-HQ-O AR-20 1 5-0 1 1 1 -2508-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2508-Al.pdf
EPA-HQ-OAR-2015-01 1 l-2799.html,
EP A-HQ-O AR-20 15-0111 -2799-
Al.pdf
EPA-HQ-OAR-2015-0111-1724.html,
EPA-HQ-OAR-2015-01 11-1724-
Al.pdf
EPA-HQ-OAR-2015-0111-1941.html,
EPA-HQ-OAR-2015-01 11-1941-
Al.docx
EPA-HQ-OAR-2015-0111-1197.html,
EPA-HQ-OAR-2015-01 11-1 197-
Al.doc
EPA-HQ-OAR-2015-01 1 l-2039.html,
EPA-HQ-OAR-2015-01 11-2039-
Al.pdf
EPA-HQ-OAR-2015-0111-2481.html,
EPA-HQ-OAR-2015-01 11-2481-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2481-Al.pdf
EPA-HQ-OAR-2015-0111-1943.html,
EPA-HQ-OAR-2015-01 11-1943-
Al.pdf
EPA-HQ-OAR-2015-0111-1194.html,
EPA-HQ-OAR-2015-01 11-1 194-
Al.pdf
EPA-HQ-OAR-2015-0111-1817.html,
EPA-HQ-OAR-2015-01 11-1817-
Al.pdf
EPA-HQ-OAR-2015-0111-1309.html,
EPA-HQ-OAR-2015-01 11-1309-
Al.pdf
EPA-HQ-OAR-2015-0111-1952.html,
EPA-HQ-OAR-2015-01 11-1952-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2540.html,
EP A-HQ-O AR-20 1 5-0 1 1 1 -2540-
A3.pdf, EPA-HQ-OAR-2015-01 11-
2540-A2.pdf, EP A-HQ-O AR-2015-
0111-2540-Al.pdf, EPA-HQ-OAR-
2015-01 ll-1917.html, EP A-HQ-O AR-
2015-0111-1917-Al.pdf
EPA-HQ-OAR-2015-01 11-1043
XX111
-------
Organization
San Diego Regional Clean
Cities Coalition
Senate of Pennsylvania
Shell Oil Products US
Sisk, Joseph
Small Refinery Owners
Coalition
Smithfield Foods, Inc.
Society of Independent
Gasoline Marketers of
America (SIGMA) and the
National Association of
Convenience Stores
(NACS)
Solazyme Inc.
Sonoma Cycle
South Dakota Corn
Growers Association
South Dakota Farmers
Union
South Dakota Soybean
Assocation
Organization Type
Environmental Non-
governmental
Organizations
State and Local
Governments and
Organizations
Fuels Industry
Private Citizens
Fuels Industry
Other
Companies/Industries
Other
Companies/Industries
Renewable Fuels Industry
Other
Companies/Industries
Agribusiness
State and Local
Governments and
Organizations
State and Local
Governments and
Organizations
Commenter Name(s)
Kevin Wood
Michele Brooks
John E. Reese
Joseph Sisk
LeAnn Johnson Koch,
PerkinsCole; Bob Neufeld
Stewart T. Leeth
R. Timothy Columbus
Graham Ellis
Jason Arrien
Keith Alverson, Troy Knecht,
and Lisa Richardson
Doug Sombke, Chad Johnson,
Terry Sestak, Jim Wahle, Lynn
Frey, Joel Keierleber, and
Franklin Olson
John Horter
Docket File(s)
EPA-HQ-OAR-2015-0111-1719.html,
EPA-HQ-OAR-2015-01 11-1719-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-3447.html,
EPA-HQ-OAR-2015-01 11-3447-
Al.pdf
EPA-HQ-OAR-2015-0111-2716.html,
EPA-HQ-OAR-2015-01 11-2716-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2716-Al.pdf
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-0111-2339.html,
EPA-HQ-OAR-2015-01 11-2339-
Al.pdf
EPA-HQ-OAR-2015-0111-2041.html,
EPA-HQ-OAR-2015-01 11-2041-
Al.pdf
EPA-HQ-OAR-2015-01 11-1937-
Al.pdf, EPA-HQ-OAR-2015-01 11-
1937.html
EPA-HQ-OAR-2015-01 1 l-2497.html,
EP A-HQ-O AR-20 15-0111-2497-
Al.pdf
EPA-HQ-OAR-2015-0111-1930.html,
EPA-HQ-OAR-2015-01 11-1930-
Al.pdf
EPA-HQ-OAR-2015-0111-1811.html,
EPA-HQ-OAR-2015-01 11-1811-
Al.pdf, EPA-HQ-OAR-2015-01 11-
0269.html, EPA-HQ-OAR-2015-0111-
0269-Al.pdf
EPA-HQ-OAR-2015-01 1 l-2579.html,
EP A-HQ-O AR-20 1 5-0 1 1 1 -2579-
Al.docx, EPA-HQ-OAR-2015-01 11-
2578.html, EP A-HQ-O AR-20 15 -0111-
2578-Al.docx, EPA-HQ-OAR-2015-
01 ll-2363.html, EPA-HQ-OAR-2015-
0111-2363-Al.pdf, EPA-HQ-OAR-
2015-01 ll-2362.html, EP A-HQ-O AR-
2015-01 11-2362-Al.docx, EPA-HQ-
OAR-2015-01 ll-2360.html, EPA-HQ-
OAR-2015-0111-2360-Al.docx, EPA-
HQ-OAR-2015-01 ll-2359.html, EPA-
HQ-OAR-2015-0111-2359-Al.docx,
EPA-HQ-OAR-2015-0111-2358.html,
EPA-HQ-OAR-2015-01 11-2358-
Al.docx
EPA-HQ-OAR-2015-0111-1308.html,
EPA-HQ-OAR-2015-01 11-1308-
Al.pdf
XXIV
-------
Organization
Specialty Equipment
Market Association
(SEMA)
Sprague Operating
Resources LLC
St. Louis Clean Cities
Program
STAR Energy
State of Indiana
State of Indiana House of
Representatives
State of Nebraska
State of South Dakota
Syngeta
Tenaska Commodities,
LLC
The Andersons, Inc.
The Boat Owners
Association of The United
States (BOATU.S.)
Trenton Agri Products
LLC
U.S. Canola Association
(USCA)
Unilever
Organization Type
Equipment Manufacturers
& Suppliers
Renewable Fuels Industry
Other Organizations,
Institutes, and
Foundations
Renewable Fuels Industry
State and Local
Governments and
Organizations
State and Local
Governments and
Organizations
State and Local
Governments and
Organizations
State and Local
Governments and
Organizations
Agribusiness
Renewable Fuels Industry
Renewable Fuels Industry
Other
Companies/Industries
Agribusiness
Agribusiness
Other
Companies/Industries
Commenter Name(s)
Stephen B. McDonald
Steven J. Levy
Kevin Herdler
Jason Stauffer
Jean Leising, Senator
Don Lehe
Governor Pete Ricketts
Dennis Daugaard
Jack Bernens
Jason Meers
Mike Anderson, Sr.
David Kennedy
Charles B.Wilson
Jeff Scott
Mark Bescher
Docket File(s)
EPA-HQ-OAR-2015-01 1 l-2490.html,
EP A-HQ-O AR-20 15-0111-2490-
Al.pdf
EPA-HQ-OAR-2015-0111-1924.html,
EPA-HQ-OAR-2015-01 11-1924-
Al.pdf
EPA-HQ-OAR-2015-01 11-1044
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-0111-3347.html,
EPA-HQ-OAR-2015-01 11-3347-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-3466.html,
EPA-HQ-OAR-2015-01 11-3466-
Al.pdf
EPA-HQ-OAR-2015-0111-1810.html,
EPA-HQ-OAR-2015-01 11-1810-
Al.pdf
EPA-HQ-OAR-2015-0111-1919.html,
EPA-HQ-OAR-2015-01 11-1919-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2493.html,
EPA-HQ-OAR-2015-01 11-2493-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-0503.html,
EPA-HQ-OAR-2015-01 11-0503-
Al.pdf
EP A-HQ-O AR-20 1 5-0 1 1 1 -2509-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2509-Al.pdf, EPA-HQ-OAR-2015-
01 11-2275. html, EPA-HQ-OAR-2015-
01 ll-2275-A2.pdf, EP A-HQ-O AR-
2015-0111-2275-Al.pdf, EPA-HQ-
OAR-2015-01 ll-2779.html, EPA-HQ-
OAR-2015-01 1 l-2509.html
EPA-HQ-OAR-2015-01 1 l-2265.html,
EPA-HQ-OAR-2015-01 1 1-2265-
Al.pdf
EPA-HQ-OAR-2015-0111-1686.html,
EPA-HQ-OAR-2015-01 11-1686-
Al.pdf
EPA-HQ-OAR-2015-0111-1819.html,
EPA-HQ-OAR-2015-01 11-1819-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2273.html,
EPA-HQ-OAR-2015-01 11-2273-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2273-Al.pdf
XXV
-------
Organization
Union of Concerned
Scientists
Union of Concerned
Scientists (UCS), Clean
Air Task Force,
Environmental Working
Group, ActionAid USA,
and National Wildlife
Federation (NWF)
Union of Concerned
Scientists; Natural
Resources Defense
Council; National Wildlife
Federation
United States Senate
Urban Air Initiative
Organization Type
Non-governmental
Institutes and Foundations
(other than
Environmental)
Environmental Non-
governmental
Organizations
Environmental Non-
governmental
Organizations
Federal Government
Non-governmental
Institutes and Foundations
(other than
Environmental)
Commenter Name(s)
Jeremy Martin, David M.
Babson
Jeremy I. Martin, Jonathan
Lewis, Emily Cassidy, Kelly
Stone, and Ben Larson
David M. Babson
Joni Ernst
Docket File(s)
EPA-HQ-OAR-2015-0111-3523.html,
EPA-HQ-OAR-2015-01 11-3523-
Al.pdf, EPA-HQ-OAR-2015-01 11-
2260.html, EPA-HQ-OAR-2015-0111-
2260-A2.pdf, EP A-HQ-O AR-2015-
0111-2260-Al.pdf
EPA-HQ-OAR-2015-01 1 l-2476.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2476-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-2477.html,
EP A-HQ-O AR-20 1 5 -0 1 1 1 -2477-
Al.pdf
EPA-HQ-OAR-2015-01 1 l-3427.html
EPA-HQ-OAR-2015-0111-1821.html,
EPA-HQ-OAR-2015-01 11-1821-
AS.docx, EPA-HQ-OAR-2015-01 11-
1821-A2.docx, EP A-HQ-O AR-2015-
0111-1821-Al.docx
XXVI
-------
Organization
Valero Companies
Vets for Energy
Volvo Lexington
Operation
W2Fuel LLC
WB Services
Western Canada Biodiesel
Association
Western Dubuque
Biodiesel
Organization Type
Fuels Industry
Other Organizations,
Institutes, and
Foundations
Other
Companies/Industries
Renewable Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
Commenter Name(s)
Richard J. Walsh
Dennis George
Thomas V. Hale
N/A
Bernie Hoffman
Ian Thomson
Tom Brooks
Docket File(s)
EPA-HQ-OAR-2015-01 1 1-2765-
A37.pdf, EPA-HQ-OAR-2015-01 11-
2765-A36.pdf, EPA-HQ-OAR-2015-
01 ll-2765-A35.pdf, EPA-HQ-OAR-
2015-01 ll-2765-A34.pdf, EPA-HQ-
OAR-2015-01 ll-2765-A33.pdf, EPA-
HQ-OAR-2015-01 1 l-2765-A32.pdf,
EPA-HQ-OAR-2015-01 1 1-2765-
A31.pdf, EPA-HQ-OAR-2015-01 11-
2765-A30.pdf, EPA-HQ-OAR-2015-
01 ll-2765-A3.pdf, EPA-HQ-OAR-
2015-01 ll-2765-A29.pdf, EPA-HQ-
OAR-2015-01 ll-2765-A28.pdf, EPA-
HQ-OAR-2015-01 1 l-2765-A27.pdf,
EPA-HQ-OAR-2015-01 1 1-2765-
A26.pdf, EPA-HQ-OAR-2015-01 11-
2765-A25.pdf, EPA-HQ-OAR-2015-
01 ll-2765-A24.pdf, EPA-HQ-OAR-
2015-01 ll-2765-A23.pdf, EPA-HQ-
OAR-2015-01 ll-2765-A22.pdf, EPA-
HQ-OAR-2015-01 ll-2765-A21.pdf,
EPA-HQ-OAR-2015-01 1 1-2765-
A20.pdf, EPA-HQ-OAR-2015-01 11-
2765-A2.pdf, EPA-HQ-OAR-2015-
01 ll-2765-A19.pdf, EPA-HQ-OAR-
2015-01 ll-2765-A18.pdf, EPA-HQ-
OAR-2015-01 ll-2765-A17.pdf, EPA-
HQ-OAR-2015-01 ll-3530.html, EPA-
HQ-OAR-2015-01 ll-2765-A16.pdf,
EPA-HQ-OAR-2015-01 11-3530-
Al.pdf, EPA-HQ-OAR-2015-01 11-
2765-A15.pdf, EPA-HQ-OAR-2015-
01 11-2765. html, EPA-HQ-OAR-2015-
01 ll-2765-A14.pdf, EPA-HQ-OAR-
2015-01 ll-2765-A9.pdf, EPA-HQ-
OAR-201
EPA-HQ-OAR-2015-01 1 l-2473.html,
EPA-HQ-OAR-2015-01 11-2473-
Al.pdf
EPA-HQ-OAR-2015-0111-0538.html,
EPA-HQ-OAR-2015-01 11-0538-
Al.pdf
EPA-HQ-OAR-2015-0111-2053.html
EPA-HQ-OAR-2015-01 11-1044
EPA-HQ-OAR-2015-01 1 l-0265.html,
EPA-HQ-OAR-2015-01 1 1-0265-
Al.pdf
EPA-HQ-OAR-2015-1044
XXV11
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Organization
Western Plains Energy,
LLC (WEP)
White Energy
Wisconsin BioFuels
Association
Wisconsin Corn Growers
Association (WCGA)
Wisconsin Farm Bureau
Federation
World Agricultural,
Economic, and
Environmental Analysis
ZeaChem Inc.
Organization Type
Renewable Fuels Industry
Renewable Fuels Industry
Renewable Fuels Industry
Agribusiness
State and Local
Governments and
Organizations
Other
Companies/Industries
Renewable Fuels Industry
Commenter Name(s)
Derek Peine, Curtis V. Sheldon,
and Tracy Ellegood
Don Gales
Erik Huschitt
Karen GerVert
John Kruse
Joseph A. Regnery
Docket File(s)
EPA-HQ-OAR-2015-01 1 l-2958.html,
EPA-HQ-OAR-2015-01 1 1-2958-
Al.pdf, EPA-HQ-OAR-2015-01 11-
2471.html, EPA-HQ-OAR-2015-01 11-
2471-Al.pdf, EPA-HQ-OAR-2015-
01 11-0283. html, EPA-HQ-OAR-2015-
0111-0283-Al.pdf
EPA-HQ-OAR-2015-01 11-1043
EPA-HQ-OAR-2015-0111-2539.html,
EPA-HQ-OAR-2015-01 11-2539-
A2.pdf, EPA-HQ-OAR-2015-01 11-
2539-Al.pdf
EPA-HQ-OAR-2015-0111-1830.html
EPA-HQ-OAR-2015-0111-1716.html,
EPA-HQ-OAR-2015-01 11-1716-
Al.docx
EPA-HQ-OAR-2015-1044
EPA-HQ-OAR-2015-0111-1906.html,
EPA-HQ-OAR-2015-01 11-1906-
Al.pdf
XXVlll
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Introduction
There was a high level of interest in the Proposed Rule for the Renewable Fuel Standard
Program: Standards for 2014, 2015, and 2016 and Biomass-Based Diesel Volume for 2017. We
had a high turnout at the June 25, 2015 public hearing in Kansas City, Missouri for the proposal
with about 250 parties providing testimony and we received over 670,000 comments from
stakeholders in the oil, renewable fuel, and agricultural industries, as well as from small
businesses, state and local governments, congressional members, non-governmental
organizations (NGOs), universities, and private citizens.
In this response to comments (RTC) document, we organized the comments into ten main
sections and a number of subsections. The sections are organized to align as closely as possible
to the final rule to provide easier cross reference for readers trying to locate information on a
particular topic of interest. This RTC document is organized under the following main section
topics:
• Section 1: General Comments
• Section 2: Proposed National Volume Requirements for Advanced Biofuel and Total
Renewable Fuel
• Section 3: Proposed National Volume Requirement for Biomass-Based Diesel for 2014 -
2017
• Section 4: Proposed Cellulosic Biofuel Standards
• Section 5: Proposed Percentage Standards
• Section 6: Treatment of Carryover RINs
• Section 7: Economic Impacts of the Proposed Rule
• Section 8: Environmental Impacts of the Proposed Rule
• Section 9: Proposed Changes to Regulations
• Section 10: Other Comments
Similar to RTC documents that EPA has prepared for other rulemakings, the general layout of
each subsection is organized such that excerpts of comments based on a particular topic are first
provided, and then EPA's response to the collection of comments represented by the excerpts
follows. The excerpts include either portions of a commenter's submission on a particular topic,
or the entirety of the commenter's submission if the breadth of the comments were narrow
enough. In general, EPA has associated comments with a specific commenter in responding to
comments. However, due to the large number of comments that addressed similar issues, as well
as the volume of the comments received, EPA did not attempt to identify for each response every
comment or commenter addressed by the response.
In comparison to most other RTC documents, this document has an additional layer of
complexity which is atypical due to the intertwined nature of a number of relevant issues and the
breadth of factors and issues that we had to consider during this multi-year rulemaking.
Therefore, this document is much larger than other RTC documents prepared in past annual
Renewable Fuel Standard (RFS) rulemakings. In responding to the Notice of Proposed
Rulemaking (NPRM), many stakeholders discussed the relevant issues in ways that demonstrated
their interconnectedness. Due to this complexity, we were not always able to separate out the
-------
comments under a specific topic area, and at times had to retain comments in part or in whole
that spanned across multiple topic areas because it was necessary to retain the context of the
comments. We have made every attempt to place stakeholder comments into the subsections that
are most directly related to the primary topic being address, but in many cases multiple topics
were addressed in the same comment, and often within the same paragraph of a stakeholder's
comment. If the comment was crafted such that breaking up the issues would lose the point and
context of the comm enter's position, then we have retained the comment in whole, and have
provided references to each section that provides substantive explanation of how the issues
raised were considered and addressed in the final rule. In some cases, comments could be
categorized as belonging to multiple sections, and thus comments as well as responses to the
issues raised by a comment may be located in in multiple sections. In other cases, we have
deleted multiples of the same language if the same language was submitted by multiple
commenters. This does not mean that we have not responded to the entities that are not listed.
We believe responding to the issues raised is sufficient to respond to the commenters submitting
the same comment. Other comments that did not fit neatly under a particular section or
subsection were either included in the "Section 10: Other Comments," or included in a particular
section with a response immediately following the comment. In addition, this document serves to
respond to many comments that are not explicitly included in this document, such as individual
citizen comments, specifically when the issues raised were already included in other commenters
and addressed by the responses.
Finally, this RTC document is also atypical in the breadth and magnitude of comments received
that are either outside the scope of the rulemaking or only tangentially related. We have often
noted when comments are outside the scope of the rulemaking, and, although not required for the
purposes of this rulemaking, have in some cases provided a response where we determined that it
would promote understanding of the RFS program. The fact that EPA has provided a response to
such comments should not be interpreted as opening or reopening any issue or converting a
comment that is beyond the scope of this rulemaking into one that is relevant to the rule.
The responses presented in this document are intended to augment the responses to comments
that appear in the final rule and to address comments not discussed in the final rule. Although
portions of the final rule are paraphrased in this RTC document, and some comments are
discussed in the both documents, to the extent such paraphrasing or overlap in comment
responses introduces any confusion or apparent inconsistency it is our intention that the preamble
to the final rule be viewed as definitive. This document, together with the final rule, docket
memoranda and related technical support documents, should be considered collectively as EPA's
response to all of the significant comments submitted on EPA's proposed rule.
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1. General Comments
1.1 Supports Rule
Comment:
Americans for Prosperity
While Americans for Prosperity supports efforts to repeal the RFS in its entirety, we're
encouraged to see that the EPA has proposed to reduce the overall renewable fuel blending
requirements. This proposed rule is a step in the right direction to relieving American families
and businesses from the harmful effects of this energy mandate, but it does not go far enough.
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1043, p. 235.]
In general, AFP opposes the RFS because it's harmful to consumers and because it represents a
special interest corporate welfare carve-out.
AFP is encouraged by any proposed reduction in the overall renewable fuel blending
requirements, but we continue to believe that this mandate is harmful at any level, and we hope
American Automobile Association (AAA)
AAA supports the Environmental Protection Agency's efforts to improve air quality and believes
that a comprehensive portfolio of policies are required to meet the nation's overall environmental
and energy goals. Moving forward, we believe that the aforementioned policies should be
implemented in a manner that produces the desired benefits while simultaneously ensuring the
fair treatment and protection of motorists.
We applaud the EPA for recognizing the current constraints in the fuel market and for adjusting
the Renewable Fuel Standard's volumetric requirements for 2014, 2015, and 2016 to be more
reflective of current market realities. AAA appreciates the fact that the Agency has proposed
targets that recognize the diversity of the exiting vehicle fleet, and appear to be keeping the
needs of the average motorist front of mind. However, a number of our previously voiced
concerns remain. [EPA-HQ-OAR-2015-0111-2037-A1 p.l]
The proposed volumetric requirements are a step in the right direction. They support the
continued development of alternative fuels, while also recognizing the needs of motorists who
drive every day. EPA should continue to set and reassess targets based on actual market realities,
and increase outreach and educational efforts designed to prevent misfueling. In the interim,
AAA will continue to encourage the motoring public to consult their owner's manuals and/or the
vehicle manufacturer's website before using El 5 in their vehicles. [EPA-HQ-OAR-2015-0111-
2037-A1 p.2]
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Brazilian Sugarcane Industry Association (UNICA)
UNICA is supportive of EPA's efforts to bring the 2015 and 2016 volumes up from 2014 and so
drive significant growth in production of the fuels into the future. UNICA further supports EPA's
intention to move beyond the blendwall issue and its perceived constraints [EPA-HQ-OAR-
2015-01 ll-2495-Alp.26]
California Dairy Campaign
We support the efforts of the Environmental Protection Agency (EPA) to reduce the corn ethanol
level in the Renewable Fuels Standard's volume mandate. We consider the proposed reduction to
be too small to decrease pressure on corn demand or significantly lower the amount of U.S.
produced corn used to make corn ethanol. However, we do believe it is an important step in the
right direction in comprehensively reforming our national renewable fuels standard as it relates
to corn ethanol. [EPA-HQ-OAR-2015-0111-1816-A1 p.l]
Energy Policy Research Foundation, Inc. (EPRINC)
Congress provided EPA with widespread latitude to ensure the volumetric targets set by EPA
would be tempered by common sense, the current state of technology, available supply, and even
economic harm to the national economy. In this regard, EPA should be commended for
recognizing emerging price and technology constraints from requiring blending volumes of
renewable fuel above 10 percent of the gasoline pool. [EPA-HQ-OAR-2015-0111-1946-A1 p.l]
Illinois Soybean Growers (ISG)
Illinois soybean growers are proud to support biodiesel fuels and an industry that creates jobs
and stimulates rural and urban Illinois economies. [EPA-HQ-OAR-2015-0111-3428 p.2]
Imperium Renewables and Renewable Biofuels
We welcome EPA's proposal for biomass-based diesel (BED) and advanced biofuel (AB)
volumes for 2014-2017. This proposed rule is a significant improvement from the one that the
EPA released in November 2013. [EPA-HQ-OAR-2015-0111-2043-Al p.l]
Independent Fuel Terminal Operators Association (IFTOA)
IFTOA is an association of importers, marketers, blenders, and exporters - all of which own
and/or operate petroleum terminals. Most Members are obligated parties, and all are subject to
the Renewable Fuel Standard ("RFS") Program. IFTOA supports EPA's efforts to recognize and
address the constraints that exist in the commercial market (the blendwall and its attendant
problems) and to balance those operating restrictions with Congressional intent to increase
renewable fuels in the transportation pool. The proposals for 2014 and 2015 generally achieve a
reasonable balance, but the volumes for 2016 raise uncertainties and difficulties discussed
below. However, and most importantly, Members of the Association have serious concerns
about future more ambitious mandates. They believe that EPA should continue to exercise its
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waiver authority to prevent shortages in transportation fuels and corresponding higher fuel prices
for consumers. [EPA-HQ-OAR-2015-0111-1947-A1 p. 2]
It appears that EPA has taken a new approach to administering the RFS Program in this proposed
rule. The Agency recognizes the blendwall and other infrastructure restrictions in the near-term -
- as the reality of the market during 2014 and 2015 — and has properly reduced the mandates for
the four categories of renewable fuels. [EPA-HQ-OAR-2015-0111-1947-A1 p. 2]
The Independent Fuel Terminal Operators Association supports EPA's exercise of its waiver
authority to reduce the RFS mandates, thereby ensuring that the mandates more properly align
with market conditions. [EPA-HQ-OAR-2015-0111-1947-A1 p. 8]
Mass Comment Campaign sponsored by anonymous 11 (email) - (695)
Additionally, renewable fuels are better for the air we breathe and for our environment [EPA-
HQ-OAR-2015-0111-0214-A1 p.l]
Mass Comment Campaign sponsored by anonymous 20 (email) - (11431)
While I'm pleased to see that the RFS biofuel-blend standards proposed by your agency aren't as
extreme as they could be, I urge the EPA to revise proposed standards further—to the lowest
blend levels permissible by law. [EPA-HQ-OAR-2015-0111-0222-A1 p.l]
The Renewable Fuel Standard is a failed policy. It's contributed to higher food and grocery costs,
harm to the environment, and could lead to damage to older vehicles and small engines. [EPA-
HQ-OAR-2015-0111-0222-A1 p.l]
If I had my way, Congress would repeal the RFS entirely. But until that happens, the EPA should
limit the policy to the least possible harm by reducing fuel blend standards as much as the law
will allow. [EPA-HQ-OAR-2015-0111-0222-A1 p.l]
Demand for high ethanol-blend fuel just isn't there. Please listen to the American people on this
issue and reduce the burden the RFS places on each of us. [EPA-HQ-OAR-2015-0111-0222-A1
p.l]
Mass Comment Campaign sponsored by anonymous 28 (USB) - (250,144)
The Renewable Fuel Standard has contributed to higher food and grocery costs, harms the
environment and could lead to damage in older vehicles and small engines. [EPA-HQ-OAR-
2015-0111-2554-Alp.l]
It is unpopular with the public. It is a failed policy and it should be repealed by Congress. [EPA-
HQ-OAR-2015-0111-2554-A1 p.l]
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But until that happens, the EPA should minimize the damage done by the RFS by reducing the
fuel blend standards by as much as the law allows, including ensuring the availability of ethanol -
free gasoline. [EPA-HQ-OAR-2015-0111-2554-A1 p.l]
Please do the right thing and reduce the burden the RFS places on American families and the
American economy. [EPA-HQ-OAR-2015-0111-2554-A1 p.l]
Mass Comment Campaign sponsored by anonymous 4 (web) - (786)
The EPA recently proposed lowering the amount of ethanol in gasoline below limits set in the
law - but it still undermines access to affordable, energy-efficient fuel for millions of American
motorists across the country. [EPA-HQ-OAR-2015-0111-0127 p.l]
EPA policies should not result in the mandate of more expensive, less efficient sources of energy
that cause more trips to gas stations and more money spent at the pump. As such, the EPA should
lower the ethanol levels in their final ruling to minimize the policy's financial burden on
American consumers. [EPA-HQ-OAR-2015-0111-0127 p.l]
Missouri Coalition for the Environment
The Environmental Protection Agency (EPA) has proposed to update the federal Renewable
Fuels Standard (RFS) by increasing the amount of biofuel required to be blended with our
gasoline supply, but at levels lower than required by the original legislation. We've read the
headlines and heard the sound bites on corn ethanol's so-called environmental benefits, but as
fact-based science makes clear, corn ethanol's promised environmental benefits are a myth. The
ethanol mandate incentivizes the expansion and intensification of corn production on marginal
lands causing harmful effects on water, soil, and habitat. Furthermore, corn-based ethanol has
not provided the carbon emission reductions its advocates promised. We support EPA in using
the tools provided by Congress to waive the annual volume requirements of ethanol in the RFS
below statutory levels. [EPA-HQ-OAR-2015-0111-2271-A1 p. 1]
National Association of Truck Stop Operators (NATSO)
NATSO's members generally support the Proposal because it appropriately recognizes that the
RFS has the potential to cause problems in the retail fuels market if left unchanged. The
Proposal appropriately seeks to address these potential problems without undermining the
principles on which the Program is premised: diversifying fuel supply, increasing the overall fuel
supply, encouraging domestic fuel production, and lowering fuel costs for American consumers.
[EPA-HQ-OAR-2015-0111-2478-A1 p.2]
National Chicken Council (NCC)
NCC is supportive of EPA's proposed actions to adjust the biofuels targets for 2014, 2015, and
2016 to reflect the practical limits imposed by the blendwall. NCC strongly believes this
adjustment is necessary and that lowering the proposed target levels from the recommended
statutory levels prescribed by the Energy Independence and Security Act of 2007 (EISA) are an
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important step toward ensuring the RFS reflects reasoned economic and environmental policy.
[EPA-HQ-OAR-2015-0111-1814-Alp.l]
NCC would, however, support further reductions in the target level for conventional biofuels for
2015 and 2016 to account for the distorting effects the RFS has on the market for corn, substitute
feed products, chicken prices, and food prices in general. [EPA-HQ-OAR-2015-0111-1814-A1
p.l]
National Taxpayers Union (NTU)
On behalf of the members of National Taxpayers Union (NTU), I write to express our concerns
regarding the recently issued "Standards for the Renewable Fuel Standard (RFS) Program for
2014, 2015, and 2016." Though long overdue, the Environmental Protection Agency (EPA)
deserves credit for recognizing in its announcement that "the volume targets specified by
Congress in the Clean Air Act for 2014, 2015, and 2016 cannot be achieved," by virtue of being
overly ambitious and out of step with the current market. Nonetheless, despite modest reductions
from the statutory levels, the Renewable Volume Obligations (RVO) targets prescribed under the
proposed rule are not sufficiently limited to provide the relief taxpayers and consumers need.
[EPA-HQ-OAR-2015-0111-3279-A1 p.l]
Until Congress takes action to repeal or reform the broken RFS, the EPA has the authority and
responsibility to set some sensible boundaries on this policy that will protect as many Americans
as possible. [EPA-HQ-OAR-2015-0111-3279-A1 p.2]
Nestle
EPA expressed a desire that comments on the proposed rules for 2014-16 be 'succinct,' and we
will not reiterate all the information we provided in comments on prior rulemakings. We would
simply repeat our basic support for the direction EPA has taken in the proposed rule, but also our
caution that the growth path for corn ethanol can still have unintended - and negative -
consequences. [EPA-HQ-OAR-2015-0111-1918-A1 p.4]
Specialty Equipment Market Association (SEMA)
SEMA is encouraged by the EPA's decision to decrease the required amounts for this time
period. This is a clear indication that the EPA recognizes that the current marketplace cannot
sustain increased levels of ethanol through sales of gasoline with 10 percent ethanol (E10), and
that sales of 15 percent ethanol (E15) are limited. [EPA-HQ-OAR-2015-0111-2490-A1, p. 1]
Unilever
We believe EPA's proposed renewable volume obligation (RVOs) for 2014 and 2015 are a
sound and modest step to avoid the higher gasoline and diesel fuel prices projected by
economists including Advanced Economic Solutions.1 [EPA-HQ-OAR-2015-Oil 1-2273-A2 p.l]
1 Testimony to the EPA Hearing Regarding Proposed 2014/2015/2016 Standards for the
Renewable Fuel Standard Programs - June 25, 2015
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Volvo Lexington Operation
I am writing to oppose the EPA proposal (EPA-HQ-OAR-2015-0111), which will increase the
ethanol volumes to historic levels. This is a misguided decision that fails to take into account
years of objective studies and analysis on the dangers of ethanol to the American public and
environment. [EPA-HQ-OAR-2015-0111-0538-A1 p.l]
Response:
The fundamental objective of the RFS provisions under the CAA is clear: to increase the use of
renewable fuels in the U.S. transportation system every year through at least 2022. These fuels
include corn starch ethanol, the predominant biofuel in use to date, but Congress envisioned the
majority of growth over time to come from advanced biofuels, as the non-advanced
(conventional) volumes remain constant starting in 2015 while the advanced volumes continue to
grow. Cellulosic biofuels are required to have 60 percent or greater greenhouse gas (GHG)
emissions benefits on a lifecycle basis than the petroleum based fuels they replace; advanced
biofuels 50 percent or greater benefit; and conventional biofuels (other than grandfathered
facilities) 20 percent or better benefit. Increased use of renewable fuels means less use of fossil
fuels, which results in lower GHG emissions over time as advanced biofuel production and use
becomes more commonplace. By diversifying the country's fuel supply, increased use of
renewable fuels will also increase the nation's energy security. Renewable fuels represent an
opportunity for the U.S. to move away from fossil fuels towards a set of lower GHG
transportation fuels, and a chance for a still-developing low GHG technology sector to grow.
Our decision to finalize volumes for total renewable fuel that rely on exercising the general
waiver authority is based on the same fundamental reasoning we relied upon in the June 10, 2015
proposal. Despite significant increases in renewable fuel use in the United States, real-world
constraints, such as the slower than expected development of the cellulosic biofuel industry and
constraints in supplying certain biofuels to consumers, have made, at least the near term timeline
laid out by Congress impossible to achieve. These challenges remain, even as we recognize the
success of the RFS program over the past decade in boosting renewable fuel production and use,
and the recent signs of progress towards development of increasing volumes of advanced, low-
emitting GHG fuels, including cellulosic biofuels. The challenge we faced in developing this
final rule is increasing renewable fuels over time while also accounting for the real-world
constraints that have slowed progress. The approach we have taken in this final rule is designed
to achieve this objective.
Many commenters are supportive of the proposed rule but for varying, and at times opposing
reasons. Some commenters express overall support for the proposed increase of volumes above
the prior November 2013 proposal and getting back on track with the statutory deadlines for the
annual volume rulemakings. Some commenters stated EPA is moving in the right direction to
increase 2015 and 2016 volumes up from 2014 and go beyond the blendwall. Other commenters
provide support for increased volumes for the 2014-2017 proposed volumes for the advanced
biofuel and biomass-based diesel, referencing that this increase will help support jobs and
stimulate the economy. EPA acknowledges these comments and is establishing final volume
requirements that will push the fuels sector to produce and blend more renewable fuels in 2016
in a manner that is consistent with the goals Congress envisioned. While, the final volumes are
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less than the statutory targets for 2016 they are higher than what the market would produce and
use in the absence of such market-driving standards. The 2016 standards are expected to spur
further progress in overcoming current constraints and lead to continued growth in the
production and use of qualifying renewable fuels, including higher-level ethanol blends. In this
regard the final standards are intended to fulfill the intent of Congress and provide guidance to
market participants. The final rule puts renewable fuel production and use on a path of steady,
ambitious growth in the years ahead. EPA also agrees with commenters that it is important for
the RFS program to get back on track with statutory deadlines for the annual rulemakings, which
we are doing with the multi-year proposal and final rule for the 2014-2016 renewable fuel
volumes standards and the 2017 biomass-based diesel volume requirements.
Conversely, other commenters expressed support for the proposed decrease of volumes below
the statutory targets. These commenters provided specific support for the proposed reduction in
corn ethanol levels (conventional biofuel) below statutory targets and stated they would support
further reductions to help decrease pressure on corn demand or significantly lowering the amount
of U.S. corn used to make corn ethanol. Others provide support for reductions based on concerns
of corn ethanol expansion on marginal lands and harmful effects on water, soil, habitat and false
claims of carbon emission reductions. Some commenters stated EPA should be commended for
recognizing emerging price and technology constraints, among other constraints by reducing
2014 and 2015 volumes below the blendwall. These same commenters express concerns of the
uncertainties raised by the proposed 2016 volumes and about the future more ambitious
mandates and believe EPA should continue to exercise its waiver authority to prevent shortages
of transportation fuels and corresponding higher fuel prices. Similarly, others support further
reductions for conventional biofuels for 2015 and 2016 to account for the distorting effects the
RFS has on the market for corn, substitute feed products, chicken prices, and food prices. Others
support reductions from statutory mandates based on the potential to cause problems in the retail
fuels market if left unchanged while maintaining the principles of the program which are
diversifying fuel supply, increasing overall fuel supply, encouraging domestic fuel production,
and lowering fuel costs for American consumers.
Some commenters that oppose the proposed rule commend EPA for recognizing that the
statutory targets cannot be met by virtue of being overly ambitious and out of step with current
market and believe the proposed volumes should be reduced even further because the proposed
levels are not sufficiently reduced to provide the relief taxpayers and consumers need. Other
commenters state EPA fails to take into account the studies and analysis on the dangers of
ethanol to the American public and environment. These commenters also believe EPA policies
should not result in a mandate of more expensive, less efficient sources of energy that cause
more trips to the gas stations and more money spent at the pump. Commenters believe until
Congress takes action to repeal or reform the RFS, EPA has the authority and responsibility to
set boundaries on this policy to protect the American public.
EPA believes that the statutory targets were not achievable based on real-world constraints. In
the June 10, 2015 notice of proposed rulemaking (NPRM), we proposed standards based on an
approach that sought to achieve the Congressional intent of increasing renewable fuel use over
time, while at the same time accounting for the real-world constraints that have slowed progress
toward that goal. Those constraints have made the volume targets established by Congress for
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2014, 2015, and 2016 beyond reach. In the NPRM we proposed to use waiver mechanisms that
Congress provided to allow for the volume targets to be reduced if necessary. The proposed
volume requirements were lower than the statutory targets but set at a level that we believed
would spur growth in renewable fuel use, consistent with Congressional intent.
We disagree with commenters that state there should be further reductions. We believe that the
RFS program can and will drive renewable fuel production and use, and that it is appropriate to
consider the ability of the market to respond to the standards we set when we assess the amount
of renewable fuel consumption that can be achieved. Therefore, while the final rule applies the
tools Congress provided to make adjustments to the law's volume targets in recognition of the
constraints that exist today, we believe the standards we are finalizing today will drive growth in
renewable fuels, particularly advanced biofuels, which achieve the lowest lifecycle GHG
emissions. Further, we believe this approach establishes the expected path for growth in future
years. In our view, while Congress recognized that supply challenges may exist as evidenced by
the various waiver provisions, it did not intend growth in the renewable fuels market to be
ultimately prevented by those challenges, including such constraints as the "E10 blendwall." The
fact that Congress chose to mandate increasing and substantial amounts of renewable fuel clearly
signals that it intended the RFS program to create incentives to increase renewable fuel supplies
and overcome limitations in the market. The standards we are finalizing will provide those
incentives.
The final volume requirements would push the fuels sector to produce and blend more renewable
fuels in 2016 in a manner that is consistent with the goals Congress envisioned. The final
volumes are less than the statutory targets for 2016 but higher than what the market would
produce and use in the absence of such market-driving standards. The 2016 standards are
expected to spur further progress in overcoming current constraints and lead to continued growth
in the production and use of qualifying renewable fuels, including higher-level ethanol
blends. In this regard the final standards are intended to fulfill the intent of Congress and
provide guidance to market participants. This rule puts renewable fuel production and use on a
path of steady, ambitious growth in the years ahead.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.2: Statutory Authorities for Reducing Volume targets
Section 2.3.1: Congressional Intent to Increase Volumes
Section 2.3.2: Power of the Market to Respond to Ambitious Standards
Section 3.3.1: Balance between Supporting the Biomass-Based Diesel Industry and
Ensuring Opportunities for Other Advance to Grow
• Section 7.2: Agricultural Impacts
• Section 7.3: Fuels Industry Impacts
• Section 7.5: Retail Fuel Prices
• Section 7.7: Impacts on Jobs and Local/State Economy
• Section 8.2: Climate change (GHG impacts)
• Section 10.2.2: Statutory Deadlines 10
10
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1.2 Opposes Rule
Comment:
Abengoa Bioenergy
To revitalize investment in advanced biofuels, EPA must set and enforce the statutory volumes
for Advanced Biofuels and for Total Renewable Biofuels for 2015 and 2016. [EPA-HQ-OAR-
2015-01 ll-2474-Alp.5]
If EPA's proposed rule is implemented, it will have the effect of validating the blend wall at a
level of the petroleum industry's choosing. This would constitute a complete reversal of course
on the RFS and would deny the country a true opportunity to develop a robust cellulosic ethanol
industry. A reduction in the overall Advanced Biofuel and Total Renewable Fuel RVO thus will
assure that Obligated Parties, investors and entrepreneurs will all step back and wait to see how
U.S. renewable fuels policy develops in the future, while they take their investments and
resources elsewhere. Without the RFS, America can be all but certain that domestic investment
in advanced renewable fuels like cellulosic ethanol will halt. [EPA-HQ-OAR-2015-0111-2474-
Alp.16]
Ace Ethanol/Fox River Valley Ethanol
Comments urging EPA to REJECT your proposed rule that reduces the 2014, 2015 and 2016
Renewable Volume Obligations (RVO) and instead restore the RVO to the statutory amounts
as required by the Renewable Fuels Standards (RFS). [EPA-HQ-OAR-2015-0111-1200-A2 p. 2]
When the RFS was established it was known and intended that ethanol blends would need to
exceed 10% but oil companies are doing everything they can to control their monopoly on the
nation's fuel supply. With this flawed proposal, EPA is fundamentally dismissing the law and the
intent of how the RFS should work under the 2005 and 2007 RFS as enacted. For all the above
reasons we again implore that EPA restore the RVO to the statutory volume amounts. [EPA-HQ-
OAR-2015-0111-1200-A2 p. 2]
AL-Corn Clean Fuel; Badger State Ethanol; Big River Resources, LLC; Central Indiana
Ethanol (CIE); Commonwealth Agri-Energy, LLC; Husker Ag LLC; Mid-Missouri
Energy; Pacific Ethanol, Inc.; The Andersons, Inc.
We are adamantly opposed to the proposal to reduce the renewable volume obligations (RVO)
for 'renewable fuel/ the category of the RFS for which corn ethanol qualifies, from the statutory
levels in 2014, 2015 and 2016. The Renewable Fuel Standard (RFS) has been a tremendous
success and is working exactly as intended. The program has played a pivotal role in reducing
petroleum imports to the lowest level since the 1980s, lowering gas prices, improving air quality,
and strengthening the economic health of rural America. We simply do not understand why EPA
is proposing to abandon a program that has undoubtedly delivered on its promise. [EPA-HQ-
OAR-2015-0111-1214-A2 p. 1]
11
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The proposed rule would stifle innovation and fundamentally alter the future course of the RFS
program. Therefore, we are strongly encouraging EPA to reconsider its proposal. [EPA-HQ-
OAR-2015-0111-1214-A2 p. 1-2]
In closing, we ask that EPA reconsider its ill-advised proposed rule and finalize the 2014-2016
RVOs for renewable fuel at the levels envisioned by Congress. We believe EPA should continue
to let the RFS work as intended. The refueling infrastructure, vehicles and surplus REST credits
needed to meet statutory RFS requirements are already in place. In the longer term, RINs will
drive the appropriate behavior in the marketplace and encourage investment in the infrastructure
needed to meet RFS requirements in 2016 and beyond. [EPA-HQ-OAR-2015-0111-1214-A2
p.5]
American Council on Renewable Energy (ACORE)
USEPA's decision to restrict biofuel production levels to the artificial constructs of the "blend
wall" weakens our country's most comprehensive renewable energy and GHG reduction policy
as well as a key component of the Clean Air Act (CAA), raising concern throughout the
renewable energy industry. [EPA-HQ-OAR-2015-0111-1926-A1 p.2]
American Farm Bureau Federation (Farm Bureau)
Farm Bureau opposes the Environmental Protection Agency's (EPA) proposed reduction in the
amount of renewable fuels that must be blended into the nation's gasoline supply. This decision
strikes a blow to conventional ethanol production and dampens the prospects for the further
development of advanced biofuels. The targets within the RFS2 program have been reduced to
15.93 billion gallons, 2.22 billion gallons below the statutory framework in the RFS2 law. The
proposed rule falls further behind statutory mandates in the coming years. The proposed target
for 2015 is 4.2 billion gallons below the obligation, and by 2016 the proposed volume
requirement is 4.85 billion gallons below the standard. Farm Bureau urges EPA to reconsider its
Proposed Rule and stay the course in order to meet the targets set out by Congress in the Energy
Independence and Security Act (EISA) of 2007. [EPA-HQ-OAR-2015-0111-2355-A1 p. 1]
Furthermore, a significant reduction in the 2015 and 2016 volume requirements would slow or
halt investments in the infrastructure needed to distribute and dispense larger volumes of ethanol.
This proposal would halt new investments in cellulosic biofuels and introduce detrimental
ambiguity in a market that is still developing. Farm Bureau strongly urges EPA to stay the course
with the RFS2 as defined in the 2007 EISA. Without question, this decision, if finalized, will
have tremendous consequences for the agricultural sector, for our nation's energy policy and for
the intended regulatory framework and goals of the RFS2. [EPA-HQ-OAR-2015-0111-235 5-A1
p. 1]
Association of Nebraska Ethanol Producers (ANEEP)
The RFS was intended to 'move the needle' by pushing the transportation fuels supply toward
increased levels of biofuels. USEPA should not simply adhere to the desires of petroleum
industry interests who, solely for reasons promoting their own self-interest, are working to
12
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undermine the RFS and block the nation from meeting the stated goal to increase biofuels in the
national transportation fuel mix. The RFS is forward-looking and is not meant only to maintain
the status quo. USEPA can do its part in helping reach the national biofuels goal by maintaining
the original statutory RFS volumes authorized by the Clean Air Act. [EPA-HQ-OAR-2015-0111-
1809-A1 p.2]
To date, the RFS program has achieved significant successes and the continued success of the
RFS would be undermined if USEPA adopted the current proposal which rolls back the statutory
RFS volumes.
The RFS has provided the following benefits to the American public:
• The RFS has sparked investment in rural America which has led to increased economic
prosperity for the American farmer and rural America in general.
• The RFS has reduced foreign oil imports and advanced the national goal of achieving
energy independence.
• The RFS has reduced gasoline and diesel prices for the American consumer.
• The RFS has reduced greenhouse gas (GHG) emissions associated with fuel combustion
in the US transportation fleet.
• The RFS has improved air quality for the American public through reductions in
pollutants such as aromatic hydrocarbons, fine particulate matter (FPM), and ozone
precursors. [EPA-HQ-OAR-2015-0111-1809-A1 p.2]
ANEEP requests that USEPA continue the use of biofuels at the levels prescribed by the 2007
Congress. There are many good reasons quoted by others for continuing the higher levels of
biofuels usage, such as those promoted by those attending the June 25, 2015 Public Hearing.
However, the most important benefit for retaining the statutory RFS levels will be the faster
transition to more environmentally friendly transportation fuels with fewer adverse health
effects, resulting in a healthier environment for U. S. citizens. USEPA should look to its own
history in the phase-out of unleaded gasoline. Like the unleaded gasoline debate, USEPA should
not accept arguments advanced by petroleum industry interests that more environmentally
friendly transportation fuels are not achievable. By being bold and forward thinking, USEPA can
continue to advance the nation toward cleaner transportation fuels and protect the health and
welfare of the American public. [EPA-HQ-OAR-2015-0111-1809-A1 p.4]
BioEnergy R&D
I support a strong federal RFS because we need more alternatives to our transportation fuel
supply and biofuels today represent an economic and sustainable alternative to fossil based
gasoline. A diverse transportation fuel supply means lower greenhouse gas emissions, greater
economic development and jobs here in America, lower gas prices and greater national security.
[EPA-HQ-OAR-2015-0111-0124-A1]
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Renewable biofuels are the cleanest and most sustainable transportation fuel in the world and the
United States is currently the leading producer. These fuels are available today because of the
RFS. The RFS was intended to build a strong biofuels industry, reduce reliance on fuel imports,
support agriculture, and reduce greenhouse gas emissions. This was realized because of stable
federal policy but that stability and future is in severe jeopardy with this regulation. This
proposal would pull the rug out on the hardworking Americans and Companies who have made
renewable fuels a reality and helped grow the economy while making US less dependent on oil
imports. [EPA-HQ-OAR-2015-0111-0124-A1]
Please change the final proposal so that it complies with the existing law and continues to
diversify our national fuel supply with low carbon, sustainable biofuels. [EPA-HQ-OAR-2015-
0111-0124-A1]
Biotechnology Industry Organization
EPA's actions have significantly hindered the market-forcing incentives in the RFS that would
otherwise drive obligated parties toward working with their partners, including their advanced
biofuel partners, to ensure the capacity to produce and use renewable fuels at the levels required
under the program. As further explained below, EPA's delays and its proposed decision to
destabilize the statutory waiver provisions have significantly dampened investments in capacity
to meet the RFS volume goals. Because EPA's new proposed rule contains many of the same
errors as EPA's now withdrawn November 2013 proposed rule for 2014 RVOs, the new
proposed rule can be expected to continue to undermine investor confidence in the program and
to discourage investment in the development and commercialization of advanced biofuels. [EPA-
HQ-OAR-2015-0111-1958-A2 p. 28-29]
Board of County Commissioners of Putnam County, Ohio
The county commissioners of Putnam County, Ohio, pray that the Obama administration and the
Environmental Protection Agency fully restore the ethanol use levels for the Renewable Fuel
Standards (RFS). [EPA-HQ-OAR-2015-0111-3289-A1 p. 1]
Butrolix
That's why I'm asking the Environmental Protection Agency (EPA) to not alter the RFS. It's
working just as Congress intended it to. There is no need to change it. [EPA-HQ-OAR-2015-
0111-2819-A2p.l]
We've made tremendous strides and a lot of progress in the ethanol industry in recent years. Why
threaten future progress by cutting the RFS and moving America's energy policy backward?
[EPA-HQ-OAR-2015-0111-2819-A2 p. 1]
Ethanol has helped this country make significant progress, both environmentally and
economically. Please don't roll back that progress and threaten future advancement of clean,
renewable, homegrown biofuels by unnecessarily cutting the RFS. [EPA-HQ-OAR-2015-0111-
2819-A2p.l]
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Corn Producers Association of Texas (CPAT)
CPAT urges you to restore the Renewable Volume Obligations (RVO) for each year to the
statutory amount and maintain a strong methodology. [EPA-HQ-OAR-2015-0111-2276-A2 p. 1]
Since the inception of the RFS, Texas and American corn farmers have risen to the challenge of
increasing our production to meet the demand for this renewable fuels sector, while still
providing for existing markets and maintaining a surplus. U.S. consumers have benefitted by
having a clean-burning, domestically produced fuel. The EPA should not turn its back on
Americans and halt the progress toward a cleaner, healthier air and access to renewable fuel
resources. [EPA-HQ-OAR-2015-Oil 1-2276-A2 p. 2]
CPAT urges you to restore the Renewable Volume Obligations (RVO) for each year to the
statutory amount and maintain a strong methodology. [EPA-HQ-OAR-2015-0111-2276-A2 p. 2]
Cornhusker Energy Lexington
I would like to submit the following as a comment against the EPA's RFS-RVO proposal. [EPA-
HQ-OAR-2015-0111-1198-A1 p.l]
Don't mess with regular ethanol!
-It stimulates the economy.
-It's a solid investment.
-It's a positive for cattle.
-Still room for growth without affecting corn.
-Cuts down on rail congestion and saves on transportation by not having to move corn very far.
-It adds local, high-paying jobs. [EPA-HQ-OAR-2015-0111-1198-A1 p.6]
DENCO II
On behalf of DENCO II, LLC in Morris MN we are writing you with deep concern regarding the
recent proposed rule for the 2014, 2015, and 2016 Renewable Volume Obligations as required as
part of the Renewable Fuel Standard. DENCO 11 requests that the EPA return to the statutory
requirements as passed into law by Congress in 2007. [EPA-HQ-OAR-2015-0111-1216-A2 p.l]
DENCO II, and the rest of the ethanol industry, is a product of The Renewable Fuels Standard.
The RFS has provided our investors' confidence. And, at DENCO II, our investors and managers
have done our part in fulfilling the original goals of The Renewable Fuels Standard as laid out by
congress in a multitude of ways. [EPA-HQ-OAR-2015-0111-1216-A2 p.l]
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Currently our board of directors is evaluating a plant expansion that would escalate DENCO II's
annualized production to 30 million gallons per year. However, this investment is at risk due to
the precarious proposed renewable volume obligations as proposed for 2014, 2015, and 2016 by
the EPA. Our board of directors would be much more confident in this project if the EPA were to
stand by the RFS as it was originally designed, [EPA-HQ-OAR-2015-0111-1216-A2 p. 1]
At DENCO II we have also developed an advanced biofuels program. Since inception we have
produced over 120,000 gallons of advanced biofuel from waste food sources. These are gallons
that would have not been produced without a strong RFS. This program was adopted because of
the incentives provided by the Renewable Fuels Standard. Without a strong RFS this program
would cease to exist and the potential to produce advanced biofuel gallons from our feedstock
sources would not be realized. [EPA-HQ-OAR-2015-0111-1216-A2 p. 1-2]
DENCO II is in the midst of evaluating a new cellulosic bolt-on technology. This investment, as
any other, comes with inherent risks. The RFS was originally intended to provide confidence to
investors while evaluating such technology. The approach that the EPA has taken when
proposing renewable volume obligations over the past few years has done all but increase
confidence in the RFS as a whole. And, the evaluation of this new technology would be much
easier if the EPA would stay the course on the RFS as congress intended. [EPA-HQ-OAR-2015-
0111-1216-A2p.2]
We need the RFS volume requirements to stay on track if we want to decrease our dependence
on petroleum based fuels as well as offer consumers renewable, less expensive, and locally
produced choices at the pump in blends such as E15, E30, and E85. [EPA-HQ-OAR-2015-0111-
1216-A2p.2]
And, now the oil industry is attempting to get the EPA to change the rules that were set by
Congress because they refuse to comply. In fact, the oil industry is spending millions of dollars a
year spreading false information to consumers about ethanol and then turning around and telling
the EPA and Congress that the public doesn't want to consume our fuel. The EPA simply cannot
reward this behavior, and should instead stay the course on the RVO's for 2014, 2015, 2016 and
beyond. The ethanol industry and rural America has done its part to make the RFS the most
successful energy policy in over 40 years. And we have proven through past investment and
future commitments that we can make this policy work. [EPA-HQ-OAR-2015-0111-1216-A2
p.2-3]
The bottom line is that this proposal would have a devastating ripple effect on investments in
ethanol plants, their production and the jobs they support — as well as the surrounding
communities. With less money recirculating in rural America, there is a smaller tax base —our
schools, hospitals, area business owners and local municipal services will suffer. Every year
DENCO II spends over $500,000 with local businesses in our small community for a wide
variety of services. During a time of economic uncertainty we need to capitalize on the
opportunities, such as biofuel production, to spur investment and innovation to keep America,
and our rural economy strong. [EPA-HQ-OAR-2015-0111-1216-A2 p.3]
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As you move forward in putting together a final rule I hope you will consider the fallout the rule
will have on investors and the workers who count on their jobs at ethanol production facilities
around the country. And, we thank you for giving us the ability to provide comments on your
latest proposal. [EPA-HQ-OAR-2015-0111-1216-A2 p.3]
DuPont
As discussed in Sections I and IV of these comments, DuPont does not believe that there are
constraints on supply resulting from the E10 blendwall. For that and other reasons, we believe
that EPA has exceeded its authority and unnecessarily reduced the volumes for Total Renewable
Fuel and advanced biofuels. [EPA-HQ-OAR-2015-0111-1826-A1 p.30]
East Kansas Agri-Energy, LLC (EKAE)
I would like to take a moment to discuss the desire to decrease our dependency on Middle
Eastern oil. We as a country have fought a war to keep the flow of this oil safe. Our brave service
men and women risked life and limb in this effort. Today revenues from those same oil fields are
used to fund terrorists groups that wish to exert harm to our citizens and country. We have also
found new oil reserves in the U.S. to help us become energy independent. The OPEC nations do
not appreciate this either and are trying to control the oil price to discourage production. It only
makes sense to me that we use every drop of renewable energy we can in our country to extend
the life of our natural resources. [EPA-HQ-OAR-2015-0111-1721-A1 p.2]
The RFS has been the frame work for this great success story and I would encourage the EPA to
stay true to the gallon requirements in the statute. Most of all the reasoning that went into the
creation of the RFS is still viable today. I would hope that through this hearing and comment
period that the EPA would do the right thing and allow the RFS to work as it was intended.
[EPA-HQ-OAR-2015-0111-1721-Alp.2]
The bottom line is that this proposal would have a devastating ripple effect on investment in
ethanol plants, their production and the jobs they support - as well as the surrounding
communities. With less money, there is a smaller tax base - our schools, hospital and local
municipal services will suffer. During a time of economic uncertainty we need to capitalize on
the opportunities, such as biofuel production to spur investment and innovation to keep America,
and our rural economy strong. This is not an exaggeration, it is the reality. Supporting RFS is
critical for America and the future of our energy and agriculture sectors. [EPA-HQ-OAR-2015-
0111-2607-A2p.3-4]
Please leave the RFS as our Congress wrote it. [EPA-HQ-OAR-2015-0111-2783-A1 p. 1]
Environmental and Energy Study Institute (EESI)
EPA's proposal will continue to have a chilling effect on the nation's biofuels industry and
particularly the investment climate for advanced biofuels, an industry that is providing clean,
homegrown fuel to Americans. [EPA-HQ-OAR-2015-0111-1944-A1 p.2]
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Farm Credit Services of America
Farm Credit Services of America has deep concerns regarding the recent proposed rule for the
20142016 Renewable Volume Obligations (RVOs) as required as part of the Renewable Fuel
Standard (RFS). Our association has emerged as a predominant lender to farmer-owned ethanol
plants in Midwest states where there is a high concentration of ethanol facilities. We are very
proud of the record of success we have in helping to build the renewable fuels industry and view
the proposed rule as a significant step backward. [EPA-HQ-OAR-2015-0111-2491-A1 p.l]
Fremont Industries
Ethanol and biofuels have brought that back. The renewable fuel standard implemented by
Congress has been a great success. Unfortunately, you, the EPA, has chosen to try and weaken
this contract with America.
If you weaken the RFS, you will kill investment in second-generation advanced biofuels, as they
will not have access to capital. The hope for additional biodiesel and cellulosic production
facilities that utilize wood chips, corn stover, garbage, switchgrass, animal fats, and the like will
not become a reality without the RFS. Homeland security is what homegrown ethanol is all
about. Cutting back on foreign oil and keeping those dollars here in the United States is another
value that biofuels brings to the table, and not having to fight a war over the access to biofuels.
EPA works for the American people to protect our health and the environment. Opening up the
RFS does not help the American people. Leave the RFS intact.
Governor of Iowa, et al.,
We write to strongly encourage you to revise and increase the proposed U.S. Environmental
Protection Agency (EPA) Renewable Fuels Standard (RFS) volume obligation levels to
demonstrate your continued commitment to growing the production and use of renewable fuels
and revitalizing the economy in rural America. A robust RFS is needed to provide the Federal
policy predictability that rural America needs to continue investments in renewable fuels that
diversify our nation's energy portfolio, reduce transportation emissions, provide value-added
opportunities to various bio-stocks, give consumers lower-cost choices at the fuel pump, and
create good paying jobs that empower rewarding careers. [EPA-HQ-OAR-2015-0111-1915-A1
p.l]
We urge your Administration to use its regulatory authority in a manner that both supports a
growing renewable fuels industry and meets the statutory requirements of the law. We hope you
will protect the RFS, renew your commitment, and stand strong along with us, consumers, and
agricultural producers in supporting American-made renewable fuels. [EPA-HQ-OAR-2015-
0111-1915-A1 p.3]
Highwater Ethanol, LLC
We have Americans that have protected and served our Country, for freedom, for the right to
protect the oil that is needed, however it was also done to protect the opportunity to grow,
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develop and utilize the renewable fuels we can produce right here in the USA. We have the
knowledge, the ability to displace an even higher percentage of oil then we currently do at this
time We need to stay the course on the Renewable Fuels Standard 2 and not reduce the
volume of renewable ethanol, biodiesel and related renewable products. I ask for my
employees, investors, the agricultural industry and all other vendors. But mostly importantly I
ask this for the United States of America and the people that make this Country great! We need
to take care of the present, while focusing on the future!!!! [EPA-HQ-OAR-2015-0111-2506-A2
p.3]
Illinois Department of Agriculture
Illinois' agricultural community has grave concerns over the components of the subject
rule. These proposed standards are troublesome because the volumes are below the obligations
set by Congress under the Energy Independence and Security Act of 2007. The RFS has been
successful in Illinois and is working just as intended. [EPA-HQ-OAR-2015-0111-0260-A1 p.l]
I urge you to evaluate the impacts to both rural and urban America and reconsider the proposed
RFS volume obligations. [EPA-HQ-OAR-2015-0111-0260-A1 p.2]
Illinois Farm Bureau
Illinois Farm Bureau opposes the Environmental Protection Agency's (EPA) proposed reduction
in the amount of renewable fuels that must be blended into the nation's motor fuel supply. This
decision strikes a blow to conventional ethanol production and diminishes the prospects for the
further development of advanced biofuels. [EPA-HQ-OAR-2015-0111-3290-A2 p.l]
Farm Bureau urges EPA to reconsider its proposed rule and stay the course to meet the targets
set out by Congress in the Energy Independence and Security Act (EISA) of 2007. [EPA-HQ-
OAR-2015-0111-3 290-A2 p. 1]
Indiana Ethanol Producers Association
The Renewable Fuels Standard has been a tremendous success for Indiana. As ethanol producers,
we are proud to produce a product that cleans our air while reducing our deependence on foreign
oil and reducing the price at the pump. Any efforts to change the RFS will do nothing bnt
jeopardize the progress we have made while creating uncertainty for Hoosiers whose livelihood
depends on the promises that the government made through RFS. [EPA-HQ-OAR-2015-0111-
3485-Al,p.l]
It is time for the administration to honor the commitments made in the RFS instead of giving in
to the demands of oil companies who refuse to comply with the law. [EPA-HQ-OAR-2015-
0111-3485-Al,p.l]
The RFS is America's most successful energy policy in the last 40 years and now is not the time
to take a step backwards. The proposed rule is bad for Indiana and bad for the country; the EPA
should return the RVO to the statutory volume assigned by Congress. [EPA-HQ-OAR-2015-
0111-3485-Al,p.l]
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Indiana Farm Bureau
Indiana Farm Bureau represents over 72,000 farmer members consisting of all types and sizes of
farming operations and business. On behalf of those members, their families, and rural
communities whose economic livelihoods depend on a strong biofuels sector, Indiana Farm
Bureau strongly opposes the Environmental Protection Agency's (EPA) proposed reduction in
the amount of renewable fuels that must be blended into the nation's gasoline supply. [EPA-HQ-
OAR-2015-0111-2486-A1 p.l]
This decision strikes a blow to conventional ethanol production and dampens the prospects for
the further development of advanced biofuels. [EPA-HQ-OAR-2015-0111-2486-A1 p.l]
Farm Bureau urges EPA to reconsider its Proposed Rule and stay the course in order to meet the
targets set out by Congress in the Energy Independence and Security Act (EISA) of 2007. [EPA-
HQ-OAR-2015-0111-2486-A1 p.l]
It is evident that the use of renewable fuels is enhancing our energy security by reducing our
dependence on foreign oil. It is also evident that the White House has repeatedly stated its strong
support for renewable fuels and the importance of improving our nation's energy independence.
Indiana Farm Bureau supports and defends the standards and incentives necessary to further
develop the U.S. renewable fuels industry and is opposed to EPA's Proposed Rule. [EPA-HQ-
OAR-2015-0111-2486-A1 p.4]
Iowa Corn Growers Association (ICGA)
As an association representing farmer members, the ICGA is deeply concerned with the EPA's
rulemaking regarding the 2014-2016 RVOs and feels the EPA has proposed a rule that is
inconsistent with the 2007 Renewable Fuel Standard (RFS) statute as well as contradictory to
Congressional intent. If finalized the proposed rule would severely damage the ethanol industry
and as a nation, we will be more reliant on oil, consumers will pay more for fuel, we will harm
our environment, and we will be crippling our rural economies. Farmers and ethanol producers
have relied on the EPA to implement the law as Congress intended, and in turn have done their
part to grow more corn and build additional ethanol plant capacity to meet these demands. Now,
the EPA is turning the clock back on these investments at the expense of rural America. [EPA-
HQ-OAR-2015-0111-1820-A1 p. 1]
Summary
This proposed rule does not meet Congress' statutory requirements, is in direct contradiction to
both Congressional intent and stomps on American farmers' commitment to building a
renewable fuels industry. This proposed rule by the EPA is going to have a very real impact on
farmers, ethanol producers, rural communities, and consumers. It will result in a depressed farm
economy which we have already seen from the effects of the 2014 proposed rule, which will in
turn hurt agricultural businesses and lenders, as well as our main streets in rural America. The
consumer will see higher prices at the pump, not to mention at the cost of a finite fuel source and
energy security all while pumping more dirty emissions into the air. On behalf of Iowa's corn
farmers, we collectively join our voices in opposition to the proposed rule to lower the RVO for
ethanol and we encourage the EPA to rethink the proposal and implement the statutory levels for
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corn based ethanol. Iowa's hard working farm families need nothing less. [EPA-HQ-OAR-2015-
0111-1820-A1 p. 6]
Iowa Farm Bureau Federation (IFBF)
IFBF opposes the Environmental Protection Agency's (EPA) proposed reduction in the amount
of renewable fuels that must be blended into the nation's gasoline supply. This decision is
extremely detrimental to conventional ethanol production and dampens the prospects for the
further development of advanced biofuels. Renewable fuels have been a tremendous success
story for the nation and especially for Iowa. The RFS has reduced our country's dependence on
foreign oil, reduced air pollution, increased farm incomes, spurred investment in Iowa, and
provided good paying jobs in rural communities. Iowa and the U.S. have seen tremendous
growth within the agricultural sector because of the RFS2. If the lower blending requirements in
the proposed rule are finalized, investment and growth in domestic renewable fuels as well as the
broader agricultural economy will be hampered. IFBF urges EPA to reconsider its proposed rule
and maintain the targets set out by Congress in the RFS2. [EPA-HQ-OAR-2015-0111-1717-A1
p. 1]
Iowa Renewable Fuels Association
Just as that reality was beginning to take shape, the EPA essentially pushed "pause" on the RFS
program for the last 18 months. If the current proposal is allowed to move forward, the EPA will
effectively push the "stop" button on the RFS. On the other hand, if the EPA allows the RFS
program to move forward as envisioned by Congress under the levels outlined in the second
paragraph of these comments, the next 18 months will be replete with much better headlines than
the previous 18 months. [EPA-HQ-OAR-2015-0111-1957-A2 p. 4]
The bottom line remains clear: there is no legal, marketplace, or consumer rationale for reducing
the conventional biofuels level below the RFS statutory requirements. The EPA must enforce the
RFS as Congress wrote the law. Let the RIN marketplace do its job in lowering fuel prices and
incenting additional renewable distribution capacity. [EPA-HQ-OAR-2015-0111-1957-A2 p. 20]
Iowa Soybean Association
We agree with Iowa Congressman David Young who stated, The RFS is working. Renewable
fuels infrastructure was developed to ensure that more Americans can benefit from biofuels. We
urge the EPA to reexamine the facts, listen to the experts and adhere to Congressional intent for
the RFS. [EPA-HQ-OAR-2015-0111-3424 p.2]
John Deere
While your proposed RVO volumes move the nation to higher levels of renewable fuels
utilization, our concern is that the proposal makes inaction by the obligated parties an acceptable
and increasingly viable option. [EPA-HQ-OAR-2015-0111-2042-A1 p.l]
We appreciate EPA's commitment to continued support for steady growth in renewable fuel use.
Our request asks EPA to take a stronger stance, to more clearly demonstrate its commitment, and
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ensure that all parties look beyond the challenges that may exist today. [EPA-HQ-OAR-2015-
0111-2042-A1 p.3]
Kane Ranch, LLC
As a rancher and a good steward of the land I am an avid protector of the environment and
understand the importance of renewable energy. However, the current RFS is not the ideal course
of action. The best long term solution is for Congress to fix the RFS through legislation, but, in
the meantime please set the final ethanol mandate as I previously stated at 9.7 percent. [EPA-HQ-
OAR-2015-0111-1660-A1]
Kansas Farm Bureau
Kansas Farm Bureau opposes the Environmental Protection Agency's (EPA) proposed reduction
in the amount of renewable fuels to be blended into the nation's gasoline supply. By veering
from the total volumes as outlined in the RFS2, EPA is harming conventional (D6) ethanol
producers, clouding the prospects for further development and innovation of advanced biofuels,
and ignoring the intent of Congress. [EPA-HQ-OAR-2015-0111-1195-A1 p.l]
A demonstrated commitment to renewable fuels is vital in order to achieve 36 billion gallons of
use by 2022. Making space in the market for alternative fuels that contribute to energy
independence, environmental improvement, and economic development is exactly the point of
RFS2. And while it's working, there is still much to be done. We ask EPA to grant an RVP
volatility waiver for El 5, maintain the 15 billion gallon target for conventional ethanol as written
in the RFS2 and to consider further increases in biomass diesel targets. [EPA-HQ-OAR-2015-
0111-1195-A1 p.2]
Kentucky Corn Growers Association
I submit this letter to encourage EPA to amend its Proposed Rule, and return the RVO's for each
of these years back to statutory levels. [EPA-HQ-OAR-2015-0111-2499-A1 p. 1]
The RFS is working as intended. Please leave it alone. [EPA-HQ-OAR-2015-0111-2499-A1 p.l]
Little Sioux Corn Processors
Again, I urge the EPA to reconsider. Basing the RFS on the e-10 blend wall violates the law as it
was intended by Congress. [EPA-HQ-OAR-2015-0111-1664-A1]
Marquis Energy LLC
The benefits that ethanol has contributed to America's economy and agricultural sector are well
known, which is why it is disheartening that the EPA is considering rolling back the RVO for the
amount of conventional biofuels to be blended into America's fuel supply. [EPA-HQ-OAR-
2015-0111-2800-Alp.l]
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Mascoma LLC, Lallemand Inc.
Since Mascoma's inception in 2006 we have seen firsthand the positive impact the RFS has had
on local economies and throughout the US as the biofuels industry grew dramatically and
realized major efficiency gains via the adoption of new technologies and better practices. [EPA-
HQ-OAR-2015-0111-0263-A1 p. 1]
Mass Campaign Comment sponsored by America's Renewable Future (email) - (474)
'Iowa's economy depends on ethanol and other renewable fuels. So, why is the EPA letting the
oil industry rewrite the Renewable Fuel Standard to serve its own interests? Your voice deserves
to be heard. Stand up for our country's farmers who feed and fuel America by sending a message
to the EPA. Tell the EPA not to cave in to oil industry demands and support a strong Renewable
Fuel Standard!' [EPA-HQ-OAR-2015-0111-1962-A1 p.l]
Mass Comment Campaign sponsored by anonymous 17 (email) - (3670)
The Renewable Fuel Standard (RFS) is an outdated, unnecessary, and harmful policy that should
be scaled back or eliminated. I therefore oppose the EPA's RFS proposal for 2014 - 2016.1
oppose the RFS from two perspectives—as an American consumer and as a member of the
energy sector. The potential harm to consumers from the RFS is real: The use of ethanol,
mandated under RFS, could drive up fuel costs and lowers fuel efficiency. A gallon of ethanol
produces about a third less energy than a gallon of gasoline. 'Ethanol shifts agriculture to fuel
production, driving up food costs. The average American family may pay as much as $2,000
more per year for food because of the RFS. 'Ethanol in higher concentrations, such as E15, can
damage engines. No automaker supports the use of El 5 in cars made before 2011. Repair costs
and damaged engines could be the result of an increased RFS mandate. For the energy sector,
ethanol and biofuel mandates add production and compliance expenses, pose supply challenges,
and put equipment at risk. At the retail end, gas stations—often small businesses themselves—
face significant added costs because of the RFS. I urge the EPA to reconsider its recent RFS
proposal and withdraw it altogether. I also urge the EPA to make the case to Congress that the
RFS should be repealed. [EPA-HQ-OAR-2015-0111-0219-A1 p.l]
Mass Comment Campaign sponsored by anonymous 19 (email) - (4910)
The RFS has contributed to higher food and grocery costs, harm to the environment, and could
lead to damage to older vehicles and small engines. It's wildly unpopular with the American
people and, to put it plainly, is a failed policy. If I had my way, Congress would repeal the RFS
entirely. [EPA-HQ-OAR-2015-0111-0221-A1 p.l]
Please listen to the American people on this issue. What's best for American consumers is more
important than what's best for the ethanol lobby. [EPA-HQ-OAR-2015-0111-0221-A1 p.l]
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Mass Comment Campaign sponsored by anonymous 2 (web) - (2781)
I am writing to oppose the EPA proposal (EPA-HQ-OAR-2015-0111), which will increase the
ethanol volumes to historic levels. This a misguided decision that fails to take into account years
of objective studies and analysis on the dangers of ethanol to the American public and
environment. [EPA-HQ-OAR-2015-0111-0079 p.l]
Mass Comment Campaign sponsored by ActionAid USA (web) - (2629)
The EPA is in an increasingly difficult situation in trying to implement this policy, as several of
the assumptions made by the Congress in 2007 have proved incorrect. This makes the rule
making process, however, even more important. Our research has found that the Renewable Fuel
Standard (RFS) will be responsible for more than half of global biofuels demand over the next
decade, so the impact of this rule will reach far beyond U.S. borders. [EPA-HQ-OAR-2015-
0111-2553-A1 p.l]
The U.S. Environmental Protection Agency's Administrator, Gina McCarthy, must move the
U.S. away from food-based biofuels in the yearly Renewable Volume Obligations. Fuel
consumption in the U.S. must not increase hunger around the world. [EPA-HQ-OAR-2015-0111-
2553-A2p.l]
Mass Comment Campaign sponsored by Adkins Energy LLC (paper) - (120)
Supporting the RFS is critical for America and for the future of our energy and agriculture
sectors. I ask that you return the RFS to a program based on supply of renewable fuel and
ambitious goals to reduce our dangerous dependence on foreign oil and not let the program be
held captive by the oil industry and its unwillingness to allow higher ethanol blends into the
marketplace. [EPA-HQ-OAR-2015-0111-2956-A1 p.l]
Mass Comment Campaign sponsored by America's Renewable Future (email) - (1313)
I'm writing to ask that EPA support a strong Renewable Fuel Standard that restores the targets
set by Congress. As an lowan, I know that the Renewable Fuel Standard supports thousands of
Iowa jobs, and investment in ethanol and advanced biofuels is helping preserve our rural
economies. Iowa needs ethanol. Don't let the oil industry continue to dictate energy policy.
Support a strong Renewable Fuel Standard. [EPA-HQ-OAR-2015-Oil 1-1963-Al p.l]
Mass Comment Campaign sponsored by anonymous 1 (web) - (23)
I support a strong federal RFS because we need more alternatives to our transportation fuel
supply. A diverse transportation fuel supply means lower greenhouse gas emissions, greater
economic development and jobs here in America, lower gas prices and greater national security.
[EPA-HQ-OAR-2015-0111-0118 p.l]
Renewable biofuels are the cleanest and most sustainable transportation fuel in the world and —
the United States is currently the leading producer. These fuels are available today because of the
RFS. The RFS was intended to build a strong biofuels industry, reduce reliance on fuel imports,
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support agriculture, and reduce greenhouse gas emissions. Those things are happening because
of stable federal policy but that stability would be erased with this regulation. This proposal
would pull the rug out on the hardworking Americans who have made renewable fuels a reality.
[EPA-HQ-OAR-2015-0111-0118 p.2]
Please change the final proposal so that it complies with the existing law and continues to
diversify our national fuel supply with low carbon, sustainable biofuels. [EPA-HQ-OAR-2015-
0111-0118p.2]
Mass Comment Campaign sponsored by anonymous 10 (email) - (297); Mass Comment
Campaign sponsored by anonymous 12 (email) - (560)
As you move forward in developing a final rule, I hope you will consider the fallout that a rule
such as the one proposed would have on the investors and workers who count on their jobs at
ethanol production facilities around the country. I would also ask that you return the RFS to a
program based on supply of renewable fuel and ambitious goals to reduce our dangerous
dependence on foreign oil and not let the program be held captive by the oil industry and its
unwillingness to allow higher ethanol blends into the marketplace. [EPA-HQ-OAR-2015-0111-
0213-A1 p.2]
Mass Comment Campaign sponsored by anonymous 11 (email) - (695); Mass Comment
Campaign sponsored by anonymous 31 (paper) - (301)
The RFS has made America stronger. Our rural towns are thriving and our children are moving
back to where they were raised to carry on the legacy of the family farm. They are also finding
other great opportunities back home within this industry. We cannot afford to turn our backs on
such a successful policy by turning away from the congressionally established levels called for
by the RFS. [EPA-HQ-OAR-2015-0111-0214-A1 p.l]
Bottom line - this proposed rule shows the world we are retreating from the goals of the RFS and
embracing the status quo of foreign oil and fossil fuels for our growing energy needs. [EPA-HQ-
OAR-2015-0111-0214-A1 p.2]
Supporting the RFS is critical for America and for the future of our energy and agriculture
sectors. I would ask that you return the RFS to a program based on supply of renewable fuel and
ambitious goals to reduce our dangerous dependence on foreign oil and not let the program be
held captive by the oil industry and its unwillingness to allow higher ethanol blends into the
marketplace. [EPA-HQ-OAR-2015-0111-0214-A1 p.2]
Mass Comment Campaign sponsored by anonymous 13 (web) - (121)
All it takes is for the EPA to stick to the original targets in the RFS. [EPA-HQ-OAR-2015-0111-
0106 p.l]
No law or policy has significantly reduced CO2 emissions, prices at the pump or our nation's
dependency on foreign oil more than the RFS. [EPA-HQ-OAR-2015-0111-0106 p.2]
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Full implementation of the RFS can do even more for Americans and the environment. [EPA-
HQ-OAR-2015-0111-0106 p.2]
I kindly urge the EPA to revert to the original targets of the RFS. Let's stop playing by the oil
industry's rules. [EPA-HQ-OAR-2015-0111-0106 p.2]
Mass Comment Campaign sponsored by anonymous 14 (email) - (1339)
The Renewable Fuel Standard is working. Every year it offsets millions of gallons of foreign oil
imports, keeping investment and jobs here at home and frequently in otherwise distressed rural
communities. It provides consumer choice at the gas pump for those who want a cheaper,
cleaner-burning domestic fuel. [EPA-HQ-OAR-2015-0111-0216-A1 p.l]
The EPA should not forget its mission to protect human health and the environment. [EPA-HQ-
OAR-2015-0111-0216-A1 p.l]
Mass Comment Campaign sponsored by anonymous 15 (email) - (2485); Mass Comment
Campaign sponsored by anonymous 30 (email) - (26); Mass Comment Campaign
sponsored by anonymous 33 (paper) - (164)
As an American citizen, I care about the environment and the energy and national security of my
country for my generation and generations to come. I, along with 82 percent of Americans, want
to have a choice and savings at the pump. I believe American-made ethanol can make a
difference in our nation's economy by keeping hard-earned American dollars here at home. I am
tired of reading about the record profits of oil companies quarter after quarter. Just recently, it
was reported that the five biggest oil companies reported nearly $90 billion in combined profits
in 2014. The $171,100 per minute they earn is more than 95 percent of Americans earn in a year.
Enough is enough, especially when I am spending more at the pump. Were it not for renewable
fuels, I'd pay even more. I wholeheartedly support the RFS. [EPA-HQ-OAR-2015-0111-0217-
Alp.l]
This policy is making America stronger. We cannot afford to turn our backs on such a successful
policy. [EPA-HQ-OAR-2015-0111-0217-A1 p.2]
Supporting the RFS is critical for America and for the future of our nation. I would ask that you
return the RFS to a program based on supply of renewable fuel and ambitious goals to reduce our
dangerous dependence on foreign oil and not let the program be held captive by the oil industry
and its unwillingness to allow higher ethanol blends into the marketplace. [EPA-HQ-OAR-2015-
0111-0217-A1 p.2]
Mass Comment Campaign sponsored by anonymous 21 (web) - (13)
As a part owner in a family farm, I see the benefits every day of a renewable fuel standard that
has spurred private investment, created jobs, and made the United States more energy
independent. The RFS has been good for the rural economy and good for our environment.
26
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[EPA-HQ-OAR-2015-0111-0279 p.l]
Your proposed November 2013 rule amounted to a monumental slap in the face to farmers
across the country, and this proposal is not much better. [EPA-HQ-OAR-2015-0111-0279 p. 1]
As a member of a farm organization that pushed hard for the RFS-2,1 urge you to find a way to
reverse the damage you've done. It's not too late. [EPA-HQ-OAR-2015-0111-0279 p.l]
Finally, EPA's disappointing lack of enthusiasm for biofuels is completely inconsistent for an
agency and administration that has been willing to pull out all of the stops to pursue a vigorous
climate change agenda. [EPA-HQ-OAR-2015-0111-0279 p. 1]
Mass Comment Campaign sponsored by anonymous 22 (email) - (57); Mass Comment
Campaign sponsored by anonymous 8 (email) - (505)
I am writing in response to your proposal to reduce the use of ethanol in the Renewable Fuel
Standard. Many communities, like mine, depend on a strong agricultural sector. The negative
impact of this announcement on renewable, domestic ethanol production affects me where I live,
shop and do business. [EPA-HQ-OAR-2015-0111-1478-A1 p.l]
Your decision to reduce conventional ethanol levels harm both the rural economy and the
environment which it is your mission to protect. I strongly urge you to reconsider your proposed
reduction in the baseline renewable volume obligations. Return them to the levels decided upon
by Congress in the Renewable Fuel Standard. Many rural communities depend on your making
the right decision. [EPA-HQ-OAR-2015-0111-1478-A1 p.1-2]
Mass Comment Campaign sponsored by anonymous 23 (email) - (10)
I am a strong supporter of renewable fuels and strongly disagree with your proposal to reduce the
use of ethanol in the Renewable Fuel Standard. [EPA-HQ-OAR-2015-0111-1479-A1 p.l]
The EPA should not forget its mission to protect human health and the environment. [EPA-HQ-
OAR-2015-0111-1479-A1 p.l]
Mass Comment Campaign sponsored by anonymous 32 (postcard) - (7,903)
I am strongly opposed to EPA's latest proposal to slash the RFS levels for 2014-16. [EPA-HQ-
OAR-2015-0111-2562-A1 p.l]
A strong and growing RFS will keep us moving toward cleaner air, consumer choice and
cracking the petroleum monopoly. Don't mess with the RFS! [EPA-HQ-OAR-2015-0111-2562-
Alp.l]
Mass Comment Campaign sponsored by anonymous 34 (postcard) - (56)
Biofuels. More jobs, cleaner air, less dependency on non-renewable energy. Helps U.S. be self-
sufficient. Help support biofeuls and rural america by increasing ethanol volumes into the fuel
supply. [EPA-HQ-OAR-2015-0111-3472-A1 p.l]
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Don't abandon renewable fuels and rural America. [EPA-HQ-OAR-2015-0111-3472-A1 p.2]
Mass Comment Campaign sponsored by anonymous 35 (paper) - (347); Mass Comment
Campaign sponsored by anonymous 7 (email) - (82); Mass Comment Campaign sponsored
by anonymous 9 (email) - (230)
We must move forward, not backward, when it comes to developing alternatives to fossil fuels
and foreign oil. We all know that the RFS and biofuels have created jobs that cannot be
outsourced, which have helped revitalize rural America. Additionally, renewable fuels are better
for the air we breathe and for our environment and they are making a difference by decreasing
our dangerous dependence on foreign oil. [EPA-HQ-OAR-2015-0111-3474-A1 p.l]
Biofuels are better for our national security, energy security and they benefit consumers like me
by providing a choice and savings at the pump. [EPA-HQ-OAR-2015-0111-3474-A1 p.l]
Supporting the RFS is critical for America and for the future of our nation. I would ask that you
return the RFS to a program based on supply of renewable fuel and ambitious goals to
reduce our dangerous dependence on foreign oil and not let the program be held captive by the
oil industry and its unwillingness to allow higher ethanol blends into the marketplace. [EPA-HQ-
OAR-2015-0111-3474-A1 p.l]
Mass Comment Campaign sponsored by Corn, LP (web) - (37); Mass Comment Campaign
sponsored by Little Sioux Corn Processors (web) - (44); Mass Comment Campaign
sponsored by Quad County Corn (web) - (37); Mass Comment Campaign submitted by
employees of Siouxland Energy Cooperative (web) - (30)
We, the undersigned, dedicated employees of Corn, LP, respectfully request that the statutory
requirements of the Renewable Fuel Standard be upheld. My job and the welfare of my family
depends upon it. [EPA-HQ-OAR-2015-0111-2047-A1 p.l]
The original Renewable Volume Obligation established by Congress under the RFS must be
upheld. There is no legal, marketplace or consumer rationale for reducing the conventional
biofuels level from the RFS statutory requirements. This is the most successful U.S. energy
policy in history, and it must be maintained. [EPA-HQ-OAR-2015-0111-2047-A1 p.l]
Our request is simple: Don't Mess with the RFS! Reverse the economic and environmental
harm that the proposed lower volumes will have on our nation. The RFS is working and it's the
one policy in place today that creates market access for alternatives to petroleum, breaking the
oil industry's virtual monopoly over the transportation fuel supply. We are counting on the EPA
to preserve our industry, our jobs and the well-being of our family, friends and the great state of
Iowa! [EPA-HQ-OAR-2015-0111-2047-A1 p.2]
Mass Comment Campaign sponsored by Creppie Masters (paper) - (120)
As a boater and avid fisherman, preserving and protecting our natural resources is important. My
fellow anglers and I care about the environment and doing what's best for future generations.
When I head out on the water, ethanol (E10) is running through my boat motor. Ethanol is
cleaner for the environment and reduces harmful emissions being pumped into our lakes as a
result of today's low quality gasoline. And higher ethanol blends in our vehicles helps provide
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cleaner air and reduces our country's dependence on toxic crude oil. [EPA-HQ-OAR-2015-0111-
2960-Alp.l]
For these reasons, I do not support the Environmental Protection Agency's propose reductions to
the Renewable Fuel Standard (RFS) volume obligations. [EPA-HQ-OAR-2015-0111-2960-A1
p.l]
The RFS is the tool Congress chose to help improve our environment, slowly bring fairness to
the marketplace and provide drivers with additional fuel choices. Now is not the time to throttle
back alternatives to fossil fuel and foreign oil. If EPA's proposed rule is enacted, ethanol
production is expected to slow. This decrease in ethanol demand will reduce jobs in rural
communities, decrease tax dollars to schools, put a damper on local and state economies and
effectively halt investments in next generation biofuels. Consumers will suffer at the pump as oil
companies choose to utilize their own, higher-priced product rather than a cheaper, cleaner,
renewable fuel. [EPA-HQ-OAR-2015-0111-2960-A1 p.l]
Continuing to implement the RFS at the intended statutory level is vital to increasing our energy
independence, improving the environment and supporting American agriculture and our
environment. Please reconsider the proposed rule and show your support for a cleaner, locally
refined future. [EPA-HQ-OAR-2015-0111-2960-A1 p.l]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, p. 195.]
Now is not the time to move backward when it comes to developing alternatives to fossil fuels
and foreign oil. We must move forward. Continuing to implement the RFS at the intended levels
is vital to increasing our energy independence, improving the environment, and supporting
American agriculture and our environment.
Mass Comment Campaign sponsored by DENCO II. Absolute Energy. L.L.C. (paper) -
(633); Mass Comment Campaign submitted by investors in Golden Grain Energy LLC.
(paper)-(327)
I am writing you with deep concern regarding the recent proposed rule for the 2014-2016
Renewable Volume Obligations (RVOs) as required as part of the Renewable Fuel Standard
(RFS). [EPA-HQ-OAR-2015-0111-0207-A1 p.l]
The impact that the RFS has had on ethanol plants and production cannot be overstated. Since its
original enactment in 2005,1 have witnessed firsthand the positive impact it has had on my local
economy and how it stimulates investment from domestic and international sources. [EPA-HQ-
OAR-2015-0111-0207-A1 p.l]
With this flawed proposal, EPA is fundamentally changing how the RFS works by putting the
burden of fuel distribution on biofuel producers rather than branded oil, which controls more
than 50 percent of the convenience stores in this country through branding agreements and
ownership. [EPA-HQ-OAR-2015-0111-0207-A1 p.2]
I hope you will consider the fallout that a rule such as the one proposed would have on the
investors and workers who count on their jobs at ethanol production facilities around the
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country. I would also ask that you return the RFS to a program based on supply of renewable
fuel and ambitious goals to reduce our dangerous dependence on foreign oil and not let the
program be held captive by the oil industry and its unwillingness to allow higher ethanol blends
into the marketplace. [EPA-HQ-OAR-2015-0111-0207-A1 p.2]
Mass Comment Campaign sponsored by employees of Western Dubuque Biodiesel (web) -
(1)
Our request is simple: Increase the RFS! The RFS is working for the economy, energy
security, consumers, farmers, and the environment. It is the most effective energy policy in our
nation's history. The RFS creates market access for alternatives to petroleum, breaking the oil
industry's virtual monopoly over the transportation fuel supply. [EPA-HQ-OAR-2015-0111-
1961-A1 p.2]
We are counting on the EPA to preserve our industry, our jobs and the well-being of our family,
friends and the great state of Iowa! [EPA-HQ-OAR-2015-0111-1961-A1 p.2]
Mass Comment Campaign sponsored by Fuels America (email and paper) - (213,555)
I'm writing to ask you to implement a strong Renewable Fuel Standard. [EPA-HQ-OAR-2015-
0111-2555-A3p.l]
Under the Renewable Fuel Standard, America has tripled the production of renewable fuel,
driven oil imports down to the lowest level in 20 years, reduced harmful pollution, and created
hundreds of thousands of jobs. [EPA-HQ-OAR-2015-0111-2555-A3 p.l]
Please follow Congress's intent and get the RFS back on track. Implement a strong Renewable
Fuel Standard that follows the requirements mandated by Congress and fix the flawed
methodology that threatens the future of renewable fuel. [EPA-HQ-OAR-2015-0111-2555-A3
p.l]
Mass Comment Campaign sponsored by POET (email) - (661)
We need your help to urge the Obama Administration and the Environmental Protection Agency
(EPA) to restore strong blending levels for the Renewable Fuel Standard (RFS). [EPA-HQ-
OAR-2015-0111-2772-A2 p. 1]
On May 29,2015 the EPA unveiled a proposal that would reduce the RFS and jeopardize rural
economies like ours. [EPA-HQ-OAR-2015-Oil 1-2772-A2 p.l]
Mass Comment Campaign sponsored by POET Biorefining (paper) - (25)
Please support our state's rural jobs, economy, and environment by keeping the Renewable Fuel
Standard (RFS) intact. America's ethanol industry:
. Employs 400,000 people in the US
. Helps reduce our dependence on foreign oil
. Leads the world in biofuels innovation
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. Saves consumers an average $ 1,200 per year
. Reduces greenhouse gas emissions [EPA-HQ-OAR-2015-0111-2954-A1 p. 1]
Mass Comment Campaign sponsored by POET Biorefining 1 (paper) - (692)
My name is Mark Liebrecht and I am the co-owner for my family's manufacturing and farm
drainage business in Continental, Ohio. I am writing to urge the Obama Administration and the
EPA to restore strong blending standards for the Renewable Fuel Standard (RFS). [EPA-HQ-
OAR-2015-0111-2963-A1, p.7]
We must move forward, not backward when it comes to developing alternative to fossil fuels and
foreign oil. [EPA-HQ-OAR-2015-0111-2963-A1, p.7]
Supporting the RFS is critical for American and the future of our energy and agriculture sectors.
[EPA-HQ-OAR-2015-0111-2963-Al,p.7]
We need your help to urge the Obama Administration and the Environmental Protection Agency
(EPA) to restore strong blending levels for the Renewable Fuel Standard (RFS). On May 29,
2015 the EPA unveiled a proposal that would reduce the RFS and jeopardize rural economies,
like ours. [EPA-HQ-OAR-2015-0111-2963-A1, p.7]
I Support Agriculture
I Support Ethanol
I Support Energy Independence
I Support The RFS
I Support America
Do You? [EPA-HQ-OAR-2015-0111-2963-A1, p.8]
I am writing to you because the EPA is changing the RFS and reducing the RVO gallons to less
than what was promised in the law. [EPA-HQ-OAR-2015-0111-2963-A 1, p. 10]
Mass Comment Campaign sponsored by Vote Vets (email) - (46994)
Please preserve a strong Renewable Fuel Standard — one that puts our national security, our
environment, and American consumers ahead of the interests of Big Oil. As veterans, military
families, and Vote Vets supporters, we know the cost of our dependence on foreign oil. The
Renewable Fuel Standard has fostered a homegrown fuel industry that lessens our dependence
on oil — the rising prices of which pay for weapons used against our men and women in
uniform. More than that, investing in cheaper, cleaner-burning renewable fuels has strengthened
our economy — creating new jobs inside our borders, and saving Americans money with every
fill-up. Don't allow oil industry lobbyists to put their interests ahead of the nation's. Save the
Renewable Fuel Standard, and keep our country on the road to a transportation future that
depends less on the Middle East, and more on the Midwest. [EPA-HQ-OAR-2015-0111-2056-
A2p.l]
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Mass Comment Campaign submitted by DuPont employees (web) - (1)
I strongly urge EPA to reconsider the proposal and stand behind the commitment to long term
growth in renewable fuels. [EPA-HQ-OAR-2015-0111-2825 p.2]
Mass Comment Campaign submitted by members of the marine industry (email) - (408)
As a member of the marine industry, I am writing to oppose the EPA proposal (EPA-HQ-OAR-
2015-0111), which will increase the volume of ethanol in the fuel supply to historic levels.
[EPA-HQ-OAR-2015-0111-1477-Alp.l]
However, our industry, and our very way of life, is threatened by this proposal which calls for
higher levels of ethanol in the fuel supply. This threat is due to the fact that ethanol levels higher
than 10 percent cause severe internal damage to outboard motors, including damage to pistons,
valves, and various internal parts, as proven through extensive testing by the National Marine
Manufacturers Association. [EPA-HQ-OAR-2015-0111-1477-A1 p.l]
Mass Comment Campaign sponsored by Lincoln Energy LLC (paper) - (9)
Nothing less than the future of our plant, our industry, and rural America is at stake! Tell EPA
'Don't Mess with the RFS!' [EPA-HQ-OAR-2015-0111-3471-A1 p.l]
P.S. The RFS battle is far too important to let Big Oil call the shots. Don't sit on the sidelines!
Protect the future of ethanol by letting EPA hear your voice in support of the RFS today! [EPA-
HQ-OAR-2015-0111-3471-A1 p.l]
Minnesota Corn Growers Association (MCGA)
The recent announcement by the Environmental Protection Agency (EPA) to scale back
Renewable Volume Obligation (RVO) numbers as called for by Congress in the Renewable Fuel
Standard (RFS) is a major step backward for America's energy policy. [EPA-HQ-OAR-2015-
0111-1920-Al,p.l]
Minnesota Farm Bureau
Minnesota Farm Bureau opposes the Environmental Protection Agency's (EPA) proposed
reduction in the amount of renewable fuels that must be blended into the nation's gasoline
supply. This decision strikes a blow to conventional ethanol production and dampens the
prospects for the further development of advanced biofuels. [EPA-HQ-OAR-2015-0111-2263-
Al p. 1]
On behalf of the nearly 30,000 farm families, Minnesota Farm Bureau urges EPA to reconsider
its proposed rule and stay the course in order to meet the targets set out by Congress in the
Energy Independence and Security Act of 2007. [EPA-HQ-OAR-2015-0111-2263-A 1 p. 1]
Farm Bureau policy supports the RFS2 as passed in the Energy Independence and Security Act
of 2007. We do not believe that the criterion which would justify implementation of the two
waivers EPA is imposing have been met. EPA's proposal will severely undermine the goals that
were set by Congress, as well as the Administration's stated support for renewable fuels.
Minnesota Farm Bureau requests EPA withdraw the proposed rules for 2014, 2015, and 2016
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RFS2 program and set the levels as stated in the 2007 legislation. [EPA-HQ-OAR-2015-0111-
2263-A1 p. 2]
Minnesota Farmers Union (MFU)
On behalf of the membership of the Minnesota Farmers Union (MFU) I would like to offer some
brief comments in support of the Renewable Fuel Standard (RFS) and for keeping the 2014-2016
Renewable Volume Obligations (RVOs) under the RFS intact. [EPA-HQ-OAR-2015-0111-
1311-Alp. 1]
Minnesota State Senate
As an elected official in the state of Minnesota and with Denco II, a 25 million gallon per year
ethanol plant, within my district, I am writing you with deep concern regarding the recent
proposed rule for the 2014-2016 Renewable Volume Obligations (RVOs) as required as part of
the Renewable Fuel Standard (RFS). [EPA-HQ-OAR-2015-0111-3284-A1 p.l]
Drastic cuts, such as the one that EPA proposed, will have a devastating impact on agriculture
and our rural economies, as well as investments in ethanol plants throughout the nation. By
taking a step backward, you are sending a signal that the government no longer supports the
production of biofuels. This uncertainty, coupled with a dramatic cut in what should be
produced, puts the future of investment, growth and innovation of renewable fuels at risk know,
with such uncertainty surrounding the RFS, investors and stakeholders will likely scale back, if
not completely withdraw their investments. [EPA-HQ-OAR-2015-0111-3284-A1 p. 1-2]
The ramifications for the industry and for the towns and communities that count on these
facilities to generate economic activity would be widespread and very damaging. When there is
uncertainty and increased risk, investments dry up quickly, causing the renewable fuels industry
to fall well short of its potential. [EPA-HQ-OAR-2015-0111-3284-A1 p.2]
As a local elected official, the prosperity and well-being of my community is my top priority and
I am deeply concerned that if this proposed rule were to take effect, the entire community and
surrounding towns would suffer. Farmers would lose money, agri-business would be negatively
impacted, jobs would be lost and our community would face serious economic challenges. It is
part of my responsibility to serve and foster opportunities, economic growth and innovation. This
rule would do just the opposite. [EPA-HQ-OAR-2015-0111-3284-A1 p.2]
Missouri Corn Growers Association (MCGA)
The RFS has played a pivotal role in increasing the profitability of the corn farmer and
revitalizing rural Missouri. At the same time it has reduced oil imports, lowered gas prices, and
improved air quality. It has been proven that the RFS works. We strongly oppose the proposal to
reduce the 2014-2016 renewable volume obligations (RVOs) for renewable fuel from the levels
envisioned by Congress. The EPA is abandoning congressional intent and violating the waiver
authority. [EPA-HQ-OAR-2015-0111-2507-A2 p. 1]
Farmers have responded to the RFS by fulfilling their role in producing enough corn and
therefore enough ethanol to meet the requirements. This response has fostered unprecedented
investment in agriculture over the past decade. Farmers should not be punished by the oil
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industry intentionally failing to meet their obligations. [EPA-HQ-OAR-2015-0111-2507-A2 p.
1]
In conclusion we strongly urge the EPA to follow Congressional intent. The RVO numbers
should return to the levels required by statute. It is critical the United States remains committed
to domestically produced biofuels. [EPA-HQ-OAR-2015-0111-2507-A2 p. 2]
Missouri Farm Bureau (MFB)
We are disappointed the Agency's recommended biofuel volume standards for 2015 and 2016
fall below the targets set by Congress, and therefore oppose the proposed rule. [EPA-HQ-OAR-
2015-0111-1824-A1 p. 1]
National Farmers Union (NFU)
These comments will explain why the Renewable Fuel Standard Program (RFS) is
important in terms of climate resiliency and the changes to the proposed volume standards
for advanced biofuels and total renewable fuels that are needed to achieve the goals of the
program. [EPA-HQ-OAR-2015-0111-1657-A1 p. 1]
The proper execution of the RFS is vital to the American people and economy for two main
reasons. First, the renewable transportation fuels promoted by the RFS have immense potential
to reduce climate-influencing greenhouse gas (GHG) emissions from the transportation sector,
which means implementing effective volume standards is one of the most important actions the
Administration can take to mitigate climate change. Second, the production of the renewable
fuels promoted by the RFS carries important economic benefits. The program decreases U.S.
reliance on foreign transportation fuels. The RFS has also driven much-needed and substantial
reinvestment in our rural communities, and has the potential to perpetuate even more investment.
Unfortunately, the policy and regulatory uncertainty that can be expected from the proposed
volume standards jeopardize existing investment in biofuels production and could create so much
uncertainty that investment could be more difficult to attract than if the RFS had never been
implemented in the first place. [EPA-HQ-OAR-2015-0111-1657-A1 p. 1]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, pp. 27-28.]
The NFU supports the RFS for several reasons, including the much-needed reinvestment it drives
in rural America and the reduction in U.S. dependency on foreign oil it facilitates. The RFS also
carries important environmental benefits, particularly in regard to climate change. Producers
across the U.S. are already feeling the impact of increasing weather volatility and disruption of
water resources, whether related to precipitation irregularities or loss of river flow due to
diminished snowpack.
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, p. 29.]
Oil companies have argued that there is insufficient infrastructure to accommodate the volume of
biofuels mandated by Congress, allowing EPA to waive some volume requirements. However,
Congress did not grant EPA the authority to waive volume requirements under these
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circumstances. The statutes are specifically designed to force oil companies to build new
infrastructure to accommodate increasing amounts of biofuels, opening their monopolistic
stranglehold on transportation fuels and allowing consumers more choice.
National Sorghum Producers
The National Sorghum Producers strongly opposes any reduction in renewable volume
obligations below statutory levels. [EPA-HQ-OAR-2015-0111-1914-A1, p.l]
NSP feels congressional intent was clear in both the Energy Policy Act of 2005 and the Energy
Independence and Security Act of 2007 that renewable fuel policy was to enable the ethanol
industry to break the effective fuel market monopoly held by petroleum-based fuels. Therefore,
this barrier should not be used as justification to reduce renewable volume obligations. Absent
ethanol, it is doubtless the U.S. economy would re-enter recession, as the industry supports over
a half-million jobs and touches millions more. It has revitalized rural communities and restored
family farming traditions. It has saved consumers as much as $1.09 per gallon at the pump, to
say nothing of its positive impact on refining industry margins. It has reduced dependence on
foreign oil to levels not seen since the 1980s and thus saved American lives. [EPA-HQ-OAR-
2015-0111-1914-Al,p.2]
North Dakota Ethanol Council
On behalf of the North Dakota Ethanol Council (NDEC), we would like to voice our concerns
regarding the recent proposed rule for the 2014-2016 Renewable Volume Obligations (RVOs) as
required as part of the Renewable Fuel Standard (RFS), which keeps RVOs below statutory
levels. The ethanol industry plays an important role in our state's diverse energy sector, and the
proposed rule would be detrimental to our state's economy. [EPA-HQ-OAR-2015-0111-1927-
Al p. 1]
North Dakota's ethanol industry is adamantly against the proposed reduction of RVOs and is
requesting that the statutory RFS RVOs are maintained. Supporting the RFS is critical to North
Dakota, the nation, and the future of our energy and agriculture sectors. [EPA-HQ-OAR-2015-
0111-1927-A1 p. 2]
North Dakota Farmers Union (NDFU)
For these reasons, NDFU respectfully asks EPA to issue a final rule implementing volume
standards that match those Congress et in the EISA. EPA needs to consider the RFS's overall
goal and its impact to agriculture in a time when rural America's agricultural community is a
significant driver in our country's economy. We strongly encourage the agency to revise its
standards. [EPA-HQ-OAR-2015-0111-1916-A1 p. 1]
North Dakota Grain Growers Association
Supporting the existing RFS corn-based ethanol volumes is critical for America and for the
future of our energy and agriculture sectors. Therefore the North Dakota Grain Growers
Association respectfully requests that EPA return the RFS to a program based on supply of
renewable fuel and ambitious goals to reduce our dangerous dependence on foreign oil. [EPA-
HQ-OAR-2015-0111-1656-A1 p.2]
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North Dakota Office of the Governor
After reviewing the proposed rule, I believe that certain modifications need to be made to ensure
that the nation's biofuels industry isn't negatively impacted. In particular, I am concerned by the
fact that the proposed rule would lower the amount of the Renewable Volume Obligations under
the RFS to a level below the goals that had been set out by Congress. [EPA-HQ-OAR-2015-
0111-1763-A2p. 1]
Office of the Lt. Governor, Indianapolis, Indiana
I write to express my concern about the proposed renewable volume requirements for 2014,
2015, and 2016. Governor Pence wrote to you previously on January 21, 2014. At that time, the
U.S. EPA was considering reducing the 2014 volume requirements. Now, over eighteen months
later, the 2014 requirements are still not complete and neither is the requirement for 2015. I urge
you to take swift action to correct the delay, to keep volume requirements as high as possible,
and to provide industry with greater certainty in the future.
The proposed reductions in the renewable volume requirements and the delays by the EPA in
setting them have created uncertainty for the Hoosiers involved in this industry, particularly with
the 2014 and 2015 requirements that remain incomplete. Industry decisions on growth,
investment, and employment are being dampened given this uncertainty. This must change for
our nation to realize the objectives put in place by Congress when the renewable volume
requirements were established. [EPA-HQ-OAR-2015-0111-2482-A1 p.l]
Ohio Corn & Wheat Growers Association
Recognizing we continue to meet our end of the bargain to produce the crops to help make the
needed biofuels, it is very disappointing to see your agency continuing to let the oil industry off
the hook by rolling back the RFS. By decreasing the Renewable Volume Obligations (RVO)
statutorily spelled out in the RFS to nearly status quo biofuels production, why would the oil
industry invest in infrastructure to use higher blends of biofuels? In short, they won't. [EPA-HQ-
OAR-2015-0111-1723-A1 p.l]
We ask for your agency to simply restore the RVOs to the statutory levels to maintain the
partnership that was formed with the American farmer in 2007 and hold the oil industry
accountable. We continue to uphold our end of the bargain, now we ask the EPA to uphold
theirs. [EPA-HQ-OAR-2015-0111-1723-A1 p.2]
Paul Bertels Farms
I am writing to strongly encourage the EPA to abandon the ill-conceived 2014-2016 NPRM for
the Renewable Volume Obligations, and return to the statutory levels for conventional biofuels.
Throughout this rule promulgation, the EPA has displayed a wanton disregard for the intent of
the Energy Independence Security Act (EISA), if not clearly violating the law. I submitted
comments during the 2013 NPRM which contained a number of substantive questions related to
your process and logic behind the proposed rule. I am troubled that the Agency merely rescinded
the 2013 NPRM and the requirement to answer those questions, instead issuing a new proposal.
[EPA-HQ-OAR-2015-0111-2799-A1 p.l]
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Poet, LLC
[The following comments were submitted as testimony at the Kansas City, Kansas public
hearing on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 201.]
The RFS was intended to be a forward-looking regulation that fostered increasing amounts of
renewable fuels through a combination of targets and market incentives. It was not meant to be a
backward- looking accounting exercise that placed the burden of infrastructure investment solely
on the biofuels community.
Renew Kansas
Members of Renew Kansas engage in the processing, transportation, and marketing of ethanol
fuel. Our industry supports the public policy and economic benefits to every American that flow
from ethanol and other renewable fuels. We write today to express our strong opposition to the
EPA's proposed rule. [EPA-HQ-OAR-2015-0111-1309-A1 p.l]
Renew Kansas seeks to ensure that our nation remains on a steady path toward the goals
Congress prescribed in the renewable fuels standard program. Additionally, Renew Kansas
advocates for the continued growth of renewable fuels into our national vehicle fuel portfolio.
The EPA's proposal to reduce the total renewable fuel percentage standards for years 2014,
2015, and 2016 is detrimental to that goal; is inconsistent with its limited waiver authority, as set
out in the Clean Air Act; and, is unnecessary. [EPA-HQ-OAR-2015-0111-1309-A1 p.2]
We urge the EPA to use its regulatory authority in a manner that continues to promote a growing
renewable fuels industry and meets the statutory requirements of the Clean Air Act. Now is not
the time to retreat from the clear goals of the RFS by rolling back what has proven to be the most
effective energy policy in the last 40 years. We must continue to move forward.
The proposed EPA rule to lower the RFS requirements for renewable fuels works directly against
our national energy and fuel needs, the interests of the American consumer, and the strength of
our local and national economy. [EPA-HQ-OAR-2015-0111-1309-A1 p.4]
We appreciate the EPA's historical support on renewable fuels and the commitments pledged to
the industry in carrying forth the requirements of the Clean Air Act. Our industry continues to
support the goal of increasing ethanol and biofuel use, consistent with the goal and requirements
set forth in the Clean Air Act. We look forward to working with EPA to develop a final rule
which maintains a strong and successful RFS program. [EPA-HQ-OAR-2015-Oil 1-1309-Al
p.4]
Rider, Allen
Despite a slight increase in the proposed volumes over the November 2013 proposal, EPA's
latest proposed volume requirements are not in alignment with the congressionally established
biofuel blending requirements. As proposed, the standards would curtail the attainment of
economic, environment, energy, and national security and public health benefits that Congress
expected to achieve through the implementation of the RFS.
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Also, we must recognize that this act will reduce the desire to put more investment in both the
production side and the distribution side.
South Dakota Corn Growers Association
With so much success in the last decade, we believe that EPA should let the Renewable Fuel
Standard continue working as it was intended. [EPA-HQ-OAR-2015-0111-1811-A1 p.2]
South Dakota Farmers Union
On behalf of the over 14000 farmers, ranchers and consumers who are members of South
Dakota's Farmers Union, we urge you to protect and keep the current Renewable Fuel Standard.
[EPA-HQ-OAR-2015-0111-2358-A1 p. 1]
Please continue to support the RFS and the commitment to renewable fuels. [EPA-HQ-OAR-
2015-0111-2358-A1 p. 3]
State of Indiana House of Representatives
I implore you to please consider the positive impacts of biofuels when issuing your final volume
obligations. [EPA-HQ-OAR-2015-0111-3466-A1 p.2]
State of Nebraska
I am writing in opposition to the Environmental Protection Agency's (EPA) proposed volume
requirements under the Renewable Fuel Standard (RFS), which undermines the nation's
commitment to utilize cleaner-burning fuels and diversify our country's energy portfolio. When it
comes to air quality, American ethanol-blended fuel burns cleaner. [EPA-HQ-OAR-2015-0111-
1810-Alp.l]
As Governor, I am dedicated to supporting the economic growth of the state, as well as the
health of Nebraskans. Therefore, I urge you to reconsider the proposed changes to the volume
requirements of the RFS and instead comply with the statutory annual volume targets set by
Congress. [EPA-HQ-OAR-2015-0111-1810-A1 p.2]
Syngenta
We wish to express our deep concern regarding the recently proposed rule for the 2014-2016
Renewable Volume Obligations (RVOs) as required as part of the Renewable Fuel Standard
(RFS). The drastic cuts proposed by the EPA in the 2014-2016 RFS will have a shattering impact
on the rural American economy and will stifle investment in ethanol plants throughout the
nation. If EPA and the government turn their backs on the production of current conventional
biofuels, it would result in devastation for the full-scale commercialization of next generation
biofuels. The industry has just begun the commercialized production of these next generation
biofuels, such as cellulosic; now would the worst time possible to undermine these efforts. [EPA-
HQ-OAR-2015-0111-2493-A1 p.l] [EPA-HQ-OAR-2015-0111-1044 pp. 287-288]
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Tenaska Commodities, LLC
With a domestic industry that's capable of producing well over 2 billion gallons, not to mention
imported volume and the 20% carryover from previous years, we were very disappointed to see
your May 29 proposal for 2014-2017 RVO's. [EPA-HQ-OAR-2015-0111-0503-A1]
The purpose of the program was to annually increase the share of advanced fuels vs
conventional, but yet you leave zero room for growth with such timid RVOs thru 2017. The
industry has already proven capable of exceeding these figures, even while facing highly
distressed production economics.[EPA-HQ-OAR-2015-0111-0503-Al]
Why let Big Oil off the hook with what Congress intended when there is no economic reason to
do so? [EPA-HQ-OAR-2015-0111-0503-A1]
Trenton Agri Products LLC
In concluding, please, re-propose the RVO's through 2016 to be back to the levels laid out by
Congress and consistent with the renewable fuel supply that is adequately available and
implement the 1 # waiver rule for E15. [EPA-HQ-OAR-2015-0111-1686-A1 p.3] [EPA-HQ-
OAR-2015-0111-1043, p.321]
Urban Air Initiative
Like thousands of other interested parties, UAI disagrees with EPA's proposed 2014 - 2016
RVO rule, and hopes that the Agency will issue a Final Rule that more accurately reflects the
congressionally mandated RFS targets for 2015 and 2016. [EPA-HQ-OAR-2015-0111-1821-A1
p.2]
We hope that EPA will give serious consideration to these and other comments, but whatever
decisions it makes, when EPA does publish its final RVO rule a few months from now, it will be
binding and effective. The renewable fuels industry's only recourse at that point will be judicial
review, and by the time that process reaches its ultimate conclusion, we are likely to be only
months away from the time when EPA will be required to exercise its responsibilities under the
so-called 'permanent re-set' provisions of the RFS2 law for some categories of renewable fuels1.
What is urgently needed is a permanent, sustainable, and cost-effective solution so that the Blend
Wall's adverse effects need never be experienced again. [EPA-HQ-OAR-2015-0111-1821-A1
p.2]
Conclusion. EPA's reliance on the E10 Blend Wall as justification for invoking its general
waiver authority to reduce the 2014 - 2016 RVO requirements under RFS2 is unfortunate, ill-
advised, and unnecessary. EPA has all of the necessary statutory, technological, and commercial
tools at hand to solve the challenge.
WB Services
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 50.]
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And I want to share that I'm here 100 percent in support of the RFS as enacted and voice my
concern and disappointment over the current proposed RVO.
Western Plains Energy, LLC (WEP)
I am writing you with deep concern regarding the recent proposed rule for the 2014-2016
Renewable Volume Obligations (RVOs) as required as part of the Renewable Fuel Standard
(RFS). [EPA-HQ-OAR-2015-0111-0283-A1 p.l]
The Renewable Fuels Standard program began in 2006 and was later modified through the
Energy Independence and Security Act of 2007. The stated purpose of this act, in part, is to move
the United States toward greater energy independence and security and to increase the
production of clean renewable fuels. [EPA-HQ-OAR-2015-0111-0283-A1 p.2] [EPA-HQ-
OAR-2015-0111-2471-A1 p.l] [EPA-HQ-OAR-2015-0111-2958-A1 p.l] [EPA-HQ-OAR-2015-
0111-1044 p. 359]
Since enactment, the RFS has done just that. It has supported billions of dollars of investment
into the ethanol industry, created nearly 400,000 direct, indirect and induced jobs, added $50
billion to the nation's Gross Domestic Product (GDP) in 2014, and paid in excess of $10 billion
in taxes in 2014. As a result of the RFS, the ethanol industry has increased annual production
from 3.9 billion gallons in 2005 to 15 billion gallons today, making the U.S. the largest producer
and consumer of ethanol in the world.[EPA-HQ-OAR-2015-0111-0283-A1 p.2] [EPA-HQ-
OAR-2015-0111-2471-A1 p.l] [EPA-HQ-OAR-2015-0111-2958-A1 p.l]
Unfortunately, the proposed rule takes our country in a backward direction. I understand EPA's
need to adjust the cellulosic and biomass based biodiesel numbers as technology and innovation
hasn't progressed fast enough to support the original volumes. However, it is difficult for me to
understand the rationale for reducing the corn-based volumes.[EPA-HQ-OAR-2015-0111-0283-
Al p.2]
As mentioned in the Executive Summary of the proposed rule The fundamental objective of the
RFS provisions under the Clean Air Act is clear: To increase the use of renewable fuels in the
U.S. transportation system every year through at least 2022.' Reducing the total volume
obligations by more than the reduction in advanced biofuel volumes certainly does not meet this
fundamental objective. [EPA-HQ-OAR-2015-0111-0283-A1 p.2] [EPA-HQ-OAR-2015-0111-
2471-A1 p. 1-2] [EPA-HQ-OAR-2015-0111-2958-A1 p.1-2]
In closing, I would like to say that I believe that the RFS has been the single most successful
energy policy of the United States in my lifetime. It has boosted agriculture, created jobs in rural
America, improved our air quality and our environment, and improved our national security. By
enacting the proposed rule, the EPA is sending our country backwards and jeopardizing each of
these accomplishments. [EPA-HQ-OAR-2015-0111-0283-A1 p.3]
I ask that you reconsider your proposal in regards to the corn-based volumes. I urge you to
follow through on what the Congress intended by maintaining the mandated volumes, let the free
market decide what fuels and what infrastructure is needed, and most of all 'protect the
environment' by holding the obligated parties accountable to the required volumes set by
Congress.[EPA-HQ-OAR-2015-0111-0283-Al p.3] [EPA-HQ-OAR-2015-0111-2471-A1 p.3]
[EPA-HQ-OAR-2015-0111-1044 pp. 360-361]
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The impact that the RFS has had on ethanol plants and production cannot be overstated. Since its
original enactment in 2005,1 have witnessed firsthand the positive impact it has had on my local
economy and the plant I work at. I am very proud of our ethanol plant and the impact that it has
had for me personally and for our community. Western Plains Energy is recognized as one of the
leading employers in our area providing solid wages and strong benefits for 48 employees.
[EPA-HQ-OAR-2015-0111-2471-A1 p.l] [EPA-HQ-OAR-2015-0111-2958-A1 p.l]
White Energy
When the United States Government took action to phase out leaded gas out of the U.S. fuel
supply, there was a timeline defined, and the U.S. Government held the petroleum industry to
that timeline to make sure it was successful. Why hasn't the EPA administered the RFS in the
same manner as the phase out of leaded gas?
Wisconsin Farm Bureau Federation
Thank you for the opportunity for the Wisconsin Farm Bureau Federation to comment in
opposition to EPA's Renewable Fuel Standard Program: Standards for 2014, 2015, and 2016.
The Wisconsin Farm Bureau Federation requests that the rule be withdrawn and the 2007 levels
set in the original RFS remain the standard for future blending requirements. [EPA-HQ-OAR-
2015-0111-1716-Alp. 2]
Response:
The majority of commenters that oppose the proposed rule believe EPA should increase volumes
back to statutory levels or at least to some other level higher than the proposed levels that
continue the momentum and upward trajectory in the growth of renewable fuels.1 The specific
reasons for these comments are discussed below, but in more detail in other sections throughout
this RTC document as well as the final rule.
Commenters who believe volumes should set at statutory levels state believe the proposed rule is
dismissive of the law and the intent of how the RFS should work under the statute. These
commenters believe EPA's actions have significantly hindered the market-forcing incentives that
would otherwise drive obligated parties to work with others in the supply and marketing business
to ensure to production and use of renewable fuels at levels required under the program. Other
commenters believe the RFS has been successful and is working exactly as intended and a
deviation from the statutory volumes will have consequences to the agricultural sector, our
nation's energy policy and the intended regulatory framework and goals of the RFS program.
Commenters believe RFS is meant to be forward-looking and not to maintain status quo. These
commenters believe the statutory volumes or other volumes substantially higher than EPA's
proposed volumes can be met in the short term, and that in the long-term that high RIN prices
will drive the appropriate behavior in the marketplace and encourage investments to meet the
RFS requirements for 2016 and beyond. Commenters believe the proposed reductions will stall
or halt investments in advanced and cellulosic biofuels (some citing specific projects that will be
impacted), which they claim will cause detrimental ambiguity in the market, and fundamentally
1 Some stakeholders who opposed the NPRM asked that EPA significantly reduce volumes even further beyond
proposed levels. These comments are addressed in Section 1.1.
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alter the future course of the RFS program. Some believe the proposal strikes a direct blow to
conventional biofuels, halting investments needed to distribute larger volumes of ethanol.
Commenters also believe the proposed rule will have the effect of validating the blendwall at the
level the petroleum industry's choosing, who they claim are working to undermine the RFS
program. Some commenters do not believe that there are any constraints on supply resulting
from the E10 blendwall. Commenters cite the phase-out of unleaded gasoline as a successful
example of how EPA should hold their position and not accept arguments that higher volumes of
more environmentally friendly transportation fuel is not achievable. Commenters urge EPA to
increase the proposed volumes to levels that demonstrate EPA's continued commitments to
growing the production and use of renewable fuels and revitalizing the economy in rural
America, citing benefits that will help by: diversifying our nation's energy portfolio, reducing
transportation emissions, providing value-added opportunities to various bio-stocks, giving
consumers lower-costs choices at the fuel pump, and creating good paying jobs.
We agree with commenters that the RFS program has proven to be a success in meeting
Congress' intent and goals. Since promulgation of RFS implementing regulations in 2007,
domestic production and use of renewable fuel volumes in the U.S. has increased dramatically.
The RFS program has also played a role in state and local economies, particularly in rural areas.
These facilities generate revenue and create jobs for the local community, as well as support
local farms that grow and sell biofuel crops as renewable fuel feedstock and its co-products such
as soybean meal and dried distillers grains (DDGs) for animal feed. Businesses and organizations
serving the renewable fuels industry have also grown as a result of the RFS program. While the
proposed volumes are lower than the statutory volumes (for everything but biomass-based
diesel), they are very forward looking and will continue to incentivize ongoing investment and
growth in renewable fuel volumes of all types. We disagree that the proposed volumes are
backward looking and a change in policy direction and against Administration goals to continue
to support and grow biofuels, particularly those with lower GHG emissions. As discussed in
more detail in Section 2.3.1 in this RTC document and Section II in the final rule, the proposed
volumes will continue to help incentivize growth in renewable fuel volumes to meet the
Congressional and goals for this program.
We disagree with commenters that state our interpretation and use of the waiver authorities are
wrong, illegal and against Congressional intent. We believe we have correctly interpreted the
authorities provided to us by Congress, as discussed in more detail in Section 2.2 through 2.2.2.1
of this RTC document and Section II. A. 1 and II.A.2 in the final rule, we believe our authority to
waive the statutory volume requirements, in whole or in part, in the event of inadequate domestic
supply allows us to address the current supply constraints facing the RFS program, including the
full extent of constraints on production, blending, distribution and use. Additionally, we are
granted broad authority to reduce volumes under the cellulosic waiver authority when we reduce
the cellulosic biofuel volumes.
Commenters from the ethanol industry do not believe the blendwall is a real constraint as EPA
and the oil industry have claimed, and believe that this so-called "blendwall" could be resolved
by increasing investment of flex-fuel vehicles that can use gasoline with higher ethanol blends
such as E85, investment in E85 fueling stations, production and use of higher level ethanol
blends and drop-in fuels, and investment in infrastructure to deliver these fuels to these vehicles.
These commenters believe that the oil industry has done nothing in terms investment and
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planning to overcome concerns of the "blendwall" in order to meet the RFS mandate levels that
they have known about ever since EISA was signed into law in 2007. These commenters do not
believe EPA should reward the oil industry for non-action and the threat of noncompliance by
lowering volume mandates below statutory levels. These commenters believe that lowering the
mandate would remove the market pressure that is needed to force higher volumes of biofuels
and drive investment in infrastructure necessary to deliver these fuels. These commenters believe
that maintaining the statutory levels and high RIN prices are the forcing mechanisms EPA should
use that will help spur the needed investments in the FFVs, E85 stations and infrastructure that
will help achieve statutory levels.
We also believe that RFS volumes above the E10 blendwall are possible. In fact, the final 2016
standards require volumes roughly 4 billion gallons beyond the amount of ethanol that can be
consumed as E10. The 2016 standards are based on continued investment in both ethanol (FFVs,
E85 stations and infrastructure), and non-ethanol biofuels (biodiesel, renewable diesel, biogas,
etc.) necessary to continue to grow renewable fuel volumes just as the commenters suggest. We
disagree with commenters that maintaining statutory levels and using RIN prices is a strong
enough forcing mechanism to spur sufficient investments and overcome current market
constraints to achieve statutory levels within the time available. A more detailed discussion on
all these issues can be found in Section 2.6.1 of this RTC document and Section II in the final
rule.
For responses to comments on the uncertainty created by reductions in the statutory targets, see
Section 2.1.1.
For responses to comments on how the RIN mechanism operates to subsidize the cost of
renewable fuels at retail, see Section 2.3.2.
For responses to comments stating that the E10 blendwall is not a constraint, or has been
fabricated by the refining industry, see Section 2.4.
For responses to comments suggesting that obligated parties have failed in their statutory
responsibilities to invest in the infrastructure needed to expand renewable fuel supply, see
Section 2.7.1.
For responses to comments on the role of carryover RINs in the RFS program and suggestions
that they could be used to increase the volume requirements, see Section 6.
For responses to comments requesting a 1 psi waiver for E15, see Section 10.6.5.
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2. Proposed National Volume Requirements for Advanced Biofuel and Total
Renewable Fuel
2.1 General Comments
Comment:
Advanced Biofuels Association (ABFA)
ABFA supports the 1.68 billion gallon volume, which is proposed for 2014, as it reflects the
actual net gallons posted in EMTS for that year. In addition, we are encouraged and supportive
of EPA's recognition of the increased capacity of new gallons from both domestic and
international sources, which are currently being used to meet America's transportation fuel
needs. This helps to create supply certainty for those suppliers of these fuels and a more robust
set of producers to provide fuels to this sector of the fuels market place. In a global market, the
recognition of all parties is necessary and more supportive of the overall consumers in the market
place and will encourage further downstream investment of blending equipment to spread the
fuel use more broadly. And more competition always results in better prices for consumers.
[EPA-HQ-OAR-2015-0111-2498-Alp.5]
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
EPA should not promote non-domestic biofuels and set standards that amount to a de-facto
mandate for imports. Promoting foreign production of biofuels, or providing a ready market for
foreign biofuels, was not the intent of EPAct and EISA. Some of these options including palm
based bio/renewable diesel run counter to the greenhouse gas reduction standards of the RFS
program. [EPA-HQ-OAR-2015-0111-1948-A1 p.20]
Clean Fuels Development Coalition and the Nebraska Ethanol Board
EPA has made little if any effort to educate media and the public that the RFS is not an ethanol
mandate. Nor have we seen much in the way of statements from EPA that to the extent ethanol is
used, it does not raise food prices, does not increase gasoline costs, and based on the agency's
own approval of E15 does not hurt engines. Because these issues are considered by EPA they
should be addressed in a factual manner in order to facilitate a more accurate understanding of
the law EPA has been charged with implementing. [EPA-HQ-OAR-2015-0111-2259-A1 p.2]
Dakota Spirit AgEnergy
I would also ask that you return the RFS to a program based on supply of renewable fuel and
ambitious goals to reduce our dangerous dependence on foreign oil and not let the program be
held captive by the oil industry and its unwillingness to allow higher ethanol blends into the
marketplace. [EPA-HQ-OAR-2015-0111-2057-A1 p.2]
John Deere
From experience, we know there are numerous other benefits directly attributable to higher
renewable fuel volumes, including environmental and health benefits, job creation, and the
revitalization of many rural communities including funding for education, health care and other
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governmental services. Yet we believe renewable fuel's greatest contributions lies in our future.
Ensuring the realization of that future requires a continued aggressive approach today. [EPA-
HQ-OAR-2015-0111-2042-A1 p.3]
Nebraska Unicameral Legislature
Support the original intent of Congress and the people, and don't mess with the RFS.
The Valero Companies
We question why EPA would promote importing non-domestic biofuels and setting standards at
a level that create a de-facto mandate for imports. We do not believe that this result is consistent
with the intent of Congress in passing the EISA, especially given that promoting palm-based
bio/renewable diesel runs counter to the greenhouse gas reduction standards of the RFS
program. [EPA-HQ-OAR-2015-0111-2765-A1 p.25]
5. "Expand co-production of non-ethanol renewable fuels with petroleum at new and existing
facilities"
Once again, this option will have negligible impact for 2016, and most likely 2017. Most
renewable feedstocks for non-ethanol renewable fuels require pre-treatment which requires
significant capital investment and time to design, permit, and construct. [EPA-HQ-OAR-2015-
0111-2765-A1 p.25]
Response:
Some stakeholders raised a number of concerns about our proposed treatment of imports of
renewable fuels in response to the NPRM, focusing primarily on the possibility that any
underestimates of potential imports in the determination of the final volume requirements could
result in imported volumes displacing domestically-produced volumes. Many stakeholders
raising such concerns based their views on the presupposition that it was Congress's intent that
the RFS program preferentially increase the use of domestically-produced renewable fuels over
imports of renewable fuel. However, the statute as a whole does not support this view.
With regard to the word "domestic" in "inadequate domestic supply," we believe that the intent
of the statutory language was to clarify that any inadequacy was to be measured according to that
which can be supplied to consumers in the United States, through both domestic production and
import. Imports are clearly part of the supply of materials in the U.S., and this is as true for
renewable fuels as it is for other materials. Similarly, energy security includes a measure of the
diversity of fuel sources as well as the geopolitical source of the sources; increasing diversity
(such as through use of biofuels from a variety of countries) reduces risks associated with a
potential disruption of supply. Thus, biofuel imports contribute to energy security in the United
States. This issue was discussed in the original 2007 rulemaking establishing the RFS program.
Also, we do not believe that statutory references to rural economic development and job creation,
such as those found in 21 l(o)(2)(B)(ii), suggest that EPA should discourage imports of
renewable fuel, when such imports can and do contribute to the major goals of the Act in
reducing GHG emissions from the transportation sector and increasing energy security.
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The statutory language clearly presumes that imports can play a role in meeting the volume
targets that Congress set. For instance, section 21 l(o)(5)(A) directs EPA to issue regulations
implementing the RFS program and specifies that
"The regulations ... shall provide ... for the generation of an appropriate amount of
credits by any person that refines, blends, or imports gasoline that contains a
quantity of renewable fuel..." (Emphasis added.)
See also 21 l(o)(5)(E) (providing for credits for persons who import additional renewable fuel).
In addition, discrimination against qualifying foreign-produced renewable fuels would be of
concern with respect to the non-discrimination principles under the World Trade Organization
(WTO), of which the U.S. is a signatory. That said, it is within the EPA's purview, both under
WTO and the statutory provisions for the RFS program, to consider all relevant factors that could
affect supply, both those related to domestically-produced renewable fuels and those related to
imports. Insofar as there are constraints on the combined potential supply of all sources of
renewable fuel, or differences in the potential for supply from domestic versus foreign sources,
we have the authority and the responsibility to take these into consideration when assessing
supply. Regarding imports of renewable fuels, there are a variety of factors that make the level
of potential supply considerably less certain than for domestically-produced renewable
fuels. These factors include but are not limited to:
• High variability of imports into the U.S. in the past
• Growing international demand for renewable fuel
• Unpredictable policies in other nations regarding production, trade, taxes, and tariffs for
renewable fuels
• Fluctuating demand for alternative uses of the feedstocks used to make renewable fuels,
Qiirh a
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For responses to comments related to the impacts of the RFS program on retail fuel prices, see
Section 7.5.
For responses to comments on the impacts of different ethanol blends on engines, see Section
10.6.4.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.3.1: Congressional intent to increase volumes
Section 2.7.4: Impacts on imports of sugarcane ethanol
Section 2.7.5: Impacts on imports of conventional biodiesel
2.1.1 General Comments on Advanced Biofuels
Comment:
American Farm Bureau Federation (Farm Bureau)
Farm Bureau remains optimistic that the advanced biofuel provisions can succeed in diversifying
the RFS2. From 2007 through the second quarter of 2011, over $2.4 billion was invested in
advanced biofuel companies by venture capitalists alone. It is important that these investments
from the private sector be fully implemented and that incentives for continued research and
development remain fully in place. Past R&D work in the sector has resulted in increasing
product yields with lower input costs. The goals set forth by the RFS2 have been and remain an
important catalyst for this type of cutting edge work; and it is important to the long-term health
of both the economy and the environment that this work continues. [EPA-HQ-OAR-2015-0111-
2355-A1 p. 3]
Farm Bureau is also concerned about the Proposed Rule and its impact on our country's
commitment to advanced biofuels. The commitment to advanced biofuels is critical in order to
achieve the 36 billion gallon goal of renewable fuel sold in the marketplace by 2022. In fact, by
2020, total advanced biofuels are set to equal the volume requirement assigned by conventional
biofuel of 15 billion gallons and are then set to exceed the volume requirement of conventional
biofuel starting in 2021. Currently, advanced biofuels still have to prove themselves as a source
of major supply, but technologies are developing and good paying jobs are being created from
these advancements and innovations. [EPA-HQ-OAR-2015-0111-2355-A1 p. 3]
Algae Biomass Organization (ABO)
To achieve the full energy security, economic development and greenhouse gas potential of
advanced biofuels, however, EPA must do everything in its power to minimize uncertainty for
advanced biofuel developers and leave no doubt in its final rule and in future year rules that
advanced biofuel developers will have a market for their fuel. This requires setting volumes that
reflect Congressional intent and take the advanced biofuels industry beyond today's real and
perceived market constraints. It also requires removing administrative barriers to deployment,
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including delays in new pathway approval and unnecessary limitations on feedstocks and co-
location of facilities. [EPA-HQ-OAR-2015-0111-1951-A1, p.l]
East Kansas Agri-Energy, LLC (EKAE)
Furthermore, if the EPA and the government turn its back on the production of current
conventional biofuel, it will have a devastating effect on the full-scale commercialization of next
generation biofuels, such as cellulosic biofuel. The biofuels industry is right on the cusp of
breaking through, making commercialized production a reality and now would be the worst
possible time to take a step backward. [EPA-HQ-OAR-2015-0111-2607-A2 p.2]
ExxonMobil Refining & Supply Company
Lower the advanced biofuel and total renewable fuel volumes for 2016 to account for factors
including the blendwall which cannot be surmounted without putting fuel consumers, distributors
and many others at risk. [EPA-HQ-OAR-2015-0111-2270-A1 p.l]
Mass Comment Campaign submitted by DuPont employees (web) - (1)
If the three-year 2014 to 2016 RFS rule is finalized, consistent with the proposal, it would undo
much of the progress that has already been achieved and set an alarming precedent that biofuels
should not exceed 10% of the fuels supply. The current U.S. biofuels industry supports 852,000
U.S. jobs and has made great strides in promoting rural economic development across the U.S.
Much of this progress is attributable to the corn ethanol industry that has made significant
investments relying on the promise of the RFS. In addition, the U.S. is on the cusp of bringing
more than 100 million gallons of cellulosic ethanol capacity on-line by the end of this year. In
order to see additional investments in cellulosic ethanol technology, EPA must issue an RFS rule
that supports robust growth for existing corn ethanol capacity. [EPA-HQ-OAR-2015-0111-2825
p.2]
Missouri Farm Bureau (MFB)
EPA asserts that the proposed standards for 2015 and 2016 "will drive growth in renewable
fuels." We believe the volumes set forth in the rule will slow or even halt investment in the
infrastructure needed to distribute and dispense larger volumes of ethanol as well as dampen
prospects for the further development of advanced biofuels. [EPA-HQ-OAR-2015-0111-1824-
Al p. 2]
Union of Concerned Scientists
This combined Renewable Volume Obligation (RVO) for 2014, 2015, and 2016 represents a new
direction for the administration of the Renewable Fuel Standard (RFS), which is necessary and
appropriate not only because of ethanol blending challenges but also because the post 2015 RFS
enters a new phase, focused heavily on growth in cellulosic biofuels, production of which are
lagging statutory timelines significantly. Setting a direction for the next phase of the RFS has
obviously been challenging and controversial, and uncertainty over EPA's approach has
increased uncertainty in the biofuels marketplace and created a drag on investment. In this
context, the most important outcome of the present rulemaking process is to reduce uncertainty
and provide the maximum amount of clarity to all market participants and stakeholders about
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EPA's plans going forward. The limited scope of the present proposal means it cannot fully
eliminate uncertainty on the related policy questions. However, the present rule can do a great
deal to improve the situation, particularly by providing clear rational for how decisions are being
made and laying out next steps toward longer term forward guidance. [EPA-HQ-OAR-2015-
0111-2260-A1 p.l]
Response:
A number of stakeholders said that the proposed reductions in advanced biofuel would, if
finalized, increase uncertainty, and that as a result there would be increased reticence to invest in
new technologies or expanded infrastructure. Some stakeholders said that the proposed volume
requirements undermined investments already underway. On the contrary, we believe that
uncertainty would be considerably higher if we did not reduce the volume requirements for
advanced biofuel. Since we have determined that the statutory targets for advanced biofuel
cannot be met as described in Sections II.B.5 and II.B.6 of this final rule, setting final volume
requirements at the statutory targets would lead to shortfalls in supply, high and unstable RIN
prices, and potential non-compliance. In addition, since parties may petition EPA at any time to
exercise its general waiver authority, these circumstances would likely result in waiver requests,
which would lead to a significant period of unnecessary uncertainty in the market. In an effort to
avoid such an outcome, we are reducing the volume requirements for advanced biofuel in this
action to levels that are reasonably attainable but which nevertheless represent significant growth
over past levels.
For responses to comments suggesting that the proposed volumes would not drive ethanol use
above the E10 blendwall, see Section 2.7.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.3.1: Congressional intent to increase volumes
Section 2.6.1: E10 blendwall and demand for gasoline
Section 2.8.2: Comments supporting lower volumes
Section 4.1: General comments on cellulosic biofuels
Section 4.2: Cellulosic biofuel volume assessment
Section 7.1: General comments on economic impacts
Section 7.2: Agricultural impacts (food, animal feed, crops, feedstock)
Section 7.5: Retail fuel prices
Section 7.7: Impact on jobs and local/state economy
Section 7.8: Cost to consumers
Section 10.1: Outlook for 2017 and beyond
Section 10.6.3: RIN-generating pathway approvals
Section 10.6.4: Ethanol impacts on engines
Section 10.6.9: Biointermediates
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2.1.2 General Comments on Total Renewable Fuel
Comment:
62nd Legislative District, Pennsylvania House of Representatives
Specific concerns regarding the use of incentives to expand use ofethanol
Like many, 1 am generally skeptical about government intervention in a marketplace to support a
specific class of product. While there may be situations where such an action is appropriate, it
should be temporary. This is true even when, as mentioned above, the market intervention is
being done for a legitimate policy goal.
With a decade of incentives and market mandates, cellulosic biofuel, biomass-based diesel,
advanced biofuel remain uncompetitive and demand for them remains anemic. As an elected
official, I have heard from constituents who are unhappy with the expanded use of ethanol, but I
have not heard from constituents who are seeking expanded access to these types of fuels. This
seems to be an indication that efforts to induce adoption of these fuels will continue to not be
successful. [EPA-HQ-OAR-2015-0111-3462-A1 p. 2]
BP America (BP)
Standards that reflect both vehicle and infrastructure capability as certified by vehicle
manufacturers arid nationally recognized testing laboratories are essential to avoiding a poor
outcome for consumers and market participants. [EPA-HQ-OAR-2015-0111-1935-A1 p. 1]
DuPont
1 9
In the Proposed Rule EPA cites, at least ten times , some combination of practical or legal
constraints or barriers as an obstacle for setting the annual RVO for Total Renewable Fuel at a
value that would exceed 10% of the fuel pool. While EPA cites practical or legal constraints
extensively, the Proposed Rule does not contain an explanation, definition or scope for these
practical or legal concerns. As a result, stakeholders are left to guess as to the constraints that
EPA has considered and is concerned about. We can only imagine that vehicle warranties and
current state and local laws may be two categories of concern. While it is indisputable that cars
and trucks manufactured prior to 2001 cannot use fuel with ethanol blends beyond ten percent,
we are not suggesting that introducing higher volumes of ethanol would require gas stations to
only offer blends higher than E10. As a result, all vehicles should have access to fuel that
complies with any warranty requirements. [EPA-HQ-OAR-2015-0111-1826-A1 p.18]
Poet, LLC
EPA is at a crossroads: EPA can honor the 15 billion gallon bargain that Congress established
with biofuels producers and see continued investment in cellulosic biofuels. Doing so will create
the market incentives to solve the very biofuels distribution issues that EPA is concerned about
in the NOPR. By comparison, EPA's current approach in the NOPR undermines those
investments. [EPA-HQ-OAR-2015-0111-2481-A1 p. 11]
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White Energy
The renewable fuels industry has the capacity to produce lower-carbon fuels than we are today.
Without proper implementation of the RFS, what's the incentive? Why would the industry invest
billions of dollars in lower carbon technologies? This can be changed. The EPA can rebuild the
integrity of the RFS by doing what's right with the RVOs. This will unleash substantial
investment into the facilities that will create billions of gallons of lower-carbon fuels and will
improve our environment, reduce our dependence on fossil fuels, and increase our energy
security.
Response:
A number of stakeholders said that the proposed reductions in total renewable fuel would, if
finalized, increase uncertainty, and that as a result there would be increased reticence to invest in
new technologies or expanded infrastructure. Some stakeholders said that the proposed volume
requirements undermined investments already underway. As described in Section 2.1.1 in the
context of similar comments made for the proposed advanced biofuel volume requirements, we
believe that uncertainty would be considerably higher if we did not reduce the volume
requirements for total renewable fuel. Since we have determined that the statutory targets for
total renewable fuel cannot be met as described in Sections II.B.5 and II.B.6 of the final rule,
ignoring the constraints on supply and setting final volume requirements at the statutory targets
would lead to shortfalls in supply, RIN prices that are both considerably higher than current
levels and unstable, and potential non-compliance. In addition, since parties may petition EPA at
any time to exercise its general waiver authority, these circumstances would likely result in
waiver requests, which would lead to a significant period of unnecessary uncertainty in the
market. In an effort to avoid such an outcome, we are reducing the volume requirements for
total renewable fuel in this action to levels that represent the maximum achievable supply.
While we have reduced the volumes of advanced biodiesel and total renewable fuel below the
statutory targets for 2014, 2015, and 2016, the required volumes nevertheless represent
substantial growth over this time period. As described in Sections II.E.5 and II.F of the final
rule, the final volume requirements for 2016 in particular will require the market to supply more
renewable fuel than at any time in the past, and greater than would have been supplied in the
absence of the RFS program. As a result, the final volume requirements we are setting for 2016
are technology-forcing in the sense of requiring and expecting the market to invest, innovate, and
expand to increase supply above historical levels. This fact should provide confidence to market
participants that EPA is committed to driving growth in the use of renewable fuels, consistent
with Congressional intent.
One stakeholder said that the standards EPA sets must reflect constraints associated with both
vehicles and infrastructure to avoid a poor outcome for consumers and market participants.
While we have taken into account both types of constraints, including impacts of vehicle
warranties on consumer behavior as well as other relevant factors,, in our determination of the
volume requirements for 2016, we disagree that vehicle certification is the requisite criterion for
determining the types of fuels that those vehicles can use. For instance, EPA has previously
determined that El 5 can be used in model year 2001 and later vehicles, despite the fact that
many of those vehicles were not specifically certified on El 5.
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One legislator indicated that he had heard from constituents who were unhappy about the
expanded use of ethanol, but had not heard from any constituents who were seeking to expand
renewable fuels. However, the experience of this legislator is inconsistent with the range of
responses that we received on the NPRM. In fact, responses to the proposed 2016 volume
requirement for total renewable fuel were mixed. Some stakeholders, such as The American
Council on Renewable Energy and Trestle Energy, indicated that the proposed volumes appeared
to be reasonable given constraints on supply. Stakeholders who were obligated parties,
petroleum marketers and retailers, livestock owners, or small engine owners typically said that
the proposed volumes were too high. These stakeholders typically pointed to expected high
costs, adverse impacts on vehicles or engines, or a general inability of the market to supply the
proposed volumes. Many treated the constraints associated with the E10 blendwall as
representing a firm barrier that could not or should not be crossed. In contrast, renewable fuel
producers and farmers generally believed the proposed volumes to be too low. These
stakeholders typically pointed to certain elements of the market such as production capacity and
available feedstocks to support their views, and often argued that the power of the market to
respond to the standards EPA sets is essentially unlimited in its ability to overcome any potential
constraints on supply.
Some stakeholders said that EPA had cited legal and practical constraints on the supply of
renewable fuel that warranted reductions from the statutory targets, but had not provided any
explanation, definition, or scope for those constraints. The NPRM did provide examples of these
constraints, though in some cases they were described as limitations. Examples include the
following:
"...constraints as the "E10 blendwall" or demand for gasoline or diesel." (80 FR
33102)
"Practical and legal constraints on the supply of ethanol blends to the vehicles that
can use them (in the form of E10, E15, and higher level ethanol blends), driven in
part by lower gasoline consumption than was expected in 2007 when the target
statutory volumes were established." (80 FR 33014)
"...limitations on the supply of higher level ethanol blends, and of non-ethanol
renewable fuels." (80 FR 33107)
"...constraints associated with shortfalls in cellulosic biofuel production and other
advanced biofuels, and constraints associated with supplying renewable fuels to
the vehicles and engines that can use them." (80 FR 33108)
"...limitations in production and import capabilities..." (80 FR 33109)
"...including fuel infrastructure and other constraints." (80 FR 33111)
"Legal requirements limit ethanol content of most gasoline to 10% (which is
delivered as E10), but for subsets of vehicles allow up to either 15% ethanol (for
2001 and newer light-duty vehicles) or up to 85% ethanol (for flex fuel vehicles).
In addition there are marketplace and infrastructure constraints that limit the use
of higher level (>10%) ethanol blends." (80 FR 33113)
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"...as of today that there are a limited number of fueling stations selling high
ethanol blends, and as a result, the number of stations operates as a
constraint..." (80 FR 33114)
"...the number of FFVs with access to E85 also operates as a constraint on how
much ethanol can be delivered." (80 FR 33114)
Nevertheless, to provide additional clarity we have provided an expanded discussion of the
various constraints at play in our determination of the appropriate volume requirements to
set. This expanded discussion can be found in Section HE. 1 of the final rule.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.2.1: Cellulosic Waiver Authority
Section 2.2.2: General Waiver Authority
Section 2.2.2.1: Inadequate Domestic Supply
Section 2.3.1: Congressional intent to increase volumes
Section 2.3.2: Power of the market to respond to ambitious standards
Section 4.1: General Comments on Cellulosic Biofuels
Section 7.8: Cost to Consumers
Section 10.6.4: Ethanol impacts on engines
2.2 Statutory Authorities for Reducing Volumes Targets
Comment:
Advanced Ethanol Council
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 63-66.]
The problem is, as I'm putting on my attorney hat here, is that we have a problem structurally
with the regulation. And any time you set a goal in a Clean Air Act regulatory standpoint — from
a Clean Air Act regulatory standpoint, from an RFS Clean Air Act regulatory standpoint, once
you've agreed where you want to go, the next most important discussion is under what conditions
those obligations are waived.
We knew then that what we could not live with was what we call distribution waivers. Senator
Inhofe proposed it in 2005. It was rejected in the final bill. It was scratched from the law. It was
scratched from the law for a very, very, very specific reason, and that's because the oil industry
controls distribution. And so that if you send a signal to the marketplace that you really, really
wanted to have the numbers be bigger and the cellulosic biofuel industry be more robust, but
simultaneously tell the oil industry that every gallon of renewable fuel that they avoid from a
distribution and sales standpoint will get waived from the RFS, and every gallon of renewable
fuel that you actually voluntarily buy and distribute will get mandated for use going forward, the
oil industry is not stupid. They are not going to sign long-term offtake agreements with our
industry. And when long-term offtake agreements are not signed, financing does not flow. And
so, we have a problem here that we need to fix. EPA is saying we've got to fill up the bucket, but
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EPA has also got a big hole in the bottom of the bucket. And so, if we can clean up by November
the problems that you guys have in both the general waiver authority bucket and the D3
cellulosic waiver bucket, then this RFS will return to where we need it to go very, very quickly.
If we can't, we're not going to see the innovation that EPA wants to see.
If you look at the industry and why that chain reaction of waiver problems is happening, it's an
unforced error. We have an industry that has 15 billion gallons of capacity. You're not counting
billions of carryover RINs. We can get to the statute that would allow you to erase the waiver
problems that is creating the consternation that you're going to see in the room today.
American Coalition for Ethanol (ACE)
It appears EPA is mistakenly and unlawfully conflating the cellulosic waiver authority with the
general waiver authority to try and justify its proposed reductions. [EPA-HQ-OAR-2015-0111-
2543-A2 p. 5]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, p. 20.]
Congress struck the phrase 'distribution capacity' from the final statute out of concern that oil
companies would exploit it to confine ethanol blending at 10 percent. EPA is conflating the very
broad discretion you have under the cellulosic waiver authority with the very narrow, clear,
general waiver provisions of the RFS, and legal precedent dictates that when statutory language
is clear, EPA must adhere to the statute.
American Farm Bureau Federation (Farm Bureau)
The bulk of the total RFS2 renewable fuel volume consists of conventional ethanol. It is
primarily at this point that EPA's proposed rule becomes problematic. The proposed total
renewable volume, and therefore the proposed implied conventional ethanol mandate, is well
below the level mandated by EISA. No one disputes the fact that EPA has the authority to
partially waive RFS volume requirements. EPA has specific authorization to partially waive the
cellulosic ethanol mandate if sufficient volumes of product are not available to meet the
mandate, and EPA has had to use that waiver authority repeatedly over the life of the RFS2.
[EPA-HQ-OAR-2015-0111-2355-A1 p. 2]
Farm Bureau policy supports the RFS2 as passed in the Energy Independence and Security Act
of 2007. We do not believe that the criterion which would justify implementation of the two
waivers EPA is imposing has been met in either case. [EPA-HQ-OAR-2015-0111-2355-A1 p. 6]
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
We reluctantly support EPA's re-proposed percentage standards for 2014. We fully support
EPA's necessary exercise of its cellulosic and general waiver authority in the context of the 2014
RFS rulemaking to reflect the supply of RINs generated and separated in 2014 that are available
for compliance. [EPA-HQ-OAR-2015-0111-1948-A1 p.16]
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DuPont
EPA has acted beyond its granted authority and in ways inconsistent with the plain language and
underlying purposes of the statute. [EPA-HQ-OAR-2015-0111-1826-A1 p.4][EPA-HQ-OAR-
2015-0111-1044 p.134]
East Kansas Agri-Energy, LLC (EKAE)
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, pp. 288-289.]
The EPA proposal violates the law. Changing the RFS would be inconsistent with the statute and
contradictory to Congress' intent of this law. Moreover, the Clean Air Act does not permit the
Agency to take into account factors that affect consumption or perceived infrastructure and
capacity concerns in determining whether to waive or change the RFS. So the EPA's hypothesis
that the "blend wall" of 10% has been reached is not only inaccurate but, by law, cannot be
considered or used as a reason to propose changes to the RFS.
Growth Energy
For the reasons set forth below, Growth Energy urges EPA to change course and to refrain from
issuing a general waiver that is unauthorized, unnecessary, and counterproductive. EPA should
not decrease the 2014, 2015, or 2016 statutory requirements for renewable fuel, other than
through its cellulosic waiver authority. [EPA-HQ-OAR-2015-0111-2604-A2 p.2]
Kansas Farm Bureau
In conclusion, Farm Bureau policy supports the RFS2 as passed in the Energy Independence and
Security Act of 2007, and we do not believe there is reason to justify implementation of the two
waivers EPA is imposing. [EPA-HQ-OAR-2015-0111-1195-A1 p.2]
Marathon Petroleum Company
The agency acted correctly in using its statutory waiver authority to reduce the cellulosic,
advanced biofuel, and total renewable volumes to minimize the chance of hitting the blendwall.
[EPA-HQ-OAR-2015-0111-1932-A1 p. 4]
Mass Comment Campaign sponsored by ActionAid USA (web) - (2629)
We strongly support the EPA's use of its waiver authorities to lower the advanced mandate with
the reduction in the cellulosic mandate. It was disappointing, however, that the advanced volume
was not reduced fully in conjunction with the cellulosic volume and that the effective corn
ethanol mandate continues to grow. Also of serious concern, your discussion weighing whether
or not to waive down the advanced mandate did not fully acknowledge that failing to do so,
would effectively be expanding the mandate for food-based biofuels. There was no consideration
of what the impact of expanding production would be for food markets, land, the climate or local
communities. [EPA-HQ-OAR-2015-0111-2553-A1 p.l]
The RFS is entering a new phase where the majority of the growth should come from cellulosic
biofuels, which are expected to avoid the food security and land rights problems of food-based
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biofuels. Continued expansion of and reliance on food-based biofuels would be a step backward.
Particularly in light of blend-wall related constraints, the priority should be on renewable fuels
that offer real climate benefits without undermining hunger and land rights, not continued growth
in food-based biofuels which are an old technology. We urge the EPA to reconsider its decision
and reduce the advanced and cellulosic mandates in conjunction and not raise the effective corn
ethanol mandate. [EPA-HQ-OAR-2015-0111-2553-A1 p.1-2]
Minnesota Bio-Fuels Association (MBA)
The Renewable Fuel Standard is unequivocal. Compliance with the RFS will, by its very nature,
continue to stimulate the type of creativity and potential actions which the EPA outlines as
potential actions stakeholders, such as vehicle manufacturers, fuel retailers and other essential
parties in the fuel supply chain, can take to attain and fulfill the provisions of the RFS. [EPA-
HQ-OAR-2015-0111-1936-A1 p.13]
Missouri Farm Bureau (MFB)
As proposed, the biofuel volume requirement for 2015 is 4.2 billion gallons below the target set
by Congress. By 2016, the proposed volume requirement is 4.85 billion gallons below the
standard. Part of the reduction in 2015 is accounted for by waiving 2.89 billion gallons of the
cellulosic mandate, which EPA can do if sufficient volumes of product are not available. A small
portion of the waived volume is made up by a higher biomass-based diesel volume; therefore,
2.6 billion gallons is the total amount waived in the advanced biofuel category. The total
renewable fuel waiver—the difference between the EISA target and EPA's recommendation—is
not 2.6 billion gallons though; it is 4.2 billion gallons. The remaining volume to be waived is
conventional ethanol. The renewable fuels industry has more than enough capacity to produce in
excess of the 15 billion gallons of conventional biofuel prescribed for 2015 by the EISA. Supply
is not a problem. [EPA-HQ-OAR-2015-0111-1824-A1 p. 1-2]
Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
In its NPRM, EPA correctly recognized that the E10 blendwall prevents the use of renewable
fuel at the volume levels specified in the Clean Air Act. In imposing these statutory volumes,
Congress expected that the cellulosic biofuels industry would experience robust growth and that
transportation fuel use would continue to rise. Neither expectation has come to pass. Instead, the
cellulosic biofuel industry remains in its infancy, and gasoline usage has significantly declined.
As a result, the statutory volume levels are now grossly in excess of the amount of renewable
fuel that the economy can supply in transportation fuel to consumers. Accordingly, EPA
appropriately has proposed to exercise both its cellulosic waiver authority and its general waiver
authority to reduce the volume requirements to a level that was actually achieved in 20143 —as
the year is already complete—and that it suggests can actually be achieved in the few months
that remain in 2015.4 [EPA-HQ-OAR-2015-Oil 1-2603-A2, pp.1-2]
EPA has the authority to reduce the statutory volume requirements by waiving them. As EPA
stated in the NPRM, the agency may exercise its waiver authority under both Section
21 l(o)(7)(A)(ii) and Section 21 l(o)(7)(D)(i) of the Clean Air Act. [EPA-HQ-OAR-2015-0111-
2603-A2, p.7]
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3 Because no additional 2014 RINs can be made available for compliance in 2014, the Merchant
Refiners Group agrees in principle with EPA's decision to set 2014 mandates no higher than the
number of RINs that were actually made available for compliance in 2014. However, EPA
continues to struggle with limitations on its ability to determine the number of D6 RINs that will
be available for compliance in 2014. See Korotney, "Memo to docket on correction to the
determination of 2014 RIN supply to account for ethanol exports" (Jul. 24, 2015). For that
reason, EPA should either leave 2014 volumes as proposed or—instead of relying on RIN
generation figures that risk overstating actual supply in transportation fuel in 2014—EPA should
use other available data, such as EIA's May STEO 2015 figures on ethanol consumed in 2014.
Whatever approach it chooses, for the reasons set forth below, it is of paramount importance that
EPA not intentionally set standards that will draw down stocks of carryover RINs.
4 While these Comments focus on EPA's proposed mandates for 2016, the Merchant Refiners
Group observes that EPA's proposed mandates for 2015 are infected with many of the same
errors highlighted below. For example, in setting 2015 mandates, EPA: (i) disregards significant
EO usage; (ii) adopts the fallacy that the current RFS program can incent meaningful growth in
E85; (iii) ignores structural constraints that prevent ramping up biomass-based diesel production,
as well as limitations on meaningfully increasing sugarcane ethanol imports; and (iv) adopts
unrealistic projections for cellulosic biofuel production. As a consequence, for the same reasons
discussed below regarding 2016, the Merchant Refiners Group urge EPA to revise the 2015
proposed mandates.
National Association of Truck Stop Operators (NATSO)
NATSO supports EPA's exercise of its statutory waiver authority to avoid the blend wall and tie
RVOs to market realities. [EPA-HQ-OAR-2015-0111-2478-A1 p.2]
National Biodiesel Board
As the D.C. Circuit has found, Congress "directed" EPA "to ensure that transportation fuel sold
or introduced into commerce in the United States ..., on an annual average basis, contains at least
the applicable volume of renewable fuel[, advanced biofuel, cellulosic biofuel, biomass-based
diesel]" under the statute. NPRA, 630 F.3d at 147, 149 n.15 (quoting 42 U.S.C. §
7545(o)(2)(A)(i)) (emphasis added); see also 42 U.S.C. § 7545(o)(3)(B)(i). Based on the plain
meaning of the word "ensure," the statute requires EPA to "make certain" that the statutory
applicable volumes of each type of renewable fuel are sold or introduced into commerce. NPRA,
630 F.3d at 153. The requirement that "at least" the applicable volumes be sold signals
Congress's "intent that volumes not be reduced, at least not in the first decade of the renewable
o
fuel program." Id. at 156. Thus, EPA's nondiscretionary obligation is to enforce the statutory
volumes. See API v. EPA, 706 F.3d 474, 481 (D.C. Cir. 2013) (finding "in sharp distinction with
cellulosic biofuel, there appears to be no great obstacle to the production of advanced biofuel
generally, to the extent that estimates in the record are relatively low, that seems to be based on
want of a market, which of course continued pressure will tend to solve") (citing 77 Fed. Reg.
1320, 1334-1335 (Jan. 9, 2012)) (emphasis added). There is sufficient and increasing domestic
supply, which EPA must promote, not suppress. Even if Congress's volumes were "ambitious,"
EPA must strive to ensure the country meets those volumes. [EPA-HQ-OAR-2015-0111-1953-
A2 p.5-6]
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Indeed, EPA is trying to create its own version of how it thinks the RFS market should operate,
rather than the way Congress intended. That Congress established a mandate is evidence that
EPA's job is not to determine how the market will react. Among EISA's enumerated purposes is
"increasing] the production of clean renewable fuels." 121 Stat. 1492. To allow EPA to waive
the minimum applicable volumes on the basis of considerations found nowhere in the statute
would run counter to its explicit purposes. [EPA-HQ-OAR-2015-0111-1953-A2 p.87-88]
In establishing a maximum achievable control technology requirement for regulation of
hazardous air pollutants, the D.C. Circuit has recognized that Congress sought to have its
directives be technology-forcing and rejected the notion that this means what the market can
handle. [EPA-HQ-OAR-2015-0111-1953-A2 p.89]
EPA provides no explanation why it needs to use its waiver authority for advanced biofuels or
why it cannot rely solely on its general waiver authority to address ethanol concerns only. Nor
can it. There is more than adequate supply for higher volumes of advanced biofuels. [EPA-HQ-
OAR-2015-0111-1953-A2 p. 104]
EPA does not explain, however, what consultation was provided with respect to its proposed
volumes here. Indeed, USDA and DOE would likely be in better position to inform EPA if there
are other advanced biofuels that can be competitive and if the proposed volumes appropriately
incentivize those fuels and support the programs being implemented by USDA and DOE. [EPA-
HQ-OAR-2015-0111-1953-A2 p.105]
EPA also purports to be furthering the intent of Congress by setting the volumes at the
"maximum achievable" volume. 80 Fed. Reg. at 33,117. But, EPA's analysis keeps referencing
levels "as can reasonably be justified," id. at 33,106, and levels that are "market-driving while
staying within the limits of feasibility." Id. at 33,109. As outlined above, Congress does not
include cost considerations or "feasibility" in the waiver authority provisions. Moreover, as EPA
recognizes, "[Congress] did not intend growth in the renewable fuels market to be ultimately
prevented by those challenges, including, such constraints as the 'E10 blendwall' or demand for
gasoline or diesel." Id. at 33,102. Indeed, EPA admits that there were increases in renewable fuel
use in 2013 and 2014 despite the saturation of market with ethanol. Id. at 33,122. Reducing the
statutory volumes based on an assessment of what might "reasonably" be consumed, rather than
promoting production, undermines the mandates Congress sought to impose to create statutory
incentives to promote renewable fuel production and, thereby, use. Allowing the obligated
parties to dictate demand and set the volumes based on that demand does not meet these goals. In
so doing, it perpetuates the reliance on fossil fuels. [EPA-HQ-OAR-2015-0111-1953-A2 p.l 10]
The petitions filed by API/AFPM, certain individual obligated parties, and some state governors
under Section 21 l(o)(7)(A) to waive the 2014 RVOs must be rejected. [EPA-HQ-OAR-2015-
0111-1953-A2p.l36]
66 These comments are incorporated by reference.
67 Because EPA did not reduce the statutory volume for 2013, any challenge to EPA's
interpretation was not ripe at that time. EPA previously declined to respond to these comments,
because it had not adjusted the other standards. See NBB Comments on RFS2 Proposed Rule, at
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48-49 (EPA-HQ-OAR-2005-0161-2249); Response to Comments at 3-255 (EPA-HQ-OAR-
2005-0161-3188); see also NBB Comments on 2011 and 2012 RFS proposals (EPA-HQ-OAR-
2010-0133-0070; EPA-HQ-OAR-2010-0133-0159).
Poet, LLC
The NOPR says renewable fuels "growth should emphasize advanced biofuels."105 However, the
statute doesn't work that way. The RFS sets separate targets for Advanced and Base Renewable
biofuels. One target is not favored over the other, and thus the statutory structure does not
support "emphasizing" the Advanced target to the detriment of the Base Renewable target.
[EPA-HQ-OAR-2015-0111-248 l-Alp.25]
105 NOPR at 33,123.
POET-DSM Advanced Biofuels
Nevertheless, accepting the NPRM's premise that EPA has some discretion in how to interpret
the statute, the Agency would need to explain to a reviewing court how EPA had effected a
"reasonable accommodation of conflicting policies" by giving the statute the interpretation that
EPA adopted. Chevron, 467 U.S. at 485. Judged by that standard, and in light of the
straightforward and ultimately simple cellulosic ethanol value equation we present above, the
NPRM could not withstand even deferential scrutiny. [EPA-HQ-OAR-2015-0111-1943-A1 p.9]
Renew Kansas
However, ample supplies of total renewable fuels exist, as does the capacity in the market to
produce sufficient biofuels to meet the targets established by Congress. The Clean Air Act does
not grant the EPA authority to set annual volume target based on a perceived 'blend wall' or
perceived infrastructure limitations. [EPA-HQ-OAR-2015-0111-1309-A1 p.3]
Renewable Fuels Association (RFA)
As addressed elsewhere in these comments, EPA's proposed use of a general waiver to address
perceived constraints on ethanol consumption clearly oversteps the bounds of the Agency's
statutory authority and undermines Congressional intent. But beyond these legal maladies, the
use of a general waiver to reduce the 2014-2016 RVOs for renewable fuel is completely
unnecessary; the statutory volumes are "reasonably achievable" with judicious use of the
cellulosic waiver provision, correction of an important error regarding 2014 RINs available,
consideration of carryover RINs, and a proper understanding of the RIN market's ability to drive
expanded renewable fuel production and use. [EPA-HQ-OAR-2015-0111-1917-A1 p. 16]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, pp. 33-34.]
We continue to believe that EPA is overstepping the bounds of its legal authority by proposing to
partially waive the RFS, based on perceived distribution capacity constraints. Nothing in the
statute allows EPA to set the RVOs based on the so- called blend wall or alleged infrastructure
limitations.
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Wisconsin BioFuels Association
Even in its own announcement the EPA itself admits the proposed volumes are below those set
by Congress. The EPA does not have the legal authority for such an action. [EPA-HQ-OAR-
2015-0111-2539-A2p.l]
Response:
Commenters had many comments about the use of our general and cellulosic waiver
authorities. Some commenters noted that we were conflating the authorities, or that we were
using our broad discretion under the cellulosic waiver authority to impermissibly reduce volumes
under the general waiver authority. For the final rule, we are relying solely on the cellulosic
waiver authority for reductions in the advanced biofuel standard. The reduction in the total
renewable fuel standard is supported by both the cellulosic waiver authority and the general
waiver authority.
Many of the comments in this section touch on issues explored and addressed more fully in the
following three sections: 2.2.1 on cellulosic waiver authority, 2.2.2 on general waiver authority,
and 2.2.2.1 on inadequate domestic supply. Please see these sections for a more thorough
discussion of issues specific to those authorities and terms.
Some commenters supported exercising both the cellulosic and general waiver authorities.
Others argued our use of the waiver authorities was inconsistent with the plain language and
purpose of the statute or unnecessary and unsupported. Others still argued that the use of the
cellulosic waiver authority was appropriate while the use of the general waiver authority was
beyond the scope of EPA's authority. Some commenters suggested that implementing the
program using statutory volumes is all that needs to be done to foster "creativity" and
compliance. EPA disagrees with commenters who argued that our use of the waiver authorities is
inappropriate and strongly believes that the statutory volumes of cellulosic biofuel, advanced
biofuel and total renewable fuel cannot be attained within the timelines set forth in the Act
because of the many factors discussed in the final rule and this document. We believe that our
interpretation of the authorities used to reduce volumes today is consistent with the text and
purpose of the act, and is reasonable and appropriate.
Some commenters supported our proposed use of the waiver authorities to reduce the volume of
advanced biofuels but espressed disappointment that the advanced volume was not reduced to
the fullest extent possible using the cellulosic waiver authority for various reasons. Some
commenters noted that this would result in continued growth of the "effective corn ethanol
mandate." They critiqued our failure to consider the impact of expanding biofuel production on
food markets, land, the climate, or local communities. In the final rule we have declined to
reduce the advanced volume by the full amount of the cellulosic biofuel waiver because we
believe the volumes of advanced biofuels we are finalizing today are reasonably attainable, and
because we believe there is a benefit in terms of GHG reduction and energy security in requiring
that these volumes be used, as is more fully described in the final rule. The impact of expanding
biofuel production on food markets, land, and local communities is discussed in this document in
sections 7 and 8. To the extent that the record suggests that there are negative impacts in such
areas from the increased advanced biofuel production and use that is associated with this final
rule, we do not believe that such negative impacts outweigh the positive GHG reduction and
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energy security benefits associated with increased advanced biofuel use. While there is no "corn
mandate" under the statute, the difference between the total renewable fuel volume requirement
and the advanced biofuel volume requirement can be satisfied with corn ethanol (as well as other
types of renewable fuel). EPA is using the general waiver authority based on a finding of
inadequate domestic supply to reduce the total renewable fuel volume requirement to a level
representing the maximum volume that is reasonably achievable. We believe that this is
appropriate, since we believe we only have authority to waive volumes on the basis of
inadequate domestic supply to the extent an inadequacy in supply exists. (That is, we are not
authorized to reduce levels below the "adequate supply" level, except insofar as other bases for
exercising the general waiver authority, such as severe economic or environmental harm, may be
present.) This approach is consistent with Congressional intent to grow use of renewable fuel
over time, including use of corn ethanol, except to the extent that conditions justifying a waiver
are present. More specific discussion of our consideration of the effects on food markets,
climate, and local communities is presented in section 2.2.1 of this document.
Some commenters noted that the RFS program is not intended to favor advanced biofuels, as it
sets separate targets for advanced biofuels and total renewable fuel. However, we note that the
purpose of the statute is increased production of clean renewable fuels, and all growth in
volumes in the statute beyond 2014 is in advanced biofuels. An emphasis on advanced biofuels is
therefore entirely consistent with the statute. However, we also note that our final action
establishes a record requirement for the use of total renewable fuels, including a substantial
growth in the volumes that may be satisfied with conventional biofuels.
Some commenters noted that there was clearly not a lack of supply due to the industry's capacity
and availability of carryover RINs. However, we interpret "supply" to involve a more
comprehensive view than just production capacity. We also do not consider carryover RINs to be
part of the "supply" in determining if an inadequate domestic supply exists. We do, however,
take carryover RINs into consideration in determining whether or not we should exercise our
discretion to issue a waiver of the statutory volumes based on a determination of "inadequate
domestic supply." Please see section 2.2.2.1 on inadequate domestic supply, and section 6.1 on
carryover RINs for further discussion of this issue.
Some commenters noted that the absence of a reference to "distribution capacity" from the final
bill is an indication that EPA is precluded from considering "distribution capacity" in evaluating
"inadequate domestic supply." Many commenters made statements about why this phrase was
removed, but there was no evidence found or provided supporting those statements about why
this phrase was removed. EPA disagrees with these commenters' interpretations of both the
meaning of the lack of reference to "distribution capacity" in the final rule and the factors EPA
can consider when evaluating whether there is "inadequate domestic supply." There is no
explanation in the legislative history of why Congress adopted the version they did and there are
various potential explanations as mentioned in Section 2.2.2.1 of this document and the final
rule. Given the ambiguity in the statute on the meaning of the phrase "inadequate domestic
supply," it is appropriate for us to interpret the phrase in a manner that best comports with the
achieving the purposes of the statute. Please see section 2.2.2.1 on inadequate domestic supply
for further discussion of this issue.
Despite the statutory language that EPA is to "ensure" that gasoline in the United States contains
the applicable volume of renewable fuel provided in the statute, the statute also provides EPA
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with the authority to issue a waiver of those statutory volumes in specific situations. CAA
section 21 l(o)(7)(A)(D) requires EPA to reduce the cellulosic biofuel volumes when the
projected production volume is less than the statutory volume. That provision also allows EPA to
reduce advanced biofuels volumes and total renewable fuel volumes by the same or a lesser
amount. Additionally, CAA section 21 l(o)(7)(A) provides EPA with the authority to reduce
statutory targets on the basis of a finding of inadequate domestic supply, severe harm to the
environment, or severe economic harm. Thus, the statute does not give EPA a nondiscretionary
obligation to enforce the statutory volumes, but instead provides other avenues for EPA to adjust
the statutory volumes in particular situations. Situations justifying the use of the cellulosic
waiver authority and the general waiver authority are before us today.
A commenter noted that EPA's use of the term "maximum achievable" in the NPRM did not
match the meaning of that term under other Clean Air Act programs. In response, we note that
we have used the term to help explain our approach to identifying required volumes when
exercising the general waiver authority based on a determination of inadequate domestic supply.
The words "maximum achievable" do not appear in the statutory waiver provision, and we are
not required to give this term the same meaning as it is given in other provisions of the Act.
A commenter suggested that EPA was acting inappropriately in setting volumes at what may
"reasonably" be consumed rather than promoting production. In the final rule we are establishing
volume requirements for total renewable fuel at the maximum levels that are reasonably
achievable taking into account the ability of the market to respond to the standards we set. We
believe that this approach will promote both increased production, and increased investment in
capacity to distribute and use renewable fuels, while also acknowledging the constraints in the
current market on what is achievable. We do not interpret the statute to require us to set volume
requirements that are unreasonable under the circumstances.
Some commenters noted that EPA failed to base its interpretation of "inadequate domestic
supply" on "reasonable accommodation of conflicting policies," citing Chevron v. NRDC, 467
U.S. at 485. However, we find that our broad interpretation of "supply" does accommodate
conflicting policies by considering all of the potential constraints from production to ultimate
supply to the consumer, on the one hand, and the overriding objective of the Act to increase the
use of renewable fuels over time, on the other. Our final decision is consistent with the waiver
authorities uses, and will result in very considerable, yet achievable, growth in renewable fuel
use of the time period in question.
Some parties said that EPA had not sufficiently described why the statutory target for advanced
biofuel cannot be reached in 2016. . We agree that it is appropriate to elaborate on the
limitations in the supply of advanced biofuel that have led us to conclude that the statutory target
for advanced biofuel cannot be reached in 2016. This discussion can be found in Section II.B.5
of the final rule.
One commenter questioned whether EPA had fulfilled its obligation to consult with the
secretaries of Energy and Agriculture in establishing the final standards which make use of the
waiver authorities. EPA has had considerable consultation with DOE and USDA regarding the
proposed volumes and the exercise of waiver authorities, including (but not limited to),
circulating multiple drafts of the rule for consideration in inter-agency review. Additional
information can be found in the docket for this rule.
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For responses to comments on whether the statutory volume requirements can be reached in
2014, 2015, or 2016, under either the general waiver authority or the cellulosic waiver authority,
see Section 2.2.4.
For responses to comments on how the REST mechanism operates to subsidize the cost of
renewable fuels at retail, see Section 2.3.2.
For responses to comments stating that the E10 blendwall is not a constraint, or has been
fabricated by the refining industry, see Section 2.4.
For responses to comments stating that production capacity should be the basis of the volume
requirements, see Section 2.4.
For responses to comments suggesting that obligated parties have failed in their statutory
responsibilities to invest in the infrastructure needed to expand renewable fuel supply, see
Section 2 7 1
Section 2.7.1.
For responses to comments on the environmental impacts of the proposed volume requirements,
see Section 8.
2.2.1 Cellulosic Waiver Authority
Comment:
Advanced Biofuels Business Council (ABBC)
While the ABBC has some concerns about the appropriateness of the reductions contained in the
proposed rule, particularly with regard to the general intent of Congress, the so-called blend wall
and related legal directives to "increase the production of clean renewable fuels," the proposed
blending targets for cellulosic biofuel and advanced biofuel appear to at least not run afoul of
CAA section 21 l(o)(7)(D)(i). [EPA-HQ-OAR-2015-0111-3528-A1 p. 11]
American Coalition for Ethanol (ACE)
If cellulosic biofuel production is less than the applicable volume provided in the statute, this
waiver authority compels EPA to reduce the cellulosic biofuel RVO to the projected volume
available during the calendar year. [EPA-HQ-OAR-2015-0111-2543-A2 p. 5]
American Council on Renewable Energy (ACORE)
ACORE recommends that USEPA should set total RVOs at levels dictated by the statute, less the
amount that USEPA proposes to reduce advanced biofuel targets due to a projected shortfall in
cellulosic ethanol. [EPA-HQ-OAR-2015-0111-1926-A1 p.13]
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
Due to the nested nature of the standards, to lower the overall cost of the program to consumers
and to make the regulations more achievable, EPA should always extend the full volume of any
cellulosic waiver to both the advanced biofuel and the total renewable fuel RVO requirements.
[EPA-HQ-OAR-2015-0111-1948-A1 p.24]
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Badger State Ethanol
We recommend that EPA use only its cellulosic— biofuel waiver authority and refrain from the
pronged misuse of the 'general' waiver authority. EPA should carry through the full amount of
the cellulosic biofuel waiver to the advanced and total renewable fuel categories, keeping the
2014, 2015 and 2016 requirements for undifferentiated renewable fuel at the levels intended by
Congress (14.4, 15.0, and 15.0 billion gallons, respectively). [EPA-HQ-OAR-201 5 -01 11-1201-
A2 p. 2]
Big River Resources, LLC
We recommend that EPA use only its cellulosic biofuel waiver authority and refrain from the
proposed misuse of the "general" waiver authority. EPA should carry through the full amount of
the cellulosic biofuel waiver to the advanced and total renewable fuel categories, keeping the
2014, 2015 and 2016 requirements for undifferentiated renewable fuel at the levels intended by
Congress (14.4, 15.0, and 15.0 billion gallons, respectively). [EPA-HQ-OAR-201 5 -01 11-3 419-
Biotechnology Industry Organization
EPA has failed properly to justify its use of its cellulosic waiver authority94 to reduce the
advanced and total renewable fuel volumes to the same extent that it is proposing to reduce
RVOs for cellulosic biofuels. EPA has failed to show that there are insufficient potential gallons
of advanced and total renewable fuels, used along with carryover RIN credits, to meet the full
RVO requirements. [EPA-HQ-OAR-2015-0111-1958-A2 p. 25]
94 See 42 U.S.C. § 7545(o)(7)(D)(i).
Brazilian Sugarcane Industry Association (UNICA)
It does not appear that EPA made any efforts to calculate exactly how much sugarcane ethanol
might be needed and available to support a lower reduction under section 21 l(o)(7)(D)(i); it just
assumed the maximum reduction in advanced biofuels and total renewable fuels possible under
the provision, implying there were no such volumes of those fuels available to make up the
shortfall. As indicated above, EPA's assumptions about the availability of sugarcane ethanol
imports are incorrect. [EPA-HQ-OAR-201 5-01 11-2495-A1 p.17]
UNICA does not believe that the cellulosic waiver provision can be read, consonant with the
purposes of the RFS2 program, to authorize reductions in advanced biofuel volumes or total
renewable fuel volumes where such fuels are available to replace any projected shortfall in
cellulosic biofuels. [EPA-HQ-OAR-201 5-01 11-2495-A2 p.7]
Central Indiana Ethanol (CIE)
We recommend that EPA use only its cellulosic biofuel waiver authority and refrain from the
proposed misuse of the 'general' waiver authority. EPA should carry through the full amount of
the cellulosic biofuel waiver to the advanced and total renewable fuel categories, keeping the
2014, 2015 and 2016 requirements for undifferentiated renewable fuel at the levels intended by
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Congress (14.4, 15.0, and 15.0 billion gallons, respectively). We provide more detail below to
support this recommendation. [EPA-HQ-OAR-2015-0111-2821-A2 p.2]
Commonwealth Agri-Energy, LLC
We recommend that EPA use only its cellulosic biofuel waiver authority and refrain from the
proposed misuse of the 'general' waiver authority. EPA should carry through the full amount of
the cellulosic biofuel waiver to the advanced and total renewable fuel categories, keeping the
2014, 2015 and 2016 requirements for undifferentiated renewable fuel at the levels intended by
Congress (14.4, 15.0, and 15.0 billion gallons, respectively). We provide more detail below to
support this recommendation. [EPA-HQ-OAR-2015-0111-1215-A2 p.2]
Growth Energy
EPA then proposed to flow the cellulosic waiver through to reduce the statutory advanced
biofuel and renewable fuel volume requirements.54 Although EPA did not say so explicitly, it is
evident that it would flow the cellulosic waiver through only partially because the proposed
cellulosic waivers are greater than the proposed waivers of the advanced levels. Specifically,
EPA proposed to reduce the cellulosic requirement by 1.717 bil gal in 2014, 2.894 bil gal in
2015, and 4.044 bil gal in 2015, but to reduce the advanced requirement only by 1.070 bil gal in
2014, 2.600 bil gal in 2015, and 3.850 bil gal in 2016.55 EPA then proposed to also flow the
cellulosic waiver through to the renewable fuels requirement for all three years by the same
amounts as to advanced.56 [EPA-HQ-OAR-2015-0111-2604-A2 p.10]
The statutory renewable fuel volume requirements, after being reduced by EPA's proposed
cellulosic waiver flow-through, are 17.08 bil gal for 2014, 17.90 bil gal for 2015, and 18.40 bil
gal for 2015.174 If EPA maintained these cellulosic waiver flow-throughs, the combined
production capacity of ethanol and BED alone would be more than enough to meet the adjusted
volume requirements.175 In fact, even in the worst case, supply would suffice to support 1 bil
RINs in excess of these requirements. Consequently, EPA lacks the power to invoke its general
waiver authority to reduce the renewable fuel volume requirements for 2014-2016 further than it
proposes to do by flowing the cellulosic waiver through. [EPA-HQ-OAR-2015-0111-2604-A2
p.31-32]
54 Mat 33,110-33,111.
55 See id. at 33,122.
56 Mat 33,110.
174 As explained above, EPA proposed to reduce the cellulosic requirement by 1.717 bil gal in
2014, 2.894 bil gal in 2015, and 4.044 bil gal in 2015, but to flow that waiver through only by
1.070 bil gal in 2014, 2.600 bil gal in 2015, and 3.850 bil gal in 2016. See 80 Fed. Reg. at
33,122.
175 We assume for purposes of this comment that EPA performed its projection calculations
properly when calculating the cellulosic waiver. If we discover that EPA made errors in this
assessment, we reserve the right to object to the cellulosic waiver at a later time.
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Indiana Farm Bureau
Farm Bureau policy supports the RFS2 as passed in the Energy Independence and Security Act
of 2007. We do not believe that the criterion which would justify implementation of the two
waivers EPA is imposing has been met in either case. [PA-HQ-OAR-2015-0111-2486-A1 p.4]
Husker Ag LLC
We recommend that EPA use only its cellulosic biofuel waiver authority and refrain from the
proposed misuse of the 'general' waiver authority. EPA should carry through the full amount of
the cellulosic biofuel waiver to the advanced and total renewable fuel categories, keeping the
2014, 2015 and 2016 requirements for undifferentiated renewable fuel at the levels intended by
Congress (14.4. 15.0. and 15.0 billion gallons, respectively). rEPA-HQ-OAR-2015-0111-2044-
A2 p.2]
Iowa Corn Growers Association (ICGA)
The statute dictates that the RVO for conventional/corn ethanol is:
2013: 13.8 billion gallons
2014: 14.4 billion gallons
2015: 15 billion gallons
2016: 15 billion gallons
The current law governing the RFS provides the EPA with specific authority to adjust to shifting
and unforeseen market conditions often called "waiver" authorities. The first is section
21 l(o)(7)(D) of the Clean Air Act. When the anticipated production of cellulosic ethanol is not
expected to meet its targets, this allows the EPA the flexibility to reduce the target for cellulosic
if needed. This provision also allows the EPA to reduce the advanced biofuel standard and total
renewable fuel standard by the same (or lesser) amount as the reduction in cellulosic. This
waiver can only be invoked when renewable fuel production is low. The current authority keeps
the RFS working by ensuring that as long as the fuel can be produced, it can be sold. [EPA-HQ-
OAR-2015-0111-1820-A1 p. 1-2]
Iowa Renewable Fuels Association
The members of IRFA are adamantly opposed to the proposed volume requirements and we
strongly encourage the EPA to reconsider its proposal. We recommend the EPA only exercise its
cellulosic biofuel waiver authority and discard its convoluted misinterpretation of the "general"
waiver authority. EPA should maintain the levels for undifferentiated renewable fuel at the levels
prescribed by Congress for 2014, 2015, and 2016 (14.4, 15.0, and 15.0 billion gallons
respectively), while setting the biomass-based diesel levels for 2016 and 2017 at no less than 2.0
and 2.3 billion gallons respectively. [EPA-HQ-OAR-2015-0111-1957-A2 p. 2]
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Mass Comment Campaign sponsored by ActionAid USA (web) - (2629)
Under the justification, the rule stated that one of the primary reasons for reducing the mandates
was 'Insufficient supply of other advanced biofuel to offset the shortfall.' This suggests that the
EPA would be willing to consider backfilling missing cellulosic gallons with food-based biofuels
to meet the advanced quota, if there is sufficient supply. This is a dangerous signal to be sending
biofuel producers. As the proposed rule pointed out, there will be a growing gap between the
available cellulosic biofuel volume and the mandate going forward. Biofuel producers then
would have every incentive to then try to expand production of food-based biofuels, regardless
of the possible resulting land use change, impact on food prices or consequences for local
communities, to backfill missing gallons. Signalling that there may again be a growing market
for first generation, food-based biofuels is the absolute wrong message to be sending producers.
At a minimum, the EPA must develop far more stringent requirements and analysis for food-
based biofuels going forward, which would include careful study of the impact on food prices,
land use change and land rights, climate, and other impacts on local communities. [EPA-HQ-
OAR-2015-0111-2553-A1 p.2]
N. Bowdish Company
I recognize the authority Congress granted EPA to adjust the renewable volume obligations
based on the Cellulosic Waiver Authority. [EPA-HQ-OAR-2015-0111-1202-A1 p.2]
National Biodiesel Board
Congress did identify the criteria that would provide "substantial justification" for reducing the
statutory volumes—the criteria outlined under Section 21 l(o)(7)(A). Indeed, EPA is limited to
such criteria even under the cellulosic biofuel waiver provision. [EPA-HQ-OAR-2015-0111-
1953-A2p.82]
NBB explained that the statute does provide EPA with procedural and substantive criteria for the
reduction of the statutory volumes for advanced biofuels, which are outlined under Section
211(o)(7)(A). EPA-HQ-OAR-2012-05460069 at 16-17.66 In response, EPA contended that
Section 21 l(o)(7)(D)(i) is a separate and independent provision, and, because it has no cross-
references to Section 21 l(o)(7)(A), EPA had no obligation to consider these criteria. 78 Fed.
Reg. at 49,810. EPA further stated that, "[i]f it did, the waiver language in 21 l(o)(7)(D)(i) would
be superfluous, since 21 l(o)(7)(A) would already provide the discretionary authority to reduce
advanced biofuel and total renewable fuel in the circumstances where the criteria in 21 l(o)(7)(A)
are satisfied." Id. at 49,810-49,811. EPA is incorrect.67 The second sentence in Subparagraph
(D)(i) does not create brand new authority with respect to advanced biofuels or renewable fuels.
It merely clarifies that EPA may (not must) reduce the volumes, if allowed under Subparagraph
(A), by the same or a lesser volume as the reduction in the cellulosic biofuel volume, not more.
[EPA-HQ-OAR-2015-0111-1953-A2 p.83]
In addition, incorporating the criteria from the general waiver provision in Section 21 l(o)(7)(A)
in assessing whether to reduce the advanced biofuel volume under Section 21 l(o)(7)(D) does not
render any provision superfluous. Subparagraph (D) provides an alternative basis for reducing
the cellulosic biofuel volume and supports the alternative procedure to the petition required and
addressed in Subparagraphs (B) and (C), confirming that any other waiver under this provision is
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limited to the amount of the cellulosic biofuel reduction (i.e., it cannot go beyond that reduction).
[EPA-HQ-OAR-2015-0111-1953-A2p.85]
Whether a shortfall in projected cellulosic biofuel production translates into a shortfall of "the
same or a lesser volume" in the broader categories, depends solely on the availability of other
fuels. Thus, even if not compelled to consider the criteria in Subparagraph (A), the availability of
other biofuels to make up the shortfall (that is, the inadequate domestic supply in cellulosic
biofuel) is the only relevant criterion to reduce those volumes. [EPA-HQ-OAR-2015-0111-1953-
A2 p.87]
National Chicken Council (NCC)
NCC also believes the Clean Air Act provides EPA adequate authority to reduce the renewable
fuel volume requirements by the same or lesser amount as EPA reduces cellulosic biofuel
targets. The statutory language plainly states that EPA may "reduce the applicable volume of
renewable fuel... by the same or a lesser volume."7 The Clean Air Act does not require that the
renewable fuel volume be decreased in fixed proportion relative to the advanced biofuels
requirement; the only point of reference in the statute is the cellulosic biofuel requirement. NCC
therefore fully supports using this authority to reduce the renewable fuel target by the same
amount as the cellulosic biofuel target is reduced. [EPA-HQ-OAR-2015-0111-1814-A1 p.7]
742U.S.C. § 7545(o)(7)(D).
National Corn Growers Association (NCGA)
NCGA believes the EPA is properly using the waiver authority by reducing the obligated
volumes for cellulosic and advanced biofuels. [EPA-HQ-OAR-2015-0111-1939-A1 p.5]
Novozymes Americas
We respectfully request that EPA use only its cellulosic biofuel waiver authority and refrain from
the proposed misuse of the "general" waiver authority. [EPA-HQ-OAR-2015-0111-3277-A1 p.2]
Pacific Ethanol, Inc.
We recommend that EPA use only its cellulosic biofuel waiver authority and refrain from the
proposed misuse of the "general" waiver authority. EPA should carry through the full amount of
the cellulosic biofuel waiver to the advanced and total renewable fuel categories, keeping the
2014, 2015 and 2016 requirements for undifferentiated renewable fuel at the levels intended by
Congress (14.4, 15.0, and 15.0 billion gallons, respectively). [EPA-HQ-OAR-2015-0111-2508-
A2, p.2]
Poet, LLC
EPA requests comment on whether it "would be appropriate to only waive volumes of advanced
biofuel and total renewable fuel under the cellulosic waiver authority for 2016" without waiving
1 1 Q
volumes under the general waiver authority. POET's answer to this question is "yes." [EPA-
HQ-OAR-2015-0111-2481-A1 p.31]
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118 NOPR at 33,123 (emphasis added).
The Andersons, Inc.
We recommend that EPA use only its cellulosic biofuel waiver authority and refrain from the
proposed misuse of the 'general' waiver authority. EPA should carry through the full amount of
the cellulosic biofuel waiver to the advanced and total renewable fuel categories, keeping the
2014, 2015 and 2016 requirements for undifferentiated renewable fuel at the levels intended by
Congress (14.4. 15.0. and 15.0 billion gallons, respectively). [EPA-HQ-OAR-2015-0111-2509-
A2 p.2]
Union of Concerned Scientists
Our specific recommendations include:
• Apply the full cellulosic waiver to the advanced and renewable mandates. [EPA-HQ-
OAR-2015-0111-2260-A1 p.2]
Avoid discretionary increases in food based fuels by applying the full cellulosic waiver to
advanced and renewable mandates
On pages 33104 and 33110 EPA seeks comment on the criteria under which it should exercise its
cellulosic waiver authority. If EPA does not reduce the advanced and renewable mandates by the
same amount as the cellulosic mandate, it is in effect making a discretionary enlargement of the
mandate for food based fuel beyond the level implied by the statute. [EPA-HQ-OAR-2015-0111-
2260-A1 p.4]
While EPA clearly has authority to make such an enlargement, it is important that the exercise of
this authority is made with consideration of all the goals and criteria set forth in section 211
(o)(2)(B)(ii) of the Clean Air Act, which include the impact on climate change, ecosystems,
wildlife habitats, infrastructure, the price and supply of agricultural commodities and food prices.
[EP A-HQ-OAR-2015-0111-2260-A1 p.4]
By adopting a clear approach to the cellulosic waiver now, the RFS will still provide and
aggressive schedule of growth in non-cellulosic advanced biofuels and will reduce the role of
speculation about EPA administration from driving the marketplace. [EPA-HQ-OAR-2015-
0111-2260-A1 p.5]
Union of Concerned Scientists (UCS), Clean Air Task Force, Environmental Working
Group, ActionAid USA, and National Wildlife Federation (NWF)
EPA's discussion of this decision restricted the criteria, and did not include consideration of all
the goals and criteria set forth in section 211 (o)(2)(B)(ii) of the Clean Air Act, which include the
impact on; climate change, ecosystems, wildlife habitats, infrastructure, the price and supply of
agricultural commodities and food prices. [EPA-HQ-OAR-2015-0111-2476-A1 p.l]
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Response:
Most comm enters did not object to our use of the cellulosic waiver authority to reduce volumes
of cellulosic biofuels. The statute provides that we shall reduce volumes based on the projected
volume of cellulosic biofuel production, and we have done so in this rulemaking.
When EPA uses the cellulosic waiver authority to reduce volumes of cellulosic biofuel, we are
also authorized to reduce volumes of total renewable fuel and advanced biofuel by the same or a
lesser amount. The statute provides no criteria which EPA must consider in making the
determination whether to reduce volumes of total renewable fuel and advanced biofuel. The D.C.
Circuit has noted that this provision grants EPA "broad discretion regarding whether and in what
circumstances" to reduce volumes. Monroe v. EPA, 750 F.3d 909, 915 (D.C. Cir. 2014). EPA is
using our broad discretion to reduce the volume of advanced biofuel to a reasonably attainable
level, and to provide an equal reduction of the total renewable fuel applicable volume. Further
reductions in total renewable fuel are obtained using the general waiver authority. . Regarding
carryover RIN credits, EPA has considered the possible role of carryover RINs in avoiding the
need to reduce the statutory applicable volumes. However, we have assessed the size of the
carryover RIN bank and have determined that the availability of the current REST bank does not
support setting the volume requirement at a level higher than the amount of renewable fuels and
associated RINs that can be produced and consumed. This issue is discussed further in Section II
of the final rule.
Several commenters recommended that EPA should set total RVOs at the statutory levels less the
full amount of the cellulosic waiver. Many of these commenters also suggested that EPA should
not use the general waiver authority to further reduce volumes. These commenters assert that the
statutory volumes reduced by the full extent of the cellulosic waiver authority would be
"reasonably achievable." However, their argument assumes a drawdown of the carryover RIN
bank. As noted in the preamble, we have determined that the current bank of carryover RINs
serves an important programmatic purpose, and that setting the volumes at a level that requires
drawdown or elimination of the RIN bank, rather than at the level of renewable fuel that can be
produced and consumed, would be inappropriate. Additionally, we do not find that a reduction
by the full amount of the waiver in cellulosic volumes is necessary or appropriate, since
advanced biofuels are able to partially backfill for the missing cellulosic volume, and additional
GHG reductions can be achieved in the program by specifying through the advanced biofuel
standard that reasonably available volumes of advanced biofuel be used. Finally, we believe that
the total renewable fuel standard cannot be met if it is set at the statutory volume less the
reduction in the cellulosic volume. Legal and practical limitations on supply prevent
achievement of even the volumes resulting from exercise of the cellulosic waiver authority, and
thus we are further reducing the total renewable fuel volume under our general waiver
authority.
Some commenters suggested that EPA should apply the full cellulosic waiver to the advanced
and total renewable fuel volumes to avoid "discretionary increases in food based fuels" or
"backfilling missing cellulosic gallons with food-based biofuels to meet the advanced quota."
They suggested that EPA should consider the factors in 21 l(o)(2)(B)(ii) in deciding whether or
not to exercise its discretion under the cellulosic waiver authority, especially on climate change,
land use change, wildlife habitats, infrastructure, and the price and supply of agricultural
commodities and food pricing. They suggested that our discretionary decision to reduce the
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volume of advanced biofuel by less than the full amount of the reduction in cellulosic volumes is
not warranted by the available feedstocks and, generally, that EPA should instead use its full
cellulosic waiver authority with respect to advanced biofuels to avoid food-related impacts.
Their arguments are based partially on the concept that requiring greater quantities of non-
cellulosic biofuels could result in greater production of food-based biofuels, with one commenter
specifically mentioning that the use of vegetable oil as a feedstock to provide biodiesel and
renewable diesel to the United States could lead to the increased global production and use of
palm oil. Their argument is also based partially on the concept that requiring greater quantities
of food-based biofuels in the United States could impact food markets, and effect people living
in extreme poverty for whom vegetable oil is an important part of their diet. We note that in
establishing the total renewable fuel volumes for 2014-2016 EPA is waiving statutory volume
targets to achieve volumes representing that maximum reasonably achievable through use of the
general waiver authority based on a finding of inadequate domestic supply of renewable fuel. In
this context we must consider all available sources of qualifying renewable fuel, and we cannot
consider the factors in 21 l(o)(2)(B)(ii) except as they relate to supply. As a result, whether or not
we consider factors such as those the commenters highlighted in setting the advanced biofuel
standard, or the initial increment of reduction in the total renewable fuel standard for which we
are using the cellulosic waiver authority we cannot do so in setting the total renewable fuel
volume requirement at a lower level that reflects maximum reasonably achievable volumes. To
the extent that renewable fuel volumes can be supplied, either advanced biofuels such as soy
based biodiesel or conventional biofuels such as corn ethanol or imported grandfathered
conventional biodiesel, they must be considered as part of available domestic supply in setting
the total renewable fuel volume requirement.
The constraints identified in determining maximum reasonably achievable volumes of biodiesel
in deriving the total renewable fuel standard are not specific to the feedstocks used to produce it.
Corn, sugar cane, soy oil and palm oil are currently the major feedstocks used to make renewable
fuels, and would be expected to continue to be so in the coming years. All of these feedstocks
are used for food purposes, thus whatever impact on food markets satisfying the total renewable
fuel standard that EPA is finalizing today will generally occur regardless of which feedstock is
used to produce the biodiesel. EPA can, however, influence the volumes of advanced versus
conventional biodiesel that is produced to satisfy the total renewable fuel standard by its action
in setting the advanced biofuel volume requirement. We believe that the greenhouse gas
reduction goal of the Act is best achieved by establishing a higher, rather than a lower, advanced
biofuel standard, and thus exercising our use of the cellulosic waiver authority to a lesser degree
than the maximum allowable reductions. This decision is not likely to impact food markets
since, as noted above, this decision only impacts which feedstock is likely to be used to make
renewable fuel used to satisfy RFS standards, rather than influencing how much food-grade oil is
used for this purpose.
With regard to food prices, we did look at the cost impacts of our standards on soy oil in the
context of the advanced biofuel volume requirement, and this information is presented in Section
III of the final rule and the "Illustrative Costs Impact of the Final Annual RFS2 Standards, 2014-
2016" memorandum found in the docket. While these analyses indicate that there could be an
increase in costs of vegetable oil, we do not find that it justifies further reductions under the
cellulosic waiver authority since, as noted above, such a decision would likely only influence
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which food grade vegetable oil is used to make biofuel, rather than the total volume of food-
grade vegetable oils devoted to such use. Although EPA has not done an analysis of the overall
impact on overall food prices of the total renewable fuel volume standard in this rulemaking, in
the March 2010 RFS rule EPA found that increased renewable fuel volumes would result in a
modest increase in overall U.S. food prices.
For the commenters' suggestion that we should consider wildlife habitats, we note that the
commenter did not explain how this consideration should influence our decision, and we are not
aware of a particular reason why these considerations should lead us to a different result than
requiring the use of reasonably attainable volumes.
Some commenters stated that EPA proposed the maximum reduction in advanced biofuels and
total renewable fuels possible under the cellulosic waiver provision, and that we had not assessed
whether advanced biofuel volumes were available to make up the shortfall. This is inaccurate.
We have used the cellulosic waiver authority as the basis for reducing the advanced biofuels and
total renewable fuels volumes, but the volume reductions are of a lesser amount than the
reduction in cellulosic biofuels. The volume reduction in advanced biofuels brings the required
levels to those we have determined are reasonably attainable. We specifically considered the
availability of sugarcane ethanol in assessing reasonably attainable volumes. We have provided
an equal reduction in total renewable fuel using this authority (and then a further reduction in
total renewable fuels using the general waiver authority).
Some commenters contended the EPA can only reduce advanced biofuel and total renewable fuel
volumes using the cellulosic authority to the extent that fuels are not available to replace a
shortfall in cellulosic biofuels. We disagree. The statute provides broad authority for EPA to
reduce volumes of advanced and total renewable fuel by the same or a lesser amount than a
reduction in cellulosic biofuels. However, we have exercised our discretion in this rulemaking to
lower volumes of advanced biofuels such that use of reasonably attainable volumes of advanced
biofuel will be required, and we have used this authority for an equal reduction in total
renewable fuel. (We used the general waiver authority to provide further reductions in total
renewable fuel.) Some commenters contended that the EPA's use of the cellulosic waiver
authority to reduce the volumes for advanced biofuels and total renewable fuels was
inappropriate and unsupported. The justification for our final use of this authority is fully
described in the final rule.
A commenter contended that EPA must use the criteria in Section 21 l(o)(7)(A) to determine
whether to reduce statutory volumes under Section 21 l(o)(7)(D). EPA disagrees with this
interpretation and has support from the D.C. Circuit indicating that "[i]n the absence of any
express or implied statutory directive to consider particular factors, EPA reasonably concluded
that it enjoys broad discretion regarding whether and in what circumstances to reduce the
advanced biofuel and total renewable fuel volumes under the cellulosic biofuel waiver
provision." Monroe v. EPA, 750 F.3d 909, 915 (D.C. Cir. 2014).
Some commenters noted that the EPA failed to consider the factors in 21 l(o)(2)(B)(ii) when
deciding whether to use the cellulosic waiver authority to reduce the volumes of advanced
biofuels and total renewable fuels. We note that the criteria in 21 l(o)(2)(B)(ii) apply to setting
standards for calendar years not provided in the statute, and EPA is not obligated under the
statute to consider them when using its waiver authority under 21 l(o)(7)(D). EPA may, in its
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discretion, consider the factors in 21 l(o)(2)(B)(ii) when exercising the cellulosic waiver
authority, but it is not required to do so.
One commenter suggested that the Act does not require equal reductions in advanced and total
renewable fuel when EPA uses the cellulosic waiver authority. This commenter suggested that
EPA use the full extent of the authority to reduce the total renewable fuel requirement. We have
accomplished the objective of the commenter through a different approach (use of both the
cellulosic and general waiver authorities to reduce the total renewable fuel requirement to the
fullest extent permissible under the cellulosic waiver authority.) Indeed we have provided an
additional reduction in total renewable fuel, bringing the final volume requirement to a level
below that which could be attained using the cellulosic waiver authority alone. Thus, it is
unnecessary for EPA to re-evaluate the matter raised by the commenter at this time.
For responses to comments on the role of carryover RINs in the RFS program, see Section 6.1.
For response to comments related to the impact of renewable fuel use on food see Section 7.2.
2.2.2 General Waiver Authority
Comment:
Advanced Biofuels Business Council (ABBC)
The ABBC agrees that EPA has the authority to waive volumetric targets under CAA section
21 l(o)(7), but strongly disagrees that the constraints on this authority set forth in CAA section
21 l(o)(7)(A)(ii) are ambiguous, and can be read to allow considerations related to the
distribution of adequate supply. [EPA-HQ-OAR-2015-0111-3528-A1 p.12]
As discussed, we believe that EPA's proposed use of "distribution waivers" pursuant to a
reinterpretation of its "general waiver authority" is in clear violation of the statute, as well as
the legislative history and intent of the Act. [EPA-HQ-OAR-2015-0111-3528-A1 p.19]
American Coalition for Ethanol (ACE)
The general waiver authority is clear. EPA may only waive or reduce RVOs if 1) implementation
of the RFS would severely harm the economy or environment of a State, a region, or the U.S., or,
2) if there is an inadequate domestic supply of renewable fuel. Neither of those two conditions
has been met. [EPA-HQ-OAR-2015-0111-2543-A2 p. 5]
American Farm Bureau Federation (Farm Bureau); Indiana Farm Bureau
Farm Bureau policy supports the RFS2 as passed in the Energy Independence and Security Act
of 2007. We do not believe that the criterion which would justify implementation of the two
waivers EPA is imposing has been met in either case. [EPA-HQ-OAR-2015-0111-2355-A1 p. 6]
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American Fuel & Petrochemical Manufacturers and American Petroleum Institute
EPA should exercise its general waiver authority on both grounds. [EPA-HQ-OAR-2015-0111-
1948-A1 p.3]
Biotechnology Industry Organization
The term "inadequate domestic supply" unambiguously refers only to the potential availability of
volumes of RFS qualified renewable fuels.4 It does not include "factors that constrain supplying
available volumes [of renewable fuels] to the vehicles that can consume them,"5 such as the so-
called "E10 blendwall" and fuel infrastructure. And the obligations of the Act do not extend to
the ultimate consumer or to biofuel producers, as EPA suggests they do.6 [EPA-HQ-OAR-2015-
0111-1958-A2p. 4]
EPA concluded in its final rule implementing the RFS2 program that "it is ultimately the
availability of qualifying renewable fuel, as determined in part by the number of [Renewable
Identification Numbers (RINs)] in the marketplace, that will determine the extent to which EPA
should issue a waiver of RFS requirements on the basis of inadequate domestic supply."59 [EPA-
HQ-OAR-2015-0111-1958-A2p. 15]
Both the structure and purpose of the statute show that Congress intended to drive the creation of
a new and robust market for renewable fuels, including by creating some burdens for obligated
parties. [EPA-HQ-OAR-2015-0111-1958-A2 p. 17]
6 See, e.g., Proposed Rule 33111,33114.
59 EPA, Regulation of Fuels and Fuel Additives: Changes to the Renewable Fuel Standard
Program, 75 Fed. Reg. 14670, 14698 (Mar. 26, 2010) (final rule) [Final RFS2 Rule] available at
http://www.gpo.gov/fdsys/pkg/FR-2010-03-26/pdf/2010-3851.pdf (emphasis added). The RFS2
program was mandated by Congress in the Energy Independence and Security Act of 2007
(EISA). "EISA made significant changes to both the structure and the magnitude of the
renewable fuel program created by the Energy Policy Act of 2005 (EPAct). The EISA fuel
program, hereafter referred to as RFS2, mandates the use of 36 billion gallons of renewable fuel
by 2022 - a nearly fivefold increase over the highest volume specified by EPAct." Id. at 14673.
Brazilian Sugarcane Industry Association (UNICA)
The underlying basis for EPA's concern with regard to distribution capacity, the alleged 'E10
blendwall,' does not justify derogating from Congressional intent and reducing statutory volumes
of advanced biofuels and total renewable fuels. [EPA-HQ-OAR-2015-0111-2495-A1 p.23]
Crimson Renewable Energy LP
For 2014, the EPA proposed to use its waiver authority to reduce the 3.75 billion statutory
mandate set by Congress for the advanced category, and rather, set the advanced and biomass-
based diesel based on "available RIN supply." Crimson disagrees with this approach for the
reasons spelled out in the comments submitted by the National Biodiesel Board (NBB) »
Inappropriate use of waiver authority, EPA's lack of consideration of the prior-year RINS,
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improper consideration of "RIN supply" as opposed to "actual production," etc. [EPA-HQ-OAR-
2015-0111-1823-Alp.l]
Enerkem
Enerkem does not support the EPA's unreasonably broad interpretation of the general waiver
authority to revise downwards the total renewable fuel mandate due to distribution issues. Failure
by obligated parties to put in place the infrastructure necessary to meet their obligations under
the RFS should not be grounds for revising downwards those RFS obligations, and does not
constitute "inadequate domestic supply', which is the only provision for the use of the general
waiver authority as specified in 42 U.S.C. § 7545(o)(7)(A). [EPA-HQ-OAR-2015-0111-1940-A1
p. 1-2]
ExxonMobil Refining & Supply Company
Lower the advanced biofuel and total renewable fuel volumes for 2016 to account for factors
including the blendwall which cannot be surmounted without putting fuel consumers, distributors
and many others at risk. [EPA-HQ-OAR-2015-0111-2270-A1 p.l]
Governor of Iowa, et al.,
The Clean Air Act does not give the EPA the authority to issue a general waiver of the
Renewable Fuel Standard in this situation. The law makes it clear that EPA may only issue a
general waiver based on a determination that there is "an inadequate domestic supply", not other
grounds such as distribution capacity. [EPA-HQ-OAR-2015-0111-1915-A2 p.l]
Growth Energy
During the comment period, Growth Energy submitted a comment on EPA's 2014 proposal.
Growth Energy identified numerous fundamental flaws in EPA's proposed exercise of its general
waiver authority and the proposed renewable fuel requirement, including:
• EPA's proposal would undermine Congress's goal of using RFS volume requirements to
spur rapid growth in the production and use of renewable fuels.33
• EPA could not exercise its general waiver authority because the supply of ethanol, as
measured by production capacity, was sufficient to meet the statutory renewable fuel
requirement.34
• EPA incorrectly interpreted the general waiver provision to mean that in determining
whether there is inadequate domestic supply, EPA could consider not just the capacity for
producing renewable fuels, but also the capacity for distributing and consuming them.35
• Even under EPA's erroneous interpretation of the general waiver provision, it could not
exercise that authority because supply was still adequate.36
• EPA substantially understated the volume of E85 that could be distributed and consumed
in2014.37
• EPA should not have disregarded the potential for distributing and consuming El5 in
2014.38
• EPA understated the amount of biodiesel that could be produced and consumed in 2014.39
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• EPA erred in failing to account for the sizeable RIN bank when determining whether
supply was adequate, instead setting the renewable fuel volume requirement low enough
to preserve a RIN "buffer."40
• Even if EPA could preserve a RIN buffer, EPA had failed to articulate any basis for
setting the buffer at the chosen level.41
• EPA's proposal would have numerous adverse consequences, including harming corn
farmers and the ethanol industry, setting back the development of second-generation
renewable fuels, increasing energy dependence, raising retail gasoline prices, and
harming the environment.42 [EPA-HQ-OAR-2015-Oil 1-2604-A2 p.7-8]
EPA also proposed to use its general waiver authority in two ways: "in a supplemental fashion
with respect to the volumes [it] propose[s] waiving using the cellulosic waiver authority, [and] as
the sole authority for [further] reductions [in] total renewable fuel" volumes.57 In EPA's view,
the general waiver provision is "ambiguous" and "is reasonably and best interpreted to
encompass the full range of constraints that could result in an inadequate supply of renewable
fuel to the ultimate consumers, including fuel infrastructure and other constraints. This would
include, for instance, factors affecting the ability to produce or import qualifying renewable fuels
as well as factors affecting the ability to distribute, blend, dispense, and consume those
renewable fuels in vehicles."58 [EPA-HQ-OAR-2015-0111-2604-A2 p. 10]
According to EPA, the principal limitations on supply so understood are the E10 blendwall and
the apparent barriers to surmounting it: "The decrease in total gasoline consumption in recent
years which resulted in a corresponding and proportional decrease in the maximum amount of
ethanol that can be consumed if all gasoline was E10, the limited number and geographic
distribution of retail stations that offer higher ethanol blends such as El 5 and E85, the number of
FFVs that have access to E85, as well as other market factors, combine to place significant
restrictions on the volume of ethanol that can be supplied to vehicles at the present time."59 EPA
therefore explained that it "believe[s] that limitations in production or importation of qualifying
renewable fuels, and factors that limit supplying those fuels to the vehicles that can consume
them, both constitute circumstances that warrant a waiver ...."60 [EPA-HQ-OAR-2015-0111-
2604-A2p.lO-ll]
33 Growth Energy, Comments on EPA's Proposed 2014 Standards for the Renewable Fuel
Standard Program, Dkt. # EPA-HQ-OAR-2013-0479 ("Growth Energy Prior Comments on 2014
RFS"), at 16-18 (Jan. 28, 2014).
34 Id. at 10-11.
35 Id. at 11-19.
36 Id. at 19-44.
37 Id. at 22-30.
38 Id. at 35-43.
39 Id. at 43-44.
40 Mat 3 0-3 5.
41 Mat 35.
42 Id. at 45-50.
59 Mat 33,109.
60 Id. at 33,109-33,110.
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Highwater Ethanol, LLC
It is appropriate to provide for the continued growth of conventional renewable fuels at this
time as well.' [EPA-HQ-OAR-2015-0111-2506-A2 p.3]
Hinman Trucking
The blendwall and its harmful impacts must be prevented from causing further damage to our
industry. EPA could use the waiver authority to waive the RFS completely or at the very least
decrease the blending volumes. I as a trucker and owner of a trucking company request that you
do so. [EPA-HQ-OAR-2015-0111-1659-A1 p. 1]
HollyFrontier Corporation
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, pp. 175-176.]
We appreciate EPA's use of the general waiver authority in the proposed RVOs. Given the
current state of consumer demand relative to volumes originally prescribed under the RFS, it is
appropriate to have called upon the general waiver to specifically prevent the blending of more
than 10 percent ethanol into the gasoline supply.
Independent Fuel Terminal Operators Association (IFTOA)
It was generally assumed in 2007 when the Energy Independence and Security Act was adopted,
that gasoline demand would continue to grow and that greater volumes of renewable fuels could
readily be incorporated into the transportation pool. As everyone is aware today, that was a false
assumption. Nevertheless, it is important to note that Congress recognized that circumstances
might change. Accordingly, Congress only established mandates to a sunset date. It established
initial volumetric mandates for total renewable fuels, advanced biofuels, and cellulosic biofuels
only through 2022 and for biomass-based diesel only through 2012. Recognizing future
uncertainty in the market, Congress provided (1) several waiver provisions to address
unanticipated circumstances; (2) a "reset" provision that could apply as early as 2016 if
conditions required it; and (3) delegation to EPA to set the volumetric mandates after 2022 -
again based on conditions that could exist at that time, taking into account several factors
enumerated in the statute. Simply stated, Congress created a statute with great flexibility and
provided various means by which EPA could adjust the mandates throughout the entire course of
the Program. [EPA-HQ-OAR-2015-0111-1947-A1 p. 2-3]
EPA may believe it should set future mandates at high levels so as to compel the market to make
dramatic changes, but such changes are also likely to cause great economic harm to consumers
and the economy. The potential for these adverse effects must be taken into consideration by the
Agency. While it may be appropriate for EPA to establish the mandates at levels that encourage
somewhat greater production and use of renewable fuels than the market would achieve in the
absence of such mandates, there is nothing that compels EPA — when exercising its waiver
authority — to establish aspirational or ambitious mandates. [EPA-HQ-OAR-2015-0111-1947-
Al p. 3]
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The U.S. energy picture has changed dramatically since the Program was initially established.
The Energy Information Administration now predicts declining gasoline demand for the
foreseeable future, and due to lower energy content and corresponding additional costs,
consumers resist using fuels with higher concentrations of ethanol (E85). The authorizing statute
gives EPA substantial authority to adjust the mandates in light of these changed circumstances.
[EPA-HQ-OAR-2015-0111-1947-A1 p. 3]
VII. "Reset" Provision
As stated above, EPA appears to have taken a new approach to the RFS mandates. It will fully
recognize market constraints for 2014 and part of 2015, waive a portion of the statutory volumes,
and set the mandates at levels that promote growth in renewable fuels — more than would be
achieved without the mandates — but still at achievable levels. However; for the future, it will
establish far more ambitious targets. In the Preamble to the proposed rule, EPA says: [EPA-HQ-
OAR-2015-0111-1947-A1 p. 6]
While we are proposing to use the tools Congress provided to make adjustments to the law's
volume targets in recognition of the constraints that exist today, we are proposing standards for
2015 and 2016 that will drive growth in renewable fuels, particularly those fuels that are required
to achieve the lowest lifecycle GHG emissions. We believe that over time, use of both higher
ethanol blends and non-ethanol biofuels can and will increase, consistent with Congress' intent
in enacting the Energy Policy Act and the Energy Independence and Security Act. In our view,
while Congress recognized that supply challenges may exist as evidenced by the various waiver
provisions, it did not intend growth in the renewable fuels market to be ultimately prevented by
those challenges, including such constraints as the 'E10 blendwall' or demand for gasoline or
diesel. The fact that Congress chose to mandate increasing and substantial amounts of renewable
fuel clearly signals that it intended the RFS program to create incentives to increase renewable
fuel supplies and overcome limitations in the market. The standards we are proposing are
forward-leaning and reflect those incentives. [EPA-HQ-OAR-2015-Oil 1-1947-Al p. 6]
We believe that this interpretation of the statute is incorrect. It is clear that Congress wanted to
increase the use of renewable fuels in the transportation pool, but when it enacted the mandates,
it was unaware of significant market constraints/limitations - e.g. the 'E10 blendwall,' and the
substantially reduced demand for gasoline. It did not intend for growth in renewable fuels to
"overcome those challenges." It did not know that such challenges existed. Congress and
everyone else, industry and consumers, assumed there would be continued, uninterrupted
economic growth and continued expansion in the demand for gasoline. Therefore, EPA should
adopt an approach for the future that promotes growth in the production and use of renewable
fuels, but does so in a more limited manner than seems to be its current plan. As the Agency
goes forward, the mandates should not be ambitious. They should promote some growth - more
than the market would do in the absence of a regulatory mandate - but still within ranges that
recognize market constraints/limitations and are achievable. [EPA-HQ-OAR-2015-0111-1947-
Al p. 6-7]
The "reset" provision of the RFS Program states that if the Administrator waives (i) at least 20
percent of the applicable volume requirement for two consecutive years; or (ii) at least 50
percent of such volume requirement for a single year, the Administrator shall promulgate a rule
that modifies the applicable volumes in the statute for all the years following the final year to
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which the waiver applies. In doing so, the Administrator must coordinate with the Secretaries of
Agriculture and Energy and analyze and consider - [EPA-HQ-OAR-2015-0111-1947-A1 p. 7]
a. The impact of the production and use of renewable fuels on the environment;
b. The impact on energy security;
c. The expected annual rate of future commercial production of renewable fuels;
d. The impact of renewable fuels on U.S. infrastructure, including deliverability of products
other than renewable fuels and sufficiency of infrastructure to deliver and use renewable
fuels;
e. The impact of use of renewable fuels on the cost to consumers of transportation fuel and on
the cost to transport goods; and
f. The impact of the use of renewable fuels on other factors, including job creation, the price
and supply of agricultural commodities, rural economic development, and food prices.
[EPA-HQ-OAR-2015-0111-1947-A1 p. 7]
Simply stated, while Congress was not aware of the E10 blendwall and did not anticipate a
dramatic decrease in the demand for gasoline when it set the mandates, it did recognize that
circumstances change. It provided ample authority for the Agency to analyze and consider
significant factors and to reset all of the mandatory volumes if certain conditions are
met. Indeed, in recent testimony before the Senate Committee on Homeland Security and
Government Affairs, EPA acknowledged that the circumstances supporting a "reset" are likely to
exist, and said "we actually think that it makes a lot of sense to focus a reset on all volumes at
one time and you just will provide a lot more certainty to everybody to do that." Therefore, the
Agency is not caught in a position where it must set the renewable fuel mandates at such levels
that it dramatically changes how transportation fuels are sold and substantially raises the prices
of these commodities at the pump. It has the authority to start anew with a more modest
approach, balance the enumerated factors set forth by Congress, and establish future mandates
that are (1) realistic, recognizing market constraints, and (2) promote moderate growth in the
production and use of renewable fuels. [EPA-HQ-OAR-2015-0111-1947-A1 p. 7-8]
Recommendation: For 2017 and beyond, the EPA should exercise its authority under the reset
provision of the RFS Program, 42 USC 7545(o)(7)(F), and establish more modest and achievable
RFS mandates. [EPA-HQ-OAR-2015-0111-1947-A1 p. 8]
VIII. Authority for Proposed Reduction in RFS Mandates
When Congress established the RFS Program, it fully recognized that circumstances could arise
over the years that would warrant complete or partial waiver of the RFS mandates. To address
these situations, Congress gave EPA broad authority to (1) adjust the standards, indicating its
confidence in the Agency to consider all of the competing interests and the consequences of
such action, and (2) reach a reasonable and balanced judgment on the appropriate volumetric
levels of the standards. Based on a careful review of the statute, the Association believes that
EPA has ample authority to grant the waivers set forth in this rulemaking. [EPA-HQ-OAR-2015-
0111-1947-A1 p. 8]
Specifically, the Association recommends the following: [EPA-HQ-OAR-2015-0111-1947-A1 p.
8]
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2. For the future — beyond 2016 — EPA should not establish ambitious mandates that are
designed to create dramatic changes in the market. Rather, the Agency should, using its "reset"
authority, take a more modest approach and continue to balance market conditions/limitations
and incentives for renewable fuel growth. [EPA-HQ-OAR-2015-0111-1947-A1 p. 8]
8. Congress gave EPA substantial authority to waive the statutory mandates, and EPA has
properly done so in this rulemaking. [EPA-HQ-OAR-2015-0111-1947-A1 p. 9]
Iowa Corn Growers Association (ICGA)
Section 21 l(o)(7)(A) of the Clean Air Act is the second waiver provision which allows the EPA
to waive the RFS in part or its entirety if at least one of two criteria is met: [EPA-HQ-OAR-
2015-0111-1820-A1 p. 2]
1) "severe harm" to the economy or environment; or
2) inadequate domestic supply of renewable fuels to meet the requirements. [EPA-HQ-OAR-
2015-0111-1820-A1 p. 2]
In 2013, the EPA was petitioned by several states who argued the drought conditions had created
"severe harm" to their states; however the EPA rejected these requests. And, even with drought
conditions in 2013, it was a record corn crop. Today, in 2015, neither of these waiver
qualifications exists, we do not have severe harm to the economy or environment, and we have a
very adequate supply of corn and the capacity to turn that corn into 15.0 billion gallons of
conventional ethanol. [EPA-HQ-OAR-2015-0111-1820-A1 p. 2]
Since neither of the statutory waiver authorities have been met, the EPA should not have the
authority to change the RVO for corn ethanol. Regardless of this fact, the EPA has invented a
new waiver to consider the availability of renewable fuel distribution infrastructure (limitations
on "consumption") as criteria for waiving the RFS. This new imaginary provision suddenly
includes the blend wall as a valid reason for waiving the statue. Nothing could be further from
the truth. Not only does EPA not have the authority to waive the RFS under this concept, the
blend wall is an idea invented by the oil monopoly to convince EPA to shift from their statutory
obligations. By using the "blend wall" concept, the EPA's proposal effectively eliminates the
incentive to expand biofuel production and distribution capacity, and allows oil companies to
blend only as much renewable fuel as they are comfortable using. [EPA-HQ-OAR-2015-0111-
1820-A1 p. 2]
Iowa Renewable Fuels Association
The Illegal Distribution Capacity Waiver [EPA-HQ-OAR-2015-0111-1957-A2 p. 7]
The preceding two sections provide arguments for why the EPA should increase the annual RFS
levels for "undifferentiated renewable fuel" from those in the proposed rule. However, we should
not be having this discussion at all, because under the current circumstances, no conditions exist
which allow the EPA to modify the statutory levels in this area. [EPA-HQ-OAR-2015-0111-
1957-A2p. 7]
There has been absolutely no scintilla of evidence brought forward to suggest that the
implementation of the statutory RFS levels for undifferentiated renewable fuel in 2014-2016
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would cause severe economic harm or that there is an inadequate domestic supply of renewable
fuel. Absent such evidence, the EPA is simply not authorized to modify the statutory levels.
[EPA-HQ-OAR-2015-0111-1957-A2 p. 7]
IRFA commends to the EPA, Iowa Attorney General Tom Miller's clear and concise review of
the legal aspects of this point provided to the Agency on January 28th of last year during the
public comment period for the previous proposed rule on 2014 RFS levels. For your
convenience, IRFA incorporates this document into our comments as an attachment (Attachment
C). [EPA-HQ-OAR-2015-0111-1957-A2p. 8]
[Attachment C can be found on p. 39-42 of docket number EPA-HQ-OAR-2015-0111-1957-A2]
In summary, AG Miller highlights that the structure of the statute is not ambiguous and only
refers to the supply (or lack thereof) of renewable fuel, not blended fuel. In addition to the actual
statute, Congressional legislative history makes clear that Congress' intent was not to include a
"distribution capacity" waiver. Previous court rulings also bolster this interpretation. If the EPA
insists on finalizing RFS levels based on the application of an illegal distribution capacity
waiver, it is not hard to imagine the issue ending up in court and the EPA on the losing side. But
the real losers will be the American consumers forced to decide between only EO and E10 for
additional years, instead of the RFS opening up the market for additional competition. [EPA-
HQ-OAR-2015-0111-1957-A2p. 8]
The members of IRFA recommend that the EPA discard its convoluted misinterpretation of the
"general" waiver authority and maintain the levels for undifferentiated renewable fuel at the
levels prescribed by Congress for 2014, 2015, and 2016 (14.4, 15.0, and 15.0 billion gallons
respectively). [EPA-HQ-OAR-2015-0111-1957-A2 p. 21]
Marquis Energy LLC
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1044, pp.319-320]
The purpose of the RFS2 was to give investors certainty that there would be a growing
renewable fuels business in the United States. The waiver authority granted to the EPA in the
RFS2 was only to be used in the event that there was an inadequate domestic supply of ethanol.
Last year, 800 million gallons of U.S. ethanol was exported. It's obvious that there was not a lack
of domestic supply of ethanol. Obligated parties, including oil companies, failed to comply with
the system that was set up and instead complain about high RIN cost. This does not give EPA the
basis needed to waive the statutory requirement. Obligated parties have had 7 years to take action
and put in place the necessary infrastructure to offer higher blends of ethanol. The fact that they
refused to make that investment and then claim that there is a blend wall is a self-imposed
problem. The term 'blend wall' was not included in the RFS and is consequently not listed as a
criteria for a waiver. Furthermore, a reduction in miles driven or an increase in average miles per
gallon was also not included or cited in the RFS2 as a criteria for waiver authority for the EPA.
We are being cheated by the improper application of a waiver, and the reason cited has nothing
to do with an inadequate supply of domestic ethanol. In addition, ethanol is currently trading at
50 cents per gallon below gasoline. EPA's improper actions are forcing hundreds of millions of
gallons of ethanol to be sold to foreign buyers at a price 50 cents a gallon cheaper than gasoline,
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a savings that could be provided to U.S. motorists if the obligated parties were incentivized by
threat of high-cost RINs to invest in appropriate infrastructure to market higher volumes of low-
cost, clean-burning renewable fuels.
Mascoma LLC, Lallemand Inc.
While appreciating the fact that the EPA is trying to be aggressive on the blending targets for
advanced biofuels, the conditions under which those targets are waived has emerged as a key
issue. Companies trying to limit advanced biofuels will be able to secure waiver credits rather
than work with the biofuels industry to increase the use of biofuels via higher biofuel blends.
Though the technical rationale is weak, and the work done to prove that higher blends of ethanol
in our gasoline provide an excellent and clean burning fuel, the blend wall has become the
stumbling block for slowing the growth of the biofuels industry. [EPA-HQ-OAR-2015-0111-A1
p. 1] [EPA-HQ-OAR-2015-1044p. 294]
Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
In sum, EPA must, when exercising its general waiver authority, leave sufficient breathing room
to ensure that the purpose of the waiver is achieved—that a situation of "inadequate domestic
supply" will not occur. By pushing the volume requirements right to the boundary of adequate
and inadequate supply, based on "forward-leaning" estimates of what EPA believes "might"
occur in response to the standards it promulgates, EPA has failed to leave a sufficient margin for
error. Congress did not intend to place obligated parties in "an impossible position, or at least a
highly punitive one."46 Yet that is exactly what will result if EPA's projections are unrealized in
practice.47
46 Am. Petroleum Inst, 706 F.3d at 479.
47 The Merchant Refiners Group also adopts the argument by the American Petroleum Institute
and the American Fuel and Petrochemical Manufacturers that a waiver is justified because
imposing the full statutory volume requirements would cause severe economic harm. See 42
U.S.C. § 7545(o)(7)(A)(i).
N. Bowdish Company
When RIN prices retreat back to 40 cents per gallon, we see our sales across all gallons retreat
back closer to an E10 blend rate. Retreat from the use of the General Waiver Authority and Stick
to the Statute! [EPA-HQ-OAR-2015-0111-1202-A1 p.2]
I disagree with your logic to implement the 'General Waiver Authority' in Section 11 A. 2 based
on your interpretation and subsequent defining of 'inadequate domestic supply' which you,
yourself, have written is 'ambiguous'. While your lawyers have certainly spent much time
contemplating the terms and other like uses within the Clean Air Act, the cognizant choice EPA
is making to include distribution capacity within this definition has the flat out result of
maintaining the status quo in the United States fuel market which means more GHG pollution
from gasoline as opposed to reductions from biofuels. Retreat from the use of the General
Waiver Authority and Stick to the Statute! The physical fuel exists and your manipulating of the
definition of inadequate domestic supply to provide a basis for your reductions in this category
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ultimately violates the law. [EPA-HQ-OAR-2015-0111-1202-A1 p.3] [EPA-HQ-OAR-2015-
0111-1044 pp.334-335]
The elephant in the room is that there is a cost to transform the United States fuel market
distribution from status quo today to a market that consumes fuels with lower GHG emissions.
The statute placed that cost on obligated parties in 2007. This proposal audaciously removes that
obligation and surrenders the entire statute to status quo. If you Retreat from the use of the
General Waiver Authority and Stick to the Statute, either obligated parties or small family owned
businesses like Al's Corner are going to transform that distribution infrastructure: they simply
need a clear signal of certainty from your Agency and will accomplish it with a RIN driven
marketplace. [EPA-HQ-OAR-2015-0111-1202-A1 p.3] [EPA-HQ-OAR-2015-0111-1044
pp.336-337]
National Association of Truck Stop Operators (NATSO)
III. NATSO Supports EPA's Exercise of its Waiver Authority
NATSO believes that EPA's Proposal wisely takes advantage of the Agency's statutory authority
to avoid the blend wall. The blend wall represents the point at which there is an insufficient
supply of renewable fuel that can be delivered to consumers. If the RFS's volume obligations
exceed the volume of renewable fuels that the market can absorb, the market will hit the blend
wall. This would lead to a significant increase in the price of fuel, caused by a shortage of
Renewable Identification Numbers ("RINs"), which are used to ensure compliance with the
RFS's volume obligations. If the market reaches the blend wall, there will not be enough RINs
to allow obligated parties to satisfy their volume obligations under the RFS. This will result in
significantly elevated prices for RINs that are available. Some obligated parties could fail to
acquire sufficient RINs and face fines from EPA. Others would take steps to reduce their
obligations under the Program (such as reducing or exporting production).
All of these situations will add costs to fuel production and, as happens in every industry, these
costs will be passed down to retailers and ultimately will be absorbed by consumers. [EPA-HQ-
OAR-2015-0111-2478-A1 p.4]
National Corn Growers Association (NCGA)
Reducing levels below the recommended reduction in the advanced category, as proposed by
EPA, is in direct violation of the law and puts the Agency in an actionable position. In order to
grant a waiver and reduce the RFS2 requirement, EPA must either determine that implementing
the requirements would "severely harm the economy or environment" or that there is "an
inadequate domestic supply." In the Proposed Rule, EPA justifies the proposed reduction in
conventional biofuel due to "inadequate domestic supply" based on a lack of retailer
infrastructure and a fabricated blendwall—a criterion that is not a statutory trigger. [EPA-HQ-
OAR-2015-0111-1939-A1 p.3]
National Farmers Union (NFU)
If EPA exercises general waiver authority in setting the total renewable fuel volume standard in
the final rule as it does in the proposed rule, the Agency will undermine the RFS' ability to
provide the biofuels industry with any reliable measure of certainty for the remainder of the
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program. If this occurs, biofuel developers will have an even more difficult time securing
investment that they are already experiencing due to the enormous delays in finalizing the 2014
volume standards. [EPA-HQ-OAR-2015-0111-1657-A1 p. 7]
EPA should not attempt to use waiver authority unless severe environmental or economic
consequences hang in the balance. EPA would then allow the biofuels industry to be confident in
the statutory volume standards for the remainder of the program, giving investors the stability
they need to grow the industry and achieve the economic and environmental goals the program
was designed to attain. [EPA-HQ-OAR-2015-0111-1657-A1 p. 8]
Nestle
We support EPA's use of its statutory waiver authority to reduce mandated volumes of ethanol
and other biofuels below the amounts otherwise mandated by Section 211 of the Clean Air
Act. We agree that what the agency calls the 'E10 blendwall' makes it practically impossible to
meet the original standard. [EPA-HQ-OAR-2015-0111-1918-A1 p.l]
POET-DSM Advanced Biofuels
Nevertheless, the NPRM published last month omits any consideration of the impacts of
conventional biofuel RVO reductions on the cellulosic ethanol industry from its discussion of the
constraints on EPA's exercise of general waiver authority in section 21 l(o)(7)(A). [EPA-HQ-
OAR-2015-0111-1943-A1 p.7]
It is also possible that some might not believe that EPA has a statutory duty to consider the
impact of the proposed reductions in the conventional biofuel RVOs on the cellulosic ethanol
industry. If so, we would ask how such a position can be reconciled with the Agency's position
that interpretation and application of the general waiver authority presents a Chevron Step Two
problem, and why the statutory goals set forth in section 21 l(o) for cellulosic ethanol (see pp. 7-
10 above) are not among the objectives that the Agency must consider in effecting a "reasonable
accommodation of conflicting policies." Chevron, 467 U.S. at 485. [EPA-HQ-OAR-2015-0111-
1943-Alp.ll]
Renew Kansas
The EPA does not indicate that its proposed partial waiver of the annual volume target is based
on any foreseen harm to the economy or environment of a state. The EPA's remaining authority
to waive annual volume targets for renewable fuel must be based on the theory of an inadequate
domestic supply of renewable fuel. [EPA-HQ-OAR-2015-0111-1309-A1 p.2]
For this reason, no legal authority or rational basis exists for the EPA's proposed reduction of the
annual volume targets. Simply stated, the EPA exceeds its legal authority by proposing to
partially waive the RFS and propose targets based on perceived distribution or capacity
constraints, when there is no basis in fact of an inadequate domestic supply of renewable fuel.
Because there is no shortage in domestic supplies of renewable fuels, we ask that the EPA seek
reinstatement of the statutory renewable fuel targets. [EPA-HQ-OAR-2015-0111-1309-A1 p.3]
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Additionally, the waiver authority relied on by the EPA to waive the statutory RFS is
problematic, and should be given careful review and consideration. [EPA-HQ-OAR-2015-0111-
1309-A1 p.4]
Union of Concerned Scientists
One of the biofuel market dynamics that has emerged clearly over the last few years is the
competition between BED and E85 to provide compliance for advanced and renewable mandates
that cannot be met within E10 blends. This competition has been illuminated by several studies
from Scott Irwin at the University of Illinois published on FarmDocDaily. In light of this
competition between E85 and BED, it seems likely that absent exercise of general waiver
authority, a 2016 renewable mandate of 18 Bgal (the statutory minimum) plus the cellulosic
volume, would result in a dramatic increase the use of biodiesel rather than steady progress on
availability and competitive pricing of higher ethanol blends. As discussed earlier, the supply of
BED is already straining to meet the non-cellulosic advanced mandate, and is clearly insufficient
to increase by a further 667 Mgal to make up for the missing 1 Bgal worth of D6 RINs that
would be required absent exercise of general waiver authority. Such a dramatic increase in the
use of biodiesel would be destabilizing and not supportive of steady growth of fuel production
and distribution capacity over time. In this sense, the availability of additional corn ethanol in the
US is irrelevant if the markets will not support its use as fuel. [EPA-HQ-OAR-2015-0111-2260-
Al p.6]
Thus EPA is justified in using the inadequate supply argument to reduce the 2016 mandate,
although it is the supply of BED rather than ethanol that is inadequate. EPA should determine
the extent of the general waiver to support the maximum realistic potential use of ethanol in
various blends while limiting spillover that increases demand for BED and other biofuels beyond
available supplies (taking feedstocks into consideration). This should provide fuel market
participants the assurance that as infrastructure to distribute ethanol at cost effective prices is
deployed, EPA will administer the RFS standards in a manner that supports the sale of these
higher blends. EPA's arguments and analysis are generally sound, and quantitatively the
proposal seems quite aggressive in its support for higher ethanol blends. [EPA-HQ-OAR-2015-
0111-2260-A1 p.6]
Urban Air Initiative
For the first time, EPA has proposed to exercise its general waiver authority under the law to
substantially reduce the RVOs in all of the RFS 'buckets.' EPA justified its decision as being
necessitated by the so-called E10 Blend Wall. In so doing, we believe EPA improperly conflated
the definition of 'inadequate domestic supply' with non-production factors such as the 'ability to
distribute, blend, dispense and consume those renewable fuels.' [EPA-HQ-OAR-2015-0111-
1821-A1 p.2]
UAI's comments make the following points:
EPA has all of the statutory authority it needs to surmount the Blend Wall. [EPA-HQ-OAR-
2015-0111-1821-Alp.3]
Western Plains Energy, LLC (WEP)
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EPA was granted waiver authority for the RFS for two scenarios, inadequate domestic supply
and severe economic harm. The ethanol industry today is currently producing at a rate equivalent
to roughly 15 billion gallons per year, with nearly 1 billion gallons per year being exported to
other countries. Clearly, there is not a domestic supply constraint. Further, ethanol is currently
trading for approximately $0.40 to $0.50 per gallon less than RBOB gasoline. Again, it is clear
that ethanol is not causing 'severe economic harm' to the American consumer. In fact, it is
reducing the retail price of fuel at the pump. [EPA-HQ-OAR-2015-0111-0283-A1 p.2]
I would also like to reiterate my belief that the EPA's waiver authority does not apply to a
perceived lack of infrastructure. Market access to higher blends of ethanol is for the free-market
and consumers to decide, not the EPA. [EPA-HQ-OAR-2015-0111-0283-A1 p.2] [EPA-HQ-
OAR-2015-0111-1044 p. 360]
Response:
Our interpretation of the general waiver authority as it relates to a determination of "inadequate
domestic supply" is explained in detail in the final rule establishing the renewable fuel standards
for 2014-2016. EPA is reducing the applicable volume of total renewable fuel using both the
cellulosic waiver authority and the general waiver authority, in the manner described in the final
rule. Use of the general waiver authority is appropriate due to constraints that could limit the
supply of qualifying renewable fuel to the ultimate consumers, including limitations on
production and import capacity, and legal and practical constraints on the ability to distribute,
blend, dispense and consume renewable fuels in vehicles.
Many commenters, especially the biofuels industry and agricultural associations, critiqued the
EPA's use of the general waiver authority. Some commenters suggested EPA need not use the
general waiver authority due to sufficient volumes of biofuels or renewable fuels, while others
commented that EPA's use of the general waiver authority was beyond our authority. Other
commenters, including many refiners and obligated parties, suggested EPA's use of the general
waiver authority was appropriate and necessary.
We disagree with commenters who commented that the meaning of "inadequate domestic
supply" is unambiguous. These commenters stated that the only appropriate consideration was
that of the production capacity of renewable fuel producers. They stated that "inadequate
domestic supply" should not be interpreted to allow consideration of infrastructure constraints or,
more generally, the ability to supply renewable fuel to vehicles. EPA rejects these suggestions.
"Supply" must be understood in relation to a party or entity being supplied. The process
includes supplying biofuels to obligated parties and terminal blenders, but also includes
supplying qualifying renewable fuel to the ultimate consumer as part of their transportation fuel.
Supply is not equivalent with production capacity because production capacity fails to capture
the entire chain of supply, and only looks to part of the process of supply. Our interpretation of
supply is consistent with 21 l(o) and the purpose of the Act, which is not simply to increase
production of biofuels, but also to ensure that biofuels replace fossil fuels used in transportation
fuel in the United States, as demonstrated by the definition of "renewable fuel" and "additional
renewable fuel," as well as other provisions of 21 l(o). Some commenters stated that we
understated the volumes of renewable fuel that could be produced and consumed. Please see
section HE and II.F of the final rule for an in depth discussion of the volumes that can be
produced and consumed.
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Additionally, in determining what qualifies as "supply," we believe we should consider only
those volumes of biofuel that are expected to satisfy all of the relevant statutory definitions and
requirements. There are two principal components to the definition of renewable fuel and
additional renewable fuel: that it be made from renewable biomass and that it be used in
transportation fuel. CAA 21 l(o)(l)(J); CAA 21 l(o)(l)(A). Ignoring the extent to which a fuel
can actually be used in transportation fuel (or in heating oil or jet fuel) in the inadequate
domestic supply inquiry would involve ignoring a critical element of the definition and begs the
question of whether in assessing "supply" EPA should also ignore the renewable biomass
component of the definition of renewable fuel or other requirements specified in the act such as
the requirement that transportation fuel containing renewable fuel be used in the United States
and that sub-categories of renewable fuel achieve specified levels of GHG reduction. . We
believe that ignoring any component of the definition of renewable fuel or the other provisions of
the Act that affect the types of renewable fuels that qualify under the Act would be inconsistent
with the objective of the waiver provision, which is to determine if sufficient qualifying fuels are
present. For example, if there was abundant production of biofuel that was not made from
renewable biomass (and therefore did not qualify as renewable fuel under the Act), but
insufficient volumes of fuel that was made from renewable biomass and met other requirements,
we believe that EPA would be authorized to grant a waiver on the basis of inadequate domestic
supply since compliance would not be possible notwithstanding the abundance of non-qualifying
biofuel. This situation is directly comparable to the one we are experiencing at present where an
abundance of biofuels are produced that cannot actually be used in transportation fuel, heating
oil or jet fuel in the United States. The biofuels that cannot actually be used for qualifying uses ,
due to constraints discussed in Sections II.E and II.F, are not "renewable fuels" and, we believe,
are appropriately excluded from our assessment of "supply."
Some commenters noted that Congress enacted a statute with the ability for EPA to adjust
volumes based on changing conditions. EPA agrees with these comments and is exercising the
discretion and flexibility Congress provided in 21 l(o) to implement the program.
Some commenters stated that EPA's use of the general waiver authority and interpretation of
"inadequate domestic supply" is at odds with the purpose of the Clean Air Act and the RFS
program. However, the purpose of the RFS program, discussed more fully in section II. A of the
final rule, includes promoting U.S. energy independence and reducing greenhouse gas emissions
from U.S. transportation fuel. In order for those goals to be realized, the renewable fuel must
actually reduce or replace fossil fuels in transportation fuel used in the United States. Therefore
EPA's evaluation of the entire supply chain, including when the renewable fuel reaches the
ultimate consumer, is appropriate and fulfills the purpose of the Clean Air Act and the RFS
program. We recognize that the program is also intended to grow use of renewable fuels in
transportation fuel over time. The volumes proposed today are set to levels that will encourage
use of renewable fuels in transportation fuel beyond what would occur in the absence of the
standards. However, the intended growth would not be achieved by imposing requirements that
cannot reasonably be attained. Considering the ready availability of ethanol, we have assessed
the possibility that higher standards would drive up RIN prices and that higher RIN prices would
lead to a reduction in E85 price that would stimulate greater sales. However, we determined that
at the present time this dynamic would have limited success, and that this consideration did not
justify setting renewable fuel requirements at a higher level than we have established today. For
biodiesel, our assessment of what is achievable in 2016 is based on what the market was able to
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achieve in 2013, when RIN prices were high and the total renewable fuel requirement
challenging. Substantial growth in biodiesel use was achieved, but not enough to completely
satisfy the total renewable fuel standard. This experience provides empirical evidence of the
extent to which high standards and high RIN prices can incentivize growth in biodiesel supply
over a short time period.
Some commenters questioned the existence of an ethanol blendwall and claim it is an idea
invented by obligated parties to convince EPA to lower their blending obligations. EPA
disagrees; the combination of legal and practical constraints described in the final rule, including
legal constraints on vehicles that can use higher level ethanol blends, together with the existing
limited number of fueling stations, along with the time and capital needed to expand such
infrastructure operate to limit the amount of ethanol that can be supplied. EPA does not intend,
in using this term, to suggest that there is a "wall" that is insurmountable. To the contrary, we
believe that ethanol use can continue to grow beyond the E10 blendwall through the use of high-
level ethanol blends, but that such growth will take time.
Some commenters suggested that the Clean Air Act and the RFS program are technology or
innovation forcing, and that the standards proposed today do not encourage those goals. Some
cited the D.C. Circuit Court's opinion in API v. EPA, 706 F.3d 474 (D.C. Cir. 2013) where the
court noted that the agency may base the standard on action by others when there "exists a
rational connection between the regulatory target and the presumed innovation." EPA disagrees
with commenters suggesting that the standards proposed today are not technology or innovation
forcing. The standards will require renewable fuel use at record levels, including total renewable
fuel use at levels we have determined are the maximum reasonably achievable in the time
period under consideration.
Some commenters suggested that EPA's waiver is rewarding obligated parties for their failure to
put in place the necessary infrastructure. We do not believe that our requiring use of renewable
fuels at record levels will operate as a reward to obligated parties. The RFS program is structured
to create a market for renewable fuels, and it is within that market system that many different
interested parties contribute to maintaining and expanding the supply chain from producer to
ultimate consumer. Obligated parties have a unique role in being required to acquire RINs that
demonstrate compliance with RFS standards, but the ultimate success of the program depends on
the actions of many.
Some commenters suggested we have not justified the need to use the general waiver authority
for reductions. They suggest that either the statutory volumes, or the statutory volumes less the
cellulosic waiver reduction are achievable. EPA disagrees with these comments and refers to
section HE of the final rule for the justification of our final total renewable fuel volume. As
noted in that section and elsewhere, neither the statutory volumes nor the statutory volumes less
the reduction under the cellulosic waiver authority can reasonably be achieved.
Some commenters stated that neither waiver condition in 21 l(o)(7)(A) has been met. We
disagree. As described in the final rule, there is an inadequate domestic supply of total renewable
fuel that justifies use of the waiver authority in 21 l(o)(7)(A).
Some commenters stated that EPA's interpretation of "supply" must include carryover RINs, and
any other interpretation was impermissible. EPA did consider carryover RINs in making our
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decision on the use of the general waiver authority, but EPA does not consider carryover RINs
as part of the "supply" that is referenced in the term "inadequate domestic supply" in CAA
21 l(o)(7)(A). Some commenters also stated that EPA has failed to articulate a basis for
preserving the RIN bank at current level. EPA discusses carryover RINs in Section II.H. of the
final rule. For additional discussion on carryover RINs in this document, see section 6.1.
Some commenters stated that the use of the general waiver authority will result in uncertainty for
the biofuels industry. We understand that there has been uncertainty related to the manner in
which EPA would interpret its waiver authorities, and expect that our final action will eliminate
uncertainty to a considerable degree. The volumes finalized in this rule are at historic levels
despite our use of the general waiver authority, and we believe that the total renewable fuel
volume requirement represents the maximum that is reasonably achievable.
A commenter stated that our proposal did not reflect that we considered the impact of the
reductions in conventional biofuel volumes on the cellulosic industry. They assert that the price
that can be obtained for cellulosic ethanol is tied to the value of conventional ethanol. They
argue that we should take this impact into account in deciding the extent to which we should use
our waiver authorities in the final rule. We acknowledge that use of either waiver authority is
discretionary, and therefore we are authorized to consider possible impacts of our action on the
cellulosic biofuel industry. We also acknowledge our decisions on final advanced biofuel and
total renewable fuel volume requirements could influence the price renewable fuels and their
associated RINs. However, the concern raised by the commenter appears to hinge on fears of
depressed conventional ethanol prices leading to depressed cellulosic biofuel prices. We do not
expect that our final action will depress conventional ethanol prices or D6 RIN prices, so even if
the commenters' assessment of cellulosic biofuel pricing were accurate we do not expect our
action would depress the values of cellulosic ethanol. Furthermore, while the information
presented by the commenter on how obligated parties can comply with the cellulosic component
of their RFS obligations is correct, we disagree with the equation presented to calculate the
expected gross cellulosic price. This equation fails to consider that the corn starch ethanol futures
price (which they use as part of the equation for calculating the expected price for cellulosic
ethanol) includes the value of the D6 RIN. This value must be subtracted from the corn starch
ethanol futures price before the advanced RIN price and CWC price are added. Further, we note
that the price of the CWC assumed in the equation presented by the commenter is significantly
lower than the CWC price for 2016 ($0.30 rather than $1.33). Because the value of the D6 RIN
must be subtracted from the ethanol price in this equation, driving corn ethanol prices higher by
increasing the value of the D6 RIN would not increase the value received for cellulosic ethanol.
We also note that even if the equation presented by the commenter is corrected as discussed
above it would only be a reasonable estimation of the value for cellulosic ethanol, not
representative of all cellulosic biofuel. The expected value of non-ethanol cellulosic biofuels are
not expected to be significantly impacted by the value of corn ethanol or D6 RINs, however the
advanced RIN prices and CWC price are expected to impact the expected value for non-ethanol
cellulosic biofuel.
As a final point, we do not believe it would be appropriate based on the information currently
before us to increase the total renewable fuel standard in an effort to provide increased support to
the cellulosic biofuel industry. Setting a higher total renewable fuel standard could lead to
increased corn ethanol and conventional RIN prices, but would also potentially lead to
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noncompliance by obligated parties, or a substantial carry-forward of RVO obligations into
future years. Furthermore, lowering the advanced biofuel standard to allow more use of
conventional fuel under the total renewable fuel standard could result in less use of advanced
biofuels, and therefore less GHG emissions reduction. We believe that our final action is
appropriate since it will avoid these types of adverse consequences, provides substantial support
to the cellulosic industry through a separate cellulosic biofuel standard, and is unlikely to lead to
the consequences feared by the commenter.
Other commenters indicated that our proposed action would result in a number of adverse
consequences, including harming corn farmers and the ethanol industry, setting back the
development of second-generation renewable fuels, increasing energy dependence, raising retail
gasoline prices, and harming the environment. We generally disagree. The RFS program is
beneficial to farmers and the ethanol industry, and we do not believe that either would benefit
further by EPA finalizing RFS mandates that are not reasonably achievable. We also do not
believe that our action today will suppress development of advanced and cellulosic biofuels.
We have established standards for each of those fuel types that will incentivize their continued
growth. We do not think that our action increases energy dependence, since it requires use of
renewable fuels at record levels, and we have set the total renewable fuel standard so as to
require use of the maximum volumes that are reasonably achievable. We do not believe that our
action will adversely impact retail gas prices as compared to a hypothetical situation where EPA
set unattainable RFS standards. See Section 7.5 of this document for discussion of impacts on
retail fuel prices. Finally, while we acknowledge that there are environmental impacts associated
with growing renewable fuel feedstocks and producing, transporting and using renewable fuels,
we also believe that there are negative environmental impacts associated with using the
petroleum-based fuels that renewable fuels displace. Our final action is designed to achieve
substantial lifecycle GHG emissions reductions, in part by requiring use of reasonably attainable
volumes of advanced biofuel.
One commenter stated that the NPRM failed to leave a sufficient margin for error, and that if
finalized the proposed requirements could place obligated parties in "an impossible position," or
at least a highly punitive one. We acknowledge that the final requirements will require
substantial growth in renewable fuel use; however we have determined that the total volumes
required are reasonably achievable. The compliance flexibilities associated with the program
(compliance through RIN acquisition rather than blending, carry-forward provision if RVOs
cannot be satisfied, and authorization to satisfy up to 20% of a party's RVO with carryover
RINs) are all designed to facilitate compliance notwithstanding the challenges posed. EPA has
not set the final volume requirements to intentionally draw-down the collective bank of carry-
over RINs, which will be available should our projections prove inaccurate. Furthermore, further
waivers could be provided during the compliance year if circumstances warrant.
Many comments address to the meaning of "inadequate domestic supply." Our interpretation of
this term is discussed in detail in the final rule, and in the following section, 2.2.2.1 and we
suggest that section be read in conjunction with this one.
Some commenters asserted that EPA had used the word "supply" as a verb rather than as a noun
in the NPRM, in an attempt to create ambiguity in the term. We do not discern a meaningful
difference between use of the word as a noun or a verb, and believe the ambiguities described in
the preamble exist regardless of that distinction. Asking what volume of renewable fuel can be
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supplied (a verb) to consumers is equivalent to asking what the supply (a noun) of renewable fuel
is to consumers.
In the remainder of this section of the response to comments document, we respond to comments
asserting that our proposed interpretation of the general waiver authority to allow consideration
of all constraints on the use of renewable fuel by the ultimate consumer, which we are
maintaining in the final rule, would amount to focusing on "demand" in addition to or instead of
"supply" and would, therefore, be impermissible under the Act. Most of these commenters
asserted that EPA's inquiry should end with an assessment of the production volume of biofuels.
As explained in the preamble, the term "supply" is ambiguous. Although we believe it could be
interpreted to focus on the production potential of biofuels, we do not believe that this would be
the interpretation that best comports with the structure and purposes of the Act. Such an
approach would ignore the components of the definitions of renewable fuel and additional
renewable fuel that specify that in order to qualify under the Act, biofuel must be used in
transportation fuel, jet fuel or heating oil. The commenters' preferred approach would also
ignore the fact that many aspects of the fuels marketplace other than biofuel production are
controlled by fuel producers, suppliers, distributors and retailers. Therefore EPA is interpreting
the term "inadequate domestic supply" consistent with the statutory definitions and the realities
of the transportation fuel marketplace to allow consideration of the full range of constraints that
can result in an inadequate supply of qualifying renewable fuel to consumers when EPA uses the
general waiver authority.
EPA's interpretation of the term "inadequate domestic supply" explains why EPA took into
account the total volume of transportation fuel expected to be used in 2015 and 2016 in its
assessment of the "supply" of renewable fuels. The amount of ethanol that can be sold as E10,
for example, is directly related to the total amount of blended gasoline that is expected to be
consumed in those years. To the extent larger volumes of gasoline are used, a proportionately
larger volume of ethanol could be blended with it as E10 to make renewable fuel. This is not an
improper consideration of "demand" but a realistic assessment of the volumes of biofuel that can
be blended into transportation fuel and therefore can qualify as renewable fuel.
To the extent that commenters raising the supply versus demand issue intended to criticize
EPA's particular approach to assessing volumes of biofuel that will be put to qualifying uses as
an improper assessment of "demand," EPA disagrees that its broad consideration of such factors
as physical limitations in infrastructure (e.g., availability of El 5 and E85 pumps), legal barriers
to use of renewable fuel, or ability of vehicles to use renewable fuel at varying concentrations,
are inappropriate to its assessment of "supply." These factors operate as practical and legal
limits to how much biofuel can be distributed to and used by consumers in the United States, and
therefore clearly relate to how much renewable fuel will be "supplied" to them as a replacement
to fossil-based transportation fuel. Although there may be some element of consumer
preference (i.e., demand) reflected in the historic growth patterns of renewable fuel production
and distribution infrastructure and the current status of that infrastructure, it is nevertheless the
case as of today that there are a limited number of fueling stations selling high-ethanol blends
(approximately 3,000 retail stations), and as a result, the number of stations operates as a
constraint on how much renewable fuel can be consumed in transportation fuel. Similarly, only
flex fuel vehicles (FFVs) can legally use fuel with ethanol concentrations greater than 15
percent. The population of FFVs is only a small fraction of the passenger vehicle fleet and there
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is an even smaller number of FFVs that have ready access to an E85 retail outlet. As a result, the
number of FFVs with access to E85 also operates as a constraint on how much ethanol can be
sold as transportation fuel. There is no question that a consumer who does not own a FFV will
not purchase E85, and a consumer with a FFV will not purchase E85 if it is not readily available.
Thus, it is clear that final consumer purchases of E85 depend on the number of FFVs and the
fueling infrastructure.
Another example of market control by suppliers involves E85 pricing. As discussed in "An
Assessment of the Impact of REST Prices on the Retail Price of E85," Dallas Burkholder, Office
of Transportation and Air Quality, US EPA. November 2015. EPA Air Docket EPA-HQ-OAR-
2015-0111, because there are a very limited number of E85 stations, there is currently little to no
competition between them. Retailers of E85 can choose to sell it at a high price (with high
profit) to a limited number of motivated consumers, or they can choose to lower the price to sell
greater volume at less profit per gallon sold to a larger number of customers. The rational retailer
will lower price only to the extent that doing so will increase profits. Our analysis indicates that
under current conditions and those expected in the 2014-2016 time period irrespective of the
renewable fuel volume requirement we establish, retailers will generally seek to maximize their
profits by selling E85 at prices that are higher than the energy-equivalent cost of a gallon of
E10. This means that most consumers with FFVs will not purchase it because it is effectively
more expensive for them to use than E10. Although in an efficient market individual suppliers
have little control over market price due to competition that is not the case at present. The
suppliers have sufficient market control that they can establish the price of E85 and by their
decisions effectively determine the volume of E85 that will be consumed. And, since E85 will
only be produced in volumes necessary to replenish retail station tanks, the end result is that a
limited volume of ethanol is likely to be blended with petroleum fuel to make E85 transportation
fuel. Therefore, there will be a limited volume of qualifying renewable fuel supplied to
consumers as E85, and it is this volume of qualifying renewable fuel that EPA counts, together
with supplies of other types of renewable fuel, in determining the maximum reasonably
achievable supply of qualifying renewable fuel for purposes of exercising the general waiver
authority.
To the extent that commenters suggest that use of the word "supply" in 21 l(o)(7)(A) must
necessarily preclude EPA consideration of all matters that could arguably be characterized as
related to "demand" when evaluating the need to exercise the waiver authority, we disagree.
Basic economic theory indicates that the two interact with each other, and it may be possible that
the effects of certain constraints arise from this interaction. For example, the statute precludes
the establishment of per-gallon requirements, and, in general, broadly defines the types of
renewable fuels that can participate in the program, thereby relying on the market to identify the
renewable fuels and renewable fuel blends that will satisfy the Act's volumetric requirements. In
assessing "supply" for future time periods, EPA must necessarily attempt to discern what the
market is capable of doing in the relevant time period by looking at both what the market has
done historically and how the market is likely to respond to the standards EPA sets, so as to
assess the fuel types and volumes of those fuel types that can reasonably be produced and
distributed for qualifying uses. This could be viewed in part as a "demand" oriented analysis,
because what the market has done and likely will do are influenced by what consumers will buy
and how much they will spend, but it is fundamental to assessing the volumes of qualifying
renewable fuel that can and will be supplied in response to the RFS standards.
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For a response to comments related to the reset provisions of the statute, see Section 10.1.
For further discussion of the statutory volume and volume requirements, see Section 2.2.4 and
2.3.
For further discussion of carryover RINs, see Section 6.1.
2.2.2.1 Inadequate Domestic Supply
Comment:
Environmental and Energy Study Institute (EESI)
This proposal is a complete departure from EPA's prior volume setting methodology - and more
importantly, runs contrary to Congressional intent. EPA asserts that language in the Clean Air
Act allows them to lower statutory fuel volumes across fuel categories. However, this is an
extremely narrow interpretation of Congressional intent contained in the statute's language
regarding the definition of "inadequate domestic supply". Senators expressed their displeasure at
EPA's interpretation of the statute in a recent hearing, with Ranking Member of the Senate
Homeland Security & Governmental Affairs, Subcommittee on Regulatory Affairs & Federal
Management Senator Heitkamp (D-ND), stating,
"The proposal continues to ignore Congressional intent, and reduces congressionally mandated
blended volumes, citing availability of distribution capacity ... When you say you can use that
language to basically justify a refueling infrastructure waiver. Did you look at the legislative
history? In 2005, when the House language pretty clearly addressed this... What does it tell you if
distribution capacity is amended out of that [language] and all you have is domestic supply?
What would that inform you, in terms of the legislative history? ... You can't bootstrap the
domestic supply issue to deal with infrastructure."
When the Renewable Fuel Standard was codified into law by the 2005 Energy Policy Act
(EPAct) and later expanded under the 2007 Energy Independence and Security Act (EISA), the
challenges presented by the E10 "blend wall," were already well known. And while the nation's
fuel supply reached 10 percent ethanol faster than predicted in both 2005 and 2007, EPA has
failed to hold obligated parties - namely petroleum refiners - accountable for their role in
ensuring adequate domestic supply of biofuels in the transportation fuel supply. [EPA-HQ-OAR-
2015-01 ll-1944-Alp.2-3]
Response:
The Supreme Court has noted that "[t]he views of a subsequent Congress form a hazardous basis
for inferring the intent of an earlier one." U.S. v. Philadelphia Nat'l Bank, 374 U.S. 321, 341
(1963), citing U.S. v. Price, 361 U.S. 304, 313 (1960). Therefore, while we consider the
statements from Senator Heitkamp on the intent of Congress, we believe our interpretation of the
act and its provisions is reasonable.
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Comment:
National Chicken Council (NCC)
The Clean Air Act provides EPA broad discretion in determining whether the "domestic supply"
is adequate. The statute provides no limitations on what should be considered part of the
"supply," indicating that Congress has delegated that determination to EPA's expertise. Any
consideration of the domestic supply of biofuel must take into account the entire production and
distribution chain, from crop planting all the way to use of the fuel by the engine. The domestic
supply could be disrupted in a wide number of ways, from drought or pestilence affecting corn to
an accident or breakdown at a refinery or blender to problems with the distribution system. A
failure at any of these points would decrease domestic supply. [EPA-HQ-OAR-2015-0111-1814-
Al p.6-7]
According to Oxford English Dictionary, "supply" means "a stock, amount, or flow of something
supplied or available for use."6 Ethanol that cannot be added to an engine for technical or
regulatory purposes is not ethanol that is "available for use" by that engine. The blendwall,
therefore, represents a very real constraint on the ability of the nation to supply its motor fleet
with ethanol-blended gasoline under the RFS. Reducing the blending targets in light of this
supply limitation is wholly within the broad waiver authority provided in the Clean Air Act.
[EPA-HQ-OAR-2015-0111-1814-A1 p.7]
6 Oxford English Dictionary (3d ed. 2012), "Supply," entry
Abengoa Bioenergy
The phrase 'inadequate domestic supply' clearly refers to the supply of renewable fuels: the
RVOs that the statute allows EPA to modify in some circumstances are expressed as volumes of
'renewable fuel,' 'advanced biofuel,' and'cellulosic biofuel,' see42U.S.C. § 7545(o)(2)(B)
(i)(l)-(l 11), not gasoline nor blends of gasoline with renewable fuels. See id. § 7545(o)(7)(A)
(permitting waiver of specified volumes 'of renewable fuel required under paragraph 2'). [EPA-
HQ-OAR-2015-0111-2474-A1 p.3]
Waiving the renewable fuel requirements because the Obligated Parties have failed to satisfy
their obligations would undermine the statutory purpose of increasing use of renewable fuels.
[EPA-HQ-OAR-2015-0111-2474-A1 p.4]
Advanced Biofuels Business Council (ABBC)
Very clearly, CAA section 21 l(o)(7)(A) subsection (ii) does not specify what "supply" refers to
because CAA section 21 l(o)(7)(A) itself clearly establishes the focus of subsection (ii) as being "the
national quantity of renewable fuel. [EPA-HQ-OAR-2015-0111-3528-A1 p. 12]
First, with regard to the reformulated gasoline program waiver authority specified - CAA section
21 l(k)(6)(B)(i) and (iii) - it is unclear how more explicit references to "insufficient capacity to supply"
found elsewhere in the CAA can be read to suggest that a "capacity to supply" should be read into a
provision containing only the word supply. We believe a more reasonable interpretation of these
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provisions is that when Congress means "capacity to supply" as opposed to just "supply," it will say so.
[EPA-HQ-OAR-2015-0111-3528-A1 p.13]
If Congress had intended EPA to have the discretion to waive the total renewable fuel
requirement based on market circumstances other than authority in CAA section 21 l(o)(7)(A) as
it did in CAA sections 21 l(o)(7)(E) and 21 l(o)(2)(B)(ii). [EPA-HQ-OAR-2015-0111-3528-A1
p.13-14]
In fact, the structure of the sentence in CAA section 21 l(c)(4)(C)(ii) - as related to "the
distribution of an adequate supply" - clearly suggests that the existence of adequate supply, and
the existence of distribution problems of adequate supply, are two different things. The practical
effect of the EPA proposed rule is to read the broader waiver authority to consider problems
related to "the distribution of an adequate supply" contained in CAA section 21 l(c)(4)(C)(ii) into
CAA section 21 l(o)(7)(A), even though there is no mention of "distribution" or any related term
in CAA section 211(o)(7)(A). [EPA-HQ-OAR-2015-0111-3528-A1 p.14]
Congress had before it language that would have provided EPA with the authority to waive the RFS in
situations where there was "inadequate domestic supply or distribution capacity to meet the
requirement. [EPA-HQ-OAR-2015-0111-3528-A1 p.14]
In the final regulation published in 2010, EPA stated that "it is ultimately the availability of
qualifying [renewable! fuel, as determined in part by the number of [Renewable Identification
Numbers, which are assigned per gallon of qualifying neat renewable fuel] in the marketplace,
that will determine the extent to which EPA should issue a waiver of the RFS requirements on
the basis of inadequate domestic supply."25 We believe EPA was right the first time, when it sent
a clear and critical signal to obligated parties that they are responsible for complying with the
law if there are sufficient quantities of qualifying renewable fuel. [EPA-HQ-OAR-2015-0111-
3528-Alp.l5]
The argument against a "capacity to produce" interpretation is not an argument for a "capacity to
distribute" interpretation because in actuality the motor fuel supply chain is more layered than that.
[EPA-HQ-OAR-2015-0111-3528-A1 p.15]
Advanced Ethanol Council
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 64.]
We knew that we could live with the second waiver provision, which is if there's inadequate
domestic supply, i.e., not enough of the renewable fuel, we could live with that. Because if we
didn't produce it, of course, you're going to waive it.
Algae Biomass Organization (ABO)
Finally, we urge EPA not to allow distribution limitations imposed by obligated parties to
constrain RVOs for any renewable fuel. To spur investment in commercialization of algae-based
fuels, developers must have confidence in their ability to access markets under the RFS. Limiting
fuel obligations based on distribution constraints within the control of obligated parties -
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including the so-called "blend wall" puts this market certainty at risk. EPA should set annual
RVOs, as required by statute, based on production. [EPA-HQ-OAR-2015-0111-1951-A1, p.2]
American Coalition for Ethanol (ACE)
The House legislation allowed EPA to issue a waiver based on "inadequate domestic supply or
distribution capacity" (emphasis added) [. . .] The Senate language prevailed in the final
legislation enacted by Congress and transmitted to the President for his signature.2 [EPA-HQ-
OAR-2015-0111-2543-A2p. 2]
The definition of "inadequate domestic supply" is not ambiguous [. . .] The definition of
"inadequate domestic supply" clearly refers to renewable fuel supply. [EPA-HQ-OAR-2015-
0111-2543-A2 p. 3] [EPA-HQ-OAR-2015-0111-1043, p. 20]
2. Testimony of Mr. Jonathon Lehman, former energy policy counsel to Senate Majority Leader
Tom Daschle (D-SD), at EPA Public Hearing for the 2014 Standards for the Renewable Fuel
Standard Program, December 5, 2013.
American Council on Renewable Energy (ACORE)
Section 21 l(o)(7)(a) is unambiguous when read as a whole within the context of Section 21 l(o)
on what is being supplied and to whom it is being supplied, for the purposes of examining
whether the waiver applies. Reading the phrase as part of the sentence in which it appears makes
it clear that inadequate domestic supply refers to "renewable fuel." It would have been redundant
for Congress to say that USEPA could waive "the quantity of renewable fuel" based on an
"inadequate supply of renewable fuel," so it did not. [EPA-HQ-OAR-2015-0111-1926-A1 p.5]
However, reading the statute as such is bizarre: it would allow a waiver in the "quantity of
renewable fuel" based on "inadequate supply of transportation fuel," the very product made with
renewable fuel. This illogical reading must be rejected absent explicit language directing USEPA
to implement the statute in such a manner. [EPA-HQ-OAR-2015-0111-1926-A1 p.5]
USEPA's broad interpretation of "supply" is not a permissible construction of the statute,
because the "interpretation goes beyond the limits of what is ambiguous and contradicts what
[...] is quite clear."10 [EPA-HQ-OAR-2015-0111-1926-A1 p.6]
As USEPA notes, draft versions of the Energy Independence and Security Act (EISA) included a
waiver in situations where there was "inadequate domestic supply or distribution capacity to
meet the requirement."11 The reference to "distribution capacity" was removed before EISA
passed Congress and was signed into law. [EPA-HQ-OAR-2015-0111-1926-A1 p.6]
10 Whitman v. American Trucking Ass'ns, 531 U.S. 457, 481 (2001).
11 H.R. 6 and S. 606 as reported by Senate Envt. & Public Works in Senate Report 109-74. See
also H.R.2950 - Renewable Fuels, Consumer Protection, and Energy Efficiency Act of 2007 (f)
WAIVERS.(l)(b) https://www.govtrack.us/congress/bills/110/hr2950/text
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Biotechnology Industry Organization
The proposed rule states: "As the volume requirements we are proposing for 2016 represent
significant increases from 2014, we believe it would be unreasonable to expect the market to
supply more than the proposed volumes."103 The proper standard is not whether EPA is
proposing "[significant increases" in a particular renewable fuel volume from a prior year, but
whether EPA has proposed the minimum reduction in a renewable fuel volume that is needed to
remedy inadequate domestic supply of renewable fuel. [EPA-HQ-OAR-2015-0111-1958-A2 p.
27]
EPA must return to the successful approach it employed in setting prior RVOs in order to ensure
the U.S. transportation system achieves maximum reductions in greenhouse gas emissions.
[EPA-HQ-OAR-2015-0111-1958-A2 p. 29]
EPA requests comment on "an alternative approach to characterizing expected growth in
renewable fuels" by projecting "the share of the fuel pool that can reasonably be expected to be
comprised of renewable fuel over time. In this way, increases or decreases in gasoline demand
would be reflected in corresponding increases or decreases in mandated renewable fuel
1 9S
volumes." This alternative approach is inconsistent not only with the text of the RFS statute,
but also with the fundamental goals of the statute and the program that the statute creates. The
alternative approach can easily be foreseen to generate the same outcome as EPA's failure to set
RVOs for 2014 - it would be a signal to biofuel producers and their investors that the market
share for advanced biofuels will perpetually remain limited by artificially constructed blendwall
constraints, and will remain to a significant degree under the control and influence of competing
fuel producers who are not obligated to make room for alternatives in the marketplace. [EPA-
HQ-OAR-2015-0111-1958-A2 p. 36-37]
103 Proposed Rule 33126 (emphasis added).
125 Proposed Rule 33109.
Brazilian Sugarcane Industry Association (UNICA)
"inadequate domestic supply" ...necessarily refers back to the term "renewable fuel," which is
used in the same sentence to refer to the type of fuel for which waivers may be granted if there is
"inadequate domestic supply." [EPA-HQ-OAR-2015-0111-2495-A1 p.20-21 and EPA-HQ-
OAR-2015-0111-2495-A2 p. 19]
EISA's legislative history further reinforces that conclusion. [EP A-HQ-OAR-2015-0111-2495-
Al p.22]
The most glaring problem with that argument is that it treats "supply" to mean "demand," even
though the two terms are inversely related. [EPA-HQ-OAR-2015-0111-2495-A2 p. 18]
A further problem with EPA's argument about the adequacy of domestic supply is that it is
entirely at odds with the technology-forcing purpose of Title II of the CAA, of which the RFS2 is
a part.74 The RFS2 was not intended simply to capture the demands or distribution capacities of
existing markets. Its overarching purpose was to force the market to incorporate new
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technologies and means of distribution to meet the volumetric requirements set out in the CAA.75
[EPA-HQ-OAR-2015-0111-2495-A2 p.20]
74 See, e.g., Bluewater Network v. EPA, 370 F.3d 1, 20 (D.C. Cir. 2004) (Title II of CAA is
"technology-forcing"); Sierra Club v. EPA, 325 F.3d 374, 378 (D.C Cir. 2003) (same).
75 See Am. Petroleum Ass'n Inst. v. EPA, 706 F.3d 474, 479 (D.C. Cir. 2013) (recognizing the
RFS program's "general mandate" favoring "a technology-forcing agenda," even while holding
that "a broad programmatic objective cannot trump specific instructions"); see also 153 Cong.
Rec. H16659, 16739 (2007) (statement of Rep.
Chevron
Chevron agrees with the Administrator's determination that the blendwall meets the finding of
"an inadequate domestic supply.' [EPA-HQ-OAR-2015-0111-1911-A1 p. 2]
Chevron agrees with EPA that "limitations in production or importation of qualifying renewable
fuels, and factors that limit supplying those fuels to the vehicles that can consume them, both
constitute circumstances that warrant a waiver under section 21 l(o)(7)" of the Act. [EPA-HQ-
OAR-2015-0111-1911-A1 p. 2]
Colorado Corn Growers Association
In addition to the RFS already proving itself successful and the biofuel industry's ability to
produce the statutory levels going forward, we also take issue with the recent proposal because
of the EPA's reasons for decreasing the renewable volume obligations (RVO). In order to grant a
waiver and reduce the requirements, the EPA must determine either that implementing the
requirements would severely harm the economy or environment, or that there is an inadequate
domestic supply. In its proposed rule, the EPA justifies the proposed reduction in conventional
biofuel due to inadequate domestic supply based on a lack of retailer infrastructure and a
fabricated blendwall a criteria that is not a statutory trigger. [EPA-HQ-OAR-2015-0111-2334-
Al p.2]
Commonwealth Agri-Energy, LLC
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 189.]
EPA may grant a waiver request based on inadequate domestic supply of renewable fuel only
when it finds that the renewable fuels industry lacks the capability to produce it. I think we've
proven we can produce it.
DuPont
The phrase "inadequate domestic supply" in Section 21 l(o)(7)(A)(ii) unambiguously refers back
to "renewable fuel required under paragraph (2)." And the phrase "renewable fuel required under
paragraph (2)," it is clear, describes pure (or "neat") renewable fuel, not blended fuel. [EPA-HQ-
OAR-2015-0111-1826-A1 p.5]
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The statute's drafting history confirms that EPA may not consider distribution capacity in
determining whether to grant a general waiver. [EPA-HQ-OAR-2015-0111-1826-A1 p.8]
The purposes of the Clean Air Act and the Renewable Fuel Standard program reinforce the
above interpretation of Section 21 l(o)(7)(A)(ii). [EPA-HQ-OAR-2015-0111-1826-A1 p.8]
Therefore, even if EPA's proposed interpretation could make it to Chevron step two, it would
fail there because the interpretation is "manifestly contrary to the statute." Chevron, 467 U.S. at
843.3 [EPA-HQ-OAR-2015-0111-1826-A1 p. 10]
DuPont disagrees with EPA's analysis and conclusion that these Clean Air Act sections
"highlight both the ambiguity of the RFS general waiver provision and the reasonableness of
applying it broadly to include adequacy of supply to the ultimate consumer of the transportation
fuel." 80 Fed. Reg. 33,111. [EPA-HQ-OAR-2015-0111-1826-A1 p.ll]
3 Granting a general waiver based on inadequate distribution capacity would not only negatively
impact first generation ethanol prices, but also would have a significant negative impact on the
price of advanced biofuels and hence would dampen investment in development of cellulosic
ethanol and other advanced biofuel production capacity. An interpretation of the statute that
would undermine investment in advanced biofuel production technologies would be
unreasonable and hence fail at Chevron Step 2.
Growth Energy
The fundamental problem with EPA's approach is that constraints on the distribution and use of
transportation fuel do not matter in determining whether EPA may exercise its general waiver
authority. The phrase "inadequate domestic supply" in the general waiver provision refers to the
amount of renewable fuel available for obligated parties to comply with their volume obligations,
which is properly measured by production capacity. By expanding "supply" of "renewable fuel"
to include downstream constraints on the supply and consumption of a different product that
contains renewable fuel (that is, blended transportation fuel), EPA in effect interprets "supply" of
"renewable fuel" to include "demand for renewable fuel." That stretches "supply" far beyond
what reasonable interpretation permits. [EPA-HQ-OAR-2015-0111-2604-A2 p.2]
In any event, there is adequate "supply" in 2014, 2015, and 2016, even under EPA's flawed
interpretation, to foreclose EPA's exercise of the general waiver authority. As this comment
explains in detail, there are various feasible, relatively inexpensive, and fast pathways to expand
distribution and consumption of ethanol-based renewable fuels and biomass-based diesel. Even
the most conservative of these pathways could boost distribution and consumption of renewable
fuel by hundreds of millions of gallons—more than needed to support compliance with the
statutory volume requirements for renewable fuel in 2014-2016, after the proposed cellulosic
waiver flow-through. [EPA-HQ-OAR-2015-Oil 1-2604-A2 p.2-3]
EPA's interpretation of the general waiver authority is impermissible. The statute's text,
structure, purpose, and legislative history all clearly show that Congress intended "supply" to
refer to the amount of renewable fuel for obligated parties to comply with the applicable
statutory volume requirements, not the amount that can ultimately make it into drivers' gas tanks
as an ingredient in blended transportation fuel. [EPA-HQ-OAR-2015-0111-2604-A2 p. 17]
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Besides this strong statutory evidence, discussed presently, the ordinary usage of the word
"supply" shows that it cannot be interpreted to include constraints on the ability to distribute
renewable fuel as an ingredient in another product (transportation fuel) that is delivered to the
ultimate consumer or on the ability to consume it. [EPA-HQ-OAR-2015-0111-2604-A2 p. 17]
In other words, EPA is trying to expand "supply" of "renewable fuel" to include "demand," all
the way down the value chain to the ultimate consumer. Those concepts are, of course,
antitheses. Words are not infinitely malleable, and EPA is not free to treat them interchangeably
or to give them their opposite meaning when interpreting a statute. Even if the term "supply" in
the general waiver provision were ambiguous in the abstract, EPA's proposed interpretation
would still be foreclosed because it "goes beyond the limits of what is ambiguous and contradicts
what... is quite clear"—that "supply" cannot mean "demand."100 It is particularly unreasonable
to consider constraints on demand for renewable fuel when, as described below, the very
mechanism Congress chose to spur growth in renewable fuels was to mandate demand for
renewable fuels through increasing volumetric requirements. [EPA-HQ-OAR-2015-0111-2604-
A2p.l8]
In providing for waiver authority, section 7545(oy)(7)(A) mentions one and only one product:
"renewable fuel." It is therefore plain that the product to which "supply" refers is renewable fuel.
[EPA-HQ-OAR-2015-0111-2604-A2p.l9]
Notably, it is solely in the context of the general waiver provision that EPA tries to stretch
"renewable fuel" to encompass the downstream products that might contain it. [EPA-HQ-OAR-
2015-01 ll-2604-A2p.21]
Congress did not design the RFS to wilt in the face of obligated parties' inadequate investment in
infrastructure to facilitate the distribution and consumption of more renewable fuel. [EPA-HQ-
OAR-2015-0111-2604-A2 p.25]
The RIN mechanism would work—if EPA would let it—because, as detailed below, the primary
barriers to consuming higher-blend transportation fuel are fundamentally economic. [EPA-HQ-
OAR-2015-0111-2604-A2 p.25]
The legislative history confirms that the general waiver authority may be invoked only when the
amount of renewable fuel is inadequate for obligated parties to meet their volume obligations.
Congress in fact specifically removed distribution capacity from the trigger for the general
waiver authority, foreclosing any interpretation that would restore it. [EPA-HQ-OAR-2015-
0111-2604-A2 p.27]
another category of apparent constraint on greater use of El 5 is the suggestion, which EPA
apparently credits, that consumer fear that use of E15 in MY2001+ vehicles, although approved
by EPA, will nonetheless void engine warranties that do not explicitly approve use of El 5. Even
if these concerns were legitimate, they would not be an appropriate basis for exercising EPA's
general waiver authority because they affect only consumer demand, not supply of transportation
fuel (or renewable fuel). As EPA itself puts it, these factors relate to whether "vehicle owners
may be reluctant to use E15,"288 which would be the case even if stations were overflowing with
E15. These concerns, therefore, are not relevant to ascertaining the amount of "supply" for
purposes of the general waiver provision, even under EPA's flawed interpretation. [EPA-HQ-
100
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OAR-2015-0111-2604-A2 p.49]
100 Whitman v. American Trucking Ass 'ns, 531 U.S. 457, 481 (2001); see also City of Arlington,
Texas v. FCC, 133 S. Ct. 1863, 1874 (2013) ("Where Congress has established a clear line, the
agency cannot go beyond it; and where Congress has established an ambiguous line, the agency
can go no further than the ambiguity will fairly allow.").
288 EPA 2015 El 5 Memorandum at 3.
Highwater Ethanol, LLC
We have identified a few items below which requires immediate attention on the proposed rule
from the U.S EPA in regards to the renewable fuels standards.
3. We believe that the EPA may reduce volumes of advanced biofuel and total renewable fuel
only to the extent necessary to remove the inadequacy and supply." EPA should focus on the
existing available supply of biofuels so as to use and comply with the RFS. Based on industry
data compiled by BBI International, the total amount of annual production capacity for biofuels
in United States, excluding advance biofuels, is currently at least 15.08 billion gallons. [EPA-
HQ-OAR-2015-0111-2506-A2 p.2]
Illinois Corn Growers Association (ICGA) and Illinois Renewable Fuels Association
(IRFA)
USEPA is confusing basic economics of supply and demand. The statute allows for waivers due
to inadequate supplies of designated biofuels not due to lack of demand because of artificial
barriers to the marketplace. Since more than 90% of the light duty spark ignited vehicles can use
E15 or E85 and with ethanol trading at 35 cents per gallon below gasoline, it is reasonable to
assume that the statutory gallons for conventional biofuels in the RFS II would be purchased if
the obligated parties were forced to obey the statute. Allowing them to accumulate RINS and not
purchase available gallons is not meeting either the intent or letter of the statute. [EPA-HQ-
OAR-2015-0111-1925-A1 p. 1-2]
Iowa Farm Bureau Federation (IFBF)
Most troubling is the flawed methodology that EPA is using to justify a reducing in the blending
requirements. The renewable fuels industry has more than enough capacity to produce in excess
of the 15 billion gallons of conventional biofuel prescribed for 2015 by the RFS2. There is
clearly not a supply limitation. Using the lack of infrastructure as an excuse for setting biofuels
levels lowers than originally mandated is not following the intent of the law that was passed by
Congress. The EPA should not call the difficulties associated with blending higher than 10% a
'blend wall' and then call this a supply issue. This proposed rule lays out a methodology that will
never allow biofuels to exceed approximately 10% of the market share. This is directly against
the intent of the RFS2 as passed by Congress — which is to push infrastructure investments to
increase market access for biofuels well beyond 10%. [EPA-HQ-OAR-2015-0111-1717-A1 p. 2]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, p. 109.]
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The renewable fuels industry has more than enough capacity to produce in excess of the volumes
that were specifically laid out in the law. EPA's rationale for this proposed rule is based on a
flawed methodology that will never allow biofuels to exceed approximately 10 percent of the
market share. This flies in the face of the law's intent to push infrastructure investments to
increase market access for biofuels.
John Deere
The biofuel industry requires an emphatic message that EPA will not allow actual or perceived
supply constraints to prevent continued growth in renewable fuels consumption. We believe EPA
incorrectly interprets Congress' intent when it proposes to apply the statutory 'inadequate
domestic supply' waiver-authority to distribution constraints. Even if EPA's interpretation of the
waiver authority is correct, its exercise is not required - especially when doing so jeopardizes the
fundamental signal that must be sent to the market. As such, we ask that EPA stand by the
statutory volume of 15 billion gallons of conventional biofuel in 2016. [EPA-HQ-OAR-2015-
0111-2042-A1 p.2]
Kansas Farm Bureau
Conventional ethanol - Clearly, EPA has specific authorization to partially waive a portion of
the renewable fuels mandate if sufficient volumes are not available, and that waiver authority has
been used repeatedly over the life of the RFS2 with cellulosic ethanol; however, we dispute the
need to also reduce the volumes of conventional ethanol. According to the US Energy
Information Administration, the US produced 14.34 billion gallons of ethanol in 2014 and the
renewable fuels industry has more than enough capacity to produce in excess of the 15 billion
gallons of conventional biofuel prescribed for 2015 and beyond by the RFS2. [EPA-HQ-OAR-
2015-0111-1195-Alp.l]
Mass Comment Campaign sponsored by anonymous 21 (web) - (13)
I take exception to your liberal use of your waiver authority. Clearly, EPA has taken the teeth out
of the RFS. By redefining 'inadequate supply' you have made up the rules as you've gone along
and in doing so thumbed your nose at Congressional intent and rendered the law meaningless.
[EPA-HQ-OAR-2015-0111-0279 p.l]
Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
Revise the NPRM's proposal that EPA set the volume requirements for 2016 at the very
"boundary between an adequate domestic supply and an inadequate domestic supply." The
Merchant Refiners Group strongly supports EPA's decision to use its cellulosic and general
waiver authority to reduce the statutory volume requirements. But its proposal to set volume
requirements at the boundary of adequate and inadequate domestic supply conflicts with
Congressional intent and ignores the reality that any determination of how much renewable fuel
can be supplied to consumers in 2016 is inherently uncertain and prone to error. The economic
and social costs of erroneous projections are not linear—whereas there is little downside risk in
under-projecting domestic supply, projections that prove too high will dramatically increase RIN
prices and price volatility, and will deplete carry-over RIN stocks, which EPA has recognized
should be maintained. [EPA-HQ-OAR-2015-0111-2603-A1, p.l]
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For 2016, EPA also correctly invoked its waiver authorities to reduce the statutory volume
requirements. However, EPA erred in proposing to set the volume requirements at the very
"boundary between an adequate domestic supply and an inadequate domestic supply." As EPA
elsewhere acknowledged in the NPRM, any determination of how much renewable fuel can be
supplied to consumers in 2016 is inherently uncertain and prone to error. The consequences of
aiming too high are severe: obligated parties could be left unable to comply. And Congress did
not intend to put obligated parties "in an impossible position, or at least a highly punitive one" in
which they face penalties due to structural conditions beyond their control.6 Moreover, the cost
of error is decidedly not linear—projections that prove too low will have only a small impact on
RIN prices, whereas projections that prove too high will dramatically increase RIN prices and
price volatility, and may make compliance impossible. Thus, in setting volume requirements
pursuant to the general waiver authority, it is critical that EPA leave a certain degree of breathing
room to account for the possibility of error. [EPA-HQ-OAR-2015-0111-2603-A2, pp.2-3]
Here, the Merchant Refiners Group focuses on the general waiver authority set forth in Section
21 l(o)(7)(A)(ii), which allows EPA to waive the volume requirements in the event of
"inadequate domestic supply." [EPA-HQ-OAR-2015-Oil 1-2603-A2, p.7]
Under that Section, EPA can and should waive the statutory volume requirement for total
renewable fuels. And in setting a new volume requirement, EPA should ensure that "domestic
supply" will be adequate by leaving sufficient breathing room to account for the significant
uncertainty surrounding projected volumes. [EPA-HQ-OAR-2015-0111-2603-A2, p.7]
A. There Is An "Inadequate Domestic Supply" of Renewable Fuel That Can Be Consumed as
Transportation Fuel.
The general waiver authority, Section 21 l(o)(7)(A), states in relevant part: The Administrator, in
consultation with the Secretary of Agriculture and the Secretary of Energy, may waive the
[statutory volume] requirements ... in whole or in part... by the Administrator on his own
motion by reducing the national quantity of renewable fuel ... — ... (ii) based on a
determination by the Administrator, after public notice and opportunity for comment, that there
is an inadequate domestic supply.10 [EPA-HQ-OAR-2015-Oil 1-2603-A2, p.7]
The key statutory phrase is "inadequate domestic supply." The statutory language does not
specify what supply must be inadequate nor the purpose against which adequacy is to be
assessed. This leaves EPA with considerable discretion to decide how to apply the waiver
authority in a manner consistent with the statutory purpose.11 [EPA-HQ-OAR-2015-0111-2603-
A2, pp.7-8]
EPA's interpretation of the phrase "inadequate domestic supply," as authorizing it "to consider
the full range of constraints, including legal, fuel infrastructure, and other constraints, that could
result in an inadequate supply of renewable fuels to consumers," is clearly permissible. Indeed,
that is the most logical interpretation of the statute. The benefits that Congress sought to bring
about through the statute—energy independence and a reduction in greenhouse gas emissions—
can only be achieved if renewable fuels are ultimately supplied to consumers in place of the
fossil fuels they would otherwise consume. [EPA-HQ-OAR-2015-0111-2603-A2, p.8]
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Congress understood this. The statute charges EPA with ensuring that "transportation fuel sold or
introduced into commerce in the United States" contains particular volumes of renewable fuel.14
And the term "renewable fuel" is defined to mean "fuel that is produced from renewable biomass
and that is used to replace or reduce the quantity of fossil fuel present in a transportation fuel." 15
For that reason, as EPA explained, the adequacy of supply must account for the various factors
that constrain the market's ability to supply renewable fuels to the vehicles that can consume
them as transportation fuel. After all, it would not advance statutory objectives to mandate the
production of renewable fuel that cannot feasibly be blended into the transportation fuel supplied
to consumers. [EPA-HQ-OAR-2015-Oil 1-2603-A2, p.8]
C. In Exercising Its General Waiver Authority, EPA Should Reduce the Statutory Volume
Requirement to a Level That Will Ensure an Adequate Domestic Supply.
1. Because EPA's projections are inherently uncertain, and the RIN market does not behave like
an ordinary competitive market, EPA must consider the consequences of setting a volume
requirement that is too high and must leave sufficient breathing room to account for the
likelihood of error. [EPA-HQ-OAR-2015-0111-2603-A2, p.12]
In exercising its general waiver authority to address "inadequate domestic supply," EPA
obviously must reduce volume requirements to the level where supply is "adequate." It has
interpreted that to mean it should set the volume requirements at the very "boundary between an
adequate domestic supply and an inadequate domestic supply." In other words, EPA is "seeking
to determine the maximum volumes of renewable fuel that can be expected to be achieved in
light of supply constraints." As EPA has put it, the proposed requirements are "forward-leaning."
[EPA-HQ-OAR-2015-0111-2603-A2, pp.12-13]
The difficulty is that the maximum volumes of renewable fuel that can be expected to be
introduced into transportation fuel cannot be determined with pinpoint accuracy. Instead, as
EPA's withdrawn 2014 Notice of Proposed Rulemaking openly acknowledged, there are a range
of potential scenarios that could occur with different probabilities.34 While that probabilistic
distribution may produce an expected value, the variation around that expected value could be
significant. And it is difficult even to identify the probabilistic distribution with any accuracy.
Thus, as EPA recognized in the NPRM, determining the amount of renewable fuel that can be
expected to be introduced into transportation fuel in the future is "a very challenging task not
only in light of the myriad complexities of the fuels market and how individual aspects of the
industry might change in the future, but also because we cannot precisely predict how the market
will respond to the volume-driving provisions of the RFS program." The most EPA can offer is
its guess as to "where the intersection between adequate domestic supply and inadequate
domestic supply might fall." [EPA-HQ-OAR-2015-Oil 1-2603-A2, p. 13]
Because EPA's projections are inherently uncertain, EPA must consider the adverse
consequences of setting a volume requirement that is too high, and it must leave sufficient
breathing room to account for the possibility (indeed, likelihood) of error in its projections. This
is critical given the dynamics of the RIN market, where the cost of EPA erring is decidedly not
linear—projections that prove too low will have only a small impact on RIN prices, whereas
projections that prove too high will dramatically increase RIN prices and price volatility. And a
waiver that is too small to remedy the problem of "inadequate domestic supply" would fall
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outside the waiver that Congress authorized. The NPRM nowhere considers this important aspect
of the problem. [EPA-HQ-OAR-2015 -Oil 1-2603 -A2, pp.13-14]
Accordingly, EPA should be conservative in setting volume requirements, to ensure domestic
supply is in fact adequate to meet those requirements—not just that it "might" be adequate. As
EPA stated in the NPRM, "[t]he RFS standards are a mandate with serious ramifications to
obligated parties that fail to comply." At minimum, a compliance requirement set too high would
result in "greater volatility in RIN prices and greater difficulty for obligated parties in obtaining
RINs and in planning and implementing an orderly compliance strategy."39 Setting requirements
at the very "boundary between an adequate domestic supply and an inadequate domestic supply"
also threatens to negate the wisdom of EPA's decision to maintain carry-over RIN stocks. Every
time EPA even slightly crosses the boundary into inadequate supply, obligated parties must chip
away at finite RIN stocks, leaving them dangerously exposed in the event of a not-uncommon
future drought or other occurrences that can sharply effect domestic supply. EPA has already
recognized the danger of such circumstances, remarking that it "would be disruptive to
businesses and therefore to the longterm objectives of the RFS program" to have to change its
mandates during the compliance year "to address unforeseen supply disruptions or for other
reasons...." (Conversely, if EPA sets the volume requirement somewhat lower than the economy
ends up using, parties could generate excess RINs, helping to rebuild RIN stocks closer to the 20
percent level that EPA has previously found to be prudent.) [EPA-HQ-OAR-2015-0111-2603-
A2, pp. 14-15]
1042U.S.C. § 7545(o)(7)(A).
11 See EPA v. EME Homer City Generation, L.P., 134 S. Ct. 1584, 1603 (2014) (citing Chevron
U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843, 866 (1984)).
14 42 U.S.C. § 7545(o)(2)(A)(i).
15 42 U.S.C. § 7545(o)(l)(J) (emphasis added).
34 2014 Standards for the Renewable Fuel Standard Program, 78 Fed. Reg. 71,732 (Nov. 29,
2013).
39 Interagency Comments Part 9a: Email from Jim Laity, OMB, to Karl Simon, EPA Office of
Transportation and Air Quality (Oct. 24, 2013 7:25 PM), EPA-HQ-OAR-2013-0479-0003.
N. Bowdish Company
You have stated in your proposal your objective is to set the volume requirements as precisely as
possible at the intersection between an 'inadequate supply' and a supply that is adequate and
further noted this is a very 'challenging task'. My feedback to you is, Get Out of the Way! Let
the REST driven marketplace sort out this challenging task. Retreat from the use of the General
Waiver Authority and Stick to the Statute! [EPA-HQ-OAR-2015-0111-1202-A1 p.2] [EPA-HQ-
OAR-2015-0111-1044 p.335]
National Biodiesel Board
It is also inappropriate to consider whether "legal and practical constraints on their supply to
vehicles and other qualifying uses" as part of considerations of "supply" of renewable fuels.
[EPA-HQ-OAR-2015-0111-1953-A2p.88]
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Because EPA only focuses on distribution concerns and "competition" among advanced biofuels,
it does not appear to fully assess the available supply of advanced biofuels. As NBB shows
below, the available supply is higher than EPA has proposed. [EPA-HQ-OAR-2015-0111-1953-
A2 p.90]
EPA's interpretation is contrary to the plain terms of the statute, the statutory structure and the
legislative history. Indeed, the only way for EPA to support its proposal is to manufacture an
ambiguity in the plain language of the statute to incorporate notions of demand. [EPA-HQ-OAR-
2015-01 ll-1953-A2p.92]
While the noun and the verb both refer to the same segment of the renewable fuels market, EPA
appears to use the verb form to manufacture ambiguity in order to broaden its waiver authority.
Instead of focusing on the available supply of renewable fuels, EPA focuses on the ability to
supply those fuels to consumers. EPA uses the verb form to blend supply-side considerations
(supply) with demand-side considerations (consumers), which EPA then claims makes the statute
ambiguous. This is counter to the plain terms of the statute. [EPA-HQ-OAR-2015-0111-1953-A2
p.93]
These provisions show, however, that Congress understood the distinctions between concepts
reflecting supply (e.g., production and importation) and demand (e.g., distribution). In other
words, understanding the purposes and structure of the provisions at issue, Congress chose its
words carefully. [EPA-HQ-OAR-2015-0111-1953-A2 p.95]
EPA's authority to extend the effective date of the prohibition on sales of conventional gasoline
to consumers in RFG opt-in areas does not evidence that Congress defined "supply" to include
"demand." [EPA-HQ-OAR-2015-0111-1953-A2 p.96]
When Congress wanted EPA to consider inadequate "distribution," it clearly said so. [EPA-HQ-
OAR-2015-0111-1953-A2 p.97]
The legislative history, and statutory structure, similarly make clear that Congress did not intend
to define inadequate domestic supply to include considerations of demand. [EPA-HQ-OAR-
2015-01 ll-1953-A2p.99]
Even if one could argue that "inadequate domestic supply" is ambiguous, EPA's interpretation to
allow EPA to consider "the full range of constraints, including legal, fuel infrastructure and other
constraints, that could result in an inadequate supply of renewable fuels to consumers" is plainly
not reasonable. [EPA-HQ-OAR-2015-0111-1953-A2 p.101]
National Corn Growers Association (NCGA)
The Clean Air Act authorizes EPA to grant a general waiver to "reduc[e] the national quantity of
renewable fuel required under [the RFS Program] . . . based on a determination . . . that there is
an inadequate domestic supply." Clean Air Act § 21 l(o)(7)(A)(ii) (codified at 42 U.S.C. §
7545(o)(7)(A)(ii)). There is no doubt that the phrase "inadequate domestic supply" refers to the
available quantity of renewable fuel based on production capacity and carryover RINs—and
nothing more. [EPA-HQ-OAR-2015-0111-1939-A1 p.5]
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Here, the text, purpose, and legislative history of the general waiver provisions, along with the
structure of the Clean Air Act more generally, all lead to the same conclusion: the term "supply"
refers to the available stock (or quantity) of renewable fuel based on production capacity and
carryover RINs, and does not include concepts traditionally associated with "consumption" or
the act of "supplying [a commodity] to" the end user. Here, EPA's interpretation of the general
waiver provision unquestionably fails Chevron'?, first step. [EPA-HQ-OAR-2015-0111-1939-A1
p.6]
If the ability to "consume" is a supply factor, it is incumbent on the Agency to clearly outline
what constitutes demand factors. [EPA-HQ-OAR-2015-0111-1939-A1 p.6]
National Farmers Union (NFU)
EPA's arguments that it is entitled to exercise general waiver authority due to 'inadequate
domestic supply' are not justified by the EISA. There is no language present in the statute to lead
EPA to the conclusion that the Agency may consider fuel infrastructure or other constraints that
may limit the ultimate consumers' access to renewable fuels. The RFS was designed to force
branded transportation fuel companies to make the infrastructure and other changes necessary to
accommodate the renewable fuel volume standards embodied in the EISA. Branded
transportation fuels as an industry has failed to fulfill these requirements levied by Congress and
must not be rewarded for their stubborn resistance. As EPA notes in the preamble to the
proposed rule, parties obligated under the RFS can work with distributors and marketers to make
higher biofuel blends available to the ultimate consumers; the current FFV fleet does not
currently have adequate access to utilize its maximum biofuel potential. The statute was designed
to force the obligated parties to do so to accommodate the statutory biofuel volume standards.
[EPA-HQ-OAR-2015-0111-1657-A1 p. 7]
National Taxpayers Union (NTU)
In the regulatory announcement, the EPA purports to be using its waiver authority in order to
address "[^imitations in the volume of ethanol that can be consumed given practical constraints
on the supply of higher ethanol blends to the vehicles that can use them." Given this
consideration, it is unclear why the EPA would propose a 2016 RVO that exceeds the E10 blend
wall. The EPA seems to be operating under the assumption that there will be a dramatic increase
in consumption of higher ethanol blends of gasoline such as El 5 or E85, despite no evidence
supporting an imminent, sudden surge. [EPA-HQ-OAR-2015-0111-3279-A1 p.l]
Novozymes Americas
Novozymes does not agree that EPA can use its general waiver authority under the RFS to make
reductions to the annual advanced or total renewable fuel RVOs based on the Agency's proposed
interpretation of "inadequate domestic supply" in the proposed rule. EPA's proffered
interpretation is not consistent with the text, structure, or purposes of the statute, and is
unreasonable. The term "inadequate domestic supply" unambiguously refers only to the potential
availability of volumes of RFS qualified renewable fuels. [EPA-HQ-OAR-2015-0111-3277-A1
p.2]
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Paul Bertels Farms
Although the 2014 NPRM contains slightly higher volumes, EPA relied upon the same faulty
economic reasoning. Specifically, including factors which drive demand into the calculation of
supply defies reason. EPA states ".. .ambiguous provision is reasonably and best interpreted to
encompass the full range of constraints.. .as well as factors affecting the ability to distribute,
blend, dispense, and consume those renewable fuels in vehicles." You continue to torture the
simplest economic principles with your definition of "Inadequate Domestic Supply." As a
trained economist, I challenge you to find an economic text that supports the inclusion of
consumption of a resource as a factor in determining the supply of that resource. [EPA-HQ-
OAR-2015-0111-2799-A1 p.l]
Poet, LLC
The general waiver authority in Clean Air Act Section 21 l(o)(7)(A) mentions one and only one
product: "renewable fuel." Regarding the "domestic supply prong of the general waiver
authority, the product to which "supply" refers is renewable fuel. Plainly and simply,
"inadequate domestic supply" means the ability of producers to supply renewable fuel. [EPA-
HQ-OAR-2015-0111-2481-A1 p.28]
Given that Congress has already provided EPA with appropriate means of being flexible with
obligated parties consistent with the overall purpose of RFS program, EPA is not free to override
the statutorily mandated volumes by inventing still more flexibility via its interpretation of the
"supply" prong of the general waiver authority.117 [EPA-HQ-OAR-2015-0111-2481-A1 p.30]
117 See Alexander v. Sandoval 532 U.S. 275, 290 (2001) ("The express provision of one method
of enforcing a substantive rule suggests that Congress intended to preclude others."). See Growth
Energy comments submitted to this docket for a full legal rebuttal of EPA's misguided attempt to
misconstrue "inadequate domestic supply" as meaning anything other than the supply of
renewable fuels (and banked RINs) available to obligated parties.
Quad County Corn Processors Cooperative (QCCP)
The Clean Air Act does not permit the Agency to take into account perceived 'constraints in
renewable fuel distribution infrastructure'1 or 'constraints on supply to [i.e., distribution to]
consumers resulting from the E10 blendwall'2 in determining whether to grant a general waiver
based on an "inadequate domestic supply' of renewable fuel. Instead, EPA may grant a waiver
based on 'inadequate domestic supply' of 'renewable fuel' only where it finds that the renewable
fuel industry lacks the capability to produce the required volumes of renewable fuel, and where
there are insufficient carryover RINs available for obligated parties to meet the statutory RVO.
[EPA-HQ-OAR-2015-0111-1817-Alp.2]
1 80 Fed. Reg. 33,100
2 80 Fed. Reg. 33,109
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Renewable Fuels Association (RFA)
The Clean Air Act does not permit the Agency to take into account perceived "constraints in
renewable fuel distribution infrastructure"61 or "constraints on supply to [i.e., distribution to]
consumers resulting from the E10 blendwall"62 in determining whether to grant a general waiver
based on an '"inadequate domestic supply'" of renewable fuel. Instead, EPA may grant a waiver
based on "inadequate domestic supply" of "renewable fuel" only where it finds that the
renewable fuel industry lacks the capability to produce the required volumes of renewable fuel,
and where there are insufficient carryover RINs available for obligated parties to meet the
statutory RVO. [EPA-HQ-OAR-2015-0111-1917-A1 p. 33]
Here, the text, purpose, and legislative history of the general waiver provisions, along with the
structure of the Clean Air Act more generally, all lead to the same conclusion: the term "supply"
refers to the available stock (or quantity) of renewable fuel based on production capacity and
carryover RINs, and does not include concepts traditionally associated with "consumption" or
the act of "supplying [a commodity] to" the end user. [EPA-HQ-OAR-2015-0111-1917-A1 p.
35]
The purpose behind the RFS program generally, and the waiver provision in particular, supports
a commodity-driven definition of supply—one that accounts for only a shortage of renewable
fuel, but does not take into account the infrastructure needed to distribute it to consumers. [EPA-
HQ-OAR-2015-0111-1917-A1 p. 37]
But Congress rejected these proposals. Instead, it limited EPA's waiver authority to situations
where external factors would make it difficult for the oil industry to meet its requirements under
the Act—such as "severe" economic harm or an inadequate physical "supply" of renewable fuel
necessary to meet the RFS program's requirements. [EPA-HQ-OAR-2015-0111-1917-A1 p. 40]
In contrast, when Congress has wished to provide EPA with the authority to take into account
"distribution capacity" or "capacity to supply," it has done so explicitly. [EPA-HQ-OAR-2015-
0111-1917-A1 p. 40]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, p. 34.]
In fact, Congress did consider measures that would have allowed waivers based on distribution
infrastructure, but they rightly rejected those concepts because they knew allowing that type of
off ramp would entice the oil companies to hold the RFS program hostage, as they are now
doing. Rather, Congress focused its waiver provisions narrowly on the question of supply, and
the law is clear. If the supply is adequate to meet the statutory volume requirements, then
obligated parties must find a way to distribute those volumes.
61 80 Fed. Reg. 33,100
62 80 Fed. Reg. 33,109
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Shell Oil Products US
It is entirely reasonable for Congress to provide EPA authority to adjust the standards to address
the problems that would arise due to an inability to consume the volumes of renewable fuels
specified in EISA. Absent an EPA adjustment of the standards using the general waiver
authority, the inability to consume sufficient renewable fuels will result in an inadequate
domestic supply of gasoline and diesel fuel. [EPA-HQ-OAR-2015 -Oil 1-2716- A2 p.4]
Sisk, Joseph
It is vital to production agriculture that the amount of corn used for ethanol rise, as technology
has provided the excess that the ethanol industry needs to thrive. Now that we, as producers,
have met that need, the industry has a chance for a great positive impact, both environmentally
and economically. The supply needed to make the initial dream of ethanol is a reality now. Why
now that the system is functioning to provide what was asked would we want a change that
would undo the feasibility of the initial goal? We are providing the increasing supply that the
market and mandates asked and required. As a system matures and becomes so productive, it
should be embraced and used for the environmental and economic good that it was developed
for. Our operation has invested heavily to be able to help meet the corn needed by the RVO. The
argument that the resources may not meet the original RVO are the same arguments from years
past that were disproven through our ability to evolve and produce corn and ethanol. It is
imperative to my operation that the supply and system that is in place be supported as it grows
into greater production. It would be devastating if we, as producers, ramped our abilities into the
new era only to have outside interests who oppose for their own designs influence new strategies
that would undo 10- plus years of advancements.
Society of Independent Gasoline Marketers of America (SIGMA) and the National
Association of Convenience Stores (NACS)
While a source can have a capacity to produce, regardless of whether it has a market for that
product, the concept of "supply" does not occur in isolation, but in reference to the person
intending to make use of that product. NACS and SIGMA share EPA's belief that the inadequate
supply waiver provision should be interpreted as authorizing EPA to consider the adequacy of
supply to all of the relevant parties, including the adequacy of supply to the ultimate consumer or
renewable fuel blended into transportation fuel.9 [EPA-HQ-OAR-2015-0111-1937-A1 p.8-9]
9 See generally 80 Fed. Reg. 33111-33112.
Western Plains Energy, LLC (WEP)
Further, EPA was granted waiver authority for the RFS for two scenarios, inadequate domestic
supply and severe economic harm. The ethanol industry today is currently producing at a rate
equivalent to roughly 15 billion gallons per year, with nearly 1 billion gallons per year being
exported to other countries. Clearly, there is not a domestic supply constraint. [EPA-HQ-OAR-
2015-0111-2471-A1 p.3] [EPA-HQ-OAR-2015-0111-2958-A1 p.3]
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Response:
Some commenters objected to EPA's interpretation of "inadequate domestic supply" as
presented in Section II.B. Many commented that the phrase "inadequate domestic supply" clearly
refers back to the supply of renewable fuels available to obligated parties, or to biofuel
producers' capacity to produce renewable fuel. They also argued that this term was
unambiguous. In contrast, several commenters supported our broad discretion to interpret
"inadequate domestic supply" as encompassing any constraints on production and
distribution. We believe that "inadequate domestic supply" is an ambiguous provision and that
our interpretation of "inadequate domestic supply" is both reasonable and supported by the
statutory language and purpose. "Inadequate domestic supply" is best interpreted to encompass
the full range of constraints that could result in an inadequate supply of renewable fuel as
transportation fuel, heating oil or jet fuel to the ultimate consumers in the United States,
including fuel infrastructure and other constraints. As mentioned in the final rule, this would
include, for instance, factors affecting the ability to produce or import biofuels as well as factors
affecting the ability to distribute, blend, dispense, and consume those renewable fuels in vehicles
or as heating oil and jet fuel.
"Inadequate domestic supply" is ambiguous because it does not specify what the general term
"supply" refers to. The common understanding of this term is an amount of a resource or product
that is available for use by the person or place at issue. Hence the evaluation of the supply of
renewable transportation fuel, a product, is best understood in terms of the person or place using
the product. In the RFS program, various parties interact across several industries to make
renewable fuel available for use by the ultimate consumers as transportation fuel, heating oil or
jet fuel. Supplying biofuel to obligated parties and terminal blenders is one part of this process,
while supplying renewable fuel to the ultimate consumer as part of their transportation fuel or in
other qualifying fuels is a different and later aspect of this process. For example, the biofuels
ethanol and biodiesel are typically supplied to obligated parties or blenders as a neat fuel, but in
almost all cases are supplied to the consumer in transportation fuel as a blend with conventional
fuel (ethanol blended in gasoline or biodiesel blended in diesel). The waiver provision does not
specify what product is at issue (for example, neat biofuel or renewable fuel in transportation
fuel) or the person or place at issue (for example, obligated party, blender or ultimate consumer),
in determining whether there is an "inadequate domestic supply."
Our interpretation is consistent with the language of 21 l(o), and Congressional intent in enacting
the program. The statutory framework indicates that Congress's intent was not simply to increase
production of biofuels, but instead to ensure that biofuels be used by the ultimate consumer as a
replacement for fossil-based transportation fuel (or heating oil or jet fuel) in the United States.
Section 21 l(o)(l)(J) defines "renewable fuel" as "fuel that is produced from renewable biomass
and that is used to replace or reduce the quantity of fossil fuel present in transportation fuel"
(emphasis added). The term "additional renewable fuel" is defined at fuel that is produced from
renewable biomass and that is used to replace or reduce the quantity of fossil fuel present in
home heating oil or jet fuel." Additionally, 21 l(o)(2)(A)(i) mandates that EPA "ensure that
gasoline sold or introduced into commerce in the United States . . . contains the applicable
volume of renewable fuel." The explicit reference to the use of biofuels in the definitions of
"renewable fuel" and "additional renewable fuel", and the reference to the United States in the
mandate, indicates Congress's intention to ensure that qualifying renewable fuels include only
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those that are actually present in transportation fuel, heating oil or jet fuel that is used in the
United States. While ethanol and biodiesel, the two predominant biofuels are used primarily for
qualifying purposes, the same cannot be said for other renewable fuels such as renewable
compressed natural gas and bioelectricity which predominantly have other uses. For this
reason, we have regulations explicitly requiring that their use for qualifying purposes be verified
prior to being qualified as a renewable fuel for the RFS program. Additionally, volumes of
biofuel produced for export overseas do not qualify as a renewable fuel under the statute. (For
practical purposes RINs may initially be generated for denatured ethanol and biodiesel that is
introduced into commerce in the United States, but a corresponding number of RINs must be
retired by any party exporting such fuels, thus effectively rendering the RINs corresponding to
exported biofuel unavailable to obligated parties to show compliance with their RFS
obligations.) The RFS program does not achieve the greenhouse gas reductions and energy
security benefits that Congress sought to promote unless consumers use renewable fuels that
reduce or replace fossil fuels present in transportation fuel, heating oil or jet fuel in the United
States.
Some commenters suggested that EPA interpret the statute as equating "supply" with
"production capacity." As explained in Section II.B of the final rule, we interpret the term
"supply" to refer to the volume of biofuels that can meet all of the qualifying provisions of the
Act, including ultimate use in transportation fuel, heating oil or jet fuel. This includes
consideration of the full range of constraints on such use, including the capacity to produce or
import biofuels and practical and legal constraints affecting the volume of qualifying renewable
transportation fuel, heating oil and jet fuel supplied to the ultimate consumer in the United
States. As discussed above, the definitions of the term "renewable fuel" and "additional
renewable fuel" include specifications regarding their use; a limited inquiry into the production
capacity of biofuels alone would not suffice to inform EPA whether a sufficient volume of such
biofuels can ultimately be included in transportation fuel, heating oil or jet fuel that is used in the
United States, consistent with the requirements of the Act. Thus, the many commenters who
insisted that EPA's interpretation was impermissible because "supply" must necessarily refer to
the volume of qualifying renewable fuel that is available, and who equated such availability with
biofuel production capacity, failed to take into consideration the use component of the definition
of renewable fuel.
The statute also does not indicate the relevant factors in determining the adequacy of supply. We
believe that it logically refers to the adequacy of the supply of qualifying renewable fuel that can
be used for compliance purposes. Since renewable fuel is limited to biofuel that is used to
replace fossil fuel present in transportation fuel, heating oil and jet fuel, and the Act provides that
such products are to be used in the United States, it is logical to assess the adequacy of supply by
reference to the ultimate consumer. .Some commenters asserted that EPA erred in proposing to
set the volumes requirement at the "boundary between an adequate domestic supply and an
inadequate domestic supply," and should instead leave "a certain degree of breathing room" to
account for errors. We have set the total renewable fuel standard to require use of the maximum
reasonably achievable volumes. To maximize GHG emissions reductions, we are setting the
advanced biofuel volume requirements to reflect reasonably attainable volumes of such fuels.
Thus, we have taken achievability and attainability into account. In addition, we note that
flexibilities built into the program provide "breathing room" as requested by commenters. These
flexibilities include the possibility for parties to carry a compliance deficit from one year into the
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next, and for the use of carryover RINs, rather than current-year RINs, to demonstrate
compliance. Many commenters stated that the legislative history of 21 l(o) indicates that
Congress did not intend for EPA to consider "distribution capacity" because prior to the final
adoption of the Energy Independence and Security Act of 2007, Congress had before it bills that
would have provided for a waiver in situations where there was "inadequate domestic supply or
distribution capacity to meet the requirement." EPA is not aware of any conference or committee
reports or other legislative history, explaining why Congress ultimately enacted the language in
EISA in lieu of this alternative formulation. There is no discussion about whether Congress did
or did not want EPA to consider distribution capacity, or whether Congress believed the term
"supply" was sufficiently broad and the definition of "renewable fuel" sufficiently clear that the
"distribution capacity to meet the requirement" language would be superfluous, or whether
Congress considered the alternative language too limiting. Given the lack of interpretive value
typically given to a failure to adopt a legislative provision, and the lack of explanation in this
case, we find the legislative history to be uninformative with regard to Congressional intent on
this issue. It does not change the fact that the text adopted by Congress, whether viewed by itself
or in the context of other fuel waiver provisions, is ambiguous.
Some commenters pointed to section 21 l(m)(3)(c) as evidence that Congress uses both terms
when Congress wants both factors to be considered.. The inclusion of "distribution capacity" in
21 l(m)(3)(C) likely exists to ensure that this factor is considered and to prevent ambiguity that
could lead to a narrower interpretation. In contrast, Congress, in section 21 l(o), did not feel the
need to mandate EPA's consideration of "distribution capacity" but through use of the broad
term "supply" also did not preclude it. Some commenters also stated that the reference to
"distribution" in 21 l(c)(4)(C)(ii)(l) also indicates that Congress would state distribution capacity
if it meant for EPA to consider it. However, again, this reference to "distribution" does not
prevent the consideration of it in 21 l(o)(7)(A), since the term "supply" is ambiguous and
distribution capacity is clearly a relevant consideration in assessing the extent to which biofuels
that may be available can actually be used in transportation fuel, heating oil or jet fuel. .
Some commenters also pointed to various other statutory references to argue that Congress did
not want EPA to consider distribution capacity in evaluating whether there is an "inadequate
domestic supply." These references include 21 l(o)(2)(B)(ii), which provides the factors EPA is
to consider when setting applicable volumes for years in which they are not specified in the
statute, including "the impact of renewable fuels on the infrastructure of the United States,
including ... the sufficiency of infrastructure to deliver and use renewable fuel," and "the
"expected rate of future commercial production of renewable fuels." We believe that the
structure of this provision supports our interpretation. In 21 l(o)(2)(B)(ii) Congress did not use
the general term "supply" but instead individually referenced projected rate of future production
of renewable fuels and distribution capacity for such fuels as relevant considerations in
establishing future volume requirements. Congress would not have done so if both
considerations were not relevant to the purposes of the Act. Furthermore, the use of these
specific terms in 21 l(o)(2)(B)(ii) highlights the ambiguity in the term "supply" as used in
21 l(o)(7)(A). Our interpretation of the term "supply" as including both consideration of
production and distribution capacity is thus entirely consistent with 21 l(o))(2)(B)(ii).
Commenters also referenced 21 l(o)(8)(B), which required the Department of Energy to conduct
a study regarding whether the program would cause significant adverse impacts on consumers in
2006, specifically requiring that the study include consideration of "renewable fuel (i) supplies
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and prices; (ii) blendstock supplies; and (iii) supply and distribution system capabilities." This
provision was operative during the initial year of the program, prior to EISA amendments, when
the term renewable fuel was defined, among other requirements, as one that "is used to replace or
reduce the quantity of fossil fuel present in a fuel mixture used to operate a motor vehicle." We
believe that the "supply" of such fuels would necessarily need to be judged in terms of the
volumes that could actually be used in motor vehicles, including consideration of all distribution
constraints. That Congress specifically listed distribution system capabilities as a required
consideration indicates that Congress wished to ensure that this consideration was taken into
account. However, we do not believe that it indicates that the term "supply" as used in
21 l(o)(7)(A) cannot include this consideration. Indeed, we believe the provision highlights the
importance of distribution considerations for purposes of assessing the extent to which
compliance with the program is possible. . Thus, we believe our interpretation of "inadequate
domestic supply" as including consideration of all of the possible constraints in the delivery of
qualifying renewable fuel to the ultimate consumers is fully consistent with other provisions of
the Act.
Many commenters stated that EPA's interpretation of "inadequate domestic supply" was
inappropriate because carryover RINs must be considered part of the domestic supply. As
discussed more fully in Section II.H of the final rule, and 6.1 of this document, EPA does not
consider carryover RINs to be part of the "supply" for purposes of the "inadequate domestic
supply" inquiry, but does consider them a relevant consideration in determining whether or not
to exercise our discretion to grant a waiver when inadequate domestic supply is found.. As
discussed in the final rule, this position is entirely consistent with the language we used in the
2010 RFS2 final rule stating that it would be the availability of fuel, as determined in part by the
number of RINs in the marketplace that would ultimately determine whether we issued a waiver
on the basis of inadequate domestic supply. Please see Section 6.1 of this document for further
discussion on this topic.
Some commenters stated that only obligated parties are required to act under the statute, and
therefore they must be the party regarding which "supply" should be assessed. We disagree with
this interpretation and again point to the definition of "renewable fuel" and the purpose of the
statute which seeks to ensure that renewable fuel is used in the United States to replace or reduce
fossil fuels in transportation fuel, heating oil or jet fuel. That aim cannot be accomplished by
looking only at supply of biofuels to obligated parties.
Several commenters supported our use of the general waiver authority due to "inadequate
domestic supply." Where some of these commenters made arguments for its use different from
those presented by EPA, we have taken these into account and have incorporated them where
appropriate into our support for our use of the general waiver authority.
For responses to comments on the role of carryover RINs in the RFS program, see Section 6.1.
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2.2.2.2 Severe Economic Harm
Comment:
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
The Proposed Rule fails to address whether a waiver is necessary because the statutory volume
requirements would severely harm the economy, even though EPA has substantial evidence that
a waiver is needed to avoid such harm. [EPA-HQ-OAR-2015-0111-1948-A1 p.3]
A Waiver Is Needed to Prevent Severe Harm to the Economy [EPA-HQ-OAR-2015-0111-1948-
Al p.6]
The original NERA study, re-submitted as Appendix D to these comments, demonstrates that
implementation of the statutory RFS standards after the blendwall is breached will cause severe
harm to the national economy.97 [EPA-HQ-OAR-2015-0111-1948-A1 p.49]
97 See NERA ECONOMIC CONSULTING, ECONOMIC IMPACTS RESULTING FROM
IMPLEMENTATION OF THE RFS2 PROGRAM 2 (2012) (hereinafter 2012 NERA STUDY)
(Appendix D).
DuPont
EPA should deny the joint AFPM/API petition for partial waiver of the 2014 RFS volumes.
[EPA-HQ-OAR-2015-0111-1826-A1 p.29]
ExxonMobil Refining & Supply Company
ExxonMobil believes that EPA must also consider economic harm in its analysis in the event that
such harm would actually lead the agency to grant a larger waiver. [EPA-HQ-OAR-2015-0111-
2270-A1 p.3]
Poet, LLC
It is undisputed that biofuels producers can produce an adequate domestic supply (15 billion
gallons) of Base Renewable fuel. This is the only legitimate consideration when EPA evaluates
domestic supply (as further discussed in the next section). Accordingly, the only statutory ground
for exercising EPA's general waiver authority to reduce the Base Renewable target is if program
implementation would cause "severe economic harm." The NOPR essentially concedes (by not
even raising this issue) that there are no grounds whatsoever for finding that implementing the
RFS would cause "severe economic harm." [EPA-HQ-OAR-2015-0111-2481-A1 p.27]
Brazilian Sugarcane Industry Association (UNICA)
Nothing in the NPRM, however, so much as suggests the possibility that complying with the
CAA's renewable energy requirements in 2014 would cause any economic or environmental
harm, let alone severe economic or environmental harm. [EPA-HQ-OAR-2015-0111-2495-A2
p.15]
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Society of Independent Gasoline Marketers of America (SIGMA) and the National
Association of Convenience Stores (NACS)
The economic harm that would result upon the fuels market reaching the blend wall would be
directly caused by the RFS. Unlike previous waiver requests that have been predicated upon
intervening economic factors (e.g., droughts), the blend wall is an artificial dilemma that
emanates solely from the RFS. [EPA-HQ-OAR-2015-0111-1937-A1 p.9]
Response:
We believe it is unnecessary to evaluate concerns that implementation of the statutory applicable
volumes would cause severe economic harm, since EPA is exercising its waiver authorities on
other grounds to substantially reduce the statutory volumes.
Some commenters suggested that we should evaluate the extent to which EPA should grant a
larger waiver under considerations of "severe economic harm" than would be justifiable based
on consideration of "inadequate domestic supply." In exercising the general waiver authority on
the basis of inadequate domestic supply, we have identified and are requiring a final total
renewable fuel volume requirement that represents the maximum that is reasonably achievable.
Similarly, we have determined that our final advanced biofuel volume requirements are
reasonably attainable. As such, we do not expect severe economic harm to result from
implementing the final requirements. Should EPA's assessment prove inaccurate during the
compliance year, we could issue further waivers on the basis of any of the grounds specified in
211(o)(7)(A), including severe economic harm.
As to concerns that any standards requiring use of ethanol beyond levels represented by the E10
blendwall would cause severe economic harm, we disagree. As noted in the final rule, we believe
that there are reasonable measures that are and can continue to be taken to expand use of ethanol
to levels beyond the level represented by the E10 blendwall and to expand the use of non-ethanol
renewable fuels as well. The final rule presents a table of scenarios indicating different ways
that the fuels market may respond to satisfy the requirements in the final rule. We expect that the
market will ultimately select the least cost alternative, which may or may not be represented in
the scenarios table.
We disagree that term "supply" in "inadequate domestic supply" is equivalent to production
capacity, as discussed in the final rule and in section 2.2.2.1.
EPA's response to petitions seeking a waiver of the 2014 RFS volume requirements is discussed
in Section IB.6 of the final rule.
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2.2.3 Combining Authorities for Reductions in Advanced Biofuel and Total
Renewable Fuel
Comment:
National Corn Growers Association (NCGA)
The statute does not allow EPA to reduce the overall advanced or total biofuel mandates by a
greater amount than the reduction in the advanced categories. [EPA-HQ-OAR-2015-0111-1939-
Al p.3]
Response:
EPA disagrees. In the final rule we are using the cellulosic waiver authority to provide equal
reductions in the applicable volumes of advanced biofuel and total renewable fuel, and then
using the general waiver authority to reduce the total renewable fuel applicable volume by an
additional amount to reflect the inadequacy of supply of such fuels. The statute does not
preclude EPA's use of both waiver authorities in one action, and EPA's approach is appropriate
to address the greater supply limitation with respect to total renewable fuels.
Comment:
Renewable Fuels Association (RFA)
applying nothing more and nothing less than the full amount of the cellulosic biofuel waiver to
both the advanced biofuel standard and the total renewable fuel standard would result in 2014-
2016 RVOs that are "reasonably achievable" and consistent with statutory waiver authorities.
Using only a cellulosic biofuel waiver—and fully carrying that waiver through both the
advanced biofuel standard and the total renewable fuel standard—would obviate any need for
invoking a general waiver and ensure EPA's implementation of the RFS remains faithful to the
statutory text and Congressional intent of the program. [EPA-HQ-OAR-2015-0111-1917-A1 p.
10]
Response:
EPA disagrees that a reduction of advanced and total volumes by the full amount of the
cellulosic biofuel waiver would result in "reasonably achievable" 2014-2016 RVOs. EPA finds
that such a reduction in the advanced volume would go further than would be necessary, as
additional volumes are reasonably attainable. EPA further finds that such a reduction is not
sufficient to address the constraints on total renewable fuel, and that the market could not meet a
standard based on such an approach without a substantial draw-down in the bank of carryover
RINs. As described in the final rule and in Section 6 of this document, EPA does not believe it
should set the volume requirements for the 2014-2016 compliance years at levels that would be
expected to require a draw-down in the current bank of carryover RINs. EPA also finds that our
use of the general waiver authority is appropriate to address inadequate domestic supply of total
renewable fuel. We believe that our approach appropriately reflects Congressional intent. For
further discussion of this issue, see section II of the final rule.
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Comment:
Brazilian Sugarcane Industry Association (UNICA)
EPA has not adequately shown it can augment its authority under section 21 l(o)(7)(D)(i) simply
by 'supplementing' its proposed reductions through the general waiver provision of section
21 l(o)(7)(A). The two provisions make no reference to each other and are located in different
sections of the RFS2 statutory provisions. EPA's interpretation would give it authority to
override the express limitations in section 21 l(o)(7)(D)(i) simply by asserting, as it does now,
that more decreases in volume are needed than allowed in the cellulosic waiver provision. [EPA-
HQ-OAR-2015-0111-2495-A1 p. 18]
Response:
Despite the fact that the waivers under 21 l(o)(7)(D)(i) and 21 l(o)(7)(A) make no reference to
each other, they are both waivers available to EPA to adjust statutory targets. Although EPA is
using the cellulosic waiver authority for an initial increment of reduction of the total renewable
volume target, that reduction is insufficient to address the inadequacy of supply. Therefore EPA
is using the general waiver authority to provide an additional increment of volume reduction for
total renewable fuels. The Act clearly provides EPA with authority to issue waivers under
21 l(o)(7)(A) whenever the criteria specified in that section exist, and EPA is doing so today
based on a finding of inadequate domestic supply.
Comment:
Chevron
Without the available volumes of these advanced cellulosic fuels, it is not appropriate to replace
these volumes of conventional biofuels beyond the point of the blendwall. Therefore, EPA's
proposed use of both the cellulosic and general waiver authorities is appropriate and necessary to
reduce the volumes of total renewable fuels and advanced biofuels in each year. [EPA-HQ-OAR-
2015-0111-1911-Alp. 2]
The George Washington University
However, EPA does have some discretion to set applicable volume requirements below those
specified in the statute, in certain conditions. In this proposal, EPA exercises its cellulosic waiver
authority under CAA section 21 l(o)(7)(D)(i) and the general waiver authority under CAA
section 21 l(o)(7)(A) to mandate less cellulosic biofuel and total renewable fuel than Congress
specified in the EISA. [EPA-HQ-OAR-2015-0111-1815-A1 p.4]
EPA is opting to exercise its waiver authority because there was in 2014 (and will continue to be
in 2015 and 2016) an insufficient supply of total renewable fuels and advanced biofuels to meet
the statutory mandate. There are a few reasons for this supply shortage. As EPA explains in its
proposal:[EPA-HQ-OAR-2015-0111-1815-Alp.4]
[Indented quote] For non-ethanol renewable fuels, the primary supply constraint at present is the
projected shortfall in domestic production or importation of qualifying volumes. For ethanol
blends, there are both legal and practical constraints on the amount of ethanol that can be
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supplied to the vehicles that can use it, notwithstanding the considerable volumes that can be
produced and/or imported.[EPA-HQ-OAR-2015-0111-1815-Al p.4]
For the advanced biofuels, the primary constraint is growth in the cellulosic biofuel market.
While Congress set ambitious targets for cellulosic production in 2014, actual production was 33
million gallons, less than 2% of the statutory volume requirements for 2014. Due to the high
costs of producing cellulosic and the technological barriers facing the industry, it is likely that
cellulosic production will continue to fall short of statutory levels. Increased production of
biodiesel, although it currently surpasses the minimum volumes prescribed in the statute, is not
sufficient to make up for the shortfall of cellulosic ethanol. Because both of these fuels are
nested within the 'advanced biofuels' category, EPA must reduce both the cellulosic volume
requirements and the advanced biofuel volume requirements as a result of these supply
shortages. [EPA-HQ-OAR-2015-0111-1815-A1 p.4-5]
Ethanol faces a different set of obstacles. While the US has the capacity and ability to either
import or produce more ethanol, more ethanol cannot feasibly be blended into gasoline. Legally,
only flex fuel vehicles (FFVs) can use fuel with ethanol concentrations greater than 15%, and
these vehicles only constitute about 6% of all light-duty cars and trucks.5 Practically, non-flex-
fuel vehicles cannot use fuel with ethanol concentrations greater than 10%, which is termed the
"blendwall." While the authorizing statute requires more ethanol to be blended into
transportation fuel each year until 2022, the only way this is possible is if demand for gasoline
increases significantly in the near term. As explained in a later section of this comment, this
creates a ceiling on the practical growth of ethanol as a transportation fuel. In its proposal, EPA
is very cognizant of the fact the blendwall makes it infeasible to significantly increase the
volume requirements for ethanol. [EPA-HQ-OAR-2015-0111-1815-A1 p.5]
These constraints certainly justify EPA's use of its waiver authorities to prescribe lower volume
requirements than those listed in the statute. [EPA-HQ-OAR-2015-0111-1815-A1 p.5]
International Council on Clean Transportation (ICCT)
We believe that the proposal to apply both the cellulosic waiver and the general waiver to the
renewable fuel volumes for 2014-2016 is appropriate. [EPA-HQ-OAR-2015-0111-1923-A 1 p.9]
Response:
Several commenters noted that they approved of our approach to using both the cellulosic and
general waiver authorities, and we have retained the use of both authorities to reduce volumes in
the final rule.
Comment:
Novozymes Americas
EPA should carry through the full amount of the cellulosic biofuel waiver to the advanced and
total renewable fuel categories, keeping the 2014, 2015 and 2016 requirements for
undifferentiated renewable fuel at the levels intended by Congress [EPA-HQ-OAR-2015-0111-
3277-A1 p.2]
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Union of Concerned Scientists
In the present circumstance we believe that the mandates for advanced and renewable fuels
should be adjusted by the full amount of cellulosic waiver. However, there are circumstance in
which it might be preferable to make a larger adjustment in the renewable mandate and only
apply part of the cellulosic adjustment to the advanced mandate as was described in a paper by
James Stock (Stock 2015A).1 The motivation for such an approach would be to administer the
overall program in a manner that provides greater incentives for cleaner fuels and to avoid
counterproductive outcomes such as the extensive use of palm oil biodiesel from grandfathered
facilities to comply with D6 obligations as occurred in 2013. In light of the exercise of general
waiver authority in this proposal, it does not seem as if such a differentiated application of the
cellulosic waiver authority is required. However, in the event that making a variable adjustment
to the renewable and advanced pool EPA can ensure that more of the fuels used to meet the
program are lower carbon, this would be consistent with the goals of the RFS and we would
support it. [EPA-HQ-OAR-2015-0111-2260-A1 p.5]
1 Stock, James H. The Renewable Fuel Standard: A Path Forward. 2015.
http://scholar.harvard.edu/files/stock/files/renewablefuelstandard.pdf
Response:
Some commenters suggested that EPA should reduce total renewable fuel and advanced biofuel
volumes by the full amount of the reduction in cellulosic volumes. EPA declines to carry
through the full amount of the cellulosic biofuel waiver to the advanced and total renewable fuel
categories. First, we find that the advanced biofuels standard need not be reduced by the full
amount of the cellulosic biofuel waiver, since greater volumes are reasonably attainable and
there is a potential GHG emissions reduction benefit associated with setting the standard at a
level that will require use of these volumes. Some commenters felt that we should reduce the
advanced biofuel volumes and the total renewable fuel volumes by differing amounts. We agree,
and are taking such an approach in the final rule for the reasons described in the final rule.
Comment:
Iowa Corn Growers Association (ICGA)
The EPA notes, "This proposal uses a combination of these two authorities to reduce volumes of
both advanced biofuel and total renewable fuel to address two important constraints: [EPA-HQ-
OAR-2015-0111-1820-A1 p. 2]
• Limitations in the volume of ethanol that can be consumed given practical constraints on
the supply of higher ethanol blends to the vehicles that can use them
• Limitations in the ability of the industry to produce sufficient volumes of qualifying
renewable fuel, particularly non-ethanol fuels." [EPA-HQ-OAR-2015-0111-1820-A1 p.
2]
In 2013, the EPA was petitioned by several states who argued the drought conditions had created
"severe harm" to their states; however the EPA rejected these requests. And, even with drought
conditions in 2013, it was a record corn crop. Today, in 2015, neither of these waiver
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qualifications exists, we do not have severe harm to the economy or environment, and we have a
very adequate supply of corn and the capacity to turn that corn into 15.0 billion gallons of
conventional ethanol. [EPA-HQ-OAR-2015-0111-1820-A1 p. 2]
Since neither of the statutory waiver authorities have been met, the EPA should not have the
authority to change the RVO for corn ethanol. Regardless of this fact, the EPA has invented a
new waiver to consider the availability of renewable fuel distribution infrastructure (limitations
on "consumption") as criteria for waiving the RFS. This new imaginary provision suddenly
includes the blend wall as a valid reason for waiving the statue. Nothing could be further from
the truth. Not only does EPA not have the authority to waive the RFS under this concept, the
blend wall is an idea invented by the oil monopoly to convince EPA to shift from their statutory
obligations. [EPA-HQ-OAR-2015-0111-1820-A1 p. 2]
Response:
EPA has found that there is indeed an inadequate domestic supply of total renewable fuel and
thus EPA is justified in reducing the statutory target. We do not interpret the term "supply" to
refer to biofuels that cannot as a practical or legal matter be used for the qualifying purposes
specified in the Act. EPA's rationale is discussed in detail in the final rule.
2.2.4 Inability of the Market to Reach Statutory Volumes
Comment:
Association of Nebraska Ethanol Producers (ANEEP)
ANEEP's position is that USEPA should set the RFS volumetric targets for Calendar Years 2015
and 2016 at the current statutory limits under the Clean Air Act. The draft RFS proposal issued
by USEPA to roll back the statutory RFS volumes is both unnecessary and unwise. The RFS is
intended to promote the transition of transportation fuels used in the United States to increased
volumes of biofuels over time. USEPA has publically stated its desire to promote the transition
to biofuels as mandated by Congress and these goals can best be achieved by retaining the
statutory RFS volumes listed in the Clean Air Act. However, in the current proposal, USEPA has
accepted at face value the unsubstantiated arguments advanced by petroleum industry interests
that the statutory RFS targets are not attainable. This is simply not the case. The biofuels industry
has unused production capacity sufficient to meet the RFS targets. Also, more and more biofuel
production plants are being certified by USEPA as producing 'advanced biofuels' and new
cellulosic biofuel facilities are coming on-line during 2015. The so-called 'blend wall' can also be
effectively eliminated by providing opportunities for the consumer to select El5 gasoline blends,
but such efforts are currently being stymied by the same petroleum industry interests. The
biofuels industry can and will meet the statutory production targets under the RFS if simply
provided the opportunity. [EPA-HQ-OAR-2015-0111-1809-A1 p.l]
Brazilian Sugarcane Industry Association (UNICA)
According to Brazil's National Agency of Petroleum, Natural Gas and Biofuels (ANP) the
installed capacity for anhydrous and hydrous ethanol production are 108.67 million and 205.68
million liters per day (more than 5 billion gallons and 10 billion gallons per year, respectively).21
If we look at the most recent harvest season, Brazil produced 3.3 billion gallons and 4.6 billion
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gallons, respectively of anhydrous and hydrous ethanol. The numbers regarding ethanol
productive capacity were based on the 383 producing mills listed by the ANP, and it shows that
installed capacity is superior than the actual production, so in case of a higher demand for
ethanol, Brazil is able to quickly respond to the market. In fact, under the right market
conditions, including more robust volumetric requirements, Brazil can have the capacity to
produce an estimated 2 billion gallons of sugarcane ethanol available for export to the United
States in 2016. [EPA-HQ-OAR-2015-0111-2495-A1 p. 11] Clean Air Task Force
The market cannot safely absorb the volume of ethanol that would be eligible for RINs if EPA
were to pursue the full statutory target for total renewable fuel (18.15, 20.5, and 22.25 billion
gallons in 2014-2016 respectively); EPA must therefore make downward adjustments to EISA's
annual targets in order to accommodate the blend wall, beginning in 2014.[EPA-HQ-OAR-2015-
0111-1828-A1 p.5]
Colorado Corn Growers Association
There is sufficient capacity in the biofuels industry to produce volumes that would meet the
statutory levels. The RFS was originally designed to support growth in the industry by setting
attainable targets while pushing the market forward. Events of this past year have demonstrated
that the system is working as intended by driving the market towards increased usage of ethanol
and laying the foundation for further immediate growth. Further developments in infrastructure
are poised to increase volumes with the proper signals from the EPA that future growth is
expected. However, the EPA's hesitancy now to uphold the RFS is compromising the ability to
reach its goals. [EPA-HQ-OAR-2015-0111-2334-A1 p.1-2]
Dakota Spirit AgEnergy
As a producer, I know the statutory requirements can be met through a combination of gasoline
consumption in the form of El 0, increased use of higher ethanol blends such as El 5 and E85,
carry-over RINs and increased biodiesel use. There is no need for EPA to move backward with
its proposed volumes for 2015 and 2016. [EPA-HQ-OAR-2015-0111-2057-A1 p.l]
Growth Energy
What was not reasonable was failing to fully account for the BED that could be distributed and
consumed in excess of the proposed BED volume when setting the total renewable fuel volume
requirement. In that analysis, the only factor to consider is whether there is "inadequate domestic
supply." And even if EPA were right that that factor accounts for constraints on distribution and
consumption, EPA would still have substantially understated the supply of BED. [EPA-HQ-
OAR-2015-0111-2604-A2 p.54]
Iowa Corn Growers Association (ICGA)
1. The ethanol industry has proven that it can produce supplies of renewable fuel that are
adequate to meet the statutory RFS requirements in 2014, 2015, and 2016. It also ignores the
availability of higher blends of ethanol and the ability to build out infrastructure to meet those
targets. [EPA-HQ-OAR-2015-0111-1820-A1 p. 2]
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In 2014, the U.S. ethanol industry produced 14.3 billion gallons of ethanol and nearly 14.4
billion D6 RIN credits were generated. This occurred without any final RFS blending
requirements, and production could have been higher if the statutory RFS volumes had been
implemented by EPA. Similarly, the ethanol industry's "run rate" has surpassed 15 billion
gallons on numerous occasions in 2015, according to weekly data from the Department of
Energy. As such, the statutory RFS levels of 15 billion gallons could be readily met in both 2015
and 2016, especially when ethanol stocks and RIN stocks are also taken into consideration.
[EPA-HQ-OAR-2015-0111-1820-A1 p. 2-3]
National Biodiesel Board
As NBB explained, that the gasoline demand is projected to be less today than in 2007 only
illustrates that the RFS2 program is working to reduce dependence on fossil fuels, not that
Congress sought to give EPA authority to revise the statutory volumes based on reduced gasoline
consumption. NBB also noted that the demand estimates vary over time. For example, the recent
drop in fuel prices is likely to result in increased use of gasoline (and EPA's RVO calculation for
2015 does show higher gasoline consumption than for 2014, EPA-HQ-OAR-2015-0005), which
in turn allows for more ethanol use. It makes little sense that Congress wanted EPA to make
predictions about changing oil prices and consumer demands in setting the volumes under the
statute. That is why Congress chose a straight volume mandate. [EPA-HQ-OAR-2015-0111-
1953-A2p.34]
In short, when considering all renewable fuels eligible for the RFS2 program, the easiest and
most reasonable approach to meeting the goals of the advanced biofuels program is to increase
the biomass-based diesel program. Increasing the volume for biomass-based diesel to at least 2
billion gallons with annual increases of at least 300 million gallons to better effectuate the
advanced biofuel volume set by Congress without contributing to any ethanol blend wall and, in
fact, alleviating the concerns EPA is purporting to address. Additionally, the volumes are more
than reasonable and provide specific direction to obligated parties and renewable fuels producers
with historically proven production capabilities of how to meet minimum requirements of the
statute. [EPA-HQ-OAR-2015-0111-1953-A2 p.34]
EPA's proposed volume for biomass-based diesel must also be viewed with the proposed
volumes for advanced biofuel, which are below what the market can achieve. EPA states that it
"remains committed to promoting renewable fuel production and use in the United States, and
we believe the RFS program will be effective in achieving this end." 80 Fed. Reg. at 33,120. But
then it contends that the intended outcome of the proposal is an "approach that provides volume
targets that balances aggressive growth with marketplace realities." Id. For biomass-based diesel
and advanced biofuels, EPA is doing neither. There is essentially no growth for 2015, then
minimal growth for 2016 and 2017. Marketplace realities for biomass-based diesel indicate that
substantially more can be produced and, even under EPA's definition, used. [EPA-HQ-OAR-
2015-01 ll-1953-A2p.45]
Finally, it is difficult to understand how there would be a willingness to further invest to grow
any "other" advanced biofuel, if EPA sets a level at a smaller market, rather than at a level that
was technology-forcing, as Congress did. Investment and innovation occur by creating sufficient
market signals or financial incentives to move the entire industry forward. EPA has recognized
as much:
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Renewable fuel producers and investors must see a sustained, profitable market for renewable
fuels before they will be willing to invest in the construction of additional fuel production
capacity, which may take years to construct and bring online. Fuel blenders and distributors must
see sustained profit opportunities before they are willing to invest in new infrastructure to
increase their capacity to blend and distribute renewable fuels. [EPA-HQ-OAR-2015-0111-1953-
A2 p.45]
80 Fed. Reg. at 33,119-33,120; see also Testimony of Michael Whitney (EPA-HQ-OAR-2015-
0111-1004) ("As I speak here today we not only have idle capacity to put more biodiesel into our
fuel but we are also engaged in over 50 capital projects to enhance that capacity."). [EPA-HQ-
OAR-2015-0111-1953-A2 p.45]
It is clear that the full advanced biofuel statutory volumes, if implemented, would provide greater
GHG emission reductions and benefits. EPA does not explain how focusing on the use of ethanol
or allowing for "competition" among advanced biofuels furthers these climate change goals, nor
can it. [EPA-HQ-OAR-2015-0111-1953-A2 p.107]
PBF Holding Company LLC
It is particularly necessary to adjust the RFS for the 2014-2016 compliance years because the
ethanol blendwall creates a situation in which it would be impossible for obligated parties to
generate or even acquire sufficient Renewable Identification Numbers ('RINs') to comply with
the statutorily mandated volumes. [EPA-HQ-OAR-2015-0111-1724-A1 p.2]
Poet, LLC
In reducing the Base Renewable target in favor of spurring advanced biofuels, EPA is making
the same mistake that the D.C. Circuit rejected in its 2013 decision API v. EPA: ignoring a clear
statutory mandate (here, the Base Renewable target) and supplanting its own policy ruminations.
[EPA-HQ-OAR-2015-0111-248 l-Alp.26]
Renewable Fuels Association (RFA)
Clearly, the industry has the capacity and the demonstrated capacity utilization rates to easily
satisfy the statutory renewable fuel volume requirements in 2015 and 2016. [EPA-HQ-OAR-
2015-0111-1917-Alp. 21]
Response:
As discussed in Section II.B.5 and II.B.6 of the final rule, we have evaluated potential supplies
of renewable fuel for 2014, 2015, and 2016 and have determined that the statutory targets for
advanced biofuel and total renewable fuel cannot be reached in any of these years. Moreover,
we have determined that this would also be true for total renewable fuel if only the cellulosic
waiver authority was used to reduced volumes. Comments and information provided by
stakeholders were helpful in our assessment but not sufficient to warrant a change in this
determination.
For calendar years 2014 and 2015, the statutory targets cannot be reached because the standards
that are being set in this final rule cannot affect the past. Since we have determined that an
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intentional drawdown of the bank of carryover RINs for the purposes of increasing the volume
requirements in these two years would be inappropriate, and actual supply of renewable fuel in
2014 and that portion of 2015 prior to this final rule is insufficient to reach the statutory targets, a
waiver of the statutory targets for both years is necessary and appropriate.
For 2016, we have determined that the statutory targets are beyond the reach of the market, even
if all carryover RINs were included in the determination of the 2014 and 2015 volume
requirements as suggested by some stakeholders. The market would need to supply either 5.5
billion physical gallons of biodiesel, or 8.7 billion gallons of E85. The statutory volume targets
in 2016 could also be satisfied through production and use of a combination of BED and
E85. However, even in this case the volumes are untenable. For instance, one possible
combination for 2016 would be 4.4 billion gallons of E85 and 3.6 billion gallons of
biodiesel. While both of these volumes are considerably less than the maximums that would be
required if the market supplied only one or the other, nevertheless both levels are beyond the
reach of the market under current circumstances.
Using only the cellulosic waiver authority, there would need to be 385 million ethanol-equivalent
gallons of non-ethanol supplied, equivalent to about 250 million gallons of biodiesel. When
added to the 2.5 billion gallons of biodiesel and renewable diesel (3.75 billion RINs) that, as
discussed in Section II.E.3 of the final rule, is the maximum we believe can reasonably be
achieved in 2016, the total volume of 2.75 billion gallons of biodiesel and renewable diesel is
beyond the reach of a responsive market under even the most optimistic assumptions as
described more fully in Section II.B.6 of the final rule.
Some stakeholders suggested that setting the applicable volume requirements at the statutory
targets would increase certainty for renewable fuel producers and others in the market, and that
as a result they would invest in expanded production and infrastructure. We disagree. Based on
our assessment of achievable volumes, setting the volume requirements at the statutory targets
would result in substantial shortfalls in supply of reneable fuel, which we believe would result in
outcomes that would undermine the RFS program. These outcomes could include significant
noncompliance, subsequent waiver of the original volume requirements, and a drawdown of the
carryover RIN bank to zero with the attendant reduction in the ability of obligated parties to
address unforeseen circumstances. Such outcomes would reduce rather than increase certainty.
Some stakeholders suggested that even if the volume requirements are reduced below the
statutory targets to the point where the volume requirements are achievable for the market as a
whole, it is still possible that some obligated parties would be unable to acquire sufficient RINs
and thus would not be able to comply. The fact that access to RINs may be different among
obligated parties was a fact addressed during the design of the RFS program in 2007; it was
understood that some obligated parties would find it easier to blend renewable fuels into their
gasoline and diesel, and thus would have an excess of RINs, while others would find it more
difficult to blend renewable fuels into their gasoline and diesel, and thus would need to acquire
RINs from those who have excess. In fact, one of the reasons for designing the RFS program
around RINs was to enable those parties to have a means of compliance even if they had greater
challenges blending renewable fuels into their own gasoline and diesel. Moreover, it would be
inappropriate to reduce the volume requirements to the level at which no obligated party needed
to acquire RINs from those who had excess, since doing so would mean that the volume
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requirements would be significantly lower than what the market as a whole is capable of
supplying.
While we have reduced the volumes of advanced biodiesel and total renewable fuel below the
statutory targets for 2014, 2015, and 2016, the required volumes nevertheless represent
substantial growth over this time period. As described in Sections HE. 5 and II.F of the final
rule, the final volume requirements for 2016 in particular will require the market to supply more
renewable fuel than at any time in the past, and greater than would have been supplied in the
absence of the RFS program. As a result, the final volume requirements we are setting for 2016
are technology-forcing in the sense of requiring and expecting the market to invest, innovate, and
expand to increase supply above historical levels.
Some stakeholders said that Congress set a minimum required volume of 15 billion gallons for
conventional renewable fuel. This is not the case, as the statute does not specify targets for
conventional renewable fuel. Instead, the statute sets targets for total renewable fuel and
advanced biofuel, and then provides waiver authorities for reducing either or both of those
targets. In this context, EPA is not under any obligation to set the total renewable fuel and
advanced biofuel volume requirements in such a way that the gap between them remains at 15
billion gallons. Moreover, under the cellulosic waiver authority we can consider the GHG
impacts associated with any reductions, whereas under the general waiver authority we are
making reductions only under "inadequate domestic supply." As a result, it is legitimate to
reduce total renewable fuel based solely on a consideration of supply under the general waiver
authority while basing reductions in advanced biofuel on multiple factors under the cellulosic
waiver authority, with the net result being that the volume of conventional renewable fuel falls
below 15 billion gallons.
For responses to comments stating that the E10 blendwall is not a constraint, or has been
fabricated by the refining industry, see Section 2.4.
For responses to comments stating that supply of renewable fuels cannot increase above the E10
blendwall, see Section 2.4.
For responses to comments stating that production capacity should be the basis of the volume
requirements, see Section 2.4.
For responses to comments suggesting that the proposed 2016 volume requirement for total
renewable fuel is too low, see Section 2.4.3.
For responses to comments suggesting that the E10 blendwall can be addressed by increasing the
required volumes of BED, see Section 2.5.
For responses to comments suggesting that the proposed 2016 volume requirement for advanced
biofuel is too low, see Section 2.5.3.
For responses to comments on gasoline demand and its role in determining the E10 blendwall,
see Section 2.6.1.
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For responses to comments suggesting that obligated parties have failed in their statutory
responsibilities to invest in the infrastructure needed to expand renewable fuel supply, see
Section 2.7.1.
For responses to comments related to imports of sugarcane ethanol, see Section 2.7.4.
For responses to comments on the consideration of opportunities for other advanced biofuels
when determining the required volume of BED, see Section 3.3.1.
For responses to comments on the role of carryover RINs in the RFS program and suggestions
that they could be used to increase the volume requirements, see Section 6.
For a detailed discussion of the constraints associated with biodiesel and renewable diesel
supply, see Section II.E.3 of the final rule.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.2.2.1: Inadequate Domestic Supply
Section 2.3.1: Congressional Intent to Increase Volumes
Section 2.3.2: Power of the Market to Respond to Ambitious Standards
Section 2.6.2: Assumptions of Zero Volumes for EO and El 5
Section 2.9: General Comments on Proposed Total Renewable Fuel Volume Requirements
Section 2.9.1: Comments Supporting Higher Volumes
Section 3.1: General Comments on Biomass-Based Diesel
Section 3.5: General Comments on Increasing the BED Standard No Higher Than 1.28 Billion
Gallon
Section 5.2: EIA Projections of Gasoline and Diesel
Section 7.1: General Comments on Economic Impacts
Section 7.3: Fuels Industry Impacts (oil refineries, biofuel facilities)
Section 8.2: Climate Change (GHG Impacts)
Section 10.2.2: Statutory Deadlines
Section 10.6.4: Ethanol impacts on engines
2.3 Proposed Approach to Determining Volume Requirements
Comment:
Abengoa Bioenergy
EPA's newly proposed RVOs for 2014, 2015 and 2016 are based on the same methodology as
the previous Notice of Proposed Rule Making (NPRM) for 2014. [EPA-HQ-OAR-2015-0111-
2474-A1 p.5]
Advanced Biofuels Association (ABFA)
EPA's attempt to put the RFS2 program on a clear trajectory moving forward is essential to
creating certainty and support from markets to move the industry. EPA's efforts to address the
blend wall are appreciated and we believe the Agency has created a more rational framework
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that reflects the changes in energy that have occurred since the inception of RFS2 in 2007. [EPA-
HQ-OAR-2015-0111-2498-A1 p.14]
Butamax Advanced Biofuels, LLC
The strongest evidence for assessing the available supply is to rely on historical production; in
the current proposal the EPA chooses to ignore historical supply and instead sets targets well
below the proven ability of biofuels producers to deliver both advanced and conventional
biofuels. [EPA-HQ-OAR-2015-0111-1938-A2p. 5]
The role of the EPA in setting the RVO at a level that requires absolute growth in renewable
fuels is critical. The mechanisms to drive this growth will only function effectively if the RVO is
set at a level that requires growth. If the EPA sets an RVO that does not require growth, the
mechanisms will be disabled and growth will not occur. [EPA-HQ-OAR-2015-0111-1938-A2 p.
11]
Independent Fuel Terminal Operators Association (IFTOA)
Recommendation: Therefore, when determining the mandates for 2016 and beyond, EPA should
take a more neutral approach and establish the required volumes in the context of market
realities/constraints, including: (1) the E10 blendwall, (2) limitations in production of advanced
and cellulosic biofuels, (3) automobile manufacturers' warranty restrictions, and (4) distribution
infrastructure limitations. [EPA-HQ-OAR-2015-0111-1947-A1 p. 3]
Union of Concerned Scientists
Broadly we agree that EPA's approach should "balance aggressive growth with marketplace
realities." Overall, the proposed RVO does a good job striking that balance, although there are a
few specific areas where refinements will improve the proposal. Our comments reflect three
broad goals, expanding investment in and production of cellulosic biofuels, limiting problems
caused by expansion of food based fuels and enhancing the stability and predictability of the
fuels policy framework. [EPA-HQ-OAR-2015-0111-2260-A1 p.l]
Congress intended to create a stable and durable framework for investment in low carbon
renewable fuels when it passed the RFS2 in 2007. The realization of the ambitious targets in the
RFS has proven very challenging for many reasons that are beyond EPA's control, but
uncertainty surrounding EPA's administration of the policy has added to these challenges. By
providing clear guidance in the final rule for 2014, 2015 and 2016 and initiating a comprehensive
update to the RSF roadmap, EPA can provide the stable policy foundation that is a precondition
to meeting the ambitious and critically important oil saving and climate goals of the Renewable
Fuels Standard.[EPA-HQ-OAR-2015-0111-2260-A1 p.8]
Response:
Some commenters opposed EPA's proposed approach for determining the volume requirements,
stating that our new proposed volume requirements for 2014, 2015 and 2016 are based on the
same methodology as the prior November 2013 proposal. On the other hand, some commenters
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supported our approach, stating we have created a more rational framework that reflects the
changes that occurred since EISA passed in 2007 and provides the market with greater certainty
for growth. Finally some commenters state that we should set volume at levels that require
growth, believing that the proposed volume requirements would not accomplish this.
In the NPRM we explained that our approach to determining the applicable volumes of advanced
biofuel and total renewable fuel included estimating the market potential for overcoming the
various constraints at play. This approach was based on consideration of the potential future
contributions from sources of qualifying renewable fuel in the aggregate rather than individually,
and in the context of a market that is responsive to the standards that we set. We explained that
we believed this approach to be more straightforward and more in keeping with the statute's
goals to drive renewable transportation fuel use in the U.S. than the proposed approach we
described in the November 29, 2013 proposal for the 2014 standards.
In response to the NPRM, many parties presented alternative volumes for both advanced biofuel
and total renewable fuel, either higher or lower than those we proposed, based on an approach
more akin to that used in our November 29, 2013 proposal. That is, they made their own
estimates of the achievable levels of various types of renewable fuels looking at some individual
market factors, and then used those estimates to suggest overall volume requirements for either
or both advanced biofuel and total renewable fuel. We recognize that this approach is intended
to reduce the generation of the volume requirements to a collection of more easily estimated
components; indeed this is why we had previously considered this approach. Nevertheless, as
described in the final rule, we no longer believe that such an approach is conducive to
determining the intersection between adequate domestic supply and inadequate domestic
supply. The fact that individual stakeholders expressed highly disparate views on the levels of
each source of renewable fuel that are achievable supports this view. In addition, none of the
stakeholders actually fully carried out such an approach, describing and estimating all the
individual pieces that might make up the total standards. Instead they tended to focus on one or
a few aspects and ignore the others. Furthermore, there was essentially no recognition among
stakeholders that each source of renewable fuel is not independent from other sources under the
influence of the RFS program, and that the overall uncertainty is not the same as the uncertainty
associated with each individual source.
We continue to believe that the approach described in the proposed and final rule to determining
the applicable volume requirements for advanced biofuel and total renewable fuel is preferable to
one based on identifying reasonably achievable volumes of individual sources and summing
them together. This is primarily because each piece of the renewable fuels market is impacted
by the others as well as the conventional fuel supply, such that we believe we are more likely to
accurately assess the intersection of adequate and inadequate supply by viewing the renewable
fuel supply holistically, rather than as the sum of its parts. Nevertheless, we recognize that an
assessment of the contribution that individual sources can make to the total is valuable in
demonstrating both the achievability of the volume requirements and the extent to which they
represent the maximum that can realistically be achieved. Therefore, we have provided
additional discussion of the contribution of each type and source of renewable fuel to the totals in
Section II.D. 6 of the final rule.
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While this final rule applies the tools Congress provided to make adjustments to the statutory
volume targets in recognition of the constraints that exist today, we believe the standards we are
finalizing today will drive growth in renewable fuels, particularly advanced biofuels, which
achieve the lowest lifecycle GHG emissions. Further, we believe this approach establishes the
expected path for growth in future years. In our view, while Congress recognized that supply
challenges may exist as evidenced by the waiver provisions, it did not intend growth in the
renewable fuels market to be stopped by those challenges, including those associated with the
"E10 blendwall." The fact that Congress chose to mandate increasing and substantial amounts of
renewable fuel clearly signals that it intended the RFS program to create incentives to increase
renewable fuel supplies and overcome constraints in the market. The standards we are finalizing
will provide those incentives.
The final volume requirements will push the fuels sector to produce and blend more renewable
fuels in 2016 in a manner that is consistent with the goals Congress envisioned. The final
volumes are less than the statutory targets for 2016 but higher than what the market would
produce and use in the absence of such market-driving standards. The 2016 standards are
expected to spur further progress in overcoming current challenges and lead to continued growth
in the production and use of qualifying renewable fuels, including higher-level ethanol blends.
In this regard the final standards are intended to fulfill the spirit and intent of Congress and
provide guidance to market participants.
We acknowledge that we did not meet the statutory deadline for setting the 2014 or the 2015
percentage standards, nor the deadline for the 2014, 2015, and 2016 BED applicable volumes,
and that this has affected the market. For 2016, our final percentage standards are issued on the
statutory schedule, allowing a full year for obligated parties and the market to react to the
standards we set. Therefore, we assume that the standards can influence greater renewable fuel
use than would be the case in the absence of the standards. On this basis, we have set the volume
requirements for 2016 at levels that are higher than in any previous year, and will require the
market to respond in kind.
For responses to comments stating that production capacity should be the basis of the volume
requirements, see Section 2.4.
2.3.1 Congressional Intent to Increase Volumes
Comment:
Abengoa Bioenergy
The RFS is a success story, and has been the single largest driver of investment in and
development of both conventional and advanced biofuels as an alternative to petroleum
based transportation fuel.
The RFS has been an extremely successful program, promoting both rural economic
development and a dramatic increase in domestically produced fuel supplies that has
significantly reduced this nation's dependence on foreign oil imports. Current ethanol production
accounts for approximately 10% of US transportation fuel, and provides cleaner burning and
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higher octane fuel to retailers at a significantly lower cost to consumers. Largely because of the
long term promise of the RFS, Abengoa Bioenergy invested in developing its six US based first
generation ethanol production facilities. These existing facilities have created almost 500 direct
jobs, and indirectly generate and support at least another 8,000 positions. [EPA-HQ-OAR-2015-
0111-2474-A1 p.2]
In addition, as a direct result of the RFS, Abengoa Bioenergy has invested hundreds of millions
of dollars more in the development of second generation biofuels from multiple types of
feedstocks, including both agricultural residues and municipal solid wastes (MSW). We started
construction of our commercial scale cellulosic ethanol plant in September of 2011, and have
now started production operations at the facility and are in the process of commissioning and
ramping up production. This facility provides another 75 permanent jobs with an estimated
annual payroll of approximately $5 million, and generated approximately 300 construction jobs
during its 2 year construction period. At full capacity, it will also provide payments of
approximately $17 million to local feedstock providers in order to purchase the agricultural
residues that previously had no significant market value. Many other companies have also
invested significantly in new technologies to produce advanced biofuels, and several production
facilities are in advanced stages of development, or have begun construction. Much of this
investment was due to the RFS, which until November of 2013, provided a perception of
stability in future markets for advanced biofuels, and generated a measure of confidence for
investors in these new technologies. Now, The advanced biofuel industry has invested billions of
dollars to build first of a kind demonstration and commercial scale biorefmeries here in the
United States, with several new, large-scale cellulosic biofuel facilities beginning operations in
2014 and 2015. Overall, advanced biofuels met the goals of the law every year from 2010
through 2013, furthering the goals of reducing our reliance on foreign oil, while cellulosic
biofuels became a commercial reality. [EPA-HQ-OAR-2015-0111-2474-A1 p.2]
Despite the success spurred by the RFS, EPA's recent actions have undermined the goals and
requirements of the RFS statute, undercut investment in advanced biofuels, and raised
greenhouse gas emissions in the transportation fuel sector. In particular, EPA's unstable
administration of the program since 2013, EPA's failure to issue RFS rules in a timely manner,
and EPA's proposal (first announced in the proposed rule initially issued by EPA in November
2013, and reiterated in the replacement proposed rule published on June 10, 2015) to cut
statutorily mandated RFS volumes in a manner that is inconsistent with the law. This is an
unfortunate and unnecessary departure from how the Agency implemented the law prior to 2013,
when the program worked as intended to spur innovation and growth in the advanced and
cellulosic biofuels space. As a direct result of this policy uncertainty, Abengoa has chosen to
delay its earlier intention to develop additional cellulosic ethanol facilities within the United
States, and has instead announced the development of cellulosic projects in both Brazil and in
France instead. In addition, it is well worth noting that more than $600 million has been invested
overseas in biorefmeries that commercialized new technologies researched and developed here in
the United States. Additional companies originally planning to commercialize biorefmeries in the
United States are now looking for locations overseas or have simply put projects on hold
indefinitely. With commercialization of cellulosic and advanced technologies, companies will
continue to seek economic opportunities to deploy them. However, unless EPA's enforcement of
the RFS is brought back on track to implement the program as conceived and intended by
Congress, and as required by the law, policy instability in the United States will likely drive
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companies to continue deployment in other countries rather than in the United States. [EPA-HQ-
OAR-2015-0111-2474-A1 p.2-3]
Nevertheless, if the Agency returns to stable implementation of the program with a clear
commitment to the statutory requirements that had their intended effect in past years, we believe
that the industry can look forward to expanding cellulosic, advanced, and total renewable fuels
production in the years ahead and continue to make an important contribution to the nation's
energy security. [EPA-HQ-OAR-2015-0111-2474-A1 p.3]
Abengoa requests that EPA revise its NPRM to:
1. Set the cellulosic RVO for 2015 at no less than 157 million gallons and for 2016 at no
less than 350 million gallons.
2. Set the RVOs for Advanced Biofuels and for Total Renewable Fuels for 2015 and 2016
at the full statutory volumes.
3. Recalculate 2014 RVO volumes using the proper data and criteria as suggested
below. [EPA-HQ-OAR-2015-0111-2474-A1 p.3]
Advanced Biofuels Association (ABFA)
The proposed rule1 represents a significant improvement over the original 2014 document for
which our organization submitted extensive comments on the record. The intent of Congress
under EISA was to encourage the development of an advanced and cellulosic biofuels industry.
This concept was embodied in the statute when it called for 21 billion gallons of advanced and
cellulosic biofuels to be produced and consumed by 2022. The original statute specifically
capped corn based ethanol at 15 billion gallons in 2015. In doing so the lawmakers were clear in
their vision to build on the first generation as a bridge to future innovative fuels that would
deliver significantly higher greenhouse gas reductions as well as provide new innovative drop-in
fuel alternatives and non-food based fuels from a variety of cellulosic feedstocks. [EPA-HQ-
OAR-2015-0111-2498-A1 p.2]
When Congress wrote EISA, the expectation was that we would see significant growth in U.S.
gasoline demand and that would allow 10% ethanol to be blended into what was expected to be
150 billion gallons of annual gasoline consumption. That growth has not materialized as a result
of a number of factors including, but not limited to, changes in driving patterns, fewer miles
driven per year, and the adoption of higher CAFE standards leading to a fleet of cars that is far
more efficient than past vehicles. We appreciate EPA's efforts to try and balance all the various
issues involving transportation fuels as we move forward under the RFS program. What we
cannot allow is the obsession of one or more sectors of the industry to kill the entire program for
those companies who are trying to achieve EISA's ambitious objectives. We believe EPA's
proposal strikes an appropriate balance given all the factors under consideration at this time.
[EP A-HQ-OAR-2015-0111-2498-A1 p.2]
Remarks on Congressional Intent
The RFS was created to "reduce dependence on foreign sources of petroleum, increase domestic
sources of energy, and help transition to alternatives to petroleum in the transportation sector" as
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well as "provide a reduction of carbon dioxide emissions."7 In support of ABFA's discussion of
Congressional intent, we wanted to resubmit to the record a number of statements from key
legislators on the Energy Independence and Security Act of 2007:
• Ms. Jackson Lee of Texas: "With this commitment to American biofuels, this legislation
calls for a significant increase in the Renewable Fuels Standard. It encourages the
diversification of American energy crops thus ensuring that biodiesel and cellulosic
sources are key components in America's drive to become energy independent."8
• Mr. Udall of Colorado: "The new RFS has specific requirements for the use of biodiesel
and cellulosic sources to ensure that these ethanol sources also advance along with corn-
based ethanol. Furthermore, the bill includes critical environmental safeguards to ensure
that the growth of homegrown fuels helps to reduce carbon emissions."9
• Mr. Stark of California: "I hope that the environmental safeguards contained in the
Renewable Fuel Standard—which mandates production of 36 billion gallons of
biofuels by 2022—will quickly push production away from corn ethanol and toward
advanced cellulosic fuels."10
• Mr. Van Hollen of Maryland: "This package includes a Renewable Fuels Standard, RFS,
that expands our nation's domestic biofuel production to 36 billion gallons by 2022. I am
especially pleased that this RFS includes a substantial requirement for advanced biofuels
from a variety of different feedstocks."11
• Mr. Dingell of Michigan: "The bill before us places an emphasis on using cellulosic
biomass as a means of producing ethanol. Cellulosic ethanol holds great promise for the
future of renewable fuels because it uses what now constitutes agricultural residue waste
or low-value plant matter, and it contributes fewer greenhouse gas emissions to our
atmosphere than either corn-based ethanol or conventional gasoline.'12
• Mr. Cardin of Maryland: "H.R. 6 makes a historic commitment to develop cellulosic
ethanol by requiring that the United States produce 21 billion gallons of advanced
biofuels, like cellulosic ethanol."13
• Ms. Pelosi of California: "You are present at a moment of change, or real change, of
rejecting the past, respecting the values of the past, but rejecting the insistence that we
stay in the past and go into the future. This is a choice between yesterday and
tomorrow."14
• Mr. Hoyer of Maryland, "This is a historic turning point in American energy policy."15
• Ms. Boxer of California: "In this bill, we have renewable fuels, fuel efficiency, green
buildings. It is a great start."16
• President Bush: "Today we make a major step with the Energy Independence and
Security Act. We make a major step toward reducing our dependence on oil, confronting
global climate change, expanding the production of renewable fuels and giving future
generations of our country a nation that is stronger, cleaner and more secure." 7 [EPA-
HQ-OAR-2015-0111-2498-A1 p.12-13]
1 80 Fed. Reg. 33100(Jun. 10,2015.)
1 See 72 Fed. Reg. 23900 (EPA describing the underlying purposes of the RFS.)
8 CR p. 35922, 12/18/07.
9 CR p. 35972, 12/18/07.
10 CR p. 35928, 12/18/07.
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11 CR p. 35928, 12/18/07.
12 CR p. 35932, 12/18/07.
13CRp. S15428, 12/13/07.
14 CR p. 35925, 12/18/07.
15 CR p. 35916, 12/18/07.
16CRp. S15422, 12/13/07.
17 http://georgewbush-whitehouse.archives.gov/news/releases/2007/12/20071219-6.httnl.
Advanced Biofuels Business Council (ABBC)
Global oil markets are collusively price-controlled by OPEC at the global level, and are
extremely consolidated and vertically integrated domestically. The absence of free market forces
in the liquid fuel marketplace are a problem for the advanced biofuels industry (and other
innovators) because a noncompetitive marketplace does not properly facilitate and reward
innovation. Non-competitive and non-price driven markets are almost impossible to predict with
regard to future demand opportunity, because the market does not behave based on free market
fundamentals and the creation of a better product does not necessarily translate into market
demand. This lack of predictability increases investment risk - or makes risk impossible to
assess - which in turns drives investment and potential strategic partners to other sectors. The
RFS is an aggressive but flexible program that requires obligated parties to blend increasing
volumes of various types of renewable fuel over time. It is necessary to, in essence, do what a
free market would do on its own: promote and reward innovation. [EPA-HQ-OAR-2015-0111-
3528-A1 p.7]
American Council on Renewable Energy (ACORE)
The Renewable Fuel Standard (RFS) was enacted with strong bipartisan support by Congress to
expand production of renewable fuels in order to decrease our nation's dependence on oil,
aggressively reduce greenhouse gas (GHG) and toxic air emissions, and enhance our nation's
energy and economic security.1 By enacting the RFS, Congress intended to annually increase
market access and demand for renewable fuels, thereby incentivizing investment in and
development of these fuels. [EPA-HQ-OAR-2015-0111-1926-A1 p.l]
The RFS has been one of our country's most successful renewable energy policies when
implemented according to statutory intent. The RFS has tripled biofuel production in this country
since 2005,2 and biofuel producers have been able to meet the overall renewable volume
obligations (RVOs) every year the obligations have been in place. The RFS has reduced our
dependence on petroleum, reduced volatile price swings at the pump, cut greenhouse gas and
ambient air emissions from the transportation sector, and increased jobs and tax revenue
throughout the country. Today, the country's economic, security, and environmental interests in
expanding the renewable fuel industry remain as vital as ever. [EPA-HQ-OAR-2015-0111-1926-
Al p.1-2]
1 Originally passed in Energy Policy Act of 2005. (PUBLIC LAW 109-58). August 8, 2005.
http://www. gpo. gov/fdsvs/pkg/PL AW 109publ58/pdf/PLAW-109publ58.pdf. Expanded in
Energy Independence and Security Act (EISA) of 2007. Title II. (PUBLIC LAW 110-140).
December 19. 2007. http://www.gpo.gov/fdsvs/pkg/PLAW-110publl40/pdf/PLAW-
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110publl40.pdf.
2 EIA, "Table 10.3 - Fuel Ethanol Overview", 2015.
http ://www. eia.gov/totalenergy/data/monthly/pdf/sec 10_7. pdf
American Farm Bureau Federation (Farm Bureau)
It is evident that the use of renewable fuels is enhancing our energy security by reducing our
dependence on foreign oil. It is also evident that the White House has repeatedly stated its strong
support for renewable fuels and the importance of improving our nation's energy independence.
Farm Bureau supports and defends the standards and incentives necessary to further develop the
U.S. renewable fuels industry and is opposed to EPA's Proposed Rule. EPA's proposal will
severely undermine the goals that were set by Congress to create a more robust renewable fuels
industry as well as a pathway to achieving energy independence. [EPA-HQ-OAR-2015-0111-
2355-A1 p. 6]
Butamax Advanced Biofuels, LLC
Butamax Advanced Biofuels, LLC appreciates the opportunity to comment on the Proposed
Standards for the Renewable Fuel Standard (RFS) Program for 2014, 2015, and 2016 (the
NPRM). Butamax, a privately funded joint venture of DuPont and BP, is commercializing
proprietary technology to enable the production of biobutanol for gasoline blending. A key
attraction of biobutanol is that it supports an expanded role of biofuels in transport fuels.
Butamax's formation as a company was a direct result of the clear, long-term direction
established by Congress when it created the RFS. That law provided the confidence necessary
for our shareholders to invest hundreds of millions of dollars of their own funds to bring this
biofuel technology to market. The changes proposed in the NPRM undermine the confidence
required by free markets for the long-term investment decisions needed to bring new and
advanced technologies to commercialization. [EPA-HQ-OAR-2015-0111-1938-A1 p. 1]
Clean Fuels Development Coalition and the Nebraska Ethanol Board
A casualty of EPA's failure to force volumes is the lost opportunity in terms of investment in
advanced technology fuels. Once again, the petroleum industry argues that these fuels are not
available. There is a conservative estimate of just under $14 billion in frozen investment due to
EPA's failing to consistently set volumes. Furthermore, as obligated parties, nothing precludes
the petroleum industry from investing in and developing advanced biofuels and the legislative
history of the RFS clearly supports the notion that Congress intended for them to do so. [EPA-
HQ-OAR-2015-0111-2259-A1 p.3]
Many of our Nebraska producers have the ability to add a variety of bolt on technologies such as
corn fiber separation or utilizing stover or a mix of feedstocks to produce low GHG advanced
fuels. Establishing aggressive requirements assuring a market for these products is critical.
Recent statements by Novozymes and other major companies regarding curtailment of
investment due to policy uncertainties created by EPA decisions illustrate this point. [EPA-HQ-
OAR-2015-0111-2259-A1 p.3]
Congress also knew we would need to move beyond the amount of ethanol that could be used in
conventional vehicles and distributed in conventional pumps. The ripple effect of not forcing the
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volumes has crippled the momentum we had going in the Flex Fuel Vehicle (FFV) sector.
Automakers see the same indecisiveness we see and have reduced the volume of FFVs they are
producing. [EPA-HQ-OAR-2015-0111-2259-A1 p.3]
It is important to recognize how all these issues are interconnected. It goes without saying that
advanced biofuels from cellulose were assumed to be the end game of the RFS. If the volumes
were enforced it would have resulted in refueling infrastructure which would have resulted in
OEMs making flex fuel vehicles available to respond to the demand. [EPA-HQ-OAR-2015-
0111-2259-A1 p.3]
In addition to Congressional intent to drive technology, auto production, and refueling
infrastructure, biofuels represent a huge opportunity to reduce pollution and greenhouse gases.
Failing to replace every bit of petroleum based fuels that we can with biofuels ignores the
significant health and pollution consequences of petroleum use. This fact seems to have gotten
little attention in this debate. [EPA-HQ-OAR-2015-0111-2259-A1 p.3]
Commonwealth Agri-Energy, LLC
The EPA's proposal for 2014 through 2016 violates the law, and it contradicts Congress' intent.
You can't — I'm not a lawyer. You can't understand the details of that maybe without a lot of
work and a lot of time. So let's just say if we stay to the intent of the law, do we not do better for
the country? Do we not do better for urban areas as well as ag areas? I think we do. [Docket
Number EPA-HQ-OAR-2015-0111-1044, pp. 188-189.]
Darling Ingredients Inc.
Darling agrees with both the perspective of the EPA regarding the intent of Congress to grow
Advanced Biofuels and that it should take into consideration the ability of the market to respond
to the Proposed Volumes. Indeed the Proposed Rule does provide for growth in both BED and
Advanced Biofuels for 2016 and 2017. However, Darling contends the EPA failed to propose
volumes for both BED and Advanced Biofuels that are consistent with its own interpretation of
the statute. [EPA-HQ-OAR-2015-0111-1929-A1 p.2-3]
Further the EPA is clear that it believes Congress has provided clear direction that the volume
goals established by the EPA should be aspirational and be utilized to increase volumes of
Advanced Fuels. It is clear the availability of BED in 2014 was impacted by lack of clarity on
RFS2 volumes created by the EPA's failure to finalize its rules in a timely fashion and
uncertainty associated with the extension of the Biodiesel Tax Credit. Although, as mentioned
above, the 2014 availability of BED EXCEEDED the proposed 2016 volumes in spite of the
regulatory uncertainty facing the industry. [EPA-HQ-OAR-2015-0111-1929-A1 p.8]
Further, the EPA, despite specifically acknowledging the difficult regulatory environment in
which the industry has operated over the last couple of years, fails to provide any aspirational
goals to support an industry that, by the EPA's own admission in the Current Proposed Rule has
been the driver for expanded Advanced Biofuel production. This despite multiple statements in
the Proposed Rule by the EPA that the clear policy direction (established by Congress in EISA)
for Advanced Fuels should be 'ambitious.' [EPA-HQ-OAR-2015-0111-1929-A1 p.8-9]
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DuPont
In the Proposed Rule, EPA states that "the total volume of ethanol that could reasonably be
consumed is a function of three factors: (1) the overall demand for gasoline; (2) the consumption
of ethanol as E10, E15 and E85; and (3) the presence of non-oxygenated gasoline (EO)." Given
the foregoing analysis, DuPont believes that EPA's proposed method of determining the volume
of ethanol that can be consumed is based on a mistaken belief that the E10 blendwall is a
controlling factor in setting the renewable fuel volumes. DuPont strongly objects to this
approach. At the time Congress passed the RFS2 and when EPA finalized the 2010
implementing rule, it was well known that renewable fuel would eventually need to be blended
above ten percent in order to meet the increasing statutory volumes. DuPont recommends that
EPA abandon the proposed methodology for setting the renewable fuel volumes and instead rely
on the statutory volumes incorporated in the 2010 implementing rule unless EPA has indication
that all biofuels plants combined cannot produce these volumes. Using this approach, DuPont
recommends that EPA set the 2016 Total Renewable Fuel Volume at a value higher than 18.206
billion gallons depending on the cellulosic ethanol RVO. [EPA-HQ-OAR-2015-0111-1826-A1
p.17]
Governors' Biofuels Coalition
Commercialization of advanced ethanol has been remarkably fast. Short-term delays should not
be the reason to ignore the law and Congress's intent. In fact, it took nearly 40 years to turn a
2V2-pound cell phone the size of a brick into a 5-ounce smart phone with more computer power
than the world's first computer. It is truly shortsighted to ignore the statutory goals of the RFS2
and to impose even higher standards on the nascent advanced biofuels industry. [EPA-HQ-OAR-
2015-01 ll-2489-Alp.2]
Growth Energy
At its core, EPA's proposal rests on a fundamental misunderstanding of the RFS program as
Congress designed it. The RFS program forces innovation and investment by intentionally
requiring future levels of renewable fuel use far higher than what can be achieved with present
production capacity, distribution capacity, and technology. The proposal, by contrast, ignores
this mandate and instead only looks backward, setting volumes based on existing capacity to
produce, distribute, and use renewable fuel. Under EPA's approach, distribution constraints and
weak demand become a self-fulfilling prophecy. [EPA-HQ-OAR-2015-0111-2604-A2 p.3]
That would be lamentable for the United States. Renewable fuel is an American industry that
promotes energy independence, improves our nation's environment, supports hundreds of
thousands of jobs (especially in rural areas), and reduces prices at the pump, all without
appreciably raising the price of food or feed. Yet EPA would stunt this industry by capping
demand for its product and forcing the industry to idle production and identify export markets for
excess capacity. That is particularly strange given that EPA's proposed advanced volume
requirement would encourage significant importation of sugarcane ethanol from Brazil. [EPA-
HQ-OAR-2015-0111-2604-A2 p.3]
Congress revised the Renewable Fuel Standard ("RFS") program in 2007 "[t]o move the United
States toward greater energy independence and security, to increase the production of clean
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renewable fuels, to protect consumers, to increase the efficiency of products, buildings, and
vehicles, to promote research on and deploy greenhouse gas capture and storage options, and to
improve the energy performance of the Federal Government." To achieve these goals, Congress
required that "gasoline sold or introduced into commerce in the United States ... contain[] the
applicable volume of renewable fuel," and charged obligated parties—such as gasoline
refiners—with meeting those volume requirements.8 [EPA-HQ-OAR-2015-0111-2604-A2 p.4]
By mandating the amount of renewable fuel that is blended into transportation fuel, Congress
sought to stimulate greater production of renewable fuels. These mandates ensure renewable-fuel
suppliers a market for their products, which encourages suppliers to make costly investments in
production facilities. The RFS also indirectly stimulates greater consumption of transportation
fuels that contain renewable fuel. Obligated parties, having acquired and blended renewable fuel,
have a strong economic incentive to find an outlet for the resulting blended transportation fuels
and, consequently, to invest in renewable-fuel infrastructure to reduce their compliance costs.9
[EPA-HQ-OAR-2015-0111-2604-A2 p.4]
The statute uses market signals to translate its quantitative mandates into action. Specifically,
Congress directed EPA to create a "credit program" to enable obligated parties to comply as
efficiently as possible, either by blending renewable fuel themselves or by buying credits, called
RINs, from others who do.10 As volume obligations become more difficult to achieve, RIN prices
rise accordingly, creating an incentive to invest in infrastructure so that obligated parties can
comply with their obligations by generating RINs rather than buying them. High RIN prices also
permit blended fuels to be sold at a lower effective price to the consumer—the blender is able to
discount the blended fuel by the amount earned from the sale of the accompanying RIN.11 [EPA-
HQ-OAR-2015-0111-2604-A2 p.4-5]
7 EISA, 121 Stat. 1492; see Monroe Energy, LLC v. EPA, 750 F.3d 909, 911-912 (2014).
8 42 U.S.C. § 7545(o)(2)(A)(i) & (iii); see 40 C.F.R § 80.1406(a)(l).
9 See Monroe Energy, 750 F.3d at 919.
10 42 U.S.C. §7545(o)(5).
11 See generally Edgeworth Economics, Impact of the RFS Mandate on Motor Fuel Volumes and
Prices, 2014-2016 ("Impact on Motor Fuel Prices") (July 27, 2015) (attached as Exhibit 1);
Bruce Babcock & Sebastien Pouliot, Price It and They Will Buy: How E85 Can Break the Blend
Wall, Iowa State University CARD Policy Brief 13-PB 11 (Aug.
2013), at http://www.card.iastate.edu/publications/dbs/pdffiles/13pbll.pdf
ICM
The EPA can quickly act on this, and it supports the congressional intent of the RFS. Allow the
retailers to do their job. [Docket Number EPA-HQ-OAR-2015-0111-1044, p. 313.]
Illinois Corn Growers Association (ICGA) and Illinois Renewable Fuels Association
(IRFA)
Even more disturbing is your persistence to continue down the path of discounting Congressional
intent and the law regarding the proposed volume numbers for corn starch ethanol for 2015 and
2016. Corn starch ethanol under the Energy Independence and Security Act is specified to be 15
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billion gallons annually right now instead of the 13.4 billion for 2015 and 14.0 billion gallons for
2016 as you have proposed. Your argument for reducing the gallons of corn starch ethanol based
on an "inadequate domestic supply" due to "limitations in the volume of ethanol that can be
consumed given practical constraints on the supply of higher blends to the vehicles that can use
them" is not defensible and mocks the intent of the waiver provision enacted by Congress to
protect the consumer and make the RFS workable. It would be more accurate if USEPA argued
that the Administration supports the obligated parties who do not want to comply with the
statutory requirements of the RFS II passed by Congress because it would impact their market
share and control of the fuels industry. [EPA-HQ-OAR-2015-0111-1925-A1 p. 1]
Indiana Corn Growers Association (ICGA)
The Renewable Fuel Standard is an important tool in the nation's effort to achieve cleaner fuels.
If the 2014, 2015 and 2016 proposed RVO volumes were enacted as the EPA propose, it would
be in direct violation of the federal statue and intent of this critical energy policy. Reduction in
ethanol production will be a step backward in our country's commitment to cleaner air and make
our nation more dependent on petroleum sources that do not burn as cleanly as ethanol, and often
come from foreign lands. Furthermore, ethanol is a prime economic driver here in the state of
Indiana. [EPA-HQ-OAR-2015-0111-2503-A1 p.l]
The RFS is doing exactly what it was intended to do. It is increasing the renewable fuel
alternatives to petroleum, supporting jobs across the country, especially in struggling rural areas,
and ensuring the United States remains a global leader in developing new renewable energy
sources while decreasing greenhouse gas emissions. [EPA-HQ-OAR-2015-0111-2503-A1 p.l]
We strongly urge you to return to volume levels outlined in the Energy Independence Security
Act (EISA). We respectfully request you reconsider your proposed reduction in the renewable
volume obligations and continue to provide the regulatory backing to the most successful
renewable fuel program in the history of our nation. The continued stability and health of the
rural economy in Indiana and around the country and environmental improvements hinge upon
your decision. [EPA-HQ-OAR-2015-0111-2503-A1 p.l]
Energy security is about more than reducing our national dependence on foreign sources of oil: it
is about energy diversity. Simply relying on one type of energy resource does not allow
flexibility in times of crisis or uncertainty. By investing in renewable biofuels, energy diversity
and energy security are maintained. The direct intention of the RFS was to invest in renewable
energy that decreases greenhouse gas emissions, while spurring economic growth in the
agricultural sector of the nation. [EPA-HQ-OAR-2015-0111-2503-A1 p.2]
When the RFS was enacted, the authors of this policy envisioned renewable fuels, like ethanol,
would displace gasoline at an even faster pace than today. Increasing volumes were to be utilized
through E10 blends (10 percent ethanol, 90 percent gasoline) while the associated production of
flex-fuel vehicles, which can utilize up to 85 percent ethanol, and supporting infrastructure was
established. The former has happened; the latter has lagged compared to what was outlined in
statute. Congress and EPA laid out a renewable energy plan; agriculture responded, ethanol
responded, automotive manufacturers responded. Obligated parties have not met the challenge.
[EPA-HQ-OAR-2015-0111-2503-Alp.2]
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We recommend that 2014, 2015 and 2016 RVOs be returned to statutory levels. In combination
with existing RINs, there is sufficient capacity in the biofuels industry to produce the necessary
volumes laid out in statute. The RFS was designed to support growth in the industry by setting
attainable targets while pushing the market forward. Events of the past year have demonstrated
that the RIN system is working as intended by driving the market toward more ethanol use,
laying the foundation for further immediate growth. We expect the infrastructure to improve
even more hastily when the industry and nation receives a clear message from the EPA that
future growth is expected. [EPA-HQ-OAR-2015-0111-2503-A1 p.2]
Indiana Farm Bureau
EPA's proposal will severely undermine the goals that were set by Congress to create a more
robust renewable fuels industry as well as a pathway to achieving energy independence. [EPA-
HQ-OAR-2015-0111-2486-A1 p.4-5]
Iowa Farm Bureau Federation (IFBF)
It is critical that the EPA maintain the blending requirements laid out by Congress to encourage
new investments in advanced biofuels. [EPA-HQ-OAR-2015-0111-1717-A1 p. 1]
Most troubling is the flawed methodology that EPA is using to justify a reducing in the blending
requirements. The renewable fuels industry has more than enough capacity to produce in excess
of the 15 billion gallons of conventional biofuel prescribed for 2015 by the RFS2. There is
clearly not a supply limitation. Using the lack of infrastructure as an excuse for setting biofuels
levels lowers than originally mandated is not following the intent of the law that was passed by
Congress. The EPA should not call the difficulties associated with blending higher than 10% a
'blend wall' and then call this a supply issue. This proposed rule lays out a methodology that will
never allow biofuels to exceed approximately 10% of the market share. This is directly against
the intent of the RFS2 as passed by Congress — which is to push infrastructure investments to
increase market access for biofuels well beyond 10%.[EPA-HQ-OAR-2015-0111-1717-A1 p. 2]
In conclusion, IFBF policy supports the RFS2 as passed in the Energy Independence and
Security Act of 2007. The methodology for this proposed reduction in renewable blending
requirements is not justified and doesn't follow Congressional intent. The RFS2 has already met
and surpassed its intended goals thus far and the EPA should continue to follow the volume
requirements specified in the law. The RFS is good for farmers, good for the environment, good
for jobs and the economy, good for rural communities, and good for consumers at the gas pump.
IFBF urges you to maintain the RFS2 as written to ensure that the positives of the RFS2 are not
stifled and negated. [EPA-HQ-OAR-2015-0111-1717-A1 p. 2]
John Deere
On behalf of Deere & Company, I appreciate the opportunity to comment on the Proposed Rule
establishing Renewable Volume Obligations for 2014-2016 as part of the Renewable Fuel
Standard (RFS) Program. We endorse your review and analysis as to the intent of Congress
within the Energy Policy Act of 2005 and the Energy Independence and Security Act of 2007. In
our view, adherence to the intent of these significant statutes should be a foremost consideration
in establishing the appropriate Renewable Volume Obligations. [EPA-HQ-OAR-2015-0111-
2042-Alp.l]
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As outlined in your Executive Summary, we concur with your assessment that the 'fundamental
objective of the RFS provisions under the Clean Air Act is clear: To increase the use of
renewable fuels in the U.S. transportation system every year through at least 2022.' We also
concur with your evaluation that Congress plainly aimed 'to diversify the country's fuel supply'
with a goal of 'increasing the nation's energy security.' Perhaps most importantly we agree with
your analysis as copied below:
'In our view, while Congress recognized that supply challenges may exist as evidenced by the
various waiver provisions, it did not intend growth in the renewable fuel market to be ultimately
prevented by these challenges, including such constraints as the 'E10 blendwall' or demand for
gasoline or diesel.' [EPA-HQ-OAR-2015-0111-2042-A1 p.l]
Congress established an aggressive vision for our transportation fuels future. It fully understood
that the obligated parties would be reluctant to make changes that align with this vision. Through
these statutes, Congress intended to apply appropriate, yet sufficient economic leverage on any
party that did not meet its obligations. [EPA-HQ-OAR-2015-0111-2042-A1 p. 1]
LanzaTech, Inc.
As the above agencies and departments can attest, technologies such as LanzaTech's are
positioned to accelerate the reduction of U.S. and global manufacturing carbon emissions while
helping produce fuels and chemicals with significantly lower GHG compared to fossil fuel
alternatives. Transformative renewable fuels like these are exactly what Congress envisioned
from the RFS to drive GHG reductions and energy independence, yet that very program may be
limiting the U.S. capacity for achieving these goals.
EPA recognizes that Congress granted broad discretion to design and implement a
comprehensive renewable fuels program to advance the goals of EISA. EPA constantly reiterates
throughout the Proposed Rule the importance of reducing GHG emissions from the
transportation sector and enhancing the energy and economic security of the United States by
delivering a suite of renewable fuels that reduce and replace the quantity of fossil fuels in
transportation fuel, heating oil and jet fuel.
"The fundamental objective of the RFS provisions under the CAA is clear: To increase the use of
renewable fuels in the US transportation system every year at least through 2022." 17
"Renewable fuels represent an opportunity for the US to move away from fossil fuels toward a
set of lower GHG transportation fuels, and a chance for a still developing low GHG technology
sector to grow."18 [EPA-HQ-OAR-2015-0111-2038-A1 p.8]
17 80 Fed. Reg. atP33101.
18 Id.
Mass Comment Campaign sponsored by anonymous 16 (email) - (189)
I'm writing to ask you to implement a strong Renewable Fuel Standard. [EPA-HQ-OAR-2015-
0111-0218-A1 p.l]
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Under the Renewable Fuel Standard, America has tripled the production of renewable fuel,
driven oil imports down to the lowest level in 20 years, reduced harmful pollution, and created
hundreds of thousands of jobs. [EPA-HQ-OAR-2015-0111-0218-A1 p.l]
Please follow Congress's intent and get the RFS back on track. Implement a strong Renewable
Fuel Standard that follows the requirements mandated by Congress and fix the flawed
methodology that threatens the future of renewable fuel. [EPA-HQ-OAR-2015-0111-0218-A1
p.l]
Mass Comment Campaign submitted by DuPont employees (web) - (1)
I ask that you set the renewable fuel volumes, for 2014 to 2016 and beyond, on an upward
trajectory consistent with the volumes that Congress intended. [EPA-HQ-OAR-2015-0111-2825
p.2]
Minnesota Soybean Processors (MnSP)
EPA further states in their proposed notice that one of EPA's objectives is to incentivize and
increase competition between fuels serving the Advanced Biofuel class of fuels. At 80 Fed. Reg.,
33,110, EPA states that "Congress charged [it] with implementing a program whose explicit goal
is increased renewable fuel use over time." However, EPA continues by contending it is seeking
to achieve this goal "in a fashion that maximizes flexibility and the power of the marketplace,
while at the same time recognizing the complex and disaggregated structure of the fuel
production and distribution systems." MnSP disagrees that EPA has the authority to ignore the
directives of Congress in favor of EPA "maximizing flexibility" and "increasing competition"
and relying on a marketplace that Congress, through their Energy Independence and Security Act
is clearly trying to change through its own legislative action. [EPA-HQ-OAR-2015-0111-2505-
Al p.2]
Missouri Farm Bureau (MFB)
Farm Bureau supported the creation of the original RFS as part of the Energy Policy Act of 2005
to encourage the production of ethanol and biodiesel from agricultural feedstocks and their use in
the transportation sector. Nearly a decade later, the RFS continues to be vital for driving
investment and innovation in biofuel production and product use by oil companies and refiners.
For these reasons and others, farmer and rancher voting delegates at our annual meeting last
December reaffirmed MFB's support for the federal standard as passed in the Energy
Independence and Security Act (EISA) of 2007. [EPA-HQ-OAR-2015-0111-1824-A1 p. 1]
Missouri farmers were among those who answered the call for renewable energy by investing
their own money to build ethanol and biodiesel facilities—and did so with the expectation that
the biofuel production targets set in EISA would remain in effect. Now is not the time to stall
conventional ethanol and biodiesel production and discourage investments in the next generation
of biofuels. We urge EPA to reconsider the proposed rule and commit to meeting the RFS2 goals
set by Congress. Thank you for the opportunity to comment. [EPA-HQ-OAR-2015-0111-1824-
Al p. 2]
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National Biodiesel Board
Throughout its new proposal, EPA recognizes the goals of Congress in setting a mandate to
diversify the country's fuel supply and increase renewable fuel production: [EPA-HQ-OAR-
2015-0111-1953-A2p.8]
While EPA's proposed numbers purport to indicate a growth, in reality they lag behind what has
been produced, and thereby achieved, in the past and what the renewable fuels industry can
potentially supply into the market. As such, while appropriately recognizing Congressional
intent, EPA's proposed volumes fall well short of satisfying Congress's appetite for increasing
volumes. [EPA-HQ-OAR-2015-0111-1953-A2 p.9]
National Chicken Council (NCC)
At the outset, we provide comments on how the Environmental Protection Agency's (EPA's)
administration of the RFS has resulted in a program that departs from the underlying statutory
goals of the Energy Independence and Security Act (EISA) of 2007. [EPA-HQ-OAR-2015-0111-
1814-A1 p.l]
National Farmers Union (NFU)
EPA should pursue GHG emission reductions at every opportunity to try to mitigate climate
change as much as possible. The RFS offers tremendous capacity to reduce GHGs by
encouraging the use of transportation fuels that emit fewer GHGs than petroleum-based
transportation fuels. EPA asserts that the EISA volume standards will cut GHG emissions by 138
million metric tons by 2022.6 To achieve these emissions reductions, EPA should implement the
biofuel volume standards Congress agreed to in the Energy Independence and Security Act
(EISA). The volume standards in the proposed rule must be adjusted because they forego GHG
emission reductions in the immediate term and impede future growth by holding investment at
bay and validating the unwarranted use of waiver authority. [EPA-HQ-OAR-2015-0111-1657-
Al p. 3]
In addition to the direct climate advantages the volume standards in the EISA would create, the
volume standards are important to maintain because farmers and rural communities are
enormously important to building climate resiliency. The RFS is an important tool for initiating
other essential conversations around climate and agriculture with producers. Farmers will need to
consider information on how climate change will impact their operations in order to make
decisions that will maintain the security of our food supply. Farmers may also be able to make
production decisions that mitigate climate change by reducing or sequestering greenhouse
gasses, or that alleviate some of the symptoms of climate change, such as soil enhancement
efforts that help with irregular rainfall. If policymakers hope such actions might be adopted by
enough farmers to create a positive impact, it would be very helpful to establish trust with
farmers and rural communities around climate change by maintaining the EISA's proposed
volume standards. That policy stability would allow farmers to participate in climate resiliency in
a way that directly adds value to their operations and communities, securing their receptiveness
to future conversations around climate. [EPA-HQ-OAR-2015-0111-1657-A1 p. 3-4]
The loss of family farmers presents serious challenges to the economic sustainability of rural
communities. As farmers leave and farmland consolidates, businesses and community
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institutions lose customers and tax revenue, weaken, and eventually close, causing other
institutions and businesses in the community to do the same. Rural residents are left without
access to critical services or jobs. To the extent that climate change contributes to this process, it
presents a serious environmental justice issue to family farmers and rural residents. The RFS
helps keep family farmers farming in two distinct and important ways: it contributes to climate
change mitigation, helping family farmers avoid the most costly consequences of climate change,
and offers family farmers direct value for helping build climate resiliency by stabilizing prices
for biofuel feedstocks and opening investment opportunities in biofuel plants. EPA would best
pursue these important goals by adjusting the proposed biofuel volume standards to match the
standards in the EISA. [EPA-HQ-OAR-2015-0111-1657-A1 p. 4-5]
EPA's proposed rule contains volume standards for advanced biofuel and total renewable fuel
that are lower than the standards agreed to by Congress in the EISA. Though EPA should set
both standards at the statutory levels contained in the EISA, EPA offered distinct reasons for
lowering each standard. Below, NFU asserts why the statutory volume standards for both
categories of biofuel should be implemented in the final rule. [EPA-HQ-OAR-2015-0111-1657-
Al p. 5]
Given the RFS' importance in building climate resiliency and rebuilding rural economies
discussed above, it is of critical importance that the volume standards EPA issues match those
Congress agreed to in the EISA. This is true of the advanced biofuel volume requirement as well
as the total renewable fuel volume standard. Advanced biofuels are especially important to the
climate resiliency goals of the RFS because they hold enormous potential for lowering GHG
emissions from the transportation sector. While conventional biofuels certainly carry a GHG
emissions advantage over transportation fuels derived from fossil sources, and while that
advantage continues to grow as new efficiencies in conventional biofuel production are realized,
advanced biofuels offer even more GHG emission reductions. [EPA-HQ-OAR-2015-0111-1657-
Al p. 5]
While the advanced biofuels industry has not been able to produce enough renewable fuel to
satisfy the volume targets set by Congress in the EISA, lowering volume targets to the level set
by EPA in the proposed rule will not give advanced biofuel producers, or their prospective
investors, the market certainty needed to bring advanced biofuels manufacturing to the capacity
Congress sought when passing the EISA. The branded oil industry wields tremendous power
over the transportation fuels offered to the public. EPA, in several instances throughout its
preamble to the proposed rule, acknowledges that the branded oil industry has prevented
consumers owning FFV vehicles from finding retail outlets to fuel their vehicles with higher
biofuel blends, artificially stymying demand for the environmentally superior product advanced
biofuel manufacturers help create. Lowering volume standards to the extent embodied in the
proposed rule rewards branded oil companies for this behavior and creates additional obstacles to
the investment needed to expand these proven advanced biofuel manufacturing technologies to
the extent needed to fulfill the volume standards set by Congress. [EPA-HQ-OAR-2015-0111-
1657-A1 p. 5]
In order to avoid rewarding branded oil companies for their concerted efforts to undermine the
will of Congress and block the economic and environmental benefits the EISA would otherwise
achieve, EPA must hold fast to the advanced biofuel volume standards proposed in the EISA.
Should EPA determine it to be strictly necessary, the Agency can offer other relief, such as
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carryover credits and deficits, to the obligated parties, or at least set the final advanced biofuel
volume standards closer to those in the EISA than in the proposed rule. This would assure
prospective investors, many of whom are on the very threshold of extending the necessary funds
to advanced biofuel manufacturers, that the Administration is committed to attaining the
environmental benefits their capital could help achieve. [EPA-HQ-OAR-2015-0111-1657-A1 p.
6]
For these reasons, NFU respectfully asks EPA to issue a final rule implementing volume
standards that match those Congress set in the EISA. Those standards will drive investment in
advanced biofuel production and rural communities and contribute to climate resiliency. NFU
stands ready to offer any support and assistance EPA may find helpful regarding these matters.
[EPA-HQ-OAR-2015-0111-1657-A1 p. 8]
6. http://www.epa.gov/climatechange/EPAactivities/regulatory-initiatives.html
New Leaf Biofuel, LLC
Congress was very clear that it intended to grow the advanced biofuels industry over time. This
proposal takes us backwards. We urge you, for the sake of the environment, small businesses and
common sense, increase the proposal to properly account for the market potential for advanced
fuels. [EPA-HQ-OAR-2015-0111-1909-A1, p.3]
North Dakota Office of the Governor
As such, I respectfully request that the EPA not reduce the RFS standards, but rather that they let
federal policy created by a bipartisan Congress function as originally intended. [EPA-HQ-OAR-
2015-0111-1763-A2 p. 1]
Novozymes Americas
Congress did not intend growth in the renewable fuels market to be prevented by distribution
infrastructure challenges, including such constraints as the 'E10 blendwall'. The fact that
Congress chose to mandate increasing and substantial amounts of renewable fuel clearly signals
that it intended the RFS program to create incentives to increase renewable fuel supplies and
overcome limitations in the market. It was clear in 2007 that the volumes blended in 2022 would
easily exceed 10 percent ethanol, even when taking into account the change in gasoline demand
outlook that has taken place since then. [EPA-HQ-OAR-2015-0111-3277-A1 p.l]
Office of the Lt. Governor, Indianapolis, Indiana
While Congress gave the EPA some discretion to adjust volume requirements, Congress did not
contemplate that the EPA would restructure the program in the process. It is imperative that the
EPA keep the renewable volume requirements as high as possible to provide our farmers and our
biofuels industry with as much market certainty as possible. [EPA-HQ-OAR-2015-0111-2482-
Alp.l]
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Specialty Equipment Market Association (SEMA)
SEMA urges the EPA to support legislation in Congress to reform the RFS and eliminate the
corn ethanol mandate. [EPA-HQ-OAR-2015-0111-2490-A1, p.l]
The EPA has authority to reduce RFS limits but it is ultimately the U.S. Congress that needs to
revise the RFS since lawmakers did not appreciate the law's unintended consequences when it
was established in 2005. We urge the EPA to join SEMA in recommending that Congress
eliminate the RFS corn ethanol mandate. [EPA-HQ-OAR-2015-0111-2490-A1, p.2]
The George Washington University
These constraints certainly justify EPA's use of its waiver authorities to prescribe lower volume
requirements than those listed in the statute. However, because the RFS program is on an
unsustainable trajectory, Congress should reevaluate the statutory volume requirements
established in the 2007 EISA and consider other approaches that would be more feasible and
better for the environment.[EPA-HQ-OAR-2015-0111-1815-A1 p.5]
Congress
Congress bears responsibility for setting unrealistic volume requirements and binding EPA to an
unsustainable regulatory approach. As EPA states in its proposed rule: [EPA-HQ-OAR-2015-
0111-1815-A1 p.ll]
Over the past few years, we have seen analysis concluding that the ambitious statutory targets in
the Clean Air Act exceed real world conditions. Despite significant efforts by the U.S.
Departments of Agriculture (USDA) and Energy (DOE) to promote the use of renewable fuels,
real-world limitations, such as the slower than expected development of the cellulosic biofuel
industry, less growth in gasoline use than was expected when Congress enacted these provisions
in 2007, and constraints in supplying certain biofuels to consumers, have made the timeline laid
out by Congress extremely difficult to achieve. [EPA-HQ-OAR-2015-0111-1815-A1 p. 11]
In addition, a wealth of new information has become available on the environmental effect of
renewable fuel production since Congress authorized the EISA in 2007. Unfortunately, the
literature broadly finds that meeting the volume requirements in the statute or in EPA's
regulations may increase greenhouse gas emissions, in addition to polluting waterways. This
information is particularly pertinent because Congress in 2007 surely did not envision that its
RFS program would cause significant environmental damage. While EPA is constrained in its
ability to respond to these unintended consequences, the current Congress is not. [EPA-HQ-
OAR-2015-0111-1815-A1 p.ll]
Given the evidence gained from implementation of the RFS program, Congress should
reevaluate the goals of the program and attempt to determine whether the RFS is meeting its
stated goals. [EPA-HQ-OAR-2015-0111-1815-A1 p.ll]
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The Ohio House of Representatives
Because of these dynamic opportunities, I write to inform you of my support to keep the
Renewable Fuel Standard (RFS) at the level originally set by Congress for 2014, 2015, and 2016.
[EPA-HQ-OAR-2015-0111-3486-Al,p.l]
Trenton Agri Products LLC
The ethanol industry did its part consistent with the legislative intent of expanding renewable
fuels into the US transportation fuel supply. Today, grain based ethanol supply is more than
adequately available to meet the mandate requirements laid out by Congress. [EPA-HQ-OAR-
2015-0111-1686-Alp.l]
Congress fully understood, and the law clearly contemplates, that expanding annual mandates
would require increasing blend levels of renewable fuels in the US gasoline pool. There was no
provision for stopping the mandate requirements when a 10% blend wall was achieved. This is a
fictitious notion. The only provision for reductions of the blend rate or mandated volume is when
renewable fuel supply cannot be reasonably produced and made available to refiners and
marketers of transportation fuels. [EPA-HQ-OAR-2015-0111-1686-A1 p.l]
The Proposed RVO's for 2014-2016 are attempts to match the mandates to this 10% blend rate.
This is not consistent with Congressional intent of the RFS. The RVO's for these years should be
re-proposed to match the law, as the supply from grain based ethanol is there. [EPA-HQ-OAR-
2015-0111-1686-Alp.l]
U.S. Canola Association (USCA)
The intent of Congress when they established and expanded the RFS program was clearly to
increase and promote domestic energy production and U.S. energy independence. This is
reflected by the title of the 2007 law - the Energy Independence and Security Act (EISA) - and is
supported by numerous statements by legislators during consideration of the bill. [EPA-HQ-
OAR-2015-0111-1819-A1 p.3]
United States Senate
Additionally, the proposed rule does not align with prescribed volumes and ignores the original
intent of Congress. [EPA-HQ-OAR-2015-0111-3427 p.2]
When signed into law, the RFS was all about creating access to cleaner burning biofuels, and
promoting consumer choice. The intent was to have volumes set high enough that it would
incentivize fuel stations to install blending infrastructure in order to continuously increase the
amount of renewable fuels being used. However, the EPA has turned this around and cited the
lack of available refueling infrastructure to justify setting volumes at a lower level. This
reasoning flies in the face of Congressional intent, and must be remedied. [EPA-HQ-OAR-2015-
0111-3427 p.2]
Wisconsin Corn Growers Association (WCGA)
Even EPA admitted in its announcement the renewable fuel volumes are below the levels set by
Congress. It's frustrating to see EPA ignore the clear statutes on renewable volume obligations
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and do nothing more than help Big Oil at the expense of American consumers and corn growers.
[EPA-HQ-OAR-2015-0111-1830]
Response:
Although there is scant legislative history for the Energy Independence and Security Act (EISA)
to confirm the facts that were considered by Congress at the time of enactment, we believe that
when Congress specified the renewable fuel volume targets that the RFS program was to attain,
that it likely was with the understanding that the year-to-year growth reflected in the statutory
tables of applicable volumes would be beyond any previously demonstrated ability of the
industry to produce, distribute, and consume renewable fuels. For example, the annual average
growth reflected in the statutory volumes for the time period between 2009 and 2022 is 1.6
billion gallons per year for advanced biofuel and 1.9 billion gallons per year for total renewable
fuel. However, in the period 2001 to 2007 leading up to enactment of EISA, annual average
growth rates were far lower: 0.8 billion gallons per year for ethanol, most of which was not
advanced biofuel, and 0.07 billion gallons per year for biodiesel. The supply of other renewable
fuels during this timeframe was essentially zero. Furthermore, Congress specified the growth of
cellulosic biofuel volumes by 2022 of 16 billion gallons, a fuel that at the time of EISA's
enactment was only in the research and development phase. They did so based on a promise
from such researchers that such volumes could be produced for a little more than $1 a gallon.2 In
other words, Congress set targets that envisioned growth at a pace that far exceeded historical
growth and prioritized that growth as occurring principally in advanced and cellulosic biofuels
(contrary to historical growth patterns). It is apparent, therefore, that Congress intended to
require changes that would be unlikely to occur absent the new program.
Moreover, it is highly unlikely that Congress expected the very high volumes that it specified in
the statute to be reached only through the consumption of E10; indeed the statute does not
explicitly require the use of ethanol at all. At the time EISA was passed in 2007, EIA's Annual
Energy Outlook for 2007 projected that 17.3 billion gallons of ethanol is the maximum that could
be consumed in 2022 if all gasoline contained E10 and there was no EO, E153, or
E85.- However, 17.3 billion gallons is far less than the 36 billion gallons of renewable fuel that
Congress targeted for use in 2022.5 Thus, if the statutory targets for 2022 were to be achieved,
18.7 billion gallons of renewable fuel would need to be consumed in 2022 either as higher level
ethanol blends, or as non-ethanol fuels. Such levels were far beyond the industry's abilities at the
time of EISA's enactment, strongly suggesting that Congress expected the RFS program to
compel the industry to make dramatic changes in a relatively short period of time.
Technoeconomic Modeling to Support the EPA Notice of Proposed Rulemaking by Ling Tao and Andy Aden,
November 3, 2008 (Docket Number EPA-HQ-OAR-2010-0133-0016).
3 E15 was not yet authorized when EISA was passed in 2007 and was not included in EIA's Annual Energy
Outlook.
4 Assumes that AEO2007's 2022 demand for gasoline energy was fulfilled entirely by E10. AEO2007 however,
projected that considerably less gasoline used in 2022 would be E10. We have converted the projected 2022
gasoline energy demand into an equivalent volume of E10 to determine the maximum volume of ethanol that could
have been consumed in 2022, based on the AEO2007, if all gasoline was E10.
5 Congress specified that a minimum of 1 billion gallons of the 2022 total would be biomass-based diesel, but did
not otherwise specify what specific fuel types would comprise the total.
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Some commenters stated EPA is going against Congressional intent to increase renewable fuel
use if we finalize volumes below the statutory volume mandates. These commenters believe
Congress set these mandates at a level that they believe will help incentivize investments such as
building out new and existing capacity, installing storage/distribution infrastructure and
advancing technology — all of which will help to grow volumes and achieve the targets within
the specified timeframe in the statute. EPA believes that Congress set ambitious volume targets
as a mechanism to push renewable fuel volume growth under the RFS program. However,
Congress also provided EPA with waiver authority, in part to address the situation where supply
of renewable fuel did not match these ambitious target levels. EPA disagrees with commenters
that EPA's final volumes are not in alignment with Congressional intent because the final
volumes are set to reflect our assessment of the maximum supply available, consistent with the
Congress!onally-established general waiver authority. The volumes required by this rule are
ambitious and will require new investments and a responsive market to be attained.
Congress did not explicitly indicate, in EISA or in any other document associated with the
legislations, the sort of changes that may have been expected to occur to reach 36 billion gallons
by 2022. Today we know that the changes needed to significantly expand renewable fuel use fall
into a select number of areas, including but not limited to:
• Increased use of El 5 in model year 2001 and later vehicles
• Increased use of E85 or other higher level ethanol blends in flex-fuel vehicles (FFVs)
• Increased production and/or importation of non-ethanol biofuels (e.g., biodiesel,
renewable diesel, renewable gasoline, and butanol) for use in conventional vehicles
and engines
• Increased use of biogas in CNG and LNG vehicles
• Increased use of renewable j et fuel and heating oil
Increased use of cellulosic and other non-food based feedstocks
• Co-development of new technology vehicles and engines optimized for new fuels
• Infrastructure necessary to support delivery, storage and dispensing these fuels will be
necessary.
Some commenters stated that the changes in these areas (which were also noted in the NPRM)
cannot help to achieve growth in renewable fuel use within the timeframe necessary to help meet
the 2015 and 2016 volumes requirements. Some commenters further stated that some of these
ideas should not be supported at all, such as increasing imports of biofuels because it goes
against Congressional intent to increase energy security through domestic biofuels. EPA believes
that we will not see significant changes in every area we highlighted in the timeframe necessary
to increase renewable fuel supply to statutory levels by 2016, but we believe that developments
in some of these areas have been occurring and will continue to occur, and that such changes will
contribute to attaining the volume requirements being finalized for 2016. EPA disagrees with
commenters that supporting import of biofuels goes against Congressional intent. The statute
clearly allows volumes of imported biofuels to count under the RFS program and an increased
diversity of fuels, including those imported from a variety of countries, helps improve energy
security. Refer to Section II.D.6 of this final rule for more detailed discussion on imports of
renewable fuel.
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In the near term we expect that increases in E85 and biodiesel will dominate efforts to increase
the use of renewable fuel, with smaller roles played by other avenues (e.g., increased El 5 use,
CNG and LNG). In the longer term, sustained increases in volume requirements are necessary to
provide the certainty of continued growth in a future market that is needed by investors; the
development of new technology won't occur unless there is clear market potential, and it requires
multiple years to build new production, distribution, and consumption capacity and to develop
the marketing effectiveness among consumers that is needed. We believe that the approach we
take to setting the standards should be consistent with the goal of ambitiously increasing the use
of renewable fuel over time. We believe that the approach we take to setting the standards must
be consistent with Congress' clear goal of ambitiously increasing the use of renewable fuel over
time. To this end, the approach presented in this action makes use of the statutory waiver
authorities only to the degree necessary.
We believe that over time use of both higher level ethanol blends and non-ethanol biofuels can
and will increase, consistent with Congress' intent in enacting EPAct and EISA. As stated
above, while Congress provided waiver authority to account for supply and other challenges, we
do not believe that Congress intended growth in the renewable fuels market to be ultimately
stopped by the E10 blendwall or any other particular limitation that may exist in supplying
renewable fuels. The fact that Congress set volume targets reflecting increasing and substantial
amounts of renewable fuel use clearly signals that it intended the RFS program to create
incentives to increase renewable fuel supplies and overcome supply
limitations. Notwithstanding these facts, Congress also authorized EPA to adjust statutory
volumes as necessary to reflect situations where only partial progress had been made towards
eliminating supply limitations, as well as to address situations involving unexpected severe
economic or environmental harm resulting from program implementation.
For responses to comments suggesting that the volume requirements under the RFS program
should be set in such a way as to minimize imports of renewable fuel, see Section 2.1.
For responses to comments on whether the statutory volume requirements can be reached in
2014, 2015, or 2016, under either the general waiver authority or the cellulosic waiver authority,
see Section 2.2.4.
For response to comments on impacts on jobs and local/state economy, see Section 7.7.
2.3.2 Power of the Market to Respond to Ambitious Standards
Comment:
American Coalition for Ethanol (ACE)
In previous comments, ACE cited studies by Informa (Analysis of whether higher prices of RFS
RINs affected gasoline prices in 2013. Informa Economics. January 2014) and Iowa State
University (Impact of increased ethanol mandates on prices at the pump. CARD Policy Brief 14-
PB18. January 2014. http://www.card.iastate.edu/publications/synopsis.aspx?id=1218), which
concluded RIN prices not only did not increase retail gasoline prices, they led to greater ethanol
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use due to lower pump prices for flex fuels like E85. That data continues to be relevant to the
RVO discussion for 2015 and 2016. [EPA-HQ-OAR-2015-0111-2543-A2 p. 6]
We urge EPA to trust its own findings as the Agency decides the final RVOs. [EPA-HQ-OAR-
2015-0111-2543-A2 p. 7]
A recent report by the National Association of Convenience Stores' Fuels Institute - "E85-A
Market Performance Analysis and Forecast, " contains a study of Minnesota's E85 stations that
seems to confirm Midway's strategy. Among other findings, the report showed that discounts
greater than 50 cents per gallon generated additional E85 sales. During the period of the study,
the only way stations could have offered discounts that high would be if they were either
separating and selling RINs themselves, or, buying pre-blended E85 that was discounted to
reflect at least some portion of the RIN value. Quoting from the report: [EPA-HQ-OAR-2015-
0111-2543-A2p. 7-8]
"The profitability ofE85 during the summer of 2013 can largely be attributed to the dramatic
increase in the value of RINS (renewable identification numbers) that are used to demonstrate
compliance with the Renewable Fuel Standard (RFS). (See Figure 26) When the value of RINS
increased to apeak of $1.46 on July 18, 2013, the ability of retailers who were selling E85 to
offer a more competitive price and increase overall profitability per gallon likewise increased.
Once the RINS values retreated in the fall, E85 margins followed suit and then returned as RINS
values climbed in early 2014. Since RINS values increased in the spring of 2013, the NACS-CSX
data indicates E85 has delivered an average margin of $0.497 compared with $0.144 for regular
unleaded. "10 [EPA-HQ-OAR-2015-0111-2543-A2 p. 8]
10E85-A Market Performance Analysis and Forecast. Fuels Institute. November 12, 2014.
http://fuelsinstitute.org/ResearchArticles/E85 AMarketPerformanceAnalysisForecast.pdf
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
There will only be one month between EPA's deadline to issue the Final Rule for 2016 and when
the rule takes effect, and only seven months from the release of the Proposed Rule. This is
obviously insufficient time for the planning, approval, design, permitting, construction and start-
up of any large capital projects or a sufficient number of infrastructure projects to have a
significant impact on biofuels production and blending at the rack and pump installation at the
retail level. [EPA-HQ-OAR-2015-0111-1948-A1 p.21]
Butamax Advanced Biofuels, LLC
In summary, refiners who focus on marketing the mix of fuels implied by the predictable annual
increases in RVO's will be able to minimize or eliminate their exposure to REST costs. Refiners
who do not work with their downstream business partners to increase the renewable content of
their product will bear an increasing compliance cost. Consumers who are able to purchase E85
will benefit from the use of an increasingly cost effective product; in time this can be expected to
stimulate demand for auto companies to grow their offerings of FFVs. Accordingly, RINs are the
mechanism which make delivery of the volume targets of RFS achievable but require consistent
application of policy to assure that all stakeholders make the long-term commitments required
for this to occur. [EPA-HQ-OAR-2015-0111-1938-A2 p. 8-9]
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The RIN mechanism is not only critical for supporting E85 growth, it is also essential to enable
drop-in biofuels, such as biobutanol, to develop. In a market with RVO's beyond E10 saturation,
the RIN price needs to reflect the difference in cost difference between ethanol and gasoline on
an energy equivalent basis to stimulate E85 sales. Because the manufacturing cost of drop-in
biofuels reflects their higher energy content, the larger number of RINs that they attract is
essential in order to recover this higher cost. This will only be effective, however, where RIN
prices are appropriate. [EPA-HQ-OAR-2015-0111-1938-A2 p. 11]
Clean Air Task Force
With its proposed 2016 standard, EPA is repeating the mistake that Congress made in 2007: the
Agency would require a level of biofuel consumption that is currently unattainable, based on the
expectation that by setting a stretch goal it will spur dramatic changes in consumer demand,
production technology, and product distribution. [EPA-HQ-OAR-2015-0111-1828-A1 p.10]
DuPont
E85 has lower energy content than E10, which needs to be reflected by its price to make it
attractive to consumers. In a paper published by the Center for Agricultural and Rural
Development (CARD) at Iowa State University, Bruce Babcock and Sebastien Pouliot showed
that pricing E85 low enough to generate fuel cost savings, about a 30% discount relative to
gasoline, has the potential to quickly increase ethanol consumption by as much as three billion
gallons over the next year or two. Even a smaller, 6% price reduction would enable an additional
one billion gallons to be consumed. [EPA-HQ-OAR-2015-0111-1826-A1 p.20]
Babcock and Pouliot's work also found that it is possible to meet the 2014 and 2015 RFS targets
through expanded E85 consumption by the existing number of flex-fuel vehicles and stations that
sellESS.16 [EPA-HQ-OAR-2015-0111-1826-A1 p.20]
Importantly, E85 prices in this example did not capture the full discount potential made possible
by the RINs, so the actual increase in sales could have been even more substantial. The graph on
the left in the chart below shows the potential discount that retailers could have offered if they
kept margins constant and took full advantage of the price enabled by the RIN. The
retailers/blenders in this case did not fully discount, but rather took the difference as extra
margin, something they are not likely to do once this becomes a routine route to market for
renewable fuel. [EPA-HQ-OAR-2015-0111-1826-A1 p.21]
16 Price It and They Will Buy: How E85 Can Break the Blend Wall. Bruce A. Babcock, Sebastien
Pouliot. CARD Policy Brief 13-PB 11, August 2013.
Fuel Cell and Hydrogen Energy Association (FCHEA)
Many alternative fuel industry stakeholders have observed that the proposed RFS for 2015 and
2016 was designed to be purposely ambitious as a way to stimulate significant growth in
renewable fuels production. [EPA-HQ-OAR-2015-0111-2483-A1 p.l]
As illustrated when EPA released the proposed standards, it opened the door to new options by
noting that "other renewable fuels that can be supplied and consumed by vehicles," may also
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help to meet these requirements. The agency also repeatedly committed itself to "evaluate new
pathways" for alternative fuels. [EPA-HQ-OAR-2015-0111-2483-A1 p.l]
Approving renewable hydrogen as an alternative fuel under the RFS will not only make EPA's
2015 and 2016 goals more attainable, it would help expedite the proliferation of hydrogen in
states already dedicated to building this infrastructure for use in fuel cell electric vehicles
(FCEVs). [EPA-HQ-OAR-2015-0111-2483-A1 p.l]
Indiana Farm Bureau
Farm Bureau believes that the current RFS2 program and the Renewable Identification Number
(RIN) market are working as intended. The purpose of the RFS2 and the RIN market was to
move beyond the 10 percent blend wall by producing a strong incentive for more biofuels to
move into our nation's gasoline supply. [EPA-HQ-OAR-2015-0111-2486-A1 p.3]
Table 1 shows market conditions for E10, E85 and conventional (D6) RINs on July 2 of this
year. Currently, the price of the D6 RIN is trading around $0.45 which allows for an incentive
for greater market penetration of E85 as indicated from the $0.28 total revenue gained from the
RIN value. The value of the D6 RIN is being used to cut the price of E85 relative to E10 ($2.13
vs. $2.77) and has provided an economic incentive in many parts of the country to get higher
than E10 blends into the market. [EPA-HQ-OAR-2015-0111-2486-A1 p.3] [Table 1 can be
found on page 3 of EPA-HQ-OAR-2015-0111-2486-A1.]
The fact of the matter is that the RFS2 and the RIN market that it established are working
properly and are providing incentives for refiners to offer higher blends of ethanol in the market
at prices that are increasingly competitive with conventional gasoline. Looking at the Proposed
Rule it appears that EPA is abandoning the RIN market as a mechanism for increasing the
production and sale of higher ethanol blends at the precise moment that this mechanism is
beginning to work as intended when the RFS2 passed in 2007. [EPA-HQ-OAR-2015-0111-2486-
Al p.3]
Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
Accept what all the empirical evidence shows—that the current RFS program is a particularly
poor mechanism to incent the consumption of higher ethanol blends. EPA offers a theory that
higher RIN prices will lower E85 prices, making that fuel more competitive with E10, thereby
incenting greater E85 use. But, as a recent study by Christopher Knittel, Ben Meiselman, and
James Stock demonstrated, the pass-through of RIN prices to the E85-E10 spread nationwide "is
precisely estimated to be zero if one adjusts for seasonally." Evidence of no or only modest
growth in E85 stations since 2012 further confirms the fallacy of EPA's theory. And the
evidence also demonstrates that the parties whom EPA has burdened with RFS obligations are
not well situated to eliminate the bottleneck that prevents the value of RINs from being passed
through to consumers. [EPA-HQ-OAR-2015-0111-2603-A1, p.l]
Second, EPA's scenarios for closing that gap ignore empirical realities. EPA primarily relies on
RIN prices as a mechanism to subsidize high-ethanol blends, thereby creating incentives for
blenders and retailers to provide, and consumers to use, such blends. However, the data show
that the value of RINs are not passed through to consumers in the form of a larger spread
between E10 and E85 prices. As a recent study by Christopher Knittel, Ben Meiselman, and
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James Stock demonstrated, the pass-through of RIN prices to the E85-E10 spread "is precisely
estimated to be zero if one adjusts for seasonally."7 They conclude that "[i]f the REST price
savings inherent in blends with high biofuels content are not passed on to the consumer, then this
key mechanism of the RFS is not functioning properly." EPA has offered no reason to expect
that to change in the next six to eighteen months. [EPA-HQ-OAR-2015-0111-2603-A2, pp.3-4]
B. EPA Cannot Rely on Significantly Increased E85 Usage to Meet its Mandates.
To fill the understated 840 million gallon gap for 2016 projected in the NPRM, EPA sketched
out a variety of compliance scenarios that envision increased E85 usage, including as much as
600 million gallons in 2016. The notion that anywhere near these volumes can be supplied to
consumers, beginning just six months from now and only one month after the Final Rule is
scheduled to be promulgated, is highly speculative and ignores empirical evidence showing
otherwise. Indeed, even after adjusting its own projections for 2015-2016 to account for the
NPRM, EIA still concluded that it "does not expect measurable increases in El5 or E85
consumption over the forecast period"58 [EPA-HQ-OAR-2015-0111-2603-A2, p.22]
1. The evidence does not support EPA's theory that REST prices will incentivize increased E85
usage by subsidizing high-ethanol fuels.
In order to bring about a significant increase in E85 usage, EPA has relied upon the theory that
high RIN prices will help to "promote growth in renewable fuel supply." In particular, EPA has
emphasized that "high RIN prices can . . . provide the potential for reductions in the retail selling
prices of E85 and E15 if distributors, blenders, and retailers pass the value of those RINs to end
users." Thus, EPA stated its "belie[f] [that] it is possible for the market to reach volumes perhaps
as high as 600 million gallons under favorable pricing conditions" in 2016, while also suggesting
even 800 million gallons of E85 usage is conceivable. In support of this theory, EPA has offered
a conceptual model suggesting that a blender selling RINs for 60 cents each in 2013 could have
sold E85 to a fuel retailer for 43 cents less than it would have without the RFS program in
place.62 EPA has also theorized that even if retailers or blenders are profiting from the RIN price
savings inherent in high-ethanol blends, rather than passing those savings onto consumers, such
profit-taking behavior will eventually run its course and will bring about the infrastructure
investments necessary to increase E85 usage. According to EPA: "By increasing the potential
profitability of blending renewable fuels, higher RIN prices can incentivize the build out of the
infrastructure necessary to blend and distribute renewable fuel blends as parties seek to enter or
expand their position within this market."63 [EPA-HQ-OAR-2015-0111-2603-A2, pp.22-23]
Unfortunately, however, EPA's theoretical model is belied by the empirical data. Economists
Christopher Knittel, Ben Meiselman, and James Stock recently conducted an econometric
analysis used to examine the transmission of RIN prices to national retail E85 fuel prices
between January 1, 2013 and March 10, 2015. The economists found that the passthrough of RIN
prices to the E85-E10 spread "is precisely estimated to be zero if one adjusts for seasonality. . .
,"64 That is, far from moving the economy closer to achieving the "favorable pricing conditions"
that EPA has deemed necessary to result in the usage of 400 to 600 million gallons of E85 in
2016, RIN prices had essentially no measurable effect on the price of E85 relative to E10 in the
last two years. In summarizing their findings, Knittel, Meiselman, and Stock cast serious doubt
on the notion that high RIN prices can incentivize greater E85 usage: [EPA-HQ-OAR-2015-
0111-2603-A2, pp.23-24]
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[T]he most intriguing and challenging finding here is the near absence of passthrough of RIN
prices to retail E85 prices. While RIN prices might be passed through at some retail outlets at
some times, this is not the case on average using national prices. The goal of the RFS program is
to expand the use of low-carbon domestic biofuels, and the key economic mechanism to induce
consumers to purchase high-renewables blends is the incentives provided by RIN prices. If the
RIN price savings inherent in blends with high biofuels content are not passed on to the
consumer, then this key mechanism of the RFS is not functioning properly. [EPA-HQ-OAR-
2015-0111-2603-A2, p.24]
In setting standards for 2016, EPA must account for this finding and what it suggests about the
current RFS program's ability to bring about increased usage of renewable fuels. [EPA-HQ-
OAR-2015-0111-2603-A2, p.24]
The bottleneck that prevents the value of RINs from being passed through to consumers resides
either with blenders or retailers, or some combination of the two. Although the NPRM tends to
speak of blenders and retailers in the same breath,66 in fact the two types of entities face very
different economic incentives. If refiners were truly able to recover the price of RINs by raising
the price of the blendstock they sell to blenders, then blenders should have a strong economic
incentive to increase E85 sales. Doing so would maximize the ethanol subsidy from RINs and
minimize the impact of increased blendstock prices. If reducing wholesale E85 prices would
incent greater wholesale E85 sales relative to E10 sales, then a blender could reduce its overall
input costs by reducing the volume of blendstock it needed to deliver a blended product.
Likewise, if reducing wholesale E85 prices would incent greater wholesale E85 sales, that would
increase the number of RINs available for compliance, thereby reducing RIN prices and any RIN
cost component impact on gasoline blendstock. Assuming lower E85 prices would meaningfully
increase sales, a rational blender with retail operations also would have an incentive to build out
infrastructure to increase E85 sales.67 Indeed, a rational blender would have an incentive to
profit-take on existing E85 sales only if it concluded that structural constraints beyond its control
limit its ability to increase E85 sales over a reasonable time horizon.68 [EPA-HQ-OAR-2015-
0111-2603-A2, pp.24-25]
In light of the economic incentives facing blenders, fuel retailers are the more likely source of
the bottleneck that prevents consumers from benefiting from lower E85 prices. E85 retailers face
little competition and thus little downward pricing pressure on E85 prices. Of the 150,000 retail
stations nationwide, only about two percent (or about 3,000 stations) offered E85 as of July
2015. Some of these stations may effectively enjoy a monopoly on E85 sales in their area. And,
given EPA's own projections that the economy as a whole used less than 200 million gallons of
higher ethanol blends in 2013 and 2014, it is likely that many of these E85 stations move little
product. In the absence of competition from neighboring stations, these retailers have a strong
incentive to pocket the RIN subsidy inherent in E85 rather than pass it through to their few E85
consumers through lower E85 prices. [EPA-HQ-OAR-2015-Oil 1-2603-A2, pp.25-26]
Using the RFS program to change the incentives of fuel retailers is, to say the least, challenging
and may well be impossible. The RFS program does not regulate the 150,000 or more mostly
independent retail station owners. Between 96 and 99 percent of stations are owned by
independent retailers, i.e., retailers unaffiliated with major oil companies.69 About 70 percent of
retail outlets are convenience stores, which make most of their profit from merchandise such as
food and beverages, and 58 percent of those are single outlet owners for whom the significant
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investment needed to sell E85 would be a major financial risk.70 Most retail outlets also are not
configured to provide an additional product like E85, because those outlets lack proper
dispensers or a storage tank to handle it (and may not even have space for such tanks). The
notion that retailers will invest tens or even hundreds of thousands of dollars over the next six to
eighteen months to offer what will remain a niche product—given the limited numbers of
flexfuel vehicles ("FFVs") and uncertain demand even among FFV owners—is highly
speculative. [EPA-HQ-OAR-2015-Oil 1-2603-A2, pp.26-27]
Consider, for instance, E85 station data over the last 30 months of consistently high RIN prices.
The data indicate that, even with consistently high REST prices, infrastructure challenges have
remained and likely will remain stubbornly in place for the near term. At the state level,
observers often highlights Minnesota as an early adopter of E85, as the state is home to more
E85 stations than any other.73 Yet, even with consistently high RIN prices, Minnesota added only
seven E85 stations in 2013, before losing 57 E85 stations in 2014, and another eight during the
first five months of 2015.74 On a national level, while there has been some growth in E85
stations, that growth is much slower than in years past and certainly far slower than what would
be needed to meaningfully increase E85 market penetration by 2016. The U.S. Department of
Energy's Alternative Fuels Data Center reported 2,498 public and private stations nationwide as
of February 2012; 2,596 stations as of February 2013 (a 3.9 percent increase); 2,709 stations as
of May 2014; (a 4.4 percent increase).75 AFDC reports that there are only 2,944 stations as of
July 2015 (a 8.7 percent increase), of which only 2,639 are actually open to the public.76 That
implies an average annual growth rate since 2012 of about 6 percent, less than half the historic
annual growth rate.77 EPA offers no explanation for why 30 months of high RIN prices led to
slower growth in E85 stations, let alone why it anticipates the situation changing rapidly over the
next six to 18 months to support the significant growth in E85 consumption it assumes in
2016.78 [EPA-HQ-OAR-2015-0111-2603-A2, pp.27-28]
Thus, there is simply no empirical support for the notion that high RIN prices will lead retailers
to pass on REST price savings to customers in the form of lower E85 prices, especially within the
next six to eighteen months. While EPA's economist hypothesizes that "high pergallon profit
margins [from profit taking] may over time result in new parties entering the E85 wholesale or
retail marketplace, and ultimately greater competition and lower E85 fuel prices for customers,"
the available evidence does not support that tepid hypothesis.79 EPA's apparent strategy is akin
to crossing its fingers and hoping that higher RIN costs imposed on the first link in the fuel
supply chain (i.e., refiners) will meaningfully impact decision making in the last link of the chain
(retail stations). [EPA-HQ-OAR-2015-0111-2603-A2, p. 28]
7 Christopher R. Knittel et al., The Pass-Through of RIN Prices to Wholesale and Retail Fuels
under the Renewable Fuel Standard, 2 (June 2015), available at http://scholar.harvard.edu
/files/stock/files/pass-through_of_rin_prices_l.pdf (attached as Exhibit A). [[See Docket
Number EPA-HQ-OAR-2015-0111-2603-A3 for Exhibit A.]]
CO
U.S. Energy Info. Admin., Short-Term Energy Outlook, July 2015, at 33, http://www.eia.gov/
forecasts/steo/report/renew_co2.cfm.
62 U.S. EPA, A Preliminary Assessment of RIN Market Dynamics, RIN Prices, and Their
Effects, EPA-HQ-OAR-2015-0111-0062 (June 10, 2015).
63 80 Fed. Reg. at 33,119; see also id. at 33,129 ("sustained high RIN prices create the incentives
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needed to spur investment in new technologies and production capacity, a critical need if the
market is going to continue expanding in future years according to Congress' intentions.").
64 Knittel, et al., The Pass-Through of RIN Prices to Wholesale and Retail Fuels under the
Renewable Fuel Standard, at 2 (emphases added), available at http://scholar.harvard.edu/
files/stock/files/pass-through_of_rin_prices_l.pdf.
66 See, e.g., NPRM, 80 Fed. Reg. at 33,129 ("High RIN prices can also provide the potential for
reductions in the retail selling prices of E85 and E15 if distributors, blenders, and retailers pass
the value of those RINs to end users.").
67 To the extent blenders do not have such incentives, former Special Assistant to the President
for Energy and Environment offers one explanation for this in support of his view that EPA must
shift the RFS obligation form refiners to blenders. Specifically, he argues that integrated refiners
with large marketing operations "are almost immediately long on RINs at the beginning of every
compliance period" and therefore they have "little incentive to participate financially in the
expansion of blending infrastructure to allow for higher level blends (E85 and El 5) or additional
advanced renewable fuels (B5-B20)." Comments of Ronald E. Minsk, EPA-HQ-OAR-2015-
0111-1307, at 6-7 (Jul. 27, 2015). Mr. Minsk also observes that placing the obligation on refiners
may actually create a disincentive to invest in higher blends or even blend to the blendwall, as
"generation of fewer RINs could help them maximize their return on existing blending (E10)"
since "meeting the mandate level decreases RIN profits generated from being a RIN-long party."
68 To be sure, in such circumstances, a blender may still be forced to pass through the RIN value
in wholesale E85 prices because overall competition in the blending markets may already suffice
to drive E85 wholesale prices to cost. Of course, this is no help to EPA, since it merely means
that the bottleneck resides at the retail level, where retail E85 stations can take profits on the RIN
price savings inherent in high-ethanol blends, rather than passing those savings on to consumers.
9 PMAA letter to Chairman Upton and Ranking Member Pallone, House Committee on Energy
and Commerce (May 1, 2015), http://www.pmaa.org/weeklyreview/attachments/PMAA_
Rebuttal_RFA_April_2015_FINAL%20.pdf; Comments of Monroe Energy LLC and
Philadelphia Energy Solutions Refining and Marketing LLC, EPA-HQ-OAR-2013-0479-5631 at
97 (Feb. 6, 2014) (citing exhibit 1, NERA Economic Consulting, Analysis of RFS2 RIN
Markets, at 28 (Oct. 15, 2013) ("NERA Report")).
70 See NACS, 2015 Retail Fuels Report, at 29 (2015), http://www.nacsonline.com/YourBusiness/
FuelsReports/2015/Documents/2015-NACS-Fuels-Report_full.pdf ("There are 127,588
convenience stores selling fuel in the United States, and these retailers sell an estimated 80% of
all the fuel purchased in the country. Overall, 58% of the convenience stores selling fuel are
single-store operators—more than 70,000 stores."); see also NERA Report at 28.
73 See, e.g., Fuels Institute, A Market Performance Analysis and Forecast (2014), http://www.
fuelsinstitute.org/ResearchArticles/E85_AMarketPerformanceAnalysisF orecast.pdf.
74 Minn. Dep't of Commerce, 2015 Minnesota a E85 + Mid-Blends Station Report, http://mn.
gov/commerce/energy/images/2015-05may-e85.pdf
75 U.S. Dep't of Energy, Transportation Energy Data Book, ch. 6 (3 lst-33d eds.).
76 U.S. Dep't of Energy, Ethanol Fueling Station Locations, http://www.afdc.energy.gov/fuels/
ethanol_locations.html (last visited July 24, 2015).
77 Fuels Institute, A Market Performance, at 33, http://www.fuelsinstitute.org/Research
Articles/E85_AMarketPerformanceAnalysisForecast.pdf (reporting AFDC's historic growth
rates as averaging 12.9 percent). The Fuels Institute in this 2014 report placed the number of E85
stations as between 2,600-3,400 stations. The higher figures reflect data provided by the ethanol
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industry—i.e., Growth Energy (the reporting 2,804 stations) and the Renewable Fuels
Association (then reporting 3,349 stations). See id. at 6. The Merchant Refiners Group believes
that EPA should continue to rely on the statistics provided by the Department of Energy.
78 Of course, EPA also ignores the fact that consumer awareness and acceptance of E85 is not
simply a function of gasoline prices, or the number of FFVs or service stations. Market
penetration of any new fuel, E85 included, will only grow over time and after sustained efforts
each year to build consumer confidence in its safety and reliability. Additionally, EPA ignores
the fact that projected growth in FFVs is flat, in no small part because subsidies for FFVs under
the CAFE standards began to be phased out in 2011, creating a disincentive to produce FFVs and
thereby potentially reducing their market penetration. See, e.g., EIA, Annual Energy Audit 2014
Early Release Overview 4 (2013) ("FFVs are necessary to meet the renewable fuels standard
(RFS), but the phase-out of corporate average fuel economy (CAFE) credits for their sale, as
well as limited demand from consumers, reduces their market penetration.").
79 EPA-HQ-OAR-2015-0111-0062 at 26 (emphasis added). Indeed, consider the caveats the
same economist places on what EPA may conclude from limited evidence in Iowa: "[The data]
further supports EPA's argument that, if all else remains equal, rising RIN prices may impact the
relative pricing of fuel blends containing differing amounts of renewable fuel . . . ." Id.
National Biodiesel Board
Indeed, under EPA's own construct, the proposal is inconsistent. EPA refers to "maximum"
achievable volumes for advanced biofuels, but then defines the biomass-based diesel program
based on "competition." These concepts are not compatible, as the idea of a "maximum" requires
the inclusion of all viable options and necessitates that nothing is excluded. This is contrary to
the idea of "competition." In fact, the only "competition" being fostered by EPA's proposal is
likely through increased imports in the diesel pool, rather than diversification of the fuel supply
overall. This is evidenced by the continuing RIN value drop since EPA's notice, which indicates
that the market believes that RIN supply (production) exceeds RIN demand (RVO levels). As
further explained below, there are no economic or policy reasons to have the volumes as low as
EPA has proposed. EPA has identified no category of advanced biofuel that would be crowded
out by biomass-based diesel, and its proposal is based on an unfounded hypothetical that
undermines the intent of Congress (promoting U.S. biofuel production as rapidly as feasible). As
EPA itself states, Congress wanted "ambitious" levels, which are clearly not those proposed by
EPA for either the biomass-based diesel or advanced biofuel categories. [EPA-HQ-OAR-2015-
0111-1953-A2p.l2-13]
National Farmers Union (NFU)
For these reasons, NFU respectfully asks EPA to issue a final rule implementing volume
standards that match those Congress set in the EISA. Those standards will drive investment in
advanced biofuel production and rural communities and contribute to climate resiliency. NFU
stands ready to offer any support and assistance EPA may find helpful regarding these matters.
[EPA-HQ-OAR-2015-0111-1657-A1 p. 8]
Poet, LLC
Edgeworth Economics adapted the model of motor fuels markets developed in the September
2014 working paper, "Impact of Ethanol Mandates on Fuel Prices when Ethanol and Gasoline
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are Imperfect Substitutes," by Sebastien Pouliot and Bruce A. Babcock ("P&B 2014").l The
purpose of the model is to evaluate the impact of various levels of the RFS biofuels mandate on
the prices and quantities of motor fuels consumed and exported. Edgeworth updated the
parameters of the P&B 2014 model to reflect conditions for fuels markets in 2014-2016. This
memo describes the assumptions (where differing from those described in P&B 2014) and the
key results. [EPA-HQ-OAR-2015-0111-2481-A2 p.l]
P&B 2014 describes an open-economy, partial equilibrium model of supply and demand for
ethanol, gasoline, and final motor fuels, namely E10 and E85. The model is based on an
assumption that E10 and E85 are imperfect substitutes, with RFS compliance for conventional
ethanol requirements above the blendwall met either by switching from E10 to additional E85 or
the export of gasoline.2 P&B calibrate their model for 2013, based on data available as of 2014.
A key assumption is the shape of the demand curve for E85, which P&B adopt from their earlier
research based on the location of FFVs and gas stations that offer E85. P&B assume modest E85
demand when the price of E85 is above the price of E10 (on an energy-adjusted basis), with
demand increasing as E85 price nears and surpasses parity, and ultimately reaching a limit of
about 1.25 billion gallons. P&B derive this relationship based on a number of important
assumptions, including a limit on gas station throughput of 45,000 gallons per month.3 Note, the
model does not account for the existence of banked RINs; therefore compliance with the
mandate must be achieved in each year solely through increased biofuel use.4 [EPA-HQ-OAR-
2015-0111-2481-A2p.l]
Using this model, P&B simulate mandate levels ranging from non-binding (i.e., below the
blendwall) up to a maximum after which no further E85 can be procured. P&B conclude that
RIN prices on the order of $1 to $2 would be sufficient to expand E85 consumption up to the
technical limit imposed on the model (approximately 1.25 billion gallons). P&B find that the
value of the RINs would manifest as a discount for wholesale ethanol, resulting in E85 prices
declining significantly and very little increase in the retail price of E10 (less than 1 percent from
baseline levels). P&B conclude that a mandate of about 14.1 billion gallons of conventional
ethanol would have been feasible in 2013, and would have resulted in RIN prices within the
range of values actually experienced historically with only modest impacts on overall consumer
and producer welfare (less than $200 million annually). [EPA-HQ-OAR-2015-0111-2481-A2
p. 1-2]
To calibrate the P&B 2014 model for 2014 through 2016, we updated the authors' assumptions
(described in Table 1 of P&B 2014) using actual data for 2014 and projections for 2015 and
2016 from the same sources, primarily EIA' s Annual Energy Outlook (2015 edition).5 Two key
aspects of the model require additional explanation. B&P 2014 do not report generalizable
formulas for ethanol supply or E85 demand. For ethanol supply, we assume P&B's functional
form at a corn yield of 170 bushels/acre, which is close to the most recent projections for the
2014/2015 and 2015/2016 crop years of 171 bushels/acre and 167 bushels/acre, respectively
(USDA, Grains and Oilseeds Outlook, February 20, 2015).6 For E85 demand, we adopt P&B's
demand curve; however, we assume an expansion of potential E85 consumption at each price
point proportional to the increase in the number of E85 stations going forward from 2013. We
assume no additional increase related to FFV fleet size. This approach is somewhat conservative,
but generally consistent with other research by P&B.7 Based on data from DOE's Alternative
Fuels Data Center regarding E85 stations, we assume an increase in potential E85 demand at
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every price point of 15.6 percent from P&B's 2013 values to 2014, 32.9 percent from 2013 to
o
2015, and 52.9 percent from 2013 to 2016. We retain other assumptions adopted by P&B related
to, for example, elasticity of demand for retail gasoline and export elasticity. [EP A-HQ-OAR-
2015-0111-2481-A2 p.2]
The key results at mandate levels higher than the blendwall are the changes in E10/E85
consumption and gasoline exports relative to the baseline quantities (i.e.., relative to a scenario
with the mandate set below the blendwall), as well as the changes in E10/E85/RIN prices. For
comparison, we have reproduced P&B's results for 2013 from P&B 2014 in Table 1. Quantities
and prices (except for RIN price) are presented in terms of changes relative to the baseline. As
shown here, P&B found that for 2013 a mandate set about 0.5 billion gallons above the
blendwall9 would have resulted in a RIN price of about $1.5110, corresponding to a discount for
E85 of about 34 percent off baseline levels. E85 consumption would have risen above baseline
levels by about 0.7 billion gallons (the maximum amount of additional E85 that could be
delivered and consumed in 2013, based on P&B's assumptions), with only small adjustments in
gasoline exports and E10 prices.11 [EPA-HQ-OAR-2015-0111-2481-A2 p.2] [Table 1 can be
found on page 2 of docket number EP A-HQ-OAR-2015-0111-2481-A2.]
Tables 2a-2c show results for 2014, 2015, and 2016 based on our implementation of the P&B
model with the additional assumptions described above. For each table, quantities and prices are
again presented in terms of changes relative to the baseline, with adjustments shown up to the
point where the E85 volumes reach the maximum level that could be delivered and consumed in
that year given P&B's assumptions, updated to reflect current projections as discussed above,
including the 45,000 gallon-per-month throughput limit per station. [EPA-HQ-OAR-2015-0111-
2481-A2 p.3] [Tables 2a-2c can be found on page 4-5 of docket number EP A-HQ-OAR-2015-
0111-2481-A2.]
Results for each of these years show qualitatively similar results to those found by P&B for
2013. For 2014, a mandate set at about 0.5 billion gallons above the blendwall12 would have
resulted in an increase of E85 consumption by about 0.6 billion gallons above baseline levels,
with RIN prices at about $0.87. [EPA-HQ-OAR-2015-0111-2481-A2 p.3]
For 2015, a mandate set at about 0.7 billion gallons above the blendwall13 would result in an
increase of E85 consumption by about 0.9 billion gallons above baseline levels, with RIN prices
at about $0.93. [EPA-HQ-OAR-2015-0111-2481-A2 p.3]
For 2016, a mandate set at about 1.2 billion gallons above the blendwall14 would result in an
increase of E85 consumption by about 1.6 billion gallons above baseline levels, with RIN prices
at about $2.02. [EPA-HQ-OAR-2015-0111-2481-A2 p.3]
We prepared a second set of scenarios using an alternate assumption regarding E85 throughput
evaluated by P&B in previous published work—specifically, a maximum throughput of 90,000
gallons per month per E85 station, rather than 45,000.15 Tables 3a-3c show results for 2014,
2015, and 2016. As expected, E85 consumption is substantially higher at comparable RIN prices.
For 2014, a mandate set at about 1.2 billion gallons above the blendwall would have resulted in
an increase of E85 consumption by about 1.6 billion gallons above baseline levels, with RIN
prices at about $1.99. For 2015, a mandate set at about 1.8 billion gallons above the blendwall
would result in an increase of E85 consumption by about 2.4 billion gallons above baseline
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levels, with RIN prices at about $1.90. For 2016, a mandate set at about 1.7 billion gallons above
the blendwall would result in an increase of E85 consumption by about 2.4 billion gallons above
baseline levels, with RIN prices at about $1.48. [EPA-HQ-OAR-2015-0111-2481-A2 p.5]
[Tables 3a-3c can be found on page 6-8 of docket number EPA-HQ-OAR-2015-0111-2481-A2.]
1 P&B 2014 was available at the time of this writing at the website of the Center for Agriculture
and Rural Development, Iowa State University ("CARD"):
www.card.iastate.edu/publications/svnopsis.aspx?id=1228.
9 _
P&B assume E10 contains 10 percent ethanol and E85 contains 75 percent ethanol.
3 A recent analysis by Stillwater Associates confirms that a maximum throughput of 45,000
gallons per month is a reasonable and feasible, if conservative, assumption based on existing
infrastructure. ["Infrastructure Changes and Cost to Increase RFS Ethanol Volumes through
Increased El 5 and E85 Sales in 2016," prepared for Growth Energy by Stillwater Associates
LLC, July 2015]
4 P&B address only the impact of D6 (conventional corn-based ethanol) RINs as an incentive for
increased biofuel use. They do not consider the various forms of "advanced" biofuels in their
model. This approach essentially treats the difference between the total mandated biofuel
quantity and the mandate for "advanced" biofuels as a separate mandate for conventional
ethanol. This approach is reasonable when consumption quantities would match mandated
volumes in the absence of a standard. To the extent that there is additional production of other
biofuels above mandated levels, particularly other forms of ethanol, that could increase the
overall availability of ethanol and lower the market price for that type of fuel, leading to greater
consumption of E85 than predicted by this model. Such impacts are likely to be small, relative to
the other market-based effects measured here.
5 P&B rely on U.S. International Trade Commission (ITC) data for two assumptions: wholesale
gasoline price and net exports of gasoline. This source does not provide projections. We
therefore use EIA figures for wholesale gasoline price and assume no change in gasoline exports
for 2015 and 2016, relative to 2014 values as reported by the ITC.
6 This assumption essentially implies that ethanol capacity in 2015 or 2016 will not expand from
present values. To the extent ethanol capacity does increase, RFS compliance costs would be
lower than measured here.
7 See, for example, Bruce A. Babcock and Sebastien Pouliot, "Impact of Sales Constraints and
Entry on E85 Demand," CARD Policy Brief 13-PB 12, August 2013.
8 AFDC reported 2,784 stations at the end of 2014, compared to 2,409 at the end of 2013 (15.6
percent increase). AFDC reported an additional increase of 7.3 percent from 2014 through mid-
2015, [www.afdc.energy.gov/data download! We assume a total year-over-year increase of 15.0
percent for each of 2015 and 2016.
Based on the EPA's approach in the NPRM, we calculate the 2013 blendwall to be
approximately 13.5 billion gallons. The model results are not particularly sensitive to small
differences in total gasoline consumption.
10 Based on the assumptions adopted in this approach, the model necessarily finds a RIN price of
zero when the mandate is set below the blendwall, defined as 10 percent of total motor gasoline
consumption. Historically, RIN prices have exceeded zero at times when the mandates have been
set at levels below the blendwall, due to real-world complications including a small, residual
demand for EO, the forward-looking nature of the REST market, and uncertainty regarding EPA's
intentions for both future and retroactive policy changes.
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11 Our results differ slightly from P&B 2014 due to our approximation of P&B's E85 demand
curve and ethanol supply curve formulas.
12 Based on the EPA's approach in the NPRM and current data from EIA (July 2015 STEO), we
calculate the 2014 blendwall to be approximately 13.64 billion gallons.
13 Based on the EPA's approach in the NPRM and current data from EIA (July 2015 STEO), we
calculate the 2015 blendwall to be approximately 13.90 billion gallons.
14 Based on the EPA's approach in the NPRM and current data from EIA (July 2015 STEO), we
calculate the 2016 blendwall to be approximately 13.84 billion gallons.
15 See, for example, Babcock & Pouliot, "Impact of Sales Constraints and Entry on E85
Demand," CARD Policy Brief 13-PB 12, August 2013. A recent analysis by Stillwater
Associates confirms that a maximum throughput of 90,000 gallons per month is a reasonable and
feasible, if conservative, assumption based on existing infrastructure with modest expansions.
["Infrastructure Changes and Cost to Increase RFS Ethanol Volumes through Increased El 5 and
E85 Sales in 2016," prepared for Growth Energy by Stillwater Associates LLC, July 2015]
Renewable Fuels Association (RFA)
Higher RIN prices in the spring and summer of 2013 led to dramatic growth in E85
consumption. Progressive fuel blenders and marketers purchased ethanol (with RINs attached),
blended it to make E85, separated the RINs from the gallons, and sold them to refiners who had
chosen to buy RINs rather than physical gallons of ethanol to comply with RFS. [EPA-HQ-
OAR-2015-0111-1917-A1 p. 26]
Data from both agencies indicate dramatic growth in E85 sales in 2013, as the discount between
E85 and E10 widened and FFV owners responded to lower E85 prices. The data also clearly
indicate that E85 sales volumes were well correlated to the movements in RIN prices. That is, as
RIN prices increased, there was a concomitant increase in E85 sales. Minnesota Department of
Commerce data show that E85 sales in the state nearly tripled between January and August 2013
as RIN prices increased from an average of $0.13 to an average of $0.79 (Figure 3).39
Predictably, E85 sales volumes fell in October and November 2013 as RIN prices declined from
their summer highs following the leak of EPA's original 2014 RVO proposed rule. [EPA-HQ-
OAR-2015-0111-1917-A1 p. 26]
Similarly, data from the Iowa Department of Revenue show E85 sales in the state doubled from
the first quarter of 2013 to the third quarter of that year, as quarterly average RIN prices also
doubled (Figure 4).40 As RIN prices plunged in the fourth quarter of 2013, E85 consumption also
fell off considerably. Gradual recovery of RIN prices in the first three quarters of 2014 was
accompanied by gradual increases in E85 consumption. [EPA-HQ-OAR-2015-0111-1917-A1 p.
27]
Given this recognition, it is perplexing that EPA failed in its projection of 2015 and 2016 E85
consumption to account for the demonstrated ability of RINs to drive favorable E85 pricing and
expanded usage under various RVO scenarios. [EPA-HQ-OAR-2015-0111-1917-A1 p. 28]
39Minnesota Dept. of Commerce, 2013 Minnesota E85 + Mid-Blends Station Report (viewed
January 8, 2014) (hereafter "MNDOC E85 Station Report"), available at
http://mn.gov/commerce/energy/images/E-85-Fuel-Use-Data.pdf
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40 Iowa Dept. of Revenue, Motor Fuel Tax Forms and Information: E85 Quarterly Report—
Gallons Sold (viewed January 18, 2014), available at
http://www.iowa.gov/tax/forms/motor.html.
Minnesota Dept. of Commerce, 2013 Minnesota E85 + Mid-Blends Station Report (viewed
January 8,2014) (hereafter "MNDOC E85 Station Report"), available at
http://mn.gov/commerce/energy/images/E-85-Fuel-Use-Data.pdf .Minnesota Dept. of
Commerce, 2013 Minnesota E85 + Mid-Blends Station Report (viewed January 8,2014)
(hereafter "MNDOC E85 Station Report"), available at
http://mn.gov/commerce/energy/images/E-85-Fuel-Use-Data.pdf.
Syngeta
EPA's proposal ignores the ability of El 5, Ł85, mid-level blends (MLBs), and carryover RINs to
facilitate compliance with the statutory renewable fuel requirements of 14.4 bg in 2014, and 15.0
bg in both 2015 and 2016. Leaving the RVO at the intended levels would ensure that REVI prices
send the necessary signals to expand ethanol consumption above the so-called 'blend wall.' A
strong and consistent REVI signal would drive increased demand for E85, El5 and MLBs by
allowing marketers and retailers to substantially discount the prices for these fuels relative to
gasoline. Durable RIN prices would also drive obligated parties to invest in the infrastructure
needed to ensure required levels of biofuels can be distributed in 2015, 2016 and beyond.
Increased sales of E85, El5 and MLBs through new and existing pumps could easily bridge the
gap between the so called E10 'blend wall' and the statutory requirements. [EPA-HQ-OAR-2015-
0111-2493-A1 p.2-3]
The Andersons, Inc.
Leaving the RVO at the intended levels would ensure that RIN prices send the necessary signals
to expand ethanol consumption above the so-called 'blend wall.' A strong and consistent RIN
signal would drive increased demand for E85, El 5 and MLBs by allowing marketers and
retailers to substantially discount the prices for these fuels relative to gasoline. Durable RIN
prices would also drive obligated parties to invest in the infrastructure needed to ensure required
levels of biofuels can be distributed in 2015, 2016 and beyond. Increased sales of E85, E15 and
MLBs through new and existing pumps could easily bridge the gap between the E10 'blend wall'
and the statutory requirements. [EPA-HQ-OAR-2015-0111-2509-A2 p.3]
The Valero Companies
The RFS RIN system is supposed to increase consumption of renewable fuel by decreasing the
price of fuel such as E85 in the market as blenders pass the RIN benefits onto consumers;
however, the system fails to pass the REST benefits to the consumer which has resulted in high
prices for fuels such as E85. l [EPA-HQ-OAR-2015-0111-2765-A1 p. 18]
41 Christopher R. Knittel, Ben S. Meiselman, and James H. Stock, The Pass-Through of RIN
Prices to Wholesale and Retail Fuels under the Renewable Fuel Standard., National Bureau of
Economic Research (June 2015), available at: http://www.nber.org/papers/w21343. (Page20)
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Western Plains Energy, LLC (WEP)
Certainly there are physical constraints in getting this additional volume to consumers in the
form of El 5 or higher blends. However, Congress's responsibility was to set the obligated
volumes, and EPA's responsibility is to hold obligated parties accountability in meeting those
volume requirements. It is then up to the free market to decide how those volumes will be
attained. Product pricing and RINI values will provide the necessary motive market forces to see
that the obligated volumes are met. Further, the ethanol and agriculture industry is stepping up to
invest in excess of $150 million in higher blend infrastructure over the next two years. By
prescribing lower volumes, the EPA is choosing to limit ethanol's use as a transportation fuel to
E10 and choosing to create a 'blend wall'. This choice is for the consumer to make, and it does
not fall within EPA's waiver authority. [EPA-HQ-OAR-2015-0111-2471-A1 p.3] [EPA-HQ-
OAR-2015-0111-2958-A1 p.3]
Response:
Several commenters questioned EPA's authority to reduce the required volumes below the
statutory levels. Congress granted EPA broad authority to reduce the advanced and total
renewable fuel volume requirements when we reduce the applicable volume of cellulosic biofuel,
as well as the authority to reduce the statutory volumes of any renewable fuel if we determine
that there is an inadequate domestic supply of renewable fuel or that meeting the standards
would result in severe economic or environmental harm (For a further discussion of EPA's
waiver authorities see Section II.B of the final rule and Sections 2.2.1 and 2.2.2 of this RTC
document). As discussed in Section HE.5 and II.E.6 of the final rule we do not believe that the
statutory volumes can be met for 2014-2016, even with the incentives provided by high RIN
prices. We recognize the potential benefits renewable fuels can have on rural communities and
GHG reductions, and we believe that significant benefits will occur with the standards we are
finalizing qwhich increase volumes each year. EPA does not believe, however, that there will be
a sufficient domestic supply of qualifying renewable fuel in 2016 to satisfy the statutory
volumes. See Section HE for a further discussion of our assessment of the available supply of
renewable fuels in 2016.
One commenter stated that the proposed volume requirements would be unattainable. We
disagree with this assessment. We believe that the RFS standards are intended to spur changes
throughout the fuels market, including the production, distribution, and use of renewable fuels,
and that they are capable of doing so. Although many other commenters stated that we should
simply set the standards at the statutory targets and rely on the free market to figure out how to
attain them, we do not believe it would be appropriate to ignore the reality of marketplace
constraints. The degree to which ambitious standards are able to affect the supply of renewable
fuels is not without limits or constraints. For further discussion of EPA's assessment of the
supply of renewable fuel in 2016 see Section HE of the final rule.
In this final rule EPA has established a number of different volume requirements (total
renewable fuel, advanced biofuel, cellulosic biofuel and biomass-based diesel). Each of these
standards is justified based on different provisions of the statute, including where appropriate, on
different waiver authorities. To establish the volume requirement for total renewable fuel, EPA
has used both the cellulosic waiver authority, and the general waiver authority due to inadequate
domestic supply. In determining the appropriate volume for this standard we have included all of
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the qualifying renewable fuel (including all available supplies of qualifying biodiesel and
renewable diesel) that we believe can be supplied to the United States in 2016 (see Section II.E.
of the final rule).
For the advanced biofuel standard we have used only the cellulosic waiver authority, and
therefore can consider factors other than the available supply in establishing this standard. In so
doing we have determined that it is appropriate to require the use of volumes of advanced
biofuels that are reasonably attainable (see Section II.F of the final rule).
EPA is not required to establish the biomass-based diesel (BED) standard at the maximum
reasonably achievable level, but rather is directed to establish the required volume at a level that
is no less than 1 billion gallons, based on a review of the program to date, coordination with the
Departments of Agriculture and Energy, and considering of a number of different, and often
competing factors. Our consideration of these factors, and the history of the implementation of
the RFS program to date, can be found in Section III of the final rule and Section 3 of this RTC
document. As discussed there, we have determined that it is appropriate to set the BED a level
higher than in prior years, but still lower than the volume we anticipate may be needed to comply
with the advanced biofuel standard.
One commenter noted that due to the late issuance of the proposed and final standards for 2015
EPA should not assume that the RFS standards can increase the supply of renewable fuel in
2015. EPA generally agrees with this comment. In establishing the required volumes for 2015
we have primarily relied on actual RIN generation and retirement data (for the first 9 months of
the year) and have used this data to project the likely supply of biofuel for the last three months
of 2015. We have not assumed that the final rule will significantly influence these volumes. For
additional responses to comments on the 2015 standards, see Section 2.4.2 and 2.5.2.
Several commenters discussed the ability for high RIN prices to enable the statutory volumes to
be met through increased use of E85, El5, and other mid-level ethanol blends. Some presented
their own data, or reports authored by others to support their claims. We acknowledge that
maintaining the statutory volumes would likely cause a significant increase in the price of
RINs. EPA disagrees with the commenters' statement, however, that we have failed to account
for the ability of RINs to drive favorable E85 pricing and expand E85 use. High RIN prices can,
in a competitive and responsive market, contribute to lower E85 prices at both the wholesale and
retail level. These lower E85 prices can in turn result in increased E85 sales if FFV owners
respond to these lower prices by purchasing more E85. In reviewing the available data, however,
we concluded that both of these impacts are limited. While higher RIN prices can result in lower
retail prices of E85, they can alternatively result in increased margins for E85 retailers (as noted
in the comment above), or some combination of these impacts. We also note that while higher
E85 sales volumes were observed when E85 retail prices were low relative to E10 prices as
several commenters highlighted, that the increased sales volumes were nevertheless still
limited. For example, estimated E85 sales in 2013 were about 130 million gallons. The data we
have reviewed suggests that even RIN prices that far exceeded historical highs would be
insufficient to increase E85 sales volumes enough to allow the statutory total renewable fuel
volumes to be reached, nor would they be likely to appreciably increase the total available supply
of renewable fuel in the United States in 2016 beyond the level that we have finalized.
Conversely, a significantly higher total renewable fuel standard than we are establishing in this
final rule would potentially have unreasonable impacts, such as RIN prices that exceed historical
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highs by a significant margin, impacts on fuel prices, and obligated party non-compliance. For
more information see Section HE of the final rule and EPA memos "An Assessment of the
Impact of RIN Prices on the Retail Price of E85" and "Correlating E85 consumption volumes
with E85 price."
Several commenters cited a paper written by Babcock and Pouliot as evidence that high RIN
prices could result in increased volume of E85. Some argued that this would allow the statutory
volumes to be met. EPA has reviewed the Babcock and Pouliot paper, as well a model presented
by a commenter based on this work, and other available information on the potential for E85
sales. We disagree with the commenters' assessment of the amount of E85 that can be consumed
in 2016. EPA concluded that two key assumptions made by Babcock and Pouliot are not
supported by the available data; that sales of E85 will increase in a non-linear fashion beyond the
point of price parity with E10, and that the full RIN value will be passed on to E85 consumers
and reflected in the retail price of E85. A graph presented by one of the commenters based on a
modified version of Babcock and Pouliot's model makes the same unsupported assumption on
RIN pass through (For a further discussion on each of these issues see EPA memos "Correlating
E85 consumption volumes with E85 price" and "An Assessment of the Impact of RIN Prices on
the Retail Price of E85"). A more recent paper published by Babcock and Pouliot in September
2015 projected much lower E85 sales from metro areas, which are expected to account for a
significant majority of all E85 sales.6 This paper projected E85 sales of 250 million gallons if
E85 was priced at parity on a cost per mile basis with E10, and 1 billion gallons of E85 if E85
were priced to save drivers 23% on a cost per mile basis (the equivalent of nearly 50% less on a
price per gallon basis). These projections still rely on a non-linear relationship between E85 sales
and the price ratio at the pump, and we believe projecting that E85 will be priced to save drivers
23% on a cost per mile basis is not a reasonable assumption. For further details of EPA's
assessment of the potential for E85 see Section II.E.ii and II.E.iii of the final rule.
Another commenter cited a study authored by Knittel, Meiselman, and Stock that found that
much of the potential impact of higher RIN prices was not passed through to consumers in the
retail price of E85, limiting the ability for E85 to expand to satisfy the statutory volumes. As
discussed above, our analysis demonstrates that the full value of RINs has not historically been
passed through to E85 retail prices, though a portion of it has been passed through. The study
cited did not control for the fluctuations in the price of ethanol, a key factor in the price of E85.
This may explain why they were unable to see any pass through of RIN value, while the analysis
conducted by EPA revealed a partial pass through of the RIN value in the retail price of E85. To
the degree that the RIN value is captured by retail station owners as profit, it will provide
incentives for expanding the equipment needed to offer E85. To the degree that the RIN value is
passed through to the retail price of E85, it will provide incentives for FFVs owners to choose
E85overE10.
How Much Ethanol Can Be Consumed in E85. Bruce A. Babcock, Sebastien Pouliot. CARD
Policy Brief 15-BP 54, September 2015.
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As discussed in detail in the supporting documents to this rule,7 EPA disagrees with the claim
that there is a systematic difference in the cost of compliance between obligated parties that
obtain the RINs necessary for compliance by purchasing and marketing renewable fuels and
those that purchase separated RINs. In each case, market data reviewed by EPA generally
indicates that the obligated parties recover the cost of the RINs through higher prices received
for the petroleum derived fuels they sell. We generally agree that the RFS standards can result in
lower retail prices for E85 than would be expected absent the RFS program, however as
discussed in the memo "An Assessment of the Impact of RIN Prices on the Retail Price of E85,"
we believe this impact will be limited by the lack of competition in the E85 market. As discussed
in detail in Section II of the final rule, we do not believe higher RIN prices will be sufficient to
enable the statutory volumes to be achieved.
Another commenter noted that studies conducted by EPA and others indicate that high RIN
prices have historically not lead to higher retail gasoline (E10) prices. EPA believes this
assessment is accurate. All of the studies mentioned, however, are based on historical data. This
includes the analyses conducted by EPA. These studies should not be used as evidence that
gasoline prices would remain unaffected by extremely high RIN prices, such as those we would
expect to see if the RFS standards were established beyond the level of RINs that can be
supplied. Importantly, EPA's assessment of the impact of high RIN prices also found that these
high RIN prices can and have resulted in higher diesel fuel prices.
Finally, EPA received a comment requesting the approval of an RFS pathway for hydrogen used
in fuel cells as a transportation fuel. This comment is beyond the scope of this rulemaking. The
RFS program does not currently include a pathway for the generation of RINs using hydrogen as
a transportation fuel, nor has EPA received a petition requesting that we evaluate such a
pathway. We therefore think it is very unlikely that the supply of RIN-generating renewable
fuels will be impacted by hydrogen used as transportation fuel in 2016.
For responses to comments on the role of carryover RINs in the RFS program and suggestions
that they could be used to increase the volume requirements, see Section 6.
2.4 Proposed Volumes for Total Renewable Fuel
Comment:
AL-Corn Clean Fuel
3. EPA's proposal destroys the incentive provided by Renewable Identification Number credits
(RINs) to expand renewable fuel infrastructure. It also ignores available solutions to the 'blend
wall' and overlooks a clear path to compliance with 2014-2016 statutory requirements for
renewable fuel. [EPA-HQ-OAR-2015-0111-1214-A2 p.3]
7 "A Preliminary Assessment of RIN Market Dynamics, REST Prices, and Their Effects," Dallas
Burkholder, Office of Transportation and Air Quality, US EPA. May 14, 2015, EPA Air Docket
EPA-HQ-OAR-2015-0111
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EPA's proposal ignores the ability of El 5, E85, mid-level blends (MLBs), and carryover RINs to
facilitate compliance with the statutory renewable fuel requirements of 14.4 bg in 2014, and 15.0
bg in both 2015 and 2016. Leaving the RVO at the intended levels would ensure that RIN prices
send the necessary signals to expand ethanol consumption above the so-called 'blend wall.' A
strong and consistent RIN signal would drive increased demand for E85, El5 and MLBs by
allowing marketers and retailers to substantially discount the prices for these fuels relative to
gasoline. Durable RIN prices would also drive obligated parties to invest in the infrastructure
needed to ensure required levels of biofuels can be distributed in 2015, 2016 and beyond.
Increased sales of E85, El5 and MLBs through new and existing pumps could easily bridge the
gap between the E10 'blend wall' and the statutory requirements. [EPA-HQ-OAR-2015-0111-
1214-A2p.3]
We encourage EPA to revisit its assumptions of how much E85, El 5 and MLBs can be
reasonably consumed in 2015 and 2016 and examine how the volumes may change under
various RIN price scenarios. [EPA-HQ-OAR-2015-0111-1214-A2 p.4]
American Coalition for Ethanol (ACE)
The very definition of innovation is producing two renewable fuels from one feedstock. If EPA
wants the RFS to succeed in truly helping commercialize advanced and cellulosic biofuels, the
Agency needs to come to grips with the fact that the primary way to produce advanced and
cellulosic biofuels in the U.S. is from existing corn ethanol facilities, and RFS policy conditions
need to support that integration and growth. [EPA-HQ-OAR-2015-0111-2543-A2 p. 13]
American Farm Bureau Federation (Farm Bureau)
The bulk of the total RFS2 renewable fuel volume consists of conventional ethanol. It is
primarily at this point that EPA's proposed rule becomes problematic. The proposed total
renewable volume, and therefore the proposed implied conventional ethanol mandate, is well
below the level mandated by EISA. No one disputes the fact that EPA has the authority to
partially waive RFS volume requirements. EPA has specific authorization to partially waive the
cellulosic ethanol mandate if sufficient volumes of product are not available to meet the
mandate, and EPA has had to use that waiver authority repeatedly over the life of the RFS2.
[EPA-HQ-OAR-2015-0111-2355-A1 p. 2]
Note, however, that in the Proposed Rule EPA is waiving the total renewable fuel mandate by a
volume that is considerably larger than the amount of the cellulosic waiver. For example, in
2015, EPA proposes waiving 2.89 billion gallons of the cellulosic mandate. Part of this waived
volume is made up by a higher Biomass-based Diesel volume so that the total amount of the
Advanced Biofuel category that is waived is 2.6 billion gallons. However, the total renewable
fuel waiver is not just 2.6 billion gallons; it is 4.2 billion gallons. The additional volume being
waived comes out of the implied conventional ethanol mandate. The renewable fuels industry
has more than enough capacity to produce in excess of the 15 billion gallons of conventional
biofuel prescribed for 2015 by the EISA, so there is clearly not a supply limitation. [EPA-HQ-
OAR-2015-0111-2355-A1 p. 2]
Farm Bureau believes that the ethanol blend wall can be overcome. In fact, the means of
overcoming it are already in place with the RFS2. RFS2 volume mandates and RIN prices are
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working as intended to provide incentives for the production and use of higher ethanol blends.
The petroleum industry's unwillingness to offer higher blends must not be taken as evidence that
the RFS2 is unworkable. Rather, it is evidence that they are unwilling to cede market share to an
alternative fuel. But making space in the market for alternative fuels that contribute to energy
independence, environmental improvement, and economic development is exactly the point of
RFS2. And it is working. There is thus no need to roll back volume requirements in the Proposed
Rule. [EPA-HQ-OAR-2015-0111-2355-A1 p. 5]
Badger State Ethanol
If finalized, EPA's proposal for 2014, 2015 and 2016 RFS requirements would place the key to
our energy future firmly back in the hands of the oil industry. By embracing the 'blend wall'
concept, the proposal effectively destroys the incentive to expand biofuel production and
distribution capacity, and allows oil companies to blend only as much renewable fuel as they are
comfortable using. [EPA-HQ-OAR-2015-0111-1201-A2 p. 2]
1. The ethanol industry has demonstrated that it can produce supplies of renewable fuel
that are adequate to meet the statutory RFS requirements in 2014-2016.
In 2014, the U.S. ethanol industry produced 14.3 billion gallons of ethanol and nearly 14.4
billion D6 RIN credits were generated. This occurred even in the absence of any final RFS
blending requirements, and production certainly could have been higher if the statutory RFS
volumes had been enforced by EPA. Simply put, when ethanol production, ethanol stocks, and
RIN stocks are properly considered, there can be no doubt that supplies were adequate in 2014 to
meet the statutory requirement of 14.4 billion gallons. Similarly, the ethanol industry's 'run rate'
has surpassed 15 billion gallons on numerous occasions in 2015, according to weekly data from
the Department of Energy. As such, the statutory RFS levels of 15 billion gallons could be
readily met in both 2015 and 2016, especially when ethanol stocks and RIN stocks are also taken
into consideration. [EPA-HQ-OAR-2015-0111-1201-A2 p. 2]
According to the U.S. Census Bureau, 836 million gallons of ethanol for fuel use and industrial
use were exported from the United States in 2014. Of this amount, 370.2 million gallons of fuel
and industrial ethanol exports were undenatured, and thus did not ever generate a RIN.
Moreover, 12.5 million gallons of denatured industrial ethanol were exported, and it is unlikely
that RINs were ever generated on this product (i.e., because it is not used as transportation fuel,
heating oil, or jet fuel). Denatured fuel ethanol exports totaled 452.99 million gallons in 2014
and it is safe to assume the RINs generated on this volume have been, or will be, retired and
unavailable for compliance. [EPA-HQ-OAR-2015-0111-1201-A2 p. 3]
Proper accounting of RIN retirements for exported ethanol and non-compliance purposes leads to
a significantly higher RVO for 2014. When the errors committed by EPA regarding accounting
of RIN retirements for ethanol exports are corrected, EPA's determination of 2014 RINs
'available for compliance' with the 2014 standards should increase to approximately 13.62
million RINs—nearly 400 million RINs above the proposed RVO of 13.25 billion gallons. This
significant error has important ramifications for the subsequent years (2015 and 2016) in EPA's
proposed rule. [EPA-HQ-OAR-2015-0111-1201-A2 p. 3]
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Written comments provided by the Renewable Fuels Association (RFA) provide more detail on
this topic. We support the RFA comments and encourage EPA to correct the 2014 RVO as soon
as possible. [EPA-HQ-OAR-2015-0111-1201-A2 p. 3]
We encourage EPA to revisit its assumptions of how much E85, El 5 and MLBs can be
reasonably consumed in 2015 and 2016 and examine how the volumes may change under
various RIN price scenarios. [EPA-HQ-OAR-2015-Oil 1-1201-A2 p. 3]
Countrymark Cooperative Holding Corporation
It appears that EPA accounted for the blendwall in setting the 2014 and 2015 proposed standards
for non-advanced biofuel or corn-based ethanol. The requirement for 2014 mirrors ethanol
consumption of 13.25 billion gallons which equates to 9.7% ethanol in the blend and for 2015,
the proposed 13.4 billion gallons of corn-based ethanol would equate to 9.7% ethanol in the
blend based on EIA projections. [EPA-HQ-OAR-2015-0111-2264-A1 p. 3]
Crimson Renewable Energy LP
The current RFS proposal for renewable volume obligations (RVO), while an improvement over
the proposal announced in 2013, still discourages further investment in advanced biofuels,
including biomass-based diesel, by setting a mandate that is substantially lower than what the
industry can achieve. [EPA-HQ-OAR-2015-0111-1823-Al p.l]
Farmers Cooperative Company
I'm here today to speak against the EPA lowering the proposed renewable volumes obligation set
by the 2007 Energy Independence and Securities Act.
Growth Energy
Therefore, the final rule should adhere to the statutory volume requirements for renewable fuel,
reduced by no more than the proposed cellulosic waiver flow-through, as follows:
• 2014—17.08 bil gal;
• 2015—17.90 bil gal;
• 2016—18.40 bil gal.
These volumes would properly reflect supply regardless of whether EPA correctly interprets the
general waiver provision to refer to the amount of renewable fuel available for obligated parties
to comply with their volume obligations, or incorrectly interprets it to refer to the amount of
blended transportation fuel that can be delivered to vehicles that can use it. [EPA-HQ-OAR-
2015-01 ll-2604-A2p.3]
Although 2014 is long past and 2015 will be nearly over by the time EPA issues its final rule,
imposing volume requirements for those years that are higher than actual net RIN generation
levels is statutorily authorized and reasonable under the circumstances. Doing so, in fact, would
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serve Congress's intent far better than imposing requirements based on actual net RIN generation
during those years, as EPA proposes. [EPA-HQ-OAR-2015-0111-2604-A2 p.56]
Highwater Ethanol, LLC
We have identified a few items below which requires immediate attention on the proposed rule
from the U.S EPA in regards to the renewable fuels standards.
4. The total volume of renewable fuel in the form of ethanol that could be supplied to vehicles as
either E10 or higher ethanol blends given various constraints was not a limiting factor in the
standard-setting process in prior years. The EPA should decouple issues involving advanced
biofuel gallons from the total volume of renewable fuel and maximize the current opportunity to
use conventional biofuels to immediately drive down GHG emissions in the transportation
sector. [EPA-HQ-OAR-2015-0111-2506-A2 p.2]
Illinois Farm Bureau
While Illinois Farm Bureau strongly opposes the agency's proposed RVOs for this year and next
year, compared to the last proposal, at least EPA is proposing to place renewable fuel volumes
on a slightly upward trajectory. Our recommendation is for the agency to establish a much
steeper and easily defensible trajectory for 2015 and 2016 that takes into account the latest
estimates on how much motor fuel will be consumed in the United States and allows for the RIN
market to work as policymakers intended. [EPA-HQ-OAR-2015-0111-3290-A2 p.4]
Independent Fuel Terminal Operators Association (IFTOA)
Specifically, the Association recommends the following: [EPA-HQ-OAR-2015-0111-1947-A1 p.
8]
1. EPA has correctly recognized current market constraints, and the proposed rulemaking for
2014 and 2015 — promulgated pursuant to its waiver authorities — is a reasonable balance
between the market restrictions and incentives for increased production and use of renewable
fuels. The same approach should be adopted for 2016, and the mandated volumes should not
breach the blendwall; [EPA-HQ-OAR-2015-0111-1947-A1 p. 8]
Indiana Farm Bureau
The targets within the RFS2 program have been reduced to 15.93 billion gallons, 2.22 billion
gallons below the statutory framework in the RFS2 law. The proposed rule falls further behind
statutory mandates in the coming years. [EPA-HQ-OAR-2015-0111-2486-A1 p.l]
Iowa Renewable Fuels Association
The members of IRFA recommend that the EPA discard its convoluted misinterpretation of the
"general" waiver authority and maintain the levels for undifferentiated renewable fuel at the
levels prescribed by Congress for 2014, 2015, and 2016 (14.4, 15.0, and 15.0 billion gallons
respectively). [EPA-HQ-OAR-2015-0111-1957-A2 p. 21]
John Deere
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Arguments that consumers are not asking for higher renewable fuel concentrations are
understandable. After all, consumers did not initially ask for E10 fuels, nor did they ask for lead-
free fuels. Rather, appropriate and reasonable economic incentives needed to be established.
Your preamble recognizes this reality. You state that 'Congress set volume targets reflecting
increasing and substantial amounts of renewable fuel use clearly signals that it intended the RFS
program to create incentives to increase renewable fuel supplies and overcome supply
limitations.' It remains imperative that renewable volume obligations not be limited due to an
artificial barrier associated with 'lack of customer demand' and that the incentives contained in
the statutes be allowed to drive behaviors. [EPA-HQ-OAR-2015-0111-2042-A1 p. 1-2]
Kansas Corn Growers Association
EPA's proposed RVO level for ethanol will severely damage not only the conventional ethanol
industry, but also the up and coming cellulosic ethanol industry. We support both types of
renewable, homegrown ethanol, and we are proud to have one of the first operating cellulosic
ethanol plants in the nation in Hugoton, Kansas. Simply put, the rise of the cellulosic ethanol
industry depends on a strong market for conventional ethanol. [EPA-HQ-OAR-2015-0111-3172-
Al p. 1]
Kansas Farm Bureau
Conventional ethanol - Clearly, EPA has specific authorization to partially waive a portion of
the renewable fuels mandate if sufficient volumes are not available, and that waiver authority has
been used repeatedly over the life of the RFS2 with cellulosic ethanol; however, we dispute the
need to also reduce the volumes of conventional ethanol. According to the US Energy
Information Administration, the US produced 14.34 billion gallons of ethanol in 2014 and the
renewable fuels industry has more than enough capacity to produce in excess of the 15 billion
gallons of conventional biofuel prescribed for 2015 and beyond by the RFS2. [EPA-HQ-OAR-
2015-0111-1195-Alp.l]
Marathon Petroleum Company
The EPA should set the biofuel volumes for 2014, 2015, and 2016 at the levels found in the
AFPM/API comments. These volumes were calculated by using actual data and system
constraints to determine a feasible solution that utilizes a high level of biofuels. [EPA-HQ-OAR-
2015-0111-1932-A1 p. 4]
Mass Comment Campaign sponsored by anonymous 13 (web) - (121)
The EPA's proposal for the renewable volume obligations (RVOs) under the Renewable Fuel
Standard (RFS) for 2015 and 2016 fall well below the original targets that were stipulated in the
RFS which is the law of the land. [EPA-HQ-OAR-2015-0111-0106 p.l]
While the EPA points out that there isn't adequate infrastructure at the moment to accommodate
increasing volumes of ethanol, the EPA ignores two fundamental points. [EPA-HQ-OAR-2015-
0111-0106 p.l]
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First, its past and proposed backsliding on the RVOs serves to maintain the infrastructure status
quo for the petroleum industry. To bring about necessary changes, the EPA must stick with the
law and enforce the RFS and the RVO targets. [EPA-HQ-OAR-2015-0111-0106 p. 1]
Mass Comment Campaign sponsored by anonymous 14 (email) - (1339)
I strongly urge you to reconsider your proposed reduction in the baseline 2015 and 2016
renewable volume obligations. Return them to the levels decided upon by Congress in the
Renewable Fuel Standard. [EPA-HQ-OAR-2015-0111-0216-A1 p.l]
Mass Comment Campaign sponsored by anonymous 5 (web) - (386)
The EPA's latest proposal for ethanol volumes for 2014, 2015 and 2016 once again shows that
the mandate doesn't work. [EPA-HQ-OAR-2015-0111-0128 p.l]
With advanced biofuels, such as cellulosic ethanol, still not commercially viable - and minimal
demand for fuel blends with high levels of corn-based ethanol - it is clear that the EPA needs to
do everything in its power to lower the ethanol volumes in the final ruling to lessen the burdens
caused by the broken RFS. [EPA-HQ-OAR-2015-0111-0128 p.2]
Mass Comment Campaign sponsored by anonymous 9 (email) - (230)
I am writing in support of keeping the 2014-2016 Renewable Volume Obligations (RVOs) under
the Renewable Fuel Standard (RFS) intact [EPA-HQ-OAR-2015-0111-0212-A1 p.l]
Mass Comment Campaign sponsored by Adkins Energy LLC (paper) - (120)
I am writing in support of keeping the 2014-2016 Renewable Volume Obligations (RVOs)
under the Renewable Fuel Standard (RFS) intact. [EPA-HQ-OAR-2015-0111-2956-A1 p.l]
If the volumes of biofuel including ethanol blended into the nation's oil supply aren't
increased according to the original Renewable Fuel Standard goals, our country will simply
continue its dangerous dependence on foreign oil and ensure that dirty fossil fuels continue
to pollute our environment. [EPA-HQ-OAR-2015-0111-2956-A1 p.l]
Mass Comment Campaign sponsored by anonymous 19 (email) - (4910)
I urge the EPA to revise its proposed Renewable Fuel Standard volumes further—to the lowest
ethanol-blend levels permissible by law. [EPA-HQ-OAR-2015-0111-0221-A1 p.l]
But until that happens, the EPA should limit the policy to the least possible harm by reducing
fuel blend standards as much as the law will allow. Demand for high ethanol-blend fuel just isnVt
there. [EPA-HQ-OAR-2015-0111-0221-A1 p.l]
Mass Comment Campaign sponsored by anonymous 18 (email) - (7560)
I write today to voice my strong opposition to the proposed expansion of the biofuels mandate
under the Renewable Fuel Standard (RFS). The biofuel mandate should be shelved altogether, or
at least reduced to the greatest extent possible. [EPA-HQ-OAR-2015-0111-0220-A1 p.l]
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At one time, ethanol may have seemed like a promising alternative fuel. Today, America has
plentiful oil and natural gas resources, reducing the need for ethanol. The EPA should take steps
to limit or eliminate the RFS, not expand a policy that we now know is harmful and unnecessary.
[EPA-HQ-OAR-2015-0111-0220-Alp.l]
Mass Comment Campaign sponsored by anonymous 21 (web) - (13)
As a farmer who is producing corn at below the cost of production, I urge you to significantly
increase renewable fuel volumes for 2015 and 2016 and tie it closer to ethanol industry
production levels. [EPA-HQ-OAR-2015-0111-0279 p.l]
Mass Comment Campaign submitted by DuPont employees (web) - (1)
Biofuels volumes for 2014 to 2016 should be set consistent with the statutory levels specified by
Congress putting the U.S. on a path to biofuels volumes significantly higher than a 10% limit. As
proposed, the three-year RFS rule fails this test. [EPA-HQ-OAR-2015-0111-2825 p.2]
Minnesota Bio-Fuels Association (MBA)
Given the investments that have already been made in biofuel production operations, it is
imperative that the EPA provide consistency and certainty with respect to the interpretation and
implementation of the RFS. Biofuel producers are prepared to meet and exceed the volume
targets; however, they need some certainty as is provided in the RFS. Furthermore, any
backsliding with respect to the renewable volume obligations sends a mixed signal to the
marketplace. [EPA-HQ-OAR-2015-0111-1936-A1 p. 10]
The EPA should abandon its attempt to find the boundaries between adequate and inadequate
supplies of biofuels and demand for biofuels and instead enforce and fully implement the RFS.
[EPA-HQ-OAR-2015-0111-1936-Alp.l2]
Minnesota Farm Bureau
The targets within the RFS2 program have been reduced to 15.93 billion gallons, 2.2 billion
gallons below the statutory framework in the RFS2 law. The proposed rule falls even further
behind statutory mandates in the coming years. [EPA-HQ-OAR-2015-0111-2263-A 1 p. 1]
Missouri Corn Growers Association (MCGA)
Furthermore EPA's inconsistent reporting of ethanol volumes blended into gasoline must be
corrected. The error with the greatest impact on RVOs may indeed be EPA's inaccurate
accounting of ethanol that was exported from the United States. Correctly, EPA recognizes that
domestically produced ethanol does indeed reach international markets, helping to fulfill global
air quality and sustainability goals. However, EPA has incorrectly included ethanol
manufactured for beverage or industrial solvent applications as ethanol intended for fuel markets.
EPA reports that a total of 0.846 billion gallons of ethanol was manufactured and subsequently
exported for fuel applications. When actually, the 0.400 billion gallons of this total is ethanol that
is not suitable for fuel applications and has not generated a RIN. We strongly advise EPA to
reconsider the inaccurate practice of considering "all ethanol exports represent D6 ethanol" or
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work with the Department of Energy to further breakdown the information on exported ethanol
by application. [EPA-HQ-OAR-2015-0111-2507-A2 p. 2]
National Chicken Council (NCC)
It should be noted for the record that those volumes "actually produced and used" - i.e., that
were not subject to a final and binding required volume obligation due to EPA missing its
prescribed deadline - represent the highest use to date for corn-based ethanol. It further should be
noted in analyzing the administration of the RFS that EPA's missed deadlines did not result in a
reduced amount of biofuel available in the market as was predicted by the ethanol industry. In
fact, the historic record levels of corn ethanol "actually produced and used" raise the question of
whether the RFS is any longer necessary for the development of the corn ethanol industry in the
United States? [EPA-HQ-OAR-2015-0111-1814-A1 p.2]
To be clear, despite the biofuel industry's characterization of EPA's proposed 2015 and 2016
required volume obligations as reducing ethanol levels based on the benchmark of the volumes
provided by the EISA, those proposed volumes actually increase the ethanol mandate beyond its
record consumption levels. [EPA-HQ-OAR-2015-0111-1814-A1 p.2]
National Farmers Union (NFU)
The preamble to the proposed rule states, 'we do not believe that it would be consistent with the
energy security and greenhouse gas reduction goals of the statute to reduce the applicable
volume of renewable fuel set forth in the statute absent a substantial justification for doing so.'
Ideally, the total renewable fuel standard would include the full advanced biofuel standard
embodied in the EISA. If EPA insists on lowering the advanced biofuel standard, EPA can still
achieve many of the goals of the RFS and pave the path to higher advanced biofuel volume
standards in the future by keeping the total renewable fuel standard at the EISA level and
allowing conventional biofuels to make up the difference. [EP A-HQ-OAR-2015-0111-1657-
Al p. 6]
As discussed above, conventional biofuels emit less GHGs than fossil fuels. GHG emissions
reductions can be achieved by allowing conventional biofuels to make up the advanced biofuel
volume deficit and keeping the statutory total renewable fuels volume standards in place. It
would also push the branded transportation fuel industry to make the adjustments needed to
accommodate greater volumes of advanced biofuels, paving the way to secure the superior GHG
emission advantages of advanced biofuels in the future. [EPA-HQ-OAR-2015-0111-1657-A1 p.
6-7]
The volume standards in the proposed rule do not match the goals EPA claims to pursue through
its execution of the RFS. In the Executive Summary that precedes the Proposed Rule, EPA
asserts that the proposed volume standards 'are expected to spur further progress in overcoming
current constraints in renewable fuel distribution infrastructure, which in turn is expected to lead
to substantial growth over time in the production and use of higher-level ethanol blends and
other qualifying renewables.' [EPA-HQ-OAR-2015-0111-1657-A1 p. 7]
Unfortunately, EPA's expectations are mistaken. EPA fails to consider the severe and difficult-
to-reverse damage done to the biofuels industry through the inexcusable delays in issuing the
2014 volume standards. In light of this damage, it does not make sense that lower volume targets
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than those set forth in the popular, bipartisan statute will lead to growth in production and use of
higher-level ethanol blends. The proposed, lower volume standards demonstrate to industry that
taking steps to increase consumer choice and pursue worthwhile environmental goals can be
avoided, even when mandated by Congress. Instead, holding industry to the proposed targets
would demonstrate the Administration's stable, reliable commitment to biofuels and allow the
biofuels and transportation fuels industries the certainty required to attract capital investment and
build out the infrastructure needed to offer consumers the opportunity to utilize higher-level
ethanol blends. It would allow the parties concerned to plan ahead with more reliability than
annual determinations, bringing more biofuels into the transportation fuel offerings with less
disruption for American consumers. [EPA-HQ-OAR-2015-0111-1657-A1 p. 7-8]
In our view, EPA bought a bogus blend wall problem argument from the oil industry. The oil
industry is the source of any real or imagined blend wall problem by virtue of the fact that they
have failed to make higher retail ethanol blend options available to the consuming public. They
have denied fuel consumers the ability to purchase E85, E30, and El5 blends, and then claimed
there is a blend wall problem. EPA's proposed production targets rewards the oil industry for
dragging their feet on the retailing of higher-grade ethanol blends. [Docket Number EPA-HQ-
OAR-2015-0111-1044, pp. 166-167.]
NUVUFuels, LLC and DENCO II
I am not an attorney so I won't attempt to define the EPA's legal position in reducing the RVO's
below the targets set by congress back in 2007 when the RFS2 was enacted but I certainly
question why the EPA is siding with big oil and attempting to match the RVO's with demand or
projected demand. [EPA-HQ-OAR-2015-0111-2631-A1 p.l]
In closing, please consider putting the RVO's back on track with an RFS program that is based
on available supply and goals to reduce our dependence on foreign oil. [EPA-HQ-OAR-2015-
0111-2631-A1 p.l]
Paul Bertels Farms
To further blame your inability as reason to require a reduction in 2015 volumes is pure hubris.
EPA can easily right this error. Return the 2014, 2015 and 2016 renewable volume obligation for
conventional ethanol back to the statutory levels of 14.4 billion and 15.0 billion gallon,
respectively. [EPA-HQ-OAR-2015-0111-2799-A1 p.2]
Smithfield Foods, Inc.
On June 10, the EPA published a proposed rule (EPA-HQ- OAR-2015-0111) to establish the
2014, 2015, and 2016 renewable volume obligations (RVO) for the RFS. The EPA proposed to
lower the biofuels volumes below the statutory targets 'due to constraints in the fuel market to
accommodate increasing volumes of ethanol, along with limits on the availability of non-ethanol
renewable fuels.' The proposal would lower the total renewable fuel volume below the statutory
guideline from 18.15 billion gallons to 15.93 billion gallons in 2014; 20.5 billion gallons to
16.30 billion gallons in 2015; 22.25 billion gallons to 17.40 billion gallons in 2016.3 For
conventional ethanol, largely derived from corn starch, the implied volume is also below the
recommended statutory guideline for 2014, 2015, and 2016. [EPA-HQ-OAR-2015-0111-2041-
Al p.2]
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Smithfield appreciates EPA's proposal to reduce the conventional biofuels mandate in 2014,
2015, and 2016, and the acknowledgement in 2013 that the RFS needs to be on 'a more
manageable trajectory.'4 However, while this action is a step in the right direction and may
temporarily solve EPA's concerns related to the El0 blendwall, the proposed rule neither
immediately nor permanently reduces the corn ethanol mandate to a degree that prevents the
devastating impact corn ethanol has on food producers and consumers. EPA is justified in its
decision to reduce the RVOs below statutory requirements; however, the proposed RVOs do not
go far enough to address short- or long-term problems created by the RFS. Immediate
Congressional action is needed to repeal the corn ethanol mandate and return grain markets to a
state of normalcy. [EPA-HQ-OAR-2015-0111-2041-A1 p.2-3]
South Dakota Corn Growers Association
Our membership is adamantly opposed to your proposal to reduce the renewable volume
obligations (RVO) for "renewable fuel," the category of the RFS for which corn ethanol
qualifies, from the statutory levels in 2014, 2015 and 2016. [EPA-HQ-OAR-2015-0111-1811-A1
p.l]
Sprague Operating Resources LLC
We are writing to voice our strong support for increasing the Renewable Fuel Standard (RFS)
volumes to be finalized later this year. [EPA-HQ-OAR-2015-0111-1924-A1 p.l]
State of Indiana
Not only do these proposed volume levels hurt my constituents and the residents of this state, Pm
also a farm owner in southeastern Indiana. In both of my roles, I see the struggles our farmers
face every day. [EPA-HQ-OAR-2015-0111-3347-A1 p.l]
The George Washington University
Statutory Authority
Under the Clean Air Act (CAA), as amended by the Energy Policy Act of 2005 (EPAct) and the
Energy Independence and Security Act of 2007 (EISA), EPA sets the annual volume of biofuel
required to meet its renewable fuel standard. Section 21 l(o)(2)(B) of the CAA specifies annual
biofuel targets for EPA's RFS; the volume requirements for 2016, both from the statute and
EPA's proposed rule, are outlined in the table below. [EPA-HQ-OAR-2015-0111-1815-A1
p.3][The table can be found on p. 3 of Docket number EPA-HQ-OAR-2015-0111-1815-A1]
Note: Cellulosic biofuel and biomass-based biodiesel are nested within the 'advanced biofuel'
category, which is itself nested within the 'renewable fuel' category. [EPA-HQ-OAR-2015-0111-
1815-Alp.4]
As can be seen in the above table, EPA's proposed rule increases the overall volume
requirements for renewable fuels from 16.55 billion gallons in 2013 to 17.4 billion gallons in
2016. Cellulosic biofuel and biomass-based diesel (biodiesel) are both advanced biofuels which
are nested within the 'renewable fuel' category. EPA's proposal would set volume requirements
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for these advanced biofuels at 3.4 billion gallons in 2016, a 650 million gallon increase over the
last standards promulgated by the agency for 2013. [EPA-HQ-OAR-2015-0111-1815-A1 p.4]
However, these increases fall short of the statutory applicable volumes for 2016 outlined in the
table above. For all but one fuel type, EPA proposes to set the volume requirement below the
statutory level. [EPA-HQ-OAR-2015-0111-1815-A1 p.4]
The proposed standards for total renewable fuels are 4.85 billion gallons shy of the volume levels
specified in the CAA. [EPA-HQ-OAR-2015-0111-1815-A1 p.4]
Trenton Agri Products LLC
The Proposed RVO's for 2014-2016 are attempts to match the mandates to this 10% blend rate.
This is not consistent with Congressional intent of the RFS. The RVO's for these years should be
re-proposed to match the law, as the supply from grain based ethanol is there. [EPA-HQ-OAR-
2015-0111-1686-Alp.l]
White Energy
The EPA has chosen to change the intent of the RFS based off untruths and roadblocks by some
of the participants of the petroleum industry. In the same breath, the EPA wonders why the
industry isn't doing more to develop advanced biofuels. What business is going to be able to
source capital to invest in the next generation of biofuels if the EPA isn't going to enforce the
RFS of today? Changing the RVO based on perceived inadequate domestic supply is a fallacy.
Changing the RVO on perceived blend wall counteracts incentive, requirement, and guidance to
change the supply infrastructure.
Wisconsin BioFuels Association
The Wisconsin BioFuels Association strongly opposes the proposed Renewable Volume
Obligation for corn ethanol of 13.25 billion gallons in 2014, 13.45 billion gallons in 2015, and 14
billion gallons in 2016. These levels are well below the levels set by Congress and are a clear
attempt to circumvent the law. [EPA-HQ-OAR-2015-0111-2539-A2 p. 1]
We urge the EPA to raise the proposed Renewable Volume Obligation. [EPA-HQ-OAR-2015-
0111-2539-A2p.l]
Wisconsin Corn Growers Association (WCGA)
The WCGA opposes the EPAs proposed Renewable Volume Obligation (RVO) for corn ethanol
of 13.25 billion gallons in 2014, 13.45 billion gallons in 2015 and 14.0 billion gallons in 2016.
These are below the levels Congress set for corn ethanol at 14.4 billion gallons for 2014, and 15
billion gallons for 2015 and 2016. [EPA-HQ-OAR-2015-0111-1830]
Wisconsin Farm Bureau Federation
The Renewable Fuel Standard (RFS), as passed by Congress, called for 18.15 billion gallons of
renewable fuel to be blended in 2014 and in actuality, only 15.93 billion gallons were blended.
The EPA has tried to reestablish a new baseline for renewable fuel blending based on 2014's
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actual blending numbers because they couldn't provide an appropriate proposal in a timely
manner. Instead, the EPA opted for a multi-year proposal approach that is several years late in
being delivered. See table below. [The table can be found on p. 1 of Docket number EPA-HQ-
OAR-2015-0111-1716-A1] [EPA-HQ-OAR-2015-0111-1716-A1 p. 1]
Although the proposal for future Renewable Volume Obligations (RVO) for renewable fuels for
2015 and 2016 shows an increase in blending requirements from 2014's actual numbers, the
mandates still fall significantly short of statutory levels within the RFS approved in 2007. [EPA-
HQ-OAR-2015-0111-1716-A1 p. 1]
Response:
As described in Section II.E.2.i of the final rule, the E10 blendwall is viewed differently by
different stakeholders. Some stakeholders, most notably refiners, expressed the belief that the
constraints on sales of higher ethanol blends such as El 5 and E85 are so substantial, and the time
available to address those constraints for 2016 is so limited, that exceeding a pool-wide ethanol
content of 10% is either unattainable or could occur only at great cost with corresponding
increases in fuel prices and disruption to fuel supplies. Other stakeholders, primarily ethanol
proponents, instead argued that substantially higher volumes of E15 and/or E85 can be reached
in 2016 with available infrastructure, despite insufficient efforts in the past to expand
infrastructure for E15 and E85. These stakeholders generally argued that higher standards would
result in higher RIN prices, which in turn would result in greater price discounting for El5 and
E85 in comparison to E10 and thus higher sales of those higher level ethanol blends. They
further argued that higher RIN prices, even if significant, would not result in higher fuel prices to
consumers.
Our view of the E10 blendwall falls between these two viewpoints. We believe that there are
real constraints on the ability of the market to exceed a pool-wide ethanol content of 10%.
However, these constraints do not have the same significance at all levels above 10% ethanol.
Instead, for the state of infrastructure that can be available in 2016, the constraints represent a
continuum of mild resistance to growth at the first increments above 10% ethanol and evolve to
significant obstacles at higher levels of ethanol. This gradual nature of the impacts of the
constraints is due to the fact that small increases in ethanol volumes above 10% are likely to be
possible with changes in RIN prices, while larger increases are only possible with changes to
infrastructure that cannot occur as quickly. The transition from mild resistance to significant
obstacles occurs by degrees rather than all at once, and overcoming the constraints will likely
require different solutions over different time periods. It is difficult to identify the precise
boundary between volumes that can be achieved with mild difficulty in 2016 and those that
likely cannot realistically be achieved over the next year. Ultimately the market will determine
the extent to which compliance with the annual standards is achieved through the use of greater
volumes of ethanol or other, non-ethanol renewable fuels.
In short, the E10 blendwall is not the barrier that some stakeholders believe it to be, but neither
are increases in pool-wide ethanol concentrations above 10% unlimited in the 2016 timeframe as
other stakeholders have suggested. Expanded use of E15 and E85 is possible under the influence
of the final volume requirement for total renewable fuel that we are setting for 2016, but our
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analysis has determined that the volumes of El 5 and/or E85 that would be needed to reach the
statutory targets are not achievable in 2016.
Another reason that the E10 blendwall is not the barrier that some stakeholders make it out to be
is that it is focused solely on ethanol. Many of the comments on both sides of the debate focus
on ethanol, but there is nothing in the statute that requires the use of ethanol, and there is no
reason that the E10 blendwall by itself should limit the total volumes of renewable fuels. The
E10 blendwall may create a challenge toward increasing volumes of ethanol, but growth in other
biofuels is not only possible but expected within the capabilities of their markets. It is primarily
on the basis of these non-ethanol biofuels that we are able to finalize a total renewable fuel
standard that is more than 4 billion gallons beyond the volume of ethanol that can be blended as
E10.
Because of the constraints associated with the blendwall, as well as other constraints on ethanol
and non-ethanol biofuels as described in Section II.E.l of the final rule, renewable fuel
production capacity is not the only relevant criterion in determining the level of qualifying
renewable fuel supply that is achievable in 2016. Indeed, based on a consideration of production
capacity alone, significantly higher volume requirements than we are finalizing today would be
possible for both biodiesel and ethanol. However, not all of that production could qualify under
the RFS program, and stakeholders who took this view generally disregarded the importance and
influence of the many constraints on the supply of qualifying renewable fuel volumes. As
described in Section II.E.l of the final rule, these constraints are real and make the statutory
targets unattainable in 2016. Moreover, a myopic consideration of only production capacity
would increase uncertainty rather than decrease it, as described in Section 2.1.2. Finally, many
of the same stakeholders who believed that the statutory targets can be achieved also pointed to
the use of carryover RINs in support of their views, effectively agreeing that supply of renewable
fuel is insufficient to meet the statutory targets.
One stakeholder suggested that we should maximize the requirement for conventional renewable
fuel in order to quickly generate GHG reductions. To begin with, the statute does not provide a
volume requirement for conventional renewable fuel. Instead, it established applicable volumes
for total renewable fuel, and applicable volumes for advanced biofuel which is nested within the
requirement for total renewable fuel. The so-called conventional renewable fuel volume is that
portion of total renewable fuel which is not required to be advanced biofuel, though advanced
biofuels could be used to meet it. Regardless, increases in volumes of advanced biofuels will
provide greater GHG emission reductions than increases in conventional renewable fuels,
particularly because much of the current conventional renewable fuel pool is composed of fuel
that is grandfathered under §80.1403 and is thus not required to meet the GHG reduction
threshold of 20% that is otherwise required under the statute.
In making a determination of the 2016 volume requirement for total renewable fuel under the
general waiver authority, we have sought to identify the highest level that is reasonably
achievable given a consideration of all factors that affect supply of renewable fuel to the vehicles
and engines that can use it. In making a determination of the 2016 volume requirement for
advanced biofuel under the cellulosic waiver authority, we have sought to set the volume
requirement to reflect reasonably attainable levels. Consistent with the fact that all increases in
the statutory targets after 2014 are in advanced biofuel, our intention has been to place an
emphasis on increasing the advance biofuel volume requirement to a level that is reasonably
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attainable given the GHG-reduction goals of the RFS program and the superior performance of
advanced biofuels in comparison to conventional renewable fuels in achieving GHG reductions.
If we were to place an emphasis on conventional renewable fuel as suggested, it would mean
either increasing the total renewable fuel volume requirement higher than the maximum level of
supply that we have determined is achievable, or reducing the volume requirement for advanced
biofuel below the level that we believe is appropriate. Given that advanced biofuel are required
to produce greater GHG reductions that conventional renewable fuel, this approach would run
counter to the stakeholder's suggestion as well as counter to the statute's focus on increases in
advanced biofuel after 2014.
One stakeholder suggested that growth in the cellulosic biofuel industry depends on a strong
market for conventional renewable fuels, implying that the "requirement" for conventional
renewable fuel should be increased above the proposed level to this end. As described above, we
are setting the 2016 total renewable fuel volume requirement at the highest level that we believe
is reasonably achievable. We expect that by doing so, the RFS program will provide the support
that the cellulosic biofuel industry is seeking. Furthermore, cellulosic biofuel growth is not
dependent on growth in corn ethanol alone. Cellulosic biofuel need not be ethanol, and need not
come from the same feedstocks as ethanol. In fact, the vast majority of cellulosic biofuel in 2015
and projected to be available in 2016 is biogas, not ethanol.
For responses to comments on the use of the cellulosic waiver authority, see Section 2.2.1.
For responses to comments on the use of the general waiver authority, see Section 2.2.2.
For responses to comments on whether the statutory volume requirements can be reached in
2014, 2015, or 2016, see Section 2.2.4.
For responses to comments on how the RIN mechanism operates to subsidize the cost of
renewable fuels at retail, see Section 2.3.2.
For responses to comments on how 2014 exports of ethanol were calculated in the NPRM, see
Section 2.4.1.
For responses to comments on gasoline demand and its role in determining the E10 blendwall,
see Section 2.6.1.
For responses to comments suggesting that obligated parties have failed in their statutory
responsibilities to invest in the infrastructure needed to expand renewable fuel supply, see
Section 2.7.1.
For responses to comments on the ability of the 2016 market to substantially increase sales of
E15 and E85, see Sections 2.6.2 and 2.7.1, respectively.
For responses to comments on the role of carryover RINs in the RFS program and suggestions
that they could be used to increase the volume requirements, see Section 6.
For responses to comments on the petition process for new RIN-generating pathways, see
Section 10.6.3.
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Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.2.2.1: Inadequate Domestic Supply
Section 2.3.1: Congressional intent to increase volumes
Section 2.4.2: Proposed Volumes for 2015
Section 2.4.3: Proposed Volumes for 2016
Section 2.6.2: Assumptions of Zero Volumes for EO and El 5
Section 2.8: General comments on proposed advanced biofuel volume requirements
Section 2.9: General comments on proposed total renewable fuel volume requirements
Section 2.9.1: Comments Supporting higher volumes
Section 4.1: General Comments on Cellulosic Biofuels
Section 5.2: EIA projections of gasoline and diesel
Section 7.3: Fuels Industry Impacts (oil refineries, biofuel facilities)
Section 7.6: Energy Security
Section 8: Environmental Impacts of the Proposed Rule
Section 8.2: Climate Change (GHG Impacts)
2.4.1 Proposed Total Renewable Fuel Volume for 2014
Comment:
Abengoa Bioenergy
EPA's proposed methodology for setting the 2014 and 2015 RVOs based on available RINs
generated during the year is arbitrary. The exclusion of consideration of carryover RINs is also
arbitrary. As EPA notes, the availability of RINs in 2014 is dependent on settling the 2013
obligations, which the Agency has delayed at the request of obligated parties. EPA cannot use its
unconscionable and arbitrary delays as justification for excluding consideration of carryover
RINs. Instead, the Agency must set the 2014 and 2015 RVOs based on the full availability of
RINs and without setting artificial and unwarranted limits based on purported infrastructure
constraints. Otherwise, EPA risks creating a regulatory structure that effectively makes Clean Air
Act compliance by Obligated Parties voluntary rather than compulsory. [EPA-HQ-OAR-2015-
0111-2474-A1 p.5-6]
The Agency drafted its proposed 2014 volumes, presented in TABLE II.C.1-1 in the proposal,
using March 2015 data from EMTS as well as export data from EIA.8 However, since that time,
the availability of RINs for 2012, 2013, 2014, and 2015 shown in EMTS has changed
considerably, even as demonstrated by EPA's posting of April 2014 EMTS data to the docket. A
one-time snapshot of EMTS data is therefore an inherently inaccurate estimate of the availability
of RINs for compliance for 2014 and 2015. [EPA-HQ-OAR-2015-0111-2474-A1 p. 13]
EPA excludes consideration of 'RINs retired for reasons other than compliance with the annual
standards, as these RINs are not available to obligated parties." Since the Agency did not post to
the docket the March 2015 data it used in calculating the 2014 RIN supply, it is impossible for
stakeholders to guess how it arrived at volume corrections. If EPA excludes RINs retired for
Enforcement Obligations, Remedial Action - Retirement Pursuant to 80.143 l(c), and
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Remediation of Invalid RIN Use for Compliance, then it is unjustified. By definition such RINs
were retired by obligated parties and were therefore available to them. [EPA-HQ-OAR-2015-
0111-2474-A1 p.13]
8 Id. at 33122.
Advanced Economic Solutions (AES)
The EPA proposal to reduce the renewable volume obligations (RVOs) below statutory levels
during 2014-15 is warranted and appropriate. Without EPA's adjustments, the scheduled
increase in the RVOs would result in higher gasoline and diesel fuel prices. Additionally, left
unchanged the mandates would create further upward pressure on the primary feedstock used to
produce the required biofuels - corn for ethanol and soyoil for biodiesel. [EPA-HQ-OAR-2015-
0111-1193-A1 p.l]
EPA Proposed Mandate Levels for 2014 and 2015: AES generally agrees with the EPA proposed
RVOs for both 2014 and 2015. [EPA-HQ-OAR-2015-0111-1193-A1 p.l]
The RVOs proposed for 2014 simply reflect the reality of what transpired in 2014. [EPA-HQ-
OAR-2015-0111-1193-A1 p.l]
For both years, the proposed overall RVOs are below the statutory levels prescribed in EISA.
The 2014 proposed RVO is 2.22 B gallons below the original statutory level [EPA-HQ-OAR-
2015-0111-1193-Alp.l]
These reductions to lower levels than dictated by EISA during 2014 and 2015 are fully justified -
for conventional biofuels by the challenge of the blend wall; for advanced biofuels by the
combined challenge of a lack of commercial production of cellulosic ethanol, as well as
limitations in feedstock (vegoil) availability for biodiesel. The EPA is to be applauded for their
astute response to the 2014 and 2015 market limitations. [EPA-HQ-OAR-2015-0111-1193-A1
p.l]
AL-Corn Clean Fuel
2. EPA's proposal grossly underestimates the volume of 2014 RINs that will be available to
obligated parties for compliance with 2014 standards.
EPA states that its intent is to base the 2014 RVO requirement on the 'number of RINs supplied
in 2014 that are expected to be available for use in complying with the standards.' EPA explains
that the number of RINs expected to be available for compliance is determined by:
1) Starting with total RINs that were 'generated for renewable fuel produced or imported in
2014 as recorded in the EPA-Moderated Transaction System (EMTS)';
2) Subtracting RINs 'that have already been retired for non-compliance reasons';
3) Subtracting RINs that 'would be expected to be retired to cover exports of renewable
fuels.'[EPA-HQ-OAR-2015-0111-1214-A2p.2]
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According to EPA, this three-step process results in a determination of the 'net supply' of RINs
that are 'available for use' in complying with the 2014 standards. However, EPA mistakenly
assumes RINs will be retired for every gallon of ethanol exported in 2014, even though RINs
were never generated for nearly half of 2014 ethanol exports. EPA incorrectly subtracts the total
volume of 2014 exports from gross RIN generation, when in fact RINs were not generated—and
thus cannot be retired—for approximately 370-390 million gallons of exported ethanol that was
not ever denatured. The RFS regulations require that ethanol must be denatured in order to
generate a RIN and qualify as 'renewable fuel.' [EPA-HQ-OAR-2015-0111-1214-A2 p.2]
American Coalition for Ethanol (ACE)
EPA has made an accounting error by assuming RINs will be retired on all ethanol exports in
2014, approximately 836 million gallons. In fact, nearly 400 million gallons of exported ethanol
in 2014 did not generate RINs and therefore should not be subtracted from the calculation of net
supply of RINs available for compliance with the 2014 RVO. As a result, net supply of RINs
available for compliance in 2014 should be closer to 13.7 billion gallons than the EPA's estimate
of 13.25 billion gallons. [EPA-HQ-OAR-2015-Oil 1-2543-A2 p. 5]
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
The Agency must address this uncertainty by finalizing the 2014 percentage standards as
indicated on table above and without additional adjustments. [EPA-HQ-OAR-2015-0111-1948-
Al p. 17] [Table can be found on page 17 of docket number EPA-HQ-OAR-2015-0111-1948-
Al.]
Archer Daniels Midland Company (ADM)
We believe the export volumes are significantly overstated. EPA assumes that almost all
exported volumes generated and retired a RIN. However, not all renewable fuels generate a RIN,
and EPA cannot be certain that all reported exports of renewable fuels are eligible under the
RFS. According to Department of Commerce data, almost half of the 846 million gallons of
ethanol exported in 2014 were undenatured ethanol and never generated a RIN. That correction
alone could account for an additional 370 million gallons. Further, a percentage of gallons that
went to export would have been consumed domestically if the original 2014 RVO proposal
reflected the RFS mandated levels. [EPA-HQ-OAR-2015-0111-2262-A1 p. 5]
Biotechnology Industry Organization
EPA has not reasonably and persuasively demonstrated that actual 2014 volumes of advanced
and total renewable fuels, plus carryover RINs, will be inadequate to meet the 2014 RFS RVOs.
[EPA-HQ-OAR-2015-0111-1958-A2 p. 26]
As EPA has said (particularly referring to advanced biofuel volumes), maintaining statutory
renewable fuel volumes "will result in reduced GHG emissions from the transportation sector
and could also contribute to energy security objectives. We do not believe it is appropriate to
forgo such benefits when they are physically achievable."102 [EPA-HQ-OAR-2015-0111-1958-
A2 p. 26]
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the availability of RINs for 2012, 2013, 2014, and 2015 shown in EMTS has changed
considerably, even as demonstrated by EPA's posting of April 2014 EMTS data to the docket. A
one-time snapshot of EMTS data is therefore an inherently inaccurate estimate of the availability
of RINs for compliance for 2014 and 2015. [EPA-HQ-OAR-2015-0111-1958-A2 p. 57]
If EPA excludes RINs retired for Enforcement Obligations, Remedial Action - Retirement
Pursuant to 80.143 l(c), and Remediation of Invalid RIN Use for Compliance, then it is
unjustified. By definition such RINs were retired by obligated parties and were therefore
available to them. [EPA-HQ-OAR-2015-0111-1958-A2 p. 57]
102 EPA, Regulation of Fuels and Fuel Additives: 2013 Renewable Fuel Standards, 78 Fed. Reg.
9281, 9300 (Feb. 7, 2013) (proposed rule), available at http://www.gpo.gov/fdsys/pkg/FR-2013-
02-07/pdf/2013-02794.pdf (emphasis added); see also 2013 RFS Final Rule 49794 (maintaining
statutory advanced biofuel and total renewable fuel volumes for 2013).
Countrymark Cooperative Holding Corporation
In November 2013, EPA proposed the 2014 Standards for the Renewable Fuels Standard. This
rulemaking was never finalized; however, this was CountryMark's planning basis for RFS
compliance for 2014. The new proposed 2014 standards are different than those proposed in
2013 as outlined by the Table 1 below. [EPA-HQ-OAR-2015-0111-2264-A1 p. 2]
[The table can be found on p. 3 of Docket number EPA-HQ-OAR-2015-0111-2264-A1]
CountryMark nor any company should be financially penalized because EPA did not set the
compliance standards in a timely fashion. Therefore, we recommend that the 2014 standards
remain the same as those proposed in November 2013 which is closer to the intended
timeline set by the law. [EPA-HQ-OAR-2015-0111-2264-A1 p. 3]
We recommend that the 2014 standards remain the same as those proposed in November
2013. This was the planning case that we used for compliance strategy and is closer to the
intended timeline set by the law. Changing the obligation after the fact will penalize
CountryMark by over $1 million. [EPA-HQ-OAR-2015-0111-2264-A1 p.8]
DuPont
In addition to carryover RINs, the 2014 and 2015 volumes should account for some portion of
exports that would have been blended in the U.S. fuel supply if EPA had set the RVO's as the
statute requires. According to the Energy Information Administration (EIA) monthly supply data
through December 2014, U.S. exports of fuel ethanol in 2014 reached their second-highest level
at a total of 826 million gallons. This level was second only to the 1.2 billion gallons exported
during 2011 and 33% more than exports of fuel ethanol in 2013. Given this data, the U.S.
exported approximately 205 million gallons of ethanol in 2014 that should be accounted for in
the RVO. A similar projection for 2015 exports should be accounted for in the 2015 RVO. [EPA-
HQ-OAR-2015-0111-1826-A1 p.17]
Given the quantity of carryover RINs and the volume of exports for 2014 and 2015, DuPont
recommends that EPA set the 2014 Total Renewable Fuel Volume at 16.433 billion gallons and
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the 2015 Total Renewable Fuel Volume at a value higher than 17.606 billion gallons depending
on the cellulosic ethanol RVO. [EPA-HQ-OAR-2015-0111-1826-A1 p.17]
East Kansas Agri-Energy, LLC (EKAE)
We are located in Garnett Kansas, a rural community of about 3,000 people. I am here today to
support keeping 2014 Renewable Volume Obligation (RVO) as required as part of the
Renewable Fuel Standard and hope you consider my comments when making your
determination. [EPA-HQ-OAR-2015-0111-2607-A2 p.l]
Governor of Iowa, et al.
Further, we understand that the ethanol industry's "run rate" has surpassed 15 billion gallons on
numerous occasions in 2015, according to the Department of Energy. As such, the statutory RFS
levels of 15 billion gallons could be readily met in both 2015 and 2016, especially when ethanol
stocks and RIN stocks are also taken into consideration. In addition, properly accounting of RIN
retirements for exported ethanol and non-compliance purposes would lead to a significantly
higher RVO for 2014. When the errors committed by EPA regarding accounting of RIN
retirements for ethanol exports are corrected, EPA's determination of 2014 RINs "available for
compliance" with the 2014 standards should increase to approximately 13.62 billion RINs—
nearly 400 million RINs above the proposed RVO of 13.25 billion gallons. This significant error
has important ramifications for the subsequent years (2015 and 2016) in EPA's proposed rule.
The gradually increasing RFS levels remain an important part of diversifying our nation's
transportation fuels, reducing carbon emissions, and lowering fuel costs at the pump. [EPA-HQ-
OAR-2015-0111-1915-A1 p.1-2]
Growth Energy
EPA miscalculated the actual net D6 RIN generation in 2014.35° Specifically, as the Renewable
Fuels Association has pointed out, EPA erroneously assumed that a D6 RIN was generated on all
846 mil gal of exported ethanol and that all of those RINs would be retired and unavailable for
compliance, when in fact much of that volume did not generate a RIN, including 370 mil gal of
un-denatured ethanol.351 EPA seems to have recently acknowledged that it erred in this regard.352
Because EPA subtracted the entire volume of exported ethanol from the volume of produced and
imported ethanol to determine net D6 RIN generation for 2014,353 correcting this error would
increase 2014 net D6 RIN generation by at least 370 mil, and would raise total 2014 net RIN
generation to 16.3 bil.354 [EPA-HQ-OAR-2015-Oil 1-2604-A2 p.60]
350 See POET Comment on EPA's Proposed 2014-2016 Standards for the Renewable Fuel
Standard Program, EPA-HQ-OAR-2015-0111, at 23 (July 27, 2015) ("POET July 27
Comments").
351 See Renewable Fuels Association, 2014 U.S. Ethanol Exports and Imports, Statistical
Summary, at 1 (2015) ("Denatured ethanol for fuel use accounted for 54% of total exports in
2014, while undenatured ethanol for fuel use made up 43%. Denatured and undenatured ethanol
for other industrial use totaled 3%."), at http://www.ethanolrfa.org/page/-/rfa-association-
site/studies/2014%20U.S.%20Export-Import%20Report.pdf?nocdn=l.
352 Memorandum from David Korotney to EPA Air Docket EPA-HQ-OAR-2015-0111-1219,
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"Calculation of ethanol export estimates for 2014" (July 24, 2015).
353 2014 RIN Supply, EPA-HQ-OAR-2015-0111-0004.
354 16.3 = 15.93+0.37.
Illinois Farm Bureau
The targets within the RFS2 program have been reduced to 15.93 billion gallons, 2.22 billion
gallons below the statutory framework in the RFS2 law. [EPA-HQ-OAR-2015-0111-3290-A2
p.l]
Iowa Corn Growers Association (ICGA)
"Because 2014 is "history," EPA proposed using its own EMTS (the agency's system of
monitoring RINs transactions) for determining the "RVOs that already happened" for 2014.
Sounds easy, right? Using our own experience with the massively complex EMTS, and working
with clients who are expert RIN traders, we have found a number of substantial potential errors
in the figures published by EPA on May 29, 2015. Two of the largest are as follows: Exported
ethanol is of two types, denatured and un-denatured. The first has its generated RINs retired
before export, and the second does not generate a RIN at all (it is like drinking ethanol, and must
have Treasury Department permits and inspection). EPA does not seem to make this distinction,
which means that their export RINs number of 0.846 billion gallons in line e (see chart below)
should be only 0.466 million gallons.
Iowa Renewable Fuels Association
Iowa Confirms: The "Not Exported" RINs [EPA-HQ-OAR-2015-0111-1957-A2 p. 5]
At the Kansas City field hearing, EPA heard testimony regarding an error in the "net supply" of
RINs available for use in complying with the 2014 standard.18 Given the Agency's intent to set
the 2014 standard based on the amount of RINs supplied in 2014 and available for use, this error
directly and materially impacts the proposed RFS level for 2014. The error arises from the
mistaken assumption that RINs were generated for all gallons of fuel ethanol exported, and
therefore, those RINs must be retired. [EPA-HQ-OAR-2015-0111-1957-A2 p. 5]
Upon learning of this error at Kansas City, IRFA polled its members to see if, in fact, any had
produced undenatured fuel ethanol for export in 2014 and had not generated RINs (as the
regulations require). A large number of Iowa ethanol producers confirmed that fact.19 They
produced fuel ethanol for export in 2014. For certain export markets, the fuel ethanol was
undenatured, meaning these plants never generated RINs on those gallons. Therefore, there are
no RINs on these gallons that need to be subtracted out of the available supply for 2014. [EPA-
HQ-OAR-2015-0111-1957-A2p. 5]
Nearly 400 million more RINs were produced in 2014 and available for compliance by obligated
parties than was assumed by EPA. IRFA encourages the EPA to correct this error and to, at a
minimum, increase the 2014 RFS level by the corresponding amount. [EPA-HQ-OAR-2015-
0111-1957-A2p. 5]
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18 Cooper, Geoff. "EPA Hearing on 2014-2016 RFS Proposal." Renewable Fuels Association 25
Jun 2015 http://ethanolrfa.3cdn.net/7b561fd0026e2097a7 uem6bnzre.pdf
19 Various emails communications between IRFA and member plants.
Paul Bertels Farms
A detailed analysis of the proposal also shows that the Agency used a faulty assumption in
determining 2014 actual volumes produced or accruing RINs. EPA states "since EIA does not
distinguish exports by D code, we assumed based on past practice that all ethanol exports
represent D6 ethanol... We expect any errors introduced by this assumption will be very small."
Closer examination of industry practices would have indicated that un-denatured ethanol does
not generate RINs. Assuming these gallons had RINs and subsequently reducing the total volume
produced led you to reduce the net supply of D6 RINs by almost 400 million gallons. [EPA-HQ-
OAR-2015-0111-2799-A1 p. 1-2]
Poet, LLC
EPA states that it is proposing to base the 2014 RVOs on the "number of RINs supplied in 2014
Q9
that are expected to be available for use in complying with the standards." The NOPR further
states that "Because 2014 has passed, the final rule cannot alter" 2014 volumes of renewable
fuel.93 However, EPA fails to recognize that the 2014 RVO can significantly impact RIN prices
that can spur investment now, and the large volume of banked RINs. And certainly banked RINs
are "available for use."
At a minimum, the 2014 Base Renewable target should be increased by the volume of D6 RINs
retired due to exports, which can be readily accommodated by a modest draw-down from the
RIN bank. In other words, at a minimum, EPA should add back in export volumes that EPA
deducted when setting the 2014 target. Exported D6 volumes would have been used domestically
had EPA timely set the 2014 Base Renewable target to incentivize the increased use of ethanol
blends above E10 (such as E85 and El 5). [EPA-HQ-OAR-2015-0111-2481-A1 p.22]
92
NOPR at 33,121 (emphasis added).
93 NOPR at 33,105.
Renewable Fuels Association (RFA)
EPA incorrectly subtracts the total volume of 2014 exports from gross RIN generation, when in
fact RINs were not generated—and thus cannot be retired—for a minimum of 370 million
gallons of exported ethanol (and a maximum of 393 million gallons). The RFS regulations
require that ethanol must be denatured in order to generate a RIN and qualify as "renewable
fuel."22 Further, exporters of undenatured ethanol do not incur an exporter RVO because they are
not exporting "renewable fuel" as defined by 40 CFR 80.1401. [EPA-HQ-OAR-2015-0111-
1917-A1 p. 17]
The EMTS web site shows total D6 RIN generation of 14,354 million RINs, compared to 14,345
million RINs shown in the docket worksheet.23 Further, it is unclear what RIN retirements may
be included in the category labeled as "corrections" in the docket worksheet. The docket
worksheet shows 249 million RINs being unavailable due to "corrections," yet the EMTS web
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site shows just 14.2 million D6 RINs in the "RIN generation error corrections" category. [EPA-
HQ-OAR-2015-0111-1917-A1 p. 18]
99 _
The definition for "renewable fuel" in 40 CFR 80.1401 specifies that "Ethanol covered by this
definition shall be denatured as required and defined in 27 CFR parts 19 through 21."
23 EPA. RFS2 EMTS Informational Data, http://www.epa.gov/otaq/fuels/rfsdata/2014emts.htm,
viewed 7/18/2015.
EPA. RFS2 EMTS Informational Data, http://www.epa.gov/otaq/fuels/rfsdata/2014emts.htm,
viewed 7/18/2015.EPA. RFS2 EMTS Informational Data.
http://www.epa.gov/otaq/fuels/rfsdata/2014emts.htm, viewed7/18/2015.
Syngeta
In 2014, the U.S. ethanol industry produced 14.3 billion gallons of ethanol and nearly 14.4
billion D6 FUN credits were generated. This occurred even in the absence of any final RFS
blending requirements, and production certainly could have been higher if the statutory RFS
volumes had been enforced by EPA. Simply put, when ethanol production, ethanol stocks, and
RIN stocks are properly considered, there can be no doubt that supplies were adequate in 2014 to
meet the statutory requirement of 14.4 billion gallons. [EPA-HQ-OAR-2015-0111-2493-A1 p.2]
The Andersons, Inc.
The calculated method EPA used to determine the 2014 RVO was flawed in that there was a
deduction of all exported ethanol from the total 2014 ethanol blended, in spite of the fact that the
386 million gallons of undenatured ethanol that was exported will not retire RINS because RINS
are never generated in the first place for undenatured ethanol shipments. [EPA-HQ-OAR-2015-
0111-2275-A2p. 3]
Response:
As described in Section II. C of the final rule, some stakeholders indicated that they believed we
had erred in assuming that all exported ethanol was denatured in the U.S., and had RINs
generated for it prior to export. Based on these comments and further investigation into the
manner in which the Census Bureau data are collected, we believe that the Census Bureau survey
data are likely to be more reliable than we previously believed with regards to whether exported
batches were denatured or undenatured. That is, we believe the Census Bureau data provides the
best information available on the amount of denatured versus undenatured ethanol that was
exported in 2014. Therefore, the volume of undenatured ethanol the Census Bureau reported as
exported in 2014 should not be subtracted from the total number of RINs generated for fuel
ethanol in 2014 for purposes of calculating the available supply of renewable fuel for 2014. We
have made this correction to the calculation of 2014 supply by only subtracting the
approximately 460 million gallons of exported denatured ethanol from those generated in 2014,
rather than the full volume of about 810 million gallons of denatured and undenatured ethanol
exported.
Some stakeholders indicated that the data available in EMTS regarding 2014 RIN generation and
retirements has changed since the time that EPA did its calculations of 2014 REST supply for the
NPRM. This is true. More specifically, data on RIN retirements for circumstances other than
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for compliance (such as errors in RIN generation and remediation of invalid RINs) is
periodically updated to reflect new information. This process can cause the estimate of RIN
supply for 2014 to change slightly throughout 2015. For the purposes of this final rule, we have
used more recent information from EMTS than was used for the NPRM, resulting in a very small
change to the estimates of 2014 supply and thus the 2014 volume requirements. However, we
cannot guarantee that additional changes will not be made to the record of RIN retirements for
2014 after this final rule is released.
One stakeholder said that it would be inappropriate to exclude from the overall supply of 2014
RINs any RINs that were retired to address remedial actions in connection with an enforcement
obligation. We disagree. 2014 is over and there is no ability to generate any more 2014 RINs.
Therefore, any RINs removed from the market for any reason other than for demonstrating
compliance either with the applicable percentage standards or with an exporter's RVO are by
definition not available for use in demonstrating compliance with the applicable percentage
standards or with an exporter's RVO. RINs retired to address a remedial action in connection
with an enforcement obligation are intended to correct for some violation of the regulations that
would otherwise lead to more RINs being available for compliance than the renewable fuel
actually used in the U.S. as transportation fuel, heating oil, or jet fuel. By subtracting RINs from
the total number of RINs generated those RINs retired to address remedial actions in connection
with an enforcement obligation, we ensure that the pool of RINs available for compliance
accurately represents renewable fuel used in the U.S. as transportation fuel, heating oil, or jet
fuel.
Some obligated parties argued that their operations for 2014 vis-a-vis acquisition of RINs were
based on the standards that were proposed in the November 29, 2013 NPRM, and that it would
be inappropriate for EPA to set final applicable percentage standards for 2014 now that are more
stringent than those proposed in November 2013. Other obligated parties claimed that they had
used the applicable 2013 percentage standards for this purpose, as they were the only standards
that were in the regulations in 2014, and likewise argued that the EPA should set the final
percentage standards for 2014 no higher than the 2013 percentage standards. We
disagree. Obligated parties have always been aware that the final volume requirements can
differ from those proposed, and moreover the November 2013 NPRM explicitly provided both a
range of possible volume requirements as well as an indication that the final volume
requirements could include a modification of those ranges. More importantly, we are setting the
applicable volume requirements for 2014 at levels consistent with the number of RINs generated
in 2014 that are available for compliance. Thus we expect the total number of RINs available for
compliance to be the same, or nearly so, as the volume requirements that we are setting for 2014
in this final rule. While it is true that the 2014 RINs available for compliance may not currently
be distributed among obligated parties according to their individual compliance obligations, they
are nevertheless available for compliance, and obligated parties can buy and sell RINs in order to
ensure compliance. Obligated parties can also carry a deficit into 2015 if they did not carry a
deficit in 2014, permitting a longer time period over which they can make arrangements to
acquire RINs from those parties who have more than they need. This process is exactly how the
RIN system was designed to operate when originally established in 2007.
Some parties argued that all RINs retired to address exports of renewable fuels should be
counted as being available for compliance, and thus should not be subtracted from the pool of
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RINs generated in 2014. Parties taking this position argued that, had the 2014 standards been in
place by the statutory deadline of November 30, 2013, at least some of the RINs retired for
exports would instead have been used for compliance purposes. We disagree. While it is
theoretically possible that qualifying renewable fuel that was exported in 2014 might instead
have been used in the U.S. had the applicable standards been in place, it would nevertheless be
inappropriate to identify exported renewable fuel as being available for compliance now since
the standards that we set now cannot cause a change in 2014 exports.
Some stakeholders argued that we had arbitrarily reduced the 2014 volume requirements below
the statutory targets by arbitrarily excluding consideration of carryover RINs. We disagree. We
considered whether it was appropriate to increase the 2014 volume requirements above
renewable fuel supply in 2014 by intentionally drawing down the bank of carryover RINs, and
determined that it would not be appropriate to do so. For responses to comments on the role of
carryover RINs in the RFS program and suggestions that they could be used to increase the
volume requirements, see Section 6.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.2: Statutory Authorities for Reducing Volume Targets
Section 2.2.2.1: Inadequate Domestic Supply
Section 2.4.2: Proposed Volumes for 2015
Section 3.2.1: Availability of Feedstocks
Section 4.1: General Comments on Cellulosic Biofuels
Section 7.2: Agricultural Impacts (food, animal feed, crops, feedstock)
Section 7.5: Retail Fuel Prices
Section 7.6: Energy Security
Section 10.2.2: Statutory Deadlines
2.4.2 Proposed Total Renewable Fuel Volume for 2015
Comment:
Advanced Economic Solutions (AES)
The EPA proposal to reduce the renewable volume obligations (RVOs) below statutory levels
during 2014-15 is warranted and appropriate. Without EPA's adjustments, the scheduled
increase in the RVOs would result in higher gasoline and diesel fuel prices. Additionally, left
unchanged the mandates would create further upward pressure on the primary feedstock used to
produce the required biofuels - corn for ethanol and soyoil for biodiesel. [EPA-HQ-OAR-2015-
0111-1193-A1 p.l]
EPA Proposed Mandate Levels for 2014 and 2015: AES generally agrees with the EPA proposed
RVOs for both 2014 and 2015. [EPA-HQ-OAR-2015-0111-1193-A1 p.l]
The proposed RVOs for 2015 are in line with YTD production levels, and are only modestly
different than the actual amount of biofuel produced for each category during 2014. [EPA-HQ-
OAR-2015-0111-1193-A1 p.l]
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For both years, the proposed overall RVOs are below the statutory levels prescribed in EISA.
The 2015 proposed RVO is 4.20 B gallons below the original statutory level [EPA-HQ-OAR-
2015-0111-1193-Alp.l]
These reductions to lower levels than dictated by EISA during 2014 and 2015 are fully justified -
for conventional biofuels by the challenge of the blend wall; for advanced biofuels by the
combined challenge of a lack of commercial production of cellulosic ethanol, as well as
limitations in feedstock (vegoil) availability for biodiesel. The EPA is to be applauded for their
astute response to the 2014 and 2015 market limitations. [EPA-HQ-OAR-2015-0111-1193-A1
p.l]
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
The Agency must address this uncertainty by finalizing the 2014 percentage standards as
indicated on table above and without additional adjustments. [EPA-HQ-OAR-2015-0111-
1948-A1 p. 17] [Table can be found on page 17 of docket number EPA-HQ-OAR-2015-0111-
1948-AL]
As the rule is not expected to be finalized until November 30, 2015, obligated parties will not be
able to significantly change their compliance strategies for 2015. As such, EPA should finalize
the same percentage standards that were published in the Proposed Rule. This is an
equitable method for doing so, since it will give obligated parties a chance to comply. The
proposal represents the best information available for obligated parties to use when developing
compliance strategies for 2015. [EPA-HQ-OAR-2015-0111-1948-A1 p.18]
Biotechnology Industry Organization
EPA is similarly unjustified in proposing to set the 2015 RVOs according to "what actually
happens" in 2015 and in consideration of "constraints imposed by the ability of vehicles and
engines to use renewable fuels, particularly ethanol."196 EPA has not attempted an adequate
analysis of the availability of such vehicles or the availability of RINs in 2015 sufficient to
justify such a claim. EPA should fully consider setting the 2015 and 2016 RVOs at the statutory
volumes, or adequately justify why it cannot do so, and must set volumes at the maximum
numbers achievable. [EPA-HQ-OAR-2015-0111-1958-A2 p. 59]
The agency is proposing to allow obligated parties to establish the market for renewable fuels for
a second year in a row "absent a rulemaking,"200 which will create a situation where "actual
supply in 2015 may be no different than it was in 2014."201 [EPA-HQ-OAR-2015-0111-1958-A2
p. 60]
196
Proposed Rule 33122.
200 Mat 33131.
201 Id at 33122.
Growth Energy
Apart from the E10 blendwall, however, EPA did not attempt to quantify the effect of any of
these apparent restrictions. EPA proposed to base the 2014 renewable fuel volume requirement
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on the actual net RIN generation for that year.61 EPA determined its proposed renewable fuel
volume requirements for 2015 and 2016 by attempting to predict how much growth of fuels
other than E10 "is within reach of a responsive market" based on past levels.62 [EPA-HQ-OAR-
2015-0111-2604-A2p.ll]
Illinois Farm Bureau
The proposed rule falls further behind statutory mandates in the coming years. The proposed
target for 2015 is 4.2 billion gallons below the obligation. [EPA-HQ-OAR-2015-0111-3290-A2
p.l]
Linn & Associates
The 2015 proposal in particular does not follow the spirit and certainly not the letter of the RFS
legislation. The 13.4 billion gallon proposal for 2014 for the first time represents a concrete step
backward when compared to the enacted 2013 proposal of 13.8 billion gallons of corn-based
fuels. This can best be demonstrated by the debasement of the D6 RIN market, which fell by half
in the hours following the proposal release. [See Docket Number EPA-HQ-OAR-2015-0111-
1043, p. 252-253.]
National Chicken Council (NCC)
The 2015 implied volume for conventional corn ethanol represents an increase over the 2014
record level of consumption of 1.1 percent, despite a reduction in total corn supply (production,
carry over and imports) of 0.9 percent. This proposed level is, to use EPA's phrase, "ambitious."
Combined with the effects of the nine percent rate of growth in ethanol exports so far in 2015
(following 33 percent growth in 2014), NCC recommends that the 2015 required volume
obligations be reduced so that the corn ethanol implied volume remains set at the 2014 levels.
[EPA-HQ-OAR-2015-0111-1814-A1 p.8]
National Sorghum Producers
National Sorghum Producers encourages EPA to enforce congressional will and raise 2015
blending requirements to the level set forth by the Energy Independence and Security Act and
the renewable fuel standard.
Phillips 66 Company
EPA needs to finalize the 2015 standards as proposed (with the exception of biomass-based
diesel discussed below). The 2015 final rule will not be published until very close to the end of
the year. Currently, the recently issued proposal is the only guidance on which obligated parties
have to base their compliance planning and strategies on. Changing the provisions retroactively
for 2015, as has been done for 2014, would once again result in a negative impact to obligated
parties and must be avoided. [EPA-HQ-OAR-2015-0111-2039-A1 p.2]
Response:
Some obligated parties argued that their operations for 2015 vis-a-vis acquisition of RINs were
based on the standards that were proposed in the June 10, 2015 NPRM, and that it would be
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inappropriate for EPA to set final applicable percentage standards for 2015 now that are more
stringent than those proposed in that NPRM. We disagree. Obligated parties have always been
aware that the final volume requirements can differ from those proposed, and moreover the
NPRM indicated that the final 2015 volume requirements could be higher or lower than those
proposed based on comments from stakeholders:
"Since we recognize that these proposed volumes represent our proposed
judgment as to the maximum amount of renewable fuel that can be supplied in
2015, and commenters may have information that supports a different assessment,
we request comment on whether higher or lower volume requirements for
advanced biofuel and total renewable fuel for 2015 would be more appropriate."
(80 FR 33122)
More importantly, we are setting the applicable volume requirements for 2015 at levels
consistent with the number of RINs generated in 2015 that are available for compliance, based
on data of actual supply through September and an estimate of actual supply for the remaining
months of the year. Thus we expect the total number of RINs available for compliance to be the
same, or very nearly so, as the volume requirements that we are setting for 2015 in this final
rule. While it is true that the 2015 RINs available for compliance may not be distributed among
obligated parties according to their individual compliance obligations, they are nevertheless
available for compliance, and obligated parties can buy and sell RINs in order to ensure
compliance. Obligated parties can also carry a deficit into 2016 if they did not carry a deficit in
2015, permitting a longer time period over which they can make arrangements to acquire RINs
from those parties who have more than they need. This process is exactly how the RIN system
was designed to operate when originally established in 2007.
One stakeholder suggested that the portion of the total renewable fuel requirement for 2015 that
is not required to be advanced biofuel (what is typically referred to as conventional renewable
fuel, though it could be met with advanced biofuel) should be set at the same level as the 2014
volume requirement for conventional renewable fuel. This stakeholder argued that the proposed
2015 level for conventional renewable fuel was too ambitious based on alleged reductions in
total corn supply and increased ethanol exports. However, in this final rule we are setting the
volume requirements for 2015 based on actual supply, not on a projection of what may be
achievable as we did in the NPRM. Therefore, the supply of RINs representing conventional
renewable fuel in 2015 will be the same, or very nearly so, as the volume requirements that we
are setting for 2015 in this final rule.
For responses to comments on whether the statutory volume requirements can be reached in
2014, 2015, or 2016, see Section 2.2.4.
For responses to comments on the role of carryover RINs in the RFS program and suggestions
that they could be used to increase the volume requirements, see Section 6.
For responses to comments on the consumption capacity of vehicles to use E15 and E85, see
Sections 2.6.2 and 2.7.1.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
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Section 2.3.1: Congressional Intent to Increase Volumes
Section 2.7.1: Achievable Volumes of E85 Consumption
Section 3.2.1: Availability of Feedstocks
Section 4.1: General Comments on Cellulosic Biofuels
Section 7.5: Retail Fuel Prices
2.4.3 Proposed Total Renewable Fuel Volume for 2016
Comment:
Advanced Economic Solutions (AES)
However the proposed level of the RVOs during 2016 would create sizable market challenges,
and should be reduced. [EPA-HQ-OAR-2015-0111-1193-Al p.l]
EPA Proposed Mandate Levels for 2016: AES believes the proposed mandate levels for 2016 are
beyond levels that can be met without causing meaningful market disruptions.
Conventional Biofuel Proposed R VOs:
The proposed "carve-out" for conventional biofuels during 2016 would total 14.0 B
gallons[2}. This would equate to 10.4% of the EIA's estimate 2016 motor gasoline consumption
(135 B gallons).[3J This would exceed the "10% blend wall" (10% of 135 B gallons or 13.5 B
gallons) by 500 mm gallons - more than any previous conventional biofuel RVO has ever
exceeded the blend wall.
The ability of the market to meet a conventional biofuel requirements during 2016 that exceeds
the 10% blend wall is unclear. An inventory of D6 RINs would certainly help meet the
challenge, at least in 2016. However over the remainder of the life of the EISA, consistently
facing an RVO for conventional biofuels that exceeds the 10% blend wall may cause disruptions
in RIN prices (and ultimately gasoline prices) that the market is ill-equipped to handle. [EPA-
HQ-OAR-2015-0111-1193-A1 p.2]
AES also recommends that EPA reduce the conventional biofuel RVO for 2016 to the 13.5 B
gallons. [EPA-HQ-OAR-2015-0111-1193-A1 p.3]
[2] Calculated as the difference between the proposed total biofuel RVO (17.4 B gallons) minus
the proposed advanced biofuel RVO (3.4 B gallons)
[3] EIA Short-term Energy Outlook, April 2015
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
EPA should set the 2016 Total Renewable Fuel standard at 16.30 billion gallons.38 This volume
is based on ethanol usage at 9.7% for E10 (13.404)39 plus 2.9 billion gallons of advanced biofuel
ethanol equivalent RINs which includes 0.074 billion gallons of sugar cane ethanol as a proxy to
100 million gallons of E85 use.40 [EPA-HQ-OAR-2015-0111-1948-A1 p.25]
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38 13.404 ethanol in E10 + 2.9 advanced = 16.304
39 EIA's May 2015 STEO projection for gasoline in 2016 = 8.99 million b/d, or 138.19 billion
gallons. 0.097 * 138.19 = 13.404.
40 100 million gallons of E85 = 74 million gallons of ethanol.
There will only be one month between EPA's deadline to issue the Final Rule for 2016 and the
end of 2015, and only seven months from the release of the Proposed Rule to the end of the year.
Even if obligated parties could rely on the Proposed Rule (which is problematic for many
reasons, and perhaps more so in this rulemaking given the previous proposal and withdrawal of
the 2014 RFS rule) this is obviously insufficient lead time for the planning, approval, design,
permitting, construction and start-up of any large capital projects. In addition, this schedule does
not provide enough time for a sufficient number of infrastructure projects to have a significant
impact on biofuels production and blending at the rack and pump installation at the retail level.
[EPA-HQ-OAR-2015-0111-1948-Alp.26]
Wisconsin Farm Bureau Federation
WFBF opposes the EPA's proposed reduction in the amount of renewable fuels that must be
blended into the nation's gasoline supply. This decision will cripple conventional ethanol
production and make it more challenging for further advancements of biofuels. [EPA-HQ-OAR-
2015-0111-1716-Alp. 1]
Archer Daniels Midland Company (ADM)
As ethanol producers, traders and marketers, we believe that the original goals of the RFS are
reasonable and within reach, but the RVO proposal greatly undermines these goals. Therefore,
we urge EPA to reconsider its RVO proposal and to set ethanol volumes in line with the volumes
spelled out in the federal statute. [EPA-HQ-OAR-2015-0111-2262-A1 p. 4]
Butamax Advanced Biofuels, LLC
EPA should as much as possible minimize waivers that lessen the statutory volumes. This
maximizes conformance with legislative intent while providing stakeholders with the strongest
possible confidence as they plan their long-term commercial, investment and compliance
strategies. [EPA-HQ-OAR-2015-0111-1938-A2 p. 4]
Chevron
Regarding 2016, the proposed volumes of renewable fuel for 2016 will very likely exceed the
blendwall limit. We recommend that EPA use the same methodology for 2016 as proposed for
2015 and keep the volume standards below the blendwall limit. [EPA-HQ-OAR-2015-0111-
1911-Alp. 2]
Colorado Corn Growers Association
I have deep concerns, though, and stress that the Colorado Corn Growers Association adamantly
recommends the EPA return to the statutory volumes contained within the Energy Independence
Security Act (EISA). [EPA-HQ-OAR-2015-0111-2334-A1 p.l]
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Again, the Colorado Corn Growers Association requests that the EPA reconsider its proposed
reduction to the RVOs and continue to provide the regulatory backing to the RFS the most
successful renewable fuels program in history. [EPA-HQ-OAR-2015-0111-2334-A1 p.2]
Commonwealth Agri-Energy, LLC
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 189.]
The EPA needs to understand that consumers deserve a choice at the pump. Ethanol is cheaper,
cleaner burning, renewable, American made. The EPA should maintain the statutory
requirements of the RFS.
Conestoga Energy Partners Holding
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 247-249.]
I'm here today, obviously, to say please keep the original RFS2 RVO standards and blending
obligations. It's been one of the most successful programs, Government programs in the last 20
years. I've seen it, what it's done to rural America by — I farm as well. And proven by the
reduction in direct payments to producers, it has vitalized rural America.
I'd ask that you restore the 2016 and forward RVO blending requirements back to the original
RFS law because it's working.
Cornelius Seed Corn Company
As you finalize the EPA's Renewable Fuel Standard rule for 2015, please make consider
increasing the level of ethanol to the level set by Congress. [EPA-HQ-OAR-2015-0111-3247-A1
p.l]
Countrymark Cooperative Holding Corporation
CountryMark does not agree with the increased ethanol and biomass-based diesel standards that
are proposed for 2016. EPA should consider reducing both the renewable mandate to reflect the
blendwall at 9.7% of the gasoline pool as ethanol. [EPA-HQ-OAR-2015-0111-2264-A1 p.8]
DuPont
DuPont does not believe that EPA has proposed the Total Renewable Fuel volumes at a level that
will drive obligated parties to blend additional biofuel and make the necessary investments in
infrastructure to accommodate the additional volumes. [EPA-HQ-OAR-2015-0111-1826-A1
p.22]
ERI Solutions
If the EPA is really concerned about higher ethanol blends, why are current EPA employees
trying to patent E20 and higher ethanol blends? It doesn't make sense. I ask that you consider the
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truth, leave the renewable fuel standard in place, dispose of the crippling agendas of others, the
misinformed puppets that you've heard some of today, and leave this powerful industry that's
trying to oppose the RFS out of the equation.
Farm Credit Services of America
As a lead lender to all types of agricultural producers, we are very sensitive to how the success of
this industry ripples through and impacts other segments. But, predictability is the central issue
required for project success, and shifts in government policies - or even the threat of shifts - are
problematic. The proposed rule, if finalized without revising the RVO levels to match the targets
established by Congress, will cause severe economic consequences to agriculture producers and
will diminish future investment in renewable fuels. Specifically, the RVO levels, as proposed,
would significantly reduce corn demand, prices, and farm sector profits, which would lead to
declines in land values and increased Federal expenditures on Farm Program costs. [EPA-HQ-
OAR-2015-0111-2491-A1 p.l]
The need for greater certainty is important in achieving our nation's long term environmental and
domestic energy objectives for investors, producers and consumers. This proposed rule
undermines these goals. We ask that you modify the rule to reflect the congressionally
established levels called for by the RFS. [EPA-HQ-OAR-2015-0111-2491-A1 p. 1]
Growth Energy
Apart from the E10 blendwall, however, EPA did not attempt to quantify the effect of any of
these apparent restrictions. EPA proposed to base the 2014 renewable fuel volume requirement
on the actual net RIN generation for that year.61 EPA determined its proposed renewable fuel
volume requirements for 2015 and 2016 by attempting to predict how much growth of fuels
other than E10 "is within reach of a responsive market" based on past levels.62 [EPA-HQ-OAR-
2015-0111-2604-A2p.ll]
EPA explains that, under its proposal for 2016, after accounting for the required volume of non-
ethanol cellulosic biofuel and BED, and for the maximum amount of ethanol that can be
consumed as E10 (i.e., the E10 blendwall), an additional 0.84 bil RINs would be needed to reach
the renewable fuel volume of 17.40 bil. Because, as explained above,323 the statutory renewable
fuel volume requirement after flowing through the proposed cellulosic waiver is 1 bil higher than
EPA's proposed requirement—18.40 bil—this same calculation would mean that an additional
1.84 bil RINs would be needed to reach the statutory requirement after the cellulosic waiver
flow-through. Even the most conservative path outlined above could achieve that level, and other
paths could far exceed it. [EPA-HQ-OAR-2015-0111-2604-A2 p.54]
323%?rap.31.
Fremont Industries
I just wanted to speak briefly in support of maintaining the current standard and increased use of
ethanol.
Governors' Biofuels Coalition
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We urge you to more aggressively grow the volume obligation levels within the Renewable Fuel
Standard 2014, 2015, 2016 (No. EPA-HQ- OAR-2015-0111, 40 CFRPartSO), than the
proposed levels within the recent rule. [EPA-HQ-OAR-2015-0111-2489-A1 p.l]
Governor of Iowa, et al.
Stakeholders continue to express significant concerns about the EPA's reliance on outdated data
and the lack of recent data utilized in compiling the EPA's proposal on RFS volume obligations.
The State of Iowa asks the EPA, Office of Management and Budget, and White House officials
to analyze data and information provided in the below referenced studies to refine and increase
the volume obligation levels: [EPA-HQ-OAR-2015-0111-1915-A2 p.l] [List of referenced
studies can be found on pages 1-2 of docket number EPA-HQ-OAR-2015-0111-1915-A2]
Illinois Department of Agriculture
The State of Illinois believes that reducing the RFS benchmarks previously established by the
USEPA will be detrimental to the country and Illinois. [EPA-HQ-OAR-2015-0111-0260-A1 p.l]
Illinois Farm Bureau
By 2016 the proposed volume requirement is 4.85 billion gallons below the standard. [EPA-HQ-
OAR-2015-0111-3 290-A2 p. 1]
Indiana Ethanol Producers Association
The importance of renewable fuels to Indiana is self-evident, putting the proposed RVO
reductions proposed by the EPA in startling context: the proposed reduction for 2016 is greater
than the entire annual ethanol production in our state. [EPA-HQ-OAR-2015-0111-3485-A1, p. 1]
Indiana Farm Bureau
By 2016 the proposed volume requirement is 4.85 billion gallons below the standard. [EPA-HQ-
OAR-2015-0111-2486-A1 p.l]
John Deere
Relative to conventional biofuels, we remain concerned about the proposed reduction in 2016
volumes. By lowering volumes from 15 billion to 14 billion gallons, the proposal signals that
EPA does not intend to abide by the intent and the law of the applicable standards. By proposing
volumes close to the 'blend-wall' EPA gives credence to what we regard as an artificial and
avoidable constraint. There are multiple options that could be advanced if your agency commits
to overcoming this constraint. These options include but are not limited to infrastructure
investments, pricing and marketing tactics to promote growth in E85 volumes, and/or
investments in wholesale distribution that would result in greater access to El 5. [EPA-HQ-OAR-
2015-01 ll-2042-Alp.2]
The biofuel industry requires an emphatic message that EPA will not allow actual or perceived
supply constraints to prevent continued growth in renewable fuels consumption. We believe EPA
incorrectly interprets Congress' intent when it proposes to apply the statutory 'inadequate
domestic supply' waiver-authority to distribution constraints. Even if EPA's interpretation of the
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waiver authority is correct, its exercise is not required - especially when doing so jeopardizes the
fundamental signal that must be sent to the market. As such, we ask that EPA stand by the
statutory volume of 15 billion gallons of conventional biofuel in 2016. [EPA-HQ-OAR-2015-
0111-2042-A1 p.2]
It is clear that specific and targeted adjustments to the Total Renewable Fuel volumes are
justified. Cellulosic biofuel production has yet to achieve volumes that would support the
statutory levels. We also understand the case for a balance in the 2014 and 2015 volumes since
the time needed to substantially impact action has largely passed. However, just as Congress
clearly intended, volumes for 2016 and beyond must be aggressive enough to compel the
industry to take actions necessary to meet the needs of the future. [EPA-HQ-OAR-2015-0111-
2042-A1 p.2]
Kansas Corn Growers Association
We see no reason for EPA to lower the ethanol levels in the Renewable Fuels Standard and we
are asking that the corn ethanol levels in the RFS for the 2014-2016 period remain as they are
written in the law. [EPA-HQ-OAR-2015-0111-3172-A1 p. 1]
Leifmark LLC
From the perspective of a cellulosic ethanol technology provider, it's essential that the corn
ethanol industry is healthy for cellulosic to take off to the volumes proposed in RFS2. The
supply chain starts with U.S. farms. RFS2, as Congress intended, is based on the simple premise
that higher ethanol blends such as E15, E30 and E85 will become commonplace as U.S. fuel
retail stations. [EPA-HQ-OAR-2015-0111-1955-A2 p. 2]
Marathon Petroleum Company
We disagree with the volumes proposed by the agency for 2016. After stating that the E10
blendwall is real and a barrier to blending biofuels, the agency purposely is proposing volumes
that push the country beyond the E10 blendwall. We find the logic inconsistent. [EPA-HQ-OAR-
2015-0111-1932-A1 p. 4]
Marine Retailers Association of the Americas (MRAA)
With Congress taking little action of the matter, we respectfully ask the EPA to lower the Final
Ruling ethanol volumes proposed for 2105 and 2016. [EPA-HQ-OAR-2015-0111-1949-A1 p.l]
Maryland Grain Producers Association
I'm here today to express our support for ethanol production, a robust renewable fuel standard,
and to explain Maryland's efforts to expand the infrastructure for higher blends.
And that's why in 2007, when the renewable fuel standard was passed, Congress understood that
there would be opposition. That's why they passed the law, and they put specific quantities in the
law, and they put EPA in charge. So what has gone wrong? Today, we have ample ethanol
infrastructure. We have low feedstock prices, and our barrier to success is the EPA. On behalf of
Maryland's grain industry, I would like to express that this is unacceptable. It's outside your legal
authority, and we ask you to restore the RVO to the statutory limits.
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Mass Comment Campaign sponsored by anonymous 24 (postcard) - (207)
Yet, the EPA has proposed REDUCING the amount of ethanol that will be blended next year.
[EPA-HQ-OAR-2015-0111-2563-Alp.l]
Stand up with your favorite driver and tell the EPA that you want our sport, our cars and our
environment to continue to benefit from ethanol. [EPA-HQ-OAR-2015-0111-2563-A1 p. 1]
I oppose your decision to reduce the use of corn ethanol volumes in the Renewable Fuel
Standard. [EPA-HQ-OAR-2015-0111-2563-A1 p.2]
Please reverse your decision and leave the corn ethanol level where it currently is in the
Renewable Fuel Standard statute. [EPA-HQ-OAR-2015-0111-2563-A1 p.2]
Mass Comment Campaign sponsored by anonymous 25 (email) - (11)
EPA's proposed drastic cuts in the RVO amounts will have a devastating financial impact on
rural economies as well as stopping further investments in ethanol businesses throughout the
nation. When the RFS was established it was known and intended that ethanol blends would
need to exceed 10% but oil companies are doing everything they can to control their monopoly
on the nation's fuel supply. With this flawed proposal, EPA is fundamentally dismissing the law
and the intent of how the RFS should work under the 2005 and 2007 RFS as enacted. For all the
above reasons we again implore that EPA restore the RVO to the statutory volume amounts.
[EPA-HQ-OAR-2015-0111-2567-Alp.l]
Mass Comment Campaign sponsored by anonymous 26 (web) - (11)
Reducing the RFS will diminish the infrastructure developments and investments that are making
biofuels available to consumers. Pick American made biofuels instead of foreign oil by
continuing a robust RFS! [EPA-HQ-OAR-2015-0111-2826 p.l]
Mass Comment Campaign sponsored by anonymous 27 (paper) - (120)
At the same time Missouri farmers struggle to put in a crop, the EPA deals another blow by
continuing to propose reductions to the Renewable Fuel Standard (RFS) volume obligations.
This move is unacceptable. [EPA-HQ-OAR-2015-0111-2959-A1 p.l]
Now is not the time to move backward when it comes to developing alternatives to fossil fuels
and foreign oil. We must move forward. Continuing to implement the RFS at the intended levels
is vital to increasing our energy independence, improving the environment and supporting
American agriculture. [EPA-HQ-OAR-2015-0111-2959-A1 p.l]
Please reconsider the proposed rule and show your support for a cleaner, locally refined future.
[EPA-HQ-OAR-2015-0111-2959-A1 p.l]
Mass Comment Campaign sponsored by Indiana Corn Growers Association and Indiana
Soybean Alliance (email) - (304)
Your decision to reduce corn ethanol levels harms both the rural economy and the environment
which it is your mission to protect. I strongly urge you to reconsider your proposed reduction in
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the baseline 2015 and 2016 renewable volume obligations. Return them to the levels decided
upon by Congress in the RFS. My farm, my family and my community depend on your making
the right decision. [EPA-HQ-OAR-2015-0111-3387-A1 p.l]
Mass Comment Campaign sponsored by Minnesota Corn Growers Association - (784)
As an American who drives a car, breathes the air and would like choices at the pump, I am
writing to urge the Environmental Protection Agency (EPA) to leave the Renewable Fuel
Standard alone. [EPA-HQ-OAR-2015-0111-2570-A2 p.l]
If EPA implements its proposal to slash the RFS and reduce the amount of cleaner-burning
ethanol blended in our fuel supply below what Congress originally called for, all of this progress
is threatened. I don't want to see our country's energy policy go backward, but that's exactly what
would happen if EPA is allowed to roll back the RFS. [EPA-HQ-OAR-2015-0111-2570-A2 p.l]
Americans want homegrown, cleaner-burning alternatives at the pump. They're not buying into
the mythical 'blend wall' excuse that the oil companies try and shove down our throats when it
comes to ethanol and the RFS. [EPA-HQ-OAR-2015-0111-2570-A2 p.l]
Now is the time for the EPA to listen to Americans, not Big Oil companies. Implement the RFS
as Congress originally intended. It's working for all Americans. [EPA-HQ-OAR-2015-0111-
2570-A2p.l]
I am writing to urge the Environmental Protection Agency (EPA) to leave the 2014, 2015, and
2016 Renewable Volume Obligations at the levels originally proposed by Congress in the
groundbreaking energy legislation known as the Renewable Fuel Standard (RFS). [EPA-HQ-
OAR-2015-0111-2961-A1 p.l]
Minnesota farmers are proud to have played a leading role in growing corn used for ethanol that
cleans our air and offers numerous other environmental and economic benefits. I ask that you
allow us to continue moving America's energy policy forward and not mess with the RFS. [EPA-
HQ-OAR-2015-0111-2961-A1 p.l]
Mass Comment Campaign sponsored by National Corn Growers Association (NCGA) -
(24,661)
EPA: Please maintain the renewable volume obligation levels indicated in statute for 2015 and
2016. The continued health of the rural economy and the nation's environmental improvements
hinge upon this decision. [EPA-HQ-OAR-2015-0111-2564-A1 p.l]
I oppose your decision to reduce the use of ethanol volumes in the Renewable Fuel Standard.
[EPA-HQ-OAR-2015-0111-2565-A1 p.l]
Keep the Renewable Fuel Standard intact and on track—don't mess with the statute. Our farms,
families and communities depend on your making the right decision. [EPA-HQ-OAR-2015-
0111-2565-A1 p.l]
I strongly oppose the proposed reduction in the baseline renewable volume obligations for the
Renewable Fuels Standard. Return them to the levels decided upon by Congress in the
Renewable Fuel Standard. Our farms, our families, our state and my community depend on your
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support of clean air, renewable energy and domestic jobs with American corn ethanol. [EPA-
HQ-OAR-2015-0111-2566-A1 p.l]
As your constituent, I ask you to support the Renewable Fuel Standard. Tell the EPA: Don't
reduce the 2014 RFS corn ethanol renewable volume obligations. [EPA-HQ-OAR-2015-0111-
2824-A2p.l]
I support American Ethanol. I strongly oppose your reduction of corn ethanol volumes in the
Renewable Fuel Standard. [EPA-HQ-OAR-2015-0111-3291-A1]
Reconsider your proposal return the renewable volume obligations to the statute passed by
Congress and signed by the president in 2007. My farm, my family and my community depend
on this decision. Don't mess with the RFS. [EPA-HQ-OAR-2015-0111-3470-A1 p.l]
Please reconsider your damaging proposal to cut the use of corn ethanol in the Renewable Fuel
Standard in 2014. [EPA-HQ-OAR-2015-0111-3475-A1 p.l]
Please, think again and keep the RFS for corn ethanol where it is. Changing it is simply not
worth the economic and environmental damage. [EPA-HQ-OAR-2015-0111-3475-A1 p.l]
I write to urge you to express your concern regarding the Environmental Protection Agency's
authority to adjust the 2014, 2015 and 2016 Renewable Volume Obligations (RVOs) under the
Renewable Fuel Standard (RFS). Reducing the amount of renewable fuel blended into gasoline
could hurt rural economies, jeopardize American jobs, raise prices at the pump and deter
investment in biofuels and biofuel infrastructure. [EPA-HQ-OAR-2015-0111-3476-A1 p.l]
We request that your urge the Agency to stay the course and support this important piece of
transformational energy policy. Please ask EPA to reconsider its proposed reduction in the 2014
renewable volume obligations and maintain levels indicated in the statute for 2015 and 2016.
[EPA-HQ-OAR-2015-0111-3476-A1 p.l]
Mass Comment Campaign sponsored by Nebraska Corn Board (paper) - (1856)
Please maintain the renewable volume obligation levels indicated in statue for 2015 and
2016. [EPA-HQ-OAR-2015-0111-3388-A1 p.l]
The Renewable Fuels Standard (RFS) was one of the most successful energy policies ever
enacted in the U.S. [EPA-HQ-OAR-2015-0111-3388-A1 p.2]
Mass Comment Campaign sponsored by KeepAmericaFishing (web) - (5403)
As a recreational fisherman, I am displeased with the recently released ethanol volumes that
were proposed for this year and 2016 in compliance with the Renewable Fuel Standard. I ask that
you please consider lowering these significantly in light of the safety concerns associated with
using ethanol. [EPA-HQ-OAR-2015-0111-2050-A1 p.l]
Please reevaluate the volumes of ethanol you have proposed for 2015 and 2016 and reduce the
requirements to levels that are mindful of consumer safety. [EPA-HQ-OAR-2015-0111-2050-A3
p.l]
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Michigan Corn Growers Association
On behalf of more than 1,400 members of our association, I ask that the EPA act to restore the
renewable volume obligations for each year to the statutory amount. The RVO should not be
limited by petroleum industry market agreements or their lack of desire to install infrastructure.
Minnesota Bio-Fuels Association (MBA)
In the matter involving conventional renewable biofuel, there is no need for the EPA to exercise
any judgment with respect to the RVO because the production capacity is available,
infrastructure can handle E15 and the full implementation of the RFS for 2015 and 2016 with
respect to conventional biofuels will provide the certainty the industry seeks as it expands the
production of advanced biofuels. Complying with and enforcing the RFS will assist in efforts to
further reduce GHG emissions. [EPA-HQ-OAR-2015-0111-1936-A1 p.7]
Minnesota Corn Research and Promotion Council
The Minnesota Corn Growers are also playing a leading role in growing the availability of mid-
level ethanol blends in our State. Soon over 30 stations will be dispensing El5 through flex-fuel
pumps, and we have 300 stations that carry ethanol blends, giving the consumers a real choice at
the pump. I've seen firsthand that the blend wall is a myth. If you have the infrastructure to
deliver homegrown biofuels, consumers will buy them. If EPA slashes the RFS and fails to
implement the law as Congress originally intended, it will be a major step backward to our
country's energy policy. We've made too much progress on renewable fuels, especially in
Minnesota, to go in the wrong direction. The United States should be taking a lead in using more
clean, renewable, and homegrown sources of energy. Instead, we're talking about cutting the
RFS, the result of which would be a continued, but unsustainable reliance on fossil fuels.
Minnesota State Senate
As you move forward in developing a final rule, I hope you will consider the impact such a rule
will have on the farmers, investors and workers who count on their jobs at ethanol production
facilities around the country. I would also ask that you return the RFS to a program based on
supply of renewable fuel and ambitious goals to reduce our dangerous dependence on foreign oil
and not let the program be held captive by the oil industry and its unwillingness to allow higher
ethanol blends into the marketplace. [EPA-HQ-OAR-2015-0111-3284-A1 p.2-3]
Missouri Corn Merchandising Council
When it comes to a market for our corn, ethanol is a big deal, and this decision is also a big deal.
In the State of Missouri alone, the RFS drives $6.3 billion in annual economic output. It supports
43,000 jobs, $1.5 billion in wages, and cultivates over $474 million in taxes.
I mentioned before that ethanol is a big deal when it comes to our market for our corn. As a
member of the Merchandising Council, we are constantly analyzing our markets and where our
dollars should be invested to increase corn demand. This analysis is why we continue to invest in
ethanol, from consumer education to helping retailers install equipment. We were excited when
the USD A announced $100 million in funding for ethanol infrastructure. We have already
decided to commit $1 million to that effort in the State of Missouri. Given this historic
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investment in infrastructure, it would be unthinkable for EPA not to move back to the statutory
numbers by November. Fifteen billion gallons of corn-based ethanol by 2015 is what everyone
agreed to in 2007. Corn farmers have stuck by our agreement, and EPA and big oil must do the
same.
Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
As discussed above, EPA's decision to set volume requirements right at the boundary of
adequate and inadequate supply, and to estimate adequate supply without accounting for the
uncertainty inherent in its projections, create a significant risk that its waiver will be insufficient
to ensure "adequate domestic supply." That risk is magnified in 2016 because EPA has proposed
to mandate the usage of 840 million gallons of renewable fuel in excess of the amount that the
economy was on pace to use when the NPRM issued. [EPA-HQ-OAR-2015-0111-2603-A2,
pp.17-18]
EPA's projections are flawed in two key respects. First, EPA significantly overestimated the
amount of ethanol the economy was on pace to blend with gasoline.48 Once that error is rectified,
it is clear EPA created nearly a 1.1 billion gallon gap between its mandate and the amount of
renewable fuel that the economy was on pace to use when the NPRM issued. Second, at least
half of the compliance scenarios set forth by EPA involve a massive increase in the volume of
high-ethanol blends used in 2016. EPA reasons that the economy will be capable of significantly
increasing usage of high-ethanol blends based on the theory that revenue from high RIN prices
will trickle down to consumers in the form of competitively-priced E85, which consumers will
then have reason to purchase.50 The latest empirical data, however, indicate that this theory is not
borne out in reality. The value of RINs has not been passed through to consumers nationwide in
the form of competitively-priced E85, and the market has not significantly expanded E85
infrastructure in response to more than two and a half years of high RIN prices. EPA has no basis
for expecting any material change to occur in these respects within the next six to eighteen
months. [EPA-HQ-OAR-2015-Oil 1-2603-A2, p.18]
As a result, in order to satisfy EPA's proposed mandates, the economy will need to produce
biomass-based diesel at or near levels that EPA has described as merely "theoretical[]." EPA
must adjust its volume requirements for 2016 in light of this empirical evidence and real-world
constraints. [EPA-HQ-OAR-2015-Oil 1-2603-A2, p.19]
In sum, EPA not only has decided to push the very boundary between adequate and inadequate
supply, but has then adopted unrealistic and overly optimistic projections of where that
boundaries lies. It is incumbent upon EPA to address all of these trends directly and to adjust the
size of its renewable mandates for 2016 accordingly. [EPA-HQ-OAR-2015-0111-2603-A2, p.39]
48 See, e.g., Scott Irwin & Barrel Good, Dep't of Agric. & Consumer Econ., University of
Illinois at Urbana-Champaign, Implementing the RFS with a 'Push' Strategy: What Happens
after 2016?, farmdoc daily (5): 112, June 17, 2015, available at http://farmdocdaily.illinois.edu/
pdf/fdd!70615.pdf
50 See NPRM, 80 Fed. Reg. at 33,128 ("We recognize that the market would need to compel E85
prices to be increasingly favorable relative to El0 in order to provide the incentive for FFV
owners to purchase E85, but this is exactly how a fully functional market will react to standards
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designed to drive growth in renewable fuel as Congress intended. Thus we believe it is possible
for the market to reach volumes perhaps as high as 600 million gallons under favorable pricing
Conditions.").
Making matters still worse, for 2016 EPA has presented overly optimistic projections of
renewable fuel production and usage—projections that leave no breathing room and cannot be
squared with the sources of data EPA has relied upon or with production and usage levels so far
in 2015. First, the NPRM underestimated the size of the gap between the amount of renewable
fuel that EPA proposed to mandate in transportation fuels in 2016 and the amount it assumed the
economy was actually on pace to supply in transportation fuels in 2016. [EPA-HQ-OAR-2015-
0111-2603-A2, p.3]
Monsanto
I am writing in response to your proposal to reduce the use of ethanol in the Renewable Fuel
Standard. As you are aware, there are many great efforts both publically and privately focused on
driving renewable energy growth. We recognize and commend the continued multi-U.S.
government agency strategy to advance the technical and societal benefits from ethanol use. This
critical ethanol work across EPA, Department of Energy, USD A, Department of Defense,
Department of Commerce and Department of Health & Human Services represents a significant,
long-term commitment to energy diversification and improved clean air. [EPA-HQ-OAR-2015-
0111-1945-A1 p.l]
I strongly urge you to reconsider your proposed reduction in the baseline 2015 and 2016
renewable volume obligations, returning these targets to the levels decided upon by Congress in
theRFS. [EPA-HQ-OAR-2015-0111-1945-A1 p.l]
National Biodiesel Board
While EPA focuses on biomass-based diesel being "nested" within the advanced biofuel
requirement, it does not assess whether keeping the total renewable fuel volume at a certain level
also could provide additional incentives to produce more biomass-based diesel or advanced
biofuels. As discussed above, increasing D4s reduces gasoline blend wall pressure. EPA also
should consider the extent to which increasing volumes of D6 RINs are coming in from non-
gasoline pool sources (and thereby potentially competing with advanced biofuels), and consider
the appropriate volume for the total renewable fuel standard at the true available supply. [EPA-
HQ-OAR-2015-0111-1953-A2 p.131]
National Chicken Council (NCC)
Combined with the trend toward ethanol exports, an implied volume of 14 billion gallons of
conventional corn ethanol in 2016 under the RFS would almost certainly exceed the 15 billion
gallon limit on ethanol production envisioned in the EISA statute. Therefore, NCC recommends
a significant reduction in the 2016 required volume obligations sufficient to bring the
conventional corn ethanol volume below the 10 percent blend wall. [EPA-HQ-OAR-2015-0111-
1814-A1 p.8]
National Corn-to-Ethanol Research Center (NCERC at SIUE)
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The RFS has played a pivotal role in reducing oil imports to the lowest levels since the 1980s,
while lowering gas prices, improving air quality, and strengthening the economic health of rural
America. Without question, the RFS is providing meaningful benefits to the American public
each and every day, and is among the most successful energy policies this nation has ever
adopted. For these reasons, we are adamantly opposed to the proposal to reduce the 2014-2016
renewable volume obligation (RVOs) for renewable fuel from the levels envisioned by Congress.
We simply do not understand why EPA is proposing to abandon a program that has undoubtedly
delivered on its promise. [EPA-HQ-OAR-2015-0111-1226-A2 p. 1]
As a result of the forward-looking nature of the RFS, our business and others in the sector are
poised to make even more significant contributions to our nation's energy security in the future.
Today, we are investing in the research and development activities that will lead us to improved
efficiency in first generation biofuels and accelerated commercialization of the next generation
of bioenergy feedstocks and renewable fuels. Waiving the 2014-2016 RVOs, as proposed, would
jeopardize our past and future investments, and put at risk the enormous benefits that the recent
agricultural and bioenergy renaissance has brought to rural communities and the entire nation.
[EPA-HQ-OAR-2015-0111-1226-A2 p.2]
National Farmers Union (NFU)
The preamble to the proposed rule acknowledges the need for longer-term certainty than annual
volume targets allow, asserting that as the reason for offering the 2016 volume standards now
along with the 2014 and 2015 volume standards. Ignoring the fact that the 2016 volume standard
will hardly be issued before 2016, EPA's attempt to offer certainty for the biofuels industry is far
less effective than establishing a habit of properly deferring to the volume standards in the EISA.
[EPA-HQ-OAR-2015-0111-1657-A1 p. 8]
As discussed above, NFU asserts that the proposed advanced biofuel volume standards EPA sets
forth in the proposed rule are too low. However, even if EPA refuses to raise the proposed
advanced biofuel targets in the final rule, EPA must not lower the total renewable fuel proposed
volume standards to the extent it would in the proposed rule. EPA maintains the ability to
encourage much of the change needed in retail consumer transportation fuel infrastructure by
holding fast to the volume standards set forth in the EISA, creating sufficient certainty for
advanced biofuel manufacturers even if the volume standards for advanced biofuels are
ultimately lowered. [EPA-HQ-OAR-2015-0111-1657-A1 p. 6]
National Restaurant Association
While we also appreciate the EPA using its waiver authority to lower the RFS targets from the
statutory requirements, we believe this proposal does not go far enough to relieve the pressure
created by the mandate. Therefore, we urge the EPA to further decrease the corn ethanol
volumes in the final rule. [EPA-HQ-OAR-2015-0111-2267-A1 p. 2]
For these reasons, we urge the EPA to lower the corn ethanol mandate to the lowest possible
level. [EPA-HQ-OAR-2015-0111-2267-A1 p. 4]
Nestle
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While we believe EPA has acted prudently in reducing mandates below statutory levels, we
would point out that the proposed 2016 mandates would actually require that ethanol comprise a
higher percentage of the nation's projected fuel supply in that year than will be the case for 2015,
and a percentage that exceeds the blend wall. For 2016, the proposed corn ethanol target would
equate to about 10.2% of projected gasoline supplies. [EPA-HQ-OAR-2015-0111-1918-A1 p.2]
North Dakota Corn Growers Association (NDCGA), et al.
Please restore the RVOs to statute. Reducing the RVOs at this time will destroy the benefits that
have been accomplished towards cleaner air and energy independence. [EPA-HQ-OAR-2015-
0111-2541-A2p.l]
I am asking that the EPA does not reduce the RVOs in the RFS at this time. We have plentiful
carry-out of corn from USA production, farmers who have invested to grow more bushels to
meet our demands, and invested in breeding and educational programs to improve the
environment that these corn acres are grown. Reducing the RVOs will cause economic harm to
farmers, patrons of farm supply and elevator cooperatives, and the economy of rural America
where good paying jobs are provided at ethanol plants. We continue to invest check off dollars to
meet a growing demand of corn and corn products at affordable prices - don't stop a good thing
that is working. [EPA-HQ-OAR-2015-0111-2541-A2 p.2]
By enacting sound public policy, ethanol will continue to meet consumer demand of a quality
product at an affordable price. That's why today we ask you to reconsider recent actions and be
bold leaders in setting higher volume obligations. Doing so will also be a "win/win" for our
nation overall, as has been the case in my state. [EPA-HQ-OAR-2015-0111-2541-A3 p.2-
3] [EPA-HQ-OAR-2015-0111-1004 p. 184]
North Dakota Grain Growers Association
I write on behalf of the North Dakota Grain Growers Association (NDGGA) to request that EPA
reconsider its action to reduce the corn-based blended ethanol volumes and restore the blended
ethanol volumes to the previous levels. This would mean that NDGGA supports a volume of
corn-based ethanol of 15 billion gallons for 2015 and 15 billion gallons in 2016 instead of EPA's
proposed reductions. [EPA-HQ-OAR-2015-0111-1656-A1 p.l]
After years of success in expanding the ethanol industry because of the RFS, we must not move
backward. We must capitalize on the current momentum and continue to invest in the future
development and commercial scale production of next generation biofuels. The EPA's proposed
reduction in corn-based ethanol volumes will slow any further innovation, investment and
growth in a successful and thriving industry that supports farmers, plant workers, and entire rural
communities. [EPA-HQ-OAR-2015-0111-1656-A1 p.2]
Office of the Lt. Governor, Indianapolis, Indiana
I am deeply concerned about the proposed renewable volume requirements for 2014, 2015, and
2016, and I urge you to move quickly on setting the requirements and keep the requirements as
high as possible so that Hoosier farmers and biofuel industry participants will have certainty and
stability going forward. [EPA-HQ-OAR-2015-0111-2482-A1 p.2]
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Poet, LLC
EPA requests comment on whether it "would be appropriate to only waive volumes of advanced
biofuel and total renewable fuel under the cellulosic waiver authority for 2016" without waiving
volumes under the general waiver authority.118 POET's answer to this question is "yes." [EPA-
HQ-OAR-2015-0111-2481-A1 p.31]
If EPA passes through the cellulosic production shortfall, the RFS can be put on a path to success
through 2022 (the last year of statutorily-specified volumes), as indicated in Figure 2 below. As
indicated in this figure, the Base Renewable RVO can and should be strengthened to the 15
billion gallon statutory level by 2016 (where it remains thereafter). [EPA-HQ-OAR-2015-0111-
2481-Alp.31]
118 NOPR at 33,123 (emphasis added).
Notably, EPA's proposed Base Renewable RVO levels would not recover to the 2013 level until
2016.4 This grossly undermines infrastructure investments and is contrary to Congress' intent
that volumes increase every year. [EPA-HQ-OAR-2015-0111-2481-A1 p.5]
4 EPA set the 2013 Base Renewable RVO at 13.8 billion gallons. See EPA final rule, Regulation
of Fuels and Fuel Additives: 2013 Renewable Fuel Standards, 78 Fed. Reg. 49,794, 49,795-97
(August 15, 2013). By comparison, the NOPR's proposed Base Renewable RVOs for 2014 and
2015 are 13.25 and 13.40 billion gallons, respectively.
Rider, Allen
Rather than reducing the biofuel blending requirements established under the EISA of 2007,
EPA should maintain and enforce the congressionally established renewable fuel volume targets
and thereby stimulate innovation and move our nation to a stronger position in the global energy
economy. And while we're reaping the economic and security benefits of a strong biofuel sector,
we can also further reduce emissions of greenhouse gases and toxic pollutions resulting from
petroleum fuel usage.
San Diego Regional Clean Cities Coalition
Reducing the advanced biofuel and total renewable fuel standards for 2016 and 2017 will hinder
the growth of the California biofuels market. [EPA-HQ-OAR-2015-0111-1719-A1 p. 1]
South Dakota Corn Growers Association
Therefore we respectfully urge the EPA to return the volume obligations and methodology set
forth by law under the RFS. [EPA-HQ-OAR-2015-0111-0269-A1 p. 2] [EPA-HQ-OAR-2015-
0111-1043, p. 261]
State of Nebraska
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I disagree with the conclusion of the EPA that this timeline is extremely difficult to achieve and
therefore volume requirements should be lowered, The RFS is an appropriate, achievable and
ambitious target which must be maintained. [EPA-HQ-OAR-2015-0111-1810-A1 p.l]
State of South Dakota
I am writing in support of maintaining the Federal Renewable Fuel Standard (RFS) as written in
statute. The proposed agency standards for 2014, 2015, and 2016 fall far short of the statutory
volume levels Congress felt were appropriate when the law was enacted. Lowering the RFS
volume levels, particularly for ethanol, will hurt the renewable fuels industry and our agriculture
economy. [EPA-HQ-OAR-2015-0111-1919-A1 p.l]
Our country needs more renewable fuels, not less. Please increase the proposed renewable fuels
volume standards. [EPA-HQ-OAR-2015-0111-1919-A1 p.l]
Syngeta
Similarly, the ethanol industry's 'run rate' has surpassed 15 billion gallons on numerous occasions
in 2015, according to weekly data from the Department of Energy. As such, the statutory RFS
levels of 15 billion gallons could be readily met in both 2015 and 2016, especially when ethanol
stocks and RIN stocks are also taken into consideration. The limitation is not the ethanol
industries capacity to produce but rather the oil industries willingness to provide choice to
consumer via higher ethanol blends like El 5, E85 and mid-level blends [EPA-HQ-OAR-2015-
0111-2493-A1 p.2]
The Funding Farm
I am advocating for maintain the current Renewable Volume Obligations (RVO's) as a required
part of the Renewable Fuel Standard (RFS). [EPA-HQ-OAR-2015-0111-2812-A1 p. 2]
Wisconsin Farm Bureau Federation
WFBF opposes the EPA's proposed reduction in the amount of renewable fuels that must be
blended into the nation's gasoline supply. This decision will cripple conventional ethanol
production and make it more challenging for further advancements of biofuels. [EPA-HQ-OAR-
2015-0111-1716-Alp. 1]
Response:
Comments on the proposed volume requirement for total renewable fuel in 2016 generally fell
into two camps: those that supported maintaining the statutory target for total renewable fuel of
22.25 billion gallons or the implied statutory target for conventional renewable fuel of 15 billion
gallons, and those that supported the levels that EPA proposed or lower. Those supporting a
higher level than we proposed provided several suggestions for how the volume requirement
could be increased. For instance, one stakeholder suggested that we should consider the extent
to which conventional renewable fuel other than ethanol could help to increase the volume
requirement for total renewable fuel. As described in Sections HE.3 and II.E.4 of the final rule,
we have determined that some non-ethanol renewable fuels could be supplied in 2016, from both
domestic and foreign sources. BED in excess of the volume requirement for BED could also be
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used to help meet that portion of the total renewable fuel volume requirement that is not required
to be advanced biofuel.
As described in Section 2.2.4, some stakeholders suggested that setting the 2016 volume
requirement for total renewable fuel at the statutory target would increase certainty for renewable
fuel producers and others in the market, and that as a result they would invest in expanded
production and infrastructure. We disagree. Based on our assessment of achievable volumes,
setting the volume requirements at the statutory targets would result in substantial shortfalls in
supply of reneable fuel, which we believe would result in outcomes that would undermine the
RFS program. These outcomes could include significant noncompliance, subsequent waiver of
the original volume requirements, and a drawdown of the carryover RIN bank to zero with the
attendant reduction in the ability of obligated parties to address unforeseen circumstances. Such
outcomes would reduce rather than increase the certainty needed for long-term investment in and
growth of renewable fuel volumes compared to our final standards that require significant
growth in total renewable fuel in comparison to 2015.
Similarly, some stakeholders argued that the proposed volume requirements would undercut the
market with severe economic consequences. They alleged that there would be a reduction in
investments, demand for corn, and farm sector profits, which would consequently lead to
declines in land values and increases in federal support to farmers. We disagree. These
comments tended to focus on reductions from the statutory volumes that have not, and can not be
achieved, rather than the growth in renewable fuel volumes relative to previous years. Not only
will the final 2016 volume requirements increase the certainty of sustainably aggressive growth,
but those final volume requirements are in fact significantly higher than the volume requirements
and actual supply in all previous years. As a result of the final volume requirements, supply
must expand, and with it opportunities for growth in the renewable fuel market.
One stakeholder said that the cellulosic biofuel industry will only expand if the RFS program
continues to support the corn-ethanol industry. While it is true that some pathways for
production of cellulosic biofuel involve processing cellulosic feedstocks at corn-ethanol
facilities, we believe that the primary incentive for the cellulosic biofuel industry to expand is the
volume requirement that we establish for cellulosic biofuel. Moreover, we are setting the total
renewable fuel volumes requirement at the maximum level of reasonably achievable supply. It
would be inappropriate to set the volume requirement for total renewable fuel at a level higher
than what is reasonably achievable for the purposes of providing additional support to the
cellulosic biofuel industry, as we believe that the market would not be able to supply the needed
volumes in that case.
While we have reduced the volumes of advanced biodiesel and total renewable fuel below the
statutory targets for 2014, 2015, and 2016, the required volumes nevertheless represent
substantial growth over this time period. As described in Sections HE. 5 and II.F of the final
rule, the final volume requirements for 2016 in particular will require the market to supply more
renewable fuel than at any time in the past, and greater than would have been supplied in the
absence of the RFS program. As a result, the final volume requirements we are setting for 2016
are technology-forcing in the sense of requiring and expecting the market to invest, innovate, and
expand to increase the supply of qualifying renewable fuels above historical levels. The final
volume requirements do not, as some stakeholders asserted, result in a reduction in the demand
for renewable fuel, but instead will produce a significant increase in comparison to 2015. The
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final volume requirements for 2016 will provide an opportunity for all current renewable fuel
producers to expand production.
Stakeholders who believed that the 2016 volume requirement for total renewable fuel should be
lower than we proposed typically said that the E10 blendwall could not or should not be crossed.
Several stakeholders, including the American Fuel & Petrochemical Manufacturers and
American Petroleum Institute, suggested that the total renewable fuel volume requirement for
2016 should be set at 16.3 billion gallons. We disagree. Not only would this level be
significantly below actual supply in 2015, but it would be far less than the market is capable of
achieving. As described in responses to comments in Section 2.6, there is no reason that the
market cannot achieve a pool-wide gasoline ethanol content above 10%, contrary to the
assumption made by these stakeholders. Moreover, these stakeholders assumed that only 1.8
billion gallons of biodiesel/renewable diesel could be made available in 2016. While this is
consistent with the proposed BED volume requirement for 2016, in the NPRM we discussed the
expectation that volumes of BED above the 1.8 billion gallon requirement would be supplied to
meet the advanced biofuel standard. More importantly, as described in Section HE. 3 of the final
rule, we have determined that supply of biodiesel/renewable diesel could be considerably higher
than 1.8 billion gallons.
One stakeholder pointed to information indicating that the value of RINs has not been passed
through to consumers nationwide in the form of competitively-priced E85. As described in
Section II.E.2.ii of the final rule, the full value of RINs has indeed not been passed through to the
retail price of E85, although some of the RIN value has passed through to retail. Also, the
market has only made moderate increases in E85 infrastructure in the last several years.
However, sustained high RIN prices will have the longer-term effect of providing the incentive
for retail station owners to invest in E85 infrastructure. For 2016, we have assumed that the
market can make progress in expanding E85 infrastructure, but we agree that that progress is
unlikely to be more than the largest expansion rate which occurred in 2010.
Many stakeholders, regardless of their views on whether the E10 blendwall can or should be a
consideration in the determination of applicable volume requirements, made the implicit
assumption in their comments that the total volume of ethanol that would be used was identical
to the volume of non-advanced (i.e. conventional) renewable fuel that would be necessary. Not
only is this assumption incorrect, but it oversimplifies the true nature of the standards and the
process of determining appropriate levels for those standards. While the portion of the 2016
cellulosic biofuel standard that we expect to be ethanol is only 20 million gallons, significantly
larger volumes of ethanol may be used to meet the advanced biofuel volume requirement. It is
also likely that a portion of the renewable fuel pool that is not required to be advanced biofuel
will be non-ethanol as evidenced by production and imports of conventional biodiesel and
renewable diesel in the past. Thus it is inappropriate and misleading to assume that the
conventional renewable fuel volume is identical to the volume of the ethanol that would be
required in 2016, and the conventional renewable fuel volume should not be used to determine
how the market will respond vis-a-vis the blendwall.
One stakeholder suggested that we use the same methodology for determining the 2016 volume
requirements as we did for 2015. We disagree. This final rule is being released after 11 months
of the year has passed. The final standards that we set for 2015 cannot affect supply that
occurred over the previous 11 months, and there is virtually no lead time available to impact
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renewable fuel use in the remaining one month. Thus we believe that the basic approach we
have taken in this final rule to establishing 2014 requirements should also be applied to 2015,
with differences only to account for there being an incomplete data set for 2015. The situation
for 2016 is fundamentally different in that the standards we set in this action will have an
opportunity to influence the market for all of 2016. Setting the standards for 2016 at actual
supply would not only require waiting until 2016 had passed, but would also be inconsistent with
statutory intent that the standards we set drive growth in renewable fuel use.
One stakeholder said that current EPA employees are trying to patent E20 and higher ethanol
blends. There are no patents for E20 or other ethanol blends higher than E10. E15 has been
approved for use in all 2001 and later model year light duty vehicles, and ethanol blends higher
than El 5 can be used in flex-fueled vehicles (FFVs). There are no patent-related legal
restrictions on who may produce any blend of gasoline and ethanol.
One stakeholder representing obligated parties said that there is insufficient time to start and
complete any large capital projects that could produce renewable fuel in 2016, and similarly
insufficient time to start and complete any infrastructure projects. The final volume
requirements for 2016 are not based on the assumption of any specific new renewable fuel
production capacity being installed, but recognize that the market is continuing to expand not
only production capacity of various types of renewable fuels, but also the infrastructure
necessary to support them. The final standards reflect only those changes in infrastructure that
we believe can be made by the end of 2016.
For responses to comments on the uncertainty created by reductions in the statutory targets, see
Section 2.1.1.
For responses to comments on whether the statutory volume requirements can be reached in
2014, 2015, or 2016, under either the general waiver authority or the cellulosic waiver authority,
see Section 2.2.4.
For responses to comments on how the REST mechanism operates to subsidize the cost of
renewable fuels at retail, see Section 2.3.2.
For responses to comments stating that the E10 blendwall is not a constraint, or has been
fabricated by the refining industry, see Section 2.4.
For responses to comments suggesting that the El0 blendwall can be addressed by increasing the
requirement volumes of BED, see Section 2.5.
For responses to comments suggesting that the ethanol content of the gasoline pool should be
kept below 10%, see Section 2.6.
For responses to comments on the ability of the 2016 market to substantially increase sales of
E15 and E85, see Sections 2.6.2 and 2.7.1, respectively.
For responses to comments suggesting that obligated parties have failed in their statutory
responsibilities to invest in the infrastructure needed to expand renewable fuel supply, see
Section 2.7.1.
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Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.2: Statutory Authorities for Reducing Volume Targets
Section 2.2.2: General Waiver Authority
Section 2.2.2.1: Inadequate Domestic Supply
Section 2.2.2.2: Severe Economic Harm
Section 2.3: Proposed Approach to Determining Volume Requirements
Section 2.3.1: Congressional Intent to Increase Volumes
Section 2.4.1: Proposed Total Renewable Fuel Volume for 2014
Section 2.4.2: Proposed Total Renewable Fuel Volume for 2015
Section 2.7.2: Impacts on Advanced Biodiesel Production and Imports
Section 2.7.4: Impacts on Imports of Sugarcane Ethanol
Section 3.3.1: Balance between Supporting the BED Industry and Ensuring Opportunities for
Other Advanced to Grow
Section 4.1: General Comments on Cellulosic Biofuels
Section 7.1: General Comments on Economic Impacts
Section 7.2: Agricultural Impacts (food, animal feed, crops, feedstock)
Section 7.4: Impact on RINs
Section 7.5: Retail Fuel Prices
Section 7.6: Energy Security
Section 7.7: Impact on Jobs and Local/State Economy
Section 8: Environmental Impacts of the Proposed Rule
Section 8.2: Climate Change (GHG Impacts)
Section 10.1: Outlook for 2017 and beyond
Section 10.6.5: Other information and ideas to overcome current challenges
2.5 Proposed Volumes for Advanced Biofuel
Comment:
Algae Biomass Organization (ABO)
EPA's proposed RVOs for 2014-2016 represent a significant improvement over the prior notice
of proposed rulemaking released in November 2013. EPA's November 2013 proposal to
dramatically lower advanced biofuel volumes, combined with the Agency's inability to set
standards in a timely fashion, ongoing delays in approving new fuel pathways and arbitrary
restrictions on biofuels not completely produced within a single location, have crippled
investment in advanced biofuels over the past 18 months. Once finalized, the 2014-2016 RVOs
will provide a first step toward restoring the investment climate for advanced biofuels and
providing market confidence for algae-based and other advanced biofuels in the years to come.
[EPA-HQ-OAR-2015-0111-1951-Al,p.l]
Darling Ingredients Inc.
The second consideration put forward on why Biomass Based Diesel volumes should be limited
is that if the BED is dictated then there would be no incentive for the development of Cellulosic
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and other Advanced Fuels. Darling agrees with the EPA's conclusion. The BED mandate should
not represent all of the Advanced Fuel mandate. However, this goal can be met and there can be
an incentive for other Advanced Biofuels. EPA could increase the BED AND increase Advanced
Biofuels volume. That is the reason that Darling is suggesting that Advanced Biofuels should be
increased above the levels proposed by the EPA for 2016 and 2017. The EPA in the Proposed
Rule establishes that it anticipates 200 million gallons of Cellulosic in 2016 and provides for 500
million gallons of Unspecified Advanced in 2016. Darling proposes to increase Advanced
Biofuels by 350 million RIN's in 2016 which would mean an increase of 200 million gallons of
BED (resulting in approximately 310 million RIN's) and the same incentive for development of
Cellulosic would exist as the EPA has in its Current Proposed Rule. The same logic applies for
Darling's suggested 2017 Advanced Biofuel goal of 4.25 billion RIN's; note the Darling proposal
for 2017 Advanced RIN's slightly increases the available bucket for undifferentiated advanced in
compliance with the aspirational spirit of spurring advanced biofuel production. [EPA-HQ-OAR-
2015-01 ll-1929-Alp.9]
National Biodiesel Board
Each gallon of biomass-based diesel used for compliance with the biomass-based diesel mandate
also meets the advanced biofuel volume and the overall renewable fuel volume requirements. It
offsets the importation of fossil fuels, but also can be used to offset use and imports of at least
1.5 gallons of ethanol, given the equivalence values provided by EPA for biodiesel and
renewable diesel fuels. Thus, through basic arithmetic, the higher EPA sets the biomass-based
diesel standard the less ethanol it can expect to be drawn into the gasoline pool. Conversely, the
lower the Agency sets the biomass-based diesel standard then the more ethanol (including more
sugarcane ethanol, which is a significant source of advanced biofuel) can be expected to come
into the Nation's gasoline pool to, as EPA alleges, contribute to the so-called ethanol blend wall.
EPA uses the so-called ethanol blend wall to support reduced advanced biofuel and total
renewable fuel volumes in the first instance. Then, EPA is choosing to further limit growth in the
biomass-based diesel category to give obligated parties flexibility in complying to lower costs.
But, Congress sought to break through any such limitations and, in any event, gave EPA a tool to
address purported limitations on increasing renewable fuel use in the gasoline market by
increasing the biomass-based diesel program after 2012. The answer to EPA's concerns is not to
keep biomass-based diesel down and reduce the advanced biofuel program based on what EPA
considers to be reasonable in the market, but to continue to aggressively push the industry
forward. If there are such relevant limitations, then EPA was required, as outlined by Congress,
to increase the biomass-based diesel volumes. [EPA-HQ-OAR-2015-0111-1953-A2 p.33]
National Biodiesel Board
Although EPA attempts to somewhat mask the issue by referring to legal and practical
constraints in the gasoline market for increasing ethanol use, the so-called ethanol blend wall
continues to permeate through EPA's new proposal. It does not, however, alleviate EPA's
obligations to ensure the statutory volumes for advanced biofuels are met. EPA looks to its
waiver authority to address the concerns raised regarding the ethanol blend wall. But, Congress
provided a mechanism for EPA to address this concern, within the statutory structure and
without reducing the volumes. That is, increasing the biomass-based diesel volume requirement
in lieu of requiring "[ijncreased production and/or importation of ethanol, primarily advanced
ethanol." 80 Fed. Reg. at 33,118. [EPA-HQ-OAR-2015-0111-1953-A2 p.33]
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National Farmers Union (NFU)
The preamble to the proposed rule states, 'we do not believe that it would be consistent with the
energy security and greenhouse gas reduction goals of the statute to reduce the applicable
volume of renewable fuel set forth in the statute absent a substantial justification for doing so.'
Ideally, the total renewable fuel standard would include the full advanced biofuel standard
embodied in the EISA. If EPA insists on lowering the advanced biofuel standard, EPA can still
achieve many of the goals of the RFS and pave the path to higher advanced biofuel volume
standards in the future by keeping the total renewable fuel standard at the EISA level and
allowing conventional biofuels to make up the difference. [EPA-HQ-OAR-2015-0111-1657-
Al p. 6]
As discussed above, conventional biofuels emit less GHGs than fossil fuels. GHG emissions
reductions can be achieved by allowing conventional biofuels to make up the advanced biofuel
volume deficit and keeping the statutory total renewable fuels volume standards in place. It
would also push the branded transportation fuel industry to make the adjustments needed to
accommodate greater volumes of advanced biofuels, paving the way to secure the superior GHG
emission advantages of advanced biofuels in the future. [EPA-HQ-OAR-2015-0111-1657-A1 p.
6-7]
The volume standards in the proposed rule do not match the goals EPA claims to pursue through
its execution of the RFS. In the Executive Summary that precedes the Proposed Rule, EPA
asserts that the proposed volume standards 'are expected to spur further progress in overcoming
current constraints in renewable fuel distribution infrastructure, which in turn is expected to lead
to substantial growth over time in the production and use of higher-level ethanol blends and
other qualifying renewables.' [EPA-HQ-OAR-2015-0111-1657-A1 p. 7]
Unfortunately, EPA's expectations are mistaken. EPA fails to consider the severe and difficult-
to-reverse damage done to the biofuels industry through the inexcusable delays in issuing the
2014 volume standards. In light of this damage, it does not make sense that lower volume targets
than those set forth in the popular, bipartisan statute will lead to growth in production and use of
higher-level ethanol blends. The proposed, lower volume standards demonstrate to industry that
taking steps to increase consumer choice and pursue worthwhile environmental goals can be
avoided, even when mandated by Congress. Instead, holding industry to the proposed targets
would demonstrate the Administration's stable, reliable commitment to biofuels and allow the
biofuels and transportation fuels industries the certainty required to attract capital investment and
build out the infrastructure needed to offer consumers the opportunity to utilize higher-level
ethanol blends. It would allow the parties concerned to plan ahead with more reliability than
annual determinations, bringing more biofuels into the transportation fuel offerings with less
disruption for American consumers. [EPA-HQ-OAR-2015-0111-1657-A1 p. 7-8]
The George Washington University
The proposed targets for advanced biofuel (a category which includes both cellulosic biofuel and
biodiesel) are 3.85 billion gallons short of the statutory volume levels. [EP A-HQ-OAR-2015-
0111-1815-A1 p.4]
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Response:
As described in Sections II.B.5, II.C, II.D, and II.F of the final rule, we have determined that the
statutory targets for advanced biofuel cannot be reached in 2014, 2015, or 2016 with advanced
biofuel supplied in those years, and that as a result they must be reduced. In making this
determination, we also evaluated the current bank of carryover RINs and determined that it
would not be appropriate to intentionally draw down the carryover RIN bank in order to increase
the volume requirements in any of the three years above the level of supply that can be reached
with wet gallons of advanced biofuel. Furthermore, even if we were to have done so, there
would not have been sufficient carryover advanced biofuel RINs to allow the statutory targets to
be achieved for all three years. For additional responses to comments on our consideration of
carryover RINs, see Section II.H. of the final rule and Section 6 of this RTC document.
Several stakeholders suggested that the BED volume requirement, and/or the portion of the
advanced biofuel volume requirement that is assumed to be met with BED, should be increased
for the express purpose of addressing the E10 blendwall. These stakeholders argued that, since
BED is neither ethanol nor is used in the gasoline pool, it is not limited by the E10 blendwall nor
by gasoline demand. By increasing the volume of BED, they argued, pressure to exceed the E10
blendwall would be reduced. While BED volumes are not directly affected by the E10
blendwall, we do not believe that required volumes of BED should be increased for the express
purposes of reducing pressure on the E10 blendwall. Indeed, the fact that BED is independent of
the E10 blendwall means that we can and should consider increases in BED separately from
increases in ethanol. This is what we have done in determining not just the advanced biofuel, but
also the total renewable fuel volume requirements. Our approach to determining the volume
requirement for total renewable fuel includes both a consideration of the supply of ethanol that
can be achieved given the potential for increases in the use of El 5 and/or E85 and the supply of
biodiesel and renewable diesel that can be achieved. The simultaneous consideration of both of
these factors is most consistent with statutory intent to increase volumes, and thus there is no
need to consider more narrowly how increased use of BED might impact exceedances of the E10
blendwall. We note that opportunities will exist in 2016 for BED volumes in excess of the final
BED volume requirement to be used to meet the final advanced biofuel as well as the total
renewable fuel volume requirements. Indeed such excess volumes of BED may be needed if
other advanced biofuels cannot be supplied cost-competitively in sufficient volumes. In fact, we
have set the advanced biofuel volume requirement under the expectation that additional biodiesel
and renewable diesel will be available in excess of the BED volume requirement.
One stakeholder suggested that the 2016 volume requirement for advanced biofuel be increased
from the proposed level of 3.4 billion gallons to 3.75 billion gallons, while simultaneously
increasing the BED volume requirement from the proposed level of 1.8 billion gallons to 2.0
billion gallons. As discussed in Sections II.E.3 and II.F of the final rule, we have considered
potential increases in the proposed levels in light of new information, higher than expected use of
biodiesel and renewable diesel in 2015 and a consideration of information provided by
stakeholders on the various opportunities and constraints associated with biodiesel and
renewable diesel in 2016. We have determined that increases in the volume requirements for
both advanced biofuel and BED in comparison to the proposed levels are warranted, for the
reasons described in the final rule.
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One stakeholder said that the proposed volumes for conventional renewable fuel in 2014, 2015,
and 2016 would be inconsistent with the statute's intent that the volume requirements increase
every year. This stakeholder based their statement on the fact that the volume requirements for
2013 allowed for the use of 13.8 billion gallons of conventional renewable fuel. In response, we
note first that there is no volume requirement in the statute for conventional renewable fuel.
Rather, conventional renewable fuels are those renewable fuels that are permitted to fill the gap
between the total renewable fuel and advanced biofuel volume requirements. Volumes of
advanced biofuel in excess of the advanced biofuel volume requirement can be used to fill this
gap as well as volumes of conventional renewable fuels. Second, we note that actual supply of
conventional renewable fuel in 2013 fell far short of filling this gap, reaching only 12.8 billion
gallons instead of the 13.8 billion gallons cited by this stakeholder. In comparison to actual 2013
supply of conventional renewable fuel, the proposed allowance for up to 13.25 and 13.4 billion
gallons of conventional renewable fuel for 2014 and 2015, respectively, would have in fact
represented increases. For the final rule, the allowance for conventional fuels is even greater, at
13.61 and 14.05 billion gallons for 2014 and 2015, respectively. However, most importantly, as
described in Sections II. C and II.D of the final rule, we are setting the volume requirements for
2014 and 2015 at the level of actual supply, and we believe that this is both reasonable and
consistent with the statute. The standards we set in today's final rule cannot affect supply in
2014 or most of 2015, and as described in Section 6 we do not believe it would be appropriate to
intentionally reduce the bank of carryover RINs in order to increase the volume requirements in
2014 and 2015 above the level of actual supply.
For responses to comments on the use of the cellulosic waiver authority alone to reduce volumes
of advanced biofuel and total renewable fuel, see Section 2.2.1.
For responses to comments on whether the statutory volume requirements can be reached in
2014, 2015, or 2016, under either the general waiver authority or the cellulosic waiver authority,
see Section 2.2.4.
For responses to comments on the ability of the 2016 market to increase sales of E15, see Section
2.6.2 and 2.7.1.
For responses to comments on the consideration of opportunities for other advanced biofuels
when determining the required volume of BED, see Section 3.3.1.
2.5.1 Proposed Advanced Biofuel Volume for 2014
Comment:
Abengoa Bioenergy
EPA's proposed methodology for setting the 2014 and 2015 RVOs based on available RINs
generated during the year is arbitrary. The exclusion of consideration of carryover RINs is also
arbitrary. As EPA notes, the availability of RINs in 2014 is dependent on settling the 2013
obligations, which the Agency has delayed at the request of obligated parties. EPA cannot use its
unconscionable and arbitrary delays as justification for excluding consideration of carryover
RINs. Instead, the Agency must set the 2014 and 2015 RVOs based on the full availability of
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RINs and without setting artificial and unwarranted limits based on purported infrastructure
constraints. Otherwise, EPA risks creating a regulatory structure that effectively makes Clean Air
Act compliance by Obligated Parties voluntary rather than compulsory. [EPA-HQ-OAR-2015-
0111-2474-A1 p.5-6]
The Agency drafted its proposed 2014 volumes, presented in TABLE II.C.1-1 in the proposal,
using March 2015 data from EMTS as well as export data from EIA.8 However, since that time,
the availability of RINs for 2012, 2013, 2014, and 2015 shown in EMTS has changed
considerably, even as demonstrated by EPA's posting of April 2014 EMTS data to the docket. A
one-time snapshot of EMTS data is therefore an inherently inaccurate estimate of the availability
of RINs for compliance for 2014 and 2015. [EPA-HQ-OAR-2015-0111-2474-A1 p. 13]
EPA excludes consideration of 'RINs retired for reasons other than compliance with the annual
standards, as these RINs are not available to obligated parties." Since the Agency did not post to
the docket the March 2015 data it used in calculating the 2014 RIN supply, it is impossible for
stakeholders to guess how it arrived at volume corrections. If EPA excludes RINs retired for
Enforcement Obligations, Remedial Action - Retirement Pursuant to 80.143 l(c), and
Remediation of Invalid RIN Use for Compliance, then it is unjustified. By definition such RINs
were retired by obligated parties and were therefore available to them. [EPA-HQ-OAR-2015-
0111-2474-A1 p.13]
The export data reported by EIA (and relied upon by EPA) come from U.S. Census Bureau data.
According to the Census Bureau, 836 million gallons of ethanol for fuel use and industrial use
were exported from the United States in 2014. Of this amount, 370.2 million gallons of fuel and
industrial ethanol exports were undenatured and would not have generated a RIN. The RFS
regulations require that ethanol be denatured in order to qualify as renewable fuel and generate
RINs. Exporters of undenatured ethanol do not incur an exporter RVO because they are not
exporting renewable fuel as defined by 40 CFR 80.1401. [EPA-HQ-OAR-2015-0111-2474-A1
p.13]
EPA estimates that 83 million gallons of biomass-based diesel were exported in 2014,
representing the maximum amount estimated by EIA. However, similar to ethanol exports there
is no reason to believe that every gallon carried a REST. In 2012, EIA reports that 128 million
gallons of biomass-based diesel were exported; yet, only 69.4 million RINs were separated from
exported fuel (representing 46.3 million gallons). For 2012, EIA estimates 196 million gallons
were exported; yet only 159 million RINs were reported separated from exported fuel
(representing 106 million gallons). EPA is likely overestimating biodiesel exports by a factor of
two (2). Denatured fuel ethanol exports totaled 453 million gallons in 2014. To date, 236.7
million 2014 vintage D6 RINs have been reported as exports. [EPA-HQ-OAR-2015-0111-2474-
Al p.14]
8 Id. at 33122.
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Biotechnology Industry Organization
EPA has not reasonably and persuasively demonstrated that actual 2014 volumes of advanced
and total renewable fuels, plus carryover RINs, will be inadequate to meet the 2014 RFS RVOs.
[EPA-HQ-OAR-2015-0111-1958-A2 p. 26]
As EPA has said (particularly referring to advanced biofuel volumes), maintaining statutory
renewable fuel volumes "will result in reduced GHG emissions from the transportation sector
and could also contribute to energy security objectives. We do not believe it is appropriate to
forgo such benefits when they are physically achievable."102 [EPA-HQ-OAR-2015-0111-1958-
A2 p. 26]
The availability of RINs for 2012, 2013, 2014, and 2015 shown in EMTS has changed
considerably, even as demonstrated by EPA's posting of April 2014 EMTS data to the docket. A
one-time snapshot of EMTS data is therefore an inherently inaccurate estimate of the availability
of RINs for compliance for 2014 and 2015. [EPA-HQ-OAR-2015-0111-1958-A2 p. 57]
If EPA excludes RINs retired for Enforcement Obligations, Remedial Action - Retirement
Pursuant to 80.143 l(c), and Remediation of Invalid RIN Use for Compliance, then it is
unjustified. By definition such RINs were retired by obligated parties and were therefore
available to them. [EPA-HQ-OAR-2015-0111-1958-A2 p. 57]
EPA estimates that 83 million gallons of biomass-based diesel were exported in 2014,
representing the maximum amount estimated by EIA. However, similar to ethanol exports there
is no reason to believe that every gallon carried a REST. In 2012, EIA reports that 128 million
gallons of biomass-based diesel were exported; yet, only 69.4 million RINs were separated from
exported fuel (representing 46.3 million gallons). For 2012, EIA estimates 196 million gallons
were exported; yet only 159 million RINs were reported separated from exported fuel
(representing 106 million gallons). EPA is likely overestimating biodiesel exports by a factor of
two (2). [EPA-HQ-OAR-2015-0111-1958-A2 p. 58]
102 EPA, Regulation of Fuels and Fuel Additives: 2013 Renewable Fuel Standards, 78 Fed. Reg.
9281, 9300 (Feb. 7, 2013) (proposed rule), available at http://www.gpo.gov/fdsys/pkg/FR-2013-
02-07/pdf/2013-02794.pdf (emphasis added); see also 2013 RFS Final Rule 49794 (maintaining
statutory advanced biofuel and total renewable fuel volumes for 2013).
California Biodiesel Alliance (CBA)
2014
For 2014, the EPA proposed to use its waiver authority to reduce the 3.75 billion statutory
mandate set by Congress for the advanced category, and rather, set the advanced and biomass-
based diesel based on "available RIN supply." CBA disagrees with this approach for the reasons
spelled out in the NBB comments (Inappropriate use of waiver authority, EPA's lack of
consideration of the prior-year RINS, improper consideration of "RIN supply" as opposed to
"actual production," etc.) [EPA-HQ-OAR-2015-0111-1910-A1, pp. 1-2]
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Countrymark Cooperative Holding Corporation
In November 2013, EPA proposed the 2014 Standards for the Renewable Fuels Standard. This
rulemaking was never finalized; however, this was CountryMark's planning basis for RFS
compliance for 2014. The new proposed 2014 standards are different than those proposed in
2013 as outlined by the Table 1 below. [EPA-HQ-OAR-2015-0111-2264-A1 p. 2]
[The table can be found on p. 3 of Docket number EPA-HQ-OAR-2015-0111-2264-A1]
CountryMark nor any company should be financially penalized because EPA did not set the
compliance standards in a timely fashion. Therefore, we recommend that the 2014 standards
remain the same as those proposed in November 2013 which is closer to the intended
timeline set by the law. [EPA-HQ-OAR-2015-0111-2264-A1 p. 3]
Crimson Renewable Energy LP
Based on the actual production of biomass-based diesel, EPA should set the 2014 biomass-based
diesel RVO at 1.8 billion and should hold the statutory volume for advanced at 3.75 billion.
[EPA-HQ-OAR-2015-0111-1823-A1 p. 1]
Iowa Corn Growers Association (ICGA)
Furthermore, the EMTS reveals that 0.336 million gallons of imported biodiesel were
disqualified from getting D4 RINS and were instead given D6 RINs, due to low GHG scores for
their particular LCA pathway. Both of these "oversights" lead to a much larger total D6 RIN
RVO for 2014!" [EPA-HQ-OAR-2015-0111-1820-A1 p. 3]
Kansas Soybean Association
As a soybean farmer from Melvern Ks, I want to express my view that EPA should support more
aggressive, but achievable, Renewable Fuel Standard (RFS) volume targets for biodiesel. [EPA-
HQ-OAR-2015-0111-2340 p. 1]
National Biodiesel Board
Because of RIN banking plenty of prior-year RINs exist for compliance with 2014 requirements
and can roll forward and flood subsequent year requirements. Therefore, standards for the past
must affect the past or they will certainly do so in the present and the future. Thus, EPA does not
provide a reasoned explanation why it cannot meet its obligation and follow its prior precedent
from 2009/2010 to "ensure" the 3.75 billion gallon requirement for advanced biofuel is met.
[EPA-HQ-OAR-2015-0111-1953-A2p.l6]
Given the carryover RINs and the production that occurred in 2014 (despite EPA's delay), there
would be a minimal impact on future volume requirements for advanced biofuels if EPA
enforced the full 2014 statutory volume for advanced biofuel. At most any deficit carryover into
2015 would be approximately 121 million RINs, representing a mere 78 million biomass-based
diesel gallons (6.5 million gallons a month). This is an additional volume easily met by the
industry. [EPA-HQ-OAR-2015-0111-1953-A2 p.17]
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It may be appropriate to consider these corrections as they may not technically represent gallons
of fuel. EPA, on the other hand, notes 82 million "corrections" for advanced biofuels (EPA-HQ-
OAR-2015-0111-0004). However, other retirements do not reflect lack of "supply." Rather, they
represent a decision to utilize those gallons for other purposes or other actions by the fuel
owners, such as spills and remedial actions. EPA should incentivize parties to protect against
such actions and focus on ensuring those fuels are used as transportation fuel, jet fuel or heating
oil. As such, there is no justification to reduce the amount of fuel "supply" by these types of
"corrections." Nor does EPA provide any justification for making such "corrections." [EPA-HQ-
OAR-2015-0111-1953-A2p.l8-19]
For similar reasons, EPA should not consider exports to lower the "supply" in setting the
standards for 2014. It is improper to count exports to reduce estimated "supply." [EPA-HQ-
OAR-2015-0111-1953-A2 p. 19]
EPA does not provide adequate explanation why export estimates from the Energy Information
Administration are proper. Not all gallons of renewable fuel are RFS2 eligible, and EPA
recognized renewable fuel designated for export need not have RINs. 75 Fed. Reg. 14,670,
14,715 (Mar. 16, 2010); 79 Fed. Reg. 42,078, 42,102 (July 18, 2014). It cannot be certain that the
90 _
EIA-reported exports are RFS2 fuels. Even if EPA can properly reduce "supply" based on
exports, which it cannot, the amount of RINs separated based on exports is more appropriate to
use. EPA identifies approximately 108.57 million RINs as having been separated based on
export. This better represents the RFS2 fuel that is no longer in the domestic supply since the
producer (or purchaser) targeted the RFS2 eligible fuel for use outside the United States. [EPA-
HQ-OAR-2015-0111-1953-A2 p.19]
Rather than set the volume at 1.7 billion gallons in 2014 based on production, EPA proposes a
biomass-based diesel volume of 1.63 billion gallons based on "RIN Supply." As explained
above, NBB believes that EPA must set the volume at actual production of gallons, not based on
"RIN Supply" for compliance. [EPA-HQ-OAR-2015-0111-1953-A2 p.22]
Phillips 66 Company
There is an increase in each category RVO percentage versus the proposal issued in 2013, with
the exception of the total renewable. Theoretically, for obligated parties that used the 2013
published percentages to guide their renewable purchases and blending, they will now be short
D3, D4, and D5 RINs if the new proposed percentages are finalized. [EPA-HQ-OAR-2015-
0111-2039-A1 p.2]
Renewable Energy Group, Inc. (REG)
REG believes that EPA's method of calculating the number of RINs supplied in 2014 for
biomass-based diesel is not accurate. Rather than set the volume at 1.7 billion gallons in 2014
based on production, EPA proposes a biomass-based diesel volume of 1.63 billion gallons based
on "RIN Supply." EPA has proposed to define "supply" as "the number of BED RINs that were
available for compliance in 2014." "Supply would thus include RINs that were generated for
renewable fuel produced or imported in 2014 as recorded in EMTS, minus any RINs that have
already been retired or would be expected to be retired to cover exports of renewable fuels or for
any other purpose other than compliance." REG believes that EPA must set the volume at actual
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production, not based on "RIN Supply" for compliance. The volume for 2014, then, should be at
least 1.8 billion gallons to account for the additional renewable diesel production (2.7 B
RINs/1.5 EV =1.8 B). This number already accounts for "corrections" based on invalid RINs or
volume errors, but NBB does not believe further reductions are necessary to reflect other RIN
retirements, including exports. [EPA-HQ-OAR-2015-0111-1952-A1 p.4]
Response:
One stakeholder said that, according to EMTS, some imported volumes of biodiesel in 2014
were disqualified from being advanced biofuel due to low GHG benefits and instead were
categorized as conventional renewable fuel. This stakeholder referred to this categorization as an
"oversight." We are not aware of any information in EMTS, or any other source, that indicates
any miscategorization of imported biodiesel. We have used information from EMTS on RINs
generated in 2014, including those generated for imports, along with adjustments to account for
RINs removed from circulation due to events such as spills and fuels not used as transportation
fuel, to determine the RINs available for compliance in 2014. The stakeholder making this
comment provided no information indicating an error in this these calculations.
Several stakeholders argued that producers never generated RINs for some biodiesel that was
exported, and thus all biodiesel exports should not have been subtracted from the number of
biodiesel RINs generated in 2014 in assessing the 2014 domestic supply of biodiesel. However,
we do not believe that the discrepancies between EMTS and EIA data on biodiesel exports can
credibly be used to assess the volume of exported biodiesel for which RINs were not
generated. As a preliminary matter, we note that the discrepancy between EMTS data on
biodiesel RINs separated for biodiesel intended for export and EIA data on biodiesel exports is
much smaller for 2014 than it was for previous years - the difference is only 10 million gallons.
More importantly, publically reported data from EMTS includes REST separations for exported
biodiesel, but does not report RIN retirements for biodiesel exported in 2014. Since exporters
can receive biodiesel without assigned RINs and can retire RINs to address exports of renewable
fuel using RINs acquired on the open RIN market, the number of RINs separated from biodiesel
as recorded in EMTS is likely to underestimate the actual number of RINs retired for
exports. We also note that almost all biodiesel that is produced in the U.S. qualifies for RIN
generation, unlike the situation for ethanol where RINs may be generated for denatured ethanol,
but not for undenatured ethanol. Finally, since October of 2014 renewable fuel exporters have
been required to retire RINs for all exported renewable fuel within 30 days of the exportation.
As a result, we were able to compare RINs retired for exports that occurred in 2015 (not merely
RINs separated from exported renewable fuel) to renewable fuel exports as reported by the
International Trade Commission (ITC). We determined that exports as recorded in EMTS are
nearly identical to exports as recorded by ITC. In sum, we conclude that there is imperfect data
with respect to the number of RINs generated and retired for biodiesel that is
exported. However, we believe it is likely that RINs were generated and then retired for most of
the exported biodiesel. Commenters did not suggest a more accurate means of assessing the
situation than our proposed approach of assuming that RINs were generated and retired for all
biodiesel exports reported by EIA. While there is some uncertainty in our estimate of RINs
retired for biodiesel exports, we do not expect that any error would be significant.
Several stakeholders said that the volume requirement in 2014 should be based on actual
production of renewable fuel in 2014, without accounting for exports or for any reduction in the
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number of RINs available for compliance due to such circumstances as exports, spills, invalid
RINs generation, remedial actions in connection with an enforcement actions, etc. We
disagree. Only qualifying volumes of renewable fuel can be considered in setting the applicable
renewable fuel volumes, and RINs retired for such circumstances as exports, spills, etc. no longer
qualify as a means of compliance under the RFS program. As described more fully in Section
II.C of the final rule, we are setting the volume requirements for 2014 at the level of supply,
where supply means renewable fuels used in the U.S. as transportation fuel, heating oil, or jet
fuel. Some renewable fuel (particularly renewable diesel) that was produced in 2014, and for
which RINs were generated, was either not used in the U.S. in 2014 and thus is not available for
compliance with the volume requirements under the regulations (e.g. foreign-produced
renewable fuel that was never imported into the U.S.), or the RINs associated with that
renewable fuel were invalid for a variety of reasons. In such cases, it is appropriate to subtract
such RINs from the total number of RINs generated to ensure that we have accurately
determined the number of RINs available for compliance. Setting the 2014 volume requirements
above the level of actual qualifying supply would not change the fact that some 2014 RINs were
retired because they were not used as transportation fuel, heating oil, or jet fuel in the U.S. and
are thus not available for compliance. Also, there is no reason to believe that setting the 2014
volume requirements above the level of actual supply would provide additional incentive for
regulated parties to avoid circumstances in the future that lead to RIN retirements for renewable
fuel not used as transportation fuel, heating oil, or jet fuel in the U.S.
For responses to comments on whether the statutory volume requirements can be reached in
2014, 2015, or 2016, see Section 2.2.4.
For additional responses to comments on the determination of the 2014 volume requirements, see
Section 2.4.1.
For responses to comments on the role of carryover RINs in the RFS program and suggestions
that they could be used to increase the volume requirements, see Section 6. See also "Estimating
Carryover RINs Available for Use in 2014," Dallas Burkholder, Office of Transportation and Air
Quality, US EPA. November 2015. EPA Air Docket EPA-HQ-OAR-2015-0111.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.2 Statutory Authorities for Reducing Volume Targets
Section 2.2.2.1 Inadequate Domestic Supply
Section 2.5.2 Proposed Advanced Biofuel Volume for 2015
Section 2.5.3 Proposed Advanced Biofuel Volume for 2016
Section 2.3 Proposed Approach to Determining Volume Requirements
Section 2.7.2 Impacts on Advanced Biodiesel Production and Imports
Section 3.2.3 Imports of BED
Section 5 Proposed Percentage Standards
Section 8.2 Climate Change (GHG Impacts)
Section 10.2.2 Statutory Deadlines
Section 10.6.3 RIN-Generating Pathway Approvals
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2.5.2 Proposed Advanced Biofuel Volume for 2015
Comment:
Abengoa Bioenergy
'If this reduction had not occurred in 2014, total advanced biofuel volumes could have been
above 3.00 billion gallons.' The Agency is proposing to allow obligated parties to establish the
market for renewable fuels for a second year in a row 'absent a rulemaking,' which will create a
situation where 'actual supply in 2015 may be no different than it was in 2014.' [EPA-HQ-OAR-
2015-0111-2474-A1 p. 15]
Advanced Biofuels Association (ABFA)
We are encouraged with both the 2015 and 2016 proposed numbers as they send a strong signal
of support for the advanced and cellulosic sector, and we believe these are achievable targets
given the new plants and the addition of biogas production facilities coming on line. [EPA-HQ-
OAR-2015-0111-2498-A1 p. 11] American Council on Renewable Energy (ACORE)
USEPA's proposed 2014 RVO for advanced biofuel is reasonable and should slightly increase its
2015 RVO to 2.95 million gallons and its 2016 RVO to 3.5 million gallons to take into account
the higher production of cellulosic ethanol. [EPA-HQ-OAR-2015-0111-1926-A1 p.14]
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
As the rule is not expected to be finalized until November 30, 2015, obligated parties will not be
able to significantly change their compliance strategies for 2015. As such, EPA should finalize
the same percentage standards that were published in the Proposed Rule. This is an
equitable method for doing so, since it will give obligated parties a chance to comply. The
proposal represents the best information available for obligated parties to use when developing
compliance strategies for 2015. [EPA-HQ-OAR-2015-0111-1948-A1 p. 18] Biotechnology
Industry Organization
EPA is similarly unjustified in proposing to set the 2015 RVOs according to "what actually
happens" in 2015 and in consideration of "constraints imposed by the ability of vehicles and
engines to use renewable fuels, particularly ethanol."196 EPA has not attempted an adequate
analysis of the availability of such vehicles or the availability of RINs in 2015 sufficient to
justify such a claim. EPA should fully consider setting the 2015 and 2016 RVOs at the statutory
volumes, or adequately justify why it cannot do so, and must set volumes at the maximum
numbers achievable. [EPA-HQ-OAR-2015-0111-1958-A2 p. 59]
The agency is proposing to allow obligated parties to establish the market for renewable fuels for
a second year in a row "absent a rulemaking,"200 which will create a situation where "actual
supply in 2015 may be no different than it was in 2014."201 [EPA-HQ-OAR-2015-0111-1958-A2
p. 60]
196 Proposed Rule 33122.
200 Mat 33131.
201
Idat33U2.
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Clean Air Task Force
CATF supports EPA's proposal to reduce the 2015 and 2016 advanced biofuel RVOs by close to
the full amount that it plans to reduce the cellulosic RVOs.3 [EPA-HQ-OAR-2015-0111-1828-
Al p.2]
3 EPA has proposed to reduce the RVOs for cellulosic and advanced biofuels by 2.9 billion
gallons and 2.6 billion gallons, respectively. In the 2016, the proposed reductions come to 4.04
billion gallons (cellulosic) and 3.85 billion gallons (advanced).
Growth Energy
For 2015, EPA proposed to set the renewable fuel requirement 370 mil gal above the proposed
2014 level. "Much of the increase from 2014"—about 220 mil gal—"would result from the
increase in the advanced biofuel standard of 2.90 billion gallons" (compared to 2.68 bil gal for
2014).63 Thus, EPA's 2015 proposal implies that conventional renewable fuels would grow by
150 mil gal from 2014, to 13.4 bil gal, instead of to the statutorily implied level of 15.0 bil gal.
EPA declared that this growth "is possible" because in 2014 renewable fuel grew by 390 mil
gal.64 [EPA-HQ-OAR-2015-0111-2604-A2 p.ll]
International Council on Clean Transportation (ICCT)
While we believe that the decision to use this waiver is correct, we believe that given limits on
availability of non-cellulosic advanced biofuels and advanced biofuel feedstocks that it would be
appropriate for the EPA to utilize its full waiver authority to reduce advanced biofuel volumes
further than currently proposed, by the same amount as the reduction in the cellulosic volume.
Given the proposed cellulosic volume mandate, this would result in a requirement for 2.606 and
3.206 billion gallons of advanced biofuel in 2015 and 2016, respectively, compared to the
proposal for 2.9 and 3.4 billion gallons in 2015 and 2016.
Making these adjustments to the advanced mandate would reduce the likelihood of the following
situations: increases to BED production much larger than intended by EPA, resulting in very
large impacts on the US vegetable oil market; and very high demand for limited supplies of
Brazilian sugarcane ethanol, bidding up the price to little environmental benefit. [EPA-HQ-
OAR-2015-0111-1923-A1 p 8] National Biodiesel Board
EPA makes clear in its discussion of biomass-based diesel that its advanced biofuel volume is
not based on maximum achievable volumes but on EPA's view of the level that provides a
"competitive" market. [EPA-HQ-OAR-2015-0111-1953-A2 p.112]
To consider the maximum amount, then, EPA must consider what the industry could achieve.
Although since the RFS2, the largest amount of sugarcane ethanol imports reported by EMTS
has been 603 million gallons, more are possible. In addition, other, non-ethanol advanced
biofuels continue to grow, and there has been continued research into co-processing to produce
transportation fuel (D5). [EPA-HQ-OAR-2015-0111-1953-A2 p. 113-114]
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North Dakota Ethanol Council
We are also concerned that the proposed 2.9 billion gallon 2015 RVO for advanced biofuels will
incent imported sugarcane-based ethanol due to the instability of the biodiesel production credit
and its impact on biodiesel production. Shortfalls in biodiesel production will likely be met by
imported advanced biofuels driven by inflated RIN values improperly incentivizing imported
ethanol into a market that has yet to properly address market expansion. We believe all ethanol
market expansion should be met with conventional and other nationally produced products.
[EPA-HQ-OAR-2015-0111-1927-A1 p. 2]
Phillips 66 Company
EPA needs to finalize the 2015 standards as proposed (with the exception of biomass-based
diesel discussed below). The 2015 final rule will not be published until very close to the end of
the year. Currently, the recently issued proposal is the only guidance on which obligated parties
have to base their compliance planning and strategies on. Changing the provisions retroactively
for 2015, as has been done for 2014, would once again result in a negative impact to obligated
parties and must be avoided. [EPA-HQ-OAR-2015-0111-2039-A1 p.2]
Response:
One stakeholder said that EPA had not conducted an adequate analysis of constraints associated
with use of renewable fuels in vehicles or engines, and had not conducted an adequate analysis
of the availability of RINs in 2015. For the proposed 2015 volume requirements, Section II.C.2
of the NPRM discussed a number of constraints that made significant growth from 2014 very
difficult. Most importantly, we noted in the NPRM that the release of the proposed volume
requirements was occurring after about half of 2015 had passed, reducing the ability of those
proposed volume requirements to influence the market.
Although we proposed 2015 volume requirements based on projections of what we believed was
achievable, we are establishing the final 2015 advanced biofuel volume requirement based on
actual supply in 2015, using data available through September and a projection of what will be
supplied in the remaining months of the year. Given that this final rule is being released after
nearly the full year has passed, the final advanced biofuel volume requirement for 2015 will have
essentially no ability to influence actual supply in 2015. Moreover, actual supply in 2015 will
fall far short of the statutory targets for 2015 based on actual supply through September. While
we have determined that it would not be appropriate to intentionally draw down the bank of
carryover RINs in order to increase the volume requirements for 2015, even if we were to do so
the statutory target for advanced biofuel for 2015 could not be met.
One stakeholder believed that the proposed volume requirement for advanced biofuel for 2015
was too high, and suggested that we use the full amount of reduction in advanced biofuel that is
permitted under the cellulosic waiver authority to avoid increases in biodiesel and sugarcane
ethanol due to their impacts on food markets. In the context of the NPRM, this would have
resulted in a 2015 volume requirement for advanced biofuel of 2.606 billion gallons, a level
below what we believed at that time was achievable. In the context of this final rule, this
approach would result in a 2015 volume requirement for advanced biofuel of 2.623 billion
gallons. However, we do not believe this approach would be appropriate as it would mean that
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the volume requirement for 2015 would be below the actual supply of advanced biofuel in 2015,
which we have estimated at 2.88 billion gallons.
One stakeholder claimed that our proposed 2015 advanced biofuel volume requirement of 2.90
billion gallons was not based on maximum achievable volumes, but was instead based on a level
that would provide for a competitive market. We believe that this stakeholder was confusing
factors considered in setting the advanced biofuel standard with factors considered in setting the
BED standard. Our consideration of competition was not a factor in the determination of the
advanced biofuel volume requirement, but rather in the contribution that the BED volume
requirement would make to advanced biofuel:
"At the same time, the increase in the required BED volume that we are proposing
still leaves a substantial volume under the advanced biofuel standard open for
competition among all qualifying advanced biofuels" (80 FR 33102)
This stakeholder further argued that competition was not a valid consideration in the
determination of reductions in advanced biofuel, but that the maximum achievable volume is the
only valid consideration. We disagree. While we are reducing volumes of total renewable fuel
under both the cellulosic and the general waiver authority, we are reducing volumes of advanced
biofuel under the cellulosic waiver authority only. As a result, the applicable criteria for
reducing advanced biofuel differ from those used to reduce total renewable fuel. For total
renewable fuel, we are using the statutory criterion of inadequate domestic supply. However,
under the cellulosic waiver authority there are no specific criteria given in the statute for the
conditions under which reductions may be made. For 2015, we are setting the volume
requirement for advanced biofuel at the level of actual supply, as discussed more fully in Section
II.D of the final rule. Thus for 2015, there was no need to consider specific criteria for
reductions in the statutory targets. For 2016, however, we have taken into consideration a broad
set of factors in determining the appropriate reduction in advanced biofuel using the cellulosic
waiver authority. These factors include not only the various constraints described in Section
II.E.l of the final rule, but also the additional benefits associated with advanced biofuels,
uncertainty in imports, and existing patterns of feedstock consumption for competing uses. In
this context, competition could be a valid consideration if it promoted the overall goals of the
RFS program.
For further discussion of considerations of competition in the determination of the BED volume
requirements, see Section 3.3.1.
For responses to comments on our projections of cellulosic biofuel, see Section 4.
For responses to comments indicating that EPA should finalize the same 2015 percentage
standards as proposed in the NPRM, see Section 2.4.2.
For responses to comments on whether the statutory volume requirements can be reached in
2014, 2015, or 2016, see Section 2.2.4.
For responses to comments related to imports of sugarcane ethanol, see Section 2.7.4.
For responses to comments on the role of carryover RINs in the RFS program and suggestions
that they could be used to increase the volume requirements, see Section 6.
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For responses to comments on the relative role of domestic versus imported renewable fuels in
meeting the volume requirements under the RFS program, see Section 2.1.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.2 Statutory Authorities for Reducing Volume Targets
Section 2.2.2.1 Inadequate Domestic Supply
Section 2.2.3 Combining Authorities for Reductions in Advanced Biofuel and Total
Section 2.4.1 Proposed Total Renewable Fuel Volume for 2014
Section 2.4.3 Proposed Total Renewable Fuel Volume for 2016
Section 2.5.1 Proposed Advanced Biofuel Volume for 2014
Section 2.5.3 Proposed Advanced Biofuel Volume for 2016
Section 2.7.5 Impacts on Imports of Conventional Biodiesel
Section 3.2.3 Imports of BED
Section 3.2.5 Federal Tax Credit for Biodiesel
Section 7.2 Agricultural Impacts (food, animal feed, crops, feedstock)
Section 7.4 Impact on RINs
Section 8 Environmental Impacts of the Proposed Rule
Section 10.6.8 Biointermediates
2.5.3 Proposed Advanced Biofuel Volume for 2016
Comment:
Advanced Biofuels Association (ABFA)
We are encouraged with both the 2015 and 2016 proposed numbers as they send a strong signal
of support for the advanced and cellulosic sector, and we believe these are achievable targets
given the new plants and the addition of biogas production facilities coming on line. [EPA-HQ-
OAR-2015-0111-2498-A1 p. 11]
Advanced Economic Solutions (AES)
Advanced and Biodiesel Proposed RVOs: The proposed advanced biofuel RVO during 2016 has
significant consequences for biodiesel feedstock requirements. EPA should consider reducing
the 2016 advanced biofuel RVO to the level proposed for 2015 (2.90 B gallons). [EPA-HQ-
OAR-2015-0111-1193-A1 p.2]
Excluding the carve-out for cellulosic biofuels (.206 B gallons), a total of 3.194 B gallons of
advanced biofuels would be required during 2016. Given the challenge of the 10% blend wall,
AES assumes nearly all of the advanced biofuel RVO would be met with increased biodiesel
utilization. Converting to biodiesel "wet" gallons[l], an advanced RVO (beyond cellulosic
biofuel) of 3.194 B gallons would equate nearly 2.1 B gallons of biodiesel to be utilized during
2016. This would represent a 14% increase from projected 2015 biodiesel usage. [EPA-HQ-
OAR-2015-0111-1193-A1 p.2]
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AES recommends that the EPA reduce their proposed 2016 advanced biofuel RVO to 2.90 B
gallons, the same level as the 2015 proposed level. [EPA-HQ-OAR-2015-0111-1193-A1 p.3]
[1] Utilizing a conversion of 1.537 wet gallons to ethanol-equivalent gallons (same as 2014)
American Council on Renewable Energy (ACORE)
USEPA's proposed 2014 RVO for advanced biofuel is reasonable and should slightly increase its
2015 RVO to 2.95 million gallons and its 2016 RVO to 3.5 million gallons to take into account
the higher production of cellulosic ethanol. [EPA-HQ-OAR-2015-0111-1926-A1 p.14]
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
EPA presents several potential scenarios totaling 3.4 billion gallons in the Proposed Rule,
but as discussed above, these scenarios use unprecedented volume assumptions. These
volumes cannot be expected to be achieved in light of supply constraints for 2016, and EPA
should finalize a lower advanced biofuel volume standard for 2016.
Our recommended forecast of advanced biofuel volumes available in 2016 is summarized in
the table below. The advanced biofuel volume standard for 2016 should be set at 2.9 billion
gallons. [EPA-HQ-OAR-2015-0111-1948-A1 p.24]
Biotechnology Industry Organization
EPA's proposed rule will destroy incentives to invest in development of advanced and cellulosic
biofuels by eliminating both incentives for new methods of compliance beyond E10 and the
profits of conventional biofuel producers who are most likely to be first-adopters of the
technology.128 As Matt Merritt, a spokesman for POET, put it, "Anything you do to hurt the
profitability of the grain ethanol producers is going to hinder their ability to invest in this new
technology as well."129 [EPA-HQ-OAR-2015-0111-1958-A2 p. 38]
2. EPA should set the 2015 and 2016 RVOs for advanced and overall RVOs at the full statutory
volumes. EPA has not met its burden to reduce the volumes. [EPA-HQ-OAR-2015-0111-1958-
A2p. 61]
Brazilian Sugarcane Industry Association (UNICA)
UNICA further urges EPA to consider raising the volumes of advanced biofuels and total
renewable fuels to ensure that sugarcane ethanol can continue to play such an important role in
fostering compliance. As will be discussed in more detail below,34 currently, sugar cane ethanol-
derived D-5 RINs compete with biodiesel D-4 RINs for these two fuel categories, and biodiesel
has enjoyed a tax credit which does not exist for sugarcane ethanol as well as a higher EV. If
EPA reduces the volumes for advanced biofuels and total renewable fuels by too great a volume,
it may make it considerably more difficult for sugarcane ethanol to compete for those lower
volumes, adversely impacting imports and the utility of sugarcane ethanol as a key piece of the
RFS2 program. EPA should take this differential treatment into consideration. [EPA-HQ-OAR-
2015-0111-2495-A1 p. 14]
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34 See infra at Section IV.
Butamax Advanced Biofuels, LLC
EPA should as much as possible minimize waivers that lessen the statutory volumes. This
maximizes conformance with legislative intent while providing stakeholders with the strongest
possible confidence as they plan their long-term commercial, investment and compliance
strategies. [EPA-HQ-OAR-2015-0111-1938-A2 p. 4]
California Dairy Campaign
We do however support the development and expansion of advanced biofuels. We are concerned
that a reduction in the advanced biofuels mandate will increase risk and discourage investment in
new technologies and production facilities. [EPA-HQ-OAR-2015-0111-1816-A1 p.l]
Although we object to using corn to produce ethanol, we do support the development of
advanced biofuels using other methods. [EPA-HQ-OAR-2015-0111-1816-A1 p.2]
Canola Council of Canada
2. EPA Should Continue to Support Expansion of Biofuel Use Under the RFS2 Program.
The Canola Council agrees with EPA that it should ensure continued growth in the use of
renewable fuels in the United States. In particular, EPA has previously stated that "it would not
be consistent with the energy security and greenhouse gas reduction goals of the statute to reduce
the applicable volume of advanced biofuel set forth in the statute if there are sufficient volumes
of advanced biofuels available, even if those volumes do not include the amount of cellulosic
biofuel that Congress may have desired."9 EPA also previously found greater increases in the
biomass-based diesel volume requirement would better ensure that the statutory volumes are
met.10 The Canola Council believes that the canola industry can continue to provide significant
and growing contributions to the program, and help ensure the required volumes are met. [EPA-
HQ-OAR-2015-0111-2484-A1 p.3-4]
Clean Air Task Force
CATF supports EPA's proposal to reduce the 2015 and 2016 advanced biofuel RVOs by close to
the full amount that it plans to reduce the cellulosic RVOs.3 [EPA-HQ-OAR-2015-0111-1828-
Al p.2]
3 EPA has proposed to reduce the RVOs for cellulosic and advanced biofuels by 2.9 billion
gallons and 2.6 billion gallons, respectively. In the 2016, the proposed reductions come to 4.04
billion gallons (cellulosic) and 3.85 billion gallons (advanced).
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Cool Planet Energy Systems
We also would like to compliment the EPA in providing clear support for Advanced biofuels that
is separate from the D6 corn ethanol pool. We support the proposing of 2.9 and 3.4 billion
gallons for 2015 and 2016. [EPA-HQ-OAR-2015-0111-2572 p. 1]
Darling Ingredients Inc.
The second consideration put forward on why Biomass Based Diesel volumes should be limited
is that if the BED is dictated then there would be no incentive for the development of Cellulosic
and other Advanced Fuels. Darling agrees with the EPA's conclusion. The BED mandate should
not represent all of the Advanced Fuel mandate. However, this goal can be met and there can be
an incentive for other Advanced Biofuels. EPA could increase the BED AND increase Advanced
Biofuels volume. That is the reason that Darling is suggesting that Advanced Biofuels should be
increased above the levels proposed by the EPA for 2016 and 2017. The EPA in the Proposed
Rule establishes that it anticipates 200 million gallons of Cellulosic in 2016 and provides for 500
million gallons of Unspecified Advanced in 2016. Darling proposes to increase Advanced
Biofuels by 350 million RIN's in 2016 which would mean an increase of 200 million gallons of
BED (resulting in approximately 310 million RIN's) and the same incentive for development of
Cellulosic would exist as the EPA has in its Current Proposed Rule. The same logic applies for
Darling's suggested 2017 Advanced Biofuel goal of 4.25 billion RIN's; note the Darling proposal
for 2017 Advanced RIN's slightly increases the available bucket for undifferentiated advanced in
compliance with the aspirational spirit of spurring advanced biofuel production. [EPA-HQ-OAR-
2015-01 ll-1929-Alp.9]
Growth Energy
In EPA's view, because the proposed 2016 advanced biofuel and renewable fuel volume
requirements "represent significant increases from 2014, ... it would be unreasonable to expect
the market to supply more than the proposed volumes."67 But EPA offered no analysis of
whether more could be supplied to consumers. Instead, it tried to determine whether these
modest proposed increases are "achievable."68 [EPA-HQ-OAR-2015-0111-2604-A2 p.l 1]
67 Mat 33,126.
68 Id.
Growth Energy
Turning to 2016, EPA observed that because obligated parties "will have the full compliance
year to respond to the standards [EPA] set[s] for 2016, ... the supply of renewable fuels to
vehicles can grow more dramatically in 2016 than in 2015."65 Specifically, EPA proposed to
grow total renewable fuel in 2016 by 1.1 bil gal, 500 mil gal of which would come from growth
under the advanced volume requirement, "while the remainder (the non-advanced portion)"
would grow by 600 mil gal, to 14.0 bil gal, instead of to the statutorily implied level of 15.0 bil
gal.66 [EPA-HQ-OAR-2015-0111-2604-A2 p.ll]
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Imperium Renewables and Renewable Biofuels
We also strongly support the advanced biofuels volume request our national trade association,
the National Biodiesel Board (NBB), is asking for in their comments. There are statutory
volumetric obligations for the advanced biofuels category, and these numbers should be adhered
to when there is sufficient capacity and fuel to achieve those mandates. We encourage the EPA
to ensure that it has considered all possible sources of eligible advanced biofuels when
establishing the final advanced biofuels RVO. [EPA-HQ-OAR-2015-0111-2043-Al p.4]
We believe these facts indicate that the statutory volumes for 2016 can be met, and warrant EPA
proposing far higher advanced biofuels volumes, which will accommodate these other fuels,
increasing volumes of imported BED, and provide growth space for the domestic BED industry.
[EPA-HQ-OAR-2015-0111-2043-Alp.4]
Accordingly, we recommend that the EPA increase the 2016 advanced biofuels volume
requirement to at least 4 billion gallons. [EPA-HQ-OAR-2015-0111-2043-A1 p.5]
We look forward to the opportunity to discuss this request with you in the coming weeks, and
urge the EPA to promulgate the final rule — with higher volumes — as soon as possible under
the Administrative Procedures Act. [EPA-HQ-OAR-2015-0111-2043-Al p.5]
Indiana Farm Bureau
Another key concern of the Indiana Farm Bureau is what the future might hold. This proposal
would halt new investments in cellulosic biofuels and introduce detrimental ambiguity in a
market that is still developing. Indiana Farm Bureau strongly urges EPA to stay the course with
the RFS2 as defined in the 2007 EISA. Without question, this decision, if finalized, will have
tremendous consequences for the agricultural sector, for our nation's energy policy and for the
intended regulatory framework and goals of the RFS2. The commitment to advanced biofuels is
critical in order to achieve the 36 billion gallon goal of renewable fuel sold in the marketplace by
2022. Indiana Farm Bureau remains optimistic that the advanced biofuel provisions can succeed
in diversifying the RFS2. From 2007 through the second quarter of 2011, over $2.4 billion was
invested in advanced biofuel companies by venture capitalists alone. It is important that these
investments from the private sector be fully implemented and that incentives for continued
research and development remain fully in place. Past R&D work in the sector has resulted in
increasing product yields with lower input costs. The goals set forth by the RFS2 have been and
remain an important catalyst for this type of cutting edge work; and it is important to the long-
term health of both the economy and the environment that this work continues. [EPA-HQ-OAR-
2015-01 ll-2486-Alp.2-3]
International Council on Clean Transportation (ICCT)
While we believe that the decision to use this waiver is correct, we believe that given limits on
availability of non-cellulosic advanced biofuels and advanced biofuel feedstocks that it would be
appropriate for the EPA to utilize its full waiver authority to reduce advanced biofuel volumes
further than currently proposed, by the same amount as the reduction in the cellulosic volume.
Given the proposed cellulosic volume mandate, this would result in a requirement for 2.606 and
3.206 billion gallons of advanced biofuel in 2015 and 2016, respectively, compared to the
proposal for 2.9 and 3.4 billion gallons in 2015 and 2016.
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Making these adjustments to the advanced mandate would reduce the likelihood of the following
situations: increases to BED production much larger than intended by EPA, resulting in very
large impacts on the US vegetable oil market; and very high demand for limited supplies of
Brazilian sugarcane ethanol, bidding up the price to little environmental benefit. [EPA-HQ-
OAR-2015-0111-1923-A1 p.8]
Iowa Soybean Association
The Iowa Soybean Association, representing 40,000 Iowa soybean farmers, strongly encourages
you to increase the proposed US EPA Renewable Fuels Standard volume obligation levels. Rural
Iowa, and indeed rural America, need the predictability of an increasing commitment to biofuels
to allow continued investments in renewable fuels. These investments add value to farm
products, provide strong jobs in rural areas, reduce emissions and give consumers lower cost
alternatives at the fuel pump. [EPA-HQ-OAR-2015-0111-3424 p. 1]
John Deere
Liquid transportation fuels of the future must be lower-carbon in content. In addition, evidence is
growing that higher-octane attributes will be required to achieve the mileage and emission goals
for gasoline-powered vehicles. Renewable fuels provide solutions for both of these critical needs.
Keeping higher volume requirements in place will help guarantee the proper economic leverage
- providing support for those who make investments supportive of these needs and consequences
for those who do not.
Kansas Farm Bureau
Advanced Biofuels - While cellulosic biofuels must still prove themselves a major source of
renewable fuel, technologies continue to advance and high-paying jobs are being created
throughout the U.S. A case in point is the Abengoa Bioenergy Biomass plant in Hugoton,
Kansas, scheduled to come on line later this year. This 25 million gallon biomass-to-ethanol bio-
refinery will convert excess corn stover (cellulosic biomass) into ethanol. Additionally, the
residue of the refining process will be combusted along with more biomass material to produce
18 megawatts of electricity, making the entire facility energy efficient and environmentally
friendly. The plant's economic impact will be significant because when fully operational, it is
expected to provide 78 rural jobs and contribute an additional $5 million to the local economy
each year through the purchase of corn stover. EPA's proposed reductions from RFS2 targets
sends a message of uncertainty that may erode investor confidence, curtail future investment and
limit the advancements and innovation needed to make advanced biofuels a reality in the U.S.
[EPA-HQ-OAR-2015-0111-1195-Alp.2]
Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
D. EPA Has Relied on Flawed Estimates of Other Biofuels Production in Projecting Compliance
Scenarios for 2016.
While EPA has focused primarily on the role of E85 and biomass-based diesel in filling the
underestimated 840-million gallon renewable gap for 2016, EPA has also assumed in most
scenarios that the economy will consume several hundred million gallons of other advanced and
conventional biofuels. EPA has claimed that the estimated consumption ranges for these other
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biofuels in its scenarios are generally consistent with ranges achieved over the last several years.
However, other data relied upon by EPA suggest those ranges may be too high. [EPA-HQ-OAR-
2015-0111-2603-A2, p.36]
Thirteen of EPA's sixteen scenarios for 2016 assume the economy will consume 125 million or
more physical gallons of conventional biodiesel, and all but five of those scenarios assume that
the economy will consume 250 million gallons. EPA stated in the NPRM that 250 million
gallons of conventional (D6) biodiesel is only "slightly higher" than the 225 million gallons
imported in 2014. EPA apparently derived 2014 levels from data showing the economy imported
53 million gallons of conventional biodiesel and 151 million gallons of conventional renewable
diesel. Yet the data call that story into question. Specifically, a document entitled "2014 RIN
Supply" reflects a 146 million gallon "correction" to the reported 151 million gallons of
conventional renewable diesel imported in 2014.101 That correction results in only 5 million of
the reported 151 million physical gallons of conventional renewable diesel being available for
compliance. A similar pattern appears upon review of a separate document entitled "2013 RIN
Supply." 102 Specifically, that document reflects a 63 million gallon "correction" to the reported
116 million gallons of conventional renewable diesel imported in 2013. That correction results in
only 53 million of the reported 116 million physical gallons being available for compliance. EPA
should explain why it appears not to have used "corrected" figures to derive estimates of the
amount of conventional diesel available for compliance in 2016. [EPA-HQ-OAR-2015-0111-
2603-A2, pp.36-37]
In any event, EPA's assumption that usage of that biofuel will increase in 2016 is in tension with
its observation that consumption levels for each biofuel in its sixteen scenarios depends on the
level of consumption of other biofuels in those scenarios. [EPA-HQ-OAR-2015-Oil 1-2603-A2,
p.37]
Adopting mandates that encourage use of biofuels with questionable environmental properties—
such as palm-based diesel—makes little sense and, indeed, is contrary to the statutory purpose of
theRFS program. [EPA-HQ-OAR-2015-0111-2603-A2, pp.37-38]
In 13 of its 16 compliance scenarios, EPA has also assumed that usage of "other nonethanol
advanced" biofuels will be between 50 and 100 million gallons, an assumption that is based "on
the range of volumes achieved over the last several years." Yet 2014 RIN supply data reveal that
"other non-ethanol advanced" biofuels contributed only 53 million gallons in 2014, a very steep
decline from the 93 million gallons made available for compliance in 2013.106 EPA has failed to
explain the basis for its assumption that use of these biofuels will now grow by up to 89 percent
from 2014 levels. Nor has EPA addressed the fact that, through the first six months of 2015,
production is only about 16.9 million ethanol equivalent gallons. 107 Even if one arbitrarily
assumed double that growth over the remaining six months of 2015, "other nonethanol
advanced" biofuels would contribute only about 50.7 million ethanol-equivalent gallons,
representing a decline from 2014 levels. [EPA-HQ-OAR-2015-Oil 1-2603-A2, p.38]
Finally, eleven of sixteen of EPA's compliance scenarios assume the economy will consume
between 102 million and 433 million gallons of sugarcane ethanol in 2016. As EPA observed,
imports fell from 435 million gallons in 2013 to 64 million gallons in 2014, a trend expected to
continue in 2015 now that the economy has reached the E10 blendwall and the Brazilian
government has granted an expected increase in the required ethanol content of gasoline from 25
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percent to 27.5 percent. [EPA-HQ-OAR-2015-0111-2603-A2, p.38]
101 EPA, 2014 RIN Supply, Supporting & Related Material, EPA-HQ-OAR-2015-0111-0004
(June 10, 2015).
102 EPA, 2013 RIN Supply, Supporting & Related Material, EPA-HQ-OAR-2015-0111-0003
(June 10, 2015).
106 EPA-HQ-OAR-2015-0111-0004.
107 U.S. EPA, 2015 RFS2 Data, http://www.epa.gov/otaq/fuels/rfsdata/2015emts.htm.
In Order to Satisfy EPA's Proposed Mandates, Biomass-Based Diesel Consumption Would Need
to Increase to Levels That EPA Has Said Are Merely "Theoretically" Possible.
EPA purported to set the biomass-based diesel mandate at 1.8 billion physical gallons in 2016,
about 200 million physical gallons more than were available for compliance a mere six months
ago. But the effective biomass-based diesel mandate proposed for 2016 is actually much higher.
Even if E85 consumption were to grow robustly over the next six months so that the market has
the capacity to use 100-200 million gallons in 2016, Table II.D.2-2 suggests that the market still
must also use approximately 2.0-2.1 billion physical gallons of biomass-based diesel in order to
achieve the proposed mandates. There is a substantial risk that the market will come up short in
meeting EPA's goal. Moreover, by imposing standards that require biomass-based diesel
production to be pushed to the limits of what is practicable and then beyond those limits, EPA
will cause significant volatility in RIN prices. Accordingly, EPA must revise its advanced and
total renewable mandates downward to more realistic levels. [EPA-HQ-OAR-2015-0111-2603-
A2,p.31]
1. EPA effectively proposed to mandate consumption of biomass-based diesel at levels at or near
what EPA describes merely as "theoretically possible"
According to EPA, the market made available for compliance about 1.63 billion physical gallons
of biomass-based diesel last year, slightly more than the 1.55 billion physical gallons made
available in 2013. Thus, to meet EPA's effective mandate for biomass-based diesel of about 2.0-
2.1 billion gallons over the next six to eighteen months, the economy would need to increase the
number of physical gallons available for consumption by about 20 to 29 percent compared to last
year. Yet year-over-year production through the first six months of 2015 has increased only by
16 million physical gallons, or 2 percent compared to this time last year.86 [EPA-HQ-OAR-2015-
0111-2603-A2, pp.31-32]
The notion that the biomass-based diesel production can reach about 2.0-2.1 billion physical
gallons in 2016 also is in tension with EPA's previous acknowledgement that structural
impediments prevent the industry from quickly and materially increasing domestic production,
which amounted to only 1.46 billion of the 1.63 billion gallons available for compliance in 2014.
EPA should have concluded from that earlier analysis—which EPA relied upon for its exercise
of waiver authority—that it is unrealistic to achieve biomass-based diesel production of 2.0-2.1
billion gallons within six to eighteen months. Instead, EPA relied on its calculation that more
than 2.7 billion gallons of capacity has been registered at one time or another under the RFS
program. But the mere existence of capacity that at one time has been registered says very little
about the market's actual ability to increase domestic production over the next six to eighteen
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OQ
months to make an additional 322 million gallons or more available. [EPA-HQ-OAR-2015-
0111-2603-A2, p.32]
Indeed, EPA acknowledged that such increased biomass-based diesel production may not be
practically achievable. In its own words, EPA was "not able to say whether [2.131 billion
physical gallons] of BED is one that the market could be expected to achieve in 2016,
notwithstanding our belief that such volumes are theoretically possible." If EPA believes
producing 2.131 billion physical gallons in 2016 is only theoretically possible, what basis has it
to believe other targets between 1.952 and 2.065 billion gallons (i.e., the remaining portion of the
range posited in the event E85 consumption reaches 100-200 million gallons) are actually
possible? EPA must revise its advanced and total renewable requirements to levels that can
actually be achieved with some reasonably degree of certainty. [EPA-HQ-OAR-2015-0111-
2603-A2, p.33]
2. EPA has ignored additional factors that could constrain the economy's ability to consume
biomass-based diesel at the levels needed to meet the proposed mandates.
Not only has EPA set an effective biomass-based diesel mandate at a level that by its own
admission is only theoretically possible, and not necessarily achievable in practice, it has also
ignored important market risks that may make its effective mandate impracticable. For example,
EPA has ignored the possibility that diesel consumption will outstrip EIA projections for 2016. If
total diesel usage projections turn out to be too low, then more physical gallons of biomass-based
diesel will be needed to achieve the same fractional advanced and total renewable requirements.
Yet its proposed mandates, based upon current EIA gas and diesel projections, already push
biomass-based diesel production to levels that are only theoretically achievable. EPA appears not
to have considered this possibility in setting advanced and total requirements. It should adjust
mandates to provide more breathing room to meet the requirements with production in 2016.
[EPA-HQ-OAR-2015-0111-2603-A2, pp.33-34]
EPA also has understated the role biomass-based diesel may have to play in filling the renewable
gap by assuming the market will produce 206 million gallons of cellulosic biofuel. If EPA
projections of cellulosic production miss the mark, then even with robust E85 growth, biomass-
based diesel markets may have to make closer to 2.2-2.3 billion gallons available for compliance.
This scenario is in fact likely given EPA's terribly poor track record in projecting cellulosic
production—it has been off by millions of gallons in each of the last several years.94 [EPA-HQ-
OAR-2015-0111-2603-A2, p.34]
National Biodiesel Board
EPA provides no real analysis to support its assertion that there is inadequate domestic supply
requiring a reduction in the statutory volumes for advanced biofuels. EPA's assessment of the
"inability of the market to reach statutory volumes," which is the rationale for the entire
proposal, is based on the total renewable fuel standard requirement. [EPA-HQ-OAR-2015-0111-
1953-A2p.l07]
Although NBB disagrees with EPA's view of total renewable fuel, EPA does not indicate
whether the separate and specific advanced biofuel category could be met. It is impossible for the
public to meaningfully comment on the proposed advanced biofuel volumes without
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understanding the support for the proposed 2.9 and 3.4 billion gallon requirements. [EPA-HQ-
OAR-2015-0111-1953-A2 p. 107]
EPA does not explain why it cannot provide for greater increases in advanced biofuels in line
with the increases sought by Congress. Indeed, EPA recognizes that "Congress envisioned the
majority of growth over time to come from advanced biofuels...." [EPA-HQ-OAR-2015-0111-
1953-A2p.llO]
While NBB does not dispute that the industry could meet 3.40 billion gallons, EPA's assessment
unduly restricts the possible scenarios, as it only assesses whether the proposed 3.4 billion
gallons could be met, not other volumes. To identify "maximum achievable" supply, EPA was
required to do more. At a minimum, EPA should have compared various additional increases and
higher possible levels. [EPA-HQ-OAR-2015-0111-1953-A2 p.115]
EPA incorrectly states that these fuels should "compete" with established fuels. Rather, EPA
should consider the maximum available supply to account for the possible volumes from these
additional fuels. EPA failed to do so, and, thus, we do not have access to sufficient information
to assess the true potential supply from these sources. Nonetheless, NBB agrees that EPA must
account for them and must also provide, consistent with Congressional intent to set ambitious
goals and drive production, additional volumes above those amounts. [EPA-HQ-OAR-2015-
0111-1953-A2p.l20]
It is simply arbitrary to penalize the entire advanced biofuel industry due to a perceived blend
wall limitation that affects only ethanol. As outlined for 2015, there is more than available
supply of at least 4 billion gallons of advanced biofuels. Anything less than a 4 billion gallon
requirement would be unreasonable. More can be available. [EPA-HQ-OAR-2015-0111-1953-
A2p.l20]
National Farmers Union (NFU)
The preamble to the proposed rule acknowledges the need for longer-term certainty than annual
volume targets allow, asserting that as the reason for offering the 2016 volume standards now
along with the 2014 and 2015 volume standards. Ignoring the fact that the 2016 volume standard
will hardly be issued before 2016, EPA's attempt to offer certainty for the biofuels industry is far
less effective than establishing a habit of properly deferring to the volume standards in the EISA.
[EPA-HQ-OAR-2015-0111-1657-A1 p. 8]
While the advanced biofuels industry has not been able to produce enough renewable fuel to
satisfy the volume targets set by Congress in the EISA, lowering volume targets to the level set
by EPA in the proposed rule will not give advanced biofuel producers, or their prospective
investors, the market certainty needed to bring advanced biofuels manufacturing to the capacity
Congress sought when passing the EISA. The branded oil industry wields tremendous power
over the transportation fuels offered to the public. EPA, in several instances throughout its
preamble to the proposed rule, acknowledges that the branded oil industry has prevented
consumers owning FFV vehicles from finding retail outlets to fuel their vehicles with higher
biofuel blends, artificially stymying demand for the environmentally superior product advanced
biofuel manufacturers help create. Lowering volume standards to the extent embodied in the
proposed rule rewards branded oil companies for this behavior and creates additional obstacles to
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the investment needed to expand these proven advanced biofuel manufacturing technologies to
the extent needed to fulfill the volume standards set by Congress. [EPA-HQ-OAR-2015-0111-
1657-A1 p. 5]
Finally, if EPA will not allow conventional biofuels to compensate for the reduction to the
advanced biofuel volume standard, EPA must not lower the total renewable fuel volume standard
any more than the amount the advanced biofuel standard is reduced. [EPA-HQ-OAR-2015-0111-
1657-A1 p. 6]
National Renderers Association (NRA)
For advanced biofuel, NRA urges EPA to adopt minimum of 3.2 billion RINS for the 2014 and
2015 RFS, and 4 billion RINS (on an ethanol-equivalent basis) for 2016. Production capacity
exists to easily meet these volumes, and lower RFS levels would be unreasonable. [EPA-HQ-
OAR-2015-0111-2496-A1 p.2]
Newport Biodiesel
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 207.]
First and foremost, EPA should recognize and emphasize that the primary objective of the RFS is
to reduce greenhouse gas emissions through the use of advanced biofuels. This is stated clearly
in the executive summary of the proposed rule, and it should be the driving force behind the final
volumes proposed.
San Diego Regional Clean Cities Coalition
Reducing the advanced biofuel and total renewable fuel standards for 2016 and 2017 will hinder
the growth of the California biofuels market. [EPA-HQ-OAR-2015-0111-1719-A1 p. 1]
Smithfield Foods, Inc.
Smithfield supports the development and use of advanced and cellulosic biofuels which do not
use food crops as feedstocks. Indeed, Smithfield is engaged in projects to develop renewable
energy from a variety of sources, and we encourage efforts to diversify American energy sources
and reduce greenhouse gas emissions in a cost-effective manner. [EPA-HQ-OAR-2015-0111-
2041-Alp. 1-2]
Union of Concerned Scientists
In evaluating EPA's proposal, we recognize and commend the EPA's proposal to limit the
growth of the non-cellulosic (food-based) advanced biofuel mandate between 2015 and 2016 to
480 million gallons. The proposed 2016 advanced biofuel mandate of 3.4 billion gallons, of
which approximately 200 Mgal are cellulosic, still exceeds by approximately 200 Mgal the level
associated with the statutory minimum. This discretionary enlargement is not warranted by the
available feedstocks and thus for 2016, if the cellulosic mandate remains at 200 Mgal, the
advanced and renewable mandates should be reduced by 4.05 Bgal rather than 3.85 Bgal as
proposed. [EPA-HQ-OAR-2015-0111-2260-A1 p.5]
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Given current sources of non-cellulosic advanced biofuel, we do not believe available biofuels
support a discretionary enlargement at this time. In particular, because limitations on fuel
dispensing infrastructure constrain the use of advanced ethanol, BED is likely to be the source of
marginal compliance for the renewable fuel mandates as is reflected in Table II.D.2—2. As
discussed above in the context of BED, consideration of available feedstocks suggest that there
is inadequate supply of low carbon sources of BED that are consistent with the goals of section
211 (o)(2)(B)(ii) to merit a discretionary enlargement of the renewable fuel mandate. [EPA-HQ-
OAR-2015-0111-2260-A1 p.4-5]
While reducing the advanced mandate might not seem to support aggressive growth in advanced
biofuels, it is important to recognize that the minimum statutory levels are already very
aggressive. The minimum statutory level for non-cellulosic advanced biofuel is scheduled to
grow at 500 Mgal a year for 2017, 2018 and 2019 reaching 4.5 Bgal in 2019. If this is met
primarily with BED it would support as much as 3 Bgal of BED, a very large and rapid
expansion from current levels. Even in the absence of any discretionary enlargement, this rate of
growth is very aggressive considering the sources of non-cellulosic advanced biofuels that are
likely to be available in this timeframe. [EPA-HQ-OAR-2015-0111-2260-A1 p.5]
By setting forth clear criteria to evaluate future discretionary enlargement, considering feedstock
availability among other factors, EPA will increase forward guidance to the marketplace and
reduce policy uncertainty. Moreover, a focus on feedstock availability will clarify the importance
of investment in fuels for which feedstocks are abundant, primarily cellulosic biofuels, and avoid
unsustainable capacity buildup in BED production capacity that outstrips feedstock
availability. [EPA-HQ-OAR-2015-0111-2260-A1 p.5]
Response:
Some stakeholders said that the proposed reduction in the 2016 volume requirement for total
renewable fuel would eliminate profits for conventional biofuel producers, and that this would in
turn destroy incentives to invest in the development of advanced biofuels. We disagree. First,
the final 2016 volume requirement for total renewable fuel includes an opportunity for
substantial growth in conventional renewable fuel in comparison to 2015, thereby creating
opportunities for increased profits. Second, although in some cases conventional renewable fuel
producers are also participating in development of advanced biofuels, this is not universally true.
Many companies are focused primarily or only on advanced biofuels. Since we are finalizing a
2016 volume requirement for advanced biofuel that is significantly higher than in any previous
year, all companies seeking to produce advanced biofuels will have significantly expanded
opportunities to participate in the market.
A number of stakeholders said that they believed a higher volume requirement was possible for
advanced biofuel in 2016 than we had proposed. For this final rule, we have considered these
comments and other information available to us, and have determined that the final volume
requirement for 2016 advanced biofuel should be increased from the proposed level of 3.4 billion
gallons to 3.61 billion gallons.
A number of stakeholders recommended that the 2016 volume requirement for advanced biofuel
be set at the same level as proposed for 2015: 2.90 billion gallons. Many of these stakeholders
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based their views on perceived limitations on feedstocks available for producing biodiesel,
and/or on their view that the RFS program should not be creating incentives to import sugarcane
ethanol. In general, as described in Section II.E.S.i of the final rule, we believe that sufficient
feedstocks are available to allow production and import of 3.61 billion gallons of advanced
biofuel in 2016. For further responses to comments on the impacts of the advanced biofuel
volume requirement on soybean oil and other feedstocks used in the production of biodiesel and
renewable diesel, see Section 3.2.1. With regard to the consideration of imports of sugarcane
ethanol, see Sections 2.1 and 2.7.4.
In addition to those stakeholders who said that we should set the 2016 volume requirement for
advanced biofuel at 2.9 billion gallons, several other stakeholders said more generally that the
proposed volume requirement of 3.4 billion gallons was too high, and suggested that we use the
full amount of reduction in advanced biofuel that is permitted under the cellulosic waiver
authority. In the context of the NPRM, this would have resulted in a 2016 volume requirement
for advanced biofuel of 3.206 billion gallons, a level below what we believed at that time was
achievable. In the context of this final rule, this approach would result in a 2016 volume
requirement for advanced biofuel of 3.23 billion gallons. While we are able to take into account
factors beyond availability of qualifying fuel in determining the volume requirement for
advanced biofuel, we have considered comments received (as discussed elsewhere in this
section, Section 2.2.1 of this RTC document, and the final rule), and believe that the
considerations that commenters have asserted, favoring a lower advanced biofuel volume
requirement, do not outweigh the benefits of requiring the use of reasonably attainable volumes
of low GHG-emitting advanced biofuels. As described in Section II.F of the final rule, our
intention is to place an emphasis on setting the 2016 advanced biofuel volume requirement at a
level that is reasonably attainable taking into account uncertainties related to such factors as
production, import, distribution, and consumption of these fuels. While one stakeholder
suggested that reducing the advanced biofuel volume requirement would reduce the likelihood of
inordinately high BED production and inordinately high imports of sugarcane ethanol, we do not
believe that the volume requirements we are setting will have such results. As described in
Section II. G of the final rule, there are a variety of ways in which the market could respond to
the final volume requirements. As discussed there, the highest level of sugarcane ethanol shown
in Table II.G-2 is 495 million gallons, a level that is less than the highest level of sugarcane
ethanol imports that has occurred in the past (680 million gallons in 2006). Similarly, the highest
level of BED shown in Table II.G-2 of the preamble is about 2.2 billion gallons. While this is
towards the high end of what we think the market could choose for satisfying the advanced
biofuel requirement, we do not believe that this volume is likely to create significant impacts on
the U.S. vegetable oil market as suggested by this stakeholder since it is close to the level that we
used in determining the 2016 volume requirement for advanced biofuel. Moreover, the variety
of possible ways that the market could respond to the final 2016 volume requirement for
advanced biofuel as shown in Table II.G-2 demonstrates that it is reasonably attainable. For
further discussion of impacts on agricultural commodities, see Section 7.2.
Another stakeholder expressed concern that the proposed volume requirement for advanced
biofuel in 2016 would require volumes of BED that cannot be achieved, pointing out that
production capacity is not by itself a sufficient basis for determining the volume that can actually
be supplied in 2016. As described in Section 2.4, consideration of production capacity alone is
indeed not sufficient. There are also practical and timing constraints associated with diverting
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feedstocks from current uses to the production of BED, and constraints associated with the
market's ability to supply BED to the engines that use it. We have elaborated on these
constraints in Section II.E.3 of the final rule. It is by considering these constraints that we have
determined that the levels of BED supply suggested by the National Biodiesel Board and some
other biodiesel proponents are not achievable in 2016. Nevertheless, we do believe that supply
of advanced biodiesel and renewable diesel in 2016 can be higher than supply in 2015, and we
have projected that 2.1 billion gallons is reasonably attainable in the context of determining the
advanced biofuel volume requirement for 2016. This is about 370 million gallons higher than
the projected supply of BED in 2015. Not only is this increase less than the increase that
occurred in 2013, but there may also be some imports of advanced biodiesel from countries such
as Argentina which can also contribute to the supply of BED.
One stakeholder contended that we proposed levels of advanced biofuel and total renewable fuel
that we deemed achievable without determining whether they were the maximum achievable. In
fact the NPRM stated our intent to propose volumes that, if finalized, would be the maximum
that can reasonably be achieved:
"We are proposing to use the waiver authorities to derive applicable volumes that
reflect the maximum volumes that can reasonably be expected to be produced and
consumed. Thus, while the standards that we set must be achievable, we believe
that they must also reflect the power of the market to respond to the standards we
set to drive positive change in renewable fuel production and use." (80 FR
33104)
However, we went on to say that this determination would require considerable judgment:
"This is a very challenging task not only in light of the myriad complexities of the
fuels market and how individual aspects of the industry might change in the
future, but also because we cannot precisely predict how the market will respond
to the volume-driving provisions of the RFS program. Thus the determination of
the maximum achievable volumes is one that we believe necessarily involves
considerable exercise of judgment." (80 FR 33105)
The NPRM did point out that the proposed 2016 volume requirements would be significantly
higher than in any previous year, and that the market would need to respond by increasing
domestic production and/or imports of renewable fuel, by significantly expanding the
infrastructure for distributing and consuming that renewable fuel, and by improving the relative
pricing of renewable fuels and conventional transportation fuels at the retail level to ensure that
they are attractive to consumers. Given the imprecise nature of the projection of volumes that
are achievable, it was our judgment in the NPRM that the proposed volume requirements were
the maximum that could reasonably be achieved. Moreover, the presentation of a number of
different scenarios for how the market could respond to the proposed volumes, and the
associated discussion of the levels of each type and source of renewable fuel that were possible
but in some cases unlikely, was designed to give stakeholders a better understanding for why we
believed that the proposed volumes were the maximum achievable.8
1 See discussion in Section II.D.2 of the NPRM.
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In this final rule we have expanded the discussion for why we believe that the final volume
requirements meet the statutory criteria under the applicable waiver authorities. We have also
clarified our use of the applicable waiver authorities. In short, we are reducing volumes of total
renewable fuel under both the cellulosic and the general waiver authority, and we are reducing
volumes of advanced biofuel under the cellulosic waiver authority only. As a result, the criteria
we have used to reduce advanced biofuel differ from those used to reduce total renewable
fuel. The general waiver authority is available based on a finding of inadequate domestic supply
or severe economic or environmental harm. We believe that any waiver using the general waiver
authority would appropriately be limited to relieving the condition that gives rise to the
authority. Thus we are reducing the volume requirement for total renewable fuel to the degree
needed to remove the inadequacy of supply. The expanded discussion of our assessment of total
renewable fuel supply in 2016 can be found in Section II.E of the preamble.
By contrast, under the cellulosic waiver authority there are no specific criteria given in the statute
for the conditions under which reductions may be made. Thus in determining the appropriate
reductions in advanced biofuel using the cellulosic waiver authority, we have taken into
consideration the GHG reduction benefits associated with advanced biofuels and issues related to
their availability, including uncertainty in imports and existing patterns of feedstock
consumption for competing uses. In this context, the final 2016 volumes of advanced biofuel
that we are setting in today's rule are based on an assessment of levels that are reasonably
attainable given a consideration of these factors. The expanded discussion of our assessment of
advanced biofuel supply in 2016 can be found in Section II.F of the final rule.
One stakeholder who stated that the proposed 2016 volume requirements were too high argued
that EPA had underestimated the gap between the proposed volume requirements and the
volumes that the economy was on pace to supply in 2016. In fact the NPRM did not specify the
volume that the economy was on pace to supply in 2016. We did project what we believed the
market could achieve by the end of 2015 given that the year was half over at the time of the
release of the NPRM, and then we went on to include additional increases in supply that we
estimated could be achieved in 2016. Our 2016 estimates of achievable supply were based on an
assessment of how the market would respond to the volume requirements we set, a process that
we acknowledged was imprecise and required significant judgment.
This stakeholder also suggested that the range of possible volumes for other advanced biofuel
that was provided in a list of scenarios in Table II.D.2-2 of the NPRM might be too high based
on other data referenced in the NPRM. However, the stakeholder did not specify what
inconsistencies with other data in the NPRM they were referring to. The scenarios provided in
the NPRM were not meant as projections of exactly how the market would respond but rather
provided a range of possibilities. Also, we stated our belief that under the influence of the RFS
program, there would be an incentive for the market to increase supplies of other advanced
biofuels beyond the levels that have been achieved in the past.
This stakeholder correctly pointed out that the range of conventional biodiesel volumes included
in the scenarios listed in Table II.D.2-2 of the NPRM as possible ways that the market could
respond to the proposed 2016 advanced and total volume requirements was larger than the actual
supply of conventional biodiesel in 2014. The range of volumes in the NPRM scenarios table
was based on the number of RINs generated in the past for conventional biodiesel and renewable
diesel before corrections were made to account for such events as spills, enforcement actions,
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and fuel used in non-transportation activities. The NPRM described the range of conventional
biodiesel volumes as being based on the volumes actually imported in 2014. While an accurate
description of the source of the conventional biodiesel volumes used in Table II.D.2-2 of the
NPRM, this approach ignored the subsequent corrections that reduced the number of RINs
actually available for compliance. Even so, under the influence of higher volume requirements,
regulated parties would have greater incentive to avoid the circumstances that led to these
corrections, and thus the number of RINs generated may be achievable
One stakeholder said that EPA had not sufficiently described why the statutory target for
advanced biofuel cannot be reached in 2016. In the NPRM we did point out that more than 70%
of the additional ethanol-equivalent volumes that would be needed to reach both the total
renewable fuel and advanced biofuel statutory targets would need to be advanced biofuel, and
discussed the impracticability of attaining those volumes. However, we agree that it is
appropriate to elaborate on the limitations in the supply of advanced biofuel that have led us to
conclude that the statutory target for advanced biofuel cannot be reached in 2016. A more
detailed discussion of our assessment of the inability of the market to reach the statutory target
for advanced biofuel in 2016 is provided in Section II.B.5 of the final rule. For additional
responses to comments on whether the statutory volume targets can be reached in 2014, 2015, or
2016, under either the general waiver authority or the cellulosic waiver authority, see Section
2.2.4.
One stakeholder said that it would be inappropriate to require advanced biofuels other than
cellulosic biofuel and BED to compete with BED within the context of the advanced biofuel
volume requirement. Instead, they argued, EPA must consider the maximum achievable levels
of these "other" advanced biofuels, and add them to BED and cellulosic biofuel to determine the
advanced biofuel volume requirement. As discussed in Sections II.B and II.F of the final rule,
we are using the cellulosic waiver authority to reduce volumes of advanced biofuel, and when
using that authority we are not required by the statute to determine the maximum achievable
level of advanced biofuel. Using the cellulosic waiver authority we have broad discretion to
determine whether to reduce volumes by an equal or lesser amount than the reduction in the
cellulosic biofuel applicable volume. As discussed in the preamble to the final rule, we have
determined that it would be appropriate to set the volume requirement for advanced biofuel in
2016 to require use of reasonably attainable volumes, taking into consideration such factors as
uncertainty in imports and existing patterns of feedstock consumption for competing uses,
etc. We have set the BED applicable volume at a lower level than the advanced biofuel volume
requirement and, indeed, at a lower level than we believe BED will be used for purposes of
compliance with the advanced biofuel requirement. We believe that this is desireable as
described in Section III of the final rule and in Section 3 of this RTC document, to provide an
opportunity for competition among different types and sources of advanced biofuel.
Incentivizing production of an array of advanced biofuels could lead to reduced compliance costs
as well as to the longer-term goal of helping the market to diversify and expand. For additional
responses to comments about competition within the advanced biofuel volume requirement, see
Section 3.3.1.
One stakeholder said that the blendwall should not affect the determination of the volume
requirement for advanced biofuel, and that a volume requirement less than 4 billion gallons
would be unreasonable given available supply of advanced biofuel. We explain in the final rule
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the basis for our assumption regarding sugarcane ethanol imports for purposes of deriving the
final advanced biofuel applicable volume. The estimate was based on reasonable expectations,
based in part on historic data and trends. We did not reduce this estimate due to consideration of
E10 blendwall constraints, as we believe these volumes are reasonably attainable and that it
furthers the objectives of the Act to establish the advanced biofuel requirement at a level that
requires use of reasonably attainable volumes. Our assessment of advanced biofuel in 2016
focused not only on reasonably attainable supply of imported sugarcane ethanol, but also on
advanced biodiesel and renewable diesel, and other advanced biofuels. In this context we took
into consideration levels that are practically attainable in 2016 given necessary changes such as,
for instance, the need to divert feedstocks from their current uses to the production of additional
biodiesel. Based on this assessment, we do not believe that 4 billion gallons of advanced biofuel
is achievable in 2016. However, we have increased the final 2016 volume requirement for
advanced biofuel to 3.61 billion gallons, from the 3.4 billion gallons that we proposed. Further
discussion of our assessment of advanced biofuel can be found in Section II.F of the final rule.
One stakeholder pointed to the 2016 statutory targets for advanced biofuel and cellulosic biofuel,
and noted that the difference between them is 3.00 billion gallons. Under the assumption that
Congress intended the non-cellulosic potion of the 2016 advanced biofuel volume requirement to
be no higher than 3.00 billion gallons, they suggested that we reduce the 2016 advanced biofuel
volume requirement to 3.2 billion gallons to reflect the proposed cellulosic biofuel volume
requirement of (about) 200 million gallons and the volume of non-cellulosic advanced biofuel
(3.00 billion gallons) that Congress apparently intended. We disagree with this approach. We
believe it would be inappropriate to treat the non-cellulosic portion of advanced biofuel as a
statutory target in itself. The statute provides EPA with broad discretion under CAA
21 l(o)(7)(D) to lower volumes by the same or a lesser amount than the reduction in the
cellulosic biofuel applicable volume, and we believe, for reasons described in the final rule, that
it is appropriate and would best further the objectives of the Act to set the advanced biofuel
requirement such that reasonably attainable volumes of advanced biofuel will be used. We
believe that there are sufficient feedstocks, production capacity, and infrastructure to reasonably
attain a total advanced biofuel volume of 3.61 billion gallons as described more fully in Section
II.F of the final rule.
A number of stakeholders expressed a concern that the proposed volume requirements for
advanced biofuel would eliminate the incentive to invest in development of new
technologies. On the contrary, the proposed volume requirements would have provided for
growth in advanced biofuels without causing the market uncertainty associated with standards
which cannot be attained. Further, we have updated our assessments and evaluated additional
information provided by stakeholders since release of the NPRM and have determined that the
final volume requirement for advanced biofuel in 2016 can be somewhat higher than the
proposed level while still being reasonably attainable. The result is substantial growth in
advanced biofuels in 2016 that can only be achieved if the market responds as expected with
increased production and addresses the various supply constraints.
The National Biodiesel Board said that a 2016 volume requirement for advanced biofuel of
between 5.16 and 6.30 billion gallons could be justified, and that any advanced biofuel volume
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requirement less than 4 billion gallons would be unreasonable.9 We disagree. While our
analysis has concluded that 2.5 billion gallons of biodiesel and renewable diesel (both advanced
and conventional) is the maximum that can reasonably be supplied in 2016, we have concluded
that 2.1 billion gallons of advanced biodiesel and advanced renewable diesel is the volume that is
reasonably attainable in 2016.10 This is lower than NBB's assumption of about 2.7 billion
gallons of BED, which was based solely on their assessment of production capacity and their
views that there are no constraints associated with feedstocks or infrastructure. As described in
detail in Section II.E.3 of the final rule, we have determined that there are numerous constraints
that make 2.7 billion gallons of BED unreasonable to assume for purposes of setting the
advanced biofuel volume requirement for 2016. Further, we disagree with NBB's estimates of
the volumes of imported BED and sugarcane ethanol in 2016, which are inconsistent with
historical levels. As discussed in more detail in Sections 3.2.3 and 2.7.4, respectively, all
imports have been highly uncertain, and we cannot project with confidence the volumes of
imported advanced biofuels that will be available in 2016. The volumes of imported advanced
biofuels assumed by NBB are, in contrast, at the upper limits of either what has been imported
historically, or what could be imported theoretically under a confluence of optimum
circumstances.
One stakeholder said that the EPA should use the criteria given in CAA 21 l(o)(2)(B)(ii) when
making a determination of the appropriate 2016 volume requirement for advanced biofuel under
the cellulosic waiver authority. The statute does not specify any factors that we may or must
consider when exercising the cellulosic waiver authority. EPA may elect to consider any of the
factors listed in CAA 21 l(o)(2)(B)(ii), or which may be suggested by commenters or identified
by EPA, as EPA deems appropriate. As described in Section II.F of the final rule, we have
considered several factors in the determination of the 2016 volume requirement for advanced
biofuel, including uncertainties related to such factors as production, import, distribution and
likely consumption of these fuels, as well as the added GHG emission reductions from advanced
biofuels.
For responses to comments on the uncertainty created by reductions in the statutory targets, see
Section 2.1.1.
For responses to comments on the relative role of domestic versus imported renewable fuels in
meeting the volume requirements under the RFS program, see Section 2.1
For responses to comments on whether the statutory volume requirements can be reached in
2014, 2015, or 2016, under either the general waiver authority or the cellulosic waiver authority,
see Section 2.2.4.
For responses to comments stating that production capacity should be the basis of the volume
requirements, see Section 2.4.
9 Based on the table in Section IX.D.2.d, page 121 of NBB's comments.
10 As described in Section III.D of the final rule, we have not set the BED volume requirement at 2.1 billion gallons
because, while we believe that this level is attainable, we believe it is appropriate and will further the objectives of
the Act to provide opportunities for non-BBD advanced biofuels to grow.
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For responses to comments suggesting that obligated parties have failed in their statutory
responsibilities to invest in the infrastructure needed to expand renewable fuel supply, see
Section 2.7.1.
For responses to comments related to imports of sugarcane ethanol, see Section 2.7.4.
For responses to comments on the impacts of the proposed advanced biofuel volume requirement
on soybean oil, see Section 3.2.1.
For responses to comments on volumes of cellulosic biofuel projected to be available in 2016,
see Section 4.2.1.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.2
Section 2.2.2.1
Section 2.2.3
Section 2.3
Section 2.3.1
Section 2.4.1
Section 2.4.2
Section 2.4.3
Section 2.5.1
Section 2.5.2
Section 2.6.1
Section 2.7.2
Section 3.2
Section 3.2.2
Section 3.2.3
Section 3.3.1
Section 3.4.1
Section 3.4.2
Section 4
Section 6
Section 7.1
Section 7.2
Section 7.3
Section 7.4
Section 7.5
Section 7.7
Section 7.8
Section 8
Section 8.2
Section 10.6.4
Section 10.6.5
Statutory Authorities for Reducing Volume Targets
Inadequate Domestic Supply
Combining Authorities for Reductions in Advanced Biofuel and Total
Renewable Fuel
Proposed approach to determining volume requirements
Congressional intent to increase volumes
Proposed Total Renewable Fuel Volume for 2014
Proposed Total Renewable Fuel Volume for 2015
Proposed Total Renewable Fuel Volume for 2016
Proposed Advanced Biofuel Volume for 2014
Proposed Advanced Biofuel Volume for 2015
E10 blendwall and demand for gasoline
Impacts on advanced biodiesel production and imports
Factors Affecting Supply and Consumption
Production Capacity
Imports of BED
Balance between supporting the BED industry and ensuring opportunities
for other advanced to grow
Advanced biofuel as the driver for BED demand
Increases in BED displace other advanced, not diesel
Proposed Cellulosic Biofuel Standards
Treatment of Carryover RINs
General Comments on Economic Impacts
Agricultural Impacts (food, animal feed, crops, feedstock)
Fuels Industry Impacts (oil refineries, biofuel facilities)
Impact on RINs
Retail Fuel Prices
Impact on Jobs and Local/State Economy
Cost to Consumers
Environmental Impacts of the Proposed Rule
Climate Change (GHG Impacts)
Ethanol impacts on engines
Other information and ideas to overcome current challenges
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2.6 Ethanol Consumption
Comment:
American Motorcyclist Association
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1043, p. 182.]
The EPA proposal would increase the amount of ethanol from all sources in the nation's fuel
supply to 17.4 billion gallons in 2016, up from 15.93 billion gallons in 2014. Those increases
would come despite the EPA's acknowledgment that the market cannot absorb these higher
ethanol production rates.
Americans for Prosperity
EPA's lower blending requirements are an admission that the RFS is out of touch with economic
realities. Increases in fuel economy and persistent sluggish economic conditions have led to
lower levels of fuel demand than expected. Moreover, many vehicles currently on the road are
not designed or equipped to handle the higher levels of ethanol consumption that the RFS
mandate seeks to impose.
In short, the blend requirement amounts to a subsidy for the ethanol industry, a subsidy
underwritten by American motorists at the fuel pump.
Archer Daniels Midland Company (ADM)
In fact, both the U.S. Department of Energy and the U.S. Energy Information Administration
(EIA) have stated in their respective 2016 outlooks that the effect of the RVO proposal will
result in a 9.9% ethanol share of the total gasoline pool. EIA specifically states that it 'does not
expect measurable increases in El5 or E85 consumption over the forecast period. The proposed
RFS targets are expected to encourage imports of Brazilian sugarcane ethanol...' This outlook has
already been confirmed by the marketplace where D6 RIN prices continue to be depressed, and
imports of Brazilian sugarcane ethanol continue to increase. [EPA-HQ-OAR-2015-0111-2262-
Al p. 4]
Atlantic Drywall
As a New Hampshire general contractor, small business owner and outdoor sports and boating
enthusiast, I am writing to voice concern about increasing levels of ethanol content in gasoline in
the proposed Renewable Fuel Standard (RFS) for 2014, 2015 and 2016 and request that the EPA
set the final ethanol mandate under the RFS to no more than 9.7 percent of gasoline demand.
[EPA-HQ-OAR-2015-0111-1658-A1 p. 1]
I believe Congress should fix the RFS through legislation, but in the meantime, please set the
final ethanol mandate to no more than 9.7 percent of gasoline demand. [EPA-HQ-OAR-2015-
0111-1658-A1 p. 1]
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Board of Commissioners, Mercer County
The EPA has proposed Renewable Fuel Standards (RFS) for 2014, 2015 and 2016.
Unfortunately, the EPA is attempting to force high-ethanol fuel blends into the market and
potentially putting American consumers, their vehicles and our economy at risk. As an elected
official from rural Pennsylvania, I am concerned about the negative impact these new standards
will have on my constituents. Therefore, I am writing today to request that the EPA lower the
ethanol standard, and to set the final ethanol mandate under the RFS to no more than 9.7 percent
of gasoline demand. [EPA-HQ-OAR-2015-0111-1223-A1 p.l]
Clean Air Task Force
A reduction in the implied corn ethanol mandate creates headroom under the El0 blend wall for
environmentally superior types of ethanol, including cellulosic ethanol, that fall within EISA's
"advanced biofuel" category. [EPA-HQ-OAR-2015-0111-1828-A1 p.8]
Commonwealth of Pennsylvania
Specific concerns regarding the use of incentives to expand use of ethanol
Like many, I am generally skeptical about government intervention in a marketplace to support a
specific class of product. While there may be situations where such an action is appropriate, it
should be temporary. This is true even when, as mentioned above, the market intervention is
being done for a legitimate policy goal. [EPA-HQ-OAR-2015-0111-1933-A1 p.2]
With a decade of incentives and market mandates, cellulosic biofuel, biomass-based diesel,
advanced biofuel remain uncompetitive and demand for them remains anemic. As an elected
official, I have heard from constituents who are unhappy with the expanded use of ethanol, but I
have not heard from constituents who are seeking expanded access to these types of fuels. This
seems to be an indication that efforts to induce adoption of these fuels will continue to not be
successful. [EPA-HQ-OAR-2015-0111-1933-A1 p.2]
Crawford County
Therefore, I am writing today to request that the EPA lower the ethanol standard, and to set the
final ethanol mandate under the RFS to no more than 9.7 percent of gasoline demand. [EPA-HQ-
OAR-2015-0111-1666-A1 p. 2]
DENCO II
As detailed above DENCO II has done our part as an organization in making the RFS work. At
DENCO it we have done our part in making sure there is adequate supply of conventional
ethanol for the E10 fuel supply. We have produced advanced biofuels to help fill that portion of
the RFS. We are evaluating new technologies to eventually produce cellulosic gallons at our
facility. And, we have done our part to increase consumer awareness and use of higher level
ethanol blends through investment and a commitment to the fuel. This type of response to the
RFS has been replicated in ethanol production facilities across the nation. When the RFS was
established in 2005 and expanded in 2007 the renewable fuels industry responded to the
legislation and made the investment to build out an entire industry and increased our national
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ethanol production to the levels Congress intended. Our industry as a whole has also made
substantial investments in E85 and mid-level blend infrastructure and development. [EPA-HQ-
OAR-2015-0111-1216-A2 p.2] [The table can be found on p. 2 of Docket number EPA-HQ-
OAR-2015-0111-1216-A2]
Greenville-Reynolds Development Corporation
Unfortunately, the EPA is attempting to force high-ethanol fuel blends into the market and
potentially putting American consumers, their vehicles and our economy at risk. As an economic
development corporation, Greenville-Reynolds Development Corporation, from rural
Pennsylvania, we are concerned about the negative impact these new standards will have on the
local economy. Therefore, I am writing today to request that the EPA lower the ethanol standard,
and to set the final ethanol mandate under the RFS to no more than 9.7 percent of gasoline
demand. [EPA-HQ-OAR-2015-0111-3453-A1 p. 1]
Growth Energy
When computing 2014 net D6 RIN generation, EPA erroneously assumed that a D6 RIN was
generated on all 846 mil gal of exported ethanol and that all of those RINs would be retired and
unavailable for compliance, when in fact much of that volume did not generate a RIN, including
hundreds of millions of gallons of un-denatured ethanol. Thus, EPA not only got 2014 wrong,
but also understated the market's already-proven generation capacity by hundreds of millions of
RINs per year, an error that affects its proposal for 2015 and 2016 as well. [EPA-HQ-OAR-
2015-01 ll-2604-A2p.3]
Kane Ranch, LLC
The existing standard has already had the unintended consequence of raising the cost to
agriculture business, such as mine, and I am concerned that the proposed stands will only
continue to raise costs. Therefore, I am asking that the EPA set the final fuel mandate under the
RFS for 2015-2016 to no more than 9.7 percent of gasoline demand.[EPA-HQ-OAR-2015-0111-
1660-A1]
As a rancher and a good steward of the land I am an avid protector of the environment and
understand the importance of renewable energy. However, the current RFS is not the ideal course
of action. The best long term solution is for Congress to fix the RFS through legislation, but, in
the meantime please set the final ethanol mandate as I previously stated at 9.7 percent. [EPA-
HQ-OAR-2015-0111-1660-A1]
Mass Comment Campaign sponsored by Adkins Energy LLC (paper) - (120)
Ethanol production accounts for nearly 400,000 American jobs, improves air quality, saves
consumers money at the pump and reduces our dangerous dependence on foreign oil. [EPA-HQ-
OAR-2015-0111-2956-A1 p.l]
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Mass Comment Campaign sponsored by American Motorcyclist Association (AMA) (web)
- (29,379)
The EPA proposal would increase the amount of ethanol from all sources in the nation's fuel
supply to 17.4 billion gallons in 2016, up from 15.93 billion gallons in 2014. [EPA-HQ-OAR-
2015-0111-2049-A1 p. 1]
Those increases would come despite the EPA's acknowledgement that the market cannot absorb
these higher ethanol production rates. In a regulatory announcement released Aug. 6, 2013, 'EPA
Finalizes Renewable Fuel Standards,' the agency stated that it 'does not currently foresee a
scenario in which the market could consume enough ethanol sold in blends greater than E10.'
[EPA-HQ-OAR-2015-0111-2049-Alp.l]
And in announcing its new targets for ethanol in May, the EPA acknowledged that 'Due to
constraints in the fuel market to accommodate increasing volumes of ethanol, along with limits
on the availability of non-ethanol renewable fuels, the volume targets specified by Congress in
the Clean Air Act for 2014, 2015 and 2016 cannot be achieved.' [EPA-HQ-OAR-2015-0111-
2049-Alp.l]
Mass Comment Campaign sponsored by anonymous 10 (email) - (297)
As an investor that works closely with ethanol plants, I know the statutory requirements can be
met through a combination of gasoline consumption in the form of E10, increased use of higher
ethanol blends such as El5 and E85, carry-over RINs and increased biodiesel use. There is no
need for EPA to move backward with its proposed volumes for 2015 and 2016. [EPA-HQ-OAR-
2015-0111-0213-Alp.l]
When the RFS was established, it always envisioned ethanol blends above 10 percent - even
with a projected increase in gasoline consumption—but oil companies are doing everything they
can to maintain their stranglehold on the nation's fuel supply. [EPA-HQ-OAR-2015-0111-0213-
Alp.l]
Mass Comment Campaign sponsored by POET Biorefining 1 (paper) - (692)
You are allowing the lack of investment by oil companies in ethanol distribution infrastructure
impact our investment in ethanol production capacity. The gallons of ethanol mandated in the
RFS is the only way oil companies will sell high than 10% ethanol blends and the EPA should
not be changing the law to reward their behavior and limit competition. [EPA-HQ-OAR-2015-
0111-2963-Al,p.lO]
Mass Comment Campaign submitted by recreational boat owners (email) - (17697)
I am also very concerned that not enough has been done to prevent the mis-fueling of my boat
with the higher ethanol blends. The mis-fueling mitigation plans currently available, little more
than one sticker on fuel pumps, do not provide sufficient protection against my inadvertently
using the wrong gasoline in my boat. [EPA-HQ-OAR-2015-0111-1475-A1 p. 1]
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Mass Comment Campaign sponsored by Lincoln Energy LLC (paper) - (9)
The EPA has doubled down on its proposal to slash the 2014-2016 Renewable Fuel Standard
(RFS) levels for ethanol, and time is running out to convince the Administration to reverse
course! [EPA-HQ-OAR-2015-0111-3471-A1 p.l]
Michigan Boating Industries Association
It is imperative we keep E10 and EO available in Michigan and across the country. The
widespread damage this El 5 can cause is simply unacceptable. [EPA-HQ-OAR-2015-0111-
3448-Alp.l]
National Taxpayers Union (NTU)
The RVO levels established by the proposed rule continue to impose a significant cost to
consumers? they should be brought into line with demand and avoid increasing ethanol content
in the fuel supply. [EPA-HQ-OAR-2015-0111-3279-A1 p.2]
NH Energy Forum
As a New Hampshire State Representative for Rockingham County's 13th District, a former
automotive technician and small business owner, as well as a motorcycle enthusiast, I am writing
to voice concern about increasing levels of ethanol content in gasoline in the proposed
Renewable Fuel Standard (RFS) for 2014, 2015 and 2016 and request that the EPA set the final
ethanol mandate under the RFS to no more than 9.7 percent of gasoline demand. The proposed
standards ask for an increasing amount of ethanol to be blended into gasoline and this will
damage engines, big and small, across the country. [EPA-HQ-OAR-2015-0111-0280-A1 p.l]
I believe Congress should fix the RFS through legislation, but in the meantime, please set the
final ethanol mandate to no more than 9.7 percent of gasoline demand. [EPA-HQ-OAR-2015-
0111-0280-A1 p.l]
As a New Hampshire State Representative who focuses on issues regarding the elderly
community, I am writing to voice concern about increasing levels of ethanol content in the
proposed Renewable Fuel Standard (RFS) for 2014, 2015 and 2016. The proposed standards are
flawed, as they recommend an increasing amount of ethanol to be blended into fuels such as El 5
and E85, for which there is no significant consumer demand, and which could cause economic
hardship to American consumers through potential engine damage and higher food costs. [EPA-
HQ-OAR-2015-0111-0281-A1 p.l]
I believe the best long-term solution is for Congress to fix the RFS through legislation, but in the
meantime, please set the final ethanol mandate to no more than 9.7 percent of gasoline demand.
[EPA-HQ-OAR-2015-0111-0281-A1 p.l]
As a state representative from New Hampshire, college student and future workforce member, I
am writing to voice concern about increasing levels of ethanol content in the proposed
Renewable Fuel Standard (RFS) for 2014, 2015 and 2016. This could result in higher costs for
young adults and new college graduates from potential engine damage and higher food prices-
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costs that many would have great difficulty bearing in today's economy. [EPA-HQ-OAR-2015-
0111-0282-A1 p.l]
I believe the best long-term solution is for Congress to fix the RFS through legislation, but in the
meantime, you can help by reevaluating the proposed RFS and setting the final ethanol mandate
to no more than 9.7 percent of gasoline demand. [EPA-HQ-OAR-2015-0111-0282-A1 p.l]
Office of Commissioners, Lawrence County, Pennsylvania
Unfortunately, the EPA is attempting to force high-ethanol fuel blends into the market and
potentially putting American consumers, their vehicles and our economy at risk. As a
Commissioner from rural Pennsylvania, I am concerned about the negative impact these new
standards will have on my constituents and the local economy. Therefore, I am writing today to
request that the EPA lower the ethanol standard, and to set the final ethanol mandate under the
RFS to no more than 9.7 percent of gasoline demand. [EPA-HQ-OAR-2015-0111-3458-A1 p. 1]
Pennsylvania Off-Highway Vehicle Association
I am writing on behalf of the corporate, club, and personal members of the Pennsylvania Off-
Highway Vehicle Association (PaOHV). We represent the hundreds of thousands of folks across
Pennsylvania who enjoy riding motorcycles, dirt-bikes and all terrain vehicles, and who are
gravely concerned about the expanding use of ethanol fuels in America. And in particular, the
EPA's recently released Renewable Volume Obligations (RVO) which calls for yet another
increase in the amount of ethanol diluting our already tainted fuel supplies in order to comply
with the Renewable Fuel Standard (RFS). [EPA-HQ-OAR-2015-0111-1941-A1 p.l]
Senate of Pennsylvania
Enclosed I have listed just a few of my concerns, while asking the EPA to set the final ethanol
mandates at no more than 9.7 percent of gasoline demand. [EPA-HQ-OAR-2015-0111-3447-A1
p.l]
Shell Oil Products US
The number of RINs available for compliance depends on consumption of renewable fuels in the
U.S. transportation system (not the production of biofuels). Consumer choice and supply
infrastructure are essential factors.
Therefore, the supply of gasoline and diesel fuel for US consumption is limited by the
consumption of renewable fuels in US transportation fuels. [EPA-HQ-OAR-2015-0111-2716-A2
p.2]
As the RFS2 mandates exceed the ability of the U.S. transportation system to consume the
renewable fuel (due to vehicle and retail infrastructure compatibility issues), RINs will be in
short supply, which to maintain compliance with the law, will in turn limit supplies of gasoline
and diesel for U.S. consumption. [EPA-HQ-OAR-2015-Oil 1-2716-A2 p.3]
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Small Refinery Owners Coalition
For all of the reasons described above, we urge EPA to reduce the proposed 2014-2016 volumes
to 2012 levels to avoid the chance of inadvertently crossing the E10 blendwall and causing
further harm to small refineries. EPA's basis for raising volumes to and above the E10 blendwall
ignores the disproportionate risk for small refineries and is wholly unsupported by the
conclusions in the Burkholder Report. [EPA-HQ-OAR-2015-0111-2339-A1 p. 21]
Sonoma Cycle
As a small business owner in a rural community which relies on small engine equipment, I am
writing to voice my concern about the increasing levels of ethanol content in gasoline, and
request that the EPA set the final ethanol mandate under the Renewable Fuel Standard (RFS) for
2014, 2015 and 2016 to no more than 9.7 percent of gasoline demand. [EPA-HQ-OAR-2015-
0111-1930-A1 p.l]
Setting the final mandate to no more than 9.7 percent of gasoline demand will help to ensure that
fuel such as E10 and EO will continue to be readily available to small businesses such as mine.
[EPA-HQ-OAR-2015-0111-1930-Alp.l]
Congress should fix the RFS through legislation, but in the meantime, please set the final ethanol
mandate to no more than 9.7 percent of gasoline demand to protect businesses such as mine.
[EPA-HQ-OAR-2015-0111-1930-Alp.l]
Tenaska Commodities, LLC
Furthermore, what is even more frustrating, is EPA's constant referral to the 'E10 Blendwall.'
[EPA-HQ-OAR-2015-0111-0503-A1]
It's true that only cars manufactured after 2001 can safely burn El5, and that some automakers
do not warrantee their cars for El 1 and higher blends, but what you are missing is the fact that
refiners are not forced to blend ethanol over E10. In fact, the industry could blend E7 if they
want, so long as they utilize the nesting effect of RFS2. For example, if a refiner wished to blend
100 million gallons less of ethanol, all they would have to do is blend 667,000 more gallons of
biodiesel above their RVO. The additional D4 RINS would nest and fulfill the D6 shortfall.
Refiners want the cheaper oxygenate blendstock for gasoline up to E10, but do not want to lose
market share on anything above that. This is why the EPA should be pushing to solve the
'blendwall' issue by promoting more biodiesel blending. [EPA-HQ-OAR-2015-0111-0503-A1]
The George Washington University
Ethanol faces a different set of obstacles. While the US has the capacity and ability to either
import or produce more ethanol, more ethanol cannot feasibly be blended into gasoline. Legally,
only flex fuel vehicles (FFVs) can use fuel with ethanol concentrations greater than 15%, and
these vehicles only constitute about 6% of all light-duty cars and trucks. Practically, non-flex-
fuel vehicles cannot use fuel with ethanol concentrations greater than 10%, which is termed the
'blendwall.' While the authorizing statute requires more ethanol to be blended into transportation
fuel each year until 2022, the only way this is possible is if demand for gasoline increases
significantly in the near term. As explained in a later section of this comment, this creates a
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ceiling on the practical growth of ethanol as a transportation fuel. In its proposal, EPA is very
cognizant of the fact the blendwall makes it infeasible to significantly increase the volume
requirements for ethanol. [EPA-HQ-OAR-2015-0111-1815-A1 p.5]
Vets for Energy
I am concerned about the increasing levels of ethanol blended into our gasoline and am writing
to request that the EPA set the final ethanol mandate under the Renewable Fuel Standard (RFS)
for 2014, 2015 and 2016 to no more than 9.7 percent of gasoline demand. The proposed
standards ask for an increasing amount of ethanol to be blended for fuel, such as El 5 and E85,
for which there is no significant consumer demand while trying to eliminate ethanol-free fuels
(e.g., EO) for which consumers have shown a substantial demand. Furthermore, higher ethanol
levels could potentially lead to engine damage for cars and small engines and higher food costs,
creating economic hardship for veterans and their families. [EPA-HQ-OAR-2015-0111-2473-
Al,p.l]
I believe the best course of action, in the long-term, is for Congress to fix the RFS through
legislation, but in the meantime, please set the final ethanol mandate to no more than 9.7 percent
of gasoline demand. [EPA-HQ-OAR-2015-0111-2473-A1, p.l]
Western Plains Energy, LLC (WEP)
Certainly there are physical constraints in getting this additional volume to consumers in the
form of El 5 or higher blends. However, Congress's responsibility was to set the obligated
volumes, and EPA's responsibility is to hold obligated parties accountability in meeting those
volume requirements. It is then up to the free market to decide how those volumes will be
attained. Product pricing and RIN values will provide the necessary motive market forces to see
that the obligated volumes are met. Further, the ethanol and agriculture industry is stepping up to
invest in excess of $150 million in higher blend infrastructure over the next two years. By
prescribing lower volumes, the EPA is choosing to limit ethanol's use as a transportation fuel to
E10 and choosing to create a 'blend wall'. This choice is for the consumer to make, and it does
not fall within EPA's waiver authority. [EPA-HQ-OAR-2015-0111-0283-A1 p.2]
The mission of the Environmental Protection Agency is to 'protect human health and the
environment.' Gasoline is a fuel that is made up of 10's or even maybe 100's of different
chemicals that are blended together to create a fuel. The constituent concentrations of the fuel
constantly vary depending on the refinery feedstock availabilities, and it contains knowns
carcinogens. Ethanol on the other hand contains one chemical...ethanol. Ethanol that can be
consumed by humans and causes minimal damage if spilled in the environment, and ethanol that
burns cleaner and more completely than gasoline. So again, I find myself confused as to why the
EPA chooses to limit the use of ethanol in fuel when it is very simple to understand the
environmental value of ethanol over gasoline. Is the EPA losing sight of its core mission? [EPA-
HQ-OAR-2015-0111-0283-A1 p.2]
Wisconsin BioFuels Association
This EPA proposed action supports the petroleum industry's disproven 'blend wall' myth. Ethanol
consumption continues to grow while more and more vehicles are warrantied to use higher-level
ethanol blends. 62 percent of 2015 model cars are warrantied to run on El 5 and there are more
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retailers than ever adding blender pumps to offer higher-level ethanol blends. It is absurd to
suggest we've reached a saturation point of ethanol. [EPA-HQ-OAR-2015-0111-2539-A2 p.l]
Response:
Stakeholders who were obligated parties, petroleum marketers and retailers, livestock owners, or
engine owners typically said that the proposed volumes for total renewable fuel were too
high. These stakeholders pointed to expected high costs, adverse impacts on vehicles or engines,
or a general inability of the market to supply the proposed volumes. Some went further, saying
that non-compliance would occur and would lead to substantial monetary penalties, or that
refiners would be forced to reduce supply of gasoline and diesel to the domestic market in order
to reduce their obligation to acquire RINs. Many treated the constraints associated with the E10
blendwall as representing a firm barrier that could not or should not be crossed.
A number of stakeholders, particularly refiners, argued that the 2016 volume requirements
should be set in such a way that the poolwide ethanol content will be no higher than 9.7%. They
based their preferred approach on the premise that El5 and E85 cannot contribute meaningfully
to higher ethanol consumption, and that there is ongoing demand for EO (gasoline containing no
ethanol) at a level of at least 3% of the total gasoline pool. We do not find their arguments that
the poolwide ethanol content cannot be higher than 10% to be compelling. While we agree that
use of E15 and E85 is very unlikely to be sufficient to enable the market to achieve the statutory
target for total renewable fuel in 2016, they can collectively contribute a couple hundred million
gallons to the total volume of ethanol supplied in 2016.u The final 2016 volume requirement for
total renewable fuel creates the opportunity for the market to exceed a poolwide ethanol
concentration of greater than 10% without forcing the use of E15 and/or E85 in vehicles and
engines for which they were not designed as a number of stakeholders feared.
More importantly, we do not believe that recent supply of EO is on the order of 3% of the
gasoline pool as claimed by these stakeholders. They based this position on data from EIA on
the wholesale supply of non-ethanol conventional gasoline from refineries, importers, and
blenders, corrected to account for exports and stock changes. We investigated the EIA data on
which the comments were based, and concluded that it is not an appropriate basis for
determining the amount of EO actually sold at retail, and thus cannot be used to estimate likely
EO sales. While the EIA data at issue does take into account the production of E10 by large
terminals from EO supplied by refiners, it does not account for E10 produced downstream at
smaller facilities, truck blending, and blending at retail. Given that there are a number of states
that require the supply of EO at the wholesale level explicitly to permit downstream blending
with ethanol, the EIA estimates of EO supply referenced by the commenters overestimate the
potential demand for EO at retail.
Just as importantly, one of the ways that the RFS program can increase the supply of renewable
fuels in the United States is by incentivizing the market to continue to transition from EO to E10
and other higher level ethanol blends. It is mainly in the context of gasoline use in recreational
marine engines that we believe the greatest challenge exists in moving away from EO. Because
such engines are used in a water environment there is a greater potential for water contamination
11 Based on the discussion in Section II.E.2.vi of the final rule, and similar discussion of scenarios in Section II.G of
the final rule.
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of the fuel. For gasoline that contains ethanol, the water is more likely to separate from the
gasoline and cause engine damage. As a result, some recreational marine engine owners seek
out EO. As described in Section II.E.2.iv of the final rule, we believe that we should take into
consideration the ongoing preference for some EO in this context. However, our estimate of EO
used in recreational marine engines is far less than the 3% estimate provided by refiners. In
combination with achievable volumes of E15 and E85, our estimate of the need for some EO
would still result in a poolwide ethanol content higher than 10%; based on a number of scenarios
we analyzed for how the market might respond to the standards we set, we estimate that the
poolwide ethanol content could be between 10.07% and 10.18%. Information and data provided
by stakeholders did not provide a compelling reason why a poolwide ethanol content higher than
10% is not achievable in 2016.
It is highly unlikely that Congress expected the very high volumes that it specified in the statute
to be reached while maintaining a gasoline poolwide ethanol content of less than 10%. At the
time EISA was passed in 2007, EIA's Annual Energy Outlook for 2007 projected that 17.3
billion gallons of ethanol is the maximum that could be consumed in 2022 if all gasoline
contained E10 and there was no EO, E15, or E85.12 However, 17.3 billion gallons is far less than
the 36 billion gallons of renewable fuel that Congress targeted for use in 2022.13 Thus, if the
statutory targets for 2022 were to be achieved, 18.7 billion gallons of renewable fuel would need
to be consumed in 2022 either as higher level ethanol blends (El5 and/or E85), or as non-ethanol
fuels. Such levels were far beyond the industry's abilities at the time of EISA's enactment,
strongly suggesting that Congress expected the RFS program to drive dramatic industry changes
in a relatively short period of time.
One stakeholder quoted the final rulemaking setting the 2013 standards as follows:
"...EPA does not currently foresee a scenario in which the market could consume
enough ethanol sold in blends greater than E10..." (78 FR 49823)
This statement was referring to the ability of the market to reach the statutory targets in
2014. Consistent with this 2013 statement, actual supply in 2014 fell far short of the statutory
targets, in part due to the constraints associated with El 5 and E85. This same situation exists for
2016: use of E15 and E85 will not be sufficient to enable the market to achieve the statutory
target for total renewable fuel in 2016. However, as discussed earlier, higher ethanol blends can
help the market to exceed a poolwide ethanol content of 10%. For additional responses to
comments on whether the statutory volume requirements can be reached in 2014, 2015, or 2016,
under either the general waiver authority or the cellulosic waiver authority, see Section 2.2.4.
12 Assumes that AEO2007's 2022 demand for gasoline energy was fulfilled entirely by E10. AEO2007 however,
projected that considerably less gasoline used in 2022 would be E10. We have converted the projected 2022
gasoline energy demand into an equivalent volume of E10 to determine the maximum volume of ethanol that could
have been consumed in 2022, based on the AEO2007, if all gasoline was E10. Note also that E15 had not been
approved for use in 2007.
13 Congress specified that a minimum of 1 billion gallons of the 2022 total would be biomass-based diesel, but did
not otherwise specify what specific fuel types would comprise the total. For example, although Congress envisioned
substantial growth in cellulosic biofuels, that fuel category is defined by reference to the feedstock used and the
GHG reductions obtained; finished cellulosic biofuels could include such diverse products as ethanol, renewable
gasoline, naptha, compressed natural gas, or electricity
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While there is no reason that the poolwide ethanol content of gasoline cannot exceed 10%, we do
not believe that the volumes of higher ethanol blends such as El 5 and E85 will be significantly
higher in 2016 than in 2015. In the NPRM, we developed a number of scenarios under which the
poolwide ethanol concentration varied between 10.05% and 10.28%. In this final rule we have
similarly developed a number of scenarios, but based on an updated assessment of achievable
volumes of E15 and E85, along with an updated consideration of EO, the volume scenarios now
include a range of ethanol concentration of between 10.07% and 10.18%. While we
acknowledge that the market may ultimately choose a poolwide ethanol concentration higher or
lower than this range, the final standards will create the incentive for the market to increase
supply of ethanol over 2014 and 2015 levels.
A number of refiners said that the supply of gasoline and diesel for domestic consumption is
limited by the consumption of renewable fuels, and that a shortfall in the consumption of
renewable fuels will result in a shortfall in RINs in comparison to the RFS volume requirements,
forcing refiners to limit supplies of gasoline and diesel for domestic consumption in order to
reduce their RFS compliance obligations. This, in turn, would result in overall shortfalls in
transportation fuel and increases in retail prices. We believe that such circumstances are highly
unlikely for the period addressed in this rulemaking. First, it is inaccurate for refiners to claim
that the consumption of renewable fuels is wholly outside of their control. As described in
Section 2.7.1, refiners are not without tools and opportunities to increase the volume of
renewable fuels used. Second, the competitive nature of the fuels market would not permit the
overall supply of gasoline and diesel to decrease below demand. If any one refiner made a
decision to reduce its own supply of gasoline and diesel to the domestic market, another refiner
would increase its supply to take advantage of the opportunity to expand market share. Third,
we have established the volume requirements at levels that can reasonably be achieved by a
responsive market. As a result, we do not believe that shortfalls in renewable fuel use in
comparison to the volume requirements are likely.
One stakeholder cited a memorandum from Dallas Burkholder to the docket, arguing that it does
not provide support for increases in the total renewable fuel volume requirements that would
result in a poolwide ethanol concentration in gasoline higher than 10%, and that small refineries
will be disproportionately affected by the proposed volumes.14 The Burkholder memorandum
was not cited or used in the NPRM as the basis for the proposed volumes of total renewable fuel
or our determination that a poolwide ethanol concentration higher than 10% was possible in
2016. Indeed the Burkholder memorandum does not address the prospective conditions under
which ethanol volumes above the blendwall may be possible. Instead, in the NPRM we based
our intent to set the volume requirement for total renewable fuel at a level that would provide
incentives for the market to exceed the blendwall on the opportunities for increased use of higher
ethanol blends. These opportunities include those that already exist - the number of vehicles
capable of operating on higher ethanol blend and the number of stations offering them - as well
as changes in both infrastructure and relative pricing that can occur in 2016. We have elaborated
on these opportunities in Section II.E.2 of the final rule. For responses to other comments on the
impacts that the proposed volumes may have on refiners generally or small refineries
specifically, see Sections 7.3 and 10.7 respectively.
14 "APreliminary Assessment of RIN Market Dynamics, RIN Prices, and Their Effects," memorandum from
Dallas Burkholder to EPA Docket EPA-HQ-OAR-2015-0111, May 14, 2015.
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One stakeholder said that the proposed volume requirement for advanced biofuel would
encourage imports of sugarcane ethanol, and that these ethanol imports would displace corn-
ethanol because the proposed volume requirement for total renewable fuel would not result in an
increase in ethanol overall. As discussed in Section 2.1, we must consider the contribution that
imports of renewable fuel can make to the use of renewable fuel in transportation fuel in the U.S.
We discussed in Section II.D.2 of the NPRM how imports of sugarcane ethanol could be lower
or higher than recently historical levels, and in Section II.F of the final rule we provide additional
discussion of this issue. However, we disagree with the contention that imports of sugarcane
ethanol will necessarily displace corn-ethanol. The final 2016 volume requirements will create
opportunities for increases in the total volume of ethanol used in the U.S. in comparison to 2015.
While we cannot predict how the market will choose to meet the significant growth in renewable
fuel between 2015 and 2016, there will be opportunities for both increases in imports of
sugarcane ethanal imports in comparison to 2015, and increases in domestic production of corn-
ethanol in comparison to 2015.
One stakeholder pointed out that any reduction in the implied conventional renewable fuel
volume requirement creates additional opportunities for use of environmentally superior (in
terms of GHG emissions) advanced ethanol, including cellulosic ethanol. While true insofar as
conventional renewable fuel is currently predominately ethanol, our assessment was intended to
achieve the overall goal of increasing volumes of both advanced biofuel and total renewable fuel.
We did not reduce the volume requirement for total renewable fuel as a means for increasing
opportunities for advanced biofuel, since doing so would mean less volume of renewable fuel
overall, and this would be inconsistent with the statute's goal of increasing volumes.
One stakeholder said that the environmental value of ethanol (in terms of all types of combustion
emissions and impacts due to spills) is greater than that of gasoline, and that as a result it is not
reasonable for EPA to make reductions in the volume requirements that reduce the amount of
ethanol used. EPA has a responsibility under CAA 21 l(o) to ensure that the use of renewable
fuel increases over time. Since we are not reducing the volume of total renewable fuel based on
severe harm to the environment as permitted under the general waiver authority, and no
regulated party has petitioned EPA for making reductions based on severe harm to the
environment, consideration of such environmental factors is outside the scope of what can be
considered in exercising our general waiver authority on the basis of inadequate domestic supply.
Furthermore, as discussed in Section 8, there are a number of environmental consequences
associated with ethanol that may run counter to the stakeholder's claims.
For responses to comments stating that the E10 blendwall is not a constraint, or has been
fabricated by the refining industry, see Section 2.4.
For responses to comments on how exports of ethanol were calculated in the NPRM, see Section
2.4.1.
For responses to comments suggesting that the E10 blendwall can be addressed by increasing the
requirement volumes of BED, see Section 2.5.
For responses to comments on the use of higher ethanol blends in boats, see Section 2.6.2.
For responses to comments on demand for EO, see Section 2.6.2.
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For responses to comments suggesting that obligated parties have failed in their statutory
responsibilities to invest in the infrastructure needed to expand renewable fuel supply, see
Section 2.7.1.
For responses to comments on the role of carryover RINs in the RFS program and suggestions
that they could be used to increase the volume requirements, see Section 6.
For responses to comments on the economic impacts of the volume requirements, see Section 7.
For responses to comments on the impacts of different ethanol blends on engines, see Section
10.6.4.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.2
Section 2.2.2.1
Section 2.2.4
Section 2.3.1
Section 2.6.1
Section 2.7.3
Section 2.7.4
Section 3
Section 6
Section 7.2
Section 7.3
Section 7.4
Section 7.5
Section 7.6
Section 7.7
Section 7.8
Section 10.6.1
Section 10.6.5
Section 10.7
Statutory Authorities for Reducing Volume Targets
Inadequate Domestic Supply
Inability of the Market to Reach Statutory Volumes
Congressional Intent to Increase Volumes
E10 Blendwall and Demand for Gasoline
Impacts on Corn Ethanol
Impacts on Imports of Sugarcane Ethanol
Proposed National Volume Requirement for Biomass-Based Diesel for
2014-2017
Treatment of Carryover RINs
Agricultural Impacts (food, animal feed, crops, feedstock)
Fuels Industry Impacts (oil refineries, biofuel facilities)
Impact on RINs
Retail Fuel Prices
Energy Security
Impact on Jobs and Local/State Economy
Cost to Consumers
Legislative changes
Other Information and Ideas to Overcome Current Challenges
Small Refineries and Small Refiners
2.6.1 E10 Blendwall and Demand for Gasoline
Comment:
American Farm Bureau Federation (Farm Bureau)
The RFS2 Program and The Ethanol Blend Wall
Farm Bureau believes that the current RFS2 program and the Renewable Identification Number
(RIN) market are working as intended. The purpose of the RFS2 and the RIN market was to
move beyond the 10 percent blend wall by producing a strong incentive for more biofuels to
move into our nation's gasoline supply. [EPA-HQ-OAR-2015-0111-2355-A1 p. 4
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Table 1 shows market conditions for E10, E85 and conventional (D6) RINs on July 2 of this
year. Currently, the price of the D6 RIN is trading around $0.45 which allows for an incentive
for greater market penetration of E85 as indicated from the $0.28 total revenue gained from the
RIN value. The value of the D6 RIN is being used to cut the price of E85 relative to E10 ($2.13
vs. $2.77) and has provided an economic incentive in many parts of the country to get higher
than E10 blends into the market. [EPA-HQ-OAR-2015-0111-2355-A1 p. 4]
[Table 1 can be found on p. 4 of Docket number EPA-HQ-OAR-2015-0111-235 5-Al]
The fact of the matter is that the RFS2 and the RIN market that it established are working
properly and are providing incentives for refiners to offer higher blends of ethanol in the market
at prices that are increasingly competitive with conventional gasoline. Looking at the Proposed
Rule it appears that EPA is abandoning the RIN market as a mechanism for increasing the
production and sale of higher ethanol blends at the precise moment that this mechanism is
beginning to work as intended when the RFS2 passed in 2007. [EPA-HQ-OAR-2015-0111-
2355-A1 p. 4-5]
In the Proposed Rule EPA pointed to the "ethanol blend wall" as a reason for reducing the RFS
targets for proposed volume requirements. However, EPA has issued provisions allowing for the
blending of up to 15 percent ethanol in gasoline for vehicles produced after model year 2001.
Vehicles approved for El 5 constitute approximately 75 percent of the miles driven in the U.S.
today. However, to date, there has been very little adoption of this product because gasoline
stations are unwilling to put in pumps for this restricted market. [EPA-HQ-OAR-2015-0111-
2355-A1 p. 5]
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
The fact that limited data are available to project the future demand for EO, E15, and E85
increases uncertainty as to exactly where the blendwall lies, and this uncertainty justifies setting
a conservative target that avoids the chance of inadvertently crossing the blendwall. [EPA-HQ-
OAR-2015-0111-1948-A1 p.8]
Its lowest annual value was about 4.5 billion gallons, or 3 percent of gasoline demand in 2012.
The 3 percent EO demand was present even though there was a strong incentive to blend ethanol
to the 10-percent saturation point to build carryover RINs for future compliance when statutory
renewable fuel mandates increased beyond the blendwall. We focus on this low point to derive
our recommendation for the 9.7 percent guidance. That low point indicated only 97 percent of
the gasoline may have been blended with ethanol, and with E10 being almost the only blend
used, it implies the entire gasoline pool could only have about 9.7 percent ethanol. [EPA-HQ-
OAR-2015-0111-1948-A1 p.8]
The El5 Misfueling Mitigation Regulation states "No person shall produce a fuel designated as
E10 by blending ethanol and gasoline in a manner designed to produce a fuel that contains less
than 9.0 or more than 10.0 volume percent ethanol."14 As a result, blenders likely will target E10
at less than 10 percent ethanol to avoid potential errors introduced by equipment and laboratory
accuracy as well as variability in ethanol denaturant content given that any ethanol blend found
to have greater than 10.0 percent will result in a Clean Air Act violation if it is not labeled as
El5. In the past, blenders would target 10% ethanol without concern for the inherent variability,
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knowing that the resulting blend should be below 10.49% where rounding convention would
result in that being considered a 10% blend under EPA regulations. [EPA-HQ-OAR-2015-0111-
1948-Alp.lO]
API and AFPM support EPA's exercise of the general waiver authority to reduce the volumes of
renewable fuel for 2014, 2015, and 2016 as a necessary step to address the E10 blendwall. As
articulated in our original comment submission, E85 and E15 are not solutions to the E10
blendwall due to compatibility limitations of both the vehicle fleet and refueling infrastructure, in
addition to a lack of consumer demand. [EPA-HQ-OAR-2015-0111-3526-A2 p. 1] [EPA-HQ-
OAR-2015-0111-1044 pp.20.21]
AFPM and API remain concerned that the proposed volumes for 2016 exceed the E10 blendwall
based on unsupported estimates that E85 demand will dramatically increase. Should this
presumed demand increase fail to materialize, the 2016 volume proposal could begin to trigger
the negative economic consequences of the ethanol blendwall.13 EPA should not base any
assumptions of E85 or E15 demand increases on comments from parties that have provided
inaccurate information or unsubstantiated assertions.[EPA-HQ-OAR-2015-0111-3526-A2 p. 3-4]
[EPA-HQ-OAR-2015-0111-1044 p.21]
EPA correctly points out in the Proposed Rule that members of the renewable fuel industry are
free to invest in infrastructure to offer higher level blends of ethanol14 - it is after all, their
product that they are trying to force on consumers. Indeed, if members of the ethanol industry
truly believed that the only market impediment to greater consumption of E15 and E85 were a
lack of fueling pumps, they should be willing to invest in retail fueling stations so that they could
reap the rewards of alleged unmet consumer demand for higher ethanol blends. [EPA-HQ-OAR-
2015-0111-3526-A2p. 4]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-0143, p. 22.]
The AFPM has proposed a 9.7 percent cap on ethanol in gasoline because it is the minimum EPA
action necessary to retain a supply of pure gasoline for some engines, account for historical
differences between EPA projections of gasoline demand and actual demand, and promote
liquidity in the renewable identification number market.
13 NERA Economic Consulting, Economic Impacts Resulting from Implementation of the RFS2
Program (2015)
1440CFR§80.1504.
American Motorcyclist Association
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1043, p. 182-184.]
The practical effect of the EPA's action is that the ethanol production will exceed the blend wall.
That means more El5 and less E10 on the market. Moreover, the proposed rule calls for the
expansion of use of renewable fuels to meet the 2016 standards by providing grants to retail
owners and locating stations offering E15, E85 closest to higher populations of vehicles that can
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use those fuels and developing contractual mechanisms to ensure favorable pricing of El 5 and
E85 at retail compared to E10 to boost sales volumes. In other words, the EPA is proposing
Federal grants and price controls to increase the amount of the higher than E10 ethanol-blended
fuels into the marketplace. The AMA strongly disagrees with this approach.
Most importantly, the proposed rule mentions the likelihood of misfueling only once. The rule
states, Tn June of 2011, the EPA finalized regulations to prevent misfueling of vehicles, engines,
and equipment not covered by the partial waiver decisions.' This is the same misfueling
mitigation plan that initially mandated a 4-gallon minimum fuel purchase to address the concerns
raised by the AMA. It eventually was revised in 2013 to the current plan following our
complaints. Yet it is still easily misunderstood, misapplied, or ignored by State governments and
producers, distributors, and inventors. Indeed, the EPA has made it illegal for motorcycles and
ATVs users to use El5 fuel and yet seems to have little interest in the misfueling issue. It seems
the EPA's proposed rule does not consider the concerns of motorcyclists and ATV owners
despite knowing that none of the estimated 22 million motorcycles and ATVs in use in the
United States is approved to use El5 or higher ethanol blends.
American Sportfishing Association (ASA)
There is an urgent need to balance the drive towards energy efficiency and independence with
the reality of the blend wall, i.e., that gas consumption has declined because Americans are
driving less and they are driving more fuel efficient vehicles. [EPA-HQ-OAR-2015-0111-0424-
Alp.l]
Biotechnology Industry Organization
There is no technological, legal, or practical "wall" to widespread consumption of gasoline with
more than ten percent ethanol. Gasoline with ethanol content above ten percent exists, as do
millions of cars that can run on it. And other non-ethanol biofuels are available that can be used
to satisfy RFS requirements. [EPA-HQ-OAR-2015-0111-1958-A2 p. 48]
Butamax Advanced Biofuels, LLC
Further, the statutory volume targets and 2007 gasoline volume projections suggested that E10
saturation would occur by 2013. Thus, it was clearly understood by all that the intent of the
legislation was to drive ethanol penetration to levels well beyond E10. [EPA-HQ-OAR-2015-
0111-1938-A2p. 3]
The estimated date for the US gasoline market to reach E10 saturation moved forward by only a
year since 2007 and even this change has been evident from the beginning [EPA-HQ-OAR-
2015-0111-1938-A2 p. 3]
CHS, Inc.
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 172-174.]
Regarding your blending proposal, let me say up front that CHS supports a stronger renewable
fuel standard. We support the RFS because it supports American farmers and because it is setting
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the U.S. renewables industry on a path to economic viability. The RFS has proven vital to the
rural economy. Ethanol production supports the price of corn, and accounts for nearly 400,000
jobs in rural America. Ethanol also provides CHS additional market opportunity to add domestic
and global value to our farmer owners. We also believe ethanol will continue to serve as a key
component of our global energy platform as an excellent, cost-effective oxygenate and octane
booster for our refined fuels. Ethanol is a key part of the supply chain for both agriculture and
petroleum, and the RFS is needed to ensure it remains that way. CHS supports the flexibilities
that have been built into the RFS, such as those that allow the EPA to consider the fluctuation in
actual consumption and production levels. We believe the annual blending requirements should
be set with a focus on long-term impacts on the economy rather than short-term crop and market
conditions.
We urge all parties affected by the RFS to work together on an advocacy plan that recognizes
both the usefulness of ethanol as well as the realities and challenges of the nation's transportation
fuel infrastructure.
Clean Air Task Force
As part of the process for setting RVOs for 2014-2015-2016, EPA is appropriately and
necessarily taking into account the E10 blend wall, a set of "[practical and legal constraints on
the supply of ethanol blends to the vehicles that can use them." [EPA-HQ-OAR-2015-0111-
1828-A1 p.3]
Colorado Corn Growers Association
When the RFS was enacted, the authors of this policy actually envisioned renewable fuel
(primarily ethanol) displacing gasoline at an even faster pace than it is today. Increasing volumes
were to be utilized through E10 blends while the concomitant production of flex-fuel vehicles
and supporting infrastructure was established. The former has happened; the latter has
disappointingly lagged compared to what was outlined in the statute. Congress and the EPA laid
out a renewable energy plan; agriculture responded, ethanol responded, autos responded.
Obligated parties have not complied. [EPA-HQ-OAR-2015-0111-2334-A1 p.l]
Dakota Spirit AgEnergy
When the RFS was established, it always envisioned ethanol blends above 10 percent — even
with a projected increase in gasoline consumption—but oil companies are doing everything they
can to maintain their stranglehold on our nation's fuel supply.
With this flawed proposal, EPA is fundamentally changing how the RFS works by putting the
burden of fuel distribution on biofuel producers rather than branded oil, which controls more
than 50 percent of the convenience stores in this country through branding agreements and
ownership. [EPA-HQ-OAR-2015-0111-2057-A1 p.2]
Governor of Iowa, et al.
Regarding ethanol, the recent EPA proposal falls far short. The agency seems to contradict recent
findings from EPA's Office of Transportation and Air Quality on the ability of the Renewable
Identification Number (RIN) market to grow the consumption and use of biofuels. That study by
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the EPA states, "...the RIN market seems to be functioning generally as expected; providing an
incentive for the continued growth of renewable fuels in the transportation fuel market without
causing overall increases to the retail price of transportation fuel." We strongly believe that the
EPA is not responding to an infrastructure shortage for higher ethanol blends with this proposal,
but rather the EPA is creating such a shortage. A strong RFS provides the incentive for retailers
to offer higher ethanol blends to consumers. By reducing the RFS volume obligation levels, the
EPA reduces that incentive. When consumers have true choices at the pump, the "blend wall"
will crumble. [EPA-HQ-OAR-2015-0111-1915-A1 p.l]
Governors' Biofuels Coalition
In EPA's most recent announcement, the agency claims that "[t]he Clean Air Act provides EPA
with the authority to reduce the volume requirements from their statutory requirements ..." This
is a significant change in the interpretation of the statute and it lends credibility to the myth of an
E10 "blend wall." This interpretation is a major barrier to greater use of renewable fuels if EPA
sets 2016 volumes for total renewable fuels at only 9.63 percent of the total transportation fuel
supply. The proposed levels also overlook significant state and federal investments in renewable
fuel infrastructure, including the USDA's Biofuels Infrastructure Program that will add $100
million to infrastructure development and improved consumer access. [EPA-HQ-OAR-2015-
0111-2489-A1 p.l]
EPA has set blending levels for 2016 above current levels, largely because of rising gasoline use
predicted through 2016. According to EPA, the standards are "ambitious but within reach."
However, a target that hovers barely above production is certainly not "ambitious" and stifles
any notion by investors that the United States is a welcoming growth market for renewable fuels.
Congress passed the RFS with the intent of- among other things - attracting significant
investment to rural economies and diversifying our transportation fuel supply. So far, the RFS
has done just that in Iowa, Missouri, and many other states. But the chilling effect of delays and
policy uncertainty has already caused the industry to lose $13.7 billion in investments, mostly in
advanced biofuels.1 The proposed rule will prevent further investments. [EPA-HQ-OAR-2015-
0111-2489-A1 p.l]
1 "Estimating Chilled Investment for Advanced Biofuels Due to RFS Uncertainty," Bio-
Economic Research Associates. U.S. Economic Impact of Advanced Biofuels Production:
Perspectives to 2030. Washington, DC: bio-era, Feb. 2009
Growth Energy
• The Department of Energy's latest proj ections for nationwide gasoline consumption
imply a higher E10 blendwall in 2015 and 2016 than EPA's proposal assumes. [EPA-
HQ-OAR-2015-0111-2604-A2 p.3]
To do this, EPA began with the E10 blendwall. Relying on gasoline projections by the Energy
Information Administration ("EIA") issued in May 2015, EPA projected the E10 blendwall at
13.78 bil gal for 2015 and 13.69 bil gal for 2016.69 Although "the E10 blendwall is a function of
several factors, some legal, and some market-driven," EPA stated that it "believe[s] that [the
market] can respond to the standards we set to drive the use of higher ethanol blends, the E10
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blendwall notwithstanding."70 EPA's 2016 proposed renewable fuel volume would require 0.84
bil gal of renewable fuel above the E10 blendwall, after accounting for non-ethanol cellulosic
biofuel and the required level of BED.71 EPA identified several "options ... to the market to
fulfill the need for 0.84 billion gallons," including increasing BED beyond the proposed
standard, increasing importation of sugarcane ethanol, and increasing corn ethanol.72 However,
EPA concluded that "[e]fforts to increase the use of ethanol beyond the blendwall is primarily a
function of the volume of E85 that is consumed, since volumes of El 5 are likely to continue to
•yo
be small in 2016." Admitting that it "cannot... predict how the market will choose to meet [the
proposed] requirements," EPA presented "a range of possibilities" using the various market
options it identified, all based on 100-600 mil gal of E85.74 [EPA-HQ-OAR-2015-0111-2604-A2
p.11-12]
69 Id. at 33,115, Table II.A.5-1.
70 Mat 33,126.
71 Mat 33,127.
72 Id.
73 Id. at 33,126.
74 Mat 33,127.
Harrods Creek Boat Owners Association
Although the EPAs proposed ethanol volumes are lower than the law, the EPAs proposed
standard for 2016 would break through the blend wall, the point at which the volume exceeds the
10 percent limit known as E10 that is found in most gasoline. [EPA-HQ-OAR-2015-0111-1841]
Highwater Ethanol, LLC
We have identified a few items below which requires immediate attention on the proposed rule
from the U.S EPA in regards to the renewable fuels standards.
6. The notion of an E10 blend wall must be eliminated from EPA baseline calculations because it
is focused on the past rather than the present and into the future. The FFV fleet alone has a total
consumption capacity of approximately 14 billion gallons. And the non- FFVs which can use
E15 have a total consumption capacity of at least 18.5 billion gallons. Therefore the total
consumption capacity is at least 32.5 billion gallons annually. The EPA should focus on full
implementation of the RFS with respect to the renewable volume obligations while considering
some additional ramp up time for the production of advanced biofuels. [EPA-HQ-OAR-2015-
0111-2506-A2p.3]
Hinman Trucking
The blendwall and its harmful impacts must be prevented from causing further damage to our
industry. EPA could use the waiver authority to waive the RFS completely or at the very least
decrease the blending volumes. I as a trucker and owner of a trucking company request that you
do so. [EPA-HQ-OAR-2015-0111-1659-A1 p. 1]
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HollyFrontier Corporation
Regarding the proposed 2016 volumes however, we are concerned that ethanol volume will
exceed the E10 blendwall. Based on the Energy Information Agency's May 2015 forecast,
published shortly prior to EPA's Notice of Proposed Rulemaking (NPRM) for renewable fuel
volumes for 2014, 2015 and 2016, we estimate the proposed mandate of 14 billion gallons
ethanol' equates to approximately 10.16% of projected gasoline demand. HollyFrontier does not
support any proposal that surpasses the [10 blendwall, the maximum amount that our nation's
automobile fleet can safely consume. [EPA-HQ-OAR-2015-0111-2257-A1 p.1-2]
Illinois Farm Bureau
What happened to the mechanism built into the RFS to incentive use of renewable fuels to
break through the 'blend wall?'
Illinois Farm Bureau believes that the current RFS2 program and the Renewable Identification
Number (RIN) market are working as intended. The purpose of the RFS2 and the RIN market
was to move beyond 10 percent blends by producing an economic incentive for more biofuels to
move into our nation's gasoline supply. [EPA-HQ-OAR-2015-0111-3290-A2 p.2]
Table 1 shows market conditions for E10, E85 and conventional (D6) RINs on July 2 of this
year. Currently, the price of the D6 RIN is trading around $0.45 which allows for an incentive
for greater market penetration of E85 as indicated from the $0.28 total revenue gained from the
RIN value. The value of the D6 RIN is being used to cut the price of E85 relative to E10 ($2.13
vs. $2.77) and has provided an economic incentive in many parts of the country to get higher
than E10 blends into the market. [EPA-HQ-OAR-2015-0111-3290-A2 p.2] [Table 1 can be
found on p. 2-3 of Docket number EPA-HQ-OAR-2015-0111-3290-A2]
The fact of the matter is that the RFS2 and the RIN market that it established are working
properly and are providing incentives for refiners to offer higher blends of ethanol in the market
at prices that are increasingly competitive with conventional gasoline. Looking at the proposed
rule it appears that EPA is unceremoniously discarding the RIN market as a means for increasing
the production and sale of higher ethanol blends - strangely at the time this mechanism is
beginning to work as Congress intended when the RFS2 was enacted eight years ago. [EPA-HQ-
OAR-2015-0111-3 290-A2 p.3]
Illinois Farm Bureau believes that the ethanol blend wall can be overcome with tools already at
EPA's disposal. RFS2 volume mandates and RIN prices are working as intended to provide
incentives for the production and use of higher ethanol blends. The petroleum industry's absolute
unwillingness to offer higher blends should not force the agency to conclude that the RFS2 is
unworkable. It's simply evidence that the industry is purely looking out for its own interests.
There is simply no need to roll back volume requirements in the proposed rule. [EPA-HQ-OAR-
2015-0111-3290-A2 p.3]
Independent Fuel Terminal Operators Association (IFTOA)
Finally, in subsequent years, EPA plans to adopt a much more aggressive approach and to try to
compel significant changes in the market to accommodate much greater volumetric
mandates. While some may argue that this approach is consistent with the general statutory goal
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— to continually increase the use of renewable fuels — it is not consistent with the statutory
structure created for the RFS Program. [EPA-HQ-OAR-2015-0111-1947-A1 p. 2]
Iowa Farm Bureau Federation (IFBF)
Most troubling is the flawed methodology that EPA is using to justify a reducing in the blending
requirements. The renewable fuels industry has more than enough capacity to produce in excess
of the 15 billion gallons of conventional biofuel prescribed for 2015 by the RFS2. There is
clearly not a supply limitation. Using the lack of infrastructure as an excuse for setting biofuels
levels lowers than originally mandated is not following the intent of the law that was passed by
Congress. The EPA should not call the difficulties associated with blending higher than 10% a
'blend wall' and then call this a supply issue. This proposed rule lays out a methodology that will
never allow biofuels to exceed approximately 10% of the market share. This is directly against
the intent of the RFS2 as passed by Congress — which is to push infrastructure investments to
increase market access for biofuels well beyond 10%. [EPA-HQ-OAR-2015-0111-1717-A1 p. 2]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-0143, p. 109.]
Unfortunately, the EPA is now using the lack of infrastructure as an excuse for setting biofuels
levels lower than originally mandated. The EPA should not call the difficulties associated with
blending higher than 10 percent a blend wall and then call that a supply issue.
Kansas Department of Agriculture (KDA)
KDA recognizes the need for additional access to infrastructure in the form of distribution
systems and fuel pumps in order for the ethanol industry to be competitive with unleaded
gasoline. Through a partnership with the Kansas Corn Commission, Renew Kansas, ICM,
Kansas Grain Sorghum Commission, and the United Sorghum Checkoff Program, KDA has
submitted a USD A Biofuels Infrastructure Partnership grant to double the number of blender
pumps in the state. [EPA-HQ-OAR-2015-0111-1196-A1 p.l]
Little Sioux Corn Processors
The EPA has a decision to make on the RFS. It can side with the Oil industry and its
inherent 90% mandate by capping the required ethanol inclusion in our gasoline supply at 10%
or it can stand up for American jobs, farmers, and clean energy innovation. With this cap,
innovation and investment in our industry will die and the dramatic strides our industry has made
in efficiency will skid to a halt. There has been a tremendous amount of capital invested in
transportation services, technical expertise, and other support industries. Thousands of jobs are
at risk and the perceived level of certainty of the law is lost if the EPA continues its present
course. The law was designed to push the barrier. It was not designed to be comfortable for the
obligated party. It was designed to allow market access and give the obligated party a mechanism
to control their fate in the marketplace. [EPA-HQ-OAR-2015-0111-1664-A1]
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Mass Comment Campaign sponsored by American Motorcyclist Association (AMA) (web)
- (29,379)
The practical effect of the EPA's action is that ethanol production will exceed the 'blendwall,' the
point at which no more ethanol can be mixed into the nation's fuel supply without resulting in
blends higher than 10 percent. That means more E15 and less E10 on the market. [EPA-HQ-
OAR-2015-0111-2049-A1 p.2]
Moreover, the proposed rule calls for stakeholders to overcome market barriers to expand the use
of renewable fuels to meet the 2016 standards by:
• 'Increasing the number of retail stations offering El 5 and E85 through direct installation
of new equipment or providing grants to retail owners, and locating stations offering
E15/E85 closest to higher populations of vehicles that can use those fuels' and
• 'Developing contractual mechanisms to ensure favorable pricing of El 5 and E85 at retail
compared to E10 to boost sales volumes'
In other words, the EPA is proposing federal grants and price controls to increase amount of the
higher-than E10 ethanol blended fuels into the marketplace. [EPA-HQ-OAR-2015-0111-2049-A1
p.2]
The AMA strongly disagrees with this approach. Instead, the market should dictate demand and
let the consumer choose the proper fuel for each vehicle. [EPA-HQ-OAR-2015-0111-2049-A1
p.2]
Most importantly, the proposed rule mentions the likelihood of inadvertent misfueling only once.
The rule states: '...in June of 2011, the EPA finalized regulations to prevent misfueling of
vehicles, engines, and equipment not covered by the partial waiver decisions.' This is the same
misfueling mitigation plan that initially mandated a 4-gallon minimum fuel purchase to address
the concerns raised by the AMA. It was eventually revised in 2013 to the current plan following
our complaints, yet it is still easily misunderstood, misapplied or ignored by state governments
and producers, distributors and vendors. [EPA-HQ-OAR-2015-0111-2049-A1 p.2]
With the misunderstood and unenforced misfueling plan and the proliferation of E15 in the
marketplace, especially through blender pumps, motorcyclists and ATV riders face an increased
risk of unknowingly fueling their vehicles with a blend higher than the federally approved E 10.
[EPA-HQ-OAR-2015-0111-2049-A1 p.3]
Indeed, the EPA has made it illegal for motorcyclists and ATV users to use El5 fuel and yet
seems to have little interest in the misfueling issue. It seems the EPA's proposed rule does not
consider the concerns of motorcyclists and ATV owners despite knowing that none of the
estimated 22 million motorcycles and ATVs in use in the United States is approved to use El 5 or
higher ethanol blends. [EPA-HQ-OAR-2015-0111-2049-A1 p.3]
Mass Comment Campaign sponsored by anonymous 12 (email) - (560)
As a producer, I know the statutory requirements can be met through a combination of gasoline
consumption in the form of E10, increased use of higher ethanol blends such as El 5 and E85,
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carry-over RINs and increased biodiesel use. There is no need for EPA to move backward with
its proposed volumes for 2015 and 2016. [EPA-HQ-OAR-2015-0111-0215-Al p.l]
When the RFS was established, it always envisioned ethanol blends above 10 percent - even
with a projected increase in gasoline consumption—but oil companies are doing everything they
can to maintain their stranglehold on our nation's fuel supply. [EPA-HQ-OAR-2015-0111-0215-
Alp.l]
Mass Comment Campaign sponsored by anonymous 13 (web) - (121)
Congress intended for the share of biofuels in transportation fuel to increase annually. Instead,
the explicit calls for increases have been blocked by a fictitious 'blend wall' that was devised by
the oil industry to artificially keep biofuel supply in transportation fuel capped at 10 percent.
[EPA-HQ-OAR-2015-0111-0106 p.l]
Mass Comment Campaign sponsored by anonymous 26 (web) - (11)
It has been proven that when higher blends of ethanol are available at retail locations, sales of
ethanol increase dramatically. The Renewable Fuels Standard (RFS) effectively promotes access
for biofuels and diminishes the stranglehold that the petroleum industry has on the market. There
is no blend wall because the demand for E-15, E-30, E-85 is strong and further infrastructure
development and access to the market has yet to be fully utilized. [EPA-HQ-OAR-2015-0111-
2826 p.l]
Mass Comment Campaign sponsored by anonymous 4 (web) - (786)
Mandates to increase the percentage of biofuels - such as corn-based ethanol - into gasoline will
cause consumers to make more trips to the pump because ethanol contains 33 percent less energy
than pure gasoline. Data compiled by the U.S. Department of Energy found that compared to
vehicles running on 100 percent gasoline, those that contain 10 percent ethanol - E 10 - typically
go three to four percent fewer miles. Mileage continues to decline when cars are filled with
gasoline containing 15 percent ethanol or higher. What this means is that drivers are being forced
to buy a product that's forces them to spend more over time. [EPA-HQ-OAR-2015-0111-0127
p.l]
Mass Comment Campaign sponsored by anonymous 5 (web) - (386)
Ethanol mandates require refiners to blend impossible amounts of ethanol into gasoline -
amounts that the current gasoline supply cannot safely accommodate and for which there is not
enough expected demand. Despite this, refiners face up to $32,500 in fines per day if they fail to
comply with the RFS. Critically, EPA's proposed standard for 2016 would break through the
'blend wall,' the point at which RFS volume exceeds the volume that can be practically blended
into gasoline and diesel fuel. Continuing forward with the standards as written would have far-
reaching consequences such as inevitable compliance fines, excess supply and an eventual slow-
down in domestic energy production. [EPA-HQ-OAR-2015-0111-0128 p.l]
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Mass Comment Campaign sponsored by anonymous 6 (web) - (391)
Although the EPA's proposed ethanol volumes are lower than the law, the EPA's proposed
standard for 2016 would break through the 'blend wall,' the point at which the volume exceeds
the 10 percent limit known as E10 that is found in most gasoline. [EPA-HQ-OAR-2015-0111-
0129 p.l]
Nearly 95 percent of vehicles on the road today, as well as lawn equipment, motorcycles, boats
and other small engines, are not designed or warrantied to use fuel that exceeds E10. In fact, it is
illegal to use a fuel that exceeds E10 in all small engines and in vehicles built before model year
2001. [EPA-HQ-OAR-2015-0111-0129 p.l]
But the EPA's proposal also erodes consumer choice in what fuel they put in their tanks. While
motorcyclists and boaters seek out pure gasoline, the agency's proposal assumes consumption of
that type of fuel will drop - even as recent data shows demand soaring. [EPA-HQ-OAR-2015-
0111-0129 p.l]
In place of ethanol-free gasoline, the EPA wrongly assumes that more and more drivers will use
E85. [EPA-HQ-OAR-2015-0111-0129 p.l]
The market, not a mandate, should drive which fuels are available to drivers at the local gasoline
station. The EPA should lower the volumes for its final ruling to reflect reality of what drivers
really want and what engines really need - instead of what the corn lobby demands. [EPA-HQ-
OAR-2015-0111-0129 p.l]
Mass Comment Campaign sponsored by DENCO II. Absolute Energy. L.L.C. (paper) -
(633)
As an investor that works closely with the Absolute Energy, L.L.C. plant, I know the statutory
requirements can be met through a combination of gasoline consumption in the form of
E10, increased use of higher ethanol blends such as E15 and E85, carry-over RINs and increased
biodiesel use. There is no need for EPA to move backward with its proposed volumes for 2015
and 2016. [EPA-HQ-OAR-2015-0111-0207-A1 p.2]
When the RFS was established, it always envisioned ethanol blends above 10 percent — even
with a projected increase in gasoline consumption—but oil companies are doing everything they
can to maintain their stranglehold on the nation's fuel supply. [EPA-HQ-OAR-2015-0111-0207-
Al p.2]
Mass Comment Campaign submitted by investors in Golden Grain Energy LLC. (paper) -
(327)
As an informed investor, I know the requirements initially spelled out in The RFS can be met
through E10, increased use of El 5 and E85, carry-over. RINs, and increased biodiesel use. There
is no need for the EPA to move backward with its proposed volumes for 2015 and 2016, and the
only ones to benefit would be the oil companies strangling the nation's fuel supply. [EPA-HQ-
OAR-2015-0111-2559-A1 p.l]
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Michigan Boating Industries Association
I am writing to voice my concern about the increasing levels of ethanol content in gasoline and
request that the EPA set the final ethanol mandate under the Renewable Fuel Standard (RFS) for
2014, 2015 and 2016 to no more than 9.7 percent of gasoline demand. The proposed standards
ask for an increasing amount of ethanol to be blended into gasoline which is already damaging to
boat and marine engines. Setting the final mandate to no more than 9.7 percent of gasoline
demand will help to ensure that fuel such as E10 and EO will continue to be readily available.
[EPA-HQ-OAR-2015-0111-3448-Alp.l]
Congress should fix the RFS through legislation, but in the meantime, please set the final ethanol
mandate to no more than 9.7 percent of gasoline demand to protect businesses and jobs in
Michigan. [EPA-HQ-OAR-2015-0111-3448-A1 p.2]
Minnesota Bio-Fuels Association (MBA)
EPA must decouple the notion of specific volume requirements set forth in the RFS from the
total national gasoline consumption for the next several years. Congress was explicit in its call
for increasing amounts of renewable biofuel to displace finite, carbon intensive fossil fuel. Thus,
the focus of the EPA ought to be directed toward the automobile manufactures and other
stakeholders who do, or can, play a greater role in using and making higher volumes of biofuels
available in the marketplace. [EPA-HQ-OAR-2015-0111-1936-A1 p.6]
The notion of an E10 blendwall, however, must be eliminated from EPA nomenclature and
baseline calculations because it is focused on the past rather than the present and into the future.
[EPA-HQ-OAR-2015-0111-1936-Alp.9-10]
Rather than use E10 as the basis for the 'blendwall' (footnote 7, FR at 33102) and segment the
transportation fuel market between FFVs and non-FFVs, the EPA should aggregate the total fuel
consumption capacity. Thus, according to EIA, as cited by the EPA (FR at 33128), the FFV fleet
alone has a total consumption capacity of approximately 14 billion gallons. And the non-FFVs
which can use El 5 have a total consumption capacity of at least 18.5 billion gallons. Therefore
the total consumption capacity is at least 32.5 billion gallons annually. [EPA-HQ-OAR-2015-
0111-1936-A1 p.10]
Minnesota Corn Growers Association (MCGA)
EPA's proposed RVO numbers fall in line with the fictional 10 percent blend wall and well
below actual ethanol production. The blend wall is a myth created by the oil industry. The "Big
Five" oil companies use rigid franchise and branding agreements, restrictive supply contracts,
outlandish labeling requirements, punitive penalties and other heavy-handed tactics to discourage
retail fuel stations from selling higher ethanol blends like El 5 and E85. [EPA-HQ-OAR-2015-
0111-1920-Al,p.l]
Unbranded or independent fueling stations are four to six more times likely to offer E85 than one
of the "Big Five" oil brands. Independent stations are over 40 times more likely to offer El 5.
[EPA-HQ-OAR-2015-0111-1920-Al,p.l]
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The American ethanol industry and the corn farmers who support it are more than capable of
producing enough ethanol to far exceed the oil industry's fictional 10 percent blend wall. Here in
Minnesota, we're already well beyond the make-believe blend wall. According to the Energy
Information Administration, ethanol made up 12.2 percent of the Minnesota fuel supply in 2013.
[EPA-HQ-OAR-2015-0111-1920-Al,p.l]
Not only do Minnesotans have access to nearly 300 stations that offer E85, they also can fill up
with E15 at 30 stations. Since the Fall of 2013, a broad coalition that includes MCGA has
invested in ethanol infrastructure and helped install more than 120 flex-fuel pumps throughout
the state. These pumps give consumers the choice of filling up with regular unleaded, El 5, E30
orE85. [EPA-HQ-OAR-2015-0111-1920-A1, p.l]
That's real consumer choice. Many of the retailers with flex-fuel pumps often report that drivers
choose El5 if given the option because it's less expensive, better for air quality and approved for
use in all vehicles manufactured in 2001 or after. [EPA-HQ-OAR-2015-0111-1920-A1, p.l]
Minnesota's recent success in dispelling the myth of the blend wall follows a tradition of being a
pioneer in the ethanol industry. We were the first state to blend 10 percent ethanol in our supply.
This decision helped clean the air in the Twin Cities metro area and brought the region back into
attainment status with the EPA. [EPA-HQ-OAR-2015-0111-1920-A1, pp. 1-2]
Minnesota Soybean Processors (MnSP)
MnSP believes that EPA has failed to differentiate renewable fuels as to those serving the
gasoline market and those serving the distillate (diesel) market. Because of this lack of
differentiation we believe EPA is using the so-called ethanol blend wall as an opportunity to
incorrectly pressure the biodiesel RVO downwards from what the biodiesel industry can easily
produce and distribute. Ethanol, both conventional, cellulosic and sugarcane, serve as
replacements to the gasoline pool; biodiesel serves as a diesel/fuel oil replacement. While oil and
water are both liquids, they are both different and cannot replace each other. Simply put, ethanol
won't function in a diesel engine nor will diesel function in a gasoline engine. [EPA-HQ-OAR-
2015-01 ll-2505-Alp.2]
Minnesota State Senate
When the RFS was established, it always envisioned ethanol blends above 10 percent, but oil
companies are doing everything they can to maintain their stranglehold on the nation's fuel
supply. [EPA-HQ-OAR-2015-0111-3284-A1 p.2]
With this flawed proposal, EPA is fundamentally changing how the RFS works by putting the
burden of fuel distribution on biofuel producers rather than branded oil, which controls more
than 50 percent of the convenience stores in this country through branding agreements and
ownership. [EPA-HQ-OAR-2015-0111-3284-A1 p.2]
Missouri Corn Growers Association (MCGA)
We find that the methodology used to develop the proposal is flawed and goes against the law. If
finalized, EPA's current proposal would cement the oil industry's ability to keep biofuels out of
the market place. By embracing the "blend wall" concept, the EPA removes any incentive for the
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oil industry to expand biofuel production and distribution capacity and effectively turns the RFS
into a cap on biofuel production and use. The oil industry has had from 2007 to 2015 to install
infrastructure to bring higher blends into the marketplace. Their intentional opposition to doing
so is a blatant attempt to circumvent the law and should not be allowed as an excuse for a "blend
wall." [EPA-HQ-OAR-2015-0111-2507-A2p. 1]
Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
2. EPA's assumption that it has a responsibility to move the E10 blendwall by pushing increased
use of E85 is incorrect and misreads Congressional intent.
As described below, EPA further erred by setting volume requirements intended to "drive
growth" of conventional ethanol, which, according to the NPRM, "Congress intended." Given
the context in which Congress passed the Renewable Fuel Standard, that is decidedly incorrect.
The statutory volumes set for 2016 imply a conventional ethanol mandate of only 67 percent of
the total renewable fuel volume target—in contrast to the NPRM's implied ethanol mandate of
about 80 percent of the total renewable mandate. Moreover, Congress never contemplated that its
volume mandates would require the economy to breach the E10 blendwall through the use of
conventional ethanol. By comparing the statutory mandates to the 2007 EIA projections of
gasoline consumption that Congress used to set them, one sees that Congress' goals for
conventional ethanol relative to gasoline use were about 9.4 percent in 2014, 9.6 percent in 2015;
and 9.5 percent in 2016. These percentages provide an important historical counter-weight to
EPA's suggestion that Congress expressly intended EPA to drive the use of conventional ethanol
past the E10 blendwall with high-ethanol blends, such as E85. Congress instead envisioned a
cellulosic fuels revolution that never materialized, along with steadily increasing gasoline
consumption that has since retreated. [EPA-HQ-OAR-2015-0111-2603-A2, pp.16-17]
However, the NPRM significantly understated the [0.84 billion gallon] gap. Estimates using the
same data sources used by EPA indicate that, in fact, the gap is likely closer to 1.1 billion
gallons. EPA's understatement is due to it significantly overestimating the amount of ethanol the
economy was on pace to consume as E10. [EPA-HQ-OAR-2015-0111-2603-A2, p.20]
In projecting that the economy will consume 13.69 billion gallons of ethanol as E10 in 2016,
EPA appears to have used EIA's May 2015 Short-Term Energy Outlook ("STEO") data for total
gasoline consumption and multiplied that figure by about 9.96 percent, presumably to account
for the E10 blendwall.52 Yet, as economists Scott Irwin and Barrel Good have observed, that
very same EIA data projected the economy was then on pace to consume only 13.46 billion
gallons of ethanol in total (i.e., including E15 and E85) in 2016—about 230 million gallons
fewer than EPA projections of ethanol in E10 alone.53 That is because EIA expected ethanol to
represent only 9.78 percent (not 9.96 percent) of gasoline consumption in 2016.54 [EPA-HQ-
OAR-2015-0111-2603-A2, p.20]
According to Irwin and Good, the 9.78 percent ethanol inclusion rate in EIA's May 2015 STEO
reflected continued use of EO gasoline.55 In the NPRM, EPA projected that "the use of EO . . .
would only reduce the total volume of ethanol that can be consumed by about 13 million gallons
out of the 13.69 billion gallons we estimated above." But the data then available to EPA showed
that EO use is much greater. And the data are consistent with historical trends. In their comments
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to the current NPRM, the American Petroleum Institute ("API") and the American Fuel &
Petrochemical Manufacturers ("AFPM") review EIA historical data on EO demand, and discover
that demand averaged 6.5 billion gallons per year—or 5 percent of annual gasoline demand—
between 2012 and 2014. Demand for EO hit its lowest in 2012, at only 3 percent of gasoline
demand. Taking that level as a conservative reference point, they argue that the 2016 mandate
should reflect total ethanol consumption equal to 9.7 percent of gasoline consumption, plus an
additional 100 million gallons of E85. This conservative recommendation reflecting the impact
of EO on ethanol consumption is roughly in line with EIA's May 2015 STEO projection of a 9.78
percent ethanol inclusion rate for 2016. [EPA-HQ-OAR-2015-0111-2603-A2, p.21]
Had EPA accounted for EIA's lower ethanol inclusion rate, it would have realized that the gap
between EPA's mandate and the amount of renewable fuel that the economy was then on pace to
use was not merely 840 million gallons, but nearly 1.1 billion gallons.57 [EPA-HQ-OAR-2015-
0111-2603-A2, p.22]
National Association of Truck Stop Operators (NATSO)
III. NATSO Supports EPA's Exercise of its Waiver Authority
NATSO believes that EPA's Proposal wisely takes advantage of the Agency's statutory authority
to avoid the blend wall. The blend wall represents the point at which there is an insufficient
supply of renewable fuel that can be delivered to consumers. If the RFS's volume obligations
exceed the volume of renewable fuels that the market can absorb, the market will hit the blend
wall. This would lead to a significant increase in the price of fuel, caused by a shortage of
Renewable Identification Numbers ("RINs"), which are used to ensure compliance with the
RFS's volume obligations. If the market reaches the blend wall, there will not be enough RINs
to allow obligated parties to satisfy their volume obligations under the RFS. This will result in
significantly elevated prices for RINs that are available. Some obligated parties could fail to
acquire sufficient RINs and face fines from EPA. Others would take steps to reduce their
obligations under the Program (such as reducing or exporting production).
All of these situations will add costs to fuel production and, as happens in every industry, these
costs will be passed down to retailers and ultimately will be absorbed by consumers. [EPA-HQ-
OAR-2015-0111-2478-A1 p.4]
National Chicken Council (NCC)
The statutory levels were set in 2007 based on projections of fuel demand at the time according
to the Energy Information Agency's (EIA) Annual Energy Outlook. That forecast projected
motor gasoline use at a level much higher than actually occurred. In fact, 2007 proved to be the
peak of motor gasoline use in the United States and demand has decreased since then due to long
term trend factors such as increased mileage efficiency and the demographics of the driving age
population. According to the 2007 Annual Energy Outlook, motor gasoline use was projected to
be 150 billion gallons in 2014 and 152 billion gallons in 2015. But according to the EIA's Short
Term Energy Outlook of June 2015, actual motor gasoline use in 2014 was 132 billion gallons
and is forecast to be 133 billion gallons in 2015, effectively lowering the blend wall by a
significant volume. [EPA-HQ-OAR-2015-0111-1814-A1 p.2]
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National Corn Growers Association (NCGA)
EPA should take into account the fact that recent EIA gasoline demand projections have
exhibited a strong and consistent downward bias when later compared to actual demand data.
[EPA-HQ-OAR-2015-0111-1939-Alp.4]
National Corn-to-Ethanol Research Center (NCERC at SIUE)
If finalized, EPA's proposal for 2014-2016 RFS requirements would place the key to our energy
future firmly back in the hands of the oil industry. By embracing the "blend wall" concept, the
proposal effectively destroys the incentive to expand biofuel production and distribution
capacity, and allows oil companies to blend only as much renewable fuel as they are comfortable
using. The proposed rule would stifle innovation and fundamentally alter the future course of the
RFS program. Therefore, we are strongly encouraging EPA to reconsider its proposal.
We recommend setting the 2014-2016 requirements for renewable fuel at the levels intended by
Congress, [EPA-HQ-OAR-2015-0111-1226-A2 p. 1]
National Taxpayers Union (NTU)
In the regulatory announcement, the EPA purports to be using its waiver authority in order to
address "[^imitations in the volume of ethanol that can be consumed given practical constraints
on the supply of higher ethanol blends to the vehicles that can use them." Given this
consideration, it is unclear why the EPA would propose a 2016 RVO that exceeds the E10 blend
wall. The EPA seems to be operating under the assumption that there will be a dramatic increase
in consumption of higher ethanol blends of gasoline such as El 5 or E85, despite no evidence
supporting an imminent, sudden surge. [EPA-HQ-OAR-2015-0111-3279-A1 p.l]
Nebraska Unicameral Legislature
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 111.]
But the blend wall is actually existent only because we do not have the cooperation of the oil
industry in allowing the different blends to be under the canopy. And I know they talk a lot about
the independent stations that are out there that can do whatever they want. But in reality, if they
do not follow what the franchisees' agreement is, they will jerk their name off the canopy. And
so there is a blend wall, and that's only occurred because of the oil industry's reluctance to blend
more fuel.
Nestle
With respect to the 2015 and 2016 mandates, we agree with EPA that both availability of
cellulosic biofuels and the E10 blendwall must be taken into account. It would make little sense
for EPA to announce the cellulosic mandate embodied in the Clean Air Act, since this would
represent many multiples of the actual supply of cellulosic biofuels that will be available under
any realistic scenario. [EPA-HQ-OAR-2015-0111-1918-A1 p.2]
Similarly, the E10 blendwall represents a real constraint that, contrary to the protests of the
ethanol industry, cannot and should not be ignored. It is not necessary to invoke conspiracy
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theories - as ethanol advocates have sometimes done - in order to explain why the blendwall is
an issue. First, total gasoline usage is less than anticipated in 2007 when the current RFS
numbers were approved by Congress. One would think this was a good thing. However, it
seems to be a problem for the ethanol industry, which insists that the original numbers should be
enforced regardless of what has occurred in the real world of automotive fuel demand in the
intervening years. [EPA-HQ-OAR-2015-0111-1918-A1 p.2]
Novozymes Americas
The proposed rule depends on the artificial "blend wall" - an invention of the oil industry. The
ethanol industry has always met the production levels required in the RFS and - as Missouri
Governor Jay Nixon promised at the Kansas City hearing - American farmers and ethanol
producers will meet it again. The only cap on supply to consumers is the oil industries' willful
disregard of its obligations. [EP A-HQ-OAR-2015-0111-3 277-A1 p.3]
Petroleum Marketers Association of America (PMAA)
PMAA is cautiously optimistic that the proposed levels will forestall breaching the ethanol blend
wall, though we are concerned that 2016 the mandate may need to be readjusted given the
overall drop in national gasoline consumption - a trend that is expected to continue into the
foreseeable future. [EPA-HQ-OAR-2015-0111-1197-A1 p.l]
Phillips 66 Company
EPA should reduce the 2016 volume requirements to a level that does not exceed the E10 blend
wall. [EPA-HQ-OAR-2015-0111-2039-A1 p.6]
Poet, LLC
Experts have found that "EPA could potentially increase the 2015 and 2016 ethanol mandates
fairly substantially in the final rulemaking based solely on updated usage projections" (e.g.,
better estimates of gasoline use).87 [EPA-HQ-OAR-2015-0111-2481-A1 p.21]
87 Irwin and Good, The EP A's Proposed Ethanol Mandates for 2014, 2015, and 2016: Is There a
'Push' or Not!, supra, at 4-5.
Renewable Fuels Association (RFA)
Still, even if the E10 "blend wall" was a legitimate and allowable criterion for setting the annual
RVO for renewable fuel, the proposal's estimates of the E10 saturation point in 2015 and 2016
are far too low. [EPA-HQ-OAR-2015-0111-1917-A1 p. 21]
However, EIA's gasoline demand projections for 2015 and 2016 have been revised upward in
the most recent available (July 2015) STEO. In other words, the so-called "blend wall" continues
to shift upward. We strongly encourage EPA to adopt the latest STEO gasoline demand figures,
as well as some allowance for upward revision, for the final rule. [EP A-HQ-OAR-2015-0111-
1917-Alp. 21]
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We believe EPA's 2015 and 2016 RVO calculations should account for the demonstrated
downward bias of EIA's gasoline projections. We believe EPA should adjust the estimate of
2015 and 2016 gasoline demand by the same percentage that actual 2014 gasoline demand
exceeded the STEO projection in the corresponding 2014 and 2013 month of the most current
STEO projection available at the time EPA prepares the final rule. [EPA-HQ-OAR-2015-0111-
1917-A1 p. 22]
By adopting the oil industry's "blend wall" concept, EPA's proposal—if finalized—would allow
obligated parties to comply simply by blending E10 in both 2015 and 2016. Thus, the proposal
destabilizes the RIN mechanism and eliminates the means of driving investment in expanded
renewable fuel production and distribution infrastructure. [EPA-HQ-OAR-2015-0111-1917-A1
p. 24-25]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-0143, p. 35.]
In fact, oil companies don't have to change anything they're doing as a result of this proposal. Oil
companies could very easily meet their 2015 obligations simply by blending E10 and their 2016
obligations by blending E10 and turning in a handful of surplus RINs, which will be in ample
supply.
Rider, Allen
Further, it is time to stop using the constraining term 'E10 blend wall.' The future for higher-
blend ethanol is bright.
Tenaska Commodities, LLC
If all diesel in the US was blended with 10% bio, we could have a 5.5 billion gal bio market.
Surely the EPA knows that obligated parties indeed have options, even if the RVOs were left at
the original statutory levels. [EPA-HQ-OAR-2015-0111-0503-A1]
The Andersons, Inc.
By embracing the 'blend wall' concept, the proposal effectively destroys the incentive to expand
biofuel production and distribution capacity, and allows oil companies to blend only as much
renewable fuel as they are comfortable using. The proposed rule would stifle innovation and
fundamentally alter the future course of the RFS program. [EPA-HQ-OAR-2015-0111-2509-A2
p.l]
The resulting understatement of 2014 actual ethanol blending and its carry forward effects on
EPA's estimates for 2015 and 2016 blending requirements will have the effect of leaving the
RVO significantly below the so called Blend Wall. If it was the EPA's intent to stretch the Blend
Wall beyond 10% but keep it to a manageable level, you failed in that attempt. [EPA-HQ-OAR-
2015-0111-2275-A2p. 3]
Proof that the Proposed Rule will not achieve the intended stretch of the Blend Wall can be
readily seen in the price action of RINS immediately after the NPRM announcement. RIN prices
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plunged to half of the value they held prior to the announcement and have only recovered
modestly in the last couple weeks.
Earlier I mentioned that we are a large marketer of E85 in the US. We blend ethanol with natural
gasoline at each of our plants and deliver directly to retailers. Because we are the blender of
record, we detach the RINS and sell them to Obligated Parties. The value of the RIN is deducted
from our ethanol price so that we are able to offer E85 at a competitive price that is fully
discounted. Yesterday our price of E85 direct to Retailers for less than $1.25 per gallon. Prior to
the announcement, we were offering E85 at less than $.95 per gallon. All of the price change is
due to the decline in RIN values. The decline in RIN prices has affected how competitively our
price offering is relative to gasoline. Expanding E85 sales is one achievable path around at least
expanding the Blend Wall beyond 10%. [EPA-HQ-OAR-2015-0111-2275-A2 p. 3]
The Boat Owners Association of The United States (BOATU.S.)
We are also concerned with the likely increase in the number of blender pumps at gas stations.
We understand that a certain amount of residual El 5 remains in blender pump fuel hoses if a
previous customer selected it. This again raises the chance that amounts of ethanol higher than
10% will be put into a boat's engine and the boat owner will suffer its costly negative
consequences. Additional consideration should be giving to mis-fueling mitigation plans so as to
not unduly burden boat owners and protect marine engines. [EPA-HQ-OAR-2015-0111-2265-A1
p. 2]
The George Washington University
Gasoline Demand
In addition, despite the fact that a purpose of the RFS program is to reduce gasoline
consumption, domestic demand for gasoline has not kept pace with Congress's and EPA's
expectations. While Congress and EPA expected gasoline consumption to continue increasing,
actual demand dropped from a high of 3.389 million barrels of gasoline in 2007, when the EISA
was passed, to 3.25 million in 2014.25
25 U.S. Energy Information Administration. "Petroleum & Other Liquids: U.S. Product Supplied
of Finished Motor Gasoline." Accessed July 22, 2014.
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MGFUPUSl&f=A
Response:
The E10 blendwall is the volume of ethanol that could be consumed if all gasoline contained
10% ethanol, and there was no EO nor any fuels containing more than 10% ethanol, such as El 5
or E85. The blendwall is one convenient way of measuring the ability of the market to expand
the use of renewable fuel because, of all ethanol blends, E10 enjoys some benefits that other
ethanol blends do not: Virtually all vehicles and engines and retail stations are compatible with
and warranted for E10, and the distribution infrastructure has expanded to distribute it
nationwide. Thus increasing the use of ethanol in gasoline is more straightforward and more
easily accomplished as volumes of E10 increase, and becomes less straightforward and less
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easily accomplished as the E10 blendwall is exceeded and further ethanol consumption increases
must occur in the form of increased volumes of El 5 and/or E85.
Comments on the E10 blendwall fell into two primary groups, neither of which reflects EPA's
views. Refiners and others opposed to the expansion of ethanol use typically pointed to the E10
blendwall as a barrier that could not or should not be crossed. In contrast, proponents of ethanol
typically claimed that there are no limits to growth in ethanol use in 2016 if EPA set the volume
requirements high enough. Neither of these perspectives reflect both the capabilities and
limitations of the marketplace.
The E10 blendwall is not, as some stakeholders said or implied, an insurmountable barrier. As
described more fully in Section 2.4, while we believe that there are real constraints on the ability
of the market to exceed a pool-wide ethanol content of 10%, these constraints can be overcome
over time. Levels of ethanol somewhat higher than the E10 blendwall can occur in the short
term, including in 2016, while more dramatic levels above the E10 blendwall will require longer
periods of time. Recognizing these real-world constraints while still ensuring growth in
renewable fuel volumes does not "place the key to our energy future firmly back in the hands of
the oil industry" as one stakeholder claimed.
Some stakeholders said that EPA has treated the E10 blendwall as a barrier to growth in the RFS
program. This is not the case. While we recognize that growth in ethanol volumes beyond the
E10 blendwall may be more challenging than growth in ethanol volumes up to the E10
blendwall, they are not impossible. Indeed, the final 2016 volume requirement will create
opportunities or the market to exceed the E10 blendwall as described in Section II.G of the final
rule. More importantly, the RFS program is not limited to ethanol. The final 2016 volume
requirement for total renewable fuel is about 4 billion gallons beyond the E10 blendwall, and we
expect the market will respond with both increases in E15/E85 and increases in non-ethanol
renewable fuels.
The amount of ethanol associated with the E10 blendwall is driven by the total demand for
gasoline, and thus ethanol consumption will tend to increase if gasoline consumption increases
and ethanol consumption will tend to decrease if gasoline consumption decreases. In the NPRM
we used a projection of 2016 gasoline demand from the May 2015 version of EIA's Short-Term
Energy Outlook (STEO), as this was the most recent version available at that time. A number of
stakeholders said that we should use more recent projections of 2016 gasoline demand. For this
final rule we have used the October 2015 version of the STEO.
One stakeholder said that the projected volume of ethanol used in E10 in Table II.D.2-1 of the
NPRM (13.69 billion gallons) did not reflect the actual volume of ethanol projected by EIA to be
used in 2016. We did not use EIA's projection of ethanol consumption from the May, 2015
version of its Short-Term Energy Outlook (STEO) because the RFS program is intended to drive
growth in the use of renewable fuels, not to set the 2016 volumes on the basis of EIA's projection
of ethanol consumption. The 13.69 billion gallon volume from the NPRM was based on the
assumption that all gasoline in 2016 would be E10, and that there would be no EO, El 5, or E85.
In other words, the 13.69 billion gallon estimate represented the E10 blendwall, and was only
used as a benchmark for determining potentially higher volumes of ethanol that would need to be
used as E15 or E85. The 13.69 billion gallon estimate was derived from EIA's estimate of total
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gasoline energy (not volume) demand in 2016, based on the May, 2015 STEO's projection of
total gasoline consumption and the volume of ethanol included in that gasoline.
In response to our proposed intention to use gasoline projections from EIA, several stakeholders
indicated that EIA's projections of gasoline demand have historically tended to be lower than
actual demand. They requested that we make an adjustment to EIA's projections to ensure that
they are as accurate as possible. We investigated this issue and determined that by and large
EIA's projections of gasoline demand have not, in fact, been lower than actual demand. As
described in a memorandum to the docket, projected gasoline demand has more often been
higher than actual demand, though the errors in demand projections were highly variable.15 Even
so, we do not believe it would be appropriate for EPA to make adjustments to EIA projections to
account for potential over- or underestimation of projected gasoline demand. EIA staff are the
experts in the analyses required for these particular projections, and EPA does not have the data
or expertise necessary to make changes to them.
Regarding the ethanol content of E10, one stakeholder cited a new regulatory requirement which
appears to place a cap of 10.0% on the ethanol content of every batch of E10 to address potential
vehicle misfueling with E15. Prior to this new regulation, all references to the ethanol content
of gasoline cited 10% rather than 10.0%, providing blenders with some flexibility (i.e. 10.49%
ethanol would be considered to be the same as 10% ethanol). The stakeholder raising this issue
argued that the new regulatory requirement would compel blenders to change their operations to
ensure that they will always be below 10.0%, effectively resulting in an ethanol content of E10
below 10.0%.
We addressed this issue in a proposal published in 2013. In that proposal we said:
"At the same time, we did not intend to change the definition of E10 in a way
that impacts the rounding of test results for ethanol concentrations. If a
manufacturer blends in a way designed to result in a gasoline-ethanol fuel
containing no more than 10.0 vol% ethanol, but compliance testing indicates a
concentration of 10.4 vol%, we will still round down the test result in accordance
with procedures in section 80.9."
As a result, blenders will have the same flexibility as they have always had in producing E10,
and thus E10 can continue to be considered to be composed of 10.0% denatured ethanol and 90%
gasoline, as we proposed in the NPRM.
One stakeholder took issue with our intentions to be aggressive in increasing the volume
requirements in 2016 and beyond, saying that doing so would not be consistent with the statutory
structure. Instead, this stakeholder argued that EPA should take a more neutral approach to
setting future volume requirements that takes into account the blendwall, limitations in
production of advanced and cellulosic biofuels, automobile manufacturers' warranty restrictions,
and distribution infrastructure limitations. However, the various constraints that this stakeholder
listed as being important to consider in determining the appropriate volume requirements are in
fact some of the very constraints that we described in the NPRM as forming the basis for our
15 "Analysis of historical errors in projections of gasoline and distillate demand from EIA," David Korotney,
memorandum to EPA docket EPA-HQ-OAR-2015-0111.
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proposal to reduce the volume requirements below the statutory targets. As to use of the words
'neutral" versus "aggressive," we note that the intent of the statute is to increase the use of
renewable fuels, and even when we make use of the available waiver authorities to reduce the
volumes below the statutory targets we must reduce them only to the degree necessary to fulfill
our responsibilities under those waiver authorities taking into consideration the various
constraints. We noted in the NPRM that this process was imprecise:
"...we cannot precisely predict how the market will respond to the volume-driving
provisions of the RFS program. Thus the determination of the maximum
achievable volumes is one that we believe necessarily involves considerable
exercise of judgment. To this end, we are proposing "maximum achievable"
volumes of advanced biofuel and total renewable fuel in this package that reflect
our judgment as to where the boundary between adequate domestic supply and
inadequate domestic supply might fall, particularly for 2015 and 2016." (80 FR
33105)
The proposed total renewable fuel volume requirements, as well as the final requirements based
on updated information and analyses, are designed to require use of the maximum reasonably
achievable volumes. We believe setting volumes at this level can be considered "aggressive" in
that they are intended to provide the incentive for the market to considerably grow in its ability
to supply renewable fuels. This is exactly the result that Congress intended. This stakeholder
provided no data or analysis to indicate that there would be "great economic harm to consumers
and the economy" as a result of the proposed volume requirements as they contended in their
comments, and likewise did not provide numerical suggestions regarding the levels that it
deemed to be more "neutral" than those we proposed.
One stakeholder pointed out that the volumetric energy content of ethanol is lower than that of
pure gasoline, and that as a result a gallon of E10 will propel a vehicle fewer miles than a gallon
of pure gasoline. While this is true, and the impact becomes more pronounced at higher
concentrations of ethanol in gasoline, it is not necessarily the case that this effect will cost
vehicle owners more as this stakeholder contended. Rather, the net impact on the cost to drivers
depends on a variety of factors that affect retail fuel prices, including the price of crude oil, the
price of ethanol, and the value of the RIN, among other things. For additional responses to
comment on retail fuel prices, see Section 7.5.
One stakeholder said that the EPA should "decouple" the statutory targets for renewable fuel
from total demand for gasoline, since the statutory targets were designed to increase every year
without explicitly being tied to overall gasoline demand. While we agree that the statute did not
explicitly mention overall gasoline demand, the statute does provide waiver authorities that
permit the statutory targets to be reduced under certain circumstances. We have determined that
since the overall demand for gasoline determines the level of the blendwall, and since supply of
ethanol to vehicles at levels above the blendwall is increasingly difficult as the volume of ethanol
increases, that total demand for gasoline is a relevant consideration in the determination of the
maximum volumes of total renewable fuel that are reasonably achievable.
One stakeholder said that EPA was using the E10 blendwall as an opportunity to limit increases
in biodiesel. However, the stakeholder did not specify anything in the NPRM stating or
implying this. On the contrary, the NPRM explicitly discussed the levels of biodiesel and
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renewable diesel that were possible in terms of production capacity, availability of feedstocks,
and constraints associated with diesel engine warranties and cold weather
operation.16 Consideration in the NPRM and this final rule of potential biodiesel supply is
independent of the E10 blendwall. For responses to comments suggesting that the E10 blendwall
can be addressed by increasing the required volumes of BED, see Section 2.5.
One stakeholder argued that it was Congress's intention that the total volume of ethanol would
not exceed the blendwall even if the statutory targets were achieved. This stakeholder made the
implicit assumption that all conventional (non-advanced) renewable fuel would be ethanol, and
that all advanced biofuels would be non-ethanol. However, as described in Section 2.4.3, it is
inappropriate and misleading to assume that the conventional renewable fuel volume is identical
to the volume of the ethanol that would be required in 2016. More importantly, as described
more fully in Section 2.6, it is highly unlikely that Congress expected the very high volumes that
it specified in the statute to be reached while maintaining a gasoline pool-wide ethanol content of
less than 10%. It is true that Congress expected the largest increases in renewable fuel after 2015
to result from increases in cellulosic biofuel. While those large increases in cellulosic biofuel
have not materialized, we believe that it is nevertheless appropriate to set standards that the
market is capable of achieving and which result in growth over previous years, even if those
standards cause the E10 blendwall to be exceeded. Nevertheless, we have taken into
consideration factors that constrain the ability of the market to exceed the blendwall when
determining the maximum volumes that are reasonably achievable.
For responses to comments on whether constraints associated with infrastructure can be
considered to contribute to "inadequate domestic supply" under the general waiver authority, see
Section 2.2.2.1.
For responses to comments on how the REST mechanism operates to subsidize the cost of
renewable fuels at retail, see Section 2.3.2.
For responses to comments stating that production capacity should be the basis of the volume
requirements, see Section 2.4.
For responses to comments on the demand for EO in the past, see Section 2.6.
For responses to comments suggesting that the ethanol content of the gasoline pool should be
kept below 10%, or that the proposed volume requirements would ensure that the ethanol content
would remain below 10%, see Section 2.6.
For responses to comments on USDA's Biofuel Infrastructure Partnership, see Section 2.6.2.
For responses to comments on misfueling at retail, see Section 2.6.2.
For responses to comments on the use of higher ethanol blends in boats, see Section 2.6.2.
For responses to comments on the ability of the 2016 market to substantially increase sales of
E15 and E85, see Sections 2.6.2 and 2.7.1, respectively.
16 For instance, see page 33128 of the NPRM (80 FR 33100, June 10, 2015)
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For responses to comments suggesting that obligated parties have failed in their statutory
responsibilities to invest in the infrastructure needed to expand renewable fuel supply, see
Section 2.7.1.
For responses to comments on whether the NPRM was promoting price controls at retail and
forcing consumer to purchase El 5 and/or E85, see Section 2.7.1.
For responses to comments suggesting that the proposed volumes would result in shortfalls in
RINs, monetary penalties for non-compliance, and shortfalls in gasoline and diesel, see Sections
2.6 and 7.
For responses to comments on the role of carryover RINs in the RFS program and suggestions
that they could be used to increase the volume requirements, see Section 6.
For responses to comments on the relationship between the standards and REST prices, see
Section 7.4.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.2.2 General Waiver Authority
Section 2.3 Proposed Approach to Determining Volume Requirements
Section 2.3.1 Congressional Intent to Increase Volumes
Section 2.4.1 Proposed Total Renewable Fuel Volume for 2014
Section 2.4.2 Proposed Total Renewable Fuel Volume for 2015
Section 2.4.3 Proposed Total Renewable Fuel Volume for 2016
Section 2.7.3 Impacts on Corn Ethanol
Section 3 Proposed National Volume Requirement for Biomass-Based Diesel for
2014-2017
Section 6 Treatment of Carryover RINs
Section 7.1 General Comments on Economic Impacts
Section 7.5 Retail Fuel Prices
Section 7.6 Energy Security
Section 7.7 Impact on Jobs and Local/State Economy
Section 7.8 Cost to Consumers
Section 10.6.1 Legislative Changes
Section 10.6.4 Ethanol Impacts on Engines
Section 10.6.5 Other Information and Ideas to Overcome Current Challenges
2.6.2 Assumptions of Zero Volumes for EO and E15
Comment:
American Automobile Association (AAA)
In recent years, we have communicated our concerns to the administration, Congress and
regulators regarding the RFS's heavy reliance on one particular blend of fuel, El 5. Our concern
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was primarily related to the relatively few number of vehicles warrantied to operate on a fuel
with an ethanol content higher than 10 percent, and the high potential for consumers to
inadvertently misfuel their vehicles thereby voiding the vehicle's warranty. AAA continues to
believe that El5 is not ready for primetime - the proper protections have yet to be met to prevent
misfueling and more consumer engagement and awareness is needed as EIS continues to enter
the marketplace.
The average vehicle is expected to be on the road for 11.4 years, and the majority of vehicles in
the legacy fleet were not designed to run on blends higher than 10 percent ethanol. Although
automakers are increasing the availability of vehicles warrantied to run on El 5, a recent AAA
analysis shows that the number of vehicles capable of running on E15 is just more than 10
percent. Without the appropriate consumer safeguards being put in place, as the availability of
higher blends of ethanol enter the market, AAA asserts that many motorists are being put at risk
of misfueling their vehicle. The percentage of ethanol blended into the fuel supply is often a
highly politicized topic and AAA does not oppose the use of ethanol or the RFS. Ethanol blends
can provide motorists with additional refueling options at the pump that promote energy security
and independence and supports jobs. We recognize these benefits, but strongly believe that these
fuels should be incorporated into the market in a manner that does not put consumers and their
vehicles at risk.
Also, as noted in a number of other public comments AAA submitted to the EPA, we believe
that the current measures being taken to prevent misfueling are insufficient. Simply labeling a
fuel distribution nozzle and/or pump puts the average driver at unnecessary and unacceptable
risk. History has shown that labels are not enough to prevent misfueling, and we ask that
additional steps be taken to ensure the consumer is adequately protected. For example, utilizing
technology in a manner that makes misfueling nearly impossible, and/or completely redesigning
the pump and nozzle to be compatible only with vehicles capable of running on higher blends of
ethanol would help mitigate the risk. Taking either of the abovementioned steps will be
imperative, as higher blends of ethanol and other alternative fuels are considered for sale. [EPA-
HQ-OAR-2015-0111-2037-A1 p.1-2]
American Coalition for Ethanol (ACE)
EPA has estimated E15 sales nationally were only 40 million gallons in 2014. While EPA's
memorandum outlining that projection was well-reasoned and mathematically correct, it failed to
take into consideration historical ethanol marketing realities and how retail fuel markets actually
function. [EPA-HQ-OAR-2015-0111-2543-A2 p. 11]
This year, a few days prior to EPA's release of the proposed 2014, 2015, and 2016 RVOs, the
National Renewable Energy Laboratory (NREL) released a much more in-depth study that
concluded, among other things, "the majority of installed tanks can store blends above
E10."u[EPA-HQ-OAR-2015-0111-2543-A2p. 12]
11 E15 and Infrastructure. K. Moriarty, National Renewable Energy Laboratory. J. Yanowitz,
Ecoengineering, Inc. May 2015. http://www.nrel.gov/docs/fyl5osti/64156.pdf
American Council on Renewable Energy (ACORE)
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According to a study by the National Renewable Energy Laboratory, USEPA's assumption that
fuel tanks cannot be used to store El 5 is incorrect, "as the majority of installed tanks can store
blends above E10."22 [EPA-HQ-OAR-2015-0111-1926-A1 p.8]
99 _
E15 and Infrastructure. National Renewable Energy Laboratory (NREL), May 2015,
http://www.nrel. gov/docs/fy 15 osti/6415 6. pdf
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
the Proposed Rule mistakenly underestimates and ignores consumer demand for EO. This flawed
assumption overstates the ability of the market to "absorb" ethanol in gasoline (i.e..,
overestimates the point at which the blendwall becomes binding). [EPA-HQ-OAR-2015-0111-
1948-A1 p.7]
EPA has not acknowledged the significant vehicle compatibility issue with E15. According to
the automobile manufacturers, only those vehicles whose owners' manuals specifically state that
they are designed for El5 can safely use this fuel. The American Automobile Association's
("AAA's") calculations indicate that only about 10 percent of the vehicles on the road today can
use El5, including flex fuel vehicles.5 Moreover, tests designed by automobile manufacturing
company engineers and conducted by the Coordinating Research Council ("CRC"), demonstrate
that ethanol blends above 10% can damage vehicle engines and fuel systems. EPA's substitution
of its judgment in place of that of the automobile manufacturers is misplaced and not entitled to
deference. Vehicle warranties and guidance in owners' manuals present an objective resource
that the Agency should rely on with respect to El 5 compatibility. [EPA-HQ-OAR-2015-0111-
1948-A1 p.7]
EPA included a memorandum in the docket that attempted to estimate how much EO the
recreational boating industry demands.10 The methodology was based on sales of gasoline
additive from one supplier that serves 640 out of about 3,000 U.S. marinas. The additive is
designed, among other things, to mitigate some of the E10 problems recreational boats
experience. The additive is optional, making it a poor metric for determining EO demand. EPA
arbitrarily extended that limited information to all marinas without validation and assumed
marina use represented all recreational boating consumption. Many recreational boaters fill up at
retail stations outside of the marina. EPA's assumption that EO refueling occurs primarily at
marinas is not correct and significantly underestimates recreational boating EO demand. [EPA-
HQ-OAR-2015-0111-1948-A1 p.9]
Another indication that the EPA memorandum underestimates U.S. recreational marine gasoline
demand stems from the fact that the memorandum estimates that all U.S. recreational marine
gasoline sold (not just EO) was 248 million gallons, which differs significantly from EPA's own
non-road model estimates of almost 1.7 billion gallons consumed by recreational boaters in
2012.11 [EPA-HQ-OAR-2015-0111-1948-A1 p.9]
The Agency also does not address EO demand from other sectors such as small engine use,
antique cars, etc. While we do not know of other sector-specific EO demand data, these sector
needs forEO must be acknowledged. [EPA-HQ-OAR-2015-0111-1948-A1 p.10]
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Today, the overwhelming majority of vehicles have neither been certified nor warranted for
ethanol blends above 10 volume percent, and every automaker has declined to extend warranty
coverage if its legacy vehicles are operated using E15.47 [EPA-HQ-OAR-2015-0111-1948-A1
p.28]
Given that states require this certification and that dispensers have useful lives greater than 20
years, the vast majority of dispensers in the country are not currently authorized to dispense El 5.
The same issue exists with the underground storage tanks and piping systems. Approximately
96% of the gasoline stations in the country are independently owned and it is beyond the control
of the obligated parties to require investments to make those stations compliant.59 [EPA-HQ-
OAR-2015-0111-1948-A1 p.32]
EPA must avoid promulgating a rule that would require the manufacture and sale of a fuel
product (El 5) that carries with it a number of substantial (and unresolved) liability issues. [EPA-
HQ-OAR-2015-0111-1948-A1 p.34]
El5 Liability
Comments from ethanol advocates including Poet point to branding agreements as a restriction
on El 5 availability.10 Gasoline retailer associations PMAA, SIGMA and NACS make clear the
primary obstacles to offering El 5 are a lack of demand, equipment compatibility and potential
liability concerns. PMAA states: "Consumer and retailer acceptance of E15 will determine the
pace of market growth for E15. In the near term, E15 will be offered at very few gas stations."11
SIGMA and NACS detail the groups' concerns over potential liabilities from using incompatible
equipment, misfueling, and voiding warranties for legal and unapproved use.12 We encourage
EPA to review comments from PMAA, SIGMA and NACS in detail. Refiner brands share many
of these concerns. [EPA-HQ-OAR-2015-0111-3526-A2 p. 2]
5 Green, Michael. The Real Facts on AAA and Ethanol; AAA Newsroom at:
http://newsroom.aaa.com/2013/12/the-real-facts-on-aaa-and-ethanol/ Accessed July 18, 2015.
10 "Estimating EO Volume Sold in the U.S. at Marinas," memorandum from Lester Wyborny to
EPA, docket EPA-HQ-OAR-2015-0111-0009.
11 Transportation Energy Data Book, Edition 33, Oak Ridge National Laboratory, Table 9.6 (July
31, 2014) (derived from 194.7 trillion BTUs.
47 http://sensenbrenner.house.gov/UploadedFiles/El5 Auto Responses.pdf
59 PMAA letter to Chairman Upton and Ranking Member Pallone, House Committee on Energy
and Commerce, May 1, 2015.
http://www.pmaa.org/weeklyreview/attachments/PMAA_Rebuttal_RFA_April_2015_FINAL%2
O.pdf
10 EPA-HQ-OAR-2015-0111-2481 p. 20
11 EPA-HQ-OAR-2015-0111-1197
12 EPA-HQ-OAR-2015-0111-1921
American Motorcyclist Association
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1043, p. 183-184.]
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Regarding EO, the EPA discounts it and does not factor it in in its scenarios. The EPA views EO
as a constraint on the volume of ethanol that can be consumed and expects such volumes to be
lower than they were in the past as the market tries to expand consumption of ethanol under the
influence of the RFS program. This statement contradicts the data from the Federal Energy
Information Administration that shows that demand for EO rose from 3.4 percent in 2012 to
nearly 7 percent in 2014. Consumers want EO for their motorcycles, ATVs, boats, lawn mowers,
and other equipment because it does not pose the risk of engine and fuel system damage.
The AMA urges the EPA to not increase and instead to lower the proposed volumes when the
final rule is issued November 30th. Proposed volumes would increase the risk of inadvertent
misfueling for motorcyclists and all-terrain vehicle owners by forcing the widespread availability
of higher ethanol fuel blends, such as E15. [Docket Number EPA-HQ-OAR-2015-0111-1043, p.
182.]
Association of Nebraska Ethanol Producers (ANEEP)
With respect to the RFS, USEPA has already approved a 15% blend of ethanol with gasoline for
any automobile built after 2001. A transition to El 5 would increase the biofuel consumption by
approximately 50% compared to the current E10 blend. Such actions would dismantle the so-
called 'blend wall' and make petroleum industry arguments against achieving the statutory RFS
volumes moot. [EPA-HQ-OAR-2015-0111-1809-A1 p.4]
El5 would also allow for a decreased public exposure to aromatic hydrocarbons as BTEX and
benefit the nation's fight to reduce PM-10/PM-2.5 and ambient ozone levels. [EPA-HQ-OAR-
2015-0111-1809-A1 p.4]
Association of Nebraska Ethanol Producers (ANEEP)/Schmit Industries, Inc.
Just as the Nebraska Legislature led the nation in calling for the removal — of lead from
gasoline that same institution today is asking that your Agency expedite the removal of cancer
causing aromatics from gasoline by insisting that petroleum retailers make available to the public
E-15 ethanol blends with gasoline. That increased level of ethanol will produce a more
environmentally friendly fuel. We will never know how many millions of our citizens have died
or suffered needlessly because the petroleum companies continued to use lead as an octane
enhancing element many years after they knew it was dangerous to human health. We should not
allow the same entities to continue to use health endangering aromatics one day longer than
necessary when a safe additive like ethanol is available. [EPA-HQ-OAR-2015-0111-1956-A2
p.l]
I hope that your Agency, encouraged by Senator Haar's Letter, will use your authority in the
future as you have in the past to insist that the petroleum industry make available to the public
the most environmentally favorable fuel possible, E-15. [EPA-HQ-OAR-2015-0111-1956-A2
p.l]
Aventine Renewable Energy
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 353-354.]
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First, the obvious one is the EPA ruling resulted in ethanol demand destruction of a billion
gallons a year. So the ruling, right off the top, a billion gallons is erased in terms of the mandate.
A third consequence is because of the price of the D6 RINs has been reduced by 30 cents a
gallon, the market is now disincentivizing blender pumps whereby higher rates of E15, E20 of
ethanol are blended. All of these are examples of the immediate unintended consequences of the
recent EPA decision.
There has been $50 billion spent in ethanol for 15 billion gallons of new production, and all of a
sudden, the EPA is changing the rules of the game. The United States ethanol policy is the most,
single most successful renewable energy program in the world in scope and in size and in
everything else. Yet the EPA must not like the success because they've demonstrated the actions
and are reducing actual physical demand for ethanol.
Board of Commissioners, Mercer County; Crawford County; Greenville-Reynolds
Development Corporation; Office of Commissioners, Lawrence County, Pennsylvania
There are significant reasons that mandated ethanol blend rates should be lowered. They include:
2. No consumer demand for E85 and E15. The administration should not try to force the use of
fuels like E85 and El 5 for which there is no significant consumer demand while trying to
eliminate fuels like EO for which actual consumers have shown a substantial demand.
• 90% of cars on the road today are designed to use ethanol blends of 10 percent or less and
only 6 percent of the current vehicle fleet can use E85.
• E85 has 30% loss in fuel economy, and according to AAA, is more expensive per mile
driven.
• E85 demand is only 0.15 percent of overall gasoline demand; and demand, in recent
years, has been relatively flat, despite more stations offering E85 as an option.
• EPA needs to acknowledge the real demand for EO - non-ethanol gasoline. Consumers
want EO for their boats, for lawn equipment, and for motorcycles and older vehicles.
[EPA-HQ-OAR-2015-0111-1666-A1 p. 2]
Chevron
In its comments, Protec Fuel mischaracterizes a 2011 communication from Chevron to its
branded reseller customers, including it as an example of'actions taken by obligated parties to
discourage growth of EIS and E85 adoption'1 and concluding that it 'contradict[s] what is being
stated by obligated parties, namely major oil companies.' We disagree with Protec Fuel's
characterization as it is ultimately the decision of the independent retail outlet owner on what
products to offer. [EPA-HQ-OAR-2015-0111-3527-A1 p.l]
A copy of this 2011 communication from Chevron is attached as Exhibit A. In addition, Protec
Fuel inaccurately claims in its comments that 'Chevron Corp. prevents the selling of E15/E85 at
all stations." This statement is incorrect, and we explain below why Protec Fuel's claim is wrong.
[EPA-HQ-OAR-2015-0111-3527-A1 p.l]
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Under our long-standing policy and practice, the operators of Chevron® and Texaco® branded
motor fuel retail outlets may sell, in addition to our branded products, motor fuels from a source
other than Chevron, including alternative or renewable fuels like E15 and E85. We only require
that retailers do so in a way that (I) avoids consumer confusion over the source of the products
sold and infringement of Chevron's trademarks, and (2) complies with Chevron's retail outlet
image standards and applicable laws. Chevron provides written guidelines to help retailers
implement non-Chevron product offerings at stations in our branded network. A copy of those
guidelines is attached as Exhibit B. They state that 'non-Chevron branded motor fuels can also be
sold in conjunction with Chevron branded fuels under the branded canopy when proper care is
taken to clearly identify them as 'Not a Chevron Product'.'4 The letter in Exhibit A simply serves
as a reminder of this Chevron policy. [EPA-HQ-OAR-2015-0111-3527-A1 p. 1-2]
Chevron supports the responsible development of biofuels. The United States needs all sources
of commercially viable energy and biofuels are an important resource. Almost all of Chevron's
gasoline now contains up to 10 percent ethanol and we have spent millions of dollars to enable
ethanol blending at our motor fuel terminals. We have also been actively engaged in efforts to
develop technologies for converting biomass into transportation fuels at commercial scale. [EPA-
HQ-OAR-2015-0111-3527-A1 p.2]
1 Steve Walk, Prater Fuel, Comments to Docket ID No. EPA-HQ-OAR-2015-0111, July 16,
2015, page 6.
2 Ibid, page, page 9.
3 Ibid, page 7.
4 Chevron Retail Image Guidelines, Section 12.2
Clean Air Task Force
Many gasoline retailers have been reluctant to sell higher blends, particularly El5, due to
concerns about the likelihood of misfueling, the possibility that they could be held liable for
engine damage, and the cost of installing specialized tanks and pumps.9 [EPA-HQ-OAR-2015-
0111-1828-A1 p.4]
9 See, e.g., Global Automakers Responses to House Energy and Commerce Committee's Stakeholder
Questions Regarding the Renewable Fuel Standard (April 5,2013)
Conestoga Energy Partners Holding
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 248-249.]
Purpose of the blending credit that expired 2011 was to help the obligated parties offset the cost
of infrastructure. They knew this day was coming. They didn't use the money wisely. The
blending wall was self-induced and meant to keep the consumer from having a choice of fuel at
the pump. El 5 is the most widely tested fuel we've ever had, and it's been proven safe. And all
we're asking is that Congress keep its word, allow the program to work, and sunset at its
conclusion.
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Conference of Professional Operators for Response Towing
C-PORT, on behalf of the hundreds of small marine assistance business owners whose livelihood
depends on a vibrant boating community, asks that the EPA reconsider its position of increased
blends. We urge the agency to ensure that the boating industry isn't threatened by dangerous
fuels and ensure that the blendwall isn't breached. [EPA-HQ-OAR-2015-0111-1718-A1 p. 1]
DuPont
This [May 2015 NREL] report and its findings provide overwhelming support that the
marketplace is well suited for adopting higher biofuel blends and is in direct conflict with EPA's
assertion that "For ethanol blends, there are both legal and practical constraints on the amount of
ethanol that can be supplied to the vehicles that can use it..." [EPA-HQ-OAR-2015-0111-1826-
Alp.19]
East Kansas Agri-Energy, LLC (EKAE)
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, p. 287.]
I am against the EPA proposal to change the Renewable Fuels Standard by lowering the ethanol
volume requirement for three primary reasons. The current RFS is working and meeting the
intended objectives. It was passed by Congress in 2005 in an effort to primarily decrease our
dependency on foreign oil and to produce a fuel that is safer to the environment. Over 14 billion
gallons of ethanol are being produced per year and has allowed the U.S. to become less
dependent on foreign oil. In addition, ethanol has contributed to lower prices at the pump as the
big oil companies, despite what they may say, have enjoyed the ability to blend ethanol to attain
the required octane rating at a lower cost. The production of U.S. ethanol over the RFS
requirement has allowed us to also meet a growing global need, but in a more volatile export
market. The belief by the agency that there is "inadequate domestic supply" is simply
inaccurate.
ExxonMobil Refining & Supply Company
What is clear is that the distribution and sale of El 5 and other mid-level ethanol blends creates
real risks not only for automobile owners and drivers (e.g., potential vehicle or engine damage;
warranty voidance; lower mpg), but also for automobile makers, fuel manufacturers and service
station retailers (e.g., potential consumer dissatisfaction; harm to brand and business reputation).
Moreover, these risks may become potential business or legal liabilities for obligated parties, fuel
distributors/retailers, ethanol producers, and vehicle and engine manufacturers. [EPA-HQ-OAR-
2015-01 ll-2270-Alp.6]
In the same vein, E15 fuel blends are not compatible with, or manufacturer-approved for, many
types of existing fuel storage and/or dispensing facilities such as underground storage tanks, fuel
lines and dispenser pumps. Through the use of mid-level ethanol blends, service station owners
and operators may put their equipment at risk of failure; may violate any number of federal, state
or local laws or regulations governing fuel storage and distribution; and may compromise their
station insurance policies or dealer agreements. [EPA-HQ-OAR-2015-0111-2270-A1 p.7]
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Farmers Cooperative Company
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1043, p. 249-251.]
The main point EPA makes for lowering the volume obligations is that America is up against a
so-called blend wall for ethanol. A simple solution to this concern is the El 5 ethanol-blended
gasoline. However, due to EPA's flawed RVP policies, El 5 has run up against a wall of
restrictions that do not fairly allow it to be sold in the same manner as E10. While E10 and E15
have similar RVPs, E10 is the only blend that is allowed the 1-pound summer exemption. At our
ethanol blending sites, El 5 accounts for only 11 percent of our ethanol blend sales, and that
percentage stays the same all year round, even with the summer sales restriction. The reason, I
believe, is because motorists are confused. The average person on the street does not want or
need to understand the technical and mostly political reasons why El5 is restricted during the
summer months while E10 can be purchased all year. The consumer wants a consistent type of
fuel to use in their vehicles all year round. Granting El 5 the same 1-pound waiver as E10 in the
summer would enable El 5 to become the new standard fuel sold in the United States, reducing
ethanol demand by 50 percent. The fuel distribution terminals owned by the big oil companies
would have no choice then but to meet demand and make El 5 an available choice at the racks.
Better policies need to be enacted to make higher ethanol blends available at the consumer level
as well.
So the State of Iowa has made great strides in the offering of incentive programs to build the
infrastructure to dispense these higher ethanol blends. However, in my travels to other areas, it
has been difficult to locate ethanol blends higher than E10. Working with these areas to help set
up incentive programs and educate retailers and consumers alike will be another large step to
increase our renewable fuels usage across the United States.
Governor of Iowa, et al.,
State leaders also call on the EPA and Federal leaders to eliminate summer blending restrictions
for El5 that impose a significant artificial barrier for consumers to access El5 in the summer
months by granting the one pound waiver to equalize the vapor pressure regulations for E10 and
El5. Further, we call on Federal leaders to investigate restrictive branded oil contracts that out-
right prohibit the sale of El 5 or make it so cumbersome or costly to offer a non-petroleum
controlled product. Further, the EPA should replace the use of harmful aromatics with use of
cleaner burning ethanol. [EPA-HQ-OAR-2015-0111-1915-A1 p.2]
Green Plains, Inc.
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 251-252.]
The RFS should be used as the vehicle for higher ethanol blends in the United States. It has been
the most successful energy legislation in this country's history and has reduced our dependence
on foreign oil, cleaned the air we breathe, created jobs across rural America, and created a strong
secondary market for farmers to sell their corn. More ethanol into the fuel supply is a positive for
not just the Midwest, but for the United States. As an industry, we have successfully introduced
higher blends into the marketplace, proving that there is no blend wall. El5 is growing in
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availability to drivers on the road today, and more and more manufacturers are certifying El5 for
use in their new models. Many retailers like Kum & Go, Mapco, and Sheetz, Cenex, Murphy,
and Minnoco have committed to providing their consumers with the opportunity to choose which
blended fuel works best for them. Moving to E15 means more jobs here at home, more octane in
your gas tank, and an even cleaner-burning fuel and, more importantly, giving consumers the
right to choose.
Growth Energy
One would naturally then expect to find somewhere in the proposal or EPA's supporting
materials, some analysis explaining why the number of El 5 stations could not grow significantly
in the next year if provided incentive to do so under the RFS program, or a concrete assessment
of how many drivers might actually have warranty concerns. Yet, EPA provides nothing of the
sort. Rather, EPA takes the 100 stations offering E15 as a given, without any justification, and
proceeds to estimate how much incremental ethanol would be sold through those same
stations.241 [EPA-HQ-OAR-2015-Oil 1-2604-A2 p.42]
The first readily available path for bringing El5 to market would be to start blending it at the
terminal. [EPA-HQ-OAR-2015-Oil 1-2604-A2 p.43]
Once terminals start offering El 5—which would happen if EPA actually adhered to the volume
requirements mandated by Congress and El 5 proved to be a relatively cost-effective means for
obligated parties to comply—stations would require very little additional investment to receive
and dispense E15. Most stations are already El 5-compatible.250 The vast majority of stations
already have a tank compatible with E15.251 Both manufacturers of fuel dispensers fully warranty
their standard dispensers for El 5 usage.252 Stations would only need to purchase a retrofit kit,
which costs $2,000 per dispenser including installation, in order to comply with any Underwriter
Laboratories listing requirements.253 [EPA-HQ-OAR-2015-0111-2604-A2 p.44]
With respect to piping and other equipment, Stillwater explains that the costs of upgrading
depend on how recently the station has been upgraded. Stations upgraded in the last five years
will have already done the work to get most of their equipment El 5-compatible, because since
2010, the equipment used in these upgrades has been El 5-compatible, even if the station was not
seeking to add E15.254 It would cost these stations only $1,000-$!,500 to upgrade, on top of the
retrofit kits.255 Stations that last upgraded longer ago than that would cost $7,000-$8,000, in
addition to the dispenser retrofit kit.256 [EPA-HQ-OAR-2015-0111-2604-A2 p.44]
Stillwater conservatively estimated that under current regulations El 5 sales could generate an
incremental 1.6 bil gal of ethanol consumption in 2016, by displacing 32 bil gal of E10 sales in
strategically targeted parts of the country. [EPA-HQ-OAR-2015-0111-2604-A2 p.45]
Applying a layered phase-in that takes advantage of the industry's seven-year upgrade cycle but
does not begin until after EPA finalizes the volumes on November 30, 2015, Stillwater presents a
terminal-blending scenario in which the market achieves 710 mil gal in incremental ethanol
distribution through E15 over the course of 2016.269 [EPA-HQ-OAR-2015-0111-2604-A2 p.46]
All told, Stillwater calculates that this expansion could be achieved with approximately $255
million in total costs.273 Stillwater also explains why this scenario is quite realistic with the ri|
price incentives, even though it envisions upgrades at approximately 32,000 stations over
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97A 97S
2016. Because the market regularly handles upgrades at 22,000 stations a year, the number
of stations that would be making these El 5 upgrades would be on the order of typical upgrade
patterns. In fact, the upgrades made by the retrofit kits are orders of magnitude less intensive
than tearing out and replacing the dispensers at a particular station. The work could proceed in
parallel by various contractors, and in the face of EPA enforcing a strong RFS mandate, some
stations would be eager to lead the crowd and thereby drive sales. [EPA-HQ-OAR-2015-0111-
2604-A2 p.46]
To be sure, achieving this scenario would be difficult if oil companies continue to obstruct El 5
at every turn. Refining terminals would have to start offering El5 at the refining terminal, as
using blender pumps to achieve the same volumes would be significantly more expensive. And
oil companies would have to stop contractually restricting branded stations from selling El 5.
[EPA-HQ-OAR-2015-0111-2604-A2 p.47]
Based on a conservative analysis of information from automaker manuals and EPA's own
models, it is projected that 32.9 million vehicles on the road in 2016 will carry E15 warranties.290
[EPA-HQ-OAR-2015-0111-2604-A2 p.49]
In addition, owners of vehicles that are out of warranty should not be concerned that using El 5
could nonetheless void the warranty. It is projected that at least 101.6 million non-FFV
MY2001+ vehicles on the road in 2016 will be out of warranty.291 [EPA-HQ-OAR-2015-0111-
2604-A2 p.49]
241
See EPA 2015 El5 Memorandum.
250 Mat 27.
251 Mat 6, 13.
252 Letter from Patrick Jeitler, Dispenser Project Manager—North America, Wayne, dated Jan.
14, 2014 (attached as Exhibit 5); Gilbarco Veeder-Root, Gilbarco Expands Standard Fuel
Dispenser Warranty From E10 to El5 (Mar. 31, 2010), at
http://www.gilbarco.com/us/content/gilbarco-expands-standard-fuel-dispenser-warranty-elO-
el5.
253 Stillwater Study at 27 (attached as Exhibit 4); Gilbarco Veeder-Root, Frequently Asked
Questions, at http://www.ethanolretailer.com/images/uploads/GilbarcoRetrofitKitEl5(2).pdf
(explaining UL-listing issue).
254 Stillwater Study at 27-28 (attached as Exhibit 4).
255 Id.
256 Id.
269 See id. at 25-26.
273 Id at 29.
274 Mat 25.
275 T,
Id.
290 Air, Analysis of Fleet 2001+ Model, at 6 (attached as Exhibit 3).
291 Id at 7.
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Harrods Creek Boat Owners Association
But the EPAs proposal also erodes consumer choice in what fuel they put in their boats. While
boaters seek out pure gasoline, the agency's proposal assumes consumption of that type of fuel
will drop even as recent data shows demand soaring. [EPA-HQ-OAR-2015-0111-1841]
In place of ethanol-free gasoline, the EPA wrongly assumes that more and more boater will use
E85. THAT WILL NOT HAPPEN. [EPA-HQ-OAR-2015-0111-1841]
The market, not a mandate, should drive which fuels are available to boaters at the local gas
dock. The EPA should lower the volumes for its final ruling to reflect reality of what boat
owners really want and what engines really need instead of what the corn lobby demands. [EPA-
HQ-OAR-2015-0111-1841]
Highwater Ethanol, LLC
We have identified a few items below which requires immediate attention on the proposed rule
from the U.S EPA in regards to the renewable fuels standards.
2. We have seen analysis concluding that the ambitious statutory targets in the Clean Air Act
exceed real world conditions." The EPA should use, and work with, the results of current
engineering and scientific studies and the EPA Underground Storage Tank Division to
coordinate information and act upon the most recent data and information which supports that
El5 can be rapidly deployed into the marketplace as the "new" unleaded regular fuel. [EPA-
HQ-OAR-2015-0111-2506-A2 p.2]
5. We are aware that other actions can also play a role in improving incentives provided by the
RFS program to overcome challenges that limit the potential for increased volumes renewable
fuels. The EPA could address the Reid vapor pressure (RVP) factor so as to enable the legal sale
of El 5 throughout the entire year rather than for merely a nine-month period from September 16
through June 15. The EPA already has the administrative authority to immediately resolve
the RVP barrier to E15. [EPA-HQ-OAR-2015-0111-2506-A2 p.2]
ICM
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 312-313.]
If you want blending infrastructure rapidly expanded at the retail level, lowering the RVO will
have the opposite effect. Instead, extend the 1-pound waiver to higher blends of ethanol, such as
E15. The vapor pressure restriction is the biggest roadblock to letting retailers such as Sheetz and
Minnoco offering consumers the choice at the pump.
Illinois Farm Bureau
In its proposed rule, EPA points to the 'ethanol blend wall' as a reason for reducing the RFS
targets for proposed volume requirements. However, EPA has issued provisions allowing for the
blending of up to 15 percent ethanol in gasoline for vehicles produced after model year 2001.
Vehicles approved for El 5 constitute approximately 75 percent of the miles driven in the U.S.
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today. However, to date, there has been very little adoption of El 5 because gasoline stations are
unwilling to put in pumps for this restricted market. [EPA-HQ-OAR-2015-0111-3290-A2 p.3]
Indiana Farm Bureau
In the Proposed Rule EPA pointed to the "ethanol blend wall" as a reason for reducing the RFS
targets for proposed volume requirements. However, EPA has issued provisions allowing for the
blending of up to 15 percent ethanol in gasoline for vehicles produced after model year 2001.
Vehicles approved for El 5 constitute approximately 75 percent of the miles driven in the U.S.
today. However, to date, there has been very little adoption of this product because gasoline
stations are unwilling to put in pumps for this restricted market. [EPA-HQ-OAR-2015-0111-
2486-A1 p.3-4]
Iowa Corn Growers Association (ICGA)
One easy step to overcome the "blend wall" includes allowing the sale of El 5 year round. The
Reid Vapor Pressure (RVP) waiver that has been granted to E10 should also be available to El 5
in the same locations. Many local stations, and now larger branded stations like Kum & Go are
offering El5. However, they must relabel and change out the hoses on these pumps during the
summer months. Allowing the sale of El 5 year round would increase its consumer reach and
help avoid consumer confusion. It would also clearly make it an easier decision for retailers to
install the pumps. Both the state of Iowa and the Iowa Corn Promotion Board are investing in
infrastructure to bring El5 and higher blends to market in Iowa. We need the RVOs to be set at
levels that drive oil companies and retailers all over the U.S. to invest in the needed
infrastructure to be able to sell higher blends. The non-branded retailers who have started selling
El5 see great demand for the fuel. Many would like to expand their ability to offer it, but feel
hampered by the RVP issue. [EPA-HQ-OAR-2015-0111-1820-A1 p. 3]
Elimination of the incentive to invest in infrastructure. EPA's proposal would let oil
companies off the hook from the requirement to blend amounts of ethanol above the "blend
wall" in 2014-2016. As a result, RIN prices would continue to fall and the financial incentive to
expand E15, MLB and E85 infrastructure would be virtually eliminated. The intent of the law
was to do just the opposite and require additional infrastructure investments be made. In
addition, Iowa Corn is making personal significant commitments to programs that build out
pump infrastructure in Iowa. [EPA-HQ-OAR-2015-0111-1820-A1 p. 6]
Iowa Renewable Fuels Association
There is No Blend Wall; Only Lack of Consumer Access [EPA-HQ-OAR-2015-0111-1957-A2
p. 10]
The large petroleum companies and their trade associations continue to focus their efforts on
creating the myth of a blend wall. They seek to create the image of a physical barrier that simply
cannot be surmounted in a timely fashion. This is false. The only physical barrier to the greater
use of renewable fuels is the inability of the average motorist to pull up to a fuel pump and
choose from various fuel options. [EPA-HQ-OAR-2015-0111-1957-A2 p. 10]
This restriction on competition is not the result of consumer preference, equipment availability,
or renewable fuel supply. Iowa retailers have had great success with higher ethanol blends like
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El5 and E85, when they are allowed to sell it. Customer demand is high. Contrary to the
blatantly false claims that a blend wall exists, even more motorists would buy El 5 and E85 if it
were just available for them to choose. [EPA-HQ-OAR-2015-0111-1957-A2 p. 10]
In a recent poll by the Tarrance Group, when asked if they would consider using El 5 if they
owned a 2001 and newer vehicle and it was cheaper than E10, an overwhelming 70 percent of
respondents said yes. Seventy-six percent of these respondents said they would drive out of their
way to buy El 5 to save between 5 and 10 cents a gallon if their usual station did not offer El 5.
(Attachment D) [EPA-HQ-OAR-2015-0111-1957-A2 p. 10] [EPA-HQ-OAR-2015-0111-1044
pp.71-72] [Attachment D can be found on p. 43-46 of docket number EPA-HQ-OAR-2015-
0111-1957-A2]
This price-conscious attitude was further confirmed by the National Association of Convenience
Stores' Consumer Fuel Survey conducted in January. 7 Approximately two in three consumers
consistently shop on price, whether gas was as low as $1.62 per gallon in 2009 or as high as
$3.28 per gallon in 2013. Even after the sharp gas price declines in late 2014, consumers were
still price shopping for gasoline. This proves that motorists are more loyal to their wallets than
they are to any store brand. Perhaps this is why branded oil companies are doing everything they
can to create the so-called blend wall. Oil companies know that registered El5, as the lowest-
cost registered fuel on the market today, would quickly become the most popular fuel among the
majority of motorists. [EPA-HQ-OAR-2015-0111-1957-A2 p. 10-11]
Further, it has been suggested that offering higher blends like El5 and E85 is a costly endeavor
for retailers. Yet a review of retailers around Iowa (and likely the U.S. as well) shows that it is
often the small "ma and pa" stations that are providing the option of higher blends to their
customers. On average, these stations should be the least likely to make a risky and expensive
investment. If Sparky's One Stop in Bayard, Iowa (population 458) can offer its customers E85,
why can't large retailers in large cities? It might have much less to do with "cost" than it does
with what brand a retailer flies. [EPA-HQ-OAR-2015-0111-1957-A2 p. 11]
But consumer choice is coming to customers outside of small retailers in small towns as well.
TO
Programs such as "Prime the Pump" and USDA's Biofuels Infrastructure Partnership
program39 are focused on high volume stations that will move renewable fuels sales significantly
higher. Here in Iowa, one of the largest retailer chains, Kum & Go, recently made a commitment
to add El 5 to many of its stores over the next year40 - and we're seeing El 5 being adopted by
other large retailers in other states as well. [EPA-HQ-OAR-2015-0111-1957-A2 p. 11]
Noting that customers can save 5 to 10 cents per gallon with E15 (compared to E10), Kum &
Go's vice president of fuels Jim Pirolli noted: "That could really be a good driver, to be able to
save $1 or $2 per fill-up. The more stores that are offering it, the better off everyone is.
Consumers definitely are."41 [EPA-HQ-OAR-2015-0111-1957-A2 p. 11]
While this polling and these exciting project announcements should help EPA understand the
growth potential for higher blends if made available to the public, what can we actually expect in
terms of sales? To answer that, IRFA contacted a number of retailers offering higher blends.
Based on their responses, it is clear: there is no blend wall. If consumers are simply given a
choice - retailers, obligated parties, and our Nation as a whole will have no problem reaching the
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statutory RFS levels in 2016. But more than that, they'd be meeting the ultimate RFS standard
for 2022. [EPA-HQ-OAR-2015-0111-1957-A2p. 11]
The U.S. EIA currently projects 188 billion gallons of gasoline and diesel to be used in 2022. If
the RFS goal of 36 billion gallons of renewables was realized (and factoring in biodiesel's RIN
equivalent), the 2022 RFS level would be around 18 to 19 percent. [EPA-HQ-OAR-2015-0111-
1957-A2p. 11]
Fuel Time in St. Ansgar, Iowa takes advantage of low-priced E85 in its blender pump to offer
E10, E15, E30, and E85. They also offer EO (no ethanol) to their customers. Even with 10% of
their sales going toward EO, their average ethanol content is 34.6 percent. [EPA-HQ-OAR-2015-
0111-1957-A2p. 12]
Fast Stop in Cresco, Iowa offers five levels of ethanol blends through its blender pumps with an
average ethanol content of 43.5 percent. Five Star Coop reported that its three blender pump
locations averaged an ethanol content of 23.7 percent. These three cases studies are
representative of Iowa blender pump stations. All not only exceed the 2016 statutory RFS level,
but the 2022 RFS level as well. (Details provided in Attachment E) [EPA-HQ-OAR-2015-0111-
1957-A2 p. 12] [Attachment E can be found on p. 47-48 of docket number EPA-HQ-OAR-2015-
0111-1957-A2]
You would be hard pressed to find a retailer with a blender pump offering El5 and E85 not
meeting that level today. If they also offer biodiesel blends, their own "station RFS" would be
even higher. There is no blend wall. There is only a lack of consumer access to higher ethanol
blends - a challenge the RFS was specifically implemented to remediate. [EPA-HQ-OAR-2015-
0111-1957-A2p. 12]
Remove E15 Vapor Pressure Barrier [EPA-HQ-OAR-2015-0111-1957-A2 p. 12]
Since the approval of El 5 as a registered fuel, the IRFA has focused on making this new fuel
widely available so lowans have access to another fuel choice and the lowest-cost fuel on the
market. In addition to being approved by the Agency for all light-duty passenger vehicles 2001
and newer (which accounts for over 80 percent of the U.S. passenger vehicle fleet), there are
more vehicles on the road today expressly warranted by the manufacturer for the use of El 5 than
there are flexible fuel vehicles, diesel vehicles, or vehicles requiring premium fuel. El5 clearly
has the potential to become a large market for renewable fuels very quickly. [EPA-HQ-OAR-
2015-0111-1957-A2 p. 12] [EPA-HQ-OAR-2015-0111-1044 p.70]
Despite large petroleum companies using restrictive branded supply contracts that either outright
prohibit the sale of El 5 or make it too cumbersome or costly to offer a non-petroleum-controlled
product, the largest obstacle to our efforts to make El 5 widely available has been the inability
for a retailer to offer El 5 year-round. The summer blending restrictions have been the breaking
point for several potential E15 retailers. [EPA-HQ-OAR-2015-0111-1957-A2 p. 12] [EPA-HQ-
OAR-2015-0111-1044 p.70]
The ability to offer El 5 year-round as a registered fuel (as opposed to offering it to only flexible
fuel vehicles during summer months) is a serious issue. Retailers who have switched from
offering El5 as a "flex-fuel only" to a registered fuel have seen their El5 sales increase by 93
percent. Many Iowa retailers are seeing El 5 capture 27 to 47 percent of their total fuel sales
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during the "winter" season. [EPA-HQ-OAR-2015-0111-1957-A2 p. 12] [EPA-HQ-OAR-2015-
0111-1044 pp.70-71]
Without access to low vapor pressure blendstock during the summer, the sale of El 5 in states
like Iowa (conventional gasoline only) is essentially prohibited as a registered fuel. During this
time, El5 sales plummet. As an example, a retailer in northern Iowa has vigorous El5 sales
during the fall and winter; however, during the summer blend season his El5 sales decline by 72
percent. [EPA-HQ-OAR-2015-0111-1957-A2 p. 12] [EPA-HQ-OAR-2015-0111-1044 p.71]
Retailers are unnecessarily losing revenue and also incurring the additional expense of relabeling
their registered El 5 to sell it as a flex-fuel during the summer months. This is followed by a
barrage of inquiries from customers who want to know why they can no longer purchase El 5 for
their 2001 and newer vehicle. Consumers want more choices and a consistent type of fuel to use
in their vehicles all year. Fuel retailers want to meet their customers' needs, but are hampered by
EPA's flawed policy that failed to equalize RVP limits for E10 and E15. [EPA-HQ-OAR-2015-
0111-1957-A2p. 12-13] [EPA-HQ-OAR-2015-0111-1044 p.71]
With motorists wanting more affordable, American-produced fuel choices, blending more
ethanol in gasoline can be done, despite oil companies' statements to the contrary. Equalizing
E15 and E10 RVP limits in the summer would enable E15 to become the "new normal" in the
U.S. fuel market, boosting ethanol demand by 50 percent. The fuel distribution terminals owned
by oil companies would have no choice then, but to meet demand and make El5 an available
choice at the rack. [EPA-HQ-OAR-2015-0111-1957-A2 p. 13] [EPA-HQ-OAR-2015-0111-1044
pp..71-72]
Retailers do not want to restrict the sale of El 5 during the summer or take the blame for denying
their customers an affordable fuel choice. But until the RVP limit for El0 and El5 are equalized,
retailers are becoming the scapegoat for flawed federal policy. IRFA urges the EPA to use its
existing statutory authority to equalize the vapor pressure regulations for E10 and E15 as soon as
possible. [EPA-HQ-OAR-2015-0111-1957-A2 p. 13]
37 "2015 Retail Fuels Report." National Association of Convenience Stores. Jan 2015, page 10
http://www.nacsonline.com/YourBusiness/FuelsReports/2015/Documents/2015-NACS-Fuels-
Report full.pdf
38 Schill, Susanne Retka. "Prime the Pump seeks to expand El5 infrastructure." Ethanol
Producer Magazine 10 Dec 2014 http://www.ethanolproducer.eom/articles/l 1734/prime-the-
pump-seeks-to-expand-e 15-infrastructure
39 "USDA Begins Accepting Applications from States for $100 Million Biofuels Infrastructure
Partnership." USDA Office of Communications 12 Jun 2015
http://www.usda. gov/wps/portal/usda/usdahome?contentid=2015/06/0170. xml&contentidonly=tr
ue
40 Oiler, Samantha. "With El5 and CNG, Kum & Go fills up on possibilities." Convenience
Store and Fuel News Jul 2015. page 73-75 http://digitaledition.qwinc.com/publication/?i=264019
41 Ibid
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Kansas Farm Bureau
As noted in the proposed rule, the E10 blendwall is a constraint to renewable fuel use growth.
We believe, however, that the current RFS2 program and the Renewable Identification Number
(RIN) market are working as intended and can move the US beyond the 10 percent blend wall by
producing an incentive for more biofuels to move into our nation's gasoline supply. The next
step is to clear the final roadblocks to greater fuel blends; while we applaud EPA for issuing
provisions allowing for the blending of up to 15 percent ethanol in gasoline for vehicles
produced after model year 2001, more must be done. Vehicles that can use El5 constitute
approximately 75 percent of the miles driven in the U.S. today but El 5 and higher ethanol blends
do not receive the same 1-pound RVP volatility waiver that is granted to E10, which limits
summertime sales in many states. This regulatory restriction creates a disincentive for retailers to
sell El5 or higher biofuel blends and denies consumers access to a fuel that meets their price and
performance needs. For example, ethanol is currently priced $0.40 per gallon less than a gallon
of Reformulated Blendstock for Oxygenate Blending (RBOB) gasoline, meaning that a gallon of
El 5 is 6 cents per gallon cheaper than a gallon of conventional gasoline with no ethanol. Clearly,
there is a financial incentive to blend. The petroleum industry's unwillingness to offer higher
blends should not be taken as evidence that the RFS2 is unworkable but rather as evidence that it
is unwilling to cede market share and that we have not removed all barriers to increased ethanol
use. We ask EPA to grant an RVP volatility waiver for El 5 and maintain the 15 billion gallon
target for conventional ethanol as written in the RFS2. [EPA-HQ-OAR-2015-0111-1195-A1 p. 1-
2]
Ledgewood Auto Body and Repair LLC
Need a completely separate fuel station pump for customers if you want high ethanol fuel. In
most Midwest states they have separate pumps for different grades of fuel content. It must be
done nationwide if you want higher ethanol content in fuel or you may damage anything over 5
years old (internal combustion engine). [EPA-HQ-OAR-2015-0111-1834]
Little Sioux Corn Processors
Across this country, independent retailers are making the necessary moves to market e-15. You
notice I say independent operators who are not obligated parties who do not have restrictive
contracts prohibiting e-15 under the canopy. Their customers want e-15 and higher blends
because of the inherent cost savings and better engine performance that e-15 provides. [EPA-HQ-
OAR-2015-0111-1664-A1]
Marathon Petroleum Company
We support the EPA assessment that the E10 blendwall is real and that the obstacles to the sale
of large volumes of E15 and E85 are significant enough for those products to be considered non-
viable solutions. [EPA-HQ-OAR-2015-0111-1932-A1 p. 1]
The demand for EO in the United States is not negligible as the EPA stated in the NPRM. In
2013, MFC provided the EPA and the OMB a methodology to calculate the EO demand using
EIA data. An updated graph of EO demand based on that methodology is included in the
AFPM/API comments and demonstrates that the demand for EO has stabilized at the 3.5 to 5.0%
level since 2012. MFC provides EO to the recreational engine market and our sales are consistent
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with the values calculated using the EIA data. MFC supports capping the ethanol content in
gasoline at 9.7% by volume to accommodate EO demand. [EPA-HQ-OAR-2015-0111-1932-A1
p. 3]
We agree with the EPA's assessment that sales of E15 are negligible and can be ignored for this
NPRM. In reality, demand for El 5 will remain low until three issues related to compatibility are
resolved. The solutions to these issues may take close to two decades to be implemented. First,
there is the issue of engine compatibility. Although the EPA deemed all 2001 and newer vehicles
compatible with El5, the automobile manufactures disagree. They have consistently stated that
vehicle owner's manuals are the source for allowable fuel specifications. AAA has calculated
that approximately 10% of the US vehicle fleet, including flex fuel vehicles, is compatible with
E15. The DOE, NHTSA and EPA data indicate that it takes 15 to 17 years to turnover the vehicle
fleet. This means that the country is years away from having enough of the vehicle fleet turned
over to consume significant quantities of El 5. Second, most of the retail stations in the country
are incompatible with ethanol blends greater than 10%. Prior to 2010, Underwriters Laboratories
had not listed a single dispenser as compatible with any alcohol concentration greater than 10%.
The same issue exists with underground storage tanks and piping. Most service stations undergo
rebuilds every 20 years so it will take a long time to upgrade the service stations. Compounding
the issue is the fact that obligated parties do not own about 95% of service stations. Obligated
parties have no mechanism to require service station owners to upgrade their equipment. Finally,
there are issues with liability associated with mis-fueling. As we stated earlier, the EPA's
waivers exclude large classes of vehicles and engines from using El 5. How do service station
owners and obligated parties protect themselves from people who mis-fuel their engines and
damage them or cause injury? These three issues need to be resolved before El5 will become a
significant part of demand. [EPA-HQ-OAR-2015-0111-1932-A1 p. 3]
Marine Retailers Association of the Americas (MRAA)
Multiple studies have proven that gasoline blended with levels of ethanol higher than 10% poses
major problems to marine engines including damage, increased emissions, and catastrophic
failure. As you know, boaters are prohibited from fueling their engines with El 5. Raising ethanol
volumes decreases the availability of fuels with 10% ethanol or lower, and with that lack of
availability comes confusion among boaters as to what is appropriate for their boats. Consumer
education and safeguards at the pump are woefully inadequate; with the use of a small label on a
gas pump the extent of a public campaign. The label is clearly insufficient and is often
overlooked by consumers. [EPA-HQ-OAR-2015-0111-1949-A1 p.l]
Mass Comment Campaign sponsored by American Ethanol-NASCAR (paper) - (65)
NASCAR has driven 7 million miles on El5 American Ethanol.
Now it's becoming available to fans in many markets offering:
- Higher octane
- Fuel choice
- Cleaner Air
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- Lower Price
Yet, the EPA has proposed REDUCING the amount of ethanol that will be blended next year!
Tell EPA that you and your favorite driver want more ethanol, not less!
[All text can be found in page 2 of EPA-HQ-OAR-2015-0111-2955-A1]
Mass Comment Campaign sponsored by American Motorcyclist Association (AMA) (web)
- (29,379)
In fact, the proposed rule calls for the changes needed to significantly expand renewable fuel use
include, among other items, an increase in El5 use in model year 2001 and later vehicles and an
increase in use of E85 use in flex-fuel vehicles. [EPA-HQ-OAR-2015-0111-2049-A1 p.2]
In the proposed rule, the EPA discounts EO and does not factor it in its scenarios. The EPA views
EO as a 'constraint on the volume of ethanol that can be consumed...and expect(s) such volumes
to be lower than they were in the past as the market strives to expand consumption of ethanol
under the influence of the RFS program.' This statement contradicts the data from the federal
Energy Information Administration shows that demand for EO rose from 3.4 percent in 2012 to
nearly 7 percent in 2014. Consumers want EO for their motorcycles, ATVs, boats, lawn mowers
and other equipment because it does not pose the risk of engine and fuel system damage. Yet, the
renewable fuels requirements have marginalized the product in favor of E10 or higher blends.
[EPA-HQ-OAR-2015-0111-2049-A1 p.2]
Mass Comment Campaign sponsored by anonymous 13 (web) - (121)
While the EPA points out that there isn't adequate infrastructure at the moment to accommodate
increasing volumes of ethanol, the EPA ignores two fundamental points. [EPA-HQ-OAR-2015-
0111-0106 p.l]
Second, the EPA ignores the current infrastructure evidence compiled by the National
Renewable Energy Laboratory (NREL) which found that most existing fuel dispensing
infrastructure components in the country are compatible with E15. [EPA-HQ-OAR-2015-0111-
0106 p.l]
At minimum, making El5 available throughout the country would help to meet the RVO since
E15 can be used by nearly nine out of 10 vehicles on the road. [EPA-HQ-OAR-2015-0111-0106
p.l]
Mass Comment Campaign sponsored by anonymous 18 (email) - (7560)
Biofuels, notably ethanol, in concentrations as high as those present in El 5 or greater are
harmful to most cars on the road, as well as to engines in boats, motorcycles, lawnmowers, and
other equipment. Furthermore, gasoline with ethanol is less fuel efficient and requires more fill-
ups per miles traveled. Consumers could pay at the pump and possibly even the garage if the
biofuels mandate is increased. [EPA-HQ-OAR-2015-0111-0220-A1 p.l]
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Mass Comment Campaign sponsored by anonymous 2 (web) - (2781)
This damage puts the public at risk-by raising the volume levels, the country will break the
'blendwall' by 600 million gallons next year. It is ever more likely that El 5 will be forced on the
public. Considering that 97 percent of boaters purchase gasoline at regular fueling stations, the
likelihood of accidental misfueling is a very real threat. [EPA-HQ-OAR-2015-0111-0079 p.l]
As you know, this is illegal, as marine engines are prohibited from using El5 and higher blends.
Yet to date, the government has failed to implement any legitimate plan or precautionary
measures to prevent such misfueling or guarantee the availability of E10 and lower fuels. In
absence of a proven misfueling plan and the guarantee for safe fuels, the EPA simply cannot
increase the ethanol volumes without jeopardizing millions of marine engines. [EPA-HQ-OAR-
2015-0111-0079 p.l]
Thus, I urge the agency to ensure that the blendwall isn't breached and that the boating industry
isn't threatened by dangerous fuels. [EPA-HQ-OAR-2015-0111-0079 p.2]
Mass Comment Campaign sponsored by Minnesota Corn Growers Association - (784)
Right here in Minnesota, I've seen firsthand the important role that blending ethanol in our fuel
supply played in bringing our Twin Cities metro area into compliance with EPA air quality
standards. That was back in the mid-1990s. More recently, I've seen E15 rise in popularity and
provide Minnesotans with another option at the pump. [EPA-HQ-OAR-2015-0111-2570-A2 p. 1]
Minnesota's success in the early days of ethanol and recently with El 5 is further proof that the
mythical 'blend wall' can easily be toppled. Unfortunately, the oil industry works to block
infrastructure like blender pumps, then claims it's unable to meet the blending standards called
for by Congress in the RFS. [EPA-HQ-OAR-2015-0111-2961-A1 p.l]
EPA needs to see through the false 'blend wall' argument and hold the oil industry accountable
for meeting the goals set forth in the RFS. Corn farmers have stepped up to the plate and
efficiently increased production to meet RFS goals. It's time the oil industry does the same.
[EPA-HQ-OAR-2015-0111-2961-A1 p.l]
Mass Comment Campaign submitted by members of the marine industry (email) - (408)
EPA-HQ-OAR-2015-0111 would greatly increase the availability of fuels with an ethanol
concentration higher than E10 because the proposal would cause the country to break the
'blendwall' by 600 million gallons next year, thus necessitating an increase in the availability of
E15. This would have an extremely negative impact on our products, and the overall customer
satisfaction of marine industry consumers. When a consumer's products are destroyed by fuels
higher than E10, my industry risks losing his or her future business permanently. [EPA-HQ-
OAR-2015-0111-1477-A1 p.l]
As you know, it is illegal for marine engines to be fueled with El5 and higher blends.
Considering that 97 percent of boaters purchase gasoline at regular fueling stations, the
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likelihood of accidental misfueling is a very real threat. Yet to date, the government has failed to
implement any legitimate plan or precautionary measures to prevent such misfueling, or to
guarantee the availability of E10 and lower fuels. [EPA-HQ-OAR-2015-0111-1477-A1 p. 1]
In absence of a proven misfueling plan and the guarantee for safe fuels, the EPA would be
jeopardizing millions of marine engines if the current proposal came to fruition. Therefore, I urge
the agency to ensure that the blendwall isn't breached and that the boating industry isn't
threatened by dangerous fuels. [EPA-HQ-OAR-2015-0111-1477-A1 p.l]
Mass Comment Campaign submitted by recreational boat owners (email) - (17697)
The proposed Renewable Volume Obligations (RVO) for 2015 and 2016 will force a greater
amount of EIS and higher ethanol blends to be pushed on to the American public. It is prohibited
to use EIS in my marine engine and it has been shown to cause damage. EPA should set the
RVO levels so that I can be assured an adequate supply of fuel that is safe for my family's
boating. [EPA-HQ-OAR-2015-0111-1475-A1 p.l]
Mass Comment Campaign submitted by recreational boat owners (email) - (17697)
As a recreational boat owner I am deeply concerned with the proposal (EPA-HQ-OAR-2015-
011 1), which will increase the mandated ethanol volumes in the nation's fuel supply to record
levels. If adopted, these obligations will make it more difficult for me to find fuel that is safe to
use in my boat's engine. [EPA-HQ-OAR-2015-0111-1475-A1 p.l]
EPA must act to assure there is fuel available that will not put my engine at risk of being
damaged and that I will not unintentionally put the wrong fuel in my boat. [EPA-HQ-OAR-
2015-0111-1475-Alp.l]
Mass Comment Campaign sponsored by American Motorcyclist Association (AMA) (web)
- (29,379)
We urge the U.S. Environmental Protection Agency to not increase, and, instead, to lower the
proposed volumes when the final rule is issued this year. The proposed volumes would increase
the risk of inadvertent misfueling for motorcyclists and all-terrain-vehicle —owners by forcing
the widespread availability of higher-ethanol fuel blends, such as El 5. [EPA-HQ-OAR-2015-
0111-2049-A1 p.l]
Minnesota Bio-Fuels Association (MBA)
The EPA should use, and work in concert with, the results of current engineering and scientific
studies as well as the EPA Underground Storage Tank Division to coordinate information and act
upon the most recent data and information which supports the proposition that El5 can be
rapidly deployed into the marketplace as the 'new unleaded regular fuel'. [EPA-HQ-OAR-2015-
0111-1936-A1 p.4]
A vast number of light duty motor vehicles are expected to be fueled with El 5 through the
existing infrastructure while additional investments are made to expand the availability of higher
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blends of biofuels for FFVs and future engines which are expected to require, for instance, at
least E30. Thus far, for 2015, Minnesota biofuel producers have worked with the Minnesota
Department of Agriculture to put together a potential $3 million grant package which will
include funding to help some fuel retailers tackle simple, low-cost modifications to their fuel
dispensers so they can offer E15 as the new regular unleaded fuel.[EPA-HQ-OAR-2015-0111-
1936-Alp.ll]
Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
Correct the NPRM's significant underestimate of the demand for EO. EPA's failure to account for
what its own data sources reveal about EO consumption caused it to significantly understate the
gap between the amount of renewable fuel that EPA proposed to mandate in transportation fuels
and the amount it assumed the economy was actually on pace to supply in transportation fuels.
EPA must revise its mandates for 2015 and 2016 to appropriately account for EO demand. [EPA-
HQ-OAR-2015-0111-2603-A1, p.2]
NAFA Fleet Management Association
Fleet managers were pleased to see the proposal acknowledge the real—world constraints that
limit the amount of ethanol that can be safely blended into the fuel supply. EPA's recognition of
the 'blend wall' may help protect fleets, and other consumers, from using El5 gasoline in
vehicles not designed for its use. [EPA-HQ-OAR-2015-0111-3171-A1 p.2]
Fleet managers are especially concerned that the blendwall would result in the mandated use of
El5 - an ethanol blend that we fear will void vehicle warranties, damage engines, and cause
damage to underground storage tank systems. As a major consumer of vehicles and engines, we
are concerned with the potential impact El5 could have on both light—duty engines as well as
non— covered engines, including engine failure, corrosion, materials incompatibility, catalyst
degradation, water—in—fuel and phase separation, higher exhaust temperatures, increased
pollution emissions, and reduced life of the vehicle or engine. Our fleet managers take very
seriously the statements issued by vehicle and engine manufacturers warning of the potential
damage to engines, voided warranties and reduced fuel efficiency. [EPA-HQ-OAR-2015-0111-
3171-Alp.2]
We are also concerned about the increases in fuel system repairs (injectors, fuel pumps, etc.) that
could be directly related to ethanol in fuel. For instance, NAFA members that are users of small
engines have seen a significant increase in engine failures due to issues with ethanol in the fuel.
On many occasions, we have found that the fuel will separate with a small amount of moisture
which has led to the additional expense of purchasing fuel conditioners to counter this effect. Put
simply, we are now spending more on maintenance and repairs, while the life cycle expectancy
of our equipment is reduced - a negative effect on production and profitability that will only
worsen with El5. [EPA-HQ-OAR-2015-0111-3171-A1 p.2]
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National Association of Charterboat Operators
The fuel standard program being proposed by the EPA increases the amount of ethanol in all fuel
sold in traditional outlets throughout the U.S. from 10% to 15% but prohibits the use of E-15 in
marine engines. Some 17.5 million charter vessels and private boats in the U.S. consume 1.1
billion gallons of fuel annually. A vast majority of those vessels are trailered - with limited or no
access to marina and boat yard fuel pumps. Without adequate land-based access to non-ethanol
fuel, a great number of charter skippers with boats on trailers will not be able to provide services
to their customers - and millions of sportsmen and recreational boaters who trailer will be
greatly inconvenienced. [EPA-HQ-OAR-2015-0111-1812-A1 p.l]
Mandating an ethanol content of 15 percent in the bulk of the nation's blended fuels also flies in
the face of the EPAs stated effort to reduce the overall consumption of fossil fuels. In 2013,
some 3.8 billion gallons of E-10 blend were consumed in marine and other off-road engines.
With E-15 physically destructive to, as well as legally banned for use in those engines, the
consequence will be a dramatic increase in fossil based fuel consumption. [EPA-HQ-OAR-2015-
0111-1812-A1 p.2]
NACO urges the EPA to stop its effort to introduce El5 fuel blends. The adverse effects and
costs far out way any benefits the EPA hopes to achieve through this proposed rule. If you have
any questions, please contact me. [EPA-HQ-OAR-2015-0111-1812-A1 p.2]
National Marine Manufacturers Association (NMMA)
EPA's RVOs proposal fails to guarantee the availability of approved fuels, such as E10. While
E10 currently remains the predominant supplied fuel, there is no requirement for it to remain
so—as obligated parties blend more E15, as will be required as a result of this proposal eclipsing
the E10 blend wall, it is possible for retail service stations to eschew E10 options in favor of E15.
In fact, per Configuration 1 of the existing Misfueling Mitigation Plan required by station owners
dispensing E15, a station with dedicated E15 hoses is under no obligation to have a separate E10
hose on the premises2. If the RVOs proposal is enacted, such a scenario is more likely, causing
significant problems for boats and other non-approved engines. [EPA-HQ-OAR-2015-0111-
1928-A1 p.2]
EPA's analysis infers that the approximate 124 million gallons of EO purchased at marinas is the
only EO purchased by boat owners. NMMA strongly disputes this assertion. EO is being
consumed at marinas and at roadside retail service stations across the country, with the latter
making up the vast majority of fuel purchases. For a myriad of reasons, boaters typically avoid
fueling at marinas—it is common for a marina to charge a premium of between 75 cents and
$1.50 per gallon, marina fueling docks are rare and often have time-consuming traffic on
weekends—and since 95 percent of boats are under 26 feet in length, they are frequently hitched
to a trailer and fueled at the same time and service station as the towing vehicle. [EPA-HQ-
OAR-2015-0111-1928-A1 p.3]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, pp. 189-190.]
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Additionally, the proposal fails to guarantee that fuels E10 or lower are universally available at
all retail service stations where the vast majority of our consumers purchase fuel. Without the
guaranteed availability of approved fuels, a station with a dedicated El 5 hose is not required to
additionally sell E10 or lower blends. Such a scenario would leave our consumers without
appropriate alternatives. Finally, NMMA continues to have concerns over the EPA's misfueling
mitigation plan. A lone sticker on a gas pump is insufficient and ineffective. It does nothing to
actually inform the consumers, not to mention it is easily lost amongst the signage,
advertisements, and other labels common to a modern fuel pump. In absence of a stronger
misfueling mitigation plan, the risk to misfueling increases as more El5 comes on the market.
The onus to properly warn and educate consumers should rest with the EPA.
2 http://www.epa.gov/OMS/regs/fuels/additive/el5/el5-mmp.htm
National Taxpayers Union (NTU)
Not only are few consumers able to utilize E85 - the blend that the EPA anticipates will help
alleviate the glut of ethanol created by the rule - only 2 percent of gas stations can provide the
fuel. This paucity is directly related to the cost of upgrading those facilities, which can run as
high as $200,000. The small business owners who run most gas stations operate on very thin
margins and cannot afford such an investment, especially when the return is so uncertain. El 5
faces similar demand and infrastructure problems. [EPA-HQ-OAR-2015-0111-3279-A1 p. 1-2]
Together, these factors severely limit the potential market for higher blends of ethanol and make
it unlikely that there will be a dramatic increase in demand for ethanol in less than six months.
Exceeding the blend wall poses a threat of heavier burdens on consumers as refiners will be
forced to scale back production. After all, the ethanol blend is only suitable for fuel consumed in
the U.S., leaving refiners with much less flexibility in absorbing the financial effects. [EPA-HQ-
OAR-2015-0111-3279-A1 p.2]
Nestle
Those who oppose EPA's proposal, and support the original mandates as a kind of 'forcing
mechanism,' also ignore the almost complete lack of consumer interest in El 5, as well as the
problems that fuel would continue to pose to older vehicles and small engines, not to mention the
sizeable logistical, capital-investment and liability hurdles facing service station owners who
might want to install El 5 pumps. Meanwhile, though there is a small E85 market, there is no
sign that it is likely to grow sufficiently to offset the blendwall that results when the conventional
gasoline supply is saturated at a 10% blend. [EPA-HQ-OAR-2015-0111-1918-A1 p.2]
NH Energy Forum
The current proposal calls for increasing amounts of ethanol to be blended into gasoline for fuels
like E85 and El5 for which there is no significant consumer demand- nor the infrastructure in
areas such as mine, to allow consumers to fuel their cars. [EPA-HQ-OAR-2015-0111-0282-A1
p.l]
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North Dakota Corn Growers Association (NDCGA), et al.,
We have also spent research dollars into infrastructure to assist retail station owners. This
investment has primarily been in blender pumps and costs associated with blender pumps. This
helps E10, E15 and other ethanol blends become more available to the consumers. It has been
challenge to increase our share of home grown ethanol when the oil companies have been
preventing this from happening via contracts with gas station owners. Reducing the RVOs at this
time sends a bad signal to the many that have helped our nation become less dependent on
foreign oil. [EPA-HQ-OAR-2015-0111-2541-A2 p.l]
In 2009, our state legislature invested in the future of ethanol by passage of game-changing
legislation which included $1 million in grants for biofuel blender pumps and creation of a
biofuel blender pump incentive fund. This legislation was unique: its sponsors were the majority
AND minority leaders in the state House of Representatives and Senate. In a time of political
gridlock, all sides came together to move both the agriculture and energy industries forward by
partnering North Dakota's corn fields with our oil fields. [EPA-HQ-OAR-2015-0111-2541-A3
p.2] [EPA-HQ-OAR-2015-0111-1044 pp.182-183]
North Dakota now boasts over 200 blender pumps throughout the state and the use of biofuels
has risen by an impressive amount, despite "nay-sayers" trying to contend otherwise. One of the
arguments that you will hear is that there is a 10% "blend wall" that cannot be exceeded due to
market constraints. Petro Serve USA, a local fuel distributor in North Dakota has numbers -
which I am providing to you today - that show this just isn't the case. Two of our states' major
fuel markets are Fargo and Bismarck/Mandan. Fargo has three pipelines which converge, and
has traditionally had the lowest wholesale gasoline prices in the state. Bismarck/Mandan, which
is served by a single facility, has traditionally been 15 to 20 cents per gallon higher than Fargo.
[EPA-HQ-OAR-2015-0111-2541-A3 p.2] [EPA-HQ-OAR-2015-0111-1044 p.183]
In reviewing the Petro Serve USA numbers for Fargo stores that distribute E-15 and other Mid-
Level Ethanol Blends (MLEB) the overall ethanol volume sales for comparable months show a
9.18% market share in 2013 increasing to 12.54% in 2015. However, the Bismarck/Mandan
numbers really deserve your attention. As a higher priced fuel market, the numbers show a jump
from 10.09% in January 2013 to 17.26% in April 2015. Looking at their markets overall, the
numbers for E-15 and MLEB's are consistently over 12% of volume. This number alone
indicates that such a "blend wall" is really a false pretense. [EPA-HQ-OAR-2015-0111-2541-A3
p.2] [EPA-HQ-OAR-2015-0111-1044 pp.183-184]
Office of the Lt. Governor, Indianapolis, Indiana
Greater availability of biofuels will also support broader installation of blender pumps and the
manufacturing of more flex fuel vehicles, leading to increased fuel options for consumers, which
will put downward pressure on fuel prices and drive our economy forward. [EPA-HQ-OAR-
2015-0111-2482-A1 p.2]
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Ohio Corn & Wheat Growers Association
As the various checkoff programs invest millions more across the country to partner with fuel
retailers, pump manufactures, automakers and many more, it is clear the oil industry actively
works to block the use of more biofuels and higher blends. The oil industry will tell you the
retailers they work with are independent, yet they neglect to mention all the contracting
restrictions and legal roadblocks they use to prevent retailers from selling fuels like E-15. We
will not be able to push towards the higher blends needed to fulfill the RFS if the incentive for
the oil companies is simply to do nothing. We cannot allow them to continue to block
infrastructure and hold the American consumer hostage with their monopolistic practices. [EPA-
HQ-OAR-2015-0111-1723-A1 p.1-2]
Petroleum Marketers Association of America (PMAA)
PMAA strongly opposes adoption of ethanol mandates for 2014, 2015 and 2016 that would force
the introduction of E_15 gasoline blends. PMAA firmly maintains there are too many too many
infrastructure, liability and marketplace issues related to El5 that prevents significant expansion
of national ethanol blending volumes in the short run. Neither existing fueling infrastructure nor
consumer demand and acceptance are compatible with the introduction of E-15 at this time.
[EPA-HQ-OAR-2015-0111-1197-Alp.l]
In the near term, El 5 will be offered at very few gas stations because:
Many retailers may be unable to identify the type of adhesives, gaskets and connectors used
in their underground storage tank (UST) systems in order to make a reliable determination of
El5 compatibility.
Fire codes require UL listed equipment and very little existing infrastructure is listed for E15.
El S's impact on air quality such as nitrous oxides (NOx) is not yet known — air quality
regulations will likely exclude El 5 from urban markets.
Limited underground storage would force retailers to eliminate premium or El0 to make way
for El 5.
Branded supply agreements generally bar retailers from making independent decisions on the
type of fuel they sell.
Automobile manufacturers have expressed operability concerns over El5 being used in
model year vehicles approved for E-15 use under the EPA waiver.
Manufacturers of small engines, such as boats, powered garden equipment and motorcycles
believe El 5 can damage engines, fuel systems and fuel tanks.
Retailer liability for consumer misfueling remains a strong disincentive for retailers. [EPA-
HQ-OAR-2015-0111-1197-A1 p.2]
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The cost to petroleum retailers for UST system retrofit would be enormous. PMAA estimates
that the average cost to retrofit a retail gasoline station with El 5 compliant equipment to be
between $375,000 and $425,000 per site. [EPA-HQ-OAR-2015-0111-1197-A1 p.2]
Claims by the ethanol industry that these estimates are exaggerated or that E-15 compatibility is
achievable for as little as $1500 demonstrates a profound lack of understanding of the retail
motor fuel industry and the laws and regulations that apply to underground storage tanks on the
federal, state and local levels. [EPA-HQ-OAR-2015-Oil 1-1197-A1 p.3]
El5 misfueling is unavoidable. Experience confirms that consumers are often inattentive and
distracted when refueling and don't read product information and warnings posted on dispensers.
As a result, consumer warning labels will do little to reduce the incidence of El 5 misfueling.
[EPA-HQ-OAR-2015-0111-1197-Alp.3]
Given that independent petroleum marketers own and operate approximately 94 percent of all
retail gasoline stations nationwide, it is important that the E-15 compatibility issue is a key
determinant for establishing annual volumetric blending mandates for obligated parties in the
years ahead. [EPA-HQ-OAR-2015-Oil 1-1197-A1 p.4]
Poet, LLC
Dispensing El5 can be readily done by gas stations. Stillwater Associates finds that for "the most
part E10 compatible equipment is also E15 compatible."67 Both manufacturers of fuel dispensers
fully warranty their standard dispensers for E15 usage.68 Stations, if their dispensers are not
already compliant, would only need to purchase a retrofit kit, which costs roughly $2,000 per
dispenser including installation, in order to comply with Underwriter Laboratories listing
requirements.69 [EPA-HQ-OAR-2015-0111-2481-A1 p. 18]
Stillwater conservatively estimated that under current regulations El5 sales could generate an
incremental 1.43 billion gallons of ethanol consumption annually, through sales in strategically
targeted parts of the country.74 [EPA-HQ-OAR-2015-0111-2481-A1 p. 18]
Regarding vehicles on the road and El 5 use, about 85% of miles traveled and energy consumed
are by vehicles currently approved for E15 use.80 [EPA-HQ-OAR-2015-0111-2481-A1 p.19]
Implementing the El5 pathways described above in time to have an impact on 2016 consumption
levels would be ambitious but feasible. Stillwater Associates identifies approximately 1 billion
gallons in incremental ethanol distribution through E15 to be feasible in 2016.82 However, this
type of rapid market conversion will only take place if RIN values are at appropriate levels, and
the NOPR undermines RIN values. Given that El5 can supplement E85 distribution pathways,
pursuing both E85 and the expedited expansion of El 5 could enable 2.90 billion gallons of
additional ethanol to be delivered in 2016.83 [EPA-HQ-OAR-2015-0111-2481-A1 p.20]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1044, pp. 200-201.]
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When the RFS was passed in 2007, it was anticipated that there would be investment required to
break through the E10 blend wall. In theory, the EPA approval of E15 for the majority of
vehicles in the U.S. made meeting the statutory blending levels much easier, and yet today, the
number of retail stations offering El 5 remains negligible despite the fact that ethanol is less
expensive than petroleum blend stock and provides higher octane. The EPA has mistakenly
interpreted the lack of El 5 consumption as lack of consumer demand. In reality, consumers are
prevented from buying El5 because the major oil companies refuse to allow market access.
None of the major brands allow El 5 to be offered under their standard brand agreements and do
not offer El 5 blends at their blending terminals for their unbranded customers. The handful of
private brands that have made voluntary investments in the infrastructure required to offer El5
are proof that meeting the statutory RFS volumes is not only possible, it is profitable.
67
Stillwater Study, at 27.
Gilbarco Veeder-Root, Gilbarco Expands Standard Fuel Dispenser Warranty From E10 to
El5 (Mar. 31, 2010), at http://www.gilbarco.com/us/content/gilbarco-expands-standard-fuel-
dispenser-warranty-e 10-e 15. Wayne also has indicated that "Our warranty for standard
dispensers covers gasoline fuels with up to 15% ethanol content." (January 14, 2014 letter to
dispenser users).
69 Stillwater at 27; Gilbarco Veeder-Root, Frequently Asked Questions, at
http://www.ethanolretailer.com/images/uploads/GilbarcoRetrofitKitEl 5(2).pdf (explaining UL-
listing issue).
74
Mat 25.
80 See Growth Energy comments, Section V. C.3, citing Air Improvement Resources, Inc.,
Analysis of Fleet Percentage of 2001+ Model Year Group In Calendar Years 2014, 2015, and
2016 (July 27, 2015).
82 See Stillwater study at 26.
83 Mat 31.
Renew Kansas
The RFS gives American consumers a true choice at the pump - providing market access for
higher ethanol blends like E15. In fact, E15 can now be used by more than 80 percent of the
vehicles on the road today. Consumer access to higher blends of ethanol fuel is critically
dependent upon the blending obligations established by the RFS. Rather than retreating from the
gains that have been made toward our national transportation fuels goals, we urge the EPA to
adopt means to encourage the marketing and continued use of El 5, E20, and higher ethanol
blends, and to increase the number and availability of flex-fuel pumps. Let's move our nation
forward, not backward, by following the renewable fuel volume set forth in the Clean Air Act.
[EPA-HQ-OAR-2015-0111-1309-Alp.4]
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Renewable Fuels Association (RFA)
In recent months, major retail chains have announced plans to offer El5 (and, in most cases,
E85) at dozens of retail gas stations. [EPA-HQ-OAR-2015-0111-1917-A1 p. 29]
These announcements were followed by similar statements from major retailers Cenex, Petro
Serve USA, Kum & Go, Sheetz, and Protec Fuels. Taken together, these retailers will be offering
E15 (and, in most cases, E85 as well) from some 300 new stations by late 2016 or early 2017.
These investments were undoubtedly facilitated by the expectation that EPA would enforce RFS
levels that necessitate moving beyond the so-called "blend wall." [EPA-HQ-OAR-2015-0111-
1917-A1 p. 29]
Given these recent developments in the El 5 marketplace, it is surprising that EPA entirely
neglected the potential use of El 5 in 2015 and especially 2016 as a pathway to compliance with
statutory blending requirements. We encourage EPA to reconsider its decision to exclude any
potential contribution from El 5 in its estimate of potential ethanol consumption in 2015 and
2016. [EPA-HQ-OAR-2015-0111-1917-A1 p. 29]
In addition, based on data from Edmunds, EPA's MOVES model and other sources, we estimate
approximately 83 percent of current light-duty automobiles in service were built in 2001 or later,
meaning four out of every five cars and light trucks on the road are approved by EPA to use El 5.
Further, the use of El 5 is explicitly approved by the manufactures of 60 percent of model year
(MY) 2014 and 2015 light-duty vehicles sold in the United States.52
52 The 60% figure was derived by examining automaker warranty statements for MY2014 and
MY2015 vehicles and automotive sales market share data provided by Motor Intelligence. A full
list of recommended gasoline language from MY2012-15 warranty statements is available at
www.ethanolrfa.org. For MY 2015 vehicles, see
http://www.ethanolrfa.org/news/entry/automakersapprove-el5-for-use-in-two-thirds-of-new-
vehicles/
Senate of Pennsylvania
The proposed standards ask for an increasing amount of ethanol to be blended into gasoline.
These standards will drive fuels such as E85 and E 15, where there is very little consumer
demand, but yet greatly reduce ethanol-free fuels (e.g., EO), for which consumers have shown a
substantial demand. [EPA-HQ-OAR-2015-0111-3447-A1 p. 1]
Society of Independent Gasoline Marketers of America (SIGMA) and the National
Association of Convenience Stores (NACS)
An examination of the shortcomings of a recent National Renewable Energy Laboratory
("NREL") study regarding infrastructure compatibility with E155 illustrates the various liability
concerns that retailers face in considering whether to store and sell gasoline-ethanol blends
greater than E10. This study, which was commissioned by the Renewable Fuels Association,
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addressed the compatibility of El 5 with equipment at refueling stations. The study generally
concluded that El5 is compatible with most existing equipment, and suggested that retailers can
therefore store and dispense El5 in such equipment. This is misleading. In fact, the study's
conclusion that El 5 is compatible with most existing equipment in no way changes or minimizes
retailers' liability concerns. These concerns are grounded in the requirement that retailers store
and dispense El 5 and higher blends in equipment that is approved by UL as compatible with
such fuels. [EPA-HQ-OAR-2015-0111-1937-A1 p.6]
Thus, as a practical matter, the NREL study's core shortcoming is the fact that it examines one
issue - the compatibility of E15 with equipment at refueling stations - in order to reach
conclusions about another issue - whether retailers can lawfully store and dispense El5 without
risk of liability. Indeed, even if- hypothetically - all retail infrastructure could store and
dispense El5 without the risk that El5 could damage such infrastructure, retailers that market
El 5 would be exposed to legal liability on a number of fronts:
UL Listing - The NREL study states that UL listing is not necessary in order to store and sell
E15. It has no legal basis for reaching this conclusion. rEPA-HQ-OAR-2015-0111-1937-A1 p.6]
As a practical matter, without the ability to verify that their equipment is UL listed to store El5
or other ethanol blends, the retailer is assuming liability risk if he or she stores such fuels. [EPA-
HQ-OAR-2015-0111-1937-A1 p.7]
5 K. Moriarity and J. Janowitz, "El5 and Infrastructure." National Renewable Energy
Laboratory, May 2015, available at http://www.nrel.gov/docs/fyl5osti/64156.pdf
Specialty Equipment Market Association (SEMA)
SEMA opposes El5, contending that the fuel poses a risk to nearly 70 million older vehicles in
addition to certain specialty high performance equipment installed on newer vehicles. [EPA-HQ-
OAR-2015-0111-2490-A1, p.l]
By reducing the required volumes of renewable fuels in American transportation fuel to better
reflect marketplace realities, the EPA has an opportunity to reconsider the current artificial
mandates for El 5 gasoline. Ethanol can cause metal corrosion and dissolve certain plastics and
rubbers, especially in older vehicles that were not constructed with ethanol-compatible materials.
The EPA recognized this fact when it limited E15 sales to MY 2001 and newer vehicles.
However, the EPA only required a gas pump warning label making it "illegal" for the consumer
to fuel older vehicles with El5. [EPA-HQ-OAR-2015-0111-2490-A1, p.l]
The EPA estimates that there are nearly 70 million pre-2001 vehicles subject to potential
misfueling. This does not include the millions of boats, lawnmowers, handheld equipment, etc.
that weren't designed for ethanol. If misfueled, the life span of this equipment can be
dramatically reduced and owners could face equipment breakdowns. [EPA-HQ-OAR-2015-
0111-2490-Al,p.2]
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STAR Energy
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1043, p. 241-243.]
Customers want to choose - want the choice of E10 and E15. We, as a retail fuel supplier, want
to give them this choice. To meet the required vapor pressure, also referred to as RVP, during the
summer, we continue to evaluate different options to offer our customers as clean- burning fuel
that they desire. Over the past 3 years, we have evaluated the option of bringing in low RVP
gasoline from out of State. Due to the transportation cost associated with that, along with much
higher cost of the base product, it does not create a viable option. Yes, I could bring this product
into our stations and offer El5 as a registered fuel. However, at what cost? We have seen an
increase of anywhere from 15 to 28 cents a gallon in the base fuel. I don't believe the answer is to
offer higher-priced El5 to local communities during the summer months. I believe that it's time
to grant the 1-pound waiver to equalize the vapor pressure regulations for E10 and E15 during
the summer months running from June 1 to September 15th. It is time to allow my customers the
right to choose the lowest-cost ethanol-blended gasoline during the summer months. I am
confident that if we could offer this blend year around without the current restrictions, many of
my customers would choose El 5. It's time for the EPA to grant a waiver for El 5.
The Boat Owners Association of The United States (BOATU.S.)
On a regular basis our members tell us they have a preference for gasoline without ethanol
altogether. In active recreational boating areas one will find numerous gas stations and marinas
offering ethanol-free gasoline or EO. And this fuel is often at a premium prices as compared to
fuel containing ethanol. Clearly, there is a boating consumer preference for EO when it is
available. We are concerned that the proposed RVOs will make it increasingly difficult for
boaters to find EO. By EPA's own calculations, if the proposed levels are adopted, the petroleum
industry will only be able to produced 130 million gallons of EO as compared to 9.3 billion
gallons of E10 consumed in 2014. This is a 98.5% decrease in the availability of EO. [EPA-HQ-
OAR-2015-0111-2265-A1 p. 1]
We question EPA's calculation of the EO demand from recreational boating. The source for the
projected demand2 relies upon a limited review of information and does not fully capture the
recreational boating fuel market. The memo presumes that the only demand for EO from
recreational boats would come from marina fuel sales. In reality, 95 percent of all recreational
boats are less than 26 feet in length, the size considered "trailerable" and are far more likely to
fuel at conventional gas stations. EPA should reevaluate the demand for EO from the recreational
boating market. [EPA-HQ-OAR-2015-0111-2265-A1 p. 2]
The increased level of E15 in the marketplace in response to the proposed RVOs is a substantial
concern for recreational boat owners. It is well established that El5 will cause damage to marine
engines.3 With El5 now approved for sale in approximately 24 states, it is increasingly likely
that boat owners will see it where they fuel. With only one small required warning label on
pumps dispensing E15, the prospect of mis-fueling of boats is significant. [EPA-HQ-OAR-2015-
0111-2265-A1 p. 2]
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On behalf of The Boat Owners Association of The United States, BOATU.S., we submit the
following comments to express our significant concerns with the proposed standards and
renewable volume obligations (RVO) for the Renewable Fuel Standard (RFS) Program, Docket
ID: EPA-HQ-OAR-2015-0111. With over a half-million members nationwide and the largest
provider of non-emergency recreational boat towing services, we have a unique perspective on
the effects this proposal will have on the recreational boating consumer. [EPA-HQ-OAR-2015-
0111-2265-A1 p. 1]
EPA must carefully weigh the impact the proposal will have on the availability and affordability
of gasoline that is safe for use in marine engines. Boat owners recognize that renewable fuels are
an important component of our nation's energy future. They also expect, however, EPA to
ensure the fuel in the marketplace will not damage their engines and place their families at risk
on the water. [EPA-HQ-OAR-2015-0111-2265-A1 p. 2]
2. EPA Memorandum "Estimating EO Volume Sold in the U.S. at marinas" 2015
3. High Ethanol Fuel Endurance: A Study of the Effects of Running Gasoline with 15% Ethanol
Concentration in Current Production Outboard Four-Stroke Engines and Conventional Two-
Stroke Outboard Marine Engines, National Renewable Energy Laboratory 2011
Trenton Agri Products LLC
The RIN system was designed to incentivize petroleum refiners and downstream companies to
build out infrastructure accommodating increased ethanol blending all the way to retail
distribution. The law was passed nearly 8 years ago. Ample time has passed for all the
commercial parties to plan accordingly. For those same parties to say today...'we don't have the
infrastructure in place' for higher level ethanol blends simply means they have been hoping the
RFS wouldn't be enforced, as the EPA is now proposing not to do. And for the last several years,
as they saw the breach of the blend wall coming, they have been saying the 'RFS is broken' and
rallying other unrelated parties into the falsehoods of 'food fights' and other forms of
demagoguery. What they are really messaging is 'we refuse to give up any more market share to
ethanol' and accordingly, they will do anything to prevent the US consumer from having a true
choice at the gas pump. [EPA-HQ-OAR-2015-0111-1686-A1 p.2] [EPA-HQ-OAR-2015-0111-
1043, pp.320-321]
These obligated parties have temporarily convinced the EPA to buy into this 'factors that affect
consumption' thesis to support the EPA's current, but wrong, proposal.[EPA-HQ-OAR-2015-
0111-1686-A1 p.2] [EPA-HQ-OAR-2015-0111-1043, p.321]
Volvo Lexington Operation
This damage puts the public at risk-by raising the volume levels. The country will break the
'blendwall' by 600 million gallons next year. It is ever more likely that El 5 will be forced on the
public. Considering that 97 percent of boaters purchase gasoline at regular fueling stations, the
likelihood of accidental misfueling is a very real threat. [EPA-HQ-OAR-2015-0111-0538-A1
p.l]
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As you know, this is illegal, as marine engines are prohibited from using El5 and higher blends.
Yet to date, the government has failed to implement any legitimate plan or precautionary
measures to prevent such misfueling or guarantee the availability of E10 and lower fuels. In
absence of a proven misfueling plan and the guarantee for safe fuels, the EPA simply cannot
increase the ethanol volumes without jeopardizing millions of marine engines.
Thus, I urge the agency to ensure that the blendwall isn't breached and that the boating industry
isn't threatened by dangerous fuels. [EPA-HQ-OAR-2015-0111-0538-A1 p. 1]
Wisconsin Corn Growers Association (WCGA)
The EPA also wrongly backs the so called blend wall, which is a myth put out by big oil. This
myth suggests that we've reached a saturation point of ethanol use at a 10 percent ethanol blend
and that higher-level ethanol blends, such as El 5 and E85, are not yet large enough to justify a
higher RVO. That's just false. Ethanol consumption continues to increase and now we have 62
percent of 2015 model new cars warrantied to run on El 5 with more retailers adding blending
pumps to offer higher ethanol blended fuel. [EPA-HQ-OAR-2015-0111-1830]
Response:
Responses to comments on EO
In the NPRM we anticipated that use of EO (gasoline containing no ethanol) would remain fairly
limited and would tend to decrease over time given the widening use of ethanol overall. Some
stakeholders said that EO represented at least 3% of the gasoline pool in recent years, and that
this demand for EO should be preserved in the determination of the volume requirements for
2016. We disagree. As described more fully in Section 2.6, we do not believe that recent supply
of EO is on the order of 3% of the gasoline pool as claimed by these stakeholders. More
importantly, one of the ways that the RFS program can increase the supply of renewable fuels in
the United States is by incentivizing the market to continue to transition from EO to E10 and
other higher level ethanol blends. It is mainly in the context of gasoline use in recreational
marine engines that we believe the greatest challenges exist in moving away from EO.
In the NPRM we discussed our investigation into the volumes of EO that are in demand by
owners of recreational marine engines. Based on our investigation, we concluded that about 124
million gallons of EO would be consumed by recreational marine engines. We estimated that the
impact of this volume of EO used in such applications on the total supply of renewable fuel in
2016 would be very low, and would likely be offset by the small expected use of El 5. As a
result we proposed to omit EO and E15 from the scenarios described in Table II.D.2-2 of the
NPRM.
In response to the NPRM, a number of organizations disagreed with our assessment of the
potential volume of EO consumed by recreational marine engines. Several stakeholders pointed
to EPA's own, much higher estimates of total gasoline consumption by these engines. Total
gasoline consumption by recreational marine engines is substantial - about 1.55 billion gallons
according to a recent estimate from the EPA's NONROAD model. However, we disagree that
all of this volumes is EO, and no stakeholders provided any data on actual consumption of EO by
recreational marine engines. Instead, stakeholders pointed to anecdotal evidence that owners of
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recreational marine engines preferentially seek out EO. One stakeholder referenced data
purporting to show that states with the greatest number of retail stations offering EO tend to also
be states with the greatest number of registered boats. After reviewing this data we concluded
that a weak correlation may exist, but that it nevertheless provides no straightforward mechanism
to quantitatively determine the volume of EO consumed by recreational marine engines.
Based on the information provided by stakeholders and our own analyses, we believe that the
volume of EO consumed by recreational marine engines or otherwise demanded by the
marketplace could be as high as several hundred million gallons in 2016. As a result, we have
included some estimates of EO in the volumes scenarios described in Section II.G of the final
rule. Those scenarios demonstrate that our final volume requirements can be met even in cases
where some volume of EO remains in the marketplace.
One stakeholder said that the proposed volume requirements would only allow the petroleum
industry to produce 130 million gallons of EO in 2016. We disagree. The RFS volume
requirements do not require specific amounts of ethanol, and neither would they prevent
suppliers from providing EO if there is demand for it. The market as a whole must supply the
volumes that are required, but these volumes can be in the form of ethanol, biodiesel, renewable
diesel, butanol, naphtha, heating oil, or biogas, or any combination of these fuel types.
Responses to comments on El5
In the NPRM, we discussed the fact that El 5 is approved for use in model year 2001 and newer
motor vehicles, but that we expected the volume of El 5 used in 2016 to be low. We based this
conclusion on the fact that the number of retail stations offering it at the time of the NPRM was
only about 100 out of the approximately 152,000 retail stations in the U.S. We said that the
number of retail stations offering El 5 was unlikely to grow significantly in 2016, and we
estimated that, at most, the use of El 5 in 2016 would increase total ethanol consumption by only
about 10 million gallons. Since this volume was far lower than the volume requirements under
consideration, and its impact in our analysis would likely be offset by the small expected use of
EO, we proposed to omit EO and El 5 from consideration in the determination of the volume
requirements for 2016.
A number of stakeholders said that our estimate of the volume of El 5 that could be used in 2016
was far too low. These stakeholders pointed to the large number of vehicles that are legally
permitted to use El 5. However, as described more fully in Section II.E.2.V of the final rule, we
do not believe that the number of vehicles that are legally permitted to use El 5, or the number of
2001 or later model year vehicle owners who would choose to use it, is a predominant factor in
determining the volume of E15 that is likely to be consumed in 2016. Instead, it is the number of
retail stations offering El5 in 2016 that is more likely to determine how much El5 is actually
consumed.
Stakeholders who believed that El5 use could grow significantly in 2016 said that EPA had not
provided sufficient analysis in the NPRM demonstrating why the number of retail stations
offering E15 could not grow significantly by the end of 2016. These stakeholders made the
implicit assumption that setting the volume requirements at the statutory targets would provide
all the incentive that the market needs to significantly increase use of El 5. We disagree. As
described in Section II.E. 1 of the final rule, the market is not unlimited in its ability to respond to
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the standards we set, but in fact is subject to a variety of constraints, and the RIN mechanism is
imperfect in its ability to provide the incentives needed to expand renewable fuel use, including
El5 use as evidenced by the slow growth in the number of stations offering El5 over the last 5
years.
However, based on information supplied by other stakeholders, we have expanded our
assessment of the potential for increased use of El 5 in 2016. In this effort we reviewed two
studies typically cited by proponents of E15 as the basis for claiming that the number of stations
offering El5 could expand significantly in 2016: one by the National Renewable Energy
1718
Laboratory (NREL), and another by Stillwater Associates. ' Proponents of increased use of
El 5 referred to these studies in arguing that the number of retail stations offering El 5 could
expand by many thousands by the end of 2016 if EPA were to create the appropriate incentives
by setting the applicable volume requirements much higher than proposed.
In the time since El 5 was approved for use, the number of retail stations offering El 5 has only
grown to about 120, or about 0.1% of all retail stations, based on information collected by the
RFG Survey Association.19 Based on comments received from retail station owners and their
representative associations, this low number of retail stations offering El 5 is most likely due to
liability concerns. However, other stakeholders said that the slow growth in retail stations
offering E15 may instead be due to the lack of a 1 psi waiver for E15. While we agree that this
may be a factor, we have seen no evidence that it is a primary limitation, particularly since it is
not a limitation in RFG areas, nor in other areas that do not provide a 1 psi RVP waiver for E10.
Together, such areas represent about 40% of the country, strongly suggesting that the market can
supply El 5 without a 1 psi waiver. When statements have been reported to EPA that the lack of
the 1 psi RVP waiver is a limitation in supply of E15, it has been in situations where other
limitations have already been addressed (e.g., retail station compatibility). For further discussion
of the Ipsi waiver, see Section 10.6.5.
For instance, stakeholders representing retail stations indicated that, while it may be the case that
much of the existing equipment at retail is compatible with El 5 as argued in the NREL and
Stillwater studies, compatibility with El 5 is not the same as being approved for El 5
use. Recently-amended EPA regulations require that parties storing ethanol in underground
tanks in concentrations greater than 10 percent demonstrate compatibility of their tanks with the
fuel, through either a certification or listing of underground storage tank system equipment or
components by a nationally recognized, independent testing laboratory for use with the fuel,
written approval by the equipment or component manufacturer, or some other method that is
determined by the agency implementing the new requirements to be no less protective of human
health and the environment. The use of any equipment to offer El 5 that does not satisfy these
requirements, even if that equipment is technically compatible with El 5, would pose potential
liability for the retailer, including concerns related to liability for equipment damage. Few
17 K. Moriarty and J. Yanowitz, "E15 and Infrastructure," National Renewable Energy Laboratory, May
2015. Attachment 3 of comments submitted by the Renewable Fuels Association.
18 Stillwater Associates, "Infrastructure Changes and Cost to Increase RFS Ethanol Volumes through Increased E15
and E85 Sales in 2016," July 27, 2015. Submitted with comments provided by Growth Energy.
19
' "Stations registered to offer E15," docket EPA-HQ-OAR-2015-0111.
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retailers would be willing to assume such liability, according to comments submitted by their
national associations. This issue is of particular concern for underground storage tanks and
associated hardware, as the documentation for their design and the types of materials used, and
even their installation dates, is often unavailable.
Insofar as equipment can be verified as being compatible with El 5 and is approved as such by a
testing laboratory such as Underwriter's Laboratory, many retailers are still left with significant
concerns about liability for misfueling. Notwithstanding EPA regulations that require pump
labeling, a misfueling mitigation plan, surveys, product transfer documents, and approval of
equipment configurations, retailer associations indicated that many retail stations owners are
nevertheless concerned about litigation liability for misfueling, either for vehicles manufactured
before 2001 or for nonroad engines. This concern creates a disincentive for many retailers to
offer E15. While such disincentives are not insurmountable, they do represent a constraint that
we must take into consideration.
Apart from retail stations that may already have equipment that could be used to offer El 5, some
stakeholders pointed to the potential for new equipment to be installed at retail, citing a number
of companies which have plans for adding El 5 dispensing capabilities to retail
stations. However, even if all planned installations occurred by the end of 2016, they would only
expand the number of retail stations offering El 5 by a few hundred based on information
provided by stakeholders in their comments.
Several stakeholders pointed to a recent grant from the U.S. Department of Agriculture called the
Biofuel Infrastructure Partnership (BIP) which will provide $100 million to add the equipment
necessary to offer higher ethanol blends. These stakeholders suggested that this program will
dramatically increase the volume of El 5 used in 2016, and that as a result EPA should include
substantial volumes of E15 in its determination of the volume requirements for 2016, rather than
assume that they are zero. Based on information from USD A, the BIP program is expected to
increase the number of retail stations offering higher level ethanol blends by 1,486, and to
increase the number of underground tanks that can hold higher level ethanol blends by 515.
However, it is not clear how many of these additional retail stations will offer El 5 as opposed to
E85, nor how many of these stations will offer higher ethanol blends in 2016. While the
infrastructure changes are required to be completed by the end of 2016, there are also
opportunities for extensions of up to two additional years. Even if most of the retail stations that
have been targeted by the BIP program were upgraded to offer El 5 and this occurred by the end
of 2016, they would not all offer E15 for all of 2016. Instead, there would be a ramp up of
stations offering El 5 throughout 2016. Effectively, then, an average of only about 700 might be
offering E15 for all of 2016. As described in Sections II.E.2.V and II.E.2.vi of the final rule, we
have used this approach to estimate the volume of E15 that could be used in 2016 at 320 million
gallons.
The costs associated with upgrading old equipment at retail stations in order to offer El 5, or
installing new equipment, was a matter of disagreement among stakeholders. In general,
stakeholders representing the ethanol production industry believed that the costs would be low,
while those who represent the interests of retail stations said that they would be high. For
instance:
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"Claims by the ethanol industry that these [cost] estimates are exaggerated or that
E-15 compatibility is achievable for as little as $1500 demonstrates a profound
lack of understanding of the retail motor fuel industry and the laws and
regulations that apply to underground storage tanks on the federal, state and local
levels." (Petroleum Marketers Association of America, page 3)
Those representing the retail station industry would presumably have the most accurate
knowledge of the costs and other issues associated with expanding offerings of E15.
While some stakeholders were enthusiastic about the potential for expansion of E15 use in 2016,
and focused on the fact that E15 is legally permitted to be used in 2001 and later model year
vehicles, others expressed concern about the increasing availability of El 5 at retail and the
potential for misfueling vehicles manufactured prior to 2001 as well as nonroad engines. Some
of the stakeholders expressing these concerns said that EPA had not done enough to ensure that
this misfueling does not occur. As mentioned above, the existing regulations require retail
station owners to clearly label their pumps as to fuel type, to develop a misfueling mitigation
plan and submit it to the EPA for approval, to participate in fuel surveys, to ensure that their
product transfer documents correctly identify the fuel types they are offering, and ensure that all
of their equipment configurations are approved for dispensing El 5. We expect that these
requirements are sufficient to prevent misfueling, and no stakeholder provided information or
data on actual misfueling that would warrant changes to the regulatory requirements.
Stakeholders representing the refining industry said that the volume requirements that EPA sets
must not require the use of E15 which, they said, has ongoing liability issues. In contrast, other
stakeholders said that EPA should take steps to ensure that El5 is made available at retail. As
described earlier, the RFS volume requirements are not specific to ethanol. The market will
determine the mix of renewable fuels and blends with gasoline or diesel that are used. By setting
volume requirements that are the maximum reasonably achievable, we are providing
opportunities for El 5 to grow if the market chooses that avenue to meet the volume
requirements. Also, as described in Section 2.7.1, refiners can and should take steps to promote
the use of renewable fuels, and in so doing they can choose which renewable fuels to
promote. For responses to comments on the impacts of higher ethanol blends on engines, see
Section 10.6.4.
One stakeholder said that more motorists would buy El 5 and E85 if these fuels were available
for them to choose. This is undoubtedly true. However, we disagree with this stakeholder's
belief that sales of these fuels would increase dramatically if the EPA set the volume
requirements at the statutory targets. As described in detail in Section HE. 1 of the final rule,
there are a variety of constraints that limit the ability of the market to increase use of renewable
fuels in response to the standards we set. One of those constraints is the time necessary for
increasing the availability of E15 and E85 at retail. In addition to the imperfect nature of the
RIN mechanism to reduce renewable fuel prices at retail as described in Section II.E.2.ii of the
final rule, and the poor response we have observed among motorists who do have access to E85
as described in Section II.E.2.iii of the final rule, there are a number of reasons why we do not
believe that El5 and E85 offerings at retail can expand fast enough to permit the market to reach
the statutory targets in 2016. These include initial capital costs and concerns about liability for
misfueling among retail station owners, among others. Anecdotal information suggesting that
customer demand for El 5 and E85 is always high when it is available to them contradicts
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information we have from other retail station owners who have offered these fuels and been
90
disappointed at the consumer response.
For responses to comments stating that the E10 blendwall is not a constraint, or has been
fabricated by the refining industry, see Section 2.4.
For responses to comments suggesting that the ethanol content of the gasoline pool should be
kept below 10%, and that EPA should not be setting standards that are designed to increase the
use of E15 and/or E85, see Section 2.6.
For responses to comments suggesting that obligated parties have failed in their statutory
responsibilities to invest in the infrastructure needed to expand renewable fuel supply, see
Section 2.7.1.
For responses to comments requesting a Ipsi waiver for E15, see Section 10.6.5.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.2.2.1 Inadequate Domestic Supply
Section 2.4.1 Proposed Total Renewable Fuel Volume for 2014
Section 2.4.2 Proposed Total Renewable Fuel Volume for 2015
Section 2.4.3 Proposed Total Renewable Fuel Volume for 2016
Section 2.6 Ethanol Consumption
Section 2.6.1 E10 Blendwall and Demand for Gasoline
Section 2.7.3 Impacts on Corn Ethanol
Section 2.7.4 Impacts on Imports of Sugarcane Ethanol
Section 7 Economic Impacts of the Proposed Rule
Section 7.3 Fuels Industry Impacts (oil refineries, biofuel facilities)
Section 7.4 Impact on RINs
Section 7.5 Retail Fuel Prices
Section 7.7 Impact on Jobs and Local/State Economy
Section 7.8 Cost to Consumers
Section 10.6.4 Ethanol Impacts on Engines
2.7 Volume Scenarios
Comment:
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
Co-processing at existing facilities is not a simple option. If feedstocks are available,
modifications must be made at a petroleum refinery to safely handle and process the new feeds.
Most renewable feedstocks for non-ethanol renewable fuels require pre-treatment, which
requires a capital investment and time to design permit and construct. [EPA-HQ-OAR-2015-
0111-1948-A1 p.20]
' For instance, see comments from U.S. Ethanol.
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EPA acknowledges that when it simulated future market behavior for those 16 combinations,
only "some of the scenarios" showed that its proposed volume requirements were achievable.33
Accordingly, EPA appears to implicitly recognize that the proposed volume requirements for
2016 are not achievable in many of its simulations. Thus, under EPA's own analysis, the
proposed requirements for 2016 cannot "be expected to be achieved in light of supply
constraints."34 [EPA-HQ-OAR-2015-0111-1948-A1 p.22]
33NPRMat33126.
34 Mat 33105.
Clean Air Task Force
Between the two compliance scenarios posited by EPA—one dominated by E85 and the other
dominated by biomass-based diesel (BED)—the Agency appears to be betting on the former.
[EPA-HQ-OAR-2015-0111-1828-A1 p. 10]
Environmental and Energy Study Institute (EESI)
In EPA's proposal for 2014, 2015 and 2016, the total proposed volume will be capped at less
than 10 percent, based on available infrastructure, not available fuel volumes. [EPA-HQ-OAR-
2015-01 ll-1944-Alp.2]
Governors' Biofuels Coalition
Under EPA's proposed rule, there is no incentive for most vehicles to use anything other than
E10, which will discourage any further investment in infrastructure leading us back to the initial
problem and solution. [EPA-HQ-OAR-2015-0111-1722-A1 p.5]
Growth Energy
EPA asserts that 100-600 mil gal of ethanol could be distributed and consumed as E85 in
1 7R
2016. EPA offers no quantitative evidence or analysis supporting those numbers. They appear
to have been pulled out of thin air. [EPA-HQ-OAR-2015-0111-2604-A2 p.33]
178 Id at 33,127-33,128.
International Council on Clean Transportation (ICCT)
Indeed, there is no scenario presented to meet the proposed advanced and renewable biofuel
mandates that does not require one or more of:
• Excessive pressure on vegetable oil markets;
• Excessive pressure on sugarcane ethanol imports;
• High consumption of conventional biodiesel imports, likely meaning grandfathered palm
oil that is not expected to deliver a 20% emissions reduction. [EPA-HQ-OAR-2015-
0111-1923-A1 p.8-9]
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Marathon Petroleum Company
A detailed review of the 16 cases shows that every case requires either E85 sales, biomass-based
diesel blending or both that exceeds the highest level achieved in the last five years by a
significant amount. These volumes are not realistic given the significant hurdles necessary in
overcoming the constraints outlined earlier. [EPA-HQ-OAR-2015-0111-1932-A1 p. 5]
Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
Accordingly, at least half of EPA's scenarios to fill the "gap" resulting from its proposed
mandates significantly overestimate the amount of E85 that the economy is likely to supply in
2016. In order to satisfy the mandates, the economy instead will need to produce biomass-based
diesel at or near levels that EPA has described as merely "theoretical[]," and a variety of other
renewable fuels the availability of which has varied widely in recent years. [EPA-HQ-OAR-
2015-0111-2603-A2, p.4]
National Biodiesel Board
While NBB does not dispute that the industry could meet 3.40 billion gallons, EPA's assessment
unduly restricts the possible scenarios, as it only assesses whether the proposed 3.4 billion
gallons could be met, not other volumes. To identify "maximum achievable" supply, EPA was
required to do more. At a minimum, EPA should have compared various additional increases and
higher possible levels. [EPA-HQ-OAR-2015-0111-1953-A2 p.115]
Poet, LLC
EPA fails to adequately grow volumes of biofuels beyond the so-called E10 blendwall, contrary
to Congressional intent, and EPA's proposal would send a market signal that would undermine
the wider distribution of fuel blends containing more than 10% ethanol. [EPA-HQ-OAR-2015-
0111-2481-A1 p.10]
Response:
Because the RFS volume requirements allow the market to determine the mix of particular types
of fuels used, neither the EPA nor any other party can predict with precision how the market will
respond to the RFS volume requirements. This fact was one of the purposes behind the
presentation of multiple scenarios in Table II.D.2-2 in the NPRM. In describing these scenarios,
the NPRM said:
"The scenarios in the table above are clearly not the only ways that the market
could choose to meet the total renewable fuel and advanced biofuel volume
requirements that we are proposing today, but they are illustrative of many ways
that it could play out. While we are not in a position to predict how the market
would respond to the volume requirements we are proposing today, we believe
that the range of possibilities for E85, BED, and other sources is a clear indication
that the standards we are proposing are achievable." (80 FR 33128)
Despite this, many stakeholders expressed concerns that the proposed volume requirements
would result in particular outcomes in the market that they believed would be in conflict with
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their preferred outcomes or what they believed was Congress' intent. For instance, some
stakeholders said that the proposed volumes would guarantee that the market remains below the
E10 blendwall. In fact, all the scenarios represented renewable fuel volumes larger than the
volumes that can be consumed as E10 alone and for the final rule more than 4 billion gallons
greater. Furthermore, both the proposed and final volumes provide opportunities for the market
to increase the use of higher ethanol blends such as El 5 and E85 compared to historical levels,
and the range of scenarios presented in the final rule result in a pool-wide gasoline ethanol
content of between 10.07% and 10.18%. Other stakeholders said that the proposed volumes
would have forced the market to supply volumes of E15 and/or E85 that were either not
achievable or would have resulted in extremely high costs or shortfalls in gasoline and
diesel. Again, while the RFS volume requirements create opportunities for increasing volumes
of E15 and E85, as well as non-ethanol renewable fuels, they do not force the market to supply
E15 or E85. The same is true for supply of biodiesel and imports of sugarcane ethanol: the
market could supply a wide range of volumes of these fuel types depending on a wide variety of
factors that include domestic and foreign markets for fuels and feedstocks, among other things.
One stakeholder said that the EPA was "betting" on those scenarios exhibiting the highest levels
of E85 as being the most likely outcomes. We disagree. We do not have any preference or
expectation for any particular scenario or outcome. On the contrary, we said in several locations
that we were not in a position to predict how the market would respond to the proposed volume
requirements. In contrast, another stakeholder said that many of the E85 volumes shown in
Table II.D.2-2 of the NPRM were not attainable, and as a result the market would need to
respond with volumes of BED that were described in the NPRM as "theoretical." Again, we
cannot predict how the market will respond to the standards we set, but the scenarios provided in
the NPRM, and updated in Table II.G-2 of the final rule, provide a range of possible outcomes,
all of which are possible. While some scenarios may be more likely than others, stakeholders
differed in their views on which scenarios were more likely.
One stakeholder quoted the NPRM as saying that"... some of the scenarios fall within the
reasonably expected capabilities of the market..." (80 FR 33126) and concluded that EPA was
admitting that many of the scenarios were not achievable. This stakeholder then went on to
conclude that the proposed 2016 volume requirements cannot be achieved because some of the
scenarios presented in the NPRM were not achievable. This is a wholly unwarranted
conclusion. The actual quote from the NPRM reads "... at least some of the scenarios fall within
the reasonably expected capabilities of the market..." (emphasis added) to clarify that, given the
inability to predict precisely how the market would respond, it was possible that all scenarios
were achievable. This fact is further emphasized by the adjoining text that this stakeholder
ignored:
"...we cannot predict precisely how the market would respond to the standards we
are proposing..."
The purpose of the scenarios in Table II.D.2-2 of the NPRM was not to prove that every possible
combination of fuel types was achievable, but only to demonstrate that there were a wide variety
of options available to the market, and that the full range of levels for each fuel type was within
the realm of possibility. The NPRM made it clear that "...we do not believe that all scenarios are
equally likely. Certainly some are more likely than others." (80 FR 33129) This remains the
case for the final rule, though the volumes and scenarios differ from those in the NPRM.
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One stakeholder said that, since all of the scenarios described in the NPRM included either E85
or BED volumes that were significantly higher than past levels, none of them were
achievable. As described in Section II. A of the final rule, dramatic increases above historical
volumes is exactly what Congress intended. More importantly, the fact that the proposed
volumes would drive E85, BED, or any other fuel type significantly higher than historical levels
is not, in and of itself, a basis for saying that they are not realistic or not achievable. On the
contrary, it is EPA's responsibility to determine first if the statutory targets can be achieved, and
if they cannot, to determine the levels that can be reasonably achieved. Discussion of the various
hurdles that would need to be overcome to reach the levels that we proposed, as well as the
levels that we are finalizing today, can be found in Section II.E of the final rule.
One stakeholder raised a hurdle with respect to the challenge of co-processing renewable
biomass and petroleum to increase the supply of renewable fuel, specifically the need for capital
investments to handle the additional renewable feedstocks. We recognize that there are
challenges, but the industry is actively working to overcome those challenges to increase the
amount of coprocessing that can occur. For additional responses to comments on the
responsibilities that obligated parties have for increasing renewable fuel supply, and whether
existing refineries can using co-processing of renewable biomass and petroleum towards this
end, see Section 2.7.1.
For responses to comments suggesting that the proposed 2016 volume requirement for advanced
biofuel is too low, see Section 2.5.3.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.2.2.1
Section 2.3.1
Section 2.6.1
Section 2.7.4
Section 2.7.5
Section 3
Section 3.2.1
Section 10.6.8
Inadequate Domestic Supply
Congressional Intent to Increase Volumes
E10 Blendwall and Demand for Gasoline
Impacts on Imports of Sugarcane Ethanol
Impacts on Imports of Conventional Biodiesel
Proposed National Volume Requirement for Biomass-Based Diesel for
2014-2017
Availability of Feedstocks
Biointermediates
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2.7.1 Achievable Volumes of E85 Consumption
Comment:
AL-Corn Clean Fuel; Badger State Ethanol; Big River Resources, LLC; Central Indiana
Ethanol (CIE); Commonwealth Agri-Energy, LLC; Husker Ag LLC; Pacific Ethanol, Inc.;
Syngeta
E85 prices, sales volumes, and infrastructure development during periods of elevated RIN prices
clearly demonstrate that the RIN mechanism will work exactly as intended to drive expansion of
renewable fuel consumption and investment. For example, data from the Minnesota Department
of Commerce show that E85 sales tripled between January and August 2013 as RIN prices
increased. Similarly, E85 sales in Iowa doubled from the first quarter to the third quarter of 2013,
according to the Iowa Department of Revenue. Additionally, the emergent E85 value proposition
drove retailers to install an estimated 400 new E85 pumps since the beginning of 2013. Rising
RIN prices also drove increased E85 blending by ethanol plants themselves and direct sales to
wholesale or retail markets. The RIN market was set to do exactly what was intended—make oil
companies invest in infrastructure to facilitate higher level blends and to provide those to their
customers. Instead, EPA's actions have emboldened oil interests to fight against higher level
blends and to stifle the availability of and access to higher level blends such as E15 and E85.
Let's get back to what the law intended! [EPA-HQ-OAR-2015-0111-1214-A2 p.3]
American Coalition for Ethanol (ACE)
Having apparently accepted refiners' arguments that everyone has to pitch in to get past the
blend wall, EPA seems to be ignoring the fact that everyone else already has. The only "fuel
market participants" that have refused to take a single step to get over the blend wall are the
obligated parties - who are, by definition, the only ones required by law to do so. [EPA-HQ-
OAR-2015-0111-2543-A2p. 8]
Today, obligated parties may protest that EPA is breaking the blend wall in 2016, but you need
to separate the signal from the noise. EPA's methodology actually enables oil companies to
stockpile approximately 2 billion gallons of carryover RINs by 2016. So, in reality, your
proposal continues to limit ethanol blending to E10. According to Bruce Babcock of Iowa State
University, because obligated parties control 80 percent of refined product terminals, they decide
the level of ethanol blending that will or will not occur. And that's why Congress enacted the
RFS. Left to their own devices, oil companies won't allow consumer access to El5 and flex
fuels. Left to their own devices, oil companies won't reduce the carbon intensity of gasoline.
They've earned the label obligated parties based on their refusal to innovate. [See Docket
Number EPA-HQ-OAR-2015-0111-1043, p. 19-20.]
American Council on Renewable Energy (ACORE)
There is ample evidence that customers will purchase E85 when given the option. According to a
recent study, E85 sales volume in California has grown over 600% in the past five years to 11.1
million total gallons, with retail locations selling an average of 140,585 gallons per year in 2014.
Californian E85 customers recognize the product's value proposition, with 92% of customers
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reporting the same or better value compared to petroleum. [EPA-HQ-OAR-2015-0111-1926-A1
p.9]
The U.S. Department of Agriculture (USD A) announced it would invest up to $100 million in a
Biofuels Infrastructure Partnership to double the number of flex fuel pumps. [EPA-HQ-OAR-
2015-0111-1926-A1 p.9]
The world's largest oil companies are resisting their obligation to allow higher ethanol blends
such as E15 into the consumer marketplace, threatening the success of the RFS. It is simply not
accurate for obligated parties to claim that all independently owned gas station owners can
decide what gasoline blends to sell on their own. According to a recent study, half to two-thirds
of gas stations in the U.S. are either owned by these obligated parties or subject to franchise and
branding agreements, which often prohibit these stations from selling higher ethanol blends.32
[EPA-HQ-OAR-2015-0111-1926-Alp.lO]
32 Protecting the Monopoly How Big Oil Covertly Blocks the Sale of Renewable Fuels,
Renewable Fuels Association (RFA), July 2014, (p. 1-2),
http://ethanolrfa.3cdn.net/3888b61efa4fle9fb3 t2m6btt6o.pdf
American Farm Bureau Federation (Farm Bureau)
Another option is E85. More than 17 million flex-fuel vehicles are on U.S. roads today; however,
the United States is only utilizing 2 to 3 percent of its current E85 capacity. The issue with E85
acceptance by consumers has always been its price competitiveness relative to conventional
gasoline, but as was shown in Table 1, D6 RIN values are being used to cut the price of E85 at
the pump, encourage higher sale volume and thus provide greater volume demand for ethanol
itself. [EPA-HQ-OAR-2015-0111-2355-A1 p. 5]
The problem is not whether El 5 or E85 are justifiable; the issue is the petroleum industry
defending its declining share of the liquid transportation fuel market. The petroleum industry has
repeatedly been on record of stating that they have no recourse to remaining compliant with the
RFS2 program other than to curtail gasoline supply when they run out of roll-over RINs.
Statements and actions like this do not offer responsible solutions, but instead generate emotive
responses that add to problems and can purposefully harm the U.S. economy. [EPA-HQ-OAR-
2015-0111-2355-A1 p. 5]
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
The Proposed Rule states that the only practical means of using more ethanol in 2016 is to use
more E85, but in the Proposed Rule EPA overlooks key facts in providing an unrealistically high
estimate of the potential growth of E85 in 2016. Consumer acceptance, infrastructure barriers,
and logistical constraints limit the rate at which E85 use can increase to make up that difference.
The timeframe necessary to install compatible refueling infrastructure, build out the vehicle fleet,
and change consumer preferences is measured in years or even decades and not the mere months
left until the 2016 rule takes effect. [EPA-HQ-OAR-2015-0111-1948-A1 p.7]
The approach we recommend would require EPA to provide methodology for estimating E85
separately from ethanol in the rest of gasoline consumption. The amount of E85 assumed in the
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calculation would be explicit and based on demonstrated and not aspirational targets. [EPA-HQ-
OAR-2015-0111-1948-A1 p.ll]
Working with automobile manufacturers to increase the number of FFVs in the fleet is not a
practical option for increasing the volume of renewable fuels consumed in 2016. Making
changes in the vehicle fleet occurs over a period of years and it is too late to significantly affect
the number of FFVs to be sold in 2016. [EPA-HQ-OAR-2015-0111-1948-A1 p. 19]
Increasing the number of retail stations offering E85 and El 5, and locating stations near the
higher populations of FFVs is similarly unrealistic. While there may be some increase in E85
investment due to the USDA grant program, the time required for permitting, constructing and
operating new or upgraded retail facilities will delay the benefit of any such investments well
beyond the 2016 window. Also, it is unclear how to influence where retail investments occur,
since these decisions would be made by individual businesses who are evaluating market
opportunities in their particular locations. [EPA-HQ-OAR-2015-0111-1948-A1 p.20]
The third option EPA suggests relies on using contractual mechanisms to ensure favorable
pricing of E15 and E85 relative to E10. This option is unrealistic and would have little, if any,
impact on the utilization of El 5 and E85. Simply put, prices for different fuels are established in
the market by consumer demand balanced against the cost of supplying the fuels. [EPA-HQ-
OAR-2015-0111-1948-A1 p.20]
CAA section 21 l(o) does not require any party to invest in retail infrastructure, nor can any such
obligation be implied in the law or EPA's implementing regulations. [EPA-HQ-OAR-2015-
01H-1948-A1 p.32-33]
If the renewable fuels industry believes there is consumer demand, and are willing to accept the
potential liability for selling fuels that are not compatible with consumers' vehicles, and they
believe that they will benefit economically from making such investments, then it is reasonable
to expect they will make such investments. It is not reasonable to forecast that obligated parties
or independent retailers will make potentially uneconomic decisions and then base RFS
standards on such an assumption. [EPA-HQ-OAR-2015-0111-1948-A1 p.34]
Stated simply, based on the information provided in the Proposed Rule, it is not reasonable to
expect any significant increase in E85 demand in 2016. Relying on the mere possibility that
demand for E85 might increase in 2016 is a risky approach for obligated parties, consumers and
the economy and EPA should not take such risks. [EPA-HQ-OAR-2015-0111-1948-A1 p.35]
No definitive study shows why customers have not used E85 with greater frequency.76 Some
short term and limited analysis (focused primarily on a state or two) by The Fuels Institute and
EPA indicates that consumers would respond to E85 price adjustments that account for the lower
E85 energy content. Historically, this has not happened (as shown by the graph below) so
whether this is an accurate predictor of consumer behavior is uncertain. [EPA-HQ-OAR-2015-
0111-1948-A1 p.39]
Retail Station Ownership
The assertion that refiners maintain control of the fuels they produce through the distribution
system until the point of retail sale to the consumer is an often repeated misconception. For
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example, Abengoa Bioenergy, DuPont Industrial Biosciences and POET -DSM Advanced
Biofuels stated in joint comments: "if they were forced to do so, the Obligated Parties [could]
use their control of the gasoline marketing sector to penetrate the E 10 'blendwall."1 In fact,
approximately 96% of the gasoline stations in the country are independently owned, and it is
beyond the control of the obligated parties to require investments to make those stations E85 or
El5 compliant. The decision to invest in new infrastructure needed to offer higher level blends
is a decision each retailer has to make based on a careful evaluation of the market and economic
conditions for their business. [EPA-HQ-OAR-2015-0111-3526-A2 p. 1-2]
Lack of E85 Demand and Alleged Actions to Discourage E85 Sales
The lack of retail E85 availability is primarily due to a lack of consumer demand. Only about 6%
of vehicles are compatible with the fuel, and E85 reduces fuel economy and range by about 20-
30 percent.3 Retail station owners must weigh the cost of investing in new infrastructure with
expected demand, which is particularly challenging for the 58% of retail stations in the U.S. that
are owned by individuals who own a single store.4 The Society of Independent Gasoline
Marketers of America (SIGMA) and the National Association of Convenience Stores (NACS) in
joint comments noted the lack of demand, stating: "the number one trait of any successful retailer
is an ability to identify what his or her customers want to buy, and then sell that product at a cost
that enables the retailer to earn a profit. Fuel retailers' customers do not purchase products
because members of SIGMA and NACS sell them; members of SIGMA and NACS sell products
because their customers purchase them."5 Rather than citing the lack of fueling pumps or the
refining sector's alleged recalcitrance as the predominant impediment to marketing greater El5
and E85 volumes as some members of the ethanol industry contend, it would be more
constructive to critically review the structure and overall implementation of the RFS2 program
for the unintended outcomes in execution that are creating the disincentives for ethanol blends
and discordant market behavior. [EPA-HQ-OAR-2015-0111-3526-A2 p. 2]
Comments submitted to the docket by Protec Fuel falsely accuse API and some of our members
of "doing everything possible to discourage their franchisees from carrying E15/E85 and
increase the cost of installing infrastructure and selling E15/E85."6 Protec Fuel also claims to
"have at least one letter from every single major oil company threatening my customers if they
proceed forward in selling the fuel, and for those who took the risk and are currently selling the
fuel, make them take it out."7 EPA should disregard these misleading and false statements when
considering public comments and developing a Final Rule. [EPA-HQ-OAR-2015-0111-3526-A2
p. 2]
Contrary to Protec's assertions, franchised retail stations are offering E85. These station owners
made the necessary investments to ensure the station's infrastructure is compatible with the
product and meet the local demand for a niche product. While the total number of stations
offering E85 is low, refiner brands represent a significant percentage of those retail stations
offering E85. Our analysis of the U.S. Department of Energy's Alternative Fuels Data Center
E85 station locator data8 shows that approximately 28 percent of the 2,639 stations offering E85
nationwide are franchised by major refiner brand names, 27 percent are unbranded retailers,
another 36 percent are non-refiner brand names, and the remaining 9 percent are owned by co-
ops and municipalities. The wide distribution of station types offering E85, as well as the large
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fraction of refiner branded stations represented in the above referenced data demonstrate that
refiners are not a significant obstacle to retail E85 availability. [EPA-HQ-OAR-2015-0111-3526-
A2 p. 2-3]
Franchise Brand Agreements
Franchise contracts are voluntary agreements between private entities that benefit both parties;
the franchisee may benefit from supply contracts, advertising and other marketing assistance
from the franchisor, and the franchisor can differentiate their product offerings from other
manufacturers. Protec and others have pointed out that franchise agreements may include
dispenser and signage placement restrictions, and labeling requirements relating to the sale of
alternative fuels.9 The implication is that any such requirements are intended to discourage the
sale of alternative fuels. To the contrary, these requirements are consistent with the Petroleum
Marketing Practices Act and would allow the refiner to protect its brand's trademarks and allow
the customer to distinguish branded from unbranded products at the dispenser. Clear labeling of
products and brands at the dispenser helps to ensure the customer purchases the product of their
choice that is also appropriate for their vehicle. [EPA-HQ-OAR-2015-0111-3526-A2 p. 3]
1 EP A-HQ-OAR-2015-0111-3272
2 PMAA letter to Chairman Upton and Ranking Member Pallone, House Committee on Energy
and Commerce, May 1, 2015
3 http://www.epa.gov/oms/renewablefuels/420fl0010a.pdf
4 National Association of Convenience Stores, 2015 NACS Retail Fuels Report, p. 28
5 EP A-HQ-OAR-2015-0111-1937 p. 4
6 EP A-HQ-OAR-2015-0111-1194
7 EP A-HQ-OAR-2015-0111-1043 p. 136
8 U.S. Department of Energy, Energy Efficiency & Renewable Energy, Alternative Fuels Data
Center, Fuel Locator, http://www.afdc.energy.gov/data_download/
9 API and AFPM are not privy to the specific language detailed in our members' franchise
agreements and this type of company specific information is not discussed as a matter of API or
AFPM business.
76 http://www.eia.gov/biofuels/workshop/presentations/2013/pdf/presentati on-04-032013.pdf
Archer Daniels Midland Company (ADM)
EPA also suggests in the RVO proposal that biofuel producers could have done more to address
the impending blendwall, stating 'biofuel producers could also have taken appropriate measures,
and that nothing precludes biofuel producers from independently marketing E85...' The statute
intentionally identifies refiners, blenders and importers of fossil fuels as the obligated parties, not
biofuel producers. Further, the RIN market was created to provide blending incentives to the
obligated parties. [EPA-HQ-OAR-2015-0111-2262-A1 p. 5]
Board of Commissioners, Mercer County; Crawford County; Greenville-Reynolds
Development Corporation; Office of Commissioners, Lawrence County, Pennsylvania
There are significant reasons that mandated ethanol blend rates should be lowered. They include:
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2. No consumer demand for E85 and E15. The administration should not try to force the use of
fuels like E85 and El 5 for which there is no significant consumer demand while trying to
eliminate fuels like EO for which actual consumers have shown a substantial demand.'
• 90% of cars on the road today are designed to use ethanol blends of 10 percent or less and
only 6 percent of the current vehicle fleet can use E85.
• E85 has 30% loss in fuel economy, and according to AAA, is more expensive per mile
driven.
• E85 demand is only 0.15 percent of overall gasoline demand; and demand, in recent
years, has been relatively flat, despite more stations offering E85 as an option.
• EPA needs to acknowledge the real demand for EO - non-ethanol gasoline. Consumers
want EO for their boats, for lawn equipment, and for motorcycles and older vehicles.
[EPA-HQ-OAR-2015-0111-1666-A1 p. 2]
Butamax Advanced Biofuels, LLC
The potential demand for ethanol in the US gasoline market has an upper limit set by El0 in the
entire vehicle fleet plus 100% use of E85 in the FFV fleet plus El 5 in a growing subset of the US
vehicle fleet.4 Within that envelope of potential E85 demand, Butamax believes that actual E85
demand can be predicted from a combination of price relationships and geographic modelling of
retail availability and recommends recent work from Babcock, et al as a template.5 The Verleger
study appended to our comments on the November 2013 NPRM6 provides additional quantitative
guidance on feasible levels of E85 penetration with existing or expanded retail infrastructure.
[EPA-HQ-OAR-2015-0111-1938-A2 p. 5]
Existing E85 infrastructure, together with existing FFV's are capable of much greater E85 sales
than EPA assume. Further, the RIN mechanism will automatically stimulate these higher sales if
the RVO is set appropriately. Butamax believes that such distribution growth will only occur if
there is a policy environment that supports long-term increases in E85 sales and strong
throughputs at existing E85 outlets. [EPA-HQ-OAR-2015-0111-1938-A2 p. 6]
Refiners can promote retail availability of E85 - While it is correct that only a small share of
retail gas stations are refiner-owned, refiners are still able to take significant actions to promote
retail availability of E85. For example, they can contract to supply E85, they can offer marketing
support for refiner-branded retailers offering refiner-branded E85 and they can help finance retail
infrastructure (much as they assist in finance of site image upgrades and point-of-sale
equipment). Up to now, many refiners have done the exact opposite of this. [EPA-HQ-OAR-
2015-0111-1938-A2 p. 8]
Analysis based on actual market data shows that existing E85 infrastructure and FFV fleet are
capable of utilizing far more E85 than the EPA have assumed in the NPRM. Analysis submitted
with this report illustrates that 600 million gallons per annum would be a reasonable target,
instead of the 180 million gallons used by the EPA. [EPA-HQ-OAR-2015-0111-1938-A2 p. 10]
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4 Butamax does not offer guidance on how to set potential El5 demand between the scope of
EPA waivers and the more restrictive list of OEM-approvals. Sales of El 5 and other mid-level
ethanol blends, consistent with regulatory requirements is an optimization exercise; market
potential can, in Butamax's view, be reasonably assessed as a combination of E10 and E85 sales.
Babcock, B. A., and S. Pouliot. "Price It and They Will Buy: How E85 Can Break the Blend
Wall." Policy Briefing Paper 13 PB-11. Center for Agricultural and Rural Development, Iowa
State University.
6 Available at
http://www.butamax.eom/Portals/0/pdf/Jan282014 Butamax Comments on EPAs_proposalfo
r the 2014 Renewable Volume Obligations.pdf
Carbon Green BioEnergy, LLC
However, the oil industry has refused to make similar investments. And, now the oil industry is
attempting to get the EPA to change the rules that were set by Congress because they refuse to
comply. In fact, the oil industry is spending millions of dollars a year spreading false information
to consumers about ethanol and then turning around and telling the EPA and Congress that the
public doesn't want to consume our fuel. The EPA simply cannot reward this behavior, and
should instead stay the course on the RVO's for 2014, 2015, 2016 and beyond. The ethanol
industry and rural America has done its part to make the RFS the most successful energy policy
in over 40 years. And we have proven through past investment and future commitments that we
can make this policy work. [EPA-HQ-OAR-2015-0111-1688-A1 p. 4]
Chevron
EPA's assumption that it may be possible to market E85 volumes as high as 600 million gallons
in 2016 under favorable pricing conditions needs to be reevaluated. EPA itself acknowledges in
the proposed rule that E85 growth has been very modest. To assume E85 volumes will
dramatically increase up to 800% from 2014 usage is unrealistic. [EPA-HQ-OAR-2015-0111-
1911-Alp. 3]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-0143, p. 174.]
EPA's forecast for additional volumes of E85 up to as much as 600 million gallons per year in
2016 are unlikely to be met. Our retailers have described their experience with E85 to be
challenging at best. When implemented, E85 has suffered from very low customer demand, due
to limited vehicle compatibility, cost, and reduced vehicle mileage, resulting in more frequent
fueling.
Clean Air Task Force
The volume of ethanol that can be safely consumed each year could grow if drivers of new-
model and/or flex fuel vehicles purchase more higher-level ethanol blends (e.g.,El 5 and E85)—
but in light of the related legal, logistical, and economic impediments, few analysts expect a
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quick or dramatic expansion in E15-E85 consumption.10 [EPA-HQ-OAR-2015-0111-1828-A1
p.4-5]
10 See, e.g., Scott Irwin and Barrel Good, E85 Pricing and Recent Consumption Trends,
FARMDOC DAILY (June 13, 2013)
(http://farmdocdaily.illinois.edu/2013/06/e85KpricingKrecentKconsumptionKtrends.html).
Clean Fuels Development Coalition and the Nebraska Ethanol Board
The petroleum industry has, in our view, completely ignored their responsibility to distribute,
blend, and dispense renewable fuels, thereby undermining the potential for increased
consumption of renewable fuels. In so doing they flaunt the law and seemingly have convinced
your agency that it is not possible to meet the requirements of the RFS. [EPA-HQ-OAR-2015-
0111-2259-A1 p.l]
We continually hear from the petroleum industry that there is no demand for higher ethanol
blends. Major oil companies proclaim they do not control demand and price of fuels. That is
preposterous. Of course they do. Demand to a large extent is driven by what is available and
offered. If they made El 5 or higher blends available and told consumers it was a high quality
product, it would clearly drive demand. They do the opposite. They do not make these fuels
available and to a large degree disavow these fuels as inferior products. [EPA-HQ-OAR-2015-
0111-2259-A1 p.2]
The agency acknowledges that refiners have not planned well for a post-El 0 world. However, to
then say biofuel producers could have done more is troubling. Our associates have produced the
renewable fuel. [EPA-HQ-OAR-2015-0111-2259-A1 p.2]
Many of our producers and distributors have in fact independently marketed E85. But this
activity is fraught with risks imposed by the petroleum industry. We are not obligated parties.
Without the consent and support of the petroleum industry, their marketing, supply and branding
requirements make the projects expensive and risky. This fact makes the latter part of the
aforementioned statement even more odd. How can investment flow to renewable fuel
production and marketing if EPA does not enforce statutory volume requirements? [EPA-HQ-
OAR-2015-0111-2259-A1 p.2-3]
Countrymark Cooperative Holding Corporation
First, the infrastructure required to dispense higher ethanol blends is prohibitive because low
sales volumes do not provide a return on investment. [EPA-HQ-OAR-2015-0111-2264-A1 p. 4]
Due to the high cost and the apparent lack of consumer acceptance/demand discussed in the next
section, our members are not currently pursuing the installation of E85 or blender pumps. [EPA-
HQ-OAR-2015-0111-2264-A1 p. 4]
15% of Country Mark branded stations sell both E10 and E85. With this infrastructure and the
high density of FFV, one would expect that E85 sales would make up a similarly high percentage
of total gasoline sales. However, based on CountryMark experience, especially the side-by-side
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comparison at retail stations that sell both E10 and E85, this is not the case. [EPA-HQ-OAR-
2015-0111-2264-A1 p. 5]
With 20% of the vehicles in Indiana being able to use E85, one would expect that the percentage
of E85 sales would be greater than the average 3.5% that we see from CountryMark data. [EPA-
HQ-OAR-2015-0111-2264-A1 p. 6]
In 2014, CountryMark sold a little over 1 million gallons or about 2.7% of the amount that would
have been expected if customers were fully purchasing E85. [EPA-HQ-OAR-2015-0111-2264-
Al p. 6]
Experience shows that even with adequate availability of E85 in the market and sufficient FFV
to use the fuel, consumers do not buy E85. In fact, E85 sales are decreasing and our members are
converting E85 pumps back to EO service. [EPA-HQ-OAR-2015-0111-2264-A1 p.7]
DENCO II
DENCO II has also devoted immense amounts of time, energy, and money into developing a
retail direct E85 program. We work closely with our local retail stations that offer E85 (85%
ethanol and 15% gasoline). We are crediting the REST value back into our E85 price to ensure the
product gets to the consumer at the lowest possible price to incentivize use. We also help them
with marketing of higher level blends such as E15, E30 and E85. We are committed to selling
higher level blends and our efforts have led to steadily increasing E85 sales as detailed below.
Other ethanol production facilities and obligated parties have dedicated resources to similar
programs and have experienced similar results. These programs have led to substantial savings
for many of the Americans who choose to use E85, E15, and E30 in their vehicles. We have
proven that with a little effort and education higher level blends can be a superior fuel option for
retailers and consumers alike. [EPA-HQ-OAR-2015-0111-1216-A2 p.2]
DuPont
Requiring additional volumes of biofuels will increase the demand for RINs incentivizing
investments inbiofuel infrastructure. [EPA-HQ-OAR-2015-0111-1826-A1 p.18]
Coinciding with the release of EPA's Proposed Rule on the 2014, 2015 and 2016 Renewable
Volume Obligations for the Renewable Fuel Standard Program, USDA Secretary Tom Vilsack
announced that USDA would "invest up to $100 million in a Biofuels Infrastructure Partnership
to support the infrastructure needed to make more renewable fuel options available to American
consumers. Specifically, USDA will administer competitive grants to match funding for state-led
efforts to test and evaluate innovative and comprehensive approaches to market higher blends of
renewable fuel, such asE15 andE85."15 [EPA-HQ-OAR-2015-0111-1826-A1 p. 19]
The deadline for applications for these grants was on July 15, 2015. As such, EPA should have
access to the data concerning these applications and able to consider these infrastructure
investments for bringing additional volumes of higher biofuels blends to market for purposes of
this rulemaking process. [EPA-HQ-OAR-2015-0111-1826-A1 p. 19]
15 USDA Press Release, May 29, 2015.
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East Kansas Agri-Energy, LLC (EKAE)
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, p. 289.]
Ethanol is good for America and changing the RFS ethanol standard is not. I've already shared
with you the significant and positive impact the ethanol industry has had on our area. It has
created jobs, reversed the economic trend of another suffering small town in rural America, and
generated income for local farm families through higher demand for their corn and nearly $50
million in dividends for shareholders. I'm sure this is a similar story to the 200+ communities
across America which are home to an ethanol plant. Due to favorable market timing, a high-
performing plant and workforce, and a healthy ethanol market, our company has been financially
successful. As a result, we are prepared to increase our capital investment in producing
renewable fuel for America ONLY IF we believe market conditions will be favorable. The
primary reason we would stop investment or divest is the lack of a long-term, stable energy
policy that ensures a healthy business environment for ethanol producers.
Energy Policy Research Foundation, Inc. (EPRINC)
For E85 to be competitive with E10, at a minimum it needs to be priced on an energy-parity
basis. Since the implementation of the RFS, E85 prices have been trending towards parity, but
nevertheless are at a premium, averaging about 84% of those of E10. However, parity pricing is
not likely to be sufficient to induce consumers to substantially increase the use of E85 as a
transportation fuel. We have substantial evidence of consumer resistance to E85 in those states
that have promoted its use. Its low energy content requires more fueling stops and its long-term
economic viability presents substantial investment risks to retail establishments considering
installing fueling pumps and tanks. While EPA might believe it can induce consumers to
purchase more E85, or other costly advanced biofuels, the price risks of actually achieving that
goal are largely unknown. [EPA-HQ-OAR-2015-0111-1946-A1 p.4]
Environmental and Energy Study Institute (EESI)
While the automotive industry, ethanol producers and farmers have proved that they can produce
sufficient feedstocks, refine fuels, and design engines to handle these fuels, fuel refineries have
not held up their end of the bargain. [EPA-HQ-OAR-2015-0111-1944-A1 p.3]
The petroleum industry and oil refineries have argued that the RFS is a failure, citing low
consumer interest in mid and higher blends. Yet, as an obligated party, it is their responsibility to
create interest and product acceptance. To say there is no consumer interest in these higher
blends when they make it difficult or impossible for consumers to access them, is a self-fulfilling
statement. [EPA-HQ-OAR-2015-0111-1944-A1 p.3]
Governor of Iowa, et al.,
The State of Iowa has consistently supported growth of the renewable fuels industry and that
strong and stable support laid the foundation for Iowa to lead the nation in ethanol and biodiesel
production. Recently the State of Iowa submitted an application for the USDA's Biofuels
Infrastructure Program (BIP) to build on the Iowa Renewable Fuels Infrastructure Program. The
new BIP-supported program, as outlined in the State of Iowa proposal, would increase blender
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pumps and E85 stations in Iowa by over 50%. In short, Iowa continues to advance consumer
access to renewable fuels, but steady growth in the volume obligation levels is the best way to
achieve improved consumer access. [EPA-HQ-OAR-2015-0111-1915-A1 p.2]
If the EPA's proposed rule stands, consumers across America would be limited in their choices
at the pump. When consumers have choices, like they do in Iowa, they choose ethanol and other
biofuels. The oil companies are preventing fuel choice in other parts of the country and
consumers lose, paying much more for fuel. The Iowa Department of Revenue tracks biofuels
sales and the data is clear - when given the choice, lowans choose biofuels. Consumer purchases
of E85 (85% denatured ethanol fuel and 15% gasoline) in Iowa continue to increase - growing
from 9.12 million gallons in 2012 to 11.15 million gallons in 2013, to 12.08 million gallons in
2014 - a growth of nearly 33% in that period according to Iowa Department of Revenue data.
Total B100 (100% biodiesel) sales in Iowa have expanded from 7.4 million gallons in 2010 to
33.3 million gallons in 2014. In 2010, the average blend level of biodiesel-blended gallons sold
in Iowa was 3.1 percent and by 2014, the average blend level had more than tripled to 9.4
percent. Big Oil does not like competition - but American consumers deserve and demand
choices at fuel pump. [EPA-HQ-OAR-2015-0111-1915-A1 p.3]
Governors' Biofuels Coalition
Bruce Babcock and Sebastien Pouliot from Iowa State University developed a model of E85
demand. They use data on the location of flex fuel vehicles and E85 fueling stations to calculate
the cost to drivers from having to drive further to find an E85 station. This cost was then added
to the fuel cost. The owners of flex vehicles were assumed to choose between E10 and E85 on
the basis of relative fuel costs and preference. The demand model shows that the existing
vehicles and existing stations could consume as much as 1.3 billion gallons of E85 in
2015. [EPA-HQ-OAR-2015-0111-1722-A1 p.4]
Growth Energy
EPA assumes that there were about 14 million FFVs in the fleet in 2014, and that this will grow
to about 16 million FFVs in 2016, though there is evidence that there could already be as many
as 17.4 million FFVs on the road today.179 And EPA assumes that there are about 3,000 E85
i&n iQi
stations nationwide. That is reasonable, as other sources provide similar estimates. Although
that means that only about 2 percent of stations offer E85, EPA correctly recognizes that "the
fraction of FFVs with access to E85 is higher than 2% since the vast majority of vehicles are
within reasonable range of more than one retail station on typical trips."182 [EPA-HQ-OAR-
2015-01 ll-2604-A2p.33]
EPA makes no effort, however, to then estimate the actual proportion of FFVs with access to
E85. It notes that //that number is 5%, then 800 mil gal of E85 could be consumed under
1 81
favorable pricing conditions. EPA does not explain its choice of 5%; the number appears to be
entirely arbitrary. [EPA-HQ-OAR-2015-0111-2604-A2 p.33]
EPA does all this without any analysis whatsoever of why 600 mil, 100 mil, or any other volume
is the right projection, and does not even explain what kind of uncertainty is driving EPA to
suggest that there is a range of possible volumes that could be distributed. This is the epitome of
arbitrary and capricious action. [EPA-HQ-OAR-2015-0111-2604-A2 p.34]
336
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Nor does EPA explain why it abandoned the approach it took in November 2013 to answer this
same question. There, EPA estimated "the fraction of FFVs that have access to E85" to be 8.6%,
based on the notion that it would be reasonable to assume that an FFV had access to E85 if one
out of four stations near it offered E85.191 This led EPA to determine that 1.3 bil gal of E85 could
be consumed per year (containing 860 mil gal of ethanol)—more than double the high-end of the
range it uses now.192 [EPA-HQ-OAR-2015-0111-2604-A2 p.34-35]
A better model that has long been available to EPA would be that of Professors Bruce Babcock
and Sebastian Pouliot. They addressed with precision the question of how much E85 could be
distributed to FFVs given current infrastructure.195 Cross-correlating a database of FFV
registrations by zip code with a database of E85 stations by zip code, they found that 55% of
FFVs were within ten miles of an existing E85 station.196 [EPA-HQ-OAR-2015-0111-2604-A2
p.35]
Stillwater explains that the 45,000 figure is very close to the amount supported by a single
dispenser using the standard rule of thumb in the industry for the relationship between dispensers
and total gasoline sales.201 In other words, assuming conservatively that every E85 station has
just one E85 dispenser, the 45,000 gal per month throughput would simply mean that this E85
dispenser would be as active as any other E10 dispenser in the station. [EPA-HQ-OAR-2015-
0111-2604-A2p.36]
Stillwater also analyzed the supply chain for E85 and found no bottlenecks. E85 tanks are
907
typically 8,000 to 12,000 gallon capacity. Stations generally receive new deliveries of fuel on
a daily basis, and can receive multiple deliveries in a single day when needed.208 Even assuming
a smaller E85 tank, a station receiving a single delivery each day could potentially receive
240,000 gal per month of E85 (8,000 gallons per day times 30 days), which is far more than
needed under Babcock and Pouliot's or Stillwater's analysis. [EPA-HQ-OAR-2015-0111-2604-
A2 p.37]
There are two principal paths by which E85 infrastructure could be expanded: (1) adding a
second E85-capable dispenser to existing E85 stations or (2) adding an E85-capable dispenser to
stations that do not currently offer E85. Given the distribution and consumption capacity of
existing infrastructure, as explained above, this expansion is unnecessary to achieve high
volumes of additional E85 consumption in 2016. But these expansion options provide another
path to achieving such volumes, and EPA's failure to consider their feasibility further
underscores the unreasonableness of EPA's proposed requirements. [EPA-HQ-OAR-2015-0111-
2604-A2 p.37]
If the station does not currently offer E85, then in addition to replacing the dispensers it would
have to do some modest underground work. [EPA-HQ-OAR-2015-0111-2604-A2 p.38]
Stillwater estimates the total conversion cost to start offering E85, including installation of the
dispenser, to be approximately $30,000.218 [EPA-HQ-OAR-2015-0111-2604-A2 p.38]
To be sure, one challenge with growing E85 infrastructure is the vise grip that the oil industry
has over stations that sell their branded gasoline—approximately half of the stations
nationwide.231 Oil refiners often contractually require distributors to sell only those branded fuels
that the refiner produces or makes available, but then the refiners rarely make available branded
337
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OQO
forms of renewable fuels like E85. Such agreements also typically preclude retailers from
offering higher-blend fuels like E85 under the branded canopy or at all.233 Should a retailer
violate the terms of its onerous agreement with an oil company, the penalties are typically
severe, including termination of the entire agreement.234 Thus, as of July 2014, independent or
unbranded stations were four to six times more likely to offer E85 than stations carrying a "Big
Five" oil brand.235 [EPA-HQ-OAR-2015-Oil 1-2604-A2 p.40]
By adhering to statutory volume requirements, EPA will properly teach obligated parties to
assume that the statutory volume requirements apply and to invest in biofuel infrastructure, as
Congress envisioned. Instead, EPA's proposal would teach obligated parties the opposite, that
recalcitrance will lead to a decreased compliance obligation. [EPA-HQ-OAR-2015-0111-2604-
A2 p.58]
179 Id. at 33,121, 33,128 & n.71; see also Air Improvements Resource, Inc., Analysis of Fleet
Percentage of 2001+ Model Year Group In Calendar Years 2014, 2015, and 2016, at 4 (July 27,
2015) ("AIR, Analysis of Fleet 2001+ Model") (attached as Exhibit 3).
180 80 Fed. Reg. at 33,121 (citing Alternative Data Fuels Center); see also 2013 Notice of
Proposed Rulemaking E85 Memorandum at 3 (relying on e85prices.com).
181 Relying on 2013 data from e85prices.com (a source on which EPA has previously relied),
Babcock and Pouliot based their analysis on 3,072 stations E85 stations. See Babcock & Pouliot,
Price It and They Will Buy, supra note 11, at 10. E85prices.com now states that there are 3,173
E85 stations.
182 80 Fed. Reg. at 33,128.
183 T ,
Id.
191 Memorandum from David Korotney to EPA Air Docket EPA-HQ-OAR-2013-0479,
"Application of one-in-four E85 access methodology to 2014," at 5 (Nov. 21, 2013) ("EPA 2013
E85 Memorandum"). EPA further assumed in this analysis that "the geographic distribution of
FFVs is consistent with the geographic distribution of service stations." Id. at 1.
1 Q9
See id. at 5. Although EPA calculated this number in 2013 as available distribution capacity,
it then discounted this figure significantly because it was improperly seeking to project how
much E85 would be consumed without the mandate. See 78 Fed. Reg. at 71,762 (calculating
"proposed mean volume of 180 mill gal for E85"). EPA now admits that this discounting was
erroneous, see 80 Fed. Reg. at 33,117 (recognizing that "the approach we took in the November
2013 NPRM underestimated achievable volumes"). But rather than following the natural result
of this concession and using its previously calculated 1.3 bil gal distribution capacity, it now
simply ignores that it ever calculated this number at all.
195 See Babcock & Pouliot, Price It and They Will Buy, supra note 11; Bruce A. Babcock and
Sebastien Pouliot, "Impact of Sales Constraints and Entry on E85 Demand" (Aug. 2013), at
http://www.card.iastate.edu/publications/dbs/pdffiles/13pbl2.
196 See Babcock & Pouliot, Price It And They Will Buy, supra note 11, at 9-10 (calculating that 8
million out of 14.6 million FFVs at the time were located in zip codes with a geographic center
within 10 miles of an E85 station).
201 Still water Associates, Infrastructure Changes and Cost to Increase RFS Ethanol Volumes
through Increased El 5 andE85 Sales in 2016, at 12 (July 27, 2015) ("Stillwater Study")
(attached as Exhibit 4).
207 Mat 6.
338
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208 Mat 16.
218 Stillwater Study at 14 (attached as Exhibit 4).
231 See, e.g., Elizabeth Douglas & Gary Cohn, Refiners Maintain a Firm but Legal Grip on
Supplies, L.A. TIMES, June 18, 2005 ("[DJeclining station count has weakened competition and
made it easier for the state's major oil companies to impose their will on gas station owners,
down to the profit earned on each gallon sold, dealers contend."), at
http://www.latimes.com/news/la-fi-calgasl8junl 8,0,3198403. story?page=l.
232 Mat 4.
fyr\r\
See Clean Fuels Foundation, E85 and Blender Pumps: A Resource Guide to Ethanol
Refueling Infrastructure, at 23 (2011) ("[FJranchise agreements generally do not allow the sale
of ethanol blends other than 10% or 85% by volume."), at http://www.ffv-
awareness.org/docs/llCFDC-004 Pump Brochure Indv.pdf.
OQ .1^=^=
Renewable Fuels Association, Protecting the Monopoly, supra note 149, at 10.
235 See id. at 1. The "Big Five" oil companies are BP, Chevron, ConocoPhillips, ExxonMobil,
and Shell.
Hermes Consolidated, LLC dba Wyoming Refining Company
We agree with CountryMark's point that E85 and BED cannot be relied upon to promote higher
renewable fuel use. When changing consumer choice is a necessary requisite for success,
Government's ability to implement policy is, at best, extremely limited and even less so when
parties who can achieve that policy have no legal obligation to do so. [EPA-HQ-OAR-2015-
0111-2487-A1 p. 1]
HollyFrontier Corporation
Additionally, if proposed 2016 volumes are finalized on November 30, 2015, there will be only
one month remaining prior to the rule's effective date. That short window does not provide
sufficient time for E85 infrastructure to come online which may or may not increase ultimate use
of E85, and is an unrealistic time frame for industry to make investment decisions. [EPA-HQ-
OAR-2015-0111-2257-A1 p.2]
Illinois Farm Bureau
Another option is E85. More than 17 million flex-fuel vehicles are on U.S. roads today.
Unfortunately, the United States is only utilizing 2 to 3 percent of its current E85 capacity. The
issue with E85 acceptance by consumers has always been its price competitiveness relative to
conventional gasoline, but as was shown in Table 1, D6 RIN values are being used to cut the
price of E85 at the pump, encourage higher sale volume and thus provide greater volume demand
for ethanol itself. [EPA-HQ-OAR-2015-0111-3290-A2 p.3] [Table 1 can be found on p. 2-3 of
Docket number EPA-HQ-OAR-2015-0111-3290-A2]
Independent Fuel Terminal Operators Association (IFTOA)
II. E85
EPA has said that it wants future mandates to drive the market to make significant changes by
expanding infrastructure and modifying fuel prices to provide incentives for the production and
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use of renewable fuels. In particular, EPA seems to be assuming that efforts to increase the use
of ethanol beyond the blendwall will be primarily a function of the volume of E85 that is
consumed. [EPA-HQ-OAR-2015-0111-1947-A1 p. 3]
EPA explains in the Preamble that if it proposes high volume mandates, RIN prices are likely to
be higher than historical levels, and such RIN price increases are expected to help promote
growth in renewable fuel supply. In addition, EPA explains that high RIN prices can provide the
potential for reductions in the retail selling price of E85 and E15 if distributors, blenders, and
retailers pass the value of those RINs on to end users. [EPA-HQ-OAR-2015-0111-1947-A1 p. 3]
Indeed, if faced with ambitious mandates, industry will likely be forced to make some of the
infrastructure investments and price modifications that EPA has suggested, thereby allowing
parties to meet their obligations under the RFS Program. However, those market changes come
with a cost. On the one hand, these investments and price reductions for E85 may help some
consumers overcome their objections to using that product - lower energy content, less
efficiency, and greater cost. On the other hand, and more significantly, if industry reduces the
price of E85 to meet the mandates, it will be forced to recover those costs on sales of El 0 - the
primary fuel used by most consumers. It is not at all clear how much this "cross-subsidization"
would cost and what impact it would have on the national economy. [EPA-HQ-OAR-2015-0111-
1947-A1 p. 3-4]
It appears that under this approach to establish ambitious standards, EPA has analyzed only one
portion of the transportation pool - E85 - and has ignored the impact on the larger portion -
E10. In addition, this analysis is based on the notion that renewable fuels, on an energy-
equivalent basis, will cost less than the petroleum-based fuels they are replacing. However, the
price of renewable fuels is affected by many factors such as the price of corn, which, in turn, is
impacted by weather. Thus, if renewable fuels cost more on an energy-equivalent basis than the
petroleum fuels they displace, there is a cost to using these renewable fuels. The higher the
required volume of these fuels, the higher this cost will be. [EPA-HQ-OAR-2015-0111-1947-A1
p. 4]
Recommendation: EPA should take a broader view and analyze the full impact of its proposed
actions on consumers and the economy. It should not establish the 2016 and future mandates by
focusing primarily on increasing the production and use of renewable fuels. [EPA-HQ-OAR-
2015-0111-1947-A1 p. 4] Specifically, the Association recommends the following: [EPA-HQ-
OAR-2015-0111-1947-A1 p. 8]
3. EPA's expectation that the market will reduce the price of E85 so that it can meet future
ambitious targets is short-sighted. Industry can artificially reduce the price for E85, but such
action will unfairly and substantially raise the price of E10 - the primary fuel used by most
consumers. [EPA-HQ-OAR-2015-0111-1947-A1 p. 8]
Indiana Farm Bureau
Furthermore, a significant reduction in the 2015 and 2016 volume requirements would slow or
halt investments in the infrastructure needed to distribute and dispense larger volumes of ethanol,
a key and unjustified reason that the EPA provides for reducing the RFS due to lack of
340
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availability of higher ethanol blends. In Indiana alone, there are over 200 gas pumps offering
E85. [EPA-HQ-OAR-2015-0111-2486-A1 p.2]
Another option is E85. More than 17 million flex-fuel vehicles are on U.S. roads today; however,
the United States is only utilizing 2 to 3 percent of its current E85 capacity. The issue with E85
acceptance by consumers has always been its price competitiveness relative to conventional
gasoline, but as was shown in Table 1, D6 RIN values are being used to cut the price of E85 at
the pump, encourage higher sale volume and thus provide greater volume demand for ethanol
itself. [EPA-HQ-OAR-2015-0111-2486-A1 p.4]
Farm Bureau believes that the ethanol blend wall can be overcome. In fact, the means of
overcoming it are already in place with the RFS2. RFS2 volume mandates and RIN prices are
working as intended to provide incentives for the production and use of higher ethanol blends.
The petroleum industry's unwillingness to offer higher blends must not be taken as evidence that
the RFS2 is unworkable. Rather, it is evidence that they are unwilling to cede market share to an
alternative fuel. But making space in the market for alternative fuels that contribute to energy
independence, environmental improvement, and economic development is exactly the point of
RFS2. And it is working. There is thus no need to roll back volume requirements in the Proposed
Rule. [EPA-HQ-OAR-2015-0111-2486-A1 p.4]
Iowa Corn Growers Association (ICGA)
Elimination of the incentive to invest in infrastructure. EPA's proposal would let oil
companies off the hook from the requirement to blend amounts of ethanol above the "blend
wall" in 2014-2016. As a result, RIN prices would continue to fall and the financial incentive to
expand E15, MLB and E85 infrastructure would be virtually eliminated. The intent of the law
was to do just the opposite and require additional infrastructure investments be made. In
addition, Iowa Corn is making personal significant commitments to programs that build out
pump infrastructure in Iowa. [EPA-HQ-OAR-2015-0111-1820-A1 p. 6]
Iowa Renewable Fuels Association
This restriction on competition is not the result of consumer preference, equipment availability,
or renewable fuel supply. Iowa retailers have had great success with higher ethanol blends like
El5 and E85, when they are allowed to sell it. Customer demand is high. Contrary to the
blatantly false claims that a blend wall exists, even more motorists would buy El 5 and E85 if it
were just available for them to choose. [EPA-HQ-OAR-2015-0111-1957-A2 p. 10] Further, it
has been suggested that offering higher blends like El5 and E85 is a costly endeavor for
retailers. Yet a review of retailers around Iowa (and likely the U.S. as well) shows that it is often
the small "ma and pa" stations that are providing the option of higher blends to their customers.
On average, these stations should be the least likely to make a risky and expensive investment. If
Sparky's One Stop in Bayard, Iowa (population 458) can offer its customers E85, why can't
large retailers in large cities? It might have much less to do with "cost" than it does with what
brand a retailer flies. [EPA-HQ-OAR-2015-0111-1957-A2 p. 11] Fuel Time in St. Ansgar, Iowa
takes advantage of low-priced E85 in its blender pump to offer E10, E15, E30, and E85. They
also offer EO (no ethanol) to their customers. Even with 10% of their sales going toward EO, their
average ethanol content is 34.6 percent. [EPA-HQ-OAR-2015-0111-1957-A2 p. 12] Fast Stop in
Cresco, Iowa offers five levels of ethanol blends through its blender pumps with an average
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ethanol content of 43.5 percent. Five Star Coop reported that its three blender pump locations
averaged an ethanol content of 23.7 percent. These three cases studies are representative of Iowa
blender pump stations. All not only exceed the 2016 statutory RFS level, but the 2022 RFS level
as well. (Details provided in Attachment E) [EPA-HQ-OAR-2015-0111-1957-A2 p. 12]
[Attachment E can be found on p. 47-48 of docket number EPA-HQ-OAR-2015-0111-1957-A2]
You would be hard pressed to find a retailer with a blender pump offering El 5 and E85 not
meeting that level today. If they also offer biodiesel blends, their own "station RFS" would be
even higher. There is no blend wall. There is only a lack of consumer access to higher ethanol
blends - a challenge the RFS was specifically implemented to remediate. [EPA-HQ-OAR-2015-
0111-1957-A2]
Marathon Petroleum Company
We support the EPA assessment that the E10 blendwall is real and that the obstacles to the sale
of large volumes of El 5 and E85 are significant enough for those products to be considered non-
viable solutions. [EPA-HQ-OAR-2015-0111-1932-A1 p. 1]
In addition, the EPA should consider ethanol consumed in E85 separately from other ethanol
blends and the agency should use historical demand for E85, not optimistic projections. [EPA-
HQ-OAR-2015-0111-1932-A1 p. 3]
The EPA needs to use E85 demand volumes that are in line with historical and EIA projections
not inflate figures that are necessary to make its aspirational projections for biofuel demand to
work. [EPA-HQ-OAR-2015-0111-1932-A1 p. 4]
Miller, Denis
Big oil also alleges that there is no consumer demand for E85 or the mid-level mix of ethanol at
their stations. However, I believe that much of this has been created by big oil's policies, an
attempt to discourage finding or using the mid-levels or E85.1 will give two examples.
I recommend a requirement that franchisees of big oil be allowed to pick one third to one half of
the available pump options on the pumps, and the remaining could be dictated by big oil. This
will allow the local retailer to sell the market he thinks that would be best for his business and
not allow big oil to force him to use products clearly designed to limit the options that citizens
may want to use.
Minsk, Ronald
Tellingly, what happened in Minnesota, the state with most stations selling E85,5 tracked Knittel
et al.'s findings—as RIN prices rose in early 2013, the number of stations selling E-85 declined.6
Reviewing this data leads me to concur with Knittel et al.'s conclusion that the RINs market is
simply not functioning as it should. [EPA-HQ-OAR-2015-0111-1307-A1 p.3]
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5 Department of Energy, Alternative Fuel Data Center, E85 Fueling Station Locations by State,
available at http://www.afdc.energy.gov/data/10367.
Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
2. EPA has overestimated E85 usage for 2016.
Because EPA cannot expect high RIN prices to incent meaningful E85 growth in 2016, it should
assume no more than 100-200 million gallons of E85 usage in 2016. EPA concluded in the
NPRM that the market produced about 130 million gallons of E85 in 2013, and that E85 and E15
usage was "only about 100-200 million gallons" in 2014. Yet EPA did not provide any evidence
to support these estimates and, as explained below, production data on which EPA has
previously relied suggest that EPA has significantly overstated E85 consumption in past years.
[EPA-HQ-OAR-2015-0111-2603-A2, p. 29]
EPA identified two EIA data sources to support E85 estimates and projections in connection with
the original 2014 NPRM (although not even these sources supported those estimates and
projections). Revisiting those data sources reveals production of 50.3 million gallons in 2012,
64.6 million gallons in 2013, and only about 76.5 million gallons in 2014. Production thus grew
annually by only 18 to 28 percent over the last 30 months, despite high RIN prices, and
production has not yet reached the 100 million gallon mark in any year. The data also reflect
two-year growth (2012-2014) of only 52 percent. However, to reach the levels of E85 usage
assumed in twelve of the sixteen compliance scenarios that EPA has identified in the NPRM,
production would have to jump from 2014 levels by between 161 to 684 percent (i.e., from 76.5
million gallons to 200-600 million gallons). E85 production in 2015 has also remained low.
Year-to-date E85 production data for 2015 show that E85 production during the first four months
reached only 21.34 million gallons, as compared to 21.42 million gallons over the same period in
Qf\
2014. In other words, E85 production has actually decreased from 2014 levels. Even if
production improves over the remaining quarters, so that 2015 production increases by an
aggressive 25 percent over 2014 levels (i.e., about 95.6 million gallons in 2015), E85
consumption would still need to more than double in 2016 to reach 200 million gallons.81 There
is no empirical foundation for projecting such significant growth. [EPA-HQ-OAR-2015-0111-
2603-A2, pp.29-30]
Moreover, even taking EPA's higher numbers on faith and assuming that the economy consumed
about 160 million gallons of E85 in 2014,82 the resulting growth rate between 2013 and 2014
was only about 23 percent. Applying that growth rate over the next two compliance periods
yields only about 197 million gallons of E85 in 2016, still well below what EPA assumes in half
of its compliance scenarios for 2016. Of course, that growth rate ignores the low end of EPA's
2014 range, which, if used, would imply a negative growth between 2013 and 2014, and would
undermine any suggestion that the economy could consume 200 million gallons in 2016. [EPA-
HQ-OAR-2015-0111-2603-A2, p.30]
80 U.S. Energy Info. Admin., U.S. Renewable Fuel & amp; Oxygenate Plant Net Production of
Finished Gasoline, http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=
343
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M_EPMOF_YNP_NUS_MBBL&f=M (last visited July 22, 2015); U.S. Energy Info. Admin.,
U.S. Refinery and Blender Production of Motor Gasoline, Finished, Conventional, Greater than
Ed55,
http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M_EPMOCAG55_YPR_NUS_M
BBL&f=M (last visited July 22, 2015).
O 1
State-level data from Minnesota further demonstrate that E85 usage remains low, with only
modest overall growth in the past two years. Because Minnesota has the highest concentration of
E85 sales in the country, it should experience the most significant per capita growth in E85.
However, estimated E85 sales volumes of 18.12 million gallons in 2013 represent modest annual
growth of about 23 percent compared to 2012 estimated volumes (sales reported in the
Minnesota Dept of Revenue Petroleum Collections Report ("MNDDR") were lower, at only 13
million gallons in 2013). Minn. Dep't of Commerce, 2015 Minnesota a E85 + Mid-Blends
Station Report, http://mn.gov/commerce/energy/images/2015-05may-e85.pdf Estimated E85
sales then decreased in 2014 to about 16.5 million gallons, even with persistently high RIN
prices (MNDDR reported sales equaled only 13.4 million gallons, reflecting very modest annual
growth). See id. Sales figures for the first five months of 2015 reflect modest year-over-year
growth from 2013 levels (estimated and MNDDR consumption declined 1.4 percent, and
increased 33.6 percent, respectively), and significant negative growth from 2014 levels
(estimated and MNDDR consumption fell by 18.4 and 5.6 percent, respectively). See Minn.
Dep't of Commerce, 2014 Minnesota a E85 + Mid-Blends Station Report, http://mn.gov/
commerce/energy/images/2014_12DecE85.pdf; Minn. Dep't of Commerce, 2013 Minnesota a
E85 + Mid-Blends Station Report, http://mn.gov/commerce/energy/images/E85-2013.pdf
oa
EPA estimates E15 usage at 40 million gallons in 2014. While the Merchant Refiner Group
takes no position on the accuracy of those figures, it deducts that volume here from EPA's 100-
200 million gallon range for El 5 and E85 to arrive at its 160-million gallons example for E85.
National Taxpayers Union (NTU)
Not only are few consumers able to utilize E85 - the blend that the EPA anticipates will help
alleviate the glut of ethanol created by the rule - only 2 percent of gas stations can provide the
fuel. This paucity is directly related to the cost of upgrading those facilities, which can run as
high as $200,000. The small business owners who run most gas stations operate on very thin
margins and cannot afford such an investment, especially when the return is so uncertain. El 5
faces similar demand and infrastructure problems. [EPA-HQ-OAR-2015-0111-3279-A1 p. 1-2]
Together, these factors severely limit the potential market for higher blends of ethanol and make
it unlikely that there will be a dramatic increase in demand for ethanol in less than six months.
Exceeding the blend wall poses a threat of heavier burdens on consumers as refiners will be
forced to scale back production. After all, the ethanol blend is only suitable for fuel consumed in
the U.S., leaving refiners with much less flexibility in absorbing the financial effects. [EPA-HQ-
OAR-2015-0111-3279-A1 p.2]
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Nestle
According to press accounts, refiners doubt it will be possible to meet the increment beyond 10%
through sales of E85 and, still less, El 5. This would seem to imply the need for obligated parties
to purchase surplus Renewable Identification Numbers (RINs) in order to comply with their
assigned use of renewable fuels. Such an approach is likely not sustainable over the long haul.
[EPA-HQ-OAR-2015-0111-1918-Alp.2]
NH Energy Forum
The current proposal calls for increasing amounts of ethanol to be blended into gasoline for fuels
like E85 and El5 for which there is no significant consumer demand- nor the infrastructure in
areas such as mine, to allow consumers to fuel their cars. [EPA-HQ-OAR-2015-0111-0282-A1
p.l]
Petroleum Marketers Association of America (PMAA)
E-85 sales do not justify the capital costs for infrastructure even with generous grants from
federal and state governments. [EPA-HQ-OAR-2015-0111-1197-A1 p.3]
Phillips 66 Company
According to EIA data, the nationwide E85 volume in 2014 was 76.5 million gallons. [EPA-HQ-
OAR-2015-0111-2039-A1 p.3]
Although consumers might increase their use of E85 if offered aggressive, discounted pricing,
there are still other significant barriers that would continue to constrain demand. [EPA-HQ-
OAR-2015-0111-2039-A1 p.3]
However, for the approximate 150,000 existing stations, retrofitting the station so that the
equipment meets all legal requirements is a major undertaking. PMAA stated in a recent letter to
Representative Upton, that they stand by their $200,000 cost estimate for UST equipment
replacement. The station owners may find this cost-prohibitive. [EPA-HQ-OAR-2015-0111-
2039-A1 p.4]
Forecast FFV sales, according to EIA in the 2015 Annual Energy Outlook, remain basically flat
over the next several years. FFV production incentives are phasing out in the future as a result of
the new NHTSA/EPA CAFE/tailpipe GHG requirements. [EPA-HQ-OAR-2015-0111-2039-A1
p.4]
The combination of these issues is likely to continue to constrain E85 demand over the next
several years. Without any significant increase in E85, attaining the mandated volumes for 2016
would then rely on over-compliance on biomass-based diesel. [EPA-HQ-OAR-2015-0111-2039-
Al p.4]
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Poet, LLC
Edgeworth Economics has determined through modelling that, under reasonable assumptions, it
would be readily achievable for the market to consume 600 million to approximately 1.1 billion
gallons of ethanol in E85, at RIN prices of $0.80 to $1.45, in 2015 and 2016.47 [EPA-HQ-OAR-
2015-0111-2481-Alp.l4]
The challenges EPA cites as a basis for reducing the Base Renewable target are largely of
obligated parties' own making, as they have spent years refusing to invest in renewable-fuel
distribution infrastructure, and suing EPA over RFS standards, precisely to try to entrench the
E10 blendwall in hopes that EPA would waive the volume requirements. [EPA-HQ-OAR-2015-
0111-2481-A1 p.20]
Despite their best efforts to promote biofuels, ethanol producers are not in a position to force
their customers (the obligated parties) to distribute biofuels in higher quantities. [EPA-HQ-OAR-
2015-0111-2481-Alp.21]
47 See Edgeworth Economics, Impact of the RFS Mandate on Motor Fuel Volumes and Prices,
2014-2016 (July 2015) (Attachment 1 hereto to POET comments). [Attachment 1 can be found
in docket number EPA-HQ-OAR-2015-0111-2481-A2.]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EP A-HQ-OAR-2015-0111-1044, p. 199.]
With this rule, there remains little to no incentive for the obligated parties that control 50 percent
of the retail supply chain to make investment in new blending equipment.
Protec Fuel
The EPA has used 2013 actual data regarding infrastructure and pricing to project E85 demand
for 2014 at between 100 to 300 million gallons. In so doing, the EPA has provided obligated
parties, which would rather be selling fossil fuels, a roadmap for how to prevent further growth
of the renewable fuel industry. [EPA-HQ-OAR-2015-0111-1194-A1 p.l]
The EPA's proposed rule signals to fossil fuel providers that if prices for E85 specifically can be
kept above the level that would encourage use, historic consumption for E85 will be used to
project demand and reduce total renewable fuel volumes for following years. [EPA-HQ-OAR-
2015-0111-1194-Alp.l-2]
Based on Protec's experience, the cost of installing E85 infrastructure at one of four stations is
trivial and can easily be supported by the obligated parties. This cost should be assumed by
obligated parties to encourage installation of infrastructure. Even if historic demand for ethanol
blends were a factor to be considered in setting the total Renewable Fuel volumes, API and its
members should not be heard to complain about the blend wall until they have done what is
necessary to encourage consumer adoption. [EPA-HQ-OAR-2015-0111-1194-A1 p.5]
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If large oil companies did not contractually require a branded station owner to sell the 3 grades
of fuel, many, if not most, retailers would elect to sell regular gasoline and E85 only. The sales
from E85fuel would far exceed the sales from premium and mid grade fuel sales combined.
[EPA-HQ-OAR-2015-0111-1194-Alp.6]
The API insinuates that only 100 +/-- E85 stations get converted/built each year and numerous
close down due to the economics. In the real world and being in the market first hand, this lack
of growth is more due to the oil companies having a strangle hold on retail branded stations and
presenting "behind the scene" challenges, then on infrastructure equipment itself or the business
economics. [EPA-HQ-OAR-2015-0111-1194-A1 p.6]
The API states that 95% of the retail stations are owned by small businesses. This is most likely
accurate. However, what is not mentioned that these small businesses are branded a major oil
brand, where they are contractually obligated to purchase and sell the branded fuel product.
Being small businesses, they are more entrepreneurial spirited and would love an opportunity to
increase product offerings at their business, it's the branded oil companies that prevent E85 and
E15 being able to be sold at the station. [EPA-HQ-OAR-2015-0111-1194-A1 p.6]
Since the business of Protec is to work with gas station owners to add E15/E85 pumps to their
stations, we see every day what the obligated parties do to discourage the adoption of higher
ethanol blends. While these actions may not be illegal and are logical actions that an obligated
party would want to leverage their high fossil fuel content blends over E15/E85, it is not
surprising that demand has not been at a level consistent with the volume requirements of the
RFS. [EPA-HQ-OAR-2015-0111-1194-A1 p.6]
Renewable Fuels Association (RFA)
According to the Department of Energy, 17.4 FFVs capable of operating on blends up to E85
were "on U.S. roads" as of December 2014.50 Assuming 2015 FFV production and sales levels
are consistent with 20123-2014 rates, approximately 19.5 million FFVs will be on the road by
the end of 2015. Accordingly, the current fleet of FFVs alone is capable of consuming roughly
8.7 billion gallons of ethanol annually (11.7 billion gallons of E85).51 [EPA-HQ-OAR-2015-
0111-1917-A1 p. 30]
50 DOE Alternative Fuels Data Center, Flexible Fuel Vehicles, available at
http ://www. afdc. energy .gov/vehicles/flexible_fuel .html
51 Assumes average annual fuel consumption per vehicle is 600 gallons. Assumes E85 average
ethanol content of 74%.
Small Refinery Owners Coalition
To meet the total renewable fuel volume for 2016, for example, EPA concedes that the market
would need to respond by expanding infrastructure for distribution and consumption of higher
renewable fuel blends. EPA has no basis to make that determination. EPA lacks any special
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expertise or knowledge on whether the number of capital projects that it would take to expand
infrastructure to meet the 2016 volumes could be undertaken, let alone concluded, in the several
months between November, when the rule is finalized, and the 2016 compliance year begins.
[EPA-HQ-OAR-2015-0111-2339-A1 p. 21]
Society of Independent Gasoline Marketers of America (SIGMA) and the National
Association of Convenience Stores (NACS)
To date, very few retailers that sell mid-high ethanol-gasoline blends such as El5 or E85 have
seen substantial sales of these products. Quite the opposite, most retailers that sell El 5 or E85
have yet to see substantial sales of these products. Indeed, even consumers with flex-fuel
vehicles that are compatible with E85 tend to purchase E10. [EPA-HQ-OAR-2015-0111-1937-
Al p.4-5]
Although E85 can be sold for less dollars-per-gallon than the more widely available E10, this
price differential does not generate sufficient demand to justify the investment. Because E85
provides vehicles fewer miles per gallon ("MPG") than E10, it must be sold at a discount in
order to be priced equal to gasoline on a dollar per British Thermal Unit (BTU) basis. Even if
E85 is sold on an equal dollar per BTU basis as E10, for E85 to infiltrate the market on a more
widespread basis, there likely would have to be an additional discount to justify consumers
having to stop and purchase the product more frequently relative to E10. The economics are
simply not present in most places in the United States for this level of price discounting and
market infiltration to occur. [EPA-HQ-OAR-2015-0111-1937-A1 p.5]
Retailers who wish to sell any gasoline containing more than 10% ethanol (such as E15 or E85)
must acquire a new dispenser that has been listed as compatible with the product if they have not
purchased new dispensers in the last five years. Dispensers can cost upwards of $20,000 and
many retailers are understandably disinclined to dispose of functional and modern dispensers in
order to sell a new fuel for which demand is at best uncertain.4 [EPA-HQ-OAR-2015-0111-
1937-A1 p.6]
4 The two primary device manufacturers (Gilbarco and Wayne-GE) have obtained UL listing for
retrofit kits for some of their units to upgrade their compatibility to accommodate fuels
containing up to 25% ethanol. These units are currently available for $2,000 - $4,000 per kit and
may be available for more than 50% of the dispensers in the market. This reduces the costs for
many retailers, but the expense still equates to nearly 10% of a store's annual pre-tax income - a
significant risk given uncertain consumer demand.
State of Nebraska
Ethanol has gained acceptance among Nebraska consumers. Proof of this was evident at a series
of recent ethanol promotions sponsored by an Omaha convenience store chain, with flex-fuel
vehicle drivers waiting in line for 45 minutes to fill up with E-85. To help satisfy this demand,
Nebraska recently enacted legislation to commit state resources to expand access to clean-
burning motor fuels. Additionally, Nebraska is one of over 20 states that applied earlier this
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month to the U.S. Department of Agriculture Farm Service Commodity Credit Corporation's
$100 million grant opportunity dedicated to growing the ethanol infrastructure. The EPA's
proposal to decrease volume requirements undermines these efforts. [EPA-HQ-OAR-2015-0111-
1810-Alp.l-2]
The Valero Companies
"Working with vehicle manufactures to increase the number of Flex Fuel Vehicles (FFVs) in the
fleet"
This option will have no impact on 2016 E85 consumption and doubtful impact in the next
several years. Furthermore, individual refiners do not have sufficient market power or the
requisite vehicle manufacturing business expertise to work with vehicle manufacturers to
increase the number of FFVs in the market. [EPA-HQ-OAR-2015-0111-2765-A1 p.22]
Only a small fraction of refiners own retail stations. Even if individual refiners gave grants or
covered the cost of installing equipment at retail stations, that alone would not increase the
volume of renewable fuel entering the fuel market. The market for renewable fuel is influenced
by other factors as EPA already acknowledges. [EPA-HQ-OAR-2015-0111-2765-A1 p.23-24]
EPA's rationale appears to imply that contractual mechanisms among various parties can
somehow make the gasoline fuels market uniformly lower the price of El 5 and E85 relative to
E10, thus ensuring greater overall market uptake of higher ethanol-blended fuels. EPA's
rationale for this option appears to be based entirely on conjecture and the option is unsupported
by any analysis in the proposed rule. [EPA-HQ-OAR-2015-0111-2765-A1 p.24]
Individual refiners do not have sufficient market share to change the price of renewable fuels.
Antitrust laws prohibit refiners from working together on pricing strategies. [EPA-HQ-OAR-
2015-0111-2765-A1 p.24]
Union of Concerned Scientists
Our specific recommendations include:
Provide stable policy support for ethanol blends beyond 10% ethanol. [EPA-HQ-OAR-2015-
0111-2260-A1 p.2]
Addressing the infrastructure constraints and market access issues that complicate the sale of
higher ethanol blends is critical to the long term success of the RFS. However, we recognize that
overcoming these challenges requires actions that go beyond the present RFS proposal, and
indeed that efficient and cost effective use of higher ethanol blends will require action from
stakeholders in other parts of the federal government, state regulators, and private sector parties
in the automobile, fuel production, refining, distribution and retail industries. But while the
present rule alone cannot resolve the blending challenges, a balanced and stable path forward can
make a significant contribution. In particular, we believe the approach EPA articulated in the
proposal should clearly communicate to market participants that EPA intends to balance stability
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in fuel markets with a concerted regulatory push that will allow RIN markets to provide
significant support for additional biofuel use. [EPA-HQ-OAR-2015-0111-2260-A1 p.6]
One of the biofuel market dynamics that has emerged clearly over the last few years is the
competition between BED and E85 to provide compliance for advanced and renewable mandates
that cannot be met within E10 blends. This competition has been illuminated by several studies
from Scott Irwin at the University of Illinois published on FarmDocDaily. In light of this
competition between E85 and BED, it seems likely that absent exercise of general waiver
authority, a 2016 renewable mandate of 18 Bgal (the statutory minimum) plus the cellulosic
volume, would result in a dramatic increase the use of biodiesel rather than steady progress on
availability and competitive pricing of higher ethanol blends. As discussed earlier, the supply of
BED is already straining to meet the non-cellulosic advanced mandate, and is clearly insufficient
to increase by a further 667 Mgal to make up for the missing 1 Bgal worth of D6 RINs that
would be required absent exercise of general waiver authority. Such a dramatic increase in the
use of biodiesel would be destabilizing and not supportive of steady growth of fuel production
and distribution capacity over time. In this sense, the availability of additional corn ethanol in the
US is irrelevant if the markets will not support its use as fuel. [EPA-HQ-OAR-2015-0111-2260-
Al p.6]
Thus EPA is justified in using the inadequate supply argument to reduce the 2016 mandate,
although it is the supply of BED rather than ethanol that is inadequate. EPA should determine
the extent of the general waiver to support the maximum realistic potential use of ethanol in
various blends while limiting spillover that increases demand for BED and other biofuels beyond
available supplies (taking feedstocks into consideration). This should provide fuel market
participants the assurance that as infrastructure to distribute ethanol at cost effective prices is
deployed, EPA will administer the RFS standards in a manner that supports the sale of these
higher blends. EPA's arguments and analysis are generally sound, and quantitatively the
proposal seems quite aggressive in its support for higher ethanol blends. [EPA-HQ-OAR-2015-
0111-2260-A1 p.6] While EPA's 2016 proposal for the RFS balances stability while providing
support higher blends, progress on higher blends over the long term will require coordination of
car-makers, gas stations and numerous private sector actors and government agencies. No single
industry or regulatory body can resolve this challenge by itself, but government has an important
role to play coordinating this process and keeping changes focused on cutting oil use and
emissions. We urge EPA to seek opportunities to lead or participate in multi-stakeholder
processes to develop a fuel and vehicle infrastructure that steadily evolves to meet long term
climate and oil saving goals. [EPA-HQ-OAR-2015-0111-2260-A1 p.6]
Response:
The RFS program does not specify which renewable fuels are required, or in what form, beyond
the fact that there are four separate but nested volume requirements. Rather, the standards set
under the RFS program allow for a broad array of renewable fuel types to be used to meet the
requirements, with market ultimately determining the best means of increasing renewable fuel
volumes to comply with those standards. We acknowledge that in determining the level to which
we should waive the 2016 statutory targets, EPA must evaluate the volume of ethanol that could
be supplied in 2016. However, this was done in the context of an assessment of supply of all
renewable fuels, including non-ethanol renewable fuels that can be achieved by a marketplace
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that is responsive to the standards we set. Many stakeholders, however, have largely based their
positions on the appropriate level of the 2016 total renewable fuel volume requirement wholly on
whether and to what degree E85 volumes can increase in 2016, and these commenters typically
also expressed opinions on whose responsibility it is to ensure that increases in E85 use occur.
Many stakeholders decried obligated parties' failure to invest in the infrastructure needed to
permit expanded use of higher ethanol blends such as E15 and E85. They argued that EPA
should not reward obligated parties for their recalcitrance by reducing the applicable volume
requirements below the statutory targets. In taking these positions, these stakeholders cited both
the statutory requirement that obligations be placed on "refineries, blenders, and importers, as
appropriate" and EPA's regulations which (with limited exceptions) further narrow the
applicability of the obligations to producers and importers of gasoline and diesel. Suggestions in
the NPRM that renewable fuel producers could contribute to efforts to expand infrastructure
were generally met by these stakeholders with references to the statutory language and their
belief that all responsibility for investing in expanded infrastructure rests on obligated parties.
The statutory language, in combination with the regulatory structure, generally places the
responsibility on producers and importers of gasoline and diesel to ensure that transportation fuel
sold or introduced into commerce contains the required volumes of renewable fuel. Obligated
parties have a variety of options available to them, both to increase volumes in the near term
(i.e., through the period being addressed by this final rule) and in the longer term. The standards
that we are establishing today reflect both the responsibility placed on obligated parties as well
as the short-term activities available to them, and we also expect obligated parties to be taking
actions now that will help to increase renewable fuel volumes in future years. However, this
general responsibility does not require obligated parties to take actions specific to El5 and/or
E85 infrastructure, as the RFS program does not require any actions specific to El5 or E85, and
in fact does not require any actions specific to ethanol at all. Moreover, we do not believe the
statute should be interpreted to require that refiners and importers change the fundamental nature
of their businesses so as to comply with RFS requirements, as this would be a far-reaching result
that Congress can be expected to have clearly specified if it was intended. For example, to the
extent that commenters imply that refiners should be required to build or purchase renewable
fuel production facilities, take ownership of retail stations, produce or sell cars capable of using
high-ethanol blends, or plant cropland to provide feedstock for increased renewable fuel
production, we would disagree, since they would then be engaging in business practices other
than those directly relevant to their position as a "refiner, importer, or blender" as specified in the
statute. Rather, if other parties engaged in these activities fail to increase their activities to allow
statutory volume targets to be met, we believe the result is an inadequate domestic supply of
renewable fuel that justifies granting a waiver pursuant to 21 l(o)(7)(A). The primary role that
obligated parties play in the RFS program is to acquire RINs, and it is this demand for RINs that
in turn drives demand for renewable fuel and which should stimulate other parties to increase
their activities to supply it. In so doing, obligated parties provide the funding (recouped through
higher petroleum fuel prices) to subsidize renewable fuel prices so that the market is incentivized
to expand renewable fuel supply.
Nevertheless, there are actions that obligated parties can take that are more directly related to
their roles as importers and refiners, such as investing in or otherwise influencing business
practices in such a way as to promote increases in renewable fuel use. We also noted several
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other ways in the NPRM in which obligated parties could help to increase the supply of
renewable fuel:
• Working with vehicle manufacturers to increase the number of FFVs in the fleet
• Increasing the number of retail stations offering El 5 and E85 through direct installation
of new equipment or providing grants to retail owners, and locating those stations
offering E15/E85 closest to higher populations of vehicles than can use those fuels
• Developing contractual mechanisms to ensure favorable pricing of El 5 and E85 at retail
compared to El0 to boost sales volumes
• Increased production and/or imports of non-ethanol renewable fuels (e.g., greater
production of drop-in biofuels)
• Expanded co-production of non-ethanol renewable fuels with petroleum at new and
existing facilities
In response, obligated parties described why in their view none of these suggestions were
practical and/or would not provide any benefits for 2016. We understand that some of these may
be atypical for some refiners, but they are also fully within the realm of activities common for
refiners, their marketing operations, and their partnerships with other industries. We do not
agree with stakeholders who said that developing contractual mechanisms to promote favorable
pricing of E15 and E85 at retail would amount to illegal price fixing, or would reduce or
eliminate consumer choice concerning which fuels to purchase. Contractual mechanisms could
include a scale of increasing subsidies offered to retailers who increase sales of El 5 and/or E85,
or non-monetary support to retail stations in the form of expanded signage or advertising for
renewable fuels in exchange for the retailer's agreement to offer E15 and/or E85. There is also
no reason why existing refineries cannot be undertaking changes to their equipment or operations
to produce renewable fuel themselves, even if those efforts would not produce renewable fuel
volumes until after 2016.
More importantly, the examples we provided in the NPRM of activities that obligated parties
could undertake were just that - examples of actions that obligated parties could take in addition
to their primary responsibility to acquire RINs. They are not the only ways that obligated parties
could help to increase the supply of renewable fuel, and we expect them to make ongoing efforts
to further the goals of the RFS program both for 2016 and beyond. It would also be in the
interests of renewable fuel producers to take similar, related, and/or complementary steps to
increase the ability of the marketplace to supply their products to the vehicles and engines that
can use them, notwithstanding the fact that the legal and regulatory responsibility for the
purchase of RINs rests upon obligated parties.
With regard to the NPRM's discussion of the volumes of E85 that might be achievable in 2016,
stakeholders held strongly diverging views. Some insisted that poor consumer response and the
low concentration of retail stations offering E85 would ensure that E85 use in 2016 would be no
higher than 100 - 200 million gallons, and that EPA should set the volume requirement assuming
no more than this amount. Other stakeholders said instead that the RIN mechanism would cause
sales of E85 to follow whatever volume requirements that EPA set, and that EPA should set the
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volume requirements based on the expectation that the market would respond by increasing the
sales of E85 (and E15) to meet those volume requirements. These stakeholders argued the E85
volumes could reach at least 1 billion gallons in 2016, and some argued that significantly higher
volumes were possible.
As discussed in more detail in Section II.E.2.ii of the final rule, we generally believe that the
market could theoretically be incentivized to provide higher volumes of E85 through the RIN
mechanism in response to higher standards. However, we have investigated the specific
mechanisms involved and have concluded that the process is far more constrained than most
ethanol proponents believe it to be. These constraints make it inappropriate to estimate total
potential E85 consumption based on the consumption capacity of all FFVs, or even just those
FFVs with reasonable access to E85. It is similarly inappropriate to assume that the E85
throughput at a given retail station can be the same as typical throughput rates for gasoline. All
such estimates demonstrate what is physically possible, not what is likely to occur given the way
that the market actually operates under the influence of high RIN prices. While some
stakeholders said that the RIN market, with its current high prices, is already working as
intended to drive E85 volumes in some locales, they had a different perspective on what this
implied for potential E85 volumes nationwide in 2016. For further responses to comments on
the role of the RIN mechanism in reducing the retail price of E85, see Section 2.3.2.
As discussed more fully in Section II.E.2.iii of the final rule, we have also found that the
response of FFV owners to greater E85 price discounts relative to E10 has not produced the
substantial increases in E85 sales volumes that would be needed to reach the total E85
consumption levels that some stakeholders said are possible. A memorandum to the docket
provides the details of this analysis demonstrating that even significant reductions in the retail
price of E85 relative to E10 would only increase E85 sales to a few hundred million gallons for
the nation as a whole in 2016 under very optimistic conditions.21 Thus based on an analysis of
available data, we have determined that at this point in the market's development, the constraints
on the ability of applicable standards to drive increased consumption of E85 in 2016 are
twofold:
• Higher RIN prices are not likely to produce dollar-for-dollar equivalent reductions in E85
retail prices under current circumstances wherein the number of E85 stations is too few to
compel competition between them
• Reductions in E85 retail prices produce only moderate increases in E85 consumption by
FFV owners
Our observations and analysis lead us to conclude that if EPA were to dramatically increase the
total renewable fuel volume requirement above the level we have finalized for 2016 on the basis
of higher E85 use, in the near term we would expect to see sharply higher RIN prices, but this
would not translate into significantly higher E85 sales volumes.
In the NPRM we presented a collection of volume scenarios in Table II.D.2-2 that described
market outcomes that were possible for E85, BED, sugarcane ethanol, and other fuel
21 " Correlating E85 consumption volumes with E85 price," memorandum from David Korotney to docket EPA-HQ-
OAR-2015-0111.
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types. These scenarios were intended to demonstrate that the proposed volume requirements
were achievable by illustrating the wide variety of options available to the market, all of which
were possible, though not all equally likely. Within the context of these volume scenarios, we
included a range of E85 volumes from 100 to 600 million gallons. In response to the NPRM,
some stakeholders interpreted the range of E85 volumes in those scenarios as placing a 600
million gallon limit on E85 sales. In fact those volume scenarios placed no limits on the volumes
of E85 that the market might supply in response to the proposed volume requirements. We
explained in the NPRM that the volume scenarios were not the only ways that the market could
meet the proposed volume requirements, and "indeed many additional scenarios could be
generated." The NPRM also explained that we were not in a position to identify those scenarios
that were most likely. Thus, for instance, we did not indicate whether 100 million gallons of E85
was more or less likely than 600 million gallons of E85.
The NPRM explained why we believed that the highest levels of each type of renewable fuel in
Table II.D.2-2 were possible without indicating the likelihood that the market would reach those
highest levels. In this context, we described why we believed that 600 million gallons of E85 in
2016 was possible by discussing access of FFVs to retail stations offering E85:
"While only about 2% of retail stations nationwide currently offer E85, the
fraction of FFVs with access to E85 is higher than 2% since the vast majority of
vehicles are within reasonable range of more than one retail station on typical
trips. If only 5% of all FFVs had a retail station nearby that offered E85, they
could consume 800 million gallons of E85 in 2016 under favorable consumer
pricing conditions...Thus we believe it is possible for the market to reach volumes
perhaps as high as 600 million gallons under favorable pricing conditions (i.e.,
where consumers believe they are obtaining an economic advantage through
purchase of E85)." (80 FR 33128)
Some stakeholders said that we had contradicted ourselves by stating that 800 million gallons of
E85 was possible while the highest level of E85 in Table II.D.2-2 was 600 million gallons. We
disagree. As stated before, the volume scenarios in that table were not the only ways that the
market could meet the proposed volume requirements, nor did we indicate whether 600 million
gallons was more or less likely than any other level of E85. We could have, for instance,
included a scenario wherein 800 million gallons of E85 was part of the market's response to the
proposed volume requirements. More importantly, the calculation of 800 million gallons of
possible E85 use was based upon broad and imprecise considerations of potential access to E85,
and an assumption that every single FFV with access to E85 would refuel on E85 essentially
100% of the time. We chose a value somewhat higher than the 2% of retail stations which offer
E85 to represent access to E85 merely to demonstrate that a relatively low level of access would
nevertheless result in the potential for up to 800 million gallons of E85 consumption. Thus, the
calculation was a bounding exercise designed to illustrate what might be possible under some
simplifying assumptions, and the 800 million gallons that this calculation served to support the
lower volumes that we had included in the volume scenarios table.
One stakeholder said that it was inappropriate for EPA to ignore a previous, larger estimate of
FFV access to E85 that we had discussed in the 2013 NPRM, and instead assume that 5% of
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99
FFVs have access to E85. In that 2013 NPRM, we discussed an estimate of access to E85 that
dated back to the 2010 final rulemaking that established the current RFS program. There we
defined "reasonable access" to E85 as a situation in which one out of every four service stations
to which an FFV owner had access offered E85. We did not use this estimate in the June 10,
2015 NPRM for a variety of reasons. First, it was originally designed only to provide a rule of
thumb for the number of retail stations needed to support the introduction of alternative fueled
vehicles. In fact, the 2010 rule clarified that one-in-three and one-in-five might also be
reasonable estimates of access. Second, access to E85 does not, by itself, determine how much
E85 would actually be used by those FFVs. A variety of other factors will also be at play,
including relative price, distance travelled to reach the station offering E85, ineffective
marketing, knowledge of choices, etc. It was the consideration of these other factors that led to
the range of 100 - 600 million gallons of E85 that we included in the NPRM's scenarios. The
bounding exercise using the assumed level of 5% access was not used to generate the E85
volumes in the scenarios nor the proposed volume requirements themselves, but was only used to
demonstrate that the E85 volumes in those scenarios were possible; by describing why 800
million gallons of E85 was physically possible, all lower volumes of E85 were justified as
likewise being physically possible. The use of a one-in-four assumption for FFV access to E85
could have served the same purpose, but would not have changed the consideration of other
constraints that led to the range of 100 - 600 million gallons of E85 in the scenarios.
Several stakeholders said that we should have relied on analyses conducted by Babcock and
Pouliot demonstrating that E85 volumes considerably higher than 600 million gallons were
possible. We reviewed the referenced analyses and other data related to RIN prices, E85 retail
prices, and E85 sales volumes, and determined that the analyses conducted Babcock and Pouliot
could not be used to support the very high E85 volumes cited by ethanol proponents. Contrary to
the assumptions made by analysts Babcock and Pouliot, the data showed that the market was not
responding to higher RIN prices in the ways necessary to drive significant increases in E85 sales
volumes. We also found that while sales volumes of E85 did increase as the price discount for
E85 relative to E10 increased, these sales volume increases were both less dramatic than many
have assumed, and perhaps more importantly, did not increase sharply when the price discount
exceeded energy parity, as others including Babcock and Pouliot have assumed. Our own review
of the information and data submitted by stakeholders is discussed in more detail in Sections
II.E.2.ii and II.E.2.iii of the final rule.
Based on the additional analyses we conducted, we examined more closely for the final rule the
possibility that significant increases in the number of retail stations offering E85, or a stronger
than average consumer response to E85 price reductions, could result in much higher sales of
E85 in 2016 than have occurred in the past. We determined that if all relevant factors were
extremely favorable, it may be possible for nationwide E85 consumption to reach as high as 400
million gallons in 2016. However, we do not consider this to be a likely outcome, and thus did
not view 400 million gallons of E85 to be a reasonable basis for determining the 2016 volume
requirement for total renewable fuel. Nevertheless, because 400 million gallons of E85 is
possible despite being unlikely, the highest volume of E85 that we have included in the updated
volumes table in the final rule (Table II.G-2) is 400 million gallons. Again, however, the market
will choose how to respond to the standards that we set for 2016, and we acknowledge that
: 78 FR 71761, November 29, 2013.
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volumes higher than 400 million gallons of E85 are theoretically possible. For the purposes of
estimating total ethanol supply, we have estimated that total E85 supply in 2016 will reach 200
million gallons, based on an estimate of growth in the number of E85 stations to about 3,200 and
an E85 price discount of 22% relative to E10. Both the number of E85 stations and the E85 price
discount are significantly higher than at any time in the past for the nation as a whole, but we
believe that they are achievable for a market that is response to the standards we set. For further
discussion of our assessment of volumes of E85 that are reasonably achievable in 2016, and the
basis for using 200 million gallons of E85 in our determination of the total volume of ethanol
that we estimate to be reasonably achievable in 2016, see Sections II.E.2.iii and II.E.2.vi of the
final rule.
One stakeholder said that the release of this final rule by November 30, 2015 would only provide
one month for the market to increase E85 infrastructure, and that as a result E85 was unlikely to
grow in 2016 above current levels. In fact the market can increase E85 infrastructure all
throughout 2016, though the later that the infrastructure becomes operational the less of a
contribution it can make to total E85 use. Nevertheless, E85 infrastructure is likely to continue
to be a constraint in 2016, and as a result increases in E85 volumes in 2016 above current levels
are expected to be constrained as discussed in Section HE. 1. of the final rule.
One stakeholder said that EPA had no "special expertise or knowledge" concerning the
infrastructure that would be needed to meet the proposed volume requirements, and thus had no
basis for concluding that the necessary capital projects could be undertaken and finished in time
to enable the proposed volume requirements to be met. While it is true that EPA staff are not
engaged in the business of fuels infrastructure, EPA staff have acquired significant knowledge
over the years on fuel production, distribution, and retail infrastructure in the context of
developing and implementing our various fuel programs, placing us in a fairly unique situation to
evaluate the issues. It is EPA's responsibility to assess the extent to which an inadequate
domestic supply of renewable fuels exists in the 2014-2016 time period, and we have done so by
reviewing the available information, comments provided, what the industry has accomplished in
the past, and such factors as production capacity, availability of feedstocks, and a variety of
constraints on supply to vehicles and engines as described in Section II.E.l of the final
rule. With respect to the specific issue of retail stations that offer E85, we examined the
historical rate at which infrastructure has expanded in the past and estimated possible increases
for 2016. For further discussion, see the aforementioned memorandum to the docket.
For responses to comments on how the RIN mechanism operates to subsidize the cost of
renewable fuels at retail, see Section 2.3.2.
For responses to comments stating that the E10 blendwall is not a constraint, or has been
fabricated by the refining industry, see Section 2.4.
For responses to comments on USDA's Biofuel Infrastructure Partnership, see Section 2.6.2.
For responses to comments on EO and El5, see Section 2.6.2.
For responses to comments on whether the proposed volumes would force consumers to use E85,
see Section 2.7.
For responses to comments on how RIN prices would affect retail fuel prices, see Section 7.5.
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For comments on supply of biodiesel, see Section 2.7.2.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.3.1 Congressional Intent to Increase Volumes
Section 2.3.2 Power of the Market to Respond to Ambitious Standards
Section 2.4.1 Proposed Total Renewable Fuel Volume for 2014
Section 2.4.2 Proposed Total Renewable Fuel Volume for 2015
Section 2.4.3 Proposed Total Renewable Fuel Volume for 2016
Section 2.6 Ethanol Consumption
Section 2.6.1 E10 Blendwall and Demand for Gasoline
Section 2.6.2 Assumptions of Zero Volumes for EO and El 5
Section 2.7.3 Impacts on Corn Ethanol
Section 2.7.4 Impacts on Imports of Sugarcane Ethanol
Section 7.3 Fuels Industry Impacts (oil refineries, biofuel facilities)
Section 7.4 Impact on RINs
Section 7.5 Retail Fuel Prices
Section 7.7 Impact on Jobs and Local/State Economy
Section 7.8 Cost to Consumers
Section 10.6.4 Ethanol Impacts on Engines
Section 10.6.5 Other Information and Ideas to Overcome Current Challenges
2.7.2 Impacts on Advanced Biodiesel Production and Imports
Comment:
Advanced Biofuels Association (ABFA)
Renewable diesel will make a modest contribution towards LCFS compliance, even at low
volumes. With no additional distribution infrastructure or refueling infrastructure costs, and no
limitations on consumption in vehicles, renewable diesel is an attractive option for LCFS
compliance. Furthermore, it is available in significant quantities today. Even at conservative
forecasts of 150 million gallons renewable diesel delivered to California by 2020, renewable
diesel could generate about 8 percent of the LCFS credits required to achieve compliance. [EPA-
HQ-OAR-2015-0111-2498-A1 p.6]
The EPA proposal spends little time discussing renewable diesel. EPA should be aware that there
are more than 900 million gallons of global renewable diesel capacity from companies that are
located in the U.S. or imported to the U.S. This includes U.S. production capacity of over 200
million gallons per year of renewable diesel. The ability of renewable diesel to help meet the
RFS's statutory targets should not be underestimated and it continues to add incrementally more
volume each year. [EPA-HQ-OAR-2015-0111-2498-A1 p.6]
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American Soybean Association (ASA)
EPA should increase the biomass-based diesel volumes relative to the total Advanced Biofuels
volumes in order to promote the use of domestically produced biodiesel over imported advanced
biofuels such as sugarcane ethanol. The intent of Congress when they established and expanded
the RFS program was clearly to increase and promote domestic energy production and U.S.
energy independence. This is reflected by the title of the 2007 law - the Energy Independence
and Security Act (EISA) - and is supported by numerous statements by legislators during
consideration of the bill. [EPA-HQ-OAR-2015-0111-1818-A1 p.3]
Biomass-based diesel and imported sugarcane ethanol are the two primary, and practically the
only, fuels available to fulfill the Advanced Biofuels requirements. Since EPA contends that
there is an ethanol "blend wall," increasing the biomass-based diesel volumes would help
alleviate this so-called "blend wall" issue by reducing the imports of sugarcane ethanol. In
addition, on an equivalency or RIN basis, biomass-based diesel counts as 1.5 gallons for each 1.0
gallon of sugarcane ethanol. [EPA-HQ-OAR-2015-0111-1818-A1 p.3]
To be consistent with the primary purpose and intent of the EISA, the EPA should implement the
RFS in a way that helps build our domestic industry, and doing so requires strong policy signals
that promote fulfilling volume requirements with domestically produced biofuels to the greatest
extent possible. Increasing the biomass-based diesel requirements relative to the overall
Advanced Biofuels requirements is a way to accomplish that mission. [EPA-HQ-OAR-2015-
0111-1818-A1 p.3]
Wherever possible, EPA should seek to promote domestic biofuel sources to fulfill the RFS
volume requirements. However, when determining the appropriate volume standards for
biomass-based diesel, the EPA must also account for the likelihood of increased imports of
biodiesel from Argentina due to some factors beyond the RFS volume requirements. [EPA-HQ-
OAR-2015-0111-1818-A1 p.3]
Prior to the EU imposing anti-dumping tariffs, Argentina was exporting approximately 400
million gallons to that market and they are seeking new markets for those volumes.5 The EPA
has approved a streamlined process for Argentine biodiesel to comply with the RFS and should
expect Argentine imports into the U.S. to increase significantly in future years. [EPA-HQ-OAR-
2015-0111-1818-Alp.4]
5 USDA Foreign Agricultural Service. July 8, 2011. Argentina Biofuels Annual 2011, Global
Agricultural Information Network Report. Available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Biofuels%20Annual Buenos%20Air
es Argentina 7-8-2011 .pdf
Biotechnology Industry Organization
If EPA sets the level of the overall RVO according to the amount of ethanol that can be
consumed in a blend of E10 and well below the industry's production capacity, as the agency
proposes, it would improperly create a likelihood that the entire overall RVO above the advanced
RVO would be met with conventional ethanol, rather than with additional advanced biofuels
other than ethanol. [EPA-HQ-OAR-2015-0111-1958-A2 p. 37]
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California Biodiesel Alliance (CBA)
The vast majority of biodiesel produced in California is made from ultra-low carbon feedstocks
such as used cooking oil, animal fats and non-food grade corn oil. When the market is too small,
as it was in 2014, lower carbon fuels are squeezed out of the market by the more established
higher carbon renewable fuels made. This unfortunate consequence is not only contrary to
Congress' intent to promote the continued growth of the lower carbon advanced biofuels, it is
also detrimental to California's comprehensive carbon reduction program. The State of
California's Low Carbon Fuel Standard ("LCFS") calls for a substantial reduction of the carbon
intensity of transportation fuels by 2020, and a recent executive order strengthened this goal to
40% below 1990 levels by 2030. The ultra-low carbon fuels such as biodiesel produced in
California are critical to meet these carbon reduction goals. [EPA-HQ-OAR-2015-0111-1910-
Al,p.l]
The new RFS proposal, while an improvement over the 2013 one, still discourages further
investment in advanced biofuels, including biomass-based diesel, by setting a mandate that is
substantially lower than what the industry can achieve. [EPA-HQ-OAR-2015-0111-1910-A1,
p.l]
National Biodiesel Board
the highest biomass-based diesel volume under all the scenarios considered by EPA is limited to
2.131 billion gallons. This represents approximately 178 million gallons of production per
month. But, the industry has shown it can exceed this volume, including as high as 219.6 million
gallons in 2013 (335 million ethanol-equivalent gallons). [EPA-HQ-OAR-2015-0111-1953-A2
p.116]
EPA also does not consider State-based initiatives that continue to provide opportunities for
biomass-based diesel. DOE's Alternative Fuels Data Center indicates incentives or regulations
that promote biodiesel use or production in Alabama, Alaska, Arizona, Arkansas, California,
Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii, Idaho,
Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts,
Michigan, Minnesota, Mississippi, Missouri, Montana, Nebraska, Nevada, New Hampshire, New
Jersey, New Mexico, New York, North Carolina, North Dakota, Ohio, Oklahoma, Oregon,
Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Texas, Utah, Vermont,
Virginia, Washington, West Virginia, Wisconsin, and Wyoming.94 See U.S. Department of
Energy, Alternative Fuels Data Center, Search Federal and State Laws and Incentives
(Biodiesel), available at www.afdc.energy.gov (Attachment 15). Several of these incentives seek
to promote biodiesel blends above 5 percent, such as Minnesota that has moved to a BIO
mandate for most of the year. From 2011-2014, biodiesel and renewable diesel together
accounted for 30 percent of the total credits generated under the California Low Carbon Fuel
Standard (LCFS) [EPA-HQ-OAR-2015-0111-1953-A2 p. 116]
EPA does not adequately consider the potential increase in imports of biomass-based diesel.
[EPA-HQ-OAR-2015-0111-1953-A2p.ll7]
EPA must consider and account for these expected increases in imports. Such increases, without
a corresponding increase in the RFS2 requirements will hurt domestic production and, thereby,
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the U.S. economy, undermining a key goal of the program. [EPA-HQ-OAR-2015-0111-1953-A2
p.117]
94 Several of these States have their own tax incentives.
North Dakota Ethanol Council
By taking a step backward, you are sending a signal that the government no longer supports the
production of biofuels. This uncertainty, coupled with a dramatic cut in what should be
produced, puts our industry at risk. Furthermore, if EPA and the government turn their backs on
the production of current conventional biofuels, it will have a devastating effect on the
development and commercialization of next generation biofuels. [EPA-HQ-OAR-2015-0111-
1927-A1 p. 2]
We are also concerned that the proposed 2.9 billion gallon 2015 RVO for advanced biofuels will
incent imported sugarcane-based ethanol due to the instability of the biodiesel production credit
and its impact on biodiesel production. Shortfalls in biodiesel production will likely be met by
imported advanced biofuels driven by inflated RIN values improperly incentivizing imported
ethanol into a market that has yet to properly address market expansion. We believe all ethanol
market expansion should be met with conventional and other nationally produced products.
[EPA-HQ-OAR-2015-0111-1927-A1 p. 2]
The Andersons, Inc.
We also cannot comprehend why EPA would want to encourage ethanol imports by raising the
Advanced Biofuel RVO beyond our current domestic production capacity. Imported ethanol
competes with domestically produced ethanol yet requires additional transportation to get here.
Sugar ethanol is the exact same clean burning, high octane energy molecule as the corn ethanol
that we produce in the United States. Why we would want to just move our Energy Dependence
from the Middle East to South America is beyond comprehension. By keeping a low
conventional ethanol RVO but an Advanced Biofuel RVO that is beyond our capacity to
domestically produce, EPA has inflated D5 vs. D6 RIN prices and created a market that has
already created a situation for sugar cane ethanol to be imported and force US production
capacity to slow, or we'll have to export the excess. [EPA-HQ-OAR-2015-0111-2275-A2 p. 4]
Response:
Some commenters argued that EPA should set the RFS standards in a manner that maximizes the
incentives for domestically produced biofuels, either by reducing the advanced biofuel standard
to provide more opportunity for conventional ethanol or by increasing the BED standard relative
to the advanced standard to reduce the opportunity for sugar cane ethanol to contribute toward
meeting the advanced standard. While we recognize there are benefits of domestically produced
renewable fuel, there are other important factors that EPA must consider in establishing the
standard. If, for example, EPA raises the BED standard relative to the advanced biofuel
standard, we reduce the opportunity for other advanced biofuels such as sugarcane ethanol, but
also advanced butanol and other drop-in fuels. We believe these other advanced fuels are
essential to the success of the RFS program, and allowing space for them to compete in the
advanced biofuel pool provides important incentives for those advanced biofuels that are
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currently being produced as well as an important market signal to parties developing and
investing in these fuels (see Section III of the final rule and Section 3 of the RTC for further
discussion of the BED standard). Reducing the advanced standard to provide more opportunities
for domestically produced corn ethanol would similarly reduce the incentives for advanced
biofuels, and would also reduce the GHG benefits the RFS program is designed to
provide. Finally, we note that the Clean Air Act allows for imported renewable biofuels to
contribute towards meeting the RFS standards (see additional discussion in sction 2.1). Setting
the RFS standards with the intent of limiting renewable fuel imports would not only contradict
congressional intent and the goals of the program (e.g. GHG emissions reduction, as described
above), but could also run contrary to U.S. trade agreements. Regardless, the final advanced and
total renewable fuel standards provide a tremendous incentive for the growth of both domestic
and imported renewable fuels (including biodiesel, renewable diesel, and both corn and
sugarcane ethanol), and the biomass-based diesel standard provides added certainty for
investment in biodiesel growth.
A commenter claimed that the highest biomass-based diesel volume considered by EPA was less
than the annualized total of the highest historic monthly production rate. As discussed in Section
II.E.3 of the final rule, we do not believe that using the highest monthly production rate to
project an annual production volume is valid, as there are many reasons to believe that the
production rate in a single month is not sustainable over the course of a year. These reasons
include, for instance, the ability to temporarily increase or draw down the amount of biodiesel
and renewable diesel feedstock and fuel in inventory. EPA is aware of the state incentives
mentioned by the commenter and has considered them in projecting the available supply of
biodiesel and renewable diesel in 2016. We note that for the final rule we have increased our
projection of the available supply of biodiesel and renewable diesel to 2.5 billion gallons in
2016.
Some commenters stated that EPA's standards must account for increasing volumes of imported
biofuel. EPA has assessed the potential for increased biofuel imports in determining the
appropriate level for both the total renewable fuel standard and the advanced biofuel
standard. For more information on our assessment of the potential for imported renewable fuels
see Section HE and II.F of the final rule. With regard specifically to imports of biodiesel from
Argentina, we note that the annualized volume of imported Argentinean biodiesel for 2015,
based on data collected through July, is 94 million gallons. This level is far less than the
potential volumes projected by the National Biodiesel Board and several others. There are also
indications that Argentina's production of biodiesel in 2015 will be significantly reduced
compared to prior years, as described in Section II.E.S.iii of the final rule. Finally, Argentina has
changed the applicable tax on exported biodiesel several times since the beginning of 2015,
highlighting the uncertainty associated with projecting potential future imports into the U.S.
Based on these facts, we believe that the volume of biodiesel and renewable diesel imported
from Argentina in 2016 is likely to be far less than the several hundred million gallons suggested
by some commenters.
A commenter stated that if EPA set the total renewable fuel standard according to the amount of
biofuel that can be consumed in an El0 blend it would increase the likelihood that the entire
volume above the advanced standard would be met with conventional ethanol, reducing the
opportunity for non-ethanol advanced fuels. The situation described by the commenter,
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however, is not what we have finalized. In setting the total renewable fuel standard we
determined that some ethanol can be consumed as E85. We have also projected the likely
production and imports of all non-ethanol advanced biofuels and included these in our
calculations of the available supply of renewable fuel. We believe these standards provide the
appropriate incentives for all non-ethanol advanced biofuels.
Another commenter stated that higher RIN prices are essential to the success of drop-in
biofuels. EPA recognizes the incentives that higher RIN prices provide, however we have not
and cannot establish the RFS standards to try to achieve a certain RIN price we determine to be
optimal in part because the market determines RIN prices based on many factors that are outside
of anyone's control. Instead, we have set the required total renewable fuel volume at the
maximum reasonably achievable supply of renewable fuel (see Section II.B and II.E for a further
discussion on the total renewable fuel standard). Similarly, a commenter stated that the proposed
volumes would slow or halt the investment needed to distribute large volumes of renewable
fuel. We disagree, and believe the volumes in this final rule will continue to provide the
necessary incentives for ongoing investment in the production and distribution of renewable
fuels. Further, we believe it would be inappropriate for EPA to set standards beyond what the
market can supply in an effort to provide additional incentives for growth in the renewable fuels
market that cannot realistically be realized.
A commenter stated that EPA's proposal spent little time discussing renewable diesel and
suggested that renewable diesel could be a significant source of renewable fuel in 2016. Another
stakeholder pointed out that some volumes of renewable diesel are used in California to help
meet their LCFS requirements, and that this volume should also count towards meeting the
federal RFS requirements. Renewable diesel used in California that qualifies under the RFS
program would indeed contribute to overall efforts to increase renewable fuel use consistent with
the statute's goal for the RFS program. EPA believes that renewable diesel may contribute
significantly towards meeting the BBD standard, advanced biofuel standard, and total renewable
fuel standards in 2016. As described in Sections II.E.3, II.F, and III of the final rule, we have
assessed available supply of both biodiesel and renewable diesel in 2016, and this supply would
include any qualifying volumes used in California.
A commenter stated that the proposed standards are substantially lower than what the market can
achieve, and that this has negative impacts on the California LCFS program, Congress's
intention to reduce GHG emissions, and future investment in renewable fuel development. EPA
has reviewed available information since the proposal and increased each of the standards based
on this information. We believe the 2016 total renewable fuel standard in this final rule
represents the maximum reasonably achievable volume of renewable that can be supplied in
2016 and will require significant growth in biodiesel, other advanced biofuel, and conventional
biofuel volumes.
One stakeholder said that we had ignored the many State-specific incentives for the production
or use of biodiesel. We believe that those incentives have played a role in bringing biodiesel use
to the level that has been achieved to date. However, this stakeholder provided no information
regarding how those incentives would lead to increases in supply in 2016 over current or
proposed levels.
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Finally, one commenter characterized EPA's proposed standards as a step back, and a signal that
the government no longer supports biofuel production. We strongly disagree with this
assessment. We believe that the volumes finalized in this rule represent growth based on the
maximum achievable supply of renewable fuel in 2016. These volumes provide an incentive for
substantial growth in each of the categories of renewable fuel over the volumes supplied in
2015. By responsibly exercising our general waiver authority we are providing the certainty that
the renewable fuels market needs to continue to grow.
For responses to comments suggesting that domestic production of renewable fuel should be
favored over imports of renewable fuel, see Section 2.1.
For responses to comments suggesting that the El0 blendwall can be addressed by increasing the
required volumes of BED, see Section 2.5.
2.7.3 Impacts on Corn Ethanol
Comment:
Abengoa Bioenergy
The US ethanol industry has current installed production capacity in excess of 15 billion gallons
per year, and the statute includes volumes that would allow conventional corn ethanol to
contribute that 15 billion gallons per year in both 2015 and 2016. However, EPA's proposed rule
cuts that opportunity to 13.4 and 14 billion gallons respectively — over a billion gallons short of
actual production capacity today, even for the 2016 volumes. This does not seem to be a rule
calculated to expand investment and production of biofuels when it does not even allow
utilization of existing capacities. [EPA-HQ-OAR-2015-0111-2474-A1 p.5] [EPA-HQ-OAR-
2015-0111-1004 p.132]
Calease, John
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 282-283.]
If the EPA has, indeed, the authority to decrease the RVO of the RFS2 by congressional intent,
under what scenario or circumstances will the EPA increase the dry grind portion of corn
ethanol? Obviously, the EPA did not feel necessary when we produced 2 years back-to- back of
14 billion bushel corn crops, and corn prices have plummeted over 50 percent. Or when E85
blends are selling in northern Iowa for $1 less per gallon than regular gas. I cannot understand
the EPA's possible reasoning for lowering the RVOs for dry grind corn ethanol production. I
have no doubts our farmers and our industry can produce all the ethanol needed to move to El5
and higher blends nationwide. This would help immensely in reaching our goals nationally for
less than 25 percent imported fuels by 2025.1 fully understand the economic impact of the RFS
and the RFS2 has had on our rural communities and the jobs in the peripheral industries as well.
The EPA's indecision of the past has stymied investment opportunities not only for dry grind
corn ethanol, but also for the biofuels technologies as well.
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Linn & Associates
First and foremost, I believe that we should alter the 2015 corn — conventional corn ethanol
proposal to 13.9 billion gallons versus the proposed 13.4. Setting a target of 13.9 is an actual
improvement over the initial — over the last 2013 mandated volume. So you're following the
spirit of the law.
And we also believe we should increase corn ethanol and biodiesel targets 100 million gallons
each year to a maximum 15 for corn ethanol and 2.0 for biodiesel. This allows people to make
long-term projections.
Mass Comment Campaign sponsored by American Ethanol-NASCAR (paper) - (65)
I am writing in opposition to efforts to reduce the use of ethanol in the Renewable Fuel Standard.
[EPA-HQ-OAR-2015-0111-2955-Alp.l]
NASCAR chooses American ethanol, racing more than 7 million miles on corn ethanol and
dramatically reducing its environmental footprint. I have seen its performance on the race track
and in my engine at home. [EPA-HQ-OAR-2015-0111-2955-A1 p.l]
Please reverse your decision and leave the corn ethanol level where it currently is in the
Renewable Fuel Standard statute. [EPA-HQ-OAR-2015-0111-2955-A1 p.l]
Mass Comment Campaign sponsored by anonymous 14 (email) - (1339)
I support that mission and am proud to say that corn ethanol advances this mission. Corn ethanol
provides up to a 50 percent reduction in greenhouse gas emissions, compared to gasoline. Global
ethanol production and use is estimated to reduce greenhouse gas emissions by 100 million
metric tons annually, the equivalent of taking more than 20 million vehicles off the road. Ethanol
is a sustainable octane source that is much better for the environment than particulate-generating
petroleum alternatives. [EPA-HQ-OAR-2015-0111-0216-A1 p.l]
Your decision to reduce corn ethanol levels harms both the rural economy and the environment
which it is your mission to protect. [EPA-HQ-OAR-2015-0111-0216-A1 p. 1]
Mass Comment Campaign sponsored by anonymous 23 (email) - (10)
I support that mission and am proud to say that corn ethanol advances this mission. Corn ethanol
provides up to a 50 percent reduction in greenhouse gas emissions, compared to gasoline. [EPA-
HQ-OAR-2015-0111-1479-A1 p.l]
Please defend renewable fuels and reconsider your proposed reduction in the corn ethanol
renewable volume obligations. [EPA-HQ-OAR-2015-0111-1479-A1 p.l]
Mass Comment Campaign sponsored by anonymous 29 (email) - (29)
I am writing in response to your proposal to reduce the use of corn ethanol in the Renewable
Fuel Standard for 2014-2016. The nation's premier racing series has chosen to use American
ethanol to dramatically improve their environmental footprint, racing over 7 million miles on
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renewable corn ethanol. I oppose your decision to reduce corn ethanol volumes. [EPA-HQ-OAR-
2015-0111-2558-Alp.l]
I'm concerned about what this will do to the air we breathe. We cannot forget the important
environmental benefits of ethanol, which provides up to a 50 percent reduction in greenhouse gas
emissions, compared to gasoline. Ethanol is a sustainable octane source that is much better for
the environment than paniculate-generating petroleum alternatives. I have seen its performance
on the race track and in my engine at home. [EPA-HQ-OAR-2015-0111-2558-A1 p.l]
In addition to its environmental benefits, corn ethanol also has important economic benefits. The
ethanol industry has created hundreds of thousands of jobs, even during the recession. It has
grown rural tax bases benefiting schools, hospitals, fire departments and roads. Damage to the
ethanol industry could devastate rural America and harm the broader economy. [EPA-HQ-OAR-
2015-0111-2558-Alp.l]
Please reverse your decision and leave the corn ethanol level where it is currently in the
Renewable Fuel Standard statute. Follow the lead of the nation's favorite spectator sport and
boost the usage of corn ethanol. [EPA-HQ-OAR-2015-0111-2558-A1 p.l]
Mass Comment Campaign sponsored by anonymous 32 (postcard) - (7,903)
I urge you to get the RFS back on track, as Congress intended, by finalizing corn-based ethanol
volumes according to the law-14.4 billion gallons for 2014 and 15 billion gallons for 2015 and
beyond. [EPA-HQ-OAR-2015-0111-2562-A1 p.l]
Minnesota Bio-Fuels Association (MBA)
Instead, we suggest the EPA consider the RFS language which sets the volume amounts as
'minimum' amounts and that the EPA more fully embrace the role the increased use of at least 15
billion gallons annually of conventional renewable biofuel can immediately play in helping to
reduce GHG emissions. This action would be fully consistent with the letter and spirit of the
RFS, President Obama's energy policy, reports of the Intergovernmental Panel on Climate
Change regarding the role biofuels play in reducing GHG emissions and Minnesota's GHG
emission reduction statute (See, e.g., Minn. Stat. 216H.02) and biofuel laws (Minn. Stat.
239.7911). [EPA-HQ-OAR-2015-0111-1936-A1 p.2]
Missouri Coalition for the Environment
EPA's authority to set volume requirements for the Renewable Fuel Standard program is derived
from the Clean Air Act (CAA) — legislation designed to protect our natural resources. The
science is indisputable: corn ethanol and the policy that mandates its production is devastating to
our environment and has not demonstrated air quality benefits. The corn-based ethanol mandate
serves the narrow interest of the corn ethanol lobby and the corn ethanol lobby alone — while
we pay the costs. At this major milestone, we must finally put our environment and science
before narrow special interests, support using quality farm land for sustainable agricultural
production, and invest in renewable fuels that don't harm our environment. Corn ethanol has no
place in a clean fuel future. [EPA-HQ-OAR-2015-0111-2271-A1 p. 2] [EPA-HQ-OAR-2015-
0111-1043, p. 268]
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Nestle
However, the appropriate public policy considerations involved in this rulemaking extend well
beyond the negative impact on any single company. In the comments that follow, we lay out
some of these concerns. We believe it is high time for a broader debate over whether the
Renewable Fuel Standard (RFS) is actually leading the nation toward the environmental and
energy-independence benefits that are widely touted by the ethanol industry. EPA itself can play
a vital role in that debate, although we recognize that in the present rulemaking, the agency is
constrained by the policies that are presently enshrined in statute. [EPA-HQ-OAR-2015-0111-
1918-Alp.l]
Disadvantages of RFS Mandates
As noted above, Nestle in the U.S. fully realizes that EPA is charged with carrying out the
Renewable Fuel Standard Program and can only operate within the limits of its statutory
authority. Nevertheless, we are troubled by the continuing growth in the RFS mandate for corn-
based ethanol in light of certain longer-term concerns. We believe these concerns should inform
EPA's consideration of RFS issues both in this rulemaking and in future years. [EPA-HQ-OAR-
2015-0111-1918-Alp.3]
NUVUFuels, LLC and DENCO II
Corn ethanol as a biofuel is the only proven alternative fuel to petroleum-based gasoline. The
corn to ethanol industry has provided this country with initial and ongoing investment in our
rural communities, cleaner burning oxygenated fuel, price strengthening for our agriculture
sector, small farm/co-op profitability, sustainable job creation and a lessened dependence on
foreign oil. This industry has also created a roadmap for the development of other bio-fuel
technologies such as fermentation of'cellulosic' substrates. [EPA-HQ-OAR-2015-0111-2631-A1
p.l]
Every year our industry and American agriculture do more with less and it sickens me to see the
EPA's proposed RVO's which is taking a step backward and rewarding big oil for their behavior
in fighting increased blends of renewables. I say this because that is exactly what my company
and our ethanol plants will do with respect to continuing to invest in new technologies and
ultimately next generation biofuels if the EPA finalized the proposed RVO's as is. We simply
will not invest further without a strong RFS and ambitious goals. [EPA-HQ-OAR-2015-0111-
2631-Alp.l]
Trenton Agri Products LLC
The ethanol production industry has invested billions to create supply consistent with the
Congressional mandates. But the parties obligated to blend and distribute renewable fuels
downstream haven't made their necessary investments; and they would be bailed out of their
obligations by the EPA's proposed RVO's. I have to ask you, the EPA, what are we to do with
our nearly 2 BGY of excess capacity if your proposed RVO is finalized? The answer is it will be
shut in, and the economic peril related thereto will permeate through rural America. [EPA-HQ-
OAR-2015-0111-1686-A1 p.2] [EPA-HQ-OAR-2015-0111-1043, p.320]
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Response:
Many stakeholders who represented the corn ethanol industry were opposed to any reductions in
the implied volume requirement for conventional renewable fuel.23 Most of these stakeholders
pointed to the fact that the domestic corn ethanol industry has sufficient capacity to produce 15
billion gallons of ethanol per year. Stakeholders who took this view generally regarded the
blendwall as being fiction created by refiners, and said or implied that production capacity was
the only relevant criterion on which to base the 2016 volume requirements. However, as
described in Section 2.4, the blendwall represents real constraints on the supply of ethanol to
vehicles, though it is not the firm barrier that some other stakeholders believe it to be. When we
take the constraints associated with the blendwall into consideration, as we have a responsibility
to do, it is clear that the statutory targets are not achievable in 2016. This conclusion also applies
to conventional renewable fuel as described in Section II.B.6 of the final rule.
Stakeholders who asked that the volume of conventional renewable fuel be set at the statutory
target of 15 billion gallons typically emphasized the negative impacts of any reduction on jobs in
the corn ethanol industry and rural economies. Many of these stakeholders said or implied that
any reduction from the statutory target would result in a reduction in actual use of ethanol
compared to recent years. However, despite the fact that we are reducing the volume
requirements using the waiver authorities provided in the statute, the necessary volume of
conventional renewable fuel would still increase in all years addressed by this rulemaking, as
shown below.
Conventional Renewable Fuel Supply
16,000
Final requirements
A
15,500 ' '
is.ooo Actual supply
A
14,500 xv
* f \
,0 14,000 —
5 13,500
13,000
1 "5 ^Afi
12,000
2012 2013 2014 2015 2016
23 Although many stakeholders viewed the volume of conventional renewable fuel as a standard, it is not. The
statute requires minimum volumes of advanced biofuel and total renewable fuel. "Conventional renewable fuel" is
that portion of total renewable fuel which is not required to be advanced biofuel, though it could be.
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Thus the final volume requirements will provide opportunities for the corn-ethanol industry to
continue expanding in 2016, not decline as these stakeholders suggest.
Some stakeholders said that we had not adequately considered the GHG benefits of increasing
the volumes of conventional renewable fuel. While reducing GHGs is one of the broad goals of
the RFS program, it is not explicitly a factor in the statutory waiver provisions. For reductions of
total renewable fuel under the general waiver authority, we are making reductions based on
inadequate domestic supply. In this context, we are establishing a 2016 volume requirement that
is the maximum that is reasonably achievable. A consideration of GHGs in the context of setting
the total renewable fuel volume requirements would not result in higher volumes even if the
general waiver authority permitted us to consider them, since we are already setting the 2016
supply at the maximum that is reasonably achievable. With regard to the advanced biofuel
standard, we can consider GHG since the cellulosic waiver authority does not specify which
factors we can or must consider. Since advanced biofuel is required to reduce GHGs by 50%,
while conventional renewable fuel is only required to reduce GHGs by 20% (and facilities which
are grandfathered under §80.1403 are not required to meet any GHG reduction threshold), a
consideration of GHGs in this context would generally encourage higher volumes of advanced
biofuel. For a given volume of total renewable fuel, higher advanced biofuel volumes would
result in lower conventional renewable fuel volumes. We note, however, that we also considered
other factors when determining the reasonably attainable volume of advanced biofuel for 2016,
as discussed in Section II.F of the final rule.
One stakeholder said that the environmental benefits of corn-ethanol are questionable, and that as
a result EPA should be minimizing the demand for corn-ethanol that is created by the RFS
program and instead emphasizing advanced biofuels. While we agree that the statute places an
emphasis on advanced biofuels as evidenced by the fact that all growth in the statutory targets
after 2014 is in advanced biofuels, we are also bound by the prescriptive nature of the waiver
authorities available to us. Under the general waiver authority, we have not made, nor has any
stakeholder made, a case that the statutory target for total renewable fuel would severely harm
the environment of a state, region, or the United States. Instead, we are reducing the volume
requirements for total renewable fuel based on a finding of inadequate domestic supply. In this
context, we must consider available supply of all qualifying renewable fuels, corn-ethanol
included.
For responses to comments stating that production capacity should be the basis of the volume
requirements, see Section 2.4.
For responses to comments suggesting that obligated parties have failed in their statutory
responsibilities to invest in the infrastructure needed to expand renewable fuel supply, see
Section 2.7.1.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.3.1 Congressional Intent to Increase Volumes
Section 2.3.2 Power of the Market to Respond to Ambitious Standards
Section 2.6.1 E10 Blendwall and Demand for Gasoline
Section 7.1 General Comments on Economic Impacts
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Section 7.2 Agricultural Impacts (food, animal feed, crops, feedstock)
Section 7.6 Energy Security
Section 7.7 Impact on Jobs and Local/State Economy
Section 8.2 Climate Change (GHG Impacts)
Section 10.6.4 Ethanol Impacts on Engines
Section 10.6.5 Other Information and Ideas to Overcome Current Challenges
2.7.4 Impacts on Imports of Sugarcane Ethanol
Comment:
Advanced Biofuels Association (ABFA)
EPA must take into account the impact of state-level mandates on the imports of sugarcane
ethanol. EPA recognized such impacts in the 2012 RVO Proposed Rule, noting that California's
Low Carbon Fuel Standard (LCFS) drives demands for sugarcane ethanol [EPA-HQ-OAR-2015-
0111-2498-A1 p.ll]
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
Sugar cane ethanol use has decreased as a result of the E10 blendwall. Based on 2014 and 2015
EMTS data, 74 million gallons of D5 RINs in 2016 is a reasonable projection [EPA-HQ-OAR-
2015-01 ll-1948-Alp.25]
Archer Daniels Midland Company (ADM)
As previously mentioned, the clear intent of Congress in passing the Energy Independence and
Security Act of 2007 (EISA) was to incentivize and provide market access to domestically
produced renewable fuels to lessen U.S. dependence on foreign sources of fuel. Instead of setting
volumetric standards which would allow fuels to openly compete for access, EPA's RVO
proposal actually incentivizes the importation of foreign renewable fuels at the expense of
domestically produced ethanol and biodiesel. [EPA-HQ-OAR-2015-0111-2262-A1 p. 6]
Brazilian Sugarcane Industry Association (UNICA)
EPA opines in the Proposed Rule that Brazil cannot supply the 3-4.7 billion gallons in advanced
biofuels it calculates would be required between 2015 and 2016 under the RFS2 statutory
volumes, and that Brazil would be unlikely to reach such figures when its highest level of
exports to the United States was 680 million gallons in 2006 and only 64 million gallons in
1 &
2014. As shown above and in Table 4, EPA's figures do not match the figures of the Brazilian
Ministry of Industry and Commerce's Secretariat of Foreign Trade ('SECEX'). [EPA-HQ-OAR-
2015-0111-2495-Alp.lO]
According to Brazil's National Agency of Petroleum, Natural Gas and Biofuels (ANP) the
installed capacity for anhydrous and hydrous ethanol production are 108.67 million and 205.68
million liters per day (more than 5 billion gallons and 10 billion gallons per year, respectively).21
If we look at the most recent harvest season, Brazil produced 3.3 billion gallons and 4.6 billion
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gallons, respectively of anhydrous and hydrous ethanol. The numbers regarding ethanol
productive capacity were based on the 383 producing mills listed by the ANP, and it shows that
installed capacity is superior than the actual production, so in case of a higher demand for
ethanol, Brazil is able to quickly respond to the market. In fact, under the right market
conditions, including more robust volumetric requirements, Brazil can have the capacity to
produce an estimated 2 billion gallons of sugarcane ethanol available for export to the United
States in 2016. [EPA-HQ-OAR-2015-0111-2495-A1 p. 11] EPA is correct that Brazil recently
raised the blend of ethanol in its gasoline from 25 percent to 27 percent (but not 27.5 percent as
incorrectly stated later by EPA). [EPA-HQ-OAR-2015-0111-2495-A1 p. 11]
Indeed, the Brazilian government instituted the higher blend as an economic incentive for
ethanol producers due to an existing overstock of ethanol. [EPA-HQ-OAR-2015-0111-2495-A1
p.ll]
There is no reason that biofuels imported to meet the LCFS should also not count for compliance
with the relevant RFS2 category, so every gallon of sugarcane ethanol imported into California
for blending into qualifying transportation fuel should count toward the advanced biofuel and
total renewable fuel requirements under RFS2 as well. [EPA-HQ-OAR-2015-0111-2495-A1
p.13]
UNICA supports EPA's view that the 2016 proposed volume requirements for advanced biofuel
and total renewable fuels can be met with varying amounts of imported sugarcane ethanol, but
could be higher than 433 million gallons. [EPA-HQ-OAR-2015-0111-2495-A1 p.14]
Two-way trade should not be an issue of concern for EPA. First the issue is not germane to
EPA's rulemaking process. Trade in ethanol is impacted by a number of factors, including
government laws and regulations promoting biofuels. [EPA-HQ-OAR-2015-0111-2495-A1 p.15]
Ultimately, rather than be concerned with two-way trading, EPA should focus on encouraging
Brazilian imports of sugarcane ethanol as a preferred policy, given the fuel's low GHG lifecycle
as compared to corn ethanol. [EPA-HQ-OAR-2015-0111-2495-A1 p. 15]
18 80 Fed. Reg. at 33,116, 33122; see also id. at 33,109 (alleging general limitations on import
capabilities without any further detail).
Growth Energy
In fact, in conjunction with the proposed advanced volume requirements, the proposed renewable
fuel volume requirements would create a counterproductive scenario in which significant
volumes of sugarcane ethanol are imported from Brazil to meet the advanced volume, while
significant volumes of American corn ethanol are exported to meet Brazil's own demand for
ethanol. This "ethanol shuffle" of course results in its own massive greenhouse gas emissions, as
vast quantities of ethanol are shipped back and forth by tanker between the two countries to
satisfy regulatory demands that, ironically, were designed in part to reduce the overall carbon
footprint of the transportation sector. [EPA-HQ-OAR-2015-0111-2604-A2 p.68]
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National Biodiesel Board
Although EPA does not identify a volume of imports it deems could be available in the new
proposal, saying only that 3-4.7 billion gallons are "infeasible," EPA's November 2013 proposal
looked at various estimates of ethanol imports from Brazil into the United States, which found
that as much as 820 million gallons could be available for export in 2014. [EPA-HQ-OAR-2015-
0111-1953-A2p.ll8]
The EIA estimated 871 million gallons of ethanol imports (non-cellulosic) for 2016 (EPA-HQ-
OAR-20130479-0006). In another, the FAPRI-ISU 2012 World Agricultural Outlook projected
that Brazil can have 1.729 billion gallons available for export in 2016 (EPA-HQ-OAR-2013-
0479-0021).% Based on FAPRI's assessment, it could be estimated that approximately 854
million gallons can be available for export to the United States (based on an advanced biofuel
volume of 3.4 billion gallons for 2016).97 These estimates are substantially higher than the
largest volume of sugarcane ethanol (D5) of 433 million gallons in EPA's "volume scenarios."98
[EPA-HQ-OAR-2015-0111-1953-A2p.ll8]
96 Although more recently FAPRI estimated an increase in ethanol imports to 267 million gallons
in 2016, this was based on an estimated advanced biofuel requirement of 2.418 billion gallons.
See FAPRI, U.S. Baseline Briefing Book: Projections for Agricultural and Biofuel Markets,
FAPRI-MU Report #01-15, at 36 (Mar. 2015), available at http://www.fapri.missouri.edu/wp-
content/uploads/2015/03/F APRI-MU-Repoit-01 -15 .pdf.
97 This number is based on using the monthly average from the estimate of 794 million gallons
from September 2015-August 2016 and 974 million gallons from September 2016-August 2017.
See FAPRI, FAPRI-MU Biofuel Baseline, FAPRI-MU Report #02-13, at 4 (Mar. 2013),
available at http://www.fapri.missouri.edu/wp-content/uploads/2015/02/FAPRI-MU-Report-02-
13.pdf.
QO
The volume of ethanol D5 RINs similarly exceeded this amount in 2013, where EPA claims
the ethanol market was saturated.
North Dakota Ethanol Council
We are also concerned that the proposed 2.9 billion gallon 2015 RVO for advanced biofuels will
incent imported sugarcane-based ethanol due to the instability of the biodiesel production credit
and its impact on biodiesel production. Shortfalls in biodiesel production will likely be met by
imported advanced biofuels driven by inflated RIN values improperly incentivizing imported
ethanol into a market that has yet to properly address market expansion. We believe all ethanol
market expansion should be met with conventional and other nationally produced products.
[EPA-HQ-OAR-2015-0111-1927-A1 p. 2] Northern Canola Growers Association
EPA should increase the biomass-based diesel volumes relative to the total Advanced Biofuels
volumes in order to promote the use of domestically produced biodiesel over imported sugar-
cane ethanol. The intent of Congress when they established and expanded the RFS program was
clearly to increase and promote domestic energy production and U.S. energy independence. This
is clearly reflected by the title of the 2007 law - the Energy Independence and Security Act
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(EISA) - which expanded the RFS and established the biomass-based diesel program. [EPA-HQ-
OAR-2015-0111-2036-A1 p.2]
Response:
The Brazilian Sugarcane Industry Association (UNICA) provided comments suggesting that 2
billion gallons of sugarcane ethanol could be supplied to the U.S. in 2016. After further
investigation, we do not believe that this level of import is reasonably achievable in 2016. To
begin with, exports of 2 billion gallons from Brazil to the U.S. would be significantly higher than
total exports to all countries in all previous years, as shown in Figure II.F-2 of the final rule. In
recent years, ethanol exports from Brazil to countries other than the U.S. averaged more than 300
million gallons each year, and Brazil has recently increased ethanol exports to China and has also
increased its own ethanol use requirements. If this were to continue in 2016, total exports from
Brazil would need to reach 2.4 billion gallons in order to supply 2 billion gallons to the U.S. As
described below, we do not believe that the information that UNICA provided supports this
extremely high level of exports to the U.S.
Although UNICA cites a variety of factors that can affect ethanol exports and which are beyond
the control of Brazilian mills and the EPA, it nevertheless based its estimate of potential exports
to the U.S. solely on a combination of Brazilian ethanol production capacity and opportunities
created by the RFS program itself. We believe that UNICA has underestimated the uncertainty
associated with other market factors, including the E10 blendwall in the U.S., changes in
domestic demand for ethanol in Brazil, and competing world demand for sugar. With regard to
sugar, it is true that Brazilian production has been declining for the last several years. However,
between 2005 and 2015, Brazilian production of sugar has increased just as often as it has
decreased, demonstrating that there is uncertainty with regard to worldwide demand for
sugar. We believe it would be imprudent to assume that the downward trend in sugar production
in recent years will continue in 2016.
More importantly, while production of sugarcane has increased moderately in Brazil over the last
several years, total gasoline consumption in Brazil also continues to climb. This leaves little
room for substantial increases in exports of ethanol in 2016. In fact, total consumption of
petroleum in Brazil has increased at a rate of about 4.9% over the last several years, while the
rate of sugarcane production has only grown at a rate of about 2.2%.
Not only do we believe that the facts do not support UNICA's projection of 2 billion gallons
exported to the U.S., but the supply of imported sugarcane ethanol continues to be highly
uncertain and there is little indication that this uncertainty will change in 2016. For instance,
both total ethanol imports and imports of Brazilian sugarcane ethanol have varied significantly
since 2004, as shown in Figure II.F-1 of the final rule. The highest volume of Brazilian
sugarcane ethanol that has ever been imported was 680 million gallons in 2006, and imports
reached 435 million gallons in 2013. However, in 2014 imports were only 64 million gallons,
and the projected annual level of imports for 2015 is about 55 million gallons. Some sugarcane
ethanol will likely be imported in 2016 in order to meet the requirements of California's Low
Carbon Fuel Standard (LCFS), and all such imported sugarcane ethanol will qualify to meet the
RFS standards. However, sugarcane ethanol volumes have also fallen off in recent years under
California's program. Given our assessment of UNICA's estimate of volumes it can export to
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the U.S. in 2016, and our assessment of uncertainty in import volumes as evidenced by the
highly variable historical supply, there is no indication (apart from UNICA's comments) that
imports of sugarcane ethanol in 2016 will be markedly different from recent levels.
One stakeholder noted that we had made more specific, and considerably higher, projections of
imports of sugarcane ethanol in past rulemakings. For instance, in the November 29, 2013
NPRM, we cited a report from Iowa State University which projected up to 820 million gallons
in 2014, and a FAPRI report that projected 1,259 million gallons in 2014. In response to the
February 7, 2013 NPRM, UNICA projected that Brazil could supply 800 mill gal of sugarcane to
the U.S. in 2014. Despite these optimistic projections, actual imports of sugarcane ethanol in
2014 were only 64 million gallons. These results demonstrate the high degree of uncertainty in
projections of imports. Projections from EIA and FAPRI of imports that could occur in 2016,
which were referenced by this stakeholder, must similarly be treated with caution.
For the purposes of determining the 2016 volume requirement for advanced biofuel, we assumed
that imports of sugarcane ethanol would reach 200 million gallons. This level is considerably
higher than the levels reached in 2014 and 2015, but lower than the average over the last ten
years. It reflects the fact that imports have historically been highly variable and thus are
extremely difficult to predict with precision, but nevertheless the standards we set for 2016 can
create some incentive for increased imports. However, we note that the volume requirements we
are setting for 2016 do not require a specific volume of imported sugarcane ethanol, nor any
other specific type of renewable fuel. The scenarios provided in Table II.G-2 of the final rule
provide examples of different ways that the market may respond to the 2016 volume
requirements, and these scenarios include a range of volumes of imported sugarcane ethanol.
Several stakeholders also pointed to the potential for so-called "circle trade" between the U.S.
and Brazil as a reason to either reduce the applicable volume requirement for advanced biofuel in
such a way as to limit imports of sugarcane ethanol, and/or to increase the required volume of
BED. In this circle trade, corn-based ethanol is exported from the U.S. to Brazil at the same time
that sugarcane ethanol is exported from Brazil to the U.S. This has undoubtedly occurred in the
past, though the circle trade volumes have represented only 21% of all ethanol imports and
exports between the two countries that occurred between 2010 and 2014.24 However, there has
been a high degree of variability in sugarcane ethanol imports into the U.S., and also a high
degree of variability in the export of corn ethanol to Brazil. In some years the U.S. exported
more ethanol to Brazil than Brazil exported to the U.S., while in other years the opposite
occurred. This indicates that there are a wide variety of factors driving imports and exports of
ethanol, and "circle trade" does not appear to have been the major one in the past. Nevertheless,
to the degree that circle trade increased in response to higher RFS volume requirements for
advanced biofuel, the GHG benefits associated with the advanced biofuel volume requirement
would be reduced. However, we do not believe that these considerations justify requiring less
than reasonably attainable volumes of advanced biofuel, since despite these considerations, there
is a substantial GHG reduction benefit associated with the use of advanced biofuels, including
sugarcane ethanol. Also, this does not provide a basis for increasing the required volume of
BED. The advanced biofuel requirement is set at a level that will require reasonably attainable
24 Between 2010 and 2014, circle trade represented about 21% of all ethanol imports and exports between the U.S.
and Brazil. See "Analysis of circle trade between the US and Brazil," docket EPA-HQ-OAR-2015-0111.
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volumes of BED as well as sugarcane ethanol, and we believe that the advanced standard will in
fact drive BED use to these levels, which are higher than is required by the separate BED
standard. As discussed in Section III of the final rule, we believe it is important to allow
competition within the advanced standard between BED and other types of advanced biofuels,
and have set the BED volume requirement accordingly.
For responses to comments on the relative role of domestic versus imported renewable fuels in
meeting the volume requirements under the RFS program, see Section 2.1
For responses to comments suggesting that the E10 blendwall can be addressed by increasing the
required volumes of BED, see Section 2.5.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.3.1 Congressional Intent to Increase Volumes
Section 2.3.2 Power of the Market to Respond to Ambitious Standards
Section 2.4.3 Proposed Total Renewable Fuel Volume for 2016
Section 2.5.3 Proposed Advanced Biofuel Volume for 2016
Section 2.6 Ethanol Consumption
Section 2.6.1 E10 Blendwall and Demand for Gasoline
Section 2.7.5 Impacts on Imports of Conventional Biodiesel
Section 3.2.3 Imports of BED
Section 3.2.5 Federal Tax Credit for Biodiesel
Section 3.3.1 Balance between Supporting the BED Industry and Ensuring
Opportunities for Other Advanced to Grow
Section 3.4.2 Increases in BED Displace Other Advanced, not Diesel
Section 7.4 Impact on RINs
Section 7.6 Energy Security
Section 7.7 Impact on Jobs and Local/State Economy
Section 8.2 Climate Change (GHG Impacts)
2.7.5 Impacts on imports of Conventional Biodiesel
Comment:
International Council on Clean Transportation
As described above in our comments on the advanced biofuel volumes, we suggest that EPA
consider reducing the renewable fuel volumes further, to reflect the reduced advanced volumes
suggested above. As noted above, this would maintain support for E85 deployment without
adding substantial pressure on BED production and U.S. oil and fat supplies, or forcing high
imports of conventional biodiesel with questionable environmental performance.
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Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
Specifically with respect to conventional biodiesel, EPA observed that "greater BED production
reduces the likelihood of large imports of palm biodiesel because these two fuels compete
against one another." Yet, even in scenarios where EPA assumed biomass-based diesel
consumption of nearly 2.1 billion gallons, EPA still assumed maximum conventional biodiesel
consumption of 250 million gallons. [EPA-HQ-OAR-2015-Oil 1-2603-A2, p.37]
There is another problem concerning EPA's projections of conventional biodiesels—
specifically, with respect to palm-based biofuels. EPA has declined to approve those biofuels as
an eligible feedstock to generate RINs under RFS2 because they fail to meet the greenhouse gas
reduction standards of the RFS program. The only reason palm oil imports contribute to the RFS
program in the first place is because EPA grandfathered a handful of plants able to continue
using the feedstock to produce D6 RINs.104 [EPA-HQ-OAR-2015-0111-2603-A2, p.37]
Indeed, six months into the year, it appears the economy has imported slightly less than 11
million gallons of sugarcane ethanol.109 In light of this, even if EPA can point to certain
projections that Brazilian ethanol will recover, it is more prudent to cap consumption in its
scenarios at closer to the current level of observed imports. [EPA-HQ-OAR-2015-0111-2603-
A2, pp.38-39]
104 Platts, US biodiesel imports in July hit year-to-date high: Census Bureau (Sept. 4, 2014),
http://www.platts.com/latest-news/shipping/montreal/us-biodiesel-imports-in-july-hit-year-
todate-21183120.
109 U.S. EPA, 2015 RFS2 Data, http://www.epa.gov/otaq/fuels/rfsdata/2015emts.htm.
Response:
Some stakeholders said that the volume requirements that EPA sets should not provide an
incentive to import conventional biodiesel, as it would most likely be produced from palm oil
and thus would not meet the 20% minimum GHG reduction required under the statute for
conventional renewable fuel.25Łlj In the context of determining the 2016 volume for total
renewable fuel using the general waiver authority, we must consider all potential sources of
qualifying renewable fuel that impact the assessment of "inadequate domestic supply." We
cannot refuse to consider renewable fuels that may produce lower GHG benefits if they
nevertheless qualify under the RFS program. However, once the volume requirements are set,
the market will determine the mix of renewable fuels that is supplied to meet those
requirements. In addition to conventional biodiesel and renewable diesel, the need for
conventional renewable fuel can be filled with corn ethanol to the degree that the market can
expand use of E15 and/or E85, or excess volumes of advanced biofuel above the advanced
biofuel volume requirement.
25 There is currently no RIN-generating pathway for biodiesel produced from palm oil. As a result, the only way
that RINs could be generated for biodiesel made from palm oil is if the facility has been grandfathered under 40
CFR 80.1403. In this case, it would qualify as a renewable fuel under the RFS program even though it may not
produce the minimum 20% GHG reduction that is otherwise required.
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One stakeholder pointed out that the range of conventional biodiesel volumes included in the
scenarios in in Table II.D.2-2 of the NPRM was larger than the actual supply of conventional
biodiesel in 2014. The range of volumes in the NPRM scenarios was based on the number of
RINs generated in the past for conventional biodiesel and renewable diesel before corrections
were made to account for such events as spills, enforcement actions, and fuel used in non-
transportation activities. Under the influence of higher volume requirements, regulated parties
would have greater incentive to avoid the circumstances that led to these corrections, and thus
the number of RINs generated may be available for demonstrating compliance. We note also
that the volume of conventional biodiesel and renewable diesel for 2015 is projected to be about
twice as high as the volume in 2014 - 110 million gallons versus 53 million gallons. This fact
supports our view that supply of conventional biodiesel and renewable diesel can continue to
grow in 2016.
One stakeholder said that we had provided contradictory information in the NPRM in the context
of possible volumes of conventional biodiesel. While Table II.D.2-2 of the NPRM shows some
scenarios with both high levels of conventional biodiesel and high levels of BED, the text
following that table says that "greater BED production reduces the likelihood of large imports of
palm biodiesel because these two fuels compete against one another." (80 FR 33129) However,
this stakeholder failed to note that the highest level of conventional biodiesel in the scenarios
table (250 million gallons) was not, in fact, paired with the highest level of BED (2,131 million
gallons) in a single scenario. Moreover, the quoted text was meant to highlight the fact that "The
probability that the upper limits of all sources shown in Table II.D.2-2 could be achieved
simultaneously is extremely unlikely." The NPRM was thus not focused on the total potential
volumes of biodiesel (advanced + conventional), though it is true that different sources of
biodiesel will compete with one another for access to consumers given various constraints
associated with infrastructure. Instead, the focus of the discussion of the volume scenarios was
on the fact that it would be inappropriate to estimate the total potential volumes of the sum of all
renewable fuels based on the highest volumes of each sources shown in Table II.D.2-2.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.7.1 Achievable Volumes of E85 Consumption
Section 2.7.4 Impacts on Imports of Sugarcane Ethanol
Section 3.2 Factors Affecting Supply and Consumption
Section 3.2.1 Availability of Feedstocks
Section 3.2.3 Imports of BED
Section 8.2 Climate Change (GHG Impacts)
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3. Proposed National Volume Requirement for Biomass-Based Diesel for
2014-2017
3.1 General Comments on Biomass-Based Diesel
Comment:
Advanced Biofuels Association (ABFA)
One of the true success stories of the RFS2 is found in the biomass-based diesel pool. Renewable
diesel and biodiesel as well as renewable heating oil and jet fuel have made significant
contributions to the overall program and have delivered the bulk of the advanced biofuel
category gallons to date. This is extremely important as diesel and jet fuel demand are the fastest
growing product demands across the world. These fuels traditionally are not able to use ethanol
as part of their mix and yet those engines are some of the largest in the world in terms of CO2
emissions. It is essential in dealing with our climate change challenges that lower carbon fuels
are available going forward for large ocean going vessels, airplanes, and heavy duty engines and
trucks. EISA set the biomass-based diesel RVO at a minimum of 1 billion gallons and the current
administration adjusted that volume to 1.28 billion gallons in 2012 to reflect the increasing
production of the category. [EPA-HQ-OAR-2015-0111-2498-A1 p.4-5]
Ag Processing, Inc.
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 220.]
The biodiesel industry has created thousands of jobs and provides clean-burning and high-
performance transport fuel for our country. The industry needs regulatory stability in a multiyear
framework to maximize production capabilities. However, recent delays in the implementation
of the RFS has led to uncertainty and hardship for U.S. biodiesel producers. Lost economic
activity, reduced commodity prices, and layoffs at many of these production facilities has
resulted.
Bates White
It is also unnecessarily low, given that there is considerable excess U.S. production capacity,
there are ample feedstocks, there is no blend wall, and there is little risk of adverse impacts on
retail fuel prices. From an economic perspective, given its cost effectiveness in reducing CO2
emissions, further increasing RFS2 biodiesel volumes is a no-brainer.
Biotechnology Industry Organization
EPA inaccurately asserts, "In 2012 the available BED RINs were slightly less than the BED
standard."166 In making this assertion, EPA compares the statutory volumes to the number of
generated RINs; to correctly assess RIN availability, the agency must compare the obligation as
a function of RVO percentages applied to actual fuel volumes. The BED RVO for 2012 was 0.91
percent of a total non-renewable fuel volume of 171.4 billion gallons of non-renewable fuel, or
roughly 1.56 billion RINs (equivalent to 1 billion gallons of biomass-based diesel). More than
1.47 billion 2012 vintage D4 RINs have been retired, and more than 355 million 2011 vintage
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D4 RINs were retired in excess of the 2011 RVO, indicating they were rolled over to meet the
2012 obligation. This was apparently more than enough to satisfy the 2012 obligation, since an
additional 182 million 2012 vintage RINs are still available for compliance in future years, and
more than 176 million were held by obligated parties as of April 1, 2015.167 At a minimum,
EPA's assertion of a shortage of 2012 D4 RINs needs more justification and explanation. EPA
has not stated explicitly whether obligated parties fully satisfied the 2012 RVOs. [EPA-HQ-
OAR-2015-0111-1958-A2p. 50-51]
166 Proposed Rule 33133.
California Biodiesel Alliance (CBA)
First, we would like to express our thanks to the EPA for withdrawing the NPRM that was issued
in 2013. In our public comment in response to the 2013 draft proposal, CBA predicted that a
mandate of only 1.28 billion for biomass-based diesel for 2014/2015 would be devastating to our
burgeoning biodiesel market. The biodiesel industry had demonstrated its ability to produce 1.8
billion in 2013, and obligated parties were holding substantial REST carryovers. Unfortunately, we
were right to be concerned. In 2014, as a result of the poor market conditions created by the lack
of a strong biodiesel mandate, four of California's eleven biodiesel plants closed their doors. 1
Other plants scaled back production, laid off workers, deferred expansion projects and lost
investment opportunities. [EPA-HQ-OAR-2015-0111-1910-A1, p.l]
1 The four plants that closed are: Yokayo Biofuels, Blue Sky Biofuels, Promethean Biofuels and Bently Biofuels
Canola Council of Canada
It is important to note that biodiesel from canola oil can also be used in other applications, not
just motor vehicle use. Research into additional biofuels from canola oil, such as renewable
diesel, continues. [EPA-HQ-OAR-2015-0111-2484-A1 p.4]
Cool Planet Energy Systems
We also support raising the level of the D4 pool to a higher level than 1.28 and believe it could
also be justified about 1.9 billion gallons. We also agree a balancing must be done with respect
to those gallons that can be generated in the D5 pool which are undesignated. We must have an
opportunity to give all technologies a chance to participate particular in the short term to allow
for the lowest cost producers to emerge in the sector. [EPA-HQ-OAR-2015-0111-2572 p. 1]
Green Plains, Inc.
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 260.]
Another ongoing concern for our biodiesel customers has been the very slow response from EPA
regarding requests for clarifications and guidance on many issues. Some requests for what would
appear to be straightforward points of clarification have taken up to 1 year to receive guidance
on, and many times the guidance generates more questions for clarification.
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Illinois Soybean Growers (ISG)
The biodiesel industry has met or exceeded the RFS volume requirements every year and has
continued to increase production annually since 2010. The recently proposed biodiesel standards
are a dramatic improvement from the initial draft in November 2013; however, they are still
much lower than production levels. According to your agency, the U.S. produced a record-
breaking 1.8 billion gallons of biodiesel in 2013. [EPA-HQ-OAR-2015-0111-3428 p.l]
Biodiesel is not only beneficial for Illinois soybean farmers and consumers, its better for our
environment. It has the highest energy balance of any fuel, returning 5.54 units of energy for
every unit of fossil fuel needed to produce it. Its made right here in the U.S., supporting
Congress intent to promote domestic energy production and independence with the RFS
program. [EPA-HQ-OAR-2015-0111-3428 p.2]
Mass Comment Campaign sponsored by Biodiesel.org (email) - (93)
According to the EPA's own calculations, biodiesel delivers more significant greenhouse gas
emissions reductions than any other domestic, commercial-scale fuel on the national market. It is
supporting tens of thousands of jobs across the country, and perhaps most importantly, it is
helping us diversify our fuel supplies and reduce our dangerous dependence on petroleum. Our
dependence on a finite commodity — oil — threatens not only our economic stability but also
our national security. We should be working as aggressively as we can to encourage the
development of clean alternative fuels so that we aren't leaving future generations with a
continued dependence that will only become more dangerous as global supplies are depleted.
[EPA-HQ-OAR-2015-0111-0211-A1 p.l]
Mass Comment Campaign sponsored by soybean farmers (email) - (8)
including a more diversified energy market; increased domestic energy production; significant
reductions in greenhouse gas emissions resulting in improved air quality; new jobs and economic
development, particularly in rural America; expanded markets for soybean farmers and a market
for soy oil displaced from food markets due to trans fat issues; and reduced soy meal feed costs
for livestock producers. [EPA-HQ-OAR-2015-0111-1480-A1 p.2]
As you know, biodiesel is a domestic, renewable fuel source and the most prevalent and
commercially available advanced biofuel. The EPA itself has determined that biodiesel reduces
lifecycle greenhouse gas emissions by 57 percent to 86 percent compared to petroleum diesel.
Substituting higher amounts of biodiesel for traditional diesel fuel is a simple, effective way to
immediately reduce diesel emissions. Since biodiesel provides a greenhouse gas benefit
compared to the petroleum-based diesel it is replacing, increasing its use will contribute to
reduced climate change impacts. [EPA-HQ-OAR-2015-0111-1480-A1 p.2]
Biodiesel has and will continue to create and sustain jobs in the United States, including many in
rural America. A recent economic study conducted for the National Biodiesel Board estimates
that the biodiesel industry, at 1.7 billion gallons of production, supports more than 62,000 jobs,
$2.6 billion in wages, and $16.8 billion in overall economic impact. The industry's economic
impact is poised to grow significantly with continued production increases. The industry
supports jobs in a variety of sectors, from manufacturing to transportation, agriculture and
service industries. [EPA-HQ-OAR-2015-0111-1480-A1 p.2]
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Mass Comment Campaign submitted by employees of New Leaf Biofuel (web) - (24)
We are writing you today to ask you to increase the biomass-based diesel requirement under the
Renewable Fuel Standard because we strongly believe that our entire company all of our jobs
depend on it. [EPA-HQ-OAR-2015-0111-2048-A1 p.l]
Missouri Soybean Association (MSA)
the Missouri Soybean Association (MSA) urges EPA to —include additional biodiesel growth in
the Renewable Fuel Standard (RFS) volumes to be finalized later this year. While we believe the
recent proposal for biodiesel under the RFS was a step in the right direction, it does not fully
capitalize on biodiesels benefits and potential for growth. [EPA-HQ-OAR-2015-0111-3304 p. 1]
According to the EPAs own calculations, biodiesel delivers more significant greenhouse gas
emissions reductions than any other domestic, commercial-scale fuel on the national market.
Perhaps most importantly, it is helping us diversify our fuel supplies and reduce our dependence
on petroleum, which threatens our economic stability and national security. We should be
working as aggressively as possible to encourage the development of clean alternative fuels so
that we arent leaving future generations with a continued dependence that will only become more
dangerous as lobal supplies are depleted. [EPA-HQ-OAR-2015-0111-3304 p.l]
National Association of Truck Stop Operators (NATSO)
NATSO is the premier trade association representing travel plaza and truck stop owners and
operators. Highway travel plazas and truck stops sell 90 percent of all diesel fuel sold at retail in
the United States. Thus, in light of the integral role that biodiesel plays in satisfying the RFS's
objectives, the success of the RFS will hinge on NATSO's members' ability to sell biodiesel on a
cost-effective basis. [EPA-HQ-OAR-2015-0111-2478-A1 p.2]
As it proceeds with this rulemaking, EPA must be cognizant of the variety of policy and
economic factors that influence the price - and thus market demand for - biodiesel. Any policy
changes that would lead to an increase in the price of biodiesel in the United States would lower
consumer demand for biodiesel and restrict the Agency's ability to set ambitious RVOs. [EPA-
HQ-OAR-2015-0111-2478-A1 p.3]
Highway travel plazas and truck stops sell 90 percent of all diesel fuel sold at retail in the United
States. NATSO members prefer long markets with a variety of supply options to offer their
customers. As with any successful retailer, NATSO members simply want to sell products that
their customers want to buy. In their effort to provide the most competitively priced fuel to their
customers, many NATSO members buy and blend biodiesel into the diesel fuel sold at their
locations. While the entire industry is not involved in blending biodiesel, many NATSO
members buy and blend biodiesel into diesel fuel when the blending economics allow them to do
so. As the biodiesel industry matures, more and more truck stop operators are considering
expanding into biodiesel blending.
The success of the Renewable Fuel Standard will hinge on NATSO's members' ability to
acquire, blend, and sell biodiesel on a cost-effective basis relative to traditional diesel fuel.
Given the central importance of trucking and diesel fuel in our nation's supply chain for goods,
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low-cost biodiesel not only makes fuel cheaper for fleets and truck drivers, but it subsequently
makes all goods more affordable. [EPA-HQ-OAR-2015-0111-2478-A1 p.3]
National Biodiesel Board
While NBB appreciates EPA's move to get on track and set the volumes for biomass-based
diesel over several years, EPA's proposal for biomass-based diesel fails to reflect its key
contributions to the program or to fulfill the intent of Congress. [EPA-HQ-OAR-2015-0111-
1953-A2p.23]
In the new proposal, EPA continues to ignore expected increases in use of renewable fuel outside
the gasoline pool. While ethanol represents the largest volume of renewable fuel currently in use,
EPA's focus on addressing purported constraints in the gasoline market for using increased
volumes of ethanol fails to account for Congress's expectation to increase use of renewable fuels
in the diesel pool, including in non-road applications, heating oil and jet fuel applications. [EPA-
HQ-OAR-2015-0111-1953-A2 p.32]
EPA should continue to promote increased use of renewable fuel in heating oil. [EPA-HQ-OAR-
2015-0111-1953-A2p.l28]
EPA has recognized that biodiesel is increasingly being used as heating oil as well. 80 Fed. Reg.
at 33,116. EPA has clarified and expanded the definition of heating oil.112 These clarifications
may also expand the use of advanced biofuels, including biodiesel and renewable diesel, in the
heating oil market. Heating oil is not accounted for in setting the RVOs and, therefore, any
renewable fuel used in this market is "excess" production. [EPA-HQ-OAR-2015-0111-1953-A2
p.128]
Northern Canola Growers Association
As you know, biodiesel is the most prevalent advanced biofuel currently produced in the United
States and the industry has met or exceeded the RFS biomass-based diesel volume requirements
each and every year they have been in place. [EPA-HQ-OAR-2015-0111-2036-A1 p.2]
San Diego Regional Clean Cities Coalition
Biodiesel and biomass-based diesel are desirable alternative fuel options for fleets, since they can
be used with their existing diesel vehicles. Locally produced fuel is used by fleets in high level
blends as well as blended into the fuel supply. This lowers both our regional petroleum
consumption and contributes to our national goals. [EPA-HQ-OAR-2015-0111-1719-A1 p. 1]
Sprague Operating Resources LLC
While the recent proposal for biodiesel under the program moves in the right direction, we
believe it does not fully capitalize on biodiesel's benefits and potential for growth. Congress
intended to have increasing volumes of renewable fuel in the diesel fuel pool, which includes
transportation, off-road and heating oil applications, and EPA has recognized that biodiesel is
increasingly being used as heating oil. [EPA-HQ-OAR-2015-0111-1924-A1 p. 1]
According to the EPA's own calculations, biodiesel delivers more significant greenhouse gas
emissions reductions than any other domestic, commercial-scale fuel on the national market. It is
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supporting tens of thousands of jobs across the country, and perhaps most importantly, it is
helping us diversify our fuel supplies. The six criteria for biodiesel growth outlined in the RFS
statute have clearly been met. The benefits are clear in terms of cost-effective pollution
reduction, job creation, tax revenues and energy security. It also is clear that the biodiesel
industry has the ability and capacity to increase production above and beyond the standards
called for in your recent proposal, particularly when you consider the potential for sharply
increased imports qualifying for the RFS. [EPA-HQ-OAR-2015-0111-1924-A1 p.2]
Western Canada Biodiesel Association
According to the EPA's own calculations, biodiesel delivers more significant greenhouse gas
emissions reductions than any other domestic, commercial-scale fuel on the national market. It is
supporting tens of thousands of jobs across the country, and perhaps most importantly, it is
helping us diversify our fuel supplies and reduce our dangerous dependence on petroleum.[EPA-
HQ-OAR-2015-01 11-0265-A1]
Response:
The EPA received numerous general comments favoring increasing the BED volume
requirements beyond what we had proposed. As required under the Clean Air Act, in developing
this final rule, the EPA reviewed the implementation of the renewable fuels program, all the
factors required under the statute, comments received, and coordinated with the Departments of
Energy and Agriculture. EPA recognizes that there are many different views on what is the
appropriate level for the biomass-based diesel applicable volume for 2014-2017. EPA has
endeavored to consider all comments and has weighed the statutory factors to reach a decision
that is appropriate and reasonable.
As a result of this review we believe that it is appropriate, as we did for advanced and total
renewable fuel in 2014 and 2015, to establish the 2014 and 2015 volume requirements for BED
to reflect actual supply (including a projection for the latter part of 2015 that is primarily based
on supply in the earlier part of the year for which data is available). For 2016 and 2017, to
provide continuing support to the BED industry, recognizing the important role that BED plays
in the RFS program, as well as to help ensure that higher volume requirements for advanced
biofuel can be reached, we believe that it is appropriate to increase the BED volume requirement
for each of these years while maintaining room under the advanced biofuel standard for growth
from other renewable fuels.
Thus, based on a review of the implementation of the program to date and all the factors required
under the statute, we are finalizing the 2014 and 2015 BED volume requirement at the actual
volumes of 1.63 and 1.73 billion gallons, respectively, and we are also finalizing increases in the
applicable volume of BED to 1.9 and 2.0 billion gallons for years 2016 and 2017, respectively.
We believe that these increases support the overall goals of the program while also maintaining
the incentive for development and growth in production of other advanced biofuels.
For instance, there are advantages to providing some additional stability to the biomass-based
diesel industry. This industry is currently the single largest contributor to the advanced biofuel
pool, one that to date has been largely responsible for providing the growth in advanced biofuels
envisioned by Congress. Nevertheless, there has been variability in the number of biodiesel
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facilities in production over the last few years, as well as the percent utilization of individual
facilities, both of which contribute some uncertainty to the rate of production growth that can be
achieved in the near future, and which can be mitigated to some degree with a moderate increase
in the biomass-based diesel applicable volume.
Arguments in favor of increasing the required volume must be balanced, however, against the
benefits, as described in the NPRM, of EPA retaining a substantial degree of neutrality with
regards to the types of advanced biofuel that are used to meet the advanced biofuel standard.
Allowing competition among qualifying advanced biofuels types provides an incentive for
innovation, and could lead to the development of new fuels with advantages, including increased
volume potential, potentially lower costs, and greater environmental and energy security benefits
that are as yet unforeseen.
Various commenters expressed concern that recent delays in implementation of the RFS as well
as lower standards initially proposed for BED have undercut certainty for biodiesel producers,
particularly smaller producers, causing reduced commodity prices, layoffs at some production
facilities and even shut downs. While our standards cannot protect companies from shutting
down for the many different reasons companies close (inefficient, high cost, poor market
conditions, unfortunate events, etc.) the final BED standards provide a floor that provides
certainty for greater volumes of BED volumes than today, and the total renewable fuel and
advanced biofuel standards are expected to drive even higher volumes. As a result, the final RFS
standards should create the right market conditions for biodiesel companies to grow and flourish.
Another commenter expressed concern at the slow response from EPA regarding requests for
clarifications and guidance on many issues associated with the RFS program. EPA acknowledges
that the biodiesel industry along with the entire renewable fuel industry needs regulatory stability
and we believe that this final multiyear framework we are finalizing addresses this need. The
final rule represents EPA's commitment and continued support for steady growth in renewable
fuel use. One commenter questioned EPA's statement in the NPRM that, "in 2012 the available
BED RINs were slightly less than the BED standard". As stated in Section III. D.I of the final
rule, in reviewing the implementation of the RFS program to date, it is apparent that the
advanced and/or total renewable fuel requirements were in fact helping grow the market for
volumes of biodiesel above the BED standard. Table III.D.1-1 in the final rule and reproduced
below shows the number of BED RINs generated and available for use towards demonstrating
compliance in each year from 2011 - 2013. RINs available for use equals the number of RINs
generated minus the number of RINs retired (or that we anticipate will be retired) for any reason
other than a demonstration of annual compliance, such as RINs retired for exported biofuel,
volume error corrections, enforcement actions, fuel used in applications other than transportation
fuel, heating oil, or jet fuel, etc. As can be seen from this table, in 2011 and 2013 the number of
BED RINs available for use exceeded the volumes required to satisfy the BED standard. In
2013 the number of advanced RINs generated from fuels other than BED was not large enough
to satisfy the implied standard for "other advanced" biofuel (advanced biofuel that is not BED or
cellulosic biofuel), and BED filled the gap. In fact, the amount by which the available BED
RINs exceeded the 1.28 billion gallon BED volume requirement (421 million RINs) was slightly
larger than the amount by which the non-BBD RINs fell short of satisfying the "other advanced"
biofuel implied standard (285 million RINs). This supports the conclusion that the advanced
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biofuel standard provided an incentive to support a BED volume in the United States in excess of
that required to satisfy the BED standard.
In 2012 the available BED RINs were slightly less than the BED standard, despite the continued
opportunity for BED to contribute towards satisfying the advanced and total renewable fuel
volume requirements. There are a number of reasons this may have been the case. The drought
in 2012 resulted in reduced production of soy beans and other oilseed crops that provide
feedstocks for the BED industry. Compounding this effect was the lower corn harvest in 2012,
which increased the demand for soy beans and other fats and oils in the animal feed market. The
biodiesel tax credit, which had been in place since the end of 2010, expired at the end of 2011.
Finally, and perhaps most significantly, the E10 blendwall had not yet been reached in 2012.
This meant that meeting the advanced biofuel requirements through the use of advanced ethanol,
primarily sugar cane ethanol, in E10 blends, rather than additional volumes of BED was still an
attractive option. Indeed, in 2012 over 600 million RINs were generated for advanced ethanol.
While we believe these circumstances are unlikely to be repeated in future years, this does
demonstrate that the BED standard can still have an impact despite the ability for the advanced
and total renewable fuel volume requirements to incentivize additional biodiesel and renewable
diesel volumes beyond the BED standard.
Table IILD.1-1
Biomass-Based Diesel and Advanced Biofuel RIN Generation and Standards (million gallons)
2011
2012
2013
Available BED
(RINs)
1,484
1,465
2,360
BED Standard
(RINs)
1,200
1,500
1,920
Available Non-
Biodiesel
Advanced Biofuel
225
597
552
"Other" Advanced
Biofuel Allowed
150
500
830
3.2 Factors Affecting Supply and Consumption
Comment:
Baker Commodities
As a result of these inherent disadvantages, it is extremely important for the RFS Program to set
the biomass-based diesel mandate at a level that continues to push the boundaries on the
production and import capacity for biodiesel. This will ensure that companies like Baker are
given proper market signals to build and expand biodiesel plants that will contribute to a more
diverse biodiesel pool with lower GHGs. [EPA-HQ-OAR-2015-0111-1907-A1 p.3]
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Canola Council of Canada
The increasing volume requirements under the RFS2 program have provided greater certainty to
support further investment. Thus, the RFS2 program has helped spur further research and
innovation, supporting efforts to increase yields, to improve the sustainability of and efficiencies
in feedstock production, and expand biofuel production and use. Canola oil has been a significant
contributor to these efforts in helping move the renewable fuel industry forward. [EPA-HQ-
OAR-2015-0111-2484-A1 p.4]
Growth Energy
EPA also substantially underestimates the amount of BED that could be distributed and
consumed in excess of the proposed BED mandate. As discussed above, EPA recognizes that
existing BED production capacity is sufficient to generate at least 4.2 bil RINs per year. Yet
EPA appears to assume that total BED production will generate hundreds of millions or even
more than one billion fewer RINs than capacity in 2016.306 EPA gives no explanation for why
more available production capacity could not be used. [EPA-HQ-OAR-2015-0111-2604-A2
p.52]
306 See 80 Fed. Reg. at 33,127, Table II.D.2-2-2 & n.b (indicating EPA's expected range of BED and conventional
biodiesel RIN generation in 2016).
Illinois Soybean Growers (ISG)
In addition to the soybean farmers we represent, livestock producers benefit greatly from
biodiesel. Biodiesel is made only from the oil portion of the soybean, so all of the protein found
in soybeans is leftover in soybean meal, which is a great source of nutrition for livestock. By
creating demand for the soybean oil, biodiesel increases the availability of protein-rich meal for
livestock feed and consumer food products. [EPA-HQ-OAR-2015-0111-3428 p.2]
Kansas Soybean Association
While the recent proposal for biodiesel under the program was a step in the right direction, it
does not fully capitalize on biodiesels benefits and potential for growth. The U.S. biodiesel
industry has the capacity and has demonstrated its ability to increase production above the levels
in the Proposed Rule, particularly when you consider U.S. production capacity, feedstock
availability, and the potential for increased imports of biodiesel qualifying for the RFS. [EPA-
HQ-OAR-2015-0111-2340 p. 1] [EPA-HQ-OAR-2015-0111-1044 p.27]
Mass Comment Campaign sponsored by soybean farmers (email) - (8)
While the recent proposal for biodiesel under the program was a step in the right direction, it
does not fully capitalize on biodiesel's benefits and potential for growth. The U.S. biodiesel
industry has the capacity and has demonstrated its ability to increase production above the levels
in the Proposed Rule, particularly when you consider U.S. production capacity, feedstock
availability, and the potential for increased imports of biodiesel qualifying for the RFS. [EPA-
HQ-OAR-2015-0111-1480-A1 p.l]
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Metropolitan Energy Center
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 46-47.]
But it's clear by now that it's imperative that many stakeholders, the public agencies and private
businesses of Kansas and Missouri, not to mention the farmers and their families and the biofuel
refineries, imperative that they have a stable regulatory environment so a mature biodiesel
market can finally maturely develop. If biodiesel - if biofuels are so great, why do we need a
cumbersome regulation to support them? The short answer is the entrenched petroleum industry.
That industry is currently vital to our way of life, including our economy and national security.
This fact makes it difficult for consumers, including large corporations, to make a decision - to
support domestic renewable fuels just because it's good for the nation. It's clear that the U.S.
biodiesel industry has the ability to produce quality products and the capacity to increase
production above and beyond the standards called for in your recent proposal. We should be
building our domestic industry, and doing so requires strong policy signals.
Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
In Order to Satisfy EPA's Proposed Mandates, Biomass-Based Diesel Consumption Would Need
to Increase to Levels That EPA Has Said Are Merely "Theoretically" Possible.
EPA purported to set the biomass-based diesel mandate at 1.8 billion physical gallons in 2016,
about 200 million physical gallons more than were available for compliance a mere six months
ago. But the effective biomass-based diesel mandate proposed for 2016 is actually much higher.
Even if E85 consumption were to grow robustly over the next six months so that the market has
the capacity to use 100-200 million gallons in 2016, Table II.D.2-2 suggests that the market still
must also use approximately 2.0-2.1 billion physical gallons of biomass-based diesel in order to
achieve the proposed mandates. There is a substantial risk that the market will come up short in
meeting EPA's goal. Moreover, by imposing standards that require biomass-based diesel
production to be pushed to the limits of what is practicable and then beyond those limits, EPA
will cause significant volatility in RIN prices. Accordingly, EPA must revise its advanced and
total renewable mandates downward to more realistic levels. [EPA-HQ-OAR-2015-0111-2603-
A2,p.31]
1. EPA effectively proposed to mandate consumption of biomass-based diesel at levels at or near
what EPA describes merely as "theoretically possible"
According to EPA, the market made available for compliance about 1.63 billion physical gallons
of biomass-based diesel last year, slightly more than the 1.55 billion physical gallons made
available in 2013. Thus, to meet EPA's effective mandate for biomass-based diesel of about 2.0-
2.1 billion gallons over the next six to eighteen months, the economy would need to increase the
number of physical gallons available for consumption by about 20 to 29 percent compared to last
year. Yet year-over-year production through the first six months of 2015 has increased only by
16 million physical gallons, or 2 percent compared to this time last year.86 [EPA-HQ-OAR-2015-
0111-2603-A2, pp.31-32]
The notion that the biomass-based diesel production can reach about 2.0-2.1 billion physical
gallons in 2016 also is in tension with EPA's previous acknowledgement that structural
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impediments prevent the industry from quickly and materially increasing domestic production,
which amounted to only 1.46 billion of the 1.63 billion gallons available for compliance in 2014.
EPA should have concluded from that earlier analysis—which EPA relied upon for its exercise
of waiver authority—that it is unrealistic to achieve biomass-based diesel production of 2.0-2.1
billion gallons within six to eighteen months. Instead, EPA relied on its calculation that more
than 2.7 billion gallons of capacity has been registered at one time or another under the RFS
program. But the mere existence of capacity that at one time has been registered says very little
about the market's actual ability to increase domestic production over the next six to eighteen
months to make an additional 322 million gallons or more available.89 [EPA-HQ-OAR-2015-
0111-2603-A2, p.32]
Indeed, EPA acknowledged that such increased biomass-based diesel production may not be
practically achievable. In its own words, EPA was "not able to say whether [2.131 billion
physical gallons] of BED is one that the market could be expected to achieve in 2016,
notwithstanding our belief that such volumes are theoretically possible." If EPA believes
producing 2.131 billion physical gallons in 2016 is only theoretically possible, what basis has it
to believe other targets between 1.952 and 2.065 billion gallons (i.e., the remaining portion of the
range posited in the event E85 consumption reaches 100-200 million gallons) are actually
possible? EPA must revise its advanced and total renewable requirements to levels that can
actually be achieved with some reasonably degree of certainty. [EPA-HQ-OAR-2015-0111-
2603-A2, p.33]
2. EPA has ignored additional factors that could constrain the economy's ability to consume
biomass-based diesel at the levels needed to meet the proposed mandates.
Not only has EPA set an effective biomass-based diesel mandate at a level that by its own
admission is only theoretically possible, and not necessarily achievable in practice, it has also
ignored important market risks that may make its effective mandate impracticable. For example,
EPA has ignored the possibility that diesel consumption will outstrip EIA projections for 2016. If
total diesel usage projections turn out to be too low, then more physical gallons of biomass-based
diesel will be needed to achieve the same fractional advanced and total renewable requirements.
Yet its proposed mandates, based upon current EIA gas and diesel projections, already push
biomass-based diesel production to levels that are only theoretically achievable. EPA appears not
to have considered this possibility in setting advanced and total requirements. It should adjust
mandates to provide more breathing room to meet the requirements with production in 2016.
[EPA-HQ-OAR-2015-0111-2603-A2, pp.33-34]
EPA also has understated the role biomass-based diesel may have to play in filling the renewable
gap by assuming the market will produce 206 million gallons of cellulosic biofuel. If EPA
projections of cellulosic production miss the mark, then even with robust E85 growth, biomass-
based diesel markets may have to make closer to 2.2-2.3 billion gallons available for compliance.
This scenario is in fact likely given EPA's terribly poor track record in projecting cellulosic
production—it has been off by millions of gallons in each of the last several years.94 [EPA-HQ-
OAR-2015-0111-2603-A2, p.34]
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Compare U.S. EPA, 2015 RFS2 Data, http://www.epa.gov/otaq/fuels/rfsdata/2015emts.htm (last visited July 24,
2015) with U.S. EPA, 2014 RFS2 Data, http://www.epa.gov/otaq/fuels/rfsdata/2014emts.htm (last visited July 24,
2015).
89 This figure is derived by using the minimum incremental gallons of biomass-based diesel that EPA posits would
be needed to meet the total mandate in the event that the economy consumed no more than 200 million gallons of
E85 (i.e., 1,952 billion physical gallons).
94 EPA might respond that it could address that sort of issue later—once it is clear the cellulosic industry cannot
perform up to EPA's aspirational projections, EPA could reduce the advanced and total renewable volume
requirements at that time. But that does not justify leaving the market to guess whether it must consume at least 170
million more gallons of biodiesel. And, as EPA recognizes, "changing those requirements during the compliance
year. . . would be disruptive to businesses and therefore to the long-term objectives of the RFS program.. . ." Id. at
33,130.
National Biodiesel Board
In the new proposal, EPA continues to ignore expected increases in use of renewable fuel outside
the gasoline pool. While ethanol represents the largest volume of renewable fuel currently in use,
EPA's focus on addressing purported constraints in the gasoline market for using increased
volumes of ethanol fails to account for Congress's expectation to increase use of renewable fuels
in the diesel pool, including in non-road applications, heating oil and jet fuel applications. [EPA-
HQ-OAR-2015-0111-1953-A2 p.32]
Response:
EPA received a number of comments that discussed the ability of the biodiesel industry to supply
increasing levels of biodiesel and renewable diesel to meet higher volume requirements in 2016
and 2017. In many cases these comments did not differentiate between their support for higher
or lower biomass-based diesel standards and their support for higher or lower advanced biofuel
and total renewable fuel standards on the basis of biodiesel and renewable diesel supply. Factors
affecting supply and consumption of biodiesel and renewable diesel are relevant in setting all
three standards. However, since the total and advanced biofuel standards are expected to be the
main market drivers for growth in biodiesel and renewable diesel volumes, these comments are
addressed in Sections 2.4.3, 2.5.0, 2.5.3, and 2.7.2 of this document, as well as in Sections II.E.3
and II.F of the final rule.
In section II.E.3 of the final rule we discuss the many factors that affect the supply and
consumption of biodiesel and renewable diesel. Several stakeholders claimed that the level of
biodiesel feedstock supply that could be available in 2016 and 2017 combined with the biodiesel
and renewable diesel production capacity that already exists warrant an increase in the BED
volume requirement compared to those we proposed in the NPRM. We also received comments
challenging the availability of additional biodiesel feedstocks and pointing out additional
constraints that limited the opportunity for increased BED volume requirements.
We received widely divergent comments and available data on the potential supply of biodiesel
feedstocks, however, a focus on potentially available feedstock supplies is insufficient as this is
not the only factor to consider in assessing the potential volumes of biodiesel and renewable
diesel in 2016. Neither biodiesel production capacity, nor the supply of oils, fats, and greases
around the world, has ever been the sole constraint on biodiesel and renewable diesel supply to
the U.S. As discussed in section II.E. 3 and 4 of the final rule, there are a number of constraints,
ranging from biodiesel renewable diesel distribution infrastructure to engine compatibility,
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which we believe will constrain the supply of biodiesel and renewable diesel supply in 2016.
Sections 3.2.2-3.2.5 in this document discuss a variety of factors such as imports, limitation on
biodiesel use due to cold weather and engine warranties, availability of federal tax credits which
all impact the supply and consumption of BED.
These constraints do not represent insurmountable barriers, but they do take time to overcome.
The market has been making efforts to overcome these constraints in recent years as
demonstrated by the fact that biodiesel and renewable diesel consumption in the U.S. has been
steadily increasing. We agree with the biofuels industry that more opportunity for ongoing
growth still exists, but we do believe that the constraints listed above will continue to be a factor
in the rate of growth for 2016We believe that the ongoing constraints discussed in section II.E.3
of the final rule mean that the opportunity for growth 2016 is of a similar magnitude to that
which we have experienced in recent years. For 2016 we are projecting the supply of biodiesel
and renewable diesel for use in the United States could reasonably be as much as 2.5 billion
gallons. We believe this value represents the maximum reasonably achievable volume of
biodiesel and renewable diesel that can be supplied to the United States in 2016.
3.2.1 Availability of Feedstocks
Comment:
Advanced Economic Solutions (AES)
Advanced and Biodiesel Proposed RVOs: The proposed advanced biofuel RVO during 2016 has
significant consequences for biodiesel feedstock requirements. EPA should consider reducing
the 2016 advanced biofuel RVO to the level proposed for 2015 (2.90 B gallons). [EPA-HQ-
OAR-2015-0111-1193-A1 p.2] [EPA-HQ-OAR-2015-0111-1043, p. 303]
Even allowing for an increase of imported Argentine biodiesel during 2015 and beyond[l], AES
estimates that the EPA proposed advanced biofuel mandate levels would result in US soy oil use
for the production of methyl ester during 2016 to 5.57 B pounds, a 13% increase from the
previous year. [EPA-HQ-OAR-2015-0111-1193-A1 p.2] [EPA-HQ-OAR-2015-0111-1043, p.
303]
U.S. soy oil usage of 5.57 B pounds would equate to a record 26% of the USDA projected
2015/16 annual US soy oil production. The increase in soy oil demand will be difficult to meet,
as US ending stocks of soy oil are already at historically low levels [2]. The dramatic soy oil
market reaction to the May 29 announcement by the EPA of their proposed mandates should be
recognized as an indicator of adverse reaction to rising biodiesel requirements:
- Nearby July soy oil futures rose by 7.5% in the hours following the announcement of the
proposed RVOs, from $0.321 per pound to $0.345 per pound [3] [EPA-HQ-OAR-2015-0111-
1193-A1 p.2] [EPA-HQ-OAR-2015-0111-1043, p. 303]
The 2016 advanced biofuel RVOs proposed by the EPA have already created a disruption in the
availability and price of the primary feedstock used to produce biodiesel: soy oil. Because of the
importance of soy oil to food companies, EPA decisions with regard to the annual RVO for
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advanced biofuels are already substantially increasing costs for food companies. [EPA-HQ-
OAR-2015-0111-1193-A1 p.3] [EPA-HQ-OAR-2015-0111-1043, pp. 303-304]
[1] Argentine biodiesel earning a D4 RIN is projected at 150 mm gallons and 250 mm gallons during 2015 and
2016, respectively
[2] USDA World Agricultural Supply and Demand Estimates (June 10, 2015)
[3] Chicago Mercantile Exchange
American Soybean Association (ASA)
Biodiesel also has a positive impact on soy meal supplies, which are primarily utilized in animal
feed. Processing biodiesel from soybeans uses only the oil portion of the soybean, leaving all of
the soy meal protein available to nourish livestock and humans. By providing a market for
soybean oil, biodiesel increases the availability of protein-rich meal for human and livestock
consumption. The increased meal supply results in a more cost-effective food and feed source.
From 2006 through 2015 biodiesel production resulted in lower soy meal and thus lower feed
costs for U.S. livestock producers that ranged from $5.9 to 11.8 billion in value.4 [EPA-HQ-
OAR-2015-0111-1818-A1 p.3]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, pp. 25-26.]
The biodiesel market provides an outlet for this surplus soybean oil, which is a byproduct of
soybean production that is driven by the demand for soybean meal for protein.
4 Informa Economics. March 2015. Impact of the U.S. Biodiesel Industry on the U.S. Soybean Complex and
Livestock Sector.
Baker Commodities
EPA also suggests that any increase in the biomass-based diesel pool would come from virgin
soybean biodiesel is not the more innovative, ultra-low carbon feedstocks. However, the record
shows that the proportional use of waste feedstocks such as used cooking oil and animal fats
increases as the biodiesel market grows. When the industry constricted in 2009/2010, the
percentage of waste feedstock use went down. See Figure l.v [EPA-HQ-OAR-2015-0111-1907-
Al p.2]
As shown above, the market potential for biodiesel made from used cooking oil, animal fats and
other lower-valued feedstocks is directly related to the size of the biodiesel market in general.
These lower valued feedstocks are more difficult to work with as they require significant pre-
treatment in order to process quality biodiesel. As a result, more capital is necessary to build a
plant that utilizes lower value feedstocks and the resulting plant will have higher production
costs than traditional first-generation plants. Although we have seen wider consumer acceptance
of fuel made from recycled sources over the last few years, there are still customers who prefer
to use biodiesel that is made from virgin oils. [EPA-HQ-OAR-2015-0111-1907-A1 p.2-3] [The
figure can be found on p. 2 of Docket number EPA-HQ-OAR-2015-0111-1907-A1]
iv EPA states in the Memorandum to docket on the 6 factors: 'For any volume above the 1.0 billion gallon
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minimum, it is appropriate, therefore, to consider the impact of producing BED from soy oil, the feedstock that will
most likely be used at the margin to increase production over levels that can be attained using waste materials and
non-food grade corn oil.'
v David DeRamus, Ph.D., Bates White Economic Consulting, Biodiesel Renewable Fuel Standard: Updated
Analysis of Cost Of Carbon Reduction and Contribution to US CO2 Goals, PowerPoint Presentation, Dated June 29,
2015 (Attachment to Comments of the National Biodiesel Board)
Canola Council of Canada
The Canola Council's mission is to enhance the Canadian canola industry's ability to sustainably
produce and supply seed, oil and protein meal products that offer superior value to customers
throughout the world. The Canola Council includes all members of the canola value chain such
as seed and input companies, growers, exporters, processors, and biodiesel producers. Members
of the Canola Council include companies that own and operate U.S. biodiesel facilities that
utilize canola from Canada as a primary feedstock and that have participated in the RFS2
program. All members have an economic stake in the implementation of the RFS2 program.
[EPA-HQ-OAR-2015-0111-2484-A1 p.2]
Utilizing renewable biomass as a form of energy provides numerous economic and
environmental benefits. Diversification of feedstocks for renewable fuels is also important to
move toward increased use of advanced biofuels. Canola epitomizes these important goals. Both
the government of Canada and the provincial governments have numerous programs that
encourage farmers to employ good farming practices, including conservation of lands. In
particular, canola has a unique place in sustainable crop rotations and played a significant role in
substantially reducing the number of acres of non-sustainable fallow land. Thus, canola is grown
sustainably and in a manner that reduces greenhouse gas emissions associated with its
production. [EPA-HQ-OAR-2015-0111-2484-A1 p.2]
Canola is grown on over 19 million acres in Canada.3 The bulk of Canada's agricultural zone lies
in the south of the country within a few hundred kilometers of the U.S. border, as well as the
southern areas of Ontario, Quebec and the Maritimes. The vast majority of canola oil that is
produced is exported,4 with the United States receiving the majority of those exports.5 Even with
the development of the biodiesel industry in Canada, Canada will remain the largest global
exporter of canola for the foreseeable future.
Economic factors, and general trends in Canada, show that renewable biomass producers in
Canada continue to increase yields and improve utilization of existing lands to meet any
increased demand for crops. Canola production in Canada has been able to increase over the
years based on an increased use of lands that otherwise were left fallow, coupled with
conservation or zero tillage. This has resulted in better and more sustainable use of the existing
land base. Continued advances in technology, and production, have driven yields up further.6
Average per-acre canola yields have risen 50% in fifteen years to 34 bushels per acre in 2014,
and Canada is on track to produce 15 million tonnes of canola a year.7 Plans are to continue
o
increasing yield to 52 bushels per acre by 2025. Thus, canola from Canada continues to provide
a source of feedstock for the U.S. biomass-based diesel industry, and can continue to contribute
in increasing amounts through a sustainable manner. This is precisely the program envisioned by
Congress. [EPA-HQ-OAR-2015-0111-2484-A1 p.3]
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3 Canola Council of Canada, Harvest Acreage (updated Dec. 15, 2014), http://www.canolacouncil.org/markets-
stats/statistics/narvest-acreage/.
4 Canola Council of Canada, Oil Supply and Demand (updated Nov. 21, 2013),
http://www.canolacouncil.org/markets-stats/statistics/oil-supply-and-demand/.
5 Canola Council of Canada, Current Oil Exports (updated July 15, 2015), http://www.canolacouncil.org/markets-
stats/statistics/current-oil-exports/.
6 It should also be noted that production of canola oil provides canola meal, which is one of the most widely used
protein sources in animal feed. See Canola Council of Canada, Canola Meal, http://www.canolacouncil.org/oil-and-
meal/canola-meal/.
7 Canola Council of Canada, Canola can meet the demand, http://www.canolacouncil.org/canola-biodiesel/canola-
biodiesel/canola-can-meet-the-demand/.
8 Canola Council of Canada, Innovation in Action: 2014 Annual Report, available at
http://www.canolacouncil.org/media/564992/CanolaCouncilAR2014/index.html.
Darling Ingredients Inc.
The EPA summarizes its analysis of available feedstock for BED in the Current Proposed Rule
by concluding, The combined volumes of soybean oil, corn oil, and waste oils produced
annually is far more than would be needed to produce 2.1 billion gallons of biodiesel' and the
EPA adds, Tor instance, in 2014 exports of soy oil were 250 million gallons and exports of
rendered fats and greases was 440 million gallons.'1$ With even a small diversion of volume that
is currently being exported the EPA has established there is no feedstock limitation for an
expansion of volumes to those suggested in this submittal. Further, that conclusion ignores the
substantial volume of imported BED which is acknowledged multiple times in the Proposed
Rule. The EPA reports that imports which met the qualifications to fulfill the BED bucket were
340 million gallons in 2013 and 322 million gallons in 2014. The vast majority of the imported
BED utilizes feedstock which is sourced locally (and outside the U.S.) to the BED fuel
production facility and not imported from the United States. That further expands the available
feedstock supply available for the production of Biomass Based Diesel. The EPA has clearly
established in the Proposed Rule there is no feedstock limitation associated with the volumes
being suggested by Darling in this submittal. In fact the EPA could mandate over 3 billion
gallons of BED before it reaches its own established feedstock limitations. It should also be
noted that the imports from Argentina will most likely substantially increase due to the recent
decision of the EPA to allow for the survey method of compliance for Argentinian biodiesel
production. [EPA-HQ-OAR-2015-0111-1929-A1 p.7]
Green Plains, Inc.
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 258-259.]
Within Green Plains, we continually develop markets for corn oil, as well as other fats and oils
across fuel, feed, food, and industrial applications. Thus, I wanted to relay my thoughts on the
impact of the proposed RFS RVO from the perspective of a supplier to each of these industries.
As a feedstock for biodiesel fuel, corn oil has been one of the key supplies that has helped
generate investments in new biodiesel processing technologies, driving efficiencies and capacity
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in the industry. One of the key aspects of the proposed RVO is not only the volumes themselves,
but the fact that the volumes for biodiesel be set through 2017. Having a firm volume established
at least 2 years out is very helpful for our corn oil biodiesel customers. This gives our customers
the ability to make better forecasts and thus make longer-term investments, in return giving the
fuel industry a constant biodiesel supply.
Growth Energy
EPA also alludes to a need to secure sufficient feedstocks, but the proposal does not indicate this
would be a problem. 167 Just the opposite. The proposal states that "[t]he combined volumes of
soybean oil, corn oil, and waste oils produced annually is far more than would be needed to
produce 2.1 billion gallons of biodiesel."168 The proposal explains that "[i]t is possible that the
market could divert additional feedstocks from food and other domestic uses or exports to the
production of biodiesel. For instance, in 2014 exports of soy oil were 250 million gallons and
exports of rendered fats and greases were 440 million gallons."169 [EPA-HQ-OAR-2015-0111-
2604-A2 p.30]
167 80 Fed. Reg. at 33,116.
168 Id. at 33,128 (emphasis added).
169 Id.
International Council on Clean Transportation (ICCT)
EPA has proposed volumes for biomass-based diesel (BED) for 2014-2017 that increase by
about 100 million biodiesel-equivalent gallons each year. This rate of increase in volumes is
faster than could be supported by domestic feedstock availability, and therefore would imply
increased imports with attendant disruption to existing markets. The mandated volumes should
be revised downward to be more consistent with projected BED feedstock supply. [EPA-HQ-
OAR-2015-0111-1923-A1 p.5]
A recent study by economist Wade Brorsen (2015; included as an Appendix to these comments)
provides new information relevant to the assessment of the impact on the price and supply of
agricultural commodities. Brorsen examines the supply and demand of U.S. BED feedstocks,
and projects quantities that may be available for increased BED production without causing a
significant increase in prices or unduly affecting other uses of these feedstocks. This study
covers all major BED feedstocks, including: soy oil, canola oil, inedible corn oil, yellow grease,
and other recycled feeds. The study projects supply growth of soy and canola oil from past trends
and USDA forecasts, and allows growth in supply of "waste" fats and oils. These growth
assumptions on waste oil availability may tend to the generous side. For example, Brorsen allows
for 8% annual growth in used cooking oil collection, but the study is not able to provide evidence
to confirm that such increases would be economically feasible. Brorsen concludes that annual
growth in total BED feedstock availability will be 30 million gallons in 2015, 29 million gallons
in 2016, and 25 million gallons in 2017 (Table 9 from Brorsen, 2015). [EPA-HQ-OAR-2015-
0111-1923-A1 p.5-6] [Table 9 can be found on page 28 of EPA-HQ-OAR-2015-0111-1923-AL]
Brorsen finds that EPA's proposed BED volumes would result in a feedstock deficit of 186
million biodiesel-equivalent gallons in 2017 and a cumulative deficit of 337 million gallons over
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2015-2017 (shown in Figure 1). [EPA-HQ-OAR-2015-0111-1923-A1 p.6] [Figure 1 can be
found on page 6 of EPA-HQ-OAR-2015-0111-1923-A1.]
Kansas Soybean Association
Because soybean demand is driven by the protein meal markets, soy oil has traditionally existed
in surplus. In recent years, demand for U.S. soybean oil for food use also began to decline
significantly following the U.S. Food and Drug Administrations (FDA) action in 2003 to require
food manufacturers to include trans-fats on nutrition labels beginning in 2006. The increase in
the use of soybean oil for the biodiesel market has essentially taken up the reduced demand for
soybean oil in the food sector associated with trans-fat labeling as the food industry shifted away
from the use of partially hydrogenated soybean oil to various other oil blends. The amount of soy
oil used in domestic food markets on an annual basis is approximately 4 billion pounds lower in
2012 than it was in 2005.
Additional soybean oil will be displaced from domestic food markets as a result of the recent
FDA determination requiring the elimination of all partially hydrogenated oil, which creates
trans-fat. It is estimated that this will displace an additional 1-1.5 billion pounds of soybean oil
from food use.
Biodiesel also has a positive impact on soy meal supplies. Processing biodiesel from soybeans
uses only the oil portion of the soybean, leaving all of the soy meal protein available to nourish
livestock and humans. By providing a market for soybean oil, biodiesel increases the availability
of protein-rich meal for human and livestock consumption. The increased meal supply results in
a more cost-effective food and feed source. [EPA-HQ-OAR-2015-0111-2340 p.2-3]
LMC International, Ltd.
The single most important takeaway from our global analysis is that there are large volumes of
vegetable oils and fats in the marketplace and that these volumes are getting ever-larger,
dwarfing biodiesel's demand for these feedstocks. So when analyzing feedstocks that would fill a
proposed requirement for biodiesel and renewable diesel of at least 1.9 billion gallons in 2017, a
number only slightly larger than actual production in each of the last 2 years, there is little, if
any, impact on feedstock supply. We project total global production of qualifying feedstocks to
rise from 112 million metric tons last year to more than 137 million by 2020, and over half of
that growth is expected to come from increased production of soybean oil. Looking just at 2016,
the supply of qualifying feedstocks is projected to rise strongly from 117 million metric tons this
year to 120 million next. In 2015, we estimate that the demand for these feedstocks by uses other
than biodiesel will be almost 92 million metric tons. That still leaves 25 million metric tons of
qualifying feedstocks for biodiesel, equivalent to 7.6 billion gallons of biodiesel, and the U.S.
program is expected at only 1.7 billion. By 2020, these numbers will rise significantly to 28.4
million metric tons of qualifying feedstocks available for biodiesel production after accounting
for other uses. That's the equivalent of 8.5 billion gallons of biodiesel. In conclusion, this year
and next and in the longer term, there will be more than enough qualifying feedstocks to produce
biodiesel for the U.S., and only a small percentage of those feedstocks will go into biodiesel,
even allowing for significant growth in the program.
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Mass Comment Campaign sponsored by soybean farmers (email) - (8)
While biodiesel is now made from a diverse group of feedstocks, soybean oil remains the largest
source of biodiesel feedstock. Biodiesel is an important market for soybean oil, adding value to
our product and boosting the farm and rural economy. Soy oil would be a drag on demand for
soy meal protein and whole soybeans if not for the biodiesel market. Over the past decade there
has been increased soybean production to meet global protein demand and at the same time soy
oil is being displaced from food markets due to the move away from trans-fat. [EPA-HQ-OAR-
2015-01 ll-1480-Alp.2]
Because soybean demand is driven by the protein meal markets, soy oil has traditionally existed
in surplus. In recent years, demand for U.S. soybean oil for food use also began to decline
significantly following the U.S. Food and Drug Administration's (FDA) action in 2003 to require
food manufacturers to include trans-fats on nutrition labels beginning in 2006. The increase in
the use of soybean oil for the biodiesel market has essentially taken up the reduced demand for
soybean oil in the food sector associated with trans-fat labeling as the food industry shifted away
from the use of partially hydrogenated soybean oil to various other oil blends. The amount of soy
oil used in domestic food markets on an annual basis is approximately 4 billion pounds lower in
2012 than it was in 2005. [EPA-HQ-OAR-2015-0111-1480-A1 p.2]
Additional soybean oil will be displaced from domestic food markets as a result of the recent
FDA determination requiring the elimination of all partially hydrogenated oil, which creates
trans-fat. It is estimated that this will displace an additional 1-1.5 billion pounds of soybean oil
from food use. [EPA-HQ-OAR-2015-0111-1480-A1 p.2-3]
Biodiesel has a positive impact on soy meal supplies, which are primarily utilized in animal feed.
Processing biodiesel from soybeans uses only the oil portion of the soybean, leaving all of the
soy meal protein available to nourish livestock and humans. By providing a market for soybean
oil, biodiesel increases the availability of protein-rich meal for human and livestock
consumption. The increased meal supply results in a more cost-effective food and feed source.
[EPA-HQ-OAR-2015-0111-1480-Alp.3]
Minnesota Soybean Processors (MnSP)
It is important for this Administration to understand that the soybean oil that MnSP produces
when we process soybeans is no longer in demand for human consumption because of trans-fats.
This is especially noteworthy with the FDA announcement that trans-fats are no longer
"generally recognized as safe" for use in food. As a result nearly all soybean oil production will
need to find markets outside of human food consumption. The biodiesel market is a perfect
match for production of biodiesel from a renewable, non-food product. [EPA-HQ-OAR-2015-
0111-2505-A1 p.l]
Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
EPA likewise observed that there are more than sufficient feedstocks to produce 2.1 billion
gallons of biodiesel. It suggested that "[i]t is possible that the market could divert additional
feedstocks from food and other domestic uses or exports to the production of biodiesel," noting
that the market theoretically could have foregone exporting 690 million gallons of feedstocks.
But EPA did not assess whether that degree of diversion is achievable in practice, particularly if
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much of that feedstock is committed to feeding populations or to other productive uses that may
not be easy to abandon on a dime. [EPA-HQ-OAR-2015-0111-2603-A2, pp.32-33]
National Biodiesel Board
Moreover, based on an analysis by LMC International, "there should be no question about
adequate feedstocks to meet biodiesel volume requirements here in 2015 and 2016, and through
2020, even allowing for significant growth to the program." Testimony of Andrea Kavaler, LMC
International Ltd. at 2 (EPA-HQ-OAR-2015-0111-0993) (emphasis in original). There is more
than adequate feedstock to meet global demand and to support 7.6 billion gallons of biodiesel in
2015. See id. By 2020, there is still likely to be sufficient feedstock to support at least 8.5 billion
gallons of biodiesel. Id. Thus, the biomass-based diesel industry can continue to contribute
significantly and meaningfully into the RFS2 program, but for EPA's self-fulfilling policy in
setting volumes below what it believes can be achieved. [EPA-HQ-OAR-2015-0111-1953-A2
p.ll]
EPA further ignores that the biomass-based diesel industry has not only exceeded expectations
regarding volumes, but it has more than met the goals of Congress in diversifying feedstocks
and, thus, moving toward those fuels with greater GHG emission reductions. The industry has
increasingly been using canola oil, biogenic waste oils/fats/greases, and non-food grade corn oil.
The industry has spurred new feedstocks, such as camelina sativa oil, pennycress oil, and
carinata oil. EPA recently issued a notice for use of cottonseed oil. The industry continues to
look for other feedstocks. These advances have occurred so that the industry can continue to
expand production, which increases efficiency, and reduce costs. EPA argues, however, that the
increases its proposal would provide would likely be soybean oil. EPA-HQ-OAR-2015-0111-
0008 at 3. Thus, it is also negatively affecting the innovation of the industry that has resulted in
increased efficiencies and lower costs. [EPA-HQ-OAR-2015-0111-1953-A2 p.45]
National Renderers Association (NRA)
Each year, Tenderers contribute approximately 9 billion pounds of recycled animal fats and
refined used cooking oil/grease recaptured from food service establishments and food processors
to the marketplace. (Food service includes restaurants, schools/universities, and health care,
corrections, military facilities, etc.) Renderers collect 4 billion pounds annually of used cooking
oil/grease, recycling it so the product is suitable as a feedstock for biomass-based diesel and as a
component of other products. [EPA-HQ-OAR-2015-0111-2496-A1 p.3]
Biomass-based diesel has become an important and growing market for the U.S. rendering
industry, with over 20 percent of rendered fats, oil and grease currently used as feedstocks. The
biodiesel and renewable diesel markets are increasingly important to the economic sustainability
of the rendering industry. Many of NRA's U.S. members produce large amounts of feedstocks
for these biofuels, are actively engaged in the production of biodiesel and renewable diesel, or
are poised to enter these markets. [EPA-HQ-OAR-2015-0111-2496-A1 p.3]
Biomass-based diesel - either through production of animal-based biofuels or supplying
feedstocks for this fuel - is now a critical part of the U.S. rendering industry. U.S. exports of
animal fats and oils have declined in recent years, largely due to global oversupply of competing
oil, foreign trade barriers and the relative high value of the dollar. Biodiesel has emerged as an
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important replacement market, and a sufficient supply of rendered fats and used cooking
oil/grease can reliably be expected to be available for biomass-based diesel feedstocks as
demand continues to increase if RFS volumes for 2014-2017 are set at levels recommended by
NRA. [EPA-HQ-OAR-2015-0111-2496-A1 p.3]
Rendered animal fats and used foodservice cooking oil/grease accounted for 22 percent of the
feedstocks used in U.S. biomass-based diesel production in 2014. During the first four months of
this year, Tenderers supplied almost 26 percent of total biomass-based diesel feedstocks. [EPA-
HQ-OAR-2015-0111-2496-A1 p.4]
Renewable Energy Group, Inc. (REG)
Based on a recent feedstock supply study by LMC International, commissioned by the National
Biodiesel Board, qualifying feedstock availability is not an issue as the biomass-based diesel
volume continues to grow; there is increased availability of qualifying waste fats, greases and
inedible corn oil, as well as soy and canola oil. Based on the report conclusions, in 2015 there is
enough qualifying feedstock for 6.8 billion gallons of biodiesel. See NBB Attachment, LMC
International, Current and Future Supply of Biodiesel Feedstocks (July 2015). See NBB
Attachment, ABF Economics, Impacts of Biomass-Based Diesel Production on the Animal Fats,
Waste Greases and Inedible Plant Oils Industry (2013). See NBB Attachment, Centrec
Consulting Group, LLC, Biodiesel Demand for Animal Fats and Tallow Generates an Additional
Revenue Stream for the Livestock Industry (Sept. 2012). REG has, and will continue to, update
the EPA with advances in these markets. [EPA-HQ-OAR-2015-0111-1952-A1 p.3]
State of Indiana House of Representatives
Almost 300 million pounds of soybean oil from Indiana soybeans is used in the production of
biodiesel. Our state is home to the world's largest fully-integrated soybean processing and soy
biodiesel facility: Louis Dreyfus in Claypool, Indiana. [EPA-HQ-OAR-2015-0111-3466-A1 p.l]
U.S. Canola Association (USCA)
The use of canola as a feedstock is based on the geographic location of the biodiesel production
facilities in regions where canola is grown. Canola provides another feedstock option for
biodiesel production that can be locally sourced in regions where other feedstocks are less
prevalent or more costly. [EPA-HQ-OAR-2015-0111-1819-A1 p.l]
for canola and other farmers, a viable biodiesel industry helps maintain a link between vegetable
oil and energy values, creates a floor for commodity values, and serves as a hedge against energy
inflation. Continued growth in the biodiesel industry is needed to realize and optimize these
benefits, and that growth can be prompted by increasing the RFS volumes for biomass-based
diesel beyond the levels in the Proposed Rule. [EPA-HQ-OAR-2015-0111-1819-A1 p.2]
Union of Concerned Scientists
EPA's proposal for bio-based diesel mandates gives inadequate consideration to feedstock
availability and focuses too much on BED availability and market access. Each biofuel is
different, and while blending constraints are the principal near term obstacle to increased ethanol
sales, and fuel production capacity is the principal constraint on cellulosic biofuel production, for
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bio-based diesel (BED) the availability of feedstocks is the most urgent question. [EPA-HQ-
OAR-2015-0111-2260-A1 p.3]
Together with the International Council on Clean Transportation, the Union of Concerned
Scientists commissioned Professor Wade Brorsen, a distinguished agricultural economist from
the University of Oklahoma, to evaluate the availability of biodiesel feedstock in the United
States to support expanded BED mandates and advanced biofuel mandates (Brorsen, 2015).
Professor Brorsen considered all the major sources of biodiesel feedstock and developed
projections of their availability in the next several years. The conclusions of the study were that
the US agricultural sector can increase production of fats and oils beyond 2014 levels by 30
Mgal in 2015, 29 Mgal for 2016 and 25 Mgal in 2017. [EPA-HQ-OAR-2015-0111-2260-A1 p.3]
[The commissioned study can be found in docket number EPA-HQ-OAR-2015-0111-2260-A2]
Increasing the use of biodiesel at a faster rate will primarily result in bidding feedstocks away
from other uses and ultimately to reduced vegetable oil exports or increased imports of vegetable
oil or biodiesel. Increasing vegetable oil or biodiesel imports and bidding vegetable oil and other
biodiesel feedstocks away from other uses are not sustainable means to meet the objectives of the
RFS as outlined in Clean Air Act (CAA) section 211 (o)(2)(B)(ii). [EPA-HQ-OAR-2015-0111-
2260-A1 p.3]
1 World Health Organization (WHO). Diet, nutrition and the prevention of chronic diseases: report of a joint
WHO/FAO expert consultation, Geneva, 28 January -1 February 2002.
http://www.fao.org/docrep/005/ac91 Ie/ac91 leOO.htm
2 Gaskell, Joanne C. The Palm Oil Revolution in Asia PhD dissertation. Stanford University. 2012.
3 Union of Concerned Scientists (UCS). 2012. Recipes for Success: Solutions for deforestation-free vegetable oils.
Online at http://www.ucsusa.org/assets/documents/globalwarming/Recipes-for-Success.pdf.
Response:
A number of the comments claim that there is sufficient feedstock available to increase BED
production. For example, the American Soybean Association commented that demand for U.S.
soybean oil for food use began to decline following the U.S. Food and Drug Administration's
(FDA) action in 2003 to require food manufacturers to include trans-fats on nutrition labels. The
commenter states that this will result in the likely displacement of additional soy oil from food
use that would then be available for biodiesel feedstock. EPA acknowledges the trend of
declining soybean oil use in food, and believes it will continue as a result of a June 2015 FDA
determination requiring the elimination by 2018 of all partially hydrogenated oil in food use. To
the extent that soy oil is being phased down for food purposes, some supply of soy oil will likely
become available for other uses, such as biodiesel production.
The NBB submitted a study by LMC International entitled "Current and Future Supply of
Biodiesel Feedstocks" which was also cited in comments by Renewable Energy Group,
Inc. This study concludes that feedstock availability is not a limiting factor for increasing BED
volumes; there is increased availability of qualifying waste fats, greases and inedible corn oil, as
well as soy, canola and other oils. According to the study, in 2015 there is enough qualifying
feedstock for 6.8 billion gallons of biodiesel globally. By 2020, there is likely to be sufficient
feedstock to support at least 8.5 billion gallons of biodiesel.
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EPA believes the LMC International study contains several erroneous assumptions which
contribute to an overestimation of feedstock availability. For example, when estimating
availability the study considers the theoretical amount of oil that could be extracted from an
oilseed, or "oil in seed", versus the amount of oil actually expected to be
extracted/produced. Some amount of the soybean supply is not crushed, and fed directly to
livestock, and in other instances the soybean is crushed, and oil is extracted, but it is added to
feed and thus doesn't enter the oil market. These unaccounted for alternate practices contribute
to oil supply estimates that are in some cases significantly higher than USDA estimates. For
example, LMC International's estimates of U.S. soybean oil supply is more than 80 percent
greater than that reported by USDA-WASDE for recent years.26
Darling Ingredients, Inc. suggests that when accounting for the combined volumes of: (1)
soybean oil, corn oil and waste oils currently produced in the U.S., and (2) the potential diversion
of a portion of U.S. exports of soy oil and rendered fats and greases to the U.S. marketplace, that
at least three billion gallons of BED could be produced to meet the RFS RVOs before feedstock
limitations would arise. We believe that Darling Ingredients Inc. is on the high side of estimates
of feedstock that can be made available in 2016 given the time and effort needed to divert those
feedstocks from other uses. For instance, Darling Ingredients Inc. assumes that a considerable
portion of the potential feedstock production could be diverted to BED for the RFS without
focusing on the possibility that the diversion of exports could possibly have disruptive effects in
other markets for BED feedstocks. Monroe Energy, LLC and Philadelphia Energy Solutions
Refining and Marketing, LLC raise this issue suggesting that these feedstocks may be
"committed to feeding populations or to other productive uses that may not be easy to abandon
on a dime". In addition, EPA considers a variety of other factors besides just feedstock
availability when determining how much BED to require under the RFS. See Section II.E.3 of
the final rule and the memorandum in the docket discussing our evaluation of the statutory
factors in CAA section 21 l(o)(2)(B)(ii) for a discussion of these other factors.
In their comments NBB claims EPA argues "that the increases its proposal would provide would
likely be soybean oil", and that this argument negatively affects the innovation of the industry.
In providing illustrative costs, we produce a scenario that assumes that the entire change in the
advanced standards is met with soybean oil biomass-based diesel. This is only intended to be
illustrative, not an attempt to estimate actual costs given the variety of feedstocks that can and
are used. In this context, EPA believes that it is appropriate to use soybean oil as the
representative marginal feedstock, versus any other biodiesel feedstock, as it is the single largest
feedstock source. However, EPA believes other biomass-based diesel feedstocks can, and will,
contribute to advanced standard volumes. We do not believe that this simplifying assumption has
any impact on industry innovation.
The Canola Council of Canada and the U.S. Canola Association both touted the benefits of
canola as a quality biodiesel feedstock in their comments. The Canola Council of Canada points
out thatjenewable biomass producers in Canada continue to increase yields and improve
utilization of existing lands to meet any increased demand for crops. Thus, the Council believes
that canola can provide an important and growing source of feedstock for biodiesel requirements
for the RFS in the U.S. According to the Canola Council of Canada, continued advances in
26 USDA, World Agricultural Supply and Demand Estimates (October 2015).
http://www.usda.gov/oce/commoditv/wasde/latest.pdf
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technology and production have driven yields up. Average per-acre canola yields have risen 50
percent in fifteen years to 34 bushels per acre in 2014. Plans are to continue increasing canola
yields to 52 bushels per acre by 2025. We acknowledge these comments and want to point out
that this rule is assuming continued growth in biodiesel made from vegetable oil feedstocks such
as canola oil to help fulfill the RFS requirements.
Green Plains, Inc. stresses the need to develop markets for corn oil as well as other fats and oils.
They state that as a feedstock for biodiesel fuel, corn oil has been one of the key supplies that has
helped generate investments in new biodiesel processing technologies driving efficiencies and
capacity in the industry. They believe that having a firm volume established at least two years
out is very helpful for their corn oil biodiesel customers. While the market will determine which
feedstocks to use and in what quantities, EPA is assuming continued growth in corn oil as a
feedstock for biodiesel production to fulfill the RFS requirements.
Other comments challenged the availability of additional feedstocks and thus the opportunity for
increased BED production. The ICCT and UCS submitted a study "Projections of U.S.
Production of Biodiesel Feedstock" by Professor Brorsen at the University of
Oklahoma. Professor Brorsen considered all the major sources of U.S. biodiesel feedstock and
developed projections of their availability through 2019. The conclusion of the study is that the
potential to expand biodiesel production from the feedstocks in the U.S. is limited without
substantially increasing feedstock prices. The study estimates that the U.S. agricultural sector can
increase production of fats/oils beyond 2014 levels by 30 million gallons (Mgal) in 2015, 29
Mgal in 2016 and 25 Mgal in 2017. Thus, according to the study, higher volumes of biodiesel
would have to come from imports of feedstock or finished biodiesel.
Due to the near coincidental timing of the submission of the Bronson study with the
aforementioned FDA determination, the study did not have an opportunity to account for the
impacts of the FDA determination on soy oil availability in its projections. Further, even if time
permitted, the trends projection approach which extrapolates from recent production patterns is
not well suited to capture adjustments in feedstock markets such as, for example, the impacts of
the FDA announcement (or the recent slowdown in the demand for commodities in China). EPA
believes the study likely underestimates the amount of feedstock available for expanded
biodiesel production due to its methodological shortcomings. Also, given its focus on only U.S.
sources of feedstocks for biodiesel, it does not consider all sources of feedstock supply which
could qualify under the RFS program.
Advanced Economic Solutions (AES) suggests that EPA should consider reducing the 2016
advanced biofuel applicable volume to the level proposed for 2015 due to a lack of feedstock
availability. AES estimates that the EPA proposed advanced biofuel mandate levels would result
in 5.57 billion pounds of U.S. soy oil use for the production of methyl ester in 2016, a 13 percent
increase from the previous year. According to AES, U.S. soy oil usage of 5.57 billion pounds
would equate to a record 26 percent of the USDA projected 2015/16 annual U.S. soy oil
production.
AES claims that the soy oil market reaction to the announcement by EPA of their proposed RFS
requirements should be recognized as an indicator of adverse reaction to rising biodiesel
requirements. AES claims that July soy oil futures rose by 7.5 percent in the hours following the
announcement of the proposed applicable volumes, from $0.321 per pound to $0.345 per pound.
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AES further asserts that the 2016 advanced biofuel applicable volume proposed by the EPA have
already created a disruption in the availability and price of the primary feedstock used to produce
biodiesel: soy oil. Because of the importance of soy oil to food companies, AES believes that
EPA decisions with regard to the annual applicable volumes for advanced biofuels are
substantially increasing costs for food companies.
EPA disagrees with AES that the current RFS renewable fuel volumes are causing disruption in
the availability and price of the primary feedstock used to produce biodiesel: soy oil. Currently,
the average price of soy oil on the Chicago Board of Trade is roughly $0.286 per pound for the
month of October 2015. Given the low price of soy oil and the general availability of soy oil, we
do not think that RFS renewable fuel volume requirements are having a significant cost impact
on food companies.
Baker Commodities asserts that EPA believes that any increase in the BED pool would come
from soybean biodiesel, not from other feedstocks such as wastes and animal fats. This
commenter asserts that the use of waste feedstocks to make biodiesel increases in rough
proportion when the biodiesel market grows. While the largest supply of biodiesel is soybean-
based biodiesel, EPA recognizes that wastes and animal fats are significant contributors to the
BED fuel pool, are a less expensive feedstock, and that the supply of wastes/animal fats may be
able to grow in the future to help meet the RFS renewable fuel volumes as the infrastructure to
increase collection of waste oils and fats increases. However, we still believe it is most likely that
the marginal gallons of biodiesel in the near future will primarily be filled with soybean oil or
other virgin vegetable oils based on the relative abundance of these feedstocks. This belief is
supported by analysis provided by the NBB which assessed the growth in biodiesel volumes
through 2018/2019 by feedstock.27
The National Renders Association suggests that U.S. exports of animal fats and oils have
declined in recent years, largely due to global oversupply of competing oil, foreign trade barriers
and the relative high value of the dollar. They assert that biodiesel has emerged as an important
replacement market, and a sufficient supply of rendered fats and used cooking oil/grease can
reliably be expected to be available for biomass-based diesel feedstocks as demand continues to
increase as RFS volumes increase. We believe that rendered fats and used cooking oil/grease can
continue to grow through time to supply more of the RFS volumes.
Given the comments and available data, we believe that an increase in biodiesel volume
availability is warranted in this rulemaking, and that sufficient feedstocks are available for the
production of the volume requirements we are finalizing in this rule. However, we believe the
level of BED increase suggested by NBB and others seem unreasonable in the 2016 timeframe
given uncertainties about the market's short run ability to supply feedstocks for such a significant
increase in BED, and for other reasons discussed in the preamble.
27 See "NBB-WAEES Results Feedstock Use and Price Levels and Changes Under the Minimum Scenario" in the
docket.
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3.2.2 Production Capacity
Comment:
Advanced Biofuels Association (ABFA)
The EPA proposal spends little time discussing renewable diesel. EPA should be aware that there
are more than 900 million gallons of global renewable diesel capacity from companies that are
located in the U.S. or imported to the U.S. This includes U.S. production capacity of over 200
million gallons per year of renewable diesel. The ability of renewable diesel to help meet the
RFS's statutory targets should not be underestimated and it continues to add incrementally more
volume each year. [EPA-HQ-OAR-2015-0111-2498-A1 p.6]
Archer Daniels Midland Company (ADM)
ADM concurs with EPA's statement in the RVO proposal that 'the approach we take to setting
standards must be consistent with Congress' clear goal of compelling the industry to make
dramatic changes to increase renewable fuel use.' The biodiesel industry exceeded EPA's 2013
requirements by a wide margin, and according to EPA's 2014 RVO proposal has a production
capacity of nearly 3.6 billion gallons. The industry has clearly demonstrated its ability to meet a
goal that exceeds the proposed volumes. [EPA-HQ-OAR-2015-0111-2262-A1 p. 2]
Crimson Renewable Energy LP
For 2015 thru 2017, Crimson has serious concerns about the RFS currently proposed RVO for
advanced and biomass-based diesel for 2015- 2017. The biodiesel industry has consistently
demonstrated its ability to expand production, year after year. In fact, EPA acknowledges in the
RFS Proposal that the proposed volumes for biomass-based diesel through 2017 remain well
below domestic capacity. In 2013, the biodiesel industry produced approximately 1.8 billion
gallons of fuel, and would have easily produced 2.1 billion in 2014 but for the EPA's action in
2013. 2015 was off to a poor start as a result of EPA's continued delay, but in May and June, the
two months since the announcement of the current RFS proposal, the industry produced or
imported 169 and 176 million, respectively, which can be annualized to 2.1 billion gallons.
[EPA-HQ-OAR-2015-0111-1823-A1 p.2]
Darling Ingredients Inc.
DGD, built at a cost of almost $400 million in private capital, has been operating for two years
and is currently producing at a rate of over 160 million gallons of Renewable Diesel a year
(120% of nameplate capacity). It represents the largest fully utilized Advanced Biofuel facility in
North America. DGD, as well as all of Darling's Biodiesel facilities, utilizes waste oils as their
feedstock which has a lifecycle greenhouse gas emission reduction of over 85 percent, while also
resulting in substantially less particulate emissions. Because the feedstocks are less expensive
than traditional vegetable oils the result is the production of environmentally friendly fuels (fuels
which provide GHG reductions in excess of those required for cellulosic) in a cost effective
manner per ton of carbon reduced. [EPA-HQ-OAR-2015-0111-1929-A1 p.l]
It should be noted that the 2.8 billion gallons does not take into consideration the impact of
potential expansion of domestic Renewable Diesel production. Diamond Green Diesel is capable
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of expanding an additional 50-75 million gallons per year above the current 160 million gallon
run rate. [EPA-HQ-OAR-2015-0111-1929-A1 p.6]
The BED industry is not asking the EPA to set mandated volumes at levels that would require
new capacity. Rather the industry is asking the EPA to support EXISTING industry capacity
which was built on the basis of clearly stated levels established by the Energy Independence and
Security Act. It is disingenuous for the EPA to argue there is no firm guidance on whether to
increase BED mandates when they clearly can achieve the environmental goals established by
the Act for Cellulosic and, therefore, Advanced biofuels on a cost competitive basis. [EPA-HQ-
OAR-2015-0111-1929-A1 p.7]
Growth Energy
there is sufficient BED production capacity to generate between 4.409 bil RINs (4.14 bil from
biodiesel and 0.269 bil from renewable diesel) and 4.562 bil RINs (4.2 bil from biodiesel and
0.362 bil from renewable diesel). [EPA-HQ-OAR-2015-Oil 1-2604-A2 p.31]
EPA also substantially underestimates the amount of BED that could be distributed and
consumed in excess of the proposed BED mandate. As discussed above, EPA recognizes that
existing BED production capacity is sufficient to generate at least 4.2 bil RINs per year. Yet
EPA appears to assume that total BED production will generate hundreds of millions or even
more than one billion fewer RINs than capacity in 2016.306 EPA gives no explanation for why
more available production capacity could not be used. [EPA-HQ-OAR-2015-0111-2604-A2
p.52]
In addition, as EPA purports to recognize, renewable diesel is not even subject to a blend-wall
because it is chemically "indistinguishable from conventional diesel fuel."319 Thus, there is
simply no distribution- or consumption-based constraint whatsoever on using the entire domestic
production capacity, which again could generate about 0.362 bil RINs per year.320 [EPA-HQ-
OAR-2015-0111-2604-A2 p.53-54]
306 See 80 Fed. Reg. at 33,127, Table II.D.2-2-2 & n.b (indicating EPA's expected range of BED and conventional
biodiesel RIN generation in 2016).
319 80 Fed. Reg. at 33,128.
320 Stratas Report at 16 (attached as Exhibit 2).
Kansas Soybean Association
I am proud of the leading role soybean farmers have played in establishing and developing the
U.S. biodiesel industry. From the first investments from the soybean industry, biodiesel has
grown to a point of producing well over 1 billion gallons annually and now has the capacity to
produce over 3 billion gallons of domestic, renewable, advanced biofuels. [EPA-HQ-OAR-2015-
0111-2340 p.2]
Mass Comment Campaign sponsored by Biodiesel.org (email) - (93)
I am writing to urge you to include additional biodiesel growth in the Renewable Fuel Standard
(RFS) volumes to be finalized later this year. While the recent proposal for biodiesel under the
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program was a step in the right direction, I believe it does not fully capitalize on biodiesel's
benefits and potential for growth. [EPA-HQ-OAR-2015-0111-0211-A1 p.l]
It is clear that the U.S. biodiesel industry has the ability and capacity to increase production
above and beyond the standards called for in your recent proposal, particularly when you
consider the potential for sharply increased imports qualifying for the RFS. We should be
building our domestic industry, and doing so requires strong policy signals. The six criteria for
biodiesel growth outlined in the RFS statute have clearly been met. The benefits are clear in
terms of cost-effective pollution reduction, job creation, tax revenues and energy security. [EPA-
HQ-OAR-2015-0111-0211-A1 p.l]
Mass Comment Campaign sponsored by Indiana Soybean Alliance (email) - (250)
I am writing in response to your recently established biodiesel volumes under the Renewable
Fuel Standard (RFS). As an Indiana farmer, I certainly recognize and appreciate that the proposal
is a positive step. But I, and farmers all across our state, remain concerned that the proposed
biodiesel volumes for 2016 and 2017 fail to adequately recognize the domestic biodiesel
industries production capacity and its ability to increase production. [EP A-HQ-OAR-2015-0111-
2569-A2p.l]
Mass Comment Campaign sponsored by soybean farmers (email) - (8)
Biodiesel has contributed to increased domestic energy production while also delivering
significant greenhouse gas emissions reductions and creating jobs and boosting the farm and
rural economy. I am proud of the leading role soybean farmers have played in establishing and
developing the U.S. biodiesel industry. From the first investments from the soybean industry,
biodiesel has grown to a point of producing well over 1 billion gallons annually and now has the
capacity to produce over 3 billion gallons of domestic, renewable, advanced biofuels. [EPA-HQ-
OAR-2015-0111-1480-A1 p.l]
Missouri Soybean Association (MSA)
It is clear that the U.S. biodiesel industry has the ability and capacity to increase production
above and beyond the standards called for in EPAs recent proposal, particularly when you
consider the potential for sharply increased imports qualifying for the RFS. We should be
building our domestic industry, and doing so requires strong policy signals. [EPA-HQ-OAR-
2015-0111-3304 p.1-2]
National Biodiesel Board
Despite doubts raised by obligated parties every year, biodiesel facilities have been able to
increase production to meet demand, and idled facilities can come back on-line quickly.
Renewable diesel production has also continued to grow. The industry also continues to have
more available capacity from which to increase production. [EPA-HQ-OAR-2015-0111-1953-
A2 p.9-10]
As shown in the table below, the biomass-based diesel industry has shown that it can respond
positively to the RFS2 requirements and market demand. It has exceeded the minimum
applicable volumes for biomass-based diesel and has increased production by over 600 million
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gallons from 2010 to 2011 and again from 2012 to 2013. Indeed, from 2011-2013, biodiesel
production alone exceeded the mandated volumes for biomass-based diesel in each of those
years. Biodiesel also expanded its markets in this time, including increased use in the heating oil
market, and renewable diesel production (and importation) has also shown significant growth in
recent years. Nonetheless, the industry is still in its early stages, and continues to make
advancements and create efficiencies, resulting in benefits to consumers. [EPA-HQ-OAR-2015-
0111-1953-A2 p.10] [The table can be found on page 10 of docket number EPA-HQ-OAR-2015-
0111-1953-A2]
While increasing, these volumes remain well below production capacity in the United States and
the capacity of registered facilities. EPA has estimated that there is about 2.8 billion gallons of
registered biodiesel production capacity in the United States, although total capacity may be as
high as 3.6 billion gallons. 80 Fed. Reg. at 33,116. Using the 1.5 equivalence value for biodiesel,
this represents 4.2 billion RINs and 5.4 billion RINs, respectively. [EPA-HQ-OAR-2015-0111-
1953-A2p.lO]
NBB has tracked every domestic biomass-based diesel plant that is registered with the EPA
and/or is a Member of NBB. Based on this assessment, there are 232 domestic production
facilities with a volume capacity of almost 3.4 billion gallons. Additionally, almost 80 foreign
facilities are registered with EPA under the RFS2, with almost 1.7 billion gallons of capacity.
The total volume is over 5.0 billion gallons, and it represents approximately 7.8 billion RINs.
This list of facilities is provided at Attachment 1. [EPA-HQ-OAR-2015-0111-1953-A2 p.ll]
But, Congress required EPA to review the "expected annual rate of future commercial
production of renewable fuels, including advanced biofuels in each category (cellulosic biofuel
and biomass-based diesel)." 42 U.S.C.§ 7545(o)(2)(B)(ii)(III) (emphasis added). Congress
sought to ensure continued growth in these categories specifically. Indeed, as noted above,
Congress sought to increase biodiesel specifically. See id. § 7545(o)(l)(D) (defining biomass-
based diesel as "renewable fuel that is biodiesel"), (5)(A)(ii) (requiring "appropriate" credits for
biodiesel). Indeed, unlike cellulosic biofuel, where EPA went through a painstaking process to
identify each possible gallon of cellulosic biofuel that could be generated, EPA ignores its own
data of already registered biomass-based diesel facilities that have total capacity exceeding 5
billion gallons. Instead, EPA sets the volume increases at an unremarkable year-on-year increase
of 4 percent. [EPA-HQ-OAR-2015-0111-1953-A2 p.46]
New Leaf Biofuel, LLC
EPA admits in the proposal dozens of times that the domestic production capacity of biodiesel is
over 2 billion gallons. And that does not include the biodiesel and renewable diesel imports in to
the United States which are increasing rapidly as a result of the LCFS ramp up and the
Argentinian biodiesel pathway. If our goal is to reduce greenhouse gas emissions - and EPA has
demonstrated that this is a top priority - then why would the EPA intentionally keep the biomass-
based diesel number low? I will defer the detailed legal counter-arguments regarding EPA's
"stimulate competition" justification to the NBB comments, but just as a practical matter, the
proposal reads as if biodiesel - the shining star on all accounts for the RFS - is getting the short
end of the stick in favor of the interests of obligated parties and mysterious "other advanced
fuels". [EPA-HQ-OAR-2015-0111-1909-A1, p.2]
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Phillips 66 Company
there could also be biodiesel production challenges. These include issues associated with
restarting idled facilities, difficulties in obtaining quality feedstocks, etc. EPA indicated that as of
November, 2012 there were 112 biodiesel production facilities. According to the list of all
biodiesel production companies in the rulemaking docket, the facilities range in capacity from
less than 1 million gallons per year to a few with over 100 million gallons per year capacity.
Biodiesel production facilities are small in size making it necessary to secure volumes from
numbers of producers. Biodiesel can be produced using a variety of feedstocks and with varying
processes, particularly back-end processes for removing unreacted feedstocks and purifying the
finished product. The number of producers coupled with the variation in feedstocks and
production processes require increased diligence on quality oversight as each of these impact
product quality. Increasing volume requirements that could result in use of lesser quality
feedstocks, more producers, etc. will increases the challenge of ensuring product quality.
Additionally, even with the introduction of the voluntary quality assurance plan program, given
the potential need for significant increased biodiesel volumes, there could once again be a
perverse incentive for unscrupulous producers to enter the market with fraudulent renewable
credits. [EPA-HQ-OAR-2015-0111-2039-A1 p.5]
Western Dubuque Biodiesel
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 217.]
The market will only support half the biodiesel currently produced based on your proposed RVO
with the industry projected imports included. This means potentially half our industry will be
either laid off or terminated for this year and next. This means for my facility a $2.5 million to a
$4 million loss in revenues in 2015.
Response:
A number of renewable fuel industry commenters pointed to additional existing BED and
renewable diesel production capacity in advocating that the BED volume requirement be
increased to as much as 3.4 billion gallons for 2016 and 2017. On the other hand a number of oil
industry commenters noted that there could be production challenges if the EPA were to increase
the 2016 volume requirement to 1.8 billion gallons including restarting idled facilities, or the
unavailability of BED within their region.
As highlighted in the NPRM, the current total capacity of all registered biodiesel and renewable
diesel production facilities in the United States currently exceeds 2.7 billion gallons. In addition
to the domestic production capacity, there is also significant registered capacity overseas.
Historically domestic biodiesel production rates have been well short of the production capacity,
with facility utilization rates often less than 50%.
One commenter stated that EPA had not adequately addressed the production capacity of
renewable diesel and that renewable diesel's contribution in meeting the RFS's statutory targets
should not be underestimated since it continues to add incrementally more volume each year.
The basis for what increment can be expected for 2016, however, was not well defined. Several
other comments provided information on production capacity and growth of renewable diesel. In
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Section II.E.3 of the final rule EPA has expanded its discussion of both the supply of biodiesel
and renewable diesel used as transportation fuel in the United States. Renewable diesel
produced and imported has increased in 2013. For renewable diesel, where the hydrotreating
necessary to convert the oil into diesel fuel requires considerably more capital, economies of
scale require facilities to be relatively large, and the size and complexity of the facilities require
much more time for financing, design, construction, and commissioning. This helps explain why
renewable diesel production facilities are far fewer in number, have much larger production
capacities on average, and why the volume of renewable diesel production has grown more
slowly.
A number of commenters pointed to the currently existing and registered production capacity as
evidence to support its projection of how much biodiesel and renewable diesel could be supplied
in 2016. However, while there is certainly potential to increase utilization of the existing
production facilities it is uncertain what steps would have to be taken to increase production rates
at these facilities. For example access to additional feedstocks, feedstock and product
distribution, offtake agreements, staffing, capital, etc. Therefore, there is uncertainty associated
with the ability for an appreciable number of registered biodiesel and renewable diesel
production facilities to simultaneously increase production rates given the constraints in other
aspects of the marketplace as discussed in Section II.E.3 of the final rule. Consequently, while
we do not believe biodiesel and renewable diesel production capacity will likely be a
constraining factor in biodiesel and renewable diesel production in 2016, reaching the 3.4 billion
gallons suggested by NBB would likely require the addition of new production capacity. Because
of the reasons mentioned above, and in the final rule, EPA finds that production capacity informs
our decision of the BED volume, but is not the only factor we consider.
Another commenter stated that, based on the proposed RVO, the market will only support half
the biodiesel currently produced and imported and that potentially half their industry will be
either laid off or terminated for 2015 and 2016. Their conclusion is entirely inconsistent with the
increasing RFS standards. EPA believes that the RVOs being finalized for this multiyear
rulemaking are challenging even as we also believe they are reasonably achievable and will
support growth in the BED industry. A very high percentage of the 2.5 billion gallons of total
biodiesel and renewable diesel that we estimated in the context of determining the total
renewable fuel volume requirement for 2016 is likely to be advanced biodiesel and renewable
diesel and we would expect about 2.1 billion gallons to be advanced biodiesel and renewable
diesel. This represents an increase of about 370 million gallons from that supplied in 2015,
which is greater than the annual increase that occurred in the previous two years (91 million
gallons from 2013 to 2014 and 104 million gallons from 2014 to 2015) but less than the annual
increase that occurred in 2013 (about 560 million gallons from 2012 to 2013). Finally, we do not
believe that production capacity alone is what should be used to determine the BED standard.
While it is an important factor in assessing the ability of the marketplace to increase volumes of
renewable diesel and biodiesel in support of growing the BED, advanced biofuel and total
renewable fuel standards, we also believe that, especially with respect to the BED standards, we
need to take into account other factors, including the ability for other advanced biofuels to have
an incentive for investment and growth under the advanced biofuels standards. As discussed in
Section II.D.5 of the final rule we believe it is appropriate to set the BED standard for 2016 and
2017 at levels lower than the maximum that we believe might be achievable.
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3.2.3 Imports of Biomass-Based Diesel
Comment:
Advanced Biofuels Association (ABFA)
Exceeding the RVO requirements in 2013 and 2014 certainly supports the rise in the biomass-
based diesel RVO called for between 2014 and 2017. In fact, we may well be able to support a
higher volume in 2017 as result of new production coming on line and being sanctioned under
the Defense Production Act program supported by the Departments of Energy, Agriculture, and
the Navy. ABFA alone represents over 1.5 billion gallons of overseas production that would like
to call America home to a portion of their fuels. These drop-in fuels essentially have no blend
wall as they meet the existing ASTM D-975 specs in neat form and are able to utilize the existing
U.S. pipeline, rail, and trucking infrastructure systems. [EPA-HQ-OAR-2015-0111-2498-A1 p.5]
Ag Processing, Inc.
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 221.]
That being said, we hope that any attempt by EPA to create growth opportunity through the RFS
should recognize that the RFS is primarily a domestic fuels policy. From a competitiveness
perspective, the EPA should not intentionally or unintentionally support foreign producers of
biodiesel at the expense of our domestic industry. For example, multilateral organizations such
as the World Trade Organization have deemed practices such as differential export taxes for
Argentine-produced biodiesel is trade distorting. Such fuel should not qualify for the RFS.
American Council on Renewable Energy (ACORE)
It is clear that the U.S. biodiesel industry has the ability and capacity to increase production
above and beyond the standards called for in the USEPA's recent proposal, particularly when
considering the potential for sharply increased imports qualifying for the RFS. USEPA is
underestimating the impact of imports of Argentina BED. Industry data estimates that 450
million gallons of Argentina BED will be imported in 2015, and will increase to 600 million
gallons in 2016. USEPA should increase the overall BED RVOs to accommodate this surge of
imports from Argentina. [EPA-HQ-OAR-2015-0111-1926-A1 p. 16]
American Soybean Association (ASA)
When determining the appropriate volume standards for biomass-based diesel, the EPA can and
should mitigate the potential for increased imports of sugarcane ethanol and account for the
likelihood of increased imports of biodiesel from Argentina. [EPA-HQ-OAR-2015-0111-1818-
Al p.3]
EPA should increase the biomass-based diesel volumes relative to the total Advanced Biofuels
volumes in order to promote the use of domestically produced biodiesel over imported advanced
biofuels such as sugarcane ethanol. The intent of Congress when they established and expanded
the RFS program was clearly to increase and promote domestic energy production and U.S.
energy independence. This is reflected by the title of the 2007 law - the Energy Independence
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and Security Act (EISA) - and is supported by numerous statements by legislators during
consideration of the bill. [EPA-HQ-OAR-2015-0111-1818-A1 p.3]
Biomass-based diesel and imported sugarcane ethanol are the two primary, and practically the
only, fuels available to fulfill the Advanced Biofuels requirements. Since EPA contends that
there is an ethanol "blend wall," increasing the biomass-based diesel volumes would help
alleviate this so-called "blend wall" issue by reducing the imports of sugarcane ethanol. In
addition, on an equivalency or RIN basis, biomass-based diesel counts as 1.5 gallons for each 1.0
gallon of sugarcane ethanol. [EPA-HQ-OAR-2015-0111-1818-A1 p.3]
To be consistent with the primary purpose and intent of the EISA, the EPA should implement the
RFS in a way that helps build our domestic industry, and doing so requires strong policy signals
that promote fulfilling volume requirements with domestically produced biofuels to the greatest
extent possible. Increasing the biomass-based diesel requirements relative to the overall
Advanced Biofuels requirements is a way to accomplish that mission. [EPA-HQ-OAR-2015-
0111-1818-A1 p.3]
Wherever possible, EPA should seek to promote domestic biofuel sources to fulfill the RFS
volume requirements. However, when determining the appropriate volume standards for
biomass-based diesel, the EPA must also account for the likelihood of increased imports of
biodiesel from Argentina due to some factors beyond the RFS volume requirements. [EPA-HQ-
OAR-2015-0111-1818-A1 p.3]
Prior to the EU imposing anti-dumping tariffs, Argentina was exporting approximately 400
million gallons to that market and they are seeking new markets for those volumes.5 The EPA
has approved a streamlined process for Argentine biodiesel to comply with the RFS and should
expect Argentine imports into the U.S. to increase significantly in future years. [EPA-HQ-OAR-
2015-0111-1818-Alp.4]
Argentina has an estimated 5.2 billion liters (1.37 billion gallons) in total production capacity for
biodiesel, and in past years exports have averaged 70% percent of Argentina's total biodiesel
production.6 In 2015 and 2016 local exporters will focus on the U.S. biodiesel market, which
currently presents the best export market potential.7 Members of CARBIO, the trade association
whose petition for streamlined RFS compliance was approved by EPA this year, make up the
vast majority of Argentinian biodiesel production, and almost 720 million gallons in capacity is
already registered with EPA. CARBIO members signed onto the survey plan approved by EPA,
and thus their imports into the United States are likely to increase. [EPA-HQ-OAR-2015-0111-
1818-A1 p.4]
AS EPA is aware, the European Union placed anti-dumping measures on Argentina in 2013,
which restricted biodiesel imports into Europe. Prior to the European anti-dumping subsidies,
Argentina was the world's largest biodiesel exporter, with 90% of its exports sold in the
European market. The same dumping activity from Argentina may now occur in the United
States as demand for domestic use of biodiesel in Argentina is not expected to make up for the
loss in exports. The Argentinian government also artificially subsidizes its biodiesel production
and exports through a Differential Export Tax (DET) program. Under the DET program,
Argentinian biodiesel producers are encouraged to export finished biodiesel rather than raw
soybeans or soybean oil. [EPA-HQ-OAR-2015-0111-1818-A1 p.4]
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5 USD A Foreign Agricultural Service. July 8, 2011. Argentina Biofuels Annual 2011, Global Agricultural
Information Network Report. Available at:
http://gain.fas.usda.gov/Recent%20GArN%20Publications/Biofuels%20Annual Buenos%20Aires Argentina 7-8-
2011.pdf
6 USDA Foreign Agricultural Service. July 1, 2015. Argentina Biofuels Annual 2011, Global Agricultural
Information Network Report. Available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Biofuels%20Annual Buenos%20Aires Argentina
7-l-2015.pdf
7 Ibid
Archer Daniels Midland Company (ADM)
During oral testimony provided by Kent Engelbrecht, a Manager in ADM's biodiesel division, at
EPA's Public Hearing on June 25, 2015, Mr. Engelbrecht discussed the market reaction to the
RVO proposal. In particular, since the RVO proposal's release, a significant price gap between
D6 and D5 RINs has emerged. This price spread, caused by reducing blending requirements for
conventional ethanol, creates a financial incentive to import Brazilian sugarcane ethanol and
subsidized Argentinian biodiesel to satisfy the advanced and biomass-based diesel standards.
[EPA-HQ-OAR-2015-0111-2262-A1 p. 2-3]
To date, we have only seen a further escalation of this impact. Since EPA's RVO proposal was
released on May 29, the volume of Argentinian biodiesel imports has more than doubled. Prior to
the release, Argentina had imported 27.7 million gallons in 2015. Since May 29, Argentinian
biodiesel imported, or scheduled to be imported, has accounted for 52.3 million gallons — an
increase of 189%. Total Argentinian biodiesel imports are now on pace to exceed 150 million
gallons this year. [EPA-HQ-OAR-2015-0111-2262-A1 p. 3]
In testimony before the Senate Homeland Security Subcommittee on Regulatory Affairs and
Federal Management on June 18, Acting Assistant Administrator Janet McCabe stated that when
setting annual volumes, EPA does not differentiate between imported and domestically produced
gallons. We believe this is an incorrect interpretation of Congressional intent where U.S. energy
security is concerned. Even assuming that this interpretation is correct, EPA has not adequately
accounted for actual or anticipated imports of both Brazilian sugarcane ethanol and Argentinian
biodiesel when setting volumes. We remain concerned that EPA's RVO proposal does not take
into account the projected imports from Argentina following EPA's approval of the Camara
Argentina de Biocombustibles (CARBIO) survey method. With that approval, and Argentina's
Differential Export Tax (DET) in place, Argentinian producers face a growing commercial
advantage in the U.S. market. [EPA-HQ-OAR-2015-0111-2262-A1 p. 3]
This is a significant factor which EPA has not taken into consideration when setting volumes for
2015, 2016, and 2017, and which the market has already borne out in the months since EPA
issued its RVO proposal. D6 REST prices continue to be depressed, and Argentinian biodiesel
imports are increasing. This goes against the foundation by which the RFS was adopted, and we
strongly encourage EPA to consider this intent when finalizing standards for 2015, 2016, and
2017. [EPA-HQ-OAR-2015-0111-2262-A1 p. 3]
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California Biodiesel Alliance (CBA)
Furthermore, it does not appear that the EPA considered the increasing renewable fuel imports
when setting the biomass-based diesel volumes. Between the recently approved pathway for
Argentinian biodiesel and the yearly ramp up of the LCFS program, it is more than likely that
imports will exceed the 100 million gallon "increase" for 2015 alone, and will only increase over
the next few years. The effect of adding hundreds of millions of gallons of new imported
biodiesel on top of the proposed already smaller market place would create a disastrous
marketplace for California biodiesel producers. [EPA-HQ-OAR-2015-0111-1910-A1, p.2]
Canola Council of Canada
3. Any Alternative Renewable Biomass Tracking Program Should be Transparent and
"Achieve at Least the Same Level of Quality Assurance" as the Renewable Biomass
Requirements Applicable to Other Feedstocks.
The Canola Council is also concerned with EPA's recent approval of an alternative tracking
program for renewable biomass for soybean biodiesel from Argentina. The decision document
provided by EPA provides little detail or explanation as to how the program will work in
practice, and the Canola Council is concerned with the lack of transparency of these
requirements compared to the public scrutiny of the aggregate approach for Canadian crops. It is
also unclear how the program compares to the proof Canada must establish to show that its
agricultural land is not increasing to support continued reliance on the aggregate compliance
approach. In Canada agricultural lands have been steady or on the decline and land use is strictly
regulated to protect and conserve forest and sensitive lands.
Thus, we are concerned with the potentially reduced requirements imposed on soybean biodiesel
from Argentina, and thereby reduced costs that makes supply from that country more
competitive in a manner that will displace U.S. production of biodiesel, as well as other biodiesel
imported from other countries. The Canola Council is aware that there is a pending petition for
reconsideration on EPA's approval and requests that EPA take action on such petition. [EPA-
HQ-OAR-2015-0111-2484-A1 p.4-5]
Crimson Renewable Energy LP
Additionally, it does not appear that the EPA considered the increasing renewable fuel imports
when setting the biomass-based diesel volumes. Between the recently approved pathway for
Argentinian biodiesel and the yearly ramp up of the LCFS program, it is more than likely that
imports will exceed the 100 million gallon "increase" for 2015 alone, and will only increase over
the next few years. Indeed for 2015 through April 30, 140 million gallons of biomass-based
diesel have been imported into the U.S., and projections from NBB are for over 400 million
gallons of total imports of biomass based diesel in 2015. The effect of adding hundreds of
millions of gallons of new imported biodiesel on top of the proposed already smaller market
place would create a disastrous marketplace for U.S. biodiesel producers, effectively idling over
500 mil gallons of existing annual production capacity. [EPA-HQ-OAR-2015-0111-1823-A1
p.2]
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Darling Ingredients Inc.
The proposed rule sets out its recommended approach in setting standards for 2015-2016. Since
the volume obligations established for 2014 and 2015 are simply set at the actual (2014) and
estimated (2015) RIN's available (expressed in gallons of BED), Darling agrees it was
appropriate for the EPA to consider exports in determining mandated volumes. History cannot be
changed. However, Darling argues that exports of BED should not be considered in establishing
the volume mandates for 2016 and 2017. The issue of exports is NOT identified as a criteria to
be used by the EPA in determining BED volumes. The proposed rule appears silent on whether
the EPA is factoring exports in its determination of BED volumes, but in the Proposed Rule
when discussing Current and Future shortfalls in supply the EPA states, '...the market supplied
1.63 billion gallons... of BED (referring to 2014). That statement is incorrect as the market
supplied 1.705 billion gallon in 2014 (production plus imports) with a small volume being
exported resulting in a net supply of 1.63 billion gallons. [EPA-HQ-OAR-2015-0111-1929-A1
p.5]
It does not consider the over 800 million gallons of Renewable Diesel volume available from
Neste plants located in Singapore, Porvo Finland, and Rotterdam. According to company
statements currently half of that production is from waste oils that qualify as BED under the
RFS2 pathways. An additional 136 million gallons of capacity is available from Canada. Finally,
with the recent approval of the survey methodology by the EPA it is likely that Argentina will
increase its exports of biodiesel to the U.S. given the subsidies provided to Biodiesel to be
exported from Argentina. In 2013 imports from Argentina were 132 million gallons'. The NEB
has estimated that imports from Argentina could exceed 400-500 million gallons annually in
2015 forward due to the recent adoption, by the EPA of utilizing the survey method of
compliance for Argentinian production. Capacity clearly exists to meet both the 2.0 billion
gallons proposed by Darling in 2016 or the 2.3 billion gallons for 2017. [EPA-HQ-OAR-2015-
0111-1929-A1 p.6-7]
The EPA summarizes its analysis of available feedstock for BED in the Current Proposed Rule
by concluding, 'The combined volumes of soybean oil, corn oil, and waste oils produced
annually is far more than would be needed to produce 2.1 billion gallons of biodiesel' and the
EPA adds, 'For instance, in 2014 exports of soy oil were 250 million gallons and exports of
rendered fats and greases was 440 million gallons.'1 With even a small diversion of volume that
is currently being exported the EPA has established there is no feedstock limitation for an
expansion of volumes to those suggested in this submittal. Further, that conclusion ignores the
substantial volume of imported BED which is acknowledged multiple times in the Proposed
Rule. The EPA reports that imports which met the qualifications to fulfill the BED bucket were
340 million gallons in 2013 and 322 million gallons in 2014. The vast majority of the imported
BED utilizes feedstock which is sourced locally (and outside the US) to the BED fuel production
facility and not imported from the United States. That further expands the available feedstock
supply available for the production of Biomass Based Diesel. The EPA has clearly established in
the Proposed Rule there is no feedstock limitation associated with the volumes being suggested
by Darling in this submittal. In fact the EPA could mandate over 3 billion gallons of BED before
it reaches its own established feedstock limitations. It should also be noted that the imports from
Argentina will most likely substantially increase due to the recent decision of the EPA to allow
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for the survey method of compliance for Argentinian biodiesel production. [EPA-HQ-OAR-
2015-01 ll-1929-Alp.7]
Green Plains, Inc.
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 259-260.]
One of the major concerns for our biodiesel customers is the 70 to 75 cents per gallon export
incentive that Argentina has for biodiesel relative to their soybean oil. We are starting to see the
very negative impact to our customers caused from Argentine biodiesel vessels arriving at
United States ports. Another ongoing concern for our biodiesel
Imperium Renewables and Renewable Biofuels
The proposed rule also fails to account adequately for increasing volumes of imported BED
entering the country, thereby undermining the domestic industry's expectation and potential for
growth and for the RFS program to further diversify the nation's transportation fuels. We believe
that if BED imports are going to continue to climb, the annual RVOs must be increased further
to account for these imports in addition to demonstrated domestic production capability. [EPA-
HQ-OAR-2015-0111-2043-A1 p.2]
With that as a backdrop, it is equally important to review past and prospective volumes of RIN-
eligible BED entering the country from foreign sources, and to consider their impact on supply,
as well as on domestic producers. [EPA-HQ-OAR-2015-0111-2043-Al p.3]
We note that volumes of RIN-eligible BED are being imported from a number of regions,
including Asia, South America, Europe and others. These imports aggregate to several hundred
million additional gallons annually. Imports too often come from countries with lower wages and
worker safety standards, and often are subsidized by the foreign government. Absent the EPA
setting annual volume requirements high enough to accommodate both domestic production and
these increasing import volumes, the imports will undercut U.S. producers and undermine the
energy security goals of the RFS program. [EPA-HQ-OAR-2015-0111-2043-Al p.3]
Imported BED is on the increase. In 2011, imported REST generating BED volumes represented
only 44 million gallons. In 2012, those volumes increased to 97 million gallons. By 2013, those
volumes had more than tripled to 368 million gallons. Even amid the serious uncertainty of the
BED market of 2014, RIN generating imported volumes topped 330 million gallons. EPA's most
recent EMTS posting reports that over 144 million gallons of foreign-sourced RIN generating
biomass based diesel has already been shipped to the US through May. [EPA-HQ-OAR-2015-
0111-2043-A1 p.3]
In February of 2015, EPA approved a petition from CARBIO, the trade association for BED
producers in Argentina, to qualify certain Argentine production for RFS RIN generation. This
approval is arguably a game changer that will result in significant increases in imported RIN-
eligible BED. [EPA-HQ-OAR-2015-0111-2043-A1 p.3]
In our discussions with BED producers in Argentina, we have been told that the industry has the
capacity to produce well over 700 million gallons of RIN-eligible BED, has begun to ramp up
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production this year and will increase production dramatically going forward. Although we do
not expect Argentinian volumes to reach that level this year, the impact of that decision is
already beginning to be observed. [EPA-HQ-OAR-2015-0111-2043-Al p.3]
Separately, shipping records covering Argentinian BED show increasing volumes destined for
U.S. ports and markets. According to Bloomberg tracking of shipments, as of this writing, 2015
imports of Argentinian BED total nearly 52 million gallons, including 23.3 million gallons that
arrived in mid-July. An additional 19.36 million gallons is scheduled to arrive in mid-August.
EIA data shows even higher volumes of Argentinian BED having arrived through May 2015.
[EPA-HQ-OAR-2015-0111-2043-Alp.3]
As a basis for projection, the year to date number is a little deceiving for two reasons: First, the
CARBIO application was only approved in February so there will be a lag in the preparation and
shipping of product, and secondly, there were major labor-management conflicts at Argentinian
ports in the spring that led to there being only one shipment between February 16 and June 14.
Shipments commenced again in June. Additionally, according to a July 23, 2015, WorldEthanol
andBiofuels Report, Argentinian FAME production reached nearly 52 million gallons/month in
May, up month over month, reportedly in direct response to the increased demand in the US.
[EPA-HQ-OAR-2015-0111-2043-Alp.3-4]
With the February EPA approval of the CARBIO petition, and the recent ramp up in scheduled
shipments, we anticipate that volumes will increase on a month-over-month basis, continuing
through 2016 and beyond. A moderate growth projection takes that figure to 170 million gallons
for 2015, a figure consistent with the projections in the most recent USDA GAIN report. A more
aggressive, but realistic, growth scenario could increase the Argentinian imports to well over 300
million gallons this year. [EPA-HQ-OAR-2015-0111-2043-Al p.4]
Taking into account this trend line of monthly increases of Argentine product, combined with
current imports from other countries, a conservative projection would put total 2015 BED
imports in the range of 550 million gallons, and imports could increase to 800 million gallons or
more in subsequent years. Given this projected ramp up, we recommend that EPA carefully
review EMTS data that comes out after the comment period is closed, but before the rule is
finalized, to determine if this upswing in imports is continuing. [EP A-HQ-O AR-2015-0111-
2043-A1 p.4]
Indiana Soybean Alliance and American Soybean Association
The EPA should implement the RFS in a way that helps build our domestic industry, and doing
so requires strong policy signals that promote fulfilling volume requirements with domestically
produced biofuels to the greatest extent possible. Increasing the biomass-based diesel
requirements relative to the overall Advanced Biofuels requirements is a way to accomplish that
mission. [EPA-HQ-OAR-2015-0111-A1 p.2]
Wherever possible, EPA should seek to promote domestic biofuel sources to fulfill the RFS
volume requirements. However, when determining the appropriate volume standards for
biomass-based diesel, the EPA must also account for the likelihood of increased imports of
biodiesel from Argentina due to some factors beyond the RFS volume requirements. [EPA-HQ-
OAR-2015-0111-A1 p.2]
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Iowa Renewable Fuels Association
Additionally, if the Agency is serious about building upon the successes of the U.S. biodiesel
industry, it must account for genuine concerns about dramatic increases in Argentinian biodiesel
imports. The EPA decision in January of this year to fast track Argentinian biodiesel imports
through the significantly less stringent survey approach to sustainable feedstock verification will
have powerful ramifications for U.S. biodiesel producers. Some estimate that up to 600 million
gallons of Argentinian biodiesel could enter the U.S. as a result from this decision.36 Therefore,
while the Agency describes the proposed biodiesel RFS levels as providing steady growth, they
could actually be a step backwards for U.S. biodiesel producers once Argentinian imports are
properly accounted for. [EPA-HQ-OAR-2015-0111-1957-A2 p. 10]
36. Fatka, Jacqui. "EPA streamlines Argentine biodiesel imports." Feedstuffs. 28 January 2015:
http://feedstufFs.com/storv-epa-streamlines-argentine-biodiesel-imports-45-123298.
Minnesota Soybean Processors (MnSP)
MnSP has special concerns that EPA has not fully accounted for the impact of foreign imports,
especially from Argentina. CARBIO members make up the majority of Argentinian biodiesel
production and approximately 720 million gallons of Argentinian biodiesel production capacity
is registered with the EPA. CARBIO members signed on to the lax "Survey" plan approved by
EPA with the result that imports into the United States, which are now allowed by the relaxed
"Survey" plan are bound to increase, especially in light of the fact that the Argentinian
government subsidizes biodiesel production through a Differential Export Tax (DET) program.
Under the DET program, soybean processors are encouraged to export biodiesel rather than
crude soybean oil out of the country. [EPA-HQ-OAR-2015-0111-2505-A1 p.3]
It is appropriate to remind EPA that the statute that authorizes EPA to oversee the RFS program
is titled "Energy INDEPENDENCE and Security Act of 2007. (Emphasis added.) It is a stretch
to imagine that Congress desired to rely on foreign biofuel to achieve energy independence. We
ask EPA to pay particular attention to NBB's comments relative to the harm potentially imposed
to the domestic biodiesel industry by foreign produced imports. [EPA-HQ-OAR-2015-0111-
2505-A1 p.3]
National Association of Truck Stop Operators (NATSO)
EPA's recent decision to allow streamlined Argentinian biodiesel imports to qualify under the
RFSŁU is another example of public policy that serves to increase the supply of biodiesel that
can be acquired and sold at a lower cost than diesel fuel. Such imports will increase the supply
of biodiesel in the United States, which in turn imposes downward pressure on prices. [EPA-HQ-
OAR-2015-0111-2478-A1 p.5]
[11 See Environmental Protection Agency, Letter from Byron Bunker, Director, Compliance Division, Office of
Transportation and Air Qualify. Jan. 27, 2015, available at
http://www.epa.gov/otaq/fuels/renewablefuels/documents/carbio-decision-document-2015-01-27.pdf.
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National Biodiesel Board
EPA'S PROPOSAL CONTINUES TO IGNORE THE HARMS TO THE DOMESTIC
BIODIESEL INDUSTRY AS A RESULT OF IMPORTS RISING AT A VOLUME ABOVE
THE INCREASES EPA CONTENDS IT IS PROPOSING TO "GROW" U.S. RENEWABLE
FUELS, INCLUDING IMPORTS WITH SUSPECT ELIGIBILITY UNDER EPA'S
RECENTLY APPROVED (WITHOUT PUBLIC INPUT) SURVEY PLAN. [EPA-HQ-OAR-
2015-01 ll-1953-A2p.75]
Energy security and domestic jobs are two central goals often highlighted under the EISA and
the RFS2. As discussed herein, the U.S. domestic biodiesel industry has the capacity and
feedstocks available to produce dramatically more biodiesel than what has been required under
historical renewable volume obligations. Although EPA acknowledges that the proposed
volumes for biomass-based diesel through 2017 remain well below domestic capacity,61 EPA
makes no assessment as to the amount of potential imports of biomass-based diesel into the
United States. Rather, it simply contends that the biomass-based diesel industry must compete
with "other" advanced biofuels in order to continue to grow. But, unlike most "other" advanced
biofuels, which are largely not substitutes for diesel fuel, importers of biodiesel and renewable
diesel are the direct competitors to the U.S. biomass-based diesel industry. Under the RFS2
program, imports of biomass-based diesel and of additional biodiesel and renewable diesel that
qualify forDS or D6 RINs have increased. [EPA-HQ-OAR-2015-0111-1953-A2 p.75]
Importing fuel is also a way to meet the U.S. domestic standards. Although initially hitting a
high of 325 million gallons in 2008, biodiesel imports in the United States have increased from
around 23 million gallons in 2010 to over 300 million gallons in 2013. EIA, Monthly Energy
Review, Table 10.4: Biodiesel and other renewable fuels overview (June 2015), available at
http://www.eia.gov/totalenergy/data/monthly/pdf/sec 108.pdf. The three month total for January-
March of 2015 is 46 million gallons, almost twice as much as it was for the same time period in
2013 (23.7 million gallons).62 Id. In 2013, biodiesel imports substantially increased toward the
end of the year, which was largely due to the increase in imports from Argentina. Id.; EIA,
Today in Energy: U.S. biomass-based diesel imports increase to record levels in 2013, May 2,
2014, http://www.eia.gov/todavinenergy/detail.cfm?id=16111. The remaining volumes came
from Indonesia63 and various European countries. Id. November and December of 2013 had the
highest amount of imports by far at 69 million gallons and 74 million gallons, respectively. EIA,
Monthly Energy Review, Table 10.4: Biodiesel and other renewable fuels overview (June 2015),
available at http://www.eia.gov/totalenergv/data/monthly/pdf/secl08.pdf. [EPA-HQ-OAR-2015-
0111-1953-A2 p.75-75] [Table 10.4 can be found on page 76 of docket number EPA-HQ-OAR-
2015-0111-1953-A2]
These imports are expected to increase substantially, if not in 2015, certainly by 2016. Given
EPA's proposed biomass-based diesel volumes, the additional foreign capacity to an already
overfull domestic U.S. marketplace would negatively impact U.S. biodiesel producers. The effect
of adding hundreds of millions of gallons of new imported biodiesel on top of the proposed
already smaller mandate would create a disastrous marketplace for U.S. biodiesel producers.
[EPA-HQ-OAR-2015-0111-1953-A2p.76]
In particular, imports of soybean biodiesel from Argentina are likely to grow significantly. EPA
references only 132 million gallons of biomass-based diesel from Argentina in 2013. 80 Fed.
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Reg. at 33,133 n.88. These imports may have been aimed at heating oil (not the RFS2) and
reports have indicated that the Argentinian biodiesel industry was waiting to focus on the U.S.
market for EPA's approval of the CARBIO survey plan,64 which came in January of 2015. See,
e.g., AgroChart, Argentina: Biofuels AnnualJune 2013 (Nov. 2013),
http://www.agrochart.com/en/news/news/041113/argentina-biofuels-annual-jun-2013/. With the
approval, traders expected "significant volumes to be shipped." Id. ("Local traders believe that if
EPA makes them eligible to export they could ship some 300-800 million liters of biodiesel to
the US, especially to the east and west coasts as they are further away from the biodiesel
production area."); see also USDA Foreign Agricultural Service, Argentina: Biofuels Annual
2013, GAIN Report, at 12-13 (June 28, 2013). [EPA-HQ-OAR-2015-0111-1953-A2 p.76-77]
Argentina production of biodiesel has grown in recent years. A "continuously increasing export
demand" was cited as one of the key reasons for that growth. See USDA Foreign Agricultural
Service, Argentina: Biofuels Annual 2011, GAIN Report, at 8 (July 8, 2011). Production capacity
grew from 0 in 2007 to 5.15 billion liters (1.36 billion gallons). USDA Foreign Agricultural
Service, Argentina: Biofuels Annual 2014, GAIN Report, at 11 (July 1, 2014) ("GAIN 2014
Argentina Biofuels Annual"). Today, Argentina has an estimated 5.2 billion liters (1.37 billion
gallons) in total production capacity for biodiesel. See USDA Foreign Agricultural Service,
Argentina: Biofuels Annual 2015, GAIN Report, at 2, July 1, 2015 ("GAIN 2015 Argentina
Biofuels Annual"), available at
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Biofuels%20Annual
Buenos%20Aires Argentina 7-l-2015.pdf Exports have "played a very important role, averaging
70% percent of Argentina's total biodiesel production." Id. Since domestic demand currently
does not approach capacity, these companies will continue to look for export markets. "In 2015
and 2016 local exporters will focus on the U.S. biodiesel market, which currently presents the
best export market potential." Id. Although seven of CARBIO's members were previously
registered with EPA prior to approval of the survey plan, they had only imported 47 million
gallons in 2014 that generated RINs. Id. CARBIO members make up the vast majority of
Argentinian biodiesel production, and almost 720 million gallons in capacity is already
registered with EPA. According to USDA, RINs allow export prices to the United States to be
$80-100 per ton higher than prices sold to other markets. Id. at 13. Although this is purportedly
offset by the costs of "segregation" of $30-40 billion, those costs were prior to EPA's approval
of the survey plan. Id. Couple these reduced costs with the efficiencies gained by the fact that the
production areas for these facilities are very close to ports, and the ability to export to the United
States cannot be denied. Id. With the favorable tax treatment in Argentina, the lack of a tax credit
in the United States is not much of a disincentive when the United States may be the only market
available. CARBIO members signed onto the survey plan, and thus, the imports into the United
States, which are now subject to relaxed requirements from the individual map and track
requirements, are likely to increase. [EPA-HQ-OAR-2015-0111-1953-A2 p.77]
In addition to the approval from EPA, the likelihood of increased imports to the United States
can also be attributed to two key factors. First, the Argentinian government props up its biodiesel
production through a Differential Export Tax (DET) program. Under the DET program,
Argentinian biodiesel producers are encouraged to ship finished biodiesel rather than raw
soybean oil out of the country. Among other things, the DET program helps creates jobs in
Argentina. [EPA-HQ-OAR-2015-0111-1953-A2 p.77]
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The second factor is that Argentina has been losing important export markets in recent years due
to concerns regarding the subsidies Argentinian biodiesel receives. Most significant, the
European Union placed anti-dumping measures on Argentina in 2013, which restricted imports
into Europe. See Reuters, Argentine biodiesel exports slammed by EU tariffs in 2014 - trade
group, Mar. 11, 2014, http://www.reuters.com/article/2014/03/ll/argentina-biodiesel-
idUSL2NOM813M20140311. After approval of Argentinian biodiesel under the European
Renewable Energy Directive (RED), Argentinian biodiesel flooded the European marketplace
and displaced biodiesel produced in Europe. Prior to the European anti-dumping subsidies,
Argentina was the world's largest biodiesel exporter, with 90 percent of its exports sold in the
European market. Tess Bennett, Running on Empty: Argentine Biodiesel Industry's Fight to
Survive, The Argentina Independent, Nov. 6, 2013,
http://www.argentinaindependent.com/currentaffairs/running-empty-argentine-biodiesel-
industrys-fight-survive/. The same dumping activity from Argentina may now occur in the
United States where domestic demand in Argentina is not expected to make up for this loss in
exports. In late 2014, it lost the Africa market when crude oil prices collapsed, making Argentine
biodiesel uncompetitive with #2 diesel fuel. See WAEES, Analysis of an Alternative Biodiesel
Volume Obligation to the EPA 's Proposed Rule, at 14 (July 2015) (Attachment 12); see also
GAIN 2015 Argentina Annual at 12. There are additional reports of concerns raised in Peru that
might affect imports to that country. GAIN 2015 Argentina Annual at 13. The remaining market
to handle the substantial volumes that can be exported is the United States. [EPA-HQ-OAR-
2015-01 ll-1953-A2p.78]
Prior to the RFS2, Argentina was among the main biodiesel producer countries in the world. See
CARBIO, Argentine Biodiesel Market Overview, Presentation Oct. 2010, available at
http://www.argentine-embassy-uk.org/docs/economiacomercio/files/networking/carbio.pdf.
Members of CARBIO made up about 95 percent of the biodiesel production in Argentina. Id.
The majority of Argentinian biodiesel production is exported out of the country. In 2014,
biodiesel exports from Argentina increased by 41 percent. Platts, Argentinian biodiesel exports
up 41%year onyear in 2014 to 1.6 mil mt: Carbio, Jan. 22, 2015, http://www.platts.com/latest-
news/agriculture/1 ondon/argentinian-biodiesel-exports-up-41 -year-on-year-21881303 For 2015,
based on imports through June, about 90 million gallons of U.S. biodiesel from Argentina can be
expected, but this number is likely low. Genscape, Outlook on the Global Renewable Fuels
Markets: Your Webinar Questions Answered, at 7, May 2015. Argentinian exports to the U.S.
have been stronger in the latter half of the year and through the winter, post-harvest, over the last
two years. M_That is when EPA asserts the CARBIO approved plan would begin. [EPA-HQ-
OAR-2015-0111-1953-A2 p.78].
USDA has found that the U.S. biodiesel market is expected to be the "most active destination,"
with estimated exports to the United States at 625 million liters (165 million gallons) in 2015 and
750 million liters (198 million gallons) in 2016. See GAIN 2015 Argentina Annual at 1. In
addition, based on import volumes reported by Eurostat using tariff codes, Argentina exported as
much as 442 million gallons in 2012 to Europe for which it has been seeking a new export
market. An analysis of feedstock markets show that imports of biodiesel from Argentina may
jump to 336 million gallons in 2015 and 520 million gallons in 2016. See WAEES, Analysis of
an Alternative Biodiesel Volume Obligation to the EPA 's Proposed Rule, at 14 (July 2015)
(Attachment 12). "Biodiesel traders that have reviewed these model estimates continue to warn
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that these numbers may be conservative. The Argentine biodiesel sector was designed for
biodiesel exports." Id. [EPA-HQ-OAR-2015-0111-1953-A2 p.78-79]
We have been assured that EPA does not believe the U.S. market will be flooded, estimating
only 100 million gallons will be imported from Argentina in 2015. See also Chuck Zimmerman,
EPA Response to RFS and CARBIO Plan, Jan. 30, 2015,
http://energy.agwired.com/2015/01/30/epa-response-on-rfs-and-carbio-plan/. Even at this
estimate, however, these volumes are more than the purported increase for biomass-based diesel
for 2015 and at the purported increases for 2016 and 2017, adversely affecting domestic
producers that are able to meet more than the volume that EPA is proposing. As the program is
implemented, these volumes are likely to increase substantially and quickly. [EPA-HQ-OAR-
2015-01 ll-1953-A2p.79]
Other renewable diesel imports have also increased from 25 million gallons in 2012 to over 200
million gallons in 2013, with the bulk coming from Singapore. See EIA, U.S. Imports by
Country of Origin—Other Renewable Diesel (Release Date June 30, 2015) (Attachment 13).
"Neste Oil's renewable diesel produced in Finland and Singapore is qualified as advanced under
the RFS and is imported in significant quantities (as much as 25 million gallons per month)." E2
2014 Advanced Biofuel Report at 13. These imports are likely to continue to increase,
particularly due to the California LCFS. "Depending on the feedstock and the method of
production, both biodiesel and renewable diesel have some of the lowest CI values among
eligible fuels, and thus are valuable fuels for meeting LCFS targets." EIA, Today in Energy: U.S.
biomass-based diesel imports increase to record levels in 2013, May 2, 2014,
http://www.eia.gov/todavinenergy/detail.cfm?id=16111. [EPA-HQ-OAR-2015-0111-1953-A2
p.79]
Total imports of biomass-based diesel represented 34 percent of U.S. biomass-based diesel
consumption in the United States in 2013.65 EIA, US biodiesel and renew able diesel
imports decline 36% in 2014, Mar. 20, 2015,
http://www.eia.gov/todayinenergv/detail.cfm?id=20452. Imports are likely to continue to play
"an important role in meeting the LCFS and the RFS targets going forward." EIA, Today in
Energy: U.S. biomass-based diesel imports increase to record levels in 2013, May 2, 2014,
http://www.eia.gov/todayinenergy/detail.cfm?id=16111. A "number of other advanced
international projects will be complete by 2016." E2 2014 Advanced Biofuel Report at 9. The E2
2014 Advanced Biofuel Report includes a "list of international companies and projects that may
have an impact on the U.S. advanced biofuel market." Id. at 14. For example, facilities in Europe
have begun to convert from petroleum to renewable diesel production. See, e.g., Haldor Topsdale
March 18, 2015 Press Release, Wood-based renewable diesel bio-refinery goes on-stream in
Finland, http://www.topsoe.com/news/2015/03/wood-based-renewable-diesel-bio-refmery-goes-
stream-finland: Ron Kotrba, Total to convert oil refinery to renewable diesel production,
Biodiesel Magazine, Apr. 16, 2015, http://www.biodieselmagazine.com/articles/355201/total-to-
convert-oil-refmerv-to-renewable-diesel-production. [EPA-HQ-OAR-2015-0111-1953-A2 p.79-
80]
EPA must consider and account for these expected increases in imports. Such increases, without
a corresponding increase in the RFS2 requirements will hurt domestic production and, thereby,
the U.S. economy, undermining a key goal of the program. As noted above, estimates indicate
that increasing imports can fulfill any unmet portion of the RFS2. E2 2014 Advanced Biofuel
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Report at 9. Thus, EPA should ensure the volumes account for this potentially available supply
and, thereby, better ensure the mandated volumes may be met. In this way, EPA can, in fact,
"support" the successful existing domestic industry and continue to push the industry forward. In
demanding increasing use of renewable fuel in the dieselfuel markets, Congress also sought
increased domestic production of biomass-based diesel. On this, EPA's proposal simply fails.
[EPA-HQ-OAR-2015-0111-1953-A2p.80]
The only "competition" EPA is creating is between domestic biomass-based diesel production
and foreign biomass-based diesel production, while at the same time apparently trying to protect
domestic ethanol production from sugarcane ethanol by lowering the advanced biofuel volume.
Indeed, because EPA's purported "increase" in the biomass-based diesel volume is likely less
than expected imports, it cannot be the "maximum" achievable volume, even under EPA's own
standard. EPA does not explain why biomass-based diesel should be subject to a different
requirement than all other biofuels. This available supply, which can easily come into the United
States, then should be accounted for when assessing the "maximum" available supply for
advanced biofuels. [EPA-HQ-OAR-2015-0111-1953-A2 p.80]
The following table shows the imports of biodiesel and renewable diesel into the United States
based on country of origin. [EPA-HQ-OAR-2015-0111-1953-A2 p.80] [The table can be found
on pages 80-81 of docket number EPA-HQ-OAR-2015-0111-1953-A2]
61 80 Fed. Reg. at 33,116 ("There currently exists only about 2.8 billion gallons of registered biodiesel production
capacity in the U.S., though total production capacity considering unregistered facilities may be as high as 3.6
billion gallons.")
62 Imports of renewable diesel in April this year also were higher (266 thousand-barrels) than had been imported in
the same month in 2012 (50 thousand-barrels), 2013 (148 thousand-barrels) and 2014 (247 thousand-barrels). EIA,
U.S. Imports from Non-OPEC Countries of Other Renewable Diesel Fuel (release date June 30, 2015),
www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=M EPOORDO IMP NUS-MNO MBBL&f=M.
63 These imports are likely to be biodiesel produced from palm oil, which EPA found did not even meet the 20%
lifecycle greenhouse gas emission reductions under the statute.
64 NBB submitted a petition for reconsideration of the approval of the CARBIO program. EPA, to date, has not
responded. Given the significant concerns with the plan, we request EPA respond to this petition. We incorporate
the petition and attach it to these comments (Attachment 11).
65 Although this number declined in 2014, this was due, in part, to "[uncertainty surrounding future Renewable Fuel
Standard (RFS) targets." EIA, US biodiesel and renewable diesel imports decline 36% in 2014, Mar. 20, 2015,
http://www.eia. gov/todavinenergv/detail.cfm?id=20452.
National Renderers Association (NRA)
RFS volume levels for biomass-based diesel should also be higher than proposed by EPA to
account for the recent sharp increase in imports. U.S. producers and feedstock suppliers should
rightly be the first to realize the economic benefits of higher final RFS volumes, not foreign
competitors. [EPA-HQ-OAR-2015-0111-2496-A1 p.2]
Newport Biodiesel
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 209.]
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A second concept that must be considered is the effect of imported biodiesel on a domestic
industry. It is critical that EPA be realistic in addressing the potential for much more biodiesel to
be imported in the coming years. Unless EPA accounts appropriately for this increased volume,
small producers, such as Newport Biodiesel, will be soon priced right out of the market. I have
heard EPA estimates of imported biodiesel to be in the vicinity of 100 million gallons per year,
but I'm sure that NBB will provide definite evidence that the potential for such impacts —
imports is three or four times higher.
Northern Canola Growers Association
When determining the appropriate volume standards for biomass-based diesel, the EPA can
mitigate the potential for increased imports of sugar cane ethanol from Brazil and account for the
likelihood of increased imports of biodiesel from Argentina. [EPA-HQ-OAR-2015-0111-2036-
Al p.2]
There is also a likelihood that there will be a significant increase in imports of biodiesel from
Argentina to the United States. Prior to the European Union imposing anti-dumping tariffs,
Argentina was exporting over 400 million gallons to that market and they are seeking new
markets for those volumes. The EPA has approved earlier this year a streamlined process for
Argentine biodiesel to comply with the RFS and should expect Argentine imports into the U.S.
to increase significantly in future years. The biomass-based diesel volumes for 2016 and 2017
should reflect this potential for increased biodiesel imports. [EPA-HQ-OAR-2015-0111-2036-
Al p.2-3]
Renewable Energy Group, Inc. (REG)
Based on available EMTS data, from 2010-2012, imported volumes of biomass-based diesel
represented, on average, 6.5% of the total biomass-based diesel volume. In 2013 and 2014,
imports increased dramatically to represent nearly 20% of the biomass-based diesel volume.
According to U.S. Census and EIA data, imports of biodiesel through May have more than
doubled in 2015 compared to the same time last year. Significant increases can be seen from
Indonesia, Argentina, Singapore (renewable diesel) and Korea. See NBB Table: U.S. Imports of
Biodiesel & Renewable Diesel HTS 3826.00.1000. These imports are expected to increase
substantially, if not in 2015, certainly by 2016. Given EPA's proposed biomass-based diesel
volumes, the additional foreign capacity to an already overfull domestic U.S. marketplace
would negatively impact biodiesel producers. The effect of adding hundreds of millions of
gallons of new imported biodiesel on top of the proposed already smaller market place would
create a disastrous marketplace for U.S. biodiesel producers. [EPA-HQ-OAR-2015-0111-1952-
Al p.3-4]
In particular, imports of soybean-based biodiesel from Argentina are likely to grow significantly.
Based on Agencia Maritima Nabsa S.A. (NABSA) data, there are currently more than 20 million
gallons of Argentine biodiesel scheduled to be loaded on vessels with the U.S. listed as the
reported destination in the next 30 days (http://www.nabsa.com.ar/VesselLineUp.php). On an
annualized basis this is well in excess of the 100 million gallons projected by CARBIO. USDA
has found that the U.S. biodiesel market is expected to be the "most active destination," with
exports at 625 million liters (165 million gallons) in 2015 and 750 million liters (198 million
gallons) in 2016. See USDA Foreign Agricultural Service, Argentina:
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Biofuels Annual 2015, GAIN Report, July 1, 2015, available at
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Biofuels%20AnnualBuenos%20Aires
Argentina7-l-2015.pdf See also, NBB comments section VII. While we feel the GAIN report is
conservative in its estimates, their projection supports imports larger than 100 million gallons.
[EPA-HQ-OAR-2015-0111-1952-Alp.4]
South Dakota Soybean Assocation
Currently, Argentina is exporting millions of gallons of biodiesel into the U.S. marketplace,
which is offsetting our domestic production for the RFS. Increasing the RVOs from 2015 to 2017
by 100 million per year, does not take into account the millions of gallons of Argentine biodiesel.
In order to continue growth of the U.S. biodiesel industry with respect Argentina imports, we
need to increase our annual RVOs by 300 million per year. [EPA-HQ-OAR-2015-0111-1308-A1
p. 1]
U.S. Canola Association (USCA)
When determining the appropriate volume standards for biomass-based diesel, the EPA can and
should mitigate the potential for increased imports of sugarcane ethanol and account for the
likelihood of increased imports of biodiesel from Argentina. [EPA-HQ-OAR-2015-0111-1819-
Al p.2]
Biomass-based diesel and imported sugarcane ethanol are the two primary, and practically the
only, fuels available to fulfill the Advanced Biofuels requirements. Since EPA contends that
there is an ethanol "blend wall," increasing the biomass-based diesel volumes would help
alleviate this so-called "blend wall" issue by reducing the imports of sugarcane ethanol. In
addition, on an equivalency or RIN basis, biomass-based diesel counts as 1.5 gallons for each 1.0
gallon of sugarcane ethanol. [EPA-HQ-OAR-2015-0111-1819-A1 p.3]
Wherever possible, EPA should seek to promote domestic biofuel sources to fulfill the RFS
volume requirements. However, when determining the appropriate volume standards for
biomass-based diesel, the EPA must also account for the likelihood of increased imports of
biodiesel from Argentina due to some factors beyond the RFS volume requirements. [EPA-HQ-
OAR-2015-0111-1819-A1 p.3]
Prior to the EU imposing anti-dumping tariffs, Argentina was exporting approximately 400
million gallons to that market and they are seeking new markets for those volumes.l The EPA
has approved a streamlined process for Argentine biodiesel to comply with the RFS and should
expect Argentine imports into the U.S. to increase significantly in future years. [EPA-HQ-OAR-
2015-0111-1819-Alp.3]
Argentina has an estimated 5.2 billion liters (1.37 billion gallons) in total production capacity for
biodiesel, and in past years exports have averaged 70% percent of Argentina's total biodiesel
production.2 In 2015 and 2016 local exporters will focus on the U.S. biodiesel market, which
currently presents the best export market potential.3 Members of CARBIO, the trade association
whose petition for streamlined RFS compliance was approved by EPA this year, make up the
vast majority of Argentinian biodiesel production, and almost 720 million gallons in capacity is
already registered with EPA. CARBIO members signed onto the survey plan approved by EPA,
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and thus their imports into the United States are likely to increase. [EPA-HQ-OAR-2015-0111-
1819-Alp.3]
AS EPA is aware, the European Union placed anti-dumping measures on Argentina in 2013,
which restricted biodiesel imports into Europe. Prior to the European anti-dumping subsidies,
Argentina was the world's largest biodiesel exporter, with 90% of its exports sold in the
European market. The same dumping activity from Argentina may now occur in the United
States as demand for domestic use of biodiesel in Argentina is not expected to make up for the
loss in exports. The Argentinian government also artificially subsidizes its biodiesel production
and exports through a Differential Export Tax (DET) program. [EPA-HQ-OAR-2015-0111-
1819-A1 p.3-4]
1 USD A Foreign Agricultural Service. July 8, 2011. Argentina Biofuels Annual 2011, Global Agricultural
Information Network Report. Available at:
http://gain.fas.usda.gov/Recent%20GArN%20Publications/Biofuels%20Annual Buenos%20Aires Argentina 7-8-
2011.pdf
2 USDA Foreign Agricultural Service. July 1, 2015. Argentina Biofuels Annual 2011, Global Agricultural
Information Network Report. Available at:
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Biofuels%20Annual Buenos%20Aires Argentina
7-l-2015.pdf
3 Ibid
Union of Concerned Scientists
Increasing the use of biodiesel at a faster rate will primarily result in bidding feedstocks away
from other uses and ultimately to reduced vegetable oil exports or increased imports of vegetable
oil or biodiesel. Increasing vegetable oil or biodiesel imports and bidding vegetable oil and other
biodiesel feedstocks away from other uses are not sustainable means to meet the objectives of the
RFS as outlined in Clean Air Act (CAA) section 211 (o)(2)(B)(ii). [EPA-HQ-OAR-2015-0111-
2260-A1 p.3]
Setting targets for production that exceed the reasonable growth of feedstocks will lead to a
growing feedstock deficit (described in detail in Brorsen 2015). This will impact food markets,
particularly affecting people living in extreme poverty for whom vegetable oil is a significant
source of dietary fat (WHO 2002). 1 It will also indirectly expand the market for palm oil to
replace soybean oil currently exported for food use and other purposes. [EPA-HQ-OAR-2015-
0111-2260-A1 p.3]
Earlier assessments submitted by the American Biodiesel Board have suggested biodiesel
feedstock is available to support a rate of growth of biodiesel mandates as high as 300 Mgal a
year, but these assessments consider the global availability of vegetable oil rather than domestic
resources. The US fuel market is not the sole consumer of BED. EPA should consider how BED
growth would impact the balance of trade for vegetable oils in assessing the relevant data. We do
not believe it is consistent with the goals of the RFS to create an unsustainable shift in global
markets in which the US becomes increasingly dependent on vegetable oil or biodiesel imports.
[EPA-HQ-OAR-2015-0111-2260-A1 p.4]
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Our concern about changes in the balance of trade in vegetable oil and biodiesel is not motivated
by a protectionist impulse but primarily by the concern that palm oil is the marginal oil in the
global marketplace for vegetable oil. As a consequence, changes in the US balance of trade in
vegetable oil are unlikely to lead to increased planting of soybeans in the US or abroad, which
are grown primarily for protein meal. Instead, over the long term, steady increases in demand for
vegetable oil beyond the US capacity to supply it will result primarily in expanded demand for
palm oil. This need not be caused by direct US imports of palm oil BED, but could occur
indirectly as price sensitive consumers of vegetable oil elsewhere in the global marketplace shift
from soy oil to palm oil on the basis of price. The 2012 Stanford Ph.D. dissertation of Joanne
Gaskell2 highlights the palm oil revolution going on in Asia. India, for example, as one of the
largest global importers of vegetable oil, has been steadily increasing the quantity and share of
oil imports from palm oil, although it is still importing an average of 1.5 million metric tons of
soybean oil per year in the last five years (Foreign Agricultural Service, USD A). If US biodiesel
markets bid away vegetable oils that are eligible biodiesel feedstocks, it is likely that this oil will
primarily be replaced by further expansion of palm oil production. Palm oil production is a major
driver of deforestation and the associated land use change and peat emissions will lead to
dramatic increases in carbon emissions (UCS 2012).3 [EPA-HQ-OAR-2015-0111-2260-A1 p.4]
Unrealistic and unstainable growth rates for BED are not just a concern for food markets and the
environment, but for BED producers as well. Expanding BED production capacity beyond the
available feedstocks will eventually lead to market instability in the BED market. A sustainable
rate of growth of BED production based on stable long term trends in underlying low carbon
feedstock availability will provide more sustainable support for steady growth of the BED
industry over time. Rapid increases in production that are based on bidding feedstock away from
other uses and changing the balance of trade will enhance the risk of a future market collapse
when feedstock availability inevitably becomes constrained. [EPA-HQ-OAR-2015-0111-2260-
Al p.4]
Response:
In determining the appropriate RFS standards for 2016, we have considered the potential for
imported volumes of biodiesel and renewable diesel. The total renewable fuel standard we are
finalizing in this rule for 2016 includes the maximum reasonably achievable volume of
qualifying biodiesel and renewable diesel that we project can be supplied, including both
domestically produced and imported volumes. In projecting available volumes of biodiesel and
renewable diesel we considered a wide range of potential constraints to increasing the supply of
these fuels, including the availability of feedstocks and production capacity in the United States
and overseas, and also the ability for the transportation fuels market to distribute and consume
increased volumes of biodiesel and renewable diesel (see Section II.E.3 for a discussion of
biodiesel constraints, including available supply of biodiesel and renewable diesel
feedstocks). An increase in the amount of biodiesel or renewable diesel available for import into
the United States may not ultimately result in an increased supply in 2016, due to mandates and
demand for this fuel from other countries and potential limitations to the fuel's distribution and
use as transportation fuel or for other qualifying purposes. . Changing the biodiesel tax credit to
a producers' tax credit from the blenders' tax credit that has been in place for several years, as
has been proposed in the Grassley-Cantwell amendment, would also be expected to reduce the
volume of biodiesel and renewable diesel imports into the United States in 2016.
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We note that in setting the total renewable fuel applicable volume at 18.11 billion gallons we are
projecting an increase in the available supply of biodiesel and renewable diesel from about 1.8
billion gallons in 2015 to 2.5 billion gallons in 2016, and that our assessment of the renewable
fuel supplied to the United States in 2015 already includes over 600 million gallons of imported
biodiesel and renewable diesel from several countries including Argentina, Southeast Asia,
Europe, and other regions. This estimate for 2015 is based on a review of the EMTS data,
including that which became available after the NPRM and close of the comment period,
consistent with the request of one commenter. We have not specifically projected the amount of
biodiesel and renewable diesel expected to be imported to the United States in 2016, as our
standards do not differentiate between domestically produced and imported fuels. We think,
however, that it is unlikely that imports of biodiesel and renewable diesel fuels are likely to
decrease in 2016 from the 600 million gallons seen in 2015 in light of the increasing advanced
biofuel and total renewable fuel standards. We cannot exclude these volumes of imported
biodiesel and renewable diesel from participating in the RFS program, however by including all
available volumes of biodiesel and renewable (both domestically produced and imported) in our
total renewable fuel standard we believe we are providing the appropriate incentives for the
production of domestic biodiesel even if there are advantages to biodiesel producers in other
countries. For a further detail on our consideration of imported biodiesel and renewable diesel
see Section II.E.3 of the final rule. Many commenters pointed to individual sources of potential
imported volume that they thought might warrant increases in the RFS standards without being
specific as to what the resulting standards should be. We believe that our final standards
reasonably take into consideration all available sources.
In this final rule we are finalizing an advanced biofuel applicable volume for 2016 that is 210
million gallons greater than the proposed advanced standard, and a total renewable fuel standard
that is 710 million gallons greater than the proposed total renewable fuel standard. This is in part
in response to the information presented by commenters suggesting that greater volumes of
advanced biofuels, including imported biodiesel and renewable diesel, are available. We
acknowledge that increasing the production of biodiesel and renewable diesel will require the
consumption of additional feedstocks, including soy oil, but we believe that there are sufficient
feedstocks available to meet the advanced biofuel standard. In establishing the advanced
standard we have projected that more than 80% of the biodiesel and renewable diesel available in
2016 will qualify as an advanced biofuel. We also recognize, however, that significant volumes
of conventional (D6) biodiesel and renewable diesel have been imported in recent years, and will
likely continue to be an available source of renewable fuel in the United States in 2016. See
Section II.F for a further discussion of the advanced biofuel standard.
Imported volumes of biodiesel and renewable diesel were also considered in EPA's
determination of the biomass-based diesel standards for 2016 and 2017. As noted in the final
rule, however, we did not attempt to establish the BED standard for 2016 and 2017 at the
maximum achievable volume of biodiesel and renewable diesel in these years. We instead
attempted to balance the benefits to the United States and the biodiesel and renewable diesel
industries associated with a higher BED standard with a desire to provide incentives for the
development of non-BBD advanced biofuels and to allow these fuels to compete for market
share within the advanced biofuel standard. Nevertheless, based on the data and arguments
presented by commenters, we are finalizing BED standards for 2016 and 2017 that are 100
million gallons higher than the proposed volumes. For further detail on the consideration of
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imported volumes of biodiesel and renewable diesel in the BED standard see Section III of the
final rule.
One commenter argued that EPA should set the RFS standards in a manner that maximizes the
incentives for domestically produced biofuels by increasing the BED standard relative to the
advanced standard to reduce the opportunity for sugar cane ethanol to contribute toward meeting
the advanced standard. While we recognize the domestic economic benefits of domestically
produced renewable fuel, there are other important factors that EPA must consider in
establishing the standard. If EPA raises the BED standard relative to the advanced biofuel
standard, we reduce the opportunity for other advanced biofuels such as sugar cane ethanol, but
also advanced butanol and other drop-in fuels. We believe these other advanced fuels are
essential to the success of the RFS program, and allowing space for them to compete in the
advanced biofuel pool provides important incentives for those advanced biofuels that are
currently being produced as well as an important market signal to parties developing and
investing in these fuels (see Section III of the final rule and Section 3 of this document for
further discussion of the BED standard). We also note that the statute allows for imported
renewable biofuels to contribute towards meeting the RFS standards, and that certain imported
biofuels, such as sugarcane ethanol, are advanced biofuels that significantly contribute to a
reduction in GHG emissions from transportation fuel. Setting the RFS standards with the intent
of limiting renewable fuel imports could therefore conflict with furthering the goals of the Act.
Many commenters stated that there was the potential for large volumes of biodiesel and
renewable diesel from Argentina to enter US markets in 2016 and 2017, driven in part by EPA's
approval of an alternative plan for certain Argentine biodiesel producers to demonstrate
compliance with the RFS renewable biomass verification provisions, and the anti-dumping
measures on Argentine biodiesel adopted by the EU and the Differential Export Tax
(DET). EPA is aware of the large capacity of biodiesel production facilities registered under the
RFS program in Argentina, and we have considered the potential for biodiesel and renewable
diesel imports from Argentina and other countries in our projections of the total available supply
of biodiesel and renewable diesel. As discussed in Section II.E.S.iii of the final rule, however,
we believe that many of the commenters' projections of potential volumes of biodiesel imported
to the US from Argentina are overstated and do not accurately account for competing demand for
this fuel, both in the country where it produced and in other potential destination countries, and
the potential limits on the ability to distribute and consume this fuel within the United States.
We note that some commenters projected 400 - 500 million gallons of biodiesel would be
imported from Argentina to the United States in 2015. This number is significantly higher than
the actual volume of biodiesel imported from Argentina, which was on track to reach 94 million
gallons in 2105 based on import data through July 2015. There are also indications that
Argentina's production of biodiesel in 2015 will be significantly reduced compared to prior years
(see Section II.E.S.iii for more detail).
Some commenters expressed concern with EPA's approval of an alternative renewable biomass
tracking program for biodiesel producers in Argentina. While the approval of the plan is beyond
the scope of this rule, we have considered the extent to which the approval could lead to
increased imports, as described in the preamble, and after taking this issue into account, together
with other relevant issues, have determined that 2.5 billion gallons of biodiesel and renewable
diesel are the maximum reasonably achievable volumes for 2016.
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A commenter claimed that EPA had not considered imported volumes of renewable diesel in our
assessment of the available supply of renewable fuels. This is not the case, as we have included
both domestic and imported volumes of renewable diesel in our estimate (see Section II.E.3 for
more detail).
Several commenters pointed to the existence of biodiesel or renewable diesel produced overseas,
or U.S. production that is exported to other countries as being "available" to the U.S. and
claimed that it should be included in our assessment of the available supply of biodiesel and
renewable diesel in setting the RFS standards. However, the existence of biodiesel and
renewable diesel overseas, or domestically produced biodiesel and renewable diesel that is
currently being exported to other countries, does not mean this fuel is likely to be available to the
U.S. As discussed in Section II.E.3 of the final rule competing mandates for the use of biodiesel
and renewable diesel in other countries, incentives for the use of these fuels, existing contracts,
limitations on export and import capability, and constraints on the ability of the market to
distribute and use greater volumes of biodiesel and renewable diesel must all be taken into
consideration in determining the available supply of biodiesel and renewable diesel in the United
States in 2016.
A commenter noted that after the release of the NPRM a price spread between D6 RINs and D5
RINs emerged, opening the possibility for increased sugar cane imports to replace corn ethanol.
In this final rule EPA has sought to establish each of the standards in a manner consistent with
our waiver authorities, and with the goal of providing incentives for the lowest GHG-emitting
fuels. We further note that the commenter's concerns may be misplaced, as sugar cane ethanol
imports into the United States have remained low since the NPRM.28
A commenter raised concerns that by requiring greater quantities of vegetable oil to be used as a
feedstock to provide biodiesel and renewable diesel to the United States the RFS program could
lead to the increased production of palm oil. We note that in establishing the total renewable fuel
volumes for 2014 -2016 EPA is exercising our general waiver authority on the basis of an
inadequate domestic supply of renewable fuel. In this context we must consider all available
sources of qualifying renewable fuel. We are not permitted to consider the potential impact of
our standards on world palm oil production in this context. After establishing the total renewable
fuel standard EPA considered the degree to which to exercise our cellulosic waiver authority in
establishing the advanced biofuel standard. We believe that our final advanced biofuel standard
takes into account the reasonably attainable supply of advanced biodiesel and renewable diesel
both domestically and internationally that furthers the GHG reduction goals of the program. For
additional discussion of this topic see RTC Section 2.2.2.1.
28 See ethanol import data from EIA. Accessed 11/29/15. Available online at
https://www.eia.gov/dnav/pet/pet_move_impcus_a2_nus_epooxe_imO_mbbl_m.htm
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3.2.4 Limitations on Biodiesel use due to Cold Weather Operability and
Engine Warranties
Comment:
American Council on Renewable Energy (ACORE)
Furthermore, there is significant market opportunity and untapped demand for BED. The vast
majority of diesel vehicles being produced today, particularly heavy trucks that consume most
diesel fuel in the U.S., support blends of 20%. [EPA-HQ-OAR-2015-0111-1926-A1 p. 16]
Canola Council of Canada
Biodiesel produced from canola oil has important advantages. It has a lower level of saturated
fat, which results in biodiesel with a very low Cloud Point and helps canola biodiesel perform
better in cold weather, and it has a low iodine value, which means it is more stable and less prone
to oxidation. [EPA-HQ-OAR-2015-0111-2484-A1 p.4]
Countrymark Cooperative Holding Corporation
The main problem with biodiesel is cold weather properties. Biodiesel can start to gel at 35oF
which causes filter plugging and vehicle operation problems. Because of this, our members do
not purchase biodiesel starting November 1st through the middle of March. Biodiesel is not
desired for nearly 40% of the year. [EPA-HQ-OAR-2015-0111-2264-A1 p.6]
Growth Energy
EPA's low BED assumption cannot be explained by any distribution- or consumption-related
constraint, even if such constraints were cognizable in assessing the general waiver. "The
standard heating oil and diesel specifications allow up to 5% biodiesel" blends ("B5"), and thus
"all diesel and heating oil equipment and infrastructure is de facto compatible" with B5.307
Moreover, as EPA recognizes, "essentially all engine manufacturer warranties permit up to 5%
biodiesel."308 Given projected diesel consumption for 2016, 4.091 bil RINs could still be
generated from biodiesel up to the B5 blendwall.309 [EPA-HQ-OAR-2015-0111-2604-A2 p.52-
53]
The closest EPA comes to explaining its lower expectation is its suggestion that some diesel fuel
must "contain no biodiesel to accommodate that used in northern states during the coldest
months of the year."310 This is nonsense. Minnesota—hardly known as a mild winter
state311—has for years implemented a year-round B5 mandate.312 Oregon has done the
same.313 New grade specifications have been adopted for biodiesel that are specifically
designed to accommodate multi-season use.314 [EPA-HQ-OAR-2015-0111-2604-A2 p.53]
Further underscoring the ability of the market to reach well over full B5 consumption is the
existence of even higher biodiesel blends. Since 2014, Minnesota has mandated BIO in summer
months; it now requires BIO from April through September.315 Illinois has a history of selling
Bl 1 due to certain tax incentives.316 Moreover, B20 has substantial potential. As EPA
recognizes, "most medium and heavy-duty engine manufacturers warrant the use of blends up to
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B20 in their most recent models"317; these vehicles make up over 90% of on-road consumption
of diesel.318 [EPA-HQ-OAR-2015-Oil 1-2604-A2 p.53]
307 See Stratas Report at 11 (attached as Exhibit 2); see also http://noraweb.org/wp-
content/uploads/2015/05/Developing-a-Renewable-Biofuel-Option-May-2015-Rl.pdf (noting that in 2008,
definition of No. 2 oil, most common heating oil grade, "was changed to allow up to 5% biodiesel content with the
resulting blend being considered fully equivalent to No.2 oil").
308 80 Fed. Reg. at 33,128.
309 Stratas Report at 15 (attached as Exhibit 2).
310 80 Fed. Reg. at 33,128.
311 See Minnesota Department of Natural Resources, Minnesota Facts & Figures—Climate, at
http://www.dnr.state.mn.us/faq/mnfacts/climate.html (average winter temperature 6 degrees Fahrenheit in northern
part and 16 degrees Fahrenheit in southern part) (last accessed: July 17, 2015).
312 Stratas Report at 13 (attached as Exhibit 2).
313 Id.
314 Id. at 12-13.
315 Id. at 13; see also Minnesota Department of Agriculture, "About the Minnesota Biodiesel Program,"
http://www.mda.state.mn.us/renewable/biodiesel/aboutbiodiesel.aspx (last accessed July 17, 2015).
316 Stratas Report at 12 (attached as Exhibit 2); see Ron Kotrba, "Illinois supports state B11 tax incentive through
2018," Biodiesel Magazine (Dec. 14, 2011), at http://www.biodieselmagazine.com/blog/article/2011/12/illinois-
supports-state-b 11 -tax-incentive-through-2018.
317 80 Fed. Reg. at 33,128 (noting further that "B20 could be used in a number of centrally-fueled fleets composed
of newer engines without violating manufacturer warranties").
318 Stratas Report at 11-12 (attached as Exhibit 2).
Iowa Renewable Fuels Association
The fact is, according to the National Biodiesel Board, more than 75 percent of diesel engine and
vehicle manufacturers approve the use of up to B20, and these vehicles consume the vast
majority of diesel sold in the U.S.35 In addition, diesel engine and vehicle manufacturers only
make fuel "recommendations;" they do not "warranty" any type of fuel, biodiesel or otherwise
(warranties only cover materials and workmanship). Therefore, fuel-related damage would not
be covered by a warranty, regardless of the fuel involved. And based on millions of miles of use
in the real world, there is no evidence to suggest biodiesel blends are more likely to cause engine
problems. [EPA-HQ-OAR-2015-0111-1957-A2 p. 9]
Most importantly, Iowa drivers simply haven't had any issues using increasingly higher blends
of biodiesel—even in the cold winter months. As stated above, the average biodiesel blend sold
in Iowa in 2014 contained 9.4 percent biodiesel, an 88 percent increase above B5. If higher
biodiesel blends can be successfully utilized in Iowa, as well as other cold weather states such as
Minnesota and Illinois, then there is no reason that this model cannot be replicated nationwide
with the right policy framework in place. [EPA-HQ-OAR-2015-0111-1957-A2 p. 9] [EPA-HQ-
OAR-2015-0111-1044 p.75]
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Iowa has clearly been a case-study on the success of higher biodiesel blends, demonstrated by
the remarkable growth in the availability and use of higher biodiesel blends in Iowa since the
implementation of the expanded RFS. In addition, the U.S. biodiesel industry has a perfect
record of exceeding EPA's annual biomass-based diesel targets. These are two compelling
reasons that EPA can and should increase its proposed biomass-based diesel volumes for 2016
and 2017 to at least 2 billion and 2.3 billion gallons respectively. [EPA-HQ-OAR-2015-0111-
1957-A2p. 10] [EPA-HQ-OAR-2015-0111-1044 p.75]
35. National Biodiesel Board. "Biodiesel and the U.S. diesel vehicle market: 2015." Jan 2015
http://biodiesel.org/docs/default-source/ffs-engine manufacturers/2013-diesel-vehicle-list.pdf?sfvrsn=6
MARC-IV Consulting
Over the last 20 years, the biodiesel industry has worked to put into place the practices and
options for successful use of higher biodiesel blends in cold weather, such as blending with
Number 1 diesel fuel, use of cold-flow additives, or use of the relatively new Number 1 B grade
of B100, which we just recently put in the D6751 standard. As an example of this success, B5
has been mandated over the entire year in Minnesota, one of our coldest States, with great
success. In addition, data from the Illinois Bureau of Weights and Measures from 2011 to 2013
indicated 55 percent of the diesel fuel sold in Illinois, logging an estimated 15 billion miles, ran
blends over BIO with no increase in consumer complaints. One railroad company recently
tracked cloud point results, which showed no significant differences in reported cloud points for
batches containing biodiesel versus those containing no biodiesel in the fuel they purchased. This
data indicates there's no technical basis to say cold-flow impacts of biodiesel blends should in
any way be a limiting factor for higher biodiesel volumes being contemplated in the RFS. Many
may not know that biodiesel is also being used in home heating oil applications as bioheat in
increasing amounts in the 8 billion gallon per year heating oil market. The National Oil Heat
Research Alliance sees ultra low sulfur, ultra low carbon biodiesel in increasing concentrations
as the future of their industry to help them transition to a 21st century fuel with the eventual goal
of reaching full B100 penetration by 2050, 2050. To facilitate these higher volumes, 5 percent
biodiesel was incorporated in the ASTM D396 fuel oil standard in 208. A new B6 to B20 grade
was recently approved just this year in ASTM D396, and ASTM will start balloting up to B100
in the D396 fuel oil standard beginning in 2016. But the market is not waiting for the ASTM
standards to use higher blends of biodiesel. Worley & Obetz, a leading fuel oil dealer in the
northeast, has been selling B20 blends without incident to their customers since for over 14
years, and the National Oil Heat Research Alliance Survey recently indicated over 2,500
customers are already using B21 to B100 blends in their existing equipment. This is proof
positive that just because equipment companies haven't formally tested or approved higher
blends doesn't mean higher blends can't be used or that higher blends are incompatible with new
equipment.
In closing, the biodiesel industry is doing our part to address technical issues or barriers to the
use of higher biodiesel blends and will continue to do so in the future, and that should give EPA
increasing confidence of the biodiesel volumes and increasing biodiesel volumes as part of the
RFS2.
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National Biodiesel Board
Sufficiency of Infrastructure to Deliver and Use Renewable Fuels. EPA correctly states that the
"blending and distribution infrastructure has demonstrated the ability to respond" to the
incentives provided by Congress. EPA-HQ-OAR-2015-0111-0008 at 7. Although EPA continues
to improperly reference warranties for the "5% level," [EPA-HQ-OAR-2015-0111-1953-A2
p.54]
Thus, these warranties and so-called limits are red herrings and, in fact, irrelevant to EPA's
analysis. [EPA-HQ-OAR-2015-0111-1953-A2 p.54]
As further discussed below, manufacturers are also increasingly supporting the use of B20 or
higher blends of biodiesel in their cars, trucks, and other equipment. Currently, nearly 80 percent
of U.S. manufacturers support B20 or higher blends in at least some of their equipment, and over
90 percent of medium- and heavy-duty truck models support B20. NBB, Biodiesel Industry
Overview & Technical Update, supra, Slide 42. The range of different vehicles in which
manufacturers support B20 use is continually expanding. For example, Chrysler recently
supported B20 in its new 2015 Ram 1500 light-duty diesel pickup. Id. at Slide 46. And the 2015
Chevrolet Cruze recently became the first light-duty passenger car approved for B20 use
nationwide. Id. at Slide 48. [EPA-HQ-OAR-2015-0111-1953-A2 p.71]
Biodiesel is fully registered under the Clean Air Act and, thus, there are no "limitations" to its
use. [EPA-HQ-OAR-2015-0111-1953-A2 p. 122]
Although not a factor it can consider under the statute, EPA continues to discuss purported limits
on biodiesel consumption. EPA has recognized the work of the NBB in addressing these
purported concerns, but, nonetheless, continues to rely on misperception. [EPA-HQ-OAR-2015-
0111-1953-A2p.l22]
There are two statements in EPA's proposal related to this area that are simply incorrect; and
NBB urgently requests EPA to correct these statements moving forward. A correction is
important because the incorrect statements perpetuate a myth and harmful misunderstanding
about OEM warranties and how they apply to fuels. The first incorrect statement is regarding
engine manufacturers "warrantying" fuel, whether that be B5, B20, or petrodiesel. Engine
manufacturers do not manufacture fuel and they do not "warranty" any fuel or any product that
they do not manufacture including petrodiesel. The second incorrect statement is EPA's assertion
that a "majority" of diesel vehicles on the road "are warranted for no more than 5% biodiesel."
80 Fed. Reg. at 33,116. This statement is doubly incorrect. As stated above an OEM does not
"warrant" any fuel or any product that it does not manufacture. [EPA-HQ-OAR-2015-0111-
1953-A2p.l22] [EPA-HQ-OAR-2015-0111-1044 pp.53-54]
In addition, it should be clarified that engine manufacturers warranty the materials and
workmanship of their engines only; they do not warranty fuel of any kind. The question is
whether an engine manufacturer will (or even can) find its parts and workmanship warranty
inapplicable if biodiesel is used, and most major engine companies have stated formally that the
use of blends up to B20 will not void their parts and workmanship warranties. [EPA-HQ-OAR-
2015-0111-1953-A2p.l23]
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Nearly 80 percent of major OEMs recommend use of B20 and higher blends in their equipment,
including nearly 90 percent of the medium & heavy duty truck OEMs. See National Biodiesel
Board, OEM Support, available at http://biodiesel.org/docs/default-source/ffs-
enginemanufacturers/oem-support-summary.pdf?sfvrsn=16 (Attachment 16). The biodiesel
component must meet ASTM D6751 and the B20 blends must meet ASTM D7467
specifications. [EPA-HQ-OAR-2015-0111-1953-A2 p.123]
EPA then states that "biodiesel concentrations in the winter months are sometimes kept to lower
levels by engine owners due to cold weather operability and storage concerns." 80 Fed. Reg. at
33,116. But B20 can be treated for winter use, in similar ways that No. 2 diesel is treated. 110
Using B20 throughout the winter months just takes a little preparation and good fuel
management practices. Some of the largest biodiesel facilities are in the Northwest and Midwest
where temperatures can drop significantly, and production remains year round. These plants, for
example, have been able to find feedstocks that provide added cold weather benefits, such as
canola in Washington and North Dakota. [EPA-HQ-OAR-2015-0111-1953-A2 p. 127]
110 Both petroleum diesel and biodiesel have nearly identical cloud points and in severely cold weather both must
be treated with additives. Michael Whitney of Musket Corp. testified at the public hearing that biodiesel increases
the overall supply of fuel for their customers, including during extreme weather events such a hurricanes and severe
winter storms. [EPA-HQ-OAR-2015-0111-1044.]
Sprague Operating Resources LLC
The heating oil market, a nearly 8 billion gallon per year market, is particularly important in the
Northeast, where Sprague's business is concentrated. The National Oilheat Research Alliance
(NORA) sees ultra low sulfur, ultra low carbon biodiesel in increasing concentrations as the
future of their industry to help transition this industry to a 21' century fuel. To facilitate these
higher volumes, 5% biodiesel was incorporated into the ASTM D396 fuel oil standard in 2008, a
new B6-B20 grade in D396 was approved earlier this year.
As the federal and state governments increasingly move to regulate heating oil in homes (such as
New York) and in stationary diesel engines (such as recent EPA Section 112 standards), demand
for using biodiesel in heating should continue to grow. New York City is setting an important
example for the entire Northeast by embracing ultra-low sulfur BioHeat® blends as a cost
effective means to reduce carbon emissions while providing a more reliable, environmentally
friendly heating option. [EPA-HQ-OAR-2015-0111-1924-A1 p.1-2]
Response:
A commenter stated that because biodiesel is fully registered under the Clean Air Act that there
are no limitations to its use. We acknowledge biodiesel's registration status, however we also
note that many diesel engine manufacturers continue to approve the use of diesel fuel containing
up to, and not more than, 5% biodiesel in the engines they produce. We also acknowledge the
substantial work done by NBB and other parties to address limitations to the use of biodiesel.
Despite this work, however, not all of the potential limitations associated with the use of higher
level biodiesel blends have been overcome. The degree to which these issues may constrain the
use of biodiesel in 2016 is a factor which must be considered in our projection of the potential
supply of biodiesel and renewable diesel in 2016.
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Commenters stated that there is a significant untapped demand for BED and stated that the
majority of diesel vehicles being produced today support blends of up to B20. While NBB's
claims that 80% of Original Equipment Manufacturers (OEMs) support the use of B20 or higher
blends in at least some of their equipment may be true, this does not mean that the majority of
the current in-use diesel fleet support biodiesel blends of B20 or greater. First, the fact that 80%
of OEMs support B20 or higher blends in some of their equipment does not mean that 80% of all
equipment being sold today is designed and warranted to be compatible with B20. In a number
of cases only a portion of the engines they produce support higher level biodiesel blends.
Second, not all OEM's have equal market share, therefore even if 80% of them supported the use
of B20 blends in all of their new equipment, it is not the case that 80% of the diesel engines
produced today support higher level biodiesel blends. For example, Detroit Diesel currently
produces approximately 30% of the class 8 truck diesel engines sold in the United States and
does not currently support the use of biodiesel blends higher than B5 in any of the engines they
produce. No stakeholder provided data on the fraction of actual current engine sales that are
designed and warranted to be compatible with B20, but it is clearly less than the 80% value
referenced by the commenters. Finally, there are many older diesel engines still in the in use
fleet that do not support biodiesel blends greater than B5. According to EPA estimates, the
average age of an in-use heavy duty diesel vehicle in 2015 was just over 11 years. In that year
approximately one third of the heavy duty diesel fleet was over 15 years old, and nearly 7
percent of the fleet was over 25 years old. Given the long life of many engines, the fraction of
the engines on the road today that are designed and warranted to use biodiesel blends greater
than B5 is much lower than the fraction of new engines compatible with these blends. Even if all
engines were warranted tomorrow to run on B20, it would still be many years before the fleet
turns over and such engines dominated the in-use fleet. Again, no stakeholder provided data on
the fraction of the actual in-use fleet of diesel vehicles that are designed and warranted to be
compatible with B20, but it is clearly far less than the 80% referenced by the commenter. This
Warranty coverage may constrain the market's ability to expand beyond B5 blends, as fuel
retailers that wish to offer blends that exceed 5% biodiesel must either offer two different diesel
blends, or offer only fuel that is not supported by the manufacturers of the engines of a
significant number of their customers. See Section II.E.S.vi of the final rule for a further
discussion of the consumption capacity for biodiesel and renewable diesel in the United States.
Some commenters stated that engine compatibility should not constrain biodiesel and renewable
diesel usage in 2016, as essentially all diesel engines can operate on B5. If all diesel in the
United States contained 5% biodiesel, then approximately 2.7 billion gallons of biodiesel could
be consumed. They further stated that cold weather concerns were not a limiting factor since
Minnesota and Oregon require the use of B5 blends even in winter months, and other states such
as Iowa and Illinois regularly use biodiesel blends that exceed B5. Finally, they claimed that
there was substantial opportunity for B20 blends to further expand biodiesel use. While B5
could theoretically be used nationwide, we note that this would require a significant expansion of
the fuel distribution and delivery infrastructure, as B5 blends are not currently available in all
parts of the US. This is not likely to occur in 2016 (see Section II.E.S.iv and II.E.S.v of the final
rule for a further discussion of biodiesel distribution and retail infrastructure constraints). While
some states do require B5 blends to be used year-round, this does not mean that there are no
concerns using biodiesel blends in cold weather environments. The measures highlighted that
some parties take to allow blending of B5 or even higher blends in winter are not without cost or
limit (e.g., canola supplies, cold flow additives). EPA also received comments from a party that
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does not blend biodiesel in winter months because of these concerns. The commenter noted the
poor cold weather properties of biodiesel in comparison to conventional diesel, stating that they
do not purchase biodiesel from November through the middle of March. Expansion of biodiesel
blends up to B20 is possible, but face certain challenges, as discussed above. This is one of the
potential constraints considered in our assessment of the maximum achievable supply of
biodiesel and renewable diesel in the U.S. in 2016.
We received comments specifically discussing several steps that can be taken to address the
challenges associated with using biodiesel blends in cold weather and examples of situations
where biodiesel blends are used successfully during the winter months, such as in locomotive
and bio-heat applications, and in several states. We acknowledge that there are options available
to overcome the challenges to using biodiesel blends in cold weather, and we do not believe that
the cold temperature properties of biodiesel are an absolute barrier to its use in cold weather
environments. As one commenter noted, biodiesel produced from canola has superior cold
weather performance to biodiesel produced from other feedstocks. We acknowledge that
biodiesel produced from certain feedstocks may perform better in cold weather environments,
and that biodiesel produced from these feedstocks may be preferentially used in regions that
experience cold temperatures. We do believe, however, that because in many cases special care
must be taken to enable the use of biodiesel blends in cold weather environments, such as
blending with Number 1 diesel, using biodiesel produced from specific feedstocks, or the use of
heated or indoor storage tanks for bio-heat, that the cold weather properties of biodiesel are, and
in the near term future will continue to be, a potential constraint on its use in the United States.
Some commenters also stated that vehicle manufacturers only make fuel recommendations, they
do not warranty any type of fuel. We never intended to suggest that vehicle and engine
manufacturers warrant anything other than the products they sell. The point is that many
manufacturer vehicle and engine warranties do not cover damage that results from using fuels
that are not recommended or approved by the vehicle manufacturer, including fuels containing
greater than 5% biodiesel in many older and some newer vehicles. Because of this, owners of
vehicles with such warranty coverage will likely be hesitant to use fuels containing higher
biodiesel levels.
3.2.5 Federal Tax Credit for Biodiesel
Comment:
Independent Fuel Terminal Operators Association (IFTOA)
VI. Biomass-Based Diesel Mandate
Congress left it to EPA to determine the RFS mandate for biomass-based diesel after
2012. Accordingly, EPA has proposed, using actual production and import data, mandates that
continually increase through 2017 but are not the "maximum achievable volumes." EPA has
stated that it wants to encourage the development of other advanced renewable fuels. [EPA-HQ-
OAR-2015-0111-1947-A1 p. 5]
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However, it should be noted that the production of biomass-based diesel is not only a function of
production and import capacity, but is spurred, to a significant degree, by the biodiesel mixture
tax credit. As EPA is aware, that credit expired as of December 2014, and its fate is uncertain. It
may be extended in its current form through 2016; it may be converted, beginning January 1,
2016, into a producers tax credit that only is applicable to domestic production, thereby
discouraging imported biodiesel from entering the U.S. market; or it may not be
renewed. Therefore, while it is reasonable to increase the biomass-based diesel mandate above
2013 levels, EPA should be cautious in setting the mandates and conduct a more detailed
analysis of predicted production in light of anticipated action in Congress regarding the tax
credit. EPA should recognize that a high mandate, in a market with lower than expected
production and imports, would raise the price of biodiesel RINs, and, in turn, the cost of fuel for
commercial and industrial entities. It would have a broad effect on the nation's economy. At the
same time, the Agency should recognize that many marketers/blenders have made substantial
investments in blending operations. [EPA-HQ-OAR-2015-0111-1947-A1 p. 5-6]
Recommendation: EPA should make every effort to achieve a proper balance between the cost
of RINs for biomass-based diesel and the desire to preserve the investments made in the
biodiesel industry, including investments made in blending and distribution systems. [EPA-HQ-
OAR-2015-0111-1947-A1 p. 6]
Specifically, the Association recommends the following: [EPA-HQ-OAR-2015-0111-1947-A1 p.
8]
7. EPA should reassess anticipated production and imports of biomass-based diesel because of
recent action in Congress on the biodiesel mixture tax credit (e.g. the Senate Finance Committee
action to make the biodiesel credit, beginning January 1, 2016, only applicable to domestic
biodiesel). It should carefully balance the proposed mandates based on the revised production
and imports analysis and the need to support investments already made in biodiesel production,
blending and distribution facilities; and [EPA-HQ-OAR-2015-0111-1947-A1 p. 9]
National Association of Truck Stop Operators (NATSO)
Additionally, Congress has passed a biodiesel blenders tax credit that has further enabled
biodiesel blenders - including NATSO members - to earn a profit by selling biodiesel. Although
this credit has a turbulent history of expiring and then being reinstated (sometimes retroactively),
the blenders credit undoubtedly makes buying, blending, and selling biodiesel more cost
advantageous. This increases consumer demand and thus fosters a market environment that
enables EPA to require heightened RVOs and come closer to satisfying the RFS's objectives.
[EPA-HQ-OAR-2015-0111-2478-Alp.5]
At the same time, federal policies can also impose an upward pressure on biodiesel prices. The
biodiesel blenders credit for example expired at the end of 2014. Although it may be extended
retroactively later this year, the uncertainty surrounding the credit diminishes its positive impact
on prices.
Similarly, the Senate Finance Committee recently proposed eliminating the biodiesel blenders
tax credit and replacing it with a biodiesel producers credit. If this change were to become law,
the credit would only apply to biodiesel produced in the United States, negating the downward
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pressure that foreign supply imposes on domestic prices, while giving domestic producers
greater leverage to increase prices (because they would have an artificial advantage over
imported product).]!] Additionally, this change would incentivize domestic producers to export
product, thereby diminishing U.S. supply and increasing the price of biodiesel in the United
States. This would lower consumer demand for biodiesel, and restrict EPA's ability to set
ambitious RVOs. [EPA-HQ-OAR-2015-0111-2478-A1 p.5-6]
[11 Areas of the U.S. that have been primarily served by product from offshore sources will be especially hard-hit by
this development, and would likely see a marked increase in diesel consumption (and an associated diminution of
any air-quality benefits associated with biodiesel consumption).
Response:
A commenter stated that while it is reasonable to increase the BED standard beyond 2013 levels
(1.28 billion gallons), EPA should be cautious in increasing the standard, especially in light of
uncertainty related to the biodiesel tax credit. They requested that EPA reassess the anticipated
production and imports of BED in light of recent actions by Congress related to the tax credit,
and set the BED standard at the level needed to support investments already made in biodiesel
production, blending and distribution facilities, but not so high as to have a negative impact on
the economy. Another commenter also discussed the potential impact of the expiration of the
biodiesel blenders' tax credit, or its replacement with a producers' credit, noting that either
outcome may result in an increase in the price of biodiesel.
EPA has reviewed the available information, including comments submitted on our proposed
rule, and we believe the BED standards for 2016 and 2017 strike the balance requested by the
commenter. We note that the biodiesel tax credit is currently not in place, and its renewal
remains uncertain. For the purposes of this rule we therefore have not assumed that there will be
a BED tax credit in 2015 or 2016, either a blenders credit or a producers credit. We believe,
however, that BED RINs can provide much of the same financial incentive for increasing
production, import, distribution, and use of BED in the absence of a tax credit, and therefore
whether or not a BED tax credit is in place for these years would not appreciably impact our
assessment of the available supply of biodiesel and renewable diesel. If the blenders tax credit
were replaced with a producers' tax credit we believe that this would likely make foreign
produced BED less competitive relative to BED produced in the United States. We believe that
changes in the market, combined with the impact of the BED RIN price, would likely limit much
of the potential price impact on biodiesel and biodiesel blends, and would thus not have an
appreciable impact on the available supply of biodiesel and renewable diesel in 2016. For
example, we could see increasing imports of BED feedstocks for use in domestic BED
production facilities, which currently have significant excess capacity (see Section II.E.S.ii of the
final rule for a discussion of the domestic BED production capacity).
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3.3 Determination of Applicable Volumes
Comment:
Advanced Biofuels Association (ABFA)
The biomass-based diesel pool has also helped to achieve overall compliance under the current
nested RVO system. The last several years of production from the biomass-based diesel pool and
its contribution to meeting the RVO requirements of the advanced pool and overall renewable
fuel requirements is substantial. When one considers that the existing annual diesel fuel demand
in the U.S. is approximately 50 billion gallons, the contribution in 2014 of 1.63 billion gallons in
the D-4 pool is well below any blend wall issues impacting the blenders of biomass-based diesel
fuels. It is well below 5% of the total pool, yet creates well over 2.5 billion RINs usable towards
meeting the targets in the Advanced Pool. In 2013, the year ended with 3.23 billion RINs
generated to be backed against the 2.75 billion RIN target and the overall renewable fuel RIN
requirements. [EPA-HQ-OAR-2015-0111-2498-A1 p.5]
Ag Processing, Inc.
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 220-222.]
Thus, we appreciate and pleased with the proposed 2014, '15, '16, and '17 biomass-derived diesel
renewable volume obligation proposals detailed in your current RFS rulemaking. The
rulemaking appropriately recognizes the vital contribution biodiesel plays in our nation's energy
and agricultural economies, and the proposed growth of the obligations over a multiyear period
for the biomass-derived diesel RVO beyond 1.28 billion gallons is appreciative. However, we
believe the biodiesel industry can grow beyond 1.9 billion gallons and that it was Congress'
specific intent to provide the EPA with options to stimulate the domestic biodiesel industry.
Various mechanisms inside the statute recognize that the RFS RVOs should accurately reflect
our current industry's realities and production capability levels in future years.
In addition, in the terms of volume, if the RVO numbers do not reflect the actual import levels
from foreign biodiesel producers or massively underestimate them, then the RVO numbers are
not the right numbers and, in fact, could lead to many bad outcomes, such as loss of jobs and a
decrease in commodity prices.
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
EPA's biomass-based diesel proposals for 2014, 2015 and 2016 ignore specific statutory
language that prohibits the Agency from increasing the biomass-based diesel standard without
first applying specifically enumerated statutory criteria and providing obligated parties 14
months' lead-time before compliance is required. We also note that EPA would be acting outside
of its statutory authority if it altered the biomass-based diesel standard for 2017, unless it issued
such standard prior to November 1, 2015. [EPA-HQ-OAR-2015-0111-1948-A1 p.3] [EPA-HQ-
OAR-2015-0111-1044 p.22]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, p. 23.]
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Far too much lead time is required by the Clean Air Act to set a different value for biomass-
based diesel. Therefore, the agency cannot promulgate a volume for biomass-based diesel for
2014 or 2015 or 2016 that's higher than 1.28 billion gallons, the regulatory value for 2013. The
law is clear on this point.
Baker Commodities
Congress and the EPA have been very clear that the RFS Program is intended to push for greater
and greater volumes of advanced biofuels with an aim towards reducing the greenhouse gas
profile of the fuel supply. However, the RFS Proposal covering 2014-2017 falls very short of the
market potential for biomass-based diesel. In 2013, the industry produced 1.8 billion gallons,
exceeding the biomass-based diesel pool and contributing significantly to the advanced pool.
Had the EPA proposed a reasonable increase in the RVO for 2014/2015 based on 2013
production instead of a proposal of 1.28 billion gallons, the industry would have easily produced
2.1 billion gallons in 2014. The 2014-2017 biomass-based diesel mandates are only 1.63, 1.7, 1.8
and 1.9 billion gallons, respectively, If these numbers are finalized, the market will constrict,
resulting in less innovation and less use of ultra-low carbon feedstocks. [EPA-HQ-OAR-2015-
0111-1907-A1 p.l]
i EPA also asserts that it is 'important to provide support to existing successful biofuels and to provide incentives for
those fuels, especially advanced biofuels that produce the greatest reductions in greenhouse gases.' BO Fed. Reg. at
33,102.
Canola Council of Canada
The Canola Industry Provides Significant Contributions to the RFS2 Program and Can Continue
to Do So.
In proposing the standards for 2014-2016 under the program and the minimum applicable
volume for biomass-based diesel for 2014-2017, EPA stated that "the approach we take to setting
the standards must be consistent with Congress' clear goal of compelling the industry to make
dramatic changes to increase renewable fuel use." 80 Fed. Reg. at 33,118. In 2013, 7% of the
feedstock used for U.S. biodiesel production came from canola oil. 1 Canola oil used in biodiesel
production increased in 2014 from 2013, and the first four months of 2015 show a continued
trend upward.2 The canola industry has helped the biomass-based diesel program make the
advancements sought by Congress. [EPA-HQ-OAR-2015-0111-2484-A1 p.2]
1 National Biodiesel Board, Biodiesel Industry Overview & Technical Update, at Slide 6 (Mar. 2015), available at
http://biodiesel.org/docs/default-source/ffs-basics/biodiesel-industry-and-technical-overview.pdf? sfvrsn=12.
2 U.S. Energy Information Administration, Monthly Biodiesel Production Report, Table 3: U.S. Inputs to biodiesel
production (June 2015), available at http://www.eia.go^iofuels/biodiesel/production/biodiesel.pdf.
Chevron
Regarding biomass based diesel, we do not agree with EPA's proposal to retroactively increase
the volume standards for any year prior to 2017. This is based on the statutory timeline for EPA
to finalize an increase in biomass based diesel standards at least 14 months prior to the start of a
compliance year. EPA has missed the deadline for 2014, 2015, and 2016 and therefore should
not propose to increase the biomass based diesel standards for these years. The standard should
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be set at 1.28 billion gallons for each of these three years. [EPA-HQ-OAR-2015-0111-1911-A1
p. 2]
Crimson Renewable Energy LP
It is especially troubling and illogical that the EPA has said repeatedly that it sets the standards
based on "maximum achievable" volumes elsewhere in the RFS program, and then set the
biomass-based diesel volume at a minimum volume, arguing somehow that doing so would
actually benefit the overall program. The opposite is true. Since the industry already has capacity
to more than meet the proposed increases, there is simply little incentive to continue to invest in
an uncertain, and clearly slow moving, future. [EPA-HQ-OAR-2015-0111-1823-Al p.2]
Darling Ingredients Inc.
The EPA argues persuasively that BED cannot create adequate volume to supplant the shortfall
in Cellulosic for 2016 and 2017 which are VOLUMES SPECIFIED BY THE STATUTE
(emphasis added). The EPA also questions whether adequate supplies of Brazilian sugar cane
ethanol will be available to meet the VOLUMES SPECIFIED BY THE STATUTE. While both
of these may be valid arguments for the EPA to exercise its waiver authority under the statute
NEITHER is a reason to limit the achievable volume of BED. Darling believes the EPA has
incorrectly used the argument it has made for exercising its waiver authority in determining the
volumes of BED and Advanced Biofuels for 2016 and 2017. [EPA-HQ-OAR-2015-0111-1929-
Al p.3]
The EPA forecasts a variety of potential BED volumes which could be available for the market
in 2016. The annual range is from a low of 1.898 billion gallons to a high of 2.131 billion
gallons7. The low end of the EPA's own analysis is almost 100 million gallons over the proposed
volume of 1.8 billion gallons for 2016. The high end of the range is over 400 million gallons
above the proposed 2016 volumes. The apparent logic for this inconsistency is the excess BED is
to help fulfill the Advanced Biofuel obligations. Darling agrees that BED is a key component of
fulfilling the Advanced Biofuel targets. Indeed it is the only Advanced Biofuel which has
provided significant domestic supplies. [EPA-HQ-OAR-2015-0111-1929-A1 p.3]
7Id.,Pg. 33132 —33133.
Linn & Associates
And we also believe we should increase corn ethanol and biodiesel targets 100 million gallons
each year to a maximum 15 for corn ethanol and 2.0 for biodiesel. This allows people to make
long-term projections.
Marathon Petroleum Company
The law in clear and plain wording states that the EPA must utilize a six factor analysis to set the
biomass-based diesel requirements at least 14 months in advance of the standard being enforced
[CAA section 21 l(o)(2)(B)(ii)]. The standard for 2014 should have been set by October 31,
2012; the 2015 standard by October 31, 2013; and the 2016 standard by October 31, 2014.
Because the EPA did not meet these deadlines, the biomass-based diesel standard for 2014,
2015, and 2016 cannot be set any higher than 1.28 BGY which is the last standard set by the
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agency using the required procedure. Obligated parties may still blend more because the
regulatory volumes are the minimum required. The RINs generated from blending more than the
RVO can be used for the Advanced Biofuel or Total Renewable requirements for the year or
carried over for compliance in the following year. Regardless of the potential ability to meet a
higher biomass-based diesel standard, the EPA is prohibited from increasing the volumes for
2014-2016 because the EPA failed to complete the six factor analysis and establish the volumes
within its statutory deadline. [EPA-HQ-OAR-2015-0111-1932-A1 p. 6]
Mass Comment Campaign sponsored by soybean farmers (email) - (8)
I want to express my view that EPA should support more aggressive, but achievable, Renewable
Fuel Standard (RFS) volume targets for biodiesel. Given the many benefits of biodiesel and the
capability for increased production, EPA should, at a minimum, support biomass-based diesel
volumes of at least 2 billion gallons for 2016 and 2.3 billion gallons for 2017. [EPA-HQ-OAR-
2015-0111-1480-Alp.l]
As an industry, we have always advocated for RFS volumes that are modest and achievable and
the biodiesel has met or exceeded the targets each and every year that the program has been in
place. This has been accomplished without any significant disruption or adverse impacts to
consumers, while also reducing greenhouse gas emissions and providing jobs. [EPA-HQ-OAR-
2015-0111-1480-Alp.l-2]
When determining the appropriate volume standards for biomass-based diesel, the EPA can and
should mitigate the potential for increased imports of sugar cane ethanol from Brazil and account
for the likelihood of increased imports of biodiesel from Argentina. EPA should increase the
biomass-based diesel volumes relative to the total Advanced Biofuels volumes in order to
promote the use of domestically produced biodiesel over imported sugar-cane ethanol. The intent
of Congress when they established and expanded the RFS program was clearly to increase and
promote domestic energy production and U.S. energy independence. This is clearly reflected by
the title of the 2007 law - the Energy Independence and Security Act (EISA) - which expanded
the RFS and established the biomass-based diesel program. [EPA-HQ-OAR-2015-0111-1480-A1
p.3]
Wherever possible, EPA should seek to promote domestic biofuel sources to fulfill the RFS
volume requirements. However, when determining the appropriate volume standards for
biomass-based diesel, the EPA must also account for the likelihood of increased imports of
biodiesel from Argentina. Prior to the EU imposing anti-dumping tariffs, Argentina was
exporting over 400 million gallons to that market and they are seeking new markets for those
volumes. The EPA has approved a streamlined process for Argentine biodiesel to comply with
the RFS and should expect Argentine imports into the U.S. to increase significantly in future
years. Given the many benefits that biodiesel provides, I ask that you reconsider the biomass-
based diesel standards in the Proposed Rule and finalize stronger standards, particularly for 2016
and 2017. The biodiesel industry has previously requested volumes of 2.4 billion gallons in 2016
and 2.7 billion gallons in 2017. While those volumes are readily achievable and sustainable,
particularly with rising imports, at a minimum EPA should set the standards at not less than 2
billion gallons for 2016 and 2.3 billion gallons for 2017. [EPA-HQ-OAR-2015-0111-1480-A1
p.3]
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Minnesota Soybean Processors (MnSP)
We believe EPA has formulated future biomass based diesel volumes based on EPA's incorrect
reading of the 2014 biodiesel marketplace. Essentially the "leak" in the Fall of 2013 of EPA's
potential rulemaking compounded by the lengthy delay until EPA finally withdrew their 2013
proposed RVO rule confused and stymied the biodiesel marketplace resulting in significant
reduction of biodiesel sales and production during 2014. For EPA to base future volumes on
analysis of the 2014 market is incorrect; EPA should have recognized the cumulative impact of
both the "leaked" proposed rule and their delayed 2013 rulemaking for 2014 and later years
RVO and instead looked to the 2013 biodiesel market which was much more robust and a truer
picture of the market. Using 2013 biodiesel production, EPA'a analysis would have shown that
the biodiesel industry could easily, and quickly, produce in excess of 2 billion gallons annually
for years 2014 and highly significant annual increases for 2015, 2016 and beyond. We believe
EPA needs to acknowledge this faulty 2014 market analysis and recognize the 2013 market as
the baseline market in which to formulate forthcoming 2015, 2016 and 2017 biodiesel volume
obligations. [EPA-HQ-OAR-2015-0111-2505-A1 p.2]
National Association of Truck Stop Operators (NATSO)
EPA faces a delicate balance with respect to biodiesel: On the one hand, increasing mandates
under the RFS can enable NATSO members to sell the product to consumers and lower prices
and thereby increase consumer demand for biodiesel; at the same time, if RVOs are set too high,
it could lead to increased prices for diesel fuel, which would have an adverse effect on NATSO
members and the U.S. economy as a whole. [EPA-HQ-OAR-2015-0111-2478-A1 p.2]
While NATSO members sell gasoline and gasoline blended with ethanol to their customers, their
primary interest in the RFS pertains to biodiesel.
EPA faces a delicate balancing act with respect to biodiesel: On the one hand steady, increasing
biomass-based diesel and advanced biofuel mandates under the RFS create the demand for RINs;
this can serve to lower the costs of acquiring and blending biodiesel, enabling NATSO members
to sell the product to consumers at lower prices and thereby increasing consumer demand for
biodiesel. At the same time, if these RVOs are set too high, it will increase obligated parties'
operating costs so as to impose upward pressure on the cost of diesel fuel - obligated parties will
want to recover their costs of acquiring and retiring the necessary RINs, and/or will be
incentivized to export diesel fuel (and thus avoid incremental RVO increases) and the diminished
domestic supply will lead to higher diesel prices. [EPA-HQ-OAR-2015-0111-2478-A1 p.4]
National Biodiesel Board
Congress did not require this to be an annual review process. 42 U.S.C. § 7545(o)(2)(B)(ii). It
referenced the operation of the program "during calendar years specified in the tables,"
indicating that EPA has authority to set the volumes over a multi-year period after the years
listed. Id. [EPA-HQ-OAR-2015-0111-1953-A2p.23]
While EPA may contend that the phrase "based on" is ambiguous and, thus, does not preclude
EPA from considering other factors, the statute must be interpreted with its purposes in mind. In
API v. EPA, the D.C. Circuit found that the phrase "based on" did not require "slavish
adherence" to the EIA projections when setting the cellulosic biofuel volume under Section
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21 l(o)(7)(D). 706 F.3d at 478. But, here, the statutory provision requires EPA to consider the
implementation of the program in prior years and to conduct an analysis of six factors, which are
specific and detailed. "The level of specificity" provided by Congress "effectively closes any gap
the Agency seeks to find and fill with additional criteria." Ethyl Corp. v. EPA, 51 F.3d 1053,
1060 (D.C. Cir. 1995). "Congress was explicit in its direction. ... EPA has failed to give effect to
the unambiguously expressed intent of Congress." Id. EPA cannot use the phrase "based on" to
broaden its discretion under this provision. Moreover, EPA's analysis must be guided by its
obligation to ensure that transportation fuel increasingly contains renewable fuel. Further, the
statute already provides for flexibility in meeting the volume requirements through a credit
program and the deficit carryover. This is all evidence that the volume setting process should not
be based on easing compliance for obligated parties. [EPA-HQ-OAR-2015-0111-1953-A2 p.26]
NBB does not dispute that other advanced biofuels should participate in the program, but EPA
has chosen to keep the volumes low rather than strive to achieve the volumes sought by
Congress. EPA does not explain why it cannot provide greater increases in biomass-based diesel
and further increase the advanced biofuel volume to address its purported concerns about
ensuring "other" advanced biofuels. Keeping a lower overall advanced biofuel volume when
there is more than enough capacity of biodiesel does not meet the goals of Congress or provide
the certainty for investors that EPA is purporting trying to create for other biofuels. [EPA-HQ-
OAR-2015-0111-1953-A2 p.27]
Biomass-based diesel has been the only successful advanced biofuel produced in the United
States on a commercial basis, yet rather than continue to promote its production, as required,
EPA has artificially kept the biomass-based diesel numbers low. It provides no support or
explanation why only 100 million gallon annual increases (and only 8 million gallon monthly
increases) are appropriate given the ability of the industry to grow at much higher levels and
EPA's prior assessment that an almost 300 million gallon increase is appropriate based on
statutory factors. EPA fails to answer how this minimal increase supports growth when the
volumes are substantially less than production capacity, and requires less than 10 million gallons
more a month to achieve, a less than 5 percent increase. [EPA-HQ-OAR-2015-0111-1953-A2
p.27-28]
Congress intended to promote increasing volumes of advanced biofuels including biomass-based
diesel. "[I]ncreasing and extending the existing RFS—with specific incentives for the production
of biofuels from new sources of renewable biomass—is required, to provide market certainty to
both the existing ethanol industry and the next generation of advanced biofuel producers." S.
Rep. No. 110-65 at 3. The expanded RFS "represents a major advance in our commitment to
renewable, home grown fuels that reduce emissions, mitigate global warming, and improve
farmer income. This is a strong market signal to ethanol, biodiesel, and other renewable energy
investors that the Federal Government supports fuels that are more environmentally friendly and
help to reduce our dependence on oil." 153 Cong. Rec. S15421, S15429 (Dec. 13, 2007)
(statement of Sen. Durbin). Congress acknowledged that biodiesel, as a domestic advanced
biofuel with numerous available and potential feedstock sources, more than meets these goals.
See 153 Cong. Rec. H2233-02, H2233 (Mar. 6, 2007) (statement of Rep. King) ("And so our
approach here needs to be the expansion and the continued promotion of these energy supplies
that we have that we can develop here in the United States. The most obvious of those are the
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biodiesel components, which have been expanding rapidly here in the United States, ...."). [EPA-
HQ-OAR-2015-0111-1953-A2 p.28-29]
Indeed, Congress intended to expand the RFS to include increased participation by the diesel
transportation fuel pool where biomass-based diesel is the advanced biofuel substitute.30 [EPA-
HQ-OAR-2015-0111-1953-A2 p.29]
The inclusion of credits for "additional renewable fuel" further evidences congressional intent to
increase use of biofuels beyond motor vehicles and into those markets dominated by diesel fuel
products. [EPA-HQ-OAR-2015-0111-1953-A2 p.30]
Legislative history also shows that Congress intended EPA's authority to result in continued
volume increases in biomass-based diesel through 2022 balancing all of the considerations
outlined in the statute. [EPA-HQ-OAR-2015-0111-1953-A2 p.30]
EPA previously pointed to the "trend" in the biomass-based diesel statutory volumes for 2009-
2012 as supporting an increase of 280 million gallons (or 28 percent) from the required 2012
volume for 2013. 77 Fed. Reg. at 59,461.35 If Congress intended to simply let biomass-based
diesel remain underutilized throughout the program and let the overall advanced biofuel volume
drive the market for diesel fuel substitutes, it would not have needed to give EPA authority to set
the biomass-based diesel volumes starting in 2013. Similarly, here, the modest statutory volumes
for biomass-based diesel are well under current capacity, and biodiesel production has exceeded
the mandated volumes each year.36 [EPA-HQ-OAR-2015-0111-1953-A2 p.31]
Despite the proven production and available capacity of biomass-based diesel, EPA is expecting
to increase cellulosic biofuel production by 221 percent and almost 100 percent in 2015 and
2016, respectively, but only purports to provide a 4-6 percent increase each year for biomass-
based diesel (see table below).38 [EPA-HQ-OAR-2015-0111-1953-A2 p.32] [The table can be
found on page 32 of docket number EPA-HQ-OAR-2015-0111-1953-A2]
While EPA's new proposal refers to allowing for "competition" for other advanced biofuels,
EPA is falling into the same errors it did in the November 2013 proposal by trying to set the
volumes to provide obligated parties more flexibility in meeting compliance (i.e., purported costs
outweighing the benefits). Even if not prohibited by the statute, EPA's focus on only one factor
to decline to increase the required volumes for biomass-based diesel based on these
considerations is arbitrary and capricious and counter to the statute's purposes. See Ctr. for
Biological Diversity v. NHTSA, 538 F.3d 1172, 1197 (D.C. Cir. 2008). [EPA-HQ-OAR-2015-
0111-1953-A2p.37]
The notion of "competition" among advanced biofuels, and compliance costs, are not specifically
included in the listed statutory factors. [EPA-HQ-OAR-2015-0111-1953-A2 p.37]
29 This can be contrasted against the proposed increase in the cellulosic biofuel requirements by 221% and almost
100% in 2015 and 2016. See Section V.B.3.
30 While other advanced biofuels continue to emerge (including cellulosic diesel), sugarcane ethanol is the only
other commercially available advanced biofuel available on a larger scale that EPA has identified to fill the
advanced biofuel requirement. However, sugarcane ethanol, like conventional ethanol, is not a substitute for diesel
fuel. Moreover, it is an imported fuel, rather than domestically produced.
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36 In finalizing the 1.28 billion gallons for 2013, EPA noted: "Others expressed their belief that Congress intended
for the statutory minimum volume of 1.0 billion gallons to be used to set the applicable volume for all years after
2012, with higher volumes being required only if EPA could demonstrate that those higher volumes were already
being produced." 77 Fed. Reg. at 59,460 (emphasis added). This is incorrect. EPA was to demonstrate that the
factors support increasing volumes, which they do.
38 As shown, this does not represent a real increase for biomass-based diesel.
Newport Biodiesel
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 208-209.]
We appreciate that EPA has improved the RVO numbers and that the volumes increase with
time. However, these volumes remain well below what the industry can produce, and they are far
from an aggressive approach to expanding biodiesel production. There is little we can do
regarding 2014 and '15, but we can take a more aggressive stance on 2016 and '17. NBB has
proposed a very reasonable 2.4 billion gallons for 2016 and 2.7 for 2017. I feel these volumes
should be strongly considered. Anything less than 2 billion gallons per year certainly misses the
opportunity to help meet the climate change objectives of this administration.
Phillips 66 Company
The API/AFPM comments construct the argument that EPA is limited to setting the standards for
2014, 2015, and 2016 to no higher than 1.28 billion gallons. In fact, this volume is what EPA
proposed for 2014 and 2015 in the proposed rule published in November, 2013. EPA
acknowledged in that proposal that "the statute requires that we finalize these biomass-based
diesel volume requirements no later than 14 months before the first year for which that volume
requirement will apply." We agree that given the statutory language, EPA cannot increase the
biomass-based diesel standards prior to 2017. [EPA-HQ-OAR-2015-0111-2039-A1 p.2]
Renewable Energy Group, Inc. (REG)
We share many of the concerns articulated by the National Biodiesel Board, we incorporate their
comments by reference where they do not conflict with our own. [EPA-HQ-OAR-2015-0111-
1952-A1 p.2]
In addition, the heating oil industry is using ever increasing volumes of biodiesel in the nearly 8
billion gallon heating oil market. Residential, commercial and industrial boilers (combined)
account for the second leading consumption of diesel fuel behind the on-highway segment,
according to the EIA. The National Oilheat Research Alliance (NORA) sees biodiesel in
increasing concentrations with the eventual goal of reaching full B100 penetration by 2050. To
facilitate these higher volumes, 5% biodiesel was incorporated into the ASTM D396 fuel oil
standard in 2008, a new B6-B20 grade in D396 was approved earlier this year, and ASTM will
start balloting up to B100 in D396 beginning in 2016. These increasing volumes of biodiesel in
heating oil should be accounted for with additional increases in the biomass-based diesel volume
requirements. [EPA-HQ-OAR-2015-0111-1952-A1 p.3]
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Response:
EPA received numerous comments concerning the proposed applicable BED 2014-2017 volume
requirements.
Applicable Volume - Biodiesel Industry:
In general, the biodiesel industry believes that while the proposed 2014 and 2015 applicable
biomass-based diesel volumes were appropriate, they were unanimous in pushing for
significantly higher BED volume requirements for 2016 and 2017 arguing that they should be set
upwards to 2.4 and 2.7 billion gallons, respectively. With regard to these concerns we believe
that we followed the procedural and substantive requirements set forth in the statute to set the
final BED volume requirements, and that the levels we are finalizing are appropriate. Raising
the guaranteed BED volume beyond the volumes in this rule so that it approaches the volume of
overall advanced biofuel could undercut investment needed to grow volumes of other renewable
fuels and result in a less competitive advanced biofuels market. Our decision to finalize the BED
volumes for 2016 - 2017 at 1.90 and 2.0 billion gallons per year respectively, would not be
expected to lead to such an adverse result. We believe that the final BED volume requirements
for 2016-2017 will both contribute to market stability for the renewable fuels program and
continue to promote a growing and competitive advanced biofuels marketplace, one which
encourages the growth and development of diverse biofuels along with additional volumes of
BED beyond the volumes required by the BED standards.
Applicable Volume and Congressional Intent- Biodiesel Industry:
NBB and other biodiesel industry stakeholders argued that Congressional intent is clear that
Congress intended EPA's authority to result in continued volume increases in biomass-based
diesel through 2022 balancing all of the considerations outlined in the statute. We disagree that
Congressional intent is clear in this instance. We do believe that in establishing the BED and
cellulosic standards as nested within the advanced biofuel standard, Congress clearly intended to
support development of BED and cellulosic biofuels, while also providing an incentive for the
growth of other non-specified types of advanced biofuels. That is, the advanced biofuel standard
provides an opportunity for other advanced biofuels (advanced biofuels that do not qualify as
cellulosic biofuel or BED) to be used to satisfy the advanced biofuel standard after the cellulosic
biofuel and BED standards have been met. Indeed, Congress specifically directed growth in
BED only through 2012, leaving development of volume targets for BED to EPA for later years
while also specifying substantial growth in the cellulosic and general advanced categories
through 2022. We believe that Congress clearly intended for EPA to evaluate the appropriate
volume requirement for BED within the advanced biofuel standard as described in CAA section
201(o)((2)(B)(ii). We note that Congress could have set ambitious targets for BED for years
after 2012, as it did for cellulosic biofuel, but did not do so. Section 3.3.1 of the RTC also
addresses this issue.
NBB also stated that Congress did not require an annual review process to occur and that 42
U.S.C. § 7545(o)(2)(B)(ii) referenced the operation of the program, "during calendar years
specified in the tables," indicating that EPA has authority to set the volumes over a multi-year
period after the years listed. As the commenter suggests, for setting applicable volumes for years
beyond those enumerated in the statute, EPA has the flexibility to do so for more than one year at
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a time. At present, this applies only to the applicable BED volume, but after 2022 will apply to
other applicable volumes as well. At the same time, the statute requires that we set the
percentage standards on an annual basis, reflecting the gasoline and diesel fuel volume
projections for the following year. Given that we must set the advanced biofuel, and total
renewable fuel standards on a yearly basis (as well as cellulosic) and the BED standard is nested
within those standards, we believe it is most appropriate at the present time to set the applicable
volume for BED only through 2017 in this rulemaking
Applicable Volume and Imports- Biodiesel Industry:
Some BED industry commenters argued that the 2016-2017 BED volume requirements were too
low because we failed to take into account imports of biodiesel from Argentina and did not seek
to promote domestic biofuel sources over imports of biodiesel or sugarcane ethanol from Brazil.
EPA disagrees with these comments. EPA did in fact take into account potential levels of
imports. Section HE. 3 (iii) of the final rule reviews the data and trends regarding imports of
biodiesel into the U.S. In summary, the amount of biodiesel and renewable diesel that can be
imported into the United States in response to the standards that we set is difficult to predict, as
the incentives to import biodiesel and renewable diesel to the U.S. are a function not only of the
RFS and other U.S. policies and economic drivers, but also those in the other countries around
the world. These policies and economic drivers are not fixed, and change on a continual basis.
Over the years there has been significant variation in both the imports and exports of biodiesel
and renewable diesel as a result of varying policies and relative economic policies.
EPA acknowledges that if we were to increase the BED volume standard we would increase the
guaranteed market for BED, reduce the room under the advanced standard for the use of non-
BBD advanced biofuels, and thereby reduce the likelihood that volumes of sugar cane ethanol
would be imported to satisfy the advanced and total renewable fuels standards. We do not agree,
however, that this is a necessary step to promote the viability and growth of the BED industry, or
an appropriate approach for implementing the RFS program. In reviewing the history of the
program, (see section III.B-D of the final rule) EPA notes that BED production, import, and
consumption has been strong and increasing each year since 2011. In particular, we note that
while sugarcane ethanol was fairly high in 2012, in 2014 sugarcane ethanol imports declined
slightly relative to 2013 while in 2015 we have been experiencing some upward growth in
imports of biodiesel and renewable diesel. Much of the increase in biodiesel imports in 2015 has
been from grandfathered facilities that are exempt from the 20% lifecycle GHG reduction
requirement. Fuel from these facilities qualifies for D6 RINs that can be used to satisfy the total
renewable fuel standard.
As discussed in section HE. 3 and II.F of the final rule, we believe that the volume of biodiesel
and renewable diesel imported from Argentina in 2016 is likely to be far less than the several
hundred million gallons suggested by some commenters. We continue to believe that despite the
ongoing potential for competition from sugarcane ethanol and biodiesel imports, the BED
industry, supported by the advanced and total renewable fuel standards, has achieved and can
continue to achieve production volumes beyond levels needed to satisfy the BED volume
requirement. Finally, in light of the broad programmatic objective of the RFS program to
increase the content of biofuels in U.S. transportation fuel, we believe that it would not only be
counterproductive to design the standards in such a way as to intentionally discourage or
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disincentivize the import of foreign biofuels but also contrary to the statute. See Section 3.2.3 for
further discussion of imports including comments on impact of Argentinian imports.
Applicable Volume and Maximum Achievable Levels- Biodiesel Industry:
We received a number of comments from the biodiesel industry stating that the BED
requirements should be set at the maximum achievable levels rather than at the lower volumes
proposed. EPA disagrees with this approach. While we believe that the potential available
volume of BED in 2016 and 2017 exceeds the BED volume requirements we are finalizing in
this rule, and have considered multiple scenarios where additional volumes of BED are used to
comply with the advanced and total renewable fuel standards. We do not believe it is in the best
interest of the RFS program to set the BED volume requirement at the maximum available
volume of BED as suggested by these commenters. Doing so would reduce the opportunity for
other advanced biofuels to compete for market share within the context of the advanced biofuel
standard, and would send market signals that would hinder the long term development of these
fuels. Our review of the history of the RFS program strongly suggests that the advanced and
total renewable fuel standards can provide sufficient incentives for the production and use of
increased volumes of BED beyond levels required to satisfy the BED standard. We also believe
that the BED standards we are finalizing today will provide appropriate support to the BED
industry and incentivize its continued growth.
Various biodiesel industry commenters expressed concern that final standards that were lower
than the maximum amount of BED available would undercut certainty for biodiesel producers,
particularly smaller producers, causing them to have to shut down. While our standards cannot
protect companies from shutting down for the many different reasons companies close
(inefficient, high cost, poor market conditions, availability of feedstocks, other unfortunate
events, etc.) the final BED volume requirements provide a guaranteed floor that provides
certainty for greater volumes of BED volumes than today, and the total renewable fuel and
advanced biofuel standards are expected to drive even higher volumes of BED. As a result, we
believe the final RFS standards will create the right market conditions for biodiesel companies to
grow, and create jobs.
Applicable Volume and Waiver- Biodiesel Industry:
One commenter stated that EPA had incorrectly used the argument it has made for exercising its
waiver authority in determining the volumes of BED and Advanced Biofuels for 2016 and 2017.
EPA disagrees with this comment. This commenter appears to conflate issues related to setting
the BED standard with those associated with setting the advanced biofuel and total renewable
fuel standards. The RFS standards are nested within each other, with the BED standard being a
subset of the advanced biofuel standard and the advanced biofuel standard being a subset of the
total renewable fuel standard. In exercising our general waiver authority we have set the total
renewable fuel standard at the maximum reasonably achievable level considering all potential
supplies of biodiesel and renewable diesel as discussed in section HE. of the final rule. Thus,
our final standards already require as much biodiesel and renewable diesel as the market can be
expected to provide. Once the total renewable fuel volumes was set at the maximum reasonably
achievable level, we then assessed what portion of it was appropriate to be met with advanced
biofuels. In exercising our cellulosic waiver authority, we have set the advanced biofuel
standard at the reasonably attainable level considering all the potential supplies of advanced
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biodiesel and renewable diesel as discussed in section II.F of the final rule. While the market
can choose to meet the standards in a variety of ways as shown in Table II.G-2. of the final rule,
we anticipate that the vast majority of the advanced biofuel standard will be met with advanced
biodiesel and renewable diesel. Once the advanced biofuel volume was established we then
could assess what portion of it should be mandated to be BED. Here the statute prescribes that
we consider a variety of factors, which we have done, though it does not limit the factors that we
could consider.
Applicable Volume Is Restricted Due to Lateness of Final Rule- Obligated Parties:
With regard to oil industry comments suggesting the EPA is prohibited from increasing the
biomass-based diesel standard above 1.28 billion for 2014, 2015 and 2016 because obligated
parties did not have timely notice of EPA's intention to increase the biomass-based diesel
standard above the amount required in the 2013 production year and proposed (for 2014 and
2015) in November, 2013, we disagree. We believe that obligated parties were on notice that the
BED volume requirement could be higher than 1.28 billion gallons. First, in proposing 2014
volumes, in the November 2013 NPRM we said that we believed 1.60 billion gallons of biomass-
based diesel was the upper-end of BED volume range for use in deriving the proposed total
renewable fuel volume for 2014 (78 Fed. Reg. 71732, 71767 (November 29, 2013)). While we
proposed a 2014 and 2015 BED volume requirement of 1.28 million, we also requested comment
on alternative approaches and higher volumes (78 Fed Reg 71732, 71734). We also noted in the
NPRM that total biodiesel production by the end of 2013 could be as high as 1.7 billion gallons
and that the facilities contributing to this production collectively had a capacity of well over 2
billion gallons (78 Fed Reg 71732, 71752). Thus, stakeholders were certainly on notice by
November 2013 that a final BED volume requirement greater than 1.28 billion gallons was
possible and could be used in deriving the final 2014 and 2015 BED standard. In addition, they
were provided with further notice that the final volume requirements could be higher than 1.28
billion gallons through the June 10, 2015 NPRM. The volumes in the final rule are somewhat
higher than proposed in June, but are a logical outgrowth of the proposal. In addition to
obligated parties having been provided adequate notice, we note that the final rule provides
obligated parties with substantial time to come into compliance with 2014 and 2015
requirements. For 2014, the deadline in today's rule is Augustl, 2016, two months later than
proposed and a full 8 months after signature of this rule. For 2015 the compliance demonstration
deadline is December 1, 2016, or 12 months from signature of this rule. Since compliance can
be achieved through acquisition of RINs in the marketplace, and does not require capital
investments or actual renewable fuel blending, we believe that this amount of lead time for
parties to come into compliance is adequate and reasonable.
With respect to the 2016 BED volume requirement, we acknowledge that we are late in
finalizing the rule establishing the requirement, but note that EPA's first proposal regarding the
BED applicable volume for 2016 was the NPRM issued in June, 2015, wherein we proposed a
significant increase over 1.28 billion gallons. We do not believe obligated parties had any
reasonable expectation that the requirement would be maintained at 1.28 billion gallons.
Furthermore, in light of the flexibilities noted above, and the fact that compliance need not be
demonstrated until three months after the close of 2016, we believe that the final volume
requirement is both reasonable and, for the reasons discussed in Section III of the preamble,
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appropriate. For additional discussion of the stator deadlines and lateness of the rule refer to RTC
Sections 3.5.2 and 10.2.2.
3.3.1 Balance between Supporting the Biomass-Based Diesel Industry and
Ensuring Opportunities for Other Advanced to Grow
Comment:
Baker Commodities
The EPA acknowledges that the biodiesel industry can produce at higher rates than offered in the
proposal, but then justifies the lower mandate based on a desire to encourage competition
amongst advanced biofuels. [EPA-HQ-OAR-2015-0111-1907-A1 p. 1-2]
Crimson Renewable Energy LP
The biomass-based diesel program has been the most successful part of the RFS Program, yet it
arguably received the most unfavorable ramp up of all of the other fuels. And this is in spite of
the EPA's own calculations showing that biodiesel delivers more significant greenhouse gas
emissions reductions than any other domestic, commercial-scale fuel on the national market.
[EPA-HQ-OAR-2015-0111-1823-Alp.2]
To reiterate, we at Crimson object to EPA's methodology for the reasons set forth by NBB in its
comprehensive comments (Improper encouragement of "competition" amongst advanced
biofuels, cost of compliance, incorrect interpretation of "nesting" provision, arbitrary assessment
of 6 factors, etc.). [EPA-HQ-OAR-2015-0111-1823-A1 p.2]
It is especially troubling and illogical that the EPA has said repeatedly that it sets the standards
based on "maximum achievable" volumes elsewhere in the RFS program, and then set the
biomass-based diesel volume at a minimum volume, arguing somehow that doing so would
actually benefit the overall program. The opposite is true. Since the industry already has capacity
to more than meet the proposed increases, there is simply little incentive to continue to invest in
an uncertain, and clearly slow moving, future. [EPA-HQ-OAR-2015-0111-1823-Al p.2]
Darling Ingredients Inc.
Unfortunately, the Proposed Rule then concludes that it would be inappropriate for the EPA to
increase Biomass Based Diesel volume obligations because 'Increasing the guaranteed market for
BED, rather than allowing excess BED to compete for market share with other advanced
biofuels within the advanced biofuel standard, would likely reduce competition and thus result in
increased cost associated with the RFS program with no additional GHG reductions. While an
interesting statement of general economic theory the EPA (1) provides no historical or analytical
justification to support that general theory nor does it (2) establish any basis in the statute
providing the EPA the authority to utilize this consideration. Further, given the cost effective
manner in which BED reduces GHG the final justification for the EPA's comment relating to 'no
additional GHG reductions' is simply wrong. [EPA-HQ-OAR-2015-0111-1929-A1 p.3]
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As far as the first argument is concerned, EPA's own analysis fails to articulate any reasoning for
the theory that additionally mandated BED volumes will limit competition and increase cost.
Indeed, the EPA proposed volumes fail to meet even historical supply availability. It is hard to
imagine that a proposed volume standard less than historical production could lead to an
uncompetitive situation. [EPA-HQ-OAR-2015-0111-1929-A1 p.8]
The second consideration put forward on why Biomass Based Diesel volumes should be limited
is that if the BED is dictated then there would be no incentive for the development of Cellulosic
and other Advanced Fuels. Darling agrees with the EPA's conclusion. The BED mandate should
not represent all of the Advanced Fuel mandate. However, this goal can be met and there can be
an incentive for other Advanced Biofuels. EPA could increase the BED AND increase Advanced
Biofuels volume. That is the reason that Darling is suggesting that Advanced Biofuels should be
increased above the levels proposed by the EPA for 2016 and 2017. The EPA in the Proposed
Rule establishes that it anticipates 200 million gallons of Cellulosic in 2016 and provides for 500
million gallons of Unspecified Advanced in 2016. Darling proposes to increase Advanced
Biofuels by 350 million RTN's in 2016 which would mean an increase of 200 million gallons of
BED (resulting in approximately 310 million RTN's) and the same incentive for development of
Cellulosic would exist as the EPA has in its Current Proposed Rule. The same logic applies for
Darling's suggested 2017 Advanced Biofuel goal of 4.25 billion RIN's; note the Darling proposal
for 2017 Advanced RIN's slightly increases the available bucket for undifferentiated advanced in
compliance with the aspirational spirit of spurring advanced biofuel production. [EPA-HQ-OAR-
2015-01 ll-1929-Alp.9]
Minnesota Soybean Processors (MnSP)
EPA contends that it is setting the biomass based diesel volume at a level that will allow other
advanced biofuels to compete in the advanced biofuel marketplace: "Competition is good for
obligated parties and consumers, as it permits the market to determine the most efficient, lowest
cost, best performing fuels for meeting the increasingly higher volume requirements anticipated
year to year under the program." 80 Fed. Reg. at 33.103. The simple problem that EPA fails to
recognize is that of EPA is trying to create a false marketplace between marketplace products,
gasoline and diesel, which simply cannot be substituted for each other. EPA must remember that
the only currently renewable Advanced Biofuel fuel products available, now and at least for the
time period this proposed rulemaking is for, on a commercial scale are biomass based diesel and
sugarcane ethanol. These fuels have different customers, uses and marketplace factors that affect
their individual markets. We urge EPA to very carefully reconsider the lack of interaction
between fuels intended to replace gasoline and those intended to replace diesel fuel. MnSP
further contends that it is not EPA's role to determine "competition" or "flexibility" within the
marketplace. EPA has acknowledged its role at 80 Fed. Reg. 33,110 is to simply increase
renewable fuel use over time. [EPA-HQ-OAR-2015-0111-2505-A1 p.2-3]
NAFA Fleet Management Association
The U.S. biodiesel and advance biodiesel industry has the ability and capacity to increase
production above and beyond the standards called for in your recent proposal, particularly when
you consider the potential for sharply increased imports qualifying for the RFS. We should be
building our domestic industry, and doing so requires strong policy signals. [EPA-HQ-OAR-
2015-0111-3171-Alp.l]
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National Biodiesel Board
NBB appreciates the work EPA has done to get the RFS2 program back on track. It is supportive
of EPA's attempts to get the program right and meet the goals of Congress, and to get the
standards issued on time to give the industry the certainty sought to continue making the needed
investments. NBB also recognizes that the new proposal stands as an improvement over the
highly flawed November 2013 proposal. Unfortunately, though, EPA continues to implement the
program in a manner that places a ceiling on the renewable fuels industry, a ceiling well below
the floors Congress intended to set. While EPA attempts to read the statute as including
considerations of getting fuel to the consumer, Congress made the policy determination for the
consumer, as it did with, for example, requiring the elimination of leaded gasoline and requiring
an oxygenate in fuels to address air quality. EPA must now effectuate that determination. Indeed,
Congress determined the appropriate growth for renewable fuels, and EPA must still "ensure"
statutory volumes are met. [EPA-HQ-OAR-2015-0111-1953-A2 p. 11]
EPA asserts that its proposal seeks to "achieve an appropriate and reasonable balance" to support
"more established" biofuels and "emerging biofuels." 80 Fed. Reg. at 33,102. NBB does not
dispute that the minimum statutory volumes and categories established by Congress were
intended to "provid[e] opportunities ... for emerging biofuels." But, NBB disagrees that EPA's
job is to identify "an appropriate and reasonable balance" among biofuels. EPA's proposal is
supposed to provide certainty and ensure the incentives sought by Congress for all biofuels to
achieve continued growth overall and reduce the dependence and use of fossil fuels. EPA
recognizes that the standards set for advanced biofuels "must be ambitious to be consistent with
the intent of Congress in establishing the RFS program." Id. at 33,105. [EPA-HQ-OAR-2015-
0111-1953-A2p.ll]
While the new proposal has higher volumes than EPA had proposed in the November 2013
proposal, EPA continues to impermissibly assert its own policy objectives in setting the volumes
here. The new proposal talks of "competition," "compliance flexibility," "market liquidity," and
"reduce[d] compliance costs." See, e.g., 80 Fed. Reg. at 33,102, 33,120, 33,130, 33,135. None of
these is a consideration found in the statute. Despite recognizing the clear goals of Congress to
promote biofuel production, EPA appears to base the proposed volumes at limited levels on
"constraints" in distribution and in the retail market to consumers and on "[Competition,"
asserting it "is good for obligated parties and consumers," rather than focus on available biofuels
ready to step up to the plate. Id. at 33,102. But, EPA cites to no authority to indicate that any
such constraint or "competition" among biofuels is an appropriate consideration. Nor can it.
Indeed, in letting such concepts dictate the volumes EPA is setting, EPA is rewarding the
recalcitrance of obligated parties. The statute here controls, and obligated parties should have
planned on EPA fulfilling its statutory obligations, notwithstanding its erroneous November
2013 proposal. When EPA has enforced the volumes, the parties have met them. Until they
cannot be met, there is no rationale for EPA to identify some purported "balance" to identify the
appropriate volumes. Congress already weighed these concerns and identified the appropriate
balance. Higher volumes can be met, and EPA needs to set standards to meet those volumes.
[EPA-HQ-OAR-2015-0111-1953-A2p.l2]
EPA now contends, however, that, because it is "nested" within the advanced biofuel category,
EPA should allow any greater increases in biomass-based diesel to compete with other advanced
biofuels, finding that such "competition" would assist obligated parties in reducing compliance
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costs. 80 Fed. Reg. at 33,102. In so doing, EPA proposes increases of only 100 million gallons
for the 2016 and 2017 calendar years.26 But the statute does not require, suggest or encourage
EPA to require biomass-based diesel fuels to compete with other "undifferentiated" advanced
biofuels. EPA cites to no factor or legal authority that allows it to eschew the factors in the
statute in favor of reducing costs of obligated parties. [EPA-HQ-OAR-2015-0111-1953-A2 p.25-
26]
While EPA may contend that the phrase "based on" is ambiguous and, thus, does not preclude
EPA from considering other factors, the statute must be interpreted with its purposes in mind. In
API v. EPA, the D.C. Circuit found that the phrase "based on" did not require "slavish
adherence" to the EIA projections when setting the cellulosic biofuel volume under Section
21 l(o)(7)(D). 706 F.3d at 478. But, here, the statutory provision requires EPA to consider the
implementation of the program in prior years and to conduct an analysis of six factors, which are
specific and detailed. "The level of specificity" provided by Congress "effectively closes any gap
the Agency seeks to find and fill with additional criteria." Ethyl Corp. v. EPA, 51 F.3d 1053,
1060 (D.C. Cir. 1995). "Congress was explicit in its direction. ... EPA has failed to give effect to
the unambiguously expressed intent of Congress." Id. EPA cannot use the phrase "based on" to
broaden its discretion under this provision. Moreover, EPA's analysis must be guided by its
obligation to ensure that transportation fuel increasingly contains renewable fuel. Further, the
statute already provides for flexibility in meeting the volume requirements through a credit
program and the deficit carryover. This is all evidence that the volume setting process should not
be based on easing compliance for obligated parties. [EPA-HQ-OAR-2015-0111-1953-A2 p.26]
Congress anticipated increases in the diesel fuel market, not to require Biomass-based Diesel to
compete with other advanced biofuels. [EPA-HQ-OAR-2015-0111-1953-A2 p.28]
Rather than move the country toward greater energy independence as envisioned by Congress,
EPA misconstrues the "nested" aspect of the biodiesel-based diesel volume requirement to
contend that any additional volumes would be allowed based on "competition." But, the
implementation of the program in prior years establishes the ability of biomass-based diesel to
help meet the advanced biofuel statutory volumes, which are required, and has increased the
availability of other volumes. EPA now impermissibly focuses on "competition" and so-called
"real-world limitations," penalizing biomass-based diesel's success and limiting its further
contributions. This is contrary to a statute seeking to reward those successes. [EPA-HQ-OAR-
2015-0111-1953-A2 p.32-33]
While EPA's new proposal refers to allowing for "competition" for other advanced biofuels,
EPA is falling into the same errors it did in the November 2013 proposal by trying to set the
volumes to provide obligated parties more flexibility in meeting compliance (i.e., purported costs
outweighing the benefits). Even if not prohibited by the statute, EPA's focus on only one factor
to decline to increase the required volumes for biomass-based diesel based on these
considerations is arbitrary and capricious and counter to the statute's purposes. See Ctr. for
Biological Diversity v. NHTSA, 538 F.3d 1172, 1197 (D.C. Cir. 2008). [EPA-HQ-OAR-2015-
0111-1953-A2p.37]
The notion of "competition" among advanced biofuels, and compliance costs, are not specifically
included in the listed statutory factors. [EPA-HQ-OAR-2015-0111-1953-A2 p.37]
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Here, EPA purports to create a competitive market (which it is not) merely to provide additional
flexibility. While EPA says that it wants to provide "flexibility" to the obligated parties towards
meeting their obligations, this flexibility is already available to them and does not justify keeping
the biomass-based diesel volume at an artificially low level. The system allows for an increase of
the biomass-based diesel volume to augment and enhance the overall objectives of RFS2. [EPA-
HQ-OAR-2015-0111-1953-A2 p.38]
26 EPA proposes even less of an increase from 2014 to 2015, presumably because its proposal is late and will not be
finalized until toward the end of the year
Western Canada Biodiesel Association
We are writing to urge you to include additional biodiesel growth in the Renewable Fuel
Standard (RFS) volumes to be finalized later this year. While the recent proposal for biodiesel
under the program was a step in the right direction, we believe that additional growth can be
responsibly delivered by the US industry. [EPA-HQ-OAR-2015-0111-0265-A1]
We are keenly aware that that the North American energy industry is highly integrated, and that
stability of policy in both our countries is critical to investor confidence in building out
alternatives to petroleum fuels. The US biodiesel industry has worked tirelessly to ensure that
biodiesel is fully functional in the diesel fuel pool, and the experience of state governments that
have mandated mid-level blends of biodiesel show that the federal Renewable Volume
Obligation has ample room for growth. [EPA-HQ-OAR-2015-0111-0265-A1]
Response:
A number of biofuel industry commenters including NBB urged EPA to send strong policy
signals by finalizing BED volumes that were significantly higher than what was proposed. Some
of these same commenters also disagreed with EPA's characterization of the nested nature of the
advanced and the BED standards as well as the need to balance among competing interests to
ensure that there is room within the advanced volume requirement for other biofuels to
potentially develop.
EPA disagrees with these comments. In their comments they often conflate issues related to
setting the BED standard with those associated with setting the advanced biofuel and total
renewable fuel standards. The RFS standards are nested within each other, with the BED
standard being a subset of the advanced biofuel standard and the advanced biofuel standard being
a subset of the total renewable fuel standard. In exercising our general waiver authority we have
set the total renewable fuel standard at the maximum reasonably achievable level considering all
potential supplies of biodiesel and renewable diesel as discussed in section HE. of the final rule.
Thus, our final standards already require as much biodiesel and renewable diesel as the market
can be expected to provide. Once the total renewable fuel volumes was set at the maximum
reasonably achievable level, we then assessed what portion of it was appropriate to be met with
advanced biofuels. In exercising our cellulosic waiver authority, we have set the advanced
biofuel standard at the reasonably attainable level considering all the potential supplies of
advanced biodiesel and renewable diesel as discussed in section II.F of the final rule. While the
market can choose to meet the standards in a variety of ways as shown in Table II.G-2. of the
final rule, we anticipate that the vast majority of it will be met with advanced biodiesel and
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renewable diesel. Once the advanced biofuel volume was established we then could assess what
portion of it should be mandated to be BED. Here the statute prescribes that we consider a
variety of factors, which we have done, though it does not limit the factors that we could
consider.
We believe the final rule strikes the appropriate balance as envisioned by the RFS statute,
between providing a market environment where the development of other advanced biofuels is
incentivized, while also realizing the benefits associated with increasing the required volume of
BED. Given our final volumes for advanced biofuel in these years, setting the BED standard in
this manner continues to allow a considerable portion of the advanced biofuel volume to be
satisfied by either additional gallons of BED or by other unspecified types of qualifying
advanced biofuels (see Table III.D.4-1 in the final rule). While we have not yet determined the
applicable volume of total advanced biofuel for 2017, we anticipate the continued growth in the
advanced biofuel standard such that the advanced standard will provide an incentive for both
increasing volumes of BED and other advanced biofuels. We believe maintaining this
unspecified or other advanced biofuel volume will provide the incentive for development and
growth in other types of advanced biofuels. At the same time, allowing the portion of the
advanced biofuel volume requirement that is dedicated to BED to increase concurrently with the
increase in the overall advanced biofuel volume requirement will contribute to market certainty
for both the BED industry and the renewable fuels program in general.
In establishing the BED and cellulosic standards as nested within the advanced biofuel standard,
Congress clearly intended to support development of BED and cellulosic biofuels, while also
providing an incentive for the growth of other non-specified types of advanced biofuels. That is,
the advanced biofuel standard provides an opportunity for other advanced biofuels (advanced
biofuels that do not qualify as cellulosic biofuel or BED) to be used to satisfy the advanced
biofuel standard after the cellulosic biofuel and BED standards have been met. Indeed, since
Congress specifically directed growth in BED only through 2012, leaving development of
volume targets for BED to EPA for later years while also specifying substantial growth in the
cellulosic and general advanced categories through 2022. We believe that Congress clearly
intended for EPA to evaluate the appropriate volume requirement for BED within the advanced
biofuel standard as described in CAA section 201(o)((2)(B)(ii). We note that Congress could
have set ambitious targets for BED for years after 2012, as it did for cellulosic biofuel, but did
not do so.
When viewed in a long-term perspective, BED can be seen as competing for investment dollars
with other types of advanced biofuels for participation as advanced biofuels in the RFS program.
In addition to the long-term impact of our action in establishing the BED volume requirements,
there is also the potential for short-term impacts during the compliance years in question.
Although we are setting the advanced standard at a level that reflects growth in volumes that is
reasonably attainable, we are not setting the standard at the maximum theoretical level that
reflects the highest potential for domestic production plus import. As described in Section II.F,
there is substantial uncertainty, especially regarding import volumes, that cautions against such
an approach. Therefore, by setting the BED volume requirement at a level lower than the
advanced biofuel volume requirement (and lower than the expected production of BED to satisfy
the advanced biofuel requirement), we are allowing the potential for some competition between
BED and other advanced biofuels (including imported advanced biofuels) to satisfy the advanced
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biofuel volume standard. We believe that this competition will also help to encourage, over the
long term, the development and production of a variety of advanced biofuels that will be needed
for the long-term growth of RFS volumes. However, in the short term it could also result in
lower cost advanced biofuels for consumers.
We also disagree with comments that the consideration of competition within the advanced
biofuel pool between BED and other advanced biofuels, and the potential for lower compliance
costs cited in our proposed rule, are not included in the list of factors in 42 U.S.C. §
7545(o)(2)(B)(ii)(V) that EPA is to consider in establishing the volume requirement for BED.
EPA respectfully disagrees. Three of the factors specified in the statute are indeed related to the
considerations discussed above. The "impact of the use of renewable fuels on the cost to
consumers of transportation fuel and on the cost to transport goods" referenced in CAA
21 l(o)(2)(B)(ii)(V) is relevant, since we believe a diverse advanced biofuel pool will potentially
result in decreased costs associated with the use of advanced biofuels and, consequently,
decreased costs to consumers. Similarly, the "impact of the production and use of renewable
fuels on the environment" referenced in CAA 211 (o)(2)(B)(ii)((I) is relevant, since we believe
that incentivizing research, development, and commercialization of a variety of advanced
biofuels could lead to the development of biofuels that have more benign effects on the
environment than those that are currently available. As noted above, "the impact of renewable
fuels on the energy security of the United States" referenced in CAA 21 l(o)(2)(B)(ii)(II) is
relevant, since we believe that incentivizing the development of a diverse array of biofuels will
increase energy security Finally, we note that the list of factors specified in the statute is not
exclusive; that is EPA is not precluded from considering additional factors that advance the
statutory objectives when it sets applicable volumes for years not specified in the statute.
Finally, we disagree with the commenter who asserted that we continue to implement the
program in a manner that places a ceiling on the renewable fuels industry, a ceiling well below
the floors Congress intended to set. With the considerations discussed in sections III.D.1-3 of the
final rule in mind, as well as our analysis of the factors specified in the statute and described
below, and in coordination with the Departments of Agriculture and Energy, we are finalizing
the applicable volume of BED at 1.9 billion gallons for 2016 and 2.0 billion gallons for 2017.
These volumes are higher than the 1.8 and 1.9 billion gallons proposed for 2016 and 2017, and
reflect the fact that we are finalizing an increase in the advanced biofuel requirement for 2016,
from the 3.4 billion gallons we proposed, to 3.61 billion gallons in the final rule. We have
decided to dedicate a portion of this increase to BED, and leave the remainder as unspecified
advanced biofuel, and thus available for any advanced biofuel to fill, for the same reasons
reflected in the proposal and this final rule for establishing the BED volume requirements: to
provide additional support for the BED industry while allowing room within the advanced
biofuel volume requirement for the participation of non-BBD advanced fuels. Although we are
not establishing an advanced biofuel applicable volume for 2017 at this time, we anticipate that
the 2017 advanced biofuel requirement will be larger than the 2016 requirement, and the final
2017 BED volume requirement reflects this fact. We believe this final rule strikes the
appropriate balance, between providing a market environment where the development of other
advanced biofuels is incentivized, while also realizing the benefits associated with increasing the
required volume of BED.
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Additional relevant comments and our responses can be found in RTC sections 3.4, 3.4.3, 7 and
3.3.2 Applicable Biomass-Based Diesel Volume for 2014
Comment:
456Archer Daniels Midland Company (ADM)
Previously, ADM encouraged EPA to use its discretion to increase the biodiesel volume to 1.7
billion gallons in 2014. EPA has instead proposed to set the 2014 level based on actual
production. However, EPA's calculation appears to understate those volumes and should be
corrected. [EPA-HQ-OAR-2015-0111-2262-A1 p. 2]
California Biodiesel Alliance (CBA)
For 2014, the EPA proposed to use its waiver authority to reduce the 3.75 billion statutory
mandate set by Congress for the advanced category, and rather, set the advanced and biomass-
based diesel based on "available RIN supply." CBA disagrees with this approach for the reasons
spelled out in the NBB comments (Inappropriate use of waiver authority, EPA's lack of
consideration of the prior-year RINS, improper consideration of "RIN supply" as opposed to
"actual production," etc.) [EPA-HQ-OAR-2015-0111-1910-A1, pp.1-2]
Based on the actual production of biomass-based diesel, EPA should set the 2014 biomass-based
diesel RVO at 1.8 billion and should hold the statutory volume for advanced at 3.75 billion.
[EPA-HQ-OAR-2015-0111-1910-Al,p.2]
Crimson Renewable Energy LP
Based on the actual production of biomass-based diesel, EPA should set the 2014 biomass-based
diesel RVO at 1.8 billion and should hold the statutory volume for advanced at 3.75 billion.
[EPA-HQ-OAR-2015-0111-1823-Alp.l]
Governors' Biofuels Coalition
Despite meeting or exceeding the RFS Biomass-based diesel volume requirements every year,
the proposed biomass-based diesel RVO of 1.28 million gallons is less than the amount produced
in 2013. This level is unnecessarily low and will stifle the growth and job creation potential of
the industry, which is on track to produce nearly 2 million gallons of biodiesel in 2014. [EPA-
HQ-OAR-2015-0111-1722-A1 p.6]
Imperium Renewables and Renewable Biofuels
Toward that end, the recent draft proposal for the BED 2014-2017 volumes does send a more
positive signal to the markets, and industry appreciates the difficult process EPA has undertaken
to withdraw the earlier proposal and produce a proposal that better reflects the industry's
capabilities. However, the proposed rule still falls well short of the demonstrated production
levels of domestic producers. [EPA-HQ-OAR-2015-0111-2043-Al p.2]
456
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Phillips 66 Company
The API/AFPM comments construct the argument that EPA is limited to setting the standards for
2014, 2015, and 2016 to no higher than 1.28 billion gallons. In fact, this volume is what EPA
proposed for 2014 and 2015 in the proposed rule published in November, 2013. EPA
acknowledged in that proposal that "the statute requires that we finalize these biomass-based
diesel volume requirements no later than 14 months before the first year for which that volume
requirement will apply." We agree that given the statutory language, EPA cannot increase the
biomass-based diesel standards prior to 2017. [EPA-HQ-OAR-2015-0111-2039-A1 p.2]
Shell Oil Products US
The 14 month lead time requirement serves an important purpose. This provision applies to years
where the volumes are not listed in the statute and therefore neither producers nor anyone else in
the supply chain knows what the requirement will be. The purpose of the 14 month lead time
requirement is to provide all parties in the supply chain the opportunity to plan their compliance
and make investments, if necessary. [EPA-HQ-OAR-2015-Oil 1-2716-A2 p.5]
Response:
Some biofuel stakeholders commented that EPA should finalize a BED volume requirement of
1.8 billion gallons for 2014 and should include carryover RINSs in determining supply for the
year. Other biofuel industry commenters indicated the EPA had incorrectly calculated the actual
supply for 2014. Oil industry commenters argued that EPA was precluded from finalizing a
BED volume higher than 1.28 billion gallons for 2014 since it did not provide notice to obligated
parties as required under the statute since we failed to finalize 14 months from the time that the
requirement applies.
We do not agree with comments suggesting we finalize a higher BED volume requirement than
1.63 for 2014. As we did for advanced and total renewable fuel in 2014, we believe that it is
appropriate to establish the 2014 volume requirements of BED to reflect actual supply.
Therefore, we are finalizing a BED applicable volume requirement of 1.63 billion gallons for
2014, which represents our estimate of actual BED supply in 2014. We define supply for 2014
as the number of BED RINs generated in 2014 that were available for compliance. (This focus
on RINs generated in 2014 is consistent with our general approach to carryover RINs for this
rulemaking, as described in Section II.H of the final rule and Section 6.1.) Supply would thus
include RINs that were generated for renewable fuel produced or imported in 2014 as recorded
in the EMTS, minus any RINs that have already been retired or would be expected to be retired
to cover exports of renewable fuels or for any purpose other than compliance with the RFS
percentage standards. RINs that have already been retired for such circumstances as RINs being
invalid, spills, corrected and replaced RINs, etc. are recorded in EMTS on an ongoing basis.
However, complete information on RINs that are retired to cover exports of renewable fuel and
foreign generated renewable fuel that is exported to another country is not available through
EMTS until after the 2014 compliance demonstration deadline. Since compliance cannot occur
until the standards are set, we are using biodiesel export information from EIA for 2014 to
estimate the number of 2014 BED RINs that will be retired to satisfy obligations associated with
exported BED.
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As we previously stated in RTC section 3.3 and 3.5.2 (and discussed in in section 10.2.2 of this
RTC), we disagree with those commenters who suggested the EPA was prohibited from
increasing the biomass-based diesel standard above 1.28 billion for 2014 because obligated
parties did not have notice of EPA's intention to increase the biomass-based diesel standard
above this amount during the 2014 production year. We believe that obligated parties were on
notice that the BED volume requirement could be higher than 1.28 billion gallons. First, in
proposing 2014 volumes, in the November 2013 NPRM we said that we believed 1.60 billion
gallons of biomass-based diesel was the upper-end of BED volume range for use in deriving the
proposed total renewable fuel volume for 2014. While we proposed a 2014 BED volume
requirement of 1.28 million, we also requested comment on alternative approaches and higher
volumes. We also noted in the NPRM that total biodiesel production by the end of 2013 could
be as high as 1.7 billion gallons and that the facilities contributing to this production collectively
had a capacity of well over 2 billion gallons. Thus, stakeholders were certainly on notice by
November 2013 that a final BED volume requirement greater than 1.28 billion gallons was
possible and could be used in deriving the final 2014 BED standard. Furthermore, they were
provided with notice of the precise volume requirement being finalized today through the June
10, 2015 NPRM, and parties will have until August 1, 2016, more than a full year from that
NPRM, to submit their compliance demonstrations for 2014.
Another commenter stated that the 14 month lead time requirement serves an important purpose
in those years where the volumes are not listed in the statute providing all parties in the supply
chain the opportunity to plan their compliance and make investments. EPA acknowledges the
missed statutory deadlines which have caused us to set the 2014 and 2015 standards at the levels
of actual supply. We acknowledge that investors, producers, distributors, and retailers seek
certainty in the standards for decision-making. With this rulemaking, we place the standards
back on track, and seek to maintain this for future annual standards to alleviate many of the
issues presented by commenters due to untimely standard setting.
3.3.3 Applicable Biomass-Based Diesel Volumes for 2015-2017
Comment:
Bates White
The EPA's current proposal for biodiesel volumes of 1.9 billion gallons in 2017, however, does
not represent a particularly significant change from the status quo, as it represents just a 4
percent annual growth rate relative to 2014 actual volumes.
California Biodiesel Alliance (CBA)
CBA is very concerned with the RFS proposal for advanced and biomass-based diesel for 2015-
2017. The biodiesel industry has consistently demonstrated its ability to expand production, year
after year. In fact, EPA acknowledges in the RFS Proposal that the proposed volumes for
biomass-based diesel through 2017 remain well below domestic capacity. In 2013, the biodiesel
industry produced approximately 1.8 billion gallons of fuel, and would have easily produced 2.1
billion in 2014 but for the EPA's action in 2013. 2015 was off to a poor start as a result of EPA's
continued delay, but in May and June, the two months since the announcement of the current
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RFS proposal, the industry produced or imported 169 and 176 million, respectively, which can
be annualized to 2.1 billion gallons. [EPA-HQ-OAR-2015-0111-1910-A1, p.2]
Again, CBA objects to EPA's methodology for the reasons set forth by NBB in its
comprehensive comments (Improper encouragement of "competition" amongst advanced
biofuels, cost of compliance, incorrect interpretation of "nesting" provision, arbitrary assessment
of 6 factors, etc.) It is particularly troubling that the EPA purports to set the standards based on
"maximum achievable" volumes elsewhere in the RFS program, and then set the biomass-based
diesel volume at a minimum volume, arguing somehow that doing so would actually benefit the
overall program. The opposite is true. Since the industry already has capacity to more than
meet the proposed increases, there is simply little incentive to continue to invest in an uncertain,
and clearly slow moving, future. [EPA-HQ-OAR-2015-0111-1910-A1, p.2]
We ask that you reconsider the biodiesel volumes in your May proposal and finalize stronger
standards, particularly for 2016 and 2017. The biodiesel industry has previously requested
volumes of 2.4 billion gallons in 2016 and 2.7 billion gallons in 2017. While we continue to
believe those volumes are readily achievable and sustainable, particularly with rising imports, I
ask now that you set the standards for not less than 2 billion gallons for 2016 and 2.3 billion
gallons for 2017. [EPA-HQ-OAR-2015-0111-1910-A1, p.3]
Crimson Renewable Energy LP
We ask that you reconsider the biomass-based diesel volumes in your May proposal and finalize
stronger standards, particularly for 2016 and 2017. The biodiesel industry has previously
requested volumes of 2.4 billion gallons in 2016 and 2.7 billion gallons in 2017. While we
continue to believe those volumes are readily achievable and sustainable, particularly with rising
imports, I ask now that you set the standards for not less than 2 billion gallons for 2016 and 2.3
billion gallons for 2017. [EPA-HQ-OAR-2015-0111-1823-A1 p.3]
Darling Ingredients Inc.
Darling submits comments concerning the proposed obligations proposed for Biomass Based
Diesel (BED) and Advanced Biofuel for both 2016 and 2017. While Darling is encouraged that
the proposed rule substantially increases those volumes previously proposed, we believe the
proposed volumes for both BED and Advanced Biofuel are inadequate and should be further
increased as the proposed volumes neither (1) fulfill the clearly defined goals established by the
EPA in its current written proposal nor (2) provide adequate volumes using the statistical
information provided by the EPA in its current written proposal. All the information contained in
these comments comes directly from the current proposed rule submitted by the EPA. [EPA-HQ-
OAR-2015-0111-1929-A1 p.l]
Darling agrees with both the perspective of the EPA regarding the intent of Congress to grow
Advanced Biofuels and that it should take into consideration the ability of the market to respond
to the Proposed Volumes, indeed the Proposed Rule does provide for growth in both BED and
Advanced Biofuels for 2016 and 2017. However, Darling contends the EPA failed to propose
volumes for both BED and Advanced Biofuels that are consistent with its own interpretation of
the statute. [EPA-HQ-OAR-2015-0111-1929-A1 p.2-3]
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The EPA argues persuasively that BED cannot create adequate volume to supplant the shortfall
in Cellulosic for 2016 and 2017 which are VOLUMES SPECIFIED BY THE STATUTE
(emphasis added). The EPA also questions whether adequate supplies of Brazilian sugar cane
ethanol will be available to meet the VOLUMES SPECIFIED BY THE STATUTE. While both
of these may be valid arguments for the EPA to exercise its waiver authority under the statute
NEITHER is a reason to limit the achievable volume of BED. Darling believes the EPA has
incorrectly used the argument it has made for exercising its waiver authority in determining the
volumes of BED and Advanced Biofuels for 2016 and 2017. [EPA-HQ-OAR-2015-0111-1929-
Al p.3]
The proposed rule sets out its recommended approach in setting standards for 2015-2016. Since
the volume obligations established for 2014 and 2015 are simply set at the actual (2014) and
estimated (2015) RIN's available (expressed in gallons of BED), Darling agrees it was
appropriate for the EPA to consider exports in determining mandated volumes. History cannot be
changed. However, Darling argues that exports of BED should not be considered in establishing
the volume mandates for 2016 and 2017. The issue of exports is NOT identified as a criteria to
be used by the EPA in determining BED volumes. The proposed rule appears silent on whether
the EPA is factoring exports in its determination of BED volumes, but in the Proposed Rule
when discussing Current and Future shortfalls in supply the EPA states, '...the market supplied
1.63 billion gallons... of BED (referring to 2014). That statement is incorrect as the market
supplied 1.705 billion gallon in 2014 (production plus imports) with a small volume being
exported resulting in a net supply of 1.63 billion gallons. [EPA-HQ-OAR-2015-0111-1929-A1
p.5]
Darling believes, supported by a clear policy direction established by both the plain meaning of
the statute and EPA's interpretation of the statute as well as EPA's clear understanding of both
the historical productivity of the BED industry and its current/future capabilities, that the
Proposed Rule fails to take advantage of the current Biomass Based Diesel industry
infrastructure to meet the clearly defined goals of the statute. BED is available in quantities
greater than those proposed for 2016 and 2017 and the industry has demonstrated a proven track
record of achieving higher volume growth. The volumes currently proposed by the EPA do not
even attain the level of historical production by the industry let alone provide a growth path to an
industry that has proven its ability to provide more cost-effective, renewable fuel. Simply stated
the current proposed volumes for both BED and Advanced Biofuel fail to comport with the
rationale stated by the EPA for deriving those volumes. The logic used for invocation of the
waiver authority is not rational and should not be used to limit the mandates for BED or
Advanced Biofuels. Indeed the EPA has an opportunity to support the supply of an Advanced
Biofuel accomplishing all of the objectives of Cellulosic while maintaining Advanced Biofuel
mandates that continue to stimulate further production of Cellulosic. There are no COMPETING
FACTORS and it is clear the EPA should raise the volumes for both Biomass Based Diesel and
Advanced Biofuels conforming them to both the rationale and the facts established by the EPA
IN ITS OWN PROPOSED RULE. [EPA-HQ-OAR-2015-0111-1929-A1 p.6]
The EPA clearly establishes in the Proposed Rule that all elements of the supply chain exist to
provide substantially greater volumes than those proposed in the rule. [EPA-HQ-OAR-2015-
0111-1929-A1 p.8]
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Imperium Renewables and Renewable Biofuels
Toward that end, the recent draft proposal for the BED 2014-2017 volumes does send a more
positive signal to the markets, and industry appreciates the difficult process EPA has undertaken
to withdraw the earlier proposal and produce a proposal that better reflects the industry's
capabilities. However, the proposed rule still falls well short of the demonstrated production
levels of domestic producers. [EPA-HQ-OAR-2015-0111-2043-Al p.2]
Indiana Soybean Alliance and American Soybean Association
The EPA should implement the RFS in a way that helps build our domestic industry, and doing
so requires strong policy signals that promote fulfilling volume requirements with domestically
produced biofuels to the greatest extent possible. Increasing the biomass-based diesel
requirements relative to the overall Advanced Biofuels requirements is a way to accomplish that
mission. [EPA-HQ-OAR-2015-0111-A1 p.2]
Wherever possible, EPA should seek to promote domestic biofuel sources to fulfill the RFS
volume requirements. However, when determining the appropriate volume standards for
biomass-based diesel, the EPA must also account for the likelihood of increased imports of
biodiesel from Argentina due to some factors beyond the RFS volume requirements. [EPA-HQ-
OAR-2015-0111-A1 p.2]
reconsider the biomass-based diesel standards in the Proposed Rule and finalize stronger
standards, particularly for 2016 and 2017. [EPA-HQ-OAR-2015-0111-A1 p.3]
Iowa Biodiesel Board (IBB) and Iowa Soybean Association (ISA)
Your decision on this matter has broad implications. Again, I ask that you set a final rule that is
closer to the industry's initial request of 2.4 billion gallons for 2016, and 2.7 billion gallons for
2017. We are more than capable of achieving and using these volumes. [EPA-HQ-OAR-2015-
0111-1942-A1 p. 2] [EPA-HQ-OAR-2015-0111-1043, pp./45-46]
National Biodiesel Board
Congress did not require this to be an annual review process. 42 U.S.C. § 7545(o)(2)(B)(ii). It
referenced the operation of the program "during calendar years specified in the tables,"
indicating that EPA has authority to set the volumes over a multi-year period after the years
listed. Id. [EPA-HQ-OAR-2015-0111-1953-A2p.23]
NBB does not dispute that other advanced biofuels should participate in the program, but EPA
has chosen to keep the volumes low rather than strive to achieve the volumes sought by
Congress. EPA does not explain why it cannot provide greater increases in biomass-based diesel
and further increase the advanced biofuel volume to address its purported concerns about
ensuring "other" advanced biofuels. Keeping a lower overall advanced biofuel volume when
there is more than enough capacity of biodiesel does not meet the goals of Congress or provide
the certainty for investors that EPA is purporting trying to create for other biofuels. [EPA-HQ-
OAR-2015-0111-1953-A2 p.27]
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Biomass-based diesel has been the only successful advanced biofuel produced in the United
States on a commercial basis, yet rather than continue to promote its production, as required,
EPA has artificially kept the biomass-based diesel numbers low. It provides no support or
explanation why only 100 million gallon annual increases (and only 8 million gallon monthly
increases) are appropriate given the ability of the industry to grow at much higher levels and
EPA's prior assessment that an almost 300 million gallon increase is appropriate based on
statutory factors. EPA fails to answer how this minimal increase supports growth when the
volumes are substantially less than production capacity, and requires less than 10 million gallons
more a month to achieve, a less than 5 percent increase. [EPA-HQ-OAR-2015-0111-1953-A2
p.27-28]
In short, EPA is supposed to ensure the minimum statutory volumes, not EPA's assessment of an
appropriate volume. As EPA recognized, Congress intended the mandates to increase investment
and diversification to make it cheaper and more attractive to use renewable fuels, not through
EPA's arbitrary setting of volumes at levels it believes to be most economic. EPA admits that the
proposed volumes are "at levels below what we anticipate can actually be produced and used for
compliance." 80 Fed. Reg. 33,108 n.19. EPA fails to grasp that the market will not reach what it
does not require. EPA seems to think the supply will cause demand when the fundamental logic
of any mandate is the opposite, that is that the demand will cause the supply response. Higher
volumes are "within reach of the market." Id. at 33,118. By failing to set requirements at levels
established by Congress, but rather setting those that are "below what... can actually be
produced" EPA is sending a clear market signal of reduced demand and therefore causing
reduced supply. Thus, EPA is bringing in consideration of factors outside those specified by
Congress, giving them precedence over all other considerations. If not prohibited, at a minimum,
such a proposal is an about face from its prior determinations, wholly inconsistent with the
statutory schemie, and arbitrary and capricious. [EPA-HQ-OAR-2015-0111-1953-A2 p.28]
Congress intended to promote increasing volumes of advanced biofuels including biomass-based
diesel. "[Increasing and extending the existing RFS—with specific incentives for the production
of biofuels from new sources of renewable biomass—is required, to provide market certainty to
both the existing ethanol industry and the next generation of advanced biofuel producers." S.
Rep. No. 110-65 at 3. The expanded RFS "represents a major advance in our commitment to
renewable, home grown fuels that reduce emissions, mitigate global warming, and improve
farmer income. This is a strong market signal to ethanol, biodiesel, and other renewable energy
investors that the Federal Government supports fuels that are more environmentally friendly and
help to reduce our dependence on oil." 153 Cong. Rec. S15421, S15429 (Dec. 13, 2007)
(statement of Sen. Durbin). Congress acknowledged that biodiesel, as a domestic advanced
biofuel with numerous available and potential feedstock sources, more than meets these goals.
See 153 Cong. Rec. H2233-02, H2233 (Mar. 6, 2007) (statement of Rep. King) ("And so our
approach here needs to be the expansion and the continued promotion of these energy supplies
that we have that we can develop here in the United States. The most obvious of those are the
biodiesel components, which have been expanding rapidly here in the United States, ...."). [EPA-
HQ-OAR-2015-0111-1953-A2 p.28-29]
Indeed, Congress intended to expand the RFS to include increased participation by the diesel
transportation fuel pool where biomass-based diesel is the advanced biofuel substitute.30 [EPA-
HQ-OAR-2015-0111-1953-A2 p.29]
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The inclusion of credits for "additional renewable fuel" further evidences congressional intent to
increase use of biofuels beyond motor vehicles and into those markets dominated by diesel fuel
products. [EPA-HQ-OAR-2015-0111-1953-A2 p.30]
Legislative history also shows that Congress intended EPA's authority to result in continued
volume increases in biomass-based diesel through 2022 balancing all of the considerations
outlined in the statute. [EPA-HQ-OAR-2015-0111-1953-A2 p.30]
EPA previously pointed to the "trend" in the biomass-based diesel statutory volumes for 2009-
2012 as supporting an increase of 280 million gallons (or 28 percent) from the required 2012
volume for 2013. 77 Fed. Reg. at 59,461.35 If Congress intended to simply let biomass-based
diesel remain underutilized throughout the program and let the overall advanced biofuel volume
drive the market for diesel fuel substitutes, it would not have needed to give EPA authority to set
the biomass-based diesel volumes starting in 2013. Similarly, here, the modest statutory volumes
for biomass-based diesel are well under current capacity, and biodiesel production has exceeded
the mandated volumes each year.36 [EPA-HQ-OAR-2015-0111-1953-A2 p.31]
Despite the proven production and available capacity of biomass-based diesel, EPA is expecting
to increase cellulosic biofuel production by 221 percent and almost 100 percent in 2015 and
2016, respectively, but only purports to provide a 4-6 percent increase each year for biomass-
based diesel (see table below).38 [EPA-HQ-OAR-2015-0111-1953-A2 p.32] [The table can be
found on page 32 of docket number EPA-HQ-OAR-2015-0111-1953-A2]
In the new proposal, "EPA's primary assessment of the statutory factors for years 2015 through
2016" is based on its presumption that the proposed advanced biofuel volume requirements for
2015-2016 "reflect the maximum volumes of all advanced biofuels (including BED) that can
reasonably be expected to be produced and consumed." 80 Fed. Reg. at 33,136 (emphasis
added). According to EPA, because the biomass-based diesel requirement is nested within the
advanced biofuel volume requirement, "the advanced biofuel volume requirement will determine
the level of BED production and import." Id. at 33,137. In other words, under EPA's assessment,
"the same volume of BED will be produced and imported regardless of the BED applicable
volumes that we require for 2015-2016." Id. As described above, this is a significant change
from EPA's prior interpretation where it found that increasing the biomass-based diesel volume
can better ensure the advanced biofuel requirement is met. It also is inconsistent with the statute
that makes clear Congress sought to increase the renewable fuel use in the diesel fuel pool.
[EPA-HQ-OAR-2015-0111-1953-A2 p.35]
29 This can be contrasted against the proposed increase in the cellulosic biofuel requirements by 221% and almost
100% in 2015 and 2016. See Section V.B.3.
30 While other advanced biofuels continue to emerge (including cellulosic diesel), sugarcane ethanol is the only
other commercially available advanced biofuel available on a larger scale that EPA has identified to fill the
advanced biofuel requirement. However, sugarcane ethanol, like conventional ethanol, is not a substitute for diesel
fuel. Moreover, it is an imported fuel, rather than domestically produced.
36 In finalizing the 1.28 billion gallons for 2013, EPA noted: "Others expressed their belief that Congress intended
for the statutory minimum volume of 1.0 billion gallons to be used to set the applicable volume for all years after
2012, with higher volumes being required only if EPA could demonstrate that those higher volumes were already
being produced." 77 Fed. Reg. at 59,460 (emphasis added). This is incorrect. EPA was to demonstrate that the
factors support increasing volumes, which they do.
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38 As shown, this does not represent a real increase for biomass-based diesel.
National Renderers Association (NRA)
For biomass-based diesel, we strongly recommend that EPA adopt RFS volume levels of at least
2 billion gallons annually in 2015 and 2016, and 2.3 billion gallons in 2017. The industry has the
ability and capacity to exceed the RFS volumes in the agency's proposal, as demonstrated by the
fact that production has consistently outpaced RFS volumes since the start of the program.
Notably, EPA's proposal would only grow volumes to 1.9 billion gallons by 2017, which is just
slightly higher than the industry's actual production of more than 1.8 billion gallons in 2013.
[EPA-HQ-OAR-2015-0111-2496-A1 p.2]
New Leaf Biofuel, LLC
Between biodiesel, renewable diesel, sugarcane ethanol, and all other advanced fuels, foreign
and domestic, the market is large enough for the EPA to establish a minimum of 1.8 billion
gallons of biomass-based diesel in 2015, with at least 300 million gallon increases in 2016 and
2017. [EPA-HQ-OAR-2015-0111-1909-Al,p.3]
Northern Canola Growers Association
Given the many benefits that it provides, EPA should reconsider the biodiesel standards in the
Proposed Rule and finalize stronger standards, particularly for 2016 and 2017. The biodiesel
industry has previously requested volumes of 2.4 billion gallons in 2016 and 2.7 billion gallons
in 2017. While those volumes are readily achievable and sustainable, particularly with rising
imports, at a minimum EPA should set the standards at not less than 2 billion gallons for 2016
and 2.3 billion gallons for 2017.[EPA-HQ-OAR-2015-0111-2036-A1 p.3]
Biodiesel is an American success story, and we strongly encourage you to continue the
momentum by including these modest volume increases for Biomass-based diesel in the Final
Rule. [EPA-HQ-OAR-2015-0111-2036-A1 p.3]
Phillips 66 Company
The API/AFPM comments construct the argument that EPA is limited to setting the standards for
2014, 2015, and 2016 to no higher than 1.28 billion gallons. In fact, this volume is what EPA
proposed for 2014 and 2015 in the proposed rule published in November, 2013. EPA
acknowledged in that proposal that "the statute requires that we finalize these biomass-based
diesel volume requirements no later than 14 months before the first year for which that volume
requirement will apply." We agree that given the statutory language, EPA cannot increase the
biomass-based diesel standards prior to 2017. [EPA-HQ-OAR-2015-0111-2039-A1 p.2]
Notwithstanding the 14 month lead-time requirement for setting the biomass-based diesel
standard, the proposed BED volume of 1.8 billion gallons in 2016 is more reasonable than the
advanced biofuel standard of 3.4 billion gallons that is likely only achievable through additional,
significant increased volumes of biomass-based diesel. [EPA-HQ-OAR-2015-0111-2039-A1
p.4]
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San Diego Regional Clean Cities Coalition
The San Diego Regional Clean Cities Coalition encourages the EPA increase the biomass-based
diesel volume under the Renewable Fuel Standard (RFS) to production of no less than 2 billion
gallons in 2016 and no less than 2.3 billion gallons in 2017. Low carbon biodiesel from corn oil,
waste greases, and animal fats will make a significant contribution towards California's Low
Carbon Fuel Standard compliance if there is sufficient production and infrastructure. [EPA-HQ-
OAR-2015-0111-1719-A1 p. 1]
Biodiesel is key to meeting our sustainability goals, and a strong RFS is needed to support
continued growth in the industry. SDRCCC encourages EPA to increase the biomass-based
diesel volume standard to the 2016 production level of 2 billion gallons and the 2017 production
level of 2.3 billion gallons. [EPA-HQ-OAR-2015-0111-1719-A1 p. 1]
South Dakota Soybean Association
SDSA urges you to increase the biomass-based diesel volumes for 2016 and 2017 to 2 billion
and 2.3 billion gallons, respectively. [EPA-HQ-OAR-2015-0111-1308-A1 p.l]
I urge you to increase the biomass-based diesel volumes for 2016 and 2017 to 2 billion and 2.3
billion, respectively. [EPA-HQ-OAR-2015-0111-1308-A1 p.2]
Sprague Operating Resources LLC
We ask that you reconsider the biodiesel standards in your May proposal and finalize stronger
standards, particularly for 2016 and 2017. The biodiesel industry has previously requested
volumes of 2.4 billion gallons in 2016 and 2.7 billion gallons in 2017. While we continue to
believe those volumes are readily achievable and sustainable, particularly with rising imports, we
ask now that you set the standards for not less than 2 billion gallons for 2016 and 2.3 billion
gallons for 2017. [EPA-HQ-OAR-2015-0111-1924-A1 p.2]
St. Louis Clean Cities Program
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 49.]
I want to thank you for the most recent proposal. It is a step in the right direction, and it provides
continued growth. But I feel it doesn't go far enough. The proposed increase for '17 is only
slightly higher than the 1.8 billion that was produced in '13. For the final rule, I'm asking that you
increase that to at least 2.4 for '16 and 2.7 for '17, or even more. I know the biodiesel industry
can handle it, not to mention we're seeing sharp increases in imported biodiesel from places like
Argentina that qualify for this RFS. I'd like to ask for some safeguards that gives the U.S.
biodiesel an upper hand over foreign imports. Remember jobs.
U.S. Canola Association (USCA)
EPA should reconsider the biodiesel standards in the Proposed Rule and finalize stronger
standards, particularly for 2016 and 2017. The biodiesel industry has previously requested
volumes of 2.4 billion gallons in 2016 and 2.7 billion gallons in 2017. While those volumes are
readily achievable and sustainable, particularly with rising imports, at a minimum EPA should
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set the standards at not less than 2 billion gallons for 2016 and 2.3 billion gallons for 2017.
[EPA-HQ-OAR-2015-0111-1819-Alp.4]
Unilever
However, we are concerned with the proposal for 2016 as it represents a 14% increase from
projected 2015 biodiesel usage. [EPA-HQ-OAR-2015-0111-2273-A2 p.l]
Union of Concerned Scientists
Our specific recommendations include:
Reduce the growth of bio based diesel (BED) to 30 million gallons (Mgal) in 2015, 29 Mgal in
2016 and 25 Mgal in 2017, consistent with the attached analysis of feedstock growth. [EPA-HQ-
OAR-2015-0111-2260-A1 p.2]
Generally the arguments in section III on the proposed BED volumes are well thought out and
clearly explained. In particular, it is important that a significant portion of the advanced mandate
should be left open to competition, even if current market conditions suggest BED is the most
likely source of additional advanced RIN generation. While the motivation to provide the
biodiesel industry the predictability of a steadily growing mandate is reasonable, the proposed
rate of growth of 100 Mgal a year is too high and gives inadequate consideration to the long term
trends in BED feedstock availability (discussed below). A more sustainable growth rate of 30
million gallons (Mgal) in 2015, 29 Mgal in 2016 and 25 Mgal in 2017, consistent with the
attached analysis of feedstock growth (Brorsen 2015) will provide a baseline rate of stable and
sustainable growth for the BED industry while also providing an incentive to other advanced
biofuel producers and preserving flexibility in case market conditions change. As is discussed
below, a slower rate of growth for BED mandates will not prevent BED from providing a
significant share of advanced biofuels needed to meet the advanced mandate if market conditions
support this, as it has done in recent years.[EPA-HQ-OAR-2015-0111-2260-A1 p.3] [The
commissioned study can be found in docket number EPA-HQ-OAR-2015-0111-2260-A2]
One of the biofuel market dynamics that has emerged clearly over the last few years is the
competition between BED and E85 to provide compliance for advanced and renewable mandates
that cannot be met within E10 blends. This competition has been illuminated by several studies
from Scott Irwin at the University of Illinois published on FarmDocDaily. In light of this
competition between E85 and BED, it seems likely that absent exercise of general waiver
authority, a 2016 renewable mandate of 18 Bgal (the statutory minimum) plus the cellulosic
volume, would result in a dramatic increase the use of biodiesel rather than steady progress on
availability and competitive pricing of higher ethanol blends. As discussed earlier, the supply of
BED is already straining to meet the non-cellulosic advanced mandate, and is clearly insufficient
to increase by a further 667 Mgal to make up for the missing 1 Bgal worth of D6 RINs that
would be required absent exercise of general waiver authority. Such a dramatic increase in the
use of biodiesel would be destabilizing and not supportive of steady growth of fuel production
and distribution capacity over time. In this sense, the availability of additional corn ethanol in the
US is irrelevant if the markets will not support its use as fuel. [EPA-HQ-OAR-2015-0111-2260-
Al p.6]
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Thus EPA is justified in using the inadequate supply argument to reduce the 2016 mandate,
although it is the supply of BED rather than ethanol that is inadequate. EPA should determine
the extent of the general waiver to support the maximum realistic potential use of ethanol in
various blends while limiting spillover that increases demand for BED and other biofuels beyond
available supplies (taking feedstocks into consideration). This should provide fuel market
participants the assurance that as infrastructure to distribute ethanol at cost effective prices is
deployed, EPA will administer the RFS standards in a manner that supports the sale of these
higher blends. EPA's arguments and analysis are generally sound, and quantitatively the
proposal seems quite aggressive in its support for higher ethanol blends. [EPA-HQ-OAR-2015-
0111-2260-A1 p.6]
Western Canada Biodiesel Association
We encourage you to reconsider the biodiesel standards in your May proposal and finalize
stronger standards, particularly for 2016 and 2017. We support the proposal of the US biodiesel
industry for volumes of not less than 2 billion gallons for 2016 and 2.3 billion gallons for
2017. [EPA-HQ-OAR-2015-0111-0265-A1]
Western Dubuque Biodiesel
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 217-219.]
Our company and its 557 local investors is disappointed in the EPA's proposed biodiesel RVO
for 2015 and '16. EPA's most recent proposal is a step in the right direction, provides some
growth for biodiesel, but it does not go far enough. The proposed increase to 1.9 billion gallons
in 2017 is only slightly higher than the biodiesel industry's record production of 1.8 billion
gallons in 2013. For the final rule, I'm asking you for additional growth of at least 2 billion
gallons for 2016 and 2.3 billion gallons for 2017 to account for these added imports.
Place more gallons in the biomass-based category with less in the advanced. This will minimize
the sugarcane imports and provide market certainty for U.S. biodiesel plants.
American Soybean Association (ASA)
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-0143, p.25.]
We are glad that compared to last year's proposal, which called for just 1.28 billion gallons for
2014 and '15, EPA's new proposed rule increases volumes for biomass-based diesel, starting at
1.63 gallons in 2016 and increasing to 1.9 billion in 2017. We see no reason why EPA should not
at a minimum support biomass- based diesel volumes of at least 2 billion gallons for 2016 and
2.3 billion gallons for 2017.
Response:
EPA received a number of comments concerning the level of the 2015-2017 BED volume
requirements. In general, the biodiesel industry and various biodiesel stakeholders believe that
the BED volume requirements should be set higher than what was proposed for each of these
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years and pointed to the continued growth of the industry, the availability of feedstocks, existing
production capacity, the increasing level of imports including Argentinian biodiesel and
Brazilian sugarcane ethanol, threatening the domestic biofuels industry, along with the fact that
there exists no diesel blendwall as reasons for more aggressively setting the standard for BED in
each of these years. The oil industry believes that for 2015 and 2016, EPA is precluded from
setting the BED volume requirement above 1.28 billion gallons due to lack of notice and lateness
of the rulemaking. In addition, industry commenters reiterated their belief that BED should
compete with other advanced fuels and not continue to see increasing set-asides. One
environmental group stated its belief that the impact of growing the BED volume requirement is
that over the last few years there has developed competition between BED and E85 to provide
compliance for advanced and renewable mandates that cannot be met within E10 blends. They
believe that EPA's proposed BED volumes are appropriate and that EPA must continue to ensure
that higher blends of ethanol, such as E85 continue to be part of the response to the blendwall
dilemma. One NGO commenter generally expressed support for the approach to setting the BED
volumes, even though they supported lower volumes than proposed for the BED mandate.
Specifically, they stated that the analysis found in section II of the NPRM was well thought out
and clearly explained. In particular, they supported reserving a significant portion of the
advanced mandate for open to competition, even if current market conditions suggest BED is the
most likely source of additional advanced RIN generation.
EPA acknowledges comments it has received which provide data suggesting that sufficient BED
feedstocks, production facilities, and fuel distribution infrastructure exist to produce, import, and
consume greater volumes of BED in 2016 - 2017 that exceed the volume requirements
established in this rule. EPA believes that the potential available volume of BED in 2016 and
2017 exceeds the BED volume requirements we are finalizing in this rule, and have considered
multiple scenarios where additional volumes of BED are used to comply with the advanced and
total renewable fuel standards. However, we do not believe it is in the best interest of the RFS
program to set the BED volume requirement at the maximum available volume of BED as
suggested by some commenters. Doing so would reduce the opportunity for other advanced
biofuels to compete for market share within the context of the advanced biofuel standard, and
would send market signals that would hinder the long term development of these fuels. Our
review of the history of the RFS program strongly suggests that the advanced and total
renewable fuel standards can provide sufficient incentives for the production and use of
increased volumes of BED beyond levels required to satisfy the BED standard.
EPA also received comments from biofuel industry groups stating that increasing the BED
volume requirement to reflect actual BED available volumes would have the advantage of
helping to ensure that BED, rather than imported sugarcane ethanol, would be used to satisfy the
advanced standard. The commenters claimed that this was preferable because BED does not
contribute to the renewable fuel consumption challenges associated with the E10 blendwall, and
because BED is generally produced in the United States, while sugarcane ethanol is almost
exclusively an imported product. They claimed that requiring additional volumes of a domestic
product rather than an imported one would have positive impacts on the economy of the United
States and aid rural economic development, and that these benefits justified a higher BED
standard.
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EPA acknowledges that if we were to increase the BED volume standard beyond what we are
finalizing today we would increase the guaranteed market for BED, and reduce the likelihood
that additional volumes of sugarcane ethanol might be imported to satisfy the advanced biofuel
standard. We do not however, believe, as one commenter asserted, that increasing level of the
BED volume requirement in recent years means that BED is in competition with E85. In
reviewing the history of the program, as shown above, EPA notes that BED production, import,
and consumption has been strong and increasing each year since 2011. In particular, we note
that in 2013, BED volumes rose sharply, and ethanol imports simultaneously fell and have
stayed low. The reduction in ethanol imports was likely due to a combination of factors including
poor sugarcane harvests, increased demand for sugarcane ethanol in the countries where it was
produced, increased competition for sugarcane ethanol imports from other countries, and
challenges relating to increasing the consumption of ethanol beyond E10 in the US.
The data EPA has presented in section II.E.3 (iii) of the final rule strongly suggests that despite
the ongoing potential for competition from sugarcane ethanol and biodiesel imports, the BED
industry, supported by the advanced and total renewable fuel standards, has achieved and can
continue to achieve production volumes beyond levels needed to satisfy the BED volume
requirement. Given the constraints on ethanol use associated with the E10 blendwall even if
sugarcane ethanol imports were to increase, it is still likely that there would be a strong market
for BED to help satisfy the total renewable fuel requirements. Finally, in light of the broad
programmatic objective of the RFS program to increase the content of biofuels in U.S.
transportation fuel, we believe that it would not only be counterproductive to design the
standards in such a way as to intentionally discourage or disincentivize the import of foreign
biofuels, but also contrary to the statute.
With regard to the commenter suggesting EPA raise the BED volume requirement to the
maximum achievable level, EPA disagrees with this approach. Raising the guaranteed BED
volume beyond the volumes in this rule so that it approaches the maximum possible volume
could result in a less competitive advanced biofuels market, increasing RIN prices, and a less
efficient market-driven renewable fuels program. Our decision today to finalize the BED
volumes for 2016 - 2017 at 1.90 and 2.0 billion gallons per year respectively, would not be
expected to lead to such an adverse result. We believe that the final BED volume increases for
2016-2017 will both contribute to market stability for the renewable fuels program and
continue to promote a growing and competitive advanced biofuels marketplace, one which
encourages the growth and development of diverse biofuels along with additional volumes of
BED beyond the volumes required by the BED standard.
Various commenters expressed concern that the standards would undercut certainty for biodiesel
producers, particularly smaller producers, causing them to have to shut down. While our
standards cannot protect companies from shutting down for the many different reasons
companies close (inefficient, high cost, poor market conditions, unfortunate events, etc.) the final
BED standards provide a floor that provides certainty for greater volumes of BED volumes than
today, and the total renewable fuel and advanced biofuel standards are expected to drive even
higher volumes. As a result, we believe the final RFS standards will create the right market
conditions for biodiesel companies to grow, flourish, and create jobs.
One commenter stated that EPA had incorrectly used the argument for exercising its waiver
authority in determining the volumes of BED and Advanced Biofuels for 2016 and 2017. EPA
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disagrees with this comment. This commenter appears to conflate issues related to setting the
BED standard with those associated with setting the advanced biofuel and total renewable fuel
standards. The RFS standards are nested within each other, with the BED standard being a
subset of the advanced biofuel standard and the advanced biofuel standard being a subset of the
total renewable fuel standard. In exercising our general waiver authority we have set the total
renewable fuel standard at the maximum reasonably achievable level considering all potential
supplies of biodiesel and renewable diesel as discussed in section II.E. of the final rule. Thus,
our final standards already require as much biodiesel and renewable diesel as the market can be
expected to provide. Once the total renewable fuel volumes was set at the maximum reasonably
achievable level, we then assessed what portion of it was appropriate to be met with advanced
biofuels. In exercising our cellulosic waiver authority, we have set the advanced biofuel
standard at the reasonably attainable level considering all the potential supplies of advanced
biodiesel and renewable diesel as discussed in section II.F of the final rule. While the market
can choose to meet the standards in a variety of ways as shown in Table II.G-2. of the final rule,
we anticipate that the vast majority of it will be met with advanced biodiesel and renewable
diesel. Once the advanced biofuel volume was established we then could assess what portion of
it should be mandated to be BED.
One commenter argued that while it was appropriate for EPA to consider exports in setting the
volume requirement for BED in 2014 and 2015, exports of BED should not be considered in
establishing the BED volume requirements for 2016 and 2017. EPA did not consider exports in
setting BED volume requirements for 2016 and 2017. We do not believe that the existence of
biodiesel and renewable diesel overseas, or domestically produced biodiesel and renewable
diesel that is currently being exported to other countries means this fuel is available to the U.S.
As discussed in Section II.E. 3 of the final rule, competing mandates for the use of biodiesel and
renewable diesel in other countries, incentives for the use of these fuels, existing contracts,
limitations on export and import capability, and constraints on the ability of the market to
distribute and use greater volumes of biodiesel and renewable diesel must all be taken into
consideration in determining the available supply of biodiesel and renewable diesel in the United
States in 2016 and 2017. For example, biodiesel and renewable diesel volumes flow back and
forth across the Canadian border in different directions in different locations as a result of the
fact that available supply is on the opposite side of the border for the location where it is required
to be used.
3.4 Consideration of Statutory Factors 470
Comment:
American Soybean Association (ASA)
Biodiesel provides numerous benefits for consumers and society as a whole, including:
-a more diversified energy market increased domestic energy production
-significant reductions in greenhouse gas emissions resulting in improved air quality
-new jobs and economic development, particularly in rural America
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-expanded markets for soybean farmers and a market for soy oil displaced from food markets
due to trans fat issues
-Reduced soy meal feed costs for livestock producers [EPA-HQ-OAR-2015-0111-1818-A1 p. 1-
2] [EPA-HQ-OAR-2015-0111-1043, pp.24-25]
Darling Ingredients Inc.
The Proposed Rule states the six considerations which the EPA is authorized by Congress to
utilize in determining BED volume obligations'. While the Proposed Rule does not directly
address each of the six criteria, it does conclude that BED reduces GHG emissions (criteria #1),
project the expected rate of future commercial production of Biomass Based Diesel at volumes
higher than the volumes in the Proposed Rule (criteria #3), determine that there is more than
adequate infrastructure to distribute volumes exceeding even those proposed by Darling in this
submission (criteria #4), and provide a complete analysis that BED provides renewable fuel at a
cost savings compared to sugar based ethanol (criteria #5). [EPA-HQ-OAR-2015-0111-1929-A1
p.3-4]
American Petroleum Institute and American Fuel & Petrochemical Manufacturers
EPA also has not undertaken an adequate analysis of the six factors specified in CAA section
21 l(o)(2)(B)(ii) for 2014, 2015, 2016 or 2017. Consideration of these factors is a statutory
requirement precedent to revising the applicable volume of biomass-based diesel for years after
2012. EPA should, for example consider such things as impacts on water use, fertilizer run-off
into the Gulf of Mexico, food prices, as well as energy security (in light of the reliance upon
imported fuel). The Agency should also consider land use impacts and whether it is appropriate
to continue to exempt domestically-produced crop-based biofuels like soy-based biodiesel (and
corn-based ethanol) from EISA's land use restrictions especially given recent information
indicating that EPA's assumptions underlying that exemption were incorrect.20 [EPA-HQ-OAR-
2015-0111-1948-p.13]
Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
The statute bars EPA from setting advanced and total volume requirements premised on the
production of a greater volume of biomass based diesel than EPA has found appropriate to
require under Section 7545(o)(2)(B)(ii).
Even if the economy were capable of producing biomass-based diesel in the volumes that would
be needed to comply with EPA's proposed advanced and total mandates, EPA would still be
prohibited from setting volume requirements premised on that level of biomass-based diesel
production. Congress specifically carved biomass-based diesel production out of the general RFS
program for years following 2012, and has required EPA to decide on the "applicable volume" of
biomass-based diesel based on consideration of six specific factors.95 These include factors
evidencing Congress' concern that excessive production may cause environmental harm. For
example, EPA is directed to consider "the impact of the production and use of renewable fuels
on the environment, including on air quality, climate change, conversion of wetlands,
ecosystems, wildlife habitat, water quality, and water supply." Congress also charged EPA to
consider the "impact of the use of renewable fuels on other factors, including job creation, the
price and supply of agricultural commodities, rural economic development, and food prices."
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Likewise, Congress recognized that an excessive biomass-based diesel requirement could cause
economic harm. Thus, Congress directed EPA to consider "the impact of renewable fuels on the
infrastructure of the United States, including deliverability of materials, goods, and products
other than renewable fuel, and the sufficiency of infrastructure to deliver and use renewable
fuel." EPA also must consider "the impact of the use of renewable fuels on the cost to consumers
of transportation fuel and on the cost to transport goods." [EPA-HQ-OAR-2015-0111-2603-A2,
pp.34-35]
Applying these factors and the others listed in the relevant statutory subsection, EPA concluded
that the "applicable volume" of biomass-based diesel for 2016 is 1.63 billion gallons. Having so
determined, EPA cannot then set volume requirements for advanced and total renewable fuels
that contemplate the need for biomass-based diesel in excess of that amount, without regard to
any of the statutory factors. Yet that is exactly what EPA has done - thereby circumventing the
carefully channeled discretion that Congress afforded to EPA in setting biomass-based diesel
volumes in the years subsequent to 2012. [EPA-HQ-OAR-2015-0111-2603-A2, pp.35-36]
95 See 42 U.S.C. § 7545(o)(2)(B)(ii)(I)-(VI).
National Biodiesel Board
Although EPA purports to be providing for annual increases of Biomass-based Diesel, EPA
improperly limits those increases based on factors not provided in the Statute. [EPA-HQ-OAR-
2015-0111-1953-A2 p.25]
Even if EPA somehow now contends that providing (even) more flexibility to obligated parties is
an appropriate consideration, such a consideration clearly cannot be used to trump consideration
of the other factors. It is evident that EPA is essentially concerned with costs versus benefits.
[EPA-HQ-OAR-2015-0111-1953-A2 p.27]
The statute requires EPA to make the determination of the applicable volume for biomass-based
diesel after 2012 based on the factors outlined in Section 21 l(o)(2)(B)(ii). Under that provision,
this determination must be (a) "in coordination with the Secretary of Energy and the Secretary of
Agriculture," and (b) "based on a review of the implementation of the program during calendar
years for which the statute specifies the applicable volumes and on analysis of six listed factors.
80 Fed. Reg. at 33,132; see also Denial of API/AFPM Reconsideration Petitions at 3-4.40 Except
for the minimum requirement of 1 billion gallons, EPA asserts that the statute does not "establish
any other numeric criteria, or provide any guidance on how the EPA should weigh the
importance of the often competing factors, and the overarching goals of the statute when the
EPA sets the applicable volumes in years after those for which the statute specifies applicable
volumes." 80 Fed. Reg. at 33,132. As explained above, Congress did provide guidance on how to
weigh the factors. EPA is to do so in a manner that promotes renewable fuel production for the
particular category of fuel at issue and overall. [EPA-HQ-OAR-2015-0111-1953-A2 p.34-35]
Asserting that biomass-based diesel is "nested" within advanced biofuel, EPA ignores the fact
that Section 21 l(o)(2)(B)(ii) applies to all the mandates for the years not specified in the tables.
Although biomass-based diesel was the first category to be subject to the statutory factor
analysis, there is no indication that Congress intended to have advanced biofuel dictate the
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volumes after 2012. While Congress referenced the applicable volume for advanced biofuel
under Section (o)(2)(B)(i)(II) in (o)(2)(B)(i)(IV)—the biomass-based diesel table, this provision
only applies through 2012. 42 U.S.C. § 7545(o)(2)(B)(i)(IV). Section (o)(2)(B)(ii), on the other
hand, requires EPA to set the volumes for "the purposes of subparagraph (A)." Id. §
7545(o)(2)(B)(ii). Subparagraph (A) requires that EPA ensure "at least the applicable volume"
for biomass-based diesel is met separate from the advanced biofuel and renewable fuel
categories. It is true that biomass-based diesel is an advanced biofuel (and a renewable fuel) and
can be used to fill that category, but this means that Congress did not necessarily intend biomass-
based diesel to always be "nested" within the advanced biofuel category. Moreover, the
advanced biofuel volumes provide room for continued growth and, similarly, are minimum
volumes. As such, it cannot be that Congress intended EPA to compare increasing the biomass-
based diesel category with the potential effect of reducing other advanced biofuels. [EPA-HQ-
OAR-2015-0111-1953-A2 p.35]
In an attempt to bring its new approach within the strictures of the statute, EPA asserts its
"assessment is based in part on our review of implementation of the RFS program to date." 80
Fed. Reg. at 33,137. But, implementation of the program has shown that the biomass-based
diesel industry has been able to make up the gap for lost production of cellulosic biofuel. [EPA-
HQ-OAR-2015-0111-1953-A2 p.36]
Rather it is relying on factors outside the statute based on its purported authority under the
cellulosic biofuel waiver provision. The cellulosic biofuel waiver authority does not give EPA
the authority to reduce the biomass-based diesel volume in light of the reduced cellulosic biofuel
volume, but that is what EPA is essentially doing in declining to further increase the biomass-
based diesel applicable volume where more volumes could be produced and required consistent
with the statutory factors.41 EPA cannot circumvent the requirements of Congress in this manner.
EPA admits as much in noting that "we do not expect our decision to result in a difference in any
of the factors we are required to evaluate pursuant to CAA section 21 l(o)(2)(B)(ii)(I)-(VI)." Id.
Thus, its approach essentially renders the statutory factors meaningless. [EPA-HQ-OAR-2015-
0111-1953-A2p.36]
EPA's new approach essentially renders statutory requirements null and void, which EPA cannot
do. See Whitman v. Am. Trucking Ass 'n, 531 U.S. 457, 484 (2001) ("Whatever effect may be
accorded the gaps in Subpart 2 as implying some limited applicability of Subpart 1, they cannot
be thought to render Subpart 2's carefully designed restrictions on EPA discretion utterly
nugatory once a new standard has been promulgated, as the EPA has concluded."); see also
Sierra Club v. EPA. [EPA-HQ-OAR-2015-0111-1953-A2 p.37]
Even if EPA is correct that consideration of implementation of the program shows that the
advanced biofuel volumes drive higher volumes of biomass-based diesel, EPA has clearly
chosen one factor over the other six factors Congress outlined. Contending it has discretion in
how to weigh each of the factors, EPA's balancing of the statutory factors cannot undermine the
fundamental purposes of the statute. In its Denial of the API/AFPM Reconsideration Petitions,
EPA recognized that the primary considerations in setting the volume are production capacity
and availability of sufficient feedstocks (at 13). EPA increased the required volume from 2012 to
2013 by 280 million gallons because production capacity of the industry far exceeded the
applicable volume, and there were sufficient feedstocks. Indeed, EPA considered this increase to
be "moderate." "While this term is subjective, and may mean different things to different parties,
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EPA continues to believe that it is an appropriate descriptor given the capacity of the industry,
availability of feedstock, and likely reaction of the industry to the guaranteed market provided by
the RFS program." Denial of API/AFPM Reconsideration Petitions at 13. These increases
brought benefits to the rural economy, moved the country closer toward energy security and
independence, and provided greater environmental benefits. Other factors, particularly those
outside the factors Congress specifically identified, cannot outweigh this straightforward
analysis. [EPA-HQ-OAR-2015-0111-1953-A2 p.38-39]
EPA improperly bases its consideration of the factors required as compared to other advanced
biofuels, rather than diesel fuel. [EPA-HQ-OAR-2015-0111-1953-A2 p.46]
Presumably, because its "primary assessment" does not comport with the statutory requirements,
EPA provides "an additional supplementary assessment" that purports to consider each of the
statutory factors listed. 80 Fed. Reg. at 33,137. But, this supplementary assessment similarly is
counter to the Act and, in any event, arbitrary and capricious. [EPA-HQ-OAR-2015-0111-1953-
A2 p.46]
This supplementary assessment is faulty from the start. EPA bases its review of the statutory
factors "on the assumption that in guaranteeing BED volumes at any given level there could be
greater use of BED and a corresponding decrease in the use of other types of advanced biofuels
for years 2015-2017." [EPA-HQ-OAR-2015-0111-1953-A2 p.46]
40 Judicial challenges to the 1.28 billion gallon requirement were voluntarily dismissed, and none was filed
regarding EPA's denial of the petitions for reconsideration of the 2013 biomass-based diesel volume.
Renewable Energy Group, Inc. (REG)
It was noted, however, that the primary considerations in setting the standards are production
capacity and availability of feedstocks. [EPA-HQ-OAR-2015-0111-1952-A1 p.2]
Western Canada Biodiesel Association
The six criteria for biodiesel growth outlined in the RFS statute have clearly been met [EPA-HQ-
OAR-2015-0111-0265-A1]
Response:
A number of commenters asserted that EPA had improperly or inadequately undertaken the
statutory factors analysis and pointed to specific factors that they felt EPA had failed to consider
or had not adequately considered. (Comments on specific factors can also be found in RTC
sections 3.4.3, 7 and 8.) Each of these commenters claim that EPA would have arrived at a
different BED volume requirement for 2016 and 2017 if it had correctly considered various
factors.
EPA believes it properly considered the statutory factors both in the NPRM and in the final rule.
Our primary assessment of the statutory factors set forth in CAA section 211 (o)(2)(B)(ii)(I)-(VI)
is as follows: since we are basing the 2016 advanced biofuel volume of 3.61 billion ethanol
equivalent gallons on our projection of the a reasonably attainable volume of BED (2.1 billion
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gallons - 3.15 billion ethanol equivalent gallons) as well as available volumes of other advanced
biofuels in 2016, we do not expect that the BED volume requirement under CAA section 211
(o)(2)(B)(ii) will be the primary driving factor in the amount of biomass-based diesel actually
produced in 2016. Instead, the advanced and total biofuel volume requirement under CAA
section 211 (o)(2)(B)(i)(I)-(II) will be the driving factor, similar to the way in which other
standards drove production of BED above the 1.28 billion gallon volume in 2013 (see also
section 3.3.1). Given this, there would be no real-world impact of a higher standard for the
volume of biomass-based diesel produced in 2016 and no change in any of the impacts specified
in CAA section 211(o)(2)(B)(ii)(I)-(VI).
However, we also recognized that our expectation regarding use of BED could prove inaccurate.
By increasing the volume requirement to 1.90 billion gallons, there is little doubt that all of that
volume will in fact be achieved. Similarly, were we to increase the standard to require the use of
2.20 billion gallons of biomass-based diesel in 2016, there would be no doubt as to the outcome.
Therefore, we have, as a secondary tier of our evaluation, considered the impacts of offsetting
marginal volumes of other advanced biofuels with marginal volumes of BED. In other words,
assuming that our raising or lowering the applicable volume of biomass-based diesel would in
fact result in greater or lesser use of that fuel type, what would be the impacts of that change and
corresponding change in use of other advanced biofuels? This secondary tier of our analysis,
including a review of each of the statutory factors, is described in Section III.E of the final rule
and is found in a memo to the docket titled," Final Statutory Factors Assessment for 2016-2017
Biomass-Based Diesel (BED) Applicable Volumes". Setting BED volume requirements at a
higher level in 2016, while still at a volume level lower than anticipated overall production and
consumption of BED, is consistent with our evaluation of statutory factors 21 l(o)(2)(B)(ii) (I),
(II) and (III), since we believe that our decision on the BED volume requirement can have a
positive impact on the future development and marketing of other advanced biofuels and can also
result in potential environmental and energy security benefits, while still sending a supportive
signal to potential BED investors, consistent with the objectives of the Act to support the
continued growth in production and use of renewable fuels.
Responding to specific NBB comments on statutory factors analysis:
NBB stated that we improperly based our consideration of the statutory factors on a comparison
of BED to other advanced biofuels, rather than to diesel fuel. They asserted that BED would not
compete with other advanced biofuels because EPA proposed to set the advanced biofuel volume
at maximally achievable levels, and that no competition would be present if all available
advanced biofuels had to be used. They suggested that setting the BED standard at a higher level
than proposed would actually result in BED competing against diesel fuel, and therefore, EPA
should analyze the impacts of displacing diesel fuel with BED. We disagree. In setting the
advanced biofuel volume requirement, we have assumed reasonably attainable volumes in
advanced biofuels. After determining that it is in the interest of the program, as described in
Sections HID. 1-D.3 of the final rule, to set the BED volume requirement at a level below
anticipated BED production and imports, so as to provide continued incentives for research,
development, and commercialization of alternative advanced biofuels, it is apparent that excess
BED above the BED volume requirement will compete with other advanced biofuels, rather than
diesel. The only way for EPA's action on the BED volume requirement to result in a direct
displacement of petroleum-based fuels, rather than other advanced biofuels, would be if the BED
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volume requirement were set larger than the total renewable fuel requirement. However, since
BED is a type of advanced biofuel, and advanced biofuel is a type of renewable fuel, the BED
volume requirement could never be larger than the advanced requirement and the advanced
biofuel requirement could never be larger than the total renewable fuel requirement. Thus, EPA
continues to believe that it is appropriate to evaluate the impact of its action in setting the BED
volume requirements by evaluating the impact of using BED as compared to other advanced
biofuels to determine what increment of the advanced biofuel standard that is not guaranteed to
BED.
NBB also asserted that our analysis of the desirability of setting the BED volume requirement in
a manner that would promote the development and use of a diverse array of advanced biofuels is
prohibited by statute. We disagree with these comments and continue to believe that the
statutory volumes of renewable fuel established by Congress in CAA section 21 l(o)(2)(B)
provide an opportunity for other advanced biofuels (advanced biofuels that do not qualify as
cellulosic biofuel or BED) to be used to satisfy the advanced biofuel standard after the cellulosic
biofuel and BED standards have been met. Because the BED standard is nested within the
advanced biofuel and total renewable fuel standards, when an obligated party retires a BED RIN
(D4) to satisfy their obligation, this RIN also counts towards meeting their advanced biofuel and
total renewable fuel obligations. It also means that obligated parties may use BED RINs in
excess of their BED obligations to satisfy their advanced biofuel and total renewable fuel
obligations. To the extent that obligated parties are required to achieve compliance with the
overall advanced biofuel standard using higher volumes of BED D4 RINs, they forego the use of
other biofuels that qualify as advanced biofuels. Therefore, the higher the BED volume standard
is, the lower the opportunity for other non-BBD advanced biofuels to compete for market share
within the context of the advanced biofuel standard. When viewed in a long-term perspective,
BED can be seen as competing for investment dollars with other types of advanced biofuels for
participation as advanced biofuels in the RFS program.
NBB and others also stated that the consideration of competition within the advanced biofuel
pool between BED and other advanced biofuels, and the potential for lower compliance costs
cited in our proposed rule, are not included in the list of factors in 42 U.S.C. §
7545(o)(2)(B)(ii)(V) that EPA is to consider in establishing the volume requirement for BED.
EPA respectfully disagrees. Three of the factors specified in the statute are indeed related to the
considerations discussed above. The "impact of the use of renewable fuels on the cost to
consumers of transportation fuel and on the cost to transport goods" referenced in CAA
21 l(o)(2)(B)(ii)(V) is relevant, since we believe a diverse advanced biofuel pool will potentially
result in decreased costs associated with the use of advanced biofuels and, consequently,
decreased costs to consumers. Similarly, the "impact of the production and use of renewable
fuels on the environment" referenced in CAA 211 (o)(2)(B)(ii)((I) is relevant, since we believe
that incentivizing research and development in a variety of advanced biofuels could lead to the
development of biofuels that have more benign effects on the environment than those that are
currently available. In addition, "the impact of renewable fuels on the energy security of the
United States" referenced in CAA 21 l(o)(2)(B)(ii)(II) is relevant, since we believe that
incentivizing the development of a diverse array of biofuels will increase energy security.
Furthermore, we note that the list of factors specified in the statute is not exclusive; that is EPA
is not precluded from considering additional factors that advance the statutory objectives when it
sets applicable volumes for years not specified in the statute.
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NBB also states that EPA improperly relied on the cellulosic biofuel waiver provision to reduce
the biomass-based diesel volume in light of the reduced cellulosic biofuel volume. EPA
disagrees with this view. The cellulosic biofuel waiver authority can be used to reduce the total
advanced and the total renewable fuel volumes but EPA acts in accordance with the direction in
the Act to set the BED standard independently of the total advanced standard. EPA also
separately determined what reasonably attainable volumes of BED and other advanced biofuels
would be available for purposes of using the cellulosic biofuel waiver provision to set the
advanced biofuel requirement. Also, the CAA calls for a minimum of 1 billion gallon of BED.
Our standards are higher than that so not only haven't we not reduced the BED, but we have
increased it.
Finally, NBB stated that the EPA previously found statutory factors supported greater annual
increases in BED volume requirement for 2013 and the statutory factors analysis developed to
justify the 2016 and 2017 BED volume requirements contradicts the analysis EPA put forward in
2013. We disagree. As in 2013, we have determined that incremental increases in the 2016 and
2017 BED volume requirement are appropriate to provide continued support to the BED
industry. We did this in 2013, acknowledging the important role the industry thus far had played
in providing advanced biofuels to the marketplace, and in furthering the GHG reduction
objectives of the statute. We did not in 2013, and are not today, setting the BED volume
requirement at the maximum potential production volume of BED.
Responding to Specific Monroe Energy Comments:
Monroe's Energy's comments raised a number of issues regarding the legality of allowing
additional amounts of biomass-based diesel, beyond the mandated level under 21 l(o)(2)(B)(ii).,
to count toward the total advanced biofuels requirement. EPA disagrees with the commenter's
assertion that the biomass-based diesel volume mandate calculated pursuant to CAA
21 l(o)(2)(B)(ii) acts as a ceiling on the amount of BED that can be used to satisfy the advanced
and total renewable fuel volume requirements, or which EPA may determine to be available for
purposes of the exercise of its waiver authorities regarding advanced and total renewable fuel. It
is important to note that the biomass-based diesel volume requirement is nested within both the
applicable advanced biofuel and the total renewable fuel volume requirements, as specified in
CAA §21 l(o)(2)(B)(i) so that any "excess" biomass-based diesel produced beyond the
mandated biomass-based diesel volume can be used to satisfy both these applicable volume
requirements. This is appropriate since CAA section 21 l(o)(l)(B)(ii) broadly defines "advanced
biofuels" as a renewable fuel, other than ethanol derived from corn starch, that has lifecycle
greenhouse gas emissions that are at least 50 percent less than baseline lifecycle greenhouse gas
emissions. The definition goes on to specifically include and list biomass-based diesel as one of
seven types of fuels eligible for consideration as an advanced biofuel. See, also, the broad
definition of "renewable fuel" in CAA 21 l(o)(l)(J). Consequently, the biomass-based diesel
applicable volume that the Agency is required to set is the minimum volume that must be met for
2014, and it is appropriate that we evaluate whether higher quantities of biomass-based diesel
will be available to meet the advanced biofuel and total renewable fuel volume requirements,
which historically, as seen in 2013, have played a significant role in determining the total volume
of biomass-based diesel that has been supplied.
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3.4.1 Advanced Biofuel as the Driver for Biomass-Based Diesel Demand 478
Comment:
Advanced Biofuels Association (ABFA)
In addition to the RFS2, the Low Carbon Fuel Standard (LCFS) in California provides an
additional driver for biomass-based diesel. As with Brazilian ethanol discussed below, LCFS
incentivizes the production or importation of high performing, low GHG fuels. The ICF
International report 'California's Low Carbon Fuel Standard: Compliance Outlook for 2020' (see
Appendix 3) notes in the Executive Summary that:
The diesel sector will likely generate more than its fair share of credits. ICF developed scenarios
that reflect the flexibility of the LCFS guidelines: namely, credits are fungible. It does not matter
if credits are generated using fuels that substitute for gasoline or fuels that substitute for diesel.
Forecasted diesel consumption in California indicates that diesel will generate about 20 percent
of deficits in the LCFS program. However, fuels that substitute for diesel, including biodiesel,
renewable diesel, and natural gas, have the potential to generate 40-5 Spercent of LCFS credits.
[EPA-HQ-OAR-2015-0111-2498-Alp.5]
Response:
With regard to the commenter who asserts that California's Low Carbon Fuel Standard (LCFS)
provides an additional driver for biomass-based diesel that EPA did not consider when weighing
production without the tax credit, EPA disagrees. For this final rulemaking, EPA took into
account a broad range of factors into consideration when developing the biomass-based diesel
mandate. These factors included a consideration of the factors in CAA 21 l(o)(2)(B)(ii)
including the fact that the California's LCFS may create some demand for biomass-based diesel.
3.4.2 Increases in Biomass-Based Diesel Displace Other Advanced, Not Diesel
Comment:
Darling Ingredients Inc.
The second consideration put forward on why Biomass Based Diesel volumes should be limited
is that if the BED is dictated then there would be no incentive for the development of Cellulosic
and other Advanced Fuels. Darling agrees with the EPA's conclusion. The BED mandate should
not represent all of the Advanced Fuel mandate. However, this goal can be met and there can be
an incentive for other Advanced Biofuels. EPA could increase the BED AND increase Advanced
Biofuels volume. That is the reason that Darling is suggesting that Advanced Biofuels should be
increased above the levels proposed by the EPA for 2016 and 2017. The EPA in the Proposed
Rule establishes that it anticipates 200 million gallons of Cellulosic in 2016 and provides for 500
million gallons of Unspecified Advanced in 2016. Darling proposes to increase Advanced
Biofuels by 350 million RTN's in 2016 which would mean an increase of 200 million gallons of
BED (resulting in approximately 310 million RIN's) and the same incentive for development of
Cellulosic would exist as the EPA has in its Current Proposed Rule. The same logic applies for
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Darling's suggested 2017 Advanced Biofuel goal of 4.25 billion RIN's; note the Darling proposal
for 2017 Advanced RIN's slightly increases the available bucket for undifferentiated advanced in
compliance with the aspirational spirit of spurring advanced biofuel production. [EPA-HQ-OAR-
2015-01 ll-1929-Alp.9]
National Biodiesel Board
EPA states that, because biomass-based diesel is nested within the advanced biofuel standard,
"the higher the BED standard is, the lower the opportunity for other non-BBD fuels to compete
for market share within the context of the advanced biofuel standard." 80 Fed. Reg. at 33,135.
EPA ignores, however, that it is EPA's proposed reduction in the statutory advanced biofuel
volume that is limiting the "other" advanced biofuel category, not the increase in biomass-based
diesel. As discussed above, the biomass-based diesel standard is no longer necessarily "nested"
within the advanced biofuel program and, in any event, there is more than enough room under
the statutory volumes to allow for continued growth of "other" advanced biofuels even with
greater increases in biomass-based diesel. Indeed, if EPA does truly believe there is insufficient
supply for the statutory volumes, all EPA has to do, as it should, is increase its proposed
advanced biofuel volumes corresponding to the increase in biomass-based diesel to recognize the
potential for additional "other" advanced biofuel. In other words, EPA should determine the
advanced biofuel in an additive manner, collecting information on potentially available supply of
"other" advanced biofuel on top of the potential available supply of biomass-based diesel.
Although NBB believes it is irrelevant that the "other" advanced biofuel volume might shrink
when assessing the biomass-based diesel volumes, this argument must fail. Congress created the
biomass-based diesel category for a reason, not to keep biomass-based diesel in the more general
pool competing with fuels in other markets. [EPA-HQ-OAR-2015-0111-1953-A2 p.39]
The problem with EPA's assumption is that the diesel fuel market is distinct from the gasoline
market. The "competition" EPA is purporting to support likely would only be for sugarcane
ethanol, which is the other main contributor to the advanced biofuel market aside from biodiesel.
Sugarcane ethanol gallons, as well as any ethanol gallons from other feedstock sources, are used
in gasoline and not in the distillate fuel markets. These are not the same markets, and EPA's
"competition" is based on a false market of "advanced biofuels." In describing the constraints on
ethanol use, EPA has recognized the gasoline market involves different legal, policy and
practical restrictions that are not implicated in the diesel fuel pool. The gasoline market is also
larger than the diesel fuel market, while the diesel fuel market services a broader category of
uses, including heating oil. EPA estimates gasoline use in 2015 to be 138.37 billion gallons
compared to 56.77 billion gallons of diesel fuel. EPA, Calculation of % standards for 2014,
2015, and 2016, EPA-HQ-OAR-2015-0111-0005. It cannot be said that these fuels are
"competing" with each other due to these distinct markets and market forces. Indeed, it is these
market forces that Congress was trying to affect in imposing a greater mandate than EPA is
apparently willing to implement. [EPA-HQ-OAR-2015-0111-1953-A2 p.39]
EPA also fails to identify any "other" advanced biofuel that the biomass-based diesel program is
negatively affecting. EPA asserts that increasing the biomass-based diesel volume would affect
other advanced biofuels, including sugarcane ethanol; ethanol from grain sorghum, food waste or
cover crops; renewable diesel from food waste or cover crops; renewable naphtha from food
waste or cover crops; CNG/LNG from non-cellulosic sources; and cellulosic biofuel. EPA Mem.,
Assessment of Statutory Factors for 2015-2017 biomass-based diesel (BED) Applicable
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Volumes pursuant to CAA section 21 l(o)(2)(B)(ii)(I)-(VI) at 2 (EPA-HQ-OAR-2015-0111-
0008). As noted above, this is a false assumption since they are not all replacements for each
other. Like ethanol, Naphtha is also largely used in the gasoline market. CNG/LNG from non-
cellulosic sources require retrofits or special vehicles to use, and, thus, are not easily diesel fuel
replacements. The markets for these fuels also are very different than the diesel fuel market in
which biomass-based diesel is used, including heating oil. Again if EPA would like to promote
these other advanced biofuels then it must do so by increasing the advanced biofuels program
volume, rather than unreasonably limiting the biomass-based diesel program. [EPA-HQ-OAR-
2015-01 ll-1953-A2p.40]
Shockingly, EPA asserts: "Increasing the BED standard above 1 billion gallons, as we did in
2013, reduces the potential market for other advanced biofuels to contribute towards meeting the
advanced biofuel standard. Conversely, reducing the cellulosic biofuel standard while
simultaneously maintaining the advanced biofuel standard (or reducing it by a lesser amount), as
we have done each year since 2010, increases the potential market for other advanced biofuels."
80 Fed. Reg. at 33,135. This is shocking because, unlike biomass-based diesel, cellulosic biofuel
has not fulfilled the expectations of Congress. It also is shocking because it appears to be a
complete 180? turn from its prior findings where EPA recognized that increasing the biomass-
based diesel volume has been able to make up for the gap left by the lack of production of
cellulosic biofuel to "ensure" the statutory advanced biofuel volumes are met and the sought
after GHG emissions reductions, among other benefits, realized. While in Table IV.D.1-1 EPA
attempts to show that the biomass-based diesel category is unnecessary, the implementation of
the program shows it has been vital to ensuring the total advanced biofuel volumes are met. For
the first several years the biomass-based diesel category has allowed the industry to meet "at
least" the total advanced volumes despite the reduced cellulosic biofuel volume. It is only in
increasing biomass-based diesel volumes in the future will the statutory volumes for advanced
biofuel even come close to becoming a reality. [EPA-HQ-OAR-2015-0111-1953-A2 p.40-41]
Moreover, EPA is simply wrong. Biomass-based diesel volumes can increase, while other
advanced biofuels continue to enter and grow in the market. In 2013, EPA increased the
minimum applicable volume for biomass-based diesel by 280 million gallons. The biomass-
based diesel industry actually increased production from 2012 by over 600 million gallons, and
there was enough production of biomass-based diesel to meet 99 percent of the advanced biofuel
category. The same concerns about increased RIN prices were heard then. Yet, based on EMTS
data, 44 biogas production went from 2.9 million ethanol-equivalent gallons to almost 26 million
from 2012 to 2013. Naphtha similarly went from 0 to over 3.4 million ethanol-equivalent
gallons. Production of renewable diesel with D5 RINs also increased from 12 million gallons to
41 million gallons. Thus, when EPA retained the statutory volume for advanced biofuel and
increased the biomass-based diesel volume, there was excess advanced biofuel production and
newer fuels entering the market.45 The program was working and, as such, the actual
implementation of the program, then, belies EPA's assumption. [EPA-HQ-OAR-2015-0111-
1953-A2p.41]
EPA has advanced no evidence that other advanced biofuels have been, or would be, in any way
"crowded out" by an expansion of U.S. biomass-based diesel production and consumption. As
such, it provides no explanation why it should change that trend except to purportedly create a
more "efficient" market system (which is really the RIN market that EPA appears to truly care
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about). Again, this is a consideration outside those identified by Congress. [EPA-HQ-OAR-
2015-0111-1953-A2p.41]
Although renewable diesel generating D5 RINs is also used in the diesel market,46 it cannot be
said that increasing the biomass-based diesel volume will necessarily reduce use of those
volumes. There is no limit on the amount of biomass-based diesel than can be used or blended in
the diesel fuel market, nor is there a limit in the amount of D5 renewable diesel that could be
used. In fact, EPA does not explain why both biomass-based diesel and D5 renewable diesel—a
"drop in" fuel—could not be used in conjunction with one another, particularly as refiners move
toward co-processing with renewable biomass. Thus, EPA's premise that increasing the biomass-
based diesel volume will necessarily replace another advanced biofuel is incorrect. Nor does it
make sense when EPA is also lowering the advanced biofuel volume to a level below the
potential availability of both biomass-based diesel and D5 renewable diesel. Rather than
unreasonably limiting the usage of both biomass-based diesel and D5 renewable diesel EPA
should be striving to grow both volumes at least to the statutory volumes for advanced biofuel
(and even total renewable fuel). [EPA-HQ-OAR-2015-0111-1953-A2 p.41-42]
In any event, there is ample room in the diesel fuel market to accommodate both D4 biomass-
based diesel and D5 renewable diesel fuel. According to the numbers used by EPA to set the
2015 standards, diesel fuel makes up 29 percent of the total transportation fuel market subject to
the RFS2. The biomass-based diesel volume is only at 2.9 percent of this diesel fuel market (not
including heating oil), compared to the 9.66 percent of renewable fuel in the gasoline market (as
estimated by EPA). Increasing the biomass-based diesel volume to 2 billion gallons would still
only be 3.5 percent of the diesel fuel market. In fact, as noted above, the diesel fuel market is
expected to continue to grow for several more decades.47 See, supra, n.2. Thus, there is more
than ample room to bring additional renewable fuel into this market. The issue remains if they
can be competitive, not with each other, but with petroleum-based fuels. As noted, Congress
wanted to eliminate this concern in setting the mandates. It is wholly arbitrary for EPA to decline
to increase the biomass-based diesel volume further based on some false notion of competition in
an artificial "advanced biofuel" market. [EPA-HQ-OAR-2015-0111-1953-A2 p.42]
EPA previously recognized that the statutory factors were intended to ensure increased
renewable fuel use compared to diesel fuel. For the 2013 biomass-based diesel volume, EPA
looked at the benefits of increasing biomass-based diesel as a replacement for diesel fuel. 77 Fed.
Reg. at 59,469-59,483. This is consistent with the statute that sought to increase use of renewable
fuel, which is defined as fuel "used to replace or reduce the quantity of fossil fuel." 42 U.S.C. §
7545(o)(l)(A), (J). [EPA-HQ-OAR-2015-0111-1953-A2 p.46]
The volumes are a floor not a ceiling. As such, the volumes should be additive, not creating a
ceiling and pitting one advanced biofuel over another, as EPA has proposed. As noted above, the
factors could warrant biomass-based diesel eclipsing the advanced biofuel statutory volumes
(which it did in 2011). Given the purposes of the statute, it cannot be that Congress intended
EPA to compare increasing the biomass-based diesel category with the potential effect of
reducing other advanced biofuels. [EPA-HQ-OAR-2015-0111-1953-A2 p.47]
Even if EPA were properly trying to utilize its cellulosic biofuel waiver authority to address both
advanced biofuels and biomass-based diesel, it is not following its own purported standard. For
determining adequate domestic "supply," EPA contends that it is seeking to set the volumes at
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the "maximum achievable" amount. But, "competition" by definition requires a choice between
two or more options which ends up excluding one or more viable options. "Maximum" by
definition requires the inclusion of all viable options and necessitates that nothing is excluded.
Thus, competition (an EPA idea) cannot be an objective where EPA is purporting to use a
standard of "maximum" achievability when evaluating available supply of the categories in
which biomass-based diesel is purportedly "nested." [EPA-HQ-OAR-2015-0111-1953-A2 p.47]
"At the margin, increased biodiesel production has used distillers corn oil or waste grease
feedstocks." [EPA-HQ-OAR-2015-0111-1953-A2 p.49]
[National Biodiesel Board presented testimony at the Kansas City, Kansas public hearing on
June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, pp. 23-25.]
Thank you for your recent efforts to get the RFS program back on schedule and growing and for
your approach in proposing to set category targets at maximum achievable volumes. It's a
common sense approach that was abandoned on the biomass-based diesel category. You stated
that - that where you set those volumes doesn't matter because production will ultimately be
driven by the total advanced category. You also acknowledge Congress intended for biomass-
based diesel to have its own category and that increasing that category can add confidence and
stability. But you proposed small increases in '16 and '17, stating that these volumes will serve as
a minimum. It is inconsistent to propose maximum achievable volumes for all categories in the
program, but only minimum volumes for biomass-based diesel. Your concern over competition
among non-cellulosic advanced biofuels can be addressed by increasing D4s and D5s by the
same amount. You proposed 1.8 billion gallons for 2016. We hit that in 2013. We can easily
supply 2.4 billion gallons in '16, but it would be unreasonable for you to set it below 2 billion
gallons in 2016.
43 See EPA-HQ-OAR-2010-0133-0159 at 27-29. In its recent notices, EPA has not appeared to identify,
pennycress, camelina or carinata (all of which are used or can be as rotational crops), which are being developed for
biofuel use, as "annual cover crops."
44 This is based on EPA's EMTS data, RIN Generation and Renewable Fuel Production by Fuel Type for 2012 and
2013, data are current as of July 10, 2015.
45 Indeed, for 2014, when EPA first proposed not to increase the biomass-based diesel volume and to reduce the
advanced biofuel volume, production of biogas and renewable diesel dropped from the 2013 levels.
46 As with the reference to cover crops, EPA does not identify the food waste that is being used to produce
renewable diesel. We consider, however, the D5 RINs that have been reported as generated through EPA's EMTS
data.
47 EPA's calculations for the 2015 and 2016 standards show an increase in transportation fuel use from 2014. EPA-
HQ-OAR-2015-0111-0005. For 2016, gasoline consumption appears to be lower than in 2015, based on EPA's
estimates, yet overall transportation fuel use still increases due to the increases in diesel fuel consumption. Id.
Renewable fuel use in diesel fuel, however, appears to be lower than in 2014. Id.
Response:
Darling Ingredients agrees with EPA that the BED standard should not be set in such a way as to
fill the entire non-cellulosic portion of the advanced biofuel volume requirements. However,
they suggest that both the BED volume requirement and the advanced biofuel volume
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requirement could be increased. As discussed in more detail in Section 2.5 of the RTC, we have
determined that increases in the volume requirements for both advanced biofuel and BED in
comparison to the proposed volumes are warranted.
NBB suggests that EPA can raise the BED standard without taking up the whole advanced
standard. NBB adds that there is more than enough room under the statutory volumes to allow
for continued growth of "other" advanced biofuels even with greater increases in biomass-based
diesel standard. EPA is raising both the advanced biofuel and the BED standards in comparison
to the proposed volumes in this RFS rule making. In doing so we have preserved roughly the
same space for other advanced biofuels under the advanced biofuel standard that we had for the
proposal in order to allow the growth of "other" advanced biofuels. We acknowledge that there is
sufficient room in the diesel pool for greater volumes of biodiesel and renewable diesel.
NBB further recommended that EPA should determine the advanced biofuel in an additive
manner, collecting information on potentially available supply of "other" advanced biofuel on
top of the potential available supply of biomass-based diesel. NBB suggested that all BED be
accounted for, and then EPA should just add all the rest of the available supply of advanced
biofuels on top of that in setting the RFS renewable fuel volumes. As the commenter suggests,
we have set the total renewable fuel standard at the maximum reasonably achievable level,
taking into consideration potential supply of all renewable fuels, including advanced biofuels and
biodiesel. We have set the advanced biofuel standard at the reasonably attainable level taking
into consideration various factors, including the available supply of all those advanced biofuels
used in determining the total renewable fuel standard. We have set the BED standard at a level
that will ensure growth in BED volumes, while still preserving space under the advanced biofuel
standard for other advanced biofuels to grow.
NBB goes on to suggest that the EPA fails to identify any "other" advanced biofuel that the
biomass-based diesel program is negatively affecting. NBB said it disagrees with EPA's
assertion that increasing the biomass-based diesel volume would affect other advanced biofuels,
including sugarcane ethanol; ethanol from grain sorghum, food waste or cover crops; renewable
diesel from food waste or cover crops; renewable naphtha from food waste or cover crops;
CNG/LNG from non-cellulosic sources; and cellulosic biofuel. The commenter states that this is
a false assumption since they are not all replacements for each other. Like ethanol, naphtha is
also largely used in the gasoline market. CNG/LNG from non-cellulosic sources require retrofits
or special vehicles to use, and, thus, are not easily diesel fuel replacements. The markets for
these fuels also are very different than the diesel fuel market in which biomass-based diesel is
used, including heating oil. We disagree with the commenter. To the extent that the BED
standard takes up almost all or all of the whole advanced biofuel standard, this would limit the
ability of other advanced biofuels to compete in fulfilling the advanced standard. This would
send a signal to the marketplace to limit investment in the development and production of
"other" advanced fuels besides BED, hindering the benefits of the RFS program particularly over
the long term.
NBB argues that there is no competition between BED and other advanced biofuels that are used
in the gasoline market, namely ethanol. While the legal, policy, and practical issues are different
for renewable fuels used in the diesel pool versus those used in the gasoline pool, and thus for
BED versus advanced ethanol, nevertheless these two categories do compete with one another
given that they are both potential ways of complying with the advanced biofuel standard. That is,
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more of one fuel results in less of a need for the other fuel. As described in the NPRM, we
determined that such competition is an important element of ensuring that renewable fuel
volumes grow as intended by the statute:
"In this proposed rule we have worked to achieve an appropriate and reasonable
balance between setting volume requirements that would provide support for
biofuels that are more established, while also providing opportunities under those
volume requirements for emerging biofuels." (80 FR 33102
It is appropriate for us to consider this balance between the volume requirement for BED,
which guarantees minimum market demand for advanced biodiesel and renewable diesel,
and other advanced biofuels, because we are making reductions to the statutory target for
advanced biofuel under the cellulosic waiver authority. Since this waiver authority does
not specify the factors we must consider, we can and have considered not only volumes
of different forms of advanced biofuel that can be supplied, but also the GHG impacts of
those fuels, and our responsibility to continue to help the advanced biofuel industry as a
whole to grow.
NBB asserts that increasing the BED volume requirement provides greater assurances
that the advanced standard can be met by providing the biodiesel industry with
assurances of a fixed market, reducing uncertainty and enabling that industry to plan and
grow. NBB also points to EPA's final rulemaking setting the BED standard of 1.28 bill
gal for 2013, in which we said:
"If we do not set the biomass-based diesel standard above 1.0 billion gallons,
biodiesel producers will be less certain of the demand for their product given the
opportunities that are also created by the advanced biofuel standard for imported
sugarcane ethanol... Thus in setting the biomass-based diesel volume
requirement at 1.28 billion gallons rather than at the statutory minimum of 1.0
billion gallons, we are creating greater certainty for both producers of biomass-
based diesel and obligated parties and increasing certainty that the intended GHG
emissions reductions and energy security benefits associated with the use of
advanced biofuels will be realized." (77 FR 59462).
However, circumstances for 2016 are different than they were in 2012 when the 2013 BED
standard was set. At that time, we believed that the biodiesel industry was motivated primarily
by the BED standard and less by the advanced biofuel standard. However, the biodiesel industry
supplied considerably more volume in 2013 than the BED standard required, strongly suggesting
that the BED standard itself play a minor role, and that the advanced biofuel and total renewable
fuel standards played a larger role in providing the market assurances needed for the biodiesel
industry to increase supply. Moreover, biodiesel successfully competed with other advanced
biofuels, primarily imported sugarcane ethanol, for access to that portion of the advanced biofuel
standard that was not required to be cellulosic biofuel or BED (the "undifferentiated volume" of
824 mill gal), supplying more than the minimum 1.28 bill gal of BED required.
Based on these results, the concerns expressed by EPA in the quotes above no longer carry the
same weight. While we continue to believe that it is important to support growth in the BED
industry, we also believe that the BED industry will be motivated more by the advanced biofuel
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and total renewable fuel standards and do not believe that we should support the growth of the
BED industry at the expense of other advanced biofuel industries. As a result, it is appropriate to
ensure opportunities for other advanced biofuels as described in RTC Section 3.3.1.
For further discussion of comments related to how BED competes with other advanced biofuels,
see RTC Section 3.3.1.
For responses to comments suggesting that the El0 blendwall can be addressed by increasing the
required volumes of BED, see RTC Section 2.5.
3.4.3 Comments on Specific Statutory Factors
Comment:
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
Biodiesel is known to increase tailpipe NOx emissions, an ozone precursor, from diesel
engines.128 Consequently, EPA's proposal to increase the biomass-based diesel standard by over
48% from 1.28 billion gallons in 2013 to 1.9 billion gallons in 2017 will make efforts to meet
ozone NAAQS standards more difficult for state and local air quality planners. If ozone
standards are further tightened in the future, the air quality impact of biodiesel relative to other
sources could become even more significant. [EPA-HQ-OAR-2015-0111-1948-A1 p.56]
128 See, for example:
• US Environmental Protection Agency, A Comprehensive Analysis of Biodiesel Impacts on Exhaust
Emissions, EPA420-P-02-001, October 2002
• Coordinating Research Council, Investigation of Biodiesel Chemistry, Carbon Footprint and Regional Fuel
Quality, CRC Report No. AVFL-17a, January 2011
• California Air Resources Board, NOx Emission Impacts of Biodiesel Blends,
http ://www. arb. ca. gov/fuels/diesel/altdiesel/meetings/20141024Lyons Statistics.pdf
Bates White
As result of advances in biodiesel production with the increased ability to use low-carbon
footprint feedstocks, such as waste greases, animal fats, and distiller's corn oil, biodiesel
currently reduces CO2 emissions by 81 percent, compared with petroleum diesel. While the
biodiesel accounts for only 3 percent of total U.S. petroleum diesel consumption, biodiesel
reduced U.S. CO2 emissions by over 16 million tons in 2014, equivalent to eliminating 3.6
million cars. If U.S. biodiesel volumes were to grow by 350 million gallons annually, by 2025, it
would still amount to less than 9 percent of U.S. diesel consumption, but it would provide 18
percent of the entire transportation sector's share of the U.S. commitment to reduce CO2
emissions. The cost-effectiveness of biodiesel as a means of reducing CO2 emissions can be
measured as a difference between the cost to produce biodiesel and the wholesale price of
petroleum diesel. In recent years, this cost differential has narrowed as a result of investments in
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processing technology and production capacity. In 2011, the cost of using biodiesel to reduce
CO2 emissions was approximately $158 per avoided ton of CO2 emissions. By 2014, this cost
had declined by 78 percent to $34 per ton of CO2. These estimates are highly conservative, as
they do not account for biodiesel's substantial other benefits, from energy security and reduced
particulate emissions. Although this cost of reducing CO2 emissions increased in 2015, this was
not due to increased biodiesel production costs, but rather to a sharp decline in world petroleum
prices. And as petroleum prices recover, the cost of using biodiesel to reduce CO2 emissions will
drop back to their 2014 level or below. The recent rapid growth of biodiesel as a low- carbon
alternative fuel represents a major success of the RFS2 program. In 2010 at the start of RFS2, the
U.S. produced only 340 million gallons of biodiesel. By 2013, it produced fully 1.4 billion
gallons. While biodiesel was almost an afterthought in the initial RFS policy formulation, the
industry's response has resulted in a widely available product that contributes significantly to
U.S. CO2 reduction goals while also promoting retail competition at the pump.
Crimson Renewable Energy LP
Also, the six criteria for biodiesel growth outlined in the RFS statute have clearly been met. The
benefits are clear in terms of cost-effective pollution reduction, job creation, tax revenues and
energy security.
We have already seen what happens when there biodiesel market become artificially constrained
due to EPA actions —investment stops, plants close down, people lose jobs, and the lowest
carbon fuels are affected first, and more dramatically. It is EPA's job to ensure that there is a
growing market for advanced biofuels, including biomass-based diesel. This RFS Proposal does
not do that. [EPA-HQ-OAR-2015-0111-1823-Al p.2-3]
Darling Ingredients Inc.
The other two criteria which are not specifically addressed are criteria 2 and 6. While it is
incontrovertible that incremental production of BED is consistent with criteria #2, which calls
for the renewable fuels to increase the energy security of the United States, it is interesting to
note the EPA failed to take the clear guidance of Congress into consideration in its recent ruling
allowing Argentinian Biodiesel to meet less stringent supervisory standards than those required
for U.S. producers of BED. The EPA did not directly address criteria 6 and has consistently
failed to take into consideration the increasing importance of BED for the U.S. agricultural
market (Darling previous submission). [EPA-HQ-OAR-2015-0111-1929-A1]
National Biodiesel Board
The impact of the production and use of renewable fuels on the environment, including on air
quality, climate change, conversion of wetlands, ecosystems, wildlife habitat, water quality, and
water supply.
It also attempts to argue that its assessment considers the "future development and marketing of
non-BBD advanced biofuels" under factor (III), id, but this factor considers expected annual rate
of future commercial production." 42 U.S.C. § 7545(o)(2)(B)(ii)(III). [EPA-HQ-OAR-2015-
0111-1953-A2p.36]
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As further evidence that EPA is not reading the factors as Congress intended, EPA also states its
determination "can also be seen as sending a supportive or nomupportive signal to potential
investors in BED." Id. (emphasis added). Under EPA's own explanation, therefore, its new
approach ignores the directives of Congress and undermines the purpose of the statute. [EPA-
HQ-OAR-2015-0111-1953-A2 p.36]
EPA references its assessment of supply in Section II.C. of the preamble as its discussion of the
expected annual rate of future commercial production. But, this assessment discusses the need to
reduce the statutory volumes due to constraints on ethanol. In capping the purported supply of
advanced biofuel based on constraints on ethanol, EPA then contends it must balance between
providing a market for advanced biofuels and providing "support" for the biomass-based diesel
industry. EPA-HQ-OAR-2015-0111-0008 at 6. EPA further inexplicably states that this
"approach does not limit additional BED production." Id. [EPA-HQ-OAR-2015-0111-1953-A2
p.53]
As explained above, increasing the biomass-based diesel volume eases the pressure of any
purported ethanol blend wall, and, thus, even if there were such a thing, this factor would
indicate that there would be a drop in expected annual rate of future commercial production of
ethanol advanced biofuels. Rather than require EPA to limit biomass-based diesel to allow for
competition with these fuels, this factor requires EPA to increase the biomass-based diesel
volume to compensate. Applying any potential limitations on ethanol use to the entire advanced
biofuel program does, in fact, negatively impact the ability of the industry to participate in the
program. Indeed, based on EPA's own contentions, if the advanced biofuel volume is the driver
for biomass-based diesel, and EPA is reducing the advanced biofuel volumes based on concerns
with respect to ethanol use, this is limiting the amount of additional biomass-based diesel that
would likely be produced. EPA is not allowing the amount that can be produced, rather it is
setting a lower number that it thinks the obligated parties will tolerate. But that is not consistent
with the statute. [EPA-HQ-OAR-2015-0111-1953-A2 p.53]
Water Quality and Water Supply. EPA again finds that the other advanced biofuel that might
replace soybean oil biomass-based diesel are likely to have impacts on water quality and water
supply which are comparable to those of soy-based biomass-based diesel. Given the relatively
small amount of these other biofuels, EPA does not find this factor to provide a good reason for
setting a higher or lower nested volume requirement. Id. As with the other considerations, this
renders the entire analysis Congress required pointless. Moreover, EPA identifies no assessment
of these issues for these other biofuels by which the public can assess the accuracy of this
conclusory statement. Again, EPA admits that its proposal would allow other advanced biofuels
with similar impacts on water supply and water quality as soybean oil biodiesel, but then asserts
that certain advanced biofuels "will have little or no impact on water quality and water supply,"
and keeping the biomass-based diesel volume down would provide a "continuing incentive" for
further development and marketing of such fuels. Id. Again, EPA simply makes a conclusory
statement. [EPA-HQ-OAR-2015-0111-1953-A2 p.51]
While soybean oil has not been found to have significant impacts on water quality or water
supply, EPA also ignores that increasing the biomass-based diesel volume requirement supports
use of other feedstocks, including waste oils. For example, certain of the feedstocks approved for
biomass-based diesel are used as rotational crops which, in fact, allow for less use of fertilizer
and pesticides and help retain moisture, reducing water needs. As noted, soybeans are not grown
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for the oil and, as such, any purported impacts are likely to occur without any increases in
biomass-based diesel volumes. Again, it makes little sense to compare the impacts of certain
advanced biofuels over others. They are, by definition, advanced biofuels, and Congress wanted
them all in the market.[EPA-HQ-OAR-2015-0111-1953-A2 p.51]
Wetlands, Ecosystems and Wildlife Habitats. EPA finds that the other advanced biofuel that
might replace soybean oil biomass-based diesel are likely to have impacts on wetlands,
ecosystems, and wildlife habitats which are roughly comparable to those of soy-based biomass-
based diesel. Given the relatively small amount of these other biofuels, EPA does not find this
factor to provide a good reason for setting a higher or lower "nested volume" requirement. Id.
Similar to the air quality analysis, this renders the entire analysis Congress required pointless.
Moreover, EPA identifies no assessment of these issues for these other biofuels. For example,
EPA does not explain how sugarcane produced in more sensitive ecosystems in Brazil than
soybean oil in the United States would not have a greater impact on wetlands, ecosystems and
wildlife habitats. While soybean oil has not been found to have significant impacts on wetlands,
ecosystems and wildlife habitats, EPA also ignores that increasing the biomass-based diesel
volume requirement supports use of other feedstocks, including waste oils. For example, canola
used as a rotational crop has been identified as serving as habitat for wildlife. [EPA-HQ-OAR-
2015-01 ll-1953-A2p.50]
Again, EPA admits that its proposal would allow other advanced biofuels with similar impacts
on wetlands, ecosystems and wildlife habitats as soybean oil biodiesel, but then asserts that other
advanced biofuels are not made directly from crops and "would therefore likely have
significantly lower impacts on wetlands, ecosystems, and wildlife habitats than soy biodiesel,"
and keeping the biomass-based diesel volume down would provide a "continuing incentive" for
further development and marketing of such fuels. As an initial matter, there is simply no support
to state that a feedstock from a crop will necessarily have "significantly [higher] impacts" than
other feedstocks. Getting CNG/LNG to market, for example, likely requires newer and greater
infrastructure than soybean oil, resulting in land use impacts. Moreover, soybeans are not grown
for the oil and, as such, any purported impacts are likely to occur without any increases in
biomass-based diesel volumes. Regardless, it is utterly counter to Congressional intent that EPA
(and even proponents of certain biofuels) be required to undergo the process of comparing the
impacts of certain advanced biofuels over others. They are, by definition, advanced biofuels, and
Congress wanted them all in the market. [EPA-HQ-OAR-2015-0111-1953-A2 p.50]
c. Wetlands, ecosystems and wildlife habitats.
EPA does not present any new information regarding the potential impacts of increased
biodiesel production on wetlands, ecosystems, and wildlife habitats. As an initial matter, EPA
continues to find that cropland in the United States is on the decline. Thus, as NBB has
continually maintained, there is no evidence of land use impacts as a result of increased biofuel
production.58 As was noted by scientists at Oak Ridge National Labs, the findings in the draft
report relied on by EPA in assessing these impacts for the 2013 volume "about what is occurring
or could possibly occur" is contradicted by the actual data on land use and environmental
changes in the United States since 2001 during the period of rapid biofuel expansion. [EPA-HQ-
OAR-2015-0111-1953-A2 p.63]
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Improved farming practices generally reduce the potential impacts of agricultural production. See
NBB Comments on Draft Report to Congress at 26-40 (EPA-HQ-ORD-2010-1077-0022);
H2O'C Engineering, Water Quantity and Quality Issues Related to Biodiesel, at 5 (2010)
(Attachment 6 to NBB Comments on 2012 RFS, EPA-HQ-OAR-2010-0133-0159). This is
unlike the impacts that continue to occur as a result of runoff from developed land. NBB
Comments on Draft Report to Congress at 26-40 (EPA-HQ-ORD-2010-1077-0022). In
particular, studies have shown that, where soybeans are grown, sediment and phosphorus is ten
times greater from non-agricultural land than from agricultural land. Id. at 43-44. Biofuel
production gives the rural economy additional incentives not to convert their lands for purposes
of development. The American Farmland Trust has found that the United States loses nearly 50
acres of farmland every hour. American Farmland Trust, Farmland.,
https://www.farmland.org/our-work/areas-of-focus/farmland (last visited July 26, 2015). This
loss of valuable farmland is due to the economic hardships faced by farmers and pressures to
convert productive land into shopping malls, parking lots, and subdivisions. This trend has a
devastating impact on ecology, and habitat, including but not limited to high peak surface water
discharge rates, decreased perennial flow, and decreased groundwater recharge as a result of
increased impervious surfaces. These disrupted stream flows also carry high concentrations of
chemical pollutants and excess nutrient loads from industrial, and residential sources including
lawn fertilizers and leaking or ineffective sanitary sewers. The Natural Resource Conservation
Service (NRCS) and others have established that developed land contributes significantly more
to nutrient loading of streams than agricultural land. NBB Comments on Draft Report to
Congress at 16 (EPA-HQ-ORD-2010-1077-0022). [EPA-HQ-OAR-2015-0111-1953-A2 p.63-
64]
While biodiesel helps make rotational farming of soybeans more economically sustainable, that
economic benefit does not drive expansion beyond the historical footprint of row crop
agriculture. In addition the RFS2 land use restrictions on renewable biomass, existing laws,
regulations, and basic economic principles already result in restraining U.S. agriculture to its
historical footprint. Federal requirements administered through the USDA's NRCS and the Farm
Service Agency provide many barriers to farmers who might otherwise expand production of
commodity crops onto lands that do not have a historical record of crop production. Some of
these restrictions are known as the Sodbuster and Swamp Buster provisions of the Food Security
Act of 1985. Those requirements specifically limit conversion of wetlands, grass lands, or highly
erodible soil. Farmers ignoring these requirements forfeit the benefit of USD A programs for crop
assistance, and are also unlikely to receive crop insurance on new ground. The ability to secure
crop insurance on land with a prior history of farming and the inability to secure crop insurance
on new land is a significant barrier to planting crops on new land. These factors combine to
restrain soybean production to the previously established footprint of row crop agriculture in the
United States. [EPA-HQ-OAR-2015-0111-1953-A2 p.64]
Conservation practices continue to be adopted by U.S. farmers with increased effectiveness in
protecting soil health, reducing impacts to water quality and enhancing wildlife habitat and
biodiversity. A trend in the implementation of conservation practices is to target specific areas to
achieve optimum gains. The strategic pairing of conservation practices alongside production
agriculture provides the optimum balance of environmental stewardship while producing food
for the world and maintaining agriculture as the economic backbone of this country. The
environmental benefits of biodiesel and advanced biofuels and the economic benefits of the
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RFS2, which enhance the conservation efforts in rural communities, are reasons why the
National Association of Conservation Districts supports the RFS2 and why the association leader
of 3,000 locally led conservation districts warned that adoption of EPA's November 2013
proposal to reduce advanced biofuels would be a step back in ongoing conservation and
environmental efforts. EPA-OAR-2013-0479-3945. Recognizing that the United States has the
most efficient farming practices and the most advanced commitment to conservation reminds us
that the United States should retain its leadership role in production agriculture. [EPA-HQ-OAR-
2015-01 ll-1953-A2p.64]
Moreover, there are significant land use impacts of petroleum production, including loss of
critically important land and wetland areas. NBB Comments on Draft Report to Congress at 50-
51 (EPA-HQ-ORD-2010-1077-0022); see also Jason Dearen and Jennifer Kay, New Hunt for oil
in Florida raises environmental concerns, The Washington Post, July 25, 2015,
http://www.washingtonpost.com/national/energv-environment/new-hunt-for-oil-in-florida-raises-
environmental-concerns/2015/07/25/86bb5432-32e6-l Ie5-a879-213078d03dd3story.html
("Renewed hunts for oil in sensitive Florida ecosystems have environmental groups raising
questions about the state's regulation of the oil and gas industry."); Mark Schleifstein, Wetlands
loss linked to Outer Continental Shelf oil and gas pipelines in new study. The Times-
Picayune, Oct 5, 2009,
http://www.nola.com/business/index.ssf/2009/10/wetlandslosslinkedtoouter.html. These losses
could be avoided with increased use of biofuels, particularly as new crops are being developed
that can be used as rotational crops or that can be used during fallow periods that provided
benefits to the primary crops, including improving moisture and protections against pests. [EPA-
HQ-OAR-2015-0111-1953-A2 p.64-65]
A key difference between the assessment conducted by EPA for the 2013 volume from today is
the increased use of waste fats, oils and greases for biodiesel production. As noted above, these
feedstocks, including distillers corn oil, now account for about half of U.S. biodiesel production.
EPA recognized that increasing use of corn oil from dry mill ethanol plants will reduce the
"potential agricultural impact of biodiesel production." 77 Fed. Reg. at 59,474. It also found that
"waste fats, oils and greases are expected to have negligible environmental impact as a feedstock
since they do not impact agricultural land use and would otherwise be used for some lower value
purpose or simply discarded." Id.
Deliver ability of Materials, Goods, and Products Other Than Renewable Fuels. EPA states that
it does not anticipate any significant impacts on deliverability of materials of other renewable
fuels "that might result from devoting a larger or smaller portion of the advanced biofuel
standard to BED." EPA-HQ-OAR-2015-0111-0008 at 6. [EPA-HQ-OAR-2015-0111-1953-A2
p.53]
While EPA's finding is correct, its ultimate conclusion that this "factor does not provide a basis
for selecting any particular BED applicable volume" is not. Id. This analysis shows that
additional increases are possible without negative impacts. The program is not at the statutory
volumes analyzed by EPA. As such, further increases in biomass-based diesel can be done and
should be required, thereby allowing greater increases in the advanced biofuel volume. Thus,
even if this factor does not provide a basis for any specific volume, it does support additional
increases than proposed by EPA. [EPA-HQ-OAR-2015-0111-1953-A2 p.53-54]
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EPA's supplemental analysis also purports to consider job creation and rural economic
development, price and supply of agricultural commodities and food prices related to proposed
increases in the biomass-based diesel applicable volume. EPA-HQ-OAR-2015-0111-0008 at 8-
10. For each, however, EPA continues the fallacy that the renewable fuels industry is a zero sum
game. In so doing, it simply finds that these factors are a wash because there would be offsetting
impacts. This again illustrates why EPA's consideration cannot be what Congress had in mind.
[EPA-HQ-OAR-2015-0111-1953-A2p.55]
EPA also focuses on soybean oil, as opposed to recognizing the ability of the industry to expand
its use of other feedstocks. As further explained below, each of these considerations supports
continued, and greater, increases in biomass-based diesel requirements. [EPA-HQ-OAR-2015-
0111-1953-A2p.55]
The expected annual rate of future commercial production of renewable fuels, including
advanced biofuels in each category (cellulosic biofuel and biomass-based diesel). [EPA-HQ-
OAR-2015-0111-1953-A2 p.69]
The largest growth in advanced biofuel production has been in biomass-based diesel. EPA has
found that increasing the biomass-based diesel standard "will provide more certainty that the
applicable volume of advanced biofuel set forth in the statute will not need to be reduced." 77
Fed. Reg. at 59,462; see also 76 Fed. Reg. at 38,874; 77 Fed. Reg. at 59,483. As described
above, increases in biomass-based diesel are necessary to meet the advanced biofuel volume
requirements, as cellulosic biofuel production continues to lag behind the statutory levels. [EPA-
HQ-OAR-2015-0111-1953-A2 p.69]
To be sure, obligated parties are likely to argue that the ethanol blend wall is a changed
circumstance from EPA's prior assessment, affecting prices and diesel supply. We address these
specious claims in response to their petitions for a waiver. In any event, limits on the ability to
produce and use ethanol only supports substantially increasing the required volumes for biomass-
based diesel. [EPA-HQ-OAR-2015-0111-1953-A2 p.69]
EPA admits that the "wider use of any advanced biofuels, including BED and sugar cane or
sorghum ethanol, diversify the U.S. liquid fuel mix and provide energy security benefits." EPA-
HQ-OAR-2015-0111-0008 at 5. As such, EPA simply asserts that the supplemental analysis
"does not appear to suggest a distinct energy security advantage associated with selecting any
particular BED applicable volume." Id. at 5-6. Again, EPA's supplemental analysis lacks any
actual analysis. Rather it is a mere conclusory statement based on the fallacy that increasing the
biomass-based diesel requirement will only shift the advanced biofuels used. [EPA-HQ-OAR-
2015-01 ll-1953-A2p.52]
Instead, increasing the biomass-based diesel requirement will "diversify the U.S. liquid fuel mix
and provide energy security benefits" in allowing for greater advanced biofuel volumes.53
"While securing accessible and affordable feedstock is a challenge to the industry, the range of
different feedstocks serves as a strength to an industry that is working to diversify transportation
fuel choices." E2 2014 Advanced Biofuel Report at 17; see also Denial of API/AFPM
Reconsideration Petitions at 15-16 ("Energy security does not solely relate to the amount of
imported oil but also to the ability of the U.S. to diversify and rely on domestic sources of energy
to meet the energy needs of the U.S. ... Creating a new fuel supply that has a different, and likely
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reduced, probability of disruptions provides an energy security benefit because it reduces
'financial and strategic risks caused by potential sudden disruptions in the supply of imported
petroleum to the U.S.'"). [EPA-HQ-OAR-2015-0111-1953-A2 p.52]
It cannot be disputed that increased use of biodiesel promotes energy security, and biodiesel
production and use will contribute to a U.S. energy security benefit. See, e.g., 76 Fed. Reg. at
38,869 77 Fed. Reg. at 59,470-59,471. Biodiesel plays a major role in expanding domestic
refining capacity and reducing this country's reliance on foreign oil. In addition, biodiesel is an
extremely efficient fuel that creates 5.5 units of energy for every unit of fuel that is required to
produce the fuel. [EPA-HQ-OAR-2015-0111-1953-A2 p.68]
As stated by the EPA, a higher applicable volume "will assure an increased use of biomass-based
diesel in the U.S. and help to improve U.S. energy security. Reducing U.S. petroleum imports
and increasing the diversity of U.S. liquid fuel supplies lowers both the financial and strategic
risks caused by potential sudden disruptions in the supply of imported petroleum to the U.S." 77
Fed. Reg. at 59,470. Further, EPA recognized "[e]nergy security does not solely relate to the
amount of imported oil but also to the ability of the U.S. to diversify and rely on domestic
sources of energy to meet the energy needs of the U.S. ... Therefore, 'regardless of the
incremental effect of this proposal on net imports, increasing the diversification of the U.S. and
global diesel fuel pools would likely confer some reduction in the severity of a future potential
disruption in the world oil market.'" Denial of API/AFPM Reconsideration Petitions at 15
(citation omitted). [EPA-HQ-OAR-2015-0111-1953-A2 p.68]
When analyzing the 2013 biomass-based diesel volume, EPA found 280 million gallons of
biodiesel equals about 255 million gallons of diesel equivalent. Based on analysis of historical
and projected future variation in U.S. petroleum consumption and imports, EPA estimated that
approximately 50 percent of the reduction in fuel consumption resulting from adopting
renewable fuels is likely to be reflected in reduced U.S. imports of refined fuel, while the
remaining 50 percent is expected to be reflected in reduced domestic fuel refining. Of the latter,
90 percent was anticipated to reduce U.S. imports of crude petroleum for use as a refinery
feedstock, while the remaining 10 percent was expected to reduce U.S. domestic production of
crude petroleum. EPA then estimated each gallon of fuel saved due to the RFS reduces total U.S.
imports of petroleum by 0.95 gallons, providing approximately $0.15/gallon benefit. 77 Fed.
Reg. at 59,470-59,471. The 300 million gallon increase proposed by NBB would provide at least
$42.75 million in additional energy security benefits. [EPA-HQ-OAR-2015-0111-1953-A2 p.68]
53 Soybean oil remains a significant feedstock for the U.S. biodiesel industry, and "U.S. farmers
planted a record 85.1 million acres of soybeans this year." Mark Ash, Oil Crops Outlook (July
14, 2015), available at http://www.ers.usda.gov/media/1869335/ocsl5g.pdf; see also id. at Table
3. Canola oil and animal fats also represent significant feedstocks used for biodiesel production,
and the use of corn oil from ethanol production and of recycled greases has substantially
increased since 2010. See EIA, Monthly Biodiesel Production Report, With Data for December
2012, Tables 3 and 3a (Feb. 2013); EIA, Monthly Biodiesel Production Report, With Data for
April 2015, Tables 3 and 3a (June 2015), available at
http://www.eia.gov/biofuels/biodiesel/production/. Certain of these feedstocks continued to
increase in 2014.
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EPA's supplemental analysis also purports to consider job creation and rural economic
development, price and supply of agricultural commodities and food prices related to proposed
increases in the biomass-based diesel applicable volume. EPA-HQ-OAR-2015-0111-0008 at 8-
10. For each, however, EPA continues the fallacy that the renewable fuels industry is a zero sum
game. In so doing, it simply finds that these factors are a wash because there would be offsetting
impacts. This again illustrates why EPA's consideration cannot be what Congress had in mind.
[EPA-HQ-OAR-2015-0111-1953-A2p.55]
EPA also focuses on soybean oil, as opposed to recognizing the ability of the industry to expand
its use of other feedstocks. As further explained below, each of these considerations supports
continued, and greater, increases in biomass-based diesel requirements. [EPA-HQ-OAR-2015-
0111-1953-A2p.55]
As outlined in LMC International, The Economic Impact of the Biodiesel Industry on the U.S.
Economy (Nov. 2013) (Attachment 10), there are substantial direct and indirect economic
benefits from increasing the volume obligation for biomass-based diesel. Although EPA refers to
biodiesel as one of the "existing successful biofuels" fuels that it must "support," 80 Fed. Reg. at
33,102, the biomass-based diesel industry is relatively new compared to ethanol and, certainly,
the petroleum industry. [EPA-HQ-OAR-2015-0111-1953-A2 p.74]
As with many young industries, there will be job opportunities created with the increased
development and deployment of advanced biofuels. Jobs associated with advanced biofuel
production include temporary construction jobs for facilities, permanent production employees,
and numerous employees for research and development. There is also substantial potential for
job creation along the supply chain, including in feedstock development and distribution. [EPA-
HQ-OAR-2015-0111-1953-A2 p.74]
The impact of the use of renewable fuels on the cost to consumers of transportation fuel and on
the cost to transport goods. [EPA-HQ-OAR-2015-0111-1953-A2 p.71]
For the 2013 volume, EPA found that the 1.28 billion gallon mandate translated into a per gallon
cost over the diesel pool of between $0.006 and $0.008. 77 Fed. Reg. at 59,479. EPA provides
cost estimates in the new proposal, which translate into purported increases in per gallon costs of
approximately $0.004 per gallon for 2015 and $0.008-$0.011 per gallon for 2016. Although
obligated parties continue to claim that the requirement to use renewable fuel is resulting in
increased costs to the consumer, this is simply incorrect. In fact, the program has resulted in
providing the public with an alternative fuel source at a lower cost. Each gallon of RFS2-
qualified biodiesel is accompanied by a RIN credit. The value of that credit, which is traded on
the open market, is factored into the value of each gallon of biodiesel. This added value allows
biodiesel to be sold at a lower price to fuel distributors or fleet managers, who can then pass
along savings to consumers.59 [EPA-HQ-OAR-2015-0111-1953-A2 p.71]
Testimony at the June 25, 2015 hearing support this finding. Michael Whitney of Musket Corp.,
which provides diesel fuel through Love's Travel Stops directly to consumers, testified that "we
put biodiesel in our fuel because it is cheaper than diesel," and that RINs help his company
obtain additional revenue to reduce the prices at the pump. [EPA-HQ-OAR-2015-0111-1953-A2
p.71]
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Based on EPA's diesel fuel estimate use for those years in "Calculation of % standards for annual rulemaking"
(EPA-OAR-2015-0111-0005).
58 The RFS2 itself restricts the use of new lands for production of crops, such as soybeans, for biodiesel production,
and decisions regarding planting of soybean acres are largely based on demand for livestock feed and other uses. If
soybean oil was not used for biodiesel production, soybeans would continue to be produced to satisfy this demand.
59 See Terminal Pricing Sheet (Attachment 3).
National Renderers Association (NRA)
The process of rendering animal byproducts sequesters about four times as much CO2e as it
emits, creating a significant net carbon credit. CO2, methane and other GHG emissions from
natural decomposition in a compost pile or landfill are avoided
Rendered animal fats and used cooking oil/grease are rich (76 percent carbon on average) in
recycled carbon which, when used as feedstocks for biomass based diesel, can contribute
significantly to biomass-based diesel's reduced CO2 emission level compared to that of
petroleum diesel.
Northern Canola Growers Association
Well beyond the canola and agricultural sector, biodiesel provides numerous benefits for
consumers and society as a whole, including:
-significant reductions in greenhouse gas emissions resulting in improved air quality [EPA-HQ-
OAR-2015-0111-2036-A1 p.2]
Phillips 66 Company
With respect to logistics, biodiesel is transported from the production facilities via truck or rail
car to the product terminals for blending with petroleum distillate. A 30% increase in the
blending requirement at the terminals, and thus a 30% increase in the truck/rail car unloading,
may be problematic at some locations. Biodiesel blending capability does not exist at every
product terminal. The 2014 biomass-based diesel volume of 1.63 billion gallons is approximately
3% of the transportation diesel demand. Rather than every terminal blending 3% biodiesel into
the diesel, fewer terminals typically blend at 5% (with some limited higher volumes). Continued
mandated increases in biomass-based diesel volumes will require expansion of blending
infrastructure, which will necessitate capital expenditures and time to complete. One of the
criteria that EPA is required to evaluate in setting the biomass-based diesel standard is the
sufficiency of the infrastructure to deliver renewable fuel. Absent the evaluation, it is difficult to
ascertain if existing terminal blending could increase by 30% from the historical maximums
experienced in 2014 or whether infrastructure expansion would be required. [EPA-HQ-OAR-
2015-01 ll-2039-Alp.4-5]
Renewable Energy Group, Inc. (REG)
The steady growth of biodiesel use has allowed blending and distribution infrastructure to
increase at a steady pace to meet increasing demand. Biodiesel is distributed utilizing the
existing fuel distribution infrastructure with blending occurring at both fuel terminal and "below
the rack" by fuel jobbers. Biodiesel is also being distributed through the petroleum terminal
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system. Retail locations offering biodiesel and biodiesel blends have also expanded dramatically.
As of March 2015, there were at least 2,168 public locations where biodiesel is available.
National Biodiesel Board, Biodiesel Industry Overview & Technical Update, Mar. 2015,
http://biodiesel.org/docs/default-source/ffs-basics/biodiesel-industry-and-technical-
overview.pdf?sfvrsn=12 (noting availability of biodiesel at 1,088 retailers, 469 truck stops, and
611 distributors). Currently, the two largest travel centers in the U.S. have consistently increased
their biomass-based diesel blending capabilities and now have over 500 blending locations where
fuel is blended with biodiesel in concentrations up to 20% (B20). These blends are offered to
fleet and other diesel consumers for use in existing engines. Blends of B20 are typical in many
markets, biodiesel is readily available, cheaper than diesel and allows B20 blends to be
competitively priced to conventional petroleum diesel fuel. In fact, it is more common to see
biodiesel blends in the market over 5% (B5), especially with state incentives for higher blends
(Iowa, Illinois, Minnesota, Texas). See U.S. Department of Energy, Alternative Fuels Data
Center, Search Federal and State Laws and Incentives (Biodiesel), available at
www.afdc.energ.gov. [EPA-HQ-OAR-2015-0111-1952-A1 p.2]
But, there are more blending and distribution capabilities available in the market with more than
2,500 travel center locations in the U.S. serving the over the road trucking industry
(http://trucker.com/truck/stops). The continued development and evolution of biodiesel
blending in the travel center industry indicates there is room for increasing consumption of
biodiesel in the market thereby supporting higher RVO volumes for biomass based diesel.
[EPA-HQ-OAR-2015-0111-1952-Alp.3]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, p. 51.]
In fact, the two major travel centers in the U.S. have more than 500 locations combined across
the country where they provide blends of up to B20. And with a number of State incentives for
blends of B5 to Bl 1 and higher, we see more infrastructure growth ahead.
The George Washington University
The literature is mixed on the environmental effects of biofuel production, with many estimates
indicating that the production of ethanol and biodiesel may significantly increase emissions,
specifically of the greenhouse gases carbon dioxide (CO2) and nitrous oxide (N2O) and criteria
pollutants such as particulate matter.
U.S. Canola Association (USCA)
Since biodiesel provides a greenhouse gas benefit compared to the petroleum-based diesel it is
replacing, increasing its use will contribute to reduced climate change impacts. [EPA-HQ-OAR-
2015-0111-1819-Alp.2]
Response:
Comments on Statutory Intent:
NBB highlights various excerpts from the NPRM which discuss the proposed BED volume
requirement and the statutory analysis to argue that EPA's approach to the statutory factors
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analysis ignores Congressional intent and undermines the purpose of the statute. We disagree and
believe that our final rule is consistent with statutory intent and appropriately sets BED volume
requirement for 2014-2017. As we noted in the section III.A of the final rule, the statute does
not establish numeric criteria or provide guidance on how the EPA should weigh the importance
of the various factors along with the overarching goals of the statute. As discussed in Section
HID. of the final rule, the BED volume requirement is nested within both the advanced biofuel
and the total renewable fuel volume requirements; so that any BED produced beyond the
mandated BED volume can be used to satisfy both these other applicable volume requirements.
The result is that in considering the statutory factors we appropriately consider the potential
impacts of increasing BED in comparison to other advanced biofuels. Greater or lesser
applicable volumes of BED do not change the amount of advanced biofuel used to displace
petroleum fuels; rather, increasing the BED applicable volume may result in the displacement of
other types of advanced biofuels that could have been used to meet the advanced biofuels
volume requirement.
Therefore, EPA's approach was to review the implementation of the program to date, undertake
an assessment of the factors found in CAA 21 l(o)(2)(B)(ii) (I)-(VI), and coordinate with DOE
and USD A, as required by the statute. EPA's primary assessment of the statutory factors for
years 2014 is that given the fact that the 2014 compliance year has passed, we believe that our
action in setting the 2014 BED volume requirement will result in no real-world impacts,
including no impacts with respect to the factors listed under CAA section 21 l(o)(2)(B)(ii)(I)-
(VI). As discussed in section III.E.l of the final rule, we believe the assessment is the same for
the 2015 BED volume requirement, since this rule will be issued too late to influence the market
in 2015. For 2016-2017 our primary analysis for this rule is that because the final advanced
biofuel volume requirements reflects the advanced biofuel volumes (including BED) that can be
reasonably attained, and because the BED requirement is nested within the advanced biofuel
volume requirement, we expect that the advanced volume requirements for 2016-2017 will
determine the level of BED supplied to the marketplace; the same volume of BED will likely be
supplied regardless of the BED volume that we require for any given year. As a result, there
will be no real world impacts, including no impacts with respect to the factors listed under CAA
section 21 l(o)(2)(B)(ii)(I)-(VI), in EPA's establishment of BED applicable volumes for 2016
and 2017. EPA also undertook a supplemental analysis based on the assumption that our
decision with respect to the BED applicable volume could make a difference in the amount of
BED and other advanced biofuels used to meet the advanced biofuel standard. This analysis,
including a review of each statutory factor, is described in in a memorandum to the docket,
entitled, "Final Statutory Factors Assessment for 2016-2017 Biomass-Based Diesel (BED)
Applicable Volumes." As a result of our analyses we conclude that there does not appear to be a
good reason for setting a higher or lower volume standard for BED than 1.90 billion gallons in
2016, and 2.0 billion gallons in 2017. The reasons EPA has decided to finalize those volume
requirements is described in the preamble.
Below we respond to comments submitted on various statutory factors. Sections 7 and 8 of the
RTC also contain additional responses to comments on issues contained in the statutory factors.
Interested parties may also review the Final Statutory Factors Assessment memorandum found in
the docket for this rulemaking.
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Comments on Increasing BED Volumes to Address the Ethanol Blendwall:
NBB argues that the statutory factors require that EPA increase the BED volume to compensate
for the blendwall issues. They state that increasing the biomass-based diesel volume eases the
pressure of any purported ethanol blend wall, and that if, as EPA contends, the advanced biofuel
volume is the driver for biomass-based diesel, and EPA is reducing the advanced biofuel
volumes based on concerns with respect to ethanol use, this is limiting the amount of additional
biomass-based diesel that would likely be produced. EPA disagrees with NBB's suggestion that
the statutory factors require that EPA increase the BED volume to compensate for the blendwall
issues. We also disagree with their assertion that we are reducing the advanced biofuel volume
due to ethanol blendwall constraints and therefore limiting the amount of BED that might
otherwise be produced and used. The E10 blendwall and the amount of ethanol that can be
consumed is only one factor in assessing the maximum reasonably achievable volume for the
total renewable fuel standard, and is unrelated to our assessment of the maximum achievable
volume of biodiesel and renewable diesel for the total renewable standard as discussed in section
HE. of the final rule. It is also not a factor that limits the portion of the total renewable fuel
volume that is advanced biofuel. Advanced biofuel volumes are set at a level we have
determined to be reasonably attainable.
In fact, for 2016 and 2017, in recognition of the important role that BED plays in the RFS
program and to provide continuing support for the industry, as well as to help ensure that higher
volume requirements for advanced biofuel can be reached, we are increasing the BED volume
requirement for each year to 1.9 and 2.0 billion gallons, respectively. However, we also believe
that it is of ongoing importance that opportunities for other types of advanced biofuel, such as
renewable diesel co-processed with petroleum, renewable gasoline blend stocks, and renewable
heating oil, as well as others that are under development be incentivized and expanded. We
believe establishing the volumes at these levels will encourage BED producers to manufacture
higher volumes of fuel that will contribute to the advanced biofuel and total renewable fuel
requirements, while also leaving considerable opportunity within the advanced biofuel mandate
for investment in and production of increasing volumes over time of other types of advanced
biofuel with comparable or potentially superior environmental or other attributes.
Comments on Infrastructure Impacts of Increasing BED Volumes:
We received a number of comments regarding the ability of the current infrastructure to
accommodate the proposed increases in BED volume requirements for 2015-2017. One oil
industry commenter indicated that logistics associated with a 30% increase in the blending
requirement may be problematic at some terminal locations. They explained that since biodiesel
is transported from the production facilities via truck or rail car to the product terminals for
blending with petroleum distillate, a 30% increase in the blending requirement at the terminals,
and thus a 30% increase in the truck/rail car unloading, may be problematic at some terminal
locations and that biodiesel blending capability does not exist at every product terminal. Biofuel
industry stakeholders, including NBB, commented that the steady growth of biodiesel use had
allowed blending and distribution infrastructure to increase at a steady pace to meet increasing
demand. They noted that biodiesel is distributed utilizing the existing fuel distribution
infrastructure with blending occurring at both fuel terminal and "below the rack" by fuel jobbers.
In addition, they stated that biodiesel was also being distributed through the petroleum terminal
system and that retail locations offering biodiesel and biodiesel blends had expanded
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dramatically. As of March 2015, they stated there were at least 2,168 public locations where
biodiesel is available. These commenters stated that there would not be any significant impacts
on deliverability of materials at the levels of BED volumes that EPA had proposed, and they
asserted that in fact the statutory analysis demonstrated that additional increases in the BED
volume requirement were possible without negative impacts on infrastructure.
In finalizing the BED volume in 2016 and 2017 at 1.9 and 2.0 billion gallons, respectively, after
assessing a variety of factors EPA believes that these volume requirements are justified. We
believe that the distribution system that we expect to be in place for 2016 and 2017 is able to
address the level of BED volumes we are finalizing in this rule. We also acknowledge that there
continues to be distribution and constraints associated with the overall level of BED that can be
distributed in the U.S. at this time and these constraints informed our decision on the final levels
of BED volume that are reasonably attainable for 2016-2017 under the advanced biofuel volume
requirement and overall maximum achievable level of biodiesel and renewable diesel under the
total renewable fuel requirement. In our assessment of the distribution capabilities found in
section II.E.3.iv-v of the final rule, we t acknowledge that biodiesel cannot currently be
distributed through most pipelines due to contamination concerns with jet fuel, and often requires
specialized storage facilities to prevent the fuel from gelling in cold temperatures.
Another factor potentially constraining the supply of biodiesel is the number of terminals and
bulk plants that currently distribute biodiesel. Transportation of biodiesel to and from the
terminals and bulk plants is also an important consideration. In lieu of pipeline transport,
biodiesel currently relies primarily on rail car, barge, and especially tanker truck fleets for
distribution from production and import facilities to blending terminals and bulk plants. Due to
the unique properties of biodiesel, such transport typically has required the use of
heated/insulated tanks, especially in winter to keep the product from gelling or freezing. This
requirement for specialized equipment further limits the speed at which biodiesel distribution can
grow. The net result is that the expansion of terminals and bulk plants selling biodiesel and
biodiesel blends, and the distribution infrastructure necessary to transport biodiesel to and from
these facilities may be one of the biggest challenges facing the rapid expansion of biodiesel.
This is an area in which the biodiesel industry has made steady progress over time, and we
anticipate that this steady progress can and will continue into the future, particularly with the
ongoing incentive for biodiesel growth provided by the RFS standards. As with many of these
potential supply constraints, however, increasing the biodiesel distribution capacity will require
time.
For biodiesel blends we also expect that refueling infrastructure (e.g. refueling stations selling
biodiesel blends) will be a limiting factor in 2016. Biodiesel is typically distributed in blended
form with diesel fuel as varying blends from B2 up to B20. Biodiesel blends up to and including
B20 can be sold using existing retail infrastructure. Expanding the number of refueling stations
offering biodiesel blends is therefore constrained less by the retail facilities themselves, and more
by the lack of nearby wholesale distribution networks that can provide the biodiesel blends to
retail.
Based on currently available information, biodiesel blends greater than B5 are still only available
in a very small fraction of possible refueling locations. Of the approximately 4,800 truck stops
nationwide, and the approximately 50,000 diesel retail stations, USDA data shows that just 717
stations offer biodiesel in blends of B20 of greater, and NBB's website shows just 1090 biodiesel
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stations of all types nationwide, though in their comments they reference a higher number of
2,168 public locations. While the number of refueling stations offering higher level biodiesel
blends is relatively small, the fact that diesel sales volumes in the United States are dominated by
truck stops and the very large centrally fueled fleets, suggests that expanding the refueling
infrastructure for these biodiesel blends (B5-B20) will be relatively straightforward as
production and distribution allow. The biggest challenge may be the reluctance of retailers and
fleets to switch to biodiesel blends due to concerns over fuel quality, vehicle warranties, liability,
or other factors.
Section II. E.3.iv-vii in the final rule provides a comprehensive discussions of the infrastructure
and distribution situation in the U.S. today and constraints associated with the overall level of
BED that can be distributed in the U.S. at this time.
Comments on Supplemental Analysis Regarding Job Creation and Rural Economic
Development, Price and Supply of Agricultural Commodities and Food Prices:
NBB commented that EPA's supplemental analysis with regard to job creation and rural
economic development, price and supply of agricultural commodities and food prices related to
proposed increases in the biomass-based diesel applicable volume is incorrect because EPA's
analysis finds that there are offsetting impacts with regard to other advanced biofuels and
therefore concludes that these factors are a wash. EPA disagrees that our assessment is incorrect.
As noted elsewhere, it is appropriate to consider the impacts of variations in the BED volume
requirement as potentially leading to greater or lesser displacement of other advanced biofuels.
In finding no advantage to use of BED with respect to these factors as compared to the use of
other advanced biofuels, EPA appropriately considered the potential impacts of its decision in
setting the BED applicable volume. . Sections 7.2., 7.7 and 7.8 discuss additional comments
received on the impacts of the BED volume requirements and the statutory factors analysis with
regard to job creation, rural economic development, agricultural commodities and food price
issues. See also the Memorandum to docket: "Final Statutory Factors Assessment for 2015-2017
BED Applicable Volumes".
Comments on Cost to Consumers of Transportation Fuel:
Regarding biodiesel, the NBB believes that EPA overestimated the cost of additional biodiesel
volumes. They claim that "the program has resulted in providing the public with an alternative
fuel source at a lower cost", and they provided documentation of a testimony in which a diesel
provider claims to use biodiesel because it's cheaper than diesel fuel.
These and other commenters, along with commenters on RIN prices and retail fuel prices
discussed in Sections 7.5 and 7.6, tend to confuse prices with the costs of the RFS program to
consumers. Biodiesel has lower energy content than the diesel fuel it replaces by about 10%, but
the real issue in the comments is that the commenters are ignoring the distortionary impact of the
RIN. The RIN from the RFS program is reducing the price of biodiesel blends and increasing the
price for diesel fuel in the marketplace, but that doesn't mean that biodiesel is costing consumers
less. One needs to look at the costs to produce and deliver to market renewable fuels without the
distortionary impact of the RIN on their prices to assess the overall cost. If one does this it is
obvious that biodiesel costs considerably more than the diesel fuel it displaces on a per gallon
basis. Section 7.8 provides a discussion on the issue of biodiesel cost.
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Comments on Feedstocks Availability:
NBB commented that the EPA focuses only on soybean oil, as opposed to recognizing the ability
of the BED industry to expand by using other feedstocks. In support of its position, NBB
provided new data that they argue suggests that sufficient BED feedstocks existed to produce,
import, and consume volumes of BED in 2016 - 2017 that exceed the volume requirements
established in the proposed rule. A number of other commenters also provided EPA additional
new studies which discussed feedstock availability issues with regard to BED. This information
is discussed in section II.E.3-4 of the final rule. While these studies provide differing
assessments of feedstock availability, on the whole, the EPA acknowledges that the supply of
oils, fats, and greases that are suitable feedstocks for biodiesel and renewable diesel production
are likely to continue to grow over time. However, much of these sources have already been
tapped to a considerable degree due to their favorable economics. As a result, much of the
growth in volume in the future is likely to also be derived from virgin vegetable oil feedstocks
(e.g., soy oil and canola oil) in the U.S. and abroad. In fact, their comments also highlighted
potential increases in soy biodiesel from Argentina and soy biodiesel in the U.S. due to a recent
FDA ruling
Comments on Energy Security:
NBB suggested that "increasing the biomass-based diesel requirement will "diversify the U.S.
liquid fuel mix and provide energy security benefits" in allowing for greater advanced biofuel
volumes." EPA believes that given the nested nature of the RFS standards, extra BED produced
above the BED standard can be used to comply with the advanced and total renewable fuel
standards. Thus, the analysis of energy security impacts associated with increasing the BED
standard to devote a larger portion of the advanced biofuel standard to biodiesel is a comparison
of the energy security impacts of BED to other types of advanced biofuels, not a comparison to
diesel fuel. Other advanced biofuels, excluding BED, currently include sugarcane ethanol
(primarily from Brazil), sorghum ethanol, ethanol from food waste, renewable diesel co-
processed with petroleum diesel fuel, CNG/LNG from certain waste digesters, and renewable
naphtha. All of these fuels displace U.S. imports of petroleum and diversify the U.S. fuel supply.
Also, all of the biofuels that displace petroleum help reduce the impacts of periodic supply
disruptions or "oil shocks." Setting a BED standard that required that all or virtually all of the
advanced biofuel standard be made up of BED would reduce diversity of fuel supply and
therefore reduce energy security.
Comments on Expected Annual Rate of Future Commercial Production:
NBB also states that our assessment failed to consider the expected annual rate of future
commercial production of renewable fuels including advanced biofuels in each category
(cellulosic biofuel and biomass-based diesel) as required under the statutory factors. EPA
disagrees with these comments. For this final rule, sections II.E and II.F of the final rule provide
an assessment of the maximum reasonably achievable volumes of total renewable fuels for 2016.
Reasonably attainable volumes of advanced biofuel, including BED, for 2016 are also discussed
in the preamble, as is our projected production volume of cellulosic biofuel.
With regard to advanced biodiesel and renewable diesel, as discussed in section II. F of the final
rule, past experience suggests that a high percentage of the supply of biodiesel and renewable
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diesel to the United States qualifies as advanced biofuel. In previous years biodiesel and
renewable diesel produced in the United States has been almost exclusively advanced biofuel. It
is likely that some advanced biodiesel will be imported in 2016, as discussed in Section II.E.S.iii
of the final rule, however we believe that the volume of biodiesel imported from Argentina in
2016 is likely to be less than the several hundred million gallons suggested by some commenters
(see Section II.E.S.iii of the final rule for more detail on biodiesel and renewable diesel imports).
Due to the nested nature of the standards, all cellulosic biofuel qualifies to help meet the
advanced biofuel volume requirement. As described in Section II.E.4 of the final rule we have
also estimated that about 25 million gallons of advanced biofuel other than ethanol, biodiesel,
and renewable diesel can be supplied in 2016. We estimate that the combination of all these
sources results in a reasonably attainable volume of advanced biofuel for 2016 of 3.61 billion
gallons (ethanol equivalent). As we note in the final rule in section II.F, the volumes actually
used to satisfy this requirement may be different than those listed in Table II.F-1.
In summary, the domestic BED industry coupled with foreign production available for import to
the U.S. already has sufficient production capacity to meet the full 1.90 billion gallons being
adopted for 2016 and to meet the 2.1 billion gallons of advanced biodiesel and renewable diesel
assumed in setting the 2016 advanced biofuel standard. As noted earlier, EPA continues to
respond to industry requests, expanding the number of advanced renewable fuel pathways
including those producing BED. Based on comments received and further analysis, we believe
that an increase in the BED volume to 1.90 billion gallons in 2016, and 2.00 billion gallons in
2017 strikes the appropriate balance between providing a market environment where other types
of advanced biofuels are incentivized and providing support and a degree of certainty for the
BED industry. This approach does not limit additional BED production.
Comments on Environmental Benefits:
We received a number of comments pointing out the environmental benefits of replacing
petroleum-based fuels with biomass-based fuels. Generally identifying improvements to air
emissions and more specifically GHG reduction benefits. Below is a brief response to those
comments. Air quality impacts of replacing petroleum-based fuel with biofuel are treated in
section 8.3, while climate change benefits are discussed in Section 8.2.
Air Quality:
The Agency received several comments on the air quality and climate change impacts of
biodiesel. Some commenters stated that biodiesel resulted in air quality benefits while the other
commenters criticized the Agency for pursuing a policy of increasing biodiesel volumes that
results in negative air quality impacts. (Note: comments related to air quality impacts are also
found in sections 8.0 and 8.3).
We continue to believe that the air quality assessment that supports the RFS2 rule, which is the
result of years of rigorous analysis and modeling, remains the Agency's best estimate of the air
quality impacts associated with the renewable fuel standards, including the BED
component. Prior studies summarized in the RFS2 RIA indicate that the impacts of biodiesel on
VOC, PM and air toxics emissions at the tailpipe are generally favorable compared to petroleum
diesel fuel, but the impact on NOx is slightly detrimental. However, that work was done on
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engines without NOx or PM aftertreatment, so the important impacts on new engines is less well
understood. Of greater importance, the RFS2 RIA also indicates that the upstream emissions
(PM, VOC, NOx, CO, and 802) of biodiesel production (emissions associated with the upstream
production and distribution of biodiesel) are detrimental to air quality. Upstream air toxics
emissions impacts are negligible to slightly detrimental to air quality. Taking both tailpipe and
upstream emissions into account, the net impacts yield increases in the pollutants that contribute
to both ambient concentrations of ozone and particulate matter as well as air toxics. At the same
time, other advanced biofuels such as sugarcane ethanol (primarily from Brazil), sorghum
ethanol, ethanol from food waste, renewable diesel co-processed with petroleum diesel fuel,
CNG/LNG from certain waste digesters, and renewable naphtha also have impacts on air quality.
While the RFS2 rule focused primarily on corn ethanol the vehicle emission impacts from other
sources of ethanol will be the same, thought the upstream impacts may vary in type, quantity,
location, and impact. CNG/LNG vehicles would have to meet the same emission standards but
it's upstream emissions would be primarily limited to methane. All this indicates that some
emissions increases or decreases might be associated with any changes between the volume of
BED and other advanced biofuels used to meet the advanced biofuel standard. As we stated
above, the overall impacts of marginal shifts between BED and other advanced biofuels is
expected to be small. Therefore, we do not believe that air quality impacts by itself, or in
consideration with other factors warrants higher or lower BED volumes than 1.90 billion gallons
for 2016 and 2.0 billion gallons for 2017.
Climate Change:
A number of commenters stated that there is a GHG (and therefore climate) benefit of replacing
petroleum-based fuel with biodiesel. This is consistent with EPA's findings in the context of
analyzing a number of biodiesel production pathways using various feedstocks.
A number of commenters cited the lower GHG emissions associated with biodiesel to argue that
EPA should finalize higher volumes of BED. As EPA discusses in section HE.3 of the final rule
we are finalizing a volume requirement for advanced biofuels that reflects volumes that we
believe are reasonably attainable. This advanced standard is expected to lead to use of all
reasonably attainable volumes of BED, as well as other advanced biofuels. Also, the final
volume requirements for BED specifically in 2016 and 2017 reflect considerable increases over
the volume requirements being finalized for 2014 and 2015. While NBB and others noted that
expanded feedstock availability for biodiesel production, in particular the expanding use of waste
fats, oils and greases provides a greater opportunity for producing lower GHG BED, as noted
above, the advanced biofuel standard was designed to require all reasonably available volumes of
BED; feedstock availability is only one consideration. Setting the nested BED volume
requirement sufficiently below the advanced biofuel requirement, as reflected in the final
volumes, should provide a continuing incentive for the further development and marketing of
other advanced biofuels, and may result in potentially increased GHG reductions through RFS
implementation over the long term. For further discussion of the climate change impacts
associated with the RFS program refer to RTC Section 8.2 and the Memorandum to the Docket:
"Final Statutory Factors Assessment for 2016-2017 Biomass Based Diesel Applicable Volumes,"
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Water Quality:
In their comments, the National Biodiesel Board (NBB) claims a variety of water quality
advantages of biodiesel or lack of the disadvantages associated with other biofuels, particularly
those types of concerns often raised with corn ethanol, a conventional biofuel. NBB criticized
EPA's assessment of impacts on water usage and water quality, suggesting in particular that EPA
should instead compare soy-oil biodiesel to potential petroleum impacts on water use and water
quality rather than to other biofuels for determining the BED standard. We disagree. We have
set the total renewable fuel standard at the maximum reasonably achievable level considering all
potential supplies of biodiesel, renewable diesel and other qualifying renewable fuels, and have
set the advanced biofuel standard at the reasonably attainable level of advanced biofuels
considering all the potential supplies of advanced biodiesel and renewable diesel as discussed in
section II of the final rule. In setting the BED standard then, biodiesel volumes are not further
displacing petroleum, but rather competing with other advanced biofuels to satisfy that market's
demands. In the context of displacing other advanced biofuels such as sugarcane ethanol
(primarily from Brazil), sorghum ethanol, ethanol from food waste, renewable diesel co-
processed with petroleum diesel fuel, CNG/LNG from certain waste digesters, and renewable
naphtha there would not appear to be any basis for claiming a significant advantage with respect
to water quality and water quantity for biodiesel. The majority of it, and especially the majority
of the increase going forward is expected to come from soy oil and other virgin vegetable oils.
The growth of the feedstocks and their processing into biodiesel raise both water consumption
and effluent/runoff concerns, providing no meaningful advantage for biodiesel relative to the
other alternatives.
Wetlands, ecosystems and wildlife habitats:
The comments from the NBB note that farming practices continue to evolve and crop yields
continue to improve, mitigating potential adverse impacts including those impacting wetlands,
ecosystems and wildlife habitats. We noted in the first triennial report to Congress an increase in
biofuel production could have adverse impacts due to monoculture production adversely
impacting biodiversity and the potential adverse impact of runoff from crop lands on wetland
pollution. To the extent that increasing crop yields and improved farming practices over time are
able to mitigate the potential adverse impacts on wetlands, ecosystems and wildlife habitat, it
does not eliminate such concerns.
NBB criticized EPA's analysis of the impacts of higher biodiesel volumes for setting the BED
standard, arguing that its wetland, ecosystem, and wildlife habitat impacts were better for BED
than for other biofuels and therefore warranted higher BED standards. In doing so, however,
their comments highlighted specific issues associated with individual competing biofuels while
ignoring similar or analogous issues with biodiesel (e.g., infrastructure for CNG/LNG vs
infrastructure for feedstocks, production, distribution, etc. of biodiesel). They highlighted all the
progress being made to improve farming practices to reduce their negative consequences, but did
not acknowledge that they nevertheless exist. They also suggested EPA ignored the minimal
impacts of waste fats, oils, and greases. While we acknowledge the reduced impacts of such
feedstocks, we also believe that much of the future near term growth in feedstocks will be from
virgin vegetable oil feedstocks. To the extent that increases in advanced biofuels are derived
from non-crop feedstocks such as ethanol from food waste and CNG/LNG from certain waste
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digesters, they would clearly have less of an impact on wetlands, ecosystems and wildlife
habitats than biodiesel.
Further discussion of comments related to the environmental impacts of the proposed rule can be
found in RTC section 8. Regarding the adequacy of our assessment for the statutory factors for
the range of biodiesel feedstocks refer to the Memorandum to the Docket: "Final Statutory
Factors Assessment for 2016-2017 Biomass Based Diesel (BED) Applicable Volumes".
3.5 General Comments on Increasing the BBD Standard Above 1.28 Billion
Gallons 504
Comment:
New Leaf Biofuel, LLC
We have been counting the days waiting for the new proposed rule, hoping that the EPA would
finally come out with a proposal that would stimulate the growth of the industry again.
Unfortunately, we were disappointed. While we appreciate that EPA increased the volumes over
1.28 billion, this proposal still falls well short of a mandate that will stimulate growth. [EPA-HQ-
OAR-2015-0111-1909-A1 p.2]
World Agricultural, Economic, and Environmental Analysis
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 212-213.]
Today, I'd like to briefly highlight the implications of an alternative scenario to the proposed
biodiesel volume obligations. The alternative scenario included a biodiesel volume obligation of
2.1 billion gallons in 2015, 2.4 billion gallons in 2016, and 2.7 billion gallons in 2017. As you
are aware, the biodiesel industry has greatly diversified its feedstock mix over the past few years,
and most notably, distillers corn oil is a growing source of supply for biofuels. Distillers corn oil
is primarily used as an energy source in livestock rations and with falling grain prices is expected
to find higher value in biodiesel production. In addition, as per your January 2015
announcement, the Argentine biodiesel sector now has increased ability to earn D4 RINs, even as
other international markets for Argentine biodiesel have diminished. The available Argentine
supply, in combination with abundant distillers corn oil and other feedstocks, lessens the impact
of increased volume obligations on feedstock prices. In this scenario, with a 2.7 billion gallon
volume obligation in 2017, the WAEES model simulates soybean oil prices in the range of 34 to
35 cents per pound. By comparison, soybean oil prices exceed 50 cents per pound in 2011-'12
and 2012-13 marketing years. The prices have fallen in the past few years and are expected to
average 33 cents for 2014 and '15.
Response:
One commenter expressed disappointment with the BBD volumes proposed in the NPRM
indicating that, while the volumes were better than what had originally been proposed in
November 2013, the volumes proposed in June 2015 would not stimulate growth in the industry.
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EPA acknowledges these and other comments which expressed the hope that the final rule would
incorporate higher volume requirements for BED. However, in finalizing this rulemaking we
believe that it is appropriate to establish the 2014 and 2015 volume requirements of BED to
reflect actual supply (including a projection for the latter part of 2015 that is primarily based on
supply in the earlier part of the year for which data is available). For 2016 and 2017, to preserve
the important role that BED plays in the RFS program, as well as to ensure that higher volume
requirements for advanced biofuel can be reached, we believe that it is appropriate to increase
the BED volume requirement for each year beyond what we had proposed in the June 2015
NPRM. Thus, based on a review of the implementation of the program to date and all the
factors required under the statute, we are not only finalizing the 2014 and 2015 BED volume
requirement at the actual volumes of 1.63 and 1.73 billion gallons, respectively, but we are also
finalizing increases in the applicable volume of BED to 1.9 and 2.0 billion gallons for years 2016
and 2017, respectively. We believe that these increases support the overall goals of the program
while also maintaining the incentive for development and growth in production of other
advanced biofuels. We believe establishing the volumes at these levels will encourage BED
producers to manufacture higher volumes of fuel that will contribute to the advanced biofuel and
total renewable fuel requirements, while also leaving considerable opportunity within the
advanced biofuel mandate for investment in and production of other types of advanced biofuel
with comparable or potentially superior environmental or other attributes.
Finally, one commenter reviewed the various scenarios presented in the NPRM and highlighted
the fact that feedstocks for biodiesel have greatly diversified in recent years lowering overall
prices and making higher biodiesel volume obligations of 2.1 in 2015, 2.4 in 2016, and 2.7
billion gallons in 2017 attainable. While diverting biodiesel and renewable diesel feedstocks
from current uses and increasing total feedstock availability will take time, we acknowledge that
the world supply of oils, fats, and greases that are suitable feedstocks for biodiesel and renewable
diesel production has continued to grow over time. We believe that this supply can continue to
grow as more oilseed crops are planted, productivity from existing crops increases, and recovery
rates of waste, fats, oils, and greases add to the total available supply. The recent development
and commercialization of the non-food grade corn oil extracted from distillers dried grains at
ethanol plants has added to the total supply of biodiesel and renewable feedstocks.
It is also worth highlighting that over time the opportunity for continued growth in the feedstocks
currently used to produce biodiesel and renewable diesel may begin to plateau, and the volumes
of these fuels along with it unless there is a breakthrough in the development of new feedstocks.
The bump up in supply brought about by large increases in palm oil production, corn oil
extraction, and the increased recovery of waste fats, oils, and greases is limited, and may soon
near its practical limit. There has been considerable research and development for many years in
the potential for algal bio-oils and other new oilseed crops that could be grown on marginal lands
that could serve as a feedstock for biodiesel and renewable diesel. However, the promise of
large volumes of algal bio-oils and alternative oilseed crops remains in the future, well beyond
the timeframe of the 2016 standards, and near term feedstock supply increases are likely to be
incremental from existing sources.
Therefore, while we disagree with the specific volume levels this commenter believes is feasible
for 2016-2017 (2.4 to 2.7 billion gallons), we do believe that higher levels than what were
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proposed in the June 2015 NPRM are appropriate and are finalizing BED volume requirements
of 1.9 and 2.0 billion gallons for 2016 and 2017, respectively.
3.5.1 Comments Supporting Biomass-Based Diesel Volume Requirement
Above 1.28 Billion Gallons
Comment:
American Council on Renewable Energy (ACORE)
While the BED RVOs are a step in the right direction, ACORE believes these RVOs do not fully
capitalize on BBD's benefits and potential for growth. According to USEPA's own calculations,
biodiesel delivers more significant GHG emissions reductions than any other domestic,
commercial-scale fuel on the national market. Biodiesel is produced in nearly every state in the
country and is supporting more than 62,000 jobs, 49 while helping to reduce our dangerous
dependence on petroleum. The six criteria for biodiesel growth, outlined in the RFS statute, have
clearly been met. The benefits are clear in terms of cost-effective pollution reduction, job
creation, tax revenues and energy security. [EPA-HQ-OAR-2015-0111-1926-A1 p.15-16]
49 "Biodiesel supporters to press EPA on renewable fuel standard." The National Biodiesel Board, June 24, 2015,
http://www.biodieselmagazine.com/articles/429869/biodiesel-supporters-to-press-epa-on-renewable-fuel-standard
American Soybean Association (ASA)
As we have identified in these comments, there are a number of factors that will result in
additional feedstock and biodiesel for the U.S. market and there are numerous benefits that
would be gained from implementing volume requirements that would ensure these additional
levels are realized. The ASA believes these factors and the benefits derived from biodiesel
provide justification for EPA to modestly increase the biomass-based diesel volumes from the
levels in the Proposed Rule. As it is consistent with the intent of the statute and with the goals
and objectives of this Administration, the ASA sees no compelling reason why the EPA would
not support more aggressive, yet readily achievable, biomass-based diesel volumes. [EPA-HQ-
OAR-2015-0111-1818-A1 p.4]
Given these factors and the many benefits that biodiesel provides, the ASA asks that you
reconsider the biomass-based diesel standards in the Proposed Rule and finalize stronger
standards, particularly for 2016 and 2017. The biodiesel industry has previously requested
volumes of 2.4 billion gallons in 2016 and 2.7 billion gallons in 2017. While those volumes are
readily achievable and sustainable, particularly with rising imports, at a minimum EPA should
set the standards at not less than 2 billion gallons for 2016 and 2.3 billion gallons for 2017.
[EPA-HQ-OAR-2015-0111-1818-Alp.4]
American Soybean Association (ASA)
On behalf of the American Soybean Association, I want to express my view that EPA should
support more aggressive, but achievable, Renewable Fuel Standard (RFS) volume targets for
biodiesel. Given the many benefits of biodiesel and the capability for increased production, EPA
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should, at a minimum, support biomass-based diesel volumes of at least 2 billion gallons for
2016 and 2.3 billion gallons for 2017. [EPA-HQ-OAR-2015-0111-1818-A1 p.l]
Anonymous Citizen 6
Biomass-based diesel, on the other hand, seems to have more similar properties to its authentic
counterpart than gasolines. It is created from oils of seeds, algae, and animal fats. However, it
would not affect engine wear the same way that to which cellulosic biofuels have been shown.
Further, its emissions output is fifty percent less than fossil diesel. This will help reduce
emissions typically associated with fossil fuel pollution. This form is also drastically cheaper,
usually running about a third of the cost of cellulosic fuel. (5) By being more energy efficient,
biomass-based diesel is the clear winner in the direction that the EPA should progress as opposed
to cellulosic biofuels. It is more profitable and less harmful to the environment as well as
engines, which should delight farmers around the world. [EPA-HQ-OAR-2015-0111-0113 p.2]
Archer Daniels Midland Company (ADM)
To accommodate a growing biodiesel industry, while encouraging demand to support further
investment, ADM urges EPA to set volumes at 2.1 billion gallons for 2015, 2.4 billion gallons in
2016, and 2.7 billion gallons for 2017. [EPA-HQ-OAR-2015-0111-2262-A1 p. 2]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, pp. 38-39.]
We support the National Biodiesel Board's recommendations to accommodate a growing
industry while encouraging demand to further support investment. The NBB originally urged the
EPA to set volumes at 2.4 billion gallons for 2016 and 2.7 billion gallons for 2017. We now
request that this standard be set at least 2 billion gallons for 2016 and 2.3 billion for 2017, levels
that we believe are realistic, achievable, and reflective of the underlying legislation.
Baker Commodities
The biodiesel industry has previously requested volumes of 2.4 billion gallons in 2016 and 2.7
billion gallons in 2017. While we continue to believe that those volumes are readily achievable
and sustainable, particularly with rising imports, I ask now that you set the standards for not less
than 2 billion gallons for 2016 and 2.3 billion gallons for 2017. [EPA-HQ-OAR-2015-0111-
1907-A1 p.3]
Canola Council of Canada
Two of the largest U.S. biodiesel facilities run, in significant part, on canola from Canada. As
such, the canola industry has been a significant contributor to the success of the RFS2's biomass-
based diesel program, which has exceeded expectations every year. The Canola Council supports
EPA's attempt to get the RFS2 program back on track, and agrees that the biomass-based diesel
industry can continue to grow and contribute meaningfully to the objectives of the program. As
such, the Canola Council submits these comments to support continued and greater increases in
the volume requirements for biomass-based diesel and advanced biofuel. [EPA-HQ-OAR-2015-
0111-2484-A1 p. 1-2]
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Darling Ingredients Inc.
Darling submits comments concerning the proposed obligations proposed for Biomass Based
Diesel (BED) and Advanced Biofuel for both 2016 and 2017. While Darling is encouraged that
the proposed rule substantially increases those volumes previously proposed, we believe the
proposed volumes for both BED and Advanced Biofuel are inadequate and should be further
increased as the proposed volumes neither (1) fulfill the clearly defined goals established by the
EPA in its current written proposal nor (2) provide adequate volumes using the statistical
information provided by the EPA in its current written proposal. All the information contained in
these comments comes directly from the current proposed rule submitted by the EPA. [EPA-HQ-
OAR-2015-0111-1929-A1 p.l]
Darling submits the EPA should increase BED to 2.0 billion gallons for 2016 and to 2.3 billion
gallons for 2017 with a corresponding increase in Advanced Biofuels to 3.75 billion gallons for
2016 and to 4.25 billion gallons for 2017. These volumes are based solely on the facts and
rationale presented by the EPA in its proposed rule. These increases still represent minimum
volume levels for what the industry can do if the EPA empowers it to respond. [EPA-HQ-OAR-
2015-01 ll-1929-Alp.2]
Darling believes, supported by a clear policy direction established by both the plain meaning of
the statute and EPA's interpretation of the statute as well as EPA's clear understanding of both
the historical productivity of the BED industry and its current/future capabilities, that the
Proposed Rule fails to take advantage of the current Biomass Based Diesel industry
infrastructure to meet the clearly defined goals of the statute. BED is available in quantities
greater than those proposed for 2016 and 2017 and the industry has demonstrated a proven track
record of achieving higher volume growth. The volumes currently proposed by the EPA do not
even attain the level of historical production by the industry let alone provide a growth path to an
industry that has proven its ability to provide more cost-effective, renewable fuel. Simply stated
the current proposed volumes for both BED and Advanced Biofuel fail to comport with the
rationale stated by the EPA for deriving those volumes. The logic used for invocation of the
waiver authority is not rational and should not be used to limit the mandates for BED or
Advanced Biofuels. Indeed the EPA has an opportunity to support the supply of an Advanced
Biofuel accomplishing all of the objectives of Cellulosic while maintaining Advanced Biofuel
mandates that continue to stimulate further production of Cellulosic. There are no COMPETING
FACTORS and it is clear the EPA should raise the volumes for both Biomass Based Diesel and
Advanced Biofuels conforming them to both the rationale and the facts established by the EPA
IN ITS OWN PROPOSED RULE. [EPA-HQ-OAR-2015-0111-1929-A1 p.6]
Governor of Iowa, et al.,
We recognize that you made some positive changes for the biodiesel levels in the recent
proposed rule; however, we remain concerned that the proposed biodiesel volumes for 2016 and
2017 fail to adequately recognize the domestic biodiesel industry's production capacity and
underestimate the biodiesel industry's ability to increase production beyond current capacity.
Specifically, we urge the EPA to increase its biomass-based diesel targets to at least 2 billion
gallons for 2016 and at least 2.3 billion gallons for 2017 in the final rule. [EPA-HQ-OAR-2015-
0111-1915-A1 p.l]
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Illinois Soybean Growers (ISG)
ISO supports higher Renewable Fuel Standard (RFS) volume targets for biomass-based diesel
than what the EPA has proposed through 2017. The EPA should set RFS guidelines to at least 2
billion gallons for 2016 and 2.3 billion gallons for 2017 based on predicted production numbers.
[EPA-HQ-OAR-2015-0111-3428 p.l]
Given the many benefits biodiesel provides to Illinois farmers, consumers, animals and others,
we ask that you reconsider the RFS standards in the proposed rule and finalize stronger
standards. Again, we encourage setting the 2016 standard to at least 2 billion gallons and 2017 to
2.3 billion gallons. [EPA-HQ-OAR-2015-0111-3428 p.2]
Imperium Renewables and Renewable Biofuels
A review of past production demonstrates the proven potential both of industry to produce
significantly higher volumes and of the market to absorb these higher volumes. EPA's EMTS
reports the following production of RIN-eligible volumes for the years 2011 through 2014.
[EPA-HQ-OAR-2015-0111-2043-Alp.2]
RIN Generating Biomass-based Diesel Production
Year Volume
2011 1.1 billion gallons
2012 1.1 billion gallons
2013 1.79 billion gallons
2014 1.63 billion gallons
[EPA-HQ-OAR-2015-0111-2043-Alp.2]
The chart shows a steady increase in domestic BED production, peaking in 2013 at just under 1.8
billion gallons. In the following year, despite the uncertainty of both the tax credit and the
proposed and withdrawn rule, production dropped only slightly. [EPA-HQ-OAR-2015-0111-
2043-A1 p.2]
The most instructive production figures for projecting production capabilities are the BED
volumes for the final months of 2013 and 2014, when the industry produced nearly 220 and 213
million gallons of BED respectively. Projecting that monthly production level throughout a year,
industry demonstrated the capability to produce well in excess of 2.6 billion gallons a year. That
final month was not wholly anomalous — production for the second half of 2013 averaged over
181 million gallons per month. [EPA-HQ-OAR-2015-0111-2043-Al p.2]
Reviewing these production figures, one can only draw the conclusion that the industry is
capable of producing, and the nation's diesel pool is capable of absorbing, far more than the
volumes proposed in the current EPA proposed rule for 2014-2017. Industry's extensive review
of feedstock availability also concludes there is more than enough RIN-eligible feedstock to
produce at significantly increased volumes. [EPA-HQ-OAR-2015-0111-2043-Al p.2]
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We reiterate that we are appreciative of the EPA's efforts in the proposed rule to send a positive
message to the industry and investors. However, with this clear record of facts, we call upon the
EPA to make appropriate upward adjustments to the proposed BED volumes for each of the
years 2015 through 2017. [EPA-HQ-OAR-2015-0111-2043-Al p.4]
Specifically, we request that in the final rule the EPA increase the BED volume requirement to
2.0 billion gallons in 2015, to 2.4 billion gallons in 2016, and to 2.7 billion gallons for 2017.
[EPA-HQ-OAR-2015-0111-2043-Alp.4]
We believe these volumes reflect a conservative assessment of the capability of domestic
producers to deliver — even without the additional imported volumes — and of the market to
absorb such volumes. Overall demand for diesel is increasing and there are no blend wall issues
with BED at these volumes, so significant additional volumes could be blended without affecting
infrastructure or vehicle engine performance. [EPA-HQ-OAR-2015-0111-2043-A 1 p.4]
Toward that end, the BED industry already has clearly demonstrated the capacity to produce
well in excess of 2.4 billion gallons of biomass-based diesel, and eligible capacity far exceeds
that volume. In fact, registered capacity of domestic and foreign BED facilities alone could reach
the statutory advanced biofuels volume for 2016. Additionally, other fuels are and will be
increasingly available to meet requirements within the advanced biofuels category, including
Brazilian sugar-cane ethanol, as well as next generation fuels entering the market in increased
volumes. (For more detail analysis, please see the NEB submission.) [EPA-HQ-OAR-2015-
0111-2043-A1 p.4-5]
Indiana Soybean Alliance and American Soybean Association
reconsider the biomass-based diesel standards in the Proposed Rule and finalize stronger
standards, particularly for 2016 and 2017. [EPA-HQ-OAR-2015-0111-A1 p.3]
Iowa Biodiesel Board (IBB) and Iowa Soybean Association (ISA)
I want to thank you for hearing the biodiesel industry's concerns regarding the Renewable Fuel
Standard Biomass-based Diesel volumes, and for all the hard work you put into your recent
proposal. While this latest proposal represents a step in the right direction, I believe the volumes
proposed in the later years are too flat and will unnecessarily stifle growth. I ask that you set a
final rule that is closer to the industry's initial request of 2.4 billion gallons for 2016, and 2.7
billion gallons for 2017. We are more than capable of achieving and using these volumes. [EPA-
HQ-OAR-2015-0111-1942-A1 p. 1]
Additionally, the recent FDA decision to ban trans-fats will create a glut of 1.5 billion pounds of
soybean oil. Biodiesel provides a timely market for this oil. We need to ensure that the biodiesel
industry has ample room to use it by setting the biodiesel RFS target higher. [EPA-HQ-OAR-
2015-0111-1942-A1 p. 2] [EPA-HQ-OAR-2015-0111-1043, p. 45]
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Iowa Renewable Fuels Association
Bump Up Biodiesel [EPA-HQ-OAR-2015-0111-1957-A2 p. 8]
EPA's proposal for biomass-based diesel volumes under the RFS for 2014-2017 is an
improvement over the November 2013 proposal, but it still falls short in providing the growth
targets necessary in 2016 and 2017 to capture biodiesel's full potential. Biodiesel has been an
unmitigated success under the RFS, as the U.S. biodiesel industry has produced over and above
EPA's annual biomass-based diesel targets each and every year since 2010, even amidst
excessive federal policy uncertainty. While it's a positive that the current proposal allows for
graduated volume increases, we firmly believe those increases are unnecessarily limited due to
EPA's flawed rationale. Specifically, IRFA urges EPA to increase its biomass-based diesel
targets to at least 2 billion gallons for 2016 and at least 2.3 billion gallons for 2017 in the final
rule. [EPA-HQ-OAR-2015-0111-1957-A2p. 8] [EPA-HQ-OAR-2015-0111-1044 pp.72-73]
In support of this request, we would like to share some Iowa-specific data (Figure 1), courtesy of
the Iowa Department of Revenue, to demonstrate the remarkable growth in availability and use
of higher biodiesel blends in our state over the past few years—data which runs contrary to the
inaccurate suggestion that there are engine warranty limitations on the use of biodiesel for the
current in-use fleet. [EPA-HQ-OAR-2015-0111-1957-A2 p. 8] [EPA-HQ-OAR-2015-0111-1044
p.73]
Since 2010, when the expanded RFS went into effect, both biodiesel production and biodiesel
sales in Iowa have soared, multiplying by a factor of roughly four and a half. Biodiesel
production has jumped from 48 million gallons in 2010 to 227 million gallons in 2014, 32 while
total B100 sales in Iowa have expanded from 7.4 million gallons in 2010 to 33.3 million gallons
in 2014. In addition, biodiesel-blended gallons in Iowa have increased from 239.8 million
gallons in 2010 to 354.7 million gallons in 2014, a 48 percent jump. [EPA-HQ-OAR-2015-0111-
1957-A2p. 8] [EPA-HQ-OAR-2015-0111-1044 pp.73-74]
Even more remarkable is the growth in the average blend level of biodiesel-blended gallons sold.
In 2010, the average blend level of biodiesel-blended gallons sold in Iowa was 3.1 percent. By
2014, the average biodiesel blend level in Iowa had more than tripled to 9.4 percent—a level that
simply could not have been reached without selling a significant amount of BIO and B20. See
Figure 1 for further details illustrating the dramatic growth in biodiesel production and sales in
Iowa since 2010.33v [EPA-HQ-OAR-2015-0111-1957-A2 p. 8-9] [EPA-HQ-OAR-2015-0111-
1044 p.74]
[Figure 1 can be found on p. 9 of docket number EPA-HQ-OAR-2015-0111-1957-A2]
If there was ever any question on whether blends above B5 can be sold year round, the Iowa data
referenced in Figure 1 should put that argument to rest. However, EPA, in its recent proposed
rule, made the inaccurate suggestion that "the majority of highway and nonroad diesel engines in
use today are warranted for no more than 5% biodiesel." The Agency then used this suggestion
as part of its rationale to limit the increases in biomass-based diesel levels for 2016 and 2017.
[EPA-HQ-OAR-2015-0111-1957-A2 p. 9] [EPA-HQ-OAR-2015-0111-1044 p.74]
Further, by properly accounting for U.S. biodiesel production and consumption capacities along
with the high likelihood for significant biodiesel imports, IRFA urges the Agency to set the
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biomass-based diesel levels for 2016 and 2017 at no less than 2.0 and 2.3 billion gallons
respectively. [EPA-HQ-OAR-2015-0111-1957-A2 p. 21] [EPA-HQ-OAR-2015-0111-1044 p.75]
32. "2014 Iowa Biodiesel Production of 227 Million Gallons." Iowa Renewable Fuels Association 8 Jan 2015
http://www.iowarfa.org/2014IowaBiodieselProduction.php
33. McAninch, Kathy. "2014 Retailers Motor Fuel Gallons Annual Report." Iowa Department of Revenue April
2015
https://tax.iowa.gov/sites/files/idr/2014%20Motor%20Fuel%20Retailers%20Gallons%20Annual%20Report_0.pdf
Iowa Soybean Association
While it is true that biodiesel levels were increased from the earlier proposed rule, proposed
volumes for 2016 and 2017 fail to recognize our current and future production capacity. While
Iowa can produce up to 315 million gallons per year, last year they produced only 227 million
gallons because of the uncertainty under the RFS. Biodiesel utilizes soybean oil, which would
otherwise be a waste product, increasing the price for soybeans but also decreasing the price for
soy meal which is a staple of livestock feed. Biodiesel is also a recognized advanced biofuel.
[EPA-HQ-OAR-2015-0111-3424 p.l]
Increasing the levels of biodiesel within the RFS is one action that can support rural lowans and
rural Americans. [EPA-HQ-OAR-2015-0111-3424 p.2]
We ask that EPA set standards of not less than 2 billion gallons of biodiesel for 2016 and 2.3
billion gallons for 2017. We are capable of achieving 2.4 billion gallons in 2016 and 2.7 billion
gallons in 2017. [EPA-HQ-OAR-2015-0111-3424 p.2]
John Deere
As such, we ask that you consider the opportunity for additional growth in biomass-based diesel
standards. Minimum levels closer to 2.0 billion gallons in 2016 and 2.3 billion gallons in 2017
are definitely achievable and sustainable. What's more, biodiesel delivers significant
greenhouse-gas emission reductions. Establishing higher biomass-based diesel volumes would be
one step that effectively demonstrates EPA's resolve to adhere to the congressional intent
referenced above. [EPA-HQ-OAR-2015-0111-2042-A1 p.2]
Kansas Farm Bureau
Biomass diesel on the other hand is a proven renewable fuel source that supports tens of
thousands of jobs across the country and according to EPA's own calculations, delivers more
significant greenhouse gas emission reductions than any other domestic, commercial-scale fuel
on the national market. While we applaud EPA for increasing the biodiesel use targets, we
believe the industry has the capacity to increase production above and beyond the standards
called for in the proposed rule, and ask that the agency consider setting the standards for not less
than 2 billion gallons for 2016 and 2.3 billion gallons for 2017. [EPA-HQ-OAR-2015-0111-
1195-Alp.2]
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Kansas Soybean Association
I also strongly believe that EPA should increase the biomass-based diesel volumes relative to the
total Advanced Biofuels volumes in order to promote the use of domestically produced biodiesel
over imported sugar-cane ethanol. The intent of Congress when they established and expanded
the RFS program was clearly to increase and promote domestic energy production and U.S.
energy independence. This is clearly reflected by the title of the 2007 law the Energy
Independence and Security Act (EISA) - which expanded the RFS and established the biomass-
based diesel program. [EPA-HQ-OAR-2015-0111-2340 p.1-2]
Given the many benefits of biodiesel and the capability for increased production, EPA should, at
a minimum, support biomass-based diesel volumes of at least 2 billion gallons for 2016 and 2.3
billion gallons for 2017. [EPA-HQ-OAR-2015-0111-2340 p.l]
Given the many benefits that it provides, I ask that you reconsider the biodiesel standards in the
Proposed Rule and finalize stronger standards, particularly for 2016 and 2017. The biodiesel
industry has previously requested volumes of 2.4 billion gallons in 2016 and 2.7 billion gallons
in 2017. While those volumes are readily achievable and sustainable, particularly with rising
imports, at a minimum EPA should set the standards at not less than 2 billion gallons for 2016
and 2.3 billion gallons for 2017. [EPA-HQ-OAR-2015-0111-2340 p.3] [EPA-HQ-OAR-2015-
0111-1044 p.28]
Mass Comment Campaign sponsored by Biodiesel.org (email) - (93)
I ask that you reconsider the biodiesel standards in your May proposal and finalize stronger
standards, particularly for 2016 and 2017. The biodiesel industry has previously requested
volumes of 2.4 billion gallons in 2016 and 2.7 billion gallons in 2017. While I continue to
believe those volumes are readily achievable and sustainable, particularly with rising imports, I
ask now that you set the standards for not less than 2 billion gallons for 2016 and 2.3 billion
gallons for 2017. [EPA-HQ-OAR-2015-0111-0211-A1 p.l]
Mass Comment Campaign sponsored by employees of Western Dubuque Biodiesel (web) -
(1)
We, the undersigned dedicated employees of Western Dubuque Biodiesel, respectfully request
that the proposed biomass-based diesel volume under the federal Renewable Fuel Standard
(RFS) for 2016 and 2017 be increased to at least 2.0 billion gallons and 2.3 billion gallons,
respectively. My job and the welfare of my family depends upon it. [EPA-HQ-OAR-2015-0111-
1961-Alp.l]
While the EPA's proposal for biomass-based diesel volumes under the RFS for 2014 -2017 are
an improvement over the November 2013 proposal, we believe there is justification for further
increasing these volumes. We are proud of the productivity and efficiencies we've achieved at
our biodiesel production facility, and are certain that the higher targets of at least 2.0 billion
gallons for 2016 and 2.3 billion gallons for 2017 are achievable. [EPA-HQ-OAR-2015-0111-
1961-Alp.l]
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The success of the RFS validates an increase in the proposed biomass-based diesel volumes for
2016 and 2017 to at least 2.0 billion and 2.3 billion gallons respectively. [EPA-HQ-OAR-2015-
0111-1961-A1 p.2]
Mass Comment Campaign sponsored by Indiana Soybean Alliance (email) - (250)
I believe the domestic biodiesel industry is fully capable of additional growth and I strongly urge
you to revise and increase the volumes in the final rule. [EPA-HQ-OAR-2015-0111-2569-A2
p.l]
Biodiesel is exceeding the goals that Congress envisioned when it created the RFS with
bipartisan support in 2005. Biodiesel has created jobs, generated tax revenues, reduced pollution,
and increased energy security. I urge you to support continued growth in the soy biodiesel
industry by making reasonable and sustainable increases in the biodiesel volumes for 2016 and
2017 in the final rule. [EPA-HQ-OAR-2015-0111-2569-A2 p.l]
Mass Comment Campaign submitted by employees of New Leaf Biofuel (web) - (24)
The RFS was working. The renewable fuels industry was growing. New Leaf was growing. And
then it stopped. You have the power to stimulate that growth again. Your proposal for 1.8 billion
gallons in 2016 is not growth. It is simply taking us back to where we already were in 2013. We
want to move forward, not stay in the same place. We want to create more of the fuel that will
most effectively meet the EPA's carbon-cutting goals. We simply ask that you raise the RVO to
2.4 billion gallons for 2016 and 2.7 billion for 2017. We're ready to prove it can be done. [EPA-
HQ-OAR-2015-0111-2048-A1 p.l]
Metropolitan Energy Center
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 47.]
I ask that you reconsider the biodiesel standards and urge you to set the standards for no less than
2 billion gallons for 2016 and 2.3 billion gallons for 2017.
Minnesota Soybean Processors (MnSP)
Our industry has prepared compelling comments which provide the EPA with the appropriate
legal analysis and data supporting an increase in the Renewable Volume Obligation for biomass
based diesel significantly greater than that EPA proposes. [EPA-HQ-OAR-2015-0111-2505-A1
p. 1-2]
To MnSP's reading of this rulemaking, the tenor of this proposal seems to be one of trying to
find every possible means of increasing the RVO of ethanol to set its maximum usage while at
the same time simply placing a cap or minimum usage of biomass based diesel. EPA provided in
this and previous rulemakings significant and detailed data of all working, construction phase
and potential cellulosic ethanol plants while at the same time we can find no such effort in
detailing the biodiesel industry in a like manner. Thus it appears EPA fails to document and fully
acknowledge that the biodiesel industry has a proven track record and that the biodiesel industry
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has, can and will successfully meet significantly increased biodiesel obligations in the upcoming
year, increases much greater than what EPA proposes. [EPA-HQ-OAR-2015-0111-2505-A1 p.3]
While EPA may believe that its proposal to increase biodiesel volumes by 100 million gallons
per year to 1.7 billion gallons in 2015, 1.8 billion gallons in 2016 and 1.9 billion gallons in 2017
is a satisfactory expansion of renewable fuel usage, the existing biodiesel industry can easily
surpass these very lackluster increases. MnSP's existing soybean processing plant alone yields
enough soybean oil feedstock to make 60 million gallons annually. With a simple biodiesel
refining expansion from its current 30 million gallon per year refinery capacity MnSP could
produce 60 million gallons at its existing site. That potential 30 million gallons of new biodiesel
refining from existing feedstock, increased refining dependent on market signals given through
this rulemaking, is one-third of EPA's proposed 100 million gallon increase of biodiesel. As
MnSP testified in EPA's June 25 hearing in Kansas City, KS, MnSP is also considering
expansion of its current soybean processing which could yield feedstock for up to another 15
million gallons of biodiesel; in reality our single, existing soybean processing plant has the
potential to produce nearly one-half of EPA's proposed 100 million gallon increase in biodiesel.
[EPA-HQ-OAR-2015-0111-2505-A1 p.3-4]
MnSP believes that the minimum biomass based diesel RVO for 2016 should be 2 billion gallons
and 2.3 billion gallons for 2017. Increases less than that simply do not acknowledge the ability of
the biodiesel industry to replace petroleum products as EPA is charged to do by Congress. [EPA-
HQ-OAR-2015-0111-2505-A1 p.4]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, p. 47.]
While EPA's proposed volumes are appreciated, they are by no means spectacular. Absent clear
market signals, our company had no appetite to increase its biodiesel refining to consume all of
our soybean oil production, which is essentially like leaving 30 million gallons of domestically
refined biodiesel on the table. Long-contemplated refining expansion to consume all of our
soybean oil production, largely dependent on the signals given through EPA rulemaking, if
completed would consume about one third of EPA's proposed 100 million gallon increase, about
another 30 million gallons we'd be able to produce. We're also considering expansion of our
existing soybean meal processing plant to satisfy export demand for animal soybean protein. An
expansion of our plant would result in about a third more soybean oil available for biodiesel
refining, another 10 to 15 million gallons of biodiesel per year. [EPA-HQ-OAR-2015-0111-
1143, p. 47]
Missouri Soybean Association (MSA)
MSA respectfully requests EPA to reconsider the biodiesel standards in its May proposal and
finalize stronger standards, particularly for 2016 and 2017. The biodiesel industry has previously
requested volumes of 2.4 billion gallons in 2016 and 2.7 billion gallons in 2017. While we
continue to believe those volumes are readily achievable and sustainable, particularly with rising
imports, we ask now that you set the standards for not less than 2 billion gallons for 2016 and 2.3
billion gallons for 2017. [EPA-HQ-OAR-2015-0111-3304 p.2]
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NAFA Fleet Management Association
The RFS proposal provides modest growth for biodiesel over several years. The proposal would
increase the biomass-~'-based diesel sector of the RFS by about 100 million gallons per year to
1.9 billion gallons in 2017. I ask that the Agency reconsider the biodiesel standards in the May
proposal and finalize stronger standards, particularly for 2016 and 2017. The biodiesel industry
has previously suggested volumes of 2.4 billion gallons in 2016 and 2.7 billion gallons in 2017.
While those volumes are readily achievable and sustainable, particularly with rising imports, I
ask now that you set the standards for not less than 2 billion gallons for 2016 and 2.3 billion
gallons for 2017. [EPA-HQ-OAR-2015-0111-3171-A1 p.l]
National Biodiesel Board
A plain reading of the statute requires increasing volumes of renewable fuels. The statute's
explicit reference to a "[mjinimum applicable volume of biomass-based diesel" and statement
that the applicable volume "shall not be less" than the 2012 volume plainly demonstrate that
Congress expected the applicable volumes of biomass-based diesel to increase from that
"minimum." 42 U.S.C. § 7545(o)(2)(B)(v). Furthermore, the statute requires the Administrator to
"ensure ... at least the applicable volume ... determined in accordance with subparagraph (B)." Id.
§ 7545(o)(2)(A)(i). The term "at least" again demonstrates that EPA must increase the volume of
renewable fuels. The applicable volumes are not caps, but floors. [EPA-HQ-OAR-2015-0111-
1953-A2p.24]
It is a "fundamental canon of statutory construction that the words of the statute must be read in
their context and with a view to their place in the overall statutory scheme." Intercollegiate
Broadcast System, Inc. v. Copyright Royalty Bd., 571 F.3d 69, 91 (D.C. Cir. 2009) (quoting
Davis v. Mich. Dep't of Treasury, 489 U.S. 803, 809 (1989)). Although the statute only provided
set volumes for biomass-based diesel through 2012, the "overall statutory scheme" is to steadily
increase the use of renewable fuels, particularly advanced biofuels, and the factors EPA is to
consider in setting the volumes after 2012 are consistent with this scheme. The statute sets forth
an increasing volume requirement for advanced biofuels—an increasing requirement that can
statutorily, and practically, be filled by biomass-based diesel. [EPA-HQ-OAR-2015-0111-1953-
A2 p.24]
EPA also asserts that it is "important to provide support to existing successful biofuels and to
provide incentives for those fuels, especially advanced biofuels that produce the greatest
reductions in greenhouse gases." 80 Fed. Reg. at 33,102. The proposed program certainly does
not support biomass-based diesel that has already exceeded 1.7 billion gallons in production.
Rather, it keeps the program stagnant for the third consecutive year (much like the earlier
proposal that EPA withdrew). Since the industry already has capacity to more than double the
proposed increases, there is simply little incentive to continue to invest in an uncertain, and
clearly slow moving, future. [EPA-HQ-OAR-2015-0111-1953-A2 p.44-45]
EPA Previously Found Statutory Factors Support Greater Annual Increases in the Biomass-
Based Diesel Volume. Although EPA has expressed concerns with the timing of its final
determination for 2015, the industry has produced more than 1.7 billion gallons in one year and,
more importantly, has shown that it can ramp up production quickly. Thus, the minimal increase
from 2014 to 2015 should be reassessed. Moreover, EPA cannot override the statutory factors
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and only provide for 100 million gallon increases in the biomass-based diesel category for 2016
and 2017. Indeed, based on its review of the statutory factors, EPA increased the minimum
volume of 1 billion gallons in 2012 by 280 million gallons in 2013. This increase was viewed by
EPA as "moderate" in light of the evidence. EPA does not provide a reasoned explanation for
moving away from this analysis and precedent to now support only 30 million gallon increase in
2015 and 100 million gallon increases in 2016 and 2017. [EPA-HQ-OAR-2015-0111-1953-A2
p.55-56]
EPA's Denial of the API/AFPM Reconsideration Petitions provides further support that actual
and meaningful increases are warranted. For example, EPA referenced additional analyses of the
impacts of the drought conditions on soybean crops in 2012/2013, which confirmed that cost
considerations do not override the benefits of establishing a higher volume for biomass-based
diesel (at 6). EPA recognized a number of feedstocks can be used in the production of biomass-
based diesel, but also found that an increase of 280 million gallons of solely soybean-based
biodiesel would not unreasonably impact other markets for soybeans such as the livestock/food
industries. 56 Id. at 7-10. Much of the increase in production is from other feedstocks,
particularly corn oil from dry mill ethanol plants and recycled waste oils. EPA further found that
a waiver of the biomass-based diesel volumes would very likely increase feed costs. Id. at 8.
Thus, EPA found reducing the biomass-based diesel volumes, which EPA is essentially doing by
proposing a volume that will likely result in less biomass-based diesel production, "would cause
more economic harm than it would alleviate in food and feed markets." Id. at 8-9 (internal
quotation and citation omitted). [EPA-HQ-OAR-2015-0111-1953-A2 p.57]
While noting that EPA considered increased employment as part of idled facilities coming
online, EPA's Denial of the API/AFPM Reconsideration Petitions (at 18) also referenced more
recent EIA monthly reports which supported EPA's "assessment that increasing the biodiesel
requirement would result in new producers coming on line increasing employment." EPA
confirmed that "[b]ringing online idle biodiesel plants and expanding biodiesel distribution
infrastructure in the U.S. will increase both employment and promote rural economic
development." Id. at 16-17. EPA previously found that this evidence supports continued
increases in the biomass-based diesel required volumes. EPA, however, now ignores the
potential for idled plants or plants not running at full capacity will continue to do so without the
expected increase in the biomass-based diesel requirements. [EPA-HQ-OAR-2015-0111-1953-
A2 p.57-58]
Although EPA purports to provide an explanation as to why it believes "competition" (a new
consideration not found in the statute) should trump all these other statutory considerations,
EPA's revised approach at assessing these volume requirements are rendered arbitrary and
capricious in light of EPA's prior assessment. EPA provides no real evidence to support any of
its conclusory statements in support of its new approach that keeping the biomass-based diesel
volume artificially low will result in decreased costs. Even if it could, EPA cannot explain, in
light of its prior analysis, how those costs outweigh the substantial benefits that are being lost or
why larger annual increases in the biomass-based diesel program are not reasonable. Since
production in 2013 was over 1.7 million gallons, EPA's prior analysis shows why any applicable
volume for biomass-based diesel below 2 billion is unreasonable. [EPA-HQ-OAR-2015-0111-
1953-A2p.58]
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56 EPA rejected claims that a 10% variance in projected prices of soybeans and soybean oil is "significantly
higher," because observed soybean oil prices have fluctuated significantly over the last several years. Denial of
API/AFPM Reconsideration Petitions at 9-10.
Northern Canola Growers Association
As a canola farmer and director of the Northern Canola Growers Association (NCGA), I urge
EPA to support biomass-based diesel volumes of at least 2 billion gallons for 2016 and 2.3
billion gallons for 2017. [EPA-HQ-OAR-2015-0111-2036-A1 p.l]
Furthermore, for canola and other farmers, a viable biodiesel industry helps maintain a link
between vegetable oil and energy values, creates a floor for commodity values, and serves as a
hedge against energy inflation. Continued growth in the biodiesel industry is needed to realize
and optimize these benefits, and that growth can be prompted by increasing the RFS volumes for
biomass-based diesel beyond the levels in the Proposed Rule. [EPA-HQ-OAR-2015-0111-2036-
Al p.1-2]
The EPA itself has determined that biodiesel reduces lifecycle greenhouse gas emissions by 57
percent to 86 percent compared to petroleum diesel. Substituting higher amounts of biodiesel for
traditional diesel fuel is a simple, effective way to immediately reduce diesel emissions. Since
biodiesel provides a greenhouse gas benefit compared to the petroleum-based diesel it is
replacing, increasing its use will contribute to reduced climate change impacts. [EPA-HQ-
OAR-2015-0111-2036-A1 p.2]
Biodiesel has and will continue to create and sustain jobs in the United States, including many in
rural America. An economic study conducted for the National Biodiesel Board estimates that the
biodiesel industry, at 1.7 billion gallons of production, supports more than 62,000 jobs, $2.6
billion in wages, and $16.8 billion in overall economic impact. The industry's economic impact
is poised to grow significantly with continued production increases. The industry supports jobs in
a variety of sectors, from manufacturing to transportation, agriculture and service. [EPA-HQ-
OAR-2015-0111-2036-A1 p.2]
While this Proposed Rule is a step in the right direction for biomass-based diesel, it does not
fully capitalize on biodiesel's benefits and potential for growth. The U.S. biodiesel industry has
the capacity and has demonstrated its ability to increase production above the levels in the
Proposed Rule, particularly when you consider U.S. production capacity, feedstock availability,
and the potential for increased imports of biodiesel qualifying for the RFS. [EPA-HQ-OAR-
2015-01 ll-2036-Alp.3]
Petroleum Marketers Association of America (PMAA)
PMAA has no concerns regarding the proposed biodiesel blending volumes for 2014, 2015, 2016
and 2017 in the proposed rule. PMAA supports the use of biodiesel blends with motor fuel and
promotes its use in heating oil which produces lower CO2 emissions than natural gas at a 20%
blend. [EPA-HQ-OAR-2015-0111-1197-A1 p.l]
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Renewable Energy Group, Inc. (REG)
It is clear that the U.S. biodiesel industry has the ability and capacity to increase production
above and beyond the standards called for in your recent proposal, particularly when you
consider the potential for sharply increased imports qualifying for the RFS. [EPA-HQ-OAR-
2015-01 ll-1952-Alp.2]
South Dakota Soybean Association
According to the EPA, the U.S. biodiesel production capacity currently exists at 2.8 billion
gallons. Setting expectations far below 2.8 billion sends a signal to the industry that the U.S.
government doesn't want to grow its only commercially available advanced biofuel. Not setting
ambitious and aggressive goals for cleaner alternative fuels only deepens the hardships of future
generations. It is time that we make stronger policy signals for increasing our capacity to produce
cleaner fuels for a better tomorrow. [EPA-HQ-OAR-2015-0111-1308-A1 p. 1]
U.S. Canola Association (USCA)
I am writing to urge EPA to support biomass-based diesel volumes of at least 2 billion gallons
for 2016 and 2.3 billion gallons for 2017. [EPA-HQ-OAR-2015-0111-1819-A1 p.l]
EPA should reconsider the biodiesel standards in the Proposed Rule and finalize stronger
standards, particularly for 2016 and 2017. The biodiesel industry has previously requested
volumes of 2.4 billion gallons in 2016 and 2.7 billion gallons in 2017. While those volumes are
readily achievable and sustainable, particularly with rising imports, at a minimum EPA should
set the standards at not less than 2 billion gallons for 2016 and 2.3 billion gallons for 2017.
[EPA-HQ-OAR-2015-0111-1819-A1 p.4]
W2Fuel LLC
W2Fuel LLC is a small producer of biodiesel and glycerin with three biodiesel plants in Iowa
and Michigan. Our owner's investment in this business, as well as the jobs of 45 people, are at
risk due to the failure of the US Environmental Protection Agency to follow the statutory
requirements of the Renewable Fuel Standard, specifically as it relates to biodiesel renewable
volume obligations. The US Energy Information Administration has published data which shows
that the US biodiesel industry capacity is over 2 billion gallons per year; and yet the US EPA
published RVOs which are significantly below this annual capacity. [EPA-HQ-OAR-2015-0111-
2053 p.l]
The publication of volumes less than the statutory amounts for biodiesel; in combination with
allowing imports of biodiesel from other countries (including Argentina) greatly reduces the
ability of small producers to compete in a sector which is dominated by a few large companies.
Our company depends upon stable RIN values and the May 29th publication of volumes below
the industry capacity and statutory levels had an immediate impact in reducing RIN prices and
making our business immediately unprofitable. [EPA-HQ-OAR-2015-0111-2053 p. 1]
Our company has completed significant investment in processing crude glycerin to make refined
specialty products. The viability of this business venture depends upon a robust biodiesel
industry to produce high quantities of glycerin at low cost. This is one of the spin-off benefits of
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a thriving biodiesel industry and this also now is threatened by not following the statutory
mandates. [EPA-HQ-OAR-2015-0111-2053 p.2]
We encourage the US EPA to reinstate the full mandated biodiesel volumes as per the statutory
requirements. [EPA-HQ-OAR-2015-0111-2053 p.2]
Response:
EPA received many comments supporting an increase in the BED volume requirement for 2014-
2017. A number of commenters asserted that a proper reading of the statute, along with
Congressional intent, provides for yearly increases in the BED volume requirement. Some
commenters stated that an increased mandate was needed so that new bio-based diesel
conversion technologies would be developed, thus increasing cost-effective and competitive
production. Commenters asserted that increasing the BED requirement will allow small
producers to have a chance, not only to survive, but to grow and thrive. Commenters also stated
that biodiesel is helping to achieve our nation's goals for creating a stronger energy economy,
while strengthening energy security, reducing harmful emissions and helping consumers by
diversifying fuel supplies. A few commenters asserted that increasing BED is currently the best
option we have for significantly reducing greenhouse gas emissions from fuels by 50% while at
the same time spurring local and regional economic growth across the U.S. Many of these
comments, however, were not specific to the BED volume requirement, but touted the virtues of
biodiesel and the desire to increase the requirements for it more broadly.
Some commenters challenged EPA's statement that BED could continue to grow in the
undifferentiated advanced biofuels pool. Many commenters supported an increase of the BED
volume requirement to 1.7-2.0 billion gallons in 2015, 2.1-2.3 billion gallons in 2016, thereafter
increasing to 2.4-2.7 billion gallons in 2017. While many commenters asserted that not raising
the BED volume requirement beyond 1.8 in 2016 and 1.9 in 2017 would be a huge set-back and
ill advised, and contrary to Congressional intent, EPA disagrees. EPA notes that in 2012, and
again in 2013, the BED industry met and exceeded the applicable BED volume requirement of
1.0 and 1.28 billion gallons, respectively. The actual amount of BED available for compliance
in 2013 totaled 2.36 billion RINs, representing approximately 1.55 billion gallons of BED. This
is 430 million more BED RINs than were required for compliance with the BED standard in
2013 (see section II.B of the final rule for further discussion). Based on these facts, we believe
that the primary driving forces in 2012 and 2013 were the advanced biofuel and total renewable
fuel standards rather than the BED standard itself. We also believe that same dynamic will
continue to be true in 2016 and 2017. Based on the analysis for the final rule, we are
establishing a total renewable fuel volume requirement of 18.11 billion gallons for 2016 and
have used a volume of roughly 2.5 billion gallons of biodiesel and renewable diesel as the supply
available in determining total renewable fuel volume for 2016. We further anticipate that 2.1
billion gallons of this will be able to be advanced biofuel and have assumed so in establishing the
advanced biofuel standard. As in earlier years, our expectation is that in 2016, we are setting a
guaranteed floor for BED volume at 1.9 billion gallons and fully expect that additional BED
volumes will be produced to fulfill the overall advanced biofuel volume requirement.
NEB stated that the EPA previously found statutory factors supported greater annual increases in
BED volume requirement for 2013 and the statutory factors analysis developed to justify the
2016 and 2017 BED volume requirements contradicts the analysis EPA put forward in 2013.
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We disagree. As in 2013, we have determined that incremental increases in the 2016 and 2017
BED volume requirement are appropriate to provide continued support to the BED industry. We
did this in 2013, acknowledging the important role the industry thus far had played in providing
advanced biofuels to the marketplace, and in furthering the GHG reduction objectives of the
statute. We did not in 2013, and are not today, setting the BED volume requirement at the
maximum potential production volume of BED.
With regard to Congressional intent and statutory language requiring that we increase the BED
volume, EPA also disagrees. Congressional intent and statutory interpretation is discussed in
RTC Section 2.3.1. In summary, the statute does not, establish any numerical criteria, or other
means of weighing the importance of the often competing factors, nor does it provide any
overarching goals for EPA to achieve in setting the applicable volumes in years after those
specifically set forth. Rather, EPA is required under 21 l(o)(2)(B)(ii) to determine the
applicable volume, in coordination with the Secretary of Energy and the Secretary of
Agriculture, based on a review of the implementation of the overall renewable fuel program
during calendar years for which the statute specifies the applicable volumes and an analysis of
six (6) statutory factors. However, as we state in the final rule, EPA recognizes that BED is not
merely a component of advanced biofuel and total renewable fuel, but that Congress intended
that it have its own specific standard.
NBB also asserts that EPA's proposal makes "competition" (a new consideration not found in
the statute) the deciding factor in the statutory analysis and that this approach is arbitrary and
capricious in light of EPA's prior assessment. Further they believe that EPA provides no real
evidence to support this new approach. EPA disagrees with these comments. When viewed in a
long-term perspective, BED can be seen as competing for investment dollars with other types of
advanced biofuels for participation as advanced biofuels in the RFS program. In addition to the
long-term impact of our action in establishing the BED volume requirements, there is also the
potential for short-term impacts during the compliance years in question. Although we are
setting the advanced standard at a level that reflects growth in volumes that is reasonably
attainable, we are not setting the standard at the maximum theoretical level that reflects the
highest potential for domestic production plus import. As described in Section II.F of the final
rule, there is substantial uncertainty, especially regarding import volumes, that cautions against
such an approach. Therefore, by setting the BED volume requirement at a level lower than the
advanced biofuel volume requirement (and lower than the expected supply of BED to be used to
satisfy the advanced biofuel requirement), we are allowing the potential for some competition
between BED and other advanced biofuels (including imported advanced biofuels) to satisfy the
advanced biofuel volume standard. We believe that this competition will help to encourage, over
the long term, the development and production of a variety of advanced biofuels. In the short
term it could also result in lower cost advanced biofuels for consumers.
BED, like all non-cellulosic advanced biofuels, must, by definition, achieve lifecycle greenhouse
gas reductions of at least 50% relative to the petroleum fuels it displaces. Thus, the
environmental benefits of BED are comparable to those of other non-cellulosic advanced
biofuels. Increasing the portion of the advanced standard that comprises a guaranteed market for
BED would over time likely reduce competition among advanced biofuels and could dis-
incentivize research and development of advanced biofuels that are potentially more economical
or environmentally preferable (including for non-GHG related reasons) than BED. Having a
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more limited assortment of biofuels participate in the RFS program could also reduce the
potential energy security benefits of the program, since energy security is enhanced through fuel
diversity. Thus, we believe that the long term success of the RFS program, as envisioned by
Congress, is best served by growth in a variety of advanced biofuels. The standards we set today
are intended to provide a signal to the market to move forward with research, development, and
commercialization of a variety of types of advanced biofuels beyond just BED.
We also believe that consideration of competition within the advanced biofuel pool between
BED and other advanced biofuels, and the potential for lower compliance costs cited in our
proposed rule, are included in the list of factors in 42 U.S.C. § 7545(o)(2)(B)(ii)(V) that EPA is
to consider in establishing the volume requirement for BED. Indeed, three of the factors
specified in the statute are related to the considerations discussed above. The "impact of the use
of renewable fuels on the cost to consumers of transportation fuel and on the cost to transport
goods" referenced in CAA 21 l(o)(2)(B)(ii)(V) is relevant, since we believe a diverse advanced
biofuel pool will potentially result in decreased costs associated with the use of advanced
biofuels and, consequently, decreased costs to consumers. Similarly, the "impact of the
production and use of renewable fuels on the environment" referenced in CAA
21 l(o)(2)(B)(ii)((I) is relevant, since we believe that incentivizing research and development in,
and commercialization of a variety of advanced biofuels could lead to the development of
biofuels that have more benign effects on the environment than those that are currently available.
As noted above, "the impact of renewable fuels on the energy security of the United States"
referenced in CAA 21 l(o)(2)(B)(ii)(II) is relevant, since we believe that incentivizing the
development of a diverse array of biofuels will increase energy security Finally, we note that the
list of factors specified in the statute is not exclusive; that is EPA is not precluded from
considering additional factors that advance the statutory objectives when it sets applicable
volumes for years not specified in the statute.
One stakeholder quoted the following text from EPA's final decision denying a request for
reconsideration of the 2013 BED volume requirement of 1.28 billion gallons: "[T]he fact that
the statute provides a mechanism for increasing the required volume of biomass-based diesel
above the 1.0 billion gallon minimum level is a clear indication that Congress intended EPA to
increase the applicable volume of this fuel." By quoting this text out of context, the stakeholder
implies that EPA views the provision at CAA 211 (o)(2)(B)(ii) as defaulting to annual increases
in the volume requirement for BED unless there is a compelling reason not to increase it.
However, the full text makes it clear that EPA does not hold this view.
The American Soybean Association noted that there are a number of factors that will result in
additional feedstock and biodiesel for the U.S. market and there are numerous benefits that
would be gained from implementing volume requirements of at least 2.0 for 2016 and 2.3 for
2017. Specifically, they pointed out that demand for U.S. soybean oil for food use began to
decline following the U.S. Food and Drug Administration's (FDA) action in 2003 to require food
manufacturers to include trans-fats on nutrition labels. They stated that the likely continued
displacement of additional soy oil from food use would make additional soy oil available for
biodiesel feedstock. We acknowledge the trend of declining soybean oil use in food, and believe
it will continue as a result of a June 2015 FDA determination requiring the elimination by 2018
of all partially hydrogenated oil in food use. To the extent that soy oil is being phased down for
food purposes, some supply of soy oil will likely become available for other uses, such as
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biodiesel production. However, the impact on biodiesel production volumes is not likely to be
substantial, particularly for 2016, for two reasons. First, the FDA action will not be complete
until 2018. Second, as mentioned above, the removal of some soy oil from food will likely be
offset by an increase in the use of other oils in food, with a corresponding reduction in the
availability of those other oils for use in making biodiesel. Regardless, it is worth highlighting
that while we have set the applicable volume for the BED standard at 1.9 billion gallons for
2016, we anticipate at least 2.1 billion gallons will be required to comply with the advanced
biofuel standard, even greater than the 2.0 billion gallons referenced by the commenter.
After considering all comments received, past implementation of the program, and the statutory
factors, we have determined that an increase in the BED standard to 1.9 billion gallons in 2016
and 2.0 billion gallons in 2017 would support the overall goals of the program while also
maintaining the incentive for other advanced biofuels to participate in the RFS program. We
believe this final rule strikes the appropriate balance as envisioned by the RFS statute, between
providing a market environment where the development of all advanced biofuels is incentivized,
while also realizing the benefits associated with increasing the required volume of BED. Given
our final volume for advanced biofuel in 2016, setting the BED standard in this manner
continues to allow a considerable portion of the advanced biofuel volume to be satisfied by either
additional gallons of BED or by other unspecified types of qualifying advanced biofuels. While
we have not yet determined the applicable volume of total advanced biofuel for 2017, we
anticipate the continued growth in the advanced biofuel standard such that the advanced standard
will provide an incentive for both increasing volumes of BED and other advanced biofuels. We
believe maintaining this unspecified or other advanced biofuel volume will provide the incentive
for development and growth in other types of advanced biofuels. At the same time, allowing the
portion of the advanced biofuel volume requirement that is dedicated to BED to increase
concurrently with the increase in the overall advanced biofuel volume requirement will
contribute to market certainty for both the BED industry and the renewable fuels program in
general.
3.5.2 Comments Supporting Biomass-Based Diesel Volume Requirement No
Higher Than 1.28 Billion Gallons
Comment:
Countrymark Cooperative Holding Corporation
[W]e average just under 2% biodiesel in all of our diesel fuel on an annual basis. We have a
customer base that desires renewable fuels; however, we still cannot meet our obligation purely
through blending renewable fuels. Therefore, we are a net purchaser of RINs and as such we
must plan for our compliance at the start of each calendar year. [EPA-HQ-OAR-2015-0111-
2264-A1 p.2]
II. 2014 Standards
Since there was no other planning resource to use and EPA did not finalize the standards in a
timely manner, we were forced to plan to use those standards that were proposed in 2013 as our
planning guide for 2014 compliance.
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Even though EPA reduced the total renewable fuel requirement in this new proposed standard,
they raised the advanced biofuel percentage and subsequently the nested requirements for
biomass-based diesel and cellulosic biofuels. The change in cellulosic is almost double and will
cost over $35,000 for additional waiver credits. This is small compared to the financial impact
on changing the advanced and total categories. Biodiesel is the only advanced biofuel that we
can blend on a commercial scale to satisfy the obligation for both the biomass-based diesel and
the advanced biofuel categories. At the end of 2014, we had either blended and/or purchased
nearly all of our D4, D5, and D6 RINs for compliance. With the new standards, we became short
on D4 and D5 RINs and long on D6 RINs. In addition, D6 REST price dramatically decreased
while D4 and D5 stayed the same or increased. Both of these combined have a real economic
impact of over $1.1 million which is a direct impact on CountryMark income.
CountryMark nor any company should be financially penalized because EPA did not set the
compliance standards in a timely fashion. Therefore, we recommend that the 2014 standards
remain the same as those proposed in November 2013 which is closer to the intended timeline set
by the law. [EPA-HQ-OAR-2015-0111-2264-A1 p.2-3]
If the annual obligation continues to increase as indicated by the EPA there are only two options
for compliance at this time:... 2) Blend additional biodiesel. Diesel fuel specification, ASTM D-
975, allows for up to 5% biodiesel to be blended within the specification. One approach would
be to blend 5% biodiesel from March through November and not provide a choice to our
customers. This lack of choice may negatively impact diesel sales volumes. Plus, this approach
would still require purchasing additional RINs for compliance. [EPA-HQ-OAR-2015-0111-
2264-A1 p.7]
In addition, EPA should reduce the biomass-based mandate to reflect an annual average of 2%
biodiesel in the diesel fuel market. [EPA-HQ-OAR-2015-0111-2264-A1 p.8]
Unilever
Another concern for Unilever is the significant reduction in the mandates for cellulosic biofuels
(0.2 billion gallons in 2016). Unilever fully supports the development of cellulosic biofuels and
believes EPA should direct resources to support the scaling up of that market. The consequence
of cellulosic biofuels being unable to meet its intended production levels is that biodiesel has
been called upon to fulfill an increasingly large portion of the advanced biofuels RFS. We urge
EPA to adjust down the total advanced biofuel mandate in tandem with reductions in the
cellulosic mandate. [EPA-HQ-OAR-2015-0111-2273-A2 p.2]
In conclusion, we would urge EPA to issue a final rule that maintains the advanced and biomass-
based biodiesel levels included in the proposal for 2014/2015 and reduce the proposed mandate
for 2016 to the level proposed for 2015. [EPA-HQ-OAR-2015-0111-2273-A2 p.3]
Phillips 66
As EPA is aware, biomass-based diesel (BMBD) differs from the other categories as the statute
does not prescribe biomass-based diesel volumes after 2012. The statute sets a 1 billion gallon
minimum or floor and EPA must establish the volume standard based on an analysis of six
different criteria. The statute also requires EPA to provide 14-months lead time when
establishing the biomass-based diesel standard. Obviously, EPA cannot meet the 14 month
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window for the 2014, 2015 or 2016 BMBD standards therefore they are limited from increasing
the volume requirement. The API/AFPM comments construct the argument that EPA is limited
to setting the standards for 2014, 2015, and 2016 to no higher than 1.28 billion gallons. In fact,
this volume is what EPA proposed for 2014 and 2015 in the proposed rule published in
November, 2013. EPA acknowledged in that proposal that "the statute requires that we finalize
these biomass-based diesel volume requirements no later than 14 months before the first year for
which that volume requirement will apply." We agree that given the statutory language, EPA
cannot increase the biomass-based diesel standards prior to 2017.
American Fuel & Petrochemical Manufacturers and American Petroleum Institute (API)
EPA Does Not Have the Authority to Increase the Biomass-Based Diesel Requirements for
2014,2015 or 2016
In this regard, section 21 l(o)(2)(B)(ii) is clear: EPA cannot alter its most recent determination
for 2013 of 1.28 billion gallons, because this is the highest volume for which obligated parties
have had the requisite advance notice and an opportunity to comment on EPA's application of
the six statutory criteria.21 Indeed, the soonest that EPA can go beyond the 1.28 billion gallons
would be 2017, providing it complies with the statute's 14-month lead time requirement and
issues a final rule prior to November 1, 2015. Any higher applicable volume for biomass-based
diesel (or percentage standard based on this volume) for any year covered by the Proposed Rule
would be contrary to the plain language of the statute.
In the re-proposal, however, EPA willfully ignores both the plain language of the law and the
Agency's own understanding of that statutory text by proposing to increase the biomass-based
diesel standards for 2014-2016. As explained below, obligated parties require the certainty of
having final RFS standards prior to the start of the compliance year - as the Clean Air Act
clearly requires in order to make operational, logistics, and investment decisions that are
necessary to comply with the final standards. Setting RFS standards retroactively or without
proper lead time is directly converse to the statutory scheme and objectives of the program. EPA-
HQ-OAR-2015-0111-1948-p 14]
We note that setting the biomass-based diesel RFS at 1.28 billion gallons for 2014-2016 does not
restrict additional biomass-based diesel from being sold in the market. Biomass-based diesel
producers are able to sell as much of their product as consumers demand. The nesting of
renewable fuel requirements in the EISA mandate allows discretionary volumes of biomass-
based diesel to be consumed, if biomass-based diesel is cost-competitive with alternative
advanced biofuels and renewable biofuels. Setting a higher level for the biomass-based diesel
standard within the advanced biofuels mandate achieves no incremental benefit, while limiting
compliance flexibility and potentially increasing compliance costs. As incremental volumes of
biomass-based diesel can be used to demonstrate compliance in the advanced biofuel category,
EPA cannot and should not go beyond 1.28 billion gallons in 2014, 2015 or 2016. [EPA-HQ-
OAR-2015-0111-1948-p 15]
We note also that it is inappropriate for EPA to conclude that there is no harm to obligated
parties because the number of RINs from biodiesel consumption in 2014-2016 would exceed
1.28 billion gallons. The RFS puts obligations on specific obligated parties, not on the industry
as a whole. Thus, although there was apparently excess biodiesel consumed in 2014 when
compared with the 1.28 billion gallon proposed standard, this does not mean that all obligated
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parties have sufficient biomass-based diesel RINs to meet the increased standards. EPA's
disregard for the plain language of the law, upon which such obligated parties may have
justifiably relied, harms those obligated parties. [EPA-HQ-OAR-2015-011 l-1948-p!6]
Response:
Some commenters suggested the EPA was prohibited from increasing the biomass-based diesel
standard above 1.28 billion for the 2014 through 2016 time period because obligated parties did
not have notice of EPA's intention to increase the biomass-based diesel standard above this
amount at the times EPA missed the statutory deadlines for establishing applicable BED volume
requirements for these years
We disagree with those commenters who argued we were prohibited from finalizing BED
volume requirements above 1.28 for 2014-2016. We also disagree with Countrymark's request
to finalize the 2014 RFS standards, including the BED standard, as proposed in 2013. After
review of comments submitted by obligated parties, while we receive comments theorizing
potential adverse impacts from some, we received specific comment only from Countrymark
stating they would be adversely impacted by increasing the 2014 BED standard.
We believe that obligated parties, including Countrymark, were on notice that the BED volume
requirements for 2014 could be higher than 1.28 billion gallons. First, while in the November
2013 NPRM we proposed 2014 and 2015 BED volume requirements of 1.28 million, we also
requested comment on alternative approaches and higher volumes. We noted in the NPRM that
total biodiesel production by the end of 2013 could be as high as 1.7 billion gallons and that the
facilities contributing to this production collectively had a capacity of well over 2 billion gallons.
Thus, Countrymark and other obligated parties, were certainly on notice by November 2013 that
a final BED volume requirement greater than 1.28 billion gallons was possible and could be used
in deriving the final 2014 BED standard. Furthermore, they were provided with notice of the
precise volume requirement for 2014 being finalized today through the June 10, 2015 NPRM.
Thus, we believe that parties had adequate notice. We further note that the standard is being set
at the production level the market actually reached, so while individual parties may need to
acquire RINs, the market collectively should have no difficulty supplying the requisite number of
RINs. Finally, to provide those parties who may need additional time to engage in RIN trading
to obtain the right number and balance of RINs for 2014 compliance, EPA is providing very
extensive extensions of the normal compliance demonstration deadlines. For 2014, the deadline
in today's rule is August 2, 2016, two months later than proposed and a full 8 months after
signature of this rule. Since compliance can be achieved through acquisition of RINs in the
marketplace, and does not require capital investments or actual renewable fuel blending, we
believe that this amount of lead time for parties to come into compliance is adequate and
reasonable.
Countrymark asserts that they relied on the November 2013 NPRM in planning 2014 compliance
for all four of the renewable fuel standards, and requesting that in fairness EPA not now impose
a higher obligation for that year. In reply we reiterate that parties were on notice through the
November 2013 NPRM that EPA could finalize higher volume requirements than proposed. It is
the nature of proposed rules that EPA review comments and consider changes, so our doing so
should not come as a surprise to anyone. In addition, the tables of applicable volumes in the
statute have long provided notice with respect to advanced biofuel, total renewable fuel and
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cellulosic biofuel that volume requirements could be as high for those fuels as are specified
there. We believe that once this commenter complies with the 2014 advanced biofuel and total
renewable fuel volume requirements regarding which such extensive notice was available, that
compliance with the 2014 BED volume requirement will likely either be satisfied, or easily
satisfied. Even if the party needs to adjust the types of advanced biofuel RINs they own to
ensure sufficient BED RINs, they will be able to see the non-BBD advanced RINs for a nearly
identical price. (See "RIN Prices in 2015 (January - October)" memorandum from Dallas
Burkholder to docket EPA-HQ-OAR-2015-0111). And as noted above, EPA is extending the
compliance demonstration deadline for 2014 from that which was proposed, allowing this party
and any other similarly situation sufficient time to engage in the needed RIN transactions.
Even if Countrymark or any other obligated party faced compliance challenges for 2014, CAA
21 l(o)(2)(5)(A)-(D) provides two compliance flexibility options that any obligated party may
utilize if they are unable to meet any of the 2014 standards, including their 2014 BED volume
obligation, with RINs generated in 2014. First, to the extent that any shortfall of BED RINs
might exist, an obligated party, could utilize carryover BED RINs (D4) to meet their compliance
obligation. As we discussed in Section II.H of the final rule, carryover RINs were intended to
provide flexibility for obligated parties in complying with the RFS standards in a variety of
circumstances. Certainly, if an obligated party experiences a shortfall in complying with the
BED 2014 volume standard it would be an appropriate use of carryover RINs to meet
compliance obligations. Based on available data in the EMTS system, we estimate that there are
about 600 million carryover BED RINs available for use in 2014. This number of BED
carryover RINs should be available for purchase on the RIN market (since if they are not used in
2014 they will expire), and together with available RINs generated in 2014 make up a substantial
RIN pool from which obligated parties may acquire needed RINs. However, if an obligated party
was either unable to generate or purchase the necessary carryover RINs to meet its compliance
obligation, they could alternatively use the carry-forward deficit provision of CAA
21 l(o)(2)(5)(D) to carry forward the deficit for one year on the condition that it be met the
following year.
In addition, the same number of BED RINs will likely be retired for compliance with the 2014
RFS standards whether we set the BED volume requirement at 1.28 versus 1.63 billion gallons,
because complying with the 2014 advanced and total renewable fuel standards will require
retirement of the same number of RINs associated with 1.63 billion BED gallons. In light of this
fact, the ease with which RINs may be traded, as well as the availability of carryover RINs and
the deficit carry-forward option, we are not persuaded that any obligated party will have more
difficulty complying with a 1.63 billion gallon BED volume requirement as compared to a 1.28
billion gallon BED volume requirement. Therefore, we do not believe that sufficient
justification has been presented by commenters for EPA to deviate from the proposed approach
of setting the 2014 BED volume requirement as equal to the 2014 BED volume. We believe that
lowering the proposed 2014 BED volume requirement would send a potentially chilling message
to investors in the BED industry that would be contrary to the objectives of the CAA to
incentivize the growth of renewable fuel volumes.
Furthermore, we believe the justification for setting BED volumes for 2015-2017 above 1.28
billion gallons is even stronger, considering there was greater notice for these standards, the 2015
standards are also being set at the level of expected actual production with additional time for
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compliance, and we expect that compliance with the total renewable fuel standard for 2015 and
2016 will have a significantly greater influence on RIN prices and parties' compliance strategies
than the BED standard.
Countrymark also states that they average just under 2% biodiesel in all of their diesel fuel on an
annual basis due to customer preference and therefore they recommend that the EPA reduce the
biomass-based mandate to reflect an annual average of 2% BED volume in diesel fuel. We
disagree with this recommendation. As discussed in section II.E.S.v of the final rule, biodiesel is
typically distributed in blended form with diesel fuel as varying blends from B2 up to B20.
Given that the fundamental objective of the RFS provisions under the CAA is to increase the use
of renewable fuels in the U.S. transportation system every year through at least 2022 in order to
reduce greenhouse gases (GHGs) and increase energy security, we believe that the increases
being finalized for BED are appropriate and that the compliance flexibilities afforded obligated
parties allow individual refiners to determine what is the best strategy for their business over
time. To the extent that consumer response to the availability low level biodiesel blends (B5 or
less) has been generally positive, it does not appear that there is a significant impediment to
growth in biodiesel. Section HE of the final rule provides additional discussion on this topic.
Unilever called on EPA to direct resources to the development of cellulosic biofuel to reduce the
demand for biomass-based diesel and to reduce the advanced volumes. The cellulosic volumes
for 2016 in this final rule, which are equal to the expected production volumes, are intended to
provide the appropriate incentives for the cellulosic biofuel industry. Any other support is
beyond the scope of the rule. EPA has set the advanced volumes at reasonably attainable levels,
rather than the maximum attainable levels, for the reasons described in the preamble.
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4. Proposed Cellulosic Biofuel Standards
4.1 General Comments on Cellulosic Biofuels
Comment:
AJW, Inc.
EPA appears to assume as fact a "financial incentive provided by cellulosic biofuel RINs"26
without evidence of any consideration given to the ways its proposal creates uncertainty around
demand for D3/D7 RINs. Uncertainty about whether any premium exists for cellulosic biofuel
would eliminate EPA's assumed "incentive" to produce it. The NPRM lacks evidence that EPA
carefully weighed its obligation to "provide appropriate certainty" for renewable fuel producers
and "to limit any potential misuse of cellulosic biofuel credits".27 [EPA-HQ-OAR-2015-0111-
2268-Alp.l5]
There is no question that EPA understands Congress "intended the RFS program to create
incentives to increase renewable fuel supplies and overcome limitations in the market".28 Equally
clear is that EPA aims to "put renewable fuel production and use on a path of steady, ambitious
9Q
growth." "...particularly renewable fuels with the lowest lifecycle GHG emissions, in the
transportation fuel supply."30[EPA-HQ-OAR-2015-0111-2268-Al p. 15]
Less clear is why EPA offers no information about its consideration related to cellulosic biofuel
growth analogous to the steps it proposes "in order to help provide stability to the BED
industry"31 and to "allow these BED production facilities to operate with greater certainty."32
[EPA-HQ-OAR-2015-0111-2268-Alp.l5]
To the extent that EPA considered the possibility that cellulosic biofuel production above its
2016 estimated levels will erode D3/D7 RIN value - and thus, the incentive to produce cellulosic
biofuel - the NPRM reveals nothing about EPA's views. Nor is it clear that EPA has given
thought to ways in which CWC use could result in a similar negative effect on D3/D7 RIN value.
Since the D3/D7 price spread versus D5 RINs is the primary incentive for cellulosic biofuel
production, EPA's silence regarding how best to maintain that spread suggests that it may not
have fully met the obligations created by CAA § 21 l(o)(7)(D)(iii). [EPA-HQ-OAR-2015-0111-
2268-Alp.l5]
EPA is clearly attempting to comply with the Court's direction by using a "neutral methodology"
in establishing applicable volumes. However, given the uncertainty regarding actual production
and the possibility that cellulosic waiver credits (CWCs) may be used even when D3/D7 RINs
are available in the market, EPA has proposed a system that is biased toward ensuring a surplus
of D3/D7 RIN supply rather than a neutral balance between RIN availability and applicable
volumes. [EPA-HQ-OAR-2015-0111-2268-A1 p. 16]
As Table IV-1 illustrates, the EPA neutral methodology for establishing applicable volumes,
combined with the use of CWCs, ensures that regulated entities are able to comply with the law
even when supplies fail to meet EPA's estimates. Conversely, when supply of RINs exceeds
EPA's estimate, or anytime CWC's are used for compliance in lieu of available RINs, the market
result is that some quantity of D3/D7 RINs will not be needed for compliance purposes. When
EPA shifts all of the market risk onto a single class of market actors - renewable fuel producers
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- its approach can hardly be thought of as "neutral". [EPA-HQ-OAR-2015-0111-2268-A1 p. 16-
17] [The table can be found on p. 17 of Docket number EPA-HQ-OAR-2015-0111-2268-A1]
The problems of market uncertainty and instability would be particularly exacerbated if the
methodology for determining applicable volume is based solely on projected production volume.
In such circumstances, if it appeared that production volumes might exceed EPA's "neutral"
projection, current D3/D7 RIN prices would be depressed and there would be an anticipated
overhang of available volume clouding the picture for future years, just as Stock describes.
[EPA-HQ-OAR-2015-0111-2268-A1 p. 18]
On the other hand, if EPA implements a methodology that will count all available D3/D7 RINs
in its projection of volume available under CAA Sec 21 l(o)(7)(D)(i), it will materially stabilize
D3/D7 REST markets, reduce uncertainty and promote investment in cellulosic biofuel. This is
because, if it appeared that production volumes would exceed EPA's "neutral" projection of
volume available in a given year, that year's D3/D7 REST prices would be stabilized by the
knowledge that any surplus volume in the given year would be available to contribute to EPA's
projection of available volume in the next year. [EPA-HQ-OAR-2015-0111-2268-A1 p.18]
Furthermore, the material impact of EPA's decision about its methodology for determining
available volume will be felt in 2016 and will apply to 2016 D3/D7 RINs. This is because EPA's
decision on methodology will play a major role in determining the risk profile of acquiring and
holding D3/D7 RINs in both 2016 and future years. [EPA-HQ-OAR-2015-0111-2268-A1 p. 19]
We believe market participants cannot reasonably expect EPA to provide absolute certainty
about how the market will develop. However, they certainly should be able to expect that EPA
will inform them about the rules it will apply to the use of 2016 D3/D7 RINs that will be
generated under the November 30, 2015 final rule on 2016 RVOs. In particular, EPA should
certainly be able to inform market participants whether it intends to include surplus production,
as represented by the amount of available carryover D3/D7 RINs, in its future projections of
volume available and, where appropriate, soften the limit on the use of carryover D3/D7 RINs.
This choice will have a substantial impact on market volatility and certainly falls within the
scope of EPA's statutory obligation to "provide appropriate certainty for regulated entities and
renewable fuel producers".[EPA-HQ-OAR-2015-0111-2268-A1 p. 19]
As a result, in its final rulemaking in November 30, 2015, EPA should determine and report how
it intends to treat carryover D3/D7 RINs generated in 2016.[EPA-HQ-OAR-2015-0111-2268-A1
p.19]
27CAA§211(o)(7)(D)(iii).
28 [EPA-HQ-OAR-2015-0111; FRL-9927-28-OAR] I. p.6.
29 Ibid, p.7.
30 Ibid.
31 Ibid, III.D.3, pp. 76-77.
32 Ibid.
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American Fuel & Petrochemical Manufacturers and American Petroleum Institute
First., the statute requires EPA to obtain the required EIA estimates for cellulosic biofuel
production and place it in the docket for this rulemaking. See 42 U.S.C. § 7525(o)(7)(D)(i).
These estimates are not only mandated by the statute, but they are intrinsic to the calculation of
annual percentage standards. It is well settled that "[a]n agency commits serious procedural error
when it fails to reveal... the technical basis for a proposed rule in time to allow for meaning
commentary." Connecticut Power & Light Co. v. Nuclear Regulatory Comm 'n, 673 F.2d 525,
530-31 (D.C. Cir. 1982); see also Chamber of Commerce of U.S. v. SEC, 443 F.3d 890, 901-06
(D.C. Cir. 2006) (vacating a rule on that basis). EPA's failure to obtain and publish the EIA
estimates for cellulosic biofuel production renders the cellulosic biofuel volume requirements for
2015 and 2016 arbitrary and capricious. [EPA-HQ-OAR-2015-0111-1948-A1 p.48]
Anonymous Citizen 6
Environmental concerns abound when discussing fuel emissions and their impact on the
environment. Knowing what we know now, plans for alternative fuel run the gamut and choices
are being made in an effort to preserve air quality. Currently, the Environmental Protection
Agency (EPA) has a proposal that could alter this quandary. The plan is to impose standards
regarding biofuels incorporated in imported gasoline and diesel. A problem exists because
production performance is not up to par when using cellulosic biofuels.
The problem with cellulosic fuel is the definition has not remained static. When the EPA keeps
redefining what cellulosic means, it causes confusion and an inability for conformation. The
EPA recently amended the definition to include liquefied and compressed natural gas produced
from biogas and landfills. (1) Before this change, what was deemed cellulosic fuel produced
amounted to just over four thousand gallons in a seven month period. (2) Post-amendment, that
number grew to over three million gallons in an eight month period. (3) So, before the EPA
implements regulation on production, it should create a proper definition of what actually
constitutes cellulosic fuels.
The problem is that, per legislative requirement, the technology still does not exist to
economically produce cellulosic biofuels. (4) The EPA is getting away with this by redefining
what constitutes cellulosic biofuels.
(1) http://www.epa.gov/otaq/fuels/renewablefuels/documents/420fl4045.pdf
(2) http://dailycaller.com/2014/10/02/epa-expands-biofuels-defmition-to-inflate-production-
numbers/
(3) http://www.epa.gov/otaq/fuels/rfsdata/2014emts.htm
(4) http://instituteforenergyresearch.org/analysis/epa-moves-goalposts-new-definition-cellulosic-
biofuels/
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Clean Energy Renewables
In order to help address this, we therefore request that EPA make a prominent and clear
statement in the Final Rule that EPA intends the cellulosic RVOs to include all cellulosic biofuel
projected volume available each year, up to the statutory volumes. [EPA-HQ-OAR-2015-0111-
1908-A1 p.5]
We understand that EPA has the authority to adjust the RVO to account for actual biofuel
production after the Final Rule is published if EPA receives new information that was not
available to them at publication and the information substantially impacts the rule. We request
that EPA include a statement about EPA's authority and description about this amendment
process in the Final Rule. [EPA-HQ-OAR-2015-0111-1908-A1 p.5]
Governors' Biofuels Coalition
If the EPA does not change its interpretation of the RFS2 for 2016 volumes, big ethanol
companies won't build another cellulosic ethanol plant in the United States. Instead, they will
look to China, South America, and other regions that have stable biofuels policies. In fact,
DuPont announced just last week that it will build no new cellulosic ethanol production facilities
in the United States because of "policy uncertainty" and will instead license the innovative
technology used at its Iowa plant to overseas investors. [EPA-HQ-OAR-2015-0111-1722-A1
p.5-6]
ICM
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 314.]
Cellulosic ethanol must stand on the shoulders of a strong starch, corn-starched ethanol industry.
We need the stability of the original, congressionally mandated RVO volumes. Allow the ethanol
industry to do its job. Keep the RFS on track.
Independent Fuel Terminal Operators Association (IFTOA)
Specifically, the Association recommends the following: [EPA-HQ-OAR-2015-0111-1947-A1 p.
8]
5. EPA's assessment of the availability of future cellulosic biofuel is optimistic; therefore, the
Agency should give greater weight to the uncertainties identified in the proposed rulemaking and
reduce the cellulosic biofuel mandate; [EPA-HQ-OAR-2015-0111-1947-A1 p. 9]
6. EPA should rescind the 2011 cellulosic biofuel mandate for the reasons stated in the proposed
rulemaking; [EPA-HQ-OAR-2015-0111-1947-A1 p. 9]
Iowa Farm Bureau Federation (IFBF)
This proposal would halt new investments in cellulosic biofuels and introduce detrimental
ambiguity in a market that is still developing. A significant reduction in the 2015 and 2016
volume requirements would slow or halt investments in the infrastructure needed to distribute
and dispense larger volumes of ethanol. As mentioned previously, Iowa has two state of the art
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cellulosic ethanol plants in Iowa. Further investment in these facilities and new cellulosic
facilities is essential to meeting the goals laid out in the RFS2. The proposed reduction of the
RVO creates a signal that turns away and creates a disincentive for investments in these new
technologies. [EPA-HQ-OAR-2015-0111-1717-A1 p. 1]
Iowa Renewable Fuels Association
It may be worth noting that exactly 18 months ago (January 27, 2014) IRFA submitted
comments to EPA on the original proposed rule for the 2014 volume requirement. While that
proposal was ultimately pulled and the RFS has been "paused" in what amounts to "limbo" for
the last year and a half, time in the real world did not stand still. It might be worthwhile to
consider some of what has occurred during that time. [EPA-HQ-OAR-2015-0111-1957-A2 p. 1]
The comments submitted by IRFA 18 months ago remain relevant today and will be attached to
this submission (attachment A). However, we would have to make some edits, mostly to the first
paragraph. Back then we noted that Iowa was home to four cellulosic ethanol projects. Today, on
the positive side, two of those projects1 have begun operations2 and a third should be operational
in a matter of just a few months.3 However, the fourth plant - an innovative trash-to-ethanol
project - cited uncertainty over the future of the RFS when shifting the focus of its work and
investments to other fields.4 [EPA-HQ-OAR-2015-0111-1957-A2 p. 2]
Along the same lines, DuPont recently noted during a round of meetings in Washington, D.C.,
that despite its original business plan to focus licensing activity in the United States, it did not
have a single serious discussion about licensing its cellulosic ethanol technology with any
company in the U.S. due to uncertainty over the RFS. However, DuPont did have serious
discussions ongoing in Europe, South America, and China. In fact, DuPont recently announced
that the first license agreement for their cellulosic ethanol technology was signed with a Chinese
firm.5
[Attachment A can be found on p. 22-90 of docket number EPA-HQ-OAR-2015-0111-1957-A2]
1 Eller, Donnelle. "Iowa has first gallon of cellulosic ethanol." The Des Moines Register 2 Jul 2014
http://www.desmoinesregister.com/storv/monev/business/2014/07/02/first-gallon-cellulosic-ethanol-produced-
iowa/11955195/
2 Eller, Donnelle. "Emmetsburg cellulosic ethanol plant: Fuel for the future." The Des Moines Register 4 Sep 2014
http://www.desmoinesregister.com/story/monev/agriculture/green-fields/2014/09/03/poet-dsm-celebrate-opening-
cellulosic-ethanol-plant/15025949/
3 Gantz, Rachel. "DuPont Plant Late October Grand Opening for Cellulosic Ethanol Plant." Oil Price Information
Service 10 Jun2015
4 Smith, Rick. "Trash-to-biofuel takes new turn in Marion." The Gazette. 16 Apr 2015
http://thegazette.com/subject/news/trash-to-biofuel-takes-new-turn-in-marion-20150416
5 Doering, Christopher. "China to license DuPont technology to build ethanol plant." The Des Moines Register 16
Jul 2015 http://www.desmoinesregister.com/story/monev/agriculture/green-fields/2015/07/16/dupont-china-
cellulosic/30234437/
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Minnesota State Senate
Furthermore, if EPA and the government turn their backs on the production of conventional
biofuels, it will have a devastating effect on the full-scale commercialization of next generation
biofuels, such as cellulosic biofuel from agricultural waste. The biofuels industry has just begun
the commercialized production of next generation of biofuels. Now would be the worst possible
time to take a step backward. [EPA-HQ-OAR-2015-0111-3284-A1 p.2]
Novozymes Americas
There are limitations in supplying the statutory volumes of cellulosic biofuel to obligated parties
in 2014, 2015 and 2016. [EPA-HQ-OAR-2015-0111-3277-A1 p.l]
Novozymes does not agree that the current proposal is forward-leaning and consistent with the
statute's intent to promote growth in renewable fuel use. EPA-HQ-OAR-2015-0111-3277-A1
p.2]
POET-DSM Advanced Biofuels
As we explain, the NPRM's proposed reductions in those RVOs will have a devastating impact
on the cellulosic ethanol industry, and make it impossible for our industry to survive and prosper
in the United States. [EPA-HQ-OAR-2015-0111-1943-Al p.2]
Both at the time when the POET-DSM joint venture was formed and for the foreseeable future,
the commercial value of cellulosic ethanol in the United States depends fundamentally on the
price of corn-starch ethanol. [EPA-HQ-OAR-2015-0111-1943-Al p.4]
Having now presented and documented what we believe to be the generally recognized
commercial method of pricing cellulosic ethanol, and having provided a full range of Project
LIBERTY'S costs of production,25 POET-DSM believes that EPA must explain why the
proposed conventional biofuel RVOs will not have the impacts that we predict. We believe there
is no gainsaying the evidence we have offered to predict those impacts, nor the experience of the
producer who, in early 2014, pointed out that "fund[ing] the production of our cellulosic fuels ...
at a significant loss relative to the prices we would expect to receive from our customers" is not
sustainable.26 [EPA-HQ-OAR-2015-0111-1943-A1 p. 10]
In our analysis, there is a significant gap between the costs of producing cellulosic ethanol and
value that the market assigns to cellulosic ethanol, which we believe cannot be ignored in
assessing the economic impacts of the NPRM's proposed action. If EPA's analysis depicts a
smaller gap between costs and prices, and on that basis the Agency finds no need to modify the
NPRM's proposed conventional biofuel RVOs, how large a gap would EPA consider to be
significant enough to warrant modification of the NPRM's proposal? If the Agency cannot
provide a specific value or range of values that would warrant such a modification, how should
stakeholders attempt to determine the type or level of disparity between costs and prices that, in
EPA's view, would warrant a change in the NPRM's proposal? [EPA-HQ-OAR-2015-0111-
1943-Alp.l2]
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25 See Cummings Decl. U 4.
26 See note 16 above.
Poet, LLC
B. Undercutting the Base Renewable RVOs would destroy the future ofcellulosic ethanol in the
United States.
POET - one of the world's largest investors in cellulosic biofuels - expects to stop all future
U.S. cellulosic investments if the NOPR's Base Renewable fuel requirement is not strengthened.
As of 2013, POET had planned to extend cellulosic technology to 25 plants in the POET network
(in addition to Project LIBERTY) and beyond that to other corn ethanol plants in the United
States, a fact that EPA had previously noted with approval.8 This NOPR - and EPA's prior 2014
RVO proposal - have created barriers to these plans that can only be surmounted if EPA
drastically changes its approach and requires improved Base Renewable volumes. [EPA-HQ-
OAR-2015-0111-2481-A1 p.6]
Organizations representing dozens of stakeholders have commented to President Obama that
EPA's undercutting first generation biofuels would have serious collateral impacts that "scuttle
U.S. investment in advanced, low-carbon biofuels."21 Numerous other reports and analyses have
also demonstrated how undercutting first generation biofuels would undermine the development
of advanced biofuels, including analysis by environmental and various third-party, non-partisan
organizations.22 Given the importance of the Base Renewable RVOs to cellulosic biofuel
development, those Base Renewable targets for 2014 to 2016 must be raised. [EPA-HQ-OAR-
2015-01 ll-2481-Alp.8]
[The following comments were submitted as testimony at the Kansas City, Kansas public
hearing on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1044, pp. 199-201.]
In addition, the lack of infrastructure stifles investment in cellulosic production by creating
uncertainty in market access for cellulosic ethanol gallons.
The reduction in the RFS volumes will also have a chilling effect on future investment in ethanol
cellulosic production. To date, POET and other producers have invested hundreds of millions of
dollars in this area in the belief that the RFS would remain intact and there would be a market for
their production. These are long-term decisions based on consistent energy policy. By reducing
the RFS volumes and providing no incentive for infrastructure development, the EPA has
signaled that additional investment in cellulosic ethanol production is not justified.
Quad County Corn Processors Cooperative (QCCP)
In recent years, the component of the above equation that has the largest effect on the final
cellulosic biofuel value is the prevailing market price for corn starch ethanol. Thus, any action
that weakens the market value of corn starch ethanol also has the unintended consequence of
reducing the cellulosic biofuel value proposition. [EPA-HQ-OAR-2015-0111-1817-A1 p.3]
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EPA's proposal to reduce the undifferentiated renewable fuel portion of the RFS by 8 percent in
2014, 11 percent in 2015, and 7 percent in 2016 has undoubtedly reduced demand and prices for
corn starch ethanol (including the value of the D6 RIN). Indeed, D6 RIN prices averaged 71
cents in May, but plunged following the release of EPA's proposal on May 29, averaging just 44
cents in June and July. As such, prospective values for cellulosic biofuel have also suffered.
[EPA-HQ-OAR-2015-0111-1817-Alp.3]
Syngenta
EPA's proposal has already cast a shadow of doubt over the soundness of future investments in
biofuels. If finalized, EPA's rule will not only affect access to credit for ethanol plants for
increased capacity expansions, new technologies and equipment, but there will also be no
certainty for Syngenta and other companies to count on in order to continue making large
investments in the biofuels space. [EPA-HQ-OAR-2015-0111-2493-Al p.4]
ZeaChem Inc.
Given that the actual cellulosic biofuel production capacity in 2013 was significantly less than
what was prescribed under EISA, EPA is within its waiver authority as defined in the law at 42
U.S.C. 7545(o)(7)(D) to adjust the renewable volume obligations for cellulosic biofuels down to
actual production volumes for 2014 and through the publishing date for the final rule in 2015 and
reasonable projected volumes for the remainder of 2015 and 2016. [EPA-HQ-OAR-2015-0111-
1906-A1 p.3]
Response:
EPA believes that there are limitations to supplying the statutory volumes of cellulosic biofuel in
2014, 2015, and 2016, and that EPA's proposed cellulosic biofuel standard reductions were
within its authority. We also affirm, as requested by a commenter, that we intend the cellulosic
RVOs established in this final rule to include all cellulosic biofuel projected volume available
each year, up to the statutory volumes.
One commenter claimed that EPA has assumed, without evidence, that the RFS program
provided a financial incentive for the production of cellulosic biofuel, and that EPA had not
appropriately considered the possibility that production exceeding our estimates could negatively
impact the cellulosic biofuel RIN value. The commenter expresses concern that the uncertainty
in the program could eliminate incentives for cellulosic biofuel production and questions why
EPA does not consider putting in place analogous provisions to those for the BED standard to
provide greater certainty. EPA does not believe that the current structure of the RFS program is
so uncertain as to eliminate incentives for the investment in and growth of cellulosic biofuels.
This is supported by the reported cellulosic RIN prices of as much as a dollar providing a
substantial subsidy for the growth that we are now seeing in cellulosic biofuel volumes and the
increased standard we have finalized. Further, the commenter's statements that the support for
the cellulosic standard is inferior to that for the BED standard is flawed. For the BED standard
we are setting the standard below the volume we anticipate might be available to meet the
advanced biofuel standard. In comparison, we are setting the cellulosic biofuel standard at 100%
of the volume we anticipate will be available to meet the advanced biofuel standard. To date, the
market has yet to meet or exceed the cellulosic standards that we have finalized, whereas the
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market has typically exceeded the BED standard and we expect it will do so again in 2016.
Nevertheless, EPA has, and will continue to carefully monitor the cellulosic biofuel RIN market
to determine whether or not the RFS program is having the intended effect with regard to
incentivizing cellulosic biofuel production. EPA has reviewed cellulosic RIN price and sales
volume data available through EMTS. This data strongly suggests that cellulosic biofuel RINs
are trading at values in excess of other RIN types, and that obligated parties are actively
purchasing cellulosic biofuel RINs, thus providing the intended incentives. Consequently, there
does not appear to be any need for regulatory changes at the present time.
Several commenters suggested that the possibility that excess cellulosic RINs could be generated
in any year, combined with the availability of cellulosic waiver credits, creates the possibility
that there could be a surplus of cellulosic biofuel RINs in a given year, and that this could
negatively impact the value of cellulosic RINs. One commenter states that EPA is attempting to
comply with the court decision requiring a neutral methodology but is not ensuring a neutral
balance between RIN availability and applicable volumes. To protect against this possibility,
they requested that EPA state their intention to include any available carry over RINs in the
cellulosic biofuel standard for the following year. EPA does not believe it would be appropriate
to make such a statement at this time, especially in light of the insignificant number of cellulosic
biofuel RINs we project will be available for use in 2016.29 We are setting the 2014 and 2015
cellulosic biofuel standards at their actual and projected levels respectively, providing little to no
opportunity for generation of carryover RINs that can be used in 2016. EPA disagrees that the
court decision requiring a neutral aim at accuracy in its annual assessment of projected cellulosic
biofuel production requires a neutral balance between RIN availability and applicable volumes.
There were no cellulosic carryover RINs available at the time of the court decision, and the issue
before the court was whether EPA had introduced an upward bias in its projection of the volume
of cellulosic biofuel that would be produced in the coming year. Thus, we do not believe that the
court decision resolves the issue of how cellulosic carryover RINs should be considered in the
context of the setting the annual cellulosic biofuel volume requirement. EPA notes that EMTS
data indicates that cellulosic RINs are generally being purchased by obligated parties, and that
the number of RINs held by an obligated party reduces the number of waiver credits that can be
purchased for compliance (See 40 CFR 80.1456(c)). Thus available evidence at this time does
not appear to support the commenters' concern. Instead of taking any action now, EPA will
reserve this issue for further consideration in the future when and if there are carryover cellulosic
RINs in light of the information available at the time.
A commenter requested that EPA include a statement in this final rule about our authority to
adjust the RVO after the final rule is published if we receive new information that was not
available at the time of publication that substantially impacts the rule. We acknowledge that in a
response to petition for reconsideration we adjusted the 2013 cellulosic biofuel standard after
issuing the final rule. The grounds for petitions for reconsideration are described in CAA section
29 See "Estimating Carryover RINs Available for Use in 2014," memorandum from Dallas Burkholder to docket
EPA-HQ-OAR-2015-0111. We estimate there are approximately 20,000 cellulosic carryover RINs available for use
in 2014. Because we are establishing the 2014 standard at the number of RINs available for compliance and the
2015 standard at the level projected to be available for compliance it is unlikely that the number of carryover RINs
available for use in 2016 will be appreciably different than the 20,000 RINs available for use in 2014. Including an
additional 20,000 RINs in our projection of available volume of cellulosic biofuel for 2016 would have no impact on
the percentage standard.
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307(d)(7)(B). As a general matter, however, we do not have an amendment process for the
annual rulemaking and we generally do not believe it appropriate or wise to reopen rules every
time new information becomes available. We believe the need for market certainty generally
outweighs the interest in adjusting final volumes to reflect new information, but this may depend
on the significance of the new information. We will resolve such matters on a case-by-case basis
in reviewing petitions for reconsideration, or in deciding on our own initiative if new information
warrants an amendment of the regulations.
A commenter stated that because EPA had not published EIA estimates of cellulosic biofuel
production in the docket that the cellulosic biofuel volume requirements for 2015 and 2016 were
arbitrary and capricious. EPA had not yet received a projection of cellulosic biofuel production
from EIA at the time of our proposal. In our proposed rule and supporting documentation we
provided descriptions of the cellulosic biofuel producers we expected to produce cellulosic
biofuel in 2015 and 2016, the relevant information on each company we used for the basis of our
volume projections, and the manner in which we proposed to use this information to determine a
final volume projection for each year. In this final rule, after receiving the estimate of cellulosic
biofuel production from EIA, we have included this letter in the docket and considered EIA's
projection as we determined final cellulosic biofuel volumes for 2015 and 2016. We believe the
proposed rule provided adequate notice of our approach and supporting information, and the
final rule is a logical outgrowth of the proposal. It is neither arbitrary nor capricious.
Several commenters suggested that EPA should change its interpretation of our general waiver
authority to incentivize ethanol companies to build cellulosic ethanol plants in the United
States. Another commenter stated that our proposal with respect to the total renewable fuel
standard (waiving below statutory volumes) would halt new investment in cellulosic biofuels,
and the infrastructure needed to distribute additional volumes of cellulosic ethanol. They argued
that without strong support for increasing corn ethanol volumes, the cellulosic biofuel goals of
the statute could not be achieved, or that investment would be made in foreign countries rather
than in the United States. We do not believe it would be appropriate, nor in the best interest of
the RFS program, to establish total renewable fuel requirements beyond the ability of the market
to meet these volumes in an effort to support the market for cellulosic ethanol plants in the
United States, nor do we think this would be effective in achieving the desired outcome (See
below for a further discussion of this issue). Rather than taking a step backwards, as some
commenters characterized our proposed rule, this rule is intended to provide incentives for
continued growth in the renewable fuels market, while at the same time providing the market
with the certainty necessary to achieve this growth, particularly in the advanced biofuel and
cellulosic biofuel markets. We also note that fuels other than ethanol can and are being used to
meet the cellulosic biofuel requirements and that there is no requirement in the statute that the
cellulosic biofuel standard be met with ethanol. We nevertheless note that the cellulosic standard
finalized includes 100% of the volume of cellulosic biofuel that we project will be produced,
including all of the cellulosic ethanol projected to be produced, regardless of challenges of the
market to go significantly beyond the E10 blendwall.
One commenter suggested that EPA's assessment of the availability of cellulosic biofuel in
future years was optimistic, and that we should reduce the cellulosic biofuel volumes. We
disagree that the volumes are optimistic, and note that cellulosic biofuel production in 2015
through September is on pace to exceed the projection in our proposal. For more information on
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our updated projections of available volumes of cellulosic biofuel in 2014, 2015 and 2016 see
Section IV.E and IV.F of the final rule.
Two commenters claimed that the proposed RFS standards are not high enough to incentivize
cellulosic biofuel production. One stated that our proposal did not reflect that we considered the
impact of the reductions in conventional biofuel volumes on the cellulosic industry. They assert
that the price that can be obtained for cellulosic ethanol is tied to the value of conventional
ethanol. They argue that we should take this impact into account in deciding the extent to which
we should use our waiver authorities in the final rule. We acknowledge that use of either waiver
authority is discretionary, and therefore we are authorized to consider possible impacts of our
action on the cellulosic biofuel industry. We also acknowledge our decisions on final advanced
biofuel and total renewable fuel volume requirements could influence the price renewable fuels
and their associated RINs. However, the concern raised by the commenter appears to hinge on
fears of depressed conventional ethanol prices leading to depressed cellulosic biofuel prices. We
do not expect that our final action will depress conventional ethanol prices or D6 RIN prices, so
even if the commenters' assessment of cellulosic biofuel pricing were accurate we do not expect
our action would depress the values of cellulosic ethanol. Furthermore, while the information
presented by the commenter on how obligated parties can comply with the cellulosic component
of their RFS obligations is correct, we disagree with the equation presented to calculate the
expected gross cellulosic price. This equation fails to consider that the corn starch ethanol
futures price (which they use as part of the equation for calculating the expected price for
cellulosic ethanol) includes the value of the D6 RIN. This value must be subtracted from the
corn starch ethanol futures price before the advanced RIN price and CWC price are added.
Further, we note that the price of the CWC assumed in the equation presented by the commenter
is significantly lower than the CWC price for 2016 ($0.30 rather than $1.33). Because the value
of the D6 RIN must be subtracted from the ethanol price in this equation, driving corn ethanol
prices higher by increasing the value of the D6 RIN would not increase the value received for
cellulosic ethanol. We also note that even if the equation presented by the commenter is
corrected as discussed above it would only be a reasonable estimation of the value for cellulosic
ethanol, not representative of all cellulosic biofuel. The expected value of non-ethanol cellulosic
biofuels are not expected to be significantly impacted by the value of corn ethanol or D6 RINs,
however the advanced RIN prices and CWC price are expected to impact the expected value for
non-ethanol cellulosic biofuel.
As a final point, we do not believe it would be appropriate based on the information currently
before us to increase the total renewable fuel standard in an effort to provide increased support to
the cellulosic biofuel industry. Setting a higher total renewable fuel standard could lead to
increased corn ethanol and conventional RIN prices, but would also potentially lead to
noncompliance by obligated parties, or a substantial carry-forward of RVO obligations into
future years. Furthermore, lowering the advanced biofuel standard to allow more use of
conventional fuel under the total renewable fuel standard could result in less use of advanced
biofuels, and therefore less GHG emissions reduction. We believe that our final action is
appropriate since it will avoid these types of adverse consequences, provides substantial support
to the cellulosic industry through a separate cellulosic biofuel standard, and is unlikely to lead to
the consequences feared by the commenter.
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The cellulosic waiver credit price was established by Congress, presumably to protect consumers
in the case where cellulosic biofuels could in theory be produced, but were profitable only at
prices Congress viewed as excessively high. This appears to be the commenter's view of the
current situation. We do not believe it would be an appropriate exercise of our discretion to
limit (or forgo) the exercise of our waiver authorities in an effort to cause a rise in the prices of
corn ethanol, D6, and D5 RINs in an effort to make cellulosic ethanol production viable.
A commenter noted comments from a potential cellulosic biofuel producer stating that due to
uncertainty over the RFS there were better market opportunities internationally than in the
United States. The volumes in this final rule are intended to address the uncertainty related to
the incentives provided by the RFS program. Despite this, we expect that potential cellulosic
biofuel producers will continue to consider markets other than the United States and make
investment decisions based on a number of different market factors.
A commenter objected to EPA's continuing evaluation and addition of potential cellulosic
biofuel production pathways, specifically mentioning cellulosic biofuel produced for CNG/LNG
derived from biogas. They claimed that this approval was motivated by the desire for increased
cellulosic biofuel production in light of the limited production from previously approved
pathways. EPA strongly disagrees with this comment. We believe it would be inappropriate to
have a static list of pathways for the production of cellulosic biofuel that does not consider new
feedstocks, production technologies, or fuel types. Doing so would limit innovation in the
cellulosic biofuel market. We also note that we conducted a public notice and comment
rulemaking process for the addition of CNG/LNG derived from biogas, and that this rulemaking
was finalized on the basis of the available data and relevant statutory provisions rather than the
desire for additional volumes of cellulosic biofuel.
EPA received support for rescinding the 2011 cellulosic biofuel standard, and we are finalizing
this action in this rule.
4.2 Cellulosic Biofuel Volume Assessment
Comment:
Abengoa Bioenergy
EPA has proposed to violate this requirement. In an across-the-board fashion, EPA has
unilaterally decided to treat its direct discussions with producers as inherently inaccurate, stating,
'...we have decided to treat these company projections as the high end of a potential production
range unless this volume exceeds the volume calculated using our six-month straight-line
rampup period methodology, suggesting that these company projections are unreasonably high.'
Such unilateral dismissal of company projections as 'unreasonably high' — without regard to the
particular facts and circumstances relevant to each company at issue — is arbitrary and non-
neutrally tilted toward inaccuracy in one particular direction. EPA should continue to hold
discussions with the identified producers to update its projections; additionally, EPA should hold
discussions with identified foreign cellulosic biofuel producers and with producers awaiting
pathway approvals to assess their intentions and relevant factual circumstances and include them
as appropriate in setting the cellulosic requirement. EPA has expressed its awareness that its
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projections can change market behavior, and it should be as wary of setting the RVOs too low as
it is of setting them too high. [EPA-HQ-OAR-2015-0111-2474-A1 p.9]
EPA also proposes to set the low-end of a projected range for cellulosic biofuel RVOs 'based on
the volume of RIN-generating cellulosic biofuel the company has produced in the most recent 12
months for which data is available.' And for the 2014 and 2015 final rules, EPA states, 'We
intend to update the low end of the projected production range for each company using data from
the most recent 12 months for which data is available.' The American Fuel and Petrochemical
Manufacturers advocated the adoption of this methodology for setting the cellulosic biofuel
RVOs and it is not a neutral methodology. Because the advanced biofuel industry is currently
starting up first-of-a-kind biorefineries, the past 12 months of production is an intentionally low
estimate of future production. Only through consultation with the individual producer can EPA
confirm an accurate and neutral pace of production scale up. [EPA-HQ-OAR-2015-0111-2474-
Al p.9]
EPA has also excluded volumes of cellulosic biofuels from pathways that have yet to be
approved. This all-or-nothing exclusion decision, which tilts in a direction away from accurate
prediction, chills investment for the identified companies and discourages these companies —
and others — from completing the lengthy approval processes for pathways and renewable fuel
producers. EPA should anticipate (and actively work to complete) the timely approval of
pathways and registration processes and should accurately include in the 2015 and 2016 RVOs
all reasonably anticipated volumes from companies that intend to begin producing during the
compliance years.[EPA-HQ-OAR-2015-0111-2474-Al p. 10]
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
Second, as noted above, EPA continues to employ the same flawed methodology for projecting
cellulosic biofuel production in this proposal. EPA's overall process is becoming increasingly
complicated with the present inclusion of landfill biogas fuels, for which limited production data
is currently available. As established above, EPA's projections "fail to take neutral aim at
accuracy" because they are inconsistent with the data that are available. [EPA-HQ-OAR-2015-
0111-1948-A1 p.48]
Biotechnology Industry Organization
With its newly proposed methodology, EPA deliberately sets the risk of underestimation to
outweigh the risk of overestimation. Through the first six months of 2015, cellulosic CNG/LNG
producers generated more than 48 million RINs. That is already equal to 69 percent of the 70
million gallons that EPA estimates as the industry sector's total production capacity for the entire
year. EPA thus is demonstrably underestimating the cellulosic sector's production potential, and
the final rule should correct this undershooting problem. The final rule should use the most
accurate, relevant, and reliable data available, and should not rely on stale information that may
lead to inaccurate underestimation.205 [EPA-HQ-OAR-2015-0111-1958-A2 p. 60]
205Cfidat33139&n.l07.
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ExxonMobil Refining & Supply Company
Take into account the history of low cellulosic biofuel production and remaining significant
technical and economic challenges, and set the cellulosic standards at demonstrated, not
projected volumes. [EPA-HQ-OAR-2015-0111-2270-A1 p.l]
Response:
One commenter objected to EPA's treatment of cellulosic biofuel production projections from
discussions with potential producers as the high end of a potential production range. They
claimed that this suggested EPA viewed these projections as unreasonably high, and that this was
arbitrary and tilted EPA's projections towards inaccuracy. As discussed in Section IV of the
final rule, we note that historically the production projections obtained by EPA from potential
producers have over-estimated actual production by a wide margin. Despite this, EPA has not
chosen to dismiss these projections as unreasonable, but has instead treated them as the high end
of a potential production range. For this final rule we have continued to collect and use this
valuable information in this way. We believe that this is appropriate in light of the historic over-
estimations from potential producers, including many expected to produce cellulosic biofuel in
2014 and 2015, and the inherent uncertainty associated with these projections.
This commenter also objected to using the production over the most recent 12 months as the low
end of the range. They state that this is not a neutral methodology because the cellulosic biofuel
industry is in the start-up stage, and that it would lead to intentionally low estimates of future
production. Other commenters suggested that in light of the history of low cellulosic biofuel
production volumes and significant technical and economic challenges EPA should extrapolate
past projection (such as the 3 most recent months) to project future production. EPA believes
that a simple projection of historical data is not an appropriate method for projecting future
production from a new industry. Nevertheless, we do believe that the historical data provides a
useful perspective and should be considered. We have therefore used the production of
cellulosic biofuel over the past 12 months as the low end of a possible production range in the
future, as we proposed (see Section IV of the final rule for a further discussion on this issue).
A commenter also stated that EPA should anticipate the approval of new pathways and included
volumes from these yet to be approved pathways in our projection of cellulosic biofuel
production. We do not believe this would be appropriate, as final decisions as to whether or not
these fuels will qualify as cellulosic biofuel have not been made. We also note that very few, if
any of the pathways that have been submitted for consideration as cellulosic biofuels would be in
a position to produce fuel in 2016 even if their petitions were approved in the very near future.
The time lag for production is such that it may be possible to consider volumes for them in 2017,
but production of meaningful volumes from pathways that have not yet been evaluated in 2016 is
highly unlikely.
A commenter claimed that EPA's projection methodology are growing increasingly complicated
and that they are not neutral projections because they are inconsistent with the data that are
available. We disagree with this comment. While projecting volumes of landfill biogas using a
slightly different methodology does complicate our projections, it is appropriate in light of the
significant differences in the uncertainties associated with liquid biofuel production and the
production of CNG/LNG derived from biogas. It is also the case that past production data are
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not the only data available, and we believe that considering supplemental data, such as the
projected start-up dates and capacities of new production facilities, enhances our projections.
Another commenter stated that our projection methodology deliberately set the risk of
underestimating potential production volumes higher than the risk of overestimating production
volumes. To support this they noted that in the first six months of 2015 69% of the cellulosic
biofuel RINs needed to satisfy the proposed cellulosic biofuel standards had already been
generated. EPA's does not agree with the claim that our methodology is intentionally designed
to underestimate potential volumes; rather, it is intended to be a neutral methodology. Based on
the comments received on this rule and the production rates of cellulosic biofuel noted by this
commenter we have adjusted the methodology used to project the production of CNG/LNG
derived from biogas, which is by far the largest source of cellulosic biofuel in 2014 and
2015. We believe that increasing the percentile value within the projected range for CNG/LNG
producers based largely on their production history relative to the company projections of the
past year (the first year for which data is available for these facilities) is appropriate. This has
resulted in higher projections of cellulosic biofuel production for 2015 and 2016. We continue to
believe that an approach that considers both company specific projections and information, as
well as previous production history in projecting likely production volumes of cellulosic biofuel
is the best method available, and superior to methods suggested by commenters that consider
only previous cellulosic biofuel production (and thus ignore the potential for production form
new facilities or increased production from existing facilities) or information and projections
provided by potential cellulosic biofuel producers (which ignores the history of over-estimation
by these parties).
4.2.1 Potential Domestic Producers
Comment:
Abengoa Bioenergy
Finally, it should be noted that in proposing to exercise its waiver authority on the basis of
infrastructure constraints (an approach that is subject to the defects explained above), EPA has
not in fact considered the market's so-called ability to supply various fuels to the cars that can
use them. In implementing the cellulosic waiver authority to reduce the advanced and overall
volumes of biofuels, EPA states, 'Our proposed justification for doing so is a limitation in the
availability of qualifying advanced biofuel and constraints on the ability to supply qualifying
renewable fuels to the vehicles that use them.' Yet EPA has not done any analysis of the
availability of vehicles that can utilize cellulosic CNG or LNG fuels or any other advanced
biofuel. [EPA-HQ-OAR-2015-0111-2474-A1 p.10]
This is the case even though the Agency projects that cellulosic RVOs for 2014-2016 will be met
primarily with CNG and LNG fuels. Nevertheless, BIO is confident that EPA has underestimated
the cellulosic industry's ability to supply such fuels. According to DOE's Alternative Fuels Data
Center and Clean Cities 2015 Vehicle Buyer's Guide, in the United States there are currently
143,000 vehicles that utilize LPG (representing 10 vehicle models) and 2,600 fuel stations to
supply the fuel to the vehicles that can use them. There are additionally 150,000 vehicles that
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utilize CNG (representing 17 vehicle models) and 750 fueling stations. EPA's inconsistency in
applying its proposed approach further demonstrates that it has not adequately considered or
justified the approach. Even if EPA's proposed approach were proper, EPA would be required to
take full account of the actual capacity of the industry to supply CNG, LNG, and other fuels, and
to adjust its volume predictions accordingly. [EPA-HQ-OAR-2015-0111-2474-A1 p. 10-11]
American Council on Renewable Energy (ACORE)
Historically, RNG projects have sent much of their gas to utilities for electricity generation. As
long-term electricity contracts are coming offline, RNG producers are choosing to send their gas
to its highest and best use - transportation fuel. This change of end use does not mean the project
is new in the same way that a newly constructed project is new. USEPA needs to differentiate
between these two types of "new" projects. Registration requires facility developers to show
their contracts for the sale of their biogas to a compressed natural gas or liquefied natural gas
facility, so there is no possibility that they would sell their gas to "non-transportation markets."
Registered facilities have sufficiently demonstrated their commitment to supply fuel under the
program. USEPA should not discount them in the 25th percentile, as 25% likely to follow-
through. [EPA-HQ-OAR-2015-0111-1926-A1 p. 17]
American Farm Bureau Federation (Farm Bureau)
For instance, a 20 million gallon per year cellulosic ethanol plant in North Carolina is currently
being built and expected to be at full capacity by 2016. The plant's main feedstocks will rely on
cellulosic materials such as miscanthus, switchgrass and wood scraps and will be grown on
approximately 30,000 acres of marginal land by farmers close to the refinery. In addition, North
Carolina pork producers are part of the blueprint in the overall project plan, and the plan targets
land used for spreading lagoon effluent. The energy grasses, switchgrass and miscanthus will be
able to fully utilize the nitrogen and phosphorus derived from the manure and can help in
producing good crop yields while helping with a farmer's overall manure management system.
By the time the plant is fully operational, it is expected to create more than 300 jobs, and USDA
estimates that this project will help pork producers net $4.5 million per year in increased revenue
while continuing to help remove effluent from the state's pork industry. Creating uncertainty
around the RFS2 would put such current and future investments in question. It could erode
investor confidence in producing new and efficient technologies that would provide market
opportunities for all of agriculture, including both row-crop and livestock sectors. [EPA-HQ-
OAR-2015-0111-2355-A1 p. 3]
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
Furthermore, EPA's projection of LNG/CNG includes several invalid assumptions in the
estimation of potential future volumes. Specifically, the Proposed Rule uses a 25th percentile
estimate of production for facilities that have not yet generated a cellulosic biofuel RIN. This
approach is overly optimistic for the following reasons:
Not all new facilities are capable of producing transportation-grade biogas. Of the approximate
640 US landfill biogas projects, it is estimated that less than 8% produce a high BTU gas capable
of being upgraded into a transportation-grade biogas.87'88 An even smaller percentage of high
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BTU projects exist for digester and other biogas projects. [EPA-HQ-OAR-2015-0111-1948-A1
p.46]
Facilities producing biogas-derived cellulosic fuel need to be located near an existing pipeline to
enable movement to areas where biogas-derived cellulosic fuel will be utilized by the
transportation fleet. Since most biogas-derived cellulosic fuel is consumed in California, pipeline
transportation is required (except for small quantities currently used in local fleet use). It is
unreasonable to assume that all facilities not currently generating cellulosic biofuel RINs would
be located near a pipeline. [EPA-HQ-OAR-2015-0111-1948-A1 p.46]
There are alternative uses and competition for biogas-derived cellulosic fuel. State renewable
portfolio standards (RPSs) require an increasing amount of renewable electricity. One cost-
effective method of meeting the RPS requirements is through the use of biogas to generate
electricity. Also, many biogas facilities use at least a portion of the generated biogas to generate
local power. Any additional existing capacity would need to be diverted away from these uses.
[EPA-HQ-OAR-2015-0111-1948-Alp.46]
Given these factors, a more appropriate method for estimation of cellulosic-derived biogas RINs
is to look at historic proven RIN generation and project cumulative volumes. The EPA proposal
lists cellulosic-derived biogas RIN generation from August 2014 through May 2015. A
cumulative total over the ten months of reporting shows that approximately 69 million cellulosic-
derived biofuel RINs were reported (blue line in plot below). The 2015 data for January through
May shows a cumulative production of 36 million cellulosic-derived biofuel RINs. Projecting
this data out to December 2015 and using the slope of the total cumulative production since
August 2014, gives a production estimate of 87 million cellulosic-derived biogas RINs for 2015
(green project on line). [EPA-HQ-OAR-2015-0111-1948-A1 p.46]
In a recent example, the Coalition for Renewable Natural Gas estimated that August 2014 to
December 2014 Cellulosic Biogas Production would be 69 million equivalent gallons,89 more
than twice the actual production of less than 33 million equivalent gallons during that period. In
this RFS proposal, EPA is basing its projections on input collected from the Coalition for
Renewable Gas. We continue to recommend that EPA use historical production data when
setting the annual cellulosic biofuel standard. Otherwise, the Proposed Rule will fail to "take
neutral aim at accuracy." [EPA-HQ-OAR-2015-0111-1948-A1 p.47]
87 Biogas Opportunities Roadmap, US Department of Agriculture, Aug 2014
88 EPA Landfill Methane Outreach Program, http ://www. epa. gov/lmop/documents/xls/opprj slmopdata. xlsx. Last
Available July, 2015
89 Presentation by Coalition for Renewable Natural Gas, Waste to Biogas & Clean Fuels Finance & Investment
Summit, Santa Clara, CA March, 2015.
Biogas Researchers Inc. (BR)
In order to apply a neutral methodology, EPA should develop similar methodologies to calculate
projected cellulosic RINs that will be generated under the RE Pathway that it used to project
cellulosic RINs that will be generated under the biogas to CNG/LNG pathway. That is, EPA
should develop a RE Pathway equivalent of the Burkholder Biogas Memorandum (i.e. by
collecting data on the magnitude of expected RIN generation from the RE Pathway).
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EPA's approval of any registration application under the RE Pathway (such as, but not limited
to, a forthcoming BTR registration application, described in further detail in Attachment 2 ) will
significantly impact the production of cellulosicbiofuel. [EPA-HQ-OAR-2015-0111-A1 p. 2-3]
To the extent that BTR has done so, EPA should include BTR's estimates for RIN generation
under its pathway in an equivalent manner to how it considered pending registrants under the
CNG/LNG pathway in the Burkholder Biogas Memorandum. [EPA-HQ-OAR-2015-0111-A1 p.
3]
EPA has not considered the extent to which increased renewable electricity production and
increased EV sales will significantly increase the use of renewable fuels. The renewable
electricity pathway—which has already been approved by EPA—can capitalize on existing
vehicles (EVs) with highly efficient motors that utilize a new renewable fuel: renewable
electricity. Moreover, EV battery improvements, reduced manufacturing costs, expansion of
access to charging stations, and the actions described in the government's Biogas Opportunities
Roadmap will all contribute to the increased production and consumption of renewable
electricity within the timeframe of the 2014-2016 RVO Rule. In order to put D-3 RIN volumes
"on a path of steady, ambitious growth,"11 we request that EPA take the level of expected D-3
RIN generation from the RE Pathway into consideration when setting the cellulosic RVOs for
2014, 2015, and 2016. [EPA-HQ-OAR-2015-0111-A1 p. 4]
BR's equivalence value application has significant potential impacts on this proceeding. To the
extent that EPA agrees with BR and modifies the equivalence value of electricity consumed by
electric vehicles when assigning RINs under the RE Pathway, the oversupply of cellulosic RINs
as compared to the proposed RVO will be even more significant.
Specifically, in Attachment 1, BR provides an estimate of the projected supply of D-3 RINs from
the RE Pathway after properly accounting for an adjusted equivalence value. [EPA-HQ-OAR-
2015-0111-A1 p. 7]
11NOPR, 80 Fed. Reg. at 33102.
Biotechnology Industry Organization
New cellulosic biofuel eligibility (e.g. biogas) and new cellulosic biofuel capacity creates an
overarching risk (especially in the next few years) that D3 RIN production will exceed the
annual RVOs on a year-to-year basis. EPA must instead set the cellulosic RVOs for 2015 and
2016 according to a neutral methodology that fully accounts for industry's intentions to produce
the fuel. [EPA-HQ-OAR-2015-0111-1958-A2p. 60]
California Dairy Campaign
In 2013, the industry began producing commercial quantities of cellulosic biofuel at two
different facilities. These facilities are now producing the world's lowest carbon fuels. There are
six additional commercial-scale cellulosic facilities under construction around the country that
are expected to go online in 2014. Unfortunately, billions of dollars of investment are on the line,
and because of EPA's proposal investors are beginning to look toward other countries with more
stable policy environments. [EPA-HQ-OAR-2015-0111-1816-A1 p.l]
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The advanced biofuels industry has made progress in moving toward commercialization. The
main argument against cellulosic biofuel is that it is too expensive to produce. However,
production costs are falling and those costs will continue to fall as more facilities open and the
industry matures. This nascent but growing industry promises to create thousands of jobs in rural
America. It will also create economic development opportunities and increased investment in
rural economies. [EPA-HQ-OAR-2015-0111-1816-A1 p. 1-2]
Clean Energy Renewables
The rocky history of cellulosic biofuel generation cannot and should not be attributed to the
renewable natural gas industry, since RNG only received its D-3 status in July 2014, and has
only been producing D-3 RTNs since August 2014. The RNGC data submitted to EPA was not
the 'best case scenario' for the RNG industry. The RNGC supplied EPA with conservative
numbers that the RNG industry is on track to produce. Yet EPA 'decided to treat these company
projects as the high end of a potential production range....' In an attempt to take a 'neutral aim',
EPA has swung the pendulum to the point of under-representing cellulosic biofuel production
[EPA-HQ-OAR-2015-0111-1908-Alp.4]
EPA can improve its methodology by recognizing RNG project history. Projects with a proven
track record of gas production and pipeline injection should be counted in the 50th percentile and
not in the 25th percentile, regardless of whether they have a history of D-3 production. [EPA-HQ-
OAR-2015-0111-1908-A1 p.4]
Historically, RNG projects have sent much of their gas to utilities for electricity generation. As
long-term electricity contracts are expire or do not renew, RNG producers are choosing to send
their gas to its highest and best use — transportation fuel. This change of end use doesn't mean
the project is new in the same way that a newly constructed project is new. As such, EPA needs
to differentiate between these two types of 'new' projects. [EPA-HQ-OAR-2015-0111-1908-A1
p.4]
EPA acknowledges RNG projects' proven track record by not using a six-month ramp-up
period.10 However, this does not go far enough as these proven projects are relegated to the 25th
percentile grouping. Projects with significant operational history do not have an issue regarding
their ability to reliably generate transportation fuel-quality RNG. [EPA-HQ-OAR-2015-0111-
1908-A1 p.4-5]
Additionally, the RFS registration process requires considerable effort and expense. Registration
requires facility developers to show their contracts for the sale of their biogas to a CNG or LNG
facility. There is no possibility that a registered owner would sell their gas to 'non-transportation
markets,' as EPA alleges. Registered facilities have sufficiently demonstrated their commitment
to supply fuel under the program. EPA should not discount them as 25% likely to follow-
through. Instead, we urge EPA to consider a project's gas production history and include proven
projects in the 50% accounting. [EPA-HQ-OAR-2015-0111-1908-A1 p.5]
10Assessment of Cellulosic Biofuel Production from Biogas (2015-2016). Page 7-8
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DriveGreen LLC
EPA should select a higher percentile than 25% since new producers will always seek the option
which provides the highest return and at least for the foreseeable future that will be
transportation. The 50% level selected for existing producers will offer a much more accurate
prediction. There is more than adequate demand for CNG and LNG which far exceeds the
available supply of their renewable versions and EPA's concern that some producers will have
difficulty in verifying transportation use is unfounded. As time has passed, EPA has clarified
what it expects producers to use and replication of approved methods is simple. [EPA-HQ-OAR-
2015-0111-1822-A1 p. 3]
International Council on Clean Transportation (ICCT)
While we agree that there remains uncertainty associated with the capacity of new facilities to
access the transport fuel market and start generating RINs, we do not agree that it is appropriate
to set the same percentile expectations for new cellulosic technologies as for biogas supply. The
cellulosic RIN represents a substantial incentive to supply biogas into the transport market, and
the biogas industry has demonstrated its ability to rapidly scale up supply to take advantage of
the REST since it became available. We therefore believe that the 75th percentile of the EPA
determined range is a more appropriate production estimate for the biogas facilities identified as
already delivering RINs on a commercial scale, and that the 50th percentile would be appropriate
for biogas facilities without that track record. Undue conservatism in the assessment of RIN
generation by CNG/LNG could trigger a vicious circle in which commercialization of truly new
technologies for cellulosic biofuel is undermined by low mandates and strong biogas supply, and
in which low expectations become a self-fulfilling prophecy. We agree that it will be appropriate
to reassess the percentiles used for future production projections when setting mandates in future
years. [EPA-HQ-OAR-2015-0111-1923-A1 p.5]
Kansas Corn Growers Association
EPA's proposed RVO level for ethanol will severely damage not only the conventional ethanol
industry, but also the up and coming cellulosic ethanol industry. We support both types of
renewable, homegrown ethanol, and we are proud to have one of the first operating cellulosic
ethanol plants in the nation in Hugoton, Kansas. Simply put, the rise of the cellulosic ethanol
industry depends on a strong market for conventional ethanol. [EPA-HQ-OAR-2015-0111-3172-
Al p. 1]
Mascoma LLC, Lallemand Inc.
Since the early 2000's, much of my focus has been on working with scientists and innovative
companies to bring enabling enzymes and yeasts to future second generation producers. It has
been a struggle, yet since the RFS was put into place in 2006, great strides have been made and
cellulosic based biofuels are now being produced on a large scale. A stable RFS without
loopholes for the competition is an essential component for cellulosic biofuels to grow and
realize commercial viability. [EPA-HQ-OAR-2015-0111-0263-Al p. 1]
Response:
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Some commenters suggested that creating uncertainty around the RFS program could negatively
impact investment in domestic cellulosic biofuel projects in the future. We acknowledge the
potential harm caused by uncertainty surrounding the incentives provided by the RFS program.
We believe the approach we have adopted to projecting cellulosic biofuel production is a neutral
projection of the volume of cellulosic biofuel that will be produced in 2014, 2015, and 2016. We
believe the projection methodology used in this final rule and the volumes we are finalizing will
provide the stability and the incentives necessary for the development of the cellulosic biofuel
industry, including investment in new commercial scale cellulosic biofuel production facilities in
the United States. We will continue to monitor the progress of the cellulosic biofuel industry and
will adjust our projection methodology as appropriate.
One commenter claimed that EPA had failed to conduct an analysis of the availability of vehicles
to utilize CNG or LNG fuels, and had underestimated the ability for the market to supply these
fuels. EPA disagrees with this claim. As discussed in Section IV of the final rule to our
proposed rule, EPA considered both the quantity of biogas likely to be produced in 2015 and
2016 as well as EIA's estimates of the quantity of CNG/LNG likely to be used as transportation
fuel. We determined that neither of these factors were likely to limit the number of cellulosic
biofuel RINs generated for CNG/LNG derived from biogas in 2015 or 2016. Rather, the number
of cellulosic RINs generated in these years was likely to be limited by the ability for registered
parties to track the use of qualifying CNG/LNG for use as a transportation fuel. Because RINs
may only be generated in these cases, this is a relevant consideration. EPA continued to review
information provided in comments on our proposed rule and the available REST generation data
and believes this information supports the increased cellulosic biofuel standards for 2015 and
2016 in this final rule. It is worth noting that the commenter may have provided information in
their comment on LPG (propane) vehicles and refueling stations rather than LNG (liquefied
natural gas).
Several commenters argued that cellulosic biofuel production from RNG projects should not be
treated in the same way as other cellulosic biofuel projects, as many of them have a history of
biogas production and are simply switching the end use of the fuel they produce to transportation
fuel. EPA believes there is reason to project production from cellulosic biofuel produced from
CNG/LNG derived from biogas differently than liquid cellulosic biofuels, and the data we have
reviewed strongly suggests that CNG/LNG producers are more likely to produce near the high
end of their projected production ranges than liquid cellulosic biofuel producers. We have
therefore increased the percentile values to the 50th percentile for "new" CNG/LNG facilities and
the 75th percentile for existing CNG/LNG facilities in this final rule, as one commenter
suggested. We do note, however, that there remains uncertainty associated with production from
these facilities, as several are producing at rates significantly below their registered production
volumes. Past projections EPA has received from the RNG industry have proven to be overly
optimistic, and we believe it is appropriate to continue to consider both industry projections and
production history in our projections of RNG production in future years.
Several commenters objected to EPA's use of a 25* percentile estimate of production for
facilities projected to produce CNG/LNG from biogas that had not yet generated cellulosic RINs,
claiming it was overly optimistic. These commenters claimed that due to uncertainty as to the
ability of new facilities to produce pipeline quality biogas, their location relative to natural gas
pipelines, and competition from renewable electricity, using the 25* percentile of a projected
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range for these facilities was overly optimistic. They cited 2014 projections from the RNG
industry that were not met. While EPA recognizes these concerns, we note that the 8% of
landfills currently producing high BTU biogas produce far more biogas than we are projecting
for the RFS program in 2015 and 2016, and that facilities capable of producing high BTU biogas
are very likely located near natural gas pipelines. The vast majority of the cellulosic biofuel
projected to be produced for CNG/LNG derived from biogas, including volumes from facilities
that have not yet generated cellulosic biofuel RINs, is from facilities already registered under the
RFS program. In these cases the facilities have submitted documentation to EPA verifying that
they have the necessary equipment to produce pipeline quality biogas, and have contracts in
place to use the biogas as transportation fuel. Projecting future production of cellulosic biofuel
for CNG/LNG derived from biogas using solely historic RIN generation data would effectively
ignore any potential production from any new facilities, and would not be a neutral projection.
In reviewing the available production data for CNG/LNG derived from biogas in 2015, we find
that the methodology suggested by the commenter significantly under-estimated cellulosic RIN
generation for CNG/LNG derived from biogas in 2015. In fact, the methodology proposed by
EPA similarly under-estimated biogas production, and has been adjusted in this final rule (see
Section IV of the final rule for more detail).
A commenter requested that cellulosic RINs generated for renewable electricity produced from
biogas be included in our cellulosic biofuel projections. At this time EPA has not registered any
facilities to produce cellulosic biofuel RINs for electricity produced from biogas. There are still
outstanding issues associated with this production, including ensuring that compliance measures
are available such that there is not double counting of RINs produced for this fuel (see
80.1426(f)(10)-(l 1)). EPA will continue to work with companies interested in generating RINs
for electricity produced from biogas and may include projected production from these sources in
the future as appropriate. The commenter also requested a higher equivalence value for
electricity used as a transportation fuel. This comment is beyond the scope of this rule.
A commenter stated that in 2013 the cellulosic biofuel industry began producing commercial
quantities of cellulosic biofuel at two different facilities, and that six additional commercial-scale
cellulosic facilities were under construction around the country that were expected to go online
in 2014. We acknowledge that in the past few years several large scale commercial scale
cellulosic biofuel production facilities have completed construction and have begun, or plan to
soon begin, producing cellulosic biofuel. Our projections of cellulosic biofuel production in
2014, 2015, and 2016 have considered potential cellulosic biofuel production from these
facilities (see Section IV of the final rule for more details on our projections).
A commenter stated that EPA's proposed RVO for conventional ethanol (total renewable fuel)
would severely damage the cellulosic biofuel industry. We disagree with this statement, and
have reviewed data that suggests our proposed rule did not adversely impact the price of
cellulosic RINs, the means by which the RFS program incentivizes cellulosic biofuel production
(see Section 4.1 of the RTC for a further discussion of this issue).
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4.2.2 Potential Foreign Sources of Cellulosic Biofuel
Comment:
Abengoa Bioenergy
EPA should not arbitrarily exclude from its 2015 and 2016 projections all foreign cellulosic
biofuel producers and imports of cellulosic biofuel. The Agency has identified facilities that have
approved pathways for generating RINs and has registered several facilities for the program. To
exclude these companies produces an obvious error in the projections. EPA excluded foreign
producers from its November 2013 proposed rule for the 2014 RVO, and yet more than 50,000
D7 RINs came from imports during 2014, according to data from the EPA Moderated
Transaction System (EMTS). To date, more than 3.3 million D3 and more than 170,000 D7 RINs
have come from imports in the first half of 2015, again according to EMTS data. EPA is
demonstrably incorrect to exclude foreign generation or importation of cellulosic biofuels. Such
exclusions are arbitrary and without a basis in the statute or regulations. [EPA-HQ-OAR-2015-
0111-2474-A1 p.9-10]
Several overseas cellulosic biofuel companies have completed the lengthy and costly Part 80
registration process to qualify to generate D3 or D7 RINs. EPA should work with additional
overseas companies to complete the registration process for facilities in an expedient manner,
enabling them to contribute volumes to meet the 2015 and 2016 Renewable Volume Obligations.
EPA's exclusion of the facilities from the RVOs discourages these companies both from
completing the registration process and from exporting volumes to the U.S. fuel market. The
lower RVO numbers thus become a self-fulfilling prophecy. EPA should include these
companies in its projections. Moreover, EPA should do so using the same neutral approach it has
used for projecting domestic commercial production, based on a careful survey of each
individual producer's intentions. In addition, EPA should streamline the registration process
wherever feasible, to reduce unnecessary delays and costs that impede the achievement of the
statutory goals. [EPA-HQ-OAR-2015-0111-2474-A1 p.10]
Response:
A commenter objected to EPA's exclusion of foreign cellulosic biofuel producers from our
projection of cellulosic biofuel production used to set the cellulosic biofuel standard. They noted
that foreign facilities had generated cellulosic biofuel RINs in the first half of 2015. EPA notes
that while our proposed methodology for projecting available volumes of cellulosic biofuel
generally did not consider foreign facilities, we did make exceptions where supported by the
available data. The foreign facilities that generated cellulosic biofuel RINs in the first half of
2015 were included in our proposed cellulosic biofuel volumes. For this final rule we have
contacted all registered foreign biofuel producers to determine whether or not they intended to
export cellulosic biofuel to the United States in 2015 or 2016. Registered foreign facilities that
did intend to export fuel to the United States were included in our projections in this final
rule. We believe it is reasonable to consider only registered facilities, as non-registered facilities
cannot generate RINs for any cellulosic biofuel they export to the United States.
This commenter also requested that EPA work with additional overseas companies to complete
the registration process for facilities in an expedient manner and EPA should streamline the
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registration process wherever feasible, to reduce unnecessary delays and costs that impede the
achievement of the statutory goals. EPA actively works with all parties that apply for
registration under the RFS program, whether their facilities are located in the United States or
overseas. As these facilities complete the registration process, production volumes are
considered in our estimates. While we appreciate the desire for timely registration approvals, we
do not believe it is in the best interest of the goals of the RFS program to approve facility
registration requests without adequate review. We continue to work to review all facility
registration requests a quickly as practical, while maintaining an emphasis on an adequate review
of these requests.
4.3 Proposed Cellulosic Biofuel Standards
Comment:
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
The Proposed Rule repeats this mistake. EPA estimates that newly constructed liquid cellulosic
biofuel plants will produce in the 25th percentile of their estimated production range and existing
plants will produce in the 50th percentile of their estimated production range. This is outlined in
the chart below. EPA makes no effort to justify this choice of methodology or explain how it is
likely to produce results that "take neutral aim at accuracy." Indeed, the percentiles bear no
relationship whatsoever to the available data. Although certain values are being withheld as CBI,
the EPA projection for 2015 liquid cellulosic biofuel volume is calculated to be approximately
8.75 million gallons. This is approximately equivalent to 8.3% of the cumulative design capacity.
[EPA-HQ-OAR-2015-0111-1948-Alp.43]
EPA continues to accept production forecasts from cellulosic biofuel manufacturers even though
these forecasts have historically proven to be inaccurate. Based on past history, most of the
calculated maximum production values are overly optimistic daue to a number of erroneous
assumptions, described in more detail below. [EPA-HQ-OAR-2015-0111-1948-A1 p.43-44]
EPA provides no supporting evidence to validate the 6-month ramp-up assumption in the current
proposal and even acknowledges there has been a "history of start-up delays and missed
production targets in the cellulosic biofuels industry." As cellulosic biofuel production data
become available, EPA should rely on producers' demonstrated ability to increase plant
production rates. If the five companies listed above are predictors of future performance, a 6-
month ramp-up has no foundation in the empirical evidence for liquid cellulosic biofuel
production. In each of the past several years, EPA has predicted cellulosic biofuel facilities
would be producing significant quantities of cellulosic fuel. EPA now discards the fact that a
several year ramp-up proved to be an inadequate amount of time for this new technology to
produce commercial scale quantities of liquid cellulosic biofuels and continues to assume that a
6-month ramp-up is reasonable. The use of a 6-month ramp-up in the face of this historical track
record is arbitrary and capricious. [EPA-HQ-OAR-2015-0111-1948-A1 p.45] [EPA-HQ-OAR-
2015-0111-1044 p.22]
In the proposal, EPA has implemented a 25th percentile production estimate for new plants and a
50th percentile production estimate for existing plants. As noted above, EPA makes no effort to
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justify this choice of methodology or explain why it is likely to produce results that "take neutral
aim at accuracy." Although the Proposed Rule generally states that there are uncertainties and
risks for new technologies, it provides no specific rationale for choosing a 25th percentile
production. Likewise, the 50th percentile production estimate for existing plants was chosen
without any rationale linked to historical references. EPA should provide a detailed rationale for
these estimates or at least provide some justification for their use in this proposal. [EPA-HQ-
OAR-2015-0111-1948-A1 p.45]
Clean Energy Renewables
EPA has signaled its intent to issue a final rule in November 2015. We encourage EPA to
account for all EMTS through October 2015 if possible, but at least through September 2015.
We believe these EMTS figures will further validate industry projections and result in an upward
adjustment of the 2015 cellulosic biofuel RVO. [EPA-HQ-OAR-2015-0111-1908-A1 p.3]
Additionally, EPA should update the 2016 cellulosic RVO to account for increased 2015 D-3
generation. Since 2015 is the baseline for 2016 projections,6 any upward adjustment in 2015
should logically impact 2016. We believe this adjustment is consistent with EPA's intent.7 [EPA-
HQ-OAR-2015-0111-1908-A1 p.3]
7For the final rule we intend to update our classification production volumes from existing and new facilities based
on the available RIN generation data at that time. Assessment of Cellulosic Biofuel Production from Biogas (2015-
2016). Page 10.
DuPont
For 2014 and the first few months of 2015, EPA examined data for D3 RINs generated and
subtracted any RINS that were retired for reasons other than compliance. DuPont has no
objections to this methodology as laid out in Table IV.C-1 and Table IV.D-1. This is because we
believe this data accurately reflects the number of D3 RINs generated for the respective time
periods minus those RINs retired for other reasons than compliance. Likewise for 2015, when
this rule is issued in final form by November 30, 2015, we believe that EPA will have close to 11
months of data concerning D3 RINs and a high degree of certainty for proj ecting the quantity of
production for the remaining few days in 2015. [EPA-HQ-OAR-2015-0111-1826-A1 p.23]
By applying an across the board discount to each facility, this approach does not take a facility-
by-facility approach for projecting what each individual plant will produce. A summation of
projections from each facility is the only way to yield an accurate projection of fuel volumes.
[EPA-HQ-OAR-2015-0111-1826-Alp.23]
DuPont recommends that in projecting future cellulosic ethanol volumes that EPA defer to the
technical expertise of: (1) the cellulosic ethanol manufacturers including plant operators and
engineers in their respective volume projections; and (2) EPA staff expertise and judgment.
While predicting the future is difficult, this approach will result in the closest projection of what
will actually happen for 2016 and future years for new and existing facilities coming on-line. To
do this, EPA should reopen the docket established for the Proposed Rule and permit all entities
who intend to produce cellulosic ethanol in 2016 to supply the Agency with complete
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information on actual production plans for these years. [EPA-HQ-OAR-2015-0111-1826-A1
p.23]
Because EPA likely must consider plant-specific data to produce a lawful rule, reopening the
docket is a necessary procedural step. The Agency "retains a duty to examine key assumptions as
part of its affirmative burden of promulgating and explaining a non-arbitrary, non-capricious
rule." Columbia Falls Aluminum Co. v. EPA, 139 F.3d 914, 923 (D.C. Cir. 1998) (quotation
marks and citations omitted). Otherwise EPA cannot claim to have met its obligation to treat the
available evidence in a rational manner. [EPA-HQ-OAR-2015-0111-1826-A1 p.23]
DuPont believes that the best path to set accurate volumes for cellulosic ethanol approach
involves the interview process that EPA has used in the past but with the addition of directed
questions aimed at the three major areas of risk for any new project. The first risk is committed
funding and progress toward project completion. This will likely mean steel in the ground for
any production facility as well as receipt of all permits. The second risk is committed supplies of
feedstock and biocatalysts such as enzymes and a fully implemented process for disposal of co-
products. The third risk area is process reliability which could be evaluated based on the size of
and the project sponsor's experience with pilot facilities. A more detailed interview should be
developed, and we believe that this process would reduce any unrealistic optimism that project
sponsors might communicate. EPA could then form its own conclusion based on the results of
each interview. [EPA-HQ-OAR-2015-0111-1826-A1 p.24]
For facilities that EPA classifies as having "consistent commercial scale production", any
uncertainty associated with the high end of the projected range for each of these facilities should
be evaluated on an individual basis. Like with DuPont's recommendation for new facilities, EPA
should defer to the technical expertise of: (1) the cellulosic ethanol manufacturers in their
respective volume projections; and (2) EPA staff expertise and judgment. EPA should develop a
more detailed interview process that would reduce any unrealistic optimism that project sponsors
might communicate. EPA could then form its own conclusion based on the results of each
interview. Volumes from each likely supplier should be added to reach a total projection for
available cellulosic ethanol supply for a calendar year. [EPA-HQ-OAR-2015-0111-1826-A1
p.24]
Ecoengineers
We urge the EPA to continue to pro-actively support domestic cellulosic fuel production by
setting volume targets for 2015 and 2016 that are at or higher than the projected production
capacity levels for the respective years. [EPA-HQ-OAR-2015-0111-2269-A1 p.2]
Maintaining strong volume targets is critical to sending the right message to markets - the
message that the U.S. cellulosic biofuels industry is a robust, growing, important and valued part
of the U.S. renewable fuels portfolio. The NOPR's significant step back in 2015 and 2016
volumes will chill investment in current, planned and future biogas-to-transportation fuel
projects, an impact that will span the entire biogas/CNG/LNG value chain and can be expected to
stunt future growth of the industry. Maintaining targets that are closer to statutory volume levels
will provide the market with the confidence necessary to generate continued investment and
growth in renewable fuels and ensure that production capacity continues to grow. [EPA-HQ-
OAR-2015-0111-2269-A1 p.4-5]
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ExxonMobil Refining & Supply Company
ExxonMobil echoes the AFPM/API comments relating to EPA's methodology to set the
cellulosic standard. ExxonMobil remains skeptical of the consistent overestimation of cellulosic
production that has repeatedly plagued the RFS. In particular, the reliance on the 25* percentile
production estimate for new plants and the 50* percentile production estimate for existing plants
is incorrect based on the history of the industry to date. ExxonMobil believes that EPA should
reexamine the data and rely more heavily on demonstrated production in order to satisfy the
mandate of the DC Circuit to take neutral aim at accuracy. [EPA-HQ-OAR-2015-0111-2270-A1
p.3]
Independent Fuel Terminal Operators Association (IFTOA)
IV. Cellulosic Biofuel Mandate
EPA has engaged in a comprehensive review of possible cellulosic biofuel production. It
divided cellulosic facilities into two groups - those facilities already engaged in commercial
production, and those companies beginning production after July 1, 2015. It developed
estimated ranges of cellulosic biofuel supply for each group. The mandates of 33 million gallons
in 2014, 106 million gallons in 2015, and 206 million gallons in 2016 are based on information
derived from various sources, including the Energy Information Administration, the Department
of Agriculture, and the cellulosic biofuels industry. Finally, EPA has also made a strong effort to
take a neutral approach and set the mandated volumes at a level that is likely to be achievable.
[EPA-HQ-OAR-2015-0111-1947-A1 p. 4-5
However, based on (1) current experience in the market, and (2) the numerous uncertainties
associated with the cellulosic biofuel business (e.g. construction, funding, and start-up
difficulties), Members of the Association believe that the proposed mandate for 2016 is too high
and not a realistic projection. Indeed, Members have had great difficulty in 2014 and the first
half of 2015 finding cellulosic biofuel and/or cellulosic biofuel RINs. They seriously doubt that
availability will increase to such a degree (206 million gallons) within only 18 months. [EPA-
HQ-OAR-2015-0111-1947-A1 p. 5]
Recommendation: EPA should "discount" its estimates of cellulosic biofuel to reflect the
difficulties and on-going uncertainties that face this industry and its production efforts in 2015
and 2016. The mandate should be reduced accordingly. [EPA-HQ-OAR-2015-0111-1947-A1 p.
5]
POET-DSM Advanced Biofuels
With respect to the RVO for 2016, the NPRM states that EPA will "update" the information that
it currently possesses concerning "biofuel production facilities that have the potential to produce
fuel at commercial scale," but that "EPA does not anticipate providing an opportunity for
comment on any updated data." 80 Fed. Reg. at 33,139 col. 3, id. n.107. While the reason stated
for not permitting any such opportunity for comment are "timing constraints," the Agency has
sufficient latitude under section 21 l(o) as interpreted by the Court of Appeals to permit such an
opportunity.29 Conversely, denial of such an opportunity would not be permissible.30 [EPA-HQ-
OAR-2015-0111-1943-A1 p.13]
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Turning to the methodology used to set the 2016 cellulosic ethanol RVO, the NPRM's valid
attention to the technological challenges of commencing commercial-scale production appears to
have obscured one other important, central truth about the cellulosic ethanol industry: once it
starts the production of saleable gallons, no profitable biorefmery will operate at or near 50
percent of its planned full capacity for an extended period of time. [EPA-HQ-OAR-2015-0111-
1943-Alp.l3]
29 See Monroe Energy LLCv. EPA, 750 F.3d 909, 919-921 (D.C. Cir. 2014); National Petrochemical & Refiners
Ass'n v. EPA, 630 F.3d 145, 158 (D.C. Cir.2010).
30 See 42 U.S.C. §§ 7607(d) (4)(A), (5), 6(C). Failure to permit comment on data on which the Agency relies in a
Final Rule jeopardizes the final action. See, e.g., West Virginia v. EPA, 362 F.3d 861, 869-870 (D.C. Cir. 2004);
Kennecott Corp. v. EPA, 684 F.2d 1007, 1019-20 (D.C. Cir. 1982). Were EPA to fail to permit review and comment
on the final data used to set the cellulosic ethanol RVOs, POET-DSM and other stakeholders would be in the
position of the petitioners in Kennecott Corp., who were prejudiced by the failure to permit comment on relevant
data. In West Virginia, petitioners had an opportunity to comment on the data that was germane to the dispute
between them and the Agency (an opportunity that would be denied to POET-DSM here). There will be no
opportunity for useful review and comment on the new data once EPA promulgates the RVOs this fall. Cf. Air
Pollution ControlDist. of Jefferson C'tyv. EPA, 739F.2d 1071, 1081 (6th Cir. 1983) (petitioner "had ample
opportunity to, and actually did, comment on the information accepted by EPA").
The George Washington University
Although mandated cellulosic biofuel production is proposed to increase by 291%, the 206
million gallons proposed for 2016 are still 4.19 billion gallons below the levels set in the CAA.
[EPA-HQ-OAR-2015-0111-1815-A1 p.4]
ZeaChem Inc.
Regarding the EPA's proposed 2014, 2015, and 2016 RVOs, ZeaChem requests that the EPA
revise its numbers to reflect the previous year's renewable fuel installed production capacity and
renewable fuel production capacity additions that are to be mechanically complete within the
applicable year, based on data provided by the U.S. Energy Information Administration.
Response:
Comm enters questioned EPA's use of the 25* and 50* percentile values used within the
projected production ranges for liquid cellulosic biofuel producers. They claimed EPA lacked a
sufficient basis for these values, as well as the 6 month ramp up period, in light of the delays and
low production volumes at several cellulosic biofuel production facilities in recent years. EPA
acknowledges that there is little data available on which to base our percentile values and ramp-
up rates. However, this approach is intended to achieve a neutral aim at accuracy and
alternatives suggested by commenters do not appear better suited for a neutral aim at accuracy.
For example, some commenters suggested we rely only on demonstrated production, which we
believe would understate production for facilities just coming on line or scaling up during the
relevant periods. Other commenters suggest we rely heavily on the estimates of the companies
themselves, which experience suggests would overstate production. We recognize it is difficult
to make these estimates, particularly for companies using new technologies, but in our judgment,
based on our experience with the industry, this is a reasonable methodology, and better than the
alternatives we have considered or been offered. While several companies have been unable to
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successfully commercialize their technologies, and others have experienced delays, others have
experienced success. For example, Quad County Corn Processers achieved levels of production
that met and in some cases exceeded the nameplate capacity for cellulosic biofuels within the
expected six month ramp-up period, and have produced consistent volumes of cellulosic biofuel
since that time. Additionally, as companies gain experience starting-up cellulosic biofuel
facilities we expect that delays will become less common and start-up times will be
shortened. Relying primarily or exclusively on demonstrated production data is not an
appropriate methodology for projecting future production levels for a new industry. Finally, we
note that the six month ramp-up schedule is used by EPA to determine the high end of our
projected range, not an expected production volume. As we continue to gather more data related
to the start-up of cellulosic biofuel production we anticipate adjusting our methodology for
projecting potential production ranges and selecting percentile values within these ranges as
needed to continue to ensure neutral projections. For a further discussion of our methodology
see Section IV of the final rule.
A commenter requested that EPA use updated cellulosic RIN generation through September or
October 2015 to update our cellulosic biofuel projections for 2015 and 2016. EPA indicated in
our proposed rule that this was our intention, and the cellulosic biofuel standards for 2015 and
2016 in our final rule are based on updated RIN generation information, as well as other status
updates from the potential cellulosic biofuel producers. If we were to update the cellulosic
biofuel volumes (as we have done) for the final rule, another commenter argued that we needed
to reopen the comment period once again. We disagree that use of this supplemental data
requires reopening the comment period. We believe our proposal provided adequate notice and
opportunity for comment of our approach and the relevant data, and the final rule is a logical
outgrowth of the proposal. Furthermore, re-opening the comment period would unnecessarily
delay the finalization of the rule (which is subject to a court order for completion), and would
have a significant negative impact on the effectiveness of the RFS program.
A commenter objected to EPA's proposed use of a uniform percentile value for all potential
liquid cellulosic biofuel producers, and instead recommended that EPA, in consultation with the
plant operators and engineers, make a projection of likely production from each facility. They
recommended EPA conduct detailed interviews with potential producers covering such issues as
project funding, feedstock and enzyme supplies, and pilot plant experience, as well as interviews
with companies that have achieved consistent production, and base our projections on the
information we receive. Finally, they requested that EPA re-open the docket to receive new
information. EPA disagrees with the commenter that projecting production volumes from each
facility on the basis of information provided by the company's plant operators and engineers and
summing these volumes will result in the most accurate projection of cellulosic biofuel
production. EPA has conducted interviews with company representatives and collected
information on the topics suggested by the commenter for each year for the past several years,
including for our proposed and final rule. While the information collected has been helpful to
EPA in making our projections, companies have consistently over-estimated their future
projection, despite significant financial backing, feedstock and enzyme agreements, and
extensive pilot and demonstration scale testing. For this reason, EPA believes an accurate
projection of potential cellulosic biofuel production must be tempered with the actual production
history of each facility. Given the company representatives inability to accurately project their
own projection volume, we do not believe EPA staff will be more successful in projecting
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volumes from each individual facility, and therefore believe the method of projecting production
volumes for a group of facilities is more likely to produce an accurate projection. Finally, EPA
has continued to receive information from potential cellulosic biofuel producers since our
proposed rule and have considered this information in the final rule. For a further discussion of
this issue see Section IV of the final rule.
Another commenter suggested EPA's methodology was flawed because they claimed that once a
facility starts the production of salable gallons they would not operate at 50 percent of the
planned full capacity for an extended period of time. EPA's methodology does not make this
assumption. As stated in our proposed rule, we are not assuming that each facility that has
achieved consistent production of cellulosic biofuel will produce at the 50th percentile of the
projected range, but that as a group we projected that they will produce at the 50th percentile of
the aggregated projected range with individual facilities producing volumes corresponding to
higher and lower percentiles. Additionally, the low end of the range for the companies that have
generated cellulosic biofuel RINs is equal to the production from these companies over the
previous 12 months, not zero. This means that our methodology projects that these companies,
as a group, will produce a volume halfway between the volume they produced over the previous
12 months and their facility capacities (adjusted to account for ramp-up in the first 6
months). We believe this methodology is reasonable.
A commenter requested that EPA set the cellulosic biofuel standard closer to the statutory
volume levels and at a level that is equal to or higher than the projected production capacity
level. Similarly, another commenter requested that EPA revise its numbers to reflect the
previous year's renewable fuel installed production capacity and renewable fuel production
capacity additions that are to be mechanically complete within the applicable year, based on data
provided by the U.S. Energy Information Administration. In previous years actual production of
cellulosic biofuel has been far below the production capacity for these fuels. Setting the standard
equal to or higher than the production capacity would therefore not represent a neutral projection
of cellulosic biofuel projection.
One commenter suggested EPA should reduce the cellulosic biofuel standards for 2015 and 2016
based on their members' experience of difficulty finding cellulosic biofuel and/or cellulosic
RINs in 2014 and the first half of 2015. EPA does not believe this is a sufficient reason to
reduce the cellulosic biofuel standard. We note that cellulosic biofuel production in 2015 in fact
exceeded the proposed volume. The standards in the final rule are based, in large part, on the
updated cellulosic RIN generation data.
A commenter noted that EPA's proposed cellulosic biofuel standard was still well below the
level in the CAA. We acknowledge this, and note that EPA is authorized to decrease the
required cellulosic biofuel volume if the volume projected to be produced in any given year is
lower than the level in the CAA. This is the case in 2014, 2015, and 2016.
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4.3.1 Proposed Cellulosic Biofuel Volume for 2014
Comment:
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
The proposed 2014 cellulosic biofuel volumes are set at actual production levels, and that is
acceptable to API and AFPM in this instance, given the particular circumstances in this
rulemaking. [EPA-HQ-OAR-2015-0111-1948-A1 p.47]
Biogas Researchers Inc. (BR)
The excerpts above make clear that EPA appropriately is considering actual volumes of
renewable fuel produced in 2014 when setting the 2014 RVO. Since August 18, 2014, the
effective date of the July 18, 2014 rule that created the RE Pathway, hundreds of landfills, waste
water treatment facilities and agricultural digesters across the country have been producing
significant amounts of electricity with biogas. At the same time, large numbers of EVs across the
country have been drawing electricity from the interconnected electric grid on a daily basis.
These activities constitute de facto "volumes of renewable fuel produced and consumed during
2014." Moreover, a number of approaches to the RE Pathway can utilize reliable data on biogas
electricity production and electric vehicle charging to accurately yet retroactively account for
those volumes of renewable fuel produced and consumed during 2014 (and the first months of
2015). For that reason, in its forthcoming registration application, BTR is requesting
authorization to generate RINs retroactively to August 18, 2014. As such EPA should include the
expected increase in 2014 RINs in its final 2014-2016 RVO rule. [EPA-HQ-OAR-2015-0111-A1
p. 5]
Response:
A commenter stated that they supported EPA setting the 2014 cellulosic biofuel standard at the
projected levels. Another commenter stated that because volumes of electricity were generated
from biogas in 2014, and because electric vehicles had used electricity as transportation fuel in
2014, EPA should allow RINs to be generated retroactively for this fuel, and should include
these volumes in the 2014 cellulosic biofuel standard. Our regulations do not provide for
retroactive approval of generated RINs in this situation (40 CFR 80.1426(g) and CFR
80.1450(b)), and consideration of changes to the requirement for registration as a prerequisite to
generating RINs is beyond the scope of this rulemaking. We therefore have not increased our
proposed 2014 cellulosic biofuel standard on this basis of this volume.
4.3.2 Proposed Cellulosic Biofuel Volume for 2015
Comment:
AJW, Inc.
When the final rule is issued November 30, 2015, EPA will have data on actual cellulosic biofuel
production through at least October 2015. We believe EPA should use this data to inform its
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final projection of volume available in 2015. To do otherwise would expressly fail the test of
taking neutral aim at what will actually happen.1 [EPA-HQ-OAR-2015-0111-2268-A1 p.4]
1 American Petroleum Institute v. Environmental Protection Agency, United States Court of Appeals for the District
of Columbia Circuit, January 25, 2013.
American Council on Renewable Energy (ACORE)
At least three RNG projects with pending registrations are expected to begin generating
approximately 3.5 million RINs per month in July or August 2015. The USEPA Proposed Rule
sets the 2015 cellulosic RVO at 106 million gallons (and 2016 at 206 million gallons), for an
average production of 8.8 million RINs per month, which is below the production of 9.51 in May
2015, and volumes continue to increase month-over-month. The RNG Coalition submitted
industry projections at 157 million gallons in 2015 and 295 million gallons in 2016, for an
average production of 13.0 million RINs per month in 2015 and 24.6 million RINs per month in
2016. [EPA-HQ-OAR-2015-0111-1926-A1 p. 17]
Projects with a proven track record of gas production and pipeline injection should be counted in
the 50th percentile and not in the 25th percentile, regardless of whether they have a history of D-
3 production. The vast majority of RNG projects which have not generated cellulosic biofuel
RINs are not new projects. They have generated pipeline quality gas for years and some for
decades. Their production volumes are not theoretical. They are known, quantifiable, and based
on actual production performance meeting high, natural gas pipeline injection standards. [EPA-
HQ-OAR-2015-0111-1926-A1 p.17]
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
Although the value of 8.3% of cumulative design capacity is an improvement relative to past
rulemakings, this value is again overly optimistic. A more reasonable estimate of cumulative
production would be in line with the historic maximum actual production that occurred in 2013 -
production of approximately 3% of the cumulative plant capacities. If applied to the cumulative
2015 plant design capacity (108 million gallons), this would equate to a 2015 production of
approximately 3 million gallons of liquid cellulosic biofuel. [EPA-HQ-OAR-2015-0111-1948-
Al p.43]
Clean Energy Renewables
Based on data gathered by the Coalition for Renewable Natural Gas, an industry trade group of
which we are a member, we believe that our industry will produce approximately 157 million
gallons in 2015 and 295 million gallons in 2016.3 RNG will out-produce the Proposed Rule's
cellulosic biofuel RVOs. [EPA-HQ-OAR-2015-0111-1908-A1 p.2]
Due to RNG volume production in excess of the proposed RVO and the fact that the cellulosic
biofuels category includes fuels other than RNG, like cellulosic ethanol, we urge EPA to increase
the cellulosic biofuel volume obligations by at least 51 million gallons in 2015 and by 89 million
gallons in 2016. [EPA-HQ-OAR-2015-0111-1908-A1 p.2]
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3 Table 3. Assessment ofCellulosic Biofuel Production from Biogas (2015-2016).
Coalition for Renewable Natural Gas
EPA has signaled its intent to issue a final rule in November 2015. We encourage EPA to
account for all EMTS through October 2015 if possible, but at least through September 2015.
We believe these EMTS figures will further validate RNGC's projections and result in an
upward adjustment of the 2015 cellulosic biofuel RVO. [EPA-HQ-OAR-2015-0111-3278-A1 p.
4]
DriveGreen LLC
Since the Final Rule is now scheduled for implementation in November of 2015, it seems
obvious at the time of the Final Rule to simply incorporate the many more months of actual data
which will by then be available and only use the projection methodology for the few months left
in 2015 where actual data is not available. If the goal is to be as accurate as possible, then actual
data should outweigh projections. [EPA-HQ-OAR-2015-0111-1822-A1 p. 2]
ZeaChem Inc.
D3 REST generation for just the first half of 2015 has already surpassed the entire D3 RIN
generation of 2014 with 49,313,968 generated as of the end of June. Current monthly production
of cellulosic biofuel D3 RINs based on the EPA's own June 2015 published monthly D3 RIN
EMTS data stands at 12,413,912. This is expected to increase by the time the EPA issues its final
rule in November 2015, due to the opportunity for existing anaerobic digestion facilities to
switch from biogas for power production, thermal production or flaring to biogas for renewable
compressed/liquefied natural gas production by simply redirecting output. As such, actual 2014
and 2015 D3 RINs generation through November 2015 plus projected capacity for December
2015 should be reflected in the 2014 and 2015 cellulosic biofuel renewable volume obligations.
[EPA-HQ-OAR-2015-0111-1906-A1 p.3] [Table 1 can be found on page 4 of EPA-HQ-OAR-
2015-0111-1906-AL]
Response:
Several commenters requested that EPA use updated cellulosic biofuel RIN generation data in
setting the cellulosic biofuel standard for 2015. In this final rule we have used the most recent
data available (through September 2015) in determining the appropriate level for the cellulosic
biofuel standard in 2015. These new data have resulted in a slight increase in the final cellulosic
biofuel standard from the proposed standard.
A commenter noted new potential cellulosic biofuel producers with pending registrations and the
rate of cellulosic biofuel production since the proposed rule and requested that EPA increase the
cellulosic biofuel standard for 2015. EPA has considered new facility status and production data
from all potential cellulosic biofuel production facilities. Based on this new data we have
updated our projected ranges. We have also, used higher percentile values (50* percentile for
new facilities and 75th percentile for facilities that have previously generated cellulosic biofuel
RINs) within our projected range of potential cellulosic biofuel production for facilities
producing CNG/LNG from biogas in this final rule due to the production information we
received since the NPRM and the fact that there is far less technical uncertainty associated with
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the production of CNG/LNG from biogas than for other liquid cellulosic biofuels. These
changes have resulted in an increase in the cellulosic biofuel volume for 2015 and 2016 to 123
and 230 million gallons respectively.
A commenter requested that EPA increase our estimates of cellulosic biofuel for 2015 to be in-
line with projections submitted by the Coalition for Renewable Natural Gas (157 million gallons
in 2015). EPA has considered these projections in determining the volume of cellulosic biofuel
we believe will be produced in 2015 and 2016. We note that in previous years projections
submitted by the CRNG have over-estimated actual cellulosic biofuel production for CNG/LNG
from biogas. Similarly, the production rates to date in 2015 are once again lower than those
previously projected by the CRNG. While we believe the projections provided by CRNG and
other producers are a valuable part of the information we consider when making our projections,
we do not think it would be appropriate to simply adopt these projections in light of the fact that
these projections have been overly ambitious in previous years.
A commenter requested that EPA use a different methodology for estimating production, by
using 3% of cumulative plant capacities, which it describes at the historic maximum actual
production level for 2013, resulting in expected production of 3 million gallons of liquid
cellulosic biofuel. While we continue to believe that our methodology (using the 25* percentile
for new facilities and the 50th percentile for facilities that have produced cellulosic biofuel) is
appropriate, we note that we have adjusted the projected ranges for each facility based on
updated information. We continue to believe it is more appropriate to consider a production
range for each individual facility, based on a number of factors including the company history,
however we note that the result is that in this final rule we are projecting a very similar volume
of liquid cellulosic biofuel as projected by the commenter.
4.3.3 Proposed Cellulosic Biofuel Volume for 2016
Comment:
AJW, Inc.
We believe that EPA's general methodology for estimating cellulosic biofuel production can be
applied (using the most recent available data) for estimating production during both the periods
Nov'15 to Dec'15 and Jan'16 to Dec'16 as part of establishing the projected volume available
during calendar years 2015 and 2016 respectively. [EPA-HQ-OAR-2015-0111-2268-A1 p.4]
The clear problem with this approach is that if, in any given year, "volume available" is greater
than "volume produced", EPA's methodology will violate the Court's direction to aim at
accuracy. While predicting the total volume available over the course of a calendar year may be
challenging, it would seem that the easiest part of that projection should be to determine the
volume that will actually be available at the start of that calendar year. EPA's proposed
methodology appears to assume that this value will be zero in all cases. [EPA-HQ-OAR-2015-
0111-2268-A1 p.5]
The Court in no way constrained EPA from exercising its expertise in this process, which should
include its unique insights regarding the use of RINs produced in a year contrasted with RINs
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used for compliance in that same year. Rather, the Court expressly reinforced that EPA should
use its reasoned discretion in setting the standard.4 To systematically exclude an existing
component of available volume in establishing the applicable volume for a given year would
deviate from a "neutral aim at accuracy" and would be an "unreasonable exercise of agency
discretion", just as the agency's prior overstatement of available volumes was. [EPA-HQ-OAR-
2015-01 ll-2268-Alp.5-6]
4APIv. EPA, pp. 8-9.
American Biogas Council
In furtherance of our mission and stated goals, we strongly urge the EPA to maintain the RFS's
statutory volume target for 2016 of 4.25 billion gallons of cellulosic biofuels. [EPA-HQ-OAR-
2015-0111-2504-A1 p. 1]
The ABC argues that EPA's proposed reductions in cellulosic biofuels and total renewable fuels
volumes for 2016 do not accurately reflect the growth of the cellulosic biofuels industry,
particularly the non-ethanol, biogas-based Compressed Natural Gas ("CNG")/Liquefied Natural
Gas ("LNG") sector, that has been stimulated in large part by policy measures like a strong RFS.
We believe that the production volumes of biogas for CNG/LNG in the proposed rule have been
significantly underestimated and we urge the EPA to reconsider its assessment of the non-
ethanol fuel contribution to cellulosic biofuels volumes. Furthermore, we believe the NOPR runs
counter to the legislative intent of the RFS and, if implemented as proposed, will significantly
undermine actual and potential investment in and growth of the U.S. biofuels sector. [EPA-HQ-
OAR-2015-0111-2504-A1 p. 2]
Maintaining the statutory volume levels is critical to sending the right message to markets - the
message that the U.S. advanced biofuels industry is a robust, growing, important, valued part of
the U.S. renewable fuels portfolio and worthy of investment. The NOPR's significant step back
in 2016 volumes will chill investment in current, planned and future biogas-to-transportation fuel
projects, an impact that will span the entire biogas/CNG/LNG value chain and can be expected to
stunt future growth of the industry. [EPA-HQ-OAR-2015-0111-2504-A1 p. 3]
Maintaining statutory volume levels will provide the market with the confidence necessary to
generate continued investment and growth in renewable fuels and ensure that production
capacity continues to grow. [EPA-HQ-OAR-2015-0111-2504-A1 p. 3]
American Council on Renewable Energy (ACORE)
ACORE supports USEPA's proposal to update the cellulosic biofuel RVOs in November 2015,
based upon any new information that becomes available, when it issues a final RVO. This will
ensure the final RVO approximates, as closely as possible, the actual number of gallons that will
be available in 2016, including the increased production of RNG as discussed below. [EPA-HQ-
OAR-2015-0111-1926-A1 p. 16]
DuPont, an American company, is also looking overseas as a result of USEPA reducing total
renewable volume obligations below the capabilities of the industry. At the RFS hearing on June
25, 2015, DuPont stated, "DuPont plans to license the next wave of biofuel technology,
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cellulosic, here in the United States and around the world. However, the most promising
announcements, negotiations and conversations are all happening outside the United States. As
long as the EPA continues to undermine existing domestic biofuel capacity, this will continue,
creating a scenario where the benefits of U.S. innovation and technological advances are realized
overseas."50 POET is another U.S. company that would welcome expanding in the U.S., and
would be moving in the direction of putting a cellulosic plant adjacent to every one of its ethanol
plants. But with the uncertainty surrounding the RFS, POET is not currently considering this.
[EPA-HQ-OAR-2015-0111-1926-Alp.l7]
a. USEPA's decision to update the numbers in November 2015 is expected to increase the
2015 RVO to 157.5 million gallons and the 2016 RVO to 295 million gallons, due to the
increased production of renewable natural gas.
USEPA proposed cellulosic RVOs for 2015 and 2016 underestimate the production capacity of
the cellulosic industry, specifically RNG, by an estimated 51 million gallons in 2015 and 89
million gallons in 2016. USEPA should update the 2015-2016 cellulosic RVO to incorporate the
most recent EPA Moderated Transaction System (EMTS) data. The 2015 RVO uses EMTS data
from January to March (4.11 million, 7.85 million, 7.71 million) for a total of 19.52 million D-3
RINs. EMTS data is now available for April to May 2015 (7.81 million, 9.51 million) showing
an increasing trajectory of D-3 production. The total through May for 2015 is 36.9 million. By
the time USEPA issues the final rule in November, it will have EMTS data at least through
September 2015. USEPA should use actual production as much as possible, which is estimated
to increase the 2015 cellulosic RVO by at least 51 million gallons. [EPA-HQ-OAR-2015-0111-
1926-Alp.l7]
50 "DuPont Industrial Biosciences Statement on Environmental Protection Agency Renewable Fuel Standards
Rulemaking" Benzinga, July 25, 2015, http://www.benzinga.com/pressreleases/15/06/p5624889/dupont-industrial-
biosciences-statement-on-environmental-protection-age
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-0143, p. 23.]
In relation to the cellulosic portion of the mandate, EPA recognized the statutory levels simply
do not exist and has made a downward adjustment from what the law says for 2010 to 2013 and
has proposed to continue these very large waivers for 2014 to 2016. However, the agency
proposed a cellulosic biofuel requirement for 2016 that far exceeds a reasonable projection of
what can actually be produced. In January 2013, the court told EPA to be reasonable and not
aspirational.
Clean Energy Renewables
Based on data gathered by the Coalition for Renewable Natural Gas, an industry trade group of
which we are a member, we believe that our industry will produce approximately 157 million
gallons in 2015 and 295 million gallons in 2016.3RNG will out-produce the Proposed Rule's
cellulosic biofuel RVOs. [EPA-HQ-OAR-2015-0111-1908-A1 p.2]
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Due to RNG volume production in excess of the proposed RVO and the fact that the cellulosic
biofuels category includes fuels other than RNG, like cellulosic ethanol, we urge EPA to increase
the cellulosic biofuel volume obligations by at least 51 million gallons in 2015 and by 89 million
gallons in 2016. [EPA-HQ-OAR-2015-0111-1908-A1 p.2]
The net result is that it is reasonably likely that some market participants will withhold 2015
RINs for use in 2016 (when they are more valuable), that there will be a short supply of 2015
RINs for 2015 compliance as a result, that CWCs will be issued in 2015, and that there will be
increased 'available volume' for the 2016 RVO. The RVO should recognize this likelihood, and
have a provision in the Final Rule that increases the 2016 cellulosic biofuel RVO by the amount
of anticipated 2015 CWC purchases. Doing so will meet the standard of a reasonable 'prediction
of what will actually happen'. [EPA-HQ-OAR-2015-0111-1908-A1 p.9]
While it is difficult to predict market behavior, the RNGC believes EPA should anticipate that at
least 20 million CWCs will be issued for the 2015 compliance year as a result of this special
market circumstance. The RNGC have estimated this by assuming that about 10% of the 2016
RVO (10% of about 200 million gallons) would be satisfied with 2015 RINs that were withheld
from the market to realize their increased value in 2016. (This number should be adjusted
upward to the extent production projections carry the 2016 RVO in the Final Rule above 200
million gallons, as we recommend it should.) EPA's methodology should include an RVO setting
provision that considers CWC purchases when there is available supply, and thereby ensure that
the purchase of CWCs will not ultimately lead to the avoidance of the purchase of available fuels
This is consistent with statutory intent. [EPA-HQ-OAR-2015-0111-1908-A1 p.9]
3 Table 3. Assessment of Cellulosic Biofuel Production from Biogas (2015-2016).
Coalition for Renewable Natural Gas
Additionally, EPA should update the 2016 cellulosic RVO to account for increased 2015 D-3
generation. Since 2015 is the baseline for 2016 projections,6 any upward adjustment in 2015
should logically impact 2016. We believe this adjustment is consistent with EPA's intent.7 [EPA-
HQ-OAR-2015-0111-3278-A1 p. 4]
6 Assessment of Cellulosic Biofuel Production from Biogas (2015-2016). Page 9.
1 For the final rule we intend to update our classification production volumes from existing and new facilities based
on the available RIN generation data at that time. Assessment of Cellulosic Biofuel Production from Biogas (2015-
2016). Page 10.
Cool Planet Energy Systems
We believe that the number of gallons of biogas that now count as cellulosic RINS could more
than overwhelm the D3 pool. This is based on almost all of the 2014 RINS coming in Q4 and
generating 30 Million RINS. On an annualized basis, this is 120 Million RINS for 2015, which is
very close to the EPA proposed number, but leaves no room for non-biogas cellulosic biofuels of
even a few million gallons. Our bigger concern comes in 2016, where biogas that has a much
lower Capital cost than a true cellulosic biorefinery, could quickly scape up to make as much as
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the entire proposed 2016 pool. This would leave no incentive for much higher capital cost
projects to come onto the market and generate RINS in what would be an 'oversupplied' RIN
market. [EPA-HQ-OAR-2015-0111-2572 p. 1]
DuPont
However, the Renewable Natural Gas Coalition conducted this analysis and provided it to EPA
in March 2015.22 The Renewable Natural Gas Coalition's fuel projection for biogas for 2016 is
approximately 295 million gallons. While DuPont is unable to provide feedback on whether 295
million gallons of biogas is a reasonable projection, we believe this should be the starting point
for setting the 2016 cellulosic ethanol volumes given that biogas will comprise the
overwhelming majority of the total cellulosic ethanol volumes and this figure far exceeds the 206
million gallons that EPA proposed for 2016. [EPA-HQ-OAR-2015-0111-1826-A1 p.24]
DuPont is also concerned that there are a number of cellulosic ethanol producers that are
currently producing fuel outside the U.S. with pending fuel pathway applications. It is reasonable
to assume that these fuel pathway applications will be approved prior to the end of 2016 and
therefore these volumes should be considered in EPA's projections. [EPA-HQ-OAR-2015-0111-
1826-A1 p.25]
22 Memo from the Renewable Natural Gas Coalition, 2015-2016 CELLULOSIC BIOFUEL PRODUCTION
VOLUMES, provided to D. Burkholder at EPA onMarch 20, 2015.
Ecoengineers
As the following comments will detail, we believe that existing production capacity for cellulosic
fuels is at sufficient levels to exceed the targets proposed in the NOPR for 2015 and 2016. We
also believe that the potential capacity to produce cellulosic RINs via biogas can meet the RFS'
statutory volume target for 2016 of 4.25 billion gallons of cellulosic biofuels. [EPA-HQ-OAR-
2015-0111-2269-A1 p. 1]
If a simple linear trend line of D3 RIN generation for the first half of 2015 is extrapolated over
the remainder of the year (Figure 1), we could see an 88% increase in D3 RIN generation during
the second half of 2015 over that of the first half, resulting in almost 150 million gallons of D3
RINs for all of 2015. Moreover, assuming such a linear trend for the current growth of the
Renewable CNG/LNG sector, we could reasonably expect to see around 350 million gallons of
RIN generation from Renewable CNG/LNG in 2016. [EPA-HQ-OAR-2015-0111-2269-A1 p.2-
3]
The RVO of 206 million for 2016 is more concerning because in addition to the current volumes
of renewable CNG/LNG being produced, 2016 will see cellulosic ethanol facilities coming
online. The NOPR includes TABLE IV.B.3-1—PROJECTED PRODUCERS OF
CELLULOSIC BIOFUEL BY 2016, which lists cellulosic ethanol/gasoline facilities with a
combined production capacity of nearly 90 million gallons coming online in the second half of
2015. The combination of the cellulosic ethanol and Renewable CNG/LNG could provide a D3
RIN supply of nearly 450 million gallons in 2016. [EPA-HQ-OAR-2015-0111-2269-A1 p.3]
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A key question is what is the total potential for biogas as feedstock for renewable transportation
fuel and D3 RIN generation? To answer this, I would like to refer to a report titled "Renewable
Hydrogen Potential from Biogas in the United States" by G. Saur and A. Milbrandt, published in
July 2014 by the National Renewable Energy Laboratory (NREL)1V. The report estimates total
potential and net availability of methane in raw biogas from four sources of biogas: (1)
wastewater treatment plants (WWTPs), including domestic and industrial sources; (2) landfills;
(3) animal manure; and (4) industrial, institutional, and commercial (IIC) sources. According to
the report, the U.S. total methane potential in raw biogas from the sources examined is estimated
at about 16 million tons, but the net availability calculated is about 6.2 million tons. 6.2 million
tons of renewable methane roughly translates into 3.8 billion RINs (assuming 53 MMBTUs/ton
and 11.78 RINs/MMBTU). This number could be significantly larger if we take into
consideration ligno-cellulosic biomass (e.g., crop and forest residues or dedicated energy crops)
that could be used to produce biogas via anaerobic digestion (dry fermentation, co-digestion) or
through thermo-chemical means (e.g., gasification). [EPA-HQ-OAR-2015-0111-2269-A1 p.3-4]
We are requesting that the EPA take into consideration the opportunity to fully convert into
biogas the existing organic materials identified in NREL's report. We understand that this
conversion will not happen overnight; however, a key ingredient to the successful development
of the biogas to renewable fuel industry is the regulatory certainty provided by the RFS.
Therefore, it is critical that the EPA set strong and stable targets for 2015, 2016 and beyond for
cellulosic biofuels that will pro-actively promote the extraction of methane from the various
organic streams listed above. The current proposed levels in the NOPR fall severely short of
what is required to create the investor confidence needed to develop these assets. [EPA-HQ-
OAR-2015-0111-2269-A1 p.4]
Environmental and Energy Study Institute (EESI)
Indeed, the Renewable Volume Obligates (RVOs) may be so low that cellulosic fuel producers
(including biogas) may produce more RINs than required under the proposed 2016 RVO. [EPA-
HQ-OAR-2015-0111-1944-A1 p.5]
N. Bowdish Company
For that reason, I can understand why you must do something regarding the statutory level of
4.25 billion gallons of cellulosic ethanol for 2016. The physical fuel does not exist at that
volume. However, the same cannot be said for the 15.0 billion gallon conventional biofuel
statutory level. [EPA-HQ-OAR-2015-0111-1202-A1 p.2-3]
Phillips 66 Company
The 2016 volume appears overly optimistic given past forecasts versus actual production. The
time to start-up, line out and ramp up production at new facilities has historically been much
longer than EPA has assumed in setting the standards. EPA should reduce the 2016 cellulosic
volume proposal and base it on the latest 3 months of actual production prior to finalizing the
standards. [EPA-HQ-OAR-2015-0111-2039-A1 p.5]
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POET-DSM Advanced Biofuels
1. The NPRM assumes that it is possible that producers with start dates after July 1, 2015
("post-July producers") may have no production in 2015 - and possibly no production in
2016, even if they start production in 2015. (See Table IV.E-1 at 80 Fed. 33,145.) Such
an approach is not consistent with the assumptions used for producers that start
production before July 1, 2015 ("pre-July producers"); such producers are assumed to
produce at the 50th percentile in their assigned range in both 2015 and 2016. There is no
logical basis for treating the post-July producers who actually commence commercial-
scale production in 2015 differently from the pre-July producers in this regard.
Accordingly, EPA must be prepared to finalize an RVO for 2016 if any post-July
producers actually produce a significant volume of saleable ethanol in 2015. If, for
example, one million gallons of such production by one firm (Ensyn, see Table IV.D-3 at
80 Fed. Reg. 33,143) places that firm in the category of producers with "consistent
commercial scale production," id, then the same level of such production by other firms
in 2015 should be reflected in the final 2016 RVO.
2. The NPRM assumes that a biorefinery that started production in the spring of 2015 will
still most likely be at the 50th percentile of its assigned production range in calendar year
2016, potentially 18 months after commercial production has commenced. Thus, in Table
IV.E-2,34 the production capacity of pre-July producers is de-rated by 50 percent from the
upper end of the estimated production range - an adjustment with a huge impact on the
size of the 2016 RVO. No commercially viable ethanol plant, using a business model like
that of POET-DSM calling for production of more than two or three million gallons of
ethanol in the first full year of commercial operation, will commence production until it
can be assured that it will crest the 50th percentile of full production in that initial 12-
month period.35 One improvement in the predictive methodology would be for EPA to
distinguish between producers with business plans that include full-scale production at
levels of about 20 million gallons a year, from those that plan for smaller-scale
production. Firms that commence commercial production with operations designed for
saleable annual outputs of 20 million gallons a year or more are unlikely to replicate the
history of the firms that entered and have now left the market (see 80 Fed. Reg. 33,143
col. 2). [EPA-HQ-OAR-2015-0111-1943-A1 p.14-15]
32 See Cummings Decl.lflf 4-5, 10-11.
33 80 Fed. Reg. at 33,143 col. 2.
34 80 Fed. Reg. 33,145.
35 See Cummings Decl. Iffl 10-11.
Unilever
Another concern for Unilever is the significant reduction in the mandates for cellulosic biofuels
(0.2 billion gallons in 2016). Unilever fully supports the development of cellulosic biofuels and
believes EPA should direct resources to support the scaling up of that market. The consequence
of cellulosic biofuels being unable to meet its intended production levels is that biodiesel has
been called upon to fulfill an increasingly large portion of the advanced biofuels RFS. We urge
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EPA to adjust down the total advanced biofuel mandate in tandem with reductions in the
cellulosic mandate. [EPA-HQ-OAR-2015-0111-2273-A2 p.2]
ZeaChem Inc.
For 2016, to account for the continued redirecting of anaerobic digestion output to renewable
compressed/liquefied natural gas, projected new biogas volumes from new commercial volume
anaerobic digestion facilities and volumes of cellulosic ethanol from the recently completed
(API, Poet/DSM, Abengoa, Enerken, etc.) and to be completed (Dupont and Quad County Corn
Processers, ZeaChem, etc.) commercial scale fermentation based biorefmeries, the EPA should
modify its proposed RVOs at a minimum per Table 1 below. [EPA-HQ-OAR-2015-0111-1906-
Al p.3-4] [Table 1 can be found on page 4 of EPA-HQ-OAR-2015-0111-1906-A1.]
Response:
Several commenters supported EPA's consideration of updated RIN generation data in
establishing the 2016 cellulosic biofuel standard, and requested that EPA increase our estimates
of cellulosic biofuel for 2016 to be in-line with, or slightly higher than, projections submitted by
the Coalition for Renewable Natural Gas (295 million gallons in 2016). EPA has considered
these projections in determining the volume of cellulosic biofuel we believe will be produced in
2015 and 2016. We note that in previous years projections submitted by the CRNG have over-
estimated actual cellulosic biofuel production for CNG/LNG from biogas. Similarly, the
production rates to date in 2015 are once again lower than those projected by the CRNG. While
we believe the projections provided by CRNG and other producers are a valuable part of the
information we consider when making our projections, we do not think it would be appropriate
to simply adopt these projections in light of the fact that these projections have been overly
ambitious in previous years. The data also do not support using a linear growth trend based on
data from the first half of the year, as one commenter suggested. Nevertheless, we have
increased our projection of cellulosic biofuel production in 2016 for the final rule based on
updated cellulosic biofuel data from 2015.
A commenter supported EPA's general methodology for projecting cellulosic biofuel production,
but stated that EPA should add to this projected production volume any available carryover RINs
from the previous year. This is not a relevant consideration for the 2016 cellulosic biofuel
standard. Because we projected that there will be a very small number of cellulosic carryover
RINs available for use in 2014 (approximately 20,000), the 2014 standard is established based on
the number of cellulosic biofuel RINs available for use towards compliance, and the 2015
cellulosic biofuel standard is established late in the year and is based in large part on actual RIN
generation data, we do not anticipate that there will be any significant volume of cellulosic
carryover RINs produced in 2015 available for use in 2016 (see Section 6.2 of the RTC for a
further discussion of cellulosic carryover RINs). EPA will continue to monitor the cellulosic
RIN market, and may consider the existence of carryover cellulosic biofuel RINs in setting
future standards if and when such an action is supported by future data and circumstances.
Similarly, a commenter suggested that EPA should anticipate that there will be carryover RINs
from 2015 available for use in 2016 due to the purchase and use of cellulosic waiver credits in
2015, and requested that we increase the 2016 standard to account for these RINs. As stated
above, we anticipate that the number of cellulosic RINs generated in 2015 will be approximately
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equal to the cellulosic standard for 2015 in this final rule. We do not believe it would be
appropriate to assume the purchase of cellulosic waiver credits in 2015 and increase the 2016
standard by a corresponding amount, as there is no basis for doing so and because this would
result in standards that exceed our projected cellulosic volumes for 2016, effectively ensuring
that obligated parties would have to purchase cellulosic waiver credits in 2015 or 2016.
A commenter suggested that EPA had significantly under-estimated the availability of cellulosic
biofuel in 2016, and requested that EPA maintain the statutory volume (4.25 billion gallons) in
order to encourage investment in cellulosic biofuel production. This would not be consistent
with EPA's charge under the statute, which states that if EPA determines, based on EIA's
estimate, that the projected volume of cellulosic biofuel production in a given year is less than
the statutory volume, then EPA is to reduce the applicable volume of cellulosic biofuel to the
projected volume available during that calendar year. EPA notes that the cited information from
NREL about the potential for biogas in the United States is not intended to represent an estimate
of biogas that can be used as transportation fuel in the United States in 2016, but rather the total
volume of biogas that could be produced. The biogas must be used as a transportation fuel in
order to generate a cellulosic biofuel RIN and be included in our projections of cellulosic biofuel
projection in 2016. As the projected available volume of cellulosic biofuel in 2016 is far below
the statutory volume, EPA would not be justified in maintaining the statutory volume.
A commenter stated that as a result of EPA's approach to the RFS standards, potential cellulosic
biofuel producers are beginning to consider building production facilities overseas rather than in
the United States. While we acknowledge that one of the goals of the RFS program is to
incentivize the growth of the cellulosic biofuel industry in the United States, we do not think it is
appropriate, or even beneficial to the industry, to establish the total renewable fuel standard
beyond the maximum reasonably achievable volume, or the cellulosic biofuel standard beyond
the volume expected to be produced in 2016. Companies make decisions on where to construct
potential production facilities based on a wide variety of factors. If a company chooses to
construct a cellulosic biofuel production facility overseas production form these facilities will be
considered in our cellulosic biofuel productions if we believe any fuel produced at the foreign
facility is likely to be used as transportation fuel in the United States.
Commenters expressed concern that the cellulosic biofuel standards in 2015 and 2016 could be
met entirely by CNG/LNG derived from biogas, or that actual cellulosic RIN generation would
exceed the cellulosic requirement, resulting in a lack of incentives for the development of liquid
cellulosic biofuels. EPA's projections of available volumes include both liquid fuels and
CNG/LNG derived from biogas. We will continue to project the availability of all cellulosic
biofuels, include liquid cellulosic biofuels and CNG/LNG derived from biogas, in an effort to
incentivize the production and use of these fuels, and have in fact increased the required volume
of cellulosic biofuel in 2016 in this final rule from the proposed level. We can also modify our
projection methodology as appropriate in the future if the data at the time suggests we are under-
estimating the available volumes of CNG/LNG from biogas as well as production of liquid
cellulosic biofuels in making our volume projections.
A commenter requested that potential cellulosic volumes from pending pathway applications be
included in our projection for 2016. We do not believe this would be appropriate, as final
decisions as to whether or not these fuels will qualify as cellulosic biofuel have not been
made. We also note that very few of the pathways that have been submitted for consideration as
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cellulosic biofuels would be in a position to produce fuel in 2016 even if their petitions were
approved in the very near future.
A commenter noted the potential for very large volumes of biogas to be produced, or
alternatively hydrogen from the reforming of this biogas, and suggested that we set our standards
to account for this fuel. We acknowledge the large potential for biogas production in 2016,
however we note that the biogas is only eligible to generate RINs if it is used as transportation
fuel, and if this use can be verified according to EPA's regulations. The current market for
CNG/LNG for use as transportation fuel is limited, as discussed in Section IV of the final
rule. The market for hydrogen used as a transportation fuel is much smaller still, and hydrogen
does not currently have a pathway to generate RINs in the RFS program. We therefore do not
think the very large volumes of cellulosic biofuel suggested by this commenter are likely to enter
the transportation fuel market in 2016.
A commenter suggested that EPA's proposed volume of cellulosic biofuel in 2016 was overly
optimistic, and that EPA should instead base our projection on the last 3 months of actual
production data. As discussed in Section IV of the final rule, it is not appropriate to project
future production from a new industry based exclusively on historic production data, nor would
it be consistent with EPA's charge to adopt a neutral methodology. We note that the volume of
cellulosic biofuel produced in 2015 exceeded the volume projected in EPA's proposed rule, and
that the 2016 projection was based on the same methodology. We have therefore adjusted our
methodology slightly for 2016 based on the most recent data, and are requiring a slightly higher
volume of cellulosic biofuel in 2016 in this final rule than was proposed.
A commenter requested that for the final rule EPA re-evaluate whether potential cellulosic
biofuel producers should be included in the grouping that have or have not yet begun commercial
scale production. We have continued to monitor the progress of the potential cellulosic biofuel
producers, and have placed them in the appropriate category based on the most recent available
information. The commenter also incorrectly claims that EPA's proposed methodology projects
production from companies that had achieved commercial scale production at 50% of the high
end of the range. This is not the case. EPA projected production from these facilities at the 50
percentile of a range where the low end was the production volume over the previous 12 months
and the high end was generally equal to the facility capacity (adjusted assuming a 6 month ramp-
up period). We therefore projected that, on average, these facilities would produce a volume half
way between their capacity and what they had produced in the previous year, not at half of their
capacity. We also note that we used a 50th percentile value to project the production from these
facilities as a group, rather than individually. It is likely that some will achieve production near
their facility capacities, while others may struggle to increase their production beyond the level
achieved in the past 12 months, resulting in a 50* percentile value being appropriate for the
group as a whole (see Section IV of the final rule for more detail).
A commenter called on EPA to direct resources to the development of cellulosic biofuel to
reduce the demand for biomass-based diesel. The cellulosic volume for 2016 in this final rule,
which is equal to the expected production volumes, is intended to provide the appropriate
incentive for the cellulosic biofuel industry. Any other support is beyond the scope of the rule.
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4.4 Rescission of the 2011 Cellulosic Biofuel Standards
Comment:
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
API and AFPM support EPA's proposal to grant their petitions for reconsideration, rescind the
2011 cellulosic biofuel mandate, and refund the money paid by obligated parties to purchase
cellulosic biofuel waiver credits.110 In promulgating the 2011 cellulosic biofuel standard, EPA
produced an aspirational, rather than a realistic, cellulosic biofuel production estimate. [EPA-
HQ-OAR-2015-0111-1948-A1 p.53]
The U.S. Court of Appeals for the District of Columbia Circuit vacated the 2012 cellulosic
biofuel standard on the grounds that EPA failed to apply a "neutral methodology" because "the
risk of overestimation [was] set deliberately to outweigh the risk of underestimation."111 In
promulgating the 2011 cellulosic biofuel standard, EPA has now acknowledged that it used
119
essentially the same methodology that the D.C. Circuit held to be unlawful. EPA's
acknowledgment that it failed to apply a neutral methodology in establishing the 2011 cellulosic
biofuel standard compels the Agency to rescind the standard. [EPA-HQ-OAR-2015-0111-1948-
Al p.53]
110 See 78 Fed. Reg. at 71737, 71751; see also NPRM at 33145
111 APIv. EPA, 706 F.3d 474 (D.C. Cir. 2013).
112
78 Fed. Reg. at 71751 (EPA "used essentially the same methodology to develop the 2011 cellulosic biofuel
standard as we did to develop the 2012 standard....").
Independent Fuel Terminal Operators Association (IFTOA)
V. Rescission of 2011 Cellulosic Biofuel Mandate
The Association supports EPA's proposal to rescind the 2011 cellulosic biofuel
standard. IFTOA's Members understand that there was no cellulosic biofuel production in 2011,
and therefore, the projections made for that year and the mandate established based on those
projections were far too high. Thus, following the decision of the Court of Appeals for the
District of Columbia on the 2012 cellulosic biofuel mandate, rescission of the 2011 standard is
appropriate because it was determined using the same methodology as that in 2012. [EPA-HQ-
OAR-2015-0111-1947-A1 p. 5]
Response:
Both comments support EPA's decision to rescind the 2011 cellulosic biofuel volume
requirements. EPA is finalizing this decision in today's rule.
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5. Proposed Percentage Standards
Comment:
Missouri Corn Growers Association (MCGA)
In addition we believe the EPA must correct accounting errors in the calculations that set the
RFS2 compliance targets. The first error needing immediate attention is the estimation of
gasoline consumption expected in Alaska; a state that opts out of the RFS2 program completely.
According to this proposed rule, EPA expects gasoline consumption to rise 54% in Alaska in a
single year. Analysis of the year over year average gasoline consumption in Alaska is actually on
the decline and doesn't match EPA's reported values. [EPA-HQ-OAR-2015-0111-2507-A2 p. 2]
Response:
One stakeholder said that, in excluding the volume of gasoline and diesel used in Alaska from
the nationwide volume of gasoline and diesel used to calculate the percentage standards, we
incorrectly assumed that gasoline demand in Alaska would rise 54% in a single year. In fact the
exclusion of gasoline and diesel demand in Alaska from the calculation of the percentage
standards was based on the fraction of the nationwide total which is expected to be from
Alaska. As shown in memoranda to the docket for the NPRM, we assumed that the volume of
nationwide gasoline which is consumed in Alaska is 0.2127% for all three years (2014, 2015,
2016) based on data derived from EIA's "State Energy Data System (SEDS): 1960-
2012. "30 Thus the volume of Alaskan gasoline that was excluded from the calculation of the
percentage standards was proportional to the nationwide total, and was not assumed to increase
by 54%.
30 See the following document in EPA docket EPA-HQ-OAR-2015-0111: "Calculation of % standards for 2014,"
"Calculation of % standards for 2015," "Calculation of % standards for 2016"
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6. Treatment of Carryover RINs
6.1 General Comments on Treatment of Carryover RINs
Comment:
Abengoa Bioenergy; Biotechnology Industry Organization
EPA's complete exclusion of consideration of carryover RINs is also arbitrary. As EPA notes,
the availability of RINs in 2014 is dependent on settling the 2013 obligations, which the Agency
has delayed at the request of obligated parties. EPA cannot use its unconscionable and arbitrary
delays as justification for excluding consideration of carryover RINs. Instead, the Agency must
set the 2014 and 2015 RVOs based on the full availability of RINs and without setting artificial
and unwarranted limits based on purported infrastructure constraints. [EPA-HQ-OAR-2015-
0111-1958-A2p. 29]
It is not clear that EPA has the authority under the statutory scheme to take actions that
artificially increase the stock of carryover RINs to provide a hypothetical "means of compliance
when natural disasters cause unexpected supply limitations."181 Other provisions of the RFS
scheme, such as the general waiver provision for severe economic harm and built-in compliance
flexibilities, are adequate to address such potential hypothetical risks. Indeed, EPA's attempt to
"presence]" a "bank" of carryover RINs appears to be a back-door method of expanding its
general waiver authority to reduce volume obligations based on severe economic or
environmental harm pursuant to sub-subparagraph (o)(7)(A)(i) of the statute. Using carryover
RINs as another means to prevent less than severe harm would appear to be inconsistent with the
limits on EPA's waiver authority embodied in that provision and recognized by EPA. [EPA-HQ-
OAR-2015-0111-1958-A2p. 53]
In addition, it would be arbitrary and capricious - and irreconcilable with the purposes of the
statute and the program - for EPA to allow any RINs to simply expire unused, including but not
limited to 2012, 2013, and 2014 RINs. The destruction of RIN value by setting volume
obligations that result in expiration of unused RINs does not serve any legitimate purpose and
violates Congress's directive to the agency to increase renewable fuel use, while making RIN
credits available "for the purpose of complying with" the renewable volume obligations.185
[EPA-HQ-OAR-2015-0111-1958-A2 p. 54]
In sum, EPA has not justified its exclusion of carryover RINs in its consideration of supply
available to meet volume obligations for these years. To comply with Congress's directive to
encourage growth in the use of renewable fuels in the future, EPA must take into consideration
the use of all available carryover RINs to meet volume obligations. [EPA-HQ-OAR-2015-0111-
1958-A2p. 54]
181 Id. at 33114.
18542U.S.C. § 7545(o)(5)(B).
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Advanced Biofuels Business Council (ABBC)
Plainly put, the D6 carryover RINs in question represent RFS-eligible liquid renewable fuel
gallons already sold to obligated parties. These obligated parties chose, over a number of years,
to go "long" on compliance and carry over RIN credits from year up to the maximum 20% of
obligation. But these RINs still represent available supply of renewable fuels because RINs can
only be created when an RFS-eligible gallon of renewable fuel is produced, and can only be
carried over by obligated parties. [EPA-HQ-OAR-2015-0111-3528-A1 p.6]
D6 carryover RINs represent RFS-eligible liquid renewable fuel gallons already sold to obligated
parties. If this does not constitute available supply of compliance fuel, it is hard to imagine how
this or any other part of the Clean Air Act would work. [EPA-HQ-OAR-2015-0111-3528-A1
p.22]
Relying on carryover RINs to avoid statutory waivers is no more a "deliberate draw down"
today than it was in 2013, when EPA took this very path. Carryover RINs are held by
obligated parties, and obligated parties choose whether or not to draw them down for
compliance. Setting a more aggressive RVO would require more RINs to be retired, but that
can be done by blending more renewable fuel (i.e. which would bring more RINs into the
system). [EPA-HQ-OAR-2015-0111-3528-A1 p.22]
AJW, Inc.
Renewable volume obligations are satisfied with RINs. As a result, the "volume available" to
satisfy a given renewable volume obligation could hardly be anything other than the actual
volume of applicable RINs that are available to satisfy that obligation. Expected production in
the calendar year is an alternative but fundamentally inadequate measure for determining
applicable volume. It understates volume available in a given calendar year because it does not
take into account cellulosic biofuel volume that is generated but not used in the prior year. This
fuel would naturally (and unambiguously) be "volume available" for use in the given calendar
year. [EPA-HQ-OAR-2015-0111-2268-A1 p.7]
AL-Corn Clean Fuel; Badger State Ethanol; Big River Resources, LLC; Central Indiana
Ethanol (CIE); Commonwealth Agri-Energy, LLC; Husker Ag LLC; Pacific Ethanol, Inc.
4. The proposed rule ignores the availability of carryover RINs, and disregards their role in
enabling compliance with 2014-2016 RVOs.
Even if oil companies were correct that the current infrastructure cannot distribute volumes of
ethanol above the so-called 'blend wall,' there would still be a sufficient number of carryover
RINs available to bridge any 'gap' between RFS requirements and actual volumes blended.
Based on EPA data, it seems likely that 1.0-1.5 billion ethanol and biodiesel RINs will be carried
into 2014 and made available for compliance with RFS standards. Quizzically, EPA admits in
the proposal that 'We have considered the possible role of carryover RINs in avoiding the need
to reduce the statutory applicable volumes, as we did in setting the 2013 RFS standards, but have
decided that the availability of carryover RINs should not preclude reducing the applicable
volumes.' Because carryover RINs represent gallons of renewable fuel that are—or were—part
of the total supply of renewable fuels, we strongly urge you to account for the availability of
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carryover RINs to assist obligated parties in meeting 2014-2016 obligations. [EPA-HQ-OAR-
2015-01 ll-1214-A2p.4]
American Coalition for Ethanol (ACE)
EPA's consideration of domestic supply needs to include RINs. [EPA-HQ-OAR-2015-0111-
2543-A2 p. 4]
According to reporting by the Oil Price Information Service, Babcock believes obligated parties
will not strain to meet the compliance target in 2016 because they will have ample carryover
RINs from the prior year to meet the obligation.8 [EPA-HQ-OAR-2015-0111-2543-A2 p. 6]
8 How Ethanol RINs Prices Reflect RFS Policy. Oil Price Information Service. June 18, 2015.
American Council on Renewable Energy (ACORE)
RINs represent the "supply" of renewable fuel that is produced. So carry-over RINs are simply a
measure of the excess "supply" of renewable fuels that obligated parties generated over their
volume requirements in a prior year. Therefore, carry-over RINs should be accounted for when
USEPA determines to what degree the "supply" of renewable fuel is adequate to meet the
statutory targets in a given compliance year. This means that if the amount of carry-over RINs
and newly generated RINs are sufficient to meet the volume requirements in a given year,
USEPA should not exercise its general waiver authority. [EPA-HQ-OAR-2015-0111-1926-A1
p.7]
USEPA should account for carry-over RINs in its calculation of "supply" in order to support the
specific market mechanism under the RFS that will foster investment in and expansion of the
biofuel industry. [EPA-HQ-OAR-2015-0111-1926-A1 p.7-8]
USEPA's proposal actually requires almost no growth at all because obligated parties would be
able to comply with USEPA's proposed volume requirements through 2016 simply by
maintaining their 2014 usage level and drawing down the bank of carry-over RINs. There is no
reason to believe that, under USEPA's proposal, obligated parties will choose to blend more or
invest in expanding the use of renewable fuels rather than draw down the bank of carry-over
RINs. The market knows this—that is why the price of D6 RINs dived after the proposal was
announced. USEPA's proposal, therefore, does not support Congress's goal of using the RFS
program to stimulate rapid expansion in use of renewable fuels. [EPA-HQ-OAR-2015-0111-
1926-Alp.l3]
The "volume available during a calendar year" should include volume produced in the prior year
that is not required for meeting prior year obligations. The requirement to provide "appropriate
certainty"51 includes an obligation to take all reasonable actions to mitigate any damages or
disruptions that may be caused by USEPA's failure to accurately predict volume available in a
given year. This includes making corrections in subsequent years to accurately estimate volumes
available. The statutory requirement that credits generated be valid for compliance for the 12
months following the date of generation means that cellulosic biofuel produced in one year (and
its credits) should be permitted to meet, and considered available to meet, obligations in a
subsequent year. [EPA-HQ-OAR-2015-0111-1926-A1 p. 18]
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American Farm Bureau Federation (Farm Bureau); Illinois Farm Bureau; Indiana Farm
Bureau
If we are going to achieve the incentives Congress intended to increase renewable fuel supplies
and overcome market limitations it will be necessary to utilize the RIN market to provide a price
incentive on fuels containing higher percentages of ethanol. EPA states that they will not take
into account rollover RINs from previous years when setting the requirements in the Proposed
Rule. However, EPA should consider the fact that accounting for at least part of the roll over
RINs in the market and setting the volume standards accordingly will help to hold a price in the
RIN market that will result in competitive prices at the pump for El 5 and E85. Providing an
economically favorable situation where consumers will choose the higher ethanol blends lowers
the hurdle of the blend wall, and makes the ambitious renewable fuel standards that Congress
mandated in EISA possible. [EPA-HQ-OAR-2015-0111-2355-A1 p. 5]
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
In these situations, carryover RINs fulfill a vital role in the implementation of the RFS; they help
ensure that the domestic fuel market can be served and that obligated parties are not placed in
jeopardy, including the possibility of CAA violations should RINs needed for compliance
become unavailable. [EPA-HQ-OAR-2015-0111-1948-A1 p.12]
We agree with EPA that carryover RINs should not be considered in setting the annual RFS
1 &
standards. EPA proposes to allow the program to function as it was designed so that obligated
parties have at least some limited flexibility to manage their compliance using banked RINs. It is
imperative that obligated parties have this necessary compliance flexibility without worrying that
EPA may set annual RFS standards and increase the regulatory mandates by removing this safety
net based on depleting the volume of carryover RINs. [EPA-HQ-OAR-2015-0111-1948-A1
p.12]
The NPRM correctly explains why EPA should not rely on a further drawdown of the RIN bank
to meet the volume requirements for 2014 or future years.100 Even at the current level of excess
and carryover RINs, some obligated parties may not be able to obtain sufficient RINs.101 And
once the RIN bank is depleted, obligated parties will be forced to resort to drastic alternative
measures. [EPA-HQ-OAR-2015-0111-1948-A1 p.50]
18 NPRM at 33130.
100 See NPRM at 33130.
101 See, e.g., Frank Pici, Monroe Energy Letter to EPA, Docket ID No. EPA-HQ-OAR-2012-0546-0110 (Apr. 7,
2013).
Archer Daniels Midland Company (ADM)
Carryover RINs should be calculated as actual gallons of supply. [EPA-HQ-OAR-2015-0111-
2262-A1 p. 2]
DuPont
First, setting the volumes at a higher level would not result in noncompliance. Obligated parties
threaten noncompliance but there are a number of readily available market based options to
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facilitate meeting their obligations. Second, if a natural disaster were to cause supply limitations
either for biofuels suppliers or gasoline suppliers or refiners, EPA has existing waiver authority
for economic hardship or biofuels supply shortages. Therefore, the explanation that EPA gives
for refusing to account for carryover RINs in setting biofuels volumes in 2014, 2015 and 2016
isn't based in reality and serves to let the oil industry escape from blending addition biofuels.
[EPA-HQ-OAR-2015-0111-1826-Alp.l6]
Growth Energy
Because of the large bank of carryover Renewable Identification Numbers ("RINs"), obligated
parties will be able to fully comply with their proposed renewable volume obligations merely by
maintaining their 2014 levels and drawing down the RIN bank. Obligated parties will have a
strong incentive to do just that, especially because EPA's proposal will trigger its authority to
"reset" all the volume requirements for renewable fuel going forward—and EPA's current
proposal and prior 2014 proposal leave little doubt that it will use that authority to establish new
volume obligations that will not push the industry to expand and that will thus diminish the value
of banked RINs. [EPA-HQ-OAR-2015-Oil 1-2604-A2 p. 1-2]
EPA is required to treat banked RINs as supply when determining the level at which "supply"
would be "inadequate" for purposes of the general waiver provision. In other words, EPA must
set the renewable fuel volume requirements high enough to ensure that the RIN bank is
consumed. [EPA-HQ-OAR-2015-Oil 1-2604-A2 p.4]
Finally, although EPA estimated that after 2013 compliance, there will be a "bank" of
"approximately 1.8 billion [carryover] RINS,"75 it "propos[ed] not to count those RINs as part of
the 'supply' for 2014 or later years."76 EPA explained that it would be prudent, and would
advance the long-term objectives of the Act, not to set standards for 2014, 2015, and 2016 so as
to intentionally draw down the current bank of carryover RINs," so that obligated parties could
keep these banked RINs to "address[] significant future uncertainties and challenges."77 [EPA-
HQ-OAR-2015-0111-2604-A2 p.12]
Obligated parties could use the RIN bank to achieve full compliance with EPA's proposal
through 2016 while barely expanding the use of renewable fuels above 2014 levels. [EPA-HQ-
OAR-2015-0111-2604-A2 p. 14]
There is no reason to believe that a RIN "buffer" would work as EPA envisions. The proposal
assumes that, given the choice between using relatively cheap carryover RINs to meet volume
obligations and investing in infrastructure to increase distribution and consumption of renewable
fuels, the oil industry will choose the latter so as to preserve their RIN "buffer." Yet to date the
oil industry, as described above, has done everything possible to obstruct the deployment of
renewable fuel above the E10 blendwall, including refusing to make relatively economical
investments in infrastructure for distributing higher-ethanol blends. [EPA-HQ-OAR-2015-0111-
2604-A2 p.62]
RINs, including carryover RINs, reflect the supply of renewable fuel and are part of the
mechanism for compliance from which the general waiver may provide relief. Accordingly,
carryover RINs must be accounted for when determining whether supply is inadequate for
purposes of the general waiver provision. [EPA-HQ-OAR-2015-0111-2604-A2 p.64]
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Granting the waiver would thus make the recent RIN devaluation permanent, crippling the
market incentive Congress intended to stimulate increased production and use of renewable fuel.
By contrast, imposing the statutory volumes after the proposed cellulosic waiver flow-through
and thereby requiring obligated parties to draw down banked carryover RINs would revive RIN
prices and, critically, "incentivize precisely the sorts of technology and infrastructure
investments and fuel supply diversification that the RFS program was intended to promote."370
[EPA-HQ-OAR-2015-0111-2604-A2 p.64]
EPA maintains that it can and should exclude carryover RINs from consideration of whether
"supply" is "inadequate" in order to provide obligated parties with "compliance flexibility" and a
"program buffer."3 1 But the statute already contains mechanisms to do this, and therefore
forecloses EPA from creating a new mechanism for the same end, namely, the REST bank. [EPA-
HQ-OAR-2015-0111-2604-A2 p.64]
EPA must set renewable fuel volume requirements at levels that will consume the entire RIN
bank and drive growth in renewable fuels. The simplest appropriate way to do this is to increase
the proposed volume requirements up to the level of the cellulosic waiver flow-through, or until
the REST bank would be exhausted, whichever comes first. And this should begin in 2014, so that
the 2015 and 2016 volume requirements have the opportunity to drive growth [EPA-HQ-OAR-
2015-01 ll-2604-A2p.66]
75 Id. at 33,130. Excess RINs can be carried over into the next compliance year. 42 U.S.C. § 745(o)(5)(D)
76 80 Fed. Reg. at 33,121 n.59.
77 Mat33,130.
370 Monroe Energy, 750 F.3d at 919.
371 80 Fed. Reg. at 33,130.
HollyFrontier Corporation
Finally, preserving the RIN bank mitigates risk of fraudulent RINs. While much ground has been
made by EPA and industry to minimize the amount of fraudulent RINs traded in the open
market, instances still occur. This risk of fraud for an obligated party may further be reduced by
carrying over the maximum allowance of RINs. However, if the proposed 2016 volumes are
finalized, this may no longer be an option for refiners. [EPA-HQ-OAR-2015-0111-2257-A1 p.2]
Independent Fuel Terminal Operators Association (IFTOA)
III. Carryover RINs
The Association supports EPA's decision not to include carryover RINs in its calculation to
determine the appropriate reduction in the standards. This is particularly true for 2014. If the
inclusion of carryover RINs established mandates higher than actual use, it would be extremely
costly and difficult for many obligated parties to meet such standards. [EPA-HQ-OAR-2015-
0111-1947-A1 p. 4]
Members of the Association also agree with the Agency that carryover RINs provide flexibility
in the RFS Program and allow compliance even if the availability of RINs is limited. This
"buffer," as EPA calls it, is an essential tool needed by all obligated parties at one time or
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another. Therefore, exclusion of the carryover RINs is a reasonable approach to determining the
standards for 2014, 2015, 2016 and beyond. [EPA-HQ-OAR-2015-0111-1947-A1 p. 4]
Recommendation: Exclude carryover RINs from the calculation of the RFS mandates and
continue to allow them to be used to address future uncertainties and challenges. [EPA-HQ-
OAR-2015-0111-1947-A1 p. 4]
Specifically, the Association recommends the following: [EPA-HQ-OAR-2015-0111-1947-A1 p.
8]
4. EPA should not account for carryover RINs in making determinations about the RFS
mandates; such RINs are needed to provide flexibility within the RFS Program; [EPA-HQ-OAR-
2015-0111-1947-A1 p. 8]
Iowa Corn Growers Association (ICGA)
3. EPA's proposal removes the incentive provided by Renewable Identification Number
credits (RINs) to expand renewable fuel infrastructure. [EPA-HQ-OAR-2015-0111-1820-
Al p. 4]
EPA's proposal ignores the ability of El 5, E85, other mid-level blends and carryover RINs to
facilitate compliance with the statutory renewable fuel requirements of 14.4 billion gallons in
2014, and 15.0 billion in both 2015 and 2016. Leaving the RVO at the statutory levels would
ensure that RIN prices send the necessary signals to expand ethanol consumption above the
imaginary "blend wall." A strong and consistent RIN signal would drive increased demand for
all blends by allowing marketers and retailers to substantially discount the prices reflecting their
true cost advantage for these fuels relative to gasoline. Durable RIN prices would also drive
obligated parties to invest in the infrastructure needed to ensure required levels of biofuels can be
distributed in 2015, 2016 and beyond. Increased sales of higher blends through new and existing
pumps could easily bridge the gap between the E10 "blend wall" and the statutory requirements.
[EPA-HQ-OAR-2015-0111-1820-A1 p. 4-5]
EPA needs to reevaluate its assumptions on how much in the way of higher blends can be
reasonably consumed in 2015 and 2016 and examine how the volumes may change under
various RIN price scenarios. [EPA-HQ-OAR-2015-0111-1820-A1 p. 5]
4. The proposed rule ignores the availability of carryover RINs, and disregards their role in
enabling compliance with 2014-2016 RVOs. [EPA-HQ-OAR-2015-0111-1820-A1 p. 5]
Even if the opposition were correct that our nation's infrastructure cannot distribute volumes of
ethanol above the so-called "blend wall," there would still be a sufficient number of carryover
RINs available to bridge any "gap" between RFS requirements and the actual volumes blended.
Based on EPA data, it seems likely that 1.0-1.5 billion ethanol and biodiesel RINs will be carried
into 2014 and made available for compliance with RFS standards. Quizzically, EPA admits in
the proposal that "We have considered the possible role of carryover RINs in avoiding the need
to reduce the statutory applicable volumes, as we did in setting the 2013 RFS standards, but have
decided that the availability of carryover RINs should not preclude reducing the applicable
volumes." Because carryover RINs represent gallons of renewable fuel that are—or were—part
of the total supply of renewable fuels, we believe the availability of carryover RINs to assist
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obligated parties in meeting 2014-2016 obligations must be factored in. [EPA-HQ-OAR-2015-
0111-1820-A1 p. 5]
Iowa Renewable Fuels Association
The Disappearing RINs - Why Does EPA Break Its Own Precedent on Carryover
RINs? [EPA-HQ-OAR-2015-0111-1957-A2p. 5]
In an astonishing and confusing change of protocol in setting the 2014-2016 RFS levels, EPA
announced the "availability of carryover RINs should not preclude reducing the applicable
volumes." A RIN is nothing more than the electronic signature of a physical gallon of qualifying
renewable fuel. Carryover RINs represent actual, physical gallons of renewable fuel that were
produced and, whether already blended or not, remain available - in their electronic format - as
part of the total renewable fuel supply for use by obligated parties in complying with their RFS
requirements. [EPA-HQ-OAR-2015-0111-1957-A2 p. 5]
The EPA's understanding of the term "supply" has been heavily discussed over the last 18
months. The decision by EPA to break with its own precedents of factoring carryover RINs into
RFS supply considerations only adds to the sense that EPA has lost its way. Congress and the
President enacted the RFS to increase the production and use of renewable fuels. To use the
narrow and limited waiver authority granted by Congress to reduce the annual RFS levels should
not be done lightly. To ignore more than 1 to 1.5 billion carryover RINs when determining
available supply simply flies in the face of the clear intent of the program. [EPA-HQ-OAR-2015-
0111-1957-A2p. 5]
It also flies in the face of EPA's own precedents. When evaluating several requests for RFS
waivers during the historic drought of 2012, just as when evaluating the 2008 waiver requests,
the EPA clearly and specifically took into account the "available quantity of carryover RINs"21
when determining whether a waiver was justified. The reduced yields and higher corn prices
associated with the horrendous 2012 drought led to a significant pull-back in ethanol production.
However, as "indicated by EPA's modeling, the impact of the RFS volume requirements is
highly dependent on the volumes at issue, the number of RINs carried over from prior years and
the relevant market commodity prices..." (emphasis added).22 In discussing the importance of
carryover RINs, EPA noted "the number of rollover RINs available during the 2012/2013
marketing year affects the impact of implementation of the RFS volume requirements in
2013."23 [EPA-HQ-OAR-2015-0111-1957-A2 p. 5-6]
Had the "availability of rollover RINs"24 not be been factored in to EPA's "stochastic modeling,"
it is fair to ask whether the decision to deny the 2012 waiver might have been different. Yet,
history shows the decision by EPA to factor in carryover RINs was correct. Partly by using
carryover RINs, obligated parties met their 2012 and 2013 obligations and there was little
meaningful impact from the RFS on other economic sectors. The drought induced price impacts
dissipated and disappeared as the 2013 corn crop matured and was ultimately harvested. If
carryover RINs were appropriate to consider when setting the 2013 RFS level, they should
naturally be considered when setting the 2014 level as well. [EPA-HQ-OAR-2015-0111-1957-
A2 p. 6]
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Consistent with the 2008 and 2012 waiver request evaluations, EPA once again factored
carryover RINs into their 2013 RFS level determination. In deciding not to reduce the 2013
statutory RFS levels, EPA stated: "There will also be a significant number of carryover RINs
available from 2012 that can be used in lieu of actual volume in 2013 and which are sufficient in
number to address limitations in consumption ofethanol blends higher than E10..." (emphasis
added).25 [EPA-HQ-OAR-2015-0111-1957-A2 p. 6]
In fact, in response to suggestions during the 2013 public comment period that EPA should not
factor in carryover RINs when determining annual volume requirements, the EPA responded:
"...the final rulemaking for the RFS1 program did not describe the purpose of carryover RINs in
such narrow terms. Droughts were indeed provided as an example of a market circumstance that
could limit the production of renewable fuels, but the RFS1 final rule also described the use of
carryover RINs more broadly as a means for protecting against any potential supply shortfalls
that could limit the availability of RINs."26 [EPA-HQ-OAR-2015-0111-1957-A2 p. 6]
Even more importantly, after noting that carryover RINs "are a valid compliance mechanism"
the EPA highlighted that their job is "estimating the adequacy of the availability and use of
ethanol in 2013 for compliance purposes, and the availability of carryover RINs is certainly
relevant in analyzing that issue. Therefore, we believe that it is appropriate to consider carryover
RINs in the context of evaluating the comments received on the need for further compliance
relief to address the E10 blendwall."27 This approach was challenged and upheld by federal
courts. [EPA-HQ-OAR-2015-0111-1957-A2p. 6-7]
While the EPA notes that their 2013 conclusion is "specific to the circumstances present for
2013," it is also true that, just as in 2013, carryover RINs "are not the only available mechanisms
that obligated parties have for meeting" the standards.28 No self-inflicted lack of RIN data should
reduce EPA confidence to "assess the volume of carryover RINs currently available" to the
extent to where it would be "prudent" to set an RFS level that envisions absolutely no "draw-
down in the bank of carryover RINs." Any legitimate uncertainty is offset by the potential for
greater E85 sales, the completely underappreciated potential for El5 sales, the potential for
greater biodiesel sales, and the rapid growth in non-ethanol cellulosic fuel sales. All of these
compliance options should be considered collectively, not individually, otherwise caution turns
into paralysis. [EPA-HQ-OAR-2015-0111-1957-A2 p. 7]
The RIN system was designed as a compliance mechanism for obligated parties under the RFS.
However, an equal if not greater amount of concern over flexibility for obligated parties also
went into the final RIN system design. If the current EPA proposal to ignore carryover RINs is
allowed to stand, then the "flexibility" of the RIN system becomes one-sided, to be used to
unnecessarily reduce the RFS levels and to undermine the stated goals and implementation
schedule of the RFS. IRFA urges the EPA to return to the commonsense approach of factoring
carryover RINs into the decision-making process as was done during the 2008 and 2012 waiver
request determinations and again when EPA set the 2013 RFS levels. To do otherwise would be
an arbitrary and capricious action at the expense of renewable fuel producers and the stated goals
of the RFS. [EPA-HQ-OAR-2015-0111-1957-A2p. 7]
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21 Environmental Protection Agency. "Notice of Decision Regarding Requests for a Waiver of the Renewable Fuel
Standard." Federal Register Vol. 77, No. 228, page 70753.
22 Ibid.
23 Environmental Protection Agency. "Notice of Decision Regarding Requests for a Waiver of the Renewable Fuel
Standard." Federal Register Vol. 77, No. 228, page 70758.
24 Environmental Protection Agency. "Notice of Decision Regarding Requests for a Waiver of the Renewable Fuel
Standard." Federal Register Vol. 77, No. 228, page 70775.
25 Environmental Protection Agency. "Regulation of Fuels and Fuel Additives: 2013 Renewable Fuel Standards."
Federal Register Vol. 78, No. 158, page 49797.
26 Environmental Protection Agency. "Regulation of Fuels and Fuel Additives: 2013 Renewable Fuel Standards."
Federal Register Vol. 78, No. 158, page 49822.
27 Ibid.
28 Ibid.
Marathon Petroleum Company
We support the agency's decision to exclude carryover RINs when determining the RFS
standard. Consistent with the intent of the RFS, carryover RINs should be reserved for use by
companies to respond to operational problems or market dislocations. [EPA-HQ-OAR-2015-
0111-1932-A1 p. 6]
Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
B. EPA Correctly Refused to Consider Banked RINs In Its Determination of Whether
There Was "Inadequate Supply" of Renewable Fuel That Can Be Consumed
In determining the degree to which supply was "inadequate" in 2014, 2015, and 2016, EPA
correctly refused to consider RINs that had been or will be carried over from prior compliance
periods. As EPA explained, "carryover RINs are intended to provide flexibility in the face of a
variety of circumstances that could limit the availability of RINs, including weatherrelated
damage to renewable fuel feedstocks and other circumstances affecting the supply of renewable
fuel that is needed to meet the standards." Parties may carry forward an unlimited number of
credits, use those credits to satisfy up to 20 percent of their present year's volume requirement,
and sell the remainder. 18 Thus, obligated parties who accumulated excess credits in 2014 (for
example, integrated blender-refiners who blended more than they refined) will likely seek to
carry forward some number of those 2014 credits for use and/or sale in 2015. The same is true
for 2015 and each subsequent year. [EPA-HQ-OAR-2015-0111-2603-A2, p.9]
While some stakeholders have argued that EPA should set volume requirements based upon
supply projections and all "banked" RINs, EPA correctly refused to do so. That is so for several
reasons. First, carryover RINs act as a buffer that facilitates compliance even in unforeseen
circumstances—for example, a drought that increases corn prices and significantly changes the
economics of blending ethanol into E10. As EPA has explained, "we believe that carryover RINs
serve an important function under the program, including providing a means of compliance when
natural disasters cause unexpected supply limitations." Intentionally depleting the bank of
carryover RINs by setting volume requirements too high would mean that parties would have
diminished compliance flexibility in the future in the event of unforeseen circumstances, such as
a drought. [EPA-HQ-OAR-2015-Oil 1-2603-A2, pp.9-10]
Second, because of the E10 blendwall, blenders will no longer be able to produce excess RINs
simply by blending ethanol in excess of EPA's volume percentage requirement, as they were
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able to do during the 2010-12 time period. Thus, if obligated parties are forced to retire carryover
RINs, they are unlikely to be able to replenish the REST bank in future periods. Any depletion in
carry-over RINs is likely to be permanent. As EPA explained, "any draw-down in the bank of
carryover RINs required through setting volume requirements at levels higher than can be
achieved through actual renewable fuel use could not likely be reversed in the future." [EPA-
HQ-OAR-2015-0111-2603-A2, p. 10]
Third, the current RIN bank is not particularly large. EPA estimated in the NPRM that
approximately 1.8 billion RINs will remain banked after parties have demonstrated compliance
with the 2013 standards. Roughly speaking, that is only 11 percent of the total number of RINs
that parties will be expected to retire in order to satisfy the proposed 2015 standards, and merely
10 percent of the proposed 2016 standards (assuming no draw down), based on EIA projections
that EPA used for total gasoline consumption. [EPA-HQ-OAR-2015-0111-2603-A2, p.10]
That is significantly smaller than the 20 percent of volume requirements that EPA deemed
appropriate in its rulemakings establishing the RIN system. In the 2007 rulemaking establishing
the RFS program, EPA found that supply problems of 20 percent could exist in a single year and
adopted the rule that permits obligated parties to meet up to 20 percent of their obligations in a
particular year using RINs carried over from the prior year.23 In adopting the 20 percent rule,
EPA explained that with respect to supply and demand for RINs, the 20 percent allowance
provides "the appropriate balance between . . . protecting against potential supply shortfalls that
could limit the availability of RINs, and . . . ensuring an annual demand for renewable fuels as
envisioned by the Act."24 EPA rejected arguments from renewable fuel producers that a
carryover RIN cap closer to 10 percent would provide sufficient cushion for supply shortages.
EPA's principal concern was that 10 percent carryover would be insufficient to account for
potential shortages in ethanol supply. EPA explained that "[t]he level of 20 percent is consistent
with past ethanol market fluctuations." EPA gave the example of 1996, a year in which, as a
result of a drought, ethanol supply had diminished by 21% as compared with the prior year. In
the 2010 rulemaking adopting amendments to the RFS program, EPA again affirmed the
appropriateness of the 20 percent number.28 [EPA-HQ-OAR-2015-Oil 1-2603-A2, pp. 10-11]
Thus, if anything, current carryover RIN stocks are already too low to fully serve as a buffer
against unforeseen problems with supply. Certainly, EPA should not set standards so as to
intentionally reduce those stocks further. And EPA has acknowledged that its standard-setting is
a "very challenging task not only in light of the myriad complexities of the fuels market and how
individual aspects of the industry might change in the future, but also because we cannot
precisely predict how the market will respond to the volume-driving provisions of the RFS
program." Given the significant possibility that EPA has overestimated the amount of renewable
fuel that will be consumed in 2016—which we discuss further below—it would be particularly
imprudent for EPA to intentionally deplete existing stocks of carryover RINs in setting standards
for 2014 and 2015. [EPA-HQ-OAR-2015-Oil 1-2603-A2, pp.11-12]
Finally, carryover RINs are not themselves a "supply" of renewable fuel that EPA must consider
in exercising its general waiver authority. Carryover RINs represent renewable fuel that was
blended and consumed in the past. Setting standards so high as to require parties to surrender
carryover RINs to demonstrate compliance would not actually increase the quantity of renewable
fuel in transportation fuel, and thus would not advance the purposes of the statute. [EPA-HQ-
OAR-2015-0111-2603-A2, p.12]
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For all these reasons, EPA correctly determined that setting standards so as to effectively require
the depletion of carryover RINs would not be consistent with the "the critical compliance
flexibility, market liquidity, and program buffer functions served by carryover RINs." [EPA-HQ-
OAR-2015-0111-2603-A2, p.12]
It is no answer that parties can rely on carryover RINs to cover any deficit, in the event that
EPA's projections turn out to be too optimistic. As discussed above, EPA has made clear that
carry-over RINs serve an important role in buffering the industry against unexpected occurrences
like crop failures. They are not designed to cover REST shortfalls resulting from overly ambitious
volume requirements. Indeed, as EPA itself has acknowledged, now that the economy has
reached the E10 blendwall, any reduction in the number of carryover RINs is likely to be
irreversible. Given that reality, and the fact that RIN stocks already are only half as large as EPA
deemed prudent when it established the RIN program, it is imperative that EPA not look to
carryover RINs as a backstop compliance mechanism for overly aggressive, unachievable
volume requirements. [EPA-HQ-OAR-2015-Oil 1-2603-A2, p.39]
18 40 C.F.R. § 80.1427(a)(3), (5).
23 See 40 C.F.R. § 80.1427(a)(l), (5).
24 Regulation of Fuels and Fuel Additives: Renewable Fuel Standard Program, 72 Fed. Reg. 23,900, 23,934-35 (May
1, 2007).
28 Regulation of Fuels and Fuel Additives: Changes to Renewable Fuel Standard Program, 75 Fed. Reg. 14,670,
14,735 (Mar. 26, 2010) ("2010 Rule").
National Biodiesel Board
The reason banked RINs were generated in the first place was, by definition, to take advantage of
excess production capacity in the early years of the program. They were banked exactly for the
reason of being used in times of more limited supply. If they are not required to be used in 2014
they actually contribute to future supply shortfalls by strangling would-be 2015 production.
[EPA-HQ-OAR-2015-0111-1953-A2p.20]
The advanced biofuel industry has, in fact, exceeded the required volumes each year through
2013. This has provided for a significant number of prior-year RINs to be available for use in
2014, reducing the actual volumes used by another 536 million ethanol-equivalent gallons (20%
of 2.68 billion). EPA, then, has really proposed a volume for 2014 of 2.1 billion gallons for
advanced biofuels, which is less than the ethanol-equivalent gallons of advanced biofuels
produced in 2012. While asserting it is seeking to move the industry forward, EPA, in fact, is
taking large steps backward. [EPA-HQ-OAR-2015-0111-1953-A2 p.20]
As EPA has noted, 2014 is over, and it provides no rationale why it cannot consider the
carryover of 2013 RINs into 2014 that can be used to "ensure" the statutory volumes are met. As
EPA previously explained, the carryover RINs are "certainly relevant in analyzing [the
availability and use of ethanol]." 78 Fed. Reg. at 49,822. EPA stated that the purpose of
carryover RINs was not limited to such unforeseen circumstances. [EPA-HQ-OAR-2015-0111-
1953-A2p.21]
EPA contends that due to the "importance of carryover RINs" it would not be prudent to
"intentionally draw down the current bank of carryover RINs." 80 Fed. Reg. at 33,130. But, EPA
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is intentionally allowing for rollover of RINs into future years, which will reduce actual volumes
required and, as such, EPA previously found to be prohibited by statute. [EPA-HQ-OAR-2015-
0111-1953-A2p.l31]
The experience of the RFS program to date shows excess RINs going unused, despite Congress's
intent for the mandated volumes to be a floor. It will also improve RIN liquidity by ensuring
parties sell RINs to avoid their expiration. Yet, now, EPA has chosen to attempt to predict
"maximum achievable supply". Any incentives for overcompliance by the renewable fuels
industry is largely eliminated. As such, EPA's claim that carryover RINs are needed to address
"unexpected supply limitations" cannot be squared with its "maximum achievable volume"
approach. If there are some supply or other issues that were not anticipated, the waiver authority
remains for obligated parties to ask EPA to address unforeseen circumstances. [EPA-HQ-OAR-
2015-0111-1953-A2p.l32]
EPA contends that Congress intended to provide compliance flexibility. 80 Fed. Reg. at 33,119.
It also continues to assert that the carryover provisions are needed "to address unforeseen
circumstances." Id. at 33,130. But, obligated parties have remedies in those cases. That is, they
can seek an additional waiver or they can carry a deficit. That was the flexibility Congress
provided. Unlike the deficit carryover, Congress did not provide for rollover of prior-year RINs.
[EPA-HQ-OAR-2015-0111-1953-A2p.l32]
The most straightforward way to avoid the rollover issue, which is supported by the Act's
language and the legislative history, is to read the Act to allow the 12 month life to apply only to
the compliance year in which the credit was generated.115 This reading also fulfills Congress's
clear purpose to ensure a minimum amount of actual gallons of renewable fuel be sold each year,
while providing some flexibility, dictated by practical, environment and other market factors, as
to where such renewable fuel be sold. [EPA-HQ-OAR-2015-0111-1953-A2 p.132]
Since EPA is already keeping the volumes at a level below anticipated production, there is no
justification to allow for another reduction of 20 percent through use of prior-year RINs. Thus, to
the extent EPA continues with its proposal, it must eliminate the ability to use prior-year RINs.
This would further the program by forcing parties to sell their excess RINs, rather than hold onto
them for next year, improving market liquidity. [EPA-HQ-OAR-2015-0111-1953-A2 p.133]
National Corn Growers Association (NCGA)
NCGA believes statutory volumes of conventional ethanol can be easily achieved by simply
requiring any gap be filled by retiring excess RINs. [EPA-HQ-OAR-2015-0111-1939-A1 p.6]
The Agency should not artificially suppress RIN prices by refusing to reduce the number of
banked RINs. [EPA-HQ-OAR-2015-0111-1939-A1 p.7]
Paul Bertels Farms
I am also troubled by the Agency's unwillingness to force a reduction in banked RINs to make
up the shortage between gallons produced and statutory requirements. Clearly, banked RINs
were designed as a supply consideration, since obligated parties can use these RINs to show
compliance. Forcing a retirement of a portion of excess RINs would incentivize the petroleum
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industry to embrace biofuels and return the market to growth curve designed in the legislation.
[EPA-HQ-OAR-2015-0111-2799-Alp.l-2]
PBF Holding Company LLC
In addition, EPA should avoid relying on carryover RINs because it removes the flexibility that
Congress reserved for obligated parties by removing a critical, strategic compliance option. If
EPA were to rely on carryover RINs when establishing the RFS (as it did in 2013), EPA
transforms the range of compliance options available to affected parties — a critical scheme
contrived by Congress to effectively balance the compliance burden with cost effective strategic
planning — into a mandate to purchase RINs on the spot market. [EPA-HQ-OAR-2015-0111-
1724-A1 p.4]
Poet, LLC
EPA states that it is proposing to base the 2014 RVOs on the "number of RINs supplied in 2014
that are expected to be available for use in complying with the standards."92 The NOPR further
states that "Because 2014 has passed, the final rule cannot alter" 2014 volumes of renewable
fuel.93 However, EPA fails to recognize that the 2014 RVO can significantly impact RIN prices
that can spur investment now, and the large volume of banked RINs. And certainly banked RINs
are "available for use." [EPA-HQ-OAR-2015-0111-2481-A1 p.22]
As noted above, banked RINs could readily accommodate an increase in the 2014 (and 2015)
Base Renewable RVOs to offset exports that would not have occurred but for EPA failing to
issue the RVOs on time. EPA increasing the Base Renewable RVOs so that banked RINs would
be used to offset these exports would be consistent with its past precedent and applicable case
law. Banked RINs also provide a compliance mechanism, in addition to E85/E15 and BED
volumes, so that EPA can confidently set the 2016 Base Renewable RVO at the statutory volume
(15 billion gallons). [EPA-HQ-OAR-2015-0111-2481-A1 p.25]
Renewable Fuels Association (RFA)
Because RINs represent physical gallons of renewable fuel that are, or were, part of the fuel
supply, EPA's proposal to ignore carryover RINs essentially treats some gallons of previously
produced renewable fuel as if they don't count, clearly undermining the intent of a program that
was expressly designed to create a lasting growth market for renewable fuels. [EPA-HQ-OAR-
2015-0111-1917-Alp. 13]
EPA's proposal to ignore carryover RINs in setting 2014-2016 RVOs contradicts the Agency's
treatment of carryover RINs in previous rulemaking and administrative actions. EPA's exclusion
of carryover RINs is even more confounding [EPA-HQ-OAR-2015-0111-1917-A1 p. 14]
Thus, RIN stocks must also be considered when determining whether the supply of renewable
fuel is adequate to meet statutory requirements. The University of Illinois estimates that 1.435
billion D6 RINs were carried out of the 2013 compliance year and available for compliance with
2014 standards.28 Therefore, when new D6 RINs generated in 2014 are combined with carryover
RINs, the total supply of D6 RINs available for compliance with the 2014 RVO is at least 15.05
billion. This amount far exceeds the statutory RVO requirement of 14.4 billion gallons. [EPA-
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HQ-OAR-2015-0111-1917-A1 p. 20]
28 Paulson, N. '2015 1st Quarter RIN Update.' farmdoc daily (5):78, Department of Agricultural and Consumer
Economics, University of Illinois at Urbana-Champaign, April 29, 2015.
Shell Oil Products US
EPA correctly determined that it would not be appropriate to attempt to set the standards for
2014-2016 such that obligated parties would have to drain their banked RINs to maintain
compliance. As EPA explained in the preamble, maintaining an adequate RIN bank provides
important flexibility to maintain compliance in the event of unforeseen events. [EPA-HQ-OAR-
2015-01 ll-2716-A2p.5]
The Andersons, Inc.
Because carryover RINs represent gallons of renewable fuel that are—or were—part of the total
supply of renewable fuels, we strongly urge you to account for the availability of carryover RINs
to assist obligated parties in meeting 2014-2016 obligations. [EPA-HQ-OAR-2015-0111-2509-
A2 p.4]
Response:
EPA appreciates the importance of carryover RINs to the RFS program. As the comments
indicate, carryover RINs have played a crucial role in planning for and achieving compliance
with RFS requirements, in enabling the RIN market to function in a liquid manner, in providing
the statutory credit program function, in avoiding excessive market price swings, and in
determining whether and to what extent statutory volume targets can be met. In considering
whether and how to exercise our authority to reduce statutory volume targets for 2014-2016, we
have weighed these various roles and sought to appropriately balance them in the context of the
overall statutory goal of significantly increasing the amount of renewable fuels in the
transportation fuel supply through increasing RFS volume requirements.
In determining whether and by how much to reduce the statutory volume targets for 2014-2016,
we began our analysis by taking into account the further progress that can be made to overcome
the E10 blendwall and increase the supplies of various types of renewable fuel to the vehicles
(and other qualifying uses) that can make use of it. For the reasons explained in the final rule and
in other sections of this RTC document, EPA has concluded that there is an inadequate domestic
supply of renewable fuels to satisfy the statutory volume targets for total renewable fuel for
2014-2016, and that there are insufficient reasonably attainable volumes of advanced biofuel to
satisfy the statutory advanced biofuel targets in this time period. Furthermore, in light of the
uncertainties and challenges in setting and meeting the standards, as well as allowing for the
benefits of carryover RINs that are mentioned above to continue to operate to facilitate program
operation and compliance and to contribute towards avoiding the possibility of subsequent
waivers, we have determined that it is prudent for EPA to set the volume requirements for 2014-
2016 without the express intention or expectation of a drawdown in the current bank of carryover
RINs. We have considered whether the statute requires that carryover RINs be considered part of
the "supply" in the phrase "inadequate domestic supply" in CAA section 21 l(o)(7)(A) and have
determined that the issue is ambiguous and that the goals of the program are best served by
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interpreting the term "supply' to refer only to volumes of qualifying renewable fuel produced
and used during the compliance year in question. As discussed in the final rule, after determining
that there is an inadequate domestic supply, we then consider the availability of carryover RINs
in deciding the extent to which we should use our discretionary authority to reduce the statutory
volume targets based on a finding of inadequate domestic supply. In this instance, based on our
evaluation of the current size of the bank of carryover RINs and the important program functions
they serve, we have determined that a waiver of the total renewable fuel volume targets is
appropriate, and that the extent of the waiver should not assume an intentional drawdown in the
bank of carryover RINs.
Many renewable fuel producers asserted that the statute requires EPA to consider carryover RINs
in determining whether there is an inadequate domestic supply. Commenters pointed to our
action in establishing the 2013 RFS standards and urged us to count on carryover RINs to avoid
the need to reduce statutory requirements for 2014-2016. According to these commenters, since
obligated parties demonstrate compliance by acquiring RINs, if obligated parties have sufficient
carryover RINs to bridge any gap between the statutory volumes and the amount of renewable
fuels available for blending in a particular year, the domestic supply of renewable fuel is
adequate for that year. Conversely, comments from obligated parties supported EPA's proposal
to not intentionally draw down the bank of carryover RINs and argued that preserving the
carryover RIN bank was necessary to provide them with the necessary compliance flexibility to
address unforeseen events such as operational problems, market dislocations, supply limitations,
or fraudulent RINs.
As explained in Section II.H of the final rule, we believe it is appropriate for EPA to not
intentionally draw down the current bank of carryover RINs in setting the 2014-16 annual
volume requirements. The U.S. Court of Appeals for the D.C. Circuit affirmed that EPA has the
discretion to determine whether the availability of carryover RINs should be considered in
deciding whether and how to exercise the cellulosic waiver authority to reduce the statute's
volume requirements in its recent decision in Monroe Energy v. EPA, 750 F.3d 909 (D.C. Cir.
2014). The court upheld EPA's decision not to waive the 2013 statutory advanced and total
renewable fuel volume requirements based in part on the availability of abundant carryover RINs
to address a scenario where increasing physical volumes of renewable fuels came up short. That
decision illustrates that under appropriate circumstances in determining whether to exercise the
cellulosic waiver authority, EPA may properly take into account the possibility that some amount
of carryover RINs could be drawn down as a basis for deciding to maintain (or minimize the
reduction in) statutory volume targets.
With respect to both waiver authorities in CAA sections 21 l(o)(7)(D)(i) and 21 l(o)(7)(A), we
believe that carryover RINs should be considered in a manner that respects their role in
providing compliance flexibility. Congress called for a credit system that helps facilitate
compliance, including by allowing credits generated one year to be used for compliance the
following year. This system, as implemented by RINs, gives obligated parties the option, but not
the obligation, of generating excess RINs one year and selling them and/or carrying them over to
the next year for use. It is up to obligated parties to decide how to achieve compliance - whether
to generate their own RINs by blending renewable fuel they or others produce; purchase RINs
generated by others; or some combination of the two approaches. Interpreting the statute to
require that available carryover RINs necessarily be used to meet otherwise unachievable
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statutory standards could dissuade some obligated parties from acquiring them. The compliance
flexibility afforded by carryover RINs is important to obligated parties and to the RFS program
itself by allowing obligated parties to address unforeseen circumstances affecting the supply of
renewable fuels and minimizing the need for waivers during the compliance year. Although we
believe that the availability of carryover RINs is relevant to whether and how statutory waiver
authorities should be exercised, we disagree that the statute compels EPA to require a drawdown
in the bank of carryover RINs in considering when and by how much to reduce the statutory
targets using our statutory waiver authorities.
Where circumstances make it appropriate to rely on carryover RINs to avoid or minimize
reductions in statutory volumes, we intend to do so, as we did in setting the 2013 standards.
Though this number could be considerably lower as a result of compliance actions not yet
recorded, for 2014-2016, we project that as many as 1.74 billion carryover RINs will be available
for compliance, down from the 2.6 billion carryover RINs available for meeting the 2013
standards. This is roughly 10 percent of the final 2016 total renewable fuel volume standard and
just half of the 20 percent limit permitted by the regulations to be carried over for use in
complying with the 2016 standards. Consistent with our past practice, we considered the
availability of carryover RINs in making a determination about whether and how to reduce the
2014-2016 statutory volume requirements, and that assessment was properly done in view of the
specific circumstances presented for 2014-2016. Considering all of the various relevant factors
for 2014-2016, including the potential benefit to biofuel producers in drawing down the bank of
carryover RINs, the role they play for obligated parties in managing compliance, the declining
number of carryover RINs, the uncertainty in their balance due to delayed compliance with the
2013 and 2014 standards, the increased level of the 2016 standards, the significant uncertainties
and challenges involved in setting and meeting the final standards, and the decreased likelihood
of replenishing the collective bank of carryover RINs in the future due to the likelihood of
increasingly challenging standards, we have concluded that we should not set the volume
requirements for 2014-2016 in a manner that would be expected to require a drawdown in the
collective bank of carryover RINs.
We also note that the availability of carryover RINs in one year is important to the availability of
carryover RINs in subsequent years. To the extent obligated parties possess banked carryover
RINs, they typically use them to achieve compliance in the current compliance year since
carryover RINs expire at the end the year. By using carryover RINs, obligated parties have the
opportunity to obtain and bank RINs generated by blending renewable fuel during the current
compliance year as carryover RINs for the subsequent compliance year to address future
compliance challenges and uncertainties. The importance of carryover RINs in 2014-2016 to the
ability to bank carryover RINs for subsequent years was an important consideration in our
decision to preserve available carryover RINs, given the likelihood of ongoing challenges in
meeting the RFS standards.
We appreciate that it would be helpful to obligated parties if we foreclosed the possibility of ever
again counting on carryover RINs to avoid or minimize the reduction of statutory standards.
Leaving open that possibility leaves obligated parties with some uncertainty about their
compliance options. However, EPA continues to believe that the statutory purpose of
significantly increasing the volume of renewable fuels is best served by continuing to consider
carryover RINs in deciding whether and how to exercise the statute's waiver authorities on a
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year-by-year basis. As explained in Section II.H of the final rule and below, we believe the
circumstances for 2014-2016 warrant setting the volume requirements without the express
expectation or intention of drawing down the current bank of carryover RINs.
We also appreciate that it could be favorable to biofuel producers for us to count on carryover
RINs as a basis for to maintaining the statutory volume targets or minimizing the reduction in the
statutory volume targets, since higher standards generally create higher demand for and/or higher
prices for their products. If the standards cannot be achieved, then RIN prices may rise
dramatically based on scarcity pricing, creating market turmoil that could operate to the short-
term benefit of renewable fuel producers. At the same time, many biofuel producers have made
significant investments in production capacity to meet the demand that the RFS standards help
create. The concerns that many raised about the potential for the proposed standards to damage
their businesses appear to be premised, however, on an assumption that renewable fuel
production volumes would decline significantly. The final rule requires an increase in all of the
four separate RFS standards from 2014 to 2016, requiring use of higher volumes than proposed.
Thus, the RFS program will continue to place upward pressure on the production of renewable
fuels. Furthermore, there is no evidence to support concerns that obligated parties would
intentionally draw down current RIN bank levels in order to avoid the use of renewable fuel
volumes to comply with the final standards. As evidenced by what happened in 2013 (discussed
in section II.H.S.iv of the preamble), obligated parties as a whole appear to have relied on the
collective bank of carryover RINs only after expending other options, which included using
advanced biofuels in excess of the standard to comply with the total renewable fuel standard.
As discussed in section II.H of the final rule, the bank of carryover RINs is analogous to a typical
bank account, in which it is commonly understood that a reserve fund should be maintained to
cover unforeseen circumstances. The suggestion that the EPA should rely on carryover RINs to
maintain statutory volumes for 2014-2016, effectively drawing down the bank of carryover RINs
to zero, is shortsighted and could create havoc in the market based on the inability to comply in
light of currently unforeseen events. If such currently unforeseen events occur without a bank of
carryover RINs to operate as a program buffer, we could see RIN shortages and price spikes,
potentially causing a need for an emergency waiver for even relatively small reductions in
renewable fuel supply or increases in petroleum fuel demand. This would only create further
program uncertainty for the investment needed for the program to grow. We believe that we
should not set the volume requirements for 2014-2016 in a manner that would be expected to
require a drawdown in the collective bank of carryover RINs given the level of the standards we
are promulgating, the level of uncertainty in the market, and the desire to provide some market
stability and assurance for further investment in renewable fuel production.
While the final volume requirements for advanced and total renewable fuels are lower than the
statutory levels, the statute authorizes waivers and EPA has made a determination in this
rulemaking that the statutory 2014-2016 volumes should be waived consistent with those
authorities. We have made a fact-based determination of the level of supply that actually
occurred in 2014, that is projected to occur in 2015, and that is the maximum reasonably
achievable for 2016 and have set the total renewable fuel volume requirements on that basis.
Similarly, we have set the advanced biofuel volume requirements to reflect actual volumes for
2014, projected volumes for 2015, and those that we believe will be reasonably attainable in
2016. Setting standards in this manner should result in a drawdown in the bank of carryover
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RINs not being critical to achieving compliance. However, the projections on which the
standards are based still involve unavoidable uncertainties, and the standards themselves require
that renewable fuel volumes substantially increase. The extent to which that increase occurs
depends in part on decisions and advances that need to be made by many market participants in
addition to obligated parties. As a result, some risk remains that our projections are over-
optimistic and that individual obligated parties will face challenges in complying with the
standards. The bank of carryover RINs will be available for such eventualities.
Many commenters noted that if EPA counted on carryover RINs being drawn down as
justification for maintaining the statutory volumes, the demand for and prices of RINs would
increase and further incentivize the blending of physical renewable fuel gallons. They expressed
concern that EPA had not appropriately considered the impact on the biofuel industry of
reducing the statutory volumes and the impact on REST prices from setting the volume
requirements at levels which preserve the current bank of carryover RINs. One commenter also
argued that the EPA was artificially suppressing RIN prices by not intentionally drawing down
the bank of carryover RINs in setting the volume requirements. As noted previously, we
appreciate the importance of maintaining or minimizing the reduction in the statutory volume
targets to the biofuels industry and the role of the biofuels industry in achieving the statute's
purpose of significantly increasing renewable fuel volumes. However, as explained in the final
rule, the statute both sets ambitious targets for increasing renewable fuel volumes and provides
EPA with waiver authority to reduce those standards in the event of specified circumstances,
including inadequate domestic supply. The statute also provides for credits that can be earned in
one compliance year and used in the next, which EPA implements by providing for a limited
number of excess RINs to be carried over into the following compliance year, and calls on EPA
to establish a workable RFS regulatory program. For the reasons explained in Section II.H of the
final rule, we believe we took appropriate account of these statutory elements and the specific
circumstances relevant to setting and meeting the 2014-2016 standards in concluding that it
would be unwise to maintain statutory volumes or set standards that effectively require a
significant drawdown of carryover RINs in this time period. We agree that REST prices play an
important role in incentivizing the renewable fuel development, production, distribution, and
marketing needed to increase renewable fuel supplies. However, we disagree that the standards
being set for 2014-2016 will artificially suppress RIN prices. Rather, an intentional significant
drawdown of the carryover RIN bank would likely result in artificial RIN price inflation,
something EPA is trying to avoid as even steep increases in RIN prices are not sufficient on their
own to bring about needed changes in the time available for compliance. Many market actors are
involved in making decisions needed to increase renewable fuel supplies, and even with upward
pressure on RIN prices, it will take time for needed developments to occur. The final standards
that we set for 2014 and 2015 cannot affect the delivery of renewable fuels for qualifying uses in
the United States that occurred over the previous 23 months, and there is virtually no lead time
available to impact renewable fuel use in the remaining one month in 2015. Thus, the standards
being finalized in this action will only be able to impact renewable fuel supplies for 2016. In the
meantime, we believe that the carryover RINs available for 2014-2016 should be preserved to
provide market liquidity and to help meet compliance challenges and uncertainties in this time
period and the future.
A few commenters objected to EPA's proposed rationale that carryover RINs should be
preserved as a program "buffer." They also argued that this rationale could not be reconciled
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with the statute's provision for carry-forward deficits, which they contended was the only
mechanism Congress provided for a buffer. As discussed earlier, we have consistently
considered the availability of carryover RINs in making waiver determinations, and we do so on
a case-by-case basis taking into account all of the relevant facts before us.31 Different
circumstances can and do lead to different decisions about whether (and how much) to rely on a
drawdown in the bank of carryover RINs when balancing the various objectives of the RFS
program. Under the statutory provision for credits with a 12-month credit life and the regulations
establishing carryover RINs, obligated parties have the option of obtaining and carrying over
excess RINs or carrying forward a compliance deficit to the next compliance year. This makes it
clear that carryover RINs are a key mechanism for providing compliance flexibility in addition to
that provided by the ability to carry forward a deficit. "Buffer" is another way of conceptualizing
the compliance flexibility that carryover RINs afford to address uncertainties and unforeseen
circumstances and otherwise manage compliance efforts, as well as to avoid unnecessary RIN
shortages or price spikes and provide liquidity to the RIN trading market.
We also note that in its initial RFS rulemaking, EPA capped the potential number of carryover
RINs that can be used for compliance purposes to balance obligated parties' interest in using
carryover RINs for compliance management with the interest of renewable fuel producers in
greater certainty about the level of production that would be required in any given year to meet
applicable standards. EPA decided that carryover RINs up to 20% of the compliance obligation
could be used. The statute's provisions for waivers, bankable credits, and carry-forward deficits
work together to allow the RFS program and its participants to respond to changing circumstance
and challenges while continuing to grow renewable fuel volumes.
One commenter suggested that EPA should not allow any RINs to expire unused and that setting
standards that result in the expiration of such RINs was arbitrary and capricious. We disagree
that the standards we have set for 2014-2016 will result in the unnecessary expiration of unused
RINs. As discussed in section II.H of the final rule, we believe that obligated parties place a high
value on carryover RINs and will not allow them to simply expire. Instead, carryover RINs will
effectively be "rolled over" by obligated parties using them for compliance before they expire,
and then replenishing the bank of carryover RINs by purchasing excess current-year RINs.
One commenter suggested that EPA should use carryover RINs to offset the volume of biofuel
that was exported during 2014 and 2015 when there were not RFS standards in place. We
disagree. We do not believe it would be appropriate to require the use of carryover RINs to offset
biofuel that was exported. The RFS standards are based on the amount of renewable fuel that
was used (or is expected to be used) to replace fossil transportation fuels in the United States for
any given year. There is nothing in the statute that compels EPA to require obligated parties to
draw down their collective bank of carryover RINs to account for biofuel that was exported by
domestic renewable fuel producers, and for all of the reasons discussed above and in the final
rule, we do not believe that it would be prudent to do so.
31 For information on our decision on the 2008 waiver request, see http://www2.epa.gov/renewable-fuel-standard-
program/denial-state-texas-request-waiver-portion-renewable-fuel-standard. For information on our decision on the
2012 waiver request, see http://www2.epa.gov/renewable-fuel-standard-program/learn-more-about-denial-requests-
waiver-renewable-fuel-standard.
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Some of the topics raised in comments in this section are addressed in more detail elsewhere. See
the following:
Section 2.2: Statutory Authorities for Reducing Volumes to Address Biofuel Availability and the
Ethanol Blendwall
Section 2.2.1: Cellulosic Waiver Authority
Section 2.2.2: General Waiver Authority
Section 2.2.2.1: Inadequate Domestic Supply
Section 2.2.2.2: Severe Economic Harm
Section 2.2.2.3: Severe Environmental Harm
Section 2.2.3: Combining Authorities for Reductions in Advanced Biofuel and Total Renewable
Fuel
Section 2.2.4: Inability of the market to reach statutory volumes
Section 2.3.1: Congressional intent to increase volumes
Section 2.6.1: E10 blendwall and demand for gasoline
Section 2.6.2: Assumptions of Zero Volumes for EO and El 5
Section 2.7.1: Achievable volumes of E85 consumption
Section 6.2: Comments with Respect to Specific Standards
Section 7.3: Fuels Industry Impacts (oil refineries, biofuel facilities)
Section 7.4: Impact on RINs
Section 7.5: Retail Fuel Prices
Section 10.1: Outlook for 2017 and beyond
6.2 Comments on Treatment of Cellulosic Carryover RINs
Comment:
AJW, Inc.
As explained in more detail in Sec IV.D below, we believe that throughout 2016 it will be
critical for both obligated parties and renewable fuel producers, to understand whether EPA
intends to count surplus RINs generated in 2016 as being available for use in 2017 when they
make cellulosic biofuel related pricing and investment decisions. As a result, in its final
rulemaking in November 30, 2015, EPA should determine and report how it intends to treat
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carryover D3/D7 RINs should they be generated in 2016. [EPA-HQ-OAR-2015-0111-2268-A1
p.8]
As described in the sections above:
• EPA is required to set new cellulosic biofuel volume obligations in a given year at a level
equal to the projected volume available;
• EPA is also required to make projections of volume available using a neutral
methodology that aims to match projected volume available to what the actual volume
available will be;
• The actual volume available must include the volume available from prior year
production, as represented by the volume of carryover D3/D7 RINs;
• EPA's methodology for projecting volume available will not be neutral unless it includes
a projection of carryover D3/D7 RINs. [EPA-HQ-OAR-2015-0111-2268-A1 p. 10]
It therefore follows that EPA has a statutory obligation to include a projection of carryover
D3/D7 RINs in its general methodology for determining projected volume available. [EPA-HQ-
OAR-2015-0111-2268-A1 p. 10]
EPA should also relax its 20% limit on the use of D3/D7 carryover RINs in order to ensure that
obligated parties are expressly allowed to use all available volume [EPA-HQ-OAR-2015-0111-
2268-Alp.l2]
We recommend that EPA, in its final rulemaking for the 2016 RVO, amend the limit on the
fraction of prior year cellulosic biofuel RINs that can be used to meet a given year's RVO. This
fraction is currently set in §80.1427(a)(5) as the number "0.20". We would propose that this
number be replaced by a factor "K", which should be the greater of:
i. 0.20; or
ii. 2.0*PCVi/PVAi [EPA-HQ-OAR-2015-0111-2268-A1 p.12-13]
Where PCVi is EPA's final projection of the volume available during year i from carryover RINs
generated in year i-1; and PVAi is EPA's final projection of the total volume available during
year i
We propose using the multiple of 2.0 in (ii) in order to give obligated parties reasonable
compliance flexibility. If some obligated parties decide to meet their volume obligations entirely
with current year RINs, then other obligated parties will be forced to use a fraction of carryover
RINs greater than PCVi/PVAi to meet their RVO. [EPA-HQ-OAR-2015-0111-2268-A1 p.13]
A change such as this is necessary to ensure that both obligated parties and renewable fuel
producers have appropriate certainty during 2016:
• that rules will not need to be amended in order for obligated parties to meet their 2017
volume obligations, even if there is large surplus production in 2016;
• that any surplus production in 2016 will be volume available in 2017; and
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• whether and how many 2016 D3/D7 RINs obligated parties should consider acquiring in
order to meet potential volume obligations during 2017. [EPA-HQ-OAR-2015-0111-
2268-Alp.l3]
Clean Energy Renewables
EPA must take into account any volumes expected to be produced and not used for compliance
in the prior year (i.e. excess production in the prior year). EPA must also consider any actual or
expected CWC purchases that lead to excess volume availability in the subject compliance year.
If EPA does not have such consideration in its RVO setting methodology, the methodology will
have a bias toward excess availability contrary to EPA obligations. Such a situation would
undermine the objectives of the statue by putting adverse market pressure on the development of
significant volumes of cellulosic biofuels. In order to create 'market certainty' for renewable fuel
producers and obligated parties, we believe EPA must clarify that its methodology does and will
include such considerations. [EPA-HQ-OAR-2015-0111-1908-A1 p.7]
We recommend EPA eliminate the 20% carry over limit prescribed in §80.1427 (a)(5) respecting
cellulosic biofuels RVO compliance. Removal of this arbitrary market barrier will provide
certainty to producers and investors that the RFS will not leave produced volume stranded.
[EPA-HQ-OAR-2015-0111-1908-A1 p.7-8]
Coalition for Renewable Natural Gas
RNGC anticipates RNG production will exceed the Proposed Rule's 2015 and 2016 cellulosic
biofuel RVO. Production from cellulosic ethanol producers has the potential to drive supply even
higher. The success of even one significantly sized project could increase cellulosic volume
availability beyond EPA's current projections.22 As a result, there is a very real potential for a
sizeable market imbalance. [EPA-HQ-OAR-2015-0111-3278-A1 p. 8]
In the March 2010 RFS2 Final Rule, EPA instituted a 20% rollover cap to each obligated party's
(OP's) use of prior year RINs for cellulosic biofuel RVO compliance. 3 According to EPA, "the
rollover cap is the means through which we are implementing the limited credit lifetime
provisions in section 21 l(o) of the CAA."24 As such, we understand the need to maintain a cap to
limit credit life to the subsequent year. We do however, question whether EPA gave appropriate
consideration to the negative impact such a rule could have on cellulosic biofuel certainty.
Unlike with other biofuels, obligated parties are protected from the risk of undersupply through
the availability of CWCs, and cellulosic biofuel producers are protected from the risk of
oversupply from the statutory requirement for the applicable volume to be set at the "projected
available volume." Rollover limits on cellulosic biofuels are not "ensuring an annual demand for
9S
renewable fuels as envisioned by EISA;" in fact the limits are contributing to additional market
uncertainty by risking limits to applicable volumes where EISA called for no such limits (except
the original statutory volumes). [EPA-HQ-OAR-2015-0111-3278-A1 p. 8-9]
As noted above, EPA must consider excess production as "volume available" in the following
year. Consequently, EPA should anticipate the potential for carry overs into subsequent years
and ensure there are protections in place to ensure an effective cellulosic biofuel RIN
marketplace. It is contrary to statutory intent to have a situation where available volumes could
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r\r
not be used for compliance, especially where that volume is under the statutory volumes. Such
risk reduces market certainty, and undermines investors' willingness to finance expansion of
cellulosic biofuel production capacity. [EPA-HQ-OAR-2015-0111-3278-A1 p.9]
RNGC requests that EPA reevaluate the 20% rollover cap, considering the special case of
cellulosic biofuels and the evolution of the category in recent years. EPA should target to use the
rollover provision only to limit any rollover beyond one year. We recommend EPA consider
increasing the 20% rollover cap to as high as 50%, thereby reducing constraints on the next year
rollovers, or instituting a formula whereby the rollover cap may be adjusted above 20% in the
event of volume available over the RVO but under the statutory limit. RNGC would welcome the
opportunity to discuss this matter with EPA further. [EPA-HQ-OAR-2015-0111-3278-A1 p.9]
Because of the special CWC circumstances outlined below, we believe EPA should effect this
change for the compliance years after 2016. Reduction of this constraint will provide greater
certainty to producers and investors that the RFS will not leave produced volume stranded, will
not undermine any protections for obligated parties in the event of under supply, and will further
the objectives of EISA by ensuring there are no unnecessary barriers to demand for cellulosic
biofuels. [EPA-HQ-OAR-2015-0111-3278-A1 p.9]
Successful performance by one single company, DuPont, could vault total cellulosic biofuel production by 18% of
EPA's projected 2016 production.
2340CFR§80.1427(a)(5).
24 Federal Register / Vol. 75, No. 58 / Friday, March 26, 2010, at 14,738.
25 Per EPA's justification for such limits in Federal Register / Vol. 75, No. 58 / Friday, March 26, 2010 / Rules and
Regulations, at 14,735.
26 3.0 billion gallons in 2015; 4.25 billion gallons in 2016.
Response:
With respect to the treatment of carryover RINs in the context of the cellulosic biofuel standard,
commenters raised three issues: (1) that EPA should make clear that any available cellulosic
carryover RINs will be added to EPA's projection of cellulosic biofuel production in the
following year in establishing the cellulosic biofuel standard, (2) that EPA should also take into
account the actual or expected CWC purchases that lead to excess volume availability in the
subject compliance year, and (3) that the 20% carryover limit should be eliminated or upwardly
adjusted for the cellulosic standard (commenter also suggested option of a formula for a cap
rather than specific limit). These comments are all generally either irrelevant to the current rule,
or beyond the scope of this rule, and where that is the case we are not providing a substantive
response to them at this time. Where potentially relevant to the rulemaking, we do not find
support in the current record for the suggested approach, as discussed below.
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With respect to the first issue, we have determined that there is likely to be a very small number
of cellulosic biofuel carryover RINs available for use in 2014 compliance.32 In this action, as
described in the final rule, we are setting the 2014 cellulosic biofuel volume requirement equal to
the number of cellulosic biofuel RINs generated in 2014 that are available for compliance. Thus
we have not added our estimate of the available cellulosic biofuel carryover RINs that can be
used for 2014 compliance to derive the cellulosic biofuel volume requirement, as suggested by
the commenter. However, the volume of carryover RINs is so small, that whether or not we were
to do so would not impact the applicable cellulosic biofuel percentage standard for 2014.
Furthermore, by basing the cellulosic biofuel volume requirements for 2014 and 2015 on actual
supply (including a projection for the last month of 2015), we believe that there will be precisely
the volume of current year RINs available for compliance, and that the insignificant bank of
carryover RINs available for 2014 compliance will not grow for purposes of 2016 compliance.
Therefore, we have determined this issue to be irrelevant for the present rulemaking, and are
therefore deferring consideration of the matter. Our action today should not be interpreted as
having resolved the issue. If available information suggests that there will likely be a substantial
number of cellulosic biofuel carryover RINs generated in 2016 for use towards the 2017
standards, such that counting cellulosic carryover RINs as part of the projected volume of
cellulosic biofuel production for purposes of CAA section 21 l(o)(7)(D) would make a difference
in the resulting percentage standard, we will substantively evaluate this comment at that time.
With respect to the second issue, we believe it would be inappropriate to consider the "actual"
use of CWCs in a prior year without also taking into consideration actual cellulosic biofuel
production and use in that year; the resulting net would be reflected in the volume of cellulosic
carryover RINs available for use in compliance in the next year. As noted above, there are an
insignificant number of cellulosic carryover RINs available for 2014 compliance, so this matter
is not relevant to the current rulemaking. We also anticipate that the number of cellulosic RINs
generated in 2015 will be approximately equal to the cellulosic standard for 2015 in this final
rule. We do not believe it would be appropriate to assume the purchase of cellulosic waiver
credits in 2015 and increase the 2016 standard by a corresponding amount, as there is no basis
for us to estimate expected CWC purchases, and because doing so would result in standards that
exceed our projected cellulosic volumes for 2016, effectively ensuring that obligated parties
would have to purchase cellulosic waiver credits in 2015 or 2016. Although the picture is not yet
complete (since CWCs can only be purchased at the time of demonstrating compliance and the
compliance deadlines for 2013-2016 have not yet occurred), available information on cellulosic
RIN purchases in 2015 do not suggest cause for concern regarding use of CWCs at this time. We
note that the commenter did not suggest a means by which EPA could predict the use of CWCs,
and the very limited experience that the RFS program has to date regarding compliance with
significant cellulosic standards does not provide a reasonable basis for EPA to derive an
"expectation" of their future use. Thus, whether or not the commenter's suggestion would be
legally permissible (which we are not resolving today), beneficial to the overall RFS program, or
practical to implement, we do not believe there is a valid basis for the approach suggested for
purposes of this rulemaking. If in the future it appears that obligated parties in fact make a
regular practice of avoiding purchases of cellulosic biofuels as the commenters fear by
purchasing cellulosic waiver credits and advanced biofuel RINs instead, then we will consider at
32 "Estimating Carryover RINs Available for Use in 2014," Dallas Burkholder, Office of Transportation and Air
Quality, US EPA. November 2015. EPA Air Docket EPA-HQ-OAR-2015-0111.
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that time the extent to which we have authority to take expected CWC use into account in setting
the cellulosic biofuel requirements, as well as the merits and options for doing so, based on the
need and conditions at the time.
With respect to the third issue, the 20% carryover limit was established in prior rulemakings and
generally applies to all of the RFS standards. EPA did not raise this issue for comment in the
NPRM, and we therefore consider comments suggesting that we change these regulations to be
beyond the scope of this rulemaking. However, EPA will continue to monitor the manner in
which obligated parties comply with the cellulosic biofuel standards, and may consider
proposing changes in the future.
Some of the topics raised in comments in this section are addressed in more detail elsewhere. See
the following:
Section 2.3.1: Congressional intent to increase volumes
Section 4: Proposed Cellulosic Biofuel Standards
Section 4.1: General Comments on Cellulosic Biofuels
Section 4.2: Cellulosic Biofuel Volume Assessment
Section 4.2.1: Potential Domestic Producers
Section 4.2.2: Potential Foreign Sources of Cellulosic Biofuel
Section 4.3: Proposed Cellulosic Biofuel Volume
Section 4.3.1: Proposed Cellulosic Biofuel Volume for 2014
Section 4.3.2: Proposed Cellulosic Biofuel Volume for 2015
Section 4.3.3: Proposed Cellulosic Biofuel Volume for 2016
Section 6.1: General Comments on Treatment of Carryover RINs
Section 10.6: Beyond the scope
Section 10.6.2: RFS program designs
Section 10.6.8: Cellulosic waiver credits
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7. Economic Impacts of the Proposed Rule
7.1 General Comments on Economic Impacts
Comment:
62nd Legislative District, Pennsylvania House of Representatives
Concerns regarding whether the costs outweigh the benefits of the program
Even assuming the validity of its policy goals, the program's benefits must continue to outweigh
the costs. In 2015's market of relatively low-priced fuel, the cost necessary to make renewable
fuel sources competitive is even higher than it was ten years ago. Some of the costs of the
program include the diversion of farmland and food production capability to fuel production, the
costs of compliance for fuel producers, and reduced overall fuel economy with the different fuel
blends.
Ideally, these concerns would spur Congress to re-examine the program wholesale, with an eye
toward reviewing the cost versus benefit of the program and possibly reforming the program
based on a decade of practical experience. Perhaps there are more cost-effective ways to meet
these policy goals. [EPA-HQ-OAR-2015-0111-3462-A1 p. 1-2]
Ace Ethanol/Fox River Valley Ethanol
As the president in two ethanol businesses in Wisconsin, one in Stanley and one near Oshkosh, I
have witnessed firsthand the positive impact these businesses have on our local economy. These
businesses have also stimulated investments regionally and nationally. Investments in these
businesses have led to the development of new and innovated processes that have resulted in
saving consumers more money at the pump, reduced our dependency on foreign oil, gives us
cleaner air and has created many good paying jobs in our rural communities. [EPA-HQ-OAR-
2015-0111-1200-A2 p. 2]
EPA's proposed drastic cuts in the RVO amounts will have a devastating financial impact on
rural economies as well as stopping further investments in ethanol businesses throughout the
nation. [EPA-HQ-OAR-2015-0111-1200-A2 p. 2]
Advanced Biofuels Association (ABFA)
Already, U.S. businesses that rely on the commitment of the federal government under the RFS,
have spent $14.72 billion dollars in the last six years in pursuit of the policy goals of the law.
According to Bloomberg, $33 billion has been invested world-wide in this sector over the last
four years. These numbers represent people and jobs all over America: jobs in rural America
planting and cultivating the best new energy crops, jobs building and operating bio-refineries,
technology and engineering jobs, and laboratory jobs researching new feedstocks and enzymes
and many more. [EPA-HQ-OAR-2015-0111-2498-A1 p.3]
Whether intended or not, the RVO process has sent a chilling signal to financial markets
everywhere about the continued desire of this Administration to support and grow an advanced
and cellulosic biofuels industry in the U.S. This Administration has spent over half a billion
dollars through the Department of Energy alone to develop the advanced biofuels industry. This
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Proposed Rule is a move in the right direction and is a vast improvement over previous
proposals. We look forward to continuing to working with the Agency as it moves forward to
finalize this rule as quickly as possible. [EPA-HQ-OAR-2015-0111-2498-A1 p.3]
Advanced Economic Solutions (AES)
The EPA proposal to reduce the renewable volume obligations (RVOs) below statutory levels
during 2014-15 is warranted and appropriate. Without EPA's adjustments, the scheduled
increase in the RVOs would result in higher gasoline and diesel fuel prices. Additionally, left
unchanged the mandates would create further upward pressure on the primary feedstock used to
produce the required biofuels - corn for ethanol and soy oil for biodiesel. [EPA-HQ-OAR-2015-
0111-1193-A1 p.l]
AL-Corn Clean Fuel; Badger State Ethanol; Big River Resources, LLC; Commonwealth
Agri-Energy, LLC; Husker Ag LLC; Pacific Ethanol, Inc.
6. EPA must carefully examine the potential negative economic impacts of the proposed
RVO reductions. We believe EPA must be cognizant of the potential negative economic and
environmental consequences of its actions. Unfortunately, the proposal is void of any analysis on
the possible impacts of cutting the RFS on the agricultural economy, gasoline prices, greenhouse
gas (GHG) emissions, investment in infrastructure, or investment in advanced and cellulosic
biofuels. [EPA-HQ-OAR-2015-0111-3419-A1, p.3]
The direct benefits to corn farmers are not all the RFS provides. It has created nearly 400,000
direct and indirect jobs that cannot be outsourced; it displaces 10 percent of our gasoline; it
helped reduce our dependence on foreign oil from over 60 percent a few years ago to 45 percent
today; it improves our air quality, revitalizes our rural communities, and reduces federal farm
program costs; and, most importantly, it provides savings for consumers at the pump—studies
showing ethanol reduces gas prices by 29 to 40 cents per gallon. [EPA-HQ-OAR-2015-0111-
3445-Al,p.l]
American Farm Bureau Federation (Farm Bureau)
Renewable fuels have been a tremendous success story for the nation as a whole as well as to the
rural economy. The RFS2 has reduced our country's dependence on foreign crude oil, reduced
air pollution, increased farm incomes and provided good paying jobs in rural America. [EPA-
HQ-OAR-2015-0111-2355-A1 p. 1] [EPA-HQ-OAR-2015-0111-1044 p. 169]
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
EPA's Proposed Rule is arbitrary and capricious because it does not include an adequate
assessment of the rule's expected costs and benefits. [EPA-HQ-OAR-2015-0111-1948-A1 p.56]
The Supreme Court recently held inMichigan v. EPA, No. 14-46, 2015 WL 2473453 (June 29,
2015), that EPA must conduct a cost-benefit analysis when regulating power-plant emissions
under 42 U.S.C. § 7412. The Court based that holding on two considerations. First, the Court
relied on statutory language indicating that EPA may not regulate power-plant emissions unless
EPA finds that such regulation is "appropriate and necessary." Id. at *4. This language, the Court
held, "requires at least some attention" to a rule's expected costs and benefits. Id. at *7. Second,
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the Court concluded that agencies generally must consider a rule's costs and benefits [EPA-HQ-
OAR-2015-0111-1948-A1 p.56]
Biotechnology Industry Organization
In 2009, Bio Economic Research Associates ("bio-era"), in a report commissioned by BIO,
modeled the expected U.S. economic impact of building an advanced biofuel industry from the
ground up to meet the goals of the RFS.119 Drawing on available pre-commercial bio-refinery
engineering and design studies, bio-era estimated that more than $95 billion in cumulative capital
investments would be needed between 2009 and 2022 for construction of nearly 400 advanced
biofuel bio-refineries with the capacity to produce 23 billion gallons of advanced biofuel. Figure
1 below shows bio-era's estimated annual and cumulative capital investments needed to maintain
the production ramp up envisioned in the RFS. Added to the annual investment for construction
costs are the annual operating costs for that new capacity. [EPA-HQ-OAR-2015-0111-1958-A2
p. 31]
119 Bio Economic Research Associates, U.S. Economic Impact of Advanced Biofuels Production: Perspectives to
2030 (Feb. 2009), available at https://www.bio.org/sites/default/files/EconomicImpactAdvancedBiofuels.pdf.
California Biodiesel Alliance (CBA)
The biomass-based diesel program has arguably been one of the most successful parts of the RFS
Program, yet it received a less than favorable ramp up. We have already seen what happens when
there is a small biodiesel market—investment stops, plants close down, people lose jobs, and the
lowest carbon fuels are affected first, and more dramatically. It is EPA's job to ensure that there
is a growing market for advanced biofuels, including biomass-based diesel. And this growing
market is crucial in order to meet the increasing carbon reduction goals of the LCFS. This RFS
Proposal does not do that. [EPA-HQ-OAR-2015-0111-1910-A1, p.2]
Central Indiana Ethanol (CIE)
6. EPA must carefully examine the potential negative economic impacts of the proposed
RVO reductions.
Here in Indiana, corn farmers helped produce almost one billion gallons of ethanol last year.
Ethanol is responsible for over 525 direct jobs, $30 million in salary and benefits, and over 4,100
indirect jobs in our state. That represents $3.6 billion in total economic activity and revenue for
our state. The advent of American made Ethanol has been the single greatest rural economic
driver since the depression. The EPA is about to shut the door on this economic driver. Your
proposed rule will shrink rural tax bases, negatively impacting schools, hospitals, Fire
Departments, and roads. Forcing land values and rents down will harm landowners, many of
whom are elderly and living on fixed incomes. Rural America cannot afford another hit. We
believe EPA must be cognizant of the potential negative economic and environmental
consequences of its actions. Unfortunately, the proposal is void of any analysis on the possible
impacts of cutting the RFS on the agricultural economy, gasoline prices, greenhouse gas (GHG)
emissions, investment in infrastructure, or investment in advanced and cellulosic biofuels. [EPA-
HQ-OAR-2015-0111-2821-A2 p.4-5]
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Colorado Corn Growers Association
The original intent of the RFS was to increase energy independence and invest in renewable
energy that decreases greenhouse gas (GHG) emissions, while also spurring economic growth in
the U.S. agricultural sector. The RFS has accomplished that and then some. Meanwhile, today's
farmers are doing their part, ensuring adequate corn supplies are available for biofuels, food and
other purposes, while also carrying over 1.5 to 2.5 billion bushels annually. [EPA-HQ-OAR-
2015-0111-2334-Alp.l]
Commonwealth of Pennsylvania
Concerns regarding whether the costs outweigh the benefits of the program
Even assuming the validity of its policy goals, the program's benefits must continue to outweigh
the costs. In 2015's market of relatively low-priced fuel, the cost necessary to make renewable
fuel sources competitive is even higher than it was ten years ago. Some of the costs of the
program include the diversion of farmland and food production capability to fuel production, the
costs of compliance for fuel producers, and reduced overall fuel economy with the different fuel
blends. [EPA-HQ-OAR-2015-0111-1933-Al p.l]
Ideally, these concerns would spur Congress to re-examine the program wholesale, with an eye
toward reviewing the cost versus benefit of the program and possibly reforming the program
based on a decade of practical experience. Perhaps there are more cost-effective ways to meet
these policy goals. [EPA-HQ-OAR-2015-0111-1933-A1 p.2]
Corn Producers Association of Texas (CPAT)
While the oil and gas industry may play a prominent role in Texas' economy, ethanol and
renewable fuels are duly important not only to the state's farmers, but to the Texas economy as a
whole. The renewable fuel sector, including conventional and cellulosic ethanol, biodiesel and
advanced biofuels and their suppliers, generates $12.6 billion of total economic output in Texas
annually. This sector also supports 53,871 jobs and generates $2.9 billion in wages annually,
contributing $563.5 million in federal taxes. [EPA-HQ-OAR-2015-0111-2276-A2 p. 1]
Dakota Spirit AgEnergy
Drastic cuts, such as those that EPA proposed, will have a devastating impact on agriculture and
our rural economies. By taking a step backward, you are sending a signal that the government no
longer supports the production of biofuels. This uncertainty, coupled with a dramatic cut in what
should be produced, puts my job and my fellow colleagues'jobs at risk. [EPA-HQ-OAR-2015-
0111-2057-A1 p.l]
The bottom line is that this proposal will have a devastating ripple effect on ethanol plants, their
production and the jobs they support — as well as the surrounding communities. With less
money, there is a smaller tax base — our schools, hospital and local municipal services will
suffer. I could very well lose my job, and in a time of economic uncertainty, we need to
capitalize on opportunities, such as biofuel production, to keep America and our rural economy
strong. [EPA-HQ-OAR-2015-0111-2057-A1 p.2]
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East Kansas Agri-Energy, LLC (EKAE)
East Kansas Agri Energy have helped the local community grow and thrive — showing the
nation and the world that rural America is booming and a leading area of innovation and
investment in future energy technologies. This proposal has the potential to destabilize rural
economies just as farmers are expecting a near-record corn crop. [EPA-HQ-OAR-2015-0111-
2607-A2 p.2]
We must move forward, not backward when it comes to developing alternatives to fossil fuels
and foreign oil. We all know that the RFS and biofuels have created jobs that cannot be
outsourced, which have helped ensure a robust rural America. [EPA-HQ-OAR-2015-0111-2607-
A2 p.2]
Additionally, renewable fuels are better for the air we breathe and for our environment — and
they are making a difference by decreasing our dangerous dependence on foreign oil. [EPA-HQ-
OAR-2015-0111-2607-A2 p.2]
Biofuels are better for our national security, energy security and they benefit the consumer by
providing them a choice and savings at the pump. [EPA-HQ-OAR-2015-0111-2607-A2 p.2]
After years of success from the RFS, we must not move backward. We must capitalize on the
current success and continue to invest in the future development and commercial scale
production of next generation biofuels. A rule such as this would only halt any further
innovation, investment and growth in what is already a successful and thriving industry that
supports farmers, plant workers and entire rural communities. [EPA-HQ-OAR-2015-0111-2607-
A2 p.3]
This approach, if adopted, would damage the RFS, lock this country into our reliance on oil, lead
to even more windfall profits for the oil sector, cost consumers at the pump, halt the deployment
of advanced biofuels, and increase greenhouse gas and toxic air emissions. If adopted, the
proposal would yield severe economic consequences. [EPA-HQ-OAR-2015-0111-2607-A2 p.3]
Florida Chamber of Commerce
Increasing the amount of ethanol to be blended in gasoline is irresponsible and increases costs to
both consumers and the environment. [EPA-HQ-OAR-2015-0111-3425 p.l]
I urge that you retreat from increasing the amount of ethanol in gasoline and consider the costs to
consumers, businesses and the environment if you do not. [EPA-HQ-OAR-2015-0111-3425 p.2]
Governor of Iowa, et al.
Unfortunately, the Federal policy uncertainty and indecision has jeopardized the health of the
economy in rural America. If the EPA's currently proposed rule becomes final, the negative
impact would be disproportionately felt by rural America. The EPA's proposed rule and decision
has already caused a ripple effect on agri-businesses, our communities, and the entire economy.
Despite Big Oil's attempt to pollute the public discourse, corn prices are approximately $3.50 per
bushel, down significantly from the 2012 drought levels of $8 per bushel. [EPA-HQ-OAR-2015-
0111-1915-A1 p.2]
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Governors' Biofuels Coalition
The proposed rule will prevent the growth of low carbon transportation fuels in our nation,
constrain a vital value-added path for bio-feedstocks, limit consumer choice at the pump, and
undermine our shared interest in revitalizing the nation's rural economy. [EPA-HQ-OAR-2015-
0111-2489-A1 p.l]
While the ethanol blending requirements for 2014 and 2015 are at actual production levels in the
proposed ruled, the volume required for 2016 is still much lower than the statutory volume set by
Congress in 2009. [EPA-HQ-OAR-2015-0111-2489-A1 p.l]
EPA has set blending levels for 2016 above current levels, largely because of rising gasoline use
predicted through 2016. According to EPA, the standards are "ambitious but within reach."
However, a target that hovers barely above production is certainly not "ambitious" and stifles
any notion by investors that the United States is a welcoming growth market for renewable fuels.
Congress passed the RFS with the intent of- among other things - attracting significant
investment to rural economies and diversifying our transportation fuel supply. So far, the RFS
has done just that in Iowa, Missouri, and many other states. But the chilling effect of delays and
policy uncertainty has already caused the industry to lose $13.7 billion in investments, mostly in
advanced biofuels.1 The proposed rule will prevent further investments. [EPA-HQ-OAR-2015-
0111-2489-A1 p.l]
The RFS has been a remarkable policy success for our states. It has reduced petroleum use,
provided consumer choice, diversified fuels, reduced transportation emissions, invigorated rural
economies, reduced economic vulnerability to global oil supply disruptions, and lowered fuel
prices. [EPA-HQ-OAR-2015-0111-2489-A1 p.2]
1 "Estimating Chilled Investment for Advanced Biofuels Due to RFS Uncertainty," Bio-Economic Research
Associates. U.S. Economic Impact of Advanced Biofuels Production: Perspectives to 2030. Washington, DC: bio-
era, Feb. 2009
Greater Mankato Growth
The Renewable Fuel Standard was created by Congress with the express purpose of developing
an industry that would produce American-made renewable fuels, thus lessening our dependence
on foreign sources of energy, and benefiting the rural economy and environment. The Renewable
Fuel Standard has proven to be an effective driver of renewable fuels and economic development
in our region. Every year it offsets millions of gallons of foreign oil imports, keeping investment
and jobs here in South Central Minnesota and it provides consumers a choice at the gas pump for
those who want a cheaper, cleaner burning fuel that supports rural economies. Further, many
renewable fuels facilities in our region are on the cutting edge of increasing efficiencies and
developing innovations in their production processes. As you work toward finalizing the,
proposed rule, we urge you to consider the importance of renewable fuel to the economy of our
region and ensure that this important industry can continue to grow. [EPA-HQ-OAR-2015-0111-
1312-Alp. 1-2]
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Growth Energy
Both aspects of the RFS program—increasing production of renewable fuels and their
consumption via transportation fuel—therefore depend on properly calibrated economic
incentives. And those incentives derive from properly ambitious volume obligations, as Congress
envisioned when it chose the statutory volumes. [EPA-HQ-OAR-2015-0111-2604-A2 p.5]
Highwater Ethanol, LLC
This potential action on adopting the proposal could/can be very devastating to the Renewable
Fuels industry. Even though the corn ethanol industry does not receive any subsidies for
production we do look to the Federal Government to maintain the direction that was adopted
eight years ago, when the Renewable Fuels Standard 2 was signed. If the Federal Government
{EPA} changes this direction the cause and effect could be irreversible, banks would question
the direction of the Government and any money that was available for Renewable Fuels
production facilities would dry up. There needs to be certainty in the moves that the Federal
Government {EPA} makes that allow Corn and Soybean Producers, investors, banks, renewable
fuel producers and the vendors to all these businesses the opportunity to operate our businesses
without worrying how or what the Federal Government may or may not do that can affect us.
[EPA-HQ-OAR-2015-0111-2506-A2p.l]
Illinois Department of Agriculture
To date, the RFS program has played a pivotal role in reducing petroleum imports to the lowest
level since the 1990s, lowering gas prices, improving air quality, and strengthening the economic
health of rural America and Illinois specifically. [EPA-HQ-OAR-2015-0111-0260-A1 p.l]
Illinois Farm Bureau
Renewable fuel policy has boosted the rural economy and the nation. The RFS2 has reduced our
country's dependence on foreign crude oil, reduced greenhouse gas emissions, increased farm
incomes and provided a source of good paying jobs in rural America. [EPA-HQ-OAR-2015-
0111-3290-A2 p.l]
Imperium Renewables and Renewable Biofuels
The earlier proposal to hold BED volumes at 1.28 billion gallons through 2015, and to reduce
dramatically the AB volumes from the statutorily mandated volumes, was interpreted by the
market as a retreat from the Administration's prior strong support and aggressive annual
increases in the required volumes for these biofuels. [EPA-HQ-OAR-2015-0111-2043-Al p.l]
Unfortunately, that perceived signal, combined with the failure of the Congress to provide a
predictable tax credit, resulted in a significant pullback on the part of investors, and in a number
of both small and larger production facilities being idled or permanently shuttered. Surviving
domestic producers also faced one of the most difficult business years, seeing the tightest profit
margins in years and a significant drain on capital available to weather future crises. [EPA-HQ-
OAR-2015-0111-2043-A1 p.l]
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Many planned investments for increases in capacity, for process improvements and technology
to handle more a more diverse range of feedstocks, and in the next generation of biofuels, were
all put on hold pending a more encouraging signal that could instill confidence in investors that
the program and the required volumetric obligations will continue to grow. Our companies are
no exception to these impacts — we have each deferred important investments until there is
more certainty regarding governmental policies that will facilitate further advances in our
industry. [EPA-HQ-OAR-2015-0111-2043-Al p.l]
Independent Fuel Terminal Operators Association (IFTOA)
In 2016, the proposed mandates would breach the blendwall causing refiners and importers to
undertake some undesirable operational choices to reduce their compliance obligations: they
could (i) reduce refinery runs and/or imports, thereby creating a shortage of transportation fuels,
or (ii) export more fuel. These options introduce uncertainty and additional costs to the market,
and ultimately to the consumer. [EPA-HQ-OAR-2015-0111-1947-A1 p. 2]
EPA may believe it should set future mandates at high levels so as to compel the market to make
dramatic changes, but such changes are also likely to cause great economic harm to consumers
and the economy. The potential for these adverse effects must be taken into consideration by the
Agency. While it may be appropriate for EPA to establish the mandates at levels that encourage
somewhat greater production and use of renewable fuels than the market would achieve in the
absence of such mandates, there is nothing that compels EPA — when exercising its waiver
authority — to establish aspirational or ambitious mandates. [EPA-HQ-OAR-2015-0111-1947-
Al p. 3]
II. E85
EPA has said that it wants future mandates to drive the market to make significant changes by
expanding infrastructure and modifying fuel prices to provide incentives for the production and
use of renewable fuels. In particular, EPA seems to be assuming that efforts to increase the use
of ethanol beyond the blendwall will be primarily a function of the volume of E85 that is
consumed. [EPA-HQ-OAR-2015-0111-1947-A1 p. 3]
EPA explains in the final rule that if it proposes high volume mandates, RIN prices are likely to
be higher than historical levels, and such RIN price increases are expected to help promote
growth in renewable fuel supply. In addition, EPA explains that high RIN prices can provide the
potential for reductions in the retail selling price of E85 and El 5 if distributors, blenders, and
retailers pass the value of those RINs on to end users. [EPA-HQ-OAR-2015-0111-1947-A1 p. 3]
Indeed, if faced with ambitious mandates, industry will likely be forced to make some of the
infrastructure investments and price modifications that EPA has suggested, thereby allowing
parties to meet their obligations under the RFS Program. However, those market changes come
with a cost. On the one hand, these investments and price reductions for E85 may help some
consumers overcome their objections to using that product - lower energy content, less
efficiency, and greater cost. On the other hand, and more significantly, if industry reduces the
price of E85 to meet the mandates, it will be forced to recover those costs on sales of E10 - the
primary fuel used by most consumers. It is not at all clear how much this "cross-subsidization"
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would cost and what impact it would have on the national economy. [EPA-HQ-OAR-2015-0111-
1947-A1 p. 3-4]
It appears that under this approach to establish ambitious standards, EPA has analyzed only one
portion of the transportation pool - E85 - and has ignored the impact on the larger portion -
E10. In addition, this analysis is based on the notion that renewable fuels, on an energy-
equivalent basis, will cost less than the petroleum-based fuels they are replacing. However, the
price of renewable fuels is affected by many factors such as the price of corn, which, in turn, is
impacted by weather. Thus, if renewable fuels cost more on an energy-equivalent basis than the
petroleum fuels they displace, there is a cost to using these renewable fuels. The higher the
required volume of these fuels, the higher this cost will be. [EPA-HQ-OAR-2015-0111-1947-A1
p. 4]
Recommendation: EPA should take a broader view and analyze the full impact of its proposed
actions on consumers and the economy. It should not establish the 2016 and future mandates by
focusing primarily on increasing the production and use of renewable fuels. [EPA-HQ-OAR-
2015-0111-1947-A1 p. 4]
The proposed mandates for the near-term, 2014 and 2015, correctly and reasonably balance the
interests of consumers and the renewable fuel industry. However, going forward with the
mandates for 2016 and beyond, it is essential that EPA continue to employ a neutral balanced
approach. Ambitious future RFS mandates will only harm consumers and the economy. [EPA-
HQ-OAR-2015-0111-1947-A1 p. 9]
Indiana Farm Bureau
Renewable fuels have been a tremendous success story for the nation as a whole and have
especially been vital to the well-being of Hoosier farmers and their rural communities. For
example, there are currently 14 ethanol refiners producing 998 million gallons of ethanol in
Indiana, making it the 7th largest state for ethanol production. The ethanol industry contribution
to Indiana's gross state product last year was $934 million. [EPA-HQ-OAR-2015-0111-2486-A1
p.l]
In addition to jobs and taxes, the ethanol sector and its growth have been critical to Hoosier
farmers and local businesses. In 2012, 276 million bushels of corn grown in Indiana was dry
milled for use in ethanol production. That is 46% of all corn produced in Indiana, representing
tremendous opportunity for farm incomes that are typically reinvested in the local economy and
support local jobs because of the types of products and services purchase to reinvest in their
farms. [EPA-HQ-OAR-2015-0111-2486-A1 p.2]
While there have been many local benefits in Indiana due to a strong standard, there are many
national and global benefits resulting from the RFS2. The RFS2 has also reduced our country's
dependence on foreign crude oil, reduced air pollution, increased farm incomes and provided
good paying jobs in rural America. [EPA-HQ-OAR-2015-0111-2486-A1 p.2]
Another key concern of the Indiana Farm Bureau is what the future might hold. This proposal
would halt new investments in cellulosic biofuels and introduce detrimental ambiguity in a
market that is still developing. Indiana Farm Bureau strongly urges EPA to stay the course with
the RFS2 as defined in the 2007 EISA. Without question, this decision, if finalized, will have
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tremendous consequences for the agricultural sector, for our nation's energy policy and for the
intended regulatory framework and goals of the RFS2. The commitment to advanced biofuels is
critical in order to achieve the 36 billion gallon goal of renewable fuel sold in the marketplace by
2022. Indiana Farm Bureau remains optimistic that the advanced biofuel provisions can succeed
in diversifying the RFS2. From 2007 through the second quarter of 2011, over $2.4 billion was
invested in advanced biofuel companies by venture capitalists alone. It is important that these
investments from the private sector be fully implemented and that incentives for continued
research and development remain fully in place. Past R&D work in the sector has resulted in
increasing product yields with lower input costs. The goals set forth by the RFS2 have been and
remain an important catalyst for this type of cutting edge work; and it is important to the long-
term health of both the economy and the environment that this work continues. [EPA-HQ-OAR-
2015-01 ll-2486-Alp.2-3]
As a national leader, Indiana has invested heavily in monetary and human capital terms over the
past few years in this sector that is so vital to our economy, energy security, and environment. If
the proposed rule is allowed to be finalized as is, Indiana's ethanol industry and our farmers and
their communities will be dealt a major blow at a time when margins are very tight and the future
uncertain. [EPA-HQ-OAR-2015-0111-2486-A1 p.4]
Iowa Biodiesel Board (IBB) and Iowa Soybean Association (ISA)
The actions of the EPA also impact the federal ag budget and policy. If the 40,000 soybean
farmers in Iowa, including me, can realize higher soybean prices due to the increased demand of
feedstuffs and biodiesel, the USDA could save billions of dollars that would otherwise be paid
out in farm programs. Current soybean prices are below the cost of production for many farmers.
Without demand growth, many farmers will face tightening financial situations, stressing many
ag-related business and communities as well as the nation's farm safety net. If target volumes for
biodiesel are increased in the RFS, soybean prices could stabilize above break-even and save on
subsidies. [EPA-HQ-OAR-2015-0111-1942-A1 p. 2] [EPA-HQ-OAR-2015-0111-1043, p. 45]
Iowa Corn Growers Association (ICGA)
5. EPA proposed RVO reductions will have negative impacts. [EPA-HQ-OAR-2015-0111-
1820-A1 p. 5]
This proposal does not include analysis on the possible impacts of cutting the RFS on the
agricultural economy, gasoline prices, greenhouse gas (GHG) emissions, or investment in
infrastructure. If the rule is finalized as is, it could have very real and negative impacts. [EPA-
HQ-OAR-2015-0111-1820-A1 p. 5]
Iowa Farm Bureau Federation (IFBF)
Beyond the positives for agriculture, the RFS2 has been a broader success for the United State.
The expansion of the biofuels industry has improved air quality, reduced tailpipe emissions,
reduced prices at the pump, and has decreased U.S. dependence on the volatile foreign oil
market. Additionally, the RFS2 has benefited rural communities in Iowa and across the country.
Ethanol plants across Iowa are located in rural communities — providing much needed, good
paying jobs which are essential to revitalizing these rural economies. [EPA-HQ-OAR-2015-
0111-1717-A1 p. 2]
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Iowa Renewable Fuels Association
The last 18 months have seen a dramatic downturn in the health and outlook of rural America.
The Midwest went through an absolutely brutal economic period during the 1980s, commonly
referred to as "The Farm Crisis." Yet many people don't realize that while the Midwest economy
stabilized in the 1990s, it still was not good - it was just no longer getting worse. Most of the
Midwest missed out on the economic prosperity of the 1990s. In fact, it wasn't until about 2006
that the Midwest saw strong economic growth fueled by the resurgence of the rural/farm sector.
What makes the 2006 through 2013 rural economic revival even more remarkable is it occurred
during what many called "The Great Recession" for the rest of the country. [EPA-HQ-OAR-
2015-0111-1957-A2 p. 2]
But today, the future is much less bright in rural America, and the turning point can - with
certainty and exactness - be traced to the (leaked and then official) unveiling in late 2013 of the
proposed rule for 2014 RFS volume levels. Since that time, corn prices have plummeted below
the marginal cost of production,6 land values7 have fallen 15 percent,8 farm income is projected
to drop by 23 percent,9 agribusinesses10 have laid off workers11 by the thousands,12 biodiesel
plants have shut down,13 and tax revenue generated in Midwest states for both state and federal
governments has dropped.14 All in all, it's not a pretty picture, and it's one that could have been
easily avoided - and still can be avoided in the future with a restoration of the RFS levels as
enacted by Congress. [EPA-HQ-OAR-2015-0111-1957-A2 p. 2-3]
6 Plastina, Alejandro. "Estimated Costs of Crop Production in Iowa - 2015." Ag Decision Maker: Iowa State
University Extension. Jan 2015 http://www.extension.iastate.edu/agdm/crops/html/al-20.html
7 Aschbrenner, Joel. "Iowa farmland prices see biggest drop in 28 years." The Des Moines Register. 18 Dec 2014
http://www.desmoinesregister.com/storv/monev/agriculture/2014/12/18/iowa-farmland-prices-fall-iowa-state-
universitv/20611703/
8 Eller, Donnelle. "Iowa farmland values drop 15 percent over two years." The Des Moines Register. 31 Mar 2015
http://www.desmoinesregister.com/storv/monev/agriculture/2015/03/31/iowa-farmland-values/70725978/
9 U.S. Department of Agriculture. "Farm Business Net Cash Income Forecast to Decline in 2015." Economic
Research Service. 10 Feb 2015 http://www.ers.usda.gov/topics/farm-economv/farm-sector-income-finances/farm-
business-income.aspx
10 Ford, George. "Deere & Company laying off more than 550 in Waterloo." The Gazette. 23 Jan 2015
http://thegazette.com/subject/news/business/deere-companv-announces-lavoffs-more-than-550-coming-in-waterloo-
20150123
1: Patane, Matthew. "John Deere unlikely to be the last, economists say." The Des Moines Register. 23 Jan 2015
http://www.desmoinesregister.com/storv/monev/agriculture/2015/01/23/iohn-deere-iowa-lavoffs/22210349/.
12 Ford, George. "Kinze Manufacturing lays off 215." The Gazette. 24 Jun 2015
http://www.kcrg.com/subject/news^sinessMnze-manufacturing-lavs-off-215-20150624.
13 Barton, Thomas. "Biodiesel powers down." Dubuque Telegraph Herald. 15 Mar 2015
http://www.thonline.com/news/business/article C3e9f32f-f814-55f0-94fl-979cd2ed72ac.html
14 Tax revenue
Iowa Soybean Association
If EPAs proposed rule stands, consumers in Iowa and American will have limited choices at the
pump. We have proven in Iowa that when consumers have choices, they choose biofuels. Total
B100 (100% biodiesel) sales in Iowa have grown from 7.4 million gallons in 2010 to 33.3
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million gallons in 2014, with biodiesel blends accounting for nearly 10 percent of diesel sold.
Preventing choice, as the arguments of the oil companies encourage, raises fuel prices while
denying the public the air quality benefits of biofuels. Current market price for soybeans is close
to the cost of production, creating financial stress for our farmers. Increasing the target volumes
for biodiesel within the RFS would stabilize soybean prices above breakeven. [EPA-HQ-OAR-
2015-0111-3424 p.2]
Kansas Corn Growers Association
The RFS provides market access for ethanol to enter a fuel system that is largely dominated by
oil companies. In return, ethanol use is decreasing GHG emissions, decreasing our country's
dependence on foreign oil, providing domestic jobs and improving rural economies. These are
things EPA should support, not undermine. [EPA-HQ-OAR-2015-0111-3172-A1 p. 1]
Kansas Farm Bureau
Renewable fuels are a tremendous success story, not only for the nation but also for rural
communities. The RFS2 has reduced our country's dependence on foreign crude oil, reduced air
pollution, increased farm incomes and provided good paying jobs in rural America. Since the
RFS2 was put in place in 2007, the U.S. has seen tremendous growth within the agricultural
sector. If the Proposed Rule requirements are finalized, this decision will stall growth and
progress in renewable fuels as well as the broader agricultural economy. [EPA-HQ-OAR-2015-
0111-1195-A1 p.l]
Kansas Soybean Association
Biodiesel has contributed to increased domestic energy production while also delivering
significant greenhouse gas emissions reductions and creating jobs and boosting the farm and
rural economy. [EPA-HQ-OAR-2015-0111-2340 p.2]
Kentucky Beverage Association
The EPA recently proposed lowering the amount of ethanol in gasoline below limits set in the
law, but the proposal still artificially increases the prices of corn and other biofuel materials that
should be used in food products. The effect is increased prices for producers and consumers on
every day products. [EPA-HQ-OAR-2015-0111-2356 p.l]
American consumers are going to continue paying the cost for the impacts of the broken RFS.
According to the Congressional Budget Office's RFS report in June 2014, complying with higher
ethanol volume standards will cause ripple effects on taxpayer wallets through price premiums
and subsidies that would falsely encourage the sale of higher ethanol-blended fuel, such as E85.
EPA policies should not result in the mandate of more expensive, less efficient sources of energy
that increase the cost of everyday grocery items. As such, the EPA should lower the ethanol
levels in their final ruling to minimize the policy's financial burden on American consumers.
[EPA-HQ-OAR-2015-0111-2356 p.2]
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Little Sioux Corn Processors
When the RFS was passed in 2005 and its revision put into law in 2007, it was touted as a way to
energy independence and a path to reduce oil imports. We came under attack by our adversaries
and were accused of stealing food from babies. We were accused of raising the price of food to
consumers. All were proven false. Today we have corn prices delivered Iowa at 3.60 per bushel
or less. We have more corn worldwide than we need. I humbly submit corn prices do not fall or
go up because of ethanol. Prices move because the market determines the price, not the ethanol
industry or any other industry for that matter. [EPA-HQ-OAR-2015-0111-1664-A1]
The EPA has a decision to make on the RFS. It can side with the Oil industry and its
inherent 90% mandate by capping the required ethanol inclusion in our gasoline supply at 10%
or it can stand up for American jobs, farmers, and clean energy innovation. With this cap,
innovation and investment in our industry will die and the dramatic strides our industry has made
in efficiency will skid to a halt. There has been a tremendous amount of capital invested in
transportation services, technical expertise, and other support industries. Thousands of jobs are
at risk and the perceived level of certainty of the law is lost if the EPA continues its present
course. The law was designed to push the barrier. It was not designed to be comfortable for the
obligated party. It was designed to allow market access and give the obligated party a mechanism
to control their fate in the marketplace. Every gallon of ethanol produced in the United States has
a RIN attached to it. The REST is free, the marketplace creates a value for the RIN but blending
over the 10% level does not push RIN values higher, the market does and I humbly submit
doesn't make gas prices move higher. [EPA-HQ-OAR-2015-0111-1664-A1] [EPA-HQ-OAR-
2015-0111-1044 pp. 321-322]
MARC-IV Consulting
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 44.]
And our economic forecasting, our economic modeling actually details the fact that where you
set the D4 RVO does impact expenditures at the Federal level, and specifically, a higher level
would result in lower costs.
Mascoma LLC, Lallemand Inc.
We are at a crossroads and Lallemand and Mascoma's future investment in developing
technologies for second generation biofuels will end if this market cannot move forward. As it
stands, this proposal discourages us from investing further in the technologies needed to make
second generation biofuels a commercial reality. [EPA-HQ-OAR-2015-0111-0263-A 1
p.l] [EPA-HQ-OAR-2015-1044p. 295]
Mass Comment Campaign sponsored by anonymous 10 (email) - (297)
Drastic cuts, such as those that EPA proposed, will have a devastating impact on agriculture and
our rural economies, as well as investments in ethanol plants throughout the nation. By taking a
step backward, you are sending a signal that the government no longer supports the production of
biofuels. This uncertainty, coupled with a dramatic cut in what should be produced, puts the
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future of investment, growth and innovation of renewable fuels at risk. [EPA-HQ-OAR-2015-
0111-0213-A1 p.l]
With this flawed proposal, EPA is fundamentally changing how the RFS works by putting the
burden of fuel distribution on biofuel producers rather than branded oil, which controls more
than 50 percent of the convenience stores in this country through branding agreements and
ownership. [EPA-HQ-OAR-2015-0111-0213-Al p.l]
The bottom line is that this proposal will have a devastating ripple effect on investment in
ethanol plants, their production and the jobs they support, as well as the surrounding
communities. With less money, there is a smaller tax base - our schools, hospital and local
municipal services will suffer. During a time of economic uncertainty we need to capitalize on
opportunities, such as biofuel production, to spur investment and innovation that will keep
America and our rural economy strong. [EPA-HQ-OAR-2015-0111-0213-A1 p.2]
Mass Comment Campaign sponsored by anonymous 11 (email) - (695)
We must move forward, not backward, when it comes to developing alternatives to fossil fuels
and foreign oil. We all know that the RFS and biofuels have created jobs that cannot be
outsourced, which have helped revitalize rural America. [EPA-HQ-OAR-2015-0111-0214-A1
p.l]
Mass Comment Campaign sponsored by anonymous 12 (email) - (560)
Drastic cuts, such as those that EPA proposed, will have a devastating impact on agriculture and
our rural economies. By taking a step backward, you are sending a signal that the government no
longer supports the production of biofuels. This uncertainty, coupled with a dramatic cut in what
should be produced, puts my job and my fellow co-workers' jobs at risk. [EPA-HQ-OAR-2015-
0111-0215-A1 p.l]
With this flawed proposal, EPA is fundamentally changing how the RFS works by putting the
burden of fuel distribution on biofuel producers rather than branded oil, which controls more
than 50 percent of the convenience stores in this country through branding agreements and
ownership. [EPA-HQ-OAR-2015-0111-0215-Al p.l]
The bottom line is that this proposal will have a devastating ripple effect on ethanol plants, their
production and the jobs they support - as well as the surrounding communities. With less money,
there is a smaller tax base - our schools, hospital and local municipal services will suffer. [EPA-
HQ-OAR-2015-0111-0215-A1 p.l]
Mass Comment Campaign sponsored by anonymous 15 (email) - (2485)
Ethanol production accounts for nearly 400,000 American jobs, saves consumers money at the
pump and reduces our dangerous dependence on foreign oil. [EPA-HQ-OAR-2015-0111-0217-
Alp.l]
We must move forward, not backward, when it comes to developing alternatives to fossil fuels
and foreign oil. We all know that the RFS and biofuels have created jobs that cannot be
outsourced, which have helped revitalize rural America. Additionally, renewable fuels are better
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for the air we breathe and for our environment - and they are making a difference by decreasing
our dangerous dependence on foreign oil. Biofuels are better for our national security, energy
security and they benefit consumers like me by providing a choice and savings at the pump.
[EPA-HQ-OAR-2015-0111-0217-Alp.l]
After years of success from the RFS, we must not move backward. We must capitalize on the
current success and continue to invest in the future development and commercial scale
production of next generation biofuels. A rule such as this would halt any further innovation,
investment and growth in what is already a successful and thriving industry that supports
Americans. [EPA-HQ-OAR-2015-0111-0217-A1 p.2]
Mass Comment Campaign sponsored by anonymous 30 (email) - (26)
The RFS has improved the economic well-being of the nation.
• Ethanol production accounts for nearly 400,000 American jobs, saves consumers money
at the pump and reduces our dangerous dependence on foreign oil. [EPA-HQ-OAR-2015-
0111-2560-A1 p.l]
We must move forward, not backward, when it comes to developing alternatives to fossil fuels
and foreign oil. We all know that the RFS and biofuels have created jobs that cannot be
outsourced, which have helped revitalize rural America. Additionally, renewable fuels are better
for the air we breathe and for our environment — and they are making a difference by decreasing
our dangerous dependence on foreign oil. Biofuels are better for our national security, energy
security and they benefit consumers like me by providing a choice and savings at the pump.
[EPA-HQ-OAR-2015-0111-2560-Alp.l-2]
After years of success in expanding the ethanol industry because of the RFS, we must not move
backward. We must capitalize on the current momentum and continue to invest in the future
development and commercial scale production of next generation biofuels. A rule such as this
would slow any further innovation, investment and growth in a successful and thriving industry
that supports Americans. [EPA-HQ-OAR-2015-0111-2560-A1 p.2]
The RFS has made America stronger. We cannot afford to turn our backs on such a successful
policy. [EPA-HQ-OAR-2015-0111-2560-A1 p.2]
Supporting the RFS is critical for America and for the future of our nation. I would ask that you
return the RFS to a program based on supply of renewable fuel and ambitious goals to reduce our
dangerous dependence on foreign oil and not let the program be held captive by the oil industry
and its unwillingness to allow higher ethanol blends into the marketplace. [EPA-HQ-OAR-2015-
0111-2560-A1 p.2]
Mass Comment Campaign sponsored by anonymous 31 (paper) - (301)
We must move forward, not backward, when it comes to developing alternatives to fossil fuels
and foreign oil. We all know that the RFS and biofuels have created jobs that cannot be
outsourced, which have helped revitalize rural America. Additionally, renewable fuels are better
for the air we breathe and for our environment — and they are making a difference by decreasing
our dangerous dependence on foreign oil. Biofuels are better for our national security and energy
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security, and they benefit consumers by providing them with a choice and savings at the pump.
[EPA-HQ-OAR-2015-0111-2561-Alp.l]
The RFS has made America stronger. Our rural towns are thriving and our children are moving
back to where they were raised to carry on the legacy of the family farm. They are also finding
other great opportunities back home within this industry. We cannot afford to turn our backs on
such a successful policy by turning away from the congressionally established levels called for
by the RFS. [EPA-HQ-OAR-2015-0111-2561-A1 p.2]
Mass Comment Campaign sponsored by anonymous 33 (paper) - (164)
The RFS has improved the economic well-being of the nation. Ethanol production accounts for
nearly 400,000 American jobs, saves consumers money at the pump and reduces our dangerous
dependence on foreign oil. I have witnessed firsthand the positive impact it has had on my local
economy and how it stimulates investment from domestic and international sources. My
investments have helped my local community grow and thrive, showing the nation and the world
that rural America is booming and a leading area of innovation and investment in future energy
technologies. [EPA-HQ-OAR-2015-0111-2957-A1 p.l]
We must move forward, not backward, when it comes to developing alternatives to fossil fuels
and foreign oil. We all know that the RFS and biofuels have created jobs that cannot be
outsourced, which have helped revitalize rural America. Additionally, renewable fuels are better
for the air we breathe and for our environment — and they are making a difference by decreasing
our dangerous dependence on foreign oil. Biofuels are better for our national security, energy
security and they benefit consumers like me by providing a choice and savings at the pump.
[EPA-HQ-OAR-2015-0111-2957-A1 p.l]
After years of success from the RFS, we must not move backward. We must capitalize on the
momentum and continue to invest in the future development and commercial scale production of
next generation biofuels. A rule such as this would halt any further innovation, investment and
growth in what is already a successful and thriving industry that supports Americans. [EPA-HQ-
OAR-2015-0111-2957-A1 p.l]
Supporting the RFS is critical for America and for the future of our nation. I would ask that you
return the RFS to a program based on supply of renewable fuel and ambitious goals to reduce our
dangerous dependence on foreign oil and not let the program be held captive by the oil industry
and its unwillingness to allow higher ethanol blends into the marketplace. I thank you for your
consideration. [EPA-HQ-OAR-2015-0111-2957-A1 p.2]
Mass Comment Campaign sponsored by anonymous 9 (email) - (230)
Ethanol production accounts for nearly 400,000 American jobs, saves consumers money at the
pump and reduces our dangerous dependence on foreign oil. [EPA-HQ-OAR-2015-0111-0212-
Alp.l]
These drastic proposed cuts will almost certainly idle ethanol production and cause lost jobs in
many rural areas of the country - all to benefit some of the world's largest oil companies. [EPA-
HQ-OAR-2015-0111-0212-A1 p.l]
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Mass Comment Campaign sponsored by Corn, LP (web) - (37)
The RFS is working for the economy. In response to the RFS becoming law, the ethanol
industry invested billions of dollars in building production facilities, expanding infrastructure,
and improving technology. In addition, the RFS has spurred innovation, with four cellulosic
ethanol plants in production or currently under construction — three of which are located in
Iowa. [EPA-HQ-OAR-2015-0111-2047-A1 p.l]
The ethanol industry also supports jobs for more than 379,000 Americans, including 47,000 jobs
here in Iowa. Those jobs have allowed Iowa ethanol production to nearly double since 2007,
greatly benefiting the Iowa economy and sparking a rural renaissance. [EPA-HQ-OAR-2015-
0111-2047-A1 p.l]
Mass Comment Campaign sponsored by DENCO II. Absolute Energy. L.L.C. (paper) -
(633)
Drastic cuts, such as those that EPA proposed, will have a devastating impact on agriculture and
our rural economies, as well as investments in ethanol plants throughout the nation. By taking a
step backward, you are sending a signal that the government no longer supports the production of
biofuels. [EPA-HQ-OAR-2015-0111-0207-A1 p.l]
The ramifications for the industry and for the towns and communities that count on these
facilities to generate economic activity would be widespread and very damaging. When there is
uncertainty and increased risk, investments by nature dry up quickly, causing the renewable fuels
industry to fall well short of its potential. [EPA-HQ-OAR-2015-0111-0207-A1 p. 1]
The bottom line is that this proposal will have devastating ripple effect on investment in ethanol
plants, their production and the jobs they support, as well as the surrounding communities. With
less money, there is a smaller tax base— our schools, hospital and local municipal services will
suffer. During a time of economic uncertainty we need to capitalize on opportunities, such as
biofuel production, to spur investment and innovation that will keep America and our rural
economy strong. [EPA-HQ-OAR-2015-0111-0207-A1 p.2]
Mass Comment Campaign sponsored by employees of Western Dubuque Biodiesel (web) -
(1)
The RFS is working for the economy. In response to the RFS becoming law, the biodiesel
industry invested billions of dollars in building production facilities, expanding infrastructure,
and improving technology. The biodiesel industry also supports jobs for more than 62,000
Americans, including more than 7,000 jobs here in Iowa. Those jobs have allowed Iowa
biodiesel production to nearly triple since 2007, which has greatly benefited the Iowa economy
and sparked a rural renaissance. [EPA-HQ-OAR-2015-0111-1961-A1 p.l]
Mass Comment Campaign sponsored by Indiana Corn Growers Association and Indiana
Soybean Alliance (email) - (304)
The Renewable Fuel Standard is working. Every year it offsets millions of gallons of foreign oil
imports, keeping investment and jobs here at home and frequently in distressed rural
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communities. It provides consumer choice at the gas pump for those who want a cheaper,
cleaner-burning domestic fuel. [EPA-HQ-OAR-2015-0111-3387-A1 p.l]
Mass Comment Campaign sponsored by Little Sioux Corn Processors (web) - (44)
The RFS is working for the economy. In response to the RFS becoming law, the ethanol
industry invested billions of dollars in building production facilities, expanding infrastructure,
and improving technology. In addition, the RFS has spurred innovation, with four cellulosic
ethanol plants in production or currently under construction — three of which are located in
Iowa. [EPA-HQ-OAR-2015-0111-2045-A1 p.l]
The ethanol industry also supports jobs for more than 379,000 Americans, including 47,000 jobs
here in Iowa. Those jobs have allowed Iowa ethanol production to nearly double since 2007,
greatly benefiting the Iowa economy and sparking a rural renaissance. [EPA-HQ-OAR-2015-
0111-2045-A1 p.l]
Mass Comment Campaign sponsored by Minnesota Corn Growers Association - (784)
Since its implementation, the Renewable Fuel Standard (RFS) is working exactly as Congress
intended it to. Foreign oil imports are down and tailpipe emissions are reduced by cleaner-
burning ethanol. With the growth in El5 and other higher-ethanol blended fuels, consumers are
also starting to see more home grown and cleaner-burning choices at the pump. [EPA-HQ-OAR-
2015-0111-2570-A2 p.l]
The RFS has been one of the most successful and forward-thinking pieces of legislation passed
in the last 10 years. It's reduced our dependence on foreign oil, provided consumers with cleaner-
burning options at the pump and reinvigorated rural economies throughout the Midwest. [EPA-
HQ-OAR-2015-0111-2961-A1 p.l]
In other words, the RFS is working exactly as it was intended. There is no reason for EPA to
change it. [EPA-HQ-OAR-2015-0111-2961-A1 p.l]
Mass Comment Campaign sponsored by National Corn Growers Association (NCGA) -
(24,661)
The Renewable Fuels Standard (RFS) was one of the most successful energy policies ever
enacted in the U.S. The RFS has laid the foundation for the domestic biofuels industry, by
helping to generate jobs, revive rural economies, reduce oil imports, lower gasoline prices,
reduce air pollution and cut greenhouse gas emissions. [EPA-HQ-OAR-2015-0111-2564-A1 p.l]
Every year it offsets millions of gallons of foreign oil imports, keeping investment and jobs here
at home and providing consumer choice at the gas pump. [EPA-HQ-OAR-2015-0111-2565-A1
p.l]
Your decision to reduce corn ethanol levels HARMS BOTH THE RURAL ECONOMY AND
THE ENVIRONMENT which it is your mission to protect. [EPA-HQ-OAR-2015-0111-2566-A1
p.l]
Your decision harms both the environment and rural economy. [EPA-HQ-OAR-2015-0111-
3291-Alp.l]
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The RFS is doing exactly what is was intended to do. It is successfully driving adoption of
renewable fuel alternatives to petroleum, supporting jobs across the country, ensuring the United
States remains a global leader in developing new renewable energy sources while decreasing
GHG emissions here at home. [EPA-HQ-OAR-2015-0111-3476-A1 p.l]
The continued health of the rural economy and the nation's environmental improvements hinge
upon this decision. [EPA-HQ-OAR-2015-0111-3476-A1 p.l]
Mass Comment Campaign sponsored by Nebraska Corn Board (paper) - (1856)
The continued health of the rural economy and the nation's environmental improvements hinge
upon this decision. [EPA-HQ-OAR-2015-0111-3388-A1 p.l]
The RFS has laid the foundation for the domestic biofuels industry, by helping to generate jobs,
revive rural economies, reduce oil imports, lower gasoline prices, reduce air pollution and cut
greenhouse gas emissions. [EPA-HQ-OAR-2015-0111-3388-A1 p.2]
Mass Comment Campaign sponsored by POET (email) - (661)
The EPAs proposed cuts could lead to higher prices you pay at the pump, increased dependence
on foreign oil, higher greenhouse gas emissions and lost opportunities for family farms. [EPA-
HQ-OAR-2015-0111-2772-A2 p.l]
Mass Comment Campaign sponsored by POET Bio-refining 1 (paper) - (692)
Bio Fuels have given us cleaner air. Has given corn farmers a better market. The extra income
has helped with our family's needs. Please give us your support! [EPA-HQ-OAR-2015-0111-
2963-Al,p.l]
The ethanol use has impacted domestic corn prices, created jobs, cleaner fuel, impacted farm
income. [EPA-HQ-OAR-2015-0111-2963-A1, p.4]
The EPA's proposed cuts could lead to higher prices you pay at the pump, increased dependence
on foreign oil, higher greenhouse gas emissions, and lost opportunities for family farms. [EPA-
HQ-OAR-2015-0111-2963-A1, p.7]
Support of Biofuels is vitally important for our localized economy as well as our National
Security. Being responsible for nearly 852,000 American jobs, biofuels contribute more than
$40 billion to our nation's GDP yearly. These dollars stay in our American economy and thanks
to the multiplier effect really add value to our economy. In addition we don't have to spend
billions early in order to assure the free flow of oil. Biofuels are used across the globe and are
working well to help reduce oil consumption the benefits of this will surely be a positive for our
globe. Please support the RFS as it currently stands and reject the EPA's flawed proposal (RVO
proposal). [EPA-HQ-OAR-2015-0111-2963-A1, p.9]
For rural America, American energy independence, cleaner air, higher octane, slowing climate
change, and to promote real consumer fuel choice with higher ethanol blends - the EPA needs to
force oil companies to comply with the intent and letter of the law as written. [EPA-HQ-OAR-
2015-01 ll-2963-Al,p.lO]
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Mass Comment Campaign sponsored by Quad County Corn (web) - (37)
The RFS is working for the economy. In response to the RFS becoming law, the ethanol
industry invested billions of dollars in building production facilities, expanding infrastructure,
and improving technology. In addition, the RFS has spurred innovation, with four cellulosic
ethanol plants in production or currently under construction — three of which are located in
Iowa. [EPA-HQ-OAR-2015-0111-2046-A1 p.l]
The ethanol industry also supports jobs for more than 379,000 Americans, including 47,000 jobs
here in Iowa. Those jobs have allowed Iowa ethanol production to nearly double since 2007,
greatly benefiting the Iowa economy and sparking a rural renaissance. [EPA-HQ-OAR-2015-
0111-2046-A1 p.l]
Mass Comment Campaign submitted by employees of Siouxland Energy Cooperative (web)
-(30)
The RFS is working for the economy. In response to the RFS becoming law, the ethanol
industry invested billions of dollars in building production facilities, expanding infrastructure,
and improving technology. In addition, the RFS has spurred innovation with four cellulosic
ethanol plants in production or currently under construction — three of which are located in
Iowa. [EPA-HQ-OAR-2015-0111-1960-A1 p.l]
The ethanol industry also supports jobs for more than 379,000 Americans, including 47,000 jobs
here in Iowa. Those jobs have allowed Iowa ethanol production to nearly double since 2007,
greatly benefiting the Iowa economy and sparking a rural renaissance. [EPA-HQ-OAR-2015-
0111-1960-A1 p.l]
Mass Comment Campaign submitted by investors in Golden Grain Energy LLC. (paper) -
(327)
The drastic cuts proposed will have a devastating effect on agriculture, rural economies and
perhaps more importantly, investment in further development of renewable energy. [EPA-HQ-
OAR-2015-0111-2559-A1 p.l]
The ramifications for the industry and communities that count on these facilities would be
widespread. [EPA-HQ-OAR-2015-0111-2559-A1 p.l]
Minnesota Corn Growers Association (MCGA)
Thanks to the RFS, the United States is relying less on foreign oil than ever before. [EPA-HQ-
OAR-2015-0111-1920-A1, p.l]
As you can see, a reduction in the RVO numbers would make an impact far beyond our fuel
tanks. It would also result in job losses, reduced air quality and fewer rural economic
development opportunities. There are already enough barriers and obstacles to ethanol in this
country. By cutting the RFS, EPA is creating yet another one. [EPA-HQ-OAR-2015-0111-1920-
Al,p.2]
In summary, lower RVO numbers are bad for drivers, bad for farmers and bad for all Americans.
We're already producing enough ethanol to smash through the fictional oil industry blend wall,
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and could be producing more if some ill-advised regulations and other obstacles were removed.
[EPA-HQ-OAR-2015-0111-1920-Al,p.2]
Americans want cleaner-burning and more affordable choices at the pump. Corn farmers have
proven that they're capable of growing enough corn to produce food, feed, fiber and fuel. Now is
not the time to take America's energy policy backward. Now is the time for EPA to preserve the
RFS and keep American energy policy headed in the right direction. [EPA-HQ-OAR-2015-0111-
1920-A1, p.2]
Minnesota Farm Bureau
This proposed rule, if finalized, will have tremendous consequences for the agriculture sector, for
our nation's energy policy, and for the intended regulatory framework and goals of the RFS2.
[EPA-HQ-OAR-2015-0111-2263-A1 p. 2]
Minnesota Farmers Union (MFU)
MFU has been a longtime supporter of biofuels believes that the RFS is important not just to the
profitability of Minnesota's farm families, but also an important part of national security and
crucial part of improving the environment and addressing climate issues. [EPA-HQ-OAR-2015-
0111-1311-A1 p. 1]
MFU is disappointed with the volume standards issued in EPA's proposed rule for RFS target
levels. MFU feels strongly we must move forward, not backward, when it comes to developing
alternatives to fossil fuels and foreign oil. MFU is proud that the RFS and biofuels have created
jobs that cannot be outsourced, which have helped revitalize rural America. Additionally,
renewable fuels are better for the air we breathe and for our environment - and they are making a
difference by decreasing our dangerous dependence on foreign oil. Biofuels are better for our
national security and energy security, and they benefit consumers by providing them with a
choice and savings at the pump. [EPA-HQ-OAR-2015-0111-1311-A1 p. 1]
Supporting the RFS is critical for America and for the future of our energy and agriculture
sectors. MFU asks that this administration return the RFS to a program based on supply of
renewable fuel and ambitious goals to reduce our dangerous dependence on foreign oil and not
let the program be held captive by the oil industry and its unwillingness to allow higher ethanol
blends into the marketplace. [EPA-HQ-OAR-2015-Oil 1-1311-A1 p. 1]
Minnesota State Senate
The impact the RFS has had on ethanol plants and the area of Morris, MN cannot be overstated.
Since its original enactment in 2005,1 have witnessed firsthand the positive impact it has had on
my local economy. There is no question it has revitalized the area. I am proud to serve as a
senator in West Central Minnesota with communities that further America's national and energy
security goals. Renewable fuel production saves consumers money at the pump, reduces our
dangerous dependence on foreign oil and improves the quality of the air we all breathe, all while
creating many good paying jobs in these communities that cannot be outsourced. The RFS has
helped these communities grow and thrive — showing the nation and the world that rural
America is booming and a leading area of innovation and investment in future energy
technologies. [EPA-HQ-OAR-2015-0111-3284-A1 p.l]
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Drastic cuts, such as the one that EPA proposed, will have a devastating impact on agriculture
and our rural economies, as well as investments in ethanol plants throughout the nation. By
taking a step backward, you are sending a signal that the government no longer supports the
production of biofuels. This uncertainty, coupled with a dramatic cut in what should be
produced, puts the future of investment, growth and innovation of renewable fuels at risk know,
with such uncertainty surrounding the RFS, investors and stakeholders will likely scale back, if
not completely withdraw their investments. [EPA-HQ-OAR-2015-0111-3284-A1 p. 1-2]
The ramifications for the industry and for the towns and communities that count on these
facilities to generate economic activity would be widespread and very damaging. When there is
uncertainty and increased risk, investments dry up quickly, causing the renewable fuels industry
to fall well short of its potential. [EPA-HQ-OAR-2015-0111-3284-A1 p.2]
The bottom line is that this proposal will have a devastating ripple effect on investment in
ethanol plants, their production and the jobs they support, as well as the surrounding
communities. With less money, there is a smaller tax base — our schools, hospital and local
municipal services will suffer. During a time of economic uncertainty, we need to capitalize on
opportunities, such as biofuel production, to spur investment and innovation that will keep
America and our rural economy strong. [EPA-HQ-OAR-2015-0111-3284-A1 p.2]
As a local elected official, the prosperity and well-being of my community is my top priority and
I am deeply concerned that if this proposed rule were to take effect, the entire community and
surrounding towns would suffer. Farmers would lose money, agri-business would be negatively
impacted, jobs would be lost and our community would face serious economic challenges. It is
part of my responsibility to serve and foster opportunities, economic growth and innovation. This
rule would do just the opposite. [EPA-HQ-OAR-2015-0111-3284-A1 p.2]
As you move forward in developing a final rule, I hope you will consider the impact such a rule
will have on the farmers, investors and workers who count on their jobs at ethanol production
facilities around the country. I would also ask that you return the RFS to a program based on
supply of renewable fuel and ambitious goals to reduce our dangerous dependence on foreign oil
and not let the program be held captive by the oil industry and its unwillingness to allow higher
ethanol blends into the marketplace. [EPA-HQ-OAR-2015-0111-3284-A1 p.2-3]
Missouri Farm Bureau (MFB)
We support an "all of the above" approach to U.S. energy policy—one that drives domestic
energy production in order to further reduce our dependence on unstable foreign sources,
diversify our energy portfolio and enhance national security. Ample and affordable energy
supplies are critical to the agriculture sector since farming/ranching requires substantial amounts
of gasoline, diesel, electricity, natural gas, propane, fertilizer and other inputs. Until recent years,
farmers and ranchers have not had a direct role in energy production. That changed with ethanol
and biodiesel. [EPA-HQ-OAR-2015-0111-1824-A1 p. 1]
Monsanto
The RFS is successfully driving the adoption of renewable fuel alternatives, supporting jobs
across the country, and ensuring the U.S. remains a global leader in developing new renewable
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energy sources while decreasing greenhouse gas emissions. [EPA-HQ-OAR-2015-0111-1945-
Alp.l]
N. Bowdish Company
I implore you to reconsider raising these renewable volume obligations. A decision to do so will
drive the installation of biofuel dispensing infrastructure and increase renewable fuel
consumption which both of us have just worked together on to show more than a 20% reduction
in GHGs compared to the status quo, gasoline. [EPA-HQ-OAR-2015-0111-1202-Al p.3]
National Biodiesel Board
The limited avenues that Congress provided for obligated parties to avoid the mandated volumes
indicate that Congress did not intend to provide maximum flexibility to obligated parties or to
reduce their costs. Although EPA established a RIN system that could also be used for purposes
of the credit program provided under the statute, the credit program was intended to incentivize
those obligated parties that go beyond the mandated requirements. EPA's proposal does not
create the incentives to go beyond any obligated party's individual requirements, but allows the
obligated parties to perpetuate the status quo and not make any advancements in renewable fuel
production at all. The incentives to take action are tied to compliance costs, and EPA cannot now
contend that it must work to keep those costs down rather than promote production of renewable
fuels. See Monroe Energy, LLC v. EPA, 750 F.3d 909, 919 (D.C. Cir. 2014). EPA, therefore,
must err on the side of over-estimating to ensure volumes sought by Congress are met to the
extent possible (not practical). EPA is not to have the industry toe the line, but to continue to
push the line forward. Thus, EPA must give the market the chance to work as Congress intended.
Waiver authority can be used later if there is truly inadequate supply. [EPA-HQ-OAR-2015-
0111-1953-A2p.l2]
National Corn-to-Ethanol Research Center (NCERC)
NCERC is Staunchly Opposed to the Proposed Levels of RVO's The NCERC is staunchly
opposed to the proposed levels of RVO's. This proposal has already created uncertainty in the
marketplace, resulting in millions of dollars of biofuels contractual research projects to be
postponed. If the proposed levels are finalized, the result will be financially devastating to many
sectors of the U.S. economy. Why? Because with this level of RVO's, investment in research,
development and commercialization won't be postponed or slowed down, it will stop. [EPA-HQ-
OAR-2015-0111-1225-A2p. 2] [EPA-HQ-OAR-2015-0111-1044 pp. 58-59]
National Restaurant Association
The National Restaurant Association looks forward to working together to prevent these effects
by reforming the Renewable Fuel Standard in a way that will benefit consumers, businesses, and
the overall economy. [EPA-HQ-OAR-2015-0111-2267-A1 p. 4]
National Taxpayers Union (NTU)
Higher prices at the pump are only one of many worries for consumers caused by the RFS.
Greater transportation costs flow throughout the economy, raising the price of food and other
goods that travel long distances. [EPA-HQ-OAR-2015-0111-3279-A1 p.2]
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These compounding costs effectively constitute a type of "hidden tax" that pervades the
economy and hurts consumers whose budgets are already stretched thin due to rising health care
costs, stagnant wages, and an anemic economic recovery. [EPA-HQ-OAR-2015-0111-3279-A1
p.2]
The widespread damage imposed by the RFS is an urgent reminder that government mandates
make for bad economic policy. In a functioning marketplace for fuel, renewable or otherwise the
ill effects described above would be quickly mitigated as a sustainable price equilibrium is
reached between consumers and producers. An intractable government mandate is an obstacle to
ever attaining such a balance. [EPA-HQ-OAR-2015-0111-3279-A1 p.2]
Nebraska Unicameral Legislature
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 110-112, 115.]
The support from Congress and the President gave great incentive and especially certainty for
rural economic development to happen that now includes 24 ethanol plants across Nebraska and
over 100 across the U.S. And with any successful economic development program, you don't
withdraw support midway through the program. But if you finalize the 2015 and 2016 RVOs as
proposed, this is exactly what you're doing and thus showing a lack of incentive for rural
economic development and job creation, and you're slashing certainty for the current and the
next generation of biofuels.
As you propose, reducing the RFS numbers from what Congress passed will only hurt Nebraska
and every agricultural State in the nation. Jobs will be lost. Rural communities will struggle, and
State revenues will shrink. And consumers will lose choices, and the environment will lose an
ally.
In conclusion, the ethanol industry has provided great opportunities — opportunities for the next
generation of family farmers, opportunities for rural America, and opportunities for our
environment. Now we just need you, the EPA, to step up and continue to provide opportunities
for consumers and increase choices at the fuel pump.
NH Energy Forum
As a New Hampshire State Representative who focuses on issues regarding the elderly
community, I am writing to voice concern about increasing levels of ethanol content in the
proposed Renewable Fuel Standard (RFS) for 2014, 2015 and 2016. The proposed standards are
flawed, as they recommend an increasing amount of ethanol to be blended into fuels such as El 5
and E85, for which there is no significant consumer demand, and which could cause economic
hardship to American consumers through potential engine damage and higher food costs. [EPA-
HQ-OAR-2015-0111-0281-A1 p.l]
As a state representative from New Hampshire, college student and future workforce member, I
am writing to voice concern about increasing levels of ethanol content in the proposed
Renewable Fuel Standard (RFS) for 2014, 2015 and 2016. This could result in higher costs for
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young adults and new college graduates from potential engine damage and higher food prices-
costs that many would have great difficulty bearing in today's economy. [EPA-HQ-OAR-2015-
0111-0282-A1 p.l]
If the EPA sets the final ethanol mandate to no more than 9.7 percent of gasoline demand, then
with would allow renewable fuels to still be used, without causing the potential undue economic
hardship to those who are struggling to make ends meet or to new members of the workforce.
[EPA-HQ-OAR-2015-0111-0282-A1 p.l]
North Dakota Ethanol Council
With this type of proposal, the administration is quitting on the 15-year certainty of the RFS,
jeopardizing rural jobs and economies, risking billion dollars of investment in the next
generation of biofuels, and increasing our dependence on foreign oil. [EPA-HQ-OAR-2015-
0111-1927-A1 p. 1]
North Dakota's ethanol industry and our state have invested millions of dollars to keep plants
running in poor economic conditions only to have the certainty of the RFS removed. A reduction
in volume obligations will have severe economic consequences for North Dakota's ethanol and
corn industries, which currently are significant contributors to the state's top two industries -
agriculture and energy. [EPA-HQ-OAR-2015-0111-1927-A1 p. 1]
North Dakota Farmers Union (NDFU)
When setting standards for the RFS, the goals for the program and the program's importance to
one our nation's most vital industries must be considered. The program: [EPA-HQ-OAR-2015-
0111-1916-A1 p. 1]
• Carries significant economic benefits. Not only does the program decrease US reliance
on foreign oil, but the potential for renewable fuels to reduce Greenhouse Gas (GHG)
emissions is significant. This would beneficial for the United State financially, while
giving consumers a choice at the pump. [EPA-HQ-OAR-2015-0111-1916-A1 p. 1]
North Dakota Grain Growers Association
We must move forward, not backward, when it comes to developing alternatives to fossil fuels
and foreign oil. We all know that the RFS and biofuels have created jobs that cannot be
outsourced, which have helped revitalize rural America. Additionally, renewable fuels are better
for the air we breathe and for our environment - and they are making a difference by decreasing
our dangerous dependence on foreign oil. Biofuels are better for our national security and energy
security, and they benefit consumers by providing them with a choice and savings at the pump.
[EPA-HQ-OAR-2015-0111-1656-Alp.l]
After years of success in expanding the ethanol industry because of the RFS, we must not move
backward. We must capitalize on the current momentum and continue to invest in the future
development and commercial scale production of next generation biofuels. The EPA's proposed
reduction in corn-based ethanol volumes will slow any further innovation, investment and
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growth in a successful and thriving industry that supports farmers, plant workers, and entire rural
communities. [EPA-HQ-OAR-2015-0111-1656-A1 p.2]
The RFS has made America stronger. Our rural towns are thriving and our children are moving
back to where they were raised to carry on the legacy of the family farm. They are also finding
other great opportunities back home within this industry. We cannot afford to turn our backs on
such a successful policy by turning away from the congressionally established levels called for
by the RFS. [EPA-HQ-OAR-2015-0111-1656-A1 p.2]
Northern Canola Growers Association
Consistent with the intent of the RFS, canola biodiesel provides significant benefits to our
national energy security, the environment, and the economy. Canola biodiesel is a domestically
produced renewable fuel that displaces petroleum, reduces emissions and improves air quality,
and provides jobs and additional economic benefits, especially in rural communities. [EPA-HQ-
OAR-2015-0111-2036-A1 p.l]
NUVUFuels, LLC and DENCO II
The RFS was always intended to incentive American investment to create cleaner and renewable
fuels sources made right here at home with American jobs while reducing our dependence on
dirty and dangerous foreign oil. These investments have and are happening right now at a time
when America needs it most. [EPA-HQ-OAR-2015-0111-2631-A1 p.l]
Ohio Corn & Wheat Growers Association
The RFS has been a tremendous success and has met all it was set out to do. It has helped to
significantly reduce air pollution and greenhouse gases, improve human health, and reduce our
dependence on foreign oil, all while saving consumers billions of dollars each year. [EPA-HQ-
OAR-2015-0111-1723-A1 p.2]
Renew Kansas
The RFS has played an integral role in the diversification of our nation's fuel portfolio, and has
played a crucial role in cleaning our air, creating jobs, and reducing our dependence on foreign
oil. Since 2005, the RFS has helped reduce our nation's dependence on foreign oil by more than
50 percent. Failing to implement the volume obligations, as required, would set back our efforts
to reduce our dependence on foreign oil; harm the economy around the renewable fuels market;
and hinder our efforts to decrease greenhouse gas emission levels. [EPA-HQ-OAR-2015-0111-
1309-A1 p.3]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1143, pp. 140-141.]
In fact, the proposed rule would create more uncertainty in the alternative fuels market with the
negative effect of freezing future investments into the market. Clearly, not a goal of either
Congress or the EPA. It's an unintended consequence. Alternatively, the full RFS, as established
by Congress within the Clean Air Act, will allow industry to break through the current blend
wall through continued investment in the new technologies and infrastructure. Higher-blend
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ethanol fuels are both legal and viable options today in which to break through the blend wall
and should be promoted through the RFS, not hampered. We all know, as is commonly known,
the RFS is America's most successful energy policy within the last 40 years. It has helped to
enhance our national security, diversify our fuel supply, protected our environment by reducing
our carbon footprint, increased demand for farm products across the Midwest, reduced cost for
consumers at the pump, created jobs around the country, and helped to reduce our nation's
dependence on foreign oil by more than 50 percent since 2005. Clearly, a success.
South Dakota Corn Growers Association
The Renewable Fuel Standard (RFS) has been a tremendous success throughout South Dakota
and is working exactly as intended. The program has played a pivotal role in reducing petroleum
imports to the lowest level since the 1980s, lowering gas prices, improving air quality, and
strengthening the economy in rural America in ways never seen before. [EPA-HQ-OAR-2015-
0111-1811-A1 p.l]
In closing, we strongly encourage your agency to carefully consider and calculate the potential
negative economic and environmental harm that this proposal would indeed provoke across the
country. [EPA-HQ-OAR-2015-0111-1811-A1 p.2]
South Dakota Farmers Union
The RFS has been a gateway for renewable fuels to the market, giving consumers a USA made
cleaner fuel option. The RFS has been helping pave the way for energy independence. Ethanol
blended gasoline gives consumers options for more affordable fuel. [EPA-HQ-OAR-2015-0111-
2358-A1 p. 1]
South Dakota Soybean Association
While the current proposal is a step in the right direction, it doesn't fully expand or grow the
biodiesel industry. The biodiesel industry is America's only commercially available advanced
biofuel in the marketplace, providing significant greenhouse gas emission reductions and over
60,000 jobs. In addition, biodiesel diversifies our energy sector and reduces our country's
dependence on foreign oil. These benefits are the reason we need continued support and growth
through the RFS. [EPA-HQ-OAR-2015-0111-1308-A1 p. 2]
Union of Concerned Scientists
While EPA clearly has authority to make such an enlargement, it is important that the exercise of
this authority is made with consideration of all the goals and criteria set forth in section 211
(o)(2)(B)(ii) of the Clean Air Act, which include the impact on climate change, ecosystems,
wildlife habitats, infrastructure, the price and supply of agricultural commodities and food prices.
[EPA-HQ-OAR-2015-0111-2260-A1 p.4]
United States Senate
The proposed RVOs will negatively impact the agricultural and biofuels industries, consumer
choice at the pump, and future investments in 2nd generation renewable fuels and infrastructure.
[EPA-HQ-OAR-2015-0111-3427 p.2]
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Vets for Energy
I support policies, which provide a rational approach to developing all energy sources in an
environmentally safe manner, which boosts economic growth and secures our nation. An
economically 'strong America allows us to maintain our global leadership and protect our
interests here at home and around the world. [EPA-HQ-OAR-2015-0111-2473-Al, p. 1]
Wisconsin BioFuels Association
The proposed RVO also completely ignores the growing demand for renewable fuels and its
many benefits. This hurts not only ethanol producers and corn growers, but also the consumer.
The proposed RVO would raise fuel prices and greatly limit consumer choice. Nothing could
make the petroleum industry happier. [EPA-HQ-OAR-2015-0111-2539-A2 p.l]
Over the past 10 years, the Renewable Fuel Standard has lowered gas prices, reduced our
dependence on foreign oil, and reduced the pollution in our air and water. It has allowed drivers
to choose cleaner, less expensive, American-grown biofuels. [EPA-HQ-OAR-2015-0111-2539-
A2p.l]
Wisconsin Corn Growers Association (WCGA)
Not only has EPA circumvented the law, it has totally ignored the growing demand and benefit
of renewable fuels. This will hurt our corn growers who have been doing their job to produce
corn for ethanol to meet the market for clean burning fuel, and it will hurt consumers with higher
fuel prices and limited clean fuel options. [EPA-HQ-OAR-2015-0111-1830]
The Renewable Fuel Standard is working as intended. The RFS has reduced greenhouse gas
emissions, decreased our reliance on foreign oil, lowered gasoline prices for consumers and
increased economic stability in rural America.[EPA-HQ-OAR-2015-0111-1830]
Wisconsin Farm Bureau Federation
Since the Renewable Fuels Standard was expanded, we have seen tremendous growth within the
agricultural sector and a decrease in crude oil imports. The decision by EPA to reduce blending
levels for all renewable fuels sends a negative signal to the ethanol and biofuel industries, their
investors and American consumers. This is a huge step backward for America's movement
toward energy independence. In addition, EPA has circumvented the law and it has completely
ignored the growing demand and benefit of renewable fuels. [EPA-HQ-OAR-2015-0111-1716-
Al p. 2]
This will hurt our corn growers, ethanol producers and researchers at our universities who are
working to develop new biofuel technologies. They have all been doing their jobs to produce
renewable fuels for a market that continues to grow in demand and popularity amongst
consumers who want clean burning, renewable fuel. This proposal will send the biofuel industry
backwards and will hurt consumers with higher fuel prices and limited clean fuel options. [EPA-
HQ-OAR-2015-0111-1716-A1 p. 2]
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Response:
EPA received a number of comments related to various economic impacts this rule will produce,
both positive and negative. Many of these comments are also considered in other sections
referring to specific impacts including 7.2 Agricultural Impacts, 7.3 Fuels Industry Impacts, 7.4
Impact on RINs, 7.5 Retail Fuel Prices, 7.6 Energy Security, 7.7 Impact on Jobs and Local/State
Economies and 7.8 Cost to Consumers.
We received numerous comments that broadly asserted positive economic impacts from greater
RFS mandates (or adverse economic impacts from the decrease in RFS mandates from the
statutory levels). Many of the comments EPA received communicating this theme were by
business communities or individuals in the Midwestern portion of the United States who are
either directly involved in, or linked to, the biofuel economy (e.g., farmers/farming associations,
biofuel producers). These comments speak to the job creation and stimulating economic effect
of corn ethanol, soy biodiesel, and the RFS as a whole on rural economies and the U.S. economy
at large. These comments generally did not acknowledge the fact that the proposed RFS
standards continued to increase renewable fuel volumes and instead inappropriately treated
reductions from the statutory volumes as if they were reductions from existing volumes, decrying
a wide range of devastating and chilling impacts. Since we do not consider the statutory
volumes attainable (and indeed we are setting the total renewable fuel standard at the maximum
reasonably achievable level), we do not believe it is appropriate to attribute any shortfall in jobs
or investment associated with levels of renewable fuel production below the statutory volumes to
EPA's decisions. Rather the significantly increased RFS volumes in the final rule, especially for
2016, will continue to provide the job creation and economic development benefits to rural
economies that these commenters seek.
EPA believes that policy clarity is important for fostering economic certainty and thus a
favorable environment for securing investment and financing for renewable fuels industries. We
believe that this rule sends a clear signal that the EPA supports the continued growth of
renewable fuels under the RFS. Additionally, we acknowledge the potential detrimental effect
that not setting RVOs on the regular, pre-established schedule can have on planning for
stakeholders. EPA is committed to finalizing annual RVOs on schedule moving forward to
further enhance certainty. Also, EPA continues to analyze and approve new qualifying pathways
under the RFS to provide opportunities for the production of clean, diverse renewable fuels from
an increasing number of feedstocks and technologies.
We also received a variety of comments that broadly asserted adverse economic impacts from
greater RFS mandates (or positive economic impacts from a decrease in RFS mandates). These
commenters highlighted the negative economic and environmental impacts of raising the RFS
volumes relative to prior year levels and/or the E10 blendwall. As described in other sections,
increasing renewable fuel production from traditional feedstocks (e.g., corn, soybeans, canola)
can benefit some sectors of the economy while having adverse impacts on other sectors. While
we have not quantified these impacts, based on our analysis in the March 2010 final rule, we
expect that the overall impact would likely be modest. Also, as noted in the final rule, we believe
that there are reasonable measures that are and can continue to be taken to expand use of ethanol
to levels beyond the level represented by the E10 blendwall and to expand the use of non-ethanol
renewable fuels as well. We believe the economic impacts that result from this rule in the
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various parts of the economy, both positive and negative, are reasonable, appropriate, and
consistent with what was anticipated by Congress in the implementation of the RFS program.
A number of commenters expressed concern over the fact that EPA did not perform a full
incremental cost-benefit analysis for the annual renewable fuel volumes. One stakeholder
commented that EPA should provide a "complete assessment of the rule's costs on obligated
parties, consumers, and other affected parties, along with a comparison of those costs with the
rule's benefits." Another commenter stated that "EPA's Proposed Rule is arbitrary and
capricious because it does not include an adequate assessment of the rule's expected costs and
benefits." EPA included an illustrative cost analysis in both the proposed and final rules, and has
explained throughout the rule the benefits of renewable fuels, particularly with respect to energy
security and the GHG emissions reductions associated with their use. We also explained the
difficulties with providing more precise quantitative cost-benefit estimates, which includes both
time constraints and conceptual issues such as determining the baseline and how the market will
respond.
We note that in exercising the general waiver authority with respect to total renewable fuel our
objective is to determine if there is an inadequate domestic supply and, if there is, to then
consider exercising our discretion to lower the statutory volume targets to alleviate the
inadequate supply situation. Congress has identified the circumstance justifying a waiver, which
means that Congress has determined that the benefits of the program warrant use of the volumes
set forth in the statute except to the extent that the specific circumstances described in
21 l(o)(7)(A) or in other waiver provisions are found to exist. We believe our mandate under the
inadequate domestic supply prong of the general waiver authority is to determine the maximum
reasonably achievable volumes of renewable fuel that can be supplied to consumers as
transportation fuel. We have considered comments and assessed scenarios related to the
determination of the maximum reasonably achievable volumes, but we do not believe that a
complete quantitative cost-benefit analysis as requested by the commenters is necessary for EPA
to either determine if an inadequate domestic supply exists or to identify the appropriate
corrective measure. As noted above and elsewhere, a quantitative cost benefit analysis would be
very large in scope and time consuming, resulting in delay of EPA rulemaking, which many
commenters (including some requesting a cost benefit analysis) have stressed is injurious to the
success of the program, and the conceptual issues suggest that the probative value of such an
analysis would be limited. We believe that we have gathered sufficient information to exercise
the waiver authority to set volume requirements at reasonably achievable levels.
We are also exercising our cellulosic waiver authority to lower the advanced and total standards
in the final rule. For the cellulosic waiver authority, the statute does not specify any criteria that
EPA must identify, or factors that EPA must consider, but provides broad discretion for EPA to
lower volumes of advanced and total renewable fuel by the same or a lesser amount than the
reduction in cellulosic biofuel. For the total standard, our action in using the cellulosic authority
is justified by a finding of insufficient volumes upon an assessment of the volumes that can be
produced, imported, distributed and used as required by the statute.
In setting the advanced biofuel standard, we have identified the GHG benefits associated with
the use of advanced biofuels as the primary basis for requiring the use of reasonably attainable
volumes. Although we have received comments noting cost concerns, we do not believe such
concerns warrant a further waiver of advanced biofuel volumes (below reasonably attainable
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levels) for the following reasons. First, the advanced standard is nested within the total
renewable fuel standard. We are using the inadequate domestic supply prong of the general
waiver authority to reduce volumes for total renewable fuel below the level that is possible using
the cellulosic waiver authority, and are only authorized to do so to the extent we determine that
there is an inadequate domestic supply of renewable fuel, including advanced biofuel. We have
considered the availability of advanced biofuel in deriving the total renewable fuel standard, and
believe that for the most part the same volume of advanced biofuel will be used to comply with
the total renewable fuel standard regardless of the precise point at which we set the advanced
biofuel standard.
Second, we acknowledge, however, the possibility that a lower advanced biofuel standard might
allow for greater use of non-advanced biodiesel (such as grandfathered palm biodiesel) rather
than advanced biodiesel (such as soy biodiesel) and that it might allow for greater use of
conventional corn ethanol rather than advanced ethanol (such as sugarcane ethanol). By
providing a lower advanced biofuel requirement, we could provide a greater role for the market
to identify the lowest-cost alternative for satisfying the total renewable fuel standard. Given
such variables as the potential for changes in tariffs and subsidies for foreign products, as well as
competing uses for those products, we are not in a position to attempt to quantify what the cost
impacts associated with setting different advanced biofuel volume requirements might be.
However, our illustrative cost estimates indicate that the potential cost savings associated with
setting a lower advanced biofuel standard (while maintaining the total renewable fuel standard at
the same level to reflect the maximum reasonably achievable supply) would be relatively small
when considered in the context of the overall costs associated with this program. Furthermore,
we believe that given the high priority that Congress placed on the growth of advanced biofuels
under the program, and their superior GHG reduction potential, that any incremental costs
associated with our decision to set the advanced biofuel applicable volumes at reasonably
attainable levels are justified.
EPA further notes that outside the annual rulemaking context, for the 2010 RFS2 final rule, EPA
performed a more comprehensive assessment of costs and benefits for 2022, when the program
fully matures. Therefore, for the reasons described in the final rule and elsewhere in this
response to comments document, we believe that the information collected is sufficient to
reasonably inform our decision without engaging in a full quantitative cost benefit analysis as
requested by some commenters.
One commenter (i.e., The National Taxpayers Union) expressed concern over the "hidden tax"
from the RFS program on fuel, food and other costs to consumers that pervades the economy.
EPA believes there may be costs to the consumers of renewable fuels to the extent that
renewable fuels are more expensive than their petroleum replacements. EPA provides an
illustrative estimate of the costs to consumers of transportation fuel in an attempt to capture some
of these impacts. Many benefits to renewable fuels might also be considered "hidden," as they
are not directly transmitted through market transactions such as increased energy security and
GHG emissions reductions.
Other commenters encouraged EPA to make a measured evaluation of the costs and benefits of
the RFS after years of implementation without promoting higher or lower renewable fuel
volumes. A Member of the Pennsylvania House of Representatives commented that there may
be more cost-effective ways to meet stated policy goals of the RFS of reducing GHG emissions
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and improving energy security. In this rulemaking and in each previous RVO rule, EPA makes a
measured evaluation of the impacts of RVOs while accounting for the feasibility of supplying
renewable fuel to meet the RFS. Assessing the cost-effectiveness of the RFS program in meeting
policy goals as compared to other possible programs and policy options (if that is what the
commenter is suggesting) is outside of the scope of this rule, which implements the RFS.
7.2 Agricultural Impacts (Food, Animal Feed, Crops, Feedstock)
Comment:
Ace Ethanol/Fox River Valley Ethanol
These two businesses are a huge economic engine for our local rural communities. In addition to
producing about 100,000,000 gallons of ethanol, the plants also produce 250,000 tons of
distillers' grain, a high protein cattle feed, as well as 110,000 tons of liquid carbon dioxide.
[EPA-HQ-OAR-2015-0111-1200-A2 p. 2]
Advanced Economic Solutions (AES)
My name is William Lapp, President of Advanced Economic Solutions, based in Omaha
Nebraska. Advanced Economic Solutions (AES) is a consulting firm that works primarily with
food companies to help them manage food costs. The Renewable Fuel Standard has been a
major challenge for each of the food companies we work with since its inception in 2007. [EPA-
HQ-OAR-2015-0111-1193-A1 p.l] [EPA-HQ-OAR-2015-0111-1043, p. 301]
Since its inception in 2007, biofuel mandates have been a primary catalyst for rising food input
costs. The Bureau of Labor Statistics' Consumer Price Index reported food prices rising at an
identical rate as the overall rate of consumer inflation during 2000-2007. However since the
passage of the Energy Independence and Security Act (EISA) in late 2007, the increase in food
prices has been 50% greater than the overall rate of inflation. A higher price for key food inputs
increases the cost of production for the US food industry, costs that are ultimately passed on to
consumer. The increase in corn and soy oil costs over the past seven years represents a $12 B
increase in production costs for livestock producers, food manufacturers and restaurants [1].
[EPA-HQ-OAR-2015-0111-1193-Alp.l]
The 2016 advanced biofuel RVOs proposed by the EPA have already created a disruption in the
availability and price of the primary feedstock used to produce biodiesel: soy oil. Because of the
importance of soy oil to food companies, EPA decisions with regard to the annual RVO for
advanced biofuels are already substantially increasing costs for food companies. [EPA-HQ-
OAR-2015-0111-1193-A1 p.3]
[1] Advanced Economic Solutions estimate, based upon USDA World Agricultural Supply and Demand Estimates
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AgriVision Equipment Group
The rural economy has improved in the last 10 years to a level that it's not seen since the 1970s.
With this, we've seen a return of many young families to rural communities. In fact, the land
grant university that I graduated from has seen more people return from their agricultural
colleges to the communities than any other time in history. I think this speaks well for the future
of what appeared to be a stable economy in the heart of America in the last 5 years. With the
RFS, there has been considerable investment in these areas to support the mandate by Congress
to meet the renewable fuel standards. These investments have helped to stimulate the economy in
recent years in these communities, counties, and States. For many of our business customers, this
has been an investment in land, equipment, seed, and other things based on Congress' promise
that the RFS would provide a stable market for corn ethanol. Ethanol has become an essential
value-added market for the American farmer, stimulating investment and enhancing economic
opportunities in their communities and beyond. This has helped transform the grain sector from a
surplus-driven marketplace to one that is vibrant, high tech, and demand driven. So how does
this affect the local economy? Keeping the grain demand at a moderate to high level supports
land values. Land values drive property tax base, which is vital to supporting the schools, roads,
and other public services. And then the other piece is just straight-up income. Farm income
trickles down through the fabric of America. We've already seen job reductions and pressures on
the local economy with the recent 24-month drop in corn and soybean prices. The proposed RFS
changes would drive a further reduction in corn prices of 25 to 75 cents. So let's use the middle
of that, and let's assume 50 cents per bushel.
We ask that, in summary, that you stay firm on the original RFS schedule in support of continued
economic stability in our communities and States. I realize that adjustments are a fact of life. I
ask that you consider the timing of this and future adjustments.
American Cleaning Institute (ACI)
ACT continues to be concerned with the RFS's serious and significant impact on ACI member
companies' ability to source animal fats for use as an oleochemical feedstock. The proposed
volumes would continue to divert large quantities of a finite inelastic supply of animal fats to the
biofuels market, thereby critically disadvantaging the domestic oleochemical industry. EPA has a
responsibility, if not duty, to equally protect all industries that rely on animal fats to produce
goods. Agency mandates should not choose winners and losers. Therefore, we respectfully
request that EPA use its discretionary authority to lower the volume requirement for biomass-
based diesel, or, alternatively, to exclude animal fats as a feedstock option [EPA-HQ-OAR-
2015-0111-1934-Alp.l]
The proposed volumes would continue to divert large quantities of a finite inelastic supply of
animal fats to the biofuels market, thereby critically disadvantaging the domestic oleochemical
industry. [EPA-HQ-OAR-2015-0111-1934-A1 p. 1-2]
•Agency mandates should not choose winners and losers. EPA has a responsibility, if not duty, to
equally protect all industries that rely on animal fats to produce goods
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•The price of animal fats has increased 95 percent since 2006 under the combined policies of the
RFS and tax incentives for biofuels
•Biofuel production consumes a significant amount of the total supply of animal fats and current
policies threaten not only the price but the availability of animal fats for oleochemical production
•Since 2011 (a historical first) the price of animal fats have exceeded that of Malaysian palm oil
•Switching to foreign-sourced palm oil by the oleochemical industry threatens 25,000 U.S. jobs
•EPA must use all its available discretion to exempt or minimize the use of animal fats under the
RFS mandates and include the Proposed Rule's impact on the oleochemical industry in its
analysis of impacts on other sectors and industries; specifically, EPA must address the potential
job loss in collateral industries [EPA-HQ-OAR-2015-0111-1934-A1 p.2]
American Farm Bureau Federation (Farm Bureau); Indiana Farm Bureau
Since the RFS2 was put in place in 2007, the U.S. has seen tremendous growth within the
agricultural sector. If the Proposed Rule requirements are finalized, this decision will stall
growth and progress in renewable fuels as well as the broader agricultural economy. [EPA-HQ-
OAR-2015-0111-2355-A1 p. 1]
Over the past few years, the RFS2 has been charged as being a major culprit in generating higher
commodity prices. However, the marketing situation and economics have substantially changed
from the drought of previous years. Even with RFS2 biofuel targets having increased for 2014
and 2015, corn prices have plummeted to a range around $3.65 per bushel, less than half of the
record levels witnessed in 2012/13. It is ever more evident that commodity prices were driven by
much broader market fundamentals, including widespread drought and that the RFS2 mandate
played a lesser role in driving the price. [EPA-HQ-OAR-2015-0111-2355-A1 p. 2]
USDA's cost of production forecasts indicate that the cost of production breakeven for corn was
roughly $4.05 per bushel for 2014 making the national average cost of production breakeven
price point at negative levels for the first time since 2005. The same story applies to soybeans.
After farmers across the country managed to produce a record corn crop, now is not the time to
shed demand from corn. The collapse in commodity prices as already discussed with input costs
remaining high will likely take tens of billions of dollars off of farm income numbers in 2014,
2015, and 2016. Corn and soybean producers in particular will almost certainly witness a marked
reduction in net farm income. [EPA-HQ-OAR-2015-0111-2355-A1 p. 2]
Livestock producers enjoyed historically strong prices and income in 2014, and the outlook for
the next few years remains generally favorable. However, this livestock situation is itself
somewhat dependent on extension of the RFS2. Livestock producers have come to rely on
distillers dried grains (DDGs), a feed by-product generated from ethanol production. With the
standards in place to-date, ethanol production is now using over 35 percent of the nation's corn
crop. However, as ethanol production has increased, the supply of ethanol co-products has also
increased. Each bushel of corn taken to an ethanol plant generates approximately 2.8 gallons of
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ethanol while also generating between 17 to 18 pounds of DDGs. As a livestock ingredient
within a farmer or rancher's livestock ration, DDGs are highly valuable for both dairy and beef.
Large quantities are also being utilized in feed rations of hogs and poultry. [EPA-HQ-OAR-
2015-0111-2355-A1 p. 2]
American Soybean Association (ASA)
Because soybean demand is driven by the protein meal markets, soy oil has traditionally existed
in surplus. In recent years, demand for U.S. soybean oil for food use also began to decline
significantly following the U.S. Food and Drug Administration's (FDA) action in 2003 to require
food manufacturers to include trans-fats on nutrition labels beginning in 2006. From 2005-2014
the use of soybean oil for biodiesel increased from 0.67 to 5.0 billion pounds annually. During
the same period, U.S. soybean oil use for food applications declined by 3.7 billion pounds, with
the decline directly linked to trans-fat labeling and related government policies. Hence, biodiesel
has offset the decline of soybean oil use for food. [EPA-HQ-OAR-2015-0111-1818-A1 p.2]
Additional soybean oil will be displaced from domestic food markets as a result of the recent
FDA determination requiring the elimination by 2018 of all partially hydrogenated oil, which
creates trans-fat. This will result in the likely displacement of additional soy oil from food use
that would then be available feedstock for biodiesel production. The United Soybean Board
estimates that there is approximately 2 billion pounds of partially hydrogenated soybean oil still
used in the food market currently.3 If this soybean oil is displaced from food use as expected, it
could provide additional feedstock for over 250 million gallons of biodiesel. [EPA-HQ-OAR-
2015-0111-1818-A1 p.2-3] [EPA-HQ-OAR-2015-0111-1043-Al p.25]
3 United Soybean Board. June 16, 2015. http://unitedsoybean.org/article/soybean-farmers-prepared-for-phase-out-of-
partially-hydrogenated-oils/
Anonymous Citizen 6
One area which is affected most is the farming industry. By altering the type of fuel produced, it
forces and increased production of corn. This could also mean that these crops would no longer
be feed for its livestock. It also places a greater demand for corn, possibly requiring farmers with
little to no experience in the corn industry to change their business model. [EPA-HQ-OAR-2015-
0111-0113 p.1-2]
Not only for an economical issue, but for an ethical reason, if the EPA is to move forward with
this bill, it will need to incentivize farming operations to comply. If these operations cannot
afford to comply, they may even be forced to shut down lest they break the law. [EPA-HQ-OAR-
2015-0111-0113 p.2]
Badger State Ethanol; Big River Resources, LLC; Central Indiana Ethanol (CIE); Husker
Ag LLC; Pacific Ethanol, Inc.
If finalized, the rule could have the following effects:
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Destabilized farm economy. Following the harvest of a record corn crop in 2014, grain supplies
are rising and corn prices fell to nine-year lows. Corn prices in some locations have fallen below
the cost of production. With another large corn harvest expected in 2015, EPA's proposal would
take away an important demand stimulus at a time when farmers need it most. The end result
would be lower farm income. [EPA-HQ-OAR-2015-0111-3419-A1, p.4]
The livelihood of ethanol is at risk. This directly affects you and your agricultural operation. Big
Oil and its cronies have persuaded the Environmental Protection Agency (EPA) to propose a
drastic reduction involving the Renewable Fuels Standard (RFS) for 2015 and 2016, resulting in
the total renewable fuel volume dropping from 22.25 billion gallons in 2016 to 17.4 billion
gallons. Please join Big River Resources, LLC in contacting the EPA to defend ethanol and
agriculture. [EPA-HQ-OAR-2015-0111-3445-A1, p.l]
If realized, this severe cut will have a devastating impact on agriculture and our rural economies.
It will reduce already low corn prices, affecting planting decision in 2016. Potentially, this cut to
renewable fuels could push the price American farmers like you receive for grain well below the
cost of production. [EPA-HQ-OAR-2015-0111-3445-A1, p.l]
According to recent congressional testimony from USD A, corn use for ethanol increased by
about 700 million bushels per year from 2005/6 to 2010/11. Over the same period, corn prices
increased by 72 percent. Studies from 2008 and 2011 found the rise in ethanol production
accounted for about 30-36 percent of the increase in corn prices over 2007/8 and 2008/9. USDA
also stated the impact of increased corn utilization for ethanol has had a minor impact on rising
consumer food prices, and that Dried Distillers Grains (DDGs) have replaced as much as 80
percent of the calories lost due to the decline in corn fed to livestock. [EPA-HQ-OAR-2015-
01H-3445-Al,p.l]
Board of Commissioners, Mercer County; Crawford County; Greenville-Reynolds
Development Corporation; Office of Commissioners, Lawrence County, Pennsylvania
There are significant reasons that mandated ethanol blend rates should be lowered. They include:
3. Higher food costs. The administration should not increase federal ethanol mandates which
have already driven up food prices, by creating agricultural lands dedicated to generating energy
instead of food. [EPA-HQ-OAR-2015-0111-1223-A1 p.2]
Board of County Commissioners of Putnam County, Ohio
American farmers depend on the ethanol industry consuming five billion bushels of our corn per
year, thus helping our farmers stay in business. [EPA-HQ-OAR-2015-0111-3289-A1 p. 1]
California Dairy Campaign
The corn ethanol mandate included in the proposed rule will cause harm to dairy and livestock
producers in California and we urge that further reductions in the corn ethanol mandate are made
in the near future. [EPA-HQ-OAR-2015-0111-1816-A1 p.l]
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We support EPA's proposal to scale back the corn ethanol mandate; however dairy and livestock
producers will continue to be negatively impacted by high feed prices unless there is greater
reform of federal corn ethanol policy. [EPA-HQ-OAR-2015-0111-1816-A1 p.2]
Corn Producers Association of Texas (CPAT)
Texas and U.S. farmers have made considerable strides in preserving and conserving natural
resources. By implementing better management strategies and new technologies, farmers can
produce more crops on less land than before. The Field to Market Alliance for Sustainable
Agriculture reported that corn farmers throughout the nation have improved on all measures of
resource efficiency. For one bushel of corn, farmers have decreased irrigation by 53 percent, land
use by 30 percent, soil erosion by 67 percent, energy use by 43 percent, and greenhouse-gas
emissions by 36 percent. [EPA-HQ-OAR-2015-Oil 1-2276-A2 p. 1] [EPA-HQ-OAR-2015-0111-
1044pp. 81-82]
Despite increases in the amount of course grains used for ethanol over the years, the amount of
land dedicated to such crops, including corn, has actually decreased 6.9 percent globally from
1980 to 2013. [EPA-HQ-OAR-2015-0111-2276-A2 p. 1]
Farmers in Texas plant approximately 2 million acres of corn each year, and have done so since
before the RFS was in place in 2007. [EPA-HQ-OAR-2015-0111-2276-A2 p. 2]
Continued innovation in seed technologies and management practices, have enabled America's
corn farmers to consistently produce an abundant crop - meeting the needs of all its markets,
including ethanol, while maintaining a relatively static surplus. [EPA-HQ-OAR-2015-0111-
2276-A2 p. 2]
Even with the growing demand for corn for ethanol, livestock feed remains the largest use for
U.S. field corn - by far. While our nation's farmers have continued to meet this demand for feed,
the ethanol industry has introduced a new, arguably equally important, feed for our livestock -
distillers grains (DGs). [EPA-HQ-OAR-2015-Oil 1-2276-A2 p. 2] [EPA-HQ-OAR-2015-0111-
1044pp. 81-82]
The availability of DGs displaces approximately 1 billion bushels of corn in livestock rations,
providing an efficient, high-quality, and high-value feed product for livestock produces both
domestically and internationally. As such, the effect of ethanol on the cost of feeding livestock is
minimal, if not non-existent - as is evident with current corn prices. [EPA-HQ-OAR-2015-0111-
2276-A2 p. 2] [EPA-HQ-OAR-2015-0111-1044 p. 82]
Current corn prices are hovering near the cost of production, which is approximately $4.04 per
bushel according to the U.S. Department of Agriculture's estimates for this year. The EPA's
proposal would displace nearly 1.5 billion bushels of corn in the market - an action that will
negatively impact the price of corn and drive it below the cost of production. [EPA-HQ-OAR-
2015-0111-2276-A2p. 2] [EPA-HQ-OAR-2015-0111-1044 p. 81]
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Should the agency move forward with its proposal, fanners will have to increase the amount of
other commodities in their farm's mix - creating a rippling effect through all commodity
markets. The implications of this reach beyond the farmers' wallets, and can easily increase
government outlays in farm program risk management money. [EPA-HQ-OAR-2015-0111-
2276-A2 p. 2]
Corn Producers Association of Texas (CPAT)
In regard to the RFS's impact on consumers' pocket books, the Congressional Budget Office
stated the RFS has no impact on food prices in a report released just last year. According to the
U.S. Department of Agriculture, farm products account for only 14 cents of every dollar spent on
food; other costs such as energy, packaging, marketing and transportation represent the more
than 80 cents remaining. This relation is reflected in that food costs have remained relatively
stable, despite the dramatic drop in the price of corn in the past two years. [EPA-HQ-OAR-2015-
0111-2276-A2p. 2]
Dakota Spirit AgEnergy
Some analysts have said it could decrease the price of corn, pushing the price American farmers
receive for their grain well below the cost of production. Working with farmers firsthand, I know
they do not want to go back to the days of receiving a paycheck in the mailbox in the form of a
subsidy; they want to continue to sell their crops for a profit on the free market. [EPA-HQ-OAR-
2015-0111-2057-Alp.l]
Darling Ingredients Inc.
There is clearly room for the EPA to increase the BED mandate to 2.0 billion gallons in 2016
and 2.3 billion gallons in 2017. This is particularly true given the cost effective position of
Biomass Based Diesel compared to Brazilian ethanol and the cost effective manner in which
BED reduces carbon emissions (NBB submittal). It should be noted the analysis which
establishes the cost savings of Biomass Based Diesel compared to sugar based ethanol compares
only soybean based biodiesel to sugar based biodiesel. A significant portion of Biomass Based
Diesel is supplied from waste oils which have an even greater competitive advantage to sugar
based ethanol. [EPA-HQ-OAR-2015-0111-1929-A1 p.9]
The EPA even concludes that BED is more economical than sugar based ethanol. The EPA's
statement of concern regarding general competitive economic theory is not only unsupported, it
is actually contradicted by the EPA's own analysis. [EPA-HQ-OAR-2015-0111-1929-A1 p.9]
Farm Credit Services of America
As a lead lender to all types of agricultural producers, we are very sensitive to how the success of
this industry ripples through and impacts other segments. But, predictability is the central issue
required for project success, and shifts in government policies - or even the threat of shifts - are
problematic. The proposed rule, if finalized without revising the RVO levels to match the targets
established by Congress, will cause severe economic consequences to agriculture producers and
will diminish future investment in renewable fuels. Specifically, the RVO levels, as proposed,
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would significantly reduce corn demand, prices, and farm sector profits, which would lead to
declines in land values and increased Federal expenditures on Farm Program costs. [EPA-HQ-
OAR-2015-0111-2491-A1 p.l]
Governor of Iowa, et al.
For decades, the agricultural economy lurched from crisis to crisis and farmers often depended
on government subsidies to stay afloat. The RFS helped brighten the future of the agricultural
and biosciences sectors by providing a stable policy framework that gives value-add
opportunities for various agricultural commodities, while helping reduce transportation
emissions - a true win-win. In recent years, there has been renewed interest in agriculture among
young people given the hope that follows stable policy, innovation, and technological
advancement. There has been a softening in the agriculture economy recently - a sector of the
economy that had previously been a bright spot in the national economy. [EPA-HQ-OAR-2015-
0111-1915-A1 p.2]
Ethanol is perhaps the most unfairly maligned product in the nation due to the millions of dollars
of negative marketing and lobbying by Big Oil. One example comes in the food versus fuel
argument. If this argument was true, then why have food prices not plummeted now that corn is
less than half the price it was during the drought? Renewable fuel critics often ignore the fact
that a modern dry-mill ethanol refinery produces 17.5 pounds of highly valuable DDGs from one
bushel of corn which is utilized by cattle producers throughout the Midwest - a fact that has
helped grow cattle production in the Midwest. In addition, thanks to the productivity of
America's farmers and the innovation in the agricultural and renewable fuel sectors, we can both
feed and fuel the world. [EPA-HQ-OAR-2015-0111-1915-A1 p.2-3]
Greater Mankato Growth
The Greater Mankato Area is a thriving and vibrant economic center with a diverse and strong
economic base made up of key industries like health care, education, manufacturing and retail.
However, agriculture is the foundation of southern Minnesota's economy. The production of
agricultural raw products spurs economic activity across a multitude of industries in our region.
In fact, our region's agribusiness cluster generates $1.5 billion dollars in economic impact and
supports thousands of jobs. [EPA-HQ-OAR-2015-0111-1312-A1 p. 1]
The production of renewable fuels is a key component of this economic might. Within the South
Central Minnesota Agricultural Region, a 13 county-region surrounding Greater Mankato, you'll
find 8 of the top 10 soybean producing counties in the state of Minnesota and 6 of the top 10
corn producing counties in the state, including the top 4 producing. This raw stock feeds the 11
ethanol production facilities in our region, with a total capacity just under 1 billion gallons a
year. This represents approximately 8% of total ethanol production in the U.S. [EPA-HQ-OAR-
2015-0111-1312-Alp. 1]
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Growth Energy 20
Denying an RFS waiver would also have little impact on retail food prices. Historically, as
USDA Chief Economist Dr. Joseph Glauber testified to Congress, "increased biofuels production
has likely had only a small effect on U.S. retail food prices." 44 Only approximately 15 percent
of U.S. corn supply is used for food, and corn and food made with corn account for only a small
fraction of total U.S. spending on food. As a result, the CBO concludes that adhering to the
statutory volumes would increase total U.S. spending on food in 2017 only approximately one-
fifth of one percent.445 [EPA-HQ-OAR-2015-0111-2604-A2 p.78]
On the other hand, EPA's proposed volume requirements would result in higher food prices. As
explained above, reducing ethanol consumption would significantly raise fuel prices for
consumers. The World Bank has found that "food prices respond strongly to ... crude oil prices";
while many factors influence food prices, "[c]rude oil prices matter the most," with oil prices
accounting for almost two-thirds of the food price changes from 1997 to 2012.446 Indeed,
"increases [in] petroleum prices have [approximately] twice the impact on consumer food prices
as equivalent increases in corn prices."447 Whereas "corn prices affect only a segment of
consumer foods—livestock, poultry, and dairy"—"petroleum and energy prices affect virtually
all aspects of agricultural raw material transportation, processing, and distribution of all finished
consumer products."448 As discussed above, EPA's proposal would substantially raise fuel prices
for consumers. That increase in turn would raise food prices for consumers as well. [EPA-HQ-
OAR-2015-0111-2604-A2 p.78]
444 Statement of Dr. Joseph Glauber, Chief Economist, U.S. Department of Agriculture, Before the House Comm. on
Energy and Commerce, Subcomm. on Energy and Power, at 1 (June 26, 2013), at
http://www.usda.gov/oce/newsroom/archives/testimony/2013files/STATEMENT OF JOSEPH GLAUBER 06-26-
2013.PDF.
445 Congressional Budget Office, Renewable Fuel Standard, supra note 436, at 14-15.
446 See John Baffes & Allen Dennis, Long-Term Drivers of Food Prices, The World Bank Policy Res. Working
Paper 6455 (May 2013), at 3, 14, at http://www-
wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2013/05/21/000158349_2013
0521131725/Rendered/PDF/WPS6455.pdf.
447 See John M. Urbanchuk, The Relative Impact of Corn and Energy Prices in the Grocery Aisle, at 4 (June 2007),
at http://ethanolrfa.0rg/page/-/objects/documents/l 157/food_price_analysis_-_urbanchuk.pdf?nocdn=l.
448 See id. at 5.
Highwater Ethanol, LLC
This potential move is a clear shot at the Corn and Soybean producers, the agriculture industry
vendors, financials institutes, the science involved in increasing production for Corn and
Soybeans in the United States and around the world and the renewable fuels industry. This
nonsense by the Federal Government needs to stop, this has the potential to trigger a recession in
the agriculture industry that we have not seen since the 1980's, the agriculture industry was a
bright spot in the economy over the past six years when a majority of the Country struggled.
[EPA-HQ-OAR-2015-0111-2506-A2 p.2]
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Illinois Corn Growers Association (ICGA) and Illinois Renewable Fuels Association
(IRFA)
When the RFS II was passed in December 2007, the U.S. economy was spiraling downward. The
economic growth in the corn industry and rural America due in part to the RFS helped buffer the
national recession that we were in. ICGA's and IRFA's comments dated January 27, 2014
spelled out in detail the benefits to the corn industry due to the RFS. In 2013 when these
proposed volume reductions in corn based ethanol were first announced, corn prices were over
$4.00 per bushel. In 2015 the corn prices reached lows of $3.50 which according to University of
Illinois economists is below the cost of production for many corn farmers. [EPA-HQ-OAR-
2015-0111-1925-A1 p. 4]
Illinois Department of Agriculture
Illinois is the 3rd leading producer of biofuels and is the home to 14 ethanol plants and 5
biodiesel plants. The Illinois ethanol community has had a $5.29 billion contribution in total
economic impact, provided more than 4,000 full time jobs, purchased $3.8 billion worth of
Illinois corn and produced enough ethanol to displace 35% of Illinois' petroleum usage. From a
tax perspective, these sales provided $37 million in State or local revenue and $39 million in
federal revenue. Additionally, biodiesel is of particular importance to Illinois soybean growers
and Illinois agriculture. Illinois biodiesel plants have an estimated annual production capacity of
nearly 200 million gallons. The biodiesel industry has supported nearly 9,000 jobs in all sectors
of the state's economy and generated $1.66 billion in household income.
In 2014, American farmers harvested the single largest corn crop in history, at 14.2 billion
bushels. Therefore, corn prices fell as a result, and currently stand close to where they were
when the RFS was enacted in 2007. A reduction in volume obligations to the RFS would cause
corn prices to fall, potentially plunging prices below the cost of production and the total value of
the corn crop. As corn typically affects all other commodities, such a decrease in corn prices
would negatively affect profitability for all U.S. farmers and reverse the trend toward higher net
farm income. Additionally, agribusinesses will be impacted and land values across rural America
will decline.
Finally, as a farmer, one of the harshest components of the reduction in the RFS is the removal of
value-added opportunities for agricultural commodities, limiting prospects for young Illinoisans
who want to return to the family farm and continue their family's traditions and legacy. [EPA-
HQ-OAR-2015-0111-0260-A1 p. 1-2]
Illinois Farm Bureau
Since the RFS2 was enacted, the U.S. has seen tremendous growth within the agricultural sector.
If the agency finalizes the proposed rule, such an action would put the brakes on the RFS
program's benefits, send the wrong signals to investors, and stifle the broader agricultural
economy. [EPA-HQ-OAR-2015-0111-3290-A2 p.l]
Wayne Anderson - a typical Illinois corn farmer's story
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Geneseo, Illinois grain farmer Wayne Anderson serves as a director of Illinois Farm Bureau
representing a five-county region in and around the Quad Cities and as IFB's interlocking
director on the Illinois Corn Growers Association board of directors. He drove to Kansas City,
Kansas last month to represent himself, his state and county Farm Bureaus, and his many friends
and neighbors who benefit directly and indirectly from a strong Renewable Fuel Standard. His
story is common. [EPA-HQ-OAR-2015-0111-3290-A2 p.l] [EPA-HQ-OAR-2015-0111-1044
p.89]
Early on, Wayne recognized the potential that renewable fuels had to chew up enormous piles of
corn sitting outside virtually every country elevator. Those piles were a visible indicator of the
some of the lowest real prices of corn received by farmers over the past century. So, he took a
risk and bought into ethanol's potential investing in the Lakota, Iowa ethanol plant. He was a
strong advocate ten years ago for the first Renewable Fuel Standard and two years later for the
RFS2. The energy policy worked. The market for ethanol expanded. Corn prices began their
steady rise and finally topped the magical $3 mark. It wasn't long ago when $3 corn was
considered bullish. [EPA-HQ-OAR-2015-0111-3290-A2 p.2] [EPA-HQ-OAR-2015-0111-1044
pp.89-90]
Today, he's fortunate to live and farm 15 minutes away from the CHS ethanol plant in Annawan
and 25 minutes away from Big River Resources in Galva. The two plants in his county have a
combined annual production capacity of 240 million gallons. He supplies corn to both plants.
And those plants are getting more efficient. The CHS plant will soon convert its corn oil into
biodiesel. Not only have these plants created construction jobs, full time jobs, and steady markets
for Wayne and his neighbors, they have lifted Henry County. They have generated tens of
millions of dollars' worth of economic activity. Stores which probably would have closed are
still open. And how did it happen? [EPA-HQ-OAR-2015-0111-3290-A2 p.2] [EPA-HQ-OAR-
2015-0111-1044 p.90]
It happened because Congress took a bold step when our country recognized the need to rely
more on domestically produced, environmentally friendly bio-based fuels Ethanol and biofuels
are fulfilling that promise. Advanced biofuels are no longer ten years away. They are reality.
Like thousands of Illinois farmers, Wayne believes strongly that the agency has the legal
obligation to keep its promise to Congress and to the American people to blend significantly
more renewable fuel than you're proposing. [EPA-HQ-OAR-2015-0111-3290-A2 p.2] [EPA-
HQ-OAR-2015-0111-1044 p.91]
Congress set the standard. And EPA must meet it without making excuses or rewriting the law.
Because farmers like Wayne Anderson and his Henry County, Illinois neighbors depends on it.
[EPA-HQ-OAR-2015-0111-3290-A2 p.2] [EPA-HQ-OAR-2015-0111-1044 p.91]
Iowa Biodiesel Board (IBB) and Iowa Soybean Association (ISA)
Agriculture accounts for more than 33 percent of Iowa's economic output. One-in-five of my
fellow lowans is employed in agriculture or a related industry. Clearly, any action that supports
farming and promotes growth in the industry is a good thing for Iowa and our nation. The RFS is
one such example. [EPA-HQ-OAR-2015-0111-1942-A1 p. 1]
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Iowa is the nation's top biodiesel producer. This economic powerhouse supports more than 7,100
jobs and adds $520 million of GDP annually to the state's economy. There are 12 biodiesel
plants in Iowa that can produce more than 315 million gallons. However, last year they produced
just 227 million because of RFS uncertainty. More demand for biodiesel will fuel the industry's
growth, benefiting America's farmers and economy, while fueling energy diversity. [EPA-HQ-
OAR-2015-0111-1942-A1 p. 1] [EPA-HQ-OAR-2015-0111-1043, pp.43-44]
The Iowa Soybean Association works on behalf of nearly 40,000 farmers who produce nearly
500 million bushels of soybeans annually. Continued and consistent demand for this product is
essential for market security and production. [EPA-HQ-OAR-2015-0111-1942-A1 p. 2] [EPA-
HQ-OAR-2015-0111-1043, p. 44]
A benefit of biodiesel growth is that when we diversify farm income by allowing farmers to play
a role in energy production, it benefits food security for everyone. The rise of biofuels has no
doubt saved family farms, which means greater food security. [EPA-HQ-OAR-2015-0111-1942-
Al p. 2] [EPA-HQ-OAR-2015-0111-1043, p. 44]
Farmers are innovative and will always rise to meet market demands. Biodiesel takes support of
the Iowa ag economy one step further by creating greater value for a byproduct of the soybean
meal that feeds livestock. By creating demand for soybean oil that would otherwise be
underused, biodiesel decreases the price of soybean meal — a win-win for farmers who grow
soybeans and feed meal to livestock. This helps food prices for consumers overall. [EPA-HQ-
OAR-2015-0111-1942-A1 p. 2] [EPA-HQ-OAR-2015-0111-1043 p. 44]
A growing and more affluent global population demands more protein. Biodiesel supports that
demand. Increased demand for biodiesel increases the soybean crush, thus making soybean meal
more plentiful and less expensive. It also creates additional demand for animal fats, yet one more
benefit for livestock producers. [EPA-HQ-OAR-2015-0111-1942-A1 p. 2] [EPA-HQ-OAR-
2015-0111-1043, pp. 44-45]
Iowa Corn Growers Association (ICGA)
Weakened farm economy. U.S. corn farmers are the most productive farmers in the world. Our
track record of production provides strong evidence that there are more than adequate domestic
and global supplies of corn for food, feed and fuel uses. Yield trends for corn in the U.S. have
increased on average by 1.9 bushels per acre per year since 1955. Corn farmers produced over
2.2 billion bushels more corn in 2014 than they did in 2008 due to increased yields and increased
acreage, all while implementing improved production and conservation practices. This increase
of 2.2 billion bushels could produce over 6.1 billion gallons of ethanol annually. Even with
record droughts in 2011 and 2012, corn carryout supplies have averaged over 1.4 billion bushels
and last year (2014) corn stocks grew to almost 2.0 billion bushels. In addition, corn prices fell to
nine-year lows. Corn prices in some parts of Iowa have fallen below the cost of production. At
this time, the 2015 crop looks to be equally as large. EPA's proposal would take away an
important demand stimulus at a time when farmers need it most. The end result would be lower
farm income because of a nearly 1.5 billion bushel drop in corn demand. Limiting growth of
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ethanol production under the proposed RVO only makes worse the profitability situation of U.S.
corn farmers as corn stocks continue build. [EPA-HQ-OAR-2015-0111-1820-A1 p. 5-6]
Iowa Farm Bureau Federation (IFBF)
Iowa's economy relies on a strong agricultural sector and thus strong commodity prices.
Currently, the cost of production for corn is higher than the current market price. The same
applies to soybeans as well. Farmers across the country produced a record corn crop for the past
two years - now is not the time to decrease demand. The proposed rule will only drive
commodity prices lower and create further hardship to Iowa farmers whose net farm incomes are
likely to recede significantly. This rule will also harm livestock producers who have come to rely
on the high quality, high protein distillers dried grains (DDGs) in their feedstock. [EPA-HQ-
OAR-2015-0111-1717-A1 p. 2]
Iowa Renewable Fuels Association
During a recent presentation to the Kansas City Federal Reserve Agricultural Symposium,
Purdue University economist Mike Boehlje warned that "farmers need to batten the hatches now
if they want to survive." Purdue University's study forecasts "revenue per acre falling below the
cost of production each year from 2014 to 2017 for Midwest corn and soybean producers."
Those most at risk are "young, beginning farmers who don't have a land base." As a result,
Boehlje noted that 25 percent of farm equipment dealers went out of business in the 1980s and
he predicted "we will see another washout in dealers in the next two to three years." 15 [EPA-
HQ-OAR-2015-0111-1957-A2 p. 3]
Given the gloomy forecasts, it's probably not too surprising that bankers expect farm loan
defaults to rise in the next year. The monthly Creighton University July Rural Mainstreet Index
survey of bank executives found that farmland prices had "fallen by 6.8 percent over the last
year" and that nearly 12 percent of the bankers had "reported farm loan defaults were up for the
year." But most alarmingly, almost 55 percent of the bankers "expect farm loan defaults to rise
over the next 12 months."16 [EPA-HQ-OAR-2015-0111-1957-A2 p. 3]
In fact, the impact of the RFS on farm income and the health of the rural economy is very clear.
An old and all-too-accurate joke in farm country is: "if you give a farmer a market, he'll
overproduce it." The hard work and productivity of the American farmer is much more than a
cliche to be bandied about every four years during the Iowa caucuses, it is a statistical fact. Even
with a growing world population and increasing middle classes demanding higher amounts of
grain-intensive meat in their diets, the American farmer continues to overproduce the market. As
a result, according to USD A figures, from 1981 through 2005, the average price a farmer
received for a bushel of corn was below the average cost to produce that bushel in 22 of those 25
years. (Attachment B) The result was depressed farm income, high costs borne by taxpayers for
Farm Bill programs, and rural economic doldrums. [EPA-HQ-OAR-2015-0111-1957-A2 p. 4]
[Attachment B can be found on p. 37-38 of docket number EPA-HQ-OAR-2015-0111-1957-A2]
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However, with the implementation of the RFS, the American farm economy went on an amazing
eight-year run of prosperity - what some observers have called the best eight contiguous years in
the history of American agriculture. From 2006 to 2014, the average price of abushel of corn
was higher than the average cost to produce it. (Attachment B) The growing demand for ethanol
had provided the sponge necessary to soak up the excess supplies of corn. As a result, we saw a
strong rural economy help power many states through "The Great Recession," while farm
income and production across the globe set new highs. [EPA-HQ-OAR-2015-0111-1957-A2 p.
4]
15. Williams, Elizabeth. "Batten Down the Hatches." DTN/The Progressive Farmer 17 Jul 2015
http://www.dtnprogressivefarmer.com/dtnag/commo n/link.do?symbolicName=/free/news/templatel&product=/ag/n
ews/renewablefuels/news&vendorReference=0702DA77&pagination_num=l
16. Ford, George. "Bankers expect farm loan defaults to rise in next year." The Gazette 17 Jul 2015
http://thegazette.com/subject/news/business/bankers-expect-farm-loan-defaults-to-rise-in-next-year-20150717
Kane Ranch, LLC
I own a ranch in Central Montana, where distances are great and trucking and fuel consumption
is nearly the only way to get our commodities to market and the only ways to bring necessary
supplies to our area, rather than be food supplies, parts, and commodities. [EPA-HQ-OAR-2015-
0111-1660-A1]
I am very sensitive to the cost of my operation, and increasing the amount of ethanol to be
blended in gasoline in the proposed 2014, 2015 and 2016 volumes.[EPA-HQ-OAR-2015-0111-
1660-A1]
The existing standard has already had the unintended consequence of raising the cost to
agriculture business, such as mine, and I am concerned that the proposed stands will only
continue to raise costs. Therefore, I am asking that the EPA set the final fuel mandate under the
RFS for 2015-2016 to no more than 9.7 percent of gasoline demand.[EPA-HQ-OAR-2015-0111-
1660-A1]
Kansas Corn Growers Association
Kansas has 13 ethanol plants located in small, rural communities across the state. Most of these
plants were built with investments by farmers and community members who took a risk to bring
growth to their regions. The economic development and jobs brought to these rural areas of
Kansas are significant. Farmers ensured that we have more than enough corn and grain sorghum
to supply these plants with feedstocks. Now, corn growers across the nation are funding large
scale efforts to increase infrastructure for ethanol blends. There could not be a worse time for
EPA to lower market access for conventional ethanol. [EPA-HQ-OAR-2015-0111-3172-A1 p. 1]
Kansas Department of Agriculture (KDA)
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The Kansas Department of Agriculture (KDA) appreciates the opportunity to comment on the
importance of the ethanol industry to the Kansas economy. There are 12 active ethanol plants in
Kansas with an annual production capacity of 550.5 million gallons. The ethanol industry
contributes an estimated $2.03 billion to the Kansas economy and directly employs or supports
14,600 Kansans'.
Kansas ethanol plants utilize approximately 18.4 million bushels of corn and grain sorghum and
provide 331.2 million pounds of livestock feed in the form of DDGS. DDGS are utilized in
rations in Kansas feedlots and dairies, which contribute an estimated $12.8 billion to the Kansas
economy. [EPA-HQ-OAR-2015-0111-1196-A1 p.l]
The Kansas ethanol industry is an important part of Kansas agriculture and agriculture accounts
for an estimated 43% of the Gross Regional Product of our state Enhancements in the industry's
competitiveness will provide long term economic benefit to Kansas. [EPA-HQ-OAR-2015-0111-
1196-Alp.l]
Kansas Farm Bureau
Advanced Biofuels - While cellulosic biofuels must still prove themselves a major source of
renewable fuel, technologies continue to advance and high-paying jobs are being created
throughout the U.S. A case in point is the Abengoa Bioenergy Biomass plant in Hugoton,
Kansas, scheduled to come on line later this year. This 25 million gallon biomass-to-ethanol bio-
refinery will convert excess corn stover (cellulosic biomass) into ethanol. Additionally, the
residue of the refining process will be combusted along with more biomass material to produce
18 megawatts of electricity, making the entire facility energy efficient and environmentally
friendly. The plant's economic impact will be significant because when fully operational, it is
expected to provide 78 rural jobs and contribute an additional $5 million to the local economy
each year through the purchase of corn stover. EPA's proposed reductions from RFS2 targets
sends a message of uncertainty that may erode investor confidence, curtail future investment and
limit the advancements and innovation needed to make advanced biofuels a reality in the U.S.
[EPA-HQ-OAR-2015-0111-1195-Alp.2]
Kansas Soybean Association
Because soybean demand is driven by the protein meal markets, soy oil has traditionally existed
in surplus. In recent years, demand for U.S. soybean oil for food use also began to decline
significantly following the U.S. Food and Drug Administrations (FDA) action in 2003 to require
food manufacturers to include trans-fats on nutrition labels beginning in 2006. The increase in
the use of soybean oil for the biodiesel market has essentially taken up the reduced demand for
soybean oil in the food sector associated with trans-fat labeling as the food industry shifted away
from the use of partially hydrogenated soybean oil to various other oil blends. The amount of soy
oil used in domestic food markets on an annual basis is approximately 4 billion pounds lower in
2012 than it was in 2005.
Additional soybean oil will be displaced from domestic food markets as a result of the recent
FDA determination requiring the elimination of all partially hydrogenated oil, which creates
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trans-fat. It is estimated that this will displace an additional 1-1.5 billion pounds of soybean oil
from food use.
Biodiesel also has a positive impact on soy meal supplies. Processing biodiesel from soybeans
uses only the oil portion of the soybean, leaving all of the soy meal protein available to nourish
livestock and humans. By providing a market for soybean oil, biodiesel increases the availability
of protein-rich meal for human and livestock consumption. The increased meal supply results in
a more cost-effective food and feed source. [EPA-HQ-OAR-2015-0111-2340 p.2-3]
Kentucky Beverage Association
Before the RFS was enacted, corn prices were fairly stable, but the RFS has introduced
tremendous volatility into food commodity markets, resulting in wildly fluctuating prices for
corn and animal proteins that use it. A recent study from PricewaterhouseCoopers stated that if
the RFS is not repealed, consumers can expect steep increases, some by as much as 15%. Corn is
a foundational ingredient in the American food supply and is used not only as a value-added
product in many of the foods we buy but also as the primary feed grain in animal agriculture.
The higher price of corn causes the price of every food in the supply chain to increase, from
baked goods to meat products to ice cream to beverages. In fact, the rising prices from the RFS
have far outpaced the rate of inflation. Since 2005, the year RFS was enacted, the CPI for food
has risen 28.2% compared with a 20% increase in core inflation during that same time. [EPA-
HQ-OAR-2015-0111-2356p.l-2]
It is difficult to justify artificially raising prices of food on the backs of hardworking Americans
when many of the main reasons for implementing the RFS aren't being met. Ethanol production
has consumed more than 40% of U.S. corn in recent years, and it is set to keep rising. As that
figure increases, the pain at the grocery store increases and Americans have no tangible results to
show for it. [EPA-HQ-OAR-2015-0111-2356 p.2]
Kentucky Corn Growers Association
The RFS has been vital to allow the United States to break its addiction on petroleum-based fuel
by following a purposely and carefully considered stepping-up of renewables into our nation's
fuel supply. In passing the RFS, corn farmers were called upon to fulfill dramatically increased
demand for feedstock. The transition curve was steep, but everyone in the industry embraced the
challenge. We worked together to provide plenty of corn to all those who need it: for FOOD,
FEED, FUEL and FIBER. And, we did it the right way, by responsibly increasing production
capacity - not by significantly increasing acres, and not by compromising environmental health.
Increasing production capacity in this fashion was not easy. It required a considerable amount of
investments in infrastructure and technology. It will be impossible to reverse course on these
investments and the additional grains that they generate without damage to our family
businesses. For the past two years, since EPA's intentions to reduce RVO's were only a rumor,
corn markets have suffered. A final decision by EPA of turning back the RFS will have shocking
consequences on the farmers that rose to the task of boosting supply for the RFS. [EPA-HQ-
OAR-2015-0111-2499-A1 p.l]
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If EPA finalizes this rule as proposed, it will prompt a devastating impact on farmers and rural
communities. [EPA-HQ-OAR-2015-0111-2499-A1 p.l]
Kentucky State Senate
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 117-118.]
A strong farm economy means more agribusinesses to supply those inputs, machinery, et cetera.
Family businesses not farming related thrive as well. These are the supporters of farm operations,
like welders for grain bins, electricians for grain dryers, mechanics for tractors. The jobs that
agribusiness has created in the community that I'm familiar with and that I represent are solid,
important, and critical to the economy of western Kentucky and the rest of the Commonwealth.
MARC-IV Consulting
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 43.]
And I think I can sum up the impacts of biodiesel on livestock in just three easy points. More
biodiesel equals more meal because we use soybeans, equals decreased feed costs. And this has
been documented empirically. More biodiesel equals increased carcass values because of the use
of animal fats, which results in higher revenue streams for livestock producers. This also has
been documented empirically. And more biodiesel equals more glycerin, which provides
additional options for livestock producers in terms of energy for their rations.
Marquis Energy LLC
If the EPA moves forward with their current proposal it would stifle growth and force many
plants in the ethanol industry to make decisions that would have a bitter impact on America's
agricultural economy. [EPA-HQ-OAR-2015-0111-2800-A1 p.l]
Mass Comment Campaign sponsored by ActionAid USA (web) - (2629)
ActionAid remains strongly opposed to mandates for food-based biofuels. Land, especially
arable land that is suitable for agriculture, is not an unlimited resource. Expanding production of
biofuel crops means displacing food production or clearing forests, wetlands or other
ecosystems. This not only presents environmental problems with decreasing biodiversity and
emissions from land use change, but also undermines land rights. ActionAid works with
communities who have had their land threatened and communities who lost their land to biofuel-
crop plantations, in violation of their rights. [EPA-HQ-OAR-2015-0111-2553-A1 p. 1]
Food-based biofuels also contribute to more volatile and higher food prices over the long term.
In developing countries, poor people spend the vast majority of their income on food. Even small
changes can have a major impact on their ability to afford and access sufficient food. [EPA-HQ-
OAR-2015-0111-2553-A1 p.l]
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Mass Comment Campaign sponsored by Adkins Energy LLC (paper) - (120)
A drastic cut like the one the EPA proposed will have a devastating impact on agriculture and
our rural economy. It could decrease the price of corn, pushing the price American farmers
receive for their grain well below the cost of production [EPA-HQ-OAR-2015-0111-2956-A1
p.l]
Mass Comment Campaign sponsored by anonymous 12 (email) - (560)
I am writing you with deep concern regarding the recent proposed rule for the 2014-2016
Renewable Volume Obligations (RVOs) as required as part of the Renewable Fuel Standard
(RFS). The impact that the RFS has had on ethanol plants and production cannot be overstated.
[EPA-HQ-OAR-2015-0111-0215-A1 p.l]
Some analysts have said it could decrease the price of corn, pushing the price American farmers
receive for their grain well below the cost of production. Working with farmers firsthand, I know
they do not want to go back to the days of receiving a paycheck in the mailbox in the form of a
subsidy; they want to continue to sell their crops for a profit on the free market. [EPA-HQ-OAR-
2015-0111-0215-Alp.l]
Mass Comment Campaign sponsored by anonymous 27 (paper) - (120)
From excess rain or drought to the ups and downs of the marketplace, farmers are familiar with
adversity. This extremely wet spring is a perfect example of the tribulations farmers work
through annually. [EPA-HQ-OAR-2015-0111-2959-A1 p.l]
The proposal threatens to dramatically change demand for corn in the middle of the game. If
approved, the reduced requirements will have devastating impacts on our local communities.
Corn price is now below the cost of production and choosing to remove a chunk of demand is
incomprehensible. [EPA-HQ-OAR-2015-0111-2959-A1 p.l]
Mass Comment Campaign sponsored by anonymous 31 (paper) - (301)
I am writing in support of the Renewable Fuel Standard (RFS) and I hope you will consider my
comments when making your decision. The RFS has improved the profitability of my farming
operation. Before, the RFS was implemented, I struggled to sell my corn at a fair price. In
addition, the limited market demand also impacted the utilization of my farmland. The impact
that the RFS has had on agriculture cannot be overstated. Since its original enactment in 2005,1
have witnessed firsthand the, positive impact it has had on my local economy. In fact, it is
directly due to the RFS that my farming operation has become so successful. [EPA-HQ-OAR-
2015-0111-2561-Alp.l]
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Mass Comment Campaign sponsored by anonymous 8 (email) - (505)
Many communities, like mine, depend on a strong agricultural sector. The negative impact on
renewable, domestic ethanol production affects me where I live, shop and do business. [EPA-
HQ-OAR-2015-0111-0210-A1 p.l]
With corn prices hovering below the cost of production, this irresponsible decision by the EPA
will imperil our already shaky economic recovery and decades of growth in rural communities.
As goes the farm economy, so goes the economy of rural America. This will shrink rural tax
bases, negatively impacting schools, hospitals, fire departments, and roads. Forcing land values
and rents down will harm landowners, many of whom are elderly and living on fixed incomes.
Rural America cannot afford another hit. [EPA-HQ-OAR-2015-0111-0210-A1 p.l]
Mass Comment Campaign sponsored by employees of Western Dubuque Biodiesel (web) -
(1)
The RFS is working for farmers. Increased demand for biodiesel feedstocks has added value to
Iowa soybeans, Iowa corn, Iowa cattle, Iowa hogs and Iowa poultry, plus increased farmer
productivity and profitability while saving U.S. taxpayers tens of billions of dollars in Farm Bill
payments that are no longer necessary. At Western Dubuque Biodiesel, we are proud to produce
biodiesel from feedstocks grown by local farmers, who are the leaders and lifeblood of our
communities. Agricultural and rural career opportunities have increased dramatically since the
RFS went into place, which is allowing the best and brightest of our local youth to pursue careers
in rural America. [EPA-HQ-OAR-2015-0111-1961-A1 p.2]
Mass Comment Campaign sponsored by National Corn Growers Association (NCGA) -
(24,661)
With a record corn harvest, corn prices are on the way down, and your proposal can make or
break a farm and cause havoc in upcoming planting decisions. [EPA-HQ-OAR-2015-0111-3475-
Alp.l]
In fact, the cost of growing continues to increase and the price of corn is now below the cost of
production. If corn prices were to drop to $3.50 a bushel, for example, farmers and the rural
economy would lose of $10 billion. A shock like this to agriculture markets would be
particularly unwelcome given the unsettled and uncertain future of the farm bill. [EPA-HQ-
OAR-2015-0111-3475-A1 p.l]
Mass Comment Campaign sponsored by POET Bio-refining 1 (paper) - (692) 50
The impact that the RFS has had on production agriculture cannot be overstated. Since its
original enactment in 2005,1 have witnessed firsthand the positive impact on my local economy
- particularly my own family business. We have sold more equipment and increased our
workforce more than ever. [EPA-HQ-OAR-2015-0111-2963-A 1, p.7]
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Mass Comment Campaign submitted by employees of Siouxland Energy Cooperative (web)
-(30)
The RFS is working for farmers. Increased demand for corn for ethanol production has added
value to Iowa corn, increasing farmer productivity and profitability while saving U.S. taxpayers
tens of billions of dollars in Farm Bill payments that are no longer necessary. At Siouxland
Energy, we are proud to buy corn from local farmers, who are the leaders and lifeblood of our
communities. Agricultural and rural career opportunities have increased dramatically since the
RFS went into place, allowing the best and brightest of our youth to pursue careers on the farm
and keep their talents in rural America. [EPA-HQ-OAR-2015-0111-1960-A1 p.2]
Minnesota Corn Growers Association (MCGA)
Over 11,000 corn farmers grow and supply corn to Minnesota's ethanol industry. From 2000-11,
ethanol added an average of $2.11 in value per bushel. Improved corn prices meant more
economic activity in rural areas and a ripple effect throughout the entire agricultural economy
that had an impact in the Twin Cities and non-farming areas. [EPA-HQ-OAR-2015-0111-1920-
Al,p.2]
Minnesota Farm Bureau
If the Proposed Rule is finalized as written, it will stall growth and progress in renewable fuels as
well as the broader agricultural economy. [EPA-HQ-OAR-2015-Oil 1-2263-Al p. 1]
Minnesota Farm Bureau's membership is made up of all types of farmers, and a reduction in the
RFS2 will also impact the livestock industry. Livestock producers have come to rely on distillers
dried grains (DDGs), a feed by-product generated from ethanol production. DDGs are commonly
used as a valuable piece in livestock ration for dairy, beef, hogs and poultry - all of which are big
pieces of Minnesota agriculture. Each bushel of corn taken to an ethanol plant generates
approximately 2.8 gallons of ethanol while also generating between 17 to 18 pounds of DDGs,
adding a critical protein option for livestock farmers. [EPA-HQ-OAR-2015-0111-2263-Al p. 2]
Monsanto
Each year; the agricultural sector invests over seven billion dollars to improve the productivity
and reduce the required resources to feed, clothe and fuel a growing population. Our company is
a significant part of that investment, and our mission focuses solely on agriculture. What we
know is that agriculture is the heart of many communities across the U.S. What drives
agriculture, and economic growth of so many of these communities, is the value and demand for
the crops U.S. farmers work hard to produce. In today's agricultural economy, now is a critical
time for our government to find ways to increase the demand for the crops U.S. farmers are
producing, not reduce targets that do the opposite. Our R&D commitments are long term
investments, and these investment helps ensure the American farmer will continue to produce
enough to meet all demands. And with increased productivity, we continue to help improve the
environmental profile of corn and corn based ethanol. [EPA-HQ-OAR-2015-0111-1945-A1 p.l]
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National Association of Charterboat Operators
Ethanol production also displaces the growth of important food crops and inflates food prices.
[EPA-HQ-OAR-2015-0111-1812-Alp.2]
National Biodiesel Board
Even as biodiesel reached record production in 2013, it significantly diversified its feedstocks
with a positive impact on a variety of sectors including livestock, restaurants and even municipal
infrastructure. Testimony before EPA at the Public Hearing indicates that "feedstock production
costs are at their lowest levels in recent history" and are projected to "remain stable" even if the
biomass-based diesel volume requirement was increased to 2.4 billion in 2016. Testimony of
Alan Weber, MARC-IV Consulting, Inc. (EPA-HQ-OAR-2015-0111-0996). [EPA-HQ-OAR-
2015-0111-1953-A2 p.72-73]
While providing benefits to the rural economy, increasing production of biomass-based diesel
simply has not been shown to result in increased food prices. EPA predicted a 3 cent per pound
increase in the cost of soybean oil—when increasing the program 280 million gallons. 77 Fed.
Reg. at 59,459. Instead the program grew to almost 1.8 billion gallons in 2013 and the cost of
feedstocks has decreased. The NBB has kept track of daily SBO prices beginning on January 2,
2008. In 2008, SBO prices maxed at 67.82 cents per pound on March 3. As of July 13, 2015,
SBO prices were at about 32 cents per pound. In 2008, the biodiesel industry produced some 691
million gallons, while production is now more than double that amount. [EPA-HQ-OAR-2015-
0111-1953-A2p.73-74]
A study by LMC International shows more than adequate feedstock. LMC International, Current
and Future Supply of Biodiesel Feedstocks, July 2015 (Attachment 14). Estimates are that there
is more than adequate feedstock to meet global demand and to support 7.6 billion gallons of
biodiesel in 2015; and by 2020, there is still likely to be sufficient feedstock to support at least
8.5 billion gallons of biodiesel. Thus, the biomass-based diesel industry can continue to
contribute significantly and meaningfully into the RFS2 program. [EPA-HQ-OAR-2015-0111-
1953-A2p.ll6]
National Chicken Council (NCC)
Furthermore, the volume of ethanol "actually produced and used" in 2014 represents an increase
from the levels that EPA originally proposed in its November 2013 Notice of Proposed
Rulemaking (NPRM). This was to be expected based on EPA's actions. Within a few months of
releasing the NPRM, several public comments made by EPA officials indicated that the agency
ultimately would raise the required volumes for biofuels in the final rule. These comments were
a very strong signal to ethanol producers to increase production beyond the levels suggested by
the NPRM. This was a message which ethanol producers heeded. Later in the process, EPA
communicated to the market that the re-issued 2014 volumes would be driven by the latest
contemporaneous data, providing an economic backstop to the ethanol sector's continued
production.3 [EPA-HQ-OAR-2015-0111-1814-A1 p.3]
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Among other impacts, this assurance that production and use would be accommodated catalyzed
the increased export levels of ethanol. While increased exports of ethanol do put upward pressure
on corn prices, they do nothing to improve domestic energy independence as is the stated goal of
the EISA legislation. [EPA-HQ-OAR-2015-0111-1814-A1 p.3]
According to the EIA,
Given the uncertainty surrounding Renewable Fuel Standard (RFS) targets and the lack of
significant demand for higher ethanol blends in 2014, the growth in ethanol output had two
primary outlets: it can either be blended into domestic gasoline or it can be exported. ...
Additional volumes of ethanol beyond requirements for E10 blending and relatively small
volumes used in higher ethanol blends such as E85 were exported in 2014. [EPA-HQ-OAR-
2015-0111-1814-Alp.3]
EIA calculated 2014 ethanol exports at 826 million gallons, an increase of 33 percent over 2013.
This amount of ethanol represents an additional 295 million bushels of corn diverted from the
feed market beyond the utilization of corn by ethanol manufacturing to comply with the domestic
fuel mandates of the RFS. This diversion is due, in part, to the impact of the RFS. [EPA-HQ-
OAR-2015-0111-1814-A1 p.3]
As EIA further noted:
Given the existing ethanol production capacity coupled with the ongoing constraints for blending
ethanol into domestic gasoline, the United States likely will continue to remain a strong exporter
of ethanol in 2015. Ultimately, the key drivers for ethanol exports this year are the finalized
levels of RFS targets for 2014 and 2015, future corn crop yields, and ethanol producer
profitability. [EPA-HQ-OAR-2015-0111-1814-A1 p.3-4]
Indeed, through the first five months of 2015, ethanol exports are on pace to exceed 900 million
gallons, which would represent more than 320 million bushels of corn diverted from the feed
market in addition to that diverted by the domestic supply of ethanol. [EPA-HQ-OAR-2015-
0111-1814-A1 p.4]
When Congress set the 15 billion gallon cap on corn ethanol under the RFS, it did so to prevent
ethanol production from diverting too great a volume of corn from the feed, food, seed, and
industrial market for energy. With the increased required volume obligation for 2016 proposed at
14 billion gallons, and the projected trend in ethanol exports, conventional corn ethanol
production will likely exceed 15 billion gallons in 2016. [EPA-HQ-OAR-2015-0111-1814-A1
p.4]
As the Congressional Research Service has noted, implicit in the RFS there is:
considerable uncertainty regarding potential spillover effects in other markets and on other
important policy goals. Emerging resource constraints related to the rapid expansion of U.S. corn
ethanol production have provoked questions about its long-run sustainability and the possibility
of unintended consequences in other markets [EPA-HQ-OAR-2015-0111-1814-A1 p.4]
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The rapid rise in ethanol exports is indeed a spillover effect that applies further pressure on the
corn and feed market beyond Congressional intent under the RFS and is an urgent emerging
resource constraint. [EPA-HQ-OAR-2015-0111-1814-A1 p.4]
The diversion of corn into ethanol production, when mandated by the RFS or influenced by the
RFS regulatory process as it was in 2014 absent final regulations, has created an uneven playing
field for chicken companies to compete for necessary feedstuffs. Corn is the primary feed
ingredient for the poultry industry. Since the RFS was enacted, chicken companies have faced
more than $50 billion in higher actual feed costs due to the RFS. [EPA-HQ-OAR-2015-0111-
1814-A1 p.4]
In short, the RFS provides ethanol mills with an advantage in buying corn, especially when there
is some other economic shock to the market, like drought in previous years, or the flooding that
has impacted corn prices so far this year. When EPA proposed the 2015 and 2016 required
volume obligations on May 29, according to the USDA's May 2015 World Agricultural Supply
and Demand Estimates (WASDE) report, the average marketing year corn price was forecast to
be in a range between $3.20 and $3.80 per bushel, with 5.2 billion bushels of corn forecast to be
used by ethanol production and 5.3 billion bushels to be used for feed and residual use. Since
then, the July 2015 WASDE report reduced by 100 million bushels the projected corn crop
production and adjusted the utilization by increasing the forecast ethanol use of corn to 5.225
billion bushels and reducing the feed demand for corn to 5.275 billion bushels based on an
increase in the average marketing year corn price of $3.45 to $4.05 per bushel. These figures
illustrate the dramatic advantage the RFS provides to the ethanol industry at the expense of other
corn users, particularly when other factors drive up the price of corn. [EPA-HQ-OAR-2015-
0111-1814-A1 p.5-6]
Establishing a volume that exceeds the blend wall would increase the value of RINs, which
would impact gasoline prices and make ethanol's demand for corn more inelastic causing an
increase in corn prices and shorting the feed market of corn. [EPA-HQ-OAR-2015-0111-1814-
Al p.8]
2 Comments of Administrator Gina McCarthy, National Association of State Departments of Agriculture 2014
Winter Policy Conference, February 2014, http://www.fuelsnews.com/renewables-weekly-4/.
3 Comments of Administrator Gina McCarthy, North American Agricultural Journalists 61st Annual Meeting, April
2014.
National Corn Growers Association (NCGA)
The RFS increased the demand for corn, and farmers responded. Corn kept up with demand in all
other categories namely, feed (for animals), exports and 'other,' which includes human food,
high fructose corn syrup and non-food uses. Following the 2012 drought, all major market
sectors reduced corn usage as the market rationed the reduced corn supply. The market that
experienced the most significant decline was the export market. However, this did not lead to
global corn shortages, as major importers switched to corn imports from our major competitors.
Likewise, U.S. livestock industry imported more than 162 million bushels of corn to meet
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demand. These import levels have not been seen since previous droughts in the 1930s. Through
it all, the market worked as predicted, and farmers responded by producing a corn crop to meet
demand and rebuild stocks. [EPA-HQ-OAR-2015-0111-1939-A1 p.11-12]
National Council of Chain Restaurants (NCCR)
Chain restaurants are largely owned and operated by tens of thousands of small business
franchisees, many of whom have one, two, or a small handful of individual restaurant locations.
These small business franchisees are often family-run enterprises, are the very picture of small
business in America and give back to their communities through charitable donations to local
good causes, and they serve as popular gathering places for family events, special occasions.
[EPA-HQ-OAR-2015-0111-2258-A1 p. 1]
Chain restaurants serve countless meals around the country, from small towns to big cities and
locations in between every single day. In recent years, their food commodity costs have
increased dramatically; a development which coincides with the enactment and implementation
of the Renewable Fuel Standard. These higher food commodity prices are not unique to chain
restaurants, but have been experienced by nearly every entity along the food chain, from poultry
and livestock farmers on one end of the chain to chain restaurants and other retail food outlets on
the other. [EPA-HQ-OAR-2015-0111-2258-A1 p. 1]
NCCR convened stakeholders in the food supply chain that, along with small business chain
restaurants, have unfairly suffered under the RFS mandate. Working with these stakeholders, we
launched a campaign to inform policymakers about the numerous ways in which the RFS
imposes costs to food chain small businesses. Our initiative, "Take RFS off the Menu," has a
website (www.RFSOfftheMenu.org) which provides important and timely information about
how the RFS raises food commodity prices for small business and consumers alike. [EPA-HQ-
OAR-2015-0111-2258-A1 p. 1]
Relevant research and studies by entities including the Congressional Budget Office, USDA
Economic Research Service, Congressional Research Service, World Bank and National
Research Council have all implicated the RFS in the sustained climb and continuing volatility in
food commodity prices. Moreover, numerous academic studies have done the same. The
attached RFS Off the Menu document, "The RFS and Rising Food Costs" details this research.
[EPA-HQ-OAR-2015-0111-2258-A1 p. 2]
Although the public domain is replete with evidence that the RFS is, in fact, a significant factor
contributing to higher food commodity prices, NCCR endeavored to determine the extent to
which this is the case specifically for chain restaurants. NCCR commissioned the independent
firm of PricewaterhouseCoopers (PwC) to thoroughly examine this issue. PwC reviewed
existing private sector, academic, and government studies on the impacts of the RFS mandate on
ethanol production and the price of corn and other commodities. They then combined these
estimates with survey information on commodity purchases by chain restaurants to estimate the
overall impact of the RFS on chain restaurant input costs. [EPA-HQ-OAR-2015-0111-2258-A1
p. 2]
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PwC issued its findings in a report released in November 2012 entitled "Federal Ethanol Policies
and Chain Restaurant Food Costs." The full report is available here
(https://nrfcom/sites/default/files/Documents/Federal%20Ethanol%20Policies%20and%20Chain
%20Restaurant%20Food%20Costs.pdf) and on our website at www.rfsoffthemenu.org. [EPA-
HQ-OAR-2015-0111-2258-A1 p. 2]
PwC concluded that the conventional portion of the RFS mandate, when fully implemented in
2015, will raise chain restaurant food costs by up to $3.2 billion dollars a year, every year. That
estimate is prospective from 2015 onward - it does not include all the years that the RFS has
been in effect since its enactment. A summary of the PwC report's findings is included in the
attached Feed Food Fairness document "PwC Study: Key Findings." [EPA-HQ-OAR-2015-
0111-2258-A1 p. 2]
In addition to its estimate of the RFS' costs to chain restaurants industry-wide, PwC also
estimated the impact on a unit franchise basis. For a typical quick service chain restaurant
franchise unit (one restaurant), the RFS is estimated to raise food costs by about 10% per year, or
$18,000. For a typical casual dining restaurant, the PwC estimate is 9%, or about $17,000.
These are not insignificant sums, taking into account operating costs for restaurants, narrow
margins which are typical for the industry, and an extremely competitive consumer market.
[EPA-HQ-OAR-2015-0111-2258-A1 p. 2]
For the economy as a whole, PwC's findings are remarkable and concerning. If the RFS policy
remains in effect unchanged, PwC estimated that by 2015 the mandate will result in the
following percentage price increases for several key commodities: corn, 26.8%; soybeans,
15.7%; pork, 15%; potatoes, 13%; wheat, 12.1%; eggs, 11.2%; poultry, 7.7%; beef, 7.5%. The
attached infographic displays the results in vivid terms. In addition, PwC estimates that the RFS
will result in the production of an additional 6 billion gallons of ethanol which otherwise would
not be produced in the absence of the mandate. [EPA-HQ-OAR-2015-0111-2258-A1 p. 2]
To provide an example and bring these numbers into perspective, consider the experience of one
individual chain restaurant franchisee. Ed Anderson testified before the House Energy &
Commerce Subcommittee on Energy & Power in July 2013. At the time, he owned and operated
four Wendy's restaurants in Virginia. He estimated that the RFS costs his restaurants up to
$30,000 per year, per location. For his four Wendy's restaurants, that's $120,000 a year in
higher food costs, which is money that the Andersons are not able to use for their business.
Unfortunately, the Anderson's experience with the RFS is all-too-common. [EPA-HQ-OAR-
2015-0111-2258-A1 p. 2-3]
In recent years the proportion of the nation's corn crop which has been diverted from its
traditional use as feed in animal agriculture has hovered around 40%, and has been as high as
42% by some estimates. The Agency now proposes to raise the conventional biofuel mandate -
filled almost exclusively by corn - for both 2015 and 2016, including a rather dramatic increase
of some 600 million gallons in 2016. It is difficult to see how this requirement can be met
without consuming an even greater proportion of U.S. corn output, especially given the fact that
very little available arable land for corn and soybeans production is not already in use. Couple
this with the fact that recent years have seen record yields for corn, and near perfect weather
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conditions. An off-year for corn production, caused by drought or other less-than-perfect weather
conditions, could result in proportions well beyond 40% of the nation's corn yield diverted from
feed and food use to the production of corn ethanol. In short, the proposed volumes will continue
to provide incentives to overplant corn, which will unfortunately continue the distortions in food
commodity costs that have existed since the enactment of the RFS. These distortions have
caused the price of a bushel of corn to skyrocket by as much as 300% in recent years. [EPA-HQ-
OAR-2015-0111-2258-A1 p. 3]
It is important to note the distinction between producer prices of food commodities and the
corresponding costs that retailers in the food chain must bear, versus consumer prices for food
purchased in foodservice establishments and retail grocery markets. Advocates for the ethanol
industry contend that the average consumer has not experienced higher food prices as a result of
the RFS. Although this is not true - the average U.S. family of four faced a $2000 increase in
food costs in 2013 as a result of higher corn prices - the higher food prices experienced by
consumers pales in comparison to those suffered by businesses — many small — in the food
chain. Poultry and livestock farmers, food processors and food retailers such as restaurants have
borne the brunt of higher food commodity prices caused by the RFS since its enactment. Due to
competitive pressures and the weak economy of recent years, these farmers and businesses have
not been able to pass along these higher costs to consumers. As a result, retail food prices for
consumers have risen far less than have producer and wholesale food commodity prices
exacerbating already tight margins facing small business chain restaurant owners. [EPA-HQ-
OAR-2015-0111-2258-A1 p. 3]
For example, the wholesale price - the price paid by food retail businesses - of the key proteins
beef, pork and chicken have doubled and tripled since the RFS took effect. In the case of beef,
the annual wholesale price has risen from an average of 2.9% per year before the RFS to 9.3%
since the RFS was enacted. This represents a 320% increase in the span of a few short years. For
pork, the annual average wholesale price increase rose from 2.1% a year to 5.5%. The attached
infographic, also found online here (http://rfsoffthemenu.org/sites/default/files/RFS-2015-
Infographic_print.pdf), clearly illustrates the dramatic increase in wholesale food prices since the
RFS' inception. [EPA-HQ-OAR-2015-0111-2258 p. 3-4]
National Farmers Union (NFU)
From Ohio Farmers Union, Docket number EPA-HQ-OAR-2015-0111-2261-A1:
I am a farmer from Fremont, Ohio. Since college, I have spent my entire career farming and
involved in issues of public policy that involves Ohio's family farmers. I am one of Ohio's 3,400
farmers who markets some or all of their harvest to ethanol producers. Agriculture is Ohio's
largest industry and ethanol is a large part of that economy. [EPA-HQ-OAR-2015-0111-2261-A1
p. 1]
Most important is the impact the ethanol industries have on Ohio farmers. For many years the
federal government provided direct payments to farmers. Ethanol and biodiesel now give farmers
an alternative to the path of government-subsistence. The over 3,400 farmers who deliver corn to
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ethanol plants get the true value for their products, reducing the need for farmer subsidies. [EPA-
HQ-OAR-2015-0111-2261-A1 p. 1]
From Ohio Farmers Union, Docket number EPA-HQ-OAR-2015-0111-2475-A1:
Our state is currently home to seven ethanol plants that buy corn from approximately 3,400
farmers and use it to produce ethanol fuel that blends in gasoline and food for livestock. Ohio's
ethanol industry is a key economic driver providing good jobs at ethanol plants and a broader
market for farmers. The United States gets less dependent all the time on imports from foreign
oil producers. While a great deal of attention is currently paid to the rejuvenation of the nation's
and Ohio's oil and gas industry; the fact is that farmers - partnering with ethanol producers have
helped our state and nation down the path toward U.S. energy independence. [EPA-HQ-OAR-
2015-0111-2475-A1 p. 1]
The RFS plays a key role. It provides the certainty and fuel market access that both the ethanol
and biodiesel industries need to keep growing. The oil industry has a one hundred year head start
on alternative fuels. They have used this advantage to create a monopoly on the fuel market and
discourage retailers from carrying new fuels. [EPA-HQ-OAR-2015-0111-2475-A1 p. 1]
Any major cutback in utilization of corn or soybeans would have a major impact on the
economy. The impact starts at the equipment manufacturing plants to the farm equipment
dealers, and seed sales. Farmers are currently buying less equipment and vehicles as a result of
the downturn of commodity prices. [EPA-HQ-OAR-2015-0111-2475-A1 p. 2]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 167.]
not consistent with the needs of production agriculture and rural America that is facing a
dramatic downturn in commodity prices for corn.
National Restaurant Association
While we commend the Environmental Protection Agency (EPA) for your continued focus on
improving our environment, we urge you to carefully examine the effects this rule will have on
consumers and small businesses. We are particularly concerned that the proposed rule will
increase the problematic effects of the RFS on the foodservice industry and lead to further
increases in food prices across the country. [EPA-HQ-OAR-2015-0111-2267-A1 p. 1]
The restaurant and foodservice industry is also the United States' second largest private-sector
employer and employs 14 million people or 10 percent of the U.S. workforce. In addition, the
industry generates more than $1.9 billion in sales on a typical day.l The restaurant industry is a
tremendous contributor to our economy and when the industry, as a whole, experiences
economic harm, so does our nation's economy. [EPA-HQ-OAR-2015-0111-2267-A1 p. 1]
With these facts in mind, we would like to provide comments on how this rule will affect our
industry and our economy. [EPA-HQ-OAR-2015-0111-2267-A1 p. 1]
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The restaurant industry supports efforts to reform the RFS, which research indicates, has
contributed to a significant increase in wholesale food costs. Approximately 40 percent of the
domestic corn crop is now being devoted to fuel production rather than food, which has driven
up food costs across the board for many food groups and restaurateurs. [EPA-HQ-OAR-2015-
0111-2267-A1 p. 2]
A vital component to food production in the United States is the availability and affordability of
corn. The use of corn and corn sweeteners, starch, and flour is extremely widespread and is
found in countless foods. It is also a vital feedstock for meat, poultry, and dairy production.
Therefore, when the cost of corn increases, the entire food chain is adversely affected. [EPA-
HQ-OAR-2015-0111-2267-A1 p. 2]
Since the RFS's inception, the price of corn has fluctuated dramatically and commodity and
wholesale food prices have been steadily increasing. This is in large part due to the corn ethanol
mandate. The mandate has created a market for fuel use of this feedstock that has tightened
supply margins and contributed to this rise in costs. [EPA-HQ-OAR-2015-0111-2267-A1 p. 2]
As with many other commodities that have seen greater price volatility, and tighter margins, the
more the use of the corn supply is conflicted by food and fuel price competition, the more we
expect this to continue to impact food prices. This is extremely problematic for an industry that
is very price competitive and impacted by consumer spending and confidence. [EPA-HQ-OAR-
2015-0111-2267-A1 p. 2]
For example, prices of all proteins have risen significant since the inception of the RFS. The
retail price of beef alone has risen more than 22% since 20082 and the United States Department
of Agriculture (USD A) projects mark prices for beef to continue to increase this year, even after
a substantial 23% increase in 2014.3 [EPA-HQ-OAR-2015-0111-2267-A1 p. 2]
In addition, a study conducted by PricewaterhouseCoopers found that since its inception, the
Renewable Fuel Standard's corn ethanol mandate has increased the demand for corn and raised
the prices of corn, feed, and other commodities.4 The report noted that these increases are then
passed on to restaurants through their purchases to these commodities. [EPA-HQ-OAR-2015-
0111-2267-A1 p. 3]
The study also projected that with the RFS in place, consumers could see price increases in many
food groups this year, including an increase of 26.8% in corn, 7.5% in beef, and 7.7 % in
poultry.5 [EPA-HQ-OAR-2015-0111-2267-A1 p. 3]
Additionally, the consumer price index for food also points to an increase in food prices over
core inflation. According to the Bureau of Labor Statistics, since the inception of the RFS, the
consumer price index for food has risen 28.2% compared with a 20% increase in core inflation.6
[EPA-HQ-OAR-2015-0111-2267-A1 p. 3]
Finally, according to EPA's own analysis on the impacts of the increased use of renewable fuels
under the RFS2 standards, 'the increased demand for U.S. agricultural products is expected to
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raise the overall commodity price structure, leading to an annual increase in the cost of food per
capita of about $10 by 2022, or over $3 billion"? [EPA-HQ-OAR-2015-0111-2267-A1 p. 3]
These types of price increases and distortions greatly impact our customers and are unsustainable
for our nation's restaurants and foodservice operations. [EPA-HQ-OAR-2015-0111-2267-A1 p.
3]
Lowering the ethanol mandate will benefit consumers and businesses alike by alleviating
increased costs, protecting against food price volatility, and reducing the harm that consumers
and businesses will continue to feel for years to come. [EPA-HQ-OAR-2015-0111-2267-A1 p. 3]
1 2015 Restaurant Industry Forecast, National Restaurant Association
2 USDA Economic Research Service, 'Choice beef values and spreads and the all-fresh retail value,' July 22, 2014.
3 2015 Restaurant Industry Forecast, National Restaurant Association based on USD A, December 2014 projections.
4 Federal Ethanol Policies and Chain Restaurant Food Costs,' PricewaterhouseCoopers study, November 2012.
5 Id.
6 Bureau of Labor Statistics, CP1, U.S. City Average, Food, Jan 2005 — Jan 2014.
7 EPA, 'Renewable Fuel Standard Program (RFS2) Regulatory Impact Analysis,' Assessment and Standards
Division, Office of Transportation and Air Quality, EPA-420-R-10-006, February 2010.
National Sorghum Producers
Reductions would be a tremendous setback to the production of sorghum-based advanced
ethanol. Sorghum is the first commercial-scale feedstock that can be used to produce advanced
ethanol in the U.S. Relying on foreign ethanol is anathema to the concept of American energy
independence, and sorghum provides a homegrown solution. All in a single species, sorghum is a
source of starch, sugar and cellulose. In addition to grain sorghum's use in advanced ethanol
production, high biomass sorghum can be used to produce cellulosic ethanol. The cellulosic
ethanol industry has finally overcome the technology barriers standing in its way, and 46 million
gallons of the fuel have already been produced in 2015. With commercial-scale production
finally underway, it would be imprudent to inject policy uncertainty into the market. [EPA-HQ-
OAR-2015-0111-1914-A1, pp. 1-2]
National Taxpayers Union (NTU)
Corn ethanol production diverts 40 percent of the corn crop into fuel. This increases the prices of
feed for livestock such as poultry, pork, and dairy - costs that are necessarily passed onto the
consumer. According to the Environmental Working Group, the corn ethanol mandate has been a
factor in the closure of more than 60,000 pork, poultry, and beef operations since 2007. [EPA-
HQ-OAR-2015-0111-3279-A1 p.2]
A government-guaranteed market for one product artificially increases its value, making
formerly marginal land worth the labor necessary for even small yields and decreasing the
availability of land for other crops. This harms the environment and has led to higher prices for
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other food input commodities such as wheat and soybeans. [EPA-HQ-OAR-2015-0111-3279-A1
p.2]
Nestle
We are concerned that even the limited growth EPA contemplates in the requirements for
conventional (corn-based) ethanol ignore certain negative impacts of diverting a food and feed
crop for fuel. This massive diversion affects every purchaser of grains and oilseeds. Just within
our own company, Nestle Purina PetCare incurs tens of millions of dollars each year in
additional costs for ingredients due to the Renewable Fuel Standard and its associated ethanol
mandates. [EPA-HQ-OAR-2015-0111-1918-A1 p.l]
Diversion of Food and Feed Crops to Fuel
Concerns about ethanol's impact on commodity and food prices have been muted recently
because corn prices are lower than in earlier years. However, the underlying issue has not
changed: To meet energy and environmental goals, our nation is consciously diverting nearly
40% of the 2015/16 corn crop to ethanol. This quantity of corn - an estimated 5.2 billion bushels
- is by definition unavailable for domestic use to help produce meat, milk or eggs, or for export
to other countries, including developing nations. [EPA-HQ-OAR-2015-0111-1918-A1 p.3]
Nor is the impact of the RFS limited to corn markets. The separate biodiesel mandate obviously
has an impact on prices in the soy complex: In 2015/16, 24% of all U.S. soybean oil output will
be used for biodiesel. Now, EPA is proposing biodiesel mandates which are higher than the
minimum specified in the Clean Air Act, and is moreover stipulating these mandates for an
additional year, into 2017. Although it is true that biodiesel is not constrained by the E10
blendwall, the principle of diversion away from food use is the same: U.S. policy deliberately
withholds soybean oil that would otherwise be consumed by people, and diverts it into fuel. The
difficulty of foreseeing soybean market conditions a full two years ahead should make EPA
cautious about extending mandates in this fashion.[EPA-HQ-OAR-2015-0111-1918-A1 p.3-4]
Commodity Price Linkages
An additional, and often unrecognized, consequence of the RFS is to tie the prices of otherwise-
unrelated commodities together to a greater degree than would otherwise be the case. The price
of corn will reflect, in part, the demand for, and usage of, ethanol. Ethanol demand is in turn
related to the incentive to blend ethanol into gasoline: Blenders have an incentive to use more
ethanol (subject to applicable limits) when the price of ethanol is lower than the comparable
gasoline price. The gasoline price is largely a function of oil prices. This means that as oil prices
rise, ethanol prices can trade higher without losing the blending incentive, increasing the
profitability and demand for ethanol, and therefore the fuel's 'pull' on the corn crop. Other
things equal, this means a higher corn price. To be sure, corn and petroleum prices already have
some tendency to move together because both are traded in dollars and will tend to move in
some relation to changes in the dollar's value. But biofuels policy has provided an additional
linkage, as a number of economic studies have demonstrated, and this linkage could also be
extended to soy complex and wheat prices. Whether the price linkage is a good or bad thing for
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the national interest has never been seriously debated, whether as part of energy or agricultural
policy. [EPA-HQ-OAR-2015-0111-1918-A1 p.4]
NH Energy Forum
Although I am a strong proponent of protecting the environment, increasing ethanol mandates
have driven up food prices and dedicated crops and/or land to generate energy instead of food. It
is no wonder that restaurant associations, grocers, producers of poultry, pork and beef,
environmental non-profits and anti-hunger groups are also speaking out against increased ethanol
mandates.
The elderly community, containing some of society's most vulnerable members, has been
adversely affected and harmed by these ethanol mandates that have caused food prices to
increase. While the elderly continue to live off of a fixed income, they continue to see their
grocery bills get higher and higher each week. [EPA-HQ-OAR-2015-0111-0281-A1 p. 1]
North Dakota Corn Growers Association (NDCGA), et al.,
Farmers in North Dakota have invested to provide an affordable and consistent supply of high
quality corn for customers. This investment includes modernization and update of farm
equipment, drying facilities, and storage and handling facilities. Reducing the RVO at this time
will cause an artificial over supply created by government policy. This policy change will likely
take the market price of corn in ND well below the cost of production. [EPA-HQ-OAR-2015-
0111-2541-A2p.l]
I would like to share how corn growers from North Dakota have spent check off dollars in the
effort to continue to meet the demands from the market place. Research dollars have been spent
to improve germplasm and a corn breeding program for northern grown corn. The improved
germplasm is commercialized through private seed companies and leads to higher yield corn
varieties suitable for this production area. We continue to improve our ability to grow more
bushels on an acre of land. [EPA-HQ-OAR-2015-0111-2541-A2 p.l]
We have also invested our research dollars into projects that demonstrate and educate how corn
can be grown with less environmental repercussions, including increasing water use efficiency
and nutrient use efficiency. [EPA-HQ-OAR-2015-0111-2541-A2 p. 1]
Many corn growers in this state are also members or patrons of a local cooperative that supplies
agricultural inputs and operates elevators. Reducing the RVOs at this time will decrease the
gross inputs and bushels through facilities owned by patrons, also leading to economic injury to
farmer patrons across this region. The farmer owned cooperatives have also modernized and
expanded all aspects of their business, including drying, storage, handling, and shipping
capabilities. [EPA-HQ-OAR-2015-0111-2541-A2 p. 1-2]
Many farmers from this state deliver directly to an ethanol plant, have purchased stock in an
ethanol plant, or both. These plants have a large appetite for corn, and we can continue to supply
these plants with high quality corn at a competitive and affordable price. The plants demand for
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corn helps improve the basis, giving farmers a slightly better net cash return per bushel sold in
the market place. It also diversifies our markets so that we are not crippled when the railroads
can't provide cars to ship, a major shipping waterway is closed or impaired, or the strong dollar
retards the ability of our international customers to source high quality corn from North America.
[EPA-HQ-OAR-2015-0111-2541-A2p.2]
We want to keep the ethanol plants grinding corn. The jobs associated with these plants are high
quality jobs spread across the entire corn belt. These jobs are not concentrated in areas like the
oil producing counties where costs of living is unaffordable and the demand for education and
services outpaces the supply of them. These are jobs where people can make a decent living in
the community their families have lived for several generations - they don't have to uproot their
families and move them to the Bakken oil patch. Keep the RVO statute and keep great paying
jobs all across the corn belt of this great county. [EPA-HQ-OAR-2015-0111-2541-A2 p.2]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 178-179.]
Secondly, ethanol production has allowed our farms to become more sustainable. We purchase
the high-protein wet distiller grains, or DDGs, a co-product of the ethanol production process, to
feed our cattle. DDGs are a high-quality and high-value feed product to our operation. The cattle
have allowed us to diversify our operation so that we are not exposed strictly to the risk of grain
market prices.
The manure from our feedlot fertilizes 1,000 of our crop acres. On these acres, we have
eliminated the need for phosphorous. We have also reduced our nitrogen and potassium needs.
The livestock manure has an increased - has also increased our soil organic matter.
North Dakota Farmers Union (NDFU)
When setting standards for the RFS, the goals for the program and the program's importance to
one our nation's most vital industries must be considered. The program: [EPA-HQ-OAR-2015-
0111-1916-A1 p. 1]
Provides sustainability of the food system. The RFS helps keep family farmers farming in two
distinct and important ways: it helps farmers avoid the most costly consequences of a changing
climate, and offers family farmers two consistent markets in which to sell their commodity.
[EPA-HQ-OAR-2015-0111-1916-A1 p. 1]
Northern Canola Growers Association
The U.S. biodiesel industry is an important market for canola producers, utilizing over one
billion pounds of canola oil in 2014. The use of canola as a feedstock is extremely important to
canola production in North Dakota as our state has the largest canola biodiesel production
facility in the U.S. Canola provides the sole feedstock option for this plant. North Dakota
produces approximately 85 percent of the nation's canola. [EPA-HQ-OAR-2015-0111-2036-A1
p.l]
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Furthermore, for canola and other farmers, a viable biodiesel industry helps maintain a link
between vegetable oil and energy values, creates a floor for commodity values, and serves as a
hedge against energy inflation. Continued growth in the biodiesel industry is needed to realize
and optimize these benefits, and that growth can be prompted by increasing the RFS volumes for
biomass-based diesel beyond the levels in the Proposed Rule. [EPA-HQ-OAR-2015-0111-2036-
Al p.1-2]
Ohio Corn & Wheat Growers Association
When the U.S. Congress finalized the RFS2 in 2007 and asked the U.S. Environmental
Protection Agency (EPA) to implement it, the U.S. entered into a partnership with all of the
grains farmers in America. Since 2007, the U.S. was set on a clear path to increase our use of
biofuels and the American farmer responded by getting to work on producing the feed-stocks
needed to support the coming biofuel growth. [EPA-HQ-OAR-2015-0111-1723-Al p.l]
Farmers invest millions of dollar every year into their farms to update their machinery, to consult
with crop experts, to search for the most up to date information and technology, continue to
upgrade all of their buildings and grain storage; all with the intent of becoming more efficient
and productive. These investments are driven in large part by the commitment by the American
farmer to meet the demands of all of their customers. We have never faced a production
challenge we did not meet, and do not intend for that to change. [EPA-HQ-OAR-2015-0111-
1723-Alp.l]
Renew Kansas
Consumers across the country have come to rely upon renewable fuels produced with American-
grown corn, sorghum, soybeans and biomass resources. For that reason, ethanol and next
generation biofuels are critical to the economy of farms, price stability in our domestic
commodity market, and the development of rural communities. Ethanol processing also creates a
high-protein dried distillers grain animal feed co-product which has become a necessary,
essential, and cost-effective input for the cattle and livestock industry.
Net farm income nationally has increased as a direct result of the RFS. The proposed rule,
however, would cut the renewable volume obligation for corn ethanol by 3.75 billion gallons
through 2016. This proposed target would lead to a decrease in domestic corn demand by nearly
1.5 billion bushels, placing intense negative pressure on corn commodity prices. The negative
impact of this price movement would be disproportionately felt not just by the corn farmers, but
by all of rural America. [EPA-HQ-OAR-2015-0111-1309-A1 p.3]
Senate of Pennsylvania
As a State Senator, I am concerned that increasing the ethanol ratio in gasoline wi 11 provide very
little benefit, while having serious consequences. Living in a country where we are blessed with
an abundance of resources to grow and raise our food, we cannot ignore the impact of these
decisions. In a year that has proven very straining for the agricultural industry, due to extreme
climate occurrences, many fanners are having difficulty raising enough corn to provide for their
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livestock. An increased ethanol ratio would further exacerbate this problem by using valuable
farmland for corn used in ethanol production, instead of food-producing crops, creating a supply
shortage thus driving up prices to feed livestock. Unfortunately, these factors will be a direct
detriment on agriculture, causing a major concern for both the producers and consumers. [EPA-
HQ-OAR-2015-0111-3447-A1 p. 1]
Smithfield Foods, Inc.
However, we do not support the Renewable Fuel Standard (RFS), which requires huge volumes
of corn to be processed into ethanol at ever-increasing volumes irrespective of market conditions.
Corn is the most important crop for American food producers and consumers, but the RFS
mandates that nearly half of it be used for fuel. The RFS drives up the price of corn, hurting our
farmers, our industry, and our customers, causing higher food prices for all consumers. [EPA-
HQ-OAR-2015-0111-2041-A1 p.2]
Impact of the RFS on Feed Prices, the Industry, and Smithfield Foods
The RFS diverts valuable food grains into fuel, artificially driving demand, reducing supply and
ultimately increasing the cost of food. The renewable fuel requirements of the Clean Air Act
section 21 l(o)(2)(B) demand that corn be purchased to meet statutory requirements for biofuels
production. The law requires an ever-increasing amount of ethanol be blended into fuel
irrespective of total fuel consumption, availability of feed stocks, or costs. Given that the
overwhelming majority of conventional biofuels are derived from corn starch ethanol, the RFS
creates enormous (and artificially high) demand for the American corn crop. According to the
July 10 USD A World Agriculture Supply and Demand Estimates, over 43 percent of the US corn
supply is used to produce ethanol.5 This makes ethanol the single greatest consumer of
American corn, and its statutory appetite is only increasing. [EPA-HQ-OAR-2015-0111-2041-
Al p.3]
At the same time that the RFS is mandating the diversion of corn to ethanol, supplies for corn are
variable, depending upon annual planting and yields. Although supplies have generally
increased, they have not kept pace with the demand of ethanol, leading to tighter stocks and
higher prices. The tightening supply runs up against the insatiable demand of RFS-mandated
ethanol, and the result is higher corn prices. Since the implementation of the RFS in 2005, data
shows an astounding increase in the price of corn. In a study on food costs, Dr. Thomas Elam, an
agricultural economist, demonstrated this trend over the seven-year period of the RFS. Based on
pricing data from USD A, Dr. Elam found corn prices exploded from less than $100 per metric
ton in 2005, to $300 per metric ton in 2012. 6 Moreover, the Congressional Budget Office
estimated that ethanol contributed between a 28-47 percent increase in the price of corn,? while
the Center for Agricultural and Rural Development (CARD) at Iowa State University projected
that a full waiver of the RFS in 2011 would have reduced the price of a bushel of corn by $1.48.8
[EPA-HQ-OAR-2015-0111-2041-Alp.3]
With more corn diverted towards ethanol than livestock farming, food producers and consumers
are left to deal with the consequences of tighter corn supplies, higher corn prices and higher feed
prices. Corn is the predominant grain in animal feed, and constitutes roughly 70 percent of the
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cost of bringing a hog to market weight. An increase in corn prices translates to higher feed
prices, which have an outsized influence on the success or failure of a livestock farm, given the
percentage of input costs feed represents. From 2007-2010, total pork industry losses were more
than $6 billion, and over 6,000 pork operations went out of business, despite record high hog
prices in 2009.9 When the price of corn is driven by the ethanol industry, livestock producers
lose. The RFS has put food producers out of business and left consumers paying more for their
food. [EPA-HQ-OAR-2015-0111-2041-A1 p.4]
Due to the magnitude of corn costs, not all costs can be absorbed by farmers, and consumers
have seen higher prices at the grocery store as a result. The consumer price index (CPI)
demonstrates the RFS's deleterious impact on food prices. Since 2007, the CPI for food has risen
19 percent, which is significantly higher the than the corresponding 12 percent increase in core
inflation. Even more drastic is the increase in CPI for meats, poultry, fish, and eggs, which has
increased by 31 percent since 2007.10 As illustrated, the CPI for food, especially meats, poultry,
fish, and eggs, has far surpassed core inflation since the start of the RFS. [EPA-HQ-OAR-2015-
0111-2041-A1 p.4]
In addition to the CPI data, the Congressional Budget Office found that ethanol production raises
prices for a 'wide variety of foods at the grocery store, ranging from corn syrup sweeteners
found in soft drinks to meat, dairy, and poultry products.' The CBO also found that the increased
demand in corn as a result of the RFS affects other crops, as farmers use more and more land for
corn and supply of these crops diminish. 11 Likewise, the Congressional Research Service found
that the RFS will raise annual food costs by $3 billion by 2022.12 These studies confirm what we
already knew: the RFS is increases the cost of food for all Americans. [EPA-HQ-OAR-2015-
0111-2041-A1 p.4]
5 United States Department of Agriculture. World Agriculture Supply and Demand Estimates. July 10, 2015.
http://www.usda.gov/oce/commodity/wasde/latest.pdf
6 Elam, Thomas. Food Costs are Eating American Family Budgets. FarmEconLLC, 2013.
7 United States Congressional Budget Office. Impact of Ethanol Use on Food Prices and Greenhouse-Gas
Emissions. Pg. 7. 2009.
.
8 Babcock, Bruce, et al. Costs and Benefits to Taxpayers, Consumers, and Producers from U.S. Ethanol Policies.
Iowa State University, Center for Agricultural and Rural Development (CARD), 2010.
9 National Pork Producers Council. Statement on the 'The Availability of Feed' to the US. House, Committee on
Agriculture, Subcommittee on Livestock, Diary, and Poultry. Livestock, Dairy & Poultry Sectors Air Concerns
About Tight Feed Grain Supplies Hearing, September 14, 2011.
10 United States Bureau of Labors Statistics. CPI Detailed Report: Data for February 2015. July 16, 2015.
http://www.bls.gov/cpi/cpidl502.pdf
1 llmpact of Ethanol Use on Food Prices and Greenhouse-Gas Emissions. Pp. 6
12 EPA, 'Renewable Fuel Standard Program (RFS2) Regulatory Impact Analysis,' Assessment and Standards
Division, Office of Transportation and Air Quality, EPA-420-R-10-006, February 2010.
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South Dakota Corn Growers Association
Currently, our state's family farmers are on track to grow another bumper crop. Those families
are faced with extremely tight margins as prices sit below the cost of production for many.
Cutting the corn ethanol volumes in the RFS will only further hurt those who have been
committed to growing the necessary feed stocks that have made the RFS a success. [EPA-HQ-
OAR-2015-0111-0269-A1 p.2]
South Dakota Farmers Union
In addition to the sustainability of the food system, climate change's impact on agriculture may
hazard the sustainability of American communities. Climate change, through its impact on
agriculture, places communities in harm's way because the consequences of climate change are
likely to be greater for family farmers than other agricultural producers. According to a report by
USD A, "Current climate change effects are challenging agricultural management and are likely
to require major adjustments in production practices over the next 30 years."3 The severity of the
necessary adjustments increases the likelihood that they will be expensive. In many cases, the
expense of farming in a changing climate will drive out family farmers with insufficient capital
or access to investors and bar new entrants from starting farm businesses by increasing the initial
investment needed, leaving their land available for farm consolidation. These major adjustments
will also require policy shifts that, if not executed carefully and equitably, may also place family
farmers at risk and encourage farm consolidation. [EPA-HQ-OAR-2015-0111-2358-A1 p. 1-2]
The loss of family farmers presents serious challenges to the economic sustainability of rural
communities. As farmers leave and farmland consolidates, businesses and community
institutions lose customers and tax revenue, weaken, and eventually close, causing other
institutions and businesses in the community to do the same. Rural residents are left without
access to critical services or jobs. To the extent that climate change contributes to this process, it
presents a serious environmental justice issue to family farmers and rural residents. The RFS
helps keep family farmers farming in two distinct and important ways: it contributes to climate
change mitigation, helping family farmers avoid the most costly consequences of climate change,
and offers family farmers direct value for helping build climate resiliency by stabilizing prices
for biofuel feedstocks and opening investment opportunities in biofuel plants. EPA would best
pursue these important goals by adjusting the proposed biofuel volume standards to match the
standards in the EISA. [EPA-HQ-OAR-2015-0111-2358-A1 p. 2]
In South Dakota where agriculture is the primary industry successful farmers and ranchers are
the backbone of the economy. The ethanol industry, has given new market options for agriculture
producers. A single bushel of field corn yields 2.8 gallons of fuel ethanol and 17.5 pounds of
high-protein distillers dried grain for livestock feed. [EPA-HQ-OAR-2015-0111-2358-A1 p. 2]
Ethanol is a renewable and cleaner fuels source. Ethanol and ethanol blended gasoline have
reduced greenhouse gas emissions. Every barrel of American-made ethanol produced directly
displaces 1.2 barrels of crude oil. Ethanol blended fuels at 30% or higher does not contain
Benzene. Benzene is a harmful chemical that is omitted through the tailpipe emissions of a
vehicle. There are no safe levels of Benzene. Ethanol contributes to cleaner air to breathe. The
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EPA has repeatedly said they are for clean air and clean water. Your job is to protect the
environment as the Environmental Protection Agency. Ethanol is a product that will aid in
cleaner air and a cleaner environment, but this proposal steps backward. Reducing the RFS will
not provide cleaner air. [EPA-HQ-OAR-2015-0111-2358-A1 p. 2]
Why are you doing this? Americans have a right to breathe clean air. [EPA-HQ-OAR-2015-
0111-2358-A1 p. 3]
3. Walthall, C.L., I, et all at 119.
South Dakota Soybean Association
As a soybean farmer, I recognize the positive impacts of biodiesel on the rural economy are
significant. Biodiesel not only provides a cleaner burning fuel for improved sustainability, but
also adds $0.74 per bushel to a farmer's bottom line. Agriculture is the backbone of the U.S.
economy, without it we would not be the great nation that we are today. [EPA-HQ-OAR-2015-
0111-1308-A1 p. 2]
State of Indiana
As Chair of the Indiana Senate Agriculture Committee, I know how important agriculture is to
our state. I also understand how important ethanol and biodiesel are to Indiana. Indiana farmers
grew the corn to produce nearly one billion gallons of ethanol last year. They also grow the
soybeans to produce 120 million gallons of soy biodiesel each year. Indiana's fourteen ethanol
plants and three biodiesel plants have provided a much-needed new market to farmers here in
Indiana. Ethanol plants used almost 370 billion bushels of corn in the production of ethanol. That
provides over $315 million in additional profits for Indiana farmers. Where would that crop go
and what would its price be without ethanol? [EPA-HQ-OAR-2015-0111-3347-A1 p.l]
Not only do these proposed volume levels hurt my constituents and the residents of this state, Pm
also a farm owner in southeastern Indiana. In both of my roles, I see the struggles our farmers
face every day. [EPA-HQ-OAR-2015-0111-3347-A1 p.l]
A recent Informa Economics study shows Indiana's ethanol industry has increased farmland
prices by an average of $52.50 per acre, resulting in an estimated $635 million in land value
appreciation, providing equity for farmers and rural residents. [EPA-HQ-OAR-2015-0111-3347-
Al p.2]
The dried distillers grains, or DDG's, have also helped provide our state's booming livestock
industry with a low-cost, healthy food option for their animals. [EPA-HQ-OAR-2015-0111-
3347-A1 p.2]
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State of Indiana House of Representatives
As the Chair of the Indiana House Agriculture and Rural Development Committee, I know how
important agriculture is to our state. I also understand how important ethanol and biodiesel are to
Indiana. Last year alone, Indiana farmers grew the corn to produce nearly one billion gallons of
ethanol. Indiana farmers also grow the soybeans to produce 120 million gallons of soy biodiesel
each year. Indiana's fourteen ethanol plants and three biodiesel plants have provided a much-
needed new market to farmers in our state. Ethanol plants used almost 370 billion bushels of
corn in the production of ethanol, which provides over $315 million in additional profits for
Indiana farmers. Where would that crop go and what would its price be without ethanol? [EPA-
HQ-OAR-2015-0111-3466-A1 p.l]
The EPA's proposed volume levels hurt my constituents and the residents of this state. As a state
representative and a farmer in West Central Indiana, I see firsthand from constituents and my
own farm how important biofuels are to our farmers and rural communities. [EPA-HQ-OAR-
2015-0111-3466-Alp.l]
A recent Informa Economics, Inc. study shows Indiana's ethanol industry has increased farmland
prices by an average of $52.50 per acre, resulting in an estimated $635 million in land value
appreciation, providing equity for farmers and rural residents. Additionally, dried distillers
grains, or DDG's, have helped provide our state's booming livestock industry with a low-cost,
healthy food option for feeding animals. [EPA-HQ-OAR-2015-0111-3466-A1 p.2]
State of Nebraska
Agriculture is Nebraska's number one industry, and ethanol is one of the key agricultural growth
industries that have added billions in revenue and thousands of jobs over the past decade to the
State. These efforts were undertaken to meet the commitment of this nation to renewable fuels as
established by the RFS. [EPA-HQ-OAR-2015-0111-1810-A1 p.l]
Nebraska is currently the nation's second largest producer of ethanol with 24 plants capable of
producing more than 2 billion gallons annually; a three-fold increase from the 566 million
gallons produced in 2005 before the RFS was established. These ethanol plants represent more
than $5 billion in capital investment in the state and supports 4,400 jobs including 1,300 direct
jobs. Ethanol is a vital commodity for Nebraska, and supports Nebraska's other leading
agricultural sectors, corn and livestock production. [EPA-HQ-OAR-2015-0111-1810-A1 p.l]
State of South Dakota
Agriculture is an integral part of South Dakota's economy. In fact, it is our largest industry,
generating more than $25.6 billion in economic activity in our state. Throughout the years, the
ethanol industry has become a large part of South Dakota agriculture's success story accounting
for up to $3.8 billion in economic impact. South Dakota is home to 15 ethanol plants with a total
annual production capacity of more than 1 billion gallons. According to a 2013 South Dakota
State University study, the industry directly employs more than 1,900 people with estimated
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average employee compensation in excess of $63,000. A recent Fuels America study put those
numbers even higher. [EPA-HQ-OAR-2015-0111-1919-A1 p.l]
The Andersons, Inc.
EPA's proposal would take away an important demand stimulus at a time when farmers need it
most. The end result would be lower farm income. [EPA-HQ-OAR-2015-0111-2509-A2 p.5]
U.S. Canola Association (USCA)
While it's difficult to isolate the net impact of biofuels on the agriculture sector, according to the
USD A Economic Research Service's Income Statement for the U.S. Farm Sector, from 2009
through 2013 - a period in which biofuel and biodiesel production increased - the U.S. farm
sector experienced an increase in cash receipts for both crops and livestock, farm related income,
gross cash income, and net cash income. Net farm income during this period more than doubled.
In addition, direct government payments to the farm sector decreased. There are greater factors
beyond biofuels that contributed to this success, but expanding biodiesel and other biofuel
production has had a positive impact on agricultural output and jobs, and a positive net impact on
the agriculture sector. [EPA-HQ-OAR-2015-0111-1819-A1 p.2]
Unilever
If the EPA promulgates a final rule in line with their current 2014/2015/2016 proposal, some
2.90 billion gallons of advanced biofuels will be required to enter the fuel stream this year, which
is on track with current projections. Of the 2.90 billion gallons of advanced biofuels, 1.28 billion
gallons would be biomass-based biodiesel - the majority of which is made of edible oil-based
biodiesel. In 2013, 70% of the advanced RFS was met through the use of biodiesel, of which
65% was virgin edible oils, such as soy and canola, this is a major concern for food companies as
the diversion of food to fuel is not sound policy.
Without the proposed short-term reductions from the original RVO mandates included in the
Energy Independence and Security Act of 2007 — and without longer-term reforms to the
mandates -we believe the program will continue to cause a diversion of edible soybean oil from
the food supply that will have significant negative impacts on U.S. and global food security.
According to the U.S. Soybean Board, soybean oil is a critical component of the food supply,
used in over 75% of all commercial U.S. food production. Soybean oil is commonly used for
baking and cooking and in foods such as dressings and spreads. Soybean oil is a benefit to food
producers and consumers because of its versatility, mildness and nutrition profile. Soybean oil is
high in poly- and monounsaturated fats, low in saturated fats, trans-fat-free and contains natural
antioxidants. It is the principal source of omega-3 fatty acids in the U.S. diet, and the primary
commercial source of vitamin E, according to the U.S. Soybean Board.
Currently, 25% of edible soybean oil on the U.S. market is diverted to biodiesel production, and
without program reforms the amount is likely to increase dramatically in coming years, which
would threaten the supply and affordability of edible soybean oil for food producers and
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consumers. If the statutory targets contained in the Energy Security and Independence Act of
2007 are maintained by the EPA in future years, by 2022, advanced biofuels must comprise at
least 21 billion gallons of the overall 36 billion gallon RFS mandate. This would, in extremis,
require 150% of the US soybean oil supply for biodiesel production by 2022. We believe a full
review of the 2007 Act is needed in order to set realistic assumptions for the stakeholders
involved.
The severe diversion of edible soybean oil to biodiesel production could result in more extreme
impacts as the U.S. increases its dependency on imported soybean oil from South America and
other markets. [EPA-HQ-OAR-2015-0111-2273-A2 p. 1-2]
Wisconsin Corn Growers Association (WCGA)
Corn-based ethanol is an important local market for Wisconsin corn. About 37 percent of
Wisconsin's corn crop (180 million bushels with a value of $738 million) is made into ethanol by
nine plants located in the state. Wisconsin's nine ethanol plants produce more than 500 million
gallons of ethanol. Wisconsin's ethanol industry has a $4.2 billion economic impact, supporting
19,080 jobs with $982 million in wages. [EPA-HQ-OAR-2015-0111-1830]
Wisconsin Farm Bureau Federation
We wish to register the adverse impact these proposed rules would have on agriculture and
Wisconsin's economy. [EPA-HQ-OAR-2015-0111-1716-A1 p. 1]
Response:
EPA received numerous comments related to the impact of the RFS RVOs on agricultural
commodities and prices (e.g., corn, soybeans, canola), as well as the various intermediate
products such as seed, livestock feed and food. These comments can generally be grouped into
two categories. The first category is from agricultural producers and agricultural input suppliers
(e.g., the American Farm Bureau Federation, Big River Resources LLC, Corn Producers
Association of Texas). These commenters argue for higher renewable fuels volumes in order to
boost agricultural commodity demand and, thereby, raise agricultural commodity prices. For
example, the American Farm Bureau Federation ("the Farm Bureau") suggests that USDA's cost
of production forecasts indicate that the breakeven cost of production for corn was roughly
$4.05/bushel for 2014. Currently, corn prices are roughly $3.60/bushel (Chicago Board of Trade,
Corn Futures Price, November, 23rd, 2015). In other words, they argue that current corn prices
are below the breakeven level, suggesting the corn growers are facing potentially serious, near-
term, economic difficulties. The Farm Bureau goes on to suggest that the national average cost of
production breakeven price for corn is at negative levels for the first time since 2005. The Farm
Bureau suggests that the same issue applies to soybeans as well. The Farm Bureau claims that
the recent decline in agricultural commodity prices, with input production costs remaining
relatively high, will likely reduce farm income by tens of billions of dollars in the 2015/2016
time frame. Given the large corn and soybean crops and low commodity prices, they argue that
now is not the time to reduce the demand for corn or soybeans with lower RFS RVOs, without
acknowledging the fact that EPA proposed (and has finalized) to increase RFS RVOs above
previous levels. While proposing to reduce RFS volumes below the unattainable statutory
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volumes, this is not a decrease relative to the current market conditions, as suggested by some
commenters.
Additional commenters, including state and local governments with large farming communities
and organizations that represent agricultural industry (e.g., Illinois Department of Agriculture,
South Dakota Farmers Union), also support higher RFS RVOs. For these stakeholders, higher
agricultural commodity prices increase income going to their communities/states/farmers. This
has multiple impacts besides directly increasing incomes of those involved with the production
of the affected agricultural commodities. For example, higher incomes of commodity producers
increase the amount of tax revenue that is generated for local communities and states. The
increased tax revenues, in turn, provide greater funding for schools, infrastructure, health care,
etc. In addition, greater demand for commodities supports indirect jobs and businesses that are
either a part of the supply chain (e.g., farming equipment manufacturers) or local businesses who
benefit generally from greater economic activity (e.g. restaurants, local banks, retailers).
Although EPA has not done an analysis of the overall impact on rural economies of this annual
volume standard, in the March 2010 RFS rule EPA found that increased renewable fuel volumes
will result in a modest increase in net U.S. farm income. Based on this, we would expect that the
volumes being finalized in this RFS rule would also have a positive impact on net farm income
in the U.S.
The above mentioned stakeholders advocate that EPA set RFS RVOs at statutory volumes to
sustain and increase these benefits. The same stakeholders warn that reductions from RFS
statutory volumes will have a depressing effect on farm incomes and, in turn, their
communities. Again, these comments fail to acknowledge the fact that the proposed RFS
volumes represented (and the final RFS volumes represent) considerable increases in renewable
fuel volumes above previous levels, not decreases. Since we do not consider the statutory
volumes attainable (and indeed we are setting the renewable fuel standard at the maximum
achievable level), we do not believe it is appropriate to attribute any perceived negative impact
on farm incomes and rural economies associated with levels of renewable fuel production below
the statutory volumes to EPA's decisions.
EPA also received a number of comments that argued for reductions in RFS RVOs because of
the adverse impacts higher commodity prices could cause. These commenters include livestock
and poultry associations (e.g., Smithfield Foods, Inc., National Chicken Council). For example,
the National Chicken Council suggests that higher input costs through feed prices will increase
the costs of raising chickens and increase food costs to the consumer.
EPA recognizes that increasing renewable fuel production from traditional feedstocks (e.g., corn,
soybeans, canola) can benefit some sectors of rural economies while having adverse impacts on
other sectors. While increased demand for agricultural feedstocks can provide benefits to rural
areas that grow the agricultural feedstocks, the industries that depend on agricultural feedstocks
(e.g., the livestock industry) may face higher input costs, which in turn can lower their
profitability.
An important factor to consider when discussing the impacts on the demand of a crop for
biofuels is feed co-products. For every extra bushel of corn demanded for food or ethanol use,
approximately 17 pounds of distiller dry grains (DDGS) is produced, which can be supplied into
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feed markets. Absent this co-product from ethanol production, much of this feed demand would
be met directly with corn. Therefore, any impact on corn prices due to changing demand for
ethanol will generally result in a lesser impact on the cost of feed. The same fundamentals are
true for soybean meal, a feed co-product that results from the soybean oil extraction process.
Also, greater production of biodiesel leads to greater volumes of soy meal, which can benefit
some livestock producers.
Several commenters such as restaurant groups (e.g., National Restaurant Association) raised
concerns that higher RFS RVOs will place an upward pressure on food prices. These
commenters claim that increasing renewable fuel volumes have driven up, and will continue to
drive up, food input prices that their businesses face. They also assert that higher food prices as a
result of the RFS are undesirable from a societal standpoint.
Alternatively, other commenters suggest that the proposed RFS renewable fuel volumes would
have little impact on food prices, citing various USDA studies and testimony. EPA has not
undertaken a formal analysis of the food cost impacts of the annual RFS 2014-2016 standards
and appreciates the input from all of these stakeholders.
In setting the total renewable fuel RFS standard, EPA only considered factors that inform the
determination of "inadequate domestic supply" under the general waiver authority and, there did
not consider impacts of the total renewable fuel standard on areas such as feed or food prices, or
on the rural economy generally. When lowering the advanced standard, EPA used the cellulosic
waiver authority so that a broader range of factors can be considered than in setting the total
standard. EPA has provided an explanation in Section II.B of the preamble and related sections
of this RTC of the factors that informed our exercise of the cellulosic waiver authority, taking
into consideration the nested nature of the standards and the fact that we view the total renewable
standard as the standard most likely to have impacts on these areas.
We considered these comments and believe that the agricultural sector impacts of this rule are
modest based on the analysis we did for the March 2010 final rule, and do not contribute to a
different result for the amount of reasonably attainable advanced biofuel that can be supplied.
We believe this for a number of reasons. One, the coproduction of DDGs with soybeans and
other feedstocks mitigate potential price impacts as these DDGs replace other primary feed
crops. Two, we believe the total renewable fuel volumes largely drive the amount of advanced
biofuel produced and, thus, we don't believe changes in the advanced standard are likely to have
significant direct impacts. Combined, EPA believes that these reasons support the conclusion
that the agricultural sector impacts associated with the advanced standard are modest and do not
warrant EPA requiring use of volumes other than reasonably attainable volumes of advanced
biofuel in setting the advanced biofuel standard.
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7.3 Fuels Industry Impacts (Oil Refineries, Biofuel Facilities)
Comment:
AL-Corn Clean Fuel; Badger State Ethanol; Big River Resources, LLC; Central Indiana
Ethanol (CIE); Commonwealth Agri-Energy, LLC; Husker Ag LLC; Pacific Ethanol, Inc.
EPA's proposal will undermine the confidence of lenders and creditors, resulting in restricted
access to capital.
Ethanol producers are constantly investing in new technologies to make their plants more
efficient and diversified. For example, over the past five years, roughly 85 percent of dry mill
ethanol plants have invested in technology to extract distillers corn oil, a high-value product used
as biodiesel feedstock or animal feed. Today, a number of plants are considering investment in
'bolt-on' technologies or process modifications to convert the cellulosic portion of the corn
kernel into cellulosic biofuel. EPA's proposal has already spooked credit markets and cast a
shadow of doubt over the soundness of future investments in biofuels. If finalized, the effects of
the rule will be even more acute, and access to capital will be severely restricted. EPA's rule will
not only affect access to credit for capacity expansions, new technologies and equipment, but it
would also hamper the ability to access operating capital. Our company is a farmer-owned
cooperative. We are at the point of needing to perform modernization and expansion, to remain
competitive and relevant in our industry. How do we explain EPA's actions to our owner
members? How does EPA's proposal give them any certainty in deciding to reinvest in our
facility and our industry? [EPA-HQ-OAR-2015-0111-1214-A2 p.4]
If finalized, the rule could have the following effects:
• Elimination of the incentive to invest in biofuel refueling infrastructure. EPA's
proposal would relieve oil companies from the requirement to blend amounts of
ethanol above the 'blend wall' in 2014-2016. As a result, REST prices would continue
to fall and the financial incentive to expand El 5, MLB and E85 infrastructure would
be virtually eliminated. [EPA-HQ-OAR-2015-0111-1214-A2 p.5]
• Increased risk of investment in advanced and cellulosic biofuels. EPA's proposal
sends a strong signal to the investment community that the commitment to biofuels of
all types is wavering. Further, the future of the advanced and cellulosic ethanol sector
depends in large part on an infrastructure network capable of bringing higher-level
ethanol blends to the consumer, the development of which is seriously threatened by
EPA's proposal.[EPA-HQ-OAR-2015-0111-1214-A2 p.5]
Americans for Prosperity
We are also concerned about the high cost of RFS compliance on small businesses, including
gasoline refiners and convenience stores, as we've heard earlier today. Refiners are forced to buy
expensive renewable identification numbers or face a fine, while service station owners are
forced to install expensive new equipment.
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Aventine Renewable Energy
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 354.]
Finally, another major consequence beyond demand destruction is capital investment. Why
would capital markets ever invest additional dollars in renewable energy in the United States of
America? Why would they ever do this?
Baker Commodities
Baker has been waiting for a consistent federal policy to materialize so that it can move forward
with a 10-20 million gallon per year biodiesel plant in Los Angeles County. It would be Baker's
intention to sell all or most of the ultra-low carbon biodiesel fuel produced at this plant into the
California market. Unfortunately, we are not convinced that the recent RFS Proposal will
provide us with the market certainty necessary to invest in the project. [EPA-HQ-OAR-2015-
0111-1907-A1 p.l]
BioEnergy R&D
The current proposals puts the further development of a US biofuels industry to a standstill rather
than securing the continued development of a clean, sustainable and affordable alternative fuel
produced on the field, farms and forests of the US. [EPA-HQ-OAR-2015-0111-0124-A1]
Butamax Advanced Biofuels, LLC
In addition to the decline in E85 sales volumes and the cancellation of infrastructure investment
projects, EPA's actions are likely to have a much greater adverse impact in terms of investment
in advanced biofuels technology. This has been estimated to have caused $13.7 billion in lost
investment in advanced biofuels capacity. Anecdotal evidence supporting this point has already
appeared in the press. The current NPRM continues to gives the industry no confidence that EPA
intends to enforce the legislation in line with the will of Congress, or will even set RVO targets
at a level that support market conditions consistent with renewable fuels growth. Without a
strong signal that EPA intends to set RVO's consistent with the will of Congress, it is inevitable
that investment in the sector will continue to decline materially. [EPA-HQ-OAR-2015-0111-
1938-A2p. 2]
Dakota Spirit AgEnergy
The impact that the RFS has had on ethanol plants and production cannot be overstated. Since its
original enactment in 2005,1 have witnessed firsthand the positive impact it has had on my local
economy and the plant I work at. In fact, it was directly due to the RFS that I have a job at the
Dakota Spirit AgEnergy plant today. As the RFS helped drive the use of renewable fuels such as
ethanol, the demand for production grew and I was able to seize the opportunity to work for a
good, solid wage, doing honorable work in support of my family and my country's growing
energy needs. [EPA-HQ-OAR-2015-0111-2057-A1 p.l]
Furthermore, if EPA and the government turn their backs on the production of current
conventional biofuels, it will have a devastating effect on the development and
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commercialization of next generation biofuels, such as cellulosic biofuel from agricultural waste.
[EPA-HQ-OAR-2015-0111-2057-Alp.l]
As you move forward in putting together a final rule, I hope you will consider the fallout that a
rule such as the one proposed would have on ethanol plants and employees who count on their
jobs at these facilities around the country. [EPA-HQ-OAR-2015-0111-2057-A1 p.2]
East Kansas Agri-Energy, LLC (EKAE)
East Kansas Agri Energy has continued to commit and invest in technologies and make
modifications to increase the efficiency of our production. As we look toward the future and next
generation fuels, such as cellulosic ethanol and other advanced Bio fuels, East Kansas Agri
Energy is very concerned about the message this proposal is sending future investment and rural
innovation. It will have the effect of stranding billions of dollars of private capital invested in the
United States by renewable fuel producers and related companies who have brought the industry
from infancy to commercialization in just 5 years based on the stability offered by the 15-year
policy adopted in law in 2007. In essence, it will increase, not decrease, the risk of investment in
low carbon cellulosic and advanced renewable fuel as well as renewable fuel infrastructure.
[EPA-HQ-OAR-2015-0111-2607-A2 p.2]
If adopted, the long term impact of this proposal on the RFS program would be significant. If
adopted, this change would permanently alter the RFS and set a dangerous precedent for future
RVO rulemakings, ensuring that the country never blends more renewable fuel than the oil
companies are comfortable using. It hands the key back to the oil sector, by allowing their own
decisions regarding infrastructure investment, fuel production, and renewable fuel blending to
dictate where EPA sets the targets. This change impacts all types of renewable fuel. [EPA-HQ-
OAR-2015-0111-2607-A2 p.3]
Adopt a bewildering approach to compliance: rewarding failure to install infrastructure necessary
to comply with environmental regulations by loosening the rules, resulting in environmental
backsliding under the Clean Air Act. [EPA-HQ-OAR-2015-0111-2607-A2 p.3]
When the RFS was established, it always envisioned ethanol blends above 10 percent-even with
decreasing gasoline consumption, but oil companies are doing everything they can to maintain
their stranglehold on the nation's fuel supply. With this flawed proposal, EPA is fundamentally
changing how the RFS works by putting the burden of fuel distribution on biofuel producers
rather than the oil refiners and integrated marketers who control 50 percent of the
convenience stores in this country. [EPA-HQ-OAR-2015-0111-2607-A2 p.3]
Energy Policy Research Foundation, Inc. (EPRINC)
EPA's states in the proposed rule that it intends to aggressively require higher volumes of
renewable fuels into the transportation fuels market above the blendwall. This regulatory strategy
might in fact succeed in increasing the volume of renewable fuels in the U.S. fuels market, but it
may very well come at a very high price. In the absence, of more detailed work estimating the
longer-term production cost of transportation fuels under the regulation, including a careful
assessment of price risks to American consumers, we would recommend a more cautious
approach. EPA may believe Obligated Parties will adjust to higher volumetric targets for
renewable fuels by incentivizing the use of E85, but a range of technical constraints and cost
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considerations may also see the adjustment take place through lower production of transportation
fuels (cuts in refinery runs), higher exports of petroleum products (not part of RVO requirement),
lower imports of petroleum products, or even greater production of fuels (jet fuel, etc.) which are
outside the RVO. Given the absence of a careful and detailed assessment of the longer-term
production cost of transportation fuels, and the likely price risks to U.S. consumers under the
volumetric mandates, we recommend EPA keep volumetric renewable fuel targets below the
blendwall until more careful assessments of the consequences of higher renewable fuel mandates
are fully evaluated. [EPA-HQ-OAR-2015-0111-1946-A1 p.6]
Environmental and Energy Study Institute (EESI)
Despite the oil industry's calls that maintaining the Renewable Fuel Standard will throw the U.S.
economy into a "death spiral" in 2013, the net economic effect of renewable fuels has been the
opposite - increased fuel diversity, reduced dependence on imported petroleum. [EPA-HQ-
OAR-2015-0111-1944-A1 p.5]
Governors' Biofuels Coalition
The ultimate losers under the proposed rule will be American consumers, farmers, and
alternative fuels, especially advanced fuels like biodiesel and cellulosic ethanol. Since advanced
fuels are still a growth industry, compared to the more mature corn ethanol industry, they will
feel the cuts first and most deeply. There has been remarkable progress in the development of
advanced fuels in the six years since the RFS2 was signed into law in 2009. Two commercial
scale cellulosic ethanol refineries have opened in the last year: POET DSM Project Liberty in
Iowa and Abengoa Bioenergy in Kansas. A DuPont plant in Iowa should be operational by the
end of this year. [EPA-HQ-OAR-2015-0111-2489-A1 p. 1-2]
But advanced biofuels are at a turning point. If the EPA does not change its interpretation of the
RFS2 for 2016 volumes, big ethanol companies will hesitate to build another cellulosic ethanol
plant in the United States. Instead, they will look to China, South America, and other regions that
have stable biofuels policies. In fact, DuPont announced recently that they will build no new
cellulosic ethanol production facilities in the United States because of "policy uncertainty."
Instead, they will license the innovative technology used at their Iowa plant to overseas
companies. [EPA-HQ-OAR-2015-0111-2489-A1 p.2]
Green Plains, Inc.
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 252.]
I would ask how does a country like Brazil, where they drive the same Ford, Chevys, and
Toyotas that we do here, blend 27 percent ethanol in their motor fuel and have for over a decade,
while the U.S. cannot get past 10 percent? The answer? It's big oil's death grip on the U.S.
consumer. Don't undermine our ability to invest in domestic fuel alternatives that are a catalyst to
our economy. Don't deprive consumers of choices at the pump by ceding market share to big oil.
The real mandate in this country is the 90 percent mandate that the petroleum fuel market has in
the U.S. that the oil industry has in place and will stop at nothing to protect. Efforts to replace
fossil fuels with domestic renewable fuels will continue to benefit the economy, environment,
and public health.
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Growth Energy
EPA's proposal for 2014-2016 volume requirements would be particularly damaging to the
important transition from first-generation renewable fuels to second-generation fuels, especially
cellulosic fuels. A commitment to conventional renewable fuel through high total volume
requirements would promote the development of second-generation fuels in at least two ways: by
encouraging producers of conventional renewable fuels to continue investing in second-
generation fuels, and by charting a path over the ethanol blendwall. [EPA-HQ-OAR-2015-0111-
2604-A2 p.69]
Producers of conventional renewable fuels, including members of Growth Energy, have made
enormous investments in the development of cellulosic biofuels, often in conjunction with other
energy companies.393 These companies already have spent billions of dollars building facilities
and harvesting cellulosic feedstocks based on Congress's direction that volume requirements
continuously increase over fifteen years. And their efforts have begun to bear fruit.394 EPA's
proposal could well halt this trend. Much of the planned growth in advanced and cellulosic
biofuel production is designed around a model of licensing technology to existing biofuel
producers, who are able to engage in high-value asset financing and partnering investments. But
EPA's proposal to use its general waiver authority to lower conventional biofuel volume
requirements below existing capacity would cripple the industry's future ability to make such
investments.395 Analysts at the International Council on Clean Transportation found that a
waiver of the RFS would "have the indirect effect of eroding market confidence for all fuels that
fall under the standard," especially for "companies that invest in second-generation fuels
(cellulosic and other advanced fuels)," because "[t]hese second-generation plants rely heavily on
market confidence to access and reduce the price of debt financing for plant expansions as they
move to commercialize their technologies."396 [EPA-HQ-OAR-2015-0111-2604-A2 p.69-70]
In short, the base renewable RVO provides a critical platform for the development of advanced
biofuels, and undercutting conventional biofuels as EPA proposes will cripple the future of
cellulosic ethanol in the United States. It is therefore critically important that EPA not undermine
the best tool for incentivizing consumption of higher ethanol blends—the conventional
renewable fuel requirement. [EPA-HQ-OAR-2015-Oil 1-2604-A2 p.71]
393 The corn ethanol industry is critical to the development of cellulosic biofuel. See Ryan Fitzpatrick, Cellulosic
Ethanol is Getting a Big Boost from Corn, for Now (Apr. 2, 2015), at http://thirdway.org/report/cellulosic-ethanol-
is-getting-a-big-boost-from-corn-for-now (explaining "established companies with a sizable presence in the corn
ethanol industry" are necessary to overcome the technological and economic challenges to scaling up cellulosic
production). In fact, cellulosic projects sponsored by major corn ethanol producers (POET/DSM, Abengoa, and
Quad City Corn Producers) account for more than 80% of total U.S. cellulosic capacity, and that percentage is
expected to rise to 88% when a fourth major company (DuPont) opens its cellulosic facility later in 2015. Id.
394 As the Congressional Research Service has found, "there were noteworthy occurrences in 2014 for the [cellulosic
biofuel] industry, including the opening of three commercial-scale cellulosic ethanol plants in Iowa and Kansas with
a combined production capacity of up to 52 million gallons per year." Congressional Research Service, The
Renewable Fuel Standard (RFS): Cellulosic Biofuels, supra note 392 (Summary).
395 As explained in the comment on this proposed rule submitted by POET, a modest increase in the base renewable
target would strengthen the D6 RIN price accordingly, and D6 RIN prices are essential for providing the demand
pull necessary for infrastructure that will enable developing advanced biofuels. See POET July 27 Comments, at 5-
8; see also BIO Comment on EPA's Proposed 2014-2016 Standards for the Renewable Fuel Standard Program, at
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32-36 (July 27, 2015) ("EPA's proposed rule will destroy incentives to invest in development of advanced and
cellulosic biofuels by eliminating both incentives for new methods of compliance beyond E10 and the profits of
conventional biofuel producers who are most likely to be first-adopters of the technology.").
396 Nathan Miller et al, International Council on Clean Transportation, Measuring and Addressing Investment Risk
in the Second-Generation Biofuels Industry, at 25 (Dec. 2013), at
http://www.theicct.org/sites/default/files/publications/ICCT_AdvancedBiofuelsInvestmentRisk_ Dec2013.pdf.
Hermes Consolidated, LLC dba Wyoming Refining Company
In fact, we are unable to blend any biomass-based diesel (BED) at all. The product is not
available in our region, and we do not control all points where our diesel might be blended.
Therefore, we do not have market power to force the installation of blending facilities at third
party terminals should BED ever become available. Our vertically integrated and geographically
diversified competitors are not offering BED blends and obtain their compliance RINs by over
blending at sister facilities in warmer climes. Were we to offer BED blended diesel, no one
would buy it as long as the competition can offer unblended diesel by complying in another
region. Our BED RIN purchases are now paying for blending facilities for other companies.
Should BED ever become available at our refinery, BED blending facilities will be largely built
out nationwide, and no one will need our RINs. Thus, we are paying for blending facilities twice:
for other parties' when we buy RINs now and, in the future, if we ever get BED to blend and our
RINs have no market since everybody else will already have their own, for ours. [EPA-HQ-
OAR-2015-0111-2487-A1 p. 1]
Hinman Trucking
As a trucker, I am concerned about the negative impacts that would result from continuing
Renewable Fuel Standard mandates. If the RFS is not fixed the economic impact will be severe
on our industry and all the industries we supply to. [EPA-HQ-OAR-2015-0111-1659-A1 p. 1]
To meet RFS mandates, America's fuel suppliers will soon hit a blendwall which is the point
when biofuels cannot be incorporated into the fuel levels required by the RFs. Fuel producers
may be forced to limit production causing increased costs and hardships on all American's.
[EPA-HQ-OAR-2015-0111-1659-A1 p. 1]
HollyFrontier Corporation
The reality is HollyFrontier, and other merchant refiners, have limited ability to influence the
quantity of renewable fuels that are consumed by our nation's transportation fleet, irrespective of
RIN prices. For example, we have found that discounting the price of E85 at the wholesale level
does not result in a demand response for renewable fuels due to the current, non-integrated
system of our nation's fuel supply, which is to say the functions of fuel production, distribution
and retailing are fragmented. In this instance, we have found that fuel retailers set prices in
consideration of numerous factors outside our control including inventory turnover, consumer
demand elasticity, competitor response and history— all of which are outside our control. These
considerations result in merchant refiners wielding limited influence over both ultimate pricing
and sales volumes of blended renewable fuels at the pump. While REST costs are not a material
determinant in the price of motor fuel due to supply chain fragmentation, RIN costs for
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compliance are significant relative to the margins of merchant refiners and are disproportionately
carried by the same. [EPA-HQ-OAR-2015-0111-2257-A1 p.3]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, pp. 176-177.]
We all recognize the RFS program needs repair, and the RIN market is dysfunctional. Market
fundamentals no longer dictate RIN prices. Rather, prices are driven by speculation, hoarding
due to fear of RIN shortages. As a merchant refiner without retail operations, HollyFrentier is
limited in our ability to blend ethanol with petroleum fuels. Most of our gasoline production is
transported via common carrier pipeline to large-volume customers who may or may not blend
renewable fuels to the receiving terminals before distributing to the retail outlets. This blending
is outside our control, and we must participate in a dysfunctional RIN market to cover our
obligation. This creates a significant and disproportionate financial burden to our company and
other merchant refiners. This disconnect was highlighted in a recent study from Columbia
University by James Stock, who stated, The purpose of the RIN system is to ensure compliance
with the RFS, not to add price risk to the balance sheets of obligated parties that happen to have
generation obligation mismatch.'
Iowa Renewable Fuels Association
At the same time, U.S. Energy Information Administration (EIA) reports have shown "good
times" for refining companies. With crude oil prices at multiyear lows and with the protection of
the 90 percent petroleum monopoly, refiner crack spreads (which essentially track profit
margins) have increased. In other words, the full impact of lower crude oil prices is not accruing
to the benefit of American motorists, but rather a sizeable portion is fattening the bottom lines of
refiners. 17 And while IRFA certainly recognizes and supports the refiners' right (and necessity)
to make a profit, we also believe that more competition in the form of fuel choice for consumers
would be to the overall benefit of the U.S. economy and the individual motorist.
To be clear, IRFA members highly value their many positive relationships with numerous
refiners - their customers. Yet, renewable fuels producers must at the same time compete with
those customers for any increased market share in the fuels arena. IRFA believes that unique and
somewhat awkward competition among producers and refiners - suppliers and customers - is
best left to the ultimate consumer, the American motorist. The RFS was designed to break
through the 100 years of government preferences for petroleum, the distribution monopolies, and
other restrictive policies in order to provide consumers true choice at the pump.
17 Gronewold, Nathanial. "EIA affirms good times for refiners." E&E News 21 May 2015
http://www.eenews.net/energywire/stories/1060018897
Mascoma LLC, Lallemand Inc.
The instability in the biofuel markets since 2013 resulting from EPA's lack of a long-term and
stable energy policy has increased the risk for potential investors, and discouraged further
investments in the next generation of biofuels. Though three cellulosic biofuel plants began
production in 2014 (Quad County Corn Processors, Poet-DSM, and Abengoa) and a fourth
(DuPont) is scheduled to begin production in 2015, no additional cellulosic facilities have been
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announced since 2013. The uncertainty around the changing RFS has been a factor in this drop.
[EPA-HQ-OAR-2015-0111-0263-A1 p. 1] [EPA-HQ-OAR-2015-0111-1044 pp. 293-294]
Mass Comment Campaign sponsored by Adkins Energy LLC (paper) - (120)
A drastic cut like the one the EPA proposed will have a devastating impact on agriculture and
our rural economy. • It may idle ethanol production and cause lost jobs in many rural areas of the
country - all to benefit some of the world's largest oil companies. [EPA-HQ-OAR-2015-0111-
2956-Alp.l]
Mass Comment Campaign sponsored by anonymous 10 (email) - (297)
Furthermore, if EPA and the government turn their backs on the production of current
conventional biofuels, it will have a devastating effect on the full-scale commercialization of
next generation biofuels, such as cellulosic biofuel from agricultural waste. The biofuels industry
has just begun the commercialized production of next generation of biofuels. Now would be the
worst possible time to take a step backward. [EPA-HQ-OAR-2015-0111-0213-Al p. 1]
Mass Comment Campaign sponsored by anonymous 11 (email) - (695)
After years of success in expanding the ethanol industry because of the RFS, we must not move
backward. We must capitalize on the current momentum and continue to invest in the future
development and commercial scale production of next generation biofuels. A rule such as this
would slow any further innovation, investment and growth in a successful and thriving industry
that supports farmers, plant workers and entire rural communities. [EP A-HQ-OAR-2015-0111-
0214-Alp.l]
Mass Comment Campaign sponsored by anonymous 12 (email) - (560)
Furthermore, if EPA and the government turn their backs on the production of current
conventional biofuels, it will have a devastating effect on the development and
commercialization of next generation biofuels, such as cellulosic biofuel from agricultural waste.
[EPA-HQ-OAR-2015-0111-0215-A1 p. 1]
Mass Comment Campaign sponsored by anonymous 31 (paper) - (301)
After years of success in expanding the ethanol industry because of the RFS, we must not move
backward. We must capitalize on the current momentum and continue to invest in the future
development and commercial scale production of next generation biofuels. A rule such as this
would slow any further innovation, investment and growth in a successful and thriving industry
that supports farmers, plant workers and entire rural communities. [EP A-HQ-OAR-2015-0111-
2561-A1 p.2]
Mass Comment Campaign sponsored by anonymous 33 (paper) - (164)
This policy is making America stronger. We cannot afford to turn our backs on such a successful
policy. [EPA-HQ-OAR-2015-0111-2957-A1 p.2]
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Mass Comment Campaign sponsored by anonymous 9 (email) - (230)
A drastic cut, such as the one that EPA proposed, will have a devastating impact on agriculture
and our rural economies. Some analysts have said it could decrease the price of corn, pushing the
price American farmers receive for their grain well below the cost of production. [EPA-HQ-
OAR-2015-0111-0212-A1 p.l]
Mass Comment Campaign sponsored by Corn, LP (web) - (37)
The RFS is working for farmers. Increased demand for corn for ethanol production has added
value to Iowa corn, increasing farmer productivity and profitability while saving U.S. taxpayers
tens of billions of dollars in Farm Bill payments that are no longer necessary. At Corn, LP, we
are proud to buy corn from local farmers, who are the leaders and lifeblood of our communities.
Agricultural and rural career opportunities have increased dramatically since the RFS went into
place, allowing the best and brightest of our youth to pursue careers on the farm and keep their
talents in rural America. [EPA-HQ-OAR-2015-0111-2047-A1 p.2]
Mass Comment Campaign sponsored by DENCO II. Absolute Energy. L.L.C. (paper) -
(633)
Furthermore, if the EPA and the government turn their backs on the Production of current
conventional biofijels, it will have a devastating effect on the full-soale commercialization of
next generation hiofuels, such as Cellulosic biofuel from agricultural Waste. The biofuels
industry hasjust begun, the commercialized production of next generation of bioftiels. Now
would be the worst possible time to take a step backward. [EPA-HQ-OAR-2015-0111-0207-A1
p.2]
Mass Comment Campaign sponsored by Little Sioux Corn Processors (web) - (44)
The RFS is working for farmers. Increased demand for corn for ethanol production has added
value to Iowa corn, increasing farmer productivity and profitability while saving U.S. taxpayers
tens of billions of dollars in Farm Bill payments that are no longer necessary. At Little Sioux
Corn Processors, we are proud to buy corn from local farmers, who are the leaders and lifeblood
of our communities. Agricultural and rural career opportunities have increased dramatically since
the RFS went into place, allowing the best and brightest of our youth to pursue careers on the
farm and keep their talents in rural America. [EPA-HQ-OAR-2015-0111-2045-A1 p.2]
Mass Comment Campaign sponsored by Quad County Corn (web) - (37)
The RFS is working for farmers. Increased demand for corn for ethanol production has added
value to Iowa corn, increasing farmer productivity and profitability while saving U.S. taxpayers
tens of billions of dollars in Farm Bill payments that are no longer necessary. At Quad County
Corn Processors, we are proud to buy corn from local farmers, who are the leaders and lifeblood
of our communities. Agricultural and rural career opportunities have increased dramatically since
the RFS went into place, allowing the best and brightest of our youth to pursue careers on the
farm and keep their talents in rural America. [EPA-HQ-OAR-2015-0111-2046-A1 p. 2]
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Mass Comment Campaign submitted by DuPont employees (web) - (1)
I am an Iowa farmer who has worked closely with the ethanol industry since its inception to
support renewable fuels. I believe that using ethanol is an excellent way for the United States to
depend less on foreign oil. Not to mention, I believe basis has improved over time die to having a
new market for corn in our area. Reducing the effects of RFS will undoubtedly cause ethanol to
be needed less, decreasing demand and reducing quality jobs that were brought into my
community. [EPA-HQ-OAR-2015-0111-2825 p.l]
EPAs decision to reduce the proposed 2014 and 2015 renewable fuel volumes to below the
volumes set for 2013 is bad for the U.S. economy and will stifle investments in technology and
new production plants. [EPA-HQ-OAR-2015-0111-2825 p.2]
By reducing the biofuels volumes, EPA is leaving the corn ethanol market with excess capacity.
In the immediate term, this will lead to lost jobs and tax revenue. Longer term, this will
discourage the investment needed for the production of new plants required to drive large
quantities of cellulosic ethanol into the marketplace. Nothing could be more destructive of the
industrys ability to grow than unpredictable policy changes that destroy the ability to raise
capital. Removing incentives or demand signals after the private sector has made the financial
and other resource commitments to respond to a policy need is reversing course and a poor
choice. [EPA-HQ-OAR-2015-0111-2825 p.2]
Mass Comment Campaign submitted by investors in Golden Grain Energy LLC. (paper) -
(327)
By taking a step backward, you are sending a signal that the government no longer supports the
production of biofuels. [EPA-HQ-OAR-2015-0111-2559-A1 p.l]
With uncertainty, risk and falling investments, the biofuels industry will be bound to fallshortof
the potential for both current biofuels and the next generation of technology now being
commercialized. [EPA-HQ-OAR-2015-0111-2559-A1 p.l]
Minnesota Farm Bureau
Furthermore, a significant reduction in the 2015 and 2016 volume requirements would also slow
or halt investments in the infrastructure needed to distribute and dispense larger volumes of
ethanol. In turn, this will halt new investments in cellulosic biofuels and introduce detrimental
ambiguity in a developing market. [EPA-HQ-OAR-2015-0111-2263-Al p. 2]
Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
Even worse, if EPA sets unachievable volume requirements, some obligated parties—in
particular, merchant refiners who must purchase most if not all of their RINs on the secondary
market—could be left altogether unable to comply if parties with access to excess RINs choose
to hoard them rather than make them available on the secondary market. EPA recognized this
possibility, stating that "parties that accumulate RINs through their own blending activities could
decide to bank the maximum quantity of RINs for their own future use or for future sale, and that
if this practice were widespread that there could be a shortfall in available RINs for parties who
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do not engage in renewable fuel blending activities themselves...." [EPA-HQ-OAR-2015-0111-
2603-A2, p. 15]
EPA nevertheless dismissed the significance of this possibility, asserting that it exists "in any
competitive marketplace." The Merchant Refiners Group's experience purchasing in the
secondary RIN market, however, is that this market does not behave like an ordinary competitive
market. In an ordinary market, increasing demand for RINs would induce additional supply,
thereby allowing supply and demand to reach equilibrium. That is not so in the RIN market.
Demand is inelastic—obligated parties must submit the necessary quantity of RINs—and, as
EPA recognized elsewhere in the NPRM, now that the economy has hit the E10 blendwall,
supply is also largely inelastic. Blenders no longer can create additional RINs through
overblending. When inelastic supply is combined with anticipated increases in volume
requirements in future years—thereby increasing the risk EPA will set volume requirements
beyond the economy's ability to supply renewable fuel to consumers—the result will be to
significantly increase the option value of banked RINs, raising their price and making their
holders less willing to part with them. An ordinary competitive market would not exhibit such
behavior. Moreover, in the Merchant Refiners Group's experience, the RIN market is often very
thin and pricing is opaque. In a truly competitive market, by contrast, pricing would be
transparent and significant volumes would be traded. [EPA-HQ-OAR-2015-0111-2603-A2,
pp.15-16]
The fact that EPA believes that the RIN marketplace is a functioning competitive marketplace—
even though it was wholly created by government regulation and its pricing depends upon
predictions about how the renewable fuels industry might respond to future command-and-
control decisions by EPA—demonstrates the error in EPA's entire approach. [EPA-HQ-OAR-
2015-011 l-2603-A2,p. 16]
National Corn-to-Ethanol Research Center (NCERC)
Who are the People in the Biofuels Industry
• As I was raised in rural America, so were tens of thousands of people employed in the
biofuels industry. There are many common traits shared by those employed in the
biofuels industry:
o They understand the importance of sacrifice and giving something back.
o They understand the importance of preserving a way of life for future generations.
o They understand that in order to have a sustainable America, we must invest in
America. [EPA-HQ-OAR-2015-0111-1225-A2 p. 2]
Nebraska Energy Office
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 120-121.]
Soon after the Environmental Protection Agency proposed cuts to the volumes for 2014, 2015,
and 2016 that were mandated by the renewable fuel standard, leaders from ethanol-producing
States and national ethanol industry officials voiced their concerns that the reduced RFS volumes
would cool investment in ongoing development and innovation within the sector. I'm here today
to tell you that prediction has already come true.
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Nestle
An additional, and often unrecognized, consequence of the RFS is to tie the prices of otherwise-
unrelated commodities together to a greater degree than would otherwise be the case. The price
of corn will reflect, in part, the demand for, and usage of, ethanol. Ethanol demand is in turn
related to the incentive to blend ethanol into gasoline: Blenders have an incentive to use more
ethanol (subject to applicable limits) when the price of ethanol is lower than the comparable
gasoline price. The gasoline price is largely a function of oil prices. This means that as oil prices
rise, ethanol prices can trade higher without losing the blending incentive, increasing the
profitability and demand for ethanol, and therefore the fuel's 'pull' on the corn crop. Other
things equal, this means a higher corn price. To be sure, corn and petroleum prices already have
some tendency to move together because both are traded in dollars and will tend to move in
some relation to changes in the dollar's value. But biofuels policy has provided an additional
linkage, as a number of economic studies have demonstrated, and this linkage could also be
extended to soy complex and wheat prices. Whether the price linkage is a good or bad thing for
the national interest has never been seriously debated, whether as part of energy or agricultural
policy. [EPA-HQ-OAR-2015-0111-1918-A1 p.4]
New Leaf Biofuel, LLC
When the EPA has expanded the biomass-based diesel program, the innovation in waste and
other new feedstocks increased significantly. In the RFS Proposal, the EPA suggests that the
opposite is true. But when EPA makes our market smaller, as you did in 2014, then biodiesel
made from cooking oil waste products and other newer innovative feedstocks are the first
casualty. [EPA-HQ-OAR-2015-0111-1909-A1, p.2]
In 2014, the fledgling biodiesel industry in California lost 4 plants that made biodiesel from used
cooking oil. New Leaf was very lucky that we scaled back when we did. If we had continued
operations much longer, we wouldn't have made it either. [EPA-HQ-OAR-2015-0111-1909-A1,
p.2]
There is no doubt in my mind that if the 2016/17 RVO is finalized as written, it will lead to more
closures and scale backs by biodiesel plants that utilize waste feedstocks. The overall GHG of
the biodiesel will increase as imported higher GHG fuels squeeze us out, and worse, biodiesel
blenders will scale back blending due to poor economics, resulting in a return to fossil fuels. This
isn't rocket science. Its pure supply and demand, and we have data to show it DID happen as a
result of the last proposal. [EPA-HQ-OAR-2015-0111-1909-A1, pp.2-3]
Renew Kansas
The RFS is a strategic success story that has helped to drive continued advancements in the
renewable fuels market. Through new and continued investments in innovative technologies and
infrastructure for higher-level ethanol blends, the renewable fuels industry is primed to break
through any so-called "blend wall." By contrast, the proposed rule would only create uncertainty
in the renewable fuels industry, which would have the effect of freezing new investments into the
market space. The proposed rule could, inadvertently, serve as a catalyst to cause the adverse
results that the EPA seeks to avoid. [EPA-HQ-OAR-2015-0111-1309-A1 p.3-4]
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South Dakota Corn Growers Association
I've experienced the revitalization that the RFS and ethanol have created in small towns like
mine. My local ethanol plant opened a year before I graduated from college and helped provide
the opportunity for me to return home making me the 6" generation on our family farm. That
plant has created many value-added opportunities and jobs. [EPA-HQ-OAR-2015-0111-0269-A1
p. 1]
According to a 2012 study by South Dakota State University, the ethanol industry in South
Dakota alone has an annual economic impact of $3.8 billion and directly employs 1,900 people
who earn an average wage of $60,000. [EPA-HQ-OAR-2015-0111-0269-A1 p. 1]
South Dakota produces over a billion gallons of corn ethanol, reducing America's dependence on
foreign oil. In just eight short years, ethanol has established itself as a vital tool that increases
gasoline's octane level and serves as an environmentally friendly oxygenate, displacing cancer-
causing benzene. [EPA-HQ-OAR-2015-0111-0269-A1 p. 1-2]
The success of the RFS didn't just happen on its own as farm families invested heavily in ethanol
plants, precision farm equipment and seed technology to help deliver the results we have today
as producers continue to meet the growing global demands for food, feed, fuel and fiber. Cutting
the corn ethanol volumes in the RFS, which were passed by Congress into law, simply pulls the
rug out from under the backbone of rural America. If EPA follows through on this proposal,
future investment will be scarce, although it's likely that investor sentiment has already been
damaged due to the continued delays by your agency. [EPA-HQ-OAR-2015-0111-1811-A1 p.2]
The Valero Companies
According to analysis conducted by NERA,36 there is no reason to believe that the increase in
RIN prices has affected the cost of ethanol to blenders, including to integrated refiners/blenders.
[EPA-HQ-OAR-2015-0111-2765-Alp.l5]
36 NERA Economic Consulting, Analysis of RFS2 RIN Markets, Prepared Report for Monroe Energy, at - pg 35
(Oct. 15,2013).
Response:
EPA received many comments claiming that if EPA finalized the volumes in our proposed rule it
would undermine the confidence of lenders and creditors, resulting in restricted access to capital
needed for investment in new technology and operating capital. These comments also claimed
that the rule could eliminate incentives to invest in biofuel refueling infrastructure and increase
the risk of investment in advanced and cellulosic biofuels. EPA acknowledges the positive
impacts the RFS program has had by increasing the diversity of transportation fuel pool and
increasing the domestic production of transportation fuel. However, we disagree with this
assessment of the likely impacts of this final rule. Many of these comments ignored the fact that
the proposed RFS standards continued to increase renewable fuel volumes from previous years.
They instead inappropriately assumed that by reducing the required volume of total renewable
fuel from the statutory volumes EPA is reducing the volume of renewable fuel that can and will
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be supplied in 2016, decrying a wide range of devastating and chilling impacts. The statutory
volumes for total renewable fuel for 2014, 2015, and 2016 are beyond the levels the market can
achieve in these years, and therefore the benefits that could theoretically be achieved by meeting
the statutory volumes cannot be realized. Since we do not consider the statutory volumes
attainable (and indeed we are setting the renewable fuel standard at the maximum achievable
level), we do not believe it is appropriate to attribute any shortfall in jobs or investment
associated with levels of renewable fuel production below the statutory volumes to EPA's
decisions.
Rather, in finalizing a total renewable fuel standard that is equal to the maximum reasonably
achievable supply of renewable fuel, we believe we are providing the necessary certainty and
incentives that the renewable fuel market needs to continue to grow in future years. The total
renewable fuel standard for 2016 is approximately 1.1 billion gallons higher than the volume of
renewable fuel projected to be supplied in 2015, and is based on projected consumption of all
renewable fuels, including ethanol volumes that are beyond the E10 blendwall. As these
volumes represent significant growth over previous years, we do not believe that they will have
adverse impacts on existing renewable fuel production facilities, nor do we believe they will
strand existing investments or result in any overall negative impact on agriculture or the rural
economy. EPA is not assuming that the market cannot consume any ethanol beyond the E10
blendwall, in 2016 or in the future, but we believe we must consider the ability of the market to
consume ethanol and other renewable fuels when establishing the total renewable fuel standard.
Setting volume requirements beyond the market's ability to achieve these volumes would not be
a responsible use of EPA's general waiver authority, and would result in significant uncertainty,
rather than the certainty that the renewable fuels market needs to grow and that commenters
seek. As the ability for the market to supply renewable fuel for use as transportation fuel in the
United States grows, EPA intends to establish the total renewable fuel standard in future years at
the maximum reasonably achievable supply (as long as this supply is equal to or less than the
statutory volumes), requiring that any potential for increases in the supply, whether due to
growth in the ability of the market to produce, import, distribute, or consume renewable fuels,
are reflected in our standards. This approach provides an incentive for all those involved in the
production and distribution of renewable fuels to address the potential constraints on the
renewable fuel supply wherever they occur.
Similarly, the advanced biofuel and cellulosic biofuel standards established for 2016 represent
significant increases over the volumes required in prior years. Consistent with our actions in
previous years, EPA has increased these standards as greater volumes of advanced biofuel
(including biomass-based diesel) and cellulosic biofuels are projected to be available. We
believe this sends a strong signal to potential producers of advanced and cellulosic biofuels, and
parties that may invest in the production of these fuels while the total renewable fuel volume
continues to send a strong signal for conventional biofuels as well. As the projected production
and import of these fuels increases EPA anticipates establishing standards that require increasing
volumes of these fuels to be used.
A commenter expressed concern about the high cost of RFS compliance on small businesses,
particularly refiners and convenience stores. We believe these concerns are misplaced. While
some refiners may comply with the RFS standards through the purchase of RINs, the available
data supports the conclusion that obligated parties generally are able to recover the cost of
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purchasing RINs through higher prices received for their petroleum products (for more detail see
EPA supporting document "A Preliminary Assessment of RIN Market Dynamics, RIN Prices,
and Their Effects"). Convenience stores, with the exception of a very few large chains, do not
produce or import petroleum based gasoline or diesel, and are therefore not obligated parties
under the RFS standards. They therefore will not be forced to install new equipment (although
they may find it advantageous to do so if the fuels market incentivizes them). See also responses
to comments on the impacts on small refineries and small refiners in Section 10.7.
A commenter expressed concerns that due to a lack of biodiesel availability in their area they
were forced to purchase RINs to meet their biomass-based diesel obligation, that unblended
diesel was preferred by wholesale purchasers in colder climates, that their RINs purchases were
being used to finance blending facilities in other areas, and that if they eventually did blend BED
there would not be a market for their RINs. As noted above, EPA believes that RINs are
available for purchase by obligated parties who may not produce a specific product, and that
parties who comply through the purchase of RINs are still able to obtain a higher price for their
product reflecting the value of the RIN. Moreover, EPA believes that a benefit of the RIN
compliance mechanism is to allow relatively more use of BED in areas where it is cheaper and
easier to do so, and allowing obligated parties that do not have access to BED to satisfy their
obligations through the purchase of excess BED RINs.
A commenter requested that EPA conduct an assessment of the consequences of higher required
volumes of renewable fuel, suggesting that if EPA requires volumes above the E10 blendwall
refiners could respond by reducing their production of transportation fuel, exporting more or
importing less petroleum products, or producing more fuels that do not incur an RVO. In this
final rule EPA has conducted an assessment of the fuels market's ability to produce, import,
distribute, and consume renewable fuels. While the required volumes in this final rule are higher
than the volumes in any previous year we believe this is consistent with the congressional intent
of the RFS program and the market's demonstrated ability to respond to higher standards in
previous years. We do not believe that obligated parties will respond to the standards at the
levels finalized by reducing their production of transportation fuel or exporting greater volumes
overseas. Even if an individual party were to do so, other parties would likely step in to meet
demand. EPA will continue to monitor the market's response to our standards, and retains the
ability to further waive the standards in 2016 or any future year if there is evidence that the
standards will cause severe economic harm.
A commenter claimed that EPA's proposed volumes would have an adverse impact on advanced
biofuels, and cited a paper that political instability and delays in EPA's rulemakings are
primarily responsible for an estimated $13.7 billion shortfall in investment in advanced biofuels.
EPA has reviewed this report and does not believe these claims are accurate or supported by the
data. The paper notes that through 2012, EPA issued annual rulemakings on time and upheld the
statutory advanced biofuel volumes, and yet the cumulative shortfall in investment in advanced
biofuels was estimated to be $6.9 billion. They attribute this shortfall to the recession and
challenges related to developing new technology. They then claim that the majority of the $13.7
billion shortfall in investment necessary to reach the statutory standards was due to EPA's delays
in issuing timely rules. They give no evidence for this, nor does the paper explain why the
challenges related to the recession and technology development were no longer factors in 2013
and 2014. While we acknowledge that the delay in EPA's rulemakings was not helpful to the
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advanced biofuels industry, we believe challenges associated with developing and
commercializing advanced biofuels, and particularly cellulosic biofuels, are the primary reason
for the shortfall in the investments needed to meet the statutory targets for advanced and
cellulosic biofuels.
A commenter questioned how Brazil can achieve ethanol blend rates of 27% while the United
States faces difficulties increasing the ethanol blend level beyond 10%. The vast majority of
vehicles and fuel distribution and dispensing infrastructure in Brazil has been designed and
produced to be compatible with these higher level ethanol blends for many years. This is not the
case in the United States, and thus the ability for the United States to consume gasoline
containing greater than 10% ethanol is currently constrained by the number of retail stations that
offer these blends and the number of vehicles that can use them.
A commenter stated that the supply of RINs is inelastic, and that as a merchant refiner they are
disproportionately impacted by high RIN prices. We disagree with the commenter's assessment
of the impacts of RIN prices on renewable fuel production and consumption and on merchant
refiners. While we recognize that there are constraints on how quickly the fuel market can
absorb additional biofuel, we believe the market has to ability, and the incentive, to take steps to
produce additional RINs. Indeed our purpose in this rulemaking is to set the standards in this
rule at levels which we believe the market can achieve, and which will not require a drawdown
in the total number of carryover RINs. The commenter stated as an example that discounting
E85 at the wholesale level does not result in a demand response from consumers due to the non-
integrated system of the nation's fuel supply. While the discounted price of E85 may not result
in an immediate and significant increase in E85 sales, it may instead result in an increased profit
opportunity for E85 retailers. This can in turn result in an increase in the number of retail fuel
stations offering E85, and the higher number of stations in increased competition, more
competitive E85 pricing, and increased E85 sales over time. The response of other fuels, such as
biodiesel or renewable diesel, to higher RIN prices may be more direct. The RFS program,
operating through the incentives provided by the price of RINs, may not be able to increase the
production, import, distribution, and consumption of renewable fuels as quickly as Congress
envisioned, but we believe it can and will result in an increasing supply of renewable fuels over
time. Further, after reviewing the available data, EPA has concluded that merchant refiners are
generally able to recover the cost of the RINs they purchase through the price of the petroleum
fuels they sell, and are therefore generally not disproportionately harmed by the RFS program or
higher RIN prices (see Section 2.3.2 and EPA supporting document "An Assessment of the
Impact of RIN Prices on the Retail Price of E85" for further discussion of this issue).
A commenter stated that biofuels policies such as the RFS can cause greater connections
between petroleum prices and the price for agricultural products such as corn, soy, and wheat.
We acknowledge this point, however we do not believe this factor is directly relevant to the
standards established in this final rule.
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7.4 Impact on RINs
Comment:
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
RINs are an ineffective tool for encouraging investment and have shown no ability to create the
incentives needed to move E85 volumes enough to solve the blendwall issue in 2016.42 Any RIN
discount a blender passes to retailers varies from market to market depending on competitive
factors. The retailer will then make a rational decision on changes in their retail price. [EPA-HQ-
OAR-2015-0111-1948-A1 p.26]
42 Stock, James H. The Renewable Fuels Standard: A Path Forward. Columbia SIP A, Center on Global Energy
Policy, April 2015.
Archer Daniels Midland Company (ADM)
Where the blendwall is concerned, EPA's proposal asserts that 'RIN prices are likely to be higher
than historical levels,' which is 'an expected market response to an increased renewable fuel
mandate that is pushing volumes' beyond the so-called blendwall. As Craig Willis, President of
ADM's Ethanol business, testified at EPA's public hearing, the market response has been the
exact opposite — a strong indicator that the volumes proposed when coupled with a significant
RIN carryover supply will not result in ethanol exceeding a 10% national blending threshold.
[EPA-HQ-OAR-2015-0111-2262-A1 p. 4]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, pp. 40-41.]
EPA's proposal asserts that RIN prices are likely to be higher than at historical levels, which is
an expected market response to an increased renewable fuel mandate that is pushing volumes
beyond the so-called blend wall. However, the market response to the proposal has been the
exact opposite, a strong indicator that the volumes proposed, when coupled with the significant
RIN carryover supply, will not, in effect, exceed a 10 percent national blending threshold. This is
confirmed by the DOE's recent 2016 forecast.
Aventine Renewable Energy
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 353.]
Second, the EPA's recent ruling is causing a market distortion in RIN pricing by reducing the
value of the D6 RIN by 30 cents per gallon in the commercial ethanol markets. Or in other terms,
the unintended consequences have resulted in a 30-cent per gallon subsidy, subsidy to import
ethanol gallons into the United States.
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Butamax Advanced Biofuels, LLC
The current NPRM for 2014, 2015 and 2016 reinforces market perception of EPA withdrawing
support for the statutory RFS requirements as evidenced by the sharp fall in market RIN prices
upon its initial publication. [EPA-HQ-OAR-2015-0111-1938-A2 p. 10]
Growth Energy
This graph shows the daily price of D6 RINs (which corresponds to non-advanced renewable
fuel) performing a "cliff div[e]"80 as EPA announced its proposal. That "should make it obvious
O 1
which way the RINs market voted with regard to the degree of push in the EPA proposal." To
put it bluntly, the smart money knows that the proposed renewable fuel volumes mean little or no
push beyond current usage levels. [EPA-HQ-OAR-2015-0111-2604-A2 p. 13] [The graph can be
found on page 13 of EPA-HQ-OAR-2015-0111-2604-A2.]
80 Scott Irwin & Darrel Good, The EPA 's Proposed Ethanol Mandates for 2014, 2015, and 2016: Is There a 'Push'
or Not?, Farmdoc Daily No. (5): 102, at 5 (June 3, 2015), at http://farmdocdaily.illinois.edu/pdf/fdd030615.pdf.
81 Irwin & Good, supra note 80, at 5.
Iowa Renewable Fuels Association
3. The RIN program provides a market-based mechanism to allow compliance flexibility for
obligated parties The Study does a nice job of outlining this point and the various steps that
differently situated parties can take to comply with the program.51 But I would like to share a
discussion I had recently with a 20-year veteran of Capitol Hill who was deeply involved in the
crafting of the RFS (both laws). He marveled at how rare it was that Congress got "so right" the
RFS market-based RIN mechanism to ensure consumer access to renewable fuels while allowing
various parties to meet the requirement in ways that best fit their business model. He then
lamented that the EPA has so totally destroyed (or at least proposed to destroy) one of the few
instances that Congress got something right. The proposed EPA rule turns the RFS, and RIN
values, on their heads. [EPA-HQ-OAR-2015-0111-1957-A2 p. 19]
5. RIN prices are the primary way the RFS program can incentivize the increased blending and
consumption of renewable fuels in the US To justify the RFS proposal, the EPA cited a lack of
renewable distribution capacity masquerading as a "supply" shortage. As Figure 5 demonstrates,
since the proposal was made public on May 29th, RIN values dropped precipitously - reducing
the incentive for retailers to offer higher blends of ethanol and biodiesel and increasing, relative
to unblended fuels, the cost of E85 and other renewable blends. (Data can be found in
Attachment H) [EPA-HQ-OAR-2015-0111-1957-A2 p. 20] [EPA-HQ-OAR-2015-0111-1044
p.68]
[Attachment H can be found on p. 71-90 of docket number EPA-HQ-OAR-2015-0111-1957-A2]
[Figure 5 can be found on p. 20 of docket number EPA-HQ-OAR-2015-0111-1957-A2]
The EPA is not responding to an infrastructure shortage for higher ethanol blends with this
proposal - the EPA is creating it. A strong RFS provides the incentive for retailers to offer higher
ethanol blends to their customers. By slashing the RFS, the EPA slashes the incentive to install
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higher blend distribution infrastructure. This fundamental flaw in EPA's understanding of the
RFS and market dynamics must be addressed and corrected if we are ever to achieve the market
competition goals Congress outlined when passing the RFS. [EPA-HQ-OAR-2015-0111-1957-
A2 p. 20] [EPA-HQ-OAR-2015-0111-1044 p.69]
It is troubling that the Agency appears to have ignored each and every takeaway of EPA's own
internal RIN analysis. We urge the Agency to review the RIN assessment again, with the
addition of the new data we provided, and to incorporate its lessons into the finalized RFS levels.
[EPA-HQ-OAR-2015-0111-1957-A2 p. 20] [EPA-HQ-OAR-2015-0111-1044 p.68]
51 Burkholder, Dallas. "A Preliminary Assessment of RIN Market Dynamics, RIN Prices, and Their Effects." U.S.
Environmental Protection Agency Office of Transportation and Air Quality 14 May 2015. Page 29.
Johns Hopkins University
The upper range may result in RIN price increases over the baseline scenario, but in all cases the
RIN prices are significantly lower than observed in 2013. [EPA-HQ-OAR-2015-0111-3273-A 1
p. 36]
Linn & Associates
Now before you think that lower RIN prices are a blessing not a curse, we need to keep in mind
that for obligated parties who have made the proper investment, there is no cost to them outside
of buying the ethanol itself, which is not well correlated to RIN price movements. In fact, at
current market values, blenders earn at least 60 cents per gallon on each gallon of ethanol
bought. It should be noted that after the proposal, ethanol plant margins in Nebraska fell to
roughly break-even, some even a little bit worse. There is also an unintended consequence of this
debasement of the D6 RINs, the narrowing of the D5, D6 RIN spread. As it speaks, we
potentially are sending imports of Brazilian ethanol, molecule for molecule the exact same thing,
heading to the U.S. We could get into a situation where you have the exact same thing crossing
each other in the Atlantic.
N. Bowdish Company
Simply put, your renewable volume obligation proposal for 2014, 2015, and 2016 has already
had a very negative impact on increasing the consumption of renewable fuels in the future as is
evident by the D6 RIN price dropping from approximately 70 cents per gallon prior to your
announcement to the 35 cents per gallon range a few days after. [EPA-HQ-OAR-2015-0111-
1202-A1 p.l] [EPA-HQ-OAR-2015-0111-1044 p.335]
National Biodiesel Board
EPA states that "Congress charged [it] with implementing a program whose explicit goal is
increased renewable fuel use over time." 80 Fed. Reg. at 33,119. EPA then, however, contends it
is seeking to achieve this goal "in a fashion that maximizes flexibility and the power of the
marketplace, while at the same time recognizing the complex and disaggregated structure of the
fuel production and distribution systems." Id. As noted above, NBB disagrees that it has
authority to eschew the directives of Congress in favor of maximizing flexibility and relying on
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the marketplace that Congress clearly intended to change. In any event, EPA's proposal does not
achieve any of these goals. [EPA-HQ-OAR-2015-0111-1953-A2 p.43]
Based on these objectives, EPA contends that it is setting the biomass-based diesel volume at a
level that will allow other advanced biofuels to compete in the advanced biofuel market. EPA
asserts: "Competition is good for obligated parties and consumers, as it permits the market to
determine the most efficient, lowest cost, best performing fuels for meeting the increasingly
higher volume requirements anticipated year to year under the program." 80 Fed. Reg. at 33,102.
The problem with EPA's assertion is that it is factually incorrect in asserting that there is a
market that includes two distinct products that are not substitutes for each other. It is like EPA is
asserting that there is one market for coffee and baby formula simply because both are
beverages. They have different consumers, different purposes, and different factors that affect
the markets. One cannot expect a baby to drink coffee, as one cannot expect gasoline substitutes
to be used to replace diesel fuel. Further, Congress sought to help renewable fuels "compete"
with petroleum fuels, not each other. See E2 2014 Advanced Biofuel Report at 13 ("Success in
this industry requires that advanced biofuels become cost-competitive with their petroleum-based
counterparts, which means advanced biofuel producers must attempt to minimize operating
costs."). Even if EPA's purported goal is to allow for other advanced biofuels, which NBB does
not dispute in theory, its proposed approach would actually undermine those goals. "Without a
clear signal for continued, strong demand, investors will likely look for other markets." Id. at 14.
While Congress understood this, EPA appears to have forgotten this key aspect of economic
theory. [EPA-HQ-OAR-2015-0111-1953-A2 p.43]
EPA explains, the "RFS program, acting through the mechanism of the RIN system, operates to
provide an incentive for renewable fuel producers to increase the production of renewable fuels
by, in effect, increasing the price blenders and obligated parties are willing to pay for renewable
fuels." 80 Fed. Reg. at 33,119. Then, however, EPA goes off track. It states "renewable fuel
producers sell not only the fuels they produce, such as ethanol or biodiesel, but also the RINs
that are 'assigned' to the renewable fuel. As the demand for RINs increases, the willingness of
the market to pay for renewable fuels and the RINs assigned to them also increases." Id. This is
incorrect. The "assigned" RINs generally are not valued separately from the fuel. Rather, the
RIN requirements allow renewable fuel producers to have a certain market for their fuel. Profit
will still largely depend on the feedstock prices and production efficiencies, not on the REST
values. [EPA-HQ-OAR-2015-0111-1953-A2 p.43-44]
The problem with EPA's approach is that, rather than effectuating the intent of Congress, it is
seeking to create a cheaper market for separated RINs. Unfortunately for EPA, the intent of
Congress was not to create a cheap market for separated RINs. Indeed, the credit program was to
reward excess production and, as such, it could be assumed that Congress wanted such reward to
be financial in nature. [EPA-HQ-OAR-2015-0111-1953-A2 p.44]
The RIN value occurs when they are separated from the fuel; that is, when they are used or
blended. The prices of separated KINs, then creates the market incentives to develop renewable
fuel distribution infrastructure by giving distributors and marketers additional financial
incentives to use and blend renewable fuels. While EPA contends that this results in a net
reduction in the purchase price of the renewable fuel, that is not necessarily the driving factor of
use. EPA does recognize that "[b]y increasing the potential profitability of blending renewable
fuels, higher RIN prices can incentivize the build out of the infrastructure necessary to blend and
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distribute renewable fuel blends as parties seek to enter or expand their position within this
market." 80 Fed. Reg. at 33,119. That is the purpose of a mandate. EPA asserts that the program
"likely cannot substantially increase the available supply of renewable fuels to consumers to the
volumes envisioned by Congress in the short term." Id. at 33,120. But, the program did
substantially increase the available supply for biomass-based diesel to volumes above those
envisioned by Congress and in the short term. As such, EPA should continue to support that
program to ensure those continued increases. [EPA-HQ-OAR-2015-0111-1953-A2 p.44]
EPA turns the purpose of a mandate on its head by arguing that the RIN system should result in
reduced costs to consumers which then will create incentives for consumers to purchase the fuel.
80 Fed. Reg. at 33,119. Although the RIN program for biomass-based diesel has reduced the cost
of petroleum fuel for consumers,48 that is not the purpose. If that is all Congress sought, it could
simply continue the tax credits and create subsidies as it did to prop up the petroleum industry.
That's not what Congress did. Moreover, EPA provides no analysis of diesel fuel prices and the
various factors that contribute to the costs at the pump. In fact, Congress knew what it was doing
in requiring a mandate under the RFS2 program because it actually results in lowering the cost of
diesel fuel at the consumer pump. [EPA-HQ-OAR-2015-0111-1953-A2 p.44]
48 See Terminal Pricing Sheet (Attachment 3).
Poet, LLC
commentators have noted that the market has determined EPA's proposed Base Renewable
target to be a failure, finding that the "huge decline in D6 ethanol RINs prices" immediately
following EPA's NOPR release "suggests the market believes ... the proposed ethanol mandates
provide little pressure" for higher volumes of biofuels.1 [EPA-HQ-OAR-2015-0111-2481-A1
p.5]
Edgeworth Economics has determined through modelling that, under reasonable assumptions, it
would be readily achievable for the market to consume 600 million to approximately 1.1 billion
gallons of ethanol in E85, at RIN prices of $0.80 to $1.45, in 2015 and 2016.47 [EPA-HQ-OAR-
2015-0111-2481-Alp.l4]
A still conservative estimate would be that a typical station dispenses twice that much E85—
90,000 gallons per month. Using this higher, reasonable per-station throughput limit, Edgeworth
Economics has determined that 1.5 billion gallons of additional ethanol via increased E85 could
be used, at RIN prices of approximately $1.28. Moreover, retail gasoline prices (of E10) do not
change by more than 1% in any of these scenarios.49 [EPA-HQ-OAR-2015-0111-2481-A1 p. 14-
15]
For instance, Table 1 [The table can be found on p. 13 of docket number EPA-HQ-OAR-2015-
0111-2481-A1] shows E85 volumes in the range of 1.1 to 1.5 billion gallons for 2016, based on
reasonable RIN price scenarios. [EPA-HQ-OAR-2015-0111-2481-A1 p.16]
1 See Scott Irwin and Darrel Good, The EPA's Proposed Ethanol Mandates for 2014, 2015, and 2016: Is There a
'Push' or Notl (June 3, 2015), p. 7, available at http://farmdocdaily.illinois.edu/pdf/fdd030615.pdf.
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47 See Edgeworth Economics, Impact of the RFS Mandate on Motor Fuel Volumes and Prices, 2014-2016 (July
2015)(Attachment 1 hereto to POET comments). [Attachment 1 can be found in docket number EPA-HQ-OAR-
2015-0111-2481-A2.]
49 See generally, the Edgeworth Economics report attached hereto.
Renewable Fuels Association (RFA)
Indeed, evidence of the fact that EPA's proposal requires no change in behavior by obligated
parties is found in recent REST market trends. RIN prices fell dramatically upon the realization
that EPA was proposing 2014-2016 RVO levels that are below the E10 "blend wall." According
to data from the Oil Price Information Service (OPIS), prices for 2015 D6 RINs averaged 71
cents in May 2015, but had plunged by nearly half to just 37.5 cents by June 8, 2015—a week
after the release of EPA's proposal (Figure 2). D6 RIN values have slightly recovered in recent
weeks, but remain far below pre-proposal levels. [EPA-HQ-OAR-2015-0111-1917-A1 p. 25]
Shell Oil Products US
RIN prices are often discussed as a means to create incentives for retailers to invest in
infrastructure to offer E85 and other higher ethanol blends. While it is true, we believe, that if
RIN prices stay high enough, long enough, that might cause some expansion of E85 availability
by enticing retailers (97% of which are independently owned and operated) to invest in new
infrastructure, it is important to keep in mind that there is a time element to this which could
result in RIN shortage that limits gasoline and diesel supply and otherwise adversely affects
consumers and the economy in the interim. [EPA-HQ-OAR-2015-0111-2716-A2 p.3]
Small Refinery Owners Coalition
Driving investment in infrastructure through RIN prices means destroying small business to
reward exempt blenders for thwarting the purposes of the RFS. [EPA-HQ-OAR-2015-0111-
2339-A1 p. 19]
Response:
A commenter stated that RINs are an ineffective tool for encouraging investment and have not
shown the ability to create the incentives needed to increase sales volumes of E85. EPA
acknowledges that the available data indicates that there was a limit to the degree to which
higher RIN prices have impacted the retail price of E85, and thus sales volumes of E85 (see "An
Assessment of the Impact of REST Prices on the Retail Price of E85" for our assessment of this
issue). The commenter noted that any RIN discount a blender passes to retailers varies from
market to market depending on competitive factors. We believe that over time these dynamics
will result in an increasing portion of the RIN value being passed on to consumers in the retail
price of E85, and subsequently increasing sales of E85. In situations where blenders and/or
retailers are able to retain much of the RIN value due to no or low competition, there will be an
opportunity for other parties to enter these markets, increasing the competition and ultimately
benefiting the customers through lower retail prices for E85. As noted by a commenter,
however, this process will take time, and the degree to which higher RIN prices will result in
greater sales volumes of E85 in 2016 will be limited. The standards we are finalizing in this
final rule reflect our current assessment of the fuels market, which is largely non-competitive for
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E85; however we will continue to monitor the markets and expect that future standards will
reflect a changing fuels marketplace.
Conversely, another commenter claimed that the price of RINs are the primary way the RFS
program can incentivize increased consumption of renewable fuels. They claimed that by
proposing to reduce the RFS standards EPA was creating an infrastructure shortage, rather than
responding to one, by reducing the incentive for parties to invest in the infrastructure needed to
distribute higher level ethanol blends. EPA agrees that the price of RINs, along with other
fundamental economic factors such as the relative prices of ethanol and gasoline, can incentivize
the fuels marketplace to invest in the infrastructure needed to distribute and consume higher level
blends of renewable fuels. Based on our review of the available data, however, we have
concluded that higher RIN prices are sometimes limited in their ability to or the speed at which
they can drive increasing sales volumes of fuels containing higher levels of renewable fuels,
particularly E85 in 2016 (see EPA supporting documents "An Assessment of the Impact of RIN
Prices on the Retail Price of E85" and "Correlating E85 consumption volumes with E85 price"
for more detail on our assessment). We anticipate that the total renewable fuel volume for 2016
in this final rule, which is established at the maximum reasonably achievable supply of
renewable fuel in 2016, will provide the necessary incentives for an increased use of renewable
fuels (including E85), as well as the investment in the infrastructure needed to expand the use of
renewable fuels even further in the future.
Several commenters noted that in our proposed rule EPA stated that we expected RIN prices
would likely be higher than historic levels, and that D6 RIN prices instead dropped after the
proposal was released. They claimed that this was an indication that the volumes would not
provide an incentive for growth beyond the E10 blendwall, and that our proposal was already
having a negative impact on the consumption of renewable fuels. We note that REST prices are
impacted by many different factors, not only the RFS standards but also the relative prices of
commodities such as corn, ethanol, crude oil, and gasoline. Nevertheless, EPA has continued to
review the available information, including comments submitted by stakeholders, since our
proposal. Based on this information, including increasing projected gasoline demand and a
better understanding of ethanol exports from the United States, we are finalizing total renewable
fuel standards for each year (2014-2016) that are higher than the proposed standards. The total
renewable fuel standard for 2016 is significantly higher (approximately 1.1 billion gallons
higher) than the total volume of renewable fuel expected to be supplied to the market in 2015.
EPA disagrees with commenters that claimed that our proposed rule reinforces the perception
that EPA is withdrawing support for the RFS program. It is true that we do not believe it is
possible to achieve the statutory volumes in 2014 - 2016. Despite this, EPA continues to support
growth in renewable fuels through the RFS program. The 2016 standards represent our
assessment of the maximum reasonably achievable volume, and as noted above are significantly
higher than the projected available supply of renewable fuels in 2015. We do not think it would
be appropriate to uphold the statutory volumes if we have determined that there will be an
inadequate domestic supply of renewable fuels, nor would it be beneficial to the renewable fuels
market to set the standards beyond what can be achieved. We will continue to monitor the
growth in the ability of the market to produce, import, distribute, and consume renewable fuels,
and we anticipate that our future standards will reflect this growth.
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A commenter stated that because the price of ethanol is not well correlated to RIN price
movements, obligated parties that purchase ethanol and separate and sell the RINs associated
with the ethanol they purchase benefit from high REST prices. This statement is similar to
statements by other commenters that obligated parties that purchase ethanol with attached RINs
acquire RINs for free, and that there is no cost to these parties. It does not consider the relative
prices of ethanol, un-blended gasoline (EO) and blended gasoline (E10), which are important
factors in the economics of fuel blending and the costs of parties that acquire RINs by blending
renewable fuels. Data EPA has reviewed indicates that when RIN prices are high, the price
received for blended fuel (E10) is lower than the price for the component fuels (i.e., the price for
one gallon of E10 is less that the price for the 0.9 gallons of unblended gasoline plus 0.1 gallons
of ethanol that comprise a gallon of E10). For obligated parties that purchase ethanol and sell
blended fuel the "cost" of acquiring RINs is incurred when they sell blended fuel for a lower per
gallon price than the component fuels. Ignoring this cost and focusing solely on the correlation
(or lack of correlation) between the price of ethanol and REST prices inappropriately ignores a
significant element of the fuels market. Any costs incurred by fuel blenders when they sell fuels
containing renewable fuels (such as E10) must be considered in any assessment of the way
various parties are affected by varying RIN prices (see "A Preliminary Assessment of RIN
Market Dynamics, RIN Prices, and Their Effects" for more detail).
A commenter claimed that in EPA's proposal we have prioritized maximizing flexibility and
competition over Congress's intention to increase renewable fuel use over time. EPA disagrees
with this assessment. As this final rule makes clear, we are establishing the total renewable fuel
standard at the maximum reasonably achievable supply of renewable fuels in 2016. In doing so
we have made an assessment of the maximum reasonably achievable volume of biodiesel and
renewable diesel that can be produced, imported, distributed, and consumed in the United States
in 2016, and included this full volume in our assessment of the total renewable fuel supply (see
Section HE of the final rule for further detail). After determining this total volume, we next
considered the portion of this total that could be advanced biofuel, seeking to provide the
necessary incentives for continued growth in advanced biofuels (see Section II.F for more
detail). It is only in the context of the biomass-based diesel standard that EPA has considered
factors such as allowing for non-biodiesel fuels to compete for market share. We believe this is
an appropriate consideration, and in line with congressional intent to promote the ongoing
development and commercialization of advanced biofuels, including, but not limited to, biodiesel
(see Section III of the final rule and Section 3.4 and subsections of the RTC for more
information). This is especially the case as we have included the full maximum reasonably
achievable supply of biodiesel and renewable diesel in the total renewable fuel standard.
A commenter disputes EPA's statement that renewable fuel producers sell not only the fuels they
produce but also the RINs assigned to the renewable fuel, claiming that the RINs generally are
not valued separately from the fuel. With few exceptions, renewable fuels are sold with RINs
attached when they are sold to blenders or obligated parties, and the blender or obligated party's
decision whether or not to purchase the fuel will be influenced both by the expected sales price
for the RIN as well as the liquid fuel. This is no different from the price an ethanol plant is
willing to pay for corn, taking into consideration both the value of the ethanol and animal feed
products it will produce from that corn. EPA disputes that our proposal and this final rule are an
attempt to create lower prices for separated RINs. We note once again that we have established
the total renewable fuel standard at the maximum reasonably achievable volume of renewable
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fuel, not the volume expected to produce a particular RIN price. Contrary to the commenter's
statements, we recognize the ability for the RFS program to incentivize increased production and
use of renewable fuels, and have projected the available supply of renewable fuels with this
demonstrated ability in mind.
EPA's statements that the RIN system should result in reduced costs to consumers is taken out of
context by the commenter. We have stated, and continue to believe, that higher RIN prices
should result in lower effective prices for renewable fuels relative to the price for these fuels
without the impact of the RIN and relative to petroleum fuels. Whether increasing volumes of
renewable fuels will result in higher or lower fuel costs to consumers will be a function of the
cost of production of these fuels relative to the petroleum fuels they displace (see EPA's
supporting document "A Preliminary Assessment of RIN Market Dynamics, REST Prices, and
Their Effects" which is available in the docket for this rulemaking for more detail). While it may
be true that decreasing the cost of biomass-based diesel blends at the pump was not a stated goal
of the RFS program, enabling lower prices through the value of the RIN is the primary
mechanism at work in the program to increase the production, import, distribution, and use of
biomass-based diesel and other renewable fuels. We do not believe it is appropriate to simply
compare the retail price of biomass-based diesel blends to the retail price of petroleum diesel, as
data EPA has reviewed suggest both are significantly impacted by the RFS program through RIN
prices (see "A Preliminary Assessment of RIN Market Dynamics, RIN Prices, and Their Effects"
for more detail). For EPA's illustrative cost estimates of the RFS program see Section III of the
final rule.
A commenter stated that higher RIN prices could enable significantly higher volumes of E85 to
be sold in 2015 and 2016 than projected by EPA and cited a study by Edgeworth Economics as
support. EPA has reviewed this study as well as the paper by Pouliot and Babcock on which it is
based. We disagree with the commenters' assessment of the amount of E85 that can be
consumed in 2016. EPA concluded that two key assumptions made by Babcock and Pouliot (and
subsequently Edgeworth Economics) are not supported by the available data: that sales of E85
will increase in a non-linear fashion beyond the point of price parity with E10, and that the full
RIN value will be passed on to E85 consumers and reflected in the retail price of E85 (for a
further discussion on each of these issues see EPA memos "Correlating E85 consumption
volumes with E85 price" and "An Assessment of the Impact of RIN Prices on the Retail Price of
E85" available in the docket for this rulemaking). A more recent paper published by Babcock
and Pouliot in September 2015 projected much lower E85 sales from metro areas, which are
expected to account for a significant majority of all E85 sales.33 This paper projected E85 sales
of 250 million gallons if E85 was priced at parity on a cost per mile basis (23% less on a cost per
gallon basis) with E10, and 1 billion gallons of E85 if E85 were priced to save drivers 23% on a
cost per mile basis (approximately 50% less on a cost per gallon basis). These projections still
rely on a non-linear relationship between E85 sales and the price ratio at the pump, and we
believe projecting that E85 will be priced 50% less than E10 is not a reasonable assumption
given expected 2016 market conditions. For further details of EPA's assessment of the potential
for E85 see Sections II.E.ii and II.E.iii of the final rule.
33 How Much Ethanol Can Be Consumed in ESS. Bruce A. Babcock, Sebastian Pouliot. CARD Policy Brief 15-BP
54, September 2015.
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EPA disagrees with a comment that "driving investment in infrastructure through RIN prices
means destroying small business to reward exempt blenders for thwarting the purposes of the
RFS". We believe the RFS program is well designed to create market opportunities that provide
the necessary incentives for investment to overcome the potential constraints to increase the
production, import, distribution, and use of renewable fuels. The RIN provisions in the RFS
program were designed specifically to enable compliance by obligated parties that would have
otherwise had much greater difficulty blending renewable fuels into their petroleum fuels
directly. Rather than blend renewable fuels themselves they can purchase RINs from other
marketplace participants that do the blending on their behalf. We do not believe the RFS
program will result in the destruction of small businesses. For further discussion of the point of
obligation in the RFS program see Section 10.6.7 of the RTC.
7.5 Retail Fuel Prices
Comment:
AL-Corn Clean Fuel; Badger State Ethanol; Big River Resources, LLC; Central Indiana
Ethanol (CIE); Husker Ag LLC; Iowa Corn Growers Association (ICGA); Pacific Ethanol,
Inc.; Syngeta; The Andersons, Inc.
If finalized, the rule could have the following effects:
• Increased gas prices. Lower ethanol blending would result in higher gasoline demand and
increased pump prices. According to analysis by Louisiana State University, gasoline
prices would rise 4.1-6.5 cents per gallon in 2015-2016, meaning Americans would spend
nearly $15 billion more on gasoline in 2015 and 2016—or $46 per American citizen over
the two years. [EPA-HQ-OAR-2015-0111-1214-A2 p.5]
American Farm Bureau Federation (Farm Bureau)
Finally, the RFS2 has been integral in keeping gasoline prices at lower price levels. Ethanol is
currently selling at $0.40 per gallon less than a gallon of Reformulated Blendstock for
Oxygenate Blending (RBOB) gasoline. This price spread essentially means that a gallon of E10
(gasoline containing 10 percent ethanol) is more than 4 cents per gallon cheaper than a gallon of
conventional gasoline with no ethanol. At today's market prices, if refiners slow their blending
of ethanol, octane demand would have to be met with other higher cost sources and this higher
cost to the refiner would most likely be passed on to the consumer in the form of higher gasoline
prices at the pump. Higher gas prices will also increase the cost of food, given that energy and
transportation costs are significant factors in determining the price consumers pay for goods.
[EPA-HQ-OAR-2015-0111-2355-A1 p. 3]
Biotechnology Industry Organization
RFS RINs are effectively designed to force technological improvements, and compliance costs
have not been passed to consumers at the pump. There is no correlation between RIN prices and
retail fuel prices, as demonstrated in Figure 7 below, which is a sufficient indication that RIN
costs are not reflected in pump prices. EPA has correctly noted that "rising RIN prices did not
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result in an increase in retail transportation fuel prices in 2013."155 Competitive pressure among
obligated parties employing varying RFS compliance strategies protects consumers from the
costs of RINs. [EPA-HQ-OAR-2015-0111-1958-A2 p. 46]
46 Dallas Burkholder, EPA (OTAQ), A Preliminary Assessment of RIN Market Dynamics, RIN Prices, and Their
Effects 31, (May 14, 2015) (Docket ID No. EPA-HQ-OAR-2015-0111-0062) [RIN Market Dynamics], available at
http://www.regulations.gov/#!documentDetail;D=EPA-HQ-OAR-2015-0111-0062.
Board of Commissioners, Mercer County; Crawford County; Greenville-Reynolds
Development Corporation; Office of Commissioners, Lawrence County, Pennsylvania
There are significant reasons that mandated ethanol blend rates should be lowered. They include:
4. Higher fuel costs. Consumers could see rising fuel prices due to the costs associated with
blending, transporting and distributing higher levels of E85 and El 5 to filling stations that have
no demand for it. [EPA-HQ-OAR-2015-0111-1223-A1 p.2]
Board of County Commissioners of Putnam County, Ohio
The more than thirteen billion gallons of ethanol in the pipeline has reduced our dependence on
foreign oil and given our citizens a lower pump price. [EPA-HQ-OAR-2015-0111-3289-A1 p. 1]
Butamax Advanced Biofuels, LLC
The RFS contains effective mechanisms to stimulate growth in renewable fuels blending well
beyond current trends if targets are set and enforced appropriately. When the target is set beyond
the current trend, the RIN price will rise to level necessary to create the necessary incentives for
parties in the supply chain to offer the products needed to meet the targets. [EPA-HQ-OAR-
2015-0111-1938-A2 p. 1]
Recent analysis posted to the docket by EPA confirms prior analyses by Butamax and many
others that the RFS and RIN prices do not materially impact retail gasoline prices. Further, even
though high RIN prices should not flow through to consumers, refiners and retailers can mitigate
any exposure to the RFS as follows: [EPA-HQ-OAR-2015-0111-1938-A2 p. 8]
East Kansas Agri-Energy, LLC (EKAE)
Having spent a substantial part of my career in trading, sales, business Development and
marketing, I can tell you that the proposal will increase, not decrease, the price of gas, as lower
cost ethanol moves out of the gasoline supply. Gas prices would increase - about $0.06 per
gallon, according to Louisiana State University. [EPA-HQ-OAR-2015-0111-2607-A2 p.2-3]
Energy Policy Research Foundation, Inc. (EPRINC)
EPA will be raising the price of E10 to lower the price of E85, but the magnitude of the cross
subsidy is not easily known nor are the price risks easily contained given uncertainties described
above. [EPA-HQ-OAR-2015-0111-1946-A1 p.2]
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we would caution that any calculation on the cost of producing transportation fuels under EPA
volumetric targets comes with considerable uncertainty. [EPA-HQ-OAR-2015-0111-1946-A1
p.5]
Florida Chamber of Commerce
The costs associated with ethanol also outweigh any perceived benefits, such as lower fuel
prices. Consumers are actually spending more on fuel since Congress first passed the Renewable
Fuel Standard in 2005. Spending on fuel has increased an average of 8 percent per year, with the
average household spending more than $2,600 on fuel in 2013. This is because the energy output
for ethanol is 33 percent less than pure gasoline, so cars are unable to travel as far as they could
on pure gasoline alone. [EPA-HQ-OAR-2015-0111-3425 p.2]
Growth Energy
The proposed volume requirements could hurt American consumers at the gas pump. In fact,
adhering to the volume requirements prescribed by Congress would not cause retail gasoline
prices to rise appreciably, if at all, for two primary reasons. First, blending ethanol into gasoline
tends to result in a significant reduction in retail gasoline prices. Second, as EPA itself has
found, even if volume requirements caused RIN prices to increase, any such increase would have
no discernible effect on retail gasoline prices. [EPA-HQ-OAR-2015-0111-2604-A2 p.75]
More to the point, the reduced blending of ethanol called for by EPA's proposal would cost U.S.
drivers billions of dollars in 2016 alone. One recent analysis determined that reducing ethanol
consumption by 1 bil gal—as EPA's proposal for 2016 would do—"will raise [gasoline prices by
4.1 cents per gallon."4 9 Another study estimated that consumers saved an average of six cents
per gallon of gasoline for every billion gallons of ethanol produced.430 Therefore, with EIA
estimating that U.S. drivers will consume 137 bil gal of gasoline in 2016, the EPA's proposal
could cost consumers between $5.6 and $8.2 billion. [EPA-HQ-OAR-2015-0111-2604-A2 p.75-
76]
Second, any increase in RIN prices would not change this analysis. As EPA has found, higher
RIN prices do not result in higher retail transportation fuel prices.431 This is primarily due to the
lower net cost of renewable fuels enabled by high RIN prices: "While higher RIN prices increase
the cost of RFS compliance for obligated parties purchasing separated RINs, these obligated
A^9
parties generally recover these costs in the price of their petroleum blendstocks." Other studies
have reached the same conclusion: although RIN prices can at times increase in correlation with
retail gasoline prices, increased RIN prices do not cause an in increase in gasoline prices.433 To
the extent retail prices do increase, any movement is modest at most. One recent study found that
RIN prices in the range of $0.75 to $1.50 could incentivize consumption of 1-2 billion gallons of
E85, and doing so would result in an E10 price increase of only 0.51.3%.434 [EPA-HQ-OAR-
2015-01 ll-2604-A2p.76]
Ultimately, the claim that the RFS increases gas prices is a misleading distraction. Wholesale
ethanol has historically traded well below the price of wholesale gasoline. While modest short-
term investments will be needed to overcome the E10 blendwall, those one-time costs will be
dwarfed by the long-term benefit to consumers, who will be able to save money on every trip to
the pump by choosing higher-ethanol blends. The more ethanol in the transportation-fuel supply,
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the more money American drivers will save. [EPA-HQ-OAR-2015-0111-2604-A2 p.76-77]
429
See Renewable Fuels Association, Economic and GHG Impacts of EPA's 2014-2016 Proposed Rule at 1, at
http://www.etnanolrfa.Org/page/-/RFA%20Impact%20of%20EPA%20Proposal 2014-2016.pdf?nocdn=l.
430 Hassan Marzoughi & P. Lynn Kennedy, The Impact ofEthanol Production on the U.S. Gasoline Market, at 15
(Feb. 2012), at http://ageconsearch.umn.edU/bitstream/l 19752/2/Kennedv%20Marzoughi%20SAEA%20-
%202012.pdf.
431 See Report of Dallas Burkholder, Office of Transportation and Air Quality, EPA-HQ-OAR-2015-0111-0062, A
Preliminary Assessment of RINMarket Dynamics, RIN Prices, and Their Effects, at 1, 31 (May 14, 2015)
("Burkholder Report"); see also 80 Fed. Reg. at 33,119 n.49.
432 Burkholder Report, supra note 431, at 31.
433 Informa Economics, Analysis of Whether Higher Prices of Renewable Fuel Standard RINs Affected Gasoline
Prices in 2013, Whitepaper Prepared for the Renewable Fuels Association, at 1, 7 (Jan. 2014) ("2014 Informa
Study") (attached as Exhibit 9).
434 See Impact on Motor Fuel Prices at 8 (attached as Exhibit 1).
Iowa Renewable Fuels Association
RINs Lower Fuel Prices [EPA-HQ-OAR-2015-0111-1957-A2 p. 13]
One of the biggest frauds perpetuated by the petroleum industry is that, somehow, RINs increase
the cost of fuel. While this notion defies common sense for those who understand the RIN and
fuels markets, it quickly gained traction with opponents of the RFS in Congress and, it would
appear, inside the White House. Concerns over RINs driving up consumer fuel prices appeared
to underpin the original 2014 RFS level proposal that has since been withdrawn. [EPA-HQ-
OAR-2015-0111-1957-A2p. 13]
During the public comment period on that proposal, IRFA sought to demonstrate with both
public facts and figures, as well as marketplace logic, that in fact RINs lower fuel prices. We
supplied data to the OMB via a teleconference as well as to the public docket on the proposed
rule. We have updated and expanded our data collection since those comments were made.
[EPA-HQ-OAR-2015-0111-1957-A2p. 13]
For that reason, we noted with special interest the Agency's recently released analysis of RINs
and their impact on both retail motor fuel costs and their role in incentivizing greater access to
higher renewable fuels blends of ethanol and biodiesel.42 [EPA-HQ-OAR-2015-0111-1957-A2 p.
13]
The takeaways from the EPA Office of Transportation and Air Quality's assessment (Study) of
RIN market dynamics, prices and effects are clear: [EPA-HQ-OAR-2015-0111-1957-A2 p. 13]
[EPA-HQ-OAR-2015-0111-1044 p.67]
1. RIN prices do not impact overall fuel prices;
2. RIN prices can reduce the wholesale and retail cost of fuels with high renewable content
like E85 and B20;
3. The RIN program provides a market-based mechanism to allow compliance flexibility for
obligated parties;
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4. To the extent that some obligated parties are impacted differently, these impacts are due
to individual business decisions; and most importantly,
5. RIN prices are the primary way the RFS program can incentivize the increased blending
and consumption of renewable fuels in the US. [EPA-HQ-OAR-2015-0111-1957-A2 p.
13-14] [EPA-HQ-OAR-2015-0111-1044 pp.67-68]
In fact, the EPA analysis concluded: "the RIN market seems to be functioning generally as
expected; providing an incentive for the continued growth of renewable fuels in the
transportation fuel market without causing overall increases to the retail price of transportation
fuel."43 [EPA-HQ-OAR-2015-0111-1957-A2p. 14] [EPA-HQ-OAR-2015-0111-1044 p.68]
Let's examine four of these takeaways in more detail. [EPA-HQ-OAR-2015-0111-1957-A2 p.
14]
1. RIN prices do not impact overall fuel prices The Study noted that even with relatively high
RIN prices in 2013 there was not a corresponding increase in the prices across the entire fuel
pool because "the RIN price, rather than acting as an additional cost, generally acts as a transfer
payment between parties that blend renewable fuels and obligated parties who produce or import
petroleum-based fuels and are required to obtain RINs for compliance purposes."44 [EPA-HQ-
OAR-2015-0111-1957-A2p. 14]
The Study goes on to note that: "High RIN prices are expected to reduce the price of fuel blends
that contain a higher percentage of renewable fuels, such as E85 or B20, while increasing the
price of fuels that contain little or no renewable fuels."45 The notion that obligated parties
increase the price of their non-renewable blends is an area we encourage the Agency to explore
further. This would seem logical if all obligated parties were similarly situated, but they are not.
While the Study correctly notes there are additional strategies to satisfy their obligations (such as
contractual arrangements to retain RINs on unblended fuel or expanding their blending and
distribution infrastructure),46 each obligated party has a different RFS obligation based on their
refining/importing footprint and a different ability to acquire "free" RINs by selling pre-blended
products to their branded retailing network (if they have one). [EPA-HQ-OAR-2015-0111-1957-
A2 p. 14]
A thought experiment will show that the interactions between three hypothetical obligated parties
would lead to RIN values lowering the price of renewable blends, but would not allow the
disadvantaged party to raise the price of non-blended fuels. For the sake of ease we'll give each
hypothetical obligated party a nickname. [EPA-HQ-OAR-2015-0111-1957-A2 p. 14]
"Valera" is a refiner with a large share of the U.S. refining market (and therefore a large share of
the RFS obligation) but a relatively small branded network. This means it often has to purchase
RINs on the open market to meet its RFS obligation. [EPA-HQ-OAR-2015-0111-1957-A2 p. 14]
"EM" is a large refiner whose share of the U.S. refining market and share of retail sales through
its branded network is roughly equal. It may buy and sell RINs on the open market upon
occasion, but its transactions would generally equal out. [EPA-HQ-OAR-2015-0111-1957-A2 p.
14]
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"British Oil" is a refiner with a smaller share of the U.S. refining market and a relatively larger
share of the retail market through its branded retail network. It acquires "free" RINs through its
blending operations far in excess of its RFS obligations and it sells the extra RINs on the open
market. [EPA-HQ-OAR-2015-0111-1957-A2 p. 14-15]
In a competitive market area (whether that be Denver or Des Moines or Dallas), Valera may
want to increase the price of its unblended products to recoup some of its RIN costs. While it
may be able to leverage this through its small branded network, it risks upsetting its branded
retailers with uncompetitive prices. Further, it would lose market share in the fight for the
business of unbranded retailers. After all, with no need to buy RINs on the open market, EM and
British Oil have no need to pass a "RIN cost" through on unblended products. [EPA-HQ-OAR-
2015-0111-1957-A2 p. 15]
We believe the Study's numerous references to passing the RIN costs along on unblended
products is a flaw. Obligated parties like our hypothetical Valera will be "price takers," not
"price makers." They would not raise their prices and, in turn, lose market share. The market
forces them to reduce their profit margins and, likely, look for a better compliance strategy.
[EPA-HQ-OAR-2015-0111-1957-A2p. 15]
(The only way these market forces don't apply is if there is insufficient market competition. If
that is the case, then do not lay the blame for higher prices on the RFS or renewable fuels. After
all, the RFS only adds competition to the marketplace. Any lack of market competition only
highlights the need for robust implementation of the RFS.) [EPA-HQ-OAR-2015-0111-1957-A2
p. 15]
One alternative compliance strategy would be for the hypothetical Valera to reduce prices at the
rack in an attempt to gain unbranded market share, thereby obtaining more "free RINs" by
increasing its sales of renewable blends. In fact, just this sort of action was reported during the
temporary RIN price spike during 2013. Reportedly, a refiner short of RINs aggressively
lowered rack prices and offered discounts to gain blending business and the associated
RINs.47 [EPA-HQ-OAR-2015-0111-1957-A2p. 15]
Another area IRFA would urge the Agency to further review is the Study's comparison of
ethanol and gasoline prices on a net energy basis. For blends up to E30, ethanol is blended for its
octane value and there is no meaningful mileage impact. For those blends, ethanol could be
priced higher than gasoline (even unadjusted for Btu content) and still be lowering the price of
fuel at the retail pump. This is because petroleum alternatives for adding octane to create an 87-
octane product from the standard V-grade fuel (84-octane) are much more expensive than V-
grade. You can witness this easily in Iowa where almost every retail station offers two 87-octane
products, EO and E10. The retail price today for E10 is 23 to 40 cents per gallon cheaper than EO.
(Attachment F) [EPA-HQ-OAR-2015-0111-1957-A2 p. 15]
[Attachment F can be found on p. 49-50 of docket number EPA-HQ-OAR-2015-0111-1957-A2]
2. RIN prices can reduce the wholesale and retail cost of fuels with high renewable
content Continuing our thought experiment supports the observations and conclusions of the
Study on this point. Consider that British Oil may decide to gain market share in the renewable
blends markets by passing some of the RIN value for El 5 or E85 along to non-branded retailers
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to capture market share - or it may be forced to do this by another blender (perhaps an ethanol
plant) that is motivated to pass along the RIN value. [EPA-HQ-OAR-2015-0111-1957-A2 p. 15]
Since the fall of 2013, IRFA has collected weekly wholesale prices of E85 from a number of
suppliers in Iowa - both ethanol plant blenders (publically available data) and traditional
terminal suppliers (courtesy of OPIS). Since that time, the wholesale price of E85 has been
consistently lower than the cost of the components (gasoline and ethanol) used to produce it. As
noted in the Study: "The fuel blender can only profitably sell a blended fuel for less than the
component costs of that fuel if they are realizing value elsewhere."48 [EPA-HQ-OAR-2015-
0111-1957-A2p. 16]
Therefore, IRFA has taken the weekly average wholesale price of ethanol plants49 offering E85
(3 to 5 plants depending on the timeframe) and compared it to the average cost of blending a
gallon of E85 based on that week's wholesale component prices for V-grade gasoline and
ethanol as reported for the Des Moines terminal by OPIS. The discount for preblended E85 from
the ethanol plants was then compared to the national average RIN price for that week prorated by
the percentage of ethanol in the E85 blend at that time (actual ethanol content in E85 can vary
from 70 to 85 percent based on the market and time of year). The full Iowa E85 wholesale price
dataset can be found in Attachment G. [EPA-HQ-OAR-2015-0111-1957-A2 p. 16]
[Attachment G can be found on p. 51-70 of docket number EPA-HQ-OAR-2015-0111-1957-A2]
As you can see from Figure 2, the discount for preblended E85 from ethanol plants closely tracks
the RIN value associated with the ethanol content of the fuel blend. [EPA-HQ-OAR-2015-0111-
1957-A2p. 16]
[Figure 2 can be found on p. 16 of docket number EPA-HQ-OAR-2015-0111-1957-A2]
In fact, the ethanol plants on average sell E85 for even less than one would expect based on RIN
value alone. This is the result of several possible factors including, but not limited to, direct
access to ethanol (no supplier markup), no terminal storage or access charges, use of cheaper
denaturants, and the difference between RINs sold under contract compared to the spot RIN
prices reported by OPIS. The nature of comparing average E85 prices to average RIN prices can
sometimes also lead to lags in correlation due to changes in the ethanol content during certain
times of the year and the time for RIN values to work their way into E85 pricing calculations.
[EPA-HQ-OAR-2015-0111-1957-A2 p. 17]
But two things are clear. E85 is being sold both inside and outside the terminal for less than the
cost of the components to produce the blend and the E85 price discount largely tracks the value
of RINs. [EPA-HQ-OAR-2015-0111-1957-A2p. 17]
Further, while it is very important to understand how RIN values lower the price of blended fuels
like E85 and thereby make them attractive to retailers and consumers, it is equally important to
understand that other factors impact the sales (and potential sales) of E85 as well. The single
biggest determining factor of E85 sales is consumer availability. As Figure 3 below shows, E85
sales in Iowa continued to go up even as RIN prices and petroleum prices retreated from 2013
levels.50 But based on conversations with retailers, the REST value proposition is key to many
decisions to add E85 or a blender pump to their operations. [EPA-HQ-OAR-2015-0111-1957-A2
p. 17]
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[Figure 3 can be found on p. 17 of docket number EPA-HQ-OAR-2015-0111-1957-A2]
The correlation between RIN prices and renewable blends selling at a discounted price compared
to their component value is not limited to E85. Iowa's competitive retail climate also reveals the
same dynamic occurring with E10 sales. While the connection is easier to see in E85 given its
higher ethanol content, it's important to also look at E10 because it makes up the vast majority of
fuel sales in Iowa and nationwide. [EPA-HQ-OAR-2015-0111-1957-A2 p. 18]
Utilizing weekly rack average prices for the Des Moines terminal from OPIS, IRFA compared
the average wholesale price for El0 compared to its component costs (90% V-grade and 10%
E100). Just as before, there is a consistent discount for buying preblended E10. When a retailer
purchases preblended E10, the supplier (and blender in this case) keeps the RIN. If the retailer
purchases the components separately and becomes the blender of record themselves, the supplier
does not keep the RIN. As with E85, IRFA compared the discount for buying preblended E10
with the prorated (10%) national average RIN price. The full Iowa E10 wholesale price dataset
can be found in Attachment H. [EPA-HQ-OAR-2015-0111-1957-A2 p. 18]
[Attachment H can be found on p. 71-90 of docket number EPA-HQ-OAR-2015-0111-1957-A2]
Figure 4 below clearly displays the correlation between the preblended discount for E10 and the
RIN value. Once again, you see see the value of a RIN being passed through and actually
lowering fuel prices. It's also important to note that in this case, all of the E10 options are at the
terminal (no ethanol plant options). Under normal circumstances one might expect a slight
upcharge for preblended E10 because of the service (blending and RIN reporting compliance)
being offered. Yet, the RIN value overcomes these considerations in Des Moines' competitive
market. [EPA-HQ-OAR-2015-0111-1957-A2 p. 18]
[Figure 4 can be found on p. 19 of docket number EPA-HQ-OAR-2015-0111-1957-A2]
If wholesale price data in other markets fails to show a similar correlation, it would be
informative to assess the competitiveness of the local market. As stated earlier, a lack of
competition does not reflect poorly on the RFS, rather it serves to highlight its necessity. [EPA-
HQ-OAR-2015-0111-1957-A2p. 19]
42 Burkholder, Dallas. "A Preliminary Assessment of RIN Market Dynamics, RIN Prices, and Their Effects." U.S.
Environmental Protection Agency Office of Transportation and Air Quality 14 May 2015.
43 Ibid, page 31.
44 Ibid, page 2.
45 Ibid, page 2.
46 Ibid, page 3.
47.Ang, Edgar and Denton Cinquegrana. "Valero's Aggressive Wholesale Mogas Push Coincides with RIN Spike."
OPISBiofuels Update 2 Aug 2013.
48. Burkholder, Dallas. "A Preliminary Assessment of RIN Market Dynamics, RIN Prices, and Their Effects." U.S.
Environmental Protection Agency Office of Transportation and Air Quality 14 May 2015. Page 24.
49 We used the average ethanol plant E85 price because the data shows they are more motivated to pass RIN savings
through to retailers in order to develop the E85 market compared to other potential E85 suppliers.
50 '2015 Retail Fuels Report." National Association of Convenience Stores. Jan 2015, page 10
http://www.nacsonline.convYourBusiness/FuelsReports/2015/Documents/2015-NACS-Fuels-Reportfull.pdf
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Johns Hopkins University
There is very little impact on retail gasoline and diesel prices as a result of changing the
proposed volume standard. [EPA-HQ-OAR-2015-0111-3273-Al p. 37]
The volume scenario proposed by EPA will not dramatically affect the retail price of fuel paid by
consumers. Even if the consumption of E85 is severely constrained in future years, it is unlikely
that retail fuel prices will change dramatically.
Little Sioux Corn Processors
Every gallon of ethanol produced in the United States has a RIN attached to it. The RIN is free,
the marketplace creates a value for the RIN but blending over the 10% level does not push RIN
values higher, the market does and I humbly submit doesn't make gas prices move
higher. [EPA-HQ-OAR-2015-0111-1664-A1]
Mass Comment Campaign sponsored by anonymous 4 (web) - (786)
Despite this, the EPA's proposal assumes that drivers will demand even higher blends of ethanol,
such as E85, at an even greater cost to their wallets. According to a Congressional Budget Office
report issued in June 2014, incentives designed to encourage the sale of E85 will increase costs
of other gasoline blends at the pump. CBO found that the price of regular diesel would increase
by 30 to 51 cents per gallon. The cost for a gallon of E10, the most common transportation fuel
in the U.S., would rise by 13 to 26 cents, the report concluded. [EPA-HQ-OAR-2015-0111-0127
p.l]
Mass Comment Campaign sponsored by Minnesota Corn Growers Association - (784)
You know what else is great about the RFS? It's played a role in loosening Big Oil's grip, at least
a little bit, on my wallet and the overall transportation fuels market. Finally, the oil companies
have some long overdue competition. Since ethanol is less expensive than gasoline on the
wholesale market, blending it with gasoline helps reduce prices at the pump.
You know what else is great about the RFS? It's played a role in loosening Big Oil's grip, at least
a little bit, on my wallet and the overall transportation fuels market. Finally, the oil companies
have some long overdue competition. Since ethanol is less expensive than gasoline on the
wholesale market, blending it with gasoline helps reduce prices at the pump. [EPA-HQ-OAR-
2015-0111-2570-A2 p.l]
National Association of Truck Stop Operators (NATSO)
EPA faces a delicate balance with respect to biodiesel: On the one hand, increasing mandates
under the RFS can enable NATSO members to sell the product to consumers and lower prices
and thereby increase consumer demand for biodiesel; at the same time, if RVOs are set too high,
it could lead to increased prices for diesel fuel, which would have an adverse effect on NATSO
members and the U.S. economy as a whole. [EPA-HQ-OAR-2015-0111-2478-A1 p.2]
Highway travel plazas and truck stops sell 90 percent of all diesel fuel sold at retail in the United
States. NATSO members prefer long markets with a variety of supply options to offer their
customers. As with any successful retailer, NATSO members simply want to sell products that
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their customers want to buy. In their effort to provide the most competitively priced fuel to their
customers, many NATSO members buy and blend biodiesel into the diesel fuel sold at their
locations. While the entire industry is not involved in blending biodiesel, many NATSO
members buy and blend biodiesel into diesel fuel when the blending economics allow them to do
so. As the biodiesel industry matures, more and more truck stop operators are considering
expanding into biodiesel blending.
The success of the Renewable Fuel Standard will hinge on NATSO's members' ability to
acquire, blend, and sell biodiesel on a cost-effective basis relative to traditional diesel
fuel. Given the central importance of trucking and diesel fuel in our nation's supply chain for
goods, low-cost biodiesel not only makes fuel cheaper for fleets and truck drivers, but it
subsequently makes all goods more affordable. [EPA-HQ-OAR-2015-0111-2478-A1 p.3]
In light of the Agency's wise decision to tie RVOs to market realities, achieving this balance
requires EPA to consider the fluid variety of economic factors influencing biodiesel prices in the
United States.
Historically, biodiesel fuel has been more expensive to produce than its petroleum-derived
counterpart. However, a number of federal policies - including the RFS - have encouraged
biodiesel blending and sales.
Under the RFS, for example, NATSO members can acquire biodiesel with Renewable
Identification Numbers ("RINs") attached, blend the product with diesel fuel, and separate the
RINs from the biodiesel. The RIN then becomes a commodity that our members can sell to
obligated parties. This transaction can make biodiesel less expensive than diesel fuel for
NATSO members. A RIN, in effect, closes the price gap between what a refiner or blender
would be willing to pay for the energy value of a gallon of biodiesel and the price for which the
producer is able to sell it and still earn a profit. [EPA-HQ-OAR-2015-0111-2478-A1 p.4-5]
National Taxpayers Union (NTU)
In addition to engine problems caused by higher temperatures, corrosion, and even phase
separation, as ethanol content increases consumers are also subject to overall higher spending on
gasoline. Because a gallon of ethanol contains roughly twothirds the energy of a gallon of
gasoline, as ethanol content increases gas mileage decreases, forcing consumers to fill up more
often. [EPA-HQ-OAR-2015-0111-3279-A1 p.l]
Office of the Lt. Governor, Indianapolis, Indiana
Greater availability of biofuels will also support broader installation of blender pumps and the
manufacturing of more flex fuel vehicles, leading to increased fuel options for consumers, which
will put downward pressure on fuel prices and drive our economy forward. [EPA-HQ-OAR-
2015-01 ll-2482-Alp.2]
Poet, LLC
EPA itself acknowledges that D6 RIN costs do not increase - and tend to reduce - retail gasoline
prices. EPA states that "While RIN prices were significantly higher in 2013 than in previous
years, we did not see, nor would we expect to see, a corresponding net increase in the overall
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1 90 _
retail price of transportation fuels across the entire fuel pool." EPA has similarly found that
"An increase in D6 RIN prices ... is expected to result in a significant decrease in the price of
E85" and "a very small decrease in the price ofEJO"121
Harvard professor James Stock, a former member of President Obama's Council of Economic
Advisers, has similarly found that there is "negligible estimated effect of RIN prices on pump
E10 prices," and if anything increasing RIN price support decreases retail gasoline prices.122
[EPA-HQ-OAR-2015-0111-2481-Alp.33]
120 See EPA, "A Preliminary Assessment of RIN Market Dynamics, RIN Prices, and Their Effects" (May 14,
2015)(hereafter "EPA RIN Market Analysis")(Docket ID No. EPA-HQ-OAR-2015-0111-0062), at 2.
121 Id. at 2. Backing up this analysis, EPA found that, looking at past data, the one "sharp rise in D6 RIN prices did
not have a measurable impact on the prices of ethanol with attached RINs." Id. at. 15.
122 See James Stock, The Renewable Fuel Standard: A Path Forward (April 2015), pp. 19, available at
http://energvpolicv.columbia.edu/sites/default/files/energy/Renewable%20Fuel%20StandardA%20Pat h%20Forwar
dApril%202015 .pdf. Stock finds that if RIN prices increase by $1.00, "In a competitive market, the petroleum
producer passes on the $0.088 extra cost, the blender (who gets to sell the RIN) passes on the $0.10 savings, and the
consumer comes out ahead by $0.012." So, gasoline (E10) prices go down. Id. at 18.
Renewable Fuels Association (RFA)
In reality, there is no evidence that fluctuations in RIN prices have had any impact on retail
prices for gasoline (i.e., E10), and in fact there is evidence, as discussed in previous sections of
these comments, that higher RIN prices result in lower retail prices for fuel blends containing
higher levels of ethanol. [EPA-HQ-OAR-2015-0111-1917-A1 p. 31]
EPA now definitively concludes that "the RIN market seems to be functioning generally as
expected; providing an incentive for the continued growth of renewable fuels in the
transportation fuel market without causing overall increases to the retail price of transportation
fuel."54
EPA's finding is corroborated by analyses conducted by academia and private economic
consulting firms [EPA-HQ-OAR-2015-0111-1917-A1 p. 32]
54Burkholder, Dallas. "A Preliminary Assessment of RIN Market Dynamics, RIN Prices, and Their Effects," U.S.
EPA-Office of Transportation and Air Quality (May 14, 2015). Available at:
http://www.regulations.gov/#!documentDetail;D=EPA-HQ-OAR-2015-0111-0062
State of Indiana
Ethanol lowers gas prices by $1.09 per gallon in the Midwest, saving the average American
household $1,200 per year. [EPA-HQ-OAR-2015-0111-3347-A1 p.2]
Response:
We received a wide range of comments on the potential impacts on gasoline and fuel prices and
costs to consumers that result from either raising the RFS volumes above their current levels, or
from waiving the RFS volumes below the statutory volumes. Some claimed that the RFS
increased fuel prices, while others claimed that the RFS reduced fuel prices. Still others claimed
that the RFS had little-to-no effect on retail fuel prices whatsoever. EPA acknowledges the
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impact that greater renewable fuel production and consumption has had on energy security, as
well as the potential for renewable fuels to impact transportation fuel prices.
Several commenters claimed that our proposal to use our waiver authorities to reduce the
statutory volumes would lead to lower ethanol blending, which would in turn lead to increased
gasoline prices. In doing so these commenters assume that if EPA were to maintain the statutory
volume for total renewable fuel in 2016, then more ethanol would be used. We disagree with
this assumption, as we believe the total renewable fuel standard for 2016 in this final rule
represents the maximum reasonably achievable volume of renewable fuel; maintaining the
unattainable statutory volumes would not result in increased use of ethanol. The impacts
highlighted by the commenters therefore are hypothetical rather than real. The fact that our
proposed (and final standards) require increased volumes of renewable fuels, not decreased
volumes is not reflected in their comments. In their comments they also tend to ignore the
energy content of ethanol. While ethanol is generally cheaper than gasoline on a per gallon
basis, it is currently more expensive per unit energy. This means that even in situations where
ethanol costs less per gallon than gasoline, drivers often must pay more on a per mile traveled
basis when buying fuels that have a higher ethanol content.
The vast majority of the benefits of ethanol blending in the studies cited by commenters result
from blending ethanol into gasoline at a 10% level (E10). We anticipate that almost all gasoline
in the United States would be blended with 10% ethanol with or without the RFS standards, as
this is generally a profitable practice for fuel blenders and retailers (this is why the blending of
ethanol as E10 increased faster than otherwise required by the RFS standards until 2013), and
since the gasoline market is already virtually saturated with E10, any higher RFS standards
would not increase E10 use further. Additionally, the total renewable fuel standard for 2016 is
significantly higher than in any previous year. It is highly unlikely that refiners and blenders will
reduce their blending of ethanol into gasoline in response to these standards. Finally, the total
renewable fuel standard is set at the maximum reasonably achievable supply of renewable fuels
in 2016, including the maximum supply of ethanol that we think can be consumed in
2016. Maintaining the statutory total renewable fuel standard is unlikely to result in additional
blending of ethanol, or any other renewable fuels, into the transportation fuel supply of the
United States relative to the volumes we are finalizing in this rule, resulting in no further
reduction in gasoline demand or supply. Reducing the required volume of total renewable fuel to
the levels in this final rule therefore is unlikely to result in the loss of any of the commenter's
claimed benefits to fuel prices in the real world.
Commenters also presented studies, including those conducted by EPA, suggesting that RIN
prices do not impact gasoline prices. Many implied that because of this EPA should set higher
standards, and that the higher RIN prices that would result would incentivize additional
renewable fuel production and distribution without negatively impacting consumers through
higher gas prices. We acknowledge that studies by EPA and others found that higher RIN prices
in 2013 and 2014 had little to no impact on retail E10 prices, however we also note that we found
that higher RIN prices did cause higher retail diesel prices. Perhaps more importantly, each of
these studies considered only historical data, when obligated parties were able to meet their
obligations through increased use of renewable fuels and the use of abundant carryover
RINs. They did not consider a scenario where obligated parties were unable to meet their
obligations, such as would be the case if EPA were to enforce the statutory volumes in 2014 -
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2016. In these cases it is possible that RIN prices may begin to cause increases in both retail
gasoline and diesel prices. We also do not believe that the available data support statements by
commenters on the degree to which higher RIN prices can result in additional sales of E85. For
a further discussion on this issue see Section II.E.2 of the final rule, Sections 2.3.2 and 2.7.1 of
the RTC, and EPA's supporting documents "An Assessment of the Impact of REST Prices on the
Retail Price of E85" and "Correlating E85 consumption volumes with E85 price". Finally, these
studies are focused on the impact of RIN prices on retail fuel prices, not the impact of renewable
fuel volumes of fuel prices or overall consumer costs. Even when RIN prices are very low (as
they were prior to 2013), renewable fuels may still be more costly to consumers - particularly on
a per mile driven basis. As long as renewable fuel costs are greater than the cost of the
petroleum fuels they replace, the RFS standards will increase overall fuel costs to consumers less
any impact that the RFS volumes might have on depressing overall world fuel prices (e.g., crude
oil prices). In section III of the final rule we provide illustrative cost estimates of the final RFS
standards.
Some commenters requested that EPA lower the mandated ethanol blend rate to protect
consumers from higher fuel prices. None of the standards in this final rule require the use of
ethanol, and EPA does not mandate an ethanol blend rate. Reducing the total renewable fuel
standard would reduce the incentives for the blending of all renewable fuels, including ethanol,
which could have the result the commenter desires. The RFS program, however, was explicitly
designed to increase the production, distribution, and use of renewable fuels, including both
ethanol and non-ethanol fuels. EPA only has authority to reduce the volume for total renewable
fuel below the level in our proposed rule in situations where there is an inadequate domestic
supply of renewable fuel or when the standards would cause severe economic or environmental
harm. Protecting consumers from the possibility of higher fuel prices is not a sufficient
justification in and of itself for EPA to reduce the total renewable fuel volume further.
A commenter stated that the RFS program contains effective mechanisms to stimulate growth in
renewable fuels if the standards were set appropriately. We agree that the RFS program can
stimulate additional growth in the production, distribution, and use of renewable fuels. We note,
however, that many of the changes and investments necessary to increase the production,
distribution, and use of renewable fuels take time, and the ability of the market to respond to
ambitious standards and increase the renewable fuel supply in 2016 is limited. We have
considered the ability for the RFS program to incentivize an increasing supply of renewable fuels
in 2016, and have established the total renewable fuel standard at the maximum reasonably
achievable supply in light of these incentives. For further discussion on this issue see Section
HE of the final rule and Section 2.3.2.
A commenter stated that any calculation of the cost of production of transportation fuels under
EPA's standards comes with considerable uncertainty. We agree with this commenter. Many
factors that cannot be predicted with precision, such as the price of oil and the price of corn and
other renewable fuel feedstocks, will impact the cost of renewable fuels and traditional
petroleum based fuels.
A commenter claimed that the costs associated with the use of ethanol as transportation fuel
outweigh the benefits. Without weighing in on the validity of the commenter's assessment, we
note that EPA is not authorized to establish the total renewable fuel standard at the level that
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achieves the highest net benefits. Doing so would not be an appropriate use of EPA's general
waiver authority.
A commenter disputed a claim made by EPA in a supporting document to the proposed rule ("A
Preliminary Assessment of RIN Market Dynamics, RIN Prices, and Their Effects") that
obligated parties are generally able to recover the price of RINs through increased prices for their
petroleum blendstock, and that because of this, higher RIN prices actually lower transportation
fuel prices. Central to the arguments made by the commenter is the idea that obligated parties
that obtain RINs by blending ethanol get them for "free." As discussed in the supporting
document mentioned above, we do not believe this is the case. EPA presented data that revealed
that parties that were selling gasoline blended with 10% ethanol (E10) were selling it for less
than the price of the two component fuels (in other words, they were selling E10 for less than
90% of the per gallon gasoline price plus 10% of the per gallon ethanol price). The commenter
presents data that shows that in Iowa fuel blenders are currently selling E10 and E85 at prices
less than the cost of the components of each of these fuels (i.e. 0.9 gallons of gasoline and 0.1
gallons of ethanol for E10). Thus, while they were acquiring RINs through blending ethanol, if
we assume these RINs were free these parties were losing money for every gallon of E10 they
sold. While the obligated parties were not directly paying for RINs, there was a cost associated
with obtaining them. This cost was approximately equal to the value of the D6 RINs obtained
through blending, thus parties that obtain RINs by blending E10 and E85 "pay" for the RINs by
selling blended fuels at a loss in order to acquire the RINs associated with the renewable fuels
they blend. If all parties have approximately the same cost for acquiring RINs, whether they do
so through purchasing separated RINs or by purchasing ethanol with attached RINs and selling
blended products, and these costs are directly related to the volume of unblended fuel they sell
(because of the obligations associated with selling petroleum based fuels) it is reasonable to
assume they will increase the price of the petroleum products to recover this costs. This
conclusion is supported by comparing the price of fuels with a RIN obligation to very similar
fuels without a RIN obligation (for a further discussion of these issues see "A Preliminary
Assessment of RIN Market Dynamics, RIN Prices, and Their Effects").
This commenter also discussed the ability for RIN prices to reduce the retail price of fuels with
high renewable content such as E85. The RIN value can theoretically be used to discount fuels
with high renewable content, and in some parts of the country and some parts of the market, such
as wholesale E85 prices in Iowa, it is indeed happening. Currently, however, a lack of
competition is preventing the full value of the RIN to be passed along to consumers in the retail
price of E85. This, along with the fact that current data reveal that consumers are purchasing
significantly less E85 when it is priced lower than E10 on an energy content basis, limits the
potential for higher RIN prices to result in greater E85 sales in 2016 (see EPA supporting
documents "An Assessment of the Impact of RIN Prices on the Retail Price of E85" and
"Correlating E85 consumption volumes with E85 price" for a further discussion of these topics).
EPA disagrees with comments that stated that in blends up to E30 ethanol is blended for its
octane value and that there is no meaningful mileage impact. While it may be possible to design
and build future engines that are optimized for higher octane fuels that minimize or potentially
even eliminate the mileage impact of E30 relative to E10, the current vehicle fleet is not
optimized to operate on E30 and would only benefit to a small degree if at all from the increased
octane. Vehicles in the existing fleet would be expected to experience approximately a 6%
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mileage reduction when operating on E30 relative to E10 and a 10% reduction when operating
on E30 relative to EO based on the lower energy content of ethanol.
A commenter recognized the impact that increasing RFS standards can have in the diesel fuel
market, stating that "increasing mandates under the RFS can enable NATSO members to sell the
product to consumers and lower prices and thereby increase consumer demand for biodiesel; at
the same time, if RVOs are set too high, it could lead to increased prices for diesel fuel, which
would have an adverse effect on NATSO members and the U.S. economy as a whole." They
support EPA's decision to consider market realities in establishing the RFS standards. EPA
generally agrees with the commenter's assessment of the impact of the RFS standards on the
diesel fuel market, including the potential for high RIN prices to increase diesel fuel
prices. Though it should be pointed out that even at achievable RFS volumes, the impact of
RINs on fuel prices does not necessarily reflect the impact on fuel costs to consumers, as the
lower price of the renewable fuel is generally subsidized by increases in prices of petroleum
fuels. The renewable fuel price (e.g., biodiesel) is enabled to be lower because the petroleum
fuel (e.g., diesel fuel) price is higher. As long as renewable fuel costs are higher than petroleum
fuel costs, there is a net increase in fuel costs.
EPA acknowledges that a gallon of ethanol contains less energy than a gallon of gasoline, and
that if ethanol blended fuels are not handled properly that they can cause harm to engines. These
factors, however, are not directly related to the standards established in this final rule, especially
as none of the standards specifically require the use of ethanol.
A commenter stated that greater availability of biofuels will lead to the broader installation of
blender pumps and more flex fuel vehicles. While this may be the case, we note that the United
States already produces and imports more ethanol than can be consumed in domestic
markets. Our final standards for 2016 take into account any new blender pumps or FFVs that
may be attributable to this greater availability of ethanol (see Section II.E.2 of the final rule for
further discussion of EPA's assessment of the market's ability to produce, import, distribute, and
consume ethanol in 2016).
7.6 Energy Security
Comment:
American Farm Bureau Federation (Farm Bureau); Indiana Farm Bureau
Impact on Energy Security and Policy
The RFS2 has been playing a critical role in improving the energy security of the United States.
The crude oil market is notoriously volatile, influenced by the complex interplay of economic
and political variables that are largely beyond the control or even the effective influence of
American companies or the U.S. government. Recent history amply attests to the disruptive
potential of volatile energy markets. For example, in 2008 the price of crude oil reached an
historic high of nearly $145 per barrel on July 1 only to crash to $31 per barrel by the end of the
year. Just last fall crude oil was trading near $100 per barrel but dropped as low as $44 per barrel
by mid-January of this year. [EPA-HQ-OAR-2015-0111-2355-A1 p. 4]
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Clearly, the crude oil market is highly unpredictable, leaving American businesses and
consumers vulnerable to severe price shocks that stifle business investments, redirect consumer
spending from other sectors of the economy, and impede economic growth. Developing a
comprehensive, domestic energy source is a critical hedge against foreign sources of energy
market volatility, and keeping the RFS2 as it is in the 2007 EISA serves as a key component to
achieving this overall goal. [EPA-HQ-OAR-2015-0111-2355-Al p. 4]
Board of County Commissioners of Putnam County, Ohio
The more than thirteen billion gallons of ethanol in the pipeline has reduced our dependence on
foreign oil and given our citizens a lower pump price. [EPA-HQ-OAR-2015-0111-3289-A1 p. 1]
Cornelius Seed Corn Company
The RFS has been great for my home state of Iowa. Because of ethanol and other biofuels,
thousands of jobs have been created, and we've created a domestic source of fuel that decreases
our dependence on foreign oil. [EPA-HQ-OAR-2015-0111-3247-A1 p.l]
Growth Energy
The RFS plays a crucial role in cushioning the impact of price disruptions due to shocks in the
price and supply of oil, by stimulating increased production and consumption of domestic
renewable fuels. As was anticipated in the RFS, ethanol in particular has been critical to the
United States' improved energy independence. The surge in ethanol production due to the RFS
has increased the volume of domestic fuel available by about 10%, and allowed the United States
to switch from a net importer of finished gasoline to a net exporter.452 In doing so, the RFS has
decreased U.S. dependence on foreign energy sources and lowered gas prices.453 In 2005—just
prior to implementation of the RFS—60% of petroleum products were imported, but this was
reduced dramatically to 33% in 2013.454 As found by the Department of Energy, petroleum
imports would have been markedly higher (41%) without ethanol.455 In fact, ethanol production
accounts for 58% of the fuel supply growth between 2005 and 2011.456 Without the RFS, there
would be little competitive alternative to imported oil. [EPA-HQ-OAR-2015-0111-2604-A2
p.79-80]
As in other areas, EPA merely pays lip service to its statutory obligations. It observes, "By
aiming to diversify the country's fuel supply, Congress also intended to increase the Nation's
energy security."457 But, as explained above, EPA's proposal would in effect maintain current
levels of production and consumption of ethanol-based renewable fuels and therefore would fail
to advance the goal of ensuring the Nation's energy independence and security. [EPA-HQ-OAR-
2015-01 ll-2604-A2p.80]
452 Urbanchuk, Contribution of the Ethanol Industry to the Economy of the United States in 2014, supra note 414, at
5.
453 Philip K. Verleger, Jr., RFS Kept Gas Prices Down, The Hill, Jan. 23, 2014, at http://thehill.com/blogs/congress-
blog/energy-environment/196135 -rfs-kept-gas-prices-down.
454 See U.S. Dept. of Energy, Alternative Fuels Data Center, at
http://www.afdc.energy.gov/fuels/ethanol benefits.html (last visited July 21, 2015).
455
Id.
Ill,
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456 Id. at 9.
457 80 Fed. Reg. at 33,101.
Kentucky Beverage Association
Similarly, arguments stating that the RFS is needed to reduce our foreign dependency on oil have
simply not proved true. From 2007 to 2012, increased ethanol production had no effect on
gasoline production. The recent increase of American production of oil has further decreased any
American dependency on foreign fuels. [EPA-HQ-OAR-2015-0111-2356 p.2]
Mass Comment Campaign sponsored by anonymous 7 (email) - (82)
I also know and have seen firsthand the ways in which America's addiction to foreign oil is
putting American lives at risk. That's why I urge you to consider not only the financial, but also
the human cost of our addiction to oil. As you consider your proposal to drastically change the
RFS, remember that these changes will increase the burden on American families, our economy
and our soldiers by directly linking us to the volatility of the global oil market and those who
control and benefit from it. [EPA-HQ-OAR-2015-0111-0209-A1 p.l]
Since 2005, the RFS has increased the amount of renewable fuel that is blended into our gasoline
supply, and this increase has dramatically reduced foreign oil interests' stranglehold on our
marketplace, helping to decrease foreign oil imports by more than 50 percent. But EPA's
proposal would increase America's consumption of oil from hostile foreign regions, and risk
sending more troops into harm's way for the benefit of foreign oil interests. [EPA-HQ-OAR-
2015-0111-0209-A1 p.l]
America remains a net importer of oil. The more foreign oil America consumes, the more
embroiled our nation becomes in conflicts in unstable, oil-rich regions. Moreover, foreign oil
imports drive up the global price of oil, helping to fill the coffers of America's enemies overseas,
who depend on oil profits to fund hostility and instability. Homegrown, renewable fuels can help
end this cycle. [EPA-HQ-OAR-2015-0111-0209-A1 p.l]
This rule, as proposed, is a win for foreign oil interests and a loss for consumers. We should be
investing in secure, American energy here at home instead of sending nearly a billion dollars a
day overseas. This rule is exactly what foreign interests and cartels like OPEC love. It shows that
the U.S. is not serious about developing real alternatives to foreign oil. [EPA-HQ-OAR-2015-
0111-0209-A1 p.l]
We must move forward, not backward, when it comes to developing alternatives to fossil fuels
and foreign oil. Renewable fuel is the clear answer to decreasing our dangerous dependence on
foreign oil. Biofuels are better for our national security, energy security and climate security, and
they benefit veterans like me by opening the door to competition and savings at the pump. [EPA-
HQ-OAR-2015-0111-0209-A1 p.l]
After years of success with the RFS, we must not move backward. We have tripled our supply of
renewable fuel, and the ethanol industry alone has created nearly 400,000 green, secure jobs that
can't be sent overseas. We must capitalize on that momentum and continue to invest in the future
development and commercial scale production of next generation biofuels. A rule such as this
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would slow any further innovation, investment and growth in an industry that is fueling
America's security. [EPA-HQ-OAR-2015-0111-0209-A1 p.2]
Mass Comment Campaign sponsored by anonymous 9 (email) - (230)
If these volumes are not increased, we will simply continue our dangerous dependence on
foreign oil and ensure that dirty fossil fuels continue to pollute our environment. [EPA-HQ-
OAR-2015-0111-0212-A1 p.l]
Mass Comment Campaign sponsored by anonymous 11 (email) - (695); Mass Comment
Campaign sponsored by anonymous 30 (email) - (26); Mass Comment Campaign
sponsored by anonymous 31 (paper) - (301)
• If these proposed volumes are not increased, we will simply continue our dangerous
dependence on foreign oil and ensure that dirty fossil fuels continue to pollute our
environment. [EPA-HQ-OAR-2015-0111-2560-A1 p.l]
• With these cuts, our nation will not see the dramatic decrease in greenhouse gas (GHG)
emissions assumed under the RFS. With full implementation, the RFS would reduce
GHG emissions by 138 million metric tons, which is the equivalent of taking 27 million
cars off the road. [EPA-HQ-OAR-2015-0111-2560-A1 p.l]
This proposed rule, as it stands, is a win for oil companies and a loss for consumers and farmers.
We should be investing here at home instead of sending nearly a billion dollars a day overseas to
Big Oil. This rule is exactly what groups like OPEC love — it shows that the U.S. is not serious
about developing real alternatives to foreign oil. [EPA-HQ-OAR-2015-0111-2560-A1 p.2]
Over the last 40 years we have experienced price shock after price shock due to unrest and
instability in the Middle East. Egypt, Libya, Saudi Arabia, Kuwait, Iraq, Iran and Syria are all
unstable oil producing nations in a region where the slightest disruptions can have a drastic
ripple effect on the supply and price of oil. [EPA-HQ-OAR-2015-0111-2560-A1 p.2]
Wars have been fought, trillions of dollars have been spent to protect the flow of oil and trillions
more of our wealth has been transferred to foreign nations. But most importantly, the precious
lives of American soldiers have been lost due to our addiction to foreign oil. [EPA-HQ-OAR-
2015-0111-2560-A1 p.2]
Mass Comment Campaign sponsored by anonymous 15 (email) - (2485)
If these proposed volumes are not increased, we will simply continue our dangerous dependence
on foreign oil and ensure that dirty fossil fuels continue to pollute our environment. [EPA-HQ-
OAR-2015-0111-0217-A1 p.l]
This rule, as it stands, is a win for oil companies and a loss for consumers. We should be
investing here at home instead of sending nearly a billion dollars a day overseas. This rule is
exactly what groups like OPEC love - it shows that the U.S. is not serious about developing real
alternatives to foreign oil. Over the last 40 years we have experienced price shock after price
shock due to unrest and instability in the Middle East. Egypt, Libya, Saudi Arabia, Kuwait, Iraq,
Iran and Syria are all unstable oil producing nations in a region where the slightest disruptions
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can have a drastic ripple effect on the supply and price of oil. Wars have been fought, trillions of
dollars have been spent to protect the flow of oil and trillions more of our wealth has been
transferred to foreign nations. But most importantly, the precious lives of American soldiers have
been lost due to our addiction to foreign oil. [EPA-HQ-OAR-2015-0111-0217-A1 p.1-2]
Mass Comment Campaign sponsored by anonymous 33 (paper) - (164)
If these proposed volumes are not increased, we will simply continue our dangerous dependence
on foreign oil and ensure that dirty fossil fuels continue to pollute our environment. [EPA-HQ-
OAR-2015-0111-2957-A1 p.l]
We should be investing here at home instead of sending nearly a billion dollars a day overseas.
This is our opportunity to show the U.S. is serious about developing real alternatives to foreign
oil. [EPA-HQ-OAR-2015-0111-2957-A1 p.l]
Mass Comment Campaign sponsored by Corn, LP (web) - (37); Mass Comment Campaign
sponsored by Little Sioux Corn Processors (web) - (44); Mass Comment Campaign
sponsored by Quad County Corn (web) - (37); Mass Comment Campaign submitted by
employees of Siouxland Energy Cooperative (web) - (30)
The RFS is working for energy security. Ethanol already makes up 10% of our nation's fuel
supply, while U.S. dependence on foreign oil has decreased from 61% in 2005 to 28% in 2014.
Without the production of 14.3 billion gallons of American-made ethanol last year, net imports
would have been 35%. Here at Corn, LP, we are proud to be manufacturing an Iowa product that
displaces foreign oil. In 2014, U.S ethanol production displaced an equivalent of 512 million
barrels of imported crude oil, slightly more than all the oil the U.S. imports from Saudi Arabia.
[EPA-HQ-OAR-2015-0111-2047-Alp.l-2]
On the other hand, it saddens us that exports of our locally-produced ethanol reached a record
high last year due to EPA's delay in finalizing the RVOs. These gallons should have been
blended into domestic transportation fuels, giving Americans even greater access to cleaner-
burning ethanol blends instead of fueling cars in South Korea and the Philippines. Let's give our
consumers more fuel choices and healthier air to breathe by restoring RVO levels to fulfill
Congressional intent. [EPA-HQ-OAR-2015-0111-2047-A1 p.2]
Mass Comment Campaign sponsored by employees of Western Dubuque Biodiesel (web) -
(1)
The RFS is working for energy security. This forward-looking policy has already achieved a
decrease in this country's dependence on foreign oil. Oil imports have already decreased from
61% in 2005 to 28% last year. Here at Western Dubuque Biodiesel, we are proud to be
manufacturing an Iowa product that displaces foreign oil with a clean-burning, efficient fuel.
[EPA-HQ-OAR-2015-0111-1961-Alp.l]
Here in Iowa, since 2010 when RFS2 went into effect, both biodiesel production and biodiesel
sales have soared, multiplying by a factor of roughly four and a half. Biodiesel production has
jumped from 48 million gallons in 2010 to 227 million gallons in 2014, while total B100 sales in
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Iowa have expanded from 7.4 million gallons in 2010 to 33.3 million gallons in 2014. [EPA-HQ-
OAR-2015-0111-1961-A1 p.l]
Mass Comment Campaign sponsored by POET Biorefining 1 (paper) - (692)
For me personally, the EPA should enforce the law as written for the additional reasons:
need to support local farmers and local communities with renewable fuel production rather than
continued support of foreign oil. [EPA-HQ-OAR-2015-0111-2963-A1, p.10]
Mass Comment Campaign sponsored by unknown organization 23 (email) - (10)
By growing this cleaner, greener, renewable fuel source, the more independent we are from
OPEC. We should look to the honest, hardworking American farmer than the volatile Middle
East for our energy needs. [EPA-HQ-OAR-2015-0111-1479-A1 p.l]
Michigan Corn Growers Association
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 36-37.]
Second, we're proud that ethanol plays an important role in boosting national security. The use of
ethanol prevents more than $44 billion every year from being sent to other nations to pay for
imported oil, and our military doesn't need to be deployed to defend our cornfields. We believe
that we can build on the tremendous accomplishments achieved to date by America's biofuels
industry. Ethanol has revitalized rural communities in Michigan, reduced our dependence on
foreign oil, and reduced our greenhouse gas emissions not just in Michigan, but across the
nation. It's a product corn growers take pride in.
Minnesota Farm Bureau
In addition to the economic impact renewable fuels has on Minnesota's economy, the RFS2 has
reduced our country's dependence on foreign crude oil and reduced air pollution [EPA-HQ-
OAR-2015-0111-2263-A1 p. 1]
Minnesota Soybean Processors (MnSP)
It is appropriate to remind EPA that the statute that authorizes EPA to oversee the RFS program
is titled "Energy INDEPENDENCE and Security Act of 2007. (Emphasis added.) It is a stretch
to imagine that Congress desired to rely on foreign biofuel to achieve energy independence. We
ask EPA to pay particular attention to NBB's comments relative to the harm potentially imposed
to the domestic biodiesel industry by foreign produced imports. [EPA-HQ-OAR-2015-0111-
2505-A1 p.3]
Monsanto
Beyond agriculture, the RFS is a policy tool designed to reduce our dependence on oil,
delivering environmental, economic, and security benefits to our nation. Since 2007, the RFS has
not only driven a significant increase in direct domestic and foreign investments, but also driven
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economic growth by the direct reduction in gas prices. Every year the RFS offsets millions of
gallons of foreign oil imports, keeping investments and jobs growing in the U.S., while spurring
innovation and industry collaboration to further advance technology that supports low carbon
fuel. [EPA-HQ-OAR-2015-0111-1945-A1 p.l]
National Biodiesel Board
EPA admits that the "wider use of any advanced biofuels, including BED and sugar cane or
sorghum ethanol, diversify the U.S. liquid fuel mix and provide energy security benefits." EPA-
HQ-OAR-2015-0111-0008 at 5. As such, EPA simply asserts that the supplemental analysis
"does not appear to suggest a distinct energy security advantage associated with selecting any
particular BED applicable volume." Id. at 5-6. Again, EPA's supplemental analysis lacks any
actual analysis. Rather it is a mere conclusory statement based on the fallacy that increasing the
biomass-based diesel requirement will only shift the advanced biofuels used. [EPA-HQ-OAR-
2015-01 ll-1953-A2p.52]
Instead, increasing the biomass-based diesel requirement will "diversify the U.S. liquid fuel mix
and provide energy security benefits" in allowing for greater advanced biofuel volumes.53
"While securing accessible and affordable feedstock is a challenge to the industry, the range of
different feedstocks serves as a strength to an industry that is working to diversify transportation
fuel choices." E2 2014 Advanced Biofuel Report at 17; see also Denial of API/AFPM
Reconsideration Petitions at 15-16 ("Energy security does not solely relate to the amount of
imported oil but also to the ability of the U.S. to diversify and rely on domestic sources of energy
to meet the energy needs of the U.S. ... Creating a new fuel supply that has a different, and likely
reduced, probability of disruptions provides an energy security benefit because it reduces
'financial and strategic risks caused by potential sudden disruptions in the supply of imported
petroleum to the U.S.'"). [EPA-HQ-OAR-2015-0111-1953-A2 p.52]
It cannot be disputed that increased use of biodiesel promotes energy security, and biodiesel
production and use will contribute to a U.S. energy security benefit. See, e.g., 76 Fed. Reg. at
38,869 77 Fed. Reg. at 59,470-59,471. Biodiesel plays a major role in expanding domestic
refining capacity and reducing this country's reliance on foreign oil. In addition, biodiesel is an
extremely efficient fuel that creates 5.5 units of energy for every unit of fuel that is required to
produce the fuel. [EPA-HQ-OAR-2015-0111-1953-A2 p.68]
As stated by the EPA, a higher applicable volume "will assure an increased use of biomass-based
diesel in the U.S. and help to improve U.S. energy security. Reducing U.S. petroleum imports
and increasing the diversity of U.S. liquid fuel supplies lowers both the financial and strategic
risks caused by potential sudden disruptions in the supply of imported petroleum to the U.S." 77
Fed. Reg. at 59,470. Further, EPA recognized "[e]nergy security does not solely relate to the
amount of imported oil but also to the ability of the U.S. to diversify and rely on domestic
sources of energy to meet the energy needs of the U.S. ... Therefore, 'regardless of the
incremental effect of this proposal on net imports, increasing the diversification of the U.S. and
global diesel fuel pools would likely confer some reduction in the severity of a future potential
disruption in the world oil market.'" Denial of API/AFPM Reconsideration Petitions at 15
(citation omitted). [EPA-HQ-OAR-2015-0111-1953-A2 p.68]
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When analyzing the 2013 biomass-based diesel volume, EPA found 280 million gallons of
biodiesel equals about 255 million gallons of diesel equivalent. Based on analysis of historical
and projected future variation in U.S. petroleum consumption and imports, EPA estimated that
approximately 50 percent of the reduction in fuel consumption resulting from adopting
renewable fuels is likely to be reflected in reduced U.S. imports of refined fuel, while the
remaining 50 percent is expected to be reflected in reduced domestic fuel refining. Of the latter,
90 percent was anticipated to reduce U.S. imports of crude petroleum for use as a refinery
feedstock, while the remaining 10 percent was expected to reduce U.S. domestic production of
crude petroleum. EPA then estimated each gallon of fuel saved due to the RFS reduces total U.S.
imports of petroleum by 0.95 gallons, providing approximately $0.15/gallon benefit. 77 Fed.
Reg. at 59,470-59,471. The 300 million gallon increase proposed by NBB would provide at least
$42.75 million in additional energy security benefits. [EPA-HQ-OAR-2015-0111-1953-A2 p.68]
53 Soybean oil remains a significant feedstock for the U.S. biodiesel industry, and "U.S. farmers planted a record
85.1 million acres of soybeans this year." Mark Ash, Oil Crops Outlook (July 14, 2015), available at
http://www.ers.usda.gov/media/1869335/ocsl5g.pdf: see also id. at Table 3. Canola oil and animal fats also
represent significant feedstocks used for biodiesel production, and the use of corn oil from ethanol production and of
recycled greases has substantially increased since 2010. See EIA, Monthly Biodiesel Production Report, With Data
for December 2012, Tables 3 and 3a (Feb. 2013); EIA, Monthly Biodiesel Production Report, With Data for April
2015, Tables 3 and 3a (June 2015), available at http://www.eia.gov/biofuels/biodiesel/production/. Certain of these
feedstocks continued to increase in 2014.
North Dakota Ethanol Council
The RFS has improved the economic well-being of North Dakota in the following ways:
• Independence from Foreign Oil - If ethanol volumes are not increased, our dependence
on foreign oil will rise instead of keeping those dollars in the country and in our state.
Use of domestic ethanol in 2013 decreased dependence on foreign oil by seven percent -
from 35 to 28 percent. [EPA-HQ-OAR-2015-0111-1927-A1 p. 1]
Northern Canola Growers Association
Well beyond the canola and agricultural sector, biodiesel provides numerous benefits for
consumers and society as a whole, including:
-a more diversified energy market
-increased domestic energy production [EPA-HQ-OAR-2015-0111-2036-A1 p.2]
Office of the Lt. Governor, Indianapolis, Indiana
A nation with a diverse energy supply is better equipped to handle the challenges of the 21st
Century and supply consumers with a broader array of energy choices. With certainty in
regulations and markets, our farmers and our biofuels industry will confidently make the
investments that help our country achieve greater energy independence and security by reducing
our reliance on foreign oil. [EPA-HQ-OAR-2015-0111-2482-A1 p. 1-2]
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St. Louis Clean Cities Program
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 49-50.]
In closing, we improve our U.S. energy security by using American fuels. Renewable fuels like
biodiesel are diversifying the U.S. fuel supplies and expanding domestic refining capabilities so
that our economic stability and national security are not so vulnerable to global oil markets. That
improves U.S. energy security that because despite U.S. oil production, petroleum is still a global
commodity that is sharply shaped by geographical factors beyond our control.
State of Indiana; State of Indiana House of Representatives
Indiana drivers consumed 314 million gallons of ethanol in 2013, helping reduce our dependence
on foreign oil. Furthermore, ethanol lowers gas prices by $1.09 per gallon in the Midwest, saving
the average American household $1,200 per year. [EPA-HQ-OAR-2015-0111-3466-A1 p.2]
State of South Dakota
Ethanol and other renewable fuels are good for my state and our country. They are making our
country more independent from foreign oil. They have kept our farm economy strong while also
improving our air quality. [EPA-HQ-OAR-2015-0111-1919-A1 p.l]
The Ohio House of Representatives
Additionally, ethanol provides energy-specific benefits to our economy. First among those
considerations is its value to our energy independence. Even with the rise of domestic natural gas
and oil production, ethanol is still making a significant impact in reducing our reliance on
foreign-sourced energy. [EPA-HQ-OAR-2015-0111-3486-A1, p.l]
Vets for Energy
One of the original intents of the RFS was to expand the use of renewable fuels to reduce our
reliance on foreign oil. However, America has already reduced our imports from those who seek
to harm us through the development of our vast stores of domestic oil and natural gas. [EPA-HQ-
OAR-2015-0111-2473-A1, p.l]
Unfortunately, the current RFS is not the policy to secure America's interests. [EPA-HQ-OAR-
2015-0111-2473-Al,p.l]
Response:
Numerous commenters lauded the energy security benefits associated with the RFS program and
the renewable fuels it requires. EPA agrees that the production of biofuels improves the energy
security of the U.S. by diversifying the supply of U.S. transportation fuels and displacing mainly
imported petroleum. Also, all of the biofuels that displace petroleum are less likely to subject to
periodic supply disruptions or "oil shocks." More details on these conclusions are reflected in a
more thorough analysis conducted by EPA of the energy security benefits associated with the full
implemented of the RFS program in the RFS2 rulemaking in 2010.
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This final rule increases the advanced and total renewable fuel standards through 2016 By
increasing the amount of renewable fuels, both advanced and conventional, this final rule
improves the energy security position of the U.S. A number of commenters suggest that EPA
should set the RFS standards at the statutory volumes to further improve the U.S.'s energy
security position. For example, one commenter suggested that EPA's proposed use of the general
waiver authority would have negative effects on the Nation's energy independence, contrary to
the express goal of the EISA to "move the United States toward greater energy independence and
security—after all, its full name is the Energy Independence and Security Act". The final
standards will continue to increase renewable fuel volumes, which in turn continue to increase
the energy security benefits from the RFS program. However, for reasons explained elsewhere,
the statutory volumes are not attainable at this time and any additional perceived energy security
benefits associated with them also not attainable.
Comments with respect to the energy security benefits associated with raising the BED standard
are addressed in section 3.4.3.
7.7 Impact on Jobs and Local/State Economy 721
Comment:
Ace Ethanol/Fox River Valley Ethanol
Specifically, an extrapolation of data from a 2014 economic study by John Dunham &
Associates indicates that our businesses contribute $840 million in economic output, support
3,800 indirect jobs and $192 million in indirect wages as well as $16.8 million in taxes. [EPA-
HQ-OAR-2015-0111-1200-A1 p. 2]
American Soybean Association (ASA)
Biodiesel has and will continue to create and sustain jobs in the United States, including many in
rural America. An economic study conducted for the National Biodiesel Board estimates that the
biodiesel industry, at 1.7 billion gallons of production, supports more than 62,000 jobs, $2.6
billion in wages, and $16.8 billion in overall economic impact. The industry's economic impact
is poised to grow significantly with continued production increases. The industry supports jobs in
a variety of sectors, from manufacturing to transportation, agriculture and service industries.
[EPA-HQ-OAR-2015-0111-1818-Alp.2]
Board of County Commissioners of Putnam County, Ohio
Thousands of jobs have been created by the ethanol industry. [EP A-HQ-OAR-2015-0111-3289-
Al p. 1]
American Cleaning Institute (ACI)
ACI continues to be concerned with the RFS's serious and significant impact on ACI member
companies' ability to source animal fats for use as an oleochemical feedstock. The proposed
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volumes would continue to divert large quantities of a finite inelastic supply of animal fats to the
biofuels market, thereby critically disadvantaging the domestic oleochemical industry. EPA has a
responsibility, if not duty, to equally protect all industries that rely on animal fats to produce
goods. Agency mandates should not choose winners and losers. Therefore, we respectfully
request that EPA use its discretionary authority to lower the volume requirement for biomass-
based diesel, or, alternatively, to exclude animal fats as a feedstock option [EPA-HQ-OAR-
2015-0111-1934-Alp.l]
The proposed volumes would continue to divert large quantities of a finite inelastic supply of
animal fats to the biofuels market, thereby critically disadvantaging the domestic oleochemical
industry. [EPA-HQ-OAR-2015-0111-1934-A1 p. 1-2]
•Agency mandates should not choose winners and losers. EPA has a responsibility, if not duty, to
equally protect all industries that rely on animal fats to produce goods
•The price of animal fats has increased 95 percent since 2006 under the combined policies of the
RFS and tax incentives for biofuels
•Biofuel production consumes a significant amount of the total supply of animal fats and current
policies threaten not only the price but the availability of animal fats for oleochemical production
•Since 2011 (a historical first) the price of animal fats have exceeded that of Malaysian palm oil
•Switching to foreign-sourced palm oil by the oleochemical industry threatens 25,000 U.S. jobs
•EPA must use all its available discretion to exempt or minimize the use of animal fats under the
RFS mandates and include the Proposed Rule's impact on the oleochemical industry in its
analysis of impacts on other sectors and industries; specifically, EPA must address the potential
job loss in collateral industries [EPA-HQ-OAR-2015-0111-1934-A1 p.2]
California Dairy Campaign
The advanced biofuels industry has made progress in moving toward commercialization. The
main argument against cellulosic biofuel is that it is too expensive to produce. However,
production costs are falling and those costs will continue to fall as more facilities open and the
industry matures. This nascent but growing industry promises to create thousands of jobs in rural
America. It will also create economic development opportunities and increased investment in
rural economies. [EPA-HQ-OAR-2015-0111-1816-A1 p. 1-2]
Conference of Professional Operators for Response Towing
Why are we opposed to this proposal? It is bad for boating. There are over 88 million Americans
who enjoy recreational boating. Their boating supports marine industry from local marinas to
national boat builders to service industries such as ours across our country. It cannot be ignored
that a large portion of the boating population fuels their vessels at land based gas stations prior to
launching their vessels at the ramp. [EPA-HQ-OAR-2015-0111-1718-A1 p. 1]
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Cornelius Seed Corn Company
The RFS has been great for my home state of Iowa. Because of ethanol and other biofuels,
thousands of jobs have been created, and we've created a domestic source of fuel that decreases
our dependence on foreign oil. [EPA-HQ-OAR-2015-0111-3247-A1 p.l]
Crawford County
The EPA has proposed Renewable Fuel Standards (RFS) for 2014, 2015 and 2016.
Unfortunately, the EPA is attempting to force high-ethanol fuel blends into the market and
potentially putting American consumers, their vehicles and our economy at risk. As a sitting
County Commissioner from rural Pennsylvania, I am concerned about the negative impact these
new standards will have on my constituents and the local economy. [EPA-HQ-OAR-2015-0111-
1666-A1 p. 2]
East Kansas Agri-Energy, LLC (EKAE)
This proposal would increase, not decrease, unemployment as renewable fuel producers
employing hundreds of thousands of Americans cut back, putting American jobs and rural
economies at risk. [EPA-HQ-OAR-2015-0111-2607-A2 p.3]
Governor of Iowa, et al.
State leaders recently traveled to Kansas City, Kansas, to testify on the shortcomings of the
proposed rule. This was only the most recent example of State of Iowa leaders actively engaging
on this issue, which is so important to a healthy economy in rural America. Another example
came in January 2014, when we hosted the "Hearing in the Heartland" in cooperation with the
entire Iowa congressional delegation, state leaders, interested citizens and community leaders
from across the Midwest. At this open forum where all interested citizens were invited to
present, we heard from 83 panelists from across the Midwest that spoke from the heart about the
importance of the RFS to their livelihoods and a healthy rural economy; only two individuals
presented in opposition to a robust RFS. There remains a strong consensus in the Heartland for
the EPA to reverse course on the most recent proposal and reject Big Oil's arguments and
attempt to get rewarded for bad behavior. The use of biofuels in the Midwest has continued to
grow and we are confident that this trend can extend nationally. The RFS as enacted, was one of
the best recent examples of a Federal policy success, because of the policy predictability it
provided to nurture growth and innovation. [EPA-HQ-OAR-2015-0111-1915-A1 p.2]
As state leaders, we are keenly focused on helping create a business and public policy
environment that drives job growth throughout the State - in communities both large and small,
urban and rural. We share the concerns of many lowans and citizens throughout the Midwest that
the EPA's current proposal will undermine our shared goal of a healthy economy in rural
America and abandon the various public policy benefits that flow from the RFS. [EPA-HQ-
OAR-2015-0111-1915-A1 p.2]
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Growth Energy
Since then, the RFS program has been an overwhelming success. It has created American jobs,
revitalized rural America, injected much-needed competition into a monopolized vehicle-fuels
market, lowered the price at the pump, reduced greenhouse gas emissions, and made our nation
more energy independent and secure by reducing our dependence on foreign oil. [EPA-HQ-
OAR-2015-0111-2604-A2 p. 1] [EPA-HQ-OAR-2015-0111-1044 p.32]
"Congress expected the RFS program to compel the industry to make dramatic changes in a
relatively short period of time."3 Accordingly, EPA recognizes here that "the proposed volume
requirements are ... intended to drive significant growth in renewable fuel use beyond what
would occur in the absence of such requirements."4 But by that measure, this proposal is a total
failure. If EPA persists with its proposal, this rule would halt meaningful growth in renewable
fuels and eviscerate the RFS program. The resulting stagnation in renewable fuels would
contravene Congress's intent and disserve the public interest. [EPA-HQ-OAR-2015-0111-2604-
A2p.l]
The proposed rule would upend the industry that makes these important contributions to the U.S.
economy, and harm the farmers and others who depend upon that industry. Unlike the oil
industry, which can respond nearly instantaneously to changes in supply and demand, farmers
decide how much corn to plant only once a year. Based in large part on the reasonable
expectation that Congress's prescribed volume requirements would apply, America's farmers
have made significant long-term investments in land, equipment, and seed to produce and bring
to market sufficient amounts of corn to meet the statutory volumes.420 [EPA-HQ-OAR-2015-
0111-2604-A2p.74]
The broader economic impact of the proposed rule would also be profound, particularly in rural
communities. The amount of available ethanol capacity in the United States exceeds the
proposed volume of conventional biofuels in 2016; as a result, a reduced mandate would result in
either the idling or permanent closure currently operating facilities, or the continued idling of
facilities that are not currently producing, but would be if the volume requirements were
AD 1
increased. Idling these ethanol facilities—which are often important economic engines in rural
communities—would cause a series of cascading economic effects. Plants would lose operating
profits generated by the current level of production, lay off workforces, cut back or cease inputs
from local vendors, and reduce their local tax payments.422 [EPA-HQ-OAR-2015-0111-2604-A2
p.74]
Specifically, a recent study found that EPA's proposal would result in the closure or continued
idling of approximately 13 ethanol plants, along with the direct loss of 800 jobs at those facilities
and reduced revenues from ethanol and co-product sales of $2.6 billion.423 These economic
impacts would fan through the local, primarily rural communities, ultimately resulting in the
indirect loss of approximately 3,200 jobs in ethanol producing regions.424 State and local
government budgets would be harmed to the tune of approximately $31 million in lost tax
revenues in regions hosting ethanol plants.425 [EPA-HQ-OAR-2015-0111-2604-A2 p.74-75]
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3 80 Fed. Reg. at 33,118.
4 Mat 33,109.
420 The proposed rule is estimated to reduce corn demand by 1.3 billion bushels. See Iowa Com Growers
Association Criticizes EPA Announcement on the Renewable Fuel Standard (May 29, 2015), at
http://www.iowacorn.org/index.cfm/30321/35759/iowa corn growers association criticizes epa announcement o
n the renewable fuels standard. The USDA projects 2015/16 corn prices to average $3.75 per bushel, resulting in a
$4.875 billion loss for corn growers. See Iowa State University, Iowa Farm Outlook & News, available at
http://www2.econ.iastate.edu/ifo/.
421 Edgeworth Economics, The Impact of an RFS Waiver on the Ethanol Industry and Broader Economy in 2016, at
1 (July 27, 2015) (attached as Exhibit 8).
422 Mat 1-2.
423 Mat 3.
424 Mat 4.
425 M
Indiana Corn Growers Association (ICGA)
Indiana's ethanol industry generated economic activity or revenues from ethanol and its
interlinked industries in 20144 in the order of $3.6 billion. This added economic activity within
Indiana resulted in a net contribution to the state's GSP of $934 million in 2014 and an increase
on household income, including farmer income, of $315 million. The ethanol industry
contributes, either directly or through indirect and induced effects, $44 million per year to state
and local taxes. Without Indiana's ethanol industry, none of this economic impact within the
state would have occurred. The contribution of Indiana's ethanol industry, independent of the
economic impacts of the overall national ethanol industry, is summarized in Exhibit 1. [EPA-
HQ-OAR-2015-0111-2503-A1 p.ll] [Exhibit 1 can be found on page 11 of EPA-HQ-OAR-
2015-0111-2503-A1.]
Highlights of the economic contributions of Indiana's ethanol industry within the state are listed
below.
• Job Creation - The ethanol industry created 4,146 new full-time jobs within Indiana. The
industry directly employs 526 individuals and 6.88 additional jobs are created within the
state for every direct job. This is a total employment multiplier of 7.88.
• Contribution to Indiana's GSP - The ethanol industry contribution to Indiana's GSP is
$934 million. This is limited to the Indiana ethanol industry - it does not include the
economic impact that the overall U.S. ethanol industry has had on corn prices, farmer's
income, and farmland appreciation.
• Economic Activity or Sales within Indiana - The ethanol industry generated $2,881
million in ethanol, DDGS and corn oil sales in 2014. This in turn generates $739 million
in additional economic activity across other sectors and households for a combined
economic activity totaling $3,620 million.
• Household Income - The increase of income to households directly or indirectly linked
to ethanol production, including the impact farmers receive from a higher basis is $207
million. Induced impacts of $108 million provide for a combined total impact on
household income in 2014 of $315 million.
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• State and Local Taxes — The ethanol industry generated approximately $44 million in
state and local taxes in 2014. A large portion of these taxes are property and sales
tax. [EPA-HQ-OAR-2015-0111-2503-A1 p. 12]
Indiana Farm Bureau
In 2014, Indiana's ethanol industry directly employed 526 people and created 3,620 full-time
equivalent jobs elsewhere in Indiana's economy. In addition to investing in jobs, the ethanol
industry's direct capital investment here in the state totals $1.5 billion since 2006. [EPA-HQ-
OAR-2015-0111-2486-A1 p.2]
Kansas Soybean Association
Biodiesel has and will continue to create and sustain jobs in the United States, including many in
rural America. A recent economic study conducted for the National Biodiesel Board estimates
that the biodiesel industry, at 1.7 billion gallons of production, supports more than 62,000 jobs,
$2.6 billion in wages, and $16.8 billion in overall economic impact. The industry's economic
impact is poised to grow significantly with continued production increases. The industry
supports jobs in a variety of sectors, from manufacturing to transportation, agriculture and
service industries. [EPA-HQ-OAR-2015-0111-2340 p.2]
Kentucky Corn Growers Association
The agriculture industry invested in human capital, as well. The RFS created hundreds of
thousands of private sector jobs at a time when national employment statistics looked very grim.
Job growth in the agriculture sector nearly doubled the growth of all other sectors during the time
period 2005, when the RFS was enacted, through 2010. The signals that EPA sends to employers
by throttling back the RFS jeopardize these jobs. [EPA-HQ-OAR-2015-0111-2499-A1 p.l]
If EPA finalizes this rule as proposed, it will prompt a devastating impact on farmers and rural
communities. [EPA-HQ-OAR-2015-0111-2499-A1 p.l]
Little Sioux Corn Processors
I have never testified in a hearing such as this previously but I thought it was imperative I make
my case today because of its importance to our industry and our country. Little Sioux is a grass
roots organization. We have over 800 investors who made an investment in Little Sioux hoping
to raise the price of corn and improve the economic well-being of their community. They knew
full well the venture carried some risk but they moved forward anyway. LSCP began production
in April 2003 as a 40 million gallon annual production plant. We have since expanded twice and
are undergoing our third this year. The third expansion will take our capacity beyond 135 million
gallons annual production. The Third expansion exceeds the grandfathered production limit of
120 million gallons and was approved by the EPA demonstrating greenhouse gas reductions
greater than 20% thru the Efficient Producer Program. You may ask why this background, to
me it's pretty simple. Without the RFS and its mechanism for market access the industry would
never have grown this fast which includes Little Sioux. The affect the law has had on the
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economic well-being of NW Iowa and the country cannot be taken lightly. [EPA-HQ-OAR-
2015-0111-1664-A1] [EPA-HQ-OAR-2015-0111-1044 pp. 320-321]
Mass Comment Campaign sponsored by anonymous 22 (email) - (57)
Here in Indiana, corn farmers helped produce almost one billion gallons of ethanol last year.
Ethanol is responsible for over 525 direct jobs, $30 million in salary and benefits, and over 4,100
indirect jobs in our state. That represents $3.6 billion in total economic activity and revenue for
our state. [EPA-HQ-OAR-2015-0111-1478-A1 p.l]
The advent of American made Ethanol has been the single greatest rural economic driver in the
since the depression. The EPA is about to shut the door on this economic driver. Your proposed
rule will shrink rural tax bases, negatively impacting schools, hospitals, fire departments, and
roads. Forcing land values and rents down will harm landowners, many of whom are elderly and
living on fixed incomes. Rural America cannot afford another hit. [EPA-HQ-OAR-2015-0111-
1478-Alp.l]
Furthermore, Indiana consumed 314 million gallons of ethanol in 2013, helping reduce our
dependence on foreign oil. [EPA-HQ-OAR-2015-0111-1478-A1 p.l]
Mass Comment Campaign sponsored by anonymous 25 (email) - (11)
As an investor in two ethanol businesses in Wisconsin, one in Stanley and one near Oshkosh, I
have witnessed firsthand the positive impact these businesses have on our local economy. These
businesses have also stimulated investments regionally and nationally. Investments in these
businesses have led to the development of new and innovated processes that have resulted in
saving consumers more money at the pump, reduced our dependency on foreign oil, gives us
cleaner air and has created many good paying jobs in our rural communities.
Specifically, an extrapolation of data from a 2014 economic study by John Dunham &
Associates indicates that our businesses contribute $840 million in economic output, support
3,800 indirect jobs and $192 million in indirect wages as well as $16.8 million in taxes. These
two businesses are a huge economic engine for our local rural communities. In addition to
producing about 100,000,000 gallons of ethanol, the plants also produce 250,000 tons of
distillers' grain, a high protein cattle feed, as well as 110,000 tons of liquid carbon dioxide.
As an investor in two ethanol businesses in Wisconsin, one in Stanley and one near Oshkosh, I
have witnessed firsthand the positive impact these businesses have on our local economy. These
businesses have also stimulated investments regionally and nationally. Investments in these
businesses have led to the development of new and innovated processes that have resulted in
saving consumers more money at the pump, reduced our dependency on foreign oil, gives us
cleaner air and has created many good paying jobs in our rural communities. [EPA-HQ-OAR-
2015-0111-2567-Alp.l]
Specifically, an extrapolation of data from a 2014 economic study by John Dunham &
Associates indicates that our businesses contribute $840 million in economic output, support
3,800 indirect jobs and $192 million in indirect wages as well as $16.8 million in taxes. These
two businesses are a huge economic engine for our local rural communities. In addition to
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producing about 100,000,000 gallons of ethanol, the plants also produce 250,000 tons of
distillers' grain, a high protein cattle feed, as well as 110,000 tons of liquid carbon dioxide.
[EPA-HQ-OAR-2015-0111-2567-A1 p.l]
Mass Comment Campaign sponsored by Indiana Corn Growers Association and Indiana
Soybean Alliance (email) - (304)
I am writing in response to your proposal to reduce the use of ethanol in the Renewable Fuel
Standard. As a corn farmer from Indiana, I have done my part, responsibly planting more than
enough corn acres to cover all needs for feed, food, fuel and fiber. With corn prices hovering at
or below the cost of production, this reckless decision by the EPA can make or break my farm
and imperil nearly a decade of much needed growth in the rural economy and revitalization of
rural communities. [EPA-HQ-OAR-2015-0111-3387-A1 p.l]
Here in Indiana, we produced almost one billion gallons of ethanol last year. Ethanol is
responsible for over 525 direct jobs, $30 million in salary and benefits, and over 4,100 indirect
jobs in our state. That represents $3.6 billion in total economic activity and revenue for our state.
[EPA-HQ-OAR-2015-0111-3387-Alp.l]
Mass Comment Campaign sponsored by Indiana Soybean Alliance (email) - (250)
Here in Indiana, three biodiesel plants have a combined capacity of more than 120 million
gallons of biodiesel. That accounts for almost 300 million pounds of soybean oil from Indiana
soybeans used in the production of biodiesel. Our state is home to the world's largest fully
integrated soybean processing and soy biodiesel facility — Louis Dreyfus in Claypool. [EPA-
HQ-OAR-2015-0111-2569-A2 p.l]
EPA's actions over the past year have led to tremendous uncertainty and hardship for U.S.
biodiesel producers and thousands of their employees. As a result, many plants have been forced
to reduce production and some have been forced to shut down, leading to layoffs and lost
economic productivity. [EPA-HQ-OAR-2015-0111-2569-A2 p.l]
Mass Comment Campaign sponsored by Minnesota Corn Growers Association - (784)
Minnesota family corn farmers have been pioneers in expanding the use of homegrown ethanol.
Our state was the first to blend 10 percent ethanol in all of our fuel supply, which helped clean
the air in the Twin Cities metro and bring the region into compliance with EPA air quality
standards. [EPA-HQ-OAR-2015-0111-2961-A1 p.l]
More recently, Minnesota corn farmers were part of a broad coalition that brought El 5 to our
state. Less than two years after El5 was introduced to Minnesota consumers, sales are spiking
and the number of stations offering the fuel — along with other higher ethanol blends through
blender pumps —continues increasing. [EPA-HQ-OAR-2015-0111 -2961 -A 1 p. 1 ]
I've seen communities like the one I farm in brought back to life by Minnesota's ethanol industry.
Main streets went from empty to thriving. Well-paying jobs were created. Schools were updated.
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Young people had a reason to return to rural Minnesota. [EPA-HQ-OAR-2015-0111-2961-A1
p.l]
Mass Comment Campaign sponsored by National Corn Growers Association (NCGA) -
(24,661)
I strongly oppose the proposed rule to reduce the volume of ethanol in the Renewable Fuels
Standard (RFS). This proposal will have a devastating impact on agriculture and the rural
economy. American farmers have planted more than enough corn to cover all needs for feed,
food, fuel and fiber. With corn prices near or below the cost of production, the reckless decision
can break my farm and imperil nearly a decade of much needed growth in the rural economy and
revitalization of rural communities. [EPA-HQ-OAR-2015-0111-3470-A1 p.l]
Your proposal, also has a trickle-down effect on everyone in a small farming community—the
stores, the insurance agents, the banks, the schools. Think longer and harder before passing this
proposal! [EPA-HQ-OAR-2015-0111-3475-A1 p.l]
Ethanol has created jobs and renewed investment in my rural community, helping the next
generation return to farming. [EPA-HQ-OAR-2015-0111-2824-A2 p. 1]
Mass Comment Campaign sponsored by POET Biorefining 1 (paper) - (692)
I support the Renewable fuel standard. Because it supports rural jobs. [EPA-HQ-OAR-2015-
0111-2963-Al,p.3]
We all know that the RFS and biofuels have created jobs that cannot be outsourced, which have
helped ensure a robust rural America - especially here in Continental, Ohio. [EPA-HQ-OAR-
2015-01 ll-2963-Al,p.7]
Minnesota Corn Growers Association (MCGA)
There are 21 ethanol plants in Minnesota (nearly half of which are farmer-owned cooperatives)
that support nearly 13,000 jobs. Ethanol has rejuvenated the rural economy in many parts of our
state, leading to better schools, updated infrastructure and vibrant Main Street businesses. For
every $1 invested to build a Minnesota ethanol plant, more than $8 has been returned to the
economy. [EPA-HQ-OAR-2015-0111-1920-A1, p.2]
Minnesota Farm Bureau
Renewable fuels are critical to Minnesota's economy. In Minnesota, 1.1 billion gallons of ethanol
is produced annually and the industry contributed $2.34 billion to the state's economy in 2014,
generated $7.6 billion in revenue for Minnesota businesses, $1.74 billion in household income
and supported 18,630 jobs. [EPA-HQ-OAR-2015-0111-2263-Al p. 1]
National Association of Charterboat Operators
We have not seen any social and economic study by the EPA or any other governmental agency
providing information on the negative impacts to the charter boat industry by requiring the use of
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E-15 gas nor have we seen any similar study on the impact to recreational boaters in general.
Such a drastic requirement will certainly have severe negative social and economic impacts.
Such a study should be done prior to forcing this requirement on users. [EPA-HQ-OAR-2015-
0111-1812-A1 p.2]
National Biodiesel Board
EPA's supplemental analysis also purports to consider job creation and rural economic
development, price and supply of agricultural commodities and food prices related to proposed
increases in the biomass-based diesel applicable volume. EPA-HQ-OAR-2015-0111-0008 at 8-
10. For each, however, EPA continues the fallacy that the renewable fuels industry is a zero sum
game. In so doing, it simply finds that these factors are a wash because there would be offsetting
impacts. This again illustrates why EPA's consideration cannot be what Congress had in mind.
[EPA-HQ-OAR-2015-0111-1953-A2p.55]
EPA also focuses on soybean oil, as opposed to recognizing the ability of the industry to expand
its use of other feedstocks. As further explained below, each of these considerations supports
continued, and greater, increases in biomass-based diesel requirements. [EPA-HQ-OAR-2015-
0111-1953-A2p.55]
As outlined in LMC International, The Economic Impact of the Biodiesel Industry on the U.S.
Economy (Nov. 2013) (Attachment 10), there are substantial direct and indirect economic
benefits from increasing the volume obligation for biomass-based diesel. Although EPA refers to
biodiesel as one of the "existing successful biofuels" fuels that it must "support," 80 Fed. Reg. at
33,102, the biomass-based diesel industry is relatively new compared to ethanol and, certainly,
the petroleum industry. [EPA-HQ-OAR-2015-0111-1953-A2 p.74]
As with many young industries, there will be job opportunities created with the increased
development and deployment of advanced biofuels. Jobs associated with advanced biofuel
production include temporary construction jobs for facilities, permanent production employees,
and numerous employees for research and development. There is also substantial potential for
job creation along the supply chain, including in feedstock development and distribution. [EPA-
HQ-OAR-2015-0111-1953-A2 p.74]
National Corn-to-Ethanol Research Center (NCERC)
Overlap of Research, Development, Commercialization and Employment
• Through the NCERC Workforce Education and Training Programs, more than 600
unemployed and underemployed persons have received training to gain the skills needed
to succeed in the new bioeconomy.
o 93% of these trainees are now gainfully employed in the biofuels sector, utilizing
the new products and technologies brought to market in the past decade.
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• If this proposal becomes final, these 600 people, along with thousands more, will find
themselves back on the unemployment lines! [EPA-HQ-OAR-2015-0111-1225-A2 p. 2]
[EPA-HQ-OAR-2015-0111-1044 p. 58]
National Farmers Union (NFU)
B. Rural Communities
The economic benefits the RFS provides for rural communities are both immediate and long-
term. Immediate benefits include investment in conventional and advanced ethanol plants, many
of which are farmer-owned and all of which create good jobs in rural America. Encouraging
more biofuels plants and requiring strong production from existing plants creates more jobs,
secures existing jobs, and provides a stable tax base that will allow rural communities to flourish.
A formal economic paper commissioned by the Renewable Fuels Association determined that
the ethanol industry contributed nearly $53 billion to the U.S. Gross Domestic Product' and
supported over 379,000 jobs in 20148, despite the policy challenges the industry faced that year.
[EPA-HQ-OAR-2015-0111-1657-A1 p. 4]
In addition to the sustainability of the food system, climate change's impact on agriculture may
hazard the sustainability of American communities. Climate change, through its impact on
agriculture, places communities in harm's way because the consequences of climate change are
likely to be greater for family farmers than other agricultural producers. According to a report by
USD A, 'Current climate change effects are challenging agricultural management and are likely to
require major adjustments in production practices over the next 30 years.' The severity of the
necessary adjustments increases the likelihood that they will be expensive. In many cases, the
expense of farming in a changing climate will drive out family farmers with insufficient capital
or access to investors and bar new entrants from starting farm businesses by increasing the initial
investment needed, leaving their land available for farm consolidation. These major adjustments
will also require policy shifts that, if not executed carefully and equitably, may also place family
farmers at risk and encourage farm consolidation. [EPA-HQ-OAR-2015-0111-1657-A1 p. 4]
The loss of family farmers presents serious challenges to the economic sustainability of rural
communities. As farmers leave and farmland consolidates, businesses and community
institutions lose customers and tax revenue, weaken, and eventually close, causing other
institutions and businesses in the community to do the same. Rural residents are left without
access to critical services or jobs. To the extent that climate change contributes to this process, it
presents a serious environmental justice issue to family farmers and rural residents. The RFS
helps keep family farmers farming in two distinct and important ways: it contributes to climate
change mitigation, helping family farmers avoid the most costly consequences of climate change,
and offers family farmers direct value for helping build climate resiliency by stabilizing prices
for biofuel feedstocks and opening investment opportunities in biofuel plants. EPA would best
pursue these important goals by adjusting the proposed biofuel volume standards to match the
standards in the EISA. [EPA-HQ-OAR-2015-0111-1657-A1 p. 4-5]
EPA's proposed rule contains volume standards for advanced biofuel and total renewable fuel
that are lower than the standards agreed to by Congress in the EISA. Though EPA should set
both standards at the statutory levels contained in the EISA, EPA offered distinct reasons for
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lowering each standard. Below, NFU asserts why the statutory volume standards for both
categories of biofuel should be implemented in the final rule. [EPA-HQ-OAR-2015-0111-1657-
Al p. 5]
Indiana Farmers Union
Biofuels are especially beneficial to the economy in Indiana. A 2013 fact sheet published by the
Indiana State Department of Agriculture reported that the state was home to 13 completed
ethanol plants with combined production of 768 million gallons annually.9 [EPA-HQ-OAR-
2015-0111-1661-Alp. 3]
Illinois Farmers Union
ILFU is especially concerned that EPA's proposed rule does not provide the policy support that
Illinois' 14 ethanol plants require to maintain the 4,000 direct jobs the industry has created in the
state.9 [EPA-HQ-OAR-2015-0111-1662-A1 p. 4]
Northwest Farmers Union
Northwest communities are likely to benefit from job growth in the future as the RFS increases
demand for experimental and advanced biofuels derived from feedstocks traditionally found in
the region, such as woody biomass and canola. [EPA-HQ-OAR-2015-0111-1679-A1 p. 4]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EP A-HQ-OAR-2015-0111-1043, p. 28.]
The volume targets are also needed to drive advances in advanced and cellulosic ethanol. It is
anticipated that producing biofuel from these feedstocks will establish additional environmental
benefits.
7 Urbanchuk, JohnM. Contribution of the Ethanol Industry to the Economy of the United States in 2014, at
8. http://ethanolrfa.3cdn.net/94596be2e72251b795 nkm6ii26n.pdf
8 Id. at 9.
9 Walthall, C.L., I, et all at 119.
Indiana9 http://www.in.gov/isda/biofuels/factsheet.pdf
Illinois9 Illinois Department of Agriculture, http://www.agr.state.il.us/department-urges-us-environmental-
protectionagency-to-reconsider-proposed-renewable-fuel-standard-rules-2015/.
National Restaurant Association
While we commend the Environmental Protection Agency (EPA) for your continued focus on
improving our environment, we urge you to carefully examine the effects this rule will have on
consumers and small businesses. We are particularly concerned that the proposed rule will
increase the problematic effects of the RFS on the foodservice industry and lead to further
increases in food prices across the country. [EPA-HQ-OAR-2015-0111-2267-A1 p. 1]
The restaurant and foodservice industry is also the United States' second largest private-sector
employer and employs 14 million people or 10 percent of the U.S. workforce. In addition, the
industry generates more than $1.9 billion in sales on a typical day.1 The restaurant industry is a
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tremendous contributor to our economy and when the industry, as a whole, experiences
economic harm, so does our nation's economy. [EPA-HQ-OAR-2015-0111-2267-A1 p. 1]
With these facts in mind, we would like to provide comments on how this rule will affect our
industry and our economy. [EPA-HQ-OAR-2015-0111-2267-A1 p. 1]
Restaurants operate on very thin profit margins, and must deal in real time with price spikes to
labor, benefits, fuel and food costs. While the RFS has been a well-intentioned effort to diversify
the fuel supply and develop additional domestic fuel resources, we believe that the targets in the
proposed rule will increase food prices and have more economic harm than good. [EPA-HQ-
OAR-2015-0111-2267-A1 p. 2]
Food costs are one of the top business challenges for the restaurant industry, accounting for
approximately one-third of every dollar in sales. With the slim profit margins restaurants operate
on, any increase in food costs can have a dramatic impact on a restaurant's bottom line. [EPA-
HQ-OAR-2015-0111-2267-A1 p. 3]
However, rising food costs are unfortunately not new for the restaurant industry which has seen
steady increases each year since the implementation of the RFS. In fact, during the last five
years, average wholesale food prices have increased approximately 25%.8 These types of
increases are extremely difficult for our nation's restaurants to absorb. [EPA-HQ-OAR-2015-
0111-2267-A1 p. 2]
In addition, more than 90 percent of restaurants in the U.S. are classified as small businesses
with fewer than 50 employees. Therefore, the price increases caused by increasing ethanol
requirements will hit these businesses, and the millions of customers they serve, particularly
hard. [EPA-HQ-OAR-2015-0111-2267-A1 p. 4]
For example, the previously mentioned study conducted by PricewaterhouseCoopers concluded
that the RFS is driving commodity costs upward and will result in an increase in costs to U.S.
chain restaurants by as much as $3.2 billion annually or $18,000 per year for each chain
restaurant location.9 [EPA-HQ-OAR-2015-0111-2267-A1 p. 4]
The report further estimated that quick service restaurants would incur cost increases of $2.5
billion and full service restaurants' costs would increase by $691 million.10 [EPA-HQ-OAR-
2015-0111-2267-A1 p. 4]
Restaurants are often the cornerstones of their communities and this is money that could be spent
on job creation and investments that benefit restaurant customers, their communities, and the
economy. [EPA-HQ-OAR-2015-0111-2267-A1 p. 4]
Clearly, the evidence suggests that the corn ethanol mandate of the RFS has increased food costs
and negatively impacted the restaurant industry, among many other businesses. [EPA-HQ-OAR-
2015-0111-2267-A1 p. 4]
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1 2015 Restaurant Industry Forecast, National Restaurant Association
8 2015 Restaurant Industry Forecast, National Restaurant Association, Economic Outlook, p. 14.
9 'Federal Ethanol Policies and Chain Restaurant Food Costs,' PricewaterhouseCoopers study, November 2012.
10 Id.
Nebraska Energy Office
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 122.]
When the EPA changes the rules, it creates uncertainty and hampers job creation.
North Dakota Corn Growers Association (NDCGA), et al.
We believe that the ethanol industry has been to date the best economic development for rural
America. [EPA-HQ-OAR-2015-0111-2541-A4 p.l] [EPA-HQ-OAR-2015-0111-1044 pp. 174-
175]
Let's take just a moment to look at the ethanol industry at a mile-high view. What you see are
several industries capitalizing with one another, developing the rural economy into what you see
today. It's a domino effect: from the individual who sells the property to build the ethanol plant,
to the land value increasing due to building the facility. This in turn increases the tax rate on that
property, which translates to more school revenue. You have the construction company, which
hires local residents to build the facility. Local businesses, such as gravel pits, ready mix plants,
electricians, and plumbers supply the materials to build it. Hotels, gas stations, and restaurants all
benefit from these workers and activity as well. [EPA-HQ-OAR-2015-0111-2541-A4 p.l] [EPA-
HQ-OAR-2015-0111-1044 p. 175]
Along with providing immediate, short-term economic growth, it supplies long-term growth as
well. To name a few: the good paying middle-class jobs for those who run the facility, local mill
wright and crane crews coming to do required repairs and maintenance, trucking companies
moving the products in and out of the facility, and the livestock industry getting an excellent and
cost effective feed source for their animals. [EPA-HQ-OAR-2015-0111 -2541-A4 p. 1 ] [EPA-
HQ-OAR-2015-0111-1044 pp. 175-176]
The ethanol industry also promotes economic rural development by producing factories outside
of cities, giving Americans a reason to move away from urban areas. Creating these factories in a
rural setting, and spaced randomly throughout America, also benefits us in times of war and
peace. [EPA-HQ-OAR-2015-0111-2541-A4 p.l] [EPA-HQ-OAR-2015-0111-1044 p.176]
From 2008-2012, North Dakota's corn industry alone has contributed $9.73 billion dollars to the
economy. North Dakota has 5 ethanol plants, each with an average of 50 workers who earn an
average salary of $45,000-$48,000. Those 250 people use a total of 163 million bushels of corn,
producing a total of 435 million gallons of ethanol, and 1.3 million tons of distiller's grain for
high quality livestock feed. North Dakota fuel stations on a percentage basis are selling more
ethanol than currently mandated. [EPA-HQ-OAR-2015-0111 -2541-A4 p. 1 ] [EPA-HQ-OAR-
2015-0111-1044 p.176]
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The numbers I've just briefly touched on emphasize that ethanol has been the single largest factor
in economic rural development. I will leave you with this question: now that the ethanol industry
is up and running - and subsidy free - would you want to take the legs out from underneath its
steady forward pace? [EPA-HQ-OAR-2015-0111-2541-A4 p.l] [EPA-HQ-OAR-2015-0111-
1044 pp. 176-177]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 177-178.]
First, in my long farming career, there has not been one single policy that has done more to
revitalize our area than the renewable fuel standard. In the 1980s, with low market prices, we lost
an entire generation of farmers. The RFS has reversed the trend of young people leaving rural
areas.
Since 2005, 14 young persons have come back to our community to farm. This has added young
families to our rural school districts and our local churches. We have also seen a large build-out
of grain-handling infrastructure with the increased yields that corn has proven in our area.
North Dakota Ethanol Council
The RFS has improved the economic well-being of North Dakota in the following ways:
• Jobs - Ethanol production accounts for more than 10,000 direct and indirect jobs across
all sectors of North Dakota's economy.
• Ag and Rural Economy - Each of North Dakota's five ethanol plants is located in a
community with a population of less than 2,500 and contributes an average of 49 jobs and
an average annual payroll of $3.3 million to the community. The proposed cut will have a
devastating impact on agriculture and our rural economies. [EPA-HQ-OAR-2015-0111-
1927-A1 p. 1]
North Dakota Farmers Union (NDFU)
When setting standards for the RFS, the goals for the program and the program's importance to
one our nation's most vital industries must be considered. The program: [EPA-HQ-OAR-2015-
0111-1916-A1 p. 1]
• Benefits rural America. The benefits the RFS provides for rural communities are both
immediate and long-term. Immediate benefits include investment in conventional and
advanced ethanol plants, many of which are farmer-owned and create jobs in rural areas.
[EPA-HQ-OAR-2015-0111-1916-A1 p. 1]
North Dakota Office of the Governor
The ethanol industry is an important contributor to North Dakota's economy, accounting for
more than 10,000 direct and indirect jobs across the state. Ethanol plants stimulate the economy
in rural areas by offering well-paying jobs in small communities, as each of North Dakota's five
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ethanol plants are located in a community with a population of less than 2,500. These plants
contribute an average of 49 jobs and an average payroll of $3.3 million to their respective
communities. In addition, the plants offer a dedicated market for feed-stocks for hundreds of
local farmers. The State of North Dakota has supported the use of renewable fuels in our state by
providing incentives to establish flex fuel pumps, which resulted in 200 flex fuel pumps being
provided in over 40 communities throughout the state. [EPA-HQ-OAR-2015-0111-1763-A2 p.
1]
The proposed revisions could stifle investment in new ethanol plants, and hinder valuable
economic activities in rural communities across the country. [EPA-HQ-OAR-2015-0111-1763-
A2p. 1]
Northern Canola Growers Association
Well beyond the canola and agricultural sector, biodiesel provides numerous benefits for
consumers and society as a whole, including:
-new jobs and economic development, particularly in rural America [EPA-HQ-OAR-2015-0111-
2036-A1 p.2]
Biodiesel has and will continue to create and sustain jobs in the United States, including many in
rural America. An economic study conducted for the National Biodiesel Board estimates that the
biodiesel industry, at 1.7 billion gallons of production, supports more than 62,000 jobs, $2.6
billion in wages, and $16.8 billion in overall economic impact. The industry's economic impact
is poised to grow significantly with continued production increases. The industry supports jobs in
a variety of sectors, from manufacturing to transportation, agriculture and service. [EPA-HQ-
OAR-2015-0111-2036-A1 p.2]
South Dakota Corn Growers Association
My wife and I have witnessed a wave of sons and daughters returning to family farms and rural
businesses, which was not taking place prior to the RFS. I only hope this this progress can
continue to allow my children to proudly be the 7th generation. [EPA-HQ-OAR-2015-0111-
0269-A1 p. 1]
Our farm communities that are either near or home to a biofuel facility have witnessed an
economic transcendence from the 80's and 90's when families were experiencing bankruptcy
and encouraging their children to pursue careers off of the farm. Since the passing of the
Renewable Fuel Standard, a new trend has been set as young people are once again returning to
the family farm. Educated individuals are returning to their rural roots because of the quality jobs
available at ethanol plants and agriculture in general has become a hotbed for career
opportunities. Cuts to the RFS will undoubtedly hamper this progress. [EPA-HQ-OAR-2015-
0111-1811-A1 p.1-2]
Currently, our state's family farmers are on track to grow another bumper crop. Those families
are faced with extremely tight margins as prices sit below the cost of production for many.
Cutting the corn ethanol volumes in the RFS will only further hurt those who have been
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committed to growing the necessary feed stocks that have made the RFS a success. [EPA-HQ-
OAR-2015-0111-0269-A1 p.2]
South Dakota Farmers Union
The ethanol industry has provided rural South Dakota good paying jobs that stimulate the rural
economy. South Dakota Ethanol plants provide about 1900 jobs that average annual salaries
$60,000 per year. These plants provide job opportunities to rural South Dakota. They help
stimulate their local economy by purchasing vehicles, fuel, office supplies and many things a
large company needs to operate. With the presence of an ethanol plant in a community, the local
school stands to be a high recipient by means of tax revenue. Ethanol plants contribute a
substantial percentage of the tax base for a rural community and their school district. [EPA-HQ-
OAR-2015-0111-2358-A1 p. 1]
The economic benefits the RFS provides for rural communities are both immediate and long-
term. Immediate benefits include investment in conventional and advanced ethanol plants, many
of which are farmer-owned and all of which create good jobs in rural America. Encouraging
more biofuels plants and requiring strong production from existing plants creates more jobs,
secures existing jobs, and provides a stable tax base that will allow rural communities to flourish.
A formal economic paper commissioned by the Renewable Fuels Association determined that
the ethanol industry contributed nearly $53 billion to the U.S. Gross Domestic Product1 and
supported over 379,000 jobs in 20142, despite the policy challenges the industry faced that year.
[EPA-HQ-OAR-2015-0111-2358-A1 p. 1]
1 Urbanhuk, John M. Contribution of the Ethanol Industry to the Economy of the United States in 2014, at 8.
http://ethanolrfa.3cdn.net/94596be2e72251b795 nkm6ii26n.pdf
2 Id. at 9.
State of Indiana; State of Indiana House of Representatives
The economic impacts to our state cannot be overstated. Ethanol is responsible for over 525
direct jobs, $30 million in salary and benefits, and over 4,100 indirect jobs in our state, which
represent $3.6 billion in total economic activity and revenue in the state. [EPA-HQ-OAR-2015-
0111-3466-A1 p.l]
State of Nebraska
The EPA's reduction of the RFS leaves me concerned for the future economic growth of my
state. During a recent trade mission to Denmark, the CEO of a biotech company with a major
presence in Nebraska had considered expanding in the United States, but uncertainty resulting
from the EPA's proposal caused them to halt future expansion plans. This was one example of a
significant growth opportunity cut short because of the proposal to lower the RFS. [EPA-HQ-
OAR-2015-0111-1810-A1 p.l]
Syngenta
If finalized, the rule could have the following effects:
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- Destabilized farm economy. Following the harvest of a record corn crop in 2014, grain
supplies are rising and corn prices fell to nine-year lows. Corn prices in some locations have
fallen below the cost of production. With another large corn harvest expected in 2015, EPA's
proposal would take away an important demand stimulus at a time when farmers need it most.
The end result would be lower farm income. [EPA-HQ-OAR-2015-0111-2493-Al p.5]
U.S. Canola Association (USCA)
Biodiesel has and will continue to create and sustain jobs in the United States, including many in
rural America. An economic study conducted for the National Biodiesel Board estimates that the
biodiesel industry, at 1.7 billion gallons of production, supports more than 62,000 jobs, $2.6
billion in wages, and $16.8 billion in overall economic impact. The industry's economic impact
is poised to grow significantly with continued production increases. The industry supports jobs in
a variety of sectors, from manufacturing to transportation, agriculture and service. [EPA-HQ-
OAR-2015-0111-1819-A1 p.2]
Joni Ernst, United States Senator
As you know, Iowa leads the nation in biofuels production, and the long delay in issuing RVOs
for 2014, 2015 and 2016 has created uncertainty for the biofuels industry. This has hampered
investment in 2nd generation biofuels, which has been detrimental to the economy of rural Iowa
and the Midwest. [EPA-HQ-OAR-2015-0111-3427 p.2]
Response:
Numerous commenters state that greater biofuel mandates increase employment, raise farm
incomes and spur rural development in the U.S. For example, the South Dakota Farmers Union
states that the ethanol industry has provided rural South Dakota with good paying jobs that
stimulate the rural economy. According to the commenter, South Dakota ethanol plants provide
about 1,900 jobs that average annual salaries $60,000 per year. The Indiana Farm Bureau claims
that in 2014, Indiana's ethanol industry directly employed 526 people and created 3,620 full-time
equivalent jobs elsewhere in Indiana's economy. In addition to investing in jobs, the ethanol
industry's direct capital investment in Indiana has totaled $1.5 billion since 2006 according to
the commenter. The North Dakota Ethanol Council suggests that each of the five existing ethanol
facilities have created almost 49 direct jobs, and an average payroll of $3.3 million.
The National Biodiesel Board (NBB) commissioned LMC International to produce a study called
"Economic Impact of the U.S. Biodiesel Industry," published in November 2013. It assesses
economic impacts (e.g., employment, wages, value added in the supply chain) of 2013 biodiesel
production along with impacts of a range of biodiesel scenarios for 2014. NBB submitted this
study along with their comments. Among the findings, LMC estimated "2013 biodiesel
production at 1.7 billion gallons, supporting $16.8 billion in total economic impact, more than
62,000 jobs, and $2.6 billion in wages paid." See Section 3.4.3 for more on this topic.
On the other hand, the American Cleaning Institute suggests that proposed RVOs would continue
to divert large quantities of a finite, inelastic supply of animal fats to the biofuels market, thereby
critically disadvantaging the domestic oleochemical industry. The commenter suggests that the
U.S. oleochemical industry could likely switch to foreign-sourced palm oil, which could result in
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a loss of potentially 25,000 U.S. jobs. The National Restaurant Association cites a study by
PricewaterhouseCoopers that concludes that the RFS is driving commodity costs upward and
will result in an increase in costs to U.S. chain restaurants by as much as $3.2 billion annually or
$18,000 per year for each chain restaurant location. The Association further states that
restaurants are often the cornerstones of their communities and this is money that could be spent
on job creation and investments that benefit restaurant customers, their communities, and the
economy.
EPA believes that higher renewable fuel 2014-2017 RVOs will result in increases in
employment, income, and tax revenues to many rural communities throughout the U.S. While
the comments on employment and rural economic development provide insights into the impacts
of increasing RVOs on the renewable fuels and related industries, they do not necessarily
provide a complete picture of the impact of a change in the volume standards on the whole U.S.
economy. The example of the oleochemical industry shows that there could be employment and
income losses outside of the biofuel and their related industries from the greater use of renewable
fuels as a result of the RFS.
Numerous State and local governments and biofuel producers provide information on the tax
revenue benefits of the greater use of biofuels. For example, the Indiana Corn Growers
Association claims that the state's ethanol and interlinked industries generated economic activity
or revenues in 2014 of roughly $3.6 billion. This added economic activity within Indiana resulted
in a net contribution to the state's gross state product of $934 million in 2014 and an increase of
household income, including farmer income, of $315 million. According to the Indiana Corn
Growers Association, the ethanol industry contributes, either directly or through indirect and
induced effects, $44 million per year to state and local taxes. In general, supporters of biofuels
are requesting that EPA not reduce the RVO's for the 2014-2017 standards below the statutory
volumes since this will result in the loss of employment, income, and tax revenues to numerous
rural communities across the U.S.
The National Biodiesel Board asserts that "EPA continues the fallacy that the renewable fuels
industry is a zero sum game" (in terms of impacts on job creation, rural economic development,
and the supply of agricultural commodities). EPA disagrees with this assertion. We acknowledge
that the renewable fuels industry has and can produce employment and rural economic
development. However, it is important to acknowledge the potential for offsetting economic
impacts in other sectors and industries, both in terms of employment and income, related to the
growth of renewable fuels. While the LMC International study does not assess impacts of this
rulemaking, EPA acknowledges the findings of positive economic impacts attributable to U.S.
biodiesel production. See Section 3.4.3 for more discussion on this topic.
From an economy-wide perspective, consider an example estimating the overall impacts on
employment in the U.S. of an environmental requirement. When the economy is at full
employment, an environmental regulation is unlikely to have much impact on net overall U.S.
employment; instead, labor would primarily be shifted from one sector of the economy to
another sector. On the other hand, if a regulation comes into effect during a period of high
unemployment, a change in labor demand due to regulation may affect net overall U.S.
employment because the labor market is not in equilibrium. In the longer run, the net effect on
employment is more difficult to predict and will depend on the way in which the related
industries respond to the regulatory requirements. For this reason, caution is needed when
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assessing the net employment impacts for the whole economy of an individual environmental
standard. Similar concerns arise with estimating the impacts on income and output of the whole
economy from an environmental standard.
In setting the total renewable fuel RFS standard, EPA only considered "inadequate domestic
supply" under the general waiver authority. In this context, EPA is precluded from considering
employment impacts of the total renewable fuel standard. When lowering the advanced standard,
EPA used the cellulosic waiver authority so that a broader range of factors can be considered
than in setting the total standard. While employment considerations can be considered in this
context, they were not a primary driver in setting the RVO's given the varied impacts of different
fuels and other impacts. See Section 3.3.1 and 3.4.3 for discussions on this topic as it relates to
the biomass-based diesel standard.
7.8 Cost to Consumer
Comment:
American Farm Bureau Federation (Farm Bureau)
Finally, the RFS2 has been integral in keeping gasoline prices at lower price levels. Ethanol is
currently selling at $0.40 per gallon less than a gallon of Reformulated Blendstock for
Oxygenate Blending (RBOB) gasoline. This price spread essentially means that a gallon of E10
(gasoline containing 10 percent ethanol) is more than 4 cents per gallon cheaper than a gallon of
conventional gasoline with no ethanol. At today's market prices, if refiners slow their blending
of ethanol, octane demand would have to be met with other higher cost sources and this higher
cost to the refiner would most likely be passed on to the consumer in the form of higher gasoline
prices at the pump. Higher gas prices will also increase the cost of food, given that energy and
transportation costs are significant factors in determining the price consumers pay for goods.
[EPA-HQ-OAR-2015-0111-2355-A1 p. 3]
Cornelius Seed Corn Company
I run the Cornelius Seed Corn Company, which was started by my great grandfather in the early
20th Century. I'm the fourth generation in my family in the company, and my son recently joined
us to make the 5th generation. My company and all of its employees would be impacted by a
decrease in the Renewable Fuel Standard because it would impact our customers. [EPA-HQ-
OAR-2015-0111-3247-A1 p.l]
Florida Chamber of Commerce
While consumers are spending more on gasoline due to the use of ethanol, they are also spending
more on goods and services as businesses face increased costs in production and distribution of
these goods and services. [EPA-HQ-OAR-2015-0111-3425 p.2]
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Iowa Corn Growers Association (ICGA)
Increased fuel prices. Lower ethanol blending would result in higher gasoline demand and
increased pump prices. According to analysis by Louisiana State University, gasoline prices
would rise 4.1-6.5 cents per gallon in 2015-2016, meaning Americans would spend nearly $15
billion more on gasoline in 2015 and 2016—or $46 per American citizen over the two years.
[EPA-HQ-OAR-2015-0111-1820-A1 p. 5]
Mass Comment Campaign sponsored by anonymous 11 (email) - (695)
and they benefit consumers by providing them with a choice and savings at the pump. [EPA-HQ-
OAR-2015-0111-0214-A1 p.l]
Mass Comment Campaign sponsored by anonymous 15 (email) - (2485)
Ethanol consistently trades around 50 cents cheaper than gasoline. By cutting the volumes of
ethanol and other biofuels, EPA is creating high prices at the pump for American consumers -
some estimate an increase between $6.8 and $11.3 billion for 2014. [EPA-HQ-OAR-2015-0111-
0217-Alp.l]
Mass Comment Campaign sponsored by anonymous 22 (email) - (57)
Ethanol lowers gas prices by $1.09 per gallon in the Midwest, saving the average American
household $1,200 per year. [EPA-HQ-OAR-2015-0111-1478-A1 p.l]
Mass Comment Campaign sponsored by anonymous 30 (email) - (26)
Ethanol consistently trades around 50 cents cheaper than gasoline. By cutting the volumes of
ethanol and other biofuels, EPA is creating high prices at the pump for American consumers —
some estimate an increase between $6.8 and $11.3 billion for 2014. [EPA-HQ-OAR-2015-0111-
2560-Alp.l]
Mass Comment Campaign sponsored by anonymous 9 (email) - (230)
Ethanol consistently trades around 50 cents cheaper than gasoline. By cutting the volumes of
ethanol and other biofuels, EPA is creating high prices at the pump for American consumers -
some estimate an increase between $6.8 and $11.3 billion for 2014. [EPA-HQ-OAR-2015-0111-
0212-Alp.l]
Mass Comment Campaign sponsored by Corn, LP (web) - (37); Mass Comment Campaign
sponsored by Little Sioux Corn Processors (web) - (44); Mass Comment Campaign
sponsored by Quad County Corn (web) - (37); Mass Comment Campaign submitted by
employees of Siouxland Energy Cooperative (web) - (30)
The RFS is working for consumers. According to National Association of Convenience Stores,
price is the most important factor when buying gas. Since ethanol is the lowest cost
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transportation fuel and octane source in the world, ethanol is contributing a cost savings to
American motorists. Drivers in Iowa and around the nation are now seeing more homegrown,
lower-cost fuel options such as E15 and E85 at the pump, and these choices will continue to
expand if the RFS is allowed to continue working as intended. [EPA-HQ-OAR-2015-0111-2047-
Al p.2]
Mass Comment Campaign sponsored by employees of Western Dubuque Biodiesel (web) -
(1)
The RFS is working for consumers. The RFS has promoted greater consumer fuel choice.
Drivers in Iowa and around the nation are now seeing more homegrown, lower cost, cleaner
burning fuel options such as B5, BIO and B20 at the pump, and these choices will only expand if
the RFS is allowed to continue working as intended. In Iowa, the average blend level of biodiesel
reached 9.4 percent in 2014, increasing by more than 260 percent in the last five years. [EPA-
HQ-OAR-2015-0111-1961-A1 p.2]
National Biodiesel Board
EPA provides an analysis of estimated costs of using biodiesel to replace petroleum diesel.
While EPA purports to compare the cost of biodiesel against the cost of petroleum diesel, its
assessment is incorrect. EPA contends that increasing the amount of biomass-based diesel by 100
million gallons from 2015 to 2016 would result in double the increase in costs. EPA then
contends that requiring additional volumes of biomass-based diesel to compete with other
advanced biofuels rather than increasing the biomass-based diesel volume may also "temper to
some extent BED prices." EPA-HQ-OAR-2015-0111-0008 at 8. While EPA provides no support
for such conclusory statements, this notion that additional gallons of biomass-based diesel should
compete with other advanced biofuels remains counter to the goal of Congress to increase
production. Moreover, the increase of 280 million gallons for applicable volume from 2012 to
2013 (and actual over 600 million gallons in increased production) did not substantially increase
the price of diesel fuel. Accounts indicate that petroleum diesel blended with biodiesel has been
cheaper, as a result of the RFS2 program. [EPA-HQ-OAR-2015-0111-1953-A2 p.54-55]
Regardless, the purported costs translate into approximately $0.004 per gallon for 2015 and
$0.008-$0.012 per gallon for 2016.55 As noted above, this is similar to the cost estimate EPA
previously found to not present an "unreasonable burden." Denial of API/AFPM Petitions for
Reconsideration at 20. Although EPA previously found that costs should not trump the other
factors, it now states that the market should allow parties to choose biomass-based diesel "over
competing products in meeting the advanced and total RFS standards." EPA-HQ-OAR-2015-
0111-0008 at 8. Moreover, real-world experience shows that blending with biomass-based diesel
has allowed prices at the pump to be reduced. A Terminal Pricing Sheet (Attachment 3) shows
that diesel fuels blended with biodiesel (B5, BIO and B15) have a lower cost than BO. See also
Section VLB.5. In some cases, these savings were greater than the purported increases in price
estimated by EPA. Again, EPA's supplemental analysis must be rejected. [EPA-HQ-OAR-2015-
0111-1953-A2p.55]
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The impact of the use of renewable fuels on the cost to consumers of transportation fuel and on
the cost to transport goods. [EPA-HQ-OAR-2015-0111-1953-A2 p.71]
For the 2013 volume, EPA found that the 1.28 billion gallon mandate translated into a per gallon
cost over the diesel pool of between $0.006 and $0.008. 77 Fed. Reg. at 59,479. EPA provides
cost estimates in the new proposal, which translate into purported increases in per gallon costs of
approximately $0.004 per gallon for 2015 and $0.008-$0.011 per gallon for 2016. Although
obligated parties continue to claim that the requirement to use renewable fuel is resulting in
increased costs to the consumer, this is simply incorrect. In fact, the program has resulted in
providing the public with an alternative fuel source at a lower cost. Each gallon of RFS2-
qualified biodiesel is accompanied by a RIN credit. The value of that credit, which is traded on
the open market, is factored into the value of each gallon of biodiesel. This added value allows
biodiesel to be sold at a lower price to fuel distributors or fleet managers, who can then pass
along savings to consumers.59 [EPA-HQ-OAR-2015-0111-1953-A2 p.71]
Testimony at the June 25, 2015 hearing support this finding. Michael Whitney of Musket Corp.,
which provides diesel fuel through Love's Travel Stops directly to consumers, testified that "we
put biodiesel in our fuel because it is cheaper than diesel," and that RINs help his company
obtain additional revenue to reduce the prices at the pump. [EPA-HQ-OAR-2015-0111-1953-A2
p.71]
55 Based on EPA's diesel fuel estimate use for those years in "Calculation of % standards for annual rulemaking"
(EPA-OAR-2015-0111-0005).
59 See Terminal Pricing Sheet (Attachment 3).
North Dakota Ethanol Council
The RFS has improved the economic well-being of North Dakota in the following ways:
Consumer Savings - Growth in ethanol production has lowered the price of gasoline by $0.29 per
gallon on average since 2000. In recent years, this number has been over $1 per gallon, which
correlates to a $1,200 savings for the average American household in a year. [EPA-HQ-OAR-
2015-0111-1927-A1 p. 1]
Renew Kansas
The EPA's proposed rule is inconsistent with Congress' intent to provide consumers with greater
access to renewable fuel. Neither does the proposed rule fulfill the EPA's statutory target
obligation. The RFS has also been the main driver of reducing costs for consumers at the pump -
encouraging economic growth and stability across the country. The proposed rule on the RFS
would reduce the availability of higher-blend ethanol fuel to consumers, leading to higher fuel
prices. Rather than reduce the RFS, the EPA should follow the Clean Air Act requirements to
provide certainty to farmers, consumers, and the entire renewable fuels industry. [EPA-HQ-
OAR-2015-0111-1309-A1 p.3]
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South Dakota Corn Growers Association
Cuts to the RFS wouldn't only hurt farmers and the ag economy, but they would also deliver a
blow to the nation's fuel consumers. Ethanol helps to keep gas prices down, providing a relief to
working families. If you indeed cut the RFS, gas prices would rise 4.1-6.5 cents per gallon in
2015-2016 according to analysis by Louisiana State University, meaning Americans would
spend nearly $15 billion more on gasoline in 2015 and 2016. [EP A-HQ-OAR-2015-0111-1811-
Al p.2]
State of Indiana
Ethanol lowers gas prices by $1.09 per gallon in the Midwest, saving the average American
household $1,200 per year. [EPA-HQ-OAR-2015-0111-3347-A1 p.2]
The George Washington University
Need for Incremental Analysis
In this proposed rule, EPA provides some cost estimates for increased production of corn
ethanol, sugarcane ethanol, and soybean-based biodiesel, but does not provide any estimated
benefits. EPA justifies this omission by referring back to two initial analyses of the overall RFS
program, which were finalized in 20077 and 2010.8 Because these analyses examine the costs and
benefits of the RFS as implemented in 2022, and because they assume that EPA will be able to
meet the statutory goals for biofuel production, it's difficult to parse out the actual effects of
EPA's proposal. [EPA-HQ-OAR-2015-0111-1815-A1 p.5-6]
Despite this difficulty, EPA maintains that it is not necessary to analyze incremental effects of
the RFS program. This approach fails to appreciate the economic and environmental difference
between different biofuel sources, which may be significant for different fuel sources
(particularly as EPA deviates from the standards prescribed in the authorizing statute). In its
proposal, EPA argues that: [EPA-HQ-OAR-2015-0111-1815-A1 p.6]
[Indented quote] The short time frame provided for the annual renewable fuel rule process does
not allow sufficient time for EPA to conduct a comprehensive analysis of the benefits of the
2015 and 2016 standards and the statute does not require it. Moreover, as discussed in the [2013
biodiesel proposal], the costs and benefits of the RFS program as a whole are best assessed when
the program is fully mature in 2022. We continue to believe that this is the case, as the annual
standard-setting process encourages consideration of the program on a piecemeal (i.e., year to
year) basis, which may not reflect the long-term economic effects of the program. Therefore, for
the purpose of this annual rulemaking, we have not quantified benefits for the 2015 and 2016
proposed standards. We do not have a quantified estimate of the GHG impacts for the single year
(e.g., 2015, 2016). [EPA-HQ-OAR-2015-0111-1815-Al p.6]
It is true that Congress, in authorizing the EPAct and the EISA, did not give EPA a significant
amount of time to conduct a thorough analysis. This is a shortcoming of the legislation rather
than a shortcoming with the Agency. [EPA-HQ-OAR-2015-0111-1815-A1 p.6]
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However, EPA is not correct in its assertion that incremental analysis would not be helpful for
evaluating the RFS program. Because the program is implemented on a yearly basis, and each
yearly standard reflects marginal changes both from the previous standard and from the levels
prescribed in the authorizing statute, incremental analysis would be useful for researchers and the
public in understanding the effect of EPA's individual proposed renewable fuel standards. This is
particularly true in a rulemaking such as this one, in which ethanol and cellulosic fall short of
their statutory levels—by 1 billion and 4.19 billion gallons, respectively—and biodiesel exceeds
its statutory level by 800 million gallons. In this case, the benefits of the overall RFS program
that EPA calculated in 2007 and 2010 only represent the benefits and costs of a hypothetical RFS
program that has not been implemented and likely will not be implemented in the future. [EPA-
HQ-OAR-2015-0111-1815-A1 p.6]
Opportunity to Revisit Analytical Assumptions
Since the initial regulatory impact analyses were first conducted in 2007 and 2010, new
information has emerged that may affect the assumptions EPA made in its regulatory analyses.
Availability of new data and the proliferation of new third-party analyses provide EPA with a
key opportunity to revisit the assumptions about environmental effects and demand for gasoline
that underpinned its initial benefit-cost assessment. [EPA-HQ-OAR-2015-0111-1815-A1 p.7]
7 Environmental Protection Agency. April 10, 2007. "Regulatory Impact Analysis: Renewable Fuel Standard
Program." http://www.regulations.gov/#!documentDetail;D=EPA-HQ-OAR-2005-0161-0282
8 Environmental Protection Agency. February 2010. "Renewable Fuel Standard Program (RFS2) Regulatory Impact
Analysis."
Urban Air Initiative
UAI's comments make the following points:
-Recent developments give reason for hope, including an Argonne National Labs WTW study on
High Octane Fuels (HOFs) that concluded higher ethanol blends (e.g., E25 - E40) were 'major
enablers' of HOFs that could also achieve substantial WTW reductions in GHGs (18 - 32%) with
little or no marginal cost to refiners and consumers.7 [EPA-HQ-OAR-2015-0111-1821-A1 p.3-
4]
7 'Well to Wheels Greenhouse Gas Emissions Analysis of High-Octane Fuels with Various
Market Shares and Ethanol Blending Levels', Jeongwoo Han et al., Argonne National
Laboratory, ANL/ESD-15-10, July 14, 2015.
Response:
EPA received numerous comments related to the costs of the proposed RFS 2014-2017 standards
setting renewable fuel volumes. Most commenters assert that greater use of renewable fuels
would lower transportation fuel costs and fuel prices for U.S. consumers. For example, multiple
commenters (e.g., American Farm Bureau Federation, Iowa Corn Growers Association) claimed
that blending ethanol reduces the price of transportation fuel to consumers because the cost of a
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gallon of corn ethanol is cheaper than a gallon of reformulated blendstock oxygenated blend
(RBOB). Alternatively, the Florida Chamber of Commerce suggests that consumers are
spending more on gasoline due to the use of ethanol. They suggest that consumers are also
spending more on goods and services as businesses face increased costs in production and
distribution of goods and services due to the RFS. Regarding biodiesel, the National Biodiesel
Board believes that EPA overestimated the cost of additional biodiesel volumes. They claim that
"the program has resulted in providing the public with an alternative fuel source at a lower cost",
and they provided documentation of a testimony in which a diesel provider claims to use
biodiesel because it's cheaper than diesel fuel.
These and other commenters, along with commenters on RIN prices and retail fuel prices
discussed in sections 7.5 and 7.6, tend to confuse prices with the costs of the RFS program to
consumers. In the case of ethanol, one cannot simply compare the price of a gallon of ethanol to
that for a gallon of gasoline, as they have different values in terms of both their energy content
(e.g., how far a vehicle will go on that gallon of fuel) and on its blending value as a gasoline
blendstock (e.g., the higher octane of ethanol increases its value whereas its impact on gasoline
volatility lowers its value). The energy content is easy to calculate - roughly 1/3 less energy per
gallon of ethanol than in a gallon of gasoline. Thus, to be of equal cost to consumers ethanol
would have to be priced about 2/3 that of gasoline. The other blending values vary over time,
but ethanol's market value should already reflect this
In the case of biodiesel, it also has lower energy content than the diesel fuel it replaces by about
10%, but the real issue in the comments is that the commenters are ignoring the distortionary
impact of the RIN. The RIN from the RFS program is reducing the price of biodiesel blends and
increasing the price for diesel fuel in the marketplace, but that doesn't mean that biodiesel is
costing consumers less. One needs to look at the costs to produce and deliver to market
renewable fuels without the distortionary impact of the RIN on their prices to assess the cost to
consumers. If one does this, it is obvious that biodiesel costs considerably more than the diesel
fuel it displaces on a per gallon basis as seen in the chart below (the chart does not adjust for the
10% lower energy content of biodiesel).
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2007
Diesel
• B99/B100
FIGURE 13
HISTORICAL B99/B100 PRICES VERSUS DIESEL
34
Source: Clean Cities Alternative Fuel Price Report, July 2015. U.S. Department of Energy
NBB points to the discount that RINs can provide to biofuel producers in support of the claim
that biodiesel is cheaper than diesel fuel. EPA acknowledges that biofuels may be reduced due
to REST values, thus helping making the biodiesel price competitive with diesel fuel. However,
the discount due to the RIN is not a cost or a savings, it is a transfer. In EPA's cost
methodology, we attempt to calculate the real resource costs associated with using biofuels in
comparison to the fossil fuels that they replace. We do not attempt to capture transfers as a result
of RIN prices, which we acknowledge have distributional impacts. When EPA undertook its
illustrative cost analysis of the RFS program, we evaluated the total societal cost to consumers
by considering the difference in wholesale costs of biofuels against their petroleum alternative
per energy equivalent gallon given current and projected market prices. Because we focus on the
wholesale level, this comparison does not consider taxes, retail margins, and any other costs
(e.g., infrastructure costs) or transfers that occur at or after the point of blending. Given that EPA
focuses on the cost of transportation fuels at the wholesale level, we did not attempt to estimate
the impact of the RFS standards on the price of fuels used by transportation fuel users in the
marketplace. Increasing supplies of renewable fuels would be expected to reduce overall world
fuel and crude oil prices. However, the impacts of the volume changes from this final rule would
be relatively small.
For more information on the extent and ways in which EPA considered cost in setting the
standards, please see Section 7.1 of this RTC.
34 Image taken from the Clean Cities Alternative Fuel Price Report, July 2015. Alternative Fuels Data Center, U.S.
Department of Energy.
http://www.afdc.energv.gov/uploads/publication/alternative fuel price report July 2015.pdf
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8. Environmental Impacts of the Proposed Rule
8.1 General Comments on Environmental Impacts
Comment:
AL-Corn Clean Fuel; Badger State Ethanol; Big River Resources, LLC; Commonwealth
Agri-Energy, LLC; Husker Ag LLC; Pacific Ethanol, Inc.
EPA must carefully examine the potential negative economic impacts of the proposed RVO
reductions.
We believe EPA must be cognizant of the potential negative economic and environmental
consequences of its actions. Unfortunately, the proposal is void of any analysis on the possible
impacts of cutting the RFS on the agricultural economy, gasoline prices, greenhouse gas (GHG)
emissions, investment in infrastructure, or investment in advanced and cellulosic biofuels.
American Farm Bureau Federation (Farm Bureau)
Renewable fuels have been a tremendous success story for the nation as a whole as well as to the
rural economy. The RFS2 has reduced our country's dependence on foreign crude oil, reduced
air pollution, increased farm incomes and provided good paying jobs in rural America.
Central Indiana Ethanol (CIE)
Unfortunately, the proposal is void of any analysis on the possible impacts of cutting the RFS on
the agricultural economy, gasoline prices, greenhouse gas (GHG) emissions, investment in
infrastructure, or investment in advanced and cellulosic biofuels.
Clean Air Task Force
A reduction in the implied corn ethanol mandate can benefit the environment in two related
ways. First, reduced demand for corn ethanol in the United States could result in reduced
production levels, which would lessen the net negative impact that corn ethanol production and
consumption have on the environment (climate change, air quality, water quality, and soil
quality) and food security. Second, a reduction in the implied corn ethanol mandate creates
headroom under the E10 blend wall for environmentally superior types of cellulosic and other
"advanced" ethanols.
We disagree, however, with Agency's view that it is also "appropriate to provide continued
growth of conventional renewable fuels at this time." Allowing the implied corn ethanol mandate
to expand will aggravate the environmental and social harms to which it contributes, while also
complicating the difficult task of achieving the various goals of the RFS within the constrained
context of the E10 blend wall. Increased demand for soy biodiesel would indirectly increase the
overall demand for vegetable oil, which in turn would expand the market for palm oil. An
increase in the production of Southeast Asian palm oil is likely to have a range of negative
environmental and social consequences. [EPA-HQ-OAR-2015-0111-1828-A1 p.11]
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Corn Producers Association of Texas (CPAT)
From an environmental standpoint, it could be argued that no one has a greater stake in looking
out for and caring for our natural resources than farmers. For farmers, their very livelihood
depends on the good stewardship of their land and natural resources. Many of our members'
families have been farming for multiple generations, and want to give future generations the
opportunity to also work with the land and continue a farming legacy.
East Kansas Agri-Energy, LLC (EKAE)
Additionally, renewable fuels are better for the air we breathe and for our environment — and
they are making a difference by decreasing our dangerous dependence on foreign oil. This
approach, if adopted, would damage the RFS, lock this coon by into our reliance on oil, lead to
even more windfall profits for the oil sector, cost consumers at the pump, halt the deployment of
advanced biofuels, and increase greenhouse gas and toxic air emissions.
Environmental Working Group (EWG)
Ultimately, EWG would like to encourage the growth and commercial application of advanced
and cellulosic biofuels that actually deliver a benefit to our environment. As EPA works to
finalize this proposed rule, we strongly encourage you to consider the environmental and human
health impacts of corn ethanol.
Florida Chamber of Commerce
Increasing the amount of ethanol to be blended in gasoline is irresponsible and increases costs to
both consumers and the environment. I urge that you retreat from increasing the amount of
ethanol in gasoline and consider the costs to consumers, businesses and the environment if you
do not.
The George Washington University
However, the availability of new scientific, technical, and economic information shows that the
RFS program does not work as it was intended to, and is likely causing significant environmental
harm through increased greenhouse gas emissions and damage to waterbodies and ecosystems.
Given the environmental damage and the large economic impact of the standards, EPA should
update its benefits analysis and consider using its waiver authority to further reduce the
standards. Responsibility rests with Congress to reevaluate the effects of the statutes it
authorized, which are now causing economic and environmental harm.
Illinois Department of Agriculture
To date, the RFS program has played a pivotal role in reducing petroleum imports to the lowest
level since the 1990s, lowering gas prices, improving air quality, and strengthening the economic
health of rural America and Illinois specifically.
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Illinois Farm Bureau
The RFS2 has reduced our country's dependence on foreign crude oil, reduced greenhouse gas
emissions, increased farm incomes and provided a source of good paying jobs in rural America.
Iowa Corn Growers Association (ICGA)
EPA proposed RVO reductions will have negative impacts. This proposal does not include
analysis on the possible impacts of cutting the RFS on the agricultural economy, gasoline prices,
greenhouse gas (GHG) emissions, or investment in infrastructure. If the rule is finalized as is, it
could have very real and negative impacts.
Iowa Farm Bureau Federation (IFBF)
Beyond the positives for agriculture, the RFS2 has been a broader success for the United State.
The expansion of the biofuels industry has improved air quality, reduced tailpipe emissions,
reduced prices at the pump, and has decreased U.S. dependence on the volatile foreign oil
market. Additionally, the RFS2 has benefited rural communities in Iowa and across the country.
Kansas Corn Growers Association
The RFS provides market access for ethanol to enter a fuel system that is largely
dominated by oil companies. In return, ethanol use is decreasing GHG emissions,
decreasing our country's dependence on foreign oil, providing domestic jobs and
improving rural economies. These are things EPA should support, not undermine.
Kansas Farm Bureau
Renewable fuels are a tremendous success story, not only for the nation but also for rural
communities. The RFS2 has reduced our country's dependence on foreign crude oil, reduced air
pollution, increased farm incomes and provided good paying jobs in rural America. Since the
RFS2 was put in place in 2007, the U.S. has seen tremendous growth within the agricultural
sector. If the Proposed Rule requirements are finalized, this decision will stall growth and
progress in renewable fuels as well as the broader agricultural economy.
Kansas Soybean Association
Biodiesel has contributed to increased domestic energy production while also delivering
significant greenhouse gas emissions reductions and creating jobs and boosting the farm and
rural economy.
Kentucky Beverage Association
Ten years after the RFS became law, the mass production of ethanol has resulted in little to no
environmental benefits. Recent studies have found that the RFS is actually increasing air
pollution and greenhouse gas emissions, degrading water sources and damaging biodiversity. A
2011 National Academy of Sciences study found that the production of ethanol is also likely to
increase air pollutants such as particulate matter, ozone and sulfur oxides. Additionally, ethanol
has only 67% of net energy per gallon, reducing fuel economy.
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Mass Comment Campaign sponsored by ActionAid USA (web) - (2629)
ActionAid remains strongly opposed to mandates for food-based biofuels. Land, especially
arable land that is suitable for agriculture, is not an unlimited resource. Expanding production of
biofuel crops means displacing food production or clearing forests, wetlands or other
ecosystems. This not only presents environmental problems with decreasing biodiversity and
emissions from land use change, but also undermines land rights. ActionAid works with
communities who have had their land threatened and communities who lost their land to biofuel-
crop plantations, in violation of their rights.
Mass Comment Campaign sponsored by anonymous 3 (web) - (893)
The over promise of the Renewable Fuel Standard, or RFS, has never come to fruition - but it
seems like the EPA is still holding on to the dream. Despite a preponderance of evidence that
shows the mandate has harmed land, water and air, the EPA recently proposed raising the —
amount of corn ethanol blended into gasoline in 2014, 2015 and 2016. Ten years of the RFS
program have shown that the ends don't justify the means in achieving this policy's
environmental objectives. Increasing the use of ethanol, and therefore the necessary production
of it, runs counter to ongoing climate concerns and undermines this administration's other policy
initiatives. All of this to say that the EPA should refer to the facts and lower the ethanol volumes
in their proposal before the rule becomes final.
Mass Comment Campaign sponsored by Care2 (email) - (9720)
The green promise of the Renewable Fuel Standard, or RFS, has never come to fruition but it
seems like the EPA is still holding on to the dream. Despite a preponderance of evidence that
shows the mandate has harmed land, water and air, the EPA recently proposed raising the
amount of corn ethanol blended into gasoline in 2014, 2015 and 2016. Ten years of the RFS
program have shown that the ends don't justify the means in achieving this policy's
environmental objectives. Increasing the use of ethanol, and therefore the necessary production
of it, runs counter to ongoing climate concerns and undermines this administration's other policy
initiatives. All of this to say that the EPA should refer to the facts and lower the ethanol volumes
in their proposal before the rule becomes final.
Mass Comment Campaign sponsored by anonymous 24 (postcard) - (207)
America's race cars have driven more than 7 million miles on 15% corn ethanol. Renewable
ethanol is better for the environment than petroleum and reduces greenhouse gas emissions by
50%.
Mass Comment Campaign sponsored by anonymous 8 (email) - (505)
Finally, I'm concerned about what this will do to the air we breathe. We cannot forget the
important environmental benefits of ethanol, which provides up to a 50 percent reduction in
greenhouse gas emissions, compared to gasoline. Ethanol is a sustainable octane source that is
much better for the environment than particulate-generating petroleum alternatives.
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Mass Comment Campaign sponsored by National Corn Growers Association (NCGA) -
(24,661)
The EPA should not forget its mission to protect human health and the environment. Ethanol
reduces greenhouse gas emissions and is a better octane source than petroleum. Your decision to
reduce corn ethanol levels HARMS BOTH THE RURAL ECONOMY AND THE
ENVIRONMENT which it is your mission to protect. [EPA-HQ-OAR-2015-0111-2566-A1 p. 1]
Your decision harms both the environment and rural economy. The RFS is doing exactly what is
was intended to do. It is successfully driving adoption of renewable fuel alternatives to
petroleum, supporting jobs across the country, ensuring the United States remains a global leader
in developing new renewable energy sources while decreasing GHG emissions here at home.
The continued health of the rural economy and the nation's environmental improvements hinge
upon this decision.
Mass Comment Campaign sponsored by Nebraska Corn Board (paper) - (1856)
The continued health of the rural economy and the nation's environmental improvements hinge
upon this decision. The RFS has laid the foundation for the domestic biofuels industry, by
helping to generate jobs, revive rural economies, reduce oil imports, lower gasoline prices,
reduce air pollution and cut greenhouse gas emissions.
Mass Comment Campaign sponsored by POET (email) - (661)
The EPAs proposed cuts could lead to higher prices you pay at the pump, increased dependence
on foreign oil, higher greenhouse gas emissions and lost opportunities for family farms.
Mass Comment Campaign sponsored by POET Biorefining 1 (paper) - (692)
Bio Fuels have given us cleaner air. Has given corn farmers a better market. The extra income
has helped with our family's needs. Please give us your support! The EPA's proposed cuts could
lead to higher prices you pay at the pump, increased dependence on foreign oil, higher
greenhouse gas emissions, and lost opportunities for family farms. For rural America, American
energy independence, cleaner air, higher octane, slowing climate change, and to promote real
consumer fuel choice with higher ethanol blends - the EPA needs to force oil companies to
comply with the intent and letter of the law as written.
Minnesota Corn Growers Association (MCGA)
The use of ethanol in our fuel supply also means American drivers are reducing harmful vehicle
emissions and paying less at the pump. As you can see, a reduction in the RVO numbers would
make an impact far beyond our fuel tanks. It would also result in job losses, reduced air quality
and fewer rural economic development opportunities. There are already enough barriers and
obstacles to ethanol in this country. By cutting the RFS, EPA is creating yet another one. For
example, E10 has been granted a 1 pounds-per-square inch (psi) waiver in the summer months.
However, El5 has a lower vapor pressure than E10, but has not been granted the same waiver.
Refiners are able to make reformulated gasoline (RFG) with Reid Vapor Pressure as low as 7.8
psi. If refiners were required to make RFG, there would be no need for a 1 psi waiver on E10 or
El 5 and there would be additional environmental benefits. Instead of cutting the RFS, EPA
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would be better off working to address issues like these. Imagine obstacles like Reid Vapor
pressure being removed from the advancement of El 5. If all gasoline contained 15 percent
ethanol, we'd replace 7 billion gallons of foreign oil and remove as much as 8 million tons of
greenhouse gas emissions from the air in one year.
Minnesota Farmers Union (MFU)
MFU has been a longtime supporter of biofuels believes that the RFS is important not just to the
profitability of Minnesota's farm families, but also an important part of national security and
crucial part of improving the environment and addressing climate issues.
Missouri Coalition for the Environment
The 2005 and 2007 Energy Bills deeply distorted and heavily subsidized the corn market-
directly incentivizing unsustainable and environmentally detrimental land disturbance. Corn
ethanol was billed as a 'green' alternative, a cleaner-burning fuel for our cars promising air
quality benefits and the reduction of the greenhouse gas emissions that contribute to climate
change. If the development of cellulosic alternatives had materialized as hoped, corn ethanol
may have served the transitional purpose intended by the original law. However, the federal corn
ethanol mandate has failed to deliver on any of its promised environmental benefits. Mandating
minimal ethanol blending in commercial fuel production created an artificially high demand for
corn- propping up corn prices at the expense of the environment and all of us that rely on clean
air and water. Higher corn prices effectively incentivize commodity crop production. This
decreases the incentives to invest in renewable fuel sources or grow the food people eat. The
mandate is a clear price signal to the agricultural industry. Missouri is among the top ten corn
producing states in the country and our farmers have responded to this signal. Growing corn is
profitable. Preserving a wetland or sustainably growing spinach is not. The government-
guaranteed market for corn ethanol may be profitable for industrialized agriculture, but the
conversion of Midwest land into heavily-subsidized corn fields also yields poor air, soil, and
water quality and has resulted in the destruction of valuable habitat- all while increasing climate
change-causing greenhouse gas emissions. Higher crop prices decrease incentives to grow real
food on our valuable cropland or to promote and invest in renewable fuel sources at a high cost
to us all. EPA's authority to set volume requirements for the Renewable Fuel Standard program
is derived from the Clean Air Act (CAA) — legislation designed to protect our natural resources.
The science is indisputable: corn ethanol and the policy that mandates its production is
devastating to our environment and has not demonstrated air quality benefits. The corn-based
ethanol mandate serves the narrow interest of the corn ethanol lobby and the corn ethanol lobby
alone — while we pay the costs. At this major milestone, we must finally put our environment
and science before narrow special interests, support using quality farm land for sustainable
agricultural production, and invest in renewable fuels that don't harm our environment. Corn
ethanol has no place in a clean fuel future.
National Farmers Union (NFU)
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 167.]
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Finally, in summary, EPA's proposed ethanol production targets are not consistent with the
administration's efforts to reduce the carbon emissions that drive global warming, not consistent
with the intent of Congress, not consistent with our nation's efforts to improve air quality
Nebraska Energy Office
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 123.]
Finally, I'm confused by an administration that claims to want cleaner, less carbon-producing
sources of overall energy for the nation and then makes a policy proposal that does exactly the
opposite. The scientific evidence exists to support ethanol's claims as a cleaner-burning fuel than
conventional gasoline.
North Dakota Grain Growers Association
We must move forward, not backward, when it comes to developing alternatives to fossil fuels
and foreign oil. We all know that the RFS and biofuels have created jobs that cannot be
outsourced, which have helped revitalize rural America. Additionally, renewable fuels are better
for the air we breathe and for our environment - and they are making a difference by decreasing
our dangerous dependence on foreign oil.
Northern Canola Growers Association
Consistent with the intent of the RFS, canola biodiesel provides significant benefits to our
national energy security, the environment, and the economy. Canola biodiesel is a domestically
produced renewable fuel that displaces petroleum, reduces emissions and improves air quality,
and provides jobs and additional economic benefits, especially in rural communities.
Ohio Corn & Wheat Growers Association
The RFS has been a tremendous success and has met all it was set out to do. It has helped to
significantly reduce air pollution and greenhouse gases, improve human health, and reduce our
dependence on foreign oil, all while saving consumers billions of dollars each year.
Smithfield Foods, Inc.
Furthermore, the promise of ethanol as a green, renewable fuel that would make the U.S. energy-
independent has not come to fruition. Many environmental groups are dubious of corn ethanol's
purported environmental benefits. Ethanol's negative impact on land use, soil erosion, and
nitrogen releases and greenhouse gas emissions have led leading environmental organizations,
such as the World Wildlife Fund, to conclude that Congress and the President should 'suspend
the Renewable Fuel Standard (RFS) mandate' and rework it entirely to reduce the role of corn
ethanol in the mandate.
South Dakota Corn Growers Association
The Renewable Fuel Standard (RFS) has been a tremendous success throughout South Dakota
and is working exactly as intended. The program has played a pivotal role in reducing petroleum
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imports to the lowest level since the 1980s, lowering gas prices, improving air quality, and
strengthening the economy in rural America in ways never seen before. In closing, we strongly
encourage your agency to carefully consider and calculate the potential negative economic and
environmental harm that this proposal would indeed provoke across the country.
The Ohio House of Representatives
Secondly, ethanol has positive environmental benefits as a clean burning fuel, helping keep our
air quality standards high.
Union of Concerned Scientists
While EPA clearly has authority to make such an enlargement, it is important that the exercise of
this authority is made with consideration of all the goals and criteria set forth in section 211
(o)(2)(B)(ii) of the Clean Air Act, which include the impact on climate change, ecosystems,
wildlife habitats, infrastructure, the price and supply of agricultural commodities and food prices.
Union of Concerned Scientists (UCS), Clean Air Task Force, Environmental Working
Group, ActionAid USA, and National Wildlife Federation (NWF)
As EPA modifies the RFS volume obligations for 2016 and beyond, the Agency must focus on
RFS-driven cropland expansion. We urge EPA to improve its implementation of the RFS's
habitat-conversion and soil carbon-loss protections and its accounting for the carbon emissions
from domestic land use change. Expanding on regional assessment of land use change driven by
cropland expansion by Wright (2013) and others, Lark and colleagues (2015) conducted the first
national-level analysis of land use change in the RFS era, using a variety of data sources and
methods to reduce errors, and found that 7.3 million acres of land was converted to cropland,
with a net cropland expansion of 2.9 million acres.
Wisconsin Corn Growers Association (WCGA)
The Renewable Fuel Standard is working as intended. The RFS has reduced greenhouse gas
emissions, decreased our reliance on foreign oil, lowered gasoline prices for consumers and
increased economic stability in rural America.
Response:
Many commenters claimed environmental benefits of replacing petroleum-based fuels with
biomass-based fuels. Generally identifying improvements to air emissions and more specifically
GHG reduction benefits, these comments supported the RFS program. While air quality impacts
of replacing petroleum-based fuel with biofuel are treated in section 8.3, EPA does believe that
the expanded biofuel use of biofuels provides GHG benefits especially for the use of those fuels
qualifying as advanced biofuels. One commenter noted ethanol resulted in emission benefits up
to 50% compared to gasoline. Emission benefits from ethanol can be over 50% for advanced
ethanol sources such as sugarcane-based ethanol but also much lower as in the case of ethanol
from corn starch. Some comments indicated that even greater use of renewable fuels would
provide even greater benefits and went on the criticize EPA for not quantifying the benefits that
would have occurred if statutorily anticipated volumes of renewable fuels had been proposed
rather than the lower volumes proposed by EPA. While EPA agrees in general that the GHG
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benefits would be higher were we able to support adoption of the statutory volumes, as noted
elsewhere, such volumes were not supportable and the GHG benefits associated with them not
achievable. However we disagree that EPA should have quantified the GHG benefits foregone
when comparing the proposed or the final volumes adopted to some other unattainable higher
volume, either those specified in EISA or some other hypothetical but also unattainable higher
volume. In exercising our waiver authorities in the FRM to lower the statutory volumes there is
no requirement for EPA to conduct such a specific analysis nor to conduct such analyses
comparing GHG benefits of the adopted standards to any of a range of alternative volumes.
Many commenters also discussed a wide variety of negative environmental impacts associated
with increased corn ethanol and other renewable fuels resulting from the RFS program. While
supporting the need for GHG emission reductions and the need for cellulosic and advanced
biofuels, some also disagreed with EPA's assessment that corn ethanol in particular reduces
GHG emissions compared to petroleum-based gasoline it replaces. EPA performed a
comprehensive assessment of the lifecycle GHG impacts of all the eligible renewable fuel
pathways under the RFS program. At that time EPA found that ethanol produced from corn
starch at a new natural gas, biomass, or biogas fired facility (or expanded capacity from such a
facility) using advanced efficient technologies (ones that we expect will be most typical of new
production facilities) will meet the 20% GHG emission reduction threshold compared to the
2005 gasoline baseline. Though much of the corn ethanol volume was grandfathered under the
RFS program per the statute and does not need to meet the 20% GHG threshold, production from
new facilities or from facilities which have expanded their volume production capability must
meet the 20% GHG emission reduction threshold. Since that rule, EPA has approved some
petitions that incorporate such technologies into the production of ethanol, and analysis has
shown performance above the 20% threshold for new volumes produced. This rulemaking did
not propose reassessment of those emission performance estimates and such reassessment is
outside the scope of this rulemaking. EPA also has assessed the non-GHG impacts of renewable
fuel production and use and these impacts are discussed further in sections 8.3, 8.4 and 8.5 of
this response to comments. GHG related comments are further discussed in section 8.2.
The Union of Concerned Scientists and others comment that EPA needs to take into
consideration impacts on land use change including expansion of domestic acres devoted to crop
production and, particular to Union of Concerned Scientists, consideration of the goals and
criteria set forth in section 21 l(o)(2)(B)(ii) of the Clean Air Act, which include impact on
climate change, ecosystems, wildlife habitats, infrastructure, the price and supply of agricultural
commodities and food prices. EPA did assess the impacts of greater renewable fuel demand on
land use and land use change as part of its assessment of the lifecycle GHG impacts of renewable
fuels included in the 2010 final rule adopting RFS2 and subsequently when assessing the impacts
of new renewable fuel pathways since that rule. Changes to these assessments is considered
outside the scope of this rule. Regarding the multiple factors in addition to impacts on GHG
emissions, EPA also considered these factors in its 2010 final rule and, in the context of the
proposed biodiesel standards for this rule, prepared an assessment of a number of these
factors provided as a memo to the docket of the proposed rule. This document has been updated
and provided as part of the rulemaking documentation for this final rule.35
35 Final Rule: Assessment of Statutory Factors for 2016-2017 biomass-based diesel (BED) Applicable Volumes
pursuant to CAA section 21 l(o)(2)(B)(ii)(I)-(VI); EPA Air Docket EPA-HQ-OAR-2015-0111
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Comments pertaining to economic benefits are addressed in section 7.1 of this response to
comment document.
8.2 Climate Change (GHG Impacts)
Comment:
AL-Corn Clean Fuel; Badger State Ethanol; Big River Resources, LLC; Central Indiana
Ethanol (CIE); Husker Ag LLC; Pacific Ethanol, Inc.
If finalized, the rule could have the following effects:
• Increased GHG emissions. Under EPA's proposal, low-carbon biofuels would be
supplanted with gasoline refined from tar sands, tight oil from fracking, oil from
deepwater drilling, or imported oil. The obvious result would be an increase in GHG
emissions from the transportation sector.
American Coalition for Ethanol (ACE)
It is critical for EPA to recognize that ethanol production is becoming more efficient and
sustainable as documented by many respected scientists.
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
(T)here will likely be little room for advanced biofuels with lower lifecycle GHG scores than
corn starch ethanol to displace the latter in the gasoline fuel pool.
Bates White
As result of advances in biodiesel production with the increased ability to use low-carbon
footprint feedstocks, such as waste greases, animal fats, and distiller's corn oil, biodiesel
currently reduces CO2 emissions by 81 percent, compared with petroleum diesel. While the
biodiesel accounts for only 3 percent of total U.S. petroleum diesel consumption, biodiesel
reduced U.S. CO2 emissions by over 16 million tons in 2014, equivalent to eliminating 3.6
million cars. If U.S. biodiesel volumes were to grow by 350 million gallons annually, by 2025, it
would still amount to less than 9 percent of U.S. diesel consumption, but it would provide 18
percent of the entire transportation sector's share of the U.S. commitment to reduce CO2
emissions. The cost-effectiveness of biodiesel as a means of reducing CO2 emissions can be
measured as a difference between the cost to produce biodiesel and the wholesale price of
petroleum diesel. In recent years, this cost differential has narrowed as a result of investments in
processing technology and production capacity. In 2011, the cost of using biodiesel to reduce
CO2 emissions was approximately $158 per avoided ton of CO2 emissions. By 2014, this cost
had declined by 78 percent to $34 per ton of CO2. These estimates are highly conservative, as
they do not account for biodiesel's substantial other benefits, from energy security and reduced
particulate emissions. Although this cost of reducing CO2 emissions increased in 2015, this was
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not due to increased biodiesel production costs, but rather to a sharp decline in world petroleum
prices. And as petroleum prices recover, the cost of using biodiesel to reduce CO2 emissions will
drop back to their 2014 level or below. The recent rapid growth of biodiesel as a low- carbon
alternative fuel represents a major success of the RFS2 program. In 2010 at the start of RFS2, the
U.S. produced only 340 million gallons of biodiesel. By 2013, it produced fully 1.4 billion
gallons. While biodiesel was almost an afterthought in the initial RFS policy formulation, the
industry's response has resulted in a widely available product that contributes significantly to
U.S. CO2 reduction goals while also promoting retail competition at the pump.
BioEnergy R&D
On May 29, the EPA released its proposed rule for 2014, 2015 and 2016 renewable volume
obligations under the RFS. The EPA has proposed reducing the oil industry's obligation to blend
renewable fuel in to gasoline. That directly contradicts the EPA's other efforts to reduce
greenhouse gas emissions. This proposal would increase greenhouse gas emissions by almost 10
million metric tons, the same effect as putting 2.1 million more cars on the road. In the final
rule, EPA should require obligated parties to comply with the law by blending increasing
volumes of renewable fuels.
Biotechnology Industry Organization
EPA's failure to set RFS volumes that guarantee an increasing displacement of fossil fuels over
time subverts the intent of Congress and the design of the program. Greenhouse gas intensity of
1 zlR
petroleum fuels, measured in carbon dioxide equivalents (CO2e), has grown worse since 2007.
At the same time, the greenhouse gas intensity of biofuels has improved.
148 Wang, M, J. Han, J. Dunn, H. Cai, and A. Elgowainy, 2012, "Well-to-Wheels Energy Use and Greenhouse Gas
Emissions of Ethanol from Corn, Sugarcane and Cellulosic Biomass for US Use," Environmental Research Letter, 7
(2012) 045905 (13pp).
Board of Commissioners, Mercer County; Crawford County; Greenville-Reynolds
Development Corporation; Office of Commissioners, Lawrence County, Pennsylvania
There are significant reasons that mandated ethanol blend rates should be lowered. They include:
5. Corn-based ethanol raises GHG emissions. According to studies conducted by the
Associated Press and Environmental Working Group, the RFS has increased GHG emissions.
Plowing pristine land releases carbon dioxide locked in the soil; and new fertilizer plants and the
ethanol factories also increase GHG emissions.
Brazilian Sugarcane Industry Association (UNICA)
Sugarcane ethanol produces significant greenhouse gas benefits compared to fossil fuels
and other biofuels.
Canola Council of Canada
Utilizing renewable biomass as a form of energy provides numerous economic and
environmental benefits. Diversification of feedstocks for renewable fuels is also important to
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move toward increased use of advanced biofuels. Canola epitomizes these important goals. Both
the government of Canada and the provincial governments have numerous programs that
encourage farmers to employ good farming practices, including conservation of lands. In
particular, canola has a unique place in sustainable crop rotations and played a significant role in
substantially reducing the number of acres of non-sustainable fallow land. Thus, canola is grown
sustainably and in a manner that reduces greenhouse gas emissions associated with its
production.
Carbon Green BioEnergy, LLC
Using the University of Nebraska BESS model, the CGBE carbon index for the full 2014
production year was 34.4 grams CO2e/MJ, not including an indirect land use (TDLU) factor,
which is significantly lower than the carbon index commonly used for gasoline (92.0 grams
CO2e/MJ).
Clean Air Task Force
Carbon dioxide releases from palm oil production are attributable to an RFS-driven increase in
total demand for vegetable oil, the releases would constitute "lifecycle greenhouse gas
emissions" as defined by CAA §21 l(o)(l)(H) and must be accounted for within the context of
the RFS's GHG reduction requirements.36
36 As EPA knows, volume is a key parameter in lifecycle emissions modeling of biofuels. If an underlying
assumption about the production/consumption levels for a particular fuel turn out to be incorrect—for example, if
biodiesel use exceeds projected levels—"there is a real risk that [indirect land use change] could undermine the
environmental viability of biofuels," write Perrihan Al-Riffai and others. "Non-linear effects, in terms of biofuels
volumes and behavioral parameters, pose a risk." Perrihan Al-Riffai, et al. Global Trade and Environmental Impact
Study of the EU Biofuels Mandate 71 (2010) (study carried out for the Directorate General for Trade of the European
Commission) (http://trade.ec.europa.eu/doclib/docs/2010/march/tradoc 145954.pdf).
Commonwealth Agri-Energy, LLC
If finalized, the rule could have the following effects:
• Increased GHG emissions. Under EPA's proposal, low-carbon biofuels would be
supplanted with gasoline refined from tar sands, tight oil from fracking, oil from deep-
water drilling, or imported oil. The obvious result would be an increase in GHG
emissions from the transportation sector.
Energy Resources Center at the University of Illinois-Chicago
Our peer-reviewed research has demonstrated that today's average corn-based ethanol
significantly reduces greenhouse gas emissions compared to petroleum- based gasoline, even
when potential indirect land use change emissions are considered. It is our belief that the
renewable fuel standard has played an important role in creating a stable market environment
that encourages development of and investment in new biorefinery and agricultural technologies.
Our work has shown that the biofuels industry has a uniquely high rate of innovation and
technology adoption, which has resulted in steady reductions in greenhouse gas impacts.
Specifically, our research shows energy use and related greenhouse gas emissions by
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biorefmeries have been trending downward over the past decade. Secondly, emerging
agricultural practices and technologies have been shown to further reduce land demands and
emissions from biofuels production. Thirdly, recent analyses demonstrate potential indirect land
use change emissions are substantially lower for ethanol than initially estimated by the U.S. EPA
and others. These reductions in predicted emissions are primarily due to improved indirect land
use change modeling for a number of factors. The Argonne GREET lifecycle emissions model
estimates that corn ethanol greenhouse gas emissions are on average 34 percent lower than
gasoline. In light of the greenhouse gas reduction potential that can be achieved from using
ethanol, we are concerned about the proposed renewable volume obligations released by EPA.
EPA's adjustment from the original RVO will likely leave conventional biofuels short by 1.6
billion gallons in 2015. This shortage represents increased greenhouse gas emissions of
approximately 4.5 million tons of carbon dioxide equivalents for that year. According to the EPA
equivalency calculator, this is comparable to the annual greenhouse gas emissions of just under 1
million passenger vehicles. In closing, we believe that the renewable fuel standard results in
substantial greenhouse gas savings by stimulating innovation at the feedstock production and
biorefmery level. However, the proposed standards fail to fully realize these greenhouse gas
savings.
Environmental Working Group (EWG)
A recent paper published by researchers Tyler Lark and colleagues at the University of
Wisconsin, Madison, found that between 2008 and 2012, 7 million acres of previously
uncultivated land—an area the size of Maryland—was plowed up largely in response to biofuels
mandates. The primary crops grown on converted grasslands were corn and soy, which are used
for biofuels production.1
A critical component of the RFS was the provision that biofuels production could not be
responsible for the conversion of uncultivated grasslands and wetlands. In order for feedstock's
to qualify as "renewable," they could not be grown on recently converted and previously
uncultivated land. To safeguard against land conversion the EPA established the "aggregate
compliance approach," which set maximum national crop acreage thresholds. If this threshold
were passed, the EPA would require biofuels facilities to check that feedstock's were produced
on eligible cropland. A major flaw in this approach is that aggregate compliance glosses over the
trend of land coming out of production in some places, while millions of acres of land are being
plowed up in North and South Dakota, as well as other mid-western states.
According to the paper by Lark and colleagues, up to 1.9 million acres of new corn plantings and
1.5 million acres of new soy could be ineligible as renewable biomass. This land conversion not
only has disastrous impacts on the wildlife that depend on these habitats, it also results in large
amounts of GHG emissions. New plantings for corn and soy were responsible for 94 to 186
million metric tons of carbon emissions, yet these emissions were not accounted for in the EPA's
estimates of the carbon intensity of corn ethanol. Even given this error in emissions accounting,
assuming no domestic land use change emissions, the EPA estimated that corn ethanol would be
a net emitter of carbon - when compared to gasoline - until 2036, and wouldn't reduce emissions
by 20 percent until 2050, 43 years after the enactment of the Energy Independence and Security
Act of 2007 (EISA).3
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We encourage EPA to use its authority to waive the conventional RVO to prevent further
expansion of croplands at the expense of grasslands and wetlands.
1 Lark, et al. 2015 Cropland expansion outpaces agricultural and biofuel policies in the United States. Environmental
Research Letters 10 044003
2 Environmental Protection Agency 2010. Federal Register Vol. 75, No. 236
3 EPA (U.S. Environmental Protection Agency) 2010c Renewable Fuel Standard Program (RFS2) Regulatory
Impact Analysis. Page 483 http://www.epa.gov/ otaq/renewablefuels/420r!0006.pdf
Growth Energy
Using less ethanol in fuel, as EPA proposes, will lead to more greenhouse gas emissions.
(C)orn growers have greatly improved the efficiency, minimized the local environmental impact
of their operations, and adopted new technologies at ethanol facilities at a faster rate than
anticipated by EPA.
Highwater Ethanol, LLC
We have identified a few items below which requires immediate attention on the proposed rule
from the U.S EPA in regards to the renewable fuels standards.
1. Increased use of renewable fuels means less use of fossil fuels, which results in lower
GHG emissions over time as advanced biofuel production and use becomes more
commonplace."
Illinois Farm Bureau
Finally, Illinois Farm Bureau feels obligated to point out that EPA's disappointing lack of
enthusiasm for biofuels is wildly inconsistent for an agency and administration that has been
willing to pull out all of the stops to pursue a vigorous climate change agenda. It's seems
incomprehensible that an agency and administration so single minded fails to recognize and take
full advantage of the scientifically proven GHG reduction contributions of corn-based ethanol,
biodiesel and next generation renewable fuels. If addressing climate change is EPA's goal,
please recognize that a robust American renewable fuels industry must be part of the solution.
Iowa Corn Growers Association (ICGA)
Increased Green House Gas emissions. Under EPA's proposal, low-carbon biofuels would be
supplanted with gasoline refined from tar sands, fracking, offshore drilling, or imported oil. Corn
ethanol provides up to a 50 percent reduction in greenhouse gas emissions, compared to gasoline.
Global ethanol production and use is estimated to reduce greenhouse gas emissions by 100
million metric tons annually, the equivalent of taking more than 20 million vehicles off the road.
This Administration has made cleaner air a priority, yet the proposed rule seems to walk back on
that commitment.
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Illinois Corn Growers Association (ICGA) and Illinois Renewable Fuels Association
(IRFA)
Update the greenhouse gas emissions reductions realized with corn starch ethanol based on the
recent body of science and new publications
USEPA has assumed that corn starch ethanol would be 20% better than baseline gasoline by
2022 with the addition of specified technologies incorporated in the new plants and expansions
constructed after 2007. Plants on-line or under construction when the Energy Independence and
Security Act was passed was grandfathered in according to the law. Since corn starch ethanol
could only contribute up to 15 billion gallons of the 36 billion gallons established for the RFS II,
USEPA did not move to update the Life Cycle Analysis numbers for corn starch ethanol.
The corn starch ethanol industry has changed tremendously with new investments in efficiencies,
new processes, and new co-products. The studies have also proven that the indirect land use
penalties have dropped significantly. When the numbers related to the new carbon footprint for
producing corn are updated the overall greenhouse gas emissions for corn starch ethanol are 40
to 50% less than 2005 base gasoline. The CO2 savings are even greater when compared to the
current crude oil mix refined by the U.S. refineries due to the increased production of crude oil
from the tar sands. Not updating the data and models used to determine the real carbon footprint
for corn starch ethanol, makes it easier for USEPA to roll back the volume numbers for
conventional biofuels. The EISA was passed to reduce the use of petroleum in the transportation
sector and to reduce greenhouse gas emissions. Based on the real numbers for the reduced
greenhouse gas emissions for corn starch ethanol means that we will lose many tons of
greenhouse gas emissions reductions if the ethanol volumes are reduced. The costs of keeping
the RFS II volumes in place through 2014 to encourage the oil companies to move beyond the
blend wall will then be weighed against the lost in significant CO2 reductions.
Kansas Soybean Association
As you know, biodiesel is a domestic, renewable fuel source and the most prevalent and
commercially available advanced biofuel. The EPA itself has determined that biodiesel reduces
lifecycle greenhouse gas emissions by 57 percent to 86 percent compared to petroleum diesel.
Mass Comment Campaign sponsored by anonymous 1 (web) - (23)
That directly contradicts the EPAs other efforts to reduce greenhouse gas emissions. This
proposal would increase greenhouse gas emissions by almost 10 million metric tons, the same
effect as putting 2.1 million more cars on the road.
Mass Comment Campaign sponsored by anonymous 24 (postcard) - (207)
This will harm the air we breathe. Ethanol reduces greenhouse gas emissions up to 50%
compared to gasoline. It is a sustainable octane source that is much better for the environment
than petroleum.
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Mass Comment Campaign sponsored by anonymous 3 (web) - (893)
Furthermore, numerous peer-reviewed papers have shown that ethanol is actually worse than
pure gasoline when it comes to the emissions blamed for global warming. As the EPA works
toward limiting greenhouse gases from power plants, it appears to be condoning more of them
out of tailpipes.
Mass Comment Campaign sponsored by anonymous 33 (paper) - (164)
With these cuts, our nation will not see the dramatic decrease in greenhouse gas (GHG) emissions
assumed under the RFS. With full implementation, the RFS would reduce GHG emissions by 138
million metric tons, which is the equivalent of taking 27 million cars off the road.
Mass Comment Campaign sponsored by Care2 (email) - (9720)
Furthermore, numerous peer-reviewed papers have shown that ethanol is actually worse than
pure gasoline when it comes to the emissions blamed for global warming. As the EPA works
toward limiting greenhouse gases from power plants, it appears to be condoning more of them
out of tailpipes.
Mass Comment Campaign sponsored by Corn, LP (web) - (37)
The RFS is working for the environment. Simply put, ethanol burns cleaner and lowers carbon
pollution compared to gasoline. In 2014, the use of ethanol slashed greenhouse gas emissions by
40 million metric tons, which is the equivalent of removing 8.4 million vehicles from the road. If
left intact, the RFS can do even more to displace oil and reduce greenhouse gas emissions by
bringing increasingly low carbon alternatives to market, such as cellulosic ethanol and other
advanced biofuels. It's also important to note that as renewable fuels continue to get cleaner and
more energy efficient, oil production continues to get dirtier and more energy intensive.
Mass Comment Campaign sponsored by employees of Western Dubuque Biodiesel (web) -
(1)
The RFS is working for the environment. As the only EPA-designated Advanced Biofuel with
commercial-scale production nationwide, biodiesel reduces lifecycle greenhouse gas emissions
by 57 percent to 86 percent compared to petroleum diesel. With some 4.6 billion gallons used
since 2005, biodiesel has reduced lifecycle greenhouse gas emissions by 74 billion pounds—the
same impact as removing 5.4 million passenger vehicles from America's roadways. If left intact,
the RFS can do even more to displace oil and reduce greenhouse gas emissions by bringing
additional low carbon alternatives to market, such as cellulosic ethanol and other advanced
biofuels. It's also important to note that as renewable fuels continue to get cleaner and more
energy efficient, oil production continues to get dirtier and more energy intensive.
Mass Comment Campaign sponsored by Indiana Corn Growers Association and Indiana
Soybean Alliance (email) - (304)
The EPA should not forget its mission to protect human health and the environment. I support
that mission and am proud to say that corn ethanol advances this mission. Corn ethanol provides
up to a 50 percent reduction in greenhouse gas emissions, compared to gasoline. Global ethanol
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production and use is estimated to reduce greenhouse gas emissions by 100 million metric tons
annually, the equivalent of taking more than 20 million vehicles off the road. Ethanol is a
sustainable octane source that is much better for the environment than paniculate-generating
petroleum alternatives.
Mass Comment Campaign sponsored by Little Sioux Corn Processors (web) - (44)
The RFS is working for the environment. Simply put, ethanol burns cleaner and lowers carbon
pollution compared to gasoline. In 2014, the use of ethanol slashed greenhouse gas emissions by
40 million metric tons, which is the equivalent of removing 8.4 million vehicles from the road. If
left intact, the RFS can do even more to displace oil and reduce greenhouse gas emissions by
bringing increasingly low carbon alternatives to market, such as cellulosic ethanol and other
advanced biofuels. It's also important to note that as renewable fuels continue to get cleaner and
more energy efficient, oil production continues to get dirtier and more energy intensive.
Mass Comment Campaign sponsored by National Corn Growers Association (NCGA) -
(24,661)
Ethanol is a cleaner burning domestic fuel source that reduces greenhouse gas emissions.
In addition, corn ethanol provides up to a 50% reduction in greenhouse gas emissions, compared
to gasoline. Global ethanol production and use is estimated to reduce greenhouse gas emissions
by 100 million metric tons annually, the equivalent of taking more than 20 million vehicles off
the road. Ethanol is a sustainable octane source that is much better for the environment that
particulate-generating petroleum. If the mission of the EPA is to make the environment cleaner,
then the RFS surpasses that goal.
Also, we can't forget the environmental benefits of ethanol, which provides up to a 50 percent
reduction in greenhouse gas emissions, compared to gasoline. Ethanol is a sustainable octane
source that is much better for the environment than particulate-generating petroleum alternatives.
Mass Comment Campaign sponsored by Quad County Corn (web) - (37)
The RFS is working for the environment. Simply put, ethanol bums cleaner and lowers carbon
pollution compared to gasoline. In 2014, the use of ethanol slashed greenhouse gas emissions by
40 million metric tons, which is the equivalent of removing 8.4 million vehicles from the road. If
left intact, the RFS can do even more to displace oil and reduce greenhouse gas emissions by
bringing increasingly low carbon alternatives to market, such as cellulosic ethanol and other
advanced biofuels. It's also important to note that as renewable fuels continue to get cleaner and
more energy efficient, oil production continues to get dirtier and more energy intensive.
Mass Comment Campaign submitted by employees of Siouxland Energy Cooperative (web)
-(30)
The RFS is working for the environment. Simply put, ethanol burns cleaner and lowers carbon
pollution compared to gasoline. In 2014, the use of ethanol slashed greenhouse gas emissions by
40 million metric tons, which is the equivalent of removing 8.4 million vehicles from the road. If
left intact, the RFS can do even more to displace oil and reduce greenhouse gas emissions by
bringing increasingly low carbon alternatives to market, such as cellulosic ethanol and other
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advanced biofuels. It's also important to note that as renewable fuels continue to get cleaner and
more energy efficient, oil production continues to get dirtier and more energy intensive.
Minnesota Bio-Fuels Association (MBA)
According to Dr. Michael Wang (lead researcher), 'Well-to-wheels energy use and greenhouse
gas emissions of ethanol from corn, sugarcane and cellulosic biomass for US use' (December
2012), the lifecycle GHG emissions (including the full range of energy inputs for crops, refining
and combustion of fuel in a vehicle) for conventional renewable biofuel is on average 44%, and
up to 57%, less compared to petroleum gasoline.
Missouri Coalition for the Environment
• Between 2008 and 2011, 23 million acres of grassland, shrub land and wetlands were
converted to commodity crop production in large part a response to higher demand for
corn. These acres once served as carbon sinks. Now they release stored carbon and
eliminate that function. University of California-Berkeley scientists note that such
ethanol-related land conversion results in higher greenhouse gas emissions than fossil
fuels.
Monsanto
The RFS directly advances the mission of the EPA, as renewable fuels provide a significant
reduction in greenhouse gas emissions, when compared to conventional petroleum-based fuels.
According to studies by the Global Renewable Fuels Alliance, it has been estimated that global
ethanol production and use is reducing greenhouse gas emissions by 100 million metric tons
annually, the equivalent of taking more than 20 million vehicles off the road.
The RFS is successfully driving the adoption of renewable fuel alternatives, supporting jobs
across the country, and ensuring the U.S. remains a global leader in developing new renewable
energy sources while decreasing greenhouse gas emissions.
National Association of Charterboat Operators
Studies done over the past 10 years show that growing and burning ethanol fuel produces higher
amounts of CO2 pollution than the use of the fossil fuel it replaces.
National Farmers Union (NFU)
A. Climate Resiliency
The fact that climate change poses threats to the American economy, as well as the physical
safety of the American people and global population, is well-documented and overwhelmingly
agreed to by the scientific community.2 In addition to these alarming concerns, NFU must
highlight the hazards climate change carries for American agriculture and the specific problems a
changing climate will create for family agriculture.
The U.S. offers the most secure food system in the world' and is a substantial contributor to the
global food supply. This achievement begins with farmers and will be jeopardized when farmers'
ability to produce is disrupted. Such disruption is anticipated due to climate change. Climate
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Change and Agriculture in the United States: Effects and Adaptation, a report by the United
States Department of Agriculture (USD A), isolated a number of challenges climate change
presents to farmers. These challenges include: lowered productivity due to increases in
temperature and precipitation variability; increased temperature stress on livestock; changing
pest, weed, and disease pressures; disturbances in pollinator services and soil maintenance; and
more frequent extreme weather events.4 It will take time and effort for American agriculture to
adapt to these changes, and in the meantime the overall amount of production and food prices are
likely to fluctuate. Some production losses may become long-lasting or permanent. The security
of a sustainable food supply, one that puts adequate and adequately-nutritious food within reach
of all people regardless of race, color, national origin, or income, is threatened by climate
change.
Even with as much uncertainty as surrounds the economic impact of climate change on
agriculture, it is clear that the risk to those who rely on farmers for food is unprecedented in
modern times. The USDA report stated 'ultimately climate change effects will depend on how
production and consumption systems adjust, or adapt, in response to those biophysical effects,'
but also noted that 'even in the short-term, climate change will likely increase the incidence of
global hunger through effects on the world's poorest and most at-risk populations.'5
EPA should pursue GHG emission reductions at every opportunity to try to mitigate climate
change as much as possible. The RFS offers tremendous capacity to reduce GHGs by
encouraging the use of transportation fuels that emit fewer GHGs than petroleum-based
transportation fuels. EPA asserts that the EISA volume standards will cut GHG emissions by 138
million metric tons by 2022.6 To achieve these emissions reductions, EPA should implement the
biofuel volume standards Congress agreed to in the Energy Independence and Security Act
(EISA). The volume standards in the proposed rule must be adjusted because they forego GHG
emission reductions in the immediate term and impede future growth by holding investment at
bay and validating the unwarranted use of waiver authority.
In addition to the direct climate advantages the volume standards in the EISA would create, the
volume standards are important to maintain because farmers and rural communities are
enormously important to building climate resiliency. The RFS is an important tool for initiating
other essential conversations around climate and agriculture with producers. Farmers will need to
consider information on how climate change will impact their operations in order to make
decisions that will maintain the security of our food supply. Farmers may also be able to make
production decisions that mitigate climate change by reducing or sequestering greenhouse
gasses, or that alleviate some of the symptoms of climate change, such as soil enhancement
efforts that help with irregular rainfall. If policymakers hope such actions might be adopted by
enough farmers to create a positive impact, it would be very helpful to establish trust with
farmers and rural communities around climate change by maintaining the EISA's proposed
volume standards. That policy stability would allow farmers to participate in climate resiliency in
a way that directly adds value to their operations and communities, securing their receptiveness
to future conversations around climate.
Given the RFS' importance in building climate resiliency and rebuilding rural economies
discussed above, it is of critical importance that the volume standards EPA issues match those
Congress agreed to in the EISA. This is true of the advanced biofuel volume requirement as well
as the total renewable fuel volume standard. Advanced biofuels are especially important to the
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climate resiliency goals of the RFS because they hold enormous potential for lowering GHG
emissions from the transportation sector. While conventional biofuels certainly carry a GHG
emissions advantage over transportation fuels derived from fossil sources, and while that
advantage continues to grow as new efficiencies in conventional biofuel production are realized,
advanced biofuels offer even more GHG emission reductions.
From Illinois Farmers Union:
The University of Illinois Extension has offered some insight as to how Illinois in particular may
be impacted by climate change, noting Tor Illinois, the prediction is that our summer climate
will gradually become similar to the current climate of southeast Texas- hotter, wetter in spring
and fall, and drier in the summer. This has enormous implications for our crop and animal food-
production systems ... Crops such as corn and soybeans, which require planting in spring, harvest
in fall, and pollination can be especially sensitive to changes in precipitation and temperature.'4
From Northwest Farmers Union:
Climate change presents significant challenges specifically to many important industries in the
Northwest, including agriculture. EPA notes that 'Higher temperatures, changing stream flows,
and increases in pests and disease threaten forests, agriculture, and salmon populations in the
Northwest.'4 The Agency further asserts that 'Decreasing supplies of water for irrigation,
increasing incidence of pests and disease attacks, and growing competition from weeds threaten
Northwest agriculture, particularly the production of tree fruits such as apples.'5 These hazards to
the economy of the Northwest and the well-being of the region's residents compel NWFU to ask
EPA to make full use of the opportunity to mitigate climate change and enhance climate
resiliency that the RFS presents.
From Michigan Farmers Union:
Michigan farmers face a number of challenges that will increase in severity as the changes in
climate become more dramatic. A presentation posted to Michigan State University Extension's
website by Dr. David P. Lusch, Distinguished Senior Research Specialist MSU's Department of
Geography, Institute of Water Research, notes that while increased temperatures may add time to
the growing season, the resulting potential yield increases may be mitigated by 'predicted
changes in the distribution of rain- wetter periods are expected during times that could delay
planting or harvest and mid-growing season droughts are more likely.'4 This may result in more
need for irrigations, 'causing additional pressures on surface water and groundwater resources.'5
Lusch also warns that increases in severe storms could depress yields and encourage soil erosion
and non-point source pollution, and that higher summer temperatures could lower livestock
productivity.
From New England Farmers Union:
New England farmers face a number of challenges that will increase in severity as the changes in
climate become more dramatic. The introductory letter to USDA's Northeast Regional Climate
Hub Assessment of Climate Change Vulnerability and Adaptation and Mitigation Strategies, a
report detailing the climate impacts anticipated in an area wholly including NEFU's territory,
"the northeastern region of the United States faces an array of climate-related challenges,
including heavier rainfall and greater rainfall totals.. .Crops and forests in the Northeast are also
under increasing pressure from weeds, insects, and diseases, and these pest pressures are
compounded by the additional stress of variable weather and a changing climate."4
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From Ohio Farmers Union:
Producers in Ohio face challenges that will become increasingly dramatic as climate change and
its impacts grow more severe. Ohio farmers are likely to experience changes in rainfall that lead
to flooding and drought, as well as more intense and frequent extreme weather events with
adverse consequences for crops. Agriculture is the top industry in Ohio; these negative impacts
place the state's entire economy in jeopardy.2
2. USDA Blog, 'Secretary Vilsack Announces Partnerships with Farmers and Ranchers to Address Climate
Change,' April 23, 2015. Secretary Vilsack Announces Partnerships with Farmers and Ranchers to Address
Climate Change - See more at:http:^logs.usda.gov/2015/04/23/secretarv-vilsack-announces-partnerships-
with-farmers-and-ranchers-to-address-climate-changentsthash.cgKaou03.dpuf3. The Global Food Security
Index,' The Economist Group, http://foodsecurityindex.eiu.com/Country/Details#United%20States.
4. Walthall, C.L., J. Hatfield, P. Backlund, L. Lengnick, E. Marshall, M. Walsh, S. Adkins, M. Aillery, E.A.
Ainsworth, C. Ammann, C.J. Anderson, I. Bartomeus, L.H. Baumgard, F. Booker, B. Bradley, D.M.
Blumenthal, J. Bunce, K. Burkey, S.M. Dabney, J.A. Delgado, J. Dukes, A. Funk, K. Garrett, M. Glenn,
D.A. Grantz, D. Goodrich, S. Hu, R.C. Izaurralde, R.A.C. Jones, S-H. Kim, A.D.B. Leaky, K. Lewers, T.L.
Mader, A. McClung, J. Morgan, D.J. Muth, M. Nearing, D.M. Oosterhuis, D. Ort, C. Parmesan, W.T.
Pettigrew, W. Polley, R. Rader, C. Rice, M. Rivington, E. Rosskopf, W.A. Salas, L.E. Sollenberger, R.
Srygley, C. Stockle, E.S. Takle, D. Timlin, J.W. White, R. Winfree, L. Wright-Morton, L.H. Ziska. 2012.
Climate Change and Agriculture in the United States: Effects and Adaptation. USDA Technical Bulletin
1935. Washington, DC. 186 pages. At 1.
http://www.usda.gov/oce/climate change/effects 2012/CC%20and%20Agriculture%20Report%20%2802-
04-2013%29b.pdf
5 Id at 118.
6 http://www.epa.gov/climatechange/EPAactivities/regulatory-initiatives.html
Illinois:4 https:/ /web.extension, illinois.edu/illinoissteward/openarticle.cfm? Article I D=SSO
Northwest'4 EPA, 'Climate Impacts in the Northwest,'
http://www.epa.gov/climatechange/impactsadaptation/northwest.html#impactsagriculture.
Michigan 4 http:/ /msue.anr. msu.edu/uploads/234/62936/Climate_ Change_ Water _I mplications_for
_Michigan.pdf
5 id
New England: 4 Tobin, Daniel; Janowiak, Maria; Hollinger, David Y.; Skinner, R. Howard; Swanston,
Christopher; Steele, Rachel; Radhakrishna, Rama; Chatchyan, Allison. At 5.
http://climatehubs.oce.usda.gov/sites/default/files/Northeast%20Regional%20Hub%20Vulnerab
ility%20Assessment%20Final.pdf
Ohio: 2.http://changingclimate.osu.edu/features/climate-and-ohio-farms/
Michigan Corn Growers Association
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 35-36.]
In addition to the local economic benefits our State enjoys from ethanol production, corn
growers have a sense of pride in creating a product that competes with the oil industry. First,
because ethanol is a cleaner-burning product, a study last year by Michigan State University
researchers showed that the use of ethanol in Michigan reduces dangerous greenhouse gas
emissions entering our atmosphere by 1.4 million metric tons annually. That is one of the goals
of the RFS2. And using EPA's estimates, this greenhouse gas reduction is equivalent to the
emissions of about 300,000 cars in our State, and that's every year. As a result, researchers have
shown ethanol is creating a healthier environment for our families while protecting our air, land,
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and the Great Lakes. Reducing the volumes of ethanol called for in the RFS will reverse the
advancements made in this greenhouse gas reductions.
National Renderers Association (NRA)
The process of rendering animal byproducts sequesters about four times as much CO2e as it
emits, creating a significant net carbon credit. CO2, methane and other GHG emissions from
natural decomposition in a compost pile or landfill are avoided
Rendered animal fats and used cooking oil/grease are rich (76 percent carbon on average) in
recycled carbon which, when used as feedstocks for biomass based diesel, can contribute
significantly to biomass-based diesel's reduced CO2 emission level compared to that of
petroleum diesel.
New Leaf Biofuel, LLC
There is no doubt in my mind that if the 2016/17 RVO is finalized as written, it will lead to more
closures and scale backs by biodiesel plants that utilize waste feedstocks. The overall GHG of
the biodiesel will increase as imported higher GHG fuels squeeze us out, and worse, biodiesel
blenders will scale back blending due to poor economics, resulting in a return to fossil fuels.
North Dakota Corn Growers Association (NDCGA), et al.,
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 179.]
Thirdly, ethanol production has reduced our carbon footprint as we meet the demands of a
growing world population and is environmentally friendly in air quality improvements. The EPA
recognizes that corn ethanol provides a 21 to 52 percent greenhouse gas reduction compared to
ordinary gasoline.
Global ethanol production and use is estimated to reduce greenhouse gas emissions by 100
million metric tons in 2012, according to energy experts, the equivalent of taking 20.2 million
vehicles off the road.
Northern Canola Growers Association
Well beyond the canola and agricultural sector, biodiesel provides numerous benefits for
consumers and society as a whole, including:
-significant reductions in greenhouse gas emissions resulting in improved air quality
The EPA itself has determined that biodiesel reduces lifecycle greenhouse gas emissions by 57
percent to 86 percent compared to petroleum diesel. Substituting higher amounts of biodiesel for
traditional diesel fuel is a simple, effective way to immediately reduce diesel emissions. Since
biodiesel provides a greenhouse gas benefit compared to the petroleum-based diesel it is
replacing, increasing its use will contribute to reduced climate change impacts.
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Novozymes Americas
The window of opportunity to reduce emissions and avoid significant climate change
impacts is becoming shorter and the time for bold action is now. Novozymes has an
ambitious goal to reduce 100 million tons of annual greenhouse gas emissions annually
through the use of our products. Our technology and investments are critical weapons in
the fight against climate change....Federal officials have also made clear that they want to
reduce greenhouse gas emissions. In May of this year, the United States said it would
reduce emissions 26 to 28 percent over 2005 levels by 2025. This month, 13 major U.S.
corporations announced $140 billion in investments to decrease their carbon footprints as
part of a White House initiative on climate action. If the EPA finalizes the existing
proposal, however, it would have exactly the opposite effect by substantially increasing
emissions. The existing proposal would abandon the people and the companies that have
built technologies capable of reducing emissions right now.
Lowering RVO targets directly contradicts the EPA's efforts to reduce greenhouse gas
emissions. While the Obama Administration is limiting emissions from the airline and power
plant sectors, it is proposing to increase them in the road transportation sector....In March 2015,
leading up to the Paris climate talks in December; the United States said it would reduce
emissions 26 to 28 percent over 2005 levels by 2025.
"The U.S. is strongly committed to reducing greenhouse gas pollution, thereby contributing to
the objective of the Convention," said the announcement. "The target is fair and ambitious. The
United States has already taken substantial policy action to reduce emissions, taking the
necessary steps to place us on a path to achieve the 2020 target of reducing emissions in the
range of 17 percent below the 2005 level in 2020. Additional action to achieve the 2025 target
represents a substantial acceleration of the current pace of greenhouse gas emission reductions."
However, the Renewable Fuel Standard is the only federal law in the United States with lifecycle
greenhouse gas reduction requirements and the Obama Administration's EPA has - since 2013 -
attempted to waive the climate reduction standards for the obligated parties.
"The Environmental Protection Agency (EPA) in November 2013 issued a proposed rule for the
Renewable Fuel Standard that will for the first time decrease use of biofuels in the United
States," BIO said in an announcement. "A recent study from BIO demonstrates that this proposal
would increase carbon emissions for 2014 and significantly reverse the progress the United
States has made in reducing carbon emissions from the transportation sector that is noted in the
National Climate Assessment." "The White House National Climate Assessment says plainly
that the transportation sector accounts for more than a quarter of U.S. greenhouse gas emissions,
and hails the fact that between 2008 and 2012 those emissions were reduced," said Brent
Erickson, executive vice president of BIO's Industrial & Environmental Section. "Yet, the White
House recently proposed to reverse course on the only greenhouse gas reduction policy on the
books today for transportation." Senators Barbara Boxer and Edward Markey raised similar
concerns in a letter to President Obama regarding the 2014 proposal:
"We must use every tool at our disposal to address climate change. We are writing today to raise
concerns about the 2014 Renewable Volume Obligations (RVOs) under the Renewable Fuel
Standard (RFS) proposed by the Environmental Protection Agency (EPA)," the letter read. "If
adopted, this rule would increase, not decrease, carbon pollution." The RFS is a critical piece of
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our nation's climate mitigation policies. It is helping to break the oil sector's monopoly over our
nation's liquid fuel supply by opening the market to competition from America's growing
renewable fuel industry, bringing low carbon cellulosic, advanced biofuels and biomass-based
diesel to market.
Rider, Allen
Researchers at our DOE national laboratories have found that mid-level ethanol fuel blends
between 25 and 40 percent not only enable higher-octane fuels but offer real gains of 5 to 10
percent in vehicle efficiency and significant reductions in greenhouse gas emissions. In fact,
lifecycle analysis models show that conventional biofuels now reduce emissions by up to 48
percent, as compared to fossil fuels, while cellulosic biofuels achieve even better reductions.
Even with taking land use change into account, new data shows that total emissions from the
biofuels are much lower than that of petroleum fuels. Going forward, efficiencies in feedstock
production, improvements in biomass conversion processes, and improved engine technologies
will further enhance the carbon lifecycle for biofuels while the search for harder to reach crude
supplies will adversely impact the carbon lifecycle for petroleum.
South Dakota Corn Growers Association
The increased use of ethanol has also drastically reduced carbon emissions because our carbon
score keeps improving. Farmers are growing higher-yields with fewer inputs and less tillage,
reducing our impact on the environment and sequestering carbon in our soils. I'm proud to say
we've always strived to be good stewards on our farm, using a form of no-till for over 30 years
and adopting precision technologies to place specific amounts of fertilizer and seed where and
when it is most efficient.
After the RFS was enacted in 2007, EPA and Argonne National Labs life cycle assessments
showed corn ethanol to be equivalent to gasoline in carbon emissions. Since that time, using
updated science, productivity gains and real world data on land use change, Argonne has updated
corn ethanol's life cycle GHGs several times, most recently indicating that corn ethanol is 40%
below gasoline. At the same time, petroleum fuel GHGs are increasing due to an energy
intensive extraction and refining processes. Updates to EPA's modeling recognizing
improvements in farming and at the ethanol plants are imperative to accurately show the
environmental differences between energies.
We have the ability to approach a 60% reduction in carbon emissions in some regions because of
our climate, increased yields, tillage reductions and fertilizer efficiency.
Recently administrator McCarthy was quoted as saying 'climate change is the greatest challenge
of our time' and that the 'time for action is now'. I wholeheartedly agree with her sentiment but
then don't understand why the EPA has 'hit the brakes' on the most successful program we've
seen to reduce carbon emissions in the U.S....Corn farmers and ethanol producers have worked
hard to uphold our role in the RFS and the environment — constantly and consistently
improving....If fighting climate change is a goal of your agency, then how can you subject
automobile drivers to additional volumes of fuels with a higher carbon footprint? Your own
agency research demonstrates that corn ethanol can reduce greenhouse gas emissions by up 52%
when compared to conventional gasoline. A reduction in ethanol would certainly mean an
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increase in the use of benzene and other harmful pollutants found in non—ethanol fuel. This
proposal would be a step backwards in both your climate and clean air efforts.
South Dakota Farmers Union
In addition to the sustainability of the food system, climate change's impact on agriculture may
hazard the sustainability of American communities. Climate change, through its impact on
agriculture, places communities in harm's way because the consequences of climate change are
likely to be greater for family farmers than other agricultural producers. According to a report by
USD A, "Current climate change effects are challenging agricultural management and are likely
to require major adjustments in production practices over the next 30 years."3 The severity of the
necessary adjustments increases the likelihood that they will be expensive. In many cases, the
expense of farming in a changing climate will drive out family farmers with insufficient capital
or access to investors and bar new entrants from starting farm businesses by increasing the initial
investment needed, leaving their land available for farm consolidation. These major adjustments
will also require policy shifts that, if not executed carefully and equitably, may also place family
farmers at risk and encourage farm consolidation.
To the extent that climate change contributes to this (loss of farming jobs) process, it presents a
serious environmental justice issue to family farmers and rural residents. The RFS helps keep
family farmers farming in two distinct and important ways: it contributes to climate change
mitigation, helping family farmers avoid the most costly consequences of climate change, and
offers family farmers direct value for helping build climate resiliency by stabilizing prices for
biofuel feedstocks and opening investment opportunities in biofuel plants. EPA would best
pursue these important goals by adjusting the proposed biofuel volume standards to match the
standards in the EISA.
In South Dakota where agriculture is the primary industry successful farmers and ranchers are
the backbone of the economy. The ethanol industry, has given new market options for agriculture
producers. A single bushel of field corn yields 2.8 gallons of fuel ethanol and 17.5 pounds of
high-protein distillers dried grain for livestock feed.
Ethanol is a renewable and cleaner fuels source. Ethanol and ethanol blended gasoline have
reduced greenhouse gas emissions. Every barrel of American-made ethanol produced directly
displaces 1.2 barrels of crude oil. Ethanol blended fuels at 30% or higher does not contain
Benzene. Benzene is a harmful chemical that is omitted through the tailpipe emissions of a
vehicle. There are no safe levels of Benzene. Ethanol contributes to cleaner air to breathe. The
EPA has repeatedly said they are for clean air and clean water. Your job is to protect the
environment as the Environmental Protection Agency. Ethanol is a product that will aid in
cleaner air and a cleaner environment, but this proposal steps backward. Reducing the RFS will
not provide cleaner air.
Why are you doing this? Americans have a right to breathe clean air.
3 Walthall, C.L., I, et all at 119.
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State of Indiana
You must not forget the important environmental benefits of ethanol, which contributes up to a
50 percent reduction in greenhouse gas emissions, compared to gasoline. Ethanol is a sustainable
octane source that is much better for the environment than particulate-generating petroleum
alternatives.
State of Indiana House of Representatives
I would like to note biofuels are good for non-farmers, too. Please do not forget the important
environmental benefits of ethanol, which contribute up to 50 percent in reduction in greenhouse
gas emissions, compared to gasoline. Ethanol is a sustainable octane source that is much better
for the environment than particulate-generating petroleum alternatives.
The Andersons, Inc.
Under EPA's proposal, low-carbon biofuels would be supplanted with gasoline refined from tar
sands, tight oil from fracking, oil from deep-water drilling, or imported oil. The obvious result
would be an increase in GHG emissions from the transportation sector.
The Funding Farm
Being a pioneer with over 20 years in the ethanol industry, I have seen many drivers and how the
ethanol industry responded to deliver solutions....These are a few of the 'key drivers' in the past
but the big one lies ahead and that is addressing 'Climate Change. We need these Renewable
Volume Obligations to drive innovation.
Climate change is real and being a farmer I see the effects of it each and every day. With that
said, how do we aggressively address this problem? In my opinion one of the best ways is to
convert CO2 to fuels like ethanol. There is a company called Joule that is doing exactly that.
They are just getting started and their potential is unlimited. In order for companies like Joule to
attract investors we need long-term stable policy like those in the original enactment of the 2005
RFS.
Hopefully in my lifetime I can see some reversals in the effect of climate change brought on by
human activities from the over use of fossil fuels and say
'Create a solution to climate change'...Ethanol Responded
The George Washington University
While the stated goals of the RFS are to reduce crude oil imports and increase the use of
renewable fuels, an implicit purpose of the RFS program is to benefit the environment by
moving away from fuels that result in substantial carbon emissions (e.g. gasoline and diesel).
However, while crude oil imports and gasoline demand have decreased, it is less clear whether
the increased production of biofuels has actually reduced emissions or benefitted the
environment.
The literature is mixed on the environmental effects of biofuel production, with many estimates
indicating that the production of ethanol and biodiesel may significantly increase emissions,
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specifically of the greenhouse gases carbon dioxide (CO2) and nitrous oxide (N2O) and criteria
pollutants such as particulate matter.
Relevant Literature
There has been significant development in the relevant literature on the environmental impacts of
renewable fuel production since EPA's analyses were conducted, especially post-2007. Recent
research indicates that the environmental effect of the RFS is extremely modest10 at best and, at
worst, could result in a significant increase in CO2 emissions over gasoline.11 Overall, the post-
2007 literature largely reinforces this worst-case scenario, although estimates differ as to the
extent of the environmental damage posed by biofuel mandates. A number of factors influence
the extent of any potential environmental damage as a result of the RFS.
First, increased biofuel production causes land use changes (LUC) that result in the release of
soil organic carbon. Increased demand for corn and soy provides farmers with an incentive to
produce more crop and convert unused lands into cropland, which releases a significant amount
of soil organic carbon and foregoes future carbon sequestration and storage. This increase in
release of CO2 may, depending on tillage practices and land type, outweigh any potential CO2
savings from combusting ethanol.
For example, in 2008, Searchinger et al. find that that biofuels increase carbon emissions by 93%
compared to gasoline when the effects of LUC are considered.12 Fargione et al. find that
diverting domestic grassland and abandoned cropland in the Midwest to ethanol production
incurs between 69 and 134 megagrams (Mg) of CO2 per hectare"1, requiring a payback period of
between 48 and 93 years to repay the initial carbon debt.13 While LUC in the literature is
primarily described as it relates to corn ethanol, researchers have also found that the carbon
emissions from LUC are 34% greater per megajoule for soybean-based biodiesel.14 This is
particularly troubling as EPA's proposal relies heavily on increases in biodiesel production to
meet total renewable fuel mandates.
In addition, these effects are not limited to the United States: change in worldwide agricultural
markets as a result of biofuel mandates may also lead to international land use change (or
indirect land use change, "ILUC"), which occurs when other countries alter growing habits to
replace crops that were previously imported from the U.S. When taking ILUC into account,
Chakravorty and Hubert find that international emissions may increase by 33%, in comparison to
a modest 1% reduction in domestic emissions.15 Bento et al. find that the RFS "unambiguously"
increases carbon emissions, offsetting more than 70% of the intended emissions savings.16 Other
research finds that, when considering ILUC, the environmental benefit of the RFS is very modest
at best.17'18 [EPA-HQ-OAR-2015-0111-1815-A1 p.8]
EPA considered both potential LUC and ILUC in its 2010 analysis of RFS by weighing factors
such as tilling practices, irrigation, crop yields over time, and supply and demand for agricultural
products.19 However, EPA estimated that production of ethanol results in 34 grams of CO2 per
megajoule, which recent evidence suggests is on the very low-end of plausible values for carbon
emissions.20 Recent research finds that potential carbon emissions could be as great as 800g/MJ,
meaning that EPA may have seriously undervalued the potential environmental costs of
implementing the RFS program.21
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Second, fertilizer input for the production of crops used to produce biofuels results in emissions
of N2O, a greenhouse gas that contributes to climate change. A 2012 analysis found that the
necessary fertilizer input for the increased production of corn and rapeseed leads to N2O
emissions that matched or exceeded the corresponding cooling achieved by the reduction in CO2
emissions resulting from fossil fuel replacement.22
Third, increased international gasoline demand and consumption could displace any domestic
reductions resulting from the RFS, which could offset any domestic environmental benefit. EPA
estimates that the largest benefit of the RFS program is a "monopsony" benefit. That is, because
the U.S. is such a major consumer of international crude oil, reduced crude oil imports as a result
of RFS can reduce the price of crude oil, and any remaining barrels of crude oil imported will be
imported into the U.S. at a lower price. However, this lower price has a rebound effect on
international gasoline demand, offsetting any reductions effected at the domestic level. This
rebound effect could offset more than 60% of the intended emissions savings of the RFS
program.24
10Chen et al. 2014. "Alternative transportation fuel standards: Welfare effects and climate benefits" Journal of
Environmental Economics and Management 67: 241-257
"Searchinger et al. 2008. "Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions from
Land-Use Change." Science. Vol. 319 no. 5867 pp. 1238-1240
12 Searchinger et al. 2008. "Use of U.S. Croplands for Biofuels Increases Greenhouse Gases Through Emissions
from Land-Use Change." Science. Vol. 319 no. 5867 pp. 1238-1240
13 Fargione et al. 2008. "Land Clearing and the Biofuel Carbon Debt." Science 29: 1235-1238
14 Chen, Huang, and Khanna. "Land Use and Greenhouse Gas Implications of Biofuels: Role of Technology and
Policy." Paper prepared for presentation at the Agricultural & Applied Economics Association's 2011 AAEA &
NAREA Joint Annual Meeting, Pittsburgh, Pennsylvania, July 24- 26, 2011.
http://ageconsearch.umn.edu/bitstream/103216/2/CCE for AAEA2011 .pdf
15 Ujjayant Chakravorty and Marie-Helene Hubert. 2012. "Global Impacts of the Biofuel Mandate under a Carbon
Tax." American Journal of Agricultural Economics
16 Bento, Klotz, and Landry. "Are there Carbon Savings from US Biofuel Policies? The Critical Importance of
Accounting for Leakage in Land and Fuel Markets" (2012; forthcoming 2015 in Energy Journal)
17 Oliver and Khanna. 2015. "Implementing the Renewable Fuel Standard with the Renewable Portfolio Standard in
the US: Implications for Policy Costs and Greenhouse Gas Emissions."
18 Chen, Huang, and Khanna. "Land Use and Greenhouse Gas Implications of Biofuels: Role of Technology and
Policy." Paper prepared for presentation at the Agricultural & Applied Economics Association's 2011 AAEA &
NAREA Joint Annual Meeting, Pittsburgh, Pennsylvania, July 24- 26, 2011.
19 Environmental Protection Agency. 2010. "Renewable Fuel Standard Program (RFS2) Regulatory Impact
Analysis." §2.4.4 - §2.4.5.
20 Plevin, O'Hare, Jones, Torn and Gibbs. 2010. "Greenhouse Gas Emissions from Biofuels' Indirect Land Use
Change are Uncertain but May Be Much Greater than Previously Estimated." Environmental Science & Technology
44: 8015-8021
Trenton Agri Products LLC
The White House and EPA say they want a reduction of carbon emissions. These words ring
hollow, or are even hypocritical, with the proposed RVO carbon emissions will actually
increase! [EPA-HQ-OAR-2015-0111-1686-A1 p.2] [EPA-HQ-OAR-2015-0111-1043, p.321]
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U.S. Canola Association (USCA)
Since biodiesel provides a greenhouse gas benefit compared to the petroleum-based diesel it is
replacing, increasing its use will contribute to reduced climate change impacts. [EPA-HQ-OAR-
2015-0111-1819-Alp.2]
Unilever
As a company dedicated to the reduction of greenhouse gasses, we are very concerned that
biofuel production does not actually have a lower greenhouse gas balance compared to fossil
fuelsS. We believe advances in the calculations of indirect land use change have shown that
overall, when indirect land use changes (ILUC) are taken into account, most varieties of
biodiesel often turn out to produce more emissions than fossil fuels. The ILUC emissions for
soybeans are about twice as high as the direct emissions. On this basis we ask EPA to reassess
the advanced biofuel status for soybean oil based biodiesel. [EPA-HQ-OAR-2015-0111-2273-A2
p.2]
We also encourage EPA to include ILUC when calculating the greenhouse gas balance compared
to traditional biofuels. [EPA-HQ-OAR-2015-Oil 1-2273-A2 p.3]
3http://ec.europa.eu/energv/en/topics/renewable-energy/biofuels/land-use-change
Union of Concerned Scientists
Increasing the availability and use of renewable fuels will help reduce greenhouse gas emissions
from the transportation sector and diversify the fuel supply, thus furthering the goals of EISA.
[EPA-HQ-OAR-2015-0111-3523-A1 p. 1]
Union of Concerned Scientists; Natural Resources Defense Council; National Wildlife
Federation
This coalition supports and works to advance low carbon renewable fuel technologies and
development in order to decrease our reliance on fossil fuels and to reduce GHG emissions.
Substantial environmental benefits could be realized by establishing biofuel pathways that
minimize agricultural and land use footprints by capturing and using carbon from waste gases as
bioprocess inputs. We know that the RFS was conceived of in part to promote such low carbon
renewable fuel pathways, and we want to make sure that all of the most promising biofuel
technologies can both contribute to a low-carbon future and qualify for inclusion in the RFS
program. EPA should adopt a flexible and inclusive approach to these highly technical issues
that expands rather than constricts the available pathways to develop low carbon fuel
technologies. [EPA-HQ-OAR-2015-0111-2477-A1 p.1-2]
EPA should address the technical distinctions needed to understand its stance on this important
issue. We encourage EPA to adopt an inclusive and flexible approach that supports as many
pathways to clean low carbon fuels as possible. Combined with the lifecycle assessment
provisions of the RFS, this approach will foster research and innovation and ensure that the
policy maximizes the opportunity to cut fossil oil use and carbon emissions from the
transportation sector. We urge EPA to make the needed clarifications in its final rule to allow all
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of the applicable "algae" biofuel pathways to be included in the RFS program. [EPA-HQ-OAR-
2015-01 ll-2477-Alp.3]
Urban Air Initiative
UAI's comments make the following points:
-Recent developments give reason for hope, including an Argonne National Labs WTW study on
High Octane Fuels (HOFs) that concluded higher ethanol blends (e.g., E25 - E40) were 'major
enablers' of HOFs that could also achieve substantial WTW reductions in GHGs (18 - 32%) with
little or no marginal cost to refiners and consumers.7 [EPA-HQ-OAR-2015-0111-1821-A1 p.3-4]
Another recent development that further validates these comments was the July 14, 2015 release
of the previously mentioned Argonne National Labs study on WTW GHG reductions of high
octane fuels (see footnote 7). Its conclusion states that 'ethanol can be a major enabler in
producing HOF [high octane fuel] and result in additional reductions in WTW GHG emissions
when compared to regular E10 gasoline'. The study identifies the two most critical fuel blending
specifications as RVP and octane. On p. 5, the study notes that refinery reformers, when operated
at high severity to maximize octane levels, produce a smaller volume of product with a higher
octane and a higher RVP. [EPA-HQ-OAR-2015-0111-1821-A1 p.8]
Another recent development that further validates these comments was the July 14, 2015 release
of the previously mentioned Argonne National Labs study on WTW GHG reductions of high
octane fuels (see footnote 7). Its conclusion states that 'ethanol can be a major enabler in
producing HOF [high octane fuel] and result in additional reductions in WTW GHG emissions
when compared to regular E10 gasoline'. The study identifies the two most critical fuel blending
specifications as RVP and octane. On p. 5, the study notes that refinery reformers, when operated
at high severity to maximize octane levels, produce a smaller volume of product with a higher
octane and a higher RVP. [EPA-HQ-OAR-2015-0111-1821-A1 p.8]
Argonne frequently references the 2014 MathPro - auto LP study, which found that using E30 to
produce 100 RON high-octane gasoline results in a 60% reduction in aromatic hydrocarbons.
From a GHG perspective alone this is significant. EPA says that aromatic hydrocarbons are 25%
more carbon intensive than gasoline itself. Consequently, it would seem that the ethanol in E30
should be given credit for a 15% reduction in GHG emissions for its aromatics displacement
alone (automobile exhaust system/three way catalysts do not effectively capture the aromatics'
combustion by-products, see 2014 Robinson - Maricq study on SOA emissions, Appendix A).
[EPA-HQ-OAR-2015-0111-1821-A1 p.8][Appendix A can be found in Docket # EPA-HQ-
OAR-2015-0111-1821-A2]
Thus, EPA can cost-effectively and simultaneously achieve several important goals by reversing
course and enforcing the law as Congress intended: 1) provide automakers with the higher-
octane fuels they have requested; 2) facilitate compliance with the new fuel efficiency and
carbon reduction rules; 3) substantially reduce harmful urban emissions of PM2.5, UFP-borne
and SOA-bound PAHs, BETX, and black carbon; and 4) cost-effectively comply with mandated
renewable fuels consumption targets as set forth in RFS2. To make all of these desirable things
happen, EPA should use its considerable powers under Sec. 202(1) to require 'clean octane' E30
blends, flex fuel cars, and flex fuel pumps and infrastructure, just as it did so successfully in the
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even more difficult transition from leaded to unleaded gasoline 30 years ago. [EPA-HQ-OAR-
2015-0111-1821-Alp.8-9]
7'Well to Wheels Greenhouse Gas Emissions Analysis of High-Octane Fuels with Various Market Shares and
Ethanol Blending Levels', Jeongwoo Han et al, Argonne National Laboratory, ANL/ESD-15-10, July 14, 2015.
Response:
Most of the comments pointed to the GHG (and therefore climate) benefits of replacing
petroleum-based fuel with renewable fuels. This is consistent with the analyses conducted by
EPA in adopting the pathways of eligible renewable fuels as part of the 2010 RFS2 final rule and
subsequently updated either through rulemaking or via the regulation-based petition approval
process. Some of the comments suggested that the GHG and climate benefits would be greater
had EPA required the higher levels of renewable fuels envisioned by Congress when adopting
EISA. However, for reasons explained elsewhere, these production and use volumes are not
feasible at this time and therefore the lower renewable fuel volume requirements are being
adopted. Some comments pointed to increased productivity on the farm and improvements in
biofuel production technology over time; EPA recognized these trends and incorporated them in
its assessment of GHG benefits of particular renewable fuels. Others suggested that changes in
petroleum sources, particularly the heavy crudes such as oil or tar sands from Canada, make the
use of renewable fuels even more beneficial than in the past. EPA has not assessed the impacts
of changing petroleum feedstock of transportation GHG emissions but notes that under the Clean
Air Act as amended by EISA, renewable fuel performance is mandated to compare to the
petroleum mix used in the U.S. in 2005.
Others took a different view of the benefits of renewable fuels compared to petroleum,
commenting that renewable fuels (corn ethanol most often mentioned specifically) resulted in
higher GHG emissions compared to petroleum, therefore worsening transportation GHG
emissions and impacts on climate change. EPA has evaluated the GHG impacts of renewable
fuels, including both the direct and indirect impacts on land use change, and determined for the
approved pathways, the use of renewable fuels, especially those qualifying as advanced biofuel,
provide GHG benefits.
While EPA is setting specific volume requirements for biomass-based diesel, advanced biofuel,
cellulosic biofuel, and total renewable fuel, EPA did not use the GHG impact of any specific
pathway in assessing the volumes of renewable fuel that are expected to be available in
exercising our general waiver authority. It is important to point out that EPA did not propose to
change the lifecycle GHG assessments of individual renewable fuel pathways and therefore such
changes are considered outside the scope of the rulemaking.
Similarly, some commenters encouraged EPA to expand the eligibility of renewable fuel
pathways to encourage their use and further the GHG benefits of the RFS program. The Union
of Concerned Scientists in particular encouraged the EPA to expand the types of fuel that would
be eligible under the approved pathway for algae. EPA continues to evaluate new pathways and
expand on the number of eligible pathways but did not propose to do so under this rulemaking;
such action is considered to be out of scope of this rule. Regarding the specific issue of eligible
pathways for algae-bases fuels, EPA only proposed to clarify the specific pathway considered
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when adopting the algae pathway; we are finalizing the clarification as part of this rule. Some
comments suggest updating our current assessments of GHG performance for specific fuel
pathways in particular for corn ethanol; such updates were not proposed as part of this
rulemaking and are thus considered beyond the scope of this rule.
One commenter highlighted some recent technical information associated with the octane
benefits of higher-level ethanol blends and their potential to reduce both GHG emissions and the
level of aromatics in gasoline. On this basis they then called upon EPA to "require 'clean octane'
E30 blends, flex fuel cars, and flex fuel pumps and infrastructure" in order to maintain the
statutory volumes and provide various other benefits. Consideration of such a requirement is
outside the scope of this rulemaking.
Comments regarding the air quality impacts of using biofuels are considered in section 8.3.
Comments relating to the economic impacts of producing and using biofuels are considered in
section 7. Comments regarding change in land use in particular those from the Environmental
Working Group and aggregate cropland approach are also addressed in section 8.5 of this
document.
8.3 Air Quality
Comment:
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
Biodiesel is known to increase tailpipe NOx emissions, an ozone precursor, from diesel
engines.128 Consequently, EPA's proposal to increase the biomass-based diesel standard by over
48% from 1.28 billion gallons in 2013 to 1.9 billion gallons in 2017 will make efforts to meet
ozone NAAQS standards more difficult for state and local air quality planners. If ozone
standards are further tightened in the future, the air quality impact of biodiesel relative to other
sources could become even more significant. [EPA-HQ-OAR-2015-0111-1948-A1 p.56]
128 See, for example:
• US Environmental Protection Agency, A Comprehensive Analysis of Biodiesel Impacts on Exhaust
Emissions, EPA420-P-02-001, October 2002
• Coordinating Research Council, Investigation of Biodiesel Chemistry, Carbon Footprint and Regional Fuel
Quality, CRC Report No. AVFL-17a, January 2011
• California Air Resources Board, NOx Emission Impacts of Biodiesel Blends,
http://www.arb.ca.gov/fuels/diesel/altdiesel/meetings/20141024LyonsStatistics.pdf
Association of Nebraska Ethanol Producers (ANEEP)
In the comments below, ANEEP addresses primarily the last point regarding improved air
quality as this benefit is the one most often overlooked in the national debate on biofuels.
Cleaner and more environmental friendly biofuels would be a very effective means for USEPA
to provide clean air to the American public. Emissions associated with transportation fuels
impact the majority of Americans, especially those living in larger urban areas. The current
transportation fuel mix produces emissions of aromatic hydrocarbons including benzene, toluene,
ethyl benzene and xylene (BTEX), which are regulated by the Clean Air Act as hazardous air
pollutants (HAPs) due to their documented adverse health effects as carcinogens. Biofuels would
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improve urban air quality by providing immediate and substantial reductions in the need to add
aromatics such as BTEX to the gasoline stocks used for transportation fuels in America. [EPA-
HQ-OAR-2015-0111-1809-A1 p.2]
With biofuels, the need to add harmful aromatics such as BTEX for gasoline octane
enhancement disappears. The result is cleaner burning fuels with significantly lower BTEX
concentrations and significant reductions in HAPs released from fuel combustion by the US
transportation fleet. These changes would provide lasting and far reaching improvements in air
quality. [EPA-HQ-OAR-2015-0111-1809-A1 p.2]
In addition to reductions in HAP emissions, including known carcinogens as BTEX, reducing the
aromatics within the national fuel mix would also improve air quality through reductions in PM-
10/PM-2.5 emissions along with reductions in precursors to ozone formation. PM-10/PM-2.5 and
ozone are some of the most challenging air quality issues facing USEPA today. USEPA needs
significant emission reductions from the transportation sector to meet the current national PM-
10/PM-2.5 and ozone challenges. In the current RFS proposal, USEPA is in effect throwing
away opportunities for real and substantial air quality improvement in urban air quality,
including improvements in PM-10/PM-2.5 and ambient ozone, solely to address perceived but
untrue shortcomings in the RFS that have been advanced by petroleum industry interests. [EPA-
HQ-OAR-2015-0111-1809-A1 p.2-3]
ANEEP recommends that USEPA consult technical comments submitted elsewhere in this
docket by Urban Air Initiative which document in greater detail the air quality improvements
that can be achieved by replacing aromatics in gasoline with higher blends of cleaner-burning
ethanol and other biofuels. [EPA-HQ-OAR-2015-0111-1809-A1 p.3]
The air quality improvements associated with the RFS actually have a historical parallel in the
USEPA phase-out of lead in gasoline. What you may not know is that Nebraska actually led the
nation toward the development of cleaner transportation fuels through the transition to unleaded
gasoline. In 1971, the Nebraska Legislature passed LB 776 which established the Nebraska
Ethanol Board. The Statement of Intent for the introduction of LB 776 was as follows:
1. To remove the lead in gasoline and replace it with ethanol as an octane enhancing element.
2. To provide a more environmentally friendly fuel.
3. To provide an additional market for farm crops. [EPA-HQ-OAR-2015-0111-1809-A1 p.3]
That bill was passed by the Nebraska legislature only one year after the adoption of the 1970
Clean Air Act Amendments, passed by the Congress, and signed into law by President Nixon.
Also in 1970, the Nebraska Legislature enacted LB 939 which created the Nebraska Department
of Environmental Quality (NDEQ). [EPA-HQ-OAR-2015-0111-1809-A1 p.3]
Like the current RFS, petroleum industry interests vigorously opposed LB 776 in 1971. These
interests testified that lead was an essential element of gasoline required to lubricate engine
valves. There were statements such that there would never be a viable consumer product such as
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unleaded gasoline along with dire predictions regarding automobile performance should
transportation fuels move to reduce or eliminate the lead content of gasoline. However, due to
the foresight of USEPA and others regarding the need to reduce public exposure to lead
emissions from automotive fuel combustion, federal regulations followed Nebraska's lead and
were adopted in 1974 to require gasoline retailers to offer unleaded gasoline and designed fuel
nozzles so that cars with catalytic converters can accept only unleaded gasoline. [EPA-HQ-
OAR-2015-0111-1809-A1 p.3]
USEPA needs to move the RFS forward using the same foresight toward improving the
transportation fuel mix that the Agency showed when the nation moved from leaded to unleaded
gasoline. [EPA-HQ-OAR-2015-0111-1809-A1 p.3]
I offer for your information Table 1 Federal Standards for Lead Phasedown Source United States
Code of Federal Regulations 1996. [EPA-HQ-OAR-2015-0111-1809-A1 p.3] [Table 1 can be
found on page 5 of EPA-HQ-OAR-2015-0111-1809-A1.]
It is nothing less than a tragedy that the petroleum industry was allowed to use lead as an octane
enhancing element for many years after qualified researchers had provided other evidence that
emissions from leaded gasoline could cause serious health problems for our citizens. The U.S.
EPA first announced regulations to limit the amount of lead in gasoline in November 1973,
which were prompted by two factors. First, the increased recognition of the negative health
effects associated with lead exposure from gasoline, particularly for children in urban areas.
Second, the introduction of catalytic converters in new cars beginning in 1975. After the phase
out, elevated lead blood levels decreased from 88% of children before the phase out to
approximately one percent in 2006. There is also research available that lead in gasoline could
cause Alzheimer's, stroke, and other medical problems. The fact that USEPA successfully
removed lead from gasoline has undoubtedly reduced the number of citizens suffering from these
devastating ailments. [EPA-HQ-OAR-2015-0111-1809-A1 p.3-4]
El5 would also allow for a decreased public exposure to aromatic hydrocarbons as BTEX and
benefit the nation's fight to reduce PM-10/PM-2.5 and ambient ozone levels. [EPA-HQ-OAR-
2015-01 ll-1809-Alp.4]
Board of County Commissioners of Putnam County, Ohio
The ethanol industry has been a tremendous environmental benefit for the United States of
America by reducing fuel pollutants and breathing problems. [EPA-HQ-OAR-2015-0111-3289-
Al p. 1]
Environmental Working Group (EWG)
The production of corn ethanol has also adversely impacted U.S. air and water quality. [EPA-
HQ-OAR-2015-0111-2040-A1 p.3]
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Florida Chamber of Commerce
Furthermore, the production and use of ethanol actually hurts our air quality- increasing smog
and dangerous emissions that are worse than pure gasoline alone. [EPA-HQ-OAR-2015-0111-
3425 p.l]
Governors' Biofuels Coalition
The average gallon of gasoline sold in the United States is composed of 25 to 30 percent
aromatics. Petroleum refiners use an energy intensive process to convert crude oil into
aromatics, which is added to gasoline to increase octane. When crude oil prices rise,
subsequently do, aromatics costs, which are then passed onto the consumer. Today, aromatics
are the most expensive, least energy efficient, carbon intensive part of a gallon of gasoline.
More importantly, in recent years, scientific advances have confirmed that aromatics are the
primary precursor of urban particulate matter, specifically PM2.5 secondary aromatic aerosols
and nano-sized ultrafme particulates — also known as UFPs. UFPs are coated with polycyclic
aromatic hydrocarbons (PAHs), which are the product of incomplete combustion of aromatics.
Automakers confirm that the advanced engine designs needed to meet new fuel efficiency
standards are likely to make UFP and PAH emissions worse, not better. [EPA-HQ-OAR-2015-
0111-1722-A1 p. 10]
Mass Comment Campaign sponsored by anonymous 15 (email) - (2485)
With these cuts, our nation will not see the dramatic decrease in greenhouse gas (GHG)
emissions assumed under the RFS. With full implementation, the RFS would reduce GHG
emissions by 138 million metric tons, which is the equivalent of taking 27 million cars off the
road. [EPA-HQ-OAR-2015-0111-0217-A1 p.l]
Mass Comment Campaign sponsored by anonymous 22 (email) - (57)
Finally, I'm concerned about what this will do to the air we breathe. We cannot forget the
important environmental benefits of ethanol, which provides up to a 50 percent reduction in
greenhouse gas emissions, compared to gasoline. Ethanol is a sustainable octane source that is
much better for the environment than particulate-generating petroleum alternatives. [EPA-HQ-
OAR-2015-0111-1478-A1 p.l]
Mass Comment Campaign sponsored by anonymous 23 (email) - (10)
Global ethanol production and use is estimated to reduce greenhouse gas emissions by 100
million metric tons annually, the equivalent of taking more than 20 million vehicles off
the road. Ethanol is a sustainable octane source that is much better for the environment
than particulate-generating petroleum alternatives. [EPA-HQ-OAR-2015-0111-1479-A1
p.l]
Mass Comment Campaign sponsored by anonymous 24 (postcard) - (207)
NASCAR chooses American ethanol, racing more than 7 million miles on corn ethanol and
leaving cleaner air in its wake. I have seen its performance on the race track and in my engine at
home.
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NASCAR chooses American ethanol, racing more than 7 million miles on corn ethanol and
leaving cleaner air in its wake. I have seen its performance on the race track and in my engine at
home. [EPA-HQ-OAR-2015-0111-2563-A1 p.2]
Mass Comment Campaign sponsored by anonymous 3 (web) - (893)
Recent studies show that ethanol refining actually worsens the pollutants that cause ground-level
ozone, or smog, a pollutant the EPA is preparing to further clamp down on later this year. How
can the agency support a policy to increase ethanol when doing so will undermine its own goals
of cleaning up smog' [EPA-HQ-OAR-2015-0111-0126 p.l]
Mass Comment Campaign sponsored by anonymous 9 (email) - (230)
With these cuts, our nation will not see the dramatic decrease in greenhouse gas (GHG)
emissions assumed under the RFS - with full implementation, the RFS would reduce GHG
emissions by 138 million metric tons, which is the equivalent of taking 27 million cars off the
road. [EPA-HQ-OAR-2015-0111-0212-A1 p.l]
Mass Comment Campaign sponsored by Care2 (email) - (9720)
Recent studies show that ethanol refining actually worsens the pollutants that cause ground-level
ozone, or smog, a pollutant the EPA is preparing to further clamp down on later this year. How
can the agency support a policy to increase ethanol when doing so will undermine its own goals
of cleaning up smog? [EPA-HQ-OAR-2015-0111-1476-A1 p.l]
Minnesota Farm Bureau
In addition to the economic impact renewable fuels has on Minnesota's economy, the RFS2 has
reduced our country's dependence on foreign crude oil and reduced air pollution [EPA-HQ-
OAR-2015-0111-2263-A1 p. 1]
Missouri Coalition for the Environment
University of Minnesota experts this year found that corn ethanol's total life cycle emissions are
'twice as damaging to the air quality as gasoline.' And adding to the overwhelming body of
independent research, a Stanford University study concluded that ethanol-fueled cars generate
higher ozone concentrations compared to those fueled by pure gasoline. [EPA-HQ-OAR-2015-
0111-2271-A1 p.l]
National Biodiesel Board
Air Quality: Referring to its Regulatory Impact Analysis (RIA) from 2010, EPA contends that
increased use of biomass-based diesel would lead to increases in some criteria pollutant and air
toxics emissions and decreases in others. EPA-HQ-OAR-2015-0111-0008 at 3. The Regulatory
Impact Analysis, of course, compares emissions to petroleum fuel. EPA then states that "given
that other advanced biofuels also result in air quality impacts, and that the volumes at issue are
relatively small when considered in the context of transportation fuel use throughout the
geographic area in which the RFS program applies ... , the overall impacts of marginal shifts
between BED and other advanced biofuels is expected to be small." Id. This assessment
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illustrates the fallacy with EPA's approach where the purpose of moving to renewable fuels was
to reduce air emissions compared to petroleum. In any event, the only evidence EPA cites to
shows that, while some NOx emissions might increase, biodiesel use results in significant
decreases in particulate matter, carbon monoxide, and hydrocarbons. RFS2 RIA at 513 (Feb.
2010); see also Section VI.B.l. Indeed, these emissions benefits were identified with respect to
use of B20, and, thus, this factor shows to achieve the emissions benefits identified EPA should
push the industry toward higher levels of biomass-based diesel. This does not show that there
would be limited impacts, it still shows that increasing biomass-based diesel will result in greater
emissions reductions. Notwithstanding that EPA has not provided information as to the
emissions associated with other advanced biofuels, as EPA previously found, it is better to have
actual gallons and more certainty in ensuring these reductions, like Bryce Harper getting on base,
than the potential that some other advanced biofuel can step up to the plate and hit a home run in
the first at bat. [EPA-HQ-OAR-2015-0111-1953-A2 p.48-49]
The impact of the production and use of renewable fuels on the environment, including on air
quality, climate change, conversion of wetlands, ecosystems, wildlife habitat, water quality, and
water supply. [EPA-HQ-OAR-2015-0111-1953-A2 p.58]
EPA presents no new information regarding air quality impacts as a result of increasing the
biomass-based diesel volume under the RFS2 program. Its analysis for the 2013 volume showed
minimal adverse effects, and the proposed increase in volumes here are within the volumes
analyzed. Notwithstanding, biomass-based diesel clearly presents substantial air quality benefits
over petroleum diesel fuel. EPA consistently cites tailpipe emissions from traditional diesel—
primarily from older trucking fleets and other heavy-duty vehicles—as a major national health
hazard. Substituting higher amounts of biodiesel for petroleum diesel fuel is the simplest, most
effective way to immediately reduce diesel emissions. [EPA-HQ-OAR-2015-0111-1953-A2
p.61]
Biodiesel's emissions significantly outperform petroleum-based diesel. Research conducted in
the United States shows biodiesel emissions have decreased levels of all target polycyclic
aromatic hydrocarbons (PAH) and nitrited PAH compounds, as compared to petroleum diesel
exhaust. See NBB Comments on Draft Report to Congress at 23-24 (Feb. 28, 2011) (EPA-HQ-
ORD-2010-1077-0022).5? According to EPA, biodiesel reduces diesel exhaust emissions that are
harmful to human health. EPA, A Comprehensive Analysis of Biodiesel Impacts on Exhaust
Emissions: Draft Technical Report, EPA420-P-02-001 (2002), available at
http://www.epa.gov/otaq/models/analysis/biodsl/p02001.pdf Based on EPA's assessment, this
includes reducing unburned hydrocarbons by 67 percent, reducing carbon monoxide by 48
percent, reducing particulate matter by 47 percent, reducing polycyclic aromatic hydrocarbons
by 80 percent, reducing nitrated PAHs by 90 percent, and reducing ozone potential of speciated
hydrocarbons by 50 percent. See Emissions Benefits of Biodiesel and the Renewable Fuel
Standard (Attachment 7). These compounds have been identified as potential cancer causing
compounds. The net impact of these emission reductions from 1.5 billion gallons of biodiesel is
9,350,000 pounds of diesel particulate matter, 12,690,000 pounds of hydrocarbons, and
104,085,000 pounds of carbon monoxide. Id. [EPA-HQ-OAR-2015-0111-1953-A2 p.61-62]
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Biodiesel is the only alternative fuel to voluntarily perform EPA Tier I and Tier II testing to
quantify emission characteristics and health effects. That study found that B20 provided
significant reductions in total hydrocarbons; carbon monoxide; and total particulate matter. See
NBB Comments on Draft Report to Congress at 24 (EPA-HQ-ORD-2010-1077-0022). Biodiesel
production also has been found to produce less smog forming emissions than petroleum diesel
production. Id. at 81. Pure biodiesel typically does not contain sulfur and, therefore, reduces
sulfur dioxide exhaust from diesel engines to virtually zero. [EPA-HQ-OAR-2015-0111-1953-
A2 p.62]
EPA has recognized that diesel emissions continue to pose health risks. Diesel pollution is linked
to asthma, other respiratory problems and heart attacks, and is especially dangerous for children.
EPA Press Release, Maine Companies Honored by Northeast Diesel Collaborative for Efforts to
Reduce Air Pollution, Nov. 14, 2013,
http://yosemite.epa.gOv/opa/admpress.nsf/0/2446FED87354EFC085257C230067ECAF (last
updated July 26, 2015). The use of biodiesel allows for reductions of these harmful emissions. In
a partnership recognized by EPA for its efforts, Oakhurst Dairy was able to reduce its overall
fuel emissions by up to 70 percent annually in its diesel fleet by using biodiesel, while also
reducing costs. Id. [EPA-HQ-OAR-2015-0111-1953-A2 p.62]
As noted above, while EPA need not quantify the benefits for purposes of a cost benefit analysis
when assessing the statutory factors, EPA did seek to quantify the air quality benefits in setting
the 2013 biomass-based diesel volume at 1.28 billion gallons. 77 Fed. Reg. at 59,480^59,482.
Nonetheless, as noted in its prior comments, NBB attempted to quantify the significant
additional benefits biodiesel has in reducing emissions of other pollutants, such as particulate
matter, carbon monoxide and unburned hydrocarbons. See David W. DeRamus, Ph.D., Bates
White Economic Consulting, and Marc Chupka, The Brattle Group, Cost of Carbon reduction
from Biodiesel: Summary of Preliminary Results, at 2 (Jan. 2014) (Attachment 8). Based on
benefit values estimated by EPA for particulate matter reductions under implementation of the
Diesel Emissions Reduction Act, the production of 1.7 billion gallons of biodiesel provides
annual benefits on the order of $1.12 billion, or approximately $0.66 per gallon of biodiesel, for
particulate matter reduction alone. Id. EPA has identified health benefits of reducing particulate
matter emissions to include reduced mortality of adults and infants, reduced chronic and acute
bronchitis, reduced acute myocardial infarctions, reduced cardiovascular hospital admissions,
reduced upper and lower respiratory symptoms, reduced exacerbation of asthma, and reduction
in lost work days. See generally EPA, Report to Congress on Black Carbon (March 2012),
available at http://www.epa.gov/blackcarbon/2012report/fullreport.pdf. EPA has identified the
monetary benefits of these health impacts range between $230 and $880 per ton of particulate
matter reduced. Id. at 143. In 2013, the U.S. biodiesel industry reduced particulate matter
emissions by more than 4500 tons. See Emissions Benefits of Biodiesel and the Renewable Fuel
Standard (Attachment 7). Thus, accounting for the benefits obtained by reducing such other
pollutants would further reduce the above estimates of the cost of reducing CO2 emissions using
biodiesel. [EPA-HQ-OAR-2015-0111-1953-A2 p.62-63]
57 These comments and attachments are incorporated by reference herein.
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Northern Canola Growers Association
Well beyond the canola and agricultural sector, biodiesel provides numerous benefits for
consumers and society as a whole, including:
-significant reductions in greenhouse gas emissions resulting in improved air quality [EPA-HQ-
OAR-2015-0111-2036-A1 p.2]
State of South Dakota
Ethanol and other renewable fuels are good for my state and our country. They are making our
country more independent from foreign oil. They have kept our farm economy strong while also
improving our air quality. [EPA-HQ-OAR-2015-0111-1919-A1 p.l]
Urban Air Initiative
UAI's comments make the following points:
-EPA is aware of recent automaker and other studies that confirm E30+ blends substantially
reduce the most dangerous urban air toxics (MSATs). Experts have found 45% reductions in PM
and black carbon in direct injection (DI) engines, and 80+% reductions in PM and PN in port
fuel injection (PFI) engines. Reductions of this magnitude cannot be achieved with costly vehicle
hardware changes.6 [EPA-HQ-OAR-2015-0111-1821-A1 p.3]
Congress made clear in the 1990 Clean Air Act Amendments (1990 CAAA) that the American
public should never again suffer the unnecessary and enormous human and economic costs of the
leaded gasoline experience. After extensive debate, in the same piece of legislation that banned
the use of lead in gasoline, Congress directed EPA to establish (and from time to time revise)
rules governing emissions of hazardous air pollutants caused by motor vehicle fuels. In the 1990
CAAA, Congress made it clear that reductions in toxic air pollutants necessarily required
regulation of the 'aromatic hydrocarbon content' of gasoline, and thatEPA's rules should 'reflect
the greatest degree of emission reduction achievable through the application of technology which
will be available.' In other words, the mandate is technology-forcing. [EPA-HQ-OAR-2015-
0111-1821-A1 p.5-6]
Unfortunately, despite the fact that automakers have urged EPA to provide it with higher octane
gasoline (to facilitate their compliance with the new fuel efficiency and carbon reduction rules),
and despite the vast body of scientific evidence that confirms toxic aromatic compounds' adverse
health effects, EPA has not complied with this legal requirement. This failure to enforce the law
goes beyond reliance on invalid 'factual predicates,' like those used in its 2007 MSAT final11
rule. In January 28, 2013, EPA Ann Arbor's Fuels Center Director stated that '[o]ctane
historically has had little or no effect on criteria pollutants or air toxics . . . ,'12 Since toxic
aromatics have historically been relied upon by petroleum refiners as their 'octane workhorse,'
and since they are widely known to be the primary source of some of the most dangerous
pollutants in the urban environment, it is difficult to discern a scientific basis for EPA's stated
position on 'octane' and its relationship to air toxics and other emissions. [EPA-HQ-OAR-2015-
0111-1821-A1 p.6]
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UAI is particularly concerned about the mounting evidence of the potency and lethality of
gasoline's heavy molecular weight (HMW) polycyclic aromatic hydrocarbons. The June 2003
Senate Environment and Public Works Committee (Inhofe) report on S. 791 said the following:
[EPA-HQ-OAR-2015-0111-1821-Alp.6]
[Indented quote paragraph] There is no specific deadline in the Act for EPA to further reduce
toxic air pollutants from mobile sources. Section 204 [now Section 202], however, requires EPA
to promulgate final regulations addressing hazardous air pollutants from vehicles and fuels by
July 1, 2004, as per the MS AT rule. The Agency retains general authority to control emissions
from motor vehicles of any air pollutant that causes or contributes to air pollution which may
reasonably be anticipated to endanger public health or welfare. In a discussion focused on
maintaining air toxics reductions from the RFG program, EPA's [1999] Blue Ribbon Panel on
Oxygenates in Gasoline specifically recommended that EPA should explore and implement
mechanisms to achieve equivalent or improved public results that focus on reducing those
compounds that pose the greatest risk. The Panel recognized that the current mass-based
performance requirements in the RFG program may not adequately account for and consider that
the different exhaust components pose differential levels of risk to public health due in large part
to their variable potency.13
(Emphasis added.) [EPA-HQ-OAR-2015-0111-1821-A1 p.6]
In the ten years that have passed since this statement, best available science has confirmed that
the heavy molecular weight (HMW) polycyclic aromatic hydrocarbons (PAHs)—the
predominant urban source of which are gasoline aromatics—are the most potent substances
emitted out of a gasoline tailpipe. UAI respectfully urges EPA to immediately correct this
oversight, and re-shape its MS AT regulatory program accordingly.14 [EPA-HQ-OAR-2015-
0111-1821-A1 p.6-7]
EPA Cannot Adequately Protect the Public from the Serious Health Threat Posed by Urban
PM2.5 Pollution Unless It Overcomes the Blend Wall. Unfortunately, EPA's refusal to recognize
the serious health effects of carcinogenic gasoline aromatic hydrocarbons and their potent MS AT
combustion byproducts leaves a huge hole in the urban "health safety net." In its comments on
EPA's 2012 PM2.5 rule, Urban Air identified the primary issues:
1. Particle size and composition are interconnected and have enormous impact on human health.
2. Gasoline exhaust is the primary source of urban primary and secondary PM, BC, and PAHQ
toxics.
3. PAHQs are known toxics, have proven and serious health effects, and should require no
additional epidemiological proof for EPA to act.
4. Ultrafme particles, PAHs, and BC are inextricably tied to gasoline composition, and their
emissions will increase in urban areas if fuel quality improvements do not complement advanced
engine designs.
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5. Cost-effective and technologically available methods of improving fuel quality exist.
6. EPA has clear statutory authority, and indeed the legal obligation, to improve gasoline quality
standards. [EPA-HQ-OAR-2015-0111-1821-A1 p.7]
The comments UAI and the Energy Future Coalition submitted with regard to the proposed Tier
3 rule15 reinforced these points with extensive citations of the health literature and automaker
studies that conclusively show that mid-level ethanol blends, such as E30, are the most cost-
effective way for EPA's rule to 'reflect the greatest degree of emissions reduction achievable
through the application of technology which will be available' as required by the Clean Air Act
Amendments of 1990. [EPA-HQ-OAR-2015-0111-1821-A1 p.7]
Recommended Near-, Mid-, and Long-Term Actions by EPA. Congress has spoken clearly, and
the best available science is irrefutable: Gasoline aromatic hydrocarbons and the potent MSAT
emissions they cause impose enormous damage on the public health and welfare. Numerous
benefits will result if they are reduced and replaced by high-octane, clean-burning ethanol,
commensurate with the levels required by the RFS. EPA has all of the authority it needs—indeed
EPA has the legal obligation—to take the actions set out below. Once it does, the E10 Blend
Wall will be a thing of the past, and the nation will have achieved a rare win-win-win: cleaner air
and better health; higher quality gasoline at a lower cost; and a market-driven, robust renewable
fuels industry consistent with the RFS targets set by Congress. [EPA-HQ-OAR-2015-0111-
1821-A1 p.9]
-Extend RVP waivers to E10+ blends.
-Encourage a nationwide flex fuel transportation system—clean octane fuels, cars, and pumps—
just as Brazil has successfully done.
-Establish an E30 certification and commercial gasoline system.
-Correct EPA's flawed models, especially the MOVES2014 model, so that gasoline aromatic
hydrocarbons' true contributions to BTEX, PM2.5 SOAs- UFP-borne PAHs, and NOx emissions
are fully accounted for and reported.
-Ensure market-driven access and maximize consumer choice by leveling the playing field for
ethanol's 'Clean Octane' vs. toxic aromatics' 'Dirty Octane'. [EPA-HQ-OAR-2015-0111-1821-
Al p.9]
6 See, e.g., M. Matti Maricq, et al., The Impact of Ethanol Fuel Blends on PM Emissions from a Light-Duty GDI
Vehicle, 46 Aerosol Sci. & Tech. 580 (2011); Costagliola, et al., Combustion Efficiency and Engine Out Emissions
of a S.I. Engine Fueled with Alcohol/Gasoline Blends, Applied Energy 1, 10 & fig. 17 (2012) (in press, corrected
proof); 2010 CARB/Zhang paper (PFI engines). Additional citations can be found in Attachment A to these
comments, in UAI's PM2.5 comments and Tier 3 comments. Comments of the Energy Future Coalition and Urban
Air Initiative on the U.S. Environmental Protection Agency's Proposed Rule: Control of Air Pollution from Motor
Vehicles: Tier 3 Motor Vehicle Emissions and Fuel Standards. Docket ID No. EPA-HQ-OAR-2011-0135 78 Fed.
Reg. 29816 (July 1, 2013).
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1: See detailed discussion in Comments of the Energy Future Coalition and Urban Air Initiative, Control of Air
Pollution from Motor Vehicles: Tier 3 Motor Vehicle Emission and Fuel Standards, EPA-HQ-OAR-2011-0135, 78
Fed. Reg. 29816 (July 1, 2013), at 52-57.
12 Statutory and Regulatory Backdrop for Fuel Standards (Jan. 28, 2013), InsideEPA.com (Doc ID: 2430455), slide
13.
13 http://www.congress.gov/cgi-bin/cpquery/T?&report=sr057&dbname=108&
15 Comments of the Energy Future Coalition and Urban Air Initiative on the U.S. Environmental Protection
Agency's Proposed Rule: Control of Air Pollution from Motor Vehicles: Tier 3 Motor Vehicle Emissions and Fuel
Standards. Docket ID No. EPA-HQ-OAR-2011-0135 78 Fed. Reg. 29816 (May 21, 2013).
14 See references in Attachment B to HMW PAHs' relative toxicity and potency weighted rankings compared to
other MSATs.
Response:
The Agency received many comments on the non-CC>2 air quality impacts associated with
ethanol, biodiesel, and the RFS standards in general with some claiming tremendous air quality
benefits and opportunities from renewable fuels, while others criticized the Agency for pursuing
a policy that results in negative air quality impacts. (Note: comments related to air quality
impacts are also found in section 8.0 and consideration of comments related to the air quality
impacts in setting the BED standard can be found in section 3.4.)
EPA conducted a detailed assessment of the air quality impacts associated with an increase in
production, distribution, and use of the renewable fuels sufficient to meet the RFS2 volumes,
including different ethanol blends, as part of the RFS2 rulemaking in 2010. That air quality
assessment is described in Section VI.D of the preamble for that rule
(http://www.gpo.gov/fdsys/pkg/FR-2010-03-26/pdf/2010-3851.pdf) and Chapter 3.4 of the RIA
for that rule (http://www.epa.gov/otaq/renewablefuels/420rl0006.pdf). The air quality
assessment that supported the RFS2 rule was the result of years of rigorous analysis and
modeling and it remains the Agency's best estimate of the air quality impacts associated with the
renewable fuel standards. EPA did not conduct a new air quality impact assessment in assessing
the volumes of renewable fuel that are expected to be available in exercising our general waiver
authority or cellulosic waiver authority for this rulemaking. Therefore, the environmental
impacts of the renewable fuel volumes did not factor into the determination of reasonably
available volumes for 2014-2016.
Prior studies summarized in the RFS2 RIA indicate that the impacts of biodiesel on VOC, PM
and air toxics emissions at the tailpipe are generally favorable compared to petroleum diesel fuel,
but the impact on NOx is slightly detrimental. However, that work was done on engines without
NOx or PM after treatment, so the impacts on new engines is less well understood. The RFS2
RIA also indicates that the upstream emissions (PM, VOC, NOx, CO, and 802) of biodiesel
production (emissions associated with the upstream production and distribution of biodiesel) are
detrimental to air quality. Upstream air toxics emissions impacts are negligible to slightly
detrimental to air quality. Taking both tailpipe and upstream emissions into account, the net
impacts yield increases in the pollutants that contribute to both ambient concentrations of ozone
and particulate matter as well as air toxics.
Several stakeholders raised the possibility of reducing the aromatics content of gasoline as a
means for reducing emissions of toxic pollutants. In fact, the aromatics content of gasoline
would tend to decrease as the ethanol content increases, both due to the effects of dilution as well
as the fact that ethanol is a high octane additive. Thus the RFS program, which will provide
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incentives in 2016 to increase the pool-wide ethanol content of gasoline, will indirectly reduce
aromatics. We have also previously acted under Clean Air Act section 202(1)'s mandate to
control hazardous air pollutants from motor vehicles and fuels. One specific aspect of the most
recent 202(1) rule addresses the aromatics content of gasoline through required limits on benzene,
one of the most potent aromatic compounds in motor vehicle fuels. 6 Consideration of other
regulatory actions to directly reduce the aromatics content of gasoline is outside the scope of the
RFS program.
A number of comments state that aromatics in gasoline create higher emissions of numerous
pollutants, including PAHs and other toxics, BC, and precursors of SOA and UFPs. Such
comments are outside the scope of this rulemaking. However, it is worth noting that the Agency
continues to research how various fuel properties and combustion processes affect emissions of
PAHs, other toxics, BC, UFPs, and SOA precursors. Many factors affect formation of secondary
organic aerosols, including emissions of PAHs and other aromatic compounds from diesel and
gasoline motor engines, as well as other SOA precursors, such as isoprene and a-pinene. NOx
also plays an important role in SOA formation. EPA is conducting ongoing research to better
understand relationships between fuel properties and emissions of aromatics and other SOA
precursors, as well as their reactions in the atmosphere under different conditions.
8.4 Water Quality
Comment:
Environmental Working Group (EWG)
The production of corn ethanol has also adversely impacted U.S. air and water quality.
Florida Chamber of Commerce
To produce one gallon of corn ethanol, over 1.7 thousand gallons of water are used. This is at a
time where some areas of the country are experiencing severe drought, and other areas, like
Florida, are focusing on long-term water solutions to ensure enough water is available as the
state continues to grow.
Missouri Coalition for the Environment
As the EPA is well aware, the pesticides and fertilizer used in industrial corn production cause
fish kills, contributes to the Dead Zone in the Gulf of Mexico, and pollutes our drinking water
supplies when it runs off farm fields.
National Biodiesel Board
Water Quality and Water Supply. EPA again finds that the other advanced biofuel that might
replace soybean oil biomass-based diesel are likely to have impacts on water quality and water
supply which are comparable to those of soy-based biomass-based diesel. Given the relatively
small amount of these other biofuels, EPA does not find this factor to provide a good reason for
36 72 FR 8428, February 26, 2007.
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setting a higher or lower nested volume requirement. Id. As with the other considerations, this
renders the entire analysis Congress required pointless. Moreover, EPA identifies no assessment
of these issues for these other biofuels by which the public can assess the accuracy of this
conclusory statement. Again, EPA admits that its proposal would allow other advanced biofuels
with similar impacts on water supply and water quality as soybean oil biodiesel, but then asserts
that certain advanced biofuels "will have little or no impact on water quality and water supply,"
and keeping the biomass-based diesel volume down would provide a "continuing incentive" for
further development and marketing of such fuels. Id. Again, EPA simply makes a conclusory
statement.
While soybean oil has not been found to have significant impacts on water quality or water
supply, EPA also ignores that increasing the biomass-based diesel volume requirement supports
use of other feedstocks, including waste oils. For example, certain of the feedstocks approved for
biomass-based diesel are used as rotational crops which, in fact, allow for less use of fertilizer
and pesticides and help retain moisture, reducing water needs. As noted, soybeans are not grown
for the oil and, as such, any purported impacts are likely to occur without any increases in
biomass-based diesel volumes. Again, it makes little sense to compare the impacts of certain
advanced biofuels over others. They are, by definition, advanced biofuels, and Congress wanted
them all in the market.
The impact of the production and use of renewable fuels on the environment, including on air
quality, climate change, conversion of wetlands, ecosystems, wildlife habitat, water quality, and
water supply....EPA again does not provide any new information regarding the potential impacts
on water quality or quantity as a result of increasing the biomass-based diesel volume. As EPA
previously recognized, soybean farming provides water quality benefits. 76 Fed. Reg. at 38,872
("Water quality generally benefits when soybeans are rotated with corn, since the next corn crop
requires less fertilizer and fewer pesticides."). Soybeans when used as part of a crop rotation
program (usually corn) promote sustainability, including reducing impacts of agricultural
production on water. Soybeans fix nitrogen from the atmosphere and convert it to useful
nutrients for soil health and plant growth. Soybeans are a very efficient crop for improving soil
health in rotation with other crops while producing protein for livestock feed. Soybeans are 80
percent protein meal and 20 percent oil. This ratio of oil to meal corresponds to the plants natural
production and does not correspond to domestic demand for oil and meal. Soybeans require an
insignificant amount of fertilizer, pesticide, and irrigation inputs, and therefore represent
significantly less potential water quality and quantity impacts. For more information, see H2O'C
Engineering, Water Quantity and Quality Issues Related to Biodiesel (2010) (Attachment 6 to
NBB Comments on 2012 RFS, EPA-HQ-OAR-2010-0133-0159). Biodiesel processing also uses
"much less" water than ethanol production, and some facilities recycle the water used. See 77
Fed. Reg. at 59,476. Again, the use of waste oils, fats and greases has been on the rise, and EPA
properly found any potential impacts on water would not be directly attributable to biodiesel
production. Id. at 59,474.
Although EPA stated that biodiesel spills can also impact water quality, EPA recognized that
biodiesel is not toxic, and degrades four times faster than regular diesel. 77 Fed. Reg. at 59,476.
This significantly reduces the environmental risk associated with any unlikely biodiesel spills.
This benefit continues even when biodiesel is blended with diesel fuel. Blends of biodiesel and
petroleum diesel provide less threat to aquatic organisms than petroleum diesel alone. EPA
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points to, instead, potential emissions related to and discharges of glycerin. Id. EPA continues to
fail to recognize that 99.9 percent of glycerin from biodiesel plants is sold for one purpose or
another. See NBB, Glycerin Use as a Byproduct of Biodiesel Production (Jan. 2010) (Attachment
8 to EPA-HQ-OAR-2010-0133-0159). Biodiesel facilities also use technology that reprocesses
the glycerin into additional biodiesel product. The production of biodiesel also produces less
harmful byproducts than production of petroleum diesel. EPA has recognized that the production
of biodiesel compared to the production of petroleum fuels generates 79 percent less wastewater
and 96 percent less hazardous waste. See EPA, Environmental Laws Applicable to Construction
and Operation of Biodiesel Production Facilities, EPA-907-B-08-001, at 1-3 (Nov. 2008)
(citation omitted). [EPA-HQ-OAR-2015-0111-1953-A2 p.66]
Again, the lifecycle analysis cited by EPA was done using a prior mix of crude oils that would
not have included, for example, shale oil or oil sands production, which can have higher uses and
impacts on water quality. A significant amount of water is needed to conduct hydraulic
fracturing operations. See, e.g., Hilary Hylton, Frackers Guzzle Water as Texas Goes Thirsty,
TIME (Sept. 29, 2013\ http://nation.time.com/2013/09/29/frackers-guzzle-water-as-texas-goes-
thirsty/ ('Tracking giant Schlumberger estimates there will be a million new wells drilled around
the world in the next 20 years. The fracking process pumps large amounts of pressurized water
deep into the earth to dislodge oil and gas deposits. The amount of water needed varies,
depending on the geology of the formation, but the average South Texas well takes some four to
six million gallons of water over a period of several days as the rock formations are fractured,
according to an industry source."). "The safe disposal of large volumes of liquid waste associated
with natural gas and oil production is a major challenge because the waste fluids often contain
high levels of salinity, toxic metals, and radioactivity." Nathaniel R. Warner, et al, Impacts of
Shale Gas Wastewater Disposal on Water Quality in Western Pennsylvania, Environ. Sci.
Technol., 2013, 47(2), 11,849, 11,849, available at
http://sites.biologv.duke.edu/jackson/est2013.pdf A recent study examined the water quality of
discharged effluents, surface waters, and stream sediments associated with a treatment facility
site in western Pennsylvania, finding the elevated levels of chloride and bromide, combined with
the strontium, radium, oxygen, and hydrogen isotopic compositions of the effluents reflect the
composition of Marcellus Shale produced waters. Id.
Moreover, oil spills from offshore oil and gas extraction can have devastating effects on the
marine and coastal environments. A study conducted in 2012 indicates that, despite the
recommendations made in response to the Deepwater Horizon incident, "little to no progress has
been made to improve the regulation and safety conditions of offshore drilling in the U.S."
Oceana, Offshore Drilling Reform Report Card, at 1 (2012), available at
http ://oceana. org/sites/default/files/reports/2OffshoreDrillingReportCard2012FINAL.pdf
Biodiesel is a bio-based alternative to the dispersants that have typically been used to clean up oil
spills and recently have been called into question. See Jenna Higgins Rose, Biodiesel producers
stand ready to help clean up oil spill, Biodiesel Magazine, July 13, 2010,
http://biodieselmagazine.com/articles/4281/biodiesel-producers-stand-ready-to-help-clean-up-
oil-spill/.
Even normal storage and distribution of petroleum can have significant impacts on water sources
as a result of spills. In 2013, at least three major spills occurred from pipelines within a week,
impacting waterways. See Third Major Oil Spill in a Week: Shell Pipeline Breaks in Texas, Apr.
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7, 2013, http://saletn-news.com/articles/april072013/oil-texas.php. One of these spills includes
oil brought from the oil sands in Canada. Id. There are significant concerns that tar sands oil is
heavier and dirtier than other forms of crude, making any spills from pipelines carrying tar sands
oil extremely difficult to clean up. Elizabeth Shogren, EPA: Tar Sands Pipelines Should Be Held
To Different Standards, Apr. 24, 2013, http://www.npr.org/2013/04/24/178844620/tar-sands-
pipelines-should-get-special-treatment-epa-says. A recent report found that "[m]ore crude oil
was spilled in U.S. rail incidents [in 2013] than was spilled in the nearly four decades since the
federal government began collecting data on such spills." Curtis Tate, Crude-oil spills on U.S.
railways in 2013 topped total since 1975, Washington Post, Jan. 21, 2014,
http://www.washingtonpost.com/politics/crude-oil-spills-on-us-railways-in-2013-topped-total-
Since-1975/2014/01/21/8f7c5204-82ea-lle3-9dd4-e7278db80d86 The report found more than
1.15 million gallons of crude oil was spilled from rail cars in 2013, compared to 800,000 gallons
from 1975-2012. Id: see also Joby Warrick, Trains are carrying—and spilling—a record
amount of oil, Washington Post, Feb. 17, 2015, http://www.washingtonpost.com/news/energy-
environment/wp/2015/02/17/trains-are-carrying-and-spilling-a-record-amount-of-oil/ ("More
than 141 'unintentional releases' were reported from railroad tankers in 2014, an all-time high
and a nearly six-fold increase over the average of 25 spills per year during the period from 1975
to 2012, according to records of the federal Pipeline and Hazardous Materials Safety
Administration."). While many of these spills were small, the potential for significant spills with
significant environmental impacts is not speculative. Biodiesel, on the other hand, is non-toxic
and biodegradable.
This year has already seen several large oil spills from pipelines and transportation of petroleum.
See, e.g., Holly Yan, After oil spilled in Yellowstone River, residents told not to drink water,
CNN, Jan. 20, 2015, http://www.cnn.com/2015/01/20/us/vellowstone-river-spill/index.html:
California oil spill pipeline had been left to rust paper-thin, The Guardian, June 3, 2015,
http://www.theguardian.com/environment/2015/jun/04/us-oil-pipeline-left-to-rust-to-paper-thin-
before-145km-pacific-ocean-slick: see also At least 35,000 gallons of oil spills after Montana
train derailment, FOX News, July 18, 2015, http://www.foxnews.com/us/2015/07/18/at-least-
35000-gallons-oil-spills-after-montana-train-derailment/ ("The spill marked the latest in a series
of wrecks across the U.S. and Canada that have highlighted the safety risks of moving crude by
rail."). More oil is expected to be transported by rail despite ongoing safety concerns. See
America's oil glut problem: How to move it safely, CNN Money, Feb. 18, 2015,
http://money.cnn.com/2015/02/18/news/oil.
Nestle
Water
Ethanol is a relatively profligate user of water. Increasingly, Americans are aware that we
cannot think of a holistic approach to sustainability and the environment without considering
water use. The present emergency in California and other states should be ample warning that
water availability will be a critical environmental issue for both government and the private
sector in the years ahead. Heightened scrutiny should apply to policies that would encourage or
subsidize water use beyond what market forces would otherwise dictate - and such is the case for
the RFS corn ethanol mandate.
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The Renewable Fuels Association acknowledges that every gallon of ethanol requires close to 3
gallons of water for its production, in contrast to gasoline which requires between 2 and 2.5
gallons. (The University of Illinois provides very similar estimates.) However, ethanol has only
67% the energy content of gasoline. Therefore, to produce the same amount of energy as one
gallon of gasoline, an ethanol plant actually requires about 4.5 gallons of water (3 gallons of
water per gallon of ethanol 1.61 times energy content of gasoline).
The George Washington University
One additional result of increased fertilizer usage—especially for corn ethanol—is water
pollution. Increased fertilizer runoff damages ecosystems, harms biodiversity, and is contributing
to the Gulf of Mexico's 'Dead Zone.'23 This damage is most pronounced when acreage is
diverted from another crop to corn production, which relies heavily on nitrogen fertilization and
requires more irrigation than displaced crops, such as cotton.
23 Welch, H.L., Green, C.T., Rebich, R.A., Barlow, J.R.B., and Hicks, M.B., 2010, Unintended consequences of
biofuels production—The effects of large-scale crop conversion on water quality and quantity: U.S. Geological
Survey Open-File Report 2010-1229, 6 p.
Response:
Several commenters highlight the relatively high use of water in growing corn and the potential
for adverse impacts due to fertilizer and pesticide runoff on water pollution. In previous
rulemakings, EPA has recognized the potential impacts of water use and water quality of row
crops, especially corn. These impacts were assessed in the First Triennial Report to Congress,
which qualitatively assessed both potential impacts and opportunities for mitigation. These
potential impacts remain a concern. However, EPA did not use water quality impacts in
exercising our general waiver authority. Nevertheless EPA is encouraged by the
growing adoption of mitigation techniques such as no till farming and better control of fertilizer
usage.
In their comments, the National Biodiesel Board (NBB) claims a variety of water quality
advantages of biodiesel or lack of the disadvantages associated with other biofuels, particularly
those types of concerns often raised with corn ethanol, a conventional biofuel. (Similar
comments from NBB are considered in Section 3.4.3 of this response to comments.) NBB
criticized EPA's assessment of impacts on water usage and water quality, suggesting in particular
that EPA should instead compare soy-oil biodiesel to potential petroleum impacts on water use
and water quality rather than to other advanced biofuels for determining the BED standard. We
disagree as discussed in Sections 3.3 and 3.4.
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8.5 Wetlands, Ecosystems and Wildlife Habitats
Comment:
Board of Commissioners, Mercer County; Crawford County; Greenville-Reynolds
Development Corporation; Office of Commissioners, Lawrence County, Pennsylvania
There are significant reasons that mandated ethanol blend rates should be lowered. They include:
6. Loss of Conservation Land and Pristine Land. Five million acres of land that should have
been set aside for conservation has been lost since 2009 to farming to meet ethanol and biodiesel
mandates - this is more land than Yellowstone, the Everglades and Yosemite National Parks
combined. Additionally millions of acres of pristine land has been converted to farmland to meet
ethanol and biodiesel mandates.
7. Impact to Wildlife. Plowing millions of acres has destroyed the habitats for wildlife, such as
pheasants, ducks, bees and monarch butterflies, and this problem is further magnified by the
impacts of increasing use of pesticides.
Missouri Coalition for the Environment
• Between 2008 and 2011, 23 million acres of grassland, shrub land and wetlands were
converted to commodity crop production in large part a response to higher demand for
corn. These acres once served as carbon sinks. Now they release stored carbon and
eliminate that function. University of California-Berkeley scientists note that such
ethanol-related land conversion results in higher greenhouse gas emissions than fossil
fuels.
• Land conversion destroys valuable habitat. For example, as reported in the Kansas City
Star, corn ethanol production has contributed to the annual destruction of 1 million acres
of milkweed, the Monarch Butterfly's only food source.
National Biodiesel Board
Wetlands, Ecosystems and Wildlife Habitats. EPA finds that the other advanced biofuel that
might replace soybean oil biomass-based diesel are likely to have impacts on wetlands,
ecosystems, and wildlife habitats which are roughly comparable to those of soy-based biomass-
based diesel. Given the relatively small amount of these other biofuels, EPA does not find this
factor to provide a good reason for setting a higher or lower "nested volume" requirement. Id.
Similar to the air quality analysis, this renders the entire analysis Congress required pointless.
Moreover, EPA identifies no assessment of these issues for these other biofuels. For example,
EPA does not explain how sugarcane produced in more sensitive ecosystems in Brazil than
soybean oil in the United States would not have a greater impact on wetlands, ecosystems and
wildlife habitats. While soybean oil has not been found to have significant impacts on wetlands,
ecosystems and wildlife habitats, EPA also ignores that increasing the biomass-based diesel
volume requirement supports use of other feedstocks, including waste oils. For example, canola
used as a rotational crop has been identified as serving as habitat for wildlife.
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Again, EPA admits that its proposal would allow other advanced biofuels with similar impacts
on wetlands, ecosystems and wildlife habitats as soybean oil biodiesel, but then asserts that other
advanced biofuels are not made directly from crops and "would therefore likely have
significantly lower impacts on wetlands, ecosystems, and wildlife habitats than soy biodiesel,"
and keeping the biomass-based diesel volume down would provide a "continuing incentive" for
further development and marketing of such fuels. As an initial matter, there is simply no support
to state that a feedstock from a crop will necessarily have "significantly [higher] impacts" than
other feedstocks. Getting CNG/LNG to market, for example, likely requires newer and greater
infrastructure than soybean oil, resulting in land use impacts. Moreover, soybeans are not grown
for the oil and, as such, any purported impacts are likely to occur without any increases in
biomass-based diesel volumes. Regardless, it is utterly counter to Congressional intent that EPA
(and even proponents of certain biofuels) be required to undergo the process of comparing the
impacts of certain advanced biofuels over others. They are, by definition, advanced biofuels, and
Congress wanted them all in the market.
The impact of the production and use of renewable fuels on the environment, including on air
quality, climate change, conversion of wetlands, ecosystems, wildlife habitat, water quality, and
water supply. EPA does not present any new information regarding the potential impacts of
increased biodiesel production on wetlands, ecosystems, and wildlife habitats. As an initial
matter, EPA continues to find that cropland in the United States is on the decline. Thus, as NBB
has continually maintained, there is no evidence of land use impacts as a result of increased
CO
biofuel production. As was noted by scientists at Oak Ridge National Labs, the findings in the
draft report relied on by EPA in assessing these impacts for the 2013 volume "about what is
occurring or could possibly occur" is contradicted by the actual data on land use and
environmental changes in the United States since 2001 during the period of rapid biofuel
expansion.
Improved farming practices generally reduce the potential impacts of agricultural production. See
NBB Comments on Draft Report to Congress at 26-40 (EPA-HQ-ORD-2010-1077-0022);
H2O'C Engineering, Water Quantity and Quality Issues Related to Biodiesel, at 5 (2010)
(Attachment 6 to NBB Comments on 2012 RFS, EPA-HQ-OAR-2010-0133-0159). This is
unlike the impacts that continue to occur as a result of runoff from developed land. NBB
Comments on Draft Report to Congress at 26-40 (EPA-HQ-ORD-2010-1077-0022). In
particular, studies have shown that, where soybeans are grown, sediment and phosphorus is ten
times greater from non-agricultural land than from agricultural land. Id. at 43-44. Biofuel
production gives the rural economy additional incentives not to convert their lands for purposes
of development. The American Farmland Trust has found that the United States loses nearly 50
acres of farmland every hour. American Farmland Trust, Farmland,
https://www.farmland.org/our-work/areas-of-focus/farmland (last visited July 26, 2015). This
loss of valuable farmland is due to the economic hardships faced by farmers and pressures to
convert productive land into shopping malls, parking lots, and subdivisions. This trend has a
devastating impact on ecology, and habitat, including but not limited to high peak surface water
discharge rates, decreased perennial flow, and decreased groundwater recharge as a result of
increased impervious surfaces. These disrupted stream flows also carry high concentrations of
chemical pollutants and excess nutrient loads from industrial, and residential sources including
lawn fertilizers and leaking or ineffective sanitary sewers. The Natural Resource Conservation
Service (NRCS) and others have established that developed land contributes significantly more
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to nutrient loading of streams than agricultural land. NBB Comments on Draft Report to
Congress at 16 (EPA-HQ-ORD-2010-1077-0022).
While biodiesel helps make rotational farming of soybeans more economically sustainable, that
economic benefit does not drive expansion beyond the historical footprint of row crop
agriculture. In addition the RFS2 land use restrictions on renewable biomass, existing laws,
regulations, and basic economic principles already result in restraining U.S. agriculture to its
historical footprint. Federal requirements administered through the USDA's NRCS and the Farm
Service Agency provide many barriers to farmers who might otherwise expand production of
commodity crops onto lands that do not have a historical record of crop production. Some of
these restrictions are known as the Sodbuster and Swamp Buster provisions of the Food Security
Act of 1985. Those requirements specifically limit conversion of wetlands, grass lands, or highly
erodible soil. Farmers ignoring these requirements forfeit the benefit of USD A programs for crop
assistance, and are also unlikely to receive crop insurance on new ground. The ability to secure
crop insurance on land with a prior history of farming and the inability to secure crop insurance
on new land is a significant barrier to planting crops on new land. These factors combine to
restrain soybean production to the previously established footprint of row crop agriculture in the
United States.
Conservation practices continue to be adopted by U.S. farmers with increased effectiveness in
protecting soil health, reducing impacts to water quality and enhancing wildlife habitat and
biodiversity. A trend in the implementation of conservation practices is to target specific areas to
achieve optimum gains. The strategic pairing of conservation practices alongside production
agriculture provides the optimum balance of environmental stewardship while producing food
for the world and maintaining agriculture as the economic backbone of this country. The
environmental benefits of biodiesel and advanced biofuels and the economic benefits of the
RFS2, which enhance the conservation efforts in rural communities, are reasons why the
National Association of Conservation Districts supports the RFS2 and why the association leader
of 3,000 locally led conservation districts warned that adoption of EPA's November 2013
proposal to reduce advanced biofuels would be a step back in ongoing conservation and
environmental efforts. EPA-OAR-2013-0479-3945. Recognizing that the United States has the
most efficient farming practices and the most advanced commitment to conservation reminds us
that the United States should retain its leadership role in production agriculture.
Moreover, there are significant land use impacts of petroleum production, including loss of
critically important land and wetland areas. NBB Comments on Draft Report to Congress at 50-
51 (EPA-HQ-ORD-2010-1077-0022); see also Jason Dearen and Jennifer Kay, New Hunt for oil
in Florida raises environmental concerns, The Washington Post, July 25, 2015,
http://www.washingtonpost.com/national/energy-environment/new-hunt-for-oil-in-florida-raises-
environmental-concerns/2015/07/25/86bb5432-32e6-l Ie5-a879-213078d03dd3story.html
("Renewed hunts for oil in sensitive Florida ecosystems have environmental groups raising
questions about the state's regulation of the oil and gas industry."); Mark Schleifstein, Wetlands
loss linked to Outer Continental Shelf oil and gas pipelines in new study. The Times-
Picayune, Oct 5, 2009,
http://www.nola.com/business/index.ssf/2009/10/wetlandslosslinkedtoouter.html. These losses
could be avoided with increased use of biofuels, particularly as new crops are being developed
that can be used as rotational crops or that can be used during fallow periods that provided
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benefits to the primary crops, including improving moisture and protections against pests. [EPA-
HQ-OAR-2015-0111-1953-A2 p.65]
A key difference between the assessment conducted by EPA for the 2013 volume from today is
the increased use of waste fats, oils and greases for biodiesel production. As noted above, these
feedstocks, including distillers corn oil, now account for about half of U.S. biodiesel production.
EPA recognized that increasing use of corn oil from dry mill ethanol plants will reduce the
"potential agricultural impact of biodiesel production." 77 Fed. Reg. at 59,474. It also found that
"waste fats, oils and greases are expected to have negligible environmental impact as a feedstock
since they do not impact agricultural land use and would otherwise be used for some lower value
purpose or simply discarded." Id.
58 The RFS2 itself restricts the use of new lands for production of crops, such as soybeans, for biodiesel production,
and decisions regarding planting of soybean acres are largely based on demand for livestock feed and other uses. If
soybean oil was not used for biodiesel production, soybeans would continue to be produced to satisfy this demand.
Unilever
Further, the deforestation that occurs in many countries has a significant environmental and
ecological impact on those countries. According to a recent report released by the World
Wildlife Foundation, "Vast areas of forest, savannah and grassland have been cleared...as soy
production has expanded. As these ecosystems are lost, so are the wildlife they support and the
vital ecological services they provide, like clean water and healthy soils. Deforestation also fuels
climate change."
2 The Growth of Soy: Impacts and Solutions, World Wildlife Foundation -
http://assets.panda.org/downloads/wwf soy report final ian 19.pdf
Response:
Several commenters focused on the reduction in acres covered by the Conservation Reserve
Program. The maximum number of acres eligible under the CRP has decreased over the past
decade due to administrative action by the US Department of Agriculture, not due to the RFS
program. The Missouri Coalition for the Environment states that 23 million acres of grassland,
shrub land and wetlands were converted to commodity crop production between 2008 and
2011. EPA has not independently evaluated this claim but we do note that during this time
period, under the aggregate compliance requirements of the RFS program, total agricultural acres
cannot exceed the baseline amount of agricultural land in 2007. In fact, the number of acres used
for agricultural production in the U.S. has not increased and in some years has decreased
compared to the 2007 baseline. Thus in the US, while some shifting in land use has likely
occurred (e.g., moving from crops to pasture or pasture to crop production), there has been no net
increased in land devoted to agricultural production. Furthermore, changes in the types of crops
grown and the location of these crops is due to a host of factors, not just the demand created by
the RFS program.
The comments from the National Biodiesel Board note that farming practices continue to evolve
and crop yields continue to improve, mitigating potential adverse impacts including those
impacting wetlands, ecosystems and wildlife habitats. EPA has not conducted an analysis of the
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degree to which crop yields and farming practices mitigate the potential adverse impacts on
wetlands, ecosystems and wildlife habitat for this rule. We noted in the first triennial report to
Congress an increase in biofuel production could have adverse impacts due to monoculture
production adversely impacting biodiversity and the potential adverse impact of runoff from crop
lands on wetland pollution. However, we have not quantified the incremental impact likely to
result from the annual standards in the final rule.
The National Biodiesel Board criticized EPA's analysis of the impacts of higher biodiesel
volumes for setting the BED standard, arguing that biodiesel's wetland, ecosystem, and wildlife
habitat impacts were better than for other biofuels and therefore warranted higher BED
standards. Discussion of comments related to the BED standard can be found in Sections 3.3
and 3.4. Regarding the adequacy of our assessment for the statutory factors for the range of
biodiesel feedstocks, refer to the updated Memorandum to the Docket: "Final Statutory Factors
Assessment for 2016-2017 Biomass Based Diesel (BED) Applicable Volumes".
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9. Proposed Changes to Regulations
9.1 Algal Biofuel Pathways
Comment:
ABO, ACORE and BIO
In addition to our separate comments on the proposed rule's renewable volume obligations
(RVOs) and other matters under the Renewable Fuel Standard (RFS), we wish to share mutual
comments on EPA's proposed clarifications for its interpretation of "algal oil' under Table 1 to 40
CFR80.1426.
We do not object to EPA's clarification in the Proposed Rule that algal oils eligible for a
Renewable Identification Number (RIN) under Table 1 to 40 CFR 80.1426 be produced from
algae grown photosynthetically, since this was the model system used in determining the
lifecycle greenhouse gas emissions reductions of algal oil. However, we urge EPA to clarify that
this action in no way should be interpreted as intended to discourage pathway petitions of other
algae-derived renewable fuels pursuant to 40 CFR 80.1416.
On the contrary, EPA should reiterate in its final rule the Agency's commitment to interpreting
the term "algae" broadly in the context of the RFS. We concur with EPA's assertion that a broad
interpretation of "algae" furthers the purposes of the authorizing statute.1 Specifically, in addition
to all microalgae and macroalgae, we urge EPA to include as renewable biomass any autotrophic
microorganism used to create a renewable fuel from the biological capture and utilization of
carbon in waste gases that have already served a different primary purpose.
Carbon capture and utilization is recognized implicitly in the RFS through the inclusion of algae
as renewable biomass. EPA in previous rulemaking correctly included cyanobacteria (blue-green
algae). Scientific consistency and the statutory goals of the RFS call for inclusion of other
autotrophic microorganisms that perform the same set of biochemical transformations. Arbitrary
exclusion of such microorganisms would be inconsistent with basic principles of microbiology
and biotechnology, previous EPA interpretations, and the expressed intent of the Energy
Independence and Security Act of 2007 (EISA).
We are very supportive of expanding and diversifying low carbon alternatives to petroleum, and
we believe that EPA should clarify its interpretation of algae in a manner that is scientifically
justified, accommodating of emerging technological developments, and deferential to the
statutory intent of EISA. [EPA-HQ-OAR-2015-0111-1950-A1 p.l]
Advanced Biofuels Association (ABFA)
ABFA was encouraged to see the approval of a new photosynthetic pathway but is concerned
that the narrow application of definitions is limiting other viable technologies from garnering
their own pathways. The Union of Concerned Scientists has written a very well-reasoned
document which we encourage you to consider. It is not in the spirit or letter of the RFS2 authors
to deny one single cell organism because it's not an algae and then grant another which is. [EPA-
HQ-OAR-2015-0111-2498-A1 p.8]
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Algae Biomass Organization (ABO)
Specifically, EPA must reiterate in its final rule the Agency's commitment to interpreting the
term "algae" broadly in the context of the RFS. We concur with EPA's assertion that a broad
interpretation of "algae" furthers the purposes of the authorizing statute 1 and urge EPA to
include as renewable biomass - in addition to all microalgae and macroalgae - any autotrophic
microorganism used to create a renewable fuel from the biological capture and utilization of
carbon in waste gases that have already served a different primary purpose. [EPA-HQ-OAR-
2015-0111-1951-Al,pp.l-2]
Carbon capture and utilization is recognized implicitly in the RFS through the inclusion of algae
as renewable biomass. EPA in previous rulemaking correctly included cyanobacteria (blue-green
algae). Scientific consistency and the statutory goals of the RFS call for inclusion of other
autotrophic microorganisms that perform the same set of biochemical transformations. Arbitrary
exclusion of such microorganisms would be inconsistent with basic principles of microbiology
and biotechnology, previous EPA interpretations, and the expressed intent of the Energy
Independence and Security Act of 2007 (EISA). [EPA-HQ-OAR-2015-0111-1951-A1, p.2]
By converting industrial sources of CO2 to advanced biofuels, algae and similar carbon-
converting organisms offer an unprecedented opportunity to transform CO2 emissions from
environmental challenge to economic opportunity. It's time that federal policy fully embraced
this opportunity. [EPA-HQ-OAR-2015-0111-1951-A1, p.2]
The Proposed Rule offers an important first step toward restoring the investment climate for
algae based and other advanced biofuels. Additional actions outlined in these comments would
provide important additional market confidence for algae-based fuel developers. [EPA-HQ-
OAR-2015-0111-1951-A1, p.2]
American Council on Renewable Energy (ACORE)
One advanced biofuel company, which has so far been hamstrung by definitions, uses the
fermentation of industrial waste gases to produce ethanol. For this particular company, their non-
photosynthetic microorganism is not considered a viable biofuel pathway under the RFS. From a
biological point of view, some viable and non-viable microorganisms are so closely related that
such stringent categorizations do not make sense. Regulatory acceptance of novel processes such
as this can serve to keep jobs in the U.S and realize increased supply, energy independence, and
energy security, all while maximizing GHG reductions. As we continue to move towards the
development of even more low-GHG alternatives, it is imperative that such language does not
hinder further innovation. [EPA-HQ-OAR-2015-0111-1926-A1 p.15]
International Council on Clean Transportation (ICCT)
EPA's proposal to clarify that the existing RFS pathway for biofuels from algal oils applies only
to photosynthetically grown algae is consistent with the basis of the algal oil pathway analysis.
[EPA-HQ-OAR-2015-0111-1923-A1 p.9]
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LanzaTech, Inc.
For the purposes of the term "algae" listed in EISA, and as EPA now recognizes, it is relevant
only that a microorganism is autotrophic, because the resulting renewable biomass will be made
up of organic carbon derived from inorganic sources. How the conversion from inorganic to
organic biomass carbon is powered is irrelevant in determining whether the resulting biomass is
renewable. [EPA-HQ-OAR-2015-0111-2038-A1 p.5]
We have concerns that proposing a new definition is overregulating, duplicative, and regressive
from previous EPA positions regarding diatoms and cyanobacteria. [EPA-HQ-OAR-2015-0111-
2038-A1 p.5]
We see no reason to further limit the definition in this rulemaking. [EPA-HQ-OAR-2015-0111-
2038-A1 p.6]
EPA should clarify that the term "algae" in EISA broadly includes all autotrophic
microorganisms—not just cyanobacteria and diatoms; otherwise, certain advanced biofuels
technologies would be prevented from qualifying under the RFS, while others with the same
inputs and outputs would be permitted. [EPA-HQ-OAR-2015-0111-2038-A1 p.6]
C. auto is an autotroph that can use inorganic carbon from industrial waste emissions as the sole
source of carbon to grow biomass and can use simple gaseous substrates to build complex
molecules.12 In other words, C. auto is just like those other autotrophs (i.e., algae and
cyanobacteria), but it processes energy more efficiently and in a more environmentally friendly
manner, eliminating the need to provide significant land for exposure to the sun as a source of
energy to grow biomass and produce fuels.13 [EPA-HQ-OAR-2015-0111-2038-A1 p.6]
EPA should interpret RFS in a manner consistent with that broad recognition of microorganisms
[EPA-HQ-OAR-2015-0111-2038-A1 p.7]
1 9
Photosynthetic organisms use energy from light to store chemical energy in the form of
complex molecules. C. auto uses the waste chemical energy from the reaction of O2 with the
carbon in steel and transforms it into chemical energy in the form of complex molecules. This
chemical energy is not fossil energy, and the LanzaTech process is significantly more efficient
than photosynthesis.
13 The LanzaTech renewable fuel process has little to no impact on land use, while processes
relying on cyanobacteria or algae often require extensive land areas. The total land required for
end-to-end production of the LanzaTech biofuel is a few acres, depending on plant size and
existing wastewater treatment, co-located on industrial property. This enables production rates in
the millions of annual gallons per acre, which compares favorably with projections for
commercial-scale algal/cyanobacteria-based biofuels of 8,000 annual gallons per acre
(http://www.algenol.com/commercialization/globally-competitive).
Renewable Energy Group, Inc. (REG)
REG supports this regulatory clarification. This information has been provided as informal
guidance to the industry in the past, updating the regulations to include this guidance benefits the
renewable fuel community. [EPA-HQ-OAR-2015-0111-1952-A1 p.5]
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Solazyme Inc.
As a company that supplies biofuel made from algae grown non-photosynthetically, Solazyme
already understood that the lifecycle assessment of our process yields a different GHG emissions
value than algae grown photosynthetically. However, we do not understand why the EPA is
choosing to focus on the conversion microbe as the microbe is simply the conversion technology.
We request that the EPA focus on the lifecycle assessment of the carbon and energy sources for
the microbes as it has done in all other cases. For instance, yeast convert sugar to ethanol just as
the non-photosynthetic microalgae that Solazyme uses convert sugar into oil (i.e., fuel
feedstock). In the case of ethanol, the lifecycle assessment is focused on the sugar source, and
not the yeast.
The clarification in Section VI(A) is made more confusing by the fact that it does not mention
the multiple non-photosynthetic, non-heterotrophic conversion microbes that are in use today.
Will these microbes be treated differently as well, or will they be covered in a subsequent
revision? We would like these questions to be addressed in order to prevent inconsistent
application of the EPA's rules without scientific basis, potentially denying innovative and clean
renewable fuel sources from coming to market. This would be very unfortunate as many of these
sources have been supported through federal programs to promote domestic development of fuel.
[EPA-HQ-OAR-2015-0111-2497-A1 p.2]
Union of Concerned Scientists; Natural Resources Defense Council; National Wildlife
Federation
These comments narrowly focus on a very specific issue of mutual interest and agreement
relating to EPA's proposal to clarify that the existing RFS pathway for biofuels from algal oil
applies only to algae grown photosynthetically. While we understand this clarification as it
pertains to the distinction between autotrophic and heterotrophic algae needed to establish the
boundary conditions for lifecycle GHG analyses1, we do not believe this distinction is necessary
to better understand EPA's interpretation of algae as renewable biomass. We are concerned that
EPA's proposed clarifications overlook the more important issue of allowing an unnecessarily
narrow interpretation of "algae" to exclude, from the RFS program, some important and
promising biofuel processes that make use of carbon captured from waste gases. [EPA-HQ-
OAR-2015-0111-2477-A1 p.l]
This coalition supports and works to advance low carbon renewable fuel technologies and
development in order to decrease our reliance on fossil fuels and to reduce GHG emissions.
Substantial environmental benefits could be realized by establishing biofuel pathways that
minimize agricultural and land use footprints by capturing and using carbon from waste gases as
bioprocess inputs. We know that the RFS was conceived of in part to promote such low carbon
renewable fuel pathways, and we want to make sure that all of the most promising biofuel
technologies can both contribute to a low-carbon future and qualify for inclusion in the RFS
program. EPA should adopt a flexible and inclusive approach to these highly technical issues
that expands rather than constricts the available pathways to develop low carbon fuel
technologies. [EPA-HQ-OAR-2015-0111-2477-A1 p.1-2]
The Energy Independence and Security Act of 2007 (EISA) specifies renewable biomass to
include "algae", but it does not limit the applicability of the Act to only algae, and it does not
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define this term, which allows EPA to interpret its meaning. Since its passage, several pathways
for making low carbon renewable fuels have emerged which would clearly fit within both the
Congressional intent of EISA and the interpretation of algae made by EPA to date, but EPA has
not yet approved any microbial biofuel pathways that capture inorganic carbon from waste gases
to produce biofuel that do not derive any of their process energy from a photosynthetic step. This
is an important omission in the eyes of both the biotechnology and environmental communities.
We urge EPA to clarify that the RFS can accommodate biofuel pathways that are both non-
photosynthetic and non-heterotrophic. [EPA-HQ-OAR-2015-0111-2477-A1 p.2]
EISA implicitly recognized bioprocesses that capture and use carbon from waste gases by
including algae as a category of renewable biomass. The term was not intended by Congress to
be literally and exclusively applied, and it should be interpreted broadly to allow all biofuel
technologies that perform similar functions to be considered for inclusion in the RFS program.
Indeed, EPA has already agreed with this in part, since it has previously interpreted algae to
include photosynthetic bacteria, which are not literally "algae", but, like algae, they capture and
use inorganic carbon to generate biomass via photosynthesis2. In fact, EPA has even approved a
RFS pathway that uses photosynthetic bacteria to produce biofuel3. We support EPA's flexible
approach in this area, and encourage EPA to extend this flexibility to other bioprocesses that
capture and use inorganic carbon to produce organic biofuels via non-photosynthetic routes.
Beyond listing the term "algae", EISA says nothing about this form of renewable biomass, and
there is not a strong scientific justification to create additional distinctions based on a select set
of biological attributes that exclude certain types of biofuel technologies. [EPA-HQ-OAR-2015-
0111-2477-A1 p.2]
Although EPA indicated in its proposal that it intends to consider petitions for algae pathways
"grown with a non-photosynthetic stage of growth"4, this clarification is confusing because all
non-photosynthetic algae are also heterotrophic, meaning that they do not derive their biomass
from inorganic carbon. One common and essential feature among the listed forms of renewable
biomass in EISA is that they represent the initial source for organic biomass in the carbon cycle.
The distinction between heterotrophic algae and photosynthetic algae is not relevant to
understand EPA's interpretation of the term "algae" as "renewable biomass." We encourage
EPA to indicate that it intends to extend its interpretation of algae, which currently includes
photosynthetic bacteria, to also include appropriate biofuel pathways that use non-photosynthetic
microorganisms to capture and use inorganic waste gases as well. Ultimately, these are the
clarifications needed to understand EPA's interpretation of "algae". [EPA-HQ-OAR-2015-0111-
2477-A1 p.2-3]
EPA should address the technical distinctions needed to understand its stance on this important
issue. We encourage EPA to adopt an inclusive and flexible approach that supports as many
pathways to clean low carbon fuels as possible. Combined with the lifecycle assessment
provisions of the RFS, this approach will foster research and innovation and ensure that the
policy maximizes the opportunity to cut fossil oil use and carbon emissions from the
transportation sector. We urge EPA to make the needed clarifications in its final rule to allow all
of the applicable "algae" biofuel pathways to be included in the RFS program. [EPA-HQ-OAR-
2015-01 ll-2477-Alp.3]
We appreciate that EPA has invited comment on its proposed changes to its interpretation of
algae. Our reasons for writing these comments are environmental, technical, procedural, and
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statutory. We have detailed these points in an addendum to this letter. We hope that EPA's final
interpretation will resolve the issues we have outlined in a scientifically sound manner that builds
on earlier EPA interpretations and the goals of EISA. [EPA-HQ-OAR-2015-0111-2477-A1 p.3]
[The addendum to this letter can be found on p. 4-10 of docket number EPA-HQ-OAR-2015-
0111-2477-A1]
1 Autotrophic and heterotrophic refers to whether a microorganism uses inorganic or organic
carbon to generate biomass. Autotrophic microorganisms generate organic compounds and
biomass from inorganic gases such as CO2 and CO. Heterotrophic microorganisms generate
biomass by breaking down organic compounds such as sugars.
2 Bacteria and algae are different types of microorganisms categorized into two distinct
biological kingdoms; they are prokaryotic and eukaryotic respectively.
3 "Algenol Biofuels Request for Fuel Pathway Determination under the RFS Program". EPA
OTAQ. December 2014.
4 80 Fed. Reg. Ill, p. 33148. June 10,2015
Response:
EPA appreciates these comments and recognizes that there are other algal oil pathway
configurations in addition to those currently approved. EPA received several comments in
support of the regulatory clarifications related to the production of biofuel using algae, citing
consistency with algal oil pathway analysis. EPA also received comments advocating that the
agency take steps to explain additional related issues. Some commenters expressed concern that
the current algae renewable fuel pathways are too narrow and have the effect of limiting other
technologies. Specifically, commenters stated that the agency should extend its interpretation to
clarify that the term "algae" as used in the Energy Information and Security Act (EISA) includes
all autotrophic microorganisms. Commenters provided a series of detailed technical comments
on the microbiology of autotrophic microorganisms. Commenters asserted that the carbon source
used by these organisms to produce organic carbon further justified their inclusion in the
Renewable Fuel Standard (RFS), and that their inclusion would be consistent with previous
application of the RFS program. Some commenters supported EPA's decision to not propose a
regulatory definition for algae, but urged a more flexible and inclusive approach. According to
commenters, such an approach would provide environmental benefits, foster research and
development of new technologies, and align with the statutory intent of EISA.
In this action EPA did not propose or seek comment on a regulatory definition for algae. Rather,
this rulemaking is limited to specific regulatory clarifications regarding currently approved
pathways. Specifically, we are finalizing the proposed replacement of "algal oil" as a feedstock
in Table 1 to 40 CFR 80.1426 with "oil from algae grown photosynthetically." We are also
finalizing the proposed definition for "algae grown photosynthetically" to 40 CFR 80.1401.
Comments regarding other interpretations and pathway configurations are outside the scope of
this rulemaking. The regulatory clarifications finalized in this rulemaking should not be
interpreted as intended to discourage pathway petitions of other algae-derived renewable
fuels. Rather, companies that wish to produce biofuels from algae grown with a non-
photosynthetic stage of growth should apply to EPA for approval of their pathway pursuant to
the pathway petition process outlined at 40 CFR 80.1416.
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9.2 Deadlines for Compliance Demonstrations and Attest Engagements
Comment:
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
We support EPA's intent not to require the 2013 RFS compliance report until after the 2014 RFS
rule is promulgated. We also support the Agency's proposal to stagger these dates. [EPA-HQ-
OAR-2015-0111-1948-A1 p.27]
This proposed schedule does not conflict with the March 31, 2017 date for submission of the
RFS compliance report for 2016 (per 80.1451(a)(l)). However, the proposed date for the attest
engagement report for the 2015 RFS for obligated parties (June 1, 2017) conflicts with the date
for the attest engagement report for the 2016 RFS (June 1, 2017, per 80.1464(d)). [EPA-HQ-
OAR-2015-0111-1948-A1 p.27]
In order to ensure an accurate assessment of carryover RINs ahead of the 2017 RFS standards
rulemaking process, AFPM and API recommend a faster schedule. Obligated parties do not need
five or six months between the compliance and attest engagement reports. In addition, obligated
parties do not need five to six months between compliance reports for the 2014 and 2015 RFS
compliance periods. [EPA-HQ-OAR-2015-0111-1948-A1 p.27]
Presuming the issuance of final standards by November 30, we suggest the following schedule:
RFS
Compliance
Period RFS Compliance Reports RFS Attest Engagements
2013 February 1,2016 March 31,2016
2014 March 31,2016 June 1,2016
2015 June 1,2016 August 1,2016
Our recommendation would maintain the staggered schedule and complete these activities well
before the end of 2016, and avoid any conflict for submitting RFS reports for the 2016
compliance period in 2017. [EPA-HQ-OAR-2015-0111-1948-A1 p.27]
Biotechnology Industry Organization
EPA must avoid unnecessarily extending compliance deadlines, which can further destabilize the
program, and which could in some circumstances exceed EPA's legal authority. EPA must also
take care to avoid approving compliance deadline extensions that adversely affect the value of
RINs, undermining the incentives that are essential to the success of the program as Congress
designed it. [EPA-HQ-OAR-2015-0111-1958-A2 p. 28]
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BP America (BP)
BP supports EPA's intent not to require the 2013 RFS compliance report until after the 2014 RFS
rule is promulgated and its intent to stagger compliance report deadlines throughout 2016. BP is
aligned with API/AFPM's recommendation to expedite the Compliance Report schedule as
depicted below. [EPA-HQ-OAR-2015-0111-1935-A1 p. 1]
In addition to the expedited compliance schedule, BP also recommends that a single attest
engagement report deadline of 1 August 2016 be set for the 2013, 2014 and 2015 compliance
periods. Such an approach would promote simplicity and reduce the costs of compliance by
requiring Obligated Parties to meet with the selected attest auditor only once to complete all 3
years of attest engagements. [EPA-HQ-OAR-2015-0111-1935-A1 p. 1]
Clean Energy Renewables
For instance, OPs have until December 2016 to show compliance for 2015 obligations. This
delay creates cash flow problems for renewable fuel providers. We recommend EPA accelerate
the compliance deadline. [EPA-HQ-OAR-2015-0111-1908-A1 p.8]
Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
The Merchant Refiners Group Supports the Timetable Proposed by EPA for Demonstrating
Compliance for 2013-15.
EPA has proposed "that compliance demonstration reports for obligated parties be submitted no
later than January 31, 2016 for the 2013 compliance year, June 1, 2016 for the 2014 compliance
year, and December 1, 2016 for the 2015 compliance year. Associated attest engagement reports
would be due no later than June 1, 2016 for the 2013 compliance year, December 1, 2016 for the
2014 compliance year, and June 1, 2017 for the 2015 compliance year." The Merchant Refiners
Group supports EPA's proposed timeline for demonstrating compliance and agrees with EPA
that "this sequencing of reports, and the time allowed between them will allow obligated parties
to proceed in a logical and orderly fashion to submit required reports, with sufficient intervening
time so as not to pose an unreasonable burden." A more compressed timeline could adversely
impact the RIN market and result in price volatility. [EPA-HQ-OAR-2015-0111-2603-A2,
pp.39-40]
Renewable Energy Group, Inc. (REG)
EPA also proposed changes to the annual compliance report and attest engagement deadlines
under the RFS program. While REG is only required to submit the attest engagement on an
annual basis, we support these updated reporting deadlines for both reports. EPA will benefit
from having this reported information in a timely manner so they can properly implement the
RFS program. [EPA-HQ-OAR-2015-0111-1952-A1 p.5]
Response:
Commenters on the proposed due dates for the 2013, 2014, and 2015 RFS compliance and attest
engagement reports generally supported the EPA's approach to staggering the deadlines.
However, some commenters argued that EPA should not unnecessarily extend the compliance
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reporting deadlines and should even accelerate compliance deadlines. These commenters argued
that unnecessarily extending the deadlines could have an adverse impact on the RFS program
and RIN prices. On the other hand, a commenter argued that a more compressed compliance
deadline timeline could adversely impact the RIN market.
While we recognize the concerns raised, due to constraints on the EPA's reporting systems and
staff, we are unable to accommodate a faster compliance reporting schedule. Additionally, we
have concerns that obligated parties may have difficulty complying with a more compressed RFS
reporting schedule. Obligated parties have several other EPA fuel programs registration and
reporting requirements that become effective in 2016 and 2017. These requirements were
primarily finalized in the Tier 3 rulemaking and include the registration of all oxygenate blenders
(e.g., terminals), the submission of applications for test methods under the Performance Based
Analytical Test Method program, and compliance with the new Tier 3 sulfur standards.
The EPA also received comments concerning obligated parties' attest reporting deadline. One
commenter noted, the time between the deadline for 2015 RFS attest engagement reports for
obligated parties conflicts with 2016 RFS compliance and attest reporting deadlines for obligated
parties. The commenter argued that obligated parties rely upon the results of the prior
compliance year's attest engagement reports to correct vital information that is needed to
accurately determine an obligated party's RVO and RIN balance. Since the proposed deadlines
for 2015 attest engagement reporting occurred after the 2016 compliance reporting deadline,
obligated parties would have been unable to utilize the 2015 attest engagement report to ensure
timely, accurate 2016 compliance reports. The result of this conflict would have been the
unnecessary resubmission of 2016 compliance reports by obligated parties to address issues
identified in the 2015 attest engagement reports. Additionally, certified public accountants
(CPAs) and certified internal auditors (CIAs) would not have been able to rely upon the 2015
attest engagement report for the 2016 attest engagement procedures since the proposed deadlines
for 2015 and 2016 attest engagements reports were the same. The commenter noted that six
months was too much time between the 2014 and 2015 compliance reporting deadlines for
obligated parties. (It should also be noted that the proposed 2014 and 2015 RFS compliance
deadlines for obligated parties is only five months apart, not six months.)
Concerning obligated parties' attest reporting deadlines, we believe we can move forward the
2015 RFS attest reporting deadline for obligated parties to more appropriately sequence 2015
and 2016 compliance and attest engagement reporting deadlines. However, we recognize that
there are a limited number of CPAs and CIAs that conduct most of the attest engagement
reporting across all of EPA's fuels programs for obligated parties. We are concerned that these
CPAs and CIAs would become overburdened if we compressed the attest reporting deadlines too
much. Although we value the timely submission of information, we believe compressing the
2013 and 2014 attest engagement deadlines would unnecessarily increase compliance costs for
many obligated parties.
Another commenter requested that the EPA establish a single reporting deadline for obligated
parties' attest engagement reporting deadlines of August 1, 2016 for the 2013, 2014, and 2015
compliance years. The commenter noted that a single attest engagement reporting deadline
would be simpler and reduce compliance costs for obligated parties. For reasons discussed
above, we believe that it is important to stagger the attest engagement reporting deadlines.
Specifically, parties rely upon prior attest engagement reports to ensure that accurate information
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is reported to the EPA in subsequent compliance reports. We believe that having all attest
engagement reports for 2013, 2014, and 2015 due at the same time would result in the
unnecessary resubmission of corrected compliance reports for those years negating potential
savings from having a single attest engagement reporting deadline.
Therefore, for obligated parties, we are finalizing the 2013 and 2014 attest engagement reporting
deadlines as proposed. We are changing the 2015 attest engagement reporting deadline for
obligated parties from June 1, 2017 to March 1, 2017. We believe this helps address comments
concerned with having the 2015 and 2016 RFS attest engagement reporting deadlines fall on the
same day and should allow obligated parties some time to adjust 2016 compliance reports based
on issues identified in the 2015 attest engagement report.
For reasons discussed in Section VLB of the final rule, for purposes of the final rule the EPA
modified the proposed changes to a number of compliance and attest engagement reporting
deadlines. The revised annual compliance and attest reporting deadlines for all regulated party
categories for the 2013, 2014, and 2015 compliance years are shown in Table VI.B-1 in the final
rule. For the 2016 and subsequent compliance years, the deadlines will be back on track with
annual compliance demonstration reports due March 31 and attest engagement reports due June
1 of the year following the compliance year.
Some of the topics raised in comments in this section are addressed in more detail elsewhere.
See the following:
Section 2.3.1: Congressional Intent to Increase Volumes
Section 6.1: General Comments on Treatment of Carryover RINs
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10. Other Comments
10.1 Outlook for 2017 and Beyond
Comment:
Abengoa Bioenergy
EPA's proposal of volumes that would appear to trigger the (7)(F) waiver has been remarked on
by investment analysts. Commenters during the interagency review of a draft of the current
proposed rule under executive orders 12866 and 13563 also noted 'that if the volumes proposed
in the NPRM become final, it will trigger the mandatory reevaluation of the Advanced Biofuels
volumes in 2016.'3 EPA has been publicly encouraged by oil refiners to set the annual RVOs at
levels that would trigger a potential (7)(F) rewrite.' EPA failed to analyze the availability of
RINs and other relevant factors in choosing the proposed volumes; for this and other reasons,
BIO and its members are concerned that the Agency has arbitrarily and impermissibly selected
the volumes in such a way as to trigger, at least potentially, the (7)(F) waiver.
In addition, it need hardly be said that triggering the (7)(F) waiver cannot be a permissible
justification or reason for reducing volume obligations under either the statutory provision
governing the cellulosic waiver authority or the statutory provision governing the general waiver
authority. A desire or intention to trigger the (7)(F) waiver simply is not relevant to the legal
criteria for triggering either of these statutory provisions.
2 See, e.g., T. Cheung et al., Senate Takes a Crack at RFS Reform, ClearView Energy Partners
(June 18, 2015).
3Summary of Interagency Working Comments on Draft Language under EO 12866 Interagency
Review. EPA-HQ-OAR-2015-0111-0043, attachment 6 (May 18, 2015).
4 Statement of Robert Anderson, Chevron USA, at Public Hearing for the 2014, 2015, and for the
Renewable Fuel Standard Program. Kansas City, KS, June 25, 2015. 80 Fed. Reg. 2015).
Advanced Biofuels Association (ABFA)
Uncertainty in the targets for cellulosic biofuels after 2022 will have an adverse impact on the
ability of project sponsors to raise funding. The upcoming reset of the RFS mandates provides an
opportunity to increase certainty to 2022 and beyond. Upon waiving any particular RFS mandate
category by 50 percent in any single year or 20 percent in any two consecutive years, EPA is
required to conduct a rulemaking to adjust the overall schedule of the RFS mandates through
2022. EPA tripped the 50% trigger for the cellulosic category in 2010. Now, if EPA finalizes the
volumes as proposed, the 20% trigger will be tripped for both the advanced and general
renewable fuel categories.
This opens the door to reset all of the mandated volumes. EPA should move forward with this
rulemaking expeditiously to provide certainty for investors in cellulosic biofuels by setting the
cellulosic volumes through 2022 and beyond at realistically achievable levels. At the same time,
EPA should adjust the advanced and general renewable categories in such a way that the
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greenhouse gas emission benefits of the program are maximized while at the same time ensuring
that the overall mandates are consistent with the capabilities of infrastructure and vehicles.
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
EPA must finalize the reset volumes by November 30, 2016.
Biotechnology Industry Organization
Triggering the (7)(F) waiver for advanced biofuel volumes and total renewable fuel volumes is
unnecessary and inappropriate in 2015 and 2016. For all the reasons discussed in these
comments, a proper calculation of available domestic supply of renewable fuels shows that either
no waiver at all, or a substantially smaller waiver - at most - of advanced biofuel and total
renewable fuel volumes is all that is needed for 2015 and 2016.
Biotechnology Industry Organization
EPA failed to analyze the availability of RINs and other relevant factors in choosing the
proposed volumes; for this and other reasons, BIO and its members are concerned that the
agency has arbitrarily and impermissibly selected the volumes in such a way as to trigger, at least
potentially, the (7)(F) waiver.
Brazilian Sugarcane Industry Association (UNICA)
(I)n view of the statutory reset provisions, EPA should ensure that the reductions of advanced
biofuels and total renewable fuels do not reach 20 percent, at least after 2014.
UNICA is particularly concerned with the fact that the 2014, 2015 and 2016 proposed volumes
for advanced biofuel fall below 20 percent, as this may potentially lead to a statutory reset in
2017 and beyond for those categories lowered below the 20 percent threshold under section
21 l(o)(7)(F). Hence, the reductions EPA claims are necessary could have far-reaching and long-
term implications for the entire RFS2 program. The same is true for the proposed 2015 and 2016
volumes for total renewable fuels. EPA's ultimate intent with regard to the reset is unclear.
Indeed, EPA fails to discuss the reset or its implications anywhere in the Proposed Rule nor how
broadly it views its authority to reset other renewable fuel volumes. But the implications of these
volumetric discounts are critical to the entities functioning within the RFS program, and raise
significant uncertainties which can adversely impact the market for advanced biofuels. As
described above, this uncertainly can further limit the growth in production and use of advanced
biofuels such as sugarcane ethanol, making the inadequacy of supply a self-fulfilling prophesy.
At the very least, EPA should explain its understanding as the reset provisions and its current
intentions with regard to future volume requirements. The better route would be to keep volumes
above the 20 percent threshold and so obviate the concern.
Butamax Advanced Biofuels, LLC
This impact is further magnified by the §21 l(o)(7)(F) reset of RFS volume requirements which
would be triggered if EPA were to implement the 2014, 2015 and 2016 volume requirements as
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currently proposed. The uncertainty which this action causes can reasonably be expected to cause
the pace of investment in Advanced Biofuels to dramatically slow.
Chevron
The volumes proposed by EPA for the advanced biofuel and total renewable fuel standards result
in percentages that exceed 20 percent in two consecutive years. These waiver volumes would
trigger the statutory reset provision. Chevron supports EPA's intention to activate this reset
mechanism and encourages EPA to develop long-term RFS standards that are achievable for the
market and don't exceed the blend wall.
Clean Air Task Force
EPA must make adjustments to the annual volume requirements in accordance with a multi-
criteria analysis that Congress detailed at Clean Air Act sections 21 l(o)(7)(F) and
EPA is legally obligated to "promulgate a rule ... that modifies the applicable volumes [i.e., for
cellulosic biofuels, advanced biofuels, and total renewable fuel]" for 2016 and 2017, based on an
assessment of the criteria set forth in section 21 l(o)(2)(B)(ii). In the proposal, however, EPA
makes no mentioned of this obligation. Instead, the Agency indicates that it plans "to use both
the cellulosic biofuel waiver authority and the general waiver authority waiver" — rather than the
reset provision in section 21 l(o)(7)(F).
DuPont
EPA has proposed values for all three categories of fuel that exceed the 20% threshold for two
years that would trigger a subsequent rulemaking to modify the statutory biofuels volumes.
Growth Energy
In fact, there is a strong basis to conclude that EPA specifically and improperly set the proposed
2015 and 2016 renewable fuel volume requirements in order to trigger its reset authority. Not
only are those volumes remarkably close to the trigger threshold, but also EPA's Acting
Administrator for Air and Radiation, testifying before Congress shortly after the proposal was
issued, explained that "[w]e actually think it makes a lot of sense to focus a reset on all volumes
at one time."5
EPA's proposed renewable fuel volume requirements appear to have been calibrated to enable
EPA to trigger its "reset" authority so that EPA could continue to stifle growth in the long term,
oo
rather than to pursue the goals of the statute, which would render its proposal unlawful.
EPA would then have substantial autonomy to set new volume requirements as it sees fit,
without having to justify invocation of the general waiver authority, and subject only to the six
pliable factors laid out in Section 7545(o)(2)(B)(ii). In addition, EPA would potentially be able
to avoid having to annually go through the process of setting volume requirements, an obligation
that has clearly presented significant challenges for the agency.
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Although EPA never mentions the reset power in its proposal, the fact that the proposal would
trigger the reset power appears to have been deliberate. Just a few weeks after the proposal was
issued, EPA Acting Administrator for Air and Radiation Janet McCabe testified to Congress that
"we actually think it makes a lot of sense to focus a reset on all volumes at one time."91
5 Testimony of Janet McCabe, EPA Acting Administrator for Air and Radiation, before
Committee of the U.S. Senate on Homeland Security and Government Affairs, Subcommittee on
Regulatory Affairs and Federal Management, at 23 (June 18, 2015), at
http://www.cq.com/doc/fmancialtranscripts-4711934? 6&search=lE4v24rR.
88 See Michigan v. EPA, No. 14-46, slip op. at 5 (U.S. June 29, 2015) ("[A]gency action is lawful
only if it rests 'on a consideration of the relevant factors." (quotingMotor Vehicle Mfrs. Ass'n of
United States, Inc. v. State FarmMut. Auto. Ins. Co., 463 U.S. 29, 43 (1983)).
91 Testimony of Janet McCabe, supra note 5, at 21 (June 18, 2015) (emphasis added), at
http://www.cq.com/doc/fmancialtranscripts-4711934? 6&search=lE4v24rR.
Independent Fuel Terminal Operators Association (IFTOA)
EPA may believe it should set future mandates at high levels so as to compel the market to make
dramatic changes, but such changes are also likely to cause great economic harm to consumers
and the economy. The potential for these adverse effects must be taken into consideration by the
Agency. While it may be appropriate for EPA to establish the mandates at levels that encourage
somewhat greater production and use of renewable fuels than the market would achieve in the
absence of such mandates, there is nothing that compels EPA — when exercising its waiver
authority — to establish aspirational or ambitious mandates.
The U.S. energy picture has changed dramatically since the Program was initially established.
The Energy Information Administration now predicts declining gasoline demand for the
foreseeable future, and due to lower energy content and corresponding additional costs,
consumers resist using fuels with higher concentrations of ethanol (E85). The authorizing statute
gives EPA substantial authority to adjust the mandates in light of these changed circumstances.
VII. "Reset" Provision
As stated above, EPA appears to have taken a new approach to the RFS mandates. It will fully
recognize market constraints for 2014 and part of 2015, waive a portion of the statutory volumes,
and set the mandates at levels that promote growth in renewable fuels — more than would be
achieved without the mandates — but still at achievable levels. However; for the future, it will
establish far more ambitious targets. In the Preamble to the proposed rule, EPA says:
"While we are proposing to use the tools Congress provided to make adjustments to the law's
volume targets in recognition of the constraints that exist today, we are proposing standards for
2015 and 2016 that will drive growth in renewable fuels, particularly those fuels that are required
to achieve the lowest lifecycle GHG emissions. We believe that over time, use of both higher
ethanol blends and non-ethanol biofuels can and will increase, consistent with Congress' intent
in enacting the Energy Policy Act and the Energy Independence and Security Act. In our view,
while Congress recognized that supply challenges may exist as evidenced by the various waiver
provisions, it did not intend growth in the renewable fuels market to be ultimately prevented by
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those challenges, including such constraints as the 'E10 blendwall' or demand for gasoline or
diesel. The fact that Congress chose to mandate increasing and substantial amounts of renewable
fuel clearly signals that it intended the RFS program to create incentives to increase renewable
fuel supplies and overcome limitations in the market. The standards we are proposing are
forward-leaning and reflect those incentives."
We believe that this interpretation of the statute is incorrect. It is clear that Congress wanted to
increase the use of renewable fuels in the transportation pool, but when it enacted the mandates,
it was unaware of significant market constraints/limitations - e.g. the 'E10 blendwall,' and the
substantially reduced demand for gasoline. It did not intend for growth in renewable fuels to
"overcome those challenges." It did not know that such challenges existed. Congress and
everyone else, industry and consumers, assumed there would be continued, uninterrupted
economic growth and continued expansion in the demand for gasoline. Therefore, EPA should
adopt an approach for the future that promotes growth in the production and use of renewable
fuels, but does so in a more limited manner than seems to be its current plan. As the Agency
goes forward, the mandates should not be ambitious. They should promote some growth - more
than the market would do in the absence of a regulatory mandate - but still within ranges that
recognize market constraints/limitations and are achievable.
The "reset" provision of the RFS Program states that if the Administrator waives (i) at least 20
percent of the applicable volume requirement for two consecutive years; or (ii) at least 50
percent of such volume requirement for a single year, the Administrator shall promulgate a rule
that modifies the applicable volumes in the statute for all the years following the final year to
which the waiver applies. In doing so, the Administrator must coordinate with the Secretaries of
Agriculture and Energy and analyze and consider -
a. The impact of the production and use of renewable fuels on the environment;
b. The impact on energy security;
c. The expected annual rate of future commercial production of renewable fuels;
d. The impact of renewable fuels on U.S. infrastructure, including deliverability of products
other than renewable fuels and sufficiency of infrastructure to deliver and use renewable fuels;
e. The impact of use of renewable fuels on the cost to consumers of transportation fuel and on
the cost to transport goods; and
f The impact of the use of renewable fuels on other factors, including job creation, the price
and supply of agricultural commodities, rural economic development, and food prices.
Simply stated, while Congress was not aware of the E10 blendwall and did not anticipate a
dramatic decrease in the demand for gasoline when it set the mandates, it did recognize that
circumstances change. It provided ample authority for the Agency to analyze and consider
significant factors and to reset all of the mandatory volumes if certain conditions are met.
Indeed, in recent testimony before the Senate Committee on Homeland Security and Government
Affairs, EPA acknowledged that the circumstances supporting a "reset" are likely to exist, and
said "we actually think that it makes a lot of sense to focus a reset on all volumes at one time and
you just will provide a lot more certainty to everybody to do that." Therefore, the Agency is not
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caught in a position where it must set the renewable fuel mandates at such levels that it
dramatically changes how transportation fuels are sold and substantially raises the prices of these
commodities at the pump. It has the authority to start anew with a more modest approach,
balance the enumerated factors set forth by Congress, and establish future mandates that are (1)
realistic, recognizing market constraints, and (2) promote moderate growth in the production and
use of renewable fuels.
Recommendation: For 2017 and beyond, the EPA should exercise its authority under the reset
provision of the RFS Program, 42 USC 7545(o)(7)(F), and establish more modest and achievable
RFS mandates.
Specifically, the Association recommends the following:
2. For the future — beyond 2016 — EPA should not establish ambitious mandates that are
designed to create dramatic changes in the market. Rather, the Agency should, using its "reset"
authority, take a more modest approach and continue to balance market conditions/limitations
and incentives for renewable fuel growth.
National Corn Growers Association (NCGA)
EPA conspicuously proposes to set the RFS levels at almost precisely the levels necessary to
trigger its reset authority for 2017, the first year it could be triggered.
Office of the Lt. Governor, Indianapolis, Indiana
Furthermore, I urge you to establish volume requirements beyond 2016 so that business
investment decisions can be made with a longer time horizon.
Shell Oil Products US
EPA is required to conduct a rulemaking to adjust the overall schedule of the RFS mandates
through 2022.
Union of Concerned Scientists
Our specific recommendations include:
• Initiate a rulemaking to update the standards from 2017 to 2022 or 2030. Initiate
rulemaking on cellulosic schedule update
As soon as possible upon finalizing the combined RVO, EPA should begin a rulemaking process
to reset the RFS mandate schedule for 2017 and beyond. EPA should include discussion of the
implications for cellulosic, advanced and renewable mandates in this rulemaking process. The
implausibility of the current mandate schedule, including the 16 billion gallon (Bgal) cellulosic
target for 2022 and the related 21 Bgal target for advanced and 36 Bgal target for renewable
fuels, creates a vacuum in the regulatory framework with implications that go beyond EPA's
administrative processes for the RFS. The associated uncertainty creates challenges for other
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federal agencies projecting the future of fuels and agricultural commodities, for market
participants in fuel production, distribution, and use, as well as for state governments pursuing
complimentary clean fuel policies and for international bodies such as the Food and Agriculture
Organization of the United Nations trying to project international trade in fuels and agricultural
commodities.
EPA should initiate an open and science-based rulemaking process, decoupled from the annual
rulemaking for volume obligations, to develop an ambitious but realistic schedule for cellulosic
biofuel growth over the coming years. At a minimum, the schedule should be updated through
2022, but alternatively, the EPA might approach the question of how long it will take to meet the
full 16 Bgal cellulosic target, thus looking out past 2022 to 2030 or beyond. Such a roadmap is
an important element of a comprehensive approach to climate policy that would complement the
clean power plan, vehicle efficiency standards, and other policies.
Such a rule should address the statutory requirement to update the cellulosic mandate schedule in
light of the consecutive waivers in years 2010 through 2016, and allow EPA to do the same for
advanced and overall mandates. A workable approach to the policy requires an analysis of the
impact of the policy in its entirety. The new compliance schedule and RVO criteria should be
based on a technical assessment of competing uses for agriculture products, constraints in the
vehicle and fueling infrastructure, and a detailed study of how mandate increases impact these
factors and land use change and carbon emissions.
This comprehensive proposed rulemaking should fully support the Congressionally-directed goal
of advancing the development of cellulosic biofuels that move beyond food as a feedstock while
minimizing competition with existing uses of agricultural feedstocks and the associated negative
impacts on food markets, land use change emissions. We recognize that such a rulemaking
would require a substantial amount of analysis, consultation with United States Department of
Agriculture and Department of Energy, stakeholders, and extensive public comment and
technical peer review. However, undertaking such a process sooner rather than later would
reduce the scope of analysis required for annual RVO rulemakings, reduce uncertainty and
provide clarity for all parties affected by RVOs, and would benefit the EPA by simplifying the
administrative burdens of the RVO process moving forward.
Union of Concerned Scientists (UCS), Clean Air Task Force, Environmental Working
Group, ActionAid USA, and National Wildlife Federation (NWF)
(We) urge the EPA to initiate a rulemaking, as soon as practical, to propose a revised compliance
schedule for the timeframe beyond 2015 and clarify the data and criteria that EPA will use to set
the Renewable Volume Obligation (RVO) in 2016-2022.
Such a rule should address the statutory requirement to update the cellulosic mandate schedule in
light of the consecutive waivers in years 2010 through 2016, and allow EPA to do the same for
advanced and overall mandates. A workable approach to the policy requires an analysis of the
impact of the policy in its entirety. The new compliance schedule and RVO criteria should be
based on a technical assessment of competing uses for agriculture products, constraints in the
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vehicle and fueling infrastructure, and a detailed study of how mandate increases impact these
factors and land use change and GHG emissions.
Undertaking such a process sooner rather than later would reduce the scope of analysis required
for annual RVO rulemakings, reduce uncertainty and provide clarity for all parties affected by
RVOs, and would benefit the EPA by simplifying the administrative burdens of the RVO process
moving forward.
A important outcome of the comprehensive rulemaking we are proposing would be to establish a
concrete basis for the RVO process that would ensure that this flexibility is exercised in a
manner that maximizes the benefits of the policy while minimizing negative impacts including
high and unstable commodity crop prices, land use change, conversion of grasslands,
deforestation both in the US and abroad, and associated GHG emissions and other impacts on
wildlife, water quality and biodiversity. This should include clarifying the conditions that must
be met before mandates can be enlarged beyond the minimum levels set by Congress by
requiring volumes originally specified as cellulosic to be met by non-cellulosic advanced
biofuels. EPA should evaluate the GHG, economic and other impacts of the policy under a
variety of different scenarios, and based on the findings propose the external factors that would
be used to make RVO determinations.
Response:
Almost all comments regarding the outlook for 2017 and beyond focused on the provisions of
section 21 l(o)(7)(F) of the CAA which provide for modifying the RFS volumes otherwise
specified in section 21 l(o)(2)(B) of the CAA, often referred to as the reset
provisions. Consistent with comments provided on the appropriate level of the 2014-16
standards, biofuel providers and related interest groups believed it would be inappropriate for
EPA to set the 2014-16 standards at levels that would trigger the reset provisions of section
21 l(o)(7)(F) of the CAA. Meanwhile petroleum interests supported lower standards for 2014-
16, standards that would also trigger the reset provisions. Some commenters suggested that EPA
might have proposed levels of the standards to deliberately cause the reset provisions to be
triggered. As discussed in detail in section II.B of the final rule, and elsewhere in this RTC
document, we do not believe that the statutory volumes for cellulosic biofuel, advanced biofuel,
and total renewable fuel can be met for all the years 2014-16 and we are waiving the statutory
volumes. As further discussed in detail in section II and IV of the final rule we are waiving the
total renewable standard only to the extent necessary, and are setting the advanced biofuel
standard to require use of reasonable attainable volumes. We have reached these decisions based
on the technical merits without regard to their resultant impact on triggering the reset provisions.
Others commented that it was important or necessary to complete a rulemaking in response to
the 21 l(o)(7)(F) triggering provisions. Some also suggested how EPA should go about setting
such standards. EPA intends to fulfill its requirements under 21 l(o)(7)(F) but would do so in a
separate rulemaking. EPA did not propose to exercise authority under section 21 l(o)(7)(F) and
considers comments about when or how to complete such a rulemaking, or other rulemakings
related to volumes applicable to 2017 or later, to be beyond the scope of this rulemaking.
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More generally, comments indicated the importance of setting the 2017 and later (and in one
case, the post-2022) standards soon so as to provide greater certainty to the biofuel market,
especially the evolving market for advanced biofuels. In establishing standards for 2014-2016 in
this final rule, EPA intends to get back on schedule in setting 2017 and future standards in a
timely fashion and believes that this will help provide additional certainty for investment in the
ongoing growth of renewable fuels.
We consider those comments stating that as part of the rationale for a reset rule, EPA should take
into consideration the commenter's view that Congress never intended the RFS program to
require renewable fuel volumes above the E10 blendwall to be beyond the scope of this
rulemaking.
10.2 Dates/Deadlines
Comment:
Advanced Biofuels Association (ABFA)
We would urge the Agency to move the deadline of setting the annual RVOs to March 1st of each
calendar year after actual use of renewable fuels is publicly known (e.g., the RVO for 2017
would be published on March 1, 2018). This will allow for the actual number of produced
gallons minus those gallons exported and those otherwise retired RINs to be fully accounted for
in the process of setting the RVOs for each of the obligation categories. [EPA-HQ-OAR-2015-
0111-2498-A1 p.4]
Response:
The statute requires EPA to set the volume of annual RVOs no later than November 30* of the
prior calendar year. See Clean Air Act 21 l(o)(3)(B)(i). Therefore, EPA is unable to move the
deadline of setting the annual RVOs to March 1st of each calendar year after actual use of
renewable fuels is publically known.
Comment:
Commonwealth of Pennsylvania
Concerns regarding the program's operation
Congress had legitimate policy goals in mind when it created the Renewable Fuel Standard
Program in 2005. Its twin goals of environmental protection and reducing America's reliance on
foreign fuel sources remain of critical importance, but as the program's second decade begins,
serious questions remain regarding the its implementation. [EPA-HQ-OAR-2015-0111-1933-A1
p.l]
Even those who completely support the program and how it is currently structured should be
troubled that the envisioned annual exercise of setting volume and percentage requirements has
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not been followed since 2013.1 commend the EPA for recognizing that the continued delays and
ambiguity regarding the standards are not acceptable and for indicating a determination to return
to the annual schedule originally envisioned in the statute.[EPA-HQ-OAR-2015-0111-1933-A1
p.l]
Nestle
With respect to 2014 RFS quantities, the agency did not meet statutory deadlines for announcing
mandates. In these circumstances, simply setting the RFS at actual-use levels is the only sensible
approach. To retroactively impose mandates different from actual usage would serve no purpose
and would undoubtedly invite costly litigation that would be a poor use of federal resources.
[EPA-HQ-OAR-2015-0111-1918-A1 p.2]
PBF Holding Company LLC
Given the harm associated with EPA's continued delay in promulgating annual RFS
requirements, EPA should expeditiously finalize the 2014, 2015, and 2016 standards, and must
propose and finalize standards for future years in accordance with the respective statutory
deadlines. [EPA-HQ-OAR-2015-0111-1724-A1 p.3]
National Farmers Union (NFU)
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1044, pp. 165-166.]
So first let's look at timing. EPA is inexcusably late with their decision. EPA was under
obligation to set the production targets and propose and finalize the rules well before the 2014
production year began to give the ethanol industry the certainty it needs to prepare for the next
year. The 2014 production year has already come and gone. The 2015 rules will not finalized
until the year is almost over. It remains to be seen if the proposed rule is finalized before the
2016 production year begins. In our view, EPA's failure to set production targets in advance of
production years is very disappointing and damaging to the ethanol industry by virtue of the
uncertainty it creates.
Response:
Many commenters emphasized the importance of the statutory deadlines and the need to keep the
statutory schedule. They also encouraged EPA to expeditiously finalize this rule. Some
commenters supported our decision to set the standards for 2014 at actual levels due to this
delay. We acknowledge that the missed deadlines created uncertainty and the potential for
adverse effects on obligated parties and renewable fuel producers, though it is not possible to
ascertain the extent to which adverse effects may have occurred, as the renewable fuel volumes
continued to increase over time despite the lack of having standards in place. Regardless, we
intend to meet the statutory schedule for future rulemakings. For the final rule we are continuing
to set 2014 standards at levels of actual supply. It is also important to note that the annual
rulemaking schedule and process, which is very challenging to complete each year, was specified
by Congress.
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10.2.1 Statutory Deadlines
Comment:
62nd Legislative District, Pennsylvania House of Representatives
Concerns regarding the program's operation
Congress had legitimate policy goals in mind when it created the Renewable Fuel Standard
Program in 2005. Its twin goals of environmental protection and reducing America's reliance on
foreign fuel sources remain of critical importance, but as the program's second decade begins,
serious questions remain regarding the its implementation.
Even those who completely support the program and how it is currently structured should be
troubled that the envisioned annual exercise of setting volume and percentage requirements has
not been followed since 2013.1 commend the EPA for recognizing that the continued delays and
ambiguity regarding the standards are not acceptable and for indicating a determination to return
to the annual schedule originally envisioned in the statute. [EPA-HQ-OAR-2015-0111-3462-A1
p. 1]
Abengoa Bioenergy
EPA admits that its unlawful delays in promulgating 2013 and 2014 standards have lowered
actual supply of biofuels that would otherwise be available to satisfy RFS requirements. [EPA-
HQ-OAR-2015-0111-2474-A1 p.6]
Advanced Biofuels Association (ABFA)
The inability to set the standards in a timely fashion, as well as accurately set the obligations
relative to actual production, has disproportionately had a negative impact on the second
generation advanced and cellulosic producers, which ABFA represents. The past efforts at
setting RVOs have seen lawsuits filed for missing the November 30th deadline and then lawsuits
at the end of the process, forcing EPA to vacate or significantly reduce the cellulosic RVO in
particular in both 2012 and 2013. As a result, this is a process that requires reform in order to
restore certainty to the market, entice investors, and bring confidence to the RFS2 program at
large. We appreciate many of the changes that are proposed in this rulemaking, which move in
the direction of providing more clarity, transparency, and certainty for the program. [EPA-HQ-
OAR-2015-0111-2498-A1 p.2]
CHS, Inc.
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015. See Docket Number EPA-HQ-OAR-2015-0111-1044, p. 173.]
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We also strongly urge the EPA to set these blending requirements statutory — by statutory
deadlines. Delays in the requirements have caused unnecessary uncertainty for our growers and
ethanol producers. They also contribute to the volatility of RINs, which increases cost for
refineries.
ExxonMobil Refining & Supply Company
Recognizing the regulatory improvisation that is currently occurring in light of the current timing
situation, ExxonMobil is hopeful that this proposal will get the RFS program back on track.
ExxonMobil supports EPA's efforts to get the agency back to a program of reasonable deadlines
that provide obligated parties with appropriate notice to adequately plan to ensure the continued
availability of transportation fuels throughout the US. While ExxonMobil is substantively
supportive of some of the standards promulgated by EPA in this proposal, it strongly objects to
the retroactive and late timing which put both EPA and industry into this potentially untenable
position. ExxonMobil urges EPA to meet its statutory and now court-ordered deadlines going
forward. [EPA-HQ-OAR-2015-0111-2270-A1 p.2]
Illinois Farm Bureau
EPA must not allow this issue to linger for months without final action because it really does
appear as if the agency is making up the rules as it goes along. EPA's failure to meet statutory
deadlines, its arbitrary approach and indefensible definition of 'inadequate supply' are making a
mockery of a law that has accomplished so much and has so much potential. EPA must bear
responsibility for the growing perception that the RFS isn't working. It's not too late for the
agency to reverse the damage its done. [EPA-HQ-OAR-2015-0111-3290-A2 p.4] [EPA-HQ-
OAR-2015-0111-1044 p.93]
Mass Comment Campaign sponsored by anonymous 5 (web) - (386)
The agency's continued inability to set standards that are timely and reasonable raises the
question as to whether a federal law requiring increased use of biofuels is in the public interest.
The financial health of the U.S. refining industry should not be put at risk by federal regulations
which fail to consider the realities of the marketplace. [EPA-HQ-OAR-2015-0111-0128 p. 1]
National Chicken Council (NCC)
The EPA has not met its statutory deadlines in establishing the required volume obligations
under the RFS since 2009. Under the EISA statute, the required volume obligations are to be
finalized by 30 November of the preceding year. The actual dates by which these levels were
established are shown as follows:
• 2010 - finalized March 26, 2010
• 2011 - finalized December 9, 2011
• 2012-finalized January 9, 2012
• 2013 - finalized August 5, 2013
• 2014 - proposed in November 2013, re-proposed in May 2015
• 2015 - proposed in May 2015
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According to the Government Accountability Office, these late rulings "contribute to industry
uncertainty, which can increase costs because industry cannot plan and budget effectively. "
[EPA-HQ-OAR-2015-0111-1814-Alp.l-2]
National Corn Growers Association (NCGA)
The authority to adjust the cellulosic, advanced and total schedules based on cellulosic shortfalls,
section 21 l(o)(7)(D) of EISA requires: EPA to adjust, by November 30 of the preceding year,
the volume requirements for cellulosic biofuel if production is likely to be less than called for in
the Act. The EPA has failed to meet this deadline - two years after the statutory obligation.
[EPA-HQ-OAR-2015-0111-1939-Alp.3]
Novozymes Americas
The EPA's actions - and inactions - over the past 18 months have stalled and driven away
significant investment and jobs. [EPA-HQ-OAR-2015-0111-3277-A1 p.l]
A guiding principle of the RFS was that obligated parties would be required to blend increasing
amounts of renewable fuel into our fuel supply, up to the statutory volumes. Removing that
obligation could cause uncertainty in the U.S. alternative fuel industry. Companies like
Novozymes will be unable to evaluate future U.S. projects due to market uncertainty. Pollution,
greenhouse gas emissions, and price vulnerability at the pump will also increase. [EPA-HQ-
OAR-2015-0111-3277-A1 p.7-8]
Paul Bertels Farms
Finally, I am dismayed the Agency has claimed "the past has happened" when setting the 2014
rule. It is EPA's inability to promulgate rules within the legislated timeline that has put you into
the awkward position of proposing rules for past years. [EPA-HQ-OAR-2015-0111-2799-A1
p.2]
Response:
EPA acknowledges the missed statutory deadlines which have caused us to set the 2014 and
2015 standards at the levels of actual supply and projected actual supply, respectively. We
acknowledge that investors, producers, distributors, and retailers seek certainty in the standards
for decision-making. With this rulemaking, we place the standards back on track, and seek to
maintain this for future annual standards to alleviate many of the issues presented by commenters
due to untimely standard setting.
We also received comments questioning whether the RFS program is in the public interest, and
criticizing EPA's standards as "fail[ing] to consider the realities of the marketplace." EPA
disagrees with this comment, and carefully considers the fuel marketplace in setting standards for
this program.
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Comment:
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
CAA section 21 l(o)(2)(B)(ii) also expressly requires EPA to provide 14-months lead time when
establishing such requirements. [EPA-HQ-OAR-2015-0111-1948-A1 p.13]
Compliance with the statutory lead time requirements for these years now is impossible. EPA
also has not undertaken an adequate analysis of the six factors specified in CAA section
21 l(o)(2)(B)(ii) for 2014, 2015, 2016 or 2017. Consideration of these factors is a statutory
requirement precedent to revising the applicable volume of biomass-based diesel for years after
2012. [EPA-HQ-OAR-2015-0111-1948-A1 p. 13]
In this regard, section 21 l(o)(2)(B)(ii) is clear: EPA cannot alter its most recent determination
for 2013 of 1.28 billion gallons, because this is the highest volume for which obligated parties
have had the requisite advance notice and an opportunity to comment on EPA's application of
the six statutory criteria.21 [EPA-HQ-OAR-2015-0111-1948-A1 p.13]
The fact that the statute set forth specific volumetric requirements in 2009 and 2010 in the NPRA
case is significant, because it enabled the court to reason that obligated parties were put on notice
by the statute itself as to what their biomass-based diesel blending requirements would be prior
to the promulgation of a final rule. There is no such notice here. Instead, the statute establishes a
1 billion gallon floor; in 2013, EPA applied the six statutory criteria to set the applicable volume
for biomass-based diesel above that floor, at 1.28 billion gallons. [EPA-HQ-OAR-2015-0111-
1948-Alp.l4]
NPRA v. EPA involved the implementation of a new program - the transition from RFS1 to
RFS2 following the passage of EISA. [EPA-HQ-OAR-2015-0111-1948-A1 p. 15]
That same situation is not present today, as the Agency's original proposal to maintain the 1.28
billion gallon mandate in 2014 and 2015 continues to exceed the statutorily prescribed minimum
of 1.0 billion gallons. [EPA-HQ-OAR-2015-0111-1948-A1 p.15]
EPA may increase the biomass-based diesel standards only by correctly applying the six
enumerated criteria and by providing obligated parties 14-months lead time. Not having done
either, EPA is, therefore, without authority to increase the biomass-based diesel mandate beyond
1.28 billion gallons in the context of this rulemaking. [EPA-HQ-OAR-2015-0111-1948-A1 p.15]
EPA should more fully explain this sequence of events and how it can assure that it will return to
the statutory schedule when it has not explained past failures to comply despite having full
knowledge of the annual obligations imposed on EPA by the RFS program. [EPA-HQ-OAR-
2015-0111-1948-Alp.53]
Therefore, in the context of this final rule, EPA should include a discussion of how the Agency
has devoted and will devote sufficient resources to the RFS program, ensured its coordination
with EIA in a timely fashion, and addressed any significant factors that EPA believes impede its
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ability to comply with statutory deadlines for the RFS. [EPA-HQ-OAR-2015-0111-1948-A1
p.54-55]
We would note that even using the 2013 determination would not explicitly satisfy the
requirement of CAA section 21 l(o)(2)(A)(ii) that the Administrator determine applicable
volumes for "calendar years after the calendar years specified in the tables" since EPA's
determination was with respect to the year 2013.
Countrymark Cooperative Holding Corporation
[W]e average just under 2% biodiesel in all of our diesel fuel on an annual basis. We have a
customer base that desires renewable fuels; however, we still cannot meet our obligation purely
through blending renewable fuels. Therefore, we are a net purchaser of RINs and as such we
must plan for our compliance at the start of each calendar year. [EPA-HQ-OAR-2015-0111-
2264-A1 p.2]
II. 2014 Standards
Since there was no other planning resource to use and EPA did not finalize the standards in a
timely manner, we were forced to plan to use those standards that were proposed in 2013 as our
planning guide for 2014 compliance.
Even though EPA reduced the total renewable fuel requirement in this new proposed standard,
they raised the advanced biofuel percentage and subsequently the nested requirements for
biomass-based diesel and cellulosic biofuels. The change in cellulosic is almost double and will
cost over $35,000 for additional waiver credits. This is small compared to the financial impact
on changing the advanced and total categories. Biodiesel is the only advanced biofuel that we
can blend on a commercial scale to satisfy the obligation for both the biomass-based diesel and
the advanced biofuel categories. At the end of 2014, we had either blended and/or purchased
nearly all of our D4, D5, and D6 RINs for compliance. With the new standards, we became short
on D4 and D5 RINs and long on D6 RINs. In addition, D6 RIN price dramatically decreased
while D4 and D5 stayed the same or increased. Both of these combined have a real economic
impact of over $1.1 million which is a direct impact on CountryMark income.
CountryMark nor any company should be financially penalized because EPA did not set the
compliance standards in a timely fashion. Therefore, we recommend that the 2014 standards
remain the same as those proposed in November 2013 which is closer to the intended timeline set
by the law. [EPA-HQ-OAR-2015-0111-2264-A1 p.2-3]
If the annual obligation continues to increase as indicated by the EPA there are only two options
for compliance at this time:... 2) Blend additional biodiesel. Diesel fuel specification, ASTM D-
975, allows for up to 5% biodiesel to be blended within the specification. One approach would
be to blend 5% biodiesel from March through November and not provide a choice to our
customers. This lack of choice may negatively impact diesel sales volumes. Plus, this approach
would still require purchasing additional RINs for compliance. [EPA-HQ-OAR-2015-0111-
2264-A1 p.7]
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In addition, EPA should reduce the biomass-based mandate to reflect an annual average of 2%
biodiesel in the diesel fuel market. [EPA-HQ-OAR-2015-0111-2264-A1 p.8]
National Biodiesel Board
NBB rejects, however, any suggestion that EPA should not implement the RFS2 volumes for
2014-2016 and cannot increase the required volumes for biomass-based diesel because it did not
finalize the standards under the deadlines in the statute. At the public hearing, obligated parties
continue to beat the drum that EPA cannot increase the biomass-based diesel applicable volume
because it missed the statutory deadlines. [EPA-HQ-OAR-2015-0111-1953-A2 p. 133]
They are within the volumes required by statute, including the biomass-based diesel volumes,
which are within the total advanced biofuel and total renewable fuel volumes. Thus, NBB does
not believe that the imposition of standards applicable to the entire year renders EPA's final
decision retroactive rulemaking. The final "rule" here is merely a translation of the volume
requirement into a percentage of the gasoline and diesel fuel expected to be sold.116 Moreover, a
showing of compliance with these requirements is not yet due. [EPA-HQ-OAR-2015-0111-
1953-A2p.l34]
Based on the rule establishing the 2013 biomass-based diesel volume, obligated parties were also
on notice that EPA believed increased biomass-based diesel volumes would better meet the
advanced biofuel volume. In addition, obligated parties simply cannot claim harm with respect to
the proposed volume increase by NBB for biomass-based diesel for 2014, as it is in line with
production and use in 2013. NBB also has long advocated for higher volumes of biomass-based
diesel. Also, it only benefits obligated parties to purchase RINs even before EPA finalizes the
required volume, as excess RINs can be sold or used the next year. [EPA-HQ-OAR-2015-0111-
1953-A2p.l35]
Such a final rule would be a logical outgrowth of EPA's proposal. A final rule constitutes a
logical outgrowth of a proposed rule where "interested parties should have anticipated that the
change was possible, and thus reasonably should have filed their comments on the subject during
the notice-and-comment period." Daimler Trucks N. Am. LLC v. EPA, 737 F.3d 95, 100 (D.C.
Cir. 2013) (citations omitted). The D.C. Circuit has held that it "will deem a final rule to be a
logical outgrowth of a proposed rule 'if a new round of notice and comment would not provide
commentators with their first occasion to offer new and different criticisms which the agency
might find convincing.'" Id. (citations omitted). [EPA-HQ-OAR-2015-0111-1953-A2 p. 135]
The Administrative Procedure Act is of limited application here. Section 307(d) of the Clean
Air Act outlines the requirements for the promulgation or revision of any regulation pertaining to
any fuel or fuel additive under Section 211 of the Act. 42 U.S.C. § 7607(d).
Response:
Commenters suggested the EPA was prohibited from increasing the biomass-based diesel
standard above 1.28 billion gallons for 2014 because obligated parties did not have adequate
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notice of EPA's intention to increase the biomass-based diesel standard above this amount
beginning with the 2014 production year. We do not agree with these commenters and believe
that obligated parties were on notice that the BED volume requirement could be higher than 1.28
billion gallons. First, in proposing 2014 volumes in the November 2013 NPRM,37 we said that
we believed 1.60 billion gallons of biomass-based diesel was the upper-end of BED volume
range for use in deriving the proposed total renewable fuel volume for 2014. While we proposed
a 2014 BED volume requirement of 1.28 million, we also requested comment on alternative
approaches and higher volumes.38 We also noted in the NPRM that total biodiesel production by
the end of 2013 could be as high as 1.7 billion gallons and that the facilities contributing to this
production collectively had a capacity of well over 2 billion gallons.39 Thus, stakeholders were
certainly provided notice in November 2013 that a final BED volume requirement greater than
1.28 billion gallons was possible and could be used in deriving the final 2014 BED standard.
Furthermore, they were provided with notice through the June 10, 2015 NPRM of our intention
to increase the volume requirement above 1.28 billion gallons. We note, as well, that the volume
requirement is established to reflect actual renewable fuel use in 2014, without the need for a
draw-down in the collective bank of carryover RINs, so there are adequate RINs available for
compliance, and compliance can be achieved through RIN acquisition. Parties will have until
June 1, 2016, to submit their compliance demonstrations for 2014, which is ample time to
complete necessary RIN transactions. Obligated parties had the opportunity to and did comment
on the proposed volumes for 2014-2017 in this rulemaking, as well as on 2014 and 2015
volumes in the previously proposed rule from November 2013.
These commenters stated that the EPA is acting contrary to the plain language of the statute and
the objectives of the RFS program. They stated that EPA's reliance on the D.C. Circuit decisions
addressing late issuance of RFS rules to justify our proposed establishment of BED volume
requirements for 2014-2016 was inappropriate because the factual situation is distinguishable.
They argued that in prior decisions the DC Circuit noted that the statute provides notice of
possible maximum volume requirements, and that with respect to BED for 2014-2016 there are
no comparable statutory references. Additionally these commenters noted the unique
circumstances of one of the prior cases as distinguishable because EPA was implementing a new
program, and that Congress anticipated the possibility of retroactive impacts.
Our response to these comments is provided in Sections 1C. and III.C.-E. of the final rule. In
general, EPA agrees that there are factual distinctions between the situations addressed by the
DC Cicuit in the two prior decisions that addressed our authority to issue late rules and the
possibility that they could be characterized as unreasonably retroactive, but we do not believe
that these distinctions mean that EPA is precluded from setting standards for 2014 and 2015 at
the levels finalized, or that it is unreasonable for us to do so. We believe that EPA is authorized
to issue standards, though late, and that obligated parties had sufficient notice that EPA could
finalize larger volume requirements than those proposed in November, 2013, and that the many
program flexibilities and extended compliance dates provided in the regulatory program and this
final rule, together with our fmalization of volume requirements equal to actual supply (without a
37 78 Fed. Reg. 71732, 71767 (November 29, 2013).
38 78 Fed Reg 71732, 71734.
39 78 Fed Reg 71732, 71752.
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draw-down in the collective bank of carryover RINs), render the final standards achievable and
reasonable.
These same industry commenters suggested that because of the retroactive nature of the 2014
rulemaking and purported lack of notice, some obligated parties might have difficulty meeting
their 2014 BED volume obligations if we were to finalize a BED volume requirement greater
than 1.28 billion gallons. Although they did not identify any parties in this situation, there was
one obligated party who asserted in separate comment that they had in fact relied on the
November 2013 NPRM in planning 2014 compliance for all four of the renewable fuel
standards, and requesting that in fairness EPA not now impose higher obligations for that year.
In reply we reiterate that parties were on notice through the November 2013 NPRM that EPA
could finalize higher volume requirements than proposed. Indeed, it is the nature of proposed
rules that EPA review comments and consider changes, so our doing so should not come as a
surprise to anyone. In addition, the tables of applicable volumes in the statute have long
provided notice with respect to advanced biofuel, total renewable fuel and cellulosic biofuel that
volume requirements could be as high for those fuels as are specified there. We believe that once
this commenter complies with the 2014 advanced biofuel and total renewable fuel volume
requirements regarding which such extensive notice was available, that compliance with the
2014 BED volume requirement will likely either be satisfied, or easily satisfied. Even if the party
needs to adjust the types of advanced biofuel RINs they own to acquire sufficient BED RINs to
comply with the BED standard, they will be able to sell the non-BBD advanced RINs for a
nearly identical price to the BED RINs they will need to purchase.40 EPA is also extending the
compliance demonstration deadline for 2014 beyond what we proposed, allowing this party and
any other similarly situated party sufficient time to engage in the needed RIN transactions.
Even if an obligated party faced compliance challenges for 2014, CAA 21 l(o)(2)(5)(A)-(D)
provides two additional compliance flexibility options that an obligated party may utilize if they
are unable to meet their 2014 BED volume obligation with RINs generated in 2014. First, to the
extent that any shortfall of BED RINs might exist, an obligated party, could utilize carryover
BED RINs (D4) to meet their compliance obligation. As we discussed in Section II.H, carryover
RINs were intended to provide flexibility for obligated parties in complying with the RFS
standards in a variety of circumstances. Certainly, if an obligated party experiences a shortfall in
complying with the BED 2014 volume standard using 2014 RINs it would be an appropriate for
them to use carryover RINs to meet compliance obligations. Based on available data in the
EMTS system41, we estimate that there are about 400 million carryover BED RINs available for
use in 2014. This number of BED carryover RINs should be available for purchase on the RIN
market (since if they are not used in 2014 they will expire), and together with available RINs
generated in 2014 make up a substantial REST pool from which obligated parties may acquire
needed RINs. However, if an obligated party was either unable to purchase the necessary
carryover RINs or current year RINs to meet its compliance obligation, they could alternatively
use the carry-forward deficit provision of CAA 21 l(o)(2)(5)(D) to carry forward the deficit for
40 "RIN Prices in 2015 (January - October)" memorandum from Dallas Burkholder to docket EPA-HQ-OAR-2015-
0111.
41 "Estimating Carryover RINs Available for Use in 2014," memorandum from Dallas Burkholder to docket EPA-
HQ-OAR-2015-0111.
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one year on the condition that it be met the following year (assuming they did not carry forward
a deficit into 2014).
We recognize that the same number of BED RINs will likely be retired for compliance with the
2014 RFS standards whether we set the BED volume requirement at 1.28 versus 1.63 billion
RINs, because complying with the 2014 advanced and total renewable fuel standards will require
retirement of 1.63 billion BED RINs. However, in light of this fact, the ease with which RINs
may be traded, as well as the availability of carryover RINs and the deficit carry-forward option,
we believe it is unlikely that any obligated party would have more difficulty complying with a
1.63 billion gallon 2014 BED volume requirement as compared to a 1.28 billion gallon BED
volume requirement. Therefore, we do not believe that sufficient justification has been presented
by commenters for EPA to deviate from the proposed approach of setting the 2014 BED volume
requirement as equal to the actual 2014 BED supply. In addition, we believe that lowering the
proposed 2014 BED volume requirement for what we believe to be a highly theoretical, and
undocumented concern would send a potentially chilling message to investors in the BED
industry that would be contrary to the objectives of the CAA to incentivize the growth of
renewable fuel volumes.
For all of these reasons, we believe that it is reasonable and appropriate to establish the 2014
BED applicable volume requirement as equal to 1.63 billion gallons, the volume actually
produced and imported in 2014 and which is available for compliance. This is consistent with
the approach we are taking to establishing the total renewable fuel, advanced biofuel, and
cellulosic biofuel standards in 2014. Our approach to setting the 2015 BED volume requirement
is justifiable for the same reasons.
A commenter responded to this argument, which was initially presented at the public hearing on
June 26, 2015, making many of the same arguments as EPA has presented above. These
commenters also noted that because the BED volumes are nested within the advanced biofuel
volumes, obligated parties had notice that BED volumes would be within that volume. They
noted that a compliance demonstration is not yet required, and that the 2013 RFS standards were
upheld even when issued after the statutory deadline. They noted that obligated parties had
notice of the potential 2014 volumes and could not demonstrate harm caused by a higher
standard. EPA agrees with these comments.
Comment:
Colorado Corn Growers Association
Among other issues with its recent rulemaking, the authority to adjust the cellulosic, advanced
and total schedules based on cellulosic shortfalls requires the EPA to adjust, by November 30 of
the preceding year, the volume requirements for cellulosic biofuels if production is likely to be
less than called for in the Act. The EPA has failed to meet this deadline two years after the
statutory obligation. [EPA-HQ-OAR-2015-0111-2334-A1 p.2]
For these reasons and others, the EPA's proposal is in direct violation of the law and puts the
agency in an actionable position. [EPA-HQ-OAR-2015-0111-2334-A1 p.2]
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Response:
EPA acknowledges that we have failed to meet the statutory deadlines for the 2014 and 2015
cellulosic, advanced, and total renewable fuel standards, but as discussed in the previous
response, we have authority, and a responsibility, to issue RFS standards even though late, as
noted in n the D.C. Circuit's opinion in Monroe Energy v. EPA.
10.3 Public Participation
Comment:
National Corn Growers Association (NCGA)
The Agency received in excess of 340,000 comments on the proposal; many of those came from
growers and farmers around the country. The Agency is obligated by law to address all
substantive comments on a proposed rule. Ignoring those comments and withdrawing the NPRM
shows a level of disrespect for the process and individuals who participated in the comment
period. [EPA-HQ-OAR-2015-0111-1939-A1 p.4-5]
Office of the Lt. Governor, Indianapolis, Indiana
As you make final determinations on the renewable volume requirements, I urge you to make the
process as open and transparent as possible. Stakeholders must have an opportunity for
substantive contribution to the process, particularly those stakeholders who bear the
responsibility of meeting the requirements. [EPA-HQ-OAR-2015-0111-2482-A1 p.2]
Response:
A commenter stated EPA is obligated to respond to the substantive comments submitted with the
excess of 340,000 comments on the now rescinded notice of proposed rulemaking (NPRM) for
the 2014 RFS standards [November 29, 2013, at 78 FR 71732]. The commenter also stated that
withdrawing the NPRM is disrespectful to those who submitted comments and participated in the
process. Another commenter stated that the rulemaking process should be open and transparent
as possible to allow opportunity for substantive contribution to the process.
EPA believes that the process should be as open as possible and we have done so through
multiple avenues to provide opportunities for comment. We opened a 45 day comment period
and created a public docket (Docket ID No: EPA-HQ-OAR-2015-0111) to house all comments
received on the proposed rule for the renewable fuel standards for 2014-2016, and biomass-based
diesel volumes for 2017, which was published in the Federal Register in June 2015 (and posted a
few weeks earlier on EPA's website). By the end of the comment period, we received over
670,000 comments from stakeholders in the oil, renewable fuel and agricultural industries, as
well as from small businesses, state and local governments, congressional members, non-
governmental organizations (NGOs), universities and private citizens. On June 25, 2015, we also
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held a public hearing in Kansas City, Kansas in which we had a very high public turnout and
provided stakeholders, government offices, and the public the opportunity to provide their
comment verbally (transcripts to the public hearing can be located in the Docket ID No: EPA-
HQ-OAR-2015-0111). As evidenced by the high volume of comments received, it is clear that
stakeholders and the public did not lack the ability to comment as there was ample opportunities
to do so through the public docket, the public hearing, and other avenues such as direct
submissions to EPA.
EPA acknowledges and values the effort put forth by all those who submitted comments and
participated in the overall process, including the public hearing on the now rescinded proposal
for the 2014 standards. Although EPA disagrees with the commenter that we are obligated to
respond to all comments received on the rescinded November 2013 proposal, we acknowledge
that many of the substantive issues raised by commenters on the November 2013 proposal were
among the key reasons EPA decided to delay issuing the 2014 standards. As we stated in the
December 9, 2014 federal register notice, the November 2013 proposal generated significant
comment and controversy, particularly about how volumes should be set in light of lower
gasoline consumption than had been forecast at the time that the Energy Independence and
Security Act was enacted, and whether and on what basis the statutory volumes should be
waived. Most notably, commenters expressed concerns regarding the proposal's ability to ensure
continued progress towards achieving the volumes of renewable fuel targeted by the statute. EPA
has been evaluating these issues in light of the purposes of the statute and the Administration's
commitment to the goals of the statute to increase the use of renewable fuels, particularly
cellulosic biofuels, which will reduce the greenhouse gases emitted from the consumption of
transportation fuels and diversify the nation's fuel supply. Given ongoing consideration of the
issues presented by the commenters, EPA was not in a position to finalize the 2014 RFS
standards rule before the end of the calendar year 2014 and subsequently rescinded the proposed
standards. In May 2015, EPA issued a new proposal for the 2014 standards along with a proposal
for 2015 and 2016 standards and biomass-based diesel volumes for 2017. In developing the final
rule, we took into consideration all written comments received during the comment period and
verbal or written comments provided at the public hearing on the proposed rule. Not only did the
comments on the original November 2013 proposal lead to a re-proposal, but many of the same
issues were raised again in comment on the May 2015 proposal to the extent they were still
applicable and have been responded to in the final rule and this RTC document.
10.4 Statutory and Executive Order Reviews
Comment:
National Biodiesel Board
EPA provides no assessment on how the reduced volumes will impact small renewable fuel
producers that have invested in the RFS2 program and are subject to their own compliance costs.
[EPA-HQ-OAR-2015-0111-1953-A2p.l40]
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Thus, EPA must analyze the potential impacts of the proposal on small producers as required by
the Regulatory Flexibility Act. [EPA-HQ-OAR-2015-0111-1953-A2 p. 140]
Response:
The impacts of the RFS2 program as a whole were already addressed in the RFS2 final rule
promulgated on March 26, 2010 (75 FR 14670). This final rule will not impose any additional
requirements beyond those already analyzed. The commenter is raising concerns that the
proposed volumes may create insufficient demand for small biodiesel producers. As discussed in
section HE. 3 of the final rule, we are setting an advanced biofuel standard for 2016 that is
expected to result in dramatic growth in demand for biodiesel and renewable diesel.
Consequently, there is no reason to believe that the final standards will do anything other than
have a positive economic impact on all biodiesel producers, including small producers. As
discussed in section IX.C of the final rule, after considering the economic impacts of this final
rule on small entities, we have concluded that this action will not have a significant economic
impact on a substantial number of small entities.
Comment:
The George Washington University
Executive Order 12866
President Clinton's Executive Order 12866, which was reinforced by President Obama's
Executive Order 13563, instructs each agency to base its decisions on the best reasonably
obtainable scientific, technical, economic, and other information concerning the need for, and
consequences of, the intended regulation.29
Despite the emergence of new scientific, technical, and economic information, EPA continues to
rely on old analysis to justify economically significant RFS rules. While many aspects of EPA's
past analyses are likely still as valid as when they were written, many key assumptions may be
challenged by new information. EPA should take this opportunity to revisit the analytical
assumptions that underpin its RFS regulations.
29 Exec. Order No. 12866, "Regulatory Planning and Review." 58 FR 51735 (1993).
Response:
EPA complied fully with EO 12866. EPA based its decisions in this rule on the best available
data. EPA does not view EO 12866 as directing EPA to reopen the entire RFS2 program in the
context of an annual rulemaking. The impacts of the RFS2 program were already addressed in
the RFS2 final rule promulgated on March 26, 2010 (75 FR 14670). This final rule will not
impose any additional requirements beyond those already analyzed. Moreover, this rule reduces
the 2014, 2015, and 2016 volume requirements for cellulosic biofuel, advanced biofuel, and total
renewable fuel from the statutory volumes. Additional discussion regarding the economic
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impacts is provided in sections II.F and IX.C of the final rule, and Section 7 of this RTC
document.
10.5 Statutory Authority
Comment:
National Biodiesel Board
For the reasons outlined in its comments on the November 2013 proposal, NBB believes that the
November 2013 proposal was in violation of, and did not fulfill the purposes of, the statute and,
therefore, withdrawal is appropriate. While the new proposal is an improvement, EPA still fails
to respond to the comments raised regarding its misconstruction of the statute. As such, NBB
incorporates by reference its comments herein, although NBB does, per EPA's request, try to
restate them here. [EPA-HQ-OAR-2015-0111-1953-A2 p.7]
Response:
As the commenter notes, EPA has withdrawn the November 2013 proposal. As stated in our
proposed rule, the comments on the November 2013 NPRM have informed our development of
this proposal, and we have not responded to comments on the prior proposal. To the extent NBB
and other commenters have restated comments that are relevant under this proposal, we have
addressed those comments in this document and in the final rule.
10.6 Beyond the Scope
10.6.1 Legislative Changes
Comment:
Florida Chamber of Commerce
While the Environmental Protection Agency must continue to implement Congress's Renewable
Fuel Standard Program, the truth is, this program is broken and needs to be repealed or changed.
States like Florida had once pushed to increase the amount of ethanol in gasoline in the state, but
after further studies, have repealed this law while still supporting other renewable energies.
While oil is a finite resource and we must continue to search for alternative or renewable
energies, the use of corn ethanol is not a responsible answer.
Pennsylvania Off-Highway Vehicle Association
PaOHV prefers a market driven solution to our energy needs, not one forced on us by
government. American taxpayers have already paid hundreds of billions of dollars in the past
decade to spur biofuel technologies that have failed to materialize. For example, ethanol
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producers received twenty-billion dollars in taxpayer subsidies between 2005 and 2011
according to the New England Complex Systems Institute. And, the USD A just announced one-
hundred-million dollars in loan guarantees for new blending pumps for higher ethanol blends,
after Congress rejected supporting this effort through additional subsidies. [EPA-HQ-OAR-
2015-0111-1941-Alp.l]
Technology and business driven by a free market will produce the products necessary to power
our society today and into the future, and they will do it far better and far more efficiently than
any government entity. [EPA-HQ-OAR-2015-0111 -1941 -Al p. 1 ]
Senate of Pennsylvania
In the longer term, I believe the best solution for such a complex issue is to have a broad public
discussion on the benefits and risks associated with higher ethanol mandates. Our elected
officials in Congress are the ones that need to begin this debate and address the RFS through
legislation, not regulation. [EPA-HQ-OAR-2015-0111-3447-A1 p. 1]
Smithfield Foods, Inc.
Congress Must Act
Reducing the RVOs by EPA's proposed range will not effectively solve the problems facing
food producers and consumers. The current proposal continues the status quo by pegging the
conventional biofuel mandate at 10 percent of the gasoline fuel pool (E10), which continues to
mandate excessive demand of the national corn crop to be diverted into fuel. For consumers to
avoid a $3 billion increase in the cost of food, Congress should repeal the corn ethanol mandate.
Current legislation such as H.R. 704, the 'RFS Reform Act of 2015', introduced by Rep. Bob
Goodlatte (R-VA), and S. 577, the 'Corn Ethanol Mandate Elimination Act of 2015', introduced
by Senators Dianne Feinstein (D-CA) and Pat Toomey (R-PA), would accomplish the much-
needed goal of eliminating the government requirement to blend corn ethanol into the motor fuel
pool in perpetuity, at the expense of farmers and food consumers. Only when these steps are
taken will the market-distorting food price increases of the RFS be eliminated. [EPA-HQ-OAR-
2015-01 ll-2041-Alp.4-5]
The Renewable Fuel Standard is devastating to both food producers and American consumers
alike. The corn ethanol mandate diverts nearly half of the supply of corn to ethanol, increasing
the cost of food. A reduction in the RVOs, while justified by the circumstances described by
EPA, will not resolve the problems created by the RFS for animal agriculture and for food
consumers. Congress must act. Congress should repeal the corn ethanol mandate to allow
consumers to decide the price of corn on an even playing field and help all Americans have
access to healthy and affordable food. [EPA-HQ-OAR-2015-0111-2041-A1 p.5]
Response:
Commenters stated that while EPA is required to implement the RFS program according to the
statutory provisions, they had serious concerns with the statutory provisions themselves and
called upon Congress to change the program. They called upon Congress to begin this debate
and address the issues through legislation and not through rulemaking. These comments
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requesting various congressional actions are beyond the scope of this rulemaking and beyond
EPA's legal authority. It will be up to Congress whether and when they might revise the RFS
provisions in the Clean Air Act again as they did in 2007. In the meantime EPA is continuing to
implement the RFS program in a manner consistent with the existing statutory provisions.
10.6.2 RFS Program Designs
Comment:
Advanced Biofuels Association (ABFA)
We would also like to suggest a mid-year adjustment or an alternative system utilizing a rolling
average that would help to keep pace on behalf of the advanced and cellulosic developments
coming on line (e.g., the 2017 mid-year adjustment would occur on approximately July 15,
2017). This would remove some of the sting of having to wait a year before receiving the benefit
of increased production finding its way into the RVO calculation. This approach would also ease
the process of setting the RVO on a yearly basis and would essentially reduce the process to an
administrative one of collecting and posting the data results in lieu of trying to predict a number
of variables such as demand and production across multiple pools. [EPA-HQ-OAR-2015-0111-
2498-A1 p.4]
We believe this will remove the threats of lawsuits in the front of the process for missing the
deadlines as well as more at the end of the process for overshooting the cellulosic RVO and
having to vacate/reduce volumes as was done in 2012 and 2013. [EPA-HQ-OAR-2015-0111-
2498-A1 p.4]
Additionally, this would remove the need for having a cellulosic waiver credit system as the
RINs and targets would essentially be the same by utilizing the actual data. This could also allow
you to move the compliance deadlines and would reduce the need to build up a volume of carry
over RINs in order to meet the next year's targets. [EPA-HQ-OAR-2015-0111-2498-A1 p.4]
Brazilian Sugarcane Industry Association (UNICA)
Today, the United States is in a very different situation than it was in 2007 or 2010; accordingly,
EPA should reevaluate the EVs established in RFS1 and reaffirmed in RFS2. [EPA-HQ-OAR-
2015-01 ll-2495-Alp.27]
Today, however, according to EPA, due to the claimed 'E10 blendwall,' the supply of renewable
fuels exceeds the demand for those fuels.79 In the present circumstances, refiners are likely to
favor renewable fuels with higher EVs (such as biodiesel) over fuels with lower EVs (such as
sugarcane ethanol), because those refiners can satisfy their statutory renewable volume
obligations with fewer gallons of such high EV fuels. [EPA-HQ-OAR-2015-0111-2495-A1 p.28]
79 See supra Section IV. 1.
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Illinois Corn Growers Association (ICGA) and Illinois Renewable Fuels Association
(IRFA)
6. Force the obligated parties to use RINS and penalties to invest in infrastructure
The oil industry, corn growers, the ethanol industry, Congress, the autos, USEPA, and the
petroleum marketers understood that higher blends of ethanol would have to be sold in the fuels
market for the RFS II requirements established by law to be met. In the original RFS II rules it
was assumed that these volumes would be met through the sale of more E-85 fuel through
flexible fuel vehicles. To assure that the oil industry could use higher blends of ethanol in the
fuel market, USEPA approved the use of El 5 for 2001 and newer vehicles. This allowed 70% of
the current fleet to use El5 which would have met the RFS II requirements for the next several
years.
The RINS were established to help provide flexibility to the oil industry as they meet the RFS II
requirements, provide certainty regarding compliance, trading to balance market differences and
to provide incentives for investment in infrastructure. Instead of using these incentives, the oil
industry chose to force the Administration to reduce the volumes through false arguments related
to gasoline prices.
USEPA could have worked with the oil industry and the ethanol industry to develop a credit
program around the RESTS or the "required volumes" to create a more direct incentive for
infrastructure investment. [EPA-HQ-OAR-2015-0111-1925-A1 p. 9]
National Biodiesel Board
In the RFS2 regulations, EPA adjusts the standard to set it "biodiesel-equivalent" gallons by
using the 1.5 equivalence value. However, EPA has approved equivalence values of 1.6 and 1.7
to renewable diesel approved under the program. EPA should reassess the equation in the
regulations to move the multiplier used closer to 1.7. [EPA-HQ-OAR-2015-0111-1953-A2
p.133]
Petroleum Marketers Association of America (PMAA)
Additionally, when marketers load diesel at the rack, PMAA believes any biodiesel content
should be disclosed on product transfer documents (PTDs). Under current rules, biodiesel
content less than five percent does not have to be disclosed. However, in EPA's proposed
voluntary verification program for RINs, a provision is included that would require disclosure of
biodiesel blends less than five percent on PTDs. PMAA supports the agency's proposal for
downstream transparency in biodiesel being purchased at the rack. Without this transparency,
downstream parties are at risk of non-compliance with other state and federal laws and
regulations. New PTD requirements should apply to transactions above retail and end-user sales.
[EPA-HQ-OAR-2015-0111-1197-Alp.4]
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Union of Concerned Scientists
Another specific change EPA should consider is to specify obligations in terms of percentages.
This may provide more clarity to key participants in the supply chain (especially gas stations),
and this clarity will allow for rational investment and ultimately reduce compliance costs. In past
comments we argued that a straight line increase in the mandate until the general waiver is no
longer needed would be the best way to provide clarity to supply chain participants that the
demand for high blends would be growing steadily. But recent analysis from Irwin and Good
have demonstrated that fluctuations in gasoline use overall can lead to shifts in ethanol
consumption as E10 that are large compared to volumes of ethanol consumed as E85 (Irwin and
Good, 2015).! In light of this, specifying the obligation based on fractional standards may be a
more effective means of helping supply chain participants anticipate and pursue compliance
strategies that are most efficient. [EPA-HQ-OAR-2015-0111-2260-A1 p.6-7]
Response:
Commenters suggested changes to the design of the RFS program in a number ways. Some
commenters suggested EPA re-evaluate the equivalence value assigned to qualifying renewable
fuels. These commenters believe refiners are likely to favor renewable fuels with higher
equivalence values (EVs) (such as biodiesel) over fuels with lower EVs (such as sugarcane
ethanol), because those refiners can satisfy their statutory renewable volume obligations with
fewer gallons of such high EV fuels. Another commenter suggested modifying the EV for
biodiesel and/or renewable diesel. Other commenters suggested EPA force obligated parties to
use RINs and use penalties to incentivize infrastructure investments. These commenters believe
the program was designed to use RINs as not only a means of compliance but also to incentivize
investments, but the oil industry did not use these incentives as intended, and instead is forcing
the EPA to lower volumes on false premises such as high gasoline prices.
The comments on these issues are beyond the scope of this rulemaking, even assuming they are
within EPA's statutory authority. The issue of different equivalence values (EVs) for different
fuels was addressed through notice and comment in the RFS1 final rulemaking. While Congress
eliminated the different EVs for different fuels from RFS1, we were nevertheless able to finalize
different EVs in RFS2 based on the relative energy content of the fuel compared to ethanol.
While we gave consideration to establishing EVs based on other factors (such as lifecycle GHG
emission performance as the commenter suggests), this was not finalized for a variety of reasons.
Additional discussion on EV can be found in the RFS1 final rule (72 Fed Reg 23919) and RFS 1
S&A document, section 3.5.3.2 (http://www.epa.gov/otaq/renewablefuels/420r07006.pdf).
One stakeholder suggested that we specify obligations in terms of percentages. This is similar to
an alternative approach we discussed briefly in the NPRM:
"... an alternative approach to characterizing expected growth in renewable fuels
would be to project the share of the fuel pool that can reasonably be expected to
be comprised of renewable fuel overtime. In this way, increases or decreases in
gasoline demand would be reflected in corresponding increases or decreases in
mandated renewable fuel volumes." (80 FR 33109)
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While this approach has some advantages, few stakeholders commented on it. Thus we do not
believe it would be appropriate to implement at this time.
One stakeholder requested that we adjust the factor of 1.5 used in the calculation of the
percentage standards for BED to account for the fact that some BED is renewable diesel rather
than biodiesel.42 We acknowledge that some BED is in fact renewable diesel which has a higher
Equivalence Value (typically 1.7 as opposed to 1.5 for biodiesel). However, a change to the 1.5
factor would require that we estimate the relative proportions of biodiesel and renewable diesel,
and this value will vary from year to year. It would also require a change to the regulations
which we did not propose. Therefore, we are not making this change at this time.
PMAA requested that we require product transfer documents (PTDs) to include the concentration
of the biodiesel content of any diesel fuel, even if it is 5% or less. In fact we made this change
on July 18, 2014.43 See §80.1453(a)(12)(ii).
One stakeholder suggested that we make a mid-year adjustment to the cellulosic and advanced
biofuel standards, or alternatively use a rolling average. In the case of a mid-year adjustment, it
would effectively mean that standards released by the November 30 statutory deadline would not
be the final standards. Instead, the final applicable standards that would apply for the full
calendar year would not be available until approximately midway through that calendar year.
Similarly, a rolling average standard would mean that the applicable standards would change
every month. We do not believe that either approach is consistent with the statute's intent that the
final applicable standards (represented by a single percentage per standard), be set by November
30 of the previous year (absent a subsequent waiver of the standards).
10.6.3 RIN-Generating Pathway Approvals
Comment:
Abengoa Bioenergy
Further, EPA's ongoing delays in approving advanced and cellulosic biofuel pathways hinder the
advanced biofuel industry's ability to generate sufficient RINs to meet the statutory targets. EPA
fails to justify excluding from the RVOs potential volumes from both foreign advanced biofuel
producers and others for which it has delayed pathway approval. EPA's delays and exclusions
risk creating a self-fulfilling prophecy of long-term advanced biofuel supply shortages, keeping
these fuels out of the marketplace and subverting the goals of the RFS. EPA must address the
backlog of advanced and cellulosic pathway petitions and work with the advanced biofuel
industry to encourage all potentially available volumes be brought to the market to meet the
goals of the RFS.
42§See80.1405(c).
43 79 FR 42078
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Advanced Biofuels Association (ABFA)
Nevertheless, our members continue to have concerns over a myriad of issues remaining
unresolved in the regulatory framework for the RFS2 program. Particularly problematic is the
intermediate feedstock/co-location issue and the continual delay in approval of pathways for new
technologies and feedstocks. Many of these have become significant barriers to entry for
individual companies or entire sectors of the advanced and cellulosic sectors. We will discuss
some of these individually in the body of our comments. This is a serious problem as ABFA has
had a number of our members abandon the U.S. as a place to build their plants due to the
inability to resolve issues such as "What is a residue of a cellulosic feedstock?" or "What is the
appropriate definition of a waste?" Our Association has seen five of our members either
completely leave the U.S. or simply chose to build their demonstration or first commercial
facilities overseas.
ABFA applauds EPA's efforts to improve the review process and timing of new pathway
approvals.
We are disappointed that several advanced feedstock pathways such as PFAD and PSO remain in
the queue and have not been resolved in over two years.
Biotechnology Industry Organization
EPA's ongoing delays in approving advanced and cellulosic biofuel pathways hinder the
advanced biofuel industry's ability to generate sufficient RINs to meet the statutory volume
requirements. EPA fails to justify excluding from the RVOs potential volumes from both foreign
advanced biofuel producers and others for which it has delayed pathway approval. EPA's delays
and exclusions risk creating a self-fulfilling prophecy of long-term advanced biofuel shortages,
keeping these fuels out of the marketplace and subverting the goals of the RFS. EPA must
address the backlog of advanced and cellulosic pathway petitions and work with the advanced
biofuel industry to encourage all potentially available volumes be brought to the market to meet
the ambitious goals of the RFS. EPA Continues to Delay Approval of New Advanced and
Cellulosic Pathways
Environmental and Energy Study Institute (EESI)
While EPA has taken steps to streamline the pathways process for new fuel pathways currently,
22 applications are still pending, and 8 of these are for advanced and cellulosic fuels.
Fuel Cell and Hydrogen Energy Association (FCHEA)
As the agency considers a multi-year RFS approach, we ask that hydrogen produced from
renewable sources qualify as a compliance option, eligible for cellulosic RINs under the
program. Approving this additional pathway will improve cellulosic RIN supply in a market that
is already significantly short of the targets envisioned in the original RFS mandates.
Furthermore, doing so would not only help the EPA achieve its ambitious goals for 2015 and
2016, it would build upon precedent established by the agency's July 2014 revisions which
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approved a new pathway for electricity generated from renewables and subsequently used in
battery electric vehicles.
After EPA was directed to utilize a "neutral methodology" when setting the annual volume
obligations to more accurately reflect renewable fuel production, EPA approved several new
RFS pathways in 2014, including electricity produced from biogas from landfills, municipal
waste water treatment facility digesters, agricultural digesters, and separated municipal solid
waste (MSW) digesters for use in battery electric vehicles.
FCEVs are in fact electric vehicles. They are powered using electricity, which is created onboard
the vehicle from hydrogen inputs. There are also a number of "green" production methods for
hydrogen that would produce lifecycle GHG savings over 50% or even 60%, including
extracting hydrogen from landfill gas and anaerobic digesters and using renewable-powered
electrolysis to split hydrogen out of fluids. Therefore, these forms of "green" hydrogen should
qualify for RINS.
Finally, in the short run, if the agency allows hydrogen produced from renewables to qualify for
cellulosic RINs, it will provide companies that have renewable volume obligations (RVOs) with
a new avenue to satisfy their statutory obligations. In the long run, it will incentivize the next
generation of renewable fuels that show tremendous future demand.
To help meet these goals, FCHEA encourages EPA to allow renewable hydrogen to qualify for
cellulosic RINs. Doing so will complement industrial efforts to fully commercialize these
advanced infrastructure technologies, and bring new ZEVs to the marketplace. [EPA-HQ-OAR-
2015-01 ll-2483-Alp.3]
General Motors
(GM) encourages EPA to significantly increase its requirements for D-3 cellulosic RIN's,
beyond the levels in the proposed regulation for 2014, 2015 and 2016, for the reasons described
in detail in the BR comments.
Based on the rising number of applicable General Motors-produced vehicles in operation, and
the substantial and growing amount of electricity from the grid used to propel these vehicles,
there would be a significant increase in the industry-wide capacity to produce D-3 cellulosic
RIN's if EPA approves the creation of D-3 cellulosic RIN's from this pathway. Additional
capacity could also arise from vehicles produced by other automobile manufacturers. This
pathway for producing D-3 cellulosic RIN's does not appear to have been comprehended in the
D-3 RIN supply estimates which form the basis for the proposed Renewable Fuel Standards for
2014, 2015 and 2016. Therefore, the proposed standards for D-3 RIN's in the current rulemaking
may be significantly too low, which could result in low future RIN prices. This would undermine
the goals of the Renewable Fuel Standards program for the next several years by lessening the
incentives for investment in renewable fuel capacity and usage
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LanzaTech, Inc.
When it comes to approving pathways necessary for the commercialization of many of the most
"advanced" renewable fuels in the United States, EPA inhibits the renewable fuels industry from
meeting the true potential that Congress envisioned by interpreting EISA in the narrowest of
terms.
EPA should interpret the definition of renewable biomass broadly
LanzaTech commends EPA for recognizing the potential of nonphotosynthetic microorganisms
as renewable biomass for the production of renewable fuels, but cautions EPA to not regress
from its commitment in the 2010 RFS final rulemaking "to interpret the term 'algae' in EISA
broadly."
In practice, significant opportunity remains for EPA to improve its coordination with other key
agencies and departments to ensure effective implementation of a comprehensive U.S. biofuels
strategy, in which the RFS plays a central role. The U.S. Government has invested significant
time and money in the renewable fuel and chemical technologies that LanzaTech is developing.
Unfortunately, a narrow interpretation of renewable biomass stands could impede LanzaTech's
contribution to the U.S. ability to achieve its goals of accelerating the commercialization of truly
transformational renewable fuel technologies and products and ensuring a positive return on the
government's investment.
The RFS was intended to promote the utilization of a variety of feedstocks to accommodate
future technologies. EPA has sought to adopt a technology neutral approach with respect to how
the market would innovate and absorb renewable fuels. However, when it comes to biological
pathways, which use certain bacteria to produce renewable fuels from waste emissions, EPA has
not yet applied a technology-neutral interpretation in treating similar processes equally.
This approach is driving LanzaTech to advance the commercialization of its technology.
National Biodiesel Board
As far as renewable diesel from cover crops, we are unclear if any feedstock can be approved as
a cover crop under EPA's definition, nor does EPA identify any particular such feedstock. In
2012, EPA amended the definition of annual cover crop to include only those crops that have "no
existing market to which it can be sold except for its use as feedstock for the production of
renewable fuel." 77 Fed. Reg. at 1354. Farmers will look to see the most marketable cover crop,
and, even for crops developed specifically for biofuel production, EPA has not relied on the
annual cover crop approval.43 Thus, while EPA has approved such a pathway, it has also defined
the terms in such a way to make it virtually impossible for these fuels to ever come to light. If
EPA is aware of such feedstocks, then it should make the public aware. Otherwise, it is EPA's
own regulations and implementation of the program, not some artificial competition with
biomass-based diesel, that are limiting these fuels. [EPA-HQ-OAR-2015-0111-1953-A2 p.40]
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W2Fuel LLC
The US EPA has also failed in many other aspects in the administration of the Renewable Fuel
Standard. It is increasingly difficult to respond to changing market conditions when the
administrative process for plant registration changes is taking 60, 90 and 120 days to complete in
some circumstances. Minor address and personnel changes in the Central Data Exchange (CDX)
are taking months to complete and holding up other important changes such as feedstock
registrations and engineering review updates. Being able to change feedstocks quickly is
important to enable the industry to remain profitable in all circumstances, however the US EPA
has a 2-4 year process of approving new pathways, even for feedstocks which for all intents and
purposes are identical to others already approved. [EPA-HQ-OAR-2015-0111-2053 p. 1-2]
Response:
Almost all the comments on this topic focused on the need for EPA to approve additional
pathways as eligible to generate RINs under the RFS program, especially for advanced and
cellulosic pathways. Some comments highlighted specific pathways EPA has not yet evaluated
while LanzaTech criticizes an EPA decision not to approve its pathway. NBB states that the
EPA has not relied on the cover crop pathway to approve new biofuel feedstocks and is
concerned the 2012 amendments to the cover crop pathway make it difficult for new feedstocks
to be approved under this pathway.
EPA appreciates that the addition of pathways adds to the diversity of feedstocks and fuel
production technologies that can contribute to the volumes of fuel produced under the RFS
program. EPA continues to qualify new cellulosic and advanced biofuel pathways and publish
analysis of feedstocks used in making advanced and cellulosic biofuels. A 2014 EPA rulemaking
added a new compressed natural gas/liquefied natural gas cellulosic biofuel pathway, added a
new cellulosic biofuel pathway for renewable electricity (used in electric vehicles) produced
from biogas, and expanded cellulosic pathways to include biogas from landfills, municipal
wastewater treatment facility digesters, agricultural digesters, and separated municipal solid
waste digesters. EPA continues to publish analysis of greenhouse gas emissions attributable to
the production and transport of feedstocks used to produce cellulosic and advanced biofuel,
including recent analysis of biomass sorghum, pennycress oil, carinata oil, cottonseed oil, and
jatropha oil. EPA also recently approved additional cellulosic and advanced biofuel pathway
petitions and continues to make significant progress on reducing the backlog of petitions under
review. Regarding the comment on approvals under the cover crop pathway, the amendments to
the pathway definition were adopted to clarify that the lifecycle assessment for cover crops
anticipated no land use change impacts and did not assess instances where the cover crop had
other marketable value. We believe this prior change to the regulations was technically
appropriate and was not revisited in this rule.
EPA notes, however, that approval of a pathway does not mean that fuel will be produced using
that particular pathway as there are currently a number of approved pathways that no producers
are using. Further, the approval of additional pathways was not proposed as part of this
rulemaking and is considered beyond the scope of this action
With regard to apparent delays in processing new registrations and registration updates, these are
oftentimes due to submissions to the EPA that are incomplete, inadequate, and/or inaccurate.
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This leads to an iterative review and resubmission process that can significantly increase the
amount of time it takes for parties to have new registrations or registration updates accepted in
the Central Data Exchange (CDX) system. The EPA has actively engaged responsible parties to
help improve submissions and subsequently speed up the processing times. For example, during
the summer of 2015, EPA hosted a series of webinars and a moderated question and answer
session for renewable fuel producers and third-party engineers.44 The RFS registration webinar
series highlighted problem areas that EPA identified as common across a large number of
submissions, and provided specific guidance on how renewable fuel producers and professional
engineers could improve registration submissions.
The EPA also developed and made available an electronic engineering review form to help
ensure that complete engineering reviews are submitted. EPA encourages renewable fuel
producers to use the electronic engineering review form as a way to help avoid omitting
information and facilitate a more timely review of new registrations or three-year updates.
The EPA will continue to work with renewable fuel producers to improve the completeness and
accuracy of registration submissions by providing more thorough guidance, planning future
enhancements to the CDX system, and proposing regulatory amendments to improve the
registration and review process
10.6.4 Ethanol Impacts on Engines
Comment:
American Sportfishing Association (ASA)
On behalf of the American Sportfishing Association (ASA), I am writing to express our
continued concerns with implementation of the Renewable Fuel Standard (RFS), specifically in
regards to the recently proposed ethanol targets for 2015 and 2016. Mounting research has
demonstrated the risk of ethanol to marine engines, and the ever-increasing renewable volume
requirements have put consumers at risk. [EPA-HQ-OAR-2015-0111-0424-A1 p. 1]
Half of all anglers use a boat as a means to fish, hence it is imperative to ensure safe fuels for our
industry members and the 46 million anglers that go fishing annually. Our main point of
contention with the RFS is not with the policy as a whole, but rather the ethanol provision and
inertia in fixing the policy. Safety and consumer costs are our top concerns. It bears reminding
that ethanol above 10 percent is corrosive to marine engines. At or below that concentration is
manageable but greater levels create problems in many different types of engines that would
deem it unacceptable for a regulatory agency to disregard.
Several published studies have demonstrated the negative effects of ethanol on engine durability
and performance. [EPA-HQ-OAR-2015-0111-0424-A1 p.l]
44 The webinars and other helpful registration guidance is available at:
http://www2.epa.gov/fuels-registration-reporting-and-compliance-help/three-vear-engineering-review-updates-
renewable.
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Anonymous Citizen 6
This would also affect the equipment employed by agriculture as well. Many operations run with
a tractor as its primary source of labor. By changing the type of fuel to be used, many farms
would have to buy all new equipment that may be out of their price range. Machinery like this is
not meant to be purchased every few years like a car is intended. Often, and investment on this
type of equipment is made to help the operation for over a decade in order for the proprietor to
receive its return investment. They cannot simply just use ethanol-based fuel as if it were
gasoline or diesel engines, as adding ethanol fuel increases wear and tear on the engine itself.
This type of deterioration is not realized in automobiles the same way because most car owners
do not own an automobile as long as a farmer will own a tractor. [EPA-HQ-OAR-2015-0111-
0113 p.2]
Atlantic Drywall
The proposed standards ask for an increasing amount of ethanol to be blended into gasoline and
this will damage engines, big and small, across the country. [EPA-HQ-OAR-2015-0111-1658-
Al p. 1]
Equipment which uses small engines power American lives from motorcycles for law
enforcement and transportation; utility vehicles for rescue, recreation and work; lawnmowers and
other landscaping equipment. According to the American Motorcycle Association, there are 22
million motorcycles and all-terrain vehicles (ATVs) currently in use. None of these 22 million
vehicles are on the EPA E15-approved list, nor are boats, snowmobiles, lawnmowers, chainsaws
or other small-engine equipment. Inadvertently, fueling small engine equipment could damage
the engine. [EPA-HQ-OAR-2015-0111-1658-A1 p. 1]
Board of Commissioners, Mercer County
There are significant reasons that mandated ethanol blend rates should be lowered. They include:
I. Higher ethanol blends could cause engine damage.'
• Testing by the auto and oil industries shows that 15% ethanol blends can damage engines
and fuel systems in newer vehicles that EPA has approved to use the fuel.
• Ethanol blends greater than El 0 could damage small engines, such as motorcycles, boats,
off road vehicles and small equipment (e.g., lawnmowers, snow blowers, leaf blowers).
• Automakers have told members of Congress they will not cover damage caused by El 5
under new car warranties. [EPA-HQ-OAR-2015-0111-1223-A1 p.l]
Conference of Professional Operators for Response Towing
Being in the business of coming to the aid of disabled and stranded boaters, many times due to
mechanical failures, we understand the dangers of ethanol to the boating public as well as to our
own vessels. Studies have proven that high level blends of ethanol can pose serious problems and
damage to marine engines. To date, there is no valid implemented plan or substantial
precautionary measures in place to prevent misfueling (a sticker on a pump will not prevent
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someone from inadvertently using the wrong nozzle) or to guarantee the availability of E10 or
lower fuels. Increasing the ethanol volumes will jeopardize millions of marine engines. [EPA-
HQ-OAR-2015-0111-1718-A1 p. 1]
Crawford County
There are significant reasons that mandated ethanol blend rates should be lowered:
1. Higher ethanol blends could cause engine damage.
• Testing by the auto and oil industries shows that 15% ethanol blends can damage engines
and fuel systems in newer vehicles that EPA has approved to use the fuel.
• Ethanol blends greater than E10 could damage small engines, such as motorcycles, boats,
off-road vehicles and small equipment (e.g., lawnmowers, snow blowers, leaf blowers).
• Automakers have told members of Congress they will not cover damage caused by El 5
under new car warranties. [EPA-HQ-OAR-2015-0111-1666-A1 p. 2]
Freedom of Road Riders and Motorcycle Riders Foundation (MRF)
As the motorcyclists, who are consumers of gasoline and gasoline/ethanol blends for our
motorcycles, our vehicles, and all our other power equipment, we are very concerned about the
amount of ethanol that is already in the gasoline that we are buying and worried about the
expansion of ethanol use in fuel. Manufacturers of motorcycles and ATVs recommend the use of
ethanol-free fuel in these vehicles. Increasing the amount of ethanol in fuel or expansion of the
types of ethanol fuel blends likely will create increased mechanical issues for motorcycles and
recreational power equipment. Fuel pumps that vend several types of fuel through the same
nozzle, or blender pumps, pose a definite hazard for motorcyclists. These types of pumps are
becoming more prevalent throughout the industry with this type of pump. When we fill up with
fuel, we are at the mercy of whoever filled up before us. If the person before us filled up with an
El5 blend, then about the first gallon we get will have ethanol in it. Keep in mind that some
motorcycles will only take about 2 gallons of gas. The gallon of blended fuel already in the pump
combined with the gallon of 100 percent gasoline ends with the equivalent ratio near that of an
E10 blender fuel in these small tanks, when the rider did not want any. We'll also willingly pay
the higher pump price for ethanol-free fuel. Yet we are still getting an unknown amount of
ethanol in the fuel we purchase through a blender pump. Even the manufacturers of our lawn
mowers, weedeaters, and chainsaws do not recommend any ethanol in our products.
Increasing the amount of ethanol allowed in fuel or adding higher ethanol options to pumps will
just make matters worse. Those of us who own or, more importantly, have to pay the price for
maintenance of engines, large and small, that are not designed to consume ethanol should
continue to be allowed the choice of 100 percent gasoline, unadulterated by the previous
consumer.
Greenville-Reynolds Development Corporation
There are significant reasons that mandated ethanol blend rates should be lowered. They include:
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1. Higher ethanol blends could cause engine damage.
• Testing by the auto and oil industries shows that 15% ethanol blends can damage engines
and fuel systems in newer vehicles that EPA has approved to use the fuel.
• Ethanol blends greater than E10 could damage small engines, such as motorcycles, boats,
off-road vehicles and small equipment (e.g., lawnmowers, snow blowers, leaf blowers).
• Automakers have told members of Congress they will not cover damage caused by El 5
under new car warranties. [EPA-HQ-OAR-2015-0111-3453-A1 p. 1]
Harrods Creek Boat Owners Association
100 percent of boats in service today are not designed or warrantied to use fuel that contain
ethanol. All vessel owners know about ethanol's adsorption of water. [EPA-HQ-OAR-2015-
0111-1841]
Mass Comment Campaign sponsored by American Motorcyclist Association (AMA) (web)
- (29,379)
This is troubling, because the EPA has publicly acknowledged that ethanol in gasoline can
damage internal combustion engines by increasing exhaust temperatures and indirectly causing
component failures. The statements are found in a 2014 Federal Trade Commission rule proposal
regarding a new label for pumps that supply fuel blends high in ethanol. [EPA-HQ-OAR-2015-
0111-2049-A1 p.3]
Mass Comment Campaign sponsored by anonymous 2 (web) - (2781)
As a member of the boating industry, I know the damage ethanol fuel can have on marine
engines-endangering the 88 million Americans who enjoy recreational boating each year. [EPA-
HQ-OAR-2015-0111-0079 p. 1]
Studies have proven that high level blends of ethanol, like El 5, can pose serious problems to
marine engines, including performance issues like stalling, corrosion leading to oil or fuel leaks,
increased emissions and damaged valves, rubber fuel lines and gaskets. [EPA-HQ-OAR-2015-
0111-0079 p.l]
Mass Comment Campaign sponsored by KeepAmericaFishing (web) - (5403)
Blends of ethanol over 10 percent cause serious damage to marine engines, and these damages
are not covered under warranty. The increase in ethanol is corrosive and forces engines to run at
a much higher temperature. Uncertainty about the quality of fuel available is unsafe to me and
my friends and family that I take out on the water. [EPA-HQ-OAR-2015-0111-2050-A1 p. 1]
Michigan Boating Industries Association
The U.S. Coast Guard has raised concerns about ethanol use in marine engines after testing
completed by the Department of Energy's National Renewable Energy Laboratory confirmed that
fuel blends containing more than 10 percent ethanol irreparably damages critical engine
components due to raised temperatures. El5 has the potential to cause significant problems for
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the engines in virtually every power boat in the country, impacting the 80 million Americans
who enjoy our nation's waterways each year, including more than 935,168 power boats in
Michigan alone. [EPA-HQ-OAR-2015-0111-3448-A1 p.l]
Miller, Denis
This is a stark contrast to the allegations made by big oil that El 5 would be dangerous to the
engines, when the fact I have been using E30 with no negative repercussions to my vehicles. The
performance especially on the oldest model, the 2001, when I started using E30, improved
dramatically. No significant change in gas mileage was noted.
National Association of Charterboat Operators
As a National Association we are actively involved with our members working to enhance the
recreational charter boat industry and to ease the regulatory and financial burdens from
regulatory agencies. A substantial number of our members own and operate gasoline powered
inboard and outboard vessels. These professional charter boat owners and operators will suffer
considerable economic hardship because of the proposed mandate to use a more expensive and
engine damaging higher ethanol content fuel in these marine engines. [EPA-HQ-OAR-2015-
0111-1812-A1 p.l]
Despite repeated industry requests, the EPA has not adequately addressed the danger of using
ethanol fuel in marine engines. Placing warning stickers on fuel pumps will not stop accidental
or inadvertent "mis-fueling" with E-15 which has been proven to cause engine damage and
failure. The use of E-15 in marine engines voids manufacture's warranties and causes engine
failure. Marine engine manufacturers have not designed engines to be able to safely run on E-15
gas. [EPA-HQ-OAR-2015-0111-1812-A1 p.l]
National Marine Manufacturers Association (NMMA)
The 2014, 2015 and 2016 RVOs proposal is additionally objectionable by the EPA's continued
failure to properly educate and warn the public on the effects of El 5 and higher blends of fuel.
Consumers remain woefully unaware of the existence of higher ethanol-blended fuels, let alone
the effects these fuels can have on their marine engines. Despite the industry's best efforts to
educate consumers, more needs to be done by the EPA to ensure that misfueling is never a
possibility. [EPA-HQ-OAR-2015-0111-1928-A1 p.4]
National Taxpayers Union (NTU)
According to AAA, 85 percent of vehicles on the road are not designed to use gasoline with
more than 10 percent ethanol, and 94 percent cannot use E85. Misfueling can cause major
damage and/or violate a vehicle's warranty. Boats, motorcycles, and other small engines are also
not equipped to use blends over E10. [EPA-HQ-OAR-2015-0111-3279-A1 p.l]
NH Energy Forum
Equipment which uses small engines power American lives - from motorcycles for law
enforcement and transportation; utility vehicles for rescue and recreation; lawnmowers and other
landscaping equipment. According to the American Motorcycle Association, there are 22 million
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motorcycles and all-terrain vehicles (ATV's) currently in use. None of these 22 million vehicles
are on the EPA E15-approved list, nor are boats, snowmobiles, lawnmowers, chainsaws or other
small-engine equipment. Inadvertently, fueling small engine equipment could damage the
engine. [EPA-HQ-OAR-2015-0111-0280-A1 p.l]
Office of Commissioners, Lawrence County, Pennsylvania
There are significant reasons that mandated ethanol blend rates should be lowered. They
include:
1. Higher ethanol blends could cause engine damage.
• Testing by the auto and oil industries shows that 15% ethanol blends can damage engines
and fuel systems in newer vehicles that EPA has approved to use the fuel.
• Ethanol blends greater than El° could damage small engines, such as motorcycles, boats,
off-road vehicles and small equipment (e.g., lawnmowers, snow blowers, leaf blowers).
• Automakers have told members of Congress they will not cover damage caused by EIS
under new car warranties. [EPA-HQ-OAR-2015-0111-3458-A1 p. 1]
Outdoor Power Equipment Institute (OPEI)
As expressed by OPEI in comments to the earlier 2014 RVO proposal1, the primary concern of
our industry is the continued lack of a robust Misfueling Mitigation Plan (MMP) regulation to
protect non-approved small engine products from harmful misfueling with mid-level ethanol
blends. In light of this shortcoming, the OPEI is concerned with the proposal to increase the total
renewable fuel volumes in both 2015 and 2016, which combined with the likely continued
decrease in domestic gasoline consumption, will necessitate growth in the availability of mid-
level blends starting with El5, and E85, at U.S. filling stations. In the absence of a strong Federal
MMP regulation, all non-approved engine products will be at risk. [EPA-HQ-OAR-2015-0111-
2492-Alp.l]
In 2013, the OPEI supported the EPA proposed reduction of the RFS mandates for 2014, as it
recognized the realities of the U.S. market place where fuel consumption is declining and a
supply of diverse biofuels has yet to materialize. Moving forward two years, we fail to see where
any of these variables have changed, and yet the subject proposal requires significant annual
growth in total renewable fuel volumes. In the proposal, this change in direction is largely
substantiated by the EPA's statutory obligation to be forward leaning, challenging the market to
increase production and use of renewable fuels. The OPEI urges the EPA to fully consider the
specific impacts to our industry and the hundreds of millions of consumers we serve, as the RFS
continues to be implemented. [EPA-HQ-OAR-2015-0111-2492-A1 p.l]
Compounding the problems of Federal RFS implementation are the layers of Federal, state and
local policies which further incentivize the introduction of El 5 and higher ethanol blends into the
general fuel supply, without the proper focus on protecting small engine products from harmful
misfueling. A recent example is the U.S. Department of Agriculture's announced program to
provide $100 million towards pump and infrastructure improvements necessary for expanded
mid-level ethanol blend market expansion. While the USDA program is most significant due to
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its scale, it is one of many when considering the various actions on-going by states and localities
to incentivize introduction of renewable fuels. All of these policies put the consumer at risk since
none are accompanied by adequate misfueling mitigation policies. [EPA-HQ-OAR-2015-0111-
2492-Alp.1-2]
As recognized by EPA in the 2010 and 2011 El 5 partial waiver decisions, all small engine
powered products are only EPA approved for use with gasoline blended with 10% ethanol or less
(E10). This recognition is based on mutually accepted Department of Energy (DOE) data which
validates that the introduction of alcohol in excess of 10% is inappropriate for small carbureted
engines, as it introduces excess oxygen resulting in increased heat, engine damage, and failure.
The testing further confirms that the increased amount of alcohol has a corrosive effect on engine
components, leading to damage and/or failure. The above-mentioned DoE data is further
supported by testing conducted by engine OEMs in our industry, as well as other affected small
engine manufacturers. [EPA-HQ-OAR-2015-0111-2492-A1 p.2]
Furthermore, increased levels of ethanol can also introduce unintended increases or surges in
engine RPMs, which may result in inadvertent clutch engagement and blade/cutting attachment
movement or increased blade/cutting attachment speeds. This phenomenon can both compromise
the performance of a machine and pose safety hazards. [EPA-HQ-OAR-2015-0111-2492-A1 p.2]
OPEI members are committed to alternative power sources, including renewable fuels, but
current small engine powered products, and the hundreds of millions of legacy products currently
in use are limited to blends of E10 or less. Product innovation to eradicate this limitation requires
a significantly extended timeframe under a highly predictable regulatory framework and fuel
market place evolution. Increasing the use of mid-level ethanol blended fuels in retail fuel
distribution as well as for future certification test fuel presents enormous risks, burdens, and
challenges to our member manufacturers and users. Small spark-ignited engines may ultimately
be designed to run on mid-level ethanol fuel blends, given adequate lead time for design changes
and assurance that the retail fuel ethanol content is within a limited and acceptable range of the
certification test fuel specified by EPA for emissions compliance. However, any consideration of
certification test fuel changes should recognize the significant investments and lead time required
of manufacturers. An extended time period would be required to complete design and
recalibration work as well as necessary consumer education programs for each new certification
test fuel. Therefore, small spark-ignited engine certification test fuel changes would need to be
nationally harmonized based on a limited number of re-design iterations, representative of
established and consumer accepted ("real world") fuels, not based on incremental changes as
potentially required by the Renewable Fuel Standard (RFS). This is acutely critical when
considering that according to EPA data our industry certified 1690 engine families in 2015. The
subject proposal for 2015 and 2016 serves as a good example of the incrementalism inherent in
RFS implementation, which runs counter to the needs of engine manufacturers. [EPA-HQ-OAR-
2015-0111-2492-A1 p.2]
Most significant of the problems associated with the RFS and the resulting impacts on our
industry is the potential volatility and non-harmonization of certification test fuels and
conventional retail fuel. This uncertainty will burden manufacturing and any potential for
product innovation, while also placing burdens on the consumer of small engine products.
Similar products each designed to operate on unique certification test fuels will add consumer
confusion and increase the potential of detrimental misfueling. OPEI has been supportive of the
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California Air Resources Board (CARB) decision to establish E10 certification test fuel
requirements for 2020 and later for small spark-ignited engines, and EPA's agreement to accept
CARB RFG III if manufacturers align with CARB CO standards. The OPEI has appreciated its
working relationship with the EPA, and applauds the actions taken to harmonize and provide
near-term certainty on certification fuels which is critical to assure that our member
manufacturers can plan, design and produce the products that the American consumer needs and
desires. Despite these accommodations, the long-term implementation of the RFS will continue
to pose challenges as consistency in certification fuels may be at odds with the unpredictable
variability of the general fuel supply. OPEI's members are committed to manufacturing
compliant products which meet all the quality and safety expectations of their customers. To
accomplish this goal, manufacturers require that the Renewable Fuel Standard is implemented in
a way to align the regulatory certainty of certification fuels with market certainty over the fuel
choices available to American consumers. Only under these circumstances, can manufacturers of
small engine products plan, design, and build their products. [EPA-HQ-OAR-2015-0111-2492-
Al p.2]
While the frontline concern of our industry with the RFS is to assure we manufacture compliant,
quality and safe products, the OPEI and its members are also equally committed to the education
of the consumer when they fill their small engine product at the pump. The subject proposal
gives only short mention to the EPA's 2011 Misfueling Mitigation Plan regulations, which the
OPEI believes are wholly inadequate to protect consumers from harmful misfueling of their
small engine products. The market presence of El 5 and other mid-level ethanol blends, without
adequate labels and misfueling mitigation controls, unfairly puts manufacturers and their
customers at risk. These include substantial warranty claims for illegal acts of misfueling
(beyond the manufacturer's control), particularly as El5 and other mid-level blends become
more prevalent in the marketplace. When consumer products are damaged, it harms the long-
established relationships between our member manufacturers and their customers as well as their
well-deserved brand recognition. The risks to manufacturers also include potential exposure to
alleged claims for personal injury and CPSC or EPA product recalls and product damage. [EPA-
HQ-OAR-2015-0111-2492-A1 p.2-3]
OPEI does not believe that the current EPA El 5 label serves as an effective tool in mitigating the
misfueling of outdoor power equipment and small engines with El 5. We urge EPA to require
increased clarity and uniformity in misfueling mitigation plans (MMP), beyond the approved
label. In developing its misfueling mitigation regulations, EPA recognized that "the El5 label
design should generally be uniform for easy identification and utility. Significant variations in
label design could thwart the goal of associating the label with El 5 and making the label readily
recognized and understood." (76 Fed. Reg. 44406, 44416 - July 25, 2011) OPEI is concerned
that multiple MMP approaches with non-descriptive and inconsistent labeling and notification
requirements will further confuse consumers. For example, "Configuration 2 A" of the
Renewable Fuels Association's (RFA) EPA-approved MMP requires new "signage" that advises
of the availability of non-E15 fuels at the retail station, but outlines no requirements for the
placement, language, size, color or font of the notification. OPEI urges EPA to require that the
same considerations established for EPA's own El5 label apply to all MMP labels and
notifications. This is of heightened importance with regard to the use of blender pumps, used to
dispense E10, E15, and other mid-level blends from a shared nozzle and hose. EPA's misfueling
control regulation has been insufficient, as it has approved MMPs for such blender pump use,
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without mandating signage/labelling to protect against the heightened risk of misfueling under
this retail scenario. [EPA-HQ-OAR-2015-0111-2492-A1 p.3]
The subject proposal also dedicates a significant amount of attention to price impediments
limiting the growth of E85 and El 5 entry into the market. The issue of price is an important
factor when considering the need for effective and consistent misfueling mitigation, since
consumers largely make choices based on price. In June of last year, OPEI provided comments
(attached) to a rulemaking by the Federal Trade Commission to improve the effectiveness and
consistency of fuel pump labelling. Important to the FTC proposal and central to the OPEI's
comments is the need for clear and consistent labelling with a focus on the quality and safety
aspects of fuel choices, instead of appealing to consumer instinct to focus on price. These
improvements are especially important in light of future infrastructure changes, especially with
the use of blender pumps where fuel choices may exceed five selections at a single pump, subject
to different approved uses. The OPEI urges intra-agency cooperation where possible which could
further strengthen the existing MMP regulations for El5 through the clear and uniform labelling
of pumps, focused on the safety and performance limitations of engine powered products. [EPA-
HQ-OAR-2015-0111-2492-A1 p.3]
To supplement the MMP efforts of EPA and others, the OPEI in 2013 at the request of its
members established an educational program and product labelling materials for use with their
respective dealers and retailers. The "Look Before You Pump" program, which is hosted at
www.opei.org, is intended to educate consumers about the fuel needs of their small engine and
outdoor power equipment products, and navigating the choices at the pump. The messaging
specifically reminds consumers to use E10 fuel or less in these products. This program is now in
use by OPEI manufacturers, dealers, and national retail outlets as an authoritative resource on
choosing the right fuel at the pump, and the overall importance of fuel choice and quality for the
small engine product. We encourage the agency and the public to review and use these materials
as appropriate. [EPA-HQ-OAR-2015-0111-2492-A1 p.3]
OPEI is concerned that the proposed increases to the RVOs for both 2015 and 2016 do not
reflect current (or near-term) market realities, and therefore run the risk of exposing non-
approved small engine products to a heightened risk of misfueling. Publicly available data
suggests that annual domestic gasoline consumption will continue to decrease, flex-fuel vehicle
demand will remain low, and advanced and "drop-in" biofuel production will remain modest. In
the absence of these market factors materializing, OPEI is concerned that longer-term RFS
targets will require EPA to approve the introduction of incremental increases of ethanol into the
general fuel supply, complicating further both the compliance requirements of manufacturers and
misfueling risks to consumers of outdoor power equipment and small engines. The certain
misfueling will result in economic harm to consumers and manufacturers, voided product
warranties, and potential injury to consumers. [EPA-HQ-OAR-2015-0111-2492-A1 p.3]
In closing, we urge EPA to subject this and all future RFS implementation policy to robust
rulemaking, taking into consideration the following:
a) a renewed focus on strengthening the Misfueling Mitigation Plan regulations to address
blender pump use, including Federal intra-agency efforts where possible;
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b) a commitment to the development and market entry of drop-in biofuels, suitable for safe use
in all legacy and new small engines and products; the indefinite availability of E10 fuel as
part of the general fuel supply, dispensed from dedicated pumps. [EPA-HQ-OAR-2015-
0111-2492-A1 p.4]
1 EPA-HQ-OAR-2013-0479; FRL-9903-10-OAR, FRL-9900-90-OAR
2 Federal Trade Commission, Fuel Rating Rule Review, 16 CFR Part 306, Project No. R811005
Pennsylvania Off-Highway Vehicle Association
None of the millions of all-terrain vehicles and dirt-bikes currently in use in the United States are
certified by the EPA to use fuels containing more than ten percent ethanol, and the inadvertent
use of fuels other than E 10 may cause engine or fuel system damage and void the manufacturers
warranty. [EPA-HQ-OAR-2015-0111-1941-A1 p.l]
All for a product that is known to cause component failures in small engines, does not produce
power comparable to gasoline, and is rife with other problems. [EPA-HQ-OAR-2015-0111-
1941-Alp.l]
Senate of Pennsylvania
Additionally, ethanol products are known to significantly deteriorate plastic, thus creating a
threat to automobiles, other vehicles, farm equipment, mowers, weed eaters and other machinery
that use gasoline. Furthermore, many manufacturer warranties are voided when ethanol is used in
their product. Why should the consumer be held responsible for this cost, when it is government
regulations that have mandated the use of more ethanol? [EPA-HQ-OAR-2015-0111-3447-A1 p.
1]
Sonoma Cycle
The proposed standards ask for an increasing amount of ethanol to be blended into gasoline
which is already damaging to small engines. [EPA-HQ-OAR-2015-0111-1930-A1 p.l]
Equipment which uses small engines powers American lives — from motorcycles for law
enforcement and transportation; utility vehicles for rescue and recreation; lawnmowers and other
landscaping equipment. According to the American Motorcycle Association, there are 22 million
motorcycles and all-terrain vehicles (ATV's) currently in use. None of these 22 million vehicles
are on the EPA E15-approved list, nor are boats, snowmobiles, lawnmowers, chainsaws or other
small-engine equipment. Inadvertently fueling small engine equipment could damage the engine.
[EPA-HQ-OAR-2015-0111-1930-A1 p.l]
Should this not be fixed it could have a detrimental impact on our business. We sell and service
motorcycles, ATVs and snowmobiles and this would make it more difficult for both sales and
servicing of our customers. [EPA-HQ-OAR-2015-0111-1930-A1 p.l]
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The Boat Owners Association of The United States (BOATU.S.)
It is important to recognize that recreational boats and marine engines operate under a very
different set of circumstances than automobiles. They are not used every day, are often stored for
long periods of time and, by their very nature, are in a wet environment. Additionally, marine
engines are generally kept in service far longer than automobile engines. As more ethanol has
been blended into the nation's fuel supply as a result of the RFS, these distinct characteristics
have led to significant problems for many boat owners. [EPA-HQ-OAR-2015-0111-2265-A1 p.
1]
Most boats do not get used every day. According to the U.S. Coast Guard's 2011 survey of
recreational boating, powerboats were used an average of 19.3 days per year1. This low usage
leads to fuel being stored for extended periods of time, increasing the opportunity for it to absorb
moisture. Given boats are in a wet environment to begin with, gasoline stored in boats' fuel tanks
are at much greater risk of absorbing moisture and having the ethanol/water phase separate,
which makes the fuel unusable and can severely damage an engine. [EPA-HQ-OAR-2015-0111-
2265-A1 p. 1]
We are also concerned with the likely increase in the number of blender pumps at gas stations.
We understand that a certain amount of residual El 5 remains in blender pump fuel hoses if a
previous customer selected it. This again raises the chance that amounts of ethanol higher than
10% will be put into a boat's engine and the boat owner will suffer its costly negative
consequences. Additional consideration should be giving to mis-fueling mitigation plans so as to
not unduly burden boat owners and protect marine engines. [EPA-HQ-OAR-2015-0111-2265-A1
p. 2]
One of the major benefits of BoatU.S. membership is access to our 24/7 on-the-water non-
emergency towing service. With over 600 boats in some 300 ports, our towers witness the
consequences of problems with fuel blended with ethanol every day. As Dave Hoblin with
TowBoatU.S. Old Saybrook, Connecticut put it "I would venture to say that perhaps 20% of my
tows are a result of ethanol fuel problems. Of that 20% of the ethanol tows probably 25% are
urgent because the vessel is drifting out to sea or in peril with drifting hard aground."[EPA-HQ-
OAR-2015-0111-2265-A1 p. 2]
1. NATIONAL RECREATIONAL BOATING SURVEY, United State Coast Guard Office of
Boating Safety 2012
Volvo Lexington Operation
As a member of the boating industry, I know the damage ethanol fuel can have on marine
engines endangering the lives and property of the 88 million Americans who enjoy recreational
boating each year.
Studies have proven that high level blends of ethanol, like El 5, can pose serious problems to
marine engines, including performance issues like stalling, corrosion leading to oil or fuel leaks,
increased emissions and damaged valves, rubber fuel lines and gaskets. [EPA-HQ-OAR-2015-
0111-0538-A1 p.l]
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As you know, this is illegal, as marine engines are prohibited from using El5 and higher blends.
Yet to date, the government has failed to implement any legitimate plan or precautionary
measures to prevent such misfueling or guarantee the availability of E10 and lower fuels. In
absence of a proven misfueling plan and the guarantee for safe fuels, the EPA simply cannot
increase the ethanol volumes without jeopardizing millions of marine engines.
Thus, I urge the agency to ensure that the blendwall isn't breached and that the boating industry
isn't threatened by dangerous fuels. [EPA-HQ-OAR-2015-0111-0538-A1 p. 1]
In my opinion the entire ethanol mandate is nothing more than a pork barrel project aimed at
sending money to the corn lobby. It cost American voters millions each year in damages to small
engines and lower mpg. [EPA-HQ-OAR-2015-0111-0538-A1 p.l]
Response:
While some commenters suggested there were no concerns with the use of higher level ethanol
blends in existing vehicles, others raised concerns about using gasoline with higher ethanol
blends such as El 5 (gasoline with up to 15% by volume of ethanol blended) due to the possible
harm it could cause to their vehicles, boats, motorcycles, and equipment/engine parts. Some
commenters provided specific examples of compatibility issues with engine and fuel system
components that they have observed due to ethanol. Some commenters wanted EPA to ensure
that the market will make available gasoline with no ethanol added (EO). Other commenters
noted that because ethanol has less energy per gallon than gasoline, use of gasoline with higher
ethanol blends could result in inconvenience for consumers to have to go fill up at gas stations
more often. Some commenters did not oppose use of renewable fuel in general, but expressed
concerns surrounding the potential for vehicle damage and consumer harm due to misfueling
with E15 (e.g. nonroad engines, or vehicles manufacturered before 2001) before appropriate
education has been conducted and proper protections are in place. These commenters suggested
that the current misfueling mitigation provisions and pump labeling provisions were inadequate.
One commenter suggested that EPA require retailers selling E15 to also continue to sell E10 to
mitigate concern over the spread of El 5 and the potential for misfueling.
In both the final rule and this RTC document, we discuss our estimates of anticipated gasoline
usage (including estimates for EO, E10, and E15 supply) as part of our exercise of the general
waiver authority and our determination of the volume requirement for total renewable fuel,
recognizing that there are some uses for which EO is preferred. For instance, see Section II.E.2
of the final rule and Section 2.6.2 of this RTC document. To the extent commenters are alleging
problems caused by ethanol in gasoline, the adequacy of the misfueling mitigation program for
El5, or related issues in order to request changes in misfueling mitigation, the El5 waiver
decision, or to seek new regulations guaranteeing the availability of EO or E10, such issues are
beyond the scope of this rulemaking (leaving aside the question of whether such actions would
be within EPA's statutory authority). Nevertheless, we understand the commenter's concerns
regarding compatibility issues of using high ethanol blends in some applications. We will
continue to take these comments under consideration as we work with industry, other private
stakeholders, and our government partners to help address and overcome challenges in the
production of renewable fuels and their supply to the vehicles that use them.
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10.6.5 Other Information and Ideas to Overcome Current Challenges
Comment:
American Coalition for Ethanol (ACE)
Markets cannot be "flexible" or "competitive" if EPA allows the REST market to decompress and
nonsensical restrictions against E15 continue to exist. EPA could remove a major restriction by
simply treating El5 the same way it treats E10 with respect to summer Reid Vapor Pressure
(RVP). Well over 90 percent of the gasoline sold during the low RVP season is E10, and
although El 5 has a lower RVP, EPA prevents marketers in most of the country from selling it
during the busiest time of the year. More than 30 years ago, a one-pound RVP waiver was
granted to E10. E10 was specified by lawmakers so the incentive only applied to the maximum
allowable amount of ethanol in gasoline. That maximum amount of ethanol allowable in gasoline
is now 15 percent for most vehicles, and as a bonus, the evaporative emissions of El 5 are lower
than those of E10. As long as the Agency continues to deny the one pound RVP waiver to El 5,
when marketers ask to sell a cleaner fuel during the busiest time of the year, EPA is telling them
"No. You must pollute more." [EPA-HQ-OAR-2015-0111-2543-A2 p. 7]
American Council on Renewable Energy (ACORE)
USEPA can and should take concrete steps to fulfill its statutory mandates under 202(1) and
21 l(c) of the CAA that will expand the market for biofuel. These steps include: (1) certifying a
high-octane ethanol blend of 20-45% on a volumetric basis; (2) determining that aromatics,
which comprise 20-30% of typical U.S. gasoline, are the primary source of the most dangerous
urban pollutants; (3) determining that FFVs, which run on any blend of ethanol up to E85, are an
available, cost-effective technology to reduce the aromatics content in all gasoline as required
under the CAA, Section 202(1); (4) requiring all new gasoline vehicles to be certified on this
new, cleaner fuel blend while restoring incentives for FFV and removing disincentives for their
production; and (5) as FFVs become more readily available in the market, using its statutory
authority under sections 202(1) and 21 l(c) to require a phase down of the VOCs in all gasoline
blends. [EPA-HQ-OAR-2015-0111-1926-A1 p. 11]
In addition, USEPA should grant the El5 and other mid-level ethanol blends the same one-
pound waiver for Reid vapor pressure (RVP) presently available for E10. [EPA-HQ-OAR-2015-
0111-1926-A1 p.12]
Archer Daniels Midland Company (ADM)
Beyond issuing a final rule with revised and more robust RVO levels for 2014 through 2016 for
ethanol, and 2014 through 2017 for biodiesel, there are additional steps EPA can take to help
support the goals of the RFS and assist in bringing additional volumes of renewable fuels to
market.
Under the current regulatory system, enhanced blends of ethanol up to 15 percent continue to be
limited to seasonal use due to the constraints of Reid Vapor Pressure rules. EPA could make
adoption of El 5 much easier by extending the 1 psi RVP waiver to blends up to 15 percent. The
current system limits the amount of qualifying gasoline in the marketplace and results in blends
up to El5 only being available on a seasonal basis.
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In regard to the 1 psi RVP waiver for E10, we believe EPA should be consistent in its treatment
of RVP requirements for all ethanol blends up to E15. EPA's initial decision to grant the 1 psi
RVP waiver to E10 blends was based on two fundamental findings: first, that supplies oflow-
RVP gasoline blendstock for El0 blending were insufficient; and second, that the increased
volatility associated with the 1 psi RVP waiver was more than offset by reduced carbon
monoxide and exhaust hydrocarbon emissions from E10. Recent analyses have shown that the
vapor pressure of E15 is lower than that of E10. Further, there is evidence that E15 provides
even greater reductions in carbon monoxide and exhaust hydrocarbon emissions than E10. It is
also likely that there is currently insufficient low-RVP gasoline blendstock to accommodate
broad [15 blending without a 1 psi RVP waiver.
Thus, the same two findings that led EPA to issue the 1 psi RVP waiver for E10 also apply to
E15. As such, if the 1 psi RVP waiver continues to apply to E10, there is no reason that it should
not also be applied to blends up to E15. E10 and E15 should be treated equally in the
marketplace with regard to RVP. This is a critical issue in the near term, as discrepancies in the
treatment of E10 and E15 have impeded the introduction of E15. [EPA-HQ-OAR-2015-0111-
2262-A1 p. 6-7]
Butamax Advanced Biofuels, LLC
Drop-in biofuels represent an exciting future for non-petroleum fuel and should be embraced by
the EPA as a key way to address the requirements of the RFS2. [EPA-HQ-OAR-2015-0111-
1938-A2p. 9-10]
Clean Fuels Development Coalition and the Nebraska Ethanol Board
The auto industry has consistently stated they will need higher octane fuels as they produce small
bore, high compression engines to meet fuel economy and greenhouse gas requirements. Octane
is derived from the aromatic compounds of petroleum refining. These compounds include known
and suspected carcinogens. The emissions of Ultra fine particulates represent an unregulated
health threat that can be avoided by utilizing ethanol and taking advantage of its high octane.
There is nothing in the refining toolbox of alkylates or reformates that can provide octane as cost
effectively as simply adding ethanol to finished E10 gasoline to make an E25 or and E30 fuel
blend. These fuels can be used in FFVs initially and then in newer cars that are likely to be
certified for blends up to 30% volume. EPA's failure to reduce aromatics as required by the
Clean Air Act is at best a lost opportunity to harmonize policy objectives whereby the RFS can
be the tool for multiple policy objectives. [EPA-HQ-OAR-2015-0111-2259-A1 p.3]
Environmental and Energy Study Institute (EESI)
If the agency approves the use of a mid-level blend as a test fuel, the fuel will reach commercial
availability, as there is great interest from the automotive industry to move to a higher octane-
rated fuel, as much of the rest of the developed world already enjoys. In the United States, the
lowest cost octane available is ethanol, and by resolving the test fuel issue, volumes of ethanol
consumed will increase. [EPA-HQ-OAR-2015-0111-1944-A1 p.6]
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In EPA's new CAFE standards, the credit for FFVs are significantly reduced, to the point where
auto manufacturers will no longer produce significant numbers of FFVs. [EPA-HQ-OAR-2015-
0111-1944-A1 p.6]
EPA requires state regulators to use the MOVES model to craft state implementation plans
(SIPs) for ozone. However, there is significant evidence that the underlying studies used to build
the recently updated model seriously mischaracterize the emissions from using ethanol-blended
fuels. According to auto engineers from Ford and GM, when ethanol is "splash-blended" with
gasoline, as it is at the refinery, it lowers the overall toxicity of emissions.18 Yet, EPA's studies
were conducted using a method called "match blending," which artificially controls certain fuel
parameters, and is not reflective of what happens at refineries. The net result is that ethanol is
labeled as worse for ozone and other emissions than gasoline. The perverse effect of widespread
use of this model would be to instead increase the most toxic portion of gasoline, gasoline
aromatics, instead of relying on clean forms of octane. [EPA-HQ-OAR-2015-0111-1944-A1 p.7]
Senator Daschle, along with Senators Dole and Harkin introduced the "Clean Octane"
amendment S. 1630, to the 1990 CAAA, which passed along with the other 1990 CAA
amendments. The Clean Octane amendment calls for the use of "benign additives to replace the
toxic aromatics that are now used to boost octane in gasoline." Over 20 years later, this intent has
not been fulfilled. While we have succeeded in removing some of the benzene added to gasoline,
it still contains at least 20 percent by volume of other aromatics, such as toluene, ethylbenzene
and xylene, which are converted to benzene, an aromatic compound, upon combustion. [EPA-
HQ-OAR-2015-0111-1944-A1 p.8]
Governors' Biofuels Coalition
Therefore, in order to expand the market for ethanol, the EPA should amend its rules and extend
the One-Pound Waiver to El 5 (and remove the RVP condition from the El 5 Waivers) and all
higher ethanol blends. This would eliminate the need for a separate low-RVP blend stock for
E15. A reasonable interpretation of the statutory One Pound Waiver—which applies to blends
containing "gasoline and 10 percent denatured anhydrous ethanol"— can be interpreted to mean
at least 10 percent ethanol. Accordingly, EPA should amend its One Pound Waiver regulation to
apply to El5 and higher blends. Another option is for the industry to ask Congress to amend the
Clean Air Act to make the One Pound Waiver expressly applicable to El 5 and higher ethanol
blends.
The easiest administrative approach to the broad expansion of the nation's ethanol market is for
EPA to amend its rules to allow for the splash blending of higher ethanol blends, including
E15. This will not occur in the market today because ethanol is an octane enhancer that
diminishes the need for petroleum-based aromatics. In fact, if EPA were to amend its rules and
allow the splash blending of more ethanol into gasoline, fewer emissions producing oil-derived
aromatic compounds would be required, and the resulting fuel would actually produce lower
emissions at a lower cost to consumers — exactly what Congress intended when it adopted the
Clean Air Act. [EPA-HQ-OAR-2015-0111-1722-A1 p.8]
EPA effectively eliminated FFV credits after model year 2016 when it adopted the GHG-CAFE
rule...Unfortunately, EPA only counts vehicle tailpipe emissions toward compliance with GHG
standards. EPA does not include complete life cycle emissions excluding emissions generated in
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the production and delivery of the fuel whether electricity, gasoline, natural gas or a renewable
fuel such as ethanol. As a result, all types of electric vehicles have "zero" emissions during
electric operation— this is clearly not the case when electricity production emissions are
included. A uniform approach for vehicle emissions standards will level the playing field. [EPA-
HQ-OAR-2015-0111-1722-A1 p.8-9]
EPA should enforce Sec. 202(1) of the Clean Air Act Amendments of 1990 by reducing gasoline
aromatics, similar to EPA's successful implementation of the ban on lead, and the transition from
leaded to unleaded gasoline. Congressional action is not needed. EPA has the authority to
reduce carcinogenic aromatics in gasoline, which can be cost-effectively replaced by high-octane
ethanol, without the need for tax incentives, import duties, or other mandates. [EPA-HQ-OAR-
2015-0111-1722-Alp.lO]
Growth Energy
EPA should grant a one-pound RVP waiver for El 5. The nine-pound RVP limit applies from
May to September. Unless made using low-RVP gasoline blendstock, ElS's volatility will
exceed 9.0 psi. Because low-RVP blendstock is scarce, EPA's denial of a one-pound waiver
effectively prevents the sale of El 5 during the summer months. Section 7545(h)(4) permits EPA
to waive the 9.0 psi limit by one pound, setting a maximum RVP limit of 10 psi for "fuel blends
containing gasoline and 10 percent denatured anhydrous ethanol." EPA has flexibly interpreted
that phrase to cover "blends of 9-10% ethanol."29 Although there is no scientific basis for
having a different RVP limits for El5, as El5 has a similar volatility to E10 and would behave
similarly in terms of evaporative emissions and effects on emissions-control devices,296 EPA has
interpreted section 7545(h)(4) not to permit a one-pound RVP waiver for E15.297 [EPA-HQ-
OAR-2015-0111-2604-A2 p.50]
295
76 Fed. Reg. at 44,43 5.
296 See Growth Energy Comments on E15 Misfueling Regulation, EPA-HQ-OAR-2010-0448-83,
at 15 (posted Jan. 4,2011).
297 See 76 Fed. Reg. at 44,433-44,435.
Illinois Corn Growers Association (ICGA) and Illinois Renewable Fuels Association
(IRFA)
1. Grant an RVP waiver for El 5 use in summertime conventional gasoline markets.
If the Administration was serious about the success of the RFS II and moving biofuels past the
blend wall, then a 1 psi Reid Vapor Pressure (RVP) for El 5 blended in summertime months in
conventional gasoline should have been approved. If this RVP waiver had been approved for
El5, we would not be writing comments today on a controversial proposal to reduce ethanol
volumes under the RFS II. Instead, these reduced volumes were proposed by USEPA to satisfy
the oil industry which decided not to buy the required ethanol gallons. This waiver would allow
petroleum marketers to use the same blend stock for E15 as they currently use in blending E10
which would further reduce the cost of fuel for consumers. An RVP waiver would also take a
huge millstone off the back of petroleum marketers who now have to decide if they can even
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blend El 5 as a conventional fuel in the summer months. By not granting this vapor pressure
waiver, USEPA has once again given the oil companies more monopolistic control over the
gasoline market at the expense of the consumers, petroleum marketers, and the biofuels industry.
The arguments for this waiver submitted by the ethanol industry (Renewable Fuels Association)
include the following points:
a. "When the EPA initially provided the waiver to 10% ethanol blends, it did so only after
exhaustive ozone air quality modeling that concluded the significant reductions in carbon
monoxide (CO) and exhaust hydrocarbons more than compensated for increased evaporative
emissions resulting from the increased volatility."
b. "With the increased recognition of the importance of CO reductions in preventing ozone
formation, the conclusion that the increased volatility from the ethanol blends will not result in
ozone formation is even more compelling and the waiver is even more justified today than it was
in 1989. Indeed, CO is a major ozone precursor (National Academy, 1999) and studies have
shown that CO can be equivalent to 25 to 50 per cent of the mobile-related contribution from
VOC."
c. "Finally, it is important to note that while evaporative emissions are not impacted by increased
ethanol content, the reductions in exhaust emissions are indeed greater with E15 than with E10,
further demonstrating the air quality efficacy of extending the volatility waiver to higher blends.
The gasoline blend stock must be compatible for both E10 and E15 if USEPA intends for E15 to
be a viable option in the marketplace." [EPA-HQ-OAR-2015-0111-1925-A1 p. 6-7]
2. Establish an adequate credit for the production of FFV vehicles under the CAFE rules of 2013
Unfortunately USEPA's CAFE/GHG rule is inconsistent with the RFS II regulations and the
EISA requirements to use 36 billion gallons of biofuels in 2022 and up to 15 billion gallons of
ethanol from corn starch by 2015. It would make sense for the RFS II and the CAFE rules to be
aligned to better accomplish their mutual goals of reducing petroleum usage and greenhouse gas
emissions in the transportation sector. As it stands now we recommend modifications to the
proposed rule in the following three areas to achieve a more balanced, technology neutral
approach to the control of fuel economy and greenhouse gas emissions.
• Allow vehicle and fuel technologies to compete on a level playing field to meet fuel
economy and GHG standards, rather than constructing credits to favor electric vehicle
technology over renewable fuels.
• Provide flexibility within the rule and integrate RFS2 requirements such that renewable
fuels can contribute to the greenhouse gas emissions reduction requirements in the rule.
• Provide incentives for the production of FFVs that are needed to consume RFS2
renewable fuel volumes. [EPA-HQ-OAR-2015-0111-1925-A1 p. 7]
3. Approve a new Exx certification fuel through the new Tier III standards
USEPA is currently reviewing comments concerning the proposed rules for TIER III standards
and will probably issue the rule shortly. There is a great opportunity to develop rules under Tier
III that would help the successful implementation of the RFS II,
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reduce emissions and allow the automobile companies to design engines around higher octane
fuels with higher blends of ethanol to increase efficiency, reduce emissions and increase
performance. EPA should approve an Exx certification fuel which allows the autos to design
around a higher octane fuel from higher blends of ethanol. It is important that the autos are
encouraged to design around this Exx with higher octane with higher efficiency allowances and
not penalized in efficiency ratings if the wrong fuel is used by the customer.
USEPA should also publish the rules for a new certification fuel that would replace the outdated
indolene as a certification fuel. This would help all manufacturers to warrant their vehicles on
El5 and would help small engine manufacturers in designing their engines on higher blends of
ethanol in the future. [EPA-HQ-OAR-2015-0111-1925-A1 7-8]
4. Approve liability protection to petroleum marketers regarding mis-fueling concerns and
equipment compatibility
USEPA could have also limited the liability for the petroleum marketers selling El 5 within the
USEPA guidelines for the waiver. This would have protected the petroleum marketers from
misfueling with El5 and compatibility issues. This protection would have increased significantly
the number of stations offering El 5 helping to break the blend wall. Now the petroleum
marketers are taking a wait and see attitude to lower their risk of uncertainty and exposure.
[EPA-HQ-OAR-2015-0111-1925-A1 p. 8]
Minnesota Bio-Fuels Association (MBA)
EPA should also consider factors within the fuel supply chain. For instance, the EPA could
address the Reid Vapor Pressure (RVP) factor so as to enable the legal sale of El 5 throughout
the entire year rather than for merely a nine-month period from September 16 through June 15.
The EPA already has the administrative authority to immediately resolve the RVP barrier to E15.
Other barriers which need to be further addressed is having greater access to an adequate supply
of competitively priced blend stock and eliminating the summer Reid Vapor Pressure blockage
forE15. [EPA-HQ-OAR-2015-0111-1936-A1 p.8]
National Corn Growers Association (NCGA)
The Agency must use its regulatory authority to grant a 1.0 p.s.i. Reid Vapor Pressure (RVP)
waiver to E15 blends. E15 has a lower RVP than E10 making it a superior fuel for consumers. In
addition, granting the RVP waiver will allow year-round sales in Attainment areas. [EPA-HQ-
OAR-2015-0111-1939-A1 p.9]
Urban Air Initiative
The Blend Wall may look insurmountable on the surface, but the Clean Air Act gives the
Agency a relatively painless way out, as explained below. EPA can and should certify a mid-
level ethanol blend (e.g., E30), as originally proposed in the Agency's Tier 3 rulemaking , and
take further steps to make such a fuel available in the marketplace. Specifically, the agency
should restore a meaningful CAFE credit for flex-fuel vehicles (FFVs); correct the R-factor for
ethanol blends to no less than 1.0; extend the one-pound Reid Vapor Pressure (RVP) waiver to
E10+ blends; set a future model year by which all new vehicles must certify on the mid-level
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ethanol blend; and exercise its mandatory authority to regulate air toxics by controlling the
aromatic hydrocarbon content of fuel (Sec. 202(1) of the Clean Air Act), thereby driving a shift to
clean octane. Such a shift would, over time, absorb the statutory RFS volumes and then some (as
the marketplace made an orderly transition to low carbon, high octane gasoline to power more
efficient, higher compression engines). By taking this action, the Agency would not only comply
with mandatory statutory requirements, it would prevent thousands of needless deaths and other
costly health disorders every year, reduce our dependence on foreign oil, and save consumers
billions of dollars at the pump. [EPA-HQ-OAR-2015-0111-1821-A1 p.2]
At one point, EPA appeared to have opened the door to a win-win-win solution to the RFS
impasse in its Tier 3 rulemaking. EPA's Tier 3 notice of proposed rulemaking acknowledged
ethanol's excellent octane boosting properties, and asked for comment on whether it should
approve an E30 (30% ethanol - 70% gasoline) blend certification fuel3. A recently published
study by Department of Energy scientists at Oak Ridge National Laboratory (ORNL) confirms
E30's many advantages as a high-octane fuel for high performance spark ignition engines. What
is especially striking about the ORNL study is that it ties together Tier 3, the RFS, and CAFE
(Corporate Average Fuel Economy) regulations in a scientifically sound and logical sequence.
The study finds that 'midlevel ethanol blends—such as E30' are 'the enabling technology' for
'near-term increases in vehicle efficiency and reductions in CO2,' such that they 'could enable
simultaneous compliance with RFS II and CAFE' and even 'set the sustainable transportation
trajectory to extend beyond the requirements set by RFS II and CAFE legislation.'4 The study
explicitly notes that the certification fuel that determines CAFE and greenhouse gas emissions
compliance 'is currently up for debate,' and cites EPA's Tier 3 rulemaking.5 Unfortunately,
however, EPA's Tier 3 Final Rule failed to take advantage of this ripe opportunity to kill several
birds with one stone. [EPA-HQ-OAR-2015-0111-1821-A1 p.3]
The nation now stands at a critically important juncture in transportation fuels and vehicles
regulatory policy. EPA has before it an unprecedented opportunity to encourage technologically
available, cost-effective demand-side policies (e.g., creating a level playing field for ethanol to
achieve octane value parity, and enabling a nationwide system of flex fuel cars and pumps). The
right policies could have already set in motion an orderly transition to a transportation fuels
system capable of absorbing the steadily increasing volumes of renewable fuels that Congress
has decreed. This would have obviated the need for this highly controversial proposed rule.
Encouraging the commercialization of high-octane, clean-burning E30 blends will enable a
nationwide flex-fuel transportation fuels system in the U.S. (like that in Brazil), offer consumers
freedom of choice at the pump, and save the nation billions of dollars per year in lower health
and gasoline costs. [EPA-HQ-OAR-2015-0111-1821-A1 p.3]
Clean Octane Solutions Offer the Way Out of the Blend Wall Trap. In the 100 years since
the advent of the automobile, carmakers have pleaded with the oil industry and regulators to
provide it with cost-effective, environmentally safe octane boosters. In its July 1, 2013, Tier 3
comments, Mercedes Benz told EPA that '[o]ctane is the single most important property of
gasoline when determining engine design.' In a May 5, 2013, New York Times article, a
Mercedes engineer said that E30 blends would provide car owners with 'ridiculous power and
good fuel economy.'10 Ninety years previously, in a 1923 paper, Ford and GM engineers lauded
ethanol's superior octane characteristics, and confirmed that 30% ethyl alcohol blends (e.g., E30)
had the same octane punch as 3 grams of tetra-ethyl lead, or 40% 'benzene' (one of the aromatic
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group compounds, also known as BTX). Since both lead and BTX were known to be harmful to
health, Ford and GM proposed using ethanol as the octane booster of choice. However, Standard
Oil had other ideas, and the U.S. and world ended up putting poisonous lead in its gasoline for
decades until the tragic health consequences could no longer be ignored. [EPA-HQ-OAR-2015-
0111-1821-A1 p.5]
The comments UAI and the Energy Future Coalition submitted with regard to the proposed Tier
3 rule15 reinforced these points with extensive citations of the health literature and automaker
studies that conclusively show that mid-level ethanol blends, such as E30, are the most cost-
effective way for EPA's rule to 'reflect the greatest degree of emissions reduction achievable
through the application of technology which will be available' as required by the Clean Air Act
Amendments of 1990. [EPA-HQ-OAR-2015-0111-1821-A1 p.7]
Recent Developments Show Potential for Progress. On May 5, 2015, EPA's Mobile Source
Toxics Review Subcommittee considered the benefits and challenges of higher octane
gasoline.16 In his presentation, Paul Machiele, EPA's Director of Fuels in Ann Arbor, laid out
his view of how EPA could open the door to higher octane gasoline under Sec. 21 l(c) of the
Clean Air Act. He described a laborious process that would take ten years or more to initiate and
implement. Unfortunately, for automakers to get the higher octane fuels they need to better
comply with the fuel economy and carbon reduction standards in 2025 and beyond, EPA cannot
afford any further delay. Since a multi-year transition will be needed to introduce a new, higher
octane fuel, it must start very soon to be of value and will require a purposeful and coherent
regulatory strategy. [EPA-HQ-OAR-2015-0111-1821-A1 p.7]
For that reason, UAI respectfully urges EPA to look to other provisions in current law that
empower it to regulate gasoline octane levels. For example, UAI believes that section 202(1) is
far superior to 21 l(c) as a statutory basis for such regulation. Section 21 l(c) is discretionary
('may'), whereas 202(1) is mandatory ('shall'). Section 21 l(c) requires an endangerment finding
('in the judgment of the Administrator . . . may reasonably be anticipated to endanger the public
health or welfare'), whereas 202(1) requires only the presence of 'hazardous air pollutants.'
Section 21 l(c) requires 'cost benefit analysis,' including comparison with other control
technologies 'which are or will be in general use,' whereas Section 202(1) is technology-forcing
and introduces cost only in determining which technology will be available ('which the
Administrator determines reflect the greatest degree of emission reduction achievable through
the application of technology which will be available, taking into consideration . . . costs').
[EPA-HQ-OAR-2015-0111-1821-Alp.7-8]
EPA has indicated that another MSTRS workshop on higher octane gasoline may be held in
December of this year. UAI respectfully urges EPA to seriously consider how Section 202(1)
could be used to promote an orderly transition to a new, higher octane fuel. [EPA-HQ-OAR-
2015-0111-1821-Alp.8]
Another recent development that further validates these comments was the July 14, 2015 release
of the previously mentioned Argonne National Labs study on WTW GHG reductions of high
octane fuels (see footnote 7). Its conclusion states that 'ethanol can be a major enabler in
producing HOF [high octane fuel] and result in additional reductions in WTW GHG emissions
when compared to regular E10 gasoline'. The study identifies the two most critical fuel blending
specifications as RVP and octane. On p. 5, the study notes that refinery reformers, when operated
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at high severity to maximize octane levels, produce a smaller volume of product with a higher
octane and a higher RVP. [EPA-HQ-OAR-2015-0111-1821-A1 p.8]
From a refinery economic perspective, the tradeoff is problematic: producing more aromatics to
increase gasoline octane reduces product yields and thus reduces profit margins. However, using
higher levels of ethanol to displace aromatics alleviates this problem, because adding more
ethanol substantially increases octane while at the same time it reduces the blend's RVP. From a
human health and environmental perspective, EPA should be eager to implement policies that
reduce levels of gasoline aromatic hydrocarbons. In fact, it is legally bound to do so. [EPA-HQ-
OAR-2015-0111-1821-A1 p.8]
Within the refinery, key high-octane and low-RVP blendstocks are reformate and alkylate.
However, there are limitations to both, and both show approximately 20 vol. % shrinkage. The
Argonne experts identify ethanol—a blending component that is external to the petroleum
refining process—as another excellent high-octane, low-RVP blendstock when it is used in the
correct concentrations, e.g., E30 and higher. They note that other studies have reported that 100
RON gasoline can be produced by blending 91 RON BOB (blendstock for oxygenate blending)
with E30. Argonne found that the blending octane value (BOV) for ethanol increases to 121 with
higher levels of ethanol, e.g., E25 and E40. This is far superior to other commercially available
octane enhancers. [EPA-HQ-OAR-2015-0111-1821-A1 p.8]
In addition, Argonne found that adding more ethanol to the blend enables a rapid reduction in the
gasoline's RVP. Thus, E30's RVP is lower than that of E10, and is only half a pound higher than
that of EO. E40's RVP is very close to parity with that of EO. Argonne noted that the 2014
Hirshfeld study concluded that the 'impact of the 1-psi waiver was proven to be miniscule at a
higher ethanol blending level'. Consequently, Argonne assumed no one pound waiver for E25
and E40 gasoline. [EPA-HQ-OAR-2015-0111-1821-A1 p.8]
Argonne frequently references the 2014 MathPro - auto LP study, which found that using E30 to
produce 100 RON high-octane gasoline results in a 60% reduction in aromatic hydrocarbons.
From a GHG perspective alone this is significant. EPA says that aromatic hydrocarbons are 25%
more carbon intensive than gasoline itself. Consequently, it would seem that the ethanol in E30
should be given credit for a 15% reduction in GHG emissions for its aromatics displacement
alone (automobile exhaust system/three way catalysts do not effectively capture the aromatics'
combustion by-products, see 2014 Robinson - Maricq study on SOA emissions, Appendix A).
[EPA-HQ-OAR-2015-0111-1821-A1 p.8][Appendix A can be found in Docket # EPA-HQ-
OAR-2015-0111-1821-A2]
Thus, EPA can cost-effectively and simultaneously achieve several important goals by reversing
course and enforcing the law as Congress intended: 1) provide automakers with the higher-
octane fuels they have requested; 2) facilitate compliance with the new fuel efficiency and
carbon reduction rules; 3) substantially reduce harmful urban emissions of PM2.5, UFP-borne
and SOA-bound PAHs, BETX, and black carbon; and 4) cost-effectively comply with mandated
renewable fuels consumption targets as set forth in RFS2. To make all of these desirable things
happen, EPA should use its considerable powers under Sec. 202(1) to require 'clean octane' E30
blends, flex fuel cars, and flex fuel pumps and infrastructure, just as it did so successfully in the
even more difficult transition from leaded to unleaded gasoline 30 years ago. [EPA-HQ-OAR-
2015-0111-1821-Alp.8-9]
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Recommended Near-, Mid-, and Long-Term Actions by EPA. Congress has spoken clearly, and
the best available science is irrefutable: Gasoline aromatic hydrocarbons and the potent MSAT
emissions they cause impose enormous damage on the public health and welfare. Numerous
benefits will result if they are reduced and replaced by high-octane, clean-burning ethanol,
commensurate with the levels required by the RFS. EPA has all of the authority it needs—indeed
EPA has the legal obligation—to take the actions set out below. Once it does, the E10 Blend
Wall will be a thing of the past, and the nation will have achieved a rare win-win-win: cleaner air
and better health; higher quality gasoline at a lower cost; and a market-driven, robust renewable
fuels industry consistent with the RFS targets set by Congress. [EPA-HQ-OAR-2015-0111-
1821-A1 p.9]
-Extend RVP waivers to E10+ blends.
-Encourage a nationwide flex fuel transportation system—clean octane fuels, cars, and pumps—
just as Brazil has successfully done.
-Establish an E30 certification and commercial gasoline system.
-Correct EPA's flawed models, especially the MOVES2014 model, so that gasoline aromatic
hydrocarbons' true contributions to BTEX, PM2.5 SOAs- UFP-borne PAHs, and NOx emissions
are fully accounted for and reported.
-Ensure market-driven access and maximize consumer choice by leveling the playing field for
ethanol's 'Clean Octane' vs. toxic aromatics' 'Dirty Octane'. [EPA-HQ-OAR-2015-0111-1821-
Al p.9]
9 _
Control of Air Pollution from Motor Vehicles: Tier 3 Motor Vehicle Emission and Fuel
Standards, 78 Fed. Reg. 29816, 29825 (May 21, 2013) [hereinafter "Proposed Tier 3 Rule"],
available at http://www.gpo.gov/fdsys/pkg/FR-2013-05-21/pdf/2013-08500.pdf
378Fed. Reg. at 29825.
4 "Experimental Investigation of Spark-ignited Combustion with High-Octane Biofuels and
EGR", Splitter and Szybist, Oak Ridge National Laboratory, Energy & Fuels, American
Chemical Society, Revised: December 21, 2013.
5 Id.
10William H. Woebkenberg, Mercedes-Benz senior engineer for fuels policy in the United States,
quoted in Matthew L. Wald, Squeezing More From Ethanol., N.Y. Times, May 3, 2013, at AU4,
available at http://www.nytimes.com/2013/05/05/automobiles/squeezing-more-from-
ethanol.html?_r=0.
15Comments of the Energy Future Coalition and Urban Air Initiative on the U.S. Environmental
Protection Agency's Proposed Rule: Control of Air Pollution from Motor Vehicles: Tier 3
Motor Vehicle Emissions and Fuel Standards. Docket ID No. EPA-HQ-OAR-2011-0135 78
Fed. Reg. 29816 (May 21, 2013).
16http://www2.epa.gov/caaac/mobile-sources-technical-review-subcommittee-meeting-may-5-
2015
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Response:
We recognize that the marketplace must overcome a number of challenges to fully realize the
potential that exists from the increased volumes of renewable fuels. We also recognize that the
RFS program plays a central role in creating the incentives for realizing that
potential. Accordingly, the standards being set today require that significant progress is made in
overcoming those challenges. At the same time, other tools, programs, and actions also have the
potential to play an important complementary role. Commenters provided ideas and suggestions
on an array of such complimentary actions that they believed should be taken by EPA, Congress,
or others, such as addressing the differing gasoline volatility (Reid Vapor Pressure) requirements
for E10 and E15 so they can be produced using the same gasoline blendstock, establishing
standards, incentives, and/or requirements for mid-level ethanol blends, requiring the
certification of all vehicles on higher level ethanol blends (to be FFVs), approve liability
protection to petroleum marketers regarding mis-fueling concerns and equipment compatibility,
putting in place higher gasoline octane requirements or controlling the aromatic content of
gasoline to encourage greater ethanol use, putting in place greater incentives for FFVs under the
greenhouse gas and fuel economy (CAFE) rules through various means, approving new
certification fuels, and revising the emission inventory models. While these comments are
beyond the scope of this rulemaking and in several cases beyond the authority of EPA, we will
take these comments into consideration as we work with industry, other private stakeholders, and
our government partners to help address and overcome challenges in the production of renewable
fuels and their supply to the vehicles that use them.
Many of the suggested actions are directed at expanding the market opportunity for ethanol to be
used in concentrations higher than 10% to allow volumes to increase beyond the E10 blendwall.
There is already a tremendous amount of effort being expended in the marketplace to support
this, driven in large part by the RFS standards. The standards in the final rule go beyond the E10
blendwall, providing not just an incentive, but an obligation to make changes in the marketplace
to accommodate higher level ethanol blends, and/or introduce greater volumes of non-ethanol
biofuels. Many companies are continuing to invest in efforts ranging from research and
development to the construction of commercial scale facilities to increase the production
potential of next generation biofuels. Many of these projects have received financial support
from government programs, including the recently implemented USDA BIP program providing
states up to $100M to encourage the use of gasoline pumps that blend high amounts of ethanol
into the fuel.
10.6.6 Changing the Point of Obligation
Comment:
American Fuel & Petrochemical Manufacturers and American Petroleum Institute
If EPA wants maximum renewable fuels blended, it should move the point of obligation to align
with the point where compliance is more likely achieved (i.e., the point of blending), so every
blender has increased incentives to blend. [EPA-HQ-OAR-2015-0111-1948-A1 p.21]
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Crimson Renewable Energy LP
Both the proposed rule and its supporting documentation analyzed market economics associated
with RIN pricing. However, these analyses fail to recognize that under the current RFS program
current structure, pricing alone has not created the consistent market for renewable fuels that
EPA envisions. In order to achieve RFS program objectives and volume obligations, renewable
transportation fuels need to be blended with petroleum based fuels at bulk fuel terminals, most of
which are not at the refineries, on a pervasive basis. While refiners and importers of petroleum
based transportation fuels that are the current RFS obligated parties are often position holders at
non-proprietary bulk fuel terminals and in some cases operate a bulk distribution rack at the
refinery, in many cases the majority of fuel volumes at bulk fuel terminals are controlled by
market participants who are not RFS obligated parties. Such non-obligated parties don't have a
requirement to blend renewable fuels and may not have sufficient financial incentive to blend
renewable fuels beyond what they are required to do at the state level. However, it is those
parties who control whether and how much renewable fuel is blended and also have the
necessary leverage with the terminal owner/operator regarding whether investments are made in
fuel blending infrastructure.
Furthermore, these non-obligated parties are directly incentivized to blend less than the
mandated levels to maximize their RIN revenues and total return on existing blending necessary
for state-level requirements and, contrarily, have a direct disincentive to expand infrastructure
and blending (B5+, E85) because meeting the mandate level decreases RIN profits generated
from being a non-obligated party. This is especially clear when the industry confronts a potential
ethanol "blend wall" and when ample biodiesel production capacity and supply exists to support
significantly higher blend levels but additional capital or marketing is required to utilize greater
volumes of renewable fuels and generate the RINs necessary to successfully meet RFS program
objectives. In order to break through the ethanol blend wall and blend more of biomass-based
diesel and other types of advanced renewable fuels, blenders need to be incentivized to maximize
the blending of renewables into the market.
As a producer of renewable fuels, we have seen the impacts of limited availability of blending
infrastructure and the direct disincentive or lack of need to expand biodiesel blending
infrastructure. We have simply been locked out of making biodiesel sales in these locations.
However, if the blending infrastructure at the bulk terminals was indeed pervasive and/or if the
requirement to blend renewable fuels existed at the terminal and applied to all bulk fuel position
holders, the economy of scale for terminal infrastructure projects would be hugely improved
nationwide, which would in turn provide stronger blending economics and increasing market
competition by leveling the playing field, and thus ultimately increase the renewable fuels
customer base.
Based on our 8 years of experience in the biomass-based diesel market, our opinion is that
blending infrastructure must be pervasive in every fuel market in the United States in order to
achieve higher blend levels and greater utilization of currently available renewable fuels. This is
clearly not happening in the case of biodiesel. We strongly believe that some type of mechanism
is needed to ensure that blending infrastructure is pervasive nationwide. This could mean a
change in RFS to shift from a volume based approached applied to obligated parties to a
requirement that every gallon of transportation fuel have a certain renewable fuel content or
achieve a certain performance standard in terms of carbon reduction. Another type of forcing
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mechanism worth very serious consideration is a shift in application of RFS obligations to
encompass position holders at bulk fuel terminals as opposed to only the producer and importer
of petroleum based fuels.
We strongly believe that the evolution of renewable transportation fuel market in California is an
excellent example how the market has behaved before and after a forcing mechanism have been
implemented, and is worthy of serious consideration by the EPA. The ethanol market in
California really took off only when MTBE was banned as a oxygenate for gasoline. As a result,
the entire gasoline wholesale value chain worked very quickly to make ethanol blending
pervasive statewide. In 2010, California Air Resources Board (CARB) began implementation its
program to regulate greenhouse gases2 in transportation fuels and among industrial emitters. Part
of this was the Low Carbon Fuel Standard, a performance-based standard requires producer of
importers and petroleum based fuels to reduce the GHG/carbon content by a certain percentage
each year and allows of the transference of this obligation to a downstream bulk, above the rack
customer. In practice, compliance at the rack, rather than the refinery, has become the rule, as it
has become the ubiquitous practice for purchasers of blendstocks to assume the LCFS obligation
corresponding to the product they purchase.
CARB subsequently implemented its Cap-and-Trade program,3 whereby the entity that owns title
to the product at the bulk distribution terminal/rack, i.e. the blender, must obtain and surrender
allowances or offsets for CO2 emissions attributable to the regulated fuels4 they sell into the
California market. Specifically, CARB imposes this obligation on the entity that owns title to the
product at the distribution rack—i.e., the blender.5 In explaining its rationale for establishing the
reporting and compliance obligation based on ownership of the product at the rack rather than
with refiners and importers, CARB staff noted that "the refinery is not a workable point of
regulation for purpose of fuel supplier reporting for cap-and-trade for most of the fuel delivered,
since refineries are often not aware of the final destination of fuels they produce."6 CARB made
this policy determination even though the administrative burden associated with regulating the
relatively small number of refiners operating in California might have been easier.
It has been our observation that the LCFS and Cap and Trade regulations has created a powerful
incentive at the terminals (regardless of whether they were affiliated with a refinery or
independent) to invest in and expand the infrastructure for blending renewable fuels. Further, the
incentive for the owner of petroleum based fuels at each of these terminals that needs to blend
low-carbon-intensity fuels in order to generate the required LCFS credits is evidenced by the fact
that reporting parties generated a net total of 3.5 million metric tons of excess LCFS credits
through the end of the second quarter of 2014.7 We believe the requirement for blending at the
bulk fuel terminals has created an environment that has allowed our biodiesel to gain wide access
to these terminals. In fact, Crimson has had an easier time marketing our renewable fuels and
optimizing our fuel price and usage in California than would be possible in other states due to
how LCFS is implemented at the bulk fuel terminals. We would contrast that to the RFS
program, where we, and the industry, still find difficulty penetrating several markets.
To summarize, EPA has repeatedly stated on the record that one of the primary goals of the RFS
program is to increase the production and consumption of renewable fuels. Yet the current
structure of the RFS has not led to maximization infrastructure investment and renewable fuel
penetration, and indeed in some ways (i.e. how the RFS obligation is structured) may actually be
an obstacle to achieving the stated goals. As EPA is well aware, there is more biofuel production
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capacity than the market is currently utilizing to supply domestic renewable fuel blending. This
is a function of both 1) the current situation with the renewable fuel obligations being set at
levels well below production capacity, and 2) the current structure of RFS that does not ensure
pervasive blending at the bulk fuel terminals and may in fact be incentivizing certain refiners to
continue to hold a surplus of RINs, which in turn will mean there is little incentive for those
parties to undertake projects to increase biodiesel blending, just like they will not have an
incentive to try to penetrate the blend wall for ethanol. Modifying the RFS to ensure across the
board blending at all bulk fuel terminals would not require a fundamental change to the
regulations. Rather, EPA would merely be changing the way the RFS is implemented to a
structure where blending is taking place at each terminal, and thus all owners of petroleum based
fuels at the terminals are positioned equally at the rack. We believe strongly that this creates the
greatest potential for maximizing renewable fuel use while avoiding excessive REST price spikes,
and moves all of us closer to the market scenarios EPA envisioned. [EPA-HQ-OAR-2015-0111-
1823-A1 p.3-6]
See California Global Warming Solutions Act of 2006 (Assembly Bill 32); Governor's
Executive Order S-01-07 (Jan. 18, 2007).
3 17 CCR §§ 95800-95490.
4 Fuels subject to cap-and-trade obligations include liquefied petroleum gas and natural gas, as
well as gasoline and diesel.
5 The "covered entity" subject to cap-and-trade obligations for gasoline and distillate fuels is the
"Position Holder," defined as "an entity that holds an inventory position in motor vehicle fuel,
ethanol, distillate fuel, biodiesel, or renewable diesel as reflected in the records of the terminal
operator or a terminal operator that owns motor vehicle fuel or diesel fuel in its terminal." 17
CCR §§ 95802(a)(203), 9581 l(d).
6 California Air Resources Board, "Initial Statement of Reasons for Rulemaking: Revisions to
the Regulation for Mandatory Reporting of Greenhouse Gas Emissions Pursuant to the California
Global Warming Solutions Act of 2006" (Oct. 28, 2010) at 69.
7 California Air Resources Board, "Initial Statement of Reasons for Rulemaking: Proposed Re-
Adoption of the Low Carbon Fuel Standard," Dec. 30, 2014, at ES-3.
CVR Refining, LP (CVRR)
CVRR believes that by changing the obligated party under RFS from refiners to blenders, EPA
can (i) place the obligation on the parties best suited to maximize the increased use of renewable
fuels, (ii) create a more transparent and predictable RINs market, and (iii) virtually eliminate the
secondary market and price volatility inherent in the current system today. This is supported by
the following points. [EPA-HQ-OAR-2015-0111-2500-A1 p. 1]
• The price of renewable fuels is market driven (not mandate driven). In the case of
ethanol, its price currently incents maximum blending as determined by the market's
demand. With these economics, if there were a customer-driven market demand for E85,
at current ethanol prices, the free market would fill that demand.
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• Refiners, and more specifically, merchant refiners, have little impact or control over
RINs even though they hold all of the current obligations. The blending of renewable
fuels (and the generation ofRINs) occurs further downstream, closer to the retail
marketplace. In addition, refiners ship a majority of their transportation fuels by CVR
Refining, LP -2277 Plaza Drive, Suite 500 • Sugar Land, TX 77479 The Hon. Gina
McCarthy July 27,2015 Page 2 of2 pipeline. Pipeline operators do not allow shipment of
transportation fuels blended with renewable fuels. Therefore, merchant refiners, without
control of these pipelines and receipt facilities, are at a significant disadvantage. [EPA-
HQ-OAR-2015-0111-2500-A1 p. 1-2]
Holly Frontier Corporation
The cost of a RIN is generally shouldered by merchant refiners, thus the RIN provides a poor
mechanism for incenting consumers to alter their behavior at the gas pump. A better structure
would be to move the point of compliance to the blender of record. Redefining obligated parties
at this point would align the intent of the Renewable Fuel Standard with those entities that
actually can dictate what volumes of renewable fuel are introduced to petroleum based motor
fuels. Additionally, the blender is better suited to reflect the cost of a RIN in the price at the
pump, which may affect consumer behavior. [EPA-HQ-OAR-2015-0111-2257-A1 p.3]
Mass Comment Campaign sponsored by anonymous 1 (web) - (23)
In the final rule, EPA should require obligated parties to comply with the law by blending
increasing volumes of renewable fuels. [EPA-HQ-OAR-2015-0111-0118 p.2]
Minsk, Ronald
The current point of obligation is a significant factor inhibiting greater amounts of E85, and
perhaps biodiesel, from reaching the market due primarily to the lack of properly aligned
incentives and the resulting shortfall in blending infrastructure expansion. Reaching this
conclusion only requires extending the reasoning acknowledged above by EPA in 2009, namely:
a portion of obligated parties, refiners with large marketing operations, are almost immediately
long on RINs at the beginning of every compliance period, a position that occurs because when
they market more fuel than they refine, they generate more RINs through blending than they
need for their own compliance obligations. Blending ethanol at wholesale distribution facilities
at scale often requires modifications to the infrastructure.14 At many distribution facilities,
however, obligated parties long on RINs are the largest customers, and in a position to
effectively block installation of infrastructure to promote large scale E85 blending. Once the
RIN-long party has met its own RVO, it has little incentive to participate financially in the
expansion of blending infrastructure to allow for higher level blends (E85 and E15) or additional
advanced renewable fuels (B5-B20) because they are already have the RINs they need and do
not want additional blending to lower the value of their excess RINs. [EPA-HQ-OAR-2015-
0111-1307-A1 p.6-7]
Ironically, the current structure, which puts the point of obligation on refiners instead of where
the actual compliance is achieved at the point of blending, provides the least incentive to those
who are best situated to undertake the blending that the RFS seeks to motivate and imposes the
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greatest obligation on the parties who are most poorly situated to increasing the volumes of
renewable fuel that is blended into the fuel supply. [EPA-HQ-OAR-2015-0111-1307-A1 p.7]
EPA's current view is that the parties facing ever increasing costs for RINs will be incentivized
to build new infrastructure or to invest in blending operations. To me, it is inappropriate to
presume this as a path to compliance. This is akin to telling a product's manufacturer that it also
must become its distributor. Stated differently, EPA expects that RTN pricing will become so
severe, that it will reverse the last 20 years of de-integration in the refinery industry. [EPA-HQ-
OAR-2015-0111-1307-A1 p.7]
Moreover, without pump-on-pump pricing competition for E85 at the retail level, the value of the
RIN is, on average, not being passed through to the retail consumer, undermining the operation
of the program by failing to use the value of RINs to lower the retail price of E85 making it more
attractive to consumers and build demand for the fuel. [EPA-HQ-OAR-2015-0111-1307-A1 p.8]
If EPA moves the point of obligation to the owner of the hydrocarbon fuel just before blending,
it will assure that every person controlling the blending will be fully incentivized to maximize
the blending of renewable fuels into the fuel supply because they will need RINs in proportion to
the fuel they blend and not in proportion to the fuel that they produce. [EPA-HQ-OAR-2015-
0111-1307-A1 p.8]
Under the current program structure, there is a misalignment between the parties obligated to
ensure that blending occurs and the parties that are situated in the supply chain to blend. As EPA
recognized in 2009, moving the point of obligation to blenders can better align the obligation and
the ability to blend. Moreover, moving the point of obligation to the blender more evenly
distributes the cost of obligation across the obligated parties and likely reduces cost of the
program to consumers. Rather than incentivizing major obligated parties to hoard RINs and
withhold from infrastructure investments, obligated parties would now be able to compete on an
even playing field as the RFS drafters envisioned. With all of the major parties competing for
E85 market share, consumer prices have the best opportunity to be competitive with El 0 and
gain penetration into the market. Ultimately, this represents the best chance for policymakers to
get past the difficult problems presented by the blend wall and to achieve the fundamental goal
of the program—getting more renewable fuel into the market. [EPA-HQ-OAR-2015-0111-1307-
Al p.8-9]
14 See, e.g., Michael Leister, Biofuels Blending Infrastructure, SAE Government and Industry
Conference, May 13, 2008; Daniel Measurement and Control Application Guide, An
Introduction to Blending Ethano7, available at
http://www2.emersonprocess.com/siteadmincenter/PM%20Daniel%20Documents/Ethanol
Blending.pdf: Robert Jagunich, Biofuels Mid-Stream Infrastructure Requirements, California
Energy Commission, Apr. 14, 2009.
Monroe Energy, LLC and Philadelphia Energy Solutions Refining and Marketing, LLC
Most importantly, the Merchant Refiners Group urges EPA to shift the RFS compliance
obligation to blenders. As noted above, the key mechanism on which EPA relies to induce
increased consumption of high-ethanol blends—a subsidy to renewable fuels provided by
RINs—is not functioning properly. The value of RINs is not being passed through to consumers.
It would be irrational for EPA to continue imposing larger mandates without diagnosing the
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problem and addressing the mechanism through which it expects the economy to meet those
mandates. If EPA is serious about using the RFS to subsidize high renewable-content fuels, it
must shift obligations closer to the cause of the bottleneck that prevents RIN values from being
passed through to retail consumers. [EPA-HQ-OAR-2015-0111-2603-Al, p.2]
Finally, EPA must consider shifting the compliance obligation to blenders and away from
refiners and importers. As noted above, the key mechanism on which EPA relies to induce
increased consumption of high-ethanol blends—a subsidy to renewable fuels provided by
RINs—is not functioning properly. The value of RINs is not being passed on to consumers in the
form of relatively lower E85 prices. It would be irrational for EPA to continue to impose
increasing mandates without addressing the failure of the mechanism on which it expects the
economy to rely in meeting those mandates. The current obligated parties—refiners and
importers—are poorly situated to address the problem. Complex structural constraints on the
retail E85 market prevent the value of RINs from being passed through to retail E85 prices, and
refiners—especially merchant refiners—are in no position to remove those constraints or
otherwise change the behavior of blenders or retailers. But placing the obligation on blenders
would help. As obligated parties, blenders would have a stronger, more direct incentive to blend
and sell as much E85 as possible, and, because they are closer in the supply chain to retailers,
they could exert pressure over retailers to ensure that the RIN subsidies needed to promote the
use of higher-ethanol blends are passed on to the ultimate consumer. Because of their closer
relationships with retailers, blenders are also better situated than refiners or importers to assist in
overcoming the infrastructure constraints that have inhibited growth in E85 usage and the
passthrough of RIN value to consumers. [EP A-HQ-OAR-2015-0111-2603-A2, pp.4-5]
Accordingly, EPA should shift the compliance obligation to blenders. [EPA-HQ-OAR-2015-
0111-2603-A2, p.5]
III. EPA MUST MOVE THE COMPLIANCE OBLIGATION TO BLENDERS IF RINS ARE
TO INCENT CONSUMPTION OF HIGH-ETHANOL BLENDS.
As discussed above, EPA has theorized that the RFS program will result in lower retail prices for
E85, subsidizing the cost of E85 relative to fuels that do not contain a large percentage of
renewable fuel, and thereby incenting great E85 consumption. EPA posited in the NPRM that
RIN prices paid by obligated parties will "decrease the effective cost of renewable fuel used to
create transportation fuel." This, in turn, is theorized to result in lower retail prices for high-
ethanol blends relative to E10. As EPA explained: "[Competition among renewable fuel
blenders and distributors should result in a greater portion of the reduced effective cost of
renewable fuel blends enabled by the sale of the RIN to be passed on to fuel consumers." [EPA-
HQ-OAR-2015-0111-2603-A2, p.40]
Unfortunately, as discussed above, reality does not reflect EPA's theory. Empirical evidence
during a two-year period of high RIN prices reveals that the value of RINs are not being passed
through to retail customers in the form of lower relative E85 prices nationwide. Likewise, even
after adjusting projections for 2015 and 2016 to account for the NPRM, EIA still "does not
expect measurable increases in E15 or E85 consumption over the forecast period."! 16 That is a
major problem for EPA's plan to use RIN prices to stimulate E85 consumption. To the extent
EPA wishes to achieve steadier, more robust growth in E85 consumption, EPA must find a way
to break through the bottleneck identified by Knittel, Meiselman, and Stock that prevents RIN
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values from being passed through to consumers in the form of lower E85 prices. [EPA-HQ-
OAR-2015-0111-2603-A2, pp.40-41]
As an initial step toward a solution, EPA should move the compliance obligation away from
refiners and importers and should place that obligation on blenders.117 The parties on whom EPA
continues to impose the compliance obligation—refiners and importers—are the worst situated
to encourage blenders or retailers to pass along the value of RINs to the ultimate consumer.
Refiners—particularly merchant refiners—have little to no control over the retail markets for
biofuels. They own about 4 percent or less of the retail stations,118 do not contract directly with
them, and do not otherwise exercise much influence over the decision-making of these
downstream market players. The NPRM ignored this reality. It suggested obligated parties might
meet the 2016 mandates by "[developing contractual mechanisms to ensure favorable pricing of
E15 and E85 at retail compared to E10 to boost sales volumes." That makes little sense for
obligated parties who generally have no relationships whatsoever with retailers. EPA is directing
its advice to the wrong link in the supply chain. "Refiners are in no position to ensure, or even
contribute to, growth" in the supply of renewable fuels to consumers.120 [EPA-HQ-OAR-2015-
0111-2603-A2, pp.41-42]
It is important to recall again that EPA's decision to regulate the very first link in the chain was
driven by little more than administrative convenience. The RFS1 Rulemaking placed the
obligation "on the relatively small number of refiners and importers rather than on the relatively
large number of downstream blenders and terminals in order to minimize the number of
regulated parties and keep the program simple."121 EPA acknowledged in 2010 that the rationale
that originally justified imposing the compliance obligation on refiners and importers was "no
longer valid."122 Yet when the agency last examined the issue in 2010, it found no pressing
reason to alter course and decided to leave its rule unchanged. But the Agency pledged to revisit
the issue if the RIN market did not operate as intended, which the empirical evidence shows is
now the case. It is therefore time for EPA to make good on its promise to revisit its 2007
decision to place the obligation on refiners. [EPA-HQ-OAR-2015-0111-2603-A2, p.42]
Administrative convenience is no longer a justification for inaction. There is no benefit to
continuing to impose the compliance obligation on the parties the worst situated to encourage
greater consumption of high-ethanol blends. By contrast, switching the obligation to blenders has
the potential to significantly impact the price of high-ethanol blends to retail consumers. [EPA-
HQ-OAR-2015-0111-2603-A2, p.42]
James Stock, one of the authors of the recent study finding no meaningful pass through of RIN
values to retailers nationwide, published a paper this past April explaining that shifting the
obligation from refiners to blenders could improve the RFS program's ability to subsidize high
renewable-content fuels, such as E85. According to Professor Stock, placing the RFS obligation
on blenders rather than refiners could help the economy overcome the E10 blendwall. As he
explains, "because blenders either are retailers or sell to retailers, blenders are better situated to
pass the RIN subsidy for high-renewable content fuels along to the consumer than are the current
obligated parties, who are further upstream."123 [EPA-HQ-OAR-2015-0111-2603-A2, p.43]
To the extent blenders are the bottleneck, EPA could eliminate profit-taking behavior by
eliminating the profit source—i.e., the ethanol subsidy they receive from selling RINs to refiners.
By replacing an indirect ethanol subsidy with a direct RFS obligation, EPA would increase
blenders' incentives to competitively price E85 and to place pressure on affiliated or
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nonaffiliated retailers to do so as well. While blenders appear to have that incentive now,
blenders with greater capacity to absorb RIN costs in blendstock prices may not feel the cost
impact nearly as significantly as they would if they had to report it on their balance sheet. [EPA-
HQ-OAR-2015-0111-2603-A2, p.43]
To the extent retailers are the bottleneck, declining to pass along the RIN subsidy to retail
customers, blenders again are in a better position than refiners to exert financial pressure, or else
to work in cooperation with retailers (and perhaps EPA) to expand retail competition for E85.
[EPA-HQ-OAR-2015-0111-2603-A2, p.43]
What is more, there is no apparent downside to EPA shifting the obligation closer to the current
bottleneck preventing greater E85 consumption. Indeed, doing so would also remove a major
inefficiency in the current regulatory scheme. RFS places on refiners an unnecessary degree of
price risk in the highly illiquid secondary markets for RINs. As Knittel, Meiselman, and Stock
explain, "[e]ven with full pass-through, however, an obligated party could face RIN price risk
because of timing differences between when the RIN obligation is incurred and when RINs are
acquired."124 As Professor Stock further notes: "The purpose of the RIN system is to ensure
compliance with the RFS, not to add price risk to the balance sheets of obligated parties that
happen to have a ... mismatch" between the number of RINs they generate and the number that
they must retire.125 Given that refiners are less able than blenders to control how much E85 is
consumed and at what price, it is a mystery why EPA believes refiners should bear that market
risk, especially as it appears to be accomplishing nothing of value to the environment. [EPA-HQ-
OAR-2015-0111-2603-A2, pp.43-44]
Continuing the policy of placing the compliance obligation on refiners is even more misguided to
the extent that refiners are unable to pass through the cost of RINs to blenders in higher
blendstock prices. In such circumstances, the RFS program merely imposes a tax on refiners, and
that tax does not promote any increase in renewable fuel usage by consumers. In fact, the
empirical evidence demonstrates a weak correlation between BOB spreads and RIN prices within
and among certain regional markets, indicating that refiners are not able to pass on the full cost
1 9^
of the RINs they must procure for compliance. And empirical research to date on whether
refiners are able to pass through RIN costs in blendstock prices is limited in important respects.
For instance, the Merchant Refiners Group is aware of no study evaluating the correlation
between BOB spreads and RIN prices in the Gulf Coast or Midcontinent. These regions differ
from others, such as New York Harbor, a market which is short on BOB and relies on imports to
balance supply and demand, creating opportunities for foreign and national suppliers alike to
recoup RIN costs. The Gulf Coast or Midcontinent regions, by contrast, are relatively long on
BOB and export significant quantities. As others argue in comments, that market dynamic—
where BOB suppliers compete in a buyer's market (indeed, an export market) and thus are price-
takers—makes it much more difficult for merchant refiners to competitively price BOB to
recoup their high RIN costs. EPA must carefully study this possibility, not only because
commenters offer preliminary data supporting it, but also because the Merchant Refiners Group
understands these regions account for 50 percent or more of the nation's refining capacity. [EPA-
HQ-OAR-2015-0111-2603-A2, pp.44-45]
If merchant refiners cannot recover RIN costs (or only partially recover those costs), as the
Merchant Refiners Group has argued previously, the principal effect of higher RIN prices is
simply a massive transfer of wealth from refiners who need RINs to any parties holding such
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RINs, as well as a distortion of the refining market to the detriment of merchant refiners. The
RIN system was never intended to artificially tilt the competitive market in favor of one group of
obligated parties and against another. To the contrary, it was specifically intended to facilitate
compliance by obligated parties in a competitively neutral and environmental beneficial way.127
[EPA-HQ-OAR-2015-0111-2603-A2, p.45]
In the end, if EPA is serious about using the RFS to subsidize high renewable-content fuels such
1 OS
as E85, it must shift the obligation closer to the bottleneck. Even if EPA thinks it is too late to
do so for 2016, there are still six long years left in the program after that. EPA should not
continue to "appl[y] the pressure to one industry (the refiners), . . . [when] it is another ... that
enjoys the requisite expertise, plant, capital and ultimate opportunity for profit."129 [EPA-HQ-
OAR-2015-0111-2603-A2, pp.54-46]
Indeed, shifting the compliance obligation from refiners to blenders will remain important even
if EPA chooses, for 2017 and beyond, to impose standards based on a projection of "the share of
the fuel pool that can reasonably be expected to be comprised of renewable fuel over time." EPA
has suggested that adopting standards based on the share of renewable fuel in the fuel pool would
provide clearer market signals and greater certainty, helping to foster greater investment in the
infrastructure needed to increase consumer demand for higher-ethanol blends. However, refiners
and importers, which sit at the top of the supply chain and typically have no direct relationship to
fuel retailers, are simply not well-situated to make such investments. Unless EPA shifts the
compliance obligation to parties closer to the consumer, it will achieve little growth in renewable
fuel usage, regardless of whether standards are set based on a share of the fuel pool or total
volumes. [EPA-HQ-OAR-2015-Oil 1-2603-A2, p.46]
Accordingly, EPA should shift the compliance obligation to the parties best situated to encourage
increased usage of renewable fuel. [EPA-HQ-OAR-2015-0111-2603-A2, p.46]
116U.S. Energy Info. Admin., Short-Term Energy Outlook, July 2015, http://www.eia.gov/
forecasts/steo/report/renew_co2.cfm.
117 Monroe notes that, for over a year and a half, it has had a petition for rulemaking pending on this issue. EPA has
not acted on that petition. Monroe has also filed a petition for review in the D.C. Circuit on this issue, which has
been held in abeyance pending EPA's action on the petition for rulemaking. See Respondent EPA's Status Report, at
3, Monroe Energy, LLC v. EPA., Case No. 14-1014 (D.C. Cir. Apr. 30, 2015), Doc. No. 1550049 ("At this time,
EPA continues to evaluate the issues raised in Monroe's administrative petition, but has not yet taken final action on
that petition. EPA's next status report to the Court is due on Wednesday, July 29, 2015.").
118 See PMAA letter to Chairman Upton and Ranking Member Pallone,
http://www.pmaa.org/weeklyreview/attachments/PMAA_Rebuttal_RFA_April_2015_FINAL%20.pdf.
120 Am. Petroleum Inst, 706 F.3d at 480.
121 2010 Rule, 75 Fed. Reg. at 14,722.
123 James H. Stock, The Renewable Fuel Standard: A Path Forward, Columbia/SIPA Center on Global Energy
Policy, April 2015, at 29, available at http://energypolicy.columbia.edu/sites/
default/files/energy/Renewable%20Fuel%20Standard_A%20Path%20Forward_April%202015.pdf (attached as
Exhibit B). [[See Docket Number EPA-HQ-OAR-2015-0111-2603-A3 for Exhibit B.]]
124 Knittel, et al., The Pass-Through of RIN Prices to Wholesale and Retail Fuels under the Renewable Fuel
Standard, at 20, http://scholar.harvard.edu/files/stock/files/pass-through_of_ rin_prices_l.pdf.
125 Stock, The Renewable Fuel Standard: A Path Forward, at 29, http://energypolicy.Columbia.
edu/sites/default/files/energy/Renewable%20Fuel%20Standard_A%20Path%20Forward_April% 202015.pdf.
126 For example, Knittel, Meiselman's regression coefficient for NY RBOB-Brent is 0.684 with a standard error of
0.332, revealing a relatively weak correlation. See Knittel et al., The PassThrough of RIN Prices to Wholesale and
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Retail Fuels under the Renewable Fuel Standard, Table 2, at 31, http://scholar.harvard.edu/files/stock/files/pass-
through_of_rin_prices_l.pdf. The coefficient for Los Angeles RBOB-Brent is only 0.720 with a 0.704 standard
error. Id.
127 As EPA explained when implementing the RIN program, Congress mandated implementation of the RFS through
a tradable credit system in order to "preserve [] the natural market forces and blending practices that will keep
renewable fuel costs to a minimum." 72 Fed. Reg. at 23,929.
128 Indeed, Mr. Minsk observes that switching the obligation to blenders may more costeffectively incent
consumption of higher blends of biodiesel. Specifically, he observes that the cost of investing inbiodiesel
infrastructure is significant and that, "[b]ecause not all customers are in need of RIN generation, critical consensus
for investing may never mature. This can delay or foreclose the necessary investments inbiodiesel infrastructure.
This would not happen if all of the users of the terminal were equally obligated." Comments of Ronald E. Minsk,
EPA-HQOAR-2015-0111-1307, at 7.
129 Am. Petroleum Inst, 706 F.3d at 480. See also EPA-HQ-OAR-2015-0111-1307, at 3 ("EPA's current view is that
the parties facing ever increasing costs for RINs will be incentivized to build new infrastructure or to invest in
blending operations. . . .This is akin to telling a product's manufacturer that it also must become its distributor.
Stated differently, EPA expects that RIN pricing will become so severe, that it will reverse the last 20 years of de-
integration in the refinery industry.").
National Association of Convenience Stores (NACS), National Association of Truck Stop
Operators (NATSO), Society of Independent Gasoline Marketers of America (SIGMA) and
Petroleum Marketers Association of America (PMAA)
In so doing, there are several ways that obligated parties can satisfy their RFS obligations:
• Blend gasoline and/or diesel fuel with ethanol prior to selling the fuel. Such blending
will enable the obligated party to separate renewable identification numbers ("RINs")
from the renewable fuel, and use the RINs to satisfy their renewable volume obligations
("RVOs") under the Program.
• Sell neat (straight) gasoline and/or diesel fuel to a blender, and contractually obligate the
blender to separate RINs after blending such gasoline and/or diesel fuel and remit them
back to the obligated party. The RINs can then be used to satisfy the obligated party's
RVOs.
• Sell neat gasoline and/or diesel fuel to a purchaser, and simply acquire RINs through the
secondary market in order to satisfy their RVOs. [EPA-HQ-OAR-2015-0111-2480-A1
p5-6]
Blenders on the other hand are fundamentally buyers. They can only buy - and blend - what
refiners and importers are willing to sell to them. Thus, if blenders were obligated parties, they
would not have the same ability to satisfy their RVOs that refiners and importers currently have
because blenders do not control how refined product is introduced into commerce. More
specifically, blenders would be unable to acquire RINs directly if the market encouraged refiners
and importers to blend product prior to sale and sell any superfluous RINs in the open market. In
this scenario, blenders would not be capable of satisfying their obligations other than through the
purchase of RINs on the open market. [EPA-HQ-OAR-2015-0111-2480-A1 p.6]
In other words, whereas obligated parties today can determine for themselves how to meet their
obligations, blenders' ability to satisfy their obligations would be dictated by their upstream
counterparts. [EPA-HQ-OAR-2015-0111-2480-A1 p.6]
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Making refiners and importers obligated parties facilitates easier administration of the RFS
because there are so few of them relative to downstream blenders. The fewer parties that are
obligated to demonstrate compliance with the RFS, the less burdensome it is for the Agency to
administer and enforce the Program. There are many more downstream blenders operating today
than there are obligated parties. What's more, to the extent Program regulations would continue
the exemption for smaller obligated parties,[l] administering this exemption would be
particularly straining for EPA since so many blenders today are small businesses. [EPA-HQ-
OAR-2015-0111-2480-A1 p.7]
EPA could simply redefine the term "obligated party" to cover solely "ethanol blenders." This
would generally cover those actors who today are considered "blenders." As a practical matter,
however, those who blend today would simply cease their blending operations because there
would be no incentive to continue. In fact, there would be a strong disincentive to continue,
since blending would require the entity to assume the burdens of being an obligated
party. Rather than encouraging the introduction of renewable fuels into the market, this revised
RFS would discourage introduction of renewable fuels into the market. This approach would
effectively amount to a repeal of the RFS. [EPA-HQ-OAR-2015-0111-2480-A1 p.8]
In evaluating the petition, it is important to remember that the RIN system to which petitioner
objects was established at the request of obligated parties - including refiners - as a method of
demonstrating compliance with the Program without imposing excessive logistical burdens. The
system affords obligated parties the flexibility to demonstrate compliance by either acquiring the
required volumes of renewable fuels (together with their associated RINs), or by acquiring the
RINs without the associated fuel. [EPA-HQ-OAR-2015-0111-2480-A1 p.9]
The overarching rationale underlying the statement that the petitioner quotes remains valid
today: Having "the relatively small number of refiners and importers" be obligated parties
"rather than the relatively large number of downstream blenders and terminals" serves to
"minimize the number of regulated parties and keep the program simple."[2] Although the
downstream parties are regulated today, their burdens would be larger if they were obligated
parties. Indeed, "the designation of ethanol blenders as obligated parties would . . . greatly
expand[] the number of regulated parties and increase[] the complexity of the RFS program
beyond that which [is] necessary to carry out the renewable fuels mandate under CAA section
21 l(o)."[3] This is not arbitrary decision-making; it is a rational approach that furthers the
Agency's longtime goals of implementing a Program that is "simple, flexible, and
enforceable."[4] [EPA-HQ-OAR-2015-0111-2480-A1 p. 11-12]
When the RFS2 rules were finalized, market actors responded by evolving their business models
in accordance with their new regulatory burdens. Some obligated parties invested in blending
capabilities to ease their compliance burden; others did not but instead contractually required
blender-purchasers to remit RINs that were detached through blending back to the obligated
parties. [EPA-HQ-OAR-2015-0111-2480-A1 p. 13]
The petitioner is apparently not requiring parties to which it is selling product to remit RINs back
to the petitioner once the product is blended. Indeed, as noted above, the experienced refining
company Phillips 66 has reported that it is profiting from the sale of RINs it is acquiring through
product purchased from the petitioner's refinery. This is the result of a contract into which the
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petitioner voluntarily entered. It was a business decision. [EPA-HQ-OAR-2015-0111-2480-A1
p.13]
By choosing to conduct its business in this manner, the petitioner is avoiding various cash costs
that its competitors incur. Indeed, as with lunch, there's no such thing as a free ethanol blending
plant. Such facilities cost money that the petitioner has not had to pay. [EPA-HQ-OAR-2015-
0111-2480-A1 p.13]
While the petitioner's predicament is unfortunate, it is not the result of a flawed Program. The
Program affords the petitioner - and all obligated parties - ample opportunity to meet its RVOs
because the petitioner controls how its product is introduced into the stream of commerce. [EPA-
HQ-OAR-2015-0111-2480-A1 p.14]
Ironically, the dire scenario that the petitioner fallaciously claims it is confronting would befall
downstream blenders if they were to become obligated parties since, because they do not
introduce product into commerce, they would not control their own ability to meet their RVOs.
[EPA-HQ-OAR-2015-0111-2480-Alp.l4]
For the reasons discussed above, were EPA to designate blenders as "obligated parties" under the
RFS, it would substantially disrupt the motor fuels market, impose unfair and inefficient
obligations upon blenders, increase the Program's complexity and the Agency's administrative
and enforcement burdens, and generally hinder the achievement of the Program's
objectives. Such a dramatic policy shift is not "appropriate."[5] [EPA-HQ-OAR-2015-0111-
2480-Alp.l5]
[1] See generally 40 C.F.R. 80.1126(b); see also 40 C.F.R. 80.1426(c)(3).
[2] 75 Fed. Reg. 14722 (March 26, 2010).
[3] 74 Fed. Reg. 24963 (May 26, 2009).
[4] 71 Fed. Reg. 55573 (Sept. 22, 2006).
[5] See 42 U.S.C. 7545(o)(3)(B)(ii)(l) (directing EPA to designate as obligated parties "refineries, blenders, and
importers, as appropriate.")
National Association of Truck Stop Operators (NATSO)
EPA should not revise the definition of "obligated party" under the RFS. Refiners and importers
are obligated parties because that is the only way to ensure that renewable fuels are integrated
into the nation's fuel supply. If blenders rather than refiners and importers were obligated
parties, the RFS's objectives would not be achieved. [EPA-HQ-OAR-2015-0111-2478-A1 p.3]
V. Definition of Obligation Party
It has come to NATSO's attention that certain stakeholders are advocating that EPA revise the
RFS regulations in a manner that would make blenders "obligated parties" rather than refiners
and importers. EPA should reject this effort. NATSO has joined with other trade associations
representing motor fuel retailers to file a supplemental comment letter detailing the flaws with
this approach. That comment letter has been submitted to the docket for this rulemaking. The
discussion below is intended to supplement that letter.
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The RFS is designed to displace traditional petroleum fuels derived from foreign sources with
domestically produced renewable substitutes. These objectives can be achieved only if
renewable fuels are, in fact, integrated into the nation's fuel supply. Renewable fuels can only
be integrated into the nation's fuel supply if the petroleum supply can be blended with renewable
fuels to produce a product that can be sold lawfully.
The only entities that can control the characteristics of the nation's petroleum supply (and thus
whether it can be blended with renewable fuels to produce a product that can be sold lawfully)
are those that import it or manufacture it. Other entities, such as downstream blenders, do not
control such characteristics and can only obtain product that importers and manufacturers sell to
them. Absent their status as obligated parties, there is no incentive for manufacturers or
importers to introduce into commerce petroleum supply that can be blended with renewable fuels
to produce a product that can be sold lawfully. They are under no legal obligation to do so. That
is why it is logical to make these entities obligated parties under the RFS.
What's more, many fuel retailers that blend today would cease doing so if such activities
rendered them obligated parties under the RFS. There is no legal requirement that they continue
their blending operations. Indeed, many downstream blenders would be unable to obtain product
that is suitable for blending with renewable fuels. That is why it is illogical to make "blenders"
obligated parties under the RFS.
As a practical matter, making blenders obligated parties rather than refiners and importers would
render the RFS optional: Importers and manufacturers would have no obligation (or incentive)
to generate petroleum supply that can be blended with renewable fuel to produce a product that
can be sold lawfully; and blenders would be under no obligation to continue their blending
operations (many would be incapable of doing so).
The RFS is not designed to be an optional program, but rather a mandatory program to increase
the presence of renewable fuels in the nation's fuel supply. Refiners and importers are obligated
parties because that is the only way to ensure that renewable fuels are integrated into the nation's
fuel supply. If "blenders" rather than refiners and importers were obligated parties, renewable
fuels' presence in the nation's fuel supply would diminish substantially, and the RFS's objectives
would not be achieved. [EPA-HQ-OAR-2015-0111-2478-A1 p.6-7]
New England Fuel Institute (NEFI)
NEFI is submitting these comments on the RFS because we are deeply concerned by comments
submitted to the pubic docket that support making blenders obligated parties under the RFS.
NEFI strong opposes any provision that would make downstream blenders obligated parties.
NEFI members are increasingly blending biodiesel into heating oil to make a cleaner burning,
low carbon foot print product. NEFI members working closely with state regulators have set an
aggressive timetable to reduce the sulfur content of heating fuel to 15ppm across New England
by 2020. At the same time the industry is steadily increasing the renewable biodiesel content of
heating oil. Heating oil with 15-ppm sulfur content and a 20% biodiesel blend produces a
renewable fuel product with a significantly lower carbon foot print than natural gas. [EPA-HQ-
OAR-2015-0111-2501-A1 p.l]
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In order to successfully introduce this 21st century home heating oil to customers throughout
New England it is essential that small business fuel dealers have the ability to blend product
below the terminal rack. Making blenders obligated parties under the RFS would make it far too
costly and burdensome for small business heating oil dealers. [EPA-HQ-OAR-2015-0111-2501-
Alp.l]
NEFI urges the EPA to not adopt any provision that would make blenders obligated parties.
NEFI agrees with the following comments submitted by like' minded motor fuel trade groups.
NEFI agrees fully with the position these commentators have taken on this issue. [EPA-HQ-
OAR-2015-0111-2501-A1 p.2]
PBF Holding Company LLC
PBF objects to EPA's inequitable decision to continue imposing the RFS compliance obligations
on refiners and importers rather than on blenders. The Clean Air Act explicitly authorizes EPA to
impose the RFS compliance obligation on refineries, blenders, and importers, 'as appropriate.'1
Beginning in 2007, however, EPA decided to impose the RFS compliance obligation only on
refiners and importers, and not on blenders, for two asserted 'policy' reasons: (1) designating
blenders as obligated parties would greatly expand the number of regulated parties; and (2) EPA
expected there would be an excess of RINs available at low cost, that the RINs would be traded
freely between parties, and that parties who were in need of RINs could easily acquire them from
parties who held excess RINs. As described below, implementation of the RINs program over
multiple years has proven that these policy rationales are not supported by the actual facts. [EPA-
HQ-OAR-2015-0111-1724-A1 p.4]
First, as EPA pointed out in 2010, it is 'no longer valid' to assert that designating blenders as
obligated parties would greatly expand the number of regulated parties as it may have done when
the RFS program regulations were first adopted in 2007. Because most gasoline today is
blended with ethanol, nearly all blenders (even the small business blenders) are regulated parties
subject to the RFS program's registration, recordkeeping, and reporting requirements. Therefore,
the incremental regulatory burden on blenders of demonstrating compliance with a renewable
volume obligation would not be significant. [EPA-HQ-OAR-2015-0111-1724-A1 p.4-5]
Small Refinery Owners Coalition
This structural flaw in the rule caused by the OPD has created market winners and losers in the
refining industry and rewarded exempt blenders with windfall revenues from selling scarce RINs
to small refineries.4 [EPA-HQ-oAR-2oi5-oin-2339-Ai P. 2]
Exempting non-refining blenders from any obligation to comply with the RFS mandates violates
this requirement. As more fully described in the attached Burkholder Rebuttal,11 leaving 15-20%
of the nation's blending capacity free to blend at any level it chooses (or not blend at all) does
not ensure that transportation fuels sold in the United States contain "applicable volumes of
renewable fuel."12 Rather, it creates a financial incentive (windfall RIN revenues) for exempt
blenders to blend at lower levels (E10 in the face of an El 5 mandate), thwarting the purposes of
the RFS. [EPA-HQ-OAR-2015-0111-2339-A1 p. 3]
For Casey's, RIN revenues more than offset margin decreases in other areas of its business. In
2013 and 2014, Murphy reported that revenues from the sale of RINs more than covered
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negative margins in its product supply and wholesale operations: [EPA-HQ-OAR-2015-0111-
2339-A1 p. 5]
Most small refineries are "merchant" refineries like Monroe, PES, and PBF, but considerably
more vulnerable financially because they do not have the economies of scale of their larger
market competitors. Most are also not public companies, which means that their financial losses
from purchasing RINs are not publicly reported. These financial losses are, however, known to
EPA because they are included in small refinery hardship petitions and have been the subject of
numerous communications between Coalition members, EPA, and other federal agencies.32
[EPA-HQ-OAR-2015-0111-2339-A1 p. 7]
This disparity between exempt blenders' reported REST gains and small and merchant refineries'
RIN losses would not exist if gains were, in fact, passed through the supply chain as the
Burkholder Report concludes. 5 If RIN revenues merit public disclosure for RIN sellers, so
would offsetting pass throughs. Pass throughs are not publicly disclosed by either RIN sellers or
RIN buyers because they do not exist. [EPA-HQ-OAR-2015-0111-2339-A1 p. 8]
2. Even Those Small Refineries That Blend Lack Market Power to Retain RIN Value.
The structural flaw in the rules, which creates market winners and losers in the petroleum fuels
market, also makes it impossible for small blending refineries to avoid the harm caused by high
RIN prices. Competing exempt blenders and refiners that blend more than they produce have
RIN revenues with no offsetting obligation and can finance product discounts, i.e., REST sharing,
at the loading rack. In turn, rack customers demand that small, merchant refineries "share" the
value of the RIN, reflected in the form of a discount on the price paid for their product. Lacking
RIN revenues and having an obligation, small blending refineries cannot match those discounts
without taking a hit to their bottom lines. Therefore, blending and investing in blending
infrastructure before the structural flaw in the rule is corrected is not a solution for small
refineries. It is a lose-lose proposition. [EPA-HQ-OAR-2015-0111-2339-A1 p. 14]
Although there may be other options for replacing the obligated party definition, the Coalition
suggests there is a logical point for the regulatory obligation that aligns the ability to comply
(blend) with the obligation to comply and avoids harm to any party, which is to place the
obligation at the terminal rack.72 [EPA-HQ-OAR-2015-0111-2339-A1 p. 19]
To avoid doing irreparable damage to small refineries and competition in the refining in-dustry,
the agency must relocate the compliance obligation and the terminal rack is the logical
location—since it is where the blending occurs. The obligation should be placed on the party that
owns the gasoline or diesel when it is loaded across the rack for sale to the final end user. This is
the same party that is responsible for collecting and paying the federal and state fuels ex^dse
tax. [EPA-HQ-OAR-2015-0111-2339-A1 p. 106]
[The following comments were submitted as testimony at the Kansas City, Kansas public hearing
on June 25, 2015, See Docket Number EPA-HQ-OAR-2015-0111-1043, pp. 237-239.]
First, EPA should promulgate an objective standard for determining when a small refinery meets
the viability impairment test for an RFS2 exemption. Second, the coalition asks EPA to move the
point of obligation to the collection point for Federal and State motor fuel excise taxes. RINs are
free or nearly so for blenders. They cost renewable fuel producers nothing to create, and ethanol
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industry competition prevents producers from charging blenders for a fictitious production cost.
Furthermore, the RFS2 rules prohibit renewable fuel producers from selling unattached RINs. If
the producer does not attach RINs to shipped renewable fuel, the RINs stay put. The EPA
prosecutes people who try to do otherwise. That which cannot be marketed has little or no value.
The point of obligation and free RINs explain why the merchant refiner cannot recover its
compliance costs at the bulk sales level upstream of the rack. They explain why the merchant
refiner cannot recover its compliance costs at the terminal sales rack. Furthermore, they explain
how marketers can afford to share RIN value with their rack customers using windfall profits
gained by selling RINs to us. Coalition members that do blend never see any such profits and,
thus, cannot share them. In addition, exempting marketers from the compliance obligation means
their RIN windfall need not be used to upgrade retail stations to El5 and E85 service. Should
EPA ever raise national volumes to statutory levels or beyond, exempt blenders may continue to
sell E10 and harvest an even larger windfall as RIN prices again skyrocket. As long as exempt
parties may sell E10, higher national standards may be ignored. The best path is to change the
point of obligation so that the ability to comply and obligation to comply are aligned within the
current petroleum refining and marketing business structure. The failure to address this
fundamental flaw in the program when EPA has previously committed to do so and the failure to
make hardship evaluations a product of objectivity instead of the subjectivity that now reigns
make the current proposal invalid.
4 Letter from LeAnn Johnson Koch, Perkins Coie LLP, to James Laity, Branch Chief at the Office of
Management and Budget, and Chad Whiteman, DOE Desk Officer at the Office of Management and
Budget (Mar. 26, 2015) (on file with submitter).
11 Memorandum of Warren R. Neufeld, A Small Refinery Owner's Reaction to EPA's Preliminary
Assessment of RIN Market Dynamics, RIN Prices, and Their Effects, Wyoming Refining Company (July
2015) [hereinafter "Burkholder Rebuttal"]. The Burkholder Rebuttal is attached as Exhibit 1 to this
comment.
12 Mat 2.
35 See Burkholder Report, supra note 5, at 31 ("While higher RIN prices increase the cost of RFS
compliance for obligated parties purchasing separated RINs, these obligated parties generally recover
these costs in the price of their petroleum blendstocks.").
72 An extensive discussion on the benefits of moving the obligation to blenders at the terminal rack can be
found in the comment submitted by Ronald E. Minsk. Comment ID Number: EPA-HQ-OAR-2015-0111-
1307
The Valero Companies
The current problems with the RFS, as outlined below, can largely be resolved by shifting the
RFS compliance obligation to the owner of the fuel immediately prior to blending at the rack,
ensuring that all parties would have an equal incentive to maximize the generation of additional
RINs. The infrastructure that is needed to increase market penetration of renewable fuels is
downstream of refiners. As long as those downstream of refiners do not have compliance
obligations, there will be few market opportunities for investments in downstream infrastructure.
By moving the obligation closest to the place where blending occurs and where renewable fuel is
purchased and delivered, EPA would incent blenders to maximize blending and marketing of
renewable fuel. No party would have a surplus of RINs by virtue of their downstream position
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alone, while all parties would be equally obligated and, most importantly, fully incented to push
renewable fuels into the market. [EPA-HQ-OAR-2015-0111-2765-A1 p.2]
In short, EPA must change the point obligation in the final action in order to create the
infrastructure necessary for refiners, blenders, and distributers to produce the required volumes
of renewable fuel in the consumer market place. [EPA-HQ-OAR-2015-0111-2765-A1 p.5]
As described further below, the structure of the RFS threatens the future viability of merchant
refiners, threatens competition in the transportation fuel sector, has the perverse effect of
discouraging high blends of renewable fuel and will ultimately harm the consumer. We ask EPA
to consult with the Federal Trade Commission to better understand these impacts. [EPA-HQ-
OAR-2015-0111-2765-A1 p. 14]
As a result of the point of obligation in the current RFS regulation, not only are there obligated
parties who are RINs-long and RINs-short but there are non-obligated parties who hold, buy and
sell RINs. Because of the lack of regulation and oversight of the RINs trading system, and the
inequitable distribution of RINs, the RINs market promoted a substantial degree of speculation
and has been vulnerable to fraud. Both fraud and speculation contributed to additional costs to
obligated parties and no benefit to renewable fuel producers or consumers. [EPA-HQ-OAR-
2015-0111-2765-A1 p.25-26]
Integrated refiners will still obtain the RINs they need to meet their obligations, as their
obligation will be directly proportional to the volumes they sell over the rack. Integrated refiners
would no longer have an automatic supply of extra RINs nor will they be disadvantaged. RIN
long refiners or blenders would no longer have potentially conflicting incentives. Instead
blenders as obligated parties would increase the volume and types of renewable fuels they blend
in order to ensure compliance with the RFS and to have carry-over credit for future compliance.
They will be naturally neither long nor short and they will want the most RINs they can get and
want them to be affordable. Refiners would not be driven to export or cut production to avoid the
RIN obligation. The RFS program would no longer adversely impact competition in the refining
or fuel market. Competition along the fuel chain will improve, from the refiner and the
renewable fuel producer to the consumer. Blenders will necessarily be pushing renewables, not
playing the RIN market. Retail stations will start seeing incentives to provide fuels with higher
content of renewable fuel and will pass these price incentives on to consumers. The consumer
will benefit. [EPA-HQ-OAR-2015-0111-2765-A1 p.32]
As a follow-up to the comments submitted in July, Valero completed analysis of the potential
additional administrative burden that might be imposed on regulated parties by the recommended
change in the point of obligation. Valero offers the results of this analysis for EPA consideration
in the development of the final rule. Valero recognizes that this information is being submitted
after the close of the comment period for the proposed rule. However, in light of the enormous
benefits associated with a rule change, it is important for EPA to recognize the change will not
create additional administrative burden for the agency nor industry. The information provided
herein is information that EPA can obtain on its own and the analysis is well within EPA's ability
to undertake for evaluating options to resolve the RFS structural flaws. Nonetheless, Valero
offers the information to provide EPA support for making the appropriate changes to ensure the
success of the RFS program. [EPA-HQ-OAR-2015-0111-3530-A1, 2][[Please see Docket
Number EPA-HQ-OAR-2015-0111-3530-A1 pp.2-4 for a detailed discussion on the analysis.]]
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Response:
In the proposed rule, EPA did not propose any changes to the definition of an obligated party,
nor did we specifically seek comment on this issue. EPA received comments requesting that we
change the point of obligation in the RFS program primarily from parties that are obligated under
the current regulations. In response we also received comments primarily from those who did
not wish to see the obligation placed on them. These comments are beyond the scope of this
rulemaking. EPA's current regulations, published in March 2010, define an obligated party as
any refiner that produces gasoline or diesel fuel within the 48 contiguous states or Hawaii, or any
importer that imports gasoline or diesel fuel into the 48 contiguous states or Hawaii during a
compliance period (See 40 CFR 80.1406(a)(l)). Discussion about our approach to evaluating
exemptions for small refineries can be found in Section 10.7.
10.6.7 Cellulosic Waiver Credits and Rollover Cap
Comment:
Advanced Biofuels Association (ABFA)
However the ability of the obligated parties not to have an explicit requirement to buy those
gallons produced in the cellulosic pool or their associated RINs is a major handicap for those
seeking to sell and capture value of their cellulosic fuels. This simply must be addressed if we
are going to see more investment in this sector of the industry. [EP A-HQ-OAR-2015-0111-2498-
Al p.10]
Given that this category by statute has the greatest GHG reduction impact, it would make sense
to develop a set of rules that facilitates the purchase of these gallons and RINs and not the path
of last resort. [EPA-HQ-OAR-2015-0111-2498-A1 p. 10]
The statute reads:
"These regulations shall include such provisions, including limiting the credits uses and useful
life, as the Administrator deems appropriate to assist market liquidity and transparency, to
provide appropriate certainty for regulated entities and renew able fuel producers and to limit
any potential misuse of cellulosic biofuels credits to reduce the use of other renewable fuels, and
for such other purposes as the Administrator determines will help achieve the goals of this
subsection. The regulation shall limit the number of cellulosic biofuel credits for any calendar
year to the minimum applicable volume (as reduced under this subparagraph) of cellulosic
biofuel that year."
As we understand the EPA's current interpretation of granting waiver credits, EPA intends to
always make available to obligated parties the full amount of credits up to the cellulosic biofuel
RVO. We would suggest that the statute was intended to grant the number of credits, which are
NOT available in the market between the RVO target and those actual wet gallons produced. At
a minimum, this would force the obligated parties to consider the purchase of wet gallons and
drive the market as the statute suggests than the current application, which relies almost entirely
on the purchase of a waiver credit. [EPA-HQ-OAR-2015-0111-2498-A1 p. 10]
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American Biogas Council
However the ability of the obligated parties not to have explicit requirement to buy those gallons
produced in the cellulosic pool is a major handicap for those seeking to sell and capture value of
their cellulosic fuels. This simply must be addressed if we are going to see more investment in
this sector of the industry. [EPA-HQ-OAR-2015-0111-2504-A1 p. 3-4]
Given that this category by statute is the greatest GHG reduction pool it would make sense to
develop a set of rules that facilitates these gallons actually being sought after not the path of last
resort. [EPA-HQ-OAR-2015-0111-2504-A1 p. 4]
We suggest that the statue was intended to grant the number of credits which are NOT
available in the market between the RVO target and those actual gallons produced. At a
minimum this would force the obligated parties to consider the purchase of fuel and better
drive the market as the statute suggests than the current application which relies almost
entirely on the purchase of a waiver credit. [EPA-HQ-OAR-2015-0111-2504-A1 p. 4]
American Coalition for Ethanol (ACE)
An emerging concern that has been brought to our attention by companies like QCCP is just as
physical gallons of cellulosic biofuel are being produced (nearly 1 million D3 RINs have been
generated for ethanol so far in 2015), obligated parties are opting to secure waiver credits issued
by EPA instead of purchasing the cellulosic biofuel. Waiver credits are only intended for use
when physical gallons of cellulosic biofuel are not available. EPA needs to address this problem
because the status-quo could destabilize D3 RIN prices and harm the development of cellulosic
biofuel projects. [EPA-HQ-OAR-2015-0111-2543-A2 p. 13]
American Council on Renewable Energy (ACORE)
ACORE commends USEPA for recognizing the risk that waiver credits could supplant gallons in
the D3 pool, but it is still too easy for obligated parties to wait out the market year-to-year by
securing waiver credits. The risk of underestimation (or overestimation) of cellulosic production
could result in stranded gallons. This issue needs to be addressed to drive investment. We need a
mechanism to ensure that all liquid cellulosic gallons produced are required for compliance.
There are a number of proposals that would ensure such an outcome, while also ensuring that
USEPA is precise, as called for by the courts. [EPA-HQ-OAR-2015-0111-1926-A1 p. 18]
Biotechnology Industry Organization
EPA must require that available cellulosic RINs be retired before allowing refiners access to
cellulosic biofuel waiver credits. These credits were included in the RFS to balance prices and to
protect refiners against potential monopolies on D3 or D7 RINs among competing refiners.
However, producers are now reporting that obligated parties are indicating that they will pursue a
compliance strategy to secure alternate advanced biofuel RINs and cellulosic biofuel waiver
credits as opposed to D3 RINs - even if D3 RINs are available at lower cost. EPA's current
approach to issuing cellulosic waiver credits needs to be augmented to prevent obligated parties
from taking advantage of the availability of waiver credits and leveraging more overarching
uncertainty in the D3/D7 marketplace. [EPA-HQ-OAR-2015-0111-1958-A2 p. 61]
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Clean Energy Renewables
We recommend EPA issue CWCs to match the delta between actual production and the RVO.
[EPA-HQ-OAR-2015-0111-1908-Alp.8]
Additionally, to the extent it is within EPA's authority or influence, we recommend that all
revenue generated from the sale of CWCs be dedicated to the promotion of further cellulosic
biofuel development, including payments to purchase unsold RINs. [EPA-HQ-OAR-2015-0111-
1908-A1 p.9]
Finally, we urge EPA to take steps to penalize OPs who opt for a CWC-only option and do not
make a good faith effort to buy available RINs on the market. [EPA-HQ-OAR-2015-0111-1908-
Al p.9]
Cool Planet Energy Systems
You have used EMTS numbers of actual production in 2014 and likely 2015. We see this as a
critical aspect of ensuring that liquid gallons produced are utilized, and the EPA waiver is not
used to substitute for the use of actual physical gallons. We believe that the approach of using
actual volumes placed on the EMTS system, and adjusting the RVO each January from the
previous year could be something that works for both producers and obligated parties. It ensures
that the 'right number' is picked each year. [EPA-HQ-OAR-2015-0111-2572 p. 1]
DriveGreen LLC
If EPA is depending on the market then it must insure that the market in RINs is not distorted by
its own actions. In the case of Cellulosic RINs, EPA must insure that its sale of CWCs does not
prevent the market in cellulosic RINs from functioning as Congress intended. CWCs should not
be willy nilly sold to Obligated Parties but rather should only be sold when the Obligated Parties
can justify their use. This interpretation squares with the express language of the EISA itself,
which calls for the EPA in its implementing regulations to limit the availability of cellulosic
waiver credits in order 'to assist market liquidity and transparency, to provide appropriate
certainty for regulated entities and renewable fuel producers, and to limit any potential misuse of
cellulosic biofuel credits to reduce the use of other renewable fuels . . '3 [EPA-HQ-OAR-2015-
0111-1822-A1 p. 4]
Without a clear statement from the EPA, a misunderstanding of the availability of CWCs may
continue. EPA must adopt a clear position which gives Obligated Parties the understanding that
they are required to purchase as many RINs as are available at a reasonable price before they are
able to utilize CWCs. To do so is not only consistent with Congressional intent, but will aid both
the proper function of the RFS2 program, and the growing success of cellulosic biofuel
producers. EPA has the existing authority to implement this position since §80.1456(e) provides
that 'Cellulosic biofuel waiver credits under this section will only be able to be purchased on
forms and following procedures prescribed by EPA.' (Emphasis added). EPA should
immediately prescribe such procedures to make clear, as its previous comments have, that a
showing must be made on the unavailability of actual Cellulosic Biofuel or RINs at reasonable
prices before CWCs can be bought. Such a statement will correct the current market distortion
and encourage Obligated Parties to participate in the purchase of actual Cellulosic RINs. This
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action is needed since 2014 and 2015, unlike previous years when no Cellulosic fuel existed, are
the first years under RF S2 when a market exists to allow purchase of actual Cellulosic fuels
instead of CWCs. [EPA-HQ-OAR-2015-0111-1822-A1 p. 9]
CWC waiver credit revenues should be distributed to the D-3 producers who can demonstrate to
EPA that they offered their RINs at reasonable prices but were unable to sell them to capture any
of the CWC waiver credit price value. If EPA keeps the revenues produced by sale of CWCs,
then the subsidy Congress intended to go to Cellulosic Biofuel producers will not materialize.
However, by permitting producers to come in and demonstrate the failure of the marketplace to
provide the intended subsidy and then allocating to them pro-rata the revenues which were
generated by sale of CWCs, EPA will be aiding in correcting the market distortions which its
own ambivalence and delays created. [EPA-HQ-OAR-2015-0111-1822-A1 p. 9-10]
3' 42 U.S.C. § 7545(2)(D)(iii) (2014) (emphasis added).
DuPont
The intended use of CWCs is to demonstrate compliance only in cases where obligated parties
are able to establish with EPA that insufficient cellulosic biofuel RINs were available in the
marketplace to meet their respective RVO. Waiver credits were not intended to provide an
alternative means of compliance with the cellulosic biofuel RVO. Hence, per this text, EPA has
a responsibility to ensure use of the credits is limited to the intended purpose. [EPA-HQ-OAR-
2015-01 ll-1826-Alp.26]
Enerkem
Furthermore, Enerkem would like to emphasize the need for the EPA to take immediate action to
remedy the market distortions and investment chill caused by the over-supply of cellulosic
waiver credits. Cellulosic biofuels producers have observed that obligated parties are choosing to
purchase cellulosic waiver credits instead of purchasing actual gallons of cellulosic ethanol with
D3 RINs. They can do this because EPA has chosen to provide one cellulosic waiver credit for
every liquid gallon of cellulosic biofuel required for blending. Given that one of the principal
goals of the RFS was to incentivize the development and commercialization of the next
generation of ultra-low carbon biofuels (ie. cellulosic ethanol), the fact that obligated parties are
in no way required to purchase actual gallons of cellulosic ethanol to meet their obligations has
emerged as a major flaw which must be addressed rapidly in order not to sabotage the
commercialization of the cellulosic ethanol plants currently coming on-line and the development
of new projects. Project financing is extremely difficult to secure in an environment where
investors are unsure whether there will be a market for their new products.
We recommend that the EPA fix this administrative problem by requiring that available
cellulosic RI Ns be retired before allowing refiners access to cellulosic biofuel waiver credits.
[EPA-HQ-OAR-2015-0111-1940-Alp.2]
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Quad County Corn Processors Cooperative (QCCP)
We again urge EPA to make available only an amount of waiver credits that is necessary to
offset the 'gap' between the total volume ofcellulosic biofuelproduction plus surplus D3 RINs
and the cellulosic RVO. [EPA-HQ-OAR-2015-0111-1817-A1 p.3-4]
'Limiting the credits' uses': The intended use of CWCs is to demonstrate compliance only in
cases where obligated parties are able to establish with EPA that insufficient cellulosic biofuel
RINs were available in the marketplace to meet their respective RVO. Waiver credits were not
intended to provide an alternative means of compliance with the cellulosic biofuel RVO. Hence,
per this text, EPA has a responsibility to ensure use of the credits is limited to the intended
purpose. [EPA-HQ-OAR-2015-0111-1817-A1 p.5]
In summary, we believe that the Agency has the authority to make available a quantity of CWCs
that is less than the final cellulosic biofuel RVO, and any decision to do so would be consistent
with the Agency's own interpretation of its legal authorities under the statute — even while it is a
different position than the one set forth by U.S. EPA in the final rule. We urge EPA to use its
administrative authority to only issue annually the amount of CWCs that are necessary to offset
the 'gap' between physical production plus D3 RINs and the level of the cellulosic biofuel RVO.
[EPA-HQ-OAR-2015-0111-1817-Alp.6-7]
Syngeta
The agency allows refiners and obligated parties to acquire waiver credits to meet 100% of their
blending obligation which, in turn, forces QCCP to sell the cellulosic biofuels at a discount. This
agency practice of issuing 'blanket' waivers instead of fully considering production capacity for
all facilities reflects poorly on the entire cellulosic biofuel industry because it is not an accurate
representation of how much product is actually available for the market. This hinders further
investment in the industry and limits producers' ability to plan effectively due to the lack of
certainty on how much value they will be able to extract for producing a more advanced biofuel.
[EPA-HQ-OAR-2015-0111-2493-Alp.3]
Union of Concerned Scientists
Our specific recommendations include:
• Consider changes to the process of setting cellulosic volume targets and issuing cellulosic
waiver credits to ensure a well-functioning market for cellulosic fuel. [EPA-HQ-OAR-
2015-01 ll-2260-Alp.2]
Increased production ofcellulosic biofuels is critical to the RFS realizing its oil saving and
climate objectives, and increased production will require substantial investment. This investment
depends upon prospective producers having clarity about the compliance value of fuels they may
produce. The policy design of the RFS provides a cap on the compliance value ofcellulosic fuels
in the form of the cellulosic waiver credit (CWC), and in the circumstance that cellulosic
production is falling short of the statutory targets, this should suggest that cellulosic fuels would
be valued at or near this cap value. [EPA-HQ-OAR-2015-0111-2260-A1 p.7]
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However, complexities in accurately projecting the supply of cellulosic fuel, legal restrictions
based on court rulings, policy uncertainty and developing pathways all combine to create a risk
that cellulosic producers may not be able to claim the full theoretical compliance value of their
fuel. Two related issues emerge, related to how EPA projects cellulosic biofuel availability and
the procedures related to the CWC. [EPA-HQ-OAR-2015-0111-2260-A1 p.7]
We have heard directly from industry sources that obligated parties are in some cases choosing
to purchase cellulosic waiver credits (CWCs) rather than actual gallons of cellulosic biofuels.
This is creating liquidity problems in the market for cellulosic biofuels with the result that
cellulosic producers must sell their fuel at a significant discount to the waiver credit price plus an
advanced gallon. [EPA-HQ-OAR-2015-0111-2260-A1 p.7]
While the cellulosic waiver credit mechanism was designed to cap the cost of cellulosic credits,
it should not be administered in a manner depresses prices significantly below the cap price.
While the market for cellulosic gallons is obviously a developing market, we urge EPA to
consider mechanisms to ensure that there is no uncertainty about the ability of cellulosic fuel
producers to sell their fuel at a reasonable price, and that cost containment mechanisms do not
inadvertently depress these prices. [EPA-HQ-OAR-2015-0111-2260-A1 p.7]
Some experts in academia and industry have proposed processes to true up the developing
market for RINs year to year as a way of providing greater certainty to both cellulosic fuel
producers and obligated parties. One approach was described by James Stock (Stock 2015B).1
Such a true up process would improve the functioning of this market in a manner that honors the
statutory requirement for cost containment and court order for a neutral approach to the
cellulosic mandates without undermining the support for investments in cellulosic biofuels that
are clearly critical to the success of key RFS goals. EPA should seriously consider these or other
modifications to the administration of the cellulosic volumes and waiver credits aimed at
increasing stability and predictability for all market participants. [EPA-HQ-OAR-2015-0111-
2260-A1 p.7]
In the absence of a true up mechanism for cellulosic mandates, it is especially important to
ensure that EPA does not underestimate the potential RIN generation from new and existing
pathways. In particular, the emergence of significant cellulosic credits from renewable natural
gas should be fully accounted for, including consideration of the relatively low technology risk
associated with these pathways, and the potential for additional RIN generation from the use of
biogas based electricity for transportation in the future, which could lead to a relatively quick
increase in credit generation once the paperwork is complete. [EPA-HQ-OAR-2015-0111-2260-
Al p.7-8]
1 Stock, James H. "Administering the Cellulosic Requirements under the Renewable Fuel
Standard with Increasing and Uncertain Supply." 2015.
http://scholar.harvard.edu/stock/publications/adminstering-cellulosic-requirements-under-
renewable-fuel-standard-increasing-and
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ZeaChem Inc.
Furthermore, we acknowledge that EPA providing cellulosic waiver credits when shortfalls in
actual production occurs in a given year serves the purpose of balancing the D3 RIN market for
that year and creates a pricing metric for D3 RINs that reflects the D5 RIN plus the D3 waiver
credit. We ask that EPA not offer waiver credits while actual production volume based D3 RINs
are still available for purchase in the market at comparable prices or banked/carried over so as
not to offer a competing financial product that is preferable to actual production volume based
D3 RINs. [EPA-HQ-OAR-2015-0111-1906-A1 p.2]
Response:
EPA received comments requesting that we make changes to the way cellulosic waiver credits
(CWCs) are made available to obligated parties. These comments are beyond the scope of this
rulemaking. EPA's current regulations, published in March 2010, outline the provisions for
CWCs (See 40 CFR 80.1456). In the NPRM, EPA did not propose any changes to these
provisions, nor did we specifically seek comment on this issue.
10.6.8 Biointermediates
Comment:
Advanced Biofuels Association (ABFA)
As we suggested in our Executive Summary, a key area of concern for ABFA members is the
delay and complications arising out of EPA's interpretation of how the RFS regulations are
supposed to function. [EPA-HQ-OAR-2015-0111-2498-A1 p.6]
This issue, referred to as the 'intermediate feedstock issue,' is casting a large cloud over a number
of innovative technologies and limiting the ability of many in the industry to bring production to
the market as originally contemplated both by Congress and EPA in its initial RFS rulemaking.
[EPA-HQ-OAR-2015-0111-2498-Alp.6]
This one area is currently impeding the progress of several companies from being able to create
an intermediate feedstock that can be used to generate a drop-in fuel and associated RINs under
the program. [EPA-HQ-OAR-2015-0111-2498-A1 p.7]
Timing is of utmost importance and we urge you to expedite a solution set as quickly as possible
to resolve the current uncertainty surrounding intermediate feedstocks and co-location. We
recommend that EPA simply address this issue in the final RVO in response or, at the very least,
issue a rulemaking at your earliest opportunity in the form of a Direct Final Rule. [EPA-HQ-
OAR-2015-0111-2498-A1 p.8]
An option EPA might consider is simply require the facility that is co-processing the
intermediate feedstock be required to enter into the Quality Assurance Plan program that would
oversee the feedstock production and feedstock utilization at a renewable fuel production facility
or petroleum refinery to provide the assurance that there would not be double counting of
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potential RINs or the creation of RINs from non-renewable feedstocks. [EPA-HQ-OAR-2015-
0111-2498-A1 p.8]
Algae Biomass Organization (ABO)
ABO also urges EPA to further accelerate approval of new fuel pathways to eliminate the
backlog of pending pathway approvals, and to initiate immediately a rule making process for co-
location and intermediate feedstocks that maximizes the opportunity for advanced biofuel
developers to deploy the broadest possible set of feedstocks and conversion technologies. [EPA-
HQ-OAR-2015-0111-1951-A1, p.2]
Cool Planet Energy Systems
In addition, we would like to see some critical issues addressed by EPA to support the growth of
the cellulosic biofuels industry:
1) We need to be able to generate RINS from bio-intermediates and finishing the production of
fuel in separate locations, which can be handled under a Quality Assurance Program (QAP)
2) Feedstock pathway approval expedited [EPA-HQ-OAR-2015-0111-2572 p. 2]
Union of Concerned Scientists
On behalf of our members and supporters we urge EPA to quickly establish an equitable
approach for qualifying and attributing Renewable Identification Numbers (RINs) to renewable
biofuel pathways that proceed through a biointermediate generated at one facility and then
subsequently co-processed or refined into a finished fuel at a second location that may be
operated by a different entity. EPA has established pathways for certain biointermediates such as
biogas and algae oil, but other biointermediates are in limbo, lacking guidance on how EPA
plans to consider additional applicable biofuel pathways. We are concerned that without
resolution, regulatory uncertainty could hinder investment in important and emerging low carbon
renewable biofuel pathways. The need for these biointermediate pathways is especially urgent
because biointermediates can expand production of drop-in cellulosic biofuels that are not
affected by the blending challenges facing ethanol. [EPA-HQ-OAR-2015-0111-3523-A1 p. 1]
Low carbon renewable fuels are an important part of a comprehensive approach to cut oil use
and reduce carbon emissions from the transportation sector. Upgrading crude biointermediate
products on a small scale is expensive and inefficient; allowing existing refiners to convert these
products into finished renewable fuels would maximize present production capabilities while
allowing biointermediate producers to focus on improving and optimizing their conversion
processes. Optimization strategies may be best implemented by biointermediate producers and
downstream refiners independently. [EPA-HQ-OAR-2015-0111-3523-A1 p. 1]
The purposes of the Energy Independence and Security Act of 2007 (EISA) to promote
renewable fuels and to reduce greenhouse gas emissions are quite clear, and EISA does not
require feedstock supply and fuel production facilities to be co-located. We urge EPA to clarify
how the RFS program can accommodate biofuel pathways that proceed through a
biointermediate requiring additional processing elsewhere in the supply chain. Allowing for such
arrangements will increase the volume of available renewable fuel and expedite the development
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of advanced biofuel production — particularly cellulosic biofuel production. [EPA-HQ-OAR-
2015-0111-3523-A1 p. 1]
Furthermore, qualifying such pathways would not only increase overall renewable fuel
production, but could also offer additional avenues for obligated parties to meet compliance
obligations. [EPA-HQ-OAR-2015-0111-3523-A1 p. 1-2]
We support efforts by EPA to develop and impose reasonable registration, tracking, and
accounting requirements on all entities involved in the renewable fuel production process.
Existing registration, quality assurance, and FUN tracking requirements can and should be
applied equally to biofuel processes that proceed through a biointermediate. [EPA-HQ-OAR-
2015-0111-3523-A1 p. 2]
EPA should act without delay to ensure that all applicable biointermediates pathways can
contribute to the RFS program. We encourage EPA to issue guidance to clarify how co-
processing arrangements should be structured under the RFS. Issuing such guidance is consistent
with the goals of the RFS and will help ensure that additional volumes of renewable fuel,
especially cellulosic fuels, become available as quickly as possible. We do not believe that a
rulemaking process is required as there are clear precedents for how to view and track
biointermediates along the biofuel supply chain. However, If EPA does pursue the rulemaking
option to clarify biointermediates arrangements within the RFS program we encourage the
Agency to address individual biointermediate pathways during the intervening years on a case-
by-case basis using its company specific petition process authority. [EPA-HQ-OAR-2015-0111-
3523-A1 p. 2]
Response:
A number of commenters urged EPA to establish an approach for qualifying and attributing
Renewable Identification Numbers (RINs) to renewable biofuel pathways that proceed through
an intermediate generated at one facility and then subsequently processed into a finished
renewable fuel at a second location. Commenters requested EPA allow this intermediate
feedstock (referred to as a biointermediate) to be used as a qualifying feedstock to produce
renewable fuels and generate associated RINs under the RFS program. These commenters and
numerous other industry members state that this is an important option to reduce the costs and
enhance the availability of cellulosic and other advanced biofuels. Commenters stressed the
urgency needed to resolve this issue so that there would be regulatory certainty regarding the use
of biointermediates as a renewable fuel feedstock and investments could be made in developing
technologies to use these feedstocks to produce new cellulosic and other advanced biofuels.
While commenters varied in the approach they believed EPA should take (e.g., through issuing
guidance, undertaking a rulemaking, or approving facility-specific petitions on a case-by-case
basis), all believed that the production of renewable fuel using biointermediates should be
eligible to generate RINs. Many suggested the use of EPA's RFS Quality Assurance Plan (QAP)
provisions as a way to provide assurance that RINs generated for renewable fuel produced from
biointermediates were valid (e.g., they were not double-counted, they were not created from non-
renewable feedstocks, etc.).
These comments are beyond the scope of this rulemaking. However, we note that the existing
RFS regulations did not envision nor address situations wherein multiple facilities are involved
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in the conversion of renewable feedstocks into a so-called "biointermediate" product and then
transported to another facility that completes the conversion of the biointermediate feedstock into
an approved renewable fuel. We believe that the most straightforward approach to address this
situation is through a rulemaking process. We believe a rulemaking, as opposed to guidance, is
necessary to provide clarity for stakeholders and for proper compliance and enforcement
oversight. We are currently working on a rulemaking that would amend the RFS program to
allow for RIN generation for renewable fuel produced from such biointermediates and expect to
propose these changes sometime in 2016, at which time we will seek public comment on our
proposed approach. It is important to note that under the existing RFS regulations, however,
renewable fuels must continue to be produced from renewable feedstocks at a single facility in
order to be eligible to generate RINs.
Some of the topics raised in comments in this section are addressed in more detail elsewhere. See
the following:
Section 2.3.1: Congressional Intent to Increase Volumes
Section 10.6.3: RIN-Generating Pathway Approvals
10.7 Small Refineries and Small Refiners
Comment:
Small Refinery Owners Coalition
Yet in the year in which small refinery hardship was most acute - 2013 - EPA chose to adopt a
more stringent standard for hardship relief, denying relief to any refinery that, notwithstanding
the disproportionate cost of compliance with the rule, remained profitable. EPA made this
change to the hardship standard without seeking feedback from small refineries, without public
notice and comment, and without revising the regulation that articulates the hardship
standard. [EPA-HQ-OAR-2015-0111-2339-A1 p. 17-18]
Instead, EPA has begun to phase-out hardship relief, making it more difficult to secure, and
denying hardship relief to any small refinery that, notwithstanding the disproportionate economic
hardship that the rule imposes, remains profitable. The financial condition of small refineries that
cannot meet substantially all of their obligation through blending will grow worse over time as
national renewable fuel volumes approach levels specified by EISA and the ability to blend
remains constrained by the blend wall. [EPA-HQ-OAR-2015-0111-2339-A1 p. 104-105]
The Coalition proposes that hardship relief should be available to any small refinery that can
demonstrate that the cost of complying with the rule (including RIN sharing discounts) has
increased the refinery's total operating expense by 3% or equals 5% of net income before RIN
expenses and after adjustments for actual or pro forma taxes. Adopting this formulation will
provide an objective standard that is not only fair, but will be easier to apply and give a level of
certainty to small refiners who now must try to guess if EPA will decide that an applicant for
relief is "profitable enough."
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Higher RIN prices mean higher compliance costs for small refineries (those that cannot blend
and those that blend but lack market power to retain the RIN value although they need it for
compliance). Small refineries will bear all of the risk of EPA's efforts to drive investment in
higher renewable fuel blends through higher priced RINs. [EPA-HQ-OAR-2015-0111-2339-A1
p. 21]
Response:
The commenter suggests that EPA has changed its methods for determining whether a small
refinery experiences disproportionate economic hardship from its RFS obligations to grant or
deny exemption requests under CAA section 21 l(o)(9)(B), making it more difficult to obtain an
exemption. The commenter proposes an alternative test for granting exemptions. The comments
on this issue are beyond the scope of this rulemaking. EPA did not solicit comments, nor did it
propose changes, on this topic. EPA notes that we disagree that we have changed our approach
and, further note that recent court decisions have upheld EPA's approach.45
The commenter expresses concern that small refineries will bear all of the risk of EPA's
efforts to drive investment in higher renewable fuel blends through higher priced RINs. EPA has
addressed the cost of the RFS program generally in its memo, "A Preliminary Assessment of RIN
Market Dynamics, RIN Prices, and Their Effects."46 As that memo explains, market analysis
suggests that obligated parties are generally recovering their RIN costs in the price of the
petroleum fuels they produce.47 In other words, EPA does not believe that small refineries are
inherently adversely affected by Congressional efforts to increase the amount of renewable fuel
that is contained in transportation fuel sold or introduced into commerce in the United States.
Responses to comments about the impact of RIN prices on the fuel industry can be found in
Section 7.3.
45 See Hermes Consolidated, LLCv. EPA, 787 F.3d 568 (D.C. Cir. 2015). See also Lion Oil Co. v. EPA, 792 F.3d
978 (8th Cir. 2015).
46 Available in the docket for this rulemaking at EPA-HQ-OAR-2015-0111-0062.
47 See also, Knittel, C.R., Meiselman, B.S., Stock, J.H., The Pass-Through of RIN Prices to Wholesale and Retail
Fuels under the Renewable Fuel Standard. National Bureau of Economic Research, Cambridge, MA. 2015.
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