Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-15-01072/USCOURTS-caDC-15-01072-0/pdf.json

Parties Involved:
Environmental Protection Agency
Respondent
National Biodiesel Board
Petitioner

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 27, 2016 Decided December 20, 2016

No. 15-1072

NATIONAL BIODIESEL BOARD,

PETITIONER

v.

ENVIRONMENTAL PROTECTION AGENCY,

RESPONDENT

On Petitions for Review of Administrative Actions of the

United States Environmental Protection Agency

Consolidated with 15-1073

_____

Bryan M. Killian argued the cause for petitioner. With him 

on the briefs were David B. Salmons and Sandra P. Franco.

Perry M. Rosen, Attorney, U.S. Department of Justice, 

argued the cause for respondent. With him on the brief was

John C. Cruden, Assistant Attorney General, and Susan 

Stahle, Of Counsel, U.S. Environmental Protection Agency.

Before: TATEL, BROWN, and KAVANAUGH, Circuit Judges.

USCA Case #15-1072 Document #1651793 Filed: 12/20/2016 Page 1 of 22
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Opinion for the Court filed by Circuit Judge TATEL. 

TATEL, Circuit Judge: Petitioner, a trade association 

representing the domestic biofuel industry, challenges the 

Environmental Protection Agency’s decision to allow a group 

of Argentine biofuel producers and other companies to use 

certain recordkeeping practices in connection with sales of 

their product in the United States. Petitioner separately 

challenges the regulation, promulgated in 2010, pursuant to 

which EPA granted the Argentine application. Although this 

case implicates a pressing international issue—whether EPA 

is meeting its responsibility to protect against harmful global 

land-use changes resulting from our country’s demand for 

renewable fuels—we can resolve it on familiar terrain. 

Petitioner’s challenge to the 2010 regulation is untimely, and 

EPA’s decision to grant the Argentine application was neither 

arbitrary nor capricious, as it comports with agency 

regulations and rests upon the kind of highly technical 

judgments to which we owe agencies great deference.

I.

Established by Congress in 2005, the Renewable Fuel 

Standard (RFS) program requires transportation fuel—the 

kind used in cars and sold at gas stations—to include specific 

amounts of “renewable fuel” made from planted crops, trees, 

animal waste, algae, or other alternatives to traditional fossil 

fuels. Energy Policy Act of 2005, Pub. L. No. 109–58, 

§ 1501, 119 Stat. 594 (codified as amended at 42 U.S.C. 

§ 7545(o)). In 2007, Congress amended the program both to 

significantly increase use of renewable fuel and to ensure this 

increase would reduce greenhouse-gas emissions and thereby 

“lower the risk of climate change.” 75 Fed. Reg. 14,670, 

14,799; see id. at 14,673, 14,843; Energy Independence and 

Security Act of 2007, Pub. L. No. 110–140, §§ 201–204, 121 

Stat. 1492 (codified as amended at 42 U.S.C. § 7545(o)). 

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Specifically, recognizing that demand for renewable fuels 

might spur land-use changes like deforestation, which 

exacerbate greenhouse-gas emissions and wreak ecological 

harm, Congress mandated that renewable fuel from planted 

crops come from agricultural land already cleared or 

cultivated prior to the 2007 statute’s enactment. 42 U.S.C. 

§ 7545(o)(I)(i). See e.g., 75 Fed. Reg. at 14,692.

In order to accomplish this objective, Congress defined 

“renewable fuel” as “fuel that is produced from renewable 

biomass” and specified that “renewable biomass” means, as 

relevant here, “[p]lanted crops and crop residue harvested 

from agricultural land cleared or cultivated at any time prior 

to December 19, 2007, that is either actively managed or 

fallow, and nonforested.” 42 U.S.C. §§ 7545(o)(1)(J),

(o)(1)(I)(i).

To implement the RFS program, the statute directs EPA 

to “promulgate regulations to ensure that gasoline sold or 

introduced into commerce in the United States . . . contains 

the applicable volume of renewable 

fuel,” id. § 7545 (o)(2)(A)(i), including “compliance 

provisions applicable to refineries, blenders, distributors, and 

importers” of renewable fuels, id. § 7545(o)(2)(A)(iii)(I). 

Pursuant to that authority, EPA took the actions challenged 

here.

Renewable fuel is made from plant material, known as 

feedstock, typically sent from farms to grain elevators, then to 

crushers, and eventually to fuel producers, who transform it 

into renewable fuel. Biofuel produced abroad and intended for 

use by domestic refiners—the subject of this litigation—is 

often sent from producers to importers, who then sell the 

renewable fuel for incorporation into domestic transportation 

fuel.

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Under the RFS program, producers and importers of 

renewable fuel generate “Renewable Identification Numbers” 

(RINs)—codes that correspond to batches of fuel. See 40 

C.F.R. §§ 80.1452, 80.1426. In turn, refiners and importers 

acquire RINs to demonstrate that they have introduced into 

the transportation-fuel supply the requisite amount of 

renewable fuel. 42 U.S.C. § 7545(o)(3)(B)(ii)(I); see 40 

C.F.R. § 80.1405(c); Hermes Consolidated, LLC v. EPA, 787 

F.3d 568, 572 (D.C. Cir. 2015) (describing the RFS program).

In 2010, EPA promulgated a final rule that imposes 

recordkeeping requirements on RIN-generating producers and 

importers in order to verify that crops used in renewable fuel 

production come from qualified land, i.e., land in cultivation 

prior to December 19, 2007. 75 Fed. Reg. at 14,699–701; 40 

C.F.R. § 80.1454. The Rule gives producers and importers 

three options. 40 C.F.R. §§ 80.1454(c)(1), (g), (h).

The first, individual tracking, requires producers or 

importers to keep, but not provide to EPA unless requested, 

(1) “[m]aps or electronic data identifying the boundaries of 

the land” where each type of feedstock was harvested, (2) 

“commercial documents showing the quantity of feedstock 

purchased from each area . . . and showing each transfer of 

custody from the location where it was produced to the 

renewable fuel production facility,” and (3) records sufficient 

to verify that the feedstock came from land cleared or 

cultivated prior to December 19, 2007, such as sales records. 

Id. § 80.1454(c)(1).

The second option, aggregate compliance, excuses from 

recordkeeping requirements “any producer or RIN-generating 

importer” in a country subject to an approved aggregate 

compliance plan. Id. § 80.1454(g). A country is eligible for 

the aggregate compliance approach if EPA determines that its 

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total amount of agricultural land is no higher than it was in 

2007. See id. § 80.1457 (establishing the petition process for 

the aggregate compliance approach for foreign counties). 

United States domestic renewable-fuel producers are currently 

exempt from recordkeeping requirements based on EPA’s 

finding that total U.S. agricultural land has not exceeded its 

2007 baseline. Id. § 80.1454(g). Only one foreign country—

Canada—has sought and obtained an approved aggregate 

compliance regime. 76 Fed. Reg. 14,007.

A third option—the one at issue here —is the alternative 

tracking requirement. 40 C.F.R. § 80.1454(h). Under this 

provision, a “foreign or domestic renewable fuel producer or 

RIN-generating importer” can participate in an industryfunded program in which an “independent third party 

conduct[s] a comprehensive program of annual compliance 

surveys . . . to be carried out in accordance with a survey plan 

which has been approved by EPA.” Id. §§ (h), (h)(1). The 

independent surveyor must perform “feedstock audits of 

renewable fuel production and import facilities” and “[o]btain 

the records and product transfer documents associated with 

the feedstocks being audited.” Id. §§ (h)(3)(i)–(ii). The 

surveyor must “[c]onfirm that feedstocks used to produce 

RIN-generating renewable fuels” come from qualifying land, 

and “[i]mmediately notify EPA” of noncompliance. Id.

§§ (h)(3)(iv)–(vi). Overall, annual surveys must be 

“representative” of the entities in the survey area and 

“[d]esigned to achieve the same level of quality assurance”—

that is, the same level of confidence that renewable fuels 

come from qualified land—as the individual tracking and 

aggregate compliance options. Id. §§ (h)(2)(iii)–(iv).

In 2012, the Argentine Chamber of Biofuels (CARBIO), 

a nonprofit association of biodiesel producers, soybean 

growers, warehouses, and oil-crushing mills, submitted a 

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comprehensive survey program for EPA’s approval as an 

alternative tracking program. In considering the application, 

EPA required CARBIO to answer many questions about its 

proposal and submit additional materials in the form of seven 

addenda. Some two-and-a-half years later, EPA approved the 

application, finding that CARBIO’s proposal satisfied section 

80.1454(h)’s requirements.

The plan works like this. Using historical satellite 

images, CARBIO begins by identifying land cleared or 

cultivated prior to 2007. CARBIO then classifies these lands 

as either “go areas,” from which feedstock may be used, or 

“no go areas.” When feedstock arrives at a crushing plant, 

each shipment is inspected—using a document known as a 

carta de porte, or waybill—to ensure that the zip code of 

origination matches an identified go area. If ineligible land 

falls within a zip code, no feedstock from that zip code may 

qualify. The plan calls for the independent surveyor to visit 

each producer and crushing plant at least once a year, as well 

as some five percent of grain elevators and farms. Any 

feedstock supplier, such as a farm or grain elevator, not 

visited in a given year will submit to a desk audit of its 

product-transfer documents to verify compliance with the 

Rule’s qualified-land restriction. 

On November 13, 2013, while EPA was considering 

CARBIO’s proposal, Petitioner National Biodiesel Board 

(NBB) sent a letter to EPA expressing concern about the 

viability of enforcing an alternative tracking program abroad 

and requesting that EPA “provide the public with notice and 

comment on any proposed survey plan for foreign feedstocks 

and production before EPA takes any action.” On January 27, 

2015, EPA approved the CARBIO proposal and responded to 

NBB, explaining that “[g]iven the significant notice and 

comment process used to develop [the recordkeeping] 

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regulations,” the agency “d[id] not find it appropriate to create 

additional notice and comment processes for each plan 

approval as you suggested in your letter.” 

NBB then filed these petitions for review. In case number 

15-1073, Petitioner seeks review of the 2010 Rule that 

established the alternative tracking program. 75 Fed. Reg. 

14,670. In case number 15-1072, Petitioner challenges EPA’s 

approval of CARBIO’s alternative tracking proposal. We 

consolidated the cases and heard them together at oral 

argument.

II.

EPA offers a threshold objection to the petitions for 

review—that NBB lacks Article III standing. In response, 

NBB asserts that it has standing on behalf of its members: 

domestic producers who will suffer injury as a result of 

increased competition from Argentine biodiesel.

Article III standing requires “injury in fact” that is “actual 

or imminent” and “fairly . . . trace[able] to the challenged 

action of the defendant” as well as “likely . . . redress[able] by 

a favorable decision.” Lujan v. Defenders of Wildlife, 504 

U.S. 555, 560–61 (1992) (internal citations and quotation 

marks omitted). Under the doctrine of competitor standing, 

economic actors “suffer constitutional injury in fact when 

agencies lift regulatory restrictions on their competitors or 

otherwise allow increased competition.” Louisiana Energy 

and Power Authority v. FERC, 141 F.3d 364, 367 (D.C. Cir. 

1998). An association, such as NBB, may represent the 

interests of its members if—the issue here—“at least one of 

[its] members has standing to sue in [its] . . . own right.” See 

American Library Association v. FCC, 401 F.3d 489, 492 

(D.C. Cir. 2005).

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This case differs little from Delta Construction v. EPA, 

783 F.3d 1291 (D.C. Cir. 2015) (per curiam), in which we 

held that an importer and seller of a vegetable-based fuel 

suffered constitutional injury as a result of “EPA regulations 

that incentivize[d] other renewable fuels like electricity sold 

by its competitors.” Id. at 1299. Here it is “self-evident” that 

NBB members meet the constitutional prerequisites of injury, 

causation, and redressability, as approval of the CARBIO plan 

incentivizes importation of renewable fuels that will compete 

with domestic production, and an order vacating that approval 

would eliminate the resultant competitive harm. Id. at 1299–

1300 (quoting White Stallion Energy Center, LLC v. EPA, 748 

F.3d 1222, 1256 (D.C. Cir. 2014), cert granted on other 

grounds sub nom. Michigan v. EPA, 135 S. Ct. 702 (2014)).

Declarations submitted by NBB confirm that its members 

“compete with imports” in the U.S. biodiesel market.

With standing established, we turn to Petitioner’s 

challenges.

III.

We begin with NBB’s attack on section 80.1454(h), 

which EPA promulgated in 2010. 75 Fed. Reg. 14,670. EPA 

argues that the challenge is untimely.

Section 307(b)(1) of the Clean Air Act provides that a 

petition for review of any nationally applicable regulations:

shall be filed within sixty days from the date notice 

of such promulgation, approval, or action appears in 

the Federal Register, except that if such petition is 

based solely on grounds arising after such sixtieth 

day, then any petition for review under this 

subsection shall be filed within sixty days after such 

grounds arise.

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42 U.S.C. § 7607(b)(1). NBB failed to challenge the Rule 

until it initiated this action some five years after notice was 

promulgated—despite exhaustively commenting during the 

rulemaking process and then even intervening on behalf of 

EPA in support of the Rule in a lawsuit before this circuit.

National Petrochemical and Refiners Association v. EPA, 630 

F.3d 145 (D.C. Cir. 2010). NBB nonetheless maintains that, 

for several reasons, its challenge to the Rule is timely.

First, NBB notes that section 307(b)(1)’s provision for 

judicial review after the initial sixty days “if such petition is 

based solely on grounds arising after,” 42 U.S.C. 

§ 7607(b)(1), includes “the occurrence of an event that ripens 

a claim.” American Road & Transportation Builders 

Association v. EPA, 588 F.3d 1109, 1113 (D.C. Cir. 2009). It 

follows, says NBB, that approval of the CARBIO proposal 

conferred on it a newly ripened claim because until that point 

it had no idea that EPA would “interpret its regulation in an 

arbitrary way” that would injure its members. Petitioner’s 

Br. 52.

On this point, NBB relies on our decision in Coalition for 

Responsible Regulation, Inc. v. EPA, 684 F.3d 102, 129–32 

(D.C. Cir. 2012), aff’d in part, rev’d in part sub nom. Utility 

Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014), in 

which we held that section 307(b)(1) did not bar industry 

petitioners’ challenge to a longstanding EPA program when a 

new rule expanded the program “to never-regulated sources” 

operated by those industries. Id. at 130. The new rule gave 

petitioners “newly ripened” claims against the program 

because, as we explained, prior to its expansion the prospect 

that the program would injure petitioners was too speculative 

to confer jurisdiction on the court. Id. at 131. Here, in stark 

contrast, NBB members were subject to the Rule on day one, 

which is why NBB both participated in the rulemaking 

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process and intervened in litigation challenging the Rule. 

Instead of defending the Rule, NBB members could have 

argued then that the Rule’s recordkeeping requirements were 

insufficient to protect against the importation of nonqualified 

renewable fuel. Because NBB was well positioned to 

challenge the Rule on these grounds when it was first 

promulgated, the CARBIO plan conferred on NBB no “newly 

ripened” claim. See Sierra Club de Puerto Rico v. EPA, 815 

F.3d 22, 26–28 (D.C. Cir 2016) (explaining that Coalition left 

unchanged the principle that mere application of a regulation, 

“without anything more,” falls short of “after-arising 

grounds.”).

Coalition aside, NBB’s argument that the CARBIO plan 

gives rise to a newly ripened claim because, prior to it, the 

recordkeeping regulations “could potentially have been 

applied by EPA in a manner that would not have injured 

Petitioner or its members,” reveals the true “grounds” upon 

which NBB seeks to challenge EPA: the agency’s decision to 

grant the CARBIO proposal as an application of the Rule not

the Rule itself. Petitioner’s Br. 52. We consider that issue in 

Part IV, infra.

NBB next argues that its challenge is timely because EPA 

“reopened” the Rule when it approved the CARBIO proposal. 

The reopener doctrine allows an otherwise untimely challenge 

to proceed “where an agency has—either explicitly or 

implicitly—undertaken to ‘reexamine its former choice.’” 

National Mining Association v. Department of the Interior, 70 

F.3d 1345, 1351 (D.C. Cir. 1995) (quoting Public Citizen v. 

Nuclear Regulatory Commission, 901 F.2d 147, 151 (D.C. 

Cir. 1990)). The CARBIO proposal is, the argument goes, a 

“constructive” reopening of the Rule, which “occurs if the 

revision of accompanying regulations ‘significantly alters the 

stakes of judicial review’ as the result of a change that ‘could 

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have not been reasonably anticipated.’” National Resources 

Defense Council v. EPA, 571 F.3d 1245, 1266 (D.C. Cir. 

2009) (per curiam) (quoting Sierra Club v. EPA, 551 F.3d 

1019, 1025 (D.C. Cir. 2008)). We have described the 

magnitude of alteration required to invoke this doctrine as a 

“sea change,” and have declined to apply it when “the basic 

regulatory scheme remains unchanged.” Id. As the Rule 

expressly establishes that foreign producers may seek 

approval of an alternative tracking program, the CARBIO 

plan neither alters that regulatory framework nor works a 

change that NBB members could not have reasonably 

anticipated. To the extent NBB argues that the CARBIO 

proposal is out of line with the Rule, this is—yet again—a 

challenge to EPA’s application of the Rule rather than to the 

Rule itself.

For these reasons, NBB’s petition for review of the Rule 

is untimely under section 307(b)(1) and is, accordingly, 

dismissed.

IV.

We now turn to the heart of this case—whether EPA 

erred when it approved the CARBIO plan. NBB challenges 

EPA’s action on both procedural and substantive grounds.

With respect to procedure, NBB contends that EPA erred 

when it approved the CARBIO plan via informal adjudication 

without public notice and comment. As a general matter, 

“agencies have ‘very broad discretion whether to proceed by 

way of adjudication or rulemaking.’” Qwest Services Corp. v. 

FCC, 509 F.3d 531, 536 (D.C. Cir. 2007) (quoting Time 

Warner Entertainment Co. v. FCC, 240 F.3d 1126, 1141 

(D.C. Cir. 2001)). Not only does the Rule do nothing to fetter 

this discretion, but it expressly requires public notice and 

comment for country-wide aggregative compliance 

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applications, see 40 C.F.R. §§ 80.1454(g)(1), 80.1457, while 

imposing no notice and comment requirement for the 

approval of alternative tracking plans like the one submitted 

by CARBIO, id. § 80.1454(h).

NBB insists that EPA’s approval of the CARBIO 

proposal was, in effect, a rule that required notice and 

comment, not an adjudication, because the plan “provides a 

new set of substantive standards for future conduct, 

indefinitely applying to a large number of entities,” involves 

“several policy determinations,” and leaves “key facts . . .

unresolved.” Reply 11-12. But we need not meditate on the 

sometimes-fuzzy line between rulemaking and informal 

adjudication because EPA’s approval of the CARBIO plan 

was a straightforward instance of adjudication. Only after a 

two-and-a-half-year process, during which EPA frequently 

asked for new information and modifications to the proposal 

and CARBIO submitted several addenda, did the agency

approve the CARBIO plan. The nature of that proceeding 

“reflect[s] a highly fact-specific, case-by-case style” 

characteristic of adjudication. Conference Group, LLC v. 

FCC, 720 F.3d 957, 965 (D.C. Cir. 2013) (quoting AT&T v. 

FCC, 454 F.3d 329, 333 (D.C. Cir. 2006)). The approval, by 

its own terms, applies only to the CARBIO program; indeed, 

NBB never even suggests that an entity other than CARBIO 

or its producer-members could avail itself of the program 

without making a separate application to EPA. That the 

CARBIO plan will survey some yet-unidentified feedstock 

suppliers hardly transforms the approval into a rulemaking, 

lest every element of a license application need be set in stone 

to escape notice and comment. Under NBB’s theory, an 

agency could not by adjudication issue a permit to transport 

cargo without first knowing who would drive the truck. And 

as we have explained, the fact that an agency action applies to 

a “large number of licensees” “carr[ies] [little] weight” in our 

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analysis. Goodman v. FCC, 182 F.3d 987, 994 (D.C. Cir. 

1999).

On to NBB’s substantive objection: that approval of the 

CARBIO plan was arbitrary and capricious. Our standard of 

review under the Clean Air Act is the same as under the 

Administrative Procedure Act, 5 U.S.C. § 706(2)(A), and we 

will affirm EPA’s action “if the record shows EPA considered 

all relevant factors and articulated a ‘rational connection 

between the facts found and the choice made.’” Catawba 

County v. EPA, 571 F.3d 20, 41 (D.C. Cir. 2009) (per curiam) 

(quoting Burlington Truck Lines v. United States, 371 U.S. 

156, 168 (1962)). That said, we will not hesitate to overturn 

agency action as arbitrary and capricious if the agency fails to 

“comply with its own regulations.” Environmentel, LLC v. 

FCC, 661 F.3d 80, 85 (D.C. Cir. 2011). Critical to our 

resolution of this challenge, we give an “extreme degree of 

deference to EPA when it is evaluating scientific data within 

its technical expertise.” Catawba, 571 F.3d at 41 (quoting 

City of Waukesha v. EPA, 320 F.3d 228, 247 (D.C. Cir. 2003) 

(alteration omitted)). This deference is especially appropriate 

when EPA “acts under ‘unwieldy and science-driven’

statutory schemes like the Clean Air Act.” Bluewater

Network, 372 F.3d 404, 410 (D.C. Cir. 2004) (quoting 

Husqvarna AB v. EPA, 254 F.3d 195, 199 (D.C. Cir. 2001)).

NBB contends that EPA’s approval of the CARBIO 

proposal was arbitrary and capricious because the plan fails to 

comply with the alternative tracking requirements set out in 

40 C.F.R. § 80.1454(h) in three ways: (1) its omission of 

importers; (2) its reliance on satellite technology, as well as 

waybills for verifying the origin of feedstock; and (3) its 

failure to identify, in advance, participating feedstock 

producers and other entities in the supply chain. We consider 

each in turn.

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A.

NBB first argues that the CARBIO plan is out of sync 

with the Rule because it fails to include importers. As 

designed, the CARBIO proposal tracks the fuel supply chain 

from farm through biodiesel production, but not thereafter. As 

NBB points out, however, section 80.1454(h) appears to 

suggest, in three places, that a survey plan must include 

producers and importers. 40 C.F.R. §§ 80.1454(h)(2)(ii) 

(specifying that surveys must be “[c]onducted at renewable 

fuel production and import facilities and their feedstock 

suppliers”) (emphasis added); (h)(2)(iii) (requiring surveys to 

be “[r]epresentative of all renewable fuel producers and

importers in the survey area”) (emphasis added); (h)(3)(i) 

(requiring “feedstock audits of renewable fuel production and

import facilities in accordance with the survey plan”) 

(emphasis added).

EPA responds that the best reading of section 80.1454(h) 

is that only an alternative tracking plan sponsored by RINgenerating importers needs to include importers, whereas the 

CARBIO proposal is sponsored by RIN-generating producers. 

“[W]e review an agency’s interpretation of its own 

regulations with ‘substantial deference.’ ” In re Sealed Case, 

237 F.3d 657, 667 (D.C. Cir. 2001) (quoting Thomas 

Jefferson University v. Shalala, 512 U.S. 504, 512 (1994)). 

Even without that deference, however, we can readily adopt 

EPA’s interpretation given our obligation to “read . . . words 

‘in their context and with a view to their place in the 

overall . . . scheme.’” King v. Burwell, 135 S. Ct. 2480, 2489 

(2015) (quoting FDA v. Brown & Williamson Tobacco Corp., 

529 U.S. 120, 133 (2000)).

Section 80.1454(h) specifies that “[a]ny foreign or 

domestic renewable fuel producer or RIN–generating 

importer” may adopt an alternative tracking requirement. 

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(emphasis added). Elaborating, section 80.1454(h)(1) states 

that “a renewable fuel producer or importer” must sponsor an 

independent survey plan in order to comply. (emphasis 

added). The Rule thus provides that either RIN-generating 

producers or RIN-generating importers may sponsor an 

alternative tracking plan, and, by implication, without 

participation from the other. Given that the purpose behind 

these recordkeeping provisions is to ensure that entities 

generating RINs can produce the records needed to verify that 

renewable fuel comes from qualified land, we agree with EPA 

that little additional value would flow from requiring a 

producer, once it has generated the RIN and possesses those 

records, to continue monitoring its product downstream. By 

contrast, if an importer is the RIN-generating entity, then 

biofuel producers are upstream, and an importer can only 

possess the necessary documentation if it has tracked the 

product from the farm to its doors. This second scenario is, 

EPA explains, why the three provisions cited by NBB 

inelegantly refer to producers and importers. Respondent’s 

Br. 50–51.

Additional textual clues favor EPA’s view. For one thing, 

as EPA points out, the alternative tracking program is open to 

any “foreign or domestic renewable fuel producer.” 40 C.F.R. 

§ 80.1454(h) (emphasis added). At the moment, domestic 

producers are subject to the aggregate compliance regime, 

based on EPA’s determination that the total amount of 

agricultural land in the United States is no higher than it was 

in 2007. Id. § 80.1454(g). Were the United States to exceed 

that 2007 baseline and become ineligible for the aggregate 

compliance regime, then domestic producers could avail 

themselves of alternative tracking. Under that scenario, it 

would make no sense to interpret the regulations as requiring 

a program sponsored by domestic producers to include 

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“importers”—domestic fuel, unlike domestic beer, is never 

imported.

Second, the alternative tracking approach must “achieve 

at least the same level of quality assurance” as individual 

tracking. Id. § 80.1454(h)(2)(iv). Because individual tracking 

regulations do not require producers to track what importers 

do with renewable fuel, EPA notes, it would be logical to 

interpret alternative tracking in the same way. See id.

§ 80.1454(c)(1).

Third, as EPA observes, the regulation’s preamble 

includes not a single reference to importers. According to 

EPA, this demonstrates that it “envisioned [alternative 

tracking] survey plans from renewable biomass producers

need not reach the actions of importers in the context of the 

alternative tracking program.” Respondent’s Br. 51; see 75 

Fed. Reg. at 14,700.

Fourth, reading the regulation in EPA’s preferred manner 

creates no gap in the regulatory scheme. Approval of an 

alternative tracking plan only allows participating entities to 

avail themselves of section 80.1454(h)’s recordkeeping 

provisions. Non-participating entities, like RIN-generating 

importers, remain subject to section 80.1454(c)(1)’s

individual tracking requirements, as well as to other 

regulatory provisions that stand independent of the 

recordkeeping measures in section 80.1454. See, e.g., 40 

C.F.R. § 80.1451(d) (directing producers and RIN-generating 

importers to submit quarterly reports that include “electronic 

data identifying the land . . . from which each type of 

feedstock . . . was harvested.”).

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Taken together, these features of the regulation 

demonstrate that the CARBIO plan’s omission of importers is 

consistent with the best reading of the Rule.

B.

NBB’s second argument rests on the Rule’s requirement 

that an alternative tracking plan must be “[d]esigned to 

achieve the same level of quality assurance” as the individual 

tracking and aggregate compliance options. 

Id. § 80.1454(h)(2)(iv). According to NBB, several features 

of the CARBIO plan make it less likely than these other 

recordkeeping regimes to ensure that feedstock comes from 

qualified land.

One such feature is the plan’s use of satellite technology 

to identify land cleared or cultivated prior to 2007, a 

methodology NBB calls too “untested” and ill-defined to 

provide the requisite level of quality assurance. For several 

reasons, this claim fails on the launch pad.

For one thing, under the regulation, the CARBIO plan 

must provide “the same level of quality assurance” as the 

individual and aggregate compliance approaches. Id. 

§ 80.1454(h)(2)(iv). Because the regulation establishing the 

petition process for aggregate compliance plans expressly 

contemplates the use of “[s]atellite imagery or data” to 

evaluate when land was cleared or cultivated, how could the 

CARBIO plan possibly fall short for doing precisely the same 

thing? See id. §§ 80.1457(b)(3)(i), (b)(4)(i).

In any event, we can hardly imagine a more appropriate 

occasion to defer to EPA’s expert judgment than its 

assessment of whether a particular satellite methodology can 

accurately measure environmental change. Indeed, Petitioner 

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has identified no basis in the record to upset the agency’s 

conclusion as to CARBIO’s use of satellite technology.

The CARBIO proposal includes 23 pages explaining its 

methodology. Relying predominantly on images collected by 

NASA’s Landsat program, the plan takes electromagnetic 

data gathered by sensors on Landsat satellites and then 

employs algorithms to transform that data into categories of 

land use. EPA is well-positioned to evaluate the proposal’s 

technical feasibility, as the agency itself uses satellite data to 

measure international land-use changes as part of its analysis 

of lifecycle greenhouse-gas emissions in the Renewable Fuel 

Standard program. See EPA, Renewable Fuel Standard 

Program Regulatory Impact Analysis, 317 (2010). Moreover, 

the Landsat program is, since the launch of its first satellite in 

1972, “the longest continuous space-based record of Earth’s 

land in existence.” NASA, About Landsat, 

http://landsat.gsfc.nasa.gov/?page_id=2. Today, the program 

produces images capable of spotting “[w]hen a new road 

appears in the dense forests of Peru[] or a baseball diamondsized patch of forest is felled in the Republic of Congo.” 

NASA, Staying Alert: How a New Landsat-Based Tool Spots 

Deforestation, http://landsat.gsfc.nasa.gov/?p=12335. 

Researchers have used Landsat data to view and characterize 

subtle vegetation changes in the Alaskan tundra. Junchang Ju 

and Jeffrey G. Masek, The Vegetation Greenness Trend in 

Canada and US Alaska from 1984-2012 Landsat Data, 176 

Remote Sensing of Environment 1 (2016). These do not strike 

us as markers of an unproven or untrustworthy technology.

NBB believes that the land categories adopted in the plan 

will result in the misclassification of native forests as 

qualified land. But the proposal classifies native forests as 

“other vegetation” and specifies that “go areas” will exclude 

that category. Without context, NBB’s passing reference to 

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the plan’s treatment of wetlands provides an insufficient basis 

to set the agency’s action aside. Petitioner’s Br. 42–43. The 

plan requires CARBIO—not the independent surveyor—to 

identify go areas. Yet nothing in the Rule precludes such an 

arrangement and, for good measure, the proposal specifies 

that a third party will verify its maps on an annual basis. 

NBB separately contends that the plan’s reliance on 

satellite imagery to verify historical land use runs afoul of the 

Rule’s requirement that the independent surveyor “[o]btain 

the records and product transfer documents associated with 

the feedstocks being audited.” 40 C.F.R. § 80.1454(h)(3)(ii)

(emphasis added). This is so, it maintains, because these 

images cannot constitute “records” within the meaning of that 

provision. NBB gives us no basis—nor can we divine one—

for concluding that the expansive term “record” excludes 

historical satellite images.

NBB also takes issue with the plan’s use of waybills. 

Under the plan, waybills are inspected to ensure feedstock 

was sent from a zip code that matches an identified go area. If 

ineligible land falls within a zip code, no feedstock from that 

zip code may qualify.

NBB thinks this system is inadequate because waybills 

display only whether feedstock was shipped from a qualifying 

zip code, so shipments made from qualifying land could 

contain unqualified feedstock. In other words, NBB fears that 

qualified land might launder unqualified feedstock. But any 

concern about feedstock laundering is equally present under 

the individual tracking regime and, as noted above, 

CARBIO’s proposal need achieve only the “same level of 

quality assurance” as individual tracking. Id. 

§ 80.1454(h)(2)(iv) (emphasis added); see also id. 

§ 80.1454(c)(1)(i)(B) (relying on transfer documents from 

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qualified land to show the quantity of feedstock purchased 

from each area and to verify the chain of custody for said 

feedstock). Moreover, the CARBIO proposal, like other 

alternative tracking programs, includes independent audits to 

verify compliance by feedstock suppliers, as opposed to the 

passive recordkeeping requirements of individual tracking.

In a related argument, NBB contends that the CARBIO 

plan fails to explain how it will prevent mixing of qualified 

and unqualified feedstock. Again, however, NBB never 

explains how the CARBIO plan is any more deficient in this 

respect than the individual tracking regime—the relevant 

question. Moreover, the CARBIO plan provides, with no 

direct analogue under the individual tracking provision, for 

use of a “mass balance” approach, which ensures that RINs 

are only generated in proportion to the quantity of qualified 

biomass. Additional regulatory requirements—independent of 

the recordkeeping provisions at issue—impose a 

responsibility to segregate qualified renewable fuel from 

nonqualified renewable fuel. See, e.g., 40 C.F.R.

§§ 80.1466(d)(vi)(B), (j)(1). 

Having been given no basis to disturb EPA’s conclusion 

that the CARBIO plan is “[d]esigned to achieve the same 

level of quality assurance” as the individual tracking and 

aggregate compliance regimes, we move on to NBB’s final 

challenge.

C.

Under section 80.1454(h)(2)(iii), “annual compliance 

surveys . . . must be . . . [r]epresentative of all renewable fuel 

producers and importers in the survey area and representative 

of their feedstock suppliers.” Elaborating, the Rule states that 

the “survey program must include a statistically supportable 

methodology.” 75 Fed. Reg. at 14,670. Because the CARBIO 

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proposal does not identify the survey area and all of the 

feedstock suppliers in advance, NBB argues, EPA failed to 

“rationally” assess whether the CARBIO program will use a 

sampling methodology that is “representative” of the 

feedstock suppliers. Petitioner’s Br. 35–38.

This challenge misses the regulation’s distinction 

between survey plans and surveys. See, e.g., 40 C.F.R. 

§ 80.1454(h)(1) (stating that “an independent third party 

conduct[s] a comprehensive program of annual compliance 

surveys, to be carried out in accordance with a survey plan 

which has been approved by EPA”). The regulation mandates 

representative surveys. Only in the report issued to EPA after 

a survey is complete must the independent surveyor identify 

“the covered area surveyed.” Id. § 80.1454(h)(3)(vii)(D). A 

survey plan, by contrast, must include “the parties for whom 

the survey is to be conducted,” as well as a “methodology” for 

conducting audits. Id. § 80.1454(h)(4). But the regulation 

nowhere mandates that survey plans identify feedstock 

suppliers or survey areas.

NBB’s theory—that EPA may not approve an alternative 

tracking program without knowing the full population of 

feedstock suppliers in advance—scrambles the sequence 

envisioned in the regulation. Moreover, it is unclear why EPA 

must know the precise universe of feedstock suppliers in the 

survey in order to determine, in advance, whether a 

methodology for conducting those surveys is acceptable. 

NBB separately questions whether CARBIO’s plan to use 

a “random sampling methodology with probability 

proportional to size (PPS) of feedstock amounts supplied for 

biodiesel production” is a proper statistical methodology. 

Given our highly deferential standard of review, however, we 

are more likely to brew renewable fuel ourselves than secondUSCA Case #15-1072 Document #1651793 Filed: 12/20/2016 Page 21 of 22
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guess the EPA’s determination on this highly technical point 

based on a fleeting attack by the challenger.

V.

For the foregoing reasons, we dismiss the petition in case 

number 15-1073 and deny the petition in case number 15-

1072.

So ordered.

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