## Summary	of	Interagency	Working Comments	on	Draft	Language	under

EO13563	Interagency	Review.		Subject	to	Further	Policy	Review.
**Comments on U.S. Environmental Protection Agency’s final**  **rule titled, “**  **Regulation of Fuels and Fuel Additives: RFS Pathways II, and Technical Amendments to the RFS Standards and E15 Misfueling**  **Mitigation Requirements ,” RIN 2060** **- AR21**  **. EPA RESPONSE**  **TO OM B COMMENTS**  **Cellulosic content of feedstock greater than 75% QUESTION #1**  Will EPA clarify whether this threshold also applies to corn kernel fiber or any other feedstock that may have some corn starch content? If for example, 25% of corn kernel fiber’s c ontent were corn starch, then this would mean that all of the ethanol produced from that starch would qualify as cellulosic biofuel? **EPA Response:** Under the cellulosic content threshold approach, fuels made from feedstocks that EPA determines meet this minimum 75% cellulosic content threshold will be eligible to generate cellulosic biofuel RINs for the entire fuel volume produced, so long as the producer’s registration demonstrates their production process has the ability to convert cellulosic components
. This includes crop residues such as corn kernel fiber, which has an average adjusted cellulosic content of 87%. Based on available data, the actual amount of starch that adheres to corn kernel fiber after separation from the rest of the corn kernel is typically less than 5 percent of the total mass of the separated corn kernel , which we believe is a de minimus amount

. While EPA has determined that corn kernel fiber meets the 75% cellulosic content threshold, o nly corn kernel fiber that has been separa ted from the starch and is being processe d into ethanol separately will be eligible to generate cellulosic biofuel RINs for the entire fuel volume produced

. If corn kernel fiber is processed simultaneously with the corn starch ( in situ ) , producers will not be able to allocate cellulosic RINs for any non

- cellulosic portion of the feedstock. Rather, they will need to determine how much of the fuel is derived from the cellulosic components (e.g., through a mass balance calculation ) and allocate cellulosic and non cellulosic RINs as required by the existing regulations at 1426(f)(3)

.
**QUESTION #2** EPA’s comp i led data on cellulosic feedstock concentrations in Table 2 of the draft memo to the docket titled, “Cellulosic Content of Various Feedstocks,” indicates th at corn kernel fiber has an average of 87% cellulosic material. Does this mean that any corn starch that would be left in the corn kernel fiber that would be converted to biofuel could count as cellulosic or as corn ethanol? **EPA Response:** No. As descri bed in Question #1, i f corn kernel fiber is processed simultaneously, producers will not be able to allocate cellulosic RINs for any non

- cellulosic portion of the feedstock. Rather, they will need to determine how much of the fuel is derived from the cellu losic components (e.g., through a mass balance calculation ) and allocate cellulosic and non

cellulosic RINs as required by the existing regulations at 1426(f)(3)

.

## Summary	of	Interagency	Working Comments	on	Draft	Language	under

EO13563	Interagency	Review.		Subject	to	Further	Policy	Review.
W here the corn kernel fiber is separate d from the starch and converted to biofuel separate ly, there may be some small amount of remaining starch that adheres to the corn kernel fiber . As noted below, on average only 3.5% of separated corn kernel fiber is starch

. The remaining material is protein and lipids. We consider the amount of corn starch adhering to the separated corn kernel fiber to be a de minimis amount. I f some small amount of starch is converted into biofuel it would be eligible to generate RINs. We are adding clarifying language to the preamble that if a producer fails to use best efforts to separate adhering corn starch in an attempt to boost production of cellulosic biofuel from processing corn kernel fiber, the adhering starch will not be considered a de minimis contaminant, and the entire batch of resulting fuel will not be co nsidered derived from crop residue and will not qualify as cellulosic biofuel. Further, while EPA has sought to minimize excessive or burdensome compliance , new registration and record keeping requirements for cellulosic fuel producers have been establish ed to allow EPA to identify irregularities in cellulosic fuel production. Specifically, EPA is requiring cellulosic producers to report the expected overall fuel yield for each of their feedstocks at registration , and to calculate and report the overall fu el yield for each batch of fuel produced

. Taken together with the new ongoing testing and reporting requirements for the cellulosic converted fraction (new tests and calculations are to be reported annually or every 500,000 cellulosic RINs
– whichever com es first) , this information will allow EPA to identify processes that are generating more cellulosic RINs than can be expected given the reported process data

.
**QUESTION #3** Did EPA specify any mass balance or other verification provisions in the regula tory text that would differentiate any biofuel produced from corn starch contained in corn kernel fiber or any other corn based feedstock? **EPA Response:** As described in our response to question #1 above, t here are provisions in the regulatory text requiri ng producers processing corn kernel fiber in situ to use reasonable analytical methods ( e.g., a system specific material balance) to quantify the portion of the finished fuel attributable to the starch and cellulose respectively (§ 80.145 1 (b)(1)(ii)(U). T he regulatory framework requires the cellulosic converted fraction (cellulosic CF) to be obtained using a reasonable analytical method approved during registration, and further requires the CF to be recalculated at prescribed intervals or fuel volume based trigger points using the same calculation method approved at registration. Specifically, § 80.1451 (b)(1)(ii)(U) requires producers processing corn kernel fiber in situ to calculate the cellulosic converted fraction on an annual basis or upon generating every 500,000 gallons of cellulosic fuel. If the cellulosic converted fraction is different than previously calculated, the formula used to generate RINs must be updated. Under § 80.1451 (b)(1)(ii)(U) producers processing corn kernel fiber in situ must als o notify EPA within 5 business days and adjust the formula used to generate RINs if the cellulosic Converted Fraction deviates from the previously calculated value by 10% or more. EPA also prepared and included in the docket, a memo outlining various anal ytical methods for calculating the cellulosic CF, and provided an example RIN attribution calculation for a hypothetical in situ process producing ethanol from both corn starch (non

- cellulosic) and corn kernel fiber (cellulosic) simultaneously.

## Summary	of	Interagency	Working Comments	on	Draft	Language	under

EO13563	Interagency	Review.		Subject	to	Further	Policy	Review.

**QUESTION #4**  EPA states in Table 5 of the “Cellulosic Content of Various Feedstocks” draft memo that the average cellulosic content ranged from 75% to 92%. What is the reason for choosing 75% over some other percentage up to 92%? **EPA Response:** This approach minimi zes burdens and streamlines program implementation for both cellulosic biofuel producers and EPA. This simplified implementation provides incentives for production of fuels that are 75% or greater in cellulosic content. EPA believes this percentage , which is well over a 50% or “majority” value, is sufficiently significant to allow full qualification . A higher percentage would require accounting for a progressively small non

cellulosic portion of the feedstock and therefore result in regulatory and administrative burdens on the use of feedstocks which are predominantly cellulosic. This figure is within EPA’s exercise of discretion to reasonably interpret the Clean Air Act and consistent with the objective that fuel made from feedstocks that are predominantly cellulosic are able to generate cellulosic biofuel RINs for their entire fuel volume. Based on interagency feedback, EPA has added additional language to sections IV.A.2 , IV.A.3 , and IV.A.4.c further supporting this rationale and clarifying how the thresho ld will be implemented.

 **Renewable electricity for electric vehicles from landfill biogas QUESTION #5**  For the 636 landfill biogas projects that are currently operating, how will EPA verify that the biogas that is currently being converted to electricity is being used by vehicles? Where in the preamble and regulatory text is this described? **EPA Response:** EPA outlined new provisions related to registration, reporting and recordkeeping for the electricity and CNG/LNG pathways in the preamble ( section IV.C of the preamble and § 80.1426 and § 80.145 4 in the regulations ) . These provisions allow for the use of signed affidavits to prove the use or sale of ren ewable electricity and renewable CNG/LNG for transportation purposes. It is assumed that these affidav its would be signed by fleet managers or vehicle operators, verifying the use of the renewable transportation fuel. These affidavits would then be matched, by the registered fuel producer, to the delivery or sale of an equivalent amount of qualifying rene wable electricity or renewable CNG/LNG. While it is impossible to track the specific molecules or electrons, producers must show that it is theoretically feasible that the fuel produced can reach the vehicle using it.
**QUESTION #6** If the landfill biogas is already being converted to electricity for use in the transportation sector, how would this meet the 50% GHG reduction requirements? **EPA Response:** We do not think it is appropriate to differentiate between new plants and plants that converted to flari ng a fter enactment of th e s e regulations

. Since landfills that currently have gas -to
- energy projects in place at one point either replaced flaring with a gas

-to
- energy project or installed a gas

-to
- energy project as an alternative to the minimal compliance route of flaring,

## Summary	of	Interagency	Working Comments	on	Draft	Language	under

EO13563	Interagency	Review.		Subject	to	Further	Policy	Review.

we propos ed and are finalizing treat ing the emissions from these landfills compared to the same flaring baseline

. Further, t he calculated lifecycle GHG emissions are attributed to the energy equivalent electricity that displaces a corres ponding energy equivalent volume fossil derived transportation fuel. The emissions from the energy equivalent electricity generated via the biogas

-to
- electricity pathway are more than 60% less than the energy equivalent emissions attributed to the baseline fossil fuel (2005 gasoline baseline). The lifecycle GHG emissions analysis performed by EPA applies broadly to electricity produced from waste derived biogas, and can be applied to landfill biogas that is already being converted to electricity for use in the transportation sector as well. The assumptions and boundary conditions used for this analysis are presented in a memo to the docket.

 **Treatment of corn starch that adheres to corn kernel fiber after separate from DDG QUESTION #7**  In the memo to the docket titled, “Cellulosic Content of Various Feedstocks,” EPA indicates that on average 87 percent of corn kernel fiber is cellulosic material and that 13 percent is other organics. EPA defines other organics as including starch. Does EPA know wh at portion of the 13 percent was identified as being starch? **EPA Response:** O n average the other organic material consists of 3.5% starch, 5% protein, and 5% lipids.
**QUESTION #8** In the preamble section titled, “Treatment of Corn Starch that Adheres to Corn Kernel Fiber...,” EPA states that more recent and refined data better represents the current methods of starch

-fiber separation. What does the new data indicate concerning the percentage of starch that still adheres to the corn kernel after separation from DDG? **EPA Response:** In the preamble of the NPRM for this rulemaking, EPA stated that starch might compose up to 20 percent of the separated mass used to produce corn kernel fiber ethanol via a separate stream , based on data from 1998. Through the publ ic comment process, we received more recent and fine

-grained data that better represents current methods of starch

-fiber separation. Based on this newer data, we believe the actual amount of starch that adheres to the fiber after separation from the rest of the corn kernel is on average 3.5% of the total mass of the separated corn kernel fiber feedstock

. Based on interagency feedback, EPA has added additional clarifying language to the preamble.
**QUESTION #9** Will all biofuel produced from corn kernel fib er feedstock be qualified cellulosic material based on the provisions in the rule regarding the minimum threshold of 75 percent cellulosic material? For corn kernel fiber feedstock, i s there anything in the regulatory text that would prohibit biofuel prod ucers from producing cellulosic biofuel even if 25 percent of the corn kernel fiber consists of corn starch?

## Summary	of	Interagency	Working Comments	on	Draft	Language	under

EO13563	Interagency	Review.		Subject	to	Further	Policy	Review.

**EPA Response:** See responses to questions 1 and 2.
**QUESTION #10** For the corn kernel fiber feedstock pathway, is there any periodic mass

- balanc e or other requirements in the rule that would require the biofuel producer to verify that the starch content of corn kernel fiber is de minimis? **EPA Response:** See responses to questions 2 and 3.

 **Small Refinery QUESTION #1**  **1** How many small refinerie s/refiners qualified for the exemption in 2006 base d on the 75,000 bpd threshold? **EPA Response:** 57
**QUESTION #12** If the provision were evaluated for each year in isolation and not for all years back to 2006, how many refiners would qualify for the exemption in 2013 (or the most recent year that production data is available) based on the 75,000 bpd threshold? **EPA Response:** EPA does not collect data on the actual crude capacity of refineries nor is this information publically available. We are aware of one facility that has exceeded the 75,000 bpd threshold since 2006, from the company’s 10k financial report. We anticipate that two additional refineries will exceed the threshold (one this year and one next year) due to recently completed expansion proje cts at the respective facilities.
**QUESTION #13** If the provisions as written were to go into effect, how many more gallons of ethanol would need to be blended into transportation fuel? W ould the change in this exemption require the blending of ethano l in biofuel that was previously E0 and how would this effect the blend wall?
**EPA Response:** Granting or denying RFS hardships has no impact on EPA’s assessment of the capacity of the industry to produce and blend renewable fuels. Where we grant relief for an individual refinery from the cost of RFS compliance, we still conclude that overall the volumes they produce will be part of the fuel pool including the ability to blend gasoline to the E10 level. The key difference between granting or not granting relief is not whether or not renewable fuels will be produced, blended and RINs separated, but rather which parties will need to retire those RINs in order to demonstrate compliance with the RFS program.