Cellulosic Waiver Credit Price Calculation for 2024 ------- Cellulosic Waiver Credit Price Calculation for 2024 This technical report does not necessarily represent final EPA decisions or positions. It is intended to present technical analysis of issues using data that are currently available. The purpose in the release of such reports is to facilitate the exchange of technical information and to inform the public of technical developments. Assessment and Standards Division Office of Transportation and Air Quality U.S. Environmental Protection Agency NOTICE United States Environmental Protection Agency EPA-420-B-25-017 June 2025 ------- I. Introduction Under the Renewable Fuel Standard (RFS) program, for any compliance year in which EPA uses the cellulosic waiver authority under Clean Air Act (CAA) section 21 l(o)(7)(D)(i) to waive the cellulosic biofuel volume requirement, EPA is to make cellulosic waiver credits (CWCs) available for obligated parties to purchase. The price of these credits is determined using a formula specified in CAA section 21 l(o)(7)(D)(ii), which is "at the higher of $0.25 per gallon or the amount by which $3.00 per gallon exceeds the average wholesale price of a gallon of gasoline in the United States," adjusted for inflation. This document details the calculation of CWC price for 2024. II. Change to the Calculation of Cellulosic Waiver Credit Price The RFS regulations at 40 CFR 80.1456(d)(2) previously specified that the "U.S. Total Gasoline Bulk Sales (Price) by Refiners as provided by the Energy Information Administration" was to be used to determine the average wholesale price of gasoline. However, this data source is no longer being issued by the EIA and has not been updated since March 2022. As discussed in Preamble Section IV of the RFS Program: Partial Waiver of the 2024 Cellulosic Biofuel Volume Requirement final rule, EPA revised 40 CFR 80.1456(d)(2) to specify a new data source for the average wholesale price of gasoline to be used in the calculation of the CWC price. EPA is now specifying the use of gasoline spot price data reported by EIA for New York Harbor (conventional gasoline), the Gulf Coast (conventional gasoline), and Los Angeles (RBOB regular gasoline).1 III. Resulting Calculation of 2024 Cellulosic Wavier Credit Price To determine what the 2024 CWC price is using the new data sources, we first determined the average wholesale price of a gallon of gasoline in the United States using the monthly average gasoline spot price data provided by EIA for New York Harbor (regular conventional gasoline), U.S. Gulf Coast (regular conventional gasoline), and Los Angeles (regular RBOB) for the 12- month period ending June 2023. The weighting factors were then applied to the 12-month average for each data source to determine the average wholesale price of a gallon of gasoline in the United States, as summarized in Table III-1. 1 This data is publicly available at: https://www.eia.gov/dnav/pet/pet pri spt si m.htm. 1 ------- Table III-l: Average Wholesale Gasoline Prices and Weighting Factors Monthly Average Gasoline Spot Price ($/gal) Month New York Harbor U.S. Gulf Coast Los Angeles July 2022 $3.48 $3.28 $3.33 August 2022 $3.03 $2.79 $3.12 September 2022 $2.64 $2.58 $3.88 October 2022 $3.01 $2.84 $3.23 November 2022 $2.85 $2.46 $2.85 December 2022 $2.37 $2.16 $2.25 January 2023 $2.59 $2.53 $2.57 February 2023 $2.53 $2.42 $2.91 March 2023 $2.52 $2.54 $2.76 April 2023 $2.77 $2.62 $2.80 May 2023 $2.57 $2.45 $2.67 June 2023 $2.66 $2.43 $2.80 Average $2.75 $2.59 $2.93 Weighting Factor 37.5% 37.5% 25.0% Weighted Average $2.74 The CAA requires that EPA adjust for inflation the comparison values of $0.25 per gallon and $3.00 per gallon in the CWC price formula. EPA must compare the inflated $0.25 per gallon value with the amount the inflated $3.00 per gallon 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. We evaluated inflation by using the Unadjusted Index values from the "Consumer Price Index for All Urban Consumers (CPI-U): U.S. city average, all items" as provided by the Bureau of Labor and Statistics, for the months of January 2009 (the first comparable value after 2008) and June 2023 (the last month of data used for the 2024 CWC price), as specified in 40 CFR 80.1456(d)(3).2 These unadjusted indexes are used to calculate an Inflation Factor for 2024, as shown in Table TTT-2 Table III-2: Inflation Factor Month CPI-U Jan 2009 211.143 Jun 2023 305.109 Inflation Factor 1.445 2 Historical CPI-U data is available at https://www.bls.gov/cpi/tables/supplemental-files. 2 ------- Finally, we compared $0.25 per gallon (inflation adjusted) to $3.00 per gallon (inflation adjusted) minus the average wholesale gasoline price. The greater of these values is the price for 2024 CWCs, which, as shown in Table III-3, is $1.61. Table III-3: 2024 CWC Price Calculation Value Price $0.25 per gallon (Inflation Adjusted) $0.36 $3.00 per gallon (Inflation Adjusted) Minus Wholesale Price of Gasoline $1.61 CWC Price $1.61 3 ------- |