Cellulosic Waiver Credit Price Calculation
for 2021 and 2022

£EPA

United States

Environ msntal Proletlicm

Agency

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Cellulosic Waiver Credit Price Calculation

for 2021 and 2022

Assessment and Standards Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency

|^A United States

Environmental Prolucliun
I M I Ag en cy

EPA-420-B-22-033
August 2022

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Cellulosic Waiver Credit Price Calculation for 2021 and 2022

For any calendar year for which the projected volume of cellulosic biofuel production is
less than the applicable volume of cellulosic biofuel set forth in Clean Air Act (CAA) section
21 l(o)(2)(B)(III), EPA must reduce the required volume of cellulosic biofuel for that year to the
projected volume, and must provide obligated parties the opportunity to purchase cellulosic
waiver credits (CWC). The price of these credits is determined using a formula specified in the
CAA.1 The cellulosic waiver credit price is the greater of $0.25 or $3.00 minus the wholesale
price of gasoline, where both the $0.25 and $3.00 are adjusted for inflation. In a rule published in
April 2015,2 EPA stated our intention to announce future CWC prices by posting a notice on our
"Renewable Fuels: Regulations & Standards" website. This document serves the required notice
that the CWC price for 2021 is $2.23 and the CWC price for 2022 is $2.31.

To determine the CWC price, EPA first determines the average wholesale (refinery gate)
price of gasoline using the most recent twelve monthly values for U.S. Total Gasoline Bulk Sales
(Price) by Refiners as provided by the Energy Information Administration (EIA) that are
available as of September 30 of the year preceding the compliance period.3 For 2021, the most
recent 12 months for which data were available as of September 30, 2020 covers July 2019
through June 2020. For 2022, the most recent 12 months for which data were available as of
September 30, 2021 covers July 2020 through June 2021. The data can be found at:
(https://www.eia. gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=EMA_EPMO_PBR_NUS_DPG
&f=M) and are summarized below in Tables 1 and 2.

Table 1 - Wholesale Gasoline Prices for 2021 CWC Calculation

Month

Average Price

July 2019

$1,882

August 2019

$1,739

September 2019

$1,752

October 2019

$1,713

November 2019

$1,668

December 2019

$1,638

January 2020

$1,662

February 2020

$1,563

March 2020

$1,100

April 2020

$0,579

May 2020

$0,816

June 2020

$1,117

Average

$1,436

1	CAA section 2ll(o)(7)(D)(ii).

2	80 FR 18136.

3	40 CFR 80.1456(d)(2).

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Table 2 - Wholesale Gasoline Prices for 2022 CWC Calculation

Month

Average Price

July 2020

$1,221

August 2020

$1,216

September 2020

$1,216

October 2020

$1,203

November 2020

$1,148

December 2020

$1,311

January 2021

$1,515

February 2021

$1,694

March 2021

$1,914

April 2021

$1,967

May 2021

$2,101

June 2021

$2,126

Average

$1,553

The CAA requires that EPA adjust for inflation the comparison values of $0.25 and $3.00
in the CWC price formula. EPA must compare the inflated $0.25 value with the amount the
inflated $3.00 value exceeds the average wholesale price of gasoline. EPA is required to use the
greater of the two values as the price for the CWCs.

EPA evaluated inflation by using the Unadjusted Index values from the Consumer Price
Index for All Urban Consumers (CPI-U): U.S. City Average, for the All Items expenditure
category as provided by the Bureau of Labor and Statistics, for the months of January 2009 (the
first comparable value after 2008) and June 2020 (for the 2021 CWC price calculation) and June
2021 (for the 2022 CWC price calculation), as specified in 40 CFR 80.1456(d)(3). These
unadjusted indexes are used to calculate an Inflation Factor for each year, as shown in Table 3
below. Finally, we compare $0.25 (inflation adjusted) to $3.00 (inflation adjusted) minus the
average wholesale price of gasoline during the most recent twelve months for which available as
of September 30 of the year preceding the compliance period (July 2019 - June 2020 for the
2021 CWC price and July 2020 - June 2021 for the 2022 CWC price). The greater of these
values is the price for the cellulosic waiver credits.

Table 3 - Inflation Adjustments

Month

Unadjusted
Index4

January 2009

211.143

June 2020

257.797

June 2021

271.696

4 Information available at: https://www.bls.gov/cpi/data.htm.

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Table 4 - Inflation Factors

CWC
Year

Months

Equation

Inflation
Factor

2021

Jan. 2009 - June 2020

1+(257.797-211.143)/211.143

1.221

2022

Jan. 2009 - June 2021

1+(271.696-211.143)/211.143

1.287

Table 5 - Cellulosic Waiver Credit Price Calculations

CWC
Year

$0.25 (Inflation
Adjusted)

$3 (Inflation Adjusted) Minus
Wholesale Price of Gasoline

CWC Price (Larger of
the two values, rounded
to the nearest cent)

2021

$0.25*1.221=$0.31

($3.00* 1,221)-$1.436=$2.227

$2.23

2022

$0.25*1.287=$0.32

($3.00*1.287)-$1.553=$2.308

$2.31

As shown in Table 5, using the data sources for the inflation adjustment that are specified
in this announcement results in a CWC price of $2.23 for 2021 and a CWC price of $2.31 for
2022.

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