July 27, 2014 The Honorable Gina McCarthy Administrator U.S. Environmental Protection Agency 1200 Pennsylvania, Ave. ,N.W

. Washington, D

.C. 20460 RE: [Docket ID No. EPA-HQ-OAR-2015-0111-0002] Request for Commenton 2014, 2015 and 2016 Standards for the Renewable Fuel Standard Dear AdministratorMcCarthy: The Association ofEquipment Manufacturers (AEM) appreciates the opportunity to comment on the Environmental Protection Agency's (EPA) proposed 2014,2015 and 2016 blend levels under the Renewable Fuel Standard (RFS) as set forth in the Energy Independence and Security Act of 2007. AEM is the U.S

.-based international trade group serving the off-road equipment manufacturing industry. AEM members number more than 900 companies that manufacture equipment, products and services used worldwide in the agriculture, construction, forestry, mining and utility fields

. Ourmembers are committed to encouraging a robust renewable fuels industry. AEM strongly encourages EPAto not move forward with its proposal to decrease the level of ethanol blended into ournation's fuel supply. We believe the proposed rule is shortsighted for several reasons. Negative Impacts on the Development ofAdvanced Biofuels and the Equipment Industry In the development ofthe RFS, Congress wisely encouraged the creation ofan advanced biofuels industry, namely cellulosic ethanol. Cellulosic ethanol is produced from non-foodstuff plant material and AEM believes the collection ofthis biomass material represents a significant market for new categories ofequipment. Our industry has worked with the Department ofEnergy and cellulosic ethanol producers to develop the best methods for collectingbiomass. The biomass necessary for cellulosic ethanol production will likely begathered in large square bales as theyrepresent the best feedstock management tool for fuel projects, both agricultural waste collection and energy dedicated crop farming, because ofbenefits derived from infield storage, ease oftransport, reduced size ofproject fuel yard and handling equipment, reduced trucking costs and better farm management. Because ofthe market driving force ofthe RFS, several advanced biofuels projects are set to begin or ramp up production in 2014. Based on these developments webelieve demand for 200balers will be created this year. This infant market is valued at $25 million. However, ifthe RFS is left intact, by 2022 webelieve this market can grow to 14,000 balers worth $2.1 billon. Each baler will need shredders and collection wagons along with accompanying tractors to pull them. Furthermore, for the collection ofcanes and energy crop grasses producers will need modified sugar caneharvesters and swathers/windrowers to operate with the balers. Also it is estimated that 30percent ofthe balers will likely beused in combination with a combine

. These equipment needs increase the market potential for ourequipment to more than $4 billion because ofadvanced biofuels. To position ourselves to take advantage ofthis comingmarket opportunity several AEM members have invested considerable resources in R&D to fulfill the specific demands ofbiomass collection for fuel production. Our industry is excited about the economic opportunities presented by an advanced biofuels sectorbut we cannot stress enough that, for the moment, the development ofthis young market is largely dependent on investors' confidence in the RFS staying intact. Tampering now with the RFS will likely cause an exodus ofinvestment capital which could permanently stunt its growth. 

### EPA Lacks Authority to Lower Blend Levels Based on Existing Infrastructure Capabilities and Sets Poor Precedent In the RFS Congress granted the EPAthe authority to adjust blend levels based on anticipated biofuels production. However, EPA's recentproposal, for the first time, adjusts the 2014 overall volumes based on criteria not clearly identified in the law below anticipated production levels of biofuels and even below previous years' RFS levels. EPA sited in their proposed rule a lack ofexisting fueling infrastructure to deliver biofuels beyond a perceived "blend wall" ofElO

. Not only does EPA not have the authority to make this determination, but utilizing this course oflogic is both curious and sets a dangerous precedent. First, limiting the RFS to levels that can be met with existing infrastructure eliminates incentives to invest in the infrastructure necessary to meet our domestic policy goal ofincreasingbiofuels production and use, creating a never-ending loop in which we never install the required infrastructure

. Secondly, the existing shortfall in fueling infrastructure is the direct result ofoil companies deliberately deciding to not install it. EPA's proposed rule hands the oil industry a major victory. From now onthey will be able to site a lack ofinfrastructure, which they can continue to avoid installing, as a tool to avoid losing additional market share to biofuels. Why the EPA has chosen to side with the oil industry atthe expense ofrenewable biofuels is beyond our comprehension. 

### Increased Greenhouse Gas EmissionsWhile the EPA proposed rule calls for fewer gallons ofcleanerbiofuels to beused its decision will not lower the amount offuel American's bum in 2014. This means those gallons of renewable fuels will have to be replaced by something and that will be gasoline.
According to a lifecycle analysis done byresearchers at the Argonne National Laboratory and published in thejournal Environmental Research Letters, com-based ethanol produced between 2008 and 2012 reduced GHG emissions by an average of34% compared to gasoline. This analysis included hypothetical indirect land use change (ILUC) emissions. The GHG saving from advanced biofuels is even more dramatic. IfEPA moves forward with its proposed rule it will directly lead to the burning ofhundreds of millions ofadditional gallons ofgasoline, emitting tons ofGHG into the atmosphere. Negative Impact on Rural America EPA's reduction ofethanol use in 2014 will not only stall the construction ofnew advanced biofuels facilities but it will also cause layoffat existing plants as they reduce their production capacity. This will have a very real impact on the rural economy as the renewable fuels industry has become a key playerin many communities. Fordecades, the economic condition ofrural America has been in steady decline as young adults migrated to urban areas for education and employment opportunities. How to solvethis problem has been the focus ofmuch attention, and therenewable fuels industry has shown itselfto bea critical part ofthe solution. A 2012 economic study performed for the Renewable Fuels Association shows this sector supported 90,200 directjobs and 311 ,400 indirectjobs in 2011. Thosejobs were spread across the country, with many ofthem located in rural areas. And according to the Nebraska Public Power District, the average ethanol plant has the following economicimpact on a rural community: $100 million in capital construction investment; a boost ofmore than $70 million to the local economy during construction; expansion ofthe local economicbases by another $70 million per year; approximately 35 new direct full-timejobs and another 80-90 additionaljobs in the area; increased household income of$7 million annually; and millions ofdollars in increased local, state and federal tax revenues. Higher Gasoline Prices Given that, on average, ethanol is a dollar cheaper to produce than a gallon ofgasoline, EPA's proposed rule to increase gasoline consumption will create upward pressure on the price consumers pay at the pump. Several studies have proven the link between ethanol and lower gas prices. In 2008, The Department ofEnergy stated that without ethanol Americans would bepaying 20 to 35 cents more per gallon ofgas. Also in 2008, researchers at Iowa State University found that without current ethanol production gasoline would be 29 to 40 cents per gallon higher. Since that time the production ofethanol has seen significant increases resulting in even greater savings. A 2012 study by Michigan State University looked at the impact ofethanol on gas prices in 20I0. Theirresults determined that, depending on the regional ofthe country, ethanol lowered gas prices .58 cents to $1.37. Conclusion AEM strongly believes ifEPA moves forward with its proposal to lowerbiofuel blend levels it will severely weaken the development ofthe advanced biofuels industry, eliminating a significant new market for agricultural equipment manufactures. Additionally, the proposed rule would harm the environment, rural economy, raise gas prices and give oil companies the power to dictate ournational renewable fuels policy. Again, we urge EPA to not reverse course on the RFS

. Sincerely,

Nick Yaksich Vice President