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 Comment on 2014, 2015 and 2016 Standards for the Renewable Fuel 

Standard 

Dear Administrator McCarthy: 

The Association of Equipment 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. Our members are committed to encouraging a robust renewable fuels industry. 

AEM strongly encourages EPA to not move forward with its proposal to decrease the level of 

ethanol blended into our nation's fuel supply. We believe the proposed rule is shortsighted for 

several reasons. 

Negative Impacts on the Development of Advanced Biofuels and the Equipment Industry 

In the development of the RFS, Congress wisely encouraged the creation of an advanced biofuels 

industry, namely cellulosic ethanol. Cellulosic ethanol is produced from non-foodstuff plant 

material and AEM believes the collection of this biomass material represents a significant market 

for new categories of equipment. Our industry has worked with the Department of Energy and 

cellulosic ethanol producers to develop the best methods for collecting biomass. 

The biomass necessary for cellulosic ethanol production will likely be gathered in large square 

bales as they represent the best feedstock management tool for fuel projects, both agricultural 

waste collection and energy dedicated crop farming, because of benefits derived from infield 

storage, ease of transport, reduced size of project fuel yard and handling equipment, reduced 

trucking costs and better farm management. 

Because of the market driving force of the RFS, several advanced biofuels projects are set to 

begin or ramp up production in 2014. Based on these developments we believe demand for 200 
balers will be created this year. This infant market is valued at $25 million. However, if the RFS 

is left intact, by 2022 we believe 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 of canes and energy crop grasses producers will need 

modified sugar cane harvesters and swathers/windrowers to operate with the balers. Also it is 

estimated that 30 percent of the balers will likely be used in combination with a combine. These 

equipment needs increase the market potential for our equipment to more than $4 billion because 

of advanced biofuels. 

To position ourselves to take advantage of this coming market opportunity several AEM 

members have invested considerable resources in R&D to fulfill the specific demands of biomass 

collection for fuel production. 

Our industry is excited about the economic opportunities presented by an advanced biofuels 

sector but we cannot stress enough that, for the moment, the development of this young market is 

largely dependent on investors' confidence in the RFS staying intact. Tampering now with the 

RFS will likely cause an exodus of investment 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 EPA the authority to adjust blend levels based on anticipated 

biofuels production. However, EPA's recent proposal, 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 of existing 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 of logic 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 of increasing biofuels 

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 of oil companies 

deliberately deciding to not install it. EPA's proposed rule hands the oil industry a major victory. 

From now on they will be able to site a lack of infrastructure, 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 at the expense of renewable biofuels is 

beyond our comprehension. 

Increased Greenhouse Gas Emissions 
While the EPA proposed rule calls for fewer gallons of cleaner biofuels to be used its decision 

will not lower the amount of fuel 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 by researchers at the Argonne National Laboratory and 

published in the journal 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. 

If EPA moves forward with its proposed rule it will directly lead to the burning of hundreds of 

millions of additional gallons of gasoline, emitting tons of GHG into the atmosphere. 

Negative Impact on Rural America 

EPA's reduction of ethanol use in 2014 will not only stall the construction of new advanced 

biofuels facilities but it will also cause layoff at 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 player in many communities. 

For decades, the economic condition of rural America has been in steady decline as young adults 

migrated to urban areas for education and employment opportunities. How to solve this problem 

has been the focus of much attention, and the renewable fuels industry has shown itself to be a 

critical part of the solution. A 2012 economic study performed for the Renewable Fuels 

Association shows this sector supported 90,200 direct jobs and 311 ,400 indirect jobs in 2011. 

Those jobs were spread across the country, with many of them located in rural areas. And 

according to the Nebraska Public Power District, the average ethanol plant has the following 

economic impact on a rural community: $100 million in capital construction investment; a boost 

of more than $70 million to the local economy during construction; expansion of the local 

economic bases by another $70 million per year; approximately 35 new direct full-time jobs and 

another 80-90 additional jobs in the area; increased household income of$7 million annually; 

and millions of dollars 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 of gasoline, 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 of Energy stated that without ethanol Americans would be paying 20 to 35 cents 

more per gallon of gas. 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 of ethanol has seen significant increases resulting in even greater savings. A 2012 

study by Michigan State University looked at the impact of ethanol on gas prices in 20 I 0. Their 
results determined that, depending on the regional of the country, ethanol lowered gas prices .58 

cents to $1.37. 

Conclusion 

AEM strongly believes if EPA moves forward with its proposal to lower biofuel blend levels it 

will severely weaken the development of the 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 our national renewable fuels policy. Again, we urge EPA to not reverse course on the 

RFS. 

Sincerely, 

Nick Yaksich 

Vice President